GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
Annual Report 2020
April 2021
Section I Important Notice, Table of Contents and Paraphrase
The Board of Directors, Board of Supervisors, all directors, supervisors and SeniorManagement Personnel of the Company hereby guarantee that the contents areauthentic, accurate and complete, and there are no false records, misleadingrepresentations or material omissions in the Annual Report, and shall take all the jointand several legal responsibilities.Dong Mingzhu, the Company's responsible person, Liao Jianxiong, responsible personin charge of accounting work and Liu Yanzi, in-charge person of accounting institution(accounting superintendent) hereby declare and warrant that the financial report inthe Report is authentic, accurate and complete.All the directors attended the meeting of the Board of Directors in respect ofdeliberation of the Report.The forward-looking statements such as future plans and development strategies in theReport do not constitute a substantive commitment of the Company to investors.Investors and relevant persons should therefore be aware of risk factors attendant ininvestment and understand the differences between plans, forecasts and commitments.The Company's profit distribution proposal passed upon deliberation at the meeting ofthe Board of Directors is set out as below: Based on the total number of 5,832,851,217shares of the Company enjoying profit distribution rights as of 28 April, 2021 (the totalstock capital of 6,015,730,878 shares excluding the 182,879,661 shares held in therepurchase account of the Company), the Company plans to distribute all shareholdersa cash dividend of RMB 30 (tax included) per 10 shares, but does not plan to give anybonus share or use any public reserve funds for capitalization.
Table of Contents
Section I Important Notice, Table of Contents and Paraphrase ...... 1
Section II Company Profile and Main Financial Indices ...... 4
Section III Corporate Business Overview ...... 9
Section IV Discussion and Analysis of Business Operation ...... 17
Section V Important Events ...... 53
Section VI Changes in Stock Capital & Information of Shareholders ...... 83
Section VII Related Information of Preferred Stock ...... 91
Section VIII Related Information of Convertible Corporate Bonds ...... 92
Section IX Directors, Supervisors, Senior Management Personnel and Employees ...... 93
Section X Corporate Governance ...... 109
Section XI Related Information of Corporate Bonds ...... 114
Section XII Financial Report ...... 115
Section XIII References ...... 274
Paraphrase
| Items | Means | Contents |
| Company, the Company, the enterprise, GREE ELECTRIC APPLIANCES or GREE | Means | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI |
| GREE GROUP | Means | Zhuhai Gree Group Co., Ltd. |
| Zhuhai Mingjun | Means | Zhuhai Mingjun Investment Partnership (Limited Partnership) |
| Finance Company | Means | Zhuhai Gree Group Finance Company Limited |
| Jinghai Internet | Means | Jinghai Internet Technology Development Co., Ltd. |
| Yinlong | Means | Zhuhai Yinlong New Energy Co., Ltd. |
| CSRC | Means | China Securities Regulatory Commission |
| Report Period | Means | 1 January, 2020 to 31 December, 2020 |
Section II Company Profile and Main Financial IndicesI. Company information
| Stock Abbreviation | GREE ELECTRIC APPLIANCES | Stock Code | 000651 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Name in Chinese | 珠海格力电器股份有限公司 | ||
| Name Abbreviation in Chinese | 格力电器 | ||
| Name in Foreign Language (if any) | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | ||
| Name Abbreviation in Foreign Language (if any) | GREE | ||
| Legal Representative | Dong Mingzhu | ||
| Registered Address | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province | ||
| Post Code of Registered Address | 519070 | ||
| Office Address | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province | ||
| Post Code of Office Address | 519070 | ||
| Website | http://www.gree.com.cn | ||
| gree@gree.com.cn | |||
II. Contacts and contact information
| Board Secretary | Securities Affairs Representative | |
| Name | Deng Xiaobo | Zhang Zhouhu, Yan Zhangxiang |
| Address | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province |
| Tel | 0756-8669232 | 0756-8669232 |
| Fax | 0756-8614998 | 0756-8614998 |
| gree0651@cn.gree.com | gree0651@cn.gree.com |
III. Information disclosure and place of the report
| Media designated by the Company for information disclosure | China Securities Journal, Securities Times, Shanghai Securities News and Securities Daily |
| Website specified by CSRC for release of the Annual | http://www.cninfo.com.cn |
| Report | |
| Place where the Annual Report is available for inspection | Investment Management Department of the Company |
IV. Alteration of registration
| Organization code | 91440400192548256N |
| Changes (if any) in the main business since listing of the Company | No change |
| Changes (if any) in the controlling shareholders | On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement. Gree Group planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by Gree Group to Zhuhai Mingjun at a price of RMB 46.17/share (accounting for 15% of the Company's total equity); On 13 December, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of Zhuhai City separately approved the share transfer. Gree Group obtained the Transfer Registration Confirmation issued by China Securities Depository and Clearing Corporation Limited (CSDC) Shenzhen Branch on 3 February, 2020. The share transfer registration procedures for the transfer of this agreement have been completed, and the transfer date is 23 January, 2020. After the completion of the share transfer registration, the Company has neither a controlling shareholder nor an actual controller. |
V. Other related informationAccounting firm engaged by the Company
| Name of the Accounting Firm | Union Power Certified Public Accountants (Special General Partnership) |
| Office Address | No. 169 Donghu Road, Wuchang District, Wuhan City |
| Names of Accountants as Signatories | Han Zhenping, Geng Ting |
Sponsor engaged by the Company to perform continuous supervision during the Report Period
√ Applicable □ Not applicable
| Name of the sponsor | Office address of the sponsor | Name of the recommended representative | Continuous supervision period |
| Huatai United Securities Co., Ltd. | 26F, CTS Tower, No.4011, Shennan Boulevard, Futian District, Shenzhen | Gu Chongxiang, Li Shijing | From 26 July, 2019 to 25 July, 2020 |
Financial adviser engaged by the Company to perform continuous supervision during the Report Period
□ Applicable √ Not applicable
VI. Main accounting data and financial indicesWhether the Company has retroactive adjustment or restatement of previous accounting data
□ Yes √ No
Unit: Yuan
| Item | 2020 | 2019 | Increase/Decrease over the previous year | 2018 |
| Operating Revenue (Yuan) | 168,199,204,404.53 | 198,153,027,540.35 | -15.12% | 198,123,177,056.84 |
| Net profit attributable to shareholders of listed Company (Yuan) | 22,175,108,137.32 | 24,696,641,368.84 | -10.21% | 26,202,787,681.42 |
| Net profit attributable to shareholders of listed Company less non-recurring gains and losses (Yuan) | 20,285,816,036.00 | 24,171,511,911.32 | -16.08% | 25,580,865,501.38 |
| Net cash flow generated from operating activities (Yuan) | 19,238,637,309.16 | 27,893,714,093.59 | -31.03% | 26,940,791,542.98 |
| Basic earnings per share (Yuan per Share) | 3.71 | 4.11 | -9.73% | 4.36 |
| Diluted earnings per share (Yuan per Share) | 3.71 | 4.11 | -9.73% | 4.36 |
| Weighted average return on net assets | 18.88% | 25.72% | -6.84% | 33.36% |
| Item | At the end of 2020 | At the end of 2019 | Increase/Decrease over the previous year | At the end of 2018 |
| Total asset (Yuan) | 279,217,923,628.27 | 282,972,157,415.28 | -1.33% | 251,234,157,276.81 |
| Net asset attributable to shareholders of listed Company (Yuan) | 115,190,211,206.76 | 110,153,573,282.67 | 4.57% | 91,327,095,069.10 |
VII. Accounting data differences under domestic and foreign accounting standards
1. Differences in net profit and net assets in the financial report disclosed under international accountingstandards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial report disclosed under international accounting standards and thatdisclosed under domestic accounting standards during the Report Period.
2. Differences in net profit and net assets in the financial report disclosed under overseas accountingstandards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial report disclosed under overseas accounting standards and thatdisclosed under domestic accounting standards during the Report Period.VIII. Quarter-based main financial indicators
Unit: Yuan
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
| Operating incomes | 20,395,535,183.42 | 49,106,787,186.52 | 56,387,073,628.99 | 42,309,808,405.60 |
| Net profit attributable to shareholders of listed company | 1,558,013,539.01 | 4,804,123,838.63 | 7,336,584,665.51 | 8,476,386,094.17 |
| Net profit attributable to shareholders of listed companies after deduction of non-recurring profit and loss | 1,429,583,505.27 | 4,566,954,114.64 | 6,585,565,313.26 | 7,703,713,102.83 |
| Net cash flows from operating activities | -11,772,862,523.80 | 7,255,186,786.04 | 7,549,675,839.30 | 16,206,637,207.62 |
Whether major differences exist between the above financial indicators or their sum and those in the disclosed quarterly report andsemi-annual report
□ Yes √ No
IX. Non-recurring profit and loss items and amounts
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount in 2020 | Amount in 2019 | Amount in 2018 | Description |
| Gains and losses from disposal of non-current assets (including the provision for asset impairment write-off part) | -4,974,224.62 | -9,293,929.38 | -23,064,935.35 | For details, see Note (V) 57, Note (V) 58, and Note (V) 59 |
| Governmental subsidies recorded into the current gains and losses (excluding the governmental subsidies closely relating to the business of the enterprise and enjoyed by a fixed quota or a fixed amount in accordance with the state policies) | 1,346,168,393.38 | 1,215,852,371.66 | 671,678,104.47 | For details, see Note (V) 52 and Note (V) 58 |
| Capital occupation fee collected from the non-financial institution and recorded into the current gains and losses | 883,505.62 | 359,713.10 | 1,262,805.80 | |
| Net profits or losses of the subsidiaries in the current period from the beginning of the period to the combination date that are generated by business combination involving | 184,503.98 |
| enterprises under common control | ||||
| Gains and losses caused by fair value changes from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment income obtained from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other debt investments, except for the effective hedging business related to the Company's normal business operations | 877,450,950.74 | 1,449,722.86 | 151,222,484.83 | |
| Reversal of impairment provision for the accounts receivable and contract assets for which an independent impairment test is conducted | 2,320,229.26 | |||
| Non-operating incomes and expenditures other than the above items | 50,024,914.68 | -530,486,147.03 | 32,323,207.44 | For details, see Note (V) 58 and Note (V) 59 |
| Other profit and loss items that conform to the definition of non-recurring profit and loss | 17,915,425.64 | 997,770.17 | 6,119,851.77 | |
| Less: Influence amount of income tax | 386,974,457.37 | 147,189,032.83 | 170,139,883.37 | |
| Influence amount of minority equity (after tax) | 11,202,406.75 | 6,561,011.03 | 49,984,188.79 | |
| Total | 1,889,292,101.32 | 525,129,457.52 | 621,922,180.04 | -- |
Explanation should be given for non-recurring profit and loss items defined by the Company according to ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public -- Non-recurring Profit andLoss and for non-recurring profit and loss items which are listed in Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public -- Non-recurring Profit and Loss and defined as recurring profit and loss items.
□ Applicable √ Not applicable
No non-recurring profit and loss items which are defined or listed in Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public -- Non-recurring Profit and Loss were defined by the Company as recurring profitand loss items during the Report Period.
Section III Corporate Business Overview
I. Major businesses engaged in during the Report Period(I) Major businesses and position in industryGree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and has threemajor brands: Gree, TOSOT and KINGHOME. Its products have been expanded to cover the two major fields ofhousehold consumer goods and industrial equipment, including residential air conditioners, HVAC, refrigerators,washing machines, water heaters, kitchen appliances, environmental appliances, communication products, smartbuildings, and smart household appliances in the consumption field; high-end equipment, precision moulds,freezers and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision castingequipment, basic materials, industrial energy storages, and renewable resources in the industrial field Greeproducts are sold in more than 160 countries and regions, providing more than 400 million users with satisfactoryproducts and services, for the purpose of creating a better life.In 2020, Gree was again listed in the Fortune Global 500 and ranked the 436th by virtue of its outstandingcomprehensive strength; listed in the Forbes Global 2000 – World's Best Employers and ranked the 246th, rising14 places from 2019.According to the data released by HVAC Information, Gree took the lead in the central air conditioner marketrelying on a market share of 13.9% and has maintained the position for nine consecutive years in the Chinesemarket; according to the 2020 domestic sales data of air conditioner brands published by ChinaIOL.com, Gree airconditioners ranked the first in the field with a share of 36.9%, taking the lead for 26 years.Gree takes "To be Global Leading Air Conditioning Enterprise" as its corporate vision, and "carrying forward theindustrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, and achieving‘Made in China, Loved by the World’" as its mission. By adhering to the management philosophy that "innovationnever stops", Gree focuses on independent innovation and development, in order to grasp the pulse of the times,build a world brand and create a development model with Chinese characteristics for Chinese manufacturingenterprises.(II) Overview of industry development
1. Field of household appliances
According to the Report on China's Household Appliance Market in 2020 issued by China Center for InformationIndustry Development, the household appliance market of China first underwent a depression and then recoveredin 2020. The retail sales volume of household appliances in the whole year was RMB 833.3 billion, a decrease of
6.5% year on year, and the retail sales of air conditioners, refrigerators, washing machines, and kitchen appliancesdecreased to varying degrees. Due to the COVID-19 epidemic (the epidemic for short), the proportion of peopleworking at home increased, and the retail sales of home appliances increased by 1.85% year on year. According tothe statistics of ChinaIOL.com, the sales volume of residential air conditioners was 141,460,000 in 2020, ayear-on-year decrease of 6.1%; wherein the domestic sales volume was 80,280,000, decreased by 12.9%, and the
export sales volume was 61,180,000, increased by 4.7%.The epidemic situation has promoted the rapid development of online retails. In 2020, the proportion of onlineretails to the total retail sales of household appliances market increased from 41.17% in 2019 to 50.4%, and thecontribution rate of e-commerce channels to household appliances retails exceeded 50% for the first time, furtherhighlighting the importance of online retails. The epidemic has changed people's life philosophy and life style. Forthe household appliances market in 2020, the air conditioners focusing on intelligence, comfort and health,refrigerators focusing on large volume, healthy disinfection and scientific storage, and the washing machinesfocusing on large capacity, healthy washing and care, and clothes drying have been recognized and accepted bymore and more consumers. Small household appliances such as dishwashers, hand-held vacuum cleaners, and airfryers sold well at different degrees, not only enlivening the dull household appliance market, but alsostrengthening the role of household appliances in enhancing people's happiness.The remarkable retail sales of consumption upgrading goods and subdivided functional household appliancesreflected people's demand for improving the quality of life through consumption of household appliances, and theupgrading of consumption and the transformation of household appliance business were speeding up at the sametime. "New consumption" and "high-end" will be the main innovative orientation of household appliances in2021.
2. Industrial equipment field
The sector of core air conditioning parts benefited from the effective control of the epidemic. The compressorfield and the motor field began to recover gradually in the second half, and a slight decline was observedthroughout the year. According to the 2020 statistics of ChinaIOL.com, the sales volume of rotor compressors inChina was 211,551,000, a year-on-year decrease of 1.69%; the sales volume of rotor compressors in China was356,762,000, a year-on-year decrease of about 5.5%.For the intelligent equipment sector, with the proposal of the "Made in China 2025" strategy, the intelligentmanufacturing industry has ushered in an opportunity period of rapid development in recent years. According tothe data in the 2020 Statistical Bulletin of National Economic and Social Development of the PRC, the addedvalue of China's equipment manufacturing industry increased by 6.6% year on year in 2020, accounting for 33.7%of the added value of industries above the designated scale; the output of industrial robots was 212,000 sets, ayear-on-year increase of 20.7%.Regarding the product trend of industrial robots, manufacturers have probed into the application to the specificindustries and fields such as medical treatment, wine making, sewing, and edge cutting, and launched special robots.In terms of technology development, traditional industrial robots perform more complex production tasks throughthe collaborative application of force, vision, tactile, and other sensors; fusion development of the 5G, artificialintelligence, big data, cloud computing, intelligent sensing, and other emerging technologies with robot technologieswill drive industrial robots to evolve towards a more intelligent and flexible direction.At present, the development level of intelligent manufacturing is maintained at a sustained high speed, and thedevelopment level of high-end intelligent equipment has become a criterion for measuring the development levelof a country's manufacturing industry. However, the intelligent manufacturing industry of China started relativelylate, and there is still a certain gap compared with developed countries. Fortunately, China has gradually extricateditself from the dependence on foreign new and high technologies through unremitting independent R&D andindependent innovation of core technologies. Moreover, China will increase its investment in R&D in the future,improve the policy for development of intelligent manufacturing industry, and promote intelligent transformation
of the industry. The intelligent manufacturing industry shows a huge growth potential.II. Significant changes in major assets
1. Significant changes in major assets
| Major assets | Significant changes |
| Fixed assets | A decrease of 0.69% over the end of last year. No significant change is made. |
| Intangible assets | An increase of 10.80% over the end of last year. No significant change is made. |
| Construction in Progress | An increase of 65.20% over the end of last year. This is mainly caused by the increase of construction in progress of the current period. |
| Other current assets | A decrease of 32.37% over the end of last year. This is mainly caused by the maturity of the Company’s investment in structured deposits and wealth management products in the current period. |
| Long-term equity investment | An increase of 14.94% over the end of last year. No significant change is made. |
| Other equity instrument investments | An increase of 67.69% over the end of last year. This is mainly caused by the increase of the equity investment in San’an Optoelectronics Co., Ltd. and the change in the fair value of the equity investment. |
2. Major overseas assets
□ Applicable √ Not applicable
III. Core competence analysisFacing new opportunities and challenges, Gree takes "mastering core technologies and forging perfect quality" asthe two wheels for driving, transfers and improves the value through unique marketing model, sticks toindependent people cultivation, independent innovation and independent production, and takes "carrying forwardthe industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, andachieving Made in China, Loved by the World" as its mission to stride forward.(I) World famous brand, continuing to create value for the societyGree is a diversified technological global industrial group integrating R&D, production, sales and service. Greehas won a great number of honors such as "World Brand", "Most Competitive Brand in the Market", "NationalQuality Award", "Export Inspection Exemption Enterprise" and "China Brand Innovation Award" over these years.Forbes released the Global 2000 – World's Best Employers in May 2020. Gree ranked the 246th, rising 14 placesfrom 2019. Since becoming one of the top 500 of the list in 2015, Gree's ranking has risen year after year, and itsdevelopment strength has been recognized by the world.The world top 500 list of Fortune was released in August 2020. Gree was again listed in the Fortune Global 500
and ranked the 436th by virtue of its outstanding comprehensive strength. Meanwhile, Gree was listed in the"China's Most Admired Companies in 2020" in the Fortune, ranking the seventh in the list and taking the firstplace in the household appliance industry. According to the customer satisfaction survey results issued by theCustomer Satisfaction Evaluation Center of China National Institute of Standardization, the customer satisfactionof Gree air conditioners and all the indexes were at the first place in the industry, ranking No.1 for 10 consecutiveyears.Gree has always been adhering to the core sense of worth of “quality first, customer satisfaction, good faithmanagement, and win-win situation”, and forging its brands and creating social value, environmental value andeconomic value for the society and consumers depending on its perfect quality and world-leading technologies.(II) Excellent R&D strength, continuously leading technological innovation and product upgrading of theindustryGree adheres to the philosophy that "science and technology change life; science and technology create life" andinsists on "independent research and development of core technologies". It firmly believes that only the realmastery of core technologies can enable us to grasp the fate of the enterprise and realize independent developmentof the enterprise. Meanwhile, Gree has set up a technological innovation system of "enterprise regarded as themain player, market orientation, enterprise-university-research cooperation". It insists on innovation driving,cultivates innovative talents, implements the leader strategy, and constantly consolidates its global leadingposition in the field of refrigeration.Gree boasts the largest R&D center of air conditioners in the world, four national R&D centers, one research andevaluation base of the National Notification Enquiry Center, 15 research institutes, nearly 1,000 laboratories, andnearly 15,000 R&D members. Its national R&D centers are the National Key Laboratory on Air ConditioningEquipment and Energy-saving System Operation, National Engineering Research Center of Green RefrigerationEquipment, State Recognized Enterprise Technology Center and the State-level Industrial Design Center.Meanwhile, it has been recognized as the "National Demonstration Base for Standardization of Consumer Goods"and "National Pilot Enterprise for Standardization of High-end Equipment Manufacturing Industry". In addition,Gree has established the "Motor and Control" academician workstation and has been successively approved toestablish post-doctoral research centers and doctoral workstations in Guangdong Province. In 2020, Gree wasapproved to establish "Guangdong Key Laboratory for Enterprises of High-speed Energy Saving Motor System".Gree Electric continued to lead the industry in testing, certification and standards. Gree has built more than 300professional laboratories for thermal balance, noises, reliability, electrical safety, electromagnetic compatibility,etc., and has been successively recognized by a variety of national or international organizations (including CNAS,TUV, UL, CSA, VDE, ITS, SGS, BV, and AHRI), growing into the largest experimental center in the industry thatcan provide the most complete tests and receive the largest number of national and international recognitions.Gree has accumulatively won 48 national, provincial or ministerial and industrial awards.By the end of 2020, Gree has accumulatively applied for 79,014 patents, including 40,195 patents for inventions;won 46 Chinese patent awards in total, including one gold award for invention and three gold awards forappearance; won 6 gold awards at International Exhibition of Inventions of Geneva and 5 gold awards at iENA.(III) Leading PQAM perfect quality assurance mode, achieving “Made in China, Loved by the World”Gree regards "pursuing perfect quality" as the quality policy and "zero defect" and "best service not requiring
after-sales service" as the quality objectives, considers the "five-step method of quality prevention" and "qualitytechnology innovation cycle D-CTFP method" as the methods for continuously promoting and refining the perfectquality management mode of Gree. From the quality concept of "zero defect" put forward in the early stage ofdoing pioneering work to the concept of perfect quality nowadays, the connotation of Gree' quality managementconcept has been constantly enriching and developing.Gree adheres to the quality policy of "pursuing the perfect quality, creating an international brand, and forging acentury enterprise", sticks to the quality culture of "strict, true and new" oriented to customer demand and socialresponsibility, sets no upper limit of investment in the basic capacity building of quality, implements all-roundquality training for all staff, and extensively carries out QCC quality improvement activities and Six Sigma qualityimprovement projects. Based on the "four in one" system of ISO9001, ISO14001, ISO45001 and QC080000, atotal quality management model with independent innovation as the core has been gradually formed in the processof introduction, promotion, and practicing total quality management, lean Six Sigma management andperformance excellence model.Gree participated in the drafting and development of the Quality Management - Innovation Cycle Guide Based onCustomer Demand as a national standard, with a view to publicizing Gree's advanced quality managementexperience throughout the industry and promoting continuous improvement of the quality level of the wholeindustry. The quality level of Gree's products has been continuously improved by strengthening the internalquality control, and the after-sale failure rate has fallen greatly for years.From 2014 to 2020, Gree won 2 first prizes, 22 second prizes, 3 third prizes, and 61 excellent prizes of “QualityTechnology Award” of China Association for Quality respectively relying on its leading core technologies andexcellent quality management system; in November 2018, Gree won the “Third China Quality Award” relying onits perfect quality management mode of "Made in China, Loved by the World", getting the highest honor inChina's quality field; Gree won the gold award of the 44th International Convention on Quality Control Circles(ICQCC) in 2019 and the second award of innovation category of large enterprises in the Quality InnovationAward (QIA) in 2020, becoming the first household appliance enterprise in China that won this award. Theseawards highlighted Gree's solid strength in the field of quality technologies.(IV) Online and offline integrated new retail system, meeting the new needs of consumers with digitaltechnologiesGree insists on the sales channel construction and sales model of independent management, mutual benefit andwin-win and creates a solid online and offline business layout. The two channels complement each other and aredeeply integrated to create a full channel sales platform.Gree has established an offline sales network covering the whole country, providing service for consumersthrough its 27 sales companies and more than 30,000 exclusive stores. “Gree Dong Mingzhu's store” has beentransformed and upgraded into a comprehensive online retail e-commerce platform, selling high qualitycommodities of various categories and varieties such as household appliances, food and beverage, beauty andpersonal care products, clothing boutiques, and online travel products. As the market environment changes, Greehas started the "new retail" marketing mode reform of online and offline integration. The online third-partye-commerce platform and “Gree Dong Mingzhu's store” are deeply integrated with more than 30,000 offlinestores to provide online-offline linkage integrated services including offline experience, online ordering, andnationwide unified distribution and installation.
Information, digital and intelligent technologies have been deeply applied to Gree's "new retail" marketing mode.The whole chain construction and operation of new retail including the shopping mall platform, order fulfillmentsystem, online wholesale system, and after-sales dispatch system realizes user reaching of Gree’s new retail online,the informatization capability empowers the channel business to drive the digital upgrade of marketing. Relyingon the Internet engineering technology and integrating the artificial intelligence, Internet of Things and AR/VRtechnology, Gree promotes the digital upgrade of terminal stores through the intelligent touch interaction modeoffline, achieves the functions of product sampling, price adjustment, training, user value tag precipitation andmanagement in the cloud, builds Gree’s characteristic smart shopping guide stores, and constantly improvesconsumers' shopping experience; uses the functions of inventory data analysis and early warning, dynamic displayand analysis of sales data and conduct data-driven operation to meet the new needs of consumers continuously.(V) The full series of household appliances, providing consumers with overall solutions for high-qualitysmart lifeBy 2020, Gree has provided 46 categories of household appliances, including 32 categories of home appliances,which can meet consumers’ all-round needs for high quality life. In 2020, Gree launched new types of householdappliances such as hand-held water flosser, disinfectant maker, sterilization small square tube, heat pump washerdryer, automatic drum washing machine with drying function, dishwasher, hand-held vacuum cleaner,zero-cold-water gas water heater, baseboard heater, portable electric kettle, electric lunch box, and portable juicer,enriching the life of consumers.In 2020, Gree Smart Home built “Gree Zero-carbon Healthy Home” centering on the goal of " Link Gree, ConnectFree", and implemented the overall smart life solution featuring energy conservation, environmental protection,comfort and health, wisdom and humanities, consisting of the six intelligent management systems of energy, air,sleep, recipe, security and lighting, covering 61 categories of intelligent products, and meet consumers'requirement for pursuing a better life depending on intelligent high technologies.(VI) Precise production capacity layout and complete industrial support able to quickly meet the needs ofconsumersGree Electric has established 17 production bases of household electrical appliances around the world, which arelocated in Zhuhai, Chongqing, Hefei, Zhongshan, Zhengzhou, Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou,Suqian, Luoyang, Nanjing, Chengdu, Ganzhou, Brazil, and Pakistan.In 2020, Gree further improved the regional layout of production capacity for various categories of products,promoted the upgrading of sales logistics services and coordinated to reduce the overall logistics operating costbased on the channel reform of new retail mode. In addition, Gree has built upstream plants for parts of householdappliances, for example, compressors, motors, capacitors and enameled wires, in various bases, which greatlyenhances the control capability of the Company for upstream and downstream supply chain, guarantees theefficient operation of production and meets the needs of consumers in a timely manner.Moreover, the Company has built six renewable resource bases in Zhuhai, Changsha, Zhengzhou, Shijiazhuang,Wuhu and Tianjin, covering the whole industrial chain from upstream production to downstream recycling, andachieving green, cyclic and sustainable development. Meanwhile, Gree also provides convenient channels forconsumers to dispose of waste household appliances.
(VII) Self-made core components and advanced supply chain management lay a solid foundation for steadydevelopmentGree showcases a powerful self-development and self-making capability of core components, and the productioncapacity, technologies and quality of its wholly owned subsidiaries, Landa Compressor, Kaibang Motor, XinyuanElectronics and Gree Electrical stand in the front rank of the industry. Gree's 10 products including theHigh-efficiency Scroll Compressor, High-performance Linear Servo Motor and Driver, and High-performanceServo Motor and Driver for Industrial Robots were appraised as the "world-leading" level by the end of 2020. Thepowerful R&D and manufacturing capabilities of core components vigorously support the leapfrog developmentof Gree.Aiming to create a leading supply chain in the industry, Gree has established a long-term win-win strategiccooperative relationship with leading supporting enterprises in the industry to effectively guarantee the supply ofraw materials. In 2020, in the face of the complicated domestic and overseas political and economic environment,Gree continued to give full play to its advantage of scale in the centralized procurement, and took measures suchas localization of sensitive materials and replacement with environmentally friendly materials, which effectivelyalleviated the pressure caused by environmental changes on operation, and showed the powerful strength of Greein supply chain management.(VIII) Refined cost control capability to provide guarantee for the steady development of the CompanyGree adheres to the orientation to market demand and user experience, plans and controls the product cost inconsideration of the Company's business objectives, promotes product design to implementing value engineeringby relying on technological innovation, and realizes whole process cost control and creates value for customersand shareholders while completing product functions and guaranteeing product quality.In 2020, Gree further promoted cost reduction through product design by taking measures such as optimizing theproduct structure design, simplifying the process and developing lean models; reduced the cost of materialprocurement by means such as promoting substitution schemes, locking resources in advance and annual rebate;cut down the production cost of products by increasing the utilization rate of materials, boosting the automationlevel and improving the production process.In 2020, Gree further improved and promoted the lean manufacturing system (GMS) with Gree characteristics,built an online learning platform of lean manufacturing, reinforced innovation in the three sections of new productdesign, logistics technology and production technology, and focused on the work such as promoting lean design,lean production, and low cost intelligent automation (LCIA) of new products. China Institute of Electronic Laborawarded Gree the honorary title of “Excellent Enterprise Practicing Lean Management” in October 2020.(IX) Adhere to independent training of talents and continuously upgrade the talent structureGree always adheres to the principle of "focusing on the strategic layout of the Company and adhering toindependent training of talents" and gradually forms an independent talent training mode with independent talentintroduction channel, independent training and development mechanism and all-round incentive and guaranteesystem as the core based on the development experience and cultural deposit of the Company, striving to makeemployees and the Company make progress and develop together.Gree's talent team has been growing and its talent structure has been upgraded over the years. By the end of 2020,
the Company had about 84,000 employees, including 2 leading talents in science and technology innovation underthe National Ten Thousand Talents Program, 3 experts enjoying special allowances from the State Council, 1winner of the Award of Outstanding Contribution to Nanyue, 1 Outstanding Talent under the Guangdong SpecialSupport Program, and 80 high-level talents of Zhuhai, 448 outstanding young talents, 710 scientific andtechnological experts evaluated inside the Company, and more than 7,500 intermediate and senior engineers.Gree built a diversified independent training mechanism by setting up a training system independently,strengthened the training of innovative talents and realized the supply of high quality talents. In 2020, Greecontinued to strengthen the independent cultivation of innovative talents, deepen the support to core businesses,set up an intelligent learning organization, create an empowering ecology of vocational education, speed up thetalent cultivation and supply of innovation achievement transformation, and promote high quality development ofthe enterprise. In 2020, Gree conducted more than 120 training sessions and evolved 8000 person-times in thefield of technology R&D; organized and carried out 12 special marketing training sessions, with a total of morethan 25,000 trainees, better supporting the first-tier marketing and service.Employees are an important driving force for development of the Company. The Company seeks benefits foremployees through multiple channels including talent subsidies, talent housing and Gree school, improving theemployee satisfaction and happiness through continuous efforts.
Section IV Discussion and Analysis of Business OperationI. Overview
Influenced by the COVID-19 epidemic and other factors in 2020, the Company was confronted with manydifficulties and challenges in its development. However, the Company insisted on the principle of not reducing thestaff and not cutting pay, upheld the Work guiding ideology of "dream, innovation and solid work", strengthenedself-reliance and independent innovation, accelerated promotion of the new retail mode of online and offlineintegration, and made new breakthroughs one after another on the road of high quality development. In 2020, theCompany achieved the total operating revenue of RMB 170.497 billion, a decrease of 14.97% year on year, and anet profit attributable to the parent company of RMB 22.175 billion, a decrease of 10.21% year on year.(I) Center on users, continuously improve product competitiveness and meet new needs of users
1. Residential air conditioner sector
Gree insists on centering on user needs for development of new products, creates perfect quality management andfully considers new needs of users. Based on the product R&D idea of "Study one generation, reserve onegeneration and develop one generation", Gree developed six series of new products centering on “health” and“comfort”, covering all the use scenarios at home. In the normalization background of epidemic prevention, Greehas completed the product line development and technical layout of healthy air conditioners, able to meet variousrequirements of consumers for indoor healthy air. Focusing on improving the comfort, Gree realized thepopularization of distributed air supply by floor-standing air conditioners, upgraded the air supply technology andheating technology of split-type air conditioners, and launched new products such as Jewel floor-standing airconditioners, Freair series floor-standing air conditioners, new G-MAX series ODUs and single-stageenthalpy-adding products in 2020, which were widely welcomed in the market.
2. HVAC equipment sector
In 2020, Gree constantly made breakthrough in key core technologies of the HVAC equipment sector, formed astrong technical reserve and promoted product upgrading. The representative products are briefed below:
(1) “Hualong No.1” nuclear screw chiller. Gree successfully developed the nuclear screw chiller with independentintellectual property rights, and studied the technologies including the "anti-seismic structure under complexalternating load" and "flow adaptive regulation"; developed the nuclear semi-closed screw compressor with highrigidity and high reliability, realizing the localization of nuclear screw compressor and filling the gap in theindustry. In September 2020, the 0%-100% variable load and efficient operation technology of units under wideoperating conditions passed the expert appraisal and reached the world-leading level.
(2) Gree magnetic bearing air-cooled centrifugal chiller. After making innovation in the magnetic bearing motorsystem, Gree developed the first air-cooled magnetic bearing compressor and unit in China, and the relatedproducts have been put in use in Pui Kiu Middle School in Hong Kong, achieving a breakthrough in the air-cooledmagnetic bearing market. So far, Gree has developed water-cooled and air-cooled magnetic bearing products,which have been widely used in large office buildings, rail transit, industrial refrigeration, airports, hospitals,shopping malls, hotels, etc. Typical projects include the office buildings organs of the National People's Congress,
the Winter Olympic Village of Beijing 2022 Winter Olympic Games and Zhengzhou Metro Line 4. The projectreceived the Quality Innovation Award and the first award of the China Innovation Methods Competition.The sales of HVAC equipment sales achieved remarkable results in 2020. Gree made a major breakthrough in thesales of real estate sector, signed long-term strategic cooperation agreements with more than 80 leading real estatedevelopers, and started extensive cooperation with more than 400 real estate companies nationwide; in the cleanheating sector, Gree was awarded 31 governmental heating projects for centralized bidding in the northernregional target market; in the rail transit sector, Gree won the bidding for T3 terminal of Hangzhou InternationalAirport, Fengtai Railway Station (the largest high-speed rail hub of communication in Asia) and other largeprojects; in the data communication sector, Gree was awarded 22 large-scale data centers and centralizedprocurement projects of operators with the significance of national model, and established a number of IDC modelprojects with international influence.
3. Home appliances sector
By virtue of its profound understanding of fashion, world cutting-edge technologies, attitude of constantperfecting and excellent detail control ability, Gree R&D team has tailored high-quality home appliances forglobal users, achieving perfect integration of technologies and fashion. The representative products are briefedbelow:
V-Lasso air purifier KXJFA300 is equipped with CKER triple sterilization system, and can kill COVID-19 virusand other pathogenic viruses. This product has passed the disinfection certification, CE certification, CBcertification, SASO certification, and CQC certification. It has been widely used in hospitals, governmentagencies, docks, hotels, schools, factories, and enterprises in China, sold to 30 provinces and cities in China tomake a contribution to production recovery, return to work and return to school, and also exported to more than 40countries and regions such as the European Union, the Middle East and Mexico.Gree steam oven first provides the function of simultaneous steaming/baking of three dishes and rice in the field;with the healthy cooking curve, it achieves the VC retention rate of 87.50% for food, 17.89% higher than that ofthe traditional technology; the product also provides the 1°C precise temperature control function.Gree hand-held vacuum cleaner VCBG05T-B01 provides the maximum of 180 AW suction and 70 min battery life,the user can pour out dust by one key without making hands dirty, the air outlet at the lateral front avoid directlyblowing users, dust is not raised in daily cleaning, fresh air is supplied without secondary pollution, and the deepmite removal function is also available; users can use this product to clean the whole house easily.
4. Refrigerator and washing machine sector
(1) Refrigerator sector. Bearing in mind the growing consumer demand for preservation and sterilization, Greedeveloped PLASMA antibiosis and deodorization, fruit and vegetable preservation with light oxygen and otherindustry leading technologies based on the three meat preservation technologies, namely, -3°C tender freezing,-5°C instant freezing and -33°C deep freezing, conductive to surface sterilization of articles and preservation offruits and vegetables. Meanwhile, it has made substantial progress in energy saving and intelligent interaction ofrefrigerators.The lineup of instant freezing refrigerators is constantly improving. Based on French six-door BCD-520 andFrench five-door BCD-339, Gree newly launched cross opposite-door BCD-448 and French four-door BCD-468in 2020, enabling the core technology to cove the mainstream volume segment of 300-550L market and meet therequirements of consumers for different doors and different volume segments. The two new products provide the
five preservation modes of fruits and vegetables, zero degree, tender freezing, soft freezing, and cool fresh (instantfreezing), which can meet the diversified preservation needs.At present, most of the refrigerator products with a sterilization function in the field show good sterilization effectto the air, but poor sterilization effect to the surface of the items inside the refrigerator. BCD-448 instant freezingrefrigerator is combined with the ion sterilization function independently developed by Gree, and the testedsterilization rate for the surface of the items is higher than 99%. In 2021, the technology will be further applied toother new refrigerators.For the small-sized apartments with a small kitchen, Gree newly developed the BCD-332 French four-doorrefrigerator with a width of 62.6 cm only and covering an area of 0.43 m
, and the thin French four-door BCD-425with an overall depth of 65 cm only.
(2) Washing machine sector. In 2020, Gree launched low/mid/high-end products to the market including heatpump washer dryers, SC series front loading washing machines, and pulsator series washing machines, andfulfilled the layout of all series of products. Aiming to provide “professional care of high-end fabric”, the featuredproduct, Gree heat pump washing, drying and care integrated machine, gives users a professional clothing careexperience by adopting heat pump drying, drying without cleaning, molecular level care and other differentiatedtechnologies, and owns the world leading air-conditioning drying system, which can dry clothes safely at a 37°Clow temperature and soft wind; the product integrates the steam molecular care, fresh water curtain and breezeshaking technologies to effectively care for clothes, smooth folds and remove peculiar smell. Compared with thetraditional washing and drying machine, the heat pump washer dryer shortens the drying time by 30% and savesenergy by 60%; the fluffy ratio of its steam care function is higher than 0.95, the difference of odor removal gradeis greater than 3, and the difference of fold removal grade is greater than 3; the sterilization rate of silver ion is
99.9%, and the antibacterial rate of antibacterial door seal is 99%. The product won the title of “Good Appliances”at the 2020 Annual Summit of China’s Household Appliance Industry.
5. Industrial product sector
(1) Efficient compressor product meeting new national standards. The product increases the energy efficiencyratio of compressor by 8% for the new generation products by adopting core efficiency improvement and noisereduction means such as "high-efficiency and low-friction loss bearing technology", "high-efficiency oil-gasseparation and circulation technology" and "side-exhaust noise elimination technology". The product has been putinto batch production in an all-round way, and 13 national invention patents have been requested for the relatedtechnologies.
(2) R410A aluminum-shell scroll compressor for vehicles. In 2020, Gree successfully developed the first R410Aaluminum shell scroll compressor in the field, which adopted the unique flexible compression technology andtook into account both sealing and reliability; the original composite coating technology of aluminum alloysurface eliminated the defect of easy wear or high power consumption of friction under a high load, and gave playto the advantages of wear resistance and lubrication. Based on the above technological breakthroughs, the productideally combined light weight and high efficiency. The product has been put into batch production, andsuccessfully applied to the new energy vehicles in Tianjin and Macao. It can be popularized on a national scale.
(3) New energy vehicle controllers. Gree has conquered the core and key technologies such as the strong-powerand energy-saving torque control, design of high function security software and hardware architecture, intelligentdiagnosis, and OTA control, and developed Gree's first new energy vehicle controller, which has reached theindustry leading level in vehicle safety, optimal torque distribution, and energy-saving control, capable of meeting
the needs of new energy commercial buses and logistics vehicles. Currently, the product has been put into batchproduction and realized stable operation in many cities, and its product performance has been recognized bycustomers.Gree’s five-in-one integrated controller for commercial vehicle tackles the difficult technologies such as highlyefficient and stable control of the main drive motor under all operating conditions, reliable startup of oil pumpmotor, high reliability integration of multi-control function, and electromagnetic compatibility design, andimplements integrated control of the driving power systems such as main drive motor, steering oil pump, brake airpump, power supply, and power distribution. The controllers are characterized by high integration, high safety andreliability, and high power density, and can meet the needs of new energy commercial vehicles.
(4) High performance servo system. Gree has developed six series of servo motors involving more than 300models and three major series of special servo drivers, which can comprehensively meet the equipmentapplication requirements of robots, CNC machine tools, automatic production lines, motor winding machines, andother automation occasions. The products successively won the Gold Award of 2018 Nuremberg InternationalInvention Exhibition in Germany, Robot Award of 2019 China International Industry Fair (CIIF), Major SpecialProject of Science and Technology of Guangdong Province in 2019, and the Grand Prize of 2020 Zhuhai Scienceand Technology Award. They have altered the situation that China's high-end robot servo system relied on foreignimports, indicating that Gree has been able to independently produce the core parts of industrial robots meetingthe international advanced level.(II) Adhere to independent innovation, constantly make breakthrough in world-leading technologies andlead industry standards to the world
1. Major scientific research achievements emerge one after another. Gree completed the appraisal of "nuclearair-cooled screw chiller", "nuclear water-cooled screw chiller" and other technical achievements in 2020. It hasaccumulated 31 world-leading technologies by now. The three projects named "Key Technologies and Applicationof Efficient VRF Air Conditioning Unit Based on Full Sample Big Data", "Key Technologies and Application ofWide Load and Full Scene Efficient VRF Unit", "Research and Application of Key Technologies of AdaptiveEfficient Screw Compressor under All Operating Conditions" won the first prize of the Science and TechnologyProgress Award of Guangdong Province, the first prize of China Machinery Industry Technical Invention Award,and the first prize of the Science and Technology Progress Award of China Energy Conservation Association inturn.In 2020, Gree made new progress in the research into basic technologies such as the key technologies of efficientsmall air compressor and proton exchange membrane fuel cell, ultra-low gravity vapor compression heat pumpcycle technology, space ultra-low temperature refrigeration technology, air conditioning and auxiliary coolingsystem for civil aircrafts, and the high precision and low drift technology of control and detection circuit, and alsodeveloped Gree’s first GRM01 refrigerant with independent intellectual property rights.
2. Improve the level of standardization and generalization in an all-round way. Gree established 32 technicalstandard sub-committees and compiled or revised 1,825 technical standards. The national standard for new energyefficiency of household air conditioners, GB 21455-2019 Minimum Allowable Values of the Energy Efficiency andEnergy Efficiency Grades for Room Air Conditioners, revised by China National Institute of Standardization andGree as leading revisers was officially implemented as of 1 July, 2020. In terms of international standards, the twointernational standard proposals regarding photovoltaic direct-driven appliance controller led by Gree were
approved by IEC/TC82 project initiation, which filled in gaps of the test specifications for photovoltaicdirect-driven appliance controllers; Gree Chairperson Dong Mingzhu officially served as the chairman of theSub-committee on Test and Evaluation of Refrigeration Compressors under the ISO Technical Committee onRefrigeration and Air Conditioning, promoting the technology of cooling compressor to rise to an internationalstandard.
3. Strengthen the protection and application of intellectual property rights. The total number of patent applicationswas 15,072 in 2020, including 8,793 invention patents and 2,743 invention patent grants, among which 2,513invention patent grants were issued to the first applicant, ranking No.6 in China. Gree became the only householdappliance enterprise that has entered the top 10 enterprises in invention patent patents in China for fiveconsecutive years. The company licensed one patent for the invention of motor fairing hood to EBMPAPSTranking among the top three fan companies in the world, an expert in the global blower area, which demonstratedthe creation power of Gree to the world following its granting of a patent license to Grundfos of Denmark in 2019.
4. Continuously improve the capability of product design. In 2020, Gree continued to increase its investment inthe R&D of new products in new areas, and made breakthrough progress in the product series design, CMFplanning and design, user experience, and UI design. Adhering to the principle of concentration and diversifieddevelopment, it promoted the development of original products, and made outstanding achievements in the fieldof industrial design. Gree received 20 awards of three major International Design Awards (9 IF Product DesignAwards in Germany, 2 Red Dot Awards in Germany, and 9 IDEA Awards in the United States).(III) Optimize the quality control system, insist on quality innovation and implement the perfect qualityassurance mode in an in-depth mannerTo meet the consumers' requirement for pursuing a high quality life, Gree has been committed to providing highquality products. In 2020, Gree won the honor of "High Quality Leading Enterprise" awarded by the ChinaQuality Certification Center, becoming the first and only enterprise of China that received this honor. In the ChinaCustomer Satisfaction Index (C-CSI) issued by China National Institute of Standardization in 2020, Gree rankedfirst in the category of air conditioners, and has topped the list for 10 consecutive years. The Quality Management- Innovation Cycle Guide Based on Customer Demand, a national standard, drafted by Gree as the leading partywas officially implemented as of 1 July, 2020.(IV) Pay close attention to industrial transformation, accelerate diversified layout, and cultivate newgrowth points
1. Intelligent equipment sector
Zhuhai Gree Intelligent Equipment Co., Ltd. is an intelligent equipment manufacturing enterprise integratingR&D, production, sales and service, which boasts 15 R&D departments, 421 R&D members, 5 production bases,6 specialized companies, and 7 technical service centers. The company attaches importance to the R&D andaccumulation of autonomous technologies, and has applied for more than 2800 patents, of which 1760 areinvention patents. Relying on its own scientific research and technology level, Zhuhai Gree Intelligent EquipmentCo., Ltd. won the honors including National High-tech Enterprise and Guangdong Industrial Robot KeyEnterprise, and took the lead to complete a number of national key projects and participated in the formulation ofthree national standards for the robot industry.Its intelligent equipment products cover more than 10 fields, including servo manipulators, industrial robots,
intelligent warehousing equipment, intelligent testing, special machine tool equipment for heat exchanger,unmanned automation production line body, CNC machine tools, automatic production lines, and energy savingand environmental protection, involving more than 100 specifications. In 2020, the company focused on theintroduction of full direct-driven five-axis processing machine tools, high-precision vertical processing machinetools, and large-scale CNC gantry machine tools, among which the repeated positioning precision ofhigh-precision vertical processing machine tools reach 0.003 mm, and the five-axis machine tool FA500 has beenused in the field of complex surface and cavity processing in precision mold manufacturing, and the fulldirect-driven vertical processing machine tool DV540 realizes the polishing-free process of high precisiongraphite mold processing.In 2020, Zhuhai Gree Intelligent Equipment Co., Ltd. vigorously promoted all construction works of theprovincial manufacturing innovation center in Zhanjiang, and successfully assisted more than 30 small householdappliance enterprises in Zhanjiang in implementing technological innovation and intelligent manufacturingupgrade. Its intelligent manufacturing demonstration project of high-end CNC machine tools and demonstrationproject of ten-million-level intelligent storage stereo warehouse were successfully implemented, which laid afoundation for the market development of the automobile, casting, chemical industry and other fields.
2. Precision mould sector
Mould is the "mother of industry" and provides important technical support for high efficiency, low cost and highquality of product manufacturing. The industrial level of moulds is an important symbol for the manufacturinglevel of a country. Gree deeply exploits the mould field, and has established a benchmark in the mould industry interms of technological innovation, quality management, informatization, and intelligent manufacturing.As of December 2020, Gree has accumulatively applied for 485 patents, of which 125 were invention patents, 251were patents for utility models, and 109 were industrial design patent; obtained a total of 293 patents grants,including 7 invention patents, 191 patents for utility models, and 95 industrial design patents.In 2020, Gree Precision Mold Co., Ltd built “Guangdong Intelligent Mould Technology Innovation Center”,organized to tackle key technical problems such as mould simulation design, intelligent design, new mouldtechnology, and intelligent manufacturing application, and applied for 90 patents.In 2020, Gree Precision Mold Co., Ltd adopted the multi-cavity vertical square side-glue-in hot runner technologyfor the first time to provide customers with a new precision and efficient multi-cavity injection molding solution,helping the traditional stationery enterprises realize intelligent manufacturing upgrade; it has developed a cleanand efficient steam mould solution, which challenged the traditional oil-heated mould technology in the lunch boxfield; it completed the mould design, material preparation, processing, and delivery of the forehead thermometerproject within 15 days; it has developed the new technologies and moulds including the forming technology ofblack leather automotive exterior parts, the ultra-high speed turbine mould with carbon fiber, and the glass insertmould.
3. Renewable resource sector
Gree organically combines the resource regeneration and development of circular economy with its corporatesocial responsibilities, actively practices the extended producer responsibility regime, and strives to create a greenclosed-loop industrial chain from design and manufacturing to recycling. Gree has successively established sixrenewable resource bases in Zhuhai, Changsha, Zhengzhou, Shijiazhuang, Wuhu, and Tianjin since 2010, engagedin the recycling of waste electrical and electronic products and end-of-life vehicles, as well as the deep processing
and recycling of waste circuit boards and waste plastics. Thanks to the rapid development for nearly one decade,Zhuhai Gree Green Resources Recycling Co., Ltd has become a leading enterprise in the industry. At present, ithas the qualification and capacity of dismantling 13 million waste household appliances and 94,000 vehicles, theprocessing capacity of 180,000 tons of recycled plastics, and the disposing qualification and capacity of 60,000tons of waste circuit boards. It recycled 7 million sets of waste household appliances in 2020.By the end of 2020, Zhuhai Gree Green Resources Recycling Co., Ltd has accumulatively disposed of more than34 million sets of waste electrical and electronic products and more than 60,000 tons of end-of-life vehicles, andconverted over 500,000 tons of recycled copper, iron, aluminum, and plastics. It was estimated that the miningamount of mineral crude oil resources was reduced by about 1.3 million tons, water was saved by about 3.3million cubic meters, and carbon emission was reduced by more than 1.7 million tons.
4. Semiconductor sector
Gree has made great progress in the research of the semiconductor field and its self-developed chips and deviceshave been verified by batch production. Gree achieved independent R&D of core technologies. Gree and itssubsidiary Zhuhai Zero Boundary Integrated Circuit Co., Ltd have applied for 629 patents in the field ofsemiconductor technology, including 202 patent grants, 68 invention patents, and 134 patents for utility models,and 56 international patents, among which the invention patent named Method and Device for Judging Stability ofClock Circuit won one silver prize of the 7th Guangdong Patent Award in 2020.Gree general industrial-grade 32-bit series MCU, featuring the advantages of high performance, high reliability,low power consumption, and low cost, has been widely promoted and used in Gree air conditioner series productswith an annual output of more than 10 million. It can be widely applied to consumer electronics, wearable devices,household products, health care support, large commercial units, industrial sensors, high-performance motorcontrol, and other fields.Gree smart home series chips integrate the high-performance AI computing power and embedded MCU, andimplement intelligent control for image recognition, man-machine interaction, motor drive, security encryptionand other functions. These products have been applied to the intelligent energy-saving algorithm of airconditioning and intelligent fans, and provided the complete supporting software and hardware solutions. Theycan be widely used in smart household appliances, end-side AIoT, smart home, industrial computing, industrialautomation, and other fields.
5. New energy sector
The business scope of Gree new energy sector covers the photovoltaic storage DC air conditioning system,industrial and commercial energy storage, new energy DC electric appliances, energy Internet system, new energyauto parts, etc.Bearing in mind the mission of jointly building a clean, safe, reliable, intelligent and efficient living and workingenvironment and a better new life, Gree leads the construction of a new zero-carbon DC ecology. In 2020, Gree’sphotovoltaic storage DC air conditioners and energy Internet system won the bidding of four major domesticdemonstration projects (Shenzhen Future Mansion, Suzhou Tongli DC Park Project, Xiong'an Green EnergyMagic Box, and Datong Energy Revolution Vanguard Exhibition Hall), which were put into full operation in 2020.In addition, Gree was awarded the landmark projects such as Jiangsu Pangdong Energy Station, Xi'anAeronautical University, and the Green Energy and Building Research Center of CHN Energy.In 2020, Gree’s photovoltaic air conditioning products achieved full coverage of VRF units, screw chillers and
centrifugal chillers, effectively fitting more application scenarios; it strove to create the popular 20 kW and 5 kWphotovoltaic air conditioning products with a high performance-price ratio, which adopted the topologyarchitecture of three-level separating power devices and the new thermal design for the first time to realize powergeneration without derating at the ambient temperature of 50°C, reaching the industry-leading level. Thegrid-connection performance of the airborne converter for photovoltaic inverter centrifugal unit was recognizedby TUV. It helped SANWO Yiwei photovoltaic centrifugal unit project become a national demonstration projectof efficient refrigerator room in Singapore. This project is the first zero energy consumption building in Singaporeand won the Platinum Award for Green Building Standard presented by the Academy of the Built Environment(BCA) of Singapore.In 2020, Gree launched the ultra-low temperature performance and high-capacity energy storage system productsin the energy storage sector, which are applied to the project of Pingdingshan High Voltage Apparatus ResearchInstitute; employing the key technologies of the park level energy Internet system, these products helped Greeimplement the 200 MWh industrial centralized energy storage project, and can not only function as a standbypower supply, but also improve the power quality and reduce the power cost.Besides, the IEEE PES Low Voltage DC (LVDC) Technical Committee Gree intended to build as a chairman unithas been approved, and Guangdong Energy Internet Innovation Center constructed under the leadership of Greehas been put into operation to provide assistance for the double-carbon-objective driven green economictransformation.In the field of new energy vehicles, Gree has reached strategic cooperation with a lot of enterprises in the field toprovide customers with products and automatic manufacturing solutions covering new energy vehicle airconditioners, motors, charging piles, process equipment, moulds, etc.
6. Medical and health sector
In the background of grim epidemic situation and shortage of prevention and control materials, Gree activelyfulfilled its social responsibilities, swiftly established Zhuhai Ge Health Medical Technology Co., Ltd to produceepidemic prevention materials, and, based on the existing technical advantages, accessed the medical equipmentindustry and established Chengdu Gree Xinhui Medical Equipment Co., Ltd to lay out and cultivate the strategicemerging industry.Zhuhai Ge Health deals with production and operation of medical goggles, medical masks, medical foreheadthermometers and other class-I and class-II medical devices. Relying on the solid strength of Gree in precisionmoulds and intelligent equipment, it quickly and independently developed precision moulds for medicalprotection products, automatic production line of plain face masks, and the automatic production line of KN95mask. It took only 16 days from drawing design to equipment installation and debugging. In the hard times ofepidemic prevention and control, it successfully realized the mass production supply of masks and other materials,making a contribution to winning the battle of epidemic prevention and control.Focusing on the COVID-19 epidemic, Gree Xinhui started the development of mobile protective equipmentmeeting the requirements for epidemic protection. In the end, it broke through the key technical difficulties ofbiosafety laboratory, developed the P2+ environmental control system, filling the gap of the company in medicalequipment temperature control system, and successfully launched the system to the market and delivered it in2020, helping mobile detection of nucleic acid and reducing the detection load of hospitals, promoting thelocalization of high-end medical equipment and key technologies, and also providing a strong guarantee forcoping with public health emergencies.
(V) Strengthen digital operation, promote online and offline integration, and realize sales breakthrough ofall productsBased on the big data, artificial intelligence, and other advanced technologies, Gree new retail mode upgraded theproduction, circulation and sales process of household appliances, and deeply integrated the online service, offlineexperience, warehousing and distribution, and after-sales service.In terms of offline exclusive shops, Gree promoted the construction of digital shops. By introducing the digitaldevices such as intelligent shopping guide screen, cloud shelf and electronic price tag and upgrading the shopimage, offline shops not only have the offline and online sales functions, but also become a scene space forexperience, reception, and communication. Consumers will personally feel the technology convenience, healthand comfort brought by Gree products in shops. Next, Gree terminal new retail shops will create a newomni-channel retail mode based on the experience in ten thousand shops.In terms of online Gree Dong Mingzhu's store, Gree has promoted the opening of online Gree Dong Mingzhu'sstores for 30,000 offline stores, further enhancing the communication between consumers and brands, andconstantly improving the service efficiency and quality. The nationwide live streaming tour was completed ateight sites throughout the year, showing the local economic and cultural characteristics and helping upgrade thequality of life.Benefiting from the application of Gree new retail mode, consumers can not only experience products offline, butalso buy more favorable products due to the reduction of intermediate links; the distributors have gained theomni-channel sales capability, and can better manage and serve consumers according to the market changes; thefactories have more opportunities to directly contact consumers, and can optimize the product design according toconsumers' preferences and continuously provide better products.(VI) Actively expand the overseas market, insist on the high-end leading strategy and energetically developproprietary brandsThe COVID-19 epidemic spread in the world, international market demands declined, and the trade downwardpressure increased. Despite of this, Gree continued to exert its strength in overseas markets, persisted in themarket and user orientation, and developed independent brand construction from the aspects of strategy, product,quality, and service. As a result, the international reputation of Gree brands was continuously improved.In 2020, Gree's overseas commercial projects have achieved fruitful results. The total cooling capacity of overseasHVAC design projects exceeded 1.1 million cold-tons. Gree was awarded many large-scale commercial projectssuccessively, e.g., Israel Hi Tower commercial and residential integration project, Serbia Chinese Cultural Center,Nigeria Rai railway project, Indonesia Batam One Batam Mall project, and Taipei Arena project, and its bidwinning products included centrifugal units, screw units and other large-scale commercial products, which haveproduced marked effects in public facilities, industrial parks, star hotels, chain restaurants, and other fields, andestablished the international image of Gree brands.The COVID-19 epidemic was severe overseas. To provide a healthier and cleaner environment for overseasconsumers, GREE has launched a series of household appliances integrating air purification, anti-virus and otherhealth functions to overseas markets. Freair fresh air conditioner is equipped with the suction and exhausttwo-way ventilation system, and provides the UVC sterilization function to effectively filter PM2.5; thedehumidifier provides the UV sterilization function; the "V-Lasso" air purifier specially for killing COVID-19virus leads the new trend of health upgrade, and helps Gree realize high-end brand positioning depending on
excellent products.Affected by the continuous spreading of COVID-19 epidemic, the traditional promotion modes such as businessvisit, international exhibition and offline promotion have been frustrated. Gree's overseas brand promotion hasbeen actively transformed. It took the advantage of digital means to participate in the online Canton Fair, anddisplayed its corporate image and latest products to overseas customers in an all-round way through livemarketing, VR exhibition hall, online shops, and other new approaches.(VII) Focus on user needs, continue to explore core technologies and lead the era where everything isconnectedGree insists on independent innovation, uses core technologies to build a smart home where everything isconnected, focuses on the consumers' demand for intelligent life, and realizes the linkage of household appliancesin the whole house by connecting intelligent and high-quality household appliances of all categories. Centering onthe goal of "connecting everything, responding to any call" of Gree Zero-carbon Healthy Home, intelligenthousehold appliances continued to improve the smart life systems, products, entrances and Internet of Thingstechnologies, and achieved the overall smart life solution of energy conservation and environmental protection,comfort and health, and wisdom and humanities in 2020.The solution involves six smart life systems, namely, energy, air, sleep, recipe, security, and lighting, and five IOTtechnologies, adopts the five major Internet of Things technologies including the connection technology,interaction technology, sensing technology, cloud computing, and big data, and artificial intelligence, and covers61 categories of intelligent products. Consumers can experience the family life of "connecting everything,responding to any call" through five control entries (Gree IoT air conditioner, "Gree+" App, IoT mobile phone,smart door lock and Cube Monster).According to the “2020 Global Smart Home Invention Patent Top 100 Rankings” released by IPRdaily, anintellectual property industry media, Gree ranked No.2 in the world, which proves its excellent R&D strength inintelligent household appliances.(VIII) Promote intelligent manufacturing and build a global intelligent demonstration factory of airconditionersGree Electric is devoted to promoting the transformation and upgrade of intelligent manufacturing relying on theindependent and innovative core technologies. With the goal of establishing a whole process data-drivenintelligent decision-making platform and guided by the three major directions of "system construction,technological innovation, and scene application", Gree makes great efforts to open up the whole process and allfactor business, strengthen the foundation of production and manufacturing, reshape the end-to-end value chain,and build a global intelligent demonstration factory of air conditioners.In 2020, aiming to build a digital factory and based on lean manufacturing, Gree optimized the core business ofthe production system, and realized intelligent production scheduling, intelligent testing, efficiency improvementof bottleneck positions, and process information management by improving the flexible automation capability,connecting the data inside and outside the factory, integrating the information system platform, and implementingintelligent application. The logistics circulation and driving between suppliers and factories promoted the qualityimprovement, efficiency improvement, cost reduction, and inventory reduction in the manufacturing process; Greebuilt a production and operation service command center to implement platform problem self-perception,
intelligent prevention of exceptions, and intelligent service evaluation, quickly solve problems on the productionsite, and improve the management efficiency.As an important support for the future industrial Internet, 5G is the pioneering field of digital strategy. In 2020,Gree accelerated the promotion of 5G+ industrial Internet and the deployment of 5G base station facilities,achieved the 5G network coverage, transformed the existing resources and network, built Gree intelligentmanufacturing network, realized the interconnection between production equipment, instruments, sensors, controlsystem, and management system, and realized in-dept 5G application in the scenarios such as industrial videosurveillance, smart production service, intelligent quality inspection, intelligent warehouse storage, and intelligentlogistics distribution. Zhuhai base has been recognized as one of the first group of 5G+ industrial Internetapplication demonstration parks by the Department of Industry and Information Technology of GuangdongProvince.(IX) Deepen reform and accelerate the transformation and upgrade of intelligence and informatizationGree has built its own big data platform to provide the massive data storage, analysis, query and data miningcapabilities. The platform features high data throughput, high response speed, horizontal expansion, easy-to-usescheduling function, and complete data flow management functions, laying a solid foundation for the informationupgrading in the process of product production and R&D.Centering on its intelligent manufacturing development strategy and relying on the abundant scenes of industrialmanufacturing, Gree accelerated the promotion of AI applications, focused on the in-depth layout in intelligentdetection, intelligent recognition, intelligent office, and other fields, and promoted the implementation andapplication of behavior identification of key positions, intelligent detection of key materials, AOI detectionapplication, industrial visual inspection application, face recognition access control, and other business sectors,improving the production efficiency and quality level.In the aspect of smart new retail, Gree took root in the sales scene of Gree's offline terminal shops to conform tothe trend of new retail mode. Gree worked out Gree's dream shop plan, built the digital upgrade entrance forterminal shops relying on the Internet engineering technology and through the touch interaction mode, connectedthe online and offline closed-loop paths, and created Gree’s characteristic smart shopping guide shops.Regarding smart quality management, Gree developed the digital intelligent management platform to collect andanalyze the whole process quality data, realize remote monitoring, prevention and timely response of the qualityproblems found in the production process, provide an underlying data support for the digital plant, and concentrateadvantageous resources to fix the core quality problems. It promoted the implementation of supplier managementinformation projects such as big data quality management (Tian-yan), supplier audit system management, andsupply source interconnection management platform, and comprehensively controlled and improved the qualitylevel of suppliers.In terms of intelligent production management, Gree accelerated the application of the Internet of Things,impelled the networking of eight categories of equipment, namely, the key supporting capacity equipment, highenergy consumption equipment, quality testing equipment, process guarantee equipment, automation equipment,security equipment, key logistics equipment, and air conditioning sector equipment of the group, developed a fulllife cycle management platform for equipment, and interconnected various equipment operation information withsystems, achieving the goals of real-time equipment monitoring, parameter performance optimization, earlywarning management, and quality testing improvement, and implementing the integrated management of
equipment operation and maintenance.In the aspect of smart customer service, Gree implemented information projects such as intelligent dispatching,service personnel turnover analysis, parts management, and system logic optimization, and improved thedispatching service efficiency by replacing traditional manual dispatching with intelligent dispatching; itmonitored and analyzed the after-sales data generated in the process of providing after-sales service, so as to morereasonably and intelligently deploy the installation and maintenance personnel and repair parts in the salesterritory and make the service more accurate and effective; it established the real-time feedback system ofconsumer information through the after-sales service information platform to comprehensively identify andefficiently collect maintenance information.As for smart management, big data means was used to integrate the data of various business sectors of theenterprise, conduct business intelligence analysis, and realize transparent and intelligent management of datathrough multi-dimensional data analysis perspective, with a view to providing effective operation monitoring forenterprise managers, efficiently supporting business growth, boosting the data insight of enterprises, and drivingthe digital transformation and upgrade of enterprises.As for smart property, Gree built a smart community of Gree talents. With the help of various Internet, Internet ofThings and AI technologies and methods, it integrated the security, facilities, personnel, energy efficiency,environment, and other property services in a unified way to create a comprehensive service platform fromscattered intelligence to overall intelligence, provide a new mode of convenient services for the community, andcreate a new experience of smart living environment.(X) Optimize the talent cultivation mechanism and incentive system, and help the Company developsteadilyIn 2020, the Company continued to increase independent training of innovative talents, deepened core businesssupport, built smart learning organizations, created an enabling ecosystem for vocational education, acceleratedthe supply of talents for the transformation of innovative achievements, and promoted high-quality developmentof the Company.The independent training of innovative talents was reinforced. Gree specially carried out practical technologytraining of the manufacturing field to realize continuous and in-depth training of technical talents and urgeemployees to grow into professional talents in the high-grade, high-precision and advanced technology field;adhered to the continuous cultivation of innovative talents, promoted independent innovation of science andtechnology, and strove to build Gree into a world R&D center of the manufacturing field; prepared to establish anational training base of talents with high technical ability, and build a platform for training of technical talents topromote the cultivation of talents with high technical ability; strengthened the reserve and training of youngtalents, forged a young management cadre team, and cultivated more talents for the development of enterprises.Support to the Company's core businesses was deepened. Closely linked to the core strategic businesses of theenterprise and focusing on the important areas and topics of strategic development, Gree carried out training, andsupported the implementation of enterprise strategy; strengthened the support to enterprise management andoperation, and conducted the cultivation of special talents for operation support in consideration of the needs ofemployee development and position promotion; supported and served the first-tier marketing, and closelyfollowed the Company's "New Retail" marketing innovation mode to forge a marketing talent team with "Greecharacteristics", and better support the first-tier marketing and service.
In 2020, in order to continuously improve employee satisfaction and happiness, Gree established an "all-roundemployee incentive system", a well-equipped living area for employees, and a Gree school with a beautifulenvironment and complete teaching facilities, and prepared to build Gree Hospital. All these welfare guaranteemeasures built a happy enterprise for Gree people. In 2021, Gree will launch an employee stock ownership plan toallow employees to share more of the achievements of corporate development.
II. Analysis on principal businesses
1. Overview
See the description in "Overview" of "Discussion and Analysis of Business Operation".
