长虹美菱股份有限公司 CHANGHONG MEILING CO., LTD. 二〇二三年年度报告 Annual Report 2023 Annual Report 2023 I. Important Notice, Table of Contents and Definitions Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Changhong Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Mr. Wu Dinggang, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work and Mr. Yang Jun, person in charge of accounting organ (accountant in charge) hereby confirm that the Financial Report of 2023 Annual Report is authentic, accurate and complete. The Company did not have directors, supervisors and senior executives of the Company could not guarantee the reality, accuracy and completion of the whole contents or have objections. All the directors attended the board meeting to deliberating the Report by a combination of on-site and communication. Modified audit opinions notes □ Applicable √ Not applicable Shine Wing Certified Public Accountants (LLP) issued standard unqualified Auditors’ Report for the Company’s Financial Report of 2023. Major defects in internal control □ Applicable √Not applicable The Company had no major defects in internal control in the reporting period. Risk warning of concerning the forward-looking statements with future planning involved in annual report √ Applicable □Not applicable Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors, investors and the person concerned should maintain adequate risk awareness, furthermore, differences between the plans, forecast and commitments should be comprehended. Investors are advised to exercise caution of investment risks. Investors are advised to read the full text of annual report, and pay particular attention to the following risk factors: More details about the possible risks and countermeasures in the operation of the Company are described in the report “XI. Prospects for the future development of the company” of “Section III. Management Analysis and Discussion”, investors are advised to read the relevant content. Securities Times, China Securities Journal and Juchao Website (Juchao Website (www.cninfo.com.cn)) are the media for information disclosure for year of 2024 that appointed by the Company. All public information under the name of the Company disclosed on the above said media and website shall prevail, and investors are advised to exercise caution. Does the Company need to comply with disclosure requirements of the special industry: No Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in the reporting period √ Applicable □ Not applicable Whether to increase the share capital with public reserve 2 Annual Report 2023 □Yes √No The profit distribution plan for year of 2023, that deliberated and approved by 42th session of the 10th BOD was: take total shares of 1,029,923,715 shares as base dated 31 December 2023, distributed 3 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, no share bonus issued and no capitalizing of common reserves carried out. Directors, supervisors and senior executives of the Company respectively signed a Written Confirmation Opinions for 2023 Annual Report. Supervisory Committee of the Company formed Written Examination Opinions for 2023 Annual Report. 3 Annual Report 2023 Contents I.Important Notice, Table of contents and Definitions 2 II. Company Profile & Financial Highlights. 7 III. Management Discussion & Analysis 14 IV. Corporate Governance 58 V. Environmental & Social Responsibility 88 VI. Important Events 96 VII. Change of share capital and shareholding of Principal Shareholders 163 VIII. Situation of the Preferred Shares 172 IX. Corporate Bond 173 X. Financial Report 174 4 Annual Report 2023 Documents Available for Reference I.Financial statement carrying the signatures and seals of the Chairman, principal of the accounting works and person in charge of accounting organ; II. Original audit report carrying the seal of the CPA and signature & seal of the accountants; III. Original documents of the Company and manuscripts of public notices that disclosed in the website designated by CSRC in the report period; 5 Annual Report 2023 Definition Terms to be defined Refers to Definition Company, The Company, Changhong Meiling Refers to CHANGHONG MEILING CO.,LTD. or Meiling Electric Sichuan Changhong or controlling shareholder Refers to Sichuan Changhong Electric Co., Ltd. Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd. Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED Meiling Group Refers to Hefei Meiling Group Holdings Limited Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd. Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd. Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd. Mianyang Meiling Refers to Mianyang Meiling Refrigeration Co., Ltd. Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co., Ltd. Ridian Technology Refers to Changhong Meiling Ridian Technology Co., Ltd. Wulian Technology Refers to Hefei Meiling Wulian Technology Co., Ltd Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., Ltd. Meiling Life Appliances Refers to Hefei Changhong Meiling Life Appliances Co., Ltd. Changhong Huayi Refers to Changhong Huayi Compressor Co., Ltd. Zhiyijia Company Refers to Sichuan Zhiyijia Network Technology Co., Ltd. Shine Wing Refers to Shine Wing Certified Public Accountants (LLP) CSRC Refers to China Securities Regulatory Commission China Securities Regulatory Commission, Anhui Province Anhui Securities Bureau Refers to Securities Regulatory Bureau SSE Refers to Shenzhen Stock Exchange 6 Annual Report 2023 II. Company Profile & Financial Highlights. I. Company Profile Changhong Meiling, Short form of the stock Stock code 000521,200521 Hongmeiling B Short form of the Stock after N/A changed (if applicable) Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in Chinese) 长虹美菱股份有限公司 Short form of the Company (in 长虹美菱 Chinese) Foreign name of the Company (if CHANGHONG MEILING CO.,LTD. applicable) Abbr. of English name of the CHML Company (if applicable) Legal representative Wu Dinggang Registrations add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei Code for registrations add 230601 The Company was registered in the Hefei Administration for Industry and Commerce on November 25, 1992 with the address registered as Linquan Road, Hefei City (Meiling Economic Development Zone); on March 13, 1997, registered address changed to No.48 Wuhu Road, Hefei Historical changes on the instead of Linquan Road, Hefei City (Meiling Economic Development Zone); on May 19, 2008, registration address the address changed to No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei from No.48 Wuhu Road, Hefei. Registered address of the Company has not changed during the reporting period. Offices add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei Codes for office add. 230601 Website http://www.meiling.com E-mail info@meiling.com II. Person/Way to contact Secretary of the Board Name Li Xia No. 2163, Lianhua Road, Economic and Technology Development Contact add. Zone, Hefei Tel. 0551-62219021 Fax. 0551-62219021 E-mail lixia@meiling.com III. Information disclosure and preparation place Website of the Stock Exchange where the annual report of the Shenzhen Stock Exchange www.szse.cn Company disclosed 7 Annual Report 2023 Media and Website where the annual report of the Company Securities Times, China Securities Journal and Juchao website: disclosed http://www.cninfo.com.cn Room of secretary of the Board, 2/F , administrative center, Office Preparation place for annual report building of the Company IV. Registration changes of the Company Organization code Uniform social credit code:9134000014918555XK Changes of main business since listing (if applicable) No changes 1. In October 1993, after initial listing, controlling shareholder of the Company-- Hefei Meiling Industrial Corp. (renamed as Hefei Meiling Group Co., dated 23 May 1994), executing controlling rights of the Company and management right of the state-owned assets on behalf of Hefei State-owned Assets Management Office, named at that time; 2. From November 1997 to May 2003, controlling shareholder of the Company was Hefei Meiling Group Holding Co., Ltd. (established base on former Meiling Group Co.,, “Meiling Group” for short), an enterprise solely owned by the State; mainly operating the state-owned capital in authorized from State-owned Assets Management Commission of Hefei City, ensuring the maintenance and appreciation of state-owned assets; 3. On 29 May 2003, Meiling Group entered into “Equity Transfer Agreement” with Shunde GreenKel Enterprise Development Co., ltd. (“GreenKel”), the 82,852,683 state-owned shares held by the Company was transfer to GreenKel. After transferring, GreenKel comes to the first largest shareholder of the Company. 4. According to the spirit of “Bulletin of Treatment Opinions on GreenKel Company purchasing State-owned Assets Shares of Listed Company” (GZFCQ[2006] No.: 44) jointly issued from SASAC and Ministry of Finance in April 2006, Meiling Group took back the Meiling Electric 82,852,683 shares from GreenKel by procedures, which has been transferred. In September 2006, relevant equity transfer agreement signed between the Meiling Group and Previous GreenKel is invalid, which was confirmed by the “Award” ((2006) HZZ No.: 104) issued from arbitration changes for commission of Hefei; the state-owned legal person’s 82,852,683 shares, held by GreenKel, should return to Meiling controlling Electric, and relevant equity consideration will pay to GreenKel by Meiling Group . On 29 December 2006, the shareholders 82,852,683 shares of Meiling Electric were transfer to Meiling Group by GreenKel, and Meiling Group becomes the (if applicable) controlling shareholder of Meiling Electric again. 5. On 18 May 2006 and 11 January 2007, Meiling Group entered into “Equity Transfer Agreement of Meiling Electric” and “Supplementary Agreement of Equity Transfer of Meiling Electric” respectively with Sichuan Changhong and Changhong Group, among the 123,396,375 shares held by Meiling Group, 82,852,683 shares were transferred respectively to Sichuan Changhong and Changhong Group according to the transfer way regulated in agreement; of this transferring, 45,000,000 shares (10.88% of total share capital of the Company) were transferred to Sichuan Changhong, the first largest shareholder of the Company while 37,852,683 shares (9.15% of total share capital of the Company) were transferred to Changhong Group, the third largest shareholder of the Company. 6. On 29 October 2008, Changhong Group and Sichuan Changhong entered into “Equity Transfer Agreement of Hefei Meiling Co., Ltd.”, the 32,078,846 restricted circulations A shares of Meiling Electric held by Changhong Group were transferred by agreement to Sichuan Changhong. On 23 December 2008, the aforesaid equity transfer was approved by “Reply on Matters of Equity held by State-owned Shareholders of Hefei Meiling Co., Ltd.” (GZCQ(2008) No.: 1413) from SASAC; on 21 January 2009, the aforesaid transfer was registered for ownership transfer in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.The first majority shareholder of the Company comes to Sichuan Changhong. 7. Sichuan Changhong participated in the Company's private placement, and Sichuan Changhong and its concert 8 Annual Report 2023 party, Hong Kong Changhong, purchased the Company's shares through bidding transaction in the secondary market. 8. Ended as 31 December 2023, Sichuan Changhong and its concerted action Hong Kong Changhong totally holds 281,832,434 shares of the Company, a 27.36% in total share capital of the Company; Sichuan Changhong directly holds 248,457,724 A-share of the Company, a 24.12% in total share capital of the Company while Hong Kong Changhong holds circulation B-share of the Company amounting as 33,374,710 shares, a 3.24% in total share capital of the Company. V. Other relevant information (1) CPA engaged by the Company Name of CPA Shine Wing Certified Public Accountants (LLP) 8/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Offices add. for CPA Cheng District, Beijing, P.R.C Signing Accountants Wang Xiaodong , Tu Xiaofeng (2) Sponsor engaged by the Company for performing continuous supervision duties in reporting period □ Applicable √ Not applicable (3) Financial consultant engaged by the Company for performing continuous supervision duties in reporting period □ Applicable √ Not applicable VI. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data □ Yes √ No Changes in the current 2023 2022 year over the previous 2021 year (+,-) Operating income 24,247,678,970.56 20,215,220,192.20 19.95% 18,032,957,501.44 (RMB) Net profit attributable to shareholders of the 741,038,108.54 244,538,734.49 203.04% 51,898,388.84 listed company (RMB) Net profit attributable to shareholders of the listed company after 749,415,002.39 102,739,493.47 629.43% -140,217,633.26 deducting non-recurring gains and losses (RMB) Net cash flow arising from operating activities 2,082,343,305.04 1,465,155,748.06 42.12% 160,923,258.10 (RMB) Basic earnings per share 0.7195 0.2366 204.10% 0.0497 (RMB/Share) Diluted earnings per 0.7195 0.2366 204.10% 0.0497 share (RMB/Share) 9 Annual Report 2023 8.53 percentage points Weighted average ROE 13.49% 4.96% 1.07% up Changes at end of the current year compared Year-end of2023 Year-end of2022 Year-end of2021 with the end of previous year (+,-) Total assets (RMB) 19,391,604,526.19 16,200,361,212.80 19.70% 15,190,469,756.33 Net assets attributable to shareholder of listed 5,824,782,654.09 5,168,286,872.09 12.70% 4,837,334,400.21 company (RMB) The cause of the accounting policy change and accounting error correction □ Applicable √ Not applicable The lower one of net profit before and after deducting the non-recurring gains/losses in the last three fiscal years is negative, and the audit report of last year shows that the ability to continue operating is uncertain □Yes √ No The lower one of net profit before and after deducting the non-recurring gains/losses is negative □Yes √ No VII. Accounting data difference under domestic and foreign accounting standards (1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period. (2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) √ Applicable □ Not applicable In RMB Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed company company Current period Previous period Ending amount Opening amount Chinese GAAP 741,038,108.54 244,538,734.49 5,824,782,654.09 5,168,471,419.72 Items and amount adjusted by foreign accounting rules Foreign accounting 741,038,108.54 244,538,734.49 5,824,782,654.09 5,168,471,419.72 rules The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period. (3) Reasons for the differences of accounting data under accounting rules in and out of China √ Applicable □ Not applicable The “Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares Offering” was issued 10 Annual Report 2023 from CSRC dated 12 September 2007, since the day issuing, cancel the previous “dual audit” requirement for companies who offering domestically listed foreign shares (B-share enterprise) while engaging securities practice qualification CPA for auditing. The Company did not compile financial report under foreign accounting rules since 2007, the financial report of the Company is complying on the “Accounting Standard for Business Enterprise” in China, and therefore, there are no differences of accounting data under accounting rules in and out of China at period-end. VIII. Quarterly main financial index In RMB First quarter Second quarter Third quarter Fourth quarter Operating income 5,025,237,527.25 7,803,456,796.32 6,338,921,510.27 5,080,063,136.72 Net profit attributable to the shareholders of 122,540,351.10 235,514,493.64 140,719,309.64 242,263,954.16 the listed company Net profit after deducting of non- recurring gain/loss 103,510,051.94 278,479,791.88 131,279,099.55 236,146,059.02 attributable to the shareholders of listed company Net Cash flow generated by business -372,008,676.48 1,782,528,486.29 995,747,226.04 -323,923,730.81 operation Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in the company’s quarterly report and semi-annual report □Yes √ No IX. Items and amounts of non-recurring profit (gains)/losses √ Applicable □ Not applicable In RMB Item 2023 2022 2021 Note Gains/losses from the Found more in disposal of non-current “Income from assets asset (including the 1,336,229.47 27,602,023.18 -133,214.72 disposal” and “Non- write-off that accrued operation for impairment of income/expenses” assets) Governmental subsidy calculated into current Please refer to gains and losses(while "Financial expenses" 80,683,233.76 86,846,880.06 103,024,250.74 closely related with the and "Other income" for normal business of the details Company, the 11 Annual Report 2023 government subsidy that accord with the provision of national policies and are continuously enjoyed in line with a certain standard quota or quantity are excluded) Gains/losses of fair value changes arising from holding of the trading financial asset, trading financial liability and investment Found more in earnings obtained from "Finincial disposing the trading cost",“Investment financial asset, trading -90,853,412.77 36,077,236.23 105,811,461.63 income” and financial liability, and “Income of fair value financial assets changes” available for sale, except for the effective hedging business related to normal operation of the Company Switch back of the impairment for Found more in receivables that has 4,547,547.09 2,834,795.58 3,245,314.13 “Account receivable" impairment test and " Constract assets" independently Found more in “Non- Other non-operating operation income" and income and expenses 6,927,799.86 761,578.29 4,867,985.38 " Non-operation other than the above expenses" Less: impact on -377,847.36 3,581,742.85 21,813,023.99 income tax Impact on minority shareholders’ equity 11,396,138.62 8,741,529.47 2,886,751.07 (post-tax) Total -8,376,893.85 141,799,241.02 192,116,022.10 -- Details of other gains/losses items that meets the definition of non-recurring gains/losses: □ Applicable √ Not applicable There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company. Explain the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in 12 Annual Report 2023 Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss □ Applicable √ Not applicable There are no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss (revised in 2023). 13 Annual Report 2023 III. Management Discussion & Analysis I. Industry of the Company during the reporting period 1. Refrigerator industry The refrigerator industry is a highly mature industry, and the market development has entered the slow development stage. From the overall data, In 2023, the price of raw materials remained at a low level throughout the year, and the pressure on the cost side of enterprises was light, but the recovery speed of the domestic home appliance market was lag behind the overall consumption, superimposed that the number of household appliances possessed in China was high, and the market has bided farewell to rapid growth and faced the dilemma of sluggish demand as a whole. According to the total data of AVC, the omni-channel retail sales of refrigerators in 2023 were 133.3 billion yuan, a YOY increase of 7.0%. The impact of overseas markets has subsided, the international sea freight has fallen back to normal levels, the efficiency advantages of Made in China have been highlighted, and the competitiveness of the whole value chain of export products has been improved; Meanwhile, driven by factors such as the relatively low inventory level of overseas channels, the export business showed a recovery growth. According to industry online data, the export volume of refrigerators in 2023 was 43.744 million units, a YOY increase of 27.4%. 2.Air-conditioning industry The domestic air conditioning market is affected by the high temperature weather in 2022, leading to earlier market consumption and an overall trend of high opening and low closing. According to the total data of AVC, the retail sales in 2023 was 211.7 billion yuan, a YOY increase of 7.5%, of which the omni-channel gained a growth in the first half of the year and the retail sales increased by 19.5% YOY; In the second half of the year, the industry continued to decline, with retail sales falling by 15.7% YOY in the third quarter and falling by 15.5% in the fourth quarter. At the beginning of 2023, the overseas air-conditioning market was affected by the international situation, geopolitics, economic downturn, global inflation and other aspects, and the export market of the air-conditioning industry was under large pressure, and the volume and price fell at the same time. After entering the second quarter, under the comprehensive favorable factors such as the decline in the price of bulk raw materials, the decline in exchange rates and shipping costs, and the global high temperature brought by the El Nio phenomenon, the purchase of air conditioners in overseas markets has increased, and the export demand for household air conditioners has gradually recovered. According to industry online data, the cumulative export of air conditioners in 2023 was 66.265 million units, a YOY increase of 8.3%; and the sales were $13.16 billion, up 1.3% YOY. 3.Washing machine industry The recovery of the domestic washing machine market in the first half of 2023 was relatively slow, with high growth only in the fourth quarter, the overall demand release was relatively slow, the scale was steadily recovering, and the market has entered a period of "intensive cultivation" of steady growth. According to the total data of AVC, the Omni-channel retail sales of domestic washing machines were 93.4 billion yuan, a YOY increase of 5.8%. As export sales were affected by favorable policies, RMB depreciation, and reduced logistics costs and other factors, which have prompted the expansion of China's home appliances to overseas markets. According to industry online data, 14 Annual Report 2023 the export sales in 2023 was 38.449 million units, a YOY increase of 37.0%. II.Main businesses of the company engaged in during the Period The Company is one of China's major electric appliance manufacturers, possesses four major domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas manufacturing bases in Indonesia and Pakistan. The Company has always adhered to the principle of "independent innovation, intelligent manufacturing in China", and has been unswervingly focusing on the home appliance industry, and carefully building the core competitiveness of the enterprise with technological innovation and product innovation. With the cutting-edge R&D team and advanced technology accumulation, Meiling has continuously made breakthroughs in many fields such as frequency conversion, intelligence, fresh-keeping, thin-walled, deodorant, energy-saving, air- cooled, cryogenic, simulation, ultra-thin, cleaning, and clothing protection. The Company has established the first RoHS public testing center in Anhui Province, a national enterprise technology center, a national industrial design center, a national postdoctoral research station, and a 5G industrial Internet innovation and application laboratory. In recent years, the Company has successively won many national honorary titles such as "Smart Refrigerator Intelligent Manufacturing Pilot Demonstration Project", "National Green Factory", "National Home Appliance Industry Quality Leading Enterprise", "National Technological Innovation Demonstration Enterprise", "China Industry-University-Research Cooperation Innovation Demonstration Enterprise" and so on. Meanwhile, the Company has won a number of technical and product innovation honors with its strong innovation, product power and brand power, and a number of Meiling products have frequently won a number of domestic awards, constantly demonstrating the ability and strength of Meiling intelligent innovation technology. The Company won the 2023 China Refrigerator Industry Smart Health Brand Award at the China Refrigerator Industry Summit Forum; "Research and Industrialization of Constant Temperature Micro-freezing Long-term Preservation Technology" won the third prize of Science and Technology Progress Award of China Light Industry Federation; "BCD-537WQ3S" of cross-door air-cooled refrigerator won the "five hundred" energy-saving products for energy conservation and environmental protection in the industrial field of the province in 2023 and the green and low-carbon product of Hefei industrial field respectively; In terms of intellectual property rights, "Four-Door Refrigerator (Cross)" and "A Refrigerator Hinge Component and a Refrigerator Based on It" won the Silver Award and Patent Excellence Award of the 10th Anhui Province Patent Appearance Design respectively; "A refrigerated indoor constant temperature zone and its control method" won the second prize of the high-value patent competition of six central provinces; Changhong fully dust-free fresh air conditioner won the industry's first "5A fresh air air-conditioning certification"; Meiling 10KG hand-washing-like drum washing machine RS2H100 set a world record for the world's fastest drum washing machine for washing white shirts stained with 10ml of old soy sauce stains, in addition, the product has also obtained CHCT "maternal and infant household appliance certification" certificate and CVC "product double safety standard certification" certificate; Meiling's "Hercules" series pulsator washing machine D7B100 won the 2023 "Good Product" of China's home appliance industry sponsored by China Household Electrical Appliances Research Institute; Meiling range hood (CXW-188-MY-KD615) won the "Low Noise Range Hood Award" in the 2023 Boiling Quality Award evaluation; The two products of "XC-168L intelligent temperature controlled medical blood box" and "CX-1000 chromatography cabinet" of Zhongke Meiling have passed the new product appraisal of Anhui Province and obtained the new product appraisal certificate of Anhui Province. 