Zhejiang Supor Co., Ltd.2022 Annual Report
March 2023
SECTION I IMPORTANT NOTES, TABLE OF CONTENTS AND
DEFINITIONS
The Board of Directors and the Board of Supervisors of Zhejiang Supor Co., Ltd(hereinafter referred to as the "Company") and all its directors, supervisors and seniorexecutives warrant that this annual report is true, accurate and complete, and does notcontain any fictitious statements, misleading information or significant omissions; alldirectors, supervisors and senior executives of the Company undertake, separately andjointly, all responsibilities in relation to the truth, accuracy and completeness hereof.
Mr. Thierry de LA TOUR D'ARTAISE, person in charge of the Company, and Mr.Xu Bo, person in charge of accounting and person in charge of accounting department(accountant in charge), hereby confirm that the financial statement enclosed in thisAnnual Report is true, accurate and complete.
All directors have attended the Board Meeting in person.
It is of great uncertainty, for whether it can be realized or not depends on multiplefactors, including market change and effort of management team. Please be careful ofinvestment risks.
As for the risk factors confronted by the Company, see Part 11 "Prospects forFuture Development" of Section III "DISCUSSION AND ANALYSIS OF THEMANAGEMENT" for details.
The profit distribution plan adopted at this Board Meeting specifies that: based on805,116,907 shares, the Company distributes cash dividend of RMB 30.30 per 10 shares(tax-inclusive) to all shareholders, issues 0 bonus share (tax-inclusive) and will notconvert capital reserves to capital.
Table of Contents
SECTION I IMPORTANT NOTES, TABLE OF CONTENTS AND DEFINITIONS ...... 2
SECTION II COMPANY FILE AND MAJOR FINANCIAL INDICATORS ...... 6
SECTION III DISCUSSION AND ANALYSIS OF THE MANAGEMENT ...... 10
SECTION IV CORPORATION GOVERNANCE ...... 27
SECTION V SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES ...... 50
SECTION VI SIGNIFICANT EVENTS ...... 55
SECTION VII CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT SHAREHOLDERS ...... 64
SECTION VIII INFORMATION ON PREFERRED SHARE ...... 71
SECTION IX BONDS ...... 72
SECTION X FINANCIAL STATEMENT ...... 73
CATALOG OF REFERENCE DOCUMENTSI. 2022 Annual Report of the Company and Abstract with signature of legal representative;II. Financial statements with signature of legal representative, person in charge of accounting and person in charge of accounting departmentand seal of the Company;III. Original of audit report with seal of accounting firm and signature of certified public accountants (CPA);IV. Original of all documents and announcements published in newspapers designated by CSRC during the reporting period.Reference documents above shall be prepared by Securities Department of the Company. Securities Department of the Company
Definitions
| Items to be Defined | means | Definitions |
| SZSE | means | Shenzhen Stock Exchange |
| CSRC | means | China Securities Regulatory Commission |
| CSDCC | means | Shenzhen Branch of China Securities Depository and Clearing Corporation Limited |
| The Company/this Company/the Group | means | Zhejiang Supor Co., Ltd. |
| SEB Internationale | means | SEB INTERNATIONALE S.A.S |
| SEB Group | means | SEB S.A. |
| Zhejiang Supor Electrical | means | Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd. |
| Shaoxing Supor | means | Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd. |
| Supor Vietnam | means | Supor (Vietnam) Co., Ltd. |
| Wuhan Recycling | means | Wuhan Supor Recycling Co., Ltd. |
| Wuhan Supor Cookware | means | Wuhan Supor Cookware Co., Ltd. |
| Wuhan Supor Pressure Cooker | means | Wuhan Supor Pressure Cooker Co., Ltd. |
| Omegna | means | Hangzhou Omegna Commercial Trade Co., Ltd. |
| Shanghai Marketing | means | Shanghai Supor Cookware Marketing Co., Ltd. |
| P&R Products | means | Zhejiang Supor Plastic & Rubber Co., Ltd. |
| Yuhuan Sales Company | means | Yuhuan Supor Cookware Sales Co., Ltd. |
| SEADA | means | SOUTH EAST ASIA DOMESTIC APPLIANCES PTE. LTD. |
| AFS | means | AFS VIETNAM MANAGEMENT CO.LTD. |
| Shanghai WMF | means | Shanghai WMF Enterprise Development Co., Ltd. |
| Shanghai SEB/SSEAC | means | Shanghai SEB Electrical Appliances Co., Ltd. |
| Zhejiang WMF | means | Zhejiang WMF Housewares Co., Ltd. |
| Shaoxing Supor Housewares | means | Zhejiang Shaoxing Supor Household Products Co., Ltd. |
| Zhejiang Supor LKA | means | Zhejiang Supor Large Kitchen Appliance Co., Ltd. |
| Supor Water Heater | means | Zhejiang Supor Water Heater Co., Ltd. |
| GSIM or Indonesian Company | means | PT Groupe SEB Indonesia MSD |
| Hainan Supor E-commerce Company | means | Hainan Supor E-Commerce Co., Ltd. |
| Hainan Tefal Trading Company | means | Hainan Tefal Trading Co., Ltd. |
| 2021 Equity Incentive Plan | means | 2021 Restricted Stock Incentive Plan (Draft) |
| 2022 Equity Incentive Plan | means | 2022 Restricted Stock Incentive Plan (Draft) |
SECTION II COMPANY FILE AND MAJOR FINANCIAL INDICATORSI. Company Information
| Short Form of the Stock: | Supor | Stock Code | 002032 |
| Short Form of the Original Stock (if any) | None | ||
| Stock Exchange for Stock Listing | Shenzhen Stock Exchange | ||
| Chinese Name of the Company | Zhejiang Supor Co., Ltd. | ||
| Short Form of Chinese Name of the Company | Supor | ||
| English Name of the Company (if any) | ZHEJIANG SUPOR CO., LTD. | ||
| Short Form of English Name of the Company (if any) | SUPOR | ||
| Legal Representative | Thierry de LA TOUR D'ARTAISE | ||
| Registration Place | Damaiyu Economic Development Zone, Yuhuan, Zhejiang | ||
| Postal Code | 317604 | ||
| Historical Change Records of the Company's Registered Address | None | ||
| Office Address | 15F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China | ||
| Postal Code | 310051 | ||
| Website | www.supor.com.cn | ||
| 002032@supor.com | |||
II. Contact Person and Contact Information
| Board Secretary | Representative of Securities Affairs | |
| Name | Ye Jide | Fang Lin |
| Address | Securities Department at 23F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China | Securities Department at 23F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China |
| Tel. | 0571-86858778 | 0571-86858778 |
| Fax | 0571-86858678 | 0571-86858678 |
| yjd@supor.com | flin@supor.com |
III. Place for Information Disclosure and Archiving
| Securities exchange websites where the Company discloses the annual report | Securities Times, Securities Daily and China Securities Journal |
| Names and websites of medias where the Company discloses the annual report | www.cninfo.com.cn |
| Place for archiving of the Company's annual report: | Securities Department of the Company |
IV. Changes of Registration
| Unified social credit code | 913300007046976861 |
| Change of main business since listing of the Company (if any) | No change during the reporting period |
| Change of controlling shareholders (if any) | No change during the reporting period |
V. Other Relevant InformationCertified Public Accountants engaged by the Company
| Name of the Certified Public Accountants | KPMG Huazhen LLP (Special General Partnership) |
| Office Address of the Certified Public Accountants: | 8F, East 2 Office Building, Dongfang Square, No.1 East Chang'an Avenue, Dongcheng District, Beijing City |
| Name of the Signatory Accountants | Huang Feng, Jin Yang |
Sponsor institution engaged by the Company for performing continuous supervision duties during the reporting period
□ Applicable ? Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties during the reporting period
□ Applicable ? Not applicable
VI. Major Accounting Data and Financial IndicatorsDoes the company need to retroactively adjust or restate previous year's accounting data?
□ Yes ? No
| 2022 | 2021 | Increase/decrease | 2020 | |
| Operating income (RMB) | 20,170,527,516.66 | 21,585,331,407.47 | -6.55% | 18,596,944,289.02 |
| Net profit attributable to shareholders of listed company (RMB) | 2,067,659,526.97 | 1,943,943,608.94 | 6.36% | 1,846,221,538.10 |
| Net profit attributable to shareholders of listed company with non-recurring profit or loss deducted (RMB) | 1,888,197,965.28 | 1,858,036,556.80 | 1.62% | 1,595,178,564.27 |
| Net cash flows from operating activities (RMB) | 3,159,955,245.84 | 2,049,881,568.69 | 54.15% | 2,076,592,774.00 |
| Basic earnings per share (RMB/share) | 2.565 | 2.400 | 6.88% | 2.264 |
| Diluted earnings per share (RMB/share) | 2.564 | 2.395 | 7.06% | 2.261 |
| Weighted average return on net assets | 27.89% | 26.81% | Increased by 1.08 percentage points | 26.97% |
| End of 2022 | End of 2021 | Increase/decrease | End of 2020 | |
| Total assets (RMB) | 12,952,655,903.47 | 13,899,456,422.16 | -6.81% | 12,292,270,384.71 |
| Net asset attributable to shareholders of listed company (RMB) | 7,036,084,863.54 | 7,622,639,752.86 | -7.69% | 7,200,939,908.92 |
The Company's net profit before or after non-recurring profit and loss are deducted for the last three fiscal years, whichever is lower, is negative,and the audit report for the latest year indicates uncertainty about its continuing operation ability
□ Yes ? No
Net profit before or after non-recurring profit and loss are deducted, whichever is lower, is negative
□ Yes ? No
VII. Financial Data Difference on Principle of Domestic and Oversea Accounting
1. Net profit and net assets discrepancies in financial statements disclosed separately under International AccountingStandards and Chinese Accounting Standards
□ Applicable ? Not applicable
No net profit and net assets discrepancies in financial statements disclosed separately under International Accounting Standards and ChineseAccounting Standards existed during the reporting period.
2. Net profit and net assets discrepancies in financial statements disclosed separately under Overseas AccountingStandards and Chinese Accounting Standards
□ Applicable ? Not applicable
No net profit and net assets discrepancies in financial statements disclosed separately under Overseas Accounting Standards and ChineseAccounting Standards existed during the reporting period.VIII. Quarter-based Major Financial Indicators
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 5,611,558,380.61 | 4,712,421,364.21 | 4,656,794,210.81 | 5,189,753,561.03 |
| Net profit attributable to shareholders of listed company | 538,175,628.78 | 394,673,535.25 | 376,051,074.83 | 758,759,288.11 |
| Net profit attributable to shareholders of listed company with non-recurring profit or loss deducted | 527,260,626.62 | 381,853,666.28 | 363,133,619.23 | 615,950,053.15 |
| Net cash flows from operating activities | 364,623,903.59 | 944,220,962.74 | 716,190,474.81 | 1,134,919,904.70 |
Any difference between financial indicators or the total and relevant financial indicators disclosed in quarter-based report or semiannual report
□ Yes ? No
IX. Non-recurring Profit or Loss Items and Amount
? Applicable □ Not applicable
Unit: RMB
| Item | Amount of 2022 | Amount of 2021 | Amount of 2020 | Notes |
| Profit and loss on disposal of non-current assets (including the write-off of asset impairment provision) | -1,189,107.57 | -5,168,056.19 | -1,663,881.06 | |
| Government subsidies included into the current profits and losses (except those that are closely related to the Company's normal business operations, comply with national policies and regulations and continuously available according to certain standard quota or quantity) | 199,599,828.51 | 181,083,262.46 | 202,566,619.42 | |
| Capital occupation fee charged to non-financial enterprises included in current profits and losses | 1,849,173.62 | |||
| Enterprise restructuring costs, such as expenses for employee placement | -527,780.73 | -59,398,185.22 |
| and integration costs | ||||
| Except the effective hedging business related to the normal operation of the Company, profits and losses from fair value changes caused by the held transactional finance assets and transactional financial liabilities, and investment income acquired from disposal of transactional financial assets, transactional financial liabilities and available-for-sale financial assets | 24,264,345.88 | 5,385,851.68 | 88,892,019.40 | |
| Other non-operating incomes or expenditures except for the foregoing items | 9,796,376.97 | 6,654,792.26 | 5,607,120.28 | |
| Other profit or loss conforming to the definition of non-recurring profit or loss | 9,097,243.99 | |||
| Minus: influenced amount of income tax | 52,414,885.25 | 43,945,276.71 | 53,320,043.15 | |
| Influenced amount of minority shareholders' equities (after tax) | 67,216.12 | 554,509.76 | 136,105.05 | |
| Total | 179,461,561.69 | 85,907,052.14 | 251,042,973.83 | -- |
Other specific circumstances of other items of profits and losses complying with the definition of non-recurring profits or losses:
□ Applicable ? Not applicable
The Company does not have other specific circumstances of other items of profits and losses complying with the definition of non-recurring profitsor losses.Description of defining non-recurring profits or losses items listed in the Explanatory Announcement No.1 on Disclosure of the Information ofCompanies Offering Their Securities to the Public -- Non-recurring Profit or Loss as recurring profits and losses
□ Applicable ? Not applicable
The Company does not have the description of defining non-recurring profits or losses items listed in the Explanatory Announcement No.1 onDisclosure of the Information of Companies Offering Their Securities to the Public -- Non-recurring Profit or Loss as recurring profits and losses.
SECTION III DISCUSSION AND ANALYSIS OF THE MANAGEMENTI. Industrial Situation of the Company in the Reporting Period
Owing to impacts of the geopolitical, inflation and other factors, the year of 2022 witnessed that the global imbalance between supply anddemand intensified, energy prices rose, the growth rate of goods trade slowed down, and the global economic recovery process slowed down.Unfavorable macroeconomic factors have aggravated global consumers' worries about their purchasing power, and decreased their expenditure onnon-essential services and entertainment. The global cookware and small domestic appliance market has confronted with huge challenges. Asdomestic economic activities fluctuate, the offline consumption was affected, with the total social retail sales of consumer goods decreasing by
0.2% in the whole year, which reflects a relatively weak domestic demand. However, as a series of measures to stabilize the economy and promotethe consumption took effect, the consumer market gradually revived. On the whole, China's economy will comprehensively improve in 2023,which will effectively raise residents' purchasing power and willingness. With the general trend of consumption upgrade, the continuous innovationand consumer insight research and the precise matching with the segment populations' high-end, individualized, fashion-orientated andintellectualized demand will become the major impetus that drives the growth of consumption in the industry.
The Chinese consumer market of open fire cookware is kept being affected by the reduction of offline passenger flow and the poor logistics,which causes both the online and offline channels of the cookware industry to face heavy pressure. According to the data of 30 major cities inChina monitored by GFK, the offline retail sales of the eight major product categories of open fire cookware (wok, pressure cooker, frying pan,stockpot, milk pot, steamer, cookware set, and ceramic slow cooker) declined by a percentage of two digits in 2022 on a year-on-year basis.According to the monitoring data of AVC, the total market shares of the eleven major product categories of Supor open fire cookware (wok,pressure cooker, frying pan, milk pot, stockpot, kettle, casserole, hot pot, steamer, cookware set and enamel pot) on main e-commerce platformsin 2022 declined by 1.6% year-on-year. However, in terms of the performance of different categories, the sales of rigid-demand frying pans andpressure cookers is well. The online retail sales of enamel pots characterized by attractive appearance and popular among young people hasincreased rapidly. However, the trend of consumption upgrade in the open fire cookware market remains unchanged, and healthy materials suchas 316L stainless steel and titanium are favored by consumers.
In the industry of small domestic appliances, the purchase behaviors of consumers tended to be more rational. Since consumers have higherrequirements for the technology and quality of core product categories, plus their higher sensitivity to the idling problem of segment productcategories, the consumption demand for small domestic appliances is continuously challenged. According to the traditional channel monitoringdata of AVC, the retail sales of thirteen categories of small domestic appliances (electric rice cooker, induction hob, electric pressure cooker,soymilk maker, high-speed blender, blender, juicer, electric kettle, baked machine, health kettle, electric steamer, desktop single-function oven,and air fryer) was RMB 52.03 billion, a year-on-year decrease of 6.7%. From the market performance of each category, consumers prefer productswith strong practicability, multifunction, easy storage and space saving, such as multifunctional electric steamer and air fryer. According to theonline traditional channel monitoring data of AVC, the retail sales of air fryers reached RMB 6.04 billion in 2022, a year-on-year increase of
46.9%; and the retail sales of electric steamers reached RMB 1.16 billion, a year-on-year increase of 54.3%. The oil-free air fryer market continuesthe rapid development in 2021, becoming the 2nd largest category after electric rice cookers.II. Main Business during the Reporting Period
As China's famous cookware R&D and manufacturing company, Zhejiang Supor Co., Ltd (hereinafter referred to as "the Company") is aChina's leading manufacturer of small domestic appliances and also the first listed company in China's cookware industry. Established in 1994,the headquarters of the Company locates in Hangzhou owning 6 R&D and manufacture bases located in Yuhuan City, Hangzhou City, ShaoxingCity (Yuecheng District and Keqiao District) in Zhejiang Province, Wuhan City, Hubei Province and Ho Chi Minh City, Vietnam.
Supor's main businesses include open fire cookware and kitchen utensil, small domestic appliances, large kitchen appliances and H&PCappliances.
(1) Open fire cookware and kitchen utensils mainly include wok, pressure cooker, frying pan, sauce pan, steamer, ceramic slow cooker,kettle, knife, spatula, thermal pot, thermos & flask, kitchen gadgets, crisper, etc.;
(2) The small domestic appliances mainly include electric rice cooker, electric pressure cooker, induction hob, soymilk maker, electric kettle,juicer, slow cooker, electric steamer, electric hotpot, food processor, baked machine, air fryer, etc.;
(3) The large kitchen appliances mainly include range hood, gas stove, disinfection cabinet, water purifier, embedded steaming oven, waterheater, integrated stove, etc.;
(4) The H&PC appliances mainly include air purifier, garment steamers, vacuum cleaner, floor washer and electric iron.
The Company's cookware and electrical products have been exported to more than 50 countries and regions such as Japan, European andAmerican countries mainly through SEB Group.
III. Core competitiveness analysis(I) Superior product innovation capacity
As a company long time devoted to R&D, manufacturing and sales of open fire cookware and small domestic appliances, Supor has an acuteobservation and scientific research of the needs of Chinese consumers and has developed a systematic innovation system to ceaselessly launchnew products in the market.
After 1994 when Supor launched the domestic first safety pressure cooker, the Company continues to strength innovation, launched a seriesof hot-selling and innovative products, such as the first electric rice cooker with ceramic crystal liner in 2005, pioneered the uncoated stainlessiron pan technology in 2007, successfully introduced SEB thermo-spot patented technology in 2009, launched the first IH electric rice cooker in2011, pioneered the spherical liner in 2013, ceremoniously launched the industrial first steam IH electric rice cooker, launched the "Core Iron II"wok in 2020, the new-generation anti-corrosion and anti-perforation ti-authentic stainless steel wok and the oil-concentrated frying pan in 2021,the high-end multi-cooker “Xiao C chef” in 2021, and the industrial first uncoated wok with titanium in 2022.(II) Steady distributor network
Given years of development, Supor has stable offline distributor teams, and maintained good cooperative relationship with them. Therelatively high coverage rate and density of its sales network ensure the uninterrupted supply of Supor products.
In terms of e-commerce channels, while the Company was deeply engaged in traditional e-commerce platforms, it has also stated to engagein emerging e-commerce channels, such as TikTok, Kuaishou and Xiaohongshu. The Company has built a complete matrix of stores based ondifferent categories, channels, and customer groups. Through hierarchical management of the stores, a good internet channel store ecosystem isformed. On the other hand, the Company continues to promote the integration of online and offline channels, forming a closed loop of new retailshopping experience such as content planting, offline experience, online ordering and door-to-door service, which further narrows the distancebetween the brand and consumers.
(III) Strong R&D and manufacturing capacitySupor has built up six R&D production bases, respectively in Yuhuan City, Hangzhou City, Shaoxing City (Yuecheng and Keqiao) in ZhejiangProvince, Wuhan City, Hubei Province and Ho Chi Minh City, Vietnam. In particular, the annual production scale of Wuhan Base and ShaoxingBase ranked the top in the industry. The strong R&D power and the highly professional R&D team provide a powerful guarantee for the qualityand innovation capacity of Supor products. The Company has set up an innovation center to carry out innovation work as a whole and stayed closeexchanges and cooperation with leading laboratories in the industry and first-class universities in China to promote the development and test ofnew materials, which has achieved phased progress.(IV) Synergistic effect of integration with SEBSince 2006, the Company has started to establish strategic cooperation relationship with SEB Group which owns a long history of more than160 years with leading market shares of cookware and small domestic appliances worldwide. The powerful cooperation between Supor and SEBGroup has brought stable export orders to the Company, and increased its overall business size and manufacturing capacity. Meanwhile, thecooperation in aspects of R&D and management has continuously enhanced the core competitiveness of the Company over the years.(V) Professional advantage of multiple brands and varieties in kitchen field
In addition to Supor brand, the Company also introduced a lot of high-end brands under SEB Group, such as WMF, LAGOSTINA, KRUPS,and TEFAL so as to fully cover the high-end brands in kitchen field. The Company's open fire cookware and small domestic appliances rank the
first class nationwide. It also explores new varieties actively such as large kitchen appliances and kitchen utensils. The Company has formed itsstrong competition advantages due to its layout of multiple brands and varieties in kitchen field.IV. Main business analysis
During the reporting period, the Company achieved an operating income of RMB 20,170,527,516.66, a year-on-year decrease of 6.55%,mainly because the domestic sales business benefited from the successful transformation toward the online channel strategy, the product salesstructure continued to be optimized, and the operating income increased steadily compared with the same period before. SEB Group, as the maincustomer of export business, has a high level of inventory. In order to actively manage and control its inventory level of local channels, its ordersto the Company declined to a certain extent this year. The net profit attributable to shareholders of listed company was RMB 2,067,659,526.97, ayear-on-year increase of 6.36%; and the earnings per share were RMB 2.565, a year-on-year increase of 6.88%. Among them, the realized revenuefrom the main business of cookware was RMB 6,121,737,273.97, a year-on-year decrease of 8.66%; the realized revenue from the main businessof electric appliances was RMB 13,803,483,799.48, a year-on-year decrease of 5.72%; the realized revenue from the main business of domesticsales was RMB 14,796,684,166.64, a year-on-year increase of 5.07%; and the realized revenue from the main business of foreign trade was RMB5,150,624,825.41, a year-on-year decrease of 29.34%.
1. Overview
(I) Domestic sales during the reporting period
(1) Product strategy
During the reporting period, Supor continued the "consumer-centric" strategy guiding its innovation and development of new products, anddeeply explored the needs of segmented users under different scenarios by means of internet data, so as to constant provide smart and ingeniousproduct solutions that meet diversified consumer needs and offer intimate, comprehensive consumer experiences.
In the business of open fire cookware, Supor has continuously explored the consumer demand on the use of cookware and kept acceleratingthe expansion of products with core competitiveness. In 2022, titanium uncoated non-stick woks were deeply favored by consumers. On thepremise that there is no non-stick coating on the surface of the wok, good non-stick performance was achieved with professional technology,creating a new healthy cooking experience without coating and sticking. In terms of frying pan category, Supor further optimized "patented oil-gathering bottom" technology. The sales volume of TSP Oil-concentrating bottom frypan exceeded RMB 100 million in 2022. According to themarket share data of cookware for the 30 major cities in China as monitored by GFK, the total offline market shares of the eight major productcategories of Supor open fire cookware (wok, pressure cooker, frying pan, stockpot, milk pot, steamer, cookware set, and ceramic slow cooker)reached 48.8% in 2022, continuing to consolidate the leading advantages as the top brand in the industry. According to the network-wide data ofAVC, the total market shares of the eleven major product categories of Supor open fire cookware (wok, pressure cooker, frying pan, milk pot,stockpot, kettle, casserole, hot pot, steamer, cookware set and enamel pot) on main e-commerce platforms reached 23.1% in 2022, which is fourtimes to that of the second brand.
In terms of drinkware, Supor focuses on the coffee cup series products based on the preference of young consumers through insight into themarket demand trend of cups and pots. The dual-drinking thermal coffee cup, which was launched by the Company in 2022, is characterized bystylish design, differentiated healthy materials and excellent cup body design. Once launched, it was sold very well, ranking first in the categoryof thermal coffee cups for several consecutive months.
In the category of kitchen utensils, products are researched and developed by continuously exploring the backwards complained byconsumers and usage scenarios of products. The Company launched a series of innovative products in 2022, such as antibacterial knives andantibacterial double-sided cutting boards, to meet the functional needs of consumers for disinfection and sterilization, etc. in daily life.
In the business of small domestic appliances, Supor adheres to the differentiated product innovation strategy at all times, and continuouslyrolls out innovative and intelligent products which provide creative functions for healthy and nutritious cooking. In the category of electric ricecookers, Supor launched a small-capacity far-infrared IH rice cookers special for small-size families, further consolidating the advantages of far-infrared products. Supor upgraded the detachable and washable technology of air fryers and the differentiated design of detachable and washableglass lids to facilitate cleaning and avoid oil pollution. Supor introduced the first stirring health pot in the industry, which can make ingredients
well cooked through stirring to better meet the healthy needs of consumers. In addition, Supor closely follows the development of science andtechnology, and launches a brand-new form of "AIoT Fast Electric Cookers", combining science and technology with cooking, and with "NFCTouch", human-computer interaction can be achieved quickly. The sales of “Little C” is still well, which won the first place in the category of"Double Eleven JD.COM POP Cooking Robot". According to the traditional channel monitoring data of AVC, the online total market share of thethirteen major product categories of Supor's small domestic appliances (electric rice cooker, induction hob, electric pressure cooker, soymilk maker,high-speed blender, blender, juicer, electric kettle, baked machine, health kettle, electric steamer, desktop single-function oven, and air fryer)reached 21.6% in 2022, a year-on-year increase of 1.1 percentage points and ranking first in the industry; and the total offline market share of theabove categories of Supor reached 33.0%, a year-on-year increase of 3.9 percentage points and ranking second in the industry.
Meanwhile, Supor persistently facilitates the product category development of H&PC appliances, and launched new floor washer M1. The"keeping side" cleaning technology was applied and electrolyzed water can be used to clean and sterilize, easily eliminating hidden bacteria, andprotecting the health of the family environment. In terms of the garment steamer category, Supor continues to keep the leading position in theindustry. According to the monitoring data of AVC, the total online market share of Supor's clothes steamer category has reached 13.7%, rankingsecond in the industry.In the business of large kitchen appliances, Supor continues to enhance the brand building. The Company launched a series of differentiatedproducts with high cost performance, such as "7" extractor hood, three-eye gas stove, far-infrared steaming and baking integrated stove, andindependent steaming and baking integrated stove. Supor's annual stove line listing remanined the No.1 in the industry, and the overall brand linelisting accounted for the top five in the industry in 2022.
(2) Channel strategy
With the accelerated integration of online and offline markets, Supor remained "consumer-centric" and kept optimizing its layout of channelsbased on the changes in consumers' purchase path, thereby meeting the needs of various consumers through a multi-channel and multi-mode layout.The Company insisted on winning consumers' trust with high-quality products, and winning distributors' and retailers' support with excellentservices.
In 2022, Supor speeded up the channel reform, and the marketing efficiency further improved as a result. During the reporting period, theCompany continued to strengthen the construction of online channels, with the e-commerce business maintaining rapid growth, whose share inSupor's domestic sales continued to increase. The Company enhances the construction of the e-commerce "stock-taking" model, enables the unifiedwarehousing and allocation for both distributor commodities and self-operating commodities, improves the channel capital turnover efficiency,and effectively relieves the financial pressure of the distributors.
During the reporting period, the Company has been continuously implementing the strategy of promoting new products and selling high-value products, in a bid to increase the sales proportion of high added-value and high margin products through the innovation of differentiatedproducts and marketing measures, and has been continuously improving the online profitability. During the grand promotion events of "618" and"Double Eleven" in 2022, many of Supor's products ranked first in the sales of the corresponding categories, along with the significant increase inthe profitability of varied product categories.
On emerging social e-commerce platforms such as TikTok and Kuaishou, Supor positively explores growth points of new channels, acts toembrace the distribution rules variation of platform flows, and establishes favorable strategic cooperation with the platforms and top live-streamers.In 2022, Supor took the first-mover advantage on the major social platforms of TikTok and Kuaishou, etc., with market shares of major productcategories ranking first.
In terms of offline channels, due to the influence of industry decline, the traditional channels of primary and secondary markets are facinggreat challenges in the business operating environment. Supor and distributors are working together to actively cope with the adverse situation soas to enhance the refinement operation of the terminals and facilitate the improvement in store sales effectiveness, thus the overall market positionremains solid. Meanwhile, Supor also has kept implementing its development strategy for third and fourth markets, and speeded up thecomprehensive cooperation with e-commerce platforms such as JD, Tmall and Suning in O2O channels in lower-tier market, where its advantagesin the differentiation of mid- to high-end products and stable agents can be leveraged for new growth points in markets in lower-tier cities.
(3) Brand building
In 2022, the Company upgraded its brand and updated its brand core value. On the basis of maintaining high-quality products andtechnological innovation, the industrial design is regarded as one of the brand core values for the first time to better adapt to the ever-changing
consumption trends. The industrial design team has been gradually strengthened, and Supor's industrial design language has been establishedaround various categories, aiming at comprehensively creating more competitive products in terms of "appearance". In marketing, the Companyaccelerated the transition to digital marketing. Through the mode of cooperation with celebrities plus IP marketing, we invited sport stars such asSu Bingtian and Zhang Jike to participate in Tmall Happy Day, JD "618" and other activities, in order to keep enhancing the brand awarenessamong young people. As we expanded investment in TikTok, GMV in live streaming increased at a high speed, and multi-category sales took thelead in the industry. At the same time, the brand awareness on TikTok continued to grow, achieving the "balance between brand awareness andsales result" in marketing. The exploration of the new mode of "content marketing plus attracting traffic through advertising" achieved initialresults. New products were launched successfully, such as the titanium uncoated non-stick wok, multifunctional and quick electric skillet, and thedual-drinking thermal coffee cup, which soon became hot selling products, and the close-loop marketing was achieved more efficiently.(II) Export sales during the reporting periodIn 2022, the overall oversea trade dropped after the peak in 2021. On the one hand, our main customer, SEB Groupe, was reducing theirhigher than usual inventories during the year, and as such was limiting its orders to Supor. On the other hand, the foreign customer demand furtherdropped because of high prices of bulk materials such as aluminum, stainless steel and copper and continuous appreciation of the exchange rate ofRMB against USD. In 2022, the overall revenue of foreign trade business decreased by 29.09% year-on-year.
2. Revenues and costs
(1) Structure of operating incomes
Unit: RMB
| 2022 | 2021 | Increase/decrease YoY (%) | |||
| Amount | Percentage to total operating income | Amount | Percentage to total operating income | ||
| Total operating income | 20,170,527,516.66 | 100% | 21,585,331,407.47 | 100% | -6.55% |
| By industry | |||||
| Cookware | 6,121,737,273.97 | 30.35% | 6,702,257,811.38 | 31.05% | -8.66% |
| Electric appliances | 13,803,483,799.48 | 68.43% | 14,641,378,116.19 | 67.83% | -5.72% |
| Others | 245,306,443.21 | 1.22% | 241,695,479.90 | 1.12% | 1.49% |
| By products | |||||
| Cooking appliances | 8,506,984,442.90 | 42.18% | 9,034,130,069.36 | 41.85% | -5.84% |
| Food processor appliances | 3,086,500,276.55 | 15.30% | 3,563,543,509.79 | 16.51% | -13.39% |
| Cookware and utensils | 6,121,737,273.97 | 30.35% | 6,702,257,811.38 | 31.05% | -8.66% |
| Other household electric appliances | 2,455,305,523.24 | 12.17% | 2,285,400,016.94 | 10.59% | 7.43% |
| By areas | |||||
| Domestic sales | 14,975,644,970.69 | 74.25% | 14,259,688,624.49 | 66.06% | 5.02% |
| Export sales | 5,194,882,545.97 | 25.75% | 7,325,642,782.98 | 33.94% | -29.09% |
| By sales mode | |||||
| Direct sales | 2,327,273,967.60 | 11.54% | 1,832,866,623.49 | 8.49% | 26.97% |
| Distribution | 12,652,370,630.22 | 62.73% | 12,432,653,195.35 | 57.60% | 1.77% |
| OEM | 5,190,882,918.84 | 25.73% | 7,319,811,588.63 | 33.91% | -29.08% |
Remarks: "Others" by industry, "Other domestic electric appliances" by product, and region-based and sales-based modes exceptionally includeother business incomes, the same below.
(2) Industry, product, area or sales mode that accounts for more than 10% of the Company's operating income oroperating profit? Applicable □ Not applicable
Unit: RMB
| Operating income | Operating cost | Gross margin | Increase/decrease YoY (%) for operating income | Increase/decrease YoY (%) for operating cost | Increase/decrease YoY (%) for gross margin | |
| By industry | ||||||
| Cookware | 6,121,737,273.97 | 4,277,114,265.06 | 30.13% | -8.66% | -13.68% | 4.06% |
| Electric appliances | 13,803,483,799.48 | 10,486,986,687.23 | 24.03% | -5.72% | -8.56% | 2.36% |
| By products | ||||||
| Cooking appliances | 8,506,984,442.90 | 6,446,395,980.91 | 24.22% | -5.84% | -8.25% | 1.99% |
| Food processor appliances | 3,086,500,276.55 | 2,477,448,255.92 | 19.73% | -13.39% | -14.96% | 1.48% |
| Cookware and utensils | 6,121,737,273.97 | 4,277,114,265.06 | 30.13% | -8.66% | -13.68% | 4.06% |
| Other household electric appliances | 2,455,305,523.24 | 1,768,370,338.68 | 27.98% | 7.43% | 2.40% | 3.54% |
| By areas | ||||||
| Domestic sales | 14,975,644,970.69 | 10,734,281,393.12 | 28.32% | 5.02% | 3.32% | 1.18% |
| Export sales | 5,194,882,545.97 | 4,235,047,447.45 | 18.48% | -29.09% | -32.04% | 3.55% |
| By sales mode | ||||||
| Direct sales | 2,327,273,967.60 | 1,327,826,878.46 | 42.94% | 26.97% | 23.05% | 1.82% |
| Distribution | 12,652,370,630.22 | 9,410,048,399.91 | 25.63% | 1.77% | 1.01% | 0.56% |
| OEM | 5,190,882,918.84 | 4,231,453,562.20 | 18.48% | -29.08% | -32.04% | 3.55% |
If the statistical caliber of the Company's operation business data is adjusted during the reporting period, the main business data for the latest yearafter the statistical caliber is adjusted.
□ Applicable ? Not applicable
(3) Practical sales revenue greater than labor income
? Yes □ No
| Industrial classification | Item | Unit | 2022 | 2021 | Increase/decrease YoY (%) |
| Cookware | Sales volume | pcs/set | 71,416,579 | 87,207,431 | -18.11% |
| Output | pcs/set | 38,865,026 | 54,282,300 | -28.40% | |
| Stock | pcs/set | 10,549,133 | 13,251,243 | -20.39% | |
| Electrical products | Sales volume | pcs/set | 82,690,074 | 96,246,268 | -14.08% |
| Output | pcs/set | 51,085,806 | 68,684,534 | -25.62% | |
| Stock | pcs/set | 10,182,368 | 13,030,358 | -21.86% | |
| Total | Sales volume | pcs/set | 154,106,653 | 183,453,699 | -16.00% |
| Output | pcs/set | 89,950,832 | 122,966,834 | -26.85% | |
| Stock | pcs/set | 20,731,501 | 26,281,601 | -21.12% |
Descriptions of cause with above 30% change of relevant data on a YoY basis
□ Applicable ? Not applicable
(4) Performance of important sales contracts and purchase contracts signed till this reporting period
□ Applicable ? Not applicable
(5) Structure of operating costs
Category of industry and product
Unit: RMB
| Industrial classification | Item | 2022 | 2021 | Increase/decrease YoY (%) | ||
| Amount | Proportion of operating cost | Amount | Proportion of operating cost | |||
| Cookware | Operating cost | 4,277,114,265.06 | 28.57% | 4,955,161,624.35 | 29.81% | -13.68% |
| Electric appliances | Operating cost | 10,486,986,687.23 | 70.06% | 11,468,837,009.63 | 69.00% | -8.56% |
| Others | Operating cost | 205,227,888.28 | 1.37% | 197,614,526.82 | 1.19% | 3.85% |
Unit: RMB
| Category of product | Item | 2022 | 2021 | Increase/decrease YoY (%) | ||
| Amount | Proportion of operating cost | Amount | Proportion of operating cost | |||
| Cooking appliances | Operating cost | 6,446,395,980.91 | 43.07% | 7,026,157,205.54 | 42.27% | -8.25% |
| Food processor appliances | Operating cost | 2,477,448,255.92 | 16.55% | 2,913,355,186.94 | 17.53% | -14.96% |
| Cookware and utensils | Operating cost | 4,277,114,265.06 | 28.57% | 4,955,161,624.35 | 29.81% | -13.68% |
| Other household electric appliances | Operating cost | 1,768,370,338.68 | 11.81% | 1,726,939,143.97 | 10.39% | 2.40% |
(6) Change of merger scope during the reporting period
? Yes □ NoSee "VIII. Change on merger scope" of SECTION X "FINANCIAL STATEMENT" for details.
(7) Important change or adjustment for the Company's businesses, products or services during the reporting period
□ Applicable ? Not applicable
(8) Main sales customers and suppliers
Main sales customers
| Total amount of sales to top 5 customers (RMB) | 7,371,337,030.15 |
| Proportion of total amount of sales of top 5 customers in the year's total sales (%) | 36.54% |
| Proportion for related party's sales amount of sales amount of top 5 customers in annual total sales amount | 23.18% |
Information on the Company's top 5 major customers
| SN | Customer | Sales amount (RMB) | Proportion in the total sales amount of the year (%) |
| 1 | SEB S.A. and its subsidiaries | 4,676,023,198.91 | 23.18% |
| 2 | Customer 1 | 1,097,983,191.51 | 5.44% |
| 3 | Customer 2 | 971,919,851.09 | 4.82% |
| 4 | Customer 3 | 334,773,987.60 | 1.66% |
| 5 | Customer 4 | 290,636,801.04 | 1.44% |
| Total | -- | 7,371,337,030.15 | 36.54% |
Instruction for main customers' other cases
□ Applicable ? Not applicable
The Company's main supplier
| Total purchasing value from top 5 suppliers (RMB) | 1,438,678,623.26 |
| Proportion of total purchase amount of top 5 suppliers in the year's total purchasing value | 11.52% |
| Proportion for related party's purchase amount of purchase amount of top 5 suppliers in annual total purchase amount | 0.00% |
Information on the Company's top 5 suppliers
| SN | Supplier | Purchasing value (RMB) | Proportion in the total purchase amount of the year (%) |
| 1 | Supplier 1 | 377,079,036.68 | 3.02% |
| 2 | Supplier 2 | 327,831,500.57 | 2.62% |
| 3 | Supplier 3 | 257,127,987.95 | 2.06% |
| 4 | Supplier 4 | 239,353,204.90 | 1.92% |
| 5 | Supplier 5 | 237,286,893.16 | 1.90% |
| Total | -- | 1,438,678,623.26 | 11.52% |
Instruction for main suppliers' other cases
□ Applicable ? Not applicable
3. Costs
Unit: RMB
| 2022 | 2021 | Increase/decrease YoY (%) | Descriptions of major changes | |
| Sales expenses | 2,156,297,058.63 | 1,909,953,095.54 | 12.90% | |
| Administrative expenses | 374,060,640.28 | 400,779,608.67 | -6.67% | |
| Financial expenses | -97,423,287.91 | -6,482,301.16 | -1,402.91% | Mainly due to the increase of deposit interests and exchange gains during the reporting period. |
| R&D expenses | 416,259,356.99 | 450,110,510.51 | -7.52% |
4. R&D input
? Applicable □ Not applicable
Oriented by consumers' demand, the Company engages in R&D of the differential products that meet kitchen demand and local eating andlife habits. The Company lays emphasis on R&D investment, boosts technical innovation actively, further explores product category and addsproduct additional value; respects customer's experience and focuses on all details of consumer use in order to realize safe, environmentally friendly,
convenient and fashionable products. R&D expenditure in this year accounts for 5.92% and 2.06% of net assets and operating income audited inthe recent period.R&D personnel of the Company
| 2022 | 2021 | Change proportion | |
| Quantity of R&D personnel (person) | 1,363 | 1,378 | -1.09% |
| Proportion of R&D personnel | 13.33% | 11.64% | 1.69% |
| Educational background structure of R&D personnel | |||
| Bachelor's degree | 567 | 513 | 10.53% |
| Master's degree | 53 | 44 | 20.45% |
| Age composition of R&D personnel | |||
| ＜ 30 years old | 381 | 378 | 0.79% |
| 30-40 years old | 682 | 709 | -3.81% |
R&D investment of the Company
| 2022 | 2021 | Change proportion | |
| Amount of R&D input (RMB) | 416,259,356.99 | 450,110,510.51 | -7.52% |
| Proportion of R&D input in total operating income | 2.06% | 2.09% | -0.03% |
| Capitalization amount of R&D input (RMB) | 0.00 | 0.00 | 0.00% |
| Proportion of Capitalization R&D input in R&D input | 0.00% | 0.00% | 0.00% |
Cause and influence of major changes of the Company's R&D personnel composition
□ Applicable ? Not applicable
Reason for large change for proportion of total R&D input in operating income compared with that of last year
□ Applicable ? Not applicable
Reason and rational introduction for large capitalization change of R&D input
□ Applicable ? Not applicable
5. Cash flow
Unit: RMB
| Item | 2022 | 2021 | Increase/decrease YoY (%) |
| Subtotal of cash inflows from operating activities | 23,863,910,846.37 | 24,022,963,105.23 | -0.66% |
| Subtotal of cash outflows from operating activities | 20,703,955,600.53 | 21,973,081,536.54 | -5.78% |
| Net cash flows from operating activities | 3,159,955,245.84 | 2,049,881,568.69 | 54.15% |
| Subtotal of cash inflows from investing activities | 3,290,816,398.77 | 1,599,917,532.89 | 105.69% |
| Subtotal of cash outflows from investing activities | 3,762,872,224.32 | 1,260,464,895.97 | 198.53% |
| Net cash flows from investing activities | -472,055,825.55 | 339,452,636.92 | -239.06% |
| Subtotal of cash inflows from financing | 11,094,652.76 | 6,308,689.63 | 75.86% |
| activities | |||
| Subtotal of cash outflows from financing activities | 2,776,624,440.47 | 1,600,215,585.25 | 73.52% |
| Net cash flows from financing activities | -2,765,529,787.71 | -1,593,906,895.62 | -73.51% |
| Net increase in cash and cash equivalents | -47,798,926.68 | 787,945,760.02 | -106.07% |
Instruction for main influence factors of relevant data with YoY (%) changed seriously? Applicable □ Not applicable
1. The net cash flows from operating activities increased by 54.15% year-on-year, mainly due to the cash outflow decrease for goods purchasedand laboring services received during the reporting period.
2. The net cash flows from investing activities decreased by 239.06% year-on-year, mainly due to cash outflow increase for investment in financialproducts and term deposits with maturity more than 3 months during the reporting period.
3. The net cash flows from financing activities decreased by 73.51% year-on-year, mainly due to the dividend expenditure increase in cash outflowof financing activities during the reporting period.
4. The net increase in cash and cash equivalents decreased by 106.07% year-on-year, mainly due to the cash outflow increase in financing activitiesduring the reporting period.Reason for great change between net cash flow caused by operating activities and annual net profits during the reporting period
□ Applicable ? Not applicable
V. Analysis on Non-main Business
□ Applicable ? Not applicable
VI. Analysis on Assets and Liabilities
1. Significant changes in assets
Unit: RMB
| End of 2022 | Beginning of 2022 | Increase/ decrease in proportion | Descriptions of major changes | |||
| Amount | Percentage to total assets | Amount | Percentage to total assets | |||
| Monetary capital | 3,563,140,907.75 | 27.51% | 2,654,052,417.47 | 19.09% | 8.42% | Mainly due to cash flow increase from the Company's operating activities during the reporting period. |
| Accounts receivable | 1,926,518,118.38 | 14.87% | 2,716,945,985.33 | 19.55% | -4.68% | Mainly due to the export accounts receivable decrease at the end of the reporting period. |
| Inventories | 2,494,922,856.42 | 19.26% | 3,096,517,055.33 | 22.28% | -3.02% | Mainly due to the reasonable control of inventory during the reporting period. |
| Long-term equity investment | 62,196,139.53 | 0.48% | 65,600,611.64 | 0.47% | 0.01% | No significant change during the reporting period. |
| Fixed assets | 1,303,075,391.03 | 10.06% | 1,291,902,992.54 | 9.29% | 0.77% | No significant change during the reporting period. |
| Construction in progress | 12,005,654.73 | 0.09% | 26,482,779.31 | 0.19% | -0.10% | No significant change during the reporting period. |
| Right-of-use assets | 190,718,962.82 | 1.47% | 195,528,644.13 | 1.41% | 0.06% | No significant change during the reporting period. |
| Contract liabilities | 1,153,932,879.53 | 8.91% | 893,741,863.21 | 6.43% | 2.48% | Mainly due to the increase in advance payments from some distributors by subsidiaries during the reporting period. |
| Lease obligation | 150,779,916.58 | 1.16% | 157,420,210.81 | 1.13% | 0.03% | No significant change during the reporting period. |
| Receivables financing | 235,957,044.34 | 1.82% | 3,312,225.62 | 0.02% | 1.80% | Mainly due to the increase in the amount of bank acceptance bills of subsidiaries at the end of the reporting period. |
| Other current assets | 450,986,016.76 | 3.48% | 2,055,027,382.63 | 14.78% | -11.30% | Mainly due to the maturity and delivery of term deposit investment at the end of the reporting period. |
| Other debt investment | 1,024,794,890.43 | 7.91% | 298,191,205.49 | 2.15% | 5.76% | Mainly due to the increase of negotiable certificates of deposit at the end of the reporting period. |
High proportion of overseas assets
□ Applicable ? Not applicable
2. Assets and liabilities measured at the fair value
? Applicable □ Not applicable
Unit: RMB
| Item | Opening balance | Profit and loss from fair value changes in the current period | Accumulated fair value changes included into equity | Impairment loss of the current period | Amount of purchasing of the current period | Amount of selling of the current period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Transactional financial assets (excluding derivative financial assets) | 180,312,742.31 | 5,768,586.86 | 550,000,000.00 | 304,698,801.38 | 431,382,527.79 | |||
| 2. Receivables financing | 3,312,225.62 | 232,644,818.72 | 235,957,044.34 | |||||
| 3. Other debt investments | 298,191,205.49 | 845,344,912.23 | 105,140,393.12 | 18,556,700.08 | 1,056,952,424.68 | |||
| Total | 481,816,173.42 | 5,768,586.86 | 1,395,344,912.23 | 409,839,194.50 | 251,201,518.80 | 1,724,291,996.81 | ||
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||
Content of other changesReceivables financing: As the demand of daily fund management, the Company will discount or transfer an endorsed bill, the business mode ofrelated bank acceptance bill including not only collect contract cash flow but sales as the target, so reclass the bank acceptance bill as financialassets measured at the fair value with their changes included into other comprehensive incomes.
Other debt investment：Supor's business model of managing negotiable large deposit certificates is both to collect the contract cash flow and tosell the negotiable large deposit certificates, which are classified as financial assets measured at fair value and whose changes are included in othercomprehensive income. Interest income is accrued according to the effective interest rate method during the expected duration.Are there any major changes about the valuation attribute of Company's main assets during the reporting period?
□ Yes ? No
3. Restrictions of assets and rights by the end of reporting period
See 53. "Assets with title or use right restrictions", VII "Notes to items of consolidated financial statements", SECTION X "FINANCIALREPORT" for details.VII. Investment Situation Analysis
1. General condition
□ Applicable ? Not applicable
2. Significant equity investment to be acquired during the reporting period
□ Applicable ? Not applicable
3. Significant non-equity investment to be handled during the reporting period
□ Applicable ? Not applicable
4. Investments in Financial Assets
(1) Conditions of the securities investment
□ Applicable ? Not applicable
The Company involves no securities investment during the reporting period.
(2) Derivative investment
? Applicable □ Not applicable
1) Hedging derivative investment during the reporting period
? Applicable □ Not applicable
Unit: RMB 10,000
| Derivative investment type | Initial investment amount | Profit and loss from fair value changes in the current period | Accumulated fair value changes included into equity | Purchase amount during the reporting period | Sales amount during the reporting period | Closing balance | Proportion of investment amount at the end of the period in the Company's net assets at the end of the reporting period |
| Bank - foreign exchange derivative instruments | 14,790.55 | 995.28 | 0 | 140,267.02 | 150,313.35 | 4,744.22 | 0.67% |
| Total | 14,790.55 | 995.28 | 0 | 140,267.02 | 150,313.35 | 4,744.22 | 0.67% |
| Explanation on whether the Company's accounting policies and specific accounting principles of hedging business have significantly changed during the reporting period compared with the previous reporting period | The company recognizes, measures, and presents in accordance with Accounting Standards for Business Enterprises No. 22 -- Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 24 - Hedging, and Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments. There are no significant changes compared to the previous reporting period. |
| Explanation on realized gains and losses during the reporting period | During the reporting period, the company conducted derivative transactions and fair value hedging in accordance with the variety and duration determined by the Board of Directors. During the reporting period, the amount included in the current profit and loss was 9.9528 million yuan, and the amount included in equity was 0 yuan. The amount of profit or loss is entirely derived from the net fair value change formed by the forward settlement of foreign exchange and the hedged item. During the reporting period, our company did not engage in foreign exchange swap business, with no profit or loss or equity impact. |
| Explanation on hedging effect | The value of hedging tools of our Company changed inversely to that of hedged foreign exchange accounts receivable and payable, effectively achieving the risk management objectives. During the reporting period, the Company conducted assessment on the fluctuation of the value of foreign exchange accounts receivable and payable, and signed forward exchange contracts with banks in the same currency. Such hedging tool was one of those approved by the Board of Directors. The execution complied with the internal control requirements and operated within the approved quota to ensure that the hedging tools match the hedged items in the scale, term, and currency. |
| Capital source of derivative investment | Self-owned capital |
| Risk analysis and control measure explanation for derivative holding a position during the reporting period (including but not limited to market risk, liquidity risk, credit risk, operation risk and law risk) | In order to hedge the foreign exchange risk in operating activities, reduce the impact of exchange rate fluctuations, and give full play to the hedging function of foreign exchange derivative transaction, the Company implemented foreign exchange derivative transaction business consistent with its business scale, term, and currency. (I) Risks of conducting foreign exchange derivative transactions 1. Market risks: market risks, such as losses resulted from changes in the price of foreign exchange derivatives due to the fluctuated underlying interest rate, exchange rate or other market price, may arise. 2. Internal control risks: considering the specialty and complexity of foreign exchange derivative transaction business, inadequate internal control mechanisms may lead to risks. 3. Liquidity risks: risk of failure to complete transactions due to lack of market liquidity. 4. Performance risks: foreign exchange derivatives business faces the risk of default due to failed contract fulfillment when the contract expires. 5. Legal risks: changes in relevant laws or violations of the relevant legal system by counterparty, resulting the contract cannot be executed properly, may cause losses to the Company. (II) Risk response measures 1. Clarify the principles of foreign exchange derivative transaction: foreign exchange derivative transaction is based on the hedging principle to avoid risks from exchange rate fluctuations to the greatest extent, and based on market conditions, operation strategies shall be adjusted in time to improve hedging effects. 2. System construction: the Company has established the Management Measures for Foreign Exchange Derivative Transactions, in which the scope of authorization, approval procedures, key operation points, risk management and information disclosure concerning foreign exchange derivative transactions are well defined, so that the conduct and risks of foreign exchange derivative transactions can be effectively regulated. 3. Product selection: prior to any foreign exchange derivative transaction, it's necessary to select an FX derivative that suits the company's business context best, and is highly liquid and risk through a comparative analysis of various counterparties and products, before conducting business. The Company used forward instruments for general hedge and swap contracts for rolling hedge. 4. Counterparty management: be prudent when selecting counterparties for foreign exchange derivatives business. The company only conducts foreign exchange derivative transaction business with large commercial banks and other foreign exchange organization with legal qualifications, thus avoiding potential default and legal risks. 5. Management by specially-assigned persons: a special working group, set up by the Company's management representatives, Fund Department, Financial Sharing Center, Audit Department, Securities Department and other departments concerned, is responsible for the risk assessment, operation, recording and supervision of foreign exchange derivative transactions. The working group is supposed to decide on emergency mitigations in case of any significant changes in the market. |
| Changes in market prices or product fair values of | The delivered foreign exchange derivatives were recorded as the profit and loss with instruments by our Company. Changes in the fair value of undelivered foreign exchange derivatives were evaluated by the comparison between |
| invested derivatives during the reporting period, specific methods used for analysis of the fair value of derivatives and the setting of related assumptions and parameters | the exchange rate of the derivative contract and the corresponding forward foreign exchange quotation provided by the contracting bank at the end of the period. |
| Litigation-related situation (if applicable) | Not applicable |
| As for approval of derivative investment, the Board of Directors will announce disclosure date (if any) | April 1, 2022 |
| Special opinion on situations of the Company's derivative investment and risk control from independent directors | The independent directors have released the independent opinions about the Proposal for Implementation of the Foreign Exchange Derivative Transaction Business of the Company, the details of which are shown in the Independent Opinion of Independent Directors on Relevant Matters disclosed in http://www.cninfo.com.cn on April 1, 2022. |
2) Speculation derivative investment during the reporting period
□ Applicable ? Not applicable
During the reporting period, there was no speculative investment on derivatives.
5. Application of capital raised
□ Applicable ? Not applicable
No capital raised was used in reporting period
VIII. Sales for major assets and equity
1. Sales for major assets
□ Applicable ? Not applicable
The Company did not sell major assets till the end of the reporting period.