2. Revenue and cost
(1) Composition of operating income
Unit: Yuan
| 2020 | 2019 | Increase/Decrease over the previous year | |||
| Amount | Proportion in Operating Income | Amount | Proportion in Operating Income | ||
| Total operating income | 168,199,204,404.53 | 100% | 198,153,027,540.35 | 100% | -15.12% |
| Categorized by industry | |||||
| Manufacturing | 130,427,766,473.54 | 77.54% | 156,888,659,016.13 | 79.18% | -16.87% |
| Other businesses | 37,771,437,930.99 | 22.46% | 41,264,368,524.22 | 20.82% | -8.46% |
| Categorized by product | |||||
| Air Conditioner | 117,881,639,913.77 | 70.08% | 138,665,055,103.82 | 69.99% | -14.99% |
| Home Appliances | 4,521,756,518.81 | 2.69% | 5,575,911,375.57 | 2.81% | -18.91% |
| Intelligent equipment | 790,942,676.61 | 0.47% | 2,141,285,558.55 | 1.08% | -63.06% |
| Other main business | 7,233,427,364.35 | 4.30% | 10,506,406,978.19 | 5.30% | -31.15% |
| Other businesses | 37,771,437,930.99 | 22.46% | 41,264,368,524.22 | 20.82% | -8.46% |
| Categorized by region | |||||
| Domestic-main | 110,407,002,220.87 | 65.64% | 136,073,206,974.43 | 68.67% | -18.86% |
| business | |||||
| Overseas-main business | 20,020,764,252.67 | 11.90% | 20,815,452,041.70 | 10.51% | -3.82% |
| Other businesses | 37,771,437,930.99 | 22.46% | 41,264,368,524.22 | 20.82% | -8.46% |
(2) Industry, product, or region accounting for more than 10% of the Company's operating income oroperating profit
√ Applicable □ Not applicable
Unit: Yuan
| Operating incomes | Operating Cost | Gross Profit Margin | Increase or Decrease of Operating Income over Last Year | Increase or Decrease of Operating Cost over Last Year | Increase or Decrease of Gross Profit Margin over Last Year | |
| Categorized by industry | ||||||
| Manufacturing | 130,427,766,473.54 | 87,921,191,886.69 | 32.59% | -16.87% | -15.22% | -1.31% |
| Other businesses | 37,771,437,930.99 | 36,307,841,794.23 | 3.87% | -8.46% | -8.77% | 0.31% |
| Categorized by product | ||||||
| Air Conditioner | 117,881,639,913.77 | 77,430,333,762.13 | 34.32% | -14.99% | -11.20% | -2.80% |
| Other businesses | 37,771,437,930.99 | 36,307,841,794.23 | 3.87% | -8.46% | -8.77% | 0.31% |
| Categorized by region | ||||||
| Domestic-main business | 110,407,002,220.87 | 70,329,850,923.05 | 36.30% | -18.86% | -17.93% | -0.72% |
| Overseas-main business | 20,020,764,252.67 | 17,591,340,963.64 | 12.13% | -3.82% | -2.30% | -1.37% |
| Other businesses | 37,771,437,930.99 | 36,307,841,794.23 | 3.87% | -8.46% | -8.77% | 0.31% |
In case of adjustment of statistical caliber for the Company's main business data during the Report Period, main business data afterstatistical caliber adjustment at the end of the Report Period in the recent year
□ Applicable √ Not applicable
(3) Physical item income is higher than service income
√ Yes □ No
(4) Fulfillment of major sales contracts signed by the Company by the end of the Report Period
□ Applicable √ Not applicable
(5) Composition of operating cost
Unit: Yuan
| Industry Category | Item | 2020 | 2019 | Increase/Decrease over the previous year | ||
| Amount | Proportion to Operating Cost | Amount | Proportion to Operating Cost | |||
| Household appliances manufacturing | Raw material | 75,879,070,146.39 | 86.90% | 88,126,710,086.12 | 86.66% | -13.90% |
| Labor wage | 4,261,563,030.87 | 4.88% | 4,943,375,465.37 | 4.86% | -13.79% | |
| Depreciation | 1,693,963,131.00 | 1.94% | 1,565,803,533.57 | 1.54% | 8.18% | |
| Energy | 779,821,409.66 | 0.89% | 836,728,653.04 | 0.82% | -6.80% | |
(6) Changes in the consolidation scope occurred during the Report Period
√ Yes □ No
1. Business combination not involving enterprises under common control
(1) Business combination involving enterprises not under common control in the current period
Unit: Yuan
| Name of acquired party | Time point of equity acquisition | Cost of equity acquisition | Proportion of equity acquisition | Equity acquisition mode | Date of purchase | Determination basis of date of purchase |
| Songyuan Grain Group Co., Ltd. | 2020/12/31 | 246,272,496.65 | 75.00% | Purchase by means of cash | 12/31/2020 | Acquisition of control power |
(2) Combination cost and business reputation
Unit: Yuan
| Combination cost | Amount |
| Fair value of the equity held before the date of purchase on the date of purchase | 246,272,496.65 |
| Total combination cost | 246,272,496.65 |
| Less: Fair value share of the identifiable net assets acquired | 246,272,496.65 |
| Business reputation/combination cost smaller than the amount of fair value share of the identifiable net assets acquired | - |
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, theCompany increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and its
shareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Groupwas re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the totalBoard members, thus the Company has control over Songyuan Grain Group.As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to theowners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable netassets were appraised by Beijing Yachao Assets Appraisal Co., Ltd which issued [Beijing Yachao Appraisal Report(2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originally held bythe Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paid on thedate of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
Unit: Yuan
| Item | Songyuan Grain Group Co., Ltd. | |
| Fair value on the date of purchase | Carrying amount on date of purchase | |
| Assets: | ||
| Monetary capital | 70,436,872.44 | 70,436,872.44 |
| Accounts receivable | 58,501,141.40 | 58,501,141.40 |
| Receivables financing | 1,632,600.00 | 1,632,600.00 |
| Prepayment | 41,963,876.05 | 41,963,876.05 |
| Other receivables | 24,912,813.07 | 24,912,813.07 |
| Inventories | 397,055,281.83 | 397,055,281.83 |
| Other current assets | 47,958,691.72 | 47,958,691.72 |
| Other equity instrument investments | 7,000,000.00 | 7,000,000.00 |
| Fixed assets | 103,601,989.38 | 87,182,573.65 |
| Construction in Progress | 27,971,600.68 | 27,971,600.68 |
| Intangible assets | 41,875,107.81 | 29,763,765.14 |
| Long-term deferred expenses | 6,613,861.32 | 6,613,861.32 |
| Deferred income tax assets | 1,735,376.11 | 1,735,376.11 |
| Other non-current assets | 45,165,068.36 | 45,165,068.36 |
| Subtotal of assets | 876,424,280.17 | 847,893,521.77 |
| Liabilities: | ||
| Short-term borrowing | 421,685,022.79 | 421,685,022.79 |
| Accounts payable | 25,076,251.02 | 25,076,251.02 |
| Contractual liabilities | 22,238,960.98 | 22,238,960.98 |
| Payroll payable | 3,036,030.14 | 3,036,030.14 |
| Taxes payable | 592,097.19 | 592,097.19 |
| Other payables | 11,819,022.22 | 11,819,022.22 |
| Other current liabilities | 3,347,033.54 | 3,347,033.54 |
| Deferred income | 20,938,130.35 | 20,938,130.35 |
| Deferred income tax liabilities | 7,132,689.60 | |
| Subtitle of liabilities | 515,865,237.83 | 508,732,548.23 |
| Net assets | 360,559,042.34 | 339,160,973.54 |
| Less: minority equity | 114,286,545.69 | 108,937,028.49 |
| Net assets obtained | 246,272,496.65 | 230,223,945.05 |
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
Unit: Yuan
| Name of acquired party | Carrying amount of the equity originally held before the date of purchase on the date of purchase | Fair value of the equity originally held before the date of purchase on the date of purchase | Gains or losses from remeasurement of the equity originally held before the date of purchase at the fair value |
| Songyuan Grain Group Co., Ltd. | 230,223,945.05 | 246,272,496.65 | 16,048,551.60 |
(5) Method and main assumptions for determining the fair value on the date of purchase
1.Appraisal and recognition methods: The asset based approach and the income approach were used to appraisethe assets and liabilities this time.
2.Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of theevaluated unit can be timely adjusted and innovated along with the development of the market and science andtechnology.B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showingthat the production capacity will change in the future, it is assumed that the evaluated unit will not carry out majorfixed-asset investment activities that affect its operations in the future income period, and the production capacityof the enterprise is estimated according to the condition on the evaluation benchmark date.C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accountsreceivable and accounts payable similar to the historical years, with no payment in arrears that is significantlydifferent from the historical years.D. There are no property right disputes or other economic disputes related to the assets and liabilities declared bythe appraised unit.
E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significantadverse effects on the enterprise.
3.Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housingprices in the areas where they are located led to valuation appreciation.B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land marketprices led to valuation appreciation.
2. Business combination involving enterprises under common control
None.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Unit: Yuan
| Name | Time of establishment | Net assets of the end of the period | Net profit from the combination date to the end of the period |
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | 1/16/2020 | 1,000,170,464.38 | 170,464.38 |
| Zhuhai Ge Health Medical Technology Co., Ltd. | 2/18/2020 | 44,211,752.29 | 24,211,752.29 |
| Chengdu Gree Xinhui Medical Equipment Co., Ltd. | 4/8/2020 | 86,869,920.67 | 1,199,920.67 |
| Suzhou Qingzhan Environmental Technology Co., Ltd. | 5/13/2020 | 13,636,129.44 | -363,870.56 |
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 9/25/2020 | 80,049,226.28 | 49,226.28 |
| Gree Tianjin Xinhui Medical Equipment Co., Ltd. | 10/26/2020 | Not yet invested |
(7) Major changes or adjustment of businesses, products or services during the Report Period
□ Applicable √ Not applicable
(8) Major sales customers and suppliers of the Company
Major sales customers
| Total sales amount of 5 top customers (RMB) | 25,319,031,693.14 |
| Proportion of total sales amount of 5 top customers to the annual sales volume | 14.86% |
| Proportion of sales amount of related party in the sales amount of 5 top customers to the annual sales volume | 5.20% |
Information of 5 top customers
| Serial Number | Customer Name | Sales Volume (Yuan) | Proportion to Annual Sales Volume |
| 1 | First | 7,906,348,022.11 | 4.64% |
| 2 | Second | 5,111,746,539.95 | 3.00% |
| 3 | Third | 4,526,734,392.66 | 2.66% |
| 4 | Fourth | 4,328,457,769.40 | 2.54% |
| 5 | Fifth | 3,445,744,969.02 | 2.02% |
| Total | -- | 25,319,031,693.14 | 14.86% |
Other description of major customers
√ Applicable □ Not applicable
Among the top five customers, Zhejiang Shengshi Xinxing Gree Trading Co., Ltd and Henan Shengshi Xinxing Gree Trading Co.,Ltd are related parties of the Company. Other customers have no related-party relationship with the Company.Major suppliers of the Company
| Total amount of purchase of top 5 suppliers (RMB) | 37,290,901,785.46 |
| Percentage to the total amount of annual purchase | 32.28% |
Information about top 5 suppliers of the Company
0.00%
SerialNumber
| Serial Number | Name of supplier | Amount of purchase (yuan) | Percentage to the total amount of annual purchase |
| 1 | First | 12,433,227,710.60 | 10.76% |
| 2 | Second | 8,920,198,128.91 | 7.72% |
| 3 | Third | 6,133,511,219.60 | 5.31% |
| 4 | Fourth | 5,575,473,433.40 | 4.83% |
| 5 | Fifth | 4,228,491,292.95 | 3.66% |
| Total | -- | 37,290,901,785.46 | 32.28% |
Other information about the major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
| 2020 | 2019 | Increase/Decrease over the previous year | Description of the material change |
| Sales expense | 13,043,241,798.27 | 18,309,812,188.35 | -28.76% | |
| Overhead Expense | 3,603,782,803.64 | 3,795,645,600.08 | -5.05% | |
| Financial expense | -1,937,504,660.07 | -2,426,643,429.91 | 20.16% | |
| R&D expenses | 6,052,563,108.10 | 5,891,219,715.90 | 2.74% |
4. Investment in research and development
√ Applicable □ Not applicable
Gree adheres to the philosophy that "science and technology change life; science and technology create life" andinsists on "independent research and development of core technologies". It firmly believes that only the realmastery of core technologies can enable us to grasp the fate of the enterprise and realize independent developmentof the enterprise. Meanwhile, Gree has set up a technological innovation system of "enterprise regarded as themain player, market orientation, enterprise-university-research cooperation". It insists on innovation driving,cultivates innovative talents, implements the leader strategy, and constantly consolidates its global leadingposition in the field of refrigeration.Gree boasts the largest R&D center of air conditioners in the world, four national R&D centers, one research andevaluation base of the National Notification Enquiry Center, 15 research institutes, nearly 1,000 laboratories, andnearly 15,000 R&D members. Its national R&D centers are the National Key Laboratory on Air ConditioningEquipment and Energy-saving System Operation, National Engineering Research Center of Green RefrigerationEquipment, State Recognized Enterprise Technology Center and the State-level Industrial Design Center.Meanwhile, it has been recognized as the "National Demonstration Base for Standardization of Consumer Goods"and "National Pilot Enterprise for Standardization of High-end Equipment Manufacturing Industry". In addition,Gree has established the "Motor and Control" academician workstation and has been successively approved toestablish post-doctoral research centers and doctoral workstations in Guangdong Province. In 2020, Gree wasapproved to establish "Guangdong Key Laboratory for Enterprises of High-speed Energy Saving Motor System".Gree Electric continued to lead the industry in testing, certification and standards. Gree has built more than 300professional laboratories for thermal balance, noises, reliability, electrical safety, electromagnetic compatibility,etc., and has been successively recognized by a variety of national or international organizations such as CNAS,TUV, UL, CSA, VDE, ITS, SGS, BV accredited laboratory, and AHRI certification, growing into the largestexperimental center in the industry that can provide the most complete tests and receive the largest number ofnational and international recognitions. Gree has accumulatively won 48 national, provincial or ministerial andindustrial awards. By the end of 2020, Gree accumulatively applied for 79,014 patents, including 40,195 patentsfor inventions; won 50 Chinese patent awards in total, including one gold award; won 11 China industrial designawards in total, including 3 gold awards; won 5 gold awards at the International Exhibition of Inventions ofGeneva and 5 gold awards at iENA.R&D investment of the Company
| 2020 | 2019 | Change ratio | |
| Number of R&D personnel (persons) | 14,458 | 14,251 | 1.45% |
| Proportion of number of | 17.22% | 16.04% | 1.18% |
| R&D personnel | |||
| Investment amount in research and development (Yuan) | 6,213,796,926.90 | 6,011,210,604.21 | 3.37% |
| Proportion of investment in research and development in operating income | 3.69% | 3.03% | 0.66% |
| Capitalization amount of research and development investment (RMB) | 161,233,818.80 | 119,990,888.31 | 34.37% |
| Proportion of capitalized research and development investment to research and development investment | 2.59% | 2.00% | 0.59% |
Reason for the significant change in proportion of investment in research and development to the operating income compared to the
previous year
□ Applicable √ Not applicable
Reason of the great change in the capitalization rate of R&D investment and its rationality explanation
□ Applicable √ Not applicable
5. Cash flows
Unit: Yuan
| Item | 2020 | 2019 | Increase/Decrease over the previous year |
| Sub-total of cash inflows from operating activities | 163,892,764,321.22 | 175,195,923,314.18 | -6.45% |
| Sub-total of cash outflows from operating activities | 144,654,127,012.06 | 147,302,209,220.59 | -1.80% |
| Net cash flows from operating activities | 19,238,637,309.16 | 27,893,714,093.59 | -31.03% |
| Sub-total of cash inflows from investing activities | 14,155,332,757.58 | 8,445,533,871.01 | 67.61% |
| Sub-total of cash outflows from investing activities | 14,057,602,607.40 | 19,720,582,471.78 | -28.72% |
| Net Cash Flow from Investment Activities | 97,730,150.18 | -11,275,048,600.77 | 100.87% |
| Sub-total of cash inflows from financing activities | 37,614,461,534.80 | 21,595,107,923.68 | 74.18% |
| Sub-total of cash outflows from | 58,725,959,033.00 | 40,817,084,044.61 | 43.88% |
| financing activities | |||
| Net Cash Flow from Financing Activities | -21,111,497,498.20 | -19,221,976,120.93 | -9.83% |
| Net increase in cash and cash equivalents | -2,147,522,183.34 | -2,399,549,002.85 | 10.50% |
Major factors that result in major changes in relevant data
√ Applicable □ Not applicable
| Item | 2020 | 2019 | Increase/decrease proportion | Cause of change |
| Net cash flows from operating activities | 19,238,637,309.16 | 27,893,714,093.59 | -31.03% | Mainly attributable to the decrease of cash received from sale of goods or rendering of services |
| Net Cash Flow from Investment Activities | 97,730,150.18 | -11,275,048,600.77 | 100.87% | Mainly attributable to the increase of cash received from recovery of investments and the decrease of cash paid for investments |
The description of causes of major differences existing between the net cash flows from operating activities of the Company and netprofits of the current year in the Report Period
□ Applicable √ Not applicable
III. Non-core business analysis
□ Applicable √ Not applicable
IV. Analysis of assets and liabilities
1. Major changes in assets composition
Since 2020, the Company has implemented the new income standards or new lease standards for the first time and adjusted andimplemented relevant items in financial statements at the beginning of the year.
√ Applicable □ Not applicable
Unit: Yuan
| At the end of 2020 | At the beginning of 2020 | Change of proportion | Description of the material change | |||
| Amount | Proportion to total assets | Amount | Proportion to total assets | |||
| Monetary capital | 136,413,143,859.81 | 48.86% | 125,400,715,267.64 | 44.32% | 4.54% | |
| Accounts receivable | 8,738,230,905.44 | 3.13% | 8,439,719,697.00 | 2.98% | 0.15% | |
| Inventories | 27,879,505,159.39 | 9.98% | 24,084,854,064.29 | 8.51% | 1.47% | |
| Investment real | 463,420,861.39 | 0.17% | 498,648,691.85 | 0.18% | -0.01% | |
| estate | ||||||
| Long-term equity investment | 8,119,841,062.14 | 2.91% | 7,064,186,161.29 | 2.50% | 0.41% | |
| Fixed assets | 18,990,525,087.94 | 6.80% | 19,121,930,757.04 | 6.76% | 0.04% | |
| Construction in Progress | 4,016,082,730.07 | 1.44% | 2,431,051,409.94 | 0.86% | 0.58% | |
| Short-term borrowing | 20,304,384,742.34 | 7.27% | 15,944,176,463.01 | 5.63% | 1.64% | |
| Long-term borrowing | 1,860,713,816.09 | 0.67% | 46,885,882.86 | 0.02% | 0.65% |
2 Assets and liabilities measured by fair value
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount at the beginning of the period | Gains and losses from changes in fair value | Accumulated fair value changes recognized in equity | Depreciation reserves withdrawn during the period | Amount of buying in during the period | Amount of selling out during the period | Other changes | Amount at the end of the period |
| Financial assets | ||||||||
| 1. Trading financial assets (excluding derivative financial assets) | 955,208,583.58 | -19,994,874.52 | 534,846,535.22 | 1,099,239,744.28 | 370,820,500.00 | |||
| 2. Derivative financial assets | 92,392,625.69 | 193,101,528.27 | 285,494,153.96 | |||||
| 3. Receivables financing | 28,226,248,997.12 | -4,724,303.98 | -4,724,303.98 | 7,248,120,097.65 | 20,973,404,595.49 | |||
| 4. Other debt investments | 296,836,282.20 | 3,072,274.54 | 4,767,408.61 | 200,000,000.00 | 502,202,293.17 | |||
| 5. Other equity instrument investments | 4,644,601,697.51 | 1,226,377,338.69 | 2,939,667,619.14 | 2,007,000,000.00 | 44,676,920.00 | 7,788,405,891.47 | ||
| 6. Other non-current financial assets | 2,003,483,333.33 | 2,003,483,333.33 | ||||||
| 7. Others | 432,924,010.26 | 38,205,618.45 | 22,298,300.00 | 410,000,000.00 | 44,822,900.00 | |||
| Subtotal | 36,651,695,529.69 | 1,436,037,581.45 | 2,962,009,023.77 | 2,741,846,535.22 | 8,802,036,761.93 | 31,968,633,667.42 | ||
| Total | 36,651,695,529.69 | 1,436,037,581.45 | 2,962,009,023.77 | 2,741,846,535.22 | 8,802,036,761.93 | 31,968,633,667.42 | ||
| Financial liabilities | ||||||||
Content of other changesNoneWhether there are significant changes in the main asset measurement attribute of the Company during the Report Period.
□ Yes √ No
3. Limitation of asset rights by the end of the Report Period
Unit: Yuan
| Item | Carrying amount at the end of the period | Cause of restriction |
| Monetary capital | 20,335,403,491.19 | Statutory deposit reserve and deposits |
| Receivables financing | 10,145,874,359.07 | Pledged |
| Fixed assets | 15,133,873.82 | Mortgage |
| Other equity instrument investments | 6,643,969,479.37 | For details about the restricted shares, see Note (V) 15 |
| Intangible assets | 419,175,255.02 | Mortgage |
| Other debt investments | 496,933,800.00 | Pledged |
| Total | 38,056,490,258.47 |
V. Investments
1. Overall review
√ Applicable □ Not applicable
Unit: Yuan
| Investment in the Report Period | Investment in the same period last year | Change percentage |
| 3,561,055,956.90 | 7,192,756,039.01 | -50.49% |
2. Major equity investments obtained during the Report Period
□ Applicable √ Not applicable
3. Major non-equity investments during the Report Period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Securities investment
√ Applicable □ Not applicable
Unit: Yuan
| Type of securities | Security code | Abbreviation of security name | Initial investment cost | Accounting measurement method | Carrying amount at the beginning of the period | Gains and losses from changes in fair value | Accumulated fair value changes recognized in equity | Amount of buying in during the period | Amount of selling out during the period | Profit and loss during the Report Period | Carrying amount at the end of the period | Accounting calculation items | Capital Source of Investment |
| Stocks listed on domestic and overseas stock exchanges | 600745 | Wingtech Technology | 884,999,996.60 | Measure at fair values | 3,316,957,037.50 | 233,083,467.50 | 2,665,040,508.40 | 5,378,849.25 | 3,550,040,505.00 | Other equity instrument investments | Private | ||
| Stocks listed on domestic and overseas stock exchanges | 600703 | San’an Optoelectronics | 2,000,000,000.00 | Measure at fair values | 1,093,928,974.37 | 1,093,928,974.37 | 2,000,000,000.00 | 3,093,928,974.37 | Other equity instrument investments | Private | |||
| Stocks listed on domestic and overseas stock exchanges | 600619 | HIGHLY | 1,142,602,956.85 | Measure at fair values | 775,199,650.33 | -104,929,468.64 | -474,800,740.04 | 17,265,162.85 | 667,802,216.81 | Other equity instrument investments | Private | ||
| Stocks listed on domestic and overseas stock exchanges | 01528 | RSMACALLINE-HSHS | 658,812,241.64 | Measure at fair values | 341,894,553.87 | -45,004,435.09 | -404,350,382.71 | 12,924,322.85 | 254,461,858.93 | Other equity instrument investments | Private | ||
| Bonds | 160017 | 16 Interest-bearing treasuries 17 | 288,405,500.00 | Measure at fair values | 296,836,282.20 | 870,710.17 | 2,565,844.24 | 10,250,400.00 | 298,866,682.20 | Other debt investments | Private | ||
| Bonds | 150629 | 18 Chang'an 04 | 237,007,123.28 | Measure at fair values | -403,823.28 | 237,007,123.28 | 17,991,436.58 | 236,603,300.00 | Trading financial assets | Private | |||
| Stocks listed on domestic | 600888 | Xinjiang Joinworld | 155,323,077.24 | Measure at fair values | 210,550,455.81 | 49,298,800.55 | 59,849,259.12 | 44,676,920.00 | 2,752,293.54 | 215,172,336.36 | Other equity instrument | Private |
| and overseas stock exchanges | investments | ||||||||||||
| Bonds | 200408 | 20 Nongfa 08 | 199,203,000.00 | Measure at fair values | 2,201,564.37 | 2,201,564.37 | 200,000,000.00 | 3,697,816.45 | 203,335,610.97 | Other debt investments | Private | ||
| Bonds | 150588 | 18 Chang'an 03 | 134,444,931.50 | Measure at fair values | -227,731.50 | 134,444,931.50 | 10,169,579.60 | 134,217,200.00 | Trading financial assets | Private | |||
| Total | 5,700,798,827.11 | -- | 4,941,437,979.71 | 1,228,818,058.45 | 2,944,435,027.75 | 2,571,452,054.78 | 44,676,920.00 | 80,429,861.12 | 8,654,428,684.64 | -- | -- | ||
| Disclosure date of Announcement on Approval of Portfolio Investment by Board of Directors | 30 April, 2020 | ||||||||||||
| Disclosure date of Announcement on Approval of Portfolio Investment by Board of Shareholders (if any) | 2 June, 2020 | ||||||||||||
Important bond investment
| Item | Balance at the end of the period | Beginning Balance | ||||||
| Face value | Coupon rate | Real interest rate | Maturity date of bonds | Face value | Coupon rate | Real interest rate | Maturity date of bonds | |
| 16 Interest-bearing treasuries 17 | 200,000,000.00 | 2.74% | 3.10% | 4 August, 2026 | 200,000,000.00 | 2.74% | 3.10% | 4 August, 2026 |
| 16 Interest-bearing treasuries 17 | 100,000,000.00 | 2.74% | 3.44% | 4 August, 2026 | 100,000,000.00 | 2.74% | 3.44% | 4 August, 2026 |
| 17 Baoanji MTN001 | 60,000,000.00 | 6.20% | 6.24% | 18 August, 2020 | ||||
| 10 State grid bonds 01 | 350,000,000.00 | 4.74% | 4.98% | 5 February, 2020 | ||||
| 20 Nongfa 08 | 200,000,000.00 | 3.45% | 3.54% | 23 September, 2025 | ||||
| 19 Chang'an 01 | 491,000,000.00 | 7.50% | 21 February, 2022 | |||||
| 18 Chang'an 04 | 230,000,000.00 | 8.00% | 23 August, 2021 | |||||
| 18 Chang'an 03 | 130,000,000.00 | 8.00% | 6 August, 2021 | |||||
| Total | 860,000,000.00 | -- | -- | -- | 1,201,000,000.00 | -- | -- | -- |
(2) Investment in derivatives
√ Applicable □ Not applicable
Unit: RMB 10,000
| Operation name of investment in derivative | Incidence relation | Whether or not transaction was related | Type of investment in derivatives | Initial amount of investment in derivatives | Start date | Expiry date | Beginning investment amount | Amount of buying in during the period | Amount of selling out during the period | Withdrawing depreciation reserve amount (If any) | Ending investment amount | Proportion of the ending contract amount to net assets at the end of the report period | Profits and losses during the report period |
| Futures Company | Non-related party | No | Futures Hedging Contract | 613.47 | 1 January, 2020 | 31 December, 2020 | 613.47 | 4,482.29 | 0.04% | 9,692.70 | |||
| Financing Institution | Non-related party | No | Forward Financial Contract | 9,239.26 | 1 January, 2020 | 31 December, 2020 | 9,239.26 | 28,549.42 | 0.25% | 32,512.05 | |||
| Total | 9,852.73 | -- | -- | 9,852.73 | 33,031.71 | 0.29% | 42,204.75 | ||||||
| Capital Source of Investment in Derivatives | Own funds | ||||||||||||
| Lawsuits (if apply) | None | ||||||||||||
| Disclosure Date of Announcement on Approval of Investment in Derivatives by Board of Directors (if any) | 30 April, 2020 | ||||||||||||
| Disclosure Date of Announcement on Approval of Investment in Derivatives by Board of Shareholders (if any) | 2 June, 2020 | ||||||||||||
| Risk analysis of open interest of derivatives and control measures during the Report Period (including but not limited to market risk, liquidity risk, credit risk, operation risk and legal risk) | In order to evade any risk in the cost of purchase of raw materials by the Company which might arise from wide fluctuations of the price of bulk raw materials, the Company carried on the hedging business for part of the raw materials and duly locked the cost of raw materials according to the futures market situation to reduce any uncertainty risk from fluctuations of the market price of the spot goods; meanwhile, the Company carried out foreign exchange transactions by bank's financial instruments to evade any risk in the fluctuations of exchange rate and interest rate, reduce foreign exchange liabilities and conduct the cost locking, and realize the maintenance and increase of the value of foreign exchange assets. The Company laid down the Rules for Hedging Management of Futures and the Internal Control System of Forward Foreign Exchange Transactions to execute the full appraisal and control of the investment in derivatives and risks in open interest, and the detailed description is shown as below: Legal and regulatory risk; While the Company carried on hedging and foreign exchange transactions, it was required to follow the laws and regulations and specifically stipulate the rights and obligations with the agency. Control measures: The Company assigned the responsible department to strictly execute the contract review, clarify the rights and obligations, strengthen compliance check and ensure the Company's investment in derivatives and operation of open interest in accordance with any laws and regulations and internal control system of the Company. 2. Operation risk: it means any risk in operation arising out of imperfect internal process, operation of employees and system. Control measures: The Company established the corresponding management system, clarified the division of responsibilities and examination & approval procedures of the hedging and foreign exchange transactions, built more perfect supervision mechanism and effectively reduced any operation risk through business, decision and transaction processes. 3. Market risk: The price change of bulk goods and uncertainty of fluctuations of exchange rate of foreign exchange market bring a greater market risk to the futures business and foreign exchange transactions. Control measures: The principle of prudent and moderate operation is upheld in the futures hedging and foreign exchange transactions of the Company, in which any speculative transaction is not permitted. As to the hedging business, the Company strictly restricted the number of hedging not to exceed the number of actual spot transaction and the open interest of the futures not to exceed the number of hedged spot goods and implemented the mechanism to stop loss. In respect of the foreign exchange transactions, the Company effectively prevented the market risk by judging the trend of foreign exchange rate and utilizing a contract to lock the settlement of exchange rate. |
| The detailed usage and related hypothesis and parameter setting should be disclosed in terms of the market price of the invested derivatives or changes in fair value of the products during the Report Period and analysis on the fair value of the derivatives. | The loss under the futures hedging contract during the Report Period was RMB 96,927,000; the loss under the forward foreign exchange contract during the Report Period was RMB 570,683,800. |
| Descriptions about whether there were major changes in the accounting policies and detailed accounting principle of the Company's derivatives during the Report Period as compared to the last report period. | No change |
| Special opinions of independent directors regarding the investment in derivatives and risk control of the Company | In the opinion of the Company's independent directors, the Company improved its management level by strengthening internal control and carrying out the risk prevention measures as well as stabilizing price fluctuations through futures hedging. It also enhanced its foreign exchange risk control level through foreign exchange transactions. The above investment in derivatives helps to give play to competitive advantages of the Company, so it is feasible for the Company to carry on the investment in derivatives under controllable risk. |
5. Usage of raised funds
□ Applicable √ Not applicable
The Company was not involved in any usage of raised funds during the Report Period.
VI. Sales of major assets and equities
1. Sales of major assets
□ Applicable √ Not applicable
The Company was not involved in sales of major assets during the Report Period
2. Sale of major equities
□ Applicable √ Not applicable
VII. Analysis on major controlling shareholder and joint stock companies
√ Applicable □ Not applicable
Information regarding major subsidiaries and joint stock companies that contribute over 10% of net profits to the Company
Unit: Yuan
| Company Name | Company type | Main business | Registered capital | Total assets | Net assets | Operating incomes | Operating profit | Net profits |
| Zhuhai Gree Group Finance Company Limited | Subsidiary | Financial Services | 3,000,000,000.00 | 52,809,789,174.39 | 5,943,480,021.66 | 2,379,170,026.46 | 903,806,493.36 | 679,943,713.67 |
| Zhuhai Gree Electrical Co., Ltd. | Subsidiary | Varnished Wire Manufacturing | 1,669,315,586.15 | 8,680,684,344.10 | 2,865,029,893.56 | 39,015,319,286.82 | 111,088,800.89 | 121,413,705.03 |
| Gree (Hefei) Electric Appliances Co., Ltd. | Subsidiary | Air Conditioner Manufacturing | 150,000,000.00 | 8,009,667,080.98 | 4,317,192,791.74 | 12,789,248,250.31 | 571,033,631.71 | 528,951,821.99 |
| Zhuhai Landa Compressor Co., Ltd. | Subsidiary | Compressor Manufacturing | 93,030,000.00 | 12,143,593,715.54 | 6,663,222,026.66 | 12,960,088,029.14 | 522,578,607.82 | 447,213,264.72 |
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | Subsidiary | Capacitor Manufacturing | 126,180,000.00 | 2,107,710,337.09 | 1,076,177,134.88 | 1,696,966,770.48 | 253,422,663.36 | 221,684,147.79 |
| Zhuhai Kaibang Motor Manufacture Co., Ltd. | Subsidiary | Motor Manufacturing | 82,000,000.00 | 3,465,524,747.75 | 1,026,995,907.07 | 2,912,954,806.31 | 103,772,121.72 | 90,241,227.98 |
| GREE (Zhongshan) Home Appliances Co., Ltd. | Subsidiary | Small Home Appliances Manufacturing | 30,000,000.00 | 932,098,102.99 | 472,790,005.65 | 1,029,985,925.91 | 146,073,017.56 | 127,201,672.98 |
Information about acquisition and disposal of subsidiaries during the Report Period
√ Applicable □ Not applicable
Unit: Yuan
| Company Name | Methods of acquisition and disposal of subsidiaries during the Report Period | Impact on overall production and operation and financial results |
| Zhuhai Ge Health Medical Technology Co., Ltd. | Establishment | 24,211,752.29 |
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | Establishment | 170,464.38 |
| Chengdu Gree Xinhui Medical Equipment Co., Ltd. | Establishment | 1,199,920.67 |
| Gree (Ganzhou) Electric Appliances Co., Ltd. | Establishment | 49,226.28 |
| Suzhou Qingzhan Environmental Technology Co., Ltd. | Establishment | -363,870.56 |
| Gree Tianjin Xinhui Medical Equipment Co., Ltd. | Establishment | - |
| Songyuan Grain Group Co., Ltd. | Acquisition | - |
| Songyuan Chagan Lake Grain Co., Ltd. | Acquisition | - |
| Jilin Chagan Lake Rice Industrial Park Co., Ltd. | Acquisition | - |
| Jilin SL Tuga Grain Market Co., Ltd. | Acquisition | - |
| SL Group Rice Research Institute Co., Ltd. | Acquisition | - |
| SL (Ningbo) Grain Sales Co., Ltd. | Acquisition | - |
| Jilin SL Modern Agriculture Development Co., Ltd. | Acquisition | - |
| SL Shengyuan (Jilin) Agricultural Development Co., Ltd. | Acquisition | - |
| SL Group Jiangwan Rice Industry Co., Ltd. | Acquisition | - |
| SL Group Ermapao Ecological Farm Co., Ltd. | Acquisition | - |
| SL Group Lianhe Ecological Farm Co., Ltd. | Acquisition | - |
| SL Group Juyuan Agriculture Co., Ltd. | Acquisition | - |
| SL Group Lvzhiyuan Agriculture Co., Ltd. | Acquisition | - |
| SL Group Dongwei Rice Industry Co., Ltd. | Acquisition | - |
| SL Group Tongda Grain Storage Co., Ltd. | Acquisition | - |
| SL Group Jingu Grain Depot Co., Ltd. | Acquisition | - |
| SL Group Songlin Grain Depot Co., Ltd. | Acquisition | - |
| Jilin SL Huilong Technology Co., Ltd. | Acquisition | - |
| Jilin SL Modern Logistics Development Co., Ltd. | Acquisition | - |
| SL (Shenzhen) South China Agricultural Development Co., Ltd. | Acquisition | - |
| SL Jinyu Daqing Agricultural Technology Co., Ltd. | Acquisition | - |
| Zhenlai SL Shengyuan Agricultural Development Co., Ltd. | Acquisition | - |
| Jilin SL Xinyu Agricultural Development Co., Ltd. | Acquisition | - |
| Total | -- | 25,267,493.06 |
VIII. Information about businesses controlled by the Company
□ Applicable √ Not applicable
IX. Prospects of the Company's future development(I) Development strategy of the CompanyGree takes "To be Global Leading Air Conditioning Enterprise” as its corporate vision. Driven by technologicalinnovation and guaranteed by perfect quality, it comprehensively deepens reform, accelerates digitaltransformation, steadily develops emerging industries such as intelligent equipment, precision mould, new energyand semiconductors based on the household appliance industry, and builds a more competitive diversified andtechnological global industrial group.(II) Key work of the Company in 2021
1. Center on the market to build a new development pattern
Deeply exploit the domestic market and promote the overall layout of new retails. Continue the nationwide livestreaming tour to impel the deep integration of online and offline channels, expand the business scope of GreeDong Mingzhu's store, implement the whole-process real-time monitoring, optimize the logistics distributionsystem, upgrade the after-sales service of new retail mode, and expand and strengthen the new retail business.Develop the commercial market segment and expand the sales scale; actively and steadily promote the globalbusiness layout and Gree brand globalization, optimize the overseas management mode, and reinforce theindependent brand promotion overseas; promote the distribution of home appliances with complete types andwide coverage, launch popular products to seize the market, and continue to make great efforts in the field ofhealthy household appliances; energetically expand the electromechanical engineering business cooperation ofnational new infrastructure projects, new urbanization construction projects, and transportation and waterconservancy projects; in the equipment field, create competitive products focusing on emerging industries to makeindustrial breakthroughs; in the mould field, carry out the strategy of high quality products, and constantlydevelop external customers.
2. Adhere to independent innovation and constantly strength the core technologies
Establish a customer demand-oriented development process, and improve the core competitiveness of airconditioners, refrigerators, washing machines, home appliances, and other products closely centering on thequality life needs of consumers; construct a scientific and technological development route that attaches equalimportance to core technologies and cutting-edge technologies, implement a batch of forward-looking andstrategic key technology projects, optimize the science and technology planning system and operation mechanism,and reinforce the support to basic frontier research; accelerate the research, judgment and deployment of majorinnovation fields, break the bottleneck of key core technologies and equipment, including chips andhigh-precision processing equipment, and forge a more secure and controllable industrial chain.
3. Optimize industrial layout and promote digital transformation
Push forward the preparation for putting Luoyang, Nanjing, and Chengdu bases into operation in an orderlymanner, and speed up the preparation progress for Gaolan Port, Ganzhou and Caidian. Create a demonstrationproject with intelligent service, intelligent product, intelligent equipment, intelligent production, and intelligent
management by taking Gaolan Port intelligent manufacturing base as a model. Center on the construction of adigital intelligent factory to create a flexible production mode, and use the high-end intelligent logistics system torealize seamless connection between the information flow and real logistics. In terms of industrial equipment,continue to deeply exploit the high-end equipment, precision mould, industrial robot, and other fields, and providemore industrial enterprises with systematic transformation and upgrading service of intelligent manufacturingthrough the strategic layout and implementation of factory automation, digital production line transformation andupgrading; in the aspect of new energy, complete the whole area and full series coverage of photovoltaic VRFunits, and make contributions to energy conservation and emission reduction.
4. Comprehensively deepen the reform and improve the management mechanismFurther promote the Company's institutional reform, promote the marketization of diversified business sectors,and enhance the overall operating efficiency of the enterprise; implement the employee stock ownership plan,stimulate the enthusiasm and creativity of employees, retain and attract core talents, and promote long-termdevelopment of the Company.
5. Promote green development and highlight social responsibility
Grasp the opportunity of a new round of national policies for promoting the consumption of green energy-savinghousehold appliances and "trade-in" program to promote the "trade-in" activity of household appliances in servicelonger than originally intended, and continue to provide users with "combination blow" services from choosingnew machines, enjoying discounts, and dismantling old machines to free installation; meanwhile, speed up thedevelopment promotion of renewable resources industry, interconnect all links of the renewable resources industrychain, form closed-loop management of recycling, classification, deep processing, and reuse, build a completerenewable resources operation system, and boost the green and sustainable development of economy.
6. Improve construction of the safety system and take comprehensive preventive measuresStick to the principle of people foremost and safe development, strengthen supervision and inspection, reinforceconstruction of the enterprise safety system, adhere to the epidemic prevention and control route, and strictly carryout all the prevention and control measures. Strengthen the construction of information security and data security,and strengthen network security assurance; use modern information technologies to establish and improve theprice management, cost management, tax control, reimbursement management, and other information systems,and further enhance the level of financial information and the level of risk prevention and control; sort out andcomplete the relevant regulations of discipline inspection and supervision, give full play to the role of disciplineinspection and supervision office, and maintain the order of operation and management; move the audit linkforward, follow up the whole process before, during and after the event, and prevent risks from the source.
7. Strengthen construction of the talent system and enhance the soft power of corporatecultureAdhere to combination of the technical expertise and ideological and moral character, complete the training andevaluation mechanism of talents at all levels, and further improve the talent management system of "selection,cultivation, use, retention"; strengthen construction of the contingent of cadres, go deep to carry out qualityeducation for all staff, and reinforce construction of the talent echelon.
(III) Major risks in future development
1. Macroeconomic fluctuation risk
The products sold by the Company are mainly HVAC and home appliances, and its market demand is greatlyinfluenced by the economic situation and macroeconomic regulation. The world has not completely shaken off theimpact by COVID-19, which may lead to a slowdown in the growth of macro-economy or consumer demand, andthe growth of the Company in the household appliances market will also slow down. In addition, the slowdown inthe growth of the real estate market also indirectly affects the end-use demand of household appliances.
2. Risk of price fluctuation in production factors
The main raw materials used to produce products of the Company are copper, steel, aluminium, and plastics ofvarious grades, and their cost accounts for a large proportion. If the prices of raw materials continue to rise andsuppliers increase their prices significantly, it will have a certain impact on the Company's operating performance.As an industry leader, the Company showcases a powerful advantage in centralized procurement, and willalleviate the adverse impact of raw material fluctuations on the operation by hedging and stocking up in advance.
3. Market risks caused by trade protectionism
With the enhancement of China's political and economic strength, it will be inevitably to have friction with thebeneficiaries of the existing international order. "De-globalization" and the tide of trade protectionism are stillcontinuing in some countries, which bring new challenges to the expansion in the overseas market and the risk ofincreasing the operating costs.
4. Export market risks and exchange losses caused by exchange rate fluctuationThe Company's products are exported to more than 160 countries and regions. With continuous expansion of theCompany's overseas market, exchange rate fluctuations may not only bring adverse effects on the Company'sexport of products, but also cause the Company's exchange losses and increase the financial costs.
X. Reception of activities including researches, communication and interviews
1. Registration form for reception of activities including researches, communication and interviews
√ Applicable □ Not applicable
| Time of reception | Place of reception | Method of reception | Type of reception object | Reception object | Contents discussed and material provided | Basic situation index of research | |
| 14 May, 2020 | China Fund News-Jihuibao Online Roadshow Center (www.jhbshow.com) | Others | Others | Online institutional and individual investors, 1,233 persons in total | Operation of the Company | For details, see Gree: Record Table for Investor Relations Activities on 14 May, 2020 disclosed by the Company on www.cninfo.com.cn on 16 May, 2020. | |
| 3 to 30 September, 2020 | Shanghai and Gree HQ | Telephone Communication | Institution | Institution | Operation of the Company | For details, see Gree: Record Table for Investor Relations Activities on 3 to 30 September, 2020 disclosed by the Company on www.cninfo.com.cn on 30 September, 2020. | |
| Times of reception | 35 | ||||||
| Number of received institutions | 372 | ||||||
| Number of received individuals | 947 | ||||||
| Number of other received objects | 0 | ||||||
| Whether undisclosed material information is revealed, disclosed or divulged | No | ||||||
Section V Important Events
I. Information about common stock profit distribution and capitalization from capital reservefundsThe common stock profit distribution policy in the report period, especially preparation, execution or adjustment of the cash dividendpolicy
√ Applicable □ Not applicable
Profit distribution plan of 2019 (executed already in 2020): Calculated by the total stock capital of the Companyequivalent to 6,015,730,878 shares, all shareholders will be distributed a cash of RMB 12 (tax included) per 10shares, with the total amount of cashes to be distributed in such a way up to RMB 7,218,877,053.60 and thebalance to be carried forward to the future year.Profit distribution plan for half year of 2020 (executed already in 2020): Calculated by 5,921,546,216 shares(namely the total stock capital of the Company equivalent to 6,015,730,878 shares minus 94,184,662 shares of theCompany repurchased cumulatively as at the disclosure date of the announcement on the implementation of theequity distribution for half year of 2020), all shareholders will be distributed a cash of RMB 10 (tax included) per10 shares, with the total amount of cashes to be distributed in such a way up to RMB 5,921,546,216.00 and thebalance to be carried forward to the future year.
| Special description of the cash dividend policy | |
| In compliance with provisions of the Articles of Association or requirements of the resolution of the general meeting of shareholders: | Yes |
| The dividend standard and ratio are definite and clear: | Yes |
| The related decision procedures and mechanisms are complete: | Yes |
| Independent directors perform their duties responsibly and play their due roles: | Yes |
| Minority shareholders have the opportunity to fully express their opinions and demands and their legitimate rights and interests are fully protected: | Yes |
| The conditions and procedures are transparent and comply with regulations if the cash dividend policy is adjusted or changed: | Not applicable |
The common stock dividend distribution plan (preplan) and the capitalization plan (preplan) from capital reserve funds in recent threeyears (including the Report Period)
1) Profit distribution plan of 2020: Temporarily calculated by the total 5,832,851,217 shares entitled to profitdistribution rights on 28 April, 2021 (namely the total stock capital of the Company equivalent to 6,015,730,878shares minus 182,879,661 shares held by the Company's repurchase account), all shareholders will be distributed acash of RMB 30 (tax included) per 10 shares, with the total amount of cashes to be distributed in such a way up toRMB 17,498,553,651.00 and the balance to be carried forward to the future year.
2) Profit distribution plan for half year of 2020: Calculated by 5,921,546,216 shares (namely the total stock capitalof the Company equivalent to 6,015,730,878 shares minus 94,184,662 shares of the Company repurchasedcumulatively as at the disclosure date of the announcement on the implementation of the equity distribution forhalf year of 2020), all shareholders will be distributed a cash of RMB 10 (tax included) per 10 shares, with thetotal amount of cashes to be distributed in such a way up to RMB 5,921,546,216.00 and the balance to be carriedforward to the future year.
3) Profit distribution plan of 2019: Calculated by the total stock capital of the Company equivalent to6,015,730,878 shares, all shareholders will be distributed a cash of RMB 12 (tax included) per 10 shares, with thetotal amount of cashes to be distributed in such a way up to RMB 7,218,877,053.60 and the balance to be carriedforward to the future year.
4) Profit distribution plan of 2018: Calculated by the total stock capital of the Company equivalent to6,015,730,878 shares, all shareholders will be distributed a cash of RMB 15 (tax included) per 10 shares, with thetotal amount of cashes to be distributed in such a way up to RMB 9,023,596,317.00 and the balance to be carriedforward to the future year.
5) Profit distribution plan for half year of 2018: Calculated by the total stock capital of the Company equivalent to6,015,730,878 shares, all shareholders will be distributed a cash of RMB 6 (tax included) per 10 shares, with thetotal amount of cashes to be distributed in such a way up to RMB 3,609,438,526.80 and the balance to be carriedforward to the future year.
Table for common stock cash dividends of the Company in the recent three years (including the Report Period)
Unit: Yuan
| Year | Amount of cash dividend (tax included) | Net profit attributable to common shareholders of listed company in annual consolidated financial statements | Proportion of amount of cash dividend to net profit attributable to common shareholders of listed company in consolidated financial statements | Amount of cash dividends based on other ways (e.g., share repurchase) | Ratio of amount of cash dividend to net profit attributable to common shareholders of listed company in consolidated financial statements based on other ways | Total cash dividend (including other ways) | Proportion of total cash dividend (including other ways) to net profit attributable to common shareholders of listed company in consolidated financial statements |
| 2020 | 23,420,099,867.00 | 22,175,108,137.32 | 105.61% | 5,181,586,503.65 | 23.37% | 28,601,686,370.65 | 128.98% |
| 2019 | 7,218,877,053.60 | 24,696,641,368.84 | 29.23% | 0.00 | 0.00% | 7,218,877,053.60 | 29.23% |
| 2018 | 12,633,034,843.80 | 26,202,787,681.42 | 48.21% | 0.00 | 0.00% | 12,633,034,843.80 | 48.21% |
The profits of the Company in the Report Period and the parent company's profits distributable to common shareholders are positive,but the common stock cash dividend distribution plan has not been put forward.
□ Applicable √ Not applicable
II. Preplan for profit distribution and capitalization from public reserve funds in the ReportPeriod
√ Applicable □ Not applicable
| Number of bonus shares (stock) given per 10 stocks | 0 |
| Dividend allocated per 10 stocks (RMB) (tax included) | 30 |
| Increase by transfer per 10 stocks (stock) | 0 |
| Equity base of distribution proposal (stock) | 5,832,851,217 |
| Cash dividend (RMB) (tax included) | 17,498,553,651.00 |
| Cash dividend in other ways (such as repurchasing shares) (RMB) | 5,181,586,503.65 |
| Total cash dividend (including other methods) (RMB) | 22,680,140,154.65 |
| Distributable profit (RMB) | 68,536,203,624.18 |
| Proportion of total cash dividends (including other methods) in total profit distribution | 100% |
| Cash dividends of this distribution | |
| If the company's development stage is mature and there are no major capital expenditure arrangements, when the profit is distributed, the minimum proportion of cash dividends in this profit distribution should reach 80% | |
| Detailed description of the preplan for profit distribution or capitalization from public reserve funds | |
| Temporarily calculated by the total 5,832,851,217 shares entitled to profit distribution rights on 28 April, 2021 (namely the total stock capital of the Company equivalent to 6,015,730,878 shares minus 182,879,661 shares held by the Company's repurchase account), all shareholders will be distributed a cash of RMB 30 (tax included) per 10 shares, no bonus share will be given and public reserve funds will not be used for capitalization. In accordance with the Implementation Rules for the Repurchase of Shares by Listed Companies on the Shenzhen Stock Exchange, the shares in the special repurchase account are not entitled to profit distribution. If the total number of shares of the Company entitled to profit distribution changes during the period from the disclosure date of this announcement to the date of equity registration for the implementation of equity distribution due to equity incentive exercise, convertible bonds to shares, share repurchase, etc., the Company will follow the principle of unchanged share distribution ratio to adjust the total amount of dividends accordingly. | |
III. Fulfillment of commitments
1. Commitments of the Company's actual controllers, shareholders and acquirers, the Company and otherrelated parties of commitments that have been fulfilled completely in the Report Period or have not beenfulfilled completely as of the end of the Report Period
√ Applicable □ Not applicable
| Cause of commitment | Party of commitment | Type of commitment | Content of commitment | Time of commitment | Period of commitment | Fulfillment status |
| Share-splitting commitment | ||||||
| Commitments made in the acquisition report or equity change report | Zhuhai Mingjun | Share lock-up | 1. The transferee commits that shares acquired from Gree Electric Appliances due to this transfer will be fully locked up when the transfer registration is completed in this transaction, and will not be transferred for 36 months from the date of completion of the share transfer registration; if there are relevant laws and regulations that require the lock-up period of the transferred shares exceeds the above-mentioned lock-up period committed by the transferee, the transferee agrees to extend the lock-up period of the shares accordingly to meet the prescribed period. 2. After the completion of this share transfer, for shares acquired by the transferee from Gree Electric Appliances, Inc. due to this transfer, their dividend shares generated due to bonus share and capitalization from public reserve funds by the listed company will also abide by the above share lock-up commitment. | 2 December, 2019 | 36 months from the date of completion of the share transfer registration | Being under normal fulfillment |
| Zhuhai Mingjun | Other commitments | 1. The transferee commits that after the completion of the transfer, the overall stability of Gree Electric Appliances' Operation and Management Team will be maintained within the scope of authority, and no major changes will be made to Gree Electric Appliances' management structure. 2. The transferee commits that during the period of direct or indirect holding of shares of Gree Electric Appliances, it will not take the initiative to put forward any suggestions and proposals regarding the relocation of Gree Electric Appliances' headquarters and registered address from Zhuhai City, and it will actively urge all parties to ensure that Gree Electric Appliances' headquarters and registered address are not relocated from Zhuhai City; if any shareholder puts forward any suggestions and proposals regarding the relocation of Gree Electric Appliances' headquarters and registered address from Zhuhai City, the transferee commits to participate in the general meeting of shareholders and vote against such | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| proposals. 3. The transferee commits to do its utmost to make effective industrial investment and strategic resource introduction for Zhuhai's economic development, and urge Gree Electric Appliances to make new contributions to the sustainable and healthy development of Zhuhai's economy. 4. Zhuhai Mingjun commits to actively exercise the voting rights of shareholders in the general meeting of shareholders of the listed company involving dividends and to prompt the directors nominated by it to vote in favor of the board of directors' resolution of the listed company regarding an annual net profit dividend ratio of not less than 50%. | |||||
| Zhuhai Mingjun, Zhuhai Xianying, Zhuhai Yuxiu | Maintaining the independence of the listed company | Letter of Commitment on Maintaining the Independence of the Listed Company: In order to guarantee the independent operation of the listed company after this equity transfer, Zhuhai Mingjun, Zhuhai Xianying and Zhuhai Yuxiu make the following commitments. (I) To ensure asset independence and completeness of the listed company: 1. To ensure that Gree Electric Appliances will be equipped with the relevant production system, auxiliary production system as well as supporting facilities corresponding to its business operations, have the right to own or use the land, workshop and machines and facilities relating to its business operations as well as the ownership or use right to its trademarks, patent technologies and know-how, and have an independent purchase system of raw materials and sales system of products. 2. To ensure that Gree Electric Appliances will have independent and complete assets, and all of their assets will be under the control of Gree Electric Appliances and independently owned and operated by Gree Electric Appliances. 3. To ensure that Zhuhai Mingjun and other enterprises controlled by Zhuhai Mingjun will not illegally occupy Gree Electric Appliances' assets in any way; or provide guarantee for the debts of Zhuhai Mingjun and other enterprises under its control with Gree Electric Appliances' assets. (II) To ensure personnel independence of the listed company: 1. To ensure that Gree Electric Appliances' labor, personnel and compensation management will be completely independent from related companies. 2. To ensure that the recommendation of directors, supervisors and senior management personnel by the enterprise to Gree Electric Appliances will be conducted in accordance with legal procedures, and will not be beyond the | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | |||||
| Zhuhai Mingjun, Zhuhai Xianying, Zhuhai Yuxiu | Avoiding horizontal competition | Letter of Commitment on Avoiding Horizontal Competition: In order to avoid horizontal competition with the listed company, Zhuhai Mingjun, Zhuhai Xianying and Zhuhai Yuxiu make the following commitments: 1. the enterprise and other enterprises controlled by the enterprise (me), the controlling shareholders and actual controllers of the enterprise will not engage in the same or similar business with Gree Electric Appliances and its subsidiaries in a direct or indirect manner in the future, so as to avoid possible direct or indirect business competition with Gree Electric Appliances and its subsidiaries. 2. If other enterprises controlled by the enterprise further expand their business scopes, other enterprises controlled by the enterprise will take the principle of giving priority to the protection of the rights and interests of Gree Electric Appliances and take all possible measures to avoid horizontal competition with Gree Electric Appliances and its subsidiaries. 3. If Gree Electric Appliances and its subsidiaries or related regulatory authorities determine that the enterprise and other enterprises controlled by the enterprise are engaging in or will engage in any business which constitutes horizontal competition with Gree Electric Appliances and its subsidiaries, the enterprise will give up or cause the enterprises which its subsidiaries directly or indirectly hold to give up any business or business opportunities that may result in horizontal competition, or cause such business or business opportunities to be provided with a priority to Gree Electric Appliances or its wholly-owned and holding subsidiaries on a fair and reasonable basis or to be transferred to other unrelated third parties. 4. If any one of the above commitments is violated, the enterprise will be willing to bear all the responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| Zhuhai Mingjun, Zhuhai Xianying, Zhuhai Yuxiu | Regulating related transactions | Letter of Commitment on Regulating Related Transactions: In order to protect the interests of public shareholders and maintain the sustained and healthy development of the listed company, Zhuhai Mingjun, Zhuhai Xianying, and Zhuhai Yuxiu make the following commitments: 1. To ensure that the future related transactions between the enterprise and other enterprises controlled by the enterprise and Gree Electric Appliances | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| will be fair and conducted in accordance with the normal business conduct standards; and that the enterprise will continue to regulate related transactions with Gree Electric Appliances and its subsidiaries. 2. To ensure that the enterprise will perform its obligations as a shareholder of Gree Electric Appliances in good faith and in good faith, and for related transactions that cannot be avoided or exist on reasonable grounds, it will sign a standard related transaction agreement with Gree Electric Appliances in accordance with the law, and in accordance with relevant laws, regulations, rules, other regulatory documents and the articles of association, and fulfill the approval procedures; the price of related transactions will be determined in accordance with fair and reasonable market prices, and the price of related transactions will be fair; it will perform the information disclosure obligations of related transactions in accordance with relevant laws, regulations and the articles of association; it will not use related transactions to illegally transfer the funds and profits of Gree Electric Appliances or damage the interests of Gree Electric Appliances and related shareholders. 3. To ensure that the enterprise and other enterprises controlled by the enterprise will, in accordance with the provisions of laws, regulations and the articles of association, when considering related transactions involving the enterprise and other enterprises controlled by the enterprise, effectively abide by the avoidance procedure during the voting on related transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | |||||
| Dong Mingzhu | Maintaining the independence of the listed company | Letter of Commitment on Maintaining the Independence of the Listed Company: In order to guarantee the independent operation of the listed company after this equity transfer, I make the following commitments. (I) To ensure asset independence and completeness of the listed company: 1. To ensure that Gree Electric Appliances will be equipped with the relevant production system, auxiliary production system as well as supporting facilities corresponding to its business operations, have the right to own or use the land, workshop and machines and facilities relating to its business operations as well as the ownership or use right to its trademarks, patent technologies and know-how, and have an independent purchase system of raw materials and sales system of products. 2. To ensure that Gree Electric Appliances will have | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| senior management personnel of the listed company, I will not interfere in its business activities of Gree Electric Appliances. 3. To ensure that I and other enterprises controlled by me will avoid substantial industry competition with Gree Electric Appliances. 4. To ensure that, when I and other enterprises controlled by me conduct necessary and unavoidable related transactions with Gree Electric Appliances, the enterprise will conduct fair operation in accordance with the marketization principle and at fair prices, and perform transaction procedures and information disclosure obligations in accordance with relevant laws and regulations and regulatory documents. If any one of the above commitments is violated, I will be willing to bear all the responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | |||||
| Dong Mingzhu | Avoiding horizontal competition | Letter of Commitment on Avoiding Horizontal Competition: In order to avoid horizontal competition with the listed company, I make the following commitments: 1. I and other enterprises controlled by me will not engage in the same or similar business with Gree Electric Appliances and its subsidiaries in a direct or indirect manner in the future, so as to avoid possible direct or indirect business competition with Gree Electric Appliances and its subsidiaries. 2. If other enterprises controlled by I further expand their business scopes, other enterprises controlled by I will take the principle of giving priority to the protection of the rights and interests of Gree Electric Appliances and take all possible measures to avoid horizontal competition with Gree Electric Appliances and its subsidiaries. 3. If Gree Electric Appliances and its subsidiaries or related regulatory authorities determine that I and other enterprises controlled by me are engaging in or will engage in any business which constitutes horizontal competition with Gree Electric Appliances and its subsidiaries, I will give up or cause the enterprises which its subsidiaries directly or indirectly hold to give up any business or business opportunities that may result in horizontal competition, or cause such business or business opportunities to be provided with a priority to Gree Electric Appliances or its wholly-owned and holding subsidiaries on a fair and reasonable basis or to be transferred to other unrelated third parties. 4. If any one of the above commitments is violated, I will be willing to | 2 December, 2019 | Effective for a long time | Being under normal fulfillment |
| bear all the responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | ||||||
| Dong Mingzhu | Regulating related transactions | Letter of Commitment on Regulating Related Transactions: I make the following commitments: 1. To ensure that the future related transactions between I and other enterprises controlled by me and Gree Electric Appliances will be fair and conducted in accordance with the normal business conduct standards; and that I will continue to regulate related transactions with Gree Electric Appliances and its subsidiaries. 2. To ensure that I will perform its obligations as a shareholder of Gree Electric Appliances in good faith and in good faith, and for related transactions that cannot be avoided or exist on reasonable grounds, it will sign a standard related transaction agreement with Gree Electric Appliances in accordance with the law, and in accordance with relevant laws, regulations, rules, other regulatory documents and the articles of association, and fulfill the approval procedures; the price of related transactions will be determined in accordance with fair and reasonable market prices, and the price of related transactions will be fair; it will perform the information disclosure obligations of related transactions in accordance with relevant laws, regulations and the articles of association; it will not use related transactions to illegally transfer the funds and profits of Gree Electric Appliances or damage the interests of Gree Electric Appliances and related shareholders. 3. To ensure that I and other enterprises controlled by I will, in accordance with the provisions of laws, regulations and the articles of association, when considering related transactions involving I and other enterprises controlled by I, effectively abide by the avoidance procedure during the voting on related transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | 2 December, 2019 | Effective for a long time | Being under normal fulfillment | |
| Commitments made during asset reorganization | ||||||
| Commitments made during initial public offering or refinancing | GREE GROUP | Avoiding horizontal competition | Commitment issued during public issuance of additional shares in 2007: 1. In the future, the Company and the enterprises controlled by the Company will not directly or indirectly engage in the household air conditioner, central air conditioner, household appliances and other | 29 June, 2007 | 3 February, 2020 | Fulfilled completely |
| businesses that constitute horizontal competition with Gree Electric Appliances, Inc. of Zhuhai, nor will they invest in the enterprises or projects related to the above businesses or having direct or indirect competition with Gree Electric Appliances, Inc. of Zhuhai. 2. If it is found that the Company and the enterprises controlled by the Company are engaged in or intend to engage in the household air conditioner, central air conditioner, household appliances and other businesses that constitute horizontal competition with Gree Electric Appliances, Inc. of Zhuhai, or have invested or plan to invest in the enterprises or projects related to the above businesses or having direct or indirect competition with Gree Electric Appliances, Inc. of Zhuhai, Gree Electric Appliances, Inc. of Zhuhai has the right to request the Company to stop engaging in the above competitive business, stop implementing the above competitive projects and stop investing in the above-mentioned related enterprises; if the Company has completed the investment, Gree Electric Appliances, Inc. of Zhuhai has the right to request the Company to transfer the relevant equity of the project or the enterprise dealing with the business; if the Company breaches this commitment and engages in related competitive businesses, resulting in damage to the interests of Gree Electric Appliances, Inc. of Zhuhai, the Company is willing to assume the corresponding liability for compensation. | ||||||
| GREE GROUP | Reducing and standardizing the related transactions with Gree | Commitment issued during public issuance of additional shares in 2007: promised to ensure that Gree's business has the independent and complete production, supply, marketing and other auxiliary supporting systems so as to reduce unnecessary related transactions. When related transactions occur, the relevant matters of related transactions will be handled in accordance with the principle of good faith, fairness, impartiality, due diligence and public disclosure, the transaction price will be determined in accordance with the principle of market fairness, and the relevant procedures of avoiding voting by associated shareholders and associated directors and the relevant procedures for independent directors to express their opinions on related transactions independently will be strictly implemented to ensure legitimacy and fairness of the related transaction procedures and fairness and reasonableness of the related transaction results. | 29 June, 2007 | 3 February, 2020 | Fulfilled completely | |
| Equity incentive commitments | GREE GROUP | Other commitments | During the period of holding shares of Gree Electric Appliances, the Company will fully assume all reasonable expenses and economic | 14 June, 2019 | The period when I am a shareholder of | Being under normal fulfillment |
| losses (if any) incurred by Gree Electric due to the Company's termination of the remaining equity incentive plan. | Gree Electric Appliances | |||||
| Other commitments made to minority shareholders of the Company | ||||||
| Commitments are fulfilled in time | Yes | |||||
| If commitments are not fulfilled in time, detail the specific reason of fulfillment failure and the work plan for the next step | Not applicable | |||||
2. The Company's assets or projects involve earnings forecast and the Report Period is still in the earningsforecast period and the Company explains the assets or projects that achieve the original earnings forecastand the relevant reasons
□ Applicable √ Not applicable
IV. The listed company's non-operating funds occupied by the controlling shareholders andtheir related parties
□ Applicable √ Not applicable
No controlling shareholder or its related party occupied non-operating funds of the listed company in the Report Period of theCompany.V. Description about the "Non-standard Audit Report" of the accounting firm in the ReportPeriod by the Board of Directors, Board of Supervisors and independent director (if any)
□ Applicable √ Not applicable
VI. Description about changes in the accounting policies, accounting estimates and accountingmethods in comparison to the financial report of last year
√ Applicable □ Not applicable
1. Changes of major accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 14 - Revenues (Financeand Accounting [2017] No. 22) (hereinafter referred to as "new revenue standards") on 5 July, 2017, requiringcompanies listed at home and abroad at the same time and companies listed overseas and adopting IFRS orAccounting Standards for Business Accounting to prepare financial statements to implement the new revenuestandards from 1 January, 2018; and requiring other domestic listed companies to implement the new revenue
standards from 1 January, 2020. Under the new revenue standards, the Company makes corresponding changes toits accounting policies and implements the new revenue standards from 1 January, 2020.Under the new revenue standards, the Company only adjusts the retained earnings at the beginning of 2020 andthe amount of other related items in the financial statements for the cumulative impact on the contract which hasnot been fulfilled on the first implementation date.Before and after the implementation of the new revenue standards, the main difference in revenue recognitionaccounting policies is that the timing of revenue recognition changes from the transfer of risks and rewards to thetransfer of control. Before and after the implementation of the new revenue standards, the Company's businessmodel and contract terms remain unchanged, and there is no difference in the specific timing of revenuerecognition. The implementation of the new revenue standards has no significant impact on the operating income,net profit attributable to the Company's common shareholders, total assets, and net assets attributable to thecompany’s common shareholders in each year (end) before the first implementation date.
2. Changes of major accounting estimates
None.
3. Adjustments to relevant items in financial statements at the beginning of the period of the firstimplementation year due to the first implementation of new revenue standards from 2020
Unit: Yuan
| Report item | Amount as at 31 December, 2019 (before change) | Amount as at 1 January, 2020 (after change) | ||
| Consolidated statements | Parent company's statements | Consolidated statements | Parent company's statements | |
| Current assets: | ||||
| Accounts receivable | 8,513,334,545.08 | 3,873,270,521.33 | 8,439,719,697.00 | 3,873,270,521.33 |
| Contract assets | 73,614,848.08 | |||
| Total current assets | 213,364,040,964.83 | 191,741,346,310.18 | 213,364,040,964.83 | 191,741,346,310.18 |
| Current liabilities: | ||||
| Advances from customers | 8,225,707,662.42 | 11,832,592,136.06 | - | |
| Contractual liabilities | 7,311,804,415.54 | 10,965,696,063.40 | ||
| Other current liabilities | 65,181,491,855.14 | 64,375,139,451.87 | 66,095,395,102.02 | 65,242,035,524.53 |
| Total current liabilities | 169,568,300,209.60 | 163,622,323,232.13 | 169,568,300,209.60 | 163,622,323,232.13 |
Description about adjustments: For the financial statements at the beginning of the period, the Company's implementation of the newrevenue standards only affects the reclassification of assets and liabilities, but has no impact on the total assets, total liabilities andtotal net assets.
4. Adjustments to relevant items in financial statements at the end of the period of the first implementationyear due to the first implementation of new revenue standards from 2020
Unit: Yuan
| Report item | Amount under the new revenue standards as at 31 December, 2020 | Amount under the old revenue standards as at 31 December, 2020 | ||
| Consolidated statements | Parent company's statements | Consolidated statements | Parent company's statements | |
| Current assets: | ||||
| Accounts receivable | 8,738,230,905.44 | 3,548,791,695.27 | 8,816,776,431.04 | 3,548,791,695.27 |
| Contract assets | 78,545,525.60 | |||
| Total current assets | 213,632,987,164.66 | 190,395,751,656.57 | 213,632,987,164.66 | 190,395,751,656.57 |
| Current liabilities: | ||||
| Advances from customers | 13,147,449,930.78 | 16,044,928,449.57 | ||
| Contractual liabilities | 11,678,180,424.65 | 14,594,653,911.45 | ||
| Other current liabilities | 64,382,254,283.54 | 59,737,975,078.14 | 62,912,984,777.41 | 58,287,700,540.02 |
| Total current liabilities | 158,478,718,130.74 | 157,595,121,705.31 | 158,478,718,130.74 | 157,595,121,705.31 |
Description about adjustments: For the financial statements at the end of the period, the Company's implementation of the newrevenue standards only affects the reclassification of assets and liabilities, but has no impact on the total assets, total liabilities andtotal net assets.