15 Annual Report 2023 After 40 years of development, the Company has built a new pattern of coordinated development of multiple categories such as refrigerator cabinets, air conditioners, washing machines, kitchens and bathrooms appliances, small household appliances and biomedical cryogenic storage equipment. Through continuous innovation, we have successively launched a series of industry-leading products such as M fresh refrigerator, the industry's first fully dust-free fresh air conditioner, the industry's leading drum washing machine as clean as hand washing, the industry's first intelligent tea bar machine, and ultra-low temperature medical refrigerator with refrigeration up to minus 180 °C, constantly bringing consumers a fresher lifestyle with fresher products. Facing the future, the Company will be based on the direction of digitalization and intelligentization, adhere to the guidance of party building, adhere to value orientation, comprehensively improve efficiency, focus on one goal, improve six capabilities, deepen internal and external collaboration, strengthen compliance and risk control, promote the sustainable and high-quality development of the industry, and take excellent performance as the traction to expand and strengthen the white household electric appliance. It will further improve the full-scene layout of smart home, rely on the Zhihuijia system (composed of the Internet of Things Iot platform and App interactive software), continue to develop 5G complete sets of home appliances, and strive to become a smart home solution provider. Meanwhile, we will strengthen digital transformation, and continue to strengthen informatization and digital transformation around intelligent manufacturing (manufacturing digitalization and quality intelligentization), 5G quantum cooperation and network security, and C+3 customer order system, so as to further promote the high- quality development of enterprises. During the reporting period, main income of the Company coming from refrigerator (freezer), air conditioner, washing machine, small home appliances, kitchen & toilet products and biomedical etc., total amounting to 24.022 billion yuan, a 99.07% of the operating income. III. Core Competitiveness Analysis (1) Brand capacity The Company is one of the famous home appliances manufacturers in China, owns several product lines such as refrigerator, The "Meiling" brand is listed as one of the most valuable brands in China. The Company adheres to the strategy of "brand revitalization", has in-depth insight of consumer behavior correlated strong brand contact point, establishes the four major support points of market, product, service and brand, and makes joint efforts with each other to form a brand revitalization plan. Through marketing, product experience, service upgrading and brand voice, the seeds of "freshness" are planted into the hearts of consumers, and the brand mindset of "Meiling equals freshness" is shaped in the hearts of consumers, so as to create the freshest products and the freshest brand image, and ultimately enhance brand awareness, reputation and loyalty. In 2023, the Company took the 40th anniversary as an opportunity to add points to the brand and help the brand get out of the circle by holding a series of themed activities such as "The First Fresh Market Music Festival" and "The First Fresh Factory Marathon"; Meanwhile, it released a new brand proposition of "Beautiful China, Fresh Meiling", and is committed to accompanying the beautiful life of hundreds of millions of families around the world with fresher products, fresher technology and fresher services. The Company continued to adhere to differentiated innovation measures such as technological innovation, product innovation, and service innovation, and manufactured refrigerators that keep food fresher, washing machines that 16 Annual Report 2023 make clothes cleaner, air conditioners that make air cleaner, household appliances that make water cleaner, and biomedical that make samples safer, and bring fresher lifestyles to hundreds of millions of consumers with fresher products. (2) Product capacity The Company has a relatively advanced and remarkable R&D and quality assurance system, and has passed the ISO9001, ISO14001 and other management system certifications, and the products have been guaranteed by high quality and reliable product performance. Meanwhile, the Company has "National Enterprise Technology Center", "National Industrial Design Center", "National Intellectual Property Demonstration Enterprise", "National Industrial Product Green Design Demonstration Enterprise", "National Technological Innovation Demonstration Enterprise", "China Industry-University-Research Cooperation Innovation Demonstration Enterprise", "Anhui Province Green Energy-saving Refrigerator Engineering Technology Research Center", "Anhui Province Energy Conservation and Fresh-keeping Green Refrigerator Engineering Research Center", "Anhui Manufacturing Innovation Center" and other authoritative certifications as a strong guarantee. In terms of technical research, the Company is committed to the application of fundamental technology research and industrialization transfer, and has established a technical strategic plan with "intelligent, frequency conversion, simulation, and preservation" as the core technology and "refrigeration, new materials, and foaming" as the key technologies. In terms of product research and development, a three-layer R&D system of technical research layer, platform module layer and product management layer has been built, and the product manager responsibility system with product management layer as the main body is responsible for the definition and development of products, which is responsible for reducing costs and improving efficiency internally, driving sales promotion externally, promoting the high integration of "research, production and marketing", and comprehensively connecting the value chain and business chain to achieve "the same desire and the same frequency resonance from top to bottom level ". In terms of refrigerator products, the Company has continued to cultivate in the field of professional refrigeration for 40 years, through the precise control of market trends and the study of consumer preferences, focusing on the product upgrade idea of "fresh, thin, narrow and embedded", and insisting on promoting the continuous improvement of product competitiveness, we have continued to strengthen the product business cards of "Meiling Fresh", "Meiling Thin", "Meiling Narrow" and "Meiling Embedded" in 2023. The Company released the second- generation embedded refrigerators “Worry free embedded Pro”and“All seamless Pro”equipped with dual evaporator system and AI cloud moisturizing technology, the "Frozen Fresh" series refrigerators with water molecule activated preservation technology and constant temperature fresh-freezing technology, and the new generation of "M Fresh" series refrigerators, as well as 600L cross-door and 400L two-door French "big and narrow door" series cross-style refrigerators. In terms of freezer products, we have developed a series of freezers with frost- free cabinet opening, thin-walled frost reduction and antibacterial freezers, -40°C cryogenic intelligent electronically controlled freezers, smart round screen display DTEB series freezers, frequency conversion large freezer commercial cabinets, -40°C quick-freezing lock fresh vertical air-freezers, outlet vertical air-cooled freezers, SC-270WE single-door refrigeration vertical display cabinets, and commercial kitchen cabinets, and continued to build the market mindset of "fresh, frozen and steel" for freezer products. In terms of washing machine products, Meiling released a series of hand-washing-like products on the " ultra-thin" 17 Annual Report 2023 drum platform, which not only continued the core functional advantages of ultra-thin and large cylinder diameter, but also returned to the essence of washing machines and strived to create a "clean" mindset of washing machines, laying the pioneer status of Meiling clean as clean as hand washing, and also demonstrated the hard core strength of washing machine products in the core technology field with triple cleaning technology, cleaner washing and ultra- high standard technology. In terms of pulsator type, the Hercules series products have been launched with "ultra- powerful motors, ultra-high wave pulsator, and high cleaning ratios" as the core, achieving industry-leading cleaning capabilities of product. In terms of air conditioning products, we adhere to the user-centered, based on the actual use scenarios of users, and have carried out product layout and iterative upgrades from "wind sense, wind outlet, and wind control", so as to continuously improve users' physical comfort, visual sense, and control convenience. Adhering to the product planning in line with the brand positioning, making differentiated products under the trend, focusing on the functions of full dust-free, long-distance air supply and near-soft air, zonal air supply and intelligent control, we have continued to create two product business cards of "choose all dust-free in the bedroom, and choose the guest dining cabinet in the living room" to solve the pain points of user needs and shape the user's mind. Centering on the development of core technology competitiveness, focusing on air conditioning inverter control technology, simulation technology and innovative technology, we have developed indoor unit direct drive 4.0 technology, winding temperature measurement automatic test and software parameter automatic optimization technology, cabinet side installation less electrolytic miniaturization V2.0 and other technologies. Insisting on strict control of product quality, and continuously strengthening the quality management of core components, the quality management of the whole machine production, the quality management of key processes and the management of key performance indicators, we have continuously improved the product quality. In terms of kitchen and bathroom and small household appliances, we adhere to the strategic support of product lead, focus on the core product line, take market demand as the guide, strengthen R&D capabilities, and optimize product structure. In terms of small household appliances, the small box series of tea bar machine products were launched, which became the explosion products in the industry, with sales exceeding 100,000 units. In terms of kitchen and bathroom appliances, we have continued to innovate and optimize product technology and performance, launched integrated stainless steel heating products in 2023, completely solved the pain points of water leakage in the industry, and put forward an after-sales commitment of 8-year warranty, which further enhanced the market reputation of the product and led the industry's product upgrading and service reform. Meanwhile, the release of the industry's leading gas self-adaptive full premixed wall-hung furnace products, the thermal efficiency is higher than the national standard, the nitrogen oxide emission reaches level 5, thus to achieve high efficiency, energy saving and green emissions, the gas adaptive function better adapts to the user's local climate and gas source changes, and the full premixed load adjustment ratio reaches 1:10, which greatly improves the user's comfortable experience. In terms of biomedicine, we adhere to the brand concept of "taking products as the main carrier and delivering core values to users", focus on the field of life sciences, continue to promote product innovation and iteration and quality upgrading based on user scenario-based needs, and provide users with professional full-scenario solutions, so as to create a safe and stable brand image and continuously enhance brand influence. In the field of low-temperature storage in life sciences, the new Ruilian series refrigerators were launched, and the temperature uniformity, 18 Annual Report 2023 temperature fluctuation and energy efficiency index of the products are much higher than the national standard, which is at the advanced level in the industry; The world's first -180°C compressor refrigeration ultra-low temperature biological storage equipment was grandly launched, which filled the market gap of compressor refrigeration equipment in the use scenario of -164°C~-180°C, and was a major breakthrough and innovation in the application of multi-mixture working fluid refrigeration technology. The newly launched Ruigu series of desktop high-speed refrigerated centrifuges, after multi-dimensional repeated tempering, are in the forefront of China in terms of centrifugal force, speed, precision, vibration, etc., and the performance fully meets the requirements of biological composition centrifugal preparation equipment, escorting the safety of multi-scene laboratories. (3) Operation capacity The Company continues to carrying out bench-marking activities to improve the operation and management standards and competitiveness of the Company. At the same time, the internal management capability has been continuously improved by continuing to carry out the improvement work in "human efficiency, money efficiency and material efficiency". The company established a hierarchical sharing system with clear goals, quantitative indicators, performance-oriented performance appraisal and incentives to activate internal productivity. Taking value chain management as the main line, continued to carry out value creation work, and enhanced the company's competitiveness. At the same time, continuously improved the internal control system and improved the ability to prevent risks. (4) Marketing ability The Company has established a relatively complete sales network and service system, which can provide users with high-quality services covering all categories of white goods. The domestic market is actively accelerated to realize the marketing transformation from product line-oriented sales management to channel- and user-oriented business services, from single-category marketing to full-category marketing, quickly building an operation management system with reasonable commercial inventory management as the core and a value management system core with terminal retail price; through determined bench marking match, achieved products leading and efficiency improvement and builds the capability for marketing system and development potential for long period of time. For the overseas markets, we continued to build marketing capabilities centering on "ice washing synergy, internal and external synergy and channel expansion". Based on the refrigerator and cabinet industry, we have cooperated with the team and channel resources to accelerate the washing machine business; With the growth of the washing machine industry, we have expanded the overall scale of exports, thereby improving operational efficiency and realizing the positive spiral type synergistic growth of ice washing. Cooperated with the advantages of the domestic market "large volume, multi-door" platform resources, we have promoted the structural upgrading of export business, and realized the two-way empowerment of domestic and overseas business with the synergy of internal and external R&D, manufacturing and resources. At the channel level, the Company adhered to the "market-driven" alternative to the traditional trade model, and built a "2B+2C" comprehensive marketing and promotion capability; Focused on key overseas markets to accelerate brand business and guided by positive scale growth, we have strengthened brand building by resources integration, and deepened the channel expansion. IV. Main Business Analysis In 2023, the competitive pressure of the home appliance industry was fierce, the Company adhered to the value 19 Annual Report 2023 orientation, comprehensive efficiency improvement, industrial synergy enhancement, and internal and external synergy, meanwhile focusing on the main battlefield to explore, the development showed a positive trend of steady progress and improvement, and the quality of operation had been greatly improved. During the reporting period, the Company's operating income reached XX yuan, a YOY increase of XX%, and the net profit reached XX yuan, a YOY increase of XX%, and the positive operating ability continued to improve. During the reporting period, the Company's operating income reached 24.248 billion yuan, a YOY increase of 19.95% and achieved a net profit of 773 million yuan, a YOY increase of 179.04%%, taking a solid step towards positive and stable operation. (1) Refrigerator (cabinet) industry In terms of the domestic market, we adhered to the business idea of value-oriented and comprehensive efficiency improvement, carried out benchmarking and efficiency improvement around the four dimensions of capital efficiency, channel efficiency, product efficiency and management efficiency, and made full use of the relatively complete sales network and service system to provide customers with high-quality services. The R&D and production end is user-centric, solving user pain points, creating user value, and promoting the transformation and upgrading of the Company's products to be more smart and high-leveled. For the market side, the Company adhered to the product strategy of "high-quality plus fine explosive products", and carried out product layout around "fresh, thin, narrow and embedded", and the series of products such as online worry-free embedded PRO and seamless PRO, offline 400L large and narrow door and frozen fresh products have been successfully launched, gained the good market response, which have promoted the improvement of product structure and the positive industry operation. In terms of overseas markets, we have given full play to the synergistic advantages of the industrial supply chain and domestic and foreign sales, continued to promote product upgrades around "large volume and multi-door" according to overseas market demand, promoted product "energy saving" based on global energy efficiency standard upgrades, and built technical advantages around frequency conversion. Meanwhile, adhering to the integration of production, marketing and supply, through the implementation of "production plan according to container schedule", we have increased the proportion of direct delivery, reduced the total inventory, promoted the improvement of capital efficiency, improved the inventory turnover rate, and comprehensively enhanced the quality and efficiency of operation. During the reporting period, the Company's refrigerator (cabinet) business achieved revenue of about 8.809 billion yuan, a YOY increase of 20.47%. (2) Air-conditioning industry In terms of the domestic market, focusing on "one goal", we adhered to the marketing strategy of "zoning management and channel expansion". Focusing on online popular single products, we have mainly promoted the "Panda Lazy" cabinet machines and QW hang-up machines, and pursued the positive scale; Expanded unique value products in offline shipping, we continued to create two business cards of "dust-free" and "guest dining cabinet", and enhanced the differentiated competitiveness of products. Throughout the year, the e-commerce business, incremental business and OEM business grew rapidly, the scale of the basic channel business increased steadily, and the capital efficiency and production efficiency continued to improve, reaching the advanced level in the industry. In terms of overseas markets, the Company continued to promote the healthy development of its business by 20 Annual Report 2023 centering on brand buildup, product focus, channel breakthroughs and digital transformation. Adhered to the principle of brand priority development, we have deeply cultivated the base market; Focusing on core key markets and key customers, it improved customer scale; By accelerating the expansion of new markets and new customers, the Company has achieved good results. We continued to promote the integrated and efficient operation of sales, production, supply, research, logistics and planning, optimized the layout of the supply chain, narrowed the supply radius, and continued to improve the efficiency of production and inventory turnover. By building benchmark lines and high-quality projects, we have continuously improved product quality, enhanced product premium ability, and empowered the business.During the reporting period, the Company's air conditioning business achieved a revenue of about 11.566 billion yuan, a YOY increase of 18.24%.. (3) Washing machine industry The Company's washing machine industry adhered to the differentiated and dislocated competition under the mainstream trend, and optimized and adjusted the product structure. In terms of the domestic market, by focusing on the Anhui market, we have focused on promoting the development of outlets, deepened the transformation of channels, and achieved scale improvement. Meanwhile we have given full play to the differentiated competitive advantage of "Ultra thin", closely focused on user needs, centering on middle products, and launched products such as hand washing series drum washing machines and Hercules series pulsator washing machines to further enhance the competitiveness of Meiling washing machines in medium and high-end products. In terms of overseas markets, we have expanded customer resources through ice washing, accelerated the completion of product layout in mainstream markets, and achieved breakthroughs in major overseas markets. Focusing on ultra-thin drum and large-capacity pulsator and by integrated resource investment, we have quickly enriched the matrix of export products, and achieved rapid growth in scale and substantial improvement in profitability; we have promoted the on-time delivery of new products and comprehensively improved customer service satisfaction. During the reporting period, the Company's washing machine business achieved the revenue of about 1.329 billion yuan, a YOY increase of 76.37%. (4) Kitchen & bathroom, small appliances After several years of accumulation and precipitation, the industry has sorted out and determined the development direction of the "troika" with tea-based, cleaning and heating, focusing on core product areas, gradually establishing industry influence, and promoting the high-quality development of the industry. Each unit continued to promote the update and iteration of product technology, accelerated the upgrading of product structure, further enriched the product matrix, enhanced product competitiveness, and improved the marketing network system, and continued to innovate to seek breakthroughs from R&D, production, brand, marketing and service. In 2023, we have comprehensively strengthened the "product traction", accumulated potential energy, further enhanced the influence of core product lines, steadily ranked in the top three in the comprehensive ranking of the drinking water category, and continued to improve brand influence.During the reporting period, the Company's kitchen and bathroom and small household appliances business achieved the revenue of about 1.849 billion yuan, a YOY increase of 15.16%. (5)Biomedical The Company's biomedical industry focused on the field of life sciences, centered on the needs of user scenarios, continuously enhanced the research of core technologies such as ultra-low temperature refrigeration, automation, 21 Annual Report 2023 and informatization, optimized the R&D process, stimulated innovation vitality, and was committed to providing users with professional full-scenario solutions. Adhering to the user-centric and by in-depth market segmentation channel layout, it improved the level of professional services, and constantly shaped brand value; Promoting the standardization of production processes, improving the level of value chain management, continuously improving product quality and production efficiency, and we have been providing users with first-class products and service experience. The Company's biomedical industry is mainly carried out based on the platform of its subsidiary Zhongke Meiling, and its products are mainly concentrated in the -180 °C to 8 °C full temperature zone biological cell cryo, ultra-low temperature storage equipment, -196 °C liquid nitrogen biocontainers, biological safety cabinets, clean workbenches, high-speed refrigerated centrifuges and other terminal products, as well as pharmaceutical cold chain equipment and related comprehensive system solutions in the biomedical field. At present, the Company's products and solutions have been widely used in medical systems, blood systems, disease control systems, health systems, university research institutions, biomedical enterprises, genetic engineering and materials research and other fields.During the reporting period, the revenue of biomedical business was about 279 million yuan, a YOY decrease of 20.75%. (ii) Revenue and cost 1. Constitute of operation revenue In RMB 2023 2022 Increase/decrease Ratio in Ratio in y-o-y (+,-) Amount operation Amount operation revenue revenue Total operation 24,247,678,970.56 100% 20,215,220,192.20 100% 19.95% revenue On Industry Manufacture of household 24,022,148,584.59 99.07% 20,037,625,297.52 99.12% 19.89% appliances Other business 225,530,385.97 0.93% 177,594,894.68 0.88% 26.99% On products Refrigerator, 9,088,215,517.67 37.48% 7,664,575,851.66 37.91% 18.57% freezer Air-conditioning 11,566,440,523.53 47.70% 9,781,896,262.72 48.39% 18.24% Washing machine 1,329,017,674.88 5.48% 753,549,855.38 3.73% 76.37% Small appliance and kitchen & 1,849,440,139.12 7.63% 1,605,989,880.27 7.94% 15.16% toilet Other products 189,034,729.39 0.78% 231,613,447.49 1.15% -18.38% Other business 225,530,385.97 0.93% 177,594,894.68 0.88% 26.99% Area Domestic 16,662,953,598.39 68.72% 15,038,808,862.28 74.39% 10.80% 22 Annual Report 2023 Foreign 7,584,725,372.17 31.28% 5,176,411,329.92 25.61% 46.52% Sub-sale model Direct sales 225,530,385.97 0.93% 177,594,894.68 0.88% 26.99% Distribution 24,022,148,584.59 99.07% 20,037,625,297.52 99.12% 19.89% 2.Situation of Industry, Product and District Occupying the Company’s Business Income and Operating Profit with Profit over 10% √ Applicable □Not applicable In RMB Increase/dec Increase/dec Increase/de rease of Gross rease of crease of Operating revenue Operating cost operating profit ratio operating gross profit revenue y-o- cost y-o-y ratio y-o-y y On Industry Manufacture of household 24,022,148,584.59 20,725,758,770.77 13.72% 19.89% 19.63% 0.18% appliances On products Refrigerator, 9,088,215,517.67 7,356,737,998.45 19.05% 18.57% 15.91% 1.86% freezer Air-conditioning 11,566,440,523.53 10,531,949,090.31 8.94% 18.24% 20.09% -1.40% Area Domestic 16,447,851,363.99 14,152,604,577.11 13.95% 10.60% 10.62% -0.02% Foreign 7,574,297,220.60 6,573,154,193.66 13.22% 46.62% 45.05% 0.94% Sub-sale model Sub-sale 24,022,148,584.59 20,725,758,770.77 13.72% 19.89% 19.63% 0.18% Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest on year’s scope of period-end. □ Applicable √Not applicable 3. Income from physical sales larger than income from labors √ Yes □ No Increase/decrease Industries Item Unit 2023 2022 y-o-y (+,-) 10 thousand Sales volume 3,486.07 2,775.34 25.06% pieces/set Manufacture of 10 thousand household Production 3,517.94 2,789.28 26.12% pieces/set appliances 10 thousand Inventory 140.96 109.08 29.22% pieces/set Reasons for y-o-y relevant data with over 30% changes □ Applicable √ Not applicable 23 Annual Report 2023 4. Performance of the material sales contract and major procurement contracts that signed by the Company up to the reporting period □ Applicable √Not applicable 5. Constitute of operation cost Industry classification In RMB 2023 2022 Ratio in Increase/decreas Industries Item Ratio in Amount Amount operation e y-o-y (+,-) operation cost cost Manufacture of Raw household 19,036,931,675.10 91.85% 15,777,586,805.86 91.07% 20.66% material appliances Note: Nil 6. Whether the changes in the scope of consolidation in Reporting Period √ Yes □ No More details can be seen in the report “VII. Changes in the scope of the merger” and “VIII. Interests in other entities” of “Section X Financial Report” 7. Major changes or adjustment in business, product or service of the Company in Reporting Period □ Applicable √ Not applicable 8. Major sales client and main suppliers (1) Major sales client of the Company Total top five clients in sales (RMB) 13,534,796,904.46 Proportion in total annual sales volume for top five clients 55.82% Proportion of the related parties’ sales in total annual sales volume for 32.95% top five clients Information of top five clients of the Company Proportion in total annual No Name Sales (RMB) sales 1 Client I 7,289,331,003.57 30.06% 2 Client II 4,589,467,099.06 18.93% 3 Client III 777,796,556.14 3.21% 4 Client IV 699,995,244.09 2.89% 5 Client V 178,207,001.60 0.73% Total -- 13,534,796,904.46 55.82% Other notes of main clients □ Applicable √ Not applicable (2) Main suppliers of the Company Total purchase amount from top five suppliers (RMB) 3,860,792,434.26 24 Annual Report 2023 Proportion in total annual purchase amount for top five suppliers 20.30% Proportion of related party’s purchase in total annual purchase amount for 13.73% top five suppliers Information of top five suppliers of the Company Proportion in total annual No Name Sales (RMB) purchase 1 Supplier I 1,248,700,174.10 6.57% 2 Supplier II 830,491,790.88 4.37% 3 Supplier III 683,224,664.94 3.59% 4 Supplier IV 563,608,157.96 2.96% 5 Supplier V 534,767,646.38 2.81% Total -- 3,860,792,434.26 20.30% Other notes of main suppliers □ Applicable √Not applicable (iii) Expenses In RMB Increase/dec 2023 2022 rease y-o-y Note of major changes (+,-) Sales 1,571,486,417.63 1,428,874,991.47 9.98% No major changes. expense Administrati 361,134,794.49 358,586,472.37 0.71% No major changes. ve expense It’s mainly due to the increase in interest income and the Financial -118,743,396.49 -55,214,680.04 -115.06% decrease in foreign exchange losses of the Company expense during the period. R&D 596,920,491.26 560,383,547.49 6.52% No major changes. expense (iv)Investment in R&D √Applicable □Not applicable Expected impact on the future Projects Purpose Progress Goals to be achieved development of the Company 1. User-oriented, centered on Improve the preservation effect With the mindset of Meiling user needs, discover the pain of the freezer and eliminate the fresh as the main line, create the points of users in frozen meat R&D of frozen Completed and the pain points of poor food best freezer products for the preservation, create the best fresh series product is launched in preservation, subsided nutrition preservation in the industry and refrigerator for freezing and refrigerators the market. and taste caused by the enhance the market share of preservation in the industry, temperature rise of the freezer. Meiling. develop a series of frozen fresh products, and spur the freezing 25 Annual Report 2023 fresh preservation product storm in the industry; 2. Through the unique selling point of "refusing to freeze repeatedly, the refrigerator begin fresh frozen from now on", make the size of the box meet the needs of zero flat embedding, maximize the competitiveness of Meiling's middle products and rapidly increase Meiling's market share. User-oriented, user-demand centered, with in-depth insight into the pain points of consumers' lives, develop a Through the cabinet-opening series of cabinet opening frost- Research and frost-free freezer, it meets free freezers to perfectly solve Upgrade the direct cooling development of Completed and the people's needs and expectations the problems that have plagued freezer from frost and frost cabinet-opening product is launched in for the freezer, and immediately users for a long time. Driven by reduction stage to frost-free frost-free series the market. shapes the watershed between technological innovation, rooted directly. freezers the cabinet opening frost-free in user needs, create fresh freezer and other freezers. products, promote people's healthy eating life to usher in a new round of leap, and perfectly embed the mindset of "Meiling Fresh" in the field of freezers. Hand-washing-like technology not only realizes the function of imitation of hand washing, but Through innovative flanges, also can quickly wash some "Hand- lifters and other technologies, stains with clean water. The washing-like" the "one kneading, two beating Return to the essence of Completed and the consumer side gains a cleaner drum washing and three rinsing" of the drum washing and create a hand- product is launched in washing, and the Company side machine washing machine is realized, washing effect machine. the market. creates a "More cleaning" research and and the "washing" mindset of the mindset of Meiling drum development drum washing machine is washing machine, which is created. conducive to the scale and profit improvement of the drum washing machine. Research and To solve consumers' demands Through the large motor, the Hercules technology achieves a Completed and the development of for high washing intensity and powerful pulsator to realize the cleaning ratio of 0.9, the highest product is launched in "Hercules" high cleaning ratio by pulsator washing water flow is larger and in the industry of the same type the market. pulsator products. the washing ratio is higher. of products, and meanwhile 26 Annual Report 2023 washing solves the consumer's demand machine for high requirements for the washing intensity of pulsator products. Positioning the medium end of the pulsator products, the consumer side gains a more powerful and cleaning washing, and the Company side creates the "Clean washing" mindset of the Meiling pulsator washing machine, which is conducive to the improvement of the scale and profit improvement of the pulsator products. The main control board and the After the completion of the driver board are integrated with Second- project, the procurement one MCU, and the same main generation main Trending technology, pursuing Completed and the bargaining