2. Sales for major equities
□ Applicable ? Not applicable
IX. Analysis for Main Holding Companies and Joint Stock Companies? Applicable □ Not applicableStatus of main subsidiaries and joint stock companies with influence on the Company's net profit exceeding 10%
Unit: RMB
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Wuhan Supor Cookware Co., Ltd. | Subsidiary | Cookware | RMB 91.16 million | 1,230,265,524.10 | 324,246,136.60 | 3,371,269,904.20 | 139,860,750.29 | 105,359,801.51 |
| Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd. | Subsidiary | Electrical products | RMB 133.6971 million | 1,480,071,463.87 | 372,779,119.70 | 3,771,989,629.93 | 155,838,593.92 | 117,609,671.31 |
| Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd. | Subsidiary | Small domestic appliances, kitchen appliances | RMB 610 million | 2,621,794,128.67 | 1,899,174,648.33 | 5,838,977,709.44 | 1,084,929,408.78 | 943,463,674.32 |
Subsidiary obtaining and disposal details during the reporting period? Applicable □ Not applicable
| Company name | Subsidiary obtaining and disposal mode during the reporting period | Influence on overall production, operation and performance |
| Shanghai SEB Electrical Appliances Co., Ltd. | Cancellation | No influence on overall production, operation and performance |
X. Structural Subject under the Company's Control
□ Applicable ? Not applicable
XI. Prospects for Future Development
1. Future development strategy and operation plan of the Company
As a new development pattern with domestic circulation as the core is constructed, under which domestic and international circulationsreinforce each other, the policies of expanding domestic demand and promoting consumption will continue to take effect. The strong magneticforce of China's enormous domestic market remains unchanged, where the middle class and youngsters boost consumption growth constantly. Itis predicted that the consumption will resume in 2023, and consumers will pay more attention to healthy and high-quality life, which will becomea trend of industrial evolution and consumption upgrade in the future.The Company will persistently implement the predefined strategies and guidelines, with the consumers' demand as the orientation, constantlypromote the product innovation strategy and quality product strategy, and further give play to the competitive advantages of the Company in thekitchenware sector in terms of diversified brands and product categories. It will take advantage of the consumption upgrade opportunity, cultivatenew businesses and new product categories, promote the development of segment categories, and meet the diversified consumption demand.In terms of channels, the Company will make constant efforts to promote online channel renovation, consolidate and expand the achievementsof reforms, give full play to the professionalism and flexibility under the diversified business modes, and further improve the direct sale capacityof e-commerce. It will expand the first-mover advantage of the social e-commerce platform, and improve the scale and profitability; make thecooperation with major operators and resource utilization more efficient; innovate promotion patterns, thereby continuously expanding its onlinesales and market share; continue improving the service level and efficiency in the major retail systems in China and in international shoppingmarket offline to strive to become the strategic supplier of more key retail channels, continuously explore the third and fourth markets, furtherenhance the cooperation with e-commerce platforms on the O2O channels, and expedite the penetration into markets in lower-tier cities.In terms of brand building, the Company will comprehensively update the visual brand image, e-commerce packaging image, and terminalimage in line with the new brand positioning, and strengthen the communication and connection between the brand and consumers, so as toenhance the brand competitiveness. Through deepening the insight into the young generation, the Company will launch products that are morefitting with their aesthetic and usage requirements, create more competitive product series such as kitchen utensils for solo dining and other youngand high-end ones to cover more young consumers and promote the brand development. We will continue to explore digital marketing, improvethe quality of content marketing and the efficiency of attracting traffic through advertising, and increase the success rate of newly launched products.The Company will create a WeChat Member Shop to strengthen the consumer life time and user viscosity through exclusive member services, andimprove the operational efficiency of private traffic to form a closed loop.With respect to export business, the Company, regardless of uncertain international situation, the Company will keep advancing thecooperation with SEB in links such as R&D, design and manufacturing, enlarge production scale, acquire scale cost-based competitive advantageand improve core competence of foreign trade in virtue of order transfer advantage of SEB.
With regard to industrial aspect, the Company will further conduct cost optimization and lean economy program, actively respond to adverseeffect caused by price rise of raw materials, strengthen basic management over R&D, promote market's rapid response capacity of industrialsystem, and continuously improve cost competitiveness. Meanwhile, under the guidance of the national "carbon peaking and carbon neutralitygoals " strategy, the Company continues to introduce the concepts of green operation in responsible supply, low-carbon logistics, greenconsumption and other aspects. With the goal of low-carbon action, the Company improves the utilization rate of resources, continuously reducesgreenhouse gas and waste emissions, and promotes the sustainable development of the industry and enterprises. In 2022, the Company will add anumber of carbon reduction plans, such as distributed photovoltaic power generation projects, green finance payment, etc.With respect to talent training, the Company will strengthen talent echelon construction and improve long-term incentive mechanismcontinuously; improve management level of basic and medium management personnel, enhance subjective initiative of employees and build anactive and efficient working atmosphere for employees.
2. Possible risks and countermeasures
(1) Risk from macroeconomic fluctuation
In 2022, Chinese macroeconomy was hit by unexpected factors such as international macroeconomy, etc., with the growth rate slowing downconsiderably. In addition, the overall industry scale of the cookware and small domestic appliances declined. However, with a series of policiesand measures to boost domestic markets consumptions, the domestic appliance market demands is expected to pick up in 2023. Looking forwardto 2023, the keynote of steady macroeconomic growth will remain unchanged. Faced with the possible macroeconomic fluctuation risks, Suporwill continuously adhere to established strategies, actively develop new categories and new businesses, expand market segments and foster newgrowth points.In terms of foreign trade, due to the impacts of geopolitical conflicts, high inflation and soaring energy prices, the prospect of global economicgrowth remains bleak. The Company and its foreign trade customers will make joint efforts to advance the R&D of new products, improveefficiency and reduce costs to cope with the weak international market.
(2) Risk from production element price change
In 2022, the prices of the main raw materials of cookware and small domestic appliances, such as aluminum, copper, stainless steel andplastics, dropped slightly, however, still at a high level. In order to cope with the risks caused by the fluctuation of production element price, Suporis actively improving the internal labor productivity and pushing to implement the lean projects to reduce the negative impacts caused by the risein price of raw materials on the production costs. Besides the Company is actively boosting the automation of production line, improving the percapita labor output, and reduce the impact caused by rise in labor cost.
(3) Risk of intensifying market competitiveness
As the operating cost of enterprise rises, industry brand concentration will be further improved, and there is the risk of intensifying marketcompetition in the field of cookware and small domestic appliances. In order to seize market share, high-end brand will continue to sink channeland regulate product and price strategy, and some high-end brand will enter shopping market channels to participate in high-end market competition,which will further intensify the competitiveness of industry.
The Company will keep on insisting in the strategy to take product innovation as the core, and keep on improving innovation ability to createmore products with high additional value and gross margin. The Company will give full play to the competitive edge of multiple brands andmultiple product categories of Supor, and continue to improve market shares and profitability of Supor.
(4) Product export and exchange loss caused by exchange rate fluctuation
Recent exchange rate fluctuations may adversely affect export.
The Company has adopted RMB settlement for main export customer SEB Groupe with low exchange rate risk.
XII. Investigation & Research, Communication and Interview Activities During the Reporting Period? Applicable □ Not applicable
| Reception time | Reception place | Reception manner | Type of reception object | Reception object | Main content talked about and materials provided | Index for basic condition of investigation and survey |
| April 1, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in 2021 | See the Management File for Investor Relations of Supor on April 6, 2022 disclosed by the Company in http://www.cninfo.com.cn on April 6, 2022 for details. |
| April 1, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in 2021 | See the Management File for Investor Relations of Supor on April 6, 2022 disclosed by the Company in http://www.cninfo.com.cn on April 6, 2022 for details. |
| April 20, 2022 | Company | Others | Others | Investors of the Company | Annual performance presentation session | See the Supor Performance Presentation Session and Roadshow Activity Information on April 20, 2022 disclosed by the Company in http://www.cninfo.com.cn on April 20, 2022 for details. |
| April 29, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in Q1 of 2022 | See the Management File for Investor Relations of Supor on May 5, 2022 disclosed by the Company in http://www.cninfo.com.cn on May 5, 2022 for details. |
| April 29, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in Q1 of 2022 | See the Management File for Investor Relations of Supor on May 5, 2022 disclosed by the Company in http://www.cninfo.com.cn on May 5, 2022 for details. |
| August 31, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Semiannual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on September 1, 2022 (1) disclosed by the Company in http://www.cninfo.com.cn on September 1, 2022 for details. |
| August 31, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Semiannual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on September 1, 2022 (2) disclosed by the Company in http://www.cninfo.com.cn on September 1, 2022 for details. |
| September 1, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Semiannual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on September 2, 2022 (1) disclosed by the Company in http://www.cninfo.com.cn on September 2, 2022 for details. |
| September 1, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Semiannual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on September 2, 2022 (2) disclosed by the Company in http://www.cninfo.com.cn on September 2, 2022 for details. |
| September 2, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Semiannual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on September 5, 2022 disclosed by the Company in http://www.cninfo.com.cn on September 5, 2022 for details. |
| October 25, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in Q3 of 2022 | See the Management File for Investor Relations of Supor on October 26, 2022 (1) disclosed by the Company in http://www.cninfo.com.cn on October 26, 2022 for details. |
| October 25, 2022 | Company | Conference call | Organization | Analysts and institutional investors | Performance and operating conditions in Q3 of 2022 | See the Management File for Investor Relations of Supor on October 26, 2022 (2) disclosed by the Company in http://www.cninfo.com.cn on October 26, 2022 for details. |
SECTION IV CORPORATION GOVERNANCE
I. Basic SituationDuring the reporting period, the Company further standardized the operation of the Company and improved the governance by continuouslybuilding up and strengthening the corporate governance system, improving the internal control and management system, and deepening thegoverning process strictly in accordance with the Company Law, the Securities Law and the Rules on the Corporate Governance of ListedCompanies, Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and the Shenzhen Stock Exchange Regulatory Guidelines forListed Companies No. 1-Standardized Operation of Listed Companies as well as other regulations of CSRC. By the end of the reporting period,the actual governance of the Company was basically in compliance with the relevant regulations of corporate governance of listed companiesissued by the CSRC and Shenzhen Stock Exchange, and with the rules of established systems of the Company. No administrative regulationmeasures were taken by regulatory department upon the Company.(I) Relating to Shareholders and the General Meeting of ShareholdersDuring the reporting period, the Company has convened and held the general meetings of shareholders strictly according to the Rules for theGeneral Meetings of Shareholders of Listed Companies, Rules and Procedures for the Shareholders' Meeting, and other rules and requirements,and ensured the legality and validity of the convening. According to the Implementing Rules for the Online Voting at the Shareholders' Assemblyof Listed Companies of Shenzhen Stock Exchange, the Company clearly defined the specific process of online voting and completely implementedonline voting of general meeting of shareholders, in order to involve medium and small investors in the online voting more effectively, andguarantee the legitimate rights and interests of all shareholders, especially of the minority shareholders.During the reporting period, three general meetings of shareholders were held. The convening and holding procedures, qualifications ofattended persons, voting procedures, voting results and resolution contents of the meeting conformed to laws and regulations and Articles ofAssociation.(II) Relating to the Company and the Controlling ShareholderDuring the reporting period, the Company was autonomous in business and operation, and kept independent of its controlling shareholder interms of assets, business, personnel, organization and finance. The Board of Directors, the Board of Supervisors and other internal organizationsoperate independently. The Controlling Shareholder of the Company exercised its rights through the General Meeting of Shareholders, and didnot directly or indirectly intervene with the Company's decision-making or operating activities. The related transaction between the Company andits Controlling Shareholder was fair and reasonable; the decision-making rules were in compliance with the relevant provisions; no fund occupationby the Controlling Shareholder existed.
(III) Relating to Directors and the Board of DirectorsThe Company elected directors strictly according to the procedures stipulated in the Company Law and the Articles of Association, andensured the open, fair, equitable and independent appointment and election of directors, and the number and composition of the Board of Directorsfollow relevant laws and regulations. Now the Company has three independent directors, representing 1/3 of its directors. All directors haveactively participated in the Company's operation and decision-making activities, performed their duties, attended the relevant training sessionsorganized by supervisory departments, pursuant to the Company Law, the Shenzhen Stock Exchange Regulatory Guidelines for Listed CompaniesNo. 1-Standardized Operation of Listed Companies, the Articles of Association and the Rules and Procedures for Meetings of the Board ofDirectors. The Board of Directors consists of Strategy Committee, Audit Committee and Compensation Committee with independent directorsfully exerting their specialties, which further improves the working efficiency and decision-making level of the Board of Directors and playssignificant roles in the Company's normative operation.During the reporting period, six board meetings were held. The convening and holding procedures, qualifications of attended persons, votingprocedures, voting results and resolution contents of the meeting conformed to laws and regulations and Articles of Association.
(IV) Relating to Supervisors and the Board of SupervisorsThe Company elected supervisors strictly according to the provisions under the Company Law and the Articles of Association. The numberof supervisors and composition of the Board of Supervisors met the requirement of relevant laws and regulations. All supervisors have performedtheir duties as required by the Regulations of Procedure of the Board of Supervisors, effectively supervised the legality and regulatory compliance
of important matters, related transactions, financial conditions, and duty fulfillment of directors and senior executives of the Company, andmaintained the legitimate rights and interests of the Company and its shareholders.During the reporting period, six meetings of Board of Supervisors were held. The convening and holding procedures, qualifications of attendedpersons, voting procedures, voting results and resolution contents of the meeting conformed to laws and regulations and Articles of Association.(V) Relating to Performance Appraisal and the Incentive and Restraining MechanismThe Company established and constantly improved the performance appraisal system and the incentive restraining mechanism for supervisors,directors and senior executives. The appointment and remuneration for directors, supervisors and senior executives of the Company are open, clearand in line with relevant laws and regulations. During the reporting period, the Company completed the registration of restricted stock grantsinvolved in the 2021 Restricted Stock Incentive Plan (Draft) and the 2022 Restricted Stock Incentive Plan (Draft), thus effectively offeringincentives for senior executives.(VI) Relating to Information Disclosure and TransparencyThe Securities Department of the Company is responsible for information disclosure and investor's relationship management. Abiding byrequirements of the CSRC and Shenzhen Stock Exchange and provisions on compilation of periodic reports in good faith, the department, inassociation with the Financial Department of the Company, has timely and accurately compiled and submitted the 2021 Annual Report, 2022 FirstQuarterly Report, 2022 Semiannual Report and 2022 Third Quarterly Report, based on the strict compliance with the non-disclosure rules beforethe disclosure of the reports.In accordance with the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, the Securities Department of the Companydisclosed, after review and adoption by the Board of Directors or the General Meeting of Shareholders, the routine information (board meetingsand meetings of Board of Supervisors), fatal information (external investments, related transactions), and significant events truly, accurately,completely, timely and fairly. During the reporting period, the Company issued 131 announcements and documents and fulfilled the filingmanagement of information disclosure documents and compliance with the non-disclosure rules before the disclosure of the reports. In particular,the Company prepared process memorandums of important matter and management files of insider personnel before planned and implementedimportant matters, which made the information disclosure timely, true, accurate, complete and fair. There was no irregular or untimely informationdisclosure, and the Company has not been penalized by regulatory authorities. Meanwhile, in accordance with the requirements of the InvestorRelations Management System, the Company standardized the investor reception procedures. Besides, after the regular report disclosure, theCompany actively held online performance briefings and investor telephone exchange meetings to fully communicate with investors. And theRecord Sheet of Investor Relations Activities was released in time after the activities to ensure that all investors have fair access to companyinformation. In daily work, the Company also actively received consultations by arranging personnel to answer investors' hotlines and respondingto investors' questions on the interactive platform, so as to ensure that all shareholders of the Company, small and medium-sized investors inparticular, can gain the company information equally.
The Company won the thirteenth Tianma Award of "Best Investor Relations Award for Listed Companies in China" and the sixteenth ChinaListed Companies Value Selection of "Top 100 Listed Companies on Main Board in China".Is there any major variation between the actual situation of the Company's corporate governance, and laws, administrative regulations, andstipulations issued by the CSRC concerning the governance of listed companies?
□ Yes ? No
There is no major variation between the actual situation of the Company's corporate governance, and laws, administrative regulations, andstipulations issued by the CSRC concerning the governance of listed companies.II. Independence of the Company Relative to the Controlling Shareholders and the Actual Controllersin Ensuring the Company's Assets, Personnel, Finance, Organization, Business, etc.
(I) Independent and complete assets structure
The Company had its production and business operation place independent from that of the controlling shareholder, and had independent andcomplete assets structure, independent production system, auxiliary production system and supporting facilities, land use right, housing ownership,as well as independent purchasing and selling systems.
(II) Independence of personnel
In terms of personnel, labor, personnel and remuneration management, the Company was completely independent. Such senior executives asthe General Manager, Vice General Manager, Board Secretary of Directors and Chief Financial Officer did not hold any position concurrently incontrolling shareholder or other subsidiaries excepting director and supervisors, nor receive any remuneration from the controlling shareholder orother subsidiaries.(III) Independence of financeThe Company has an independent financial department, has established independent accounting system and financial management system,and makes financial decisions independently. It has opened independent bank accounts and pays taxes independently.(IV) Independence of organizationsThe Company has set up the organization independent from the controlling shareholder completely, and there exists no mixed operation ormanagement. It adopts a BU management system, and has departments directly under the Head Office and three BUs (cookware, small domesticappliances and large kitchen appliances) and high-end business modules. Neither controlling shareholder nor any other company or individual hasintervened with the organization structuring of the Company. No "superior and subordinate relationship" exists between the controlling shareholderand its functional departments on the one hand, and the Company and its functional departments on the other hand.(V) Independence of business operation from shareholders or other related partiesThe Company is mainly engaged in designing, producing and selling cookware, small domestic appliances, large kitchen appliances andH&PC products, which are not produced by the controlling shareholder or any of its subsidiaries for the Chinese market. The Company has anindependent "procurement, production and sales" system. It operates business independently from shareholders or any other related party.
III. Horizontal Competition
□ Applicable ? Not applicable
IV. General Meetings of Shareholders and Interim General Meeting of Shareholders Held during theReporting Period
1. General meetings of shareholders during the reporting period
| Session | Meeting type | Proportion of participated investors | Convening date | Date of disclosure | Meeting resolution |
| Annual General Meeting of Shareholders for 2021 Fiscal Year | Annual General Meeting of Shareholders | 8.19% | April 25, 2022 | April 26, 2022 | See Announcement on Resolutions of the Annual General Meeting of Shareholders for 2021 Fiscal Year (2022-025) disclosed on http://www.cninfo.com.cn for details |
| First Interim General Meeting of Shareholders in 2022 | Interim General Meeting of Shareholders | 7.47% | September 21, 2022 | September 22, 2022 | See Announcement on Resolution of the First Interim General Meeting of Shareholders 2022 (2022-055) disclosed on http://www.cninfo.com.cn for details |
| Second Interim General Meeting of Shareholders in 2022 | Interim General Meeting of Shareholders | 7.66% | November 10, 2022 | November 11, 2022 | See Announcement on Resolutions of the Second Interim General Meeting of Shareholders 2022 (2022-068) disclosed on http://www.cninfo.com.cn for details |
2. Interim General Meeting of Shareholders held at the request of preferred shareholders with restored voting right
□ Applicable ? Not applicable
V. Directors, supervisors and senior executives
1. Basic information
| Name | Position | Position status | Gender | Age | Commencement date of term of office | Expiry date of term of office | Number of shares held at the beginning of the period | Quantity of increased shares in this period | Quantity of decreased shares in this period | Quantity of other shares increased or reduced | Number of shares held at the end of the period | Reasons for the increase or decrease of shares |
| Thierry de LA TOUR D'ARTAISE | Chairman | On-service | Male | 68 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Su Xianze | Director | On-service | Male | 55 | May 20, 2020 | May 19, 2023 | 486,136 | 0 | 121,534 | 0 | 364,602 | Legal shareholding reduction of 25% of the annual shareholding quantity |
| Stanislas de GRAMONT | Director | On-service | Male | 58 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Nathalie LOMON | Director | On-service | Female | 52 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Delphine SEGURA VAYLET | Director | On-service | Female | 53 | April 22, 2021 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Tai Wai Chung | Director | On-service | Male | 63 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Chen Jun | Independent director | On-service | Male | 46 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Hervé MACHENAUD | Independent director | On-service | Male | 76 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Jean-Michel PIVETEAU | Independent director | On-service | Male | 76 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Philippe SUMEIRE | Chairman of Board of Supervisors | On-service | Male | 63 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Zhang Junfa | Supervisor | On-service | Male | 46 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Lu Lanhua | Supervisor | On-service | Female | 45 | May 20, 2020 | May 19, 2023 | 0 | 0 | 0 | 0 | 0 | None |
| Cheung Kwok Wah | General Manager | On-service | Male | 58 | March 31, 2021 | May 19, 2023 | 0 | 0 | 0 | 142,000 | 142,000 | Other increased or decreased changes are granted restricted stocks. |
| Xu Bo | Chief Financial Officer | On-service | Male | 55 | May 20, 2020 | May 19, 2023 | 173,737 | 0 | 43,434 | 45,000 | 175,303 | Reducing shareholding is the legal shareholding reduction of 25% of the annual shareholding |
| quantity; Other increased or decreased changes are granted restricted stocks. | ||||||||||||
| Ye Jide | Vice General Manager, Board Secretary | On-service | Male | 47 | May 20, 2020 | May 19, 2023 | 52,191 | 0 | 13,048 | 20,000 | 59,143 | Reducing shareholding is the legal shareholding reduction of 25% of the annual shareholding quantity; Other increased or decreased changes are granted restricted stocks. |
| Total | -- | -- | -- | -- | -- | -- | 712,064 | 0 | 178,016 | 207,000 | 741,048 | -- |
If there is any separation of directors and supervisors and dismissal of senior executives during the reporting period
□ Yes ? No
Change of Directors, Supervisors and Senior Executives
□ Applicable ? Not applicable
2. Position information
Professional backgrounds, main working experiences, and main responsibilities in the Company of present directors, supervisors and seniorexecutives
1. Directors
Mr. Thierry de LA TOUR D'ARTAISE: Chairman, Master of Management of Paris ESCP; Chartered Accountant; incumbent Chairman ofSEB Group; former CEO and Vice President of Group SEB, Chairman of CALOR, CFO and CEO of CROISIERES PAQUET, audit manager ofCoopers & Lybrand.Mr. Stanislas de GRAMONT: Director, graduated from ESSEC Business School (Paris); incumbent CEO of SEB Group, and former ChiefOperating Officer of SEB Group, executive management positions at Danone and CEO of Suntory Beverage & Food Europe.Ms. Nathalie LOMON: Director, graduated from NEOMA Business School; incumbent chief financial officer of SEB Group, held variousexecutive management positions at Ingenico and Rio Tinto Alcan.
Ms. Delphine SEGURA VAYLET: Director of the Company, holds Master degree in International Labor Law of University Paris 1 PanthéonSorbonne; incumbent Senior Executive Vice President of Human Resources, SEB Group, and held various executive management positions atTOTAL Group as Vice-President of Group Human Resources and Zodiac Aerospace as Group Human Resources Director and COMEX memberand STMicroelectronics as Group Human Resources Director at Digital Consumer Division.
Mr. Su Xianze: Director, CEIBS EMBA, Senior Economist; incumbent Chairman and General Manager of Supor Group Co., Ltd., Chairmanof Taizhou Supor Real Estate Development Co., Ltd. and Chairman of Zhejiang Supor Water Heater Co., Ltd.. He has severed as Chairman of theCompany from 2001 to April 2014, and General Manager from 2001 to March 2010.
Mr. Tai Wai Chung Director: graduated from the Industrial Engineering Major of University of Hong Kong; Executive vice-president ofAsian Division of SEB S.A., had served as the director and general manager of Apple (Great China) Company, marketing director of ElectroluxAppliances Company, director and general manager of Shanghai SEB Electric Appliances Co., Ltd. and general manager of the Company before.
Mr. Hervé MACHENAUD, independent director, graduated from Sciences Po; President of Hong Ma Consulting Services (Beijing) Co., Ltd..He formerly served as Leader of EDF Group Delegation to China, Senior Executive Vice President of EDF Group, Director in charge of EDFGeneration and Engineering (DPI) and Asia-Pacific Director.
Mr. Jean-Michel PIVETEAU: independent director, doctor of business administration and master of political science. He is Senior Partner ofB&A M and A Dept. , Chairman of the Board of Supervisors of MicroCred China, Vice-Chairman of the Board of Supervisors of BAOBAB. Heformerly served as Adviser for China to BNP Paribas Chairman, Senior Adviser to BNP Paribas for China, Country Head of Paribas Bank innumerous Asian counties and Middle East countries ; and is Chairman Emeritus of the "French Foreign Trade Advisors" of China.
Mr. Chen Jun: independent director, doctor of accounting of Xiamen University, post-doctor of business administration (accounting) ofZhejiang University. He is now the chairman, professor, doctoral tutor of the Department of Finance and Accounting of Zhejiang University. Heis the director of the Institute of Finance and Accounting of Zhejiang University, deputy director of the Global Entrepreneurship Research Centerof Zhejiang University, director of the Research Center of Listed Companies of Zhejiang Business Research Institute of Zhejiang University. Healso serves as vice president of Zhejiang Association of Chief Accountants.
2. Supervisors
Mr. Philippe SUMEIRE: Supervisor, graduated from Aix-en-Provence Law School with PHD's degree of Private Law and Comparative Law.He is Vice President Legal Affairs of Groupe SEB and Board Secretary. He has worked first for PEUGEOT S.A and ATOCHEM (chemicalindustry) and then held the position of General Counsel and Company Secretary for CLUB MED, GIAT INDUSTRIES and MOULINEX S.A.
Mr. Zhang Junfa: Supervisor, graduated from Northwestern Polytechnical University; incumbent Chairman of the Trade Union of theCompany and office head of Yuhuan Site, and working first for security section, and then worked in legal affairs department and office.
Ms Lu Lanhua: Supervisor, graduated from Shanghai University of Finance and Economics and MBA of University of Manchester, memberof ACCA; incumbent Financial Planning & Analysis Manager; working first for Greif Flexible Products & Service (China) as Accounting Manager,UNSA (Hangzhou) Packaging Manufacturing Ltd. as Financial Manager, and account of Bangxiang Electronics (Shenzhen) Co., Ltd.
3. Senior executives:
Mr. Cheung Kwok Wah: General Manager of the Company, Bachelor of Economics, Chinese University of Hong Kong, MBA of KellySchool of Business, Indiana University, former Chairman and President of the International Business Department of China Feihe Co., Ltd., andformer Chairman and CEO of Nestlé Greater China.
Mr. Xu Bo: Chief Financial Officer, graduated from Central University of Finance and Economics; member of CICPA and ACCA; formerSenior Auditing Manager of Shenzhen Zhonghua Certified Public Accountants, Chief Financial Officer of Yue Sai Kan Cosmetics Limited, ChiefFinancial Officer of Molex Interconnect (Shanghai) Co., Ltd., Chief Financial Officer of Microsoft China.
Mr. Ye Jide: Board Secretary, Vice General Manager, and manager of securities department, CEIBS EMBA; incumbent independent directorof Beijing DeepZero Intelligent Technology Co., Ltd., and former equipment section chief, office director and assistant to the general manager ofthe Company.Position information in shareholders' companies? Applicable □ Not applicable
| Name | Shareholding company | Positions in shareholders' companies | Commencement date of term of office | Expiry date of term of office | Payment or allowance from the shareholding company |
| Thierry de LA TOUR D'ARTAISE | SEB Group | Chairman | May 01, 2000 | Yes | |
| Philippe SUMEIRE | SEB Group | Vice President Legal Affairs of Groupe SEB and Board Secretary | December 10, 2001 | Yes | |
| Nathalie LOMON | SEB Group | Chief Financial Officer | September 30, 2019 | Yes | |
| Stanislas de GRAMONT | SEB Group | CEO | December 3, 2018 | Yes |
| Delphine SEGURA VAYLET | SEB Group | Senior Executive Vice President of HR | January 1, 2021 | Yes | |
| Tai Wai Chung | SEB Group | Senior Executive Vice President of Asia Continental Division | October 1, 2017 | Yes |
Position information in other companies? Applicable □ Not applicable
| Name | Name of other unit | Positions in other companies | Commencement date of term of office | Expiry date of term of office | Payment or allowance from other companies |
| Su Xianze | Supor Group Co., Ltd. | Chairman and General Manager | March 8, 2018 | Yes | |
| Su Xianze | Taizhou Supor Real Estate Development Co., Ltd. | Chairman | May 16, 2018 | No | |
| Su Xianze | Zhejiang Supor Water Heater Co., Ltd. | Chairman | November 15, 2019 | No | |
| Chen Jun | Zhejiang University | Dean of the Department of Finance and Accounting, Professor and Doctoral Supervisor | March 1, 2019 | Yes | |
| Hervé MACHENAUD | Hongma Consulting Services (Beijing) Co., Ltd. | President | January 1, 2017 | Yes | |
| Ye Jide | Beijing DeepZero Intelligent Technology Co., Ltd. | Independent director | October 30, 2021 | October 29, 2024 | No |
Punishment of securities regulatory commission on directors, supervisors and senior executives of the Company at present or leaving during thereporting period
□ Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Executives
Decision-making procedures, determination basis of remuneration and actual payment for directors, supervisors and senior executives
| Decision-making procedures of remuneration for directors, supervisors and senior executives | The remuneration for directors, supervisors and senior executives of the Company shall be in strict compliance with the Rules and Procedures for the Board of Directors and the Rules and Procedures for the Shareholders' Meeting, as well as the regulations of the Company's Articles of Association and the Company Law. |
Remuneration basis forDirectors, Supervisors andSenior Executives
| Remuneration basis for Directors, Supervisors and Senior Executives | The directors, supervisors and senior executives of Company are paid according to their positions and corresponding responsibilities and the Company's salary system, with an annual bonus based on the performance evaluated. |
Remuneration for Directors, Supervisors and Senior Executives during the reporting period
Unit: RMB 10,000
| Name | Position | Gender | Age | Position status | Remuneration receivable from the Company | Whether the remuneration is gained from the related party of the Company |
| Thierry de LA TOUR D'ARTAISE | Chairman | Male | 68 | On-service | ||
| Su Xianze | Director | Male | 55 | On-service | ||
| Stanislas de GRAMONT | Director | Male | 58 | On-service |
| Nathalie LOMON | Director | Female | 52 | On-service | ||
| Delphine SEGURA VAYLET | Director | Female | 53 | On-service | ||
| Tai Wai Chung | Director | Male | 63 | On-service | ||
| Chen Jun | Independent director | Male | 46 | On-service | 25.00 | No |
| Hervé MACHENAUD | Independent director | Male | 76 | On-service | 25.00 | No |
| Jean-Michel PIVETEAU | Independent director | Male | 76 | On-service | 25.00 | No |
| Philippe SUMEIRE | Chairman of Board of Supervisors | Male | 63 | On-service | ||
| Zhang Junfa | Supervisor | Male | 46 | On-service | 31.74 | No |
| Lu Lanhua | Supervisor | Female | 45 | On-service | 78.38 | No |
| Cheung Kwok Wah | General Manager | Male | 58 | On-service | 911.61 | No |
| Xu Bo | Chief Financial Officer | Male | 55 | On-service | 308.54 | No |
| Ye Jide | Vice General Manager, Board Secretary | Male | 47 | On-service | 114.06 | No |
| Total | -- | -- | -- | -- | 1,519.33 | -- |
VI. Duty Performance of Directors during the Reporting Period
1. Board of Directors during the reporting period
| Session | Convening date | Date of disclosure | Meeting resolution |
| The 11th Session of the Seventh Board of Directors | January 6, 2022 | January 7, 2022 | See Announcement of Resolution of the 11th Meeting of the Seventh Board of Directors (2022-003) disclosed on http://www.cninfo.com.cn for details |
| The 12th Session of the Seventh Board of Directors | March 31, 2022 | April 1, 2022 | See Announcement of Resolution of the 12th Meeting of the Seventh Board of Directors (2022-010) disclosed on http://www.cninfo.com.cn for details |
| The 13th Session of the Seventh Board of Directors | April 28, 2022 | April 29, 2022 | See Announcement of Resolution of the 13th Session of the Seventh Board of Directors (2022-029) disclosed on http://www.cninfo.com.cn for details |
| The 14th Session of the Seventh Board of Directors | August 30, 2022 | August 31, 2022 | See Announcement of Resolution of the 14th Meeting of the Seventh Board of Directors (2022-045) disclosed on http://www.cninfo.com.cn for details |
| The 15th Session of the Seventh Board of Directors | October 12, 2022 | October 13, 2022 | See Announcement of Resolution of the 15th Session of the Seventh Board of Directors (2022-058) disclosed on http://www.cninfo.com.cn for details |
| The 16th Session of the Seventh Board of Directors | October 24, 2022 | October 25, 2022 | See Announcement of Resolution of the 16th Session of the Seventh Board of Directors (2022-061) disclosed on http://www.cninfo.com.cn for details |
2. Attendance of board meeting and general meeting of shareholders by directors
| Attendance of board meeting and general meeting of shareholders by directors | |||||||
| Name of directors | Due attendance of board | Presence in on-site | Presence via communication | Entrusted presence in | Absence on board | Absent for twice continuously on | Attendance of general |
| meetings during the reporting period (times) | board meetings (times) | on board meetings (times) | board meetings (times) | meetings (times) | board meetings? | meeting of shareholders | |
| Thierry de LA TOUR D'ARTAISE | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Stanislas de GRAMONT | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Nathalie LOMON | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Delphine SEGURA VAYLET | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Su Xianze | 6 | 1 | 5 | 0 | 0 | No | 0 |
| Tai Wai Chung | 6 | 2 | 4 | 0 | 0 | No | 1 |
| Hervé MACHENAUD | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Jean-Michel PIVETEAU | 6 | 0 | 6 | 0 | 0 | No | 0 |
| Chen Jun | 6 | 0 | 6 | 0 | 0 | No | 3 |
Explanation on absence for twice continuouslyNone
3. Objections by directors to company issue
Were there any objections raised by directors to company issues?
□ Yes ? No
There was no objection raised by any director to company issues during the reporting period.
4. Other explanations of duty performance of directors
Was there any advice raised by directors to company issues adopted by the Company?? Yes □ NoExplanation on adoption or non-adoption of the advice from directors
During the reporting period, all directors of the Company were responsible and diligent. They paid close attention to the reports aboutCompany news by press and on the Internet and understood progress of the Company's important matters timely. They reviewed the informationreports provided by the Company periodically, and gave relevant comments and advices. They exerted their specialties fully, performed the dutiesas directors actively and maintained the legitimate rights and interests of the Company and minority shareholders.
VII. Situation of Special Committees under the Board of Directors during the Reporting Period
| Name of the Committee | Members | Meeting times | Convening date | Content of the meeting | Important opinions and suggestions put forward | Other circumstances relating to the performance of duties | Specific circumstances of disputed matters (if any) |
| Audit Committee | Chen Jun, Jean-Michel PIVETEAU, Nathalie LOMON | 4 | March 30, 2022 | The Audit Committee reviewed and discussed 1. External audit opinions; 2. Key data of the 2021 | 1. The Audit Committee approved the 2022 audit plan (focusing on the inventory management) and the 2022 key follow- | None | None |
| financial statement; 3. 2021 internal control achievement, and 2022 internal control plan; 4. Performance of internal audit projects in 2021, and 2022 audit plan and key audit findings rectification and follow-up plan; 5. Main conclusions of external audit; | up project plan. 2. The Audit Committee recommended sharing and discussing with professionals the best experiences and methods in internal control management. 3. The Audit Committee reviewed and discussed the qualifications of the external auditor and proposed the Board of Directors to review and approve KPMG as the audit service provider of the Company in 2022. 4. The Audit Committee fully recognized the full communication between external and internal audit as well as external audit and independent directors. The Committee also suggested that external audit companies can offer more valuable opinions and suggestions for Supor's internal construction and the Company's governnance by making use of their professional advantages. | |||
| June 30, 2022 | The Audit Committee reviewed and discussed 1. Progress of internal control projects in 2022; 2. Progress of the implementation of internal audit projects and rectification of key audit findings in 2022; 3. Results of external audit and review | None | None | |
| August 29, 2022 | The Audit Committee reviewed and discussed 1. External audit opinions; 2. Progress of internal control projects in 2022; 3. Progress of the implementation of internal audit projects and rectification of key audit findings in 2022; 4. Progress of external audit | The Audit Committee recognized the progress of internal control projects invloved anti-fraud policy, internal control manual and internal control evaluation. | None | None |
| November 30, 2022 | The Audit Committee reviewed and discussed 1. Progress of internal | None | None |
| control projects in 2022; 2. Progress of the implementation of internal audit projects and rectification of key audit findings in 2022; 3. Results of external audit and review | |||||||
| Compensation Committee | Hervé MACHENAUD, Jean-Michel PIVETEAU, Delphine SEGURA VAYLET | 2 | March 30, 2022 | The Compensation Committee reviewed and discussed 1. Summary of the employment situation of the Company in 2021; 2. Annual labor cost and remuneration of senior executives and employee supervisors in 2021; 3. Implementation of Restricted Stock Incentive Plan; 4. Performance of corporate social responsibilities; 5. Organization development and position information of core executives. | The Compensation Committee agreed to the proposal and recognized the Company's efforts in employment management, organizational talent strategy and remuneration strategy. | None | None |
| August 29, 2022 | The Compensation Committee reviewed and discussed 1. Employment status of the Company in the first six months of 2022; 2. Labor costs in the first six months of 2022; 3. Restricted Stock Incentive Plan of 2022; 4. Performance of corporate social responsibilities; 5. Organization development and position information of core executives. | The Compensation Committee agreed to the proposal and recognized the Company's efforts in employment management, organizational talent strategy and performance of the corporate social responsibility. | None | None |
VIII. Work of the Board of Supervisors
During the reporting period, did the Board of Supervisors find any risk about the Company?
□ Yes ? No
The Board of Supervisors held no objection to the issues supervised during the reporting period.
IX. Employees of the Company
1. Number of Employees, professional and education conditions
| Number of in-service employees of the parent company at the end of the reporting period (persons) | 1,848 |
| Number of in-service employees of the main subsidiaries at the end of the reporting period (persons) | 8,376 |
| Total number of in-service employees at the end of the reporting period (persons) | 10,224 |
| Total number of employees paid during current period (person) | 10,224 |
| Retired employees for whom the parent company and major subsidiaries should cover expenses (person) | 32 |
| Profession composition | |
| Job description | Quantity (person) |
| Production personnel | 5,683 |
| Sales personnel | 1,626 |
| Technician | 1,914 |
| Financial personnel | 180 |
| Administrative personnel | 821 |
| Total | 10,224 |
| Education | |
| Education category | Quantity (person) |
| Postgraduate and above | 156 |
| Junior college or university | 3,478 |
| Technical secondary school or high school | 2,918 |
| Others | 3,672 |
| Total | 10,224 |
2. Remuneration policy
The Company adopts floating salary system for all employees. Salary that we provide to employees includes pre-tax basic salary, performancesalary and various incentive bonuses in the form of currency; we also offer various non-monetary welfares such as commercial insurance, internaland external training, internal development and comfortable working environment.We provide employees with competitive salary and welfare to keep a certain degree of competitiveness and absorb talents; while in theCompany, to stabilize those key employees, embody the Company's value orientation, motivate self-improvement of employee and create highperformance.
3. Training plan
1) Training system:
Guided by strategic planning and business development needs, Supor relies on employees' career development and professional abilityimprovement to carry out training on professional and technical sequences and management sequences. According to the planning of talent
development strategy and coordinating with talent echelon construction, the Company designs learning projects systematically and at differentlevels.
| Training type | Training hours | Actual Number of Trainees | Average (H) |
| Online trainings in 2022 | 57,060 | 3,604 | 15.83 |
| Offline trainings in 2022 | 231,092 | 12,408 | 18.62 |
The detailed offline training data in 2022 are as follows:
| Position level | Training hours (H) |
| Senior management | 1,927 |
| Middle level | 10,297 |
| General employees | 86,643 |
| Front-line employees | 132,225 |
| Total training hours | 231,092 |
| Type | Actual Number of Trainees |
| Number of male employees trained | 7,734 |
| Number of female employees trained | 4,674 |
| Total number of participants | 12,408 |
2) Various forms
Supor lays emphasis on the innovation of employee training. In order to promote the training experience and leaning conversion rate, theCompany facilitates learning in multiple perspectives through diverse forms involved online learning, live streaming, offline learning, projectworkshops, internal and external thematic exchange sessions, and cross-fields visits.
3) Internal inheritance
According to the planning of talent development strategy and coordinating with talent echelon construction, the Company irregularlyorganizes professional personnel in relevant fields to extract knowledge, develop courses and impart their organizational and personal experience.We also provide instructor and tutor resources which are mainly from internal managers to employees to improve the competence and speed upthe growth of employees and practice our talent building and development policies.
4. Labor outsourcing
? Applicable □ Not applicable
| Total hours of labor outsourcing (Hours) | 11,560,078.77 |
| Total remuneration paid for labor outsourcing (RMB) | 251,936,898.45 |
X. Profit Distribution and Conversion from Capital Reserves to Share Capital during the ReportingPeriod
Formulation, implementation or adjustment of profit distribution policies, especially cash dividend policies during the reporting period? Applicable □ Not applicable
During the reporting period, the Company implemented the profit distribution plan in strict accordance with the Articles of Association andother relevant provisions, where the dividend distribution standard and proportion were clear and definite and the relevant decision-makingprocedures and mechanisms were complete.
(1) Profit Distribution Plan 2021
The Company held the 12
th Session of the Seventh Board of Directors and the 11
thSession of the Seventh Board of Supervisors on March 31,2022, and held the Annual General Meeting of Shareholders for 2021 Fiscal Year on April 25, 2022, which deliberated and approved the Proposalon Profit Distribution Plan 2021. The Company's Profit Distribution Plan 2021 is: based on the 808,678,476 shares at the end of 2021 (shares inthe Company’s special stock repurchase account were granted to incentive objects on January 27, 2022), the Company will distribute allshareholders cash dividends of RMB 19.30 per 10 shares (tax included), and total amount of cash dividends is RMB 1,560,749,458.68. TheCompany will issue 0 bonus shares (tax included) and not convert capital reserves to capital. On May 26, 2022, the equity distribution of theCompany for 2021 was completed.(II) Profit Distribution Plan for Third Quarter of 2022
The Company held the 16
th
Session of the Seventh Board of Directors and the 15
thSession of the Seventh Board of Supervisors on October24, 2022, and deliberated and approved the Proposal on Profit Distribution Plan for Third Quarter of 2022 on the Second Interim General Meetingof Shareholders 2022 on November 10, 2022. The Company's Profit Distribution Plan for Third Quarter of 2022 is: based on the 805,329,407shares at the end of third quarter of 2022 (total capital stock of 808,654,476 shares at the end of third quarter of 2022 deducted by 3,325,069 sharesof repurchased shares in the Company’s special stock repurchase account), the Company will distribute all shareholders cash dividends of RMB
12.50 per 10 shares (tax included), and total amount of cash dividends is RMB 1,006,661,758.75. The Company will issue 0 bonus shares (taxincluded) and not convert capital reserves to capital. The equity distribution of the Company for third quarter of 2022 was completed on December6, 2022.
| Special description of cash dividend policy | |
| Whether it meets the requirements in Articles of Associations or resolutions of the Shareholders' Meeting: | Yes |
| Whether the dividend standard and proportion are definite and clear: | Yes |
| Whether the relevant decision procedure and mechanism are complete: | Yes |
| Whether the independent director performs obligations and plays roles: | Yes |
| Whether the minority shareholders have opportunity in giving opinions and claims, and whether the legal interests of minority shareholders are protected sufficiently: | Yes |
| Where the cash dividend policy is adjusted or changed, and whether the conditions and procedures are compliant and transparent: | Yes |
Information on profit-making during the reporting period and positive undistributed profit of parent company for shareholders but without cashdividend distribution plan
□ Applicable ? Not applicable
Profit distribution and conversion from capital reserves to share capital during the reporting period? Applicable □ Not applicable
| Number of bonus stock per 10 shares (shares) | 0 |
| Amount of dividend (RMB) per 10 shares (tax-inclusive) | 30.30 |
| Equity base in distribution plan (shares) | 805,116,907 |
| Amount of cash dividends (tax-inclusive) | 2,439,504,228.21 |
| Amount of cash dividends realized in other modes (e.g. repurchased shares) (RMB) | 162,937,785.50 |
| Total cash dividends (including other modes) (RMB) | 2,602,442,013.71 |
| Distributable profits (RMB) | 4,331,212,701.66 |
| Proportion of total cash dividends (including other modes) in total distribution of profits | 100% |
| Cash Dividends of This Time | |
| Others | |
| Detailed information on profit distribution and conversion of capital reserve to capital pre-proposal |
| In accordance with the standard unqualified audit report provided by KPMG Certified Public Accountants (Special General Partnership), the parent company of Zhejiang Supor Co., Ltd. realized the net profits of RMB1,807,644,330.09 in 2022, and could distribute profits of RMB 4,331,212,701.66 to shareholders at the end of the year based on relevant provisions of Company Law and the Articles of Association, after allocating RMB 0 as legal surplus reserve (note: the accumulated amount of legal surplus reserve reached 50% of total capital stock), plus the undistributed profit of RMB 5,141,307,982.39 at the beginning of this reporting period, deducting the annual cash dividends for 2021 fiscal year of RMB 1,559,494,958.68 distributed on May 26, 2022, the cash dividends for third quarter of 2022 of RMB 1,008,228,633.75 distributed on December 6, 2022, and decreased distributable profit RMB 50,016,018.39 due to the grant of Restricted Stocks on January 27, 2022 and November 10, 2022 with respect to 2021 and 2022 Restricted Stock Incentive Plan, . The profit distribution plan is detailed as follows: based on the 805,116,907 shares at the end of 2022 (total capital stock of 808,654,476 shares at the end of 2022 deducted by 3,537,569 shares of repurchased shares in the Company’s special stock repurchase account), the Company will distribute all shareholders cash dividends of RMB 30.30 per 10 shares (tax included), and total amount of cash dividends is RMB 2,439,504,228.21 . The Company will issue 0 bonus shares (tax included) and not convert capital reserves to capital. During the period from the disclosure of this profit distribution preplan to the actual implementation date, if the Company’s capital stock changes due to conversion of convertible bonds into stocks, share repurchases, equity incentive exercise, and refinancing and new share listing, it will be executed based on the changed capital stock, and the above distribution ratio remains unchanged. |
XI. Implementation of Company's Equity Incentive Plan, Employee Equity Holding Plan or OtherEmployee Incentive Measures? Applicable □ Not applicable
1. Equity incentive
(I) 2021 Equity Incentive Plan
1.The Company deliberated and approved the Proposal on Grant of Restricted Stock to Incentive Objects at the 11
thSession of the Seventh Boardof Directors held on January 6, 2022. In accordance with the authorization of the Third Interim General Meeting of Shareholders 2021, the Boardof Directors of the Company determined January 6, 2022 as the grant date to grant 1,209,500 restricted stocks to 293 eligible incentive objects.The restricted stocks of the Company's 2021 Restricted Stock Incentive Plan were transferred and registered to incentive objects on January 27,2022.
Please refer to the Announcement of Grant of Restricted Stock to Incentive Objects and the Announcement of Completion of Registrationfor Grant of Restricted Stock of 2021 for details, which were disclosed on Securities Times, China Securities Journal, Securities Daily, andhttp://www.cninfo.com.cn on January 7, 2022 and January 28, 2022 accordingly.
2. On March 31, 2022, the 12
th
Session of the Seventh Board of Directors and the 11
th
Session of the Seventh Board of Supervisors reviewed andadopted Proposal on Repurchasing and Canceling a Part of Restricted Stock. For disqualification of six incentive objects due to their resignation,the Company has decided to repurchase and cancel 24,000 shares of Restricted Stock at the price of RMB 1 per share. The Proposal onRepurchasing and Canceling a Part of Restricted Stock has been adopted by the Annual General Meeting of Shareholders for 2021 Fiscal Yearheld on April 25, 2022. The Company has repurchased and canceled 24,000 shares of Restricted Stock at the price of RMB 1 per share and paidtotally RMB 24,000 to the above incentive objects. After confirmed by Shenzhen Branch of China Securities Depository and Clearing CorporationLimited, the Company completed repurchase and cancellation on June 29, 2022.
Please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock and Announcement of Completion of Repurchaseand Cancellation of Restricted Stock disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn onApril 1, 2022, and June 30, 2022 for details.
5. On August 30, 2022, the 14
th Session of the Seventh Board of Directors and the 13
th
Session of the Seventh Board of Supervisors reviewed andadopted Proposal on Repurchasing and Canceling a Part of Restricted Stock. For disqualification of thirteen incentive objects due to theirresignation, the Company has decided to repurchase and cancel 53,000 shares of Restricted Stock at the price of RMB 1 per share. The cancellationof restricted stock repurchase can only be implemented after the deliberation and approval by the General Meeting of Shareholders in the Company.
Please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock disclosed on Securities Times, China SecuritiesJournal, Securities Daily, and http://www.cninfo.com.cn on August 31, 2022 for details.
(II) 2022 Equity Incentive Plan
1. The 14
th Session of the Seventh Board of Directors and the 13
thSession of the Seventh Board of Supervisors held by the Company on August30, 2022 reviewed and adopted the Proposal on 2022 Restricted Stock Incentive Plan (Draft) and its Abstract. The Company intended to grant atotal of 1,332,500 shares of restricted stocks to the 290 incentive objects, accounting for about 0.165% of the Company's total share capital. Theindependent directors of the Company expressed their independent opinions on the equity incentive plan, and the Board of Supervisors of theCompany conducted preliminary verification on the list of incentive objects.For details, please refer to the Restricted Stock Incentive Plan (Draft) 2022 and its Abstract disclosed on Cninfo (http://www.cninfo.com.cn)on August 31, 2022.
2. The Company disclosed the Verification Opinions on List of Incentive Objects for 2022 Restricted Stock Incentive Plan on September 16, 2022.According to the Company's Board of Supervisors, the incentive objects enrolled into the incentive plan meet the conditions stipulated in relevantlaws, regulations and regulatory documents, and their subject qualification as the incentive objects of the Restricted Stock Incentive Plan is legaland effective.For detailed contents, see Verification Opinions on List of Incentive Objects for 2022 Restricted Stock Incentive Plan disclosed on SecuritiesTimes, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on September 16, 2022.
3. The First Interim General Meeting of Shareholders 2022 convened by the Company on September 21, 2022 deliberated and approved theProposal on 2022 Restricted Stock Incentive Plan (Draft) and its Abstract, the Proposal on Assessment Measures for the Implementation of the2022 Restricted Stock Incentive Plan, and the Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directorsto Deal with Issues Related to the Company's Restricted Stock Incentive Plan.See Announcement on Resolutions of the First Interim General Meeting of Shareholders 2022 disclosed on Securities Times, China SecuritiesJournal, Securities Daily, and http://www.cninfo.com.cn on September 22, 2022 for details.
4. The Company disclosed the Self-verification on Buying or Selling the Company's Shares by Insiders and Incentive Objects of 2022 RestrictedStock Incentive Plan on September 22, 2022. During the planning of this incentive plan, the Company did not find that persons with insiderinformation used the information to buy or sell stocks. Moreover, 6 months prior to the first public disclosure of this Incentive Plan (Draft), theCompany found there were no persons with insider information or incentive objects used the insider information to buy and sell stocks.
For detailed contents, see Self-verification on Buying or Selling the Company's Shares by Insiders and Incentive Objects of 2022 RestrictedStock Incentive Plan disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on September 22,2022.
5. The Company deliberated and approved the Proposal on Grant of Restricted Stock to Incentive Objects at the 15
thSession the Seventh Board ofDirectors and the 14
thSession of the Seventh Board of Supervisors held on October 12, 2022. The Company plans to grant 1,253,500 shares ofrestricted stocks to totally 288 incentive objects, and postpone a total of 79,000 shares of restricted stocks to 2 incentive objects. The Companycompleted the registration of restricted stock grants on November 10, 2022.
For detailed contents, see Announcement of Grant of Restricted Stock to Incentive Objects and the Announcement of Completion ofRegistration for Grant of Restricted Stock of 2022 disclosed on Securities Times, China Securities Journal, Securities Daily, andhttp://www.cninfo.com.cn on October 13, 2022, and November 11, 2022.
6. The Company deliberated and approved the Proposal on Grant of Postponed Portion of Restricted Stock to Incentive Objects at the 18
thSessionthe Seventh Board of Directors and the 17
thSession of the Seventh Board of Supervisors held on January 31, 2023. The Company plans to grant79,000 shares of restricted stocks to two incentive objects. The Company completed the registration of restricted stock grants on February 24,2023.
Please refer to the Announcement of Grant of Postponed Portion of Restricted Stock to Incentive Objects and the Announcement ofCompletion of Registration for Grant of Postponed Portion of Restricted Stock of 2022 for details, which were disclosed on Securities Times,China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on February 2, 2023 and February 27, 2023.Equity incentives received by the Company's directors and senior executives? Applicable □ Not applicable
Unit: share
| Name | Position | Number of stock options held at the end of the year | Number of newly-granted stock options during the reporting period | Shares which can be exercised during the reporting period | Shares which have been exercised during the reporting period | Exercise price of exercised shares during the reporting period (RMB/share) | Number of stock options held at the end of the period | Market price at the end of reporting period (RMB/share) | Restricted stock held at the beginning of period | Shares unlocked in current period | Restricted stock newly granted during the reporting period | Granting price of restricted stock (RMB/share) | Restricted stock held at the end of period |
| Cheung Kwok Wah | General Manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 142,000 | 1 | 142,000 |
| Xu Bo | Chief Financial Officer | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 45,000 | 1 | 45,000 |
| Ye Jide | Vice General Manager, Board Secretary | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 20,000 | 1 | 20,000 |
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 0 | 0 | 207,000 | -- | 207,000 |
| Remarks (if any) | Mr. Cheung Kwok Wah, the General Manager, was granted 60,000 and 82,000 restricted stocks of the 2021 and 2022 Equity Incentive Plans, respectively, for a total of 142,000 shares. Mr. Xu Bo, Chief Financial Officer, was granted 45,000 restricted stocks in the 2021 Equity Incentive Plan. Moreover, because Mr. Xu Bo has decreased his shareholdings of the Company on July 28, 2022, his 58,000 restricted stocks granted in the 2022 Equity Incentive Plan need to be suspended. The suspended stocks have been registered on February 24, 2023. Mr. Ye Jide, Vice General Manager and Board Secretary, was granted 20,000 restricted stocks in the 2021 Equity Incentive Plan. Moreover, because Mr. Ye Jide has decreased his shareholdings of the Company on July 28, 2022, his 21,000 restricted stocks granted in the 2022 Equity Incentive Plan need to be suspended. The suspended stocks have been registered on February 24, 2023. | ||||||||||||
Evaluation mechanism and incentive of senior executivesThe Company has established a perfect performance appraisal system and salary system for senior executives, which directly connects thework performance of senior executives with their salary. Based on the indicators of the KPI system established at the beginning of 2022, theCompany has conducted the year-end appraisal in January 2023 of senior executives of their working abilities, duty performance and targetfulfillment, meanwhile, distributed annual performance salary. During the reporting period, the Company has implemented the 2022 RestrictedStock Incentive Plan (Draft) and granted restricted stocks to senior executives. The Compensation Committee of the Board of Directors, as thespecial committee under the Board of Directors, reviewed the appraisal result.