VII. Description about the retrospective restatement required for correction of significantaccounting errors that occurred in the Report Period
□ Applicable √ Not applicable
The Company didn't involve any correction of significant accounting errors in the Report Period that requires retrospectiverestatement.VIII. Description about changes in the consolidated statement scope in comparison with thefinancial report of last year
√ Applicable □ Not applicable
1. Business combination involving enterprises not under common control
(1) Business combination involving enterprises not under common control in the current period
Unit: Yuan
| Name of acquired party | Time point of equity acquisition | Cost of equity acquisition | Proportion of equity acquisition | Equity acquisition mode | Date of purchase | Determination basis of date of purchase |
| Songyuan Grain Group Co., Ltd. | 31 December, 2020 | 246,272,496.65 | 75.00% | Purchase by means of cash | 31 December, 2020 | Acquisition of control power |
(2) Combination cost and business reputation
Unit: Yuan
| Combination cost | Amount |
| Fair value of the equity held before the date of purchase on the date of purchase | 246,272,496.65 |
| Total combination cost | 246,272,496.65 |
| Less: Fair value share of the identifiable net assets acquired | 246,272,496.65 |
| Business reputation/combination cost smaller than the amount of fair value share of the identifiable net assets acquired |
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, theCompany increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and itsshareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Groupwas re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the totalBoard members, thus the Company has control over Songyuan Grain Group.As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to theowners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable netassets were appraised by Beijing Yachao Assets Appraisal Co., Ltd. which issued [Beijing Yachao AppraisalReport (2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originallyheld by the Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paidon the date of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
Unit: Yuan
| Item | Songyuan Grain Group Co., Ltd. | |
| Fair value on the date of purchase | Carrying amount on date of purchase | |
| Assets: | ||
| Monetary capital | 70,436,872.44 | 70,436,872.44 |
| Accounts receivable | 58,501,141.40 | 58,501,141.40 |
| Receivables financing | 1,632,600.00 | 1,632,600.00 |
| Prepayment | 41,963,876.05 | 41,963,876.05 |
| Other receivables | 24,912,813.07 | 24,912,813.07 |
| Inventories | 397,055,281.83 | 397,055,281.83 |
| Other current assets | 47,958,691.72 | 47,958,691.72 |
| Other equity instrument investments | 7,000,000.00 | 7,000,000.00 |
| Fixed assets | 103,601,989.38 | 87,182,573.65 |
| Construction in Progress | 27,971,600.68 | 27,971,600.68 |
| Intangible assets | 41,875,107.81 | 29,763,765.14 |
| Long-term deferred expenses | 6,613,861.32 | 6,613,861.32 |
| Deferred income tax assets | 1,735,376.11 | 1,735,376.11 |
| Other non-current assets | 45,165,068.36 | 45,165,068.36 |
| Subtotal of assets | 876,424,280.17 | 847,893,521.77 |
| Liabilities: | ||
| Short-term borrowing | 421,685,022.79 | 421,685,022.79 |
| Accounts payable | 25,076,251.02 | 25,076,251.02 |
| Contractual liabilities | 22,238,960.98 | 22,238,960.98 |
| Payroll payable | 3,036,030.14 | 3,036,030.14 |
| Taxes payable | 592,097.19 | 592,097.19 |
| Other payables | 11,819,022.22 | 11,819,022.22 |
| Other current liabilities | 3,347,033.54 | 3,347,033.54 |
| Deferred income | 20,938,130.35 | 20,938,130.35 |
| Deferred income tax liabilities | 7,132,689.60 | |
| Subtitle of liabilities | 515,865,237.83 | 508,732,548.23 |
| Net assets | 360,559,042.34 | 339,160,973.54 |
| Less: minority equity | 114,286,545.69 | 108,937,028.49 |
| Net assets obtained | 246,272,496.65 | 230,223,945.05 |
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
Unit: Yuan
| Name of acquired party | Carrying amount of the equity originally held before the date of purchase on the date of purchase | Fair value of the equity originally held before the date of purchase on the date of purchase | Gains or losses from remeasurement of the equity originally held before the date of purchase at the fair value |
| Songyuan Grain Group Co., Ltd. | 230,223,945.05 | 246,272,496.65 | 16,048,551.60 |
(5) Method and main assumptions for determining the fair value on the date of purchase
1.Appraisal and recognition methods: The asset based approach and the income approach were used to appraisethe assets and liabilities this time.
2.Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of theevaluated unit can be timely adjusted and innovated along with the development of the market and science andtechnology.
B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showingthat the production capacity will change in the future, it is assumed that the evaluated unit will not carry out majorfixed-asset investment activities that affect its operations in the future income period, and the production capacityof the enterprise is estimated according to the condition on the evaluation benchmark date.C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accountsreceivable and accounts payable similar to the historical years, with no payment in arrears that is significantlydifferent from the historical years.D. There are no property right disputes or other economic disputes related to the assets and liabilities declared bythe appraised unit.E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significantadverse effects on the enterprise.
3. Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housingprices in the areas where they are located led to valuation appreciation.B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land marketprices led to valuation appreciation.
2. Business combination involving enterprises under common control
None.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Unit: Yuan
| Name | Time of establishment | Net assets of the end of the period | Net profit from the combination date to the end of the period |
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | 16 January, 2020 | 1,000,170,464.38 | 170,464.38 |
| Zhuhai Ge Health Medical Technology Co., Ltd. | 18 February, 2020 | 44,211,752.29 | 24,211,752.29 |
| Gree Chengdu Xin Hui Medical Equipment Co., Ltd. | 8 April, 2020 | 86,869,920.67 | 1,199,920.67 |
| Suzhou Qingzhan Environmental Technology Co., Ltd. | 13 May, 2020 | 13,636,129.44 | -363,870.56 |
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 25 September, 2020 | 80,049,226.28 | 49,226.28 |
| Gree Tianjin Xin Hui Medical Equipment Co., Ltd. | 26 October, 2020 | Not yet invested |
IX. Engagement and disengagement of accounting firmsCurrently engaged accounting firms
| Name of domestic accounting firm | Union Power Certified Public Accountants (Special General Partnership) |
| Remuneration for the domestic accounting firm (RMB 10,000) | 396 |
| Consecutive years for the domestic accounting firm to render audit service | 6 |
| Names of certified public accountants of the domestic accounting firm | Han Zhenping, Geng Ting |
| Consecutive years for the domestic accounting firm to render CPA audit service | 1 |
A new accounting firm was engaged in the current period
□ Yes √ No
Engagement of an accounting firm for internal control auditing, financial adviser or sponsor
√ Applicable □ Not applicable
During the year, the Company hired Union Power CPAs Co., Ltd. (special general partnership) as its internal control accounting firm;the Company hired Huatai United Securities Co., Ltd. as a sponsor for resolving the follow-up matters of the share split reform.
X. Delisting after disclosure of the annual report
□ Applicable √ Not applicable
XI. Matters related to bankruptcy reorganization
□ Applicable √ Not applicable
The Company was not involved in any matter related to bankruptcy reorganization in the Report Period.XII. Major legal action or arbitration
□ Applicable √ Not applicable
The Company was not involved in any major legal action or arbitration during the Report Period.
XIII. Punishment and rectification
□ Applicable √ Not applicable
The Company was not involved in any punishment or rectification during the Report Period.
XIV. Integrity status of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company's equity incentive plan, employee stock ownership planor other employee motivation measures
□ Applicable √ Not applicable
The Company was not involved in any equity incentive plan, employee stock ownership plan or other employee motivation measuresor their implementation during the Report Period.
XVI. Significant related transactions
1. Related transactions associated with day-to-day operation
√ Applicable □ Not applicable
| Related parties | Incidence relation | Type of related transactions | Contents of related transactions | Related transaction pricing principle | Prices of related transactions | Amount of related transactions (ten thousand Yuan) | Proportion to amount of similar transaction | Approved transaction amount (ten thousand Yuan) | Exceeding the approved quota | Settlement of related transactions | Available market price of similar transactions | Date of disclosure | Disclosure index |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors and general managers | Sales of commodities | Sales of products | Market price | Market price | 450,943.43 | 3.46% | 550,000 | No | Payment before delivery | Market price | 30 April, 2020 | www.cninfo.com.cn |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors | Sales of commodities | Sales of products | Market price | Market price | 428,595.56 | 3.29% | 880,000 | No | Payment before delivery | Market price | 30 April, 2020 | www.cninfo.com.cn |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Companies where supervisors of the Company act as managers | Sales of commodities | Sales of products | Market price | Market price | 309,970.99 | 2.38% | 520,000 | No | Payment before delivery | Market price | 30 April, 2020 | www.cninfo.com.cn |
| Zhuhai Yinlong New Energy Co., | Companies and their subsidiaries | Sales of commodities | Sales of smart equipment, | Market price | Market price | 12,380.09 | 0.09% | 100,000 | No | Settlement by schedule | Market price | 30 April, 2020 | www.cninfo.com.cn |
| Ltd. and its subsidiaries and holding subsidiaries | and holding subsidiaries where the chairman of the Company serves as a director | bus air conditioners, molds, motors, etc. | |||||||||||
| Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries | Companies and their subsidiaries and holding subsidiaries where the chairman of the Company serves as a director | Materials procurement | Procurement of batteries, energy storage product components, etc. | Market price | Market price | 42,390.45 | 0.37% | 150,000 | No | Settlement by schedule | Market price | 30 April, 2020 | www.cninfo.com.cn |
| Total | -- | -- | 1,244,280.52 | -- | 2,200,000 | -- | -- | -- | -- | -- | |||
| Details of huge-amount sales return | Not applicable | ||||||||||||
| Actual fulfillment (if any) in the Report Period when the total amount is estimated by category for the daily related transaction to take place in the current period | Not applicable | ||||||||||||
| Cause (if applicable) of the large difference between the transaction price and market reference price | Not applicable | ||||||||||||
2. Related transactions of acquisition or sales of assets or equity
□ Applicable √ Not applicable
The Company was not involved in any related transaction of acquisition or sales of assets or equity in the Report Period.
3. Related transactions of common foreign investment
□ Applicable √ Not applicable
The Company was not involved in any related transaction of common foreign investment during the Report Period.
4. Associated credits and liabilities
□ Applicable √ Not applicable
The Company was not involved in any associated credit or liability in the Report Period.
5. Other significant related transactions
√ Applicable □ Not applicable
On 12 June, 2020, the Company held the thirteenth meeting of the eleventh session of board of directors. At themeeting, the Proposal on Capital Increase to Subsidiaries and Related Transactions was reviewed and approved.The Company intended to increase capital to its controlling subsidiary Zhuhai Gree Group Finance Co., Ltd. withits self-owned funds, totaling RMB 2,640,000,000, of which RMB 1,500,000,000 is included in the registeredcapital of Zhuhai Gree Group Finance Co., Ltd. and the remaining RMB 1,140,000,000 is included in the capitalreserve of Zhuhai Gree Group Finance Co., Ltd.Related inquiries from disclosure website of interim reports on major related transactions
| Name of temporary announcement | Disclosure date of temporary announcement | Disclosure website name of temporary announcement |
| Proposal on Capital Increase to Subsidiaries and Related Transactions | 13 June, 2020 | www.cninfo.com.cn |
XVII. Major contracts and their fulfillment
1. Information about trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
The Company was not involved in any trusteeship during the Report Period.
(2) Contracting
□ Applicable √ Not applicable
The Company was not involved in any contracting matter during the Report Period.
(3) Lease
□ Applicable √ Not applicable
The Company was not involved in any lease during the Report Period.
2. Major guarantee
□ Applicable √ Not applicable
The Company was not involved in any major guarantee during the Report Period.
3. Entrusting others to execute any cash asset management
(1) Entrusted financing
√ Applicable □ Not applicable
Overview of entrusted wealth management during the report period
Unit: RMB 10,000
| Specific type | Source of funds for entrusted wealth management | Occurrence amount of entrusted wealth management | Outstanding balance | Amount overdue but not recovered yet |
| Broker wealth management products | Private | 42,596.42 | ||
| Total | 42,596.42 | |||
Specific situation of high-risk entrusted wealth management with large single amount or low security, poor liquidity andnon-guaranteed principal
□ Applicable √ Not applicable
Entrusted wealth management has the circumstance that it is expected to be unable to recover the principal or other circumstancesthat may cause impairment
□ Applicable √ Not applicable
(2) Entrusted loan
□ Applicable √ Not applicable
The Company was not involved in any entrusted loan during the Report Period.
4. Major contracts for daily operations
□ Applicable √ Not applicable
5. Other major contracts
□ Applicable √ Not applicable
The Company did not have any other major contract during the Report Period.
XVIII. Social responsibilities
1. Fulfilling social responsibilities
Gree actively and voluntarily performed its social responsibilities, effectively protected the lawful rights andinterests of all stakeholders, won with its strength the recognition of the enterprise, brand and products fromcapital market and consumer market and promoted the low-carbon green growth in the industry through variousactivities. (For details, please refer to the Company's Social Responsibility Report for the Year 2020 published onwww.cninfo.com.cn on 29 April, 2021.)
2. Fulfilling the social responsibilities of taking targeted measures in poverty alleviationIn 2020, Gree Electric Appliances actively responded to the provincial party committee and the provincialgovernment's implementation of the rural revitalization strategy and the "Ten Thousand Enterprises Helping TenThousand Villages in the Form of Pairing Assistance" action. Under the leadership of the Zhuhai Federation ofTrade Unions, Gree Electric Appliances helped Qixing Village, Shuangjiao Town, Yangchun City to carry outpoverty alleviation work by donating home appliances to the registered poor households and village committee ofQixing Village through Zhuhai Pearl Charity Foundation and providing local residents with employmentopportunities to local residents. By stimulating the internal motivation of the needy groups to be self-reliant andstrive to be strong, Gree Electric Appliances made strong efforts in targeted advancement and achieved practicalresults in targeted landing, and thus won the battle of targeted poverty alleviation.
3. Circumstances related to environmental protection
If the listed company and its subsidiaries are key pollutant discharge units published by the environmental protection department
√ Yes □ No
| Serial Number | Company or Subsidiary Name | Names of Major Pollutants and Particular Pollutants | Discharge Mode | Number of Discharge Ports | Distribution of Discharge Ports | Discharge Concentration | Adopted Pollutant Discharge Standard | Total Discharge | Total Approved Discharge | Over-standard Discharge |
| 1 | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | COD, ammonia nitrogen | Intermittent discharge | 3 | Sewage station | COD: 21mg/L; Ammonia nitrogen: 0.259mg/L. | Level 2 limit of the second period specified in the Discharge Limits of Water Pollutants (DB44/26-2001) | COD: 10.257 tons/year; Ammonia nitrogen: 0.115 tons/year. | COD: 26.4 tons/year; Ammonia nitrogen: 3.6 tons/year. | None |
| 2 | Zhuhai Landa Compressor Co., Ltd. | Total nitrogen, COD, ammonia nitrogen, total zinc | Continuous discharge | 1 | Sewage station | Total nitrogen: 5.5mg/L; COD: 23.6mg/L; Ammonia nitrogen: 0.648mg/L; Total zinc: 0.12mg/L. | Pollutant Discharge Standard for Electroplating Water (DB44/1597-2015) | Total nitrogen: 1.75 tons/year; COD: 4.56 tons/year; Ammonia nitrogen: 0.065 tons/year; Total zinc: 0.023 tons/year. | Total nitrogen: 6.935235 tons/year; COD: 23.117450 tons/year; Ammonia nitrogen: 3.698792 tons/year; Total zinc: 0.462349 tons/year. | None |
| 3 | Gree (Hefei) Electric Appliances Co., Ltd. | COD, ammonia nitrogen | Intermittent discharge | 2 | Sewage station | Ammonia nitrogen: 0.216mg/L; COD: 14.71mg/L. | Grade-3 Standard of Comprehensive Sewage Discharge Standard (GB8978-1996) and Requirements of | COD: 5.491 tons/year; Ammonia nitrogen: 0.112 tons/year. | COD: 208.704 tons/year; Ammonia nitrogen: 20.870 tons/year. | None |
| Takeover Standards for Sewage Treatment Plants in Economic Development Zones | ||||||||||
| 4 | Zhuhai Kaibang Motor Manufacture Co., Ltd. | Suspended matter COD, ammonia nitrogen | Intermittent emission | 1 | Sewage station | Suspended matter: 4mg/L; COD: 21.9mg/L; Ammonia nitrogen: 4.01mg/L. | Grade-1 standard for the second period in Discharge Limits of Water Pollutants (DB44/26-2001) | Suspended matter: 0.045 tons/year; COD: 0.107 tons/year; Ammonia nitrogen: 0.046 tons/year. | 2020 sewage permit not approved | None |
| Toluene, xylene, sulfur dioxide, nitrogen oxide, particulate matter | Organized discharge | 3 | Roof of factory building | Toluene: 0.01mg/m?; Xylene: 0.32mg/m?; Sulfur dioxide: 15mg/m?; Nitrogen oxide: 12mg/m?; Particulate matter: 20mg/m?. | Emission limits of process waste gas (the second period) specified in the Emission Limits of Air Pollutants of Guangdong (DB44/27-2001), Emission limits of exhaust cylinder VOCs of the Emission Standard of Volatile Organic Compounds for Surface Coating of Automobile Manufacturing Industry of Guangdong (DB44/816-2010) | Toluene: 0.466 tons/year; Xylene: 0.095 tons/year; Sulfur dioxide: 2.153 tons/year; Nitrogen oxide: 2.313 tons/year; Particulate matter: 3.941 tons/year. | ||||
| 5 | Zhuhai Gree Electrical Co., Ltd. | Xylene, phenols, TVOCs | Organized discharge | 12 | Roof of factory building | Xylene: 1.41047mg/m?; | Level 2 limit of the second period specified in the Emission Limits of | Xylene: 0.2777 tons/year; Phenols: 0.09882 | 2020 sewage permit not approved | None |
| Phenols: 0.3mg/m?; TVOCs: 10.2513mg/m?. | Air Pollutants (DB44/27-2001); the second period specified in the Emission Standard of Volatile Organic Compounds for Furniture Manufacturing Operations (DB44/814-2010) | tons/year; TVOCs: 1.60818 tons/year. |
Construction and operation of pollution prevention facilities
1. Wastewater pollution control facilities:
The Company and its subsidiaries are all equipped with corresponding sewage treatment facilities in accordancewith the environmental protection requirements for construction projects, as well as full-time environmentalprotection managers, operators and monitors. Up to now, all the systems have been in normal operation, and metthe emission standards stably, without emissions beyond the standards.
2. Waste gas pollution control facilities:
The waste gas pollution control facilities of the Company and its subsidiaries are in normal operation, theindicators of waste gas monitoring conform to the national and local emission standards, and there is no situationexceeding the standards.
3. Solid waste treatment and disposal facilities:
The Company implemented the hazardous waste classification and collection system and entrusted the institutionswith corresponding hazardous waste treatment qualifications to dispose of them. No illegal disposal ever occurred.Environmental impact assessment of construction projects and other administrative licenses forenvironmental protectionThe waste gas pollution control facilities of the Company and its subsidiaries are in normal operation, theindicators of waste gas monitoring conform to the national and local emission standards, and there is no situationexceeding the standards.Contingency plan for unexpected environmental eventsThe Company implemented requirements of the Emergency Management Measures for UnexpectedEnvironmental Events and related national laws and regulations. To ensure timely, orderly, efficient andappropriate response to unexpected environmental events, protect the personal safety of employees and reduceproperty losses, each subsidiary of the Company formulated a contingency plan for unexpected environmentalevents and reported them to the environmental protection department for recording.Environmental self-monitoring planThe Company formulated an environmental self-monitoring plan according to the requirements of environmentalimpact assessment, and detected wastewater pollutants once a day and air pollutants at least once a year.Other environmental information that should be made publicNoneOther environmental protection related information
None
XIX. Description of other significant matters
√ Applicable □ Not applicable
On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement. Gree Group
planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by Gree Group toZhuhai Mingjun at a price of RMB 46.17/share (accounting for 15% of the Company's total equity); On 13December, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision andAdministration Commission of the State Council (SASAC) of Zhuhai City separately approved the share transfer.Gree Group obtained the Transfer Registration Confirmation issued by China Securities Depository and ClearingCorporation Limited (CSDC) Shenzhen Branch on 3 February, 2020. The share transfer registration proceduresfor the transfer of this agreement have been completed, and the transfer date is 23 January, 2020. After thecompletion of the share transfer registration, the Company has neither a controlling shareholder nor an actualcontroller.XX. Significant matters of the Company's subsidiaries
□ Applicable √ Not applicable
Section VI Changes in Stock Capital & Information of ShareholdersI. Changes in stock capital
1. Changes in stock capital
Unit: Share
| Before the change | Increase/Decrease (+, -) | After the change | |||||||
| Qty | Percentage | New Issue | Bonus Issue | Stock Converted from Housing Accumulation Fund | Others | Subtotal | Qty | Percentage | |
| I. Stocks with trading restriction conditions | 45,799,625 | 0.76% | 22,419 | 22,419 | 45,822,044 | 0.76% | |||
| 1. Stocks held by the State | |||||||||
| 2. Stocks held by the state-owned legal person | |||||||||
| 3. Stocks held by other domestic capital | 45,799,625 | 0.76% | 22,419 | 22,419 | 45,822,044 | 0.76% | |||
| Including: Stocks held by the domestic legal person | |||||||||
| Stocks held by the domestic natural person | 45,799,625 | 0.76% | 22,419 | 22,419 | 45,822,044 | 0.76% | |||
| 4. Stocks held by the foreign capital | |||||||||
| Including: Stocks held by the foreign legal person | |||||||||
| Stocks held by the foreign natural person | |||||||||
| II. Tradable Stocks without trading restriction conditions | 5,969,931,253 | 99.24% | -22,419 | -22,419 | 5,969,908,834 | 99.24% | |||
| 1. RMB ordinary | 5,969,931,253 | 99.24% | -22,419 | -22,419 | 5,969,908,834 | 99.24% | |||
| stocks | |||||||||
| 2. Domestically listed foreign capital stocks | |||||||||
| 3. Overseas listed foreign capital stocks | |||||||||
| 4. Others | |||||||||
| III. Total of stocks | 6,015,730,878 | 100.00% | 6,015,730,878 | 100.00% |
Causes of changes in stock capital
□ Applicable √ Not applicable
Approval of changes in stock capital
□ Applicable √ Not applicable
Transfer due to changes in stock capital
□ Applicable √ Not applicable
Progress of share repurchase
√ Applicable □ Not applicable
1. The Company held the tenth meeting of the eleventh session of board of directors on 10 April, 2020. At themeeting, the Proposal on the Partial Repurchase of Public Shares (hereinafter referred to as the "first phase ofrepurchase") was reviewed and approved. The Company intended to perform the repurchase in the form ofcentralized bidding transactions with its self-owned funds totaling between RMB 3 billion (inclusive) and RMB 6billion (inclusive) at a repurchase price of less than RMB 67.82/share (after the annual equity distribution plan of2019 is implemented, the repurchase price will be adjusted from no more than RMB 70/share to no more thanRMB 68.80/share. After the equity distribution plan for half year of 2020 is implemented, the repurchase pricewill be adjusted from no more than RMB 68.80/share to no more than RMB 67.82/share). The repurchase periodshall not exceed 12 months from the date of review and approval of the repurchase plan by the Company's boardof directors.
2. The Company held the sixteenth meeting of the eleventh session of board of directors on 13 October, 2020. Atthe meeting, the Proposal on the Partial Repurchase of Public Shares (hereinafter referred to as the "second phaseof repurchase") was reviewed and approved. The Company intended to perform the repurchase in the form ofcentralized bidding transactions with its self-owned funds totaling between RMB 3 billion (inclusive) and RMB 6billion (inclusive) at a repurchase price of less than RMB 69.02/share (after the annual equity distribution plan of2020 is implemented, the repurchase price will be adjusted from no more than RMB 70/share to no more thanRMB 69.02/share). The repurchase period shall not exceed 12 months from the date of review and approval of therepurchase plan by the Company's board of directors.
3. By the end of the Report Period (31 December, 2020), the Company has repurchased a total of 94,184,662shares, all of which were purchased in the first phase of the repurchase plan, at the cost of RMB 5,181,586,503.65(excluding transaction costs), with the minimum purchase price of RMB 53.01/share and the highest purchaseprice of RMB 57.00/share. For details, see the relevant repurchase progress announcement.
4. By the disclosure date of the 2020 annual report, the Company has repurchased a total of 182,879,661 shares bythe special repurchase account through two phases of the repurchase plan, at the cost of RMB 10,420,236,003.53(excluding transaction costs), with the minimum purchase price of RMB 53.01/share and the highest purchase
price of RMB 61.95/share.For the first phase of the repurchase plan, the Company repurchased a total of 108,365,753 shares at the cost ofRMB 5,999,591,034.74 (excluding transaction costs), with the minimum purchase price of RMB 53.01/share andthe highest purchase price of RMB 60.18/share. The repurchase plan was already implemented on 24 February,2021. For details, see the Company's relevant progress announcement disclosed in the designated informationdisclosure media.For the second phase of the repurchase plan, the Company has repurchased a total of 74,513,908 shares at the costof RMB 4,420,644,968.79 (excluding transaction costs), with the minimum purchase price of RMB 56.46/shareand the highest purchase price of RMB 61.95/share. For details, see the Company's relevant progressannouncement disclosed in the designated information disclosure media.
Progress of reducing shares repurchased by centralized bidding
□ Applicable √ Not applicable
Impact by changes in stock capital on financial indicators such as basic earnings per share and diluted earnings per share,and the net asset value per share attributable to common shareholders of the Company in the recent year and the recentperiod
□ Applicable √ Not applicable
Other contents that must be disclosed in the opinion of the Company or according to requirements of the securities regulatoryinstitution
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
| Name of shareholder | Number of restricted shares at the beginning of the period | Number of restricted shares increased in the current period | Number of restricted sales released from the lock-up requirements in the current period | Number of restricted shares at the end of the period | Reasons for restriction | Release date |
| Duan Xiufeng | 795,375 | 198,750 | 596,625 | Shares locked by executives | - | |
| Wang Jingdong | 663,505 | 221,169 | 884,674 | Share lock-up of outgoing executives | 16 July, 2022 | |
| Total | 1,458,880 | 221,169 | 198,750 | 1,481,299 | -- | -- |
II. Issuance and listing of securities
1. Issuance of securities (excluding the preferred stock) in the Report Period
□ Applicable √ Not applicable
2. Description about changes in the Company's total number of stocks and shareholder structure, andassets and liability structure
□ Applicable √ Not applicable
3. Existing internal employee stock
□ Applicable √ Not applicable
III. Information about the shareholders and actual controllers
1. Total number of shareholders and their shareholding status
Unit: Share
| Total number of common shareholders at the end of the Report Period | 480,000 | Total number of common shareholders at the end of last month before the disclosure date of the annual report | 468,644 | Total number of preferred shareholders (if any) whose voting rights were restored at the end of Report Period (See Note 8) | 0 | Total number of preferred shareholders (if any) whose voting rights were restored at the end of last month before the disclosure date of the annual report (See Note 8) | 0 | ||
| Shareholding of the shareholders holding more than 5% of total stocks or shareholding of the top 10 shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding proportion | Total number of the stocks held at the end of the Report Period | Increase/Decrease in the Report Period | Number of the trading restricted stocks held | Number of the trading unrestricted stocks held | Pledge or freezing | ||
| Stock status | Qty | ||||||||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 18.70% | 1,124,911,044 | 230,038,565 | |||||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 15.00% | 902,359,632 | 902,359,632 | Pledged | 902,359,632 | |||
| Jinghai Internet Technology Development Co., Ltd. | Domestic non-state-owned legal person | 8.20% | 493,140,455 | -42,881,778 | ||||
| Zhuhai Gree Group Co., Ltd. | State-owned legal person | 3.22% | 193,895,992 | -902,359,632 | ||||
| China Securities Finance Co., Ltd. | State-owned legal person | 2.99% | 179,870,800 | |||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 1.40% | 84,483,000 | |||||
| Qian Hai Life Insurance Co., Ltd. – Hai Li Nian Nina | Others | 1.00% | 60,086,861 | -5,523,921 | ||||
| GOLDMAN,SACHS&CO.LLC | Foreign legal person | 0.81% | 49,027,500 | 45,467,910 | ||||
| Dong Mingzhu | Domestic natural person | 0.74% | 44,488,492 | 33,366,369 | 11,122,123 | Pledged | 43,632,750 | |
| Hillhouse Capital Management–HCM China Fund | Foreign legal person | 0.72% | 43,396,407 | |||||
| Situation (if any) where a strategic investor or general legal person becomes one of top 10 shareholders due to placement of new shares (see Note 3) | None | |||||||
| Description for affiliated relationship or concerted action of the above shareholders | Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company does not know whether there is an associated relationship between the above shareholders or whether they are persons acting in concert. | |||||||
| Description about above-mentioned shareholders’ entrusting/being entrusted with and waiving voting rights | None | |||||||
| Shareholding of the top 10 shareholders without trading restriction conditions | ||||||||
| Name of shareholder | Number of the trading unrestricted stocks held at the end of the Report Period | Type of stocks | ||||||
| Type of stocks | Qty | |||||||
| Hong Kong Securities Clearing Company Ltd. | 1,124,911,044 | RMB ordinary stocks | 1,124,911,044 | |||||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | 902,359,632 | RMB ordinary stocks | 902,359,632 | |||||
| Jinghai Internet Technology Development Co., Ltd. | 493,140,455 | RMB ordinary stocks | 493,140,455 | |||||
| Zhuhai Gree Group Co., Ltd. | 193,895,992 | RMB ordinary stocks | 193,895,992 |
| China Securities Finance Co., Ltd. | 179,870,800 | RMB ordinary stocks | 179,870,800 |
| Central Huijin Asset Management Co., Ltd. | 84,483,000 | RMB ordinary stocks | 84,483,000 |
| Qian Hai Life Insurance Co., Ltd. – Hai Li Nian Nian | 60,086,861 | RMB ordinary stocks | 60,086,861 |
| GOLDMAN,SACHS&CO.LLC | 49,027,500 | RMB ordinary stocks | 49,027,500 |
| Hillhouse Capital Management–HCM China Fund | 43,396,407 | RMB ordinary stocks | 43,396,407 |
| China Life Insurance Company Ltd. – Traditional – General Insurance Product-005L-CT001 Shen | 32,357,424 | RMB ordinary stocks | 32,357,424 |
| Description for affiliated relationship or concerted action among the top 10 shareholders holding tradable stocks without trading restriction conditions and between the top 10 shareholders holding tradable stocks without trading restriction conditions and the top 10 shareholders | Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company does not know whether there is an associated relationship between the above shareholders or whether they are persons acting in concert. | ||
| Description of the participation in margin trading business of the top 10 common shareholders (if any) (see Note 4) | None | ||
The top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company conductedagreed repurchase transactions in the Report Period
□ Yes √ No
The top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company didn'tconduct agreed repurchase transactions in the Report Period.
2. Information of the controlling shareholders of the Company
Nature of controlling shareholder: No controlling entityType of the controlling shareholder: No controlling shareholderDescription about the situation that the Company has no controlling shareholderOn 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement between ZhuhaiGree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15% of theShares of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI, pursuant to which Gree Group transferred its902,359,632 held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun.After the transaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting in
concert Dong Mingzhu cannot approve the specific proposals with their voting rights on the shares of listedcompanies that are actually at their disposal, which are not enough to have a significant impact on the resolutionsof the shareholders' meeting of the listed company, and cannot decide the selection of more than half of themembers of the board of directors of the listed company. Therefore, the listed company has no controllingshareholders and no actual controllers. For details, see the Instructions on the Reply to the Inquiry Letter of theShenzhen Stock Exchange disclosed by the Company at www.cninfo.com.cn on 18 January, 2020.
Controlling shareholder change in the Report Period
√ Applicable □ Not applicable
| Name of new controlling shareholder | No controlling shareholder |
| Change date | 3 February, 2020 |
| Query index at the website specified | Announcement on the Completion of the Transfer Registration of the Shares Transferred by the Controlling Shareholder by Agreement and the Change of the Controlling Shareholder and Actual Controller of the Company disclosed by the Company on www.cninfo.com.cn |
| Date of disclosure at the website specified | 4 February, 2020 |
3. Actual controller of the Company and its person acting in concert
Nature of the actual controller: No actual controllerType of the actual controller: No actual controller
Description about the situation that the Company has no actual controllerOn 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement between ZhuhaiGree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15% of theShares of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI, pursuant to which Gree Group transferred its902,359,632 held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun.After the transaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting inconcert Dong Mingzhu cannot approve the specific proposals with their voting rights on the shares of listedcompanies that are actually at their disposal, which are not enough to have a significant impact on the resolutionsof the shareholders' meeting of the listed company, and cannot decide the selection of more than half of themembers of the board of directors of the listed company. Therefore, the listed company has no controllingshareholders and no actual controllers. For details, see the Instructions on the Reply to the Inquiry Letter of theShenzhen Stock Exchange disclosed by the Company at www.cninfo.com.cn on 18 January, 2020.
Particulars on whether there are shareholders with a shareholding ratio of more than 10% at the ultimatecontrol level of the Company
√ Yes □ No
Legal personParticulars on shareholding at the ultimate control level
| Name of shareholder at the ultimate control level | Legal representative/Person in charge | Date of establishment | Organization code | Principal business |
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | Zhuhai Xianying Equity Investment Partnership (Limited Partnership) | 11 May, 2017 | 91440400MA4WJBCR4W | Business scope recorded in the agreement: Equity investment. (items that need to be approved in accordance with law can only be operated after approval by relevant departments) |
| Information regarding equity of other domestic and oversea listed companies controlled by the shareholder at the ultimate control level during the Report Period | None | |||
Change in the actual controller in the Report Period
√ Applicable □ Not applicable
| Name of the new actual controller | None |
| Change date | 3 February, 2020 |
| Query index at the website specified | Announcement on the Completion of the Transfer Registration of the Shares Transferred by the Controlling Shareholder by Agreement and the Change of the Controlling Shareholder and Actual Controller of the Company disclosed by the Company on www.cninfo.com.cn |
| Date of disclosure at the website specified | 4 February, 2020 |
The actual controller controlled the Company through trust or other asset management modes
□ Applicable √ Not applicable
4. Other corporate shareholders holding more than 10% of shares
□ Applicable √ Not applicable
5. Restricted share reduction of controlling shareholders and actual controllers, restructuring party andother commitment subjects
□ Applicable √ Not applicable
Section VII Related Information of Preferred Stock
□ Applicable √ Not applicable
The Company did not have any preferred stock in the Report Period.
Section VIII Related Information of Convertible Corporate Bonds
□ Applicable √ Not applicable
The Company did not have any convertible corporate bonds in the Report Period.
Section IX Directors, Supervisors, Senior Management Personnel
and Employees
I. Shareholding changes of directors, supervisors and senior management personnel
| Name | Title | Tenure status | Gender | Age | Commencement of term of office | Termination of term of office | Stocks held at the beginning of the Period (shares) | Number of held stocks increased in the current period (shares) | Number of held stocks reduced in the current period (shares) | Other increase/decrease changes (shares) | Stocks held at the end of the Period (shares) |
| Dong Mingzhu | Chairperson & President | Incumbent | F | 66 | 25 May, 2012 | 15 January, 2022 | 44,488,492 | 44,488,492 | |||
| Zhang Wei | Director | Incumbent | M | 44 | 16 January, 2019 | 15 January, 2022 | |||||
| Zhang Jundu | Director | Incumbent | M | 60 | 25 May, 2012 | 15 January, 2022 | |||||
| Guo Shuzhan | Director | Incumbent | M | 64 | 16 January, 2019 | 15 January, 2022 | |||||
| Liu Shuwei | Independent Director | Incumbent | F | 68 | 16 January, 2019 | 15 January, 2022 | |||||
| Xing Ziwen | Independent Director | Incumbent | M | 58 | 16 January, 2019 | 15 January, 2022 | |||||
| Wang Xiaohua | Independent Director | Incumbent | M | 59 | 16 January, 2019 | 15 January, 2022 | |||||
| Cheng Min | Chairman of Board of Supervisors | Incumbent | F | 42 | 2 November, 2020 | 15 January, 2022 | |||||
| Duan | Supervisor | Incumbent | M | 57 | 16 | 15 | 795,500 | 198,800 | 596,700 |
| Xiufeng | January, 2019 | January, 2022 | |||||||||
| Wang Fawen | Staff Supervisor | Incumbent | F | 37 | 16 January, 2019 | 15 January, 2022 | |||||
| Zhuang Pei | Vice President | Incumbent | M | 56 | 25 May, 2012 | 15 January, 2022 | 5,955,202 | 5,955,202 | |||
| Tan Jianming | Vice President | Incumbent | M | 56 | 31 August, 2017 | 15 January, 2022 | 1,297,300 | 1,297,300 | |||
| Deng Xiaobo | Vice President & Board Secretary | Incumbent | M | 45 | 26 December, 2020 | 15 January, 2022 | |||||
| Shu Lizhi | Vice President | Incumbent | M | 51 | 26 December, 2020 | 15 January, 2022 | |||||
| Liao Jianxiong | Finance Chief | Incumbent | M | 47 | 6 August, 2020 | 15 January, 2022 | |||||
| Huang Hui | Director and CEO | Resigned | M | 57 | 25 May, 2012 | 19 February, 2021 | 7,380,000 | 7,380,000 | |||
| Wang Jingdong | Director, Vice President, Chief Financial Officer, Board Secretary | Resigned | M | 50 | 25 May, 2012 | 17 August, 2020 | 884,674 | 884,674 | |||
| Li Xupeng | Chairman of Board of Supervisors | Resigned | M | 51 | 16 January, 2019 | 2 November, 2020 | |||||
| Total | -- | -- | -- | -- | -- | -- | 60,801,168 | 0 | 198,800 | 60,602,368 |
II. Changes in the directors, supervisors and senior management personnel
√ Applicable □ Not applicable
| Name | Title | Type | Date | Reason |
| Wang Jingdong | Finance Chief | Disengagement | 6 August, 2020 | Internal job transfer |
| Wang Jingdong | Director, Vice President, Board Secretary | Resigned | 17 August, 2020 | Resignation due to personal reasons |
| Li Xupeng | Chairman of Board of Supervisors | Resigned | 2 November, 2020 | Resignation due to personal reasons |
III. Positions of directors, supervisors and senior management personnelProfessional background, major work experience and current main responsibilities in the Company of the currentdirectors, supervisors and senior management personnel of the CompanyMs. Dong Mingzhu, with a master degree, currently acts as the Chairperson of the Board & President of GreeElectric Appliances, Inc. of Zhuhai.She has served as salesman, Vice Director and Director of Sales Department, Vice General Manager, ViceChairperson of the board and President of Gree Electric Appliances, etc.She consecutively served as deputy to the tenth, eleventh, twelfth and thirteenth National People's Congresses, andever acted as a member of the tenth, eleventh and twelfth Executive Committees of the All-China Women'sFederation, the "Messenger of UN Sustainable Urban Development" of the United Nations, the first rotatingpresidency of the "Sustainable Development Commission" of the United Nations Development Programme, vicepresident of the China Quality Association, vice chairperson of China Association of Women Entrepreneurs,member of Expert Committee for the thirteenth five-year development planning of the National Development andReform Commission, director of Board of Directors of China Social Economic Investigation Research Center,member of WFEO-CHINA of China Association for Science and Technology, etc. She has been successivelyappointed as a part-time professor or MBA tutor by Northwest University, Sun Yat-sen University, ChinaUniversity of Science and Technology, Zhongnan University of Economics and Law, Communication Universityof China and other colleges, and was awarded the title of honorary academician by Beijing NormalUniversity-Hong Kong Baptist University United International College (UIC). She was awarded the title of"National Labor Model" by the State Council in 2015, elected as "CCTV China Economic Person of the Year" in2006, 2010 and 2013, selected as "The Most Influential Women in Business" by the Fortune magazine for 14times from 2004 to 2019, ranked in the ranking list of "Top 50 Women to Watch" of Financial Times for threeconsecutive years from 2009 to 2011, was enrolled in the ranking list of "Global Best CEO" of the "HarvardBusiness Review" magazine in 2013, becoming China's only female on the list.Mr. Zhang Wei, with a bachelor degree, currently acts as the Director of Gree Electric Appliances, Inc. of Zhuhai.He joined in Gree Electric Appliances in 1999 and served as the person in charge of Gree Electric Appliances PipeBranch, Material Supply Department, Outsourcing & Purchase Quality Management Department, and EnterpriseManagement Department, and President Assistant of Gree Electric Appliances; from 2013 to 2017, he served asExecutive Deputy President of Gree Group; from 2017 to March 2020, he served as Vice President of PartyAffairs of Gree Group; from April 2020 to October 2020, he served as the President Assistant of the Company;currently he serves as the Secretary of the Party Committee of the Company.
Mr. Zhang Jundu, with a junior college degree, currently acts as the Director of Gree Electric Appliances, Inc. ofZhuhai.Since September 1999, he has served as chairman of Zhejiang Tongcheng Gree Electric Appliances Co., Ltd.Since August 2012, he has concurrently served as general manager of Zhejiang Shengshi Xinxing Gree TradingCo., Ltd. Since May 2012, he has served as director of the Company.Mr. Guo Shuzhan, with a junior college degree, currently acts as the Director of Gree Electric Appliances, Inc. ofZhuhai.Since August 2006, he has been served as Chairman of Jinghai Internet Technology Development Co., Ltd.; SinceAugust 2012, he has been served as General Manager of Henan Shengshi Xinxing Gree Trading Co., Ltd.; fromMay 2012 to January 2019, he served as the Supervisor of the Company; since January 2019, he has been servedas the Director of the Company.Ms. Liu Shuwei, with a master degree, currently acts as the Independent Director of Gree Electric Appliances, Inc.of Zhuhai.Ms. Liu Shuwei graduated from Peking University in 1986 with a master degree in economics. Ms. Liu studiesunder the famous economists Chen Daisun Professor and Li Yining Professor in China, and is a well-knownscholar in finance. In 2002, she was appraised as CCTV's "Economic Person of the Year" and "Moving China -Person of 2002". She is currently an Independent Director of Vanke Enterprise Co., Ltd., an Independent Directorof Henan Costar Group Co., Ltd., and a director and a researcher at the China Enterprise Research Center ofCentral University of Finance and Economics. Since January 2019, she has been an independent director of theCompany.Mr. Xing Ziwen, with a doctor degree, currently acts as the Independent Director of Gree Electric Appliances, Inc.of Zhuhai.He is also a professor of Xi'an Jiaotong University, a distinguished professor of the Yangtze River ScholarProgram by the Ministry of Education, a national candidate for the Ten Million Talents Project in the New Century,and enjoys special allowances from the State Council. Professor Xing Ziwen used to be the director of theDepartment of Refrigeration and Cryogenic Engineering, School of Energy and Power Engineering, and thedirector of the Compressor Research Institute at Xi'an Jiaotong University. He currently acts as the deputy directorof the National Engineering Center for Fluid Machinery and Compressors at Xi'an Jiaotong University. He haswon 2 national scientific and technological progress awards, 7 provincial and ministerial scientific andtechnological progress awards, the Special Science and Technology Progress Award issued by the ChineseAssociation of Refrigeration, the Special Invention and Entrepreneurship Award issued by the China Associationof Inventions, the Outstanding Professor Award issued by the Xia Anshi Education Foundation, and the YouthInnovation Award issued by Ho Leung Ho Lee Foundation.Mr. Wang Xiaohua, with a master degree, currently acts as the Independent Director of Gree Electric Appliances,Inc. of Zhuhai.Mr. Wang Xiaohua is the director of Guangdong Guangxin Junda Law Firm. He has successively studied law atthe Central University for Nationalities, Peking University, Wuhan University, Japan Faith Corporation and theUniversity of East London. In 2003, he obtained a master degree in law from the University of East London. Since1988, he has been working as a part-time lawyer, sponsoring and leading a team to jointly handle over 1,000litigation and non-litigation cases and projects, and assisting companies to raise tens of billions of yuan from
domestic and foreign securities markets. Since 1998, he has been a member of Guangdong Provincial Committeeof Chinese People's Political Consultative Conference (CPPCC) and has submitted about 50 proposals. He haspublished four books such as Legal Issues on Enterprise Listing and more than 20 articles such as the rise and fallof the nation concerns everyone and the progress of rule of law concerns every lawyer. He once served as thepresident of the Guangzhou Lawyers Association, and currently serves as a standing committee of GuangdongProvincial Committee of the CPPCC, a member of the Guangdong Provincial Election Committee for Judges andProcurators, the legal consulting expert of the Guangzhou Municipal People's Government, and the legalconsultant at the Security Bureau of the Guangdong Provincial Committee of the CCP, Guangdong ProvincialPublic Security Department (GDPSD) and Guangdong Provincial Tax Service, State Taxation Administration. Healso served as the Guangzhou Asian Games Torch-Bearer; and won the honorary titles such as "OutstandingLawyers of Guangdong Province", "Top Ten Innovation Leading Talents of Tianhe District", and "GuangzhouLeading Talents of Innovation and Entrepreneurship Services".Ms. Cheng Min, with a bachelor degree, currently acts as the Supervisor of Gree Electric Appliances, Inc. ofZhuhai.Ms. Cheng Min is currently President Assistant and Board Secretary of Zhuhai Gree Group Co., Ltd., and theChairman and General Manager of Zhuhai Gexin Development Co., Ltd. She has served as the director of theOverall Planning Department of Zhuhai Convention and Exhibition Bureau, a member of the Party Group ofZhuhai Convention and Exhibition Bureau, and the office director of Zhuhai Gree Group Co., Ltd.Mr. Duan Xiufeng, currently acts as the Supervisor of Gree Electric Appliances, Inc. of Zhuhai.Graduated from Shandong Party School in 1999, he has successively served as the Deputy General Manager andthe General Manager of Shandong Gree Electric Appliances Marketing Co., Ltd. and the General Manager ofShandong Shengshi Xinxing Gree Trading Co., Ltd. Since January 2019, he has been the Supervisor of theCompany.Ms. Wang Fawen, with a master degree, currently acts as the Employee Supervisor of Gree Electric Appliances,Inc. of Zhuhai.She has the national vocational qualification certificates such as Intermediate Economist and Professional inHuman Resources. From 2007 to 2019, she successively served as the human resources specialist of HumanResources Department, the director of Personnel Integration Office, the head of Performance Section, and thehead of Training Section, the assistant to the director of Training Department, and the director of HumanResources and Training Department of the Company; from February 2019 to the present, she has been serving asthe vice director of Human Resources Department of the Company.Mr. Zhuang Pei, with a master degree and the title of Engineer, currently acts as the Vice President of GreeElectric Appliances, Inc. of Zhuhai.From 2002 to April 2003, he served as President Assistant of the Company. From April 2003 up to now, he hasserved as vice president of the Company.Mr. Tan Jianming, with a master degree, currently acts as the Chief Engineer and Vice President of Gree ElectricAppliances, Inc. of Zhuhai.He studied the major of refrigeration and low temperature technology of Huazhong University of Science andTechnology from 1982 to 1986 and received the Bachelor's Degree; from 1986 to 1989, he continued to study at
the major of refrigeration and low temperature technology of Huazhong University of Science and Technologyand received a master's degree, after graduation in 1989, he joined Gree Electric Appliances, Inc. of Zhuhaiimmediately and successively served as designer, department head, President Assistant, Deputy Chief Engineer,etc. Since August 2017, he has served as a Chief Engineer & Vice President of the Company.Mr. Deng Xiaobo, with a bachelor degree, currently acts as the Vice President & Board Secretary of Gree ElectricAppliances, Inc. of Zhuhai.From July 2015 to November 2020, he served as the Chairman of Shanxi Coal and Chemical Industry GroupFinance Co., Ltd. In November 2020, he joined GREE Electric Appliances, Inc. of Zhuhai. Since December 2020,he has served as the Vice President & Board Secretary of the Company.Mr. Shu Lizhi, with a master degree, currently acts as the Vice President of Gree Electric Appliances, Inc. ofZhuhai.He served as the deputy director and the director of Wuhan Special Commission Office of the National AuditOffice of the People's Republic of China; in December 2019, he joined GREE Electric Appliances, Inc. of Zhuhai.Since December 2020, he has been serving as the Vice President of the Company.Mr. Liao Jianxiong, currently acts as the Finance Chief of Gree Electric Appliances, Inc. of Zhuhai.He joined in Gree Electric Appliances in May 1993 and successively served as the head of the FinancialDepartment of Gree (Chongqing) Electric Appliances Co., Ltd., the head of the Financial Department, and thePresident Assistant & head of the Financial Department of Gree Electric Appliances, Inc. of Zhuhai. Since August2020, he has been serving as the Finance Chief, President Assistant & head of the Financial Department of theCompany.
Information of positions in shareholders
√ Applicable □ Not applicable
| Name of incumbent | Name of shareholder | Position at the shareholder | Commencement of term of office | Termination of term of office | Remuneration and allowance received from the shareholder |
| Cheng Min | Zhuhai Gree Group Co., Ltd. | President Assistant & Board Secretary | 1 August, 2017 | Yes | |
| Guo Shuzhan | Jinghai Internet Technology Development Co., Ltd. | Chairman and legal representative | 1 August, 2006 | No |
Information of positions in other companies
√ Applicable □ Not applicable
| Name of incumbent | Names of other companies | Position at other companies | Commencement of term of office | Termination of term of office | Remuneration and allowance received from other companies |
| Dong Mingzhu | Zhuhai Gezhen Investment Management Partnership (Limited Partnership) | Executive Partner | 26 September, 2019 | No |
| Dong Mingzhu | Zhuhai Xima Pearl New Media Co., Ltd. | Director and Manager | 1 October, 2015 | No | |
| Dong Mingzhu | Zhuhai Yinlong New Energy Co., Ltd. | Director | 1 February, 2017 | No | |
| Guo Shuzhan | Beijing Qianyuan Hengjiuhe Liquor Co., Ltd. | Director | 25 April, 2014 | No | |
| Guo Shuzhan | Xiahe Hengsheng Hydropower Co., Ltd. | Director | 1 May, 2007 | No | |
| Guo Shuzhan | Henan Shengshi Xinxing Gree Trading Co., Ltd. | Executive Director | 1 August, 2010 | Yes | |
| Guo Shuzhan | Henan Gree Electric Appliances Customer Service Co., Ltd. | Executive Director and General Manager | 1 August, 2006 | No | |
| Guo Shuzhan | Luoyang Gree Electric Appliances Logistics Co., Ltd. | Executive Director and General Manager | 1 June, 2010 | No | |
| Guo Shuzhan | Henan Huizhong Yifeng Electronic Commerce Co., Ltd. | Chairperson | 1 December, 2015 | No | |
| Guo Shuzhan | Xiahe Hengfa Hydropower Co., Ltd. | Director | 1 June, 2005 | No | |
| Guo Shuzhan | Zhengzhou Hengzhixin Metal Component Manufacturing Co., Ltd. | Executive Director and General Manager | 1 March, 2017 | No | |
| Zhang Jundu | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. | Chairperson | 1 September, 1999 | No | |
| Zhang Jundu | Ningbo Tongcheng Gree Electric Appliances Co., Ltd. | Director | 1 July, 2013 | No | |
| Zhang Jundu | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Executive Director and General Manager | 1 January, 2017 | Yes | |
| Zhang Jundu | Zhejiang Ruitong Automobile Co., Ltd. | Director | 1 December, 2014 | No | |
| Zhang Jundu | Wenzhou Tongcheng Economic and Trade Co., Ltd. | Director | 1 April, 2012 | No | |
| Zhang Jundu | Huzhou Tongcheng Gree Electric Appliances Co., Ltd. | Director | 1 November, 2008 | No | |
| Liu Shuwei | China Vanke Co., Ltd. | Independent Director | 30 June, 2017 | 29 June, 2023 | Yes |
| Liu | Costar Group Co., Ltd. | Independent | 10 April, 2019 | 10 April, 2022 | Yes |
| Shuwei | Director | ||||
| Wang Xiaohua | ETR Law Firm | Partner Chairman | 1 June, 2017 | Yes | |
| Wang Xiaohua | Guangzhou Nansha Reclamation Development Ltd. | External Director | 1 October, 2015 | Yes | |
| Wang Xiaohua | Guangdong Guangxin Information Industry Co., Ltd. | Independent Director | 1 July, 2014 | Yes | |
| Wang Xiaohua | Guangdong Shirong Zhaoye Co., Ltd. | Independent Director | 26 March, 2019 | 26 March, 2022 | Yes |
| Duan Xiufeng | Beijing Detai Hengrun Investment Co., Ltd. | Manager | 3 July, 2014 | No | |
| Duan Xiufeng | Beijing Rongzhi Xingwei Management Consulting Co., Ltd. | Manager | 2 July, 2013 | No | |
| Duan Xiufeng | Shandong Jierui Logistics Co., Ltd. | Executive Director and General Manager | 11 August, 2010 | Yes | |
| Duan Xiufeng | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Manager | 30 June, 2011 | No | |
| Duan Xiufeng | Jinan Qihui Microfinance Co., Ltd. | Director | 4 February, 2009 | No | |
| Duan Xiufeng | Shandong Gree Electric Appliances Customer Service Co., Ltd. | Executive Director and General Manager | 2 August, 2012 | No | |
| Duan Xiufeng | Shandong Binzhou Dongsheng Real Estate Co., Ltd. | Executive Director | 26 June, 2009 | No | |
| Duan Xiufeng | Shandong Blue Economy Industrial Fund Management Co., Ltd. | Chairperson | 5 November, 2014 | No | |
| Duan Xiufeng | Shandong Youbu Network Technology Co., Ltd. | Executive Director | 27 October, 2015 | No | |
| Duan Xiufeng | Jinan Jierui New Energy Technology Co., Ltd. | Executive Director and General Manager | 21 December, 2016 | No | |
| Duan Xiufeng | Shandong Red April Brand Management Co., Ltd. | Executive Director and General Manager | 1 August, 2017 | No | |
| Duan | Shandong Red April E-commerce | Executive Director and General | 30 August, | No |
| Xiufeng | Co., Ltd. | Manager | 2017 | ||
| Duan Xiufeng | Zhongfu Huaxia Management Consulting Co., Ltd. | Chairperson | 23 December, 2005 | No | |
| Duan Xiufeng | Shandong Red April Holdings Group Co., Ltd. | Executive Director and Manager | 5 May, 2015 | No | |
| Duan Xiufeng | Shandong Red April Venture Capital Co., Ltd. | Executive Director and General Manager | 24 April, 2017 | No | |
| Duan Xiufeng | Shandong Red April New Energy Technology Co., Ltd. | Executive Director and Manager | 13 December, 2017 | No |
Punishments given by the securities regulatory institution to the incumbent directors, supervisors and senior management personnelor those who resigned in the Report Period in the recent three years
□ Applicable √ Not applicable
IV. Remunerations of the directors, supervisors and senior management personnelDecision making procedures, determination basis, and actual payment regarding the remunerations of directors, supervisors andsenior management personnelWithin the Report Period, the Board of Directors of the Company conducted the performance review of theachievements and performance of duties of the senior management personnel and implemented the assignmentassessment system regarding the working results in ethic, competence, diligence and achievement. The Companyadhered to the principle of rationality, fairness and justice and laid emphasis on combination of material incentiveand spiritual incentive. As for the material incentive, the Company paid attention to reasonably controlling rewardgrade and properly opening the reward gap and emphasized the time and frequency of reward. As for the spiritualincentive, the Company paid attention to combining the corporate objectives with the spirit of dedication, sense ofsocial responsibility and career achievement of the senior management personnel.
Remunerations of the directors, supervisors and senior management personnel in the Report Period
Unit: RMB 10,000
| Name | Title | Gender | Age | Tenure status | Total amount of pre-tax remuneration received from the Company | Remuneration received from a related party of the Company |
| Dong Mingzhu | Chairperson & President | F | 66 | Incumbent | 915 | No |
| Zhang Jundu | Director | M | 60 | Incumbent | Yes | |
| Guo Shuzhan | Director | M | 64 | Incumbent | Yes | |
| Zhang Wei | Director | M | 44 | Incumbent | 19.25 | No |
| Liu | Independent Director | F | 68 | Incumbent | 15 | Yes |
| Shuwei | ||||||
| Wang Xiaohua | Independent Director | M | 59 | Incumbent | 15 | Yes |
| Xing Ziwen | Independent Director | M | 58 | Incumbent | 15 | Yes |
| Cheng Min | Supervisor | F | 40 | Incumbent | Yes | |
| Duan Xiufeng | Supervisor | M | 57 | Incumbent | Yes | |
| Wang Fawen | Staff Supervisor | F | 37 | Incumbent | 100.65 | No |
| Zhuang Pei | Vice President | M | 56 | Incumbent | 230 | No |
| Tan Jianming | Vice President | M | 56 | Incumbent | 330 | No |
| Deng Xiaobo | Vice President & Board Secretary | M | 45 | Incumbent | 3.2 | No |
| Shu Lizhi | Vice President | M | 51 | Incumbent | 10.42 | No |
| Liao Jianxiong | Finance Chief | M | 47 | Incumbent | 124.97 | No |
| Huang Hui | Director and CEO | M | 57 | Resigned | 375 | No |
| Wang Jingdong | Director, Vice President, Chief Financial Officer, Board Secretary | M | 50 | Resigned | 17.7 | No |
| Li Xupeng | Supervisor | M | 51 | Resigned | Yes | |
| Total | -- | -- | -- | -- | 2,171.19 | -- |
Equity incentives granted to the directors and senior management personnel in the Report Period
□ Applicable √ Not applicable
V. Employees of the Company
1. Number of employees and their specialties and education level
| Number (person) of on-the-job employees of the parent company | 25,729 |
| Number (person) of on-the-job employees of the main subsidiaries | 58,223 |
| Total number (person) of on-the-job employees | 83,952 |
| Total number (person) of employees receiving salaries in the | 83,952 |
| current period | |
| Number (person) of retired employees for whom the parent company and main subsidiaries need to bear expenses | 368 |
| Formation of Specialties | |
| Category of formation of specialties | Number (person) of employees in the formation |
| Manufacturing Personnel | 62,192 |
| Sales Personnel | 2,659 |
| Technicians | 14,458 |
| Financial Personnel | 1,007 |
| Administrative Personnel | 3,636 |
| Total | 83,952 |
| Education Level | |
| Education level category | Number (person) of employees |
| Bachelor Degree or above | 18,023 |
| College Degree | 12,455 |
| Technical Secondary School Education and below | 53,474 |
| Total | 83,952 |
2. Remuneration policy
The Company implements a comprehensive remuneration management system, adopts a remuneration mechanismcombining fixed salary and floating performance salary, and upholds the concept of remuneration paymentaccording to the position, capacity and performance of the employees, which reflects the value of positions,ensures internal fairness, attaches importance to per capita efficiency enhancement, and realizes the dual balanceof enterprise and employee development. During the 2020 epidemic, adhering to the concept of equally protectingthe legitimate rights and interests of employees, the Company formulated the remuneration payment policy in atimely manner in accordance with national laws and regulations and the Company's operating situation to ensurethe orderly, accurate and timely payment of salaries to employees, performed the planned, organized and orderlyresumption of work and production, maintained harmonious labor relations, and demonstrated corporate socialresponsibility. At the same time, for constant changes in the market environment and huge uncertainties, theCompany strengthened its sales strategy orientation for all employees, formulated the special sales incentivepolicy, and encouraged employees to further enhance their confidence and morale in product sales, extensivelyexplored the market of home appliances, fully excavated sales channels, and strove for better sales performance.In addition, the Company continued to pump money into scientific and technological personnel and R&Dtechnological breakthroughs, gave full play to the guiding and incentive role of scientific and technologicalrewards in innovation development and talent gathering, and provided solid support for the vast number ofscientific and technological R&D personnel to accelerate the pace of innovation.
3. Training plan
In 2020, the Company continued to increase independent training of innovative talents, deepened core businesssupport, built smart learning organizations, created an enabling ecosystem for vocational education, accelerated
the supply of talents for the transformation of innovative achievements, and promoted high-quality developmentof the Company.(I) Increasing independent training of innovative talentsTalent is the key to innovation. The Company has always adhered to the principle of "focusing on the strategiclayout of the Company and adhering to independent training of talents", mastered the initiative of talent training,built a diversified independent training mechanism by setting up a training system independently, strengthened thetraining of innovative talents and realized the supply of high quality talents.
1) Independently training innovative scientific and technological talents
The key to enhancing the independent innovation capability of an enterprise lies in training innovative scientificand technological talents. Campus recruitment is the main channel for the Company to introduce talents.According to the growth path of technical R&D personnel, the Company created the unique "6-1-3" training modefor college students by using "centralized training, project practice and mentor guidance" as the main method toachieve the rapid evolution of innovative talents and provide the Company with a steady stream of innovations. In2020, the Group completed the induction training for nearly 5,000 college students and expanded the team ofscientific research talent talents.The special manufacturing practice technical training was conducted to realize the continuous and deep training oftechnical talents and promote the development of employees towards professional talents in high, sophisticatedand cutting-edge fields. In 2020, the Company organized and carried out expert lectures on the cutting-edgetechnology of 22 topics in 12 series, such as smart manufacturing and smart home, to improve the technical levelof technical R&D personnel. In the past three years, the Company has carried out more than 350 professionaltechnical trainings, with the total number of more than 25,000 participants.Gree's talent team has been growing and its talent structure has been upgraded over the years. By the end of 2020,the Company had about 84,000 employees, including 2 leading talents in science and technology innovation underthe National Ten Thousand Talents Program, 3 experts enjoying special allowances from the State Council, 1winner of the Award of Outstanding Contribution to Nanyue, 1 Outstanding Talent under the Guangdong SpecialSupport Program, and 80 high-level talents of Zhuhai, 448 outstanding young talents, 710 scientific andtechnological experts evaluated inside the Company, and more than 7,500 intermediate and senior engineers. TheCompany adhered to the continuous cultivation of innovative talents, so that it has the ability to independentlyinnovate to cope with the ever-changing external environment. Through the cultivation and guarantee of scientificand technological talents, the Company promoted independent scientific and technological innovation and stroveto build Gree into a world research and development center for manufacturing.
2) Cultivating skilled craftsmen for precision manufacturing
In order to adapt to the transformation of the production model to automation and intelligence, the Companyaccelerates the training of applied-skilled talents. In 2020, the Company continued to promote the "skill upgradeand academic qualification upgrade" plan by organizing and performing the training of more than 6,500 skilledworkers throughout the year and completing the training of nearly 200 people to upgrade their academicqualifications. The Company deepened the "2+2" standardization training mode for front-line new employees bycompleting the entry and induction training for new employees.The Company vigorously promoted the spirit of model workers and craftsmen in the new era, and made full use ofthe resource advantages of Guangdong technicians, skilled master studios, and technician workstations to deepen
the Company's high-skilled personnel training mechanism. "Huang Guojun National Mold Technician Studio" wasestablished and 3 new technician studios were newly built. Laboratory testing, pressure vessel welding,air-conditioning after-sales technician workstations were newly built. The Company prepared to build a nationalhigh-skilled talent training base and established a skilled talent training platform to drive the training ofhigh-skilled talents.Internal and external resources were adopted to organize and carry out trainings such as "targeted trainings ofenterprise vocational skills, competitions for vocational skills, new apprenticeship mechanism, right positiontraining and skill upgrade" to broaden the skills training channels and forms and build the collaborative mode fortraining of high-skilled new talents. The Company organized the 2020 labor skill competition called "BuildDreams with Originality", dug "Gree Top 300 Skilled Workers", expanded the "reservoir" of skilled talents,selected and cultivated a group of "high-tech and cutting-edge" skilled talents, and delivered more talents withoutstanding skills to various talent selection projects at the provincial and municipal levels.Up to now, the Group has 36,000 skilled talents, of which more than 8,000 are rated as intermediate and seniortechnicians, 7 have won the title of "Guangdong Provincial Technical Expert", 1 has won the title of "NanyueTechnical Expert", and 5 have won the title of "Zhuhai Municipal Technical Expert", 4 "Zhuhai Municipal PostTechnical Expert Pacesetter", 6 "Zhuhai Municipal Chief Technical Expert", 6 "Zhuhai Municipal Chief TechnicalExpert", and 133 "Zhuhai Special Artisan".
3) Building young management cadres
The Company strove to establish a team of cadres who are passionate, capable, entrepreneurial and ambitious. In2020, the Company organized and carried out the advanced-form training program for newly appointed cadres toimprove the ability of management cadres. The Company also organized and carried out the "Special TrainingCamp of Supervisor Elites" and the "Pilot School of Team Leaders" to select, reserve and cultivate more than 700grassroots management personnel. In order to strengthen the reserve and training of young talents, the Companyorganized and carried out the "2020 Development Plan of Talents with High Potential and Quality" to train morethan 500 company-level personnel and more than 5,500 unit personnel, adding more talents to the development ofthe Company.The Company strengthened the ideological education and military sports training of its middle-level managementcadres by organizing and carrying out the first "Pioneer" training camp for middle-level management cadres. Thetraining camp thoroughly implemented the general secretary's guiding ideologies for the cadres, and made cadreslearn the spirit of the soldiers who are willing to endure hardships and fight through military trainings. Through aseries of activities such as "Discussion on International Situation", "Policy Sharing and Interpretation", and"Education on Honesty and Integrity", the ideological awareness and comprehensive ability of cadres wereimproved and the cohesion and centripetal force of Gree people were further enhanced.(II) Deepening core business support for the CompanyAccording to the Company's annual development goals, focusing on the important areas and topics of theCompany's strategic development, nearly 80 learning projects such as technology and R&D support topics, keythematic training camps, operation management training topics, etc. were organized and implemented, tocomprehensively connect strategy and performance, and support the innovation development of core business.
1) Strongly focusing on the core business of the corporate strategy
In 2020, the training strongly focused on the Company's development plan and strategic goals to deepen learning,
and special trainings such as Gree mode, Gree perfect quality mode and Gree product online marketing wereorganized and carried out. The incubation trainings for emerging businesses such as freezing and refrigerationtechnology, washing technology, and intelligent manufacturing were performed to support the implementation ofthe corporate strategy. Throughout the year, more than 120 business trainings were carried out in the field oftechnology R & D, training more than 8,000 persons. Production trainings on lean production, on-sitemanagement, logistics technology and equipment maintenance were organized and carried out, which not onlyreserved a group of specialized talents in the production field, but also strengthened the practice transformation oftraining projects to promote the implementation of a series of production management projects.
2) Strengthening enterprise management and operation support
In the field of management and operation, oriented to the needs of staff development and position promotion, theCompany solidly carried out special talent training camps such as human resources, process quality, financialmanagement and operation support to meet the needs of the cultivation requirement of various talents for strategicdevelopment of the Company. The Company organized and carried out the 2020 special training camp of projectmanagement talents, and carried out the project manager qualification certification for the first time in whichfinally more than 100 trainees completed the courses and obtained the qualifications. The Company also organizedand carried out quality management training camps, completing the quality management system training, SixSigma training, reliability engineer training, FMEA training, QC team training, quality manager and other specialquality personnel trainings, and reserving and training more than 500 professional quality management personnel.