power is improved, transformer integrated board is transformer a high degree of standardization product is launched in the product development cycle is used in subsequent development integrated and low cost. the market. shortened, and the cost and upgrading, and only the technology competitiveness of the end display and control board needs products is ensured. to be changed. Keeping up with the R&D and development trend of the The size of electronically application of industry, through the application Completed technical controlled printed boards is miniaturization research of the third-generation research and program The promotion and application reduced by 25%, and the ICT technology semiconductor in the frequency development of the program can greatly needle planting rate is increased based on Si2C conversion technology platform, verification, and it has enhance the comprehensive by 35%, while achieving the semiconductor develop a frequency conversion been applied to competitiveness of products of goal of improving quality and high-frequency technology platform for outdoor achieve mass various specifications. efficiency of production and and less units with lower loss, higher production application reducing product costs. electrolysis efficiency, smaller size and higher reliability. Digging deep into the pain The excellent product points of users, studying user use experience has won praise from scenarios, and breaking through Form a product series with the market, achieved hot sales of Development the single-pendulum blade Changhong technology label, Completed and the products, and won the "2023- of dual-wing design of traditional air optimize the product line product is launched in 2024 China Air Conditioning series on-hook conditioners, the dual-wing structure, and improve the the market. Comfort and Health Outstanding products wind Q7V series innovatively quality, level and brand Product" award at the Air adopts independent partition air reputation of products. Conditioning Industry Summit supply technology, which Forum. divides the air guide swing 27 Annual Report 2023 blades into two to achieve asynchronous partition air supply and ensure comfortable air supply for the whole house. By integrating the advantages of "full dust-free" air Completed the industry's first Strengthen the IP of conditioning technology with 5A fresh air product Changhong products, achieve Product Changhong product IP, we tap development, and jointly created the goal of improving the development of the potential of five aspects: Completed and the 5A fresh air air conditioning appearance and quality of full dust-free super large fresh air, dust-free product is launched in evaluation technical products and realize the concrete fresh air hang- fresh air, silent fresh air, the market. specifications with industry experience of air supply status, up product constant temperature fresh air, authoritative certification and establish a model of high- and sterilization fresh air, and bodies, and obtained 5A product end products in the industry. provide a systematic solution to certification. the user's pain points. Technical research and Improve product performance Completed and the Enhance product development of and reliability to meet the product is launched in Batch sales in the market competitiveness and improve integral water diverse needs of users in the the market. user satisfaction. machine northern heating area products Technical research and Improve product performance Completed and the Enhance product development of and reliability to meet the product is launched in Batch sales in the market competitiveness and improve heat pump hot diverse needs of users in the the market. user satisfaction. air blower northern heating area products Technology Meet the needs of users in research and To meet the needs of specific occasions that require Completed and the development of personalized customers, drive temperature and humidity product is launched in Produced in mass production special air the sales of the Company's main control (such as shelter planting, the market. conditioning products. base stations, etc.) products Technical Meet the market demand of the research and Expand the temperature northern heating area (which is Completed and the development of application range of the product more suitable for lower product is launched in Batch sales in the market split water and increase the variety of the temperatures than the the market. machine product lineup. monolithic type). products Technical On the basis of the existing - After the completion of the research and 40~-80°C full range of products, project, it solves the problem of Put into mass production and application of further develop compressor Completed inconvenience for overseas sales achieved. inverter cascade spray cooling technology, customers due to the refrigeration compressor frequency confidential formula of 28 Annual Report 2023 system in ultra- conversion adjustment and two- conventional ultra-low low temperature stage compressor frequency temperature product refrigerant, freezer storage adaptation technology to meets the demand of overseas box achieve better operating markets for a full range of conditions and higher product products of -40°C~- 80°C, and reliability, develop dual-system further develops the overseas refrigeration technology to market of ultra-low temperature achieve higher energy efficiency products. and replace liquid nitrogen backup, and develop multi- voltage linkage technology to achieve plug-and-play in all regions of the world. It solves the problems of freezing and thawing during The project mainly serves the sample storage, the uneven centralized storage and The success of this project can temperature fluctuation in the management of large quantities realize the mass production and Research and library during operation, the of biological samples, which can industrialization of ultra-low industrialization batch accurate scanning of maximize the efficiency of temperature intelligent biobank, project of ultra- samples, and the long-term sample preparation quality, Completed help improve the popularity of low temperature stable operation of various reduce cross-contamination, products, and bring new growth intelligent automation equipment in low improve the speed of sample in expanding new business biobank temperature environments, so as preparation and processing, and areas, new industries and new to realize the mass production reduce the risk of error through markets. and industrialization of ultra- traceability. low temperature intelligent biobank. It solves the problems of low utilization rate of sample storage space and the safety of sample storage, low sample storage Research and The sample bank management efficiency, messy sample Solving the common problems application of system suitable for automated classification and storage, and of safe and accurate automated scenarios is used to solve the imperfect sample information management and use of millions access problems of freezing, thawing, management system, and of samples in the existing technology in and safety during sample Validation phase. realizes different types of sample bank, which can realize ultra-low storage, and realize the storage needs such as single, the industrialization of temperature intelligent and unmanned multi-branch, single-box, multi- automated biobank and create a environment - management of accurate sample box, etc., with functions such as new situation for the company in intelligent batch scanning and traceability. automatic fragmentation and the field of automation. biobanking scheduled access, which meets the storage needs of biological samples in various application scenarios. 29 Annual Report 2023 MC-13 series Completed and the Provide differentiated selling Increase the market share of voice tea bar Improve user interaction. product is launched in points and increase the average products and continue to machine the market. price of products. improve product gross margins. Realize steam brewing tea, tea Establish the leading image in soup separation, automatic tea Completed and the Initially create tea ecology and Smart tea the tea industry, and continue to brewing, and access to the tea product is launched in establish a high-end image of tea machine expand the ecological products cloud mall to realize the the market. drinking. of tea drinks. prototype of tea ecology. Develop a wall-hung furnace A double- product with DC frequency Create energy-saving and silent segmented conversion fan, which can products, lead the technological combustion gas Completed and the Lower noise and improved linearly adjust the air volume in innovation of the wall-hung heating furnace product is launched in performance, improve product the whole frequency band, and furnace industry, and enhance with DC the market. quality. automatically adjust the speed to the brand's popularity in the frequency increase the air pressure when wall-hung furnace industry. conversion fan the flue is blocked Develop a rang hood product with oil smoke separation A kind of rang function. Upon the innovative hood machine Iterate product technology, Create differentiated products, nest oil and smoke separation Completed and the product with oil upgrade and optimize and then enhance the competitiveness of net, the oil stains cannot reach product is launched in smoke improve, and consolidate the product lines, and enhance the the inner cavity, effectively the market. separation market position of products. reputation of brand products. protecting the motor and function prolonging the life of the whole machine. Company's R & D personnel situation 2023 2022 Change proportion Number of Research and Development persons 1,667 1,533 8.74% (persons) Proportion of Research and 15.07% 15.07% 0 Development persons Academic structure of R&D personnel Undergraduate 1,217 1,029 18.27% Masters 113 106 6.60% Age composition Under 30 464 389 19.28% 30~40 630 584 7.88% Investment of R&D 2023 2022 Change proportion Investment for R&D (RMB) 702,362,069.24 655,917,101.66 7.08% R&D investment/Operating 2.90% 3.24% 0.34 percentage 30 Annual Report 2023 revenue points up Capitalization of R&D investment (RMB) 147,821,273.96 135,753,117.26 8.89% 0.35 percentage Capitalization of R&D investment/R&D 21.05% 20.70% points investment up Reasons and effects of significant changes in composition of the R&D personnel □Applicable√ Not applicable Reasons for significant changes in the proportion of total R&D investment in operating revenue from the previous year □Applicable√ Not applicable Reasons and rationality of the major changes of the capitalization rate of R&D investment □Applicable√ Not applicable (v) Cash flow In RMB Increase/decrease y-o-y Item 2023 2022 (+,-) Subtotal of cash in-flow from 25,967,333,384.82 21,950,834,479.70 18.30% operation activity Subtotal of cash out-flow from 23,884,990,079.78 20,485,678,731.64 16.59% operation activity Net cash flow from operation activity 2,082,343,305.04 1,465,155,748.06 42.12% Subtotal of cash in-flow from 1,522,346,208.44 1,205,533,608.35 26.28% investment activity Subtotal of cash out-flow from 1,922,055,740.40 1,711,918,251.95 12.27% investment activity Net cash flow from investment -399,709,531.96 -506,384,643.60 21.07% activity Subtotal of cash in-flow from 2,294,196,498.33 1,647,463,355.44 39.26% financing activity Subtotal of cash out-flow from 1,712,327,508.38 2,402,373,865.79 -28.72% financing activity Net cash flow from financing activity 581,868,989.95 -754,910,510.35 177.08% Net increased amount of cash and 2,277,906,566.11 273,027,138.19 734.32% cash equivalent Main reasons for y-o-y major changes in aspect of relevant data √Applicable □ Not applicable Major changes in net cash flow from operation activity mainly because the cash paid for good procurement and received services during the period increased from a year earlier. The large change of net cash flow generated by fund-raising activities is mainly caused by the change of the Company's restricted funds and the increase of loans in this period. 31 Annual Report 2023 Explanation on reasons for the significant differences between the net cash flow arising from operation activities in the Period and net profit of last year √Applicable □ Not applicable It is mainly due to the increase in operating receivables and operating payables at the end of the reporting period compared with the beginning of the year. V. Analysis of the non-main business √Applicable □ Not applicable In RMB Whether Ratio in total be Amount Note profit sustainabl e (Y/N) It is mainly due to the investment income of joint venture investment, creditor's rights Investment income 8,438,592.04 1.04% No investment and other non-current financial assets during the holding period. It is mainly due to the appraisal income of the Gains/losses from company's forward foreign exchange contracts 7,565,104.05 0.93% No fair value changes and other non-current financial assets in this period. It is mainly due to the depreciation of inventory Asset impairment -55,134,397.60 -6.81% and impairment loss of intangible assets No accrued by the company in this period. It is mainly due to the year-on-year increase in Non-operation 14,660,583.17 1.81% the Company's income from liquidated No income damages. It is mainly due to the scrapping loss of non- Non-operation 7,732,783.31 0.96% current assets and public welfare donations of No expenditure the company in this period. It is mainly due to the impairment loss of Credit impairment -81,621,384.13 -10.08% accounts receivable accrued by the company in No losses this period. VI. Analysis of assets and liability (i) Major changes of assets composition In RMB Year-end of 2023 Year-begin of 2023 Ratio Ratio in Ratio in changes Note of major changes Amount total Amount total (+,-) assets assets Monetary 8,840,685,525.71 45.59% 6,839,421,779.13 42.20% 3.39% It is mainly due to the 32 Annual Report 2023 fund increase in net cash flow generated by the company's operating activities in this period. It is mainly due to the Account increase in the Company's 1,633,706,889.06 8.42% 1,306,871,945.85 8.06% 0.36% receivable operating income in this period. Contract 13,261,690.62 0.07% 3,530,922.13 0.02% 0.05% No major changes. assets It is mainly due to the Inventory 2,022,738,412.97 10.43% 1,710,306,933.71 10.55% -0.12% increase in production of the company in this period. Investment 50,920,487.71 0.26% 52,898,060.89 0.33% -0.07% No major changes. real estate Long-term equity 112,745,811.75 0.58% 100,384,428.50 0.62% -0.04% No major changes. investment Mainly due to the depreciation of the Fix assets 2,136,912,034.28 11.02% 2,229,553,866.96 13.76% -2.74% company's assets in this period.. Constructio n in 69,920,839.20 0.36% 66,522,492.77 0.41% -0.05% No major changes. progress Right-of-use 49,993,400.61 0.26% 36,646,135.10 0.23% 0.03% No major changes. assets It is mainly due to the Short-term increase in short-term loans 1,134,102,419.03 5.85% 674,143,916.67 4.16% 1.69% loans borrowed by the company in this period. Contract 405,698,756.02 2.09% 358,755,397.77 2.21% -0.12% No major changes. liability It is mainly due to the reclassification of the Long-term 108,000,000.00 0.56% 148,000,000.00 0.91% -0.35% company's long-term loans loans to non-current liabilities due within one year. Lease 43,488,292.70 0.22% 28,164,287.97 0.17% 0.05% No major changes. liability Mainly due to the decrease Receivable in the proportion caused by 1,641,858,740.34 8.47% 1,446,358,719.88 8.93% -0.46% financing the increase in the total assets of the company's 33 Annual Report 2023 accounts receivable in this period.. It is mainly due to the Creditor's increase in the Company's rights 420,537,485.54 2.17% 121,543,750.00 0.75% 1.42% large deposit certificates in investment this period. Foreign assets account for a relatively high proportion □Applicable √Not applicable (ii) Assets and liability measured by fair value √Applicable □ Not applicable In RMB Dev aluat Accumu ion Changes of fair lative of Amount of changes Amount at the value with Sales in the Amount at end of of fair Items draw purchase in Other changes beginning period gains/losses in value period the period ing the period reckone this period in d into the equity peri od Financial assets 1.Trading financial assets (derivative financial assets 57,660,588.67 -18,424,141.04 39,236,447.63 excluded) 2. Receivable financing 1,446,358,719.88 195,500,020.46 1,641,858,740.34 3. Other non-current 628,549,448.31 16,256,733.17 29,333,334.00 674,139,515.48 financial assets Subtotal of financial 2,132,568,756.86 -2,167,407.87 29,333,334.00 195,500,020.46 2,355,234,703.45 assets Above total 2,132,568,756.86 -2,167,407.87 29,333,334.00 195,500,020.46 2,355,234,703.45 Financial liabilities 41,961,524.78 -9,732,511.92 32,229,012.86 Other changes: Other changes in receivable financing are caused by the increase of notes receivable aimed at both collecting contract cash flow (collection) and selling (endorsement or discount). Whether there have major changes on measurement attributes for main assets of the Company in report period or not □Yes √ No (iii) Assets right restricted ended as reporting period Ended as the reporting period, the Company has no major assets been closed down, detain, freeze or pledge and guarantee. As for other assets have restriction on rights found more in relevant content of “24. Assets with restricted ownership or use rights” in “V. Note of consolidate financial statement” carried under Section X. Financial Report 34 Annual Report 2023 VII. Investment analysis (i) Overall situation √Applicable □ Not applicable Investment in the same period of last Investment in the reporting (RMB) Changes year ( RMB) 45,000,000.00 200,000,000.00 -77.50% (ii) The major equity investment obtained in the reporting period √Applicable □ Not applicable 35 Annual Report 2023 In RMB Whe ther Date of Exp invo Index of Meth Term Typ disclosu Status as of ecte Current lved disclosure Name of Principal od of Amount of Sharehold Capital of e of re (if Partners the balance d investment in a (if invested business invest investment ing ratio sources invest prod applicab sheet date retur profit and loss laws applicable ment ment ucts le n uit( ) ) Y/N ) General During the items: reporting Sichuan Venture Sichuan Hongyun Venture Juchao period Hongyun capital Stock Investment Website Newl Not Complete the Not Venture (limited Management Co., http://ww y 8 appl first phase appl 2023- Capital to 45,000,000.00 30.41% Self-fund Ltd.,Sichuan Changhong 47,270.54 No w.cninfo.c establ years icabl Invest 1800 icab 01-18 Partnership investme Electronics Holding Group om.cn ished e yuan le (Limited nt in Co., Ltd.,Sichuan Changhong (2023- Ten thousand Partnership) unlisted Electric Co., Ltd. 004) yuan. enterpris es) Total -- -- 45,000,000.00 -- -- -- -- -- -- -- 47,270.54 -- -- -- (iii)The material non-equity investment in the reporting period □ Applicable √Not applicable (iv)Financial assets investment 1. Securities investment □ Applicable √ Not applicable The Company had no securities investment in the reporting period. 36 Annual Report 2023 2.Derivative investment √ Applicable □ Not applicable (1) Derivatives investment for hedging purposes during the reporting period √ Applicable □ Not applicable In RMB 10,000 Ratio of investment Changes in the Amount Amount sales Amount at the Profit and loss of Investment amount at period- cumulative fair purchased in in the Type Initial investment beginning fair value change in amount at end in net assets of value included in the reporting reporting period the current period period-end the Company at the equity period period period-end Forward foreign exchange contract 385,815.06 217,191.87 -869.16 0 736,225.85 632,474.92 332,515.07 57.09% Total 385,815.06 217,191.87 -869.16 0 736,225.85 632,474.92 332,515.07 57.09% Specific principle of the accounting policy and calculation for derivatives in the Period Not applicable compared with last period in aspect of major changes Description of actual profit and loss during During the reporting period, the Company confirmed the income from derivatives investment of RMB -115.7228.million. the reporting period During the reporting period, the Company adhered to the principle of exchange rate risk neutrality, used forward foreign exchange contracts as hedging tools, and signed forward foreign exchange contracts according to the foreign exchange receipt amount predicted by sales and the target cost exchange rate. The delivery Description of hedging effect period matched with the predicted return amount, and the agreed delivery amount matched with the predicted return amount to avoid the risks caused by exchange rate fluctuations. The cash flow changes in the hedging tools during the reporting period can offset the cash flow changes in the hedged items caused by exchange rate fluctuations, which met the requirements of hedging effectiveness and achieved the hedging objectives. Capital resource Own fund Risk analysis and controlling measures for Risk analysis: derivatives holdings in the Period (including 37 Annual Report 2023 but not limited to market risk, liquidity risk, 1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are under credit risks, operation risk and law risks etc.) certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying on the research of the foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange contracts, and make dynamic management to the business, to ensure reasonable profit level. 2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements of the trade authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds. 3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange contracts with contract price, which leads the risk of income uncertainty. So the Company chose five state-owned banks, the Chinese-funded banks in shareholding enterprise as Everbright Bank, Industrial Bank and the foreign-funded banks as UOB, OCBC, BEA etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose failure and the risk of loss may bring to the Company is very low. 4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated related management system which defines the operation process and responsibility to prevent and control risks. 5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control. Invested derivative products have changes in The Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards for Business Enterprises market price or fair value in the Period, as for No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services. analysis of the fair value of derivatives, While fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts disclosed specific applied methods and signed during the reporting period with bank. The differences are identified as trading financial assets and liabilities. correlation assumption and parameter setting Lawsuit involved (if applicable) Not applicable Disclosure date for approval from the Board March 31,2023 for investment of derivatives (if applicable) Disclosure date for approval from board of shareholders for investment of derivatives (if April 26,2023 applicable) Special opinion on derivative investment and Upon inspection, the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals in strict compliance with the 38 Annual Report 2023 risk control by independent directors Shenzhen Stock Exchange Self-Regulatory Guidelines No.1- Standardized Operation of the Listed Companies on main Board , the Articles of Association,Management Measures on Company Authorization, Management System in relating to Foreign Exchange Forward Deals, and these deals were conducted within the authorization scope under general meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward foreign exchange transactions are operates closely related to the routine operation requirement of the Company and based on normal operating and production, which is relying on specific business operations with purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export business and thus met its requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority shareholders, were not prejudiced. (2)Derivative investments for speculation during the reporting period □ Applicable √ Not applicable The Company had no derivative investment in the reporting period. (v) Application of raised proceeds □ Applicable √ Not applicable Nil VIII. Sales of major assets and equity (i) Sales of major assets □ Applicable √ Not applicable No major assets are sold in the period (ii) Sales of major equity □ Applicable √ Not applicable IX. Analysis of main holding company and stock-jointly companies √ Applicable □ Not applicable (i) Particular about main subsidiaries and stock-jointly companies net profit over 10% 39 Annual Report 2023 In RMB Company name Type Main business Register capital Total assets Net assets Operating revenue Operating profit Net profit Research and development, Zhongke Meiling Cryogenic Subsidiary manufacturing and sales 96,730,934 734,480,745.25 601,519,972.36 302,785,719.33 19,141,881.46 16,126,507.82 Technology Co., Ltd. of ultra-low temperature freezer Jiangxi Meiling Electric Appliance Manufacturing of Subsidiary 50,000,000 351,277,453.94 155,046,616.61 720,626,403.48 12,407,856.59 12,408,056.59 Co., Ltd. refrigeration and freezer Mianyang Meiling Refrigeration Co., Manufacturing of Subsidiary 100,000,000 191,889,234.80 120,713,472.01 285,257,334.95 -360,873.32 -354,646.22 Ltd. refrigeration and freezer R&D, manufacturing Sichuan Changhong Air-conditioner Subsidiary and domestic sales of 850,000,000 4,004,171,452.80 1,220,575,635.42 8,008,596,138.13 229,101,892.24 229,982,423.10 Co., Ltd. air-conditioning R&D, manufacturing Zhongshan Changhong Electric Co., Subsidiary and foreign sales of air- 334,000,000 2,295,526,431.19 348,248,735.78 3,750,169,165.68 161,004,581.85 160,707,265.04 Ltd. conditioning Hefei Meiling Group Holdings Subsidiary Sales of white goods 80,000,000 1,161,054,046.07 -292,136,413.06 5,719,876,952.55 140,340,587.18 134,924,071.03 Limited R&D and sales of Hefei Changhong Meiling Life household appliances, Subsidiary 50,000,000 622,486,357.58 139,793,516.06 1,660,852,475.77 63,306,977.04 57,607,898.93 Appliances Co., Ltd. kitchen appliances and small home appliances 40 Annual Report 2023 (ii) Subsidiary obtained and disposed in the period √ Applicable □ Not applicable The method of obtaining and The influence to the whole production and Company name disposing subsidiaries during performance the report period Hefei Meiling Electric Appliances Minor effect on the overall production and operation Cancellation Marketing Co., Ltd and performance of the company Wuhan Meizhirong Electric Appliances Minor effect on the overall production and operation Cancellation Marketing Co., Ltd and performance of the company () Description of the holding company and stock-jointly companies □ Applicable √ Not applicable X. Structured entity controlled by the Company □ Applicable √ Not applicable XI. Prospects for the future development of the company (1)Macro environment analysis China further encourages and guides consumption, enhances consumption capacity and optimizes consumption environment; encourages digital consumption and promotes live E-commerce; encourages green consumption and reduces the "carbon content" of consumption.However, the domestic macro-economy is still in the stage of sustained recovery, the real estate industry is in periodic adjustment, the residents' consumption ability is insufficient, the traditional home appliances industry is in full competition with high product homogeneity, and the industry development has entered the era of stock competition. The International Monetary Fund predicts that the global economic growth rate will slow down from 3.0% in 2023 to 2.9% in 2024, which is lower than the historical average of 3.8%. Moreover, overseas inflationary pressure persists, trade protectionism re-surges, political risks and geopolitical tensions intensify, and there is still great uncertainty in the development of overseas business. (2) Industry environment analysis 1.Refrigerator (freezer) industry Domestically, according to the data released by the National Bureau of Statistics, in 2023, the number of home appliances in major categories such as refrigerators, washing machines and air conditioners exceeded 3 billion, and the demand for upgrading is great. China's home appliance market has entered the era of stock replacement. The Ministry of Commerce of China stated that promoting the trade-in of home appliances in 2024 is the focus of promoting consumption this year. The additional policy effect is expected to bring improved upgrading trend of product structure due to the trade-in process in 2024, and a steady development trend of the scale of refrigerators (freezers).Compared with previous years, the price of copper and aluminum, which accounts for a relatively high proportion of raw materials for refrigerators (freezers), has dropped, and the additional ability of enterprises to reduce costs and improve efficiency has been enhanced. Refrigerators (freezers) enterprises are still in the cost dividend period, but in 2024, with the economic growth, it is expected that the price of bulk raw materials will rise, and the dividend will decrease accordingly. In terms of export, under the dual aid of scale effect and continuous breakthrough in manufacturing efficiency, the Annual Report 2023 cost advantage boundary wall brought by small platforms and low investment of small and medium-sized brands has been broken, the concentration of the top brands has further increased, and the importance of efficiency to the healthy operation of enterprises has been enhanced.Driven by new standards and regulations, the industrial structure has been rapidly upgraded, and the products shows a significant trend of energy saving, frequency conversion and large volume; Green industry has a more prominent impact on the home appliance industry, and the demand for low-carbon production, recyclable and degradable environment-friendly materials is increasing year by year. Under the structural change, there will be new industrial opportunities and challenges to the development of enterprises. 