2. Implementation of the employee stock ownership plan
□ Applicable ? Not applicable
3. Other employee incentive measures
□ Applicable ? Not applicable
XII. Development and Implementation of Internal Control Systems during the Reporting Period
1. Development and implementation of internal controls
In accordance with the requirements of the Basic Standards for Internal Control of Enterprises and based on the principles ofcomprehensiveness, significance, balance, adaptability and cost-effectiveness, the Company establishes and improves the internal control systemimplemented by the Board of Directors, Board of Supervisors, managers and all employees to achieve the Company's strategic development goals,with a view to reasonably ensuring the legal compliance of the Company's operation and management, asset security, and authenticity and integrityof financial statements and related information, and to improving business efficiency and effectiveness.
1. Control environment
(1) Governance structure
In accordance with the provisions of national laws and regulations, resolutions of the Board of Shareholders, and the Articles of Association,the Company defines the duties and authorities, rules of procedure, and working procedures of the Board of Shareholders, Board of Directors,Board of Supervisors and managers, so as to form a governance mechanism for the separation of decision-making, implementation, and supervision.The Board of Directors is accountable for the Board of Shareholders, and exercises the business decision-making power of the Company accordingto law, and shall be accountable for the establishment, improvement and effective implementation of internal control. The special committeespertaining to strategy, audit and remuneration set up under the Board of Directors provide support for scientific decision-making, in which theAudit Committee is responsible for reviewing and supervising the effective implementation of internal controls and the self-evaluation on internalcontrols. The Board of Supervisors is accountable for the Board of Shareholders and supervises the Board of Directors and senior executives ofthe Company to perform their duties according to law. The senior management composed of the President and the Chief Financial Officer areaccountable for the Board of Directors, and take charge of the daily operation and management activities of the Company.
(2) Organizational structure and division of authorities and responsibilities
In view of the business characteristics and internal control requirements, the Company reasonably sets up internal organizations at all levels,such as the functional departments of the headquarters, business departments, production bases, marketing centers and other internal institutions,and defines the division of authorities and responsibilities in the organization structure chart, job descriptions, business flow charts, authorizationsystem documents and other internal management documents, so as to form a working mechanism that allows performance of corresponding dutieswith mutual restriction and coordination.
(3) Internal audit
The Company has set up an audit department, which reports to the Audit Committee of the Board of Directors. The audit department evaluatesthe level of internal control and the efficiency of process control and organization by means of internal audit, internal control consultation andorganizational risk assessment, and timely reports to the management and the Audit Committee for the internal control defects and potential risksdetected in the process of supervision and inspection, and promotes relevant departments to formulate action plans and follow up the correspondingrectification performance to ensure the effective implementation of internal controls.
(4) Human resource policies
In accordance with the development strategy, current situation of human resources, and future demand forecast, the Company formulatesand implements human resources policies conducive to the sustainable development of the Company. The Personnel Management System,Recruitment Management System, Remuneration Management System, Training Management System, Attendance Management System, andEmployee Manual formulated by the Company clearly define the principles and processes for the employees in aspects of selection andappointment, dimission and transfer, remuneration assessment, training, rewards and punishments, labor disciplines, information confidentiality,etc.
(5) Enterprise culture
The Company adheres to the enterprise spirit of "With Pressure, Face Pressure, Overcome pressure", sets up the enterprise style of "Patriotism,Integrity, Modesty, Pragmatism, Innovation and Transcendence, and devotes to improving the living quality of thousands upon thousands offamilies in their kitchens and homes, so that "Where there is a home, there is Supor" can become the consensus of more and more consumers.Through the establishment of a series of internal norms such as the Basic Law of Supor, the Code of Professional Ethics of Employees and theRules for Anti-spam the Company integrates the efficient and pragmatic corporate culture into all aspects of daily production and operating
activities, and enhances the employees' sense of responsibility and sense of mission, normalizes employee behaviors, enhances corporate cohesionand coagulation, and constantly improves the overall image of the Company.
2. Risk assessment
According to the established control objectives and the characteristics of business development in different stages, the Company introducesdifferent forms of measures, such as risk self-assessment, anti-corruption questionnaire, risk mapping, and tax risk matrix, to carry outcomprehensive, systematic and continuous collection of relevant information, with the method combining both quantitative and qualitativemeasures, in order to timely identify and systematically analyze the internal risks in the production and operating processes in terms of humanresources, management, innovation, finance, assets, health, safety, environmental protection, data confidentiality, business loss, and continuingoperation, and the external risks in the production and operating processes in terms of politics, economy, law, taxation, science and technology,natural environment, social environment, etc., and to determine the risk response strategy that matches the Company's risk bearing capacity andtake appropriate control measures to achieve effective risk control, on the basis of weighing the principle of cost-benefit.
3. Control activity
In the course of daily operation, the Company continuously establishes and improves various management systems, covering financialaccounting, internal control, human resources, material procurement, inventory management, asset management, technological R&D, productionprocess, quality control, product sales, health, safety and environment, comprehensive management, etc., to ensure the compliance of all workaspects. Under the various institutional frameworks, the Company reasonably ensures the realization of business objectives through theimplementation of key control measures and procedures.
Key controls must include: separated control for incompatible posts, approval control for authorization, accounting system control, propertyprotection and control, budget control, operational analysis control, performance assessment control and other controls.
(1) Approval control for authorization: the Company defines the scope, authority, procedure, responsibility and other relevant aspects ofauthorization and approval, and the management staff at all levels of the Company must exercise the corresponding functions and powers withinthe scope of authorization, and the handling personnel must also handle economic transactions within the scope of authorization and bearcorresponding liabilities.
(2) Separated control for incompatible posts: the Company sets up a reasonable division of labor, scientifically divides responsibilities andpowers, and formulates the System of Separation of Responsibilities and Powers in accordance with the principle of separation of incompatibleduties, so as to form a mechanism of mutual checks and balances. Incompatible duties mainly include: feasibility study and decision approval,decision approval and implementation, implementation and supervision & inspection.
(3) Accounting system control: in strict accordance with the provisions of the Accounting Standards for Business Enterprises, the Companyformulates the financial policies and processes such as the Accounting Preconditions and Basic Principles, Accounting System of AccountingSubjects, Revenue Recognition System, Consolidated Statement System, and Account Settlement Process, clearly defines the handling proceduresfor accounting vouchers, accounting books and financial statements, so as to ensure the authenticity and integrity of accounting data.
(4) Property protection and control: the Company strictly restricts unauthorized personnel from accessing and disposing assets, and adoptsmeasures such as regular stocktaking, asset records, account verification, and property insurance, to ensure the safety of all kinds of assets inaccordance with the requirements of the Inventory Taking and Regulation System, and Fixed Assets Management System formulated by theCompany.
(5) Budget control: the Company implements comprehensive budget management in accordance with the Budget System, and the responsibledepartments at all levels prepare their budgets in accordance with their responsibilities and powers, and regularly follow up the implementation oftheir budgets after being reviewed and approved by the management.
(6) Operational analysis control: the Company has established a regular operation analysis mechanism, with which the management canutilize the data and information acquired in the production, procurement, sales, finance and other systems to comprehensively analyze and evaluatethe Company's operating risks and market situations, timely detect any problems, identify the causes and formulate effective rectification plansfor improvement.
(7) Performance assessment control: according to the requirements of the Company's Remuneration Management System, the Company'sorganizations at all levels have established and implemented a comprehensive and systematic performance assessment system, to scientifically setup performance assessment indicators of various individuals/groups, regularly organize assessment and objective evaluation, and take theassessment results as the basis for employee remuneration adjustment, job promotion, reward and punishment, post transfer, dismissal, etc.
4. Information and communication
According to the requirements of development strategy, risk control and performance assessment, the Company has established differentlevels of internal reporting indicator systems, in order to enable the management at all levels to timely and comprehensively access all kinds ofinternal and external information pertaining to production and management and promptly formulate business principles and policies adaptive tobusiness and environmental changes. The internal reporting systems make full use of information technology to build a scientific internal reportingnetwork based on reliable information systems such as SAP, BI, CRM, consolidated statements, and management statements.The Company has established a special anti-fraud mechanism, clearly defined the key areas and key links of anti-fraud efforts and the anti-fraud responsibilities and powers of relevant departments, and set up the solely-designated supervision channel to standardize the whistleblowing,investigation, handling, reporting and follow-up processes of fraud cases. Besides, through e-mail, official website, WeChat official account,contracts, training, meetings and other forms of measures, the Company publicizes the anti-fraud policies and supervision channels to employees,suppliers, distributors and other stakeholders from time to time, so as to form an anti-fraud atmosphere which emphasizes on prevention andcombines both punishment and prevention.
5. Supervision on control
The Company has established an internal control and supervision mechanism, with which the independent directors and the Board ofSupervisors can fully and independently perform supervisory duties for the management of the Company, and carry out independent evaluationand provide independent suggestions. The Company has formulated the Internal Audit System, and the special internal audit department under theleadership of the Audit Committee of the Board of Directors can independently carry out internal audit, implement effective supervision over themanagement and promote the effective implementation of internal controls. In the light of the situation of internal supervision, the Companyregularly carries out self-evaluation on the effectiveness of internal controls and issues Self-Evaluation Report on Internal Control System.
2. Significant internal control defects of internal control found during the reporting period
□ Yes ? No
XIII. Company's Management and Control of Subsidiaries during the Reporting PeriodThe headquarters of listed companies effectively monitors the subsidiaries through the following measures:
(1) Delegate and appoint senior executives of subordinate subsidiaries at the beginning of each year, and clearly define their terms of referenceand report objects.
(2) Supervise subordinate subsidiaries to formulate detailed management processes and risk control procedures for various business sectors andfunctional areas under the principle frameworks of management systems of the headquarters and business divisions.
(3) Convene a monthly operating and financial meeting to review and follow up the implementation of the subsidiaries' business plans and thecompletion of various performance evaluation indicators in a timely manner, in accordance with the Company's development and businessobjectives specified in the annual budget planning meeting. Besides, various functional committees, such as product committee, and procurementcommittee, also carry out effective monitoring over the daily operation and operating activities of the subsidiaries.
(4) The main financial and business information systems, including SAP, CRM, SRM, BI, OMS and BPM, are centrally managed in theheadquarters of listed companies, which is convenient for the headquarters to access and manage the production, sales and procurement of thesubsidiaries through system reports in real time. In addition, all subsidiaries are also required to submit management reports in respect of operation,finance, industry, human resources, etc., to the headquarters on a monthly basis.
(5) The receipts and payments of major subsidiaries are subject to centralized allocation and disbursement of the Financial Sharing Center of theheadquarters of the listed companies, and the Financial Sharing Center is responsible for the preparation and reporting of the monthly balancesheets, profit statements and cash flow statements of the subordinate subsidiaries, and convening regular meetings with subordinate subsidiariesto analyze and follow up the changes of various financial data.
(6) In accordance with the requirements of the Company's Management System for Information Disclosure Affairs, each subsidiary shall promptlyreport to the headquarters of the listed companies relevant information pertaining to major business/financial and other matters, and providetimely feedback on the progress or changes of major matters, and if necessary, go through the review and approval procedures of the Board ofDirectors and Board of Shareholders.
(7) Timely identify the potential risks and major issues inside and outside the subsidiaries by means of internal audit, risk self-assessment, anti-corruption questionnaire, management statement and anti-fraud investigation, etc., draw the management's attention to key areas and vulnerablelinks, and promptly take measures to reduce relevant risks.
XIV. Internal Control Self-evaluation Report or Internal Control Audit Report
1. Self-evaluation report of internal control
| Date of disclosure of full text of Evaluation Report of Internal Control | March 31, 2023 | |
| Reference for disclosure of full text of Evaluation Report of Internal Control | Reference can be made to Self-Evaluation Report on Internal Control 2022 disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn. | |
| The proportion of total unit assets involved in evaluation scope in total assets of the consolidated financial statement | 100.00% | |
| The proportion of operating income involved in evaluation scope in operating income of the consolidated financial statement | 100.00% | |
| Defect Identification Standard | ||
| Categories | Financial statement | Non-financial statement |
| Qualitative standard | 1) Identification standard of significant defects: fraud of directors, supervisors and senior executives of the Company; modification of financial statement having been published; any material misstatement of the current period financial statement found by CPA but having not been found during internal control; and invalid supervision by the Audit Committee, the Board of Supervisors and internal audit organization for internal control. 2) Identification standard of important defects: selection and application of accounting policies violating accepted accounting criteria; one or several defect(s) on the control of closing financial statement, and failure of reasonably guarantee the prepared financial statement is true and accurate; no check-and-balance system and control measures preventing fraud established. 3) General defects refer to other internal control defects not constituting the standards of significant defects and important defects. | 1) Identification standard of significant defects: unscientific decision procedure of the Company, such as significant decision-making mistakes which cause the M&A of significant enterprise project to fail in reaching expected objectives; violation of national laws and regulations, such as heavy losses of enterprise caused by non-conforming products; significant adverse influence existing in the production and operation of enterprise caused by severe loss of medium and senior management persons and senior technicians; and lack of system control or systematic invalidation for important business. 2) Identification standard of important defects: defects on important business systems; failure of rectification for important defects found during internal control and internal supervision; and severe loss of business persons on key posts. 3) Identification standard of general defects: defects on general business systems; failure of rectification for general defects found during internal control and internal supervision; and severe loss of business persons on general posts. |
| Quantitative standard | 1) Identification standard of significant defects: | 1) Identification standard of significant defects: |
| potential misstatement of total profit≥5% of total profit; potential misstatement of total operating income≥2% of total operating income; and potential misstatement of total assets≥2% of total assets. 2) Identification standard of important defects: 3% of total profit≤potential misstatement of total profit＜5% of total profit; 1% of total operating income≤potential misstatement of total operating income＜2% of total operating income; and 1% of total assets≤potential misstatement of total assets＜2% of total assets. 3) Identification standard of general defects: potential misstatement of total profit ＜ 3% of total profit; potential misstatement of total operating income ＜ 1% of total operating income; and potential misstatement of total assets ＜ 1% of total assets. | direct property loss amount taking above (inclusive) 0.5% in total assets, and causing significant adverse influence on the Company. 2) Identification standard of important defects: direct property loss amount taking above (inclusive) 0.1% but no more than 0.5% in total assets, and causing no significant adverse influence on the Company. 3) Identification standard of general defects: direct property loss amount taking below 0.1% in total assets, and causing significant adverse influence on the Company. | |
| Quantity of significant defects in financial statement (pcs) | 0 | |
| Quantity of significant defects in non-financial statement (pcs) | 0 | |
| Quantity of important defects in financial statement (pcs) | 0 | |
| Quantity of important defects in non-financial statement (pcs) | 0 | |
2. Audit report of internal control
? Applicable □ Not applicable
| Deliberations in the audit report of internal control | |
| We believe that your company has maintained effective internal control over financial reporting in all major aspects in accordance with the Basic Standards for Internal Control of Enterprises and relevant regulations on December 31, 2022. | |
| Disclosure of audit report of internal control | Disclosed |
| Date of disclosure of full text of Audit Report of Internal Control | March 31, 2023 |
| Reference for disclosure of full text of Audit Report of Internal Control | Reference can be made to Audit Report on Internal Control 2022 disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn. |
| Type of audit report opinion of internal control | Standard opinions with no reservation |
| Significant defect in non-financial statements | No |
Did the accounting firm issue the audit report of internal control with non-standard opinions?
□ Yes ? No
Is the audit report of internal control issued by the accounting firm consistent with the opinions in self-evaluation report of the Board of Directors?? Yes □ No
XV. Rectification of Self-inspected Problems in the Special Action on Governance of Listed Companies
In January 2022, the CSRC revised and released the Guidelines for Articles of Association of Listed Companies, Rules for the GeneralMeeting of Shareholders of Listed Companies, Rules for Independent Directors of Listed Companies and other rules. In order to better improvethe Company's internal governance, the 12
th
Session of the Seventh Board of Directors was held on March 31, 2022, which deliberated andapproved the Proposal on Revising the Articles of Association, the Proposal on Revising Rules and Procedures for the Shareholders' Meeting, theProposal on Revising Rules and Procedures for the Board of Directors and the Proposal on Issuing New Working System for Independent Directors.The abovementioned amendment to the Articles of Association and Rules and Procedures had been reviewed and approved at the Annual GeneralMeeting of shareholders for 2021 Fiscal Year held by the Company on April 25, 2022.
Subsequently, the Company will sort out and update the internal control systems issued by the Company in a timely manner in accordancewith the current laws and regulations, and will continuously establish and improve the internal control systems, to make them work more efficiently.
SECTION V SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES
I. Major Environmental IssuesDo the listed company and its subsidiary belong to key pollutant discharging unit posted by the environmental protection department?? Yes □ NoPolicies and industrial standards related to environmental protection
According to the Technical Specification for Application and Issuance of Pollutant Permit General Programme (HJ942-2018), the Self-monitoring Technology Guidelines for Pollution Sources - General Rule (HJ819-2017) and the national standards for pollutants discharge, theenvironmental impact assessment documents of construction projects and their administrative licenses, and the requirements in nationalenvironment monitoring technical specifications, the Company has improved its self-monitoring scheme, which needs to be put on record by thecompetent department for ecological environment under its jurisdiction.Administrative permissions for environmental protectionIn accordance with the relevant system, Zhejiang Supor Co., Ltd., Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd., ZhejiangShaoxing Supor Domestic Electrical Appliances Co., Ltd., Wuhan Supor Cookware Co., Ltd. have obtained the pollutant discharge permit on June30, 2020, August 25, 2020, August 24, 2020 and September 11, 2020; The above certificates are valid for 3 years.Industrial emission standard and pollutant discharge in production and operating activities
| Name of the Company or subsidiary | Type of main pollutant or specific pollutant | Name of main pollutant or specific pollutant | Discharge mode | Number of discharge ports | Distribution of discharge ports | Discharge concentration/intensity | Executive pollutant discharge standard | Total discharge amount | Total discharge amount checked | Excessive discharge |
| The Company | Water pollutants | COD | Included into urban pipeline after pollutants are treated up to standards | 1 | Wastewater discharge port of the wastewater station in plant area | 30mg/L | "Quasi-IV" standards in the Table of Effluent Indexes and Standard Limits for Urban Sewage Treatment Stations in Taizhou | 6.178t | 8.662t/a | None |
| Water pollutants | Ammoniacal nitrogen | 1.5mg/L | "Quasi-IV" standards in the Table of Effluent Indexes and Standard Limits for Urban Sewage Treatment Stations in Taizhou | 0.309t | 0.433t/a | None | ||||
| Air pollutants | SO2 | Organized emission | 15 | Workshop 1# and 6# in plant area | ＜3 mg/m? | Comprehensive Treatment Scheme of Air Pollutants for Industrial Furnace and | 0.829t | 3.06t/a | None |
| Kiln (HDQ [2019] No. 56) | ||||||||||
| Air pollutants | NOx | 15 | ＜8 mg/m? | Comprehensive Treatment Scheme of Air Pollutants for Industrial Furnace and Kiln (HDQ [2019] No. 56) | 7.76t | 14.66t/a | None | |||
| Zhejiang Supor Electrical | Water pollutants | COD | Indirect discharge | 1 | General outlets of wastewater (DW001) | 12.2mg/l | Discharge Standard of Pollutants for Municipal Wastewater Treatment Plant (GB18918-2002) | 5.54t | 14.6t/a | None |
| Ammoniacal nitrogen | 1 | 0.18mg/l | Indirect Discharge for Emission Limitation of Nitrogen and Phosphorus for Industrial Wastewater (DB33/887-2013) | 0.059t | 0.73t/a | None | ||||
| Air pollutants | VOCs | Organized emission | 4 | Discharge port of spraying and drying exhaust gas (DA001) Discharge port of catalytic combustion exhaust gas (DA005), discharge port of spraying exhaust gas (DA009) and discharge port of the plastic workshop (DA010) | DA001:11.18mg/m?; DA005:16.64mg/m?; DA009:13.64 mg/m?; DA010:0.73 mg/m? | Emission Standard of Air Pollutants for Industrial Surface Coating (DB33/2146-2018) | 2.732t | 3.641t/a* | None | |
| Shaoxing Supor | Water pollutants | COD | Included into urban pipeline after pollutants are treated up to standards | 1 | Wastewater discharge port of the wastewater station in plant area | 66.72mg/L | Integrated Wastewater Discharge Standard (GB8978-1996) | 47.295139t | 69.630000t/a | None |
| Ammoniacal nitrogen | 6.1933mg/L | Indirect Discharge for | 4.390182t | 7.430000t/a | None |
| Emission Limitation of Nitrogen and Phosphorus for Industrial Wastewater (DB33/887-2013) | ||||||||||
| Total nitrogen | 10.60mg/L | Wastewater Quality Standards for Discharge to Municipal Sewers (GB/T 31962-2015); | 13.1136124t | 15.071350t/a | None | |||||
| Total nickel | 0mg/L | Emission Standard of Pollutants for Electroplating (GB 21900-2008) | 0t | 0.000022t/a | None | |||||
| Wuhan Supor Cookware | Water pollutants | COD | Intermittent discharge, whose flow rate is neither stable nor regular, but it's not an impulsive discharge | 1 | Wastewater discharge port of the wastewater station in plant area | 13.87mg/L | Integrated Wastewater Discharge Standard (GB8978-1996) | 6.538t | 19.38t/a | None |
| Ammoniacal nitrogen | Intermittent discharge, whose flow rate is neither stable nor regular, but it's not an impulsive discharge | 0.47mg/L | Wastewater Quality Standards for Discharge to Municipal Sewers (GB/T 31962-2015); | 0.2145t | 1.94t/a | None | ||||
| Air pollutants | VOCs | Organized emission | Spray exhaust gas treatment discharge port | 8.57mg/m3 | Integrated Emission Standard of Air Pollutants (GB16297-1996) | 3.621t | 12.16t/a | None |
Note: According to the "Planning Environmental Assessment+Environmental Standards" inventory management reform pilot construction project environmentalimpact assessment document commitment record acceptance letter "(Hang Huan Binbei (2022) No. 56), Zhejiang household Appliance company annual VOCsallowable emissions of 3.641t/a.Treatment of pollutantsUnder special sewage treatment mechanism in the Company, all wastewater generated will gather at this station for central treatment. Afterchemical precipitation and autocatalyzed oxidation, wastewater will meet the first grade discharge standards and then be discharged into urbanwastewater pipes. At the same time, the Company has reclaimed water reuse facilities that can arrange water treatment plan according to waterquality. The production wastewater is first treated at the sewage treatment station and then disposed through the reclaimed water system forproduction. After that, part of the sanitary sewage after combined treatment enters municipal sewage network.
The Company collected different exhaust gases and used different treatment modes, and then discharged after reaching the standard. Thetreatment processes involved are as follows: water curtain, spray tower, dry filter, low-temperature plasma, cyclone and filter dust collector,activated carbon adsorption, UV photolysis purification, desorption and catalytic combustion and other combined treatments.The Company has established a reliable wastewater and exhaust gas treatment system, and ensures that the discharge and disposal of threewastes generated in the process of production and operation comply with relevant laws and regulations through regular inspection, supervisionand inspection mechanism and third-party inspection organizations. During the reporting period, if the Company does not exceed the standarddischarge, it will meet the relevant requirements of the competent department for ecological environment.Environmental monitoring schemeThe Company has formulated an annual environmental monitoring scheme in accordance with relevant national laws and regulations, andentrusted a qualified third party to carry out environmental monitoring.Environmental emergency planThe Company has completed the emergency plan for environmental emergencies and conducted regular emergency drills.Environmental governance and protection input and payment of environmental protection taxDuring the reporting period, the Company's total investment in environmental governance and protection was RMB 21,419,500, includingRMB 60,400 of environmental protection tax.Measures and effects taken to reduce carbon emissions during the reporting period
□ Applicable ? Not applicable
Administrative penalties for environmental problems during the reporting periodNoneOther environmental information that shall be made publicNoneOther environmental protection related informationNone
II. Social Responsibilities
For details, please refer to the 2022 Environmental, Social and Governance Report released by the Company.III. Consolidate and Expand the Achievement of Poverty Alleviation and the Implementation of RuralRevitalizationDuring the reporting period, the Company actively supported the national policy of rural revitalization and common prosperity, proposed thenew public welfare proposition of "sharing a better life with each child" according to the new vision and mission of the Company, and gave fullplay to its advantages in industry and resource, complied with the 2022 Labor Curriculum Standards of Compulsory Education issued by theMinistry of Education. The Company supported urban and rural schools to promote literacy education, supported rural primary schools to furtherdevelop into "schools suitable for the life of rural children". We cooperated with families and schools to jointly cultivate children of the new erawho are future-oriented, love life and care for family.In 2022, the Company continued to operate the "Supor Primary School" project and invested more in the life function of the rural school. TheSupor Primary School in Yuanzhuang, Junxian, Henan Province, for which the Company donated RMB 2 million to support post-disasterreconstruction, was put into use in September 2022. The new school is equipped with more spacious classrooms and function rooms, dormitoriesand canteens, which can meet the needs of more than 300 rural students in study and life. Moreover, the Supor Primary School in Delong, HongheCounty, Yunnan Province, which was completed in 2021, was put into use in September 2022. The school not only has classrooms, dormitories
and canteens, but also has a new football field for teachers and students to do physical exercise. The Company has donated desks, bed frames,canteen equipment and dining tables to the newly built school, and teachers and students can start learning and living better.
At present, there are 28 rural schools donated by Supor in central and western China. Wherein, 14 Supor primary schools have introducedonline live-streaming art and foreign language courses of U-Lai public welfare, so that rural students can also enjoy top-quality education.Moreover, the Company also engaged in public welfare through its own products. Through the online art classes, the Company invited ruralchildren to participate in the design of children's cups, carefully printed their pictures on the product packaging, and presented them as gifts tomore than 3,000 rural children in 17 Supor primary schools in rural areas on Children's Day.To comply with the requirements of the labor education in primary and secondary schools issued by Ministry of Education, the Companylaunched a new public welfare project "Supor - Future Elegant Living" in 2022, giving full play to its industrial advantages to support theimprovement of urban and rural school literacy education. At present, the Company has established cooperative relations with urban schools suchas Hangzhou Wentao Primary School, Chunhui Primary School, Qianjiang Foreign Language Experimental School, Primary Section of TianyuanCollege, Shaoxing Keling Primary School to support these schools in building life education space, carrying out labor classes, and building schoolsfeaturing life literacy education. The Company also donated products to support 10 rural boarding schools in Jinyun County, Lishui City to carryout campus life festival, and supported two of them, Changkeng Primary School and Heyang Primary School, to build life education space.Supor employees also took an active part in public welfare. They participated in board listing and tree-planting activities of "Huakailing -Supor Staff Public Welfare Practice Base", participated in the campus life festival in Jinyun rural boarding schools, and sent letters and gifts to thechildren in the disaster areas in Henan Province to give them warmth and encouragement.With the promotion of rural revitalization strategy, in the future, the Company will strictly observe the national policies and give full play tothe advantages of Supor's business capabilities and resources on the public platform of Supor, actively promote various charity programs andactivities in terms of literacy education for children in rural villages and broadening their horizons, and work with more like-minded charitypartners to contribute to a better life and better society in rural areas.
| Indicator | Measurement unit | Quantity/fulfillment |
| Rural revitalization and common prosperity | -- | —— |
Including: Investment amounts for funding poor students
| Including: Investment amounts for funding poor students | RMB 10,000 | |
| Number of benefited rural students | Person | 6,600 |
| Amount invested to improve the education resources in rural areas | RMB 10,000 | 293 |
| Awards received (content, grade) | -- | —— |
| Outstanding Social Responsibility Report Award of the Fifth Social Responsibility Conference |
SECTION VI SIGNIFICANT EVENTSI. Fulfillment of Commitments
1. Commitments that were fulfilled during the reporting period and had not been fulfilled till the end of reportingperiod by actual controller, shareholder, related party, acquirer and other commitment parties of the Company
□ Applicable ? Not applicable
There were no commitments that were fulfilled during the reporting period and had not been fulfilled till the end of reporting period by actualcontroller, shareholder, related party, acquirer and other commitment parties of the Company
2. Where assets or projects of the Company are expected to make profit, and the expected profiting period is duringthe reporting period, the Company hereby explains p
□ Applicable ? Not applicable
II. Occupied Non-business Capital of Listed Company for Controlling Shareholders and Related Parties
□ Applicable ? Not applicable
There was no non-operating occupation of capital of listed companies by controlling shareholders and their related parties of the Company duringthe reporting period.III. Illegal External Guarantee
□ Applicable ? Not applicable
There was no illegal external guarantee of the Company during the reporting period.
IV. Explanation on the Board of Directors on the Latest "Non-standard Audit Report"
□ Applicable ? Not applicable
V. Explanation on the Board of Directors, the Board of Supervisors and Independent Directors (If Any)on the "Non-standard Audit Report" during the Reporting Period
□ Applicable ? Not applicable
VI. Representation of Changes in Accounting Policies and Accounting Estimates or Correction ofImportant Accounting Errors, Compared with the Financial Statements of the Previous Year
□ Applicable ? Not applicable
During the reporting period, there was no change in accounting policies, accounting estimates or correction of important accounting errors.
VII. Information on Change of the Scope of Consolidated Statement Compared with the Previous Year'sFinancial Statements
□ Applicable ? Not applicable
There was no change in the scope of consolidated statements during the reporting period.
VIII. Employment and Disengagement of Certified Public Accountants
Certified public accountants engaged at the moment
| Name of the Chinese Certified Public Accountants | KPMG Huazhen LLP (Special General Partnership) |
| Reward for domestic certified public accountants (RMB 10,000) | 250.00 |
| Service years of audit for the Company | 2 |
| Names of CPAs from domestic certified public accountants | Huang Feng, Jin Yang |
| Service years of audit of the CPAs | Huang Feng (two years), Jin Yang (two years) |
Intension of changing certified public accountants
□ Yes ? No
Employment of internal control counting firm, financial consultant or sponsor? Applicable □ Not applicableSame accounting firm for internal control auditIX. Delisting after Disclosure of Annual Report
□ Applicable ? Not applicable
X. Bankruptcy or Reorganization
□ Applicable ? Not applicable
There was no bankruptcy, reorganization or related matters in the Company during the reporting period.
XI. Important Matters of Lawsuit and Arbitration
□ Applicable ? Not applicable
There was no significant litigation and arbitration occurred during the reporting period.XII. Punishment and Rectification
□ Applicable ? Not applicable
There was no punishment and rectification during the reporting period.XIII. Integrity of the Company, Its Controlling Shareholders and Actual Controllers
□ Applicable ? Not applicable
XIV. Major Related Transactions
1. Related transaction related to daily business
? Applicable □ Not applicable
| Related party | Correlated relation | Type of related transaction | Contents of related transaction | Pricing principle of related transaction | Price of related transaction | Amount of related transaction (RMB 10,000) | Percentage to amount of same transaction | Approved transaction limit (RMB 10,000) | Exceeding approved limit or not | Means of payments of related transaction | Market price of available same transaction | Date of disclosure | Reference for disclosure |
| Wuhan Anzai Cookware Co., Ltd. | Associated enterprise | Purchase of commodity | Finished products | Contract price | - | 6,117.83 | 0.49% | No | Bank transfer or notes | 0 | |||
| Wuhan Anzai Cookware Co., Ltd. | Associated enterprise | Purchase of commodity | Accessories | Market price | - | 15,087.43 | 1.21% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 706.38 | 0.06% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 7.38 | 0.00% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 325.53 | 0.03% | No | Bank transfer or notes | 0 | |||
| LAGOSTINA S.P.A. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 219.49 | 0.02% | No | Bank transfer or notes | 0 | |||
| TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 766.00 | 0.06% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB THAILAND | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 44.51 | 0.00% | No | Bank transfer or notes | 0 | |||
| SEB ASIA LTD. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 46.23 | 0.00% | No | Bank transfer or notes | 0 | |||
| Heshan Demei Tableware Co., Ltd. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 31.27 | 0.00% | No | Bank transfer or notes | 0 | |||
| WMF GROUPE GMBH | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 2,642.33 | 0.21% | No | Bank transfer or notes | 0 | |||
| Emsa Taicang Co., Ltd. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 23.50 | 0.00% | No | Bank transfer or notes | 0 | |||
| WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 3.77 | 0.00% | No | Bank transfer or notes | 0 | |||
| SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 2.93 | 0.00% | No | Bank transfer or notes | 0 | |||
| SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 61.28 | 0.00% | No | Bank transfer or notes | 0 | |||
| ETHERA | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 31.79 | 0.00% | No | Bank transfer or notes | 0 | |||
| Supor Group | Company controlled by related natural person | Purchase of commodity | Finished products | Market price | - | 1.61 | 0.00% | No | Bank transfer or notes | 0 | |||
| SEB ASIA LTD. | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 453,503.55 | 22.48% | No | Bank transfer or notes | 0 | |||
| SEB ASIA LTD. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 316.34 | 0.02% | No | Bank transfer or notes | 0 | |||
| S.A.S. SEB | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,369.02 | 0.07% | No | Bank transfer or notes | 0 |
| with the controlling shareholder | |||||||||||||
| S.A.S. SEB | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 67.34 | 0.00% | No | Bank transfer or notes | 0 | |||
| TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Finished products | Contract price | - | 706.99 | 0.04% | No | Bank transfer or notes | 0 | |||
| TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 1,366.65 | 0.07% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,852.51 | 0.09% | No | Bank transfer or notes | 0 | |||
| Supor Group | Company controlled by related natural person | Sale of commodities | Finished products | Market price | - | 442.42 | 0.02% | No | Bank transfer or notes | 0 | |||
| SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 1,648.49 | 0.08% | No | Bank transfer or notes | 0 | |||
| LAGOSTINA S.P.A. | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 4.93 | 0.00% | No | Bank transfer or notes | 0 | |||
| LAGOSTINA S.P.A. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 123.36 | 0.01% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB CANADA | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,416.43 | 0.07% | No | Bank transfer or notes | 0 | |||
| IMUSA USA LLC | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,628.53 | 0.08% | No | Bank transfer or notes | 0 | |||
| IMUSA USA LLC | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 3.32 | 0.00% | No | Bank transfer or notes | 0 | |||
| WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 35.11 | 0.00% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 2,448.11 | 0.12% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 1.12 | 0.00% | No | Bank transfer or notes | 0 | |||
| GROUPE SEB ANDEAN S.A. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 351.35 | 0.02% | No | Bank transfer or notes | 0 | |||
| Wuhan Anzai Cookware Co., Ltd. | Associated enterprise | Sale of commodities | Accessories | Contract price | - | 4.22 | 0.00% | No | Bank transfer or notes | 0 | |||
| Total | -- | -- | 493,409.05 | -- | -- | -- | -- | -- | -- | -- | |||
| Details of large sales return | Not applicable | ||||||||||||
| Actual implementation of estimated total amount of related transaction by category incurred during the period in the reporting period (if any) | In 2022, the annual daily related transaction amount between the Company and SEB as well as its related parties was estimated to be RMB 7,654,288,862.22 and the actual daily related transaction amount was RMB 4,717,555,418.48, decreasing by RMB 2,936,733,443.74. (References can be made to No.2022-014 Announcement on Estimated Annual Daily Related Transactions of 2022 disclosed on http://www.cninfo.com.cn on April 1, 2022. | ||||||||||||
| Reason for the big difference between transacted price and market reference price (if applicable) | Not applicable | ||||||||||||
2. Related transactions from purchase and sales for assets or equity
□ Applicable ? Not applicable
There were no related transactions from purchase and sales for assets or equity during the reporting period.
3. Related transaction for co-investment abroad
□ Applicable ? Not applicable
There was no related transaction involving joint external investment during the reporting period.
4. Connected creditor's rights and debts
□ Applicable ? Not applicable
There were no related creditor's rights and debts during the reporting period
5. Dealings with associated financial companies
□ Applicable ? Not applicable
There was no deposit, loan, credit or other financial business between the Company and associated financial companies and their related parties.
6. Dealings between the financial companies controlled by the Company and their related parties
□ Applicable ? Not applicable
There was no deposit, loan, credit or other financial business between the Company and holding financial companies and their related parties.
7. Other important Related transactions
□ Applicable ? Not applicable
There were no significant related transactions during the reporting period.XV. Significant Contracts and Performance
1. Custody, contracting, and leasing
(1) Custody
□ Applicable ? Not applicable
No custody was made during the reporting period.
(2) Contracting
□ Applicable ? Not applicable
No contracting was made during the reporting period.
(3) Leasing
? Applicable □ Not applicableCircumstances of leasing
Please refer to 15 "Right-of-use assets" and 26 "lease obligation" in section X "FINANCIAL STATEMENT" VII "Notes to items of consolidatedfinancial statements".The profit and loss brought to the company reaches more than 10% of the total profit of the company during the reporting period.
□ Applicable ? Not applicable
During the reporting period, there are no leasing items that bring profits and losses of the Company to more than 10% of the total profits of theCompany during the reporting period.
2. Major guarantee
? Applicable □ Not applicable
Unit: RMB 10,000
| External guarantee of the Company and its subsidiaries (excluding the guarantee to subsidiaries) | ||||||||||
| Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
| Supor's distributors who meet certain conditions | January 22, 2021 | 80,000.00 | July 2021-December 2021 | 38,324.72 | General guarantee | Cash | Yes | July 2021 - June 2022 | Yes | No |
| Supor's distributors who meet certain conditions | December 14, 2021 | 140,000.00 | January 2022-June 2022 | 32,108.55 | General guarantee | Cash | Yes | January 2022 - December 2022 | Yes | No |
| Supor's distributors who meet certain conditions | December 14, 2021 | 140,000.00 | July 2022-August 2022 | 12,638.78 | General guarantee | Cash | Yes | July 2022 - February 2023 | No | No |
| Supor's distributors who meet certain conditions | August 31, 2022 | 140,000.00 | September 2022-December 2022 | 26,907.20 | General guarantee | Cash | Yes | September 2022 - June 2023 | No | No |
| Total external guaranteed amount approved during the reporting period (A1) | 140,000.00 | Total actual amount of external guarantee during the reporting period (A2) | 109,979.24 | |||||||
| Total external guaranteed amount approved at the end of the reporting period (A3) | 220,000.00 | Total actual external guarantee balance at the end of the reporting period (A4) | 30,174.38 | |||||||
| Guarantee of the Company to subsidiaries | ||||||||||
| Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2021 | 200,000.00 | July 2021-August 2021 | 26,600.00 | General guarantee | None | None | July 2021 - February 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2021 | 200,000.00 | January 2022-April 2022 | 24,081.50 | General guarantee | None | None | January 2022 - October 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | May 2022-June 2022 | 41,570.00 | General guarantee | None | None | May 2022 - December 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | July 2022-December 2022 | 67,550.55 | General guarantee | None | None | July 2022 - June 2023 | No | No |
| Wuhan Supor Cookware Co., Ltd. | April 1, 2022 | 20,000.00 | September 2022-December 2022 | 3,315.00 | General guarantee | None | None | September 2022 - June 2023 | No | No |
| Approved total guaranteed amount towards the subsidiaries during the reporting period (B1) | 400,000.00 | Total actual amount of guarantee to subsidiaries during the reporting period (B2) | 163,117.05 | |||||||
| Total guaranteed amounts to subsidiaries approved at the end of the reporting period (B3) | 600,000.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 70,865.55 | |||||||
| Guarantee of the subsidiaries to subsidiaries | ||||||||||
| Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2021 | 200,000.00 | July 2021-October 2021 | 8,417.50 | General guarantee | None | None | July 2021 - April 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2021 | 200,000.00 | January 2022 | 33,667.00 | General guarantee | None | None | January 2022 - July 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | June 2022 | 5,323.50 | General guarantee | None | None | June 2022 - December 2022 | Yes | No |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | July 2022-December 2022 | 11,900.00 | General guarantee | None | None | July 2022 - June 2023 | No | No |
| Approved total guaranteed amount towards the subsidiaries during the reporting period (C1) | 0 | Total actual amount of guarantee to subsidiaries during the reporting period (C2) | 59,308.00 | |||||||
| Total guaranteed amounts to subsidiaries approved at the end of the reporting period (C3) | 0 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | 11,900.00 | |||||||
| Total guaranteed amount of the Company (namely the total of the first three items) | ||||||||||
| Total approved guaranteed amount during the reporting period (A1+B1+C1) | 540,000.00 | Total guaranteed actual amount during the reporting period (A2+B2+C2) | 332,404.29 | |||||||
| Total approved guaranteed amount at the end of the | 820,000.00 | Total actual guarantee balance at the end of the | 112,939.93 | |||||||
| reporting period (A3+B3+C3) | reporting period (A4+B4+C4) | |||
| Proportion of the total amount of actual guarantee (i.e. A4+B4+C4) to the net assets of the Company | 16.05% | |||
| Including: | ||||
| Total guaranteed amount towards shareholders, actual controllers and related parties (D) | 0 | |||
| Balance of debt guarantee directly or indirectly provided to the guaranteed object with an asset-liability ratio exceeding 70% (E) | 87,315.97 | |||
| Amount of the total guarantee exceeding 50% of the net assets (F) | 0 | |||
| Total amount of the above three guarantees (D+E+F) | 87,315.97 | |||
| Description of the guarantee liability occurred during the reporting period or there is evidence that it is possible to bear joint and several liability for settlement for the unexpired guarantee contract (if any) | None | |||
| Descriptions for external guarantee provided against the established procedures (if any) | None | |||
Note: The 12
thSession of the Seventh Board of Directors and the Annual General Meeting of Shareholders for 2021 Fiscal Year of the Companyreviewed and adopted the Proposal on Guarantee for Wholly-owned Subsidiaries and Mutual Guarantee among Wholly-owned Subsidiaries, andagreed that the Company and its wholly-owned subsidiaries would provide guarantees up to RMB 4 billion for the wholly-owned subsidiaries inthe year of 2022. Among them, the guaranteed amount for companies with 70% (inclusive) asset-liability ratio or over is RMB 3 billion, and RMB1 billion for companies with a asset-liability ratio below 70%.Specific description for using the composite guarantee situation
3. Entrusting others for cash asset management
(1) Entrustment for financial management
? Applicable □ Not applicableOverview of entrusted financing during the reporting period
Unit: RMB 10,000
| Specific type | Source of fund for entrusted financing | Amount incurred of entrusted financing | Undue balance | Overdue amount unclaimed | The amount of impairment accrued from overdue financial investment products |
| Bank financial products | Self-owned capital | 43,000.00 | 43,000.00 | 0 | 0 |
| Total | 43,000.00 | 43,000.00 | 0 | 0 | |
The short-term financial products purchased by the Company in 2022 can be found in the Announcement of Short-term Investment Using ExcessiveCash (Announcement No.2022-015 and 2022-048) and the Announcement of Progress of Using Excessive Cash to Purchase Financial Products(Announcement No.2022-024, 2022-041 and 2023-006) on http://www.cninfo.com.cn.Specific situation of high-risk entrusted finance with significant single amount, low security and poor liquidity
□ Applicable ? Not applicable
Circumstances in which principal of entrusted financing may not be recovered or which may result in decrease in value:
□ Applicable ? Not applicable
(2) Entrustment for loan
□ Applicable ? Not applicable
No entrustment for loan was made during the reporting period.
4. Other significant contracts
□ Applicable ? Not applicable
There were no other significant contracts involved in the Company during the reporting period.
XVI. Explanation on Other Important Matters
□ Applicable ? Not applicable
The Company has no other important matters to be explained during the reporting period.
XVII. Important Matters of Subsidiaries
□ Applicable ? Not applicable
SECTION VII CHANGES IN SHARE CAPITAL AND PARTICULARS
ABOUT SHAREHOLDERSI. Changes of shares
1. Changes of shares
Unit: share
| Before change | Increase/decrease in the period (+, -) | After change | |||||||
| Share number | Proportion | New shares | Shares bonus | Converted capital | Others | Subtotal | Share number | Proportion | |
| I. Restricted shares | 848,564 | 0.10% | 2,261,509 | 2,261,509 | 3,110,073 | 0.38% | |||
| 1. Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 2. Stated-owned legal person shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 3. Other domestic shareholdings | 848,564 | 0.10% | 2,261,509 | 2,261,509 | 3,110,073 | 0.38% | |||
| Including: Shares held by domestic legal entities | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Shares held by domestic natural persons | 848,564 | 0.10% | 2,261,509 | 2,261,509 | 3,110,073 | 0.38% | |||
| 4. Shares held by foreign capitals | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Including: Shares held by foreign legal entities | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Shares held by foreign natural persons | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| II. Non-restricted Shares | 807,829,912 | 99.90% | -2,285,509 | -2,285,509 | 805,544,403 | 99.62% | |||
| 1. Common shares in RMB | 807,829,912 | 99.90% | -2,285,509 | -2,285,509 | 805,544,403 | 99.62% | |||
| 2. Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 4. Others | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| III. Sum of Shares | 808,678,476 | 100.00% | -24,000 | -24,000 | 808,654,476 | 100.00% | |||
Reasons for the change of shares? Applicable □ Not applicable
1. Top management of the Company unlocked 25% of the shares registered under their names on the last transaction date of the previous year.
2. As of the Company's 2021 Restricted Stock Incentive Plan, 1,209,500 shares of restricted stocks were transferred to 293 incentive objects onJanuary 27, 2022.
3. On June 29, 2022, totally 24,000 shares of restricted stock that have been granted to resigned incentive objects but have not been unlocked fromrestriction in 2021 restricted stock incentive plan were repurchased and cancelled. Upon the repurchase and cancellation, the Company's total sharecapital decreased from 808,678,476 to 808,654,476 shares.
4. As of the Company's 2022 Restricted Stock Incentive Plan, 1,253,500 shares of restricted stocks were transferred to 288 incentive objects onNovember 10, 2022. In addition, a total of 79,000 restricted shares of the posponed portion of the 2022 Restricted Stock Incentive Plan weretransferred to two incentive objects on February 24, 2023.Approval of change in stock? Applicable □ Not applicable
1. The Company held the 11
th
Session of the Seventh Board of Directors and the 10
th
Session of the Seventh Board of Supervisors on January 6,2022, which deliberated and approved the Proposal on Grant of Restricted Stock to Incentive Objects, and agreed to grant 1,209,500 restrictedshares to 293 incentive objects on January 6, 2022. After confirmed by Shenzhen Branch of China Securities Depository and Clearing CorporationLimited, the restricted stocks of the Company's 2021 Restricted Stock Incentive Plan were transferred and registered to incentive objects on January27, 2022.
2. On March 31, 2022, the 12
th
Session of the Seventh Board of Directors and the 11
thSession of the Seventh Board of Supervisors deliberatedand approved Proposal on Repurchasing and Canceling a Part of Restricted Stock. For disqualification of six incentive objects due to theirresignation, the Company has decided to repurchase and cancel 24,000 shares of Restricted Stock at the price of RMB 1 per share. The Proposalon Repurchasing and Canceling a Part of Restricted Stock has been adopted by the Annual General Meeting of Shareholders for 2021 Fiscal Yearheld on April 25, 2022. The Company has repurchased and canceled 24,000 shares of Restricted Stock at the price of RMB 1 per share and paidtotally RMB 24,000 to the above incentive objects. After confirmed by Shenzhen Branch of China Securities Depository and Clearing CorporationLimited, the Company completed repurchase and cancellation on June 29, 2022.
3. On August 30, 2022, the 14
th
Session of the Seventh Board of Directors and the 13
thSession of the Seventh Board of Supervisors deliberatedand approved Proposal on Repurchasing and Canceling a Part of Restricted Stock. For disqualification of thirteen incentive objects due to theirresignation, the Company has decided to repurchase and cancel 53,000 shares of Restricted Stock at the price of RMB 1 per share. The cancellationof repurchase can only be implemented after the deliberation and approval by the General Meeting of Shareholders in the Company.
4. The Company held the 15
th Session of the Seventh Board of Directors and the 14
th
Session of the Seventh Board of Supervisors on October 12,2022, which deliberated and approved the Proposal on Grant of Restricted Stock to Incentive Objects, and agreed to grant 1,253,500 restrictedshares to 288 incentive objects on October 12, 2022. At the same time, the Company postponed the grant of 79,000 shares to two incentive objects.On January 31, 2023, the 18
th
Session of the Seventh Board of Directors and the 17
th
Session of the Seventh Board of Supervisors held, whichdeliberated and approved the Proposal on Grant of Postponed Portion of Restricted Stock to Incentive Objects. The grant date of the postponedportion was February 1, 2023. After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, therestricted stocks of the Company's 2022 Restricted Stock Incentive Plan was transferred to 288 incentive objects on November 10, 2022, and thepostponed portion was transferred to 2 incentive objects on February 24, 2023.Transfer of shares changed? Applicable □ Not applicable
1. After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, 1,209,500 restricted stocks of theCompany's 2021 Restricted Stock Incentive Plan were transferred and registered to 293 incentive objects on January 27, 2022.
2. After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, 1,253,500 restricted stocks of theCompany's 2022 Restricted Stock Incentive Plan was transferred to 288 incentive objects on November 10, 2022, and the suspended grant partwas transferred to 2 incentive objects on February 24, 2023.Influence of shares change on basic earnings per share and diluted earnings per share in latest year and period, net assets per share owned by theCompany's ordinary shareholder and other financial indexes.? Applicable □ Not applicable
Since tiny influence on basic earnings per share and diluted earnings per share, the 24,000 restricted stocks repurchased and cancelled in thisperiod generate no effect on other financial indicators (e.g net assets per share belonging to the Company's common stockholder).The other contents the company thinks fit to disclose or the securities regulatory authority requires to disclose
□ Applicable ? Not applicable
2. Changes of restricted shares
? Applicable □ Not applicable
Unit: share
| Name | Restricted outstanding stocks at the beginning of the year | Restricted outstanding stocks increased in current period | Restricted outstanding stocks released in current period | Restricted outstanding stocks at the end of the year | Restriction reason | Date of unlocking restriction |
| Su Xianze | 486,136 | 0 | 121,534 | 364,602 | Locked stocks of top management | Unlocked 25% of the shares registered under their names on the last transaction date of the previous year. |
| Xu Bo | 173,737 | 43,434 | 130,303 | Locked stocks of top management | Unlocked 25% of the shares registered under their names on the last transaction date of the previous year. | |
| Ye Jide | 52,191 | 13,048 | 39,143 | Locked stocks of top management | Top management of the Company unlocked 25% of the shares registered under their names on the last transaction date of the previous year. | |
| Su Ming-Jui | 136,500 | 750 | 225 | 137,025 | Executive lock-up stocks (unlock after departure) | Before November 19, 2023, 25% of the total shares can be lifted each year, and all shares held will be lifted after November 19, 2023. |
| Incentive objects of 2021 Equity Incentive Plan | 0 | 1,209,500 | 24,000 | 1,185,500 | 24,000 shares of restricted stocks were repurchased and cancelled in consideration that parts of resigned incentive objects. | As of the Company's 2021 Restricted Stock Incentive Plan, 1,209,500 shares of restricted stocks were transferred to 293 incentive objects on January 27, 2022. The above restricted stocks will be unlocked in two phases after 24 months from the grant date, with the unlocking proportion of each phase being 50%. The first phase is expected to start on January 27, 2024. The second phase is expected to start on January 27, 2025. |
| Incentive objects of 2022 Equity Incentive Plan | 0 | 1,253,500 | 0 | 1,253,500 | Equity incentive restricted shares | As of the Company's 2022 Restricted Stock Incentive Plan, 1,253,500 shares of restricted stocks were transferred to 288 incentive objects on November 10, 2022. The above restricted stocks will be unlocked in two phases after 24 months from the grant date, with the unlocking proportion of each phase being 50%. The first phase is expected to start on November 10, 2024. The second phase is expected to start on November 10, 2025. |
| Total | 848,564 | 2,463,750 | 202,241 | 3,110,073 | -- | -- |
II. Security Offering and Listing Information
1. Security offering (excluding preferred share) during the reporting period
□ Applicable ? Not applicable
2. Total shares of the Company, change of shareholder structure, and changes of the Company's assets and liabilitiesstructure? Applicable □ Not applicableDuring the reporting period, totally 24,000 shares of restricted stock that have been granted to resigned incentive objects but have not beenunlocked from restriction in 2021 restricted stock incentive plan were repurchased and cancelled. Upon the repurchase and cancellation, theCompany's total share capital decreased from 808,678,476 to 808,654,476 shares.