3) Supporting and serving first-line market sales
Closely following the company's "new retail" marketing innovation model, the Company built a team ofmarketing talents of "Gree Features". The special training on product knowledge of "ProductEmpowerment · Helping Sales" was performed to all employees, with a total of more than 10,000 trainees. 12special trainings on marketing topics such as user research and sales skills were organized and carried out, with atotal of more than 25,000 trainees, to further help employees understand product knowledge, facilitate marketingservice personnel to improve their skills, and better support first-line market sales and services.(III) Building a digital and intelligent learning organizationCombining the characteristics of its talent training, the Company independently built a team of internal lecturersand developed practical teaching courses, to realize the extraction and inheritance of internal experience. TheCompany innovated learning methods, established a learning culture and mechanism for all employees, andcreated a unique learning organization.
1) Creating high-quality lecturers
Internal lecturers are the core force that inherits Gree's excellent corporate culture and wisdom. In order to createhigh-quality lecturers and ensure that everyone is a lecturer, the Company organized and implemented the"Intelligent Manufacturing Inheritance" lecturer development plan to continuously provide high-level andhigh-quality lecturers for the independent training of corporate talents. Up to now, there are more than 200part-time lecturers and 320 quality courses in the Company's headquarters. In 2020, internal lecturers gave morethan 1,200 lessons, with the trainee satisfaction degree of 96%, providing an important guarantee for the trainingof talents at all levels of the Company.In the 2020 Enterprise Trainer Vocational Skills Competition in Guangdong, the Company's internal lecturers LiuFei and Wang Shengli achieved excellent results and won the honorary title of "Guangdong Provincial Technical
Expert", demonstrating the excellent skills and demeanor of Gree lecturers.
2) Emphasizing the extraction and inheritance of Gree experience
In order to inherit Gree's practical experience in enterprise production, operation and management, the Companybuilt an internal knowledge and information sharing system, and steadily promoted the extraction and inheritanceof internal experience. The Company organized and carried out learning programs called "Middle-level cadres onthe platform - Micro classroom for managerial cadres", "Technology experts on the platform - Auditorium fortechnology experts", "Skill elites on the platform - Auditorium for skilled craftsmen" and "Business elites on theplatform - Auditorium for internal lecturers", to better inherit Gree experience and propagate Gree culture. In 2020,the Company organized and carried out more than 120 experience extraction activities, attracting more than 8,000trainees.
3) Innovating training methods to create a learning atmosphere for all employeesThe Company innovated training methods to promote the precipitation and co-creation and sharing of learningresources. It actively responded to the impact of the epidemic by steadily promoting online training. It organizedand carried out the fight against the "epidemic" and online education, with a total of 25,000 trainees. It organizedand carried out the online auditorium for "Space Empowerment · Boosting Development", attracting 5,000participants. It organized and carried out the micro-course competition called "Gathering Micro·Co-Creation",accumulating 500 high-quality micro-courses close to the first-line business.(IV) Creating an enabling ecosystem for vocational educationIn terms of talent training, Gree actively explored the deepening reform of national vocational education, and builtand created a collaborative and open highland for training manufacturing talents.
1) Building a vocational education ecosystem
The Company made full use of the national, provincial and municipal policy advantages to build a newmanufacturing talent training alliance. The Company undertook 18 provincial and municipal skill competitionprojects, built a multi-level skill competition echelon through open and standardized development, and exploredthe establishment of a progressive vocational skill competition mechanism. Technician studios and technicianworkstations were built, and a standard and evaluation system for cultivating skilled talents was created topromote the implementation of manufacturing talent training. The Company prepared to build a national trainingbase for high-skilled talents, created a benchmark for industry-education integration in Guangdong, organized andcarried out the reemployment training for Guangdong provincial labor unions, promoted the upgrading of industrytechnical skills, and build a talent training base for the entire industry chain and the whole industry.
2) Creating a benchmark for vocational education
In 2020, with the care and help of people from the country, provinces and cities, and people from all walks of life,Chairman Dong Mingzhu personally deployed, implemented and promoted the construction of Gree College. GreeCollege is planned and designed with the advanced campus construction concept, which fully integrates Greeculture and green design to create a digital and smart university building community. The construction of thecollege will officially start in early 2021.The College is located in Tangjiawan Town, Zhuhai High-tech Zone, covering an area of 200,000 square meters,adjacent to the "University Town" cluster area of Zhuhai universities and close to Huitong Ancient Village. It has astrong cultural atmosphere and a unique regional environment. The 2021 Government Work Report pointed out
that it is necessary to enhance the adaptability of vocational education, deepen industry-education integration andschool-enterprise cooperation. The construction of Gree College will further deepen the exploration of theeducation mechanism of "vocational-universal integration, industry-education integration, and school-enterprisecooperation", train talents needed for the development of the new manufacturing industry for Gree and the country,and promote industrial transformation and innovative development of the real economy.
4. Labor outsourcing
□ Applicable √ Not applicable
Section X Corporate GovernanceI. Basic conditions of corporate governanceIn strict accordance with the Company Law, Securities Law and other relevant national laws and regulations andthe Guidelines for Standardized Operation of Companies Listed on the Main Board of Shenzhen Stock Exchange,the Company establishes the normative corporate governance structure and the rules of procedure for the GeneralMeeting of Shareholders, Board of Directors and Board of Supervisors, clarifies the responsibilities andauthorities in decision-making, performance and supervision, forms effective division of responsibilities andbalance mechanism, continuously promotes the level of normal operation and safeguards the interests of investorsand the Company.The corporate governance conforms to the Company Law and requirements of CSRC for governance of listedcompanies.
Great differences exist between the actual corporate governance and the normative document related to listed company governancepublished by the CSRC
□ Yes √ No
No great differences exist between the actual corporate governance and the normative document related to listed companygovernance published by the CSRCII. Independence of the Company relative to the controlling shareholder in the aspects such asbusiness operation, personnel, assets, organization and financeThe Company has a sound corporate governance structure and completely separates from Zhuhai Mingjun as thelargest shareholder in business operation, personnel, assets, organization and finance, and the Company hasindependent and complete business operation and independent management capability.III. Horizontal competition
□ Applicable √ Not applicable
IV. Convening of the annual general meeting of shareholders and interim general meeting ofshareholders during the Report Period
1. General meetings of shareholders during the Report Period
| Session of meeting | Type of meeting | Proportion of participating investors | Date of meeting | Date of disclosure | Disclosure index |
| The first interim general meeting of shareholders for the year of 2020 | Interim general meeting of shareholders | 45.61% | 17 March, 2020 | 18 March, 2020 | The Announcement on Resolutions of the First Interim General Meeting of Shareholders for the Year 2020 and so on on www.cninfo.com.cn |
| 2019 annual general meeting of shareholders | Annual general meeting of shareholders | 46.64% | 1 June, 2020 | 2 June, 2020 | The Announcement on Resolutions of the General Meeting of Shareholders for the Year 2019 and so on on www.cninfo.com.cn |
| The Second Interim General Meeting of Shareholders for the Year 2020 | Interim general meeting of shareholders | 47.43% | 2 November, 2020 | 3 November, 2020 | The Announcement on Resolutions of the Second Interim General Meeting of Shareholders for the Year 2020 and so on on www.cninfo.com.cn |
2. Convening of an interim general meeting of shareholders requested by the preferred shareholders whosevoting rights have been restored
□ Applicable √ Not applicable
V. Performance of duties by independent directors during the Report Period
1. Attendance of independent directors at meetings of the Board of Directors and general meetings ofshareholders
| Attendance of independent directors at meetings of the Board of Directors and general meetings of shareholders | |||||||
| Name of independent director | Number of meetings of the Board of Directors requiring attendance in the Report Period | Times of attending meetings of the Board of Directors on the field | Times of attending meetings of the Board of Directors in the way of communication | Times of attending meetings of the Board of Directors by entrusting | Times of absence from meetings of the Board of Directors | Failed to personally attend the meetings of the Board of Directors for two consecutive times | Times of attending the general meetings of Shareholders |
| Liu Shuwei | 10 | 1 | 9 | 0 | 0 | No | 3 |
| Xing Ziwen | 10 | 1 | 9 | 0 | 0 | No | 3 |
| Wang Xiaohua | 10 | 0 | 10 | 0 | 0 | No | 3 |
2. Objection raised by independent directors to relevant issues of the Company
Independent directors raised objection to relevant issues of the Company
□ Yes √ No
The independent directors didn't raise any objection to relevant issues of the Company.
3. Other descriptions for performance of duties by independent directors
Whether the relevant suggestions on the Company by independent directors were adopted
√ Yes □ No
Description about the relevant suggestions on the Company by independent directors that were adopted or not adopted
Within the Report Period, the independent directors of the Company were able to act in maintaining the bestinterest of the Company and its shareholders, faithfully perform their own duties in accordance with the relevantprovisions, attend the meetings of the Board of Directors, review and discuss various proposals carefully, fullyexpress their suggestions and opinions for the operation and management of the Company, play an active role inmaking effective decisions, improving management level and standardizing business operations by the Board ofDirectors of the Company, and practically safeguarding the interests of minority stock holders.VI. Performance of duties by special committees under the Board of Directors during theReport PeriodIn 2020, the nomination committee nominated two executive candidates to the Company's board of directors aftera thorough investigation.The remuneration and appraisal committee reviewed and approved the Remuneration Distribution Plan forDirectors, Supervisors and Senior Management Personnel for the Year 2020.According to the Rules of Procedure of Audit Committee of the Company, the audit committee conductedcommunication, supervision and check for internal and external audits of the Company:
a. The audit committee carried out full communications with the accounting firm responsible for the annual auditof the Company in respect of audit plan, engagement letter and risk and control, etc.b. Before the annual audit certified public accountants accessed to the site, the audit committee reviewed thepreliminarily prepared financial statements of the Company and held that these statements reflected the presentfinancial position of the Company in all major aspects.c. After the annual audit certified public accountants issued preliminary opinions, the audit committee reviewedthe financial statements of the Company, communicated with the accounting firm in respect of material particularsand significant accounting estimates, audit adjustments and significant accounting policies which might havepotential influence on the financial statements and held that the financial statements of the Company gave a true,accurate and complete view of the whole position of the Company and agreed to prepare the annual report for theyear 2020 on the basis of these financial statements.d. The audit committee reviewed the financial statements for the year 2020 which had been audited by the auditorsand held that these financial statements gave a fair view of the financial position of the Company ended 31December, 2020 and operating results and cash flows for the year 2020 in all major aspects and agreed to submit
them to the board of directors for deliberation.e. The audit committee summarized and evaluated the audit work for this year as done by Union Power CPAs Co.,Ltd. and held that the annual audit certified public accountants performed their audit work in strict accordancewith the Independent Auditing Standards for Chinese Certified Public Accountants and suggested the Companyre-engage Union Power CPAs Co., Ltd. as the audit institution for the year 2021.VII. Work of the Board of SupervisorsThe Board of Supervisors found whether there are risks in the supervision during the Report Period.
□ Yes √ No
The Board of Supervisors had no objection to the supervision during the Report Period.VIII. Appraisal and incentive for senior management personnelWithin the Report Period, the Board of Directors of the Company conducted the performance review of theachievements and performance of duties of the senior management personnel and implemented the assignmentassessment system regarding the working results in ethic, competence, diligence and achievement. The Companyadhered to the principle of rationality, fairness and justice and laid emphasis on combination of material incentiveand spiritual incentive. As for the material incentive, the Company paid attention to reasonably controlling rewardgrade and properly opening the reward gap and emphasized the time and frequency of reward. As for the spiritualincentive, the Company paid attention to combining the corporate objectives with the spirit of dedication, sense ofsocial responsibility and career achievement of the senior management personnel.IX. Internal control
1. Details about major defects found in internal control in the Report Period
□ Yes √ No
2. Internal control self-evaluation report
| Full disclosure date of the internal control evaluation report | 29 April, 2021 |
| Full disclosure index of the internal control evaluation report | www.cninfo.com.cn |
| Proportion of the total amount of unit assets included in the evaluation scope to the total amount of assets in the consolidated financial statements of the Company | 97.00% |
| Proportion of the unit operating income included in the evaluation scope to the unit operating income in the consolidated financial statements of the Company | 98.00% |
| Defect identification standard | ||
| Category | Financial report | Non-financial report |
| Qualitative standard | For details, see the Internal Control Self-evaluation Report of Gree Electric Appliances, Inc. of Zhuhai for the Year 2020 disclosed on www.cninfo.com.cn by the Company on 29 April, 2021. | For details, see the Internal Control Self-evaluation Report of Gree Electric Appliances, Inc. of Zhuhai for the Year 2020 disclosed on www.cninfo.com.cn by the Company on 29 April, 2021. |
| Quantitative standard | For details, see the Internal Control Self-evaluation Report of Gree Electric Appliances, Inc. of Zhuhai for the Year 2020 disclosed on www.cninfo.com.cn by the Company on 29 April, 2021. | For details, see the Internal Control Self-evaluation Report of Gree Electric Appliances, Inc. of Zhuhai for the Year 2020 disclosed on www.cninfo.com.cn by the Company on 29 April, 2021. |
| Number of major defects in the financial report | 0 | |
| Number of major defects in the non-financial report | 0 | |
| Number of important defects in the financial report | 0 | |
| Number of important defects in the non-financial report | 0 | |
X. Internal control audit report
√ Applicable □ Not applicable
| Deliberation opinion section in the internal control audit report | |
| We hold that the Company has maintained effective internal control of financial reports in accordance with the Basic Rules for Internal Control of Enterprises and relevant regulations. | |
| Disclosure of internal control audit report | Disclosed |
| Full disclosure date of the internal control audit report | 29 April, 2021 |
| Full disclosure index of the internal control audit report | www.cninfo.com.cn |
| Type of internal control audit report opinions | Standard without reserved opinion |
| Major defects found in the non-financial report | No |
The accounting firm issued the internal control audit report of non-standard opinions
□ Yes √ No
The internal control audit report issued by the accounting firm is consistent with the self-evaluation report opinion of the Board ofDirectors
√ Yes □ No
Section XI Related Information of Corporate BondsWhether the Company has any corporate bonds that have been issued publicly and listed on the stock exchange, and have not becomedue on the approved submission date of the annual report or have become due but have not been not paid in full.No
Section XII Financial Report
I. Audit report
| Audit opinion type | Standard without reserved opinion |
| Signing date of the audit report | 28 April, 2021 |
| Name of the audit institution | Union Power Certified Public Accountants (Special General Partnership) |
| Audit Report Doc No. | Union Power Audit No. (2021) No. 0500040 |
| Name of the certified public accountant | Han Zhenping, Geng Ting |
Audit Report
Union Power Audit No. (2021) No. 0500040All shareholders of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI:
1 Audit opinionWe have audited the financial statements of GREE Electric Appliances, Inc. of Zhuhai (hereinafter referredto as "your company"), including the consolidated and parent company's balance sheets ended 31December, 2020 and consolidated and parent company's income statements, consolidated and parentcompany's cash flow statements and consolidated and parent company's statements of changes inshareholders' equity and notes to financial statements for the year 2020.In our opinion, the accompanying financial statements have been prepared in all material aspects inaccordance with the Accounting Standards for Business Enterprises and fairly reflected the consolidatedand parent company's financial position of your company ended 31 December, 2020 and consolidated andparent company's operating results and cash flows for the year 2020.2 Basis for forming audit opinionsWe have conducted our audit work according to the provisions of Audit Standards for Certified PublicAccountants of China. The part related to "CPA's responsibility for the audit of financial statements" in theaudit report further elaborates our responsibilities under these standards. In accordance with the ChinaCode of Ethics for Certified Public Account, we are independent of your company and performed otherresponsibilities in respect of professional ethics. We believe the audit evidences obtained by us aresufficient and proper and shall provide the basis for expressing our audit opinion.
3 Key audit itemsThe key audit items are the items that are deemed to be the most important ones in the current financialstatement audit according to our professional judgment. The response to these items is based on the overallaudit of the financial statements and the formation of audit opinions. We do not give separate opinions onthese items.
(1) Revenue recognition
| Key audit items | How this item is dealt with in auditing |
| Refer to the description in "Note III. 28" "Note V. 45" and "Note XV. 4" in the financial report. In the 2019 and 2020 consolidated financial statements of your company, the income from selling goods was RMB 168,199,204,400 and RMB 198,153,027,500 respectively, representing a year-on-year decrease of 15.12%. Since the amount is significant and revenue is one of the key business indicators of your company, and whether it is based on real transactions and whether it is included in the appropriate accounting period has a significant impact on the financial statements, we consider revenue recognition as a key audit matter. | 1. We understood the internal control of key financial reports related to revenue recognition, and evaluated the effectiveness of its design and operation; 2. We asked about the revenue recognition policy adopted by the management, checked the sales contract sample, understood the delivery terms of the transaction, evaluated whether the business model was consistent with revenue recognition, evaluated whether the terms of the sales contract comply with industry practices, and whether the revenue recognition accounting policy meets the requirements of the accounting standards for business enterprises; 3. On the basis of audit sampling, we inspected the original supporting documents related to revenue recognition, such as orders, delivery orders, and arrival receipts, to evaluate whether the income actually occurred and whether it was recognized in accordance with the accounting policies; 4. On the basis of audit sampling, we implemented the letter verification procedure, and checked the original documents of the difference in the response letter and the situation of the payment, in order to evaluate the accuracy and authenticity of the occurrence amount of income; 5. We implemented an analysis procedure to analyze different dimensions such as monthly fluctuations, sales regions, product categories, and product gross profit margins to verify the rationality of the transaction; 6. We carried out a cut-off test procedure and expanded the scope of post-period inspections to check whether there was an income inter-period and a sales return to deal with the income inter-period; 7. We also reviewed the adequacy of the information disclosure related to revenue recognition in "Note III. 28", "Note V. 45" and "Note XV. 4" in the financial report. |
(2) Related party relationships and transactions
| Key audit items | How this item is dealt with in auditing |
| Refer to the description in "Note X 4", "Note X. 5", "Note X. 6" and "Note X. 8" in the financial report. In 2020, your company purchased RMB 2,593,248,700 of raw materials, fixed assets and other products and leased RMB 8,886,100 of fixed assets from the related parties, totaling RMB 2,602,134,800; sold RMB 13,424,451,700 of air conditioners, intelligent equipment and other products and leased RMB 131,100 of fixed assets to the related parties, totaling RMB 13,424,582,800. Because of the significant transaction amount of your company's related party, the related party relationships and integrity of its transaction disclosure and the fairness of the related transaction will have a significant impact on the business performance and disclosure of information. Therefore, we regard the related party relationships and their transactions as key audit items. | 1. We understood, evaluated and tested the internal control related to the identification and disclosure of related party relationships and their transactions, and reviewed effectiveness of the corresponding internal control design and implementation; 2. We obtained the management's statement on integrity of the related party relationships and their transactions, obtained a list of related party relationships provided by management, and checked it against the information obtained from other public channels; 3. We checked the major procurement, sales and other contracts to identify whether there was an undisclosed related party, and also obtained the resolution of the board of directors and the resolution of the shareholders' meeting related to the related transaction, checked the permissions and procedure of the related transaction decision, judged the legality and compliance of related transactions, and checked if it was authorized and approved appropriately; 4. We carried out the sampling inspection procedure, checked the corresponding transaction agreement, delivery order, receipt document, sales invoice, purchase invoice, sales receipt and purchase payment voucher, analyzed the purpose of transaction to determine whether the way of obtaining cash flow of the two parties before and after the transaction, amount and risks were substantially changed, and whether the transaction has commercial substance, and combined other audit procedures such as letters to verify authenticity of the related transaction; 5. We compared the sale and purchase prices of the related party with the sale and purchase prices of similar products of the non-related parties or the market prices of similar products, and judged fairness |
| Key audit items | How this item is dealt with in auditing |
| of the related transaction price; 6. We expanded the scope of the post-period test procedure and checked whether there was a sales return; 7. We also reviewed adequacy of the information disclosure related to the related relationship and related transaction in "Note (X) 4", "Note (X) 5", "Note (X) 6" and "(Note X) 8" in the financial report. |
(3) Provision for obsolete stocks
Key audit items
| Key audit items | How this item is dealt with in auditing |
| Refer to the description in "Note III. 13", "Note V. 8" and "Note V. 56" in the financial report. As of 31 December, 2020, the book value of inventory in your company's consolidated balance sheet was RMB 27,879,505,200, wherein the book balance of inventory was RMB 28,376,719,400 and the provision for obsolete stocks was RMB 497,214,200. Confirmation of the provision for obsolete stocks depends on estimation of the net realizable value of the stock. For confirmation of the net realizable value of the stock, the management should estimate the future selling price of stock, cost (e.g., the related cost) to be incurred by the time of completion, selling expenses, and the related tax amount. In consideration of the importance of confirmation of the stocks and provision for obsolete stocks to the consolidated financial statements and the complicated calculation process of provision for obsolete stocks, and major judgments, assumptions and estimates of the management involved when the net realizable value of the stock is determined, there may be error or potential management bias. Therefore, we identified it as a key audit item of your company. | 1. We tested implementation of the internal control related to confirmation of provision for obsolete stocks; 2. We evaluated the important judgments, assumptions and estimates involved in calculation of the net realizable value by management, and also checked the bases and documents for the management to determine items such as the future selling price of stock, cost (e.g., the related cost) to be incurred by the time of completion, selling expenses, and the related tax amount; 3. We carried out the auditing procedures such as checking and recalculation, and particularly we recalculated to determine the net realizable value of the stock according to the related data; 4. We conducted an analytic review of the inventory age to determine whether the corresponding provision for obsolete stocks is adequate; 5. We conducted supervision of inventory taking. During supervision of inventory taking, we focused on authenticity and accuracy of the inventory and use of the inventory, checked for slow moving inventory and defective inventory so as to evaluate adequacy of the provision for obsolete stocks; 6. We also checked the adequacy of the information disclosure related to the provision for obsolete stocks in "Note III. 13", "Note V. 8" and "Note V. 56" in the financial report. |
4 Other informationThe management of your company is responsible for other information. Other information includes theinformation covered in the 2020 annual report of your company, excluding the financial statements and ouraudit reports.Our audit opinions published on financial statements do not cover any other information, and we will notpublish any form of forensic conclusion on other information.In connection with our audit of the financial statements, our responsibility is to read the other informationidentified above, and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit, or otherwise appears to be materiallymisstated.If, based on the work we have performed on the other information that we obtained prior to the date of thisauditor's report, we conclude that there is a material misstatement of the other information, we are requiredto report that fact. We have nothing to report in this regard.5 Responsibilities of management and those charged with governance for financial statementsThe management of your company is responsible for preparing the financial statements in accordance withthe requirements of Accounting Standards to achieve a fair presentation, and for the designing,implementing and maintaining internal control that is necessary to ensure that the financial statements arefree from material misstatements, whether due to frauds or errors.In preparing the financial statements, the management of your company is responsible for accessing yourcompany's ability to continue as a going concern, disclosing matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate your company or to ceaseoperation, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing your company's financial reporting process.6 Auditor's responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with the audit standards will always detect a material misstatement when it exits. Misstatementscan arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.As part of an audit in accordance with the audit standards, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than the one resulting from error, as fraud may involvecollusion, forgery, omissions, misrepresentations, or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate.(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosure made by management of your company.(IV) Conclude on the appropriateness of using the going concern assumption by the management of yourcompany, and conclude, based on the audit evidence obtained, whether a material uncertainty exits relatedto events or conditions that may cast significant doubt on our company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosure in the financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up the date of our auditor's report.However, future events or conditions may cause your company to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements, including thedisclosure, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence for the financial information of your company's entityor business activities so as to express opinions on the financial statements. We are responsible for guiding,supervising and implementing group audits. We assume full responsibility for the audit opinions.We communicate with those charged with governance regarding, among other matters, the planned scopeand timing of the audit and significant audit matters, including any significant deficiencies in internalcontrol that we identify during our audit.We also provide a statement to those charged with governance regarding the observed professional moralrequirements related to independence, and communicate with those charged with governance about all therelationships and other matters that may be reasonably considered to affect our independence, as well as therelated countermeasures (if applicable).In the matters we communicated with those charged with governance, we determine the matters that aremost important to audit of the current period financial statements, thus constituting key audit matters. Wedescribe these matters in the audit report, unless laws and regulations prohibit public disclosure of thesematters, or, in a few cases, we confirm that the matter should not be communicated in the audit report if it isreasonably anticipated that the negative consequence caused by communicating a matter in the audit reportexceeds the benefit generated in terms of public interests.
Union Power Certified Public Accountants(Special General Partnership)
| Union Power Certified Public Accountants (Special General Partnership) | Chinese CPA: | ||
| (engagement partner): | |||
| Han Zhenping | |||
| Chinese CPA: | |||
| Geng Ting | |||
| Wuhan, China | 28 April, 2021 | ||
Consolidated Balance Sheet
| Consolidated Balance Sheet | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | 31 December, 2020 | 1 January, 2020 | 31 December, 2019 |
| Current assets: | ||||
| Monetary capital | V. 1 | 136,413,143,859.81 | 125,400,715,267.64 | 125,400,715,267.64 |
| Lending funds | ||||
| Trading financial assets | V. 2 | 370,820,500.00 | 955,208,583.58 | 955,208,583.58 |
| Derivative financial assets | V. 3 | 285,494,153.96 | 92,392,625.69 | 92,392,625.69 |
| Bills receivable | ||||
| Accounts receivable | V. 4 | 8,738,230,905.44 | 8,439,719,697.00 | 8,513,334,545.08 |
| Receivables financing | V. 5 | 20,973,404,595.49 | 28,226,248,997.12 | 28,226,248,997.12 |
| Prepayment | V. 6 | 3,129,202,003.24 | 2,395,610,555.26 | 2,395,610,555.26 |
| Other receivables | V. 7 | 147,338,547.86 | 159,134,399.10 | 159,134,399.10 |
| Including: Interests receivable | ||||
| Dividends receivable | ||||
| Buying back the sale of financial assets | ||||
| Inventories | V. 8 | 27,879,505,159.39 | 24,084,854,064.29 | 24,084,854,064.29 |
| Contract assets | V. 9 | 78,545,525.60 | 73,614,848.08 | Not applicable |
| Assets held for sale | ||||
| Non-current assets due within one year | V. 10 | 445,397,710.39 | 445,397,710.39 | |
| Other current assets | V. 11 | 15,617,301,913.87 | 23,091,144,216.68 | 23,091,144,216.68 |
| Total current assets | 213,632,987,164.66 | 213,364,040,964.83 | 213,364,040,964.83 | |
| Non-current assets: | ||||
| Disbursement of loans statements and advances | V. 12 | 5,273,805,581.52 | 14,423,786,409.22 | 14,423,786,409.22 |
| Debt investment | ||||
| Other debt investments | V. 13 | 502,202,293.17 | 296,836,282.20 | 296,836,282.20 |
| Long-term receivables | ||||
| Long-term equity investment | V. 14 | 8,119,841,062.14 | 7,064,186,161.29 | 7,064,186,161.29 |
| Other equity instrument investments | V. 15 | 7,788,405,891.47 | 4,644,601,697.51 | 4,644,601,697.51 |
| Other non-current financial assets | V. 16 | 2,003,483,333.33 | 2,003,483,333.33 | 2,003,483,333.33 |
| Investment real estate | V. 17 | 463,420,861.39 | 498,648,691.85 | 498,648,691.85 |
| Fixed assets | V. 18 | 18,990,525,087.94 | 19,121,930,757.04 | 19,121,930,757.04 |
| Construction in Progress | V. 19 | 4,016,082,730.07 | 2,431,051,409.94 | 2,431,051,409.94 |
| Intangible assets | V. 20 | 5,878,288,762.64 | 5,305,541,098.92 | 5,305,541,098.92 |
| Development expenditures | ||||
| Business reputation | V. 21 | 201,902,704.02 | 325,919,390.58 | 325,919,390.58 |
| Long-term deferred expenses | 8,567,923.50 | 2,718,105.35 | 2,718,105.35 | |
| Deferred income tax assets | V. 22 | 11,550,292,201.02 | 12,541,085,078.09 | 12,541,085,078.09 |
| Other non-current assets | V. 23 | 788,118,031.40 | 948,328,035.13 | 948,328,035.13 |
| Total non-current assets | 65,584,936,463.61 | 69,608,116,450.45 | 69,608,116,450.45 | |
| Total assets | 279,217,923,628.27 | 282,972,157,415.28 | 282,972,157,415.28 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
Consolidated Balance Sheet (Continued)
| Consolidated Balance Sheet (Continued) | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | 31 December, 2020 | 1 January, 2020 | 31 December, 2019 |
| Current liabilities: | ||||
| Short-term borrowing | V. 24 | 20,304,384,742.34 | 15,944,176,463.01 | 15,944,176,463.01 |
| Deposits from customers and interbank | V. 25 | 261,006,708.24 | 352,512,311.72 | 352,512,311.72 |
| Loans from other banks | V. 26 | 300,020,250.00 | 1,000,446,666.67 | 1,000,446,666.67 |
| Trading financial liabilities | ||||
| Derivative financial liabilities | ||||
| Bills payable | V. 28 | 21,427,071,950.32 | 25,285,207,843.86 | 25,285,207,843.86 |
| Accounts payable | V. 29 | 31,604,659,166.88 | 41,656,815,752.46 | 41,656,815,752.46 |
| Advances from customers | 8,225,707,662.42 | |||
| Contractual liabilities | V. 30 | 11,678,180,424.65 | 7,311,804,415.54 | Not applicable |
| Financial assets sold for repurchase | V. 27 | 475,033,835.62 | 2,074,500,000.00 | 2,074,500,000.00 |
| Payroll payable | V. 31 | 3,365,355,468.69 | 3,430,968,964.33 | 3,430,968,964.33 |
| Taxes payable | V. 32 | 2,301,355,583.02 | 3,703,779,716.33 | 3,703,779,716.33 |
| Other payables | V. 33 | 2,379,395,717.44 | 2,712,692,973.66 | 2,712,692,973.66 |
| Including: Interests payable | ||||
| Dividends payable | 6,986,645.96 | 707,913.60 | 707,913.60 | |
| Liabilities held for sale | ||||
| Non-current liabilities due within one year | ||||
| Other current liabilities | V. 34 | 64,382,254,283.54 | 66,095,395,102.02 | 65,181,491,855.14 |
| Total current liabilities | 158,478,718,130.74 | 169,568,300,209.60 | 169,568,300,209.60 | |
| Non-current liabilities: | ||||
| Long-term borrowing | V. 35 | 1,860,713,816.09 | 46,885,882.86 | 46,885,882.86 |
| Bonds payable | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Long-term payables | ||||
| Long-term payroll payable | V. 36 | 149,859,788.00 | 141,021,228.00 | 141,021,228.00 |
| Accrued liabilities | ||||
| Deferred income | V. 37 | 437,033,702.46 | 240,504,270.47 | 240,504,270.47 |
| Deferred income tax liabilities | V. 22 | 1,411,111,102.84 | 927,789,301.27 | 927,789,301.27 |
| Other non-current liabilities | ||||
| Total non-current liabilities | 3,858,718,409.39 | 1,356,200,682.60 | 1,356,200,682.60 | |
| Total liabilities | 162,337,436,540.13 | 170,924,500,892.20 | 170,924,500,892.20 | |
| Shareholders’ equity | ||||
| Capital stock | V. 38 | 6,015,730,878.00 | 6,015,730,878.00 | 6,015,730,878.00 |
| Other equity instruments | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Capital reserves | V. 39 | 121,850,280.68 | 93,379,500.71 | 93,379,500.71 |
| Less: Treasury stock | V. 40 | 5,182,273,853.90 | ||
| Other comprehensive income | V. 41 | 7,396,060,195.47 | 6,260,291,981.13 | 6,260,291,981.13 |
| Special reserves | ||||
| Surplus reserve | V. 42 | 3,499,671,556.59 | 3,499,671,556.59 | 3,499,671,556.59 |
| General risk provisions | V. 43 | 497,575,772.26 | 489,855,826.75 | 489,855,826.75 |
| Undistributed profit | V. 44 | 102,841,596,377.66 | 93,794,643,539.49 | 93,794,643,539.49 |
| Equity total attributable to the shareholders of the parent company | 115,190,211,206.76 | 110,153,573,282.67 | 110,153,573,282.67 | |
| Minority equity | 1,690,275,881.38 | 1,894,083,240.41 | 1,894,083,240.41 | |
| Equity total of the shareholders | 116,880,487,088.14 | 112,047,656,523.08 | 112,047,656,523.08 | |
| Total liabilities and shareholders' equity | 279,217,923,628.27 | 282,972,157,415.28 | 282,972,157,415.28 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of accounting department: Liu Yanzi | ||||
Balance Sheet of Parent Company
| Balance Sheet of Parent Company | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | 31 December, 2020 | 1 January, 2020 | 31 December, 2019 |
| Current assets: | ||||
| Monetary capital | 123,828,677,860.41 | 121,906,528,984.14 | 121,906,528,984.14 | |
| Trading financial assets | 370,820,500.00 | 945,701,633.58 | 945,701,633.58 | |
| Derivative financial assets | 76,680,617.45 | |||
| Bills receivable | ||||
| Accounts receivable | XV. 1 | 3,548,791,695.27 | 3,873,270,521.33 | 3,873,270,521.33 |
| Receivables financing | 18,642,206,012.24 | 24,599,149,450.48 | 24,599,149,450.48 | |
| Prepayment | 17,963,607,702.38 | 16,755,065,015.75 | 16,755,065,015.75 | |
| Other receivables | XV. 2 | 2,307,154,984.66 | 2,757,398,837.97 | 2,757,398,837.97 |
| Including: Interests receivable | ||||
| Dividends receivable | 2,932,373.42 | |||
| Inventories | 13,884,110,379.81 | 9,763,530,439.65 | 9,763,530,439.65 | |
| Contract assets | Not applicable | |||
| Assets held for sale | ||||
| Non-current assets due within one year | ||||
| Other current assets | 9,773,701,904.35 | 11,140,701,427.28 | 11,140,701,427.28 | |
| Total current assets | 190,395,751,656.57 | 191,741,346,310.18 | 191,741,346,310.18 | |
| Non-current assets: | ||||
| Debt investment | ||||
| Other debt investments | ||||
| Long-term receivables | ||||
| Long-term equity investment | XV. 3 | 24,619,357,367.01 | 20,224,198,957.34 | 20,224,198,957.34 |
| Other equity instrument investments | 7,505,139,669.97 | 4,271,848,596.31 | 4,271,848,596.31 | |
| Other non-current financial assets | 2,003,483,333.33 | 2,003,483,333.33 | 2,003,483,333.33 | |
| Investment real estate | 22,173,605.79 | 24,475,730.79 | 24,475,730.79 | |
| Fixed assets | 2,706,217,465.90 | 2,965,550,178.74 | 2,965,550,178.74 | |
| Construction in Progress | 570,077,306.55 | 262,245,182.66 | 262,245,182.66 | |
| Intangible assets | 780,743,893.31 | 761,621,258.44 | 761,621,258.44 | |
| Development expenditures | ||||
| Business reputation | ||||
| Long-term deferred expenses | ||||
| Deferred income tax assets | 10,926,393,867.16 | 12,019,079,098.54 | 12,019,079,098.54 | |
| Other non-current assets | 97,653,134.61 | 195,330,890.98 | 195,330,890.98 | |
| Total non-current assets | 49,231,239,643.63 | 42,727,833,227.13 | 42,727,833,227.13 | |
| Total assets | 239,626,991,300.20 | 234,469,179,537.31 | 234,469,179,537.31 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
Balance Sheet of Parent Company (Continued)
| Balance Sheet of Parent Company (Continued) | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | 31 December, 2020 | 1 January, 2020 | 31 December, 2019 |
| Current liabilities: | ||||
| Short-term borrowing | 15,862,663,592.40 | 11,188,890,759.19 | 11,188,890,759.19 | |
| Trading financial liabilities | ||||
| Derivative financial liabilities | ||||
| Bills payable | 19,177,017,664.74 | 23,013,715,200.07 | 23,013,715,200.07 | |
| Accounts payable | 44,365,200,963.00 | 45,097,063,852.05 | 45,097,063,852.05 | |
| Advances from customers | 11,832,592,136.06 | |||
| Contractual liabilities | 14,594,653,911.45 | 10,965,696,063.40 | Not applicable | |
| Payroll payable | 1,306,897,769.56 | 1,398,044,643.25 | 1,398,044,643.25 | |
| Taxes payable | 777,604,964.68 | 1,819,362,036.62 | 1,819,362,036.62 | |
| Other payables | 1,773,107,761.34 | 4,897,515,153.02 | 4,897,515,153.02 | |
| Including: Interests payable | ||||
| Dividends payable | 602,881.87 | 602,881.87 | 602,881.87 | |
| Liabilities held for sale | ||||
| Non-current liabilities due within one year | ||||
| Other current liabilities | 59,737,975,078.14 | 65,242,035,524.53 | 64,375,139,451.87 | |
| Total current liabilities | 157,595,121,705.31 | 163,622,323,232.13 | 163,622,323,232.13 | |
| Non-current liabilities: | ||||
| Long-term borrowing | 143,254,262.42 | |||
| Bonds payable | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Long-term payables | ||||
| Long-term payroll payable | 149,859,788.00 | 141,021,228.00 | 141,021,228.00 | |
| Accrued liabilities | ||||
| Deferred income | 74,814,702.48 | 51,891,300.00 | 51,891,300.00 | |
| Deferred income tax liabilities | 848,906,843.68 | 528,382,787.62 | 528,382,787.62 | |
| Other non-current liabilities | ||||
| Total non-current liabilities | 1,216,835,596.58 | 721,295,315.62 | 721,295,315.62 | |
| Total liabilities | 158,811,957,301.89 | 164,343,618,547.75 | 164,343,618,547.75 | |
| Shareholders’ equity | ||||
| Capital stock | 6,015,730,878.00 | 6,015,730,878.00 | 6,015,730,878.00 | |
| Other equity instruments | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Capital reserves | 184,850,281.86 | 179,564,695.55 | 179,564,695.55 | |
| Less: Treasury stock | 5,182,273,853.90 | |||
| Other comprehensive income | 7,763,409,043.86 | 6,462,024,096.41 | 6,462,024,096.41 | |
| Special reserves | ||||
| Surplus reserve | 3,497,114,024.31 | 3,497,114,024.31 | 3,497,114,024.31 | |
| Undistributed profit | 68,536,203,624.18 | 53,971,127,295.29 | 53,971,127,295.29 | |
| Equity total of the shareholders | 80,815,033,998.31 | 70,125,560,989.56 | 70,125,560,989.56 | |
| Total liabilities and shareholders' equity | 239,626,991,300.20 | 234,469,179,537.31 | 234,469,179,537.31 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
Consolidated Income Statement
| Consolidated Income Statement | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2020 | For the Year 2019 |
| I. Total operating revenues | 170,497,415,702.41 | 200,508,333,611.34 | |
| Including: Operating Revenue | V. 45 | 168,199,204,404.53 | 198,153,027,540.35 |
| Interest revenue | V. 46 | 2,295,972,686.55 | 2,351,471,964.56 |
| Fee and commission income | 2,238,611.33 | 3,834,106.43 | |
| II. Total operating costs | 146,260,681,865.34 | 170,723,573,765.20 | |
| Including: Operating Cost | V. 45 | 124,229,033,680.92 | 143,499,372,581.36 |
| Interest expense | V. 46 | 304,448,121.92 | 110,579,966.36 |
| Handling charges and commission expenses | 516,318.75 | 603,394.43 | |
| Taxes and surcharges | V. 47 | 964,600,693.81 | 1,542,983,748.63 |
| Sales expense | V. 48 | 13,043,241,798.27 | 18,309,812,188.35 |
| Overhead Expense | V. 49 | 3,603,782,803.64 | 3,795,645,600.08 |
| R&D expenses | V. 50 | 6,052,563,108.10 | 5,891,219,715.90 |
| Financial expense | V. 51 | -1,937,504,660.07 | -2,426,643,429.91 |
| Including: Interest expense | 1,088,369,394.87 | 1,598,276,258.59 | |
| Interest revenue | 3,708,312,903.06 | 3,698,387,243.32 | |
| Add: Other incomes | V. 52 | 1,164,120,111.04 | 936,148,644.87 |
| Income from investments (losses expressed with "-") | V. 53 | 713,010,071.67 | -226,634,780.62 |
| Including: Investment incomes from joint ventures or associates | 35,314,343.21 | -20,983,248.83 | |
| Income from derecognition of financial assets measured at amortization costs | |||
| Income from changes in fair value (losses expressed with "-") | V. 54 | 200,153,472.05 | 228,264,067.88 |
| Credit impairment losses (losses expressed with "-") | V. 55 | 192,824,692.53 | -279,448,586.27 |
| Asset impairment losses (losses expressed with "-") | V. 56 | -466,270,321.67 | -842,893,299.94 |
| Income from disposal of assets (losses expressed with "-") | V. 57 | 2,945,975.01 | 4,911,230.34 |
| III. Operating profit (losses expressed with "-") | 26,043,517,837.70 | 29,605,107,122.40 | |
| Add: Non-operating revenues | V. 58 | 287,160,721.97 | 345,706,663.13 |
| Less: Non-operating expenses | V. 59 | 21,741,130.88 | 598,106,556.83 |
| IV. Total profit (total losses expressed with "-") | 26,308,937,428.79 | 29,352,707,228.70 | |
| Less: Income tax expenses | V. 60 | 4,029,695,233.52 | 4,525,463,624.73 |
| V. Net profit (net loss expressed with "-") | 22,279,242,195.27 | 24,827,243,603.97 | |
| (I) Classification by business sustainability | |||
| 1. Continuous operating net profit (net loss expressed with "-") | 22,279,523,503.64 | 24,827,761,617.47 | |
| 2. Discontinued operation net profit (net loss expressed with "-") | -281,308.37 | -518,013.50 | |
| (II) Classification by ownership | |||
| 1. Net profits attributable to shareholders of the parent company ("-" stands for net losses) | 22,175,108,137.32 | 24,696,641,368.84 | |
| 2. Minority shareholders' gains and losses ("-" stands for net losses) | 104,134,057.95 | 130,602,235.13 | |
| VI. Net of tax of other comprehensive income | V. 41 | 1,135,981,683.99 | 6,880,143,079.03 |
| (I) Net of tax of other comprehensive income attributable shareholders of the parent company | 1,135,768,214.34 | 6,880,538,494.36 | |
| 1. Other comprehensive income which cannot be reclassified into profits and losses | 1,242,966,688.50 | 6,811,462,395.19 | |
| (1) Changes arising from remeasurement of the defined benefit plan | -6,851,653.00 | -8,029,478.00 | |
| (2) Other comprehensive income which cannot be transferred to profit or loss under the equity method | 215,136,201.85 | 4,784,432,411.50 | |
| (3) Changes in fair value of other equity instrument investments | 1,034,682,139.65 | 2,035,059,461.69 | |
| (4) Changes in fair value of the company's own credit risk | |||
| (5) Others | |||
| 2. Other comprehensive income which will be reclassified into profits and losses in the future | -107,198,474.16 | 69,076,099.17 | |
| (1) Other comprehensive income that can be transferred to profit or loss under the equity method | -182,758.17 | 4,536.91 | |
| (2) Changes in fair value of other debt investments | -1,862,050.54 | 9,498,573.66 | |
| (3) Amount of financial assets reclassified and included into other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Cash flow hedge reserve | 13,739,102.50 | 10,465,879.70 | |
| (6) Difference arising from translation of financial statements in foreign currency | -118,892,767.95 | 49,107,108.90 | |
(II) Net of tax of other comprehensive income attributable to minority shareholders
| (II) Net of tax of other comprehensive income attributable to minority shareholders | 213,469.65 | -395,415.33 | |
| VII. Total comprehensive income | 23,415,223,879.26 | 31,707,386,683.00 | |
| (I) Total comprehensive income attributable to shareholders of the parent company | 23,310,876,351.66 | 31,577,179,863.20 | |
| (II) Total comprehensive income attributable to minority shareholders | 104,347,527.60 | 130,206,819.80 | |
| VIII. Earnings per share: | XVI. 2 | ||
| (I) Basic earnings per share (Yuan per Share) | 3.71 | 4.11 | |
| (II) Diluted earnings per share (Yuan per Share) | 3.71 | 4.11 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
Income Statement of Parent Company
| Income Statement of Parent Company | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2020 | For the Year 2019 |
| I. Operating revenues | XV. 4 | 107,841,790,174.49 | 136,219,366,183.61 |
| Less: Operating Cost | XV. 4 | 76,008,352,345.28 | 98,709,058,850.15 |
| Taxes and surcharges | 174,392,631.24 | 594,645,728.21 | |
| Sales expense | 11,169,691,825.61 | 17,663,837,022.22 | |
| Overhead Expense | 808,715,696.48 | 963,036,368.05 | |
| R&D expenses | 4,811,036,302.94 | 4,450,053,310.36 | |
| Financial expense | -2,919,245,870.62 | -3,740,059,339.22 | |
| Including: Interest expense | 840,469,134.14 | 792,553,518.40 | |
| Interest revenue | 4,434,457,504.91 | 4,022,458,638.70 | |
| Add: Other incomes | 233,757,468.48 | 104,241,039.06 | |
| Income from investments (losses expressed with "-") | XV. 5 | 12,402,627,036.29 | 4,621,766,925.83 |
| Including: Investment incomes from joint ventures or associates | -12,168,894.57 | -20,983,248.83 | |
| Income from derecognition of financial assets measured at amortization costs | |||
| Income from net exposure hedging (losses expressed with "-") | |||
| Income from changes in fair value (losses expressed with "-") | 56,685,742.93 | -6,160,581.57 | |
| Credit impairment losses (losses expressed with "-") | 2,282,469.02 | -116,414,495.32 | |
| Asset impairment losses (losses expressed with "-") | -178,340,890.13 | -788,564,505.35 | |
| Income from disposal of assets (losses expressed with "-") | 1,733,177.13 | 2,293,132.37 | |
| II. Operating profit (losses expressed with "-") | 30,307,592,247.28 | 21,395,955,758.86 | |
| Add: Non-operating revenues | 46,252,800.73 | 42,197,397.49 | |
| Less: Non-operating expenses | 9,176,432.87 | 561,145,018.76 | |
| III. Total profit (total losses expressed with "-") | 30,344,668,615.14 | 20,877,008,137.59 | |
| Less: Income tax expenses | 2,659,156,932.61 | 2,394,694,613.25 | |
| IV. Net profit (net loss expressed with "-") | 27,685,511,682.53 | 18,482,313,524.34 | |
| (I) Net profit from continuing operations (net loss expressed with "-") | 27,685,511,682.53 | 18,482,313,524.34 | |
| (II) Net profit from discontinued operations (net loss expressed with "-") | |||
| V. Net of tax of other comprehensive income | 1,301,384,947.45 | 6,861,621,096.02 | |
| (I) Other comprehensive income not to be reclassified to profit or loss | 1,294,557,343.46 | 6,835,662,576.38 | |
| 1. Changes arising from remeasurement of the defined benefit plan | -6,851,653.00 | -8,029,478.00 | |
| 2. Other comprehensive income which cannot be transferred to profit or loss under the equity method | 215,136,201.85 | 4,784,432,411.50 | |
| 3. Changes in fair value of other equity instrument investments | 1,086,272,794.61 | 2,059,259,642.88 | |
| 4. Changes in fair value of the company's own credit risk | |||
| 5. Others | |||
| (II) Other comprehensive income to be reclassified to profit or loss | 6,827,603.99 | 25,958,519.64 | |
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | -182,758.17 | 4,536.91 | |
| 2. Changes in fair value of other debt investments | -6,728,740.34 | 15,488,103.03 | |
| 3. Amount of financial assets reclassified and included into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedge reserve | 13,739,102.50 | 10,465,879.70 | |
| 6. Difference arising from translation of financial statements in foreign currency | |||
| 7. Others | |||
| VI. Total comprehensive income | 28,986,896,629.98 | 25,343,934,620.36 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
Consolidated Cash Flow Statement
| Consolidated Cash Flow Statement | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||
| Item | Note | For the Year 2020 | For the Year 2019 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 155,890,384,313.86 | 166,387,697,953.52 | |
| Net increase in deposits and due from banks | -92,506,750.32 | 31,898,181.64 | |
| Net increase in borrowings from central bank | |||
| Net increase in placements from other financial institutions | -700,000,000.00 | 1,000,000,000.00 | |
| Cash received from interests, fees and commissions | 1,137,265,615.92 | 1,051,389,792.25 | |
| Net increase in placements from other financial institutions | |||
| Net increase in repurchase business capital | 475,000,000.00 | 2,074,500,000.00 | |
| Refund of tax and levies | 2,484,293,128.44 | 1,854,373,548.43 | |
| Other cash received relating to operating activities | V 61. (1) | 4,698,328,013.32 | 2,796,063,838.34 |
| Sub-total of cash inflows from operating activities | 163,892,764,321.22 | 175,195,923,314.18 | |
| Cash payments for goods acquired and services received | 121,793,121,343.62 | 94,214,771,389.83 | |
| Net increase in loans and advances to customers | -9,091,377,401.54 | 7,529,473,836.40 | |
| Net increase in deposits with central bank and other financial institutions | -976,192,487.64 | -31,341,719.47 | |
| Net increase in lending funds | |||
| Cash paid for interests, fees and commissions | 312,753,420.49 | 103,327,387.96 | |
| Cash paid to and on behalf of employees | 8,901,277,136.77 | 8,831,213,736.01 | |
| Payments of all types of taxes | 8,184,052,900.55 | 15,128,311,796.96 | |
| Other cash paid relating to operating activities | V 61. (2) | 15,530,492,099.81 | 21,526,452,792.90 |
| Sub-total of cash outflows from operating activities | 144,654,127,012.06 | 147,302,209,220.59 | |
| Net cash flows from operating activities | 19,238,637,309.16 | 27,893,714,093.59 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 9,520,639,757.24 | 3,130,974,036.48 | |
| Cash received from return of investments | 305,411,730.38 | 426,919,989.41 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 6,631,829.54 | 9,614,513.94 | |
| Net cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | V 61. (3) | 4,322,649,440.42 | 4,878,025,331.18 |
| Sub-total of cash inflows from investing activities | 14,155,332,757.58 | 8,445,533,871.01 | |
| Cash paid for purchase and construction of fixed assets, intangible assets and other. long-term assets | 4,528,646,805.03 | 4,713,187,965.97 | |
| Cash paid for investments | 3,561,055,956.90 | 7,192,756,039.01 | |
| Net cash paid for acquisition of subsidiaries and other business units | V 62. (2) | 425,875,376.81 | 774,183,781.48 |
| Other cash paid relating to investing activities | V 61. (4) | 5,542,024,468.66 | 7,040,454,685.32 |
| Sub-total of cash outflows from investing activities | 14,057,602,607.40 | 19,720,582,471.78 | |
| Net Cash Flow from Investment Activities | 97,730,150.18 | -11,275,048,600.77 | |
| III. Cash flows from financing activities: | |||
| Cash received from absorbing investment | 14,670,000.00 | 326,850,000.00 | |
| Including: Cash received from minority shareholder investment by subsidiary | 14,670,000.00 | 326,850,000.00 | |
| Cash received from borrowings | 37,599,791,534.80 | 21,268,257,923.68 | |
| Other cash received relating to financing activities | |||
| Sub-total of cash inflows from financing activities | 37,614,461,534.80 | 21,595,107,923.68 | |
| Cash repayments of amounts borrowed | 29,475,431,119.54 | 27,657,703,656.20 | |
| Cash paid for dividend and profit distribution or interest payment | 14,236,014,439.83 | 13,159,380,388.41 | |
| Including: Dividends and profits paid to minority shareholders by subsidiaries | 411,607,065.23 | ||
| Other cash paid relating to financing activities | V 61. (5) | 15,014,513,473.63 | |
| Sub-total of cash outflows from financing activities | 58,725,959,033.00 | 40,817,084,044.61 | |
| Net Cash Flow from Financing Activities | -21,111,497,498.20 | -19,221,976,120.93 | |
IV. Effect of foreign exchange rate changes on cash and cash equivalents
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -372,392,144.48 | 203,761,625.26 | |
| V. Net increase in cash and cash equivalents | -2,147,522,183.34 | -2,399,549,002.85 | |
| Add: Beginning balance of cash and cash equivalents | 26,372,571,821.49 | 28,772,120,824.34 | |
| VI. Ending balance of cash and cash equivalents | 24,225,049,638.15 | 26,372,571,821.49 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
Cash Flow Statements of Parent Company
| Cash Flow Statements of Parent Company | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2020 | For the Year 2019 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 93,602,519,755.19 | 112,341,680,710.73 | |
| Refund of tax and levies | 2,108,659,339.52 | 1,465,166,072.58 | |
| Other cash received relating to operating activities | 35,640,698,959.97 | 51,510,498,359.13 | |
| Sub-total of cash inflows from operating activities | 131,351,878,054.68 | 165,317,345,142.44 | |
| Cash payments for goods acquired and services received | 88,931,239,009.32 | 105,224,849,035.82 | |
| Cash paid to and on behalf of employees | 3,521,483,800.64 | 3,453,320,937.66 | |
| Payments of all types of taxes | 3,915,413,842.97 | 9,443,887,671.06 | |
| Other cash paid relating to operating activities | 18,625,111,285.52 | 19,406,931,680.64 | |
| Sub-total of cash outflows from operating activities | 114,993,247,938.45 | 137,528,989,325.18 | |
| Net cash flows from operating activities | 16,358,630,116.23 | 27,788,355,817.26 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 1,154,839,757.24 | 4,302,974,036.48 | |
| Cash received from return of investments | 3,616,084,603.45 | 201,582,776.58 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,552,696.74 | 3,947,642.20 | |
| Net cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | 5,376,248,383.05 | 7,274,898,788.81 | |
| Sub-total of cash inflows from investing activities | 10,149,725,440.48 | 11,783,403,244.07 | |
| Cash paid for purchase and construction of fixed assets, intangible assets and other. long-term assets | 806,766,396.66 | 1,390,377,306.14 | |
| Cash paid for investments | 6,623,118,162.38 | 8,174,203,389.69 | |
| Net cash paid for acquisition of subsidiaries and other business units | 150,000,000.00 | ||
| Other cash paid relating to investing activities | 8,155,280,838.65 | 14,656,152,091.36 | |
| Sub-total of cash outflows from investing activities | 15,735,165,397.69 | 24,220,732,787.19 | |
| Net Cash Flow from Investment Activities | -5,585,439,957.21 | -12,437,329,543.12 | |
| III. Cash flows from financing activities: | |||
| Cash received from absorbing investment | |||
| Cash received from borrowings | 29,395,517,581.94 | 16,640,128,940.00 | |
| Other cash received relating to financing activities | 878,448,565.19 | 3,805,792,927.96 | |
| Sub-total of cash inflows from financing activities | 30,273,966,147.13 | 20,445,921,867.96 | |
| Cash repayments of amounts borrowed | 24,568,052,850.00 | 23,372,991,990.00 | |
| Cash paid for dividend and profit distribution or interest payment | 13,662,321,384.07 | 13,031,345,175.19 | |
| Other cash paid relating to financing activities | 15,508,240,629.89 | 2,041,863,709.67 | |
| Sub-total of cash outflows from financing activities | 53,738,614,863.96 | 38,446,200,874.86 | |
| Net Cash Flow from Financing Activities | -23,464,648,716.83 | -18,000,279,006.90 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -548,526,629.60 | 693,156,236.38 | |
| V. Net increase in cash and cash equivalents | -13,239,985,187.41 | -1,956,096,496.38 | |
| Add: Beginning balance of cash and cash equivalents | 30,359,765,967.46 | 32,315,862,463.84 | |
| VI. Ending balance of cash and cash equivalents | 17,119,780,780.05 | 30,359,765,967.46 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
Consolidated Statement of Changes in Shareholders' Equity
| Consolidated Statement of Changes in Shareholders' Equity | ||||||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||||||||||||
| Item | For the Year 2020 | |||||||||||||
| Equity attributable to the shareholders of the parent company | Minority equity | Equity total of the shareholders | ||||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserve | General risk provisions | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | ||||||||||||
| 1. Ending balance for the previous year | 6,015,730,878.00 | 93,379,500.71 | 6,260,291,981.13 | 3,499,671,556.59 | 489,855,826.75 | 93,794,643,539.49 | 110,153,573,282.67 | 1,894,083,240.41 | 112,047,656,523.08 | |||||
| Add: Changes in accounting policies | ||||||||||||||
| Early error correction | ||||||||||||||
| Business combination involving enterprises under common control | ||||||||||||||
| 2. Beginning balance for the current year | 6,015,730,878.00 | 93,379,500.71 | 6,260,291,981.13 | 3,499,671,556.59 | 489,855,826.75 | 93,794,643,539.49 | 110,153,573,282.67 | 1,894,083,240.41 | 112,047,656,523.08 | |||||
| III. Increase or decrease in the current year (decrease expressed with "-") | 28,470,779.97 | 5,182,273,853.90 | 1,135,768,214.34 | 7,719,945.51 | 9,046,952,838.17 | 5,036,637,924.09 | -203,807,359.03 | 4,832,830,565.06 | ||||||
| (I) Total comprehensive income | 1,135,768,214.34 | 22,175,108,137.32 | 23,310,876,351.66 | 104,347,527.60 | 23,415,223,879.26 | |||||||||
| (2) Capital invested by shareholders and capital decrease | 2,966,412.88 | 5,182,273,853.90 | -5,179,307,441.02 | 128,956,545.69 | -5,050,350,895.33 | |||||||||
| 1. Ordinary stocks invested by shareholders | 14,670,000.00 | 14,670,000.00 | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | ||||||||||||||
| 4. Others | 2,966,412.88 | 5,182,273,853.90 | -5,179,307,441.02 | 114,286,545.69 | -5,065,020,895.33 | |||||||||
| (III) Profit distribution | 7,719,945.51 | -13,148,143,215.11 | -13,140,423,269.60 | -411,607,065.23 | -13,552,030,334.83 | |||||||||
| 1. Appropriation to surplus reserves | ||||||||||||||
| 2. Appropriation to general risk provisions | 7,719,945.51 | -7,719,945.51 | ||||||||||||
| 3. Allocation to shareholders | -13,140,423,269.60 | -13,140,423,269.60 | -411,607,065.23 | -13,552,030,334.83 | ||||||||||
| 4. Others | ||||||||||||||
| (4) Internal carry-over of shareholders' equity | 25,504,367.09 | 19,987,915.96 | 45,492,283.05 | -25,504,367.09 | 19,987,915.96 | |||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | ||||||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | ||||||||||||||
| 3. Surplus reserves for making up losses | ||||||||||||||
| 4. Defined benefit plan change carried over into retained earnings | ||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | 19,987,915.96 | 19,987,915.96 | 19,987,915.96 | |||||||||||
| 6. Others | 25,504,367.09 | 25,504,367.09 | -25,504,367.09 | |||||||||||
| (V) Appropriative reserve | ||||||||||||||
| 1. Amount withdrawn for the period | ||||||||||||||
| 2. Amount used for the period | ||||||||||||||
| (VI) Others | ||||||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 121,850,280.68 | 5,182,273,853.90 | 7,396,060,195.47 | 3,499,671,556.59 | 497,575,772.26 | 102,841,596,377.66 | 115,190,211,206.76 | 1,690,275,881.38 | 116,880,487,088.14 | ||||
| Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||||||||||||
Consolidated Statement of Changes in Shareholders' Equity (Continued)
| Consolidated Statement of Changes in Shareholders' Equity (Continued) | ||||||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||||||||||||
| Item | For the Year 2019 | |||||||||||||
| Equity attributable to the shareholders of the parent company | Minority equity | Equity total of the shareholders | ||||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserve | General risk provisions | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | ||||||||||||
| 1. Ending balance for the previous year | 6,015,730,878.00 | 93,379,500.71 | -550,806,051.51 | 3,499,671,556.59 | 329,417,571.48 | 81,939,701,613.83 | 91,327,095,069.10 | 1,387,616,658.36 | 92,714,711,727.46 | |||||
| Add: Changes in accounting policies | -69,440,461.72 | -48,226,344.11 | -117,666,805.83 | -117,666,805.83 | ||||||||||
| Early error correction | ||||||||||||||
| Business combination involving enterprises under common control | ||||||||||||||
| 2. Beginning balance for the current year | 6,015,730,878.00 | 93,379,500.71 | -620,246,513.23 | 3,499,671,556.59 | 329,417,571.48 | 81,891,475,269.72 | 91,209,428,263.27 | 1,387,616,658.36 | 92,597,044,921.63 | |||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | 6,880,538,494.36 | 160,438,255.27 | 11,903,168,269.77 | 18,944,145,019.40 | 506,466,582.05 | 19,450,611,601.45 | ||||||||
| (I) Total comprehensive income | 6,880,538,494.36 | 24,696,641,368.84 | 31,577,179,863.20 | 130,206,819.80 | 31,707,386,683.00 | |||||||||
| (2) Capital invested by shareholders and capital decrease | 395,965,448.59 | 395,965,448.59 | ||||||||||||
| 1. Ordinary stocks invested by shareholders | 326,850,000.00 | 326,850,000.00 | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | ||||||||||||||
| 4. Others | 69,115,448.59 | 69,115,448.59 | ||||||||||||
| (III) Profit distribution | 160,438,255.27 | -12,793,473,099.07 | -12,633,034,843.80 | -19,705,686.34 | -12,652,740,530.14 | |||||||||
| 1. Appropriation to surplus reserves | ||||||||||||||
| 2. Appropriation to general risk provisions | 160,438,255.27 | -160,438,255.27 | ||||||||||||
| 3. Allocation to shareholders | -12,633,034,843.80 | -12,633,034,843.80 | -19,705,686.34 | -12,652,740,530.14 | ||||||||||
| 4. Others | ||||||||||||||
| (4) Internal carry-over of shareholders' equity | ||||||||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | ||||||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | ||||||||||||||
| 3. Surplus reserves for making up losses | ||||||||||||||
| 4. Defined benefit plan change carried over into retained earnings | ||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||||
| (V) Appropriative reserve | ||||||||||||||
| 1. Amount withdrawn for the period | ||||||||||||||
| 2. Amount used for the period | ||||||||||||||
| (VI) Others | ||||||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 93,379,500.71 | 6,260,291,981.13 | 3,499,671,556.59 | 489,855,826.75 | 93,794,643,539.49 | 110,153,573,282.67 | 1,894,083,240.41 | 112,047,656,523.08 | |||||
| Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||||||||||||
Statement of Changes in Shareholders' Equity of Parent Company
| Statement of Changes in Shareholders' Equity of Parent Company | |||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||||||||||
| Item | For the Year 2020 | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserve | Undistributed profit | Equity total of the shareholders | |||
| Preferred stock | Perpetual bond | Others | |||||||||
| 1. Ending balance for the previous year | 6,015,730,878.00 | 179,564,695.55 | 6,462,024,096.41 | 3,497,114,024.31 | 53,971,127,295.29 | 70,125,560,989.56 | |||||
| Add: Changes in accounting policies | |||||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| 2. Beginning balance for the current year | 6,015,730,878.00 | 179,564,695.55 | 6,462,024,096.41 | 3,497,114,024.31 | 53,971,127,295.29 | 70,125,560,989.56 | |||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | 5,285,586.31 | 5,182,273,853.90 | 1,301,384,947.45 | 14,565,076,328.89 | 10,689,473,008.75 | ||||||
| (I) Total comprehensive income | 1,301,384,947.45 | 27,685,511,682.53 | 28,986,896,629.98 | ||||||||
| (2) Capital invested by shareholders and capital decrease | 5,285,586.31 | 5,182,273,853.90 | -5,176,988,267.59 | ||||||||
| 1. Ordinary stocks invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | |||||||||||
| 4. Others | 5,285,586.31 | 5,182,273,853.90 | -5,176,988,267.59 | ||||||||
| (III) Profit distribution | -13,140,423,269.60 | -13,140,423,269.60 | |||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Allocation to shareholders | -13,140,423,269.60 | -13,140,423,269.60 | |||||||||
| 3. Others | |||||||||||
| (4) Internal carry-over of shareholders' equity | 19,987,915.96 | 19,987,915.96 | |||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Defined benefit plan change carried over into retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | 19,987,915.96 | 19,987,915.96 | |||||||||
| 6. Others | |||||||||||
| (V) Appropriative reserve | |||||||||||
| 1. Amount withdrawn for the period | |||||||||||
| 2. Amount used for the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 184,850,281.86 | 5,182,273,853.90 | 7,763,409,043.86 | 3,497,114,024.31 | 68,536,203,624.18 | 80,815,033,998.31 | ||||
| Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||||||||||
Statement of Changes in Shareholders' Equity of Parent Company (Continued)
| Statement of Changes in Shareholders' Equity of Parent Company (Continued) | |||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||||||||||
| Item | For the Year 2019 | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserve | Undistributed profit | Equity total of the shareholders | |||
| Preferred stock | Perpetual bond | Others | |||||||||
| 1. Ending balance for the previous year | 6,015,730,878.00 | 179,564,695.55 | -330,283,919.33 | 3,497,114,024.31 | 48,123,803,614.75 | 57,485,929,293.28 | |||||
| Add: Changes in accounting policies | -69,313,080.28 | -1,955,000.00 | -71,268,080.28 | ||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| 2. Beginning balance for the current year | 6,015,730,878.00 | 179,564,695.55 | -399,596,999.61 | 3,497,114,024.31 | 48,121,848,614.75 | 57,414,661,213.00 | |||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | 6,861,621,096.02 | 5,849,278,680.54 | 12,710,899,776.56 | ||||||||
| (I) Total comprehensive income | 6,861,621,096.02 | 18,482,313,524.34 | 25,343,934,620.36 | ||||||||
| (2) Capital invested by shareholders and capital decrease | |||||||||||
| 1. Ordinary stocks invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | |||||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -12,633,034,843.80 | -12,633,034,843.80 | |||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Allocation to shareholders | -12,633,034,843.80 | -12,633,034,843.80 | |||||||||
| 3. Others | |||||||||||
| (4) Internal carry-over of shareholders' equity | |||||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Defined benefit plan change carried over into retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Appropriative reserve | |||||||||||
| 1. Amount withdrawn for the period | |||||||||||
| 2. Amount used for the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 179,564,695.55 | 6,462,024,096.41 | 3,497,114,024.31 | 53,971,127,295.29 | 70,125,560,989.56 | |||||
| Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||||||||||
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAINotes to Financial Statements for the Year 2020I. Basic information of the CompanyGree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as "the Company") was established in December,1989, with the unified social credit code 91440400192548256N.The registered capital and equity of the Company was RMB 6,015,730,878.00 by the end of 31 December, 2020.For the specific equity, see Note (V) 38.
1. Registered address, organizational form and address of the CompanyOrganizational form of the Company: joint stock limited companyRegistered address and headquarters office address of the Company: Jinji West Road, Qianshan, Zhuhai City,Guangdong Province.
2. Nature of business and main business activities of the Company
The Company falls in to the household electrical appliance industry and is engaged in production and sales of airconditioners and their accessories, and home appliances and their accessories.
3. Names of the parent company and the ultimate parent companyAs of 31 December, 2020, the Company has no actual controller. For the specific change in the actual controller ofthe Company, see Note (X) 1.
4. Scope of consolidated financial statements of the current period and its changeTotally 120 subsidiaries were incorporated in the scope of the consolidated financial statements by the end of theReport Period. For details, see Note (VII) 1. For the detailed changes to the scope of consolidated financialstatements in the Report Period, see Note (VI).