2. Air-conditioning industry Domestically, with the upcoming turning point in the real estate market and the increase in the number of air conditioners, the household air conditioning industry has transitioned from the incremental era to the stock competition era. According to the forecast by All View Cloud (AVC), in 2024, the retail sales in air-conditioning market will drop by 1.4% year on year, and the industry will enter the stage of periodic adjustment.In addition, through multi-brand operation, the top brands have comprehensively covered high-, medium- and low-end products, and the price competition becomes increasingly fierce, and the living space of second- and third-line brands is further narrowed. In terms of export, with the continuous advancement of economic globalization, the global market competition will become more intense.Due to the growth of the middle class and the acceleration of urbanization in emerging markets, the demand for air conditioners will continue to grow.Meanwhile, with global warming and frequent extreme weather events, the requirements for energy efficiency and environmental protection of air-conditioning products will be further increased. In addition, with the reorganization of global supply chain and the promotion of product value chain, the global production and sales layout of multinational companies will be further optimized to meet the changing market demand.According to the industry online forecast, the export volume of household air conditioners in China will increase by 0.8% in the cold year of 2024. 3.Washing machine The washing machine industry has been impacted by the previous downturn in the home appliance market, and the trend of consumer recovery in the home appliance market is not significant. There are four main reasons for this: large stock in the home appliance market, some consumer goods becoming optional, low consumption frequency, and non-urgent demand for upgrading .Overall, under the influence of many factors, it is expected that the washing machine industry will show a weak recovery trend in 2024.As for the products, influenced by the trend of smart home appliance integration, large-capacity and ultra-thin embedded products have become the development trend of the industry. 4.Kitchen & bathroom, small appliance Kitchen and bathroom appliances have always been an important component of household appliances. With the improvement of living standards and the transformation of kitchen functionality, people have put forward higher requirements for kitchens and kitchen appliances. In terms of functionality, it is required that the kitchen be classified and partitioned, with clear flow lines and complete functions. The kitchen electrical products should collaborate to complete a series of tasks such as washing, cooking, and cleaning. At the same time, health and nutrition should be 42 Annual Report 2023 taken into consideration. In terms of layout, it is necessary to not only release as much space as possible, but also achieve greater storage and storage. Under this promotion, the structure of kitchen appliances continues to adjust and upgrade, and the proportion of mainstream categories in the market is gradually increasing. The upgrading and innovation of product core functions has become an important direction for the industry to seek breakthroughs. The small home appliance market is generally in a period of consolidation. With the high enthusiasm of people for dining out and tourism, as well as the suppression of demand from the early sales boom of small home appliances, the market heat of some categories of small home appliances has decreased. Small household appliances cover a wide range of categories, covering all aspects of people's home life, so their growth paths and development trends are also different. However, from the perspective of channels, the overall revenue of the small household appliances Tiktok channel has increased significantly, and each major node has significantly promoted the growth. Backed by the high flow short video platform and content platform, the new channel resource investment is expected to drive the rapid improvement of brand awareness and enable long-term growth.. 5.Bio-medical With the growth of China's per capita GDP and per capita disposable income and the trend of accelerated aging of population, the national expenditure on medical care will keep increasing.In the meantime, with the development and construction of China's medical and health system, more and more attention has been paid to biosafety, which has stimulated the growing demand for potential biological sample storage; With the expansion of biopharmaceuticals, the scale of global refrigerated drugs has expanded, and the demand for low-temperature storage equipment has continued to grow; The medical device industry has a huge market with many sub-sectors. After upgrading the equipment of primary medical institutions, the market demand for various medical devices will increase steadily. Policy support injects development momentum into the medical device industry.In recent years, China has attached great importance to the medical device industry and provided great support at the policy level. In July 2023, National Health Commission issued the recommended health industry standard Equipment Configuration Standard for County General Hospitals", which came into effect on January 1, 2024, and stipulated the basic principles for the configuration of equipment worthy of RMB 10,000 and above in county general hospitals, and made minimum configuration standards for basic equipment items such as centrifuges, medical freezers, biosafety cabinets and medical blood freezers. From 2024, the allocation of primary medical equipment will be gradually increased, and the demand for medical equipment is expected to continue to be released. (iii) Business plan for 2024 1. Business ideas The Company adheres to the guidance of party building, adheres to the value orientation, comprehensively improves efficiency, enhances six capabilities around "one goal", deepens internal and external coordination, strengthens compliance risk control, and promotes its sustained and high-quality development. In 2024, it will strive to move towards double-digit growth in annual income, while striving to maintain steady growth in net profit. (1) Instruction by party building It will fully integrate party building with production and operation, with synchronous plan, synchronous deployment, 43 Annual Report 2023 synchronous promotion and synchronous assessment, promote development with party building, and strengthen party building with development.It will unswervingly enrich its minds, guide practice and promote work with socialism with Chinese characteristic thought in the Xi Jinping's new era, and jointly promote the Company's high- quality development; It will adhere to goal orientation and problem orientation, resolutely grasp the responsibility of party building, focus on improving the quality of party building, further improve the party building system, and build a strong grassroots fighting fortress; It will earnestly fulfill the responsibility of strengthening party self- discipline in an all-round way and well ensure a clean and honest government. (2) Construction of six powers Construction of brand power.It will focus on product business cards, systematically carry out public and private domain, localized user operation and new media operation, and enhance the brand reputation, popularity and loyalty. Construction of product power.It will adhere to user-orientation, solve users' difficulties, create value for users, accurately control market trends, and study people's consumption preferences. In terms of refrigerators, strengthen the product business cards of "Meiling Fresh", "Meiling Thin", "Meiling Narrow" and "Meiling Embedded"; In terms of air conditioners, tamp down the two product business cards of "All-dust-free" and "Living and Dining Cabinet"; In terms of washing machines, create the business cards of "Clean" and Construction of marketing power.It will focus on ensuring retail, promoting quality products, improving efficiency and strengthening diversion, continue to establish and build a marketing system, strengthen terminal marketing capacity building, enhance terminal brand image, deepen the upgrading of marketing thinking, build a high-quality marketing team, improve the professional planning and promotion capabilities, and win the battle of terminal competition. Construction of channel power.Domestically, it will focus on consolidating its own channels, outperforming the retail channels, expanding incremental channels, and breaking through emerging channels, so as to improve channel carrying capacity and channel operation quality.It will build overseas distribution channels, deepen the construction of customer system, focus on resources to ensure high-quality customers, focus on brand business, and comprehensively achieve double growth in both scale and share. Construction of service power.Focusing on product delivery, after-sales service, quality management and customer satisfaction, it will use digital tools as a means to improve product delivery efficiency, enhance after-sales service quality, ensure product delivery quality and comprehensively improve service capacity through efficiency improvement and cost reduction. Construction of organizational power.It will optimize the internal organizational structure by benchmarking and improve organizational efficiency; Optimize the incentive system, improve the mechanism of "selection, training, use and retaining", strengthen internal competition and enhance organizational ability and vitality. (3) Internal and external coordination It will continue to focus on internal and external coordination and industrial coordination, and promote R&D, manufacturing, procurement and sales to strengthen complementary resources and mutual assistance, and promote industrial development. (4) Compliance risk control 44 Annual Report 2023 It will carry out various tasks around the "Year of Strengthening Compliance Management" in 2024, and strengthen and improve the construction of compliance risk control system.It will continue to strengthen the publicity of compliance culture, constantly improve the "1+N" system of compliance risk control, strengthen the "trinity" risk prevention and control mechanism of compliance, risk control and internal control, and give full play to the role of "three lines of defense" of business department, compliance department and audit department.It will strengthen compliance management in an all-round way, establish a "hierarchical" compliance risk identification and evaluation warning mechanism, incorporate the compliance work into the business process, establish an operation mechanism of "integration of industry and regulation", continuously improve the awareness and ability of risk prevention and control, continuously improve the management level of compliance according to law, and ensure the safety and compliance of the Company's overall operation. 2. Market strategy (1) Refrigerators (freezers) In terms of domestic market, faced with the challenges of product structure upgrading and fierce competition in the stock market, it will make product layout around "fresh, thin, narrow and embedded", and promote quality products and hot quality products, create hot products, optimize the product structure, and provide consumers with products of unique value based on the customer-oriented principle.In terms of products, It will focus on SKU product efficiency, improve product quality and enhance product competitiveness.In terms of channels, it will promote the refined management of core customers, adhere to the channel strategy of "consolidating our own channels, expanding incremental channels, breaking through emerging channels and outperforming retail channels", and strengthen the quality and efficiency of retail channels by optimizing product layout, strengthening operational capabilities and strengthening channel efforts, so as to seize the market opportunities of emerging channels. In terms of marketing, it will strengthen the terminal marketing capacity building, enhance the terminal image competitiveness, focus on the marketing of new media content, and improve the user operation and drainage transformation. In terms of overseas markets, it will upgrade the global demand structure, strengthen upgraded product planning and differentiated product design, and at the same time strengthen efficiency improvement.By focusing on key markets and core high-quality customers, it will open up regional markets with high synergy with the domestic market, tap development potential markets, and continuously improve customer efficiency. It will accelerate brand business, increase investment in brand teams and products, and continue to promote the construction of overseas independent brands. (2) Air conditioners In terms of domestic market, on the premise of maintaining benign operation, it will enlarge the scale and increase the average price through the business strategy of "brand promotion, product upgrading, channel expansion and comprehensive retail". With the product as the carrier, it will expound the brand mind and brand values of "precision quality and comfort in every degree", interpret the spirit of "responsibility, innovation and tenacity" and realize cultural resonance with customers; adhere to the user-orientation, grasps the healthy, comfortable and energy-saving market trend, and strengthen the R&D of core technologies and the transformation of results; It will focus on 45 Annual Report 2023 "differential management and channel expansion", intensively cultivate profit channels, improve image channels, speed up scale channels, break through flow channels and explore incremental channels; strengthen product promotion, optimize terminal construction and enhance retail transformation. In terms of overseas markets, it will continue to practice the concept of "profitable scale growth and profitable cash flow growth", adhere to brand priority, open up base markets and expand brand agency; preserve stock, seek increment, focus on superior channels and open up new markets; follow the market trend, launch high-quality products, launch new products, and launch variable frequency products; adhere to business-oriented and customer- centered principles, and constantly improve product quality, customer service ability and customer satisfaction. (3) Washing machines The washing machine business will continue to take the industrial vision of "washing all stains and protecting the whole family".It will enrich its products and upgrade its product structure around the product business cards of "clean", "thin" and "smart". On the basis of hand-washing series products, it will create a second-generation upgraded product to meet the cleaning needs of consumers and further improve the cleaning ability. It will develop a flat-embedded series of washing and drying package products, further adapting into home integration. In the domestic market, it will continue to deepen the base market, focus on the construction of basic and e-commerce channels, and achieve steady growth in scale.In overseas markets, it will "grasp one core and two basic aspects" and strengthen cooperation with key customers; focus on color screen drum washing machine, and build a leader in color screen products in the global market. (4) Kitchen and bathroom products and small home appliances It will strengthen the R&D capacity building in the kitchen and bathroom products and small home appliances industries, continuously consolidate the market position of core products and further enhance the brand influence.For product line of tea-based drink, it will strengthen the core competitiveness, focus on the improvement and function enhancement of self-developed and self-made products, and enhance the management quality.It will clean the product line of electrical appliances, focus on strengthening the functions of the project team and promote the rapid development of the project.In terms of fuel-fired product line, it will continue to take the marketing strategy as the guide, speed up the development and launch of gas core technologies, and quickly realize the marketization of products.The industry will focus on resource investment, and realize the "Troika" marching hand in hand by strengthening R&D capability and precise marketing strategy. (5) Biomedical products It will unswervingly implement the development strategy of "diversification based on biomedical field", focus on the field of life sciences, deepen the construction of domestic and international channel system with user orientation, deeply tap the needs of users, deepen technology and innovate product design, and improve service level in an all- round manner to expand user coverage and product market share.The Company always adheres to the business philosophy of "technology-founded, product-based, market-oriented and customer-centered", and continues to operate steadily around the business principles of deepening channels, innovating products, optimizing quality and improving efficiency. The above business plans and business objectives do not represent the listed company's profit forecast for 2024. 46 Annual Report 2023 Whether they can be realized depends on many factors such as changes in market conditions and the efforts of the management team. There is great uncertainty, which shall be especially noted by the investors. (IV) Possible risks and countermeasures Facing the objective factors such as more intense competition in the home appliance market, the living environment of enterprises will be even worse.In 2024, the Company will face risks such as intensified industry competition, exchange rate fluctuation, price fluctuation of bulk materials, trade friction and geopolitical influence. 1. Risk of intensified industry competition The traditional home appliance industry is in full competition, with high product homogeneity. The industry development has entered the era of stock competition. In addition, the incremental demand of other competitive brands will further aggravate the product competition situation, leading to the risk of price war.Faced with severe challenges, the Company will actively increase R&D investment and win customers through continuous innovation of products and services. 2. Risk of exchange rate fluctuation Affected by the international situation, the exchange rate fluctuates greatly.The Company will pay close attention to exchange rate changes and operate steadily to reduce the impact of exchange rate changes. 3. Risk of price fluctuation of bulk materials The main raw materials of the Company's products are steel, copper, aluminum, plastics and chemical materials, etc. If the prices of bulk raw materials fluctuate greatly, the related costs will also change accordingly, which will have a certain impact on the company's operating performance.The Company will continue to pay attention to the price fluctuation of bulk materials and take timely measures to deal with risks and reduce the impact of price fluctuations. 4. Influence of trade friction and geopolitics The Company pays close attention to the impact of uncertain factors such as international trade friction and geopolitics on its global business. In view of the above risks, combined with the industry situation in 2024 and its own disadvantages in 2023, the Company will carry out its work in 2024 with the business idea of "adhering to the leadership of party building, adhering to the value orientation, comprehensively improving efficiency, enhancing six powers around one goal, deepening internal and external cooperation, strengthening compliance risk control, and promoting the Company's sustained and high-quality development", and make the layout of products, technologies and markets in advance to realize the high-end and intelligent transformation of the Company's products, enrich the product line, enhance the Company's operating ability and profitability, and build a comprehensive home appliance enterprise. 47 Annual Report 2023 XII. In the report period, reception of research, communication and interview □ Applicable √Not applicable Reception Main contents of the discussion Time Location Way Type Basic situation index of investigation object and the information provided #2 reference room of http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g February the administrative Field Operation condition of the Institute Huaan Funds ssz0000521&stockCode=000521&announcementId=1215755626&a 1,2023 center of the research Company nnouncementTime=2023-02-02%2017:40 Company #3 reference room of http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g February the administrative Field Operation condition of the Individual Dong Guoshuai ssz0000521&stockCode=000521&announcementId=1215767818&a 2,2023 center of the research Company nnouncementTime=2023-02-03%2017:24 Company Online platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g February Shanghai Shenyin Wanguo Operation condition of the —— online Institute ssz0000521&stockCode=000521&announcementId=1215951190&a 22,2023 Seccurities ,Guotai Fund Company communicati nnouncementTime=2023-02-23%2017:22 on Online platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g Operation condition of the April 6,2023 —— online Institute Huaan Funds ssz0000521&stockCode=000521&announcementId=1216353750&a Company communicati nnouncementTime=2023-04-07%2016:08 on Investors who participated #2 reference room of in the 2022 annual perfor Holding a presentation on the 2022 http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative mance briefing through Pa annual business results and April 14,2023 Other Other ssz0000521&stockCode=000521&announcementId=1216438317&a center of the norama.com’s “Investor R responding the questions that nnouncementTime=2023-04-17%2018:35 Company elations Interactive Platfor investors concerned m” (https://ir.p5w.net) Annual Report 2023 Southern Fund,China Securities, Penghua Fund, Tebon fund, Shenwan Online #2 reference room of Hongyuan,Orient platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative Securities,Maxwealth Operation condition of the April 20,2023 online Institute ssz0000521&stockCode=000521&announcementId=1216497454&a center of the Fund,Winsure Capital, Company communicati nnouncementTime=2023-04-20%2021:16 Company Bank of China Investment on Management, PICC Fund, Guangfa Fund, Jingan Investment Online #2 , #3 reference platform for Changjiang Securities, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g room of the Operation condition of the April 21,2023 online Institute Taiping Capital, Bocom ssz0000521&stockCode=000521&announcementId=1216518995&a administrative center Company communicati Schroders, Boshi Fund nnouncementTime=2023-04-21%2018:03 of the Company on Capital Group,CICC Appliances, Pingan Assets,China Universal Asset Management, Huaan Online #2 reference room of Fund, Jiashi Fund, Zhong platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative Ou AMC, Guangfa Fund, Operation condition of the April 24,2023 online Institute ssz0000521&stockCode=000521&announcementId=1216552643&a center of the Boshi Fund, Taiping Company communicati nnouncementTime=2023-04-24%2018:27 Company Assets, Guotai Fund, AXA on SPDB, Investment Managers,Cinda Fund,Jingshun Grest wall, Huatai Bairui April 26, #1 , #3 reference Online Institute China Securities, Huaxia Operation condition of the http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g 49 Annual Report 2023 2023; April room of the platform for Fund,Changjiang Pension, Company ssz0000521&stockCode=000521&announcementId=1216646210&a 27, 2023 administrative center online Huabao Fund, Guangfa nnouncementTime=2023-04-27%2017:18 of the Company communicati Fund, Tianhong Fund, on Baoying Fund, Southwest Securities, Pingan Pension,Guosheng Securities,CITIC Securities Minsheng Securities, Industry Securities,Tebon #2 reference room of Securities,DIB Asset http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative Field Operation condition of the May 8,2023 Institute Management, Huafu Fund, ssz0000521&stockCode=000521&announcementId=1216780403&a center of the research Company CITIC Securities,Sinolink nnouncementTime=2023-05-09%2017:07 Company Securities,Guotai Junan, CMS Securities,ZRF Fuguo Fund, Guotai Junan Online Securities,Maxwealth ##2 reference room of platform for Fund ,Pengyang Fund, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g May 10,2023, the administrative Operation condition of the online Institute Western Lfadbank FMC, ssz0000521&stockCode=000521&announcementId=1216800095&a May 11, 2023 center of the Company communicati Huafu Fund, China nnouncementTime=2023-05-11%2018:23 Company on Universal Asset Mangement Southwest Securities, , Online #1 , #4 reference Great Wall Securities, May platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g room of the Jinying Securities,CICC Operation condition of the 17,2023,May online Institute ssz0000521&stockCode=000521&announcementId=1216852449&a administrative center Asset Management, Company 18, 2023 communicati nnouncementTime=2023-05-18%2017:49 of the Company Changxin Fund, Noude on Fund, Zhong OU, Bank of 50 Annual Report 2023 China Investment Management #2 , #4 reference Zhongtai Securities, Xinda May 24, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g room of the Field Appliances, Haifutong Operation condition of the 2023,May 25, Institute ssz0000521&stockCode=000521&announcementId=1216907443&a administrative center research Fund, Tianfeng Securites, Company 2023 nnouncementTime=2023-05-25%2017:23 of the Company Gousheng Securities Huaxi Securities, Jiashe Fund,Sinolink Securities, Wanjia Fund,Amundi BOC Wealth Management, Loyal Valley #1 , #2 reference Capital,Yangpei May http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g room of the Field Investment, Junlong Life, Operation condition of the 31,2023,June Institute ssz0000521&stockCode=000521&announcementId=1216966650&a administrative center research Yongxing Securities, Company 1, 2023 nnouncementTime=2023-06-01%2018:03 of the Company CITIC Securities, Huaan Securities, Shengyu Investment Southwest Securities, Frankin Templeton Sealand Fund Managment No.1 Meeting Room, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g Field China Securities, CINDA Operation condition of the June 6,2023 Zhongshan Institute ssz0000521&stockCode=000521&announcementId=1217011964&a research Fund Company Changhong nnouncementTime=2023-06-07%2017:47 A15 Meeting Room http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g Field Jiashi Fund, Guosheng Operation condition of the June 7,2023 Changhong Trade Institute ssz0000521&stockCode=000521&announcementId=1217022748&a research Securities Company Center nnouncementTime=2023-06-08%2017:57 #1 reference room of Online Xinhua Fund, Huaxi Operation condition of the http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g June 12,2023 Institute the administrative platform for Securities Company ssz0000521&stockCode=000521&announcementId=1217054282&a 51 Annual Report 2023 center of the online nnouncementTime=2023-06-13%2019:05 Company communicati on Xinhua Fund, Huaxi Securities,UBS,Industry Securities, China Online Universal Asset #2 , #3 reference platform for Mangement, Huaan http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g room of the Operation condition of the June 13,2023 online Institute Fund,CICC Asset ssz0000521&stockCode=000521&announcementId=1217066302&a administrative center Company communicati Management, Jiashi Fund, nnouncementTime=2023-06-14%2017:53 of the Company on Cinda Fund,Southwest Securities, Guosheng Securities, Pengyang Securities, Boshi Fund Online #2 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative PICC Asset, Taikang Operation condition of the June 15,2023 online Institute ssz0000521&stockCode=000521&announcementId=1217073900&a center of the Asset,China Securities Company communicati nnouncementTime=2023-06-15%2017:07 Company on Online #1 reference room of June platform for Boshi Fund,China http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative Operation condition of the 27,2023,June online Institute Merchants Fund, Cinda ssz0000521&stockCode=000521&announcementId=1217154961&a center of the Company 28,2023 communicati Fund, Haitong Appliance nnouncementTime=2023-06-28%2017:49 Company on #3 reference room of Online Shenwan Hongyuan August 21, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g the administrative platform for Securities, Guosheng Operation condition of the 2023,August Institute ssz0000521&stockCode=000521&announcementId=1217606538&a center of the online Securities, Southwest Company 22,2023 nnouncementTime=2023-08-22%2018:03 Company communicati Securities, Fuguo Fund, 52 Annual Report 2023 on Guangfa Fund, Huaan Fund, Jiashi Fund, BOCOM Schroders, Zhong Ou Fund, Rongtong Fund, Taikang Fund,Great wall Fund, E fund,China Merchants Fund,ICBC Fund, Huatai Pinebridge Investment, Xinhua Fund, Cinda Fund, Dacheng Fund, Southern Fund,Lion Fund, Pengyang Fund, Chongshan Investment, Chunhou Fund, Donghai Fund,Founder Asset Management, China Everbright Asset Management,Guolian Fund, Hotland Innovation Asset Management,Mirae Asset,Huaxi Securities, Huian Fund, Jinying Fund, Minghe Investment, Pingan Pension,Pingan Asset Management ,Xuanlu Investment, Winsure 53 Annual Report 2023 Capital, Changjiang Pension, loyal Valley Capital, Zhonghui Life, Zhongtai Asset Management, CITIC Asset Management, Bank of China Investment Management,Maxwealth Fund, China Universal Asset Mangement, Guotai Fund, Hongde Fund, Taikang Pension,BXRF, Changxin Fund Online #4 