3. Staff shares
□ Applicable ? Not applicable
III. Shareholders and the Actual Controller
1. Number of shareholders of the Company and share-holding conditions
Unit: share
| Total number of common shareholders at the end of the reporting period | 14,971 | Number of common shareholders at the end of last month before the disclosure date of the annual report | 12,838 | Total number of preferred shareholder whose voting right is recovered at the end of reporting period (if any) (refer to Note 8) | 0 | Total number of preferred shareholders with restored voting right at the end of last month before the disclosure date of the annual report (if any) (see Note 8) | 0 | |
| Information on shareholders holding more than 5% shares or information on top 10 shareholders | ||||||||
| Name | Nature | Shareholding ratio | Number of shares held at the end of the reporting period | Increase/decrease during the reporting period | Number of restricted shares | Number of non-restricted shares | Pledge, marking or freezing | |
| Status of share | Share number | |||||||
| SEB INTERNATIONALE S.A.S | Foreign legal entity | 82.44% | 666,681,904 | 0 | 0 | 666,681,904 | ||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal entity | 9.09% | 73,481,463 | 9,013,079 | 0 | 73,481,463 | ||
| Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds | Others | 1.19% | 9,601,559 | 9,026,907 | 0 | 9,601,559 | ||
| Fidelity Mutual Fund & Investment Management - Clients' Capital | Foreign legal entity | 0.42% | 3,357,132 | -437,590 | 0 | 3,357,132 | ||
| China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds | Others | 0.37% | 2,970,113 | 2,670,413 | 0 | 2,970,113 | ||
| Industrial Bank-Xingquan Trend Investment Complex Securities Investment Funds | Others | 0.27% | 2,199,856 | 2,199,856 | 0 | 2,199,856 | ||
| BNP Paribas-Own Funds | Foreign legal entity | 0.27% | 2,149,370 | -2,392,611 | 0 | 2,149,370 | ||
| Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds | Others | 0.24% | 1,903,427 | 1,903,427 | 0 | 1,903,427 | ||
| BARCLAYS BANK PLC | Foreign legal entity | 0.17% | 1,371,200 | 1,273,928 | 0 | 1,371,200 | ||
| Yongan Guofu Asset Management-Yongan Guofu- | Others | 0.11% | 874,295 | 874,295 | 0 | 874,295 | ||
| Yongfu No. 19 Complex Investment Privite Funds | |||||
| Strategic investor or general corporate investor who becomes top 10 shareholder as a result of rights issue (if any) (see Note 3) | None | ||||
| Explanation on the above-mentioned shareholder relationships or concerted actions | Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds, China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds and Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds belong to Zhongtai Fund. It is unknown whether other shareholders are associated with each other, and whether they are persons acting in concert as stipulated in the Measures for the Administration of the Acquisition of Listed Companies. | ||||
| Explanation on the above shareholders on entrusting/entrusted voting rights and abstaining from voting rights | None | ||||
| Special instructions on the existence of repurchase special accounts of the top 10 shareholders (if any) (see Note 10) | At the end of the reporting period, the Company held a total of 2,071,569 shares in the Company’s special stock repurchase account | ||||
| Shareholdings of top 10 shareholders holding non-restricted shares | |||||
| Name | Number of non-restricted outstanding shares held at the end of the reporting period | Type of share | |||
| Type of share | Share number | ||||
| SEB INTERNATIONALE S.A.S | 666,681,904 | RMB common shares | 666,681,904 | ||
| Hong Kong Securities Clearing Company Ltd. | 73,481,463 | RMB common shares | 73,481,463 | ||
| Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds | 9,601,559 | RMB common shares | 9,601,559 | ||
| Fidelity Mutual Fund & Investment Management - Clients' Capital | 3,357,132 | RMB common shares | 3,357,132 | ||
| China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds | 2,970,113 | RMB common shares | 2,970,113 | ||
| Industrial Bank-Xingquan Trend Investment Complex Securities Investment Funds | 2,199,856 | RMB common shares | 2,199,856 | ||
| BNP Paribas-Own Funds | 2,149,370 | RMB common shares | 2,149,370 | ||
| Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds | 1,903,427 | RMB common shares | 1,903,427 | ||
| BARCLAYS BANK PLC | 1,371,200 | RMB common shares | 1,371,200 | ||
| Yongan Guofu Asset Management-Yongan Guofu-Yongfu No. 19 Complex Investment Privite Funds | 874,295 | RMB common shares | 874,295 | ||
| Explanation on connected relationship or concerted parties among the top 10 shareholders holding non-restricted outstanding shares, and between the top 10 shareholders holding non-restricted outstanding shares and top 10 shareholders | Same as above | ||||
| Information on top 10 common shareholders involved in securities margin trading business (if any) (see Note 4) | None | ||||
Did the top 10 common shareholders and the top 10 common shareholders holding non-restricted shares conduct the agreed repurchase transactionduring the reporting period?
□ Yes ? No
The top 10 common shareholders and the top 10 common shareholders holding non-restricted shares did not conduct the agreed repurchasetransaction during the reporting period.
2. Controlling shareholder
Property of controlling shareholder: foreign-controlled shareholdingType of controlling shareholder: legal entity
| Name of controlling shareholder | Legal representative/person in | Date of establishment | Organization code | Main business |
| charge | ||||
| SEB INTERNATIONALE S.A.S | Thierry de LA TOUR D'ARTAISE | December 26, 1978 | None | Financial participation for all kinds of French and overseas enterprises, i.e., purchasing and subscribing stock, bond, share and interests, securities and negotiable securities, transfer of such securities, participation in all financial activities related to the aforesaid financial participation, purchasing, manufacturing and sales of all kinds of household devices for the purpose of marketing and involvement in related service; all activities for helping realize the Company's operation either directly or indirectly, particularly the activities in personal estate, real estate, finance, commerce and industrial field. |
| Shareholding of other overseas listed companies by the Company's controlling shareholder during the reporting period | None | |||
Change of controlling shareholder during the reporting period
□ Applicable ? Not applicable
No change of controlling shareholder occurred during the reporting period.
3. Actual controller and persons acting in concert
Nature of actual controller: other foreign organizationType of actual controller: legal entity
| Name of the actual controller | Legal representative/person in charge | Date of establishment | Organization code | Main business |
| SEB S.A. | Thierry de LA TOUR D'ARTAISE | December 28, 1973 | None | Holding or equity participation and management for various enterprises |
| Holding of other overseas listed companies by the Company's actual controller during the reporting period | None | |||
Change of actual controller during the reporting period
□ Applicable ? Not applicable
No change of actual controller occurred during the reporting period.Property right and controlling relationship diagram between the Company and the actual controller
Actual controller controlling the Company by trust or other assets management types
□ Applicable ? Not applicable
4. The number of shares accumulatively pledged by the controlling shareholder or first majority shareholder of theCompany and its persons acting in concert account for 80% of the total number of shares held by it or them.
□ Applicable ? Not applicable
5. Other corporate shareholders holding more than 10% shares
□ Applicable ? Not applicable
6. Share restriction reduction of commitment subjects such as controlling shareholder, actual controller and therestructuring party
□ Applicable ? Not applicable
IV. Specific Implementation of Share Repurchase during the Reporting Period
Progress in the implementation of share repurchase? Applicable □ Not applicable
| Plan disclosure time | Number of shares to be repurchased (shares) | Proportion to total share capital | Proposed amount of repurchase (RMB 10,000) | Proposed repurchase period | Repurchase purpose | Number of shares already repurchased (shares) | The proportion of the number of shares repurchased to the underlying shares involved in the equity incentive plan (if any) |
| April 1, 2022 | 8,086,785 shares - 16,173,570 shares | 1%-2% | RMB 44,299.41 - RMB 88,598.82 | Expired on April 24, 2023 | Write-off and decrease of the registered capital and the implementation of equity incentives | 3,325,069 | 100.00% |
Progress in the reduction of shareholding of repurchased shares through auction
□ Applicable ? Not applicable
SECTION VIII INFORMATION ON PREFERRED SHARE
□ Applicable ? Not applicable
No preferred share existed during the reporting period.
SECTION IX BONDS
□ Applicable ? Not applicable
SECTION X FINANCIAL STATEMENT
I. Audit Report
| Type of audit opinion | Standard opinions with no reservation |
| Date of signature of audit report | March 29, 2023 |
| Name of audit organization | KPMG Huazhen LLP (Special General Partnership) |
| Audit report document No. | KPMG Huazhen Shenzi No. 2303560 |
| Names of CPAs | Huang Feng, Jin Yang |
Main Text of Audit ReportAll shareholders of Zhejiang Supor Co., Ltd.,
I. Audit OpinionsWe audited the attached financial statements of Zhejiang Supor Co., Ltd (hereinafter referred to as "Supor"), including the consolidated andparent company balance sheet as of December 31, 2022, and the consolidated and parent company income statement, consolidated and parentcompany cash flow statement, consolidated and parent company statement of changes in shareholders' equities and notes to relevant financialstatements in 2022.We think that the attached financial statements have been prepared in accordance with the provisions of the Accounting Standards for BusinessEnterprises issued by the Ministry of Finance of the People's Republic of China (hereinafter referred to as "Accounting Standards for BusinessEnterprises") in all major aspects, and fairly reflect Supor's consolidated and parent company financial condition as of December 31, 2022, as wellas the consolidated and parent company operating results and cash flows in 2022.II. Basis of Forming Audit OpinionsWe implemented our audit work strictly according to the stipulations of Auditing Standard for Chinese Certified Public Accountants (hereinafterreferred to as "Auditing Standard"). The content of "Responsibility of CPA for financial statement audit" in the Audit Report further describes ourresponsibility under these standards. According to the Codes of Professional Ethics for Certified Public Accountants in China, we are independentof Supor, and we have fulfilled the other responsibilities on the aspects of professional ethics. We believe the audit evidences acquired by us aresufficient and appropriate, and provide a basis for expressing our audit opinions.III. Key Audit MattersThe key audit items are from our professional judgment; from our perspective, the key audit items are most important to the financial statementaudit in the current period. The key audit items will be audited under the background that the financial statement will be wholly audited to formaudit opinions; we do not express independent opinions on these items. We confirm that the following items are key audit items to be discussed inthe audit report.Revenue recognition
| Please refer to the accounting policies described in Note 26 to "V. Important Accounting Policies and Estimates" and Note 35 to "VII. Notes to items of consolidated financial statements" (Notes to the financial statements) | |
| Key audit items | Countermeasures |
| Supor and its subsidiaries (hereinafter referred to as "Supor") are mainly engaged in the R&D, production and distribution of kitchen utensils, stainless steel products, daily hardware, small domestic appliances and cookware; its products are cookware and small domestic appliances. In 2022, Supor's operating income reached RMB 20,170,527,516.66, of which domestic sales revenue was RMB 14,975,644,970.69 and export sales revenue was RMB 5,194,882,545.97. Supor recognizes the revenue when the control right of relevant commodity is transferred to the customer. Supor assesses the contract and business arrangement of the customer, and recognizes the commodity sales revenue after such commodity has left Supor's own warehouse or its specified warehouse, or such commodity has been delivered to the customer with the acceptance receipt issued, or such commodity has been delivered on board to the sea transport carrier with the customs declaration for export and bill of lading obtained. As revenue is a KPI, and Supor has announced the Restricted Stock Incentive Plan in 2021 and 2022 with performance appraisal target as a premise for lifting the sales limitation, there is the risk that the management manipulates the revenue for realizing the performance target. Therefore, we include the conformation and recognition of Supor's revenue as key auditing items. | The audit procedures related to revenue recognition include the following: ? Understand and evaluate the design and operation effectiveness of key internal control related to the revenue recognition made by the management; ? Select sales contracts, check major terms governing the transfer of commodity control right, and review if the accounting policies for Supor revenue recognition is in conformity with the requirements in Accounting Standards for Business Enterprises; Check if there are abnormal trading terms and conditions that indicate potential undisclosed relations or transactions with related parties; ? Use data analysis tools on Supor's transaction information to identify those with abnormal revenues and check if there are any potential undisclosed relations or major transactions with related parties; ? Select major third-party customers and use enterprise information query tool on their background information to identify if they have any relation with Supor; ? Select transactions of which the revenues are recorded in the year, and refer to supporting documents such as the orders, invoices, packing lists, receipts of acceptance, customs clearances for export and bills of lading to check if the recognition of corresponding revenues is done according to Supor accounting policies for revenue recognition; ? Based on audit sampling, carry out the external confirmation procedure for the balance of accounts receivable of relevant customers on the balance sheet date and the amount of sales transactions in the current year; ? Select transactions of which the revenue is accrued around the balance sheet date, and refer to supporting documents such as the delivery notices, bills of lading or receipts of the goods to check if the revenue is included in the right accounting period; ? Check whether there are sales returns following the balance sheet date, and check the relevant supporting documents (if any) for significant sales returns, so as to evaluate whether the revenue is recorded in the appropriate accounting period; and ? Select revenue-related entries in the current year that meet specific risk criteria, inquire the management about the reasons for making these entries, and review relevant supporting documents. |
IV. Other InformationThe management of Supor is responsible for other information. Other information includes the information covered by the 2022 Supor AnnualReport, but excludes the financial statement and our audit report.Our audit opinions on financial statement do not cover other information, and we do not express any authentication conclusions on otherinformation.
Integrated with our audit on financial statement, our responsibility is to read other information. In this process, we consider whether the otherinformation is significantly different from the information we will acquire from our audit or whether the other information has significant error.Based on the work we have already executed, if we confirm the other information has significant error, we should report the fact. On thisaspect, we do not need to report any items.V. Responsibilities of Management and Governance on Financial StatementThe management of Supor (hereinafter referred to as the "management") is responsible for preparing financial statement according to thestipulations of Accounting Standards for Business Enterprises to enable fair presentation, and designing, executing and maintaining the requiredinternal control to keep the financial statement free of material misstatement caused by fraudulent practice or error.
When preparing the financial statement, the management is responsible for evaluating the continuing operation ability of Supor, disclosingthe items related to continuing operation (if any), and using going-concern assumption. Unless otherwise that Supor plans to liquidate, terminatesits operation or has no other realistic choice.The governance is responsible for supervising the financial statement process of Supor.VI. Responsibility of CPA for Financial Statement Audit
Our objective is to acquire rational guarantee for keeping the financial statement free of material misstatement caused by fraudulent practiceor error and providing the audit report containing audit opinions. The rational guarantee is a high-level guarantee, but it cannot guarantee that amaterials misstatement can be found if it exists when we audit according to the auditing standard. The misstatement may be caused by fraudulentpractice or error. If a single or summarized rational expectation on misstatement may cause certain influence when financial statement user makeseconomic decision in accordance with the financial statement, the misstatement will be deemed as "significant".
In the process of our audit according to the auditing standards, we used our professional judgment and retained our professional skepticism.Meanwhile, we executed the following work:
1) Identify and evaluate material misstatement risk of financial statement caused by fraudulent practice or error, design and implement auditprocedures to cope with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. A fraudulentpractice may involve in collusion, counterfeit, deliberate omission, false statement or may be above the internal control, so the risk that materialmisstatement caused by fraudulent practice may not be found is higher than the risk that material misstatement caused by error may not be found.
2) Learn internal control related to the audit for the purpose of designing proper audit procedures.
3) Evaluate the appropriateness of the accounting policy selected by management and the rationality of the accounting estimate and relateddisclosure made by the management.
4) Make conclusion for the appropriateness of the going-concern assumption used by management. Meanwhile, make conclusions for theone whether there is significant uncertainty in the issue or item which may result in substantive doubt on the continuing operation ability of Suporin accordance with the acquired audit evidences. If our conclusion thinks that there is significant uncertainty, the auditing standard requires us toremind financial statement user in our audit report of paying attention to the related disclosure in the financial statement. If the disclosure is notsufficient, we should present modified audit report. Our conclusion is based on the information that is available by the audit report date. Howeverfuture issue or circumstance may result in uncontinuing operation to Supor.
5) Evaluate the overall presentation (including disclosure), structure and contents of financial statement, and evaluate whether financialstatement presents related transactions and items fairly.
6) Acquire sufficient and appropriate audit evidences for financial information of entity activity or business activity of Supor, and expressopinions on audit financial statement. We are responsible for guiding, supervising and executing the audit of the Group, and bear full responsibilityfor audit opinions.
We communicated audit scope, time schedule and significant audit finding and other issues with governance, including the internal controldefect that is worthy of noting in the audit process.
We have provided a declaration to the governance that we have abided by the professional ethics requirements related to independency, andhave communicated with the governance all relationships and other issues those are thought to affect our independency, as well as the relatedprecautionary measures (if applicable).
In the issue we communicated with the governance, we determined which issues are most important to the financial statement audit in thecurrent period, so which constitutes the key audit items. We described these items in our audit report, unless otherwise these items are prohibitedto openly disclose by law and regulation, or under few circumstances, if according to an rational expectation, when negative consequence ofcommunicating an issue in the audit report may exceed its benefit on the aspect of public benefit, we confirm that we will not communicate theissue in our audit report.
KPMG Huazhen LLP (Special General Partnership) Chinese CPA:
(Project partner): ________________
Huang Feng
Beijing, China Chinese CPA: ________________
Jin Yang
Date: March 29, 2023
II. Financial StatementsUnit of statement in notes to financial statement: RMB
1. Consolidated balance sheet
Compiled by: Zhejiang Supor Co., Ltd.
December 31, 2022
Unit: RMB
| Item | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 3,563,140,907.75 | 2,654,052,417.47 |
| Settlement reserve | ||
| Loans to other banks | ||
| Transactional financial assets | 431,382,527.79 | 180,312,742.31 |
| Derivative financial assets | ||
| Notes receivable | 27,325,952.95 | 54,879,357.24 |
| Accounts receivable | 1,926,518,118.38 | 2,716,945,985.33 |
| Receivables financing | 235,957,044.34 | 3,312,225.62 |
| Advance payment | 339,609,547.02 | 385,367,862.85 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve receivable | ||
| Other receivables | 16,373,697.26 | 12,159,756.67 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Reverse-REPO financial assets | ||
| Inventories | 2,494,922,856.42 | 3,096,517,055.33 |
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 32,157,534.25 | |
| Other current assets | 450,986,016.76 | 2,055,027,382.63 |
| Total current assets | 9,518,374,202.92 | 11,158,574,785.45 |
| Non-current assets: | ||
| Loans and advances granted | ||
| Debt investment | ||
| Other debt investment | 1,024,794,890.43 | 298,191,205.49 |
| Long-term receivables |
| Long-term equity investment | 62,196,139.53 | 65,600,611.64 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 1,303,075,391.03 | 1,291,902,992.54 |
| Construction in progress | 12,005,654.73 | 26,482,779.31 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 190,718,962.82 | 195,528,644.13 |
| Intangible assets | 440,017,733.16 | 452,200,863.39 |
| Development expenditures | ||
| Goodwill | ||
| Long-term unamortized expenses | ||
| Deferred income tax assets | 401,472,928.85 | 410,974,540.21 |
| Other non-current assets | ||
| Total non-current assets | 3,434,281,700.55 | 2,740,881,636.71 |
| Total assets | 12,952,655,903.47 | 13,899,456,422.16 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Central bank loan | ||
| Loans from other banks | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 1,057,611,900.00 | 500,250,000.00 |
| Accounts payable | 2,635,521,548.19 | 3,769,700,826.50 |
| Advance receipt | ||
| Contract liabilities | 1,153,932,879.53 | 893,741,863.21 |
| Proceeds from sale of repurchase financial assets | ||
| Deposit taken and interbank deposit | ||
| Proceeds from security transaction agency | ||
| Proceeds from security underwriting agency | ||
| Employee remuneration payable | 289,075,428.50 | 321,692,953.88 |
| Taxes payable | 204,608,713.27 | 254,094,791.55 |
| Other payables | 137,729,222.63 | 110,605,272.21 |
| Including: interest payable | ||
| Dividend payable |
| Handling fee and commission payable | ||
| Reinsurance accounts payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 41,924,940.24 | 29,191,343.78 |
| Other current liabilities | 194,699,612.98 | 189,810,383.37 |
| Total current liabilities | 5,715,104,245.34 | 6,069,087,434.50 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred share | ||
| Perpetual bond | ||
| Lease obligation | 150,779,916.58 | 157,420,210.81 |
| Long-term payables | ||
| Long-term employee remuneration payable | 1,441,111.55 | 1,903,631.69 |
| Estimated liabilities | 12,640,441.72 | 12,737,298.24 |
| Deferred incomes | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 164,861,469.85 | 172,061,140.74 |
| Total liabilities | 5,879,965,715.19 | 6,241,148,575.24 |
| Owners' equities: | ||
| Share capital | 808,654,476.00 | 808,678,476.00 |
| Other equity instruments | ||
| Including: Preferred share | ||
| Perpetual bond | ||
| Capital reserves | 125,368,989.44 | 122,970,340.27 |
| Minus: treasury share | 99,724,823.49 | 76,159,897.25 |
| Other comprehensive incomes | -20,454,823.26 | -41,522,541.60 |
| Special reserve | ||
| Surplus reserve | 356,924,811.32 | 356,924,811.32 |
| General risk reserve | ||
| Undistributed profit | 5,865,316,233.53 | 6,451,748,564.12 |
| Total owners' equities belonging to parent company | 7,036,084,863.54 | 7,622,639,752.86 |
| Minority shareholders' equities | 36,605,324.74 | 35,668,094.06 |
| Total owners' equities | 7,072,690,188.28 | 7,658,307,846.92 |
| Total liabilities and owners' equities | 12,952,655,903.47 | 13,899,456,422.16 |
Legal representative: Thierry de LA TOUR D'ARTAISE Person in charge of accounting: Xu Bo Person in charge of accounting department:
Xu Bo
2. Balance sheet of parent company
Unit: RMB
| Item | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 1,484,137,518.26 | 800,923,960.55 |
| Transactional financial assets | 200,131,817.00 | 100,147,324.89 |
| Derivative financial assets | ||
| Notes receivable | 1,342,003.33 | 2,997,000.00 |
| Accounts receivable | 374,598,742.75 | 742,333,802.03 |
| Receivables financing | 4,800,000.00 | |
| Advance payment | 46,224,404.38 | 63,620,742.54 |
| Other receivables | 1,174,381,191.82 | 1,845,295,351.20 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Inventories | 164,679,339.53 | 240,622,374.15 |
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 32,157,534.25 | |
| Other current assets | 388,309,086.23 | 1,889,046,917.63 |
| Total current assets | 3,870,761,637.55 | 5,684,987,472.99 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | 201,645,863.02 | 194,975,863.02 |
| Long-term receivables | ||
| Long-term equity investment | 2,826,017,955.55 | 3,013,961,596.02 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 155,241,036.13 | 151,228,257.41 |
| Construction in progress | 12,559,947.93 | |
| Productive biological assets | ||
| Oil and gas assets |
| Right-of-use assets | 3,752,480.47 | 3,363,931.38 |
| Intangible assets | 80,034,692.59 | 83,723,923.89 |
| Development expenditures | ||
| Goodwill | ||
| Long-term unamortized expenses | ||
| Deferred income tax assets | 15,974,025.22 | 14,878,870.52 |
| Other non-current assets | ||
| Total non-current assets | 3,282,666,052.98 | 3,474,692,390.17 |
| Total assets | 7,153,427,690.53 | 9,159,679,863.16 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 15,650,000.00 | |
| Accounts payable | 193,807,274.54 | 193,367,234.90 |
| Advance receipt | ||
| Contract liabilities | 2,796,093.48 | 1,510,782.40 |
| Employee remuneration payable | 41,689,539.05 | 56,501,055.35 |
| Taxes payable | 23,453,381.53 | 31,587,253.36 |
| Other payables | 1,224,151,285.03 | 2,355,630,738.97 |
| Including: interest payable | ||
| Dividend payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 227,345.02 | 289,557.95 |
| Other current liabilities | 1,447,611.99 | 3,038,481.86 |
| Total current liabilities | 1,503,222,530.64 | 2,641,925,104.79 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred share | ||
| Perpetual bond | ||
| Lease obligation | 2,859,701.28 | 2,494,235.39 |
| Long-term payables | ||
| Long-term employee remuneration payable | 166,125.04 | 193,670.03 |
| Estimated liabilities | ||
| Deferred incomes |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 3,025,826.32 | 2,687,905.42 |
| Total liabilities | 1,506,248,356.96 | 2,644,613,010.21 |
| Owners' equities: | ||
| Share capital | 808,654,476.00 | 808,678,476.00 |
| Other equity instruments | ||
| Including: Preferred share | ||
| Perpetual bond | ||
| Capital reserves | 202,697,741.40 | 236,901,053.81 |
| Minus: treasury share | 99,724,823.49 | 76,159,897.25 |
| Other comprehensive incomes | ||
| Special reserve | ||
| Surplus reserve | 404,339,238.00 | 404,339,238.00 |
| Undistributed profit | 4,331,212,701.66 | 5,141,307,982.39 |
| Total owners' equities | 5,647,179,333.57 | 6,515,066,852.95 |
| Total liabilities and owners' equities | 7,153,427,690.53 | 9,159,679,863.16 |
3. Consolidated profit statement
Unit: RMB
| Item | 2022 | 2021 |
| I. Total Operating Incomes | 20,170,527,516.66 | 21,585,331,407.47 |
| Including: Operating income | 20,170,527,516.66 | 21,585,331,407.47 |
| Interest revenues | ||
| Premium earned | ||
| Revenue from handling fees and commission | ||
| II. Total Operating Costs | 17,949,216,147.97 | 19,469,391,130.25 |
| Including: Operating cost | 14,969,328,840.57 | 16,621,613,160.80 |
| Interest expense | ||
| Expense of handling fees and commission | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net amount of withdrawn reserve fund for insured liability | ||
| Policy dividend expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 130,693,539.41 | 93,417,055.89 |
| Sales expenses | 2,156,297,058.63 | 1,909,953,095.54 |
| Administrative expenses | 374,060,640.28 | 400,779,608.67 |
| R&D expenses | 416,259,356.99 | 450,110,510.51 |
| Financial expenses | -97,423,287.91 | -6,482,301.16 |
| Including: interest expenses | 9,278,948.78 | 10,076,904.44 |
| Interest revenues | 76,571,126.41 | 32,337,493.71 |
| Plus: other incomes | 236,694,812.34 | 202,864,580.37 |
| Investment income ("-" for loss) | 54,047,027.80 | 90,885,851.42 |
| Including: investment income on associated enterprise and joint venture | -3,262,848.85 | 1,378,149.04 |
| Income from derecognition of financial assets measured by amortized cost | ||
| Exchange gain ("-" for loss) | ||
| Net exposure hedging gains ("-" for loss) | ||
| Gains from changes in fair value ("-" for loss) | 1,382,527.79 | 312,742.31 |
| Credit impairment loss ("-" for loss) | 34,519,315.22 | -10,395,445.48 |
| Asset impairment loss ("-" for loss) | -11,352,717.26 | -14,390,694.58 |
| Assets disposal income ("-" for loss) | -1,363,504.85 | -105,379.68 |
| III. Operating Profit ("-" for Loss) | 2,535,238,829.73 | 2,385,111,931.58 |
| Plus: non-operating income | 14,435,126.69 | 13,899,290.93 |
| Minus: non-operating expense | 4,464,352.44 | 13,229,643.55 |
| IV. Total Profit ("-" for Total Loss) | 2,545,209,603.98 | 2,385,781,578.96 |
| Minus: income tax expenses | 479,033,164.36 | 444,410,051.07 |
| V. Net Profit ("-" for Net Loss) | 2,066,176,439.62 | 1,941,371,527.89 |
| (I) By business continuity | ||
| 1. Net profit under continuing operation ("-" for net loss) | 2,066,176,439.62 | 1,941,371,527.89 |
| 2. Net profit under discontinuing operation ("-" for net loss) | ||
| (II) By ownership | ||
| 1. Net profit belonging to the shareholders of parent company | 2,067,659,526.97 | 1,943,943,608.94 |
| 2. Minority shareholders' profit and loss | -1,483,087.35 | -2,572,081.05 |
| VI. After-tax Net Amount of Other Comprehensive Income | 20,857,374.53 | -2,741,304.66 |
| After-tax net amount of other comprehensive income belonging to the owners of parent company | 21,067,718.34 | -2,490,709.03 |
| (I) Other comprehensive incomes that cannot be reclassified into profit and loss | ||
| 1. Remeasured amount of changes in defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
| 3. Changes in the fair value of other equity instrument investments |
| 4. Changes in the fair value of the Company's own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive incomes that can be reclassified into profit and loss | 21,067,718.34 | -2,490,709.03 |
| 1. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Credit impairment provision for other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Conversion difference in foreign currency financial statement | 21,067,718.34 | -2,490,709.03 |
| 7. Others | ||
| After-tax net amount of other comprehensive income belonging to minority shareholder | -210,343.81 | -250,595.63 |
| VII. Total Comprehensive Incomes | 2,087,033,814.15 | 1,938,630,223.23 |
| Total comprehensive income attributed to owners of parent company | 2,088,727,245.31 | 1,941,452,899.91 |
| Total comprehensive income attributed to minority shareholders | -1,693,431.16 | -2,822,676.68 |
| VIII. Earnings per Share | ||
| (I) Basic earnings per share (EPS) | 2.565 | 2.400 |
| (II) Diluted earnings per share (EPS) | 2.564 | 2.395 |
If the enterprise under the same control is merged, the net profit realized by the merged party before merger was RMB 0, and the net profitrealized by the merged party during the prior period was RMB 0.Legal representative: Thierry de LA TOUR D'ARTAISE Person in charge of accounting: Xu Bo Person in charge of accounting department:
Xu Bo
4. Profit statement of the parent company
Unit: RMB
| Item | 2022 | 2021 |
| I. Operating Incomes | 2,364,560,278.23 | 2,828,495,059.23 |
| Minus: Operating cost | 1,989,102,797.37 | 2,460,726,672.24 |
| Taxes and surcharges | 13,935,411.50 | 8,125,567.64 |
| Sales expenses | 39,335,409.39 | 28,094,636.49 |
| Administrative expenses | 127,077,263.72 | 126,191,995.70 |
| R&D expenses | 20,695,875.79 | 41,388,785.70 |
| Financial expenses | -58,101,403.25 | 21,771,525.71 |
| Including: interest expenses | 11,941,995.43 | 44,798,990.86 |
| Interest revenues | 56,076,101.26 | 28,257,409.42 |
| Plus: other incomes | 24,058,763.78 | 17,976,444.49 |
| Investment income ("-" for loss) | 1,596,577,717.17 | 5,184,243,462.90 |
| Including: investment income on associated enterprise and joint venture | -3,262,848.85 | 1,378,149.04 |
| Income from derecognition of financial assets measured by amortized cost ("-" for loss) | ||
| Net exposure hedging gains ("-" for loss) | ||
| Gains from changes in fair value ("-" for loss) | 131,817.00 | 147,324.89 |
| Credit impairment loss ("-" for loss) | 16,808,778.58 | -8,640,871.69 |
| Asset impairment loss ("-" for loss) | -715,941.15 | -784,245.11 |
| Assets disposal income ("-" for loss) | -40,662.89 | -134,581.34 |
| II. Operating profit ("-" for loss) | 1,869,335,396.20 | 5,335,003,409.89 |
| Plus: Non-operating income | 484,196.66 | 4,477,220.31 |
| Minus: Non-operating expense | 2,766,054.34 | 2,731,331.51 |
| III. Total profit ("-" for total loss) | 1,867,053,538.52 | 5,336,749,298.69 |
| Minus: Income tax expenses | 59,409,208.43 | 45,546,634.81 |
| IV. Net profit ("-" for net loss) | 1,807,644,330.09 | 5,291,202,663.88 |
| (I) Net profit under continuing operation ("-" for net loss) | 1,807,644,330.09 | 5,291,202,663.88 |
| (II) Net profit under discontinuing operation ("-" for net loss) | ||
| V. After-tax Net Amount of Other Comprehensive Income | ||
| (I) Other comprehensive incomes that cannot be reclassified into profit and loss | ||
| 1. Remeasured amount of changes in defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
| 3. Changes in the fair value of other equity instrument investments | ||
| 4. Changes in the fair value of the Company's own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive incomes that can be reclassified into profit and loss | ||
| 1. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Credit impairment provision for other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Conversion difference in foreign currency financial statement | ||
| 7. Others | ||
| VI. Total Comprehensive Incomes | 1,807,644,330.09 | 5,291,202,663.88 |
| VII. Earnings per Share | ||
| (I) Basic earnings per share (EPS) | ||
| (II) Diluted earnings per share (EPS) |
5. Consolidated cash flow statement:
Unit: RMB
| Item | 2022 | 2021 |
| I. Cash Flows from Operating Activities | ||
| Cash received from sales of commodities or rendering of services | 23,163,412,847.57 | 23,182,241,217.47 |
| Net increase of customer deposit and interbank deposit | ||
| Net increase of central bank loans | ||
| Net increase of loans from other financial institutions | ||
| Cash received from original insurance contract premium | ||
| Net cash received from reinsurance | ||
| Net increase of policy-holder deposit and investment | ||
| Cash receipts from interest, handling fees and commission | ||
| Net increase of loans from others | ||
| Net increment of repurchase capital | ||
| Net cash from security transaction agency | ||
| Tax refund received | 403,826,573.61 | 610,822,240.47 |
| Other cash receipts related to operating activities | 296,671,425.19 | 229,899,647.29 |
| Subtotal of cash inflows from operating activities | 23,863,910,846.37 | 24,022,963,105.23 |
| Cash payments for purchasing commodities and receiving services | 15,899,889,917.07 | 17,850,456,959.80 |
| Net increment of customer loans and advances | ||
| Net increase of central bank deposit and interbank deposit | ||
| Cash payment for insurance indemnities of original insurance contracts | ||
| Net increase of loans to other banks | ||
| Cash for interest, handling fees and commission | ||
| Cash payment of policy dividend | ||
| Cash paid to and for employees | 1,782,670,318.64 | 1,899,260,747.79 |
| Taxes paid | 1,115,969,533.28 | 890,602,697.79 |
| Other cash expenses related to operating activities | 1,905,425,831.54 | 1,332,761,131.16 |
| Subtotal of cash outflows from operating activities | 20,703,955,600.53 | 21,973,081,536.54 |
| Net cash flows from operating activities | 3,159,955,245.84 | 2,049,881,568.69 |
| II. Net Cash Flows from Investing Activities | ||
| Cash received from return of investments | ||
| Cash received from investment income | 182,101,198.03 | 25,768,911.57 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 5,578,762.74 | 3,145,603.32 |
| Net cash receipts from disposal of subsidiaries and other business units |
| Other cash receipts related to investing activities | 3,103,136,438.00 | 1,571,003,018.00 |
| Subtotal of cash inflows from investing activities | 3,290,816,398.77 | 1,599,917,532.89 |
| Net cash paid for the construction of fixed assets, intangible assets and other long-term assets | 165,432,733.39 | 228,405,541.27 |
| Cash paid for investment | ||
| Net increase of pledge loans | ||
| Net cash paid for acquiring subsidiaries and other business units | ||
| Other cash payments related to investing activities | 3,597,439,490.93 | 1,032,059,354.70 |
| Subtotal of cash outflows from investing activities | 3,762,872,224.32 | 1,260,464,895.97 |
| Net cash flows from investing activities | -472,055,825.55 | 339,452,636.92 |
| III. Net Cash Flows from Financing Activities | ||
| Cash from absorbing investments | 2,630,661.84 | 2,706,689.63 |
| Including: cash received by subsidiaries from minority shareholder investment | 2,630,661.84 | 2,706,689.63 |
| Cash received from obtaining borrowings | 6,000,990.92 | 3,602,000.00 |
| Other cash receipts related to financing activities | 2,463,000.00 | |
| Subtotal of cash inflows from financing activities | 11,094,652.76 | 6,308,689.63 |
| Cash paid for debt repayment | 3,596,000.00 | |
| Cash paid for distribution of dividends or profits or for payment of interest | 2,567,723,592.43 | 1,048,679,452.16 |
| Including: dividends or profits paid by subsidiaries to minority shareholders | ||
| Other cash payments related to financing activities | 208,900,848.04 | 547,940,133.09 |
| Subtotal of cash outflows from financing activities | 2,776,624,440.47 | 1,600,215,585.25 |
| Net cash flows from financing activities | -2,765,529,787.71 | -1,593,906,895.62 |
| IV. Impact of Exchange Rate Changes on Cash and Cash Equivalents | 29,831,440.74 | -7,481,549.97 |
| V. Net Increase in Cash and Cash Equivalents | -47,798,926.68 | 787,945,760.02 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 2,443,731,679.06 | 1,655,785,919.04 |
| VI. Balance of Cash and Cash Equivalents at the End of the Period | 2,395,932,752.38 | 2,443,731,679.06 |
6. Cash flow statement of parent company
Unit: RMB
| Item | 2022 | 2021 |
| I. Cash Flows from Operating Activities | ||
| Cash received from sales of commodities or rendering of services | 2,813,612,098.09 | 2,642,279,158.98 |
| Tax refund received | 192,478,449.00? | 238,420,004.81 |
| Other cash receipts related to operating activities | 49,326,684.43? | 26,558,582.66 |
| Subtotal of cash inflows from operating activities | 3,055,417,231.52? | 2,907,257,746.45 |
| Cash payments for purchasing commodities and receiving services | 1,997,873,868.31? | 2,789,379,560.55 |
| Cash paid to and for employees | 179,500,705.78? | 215,892,811.34 |
| Taxes paid | 82,083,795.20? | 46,877,046.87 |
| Other cash expenses related to operating activities | 77,325,691.14 | 75,608,725.87 |
| Subtotal of cash outflows from operating activities | 2,336,784,060.43? | 3,127,758,144.63 |
| Net cash flows from operating activities | 718,633,171.09? | -220,500,398.18 |
| II. Net Cash Flows from Investing Activities | ||
| Cash received from return of investments | ||
| Cash received from investment income | 1,787,538,717.80? | 6,041,421,134.66 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 863,939.72? | 1,056,865.14 |
| Net cash receipts from disposal of subsidiaries and other business units | 149,634,690.89? | |
| Other cash receipts related to investing activities | 2,281,025,218.38? | 583,973,207.66 |
| Subtotal of cash inflows from investing activities | 4,219,062,566.79? | 6,626,451,207.46 |
| Net cash paid for the construction of fixed assets, intangible assets and other long-term assets | 30,951,887.39? | 31,861,974.32 |
| Cash paid for investment | ||
| Net cash paid for acquiring subsidiaries and other business units | ||
| Other cash payments related to investing activities | 3,117,694,762.51? | 5,021,564,508.65 |
| Subtotal of cash outflows from investing activities | 3,148,646,649.90? | 5,053,426,482.97 |
| Net cash flows from investing activities | 1,070,415,916.89? | 1,573,024,724.49 |
| III. Net Cash Flows from Financing Activities | ||
| Cash from absorbing investments | ||
| Cash received from obtaining borrowings | ||
| Other cash receipts related to financing activities | 1,227,206,126.98? | 799,190,020.80 |
| Subtotal of cash inflows from financing activities | 1,227,206,126.98? | 799,190,020.80 |
| Cash paid for debt repayment | ||
| Cash paid for distribution of dividends or profits or for payment of interest | 2,580,043,028.70? | 1,096,173,877.15 |
| Other cash payments related to financing activities | 164,163,901.01? | 485,317,231.86 |
| Subtotal of cash outflows from financing activities | 2,744,206,929.71? | 1,581,491,109.01 |
| Net cash flows from financing activities | -1,517,000,802.73? | -782,301,088.21 |
| IV. Impact of Exchange Rate Changes on Cash and Cash Equivalents | 10,981,710.82? | -1,134,560.47 |
| V. Net Increase in Cash and Cash Equivalents | 283,029,996.07? | 569,088,677.63 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 800,923,960.55 | 231,835,282.92 |
| VI. Balance of Cash and Cash Equivalents at the End of the Period | 1,083,953,956.62? | 800,923,960.55 |
7. Statement of Changes in Consolidated Owners' Equities
Amount of this period
Unit: RMB
| Item | 2022 | ||||||||||||||
| Owners' equities belonging to parent company | Minority shareholders' equities | Total owners' equities | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| I. Closing Balance of Last Year | 808,678,476.00 | 122,970,340.27 | 76,159,897.25 | -41,522,541.60 | 356,924,811.32 | 6,451,748,564.12 | 7,622,639,752.86 | 35,668,094.06 | 7,658,307,846.92 | ||||||
| Plus: cumulative changes of accounting policies | |||||||||||||||
| Error correction of prior period | |||||||||||||||
| Enterprise merger under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening Balance of Current Year | 808,678,476.00 | 122,970,340.27 | 76,159,897.25 | -41,522,541.60 | 356,924,811.32 | 6,451,748,564.12 | 7,622,639,752.86 | 35,668,094.06 | 7,658,307,846.92 | ||||||
| III. Current Period Increase ("-" for Decrease) | -24,000.00 | 2,398,649.17 | 23,564,926.24 | 21,067,718.34 | -586,432,330.59 | -586,554,889.32 | 937,230.68 | -585,617,658.64 | |||||||
| (I) Total of comprehensive incomes | 21,067,718.34 | 2,067,659,526.97 | 2,088,727,245.31 | -1,693,431.16 | 2,087,033,814.15 | ||||||||||
| (II) Capital invested and reduced by the owner | -24,000.00 | 2,398,649.17 | -69,991,307.25 | -86,368,265.13 | -14,002,308.71 | 2,630,661.84 | -11,371,646.87 | ||||||||
| 1. Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by other equity instrument holders | |||||||||||||||
| 3. Amount of share-based payment included into owners' equities | -24,000.00 | 2,398,649.17 | -69,991,307.25 | -86,368,265.13 | -14,002,308.71 | -14,002,308.71 | |||||||||
| 4. Others | 2,630,661.84 | 2,630,661.84 | |||||||||||||
| (III) Profit distribution | -2,567,723,592.43 | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||||
| 1. Appropriation of surplus reserve | |||||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -2,567,723,592.43 | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over within owners' equities | |||||||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
| 3. Surplus reserve to cover losses | |||||||||||||||
| 4. Retained earnings after carrying over amount of changes in defined benefit plan | |||||||||||||||
| 5. Retained earnings after carrying over other comprehensive incomes | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Appropriation of current period | |||||||||||||||
| 2. Application of current period | |||||||||||||||
| (VI) Others | 93,556,233.49 | -93,556,233.49 | -93,556,233.49 | ||||||||||||
| IV. Closing Balance of Current Period | 808,654,476.00 | 125,368,989.44 | 99,724,823.49 | -20,454,823.26 | 356,924,811.32 | 5,865,316,233.53 | 7,036,084,863.54 | 36,605,324.74 | 7,072,690,188.28 |
Amount of last period
Unit: RMB
| Item | 2021 | ||||||||||||||
| Owners' equities belonging to parent company | Minority shareholders' equities | Total owners' equities | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| I. Closing Balance of Last Year | 821,083,860.00 | 226,859,041.81 | 412,206,786.34 | -39,031,832.57 | 401,648,181.64 | 6,202,587,444.38 | 7,200,939,908.92 | 35,784,081.11 | 7,236,723,990.03 | ||||||
| Plus: cumulative changes of accounting policies | |||||||||||||||
| Error correction of prior period | |||||||||||||||
| Enterprise merger under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening Balance of Current Year | 821,083,860.00 | 226,859,041.81 | 412,206,786.34 | -39,031,832.57 | 401,648,181.64 | 6,202,587,444.38 | 7,200,939,908.92 | 35,784,081.11 | 7,236,723,990.03 | ||||||
| III. Current Period Increase ("-" for Decrease) | -12,405,384.00 | -103,888,701.54 | -336,046,889.09 | -2,490,709.03 | -44,723,370.32 | 249,161,119.74 | 421,699,843.94 | -115,987.05 | 421,583,856.89 | ||||||
| (I) Total of comprehensive incomes | -2,490,709.03 | 1,943,943,608.94 | 1,941,452,899.91 | -2,822,676.68 | 1,938,630,223.23 | ||||||||||
| (II) Capital invested and reduced by the owner | -12,405,384.00 | -103,888,701.54 | -743,777,904.07 | -401,648,181.64 | -289,255,963.54 | -63,420,326.65 | 2,706,689.63 | -60,713,637.02 | |||||||
| 1. Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by other equity instrument holders | |||||||||||||||
| 3. Amount of share-based payment included into owners' equities | -26,000.00 | 11,110,370.60 | 74,504,697.25 | -63,420,326.65 | -63,420,326.65 | ||||||||||
| 4. Others | -12,379,384.00 | -114,999,072.14 | -818,282,601.32 | -401,648,181.64 | -289,255,963.54 | 2,706,689.63 | 2,706,689.63 | ||||||||
| (III) Profit distribution | 356,924,811.32 | -1,405,526,525.66 | -1,048,601,714.34 | -1,048,601,714.34 | |||||||||||
| 1. Appropriation of surplus reserve | 356,924,811.32 | -356,924,811.32 | |||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -1,048,601,714.34 | -1,048,601,714.34 | -1,048,601,714.34 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over within owners' equities | |||||||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
| 3. Surplus reserve to cover losses | |||||||||||||||
| 4. Retained earnings after carrying over amount of changes in defined benefit plan | |||||||||||||||
| 5. Retained earnings after carrying over other comprehensive incomes | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Appropriation of current period | |||||||||||||||
| 2. Application of current period | |||||||||||||||
| (VI) Others | 407,731,014.98 | -407,731,014.98 | -407,731,014.98 | ||||||||||||
| IV. Closing Balance of Current Period | 808,678,476.00 | 122,970,340.27 | 76,159,897.25 | -41,522,541.60 | 356,924,811.32 | 6,451,748,564.12 | 7,622,639,752.86 | 35,668,094.06 | 7,658,307,846.92 |
8. Statement of Changes in Owners' Equities of the Parent Company
Amount of this period
Unit: RMB
| Item | 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners' equities | |||
| Preferred share | Perpetual bond | Others | ||||||||||
| I. Closing Balance of Last Year | 808,678,476.00 | 236,901,053.81 | 76,159,897.25 | 404,339,238.00 | 5,141,307,982.39 | 6,515,066,852.95 | ||||||
| Plus: cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period | ||||||||||||
| Others | ||||||||||||
| II. Opening Balance of Current Year | 808,678,476.00 | 236,901,053.81 | 76,159,897.25 | 404,339,238.00 | 5,141,307,982.39 | 6,515,066,852.95 | ||||||
| III. Current Period Increase ("-" for Decrease) | -24,000.00 | -34,203,312.41 | 23,564,926.24 | -810,095,280.73 | -867,887,519.38 | |||||||
| (I) Total of comprehensive incomes | 1,807,644,330.09 | 1,807,644,330.09 | ||||||||||
| (II) Capital invested and reduced by the owner | -24,000.00 | -34,203,312.41 | -69,991,307.25 | -50,016,018.39 | -14,252,023.55 | |||||||
| 1. Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by other equity instrument holders | ||||||||||||
| 3. Amount of share-based payment included into owners' equities | -24,000.00 | -34,203,312.41 | -69,991,307.25 | -50,016,018.39 | -14,252,023.55 | |||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||
| 1. Appropriation of surplus reserve | ||||||||||||
| 2. Appropriation of profit to owners | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-over within owners' equities | ||||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | ||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | ||||||||||||
| 3. Surplus reserve to cover losses | ||||||||||||
| 4. Retained earnings after carrying over amount of changes in defined benefit plan | ||||||||||||
| 5. Retained earnings after carrying over other comprehensive incomes | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period | ||||||||||||
| (VI) Others | 93,556,233.49 | -93,556,233.49 | ||||||||||
| IV. Closing Balance of Current Period | 808,654,476.00 | 202,697,741.40 | 99,724,823.49 | 404,339,238.00 | 4,331,212,701.66 | 5,647,179,333.57 |
Amount of last period
Unit: RMB
| Item | 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners' equities | |||
| Preferred share | Perpetual bond | Others | ||||||||||
| I. Closing Balance of Last Year | 821,083,860.00 | 666,767,326.32 | 412,206,786.34 | 410,621,980.00 | 1,255,631,844.17 | 2,741,898,224.15 | ||||||
| Plus: cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period | ||||||||||||
| Others | ||||||||||||
| II. Opening Balance of Current Year | 821,083,860.00 | 666,767,326.32 | 412,206,786.34 | 410,621,980.00 | 1,255,631,844.17 | 2,741,898,224.15 | ||||||
| III. Current Period Increase ("-" for Decrease) | -12,405,384.00 | -429,866,272.51 | -336,046,889.09 | -6,282,742.00 | 3,885,676,138.22 | 3,773,168,628.80 | ||||||
| (I) Total of comprehensive incomes | 5,291,202,663.88 | 5,291,202,663.88 | ||||||||||
| (II) Capital invested and reduced by the owner | -12,405,384.00 | -429,866,272.51 | -743,777,904.07 | -363,207,553.32 | -61,701,305.76 | |||||||
| 1. Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by other equity instrument holders | ||||||||||||
| 3. Amount of share-based payment included into owners' equities | -26,000.00 | 12,829,391.49 | 74,504,697.25 | -61,701,305.76 | ||||||||
| 4. Others | -12,379,384.00 | -442,695,664.00 | -818,282,601.32 | -363,207,553.32 | ||||||||
| (III) Profit distribution | 356,924,811.32 | -1,405,526,525.66 | -1,048,601,714.34 | |||||||||
| 1. Appropriation of surplus reserve | 356,924,811.32 | -356,924,811.32 | ||||||||||
| 2. Appropriation of profit to owners | -1,048,601,714.34 | -1,048,601,714.34 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-over within owners' equities | ||||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | ||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | ||||||||||||
| 3. Surplus reserve to cover losses | ||||||||||||
| 4. Retained earnings after carrying over amount of changes in defined benefit plan | ||||||||||||
| 5. Retained earnings after carrying over other comprehensive incomes | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period | ||||||||||||
| (VI) Others | 407,731,014.98 | -407,731,014.98 | ||||||||||
| IV. Closing Balance of Current Period | 808,678,476.00 | 236,901,053.81 | 76,159,897.25 | 404,339,238.00 | 5,141,307,982.39 | 6,515,066,852.95 |
III. Company Profile
Zhejiang Supor Co., Ltd (hereinafter referred to as "the Company") is a limited liability company (by shares) transformed on an integral basisfrom Zhejiang Supor Cookware Co., Ltd under the approval of Leading Group for Enterprise Listing of the People's Government of ZhejiangProvince with No. ZSS [2000] 24 approval document. On November 10, 2000, the Company registered at Zhejiang Administration for Industryand Commerce. Registered address: Yuhuan City, Zhejiang Province; head office address: Hangzhou City, Zhejiang Province. The Company'sparent company is SEB INTERNATIONALE S.A.S whose final parent company is SEB S.A. The Company has a corporate business licensenumbered 913300007046976861.The company and its subsidiaries (hereinafter referred to as "Supor") are mainly engaged in the R&D, production and distribution of kitchenutensils, stainless steel products, daily hardware, small domestic appliances and cookware; its products are cookware and small domestic appliances.its products are cookware and small domestic appliances.The financial statement was released after the approval of the Company's Board of Directors on March 29, 2023.By December 31, 2022, there were altogether 20 subsidiaries included in the scope of consolidated financial statement. See Note 9 "Equityin Other Entities" for details. The merger scope of the Group in the year increases by 0 company, decreases by 1 company. See Note 8 "Changeon Merger Scope" for details.IV. Preparation Basis of the Financial Statements
1. Preparation basis
The financial statements of the Group are prepared based on the assumption of continuing operation and actual transactions and items and inaccordance with the Accounting Standard for Business Enterprises -- Basic Standard (Released CZBL No.33, Revised CZBL No.76) issued bythe Ministry of Finance of the People's Republic of China (hereinafter referred to as the "Ministry of Finance"), and 42 specific accountingstandards, guidelines for the application of accounting standards for business enterprises, interpretations to the accounting standards for businessenterprises and other provisions released and revised on and after February 15, 2006 (hereinafter referred to as accounting standards for businessenterprises) and the disclosure provisions of the Regulations of Corporate Information Disclosure and Preparation by Companies Publicly IssuingSecurities No.15 -- General Provisions on Financial Reporting (Revised in 2014) of the China Securities Regulatory Commission.
According to the relevant regulations of the accounting standards for business enterprises, the Group's accounting is made on accrual basis.Except for certain financial instruments, measurements in these financial statements are made on the basis of historical cost. If an asset is impaired,corresponding impairment provision will be made in accordance with relevant regulations.
2. Continuing operation
The Company has the ability to continue operations for at least 12 months since the end of the reporting period, and there are no major issuesaffecting the ability to continue operations.V. Important Accounting Policies and EstimatesPrompt for specific accounting policies and estimates:
The Group has made accounting policies and estimates as to method for accruing bad debt provision for receivables, method for calculatinginventory value and accruing depreciation provision, depreciation of fixed assets and amortization of intangible assets, recognition time point ofincome and other transactions and items based on the actual production and operation features and the provisions of related accounting standardsfor business enterprises. See 9 "Financial instruments", 12 "Inventory" (3), 16 "Fixed assets" (2), 19 "Intangible assets" (1), 26 "Revenue" of Note5 for details.
1. Abidance of the statement of Accounting Standards for Business Enterprises
The financial statement conforms to the requirements of Accounting Standards for Business Enterprises and has reflected relevant informationsuch as the financial conditions on December 31, 2022, operating results and cash flow in 2022 of the Company and the Group on an authenticand intact basis. In addition, the financial statements of the Company and the Group conform to the disclosure requirements of the Regulations ofCorporate Information Disclosure and Preparation by Companies Publicly Issuing Securities No 15 - General Provisions on Financial Reportingrevised by the China Securities Regulatory Commission in 2014 and related financial statements and their notes.
2. Accounting period
The accounting period of the Group is divided into annual period and interim period; an interim period refers to a reporting period which isshorter than a whole fiscal year. The Group takes calendar year as the fiscal year, i.e., from January 1 to December 31.
3. Operating cycle
The normal operating cycle means the period from the time when the Group purchases the assets used for processing to the time of realizingcash or cash equivalents. The Group takes 12 months as an operating cycle and uses it as a standard for classifying the liquidity of assets andliabilities.
4. Recording currency
RMB is used in the main economic environment in which the Company and its domestic subsidiaries operate and the Company and itsdomestic subsidiaries use RMB as the recording currency. Recording currency for foreign subsidiaries of the Company is determined as VND,SGD and IDR separately based on the currency in main economic environment in which they operate. The Group uses RMB as the recordingcurrency to prepare the financial statement.
5. Accounting treatment method for the enterprise merger under and not under the same control
Enterprise merger refers to the transaction or events of two or more separate enterprises combing into a reporting entity. Enterprise merger isdivided into the enterprise merger under the same control and enterprise merger not under the same control.
For transactions not under the same control, the purchasing party will consider whether to choose the simplified judgment method of"concentration test" when judging whether the acquired asset portfolio constitutes a business. If the portfolio passes the concentration test, it isjudged that it does not constitute a business. Otherwise, it shall still be judged in line with business conditions.
When the Group acquires a group of assets or net assets that do not constitute a business, the purchase cost shall be allocated on the basis ofthe relative fair value of the identifiable assets and liabilities acquired on the purchase date, and shall not be treated as per the following accountingtreatment methods for enterprise merger.
(1) Enterprise merger under the same control
If enterprises involved with merger are under the final control of the same party or same multiple parties before and after merger, and for anon-temporary period, then it belongs to an enterprise merger under the same control. For enterprise merger under the same control, the partywhich has obtained the control rights for other combining enterprises on the merger date will be considered as the merging party, and other
participating enterprise is the merged party. The merger date refers to the day when the merging party actually obtains the control rights of themerged party.The assets and liabilities obtained by the merging party shall be measured on the basis of book value of the merged party on the merger date.As to the difference between the book value of net assets acquired by merging party and the book value of merger consideration paid by it (or totalamount of the face value of shares issued), the capital reserve (share capital premium) shall be adjusted correspondingly; the retained earnings willbe adjusted as long as capital reserve (share capital premium) is insufficient to be offset.The merging party's direct expenses incurred from enterprise merger shall be included into the current profits and losses at the time ofoccurrence.
(2) Enterprise merger not under the same control
If enterprises involved with merger are not under the final control of the same party or same multiple parties before and after merger, then itbelongs to an enterprise merger not under the same control. For enterprise merger not under the same control, the party which has obtained thecontrol rights for other combining enterprises on the purchase date will be considered as the purchasing party, and other participating enterprise isthe purchased party. The purchase date refers to the day when the purchasing party obtains the control right over the purchased party.