5. Approved submitter and approved submission date of the financial reportThis financial report was submitted under approval of the Board of Directors of the Company as of 28 April,2021.II. Preparation basis of the financial statements
1. Preparation basis of the financial statements
The Company prepares the financial statements on the basis of a going concern and according to the transactionsand events actually incurred and the disclosure provisions in the Accounting Standards for Business Enterprises -Basic Standards (promulgated by the Ministry of Finance Order No. 33, revised by the Ministry of Finance OrderNo.76) and the specific accounting standards , the Implementation Guide for the Accounting Standards forBusiness Enterprises, the Interpretations of the Accounting Standards for Business Enterprises and otherapplicable regulations promulgated and revised by the Ministry of Finance on and after 15 February, 2006
(collectively referred to as "the Accounting Standards for Business Enterprises"), as well as the Preparation Rulesfor Information Disclosure by Companies Offering Securities to the Public No. 15 - General Provisions onFinancial Reports (2014 Revision) promulgated by China Securities Regulatory Commission ("CSRC").According to the relevant provisions of the Enterprise Accounting Standards, the Company's accounting is basedon the accrual basis. Except for certain financial instruments, the financial statements are measured on the basis ofhistorical cost. If an asset is impaired, the corresponding impairment provision shall be made in accordance withrelevant regulations.
2. Going concern
This financial statement was presented on a going concern basis. The management carefully evaluated factors ofthe Company in the future 12 months commencing from 31 December, 2020 such as the macropolicy risk, marketoperation risk, current and long-term profitability and solvency of the enterprise, financial flexibility, and themanagement's intention of changing the operations policy, and held that there was no event that can generatesignificant influence on the Company's ability to continue as a going concern.III. Major accounting policies and accounting estimatesSpecific accounting policies and accounting estimate suggestions:
The Company and each subsidiary are engaged in production and sales of air conditioners and their accessories,and home appliances and their accessories. The Company has prepared several specific accounting policies andaccounting estimates for transactions and events such as revenue recognition based on the actual productionmanagement characteristics and in accordance with provisions of the related Accounting Standards for BusinessEnterprises. For details, see the detailed description in Note III herein.
1. Statements regarding observance of the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company conform to the requirements of the Accounting Standards forBusiness Enterprises and give a true and complete view of the financial position of the Company on 31 December,2020, and the related information such as operating results and cash flows in the year 2020. Besides, the financialstatements prepared by the Company, in all the major aspects, also conform to the disclosure requirements offinancial statements and their notes in the Preparation Rules for Information Disclosure by Companies OfferingSecurities to the Public No. 15 - General Provisions on Financial Reports revised by the China SecuritiesRegulatory Commission in 2014.
2. Accounting period
Accounting period of the Company includes one year and interim periods. An interim period covers six-month, aquarter and a month. The accounting year of the Company commences on 1 January and ends on 31 December ofeach year.
3. Operating cycle
The normal operating cycle refers to the period from the Company's purchase of assets used for processing toachieving of cash or cash equivalent. The Company regards 12 months as one operating cycle and uses it as the
liquidity classification standard for assets and liabilities.
4. Functional currency
RMB is the functional currency used by the Company. Some subsidiaries of the Company adopt currencies otherthan Renminbi as the functional currency.
5. Accounting treatment of business combination involving enterprises under common control andbusiness combination not involving enterprises under common controlBusiness combination refers to the transaction or event of combining two or more independent enterprises to forma reporting entity. Business combination is classified into business combination involving enterprises undercommon control and business combination not involving enterprises under common control.
(1) Business combination involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of thecombining enterprises are ultimately controlled by the same party or parties both before and after the combination,and that control is not transitory. For business combination involving enterprises under common control, the partythat obtains the right to control other enterprises participating in the combination on the combination date is thecombining party, and other enterprises participating in the combination are the combined party. The combinationdate refers to the date on which the combining party actually obtains the right to control the combined party.Where business combination involving enterprises under common control arises from one transaction or equitiesof invested entities under common control are obtained step by step through multiple transactions and thesetransactions belong to a package deal, the Company will recognize the cost of combination according to the shareof carrying amount of net assets obtained for the combined party in the ultimate controlling party's consolidatedfinancial statements on the combination date. The difference between the carrying amount of the considerationpaid for the combination (or total par value of the issued stocks) and the combination cost is adjusted to capitalreserve; if the capital reserve is not sufficient to absorb the difference, any excess is adjusted against retainedearnings.Costs incurred that are attributable to the business combination made by the Company, including intermediarycosts such as the audit fee, legal service charge and appraisal and consultation costs, and other related overheadexpenses are charged to profits or losses in the period in which they are incurred; the transaction expenses directlyattributable to the consideration paid for the combination through issuance of equity instruments are creditedagainst the capital reserve; if the capital reserve is not sufficient, any excess is adjusted against retained earnings;the transaction expenses directly attributable to the consideration paid for the combination through issuance ofdebt instruments are recorded into the initially recognized amount of debt instruments. Where the equities ofinvested entities under common control are obtained step by step through multiple transactions to achievebusiness combination but these transactions do not belong to a package deal, the Company will recognize the costof combination according to the share of carrying amount of net assets to be enjoyed by the combined party afterthe combination in the ultimate controlling party's consolidated financial statements on the combination date. Thedifference between the combination cost and the sum of the carrying amount of long-term equity investments
prior to the combination plus the carrying amount of the consideration newly paid for further acquisition of shareson the date of combination is adjusted to capital reserve (capital premium or capital stock premium); if the capitalreserve is not sufficient to absorb the difference, any excess is adjusted against retained earnings. For the equityinvestment held before the date of combination, accounting treatment is not performed temporarily for othercomprehensive incomes that are accounted using the equity method or recognized using financial instruments andaccounted according to the measurement standard for recognition. When this investment is disposed of,accounting treatment is conducted using the basis the same as that used by the invested entity to directly disposeof relevant assets or liabilities. For other changes in owners' equities other than the net profits/losses, othercomprehensive income and profit distribution in net assets of the invested entity that are recognized because ofaccounting using the equity method, accounting treatment is not conducted temporarily; they shall be transferredto the profits and losses of the current period at the time of disposing of this investment.
(2) Business combination not involving enterprises under common control
A business combination not involving enterprises under common control is a business combination in which all ofthe combining enterprises are not ultimately controlled by the same party or parties both before and after thecombination. For business combination not involving enterprises under common control, the party that obtains theright to control other enterprises participating in the combination on the date of combination is the acquiring party,and other enterprises participating in the combination are the acquired party. The date of acquisition refers to thedate on which the acquiring party actually obtains the right to control the acquired party.For the business combination implemented through one transaction, the cost of business combination refers to thefair value of assets paid, liabilities incurred or assumed and equity securities issued by the Company on the date ofacquisition for obtaining the right to control the acquired party. On the date of acquisition, the assets, liabilitiesand contingent liabilities obtained by the Company from the acquired party are recognized at the fair value.For a business combination realized by two or more transactions of exchange, the accounting treatment for thecombination costs shall be made by distinguishing individual financial statements and consolidated financialstatements:
In the individual financial statements, where the held stocks are accounted using the equity method prior to thedate of acquisition, the cost of combination of the investment is the aggregate of the carrying amount of the equityinvestment of the acquired party held before the date of acquisition and the investment cost newly increased onthe date of acquisition. For other related comprehensive income, accounting treatment is performed duringdisposal of the investment using the basis the same as that used by the invested entity to directly dispose ofrelevant assets or liabilities; the owner's equity that is recognized due to other changes in owners' equities otherthan the net profits/losses, other comprehensive income and profit distribution of the invested entity is accordinglytransferred to the profits and losses of the current period at the time of disposing of this investment. Where theequity investment held before the date of acquisition is recognized using financial instruments and undergoesaccounting treatment according to the measurement standard, the cost of combination of the investment is theaggregate of the fair value of the equity investment recognized according to this standard and the newly increasedinvestment cost. The difference between the fair value of the originally held stocks and the carrying amount andall the cumulative fair value changes originally recorded into other comprehensive income are transferred to the
investment income of the current period.In the consolidated financial statements, the stocks of the acquired party held before the date of acquisition shallbe remeasured based on the fair value of such stocks on the date of acquisition, and the difference between theirfair value and carrying amount shall be charged to the investment income of the current period; where the stocksof the acquired party held before the date of acquisition involve other comprehensive income under accounting ofthe equity method and other changes in owners' equities other than the net profits/losses, other comprehensiveincome and profit distribution, other comprehensive income and other changes in owners' equities concerned withthem shall be transferred to the investment income in the period in which the date of acquisition is included(excluding other comprehensive income arising from changes in the net assets or net liabilities of the benefit planremeasured and redefined by the invested entity). The summation of the fair value of the stocks of the acquiredparty held before the date of acquisition on the date of acquisition and newly increased investment costs on thedate of acquisition shall be the combination cost of the investment.Costs incurred that are attributable to the business combination made by the Company, including intermediarycosts such as the audit fee, legal service charge, and appraisal and consultation costs, and other related overheadexpenses are charged to profits or losses in the period in which they are incurred. The transaction expensesdirectly attributable to the consideration paid for the combination through issuance of equity instruments arecredited against the capital reserve; if the capital reserve is not sufficient, any excess is adjusted against retainedearnings; the transaction expenses directly attributable to the consideration paid for the combination throughissuance of debt instruments are recorded into the initially recognized amount of debt instruments.In the Company, the positive balance between the business combination cost and the fair value of the identifiablenet assets obtained by the Company from the acquired party shall be recognized as business reputation andsubsequently measured after the accumulated provision for impairment is deducted from the cost; the negativebalance between the business combination cost and the fair value of the identifiable net assets obtained by theCompany from the acquired party shall be charged to profits or losses of the current period after being checked.
(3) Principle of judging whether multiple transactions are "a package deal"When the terms and conditions of multiple transactions and the economic impact thereof accord with one or moreof the following cases, usually it indicates that these transactions shall undergo accounting treatment as "apackage deal":
1) These transactions are concluded at the same time or concluded in consideration of mutual influence;
2) only the whole of these transactions can achieve a complete business result;
3) occurrence of one transaction depends on occurrence of at least one of the other transactions;
4) one transaction is not economical when considered separately, but economical when taken into account togetherwith other transactions.
6. Preparation of consolidated financial statements
(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of consolidated financial statements shall be determined on the basis of control. Control
means that the Company owns the power to the invested entity, enjoys variable return by participating relevantactivities of the invested entity, and has the capacity of using the power to the invested entity to affect its returnamount.
(2) Preparation of consolidated financial statements
The consolidated financial statements of the Company are prepared by the Company based on individual financialstatements of the Company and subsidiaries and according to other relevant data. During preparation ofconsolidated financial statements, the accounting policy and accounting period of the Company shall be consistentwith those of subsidiaries, and the inter-company major transactions and balances shall be offset.For the subsidiary added due to business combination involving enterprises under common control in the ReportPeriod, the Company adjusts the amount at the beginning of the period in the consolidated balance sheet,incorporates the revenue, expense and profit of this subsidiary from the beginning of the period for consolidationto the end of the report period into the consolidated profit statement, includes its cash flow into the consolidatedcash flow statement, and adjusts relevant items in the comparative statements; for the subsidiary added due tobusiness combination not involving enterprises under common control, the Company does not adjust the amountat the beginning of the period in the consolidated balance sheet, but only incorporates the revenue, expense andprofit of this subsidiary from the date of acquisition to the end of report period into the consolidated profitstatement and its cash flow into the consolidated cash flow statement.The portion of owners' equity of the subsidiaries that isn't attributable to the Company shall be separatelypresented as the minority shareholders' equity under the owners' equity in the consolidated balance sheet. Theshare of net profits or losses of the subsidiaries in the current period that is attributable to the minorityshareholders' equity shall be presented as the item of "Minority interest income" under the net profit in theconsolidated profit statement. The share of comprehensive income of the subsidiaries in the current period that isattributable to the minority shareholders' equity shall be presented as the item of "Total comprehensive incomeattributable to minority shareholders" under the total comprehensive income in the consolidated profit statement.Where the losses of a subsidiary undertaken by minority shareholders exceed the share enjoyed by minorityshareholders in the owners' equities of this subsidiary at the beginning of the period, the balance shall be stilladjusted against the minority shareholders' equity.For acquisition of the subsidiary's stocks owned by minority shareholders thereof, in the consolidated financialstatements, the difference between the long-term equity investment newly obtained because of acquisition ofminority shareholders' stocks and the share of net assets of the subsidiary to be enjoyed and continuouslycalculated according to the proportion of newly added shares from the acquisition date or consolidation date isadjusted to capital reserve; if the capital reserve is not sufficient to absorb the difference, any excess is adjustedagainst retained earnings.For the transaction for which a part of equity investment is disposed of but the right to control this subsidiary isnot lost, in the consolidated financial statements, the difference between the disposal price and the share of netassets of the subsidiary to be enjoyed accordingly for disposal of the long-term equity investment andcontinuously calculated from the acquisition date or consolidation date is adjusted to capital reserve (capitalpremium or capital stock premium); if the capital reserve is not sufficient to absorb the difference, any excess is
adjusted against retained earnings.Where the right to control the original subsidiary is lost due to disposal of a part of equity investment or otherreasons, the remaining stocks shall be remeasured at their fair value on the date of losing the control right; theresult of the sum of the consideration obtained from the equity disposal plus the fair value of remaining stocks,minus the share of net assets of the original subsidiary that should be enjoyed and is continuously calculatedaccording to the original proportion of held shares from the acquisition date, shall be charged to the investmentincome in the period when the control right is lost, and adjusted against the business reputation at the same time;other comprehensive income related to the original subsidiary's equity investment shall be transferred to theinvestment income of the current period when the control right is lost.Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till thecontrol right is lost and all the transactions belong to a package deal, accounting treatment shall be performed forthe transactions by deeming all the transactions as one item for disposing of the subsidiary and losing the controlright; however, prior to loss of the control right, the difference between every disposal price and the share of netassets of this subsidiary to be enjoyed accordingly for investment disposal shall be recognized as othercomprehensive income in the consolidated financial statements and, at the time of losing the control right, bejointly transferred to the profits or losses in the period when the control right is lost.Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till thecontrol right is lost and the transactions do not belong to a package deal, all the transactions before loss of theright to control the subsidiary shall be handled according to the regulations of the Company on partial disposal ofthe subsidiary's long-term equity investment provided that the Company does not lose the right to control thesubsidiary.This report period does not involve buying-in and selling-out of the same subsidiary's stocks, or selling-out andbuying-in turn.
7. Classification of joint arrangements and accounting treatment of co-managementJoint arrangement refers to the arrangement for joint control by two or more participants.
(1) Joint arrangement classification
Joint arrangement is classified into co-management and joint venture. Co-management refers to the jointarrangement where the parties to the venture enjoy relevant assets of this arrangement and assume relevantliabilities of this arrangement. Joint venture refers to the joint arrangement where the parties to the venture onlyenjoy rights to net assets of this arrangement.
(2) Accounting treatment of co-management
1) The Company recognizes the following items related to quantum of interest in co-management and performsaccounting treatment in accordance with provisions of the corresponding Accounting Standards for BusinessEnterprises:
a. Independently held assets, as well as the jointly held assets to be recognized according to the share of theCompany;
b. Independently undertaken liabilities, as well as the jointly undertaken liabilities to be recognized according tothe share of the Company;c. Revenue generated by selling the output share of co-management that is enjoyed by the Company;d. Revenue that is generated by selling the output during co-management and recognized according to the share ofthe Company;e. Independently incurred expense, as well as the expense incurred by co-management and recognized accordingto the share of the Company.
2) Where the Company puts assets into or sells assets to the parties to co-management (except that the assetsconstitute business), before the said assets are sold to a third party by the parties to co-management, the Companyrecognizes only the part in the profits or losses arising from this transaction that is attributable to other participantsin the co-management. In case that the put or sold assets involve the asset impairment loss complying withprovisions in the Accounting Standard for Business Enterprises No. 8 - Impairment of Assets, the Company shallrecognize the said loss in full.
3) Where the Company purchases assets from the parties to co-management (except that the assets constitutebusiness), before said assets are sold to a third party, the Company recognizes only the part in the profits or lossesarising from this transaction that is attributable to other participants in the co-management. In case that thepurchased assets involve the asset impairment loss complying with provisions in the Accounting Standard forBusiness Enterprises No. 8 - Impairment of Assets, the Company shall recognize this part of loss according to theshare to undertake.
8. Criteria for cash and cash equivalents
The cash refers to the enterprise's money on hand and deposits for payment at any time. Cash equivalents refer toinvestments held by the enterprise which are short in term (generally referring to those expiring within not morethan 3 months from the date of acquisition), high in liquidity, convertible to the known amount of cash andinsignificant in risk of change of value.
9. Foreign currency transactions and translation of financial statements in foreign currency
(1) Method of translation for foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the foreigncurrency shall be translated into the amount in RMB currency at the spot exchange rate of the transaction date(generally referring to the medial rate of foreign exchange quotation published by the People's Bank of China atthe date of transaction, the same below).
(2) Treatment of monetary items of foreign currencies and non-monetary items of foreign currencies on thebalance sheet dateFor the monetary items of foreign currencies, the translation is done according to spot rate of the balance sheetdate. The exchange difference generated from the difference of spot rate of the current balance sheet date and the
time of initial recognition of a foreign currency or the previous balance sheet date is charged to the profit or lossof the current period except that the exchange difference generated from foreign currency borrowings relating toassets of which the acquisition or production satisfies the capitalization conditions is capitalized in accordancewith the Accounting Standards for Business Enterprises No. 17 – Borrowing Costs. For the non-monetary items offoreign currencies measured by historical cost, translation is done according to spot rate of the transaction datewithout change in their amount in functional currency. Non-monetary items of foreign currencies such as stocksand funds measured at their fair value are translated as per the spot rate on the date when their fair value isconfirmed. The differences between the translated amounts in functional currency and the original amounts infunctional currency are recorded into current profits and losses as fluctuation in fair value (including fluctuation inexchange rates).
(3) Translation of foreign currency financial statements
The Company translates the financial statements expressed in foreign currency into ones expressed in RMBcurrency according to the following provisions:
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheetdate; Among the owners' equity items, except the ones as "undistributed profits", others shall be translated at thespot exchange rate at the time when they are incurred. The income and expense items in the profit statements shallbe translated at the average exchange rate. The balance arisen from the translation of foreign currency financialstatements in compliance with the aforesaid method shall be presented separately under the owners' equity item ofthe balance sheets. The foreign currency cash flow statement shall be translated at the average exchange rate onthe cash flow date. The amount of influence of the exchange rate change on cashes shall be presented separatelyunder the adjusted item in the cash flow statement.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, it recognizes a financial asset or financialliability.
(1) Classification, recognition and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics offinancial assets, the Company divides financial assets into: financial assets measured at amortization cost,financial assets which are measured at their fair values and of which the changes are included into othercomprehensive income, and financial assets which are measured at their fair values and of which the changes areincluded into the current profits and losses.The financial assets initially recognized by the Company shall be measured at their fair values. For the financialassets which are measured at their fair values and of which the changes are included into the current profits andlosses, the transaction expenses thereof are directly included into the current profits and losses; for othercategories of financial assets, the transaction expenses thereof are included into the initially recognized amount.For the accounts receivable or notes receivable arising from the sale of products or the provision of services thatdo not contain or do not consider significant financing components, the Company shall use the amount of
consideration expected to be entitled to be charged as the initial confirmation amount.
1) Financial assets measured at amortization costs
The Company's business model for managing financial assets measured at amortization cost is to collectcontractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent withbasic borrowing arrangements, that is, cash flows generated on a specific date, are for the payment of principaland interest based on the outstanding principal amount. The Company adopts the effective interest rate method forsuch financial assets and performs subsequent measurement based on amortization cost. The gains or lossesarising from their amortization or impairment are included into the current profits and losses.
2) Financial assets which are measured at their fair values and of which the changes are included into othercomprehensive incomeThe Company's business model for managing such financial assets is to collect and sell contractual cash flows,and the contractual cash flow characteristics of such financial assets are consistent with basic borrowingarrangements. The Company measures such financial assets at fair value and includes the changes of fair value areincluded in other comprehensive income, but impairment losses or gains, exchange gains and losses and interestincome calculated according to the actual interest rate method are included into the current profits and losses.In addition, the Company designates some non-trading equity instrument investments as financial assets which aremeasured at their fair values and of which the changes are included into other comprehensive income. TheCompany includes the relevant dividend income of such financial assets into the current profits and losses, andincludes the changes of fair value in other comprehensive income. When the financial assets are derecognized, thecumulative gains or losses previously included into other comprehensive income will be transferred from othercomprehensive income to retained income, but will not be included into the current profits and losses.
3) Financial assets measured at their fair values and of which the changes are recorded into the current profits andlossesThe Company classifies the financial assets other than the above financial assets measured at amortization costand financial assets which are measured at their fair values and of which the changes are included into othercomprehensive income as financial assets which are measured at their fair values and of which the changes areincluded into the current profits and losses. In addition, in the initial recognition, in order to eliminate orsignificantly reduce the accounting mismatch, the Company designates some financial assets as financial assetswhich are measured at fair value and of which the changes are included into the current profits and losses. Forsuch financial assets, the Company uses fair value for subsequent measurement, and the changes of fair value areincluded in the current profits and losses.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities are initially classified as financial liabilities which are measured at fair value and of which thechanges are included in the current profits or losses and other financial liabilities. For the financial liabilitieswhich are measured at their fair values and of which the changes are included into the current profits and losses,the transaction expenses thereof are directly included into the current profits and losses; for other financialliabilities, the transaction expenses thereof are included into the initially recognized amount.
1) Financial liabilities measured at their fair values and of which the changes are recorded into the current profitsand lossesFinancial liabilities which are measured at fair value and of which the changes are included in the current profitsor losses include trading financial liabilities (including derivatives that are financial liabilities) and financialliabilities designated as those which are measured at fair value at the initial recognition and of which changes areincluded in the current profits or losses.Trading financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fairvalue. Except for hedge accounting, the changes in fair value are included in current profits or losses.For financial liabilities designated as those which are measured at fair value at the initial recognition and of whichchanges are included in the current profits or losses, the changes of fair value caused by changes in the Company'sown credit risk are included in other comprehensive income, and when the recognition of the liabilities isterminated, the cumulative changes in fair value caused by changes in own credit risk included in othercomprehensive income are transferred to retained earnings. Other changes in fair value are included in currentprofits or losses. If the accounting mismatch in profits and losses may be caused or expanded as the effects ofchanges in the own credit risk of such financial liabilities are processed in the above manner, the Company willinclude all gains or losses of such financial liabilities (including the amount affected by changes in the Company'sown credit risk) included in the current profit and loss.
2) Other financial liabilities
Except for the transfer of financial assets that does not meet the conditions for derecognition or continuedinvolvement in the financial liabilities and financial guarantee contracts formed by the transferred financial assets,other financial liabilities are classified as financial liabilities measured at amortization cost, which aresubsequently measured at amortization cost. Gains or losses arising from derecognition or amortization areincluded in the current profits and losses.
(3) Basis for the recognition and method for the measurement of financial assetsFinancial assets that meet one of the following conditions shall be derecognized:
1) The contract right to receive the cash flow of the financial assets is terminated;
2) The financial assets have been transferred, and almost all the risks and rewards of ownership of the financialassets are transferred to the transferring party;
3) The financial assets have been transferred, although the enterprise has neither transferred nor retained almost allthe risks and rewards of the ownership of the financial assets, it has given up control over the financial assets.If the enterprise has neither transferred nor retained almost all the risks and rewards of the ownership of thefinancial assets, and has not given up control over the financial assets, the relevant financial assets shall berecognized according to the extent of continued involvement in the transferred financial assets, and the relevantliabilities shall be recognized accordingly. The extent of continued involvement in the transferred financial assetsrefers to the level of risk that the changes in the value of the financial assets expose the enterprise to.If the overall transfer of financial assets meets the conditions for derecognition, the difference between the bookvalue of the transferred financial assets and the sum of the consideration received due to the transfer and thecumulative amount of changes in fair value originally included in other comprehensive income is included in the
current profits and losses.If the partial transfer of financial assets satisfies the conditions for derecognition, the book value of the transferredfinancial assets will be apportioned between the portion derecognized and the portion not derecognized accordingto their relative fair values, and the difference between the sum of the consideration received for the transfer andthe amount of cumulative changes in the fair value which was previously directly recognized in owner's equityand which should be apportioned to the portion derecognized and the above book amount apportioned will beinclude in the current profits and losses.The Company must determine whether almost all the risks and rewards of ownership of the financial assets havebeen transferred before endorsing the transfer of financial assets sold by means of recourse and financial assetsheld. If almost all the risks and rewards of ownership of the financial asset have been transferred to the transferee,the financial asset will be derecognized; if the risks and rewards of the ownership of the financial asset have beenretained, the financial asset will not be derecognized; if almost all the risks and rewards of ownership of thefinancial asset have not been transferred or retained, the enterprise needs to continue to determine whether itretains control over the asset and performs accounting treatment in accordance with the principles described in thepreceding paragraphs.
(4) Derecognition of financial liabilities
If the present obligation for a financial liability has been fully or partially discharged, the financial liability or therelevant portion thereof will be derecognized. If the Company (borrower) signs an agreement with the lender toreplace the original financial liability by assuming a new financial liability, and the contract terms of the newfinancial liability and the original financial liability are substantially different, the original financial liability willbe derecognized and the new financial liability will be recognized at the same time. If a material amendment ismade to the contractual terms for the original financial liability or the relevant portion thereof, the originalfinancial liability will be derecognized, and the new financial liability will be recognized according to theamended terms at the same time.If the financial liability or the relevant portion thereof is derecognized, the difference between the book value ofthe financial liability derecognized and the consideration paid for it (including the non-cash asset transferred orthe liability assumed) will be included in the current profits or losses.
(5) Offsetting financial assets with financial liabilities
When the Company has the legal right to offset the financial asset and the financial liability with recognizedamount, and such legal rights are currently enforceable, and the Company plans to settle in net or simultaneouslyrealize the financial asset and liquidate the financial liability, the financial asset and the financial liability will bepresented in the balance sheet in net amounts after mutual offset. In addition, financial assets and financialliabilities are presented separately in the balance sheet, and are not offset against each other.
(6) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive for the sale of an asset or need to pay for thetransfer of a liability in the orderly transaction that occurs on the measurement date. For financial instruments for
which there is an active market, the fair value thereof will be determined by the Company based on the quotationin the active market; Quotation in the active market refers to the price that is easily obtained from exchanges,brokers, industry associations, pricing service agencies, etc. on a regular basis, and represents the price of markettransactions that actually occur in fair trading. For financial instruments for which there is no active market, thefair value thereof will be determined by the Company using the valuation techniques. The value appraisaltechniques include the prices adopted by the parties, who are familiar with the condition, in the latest markettransaction upon their own free will, the current fair value obtained by referring to other financial instruments ofthe same essential nature, the cash flow capitalization method and the option pricing model, etc. At the time ofvaluation, the Company adopts a valuation technique that is applicable in the current circumstances and that thereis sufficient available data and other information to support, selects the input values consistent with the asset orliability characteristics considered by the market participants in the transaction of the underlying asset or liability,and as far as possible uses relevant observable input values. Unobservable input values are used where therelevant observable input values are not available or are not practicable.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the residual equity in assets of the Companyafter deduction of all the liabilities. The Company treats issue (including refinancing), repurchases, sale orcancellation of equity instruments as changes in equity, and transaction expenses related to equity transactions arededucted from equity. The Company does not recognize changes in the fair value of equity instruments.If the Company's equity instruments distribute dividends (including "interest" generated by instruments classifiedas equity instruments) during the existence period, such dividends will be treated as profit distribution.
11. Impairment of financial assets
Financial assets of which the Company needs to recognize impairment losses include financial assets measured atamortization cost, and debt instrument investments which are measured at fair value and of which changesincluded in other comprehensive income, mainly including receivables financing, accounts receivable, otherreceivables, loans and advances, debt investment, other debt investment, long-term receivables, etc.
(1) Method for recognition of impairment provisions
Based on the expected credit loss, the Company makes impairment provision and recognizes credit impairmentloss according to the applicable expected credit loss measurement method (general method or simplified method)for the above items.Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordancewith the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted atthe original effective interest rate. Among them, for purchased or originated credit-impaired financial assets, theCompany discounts the difference at the credit-adjusted effective interest rate of the financial assets.The general method for measuring expected credit losses is that the Company assesses on each balance sheet datewhether the credit risk of financial assets has increased significantly since initial recognition. If the credit risk hasincreased significantly since initial recognition, the Company measures the loss provisions according to the
amount equal to lifetime expected credit losses. If the credit risk has not increased significantly since initialrecognition, the Company measures the loss provisions according to the amount equal to 12-month expectedcredit losses. The Company considers all reasonable and valid information, including forward-looking information,when assessing expected credit losses.For financial instruments with lower credit risk on the balance sheet date, the Company assumes that their creditrisk has not increased significantly since initial recognition.
(2) Criteria for judging whether credit risk has increased significantly since initial recognitionIf the probability of default of a financial asset in the expected lifetime determined on the balance sheet date issignificantly higher than the probability of default in the expected lifetime determined at the time of initialrecognition, it indicates that the credit risk of the financial asset has increased significantly. Except for specialcircumstances, the Company uses the change in default risk that occurs within the next 12 months as a reasonableestimate of the change in default risk that occurs throughout the lifetime to determine whether the credit risk hasincreased significantly since initial recognition.
(3) Combination method for assessing expected credit risk based on combinationThe Company individually assesses credit risk for financial assets that have significantly different credit risks,such as: receivables in dispute with the other party or involving litigation and arbitration; and receivables withobvious signs that the debtor is likely to fail to meet its repayment obligations.In addition to financial assets of which credit risk is individually assessed, the Company divides financial assetsinto different combinations based on common risk characteristics, and assesses credit risk on the basis of thecombination.
(4) Accounting treatment method of financing assets
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If theestimated credit losses are greater than the book value of the current impairment provisions, the difference isrecognized as an impairment loss; If the estimated credit losses are smaller than the book value of the currentimpairment provisions, the difference is recognized as an impairment gain.
(5) Method for determining credit loss of various financial assets
1) Notes receivable and receivables financing
The Company measures the loss provision for notes receivable and receivables financing based on the lifetimeexpected credit loss amount. Based on the credit risk characteristics of notes receivable and receivables financing,financial assets are divided into different combinations:
Item
| Item | Basis for recognition of combinations |
| Banker's acceptance bill | The acceptor is a bank institution or a financial company |
| Trade acceptance draft | The acceptor is a company other than a bank institution or financial company |
2) Accounts receivable and contract assets
For accounts receivable and contract assets that do not contain significant financing components and contain
significant financing components, the Company measures the loss provision based on the lifetime expected creditloss amount. Expected credit losses related to contract assets are included in asset impairment losses.In addition to accounts receivable of which credit risk is individually assessed, the Company divides accountsreceivable into different combinations based on their credit risk characteristics:
Item
| Item | Basis for recognition of combinations |
| Combination 1: Account age combination | The combination takes the account age of accounts receivable as the basis for the combination |
| Combination 2: Low risk combination | The combination takes the dismantling subsidy of waste electrical and electronic products receivable from government departments as the basis for the combination |
| Combination 3: None risk combination | The combination takes the receivables from related units within the scope of consolidation as the basis for the combination |
3) Disbursement of loans statements and advances
Based on the internal assessment results of the credit risk management system of the relevant financialinstruments, the Company defines whether credit impairment has occurred: the Company calculates the expectedcredit loss of the financial assets at the expected credit loss rate of different categories, according to the five-levelclassification of the financial industry (normal, concerned, secondary, suspicious and loss) based on the borrower'sactual repayment ability.
4) Other receivables
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expected creditlosses, based on whether the credit risk of other receivables has increased significantly since initial recognition. Inaddition to other receivables of which credit risk is individually assessed, the Company divides other receivablesinto different combinations based on their credit risk characteristics:
| Item | Basis for recognition of combinations |
| Combination 1: Account age combination | The combination takes the account age of other receivables as the basis for the combination |
| Combination 2: Low risk combination | The combination takes the receivable government grain deposits as the basis for the combination |
| Combination 3: None risk combination | The combination takes the receivables from related units within the scope of consolidation as the basis for the combination |
5) Debt investment
Debt investment mainly accounts for bond investment measured at amortization cost. The Company measuresimpairment losses using an amount equivalent to 12-month or lifetime expected credit losses, based on whetherthe credit risk of other debt investments has increased significantly since initial recognition.
6) Other debt investments
Other debt investments mainly accounts for the debt investments which are measured at their fair values and ofwhich the changes are included into other comprehensive income. The Company measures impairment lossesusing an amount equivalent to 12-month or lifetime expected credit losses, based on whether the credit risk ofother debt investments has increased significantly since initial recognition.
12. Receivables financing
For notes receivable and accounts receivable classified as measured at fair value and of which changes areincluded in other comprehensive income, the portion within one year (including one year) from the date of
acquisition is presented as receivables financing; while the portion beyond one year is presented as other debtinvestment. For related accounting policies, please refer to Note III. 10 "Financial Instruments" and Note III. 11"Impairment of Financial Assets".
13. Inventories
(1) Classification of inventories
The Company's inventories mainly include raw materials, work in progress, finished products, development costs,and development products.Development cost refers to the property that has not been completed and is for sale; the Company accounts for theland use rights purchased and used for commercial housing development as the development cost. Developmentproduct refers to the property that has been completed and is to be sold.
(2) Valuation for delivered inventories
Valuation for delivered inventories: When various kinds of inventories of the Company are delivered, they shall bevaluated at planned costs, and the planned costs shall be adjusted into actual costs based on the difference of costsof the current month at the end of the month.Development cost and product development cost include land transfer fees, infrastructure expenditures,construction and installation engineering expenditures, borrowing costs incurred before the development project iscompleted, and other related costs incurred in the development process. When developing product is carriedforward the cost, the total cost is allocated between the sold and unsold properties in proportion to theconstruction area.
(3) Recognition of the net realizable value and measurement of provision for decline in value of inventoriesAt the balance sheet date, inventories are measured at the lower of cost and net realizable value. if the cost ofinventories is higher than the net realizable value, a provision for decline in value of inventories shall be made andshall be recorded into the profits and losses of the current period, where a provision for decline in value ofinventories has been made, if the value of the said inventories is resumed later, the said value shall be reversedfrom the provision for decline in value of the inventories. Net realizable value is the estimated selling price in theordinary course of business less the estimated costs of completion and the estimated costs necessary to make thesale and relevant taxes.
(4) Stock count system for inventories
The perpetual inventory system is adopted for stock count of the Company.
(5) Amortization methods of low-value consumables and packaging materialsLow-value consumables and packaging materials are written off in full when issued for use.
14. Contract assets
The Company presented the right to collect payments from customers which the customers have not yet paid thecontract consideration, but the Company has fulfilled its performance obligations in accordance with the contract,
and which is not unconditional (that is, only depending on the passage of time) as contract assets in the balancesheet. Contract assets and contract liabilities under the same contract are presented in net amount, and contractassets and contract liabilities under different contracts are not offset.For the determination and accounting treatment of expected credit losses of contract assets, please refer to Note III.11 "Financial Asset Impairment".
15. Contract costs
(1) Determination of asset amount related to contract costs
The Company's asset related to contract costs includes contract acquisition cost and contract obtain cost.If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it will berecognized as an asset as contract acquisition cost. However, if the amortization period of the asset does notexceed one year, it will be included in current profits or losses when it occurs.If the cost incurred by the Company for the performance of the contract does not fall within the scope specified inthe accounting standards for business enterprises other than the Accounting Standards for Business Enterprises No.14 - Revenue (Revised in 2017), it be recognized as an asset as the contract performance cost when the followingconditions are met simultaneously: ① the cost is directly related to a current or expected contract, includingdirect labor cost, direct material cost, manufacturing expense (or similar expense), cost clearly borne by thecustomer, and other costs incurred only due to the contract; ② the cost increases the Company's future resourcesfor fulfilling its performance obligations; and ③ the cost is expected to be recovered.
(2) Amortization of assets related to contract costs
Assets related to contract costs are amortized on the same basis as the revenue recognition of goods related to theassets, and included in the current profits or losses.
(3) Impairment of assets related to contract costs
When determining the impairment loss of assets related to the contract cost, the Company first determines theimpairment loss of other assets related to the contract that are recognized in accordance with other relevantaccounting standards for business enterprises; then, if the book value is higher than the difference between theremaining consideration expected to be obtained due to the transfer of goods related to the assets and the costsexpected to be incurred due to the transfer of the related goods, the Company will make provision for impairmentof the excess part and recognize it as an asset impairment loss.If the depreciation factors in the previous period change later, causing the aforementioned difference is higher thanthe book value of the asset, the Company will reverse the previously-made provision for impairment and include itin the current profits or losses, but the book value of the asset after the reversal can not exceed the book value ofthe asset at the date of reversal under the assumption that no provision is made for the impairment.
16. Assets held for sale
(1) Recognition standard
Where the Company recovers its book value by selling (including the non monetary asset exchange withcommercial substance; it is the same below), not continuously using a non-current asset or disposal group, it shallbe classified into the category of assets held for sale. The non-current asset or disposal group to be classified intothe category of assets held for sale shall meet the following conditions at the same time:
According to the practice of selling such assets or disposal groups in similar transactions, they can be soldimmediately under the current circumstances;The sale is very likely to happen, i.e., the Company has made a decision on a sale plan and has obtained thedetermined purchase commitment, and the sale is expected to be completed within one year. The relevantregulations require that the relevant organ of authority of the Company or regulatory authorities must approve thesale, it shall have been approved. A determined purchase commitment refers to a legally binding purchaseagreement signed between the Company and other parties. The agreement includes important terms such as thetransaction price, time and severe penalties for breach of contract, making it almost impossible to make majoradjustments or cancel the agreement.For the non-current asset or disposal group specially obtained by the Company for resale, if it meets the specifiedcondition that "the sale is expected to be completed within one year" on the date of acquisition and it is very likelyto meet other classification conditions of the category held for sale in a short period of time (usually 3 months), itshall be classified into the category held for sale on the date of acquisition.The disposal group refers to a group of assets that are disposed of as a whole in a transaction through sale or othermeans, and the liabilities that are directly related to these assets and transferred in the transaction. Where thebusiness reputation obtained in the merger of enterprises is apportioned for the asset group or asset groupcombination to which the disposal group belongs according to Accounting Standards for Enterprises No.8 - AssetImpairment, this disposal group should contain the business reputation apportioned to the disposal group.
(2) Accounting treatment
For the non-current asset and disposal group that is classified as the category held for sale, the Company carriesout initial measurement or re-measurement according to the smaller result of the net value of the book value andthe fair value minus the net amount of the disposal expense. Where the net value of the fair value minus thedisposal cost is lower than the original book value, the difference is confirmed as assets impairment loss andinclude in the current profits and losses, and the provision for impairment of the assets held for sale is made at thesame time; for the amount of assets impairment loss confirmed by the disposal group held for sale, the book valueof the business reputation in the disposal group is deducted first, and then its book value is deducted in proportionaccording to the ratios of the book values of various non-current assets applicable to measurement of the categoryheld for sales in the disposal group.Where the net value of the fair value of non-current assets held for sale on the balance sheet date minus the sellingexpense increases subsequently, the previous write-down amount is restored and will be reversed in the amount ofassets impairment loss after classification as the category held for sales is confirmed, and the reversed amountshall be included in the current profits and losses. The assets impairment loss confirmed before classification asthe category held for sales shall not be reversed.Where the net value of the fair value of disposal group held for sale on the balance sheet date minus the selling
expense increases subsequently, the previous write-down amount is restored and will be reversed in the amount ofassets impairment loss confirmed for non-current assets applicable to the measurement provisions of the categoryheld for sale after classification as the category held for sales, and the reversed amount shall be included in thecurrent profits and losses.For the deducted book value of business reputation and the non-current assets applicable to the measurementprovisions of the category held for sale, the assets impairment loss confirmed before classification as the categoryheld for sales shall not be reversed. For the subsequently reversed amount of assets impairment loss confirmed forthe disposal group held for sale, its book value is increased in proportion according to the ratios of the book valuesof various non-current assets applicable to measurement provisions of the category held for sales in the disposalgroup excluding the business reputation. The non-current assets held for sale or non-current assets in the disposalgroup are not made for provision for impairment or amortized, and the interests on debts and other expenses in thedisposal group held for sale will be confirmed continuously.The measurement methods of the category held for sale do not apply to the deferred income tax assets, financialassets complying with the specifications of Accounting Standards for Business Enterprises No. 22 - Recognitionand Measurement of Financial Instruments, investment real estate and biological assets measured at fair value,contract rights produced in the insurance contract, and the assets produced in the welfare of the workers, and theyare measured according to the relevant criteria or corresponding accounting policies formulated by the Company.Where the disposal group contains the non-current assets applicable to the measurement method of the categoryheld for sale, the measurement method of the category held for sale is applicable to the whole disposal group. Therelated accounting standards apply to measurement of liabilities in the disposal group.When the non-current assets or disposal group is removed from the disposal group held for sale because it doesnot meet the classification condition of the category held for sale anymore and will not be classified as thecategory held for sale or non-current assets, it shall be measured according to the smaller one of the followingtwo:
1) Book value before being classified as held for sale, and the adjusted amount of depreciation, amortization orimpairment that should be recognized under the assumption that it is not classified as held for sale; and
2) Recoverable amount.
17. Long-term equity investment
Long-term equity investments mainly include the equity investment held by the Company that is able to control, isunder common control with or has significant influences on the invested entity and the equity investment to jointventures.
(1) Judgment standards of control and significant influence
Judgment standards of control:
1) The Company owns the power to the invested entity;
2) The Company enjoys variable return by participating relevant activities of the invested entity;
3) The Company has the ability to use the power over the invested entity to influence the Company's returnamount;
4) The Company acknowledges the control force for the invested entity that meets the above three conditions.Judgment standards of significant influence:
1) The Company has the power to participate in decision making for the financial and operations policies of theinvested entity, but cannot control formulation of these policies independently or together with other parties.
2) Where the Company can exert a great influence on the invested entity, the invested entity is an associate of theCompany.
3) The invested entity under common control by the Company and other participants is a joint venture of theCompany. Common control means that any participant cannot independently control this arrangement, and anyparticipant with the right to common control on this arrangement can prevent other participants or the combinationof participants from independently controlling this arrangement.
(2) Investment cost recognition of long-term equity investment
The long-term equity investment of the Company is measured at the investment cost at the time of acquisition.Normally the investment cost refers to the assets paid, liabilities incurred or undertaken, and the fair value ofequity securities issued for the acquisition of this investment, including the costs directly attributable to theacquisition. However, for the long-term equity investment formed by business combination involving enterprisesunder common control, the investment cost is the share of carrying amount of the combined party's net assetsacquired on the combination date in the ultimate controlling party's consolidated financial statements.
(3) Subsequent measurement of long-term equity investments and recognition of profits or lossesThe Company adopts the cost method for accounting for the long-term equity investment based on which theCompany is able to control the invested enterprise; the Company adopts the equity method for accounting forinvestments put into associates and joint ventures.The price of a long-term equity investment accounted by employing the cost method shall be included at its initialinvestment cost. If there are additional investments or disinvestments, the cost of the long-term equity investmentshall be adjusted. The cash dividends or profits declared to distribute by the invested entity shall be recognized asinvestment income and charged to profits or losses of the current period.When the Company employs the equity method for accounting of the long-term equity investment, if theinvestment cost of a long-term equity investment is more than the investing enterprise' attributable share of thefair value of the invested entity's identifiable net assets for the investment, the investment cost of the long-termequity investment may not be adjusted; if the investment cost of a long-term equity investment is less than theinvesting enterprise' attributable share of the fair value of the invested entity's identifiable net assets for theinvestment, the carrying amount of the long-term equity investment shall be adjusted, and the difference shall berecorded into the profits or losses of the current period.When the Company employs the equity method for accounting of the long-term equity investment, the Companyfirst adjusts the invested entity's net profits or losses and other comprehensive income in the aspects such as thefair value of the invested entity's identifiable net assets at the time of investment acquisition, accounting policyand accounting period, and then recognizes the current-period investment profits or losses and other
comprehensive income according to the investing enterprise' attributable or shareable share of the invested entity'snet profits or losses and other comprehensive income. For other changes in owners' equities other than the netprofits or losses, other comprehensive income and profit distribution, the carrying amount of the long-term equityinvestment shall be adjusted and recorded into the owners' equities.For the unrealized internal transaction profits/losses that arise between the Company and the associates and jointventures, the part attributable to the Company shall be calculated according to the shareholding proportion, andthe investment profits/losses shall be recognized on the basis of offsetting.For the long-term equity investments held already prior to 1 January, 2007 for the associates and joint ventures, ifthere is any equity investment difference on the debit side, the investment profits/losses shall be recognized afterdeduction of the equity investment difference on the debit side amortized by the straight-line method according tothe original residual maturity.
(4) Recognition of common control and significant influences on the invested entityCommon control is recognized as the control which does not exist unless the investing parties unanimously agreeon sharing the control power over the relevant important financial and operating decisions of the invested entityaccording to the provisions of the contract.Significant influences will be recognized where there is power to participate in making decisions on the financialand operating policies of the invested entity, but not to control or do joint control together with other parties overthe formulation of these policies. When the Company holds more than 20.00% (included) but less than 50.00% ofvoting shares of the invested entity directly or indirectly through a subsidiary, significant influences on theinvested entity shall be recognized, unless there is clear evidence indicating that the Company cannot participatein production and management decision-making of the invested entity in this situation and therefore cannotgenerate significant influences; if the Company holds less than 20.00% (excluded) of voting shares of the investedentity, usually the Company is not deemed to have a significant influence on the invested entity, unless there isclear evidence indicating that the Company can participate in production and management decision-making of theinvested entity in this situation and therefore can generate significant influences.
(5) Conversion of the long-term equity investment accounting method
Where the equity investment originally held by the Company, which is unable to control, is not under commoncontrol with or has no significant influences on the invested entity, is converted into an investment for an associateor joint venture due to additional investment, the investment shall be accounted by the equity method instead, andthe Company shall use the fair value of the original equity investment plus the fair value of the consideration paidto acquire the newly added investment as the initial investment cost accounted by the equity method instead. Thedifference between the fair value and carrying amount of the originally held equity investment prior to theadditional investment, and the cumulative fair value changes originally recorded into other comprehensive incomeshall be transferred to the current-period profits or losses accounted by the equity method instead.For the originally held investments for associates and joint ventures, if they are not able to be under commoncontrol with or have significant influences on the invested entity, if they are not able to be under common controlwith or have significant influences on the invested entity due to reason such as partial disposal, accounting
treatment must be performed for remaining equity investments according to the recognition and measurementstandards for financial instruments, and the difference between the fair value and carrying amount on the date onwhich the common control or significant influence is lost shall be charged to profits or losses of the current period.When accounting based on the equity method is terminated for other related comprehensive income originallysubject to accounting of equity method, accounting treatment is performed using the basis the same as that usedby the invested entity to directly dispose of relevant assets or liabilities; all the owners' equities that are recognizeddue to other changes in owners' equities other than the net profits/losses, other comprehensive income and profitdistribution of the invested entity shall be transferred to the profits or losses of the current period when accountingbased on the equity method is terminated.Where the originally held investments for associates or joint ventures are converted to investments for subsidiariesdue to additional investment, in the individual financial statements, the sum of the carrying value of the acquiredparty's equity investment held prior to the acquisition date and the investment cost newly added on the acquisitiondate shall be used as the initial investment cost of such an investment; for the equity investment held prior to theacquisition date, other comprehensive income recognized due to accounting of the equity method shall undergoaccounting treatment using the basis the same as that used by the invested entity to directly dispose of relevantassets or liabilities when such an investment is disposed of.When the influencing capability on the invested entity is converted from control to a significant influence orcommon control together with other investors due to investment disposal, the long-term equity investment cost,for which recognition shall be terminated, is first carried over according to the proportion of investment disposal.On such a basis, the remaining long-term equity investment cost is compared with the share attributable to theCompany in the fair value of the invested entity's identifiable net assets at the time of original investment, whichis calculated according to the remaining shareholding proportion. For the business reputation part to be embodiedin the investment evaluation, the carrying amount of long-term equity investment shall not be adjusted; where theinvestment cost is less than the share attributable to the Company in the fair value of the invested entity'sidentifiable net assets at the time of original investment, any excess shall be adjusted against retained earningswhen the long-term equity investment cost is adjusted. For the share attributable to the Company in the investedentity's realized net profits/losses between acquisition of the original investment and conversion to accounting ofthe equity method due to investment disposal, the carrying amount of the long-term equity investment shall beadjusted, meanwhile, any excess shall be adjusted against retained earnings for the share attributable to theCompany in the invested entity's realized net profits/losses (excluding the cash dividends or profits distributed ordeclared to distribute) from acquisition of the original investment to the beginning of the period in which theinvestment is disposed of, and the current-period profits or losses shall be adjusted for the share attributable to theCompany in the invested entity's realized net profits/losses from the beginning of the period in which theinvestment is disposed of to the investment disposal date; the share attributable to the Company in the investedentity's changes in other comprehensive income shall be recorded into other comprehensive income when thecarrying amount of the long-term equity investment is adjusted; the share attributable to the Company in theinvested entity's other changes in owners' equities arising from reasons other than the net profits or losses, othercomprehensive income and profit distribution shall be recorded into "Capital reserves -- Other capital reserves"
when the carrying amount of the long-term equity investment is adjusted. After the cost method is converted to theequity method for the long-term equity investment, the share attributable to the Company in the invested entity'srealized net profits/losses, other comprehensive income and other changes in owners' equities shall be calculatedand recognized according to provisions of the standard in the future period.For the originally held long-term equity investment that is able to control the invested entity, if the shareholdingproportion declines due to reasons such as partial disposal and the investment cannot be able to control, be undercommon control with or have significant influences on the invested entity, accounting treatment must beperformed for remaining equity investments according to the recognition and measurement standards for financialinstruments. The difference between the fair value and carrying amount on the date of control loss shall berecorded into the investment income of the current period.In the process of holding the long-term equity investment, if the Company decides to sell all or part of held stocksof the invested entity in consideration of all aspects, the carrying amount of the long-term equity investmentcorresponding to the sold stocks shall be carried over accordingly, and the difference between the selling price andthe carrying amount of long-term equity investment for disposal shall be recognized as disposal profit or loss.If the Company disposes of all the long-term equity investments accounted by the equity method, whenaccounting based on the equity method is terminated for other related comprehensive income originally subject toaccounting of equity method, accounting treatment is performed using the basis the same as that used by theinvested entity to directly dispose of relevant assets or liabilities; all the owners' equities that are recognized due tochanges in other owners' equities other than the net profits/losses, other comprehensive income and profitdistribution of the invested entity shall be transferred to the investment income of the current period whenaccounting based on the equity method is terminated; if a part of the long-term equity investment accounted by theequity method is disposed of and the remaining stocks are still accounted using the equity method, other relatedcomprehensive income originally subject to accounting of equity method shall be handled using the basis the sameas that used by the invested entity to directly dispose of relevant assets or liabilities and be carried over byproportion, and the owners' equities that are recognized due to other changes in owners' equities other than the netprofits/losses, other comprehensive income and profit distribution of the invested entity shall be carried over tothe investment income of the current period according to the proportion.
18. Investment real estate
The Company's investment real estate includes a land use right that is leased out, a land use right held for transferupon capital appreciation and a building that is leased out.The Company's investment real estate is measured at its cost, and the Company uses the cost model for asubsequent measurement of its investment real estate. The depreciation and amortization of the investment realestate shall be made in accordance with the accounting policies of fixed assets or intangible assets of theCompany.When the Company changes the purpose of the investment real estate, such as for self-use, it shall transfer therelevant investment real estate to other assets.
19. Fixed assets
(1) Recognition standard of fixed assets
The Company's fixed assets refer to the tangible assets that are held for the sake of producing commodities,rendering labor service, renting or business management and whose useful life is in excess of one fiscal year.Fixed assets can not be recognized unless they simultaneously meet the conditions as follows:
1) The economic benefits pertinent to the fixed assets are likely to flow into the enterprise; and
2) The cost of the fixed assets can be measured reliably.
(2) Measurement of fixed assets
The measurement of a fixed asset shall be made at its cost.
1) The cost of a purchased fixed asset consists of the purchase price, the relevant taxes, freight, loading andunloading fees, professional service fees and other expenses that bring the fixed asset to the expected conditionsfor use and that may be relegated to the fixed asset.
2) If the payment for a fixed asset is delayed beyond the normal credit conditions and it is of financing nature ineffect, the cost of the fixed asset shall be recognized based on the present value of the purchase price. Thedifference between the actual payment and the present value of the purchase price shall be included in the currentprofits and losses within the credit period, unless it shall be capitalized in accordance with the AccountingStandards No. 17 - Borrowing Costs.
3) The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing theasset to the expected conditions for use.
4) The cost invested to a fixed asset by the investor shall be recognized in accordance with the value as stipulatedin the investment contract or agreement, other than those of unfair value as stipulated in the contract or agreement.
5) The costs of fixed assets acquired through the exchange of non-monetary assets, recombination of liabilities,merger of enterprises, and financial leasing shall be respectively recognized in accordance with the AccountingStandards No. 7 - Exchange of Non-monetary Assets, Accounting Standards for Enterprises No. 12 - DebtRestructuring, Accounting Standards for Enterprises No. 20 - Merger of Enterprises and Accounting Standards forEnterprises No. 21 - Leases.
(3) Classification of fixed assets
The Company's fixed assets are classified into houses and buildings, machinery equipment, electronic equipmentand transportation equipment and otherwise.
(4) Depreciation of fixed assets
1) Recognition of depreciation method and service life, expected net salvage value rate and annual depreciationrate:
The depreciation of fixed assets shall be made by the straight-line method. The annual depreciation raterecognized according to the category, service life and expected net salvage value rate of fixed assets is as follows:
Category of fixed assets
| Category of fixed assets | Expected net salvage value rate (%) | Expected service life (year) | Annual depreciation rate (%) |
| Houses and buildings | 5.00 | 20.00 | 4.75 |
| Machinery equipment | 5.00 | 6.00-10.00 | 9.50-15.83 |
| Electronic equipment | 5.00 | 2.00-3.00 | 31.67-47.50 |
| Transportation equipment | 5.00 | 3.00-4.00 | 23.75-31.67 |
| Others | 5.00 | 3.00-5.00 | 19.00-31.67 |
Depreciation of fixed assets of which a provision for impairment has been made: For a fixed asset of which aprovision for impairment has been made, the depreciation of the fixed asset shall be made based on the amount ofdeducting its expected net salvage value, depreciation amount and provision for impairment from the originalprice of the fixed asset and remaining service life of the fixed asset.For the fixed assets that have reached intended usable condition but not prepared the final account for completion,their costs shall be recognized at their estimated value, and their depreciation shall be made accordingly; Aftercompletion of the final account for completion, the original estimated value of the fixed assets shall be adjusted bytheir actual costs, but the original depreciation amount does not require adjusting.
2) Check of service life, expected net salvage value and depreciation method of fixed assets:
The Company shall, at least at the end of each year, have a check on the service life, expected net salvage value,and the depreciation method of the fixed assets. If the Company finds that there is any difference between theexpected service life and the previously estimated service life of a fixed asset, the expected service life of thefixed asset shall be adjusted; If there is any difference between the amount of expected net salvage value and thepreviously estimated amount of the net salvage value, the expected net salvage value shall be adjusted; If anysignificant change is made on the form of the realization of the expected economic benefits concerning a fixedasset, the method for the depreciation of the fixed asset shall be changed. If any change is made to the service life,expected net salvage value or the depreciation method of a fixed asset, it shall be regarded as a change of theaccounting estimates.
(5) Treatment of subsequent expenditures for fixed assets
Subsequent expenditures incurred on a fixed asset refer to repair expenses, renovation expenses, repair costs anddecoration expenses and otherwise incurred in the course of use of the fixed asset. Their accounting treatment is asfollows: Where subsequent expenditures of a fixed asset such as renovation expenses meet the conditions ofrecognizing the fixed asset, they shall be recorded into the cost of the fixed asset, and the carrying amount of thereplaced part of the subsequent expenditures shall be deducted; Where subsequent expenditures of a fixed assetsuch as repair costs do not meet the conditions of recognizing the fixed asset, they shall be recorded into theprofits and losses of the current period in which they are incurred; Where the decoration expenses of a fixed assetmeet the conditions of recognizing the fixed asset, they shall be measured in a single detail account of "FixedAssets", and the depreciation of the fixed asset shall be made separately by the straight-line method in a shortertime of the period of two decorations and remaining usable life of the fixed asset.
The improvement expenditures incurred on a fixed asset leased by operating lease shall be capitalized andreasonably amortized as long-term prepaid expenses.
20. Construction in progress
The term "construction in progress" refers to all necessary expenditures incurred before the acquired fixed assetsenable the project to reach expected usable condition, including project direct materials, direct employeeremunerations, installation costs for equipment to be installed and project construction, project management fees,net profits and losses of project commissioning and approved capitalized borrowing costs.
(1) Valuation of construction in progress
The Company's construction in progress shall be measured individually by construction project and shall bevaluated at actual cost.
(2) Time point of carrying over construction in progress into fixed asset
When the construction in progress reaches the expected usable condition, they shall be transferred to fixed asset attheir actual cost. For the fixed assets that have reached expected usable condition but not prepared the finalaccount for completion, they shall be charged to the account at their estimated value and shall be adjusted aftertheir actual value is recognized.
21. Borrowing costs
Borrowing costs are interests and other costs incurred by the Company in connection with the borrowing of thefunds, including interests, amortization of discounts or premiums related to borrowings, ancillary costs incurred inconnection with the arrangement of borrowings, and exchange differences arising from foreign currencyborrowings.
(1) Recognition of capitalization of borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifyingasset shall be capitalized, and the amounts of other borrowing costs incurred shall be recorded into the profits andlosses of the period. in which they are incurred. Qualifying assets are fixed assets, investment real estate andinventories and otherwise that necessarily take a substantial period of time for acquisition, construction orproduction to get ready for their intended use or sale.
(2) Period of capitalization of borrowing costs
1) Time point of capitalization of borrowing costs.
The capitalization of borrowing costs commences only when all of the following conditions are satisfied:
a. Expenditures for the asset have been incurred;b. Borrowing costs have been incurred; andc. Activities relating to the acquisition, construction or production of the asset that are necessary to prepare theasset for its intended use or sale have commenced.
2) Time point of ceasing capitalization of borrowing costs:
Capitalization of borrowing costs ceases when the qualifying asset acquired, constructed or produced becomesready for its intended use or sale. The subsequent borrowing costs shall be recorded into the profits and losses ofthe current period.
3) Recognition of suspending capitalization of borrowing costs:
When an abnormal interruption occurs during the construction or production of an asset which satisfies theconditions for capitalization and the interruption continues for more than three months consecutively, thecapitalization of borrowing expense will be paused, the borrowing expense incurred during the suspension will beincluded in the current profits and losses.
(3) Calculation of capitalized amounts of borrowing costs
During the capitalization period, the amount of interest (including amortization of discounts or premiums) to becapitalized for each accounting period shall be recognized as follows:
1) Where special funds are borrowed for the acquisition, construction or production of a qualifying asset, theamount of interest to be capitalized shall be the actual interest expense incurred on that borrowing for the periodless any bank interest earned from depositing the borrowed funds before being used on the asset or any investmentincome on the temporary investment of those funds.
2) Where general funds are borrowed for the acquisition, construction or production of a qualifying asset, theamount of interest to be capitalized on such general borrowings shall be calculated and recognized by applying acapitalization rate of such general borrowings to the weighted average of the excess amounts of accumulatedexpenditures on the asset over and above the amounts of special borrowings. The capitalization rate shall becalculated and recognized by the weighted average interest rate of general borrowings.Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during eachaccounting period shall be recognized by the real interest rate method, and an adjustment shall be made to theamount of interests in each period. During the period of capitalization, the amount of interest capitalized duringeach accounting period shall not exceed the amount of interest actually incurred to the relevant borrowings in thecurrent period.Ancillary costs in connection with special borrowings that are incurred before the qualifying asset acquired,constructed or produced becomes ready for its intended use or sale shall be capitalized on the basis of the incurredamount when they are incurred, and they shall be recorded into the cost of qualifying asset; those incurred afterthe qualifying asset acquired, constructed or produced becomes ready for its intended use or sale shall berecognized as expenses on the basis of the incurred amount when they are incurred, and shall be recorded into theprofits and losses of the current period. The ancillary costs arising from a general borrowing shall be recognizedas expenses at their incurred amount when they are incurred, and shall be recorded into the profits and losses ofthe current period.
22. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by theCompany. Intangible assets can be recognized only when they meet the conditions simultaneously as follows:
a. They are consistent with the definition of intangible assets;
b. The economic benefits related to intangible assets are likely to flow into the Company; andc. The cost of intangible assets can be measured reliably.
(1) Measurement of intangible assets
The intangible assets shall be measured according to their cost or fair value (if increased through businesscombination not involving enterprises under common control).
(2) Subsequent measurement
The Company shall analyze and judge the service life of intangible assets when it obtains intangible assets. If theCompany is unable to forecast the period when the intangible asset can bring economic benefits to it, it shall beregarded as an intangible asset with uncertain service life.With regard to an intangible asset with limited service life, its amortization amount shall be amortized by expectedrealization pattern of its economic benefits, if the Company is unable to recognize the expected realization patternreliably, intangible assets shall be amortized by the straight-line method.The Company shall, at least at the end of each year, check the service life and the amortization method ofintangible assets with limited service life. If necessary, it shall adjust the said service life and amortizationmethod.With regard to an intangible asset with uncertain service life, its amortization amount shall not be amortized, butthe Company shall check the service life of the said intangible asset every year and shall carry out an impairmenttest for it.
(3) Estimation of service life
As for intangible assets with limited service life, the estimation of their service life generally considers thefollowing factors:
1) General life cycle of products manufactured by using the assets and information about service life of similarassets available;
2) Present situation of technologies and process and estimation for future development trends;
3) Market demand of products manufactured or services rendered by using the assets;
4) Expected actions of present or potential competitors;
5) Expected maintenance expenses for economic capacity from the assets and the Company's expected capabilityto pay relevant expenses;
6) Laws and regulations or similar restrictions relating to the control period of the assets, such as concessionperiod and lease period;
7) Relevance with service life of other assets held by the Company, etc.
(4) Division of research expenditures and development expenditures included in expenditures for internalresearch and development projects
1) Research expenditures in internal research and development projects shall be recorded into the profits andlosses of the current period when they are incurred.
2) Development expenditures in internal research and development projects shall be recognized as intangibleassets where they satisfy all of the following conditions:
a. Technical feasibility of completing the intangible asset so that it will be available for use or sale;b. Intention to complete the intangible asset and use or sell it;c. How the intangible asset will generate economic benefits, including the ability to demonstrate the existence of amarket for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, theusefulness of the intangible asset;d. Availability of adequate technical, financial and other resources to complete the development and to use or sellthe intangible asset;e. Ability to measure reliably the expenditure that is attributable to the intangible asset during its development.
23. Impairment of long-term assets
On the balance sheet date, if there is any sign showing possible impairment of assets (referring to the assets otherthan inventories, equity instruments that have no quoted price and reliable fair value measurement in activemarket, investment real estate measured by fair value model, consumable biological assets, assets formed underconstruction contract, deferred income tax assets, residual value not guaranteed by the renter in the financing leaseand financial assets), their recoverable amount shall be estimated on the basis of single item assets; Where it isdifficult to estimate the recoverable amount of the single item assets, the recoverable amount of the assets shall berecognized on the basis of their asset group or combination of asset groups.The recoverable amount shall be recognized in light of the higher one of the net amount of the fair value of thesingle item assets, asset group or combination of asset groups less the disposal expenses and the present value ofthe expected future cash flow of the single item assets, asset group or combination of asset groups.Where the recoverable amount of the single item assets is lower than their carrying amount, a provision for theasset impairment shall be made accordingly on the basis of the difference between the carrying amount of thesingle item assets and their recoverable amount. Where the recoverable amount of an asset group or a combinationof asset groups is lower than its carrying amount, it shall be recognized as the corresponding impairment loss. Theamount of the impairment loss shall first charge against the carrying amount of business reputation which isapportioned to the asset group or combination of asset groups, then charge it against the carrying amount of otherassets in proportion to the weight of other assets in the asset group or combination of asset groups with thebusiness reputation excluded. The charges against the carrying amount of the assets above shall be treated as theimpairment loss of the single item assets (including the business reputation), and a provision for impairment of thesingle item assets shall be made accordingly.Once the above loss of asset impairment is recognized, it shall not be switched back in future accounting periods.
24. Long-term deferred expenses
Long-term deferred expenses refer to the expenses incurred by the Company but attributable to the current andsubsequent accounting periods of more than one year (excluding one year), including the expenses for
improvement of fixed assets leased by operating lease.Long-term deferred expenses shall be recorded into the account based on their actual amount of expenditure andshall be averagely amortized by their beneficial period, if long-term deferred expenses can not benefit subsequentaccounting periods, the unamortized value of the project shall be all transferred to the profits and losses of thecurrent period.
25. Contractual liabilities
Contract liability refers to the Company's obligation to transfer goods to customers for consideration received orreceivable from customers. If before the Company transfers the goods to the customer, the customer has paid thecontract consideration or the Company has obtained the unconditional right to receive payment, the Company will,at the earlier time point between the actual payment by the customer and the payment due, present the amountreceived or receivables as contract liabilities. Contract assets and contract liabilities under the same contract arepresented in net amount, and contract assets and contract liabilities under different contracts are not offset.
26. Employees' wages and salaries
(1) Accounting treatment of short-term wages and salaries
In the accounting period during which employees provide services to the Company, the Company recognizes theshort-term wages and salaries actually incurred as liabilities and charges them to the current-period profits andlosses or relevant asset costs.
(2) Accounting treatment of separation benefits
Separation benefits are classified into the defined contribution plan and defined benefit plan
1) In the accounting period during which employees provide services to the Company, the Company recognizesthe amount to be deposited (calculated according to the defined contribution plan) as liabilities and charges it tothe current-period profits and losses or relevant asset costs.
2) Usually accounting treatment for the defined benefit plan consists of the following steps:
a. According to the projected unit credit method, adopt the unbiased and mutually consistent actuarial assumptionto estimate the demographic variables and financial variables, measure obligations generated by the definedbenefit plan, and determine the period to which relevant obligations belong;b. In case that the defined benefit plan involves assets, recognize the deficit or surplus formed by reducing the fairvalue of assets of the defined benefit plan from the present obligation value of the defined benefit plan as one netliability or net asset of the defined benefit plan. If the defined benefit plan has any surplus, use the lower of thedefined benefit plan surplus and the upper asset limit to measure net assets of the defined benefit plan. The upperasset limit refers to the present value of the economic interest that can be obtained by the Company from refund ofthe defined benefit plan or by reducing the fund to be deposited for the defined benefit plan in the future;c. At the end of the period, recognize the costs of employees' wages and salaries arising from the defined benefitplan as the service costs, net interests of net liabilities or net assets of the defined benefit plan, and changes arisingfrom remeasurement of net liabilities or net assets of the defined benefit plan, wherein the service costs and netinterests of net liabilities or net assets of the defined benefit plan are recorded into the current-period profits/losses
or relevant asset costs, changes arising from remeasurement of net liabilities or net assets of the defined benefitplan are recorded into other comprehensive income and cannot be reversed to profits/losses in the subsequentaccounting period, but such amount recognized in other comprehensive income can be transferred within theequity scope;d. Recognize a settlement gain or loss during settlement of the defined benefit plan.
(3) Accounting treatment of dismiss welfare
The liability of employees' wages and salaries that arises from the dismiss welfare shall be recognized on theearlier one of the following two dates and charged to the current-period profits/losses:
1) When the Company cannot unilaterally cancel the dismiss welfare provided for the labor relationshipcancellation plan or staff reduction suggestion;
2) When the Company recognizes the cost or expense related to reconstruction involving dismiss welfarepayment.
(4) Accounting treatment of other long-term employee welfares
If other long-term employee welfares offered by the Company to employees comply with the defined contributionplan, accounting treatment will be conducted according to the defined contribution plan; the long-term benefitsother than these will undergo accounting treatment according to the defined benefit plan. However, "changesarising from remeasurement of net liabilities or net assets of the defined benefit plan" under relevant employees'wages and salaries will be included into the current profits or losses or relevant asset costs.