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g August the administrative China Universal Asset Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1217694174&a 29,2023 center of the Mangement Company communicati nnouncementTime=2023-08-29%2017:35 Company on Online #2 reference room platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g September of the administrative Xingtai Investment, Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1217859735&a 14,2023 center of the Yangjiao Fund, CMS Company communicati nnouncementTime=2023-09-14%2019:17 Company on Online #1 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g September the administrative Operation condition of the online Institute Haitong Fund,Tebon Fund ssz0000521&stockCode=000521&announcementId=1217871475&a 15,2023 center of the Company communicati nnouncementTime=2023-09-15%2017:57 Company on 54 Annual Report 2023 Online #4 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g September the administrative Guangfa Fund, Gousheng Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1217970679&a 27,2023 center of the Securities Company communicati nnouncementTime=2023-09-27%2018:41 Company on Online #3 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g October the administrative Operation condition of the online Institute Jiashi Fund ssz0000521&stockCode=000521&announcementId=1218151133&a 25,2023 center of the Company communicati nnouncementTime=2023-10-25%2018:51 Company on Online #1 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g October the administrative Huatai Borui Fund, Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1218168881&a 26,2023 center of the Shenwan Securities Company communicati nnouncementTime=2023-10-26%2018:57 Company on Xinhua Fund, J P Morgan Asset Management, China Online Merchants Fund, Fuguo #2 reference room platform for Fund, Jiashi Fund,Oriental http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g October of the administrative Operation condition of the online Institute Alpha Fund, Huaan Fund, ssz0000521&stockCode=000521&announcementId=1218203763&a 30,2023 center of the Company communicati UG Fund, Zhongtai nnouncementTime=2023-10-30%2019:23 Company on Securities, Shenwan Securities, Tianfeng Securities #2 reference room of Online Bocom Schrodenrs Fund, http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g November the administrative platform for Operation condition of the Institute Jiashi Fund, Zhong Ou ssz0000521&stockCode=000521&announcementId=1218292412&a 15,2023 center of the online Company Fund Guosheng Securities nnouncementTime=2023-11-09%2018:31 Company communicati 55 Annual Report 2023 on Online #2 reference room of platform for Southern Fund, Huatai http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g November the administrative Operation condition of the online Institute Bairui Fund , Guosheng ssz0000521&stockCode=000521&announcementId=1218351774&a 15,2023 center of the Company communicati Securities nnouncementTime=2023-11-15%2017:59 Company on #2 reference room of Huaan Fund, ABC-CA http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g December the administrative Field Operation condition of the Institute Fund Management ,China ssz0000521&stockCode=000521&announcementId=1218593063&a 12,2023 center of the research Company Fund nnouncementTime=2023-12-12%2018:17 Company Online #2 reference room of platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g December the administrative Guangfa Fund, Zhongtai Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1218606177&a 13,2023 center of the Securities Company communicati nnouncementTime=2023-12-13%2017:31 Company on Guotai Fund, BOSC Asset, Online #1 reference room of Juming Investment, CICC platform for http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=g December the administrative Asset Management, Operation condition of the online Institute ssz0000521&stockCode=000521&announcementId=1218703132&a 22,2023 center of the Penghua Fund, Dongwu Company communicati nnouncementTime=2023-12-22%2016:55 Company Fund, Zhongtai Securities, on Huaxi Securities 56 Annual Report 2023 XIII Implementation of the Action Plan for "Double Improvement of Quality and Return" Has the company disclosed an action plan for "dual improvement of quality and return". □ Yes √ No IV. Corporate Governance I. Corporate governance of the Company (i) Overview of the corporate governance In strict compliance with the Company Law, Securities Law, Governance Principles of Listed Company issued by the CSRC, the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and Shenzhen Stock Exchange Self-Regulatory Guidelines No.1- Standardized Operation of the Listed Companies on main Board of SSE, the Company continued to construct and perfect its governance structure, thereby forming its decision-making, supervision and operation management organization with general meeting, the board of directors, the board of supervisors and operation management as the major structure. The general meeting, board of directors, board of supervisors and operation management of the Company has definite terms of reference, which can ensure an effective balance, scientific decision-making process and coordinative operation, laying firm foundation for making decisions relating to the Company’s continuous, steady and healthy development. During the reporting period, the actual situation of corporate governance has been in line with the requirements of relevant state laws and regulations, and regulatory documents relevant to governance of listed companies issued by China Securities Regulatory Commission and Shenzhen Stock Exchange. During the reporting period, the company revised and promulgated the Articles of Association, Rules of Procedure for the General Meeting of Shareholders, Rules of Procedure of the Board of Directors and Rules of Procedure for the Board of Supervisors, which further improved the standard operation and governance level of the Company. The overall situation of corporate governance meets the requirements of relevant national laws and regulations, and regulatory documents on corporate governance of listed companies issued by China Securities Regulatory Commission and Shenzhen Stock Exchange. 1. Shareholders and general meeting The Company standardized the procedures concerning convening, holding and voting of general meeting in strict compliance with the Articles of Association and Rules of Procedure of General Meeting. All shareholders, especially the minority shareholders, were equally treated to ensure all shareholders shall rank equal status and can fully exercise their right. During the reporting period, the Company convened 4 shareholders general meetings. In addition to convening general meeting in forms of site conference, the Company offered convenience for shareholders to present general meeting via network voting which was safe, economic and convenient. At the same time, all the matters submitted to the Company’s general meeting of shareholders should count the votes of the small and medium investors separately, and the results of the vote count should be disclosed timely so as to effectively protect the rights and interests of small and medium investors and ensure that all shareholders, especially the small and medium shareholders, fully exercise their rights. 2. The Company and controlling shareholders 57 Annual Report 2023 The Company has independent business and independent management capability. The Company and its controlling shareholders owe independent business, personnel, assets, organs and finance. During the period, controlling shareholder abide by requirement of Article of Association and Management System of Related Transactions, strictly regulate their behaviors, and no controlling shareholder has directly or indirectly intervened in the Company’s policy-making and business activities beyond the general meeting of stockholders, no capital or assets of the Company occupied by controlling shareholder and its affiliates either. 3. The directors and board of directors The company strictly convenes and convenes the board of directors in accordance with the provisions of the articles of association and the rules of procedure of the board of directors. The voting and information disclosure procedures of the board of directors comply with relevant regulations. All directors of the company are able to carry out their work in accordance with the rules of procedure of the board of directors and the independent director system, attend the board of directors and shareholders' meetings seriously, exercise their powers in accordance with the law, and fulfill their duties diligently and responsibly. The independent directors of the company strictly abide by the "Management Measures for Independent Directors of Listed Companies" and the "Independent Director System" of the China Securities Regulatory Commission, maintain sufficient independence in their work, and, with a serious, diligent, and loyal work attitude, based on an independent and prudent position, actively participate in company decision-making through various forms such as attending meetings, on-site inspections, reviewing documents, and inquiring with relevant personnel. They carefully review various proposals, express pre approval opinions and independent opinions on related party transactions, cash dividends, major issues, etc., fully play the role of independent directors in supervision and balance, and effectively safeguard the interests of the company and all shareholders, especially small and medium-sized shareholders. The strategy committee, compensation and assessment committee, audit committee, nomination committee, and ESG management committee under the company's board of directors are five specialized committees. According to the corresponding implementation rules of each committee, they are responsible for discussing, making decisions, supervising, and evaluating major work matters of the company, playing an important role in scientific decision-making, improving decision-making efficiency and quality for the board of directors.. 4. Supervisors and board of supervisors The Company convened and held meeting of supervisors in strict compliance with the Company Law and Articles of Association, and the voting and information disclosure procedures of supervisors’ meeting complied with relevant requirements. The tenth board of supervisors of the company has five supervisors, including two employee supervisors, the number and constitution of the board of supervisors meet the requirements of laws and regulations. All supervisors of the company can earnestly perform their duties in accordance with the requirements of the Rules of Procedure for the Board of Supervisors, supervise the decision-making procedures and resolutions of the board of directors and the legal operation of the company, review the regular reports prepared by the board of directors and put forward written review opinions, and effectively supervise and express independent opinions on the company's major events, related transactions, financial status, the legality and compliance of directors and senior executives’ performance of duties by attending the general meeting of shareholders and the meeting of the board of directors from the perspective of safeguarding the legitimate rights and interests of the company and shareholders. 58 Annual Report 2023 5. The performance appraisal and incentive and constraint mechanism According to the Articles of Association, the Board of Directors of the company will decide to appoint or dismiss the president, secretary of the Board of Directors and other senior management personnel of the company, and decide on their remuneration, rewards and punishments; According to the nomination of the president, decide to appoint or dismiss senior management personnel such as the company's vice president and financial officer, and decide on their remuneration, rewards and punishments. The performance evaluation of directors, supervisors, presidents and other senior management personnel shall be conducted by the Human Resources Department of the company on a daily basis, and by the Remuneration and Appraisal Committee of the company at the end of the year. The company has established and continuously improved fair and transparent performance evaluation standards and incentive and restraint mechanisms for directors, supervisors and senior management personnel. The appointment of company managers is open and transparent, in line with the relevant provisions of laws and regulations. 6. The stakeholders The Company fully respects and maintains the legitimate rights and interests of stakeholders; strengthen communication and negotiation with each other, realizes the coordination and balance of interests for all parties including society, shareholders, company and staff, pushes forward the sustainable, steady and harmonious development of the Company together.In terms of safeguarding the interests of shareholders, the company treats all shareholders, especially the small and medium-sized shareholders equally, in strict accordance with relevant regulations, and ensures that all shareholders enjoy equal status and fully exercise their rights by regulating the convening, holding and voting procedures of the general meeting of shareholders. In terms of maintaining employees' rights and interests, starting from the company's strategy and business development, it has continuously promoted and improved talent mechanisms such as talent reserve, learning and development, career planning and guidance, whole-process performance management, and salary incentive system, regularly evaluated and continuously monitored employees' engagement, satisfaction level and corporate culture evaluation index, continuously improved employees' concerns, given full play to employees' vitality, stimulated employees' potential, and realized employees' personal development goals while achieving organizational goals; In terms of safeguarding the interests of relevant parties, guided by the corporate values of "creating and sharing together", it has been committed to establishing a win-win cooperation model of common development and common growth with relevant parties. 7. About information disclosure and transparency During the reporting period, the company strictly complied with relevant provisions of the Listing Rules of Shenzhen Stock Exchange and the company's Information Disclosure Management System, strengthened the management of information disclosure affairs, actively fulfilled its information disclosure obligations, and designated Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Information Website(Juchao Website (www.cninfo.com.cn))as the designated media for the company's information disclosure, implemented strict confidential procedures for material undisclosed inside information, and controlled the scope of informed personnel. The company earnestly fulfilled its obligations to disclose relevant information in a true, accurate, timely and complete manner, and ensured that all investors equally enjoy the right to know and other legitimate rights and interests. 59 Annual Report 2023 8. Investor relations management During the reporting period, the Company continued to well ensure investor relations management, deepen communication and exchanges with investors, enhance investors' understanding and recognition of the company, and safeguard investors' legitimate rights and interests in accordance with the requirements of the Company's Investor Relations Management System and Reception and Promotion Work System. During the reporting period, the company communicated with investors through the "Hudongyi" platform of investor relations of Shenzhen Stock Exchange, fully listened to investors' opinions and suggestions, and earnestly protected the interests of small and medium-sized investors; well ensured answering and replying investors' visits and calls, as well as receiving and replying faxes and e-mails, and treated media reports with caution; In order to help investors further understand the company's operating performance and financial condition, the company organized the 2021 online performance briefing and achieved good results, which helped investors to understand the listed companies more comprehensively and enhanced the transparency of the company; It held the Anhui Investor Service Week of Shenzhen Stock Exchange - Entering the Listed Companies, which further broadened the communication channels of investors, earnestly safeguarded the legitimate rights and interests of investors, and constantly promoted and improved the management level of investor relations in the company. ii)Whether there are significant differences between the actual state of corporate governance and laws, administrative regulations and the provision with governance concerned for listed companies issued by CSRC □Yes √ No There are no significant differences between the actual state of corporate governance and laws, administrative regulations and the provision with governance concerned for listed companies issued by CSRC II. Independence of the Company relative to controlling shareholder and the actual controller in ensuring the Company’s assets, personnel, finance, organization and businesses The Company totally separated in business, personnel, assets, institutions and financial aspects from Sichuan Changhong (controlling shareholder) and actual controller State-owned Assets Supervision & Administration Commission of Mianyang Municipality, with independent business accounting, responsibility and risk and independent business operation capability. 1. The business: the Company has an independent and complete business as well as operation ability, with specialized procurement, production, technology, marketing, management, human resources and other departments. We autonomously manage and operate business on our own. While the management staff are independent from controlling shareholders and their subordinate enterprises. The Company is free from interference by controlling shareholders and other affiliates, and there is no dependence on controlling shareholders and other affiliates. 2. The personnel: personnel, labor, personnel and salary of the Company are completely independent. President, vice president, person in charge of finance, Secretary of the board of directors and other senior management personnel are working in the Company and receive salary, not receiving any remuneration and holding position of any except directors, supervisors in the controlling shareholder and its subordinate enterprises. 3. Assets: the Company owns places of production and management independent from its controlling shareholder, 60 Annual Report 2023 owns complete assets structure, independent production system, auxiliary production systems and supporting facilities, land use rights, ownership of houses and other assets, and independent purchase and sales system. No assets occupied by controlling shareholders and other affiliates. 4. Institutions: the Company established organization completely independent from controlling shareholders; the general meeting, board of directors, board of supervisors and the internal organization are capable of taking independent action, with no controlling shareholder intervention of corporation's decision-making behavior. The Company strengthen the power restriction system via general meeting, the Board, supervisory committee, independent directors and vary committees, formulated an effective structure for corporate governance. 5. Financial aspects: the Company set up independent financial management, and independent accounting system and financial management system, independently setting up banking account and tax declaration. III. Horizontal competition □ Applicable √ Not applicable IV. In the report period, the Company held annual shareholders’ general meeting and extraordinary shareholders’ general meeting (i) Annual Shareholders’ General Meeting in the report period Ratio of Session of Type investor Date Date of disclosure Index of disclosure meeting participation Juchao Website AGM of 2022 AGM 39.8034% April 25,2023 April 26,2023 www.cninfo.com.cn( Announcement No.:2023-030) First Extraord Extraordinary inary Juchao Website General 36.9723% May 10,2023 May 11,2023 General www.cninfo.com.cn( Announcement No.:2023-033) Meeting of Meeting 2023 Second Extraord Extraordinary inary Juchao Website General 34.7820% November 3,2023 November 4,2023 General www.cninfo.com.cn( Announcement No.:2023-065) Meeting of Meeting 2023 Third Extraord Extraordinary inary Juchao Website General 35.2717% December 21,2023 December 22,2023 General www.cninfo.com.cn( Announcement No.:2023-080) Meeting of Meeting 2023 (ii) Request for extraordinary general meeting by preferred stockholders whose voting rights restore □ Applicable √ Not applicable 61 Annual Report 2023 V. Directors, supervisors and senior officers (i) Basic information Shares held Shares held Reasons for Worki Number of shares Number of shares Other Start dated of office End date of office at period- at period- increase or Name Title ng Sex Age increased in this decreased in this changes term term begin end decrease of status period (share) period (share) (share) (share) (share) shares Wu In Not Chairman Male 51 July 3,2014 October 12,2023 570,500 0 0 0 570,500 Dinggang office applicable Director, In Not Zhong Ming Male 51 December 30,2013 October 12,2023 236,175 0 0 0 236,175 President office applicable In Not Zhao Qilin Director Male 48 December 23,2021 October 12,2023 0 0 0 0 0 office applicable Yong In Not Director Male 55 September 12,2017 October 12,2023 0 0 0 0 0 Fengshan office applicable Hong Independen In Not Male 48 October 12,2020 October 12,2023 0 0 0 0 0 yuanjia t director office applicable Independen In Not Mou Wen Female 57 October 12,2020 October 12,2023 0 0 0 0 0 t director office applicable Independen In Not Zhao Gang Male 45 October 12,2020 October 12,2023 0 0 0 0 0 t director office applicable Director, Kou In Not Deputy Male 54 July 3,2014 October 12,2023 0 0 0 0 0 Huameng office applicable president Director, In Not Hu Zhaogui Deputy Male 49 June 21,2018 October 12,2023 178,050 0 0 0 178,050 office applicable president Chairman In Not Shao Min Male 41 September 12,2017 October 12,2023 0 0 0 0 0 of office applicable 62 Annual Report 2023 Supervisory In Not He Xintan Supervisor Male 43 September 12,2017 October 12,2023 0 0 0 0 0 office applicable In Not Huang Hong Supervisor Female 53 September 12,2017 October 12,2023 0 0 0 0 0 office applicable Staff In Not Ji Ge Female 42 December 25,2017 October 12,2023 0 0 0 0 0 supervisor office applicable Sun Staff In Not Female 52 March 30,2021 October 12,2023 0 0 0 0 0 Hongying supervisor office applicable Huang Deputy In Not Male 54 September 12,2017 October 12,2023 356,450 0 0 0 356,450 Danian president office applicable Centralized bidding Tang Deputy In Male 53 March 28,2021 October 12,2023 0 800,000 0 0 800,000 trading way Youdao president office to increase holdings CFO (person in In Not Pang Haitao Male 48 October 25,2017 October 12,2023 0 0 0 0 0 charge of office applicable finance) Secretary of In Not Li Xia Female 43 May 22,2009 October 12,2023 414,600 0 0 0 414,600 the Board office applicable Executive Office Liu Not Deputy leavin Male 60 June 20,2011 May 25,2023 1,689,893 0 0 0 1,689,893 Hongwei 注2 applicable president g Total -- -- -- -- -- -- 3,445,668 800,000 0 0 4,245,668 -- Note 1: The term of office of the Tenth Board of Directors and the Board of Supervisors of the Company expires on October 12, 2023. In view of the fact that the nomination of candidates for the new Board of Directors and the Board of Supervisors of the Company is still in progress, in order to ensure the continuity and stability 63 Annual Report 2023 of the work of the Board of Directors and the Board of Supervisors of the Company, the current Board of Directors and the Board of Supervisors of the Company will continue to perform their corresponding obligations and responsibilities before the completion of the re-election without adversely affecting the continuity and stability of the related work of the Board of Directors of the Company. The Company is actively promoting the re-election of the Board of Directors and the Board of Supervisors, and will fulfill its information disclosure obligations in time. Note 2: Mr. Liu Hongwei retired on January 12, 2024 due to his retirement age, and is no longer holding any position in the Company and its subsidiaries. 64 Annual Report 2023 1. During the reporting period, whether there was any departure of directors and supervisors and dismissal of Senior Officers √Yes□No On May 25, 2023, Mr. Liu Hongwei, Executive Vice President of the Company, resigned as the executive vice president of the Company for personal reasons. On January 12, 2024, Mr. Liu Hongwei completed the retirement formalities because his retirement age was reached, and did not hold any position in the Company and its 2. Changes of directors, supervisors and senior executives √Applicable□Not applicable Name Title Types Date Reason Executive Liu Dimissio Due to personal reasons, he appoint to resign from his position as executive vice May 25,2023 Hongwei n vice president of the company president (ii) Post-holding 1. Professional background, major working experience and present main responsibilities in Company of directors, supervisors and senior executive at the present (1) Wu Dinggang, male, the Han nationality from Suining, Sichuan Province, was born in March 1973, Member of CPC, owns bachelor degree, graduate from Tianjin University of Commerce China (Tianjin University of Commerce now), major in refrigeration equipment and cryogenic technique. He served successively as GM of Suining Sale Branch and Chengdu Sales Branch of Sichuan Changhong Electric Co., LTD, director of Sichuan and Chongqing Marketing Management Department of Sichuan Changhong Electric Co., LTD, deputy GM of Changhong Electronics (China) Marketing Co., GM of market planning center of Changhong Multimedia Industry, director and GM of Le-Jia-Yi Chain Management Co., Ltd., ZhongkeMeiling Cryogenic Technology Co., Ltd. director and GM of Sichuan Changong Air Conditioner Co., Ltd and deputy president, president, deputy chairman and Party Secretary of the Company. Currently he serves as director, vice GM of Sichuan Changhong Electric Co., Ltd., chairman of the Company; Chairman of Zhongshan Changhong Electric Co., LTD; Chairman of Sichuan Changhong Air-conditioner Co., Ltd. and Chairman of ZhongkeMeiling Cryogenic Technology Co., Ltd. (2) Zhong Ming, male, the Han nationality from Meishan, Sichuan Province, was born in November 1972, member of CPC, a senior engineer, doctoral degree, EMBA degree from University of Science and Technology of China, PhD degree in Engineering Thermophysics. He successively served as deputy director of research institution of Sichuan Changhong Air-conditioner Co., Ltd., deputy GM of Sichuan Changhong Air-conditioner Co., Ltd. and technical director of household appliance group of Sichuan Changhong Electric Co., Ltd. He serves as director President and Party Secretary of the Company currently , Chairman of Zhongshan MeilingWulian Technology Co., Ltd., Director of Sichuang Changhong Air-conditioning Co., Ltd., and Director of Zhongke Meiling Low Temperature Technology 65 Annual Report 2023 Co., Ltd. (3)Zhao Qilin, male, Han nationality, born in September 1975, graduated from Southwestern University of Finance and Economics with a bachelor's degree in rural finance, and served as accountant of the financial department, investment project manager, asset management manager of asset management department, manager of investment management department, and securities affairs representative of Sichuan Changhong Electric Co., Ltd.; financial manager of Sichuan Changhong Innovation Investment Co., Ltd.; chief financial officer and and joint company secretary of Changhong Jiahua Holdings Co., Ltd.. He currently serves as secretary of the board, general counsel, office director of the board of directors, and director of the asset management department of Sichuan Changhong Electric Co., Ltd., director of Anjian Holdings Co., Ltd.,director of Sichuan Changhong Innovation Investment Co., Ltd.. and the director of the Company. (4) Mr. Yongfengshan, Han nationality, born in June 1968 in Dingyuan, Anhui, is a member of the Communist Party of China, a senior accountant, with a university degree and a Master's degree in Business Administration. He has served as the Director of the Finance Department of Hefei Cable Factory, the Director and Deputy Chief Accountant of the Finance Department of Hefei Meiling Co., Ltd., the Deputy General Manager and Chief Accountant of Hefei Meiling Group Holding Co., Ltd., the Party Secretary, General Manager, and Chairman of Hefei Industrial Investment Holding Co., Ltd., and the Party Secretary and Chairman of Hefei Industrial Investment Holding (Group) Co., Ltd. Current positions include Secretary of the Party Committee and Chairman of Hefei Construction Investment Holdings (Group) Co., Ltd., Chairman of Hefei Weixinnuo Technology Co., Ltd., Chairman of Hefei Construction Investment Capital Management Co., Ltd., Director of Anhui Jianghuai Automobile Co., Ltd., and Director of the Company. (5) Hong yuanjia, male, Han nationality, born in February 1975, Shantou, Guangdong, holds a master degree, graduated from Shanghai University of Finance and Economics majoring in international business management, and is Fudan University MPAcc (Master of Accounting), CPA, International Accountant (AIA), intermediate accountant, and intermediate economist. He once served as the foreign currency payable supervisor and investment supervisor of China Eastern Airlines Co., Ltd., the deputy manager of the financial department of the Shanghai Representative Office of SanchengHongji (Hong Kong) Co., Ltd., the accounting manager of General Electric Lighting