As for enterprise merger not under the same control, the merger costs include the assets paid by the purchasing party, the liabilities accruedand assumed, as well as the fair value of equity securities issued for obtaining purchased party's control right on the purchase date; the intermediaryfees, such as auditing, legal service and evaluation and consulting, and other related administrative expenses for the enterprise merger shall beincluded into the current profits and losses at the time of occurrence. Transaction cost of equity securities or debt securities issued by the purchasingparty as merger consideration shall be included into initial recognition amount of the equity securities or debt securities. Contingent considerationinvolved shall be included into the merger cost according to the fair value at the purchase date; if new or further proofs appearing within 12 monthsafter the purchase date show that the contingent consideration needs to be adjusted, the merger goodwill shall be adjusted correspondingly. Themerger costs incurred by the purchasing party and the identifiable net assets obtained in the merger shall be measured at the fair value on thepurchase date. The amount of the merger cost larger than the fair value of identifiable net assets of the purchased party acquired by it on thepurchase date shall be recognized as goodwill. If the merger cost is lower than the fair value of identifiable net assets of the purchased partyobtained during merging, the measurement of the identifiable assets of the purchased party obtained, liabilities or fair value of contingent liabilitiesand the merger costs shall be reviewed firstly. If the merger cost is still lower than the fair value of identifiable net assets of the purchased partyobtained during merger, the difference shall be included into the current profits and losses.
If the deductible temporary difference of the purchased party gained by purchasing party fails to be confirmed on the purchase date due tothe inconformity of the recognition condition of deferred income tax assets, and in case new or further information obtained indicates that therelevant conditions on the purchase date have existed within 12 months after the purchase date, and it is predicted that the economic benefitsbrought by the purchased party from deductible temporary differences can be realized on the purchase date, relevant deferred income tax assetsshall be confirmed, at the same time, the goodwill shall be reduced; if the goodwill is insufficient for offset, the differential part shall be confirmedas the current profits and losses; except for above conditions, in case the deferred income tax assets are confirmed to be related to the enterprisemerger, they shall be included into the current profits and losses.
As for the enterprise merger not under the same control realized step by step through multiple transactions, it shall judge whether the multipletransactions belong to the "package deal" according to No. 5 Notice About Printing and Issuing Accounting Standards for Business EnterprisesExplanation in Ministry of Finance (CK [2012] No. 19) and the judgment standard (refer to the Note 5 6 "Preparation Method for ConsolidatedFinancial Statements" (2)) about "package deal" in Article 51 of the Accounting Standards for Business Enterprises No. 33 -- ConsolidatedFinancial Statement. If the multiple transactions belong to the "package deal", refer to the above descriptions of the part and Note 5 15 "Long-term Equity Investment" to conduct the accounting treatment; for those not belonging to "package deal", it shall distinguish individual financialstatements and consolidated financial statements to conduct relevant accounting treatment.
The sum of book value of the purchased party's equity investment held prior to the purchase date and the newly investment cost on thepurchase date in individual financial statements shall be regarded as the initial investment cost of such investment; in case that the equity of thepurchased party held before the purchase date is involved in other comprehensive incomes, when disposing of the investment, other comprehensiveincome related shall be transferred to the current investment income.
In consolidated financial statements, the equity of the purchased party held before the purchase date shall be measured again according to thefair value of the equity at the purchase date, and the difference between fair value and its book value shall be included into the current investment
income; in case that equity of the purchased party held before the purchase date is involved in other comprehensive incomes, other comprehensiveincome related shall be transferred to the current investment income on the purchase date.
6. Preparation method for consolidated financial statements
(1) Principles for defining the scope of consolidated financial statement
The scope of the consolidated financial statements is control-based. Control refers to that Supor has the right in an investee which allows itto enjoy variable returns by participating relevant activities of such investee and to use such right to influence the amount of such returns. Theconsolidation scope shall include the Company and all its subsidiaries, and "subsidiaries" refers to the bodies under the control of Supor.Supor will re-evaluate the situation once the change in relevant facts and circumstances affects the factors involved in the above definition ofcontrol.
(2) Preparation method for consolidated financial statements
From the date of obtaining actual control right of the subsidiaries' net assets and production operation decision, the Group will begin to bringit into the merger scope; subsidiaries will not be included into the merger scope from the date when the Company loses its actual control right. Asfor the disposed subsidiaries, the operating results and cash flow before disposal date have been properly included into the consolidated profitstatement and consolidated cash flow statement; as for subsidiaries disposed in the current period, the opening balance of the consolidated balancesheet will not be adjusted. As for the subsidiary increased due to the enterprise merger not under the same control, its operating results and cashflow after the purchase date have been properly included into the consolidated profit statement and consolidated cash flow statement, and theopening balance and contrast balance of the consolidated financial statement shall not be adjusted. As for the subsidiary increased due to theenterprise merger under the same control and the merged party under consolidation by merger, the operating results and cash flow from thebeginning of the current period of the merger to the merger date have been properly included into the consolidated profit statement and theconsolidated cash flow statement, and the contrast balance of the consolidated financial statement shall be adjusted simultaneously.
When consolidated financial statements are prepared, in case the accounting policies or accounting periods employed by the subsidiary andthe Company are different, it's required to make necessary adjustment on the subsidiary's financial statements according to the Company'saccounting policy and accounting period. As to the subsidiary acquired by the enterprise merger not under the same control, it's required to adjustits financial statements on the basis of fair value of identifiable net assets at the purchase date.
All significant current balance and transaction and unrealized profits in the Group are offset in the preparation of consolidated financialstatement.
The shareholders' equities and current net profits or losses of subsidiaries that do not belong to the part owned by the Company, shall beseparately listed in the shareholders' equities and minority shareholders' profit and loss in the consolidated financial statement as the minorityshareholders' equities and profits and losses. The share in the current net profit or loss of the subsidiary that belongs to minority shareholders'equities shall be set out as "minority shareholders' profit and loss" under net profit in the consolidated profit statement. In case the losses of thesubsidiary shared by minority shareholders exceed the share that shall be enjoyed by minority shareholders in the subsidiary's shareholders' equitiesat the beginning of period, they shall be offset with minority shareholders' equities.
In case of losing the control right for the original subsidiary due to disposal of partial equity investment or other reasons, the residual equityshall be measured again according to the fair value at the date when the control right is lost. The difference between the sum of the considerationacquired by equity disposal and the fair value of residual equity and the share of net assets of the original subsidiary that shall be enjoyed and iscalculated continuously from the purchase date according to the original shareholding ratio shall be included into the investment income of thecurrent period when the control right is lost. As for other comprehensive income which relate to the equity investment of the original subsidiaries,when the control right is lost, the accounting treatment shall be carried out on the same basis as the subsidiary's direct disposal of relevant assetsor liabilities. Thereafter, the residual equity of this part shall be further measured in accordance with Accounting Standards for Business EnterprisesNo. 2 -- Long-term Equity Investment or Accounting Standards for Business Enterprises No. 22 -- Recognition and Measurement of FinancialInstruments. See Note 5 15 "Long-term Equity Investment" or Note 5 9 "Financial Instruments" for details.
If the Group disposes the equity investment of subsidiary step by step via multiple transactions until losing the control right, it is necessaryto distinguish whether transactions for disposal to the equity investment of subsidiary until losing the control right belong to the package deal.When the disposal of the articles, conditions and the economic impact of various transactions for the equity investment of the subsidiary is subject
to one or more of the following conditions, it generally indicates that it shall conduct accounting treatment by taking the multiple transactions asa package deal: ① These transactions are considered to be concluded at the same time or made in the case of considering mutual influence; ②These transactions as a whole can reach a complete business result; ③ The occurrence of a transaction depends on the occurrence of at least oneother transaction; ④ One transaction alone is not economical, but when being considered together with other transactions, it is economical. If it isnot package deal, every transaction will be conducted by the accounting treatment according to the following suitable principles, namely, "partiallydispose the long-term equity investment of subsidiary when the control right is not lost" (See Note 5 15 "Long-term Equity Investment" (2) (d))and "lose the control right for the original subsidiary due to disposal of partial equity investment or other reasons" (see previous paragraph) fordetails. If the disposal of transactions on subsidiaries' equity investments until loss of control right is a package deal, they are regarded as atransaction that disposes the subsidiary and loses the control right; however, the difference between each disposal price and the subsidiary's netasset share enjoyed corresponding to disposing investment before loss of control right shall be recognized as other comprehensive incomes in theconsolidated financial statements, which will be transferred into the current investment profits and losses on investments of losing the control rightwhen the control right is lost.
7. Determining standards for cash and cash equivalents
Cash and cash equivalents of the Group includes cash on hand and the deposit that can be used for making payment at any time as well asinvestments that are held by the Group, have a short term (generally mature within 3 months since the purchase date) and strong liquidity, can beconverted into the cash of known amount easily, and have small risks in value change.
8. Foreign currency business and foreign currency statement conversion
(1) Conversion method for foreign currency transactions
After initial recognition, the foreign currency transactions occurring in the Group are converted into recording currency amounts at the spotrate prevailing on the transaction date (usually the central parity of the exchange rate quoted on the day of issuance by the People's Bank of China,the same below).
(2) Conversion method for foreign currency monetary items and foreign currency non-monetary items
For the balance sheet date, the spot rate on the balance sheet date will be adopted in the conversion of the foreign currency monetary items.In terms of the resulting exchange differences: ① The exchange difference of special foreign currency borrowings related to acquiring andconstructing assets which meet capitalization conditions is disposed on the principle of the capitalization of borrowing expense; and ② foreigncurrency monetary items measured at the fair value with their changes included into other comprehensive incomes, except that the exchangedifference created by other book balance changes other than by amortized costs (including decrease in value) is included into other comprehensiveincomes, are included into the current profits and losses.
As to foreign currency non-monetary items measured by historical cost, the amount in the recording currency converted at the spot rate onthe transaction date is still employed for measurement; as to foreign currency non-monetary items measured by fair value, it's required to employthe spot rate at the fair value confirmation date for conversion, and the resulting exchange difference belongs to the difference of equity instrumentinvestment measured at the fair value with their changes included into other comprehensive incomes, and is included into other comprehensiveincome or recognized as other comprehensive incomes; other differences are included into current profits and losses.
(3) Conversion of foreign currency financial statement
The foreign currency financial statement of overseas business is converted to RMB statement with the following method: the assets andliabilities in the balance sheet shall be converted based on the spot rate on the balance sheet date; as for shareholders' equities, except the"undistributed profits", other items shall be converted by the spot rate on the date of occurrence. Items under income and expense in the profitstatement shall be translated according to the spot rate at the transaction date. The undistributed profits at the beginning of the year is the year-endundistributed profit after conversion of last year; the period-end undistributed profit is calculated and presented according to the profit distributionof each item after conversion; the balance of the total amount among the assets and liabilities as well as shareholders' equities after conversionserves as "conversion difference in foreign currency statement" and is recognized as other comprehensive income; For disposal of overseas businessand the loss of control right, the conversion difference in foreign currency statement related to the overseas business and presented under the
shareholders' equities in the balance sheet is transferred wholly or according to the disposal ratio of the overseas business into the current disposalprofits and losses.Foreign cash flows and cash flows of subsidiaries overseas are converted based on spot rate on the occurring date of cash flows. The influencedamount of changes in the exchange rate on cash is listed separately in the cash flow statement as an adjustment item.The beginning amount and actual amount of the year shall be presented according to the amount after conversion of financial statement oflast year.In case of loss of control right of overseas business due to disposal of the Group's entire owners' equities in overseas business, or the disposalof partial equity investment or other reasons, the foreign currency conversion difference listed in the shareholders' equities items in the balancesheet, related to the overseas business and attributable to owners' equities belonging to parent company shall be totally converted into the currentdisposal profits and losses.
In case of decrease of the ratio of overseas business, but no loss of control right due to disposal of partial equity investment or other reasons,the conversion difference related to the disposal of part of related currency in the overseas business shall be attributable to the minority shareholders'equities, and not converted into the current profits and losses.
If there are any foreign currency monetary items that substantially constitute net investment in overseas businesses, the exchange differencegenerated due to the exchange rate change in the consolidated financial statements shall be determined to other comprehensive incomes as"conversion difference in foreign currency statements"; when disposing overseas business, it shall be included into the current disposal profits andlosses.
9. Financial instruments
When the Group becomes one party of financial instrument contract, it's required to recognize financial assets or financial liabilities.
(1) Classification, recognition and measurement of financial assets
Based on the business mode for managing financial assets and the contracted cash flow features of financial assets, the Group divides thefinancial assets into: financial assets measured by amortized cost, financial assets measured at the fair value with their changes included into othercomprehensive incomes, and financial assets measured at the fair value with their changes included into the current profits and losses.
The business mode of the Company's management of financial assets means that how the Group manages its financial assets so as to generatecash flows. Through business mode, it can be determined that whether the cash flow of financial assets managed by the Group is from the collectionof contractual cash flow, sales of financial assets, or both. The Group, based on the objective fact and specific business objective of financial assetmanagement determined by key management personnel, makes decisions on the business mode for managing financial assets.
The Group evaluates the contractual cash flow characteristic of financial assets to determine whether the contractual cash flow generated bythe relevant financial assets on the specific date is only payment of principal and interests for outstanding principal amount. Wherein, the principalrefers to the fair value of financial assets at initial recognition; interest includes consideration of the time value of money, the credit risk related tothe outstanding principal amount for a specific period, and other basic borrowing risks, costs, and profits. Furthermore, the Group evaluates thecontract terms that are likely to cause changes in the distribution of time or amount of the contractual cash flow of financial assets, to determinewhether the terms satisfy the requirements of the above contractual cash flow characteristics.
Unless the Group changes its business mode for managing financial assets, all affected related financial assets are reclassified on the first dayof the first reporting period after the change of business mode, otherwise, financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured by fair value during initial recognition. As to financial assets measured at the fair value with their changesincluded into the current profits and losses, related transaction cost shall be included into the current profits and losses directly; as to othercategories of financial assets, related transaction cost shall be included into initial recognition amount. Accounts receivable or notes receivablethat are from sale of products or rendering of labors, and do not include or take into account significant financing parts are taken as initialrecognition amount by the Group based on the consideration amount that the Group is entitled to receive.(a) Financial assets measured by amortized cost
The business mode of the Group to manage financial assets measured by amortized cost is aimed at receiving contracted cash flows; thecontracted cash flow features of such financial assets are consistent with basic loan arrangements, that is, cash flows generated at specific date areonly payment of principal and interests for outstanding principal amount. Effective interest method is used by the Group to carry out subsequent
measurement of such financial asset according to the amortized cost, and the gains or losses arising from amortization and impairment are includedinto the current profits and losses.(b) Financial assets measured at the fair value with their changes included into other comprehensive incomesThe business mode of the Group to manage such financial assets is aimed at receiving contracted cash flows as well as sales; the contractcash flow features of such financial assets are consistent with basic loan arrangements. The Group measures such financial assets measured at thefair value with their changes included into other comprehensive incomes, but impairment losses or gains, exchange profits and losses, and interestrevenue calculated based on effective interest method are included into the current profits and losses. When the financial asset is derecognized,the accumulated gains or losses previously included into other comprehensive income shall be transferred out of other comprehensive income andincluded into the current profits and losses.In addition, for investments in non-transactional equity instruments, the Group can irrevocably designate them as financial assets measuredat the fair value with their changes included into other comprehensive incomes upon initial recognition. The designation is made on a singleinvestment basis, and the relevant investment meets the definition of equity instrument from the issuer's point of view. The Group includes therelated dividend income of such financial assets into the current profits and losses with the change in fair value included into other comprehensiveincome. When the financial asset is derecognized, the accumulated gains or losses previously included into other comprehensive income shall betransferred out of other comprehensive income to retained earnings and not included into the current profits and losses.(c) Financial assets measured at the fair value with their changes included into the current profits and lossesThe Group recognizes foregoing financial assets measured by amortized cost and that are not financial assets measured at the fair value withtheir changes included into other comprehensive incomes as financial assets measured at the fair value with their changes included into the currentprofits and losses. In addition, during initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Group designatespart of the financial assets measured at the fair value with their changes included into the current profits and losses. As to such financial assets,subsequent measurement shall be carried out by the Group based on fair value, and the resulting gains or losses (including interest and dividendincome) are included into current profits and losses, unless the financial asset is part of the hedging relationship.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities are classified as financial liabilities measured at the fair value with their changes included into the current profits andlosses, financial guarantee liabilities and other financial liabilities upon initial recognition. As to financial liabilities measured at the fair value withtheir changes included into the current profits and losses, related transaction cost shall be included into the current profits and losses directly; asto other financial liabilities, related transaction cost shall be included into initial recognition amount.(a) Financial liabilities measured at the fair value with their changes included into the current profits and lossesFinancial liabilities measured at the fair value with their changes included into the current profits and losses include transactional financialliabilities (including derivatives belonging to financial liabilities) and financial liabilities that are designated to be measured at fair value withchanges included into the current profits and losses during initial recognition.Transactional financial liabilities (including derivatives belonging to financial liabilities) are measured subsequently at fair value and exceptfor those related to hedge accounting, changes in fair value are included into the current profits and losses.For financial liabilities measured at the fair value with their changes included into the current profits and losses, changes in their fair valuecaused by changes in the Group's own credit risk are included into other comprehensive income, and when such liabilities are stopped to berecognized, accumulated changes in their fair value caused by changes in the Group's own credit risk that is included into other comprehensiveincome are transferred to retained earnings. Other changes in fair value are included into current profits and losses. If the treatment of impact ofchanges in credit risk of these financial liabilities in the above manner will cause or expand accounting mismatches in profit or loss, the Groupwill include all gains or losses of such financial liabilities (including impact of changes in the Company's own credit risk) into the current profitsand losses.(b) Financial guarantee liabilitiesA financial guarantee contract refers to a contract that requires the Group to pay a specific amount to the contract holder who has suffered aloss when the specific debtor fails to pay the debt in accordance with the original or modified terms of the debt instrument at maturity.After initial recognition, the income related to the financial guarantee contract is apportioned and included into the current profits and lossesin accordance with the accounting policies mentioned in Note 5 26 "Revenue". Financial guarantee liabilities are subsequently measured according
to the higher of the loss provision amount determined according to the impairment principle of financial instruments and the balance of its initialrecognition amount after deducting the accumulated amortization amount of income related to financial guarantee contracts.(c) Other financial liabilitiesIn addition to financial liabilities and financial guarantee contracts as a result of financial asset transfers that are not in line with derecognitioncondition or continuous involvement in transferred financial asset, other financial liabilities are classified as financial liabilities measured atamortized cost and measured subsequently at amortized cost, and gains or losses arising from derecognition or amortization of such liabilities areincluded into the current profits and losses
(3) Recognition basis and measurement method of the transfer of financial assets
If financial assets meet one of the following conditions, derecognition of such financial assets will be carried out: ① the contractual right toreceive cash flow from the financial assets is terminated; ② the financial assets have been transferred and almost all the risks and rewards in theownership of the financial assets are transferred to the transferee; ③ the financial assets have been transferred and, although the Group has neithertransferred nor retained almost all risks and rewards in the ownership of the financial assets, it has waived its control over the financial assets.If the Group neither transfers nor retains almost all the risks and rewards in the ownership of the financial assets and does not relinquishcontrol over the financial assets, the financial assets shall be recognized according to the degree of continuous involvement of the financial assetstransferred, and the relevant liabilities shall be recognized accordingly. Degree of continuous involvement of the financial assets transferred is therisk level of the Group due to changes in value of such financial assets.In case whole transfer of financial assets satisfies the derecognition condition, the difference between the sum of the book value of financialassets transferred and consideration received due to the transfer and the sum of changes in fair value original included into other comprehensiveincome shall be included into the current profits and losses.In case partial transfer of financial assets satisfies the derecognition condition, book value of the financial assets transferred shall be amortizedbetween the derecognition part and the part without derecognition according to their own fair value, and the difference between the sum of theconsideration received for the transfer and accumulated amount of the change in fair value to be amortized to derecognition part and originallyincluded into other comprehensive income, and the foregoing book value amortized shall be included into the current profits and losses.For financial assets sold with right of recourse, or to transfer financial assets by endorsement, the Group needs to determine whether almostall risks and rewards related to ownership of such financial assets have been transferred. If almost all risks and rewards related to the ownershipof such financial assets are transferred to the transferee, derecognition of such financial assets shall be conducted; derecognition of such financialassets should not be conducted if the risks and rewards related to the ownership of such financial assets are reserved; if the risks and rewardsrelated to the ownership of such financial assets are not transferred nor reserved, it needs to determine whether the Company keeps its control oversuch assets and make accounting treatment based on principles as described in the foregoing paragraphs.
(4) Derecognition of financial liabilities
In case the current obligations of financial liabilities (or part of the financial liabilities) have been terminated, the Group will carry outderecognition of such financial liabilities or part of them. In case the Group (borrower) signs an agreement with the debtor to replace the originalfinancial liabilities by means of bearing new financial liabilities, and contract clauses related to the new financial liabilities and original financialliabilities are different in essence, it's required to carry out derecognition of original financial liabilities and recognize the new financial liabilitiessimultaneously. If the Group substantially modifies the contract terms of the original financial liability (or part of it), the original financial liabilityis derecognized and a new financial liability is recognized in accordance with the revised terms.
In case derecognition is carried out for the whole or part of financial liabilities, the difference between their book value and the considerationpaid (including non-cash assets transferred out or liabilities assumed) shall be included by the Group in the current profits and losses.
(5) Offset of financial assets and financial liabilities
In case the Group has the legal right of offsetting the financial assets and financial liabilities recognized and such legal right is executablenow, and the Group plans to carry out settlement by net amount or realize the financial assets and pay off the financial liabilities simultaneously,the net amount after mutual offset of such financial assets and financial liabilities shall be set out in the balance sheet. Otherwise, financial assetsand financial liabilities shall be set out in the balance sheet respectively and will not be offset mutually.
(6) Equity instruments
An equity instrument refers to a contract that can prove the ownership of residual interest in assets after the Group deducts all liabilities. TheGroup's issuing (including refinancing), repurchase, sale or cancellation of equity instruments are treated as changes in equity, and transactioncosts related to equity transactions are deducted from equity. The Group does not determine changes in fair value of equity instruments.
Distribution of dividends (including "interest" from instruments classified as equity instruments) from the equity instruments during theduration of the Group is treated as profit distribution.
10. Financial assets impairment
Supor needs to recognize the financial assets with impairment losses as financial asset measured at amortized costs and debt tools measuredat the fair value with their changes included into other comprehensive incomes, including mainly notes receivable, accounts receivable, receivablesfinancing, other receivables and other debt investments. Moreover, for contract assets and some financial guarantee contracts, the impairmentprovision shall be accrued and the credit impairment loss shall be recognized pursuant to the accounting policy set forth herein.
(1) Recognition method of impairment provision
The above items are accrued for impairment provision and credit impairment losses by the Group in accordance with applicable expectedcredit loss measure methods (general or simplified) based on the expected credit loss.
Credit loss refers to the difference between all contractual cash flows discounted as per the original effective interest rate and receivable fromthe contract and all cash flows expected to be received by the Group, namely, the present value of a shortage of cash. Wherein, the purchased orunderlying financial assets with credit impairment of the Group shall be discounted as per effective interest rate based on credit adjustment.
The general method for measuring expected credit loss is as follows, the Group evaluates whether credit risk of financial assets (includingcontract assets and other applicable items, the same below) has remarkably increased after initial recognition on each balance sheet date. In caseof credit risk having remarkably increased after initial recognition, the Group will measure loss provision as per the amount equivalent to expectedcredit loss in the entire duration; in case of credit risk failing to remarkably increase after initial recognition, the Group will measure loss provisionas per the amount equivalent to expected credit loss in the next 12 months. At the time of evaluating expected credit loss, the Group considers allreasonable and well-founded information, including forward-looking information.
When the expected credit loss is measured, the longest period to be considered by the Group is the longest contract period when the enterprisefaces the credit risk (including considering the renewal option). The expected credit loss of the entire duration refers to the expected credit lossarising from all possible events of default regarding financial instrument occurring during the entire expected duration. Expected credit loss in thenext 12 months refers to expected credit loss resulting from default of financial instruments likely occurring within 12 months after the balancesheet date (expected duration if the expected duration of financial instruments is less than 12 months) which is part of expected credit loss duringthe entire duration.
For the financial instrument with a lower credit risk on the balance sheet date, the Group assumes that its credit risks have not increasedsignificantly since the initial recognition, and measures the loss provisions according to the expected credit losses of the future 12 months.
(2) Standard for judging whether credit risk has remarkably increased after initial recognition.
In case that probability of default of one financial asset confirmed on the balance sheet date in the expected duration is obviously higher thanthat confirmed at the moment of initial recognition in the expected duration, it means credit risk of such financial asset remarkably increases. Thechanges of default risk within the next 12 months are adopted by the Group other than special cases as reasonable estimate in the entire duration,ensuring whether the credit risk has increased significantly since the initial recognition.
(3) Combinatorial method of appraising future credit risk based on portfolio
the Group appraises the credit risk of the financial asset item of significantly different credit risks, such as: receivables from the related parties;receivables disputed with the opposite side or involving litigation or arbitration; there have been obvious signs showing that the debtor possibly isnot able to perform the repayment obligations of receivable amounts, etc.
Except financial assets of individual credit risk assessment, the Group divides financial assets into different groups based on the common riskcharacteristics and appraises credit risks based on portfolio.
(4) Accounting treatment method of financial assets impairment
The expected credit losses of all kinds of financial assets are calculated by the Group at the end of the duration. If the estimated credit loss isgreater than the book value of the current impairment provision, the difference is recognized as impairment loss; if not, it is recognized asimpairment profits.
(5) Determination method of credit losses of all kinds of financial assets
(a) Accounts receivable and contract assets
For accounts receivable and contract asset not involving significant financing part, Supor always calculates the loss provision as the amountof expected credit loss within the entire duration.
For accounts receivable and contract asset involving significant financing part, Supor always calculates the loss provision as the amount ofexpected credit loss within the duration.
The other accounts receivables other than individual credit risk assessment are divided into different portfolios based on their credit riskcharacteristics:
| Item | Basis for determination of portfolio |
| Accounts receivable: |
Portfolio 1: age portfolio
| Portfolio 1: age portfolio | Aging of receivables is used as the credit risk feature for this portfolio. |
| Portfolio 2: low-risk portfolio | The portfolio includes very low-risk amounts such as the payment of export third-party goods. |
| Portfolio 3: merged related parties portfolio | This portfolio includes current amount between related parties within the merger scope of amounts receivable. |
(b) Other receivables
The impairment loss is measured by the Group in accordance with the amount of expected credit loss equivalent to that within the next 12months or the entire duration based on whether the credit risk of other receivables has increased significantly since the initial recognition. Theother receivables other than individual credit risk assessment are divided into different portfolios based on their credit risk characteristics:
| Item | Basis for determination of portfolio |
| Portfolio 1: age portfolio | Aging of receivables is used as the credit risk feature for this portfolio. |
| Portfolio 2: low-risk portfolio | The portfolio consists of interests receivable, dividends receivable, receivables from government departments with very low risk. |
| Portfolio 3: merged related parties portfolio | This portfolio includes current amount between related parties within the merger scope of amounts receivable. |
11. Receivables financing
The notes receivable and accounts receivable measured at the fair value with their changes included into other comprehensive incomes arelisted as receivables financing with a term of less than one year (including one year) from the initial recognition; See the Note 5 9 "FinancialInstruments" and 10 "Financial Assets Impairments" for relevant accounting policies.
12. Inventories
(1) Category
Inventory mainly includes raw materials, unfinished products, finished products, low value consumables and packing materials.
(2) Valuation method for the acquisition and distribution of inventory
When inventories are acquired, they are priced at actual costs. Inventory costs include procurement costs, processing costs, and other costs.When inventories are used and distributed, the price is calculated by the one-off weighted average method at the end of a month.
(3) Method of recognizing net realizable value and accruing depreciation reserve of inventories
Net realizable value refers to the amount of the estimated selling price of inventories deducted by estimated costs to be incurred uponcompletion, estimated sales expenses and related taxes in daily activities. For the inventories held for executing the sales contract or labor contract,the net realizable value shall be measured based on the contract price. When the amount of holding inventory is more than the ordering amount in
sales contract, the net realizable value of the excess inventory shall be measured based on general sales price. The determination of net realizablevalue of the inventory shall be based on the concrete evidence acquired and consider the purpose of holding inventory, and impacts of the eventsafter the balance sheet date.At the balance sheet date, the inventory shall be measured according to the cost or net realizable value, subject to the lower one. In case thecost is higher than net realizable value, inventory depreciation reserves shall be withdrawn. The inventory depreciation reserve is usually withdrawnbased on the difference between the cost of a single inventory item and its net realizable value.After the inventory depreciation reserve is withdrawn, if factors that previously reduced the value of inventory disappear, causing netrealizable value of inventory to be higher than its book value, the original inventory depreciation reserves will be reversed and the amount reversedis included into the current profits and losses.
(4) Inventory system is perpetual inventory system
(5) Amortization method for low value consumables and packing materials
Low value consumables shall be amortized by one-off amortization method during the requisition or amortize during the period of use;packing materials shall be amortized by one-off amortization method during the requisition.
13. Contract assets
The Group lists the customer's unpaid contract consideration as contract assets in the balance sheet, under which the Group has fulfilled itsperformance obligations in accordance with the contract, and it does not have the right to collect payments from customers unconditionally (thatis, only depending on the passage of time). Contract assets and liabilities under the same contract are listed in net amount, and those under differentcontracts shall not be offset.
For the determination and accounting treatment methods of expected credit losses of contract assets, please refer to Note 5 10 "FinancialAssets Impairment".
14. Held-for-sale assets and disposal group
In case the Group mainly recovers the book value by selling (including non-monetary assets exchange of commercial essence, the same below)rather than using a non-current asset or disposal group continuously, it will be classified as held-for-sale category. Specific standard refers tomeeting the following conditions at the same time: one non-current asset or disposal group can be immediately sold under the current situationpursuant to the convention for selling such asset or disposal group in similar transaction; the Group has made a resolution about sale plan and gotcertain of purchase commitment; it's predicted that the sale will be completed within one year. Disposal group refers to a group of assets that willbe disposed together as a whole by selling or other means in a transaction and the liabilities directly related to these assets and transferred in thetransaction. In case the asset group or asset group portfolio where the disposal group belongs has amortized the goodwill acquired in enterprisemerger according to Accounting Standards for Business Enterprises No. 8 -- Impairment of Assets, the disposal group shall include the goodwillamortized to it.
If there are non-current assets or disposal groups purchased to resell during initial measurement or on the balance sheet date based onremeasurement of the Group, if the book value is higher than the net amount by deducting the selling expenses with the fair value, the book valueshall be written down and be equal to the net amount by deducting the selling expenses with the fair value. The write-down amount shall beconfirmed as the asset impairment loss and included into the current profits and losses. At the same time, the impairment provision of the held-for-sale assets shall be calculated and withdrawn. For the disposal group, it shall deduct the book value of the goodwill in the disposal group withthe asset impairment loss confirmed, then deduct in proportion the book value of each non-current asset in the disposal group conforming to themeasurement provisions on Accounting Standards for Business Enterprises No. 42 - Held-for-sale Non-current Assets, Disposal Group andDiscontinuing Operation (hereinafter referred to as "the Standard for Held-for-sale Non-current Assets"). For the held-for-sale disposal group, ifthe net amount after deducting the selling expenses from the fair value on the subsequent balance sheet date increases, the previous write-downamount shall be recovered and shall be reversed from the confirmed amount of asset impairment loss amount of the non-current asset as per themeasurement provisions on the Standard for Held-for-sale Non-current Assets after the assets are classified as held-for-sale category. The reverseamount shall be included into the current profits and losses, and the book value shall be added in proportion of the book value of each non-current
asset in the disposal group applicable to the measurement provisions on the Standard for Held-for-sale Non-current Assets, except for the goodwill;Book value of the goodwill that has been offset and asset impairment loss recognized before the non-current assets applying to the measurementprovisions on the Standard for Held-for-sale Non-current Assets are classified as held-for-sale category shall not be reversed.Depreciation or amortization will not be withdrawn for held-for-sale non-current assets or non-current assets in the disposal group, and theinterest of liabilities in held-for-sale disposal group and other expenses shall be recognized continuously.When the non-current assets or disposal group can't be classified as held-for-sale category, the Group will no longer continue to classify them asheld-for-sale or remove non-current assets from the held-for-sale disposal group and measure them according to the following two items, subjectto the lower one: ① book value before the assets are classified as held-for-sale category, namely, the amount after the adjustment is carried outaccording to the depreciation, amortization or impairment, etc. that shall be recognized in the condition that the assets are supposed not to beclassified as held-for-sale category; ② recoverable amount.
15. Long-term equity investment
The long-term equity investment mentioned in this part refers to the long-term equity investment of which the Group has control right,common control right or significant impact on the invested units. Long-term equity investments that the Group does not have control, commoncontrol or significant impact on the invested unit are accounted for as financial assets measured at the fair value with their changes included intothe current profits and losses. If such assets are not non-transactional, the Group may specify these capitals as measured at the financial assetsmeasured at the fair value with their changes included into other comprehensive incomes at the initial recognition. See Note 5 9 "FinancialInstruments" for details.
Common control refers to common control on a certain arrangement according to related provisions by the Group and related activities of thearrangement can be decided only after the consent of the participant sharing the control right. Significant impact refers to the Group's power onparticipating in the decision-making of financial and operating policies of the invested unit, but it can't control the formulation of these policies orcontrol the formulation commonly with other party.Determination of investment cost
For the long-term equity investment obtained from the enterprise merger under the same control, the initial investment cost of the long-termequity investment shall be taken as the share of the book value of the merged party's shareholders' equities/owners' equities in the final controllingparty's consolidated financial statements on the merger date. As to the difference between initial investment cost of long-term equity investmentsand the book value of the cash paid, non-cash assets transferred and liabilities assumed, it's required to adjust the capital reserve correspondingly.In case the capital reserve is insufficient for the offset, it's required to adjust the retained earnings. In the case of treating issued equity securitiesas the merger consideration, the share of the book value of the merged party's shareholders' equities/owners' equities in the consolidated financialstatement of the final controlling party is regarded as the initial investment cost of long-term equity investment on the merger date; the capitalreserves shall be adjusted in accordance with taking the total face value of shares issued as share capital, and the difference between the initialinvestment cost of long-term equity investment and the total face value of shares issued; In case the capital reserve is insufficient for the offset,it's required to adjust the retained earnings. The equity of the merged party obtained step by step through several transactions, which finally formsenterprise merger under the same control, shall be handled separately according to whether it belongs to "package deal": if it belongs to the"package deal", the accounting treatment will be carried out by taking transactions as a certain one with control right. If it does not belong to"package deal", the share of the book value of the merged party's shareholders' equities/owners' equities in the final controlling party's consolidatedfinancial statement on the merger date will be taken as the initial investment cost of long-term equity investment, and the capital reserves will beadjusted according to the difference between the initial investment cost of long-term equity investment and the sum of book value of long-termequity investment before combination and book value of consideration newly paid for acquiring the share; In case the capital reserve is insufficientfor the offset, it's required to adjust the retained earnings. Other comprehensive income of equity investment held before the merger date, whichis accounted by equity method or recognized as financial assets measured at the fair value with their changes included into other comprehensiveincomes, is temporarily not subject to the accounting treatment.
The long-term equity investment obtained from the enterprise merger not under the same control shall be used as the initial investment costof long-term equity investment according to the merger cost on the purchase date. The merger cost includes the sum of assets paid by the purchasing
party, liabilities incurred or assumed, and fair value of issued equity securities. The equity of the purchased party held obtained step by step throughseveral transactions, which finally forms enterprise merger not under the same control, shall be handled separately according to whether it belongsto "package deal": if it belongs to the "package deal", the accounting treatment will be carried out by taking transactions as a certain one withcontrol right. If it does not belong to "package deal", it shall take the sum of the book value of the original equity investment held by the originalpurchased party and the newly investment cost as the initial investment cost of the long-term equity investments under the cost method. If theequity originally held is accounted for by equity method, the relevant other comprehensive incomes will not be accounted for the time being.The initial measurement of other equity investments except for the long-term equity investment formed by the enterprise merger shall becarried out according to the costs; in consideration of the different acquisition modes of long-term equity investment, such costs shall be determinedrespectively by the cash purchase price actually paid by the Group, the fair value of equity securities issued by the Group, value agreed in theinvestment contract or agreement, the fair value or original book value of assets surrendered in the non-monetary assets exchange transaction, thefair value of the long-term equity investment, etc. The expenses, taxes and other necessary expenditures directly related to the acquisition of thelong-term equity investment shall also be included into the investment cost. If the significant impact or common control is implemented on theinvested unit due to the additional investment, but it does not constitute the control, the long-term equity investment cost is the sum of fair valueof the originally held equity investment determined according to Accounting Standards for Business Enterprises No. 22 -- Recognition andMeasurement of Financial Instruments and newly investment cost.
(2) Methods for the subsequent measurement and the profit and loss confirmation
Long-term equity investments that have common control (except for joint operators) or significant impact on the invested unit are accountedby equity method. Besides, the Company's financial statement adopts the cost method to account the long-term equity investment that can becontrolled by the invested unit.(a) Long-term equity investments under the cost methodWhen the cost method is adopted for accounting, long-term equity investment is priced at the initial investment cost, and the cost of long-term equity investment shall be adjusted when the investment is added or recovered. The current investment incomes shall be recognized by thecash dividends or profits announced and issued by the invested unit, except for the actual price paid when the investment is obtained or the cashdividends or profits which have been declared but not issued in the consideration.(b) Long-term equity investments under the equity methodAs to long-term equity investments checked by equity method, in case the initial investment cost is more than the shares of fair value ofidentifiable net assets of the invested unit that shall be enjoyed during the investment, initial investment cost of the long-term equity investmentsshall not be adjusted; in case the initial investment cost is less than the shares of fair value of identifiable net assets of the invested unit that shallbe enjoyed during the investment, the difference shall be included into the current profits and losses and the cost of long-term equity investmentsshall be adjusted simultaneously.When the equity method is adopted for accounting, it's required to recognize the investment income and other comprehensive incomerespectively according to net profit or loss realized by the invested unit that shall be enjoyed or shared and other comprehensive income, and bookvalue of the long-term equity investment shall be adjusted simultaneously. As to the part that shall be enjoyed and calculated according to theprofits or cash dividends announced and distributed by the invested unit, it's required to reduce the book value of long-term equity investmentcorrespondingly. As to other changes in owners' equities of the invested unit except for net profits and losses, other comprehensive incomes andprofit distribution, book value of the long-term equity investment shall be adjusted and included into the capital reserve. When the shares of netprofit or loss of the invested unit that shall be enjoyed are recognized, it shall be based on fair value of each identifiable net asset of the investedunit when the investment is acquired and after the adjustment is made on net profit of the invested unit. In case the accounting policy and accountingperiod employed by the invested unit are different from those employed by the Group, financial statements of the invested unit shall be adjustedaccording to the Group's accounting policy and accounting period. Besides, investment income, other comprehensive income, etc. shall berecognized on this basis. For transactions between the Group and associated enterprise or joint venture, if the assets launched or sold do notconstitute the business, the unrealized internal trading profits and losses shall be offset according to the proportion attributable to the Group, andthe investment profits and losses shall be confirmed on this basis. In case the part incurred between the Group and the invested unit without internaltransaction loss belongs to the asset impairment loss, it shall not be offset. If the assets invested by the Group to the joint venture or associatedenterprise constitute the business, and the investor thereupon obtains the long-term equity investment but fails to obtain the control right, the fairvalue of business launched is taken as the initial investment cost of newly long-term equity investment, and the difference between the initial
investment cost and book value of business launched shall be included into the current profits and losses in full. If the assets sold by the Group tothe joint venture or associated enterprise constitute the business, the difference between the consideration acquired and the book value of businessshall be fully included into the current profits and losses. If the Group's assets purchased from the joint venture or associated enterprise constitutethe business, accounting treatment shall be conducted in accordance with the provisions of the Accounting Standards for Business Enterprises No.20 - Enterprise Merger, and the gains or losses related to the transaction shall be fully recognized.
When the net loss of the invested unit that shall be shared is recognized, the book value of the long-term equity investment and other long-term equity that actually constitute the net investment of the investee shall be written down to zero. Besides, if the Group has the obligation to bearthe additional loss for the invested unit, the estimated liabilities will be recognized according to the estimated obligation that shall be assumed andincluded into the current investment losses. In case the net profit is realized by the invested unit later, after the Group makes up the unrecognizedloss amount shared by the income amount shared, it's required to recover the revenue recognition amount shared.(c) Acquisition of minority shareholders' equitiesWhen compiling the consolidated financial statements, the Company shall adjust the capital reserve due to the difference between the newly-increased long-term equity investment from the purchase of the minority interest and the net asset shares enjoyed according to the new shareholdingproportion of the subsidiary continuously calculated from the purchase date (or the merger date); in case that the capital reserves are not sufficientto offset, the retained earnings shall be adjusted.(d) Disposal of the long-term equity investmentThe parent company partially disposes the long-term equity investment of subsidiary when the control right is not lost in consolidated financialstatement. The difference between disposal price and subsidiaries' net assets enjoyed corresponding to the disposal of long-term equity investmentwill be included into the shareholders' equities; supposing that the parent company loses the control right for the subsidiary due to the partialdisposal of the long-term equity investment for the subsidiary, it shall be dealt with in accordance with the relevant accounting policies as specifiedin the Note 5 6 "Preparation Method for Consolidated Financial Statement" (2).As for the disposal of the long-term equity investment under other circumstances, the difference between the book value of the disposedequity and the actually-obtained price shall be included into the current profits and losses.For long-term equity investments under the equity method, if the residual equities after disposal shall still be accounted by the equity method,upon the disposal, the part of other comprehensive income that was originally included into shareholders' equities shall be accounted for on thesame basis as the invested unit's direct disposal of relevant assets or liabilities in a corresponding proportion. However, the owners' equities thatare recognized based on the changes in other owners' equities shall be carried forward to the current profits and losses in proportion, except for thenet profits and losses, other comprehensive incomes and profit distribution of investees.For the long-term equity investments under the cost method, if the residual equities after disposal are still under the cost method, theaccounting treatment of other comprehensive incomes confirmed under the equity method or standards of recognition and measurement of financialinstruments before obtaining control of the invested unit shall be conducted on the same basis of the invested unit's directly disposal of the relevantassets or liabilities, and it shall be carried forwarded to the current profits and losses in proportion; except for the net profits and losses, othercomprehensive incomes and profit distribution, the changes in other owners' equities in the invested unit's net assets which are accounted andrecognized by the equity method shall be carried forward to the current profits and losses in proportion.If the Group loses control of the invested unit due to disposal of partial equity investment, and the residual equities after disposal may exertcommon control or significant impact on the invested unit while preparing individual financial statements, the equity method will be adopted foraccounting, and it will be measured by the equity method and adjusted with equity method since obtaining; if the residual equities after disposalcannot implement the common control or exert significant impact on the invested unit, the relevant provisions in respect of the standards ofrecognition and measurement of financial instruments shall be referenced for the accounting treatment, and the difference between the fair valueand book value shall be included into the current profits and losses on the date of losing control. Before the Group acquires the control of theinvested unit, for other comprehensive incomes confirmed under the equity method or standards of recognition and measurement of financialinstruments, when the control of the invested unit is lost, the accounting treatment shall be conducted on the same basis of the invested unit's directdisposal of relevant assets or liabilities; the changes in the other owners' equities of the invested unit's net assets other than the net profits andlosses, other comprehensive incomes and profit distribution calculated and confirmed by the equity method shall be settled and transferred to thecurrent profits and losses in proportion. Among which, if the residual equities after disposal are calculated by the equity method, othercomprehensive incomes and other owners' equities shall be carried forward in proportion; if the residual equities after disposal are to be conducted
with accounting treatment in accordance with the standards of recognition and measurement of financial instruments, other comprehensive incomesand other owners' equities shall be carried forward.If the Group loses the common control or significant impact on the invested unit due to disposal of partial equity investment, the residualequities after disposal shall be accounted according to the standards of recognition and measurement of financial instruments. The differencebetween the fair value and book value shall be included into the current profits and losses on the date of losing common control or significantimpact. As for other comprehensive incomes as recognized when the original equity investment is under the equity method, it shall be subject tothe accounting treatment on the same basis of the assets or liabilities which are directly disposed by the invested unit when the equity method isabandoned. The owners' equities which are recognized by the invested unit due to the changes in other owners' equities, except for the net profitsand losses, other comprehensive incomes and profit distribution of investees, will be reckoned in the current investment incomes when the equitymethod is abandoned.The Group will take the multiple transactions to dispose the subsidiaries' equity investment step by step until lose its control right. When theabove-mentioned transactions belong to the package deal, the transactions will be subject to the accounting treatment as an equity investment ofsubsidiaries and transaction which has lost the control right. The difference between the disposal price and the corresponding book value of long-term equity investment will be recognized as the other comprehensive incomes before losing the control right, which will be reckoned in thecurrent profits and losses when the control right is lost.
16. Fixed assets
(1) Recognition conditions
Fixed assets refer to tangible assets held for producing commodities, providing labor service, leasing or operation management with servicelife of more than 1 fiscal year. The fixed assets can be confirmed only when the relevant economic interests are possible to flow into the Groupand its costs can be measured reliably. The initial measurement of fixed assets shall be carried out according to the cost and considering theexpected influence of the discard expenses.
(2) Depreciation method
From the following month when fixed assets reach the estimated applicable state, the depreciation is withdrawn within its service life withthe straight-line method. Service life, expected net residual value, and annual depreciation rate of all kinds of fixed assets are as follows:
| Categories | Depreciation method | Depreciation life (years) | Residual rate | Annual depreciation rate |
| Buildings and structures | Straight-line method | 20-30 | 3%-10% | 3.00%-4.85% |
| General equipment | Straight-line method | 3-5 | 3%-10% | 18.00%-32.33% |
| Special equipment | Straight-line method | 10 | 3%-10% | 9.00%-9.70% |
| Transport facilities | Straight-line method | 4-10 | 3%-10% | 9.00%-24.25% |
The expected net residual value refers to the expected amount that the Group may obtain from the current disposal of fixed assets afterdeducting the expected disposal expenses at the expiration of its expected service life.
(3) Impairment test method and counting and withdrawing method of the impairment provision of fixed assets
See more details about the impairment test method and the withdrawing method of impairment provision of fixed asset in Note 5 21"Impairment of Long-term Assets".
(4) Other remarks
The subsequent expenditures related to fixed assets shall be included into fixed assets cost, and the derecognition of the book value of thesubstitution part shall be carried out if economic benefits related to such fixed assets may flow in and its cost can be reliably measured. Othersubsequent expenditures, except for this, shall be included into the current profits and losses once occurred.As for each component constituting fixed assets, in case that they have different service life or provide economic interest for the group bydifferent ways and apply to different rates of depreciation and depreciation methods, the Group confirms each component as single fixed asset,respectively.When the fixed assets are under disposal state or it is estimated that no economic benefits can be produced through usage or disposal, suchfixed asset is confirmed to be derecognized. The difference of the amount left as the book value and relevant taxes are deducted from the disposalincome obtained from the sale, transfer, discard or damage of the fixed asset shall be included into the current profits and losses.
The Group shall review the service life, expected net residual value and depreciation method of the fixed assets at least by the end of the year.In case of any change, it shall be deemed as changes in accounting estimate.
17. Construction in progress
The cost of construction in progress shall be confirmed as per actual engineering expenditures, including various project expenditures underconstruction, capitalized borrowing expense for making the project reach the expected serviceable condition, and other relevant costs. Theconstruction in progress shall be transferred to the fixed assets when it reaches the expected serviceable condition.
See more details about the impairment test method and the withdrawing method of impairment provision of construction in progress in Note5 21 "Impairment of Long-term Assets".
The income and cost of the Group's external sales of products or by-products produced before the fixed assets reach the expected serviceablecondition, the company should carry out accounting treatment separately according to Accounting Standards for Business Enterprises No. 14 -Revenue and Accounting Standards for Business Enterprises No.1-Inventory, which shall be included into the current profits and losses.
18. Borrowing expenses
Borrowing expenses include interest on borrowings, amortization of discounts or premiums, auxiliary costs and exchange differences arisingfrom foreign currency borrowings, etc. For the borrowing expense generated from the acquisition and construction or production that can bedirectly attributable to the assets that meet capitalization conditions, the capitalization shall be started when the asset expenditure or the borrowingexpense has incurred, or the acquisition and construction or production activities necessary for making the assets available for expected serviceableor marketable state have been started; capitalization shall be stopped when the assets under acquisition and construction or production that meetcapitalization conditions reach the expected serviceable condition or marketable state. Other borrowing expenses are recognized as those in thecurrent period.
The amount can be capitalized after the actual interest expense generated from the specific borrowing deducting the interest revenue from theunused loan funds deposited in the bank or investment income obtained from the temporary investment in the current period; for the generalborrowing, the capitalized amount will be determined after the weighted average of excessive part of accumulative asset expenditures comparedto the asset expenditure of special borrowing multiplied by the capitalization rate of the general borrowing occupied. The capitalization rate isdetermined based on the weighted average interest rate of general borrowing.
In the capitalization period, all exchange differences of special foreign currency borrowings shall be capitalized; exchange difference ofgeneral foreign currency borrowing shall be included into the current profits and losses.
Assets meeting capitalization conditions refer to the fixed assets, investment properties, inventories, etc. which can reach the expectedserviceable state or marketable state after quite a long time of acquisition and construction or production.
If assets meeting capitalization conditions are interrupted abnormally in the process of acquisition and construction or production, and theinterruption lasts for more than 3 months, the capitalization of borrowing expense shall be suspended till the asset acquisition and construction orproduction restarts.
19. Intangible assets
(1) Intangible assets
Intangible assets refer to the identifiable non-monetary assets that have are owned or controlled by the Group and have no physical form.The initial measurement of intangible assets shall be conducted according to its costs. Expenditures related to intangible assets shall beincluded into the cost of intangible assets if the relevant economic benefits may flow in the Group and its cost can be reliably measured. Otherexpenditures, except for this, shall be included into the current profits and losses once occurred.
Land use right acquired is usually calculated as an intangible assets. As for buildings such as self-developed and constructed workshops, therelated land use right expenditure and construction cost of the buildings shall be calculated as intangible assets and fixed assets respectively. Asfor purchased buildings and structures, the related prices are distributed between land use right and the buildings. If it is difficult to distribute themreasonably, all of them shall be disposed as fixed asset.As for intangible assets with a limited service life, the accumulative amount after deducting the expected net residual value and the accruedimpairment provisions with original value since the serviceable date, it is amortized with the straight-line method within the expected service life.Intangible assets with undetermined service life will not be amortized.Among them, the service life and amortization method of intangible assets of intellectual property right are as follows:
| Item | Amortization period (years) | Amortization method |
Land use right
| Land use right | 43-50 | Straight-line method |
| Software | 2-10 | Straight-line method |
| Trademark use right | 10 | Straight-line method |
At the end of each period, the service life of intangible assets with limited service life and the amortization method for them will be rechecked.Changes of them will be regarded as changes of accounting estimate. In addition, the service life of intangible assets with undetermined servicelife will be rechecked. If there is evidence manifesting that an intangible asset can bring economic benefits for the enterprise within a foreseeableperiod, then its service life will be estimated and it will be amortized according to the amortization policy for intangible assets with limited servicelife.
(2) R&D expenditure
Expenditures on the internal R&D items of the Group are divided into research expenditure and development expenditure.
Research expenditure is included into the current profits and losses at the time of occurrence.
Development expenditure that can meet the following conditions will be recognized as intangible assets, while those cannot meet will beincluded into the current profits and losses.-Complete the intangible asset so as to make the use or sale of it technically feasible;-Have the intention to complete the intangible asset and use or sell it;-The way that an intangible asset generates economic benefits is to certify that the products produced with the intangible asset has market or theintangible asset itself has market, or to certify its usability when it will be used internally;-There are enough technology, financial resources and other resources to support finishing the development of an intangible asset, and it iscapable of using or selling this intangible asset;
-Expenditure within the development stage of this intangible asset can be measured reliably.If it is unable to distinguish the research expenditure from development expenditure, both R&D expenditures will be included into the currentprofits and losses.
(3) Impairment test method and counting and withdrawing method of the impairment provision of intangible assetsSee more details about the impairment test method and the withdrawing method of impairment provision of intangible assets in Note 5 21"Impairment of Long-term Assets".
20. Long-term unamortized expenses
Long-term unamortized expenses are expenses that have occurred but shall be borne during the reporting period and subsequent periods witha sharing period of more than one year. Long-term unamortized expenses of the Group mainly include improvement expenditure of fixed assetsleased for operation. Long-term unamortized expenses are amortized on a straight-line basis over the expected benefit period.
21. Impairment of long-term assets
As for fixed assets, construction in progress, right-of-use assets, intangible assets with a limited service life, investment properties measuredby cost measurement, long-term unamortized expenses, and non-current and non-financial assets such as the long-term equity investment andgoodwill of subsidiaries, joint ventures and associated enterprises, the Group shall determine whether there is any sign of impairment on thebalance sheet date. If there are signs of impairment, the recoverable amount shall be estimated and impairment test shall be carried out. Goodwill,intangible assets with undetermined service life and intangible assets that have not reached the serviceable state, whether there is any sign ofimpairment, shall be subject to impairment test every year.
If the impairment test result shows that the recoverable amount of assets is lower than the book value thereof, impairment provision shall beaccrued according to the difference and included into impairment losses. The recoverable amount shall be determined as the net amount obtainedby the fair value of asset - disposal expense, or as the present value of the estimated future cash flow of assets, whichever is higher. The fair valueof the asset is determined according to the price in the sales agreement in the fair transaction; if there is no sales agreement but there is an activemarket of assets, the fair value is determined according to buyer's price of the asset; if there is no sales agreement and an active market of assetsdoes not exist, the fair value of assets shall be estimated based on the best information obtained. The disposal expenses include the legal feesrelated to the asset disposal, relevant taxes, carriage expenses as well as direct expenses for achieving the marketable state status. The presentvalue of the estimated future cash flow of assets shall be determined by the discounted amount by an appropriate discount rate, on the basis of theestimated future cash flow generated during the continuous usage and final disposal of assets. The impairment provision shall be calculated andrecognized on the basis of the single asset. If it is hard to estimate the recoverable amount of the single asset, the recoverable amount of the assetgroup shall be determined according to the asset group by the asset group to which the asset belongs. Asset group refers to the minimum assetportfolio that is capable of generating cash inflow independently.