27. Accrued liabilities
(1) Recognition of estimated liabilities
When the businesses related to contingencies such as external guarantee, pending action or arbitration, productquality assurance, plan for layoffs, loss contract, restructuring obligations and fixed asset disposal obligationsmeet all of the following conditions, they shall be recognized as liabilities:
1) The liabilities are present liabilities assumed by the Company;
2) The fulfillment of the liabilities might cause outflow of economic benefits from the enterprise.
3) The amount of the liabilities can be reliably measured.
(2) Measurement of estimated liabilities
The estimated liabilities shall be measured in accordance with the best estimate of the necessary expenses for theperformance of the current obligation. If there is a sequent range for the necessary expenses and if all theoutcomes within this range are equally likely to occur, the best estimate shall be recognized in accordance with themiddle estimate within the range. In other cases, the best estimate shall be recognized in accordance with thefollowing methods, respectively:
1) If the contingencies concern a single item, it shall be recognized in the light of the most likely outcome.
2) If the contingencies concern two or more items, the best estimate shall be calculated and recognized inaccordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of estimated liabilities of the company is expectedto be compensated by a third party or other parties, the compensation shall be separately recognized as an assetonly when it is virtually certain that the reimbursement will be obtained. The amount recognized for thereimbursement shall not exceed the carrying amount of the recognized estimated liabilities.
28. Revenue
For the contract between the Company and the customer, the Company recognizes the revenue at the point whenthe customer obtains control over the relevant goods and the following conditions are met simultaneously: theparties to the contract have approved the contract and promised to perform their respective obligations; thecontract clarifies the rights and obligations of the parties to the contract in relation to the transferred goods or theprovided services; the contract has clear payment terms related to the transferred goods; the contract hascommercial substance, that is, the performance of the contract will change the risk, time distribution or amount ofthe Company's future cash flow; and the consideration that the Company is entitled to obtain due to its transfer ofgoods to customers is likely to be recovered.At the commencement date of the contract, the Company identifies each individual performance obligation in thecontract, and allocates the transaction price to each individual performance obligation in accordance with therelative proportion of the stand-alone selling price of the goods promised by each individual performanceobligation. When determining the transaction price, the Company considers the impact of out a variableconsideration, major financing components in the contract, non-cash consideration, consideration payable tocustomers and other factors.The Company recognizes the transaction price allocated to each individual performance obligation as revenue atthe point when the customer obtains control over the relevant goods. When judging whether the customer hasobtained control over the goods, the Company considers the following signs: where the Company has the currentright to receive payment for the goods, that is, the customer has the current payment obligation for the goods;where the Company has transferred the legal ownership of the goods to the customer, that is, the customer has thelegal ownership of the goods; where the Company has transferred the goods to the customer in kind, that is, thecustomer has taken possession of the goods in kind; where the Company has transferred the main risks andrewards of the ownership of the goods to the customer, that is, the customer has obtained the main risks andrewards of the ownership of the goods; where the customer has accepted the goods; and other signs that thecustomer has obtained control over the goods.The Company's main sales of air conditioners and related products usually only include the performanceobligations of the transferred goods.
(1) Income from selling goods
1) For the income from domestic sales of products, the Company mainly adopts the form of payment in advance,and recognizes the income when the product is outbound and delivered to the purchaser, the delivery order oroutbound order is issued, and the amount of income from product sales is determined;
2) In terms of thee export sales income, the Company completes the customs declaration and port departureprocedures for the products according to the contract and obtains the bill of lading. The income is confirmed whenthe amount of the sales revenue is determined.
(2) Income from rendering labor services
1) For the income from storage services, after the relevant labor services are provided, the Company will settle theincome on a monthly basis when the amount of income has been determined according to the working hours andstandard wages of the services provided, facilities used and related expenses;
2) For the income from material processing services, the Company will recognize the income when it processesthe materials according to the contract and delivers it to the customer to obtain the customer's receipt document,and the amount of income is determined.
3) The Company's service charge and commission income include the service charge income of acceptancebusiness, service charge income of loan by mandate, etc.For the service charge and commission income, the completion time point of the contractual performanceobligations is determined according to the business settlement sheet formulated through settlement with thecustomer when the business is completed, and the specific amount of revenue is recognized according to the termsand ratios stipulated in the business contract or agreement.
(3) Income from abalienating the right to use assets
The income from abalienating the right to use assets includes the interest income, leasehold income, etc.The Company confirms the income from abalienating the right to use assets when the income amount can bereliably measured and the relevant economic benefits are likely to flow into the enterprise.
1) The interest income of the Company includes the income from the interest of the money deposited at a financialenterprise and loan interest income. The income from the interest of the money deposited at a financial enterpriseis recognized by period according to the time of depositing and the actual interest rate. The loan interest income isrecognized when the Company grants self-operating loan and the interest is accrued by period. The loan interestincome is recognized according to the effective interest rate method.The effective interest rate method means that the amortization cost of a financial asset or financial liability andinterest income or interest expenditure of each period are calculated according to its effective rate of interest. Theeffective rate of interest refers to the interest rate used to discount the future cash flow of a financial asset orfinancial liability within the expected period of existence or a shorter period to the current book value of thefinancial asset or financial liability. When determining the effective rate of interest, the Company predicts thefuture cash flow on the basis of considering all the contract terms of financial asset or financial liability, but doesnot consider the loss of future credits. All the charges paid or collected by the Company and becoming aconstituent part of the effective rate of interest, transaction expense and transaction premium or discount shall beconsidered when the effective rate of interest is determined.
2) The leasehold revenue recognition conditions of the Company are as follows:
a. The lease contract, agreement or other settlement notices recognized by the lessee are available;
b. The obligations stipulated in the contract are fulfilled, the lease invoice is issued, and the price has beenobtained or will be obtained for sure;c. The rental cost can be measured reliably.
29. Government subsidies
A government subsidy means the monetary and non-monetary assets obtained free by the Company from thegovernment, but excluding the capital invested by the government as the owner. Government subsidies consist ofthe government subsidies pertinent to assets and government subsidies pertinent to income.The Company defines the obtained government subsidies used for purchase or construction, or forming thelong-term assets by other ways as government subsidies pertinent to assets, and all the other government subsidiesas government subsidies pertinent to income. If the government document does not specify the subsidy object, thefollowing mode is adopted to classify the subsidies into government subsidies pertinent to income andgovernment subsidies pertinent to assets:
(1) If the government document specifies the project to which the subsidy aims, the amount is divided accordingto the relative proportion of the paid amount to form assets to the paid amount to be recorded into expenses in thebudget of this specific project, and this division proportion needs to be checked on every balance sheet date and bechanged when necessary;
(2) If the government document provides only a general presentation of the purpose without specifying thespecific project, the subsidy shall be regarded as government subsidy pertinent to income.The government subsidies pertinent to assets shall be recognized as deferred income and included in the profitsand losses by period according to the reasonable and systematic methods in the service life of the relevant assetwhen this asset reaches the intended state of use. Where the relevant asset is sold, transferred, scrapped ordamaged before the service life ends, the related deferred income balance unallocated is transferred to the profitsand losses of the current period of asset disposal.If the government subsidies pertinent to incomes are used for compensating the related expenses or losses in thelater period, they shall be recognized as deferred income when being obtained and shall be recorded into thecurrent-period profits and losses in the period when the relevant expenses or losses are recognized; if thegovernment subsidies pertinent to incomes are used for compensating the related cost expenses or losses incurred,they shall be recorded into the current-period profits and losses directly when being obtained.The government subsidies pertinent to daily activities shall be recorded in other incomes; the governmentsubsidies not pertinent to daily activities shall be recorded in the non-operating incomes and expenditures.
(3) The obtained subsidized interest of policy preference undergoes accounting treatment by differentiating thefollowing two obtaining ways:
a. Where the financial department disburses the discount fund to the loan bank so that the loan bank provides aloan to the Company at the policy-based preferential interest rate, the fair value of loan is used as the entry valueof loan, the borrowing cost is calculated according to the effective interest rate method, and the differencebetween the actual amount received and the fair value of borrowing is recognized as deferred income. Thedeferred income is amortized using the effective interest rate method in the borrowing remaining period to offset
the relevant borrowing cost.b. Where the financial department disburses the discount fund to the Company directly, the correspondingdiscount is used to offset the relevant borrowing cost.
(4) Where the government subsidies are monetary assets, they shall be measured according to the amount receivedor receivable. Where the government subsidies of non-monetary assets, they shall be measured at the fair value; ifthe fair value cannot be obtained in a reliable way, the subsidies shall be measured at the nominal amount. When agovernment subsidy is actually received, the Company usually recognizes and measures it according to theactually received amount. At the end of the period, however, if there is any exact evidence showing that theCompany complies with relevant conditions provided in the financial supporting policy and it is expected toreceive the capital support from the government, this subsidy shall be measured according to the amountreceivable. The government subsidy measured according to the amount receivable shall comply with all thefollowing conditions:
1) The amount of receivable subsidy has been confirmed by the authoritative government department by issuing adocument, or the subsidy can be independently and reasonably measured and calculated in accordance withrelevant provisions of the formally issued financial fund management measures and it is predicted that its amountdoes not involve significant uncertainty;
2) The subsidy is based on the financially supported project that is formally released by the local financialdepartment and initiatively disclosed according to provisions of the Regulation of the People's Republic of Chinaon the Disclosure of Government Information, as well as its financial fund management measures, and themanagement measures must be generous (any enterprise meeting the defined conditions can apply for the subsidy)and are not formulated specially for specific enterprises;
3) Other conditions that shall be matched according to specific conditions of the Company and this matter ofsubsidy.
30. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on thedifference (temporary difference) between the tax base of assets and liabilities and their carrying value. Fordeductible losses that can be deducted from taxable income in subsequent years in accordance with the provisionsof the tax law, the corresponding deferred income tax assets are recognized. For temporary differences arisingfrom the initial recognition of business reputation, the corresponding deferred income tax liabilities are notrecognized. For temporary differences arising from the initial recognition of assets or liabilities arising fromnon-business combination transactions that neither affect accounting profits nor taxable income (or deductiblelosses), the corresponding deferred income tax assets and deferred income tax liabilities are not recognized. At thebalance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the tax rateapplicable to the period during which the assets are expected to be recovered or the liabilities are expected to besettled.The Company recognizes the deferred income tax assets to the extent of the amount of the taxable income whichit is most likely to obtain and which can be deducted from the deductible temporary differences, deductible lossesand tax deductions.
Deferred income tax liabilities are recognized for all taxable temporary differences arising from the investments insubsidiaries, joint ventures and associates, except to the extent that both of the following conditions are satisfied:
the Company is able to control the timing of the reversal of the temporary differences; and it is likely that thetemporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for alldeductible temporary differences associated with investments in subsidiaries, joint ventures and associates if all ofthe following conditions are satisfied: It is likely that the deductible temporary difference will reverse in theforeseeable future and it is likely that taxable profit in the future will be available against which the deductibletemporary difference can be utilized.The deferred tax assets and the deferred tax liabilities are offset and presented on a net basis when all ofconditions are satisfied:
a. deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same taxationauthority on the same taxable entity of the Company; andb. the taxable entity of the Company has a legal right to settle current tax assets and liabilities on a net basis.
31. Lease
The term "lease" refers to an agreement under which the lessor conveys to the lessee in return for rent the right touse an asset for an agreed period of time. Leases consist of financing leases and operating leases.
(1) Accounting treatment of financial lease
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financing lease:
a. The ownership of the leased asset is transferred to the lessee when the term of lease expires;b. The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair valueof the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can bereasonably determined that the option will be exercised;c. Even if the ownership of the asset is not transferred, the lease term covers the major part (over 75.00%(included)) of the service life of the leased asset;d. In the case of the lessee, the present value of the minimum lease payments on the lease beginning date amountsto substantially all (over 90.00% (included)) of the fair value of the leased asset on the lease beginning date; in thecase of the lessor, the present value of the minimum lease receipts on the lease beginning date amounts tosubstantially all (over 90.00% (included)) of the fair value of the leased asset on the lease beginning date; ande. The leased assets are of a specialized nature that only the lessee can use them without making majormodifications.A lease that does not satisfy the above conditions shall be recognized as an operating lease.The fixed assets leased by financing lease shall be recorded into the account based on the lower of the fair valueof leased assets on the lease beginning date and the present value of the minimum lease payments, and adepreciation of the said fixed assets shall be made in accordance with the depreciation policies for the depreciableassets owned by the lessee.
(2) Accounting treatment of operating lease
The rents paid by the lessee shall be recorded by the Company into the relevant asset costs or the profits andlosses of the current period by using the straight-line method over each period of the lease term. The direct costsincurred from operating leases carried on by the Company shall be directly recorded into the profits and losses ofthe current period. The contingent rents involved in the operating lease agreement shall be recorded into theprofits and losses of the current period in which they actually arise.
32. Discontinued operation
Discontinued operation refers to a constituent part that meets one of the following conditions and can bedistinguished separately, and this constituent part has been disposed of or classified into the category held for sale:
(1) This constituent part represents an independent main business or a separate main business area;
(2) This constituent part is one part of an associated plan for disposing of an independent main business or aseparate main business area;
(3) This constituent part is a subsidiary specially acquired for resale.
The Company lists the continuous operation profit and loss and discontinued operation profit and loss in theconsolidated income statement and the income statement respectively. For the non-current asset or disposal groupheld for sale that does not comply with the definition of discontinued operation, its impairment loss and reversedamount and profit and loss from disposal shall be listed as continuous operation profit and loss. The impairmentloss and reversed amount of discontinued operation and other operation profits and losses and profits and lossesfrom disposal shall be listed as discontinued operation profits and losses.For the discontinued operation listed in the current period, in the current financial statements, the informationoriginally listed as continuous operation profit and loss is re-listed as discontinued operation profits and losses ofthe comparable accounting period. Where the disposal group for discontinued use that is not for sale meets thecondition of the relevant constituent part in the definition of discontinued operation, it shall be listed asdiscontinued operation from the date of discontinued use. Where the control right of a subsidiary is lost due toreasons such as selling the investment into the subsidiary and this subsidiary complies with the definition ofdiscontinued operation, the relevant discontinued operation profits and losses shall be listed in the consolidatedincome statement.
33. Segment report
The Company determines the operating segment based on the internal organizational structure, managementrequirements and internal reporting system, determines the report segment based on the operating segment, anddiscloses the segment information.The operating segment refers to the constituent part in the Company that meets the following conditions at thesame time:
(1) This constituent part can generate income and cost in daily activities;
(2) The management of the Company can regularly evaluate the operating results of the constituent part so as todecide configuration of resources to it and evaluate its performance;
(3) The Company can obtain the relevant accounting information of this constituent part such as its financial status,
operating results and cash flows. If two or more operating segments have similar economic characteristics andsatisfy certain conditions, they can be combined into one operating segment.
34. Hedging
To avoid certain risks, the Company hedges certain financial instruments as hedging instruments. Hedge thatmeets the prescribed conditions will be handled by the Company using hedge accounting methods. TheCompany's hedging includes fair value hedge, cash flow hedge and hedge of net investment in overseasoperations.At the beginning of the hedging, the Company officially designates the hedging tool and the hedged item, andprepares written documents on the hedging relationship and the risk management strategy and risk managementobjectives of the Company engages in hedging. In addition, the Company will continue to assess the effectivenessof the hedging when and after the hedging begins.
(1) Fair value hedge
For eligible hedging instruments designated as fair value hedge, the gains or losses generated thereby are includedin the current profits and losses. If a hedging instrument is hedged on a non-trading equity instrument investment(or its component) that is selected to be measured at fair value and of which changes are included in othercomprehensive income, the gains and losses generated thereby are included in other comprehensive income. Gainor loss of a hedged item due to hedging risk exposure is included in the current profits and losses, while adjustingthe book value of the hedged item. If a hedged item is measured at fair value, the gain or loss of the hedged itemdue to hedging risk exposure does not need to adjust the book value of the hedged item, and the related gain andloss are included in the current profits or losses or other comprehensive income.When the Company revokes the designation of the hedging relationship, the hedging instrument has expired or issold, the contract is terminated or exercised, or the conditions for the use of hedging accounting is no longer met,the use of hedging accounting is terminated.
(2) Cash flow hedge
For eligible hedging instruments designated as cash flow hedge, the portion of the gains or losses generatedthereby that is determined to be an effective hedge is included in other comprehensive income, while the portionthat is determined to be an ineffective hedge is included in the current profits and losses.If the expected transaction causes the Company to subsequently recognize a non-financial asset or non-financialliability, or the expected transaction of the non-financial asset or non-financial liability forms a firm commitmentapplicable to fair value hedge accounting, the Company will transfer out the amount of cash flow hedge reserveoriginally recognized in other comprehensive income and includes it in the initial recognition amount of the assetor liability. For other cash flow hedging, the Company will, during the same period in which the hedged expectedcash flow affects the profit or loss, transfer out the amount of cash flow hedge reserve originally recognized inother comprehensive income and includes it in the current profits and losses.If it is expected that all or part of the net loss originally included in other comprehensive income cannot becompensated in the future accounting period, the portion which cannot be compensated will be transferred out andincluded in the current profits and losses.When the Company terminates the use of hedging accounting for cash flow hedges, the accumulated cash flow
hedge reserve that has been included in other comprehensive income will be retained when future cash flowexpectations still occur, and will be transferred out of other comprehensive income and included in the currentprofits and losses when future cash flow expectations no longer occur.
(3) Hedge of net investment in an overseas operation
Hedge of net investment in overseas operations is accounted for using a method similar to the cash flow hedge.Among the gains or losses of hedging instruments, the portion that is determined to be an effective hedge isincluded in other comprehensive income, while the portion that is determined to be an ineffective hedge isincluded in the current profits and losses.Gains and losses that have been included in other comprehensive income will be transferred out of othercomprehensive income and included in the current profits and losses when disposing of overseas operations.
35. Major accounting policies and accounting estimate changes
(1) Changes of major accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 14 - Revenues (Financeand Accounting [2017] No. 22) (hereinafter referred to as "new revenue standards") on 5 July, 2017, requiringcompanies listed at home and abroad at the same time and companies listed overseas and adopting IFRS orAccounting Standards for Business Accounting to prepare financial statements to implement the new revenuestandards from 1 January, 2018; and requiring other domestic listed companies to implement the new revenuestandards from 1 January, 2020. Under the new revenue standards, the Company makes corresponding changes toits accounting policies and implements the new revenue standards from 1 January, 2020.Under the new revenue standards, the Company only adjusts the retained earnings at the beginning of 2020 andthe amount of other related items in the financial statements for the cumulative impact on the contract which hasnot been fulfilled on the first implementation date.Before and after the implementation of the new revenue standards, the main difference in revenue recognitionaccounting policies is that the timing of revenue recognition changes from the transfer of risks and rewards to thetransfer of control. Before and after the implementation of the new revenue standards, the Company's businessmodel and contract terms remain unchanged, and there is no difference in the specific timing of revenuerecognition. The implementation of the new revenue standards has no significant impact on the operating income,net profit attributable to the Company's common shareholders, total assets, and net assets attributable to thecompany’s common shareholders in each year (end) before the first implementation date.
(2) Changes of major accounting estimates
None.
(3) Adjustments to relevant items in financial statements at the beginning of the period of the firstimplementation year due to the first implementation of new revenue standards from 2020
Report item
| Report item | Amount as at 31 December, 2019 (before change) | Amount as at 1 January, 2020 (after change) | ||
| Consolidated statements | Parent company's statements | Consolidated statements | Parent company's statements | |
Current assets:
| Current assets: | ||||
| Accounts receivable | 8,513,334,545.08 | 3,873,270,521.33 | 8,439,719,697.00 | 3,873,270,521.33 |
| Contract assets | 73,614,848.08 | |||
| Total current assets | 213,364,040,964.83 | 191,741,346,310.18 | 213,364,040,964.83 | 191,741,346,310.18 |
| Current liabilities: | ||||
| Advances from customers | 8,225,707,662.42 | 11,832,592,136.06 | - | |
| Contractual liabilities | 7,311,804,415.54 | 10,965,696,063.40 | ||
| Other current liabilities | 65,181,491,855.14 | 64,375,139,451.87 | 66,095,395,102.02 | 65,242,035,524.53 |
| Total current liabilities | 169,568,300,209.60 | 163,622,323,232.13 | 169,568,300,209.60 | 163,622,323,232.13 |
Description about adjustments: For the financial statements at the beginning of the period, the Company'simplementation of the new revenue standards only affects the reclassification of assets and liabilities, but has noimpact on the total assets, total liabilities and total net assets.
(4) Adjustments to relevant items in financial statements at the end of the period of the first implementation yeardue to the first implementation of new revenue standards from 2020
| Report item | Amount under the new revenue standards as at 31 December, 2020 | Amount under the old revenue standards as at 31 December, 2020 | ||
| Consolidated statements | Parent company's statements | Consolidated statements | Parent company's statements | |
| Current assets: | ||||
| Accounts receivable | 8,738,230,905.44 | 3,548,791,695.27 | 8,816,776,431.04 | 3,548,791,695.27 |
| Contract assets | 78,545,525.60 | |||
| Total current assets | 213,632,987,164.66 | 190,395,751,656.57 | 213,632,987,164.66 | 190,395,751,656.57 |
| Current liabilities: | ||||
| Advances from customers | 13,147,449,930.78 | 16,044,928,449.57 | ||
| Contractual liabilities | 11,678,180,424.65 | 14,594,653,911.45 | ||
| Other current liabilities | 64,382,254,283.54 | 59,737,975,078.14 | 62,912,984,777.41 | 58,287,700,540.02 |
| Total current liabilities | 158,478,718,130.74 | 157,595,121,705.31 | 158,478,718,130.74 | 157,595,121,705.31 |
Description about adjustments: For the financial statements at the end of the period, the Company'simplementation of the new revenue standards only affects the reclassification of assets and liabilities, but has noimpact on the total assets, total liabilities and total net assets.
IV. Taxes
1. Main tax categories and tax rates
Category
| Category | Tax Base | Tax Rate |
| Added-value tax | Value added because of sales of commodities or rendering of services | 13.00%, 9.00%, 6.00%, etc. |
| Urban maintenance & construction tax | Circulation taxes payable | 7.00%, 5.00% |
| Educational surcharges | Circulation taxes payable | 3.00% |
| Local education surcharge | Circulation taxes payable | 2.00% |
| Business income tax | Taxable income | 34.00%, 25.00%, 20.00%, 16.50%, 15.00%, etc. |
[Note] The place of business of the Company's subsidiary Hong Kong Gree Electric Appliances Sales Limited isHong Kong Special Administrative Region, and the profit tax rate of Hong Kong is 16.50%; the place of businessof the Company's subsidiaries Gree (Brazil) Electric Appliances Co., Ltd. and Brazil United Electric AppliancesIndustry and Commerce Co., Ltd. is Brazil, and the federal enterprise income tax rate of Brazil is 34.00%.
2. Tax preferences
(1) The Company was registered in Zhuhai, Guangdong, and has been enjoying the preferential policy for the highand new tech enterprises (High-tech Enterprise Certificate No. GR202044007307). The Company applied theincome tax rate of 15.00%, which is valid for 3 years.
(2) Deemed to be high and new tech enterprises, the following subsidiaries of the Company applied the enterpriseincome tax rate of 15.00% in 2020
| No. | Name of tax payer | Certificate number | Time for acquiring the certificate | Valid period |
| 1 | Zhuhai Landa Compressor Co., Ltd. | GR202044007788 | 9 December, 2020 | Three years |
| 2 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | GR201944009719 | 30 November, 2019 | Three years |
| 3 | Zhuhai Kaibang Motor Manufacture Co., Ltd. | GR201844002288 | 28 November, 2018 | Three years |
| 4 | Zhuhai Gree Daikin Precision Mold Co., Ltd. | GR201944005454 | 2 December, 2019 | Three years |
| 5 | Gree (Hefei) Electric Appliances Co., Ltd. | GR202034000570 | 17 August, 2020 | Three years |
| 6 | Gree Green Refrigeration Technology Center Co., Ltd. Of Zhuhai | GR202044006403 | 9 December, 2020 | Three years |
| 7 | Gree (Wuhan) Electric Appliances Co., Ltd. | GR201942003097 | 28 November, 2019 | Three years |
| 8 | Gree (Zhengzhou) Electric Appliances Co., Ltd. | GR202041001002 | 9 September, 2020 | Three years |
| 9 | Gree (Wuhu) Electric Appliances Co., Ltd. | GR202034002197 | 17 August, 2020 | Three years |
| 10 | Gree (Shijiazhuang) Electric Appliances Co., Ltd. | GR201913002804 | 2 December, 2019 | Three years |
| 11 | Zhuhai IVP Information Technology Co., Ltd. | GR201944005394 | 2 December, 2019 | Three years |
| 12 | Changsha Gree HVAC Equipment Co., Ltd. | GR202043000055 | 11 September, 2020 | Three years |
| 13 | Zhuhai Gree Precision Mold Co., Ltd. | GR202044007901 | 9 December, 2020 | Three years |
No.
| No. | Name of tax payer | Certificate number | Time for acquiring the certificate | Valid period |
| 14 | GREE (Zhongshan) Home Appliances Co., Ltd. | GR202044011848 | 9 December, 2020 | Three years |
| 15 | Hefei Kinghome Electrical Co., Ltd. | GR201834001303 | 24 July, 2018 | Three years |
| 16 | Zhuhai Gree New Material Co., Ltd. | GR201944009559 | 2 December, 2019 | Three years |
| 17 | Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | GR201913002825 | 2 December, 2019 | Three years |
| 18 | Zhuhai Gree Dakin Device Co., Ltd. | GR201844007626 | 28 November, 2018 | Three years |
| 19 | Zhuhai Gree Electrical and Mechanical Engineering Co., Ltd. | GR202044011411 | 9 December, 2020 | Three years |
| 20 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | GR202032012986 | 2 December, 2020 | Three years |
| 21 | Gree (Hangzhou) Electric Appliances Co., Ltd. | GR202033001006 | 1 December, 2020 | Three years |
| 22 | Hefei Landa Compressor Co., Ltd. | GR202034001654 | 17 August, 2020 | Three years |
| 23 | Zhengzhou Landa Compressor Co., Ltd. | GR202041001848 | 4 December, 2020 | Three years |
| 24 | Wuhan Landa Compressor Co., Ltd. | GR202042001716 | 1 December, 2020 | Three years |
| 25 | Hefei Kaibang Motor Manufacture Co., Ltd. | GR202034002198 | 17 August, 2020 | Three years |
| 26 | Henan Kaibang Motor Manufacture Co., Ltd. | GR202041000105 | 9 September, 2020 | Three years |
| 27 | Gree Electric Enterprises (Ma'anshan) Ltd. | GR202034001625 | 17 August, 2020 | Three years |
(3) The following subsidiaries of the Company enjoy the country's western development policy, and applied theincome tax rate of 15.00%.
| No. | Name of tax payer | Start time |
| 1 | Gree (Chongqing) Electric Appliances Co., Ltd. | 1 January, 2008 |
| 2 | Chongqing Landa Compressor Co., Ltd. | 1 January, 2015 |
| 3 | Chongqing Kaibang Motor Manufacture Co., Ltd. | 1 January, 2013 |
| 4 | Chengdu Gree Xinhui Medical Equipment Co., Ltd. | 8 April, 2020 |
V. Item notes of consolidated financial statementsFor the following note items (including notes to the main items of the parent company's financial statements),unless otherwise specified, "the beginning of the period" means 1 January, 2020, "the end of the period" means 31December, 2020, and "the end of the previous year" means 31 December, 2019, "the current year" refers to 2020,and "the previous year" refers to 2019. Unless otherwise stated, the amount unit is RMB Yuan.
1. Monetary capital
| Item | Balance at the end of the period | Beginning Balance |
| Cash on hand | 468,623.79 | 1,357,064.14 |
Item
| Item | Balance at the end of the period | Beginning Balance |
| Bank deposits | 78,022,377,237.18 | 62,105,349,148.41 |
| Other monetary capital [Note 1] | 18,693,373,853.14 | 10,695,206,587.82 |
| Deposits in central bank [Note 2] | 2,039,998,699.60 | 3,016,086,870.50 |
| Deposits in other banks | 35,190,517,674.79 | 47,928,688,430.00 |
| Subtotal | 133,946,736,088.50 | 123,746,688,100.87 |
| Including: Total amount deposited abroad | 637,626,876.23 | 631,329,193.55 |
| Accrued interest | 2,466,407,771.31 | 1,654,027,166.77 |
| Total | 136,413,143,859.81 | 125,400,715,267.64 |
[Note 1] The balance at the end of the period of other monetary capital refers to banks' acceptance bill deposits,guarantee deposits, letter of credit deposits, etc., where the restricted fund was RMB 18,297,513,521.07;[Note 2] The statutory deposit reserve in the Company's deposits in central bank are RMB 2,037,889,970.12, andits use is restricted;[Note 3] Except the above situations, there are no other funds in the end-of-period balance of monetary funds thathave limited use and potential recovery risks due to mortgage, pledge or freezing.
2. Trading financial assets
| Item | Balance at the end of the period | Beginning Balance |
| Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | 370,820,500.00 | 955,208,583.58 |
| Including: Debt instrument investment | 370,820,500.00 | 955,208,583.58 |
| Total | 370,820,500.00 | 955,208,583.58 |
3. Derivative financial assets
| Item | Balance at the end of the period | Beginning Balance |
| Forward foreign exchange settlement/sale | 285,494,153.96 | 92,392,625.69 |
| Total | 285,494,153.96 | 92,392,625.69 |
4. Accounts receivable
(1) Accounts receivables is disclosed by account age
| Account age | Balance at the end of the period |
| Within 1 year | 7,933,682,269.67 |
| 1 to 2 years | 603,725,306.34 |
| 2 to 3 years | 515,803,198.01 |
| Over 3 years | 438,137,210.08 |
| Subtotal | 9,491,347,984.10 |
Account age
| Account age | Balance at the end of the period |
| Less: Bad debt provisions | 753,117,078.66 |
| Total | 8,738,230,905.44 |
[Note] The Company's accounts receivable with the account age of over 1 year are mainly subsidy receivables ofRMB 1,121,467,230.00 for dismantling waste electrical and electronic products and receivables of RMB273,816,766.58 for commercial coal-to-electricity, subway and other commercial air-conditioning projects.
(2) Accounts receivable is disclosed by category
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Carrying amount | |||
| Amount | Percentage (%) | Amount | Percentage of appropriation (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 125,518,248.51 | 1.32 | 125,518,248.51 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 9,365,829,735.59 | 98.68 | 627,598,830.15 | 6.70 | 8,738,230,905.44 |
| Including: account age combination | 7,773,779,870.59 | 81.91 | 484,681,830.93 | 6.23 | 7,289,098,039.66 |
| Low risk combination | 1,592,049,865.00 | 16.77 | 142,916,999.22 | 8.98 | 1,449,132,865.78 |
| Total | 9,491,347,984.10 | 100.00 | 753,117,078.66 | 7.93 | 8,738,230,905.44 |
(Continued)
| Category | Beginning Balance | ||||
| Book balance | Bad debt provision | Carrying amount | |||
| Amount | Percentage (%) | Amount | Percentage of appropriation (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 132,904,666.21 | 1.45 | 132,904,666.21 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 9,030,300,257.90 | 98.55 | 590,580,560.90 | 6.54 | 8,439,719,697.00 |
| Including: account age combination | 7,743,407,932.90 | 84.51 | 486,153,539.81 | 6.28 | 7,257,254,393.09 |
| Low risk combination | 1,286,892,325.00 | 14.04 | 104,427,021.09 | 8.11 | 1,182,465,303.91 |
| Total | 9,163,204,924.11 | 100.00 | 723,485,227.11 | 7.90 | 8,439,719,697.00 |
1) Accounts receivable with bad debt provisions accrued separately:
| Name | Balance at the end of the period | |||
| Book balance | Bad debt provision | Percentage of appropriation (%) | Reason for appropriation | |
| A total of 10 units | 125,518,248.51 | 125,518,248.51 | 100.00 | Expected to be difficult to recover |
| Total | 125,518,248.51 | 125,518,248.51 | 100.00 | -- |
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
Account age
| Account age | Book balance | Bad debt provision | Percentage of appropriation (%) |
| Within 1 year | 7,463,099,634.67 | 373,154,982.04 | 5.00 |
| 1 to 2 years | 177,536,216.34 | 35,507,243.30 | 20.00 |
| 2 to 3 years | 114,248,828.01 | 57,124,414.02 | 50.00 |
| Over 3 years | 18,895,191.57 | 18,895,191.57 | 100.00 |
| Total | 7,773,779,870.59 | 484,681,830.93 | 6.23 |
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
3) In the combination, the accounts receivable with bad debt provisions accrued by low risk combination
| Name | Balance at the end of the period | ||
| Book balance | Bad debt provision | Percentage of appropriation (%) | |
| Low risk combination | 1,592,049,865.00 | 142,916,999.22 | 8.98 |
| Total | 1,592,049,865.00 | 142,916,999.22 | 8.98 |
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
(3) Bad debt provision appropriated, recovered or reversed in the current period
| Category | Beginning Balance | Change of the current period | Balance at the end of the period | |||
| Appropriation | Recovered or reversed | Wrote-off | Changes in the consolidation scope | |||
| Accrued separately | 132,904,666.21 | 7,385,343.48 | 1,074.22 | 125,518,248.51 | ||
| Account age combination | 486,153,539.81 | 5,712,733.52 | 7,880.50 | 4,248,905.14 | 484,681,830.93 | |
| Low risk combination | 104,427,021.09 | 38,489,978.13 | 142,916,999.22 | |||
| Total | 723,485,227.11 | 38,489,978.13 | 13,098,077.00 | 8,954.72 | 4,248,905.14 | 753,117,078.66 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Particulars on accounts receivable actually wrote-off in the current period
| Item | Wrote-off amount |
| A total of 3 units | 8,954.72 |
[Note] There was no significant writing-off of accounts receivable during the current period.
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Balance at the end of the period of accounts receivable | Percentage (%) in the total balance at the end of the period of accounts receivable | Balance of provision for bad debts at the end of the period |
| First | 1,592,049,865.00 | 16.77 | 142,916,999.22 |
| Second | 838,838,926.80 | 8.84 | 41,941,946.34 |
Name of entity
| Name of entity | Balance at the end of the period of accounts receivable | Percentage (%) in the total balance at the end of the period of accounts receivable | Balance of provision for bad debts at the end of the period |
| Third | 421,266,292.15 | 4.44 | 21,063,314.61 |
| Fourth | 252,078,651.19 | 2.66 | 12,603,932.56 |
| Fifth | 226,116,412.62 | 2.38 | 11,305,820.63 |
| Total | 3,330,350,147.76 | 35.09 | 229,832,013.36 |
(6) Accounts receivable derecognized due to the transfer of financial assetsNone.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivableNone.
5. Receivables financing
(1) Receivables financing is presented by category
| Item | Balance at the end of the period | Beginning Balance |
| Notes receivable measured at fair value | 20,973,404,595.49 | 28,226,248,997.12 |
| Including: Bank acceptance bills | 20,972,269,154.21 | 28,180,783,659.30 |
| Including: Notes accepted by Gree Finance Company | 1,105,774,342.96 | 3,534,750,791.04 |
| Commercial acceptance bills | 1,135,441.28 | 45,465,337.82 |
| Total | 20,973,404,595.49 | 28,226,248,997.12 |
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
(2) Receivables financing pledged by the Company at the end of the period
| Item | Pledged amount at the end of the period |
| Bank acceptance bills | 10,145,874,359.07 |
| Total | 10,145,874,359.07 |
(3) Receivables financing that has been endorsed or discounted by the Company at the end of the period but notyet due at the balance sheet date
| Item | Amount whose recognition is terminated at the end of the period | Amount whose recognition is not terminated at the end of the period |
| Bank acceptance bills [Note] | 37,016,180,562.63 | 4,585,817,500.00 |
| Commercial acceptance bills | 2,772,280.94 | |
| Total | 37,016,180,562.63 | 4,588,589,780.94 |
[Note] The acceptor of bank acceptance bills not derecognized at the end of the period mentioned above is ZhuhaiGree Group Finance Company Limited, a subsidiary of the Company, which has the final acceptance
responsibility for the discount or endorsement.
(4) Receivables financing transferred by the Company into accounts receivable due to the note issuer's failure ofperformanceNone.
(5) Receivables financing actually wrote-off in the current period
None.
6. Prepayment
(1) The prepayments are listed by account age as follows:
Account age
| Account age | Balance at the end of the period | Beginning Balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 3,103,519,802.42 | 99.18 | 2,375,291,199.19 | 99.15 |
| 1 to 2 years | 17,658,164.08 | 0.56 | 16,328,421.09 | 0.68 |
| 2 to 3 years | 5,665,338.67 | 0.18 | 1,401,531.66 | 0.06 |
| Over 3 years | 2,358,698.07 | 0.08 | 2,589,403.32 | 0.11 |
| Total | 3,129,202,003.24 | 100.00 | 2,395,610,555.26 | 100.00 |
(2) Prepayments of the current period whose account age exceeded one year and amount was importantNone.
(3) Prepayments of top 5 prepayment objects in the balance at the end of the period collected by the prepaymentobjectThe aggregate balance amount of prepayments of top 5 suppliers in the balance at the end of the period collectedby the supplier was RMB 1,486,335,222.60, accounting for 47.50% of the total balance of prepayments at the endof the period.
7. Other receivables
| Item | Balance at the end of the period | Beginning Balance |
| Other receivables | 147,338,547.86 | 159,134,399.10 |
| Total | 147,338,547.86 | 159,134,399.10 |
[Note] The Company had no interest receivable and dividend receivable balances at the end of the period and thebeginning of the period.
(1) Classification of other receivables by the nature of money
| Nature of money | Book balance at the end of the period | Book balance at the beginning of the period |
| Current and low-risk payments | 165,954,624.87 | 177,704,695.37 |
Nature of money
| Nature of money | Book balance at the end of the period | Book balance at the beginning of the period |
| Less: Bad debt provisions | 18,616,077.01 | 18,570,296.27 |
| Total | 147,338,547.86 | 159,134,399.10 |
(2) Particulars on accruing of bad debt provisions
| Bad debt provision | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as at 1 January, 2020 | 8,096,833.06 | 10,473,463.21 | 18,570,296.27 | |
| Appropriation for the current period | 18,370.11 | 18,370.11 | ||
| Reserved in the current period | 1,770,917.91 | 1,770,917.91 | ||
| Wrote-off in the current period | 50,920.20 | 50,920.20 | ||
| Changes in the consolidation scope during the current period | 1,051,982.28 | 797,266.46 | 1,849,248.74 | |
| Balance as at 31 December, 2020 | 7,377,897.43 | 11,238,179.58 | 18,616,077.01 |
(3) Disclosure by account age
| Account age | Book balance |
| Within 1 year | 151,127,945.46 |
| 1 to 2 years | 2,800,662.90 |
| 2 to 3 years | 2,695,938.99 |
| Over 3 years | 9,330,077.52 |
| Subtotal | 165,954,624.87 |
| Less: Bad debt provisions | 18,616,077.01 |
| Total | 147,338,547.86 |
(4) Bad debt provision appropriated, recovered or reversed in the current period
| Category | Beginning Balance | Change of the current period | Balance at the end of the period | |||
| Appropriation | Recovered or reversed | Wrote-off | Changes in the consolidation scope | |||
| Account age combination | 18,570,296.27 | 18,370.11 | 1,770,917.91 | 50,920.20 | 1,177,748.74 | 17,944,577.01 |
| Low risk combination | 671,500.00 | 671,500.00 | ||||
| Total | 18,570,296.27 | 18,370.11 | 1,770,917.91 | 50,920.20 | 1,849,248.74 | 18,616,077.01 |
[Note] There was no significant reversal or recovery of bad debt provisions during current period.
(5) Particulars on other receivables actually wrote-off in the current period
Item
| Item | Wrote-off amount |
| A total of 5 units | 50,920.20 |
[Note] There was no significant writing-off of other receivables during the current period.
(6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Nature of money | Balance at the end of the period | Account age | Proportion to the total balance of other receivables at the end of the period (%) | Balance of provision for bad debts at the end of the period |
| First | Intercourse funds | 28,070,764.04 | Within 1 year | 16.91 | 1,403,538.20 |
| Second | Low-risk money | 9,000,000.00 | Within 1 year | 5.42 | 355,500.00 |
| Third | Low-risk money | 8,000,000.00 | Within 1 year | 4.82 | 316,000.00 |
| Fourth | Intercourse funds | 7,162,906.75 | Within 1 year | 4.32 | 358,145.34 |
| Fifth | Intercourse funds | 5,483,816.35 | Within 1 year | 3.30 | 274,190.82 |
| Total | -- | 57,717,487.14 | -- | 34.77 | 2,707,374.36 |
(7) Receivables involving government subsidies
None.
(8) Other receivables derecognized due to the transfer of financial assets
None.
(9) Assets and liabilities formed due to the transfer and continuous involvement of other receivablesNone.
8. Inventories
(1) Classification of inventories
| Item | Balance at the end of the period | ||
| Book balance | Provision for the loss on decline in value of inventories or provision for the impairment of contract performance cost | Carrying amount | |
| Raw material | 8,959,268,217.85 | 388,954,526.10 | 8,570,313,691.75 |
| Goods in process and contract performance cost | 2,046,139,363.33 | 2,046,139,363.33 | |
| Finished goods | 15,761,579,871.16 | 108,259,680.25 | 15,653,320,190.91 |
| Development cost [Note] | 1,609,731,913.40 | 1,609,731,913.40 | |
| Total | 28,376,719,365.74 | 497,214,206.35 | 27,879,505,159.39 |
(Continued)
| Item | Beginning Balance |
Book balance
| Book balance | Provision for the loss on decline in value of inventories or provision for the impairment of contract performance cost | Carrying amount | |
| Raw material | 10,313,734,271.81 | 207,784,826.11 | 10,105,949,445.70 |
| Goods in process and contract performance cost | 1,833,675,212.23 | 1,833,675,212.23 | |
| Finished goods | 11,120,744,840.53 | 49,841,301.93 | 11,070,903,538.60 |
| Development cost | 1,074,325,867.76 | 1,074,325,867.76 | |
| Total | 24,342,480,192.33 | 257,626,128.04 | 24,084,854,064.29 |
[Note] The development cost is a supporting project of Luoyang base real estate developed and constructed by theCompany based on the housing needs of employees.
(2) Provision for obsolete stocks
| Item | Beginning Balance | Increased amount in the current period | Decreased amount in the current period | Balance at the end of the period |
| Appropriation | Write-off amount | |||
| Raw material | 207,784,826.11 | 256,488,647.08 | 75,318,947.09 | 388,954,526.10 |
| Finished goods | 49,841,301.93 | 80,148,006.02 | 21,729,627.70 | 108,259,680.25 |
| Total | 257,626,128.04 | 336,636,653.10 | 97,048,574.79 | 497,214,206.35 |
Specific bases for making a provision for decline in value of inventories and reasons of reversing or writing offthe provision for decline in value of inventories in the current period:
| Item | Specific basis for making a provision for decline in value of inventories | Writing off the provision for decline in value of inventories in the current period |
| Raw material | The lower of the inventory cost and net realizable value | Applied for or sold in the current period |
| Finished goods | The lower of the inventory cost and net realizable value | Sold in the current period |
(3) The inventory balance at the end of the period did contain capitalized amounts of borrowing costsNone.
(4) Amortization amount of the current period of contract performance costNone.
9. Contract assets
(1) Contract assets are disclosed by account age
| Account age | Balance at the end of the period |
| Within 1 year | 57,650,874.29 |
| 1 to 2 years | 26,198,716.11 |
2 to 3 years
| 2 to 3 years | 5,636,444.31 |
| Over 3 years | 2,300,800.00 |
| Subtotal | 91,786,834.71 |
| Less: provision for impairment | 13,241,309.11 |
| Total | 78,545,525.60 |
(2) Contract assets are disclosed by category
| Item | Balance at the end of the period | Beginning Balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Account age combination | 91,786,834.71 | 13,241,309.11 | 78,545,525.60 | 81,819,226.44 | 8,204,378.36 | 73,614,848.08 |
| Total | 91,786,834.71 | 13,241,309.11 | 78,545,525.60 | 81,819,226.44 | 8,204,378.36 | 73,614,848.08 |
[Note] The book value of contract assets did not change significantly during the current period.
(3) Particulars on impairment provisions accrued for contract assets in the current period:
| Item | Beginning Balance | Appropriation for the current period | Reserved in the current period | Resold/wrote-off in the current period | Balance at the end of the period |
| Account age combination | 8,204,378.36 | 5,036,930.75 | 13,241,309.11 | ||
| Total | 8,204,378.36 | 5,036,930.75 | 13,241,309.11 |
10. Non-current assets due within one year
| Item | Balance at the end of the period | Beginning Balance |
| Other debt investments due within one year | 410,404,100.00 | |
| Debt investments due within one year | 18,000,000.00 | |
| Subtotal | 428,404,100.00 | |
| Accrued interest | 16,993,610.39 | |
| Total | 445,397,710.39 |
11. Other current assets
| Item | Balance at the end of the period | Beginning Balance |
| Structured deposits and wealth management products | 8,274,000,000.00 | 16,211,800,000.00 |
| Input tax to be deducted and prepaid tax | 2,532,692,156.12 | 3,744,248,963.45 |
| Notes which have been endorsed or discounted but not yet due [Note] | 4,588,589,780.94 | 2,876,918,995.36 |
| Hedging tools and others | 104,308,689.13 | 37,399,876.25 |
| Subtotal | 15,499,590,626.19 | 22,870,367,835.06 |
| Accrued interest | 117,711,287.68 | 220,776,381.62 |
Item
| Item | Balance at the end of the period | Beginning Balance |
| Total | 15,617,301,913.87 | 23,091,144,216.68 |
[Note] As of the disclosure date of this report, the accepted amount of the notes that have endorsed or discountedbut have not yet expired was RMB 1,695,817,500.00.
12. Disbursement of loans statements and advances
(1) Distribution of enterprises and individuals
| Item | Balance at the end of the period | Beginning Balance |
| Disbursement of loans statements and advances measured at amortized costs: | ||
| Disbursement of corporate loans and advances | 5,403,251,177.80 | 14,771,705,384.26 |
| Including: (1) Loan | 3,857,680,000.00 | 14,723,530,000.00 |
| (2) Discount | 1,545,571,177.80 | 48,175,384.26 |
| Including: discount asset interest adjustment | -7,547,171.66 | -470,366.74 |
| Less: loan loss provision | 135,269,958.74 | 369,304,393.78 |
| Including: combined appropriation | 135,269,958.74 | 369,304,393.78 |
| Subtotal | 5,267,981,219.06 | 14,402,400,990.48 |
| Accrued interest | 5,824,362.46 | 21,385,418.74 |
| Book value of disbursement of corporate loans and advances | 5,273,805,581.52 | 14,423,786,409.22 |
[Note] During the current period, affected by the epidemic, the business scale of member units and upstream anddownstream enterprises fell, and the Company carefully verified the credit information and repayment ability ofloan customers, so the scale of disbursement of loans and advances declined to a certain extent.
(2) Changes in loss provision for loans
| Item | Balance at the end of the period | Beginning Balance |
| Disbursement of loans statements and advances measured at amortized costs: | ||
| Beginning Balance | 369,304,393.78 | 232,937,547.86 |
| Appropriation for the current period | -234,034,435.04 | 136,366,845.92 |
| Balance at the end of the period | 135,269,958.74 | 369,304,393.78 |
13. Other debt investments
(1) Particulars on other debt investments
| Item | Balance at the end of the period |
Cost
| Cost | Accrued interest | Changes in fair value | Carrying amount | Accumulated loss provisions recognized in other comprehensive income | |
| Treasuries | 292,922,755.76 | 3,378,082.20 | 2,565,844.24 | 298,866,682.20 | |
| Corporate bonds | 199,243,635.63 | 1,890,410.97 | 2,201,564.37 | 203,335,610.97 | |
| Subtotal | 492,166,391.39 | 5,268,493.17 | 4,767,408.61 | 502,202,293.17 | |
| Less: Other debt investments due within one year | |||||
| Total | 492,166,391.39 | 5,268,493.17 | 4,767,408.61 | 502,202,293.17 |
(Continued)
| Item | Beginning Balance | ||||
| Cost | Accrued interest | Changes in fair value | Carrying amount | Accumulated loss provisions recognized in other comprehensive income | |
| Treasuries | 291,763,065.93 | 3,378,082.20 | 1,695,134.07 | 296,836,282.20 | |
| Corporate bonds | 409,921,468.45 | 16,385,260.26 | 482,631.55 | 426,789,360.26 | |
| Subtotal | 701,684,534.38 | 19,763,342.46 | 2,177,765.62 | 723,625,642.46 | |
| Less: Other debt investments due within one year | 409,921,468.45 | 16,385,260.26 | 482,631.55 | 426,789,360.26 | |
| Total | 291,763,065.93 | 3,378,082.20 | 1,695,134.07 | 296,836,282.20 | |
(2) Important other debt investments
| Other debt items | Balance at the end of the period | Beginning Balance | ||||||
| Face value | Coupon rate | Real interest rate | Date due | Face value | Coupon rate | Real interest rate | Date due | |
| 16 Interest-bearing treasuries 17 | 200,000,000.00 | 2.74% | 3.10% | 4 August, 2026 | 200,000,000.00 | 2.74% | 3.10% | 4 August, 2026 |
| 16 Interest-bearing treasuries 17 | 100,000,000.00 | 2.74% | 3.44% | 4 August, 2026 | 100,000,000.00 | 2.74% | 3.44% | 4 August, 2026 |
| 17 Baoanji MTN001 | 60,000,000.00 | 6.20% | 6.24% | 18 August, 2020 | ||||
| 10 State grid bonds 01 | 350,000,000.00 | 4.74% | 4.98% | 5 February, 2020 | ||||
| 20 Nongfa 08 | 200,000,000.00 | 3.45% | 3.54% | 23 September, 2025 | ||||
| Total | 500,000,000.00 | —— | —— | —— | 710,000,000.00 | —— | —— | —— |
14. Long-term equity investment
Name of invested entities
| Name of invested entities | Beginning Balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||||
| Original value | Provision for impairment | Additional investment | Disinvestment | Investment profits/losses recognized under the equity method | Adjustment of other comprehensive income | Changes in other equities | Cash dividends or profits declared to distribute | Provision for impairment | Others | Original value | Provision for impairment | |
| 1. Joint venture | ||||||||||||
| Songyuan Grain Group Co., Ltd. [Note 1] | 74,672,147.86 | 150,000,000.00 | 24,532,722.21 | 2,932,373.42 | -246,272,496.65 | |||||||
| Subtotal | 74,672,147.86 | 150,000,000.00 | 24,532,722.21 | 2,932,373.42 | -246,272,496.65 | |||||||
| 2. Associates | ||||||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | ||||||||
| Liaowang All Media Communication Co., Ltd. | 31,511,790.36 | 1,574,756.85 | 2,966,412.88 | 36,052,960.09 | ||||||||
| Beijing Gree Technology Co., Ltd. | 2,701,833.71 | -407,582.62 | 2,294,251.09 | |||||||||
| Chongqing Pargo Mechanical Equipment Co., Ltd. | 11,565,505.21 | -316,275.18 | 11,249,230.03 | |||||||||
| Gree Volinco (Hong Kong) Ltd. | 924,327.19 | 1,169,388.58 | 427,819.56 | -182,758.17 | ||||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 14,574,841.85 | 154,246.07 | 14,729,087.92 | |||||||||
| Hunan Guoxin Semiconductor Technology Co., Ltd. | 10,010,170.50 | 10,000,000.00 | 89,674.97 | 20,099,845.47 | ||||||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | 6,867,715,580.60 | -21,142,722.89 | 215,136,201.85 | 7,061,709,059.56 | ||||||||
| Henan Yuze Finance Leasing Co., Ltd. | 50,509,964.01 | 1,286,191.49 | 509,963.75 | 51,286,191.75 | ||||||||
| Zhuhai Hanling Equity Investment Partnership (Limited Partnership) [Note 2] | 920,000,000.00 | 29,115,512.75 | 26,695,076.52 | 922,420,436.23 | ||||||||
| Subtotal | 6,991,454,022.78 | 1,940,009.35 | 930,000,000.00 | 1,169,388.58 | 10,781,621.00 | 214,953,443.68 | 2,966,412.88 | 27,205,040.27 | 8,121,781,071.49 | 1,940,009.35 | ||
Name of invested entities
| Name of invested entities | Beginning Balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||||
| Original value | Provision for impairment | Additional investment | Disinvestment | Investment profits/losses recognized under the equity method | Adjustment of other comprehensive income | Changes in other equities | Cash dividends or profits declared to distribute | Provision for impairment | Others | Original value | Provision for impairment | |
| Total | 7,066,126,170.64 | 1,940,009.35 | 1,080,000,000.00 | 1,169,388.58 | 35,314,343.21 | 214,953,443.68 | 2,966,412.88 | 30,137,413.69 | -246,272,496.65 | 8,121,781,071.49 | 1,940,009.35 | |
[Note 1] In September 2020, according to the capital increase and share expansion agreement signed by the company and Songyuan Financial InvestmentManagement Center, a shareholder of the Company's joint venture Songyuan Grain Group Co., Ltd., the Company increased the capital to Songyuan Grain by RMB150,000,000.00, with the shareholding ratio increasing from 50.00% to 75.00%, and the industrial and commercial registration change was completed on 14September, 2020. On 31 December, 2020, Songyuan Grain's board of directors was re-elected with 5 board members, and the Company elected 4 directors of them,accounting for 80.00% of all members of the board of directors. According to the Articles of Association of Songyuan Grain, the Company had control overSongyuan Grain. At the end of the period, Songyuan Grain was included in the scope of consolidation. Long-term equity investment was accounted by the costmethod other than the equity method, and the book value of the original long-term equity investment was transferred into the initial investment cost of long-termequity investment accounted by the cost method.[Note 2] For the current period, the Company's wholly-owned subsidiary Zhuhai IVP Information Technology Co., Ltd. invested RMB 920,000,000.00 as a limitedpartner into Zhuhai Hanling Equity Investment Partnership (Limited Partnership), which is mainly engaged in equity investment in industry chain companies relatedto semiconductor and 5G technology.
15. Other equity instrument investments
(1) Particulars on other equity instrument investments
Item
| Item | Balance at the end of the period | Beginning Balance |
| Shanghai Highly (Group) Co., Ltd. | 667,802,216.81 | 775,199,650.33 |
| Xinjiang Joinworld Company Limited | 215,172,336.36 | 210,550,455.81 |
| Wingtech Technology Co., Ltd. [Note 1] | 3,550,040,505.00 | 3,316,957,037.50 |
| RSMACALLINE-HSHS | 254,461,858.93 | 341,894,553.87 |
| San'an Optoelectronics Co., Ltd. [Note 2] | 3,093,928,974.37 | |
| COFCO Trading (Suibin) Agricultural Development Co., Ltd. | 7,000,000.00 | |
| Total | 7,788,405,891.47 | 4,644,601,697.51 |
[Note 1] The Company directly holds 35,858,995 shares of Wingtech Technology Co., Ltd., and the sale of such shares is restricted for 36 months from the date ofregistration of the newly-added shares;[Note 2] For the current period, the Company subscribed for 114,547,537 non-publicly issued shares of San'an Optoelectronics Co., Ltd. with its self-owned funds ofRMB 2,000,000,000.00, with a shareholding ratio of 2.56%. The sale of such shares is restricted for 36 months from the date of registration of the newly-addedshares.
(2) Particulars on non-trading equity instrument investment
| Item Name | Dividend income recognized | Accumulated gains | Accumulated losses | Amount transferred from other comprehensive income into retained earnings | Reason for designation as at fair value through other comprehensive income | Reason for the amount transferred from other comprehensive income into retained earnings |
Item Name
| Item Name | Dividend income recognized | Accumulated gains | Accumulated losses | Amount transferred from other comprehensive income into retained earnings | Reason for designation as at fair value through other comprehensive income | Reason for the amount transferred from other comprehensive income into retained earnings |
| Shanghai Highly (Group) Co., Ltd. | 17,265,162.85 | 474,800,740.04 | According to the management's intention and contractual cash flow | |||
| Xinjiang Joinworld Company Limited | 2,752,293.54 | 59,849,259.12 | 19,987,915.96 | According to the management's intention and contractual cash flow | Partial sale of shares | |
| Wingtech Technology Co., Ltd. | 5,378,849.25 | 2,665,040,508.40 | According to the management's intention and contractual cash flow | |||
| San'an Optoelectronics Co., Ltd. | 1,093,928,974.37 | According to the management's intention and contractual cash flow | ||||
| RSMACALLINE-HSHS | 12,924,322.85 | 404,350,382.71 | According to the management's intention and contractual cash flow | |||
| Total | 38,320,628.49 | 3,818,818,741.89 | 879,151,122.75 | 19,987,915.96 |
16. Other non-current financial assets
| Item | Balance at the end of the period | Beginning Balance |
| Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | 2,003,483,333.33 | 2,003,483,333.33 |
| Including: trust products | 2,003,483,333.33 | 2,003,483,333.33 |
| Total | 2,003,483,333.33 | 2,003,483,333.33 |
17. Investment real estate
Investment real estate using cost measurement model
Item
| Item | Houses and buildings | Total |
| I. Total of original carrying amount | ||
| 1. Beginning balance | 703,795,397.10 | 703,795,397.10 |
| 2. Increased amount in the current period | 45,403,141.22 | 45,403,141.22 |
| Including:(1) Transfer-in from fixed assets | 42,951,618.75 | 42,951,618.75 |
| (2) Transfer-in from construction in progress | 2,451,522.47 | 2,451,522.47 |
| 3. Decreased amount in the current period | 42,540,103.02 | 42,540,103.02 |
| Including: Transfer into fixed assets | 42,540,103.02 | 42,540,103.02 |
| 4. Balance at the end of the period | 706,658,435.30 | 706,658,435.30 |
| II. Accumulated depreciation and accumulated amortization | ||
| 1. Beginning balance | 205,146,705.25 | 205,146,705.25 |
| 2. Increased amount in the current period | 48,213,778.91 | 48,213,778.91 |
| Including: (1) appropriation or amortization | 38,536,870.05 | 38,536,870.05 |
| (2) Transfer-in from fixed assets | 9,676,908.86 | 9,676,908.86 |
| 3. Decreased amount in the current period | 10,122,910.25 | 10,122,910.25 |
| Including: Transfer into fixed assets | 10,122,910.25 | 10,122,910.25 |
| 4. Balance at the end of the period | 243,237,573.91 | 243,237,573.91 |
| III. Provision for impairment | ||
| 1. Beginning balance | ||
| 2. Increased amount in the current period | ||
| 3. Decreased amount in the current period |
Item
| Item | Houses and buildings | Total |
| 4. Balance at the end of the period | ||
| IV. Carrying amount | ||
| 1. Carrying amount at the end of the period | 463,420,861.39 | 463,420,861.39 |
| 2. Carrying amount at the beginning of the period | 498,648,691.85 | 498,648,691.85 |
[Note] As of 31 December, 2020, the book value of investment real estate - houses and buildings of which the Company has not obtained theproperty ownership certificates was RMB 47,091,436.92.
18. Fixed assets
| Item | Balance at the end of the period | Beginning Balance |
| Fixed assets | 18,983,485,128.88 | 19,111,024,793.28 |
| Fixed assets in liquidation | 7,039,959.06 | 10,905,963.76 |
| Total | 18,990,525,087.94 | 19,121,930,757.04 |
[Note] The fixed assets in the table above refer to the fixed assets after deduction of the fixed assets in liquidation.
(1) Information of fixed assets
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipments | Total |
| 1. Total of original carrying amount: | ||||||
| 1. Beginning balance | 16,308,346,541.92 | 15,066,839,010.59 | 1,098,745,908.47 | 1,428,923,983.60 | 451,726,740.23 | 34,354,582,184.81 |
| 2. Increased amount in the current period | 1,080,298,026.70 | 1,834,546,239.94 | 85,799,675.40 | 283,944,842.56 | 73,927,719.71 | 3,358,516,504.31 |
| Including: (1) Procurement | 1,355,973,321.64 | 81,820,961.66 | 282,524,178.35 | 72,913,748.00 | 1,793,232,209.65 | |
| (2) Transfer-in from construction in progress | 951,229,567.70 | 445,685,385.89 | 1,396,914,953.59 |
Item
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipments | Total |
| (3) Increase by business combination | 86,528,355.98 | 32,887,532.41 | 3,978,713.74 | 1,420,664.21 | 1,013,971.71 | 125,829,238.05 |
| (4) Amount transferred into investment real estate | 42,540,103.02 | 42,540,103.02 | ||||
| 3. Decreased amount in the current period | 42,951,618.75 | 146,213,511.70 | 15,130,725.98 | 15,606,746.87 | 22,488,696.89 | 242,391,300.19 |
| Including: (1) Disposal or scrapping | 146,213,511.70 | 15,130,725.98 | 15,606,746.87 | 22,488,696.89 | 199,439,681.44 | |
| (2) Transfer into investment real estate | 42,951,618.75 | 42,951,618.75 | ||||
| 4. Difference arising from translation of financial statements in foreign currency | -40,902,758.22 | -15,600,751.41 | -867,866.03 | -636,058.43 | -541,835.46 | -58,549,269.55 |
| 5. Balance at the end of the period | 17,304,790,191.65 | 16,739,570,987.42 | 1,168,546,991.86 | 1,696,626,020.86 | 502,623,927.59 | 37,412,158,119.38 |
| II. Accumulated depreciation | ||||||
| 1. Beginning balance | 4,459,757,662.14 | 8,419,614,480.38 | 720,270,236.75 | 1,269,129,123.13 | 357,450,229.78 | 15,226,221,732.18 |
| 2. Increased amount in the current period | 1,022,568,689.56 | 1,884,080,477.93 | 157,047,328.21 | 267,843,059.67 | 39,652,620.54 | 3,371,192,175.91 |
| Including: (1) Appropriation | 1,001,034,619.35 | 1,877,641,590.24 | 154,988,130.53 | 266,939,954.96 | 38,237,721.91 | 3,338,842,016.99 |
| (2) Amount transferred into investment real estate | 10,122,910.25 | 10,122,910.25 | ||||
| (3) Increase by business combination | 11,411,159.96 | 6,438,887.69 | 2,059,197.68 | 903,104.71 | 1,414,898.63 | 22,227,248.67 |
| 3. Decreased amount in the current period | 9,676,908.86 | 119,065,403.98 | 14,083,987.09 | 13,585,761.08 | 18,635,042.68 | 175,047,103.69 |
| Including: (1) Disposal or scrapping | 119,065,403.98 | 14,083,987.09 | 13,585,761.08 | 18,635,042.68 | 165,370,194.83 | |
| (2) Transfer into investment real estate | 9,676,908.86 | 9,676,908.86 | ||||
| 4. Difference arising from translation of financial statements in foreign currency | -946,766.61 | -8,310,025.94 | -263,872.67 | -608,854.58 | -326,499.36 | -10,456,019.16 |
| 5. Balance at the end of the period | 5,471,702,676.23 | 10,176,319,528.39 | 862,969,705.20 | 1,522,777,567.14 | 378,141,308.28 | 18,411,910,785.24 |
| III. Provision for impairment |
Item
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipments | Total |
| 1. Beginning balance | 13,788,472.27 | 3,100,613.50 | 8,282.39 | 131,160.63 | 307,130.56 | 17,335,659.35 |
| 2. Increased amount in the current period | ||||||
| 3. Decreased amount in the current period | 167,803.12 | 167,803.12 | ||||
| Including: Disposal or scrap | 167,803.12 | 167,803.12 | ||||
| 4. Difference arising from translation of financial statements in foreign currency | -405,650.97 | -405,650.97 | ||||
| 5. Balance at the end of the period | 13,788,472.27 | 2,694,962.53 | 8,282.39 | 131,160.63 | 139,327.44 | 16,762,205.26 |
| IV. Carrying amount | ||||||
| 1. Carrying amount at the end of the period | 11,819,299,043.15 | 6,560,556,496.50 | 305,569,004.27 | 173,717,293.09 | 124,343,291.87 | 18,983,485,128.88 |
| 2. Carrying amount at the beginning of the period | 11,834,800,407.51 | 6,644,123,916.71 | 378,467,389.33 | 159,663,699.84 | 93,969,379.89 | 19,111,024,793.28 |
[Note] As of 31 December, 2020, the book value of fixed assets - houses and buildings that the Company has not obtained the property ownership certificates wasRMB 5,879,273,020.73.
(2) Information of temporary idle fixed assets
None.
(3) Information of fixed assets leased in through financing leases
None.
(4) Information of fixed assets leased out through operating leases
None.
(5) Fixed assets in liquidation
Item
| Item | Balance at the end of the period | Beginning Balance |
| Fixed assets in liquidation | 7,039,959.06 | 10,905,963.76 |
| Total | 7,039,959.06 | 10,905,963.76 |
19. Construction in Progress
| Item | Balance at the end of the period | Beginning Balance |
| Construction in Progress | 4,016,082,730.07 | 2,431,051,409.94 |
| Total | 4,016,082,730.07 | 2,431,051,409.94 |
[Note] The construction in progress in the above table refers to the construction in progress after deduction ofengineering materials.
(1) Information of construction in progress
| Item | Balance at the end of the period | Beginning Balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Gree Nanjing Project | 1,141,086,342.69 | 1,141,086,342.69 | 333,459,029.75 | 333,459,029.75 | ||
| Gree Luoyang Project | 1,046,021,393.89 | 1,046,021,393.89 | 442,202,237.46 | 442,202,237.46 | ||
| Gree HQ project | 570,077,306.55 | 570,077,306.55 | 262,245,182.66 | 262,245,182.66 | ||
| Gree Chengdu Project | 260,766,823.26 | 260,766,823.26 | 36,203,794.46 | 36,203,794.46 | ||
| Gree Wuhan project | 201,062,491.78 | 201,062,491.78 | 104,859,292.68 | 104,859,292.68 | ||
| Gree Energy Project | 150,133,461.00 | 150,133,461.00 | 8,781,438.20 | 8,781,438.20 | ||
| Gree Hangzhou project | 145,541,748.96 | 145,541,748.96 | 638,157,589.99 | 638,157,589.99 | ||
| Wu'an Precision Project | 130,390,603.41 | 130,390,603.41 | 113,318,790.64 | 113,318,790.64 | ||
| Zhuhai Landa Project | 79,117,085.15 | 79,117,085.15 | 132,330,042.15 | 132,330,042.15 | ||
| Gree Gaolan Port Project | 62,939,878.48 | 62,939,878.48 | ||||
Item
| Item | Balance at the end of the period | Beginning Balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Gree Zhengzhou project | 43,680,322.62 | 43,680,322.62 | 59,928,438.47 | 59,928,438.47 | ||
| Others | 185,265,272.28 | 185,265,272.28 | 299,565,573.48 | 299,565,573.48 | ||
| Total | 4,016,082,730.07 | 4,016,082,730.07 | 2,431,051,409.94 | 2,431,051,409.94 | ||
(2) Current-period changes in important construction projects in progress
| Item Name | Beginning Balance | Increased amount in the current period | Amount transferred into fixed assets during the current period | Amount transferred into investment real estate during the current period | Balance at the end of the period | Including: Amount of capitalization of interests for the current period |
| Gree Nanjing Project | 333,459,029.75 | 807,627,312.94 | 1,141,086,342.69 | 32,349,138.79 | ||
| Gree Luoyang Project | 442,202,237.46 | 603,819,156.43 | 1,046,021,393.89 | |||
| Gree HQ project | 262,245,182.66 | 325,415,305.13 | 17,583,181.24 | 570,077,306.55 | ||
| Gree Chengdu Project | 36,203,794.46 | 227,395,480.68 | 2,832,451.88 | 260,766,823.26 | 6,350,168.86 | |
| Gree Wuhan project | 104,859,292.68 | 110,932,985.42 | 14,729,786.32 | 201,062,491.78 | ||
| Gree Energy Project | 8,781,438.20 | 141,352,022.80 | 150,133,461.00 | |||
| Gree Hangzhou project | 638,157,589.99 | 206,711,133.67 | 699,326,974.70 | 145,541,748.96 | ||
| Wu'an Precision Project | 113,318,790.64 | 126,876,912.82 | 109,805,100.05 | 130,390,603.41 | 3,076,100.00 | |
| Zhuhai Landa Project | 132,330,042.15 | 65,711,569.34 | 118,924,526.34 | 79,117,085.15 | ||
| Gree Gaolan Port Project | 62,939,878.48 | 62,939,878.48 | ||||
| Gree Zhengzhou project | 59,928,438.47 | 25,345,655.78 | 41,268,394.37 | 325,377.26 | 43,680,322.62 | |
| Others | 299,565,573.48 | 280,270,382.70 | 392,444,538.69 | 2,126,145.21 | 185,265,272.28 | |
| Total | 2,431,051,409.94 | 2,984,397,796.19 | 1,396,914,953.59 | 2,451,522.47 | 4,016,082,730.07 | 41,775,407.65 |
(3) Appropriation of provisions for impairment of construction in progress during the current periodNone.