Co., Ltd., the accounting manager of General Electric Industrial Supply Co., Ltd., and Chief Financial Officer of Lingji Electronics (General Electrical Industry System Power Supply). He is currently the Chief Financial Officer of Asia Pacific Region of Yiluo Technology (Shanghai) Co., Ltd. and an independent director of the Company. (6) Mou Wen, female, Han nationality, born in September 1965, Hengshan, Hunan, holds a master's degree, an accountant, and holds a master's degree in business management from Sichuan University. She previously served as a lecturer in the School of Business Administration of Sichuan University, an Associate Professor of Accounting in the School of Business Administration of Sichuan University, an independent director of Tibet Mineral Development Co., Ltd., Sichuan Jinlu Group Co., Ltd., Huayi Compressor Co., Ltd., Jinhui Liquor Co., Ltd., Sichuan Teway Food Co., Ltd., and Hebei Baoli 66 Annual Report 2023 Engineering Equipment Group Co., Ltd., a member of Investment Decision Advisory Committee of Sichuan Chuanjiao Road and Bridge Co., Ltd., and financial consultant of Sichuan Daka Electric Co., Ltd., etc. She is currently Associate Professor and Master Supervisor of Business School of Sichuan University, and an independent director of Chengdu Guibao Science and Technology Co., Ltd., MianyangFulin Precision Machinery Co., Ltd., Sichuan Joyou Digital Technology Co., Ltd., Tibet Mineral Development Co., Ltd., and an independent director of the Company. (7) Zhao Gang, male, Han nationality, born in April 1977, Peixian, Jiangsu Province, is a member of the Communist Party of China, holds a doctoral degree, graduated from the University of Science and Technology of China majoring in power engineering and thermophysics. He once served as a post doctorate and an associate professor in the Department of Mechanics and Mechanical Engineering of the University of Science and Technology of China, a professor of orbital systems in the Department of Electronic Science and Technology, a special researcher for foreigners in the Japan Society for the Promotion of Science, School of Engineering, Kyushu University, Japan, and a senior research scholar in the Department of Mechanical Engineering at the University of Washington. He is currently the executive director, professor and doctoral supervisor of the Department of Electronic Science and Technology of the University of Science and Technology of China, the deputy director of the Anhui Life Resources Conservation and Artificial Organ Engineering Technology Research Center, a part-time professor of the Department of Mechanical Engineering of the University of Washington, and an independent director of the Company. (8) Kou Huameng, male, the Han nationality from Yanting, Sichuan Province, was born in February 1970, Member of CPC, master degree candidate, EMBA graduate from UESTC. He served successively as deputy director of production office of Sichuan Changhong Electric Co., LTD, director of Guangxi Marketing management Committee, director of Fujian-Jiangxi Marketing Management, General Manager of Changhong Audiovisual Company and director and GM of Guangdong Changhong Digital Technology Co., Ltd.; Sichuan Changhong Electric Co., Ltd, director of development management department of Sichuan Changhong Electric Co., Ltd., and director of ChanghongHuayi Compressor Co., Ltd.; now he serves as director and deputy president of the Company. (9) Hu Zhaogui, male, the Han nationality, born in Feixi Hefei in October 1974, a member of the Communist Party of China, holds a master’s degree, graduated from Chongqing University as a master of business administration. He has served successively as the head of marketing and sales department stationed abroad of Hefei Meiling Co., Ltd., assistant president and general manager of the freezer and washing machine business division, and general manager of the domestic marketing division. He is currently the director and vice president of the Company and the general manager of Sichuan Changhong Air Conditioner Co., Ltd. (10) Shao Min, male, Han nationality, was born in Linyi, Shandong in March 1983, and earned a bachelor’s degree in accounting major from Xi’an Jiaotong University. He joined in work in July 2004, and ever served as the accountant and finance manager of the branch office of Sichuan Changhong Electric Co., Ltd., the financial director of finance department, the project manager of asset management 67 Annual Report 2023 department, manager of Assets Operation Division of Assets Management Dept, deputy director and director of the Assets Management Dept.of Sichuan Changhong Electric Co., Ltd. He currently serves as the head of Capital Operation Dept.of Sichuan Changhong Electric Co., Ltd., director of ChanghongHuayi Compressor Co., Ltd., director of Sichuan Changhong New Energy Technology Co., Ltd., and the chairman of the Board of Supervisors of the Company. (11) He Xintan, male, Han nationality, was born in Xiayi, Henan in April 1980, a member of the Communist Party of China, an economist, and earned a master’s degree in management science and engineering from Xi’an Jiaotong University. He joined in work in July 2002, and successively took the posts of the operations management director of operation management department and the manager of general management office of Sichuan Changhong Electric Co., Ltd., the deputy director of development and management department of Sichuan Changhong Electric Co., Ltd., and a director of ChanghongHuayi Compressor Co., Ltd.Currently he serves as assistant to General Manager of Sichuan Changhong Electric Co., Ltd.and a supervisor of the Company. (12) Huang Hong, female, Han nationality, was born in Shehong, Sichuan in June 1970, a member of the Communist Party of China, a master degree holder, graduated from the University of Glasgow as a MBA, and a senior auditor. She joined in work in July 1992, and ever served as the financial director of finance department, the audit manager, marketing audit director, and audit chief of auditing department of Sichuan Changhong Electric Co., Ltd. He currently serves as the deputy director of auditing department and thedeputy director of labor union audit committee of Sichuan Changhong Electric Co., Ltd., and a supervisor of the Company. (13) Ji Ge, female, Han nationality, was born in Nanyang, Henan Province in January 1982, a member of the Communist Party of China, and earned a bachelor’s degree in law from Hunan University and a master’s degree from Anhui University. She joined Hefei Meiling Co., Ltd. in July 2005 and once served as the legal specialist of legal department, the sponsor of legal affairs, and the intellectual property director of the legal department of the Company. She currently serves as head of director office and risk control compliance dept and staff supervisor of the Company. (14)Sun Hongying, female, Han nationality, native of Tongcheng, Anhui, born in March 1972, member of the Communist Party of China, master degree, intermediate accountant, graduated from Hefei University of Technology with a major in accounting. She successively served as deputy director of the cost center, director of the financial department of the refrigerator business division, and deputy director of the financial management department of Changhong Meiling Co., Ltd.. She currently serves as employee supervisor and deputy director of the refrigerator and freezer division of the finance and economics department of the Company. (15) Huang Danian, male, Han nationality, was born in Huaining, Anhui in November 1969, a member of the Communist Party of China, a senior engineer, and a master degree holder. He once served as the logistics director and the deputy general manager, the director of the human resources department, the director of the comprehensive planning department, head of budget management dept. , and the assistant to the general manager of Sales Company of Hefei Meiling Co., Ltd. He is now the vice president of the 68 Annual Report 2023 Company. (16)Tang Youdao, male, Han nationality, was born in Xuancheng, Anhui in July 1970, a undergraduate degree and graduated from Wuhan University of Technology, majoring in industrial management engineering. He hold jobs successively as overseas marketing manager, head of marketing dept., head of overseas marketing dept. and general manager of overseas business division under the name of Hefei Meiling Co., Ltd. Currently vice president and general manager of overseas refrigerator/washing machine division of the Company. (17) Pang Haitao, male, Han nationality, was born in Qionghai, Hainan in May 1975, a member of the Communist Party of China, a senior accountant, a senior political engineer, and a bachelor degree holder, and earned the EMBA degree from Jiangxi University of Finance and Economics. He used to be a member of the finance department, the director of related transactions and the director of capital operations of Sichuan Changhong Electric Co., Ltd., the chief of finance office of Guangdong Changhong Electronics Co., Ltd., the director ofgeneral ledger, the head of general management office, and the head of general ledger management office of the finance department of Sichuan Changhong Electric Co., Ltd., the deputy general manager and chief financial officer of Sichuan Changhong Development Co., Ltd., the deputy general manager and chief accountant of Huayi Compressor Co., Ltd. Currently he is the chief financial officer (person in charge of finance) of the Company. (18) Li Xia,female, the Han nationality from Qionglai, Sichuan Province, was born in October 1980, Member of CPC and Intermediate Accountant with Master Degree. She graduated from Accounting Department of Sichuan University Business and Management School. She ever was Project Manager in Financing & Acquisition Office of Asset Management Department and Business Executive in Board Office of Sichuan Changhong Electronic Co., Ltd. she took the posts of Deputy GM and Financial Supervisor of Sichuan Changhong Innovation Investment Co., Ltd., and chairman of supervisory committee ofZhongkeMeiling Cryogenic Technology Co., Ltd. She is the Secretary of the Board, deputy secretary of the Party, secretary of discipline inspection commission and general counselof the Company recently. (19) Liu Hongwei, Male, Chinese American, bored in May 1963, Doctor of Applied Mechanics from Lehigh University, graduate from department of mechanical engineering, Tsinghua University. He served successively in Kulicke and Soffa Industries, Pennsylvania; Tessera Technology Corporation, Califonia; serves technical and management post in Intel Corporation in Silicon Velleg. He joints the Hefei Meiling Co., Ltd. in 2007, served as the Executive Vice President of the Company. He resigned as the Executive Vice President of the Company on May 25, 2023. On January 12, 2024, Mr. Liu Hongwei completed the retirement formalities because his retirement age was reached, and did not hold any position in the Company and its subsidiaries. 2. Post-holding in shareholder’s unit √ Applicable □ Not applicable 69 Annual Report 2023 Drawing remuneration and Start date of End date of office Name Shareholder’s unit Title allowance from office term term shareholder’s unit (Y/N) Sichuan Changhong Electric Co., Wu Dinggang Deputy GM 2023.12.29 2026.12.29 Yes Ltd. Hefei Industry Investment Holding Yong Fengshan Party Secretary, Chairman 2015.02 2024.01.19 Yes (Group) Co., Ltd. Secretary of the Board of 2023.12.29 2026.12.29 Yes Directors Chief Compliance Officer 2023.12.29 2026.12.29 No General counsel 2022.02.14 - No Director of the office of 2021.03.29 No Sichuan Changhong Electric Co., - ZhaiQilin the Board of Directors Ltd. Director of the 2023.01.09 No - management office of ESG The Minister of the 2024.01.26 No General Management - Department Post-holding in shareholder’s unit N/A 3. Post-holding in other unit √ Applicable □ Not applicable Drawing remuneration Start date of office End date of office Name Other unit Title and allowance term term from other unit (Y/N) Sichuan Zhiyijia Network Technology Co., Ltd. Chairman 2021.01.25 - No Lejiayi Chain Management Co., Ltd. Chairman 2019.04.25 - No Sichuan Kuaiyidian Electrical Service Chain Co., Chairman Wu Dinggang 2019.06.10 - No Ltd. Mianyang Kuaiyidian Electric Appliance Service Chairman 2022.11.04 - No Chain Co., Ltd. Sichuan Kuaiyidian Electric Appliance Service Zhong Ming Director 2022.03.15 - No Chain Co., Ltd. Yong Hefei Venture Capital Guidance Fund Co., Ltd. Chairman 2024.01 - Yes Fengshan Hefei Weixinnuo Technology Co., Ltd. Chairman 2022.01 - No Anhui Jianghuai Automobile Group Co., Ltd Director 2018.07.20 2025.05.30 Hefei Jiantou Capital Management Co., Ltd Chairman 2024.03 Sichuan Changhong Innovation Investment Co., Director 2021.01.21 - No Zhao Qilin Ltd. WIDEMIRACLELIMITED Director 2014.07.14 - No 70 Annual Report 2023 Ganghong Industrial Co., Ltd. Director 2013.06.18 - No SUFFICIENTVALUEGROUPLIMITED Director 2013.06.18 - No ChanghongJiahua (Hong Kong) Information Director 2021.01.08 - No Products Co., Ltd. Anjian Holdings Co., Ltd. Director 2012.01.19 - No Guangzhou Huanwang Technology Co., Ltd. Director 2022.05.23 No Changhong Jiahua Holdings Co., Ltd. Executive director 2023.03.17 - No Mianyang Changhong Technology Co., Ltd. Chairman 2023.08.15 - No Lejiayi Chain Management Co., Ltd. Director 2018.01.23 - No Sichuan Zhiyijia Network Technology Co., Ltd. Director 2019.07.25 - No Hu Zhaogui Hong Yuan Ground Energy Heat Tech. Co., Ltd. Chairman 2018.03.21 - No Sichuan TianyouGuigu Technology Co., Ltd. Director 2018.01.16 - No Chengdu Guigu Environmental Tech. Co., Ltd. Director 2018.06.30 - No Hong Yuanjia Yiluo Technology( Shanghai) Co., Ltd. CFO of Asia pacific 2014.06 - Yes Associate professor, Business School of Sichuan University 1995.02 - Yes master tutor Mou Wen Sichuan Junyi Digital Technology Co., Ltd. Independent director 2021.07.01 2024.06.30 Yes Tibet Mining Development Co., Ltd. Independent director 2021.03.09 2024.03.08 Yes Director, Professor, Zhao Gang University of Science and Technology of China 2011.04 - Yes Doctoral Supervisor Sichuan Changhong Electronics Holding Group Deputy GM 2023.12.21 2026.12.21 Yes Co., Ltd. ChanghongHuayi Compressor Co., Ltd. Director 2021.02.25 2024.05.12 No Shao Min Sichuan Changhong New Energy Technology Director 2018.05.10 2024.12.19 No Co., Ltd. Sichuan Changhong Gerun Environmental Director 2018.01.01 2025.02.09 No protection Technology Co., Ltd. He Xintan Zhongjiu Flash Medical Technology Co., Ltd Director and General 2023.03 - Yes Manager Huang Hong Sichuan Changhong Electronics Holding Group Deputy Director of Audit 2011.09.16 - Yes Co., Ltd. Department Pang Haitao Hefei Xingmei Asset Management Co., Ltd. Director 2018.02.05 - No Post-holding in other unit N/A 4. Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and senior management during the reporting period □ Applicable √ Not applicable (iii) Remuneration of directors, supervisors and senior executives 1. Decision-making, determine basis and actually payment of remuneration for directors, supervisors and senior executives (1) Procedure for deciding remunerations of directors, supervisors and senior management Implemented in line with laws, regulations and relevant rules of “Company Law”, “Article of Association” and “Enforcement Regulation of Remuneration and Evaluation Committee of the Board”, 71 Annual Report 2023 including: Allowance plan of independent directors are implemented after deliberated in the Board and approved in Shareholders’ General Meeting. Other directors and non-staff supervisors except independent directors are received no remuneration from the Company. Remuneration of senior executives are deliberated and approved by the Board according to remuneration evaluation plan together with opinions of Remuneration and Evaluation Committee. The remuneration appraisal and payment for directors and senior executive of the Company for Current Year will disclose in the Annual Report after review without objection from Remuneration & Appraisal Committee of the Board and submit to the BOD for Current Year. (2) Bases on which remunerations of directors, supervisors and senior management are decided According to the company's basic salary system, combined with the industry salary level and salary orientation, following the salary management concept of "post value reflected and performance- oriented", giving full play to the incentive function of salary, closely combining employee compensation with the company's overall performance, according to the company's performance management rules, the annual performance evaluation on the work of senior management personnel is carried out, and the performance salary is cashed according to the performance evaluation results. (3) Actual payment of remunerations of directors, supervisors and senior management Allowance of the independent directors are paid by the standards approved in Annual Shareholders’ General Meeting, other director, who serves as senior executive at the same time, and non-staff supervisors except independent directors did not received remuneration from the Company; remunerations for senior executives of the Company are paid strictly by the unify remuneration valuation mechanism of the Company. Directors, supervisors and senior executives of the Company has 19 in total up to 31 December 2023, actually 13 person receiving remuneration from the Company, 2 staff supervisors are received their remuneration by actual positions (non-supervisor post); furthermore, 3 independent directors are received the allowance monthly from the Company; the Company will pay remuneration to senior executives in line with the performance appraisal by monthly, quarterly and annual. During the reporting period, the Company has established the executive compensation and performance management program for the senior management of 2022 in accordance with the main scope, the responsibilities, the importance of the management positions of the senior management, and the compensation level of other relevant company and position, the program includes but not limited to the company's key performance indicator (KPI) and performance evaluation criteria, procedures and major evaluation system; the major programs of the reward and punishment; review the performance of duties of the company's senior management and conduct the annual performance appraisal. 2. Remuneration for directors, supervisors and senior executives in reporting period In RMB 10,000 Name Title Sex Age Post status Total Whether 72 Annual Report 2023 remuneration remuneration obtained from the obtained from Company (before related party of taxes) the Company Wu Dinggang Chairman Male 51 In Office 0 Yes Zhong Ming Director, President Male 51 In Office 140.10 No Zhao Qilin Director Male 48 In Office 0 Yes Yong Fengshan Director Male 55 In Office 0 Yes Hong yuanjia Independent director Male 48 In Office 11.9 No Mou Wen Independent director Female 57 In Office 11.9 No Zhao Gang Independent director Male 45 In Office 11.9 No Kou Huameng Director, Deputy president Male 54 In Office 83.25 No Hu Zhaogui Director, Deputy president Male 50 In Office 155.12 No Shao Min Chairman of Supervisory Male 41 In Office 0 Yes He Xintan Supervisor Male 43 In Office 0 Yes Huang Hong Supervisor Female 53 In Office 0 Yes Ji Ge Staff supervisor Female 42 In Office 47.98 No Sun Hongying Staff supervisor Female 52 In Office 49.05 No Huang Danian Deputy president Male 54 In Office 92.49 No Tang Youdao Deputy president Male 53 In Office 90.88 No CFO (person in charge of 48 No Pang Haitao Male In Office 93.78 finance) Li Xia Secretary of the Board Female 43 In Office 85.22 No Liu Hongwei Executive Deputy president Male 60 Dimission 20.19 No Total -- -- -- -- 893.76 -- OtherNote □Applicable √Not applicable VI. Responsibility performance of directors during the reporting period (i) The board of directors during the reporting period Session of Date of meeting Disclosure date Meeting resolutions meeting The Board of Directors reviewed and approved three proposals, namely, Proposal on the The 30th Company's Participation in the Establishment of Sichuan Hongyun Information session of January 16,2023 Janupary 18,2023 Technology Venture Capital Fund and Related Transactions, Proposal on the Bad Debt 10thBOD Provision Accrued Individually for Receivables of Changhong RUBA Electric Appliance Co., Ltd. and Proposal on the Bad Debt Provision Accrued Individually for 73 Annual Report 2023 Single Receivable of Gome System,for details, please refer to the "Resolution Notice of the 30th session of 10thBOD" (No. 2023-002) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The Board of Directors reviewed and approved 21 proposals, including the Work Report The 31st of the Board of Directors in 2022, the Work Report of the President in 2022, the Annual session of March 30,2023 March 31,2023 Report and Summary of Annual Report in 2022,for details, please refer to the 10thBOD "Resolution Notice of the 31st session of 10thBOD" (No. 2023-011) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The Board of Directors reviewed and approved 14 proposals, including the Report on The 32nd the First Quarter of 2023, the Proposal on Provision for Credit Impairment and the session of April 19,2023 April 20,2023 Proposal on Provision for Asset Impairment,for details, please refer to the "Resolution 10thBOD Notice of the 32nd session of 10thBOD" (No. 2023-023) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The Board of Directors reviewed and approved 11 proposals, including the Full Text and The 33rd Summary of the Semi-annual Report in 2023, the Proposal on Provision for Credit session of August 16,2023 August 18,2023 Impairment and Proposal on Provision for Asset Impairment,for details, please refer to 10thBOD the "Resolution Notice of the 33rd session of 10thBOD" (No. 2023-040) on the cninfo website (Juchao Website (www.cninfo.com.cn)). he Board of Directors reviewed and approved 4 proposals, including the Proposal on Extension and Related Transactions of Sichuan Hongyun New Generation of The 34th Information Technology Venture Capital Fund Partnership (Limited Partnership) and the session of September 7,2023 September 8,2023 Proposal on Increasing the Daily Related Transactions in 2023,for details, please refer 10thBOD to the "Resolution Notice of the 34th session of 10thBOD" (No. 2023-044) on the cninfo website (Juchao Website (www.cninfo.com.cn)). he Board of Directors reviewed and approved 17 proposals, including the Proposal on Renewing the Financial Services Agreement and Related Transactions between the The 35th Company and Sichuan Changhong Group Finance Co., Ltd. and the Proposal on session of October 16,2023 October 18,2023 Continuous Risk Assessment of Sichuan Changhong Group Finance Co., Ltd.,for 10thBOD details, please refer to the "Resolution Notice of the 35 th session of 10thBOD" (No. 2023- 052) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The Board of Directors reviewed and approved 5 proposals, including the Report on the The 36th Third Quarter of 2023, the Proposal on Provision for Credit Impairment and the session of October 23,2023 October 24,2023 Proposal on Provision for Asset Impairment,for details, please refer to the "Resolution 10thBOD Notice of the 36th session of 10thBOD" (No. 2023-060) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The Board of Directors reviewed and approved 19 proposals, including the Proposal on Predicting Daily Related Transactions in 2024 and the Proposal on Predicting The 37th Continuous Related Transactions between the Company and Its Subsidiaries and session of December 4,2023 December 5,2023 Sichuan Changhong Group Finance Co., Ltd. in 2024,for details, please refer to the 10thBOD "Resolution Notice of the 37th session of 10thBOD" (No. 2023-066) on the cninfo website (Juchao Website (www.cninfo.com.cn)). The 38th The Board of Directors reviewed and approved 2 proposals, namely, the Proposal on December 18,2023 December 19,2023 session of Increasing the Daily Related Party Transactions in 2023 and the Proposal on 74 Annual Report 2023 10thBOD Formulating the Company's Work System for the Secretary of the Board of Directors, for details, please refer to the "Resolution Notice of the 38 th session of 10thBOD" (No. 2023-077) on the cninfo website (Juchao Website (www.cninfo.com.cn)). (ii) The attending of directors to Board meetings and shareholders general meeting The attending of directors Times of Times of Board Times of Times of Times of Absent the Meeting for attending the meeting supposed Times of Director present in attending by entrusted the second time in a row shareholder to attend in the Absence person communication presence (Y/N) general report period meeting Wu Dinggang 10 2 8 0 0 No 3 Zhong Ming 10 1 9 0 0 No 3 Yong 10 0 10 0 0 No 0 Fengshan Kou 10 1 9 0 0 No 4 Huameng Zhao Qilin 10 2 8 0 0 No 3 Hu Zhaogui 10 1 9 0 0 No 3 Hong yuanjia 10 2 8 0 0 No 3 Mou Wen 10 2 8 0 0 No 3 Zhao Gang 10 1 9 0 0 No 3 Explanation of absent the Board Meeting for the second time in a row During the reporting period, none of the directors failed to attend two consecutive Board Meeting in person. (iii) Objection for relevant events from directors Whether directors come up with objection about company’s relevant matters or not □ Yes √ No Directors has no objections for relevant events in reporting period (iv) Other explanation about responsibility performance of directors Whether the opinions from directors have been adopted or not √ Yes □ No During the reporting period, the directors of the company strictly followed the Company Law, the Securities Law, the Listing Rules of Shenzhen Stock Exchange, and the Self-Discipline Supervision Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1 - Standardized Operation of Main Board Listed Companies" and other laws and regulations, actively attended the company's board meetings and the company's general meeting of shareholders, performed duties conscientiously and diligently, made prudent and scientific decisions on various matters reviewed by the company's board meetings, and all their professional suggestions on the company’s major decisions have been adopted . 75 Annual Report 2023 VII. The special committees under the board during the reporting period Specific Number Other circumstanc Committ of Important comments and perform Members Meeting content es of the ee name meetings Date of meeting suggestions made ance of objection (if held duties applicable) The reviewed 1 proposals, namely, Proposal on the Company's Participation in Wu Dinggang, The proposal was deliberated and Not the Establishment of Zhong Ming, January 13,2023 passed and agreed to be submitted applicab No Sichuan Hongyun Yong to the board of directors of t le Strategy Information Technology Fengshan, Kou Committ 2 Venture Capital Fund and Huameng, ee Related Transactions Zhao Qilin, Hu t reviewed and approved a Zhaogui, Zhao total of one proposal, The proposal was deliberated and Not Gang March 19,2022 namely the Proposal on the passed and agreed to be submitted applicab No Company's Development to the board of directors of t le Plan in 2023 Two proposals were deliberated, namely, the Company's 2022 Financial Accounting Statement and Not All proposals were deliberated and January 12,2023 Internal Control Audit applicab No passed. Schedule and the le Company's 2022 Unaudited Financial Accounting Statement. A total of 1 proposal was deliberated, namely the Audit Hong Yuanjia, Not First Draft of the Audit of The proposal were deliberated and Committ Mou Wen, 7 March 6,2023 applicab No the Company's Financial passed ee Zhao Gang le Accounting Statements in 2022. Five proposals were All the proposals were deliberated deliberated, namely the and passed, and four proposals were Audited Financial agreed to be submitted to the Board Accounting Report of the of Directors for deliberation, Not March 30,2023 Company in 2022, Audit namely, the Audited Financial applicab No Report on Internal Control Accounting Report of the Company le in 2021, Summary Report in 2022, Audit Report on Internal on the Company Audit Control in 2022, the Proposal on Work by ShineWing Renewing the Appointment of the 76 Annual Report 2023 Certified Public Financial Report, Internal Control Accountants in 2022, Auditing Organization and Payment Proposal on Renewing the of Remuneration in 2023 and Appointment of the Proposal on the Company's Forward Financial Report, Internal Foreign Exchange Fund Trading Control Auditing Business. Organization and Payment of Remuneration in 2023, and Proposal on the Company's Forward Foreign Exchange Fund Trading Business. A total of 2 proposal was deliberated, namely the The proposal was deliberated and Not April 17,2023 Financial Statement of the passed and agreed to be submitted applicab No Company for the First to the board of directors of t le Quarter of 2023. A total of 1 proposal was deliberated, namely the The proposal was deliberated and Not August 6,2023 Semi-annual Financial passed and agreed to be submitted applicab No Report of the Company in to the board of directors of t le 2023 A total of 1 proposal was deliberated, namely the The proposal was deliberated and Not October 20,2023 Financial Statement of the passed and agreed to be submitted applicab No Company for the Third to the board of directors of t le Quarter of 2023 It reviewed and approved a total of one proposal, namely, the Proposal on the Not Company's Selection and The proposal were deliberated and December 28,2023 applicab No Recruitment of Audit passed le Service Accounting Firm for Annual Report from 2024 to 2026. Remuner It deliberated and passed the It deliberated the ation and Wu Dinggang, remuneration assessment of March remuneration assessment Not Appraisa Zhao Gang, directors and senior management 2 19,2023,December and payment of directors applicab No l Mou Wen, personnel and agreed to submit it to 25,2023 and senior management of le Committ Hong Yuanjia the Board of Directors of the the company in 2022. ee company for deliberation. 