For the goodwill separately presented in the financial statements, during the impairment test, the book value of goodwill shall be apportionedto the asset group or asset group portfolio expected to be benefited from the synergistic effect of enterprise merger. If the test results show that therecoverable amount of the asset group or asset group portfolio containing the apportioned goodwill is lower than its book value, the correspondingimpairment loss shall be recognized. The amount of impairment loss firstly offsets the book value of goodwill apportioned to the asset group orasset group portfolio, and then offsets the book value of other assets in proportion according to the proportion of the book value other than goodwillin the asset group or asset group portfolio.
Once the above-mentioned asset impairment losses are recognized, the part of which can be recovered shall not be reversed in subsequentperiods.
22. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer commodities to customers for the received or receivable consideration fromcustomers. In the event that the customer has paid the contractual consideration or the Group has obtained the unconditional collection right beforeit transfers the commodities to customers, the Group shall present the received or receivable account as contract liabilities with regard to the actualpayment by customers and the due payment, whichever happens earlier. Contract assets and liabilities under the same contract are listed in netamount, and those under different contracts shall not be offset.
23. Employee remuneration
The Group's employee remuneration mainly includes short-term employee remuneration, post-employment benefits, termination benefits andother long-term employee benefits. Including:
Short-term employee remuneration mainly includes salary, bonus, allowance and subsidy, employee benefits expense, medicare premium,maternity premium, occupational injuries premium, housing accumulation fund, labor union expenditure, personnel education fund, non-monetarybenefit, etc. During the accounting period in which the Group's employees provide services for the Group, actual short-term employee remunerationincurred shall be recognized as the liabilities and included into the current profits and losses or relevant asset costs. And the non-monetary benefitsshall be measured at fair value.Post-employment benefit mainly includes basic endowment insurance, unemployment insurance, and annuity. The plan of post-employmentbenefit includes the defined contribution plan. In case that the defined contribution plan is adopted, corresponding amount which shall be depositedwill be included into the relevant asset costs or current profits and losses at the time of occurrence.Labor relation with employees shall be cancelled before the employee's labor contract expires, or suggestion on giving compensation shall beproposed for the purpose of encouraging employees to voluntarily accept downsizing. When the Group cannot unilaterally withdraw terminationbenefits provided for cancellation of labor relation plan or downsizing suggestion and on the date when the Group confirms the cost related torestructuring involving payment of termination benefits, whichever is the earlier, the employee remuneration liabilities caused by terminationbenefits shall be recognized and included into the current profits and losses. However, if it is expected that the termination benefits cannot be fullypaid within twelve months after the annual reporting period is over, it shall be handled according to other long-term employee remuneration.The same principle for termination benefits described above shall be adopted for the plan of employee internal retirement. Staff salary andsocial insurance premium to be paid by the Group for the early retired employee from the date of stopping providing services to the date of normalretirement are included into the current profits and losses (termination benefit) if the estimated liabilities recognition conditions are met.
24. Estimated liabilities
If the obligation related to contingencies satisfies the following conditions at the same time, the Group shall recognize it as the estimatedliabilities: ① This obligation is the current obligation undertaken by the Group; ② Performance of this obligation may make economic benefitsflow out of the enterprise; ③ Amount of this obligation can be reliably measured.
On the balance sheet date, consider the risks, uncertainty, time value of money and other factors related to contingencies, conductmeasurement for estimated liabilities subject to the optimal estimate value of expenditures needed for the fulfillment of the related existingresponsibilities.
The necessary expenditure has a contiguous range, and within this range, all kinds of results have the same possibility to occur. The optimalestimate is determined according to the median of this range. In other circumstances, the optimal estimate is treated as below:
- If the contingency involves with a single item, then the optimal estimate will be determined based on the amount that is most likely to occur.- If the contingency involves with several items, then the optimal estimate will be determined based on all possible results and theirprobabilities.
If all or part of the expenditure necessary for paying off estimated liabilities is compensated by the third party, the compensation amount shallbe confirmed separately as an asset when confirming it may be recovered. Confirmed compensation amount shall not exceed the book value ofestimated liabilities.
(1) Loss contract
The loss contract refers to a contract whose performance of the contractual obligations will inevitably incur costs in excess of the expectedeconomic benefits. When an enforceable contract becomes a loss contract, for which the liability can conform to the aforesaid estimated liabilitiesconfirmation conditions, confirm the part the estimated losses of the contract surpass the confirmed impairment loss (if any) of the underlyingasset in the contract as estimated liability.
(2) Restructuring obligations
It shall determine the estimated liabilities amount according to the direct expenditures related to the restructuring which has detailed, formaland publicly stated restructuring plan and which are in line with the confirmation conditions of the aforesaid estimated liabilities. The restructuringobligation related to partially-sold business will be recognized to be the associated obligation only when the Group promises to sell partialbusinesses (namely, signs the binding-force sales agreement).
25. Share-based payment
(1) Accounting treatment of share-based payment
A share-based payment is a transaction that grants the equity instruments or assumes a liability determined on the basis of the equityinstruments in order to obtain services from employees or other parties. Share-based payments are divided into equity-settled share-based paymentsand cash-settled share-based payments.(a) Equity-settled share-based payment
Equity-settled share-based payments in exchange for services provided by employees are measured at the fair value with the equityinstruments granted to the employees at the grant date. The amount of the fair value is included into the relevant cost or expense based on theoptimal estimate of the number of vesting equity instruments in case of completing the service within the waiting period or meeting the requiredperformance conditions; when the vesting right is granted immediately, the relevant cost or expense is included on the grant date according to thestraight-line method, and the capital reserves shall be increased accordingly.
On each balance sheet date during the waiting period, the Group makes the optimal estimate based on the latest information such as thechange in the number of employees with vesting rights, and corrects the number of equity instruments that are expected to be vested. The impactof the above estimates is included into the current relevant cost or expense, and the capital reserves shall be adjusted accordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if the fair value of other parties' services can bereliably measured, the fair value of other parties' services is measured at the fair value on the date of acquisition; if the fair value of other parties'services cannot be reliably measured, but the fair value of equity instruments can be measured reliably, it shall be measured at the fair value of theequity instrument on the acquisition date, and is included into the relevant cost or expense, and increases the shareholders' equities accordingly.(b) Cash-settled share-based payment
The cash-settled share-based payment is measured at the fair value of the liabilities determined by the Group based on shares or other equityinstruments. If the vesting right is granted immediately after the grant, the relevant cost or expense will be included on the grant date, and theliabilities increased accordingly; if the service within the waiting period must be completed or the required performance conditions are met, thefair value of the liabilities assumed by the Group is based on the optimal estimate of the vesting rights on each balance sheet date of the waitingperiod. The services obtained in the current period are included into the cost or expense, and the liabilities are increased accordingly.
The fair value of the liability is re-measured at the balance sheet date and the settlement day before the settlement of the relevant liabilities,and the change shall be included into the current profits and losses.
(2) Accounting treatment related to the modification and termination of share-based payment plan
When the Group modifies the share-based payment plan, if the modification increases the fair value of the equity instruments granted, theincrease in the fair value of the equity instruments is recognized accordingly. The increase of the fair value of equity instruments refers to thedifference between the fair value of the equity instruments before and after the modification on the modification day. If the modification reducesthe total fair value of the share-based payment or adopts other methods that are not conducive to the employee, the service obtained will continueto be accounted for, as if the change has never occurred, unless the Group cancels some or all of the equity instruments granted.
During the waiting period, if the granted equity instrument is cancelled, the Group will cancel the granted equity instrument as an acceleratedexercise, and the amount to be recognized in the remaining waiting period will be immediately included into the current profits and losses, and thecapital reserves shall be recognized at the same time. If the employee or other party can choose to meet the non-vesting conditions but fails to meetin the waiting period, the Group will treat it as a cancellation of the equity instrument.
(3) Accounting treatment of the share-based payment transactions involving the Group and the shareholders or actual controllers of the Company
For share-based payment transaction involving the Group or the Company's shareholders or actual controller, if either settlement enterpriseor enterprise accepting service is inside the Group or outside the Group, the accounting treatment shall be conducted in the consolidated financialstatements of the Group according to the following regulations:
-Where the settlement enterprise makes calculation by its own equity instruments, the share-based payment transaction shall be treated as theequity-settled share-based payment; in addition, it shall be handled as a cash-settled share-based payment.
-If the settlement enterprise is an investor of a service enterprise, it shall be recognized as the long-term equity investment of the serviceenterprise according to the fair value of the equity instrument at the grant date or the fair value of the liability to be assumed, and the capitalreserves (other capital reserves) or liabilities shall be recognized.
-If the enterprise accepting service does not have a settlement obligation or the equity instruments granted to the enterprise employees are itsown equity instrument, such share-based payment transaction shall be treated as the equity-settled share-based payment. If the enterprise acceptingservice has a settlement obligation and the equity instruments granted to the enterprise employees are not its own equity instrument, such share-based payment transaction shall be treated as the cash-settled share-based payment.
The share-based payment transactions between the enterprises within the Group, if the acceptance services enterprise and the settlemententerprise are not the same enterprise, and the confirmation and measurement of the share-based payment transaction in individual financialstatements of the acceptance service enterprise and the settlement enterprise shall be compared with the above principles.
26. Revenue
Accounting policies adopted for revenue recognition and measurement
Revenue is the total inflow of economic benefits that the Group has formed in its daily activities that will result in an increase in shareholders'equities and has nothing to do with the capital invested by shareholders. Where the contract between the Group and its customers can meet thefollowing conditions at the same time, the revenue shall be confirmed when the customer owns the relevant control right of the commodity(including labor service, the same below): all concerned parties have approved the contract and promised to fulfill their respective obligations; thecontract has specified rights and obligations of each concerned party related to commodity transfer or labor provision; the contract has clearpayment terms related to the transferred commodities; the contract is of the commercial essence, which means that performance of the contractwill change the risk, time distribution or amount of future cash flow of the Group; the consideration that the Group is entitled to obtain due to thetransfer of commodities to customers is likely to be recovered. To obtain the control right of relevant commodities means to be able to lead theuse of the commodities and obtain almost all economic benefits therefrom.
On the beginning date of the contract, the Group identifies the individual performance obligation specified in the contract and amortizes thetransaction price to each individual performance obligation based on the relative proportion of the individual sales price of the commodityguaranteed in individual performance obligation. Variable consideration, significant financing part in the contract, non-cash consideration,customer consideration payable, etc. have been taken into account the transaction price.
For contracts with quality assurance clauses, the Group analyzes the nature of the quality assurance provided by them. If the quality assuranceprovides a separate service in addition to assuring customers that the commodities sold meet the established standards, the Group regards it as asingle performance obligation.
Transaction price is the consideration amount the Group is expected to be entitled to receive for the transfer of commodities or services tocustomers, excluding payments received on behalf of third parties. The transaction price recognized by the Group does not exceed the amount forwhich it is highly probable that the accumulated recognized revenue will not be reversed significantly when the relevant uncertainty is eliminated.
As for each individual performance obligation in the contract, if one of the following conditions is met, the Group shall confirm the transactionprice which is amortized into the individual performance obligation based on the performance progress within a relevant performance period asthe revenue: the customer obtains and consumes the economic benefits while the Group fulfills the performance obligation; the customer managesto control the commodities in process while the Group fulfills the performance obligation. Commodities produced during the performance periodhave irreplaceable purposes and the Group has the right to receive payment for the performance part which has been completed so far during theentire contract period. The performance progress shall be confirmed based on the nature of commodities transferred by virtue of the input methodor the output method. When the performance progress cannot be confirmed reasonably, if it is predicted that the incurred cost of the Group can becompensated, the revenue shall be confirmed based on the incurred cost amount until the performance progress can be confirmed reasonably.
If one of the above conditions cannot be met, the Group confirms the transaction price amortized to the individual performance obligation atthe time when the customer obtains the control right of relevant commodities as the revenue. When judging whether the customer has obtained thecontrol right of the commodity, the Group can consider the following signs: the enterprise has the current collection right of the commodity,namely the customer is responsible for current payment obligation of the commodity; the enterprise has transferred the legal ownership of thecommodity to the customer, namely the customer has possessed the legal ownership of the commodity; the enterprise has transferred the realcommodity to the customer, namely the customer has possessed the real commodity; the enterprise has transferred main risks and rewards of thecommodity to the customer, namely the customer has obtained the main risks and rewards related to the ownership of the commodity; the customerhas accepted the commodity; other signs indicating that the customer has obtained the control right of the commodity.
For sales with sales return clauses, when customers obtain control over related commodities, the Group recognizes revenue according to theconsideration amount expected to be received due to the transfer of commodities to customers (i.e., excluding the amount expected to be refundeddue to sales return), and recognizes liabilities as per the amount expected to be refunded due to sales return. Simultaneously, according to theexpected book value of the returned commodities at the time of transfer, the balance after deducting the expected cost of recovering thecommodities (including the impairment of the value of the returned commodities) is recognized as an asset, and the net cost of the above assets iscarried forward according to the book value of the transferred commodities at the time of transfer. On each balance sheet date, the Group re-estimates the future sales returns, and if there is any change, it will be treated as a change in accounting estimates.Supor's selling of commodities such as cookware and small domestic appliances is a type of performance obligation at a certain time point,of which the revenue is recognized when the control over the commodities has been transferred to the customer. According to the agreement inthe sales contract, Supor mainly recognizes the control over commodity as having been transferred to the customer and recognizes relevantcommodity revenue when such commodity has left Supor's warehouses or its specified warehouses, delivered to the customer with acceptancereceipt issued, or such commodity has been delivered on board to the sea transport carrier with the customs declaration for export and bill of ladingobtained.
27. Contract cost
The incremental cost incurred by the Group to obtain the contract and expected to be recovered shall be recognized as an asset as the contractacquisition cost. However, if the amortization period of the asset does not exceed one year, it shall be included into the current profits and lossesat the time of occurrence.
In the event that the cost incurred for the performance of the contract does not fall within the scope of the Accounting Standards for BusinessEnterprises No. 14 - Revenue (Revised in 2017) and meets the following conditions at the same time, it shall be recognized as an asset as thecontract performance cost: ① The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturingexpenses (or similar expenses), costs borne by the customer and other costs only incurred by the contract; ② The cost increases the Group'sresources to fulfill its performance obligations in the future; ③ The cost is expected to be recovered.
Assets recognized for contract acquisition cost and assets recognized for contract performance cost (hereinafter referred to as "assets relatedto contract cost") shall be amortized on the same basis as the revenue recognition of commodities or services related to such assets and includedinto current profits and losses.
Where the book value of assets related to contract costs is higher than the difference between the following two items, the Group shallwithdraw the impairment provisions of the excess part and recognize it as the asset impairment loss:
-Residual consideration expected to be obtained arising from the transfer of commodities or services related to the assets by the Group;
-Cost estimated to be occurred for the transfer of the relevant commodities or services.
28. Government subsidies
Government subsidies refer to monetary assets and non-monetary assets obtained by the Group from the government, excluding the capitalinvested by the government as the investor with enjoying corresponding owners' equities. Government subsidies are divided into governmentsubsidies concerning assets and government subsidies concerning benefits. The government subsidy that is obtained by the Group used forpurchasing or acquisition and construction, or forming the long-term assets by other ways, which is confirmed the government subsidies concerningassets; Other government subsidies shall be defined as the government subsidies concerning benefits. If the government document does not clearthe subsidy object, the subsidies will be divided based on the following modes into government subsidies concerning benefits and governmentsubsidies concerning assets: ① If the particular item of the subsidies is clear in the government document, it shall make a division according tothe relative proportion of expense amount of the formed assets in the budget of the particular item and the expense amount included into the cost,review the division ratio at each balance sheet date and make changes if necessary; ② In the government document, for general terms only for thepurpose without specifying the particular item, it will be used as the government subsidies concerning benefits. If government subsidies aremonetary assets, they shall be measured according to the amount received or receivable. If not, they shall be measured according to their fair value;if their fair value cannot be reliably obtained, they shall be measured according to their nominal amount. The government subsidies measured bythe nominal amount shall be directly included into the current profits and losses.
When the Group actually receives the government subsidies, it shall be recognized and measured as the amount received. However, for theend of the period, there are conclusive evidences that it can meet the relevant conditions stipulated by the financial support policy, and it is expectedthat the financial support funds can be received, it shall be measured according to the amount receivable. The government subsidies measured asthe amount receivable shall comply with the following conditions: ① The subsidy receivable has been recognized by the competent governmentdepartment, or may be reasonably calculated according to the relevant provisions of the formally published financial fund management method,and the estimated amount is free of significant uncertainty; ② It is based on the initiatively published financial support project by the local financialdepartment and its financial fund management method in accordance with the regulations of the Decree of Government Information Openness,and this management method shall be favorable to the public (any enterprise qualified can apply), not just to the specified companies; ③ Therelevant subsidy documents have clearly promised the appropriation period, and the appropriation of this fund shall be safeguarded by the relevantfinancial budget, so it can be reasonably guaranteed that it can be received within the specified period; ④ Other relevant conditions that shall besatisfied (if any) based on the specific circumstances of the Group and the grant.
If the government subsidies concerning assets are recognized as deferred incomes and are included into the current profits and losses byinstallments in a reasonable and systematic way within the service life of underlying assets. Government subsidies concerning benefits used tocompensate future relevant costs or losses will be recognized as deferred income, and included into the current profits and losses during the periodwhen the related costs or losses are recognized; those used to compensate relevant costs or losses that have occurred will be included into thecurrent profits and losses directly.
At the same time, it includes the government subsidies related to assets and incomes, and separates different parts for accounting treatment;for those hard to be differentiated, it shall be taken as government subsidies concerning benefits as a whole.
The government subsidies concerning daily activities of the Group shall be included into other incomes, or used to offset the relevant costsaccording to the economic business nature. government subsidies not concerning daily activities will be included into the non-operating incomeand expenditure.
If the government subsidies confirmed need to be returned and there is the deferred income balance concerned, the book balance of relevantdeferred incomes shall be offset against, but the excessive part shall be included into the current profits and losses; In other circumstances, theyshall be included into the current profits and losses directly.
29. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current period and previous periods shall be measuredby the expected amount of income tax payable (or returnable) calculated in accordance with the provisions of the tax law. The taxable income onwhich the current income tax expenses are calculated shall be calculated after the corresponding adjustment of the pre-tax accounting profit in thecurrent reporting period in accordance with the relevant tax law.
(2) Deferred income tax assets/deferred income tax liabilities
The difference between the book value of some assets and liabilities and their tax bases, and the temporary difference caused by the differencebetween the book value of the items that are not recognized as assets and liabilities but whose tax bases can be determined according to the taxlaw, shall be used to recognize deferred income tax assets and deferred income tax liabilities with the balance sheet liability method.
For taxable temporary differences related to the initial recognition of goodwill and the initial recognition of assets or liabilities arising fromtransactions that are neither enterprise merger nor affect accounting profit and taxable income (or deductible loss) at the time of occurrence, therelevant deferred income tax liabilities shall not be recognized. In addition, for taxable temporary differences related to the investments ofsubsidiaries, associated enterprises and joint ventures, if the Group can control the time of reversal of the temporary differences, and the temporarydifferences are likely not to be reversed in the foreseeable future, the relevant deferred income tax liabilities shall not be recognized. Except forthe above exceptions, the Group shall recognize all other deferred income tax liabilities incurred in the taxable temporary differences.
For deductible temporary differences related to the initial recognition of assets or liabilities arising from transactions that are neither enterprisemerger nor affect accounting profit and taxable income (or deductible loss) at the time of occurrence, the relevant deferred income tax assets shallnot be recognized. In addition, for the deductible temporary differences related to the investment of subsidiaries, associated enterprises and jointventures, if the temporary differences are not likely to be reversed in the foreseeable future, or it is not likely to obtain the taxable income used to
offset the deductible temporary differences in the future, the relevant deferred income tax assets shall not be recognized. Except for the aboveexceptions, the Group shall recognize the deferred income tax assets arising from other deductible temporary differences to the extent that taxableincome is likely to be obtained for deducting the deductible temporary differences.For deductible losses and tax deductions that can be carried down in subsequent years, the corresponding deferred income tax assets shall berecognized with the limit of the future taxable income which is likely to be obtained for deducting the deductible losses and tax deduction.Deferred income tax assets and deferred income tax liabilities shall be calculated on the balance sheet date based on the applicable tax rateduring the period of expected recovery of relevant assets or clearing off relevant liabilities according to tax laws.On the balance sheet date, it is required to recheck the book value of the deferred income tax assets. If sufficient taxable income is not likelyto be obtained for deducting the interest of deferred income tax assets in the future, the book value of deferred income tax assets shall be writtendown. When it is very likely to obtain enough taxable income the write-down amount shall be reversed.
(3) Income tax expenses
The income tax expenses comprise the current income tax and deferred income tax.Moreover, the other current income tax and deferred income tax expenses or earnings shall be included into the current profits and losses,except for book value of goodwill which is adjusted on the basis of the deferred income tax caused by the enterprise merger, and that the currentincome tax and the deferred income taxes related to other comprehensive incomes or transaction or affairs of direct recording in the shareholders'equities are included into other comprehensive incomes or shareholders' equities.
(4) Offset of income tax
When it has the legal rights of settlement based on the net amount and it intends to make settlement based on net amount, obtain assets oroffset liabilities simultaneously, the current income tax assets and current income tax liabilities of the Group shall be presented based on the netamount after offsetting.When it has the legal rights of settling the current tax assets and current income tax liabilities based on the net amount, and the deferredincome tax assets and deferred income tax liabilities are related to income tax levied to the same subject of tax payment by the same tax collectionand administration department or are related to different taxpayer, but in each important period of deferred income tax assets and liabilities reversein the future, and when the involved taxpayer intend to settle the current income tax assets and liabilities based on the net amount or obtain assetsand pay off the liabilities at the same time, the Group's deferred income tax assets and deferred income tax liabilities shall be presented afteroffsetting.
30. Lease
Lease refers to a contract in which it is agreed that the lessor transfers the use right of assets to the lessee to get corresponding considerationwithin a certain period.
The Group evaluates whether the contract is used for lease or includes the lease on the contract commencement date. Where either partythereto assigns one or more use rights of the recognized assets under its control in a certain period to get consideration, the contract is a lease orincludes a lease.
In order to determine whether the contract transfers the right of controlling the use of an identified asset for a certain period of time, the Groupconducts the following assessment:
- Whether the contract involves the use of the identified asset. The identified asset may be explicitly specified by the contract, or implicitlyspecified when the asset is available for use by the customer, and the asset is physically distinguishable, or in the event that any production capacityof the asset or other part of the asset is physically indistinguishable, but it substantially represents the full capacity of the asset, and thus enablesthe customer to have access to almost all the economic benefits arising from the use of the asset. If the supplier of the asset has the substantialright of replacing the asset throughout the period of use, then the asset is not attributed to an identified asset;
- Whether the lessee has the right to acquire almost all the economic benefits arising from the use of the identified asset during the period ofuse;
- Whether the lessee has the right to direct the use of the identified asset during the period of use.
If the contract contains multiple separate leases at the same time, the lessee and lessor will split the contract and have each separate leaseseparately subject to accounting treatment. If the contract includes lease and non-lease parts at the same time, the lessee and the lessor will splitthem separately.
(1) Lessee
At the beginning date of the lease term, the Group recognizes the right-of-use asset and lease obligation of the lease. The right-of-use asset isinitially measured at cost, including the initial measurement amount of the lease obligation, the lease payment paid at or before the beginning dateof the lease term (less the amount of lease incentives already granted), the initial direct expenses incurred, and the costs expected to be incurred todemolish and remove the leased asset, restore the site where the leased asset is located or restore the leased asset to the state agreed upon in theprovisions of the lease.
The Group employs the straight-line method to depreciate right-of-use assets. If the ownership of the leased assets can be reasonablyconfirmed to be obtained upon expiry of the lease term, the depreciation of leased assets shall be withdrawn by the Group during the remainingservice life thereof; Otherwise, the leased asset is depreciated during the shorter of the lease term and the remaining service life of the leased asset.Impairment provisions for right-of-use assets shall be made in accordance with the accounting policies described in Note 5 21 "Impairment oflong-term assets".
The lease obligation is initially measured at the present value of the lease payment that has not been paid at the beginning date of the leaseterm, and the discount rate is the implicit rate of the lease. If the implicit rate of the lease cannot be determined, the incremental borrowing rate ofthe Group shall be adopted as the discount rate.
The Group calculates the interest expense of the lease obligation for each period of the lease term at a fixed periodic interest rate, which isincluded into the current profits and losses or relevant asset costs. The variable lease payment not included into the measurement of leaseobligations will be included into the current profits and losses or relevant asset costs when it actually occurs.
In case of any of following circumstances after the beginning date of the lease term, the Group will remeasure lease obligations at the presentvalue of the lease payment after any change:
-Where the amount payable anticipated changes according to the guaranteed residual value;
-Where the index or ratio used for recognizing the lease payment changes;
-Where there is a change in the Group's assessment results of the option of purchase, renewal option or option of termination of lease or theactual exercising of the termination of the renewal option or option of termination of lease is inconsistent with the original assessment result.
When the lease obligation is measured anew, the Group will adjust the book value of right-of-use assets accordingly. If the book value of theright-of-use asset has been reduced to zero, but the lease obligation still needs to be further reduced, the Group will include the remaining amountin the current profits and losses.
The Group chooses not to confirm the right-of-use asset and lease obligation for short-term lease (with a lease term not exceeding 12 months)and low-value asset lease as well as includes related lease payment into the current profits and losses or relevant asset costs in each period withinthe lease term pursuant to the straight-line method.
(2) Lessor
At the beginning date of the lease term, the Group divides leases into financing and operating leases. Financing lease refers to a lease in whichalmost all the risks and rewards related to the ownership of the leased asset are essentially transferred, regardless of whether the ownership isfinally transferred or not. The operating lease refers to the other leases except for the financing lease.
The Group, as the lessor, provides classification of subleases based on the right-of-use assets created by the original lease rather than theunderlying assets of the original lease. If the original lease is a short-term lease and the Group chooses to apply the simplified treatment of theabove short-term lease to the original lease, then the Group classifies the sublease as an operating lease.
Under financing leases, at the beginning date of the lease term, the Group confirms financing lease receivables for financing lease andderecognizes the financial leasing assets. The Group regards the net investment in a lease as the entry value of financing lease receivables at thetime of initial measurement of financing lease receivables. The net investment in a lease is the sum of the present value of unguaranteed residualvalue and lease receipt not received yet on the beginning date of the lease term which is subject to discounting at the interest rate implicit in thelease term.
The Group calculates and recognizes the Interest revenue in each period within the lease term according to a fixed periodic rate. Thederecognition and impairment of financing lease receivables shall be treated in accordance with the accounting policies described in Note 5 9
Financial Instruments and 10 Financial Assets Impairment. The variable lease payment which is not included into the net lease investment shallbe included into current profits and losses when it actually occurs.The lease receipts of operating lease are confirmed as rent revenue in each period within the lease term in light of straight-line method. TheGroup capitalizes the initial direct expenses incurred in connection with operating leases, apportioned them over the lease term on the same basisas the rent revenue recognition, and recorded into the current profits and losses by stages. The variable lease payment which is not included intothe lease receipt shall be included into current profits and losses when it actually occurs.
31. Related party
If one party controls or jointly controls the other party or imposes significant impact on the other party, and two or more parties are controlledor jointly controlled by one party, these parties are related parties. Related party can be individual or enterprise. An enterprise that is only controlledby the state but does not have other related party relationships does not constitute a related party.In addition, the Company also determines the Group or related parties of the Company in accordance with the Administrative Measures forthe Disclosure of Information of Listed Companies promulgated by the CSRC.
32. Segment reporting
See XVI, 1 "Segment Information" for details of accounting policies related to segment reporting for details.
33. Other important accounting policies and estimates
(1) Repurchased shares
If the Group reduces its capital by acquiring the shares of the Company with approval, then it shall reduce equities according to the totalamount of the face value of cancelled shares, and adjust owners' equities according to the difference between the price paid to purchase sharesback (including transaction cost) and the face value of shares. The part exceeding the total face value shall be used to write down capital reserve(share capital premium), surplus reserve and undistributed profit. If the price is lower than the total face value, then the part lower shall be addedwith capital reserve (share capital premium).
Shares repurchased by the Group shall be managed as treasury shares before they are cancelled or transferred; total expenditure of repurchasedshares shall be transferred as the cost of treasury shares.
When treasury shares are transferred, the part higher than their cost shall be transferred to increase capital reserve (share capital premium);the part lower than the cost of treasury shares shall write down capital reserve (share capital premium), surplus reserve and undistributed profit insequence.
If the Group repurchase shares for the reason of equity incentive, it shall treat all expenses on shares repurchase as treasury shares whilerepurchasing and make registration for future reference.
(2) Hedge accounting
Some financial instruments are used as hedging tools by the Group to avoid certain risks. For those hedges meeting requirements specified,the Group will deal with them by hedge accounting method. The hedge of the Group is fair value hedge. The hedge for foreign exchange risk offirm commitment is used as fair value hedge by the Group.
The hedging tool and the hedged item are formally specified by the Group at the beginning of hedge with written documents about the hedgingrelationship, risk management strategy and risk management objectives. In addition, the hedge effectiveness will be assessed continuously by theGroup from the beginning of hedge.
(a) Fair value hedge
The gains or losses from the hedging tool specified as fair value hedge with qualification are included into the current profits and losses.Otherwise, the gains and losses from non-transactional equity instruments (or their components) measured at the fair value with their changesincluded into other comprehensive incomes are included into other comprehensive income. The gains or losses formed from the hedging risks ofthe hedged item shall be included into the current profits and losses and the book value of the confirmed hedged items not measured at fair value
shall be adjusted simultaneously. The gains or losses from the hedged item that are measured at fair value are included into the current profits andlosses and other comprehensive income without book value adjusting.The hedge accounting is terminated when the hedging relationship is revoked by the Group, the hedging tool is expired or sold, the contractis terminated or exercised, or the condition is out of qualification.
(3) Fair value measurement
Fair value, refers to the price that market participant can obtain or needs to pay after selling an asset or transferring a liability, among theorderly transactions made on the measurement date. The Group measures relevant asset or liability and considers the characteristics of this assetor liability at fair value; supposes the selling of assets or transfer of liabilities by market participant are orderly transaction under current marketconditions; supposes the orderly selling of assets or transfer of liabilities are carried out in the main market of relevant assets or liabilities; supposesthe transaction is made in the most favorable market for relevant assets or liabilities when there is no main market. The Group adopts theassumptions that market participants use to maximum their economic benefits when they price assets or liabilities.
The Group judges whether the fair value at initial recognition equals to its transaction price according to transaction nature and thecharacteristics of relevant assets or liabilities; if the transaction price is not equal to the fair value, relevant gains or losses will be included into thecurrent profits and losses, unless otherwise specified by relevant accounting standards.
The Group adopts the valuation technique that is applicable to the current situation and has enough available data and other information tosupport. Mainly used valuation techniques include market approach, income approach and cost method. In the application of valuation techniques,relevant observable input values shall be used first, and unobserved input values can only be used when relevant observable input values cannotbe obtained or it is not feasible to obtain them.
Input values used by the Group for fair value measurement is divided into 3 levels. The first level of input values will be used first, and thenthe second level and the third level. First level of input values are the quotations of same assets or liabilities that can be obtained on the measurementdate and are not adjusted in the active market; the second level of input values are the direct or indirect observable input values of relevant assetsor liabilities other than the first level of input values; the third level of input values are the unobservable input values of relevant assets or liabilities.
The Group measures non-financial assets with fair value, considers market participant's ability to use this asset in the best way to generateeconomic benefits, or the ability to sell this asset to other market participants who can use this asset in the best way to generate economic benefits.To measure a liability with fair value, the Group supposes this liability is transferred to other market participants on the measurement date, andfurther exists after transfer, and the market participant, who is the transferee, performs obligations. To measure one's own equity instrument withfair value, suppose this equity instrument is transferred to other market participants on the measurement data, and further exits after transfer, andthe market participant, as the transferee, obtains relevant rights to this instrument and undertakes corresponding obligations.
34. Change of important accounting policies and estimates
(1) Change of important accounting policies
? Applicable □ Not applicableContent and reasons for changes in accounting policiesIn 2022, the Group implemented the relevant provisions and guidelines of in Accounting Standards for Business Enterprises issued by the Ministryof Finance in recent years, mainly including:
-Provisions of "Accounting treatment for enterprises to sell products or by-products produced before fixed assets reach the preset serviceable stateor during R&D" ("Accounting treatment for trial operation sales") in Interpretation No.15 of Accounting Standards for Business Enterprises (CK[2021] No.35) (Interpretation No.15);-Provisions in Interpretation No.15 "Judgement on Loss Contracts";-Provisions of "Accounting Treatment on Income Tax Impact of Dividends Related to Financial Instruments Classified as Equity Instruments byIssuers" in Accounting Standards for Business Enterprises Interpretation No.16 (CK [2022] No.31) (Interpretation No.16);-Provisions on "Accounting treatment of enterprises to change cash-settled share-based payments to equity-settled share-based payments" inInterpretation No.16.
The adoption of the requirements has not had a significant impact on the financial condition and operating results of the Group.
(2) Change of important accounting estimates
□ Applicable ? Not applicable
VI. Taxes
1. Main taxes and tax rates
| Tax | Tax base | Tax rate |
| VAT | The taxable revenue from sales of commodities or rendering of services | Taxable income is calculated at output tax rates of 0, 6%, 9%, and 13%, and VAT is calculated based on the difference after deducting the input tax allowable for the current period. |
| Urban maintenance and construction tax | VAT payable | 7% |
| Enterprise income tax | Taxable income | Corporate income tax rate is 25%. Shaoxing Supor, Zhejiang WMF and Hainan Supor E-Commerce Company are taxed at a preferential tax rate of 15%. Wuhan Recycling and Shanghai Marketing are taxed at a preferential tax rate of 20%.Overseas subsidiary Indonesian Company is taxed at a 22% rate, Supor Vietnam and AFS are taxed at 20%, and SEADA is taxed at 17%. |
| Education surcharge | VAT payable | 3% |
| Local education surcharge | VAT payable | 2% |
| Housing property tax | 1.2% of the residual value after deducting 30% of the original value of the property is calculated and paid in case of ad valorem; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue. | 1.2%、12% |
2. Tax preferences
Pursuant to GKHZ [2020] No. 32 document, Shaoxing Supor ejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd and ZhejiangWMF renewed the hi-tech enterprise qualification in 2022 and is entitled to enjoy the preferential tax rate of 15% for the three-year period startingfrom January 1, 2022.According to the Enterprise Income Tax Law of the People's Republic of China and its implementation regulations, the Notice on PreferentialPolicies for Enterprise Income Tax in Hainan Free Trade Port (CS [2020] No.31) as well other provisions, business income tax will be levied ata rate of 15% for encouraged industrial enterprises registered and substantially operating in the Hainan Free Trade Port from January 1, 2020 toDecember 31, 2024. Meeting the e-commerce in the encouraged industries catalogue, Hainan Supor E-Commerce Company applies the preferentialtax rate of 15% in 2022.
In accordance with the Announcement of the State Taxation Administration on Matters Related to the Implementation of the PreferentialIncome Tax Policies for the Development of Small and Low-profit Enterprises and Individual Business (State Tax [2021]-No. 8), from January 1,2021 to December 31, 2022, for the part of the annual taxable income of small and low-profit enterprises that does not exceed RMB 1 million, areduced rate of 12.5% shall be applied, and the corporate income tax shall be paid at a tax rate of 20%. Meanwhile, according to the Announcementof the Ministry of Finance and State Taxation Administration on Further Implementation of Preferential Income Tax Policies for Small and Micro-sized Enterprises (Finance and Taxation (2022)-No. 13), from January 1, 2022 to December 31, 2024, for the part of the annual taxable income ofsmall and low-profit enterprises that exceeds RMB 1 million but less than RMB 3 million yuan, a reduced rate of 25% shall be applied, and thecorporate income tax shall be paid at a tax rate of 20%. Among which, Wuhan Recycling and Shanghai Marketing meet the standards of small andlow-profit enterprises in 2022, therefore the preferential tax rate at 20% is applicable in 2022.
VII. Notes to Items of Consolidated Financial Statements
1. Monetary capital
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 56,591.47 | 71,122.80 |
| Cash in bank | 3,215,677,104.23 | 2,420,563,810.46 |
| Other monetary capitals | 347,407,212.05 | 233,417,484.21 |
| Total | 3,563,140,907.75 | 2,654,052,417.47 |
| Including: deposited overseas | 207,979,588.92 | 78,040,992.57 |
Other remarks:
Note: 1) On December 31, 2022, the bank deposits with restricted use were frozen at RMB 8,541.04 (December 31, 2021: RMB 263,468.43) forthe cancellation of the branch bank account, RMB 82,189.64 (December 31, 2021: none) for the change of industrial and commercial legalperson, RMB 12,546,000.00 (December 31, 2021: none) for the term deposits pledged by issuing bank acceptance bills, and the remaining bankdeposits of RMB 3,203,040,373.55 were not restricted,among them, more than three months term deposits of RMB 841,466,620.81.
2) As at December 31, 2022, other monetary capitals at the end of the period include RMB 254,129,233.86 (December 31, 2021: RMB150,545,967.12) of the security for restricted acceptance bills, RMB 975,570.02 (December 31, 2021: RMB 1,511,302.86) of the security for e-commerce platforms, RMB 58,000,000.00 (December 31, 2021: RMB 58,000,000.00) of the security for the deposits of the advance paymentfinancing business, and RMB 34,302,408.17 (December 31, 2021: RMB 23,360,214.23) of the non-restricted currency funds of the Alipay wallet,JD wallet, TikTok wallet, securities settlement accounts, futures settlement accounts and Youzan account, etc.
3) As at December 31, 2022, the monetary capital deposited by the Group in Vietnam amounts to RMB 193,083,117.24 (December 31, 2021:
equivalent to RMB 72,031,237.91); The monetary capital deposited in Singapore amounted to RMB 3,754,734.88 (December 31, 2021: amountedto RMB 2,195,848.27); the monetary capital deposited in Indonesia amounts to RMB 11,141,736.80 (December 31, 2021: equivalent to RMB3,813,906.39).
2. Transactional financial assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets measured at the fair value with their changes included into the current profits and losses | 431,382,527.79 | 180,312,742.31 |
| Including: | ||
| - Short-term financial products | 431,382,527.79 | 180,312,742.31 |
| Total | 431,382,527.79 | 180,312,742.31 |
Other remarks:
As at December 31, 2022, the financial assets measured at the fair value with their changes included into the current profits and losses are thefinancial products purchased by the Company, amounting to RMB 430,000,000.00 (December 31, 2021: RMB 180,000,000.00). These financialproducts with floating income, and linked to interest rates and exchange rates, etc., and the corresponding gains from changes in fair value, i.e.RMB 1,382,527.79 (December 31, 2021: RMB 312,742.31), are recognized at the end of the current period.
3. Notes receivable
(1) Details on categories
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 27,325,952.95 | 54,879,357.24 |
| Total | 27,325,952.95 | 54,879,357.24 |
Unit: RMB
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Including: | ||||||||||
| Notes receivable for provision for bad debts made on the basis of portfolio | 27,325,952.95 | 100.00% | 27,325,952.95 | 54,879,357.24 | 100.00% | 54,879,357.24 | ||||
| Including: | ||||||||||
| Portfolio: bank acceptance bill | 27,325,952.95 | 100.00% | 27,325,952.95 | 54,879,357.24 | 100.00% | 54,879,357.24 | ||||
| Total | 27,325,952.95 | 100.00% | 27,325,952.95 | 54,879,357.24 | 100.00% | 54,879,357.24 | ||||
If provision for bad debts for notes receivable is made based on the general model of expected credit losses, please disclose the relevant informationabout the provision for bad debts with reference to the disclosure of other receivables:
□ Applicable ? Not applicable
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
| Categories | Opening balance | Amount of changes in current period | Closing balance | |||
| Accrued | Collected or reversed | Written off | Others | |||
| Bank acceptance bill | ||||||
Wherein, important amounts of provision for bad debts collected or reversed in the current period:
□ Applicable ? Not applicable
(3) Notes receivables that the Company has pledged at the end of the period
As of December 31, 2022, the Group had no notes receivable pledged (December 31, 2021: None).
(4) Endorsed or discounted notes receivable undue at the balance sheet date at the end of the year
Unit: RMB
| Item | Closing balance derecognized | Closing balance not derecognized |
| Bank acceptance bill | 22,383,800.87 |
| Total | 22,383,800.87 |
Other remarks:
By December 31, 2022, Supor's undue and endorsed notes receivable of RMB 22,383,800.87 (December 31, 2021: RMB 53,979,357.24). havenot been recognized as notes transferred to the suppliers to settle the amount payable. This is mainly because that, according to the management,the risks and remunerations attached to the ownership of the notes have not been actually transferred. The book values of the said undue notesreceivable approximate their fair values. The said undue notes receivable will get mature within 1 year.
(5) Notes the Company transfers to accounts receivable due to the drawer's failure to perform the contract at the endof the periodAs at December 31, 2022, the Group has not any notes transferred to accounts receivable due to non-performance of drawers. (December 31, 2021:
None)
4. Accounts receivable
(1) Details on categories
Unit: RMB
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Accounts receivable for provision made on an individual basis | 41,463.78 | 0.00% | 41,463.78 | 100.00% | 4,523,328.43 | 0.16% | 4,523,328.43 | 100.00% | ||
| Including: | ||||||||||
| Accounts receivable for provision for bad debts made on the basis of portfolio | 2,008,279,020.67 | 100.00% | 81,760,902.29 | 4.07% | 1,926,518,118.38 | 2,834,428,535.98 | 99.84% | 117,482,550.65 | 4.14% | 2,716,945,985.33 |
| Including: | ||||||||||
| Portfolio 1: age portfolio | 1,929,487,537.03 | 96.07% | 81,682,110.81 | 4.23% | 1,847,805,426.22 | 2,751,659,068.87 | 96.92% | 117,399,781.18 | 4.27% | 2,634,259,287.69 |
| Portfolio 2: low-risk portfolio | 78,791,483.64 | 3.93% | 78,791.48 | 0.10% | 78,712,692.16 | 82,769,467.11 | 2.92% | 82,769.47 | 0.10% | 82,686,697.64 |
| Total | 2,008,320,484.45 | 100.00% | 81,802,366.07 | 4.07% | 1,926,518,118.38 | 2,838,951,864.41 | 100.00% | 122,005,879.08 | 4.30% | 2,716,945,985.33 |
Provision for bad debts made on an individual basis:
Unit: RMB
| Name | Closing balance | |||
| Book balance | Provision for bad debts | Provision proportion | Reasons | |
| Customer A | 41,463.78 | 41,463.78 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. |
| Total | 41,463.78 | 41,463.78 | ||
Provision for bad debts made on the basis of portfolio: Portfolio 1: age portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Within 1 year (including 1 year) | 1,924,752,692.02 | 80,644,664.54 | 4.19% |
| 1-2 years (including 2 years) | 3,725,554.00 | 298,044.32 | 8.00% |
| 2-3 years (including 3 years) | 255,548.22 | 38,332.23 | 15.00% |
| 3-4 years (including 4 years) | 96,637.91 | 48,318.96 | 50.00% |
| 4-5 years (including 5 years) | 21,770.61 | 17,416.49 | 80.00% |
| Over 5 years | 635,334.27 | 635,334.27 | 100.00% |
| Total | 1,929,487,537.03 | 81,682,110.81 | |
Explanation on the basis for determining such portfolio:
The expected credit loss rate is calculated upon the experience in actual credit loss, and adjusted based on the difference between the economyduring the historic period of data collection, the current economy and the economy during the duration expected by Supor.If provision for bad debts for accounts receivable is made based on the general model of expected credit losses, please disclose the relevantinformation about the provision for bad debts with reference to the disclosure of other receivables:
□ Applicable ? Not applicable
Disclosure by ages
Unit: RMB
| Ages | Book balance |
| Within 1 year (including 1 year) | 2,003,575,860.86 |
| 1-2 years | 3,735,332.58 |
| 2-3 years | 255,548.22 |
| Over 3 years | 753,742.79 |
| 3-4 years | 96,637.91 |
| 4-5 years | 21,770.61 |
| Over 5 years | 635,334.27 |
| Total | 2,008,320,484.45 |
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
| Categories | Opening balance | Amount of changes in current period | Closing balance | |||
| Accrued | Collected or reversed | Written off | Others | |||
| Provision for bad debts for accounts receivable | 122,005,879.08 | -35,810,880.38 | -4,577,358.50 | 184,725.87 | 81,802,366.07 | |
| Total | 122,005,879.08 | -35,810,880.38 | -4,577,358.50 | 184,725.87 | 81,802,366.07 | |
Increased provision for bad debts of RMB 184,725.87 for conversion difference in foreign currency statement caused by the change in exchangerate.
(3) Accounts receivable actually written off in current period
Unit: RMB
| Item | Amount |
| Accounts receivable actually written off | 4,577,358.50 |
Including significant accounts receivable written off:
Unit: RMB
| Entity name | Type of accounts receivable | Amount | Reason | Write-off procedures performed | Whether the amount was from related transactions |
| Customer B | Goods payment | 4,523,328.43 | Goods payment cannot be recovered because of the Company's capital chain rupture | Approval by the management | No |
| Customer C | Goods payment | 54,030.07 | Goods payment cannot be recovered because of the Company's capital chain rupture | Approval by the management | No |
| Total | 4,577,358.50 |
(4) Accounts receivable details of the top 5 closing balances by debtors
Unit: RMB
| Entity name | Closing balance of accounts receivable | Proportion in the total closing balance of accounts receivable | Closing balance of provision for bad debts |
| SEB S.A. and its subsidiaries | 1,006,987,000.47 | 50.14% | 35,246,269.24 |
| Customer D | 343,118,398.18 | 17.08% | 17,157,396.02 |
| Customer E | 94,146,045.21 | 4.69% | 4,802,629.23 |
| Customer F | 51,675,886.25 | 2.57% | 2,583,794.31 |
| Customer G | 41,909,033.73 | 2.09% | 41,909.03 |
| Total | 1,537,836,363.84 | 76.57% |
5. Receivables financing
Unit: RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 235,957,044.34 | 3,312,225.62 |
| Total | 235,957,044.34 | 3,312,225.62 |
Other remarks:
The Group endorses or discounts certain bank acceptance bills by the needs of day-to-day fund management. Taking into account of the amountand frequency of endorsement or discount of bank acceptance bills, the Group determines that the objective of such business model is to receivecontractual cash flows and sell the notes receivable simultaneously, and therefore, such notes receivable are classified into financial assetsmeasured at the fair value with their changes included into other comprehensive incomes, and presented as receivables financing.As at December 31, 2022, the Group had no receivables financing pledged. (December 31, 2021: None).Changes in receivables financing and its fair value during the period
□ Applicable ? Not applicable
If receivables financing is made based on the general model of expected credit losses, please disclose the relevant information about the impairment
provision with reference to the disclosure of other receivables:
□ Applicable ? Not applicable
Endorsed or discounted notes receivable undue at the balance sheet date at the end of the year
| Item | Closing balance derecognized | Closing balance not derecognized |
| Bank acceptance bill | 3,024,858,504.69 | |
| Total | 3,024,858,504.69 |
Other remarks:
In order to settle part of the payables, the Group endorses the equal amount of undue notes receivable to the suppliers, and the management of theGroup considers that certain undue notes meet the conditions, that is, almost all risks and remuneration pertaining to ownership have beentransferred and meanwhile the current obligations of the relevant payables have been fully discharged, thus the relevant notes and payables arederecognized. The possible greatest loss undertaken by the Group for the continued involvement therein is the amount of the undue notes receivableendorsed by the Group to suppliers. The said undue notes receivable will get mature within 1 year.
6. Advance payment
(1) Listing by ages
Unit: RMB
| Ages | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 335,655,809.04 | 98.83% | 384,209,532.57 | 99.70% |
| 1-2 years | 3,123,427.28 | 0.92% | 988,460.68 | 0.26% |
| 2-3 years | 665,000.00 | 0.20% | 6,000.00 | 0.00% |
| Over 3 years | 165,310.70 | 0.05% | 163,869.60 | 0.04% |
| Total | 339,609,547.02 | 385,367,862.85 | ||
Other remarks:
Aging is calculated from the date of confirmation of accounts prepaid.
(2) Advance payment of the top 5 closing balances by prepayment objects
| Entity name | Book balance | Proportion in the balance of advance payment |
| Supplier A | 42,311,341.01 | 12.46% |
| Supplier B | 32,780,501.21 | 9.65% |
| Supplier C | 22,531,620.00 | 6.63% |
| Supplier D | 17,267,872.77 | 5.08% |
| Supplier E | 16,671,812.94 | 4.91% |
| Subtotal | 131,563,147.93 | 38.73% |
7. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other receivables | 16,373,697.26 | 12,159,756.67 |
| Total | 16,373,697.26 | 12,159,756.67 |
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
| Nature of receivables | Ending book balance | Beginning book balance |
| Deposit as security | 10,692,374.84 | 9,533,739.58 |
| Temporary payment receivable | 6,434,897.15 | 2,817,399.32 |
| Personal deposit | 2,382,649.26 | 1,550,886.08 |
| Tax refund receivable | 1,237,388.33 | 1,237,370.65 |
| Total | 20,747,309.58 | 15,139,395.63 |
2) Provision for bad debts
Unit: RMB
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss in future 12 months | Expected credit loss in the entire duration (without credit impairment) | Expected credit loss in the entire duration (credit impairment) | ||
| Balance on January 1, 2022 | 2,979,638.96 | 2,979,638.96 | ||
| Balance on January 1, 2022 in the current period | ||||
| Withdrawal in the current period | 1,388,421.68 | 1,388,421.68 | ||
| Other changes | 5,551.68 | 5,551.68 | ||
| Balance on December 31, 2022 | 4,373,612.32 | 4,373,612.32 |
Other remarks:
Increased provision for bad debts of RMB 5,551.68 for conversion difference in foreign currency statement caused by the change in exchange rate.Changes in book balance of loss provision due to significant changes in the current period
□ Applicable ? Not applicable
Disclosure by ages
Unit: RMB
| Ages | Book balance |
| Within 1 year (including 1 year) | 13,205,781.19 |
| 1-2 years | 3,187,388.71 |
| 2-3 years | 1,104,417.30 |
| Over 3 years | 3,249,722.38 |
| 3-4 years | 647,421.24 |
| 4-5 years | 848,436.61 |
| Over 5 years | 1,753,864.53 |
| Total | 20,747,309.58 |
3) Provisions made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
| Categories | Opening balance | Amount of changes in current period | Closing balance | |||
| Accrued | Collected or reversed | Written off | Others | |||
| Provision for bad debts of other receivables | 2,979,638.96 | 1,388,421.68 | 5,551.68 | 4,373,612.32 | ||
| Total | 2,979,638.96 | 1,388,421.68 | 5,551.68 | 4,373,612.32 | ||
4) Other receivables details of the top 5 closing balances by debtors
Unit: RMB
| Entity name | Nature of receivables | Closing balance | Ages | Proportion in the total closing balance of other receivables | Closing balance of provision for bad debts |
| Customer H | Temporary payment receivable | 1,652,511.36 | Within 1 year | 7.96% | 82,625.57 |
| Customer I | Temporary paragraph receivable/deposit as security | 1,480,196.99 | Within 1 year, 1-3 years | 7.13% | 148,509.85 |
| Tax refund receivable | Tax refund receivable | 1,235,931.88 | Within 1 year, 1-2 years | 5.96% | |
| Customer J | Deposit as security | 1,180,000.00 | 1-2 years | 5.69% | 94,400.00 |
| Customer K | Deposit as security | 1,000,000.00 | Within 1 year | 4.82% | 50,000.00 |
| Total | 6,548,640.23 | 31.56% | 375,535.42 |
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industryNo
(1) Inventory classification
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Inventory depreciation reserves or impairment provision for contract performance cost | Book value | Book balance | Inventory depreciation reserves or impairment provision for contract | Book value | |
| performance cost | ||||||
| Raw materials | 446,471,515.87 | 14,369,922.27 | 432,101,593.60 | 600,492,823.00 | 10,291,195.98 | 590,201,627.02 |
| Unfinished products | 84,088,800.88 | 84,088,800.88 | 106,157,761.25 | 106,157,761.25 | ||
| Finished products | 1,885,938,291.03 | 19,558,744.71 | 1,866,379,546.32 | 2,289,813,383.66 | 14,771,911.61 | 2,275,041,472.05 |
| Low value consumables | 101,274,579.44 | 379,610.26 | 100,894,969.18 | 107,094,627.93 | 29,787.94 | 107,064,839.99 |
| Packing materials | 11,457,946.44 | 11,457,946.44 | 18,051,355.02 | 18,051,355.02 | ||
| Total | 2,529,231,133.66 | 34,308,277.24 | 2,494,922,856.42 | 3,121,609,950.86 | 25,092,895.53 | 3,096,517,055.33 |
(2) Inventory depreciation reserves and impairment provision for contract performance cost
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance | ||
| Accrued | Others | Reversal or write-off | Others | |||
| Raw materials | 10,291,195.98 | 9,419,750.56 | 203,318.55 | 5,544,342.82 | 14,369,922.27 | |
| Finished products | 14,771,911.61 | 14,511,022.10 | 21,211.02 | 9,745,400.02 | 19,558,744.71 | |
| Low value consumables | 29,787.94 | 379,610.26 | 29,787.94 | 379,610.26 | ||
| Total | 25,092,895.53 | 24,310,382.92 | 224,529.57 | 15,319,530.78 | 34,308,277.24 | |
Other remarks:
There is an increased inventory depreciation reserves of RMB 224,529.57 for conversion difference in foreign currency statement caused by thechange in exchange rate.
9. Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Other debt investments due within one year | 32,157,534.25 | |
| Total | 32,157,534.25 |
Important other debt investments
Unit: RMB
| Creditor's items | Closing balance | Opening balance | ||||||
| Face value | Coupon rate | Effective interest rate | Expiry date | Face value | Coupon rate | Effective interest rate | Expiry date | |
| The Company - Bank of China negotiable certificates of deposit | 30,000,000.00 | 3.50% | 3.34% | December 11, 2023 | ||||
| Total | 30,000,000.00 | |||||||
Other remarks:
10. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Return cost receivable | 14,266,301.12 | 13,377,148.99 |
| Creditable VAT | 49,236,636.79 | 171,398,751.97 |
| Term deposit | 381,101,095.89 | 1,863,761,369.84 |
| Others | 6,381,982.96 | 6,490,111.83 |
| Total | 450,986,016.76 | 2,055,027,382.63 |
Other remarks:
Term deposits more than three months are for the purpose of earning interest, in December 31, 2022, of which: the principal amount is RMB350,000,000.00 (December 31, 2021: RMB 1,700,000,000.00) and the interest receivable is RMB 31,101,095.89 (December 31, 2021: RMB163,761,369.84).