20. Intangible assets
Information of intangible assets
| Item | Land use rights | Patent rights and others | Total |
Item
| Item | Land use rights | Patent rights and others | Total |
| I. Total of original carrying amount | |||
| 1. Beginning balance | 5,854,129,734.47 | 954,740,585.36 | 6,808,870,319.83 |
| 2. Increased amount in the current period | 725,730,155.06 | 9,150,598.27 | 734,880,753.33 |
| Including: (1) Procurement | 685,309,804.34 | 5,330,843.55 | 690,640,647.89 |
| (2) Increase by business combination | 40,420,350.72 | 3,819,754.72 | 44,240,105.44 |
| 3. Decreased amount in the current period | 53,855,560.00 | 53,855,560.00 | |
| Including: Write-off [Note 1] | 53,855,560.00 | 53,855,560.00 | |
| 4. Balance at the end of the period | 6,579,859,889.53 | 910,035,623.63 | 7,489,895,513.16 |
| II. Accumulated amortization | |||
| 1. Beginning balance | 679,591,202.19 | 48,448,467.78 | 728,039,669.97 |
| 2. Increased amount in the current period | 131,815,254.70 | 81,877,189.67 | 213,692,444.37 |
| Including: (1) Appropriation | 129,811,531.31 | 81,515,915.43 | 211,327,446.74 |
| (2) Increase by business combination | 2,003,723.39 | 361,274.24 | 2,364,997.63 |
| 3. Decreased amount in the current period | 53,855,560.00 | 53,855,560.00 | |
| Including: write-off | 53,855,560.00 | 53,855,560.00 | |
| 4. Balance at the end of the period | 811,406,456.89 | 76,470,097.45 | 887,876,554.34 |
| III. Provision for impairment | |||
| 1. Beginning balance | 775,289,550.94 | 775,289,550.94 | |
| 2. Increased amount in the current period | |||
| 3. Decreased amount in the current period | 51,559,354.76 | 51,559,354.76 | |
| Including: write-off | 51,559,354.76 | 51,559,354.76 | |
| 4. Balance at the end of the period | 723,730,196.18 | 723,730,196.18 | |
| IV. Carrying amount | |||
| 1. Carrying amount at the end of the period | 5,768,453,432.64 | 109,835,330.00 | 5,878,288,762.64 |
| 2. Carrying amount at the beginning of the period | 5,174,538,532.28 | 131,002,566.64 | 5,305,541,098.92 |
[Note 1] Write-off amounts of intangible assets - patented technology and others in the current period were theused quota licensing rights;[Note 2] As of 31 December, 2020, the book value of intangible assets of which the Company has not obtained theproperty ownership certificates was RMB 51,441,805.00.[Note 3] There were no intangible assets formed through the Company's internal research and development duringthe current period.
21. Business reputation
(1) Original carrying amount of business reputation
Name of invested entity or matter generating
business reputation
| Name of invested entity or matter generating business reputation | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period | ||
| Formed by business combination | Others | Disposal | Others | |||
| Kinghome Hefei Electrical Co., Ltd. | 51,804,350.47 | 51,804,350.47 | ||||
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 274,115,040.11 | 274,115,040.11 | ||||
| Total | 325,919,390.58 | 325,919,390.58 | ||||
(2) Provision for impairment of business reputation
| Name of invested entity or matter generating business reputation | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period | ||
| Appropriation | Others | Disposal | Others | |||
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 124,016,686.56 | 124,016,686.56 | ||||
| Total | 124,016,686.56 | 124,016,686.56 | ||||
[Note] The Company acquired 94.30% of the equity of Nanjing Walsin Nonferrous Metal Co., Ltd., forming abusiness reputation of RMB 274,115,040.11. According to the Appraisal Report on the Impairment Test Project ofNanjing Walsin Nonferrous Metal Co., Ltd. Involved by Zhuhai Gree Electrical Co., Ltd. for the Purpose ofFinancial Reporting with the report number of China Alliance Appraisal Report [2021] No. 040203 issued byChina Alliance Appraisal Co., Ltd., RMB 124,016,686.56 of impairment provision was accrued for theabove-mentioned business reputation formed due to the acquisition in the current period.
(3) Business reputation group and impairment test
1) Information about the asset or combination of asset groups where the business reputation is includedThe Company tested the impairment of business reputation by combining the asset group related to businessreputation that can benefit from the synergistic effect of business combination. Because it was difficult to directlyobtain the fair market value of the asset group containing business reputation, the Company calculated therecoverable amount of the asset group by using the method of predicting the present value of future cash flow.After comprehensively considering factors such as production and operation activities management, monitoringmethods, continuous use and disposal, the asset group containing business reputation was finally determined. Atthe end of the period, the asset group where the business reputation was located was consistent with the assetsgroup determined when the business reputation was formed on the acquisition date, and its composition has notchanged. The information on the asset group including business reputation was as follows:
Unit: 10,000 Yuan
| Serial number | Name of assets | Book value of asset group |
| 1 | Fixed assets | 12,076.05 |
| 2 | Construction in progress | 945.97 |
| 3 | Intangible assets | 11,260.87 |
Serial number
| Serial number | Name of assets | Book value of asset group |
| 4 | Business reputation [Note] | 29,068.40 |
| Total | 53,351.29 |
[Note] The business reputation shown in the above table included the part attributable to minority shareholders.
2) Important assumptions and key parameters of business reputation impairment test:
A. Assumption of orderly transactions: orderly transactions refer to transactions where the relevant assets orliabilities have usual market activities during a period of time before the measurement date;B. Assumption of going concern: assumption of going concern refers to the assumption that the asset group willbe used normally and continuously according to the purpose and use method of the benchmark date, and there willbe no unforeseen factors that will cause it to fail to continue operations, and the valuation method, parameters andbasis will be determined accordingly;C. It is assumed that the Company has no major changes in the core management team, technical team, andmarketing team based on the existing management methods and levels, and no other human force majeure andunforeseen factors have a major adverse impact on the Company;D. Given the Company's operation and production are mainly to earn processing profits, the fluctuation of rawmaterial prices does not have a substantial impact on the Company's operating profits, therefore, it is assumed thatthe raw material prices will remain unchanged in the coming years in the evaluation.When conducting the asset impairment test, the Company estimated the expected return on investment of propertyrights holders based on the analysis and calculation of selected and compared companies. After the calculation, thepre-tax discount rate used in the impairment test was 12.70%.
3) Evaluation results of business reputation impairment test
Unit: 10,000 Yuan
| Company Name | Book value of asset group | Recoverable amount of asset group | Business reputation impairment amount |
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 53,351.29 | 40,200.00 | 13,151.29 |
According to the Appraisal Report on the Impairment Test Project of Nanjing Walsin Nonferrous Metal Co., Ltd.Involved by Zhuhai Gree Electrical Co., Ltd. for the Purpose of Financial Reporting with the report number ofChina Alliance Appraisal Report [2021] No. 040203 issued by China Alliance Appraisal Co., Ltd., the asset groupincluding business reputation should be provided with a business reputation impairment loss of RMB131,512,923.18, of which the business reputation impairment loss attributable to shareholders of the parentcompany should be RMB 124,016,686.56.
22. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
| Item | Balance at the end of the period | Beginning Balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Assets depreciation reserves | 1,945,939,722.60 | 331,079,465.72 | 1,818,201,959.97 | 324,279,108.41 |
Item
| Item | Balance at the end of the period | Beginning Balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Deductible loss | 929,716,127.83 | 200,650,142.61 | 442,563,341.90 | 106,861,346.18 |
| Accrued expenses | 70,734,519,794.58 | 10,612,752,964.88 | 78,082,911,509.22 | 11,713,704,909.46 |
| Payroll payable | 1,138,661,981.04 | 177,276,992.60 | 1,147,772,355.98 | 181,068,388.98 |
| Amortization of assets | 277,892,654.00 | 42,292,876.53 | 295,771,738.84 | 45,001,546.37 |
| Others | 1,051,311,939.85 | 186,239,758.68 | 1,115,621,255.53 | 170,169,778.69 |
| Total | 76,078,042,219.90 | 11,550,292,201.02 | 82,902,842,161.44 | 12,541,085,078.09 |
(2) Deferred income tax liabilities not offset
| Item | Balance at the end of the period | Beginning Balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Changes in fair value of derivative financial assets | 894,532,218.27 | 172,009,915.29 | 144,585,199.56 | 23,711,924.81 |
| Accrued interest | 2,595,212,306.29 | 481,753,397.01 | 1,916,560,659.72 | 361,013,520.74 |
| Amortization of assets | 1,150,514,923.85 | 188,338,452.95 | 977,566,325.96 | 159,701,815.27 |
| Changes in fair value of other equity instrument investments | 3,360,535,396.59 | 504,080,309.49 | 2,082,567,402.93 | 312,385,110.44 |
| Others | 283,463,076.51 | 64,929,028.10 | 320,552,939.98 | 70,976,930.01 |
| Total | 8,284,257,921.51 | 1,411,111,102.84 | 5,441,832,528.15 | 927,789,301.27 |
(3) Details of deferred income tax assets which were not recognized
| Item | Balance at the end of the period | Beginning Balance |
| Deductible temporary differences | 741,969,846.84 | 523,331,619.91 |
| Deductible loss | 202,245,092.25 | 196,707,582.91 |
| Total | 944,214,939.09 | 720,039,202.82 |
(4) The deductible losses of deferred income tax assets not recognized will become due in the following years:
| Year | Amount at the end of the period | Amount at the beginning of the period |
| 2023 | 30,888,536.25 | 33,889,569.81 |
| 2024 | 196,543.53 | 4,243.31 |
| 2025 | 8,502,385.16 | |
| 2029 | 437,450.85 | |
| Open-ended | 162,657,627.31 | 162,376,318.94 |
| Total | 202,245,092.25 | 196,707,582.91 |
23. Other non-current assets
Item
| Item | Balance at the end of the period | Beginning Balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Advance payment for equipment | 642,531,256.64 | 642,531,256.64 | 600,147,738.32 | 600,147,738.32 | ||
| Advance payment for the project and deposit | 111,813,697.80 | 111,813,697.80 | 210,752,497.85 | 210,752,497.85 | ||
| Advance payment of land transfer fee and others | 33,773,076.96 | 33,773,076.96 | 137,427,798.96 | 137,427,798.96 | ||
| Total | 788,118,031.40 | 788,118,031.40 | 948,328,035.13 | 948,328,035.13 | ||
24. Short-term borrowing
(1) Classification of short-term borrowings
| Item | Balance at the end of the period | Beginning Balance |
| Pledge loans | 10,050,000,000.00 | 60,000,000.00 |
| Mortgaged borrowings | 92,999,987.80 | |
| Guaranteed loan | 58,000,000.00 | 767,512,482.00 |
| Borrowing on credit | 9,991,044,455.36 | 14,905,397,876.22 |
| Subtotal | 20,192,044,443.16 | 15,732,910,358.22 |
| Accrued interest | 112,340,299.18 | 211,266,104.79 |
| Total | 20,304,384,742.34 | 15,944,176,463.01 |
(2) Short-term borrowings that have been overdue but not yet repaid
None.
25. Deposits from customers and interbank
| Item | Balance at the end of the period | Beginning Balance |
| Current deposits | 40,660,078.51 | 95,908,461.12 |
| Time deposits | 153,847,631.94 | 134,656,999.65 |
| Draft deposits | 60,763,500.00 | 117,212,500.00 |
| Subtotal | 255,271,210.45 | 347,777,960.77 |
| Accrued interest | 5,735,497.79 | 4,734,350.95 |
| Total | 261,006,708.24 | 352,512,311.72 |
26. Loans from other banks
| Item | Balance at the end of the period | Beginning Balance |
| Credit lending | 300,000,000.00 | 1,000,000,000.00 |
| Accrued interest | 20,250.00 | 446,666.67 |
Item
| Item | Balance at the end of the period | Beginning Balance |
| Total | 300,020,250.00 | 1,000,446,666.67 |
27. Financial assets sold for repurchase
| Item | Balance at the end of the period | Beginning Balance |
| Bonds (Pledge-style Repo) | 475,033,835.62 | |
| Bills rediscounted | 2,074,500,000.00 | |
| Total | 475,033,835.62 | 2,074,500,000.00 |
28. Bills payable
| Type | Balance at the end of the period | Beginning Balance |
| Banker's acceptance bill | 21,416,071,950.32 | 25,284,631,379.70 |
| Trade acceptance draft | 11,000,000.00 | 576,464.16 |
| Total | 21,427,071,950.32 | 25,285,207,843.86 |
29. Accounts payable
(1) Listing of accounts payable
| Item | Balance at the end of the period | Beginning Balance |
| Loans and service money | 30,675,053,443.18 | 40,581,441,741.13 |
| Others | 929,605,723.70 | 1,075,374,011.33 |
| Total | 31,604,659,166.88 | 41,656,815,752.46 |
(2) Important payables with account age exceeding 1 year
None.
30. Contractual liabilities
| Item | Balance at the end of the period | Beginning Balance |
| Loans | 11,678,180,424.65 | 7,311,804,415.54 |
| Total | 11,678,180,424.65 | 7,311,804,415.54 |
31. Payroll payable
(1) Presentation of employees' wages and salaries payable
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| I. Short-term wages and salaries | 3,426,832,941.73 | 8,865,617,233.70 | 8,929,940,986.30 | 3,362,509,189.13 |
| 2. Separation benefits - defined contribution plan | 4,136,022.60 | 381,449,179.90 | 382,738,922.94 | 2,846,279.56 |
Item
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Total | 3,430,968,964.33 | 9,247,066,413.60 | 9,312,679,909.24 | 3,365,355,468.69 |
(2) Listing of short-term wages and salaries
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| 1. Wages, bonuses, subsidies and allowances | 2,623,347,333.68 | 7,558,804,647.71 | 7,727,285,036.63 | 2,454,866,944.76 |
| 2. Employee welfares | 704,506,039.05 | 704,506,039.05 | ||
| 3. Social insurance premiums | 561,320.59 | 180,980,466.26 | 180,781,452.17 | 760,334.68 |
| Including: Medical insurance premium | 528,018.34 | 155,807,507.65 | 155,610,323.87 | 725,202.12 |
| Industrial injury insurance premium | 26,100.66 | 9,579,284.15 | 9,591,162.94 | 14,221.87 |
| Birth insurance premium | 7,201.59 | 15,593,674.46 | 15,579,965.36 | 20,910.69 |
| 4. Housing accumulation funds | 1,370,053.91 | 176,725,233.33 | 176,592,223.55 | 1,503,063.69 |
| 5. Labor union expenditures and employee education funds | 801,554,233.55 | 244,600,847.35 | 140,776,234.90 | 905,378,846.00 |
| Total | 3,426,832,941.73 | 8,865,617,233.70 | 8,929,940,986.30 | 3,362,509,189.13 |
(3) Presentation of separation benefits - defined contribution plan
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| 1. Basic endowment insurance premium | 3,206,972.39 | 367,156,819.14 | 367,847,968.66 | 2,515,822.87 |
| 2. Unemployment insurance premium | 929,050.21 | 14,292,360.76 | 14,890,954.28 | 330,456.69 |
| Total | 4,136,022.60 | 381,449,179.90 | 382,738,922.94 | 2,846,279.56 |
32. Taxes payable
| Item | Balance at the end of the period | Beginning Balance |
| Added-value tax | 1,188,975,420.12 | 1,672,108,943.75 |
| Business income tax | 785,653,809.28 | 1,678,470,486.79 |
| Others | 326,726,353.62 | 353,200,285.79 |
| Total | 2,301,355,583.02 | 3,703,779,716.33 |
33. Other payables
| Item | Balance at the end of the period | Beginning Balance |
| Dividends payable [Note 1] | 6,986,645.96 | 707,913.60 |
| Other payables [Note 2] | 2,372,409,071.48 | 2,711,985,060.06 |
| Total | 2,379,395,717.44 | 2,712,692,973.66 |
[Note 1] The Company had no interest payable and important dividend payable at the end of the period and the
beginning of the period;[Note 2] Other payables in the above table refer to other payables after deduction of the interest payable anddividends payable.
1) Other payables are presented by amount nature
Item
| Item | Balance at the end of the period | Beginning Balance |
| Intercourse funds | 1,527,670,503.18 | 1,880,900,981.33 |
| Margin and deposit | 844,738,568.30 | 831,084,078.73 |
| Total | 2,372,409,071.48 | 2,711,985,060.06 |
2) Other important payables with account age exceeding 1 year
| Item | Balance at the end of the period | Cause of failing to repay or carry over |
| Entity 1 | 326,905,170.30 | Failure to meet repayment conditions |
| Entity 2 | 222,036,077.83 | Failure to meet repayment conditions |
| Total | 548,941,248.13 |
34. Other current liabilities
| Item | Balance at the end of the period | Beginning Balance |
| Repair cost | 1,893,012,124.81 | 2,032,816,015.42 |
| Sales rebate | 55,808,250,764.80 | 61,751,640,937.64 |
| Obligation to pay commercial papers which is not derecognized | 4,588,589,780.94 | 802,418,995.36 |
| Output tax to be wrote-off | 1,469,269,506.13 | 913,903,246.88 |
| Others | 623,132,106.86 | 594,615,906.72 |
| Total | 64,382,254,283.54 | 66,095,395,102.02 |
35. Long-term borrowing
| Item | Balance at the end of the period | Beginning Balance |
| Pledge loans | 142,481,242.20 | |
| Mortgaged borrowings | 1,561,190,447.00 | 46,795,740.49 |
| Borrowing on credit | 152,752,584.38 | |
| Subtotal | 1,856,424,273.58 | 46,795,740.49 |
| Accrued interest | 4,289,542.51 | 90,142.37 |
| Total | 1,860,713,816.09 | 46,885,882.86 |
36. Long-term payroll payable
(1) Table of long-term payroll payable
| Item | Balance at the end of the period | Beginning Balance |
Item
| Item | Balance at the end of the period | Beginning Balance |
| Separation benefits - net liabilities of defined benefit plan | 149,859,788.00 | 141,021,228.00 |
| Total | 149,859,788.00 | 141,021,228.00 |
(2) Changes in the defined benefit plan
1) Present value of obligations under the defined benefit plan:
| Item | Amount for the current period | Amount for the previous period |
| I. Beginning balance | 141,021,228.00 | 130,840,170.00 |
| II. Defined benefit cost recorded in the current profits and losses | 7,441,863.00 | 7,311,017.00 |
| 1. Service cost of the current period | 2,312,128.00 | 2,123,433.00 |
| 2. Net interest | 4,837,059.00 | 4,487,322.00 |
| 3. Impact on new personnel | 292,676.00 | 700,262.00 |
| III. Cost of the defined benefit plan included in other comprehensive income | 6,851,653.00 | 8,029,478.00 |
| Including: actuarial gains (losses represented by "-") | 6,851,653.00 | 8,029,478.00 |
| IV. Other changes | -5,454,956.00 | -5,159,437.00 |
| Including: paid benefits | -5,454,956.00 | -5,159,437.00 |
| V. Balance at the end of the period | 149,859,788.00 | 141,021,228.00 |
2) Net liabilities (net assets) of the defined benefit plan:
| Item | Amount for the current period | Amount for the previous period |
| I. Beginning balance | 141,021,228.00 | 130,840,170.00 |
| II. Defined benefit cost recorded in the current profits and losses | 7,441,863.00 | 7,311,017.00 |
| III. Cost of the defined benefit plan included in other comprehensive income | 6,851,653.00 | 8,029,478.00 |
| IV. Other changes | -5,454,956.00 | -5,159,437.00 |
| V. Balance at the end of the period | 149,859,788.00 | 141,021,228.00 |
(3) Contents and associated risks of the defined benefit plan, and its influences on the Company’s future cashflow, time and uncertainty:
1) Contents and associated risks of the defined benefit plan, and its influences on the Company’s future cash flow,time and uncertainty:
The Company’s defined benefit plan is a supplementary post-retirement pension plan for some retirees, earlyretirees and serving officers after normal retirement. The present obligation value of this defined benefit plan wasrecognized by Towers-Watson actuarial company using the projected unit credit method on 31 December, 2020.This defined benefit plan didn’t involve big amount, so it didn’t lead to significant influence on the future cashflow the Company.
2) Significant actuarial assumptions and sensitivity analysis results of the defined benefit planAccording to requirements of the Accounting Standards for Business Enterprises No. 9 - Employee Compensation,the discount rate adopted by the Company at the time of discount is recognized by the market yields ofhigh-quality corporate bonds in the treasury bonds or active market that match the obligatory term and currency ofthe defined benefit plan on the balance sheet date; the annual growth rates and annual dismission rates of allbenefits are based on the actual measurement data of the Company; the death rate is recognized by referring to theexperience life table for insurance business of China Life Insurance (Group) Company.
(4) Quantitative sensitivity analysis of all the used major assumptions by the end of the Report Period:
Sensitivity analysis of discount rate
| Sensitivity analysis of discount rate | Influence on the amount at the end of the period |
| Influence on the present obligation value of defined welfare benefit by increase of one percentage point | -19,484,161.00 |
| Influence on the present obligation value of defined welfare benefit by decrease of one percentage point | 24,608,583.00 |
| Influence on the service cost by increase of one percentage point | -616,336.00 |
| Influence on the service cost by decrease of one percentage point | 643,631.00 |
37. Deferred income
(1) Classification of deferred income
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Changes in the consolidation scope | Balance at the end of the period |
| Government subsidies | 240,504,270.47 | 238,679,841.17 | 63,088,539.53 | 20,938,130.35 | 437,033,702.46 |
| Total | 240,504,270.47 | 238,679,841.17 | 63,088,539.53 | 20,938,130.35 | 437,033,702.46 |
(2) Items involving government subsidies:
| Item | Beginning Balance | Amount of subsidies added in the current period | Changes in the consolidation scope | Current period amount recorded in the current period profits and losses | Balance at the end of the period |
| I. Government subsidies pertinent to incomes | 139,309,047.32 | 71,050,300.70 | 7,415,335.02 | 36,684,909.00 | 181,089,774.04 |
| 1. Environmental protection upgrade project | 1,868,218.92 | 872,760.00 | 84,112.70 | 2,656,866.22 | |
| 2. Scientific research project of refrigerating field | 87,321,653.21 | 53,520,171.73 | 25,827,580.45 | 115,014,244.49 | |
| 3. Others | 50,119,175.19 | 16,657,368.97 | 7,415,335.02 | 10,773,215.85 | 63,418,663.33 |
| II. Government subsidies pertinent to assets | 101,195,223.15 | 167,629,540.47 | 13,522,795.33 | 26,403,630.53 | 255,943,928.42 |
| 1. Environmental protection upgrade project | 14,485,084.84 | 888,413.79 | 1,666,173.26 | 13,707,325.37 | |
| 2. Scientific research project of refrigerating field | 79,911,751.57 | 152,793,004.20 | 22,080,933.60 | 210,623,822.17 | |
| 3. Others | 6,798,386.74 | 13,948,122.48 | 13,522,795.33 | 2,656,523.67 | 31,612,780.88 |
| Total | 240,504,270.47 | 238,679,841.17 | 20,938,130.35 | 63,088,539.53 | 437,033,702.46 |
38. Capital stock
Item
| Item | Beginning Balance | Increase/Decrease for the period (+, -) | Balance at the end of the period | ||||
| New Issue | Bonus Issue | Stock converted from housing accumulation fund | Others | Subtotal | |||
| Total number of stocks | 6,015,730,878.00 | 6,015,730,878.00 | |||||
39. Capital reserves
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Capital stock premium | 26,979,063.83 | 26,979,063.83 | ||
| Other capital reserves | 66,400,436.88 | 28,470,779.97 | 94,871,216.85 | |
| Total | 93,379,500.71 | 28,470,779.97 | 121,850,280.68 |
[Note] Changes in capital reserve in the current period mainly included the capital reserve of RMB 25,504,367.09recognized due to the capital increased to Zhuhai Gree Group Finance Company Limited, a holding subsidiary ofthe Company, and the capital reserve change of RMB 2,966,412.88 recognized due to the accounting ofinvestment in associates by the equity method.
40. Treasury stock
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Repurchase of stocks | 5,182,273,853.90 | 5,182,273,853.90 | ||
| Total | 5,182,273,853.90 | 5,182,273,853.90 |
[Note] By the end of the period, the Company accumulatively repurchased 94,184,662 shares in the current period,accounting for 1.57% of the Company's total stock capital by the end of the period, all of which were deposited inthe Company's special securities repurchase account. During the period of deposit, the Company was not entitledto voting at the general meeting of shareholders, profit distribution, capitalization from public reserve funds,allotment, pledge and other related rights. In future, the Company will choose the opportunity to implementemployee stock ownership plans or equity incentives. If the transfer is not completed within the time limitspecified by relevant laws and regulations, the untransferred shares will be cancelled according to law.
41. Other comprehensive income
Item
| Item | Beginning Balance | Amount for the current period | Balance at the end of the period | |||||
| Amount incurred before income tax in the current period | Less: Amount recognized into other comprehensive income in previous period and transferred to the current profits and losses | Less: Amount included into other comprehensive income in the previous period and transferred to retained earnings in the current period | Less: Income tax expenses | Amount attributable to the parent company after tax | Amount attributable to minority shareholders after tax | |||
| 1. Other comprehensive income which cannot be reclassified into profits and losses | 6,141,174,740.49 | 1,454,649,803.51 | 19,987,915.96 | 191,695,199.05 | 1,242,966,688.50 | 7,384,141,428.99 | ||
| Including: Changes arising from remeasurement of the defined benefit plan | -44,162,841.00 | -6,851,653.00 | -6,851,653.00 | -51,014,494.00 | ||||
| Other comprehensive income which cannot be transferred to profit or loss under the equity method | 4,784,432,411.50 | 215,136,201.85 | 215,136,201.85 | 4,999,568,613.35 | ||||
| Changes in fair value of other equity instrument investments | 1,400,905,169.99 | 1,246,365,254.66 | 19,987,915.96 | 191,695,199.05 | 1,034,682,139.65 | 2,435,587,309.64 | ||
| 2. Other comprehensive income which will be reclassified into profits and losses in the future | 119,117,240.64 | -98,729,128.94 | 6,317,408.17 | 1,938,467.40 | -107,198,474.16 | 213,469.65 | 11,918,766.48 | |
| Including: Other comprehensive income that can be transferred to profit or loss under the equity method | 182,758.17 | 182,758.17 | -182,758.17 | |||||
| Changes in fair value of other debt investments | -55,780,978.58 | -2,134,660.99 | -486,080.10 | -1,862,050.54 | 213,469.65 | -57,643,029.12 | ||
Item
| Item | Beginning Balance | Amount for the current period | Balance at the end of the period | |||||
| Amount incurred before income tax in the current period | Less: Amount recognized into other comprehensive income in previous period and transferred to the current profits and losses | Less: Amount included into other comprehensive income in the previous period and transferred to retained earnings in the current period | Less: Income tax expenses | Amount attributable to the parent company after tax | Amount attributable to minority shareholders after tax | |||
| Cash flow hedge reserve | 5,214,452.50 | 22,298,300.00 | 6,134,650.00 | 2,424,547.50 | 13,739,102.50 | 18,953,555.00 | ||
| Difference arising from translation of financial statements in foreign currency | 169,501,008.55 | -118,892,767.95 | -118,892,767.95 | 50,608,240.60 | ||||
| Total other comprehensive income | 6,260,291,981.13 | 1,355,920,674.57 | 6,317,408.17 | 19,987,915.96 | 193,633,666.45 | 1,135,768,214.34 | 213,469.65 | 7,396,060,195.47 |
42. Surplus reserve
Item
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Statutory surplus reserve | 2,530,583,291.14 | 2,530,583,291.14 | ||
| Discretionary surplus reserve | 969,088,265.45 | 969,088,265.45 | ||
| Total | 3,499,671,556.59 | 3,499,671,556.59 |
43. General risk provisions
| Item | Beginning Balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| General risk provisions | 489,855,826.75 | 7,719,945.51 | 497,575,772.26 | |
| Total | 489,855,826.75 | 7,719,945.51 | 497,575,772.26 |
44. Undistributed profit
| Item | Amount for the current period | Amount for the previous period |
| Undistributed profit at the beginning of the period | 93,794,643,539.49 | 81,939,701,613.83 |
| Add: Changes in accounting policies | -48,226,344.11 | |
| Undistributed profit at the beginning of the period after adjustment | 93,794,643,539.49 | 81,891,475,269.72 |
| Add: Amount transferred from other comprehensive income into retained earnings [Note 1] | 19,987,915.96 | |
| Net profit attributable to owners of the parent company for the current period | 22,175,108,137.32 | 24,696,641,368.84 |
| Less: appropriation of general risk provisions | 7,719,945.51 | 160,438,255.27 |
| Ordinary stock dividends payable [Notes 2 and 3] | 13,140,423,269.60 | 12,633,034,843.80 |
| Undistributed profit at the end of the period | 102,841,596,377.66 | 93,794,643,539.49 |
[Note 1] In the current period, the Company disposed of some other equity instrument investments - 10,247,000shares of Xinjiang Joinworld Company Limited, and RMB 19,987,915.96 of changes in fair value (after tax)accumulatively included in other comprehensive income were transferred to retained earnings;[Note 2] According to the resolutions of the general meeting of shareholders on 1 June, 2020, the Companydistributed cash dividends to all shareholders at a rate of RMB 12.00 (including tax) per 10 shares. Calculatedaccording to the issued 6,015,730,878 shares, RMB 7,218,877,053.60 of cash dividends were actually distributed;[Note 3] According to the resolution at the extraordinary general meeting of shareholders on 2 November, 2020,the Company distributed cash dividends to all shareholders at a rate of RMB 10.00 (including tax) per 10 shares.Calculated according to the issued 6,015,730,878 shares, after 94,184,662 shares of the Company repurchasedcumulatively were excluded, RMB 5,921,546,216.00 of cash dividends were actually distributed.
45. Operating revenues and operating costs
| Item | Amount for the current period | Amount for the previous period |
Revenue
| Revenue | Cost | Revenue | Cost | |
| Main business | 130,427,766,473.54 | 87,921,191,886.69 | 156,888,659,016.13 | 103,703,283,171.60 |
| Other businesses | 37,771,437,930.99 | 36,307,841,794.23 | 41,264,368,524.22 | 39,796,089,409.76 |
| Total | 168,199,204,404.53 | 124,229,033,680.92 | 198,153,027,540.35 | 143,499,372,581.36 |
[Note] At the end of the reporting period, the amount of revenue corresponding to the performance obligations forwhich the contracts have been signed but not yet performed or not yet completed was RMB 17,282,465,483.33.Information of income from main operations:
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| By industry category | ||||
| Manufacturing | 130,427,766,473.54 | 87,921,191,886.69 | 156,888,659,016.13 | 103,703,283,171.60 |
| Total | 130,427,766,473.54 | 87,921,191,886.69 | 156,888,659,016.13 | 103,703,283,171.60 |
| By type of goods | ||||
| Including: Air conditioner | 117,881,639,913.77 | 77,430,333,762.13 | 138,665,055,103.82 | 87,192,449,061.21 |
| Home Appliances | 4,521,756,518.81 | 3,083,266,840.17 | 5,575,911,375.57 | 4,271,001,457.59 |
| Intelligent equipment | 790,942,676.61 | 603,504,721.68 | 2,141,285,558.55 | 2,014,056,867.41 |
| Others | 7,233,427,364.35 | 6,804,086,562.71 | 10,506,406,978.19 | 10,225,775,785.39 |
| Total | 130,427,766,473.54 | 87,921,191,886.69 | 156,888,659,016.13 | 103,703,283,171.60 |
| By territory | ||||
| Including: domestic sale | 110,407,002,220.87 | 70,329,850,923.05 | 136,073,206,974.43 | 85,697,917,155.53 |
| Overseas | 20,020,764,252.67 | 17,591,340,963.64 | 20,815,452,041.70 | 18,005,366,016.07 |
| Total | 130,427,766,473.54 | 87,921,191,886.69 | 156,888,659,016.13 | 103,703,283,171.60 |
46. Interest revenue and interest expense
| Item | Amount for the current period | Amount for the previous period |
| Interest revenue | 2,295,972,686.55 | 2,351,471,964.56 |
| Including: interest revenue from deposits in other banks and central banks | 1,395,939,587.36 | 1,676,328,736.19 |
| Interest revenue from disbursement of loans and advances | 762,577,244.28 | 496,600,631.52 |
| Others | 137,455,854.91 | 178,542,596.85 |
| Interest expense | 304,448,121.92 | 110,579,966.36 |
| Including: expense from transactions with financial institutions | 290,237,534.52 | 95,647,504.93 |
| Others | 14,210,587.40 | 14,932,461.43 |
| Net interest revenue | 1,991,524,564.63 | 2,240,891,998.20 |
47. Taxes and surcharges
Item
| Item | Amount for the current period | Amount for the previous period |
| Urban maintenance & construction tax | 181,452,425.09 | 459,354,196.12 |
| Educational surcharges | 136,118,810.46 | 334,351,737.99 |
| Waste electrical appliance treatment fund | 203,651,307.67 | 286,294,935.08 |
| House property tax | 141,422,302.62 | 147,560,273.40 |
| Land use tax | 98,229,736.11 | 94,573,090.72 |
| Commodity circulation tax and industrial product tax of Brazil | 82,095,878.99 | 71,779,078.43 |
| Others | 121,630,232.87 | 149,070,436.89 |
| Total | 964,600,693.81 | 1,542,983,748.63 |
48. Sales expense
| Item | Amount for the current period | Amount for the previous period |
| Sales expense | 13,043,241,798.27 | 18,309,812,188.35 |
| Total | 13,043,241,798.27 | 18,309,812,188.35 |
[Note 1] In 2020, the selling expenses mainly included the installation and maintenance cost, transportation andwarehousing fee and loading and unloading fee, and promotion fee, accounting for more than 80% of the totalselling expenses;[Note 2] Sales rebates in the period were not included in sales expenses due to the implementation of the newrevenue standards, and were used to offset operating income.
49. Overhead Expense
| Item | Amount for the current period | Amount for the previous period |
| Overhead Expense | 3,603,782,803.64 | 3,795,645,600.08 |
| Total | 3,603,782,803.64 | 3,795,645,600.08 |
[Note] In 2020, the overhead expenses included the employees' wages and salaries, material consumption,depreciation and amortization, accounting for more than 80% of the total overhead expenses.
50. R&D expenses
| Item | Amount for the current period | Amount for the previous period |
| R&D expenses | 6,052,563,108.10 | 5,891,219,715.90 |
| Total | 6,052,563,108.10 | 5,891,219,715.90 |
[Note] In 2020, the R&D expenses included the employees' labor cost and direct investment cost, accounting formore than 80% of the total R&D expenses.
51. Financial expense
| Item | Amount for the current period | Amount for the previous period |
Item
| Item | Amount for the current period | Amount for the previous period |
| Interest expense [Note 1] | 1,088,369,394.87 | 1,598,276,258.59 |
| Less: Interest income [Note 2] | 3,708,312,903.06 | 3,698,387,243.32 |
| Exchange gain and loss | 598,702,350.00 | -366,166,349.99 |
| Bank charges | 76,682,416.86 | 35,131,571.19 |
| Interest charges for defined welfare benefit obligations | 4,837,059.00 | 4,487,322.00 |
| Others | 2,217,022.26 | 15,011.62 |
| Total | -1,937,504,660.07 | -2,426,643,429.91 |
[Note 1] The above interest expenses included the long-term and short-term borrowing interest expenses and thenote discount interest expense immediately recognized upon the derecognition of notes;[Note 2] Both the above interest income and the interest income in Note V. 46 were capital gains.
52. Other incomes
(1) Classification of other incomes
| Source of generating other income | Amount for the current period | Amount for the previous period | Amount recorded into the current non-recurring profit and loss |
| Government subsidies | 1,146,204,685.40 | 935,150,874.70 | 1,122,853,517.34 |
| Handling charge refund of individual income tax and others | 17,915,425.64 | 997,770.17 | 17,915,425.64 |
| Total | 1,164,120,111.04 | 936,148,644.87 | 1,140,768,942.98 |
(2) Government subsidies recorded in the profits and losses of current period
| Subsidy items | Amount for the current period | Amount for the previous period | Pertinent to assets/pertinent to incomes |
| Financial rewards | 450,465,248.34 | 458,139,748.75 | Pertinent to assets and incomes |
| Capital allowance for development projects | 137,091,175.26 | 149,396,154.17 | Pertinent to assets and incomes |
| Technological innovation subsidies income | 149,409,503.16 | 147,525,365.16 | Pertinent to assets and incomes |
| Human resources subsidy | 230,407,062.27 | 103,289,308.06 | Pertinent to incomes |
| Others | 178,831,696.37 | 76,800,298.56 | Pertinent to assets and incomes |
| Total | 1,146,204,685.40 | 935,150,874.70 |
53. Investment income
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income measured by equity method | 35,314,343.21 | -20,983,248.83 |
| Investment income from derivative financial instruments | 325,129,297.18 | -336,389,070.84 |
| Investment income recognized from trading financial assets | 213,050,762.46 | 63,410,268.30 |
| Others | 139,515,668.82 | 67,327,270.75 |
Item
| Item | Amount for the current period | Amount for the previous period |
| Total | 713,010,071.67 | -226,634,780.62 |
54. Incomes from changes in fair value
| Sources of incomes from changes in fair value | Amount for the current period | Amount for the previous period |
| Trading financial assets | -19,994,874.52 | 48,617,126.28 |
| Income from changes in fair value of derivative financial instruments | 245,563,316.57 | 179,646,941.60 |
| Others | -25,414,970.00 | |
| Total | 200,153,472.05 | 228,264,067.88 |
55. Credit impairment losses
| Item | Amount for the current period | Amount for the previous period |
| Loss on bad debt | -41,209,742.51 | -143,081,740.35 |
| Impairment losses of loans and advances | 234,034,435.04 | -136,366,845.92 |
| Total | 192,824,692.53 | -279,448,586.27 |
56. Asset impairment loss
| Item | Amount for the current period | Amount for the previous period |
| Impairment losses of contract assets | -5,036,930.75 | |
| Inventory falling price loss | -337,216,704.36 | -67,603,749.00 |
| Impairment losses of intangible assets | -775,289,550.94 | |
| Impairment losses of business reputation [Note] | -124,016,686.56 | |
| Total | -466,270,321.67 | -842,893,299.94 |
[Note] For details, please refer to Note V. 21.
57. Income from disposal of assets
| Source of income from disposal of assets | Amount for the current period | Amount for the previous period |
| Profit from disposal of non-current assets (losses indicated with "-") | 2,945,975.01 | 4,911,230.34 |
| Total | 2,945,975.01 | 4,911,230.34 |
58. Non-operating revenues
| Item | Amount for the current period | Amount for the previous period | Amount recorded into the current non-recurring profit and loss |
| Government subsidies not pertinent to operation | 223,314,876.04 | 292,291,413.05 | 223,314,876.04 |
| Net profit from destruction scrap of non-current assets | 414,312.82 | 738,673.12 | 414,312.82 |
| Including: Gains from disposal of fixed assets | 414,312.82 | 738,673.12 | 414,312.82 |
Item
| Item | Amount for the current period | Amount for the previous period | Amount recorded into the current non-recurring profit and loss |
| Others | 63,431,533.11 | 52,676,576.96 | 63,431,533.11 |
| Total | 287,160,721.97 | 345,706,663.13 | 287,160,721.97 |
Government subsidies recorded in current profits or losses:
| Subsidy items | Amount for the current period | Amount for the previous period | Amount recorded into the current non-recurring profit and loss |
| Financial rewards | 223,268,715.18 | 291,949,736.50 | 223,268,715.18 |
| Others | 46,160.86 | 341,676.55 | 46,160.86 |
| Total | 223,314,876.04 | 292,291,413.05 | 223,314,876.04 |
59. Non-operating expenses
| Item | Amount for the current period | Amount for the previous period | Amount recorded into the current non-recurring profit and loss |
| Net loss from destruction scrap of non-current assets | 8,334,512.45 | 14,943,832.84 | 8,334,512.45 |
| Including: net losses from destruction scrap of fixed assets | 8,334,512.45 | 14,943,832.84 | 8,334,512.45 |
| Others | 13,406,618.43 | 583,162,723.99 | 13,406,618.43 |
| Total | 21,741,130.88 | 598,106,556.83 | 21,741,130.88 |
60. Income tax expenses
(1) Table of income tax expenses
| Item | Amount for the current period | Amount for the previous period |
| Income tax expenses of the current period | 2,745,896,993.46 | 5,715,582,577.24 |
| Deferred income tax expenses | 1,283,798,240.06 | -1,190,118,952.51 |
| Total | 4,029,695,233.52 | 4,525,463,624.73 |
(2) Adjustment process of accounting profits and income tax expenses
| Item | Amount for the current period |
| Total profit | 26,308,937,428.79 |
| Income tax expenses calculated by the statutory/applicable tax rate | 3,946,340,614.32 |
| Impact by different tax rates applicable to subsidiaries | 201,297,689.16 |
| Impact by non-deductible costs, expenses and losses | 29,491,410.99 |
| Impact by deductible temporary differences or deductible losses of deferred income tax assets not recognized in the current period | 29,420,204.56 |
| Others | -176,854,685.51 |
| Income tax expenses | 4,029,695,233.52 |
61. Items of cash flow statement
(1) Other cash received relating to operating activities
Item
| Item | Amount for the current period | Amount for the previous period |
| Government subsidies | 1,521,419,832.12 | 1,301,652,938.19 |
| Interest revenue | 83,834,745.40 | 283,444,434.07 |
| Net decrease in bill pledge deposits and guarantee deposits | 1,833,792,536.95 | |
| Margin, deposit and others | 1,259,280,898.85 | 1,210,966,466.08 |
| Total | 4,698,328,013.32 | 2,796,063,838.34 |
(2) Other cash paid relating to operating activities
| Item | Amount for the current period | Amount for the previous period |
| Cash repayments for selling expenses | 13,357,256,381.18 | 11,601,156,921.11 |
| Cash repayments for overhead expenses and R&D expenses | 1,591,137,889.61 | 1,621,907,242.09 |
| Net increase in bill pledge deposits and guarantee deposits | 7,323,512,969.28 | |
| Returned project funds advanced | 73,050,795.30 | 193,648,219.08 |
| Others | 509,047,033.72 | 786,227,441.34 |
| Total | 15,530,492,099.81 | 21,526,452,792.90 |
(3) Other cash received relating to investing activities
| Item | Amount for the current period | Amount for the previous period |
| Receipts from forward foreign exchange settlement and sales | 342,260,149.12 | |
| Fixed deposit interest revenue and others | 3,980,389,291.30 | 4,878,025,331.18 |
| Total | 4,322,649,440.42 | 4,878,025,331.18 |
(4) Other cash paid relating to investing activities
| Item | Amount for the current period | Amount for the previous period |
| Net increase in time deposits and forward foreign exchange settlement and sale payments | 5,542,024,468.66 | 7,029,966,816.61 |
| Others | 10,487,868.71 | |
| Total | 5,542,024,468.66 | 7,040,454,685.32 |
(5) Other cash paid relating to financing activities
| Item | Amount for the current period | Amount for the previous period |
| Cash paid for repurchase of stocks | 5,182,273,853.90 | |
| Net borrowing margin expenditure and handling charge expenditure | 9,832,239,619.73 | |
| Total | 15,014,513,473.63 |
62. Supplementary information about cash flow statement
(1) Supplementary information about cash flow statement
Supplementary information
| Supplementary information | Amount for the current period | Amount for the previous period |
| 1. Convert net profit to cash flow from operating activities: | ||
| Net profits | 22,279,242,195.27 | 24,827,243,603.97 |
| Add: Assets depreciation reserves | 273,445,629.14 | 1,122,341,886.21 |
| Fixed assets depreciation, oil and gas assets accumulated depreciation, productive biological assets accumulated depreciation | 3,377,378,887.04 | 2,977,103,353.04 |
| Amortization of intangible assets | 211,327,446.74 | 215,796,437.95 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (incomes expressed with “-”) | -2,945,975.01 | -4,911,230.34 |
| Losses on disposal of fixed assets (incomes expressed with “-”) | 7,920,199.63 | 14,205,159.72 |
| Losses from changes in fair value (incomes expressed with “-”) | -200,153,472.05 | -228,264,067.88 |
| Financial expenses (incomes expressed with “-”) | -3,117,118,954.25 | -4,096,866,714.43 |
| Investment losses (incomes expressed with “-”) | -713,010,071.67 | 226,634,780.62 |
| Decrease in deferred income tax assets (increase expressed with “-”) | 993,661,744.02 | -1,267,872,732.83 |
| Increase in deferred income tax liabilities (decrease expressed with “-”) | 290,136,496.04 | 77,753,780.32 |
| Decrease of inventories (increase expressed with “-”) | -3,734,232,466.37 | -4,049,893,387.15 |
| Decrease in operating receivables (increase expressed with “-”) | 15,242,828,006.57 | -3,656,032,331.71 |
| Increase in operating payables (decrease expressed with “-”) | -18,480,942,047.82 | 19,086,284,288.30 |
| Others [Note] | 2,811,099,691.88 | -7,349,808,732.20 |
| Net cash flows from operating activities | 19,238,637,309.16 | 27,893,714,093.59 |
| 2. Major investing and financing activities not involving cash receipts and payment: | -- | -- |
| Conversion of debt into capital | ||
| Convertible bonds expiring within one year | ||
| Fixed assets acquired under finance leases | ||
| 3. Net changes in cash and cash equivalents: | -- | -- |
| Ending balance of cash | 24,225,049,638.15 | 26,372,571,821.49 |
| Less: Beginning balance of cash | 26,372,571,821.49 | 28,772,120,824.34 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -2,147,522,183.34 | -2,399,549,002.85 |
[Note] "Others" included the decreased amount RMB 976,192,487.64 of statutory deposit reserve and the netdecreased amount RMB 1,834,907,204.24 of bill margin.
(2) Net cash paid for acquisition of subsidiaries in the current period
Item
| Item | Amount |
| Cash or cash equivalent paid in the current period for business combination that occurred in the current period | 150,000,000.00 |
| Including: Bank deposits | 150,000,000.00 |
| Less: Cash and cash equivalents held by the subsidiary on the date of purchase | 70,436,872.44 |
| Including: Songyuan Grain Group Co., Ltd. | 70,436,872.44 |
| Add: Cash or cash equivalent paid in the current period for business combination that occurred in the previous period | 346,312,249.25 |
| Including: Nanjing Walsin Nonferrous Metal Co., Ltd. | 346,312,249.25 |
| Net cash paid for acquisition of subsidiaries | 425,875,376.81 |
(3) Composition of cash and cash equivalents
| Item | Balance at the end of the period | Beginning Balance |
| I. Cash | 24,225,049,638.15 | 26,372,571,821.49 |
| Including: Cash on hand | 468,623.79 | 1,357,064.14 |
| Bank deposit for payment at any time | 7,302,375,145.99 | 7,877,998,010.69 |
| Other monetary capital for payment at any time | 395,860,332.07 | 379,859,995.42 |
| Deposits in the central bank available for payment at any time | 2,108,729.48 | 2,004,412.74 |
| Deposits in other banks available for payment at any time | 16,524,236,806.82 | 18,111,352,338.50 |
| II. Cash equivalents | ||
| III. Ending balance of cash and cash equivalents | 24,225,049,638.15 | 26,372,571,821.49 |
(4) Adjustment of monetary capital and cash equivalents
| Item | Amount for the current period | Amount for the previous period |
| Monetary capital | 136,413,143,859.81 | 125,400,715,267.64 |
| Less: Deposits with restricted use | 20,335,403,491.19 | 13,329,429,050.16 |
| Including: Statutory deposit reserve | 2,037,889,970.12 | 3,014,082,457.76 |
| Bill, letter of credit and other deposits | 18,297,513,521.07 | 10,315,346,592.40 |
| Less: Fixed deposits and accrued interest not in the category of cash and cash equivalents | 91,852,690,730.47 | 85,698,714,395.99 |
| Add: Other cash equivalents | ||
| Ending balance of cash and cash equivalents | 24,225,049,638.15 | 26,372,571,821.49 |
63. Assets with restricted ownerships or use rights
| Item | Carrying amount at the end of the period | Cause of restriction |
| Monetary capital | 20,335,403,491.19 | Statutory deposit reserve and deposits |
| Receivables financing | 10,145,874,359.07 | Pledged |
Item
| Item | Carrying amount at the end of the period | Cause of restriction |
| Fixed assets | 15,133,873.82 | Mortgage |
| Other equity instrument investments | 6,643,969,479.37 | For details about the restricted shares, see Note (V) 15 |
| Intangible assets | 419,175,255.02 | Mortgage |
| Other debt investments | 496,933,800.00 | Pledged |
| Total | 38,056,490,258.47 |
64. Monetary items of foreign currencies
(1) Monetary items of foreign currencies
| Item | Balance in foreign currency at the end of period | Exchange rate for conversion | Balance of RMB converted at the end of period |
| Monetary capital: | 19,252,053,105.84 | ||
| Including: USD | 2,715,307,560.30 | 6.5249 | 17,717,110,300.23 |
| HKD | 1,153,890,726.87 | 0.8416 | 971,114,435.74 |
| BRL | 434,105,329.49 | 1.2557 | 545,106,062.24 |
| Euro | 2,331,958.13 | 8.0250 | 18,713,963.99 |
| JPY | 131,944.51 | 0.0632 | 8,343.64 |
| Accounts receivable: | 2,819,474,218.13 | ||
| Including: USD | 354,198,482.95 | 6.5249 | 2,311,109,681.37 |
| BRL | 373,844,774.44 | 1.2557 | 469,436,883.26 |
| HKD | 23,154,284.71 | 0.8416 | 19,486,646.01 |
| Euro | 2,422,555.45 | 8.0250 | 19,441,007.49 |
| Contract assets: | 1,329,114.55 | ||
| Including: USD | 203,698.84 | 6.5249 | 1,329,114.55 |
| Other receivables: | 1,527,102.31 | ||
| Including: USD | 129,904.60 | 6.5249 | 847,614.52 |
| HKD | 403,801.43 | 0.8416 | 339,839.28 |
| BRL | 149,628.34 | 1.2557 | 187,888.31 |
| Pounds | 9,010.00 | 8.8903 | 80,101.60 |
| Euro | 8,929.42 | 8.0250 | 71,658.60 |
| Subtotal of monetary assets of foreign currency | 22,074,383,540.83 | ||
| Short-term borrowing: | 3,084,726,921.72 | ||
| Including: USD | 432,696,283.57 | 6.5249 | 2,823,299,980.68 |
| HKD | 310,630,871.01 | 0.8416 | 261,426,941.04 |
Item
| Item | Balance in foreign currency at the end of period | Exchange rate for conversion | Balance of RMB converted at the end of period |
| Long-term borrowings: | 143,254,262.42 | ||
| Including: USD | 10,317,337.57 | 6.5249 | 67,319,595.90 |
| Euro | 9,462,263.74 | 8.0250 | 75,934,666.52 |
| Accounts payable: | 281,835,940.95 | ||
| Including: USD | 32,212,769.46 | 6.5249 | 210,185,099.46 |
| BRL | 33,308,848.95 | 1.2557 | 41,825,921.63 |
| JPY | 228,048,285.79 | 0.0632 | 14,420,861.40 |
| HKD | 9,273,600.61 | 0.8416 | 7,804,662.27 |
| Euro | 798,963.42 | 8.0250 | 6,411,681.45 |
| Pounds | 133,596.70 | 8.8903 | 1,187,714.74 |
| Other payables: | 169,167,466.94 | ||
| Including: USD | 24,257,254.76 | 6.5249 | 158,276,161.58 |
| Euro | 866,095.53 | 8.0250 | 6,950,416.63 |
| HKD | 2,895,815.87 | 0.8416 | 2,437,118.64 |
| BRL | 1,176,239.84 | 1.2557 | 1,477,004.37 |
| JPY | 423,267.05 | 0.0632 | 26,765.72 |
| Other current liabilities: | 1,143,061,076.53 | ||
| Including: USD | 175,184,459.00 | 6.5249 | 1,143,061,076.53 |
| Subtotal of monetary liabilities of foreign currency | 4,822,045,668.56 |
(2) Description of overseas operating entities
None.VI. Change in the consolidation scope
1. Business combination not involving enterprises under common control
(1) Business combination involving enterprises not under common control in the current period
| Name of acquired party | Time point of equity acquisition | Cost of equity acquisition | Proportion of equity acquisition | Equity acquisition mode | Date of purchase | Determination basis of date of purchase |
| Songyuan Grain Group Co., Ltd. | 31 December, 2020 | 246,272,496.65 | 75.00% | Purchase by means of cash | 31 December, 2020 | Acquisition of control power |
(2) Combination cost and business reputation
| Combination cost | Amount |
| Fair value of the equity held before the date of purchase on the date of purchase | 246,272,496.65 |
Combination cost
| Combination cost | Amount |
| Total combination cost | 246,272,496.65 |
| Less: Fair value share of the identifiable net assets acquired | 246,272,496.65 |
| Business reputation/combination cost smaller than the amount of fair value share of the identifiable net assets acquired |
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, theCompany increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and itsshareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Groupwas re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the totalBoard members, thus the Company has control over Songyuan Grain Group.As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to theowners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable netassets were appraised by Beijing Yachao Assets Appraisal Co., Ltd. which issued [Beijing Yachao AppraisalReport (2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originallyheld by the Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paidon the date of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
| Item | Songyuan Grain Group Co., Ltd. | |
| Fair value on the date of purchase | Carrying amount on date of purchase | |
| Assets: | ||
| Monetary capital | 70,436,872.44 | 70,436,872.44 |
| Accounts receivable | 58,501,141.40 | 58,501,141.40 |
| Receivables financing | 1,632,600.00 | 1,632,600.00 |
| Prepayment | 41,963,876.05 | 41,963,876.05 |
| Other receivables | 24,912,813.07 | 24,912,813.07 |
| Inventories | 397,055,281.83 | 397,055,281.83 |
| Other current assets | 47,958,691.72 | 47,958,691.72 |
| Other equity instrument investments | 7,000,000.00 | 7,000,000.00 |
| Fixed assets | 103,601,989.38 | 87,182,573.65 |
| Construction in Progress | 27,971,600.68 | 27,971,600.68 |
| Intangible assets | 41,875,107.81 | 29,763,765.14 |
| Long-term deferred expenses | 6,613,861.32 | 6,613,861.32 |
| Deferred income tax assets | 1,735,376.11 | 1,735,376.11 |
| Other non-current assets | 45,165,068.36 | 45,165,068.36 |
Item
| Item | Songyuan Grain Group Co., Ltd. | |
| Fair value on the date of purchase | Carrying amount on date of purchase | |
| Subtotal of assets | 876,424,280.17 | 847,893,521.77 |
| Liabilities: | ||
| Short-term borrowing | 421,685,022.79 | 421,685,022.79 |
| Accounts payable | 25,076,251.02 | 25,076,251.02 |
| Contractual liabilities | 22,238,960.98 | 22,238,960.98 |
| Payroll payable | 3,036,030.14 | 3,036,030.14 |
| Taxes payable | 592,097.19 | 592,097.19 |
| Other payables | 11,819,022.22 | 11,819,022.22 |
| Other current liabilities | 3,347,033.54 | 3,347,033.54 |
| Deferred income | 20,938,130.35 | 20,938,130.35 |
| Deferred income tax liabilities | 7,132,689.60 | |
| Subtitle of liabilities | 515,865,237.83 | 508,732,548.23 |
| Net assets | 360,559,042.34 | 339,160,973.54 |
| Less: minority equity | 114,286,545.69 | 108,937,028.49 |
| Net assets obtained | 246,272,496.65 | 230,223,945.05 |
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
| Name of acquired party | Carrying amount of the equity originally held before the date of purchase on the date of purchase | Fair value of the equity originally held before the date of purchase on the date of purchase | Gains or losses from remeasurement of the equity originally held before the date of purchase at the fair value |
| Songyuan Grain Group Co., Ltd. | 230,223,945.05 | 246,272,496.65 | 16,048,551.60 |
(5) Method and main assumptions for determining the fair value on the date of purchase
1) Appraisal and recognition methods: The asset based approach and the income approach were used to appraisethe assets and liabilities this time.
2) Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of theevaluated unit can be timely adjusted and innovated along with the development of the market and science andtechnology.B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showingthat the production capacity will change in the future, it is assumed that the evaluated unit will not carry out majorfixed-asset investment activities that affect its operations in the future income period, and the production capacityof the enterprise is estimated according to the condition on the evaluation benchmark date.C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accountsreceivable and accounts payable similar to the historical years, with no payment in arrears that is significantly
different from the historical years.D. There are no property right disputes or other economic disputes related to the assets and liabilities declared bythe appraised unit.E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significantadverse effects on the enterprise.
3) Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housingprices in the areas where they are located led to valuation appreciation.B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land marketprices led to valuation appreciation.
2. Business combination involving enterprises under common controlNone.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Name
| Name | Time of establishment | Net assets of the end of the period | Net profit from the combination date to the end of the period |
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | 16 January, 2020 | 1,000,170,464.38 | 170,464.38 |
| Zhuhai Ge Health Medical Technology Co., Ltd. | 18 February, 2020 | 44,211,752.29 | 24,211,752.29 |
| Gree Chengdu Xinhui Medical Equipment Co., Ltd. | 8 April, 2020 | 86,869,920.67 | 1,199,920.67 |
| Suzhou Qingzhan Environmental Technology Co., Ltd. | 13 May, 2020 | 13,636,129.44 | -363,870.56 |
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 25 September, 2020 | 80,049,226.28 | 49,226.28 |
| Gree Tianjin Xinhui Medical Equipment Co., Ltd. | 26 October, 2020 | Not yet invested |
VII. Equity in other subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 1 | Gree (Chongqing) Electric Appliances Co., Ltd. | Chongqing City | Chongqing City | Industrial manufacture | 97.00 | 97.00 | Establishment | |
| 2 | Gree (Hefei) Electric Appliances Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 3 | Gree (Brazil) Electric Appliances Co., Ltd. | Manaus, Brazil | Manaus, Brazil | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 4 | Gree (Zhengzhou) Electric Appliances Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 5 | Gree (Wuhan) Electric Appliances Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 6 | Gree (Wuhu) Electric Appliances Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 7 | Gree (Shijiazhuang) Electric Appliances Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 8 | Gree (Hangzhou) Electric Appliances Co., Ltd. | Hangzhou City | Hangzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 9 | Gree (Luoyang) Electric Appliances Co., Ltd. | Luoyang | Luoyang | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 10 | Gree (Nanjing) Electric Appliances Co., Ltd. | Nanjing | Nanjing | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 11 | Gree (Chengdu) Electric Appliances Co., Ltd. | Chengdu | Chengdu | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 12 | Gree Changsha HVAC Equipment Co., Ltd. | Changsha City | Changsha City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 13 | Gree (Chengdu) HVAC Equipment Co., Ltd. | Chengdu | Chengdu | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 14 | Zhuhai Gree Group Finance Company Limited [Note 1] | Zhuhai City | Zhuhai City | Finance | 94.16 | 0.46 | 94.62 | Business combination involving enterprises under common control |
| 15 | Zhuhai Hengqin GREE business factoring Co., Ltd. | Zhuhai City | Zhuhai City | Finance | 100.00 | 100.00 | Establishment | |
| 16 | Zhuhai Landa Compressor Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 17 | Hefei Landa Compressor Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 18 | Zhengzhou Landa Compressor Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 19 | Chongqing Landa Compressor Co., Ltd. | Chongqing City | Chongqing City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 20 | Wuhan Landa Compressor Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 21 | Zhuhai Meilingda Refrigeration Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 70.00 | 70.00 | Business combination involving enterprises under common control | |
| 22 | Zhuhai Landa Material Supply Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 23 | Zhuhai Kaibang Motor Manufacture Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 24 | Hefei Kaibang Motor Manufacture Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 25 | Chongqing Kaibang Motor Manufacture Co., Ltd. | Chongqing City | Chongqing City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 26 | Henan Kaibang Motor Manufacture Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 27 | Zhuhai Gree Electrical Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 28 | Gree Electric Enterprises (Ma'anshan) Ltd. | Ma'anshan City | Ma'anshan City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 29 | Gree (Meishan) Electrician Co., Ltd. | Meishan City | Meishan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 30 | Gree (Nanjing) Electrician Co., Ltd. | Nanjing | Nanjing | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 31 | GREE (Zhongshan) Home Appliances Co., Ltd. | Zhongshan City | Zhongshan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 32 | Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 33 | Gree Green Refrigeration Technology Center Co., Ltd. Of Zhuhai | Zhuhai City | Zhuhai City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 34 | Zhengzhou Gree Green Resources Recycling Co., Ltd | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 35 | Hunan Green Resources Recycling Co., Ltd | Ningxiang County | Ningxiang County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 36 | Wuhu Green Resources Recycling Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 37 | Shijiazhuang Green Resources Recycling Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 38 | Tianjin Green Resources Recycling Co., Ltd. | Tianjin City | Tianjin City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 39 | Zhuhai Gree Daikin Precision Mold Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 40 | Zhuhai Gree Dakin Device Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 41 | Zhuhai Ligao Precision Manufacturing Co., Ltd. | Zhuhai City | Zhuhai City | Industrial | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| manufacture | ||||||||
| 42 | Zhuhai Gree TOSOT Life Electric Appliances Co., Lid. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 43 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | Suqian City | Suqian City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 44 | Zhuhai HVAC Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 45 | Gree (Wuhan) HVAC Equipment Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 46 | Zhuhai EWPE Information Technology Co., Ltd. | Zhuhai City | Zhuhai City | IT | 100.00 | 100.00 | Establishment | |
| 47 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 48 | Gree (Nanjing) Xinyuan Electronics Co., Ltd. | Nanjing | Nanjing | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 49 | Gree Hong Kong Electric Appliances Sales Co., Ltd. | Kowloon, Hong Kong | Kowloon, Hong Kong | Sales | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 50 | GREE Shanghai Air Conditioners Sales Co., Ltd. [Note 2] | Shanghai City | Shanghai City | Sales | 90.00 | 9.70 | 99.70 | Establishment |
| 51 | Brazil United Electric Appliances Industry and Commerce Co., Ltd. | Sao Paulo, Brazil | Sao Paulo, Brazil | Sales | 100.00 | 100.00 | Establishment | |
| 52 | Gree (USA) Sales Co., Ltd. | California, USA | California, USA | Sales | 100.00 | 100.00 | Establishment | |
| 53 | Zhuhai GREE Intelligent Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 54 | Zhuhai GREE Intelligent Equipment Technology Research Institute Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 55 | GREE (Wuhan) Intelligent Equipment Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 56 | Gree (Luoyang) Robot Co., Ltd. | Luoyang | Luoyang | Technical research and development | 100.00 | 100.00 | Establishment | |
| 57 | Zhuhai Gree Robot Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 58 | Wuhu Precision Manufacturing Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 59 | Gree (Wuhan) Precision Mold Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 60 | Zhuhai Gree Precision Mold Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 61 | Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | Wu'an County | Wu'an County | Industrial manufacture | 70.00 | 70.00 | Establishment | |
| 62 | Zhuhai Gree New Material Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 63 | Zhuhai Gree Energy Environment Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 64 | Zhuhai Gree Info Technology Co., Ltd. | Zhuhai City | Zhuhai City | IT | 51.00 | 51.00 | Establishment | |
| 65 | Zhuhai Gree CNC Machine Tool Research Institute Co., Ltd. | Zhuhai City | Zhuhai City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 66 | Zhuhai Gree Transportation Co., Ltd. | Zhuhai City | Zhuhai City | Transportation industry | 100.00 | 100.00 | Establishment | |
| 67 | Zhuhai Lianyun Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 68 | Zhuhai Zero Boundary Integrated Circuit Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 69 | Zhuhai Gree Material Supply Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 70 | Zhuhai Gree Lvkong Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 71 | Hefei Kinghome Electrical Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 72 | Gree (Chengdu) Precision Mold Co., Ltd. | Chengdu | Chengdu | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 73 | Zhuhai Gree Electrical and Mechanical Engineering Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 74 | Gree (Luoyang) Washing Machine Co., Ltd. | Luoyang | Luoyang | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 75 | Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd. | Zhuhai City | Zhuhai City | IT | 75.00 | 75.00 | Establishment | |
| 76 | Gree (Anji) Precision Mold Co., Ltd. | Anji County | Anji County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 77 | Zhuhai Gree Green Resources Recycling Co., Ltd | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 78 | Nanjing Walsin Nonferrous Metal Co., Ltd. | Nanjing | Nanjing | Industrial manufacture | 94.30 | 94.30 | Business combination not involving enterprises under common control | |
| 79 | Guangdong Guochuang Intelligent Technology Co., Ltd. | Lianjiang City | Lianjiang City | Industrial manufacture | 60.00 | 60.00 | Establishment | |
| 80 | Luoyang Lianmei Real Estate Co., Ltd. | Luoyang | Luoyang | Real estate | 51.00 | 51.00 | Establishment | |
| 81 | Zhuhai Hengqin Gree Huatai Energy Development Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 82 | Handan Yingdong New Energy Technology Co., Ltd. | Wu'an County | Wu'an County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 83 | Bayannur Huatai Technology Development Co., Ltd. | Inner Mongolia | Inner Mongolia | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 84 | Gree Material Supply (Wuhan) Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 85 | Gree Material Supply (Hefei) Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 86 | Gree Material Supply (Zhengzhou) Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 87 | Gree Material Supply (Chongqing) Co., Ltd. | Chongqing City | Chongqing City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 88 | Huzhou Landa Compressor Co., Ltd. | Anji County | Anji County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 89 | Gree E-commerce Co., Ltd. | Zhuhai City | Zhuhai City | Wholesale and retail trade | 100.00 | 100.00 | Establishment | |
| 90 | Gree Rongzhu Copper (Nanjing) Co., Ltd. | Nanjing | Nanjing | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 91 | Gelan Environmental Protection Technology (Shaoguan) Co., Ltd. | Shaoguan City | Shaoguan City | Sales | 100.00 | 100.00 | Establishment | |
| 92 | Songyuan Grain Group Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 75.00 | 75.00 | Business combination not involving enterprises under common control | |
| 93 | Songyuan Chagan Lake Grain Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 94 | SL Shengyuan (Jilin) Agricultural Development Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 51.00 | 51.00 | Business combination not involving enterprises under common control | |
| 95 | SL Group Rice Research Institute Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 96 | Jilin SL Tuga Grain Market Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 97 | Jilin SL Modern Agriculture Development Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
| 98 | SL Group Jiangwan Rice Industry Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 51.00 | 51.00 | Business combination not involving enterprises under common control | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 99 | Jilin Chagan Lake Grain and Rice Industrial Park Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 100 | SL Jinyu Daqing Agricultural Technology Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 51.00 | 51.00 | Business combination not involving enterprises under common control | |
| 101 | SL (Shenzhen) South China Agricultural Development Co., Ltd. | Shenzhen | Shenzhen | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 102 | Songyuan (Ningbo) Grain Sales Co., Ltd. | Ningbo | Ningbo | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 103 | Zhenlai County SL Shengyuan Agricultural Development Co., Ltd. | Baicheng | Baicheng | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 104 | Jilin Songyuan Grain Modern Logistics Development Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 105 | Jilin SL Xinyu Agricultural Development Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 106 | SL Group Ermapao Ecological Farm Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
| 107 | SL Group Lianhe Ecological Farm Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
| 108 | SL Group Juyuan Agriculture Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
| 109 | SL Group Lvzhiyuan Agriculture Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
SerialNumber
| Serial Number | Name | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 110 | SL Group Dongwei Rice Industry Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 51.00 | 51.00 | Business combination not involving enterprises under common control | |
| 111 | SL Group Songlin Grain Depot Co., Ltd. | Fuyu | Fuyu | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 112 | SL Group Jingu Grain Depot Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 100.00 | 100.00 | Business combination not involving enterprises under common control | |
| 113 | SL Group Tongda Grain Storage Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 70.00 | 70.00 | Business combination not involving enterprises under common control | |
| 114 | Jilin Songyuan Grain Huilong Agricultural Technology Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 51.00 | 51.00 | Business combination not involving enterprises under common control | |
| 115 | Zhuhai Ge Health Medical Technology Co., Ltd. | Zhuhai City | Zhuhai City | Medical instruments | 100.00 | 100.00 | Establishment | |
| 116 | Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 117 | Gree Chengdu Xinhui Medical Equipment Co., Ltd. | Chengdu | Chengdu | Medical instruments | 75.00 | 75.00 | Establishment | |
| 118 | Suzhou Qingzhan Environmental Technology Co., Ltd. | Suzhou | Suzhou | Industrial manufacture | 65.00 | 65.00 | Establishment | |
| 119 | Gree (Ganzhou) Electric Appliances Co., Ltd. | Ganzhou | Ganzhou | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 120 | Gree Tianjin Xinhui Medical Equipment Co., Ltd. | Tianjin City | Tianjin City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
[Note 1] During the period, the Company increased capital contribution to its controlling subsidiary Zhuhai Gree Group Finance Company Limited (hereinafterreferred to as "Gree Finance Company") by RMB 2,640,000,000, of which RMB 1,500,000,000 was included in the registered capital of Gree Finance Company andthe remaining RMB 1,140,000,000 was included in the capital reserve of Gree Finance Company. After the capital increase, the Company held 94.16% of GreeFinance Company, and the Company's wholly-owned subsidiaries Gree Electrical and Gree Xinyuan each held 0.23% of Gree Finance Company, so the Company's
control over Gree Finance Company remained unchanged;[Note 2]: The Company directly holds 90.00% of total stocks of Gree Shanghai Air Conditioners Sales Co., Ltd., and Gree (Chongqing) Electric Appliances Co., Ltd.as the subsidiary of the Company holds its remaining 9.70% stocks, so the Company holds its 99.70% stocks in the direct and indirect ways.