77 Annual Report 2023 A total of 2 proposal was deliberated, "Proposal on Expecting Dai ly Related Transactions in 2 The proposal was deliberated and Not 024", "Proposal on Expecti Special December 1,2023 passed and agreed to be submitted applicab No ng Continued Related Tran meetings to the board of directors of t le Hong Yuanjia, sactions between the Comp of Mou Wen, 2 any and its Subsidiaries and independ Zhao Gang Sichuan Changhong Group ent Finance Co., Ltd. directors A total of 1 proposal was deliberate ,Proposal on The proposal was deliberated and Not December 15,2023 Increasing the Daily passed and agreed to be submitted applicab No Related Party Transactions to the board of directors of t le in 2023 VIII. Works from Supervisory Committee Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee □Yes √ No Supervisory committee has no objection about supervision events in reporting period IX. Staff of the Company (i) Numbers, professional structure and education background On-job employee in parent company at period-end (people) 4,898 On-job employee in main subsidiary at period-end(people) 11,251 Total on-job employees at period-end(people) 16,149 Current total payroll(people) 16,149 Number of retired employees with expenses paid by the parent company and main subsidiary (people) 81 Professional structure Types of professional category Numbers of professional category (people) Production staff 8,989 Salesman 4,495 Technician 1,795 Financial staff 295 Administration staff 575 Total 16,149 Education background Type of education background Numbers (people) High school and below 10,979 Junior college 2,190 Undergraduate 2,792 78 Annual Report 2023 Master and above 188 Total 16,149 (ii) Remuneration policy The Company formulated human resources and compensation policy conducive to sustainable development of enterprise according to the provisions of relevant laws and policies promulgated by the state and to the Company's actual situation. The company continued to promote the performance growth index system , defined the direction of employee performance growth and progress, effectively encouraged employees to take the initiative to find gaps and fill shortcomings, and continuously improved their professional ability and work efficiency. At the same time, based on the growth level of employees, it has established a remuneration mechanism that is suitable for it, and optimized the post value evaluation and remuneration adjustment mechanism to enhance the internal fairness and external competitiveness of the company's remuneration and strengthen the salary concept of "post value reflected and performance-oriented". In order to promote the achievement of each unit's performance, this year, the company will further optimize and adjust the incentive system, strengthen the quantitative embodiment of operating results and incremental value, and design differentiated incentive schemes according to the characteristics of different business units with consideration of system balance, so as to realize the effectiveness of positive guidance and effectively stimulate the business vitality of each business unit. During the reporting period, the company further optimized the position promotion evaluation and employment mechanism, improved the position system and the promotion channels in sequence, and further stimulated the team's vitality through the integrating system evaluation and employment, performance growth system and other mechanisms, and matched the dynamic adjustment of remuneration; continued to promote the application of performance management in the whole process, optimized the application of performance communication and feedback information methods, strengthened the application of performance results in cadre promotion and demotion, talent selection, salary adjustment and year-end evaluation, and encouraged employees to develop together with the company. (iii) Training plans The company aimed at creating a learning organization, continuously optimized training and talent development, and built talent standards and competency models of each sequence based on the company's annual talent development and training program; built Meiling online learning system and knowledge asset management system to extract and precipitate internal experience and ability; organized the implementation of internal and external special precision training programs; carried out projects such as learning map and talent structure optimization, and gradually formed a growth mechanism that combined training with employee growth and career development. 1. Further develop the mechanism of selecting, educating, using and retaining reserve talents. The company has established a clear talent standard evaluation model to complete the talent standards for management positions, supervisor-level positions and various professional positions in all sequences; 79 Annual Report 2023 established a succession map of talents in key positions in each sequence, and clarified the current situation of the existing talent team and the succession system of different types of talents in the future. The company focused on optimizing the echelon structure of the "Yongquan Plan" talent reserve, and optimized and adjusted the echelon structure of middle and senior reserve cadres, A-class reserve successors, A-class reserve learning, B-class reserve supervisors, excellent college students and other talents through the selection of young reserve cadres who were born after 1990 and the regular review and evaluation of reserve talents in the library. At the same time, based on the needs of future business development, it reserved talents appropriately in advance to realize dynamic management of talents. 2. Accurate training, to improve the training effect. Based on the needs of business development, it has built a multi-level and multi-category talent training system. On the one hand, it improved the training enthusiasm and professional ability of the trainees through activities such as project integrating system and industry exchange; on the other hand, it introduced external training courses and internal course development to effectively promote the precision training program in view of the common shortcomings of the team and shortcomings of personal ability; According to the professional ability of key positions in the professional level, it built a learning map and defined the map of growing professional routes; At the same time, it established the training organization guarantee system, and built the company's classified and graded talent training system. Through career planning analysis, course orientation promotion, node control, project review, training examination and other ways, it guided the vertical (promotion) and horizontal (multi-skilled workers, rotation) all-round development effectively, and achieved the training effect and talent promotion gradually. 3. Enrich the company's internal knowledge asset management system, redefine the company's intellectual assets standards and organizational guarantee system. On the one hand, it continued to supplement and update the teaching materials of Meiling's knowledge assets library on technology, management, manufacturing, quality, safety and environmental protection; On the basis of "internal trainer certification system" and "benchmarking post knowledge extraction project", optimized the professional series of live courses, internalized the company's standard talent knowledge base and carried on the inheritance and influence; On the other hand, it carried out the learning map project, and designed the learning map through the process, structure, finance and other sequences, so as to closely connect the qualifications of specific positions with the learning map, and to combine the talent development with the learning development organically, and to promote the scientific, systematic and efficient training of professionals in each sequence position of the company. (iv) Labor outsourcing □ Applicable √ Not applicable X. Profit distribution plan and capitalizing of common reserves plan (i) Formulation, Implementation and Adjustment of Profit Distribution Policy Especially Cash Dividend policy during the Reporting Period √ Applicable □ Not applicable During the reporting period, the company has strictly executed the profit distribution policy in 80 Annual Report 2023 accordance with the "Articles of Association", the formulation and implementation of the company's cash dividend policy are in line with the provisions of "Articles of Association" and the requirements of the resolutions of shareholders' meeting, the dividends standards and proportion have been definite and clear, relevant decision-making procedures and mechanisms have been complete, the responsibilities of independent directors have been clear and have played its due role, minority shareholders have had the opportunities to fully express their views and aspirations, and the legitimate interests of minority shareholders have been maintained. During the reporting period, the company implemented the annual profit distribution plan for 2022, that is, based on the total share capital of 1,029,923,715 shares on date of record at the time of implementing the 2022 annual equity distribution plan (including 881,733,881 shares of A shares and 148,189,834 shares of B shares), the company distributed a cash dividend of RMB 0.9 (including tax) for every 10 shares to all shareholders, with a total cash dividend of RMB 92,693,134.35. Special explanation on cash dividend policy Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): Y Well-defined and clearly dividend standards and proportion (Y/N): Y Completed relevant decision-making process and mechanism (Y/N): Y Independent directors perform duties completely and play a proper role (Y/N): Y If the company does not distribute cash dividends, specific reasons should be disclosed, as well as the Not applicable next steps to be taken to enhance investor returns: Minority shareholders have opportunity to express opinions and demands totally and their legal rights Y are fully protected (Y/N): Condition and procedures are compliance and transparent while the cash bonus policy adjusted or Y changed (Y/N): (ii) The Company is profitable during the reporting period and the parent company has positive profit available for distribution to shareholders without cash dividend distribution plan proposed □ Applicable √ Not applicable (iii) Profit distribution plan and capitalizing of common reserves plan for the Period √ Applicable □ Not applicable Bonus shares for every 10-share (Share) 0 Dividends for every 10-share (RMB) (Tax included) 3 Shares added for every 10-share base (Share) 0 Equity base of distribution plan (Share) 1,029,923,715 Total cash dividend (RMB) (Tax included) 308,977,114.50 Cash dividend for other ways (i.e. repurchased) (RMB) 0 Total cash dividend (including other way) (RMB) 308,977,114.50 Profits available for distribution (RMB) 1,294,109,238.10 81 Annual Report 2023 Ratio of cash dividend (including other way) in total profit 100% distribution Cash dividend Taking the total share capital of 1,029,923,715shares on the equity registration date of the company’s on December 31, 2023 as the base, distribute cash dividends of 3 yuan (tax included) for every 10 shares to all shareholders, not giving bonus shares, and not converting capital reserve in to equity. Detail explanation on profit distribution or capitalization from capital public reserve According to the audit by ShineWing Certified Public Accountants (Special General Partnership), in 2023, the net profit realized in individual financial statements of the parent company was RMB 358,345,033.36. As of December 31, 2023, the cumulative undistributed profit in individual financial statements of the parent company was RMB 1,294,109,238.10. In addition, in the consolidated financial statements of the company for the year 2023, the net profit attributable to the owners of the parent company was 741,038,108.54 yuan. As of December 31, 2023, the cumulative undistributed profit in the consolidated financial statements was 1,521,759,836.64 yuan. According to relevant regulations, the distribution of company profits should be based on the profits available for distribution by the parent company, and follow the principle of distributing the lower of the cumulative undistributed profits in the consolidated financial statements and the parent company's financial statements. Therefore, the distributable profit for 2023 is the accumulated undistributed profit of RMB 1,294,109,238.10 in individual financial statements of the parent company. According to relevant regulations and the Company's Articles of Association, taking into account the interests of shareholders and the long-term development needs of the company, it is proposed that the company distribute a cash dividend of 3 yuan (including tax) for every 10 shares to all shareholders based on the total share capital of 1,029,923,715 shares as of December 31, 2023, without bonus shares or conversion of reserve funds into share capital. It is expected to distribute a cash dividend of 30,897,714.50 yuan. After this distribution, it is expected that the remaining cumulative undistributed profit of the parent company will be 985,132,123.60 yuan, and the remaining undistributed profit will be carried forward for distribution in future years.. XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or other employee incentives □ Applicable √ Not applicable The Company has no equity incentive plan, employee stock ownership plans or other employee incentives. XII. Construction and implementation of internal control system during the reporting period (i) Construction and implementation of internal control In accordance with the Basic Norms for Enterprise Internal Control and its supporting guidelines, and the Information Disclosure Compilation Rules for Companies Publicly Issuing Securities No. 21 - General Provisions on Annual Internal Control Evaluation Reports jointly issued by the China Securities Regulatory Commission and the Ministry of Finance and other relevant regulations, and combined with the Company's internal control system and internal control evaluation methods, the company organized its internal control work, effectively implemented internal control, and continuously improved and optimized the company's internal control system so as to adapt to the needs and changes of the internal and external environment. The company's 2023 Annual Internal Control Self-Assessment Report fully, truly and accurately reflected the actual situation of the company's internal control. The units, businesses and matters included in the assessment scope, as well as high-risk areas, covered the main aspects of the company's 82 Annual Report 2023 operation and management, and the company maintained effective internal controls in high-risk areas and in all material aspects. During the reporting period, the company had no major defects and significant defects in internal control. (ii) Details of major defects in IC appraisal report that found in reporting period □Yes √ No XIII. Management and controls on the subsidiary during reporting period Name of Integration Integration Problems encountered Resolve Follow-up Actions taken company plan progress in integration progress resolution plan Not - - - - - - applicable XIV. Internal control self-assessment report or internal control audit report (i) Appraisal Report of Internal Control Date of evaluation report of internal control disclosed (Full-text) March 30,2024 Index of evaluation report of internal control disclosed (Full-text) (www.cninfo.com.cn) The ratio of the total assets of units included in the scope of evaluation 99.89% accounting for the total assets on the company's consolidated financial statements The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the company's consolidated financial 100.00% statements Defects Evaluation Standards Category Financial Reports Non-financial Reports 1. Material defect: severally or jointly with other defects, will lead to material wrong reporting in financial reports being not able to Occurrence of the followings shall be prevented or found or rectified in a timely manner. Occurrence of the deemed as material defect, otherwise as followings will be deemed as material defect: major defect or general defect subject to 1. inefficiency of environment control; the level of influence. 2. fraud of directors, supervisors and senior management; 1. breach of national laws, regulations or 3. The external auditor finds material wrong reporting in current regulatory documents; financial statement, while the Company has not found such reporting 2. procedure for making significant during its operation; decisions is not scientific; Qualitative 4. The material defect identified and reported to the management fails 3. absence of system may lead to invalid criteria to be rectified in a reasonable time period; system; 5. The audit committee and audit department of the Company exercise 4. Material or major defects are not likely invalid supervision upon internal control; to rectify; 6. Other defects which may affect financial statement users to make 5. Large negative effects on the company correct judgment. and disclosed in the form of 2. Major defect: severally or jointly with other defects, will lead to announcement; wrong reporting in financial reports being not able to prevented or 6. Other issues that materially affect the found or rectified in a timely manner which still needs attention from Company. the management though it doesn’t reach or exceed material defect as 83 Annual Report 2023 described above. Occurrence of the followings will be deemed as major defect: (1) Financial losses caused by guaranteeing and investing in securities and financial derivatives transactions and disposing property right and stock right without authorization; (2) The company's financial staff or other relevant business personnel have unclear powers and responsibilities or job chaos, or are suspected of being involved in economic or job-related crimes and have been transferred to the judiciary; (3) Punishment or severely negative impacts on the company's image due to the bias implementation of the policy or accounting errors, etc.; (4) Financial losses caused by destroying, concealing, or altering the important original evidences at will, such as invoices and checks, etc. (5) Cash income is not entered into the account book, or public funds are deposited in private account or "private coffer" is established by breaking the rules. 3. General defect: other internal control related defects that do not constitute material defects or major defect. 1. Proportion of direct property loss in total operating income: Material defect: wrong reporting ≧0.1%; Major defect: 0.05% ≤ wrong reporting<0.1%; General 1. Proportion of potential wrong reporting in total operating defect: wrong reporting<0.05%. income: Material defect: wrong reporting ≧0.5%; Major defect: 0.1% 2. Proportion of direct property loss in ≤ wrong reporting<0.5%; General defect: wrong reporting<0.1%. total profit: Material defect: wrong 2. Proportion of potential wrong reporting in total profit: Material reporting ≧10%; Major defect: 5% ≤ defect: wrong reporting ≧10%; Major defect: 5% ≤ wrong reporting wrong reporting<10%; General defect: Quantitative <10%; General defect: wrong reporting<5%. wrong reporting<5%. standard 3. Proportion of potential wrong reporting in total assets: Material 3. Proportion of direct property loss in defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong reporting total assets: Material defect: wrong <0.5%; General defect: wrong reporting<0.1%. reporting ≧0.2%; Major defect: 0.1% ≤ 4. Proportion of potential wrong reporting in total owners’ wrong reporting<0.2%; General defect: equity: Material defect: wrong reporting ≧0.5%; Major defect: 0.1% wrong reporting<0.1%. ≤ wrong reporting<0.5%; General defect: wrong reporting<0.1%. 4. Proportion of direct property loss in total owners’ equity: Material defect: wrong reporting ≧0.2%; Major defect: 0.1% ≤ wrong reporting<0.2%; General defect: wrong reporting<0.1%. Amount of significant defects in 0 financial reports Amount of significant defects in non- 0 84 Annual Report 2023 financial reports Amount of important defects in financial 0 reports Amount of important defects in non- 0 financial reports (ii) Auditing report of internal control √ Applicable □ Not applicable Deliberation section of auditing report of IC We consider that: in all major aspects, Changhong Meiling Co., Ltd. has efficiency in financial report of internal control dated 31 December 2023 according to Basic Standards of Internal Control for Enterprise and relevant regulations. Disclosure details of audit report of internal control Disclosed Disclosure details of audit report of internal control March 30,2024 Disclosure date of audit report of internal control (full-text) Juchao Website(www.cninfo.com.cn) Index of audit report of internal control (full-text) Standard unqualified Opinion type of auditing report of IC No Whether CPA carries out qualified opinion for audit report of internal control or not □Yes √ No Whether the opinions are consistent in audit report of internal control carrying out by CPA and the self- evaluation report of the Board or not √ Yes □ No XV. The rectification of self-examination problems in the special actions on governance of listed companies √Yes□No For details, please refer to Article 15 of Chapter IV "Rectification of Problems Found in Self-inspection of Special Actions for Governance of Listed Companies" in the Company's Annual Report in 2022. Up to now, the problems found in the Company's self-inspection have not been fully rectified as follows: (i) Subsidiary holding shares of listed companies and the rectification 1. Meiling Group, a wholly-owned subsidiary of the company, held 1,141,053 restricted shares of the Company. The restricted shares held by Meiling Group were the consideration shares received for the share reform on behalf of other non-tradable shareholders in the company's reform plan for non-tradable shares. In March 2016, according to the approval of the State-owned Assets Supervision and Administration Commission of the State Council, the 49,477,513 state-owned shares (including the already held 47,823,401 shares and the unrecovered relevant rights of the consideration of 1,654,112 shares received for the share reform on behalf of other non-tradable shareholders in the company's reform plan for non-tradable shares) of the Company held by Hefei Xingtai Holdings Group Co., Ltd., the company's original shareholder, should be transferred to Industry Investment Group free of charge. Therefore, the restricted shares of the Company held by Meiling Group should be transferred to Industry Investment Group free of charge. 85 Annual Report 2023 2. According to the approval of the State-owned Assets Supervision and Administration Commission of the State Council and the regulations of relevant departments, Meiling Group should transfer the shares paid on behalf of others and related rights held by it to Industry Investment Group at one time free of charge after recovering all the 1,654,112 shares of consideration for the share reform. At present, Meiling Group has only recovered 1,141,053 shares, and the holders of the remaining consideration shares for the share reform have been unable to get in touch for many times and for many years, there is great uncertainty about the time when all the shares will be recovered. However, the company still actively promotes the recovery of the shares advanced by Meiling Group, and handles the relevant procedures for free transfer as soon as possible after all the consideration shares for the share reform are recovered. Prior to this, the company's restricted shares held by Meiling Group would not enjoy any rights as shareholders during the holding period, including voting rights, dividend rights, etc. 86 Annual Report 2023 V. Environmental & Social Responsibility I. Major environmental The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department √ Yes □ No The Company and subordinate subsidiaries Changhong Air-conditioning are not belongs to the key emission units announced by the authority of environmental protection. 1. Policies and industry standards related to environmental protection In their daily production and operation, the Company and its subsidiaries strictly abide by the requirements in the Environmental Protection Law of the People's Republic of China, Environmental Impact Assessment Law of the People's Republic of China, Law on Prevention and Control of Water Pollution of the People's Republic of China, Law on the Prevention and Control of Atmospheric Pollution of the People's Republic of China, Law on Prevention and Control of Environmental Pollution by Solid Waste of the People's Republic of China, Regulations on the Administration of Construction Project Environmental Protection, Environmental Protection Regulations of Anhui Province, Regulations on Preventionand Control of Environmental Pollution by Solid Waste in Sichuan Province, and other relevant laws and regulations. During the reporting period, Changhong Air Conditioning, a subsidiary of the Company, carried out self-monitoring according to regulations, in which for VOCs, refer to Table 3 of Emission Standard for Atmospheric Volatile Organic Compounds from Stationary Pollution Sources in Sichuan Province DB51/2377-2017; For nitrogen oxides, refer to the secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-1996); For sulfur-containing compounds, refer to the standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-1996). For dust, refer to the secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-1996). 2. Environmental protection administrative license The Company and its subsidiaries conscientiously implement the Environmental Protection Law, the Environmental Impact Assessment Law and the Regulations on the Administration of Construction Project Environmental Protection, and consciously abide by environmental protection laws and regulations, industry requirements and government regulations at all levels. For new construction, renovation and expansion projects, the Company and its subsidiaries adhere to the system of project environmental assessment and "three simultaneities", fully implement environmental protection measures, well ensure environmental protection management in all aspects of project planning, design, construction and operation, and make full use of advanced technology and scientific and technological means to lower and reduce environmental pollution. It carries out environmental impact assessment simultaneously in the feasibility study and demonstration stage of the construction project, and entrusts the third- party professional organization to analyze the feasibility of the industrial policy, land use planning, environmental impact and environmental protection measures of the project. The construction starts upon the approval of the competent environmental protection department. During the construction of the project, it carefully implements the environmental protection requirements, and builds the environmental protection facilities simultaneously. After the completion, the environmental protection acceptance of the project is organized in time to ensure that the project 87 Annual Report 2023 meets the acceptance criteria and meets the requirements of environmental assessment before it is officially put into use. During the operation period, it carries out pollution prevention and control actively in strict accordance with the environmental impact assessment documents of the project and the approval requirements of the competent environmental protection department to ensure the normal operation of environmental protection facilities. The Company and subordinate subsidiaries Changhong Air-conditioning ,The sewage discharge permit was applied on March 31, 2020 and is valid until May 12, 2025. 3.Industrial emission standard and specific conditions of pollutant emissions involved in production and operation activities Main W num Main polluta ay ber Dischar Comp pollutant nt and of of Total ge any or Total discharge and specifi di disc Distribution of concentration Pollutants discharge discharg beyond subsid volume specific c sc harg discharge outlets of discharge standards enacted e the iary certified pollutant polluta ha e volume standard name type nt rg outl s name e ets Two outlets in Standard in Table 3 of Sichuan Or Workshop J05 and Emission Standard for Changhong Air ga Sichuan one outlet in Atmospheric Volatile Conditioning ni Changho Workshop J07, Organic Compounds from Co., Ltd. has ze Not ng Air- No.128 Sanjiang Stationary Pollution completed the VOCs d 3 ≤25.3mg/m3 4494kg exceede condition Avenue, Sources in Sichuan pollutant e d ing Co., Economic Province (DB51/2377- discharge mi Ltd. Development 2017), that is the volatile registration of ssi Zone, Mianyang organic compounds shall the national on Sichua City be <60 mg/m3. pollutant n Two outlets in discharge Chang Workshop J05 and permit hong one outlet in management Air- Workshop J07, information Or condit No.128 Sanjiang platform and ga Secondary standard in ioning Avenue, obtained the ni Table 2 of Comprehensive Co., Economic registration ze Emission Standard for Air Ltd. Development receipt Not Oxynitrid Oxynit d Pollutants (GB16297- 2 Zone, Mianyang ≤3mg/m3 722kg according to exceede e ride e 1996), that is, the City the d mi concentration of nitrogen Two outlets in requirements ssi oxides shall be <240 Workshop J05, of relevant on mg/m3 No.128 Sanjiang laws and Avenue, regulations, Economic such as Development Measures for Zone, Mianyang the 88 Annual Report 2023 City (the same Administration outlet as of Pollutant J05VOC). Discharge Or Permits (trial), ga Catalogue of Secondary standard in ni Classified Table 2 of Comprehensive Sulphu ze Management Not Sulfocom Emission Standard for Air r d 2 <4mg/m3 768kg of Pollutant exceede pound Pollutants (GB16297- dioxide e Discharge d 1996),that is mi Permit of SO2<550mg/m ssi Stationary on Pollution Sources (2019 Two outlets in Edition), etc. Or Workshop J05 and There was no ga one outlet in Secondary standard in requirement ni Workshop J07, Table 2 of Comprehensive for the total ze No.128 Sanjiang Not Particu Emission Standard for Air amount of Dust d 4 Avenue, ≤2.6mg/m3 768kg exceede late Pollutants (GB16297-that pollutant e Economic d matter is Particulate matter< discharge of mi Development 120mg/m the Company ssi Zone, Mianyang in the pollutant on City discharge registration. 