11. Other debt investments
Unit: RMB
| Item | Opening balance | Accrued interest | Fair value changes in the current period | Closing balance | Cost | Accumulated fair value changes | Loss provisions that are cumulatively determined in other comprehensive incomes | Remarks |
| Negotiable certificates of deposit | 298,191,205.49 | 33,064,246.58 | 1,056,952,424.68 | 1,023,888,178.10 | ||||
| Minus: Part due within one year | -2,157,534.25 | -32,157,534.25 | -30,000,000.00 | |||||
| Total | 298,191,205.49 | 30,906,712.33 | 1,024,794,890.43 | 993,888,178.10 |
Other important debt investment
Unit: RMB
| Other creditors' rights items | Closing balance | Opening balance | ||||||
| Face value | Coupon rate | Effective interest rate | Expiry date | Face value | Coupon rate | Effective interest rate | Expiry date | |
| The Company - Bank of China negotiable certificates of deposit | 40,000,000.00 | 3.85% | 3.71% | March 24, 2024 | 40,000,000.00 | 3.85% | 3.71% | March 24, 2024 |
| The Company - Bank of China negotiable certificates of deposit | 60,000,000.00 | 3.85% | 3.73% | April 16, 2024 | 60,000,000.00 | 3.85% | 3.73% | April 16, 2024 |
| The Company - Bank of China negotiable certificates of deposit | 10,000,000.00 | 3.85% | 3.80% | April 2, 2024 | 10,000,000.00 | 3.85% | 3.80% | April 2, 2024 |
| The Company - Bank of China negotiable certificates of deposit | 60,000,000.00 | 3.85% | 3.78% | March 25, 2024 | 60,000,000.00 | 3.85% | 3.78% | March 25, 2024 |
| The Company - Bank of China negotiable certificates of deposit | 20,000,000.00 | 3.85% | 3.78% | April 9, 2024 | 20,000,000.00 | 3.85% | 3.78% | April 9, 2024 |
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 100,000,000.00 | 3.60% | 3.50% | February 8, 2024 | ||||
| Shaoxing Supor - Bank of China negotiable certificates of deposit | 30,000,000.00 | 3.85% | 3.57% | February 4, 2024 | ||||
| Shaoxing Supor - Bank of China negotiable certificates of deposit | 30,000,000.00 | 3.85% | 3.57% | February 4, 2024 | ||||
| Shaoxing Supor - Bank of Ningbo negotiable certificates of deposit | 10,000,000.00 | 3.55% | 3.30% | November 10, 2024 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 200,000,000.00 | 3.55% | 3.43% | April 21, 2025 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 50,000,000.00 | 3.55% | 3.36% | March 11, 2025 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 100,000,000.00 | 3.45% | 3.34% | July 25, 2025 | ||||
| Shaoxing Supor Housewares - Bank of Ningbo negotiable certificates of deposit | 20,000,000.00 | 3.40% | 3.29% | October 17, 2025 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 100,000,000.00 | 3.45% | 3.30% | July 28, 2025 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 100,000,000.00 | 3.45% | 3.22% | August 4, 2025 | ||||
| Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 150,000,000.00 | 3.35% | 3.21% | August 4, 2025 | ||||
| Shaoxing Supor Housewares - ICBC negotiable certificates of deposit | 15,000,000.00 | 3.35% | 3.23% | March 30, 2025 | ||||
| Total | 995,000,000.00 | 290,000,000.00 |
Changes in book balance of loss provision due to significant changes in the current period
□ Applicable ? Not applicable
12. Long-term equity investment
Unit: RMB
| Invested unit | Opening balance (book value) | Increase/decrease | Closing balance (book value) | Closing balance of impairment provision | |||||||
| Investment increased | Investment decreased | Investment profit or loss recognized by equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/profit declared for distribution | Accrued impairment provision | Others | ||||
| I. Joint Venture | |||||||||||
| II. Associated Enterprise | |||||||||||
| Wuhan Anzai Cookware Co., Ltd. | 65,600,611.64 | -3,404,472.11 | 62,196,139.53 | ||||||||
| Subtotal | 65,600,611.64 | -3,404,472.11 | 62,196,139.53 | ||||||||
| Total | 65,600,611.64 | -3,404,472.11 | 62,196,139.53 | ||||||||
13. Fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 1,303,075,391.03 | 1,291,902,992.54 |
| Total | 1,303,075,391.03 | 1,291,902,992.54 |
(1) Fixed assets
Unit: RMB
| Item | Buildings and structures | General equipment | Special equipment | Transport facilities | Total |
| I. Original Book Value: | |||||
| 1. Opening balance | 1,186,764,153.98 | 278,665,369.15 | 916,415,607.69 | 32,649,668.69 | 2,414,494,799.51 |
| 2. Increase | 39,081,769.63 | 22,770,082.49 | 78,542,444.00 | 3,367,702.88 | 143,761,999.00 |
| (1) Acquisition | 28,628,869.34 | 15,617,091.41 | 44,635,305.84 | 3,367,702.88 | 92,248,969.47 |
| (2) Transferred in from construction in progress | 10,452,900.29 | 7,152,991.08 | 33,907,138.16 | 51,513,029.53 | |
| (3) Increase from enterprise merger | |||||
| 3. Decrease | 4,090,068.62 | 5,741,299.42 | 28,734,632.30 | 3,195,154.34 | 41,761,154.68 |
| (1) Disposal or scrapping | 4,090,068.62 | 5,383,739.18 | 24,906,845.00 | 3,195,154.34 | 37,575,807.14 |
| (2) Transfer into construction in progress | 357,560.24 | 3,827,787.30 | 4,185,347.54 | ||
| 4. Impact of change in exchange rate | 1,799,206.58 | 491,466.79 | 3,822,041.58 | 121,415.43 | 6,234,130.38 |
| 5. Closing balance | 1,223,555,061.57 | 296,185,619.01 | 970,045,460.97 | 32,943,632.66 | 2,522,729,774.21 |
| II. Accumulated Depreciation | |||||
| 1. Opening balance | 331,504,046.92 | 192,857,951.65 | 572,072,689.24 | 26,157,119.16 | 1,122,591,806.97 |
| 2. Increase | 42,658,435.01 | 27,452,441.09 | 55,132,842.15 | 3,020,592.22 | 128,264,310.47 |
| (1) Provision | 42,658,435.01 | 27,452,441.09 | 55,132,842.15 | 3,020,592.22 | 128,264,310.47 |
| 3. Decrease | 40,194.38 | 4,766,973.87 | 26,268,133.70 | 2,746,329.77 | 33,821,631.72 |
| (1) Disposal or scrapping | 40,194.38 | 4,560,976.39 | 22,702,790.46 | 2,746,329.77 | 30,050,291.00 |
| (2) Transfer into construction in progress | 205,997.48 | 3,565,343.24 | 3,771,340.72 | ||
| 4. Impact of change in exchange rate | 579,229.15 | 307,152.06 | 1,636,326.51 | 97,189.74 | 2,619,897.46 |
| 5. Closing balance | 374,701,516.70 | 215,850,570.93 | 602,573,724.20 | 26,528,571.35 | 1,219,654,383.18 |
| III. Impairment Provision | |||||
| IV. Book Value | |||||
| 1. Closing book value | 848,853,544.87 | 80,335,048.08 | 367,471,736.77 | 6,415,061.31 | 1,303,075,391.03 |
| 2. Opening book value | 855,260,107.06 | 85,807,417.50 | 344,342,918.45 | 6,492,549.53 | 1,291,902,992.54 |
(2) Fixed assets with certificate of titles unsettled
Unit: RMB
| Item | Book value | Reasons for unsettlement |
| Function dormitory of Shaoxing Supor | 36,306,564.45 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.3 plant of Shaoxing Supor | 26,701,849.53 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.1 plant of Shaoxing Supor | 24,511,146.60 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.8 plant of Shaoxing Supor | 29,145,584.35 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| Function cafeteria of Shaoxing Supor | 12,098,228.78 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.12 plant of Shaoxing Supor | 12,299,011.19 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| Transformer substation (35 kV) of Shaoxing Supor | 3,270,698.66 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.13 plant of Shaoxing Supor | 15,961,306.05 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.14 plant of Shaoxing Supor | 24,354,643.08 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| No.15 plant of Shaoxing Supor | 42,322,410.13 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| Forklift charging room of Shaoxing Supor | 894,910.10 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
| Generator room of P&R Products | 1,784.89 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
| Water pump building and structures of P&R Products | 93,876.04 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
| Extended plant for bakelite workshop of P&R Products | 207,208.55 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
| Polishing workshop of P&R Products | 97,920.00 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
| Total | 228,267,142.40 |
14. Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 12,005,654.73 | 26,482,779.31 |
| Total | 12,005,654.73 | 26,482,779.31 |
(1) Details of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Piecemeal projects | 82,038.73 | 82,038.73 | 18,454,384.74 | 18,454,384.74 | ||
| Equipment payment | 909,049.00 | 909,049.00 | 2,760,998.31 | 2,760,998.31 | ||
| Zhejiang WMF factory project | 5,259,590.60 | 5,259,590.60 | ||||
| Warehouse project of Shaoxing Supor | 11,014,567.00 | 11,014,567.00 | 7,805.66 | 7,805.66 | ||
| Total | 12,005,654.73 | 12,005,654.73 | 26,482,779.31 | 26,482,779.31 | ||
(2) Changes in significant projects
Unit: RMB
| Items | Budgets | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance | Accumulated investment to budget | Completion percentage (%) | Accumulated amount of borrowing cost capitalization | Including: amount of interest capitalization in current period | Interest capitalization rate in current period | Capital source |
| Piecemeal projects | 18,454,384.74 | 23,291,531.52 | 41,663,877.53 | 82,038.73 | Self-owned capital | |||||||
| Equipment payment | 2,760,998.31 | 80,249.99 | 1,932,199.30 | 909,049.00 | Self-owned capital | |||||||
| Zhejiang WMF factory project | 248,276,513.76 | 5,259,590.60 | 2,657,362.10 | 7,916,952.70 | 97.02% | 100.00% | Self-owned capital | |||||
| Warehouse project of Shaoxing Supor | 13,578,353.00 | 7,805.66 | 11,006,761.34 | 11,014,567.00 | 81.12% | 81.12% | Self-owned capital |
| Total | 261,854,866.76 | 26,482,779.31 | 37,035,904.95 | 51,513,029.53 | 12,005,654.73 |
Other remarks:
The project budget of RMB 248,276,513.76 for the Zhejiang WMF factory in Yuhuan City includes RMB 67,164,093.75 for the land use rightson December 31, 2022.15 Right-of-use assets
Unit: RMB
| Item | Buildings and structures | Land | Total |
| I. Original Book Value | |||
| 1. Opening balance | 227,141,323.93 | 2,997,832.55 | 230,139,156.48 |
| 2. Increase | 56,290,431.62 | 56,290,431.62 | |
| 3. Decrease | 20,261,411.47 | 20,261,411.47 | |
| 4. Exchange rate effect | 37,442.95 | 231,046.53 | 268,489.48 |
| 5. Closing balance | 263,207,787.03 | 3,228,879.08 | 266,436,666.11 |
| II. Accumulated Depreciation | |||
| 1. Opening balance | 34,518,604.93 | 91,907.42 | 34,610,512.35 |
| 2. Increase | 47,472,224.62 | 99,084.01 | 47,571,308.63 |
| (1) Provision | 47,472,224.62 | 99,084.01 | 47,571,308.63 |
| 3. Decrease | 6,506,356.74 | 6,506,356.74 | |
| (1) Disposal | 6,506,356.74 | 6,506,356.74 | |
| 4. Exchange rate effect | 28,017.02 | 14,222.03 | 42,239.05 |
| 5. Closing balance | 75,512,489.83 | 205,213.46 | 75,717,703.29 |
| III. Impairment Provision | |||
| IV. Book Value | |||
| 1. Closing book value | 187,695,297.20 | 3,023,665.62 | 190,718,962.82 |
| 2. Opening book value | 192,622,719.00 | 2,905,925.13 | 195,528,644.13 |
16. Intangible assets
(1) Details
Unit: RMB
| Item | Land use right | Trademark use right | Software | Total |
| I. Original Book Value | ||||
| 1. Opening balance | 474,749,614.53 | 47,328,811.32 | 87,015,884.82 | 609,094,310.67 |
| 2. Increase | 11,300,065.22 | 11,300,065.22 | ||
| (1) Acquisition | 11,300,065.22 | 11,300,065.22 | ||
| (2) In-house R&D |
| (3) Increase from enterprise merger | ||||
| (4) Transferred in from construction in progress | ||||
| 3. Decrease | 189,655.19 | 189,655.19 | ||
| (1) Disposal | 189,655.19 | 189,655.19 | ||
| 4. Impact of change in exchange rate | 278,037.68 | 48,903.62 | 326,941.30 | |
| 5. Closing balance | 475,027,652.21 | 47,328,811.32 | 98,175,198.47 | 620,531,662.00 |
| II. Accumulated Amortization | ||||
| 1. Opening balance | 88,398,664.67 | 28,352,236.77 | 40,142,545.84 | 156,893,447.28 |
| 2. Increase | 9,973,743.25 | 4,732,881.13 | 8,849,083.33 | 23,555,707.71 |
| (1) Provision | 9,973,743.25 | 4,732,881.13 | 8,849,083.33 | 23,555,707.71 |
| 3. Decrease | 64,798.86 | 64,798.86 | ||
| (1) Disposal | 64,798.86 | 64,798.86 | ||
| 4. Impact of change in exchange rate | 94,223.70 | 35,349.01 | 129,572.71 | |
| 5. Closing balance | 98,466,631.62 | 33,085,117.90 | 48,962,179.32 | 180,513,928.84 |
| III. Impairment Provision | ||||
| IV. Book Value | ||||
| 1. Closing book value | 376,561,020.59 | 14,243,693.42 | 49,213,019.15 | 440,017,733.16 |
| 2. Opening book value | 386,350,949.86 | 18,976,574.55 | 46,873,338.98 | 452,200,863.39 |
At the end of this period, the proportion of intangible assets formed through internal R&D in the balance of intangible assets is 0.00%.
17. Deferred income tax assets/deferred income tax liabilities
(1) Un-offset deferred income tax assets
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Impairment provision of assets | 104,854,363.88 | 23,059,580.50 | 140,835,930.67 | 31,223,473.17 |
| Profits not realized by internal transaction | 80,178,943.70 | 19,496,741.80 | 65,189,056.55 | 16,265,944.20 |
| Deductible losses | 16,402,564.88 | 3,626,289.50 | 11,483,414.26 | 2,526,351.14 |
| Accrued expenses | 1,349,115,519.54 | 326,749,720.17 | 1,387,553,412.35 | 342,490,567.25 |
| Accrued salary | 42,347,931.51 | 10,586,982.88 | 55,679,676.14 | 13,919,919.04 |
| Estimated liabilities | 12,640,441.72 | 1,896,066.26 | 12,737,298.24 | 1,910,594.74 |
| Share-based payment | 51,889,706.92 | 12,000,187.47 | ||
| Book-tax difference for depreciation of fixed assets | 758,178.56 | 189,544.64 | ||
| Expected returns | 8,355,059.11 | 2,052,992.64 | 7,251,899.92 | 1,812,974.98 |
| Effect created by the New Lease Standards | 8,125,161.92 | 2,004,367.63 | 2,601,983.12 | 635,171.05 |
| Total | 1,673,909,693.18 | 401,472,928.85 | 1,684,090,849.81 | 410,974,540.21 |
(2) Deferred income tax assets or liabilities presented with net amount after offsetting
Unit: RMB
| Item | Offsetting amount between deferred income tax assets and liabilities at the end of the period | Closing balance of deferred income tax assets or liabilities after offsetting | Offsetting amount between deferred income tax assets and liabilities at the beginning of the period | Opening balance of deferred income tax assets or liabilities after offsetting |
| Deferred income tax assets | 401,472,928.85 | 410,974,540.21 | ||
| Deferred income tax liabilities |
(3) Detail about unrecognized deferred income tax assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 15,629,891.75 | 9,242,482.90 |
| Deductible losses | 28,216,721.82 | 22,983,929.59 |
| Total | 43,846,613.57 | 32,226,412.49 |
(4) Deductible losses of unconfirmed deferred income tax assets shall expire in the following years
Unit: RMB
| Year | Closing balance | Opening balance | Remarks |
| 2024 | 8,287,689.09 | 8,287,689.09 | |
| 2025 | 6,945,189.33 | 6,945,189.33 | |
| 2026 | 7,751,051.17 | 7,751,051.17 | |
| 2027 | 5,232,792.23 | ||
| Total | 28,216,721.82 | 22,983,929.59 |
18. Notes payable
Unit: RMB
| Type | Closing balance | Opening balance |
| Bank acceptance bill | 1,057,611,900.00 | 500,250,000.00 |
| Total | 1,057,611,900.00 | 500,250,000.00 |
The above amounts are all due within one year .The amount of due unpaid notes payable is RMB 0.00 at the end of the current period.
19. Accounts payable
(1) Details
Unit: RMB
| Item | Closing balance | Opening balance |
| Goods payment | 1,274,889,065.48 | 2,385,533,206.14 |
| Equipment and engineering funds | 67,104,579.12 | 74,164,020.84 |
| Expenses payment | 1,293,527,903.59 | 1,310,003,599.52 |
| Total | 2,635,521,548.19 | 3,769,700,826.50 |
Other remarks:
As at December 31, 2022, the Group had no significant accounts payable with an age of more than one year (December 31, 2021: None).
20. Contract liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Advances on sales | 1,153,932,879.53 | 893,741,863.21 |
| Total | 1,153,932,879.53 | 893,741,863.21 |
The amount with major changes in its book value during the reporting period and its reasons
Unit: RMB
| Item | Variation amount | Variation reason |
| Advances on sales | -893,741,863.21 | Including the revenue recognized by the amount of book value of contract liabilities at the beginning of the year |
| Advances on sales | 1,153,932,879.53 | The amount increased due to receipt of cash (excluding the amount recognized as revenue in the current year) |
| Total | 260,191,016.32 | —— |
21. Employee remunerations payable
(1) Details
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term employee remuneration | 303,575,560.46 | 1,667,475,941.82 | 1,688,441,566.68 | 282,609,935.60 |
| II. Post-employment Benefits - Defined Contribution Plan | 9,073,751.55 | 88,204,165.23 | 91,392,729.30 | 5,885,187.48 |
| III. Termination Benefit | 9,043,641.87 | 656,896.35 | 9,120,232.80 | 580,305.42 |
| Total | 321,692,953.88 | 1,756,337,003.40 | 1,788,954,528.78 | 289,075,428.50 |
(2) Details of short-term employee remuneration
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Salary, bonus, allowance and subsidy | 261,402,348.07 | 1,490,517,755.60 | 1,513,396,273.10 | 238,523,830.57 |
| 2. Employee services and benefits | 5,591,592.20 | 62,975,871.74 | 64,798,920.73 | 3,768,543.21 |
| 3. Social insurance charges | 3,795,053.66 | 54,881,041.74 | 54,616,942.66 | 4,059,152.74 |
| Occupational injuries premium | 231,126.92 | 4,254,095.16 | 4,169,041.22 | 316,180.86 |
| Medical and maternity insurance premiums | 3,563,926.74 | 50,626,946.58 | 50,447,901.44 | 3,742,971.88 |
| 4. Housing accumulation fund | 41,323,781.55 | 41,159,977.47 | 163,804.08 | |
| 5. Trade union fund and employee education fund | 32,786,566.53 | 17,777,491.19 | 14,469,452.72 | 36,094,605.00 |
| Total | 303,575,560.46 | 1,667,475,941.82 | 1,688,441,566.68 | 282,609,935.60 |
Other remarks:
On March 25, 2019, the General Office of the State Council released the Opinions on Comprehensively Promoting the Combined Implementationof Maternity Insurance and Basic Medical Insurance for Employees, which promotes the combined implementation of the two insurances.
(3) Details of defined contribution plan
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic endowment insurance | 8,917,574.02 | 84,941,205.44 | 88,174,533.26 | 5,684,246.20 |
| 2. Unemployment insurance premium | 156,177.53 | 3,262,959.79 | 3,218,196.04 | 200,941.28 |
| Total | 9,073,751.55 | 88,204,165.23 | 91,392,729.30 | 5,885,187.48 |
(4) Termination benefit
Supor's termination benefits due to rescinding labor relations in this year are RMB 9,120,232.80 (2021: RMB 41,905,536.10), and the outstandingamount payable at the end of the year is RMB 580,305.42 (December 31, 2021: RMB 9,043,641.87).
22. Taxes payable
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT | 29,951,962.61 | 16,872,131.15 |
| Enterprise income tax | 141,680,509.34 | 211,061,366.37 |
| Individual income tax | 3,309,618.70 | 3,008,686.26 |
| Urban maintenance and construction tax | 5,065,611.60 | 2,435,989.79 |
| Housing property tax | 10,036,243.48 | 8,277,905.43 |
| Land use tax | 6,702,356.53 | 6,675,898.84 |
| Stamp tax | 4,127,604.37 | 4,014,935.73 |
| Education surcharge | 2,201,227.48 | 994,165.50 |
| Local education surcharge | 1,533,579.16 | 753,712.48 |
| Total | 204,608,713.27 | 254,094,791.55 |
23. Other payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other payables | 137,729,222.63 | 110,605,272.21 |
| Total | 137,729,222.63 | 110,605,272.21 |
(1) Other payables
1) Listing by nature
Unit: RMB
| Item | Closing balance | Opening balance |
| Deposit as security | 99,096,157.97 | 72,599,903.25 |
| Temporary receipts payable | 21,538,362.25 | 25,902,507.85 |
| Others | 17,094,702.41 | 12,102,861.11 |
| Total | 137,729,222.63 | 110,605,272.21 |
24. Non-current liabilities due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease obligations due within one year | 41,924,940.24 | 29,191,343.78 |
| Total | 41,924,940.24 | 29,191,343.78 |
25. Other current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Refund payable | 22,621,360.23 | 20,629,048.91 |
| Endorsed bank acceptance bill unrecognized | 22,383,800.87 | 53,979,357.24 |
| Output tax to be written-off | 149,694,451.88 | 115,201,977.22 |
| Total | 194,699,612.98 | 189,810,383.37 |
26. Lease obligation
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term lease obligations | 192,704,856.82 | 186,611,554.59 |
| Minus: Lease obligations due within one year | -41,924,940.24 | -29,191,343.78 |
| Total | 150,779,916.58 | 157,420,210.81 |
Other remarks:
The Group also rents employee dormitories, temporary warehouses, etc. for a lease term up to one year, representing short-term leases. The Grouphas chosen not to recognize the right-of-use assets and lease obligations for these leases.
27. Long-term employee remunerations payable
Unit: RMB
| Item | Closing balance | Opening balance |
| II. Termination Benefit | 1,441,111.55 | 1,903,631.69 |
| Total | 1,441,111.55 | 1,903,631.69 |
28. Estimated liabilities
Unit: RMB
| Item | Closing balance | Opening balance | Reasons for the balance |
| Pending lawsuit | 11,150,000.00 | 11,150,000.00 | See Note 14. "Commitments and Contingencies" for details |
| Financial guarantee contract | 1,490,441.72 | 1,587,298.24 | See Note 14. "Commitments and Contingencies" for details |
| Total | 12,640,441.72 | 12,737,298.24 |
29. Share capital
Unit: RMB
| Opening balance | Increase/decrease in the period (+, -) | Closing balance | |||||
| New shares | Shares bonus | Converted capital | Others | Subtotal | |||
| Total shares | 808,678,476.00 | -24,000.00 | -24,000.00 | 808,654,476.00 | |||
Other remarks:
The decrease in share capital in the current period is RMB 24,000.00, which refers to the repurchase and deregistration of 24,000 restricted sharesfrom the separated equity incentive objects at the price of RMB 1 per share, resulting in the corresponding decrease of share capital in the amountof RMB 24,000.00.
30. Capital reserve
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 52,997,061.77 | 52,997,061.77 | 0.00 | |
| Other capital reserve | 69,973,278.50 | 55,395,710.94 | 125,368,989.44 | |
| Total | 122,970,340.27 | 55,395,710.94 | 52,997,061.77 | 125,368,989.44 |
Other remarks (including increase and decrease in current period and variation reason):
1) The decrease of share capital premium in this year is RMB 52,997,061.77, which is the cost of reselling the treasury share turn overed by theauthorized objects of the equity incentive plan after purchasing restricted stocks. The capital reserve - capital stock premium is adjusted accordingto the difference.
2) The increase of RMB 55,395,710.94 in other capital reserves in the current period refers to ① the equity-settled share-based payment amountof RMB 54,847,235.98 in the current period included in the capital reserve (other capital reserves), as detailed in Note 13 "Description of Share-based Payment" to these financial statements. ② The estimated deductible amount of the share-based payment in the future of this year exceeds
the cost recognized in the waiting period. The deferred income tax assets formed by the excess of RMB 548,474.96 are directly included into thecapital reserve - other capital reserves.
31. Treasury shares
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| treasury share | 76,159,897.25 | 162,954,253.14 | 139,389,326.90 | 99,724,823.49 |
| Total | 76,159,897.25 | 162,954,253.14 | 139,389,326.90 | 99,724,823.49 |
Other remarks (including increase and decrease in current period and variation reason):
1) The 12th Session of the Seventh Board of Directors of the Company and the General Meeting of Shareholders in 2021 reviewed and passed theProposal on Repurchasing Certain Public Shares. The Company planned to use its own funds to buy back its shares for the write-off and decreaseof the registered capital and the implementation of equity incentives. The increase in this year is that the Company repurchased 3,325,069 sharesof the Company from the secondary market in the form of centralized competitive trading during the reporting period, totaling RMB162,937,785.50, and the repurchase handling fee is RMB 16,467.64, of which RMB 69,398,019.65 is proposed for the implementation of equityincentives and RMB 93,556,233.49 is proposed for cancellation or implementation of equity incentives.
2) The annual decrease of the treasury share capital is RMB 139,389,326.90. ① The Company's 11th Meeting of the Seventh Board of Directorsin 2022 and the 15th Meeting of the 7th Board of Directors in 2022 deliberated and passed the Proposal on Granting Restricted Stocks to IncentiveObjects. A total of 2,463,000 shares of restricted stocks have been granted this year, with the grant amount of RMB 141,828,326.90. At the sametime, the treasury shares and the liabilities for repurchase obligations were recognized at RMB 2,463,000.00 based on the number of restrictedstocks issued and the corresponding repurchase price of RMB 1 per share.
② At the 12th Meeting of the Seventh Session of the Board of Directors of the Company in 2022, it was resolved that six incentive objects of theCompany no longer met the incentive conditions due to their resignation, and repurchased and cancelled a total of 24,000 shares of restrictedstocks at a price of RMB 1 per share, and decreased the repurchase obligation by RMB 24,000.00 accordingly.
32. Other comprehensive incomes
Unit: RMB
| Item | Opening balance | Amount incurred during this period | Closing balance | |||||
| Current period cumulative before income tax | Minus: Other comprehensive incomes carried forward transferred to profits and losses | Minus: Other comprehensive incomes carried forward transferred to retained earnings | Minus: Income tax expenses | Attributable to parent company | Attributable to non-controlling interest | |||
| II. Other Comprehensive Incomes to Be Reclassified into the Profit and Loss | -41,522,541.60 | 20,857,374.53 | 21,067,718.34 | -210,343.81 | -20,454,823.26 | |||
| Conversion difference in foreign currency financial statement | -41,522,541.60 | 20,857,374.53 | 21,067,718.34 | -210,343.81 | -20,454,823.26 | |||
| Total other comprehensive income | -41,522,541.60 | 20,857,374.53 | 21,067,718.34 | -210,343.81 | -20,454,823.26 |
33. Surplus reserves
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 356,924,811.32 | 356,924,811.32 | ||
| Total | 356,924,811.32 | 356,924,811.32 |
Remarks on surplus reserve (including increase and decrease in current period and variation reason):
The cumulative statutory surplus reserve provision by the company has reached 50% of the registered capital of the company, and it will no longercontinue to withdraw the statutory surplus reserve.
34. Undistributed profits
Unit: RMB
| Item | Current period | Preceding period |
| Undistributed profits at the end of last period before adjustment | 6,451,748,564.12 | 6,202,587,444.38 |
| Undistributed profits at period beginning after adjustment | 6,451,748,564.12 | 6,202,587,444.38 |
| Plus: Net profit attributable to owners of the parent company | 2,067,659,526.97 | 1,943,943,608.94 |
| Minus: withdrawal of statutory surplus reserve | 356,924,811.32 | |
| Ordinary share dividends payable | 2,567,723,592.43 | 1,048,601,714.34 |
| Offset of undistributed profits by share deregistration | 289,255,963.54 | |
| Grant of restricted stocks | 86,368,265.13 | |
| Undistributed profits at the end of the period | 5,865,316,233.53 | 6,451,748,564.12 |
Adjustment of undistributed profits at period beginning:
1). Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, undistributed profit at periodbeginning was changed by RMB 0.
2). Due to change of accounting policies, undistributed profit at period beginning was changed by RMB 0.
3). Due to rectification of important accounting errors, undistributed profit at period beginning was changed by RMB 0.
4). Due to change of merger scope resulted from same control, undistributed profit at period beginning was changed by RMB 0.
5). Due to other adjustment, undistributed profit at period beginning was changed by RMB 0.
35. Operating incomes and costs
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 19,947,308,992.05 | 14,779,802,587.93 | 21,372,524,970.07 | 16,446,814,570.16 |
| Revenue from other operations | 223,218,524.61 | 189,526,252.64 | 212,806,437.40 | 174,798,590.64 |
| Total | 20,170,527,516.66 | 14,969,328,840.57 | 21,585,331,407.47 | 16,621,613,160.80 |
Whether the net profit before or after non-recurring profit and loss are deducted, whichever is lower, is negative
□ Yes ? No
Information related to revenue:
Unit: RMB
| Contract classification | Total |
| Commodity type | |
| Including: | |
| Cookware and utensil | 6,121,737,273.97 |
| Electrical cooking | 8,506,984,442.90 |
| Food cooking appliances | 3,086,500,276.55 |
| Other domestic appliances | 2,455,305,523.24 |
| Classified by business area | |
| Including: | |
| Domestic sales | 14,975,644,970.69 |
| Export sales | 5,194,882,545.97 |
Information related to performance obligations:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligations that have been signed but have not beenperformed or not yet completed is RMB 1,153,932,879.53, of which RMB 1,153,932,879.53 is expected to be recognized as revenue in 2023.
36. Taxes and surcharges
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Urban maintenance and construction tax | 60,826,714.98 | 40,321,696.20 |
| Education surcharge | 26,242,005.20 | 17,291,200.73 |
| Housing property tax | 12,328,977.15 | 11,059,149.84 |
| Land use tax | 1,954,421.94 | 3,182,999.64 |
| Vehicle and vessel use tax | 58,546.40 | 53,896.40 |
| Stamp tax | 11,651,100.02 | 9,899,325.25 |
| Local education surcharge | 17,555,804.52 | 11,558,151.43 |
| Environmental protection tax | 75,969.20 | 50,636.40 |
| Total | 130,693,539.41 | 93,417,055.89 |
Other remarks:
See Note 6. Taxes for calculating standard of taxes and surcharges.
37. Sales expenses
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Advertising, sales promotion, and special gift expenses | 1,552,778,059.77 | 1,361,391,136.59 |
| Employee remuneration | 401,609,998.06 | 374,660,735.45 |
| Office and business traveling expenses | 124,217,367.02 | 112,141,689.26 |
| Others | 77,691,633.78 | 61,759,534.24 |
| Total | 2,156,297,058.63 | 1,909,953,095.54 |
38. Administrative expenses
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Employee remuneration | 218,635,148.78 | 250,016,795.57 |
| Office, business traveling and depreciation and amortization expenses | 87,381,475.69 | 88,063,375.90 |
| Equity incentive expenses | 36,289,361.98 | 11,269,965.47 |
| Others | 31,754,653.83 | 51,429,471.73 |
| Total | 374,060,640.28 | 400,779,608.67 |
39. R&D expenses
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Employee remuneration | 202,158,417.41 | 199,256,168.22 |
| Trial production experiment cost and consumption expenditure | 91,696,672.99 | 147,992,946.85 |
| New product design cost | 47,898,023.51 | 37,210,629.96 |
| Patent and external institutional fees | 43,628,185.52 | 45,321,522.66 |
| Others | 30,878,057.56 | 20,329,242.82 |
| Total | 416,259,356.99 | 450,110,510.51 |
40. Financial expenses
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Interest expense of loans and accounts payable | 142,176.50 | 77,737.82 |
| Interest revenue of deposits and receivables | -76,571,126.41 | -32,337,493.71 |
| Interest expense of lease obligations | 9,136,772.28 | 9,999,166.62 |
| Gain or loss on net foreign exchange | -34,786,425.70 | 9,569,135.05 |
| Handling fee and other financial expenses | 4,655,315.42 | 6,209,153.06 |
| Total | -97,423,287.91 | -6,482,301.16 |
41. Other incomes
(1) Classification of other income
| Source of other revenues | Amount incurred during this period | Amount incurred during prior period | Amount included into non-recurring profit or loss of the current year |
| Government subsidies concerning daily activities | 235,160,623.11 | 201,942,112.00 | 198,065,639.28 |
| Withholding and paying tax expense and handling fee refund | 1,534,189.23 | 922,468.37 | 1,534,189.23 |
| Total | 236,694,812.34 | 202,864,580.37 | 199,599,828.51 |
(2) Government subsidies concerning daily activities
| Subsidy item | Amount incurred during this period | Amount incurred during prior period | Related to assets/income |
Project subsidy
| Project subsidy | 33,414,476.64 | 28,741,236.55 | Related to benefits |
| Government reward | 164,637,740.59 | 152,331,864.95 | Related to benefits |
| Tax returns | 37,108,405.88 | 20,869,010.50 | Related to benefits |
| Total | 235,160,623.11 | 201,942,112.00 |
42. Investment income
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Income from long-term equity investments under the equity method | -3,262,848.85 | 1,378,149.04 |
| Investment income from disposal of transactional financial assets | 4,386,059.07 | 1,422,647.44 |
| Interest from term deposit | 34,428,058.56 | 84,434,593.01 |
| Investment income of debt investment during the holding period | 16,631,649.43 | 3,650,461.93 |
| Investment income from disposal of debt investments | 1,864,109.59 | |
| Total | 54,047,027.80 | 90,885,851.42 |
43. Gains from changes in fair value
Unit: RMB
| Resource for gains from changes in fair value | Amount incurred during this period | Amount incurred during prior period |
| Transactional financial assets | 1,382,527.79 | 312,742.31 |
| Total | 1,382,527.79 | 312,742.31 |
44. Credit impairment loss
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Loss for bad debts of other receivables | -1,388,421.68 | 1,312,144.79 |
| Accounts receivable | 35,810,880.38 | -11,351,714.61 |
| Notes receivable | 1,231,422.58 | |
| Financial guarantee contract | 96,856.52 | -1,587,298.24 |
| Total | 34,519,315.22 | -10,395,445.48 |
45. Asset impairment loss
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| II. Loss on Inventory Depreciation and Impairment Loss of Contract Performance Cost | -11,352,717.26 | -14,390,694.58 |
| Total | -11,352,717.26 | -14,390,694.58 |
46. Assets disposal income
Unit: RMB
| Source of assets disposal income | Amount incurred during this period | Amount incurred during prior period |
| Gains from disposal of fixed assets | -2,002,558.23 | -953,474.88 |
| Proceeds from the disposal of the right-of-use assets | 639,053.38 | 848,095.20 |
| Total | -1,363,504.85 | -105,379.68 |
47. Non-operating incomes
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period | Amount included into non-recurring profit or loss of the current period |
| Damage and scrapping gains of non-current assets | 775,693.99 | 541,643.32 | 775,693.99 |
| Including: Gains from scrap of fixed assets | 775,693.99 | 541,643.32 | 775,693.99 |
| Default fine revenue | 11,310,799.88 | 2,180,618.19 | 11,310,799.88 |
| Reversion of estimated liabilities | 6,000,000.00 | ||
| Others | 2,348,632.82 | 5,177,029.42 | 2,348,632.82 |
| Total | 14,435,126.69 | 13,899,290.93 | 14,435,126.69 |
48. Non-operating expenses
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period | Amount included into non-recurring profit or loss of the current period |
| Donation expenditures | 2,663,130.43 | 2,855,363.00 | 2,663,130.43 |
| Damage and scrapping losses of non-current assets | 601,296.71 | 5,604,319.83 | 601,296.71 |
| Including: Losses from scrapping of fixed assets | 601,296.71 | 5,604,319.83 | 601,296.71 |
| Indemnity expenditure | 2,000,000.00 | ||
| Others | 1,199,925.30 | 2,769,960.72 | 1,199,925.30 |
| Total | 4,464,352.44 | 13,229,643.55 | 4,464,352.44 |
49. Income tax expenses
(1) Details
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Current period income tax expenses | 468,983,078.04 | 494,712,607.62 |
| Deferred income tax expenses | 10,050,086.32 | -50,302,556.55 |
| Total | 479,033,164.36 | 444,410,051.07 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB
| Item | Amount incurred during this period |
| Total profit | 2,545,209,603.98 |
| Income tax expenses based on statutory/applicable tax rate | 636,302,401.00 |
| Effect of different tax rate applicable to subsidiaries | -125,323,422.53 |
| Effect of prior income tax reconciliation | 2,491,214.69 |
| Effect of non-taxable income | |
| Effect of non-deductible costs, expenses and losses | 14,344,165.13 |
| Effect of use of the deductible losses of unconfirmed deferred income tax assets in the prior period | |
| Effect of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 2,701,349.79 |
| Deduction for the additional calculation of R&D expense | -38,560,250.65 |
| Effect of use of the deductible losses of unconfirmed deferred income tax assets in the prior period | -13,363,652.98 |
| Effect of tax rate variation on deferred income taxes balance at the beginning of the period | 441,359.91 |
| Income tax expenses | 479,033,164.36 |
50. Other comprehensive incomes
See Note 32 for details.
51. Cash flow statement items
(1) Other cash receipts related to operating activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Receipt of government subsidies | 199,599,828.51? | 182,005,730.83 |
| Receipt of deposit, security and staff reserve fund loan | 26,496,254.72? | 933,932.84 |
| Interest revenues | 66,264,180.37? | 31,866,526.58 |
| Receipt of Deposit security for advance payment financing | 6,000,000.00 | |
| Others | 4,311,161.59? | 9,093,457.04 |
| Total | 296,671,425.19? | 229,899,647.29 |
(2) Other cash payments related to operating activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Cash payment for sales expense | 1,594,110,566.41 | 960,641,231.27 |
| Cash payment for administrative expenses | 95,471,984.49 | 111,700,135.05 |
| Cash payment for R&D expenses | 203,782,142.17 | 251,058,723.03 |
| Donations payment | 2,663,130.43 | 2,855,363.00 |
| Other payments | 9,398,008.04 | 6,505,678.81 |
| Total | 1,905,425,831.54 | 1,332,761,131.16 |
(3) Other cash receipts related to investing activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Recovery of financial products, and principal of term deposit | 3,103,136,438.00 | 1,571,003,018.00 |
| Total | 3,103,136,438.00 | 1,571,003,018.00 |
(4) Other cash payments related to investing activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Cash payment for financial products and term deposit | 3,597,439,490.93 | 1,032,059,354.70 |
| Total | 3,597,439,490.93 | 1,032,059,354.70 |
(5) Other cash receipts related to financing activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Receipt of equity incentive payment | 2,463,000.00? | |
| Total | 2,463,000.00 |
(6) Other cash payments related to financing activities
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Repurchase of shares and handling fees | 162,978,253.14? | 483,916,912.23 |
| Cash paid for repayment of lease obligation principal and interest | 45,922,594.90? | 64,023,220.86 |
| Total | 208,900,848.04 | 547,940,133.09 |
52. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB
| Supplement information | Amount of this period | Amount of last period |
| 1. Reconciliation of net profit to cash flow from operating activities | ||
| Net profit | 2,066,176,439.62 | 1,941,371,527.89 |
| Plus: Impairment provision of assets | 11,352,717.26 | 14,390,694.58 |
| Credit impairment loss | -34,519,315.22 | 10,395,445.48 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 128,264,310.47? | 128,827,418.00 |
| Depreciation of right-of-use assets | 47,571,308.63? | 45,955,247.03 |
| Amortization of intangible assets | 23,555,707.71? | 21,778,005.36 |
| Amortization of long-term unamortized expenses | 405,414.24 | |
| Loss on disposal of fixed assets, intangible assets and other long-term assets ("-" for gains) | 1,363,504.85? | 105,379.68 |
| Fixed assets retirement loss ("-" for gains) | -174,397.28? | 5,062,676.51 |
| Losses from changes in fair value ("-" for loss) | -1,382,527.79? | -312,742.31 |
| Financial expenses ("-" for gains) | -12,246,928.46? | 15,229,621.08 |
| Investments losses ("-" for gains) | -53,905,404.54? | -90,659,995.56 |
| Decrease of deferred income tax assets ("-" for increase) | 10,050,086.32? | -48,995,306.55 |
| Increase of deferred income tax liabilities ("-" for decrease) | -1,307,250.00 | |
| Decrease in inventories ("-" for increase) | 590,241,481.65? | -701,609,059.62 |
| Decrease in operating receivables ("-" for increase) | 751,425,931.09? | -202,060,314.99 |
| Increase in operating payables ("-" for decrease) | -319,790,108.30? | 1,036,624,574.61 |
| Others | -48,027,560.17? | -125,319,766.74 |
| Net cash flows from operating activities | 3,159,955,245.84? | 2,049,881,568.69 |
| 2. Significant investing and financing activities not related to cash receipts and payments | ||
| Conversion of debt into capital | ||
| Convertible bonds to be matured within one year | ||
| Fixed assets under financing lease | ||
| 3. Net changes in cash and cash equivalents: | ||
| Cash at the end of the period | 2,395,932,752.38 | 2,443,731,679.06 |
| Minus: Cash at the beginning of the period | 2,443,731,679.06 | 1,655,785,919.04 |
| Plus: Cash equivalents at the end of the period | ||
| Minus: Cash equivalents at the beginning of the period | ||
| Net increase in cash and cash equivalents | -47,798,926.68 | 787,945,760.02 |
(2) Cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 2,395,932,752.38 | 2,443,731,679.06 |
| Including: Cash on hand | 56,591.47? | 71,122.80 |
| Cash in bank on demand for payment | 2,361,573,752.74? | 2,420,300,342.03 |
| Other monetary capitals on demand for payment | 34,302,408.17? | 23,360,214.23 |
| III. Balance of Cash and Cash Equivalents at the End of the Period | 2,395,932,752.38 | 2,443,731,679.06 |
53. Assets with title or use right restrictions
Unit: RMB
| Item | Closing book value | Reasons for restrictions |
| Monetary capital | 58,000,000.00 | Deposit security for advance payment financing |
| Monetary capital | 12,546,000.00 | Frozen funds of term deposits pledged by issuing bank acceptance bills. |
| Monetary capital | 254,129,233.86 | Bank acceptance bill security |
| Monetary capital | 975,570.02 | Security and frozen funds of e-commerce platforms |
| Monetary capital | 8,541.04 | Write off the frozen amount in the bank account of the branch |
| Monetary capital | 82,189.64 | Frozen funds for the change of industrial and commercial legal person |
| Total | 325,741,534.56 |
54. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
| Item | Closing balance in foreign currencies | Conversion rate | RMB equivalent |
| Monetary capital | |||
| Including: USD | 48,944,996.32 | 6.9646 | 340,882,321.37 |
| EUR | 29,814.66 | 7.4229 | 221,311.24 |
| GBP | 30.07 | 8.3941 | 252.41 |
| VND | 177,936,694,979.50 | 0.000295486 | 52,577,802.25 |
| SGD | 83,483.09 | 5.1831 | 432,701.20 |
| IDR | 25,037,610,788.47 | 0.000445 | 11,141,736.80 |
| Accounts receivable | |||
| Including: USD | 28,426,382.90 | 6.9646 | 197,978,386.35 |
| EUR | 1,023.22 | 7.4229 | 7,595.26 |
| VND | 18,817,173,843.50 | 0.000295486 | 5,560,211.43 |
| IDR | 1,781,095,028.00 | 0.000445 | 792,587.29 |
| Accounts payable | |||
| Including: USD | 434,835.42 | 6.9646 | 3,028,454.77 |
| EUR | 596.00 | 7.4229 | 4,424.05 |
| VND | 45,157,684,069.59 | 0.000295486 | 13,343,463.43 |
| SGD | 39,441.00 | 5.1831 | 204,426.65 |
| IDR | 5,217,251,169.87 | 0.000445 | 2,321,676.77 |
VIII. Change on Merger Scope
1. Change on merger scope for other reasons
Description of the change on the merger scope for other reasons (such as newly established subsidiaries, and liquidation subsidiaries) and relatedconditions:
Supor cancelled Shanghai SEB Electrical Appliances Co., Ltd. (SSEAC) on August 17, 2022. SSEAC will no longer be included in the scope ofbalance sheet consolidation at the end of the year, and its profit statement and cash flow statement from the beginning of the year to the date ofcancellation are included in the merger scope.IX. Equity in Other Entities
1. Equity in subsidiaries
(1) Structure of enterprise Group
| Subsidiary name | Main operating place | Place of registration | Business nature | Shareholding ratio | Acquisition method | |
| Direct | Indirect | |||||
| Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd [Note 1] | Hangzhou | Hangzhou | Manufacturing industry | 100.00% | Establishment | |
| Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd [Note 1] | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
| Supor (Vietnam) Co., Ltd [Note 1] | Vietnam | Vietnam | Manufacturing industry | 100.00% | Establishment | |
| Wuhan Supor Recycling Co., Ltd [Note 1] | Wuhan | Wuhan | Commerce | 100.00% | Establishment | |
| Wuhan Supor Cookware Co., Ltd [Note 1] [Note 2] | Wuhan | Wuhan | Manufacturing industry | 25.00% | 75.00% | Establishment |
| Hangzhou Omegna Commercial Trade Co., Ltd [Note 1] | Hangzhou | Hangzhou | Commerce | 100.00% | Establishment | |
| Shanghai Supor Cookware Marketing Co., Ltd [Note 1] | Shanghai | Shanghai | Commerce | 100.00% | Establishment | |
| Wuhan Supor Pressure Cooker Co., Ltd [Note 1] | Wuhan | Wuhan | Manufacturing industry | 100.00% | Enterprise merger under the same control | |
| Zhejiang Supor Plastic & Rubber Co., Ltd. [Note 1] | Yuhuan | Yuhuan | Manufacturing industry | 100.00% | Enterprise merger under the same control | |
| Yuhuan Supor Cookware Sales Co., Ltd [Note 1] | Yuhuan | Yuhuan | Commerce | 100.00% | Enterprise merger not under the same control | |
| SEADA [Note 1] | Singapore | Singapore | Commerce | 51.00% | Enterprise merger under the same control | |
| AFS Vietnam Management Co., Ltd. [Note 1] [Note 3] | Vietnam | Vietnam | Commerce | 100.00% | Enterprise merger under the same control | |
| Shanghai WMF Enterprise Development Co., Ltd [Note 1] | Shanghai | Shanghai | Manufacturing industry | 100.00% | Establishment | |
| Zhejiang WMF Housewares Co., Ltd [Note 1] | Yuhuan | Yuhuan | Manufacturing industry | 100.00% | Establishment | |
| Zhejiang Shaoxing Supor Household Products Co., Ltd. [Note 1] | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
| Zhejiang Supor Large Kitchen Appliance Co., Ltd. [Note 1] | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
| PT GROUPE SEB INDONESIA MSD [Note 4] | Indonesia | Indonesia | Commerce | 66.67% | Establishment | |
| Zhejiang Supor Water Heater Co., Ltd [Note 1] [Note 5] | Shaoxing | Shaoxing | Manufacturing industry | 52.00% | Establishment | |
| Hainan Supor E-commerce Co., Ltd [Note 1] [Note 6] | Hainan | Hainan | Commerce | 100.00% | Establishment | |
| Hainan Tefal Trading Co., Ltd. [Note 1] [Note 6] | Hainan | Hainan | Commerce | 100.00% | Establishment |
Explanation on shareholding ratio in subsidiary different from voting ratio:
Note 1: The following are abbreviations: Zhejiang Supor Electrical, Shaoxing Supor, Supor Vietnam, Wuhan Recycling, Wuhan Supor Cookware,Omegna, Shanghai Marketing, Wuhan Supor Pressure Cooker, P&R Products, Wuhan Supor, Yuhuan Sales, SEADA, AFS, Shanghai WMFEnterprise Development, Zhejiang WMF Housewares, Shaoxing Supor Housewares, Zhejiang Supor LKA, Supor Water Heater, Hainan Supor E-commerce Company and Hainan Tefal Trading Company.Note 2: The Company is subsidiary of Wuhan Supor Pressure Cooker Co., Ltd.; of which, Wuhan Supor Pressure Cooker Co., Ltd holds 75%shares and the Company holds 25% shares.Note 3: The Company holds 51% equity of SEADA, and AFS is totally held by SEADA.Note 4: PT GROUPE SEB INDONESIA MSD was established jointly by SEADA, a subsidiary of the Company and PT MULTIFORTUNA inIndonesia this year. SEADA holds 66.67% shares and PT MULTIFORTUNA holds 33.33% shares.Note 5: Zhejiang Supor Water Heater Co., Ltd is jointly invested and established by the Company and Supor Group Co., Ltd. The Company holds52% of the shares, and Supor Group Co., Ltd holds 48% of the shares.Note 6: Hainan Supor E-commerce Company and Hainan Tefal Trading Company are totally held by Zhejiang Supor Electrical. As of thedisclosure date of this report, the original Hainan Supor Technology Co., Ltd. has changed its name to Hainan Tefal Trading Co., Ltd., and theabove changes have been registered for industrial and commercial changes on July 26, 2022.
(2) Significant not wholly-owned subsidiaries
Unit: RMB
| Subsidiary name | Holding proportion of non-controlling interest | Profit or loss attributable to non-controlling interest | Dividend declared to non-controlling interest | Balance of minority shareholders' equities at the end of the period |
| SEADA | 49.00% | -229,593.92 | 7,361,632.39 | |
| AFS | 49.00% | 114,580.61 | 987.37 | |
| Indonesian Company | 33.33% | -2,186,293.24 | 1,416,039.47 | |
| Supor Water Heater | 48.00% | 818,219.20 | 27,826,665.51 |
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: RMB
| Subsidiary name | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| SEADA | 3,763,157.10 | 13,869,963.20 | 17,633,120.30 | 14,241,765.93 | 14,241,765.93 | 2,201,136.53 | 7,691,059.63 | 9,892,196.16 | 7,407,010.28 | 7,407,010.28 | ||
| AFS | 3,389,845.91 | 568,960.44 | 3,958,806.35 | 1,070,523.05 | 439,200.49 | 1,509,723.54 | 3,972,561.59 | 410,013.58 | 4,382,575.17 | 976,857.81 | 266,917.90 | 1,243,775.71 |
| Indonesian Company | 19,265,234.13 | 4,387,418.29 | 23,652,652.42 | 3,939,053.83 | 487,307.49 | 4,426,361.32 | 16,835,657.30 | 3,754,654.59 | 20,590,311.89 | 5,525,709.41 | 487,900.80 | 6,013,610.21 |
| Supor Water Heater | 81,886,479.37 | 4,198,450.08 | 86,084,929.45 | 27,883,742.19 | 27,883,742.19 | 82,108,107.10 | 3,773,931.89 | 85,882,038.99 | 29,357,361.93 | 29,357,361.93 |
Unit: RMB
| Subsidiary name | Amount incurred during this period | Amount incurred during prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| SEADA | 501,392.22 | 622,542.22 | 906,168.49 | 173,028.59 | 701,331.09 | -11,140,228.84 | -11,938,239.30 | 535,174.99 |
| AFS | 233,837.98 | 380,224.13 | 985,465.73 | 189,744.25 | 30,242.34 | 104,366.81 | ||
| Indonesian Company | 12,693,249.95 | -3,312,565.51 | -3,243,185.37 | -625,541.56 | 15,751,790.01 | -3,680,740.39 | -3,436,395.54 | -7,578,451.25 |
| Supor Water Heater | 73,168,043.93 | 1,676,510.20 | 1,676,510.20 | -1,453,649.47 | 81,685,332.63 | -177,202.91 | -177,202.91 | -937,523.81 |
2. Equity in joint venture or associated enterprises
(1) Significant joint venture or associated enterprises
| Name of joint venture or associated enterprise | Main operating place | Place of registration | Business nature | Shareholding ratio | Accounting method for the investment in joint venture or associated enterprises | |
| Direct | Indirect | |||||
| Wuhan Anzai Cookware Co., Ltd. | Wuhan | Wuhan | Manufacturing industry | 30.00% | Equity method | |
(2) Main financial information of significant associated enterprise
Unit: RMB
| Closing balance/amount incurred during this period | Opening balance/Amount incurred during prior period | |
| Current assets | 127,719,328.09 | 146,447,108.80 |
| Non-current assets | 41,540,448.40 | 46,881,291.93 |
| Total assets | 169,259,776.49 | 193,328,400.73 |
| Current liabilities | 36,684,125.15 | 49,304,509.03 |
| Non-current liabilities | 540,000.00 | 640,000.00 |
| Total liabilities | 37,224,125.15 | 49,944,509.03 |
| Shareholders' equities attributable to the parent company | 132,035,651.34 | 143,383,891.70 |
| Proportionate share in net assets | 39,610,695.40 | 43,015,167.51 |
| --Goodwill | 22,585,444.13 | 22,585,444.13 |
| Book value of investments in associated enterprises | 62,196,139.53 | 65,600,611.64 |
| Operating income | 212,124,918.12 | 267,794,993.46 |
| Net profit | -11,348,240.36 | 3,840,977.30 |
| Total comprehensive income | -11,348,240.36 | 3,840,977.30 |
X. Risks related to financial instruments(I) Risk management objectives and policiesThe Group aims to seek the appropriate balance between the risks and benefits from its use of financial instruments and to minimize theadverse effects of risks on the Group's financial performance. Based on such objectives, the Group's risk management policies are established toidentify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is the risk that the Company may encounter fluctuation in fair value of financial instruments or future cash flows dueto changes in exchange rate. The Group's foreign currency risk relates mainly to foreign currency monetary assets and liabilities of the Group.When short-term imbalance occurred to foreign currency assets and liabilities, the Group may conduct foreign exchange hedge or trade foreigncurrency at market exchange rate when necessary, in order to maintain the net risk exposure within an acceptable level.Please refer to notes to others - foreign currency monetary items for details in foreign currency financial assets and liabilities at the end of theyear of the Group.Sensitivity analysis:
Assuming that other risk variables other than the exchange rate remain unchanged, the increase in shareholders' equities and net profits dueto the 1% appreciation of RMB due to the change in exchange rate of RMB against all foreign currencies as at 31 December of the Group will beas follows. This influence is translated into RMB at the spot rate on the balance sheet date.
| Shareholders' equities | Net profit | |
| December 31, 2022 | ? | ? |
| USD | 3,877,846.10 | 3,877,846.10 |
| EUR | 1,792.50 | 1,792.50 |
| GBP | 2.15 | 2.15 |
| VND | 358,356.14 | 358,356.14 |
| SGD | 1,893.94 | 1,893.94 |
| IDR | 74,978.65 | 74,978.65 |
| Total | 4,314,869.48 | 4,314,869.48 |
| December 31, 2021 | ? | ? |
| USD | 3,757,640.60 | 3,757,640.60 |
| EUR | 395.31 | 395.31 |
| GBP | 2.17 | 2.17 |
| VND | -93,874.85 | -93,874.85 |
| SGD | -1,854.16 | -1,854.16 |
| IDR | 49,730.04 | 49,730.04 |
| Total | 3,712,039.11 | 3,712,039.11 |
(2) Interest risk - risk for cash flow changes
Interest risk is the risk that the Company may encounter fluctuation in fair value of financial instruments or future cash flows due to marketrate. As of December 31, 2022, balance of borrowings is zero, the Group's gross profits and shareholders' equities will not be significantly affectedby interest risk.
2. Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
The monetary capital of the Group other than cash is mainly deposited in creditworthy financial institutions, and the entrusted financialproducts are issued by creditworthy financial institutions. The management considers that there is not any significant credit risk and it is notexpected to create losses to the Group as a result of default by the counterparty.
The exposure of the maximum credit risk assumed by the Group is the book value of each financial asset in the balance sheet (includingderivative financial instruments). Except for the financial guarantee provided by the Group in Note 14, the Group has not provided any otherguarantee that may expose the Group to credit risk. The exposure of the maximum credit risk assumed by the above financial guarantees on thebalance sheet date has been disclosed in Note 14.
The Company's credit risk is primarily attributable to receivables. In order to control such risks, the Company has taken the followingmeasures:
(1) Receivables financing and notes receivable
Receivables financing and notes receivable of the Group is mainly bank acceptance bill receivable. The Group conducts ongoing monitoringon receivables, to avoid significant risks in bad debts.
(2) Accounts receivable
The Group only conducts business with credible and well-reputed third parties. According to the Group's policies, credit evaluations areperformed on all customers to determine the credit limit and terms applicable to the customers. In addition, the Group conducts ongoing monitoringon accounts receivable, to avoid significant risks in bad debts.(i) Continue to strengthen risk awareness, strengthen risk management of accounts receivable, and strengthen internal control of customer creditpolicy management. Customer credit policy adjustments are required to pass the necessary approval procedures.(ii) Keep detailed business records and accounting work. And use the records as important reference for future credit rating. Keep real time updatingon customers' information and learn their latest credit situation, in order to make suitable credit policies.
The Group's accounts receivable from related party SEB S.A. and its subsidiaries accounted for 50.14% of closing balance (December 31,2021: 70.35%), and the Company's account receivables are expected to have less credit risk. As the Company's credit risks fall into several businesspartners and customers, as of December 31, 2022, 26.43% (December 31, 2021: 11.28%) of the total accounts receivable was due from the fivelargest customers of the Company after deducting receivables from related party SEB S.A. The Company has no significant central credit risk.
3. Other receivables
Other receivables of the Group are mainly export rebate receivable and deposit as security receivable, etc. The Group performed collectivemanagement and ongoing monitoring on such receivables and related business to avoid significant risks in bad debts.(a) Analysis of amount of accounts receivable that is not past due and not impaired, the amount that is past due but not impaired, and the overdueaging of the Group is as follows:
Unit: RMB
| Item | Closing balance | ||||
| Neither past due nor impaired | Past due but not impaired | Total | |||
| Within 1 year | 1-2 years | Over 2 years | |||
| Notes receivable | 27,325,952.95 | 27,325,952.95 | |||
| Receivables financing | 235,957,044.34 | 235,957,044.34 | |||
Other receivables
| Other receivables | 1,237,388.33 | 1,237,388.33 | |||
| Subtotal | 264,520,385.62 | 264,520,385.62 |
(Continued)
| Item | Beginning balance | ||||
| Neither past due nor impaired | Past due but not impaired | Total | |||
| Within 1 year | 1-2 years | Over 2 years | |||
| Notes receivable | 54,879,357.24 | 54,879,357.24 | |||
| Receivables financing | 3,312,225.62 | 3,312,225.62 | |||
Other receivables
| Other receivables | 1,237,370.65 | 1,237,370.65 | |||
| Subtotal | 59,428,953.51 | 59,428,953.51 |
(b) For individually accrued impairment receivables, please refer to related description on Note 7 "4. Accounts receivable" in the notes to thefinancial statements.
3. Liquidity risk
Liquidity risk is the risk that the Group may encounter deficiency of funds in meeting obligations associated with cash or other financialassets settlement. Liquidity risk is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure in collectingliabilities from counterparts of contracts, or early redemption of debts, or failure in achieving estimated cash flows.In order to control such risk, the Group optimizes the structure of assets and liabilities, and finally maintains a balance between financingsustainability and flexibility.Financial instruments classified based on remaining time period till maturity
| Item | Closing balance | ||||
| Book value | Within 1 year | 1-3 years | Over 3 years | Total | |
| Financial assets | |||||
| Monetary capital | 3,563,140,907.75 | 3,563,140,907.75 | 3,563,140,907.75 | ||
Transactional financial assets
| Transactional financial assets | 431,382,527.79 | 431,382,527.79 | 431,382,527.79 | ||
| Notes receivable | 27,325,952.95 | 27,325,952.95 | 27,325,952.95 | ||
| Accounts receivable | 1,926,518,118.38 | 1,926,518,118.38 | 1,926,518,118.38 |
Receivables financing
| Receivables financing | 235,957,044.34 | 235,957,044.34 | 235,957,044.34 | ||
| Other receivables | 16,373,697.26 | 16,373,697.26 | 16,373,697.26 |
Other debt investment
| Other debt investment | 1,056,952,424.68 | 33,150,000.00 | 1,101,237,500.00 | 1,134,387,500.00 | |
| Other current assets [note] | 381,101,095.89 | 381,101,095.89 | 381,101,095.89 | ||
| Subtotal | 7,638,751,769.04 | 6,614,949,344.36 | 1,101,237,500.00 | 7,716,186,844.36 |
Financial liabilities
| Financial liabilities | |||||
| Notes payable | 1,057,611,900.00 | 1,057,611,900.00 | 1,057,611,900.00 | ||
| Accounts payable | 2,635,521,548.19 | 2,635,521,548.19 | 2,635,521,548.19 |
Other payables
| Other payables | 137,729,222.63 | 137,729,222.63 | 137,729,222.63 | ||
| Other current liabilities | 22,383,800.87 | 22,383,800.87 | 22,383,800.87 | ||
| Lease obligation | 192,704,856.82 | 48,581,182.84 | 108,232,041.03 | 45,611,911.42 | 202,425,135.29 |
Subtotal
| Subtotal | 4,045,951,328.51 | 3,901,827,654.53 | 108,232,041.03 | 45,611,911.42 | 4,055,671,606.98 |
Note: Other current assets are term deposits for the purpose of obtaining benefits.(Continued)
| Item | Beginning balance | ||||
| Book value | Within 1 year | 1-3 years | Over 3 years | Total | |
| Financial assets | |||||
| Monetary capital | 2,654,052,417.47 | 2,654,052,417.47 | 2,654,052,417.47 | ||
| Transactional financial assets | 180,312,742.31 | 180,312,742.31 | 180,312,742.31 | ||
Notes receivable
| Notes receivable | 54,879,357.24 | 54,879,357.24 | 54,879,357.24 | ||
| Accounts receivable | 2,716,945,985.33 | 2,716,945,985.33 | 2,716,945,985.33 |
Receivables financing
| Receivables financing | 3,312,225.62 | 3,312,225.62 | 3,312,225.62 | ||
| Other receivables | 12,159,756.67 | 12,159,756.67 | 12,159,756.67 | ||
| Other debt investment | 298,191,205.49 | - | 322,745,000.00 | 322,745,000.00 |
Other current assets [note]
| Other current assets [note] | 1,863,761,369.84 | 1,863,761,369.84 | 1,863,761,369.84 | ||
| Subtotal | 7,783,615,059.97 | 7,485,423,854.48 | 322,745,000.00 | 7,808,168,854.48 | |
| Financial liabilities | ? | ? | ? |
Notes payable
| Notes payable | 500,250,000.00 | 500,250,000.00 | 500,250,000.00 | ||
| Accounts payable | 3,769,700,826.50 | 3,769,700,826.50 | 3,769,700,826.50 | ||
| Other payables | 110,605,272.21 | 110,605,272.21 | 110,605,272.21 |
Other current liabilities
| Other current liabilities | 53,979,357.24 | 53,979,357.24 | 53,979,357.24 | ||
| Lease obligation | 186,611,554.59 | 37,993,728.54 | 98,489,145.81 | 75,992,456.73 | 212,475,331.08 |
| Subtotal | 4,621,147,010.54 | 4,472,529,184.49 | 98,489,145.81 | 75,992,456.73 | 4,647,010,787.03 |
Note: Other current assets are term deposits for the purpose of obtaining benefits.(II) Transfer of financial assetsTransferred but not wholly derecognized financial assetsFor details, please refer to "3. Notes receivable " in Note 7 to the financial statements.XI. Disclosure of fair value
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: RMB
| Item | Fair value as of the balance sheet date | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Recurring Fair Value Measurement | -- | -- | -- | -- |
| (I) Transactional financial assets | 431,382,527.79 | 431,382,527.79 | ||
| (II) Other debt investments | 1,056,952,424.68 | 1,056,952,424.68 | ||
| (III) Receivables financing | ||||
| (1) Notes receivable | 235,957,044.34 | 235,957,044.34 | ||
| II. Non-continued Measurement of Fair Value | -- | -- | -- | -- |
2. Basis for determining the market value of continuous and non-continuous Level 1 fair value measurement itemsNone
3. Qualitative and quantitative information of continuous and non-continuous Level 2 fair value measurement items,valuation techniques adopted and important parametersThe fair value of other debt investments and receivables financing is calculated and determined by the method of discounted future cash flows.
4. Qualitative and quantitative information of continuous and non-continuous Level 2 fair value measurement items,valuation techniques adopted and important parametersThe fair value of the financial products, in the financial assets measured at the fair value with their changes included into the current profits andlosses, is determined by the method of discounted future cash flows calculated by the agreed expected rate of return.
5. Fair value of the financial assets and financial liabilities not measured at fair value
As at December 31, there was not a significant difference between the book value and fair value of the Group's various financial assets and financialliabilities.XII. Related Parties and Related Transactions
1. Parent company
| Parent company name | Place of registration | Business nature | Registered capital | Holding proportion over the Company (%) | Holding proportion over the Company (%) |
| SEB INTERNATIONALE S.A.S | France | Investment company | EUR 830 million | 82.44% | 82.44% |
Explanation on the parent company of the GroupBusiness scope of the parent company: equity participation in all kinds of French and overseas enterprises (regardless operation purpose), namely,purchase and subscription of shares, bonds, company shares and interest, various securities and marketable securities, and transfer of such securitiesor notes, all financial operations related to equity participation, purchase, manufacturing and selling of home appliances for the purpose ofdistribution and rendering of relevant services, all activities directly or indirectly contributing to the realization of these operations, particularly inthe areas of movable properties, real estate, finance, commerce and industry operation.The Group's final controlling party is SEB S.A.
2. Company's subsidiaries
See Note 9 1 "Equity in Subsidiaries" for details on the Company's subsidiaries for details.
3. Joint ventures and associated enterprises of the Company
See Note 9 2 "Equity in Joint Ventures or Associated Enterprises" for details on the Company's significant joint ventures and associates for details.Details of other joint ventures or associated enterprises carrying out related party transactions with the Company in current period or in precedingperiod but with balance in current period are as follows:
| Name of joint venture or associated enterprise | Relationships with the Company |
| Wuhan Anzai Cookware Co., Ltd. | Associated enterprise |
Other remarks:
4. Other related parties of the Company
| Related party | Relationship between other related parties and the Company |
| SEB S.A. | Final controlling shareholder |
| SEB ASIA LTD. | Same controlling shareholder |
| TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder |
| ALL-CLAD METALCRAFTERS LLC | Same controlling shareholder |
| S.A.S. SEB | Same controlling shareholder with the controlling shareholder |
| SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder |
| LAGOSTINA S.P.A. | Same controlling shareholder |
| GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder |
| GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder |
| SEB DEVELOPPMENT SAS | Same controlling shareholder with the controlling shareholder |
| IMUSA USA LLC | Same controlling shareholder |
| CALOR SAS | Same controlling shareholder with the controlling shareholder |
| Supor Group Co., Ltd. | Company controlled by related natural person |
| Zhejiang Supor Sanitary Ware Co., Ltd. | Company controlled by related natural person |
| ETHERA | Same controlling shareholder with the controlling shareholder |
| WMF CONSUMER ELECTRIC GMBH | Same controlling shareholder |
| WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder |
| WMF GROUPE GMBH | Same controlling shareholder |
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | Same controlling shareholder |
| GROUPE SEB SINGAPORE | Same controlling shareholder |
| GROUPE SEB THAILAND | Same controlling shareholder |
| Emsa Taicang Co., Ltd. | Same controlling shareholder |
| Heshan Demei Tableware Co., Ltd. | Same controlling shareholder |
| ROWENTA WERKE GMBH | Same controlling shareholder with the controlling shareholder |
| EMSA GMBH | Same controlling shareholder |
| GROUPE SEB USA | Same controlling shareholder |
| GROUPE SEB CANADA | Same controlling shareholder |
| GROUPE SEB ANDEAN S.A. | Same controlling shareholder |
| GROUPE SEB IBERICA | Same controlling shareholder |
| GROUPE SEB SCHWEIZ GMBH | Same controlling shareholder |
| SEB DO BRASIL PRODS.DOM.LTDA | Same controlling shareholder |
| GROUPE SEB KOREA,LTD | Same controlling shareholder |
| GROUPE SEB MALAYSIA | Same controlling shareholder |
| Saichuang (Zhejiang) Technology Co., Ltd. | Same controlling shareholder |
| Zhejiang Nanyang Pharmaceutical Sales Co., Ltd. | Company controlled by related natural person |
| Zhejiang Sukean Pharmaceutical Co., Ltd. | Company controlled by related natural person |
5. Related transactions
(1) Related transactions in the purchase and sale of commodities, and provision and acceptance of labor servicesPurchase of commodities and receiving of services
Unit: RMB
| Related parties | Contents of related transaction | Amount incurred during this period | Transaction quota granted | Exceeding transaction limit or not | Amount incurred during prior period |
| Wuhan Anzai Cookware Co., Ltd. | Finished products | 61,178,333.58 | No | 156,840,291.45 | |
| Wuhan Anzai Cookware Co., Ltd. | Accessories | 150,874,250.24 | No | 105,258,885.29 | |
| GROUPE SEB EXPORT | Finished products | 7,063,804.76 | No | 4,562,743.08 | |
| GROUPE SEB EXPORT | Accessories | 73,815.50 | No | ||
| TEFAL S.A.S. | Accessories | 7,660,045.82 | No | 22,895,481.55 | |
| LAGOSTINA S.P.A. | Finished products | 2,194,942.00 | No | 1,091,606.38 | |
| SEB INTERNATIONAL SERVICE S.A.S. | Accessories | 612,783.70 | No | 87,255.27 | |
| SEB INTERNATIONAL SERVICE S.A.S. | Finished products | 29,331.02 | No | 42,005.31 | |
| SEB ASIA LTD. | Finished products | 462,307.92 | No | 1,503,593.79 | |
| GROUPE SEB MOULINEX | Accessories | 3,255,315.40 | No | 9,634,219.00 | |
| CALOR SAS | Accessories | No | 758,681.93 | ||
| Heshan Demei Tableware Co., Ltd. | Finished products | 312,749.25 | No | 357,692.92 | |
| GROUPE SEB SINGAPORE | Finished products | No | 71,089.76 | ||
| GROUPE SEB THAILAND | Finished products | 445,146.13 | No | 847,324.66 | |
| Emsa Taicang Co., Ltd. | Finished products | 234,955.75 | No | ||
| ETHERA | Accessories | 317,859.36 | No | 2,236,242.94 | |
| WMF GROUPE GMBH | Finished products | 26,423,343.21 | No | 47,851,816.22 | |
| WMF Consumer Goods (Shanghai) Co, Ltd. | Finished products | 37,726.20 | No | 156,628.32 | |
| Supor Group Co., Ltd. | Finished products | 16,092.68 | No | 121,869.96 | |
| GROUPE SEB MALAYSIA | Finished products | No | 113,777.63 |
Sale of commodities and rendering of services
Unit: RMB
| Related parties | Contents of related transaction | Amount incurred during this period | Amount incurred during prior period |
| SEB ASIA LTD. | Finished products | 4,535,035,472.36 | 6,673,299,860.22 |
| SEB ASIA LTD. | Accessories | 3,163,380.97 | 5,423,325.41 |
| S.A.S. SEB | Finished products | 13,690,166.60 | 22,578,030.75 |
| S.A.S. SEB | Accessories | 673,421.95 | 1,205,129.20 |
| TEFAL S.A.S. | Finished products | 7,069,905.25 | 10,919,945.13 |
| TEFAL S.A.S. | Accessories | 13,666,486.47 | 18,127,775.58 |
| GROUPE SEB MOULINEX | Finished products | 18,525,086.93 | 38,926,768.09 |
| Supor Group Co., Ltd. | Finished products | 4,424,241.51 | 3,811,250.38 |
| SEB INTERNATIONAL SERVICE S.A.S. | Finished products | 918,938.68 | |
| SEB INTERNATIONAL SERVICE S.A.S. | Accessories | 16,484,863.62 | 15,535,591.67 |
| LAGOSTINA S.P.A. | Finished products | 49,269.52 | 139,902.42 |
| LAGOSTINA S.P.A. | Accessories | 1,233,592.65 | 1,347,633.19 |
| ALL-CLAD METALCRAFTERS LLC | Finished products | 355,563.53 | |
| IMUSA USA LLC | Finished products | 16,285,333.26 | 8,032,879.02 |
| IMUSA USA LLC | Accessories | 33,167.16 | |
| WMF Consumer Goods (Shanghai) Co, Ltd. | Finished products | 351,115.82 | 500,029.50 |
| GROUPE SEB CANADA | Finished products | 14,164,254.85 | 14,214,992.15 |
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | Finished products | 24,481,079.33 | 25,160,890.52 |
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | Accessories | 11,237.73 | 11,451.68 |
| CALOR SAS | Finished products | 24,113,691.00 | |
| GROUPE SEB ANDEAN S.A. | Accessories | 3,513,457.99 | 865,370.01 |
| Wuhan Anzai Cookware Co., Ltd. | Finished products | 151,339.61 | |
| Wuhan Anzai Cookware Co., Ltd. | Accessories | 42,226.55 | |
| Zhejiang Sukean Pharmaceutical Co., Ltd. | Finished products | 154,159.29 | |
| Zhejiang Nanyang Pharmaceutical Sales Co., Ltd. | Finished products | 550,425.66 |
Explanation on related transactions in the purchase and sale of commodities, and provision and acceptance of labor services
(2) Related party leases
The Company acts as the leasee:
Unit: RMB
| Lessor | Lessee | Types of leased assets | Rent costs of short-term leases and low-value asset leases with simplified treatment (if applicable) | Variable lease payments not included in the measurement of lease obligation (if applicable) | Rentals | Interest expense of lease obligation undertaken | Increased right-of-use asset | |||||
| Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | |||
| Supor Group | The Company | Real estate | 107,523.62 | |||||||||
| Shaoxing Supor | 870,063.32 | 848,842.27 | 132,931.94 | 167,666.99 | 3,987,385.03 | |||||||
| Co., Ltd. | Zhejiang Supor Electrical | 7,867,189.39 | 8,369,625.18 | 1,267,847.07 | 1,644,635.19 | 41,784,917.90 | ||||||
| Wuhan Supor Cookware | 81,420.00 | 2,679,300.75 | 2,647,142.15 | 372,324.41 | 512,987.90 | 12,199,661.48 | ||||||
| Shaoxing Supor Housewares | 672,975.24 | 77,912.11 | 5,712,294.54 | |||||||||
| P&R Products | 68,114.29 | 59,600.00 | 40,000.00 | 5,138.94 | 149,565.14 |
(3) Fund allocation
Unit: RMB
| Related parties | Borrowed/lent amount | Start date | Expiry date | Notes |
| Borrowing: | ? | ? | ? | ? |
| SEB S.A. | 6,000,990.92 | February 15, 2022 | Open-ended | Loan |
(4) Key management's emoluments
| Item | Amount incurred during this period | Amount incurred during prior period |
| Key management's emoluments | RMB 15,193,300 | RMB 14,815,300 |
| Key management's Share-based payment expenses | RMB 4,425,300 | RMB 1,398,100 |
(5) Other related transactions
① Water and electricity fee Unit: RMB
| Selling parties | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| Supor Group Co., Ltd. | Zhejiang Supor Electrical | 106,169.13 | 481,419.80 |
| Wuhan Supor Cookware | 142,934.79 | ||
| Shaoxing Supor | 61,419.20 |
② Property management, maintenance and berth fees Unit: RMB
| Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| Supor Group Co., Ltd. | The Company | 182,857.14 | |
| Zhejiang Supor Electrical | 308,571.43 | 144,761.90 | |
| Wuhan Supor Cookware | 354,285.71 | 164,285.71 |
③ Consulting fee Unit: RMB
| Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| SEB ASIA LTD. | The Company | 1,061,677.75 | 687,084.08 |
| Wuhan Supor Cookware | 774,741.96 | 352,826.96 | |
| Shaoxing Supor | 545,185.33 | 501,385.73 | |
| Zhejiang Supor Electrical | 487,799.51 | 315,687.32 |
④ Cost of international shopping center Unit: RMB
| Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| SEB DEVELOPPMENT SAS | Shaoxing Supor | 358,098.81 |
| Zhejiang Supor Electrical | 281,363.35 | |
| Wuhan Supor Cookware | 5,919,010.41 |
⑤ R&D and Human Resources services Unit: RMB
| Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| Zhejiang Supor Electrical | Saichuang (Zhejiang) Technology Co., Ltd. | 483,081.29 | 456,149.12 |
| AFS | GROUPE SEB VIETNAM JOINT STOCK COMPANY | 3,023,118.45 | 3,221,505.69 |
| Saichuang (Zhejiang) Technology Co., Ltd. | Shaoxing Supor | 3,018,082.00 | 2,629,960.37 |
⑥ Warehousing service Unit: RMB
| Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
| The Company | SEB ASIA LTD. | 1,691,731.29 | 1,710,613.03 |
| Wuhan Supor Cookware | 629,912.40 | 629,912.40 | |
| Zhejiang Supor Electrical | 677,368.19 | ||
| Shaoxing Supor | 1,764,063.02 | 2,058,892.25 |
⑦ Software use license, etc. Unit: RMB
| Service renderer | Purchasing parties | 2022 | 2021 |
| SEB DEVELOPPMENT SAS | The Company | 1,629,059.37 |
⑧ Pursuant to the Technical License Contract entered into between Wuhan Supor Cookware Co., Ltd and S.A.S SEB on December 29, 2013,S.A.S SEB licensed Wuhan Supor Cookware Co., Ltd compensated use of its patent of Household Appliance for Food Cooking under Pressurewith Elastomer Safety Valve and other four utility patents. According to related terms in the contract signed by both parties, use charges are accruedat 3% of revenue from sales of products licensed. In the current period, Wuhan Supor Cookware Co., Ltd should pay S.A.S SEB technology usecharges of RMB 526,305.07 (2021: RMB 959,469.90), and as of December 31, 2022, a balance of RMB 94,651.13 has not been paid (December31, 2021: RMB 59,092.58).
⑨ Pursuant to the Trademark License entered into between Wuhan Supor Cookware Co., Ltd and LAGOSTINA SPA. on December 15, 2014,LAGOSTINA SPA licensed Wuhan Supor Cookware Co., Ltd for compensated use of its trademark "LAGE". According to related terms in thecontract signed by both parties, use charges are accrued at 4% of revenue from sales of products licensed. In the current period, Wuhan SUPORshould pay LAGOSTINA SPA. trademark use charges of RMB 43,093.45 (2021: RMB 242,952.24), and as of December 31, 2022, a balance ofRMB 1,395,659.11 has not been paid (December 31, 2021: RMB 1,352,565.66).⑩Pursuant to the Trademark License entered into between Omegna and LAGOSTINA SPA. on December 5, 2016, LAGOSTINA SPA licensedOmegna for compensated use of its trademark "LAGE". According to related terms in the contract signed by both parties, use charges are accruedat 4% of revenue from sales of products licensed. In the current period, Omegna should pay LAGOSTINA SPA. trademark use charges of RMB66,105.73 (2021: RMB 296,857.06), and as of December 31, 2022, a balance of RMB 3,989,846.80 has not been paid (December 31, 2021: RMB3,923,741.07).? Shaoxing Supor purchased and used particles product of air purifier and relevant technology in accordance with Agreement on Purchase andUsing for Particles of Air Purifier signed by Shaoxing Supor on April 25, 2016 with ETHERA. According to relevant terms in the contract signedby both parties, Shaoxing Supor should pay technology transfer fee RMB 22,268.70 (2021: RMB 26,477.63) to ETHERA in current period, which
was calculated as per corresponding unit price of actual total sales. Until December 31, 2022, the remaining RMB 4,424.04 had not been paid yet(December 31, 2021: RMB 4,508.27).
6. Receivables and payables by related parties
(1) Items receivable
Unit: RMB
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable: | SEB ASIA LTD. | 977,231,667.49 | 34,203,108.36 | 1,997,332,966.57 | 79,893,318.66 |
| S.A.S. SEB | 838,044.35 | 29,331.55 | 6,147,139.48 | 245,885.58 | |
| TEFAL S.A.S. | 3,220,589.96 | 112,720.65 | 8,875,016.25 | 355,000.65 | |
| SEB INTERNATIONAL SERVICE S.A.S. | 3,296,335.17 | 115,371.73 | 4,644,231.13 | 185,769.25 | |
| GROUPE SEB MOULINEX | 1,423,208.22 | 51,536.52 | 11,459,698.09 | 458,387.92 | |
| IMUSA USA LLC | 3,605,881.82 | 126,205.86 | 1,014,864.16 | 40,594.57 | |
| Supor Group Co., Ltd. | 11,010.00 | 550.50 | 4,899.50 | 244.98 | |
| WMF Consumer Goods (Shanghai) Co, Ltd. | 152,845.67 | 5,349.60 | 186,011.75 | 7,440.47 | |
| GROUPE SEB CANADA | 1,896,331.22 | 66,371.59 | 4,763,025.58 | 190,521.02 | |
| GROUPE SEB VIETNAM JOINT STOCK COMPANY | 14,774,836.65 | 517,119.28 | 14,256,667.31 | 570,266.69 | |
| GROUPE SEB ANDEAN S.A. | 112,622.53 | 3,941.79 | 832.03 | 33.28 | |
| Wuhan Anzai Cookware Co., Ltd. | 16,500.00 | 825.00 | |||
| LAGOSTINA S.P.A. | 173,612.18 | 6,076.43 | 563,856.28 | 22,554.25 | |
| Saichuang (Zhejiang) Technology Co., Ltd. | 261,025.21 | 9,135.88 | 290,340.44 | 11,613.62 | |
| Total | 1,007,014,510.47 | 35,247,644.74 | 2,049,539,548.57 | 81,981,630.94 | |
| Advance payment: | Supor Group Co., Ltd. | 171,428.57 | 71,520.00 | ||
| Total | 171,428.57 | 71,520.00 | |||
| Other receivables: | Supor Group Co., Ltd. | 145,000.00 | 56,250.00 | 145,000.00 | 31,250.00 |
| Total | 145,000.00 | 56,250.00 | 145,000.00 | 31,250.00 | |
(2) Payables
Unit: RMB
| Items | Related parties | Ending book balance | Beginning book balance |
| Accounts payable: | Wuhan Anzai Cookware Co., Ltd. | 17,508,276.00 | 25,709,129.31 |
| WMF GROUPE GMBH | 6,861,332.34 | 9,027,718.65 | |
| GROUPE SEB EXPORT | 1,836,117.60 | ||
| TEFAL S.A.S. | 2,376,975.15 | 6,211,218.34 |
| S.A.S. SEB | 94,651.13 | 61,735.76 | |
| LAGOSTINA S.P.A. | 5,386,105.91 | 6,012,269.93 | |
| GROUPE SEB MOULINEX | 131,149.87 | 3,082,576.38 | |
| GROUPE SEB THAILAND | 43,382.55 | 111,031.93 | |
| GROUPE SEB SINGAPORE | 1,147,747.82 | ||
| SEB INTERNATIONAL SERVICE S.A.S. | 114,692.08 | 10,454.54 | |
| ETHERA | 4,424.04 | 156,257.68 | |
| Saichuang (Zhejiang) Technology Co., Ltd. | 578,673.08 | 282,079.64 | |
| Supor Group Co., Ltd. | 3,621,694.75 | ||
| WMF Consumer Goods (Shanghai) Co, Ltd. | 42,630.61 | ||
| Heshan Demei Tableware Co., Ltd. | 53,230.00 | ||
| Total | 35,031,640.36 | 55,433,914.73 | |
| Contract liabilities: | Supor Group Co., Ltd. | 6,208,467.16 | 405,442.77 |
| Zhejiang Nanyang Pharmaceutical Sales Co., Ltd. | 305.31 | ||
| Total | 6,208,467.16 | 405,748.08 | |
| Other payables: | Wuhan Anzai Cookware Co., Ltd. | 50,000.00 | |
| SEB S.A. | 13,886,668.74 | 6,839,932.07 | |
| Total | 13,936,668.74 | 6,839,932.07 | |
| Lease obligation: | Supor Group Co., Ltd. | 36,660,807.71? | 43,864,152.61 |
| Total | 36,660,807.71? | 43,864,152.61 |
XIII. Share-based Payment
1. Overall information
? Applicable □ Not applicable
Unit: RMB
| Total equity instruments granted in current period | 2,463,000.00 |
| Total equity instruments exercised in current period | 0.00 |
| Total equity instruments expired in current period | 24,000.00 |
| The range of exercise price of stock options issued by the Company at the end of the period and the remaining period of the contract | 2021 Equity Incentive Plan: RMB 1/share, 3.08 years 2022 Equity Incentive Plan: RMB 1/share, 3.86 years |
Other remarks:
Pursuant to the 2021 Restricted Stock Incentive Plan (Revised Draft) of Zhejiang Supor Co., Ltd. and Its Summary (hereinafter referred to as"2021 Stock Incentive Plan") deliberated and approved in the Third Interim General Meeting of Shareholders 2021 via deliberation held onDecember 30, 2021, the Company was to grant 1,209,500 restricted shares to incentive objects, and repurchased 1,209,500 share capitalsuccessfully during the period from December 15, 2021 to December 21, 2021. The Company granted 1,209,500 shares at a price of RMB 1 pershare on January 6, 2022.
Pursuant to the Proposal for 2022 Restricted Stock Incentive Plan (Draft) of Zhejiang Supor Co., Ltd. and Its Summary (hereinafter referredto as "2022 Stock Incentive Plan") deliberated and approved in the First Interim General Meeting of Shareholders 2022 via deliberation held onSeptember 21, 2022, the Company was to grant 1,332,500 restricted shares to incentive objects, and repurchased 1,332,500 share capitalsuccessfully during the period from May 31, 2022 to July 31, 2022. The Company granted 1,253,500 shares at a price of RMB 1 per share onOctober 12, 2022.
The incentive plan for the year of 2021 is valid for 4 years from the date of completion for the registration of the restricted stock granted, ofwhich: the sales restriction periods shall be 24 months and 36 months respectively from the date of completion for the grant registration. If theconditions for lifting the restriction are met, the restricted shares shall be lifted in two phases, that is, upon expiry of 24 months and 36 monthsfrom the date of completion for the grant registration, for 50% and 50% of the total restricted shares applied for restriction lifting, respectively. Asof December 31, 2022, the remaining period of the above incentive plan is 3.08 years.
The incentive plan for the year of 2022 is valid for 4 years from the date of completion for the registration of the restricted stock granted, ofwhich: the sales restriction periods shall be 24 months and 36 months respectively from the date of completion for the grant registration. If theconditions for lifting the restriction are met, the restricted shares shall be lifted in two phases, that is, upon expiry of 24 months and 36 monthsfrom the date of completion for the grant registration, for 50% and 50% of the total restricted shares applied for restriction lifting, respectively. Asof December 31, 2022, the remaining period of the above incentive plan is 3.86 years.
The 12th Session of the Seventh Board of Directors adopted the Proposal on Repurchasing and Canceling a Part of Restricted Stock. Fordisqualification of three Incentive Objects due to their resignation, the Company has repurchased and canceled 24,000 shares of Restricted Stockat the price of RMB 1 per share.
2. Equity-settled share-based payment
? Applicable □ Not applicable
Unit: RMB
| Determination method for fair value of equity instruments on grant date | According to the market price on the grant date |
| Determination method for the optimal estimate of the number of equity instruments expected to vest | Based on the corresponding equity instruments of incentive targets, the performance of the Company and the forecast of future performance of the Company |
| The significant difference between this period estimate and last period | None |
| Capital reserve accumulated due to equity-settled share-based payment | 54,847,235.98 |
| Total expenses incurred due to equity-settled share-based payment transactions | 54,847,235.98 |
Other remarks:
Note 1. According to the 2021 Annual Incentive Plan approved by the Third Interim General Meeting of Shareholders held on December 30, 2021,on January 6, 2022, the Company granted 1,209,500 shares of the Company repurchased in 2021 to incentive targets, with the grant price of RMB
1.00 per share, decreasing the treasury shares by RMB 76,159,897.25, which reverse the share capital premium RMB 52,997,061.77 and theinsuffient part reverse undistributed profit at the beginning of the year of RMB 21,953,335.48. At the same time, the company confirmed the stockrepurchase obligation and increased treasury shares by RMB 1,209,500.00.According to the 2022 Stock Incentive Plan adopted on the Company's First Interim General Meeting of Shareholders in 2022 on September 21,2022, the Company repurchased 1,332,500 shares of its own stocks for the plan through centralized competitive bidding with self-owned capital,adding RMB 69,398,019.65of treasury shares. On October 12, 2022, the Company granted 1,253,500 shares to the incentive object at a grant priceof RMB 1.00 per share, with a decrease of treasury share value of RMB 65,668,429.65, and reverse undistributed profit at the beginning of theyear of RMB 64,414,929.65. At the same time, the company confirmed its stock repurchase obligation and increased its treasury stock by RMB1,253,500.00.
2. The impact of 2021 Equity Incentive Plan on the capital reserve is RMB 0 at the beginning of the period, and with an accrual of RMB40,084,396.00 in the year, amounting to an accrued amount of RMB 40,084,396.00.
The impact of 2022 Equity Incentive Plan on the capital reserve is RMB 0 at the beginning of the period, and with an accrual of RMB 14,762,839.98in the year, amounting to an accrued amount of RMB 14,762,839.98.
XIV. Commitments and Contingencies
1. Contingencies
(1) Significant contingencies at the balance sheet date
Contingent liabilities arising from pending litigation and arbitration and their financial impact
In 2016, a non-governmental patent holder filed a lawsuit to the subsidiary Shaoxing Supor in the name of infringing its patent. In 2020, therelevant patents have been declared invalid by the Patent Reexamination Board of the State Intellectual Property Office, so the litigation riskdecreased. This case has not been settled yet. Based on the principle of conservatism, the Company still retains an estimated liability of RMB 5.15million (December 31, 2021: RMB 5.15 million) on December 31, 2022. In 2020, export customers filed legal proceedings against Shaoxing Supor,a subsidiary, on the grounds of user disputes. This case has not been settled yet. Based on the principle of conservatism, the Company still retainsan estimated liability of RMB 4 million (December 31, 2021: RMB 4 million) on December 31, 2022. In 2021, export customers filed claims forquality problems against Shaoxing Supor, a subsidiary, on the grounds of user disputes. This case has not been settled yet. Based on the principleof conservatism, the Company still retains an estimated liability of RMB 2 million (December 31, 2021: RMB 2 million) on December 31, 2022.Contingent liabilities formed by financial guarantee and their financial impactThe Group signs tripartite acceptance agreements with distributors and banks, and the Group provides financing guarantee for the banks toissue bank acceptance bills to the distributors. In the event that the Group endorses and assigns an acceptance bill obtained by the Group, and ifthe distributor fails to repay the difference between the security and the amount of the acceptance bill after the maturity of the acceptance bill, theGroup will bear part of the loss of the difference that the bank has not recovered from the distributor. As at December 31, 2022, the risk exposureundertaken by the Group was RMB 298,088,343.35 (December 31, 2021: RMB 317,459,647.06). and the estimated liabilities accrued by theCompany under the financial guarantee contracts for the risk exposure amounted to RMB 1,490,441.72 (December 31, 2021: RMB 1,587,298.24).
(2) A statement shall be given even if the Company has no significant contingencies to disclose.
The Company has no significant contingencies to disclose.
XV. Events after the Balance Sheet Date
1. Profit distribution situation
According to the profit distribution plan for 2022 adopted at the 19th Session of the Seventh Board of Directors of the Company on March29, 2023, profit distribution is made based on the 805,116,907 shares at the end of 2022 (total capital stock of 808,654,476 shares at the end of2022 deducted by 3,537,569 shares of repurchased shares in the Company’s special stock repurchase account), a cash dividend of RMB 30.30(tax-inclusive) per 10 shares is distributed to all shareholders, and the total cash dividend is RMB 2,439,504,228.21. No bonus share will bedistributed or conversion from capital reserves to share capital is made this year. The undistributed profits of parent company at the end of thereporting period were RMB 4,331,212,701.66, including the dividends to be distributed, i.e., RMB 2,439,504,228.21.
During the period from the disclosure of this profit distribution plan to the actual implementation date, if the Company's share capital changesdue to conversion of convertible bonds into stocks, share repurchases, equity incentive exercise, and refinancing and new share listing, it will beexecuted based on the changed share capital, and the above distribution ratio remains unchanged.
This profit distribution plan shall be submitted to the Annual General Meeting of Shareholders for 2022 Fiscal Year for approval after adopted
by the Board of Directors.
XVI. Other Important Matters
1. Segment information
(1) Determination basis and accounting policy of report segment
The Group establishes operating segment according to internal organizational structure, management requirement and internal report system;determines report segment and disclose segment information based on Operating Segment.Operating Segment refers to the Group's organization meeting following conditions: (1) The organization can yield income and cost in dailyactivity; (2) The Group's management can appraise operating result of the organization regularly, so as to allocate resources on a targeted basisand evaluate its performance; (3) The Group can obtain financial condition, operating result, cash flow and other relevant accounting informationof the organization. Two or more operating segments, which have similar economic characteristics and meet a certain condition, can be combinedinto an operating segment.The preparation of branch reports is conducted with the revenue of trans-branch transaction measured at the actual transaction price. Theaccounting policy for branch report preparation is consistent with that used in Supor's financial statement.
The Group, with main product focused on cookware and SDA (small domestic appliances) in kitchen, establishes report segment based onproduct and geographic segments and assets and liabilities shared by product segments is unable to be clearly distinguished.
(2) Financial information of reportable segments
Unit: RMB
| Item | Cookware | Electrical products | Others | Inter-segment offsetting | Total |
| Revenue from main business | 6,190,244,720.49 | 13,817,030,898.77 | 150,594,465.35 | 210,561,092.56 | 19,947,308,992.05 |
| Cost of main business | 4,383,104,883.51 | 10,474,846,879.11 | 132,486,379.43 | 210,635,554.12 | 14,779,802,587.93 |
(3) Other explanations
② Geographic segment
Information on the Group's income from external transactions and non-current assets (excluding financial assets and deferred income taxassets, the same below) by region is shown in the following table. Income from external transactions is divided according to the location ofcustomers who receive services or purchase products. Non-current assets are classified as per the physical location of the assets (for fixed assetsand construction in progress) or the location where they are allocated to related business (for intangible assets) or the location of joint venturesand associated enterprises.
| Item | Domestic | Foreign | Inter-segment offsetting | Total |
| Revenue from main business | 14,796,684,166.65 | 5,164,864,945.22 | 14,240,119.82 | 19,947,308,992.05 |
| Cost of main business | 10,474,351,714.07 | 4,319,025,358.69 | 13,574,484.83 | 14,779,802,587.93 |
| Non-current asset | 2,049,752,240.36 | 75,295,429.00 | 117,033,788.09 | 2,008,013,881.27 |
③ Major customers
Among the Group's customers, one customer (2021: 1) whose revenue from a single customer accounted for 10% or more of the Group's totalrevenue was related party SEB S.A. and its subsidiaries, accounting for approximately 23.18% (2021: 30.94%) of the Group's total revenue.
XVII. Notes to Items of Parent Company Financial Statements
1. Accounts receivable
(1) Details on categories
Unit: RMB
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Including: | ||||||||||
| Accounts receivable for provision for bad debts made on the basis of portfolio | 385,536,357.78 | 100.00% | 10,937,615.03 | 2.84% | 374,598,742.75 | 770,159,019.26 | 100.00% | 27,825,217.23 | 3.61% | 742,333,802.03 |
| Including: | ||||||||||
| Portfolio 1: age portfolio | 312,435,311.86 | 81.04% | 10,880,503.86 | 3.48% | 301,554,808.00 | 695,510,017.57 | 90.31% | 27,765,218.24 | 3.99% | 667,744,799.33 |
| Portfolio 2: low-risk portfolio | 57,111,169.92 | 14.81% | 57,111.17 | 0.10% | 57,054,058.75 | 59,998,991.48 | 7.79% | 59,998.99 | 0.10% | 59,938,992.49 |
| Portfolio 3: merged related parties portfolio | 15,989,876.00 | 4.15% | 15,989,876.00 | 14,650,010.21 | 1.90% | 14,650,010.21 | ||||
| Total | 385,536,357.78 | 100.00% | 10,937,615.03 | 2.84% | 374,598,742.75 | 770,159,019.26 | 100.00% | 27,825,217.23 | 3.61% | 742,333,802.03 |
Provision for bad debts made on the basis of portfolio:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Within 1 year | 312,435,311.86 | 10,880,503.86 | 3.48% |
| Total | 312,435,311.86 | 10,880,503.86 | |
Explanation on the basis for determining such portfolio:
If provision for bad debts for accounts receivable is made based on the general model of expected credit losses, please disclose the relevantinformation about the provision for bad debts with reference to the disclosure of other receivables:
□ Applicable ? Not applicable
Disclosure by ages
Unit: RMB
| Ages | Book balance |
| Within 1 year (including 1 year) | 385,526,579.20 |
| 1-2 years (including 2 years) | 9,778.58 |
| Total | 385,536,357.78 |
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
| Categories | Opening balance | Amount of changes in current period | Closing balance | |||
| Accrued | Collected or reversed | Written off | Others | |||
| Provision for bad debts for accounts receivable | 27,825,217.23 | -16,887,602.20 | 10,937,615.03 | |||
| Total | 27,825,217.23 | -16,887,602.20 | 10,937,615.03 | |||
(3) Accounts receivable details of the top 5 closing balances by debtors
Unit: RMB
| Entity name | Closing balance of accounts receivable | Proportion in the total closing balance of accounts receivable | Closing balance of provision for bad debts |
| SEB S.A. and its subsidiaries | 312,211,857.11 | 80.98% | 10,927,415.00 |
| Customer L | 35,367,082.13 | 9.17% | 35,367.08 |
| Wuhan Supor Cookware | 12,117,280.87 | 3.14% | |
| Customer M | 8,273,346.36 | 2.15% | 8,273.35 |
| Customer N | 4,328,326.19 | 1.12% | 4,328.33 |
| Total | 372,297,892.66 | 96.56% |
2. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other receivables | 1,174,381,191.82 | 1,845,295,351.20 |
| Total | 1,174,381,191.82 | 1,845,295,351.20 |
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
| Nature of receivables | Ending book balance | Beginning book balance |
| Deposit as security | 111,458.00 | |
| Fund pool | 1,172,087,133.42 | 1,844,438,348.07 |
| Temporary payment receivable | 2,860,673.12 | 1,439,315.12 |
| Personal deposit | 339,400.93 | 356,338.04 |
| Total | 1,175,398,665.47 | 1,846,234,001.23 |
2) Provision for bad debts
Unit: RMB
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss in future 12 months | Expected credit loss in the entire duration (without credit impairment) | Expected credit loss in the entire duration (credit impairment) | ||
| Balance on January 1, 2022 | 938,650.03 | 938,650.03 | ||
| Balance on January 1, 2022 in the current period | ||||
| Withdrawal in the current period | 78,823.62 | 78,823.62 | ||
| Balance on December 31, 2022 | 1,017,473.65 | 1,017,473.65 |
Changes in book balance of loss provision due to significant changes in the current period
□ Applicable ? Not applicable
Disclosure by ages
Unit: RMB
| Ages | Book balance |
| Within 1 year (including 1 year) | 1,174,443,084.02 |
| 1-2 years | 45,000.00 |
| 2-3 years | 9,332.27 |
| Over 3 years | 901,249.18 |
| 4-5 years | 5,000.00 |
| Over 5 years | 896,249.18 |
| Total | 1,175,398,665.47 |
3) Provisions made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
| Categories | Opening balance | Amount of changes in current period | Closing balance | |||
| Accrued | Collected or reversed | Written off | Others | |||
| Provision for bad debts of other receivables | 938,650.03 | 78,823.62 | 1,017,473.65 | |||
| Total | 938,650.03 | 78,823.62 | 1,017,473.65 | |||
4) Other receivables details of the top 5 closing balances by debtors
Unit: RMB
| Entity name | Nature of receivables | Closing balance | Ages | Proportion in the total closing balance of other receivables | Closing balance of provision for bad debts |
| Zhejiang Supor Electrical | Fund pool | 472,915,525.15 | Within 1 year | 40.24% | |
| Wuhan Supor Cookware | Fund pool | 422,093,926.95 | Within 1 year | 35.91% | |
| Hainan Supor E-commerce Company | Fund pool | 108,998,818.36 | Within 1 year | 9.27% | |
| Omegna | Fund pool | 69,855,503.61 | Within 1 year | 5.94% |
| Shanghai WMF | Fund pool | 59,032,256.42 | Within 1 year | 5.02% | |
| Total | 1,132,896,030.49 | 96.38% |
3. Long-term equity investment
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 2,763,861,746.90 | 2,763,861,746.90 | 2,948,542,538.52 | 2,948,542,538.52 | ||
| Investments in associates and joint ventures | 62,156,208.65 | 62,156,208.65 | 65,419,057.50 | 65,419,057.50 | ||
| Total | 2,826,017,955.55 | 2,826,017,955.55 | 3,013,961,596.02 | 3,013,961,596.02 | ||
(1) Investments in subsidiaries
Unit: RMB
| Invested unit | Opening balance (book value) | Increase/decrease | Closing balance (book value) | Closing balance of impairment provision | |||
| Investment increased | Investment decreased | Accrued impairment provision | Others | ||||
| Wuhan Supor Pressure Cooker | 240,428,244.41 | 240,428,244.41 | |||||
| P&R Products | 20,804,297.92 | 20,804,297.92 | |||||
| Yuhuan Sales Company | 2,990,149.81 | 2,990,149.81 | |||||
| Zhejiang Supor Electrical | 770,267,854.79 | 7,115,779.00 | 777,383,633.79 | ||||
| Shaoxing Supor | 639,411,908.49 | 7,430,650.00 | 646,842,558.49 | ||||
| Supor Vietnam | 105,143,165.64 | 105,143,165.64 | |||||
| Wuhan Recycling | 1,000,000.00 | 1,000,000.00 | |||||
| Omegna | 10,000,000.00 | 10,000,000.00 | |||||
| Shanghai Marketing | 5,000,000.00 | 5,000,000.00 | |||||
| Wuhan Supor Cookware | 598,253,566.39 | 4,801,477.00 | 603,055,043.39 | ||||
| SEADA | 11,890,622.45 | 11,890,622.45 | |||||
| Shanghai WMF | 50,000,000.00 | 206,659.00 | 50,206,659.00 | ||||
| SSEAC | 212,152,728.62 | 212,152,728.62 | |||||
| Zhejiang WMF | 100,000,000.00 | 2,179,399.00 | 102,179,399.00 | ||||
| Zhejiang Supor LKA | 100,000,000.00 | 648,199.00 | 100,648,199.00 | ||||
| Shaoxing Supor Housewares | 50,000,000.00 | 4,519,526.00 | 54,519,526.00 | ||||
| Supor Water Heater | 31,200,000.00 | 31,200,000.00 | |||||
| Hainan Supor E-commerce Company | 570,248.00 | 570,248.00 | |||||
| Total | 2,948,542,538.52 | 27,471,937.00 | 212,152,728.62 | 2,763,861,746.90 | |||
(2) Investments in associates and joint ventures
Unit: RMB
| Investing unit | Opening balance (book value) | Increase/decrease | Closing balance (book value) | Closing balance of impairment provision | |||||||
| Investment increased | Investment decreased | Investment profit or loss recognized by equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/profit declared for distribution | Accrued impairment provision | Others | ||||
| I. Joint Venture | |||||||||||
| II. Associated Enterprise | |||||||||||
| Wuhan Anzai Cookware Co., Ltd. | 65,419,057.50 | -3,262,848.85 | 62,156,208.65 | ||||||||
| Subtotal | 65,419,057.50 | -3,262,848.85 | 62,156,208.65 | ||||||||
| Total | 65,419,057.50 | -3,262,848.85 | 62,156,208.65 | ||||||||
4. Operating incomes and costs
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 2,302,742,532.78 | 1,935,093,847.17 | 2,725,835,212.58 | 2,362,901,800.69 |
| Revenue from other operations | 61,817,745.45 | 54,008,950.20 | 102,659,846.65 | 97,824,871.55 |
| Total | 2,364,560,278.23 | 1,989,102,797.37 | 2,828,495,059.23 | 2,460,726,672.24 |
Information related to revenue:
Unit: RMB
| Contract classification | Total |
| Commodity type | |
| Including: | |
| Cookware and utensil | 2,301,287,440.30 |
| Other domestic appliances | 63,272,837.93 |
| Classified by business area | |
| Including: | |
| Domestic sales | 465,944,081.10 |
| Export sales | 1,898,616,197.13 |
Information related to performance obligations:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
The revenue corresponding to the performance obligations under signed contracts and pending for fulfillment or not completely fulfilled at the endof the current reporting period is RMB 2,796,093.48. Among them, RMB 2,796,093.48 is expected to be recognized in 2023.
5. Investment income
Unit: RMB
| Item | Amount incurred during this period | Amount incurred during prior period |
| Investment income from long-term equity investments under the cost method | 1,618,952,576.25 | 5,106,240,651.28 |
| Income from long-term equity investments under the equity method | -3,262,848.85 | 1,378,149.04 |
| Loss from disposal of subsidiaries | -62,518,037.73 | |
| Interest from term deposit | 34,428,058.56 | 73,053,105.12 |
| Investment income from disposal of transactional financial assets | 1,534,045.79 | |
| Investment income of debt investment during the holding period | 7,443,923.15 | 3,571,557.46 |
| Total | 1,596,577,717.17 | 5,184,243,462.90 |
XVIII. Supplementary Information
1. Breakdown of non-recurring profit or loss in the current period
? Applicable □ Not applicable
Unit: RMB
| Item | Amount | Notes |
| Profit or loss on disposal of non-current assets | -1,189,107.57 | |
| Government subsidies included into the current profits and losses (except those that are closely related to the Company's normal business operations, comply with national policies and regulations and continuously available according to certain standard quota or quantity) | 199,599,828.51 | |
| Enterprise restructuring costs, such as expenses for employee placement and integration costs | -527,780.73 | |
| Except the effective hedging business related to the normal operation of the Company, profits and losses from fair value changes caused by the held transactional finance assets and transactional financial liabilities, and investment income acquired from disposal of transactional financial assets, transactional financial liabilities and available-for-sale financial assets | 24,264,345.88 | |
| Other non-operating incomes or expenditures except for the foregoing items | 9,796,376.97 | |
| Minus: influenced amount of income tax | 52,414,885.25 | |
| Influenced amount of minority shareholders' equities | 67,216.12 | |
| Total | 179,461,561.69 | -- |
Other specific circumstances of other items of profits and losses complying with the definition of non-recurring profits or losses:
□ Applicable ? Not applicable
The Company does not have other specific circumstances of other items of profits and losses complying with the definition of non-recurring profitsor losses.Description of defining non-recurring profits or losses items listed in the Explanatory Announcement No.1 on Disclosure of the Information ofCompanies Offering Their Securities to the Public -- Non-recurring Profit or Loss as recurring profits and losses
□ Applicable ? Not applicable
2. Return on net assets and earnings per share
| Profit of the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to shareholders of ordinary shares | 27.89% | 2.565 | 2.564 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 25.47% | 2.343 | 2.341 |
3. Financial Data Difference on Principle of Domestic and Oversea Accounting
(1) Net profit and net assets discrepancies in financial statements disclosed separately under International AccountingStandards and Chinese Accounting Standards
□ Applicable ? Not applicable
(2) Net profit and net assets discrepancies in financial statements disclosed separately under Overseas AccountingStandards and Chinese Accounting Standards
□ Applicable ? Not applicable
(3) The reason of accounting data difference under domestic and foreign accounting standard shall be explained. Ifthe data audited by the foreign audit organization carries out the different adjustment, the name of foreignorganization shall be indicated.
None
Zhejiang Supor Co., Ltd.Chairman: Thierry de LA TOUR D'ARTAISE
March 31, 2023