(2) Important non-wholly owned subsidiaries
Information of rights and interests held by minority shareholders of important non-wholly owned subsidiaries and profits and losses:
Name
| Name | Shareholding ratio of minority shareholders | Profits or losses attributable to minority shareholders in the current period | Dividends declared to distribute to minority shareholders in the current period | Equity balance of minority shareholders at the end of the period |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 3.00% | 2,255,432.00 | 73,884,144.21 | |
| Zhuhai Gree Group Finance Company Limited [Note] | 5.38% | 63,127,166.19 | 411,607,065.23 | 319,521,485.92 |
[Note] For changes in equity of Zhuhai Gree Group Finance Company Limited, see Note (VII) 1. (1) for details.
(3) Main financial information of important non-wholly owned subsidiaries
| Name | Balance at the end of the period | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 2,920,871,321.12 | 944,587,263.99 | 3,865,458,585.11 | 1,390,158,036.58 | 12,495,741.40 | 1,402,653,777.98 |
| Zhuhai Gree Group Finance Company Limited | 38,131,598,722.42 | 14,678,190,451.97 | 52,809,789,174.39 | 46,634,275,949.33 | 232,033,203.40 | 46,866,309,152.73 |
(Continued)
| Name | Beginning Balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 3,898,672,996.86 | 1,045,004,552.90 | 4,943,677,549.76 | 2,542,579,996.06 | 13,473,813.34 | 2,556,053,809.40 |
| Zhuhai Gree Group Finance Company Limited | 52,065,731,802.44 | 18,385,117,667.65 | 70,450,849,470.09 | 63,819,886,177.95 | 181,178,505.54 | 64,001,064,683.49 |
(Continued)
Name
| Name | Amount for the current period | |||
| Operating incomes | Net profits | Total comprehensive income | Cash flows from operating activities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 4,820,238,798.40 | 75,181,066.77 | 75,181,066.77 | -3,051,189,240.49 |
| Zhuhai Gree Group Finance Company Limited | 2,379,170,026.46 | 679,943,713.67 | 681,885,945.92 | -12,691,657,223.44 |
(Continued)
| Name | Amount for the previous period | |||
| Operating incomes | Net profits | Total comprehensive income | Cash flows from operating activities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 10,703,012,677.06 | 784,272,003.69 | 784,272,003.69 | 1,209,651,124.46 |
| Zhuhai Gree Group Finance Company Limited | 2,399,580,625.93 | 795,328,040.73 | 792,299,281.53 | 3,359,858,744.18 |
2. Equities in joint ventures or associates
(1) Important joint ventures or associates
Name of invested entity
| Name of invested entity | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Accounting treatment of associates or joint ventures | |
| Direct | Indirect | |||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | Zhuhai City | Zhuhai City | Business services | 91.27 | Equity method | |
| Zhuhai Hanling Equity Investment Partnership (Limited Partnership) | Zhuhai City | Zhuhai City | Business services | 47.92 | Equity method | |
(2) Main financial information of important joint ventures
1) Zhuhai Ronglin Equity Investment Partnership (Limited Partnership)
| Item | Balance at the end of the period/Amount for the current period | Balance at the beginning of the period/Amount for the previous period |
| Current assets | 1,536,916.77 | 1,689,835.43 |
| Including: cash and cash equivalents | 1,536,916.77 | 1,689,835.43 |
| Non-current assets | 8,660,996,176.54 | 7,522,991,256.00 |
| Total assets | 8,662,533,093.31 | 7,524,681,091.43 |
| Current liabilities | 23,078,118.19 | 66,000.00 |
| Total liabilities | 23,078,118.19 | 66,000.00 |
| Share of net assets calculated by the agreement | 7,061,709,059.56 | 6,867,716,193.95 |
| Total comprehensive income | 1,114,839,883.69 | 5,209,135,267.94 |
2) Zhuhai Hanling Equity Investment Partnership (Limited Partnership)
| Item | Balance at the end of the period/Amount for the current period | Balance at the beginning of the period/Amount for the previous period |
| Current assets | 123,178,588.99 | -- |
| Including: cash and cash equivalents | 476,698.58 | -- |
| Non-current assets | 800,000,000.00 | -- |
| Total assets | 923,178,588.99 | -- |
| Current liabilities | 758,152.76 | -- |
| Total liabilities | 758,152.76 | -- |
| Share of net assets calculated by the agreement | 922,420,436.23 | -- |
| Total comprehensive income | 29,115,512.75 | -- |
| Dividends received from joint ventures in the current year | 26,695,076.52 | -- |
(3) Significant restrictions on the ability of joint ventures or associates to transfer funds to the CompanyNone.
(4) Excess losses incurred by joint ventures or associates
None.
(5) Unrecognized commitments related to investment in joint ventures
None.
(6) Contingent liabilities related to investment in joint ventures or associatesNone.
3. Important co-management
None.
4. Equity in structured entities which were not included in the scope of consolidated financial statementsNone.VIII. Risks associated with financial instrumentsMain financial instruments of the Company included monetary capital, trading financial assets, derivativefinancial assets, receivables financing, receivables, disbursement of loans and receivables, buying back the sale offinancial assets, debt investments, other debt investments, other equity instrument investments, other financialliabilities (e.g., payables) arising from operation, etc. These financial instruments aimed to provide funds foroperation of the Company.The financial instruments of the Company may lead to the main risks of credit risks, liquidity risks and marketrisks.
1. Classification information of financial instruments
The book values of various financial instruments on the balance sheet date:
(1) Balance at the end of the period
Item
| Item | Classification of financial assets | |||
| Financial assets measured at amortization costs | Financial assets which are measured at their fair values and of which the changes are included into other comprehensive income | Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | Total | |
| 1. Measured by cost or amortized cost | ||||
| Monetary capital | 136,413,143,859.81 | 136,413,143,859.81 | ||
| Accounts receivable | 8,738,230,905.44 | 8,738,230,905.44 | ||
| Other receivables | 147,338,547.86 | 147,338,547.86 | ||
| Non-current assets due within one year (debt investment) | ||||
| Other current assets [note] | 13,039,786,857.75 | 13,039,786,857.75 | ||
Item
| Item | Classification of financial assets | |||
| Financial assets measured at amortization costs | Financial assets which are measured at their fair values and of which the changes are included into other comprehensive income | Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | Total | |
| Disbursement of loans and advances | 5,273,805,581.52 | 5,273,805,581.52 | ||
| Subtotal | 163,612,305,752.38 | 163,612,305,752.38 | ||
| 2. Measured at fair values | ||||
| Trading financial assets | 370,820,500.00 | 370,820,500.00 | ||
| Derivative financial assets | 285,494,153.96 | 285,494,153.96 | ||
| Receivables financing | 20,973,404,595.49 | 20,973,404,595.49 | ||
| Non-current assets due within one year (other debt investments) | ||||
| Other current assets | 22,298,300.00 | 22,524,600.00 | 44,822,900.00 | |
| Other debt investments | 502,202,293.17 | 502,202,293.17 | ||
| Other equity instrument investments | 7,788,405,891.47 | 7,788,405,891.47 | ||
| Other non-current financial assets | 2,003,483,333.33 | 2,003,483,333.33 | ||
| Subtotal | 29,286,311,080.13 | 2,682,322,587.29 | 31,968,633,667.42 | |
| Total | 163,612,305,752.38 | 29,286,311,080.13 | 2,682,322,587.29 | 195,580,939,419.80 |
(Continued)
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| 1. Measured by cost or amortized cost | |||
| Short-term borrowing | 20,304,384,742.34 | 20,304,384,742.34 | |
| Deposits from customers and interbank | 261,006,708.24 | 261,006,708.24 | |
| Loans from other banks | 300,020,250.00 | 300,020,250.00 | |
| Bills payable | 21,427,071,950.32 | 21,427,071,950.32 | |
| Accounts payable | 31,604,659,166.88 | 31,604,659,166.88 | |
| Financial assets sold for repurchase | 475,033,835.62 | 475,033,835.62 | |
| Other payables | 2,379,395,717.44 | 2,379,395,717.44 | |
| Other current liabilities | 62,912,984,777.41 | 62,912,984,777.41 | |
| Long-term borrowing | 1,860,713,816.09 | 1,860,713,816.09 | |
| Subtotal | 141,525,270,964.34 | 141,525,270,964.34 | |
| Total | 141,525,270,964.34 | 141,525,270,964.34 | |
(2) Beginning Balance
Item
| Item | Classification of financial assets | |||
| Financial assets measured at amortization costs | Financial assets which are measured at their fair values and of which the changes are included into other comprehensive income | Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | Total | |
| 1. Measured by cost or amortized cost | ||||
| Monetary capital | 125,400,715,267.64 | 125,400,715,267.64 | ||
| Accounts receivable | 8,439,719,697.00 | 8,439,719,697.00 | ||
| Other receivables | 159,134,399.10 | 159,134,399.10 | ||
| Non-current assets due within one year (debt investment) | 18,608,350.13 | 18,608,350.13 | ||
| Other current assets [note] | 19,346,895,253.23 | 19,346,895,253.23 | ||
| Disbursement of loans and advances | 14,423,786,409.22 | 14,423,786,409.22 | ||
| Subtotal | 167,788,859,376.32 | 167,788,859,376.32 | ||
| 2. Measured at fair values | ||||
| Trading financial assets | 955,208,583.58 | 955,208,583.58 | ||
| Derivative financial assets | 92,392,625.69 | 92,392,625.69 | ||
| Receivables financing | 28,226,248,997.12 | 28,226,248,997.12 | ||
| Non-current assets due within one year (other debt investments) | 426,789,360.26 | 426,789,360.26 | ||
| Other debt investments | 296,836,282.20 | 296,836,282.20 | ||
| Other equity instrument investments | 4,644,601,697.51 | 4,644,601,697.51 | ||
| Other non-current financial assets | 2,003,483,333.33 | 2,003,483,333.33 | ||
| Subtotal | 33,594,476,337.09 | 3,051,084,542.60 | 36,645,560,879.69 | |
| Total | 167,788,859,376.32 | 33,594,476,337.09 | 3,051,084,542.60 | 204,434,420,256.01 |
(Continued)
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| 1. Measured by cost or amortized cost | |||
| Short-term borrowing | 15,944,176,463.01 | 15,944,176,463.01 | |
| Deposits from customers and interbank | 352,512,311.72 | 352,512,311.72 | |
| Loans from other banks | 1,000,446,666.67 | 1,000,446,666.67 | |
| Bills payable | 25,285,207,843.86 | 25,285,207,843.86 | |
| Accounts payable | 41,656,815,752.46 | 41,656,815,752.46 | |
| Financial assets sold for repurchase | 2,074,500,000.00 | 2,074,500,000.00 | |
| Other payables | 2,712,692,973.66 | 2,712,692,973.66 | |
| Other current liabilities | 65,181,491,855.14 | 65,181,491,855.14 | |
Item
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| Long-term borrowing | 46,885,882.86 | 46,885,882.86 | |
| Subtotal | 154,254,729,749.38 | 154,254,729,749.38 | |
| Total | 154,254,729,749.38 | 154,254,729,749.38 | |
[Note] The above other current assets and other current liabilities excluded prepaid taxes, output tax to bewrote-off and other items.
2. Credit risks
Credit risks refer to financial losses suffered by one party to the financial instrument due to the other party'sinability to fulfill obligations.The Company will have transactions with recognized customers with a good reputation only. According to thepolicy of the Company, all the customers who require the credit form for transactions shall undergo credit review.Besides, the Company implements continuous monitoring on the balance of accounts receivable to ensure that theCompany is not confronted with the major risk of bad debts.Financial assets of the Company include monetary capital, receivables financing, etc. The credit risks of thesefinancial assets come from nonperformance of the transaction counterparty, and the maximum risk exposure isequal to the carrying amount of these instruments. Trade terms between the Company and customers focus onadvances, banker's acceptance bill or the mode of pay on delivery, assisted by deal on credit.The monetary capital is deposited in state-owned financial institutions with a higher credit rating, minimizing therisk; the receivables financing is mainly banker's acceptance bills, and the risk exposure is rather small. The bookvalue of receivables financing, accounts receivable, prepayments and other receivables in the consolidated balancesheet is the highest credit risk with which the Company may be confronted. As at the end of the Report Period, theCompany's receivables financing, accounts receivable, and other accounts receivable accounted for 10.69% of thetotal assets (the balance at the beginning of the period was 13.01%), and the above amounts were mainly duewithin 1 year, so the Company had no significant credit risk. For the Company's credit risk exposures arising fromthe receivables financing, accounts receivable and other receivables, see the disclosed information in Note V. 4"Receivables", Note V. 5 "Receivables financing" and Note V. 7 "Other receivables".
3. Liquidity risks
Liquidity risks refer to risks of fund shortage generated when the enterprise performs the obligation to settleaccounts by cash payment or other financial assets.As indicated by changes in the Company’s financial instruments at the beginning and end of the period, theproportion of the Company's "Financial assets" to "Financial liabilities" at the end of the report period was 1.38(which was 1.33 at the beginning of the period). which shows that the Company has adequate liquidity and therisk in shortage of liquidity is low.
4. Market risks
Market risks refer to fluctuation risks of the fair value or future cash flow of financial instrument due to changesin the market price, including exchange rate risk and interest rate risk.
(1) Exchange rate risk
Exchange rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments due tochanges in the foreign exchange rate.As at 31 December, 2020, the amounts of foreign currency financial assets and liabilities held by the Companyconverted into RMB were presented in details in Note (V) 64 (1) "Foreign Currency Monetary Items".The Company will minimize the exchange risk by carrying out the forward exchange transaction business andcontrolling the scale of foreign currency assets and liabilities according to changes in the market exchange rate.
(2) Interest rate risks
Interest rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments due tochanges in the market rate of interest.Set out below are the Company's liabilities with interests as of 31 December, 2020:
Report item
| Report item | Amount | Interest rate range | Remarks |
| Short-term borrowing | 20,304,384,742.34 | 0.63%-6.525% | Floating interest rate |
| Deposits from customers and interbank | 261,006,708.24 | 0.35%-3.65% | Floating interest rate |
| Loans from other banks | 300,020,250.00 | 2.43% | |
| Long-term borrowing | 1,860,713,816.09 | 0.41%-6.18% | Floating interest rate |
| Money from financial assets sold for repurchase | 475,033,835.62 | 2.60% | |
| Total | 23,201,159,352.29 |
IX. Fair value disclosure
1. Fair values of assets and liabilities at the end of period that are measured at the fair value
| Item | Fair value at the end of period | |||
| Measurement of the fair value at the first layer | Measurement of the fair value at the second layer | Measurement of the fair value at the third layer | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| 1. Trading financial assets | ||||
| Financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | ||||
| (1) Debt instrument investment | 370,820,500.00 | 370,820,500.00 | ||
Item
| Item | Fair value at the end of period | |||
| Measurement of the fair value at the first layer | Measurement of the fair value at the second layer | Measurement of the fair value at the third layer | Total | |
| (2) Derivative financial assets | 285,494,153.96 | 285,494,153.96 | ||
| 2. Other debt investments | ||||
| Other debt investments | 502,202,293.17 | 502,202,293.17 | ||
| 3. Other equity instrument investments | ||||
| Including: Other equity instrument investments designated as measured at their fair values and of which the changes are recorded into the current profits and losses | 7,781,405,891.47 | 7,000,000.00 | 7,788,405,891.47 | |
| 4. Receivables financing | ||||
| Including: Notes receivable designated as measured at their fair values and of which the changes are recorded into the current profits and losses | 20,973,404,595.49 | 20,973,404,595.49 | ||
| 5. Other non-current financial assets | ||||
| Including: Debt instrument investments designated as measured at their fair values and of which the changes are recorded into the current profits and losses | 2,003,483,333.33 | 2,003,483,333.33 | ||
| 6. Others | 44,822,900.00 | 44,822,900.00 | ||
| Total of assets measured by fair value continuously | 8,699,251,584.64 | 23,262,382,082.78 | 7,000,000.00 | 31,968,633,667.42 |
2. Basis for determining market prices of items continuously and not continuously measured at thefirst-level fair valueMarket prices of trading financial assets - debt instruments, other debt investment, other equity instrumentinvestments and hedging instruments held by the Company are determined based on the quotation ofcorresponding products and investment projects on the open market.
3. Qualitative and quantitative information on valuation techniques and important parameters adoptedby items continuously and not continuously measured at the second-level fair valueReceivables financing held by the Company is the bank acceptance bills and commercial acceptance bills held bythe Company, and their corresponding transfer and discounted amounts are used as the basis for determining theirmarket prices;Derivative financial assets and other non-current financial assets held by the Company are mainly forwardhedging instruments and trust products with a recovery period of more than one year, and the recoverable amountof the corresponding financial assets is used as the basis for determining the market price.
4. Qualitative and quantitative information on valuation techniques and important parameters adoptedby items continuously and not continuously measured at the third-level fair valueNon-trading equity instrument investments designated as measured at their fair values and of which the changesare recorded into the current profits and losses, which are held by the Company at the third layer, were mainlyequity investment projects which cannot be verified with the data from the observable active market and of whichthe financial forecast is made with their own data.
5. For items continuously measured at fair value, in case of any conversion between various levels duringthe current period, reasons for the conversion and policies to determine the conversion time should beprovidedNone.
6. Changes in valuation techniques and reasons for changes occurred during the current periodNone.
7. Particulars on fair value of financial assets and liabilities which are not measured at fair valueNone.X. Related parties and related transaction
1. Parent company of the Company
On 2 December, 2019, Zhuhai Gree Group Co., Ltd. (hereinafter referred to as "Gree Group"), the original majorshareholder of the Company, signed the Share Transfer Agreement with Zhuhai Mingjun Investment Partnership(Limited Partnership) (hereinafter referred to as "Zhuhai Mingjun"), pursuant to which Gree Group transferred its902,359,632 non-restricted circulating shares held in the Company (accounting for 15.00% of the Company's totalequity) to Zhuhai Mingjun. The above equity change was approved by Zhuhai Municipal People's Governmentand the State-owned Assets Supervision and Administration Commission of Zhuhai Municipal People'sGovernment on 13 December, 2019.On 3 February, 2020, the Transfer Registration Confirmation issued by China Securities Depository and ClearingCorporation Limited (CSDC) Shenzhen Branch showed that the share transfer registration procedures werecompleted, the transfer date was 23 January, 2020, and the Company had neither a controlling shareholder nor anactual controller.
2. Subsidiaries of the Company
For details, see Note (VII) 1 "Equity in subsidiaries".
3. Joint ventures and associates of the Company
For important joint ventures and associates of the Company, see the Note VII. 2 for details.
4. Other related parties
Name of other related parties
| Name of other related parties | Relationships of other related parties with the Company |
Name of other related parties
| Name of other related parties | Relationships of other related parties with the Company |
| Subsidiaries and holding companies of Zhuhai Gree Group Co., Ltd. | Subsidiaries and holding subsidiaries of the Company's original controlling shareholder |
| Shandong Jierui Logistics Co., Ltd. | Companies where supervisors of the Company act as executive directors and general managers |
| Shandong Zhirun Electric Appliances Co., Ltd. | Companies where supervisors of the Company act as executive directors |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Companies where supervisors of the Company act as managers |
| Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries | Companies and their subsidiaries and holding subsidiaries where the chairman of the Company serves as a director |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors and general managers |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Companies where the Company's director holds equity and serves as the board chairman |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors |
| Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | The company in which the Company holds more than 5.00% of its shares |
| Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | Companies where supervisors of the Company act as executive directors and general managers |
| Zhuhai Xima Pearl New Media Co., Ltd. | Companies where board chairman of the Company act as director |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | A company upon which the Company has great influence |
| Hunan Green Renewable Resources Recycling Co., Ltd. | A company upon which the Company has great influence |
| Shandong Mely Property Co., Ltd. | Subsidiaries where sons of supervisors of the Company act as executive directors and managers |
| Henan Huizhong Yifeng Electronic Commerce Co., Ltd. | Companies where directors of the Company act as board chairmans |
| Zhuhai Wantong Special Engineering Plastics Co., Ltd. | Wholly-owned or holding subsidiaries where former independent directors of the Company act as independent directors |
5. Related transactions
(1) Related-party transactions for the purchase and sales of goods and the rendering and receipt of services
1) Purchase of commodities/receiving of services
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Deposit-taking | Interest expense | 168,517.68 | 32,813.02 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Deposit-taking | Interest expense | 640.04 | 26,350.32 |
| Shandong Jierui Logistics Co., Ltd. | Deposit-taking | Interest expense | 540.83 | 1,624.60 |
| Songyuan Grain Group Co., Ltd. and its subsidiaries | Deposit-taking | Interest expense | 2,103.39 | 1,484.15 |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Deposit-taking | Interest expense | 5,393.77 | 1,290.45 |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Deposit-taking | Interest expense | 7,116.88 | 185.25 |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Deposit-taking | Interest expense | 105.88 | 102.16 |
Related party
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period |
| Shandong Zhirun Electric Appliances Co., Ltd. | Deposit-taking | Interest expense | 0.65 | 89.21 |
| Shandong Mely Property Co., Ltd. | Deposit-taking | Interest expense | 8.75 | |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Materials procurement | Raw material | 2,057,922,093.99 | 2,169,555,677.45 |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | Materials procurement | Raw material | 509,270.48 | 10,788,213.00 |
| Hunan Green Renewable Resources Recycling Co., Ltd. | Materials procurement | Raw material | 4,281,006.00 | 846,184.00 |
| Beijing Gree Technology Co., Ltd. | Materials procurement | Fittings | 46,875,937.46 | 164,958,551.96 |
| Songyuan Grain Group Co., Ltd. and its subsidiaries | Materials procurement | Foodstuff | 1,273,086.22 | 8,097,519.11 |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Materials procurement | Accessories and infrastructure projects | 5,563,078.35 | 503,256.74 |
| Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries [Note] | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 456,527,871.20 | 72,389,092.82 |
| Chongqing Pargo Mechanical Equipment Co., Ltd. | Purchase of fixed assets and materials | Accessories, finished products and equipment | 15,961,014.17 | 18,138,184.74 |
| Liaowang All Media Communication Co., Ltd. | Service sourcing | Publicity and advertising fee | 4,150,943.41 | 4,758,867.94 |
| Total | 2,593,248,729.15 | 2,450,099,486.92 |
2) Sales of commodities/rendering of services
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Interest revenue | 42,501,985.05 | 54,947,437.57 |
| Shandong Jierui Logistics Co., Ltd. | Loan | Interest revenue | 10,440,199.17 | 24,460,821.26 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Interest revenue | 17,299,672.42 | 9,588,766.71 |
| Songyuan Grain Group Co., Ltd. and its subsidiaries | Loan | Interest revenue | 49,766,184.02 | 7,658,695.92 |
| Shandong Zhirun Electric Appliances Co., Ltd. | Loan | Interest revenue | 141,115.31 | 3,679,077.57 |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Interest revenue | 1,373,925.57 | |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Loan | Handling charge income | 801,650.95 | |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Handling charge income | 141,698.58 | 339,622.64 |
| Shandong Jierui Logistics Co., Ltd. | Loan | Handling charge income | 194.34 | 378.30 |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Handling charge income | 189.15 | 189.15 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Handling charge income | 378.30 | 189.15 |
Related party
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period |
| Shandong Zhirun Electric Appliances Co., Ltd. | Loan | Handling charge income | 5.19 | |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Sales of commodities | Sales revenue | 4,285,955,595.20 | 8,719,678,107.95 |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | Sales of commodities | Sales revenue | 3,099,709,898.65 | 4,935,412,388.65 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Sales of commodities | Sales revenue | 4,509,434,341.94 | 5,202,670,390.20 |
| Shanghai Highly (Group) Co., Ltd. and its subsidiaries | Sales of commodities | Sales revenue | 1,135,301,130.49 | 1,487,554,791.81 |
| Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries [Note] | Sales of commodities | Sales revenue | 123,800,930.62 | 321,087,832.12 |
| Beijing Gree Technology Co., Ltd. | Sales of commodities | Sales revenue | 21,750,223.87 | 79,181,522.51 |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Sales of commodities | Sales revenue | 26,204,546.50 | 102,866.04 |
| Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | Sales of commodities | Sales revenue | 18,008,378.79 | 102,226.24 |
| Zhuhai Xima Pearl New Media Co., Ltd. | Sales of commodities | Sales revenue | 75,195.22 | |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | Sales of commodities | Sales revenue | 3,620,606.44 | |
| Henan Huizhong Yifeng Electronic Commerce Co., Ltd. | Sales of commodities | Sales revenue | 79,088,623.28 | |
| Chongqing Pargo Mechanical Equipment Co., Ltd. | Sales of commodities | Sales revenue | 474,477.90 | |
| Zhuhai Wantong Special Engineering Plastics Co., Ltd. | Sales of commodities | Sales revenue | 152,362.61 | |
| Songyuan Grain Group Co., Ltd. and its subsidiaries | Sales of commodities | Sales revenue | 49,646.00 | |
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | Sales of commodities | Sales revenue | 2,856,000.00 | |
| Total | 13,424,451,702.95 | 20,850,962,756.40 |
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. andits subsidiaries and holding subsidiaries are detailed in Note X. 8.
(2) Associated trusteeship management/contracting or entrusted management/contracting-outNone.
(3) Associated lease
1) The Company as the lessor:
| Name of the lessee | Type of leased assets | Confirmed income earned on leases | |
| Amount for the current period | Amount for the previous period | ||
| Chongqing Pargo Mechanical Equipment Co., Ltd. | House rental | 4,402.87 | |
Name of the lessee
| Name of the lessee | Type of leased assets | Confirmed income earned on leases | |
| Amount for the current period | Amount for the previous period | ||
| Wuhu Green Renewable Resources Recycling Co., Ltd. | House rental | 621,678.57 | |
| Songyuan Grain Group Co., Ltd. and its subsidiaries | House rental | 131,062.84 | 98,297.13 |
| Total | 131,062.84 | 724,378.57 | |
2) The Company as the lessee:
| Name of the lessor | Type of leased assets | Confirmed rental expenditure | |
| Amount for the current period | Amount for the previous period | ||
| Zhuhai Gree Group Co., Ltd. and its subsidiaries | Lease of fixed assets | 524,859.52 | 1,561,299.20 |
| Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries [Note] | Lease of fixed assets | 8,361,254.31 | |
| Total | 8,886,113.83 | 1,561,299.20 | |
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. andits subsidiaries and holding subsidiaries are detailed in Note X. 8.
(4) Associated guarantee
None.
(5) Fund borrowing of related party
| Related party | Amount of borrowing in the current period | Balance of borrowing at the end of the period | Start date | Date due |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 1,000,000,000.00 | 5-12 March, 2020 | 5-12 September, 2020 | |
| Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 100,000,000.00 | 18 March, 2020 | 18 September, 2020 | |
| Songyuan Grain Group Co., Ltd. and its subsidiaries [Note] | 280,000,000.00 | 11 March-30 October, 2020 | 27 October, 2020- 30 October, 2021 | |
| Total | 1,380,000,000.00 |
[Note] At the end of the period, Songyuan Grain was included in the scope of consolidation. See Note (VI) 1 fordetails.
(6) Asset transfer and debt restructuring of the related party
None.
(7) Remunerations for key management
| Item | Amount for the current period | Amount for the previous period |
| Remunerations for key management | 21,711,900.94 | 23,636,286.12 |
(8) Other related transactions
None.
6. Accounts receivable and payable by related parties
(1) Receivable items
Item
| Item | Related party | Balance at the end of the period | Beginning Balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 252,078,651.19 | 12,603,932.56 | 342,684,906.60 | 17,134,245.33 |
| Accounts receivable | Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries | 46,026,267.23 | 2,309,517.93 | 287,055,620.42 | 16,308,943.33 |
| Accounts receivable | Chongqing Pargo Mechanical Equipment Co., Ltd. | 32,670.00 | 1,633.50 | ||
| Accounts receivable | Zhuhai Xima Pearl New Media Co., Ltd. | 61,437.00 | 3,071.85 | ||
| Accounts receivable | Zhuhai Gree Group Co., Ltd. and its subsidiaries | 1,597,970.47 | 79,898.52 | 522,694.59 | 26,134.73 |
| Accounts receivable | Zhuhai Wantong Special Engineering Plastics Co., Ltd. | 13,050.00 | 652.50 | ||
| Accounts receivable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 6,053,168.30 | 302,658.42 | 6,629,024.73 | 331,451.24 |
| Other receivables | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 300.00 | 15.00 | ||
| Receivables financing | Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries [Note] | 35,829,151.38 | 866,644,774.28 | ||
| Receivables financing | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 1,354,822,618.40 | 1,445,558,820.62 | ||
| Receivables financing | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 1,060,266,463.33 | 1,378,451,569.12 | ||
| Receivables financing | Shandong Jierui Logistics Co., Ltd. | 250,000.00 | 958,492,633.76 | ||
| Receivables financing | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 51,154,515.78 | 962,599,288.80 | ||
| Receivables financing | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 250,468,129.83 | 209,149,853.41 | ||
| Receivables financing | Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | 29,922,971.83 | |||
| Receivables financing | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. | 54,790,620.60 | |||
| Prepayment | Beijing Gree Technology Co., Ltd. | 4,525,924.98 | |||
| Prepayment | Chongqing Pargo Mechanical Equipment Co., Ltd. | 1,272,187.75 | 982,237.44 | ||
| Prepayment | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 18,388,182.09 | 2,038,333.25 | ||
| Contract assets | Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 461,040.00 | 23,052.00 | ||
| Disbursement of loans and advances | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 1,400,000,000.00 | 35,000,000.00 | ||
Item
| Item | Related party | Balance at the end of the period | Beginning Balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Disbursement of loans and advances | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 890,000,000.00 | 22,250,000.00 | ||
| Disbursement of loans and advances | Shandong Jierui Logistics Co., Ltd. | 517,400,000.00 | 12,935,000.00 | ||
| Disbursement of loans and advances | Songyuan Grain Group Co., Ltd. | 1,100,000,000.00 | 27,500,000.00 | ||
| Disbursement of loans and advances | Shandong Zhirun Electric Appliances Co., Ltd. | 80,000,000.00 | 2,000,000.00 | ||
| Loans and advances - accrued interest | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 2,046,916.67 | |||
| Loans and advances - accrued interest | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 1,376,038.89 | |||
| Loans and advances - accrued interest | Shandong Jierui Logistics Co., Ltd. | 725,263.89 | |||
| Loans and advances - accrued interest | Shandong Zhirun Electric Appliances Co., Ltd. | 117,528.89 | |||
| Loans and advances - accrued interest | Songyuan Grain Group Co., Ltd. | 81,079.17 | |||
| Other current assets | Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries | 802,418,995.36 | |||
| Other non-current assets | Chongqing Pargo Mechanical Equipment Co., Ltd. | 20,224.55 | 281,863.41 | ||
| Total | 3,138,051,135.88 | 15,321,360.43 | 11,285,241,852.13 | 133,488,846.48 | |
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. andits subsidiaries and holding subsidiaries are detailed in Note (X) 8.
(2) Payable items
| Item | Related party | Balance at the end of the period | Beginning Balance |
| Contractual liabilities | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 126,505.08 | |
| Contractual liabilities | Shandong Red April Holdings Group Co., Ltd. and its | 872,251.43 |
Item
| Item | Related party | Balance at the end of the period | Beginning Balance |
| subsidiaries | |||
| Contractual liabilities | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 892,271,917.85 | 114,555,126.32 |
| Contractual liabilities | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 783,594,597.96 | 1,057,527,043.55 |
| Contractual liabilities | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 195,303,464.04 | 356,707,439.96 |
| Other current liabilities - Output tax to be wrote-off | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 16,445.66 | |
| Other current liabilities - Output tax to be wrote-off | Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | 113,392.69 | |
| Other current liabilities - Output tax to be wrote-off | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 115,995,349.32 | 14,892,166.42 |
| Other current liabilities - Output tax to be wrote-off | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 101,867,297.74 | 137,478,515.66 |
| Other current liabilities - Output tax to be wrote-off | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 25,389,450.32 | 46,371,967.19 |
| Deposit-taking | Songyuan Grain Group Co., Ltd. | 50,021,372.44 | |
| Deposit-taking | Zhuhai Gree Group Co., Ltd. and its subsidiaries | 523,466.48 | 9,208,139.00 |
| Deposit-taking | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 21,518.97 | 50,347.95 |
| Deposit-taking | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 126,971.59 | 49,087.42 |
| Deposit-taking | Shandong Jierui Logistics Co., Ltd. | 0.26 | 13,324.91 |
| Deposit-taking | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 29,820.55 | 29,714.68 |
| Deposit-taking | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 273,262.06 | 7,691.24 |
| Deposit-taking | Shandong Mely Property Co., Ltd. | 2,464.18 | |
| Deposit-taking | Shandong Zhirun Electric Appliances Co., Ltd. | 196.01 | |
| Deposits from customers - Accrued interest | Zhuhai Gree Group Co., Ltd. and its subsidiaries | 44.66 | 1,522.01 |
| Deposits from customers - Accrued interest | Songyuan Grain Group Co., Ltd. and its subsidiaries | 1,168.95 | |
| Deposits from customers - Accrued interest | Shandong Jierui Logistics Co., Ltd. | 914.35 | |
| Deposits from customers - Accrued interest | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 2.30 | 5.38 |
| Deposits from customers - Accrued interest | Shandong Shengshi Xinxing Gree Trading Co., Ltd. | 9.69 | 5.25 |
| Deposits from customers - Accrued interest | Shandong Mely Property Co., Ltd. | 0.26 | |
| Deposits from customers - Accrued interest | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 3.19 | 3.18 |
| Deposits from customers - Accrued interest | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 19.11 | 0.82 |
| Deposits from customers - Accrued interest | Shandong Zhirun Electric Appliances Co., Ltd. | 0.02 | |
| Accounts payable | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 205,355,411.45 | 445,278,880.37 |
| Accounts payable | Zhuhai Yinlong New Energy Co., Ltd. and its holding companies | 70,497,837.19 | 59,560,969.05 |
Item
| Item | Related party | Balance at the end of the period | Beginning Balance |
| Accounts payable | Beijing Gree Technology Co., Ltd. | 17,669,736.14 | 20,290,119.30 |
| Accounts payable | Hunan Green Renewable Resources Recycling Co., Ltd. | 3,341,338.52 | 4,111,822.34 |
| Accounts payable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 3,789,547.79 | 4,011,812.79 |
| Accounts payable | Chongqing Pargo Mechanical Equipment Co., Ltd. | 4,875,439.28 | 3,885,008.94 |
| Accounts payable | Zhuhai Gree Group Co., Ltd. and its subsidiaries | 858,490.19 | 769,880.13 |
| Accounts payable | Songyuan Grain Group Co., Ltd. and its subsidiaries | 722,696.60 | |
| Accounts payable | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 249,988.68 | |
| Other payables | Shanghai Highly (Group) Co., Ltd. and its subsidiaries | 1,013,050.00 | 30,293.52 |
| Other payables | Beijing Gree Technology Co., Ltd. | 205,402.42 | 5,402.42 |
| Other payables | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 204.24 | 204.24 |
| Other payables | Zhuhai Gree Group Co., Ltd. and its subsidiaries | 80,000.00 | 5,411.63 |
| Other payables | Chongqing Pargo Mechanical Equipment Co., Ltd. | 141,592.92 | |
| Total | 2,423,227,710.67 | 2,326,966,837.58 |
7. Related party's commitment
None.
8. Related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries
(1) Purchase of commodities/receiving of services and payables and prepayments
Related party
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period | Balance at the end of the period | Beginning Balance |
| Other non-current assets (+)/accounts payable (-) | Other non-current assets (+)/accounts payable (-) | |||||
| Zhuhai Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 32,456,758.70 | 54,076,060.52 | -76,830,334.68 | -55,832,870.55 |
| Zhuhai Yinlong Electric Appliance Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 1,931,623.93 | -218,273.50 | -218,273.50 | |
| Zhuhai Yinlong New Energy Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 16,381,555.97 | 4,677,568.56 | -2,464,269.09 | -2,946,841.40 |
| Shijiazhuang Zhongbo Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 384,706.96 | 7,434,867.09 | 320,894.16 | |
| Tianjin Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 156,878.28 | 2,175,159.89 | 8,805.08 | -25,677.08 |
| Tianjin Yinlong New Energy Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 2,106,414.29 | 622,066.91 | -243,255.40 | -288.00 |
| Chengdu Yinlong New Energy Co., Ltd. | Purchase of fixed assets and materials and lease of fixed assets | New energy vehicles and energy storage equipment, etc. | 385,045.87 | 253,529.85 | -419,700.00 | -286,488.73 |
| Hebei Yinlong New Energy Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 90,311.20 | 50,000.00 | 300,000.00 | |
| Chengdu Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 404,164,773.10 | 1,218,216.07 | 9,198,296.24 | -550,529.79 |
| Altairnano Inc. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 6,317.88 | 50,000.00 | ||
| Luoyang Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 701,769.91 | |||
| Luoyang Yinlong New Energy Co., Ltd. | Purchase of fixed assets and materials and lease of fixed assets | New energy vehicles and energy storage equipment, etc. | 7,976,509.12 |
Related party
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period | Balance at the end of the period | Beginning Balance |
| Other non-current assets (+)/accounts payable (-) | Other non-current assets (+)/accounts payable (-) | |||||
| Handan Branch of Zhuhai Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 21,928.04 | 50,000.00 | ||
| Luoyang Branch of Zhuhai Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | New energy vehicles and energy storage equipment, etc. | 56,156.19 | |||
| Total | 464,889,125.51 | 72,389,092.82 | -70,497,837.19 | -59,560,969.05 |
[Note] The above-mentioned related transactions included RMB 456,527,871.20 for purchase of fixed assets and materials and RMB 8,361,254.31 for lease of fixedassets, totaling RMB 464,889,125.51.
(2) Sales of commodities/rendering of services and receivables and advances from customers
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period | Balance at the end of the period | Beginning Balance | ||
| Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | |||||
| Hebei Yinlong New Energy Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 11,484,769.87 | 12,771,027.31 | 3,533,733.09 | -8,363,164.52 | 648,985,142.03 | |
| Altairnano Inc. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 100,000.00 | |||||
| Chengdu Guangtong Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 4,189,479.65 | 5,399,830.77 | 4,734,112.00 | -779,170.51 | ||
| Tianjin Guangtong Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 3,982,247.77 | 54,796,039.36 | 4,499,940.00 | -728,658.77 | ||
| Chengdu Yinlong New Energy Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, | 52,625,416.72 | 23,795,711.05 | ||||
Related party
| Related party | Type of related transactions | Contents of related transactions | Amount for the current period | Amount for the previous period | Balance at the end of the period | Beginning Balance | ||
| Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | |||||
| motors, etc. | ||||||||
| Zhuhai Yinlong New Energy Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 25,795,708.14 | 11,947,948.73 | 2,460,901.13 | 24,186,193.10 | 303,700,960.38 | 802,418,995.36 |
| Tianjin Yinlong New Energy Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 126,713,067.31 | 665,000.00 | ||||
| Zhuhai Guangtong Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 4,015,794.02 | 36,972.48 | 6,608,210.07 | 391,183.31 | 67,893,830.24 | |
| Zhuhai Yinlong Electric Appliance Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 18,096,962.94 | 20,133,788.34 | 10,000,000.00 | -6,924,346.16 | ||
| Shijiazhuang Zhongbo Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 3,591,835.91 | 85,627,235.11 | 4,055,582.60 | 586,774.97 | 149,765,802.01 | |
| Handan Branch of Zhuhai Guangtong Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 50,000.00 | |||||
| Luoyang Branch of Zhuhai Guangtong Automobile Co., Ltd. | Sales of commodities | Sales of smart equipment, bus air conditioners, molds, motors, etc. | 18,715.60 | |||||
| Total | 123,800,930.62 | 321,087,832.12 | 46,026,267.23 | 35,829,151.38 | 287,055,620.42 | 1,669,063,769.64 | ||
XI. Share-based paymentsNone.XII. Commitments and contingencies
1. Important commitments
The Company had no significant commitments to be disclosed.
2. Contingencies
None.
3. Others
None.XIII. Events after the balance sheet date
1. Important non-adjustment matters
None.
2. Profit distribution
According to the resolution at the nineteenth meeting of the eleventh session of the board of directors, theCompany's profit distribution plan of 2020: Temporarily calculated by the total 5,832,851,217 shares entitled toprofit distribution rights on 28 April, 2021 (namely the total stock capital of the Company equivalent to6,015,730,878 shares minus 182,879,661 shares held by the Company's repurchase account), all shareholders willbe distributed a cash of RMB 30 (tax included) per 10 shares, with the total amount of cash dividends to bedistributed in such a way up to RMB 17,498,553,651.00. This distribution preplan still needs to be approved bythe general meeting of shareholders.
3. Sales return
No important sales return occurred after the balance sheet date.
4. Other events after the balance sheet date
None.XIV. Other important events
1. Correction of early errors in accounting
None.
2. Debt restructuring
None.
3. Asset replacement
(1) Exchange of non-monetary assets
None.
(2) Replacement of other assets
None.
4. Pension plan
None.
5. Discontinued operation
Item
| Item | Revenue | Expense | Total profit | Income tax expenses | Net profits | Profit from discontinued operation attributable to owners of parent company |
| Gree (USA) Sales Co., Ltd. | 275,791.17 | -275,791.17 | 5,517.20 | -281,308.37 | -281,308.37 |
(Continued)
| Item | Net cash flows from operating activities | Net cash flows from investment activities | Net cash flows from financing activities |
| Gree (USA) Sales Co., Ltd. | -281,308.37 |
6. Other important transactions and events affecting investor decisions
(1) Share repurchase
The Company held the tenth and sixteenth meetings of the eleventh session of board of directors on 10 April, 2020and 13 October, 2020, respectively, which deliberated and approved the Proposal on the Partial Repurchase ofPublic Shares and agreed to the Company's use of self-owned funds to repurchase the Company's A shares bymeans of centralized bidding transactions (hereinafter referred to as "Phase-1 Repurchase" and "Phase-2Repurchase"), and the total amount of repurchase funds of each phase shall not be lower than RMB 3 billion(inclusive) and shall not exceed RMB 6 billion (inclusive).As at 24 February, 2021, the phase-1 repurchase plan of the Company had been implemented. The Companyaccumulatively bought 108,365,753 shares of the Company by means of centralized bidding transactions throughthe special securities repurchase account. The highest transaction price was RMB 60.18/share, the lowesttransaction price was RMB 53.01/share, and the total transaction amount was RMB 5,999,591,034.74 (excludingtransaction costs). As at 28 April, 2021, for the phase-2 repurchase plan, the Company accumulatively bought74,513,908 shares of the Company by means of centralized bidding transactions through the special securitiesrepurchase account. The highest transaction price was RMB 61.95/share, the lowest transaction price was RMB
56.46/share, and the total transaction amount was RMB 4,420,644,968.79 (excluding transaction costs). Bothphases of repurchases complied with the requirements of relevant laws and regulations, as well as the Company'sestablished repurchase plans.
(2) Issuance of ultra-short-term financing bills
The Company's first extraordinary general meeting of shareholders in 2020 considered and approved the
"Proposal on Debt Financing Instruments to be Registered and Issued", and agreed that the Company registersdebt financing instruments with a total amount not exceeding RMB 18 billion (inclusive), of which theultra-short-term financing bonds to be registered do not exceed RMB 10 billion (inclusive), the short-termfinancing bonds to be registered do not exceed RMB 3 billion (inclusive), and the medium-term notes to beregistered do not exceed RMB 5 billion (inclusive).The China Interbank Market Dealers Association held the 37th registration meeting in 2020 on 7 April, 2020,agreed to accept the registration of the Company's ultra-short-term financing bonds, short-term financing bondsand medium-term bills, and issued the Registration Acceptance Notice for them respectivelyAccording to the Company's capital plan arrangement and the inter-bank market situation, during 21 January - 16April, 2021, the Company issued the first - fifth phases of ultra-short-term financing bonds for 2021, and the totalactual issuance amount was RMB 15 billion. The first-fifth phases of ultra-short-term financing bills werehonored on 26 February, 9 April, 26 June, 6 July and 2 June, 2021 respectively.XV. Notes to main items of financial statements of the parent company
1. Accounts receivable
(1) Receivable are disclosed by account age
Account age
| Account age | Balance at the end of the period |
| Within 1 year | 3,505,314,072.52 |
| 1 to 2 years | 159,850,396.86 |
| 2 to 3 years | 105,768,515.14 |
| Over 3 years | 12,912,969.90 |
| Subtotal | 3,783,845,954.42 |
| Less: Bad debt provisions | 235,054,259.15 |
| Total | 3,548,791,695.27 |
(2) Accounts receivable is disclosed by category
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Carrying amount | |||
| Amount | Percentage (%) | Amount | Percentage of appropriation (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 4,715,115.32 | 0.12 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 3,779,130,839.10 | 99.88 | 230,339,143.83 | 6.10 | 3,548,791,695.27 |
| Including: account age combination | 3,019,555,812.57 | 79.81 | 230,339,143.83 | 7.63 | 2,789,216,668.74 |
| Risk free combination | 759,575,026.53 | 20.07 | 759,575,026.53 | ||
| Total | 3,783,845,954.42 | 100.00 | 235,054,259.15 | 6.21 | 3,548,791,695.27 |
(Continued)
Category
| Category | Beginning Balance | ||||
| Book balance | Bad debt provision | Carrying amount | |||
| Amount | Percentage (%) | Amount | Percentage of appropriation (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 4,715,115.32 | 0.11 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 4,105,680,036.39 | 99.89 | 232,409,515.06 | 5.66 | 3,873,270,521.33 |
| Including: account age combination | 3,480,423,548.05 | 84.68 | 232,409,515.06 | 6.68 | 3,248,014,032.99 |
| Risk free combination | 625,256,488.34 | 15.21 | 625,256,488.34 | ||
| Total | 4,110,395,151.71 | 100.00 | 237,124,630.38 | 5.77 | 3,873,270,521.33 |
1) Accounts receivable with bad debt provisions accrued separately:
| Name | Balance at the end of the period | |||
| Book balance | Bad debt provision | Percentage of appropriation (%) | Reason for appropriation | |
| Entity 1 | 4,715,115.32 | 4,715,115.32 | 100.00 | Expected to be difficult to recover |
| Total | 4,715,115.32 | 4,715,115.32 | 100.00 | -- |
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
| Account age | Book balance | Bad debt provision | Percentage of appropriation (%) |
| Within 1 year | 2,745,739,045.99 | 137,286,952.30 | 5.00 |
| 1 to 2 years | 159,850,396.86 | 31,970,079.37 | 20.00 |
| 2 to 3 years | 105,768,515.14 | 52,884,257.58 | 50.00 |
| Over 3 years | 8,197,854.58 | 8,197,854.58 | 100.00 |
| Total | 3,019,555,812.57 | 230,339,143.83 | 7.63 |
3) In the combination, the accounts receivable with bad debt provisions accrued by low risk combination
None.
(3) Bad debt provision appropriated, recovered or reversed in the current period
| Category | Beginning Balance | Change of the current period | Balance at the end of the period | |||
| Appropriation | Recovered or reversed | Wrote-off | Others | |||
| Accrued separately | 4,715,115.32 | 4,715,115.32 | ||||
| Account age combination | 232,409,515.06 | 2,070,371.23 | 230,339,143.83 | |||
| Total | 237,124,630.38 | 2,070,371.23 | 235,054,259.15 | |||
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Particulars on accounts receivable actually wrote-off in the current periodNone.
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
Name of entity
| Name of entity | Balance at the end of the period of accounts receivable | Percentage (%) in the total balance at the end of the period of accounts receivable | Balance of provision for bad debts at the end of the period |
| First | 838,780,517.80 | 22.17 | 41,939,025.89 |
| Second | 687,830,573.02 | 18.18 | |
| Third | 155,015,146.87 | 4.10 | 9,007,363.94 |
| Fourth | 114,960,567.88 | 3.04 | 5,748,028.39 |
| Fifth | 108,651,482.62 | 2.87 | 5,432,574.13 |
| Total | 1,905,238,288.19 | 50.36 | 62,126,992.35 |
(6) Accounts receivable derecognized due to the transfer of financial assetsNone.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivableNone.
2. Other receivables
| Item | Balance at the end of the period | Beginning Balance |
| Other receivables | 2,304,222,611.24 | 2,757,398,837.97 |
| Dividends receivable | 2,932,373.42 | |
| Total | 2,307,154,984.66 | 2,757,398,837.97 |
[Note] Other receivables in the above table refers to other receivables after deduction of the interest receivable anddividends receivable.
(1) Classification of other receivables by the nature of money
| Nature of money | Book balance at the end of the period | Book balance at the beginning of the period |
| Intercourse funds and risk-free money | 2,310,790,456.35 | 2,764,178,780.86 |
| Less: Bad debt provisions | 6,567,845.11 | 6,779,942.89 |
| Total | 2,304,222,611.24 | 2,757,398,837.97 |
(2) Particulars on accruing of bad debt provisions
| Bad debt provision | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) |
Bad debt provision
| Bad debt provision | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as at 1 January, 2020 | 4,881,492.49 | 1,898,450.40 | 6,779,942.89 | |
| Appropriation for the current period | 496,094.20 | 496,094.20 | ||
| Reserved in the current period | 708,191.98 | 708,191.98 | ||
| Balance as at 31 December, 2020 | 4,173,300.51 | 2,394,544.60 | 6,567,845.11 |
(3) Disclosure by account age
| Account age | Book balance |
| Within 1 year | 2,307,405,410.83 |
| 1 to 2 years | 413,410.49 |
| 2 to 3 years | 1,319,545.06 |
| Over 3 years | 1,652,089.97 |
| Subtotal | 2,310,790,456.35 |
| Less: Bad debt provisions | 6,567,845.11 |
| Total | 2,304,222,611.24 |
(4) Bad debt provision appropriated, recovered or reversed in the current period
| Category | Beginning Balance | Change of the current period | Balance at the end of the period | ||
| Appropriation | Recovered or reversed | Wrote-off | |||
| Account age combination | 6,779,942.89 | 496,094.20 | 708,191.98 | 6,567,845.11 | |
| Total | 6,779,942.89 | 496,094.20 | 708,191.98 | 6,567,845.11 | |
(5) Particulars on other receivables actually wrote-off in the current period
None.
(6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Nature of money | Balance at the end of the period | Account age | Proportion to the total balance of other receivables at the end of the period (%) | Balance of provision for bad debts at the end of the period |
| First | Risk-free money | 1,867,782,133.47 | Within 1 year | 80.83 | |
| Second | Risk-free money | 205,347,922.46 | Within 1 year | 8.89 | |
| Third | Risk-free money | 54,293,176.38 | Within 1 year | 2.35 | |
| Fourth | Risk-free money | 45,000,000.00 | Within 1 year | 1.95 |
Name of entity
| Name of entity | Nature of money | Balance at the end of the period | Account age | Proportion to the total balance of other receivables at the end of the period (%) | Balance of provision for bad debts at the end of the period |
| Fifth | Intercourse funds | 27,294,761.04 | Within 1 year | 1.18 | 1,364,738.05 |
| Total | -- | 2,199,717,993.35 | -- | 95.20 | 1,364,738.05 |
(7) Receivables involving government subsidies
None.
(8) Other receivables derecognized due to the transfer of financial assets
None.
(9) Assets and liabilities formed due to the transfer and continuous involvement of other receivablesNone.
3. Long-term equity investment
Item
| Item | Balance at the end of the period | Beginning Balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investment in subsidiaries | 17,421,936,741.10 | 17,421,936,741.10 | 13,160,012,796.05 | 13,160,012,796.05 | ||
| Investment in associated and joint ventures | 7,199,360,635.26 | 1,940,009.35 | 7,197,420,625.91 | 7,066,126,170.64 | 1,940,009.35 | 7,064,186,161.29 |
| Total | 24,621,297,376.36 | 1,940,009.35 | 24,619,357,367.01 | 20,226,138,966.69 | 1,940,009.35 | 20,224,198,957.34 |
(1) Investment in subsidiaries
| Name of invested entities | Opening balance (book value) | Increase/Decrease in the current period | Closing balance (book value) | Balance of provision for impairment at the end of the period | |||
| Additional investment | Disinvestment | Appropriated provision for impairment | Others | ||||
| Gree (Brazil) Electric Appliances Co., Ltd. | 659,342,914.36 | 659,342,914.36 | |||||
| Gree (Chongqing) Electric Appliances Co., Ltd. | 223,100,000.00 | 223,100,000.00 | |||||
| GREE Shanghai Air Conditioners Sales Co., Ltd | 1,800,000.00 | 1,800,000.00 | |||||
| Zhuhai Gree Group Finance Company Limited | 1,400,371,239.99 | 2,640,000,000.00 | 4,040,371,239.99 | ||||
| Zhuhai Gree Electrical Co., Ltd. | 1,684,680,359.95 | 1,684,680,359.95 | |||||
| Zhuhai Landa Compressor Co., Ltd. | 968,225,519.93 | 968,225,519.93 | |||||
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | 154,290,096.61 | 154,290,096.61 | |||||
| Zhuhai Gree TOSOT Life Electric Appliances Co., Lid. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai Kaibang Motor Manufacture Co., Ltd. | 83,860,929.67 | 83,860,929.67 | |||||
| Gree (Hefei) Electric Appliances Co., Ltd. | 505,370,626.10 | 505,370,626.10 | |||||
Name of invested entities
| Name of invested entities | Opening balance (book value) | Increase/Decrease in the current period | Closing balance (book value) | Balance of provision for impairment at the end of the period | |||
| Additional investment | Disinvestment | Appropriated provision for impairment | Others | ||||
| Gree Hong Kong Electric Appliances Sales Co., Ltd. | 472,879.08 | 472,879.08 | |||||
| Zhuhai Gree Dakin Device Co., Ltd. | 283,117,574.47 | 283,117,574.47 | |||||
| Zhuhai Gree Daikin Precision Mold Co., Ltd. | 201,911,186.86 | 201,911,186.86 | |||||
| GREE (Zhongshan) Home Appliances Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Gree Green Refrigeration Technology Center Co., Ltd. Of Zhuhai | 676,040,000.00 | 676,040,000.00 | |||||
| Zhuhai HVAC Equipment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Gree (Wuhan) Electric Appliances Co., Ltd. | 600,000,000.00 | 600,000,000.00 | |||||
| Gree (Zhengzhou) Electric Appliances Co., Ltd. | 720,000,000.00 | 720,000,000.00 | |||||
| Gree Zhengzhou Green Resources Recycling Co., Ltd | 5,000,000.00 | 5,000,000.00 | |||||
| Hunan Green Resources Recycling Co., Ltd | 5,000,000.00 | 5,000,000.00 | |||||
| Wuhu Green Resources Recycling Co., Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
| Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Gree (Wuhu) Electric Appliances Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Shijiazhuang Green Resources Recycling Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Gree (Shijiazhuang) Electric Appliances Co., Ltd. | 98,940,059.97 | 98,940,059.97 | |||||
| Tianjin Green Resources Recycling Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Zhuhai Ligao Precision Manufacturing Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
Name of invested entities
| Name of invested entities | Opening balance (book value) | Increase/Decrease in the current period | Closing balance (book value) | Balance of provision for impairment at the end of the period | |||
| Additional investment | Disinvestment | Appropriated provision for impairment | Others | ||||
| Gree Changsha HVAC Equipment Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai IVP Information Technology Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Gree TOSOT (Suqian) Home Appliances Co., Ltd. | 140,000,000.00 | 140,000,000.00 | |||||
| Wuhu Precision Manufacturing Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai Gree New Material Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai GREE Intelligent Equipment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Zhuhai Hengqin GREE business factoring Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Zhuhai Gree Precision Mold Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Gree (Wuhan) Precision Mold Co., Ltd. | 80,000,000.00 | 80,000,000.00 | |||||
| Zhuhai GREE Intelligent Equipment Technology Research Institute Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Gree Energy Environment Technology Co., Ltd. | 200,000,000.00 | 200,000,000.00 | |||||
| Gree (Wuhan) HVAC Equipment Co., Ltd. | 40,000,000.00 | 40,000,000.00 | |||||
| Gree (Hangzhou) Electric Appliances Co., Ltd. | 550,000,000.00 | 550,000,000.00 | |||||
| Zhuhai Gree Info Technology Co., Ltd. | 510,000.00 | 510,000.00 | |||||
| Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | 210,000,000.00 | 210,000,000.00 | |||||
| Zhuhai Gree Transportation Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Gree (Luoyang) Electric Appliances Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Gree (Nanjing) Electric Appliances Co., Ltd. | 300,000,000.00 | 204,000,000.00 | 504,000,000.00 | ||||
Name of invested entities
| Name of invested entities | Opening balance (book value) | Increase/Decrease in the current period | Closing balance (book value) | Balance of provision for impairment at the end of the period | |||
| Additional investment | Disinvestment | Appropriated provision for impairment | Others | ||||
| Zhuhai Gree Material Supply Co., Ltd. | 150,000,000.00 | 150,000,000.00 | |||||
| Gree (Chengdu) Electric Appliances Co., Ltd. | 400,000,000.00 | 400,000,000.00 | |||||
| Hefei Kinghome Electrical Co., Ltd. | 1,247,087,108.76 | 1,247,087,108.76 | |||||
| Zhuhai Zero Boundary Integrated Circuit Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Lianyun Technology Co., Ltd. | 40,000,000.00 | 40,000,000.00 | |||||
| Zhuhai Gree Electrical and Mechanical Engineering Co., Ltd. | 149,092,300.30 | 149,092,300.30 | |||||
| Zhuhai Gree Green Resources Recycling Co., Ltd | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Gree Lvkong Technology Co., Ltd. | 270,000,000.00 | 270,000,000.00 | |||||
| Gree (Luoyang) Washing Machine Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd. | 22,500,000.00 | 22,500,000.00 | |||||
| Gree (Anji) Precision Mold Co., Ltd. | 47,300,000.00 | 12,700,000.00 | 60,000,000.00 | ||||
| Songyuan Grain Group Co., Ltd. | 230,223,945.05 | 230,223,945.05 | |||||
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | 1,000,000,000.00 | 1,000,000,000.00 | |||||
| Zhuhai Ge Health Medical Technology Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Chengdu Gree Xinhui Medical Equipment Co., Ltd. | 75,000,000.00 | 75,000,000.00 | |||||
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 80,000,000.00 | 80,000,000.00 | |||||
| Total | 13,160,012,796.05 | 4,031,700,000.00 | 230,223,945.05 | 17,421,936,741.10 | |||
(2) Investment in associated and joint ventures
Name of investedentities
| Name of invested entities | Beginning Balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||
| Original value | Provision for impairment | Additional investment/withdrew investment | Investment profits/losses recognized under the equity method | Adjustment of other comprehensive income | Changes in other equities | Cash dividends or profits declared to distribute | Other decreases | Original value | Provision for impairment | |
| 1. Joint venture | ||||||||||
| Songyuan Grain Group Co., Ltd. [Note] | 74,672,147.86 | 150,000,000.00 | 6,164,997.18 | 2,319,173.43 | 2,932,373.42 | 230,223,945.05 | ||||
| Subtotal | 74,672,147.86 | 150,000,000.00 | 6,164,997.18 | 2,319,173.43 | 2,932,373.42 | 230,223,945.05 | ||||
| 2. Associates | ||||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | ||||||
| Liaowang All Media Communication Co., Ltd. | 31,511,790.36 | 1,574,756.85 | 2,966,412.88 | 36,052,960.09 | ||||||
| Beijing Gree Technology Co., Ltd. | 2,701,833.71 | -407,582.62 | 2,294,251.09 | |||||||
| Chongqing Pargo Mechanical Equipment Co., Ltd. | 11,565,505.21 | -316,275.18 | 11,249,230.03 | |||||||
| Gree Volinco (Hong Kong) Ltd. | 924,327.19 | -1,169,388.58 | 427,819.56 | -182,758.17 | ||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 14,574,841.85 | 154,246.07 | 14,729,087.92 | |||||||
| Hunan Guoxin Semiconductor Technology Co., Ltd. | 10,010,170.50 | 10,000,000.00 | 89,674.97 | 20,099,845.47 | ||||||
| Zhuhai Ronglin Equity | 6,867,715,580.60 | -21,142,722.89 | 215,136,201.85 | 7,061,709,059.56 | ||||||
Name of investedentities
| Name of invested entities | Beginning Balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||
| Original value | Provision for impairment | Additional investment/withdrew investment | Investment profits/losses recognized under the equity method | Adjustment of other comprehensive income | Changes in other equities | Cash dividends or profits declared to distribute | Other decreases | Original value | Provision for impairment | |
| Investment Partnership (Limited Partnership) | ||||||||||
| Henan Yuze Finance Leasing Co., Ltd. | 50,509,964.01 | 1,286,191.49 | 509,963.75 | 51,286,191.75 | ||||||
| Subtotal | 6,991,454,022.78 | 1,940,009.35 | 8,830,611.42 | -18,333,891.75 | 214,953,443.68 | 2,966,412.88 | 509,963.75 | 7,199,360,635.26 | 1,940,009.35 | |
| Total | 7,066,126,170.64 | 1,940,009.35 | 158,830,611.42 | -12,168,894.57 | 214,953,443.68 | 5,285,586.31 | 3,442,337.17 | 230,223,945.05 | 7,199,360,635.26 | 1,940,009.35 |
[Note] For the increase/decrease in the current period - other changes of Songyuan Grain Group Co., Ltd., see Note (V) 14 for details.
4. Operating revenues and operating costs
Item
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 101,918,116,676.30 | 70,442,870,159.78 | 130,710,855,078.36 | 93,652,520,856.50 |
| Other businesses | 5,923,673,498.19 | 5,565,482,185.50 | 5,508,511,105.25 | 5,056,537,993.65 |
| Total | 107,841,790,174.49 | 76,008,352,345.28 | 136,219,366,183.61 | 98,709,058,850.15 |
[Note] At the end of the reporting period, the amount of revenue corresponding to the performance obligations forwhich the contracts have been signed but not yet performed or not yet completed was RMB 15,900,877,125.62.
5. Investment income
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income measured by equity method | -12,168,894.57 | -20,983,248.83 |
| Investment income recognized from trading financial assets | 213,050,762.46 | 48,942,780.74 |
| Dividend share confirmed for long-term equity investment income measured by cost method | 12,177,372,543.12 | 4,658,202,677.12 |
| Others | 24,372,625.28 | -64,395,283.20 |
| Total | 12,402,627,036.29 | 4,621,766,925.83 |
XVI. Supplementary information
1. Schedule of non-recurring profit and loss
| Item | Amount | Description |
| Profit and loss from disposal of non-current assets | -4,974,224.62 | For details, see Note (V) 57, Note (V) 58, and Note (V) 59 |
| Governmental subsidies recorded into the current gains and losses (excluding the governmental subsidies closely relating to the business of the enterprise and enjoyed by a fixed quota or a fixed amount in accordance with the state policies) | 1,346,168,393.38 | For details, see Note (V) 52 and Note (V) 58 |
| Capital occupation fee collected from the non-financial institution and recorded into the current gains and losses | 883,505.62 | |
| Gains and losses caused by fair value changes from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment income obtained from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, | 877,450,950.74 |
Item
| Item | Amount | Description |
| derivative financial liabilities and other debt investments, except for the effective hedging business related to the Company's normal business operations | ||
| Non-operating incomes and expenditures other than the above items | 50,024,914.68 | For details, see Note (V) 58 and Note (V) 59 |
| Other profit and loss items that conform to the definition of non-recurring profit and loss | 17,915,425.64 | |
| Subtotal | 2,287,468,965.44 | |
| Less: Influence amount of income tax | 386,974,457.37 | |
| Impact of minority shareholders' equity | 11,202,406.75 | |
| Total | 1,889,292,101.32 |
2. Rate of return on net assets and earnings per share
| Profit during the report period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (Yuan per Share) | Diluted earnings per share (Yuan per Share) | ||
| Net profit attributable to shareholders of ordinary stocks of the Company | 18.88% | 3.71 | 3.71 |
| Net profit attributable to shareholders of ordinary stocks of the Company after deduction of non-recurring profit and loss | 17.27% | 3.39 | 3.39 |
Section XIII References(I) The accounting statements signed and sealed by Dong Mingzhu, the legal representative, Liao Jianxiong, chiefaccountant and Liu Yanzi, head of accounting department.(II) The original audit report sealed by China Audit Union Power Certified Public Accountants Co., Ltd. andsigned and sealed by certified public accountants Han Zhenping and Geng Ting.(III) Originals and original drafts of all the Company's documents and announcements published on thenewspapers designated by CSRC and on www.cninfo.com.cn within the Report Period.
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
29 April, 2021