4. Treatment of pollutants Zhongshan Changhong, a subsidiary company, treats pollutants in accordance with relevant laws and regulations on environmental protection, and disposes of them according to disposal requirements after they reach the relevant standards. (1) Waste gas Changhong Air Conditioning has established a refined waste gas treatment system, and 4 sets of waste gas treatment facilities for wave-welding waste gas, and adopted the treatment process of "dry interception filter + UV photolysis purifier", to achieve organized discharge up to the standard through the 20m-high exhaust funnel at the top of the workshop. It has established 3 sets of waste gas treatment facilities for the welding waste gas of the two devices, and adopted the treatment process of "pulse filter cartridge dust removal equipment + UV composite photocatalysis", to achieve organized discharge up to the standard through the 18m-high exhaust funnel at the top of the workshop; It has established 2 sets of waste gas treatment facilities for the three-proof coating waste gas, and adopted the treatment process of "dry interception filter+ activated carbon adsorption", to achieve organized discharge up the standard through the 20m-high exhaust funnel at the top of the workshop; It has established 4 sets of waste gas treatment facilities for degreasing waste gas, and adopted the treatment process of "spray tower + drying defogging box + UV composite photocatalysis + activated carbon adsorption", to achieve the organized discharge up to the standard through the 18m-high exhaust funnel at the top of the workshop. 89 Annual Report 2023 (2) Hazardous waste Changhong Air Conditioning has built special storage facilities for hazardous wastes, with floor made of nonflammable epoxy mortar, anti-leakage ditch and collection tank, which can effectively prevent the leakage risk of hazardous wastes and meet the current storage requirements of hazardous wastes. At the same time, it regularly entrusts all kinds of hazardous wastes to units with qualifications for hazardous waste disposal for standardized and centralized harmless disposal. 5. Independent plan to monitor environment The Company and its subsidiaries have established regular monitoring plan for environmental pollutants, set up special funds for pollutants monitoring, and engaged third-party authoritative to regularly monitor the operation of major pollution-production links and environmental protection treatment facilities in connection with the major pollutants produced by the Company and its subsidiaries, to make sure that the Company and its subsidiaries could achieve emission standards in a full round. 6. Emergency plan for environmental emergencies The Company and its subsidiaries have set up related emergency plans for environmental emergencies. The Company and its subsidiaries have determined classified warning based on the different extent and severity of environmental impacts that may be caused by the material environmental factors, defined the responsibilities for emergency response, regulated emergency handling procedures, established special team to handle emergencies and organized regular rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness of these plans, improve their capability of emergency handling and take precautions against contingent emergencies. 7. Investment in environmental governance and protection and the relevant payment of environmental protection tax The company's investment in environmental protection mainly includes the investment in the construction of environmental protection facilities, that is, the investment in purchasing and installing fixed assets such as environmental protection facilities and equipment, as well as the operation and maintenance expenses of environmental protection facilities, environmental protection tax, and third-party outsourcing testing. 8.Measures taken to reduce carbon emissions and their effectiveness during the reporting period √Applicable □ Not applicable Combining the characteristics and special requirements of carbon emissions, the company strengthens the energy management of each production unit, improves the internal energy management and energy efficiency index assessment and energy consumption evaluation system, continues to carry out energy measurement and evaluation, follows the principles of system management, and establishes a complete and effective management system. During the reporting period, the company vigorously promoted and applied the industry's advanced energy-saving equipment and technologies, and carried out energy-saving technical transformation; carried out energy-saving transformation for high-consumption and low-efficiency air compressors, upgrading and transformation for air compressor joint control systems, energy-saving transformation for steam pipelines, research and application for infrared heating technology, application research for air energy units, application research for air compressor waste heat recovery and utilization, and replacement of high-efficiency and energy-saving heating tiles and other energy- saving renovation measures, improved automation and intelligence, and combined energy management with 90 Annual Report 2023 informatization construction, improved the production and manufacturing system through internet technology, realized lean production management, improved production efficiency, and reduced energy waste and CO2 emissions. In addition, the Company also pays attention to the use of recyclable packaging and transshipment materials to reduce carbon emissions in the procurement process, and is actively promoting the recycling of materials such as pallets to reduce carbon emissions in the whole production process. 9. Administrative penalties for environmental issues during the reporting period Impact on the The company's Violation of the production and Name Cause Result rectification situation operation of listed measures companies Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable 10. Other environment information that should be disclosed According to the Environmental Information Disclosure Measures of Enterprises and Institutions, in line with the principle of mandatory disclosure and voluntary disclosure combined, the Company and its subsidiaries have realized the disclosure of information relating to environmental impact assessment, project acceptance, pollutants production and discharge, solid waste management, important environmental factors, environmental objectives and performance of construction projects. 11. Other environment related information In order to further realize the scientific and systematic environmental protection work of the Company and its subsidiaries, the Company and its subsidiaries have established an environmental management system in accordance with ISO14001 standards, set up an environmental protection organization, acquired environmental protection resources, regularly identified, updated and appraised environmental factors, compliance obligations, environmental risks and opportunities, and regularly determined environmental objectives and management programs. Through the implementation of management programs and continuous normal improvement, the environmental performance of the Company and its subsidiaries has been continuously improved. Through regular internal audit and management review, as well as the verification and examination of the third parties, the environmental management system of the Company and its subsidiaries has been effectively controlled and fully meets the system management standards and relevant regulations. II. Social responsibility The Company continues to promote win-win development with its stakeholders, earnestly fulfills its social responsibilities, pays close attention to the voices of all stakeholders, and actively gives back and improves, and is determined to become an enterprise that is respected by the society and loved by its employees. While achieving sound development, it pays attention to protecting the interests of its shareholders, employees, suppliers, customers and consumers, and actively engages in public welfare undertakings, thus promoting the harmonious development of the Company and the whole society. 1. Protection of the rights and interests of shareholders and creditors The company strictly follows the provisions and requirements formulated by the Articles of Association and the 91 Annual Report 2023 Rules of Procedure for the General Meeting of Shareholders, regulates the convening, holding and voting procedures of the general meeting of shareholders, equally treats all shareholders, especially small and medium shareholders equally, and ensures that all shareholders enjoy equal status and fully exercise their own rights. Under the premise of strictly implementing the Administrative Measures for Information Disclosure of Listed Companies, the company actively communicates and exchanges information with investors on the company's operations and management, financial status, etc. through annual performance briefings, Anhui service week for investors by SZSE, investor telephone hotline, e-mails, and the investor relations interactive platform of the Shenzhen Stock Exchange, and discloses information to all investors in a truthful, accurate, complete, concise and clear, and easy-to-understand manner; further, the company attaches great importance to the shareholder return mechanism, According to the Return Plan for Shareholders of Changhong Meiling Co., Ltd. for the Next Three Years (2021 -2023), combined with the Company's own operating conditions and other factors, during the reporting period, the Company implemented the profit distribution plan for 2022, paid dividends in cash and gave shareholders a reasonable return on investment. At the same time, during the reporting period, the Company held four General Meetings of Shareholders, and implemented a combination of on-site voting and online voting to allow investors to fully participate and ensure shareholders' right to know, participate and vote on major issues of the Company. When the General Meeting of Shareholders reviews major issues that affect the interests of small and medium-sized investors, the votes of small and medium-sized investors shall be counted separately and publicly disclosed in the resolutions of the General Meeting of Shareholders in time to fully protect the rights and interests of small and medium-sized investors. In addition, in order to establish a variety of shareholder return mechanisms and thank investors for their long-term concern and support for the Company, during the reporting period, the Company held the "Meiling 40th Anniversary Shareholder Thanksgiving Festival" to give back to all shareholders with sincerity. 2. Protection of the rights and interests of employees In accordance with relevant laws, regulations and policies, and in light of its own actual situation, the company has established a relatively complete employment management system, including labor contract system, salary and performance appraisal system, welfare management system, training management system, employee vacation management system, etc..The company attaches importance to the vital interests of employees, protects the legitimate rights and interests of employees to the maximum extent, establishes harmonious labor relations, and strives to form a good mechanism for the company and employees to create and share together. At the same time, the company creates a people-oriented cultural atmosphere by providing various holidays, allowances, condolences and organizing diversified employee activities, benchmarking personnel selection, carnivals, etc., and continuously improves employee satisfaction. 3. Protection of the rights and interests of suppliers, customers and consumers The company has established a relatively complete procurement management system, optimized and revised system documents in a timely manner, unified information system tools, strictly controlled every link of the procurement business, cultivated core and strategic suppliers, and established a high-end supply chain cultivation plan for component suppliers of high-end products, so as to form a synergy, cooperation and win-win situation between the company and its suppliers. 92 Annual Report 2023 The Company has a perfect product development process, advanced R&D system, and constantly develops products with leading technology. The Company attaches great importance to product quality, has strong quality control ability, reliable product performance and a refined quality management system, and has passed the management system certifications such as ISO9001, ISO14001 and ISO45001. The Company's testing center has CNAS accreditation qualification, complete test items and strong testing ability, which meets the requirements of strict and high-level testing of products. At the same time, it has built one of the few RoHS and intelligent IoT laboratories in the industry. The Company attaches importance to user satisfaction and user reputation, and in the domestic market, it increases its attention and support in terminal construction, user experience and product training to increase the sales of products; In the export market, it fully recognizes the requirements of local laws and regulations, strictly certifies products, and fully verifies the reliability and environmental adaptability of products to ensure the reliability of products in the target market. Its export products have covered more than 130 countries or regions. According to different types of customers, it implements classification and system management through the information system, and timely feeds back the demands put forward by customers, continuously improves quality services and enhances brand image; It also tracks the market performance by monitoring customer satisfaction, user complaint rate and user net recommendation value. For the protection of consumers' rights and interests, the company has a relatively advanced closed-loop management system for user service. In order to meet users' service needs, it gradually improves the function construction of official channel service platforms such as 400 service hotline, brand official website, WeChat official account and Zhihuijia APP, attaches importance to and strengthens the user interaction and experience of social platforms such as Tik Tok, Xiaohongshu, Weibo, Bilibili and Zhihu, and understands and handles users' needs and questions in time. In view of user demand processing, it promotes the process visualization management and user evaluation system management of work order processing timeline. In addition, the company pays attention to improving consumers' product guarantee service ability, and has created Meiling's exclusive characteristic guarantee service measures, and upgraded and launched the services such as unconditional return within 180 days for Meiling M fresh refrigerator because of dissatisfaction in preservation, and unconditional return within 180 days for Meiling clean refrigerator because of dissatisfaction in disinfection and sterilization, so as to effectively meet users' needs and enhance consumer satisfaction. 4. Social welfare For many years, the company has actively participated in social welfare undertakings and various social welfare activities. The company actively carries out actions such as assisting employees with serious illnesses and advocating for voluntary donations from employees.. During the reporting period, the Party Committee of the Company actively participated in the third party building project of micro-public welfare venture capital in the Jinxiu Community Social Organization Incubation Park in Hefei Economic Development Zone; Zhongke Meiling, a subsidiary of the Company, established the "Friends of Tsinghua - Meiling Biomedical Scholarship" to promote the independent innovation and high-quality development of the medical devices and scientific research instrument and equipment industry in China; At the same time, in combination with the needs of its own business development and social responsibility, Zhongke Meiling donated an automatic vaccination workstation worth RMB 1.15 million to the Linhu Community Health Service Center of 93 Annual Report 2023 Hefei Economic and Technological Development Zone through the Hefei Red Cross Society to improve the efficiency and safety of vaccination. III. Consolidate and expand the achievements of poverty alleviation and rural revitalization None 94 Annual Report 2023 VI. Important Events I. Implementation of commitment (i) Commitments that the actual controller, shareholders, related party, the buyer and the company have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period √ Applicable □ Not applicable Commitment Implementat Commitment Type/content Date Term party ion 1. The acquirer shall not engage in refrigerator business or activity which Strictly Valid for long competes or will compete with business of Meiling Electrical Appliances, or implemente term that which has interest conflict with Meiling Electrical Appliances. d About committed 2. The acquirer promises to apply shareholders’ right on a legal and reasonable Strictly Sichuan and promised in Valid for long Commitments manner and shall not take any action to limit or affect the normal operation of implemente Changhong order to prevent term made in Meiling Electric. d Electric Co., horizontal acquisition 3. For any opportunity to engage in competing business, the acquirer will 2007-6-12 Ltd.(hereinafter, competition in the report or equity advise Meiling Electric in written for engaging such business or not. If Meiling the “Sichuan Acquisition change report Electrical Appliances gives no clear written reply as to whether engaging the Strictly Changhong”) Report of Hefei Valid for long competing business or not within 20 days after receipt of the aforesaid letter, it implemente Meiling Co., Ltd. term shall be deemed that it will not engage in such business. The acquirer will only d engage in non-competing business provided that Meiling Electric confirms not to or is deemed to not engage in such non-competing business. 1. It will not engage in such business or activity that competes with or has Commitment interest conflict with that of Meiling Electric except for the action taken for Commitment regarding to sake of Meiling Electric as required by Meiling Electrical Appliances. Strictly made during the Sichuan reducing and Valid for long 2. The Company promises to apply shareholders’ right on a legal and 2010-6-24 implemente non-public offer Changhong preventing term reasonable manner and shall not take any action to limit or affect the normal d of 2010 competition with operation of Meiling Electric Meiling Electric 3. In case that Meiling Electric expects, on the basis of its existing business, to 95 Annual Report 2023 expand its operation scope into the business which the Company has already operated, the Company agrees to grant priority acquisition right to Meiling Electric regarding such business if the same conditions are met, provided that the Company is still the controlling shareholder or actual controller of Meiling Electric 1. Measures will be adopted to prevent continued related transaction with Meiling Electric: as to the related transaction that can not be prevented, it will Commitment sign related transaction agreement with Meiling Electric under the market regarding to principles of “equally paid and mutual benefit”, and fairly determined the reducing and transaction price according to the market prevailing standards. Strictly Valid for long standardizing 2. Perform the necessary obligations to make related directors and related June 24,2010 implemente term related transaction shareholder abstain from voting according to relevant regulation, and observe d with Meiling legal procedure for approving related transaction and information disclosure Electric obligations. 3. Promise not to hurt legal interests of Meiling Electric and other shareholders through related transaction. Strictly Commit to authorized Changhong Air-conditioner and Zhongshan Changhong use “Changhong” Valid for long November 6,2010 implemente trademark and relevant patents for free. term d 1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and prompt manner, to disclose all the information that have important influences over investors, to accept supervision under the CSRC and Shenzhen Stock Exchange. 2. Commit to make public clarification in respect of such information that is released from any public media and may result in misleading influences on stock price once the Company is aware of The Company January 7,2011 such information. 3. The directors, supervisors, senior management and core technicians of the Company will accept opinions and criticism from the social public, and they will not trade the Company’s securities, directly or indirectly, with any inside information and other illegal methods. The Company promises that the documents submitted to Shenzhen Stock Exchange exist no false statement or 96 Annual Report 2023 material omission, and no relevant information will be disclosed during the application for listing without prior content from Shenzhen Stock Exchange. 1. Since the property transfer didn’t involve the buildings and land currently used by Changhong Strictly Valid for long Air-conditioner, Sichuan Changhong commits, upon the completion of equity transfer, to continue implemente term to lease such assets to Changhong Air-conditioner at market price. d Commitment 2. After completion of this property transfer, Sichuan Changhong commits to manage to prevent made in transfer Sichuan new related transaction with Meiling Electric. For those which can not be prevented, Sichuan of air December 10,2009 Changhong Changhong commits to determine the transaction price based on market accepted methods, so as to Strictly conditioning Valid for long ensure fairness of related transaction and protection of the interest of Meiling Electric implemente assets property term 3. Sichuan Changhong commits that it will not engage in air conditioning and refrigerator business d or activity which competes or will compete with business of Meiling Electric, or that which has interest conflict with Meiling Electric Sichuan 1. Based on market conditions and as allowed by laws and rules, multiple measures were adopted Changhong adequately to increase shareholding of Meiling Electric, so as to demonstrate its firm confidence on Commitments Electric Co., the PRC economy and Meiling Electric with its actual actions, maintain sound development of Strictly of not to Ltd.and persons capital market and promote recovery of healthy market Valid for long July 9,2015 implemente reducing the acting in concert term d shares CHANGHONG 2. Continued to support operation and development of listed company as always and promoted the (HK) TRADING achievement of Meiling Electric. It is committed to bringing steady and real return to investors. LIMITED 1. Promise to truly, accurately, completely, fairly and timely publish periodic reports, disclose all information that has significant impacts on the investors, and accept the supervision and Commitment management of China Securities Regulatory Commission and the Shenzhen Stock Exchange. Strictly made during the Make commitments that the Company will publicly clarify in time after knowing any information Valid for long The Company December 12,2016 implemente non-public offer on any public communications media that may cause misleading influence on the stock price term d in 2016 3. The Company’s directors, supervisors and senior executives will listen carefully to the opinions and criticisms of the public and never use any acquired inside information and other improper means to directly or indirectly engage in the trading activities of the Company's stock. Perform the commitment promptly or not √ Yes □ No 97 Annual Report 2023 If the commitment is overdue and has not been fulfilled, the specific reasons for Not applicable incomplete performance and the work plan for next step shall be explained in detail Note: The fulfilled commitments in the form will not be disclosed in the next periodic report. (ii) Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period, explain reasons of reaching the original profit forecast □ Applicable √ Not applicable 98 Annual Report 2023 II. Non-operational fund occupation from controlling shareholders and its related party □ Applicable √ Not applicable None III. External guarantee out of the regulations □ Applicable √ Not applicable No external guarantee out of the regulations occurred in the period. IV. Statement on the latest “modified audit report” by BOD □ Applicable √ Not applicable V. Explanation from Board of Directors, Supervisory Committee and Independent Directors (if applicable) for “Qualified Opinion” that issued by CPA □ Applicable √ Not applicable VI. Explanation of the changes in accounting polices, accounting estimates or correction of significant accounting errors compared with the financial report of the previous year √ Applicable □ Not applicable Found more details in 38. Change of major accounting policy and estimation under III. Major accounting policy and estimation carried in the Section XI. Financial Report VII. Compare with last year’s financial report; explain changes in consolidation statement’s scope √ Applicable □ Not applicable In the reporting period, the consolidated financial statements of the Company cover 22 subsidiaries, including Sichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. And Zhongke Meiling Cryogenic Technology Co., Ltd. etc. Compared with the previous year, during the reporting period two enterprise is included in the consolidate scope, During the reporting period, two subsidiaries included in the consolidated statement were cancelled: Hefei Meiling Marketing Co., Ltd. and Wuhan Meizhirong Appliance Marketing Co., Ltd. More details can be seen in the report “VII. Changes in the scope of the merger” and “VIII. Equity in other entities” of “Section X Financial Report” VIII. Appointment and non-reappointment (dismissal) of CPA (i)CPAs currently engaged Name of domestic accounting firm Shine Wing Certified Public Accountants(LLP) Remuneration for domestic accounting firm ( RMB 10,000) 140 Continuous life of auditing service for domestic accounting firm 15 years Name of domestic CPA Wang Xiaodong, Tu Xiaofeng 99 Annual Report 2023 Continuous life of auditing service for domestic CPA Wang Xiaodong(4 year), Tu Xiaofeng (2 year) Name of foreign accounting firm (if applicable) N/A Remuneration for foreign accounting firm (RMB 10,000) (if N/A applicable) Continuous life of auditing service for foreign accounting firm (if N/A applicable) Name of foreign CPA (if applicable) N/A Continuous life of auditing service for foreign CPA (if applicable) - (ii) Re-appointed accounting firms in this period □Yes √ No In reporting period, Shine Wing Certified Public Accountants (LLP) was appointed as audit institute of internal control for the Company, auditing charge for internal control amounting as 270,000 yuan. IX. Particular about delisting after annual report disclosed □ Applicable √ Not applicable X. Bankruptcy reorganization □ Applicable √ Not applicable XI. Material lawsuits and arbitration of the Company √Applicable □Not applicable Wheth Implemen er to Amount Litigatio Litigation(arbi tation of form involved (Ten n(arbitra tration)trial litigation( Disclosure Disclosu Basic situation of litigation(arbitration) estima thousand tion)pro results and arbitration date re index ted yuan) gress impact )judgment liabilit s ies Zhiyijia, an affiliated enterprise of the company, signed a The court sales contract with the defendant, Tianjin Pengsheng ordered the Logistics Co., Ltd. (hereinafter referred to as "Tianjin defendant Pengsheng"). After the contract was signed, Zhiyijia, the Tianjin The plaintiff, supplied the goods to Tianjin Pengsheng, the Pengsheng to judgmen (www.c defendant as agreed, but Tianjin Pengsheng, the immediately t of the ninfo.co defendant, failed to fulfill the payment obligation to pay the December first m.cn)(2 Zhiyijia as agreed. As of November 30, 2022, according plaintiff RMB Under 24,2022, 9,617.43 No instance 022- to statistics, Tianjin Pengsheng, the defendant, still owed 96,174,308.42 execution October has 101and Zhiyijia a payment of RMB 96,174,308.42. Based on and the 20,2023 come 2023- this, Zhiyijia, the plaintiff brought a lawsuit against corresponding into 057) Tianjin Pengsheng, the defendant to the People's Court of liquidated effect. Mianyang High-tech Industrial Development Zone, and damages for requested the court to order Tianjin Pengsheng to overdue immediately pay the plaintiff RMB 96,174,308.42 and payment, and the corresponding liquidated damages for overdue bear the 100 Annual Report 2023 payment, and bear the related litigation costs and related property preservation guarantee fees. litigation costs and property preservation guarantee fees. Meiling Group, a subsidiary of the Company, signed a sales contract with Gome Electrical Appliances Co., Ltd. (hereinafter referred to as "Gome"). After the contract was signed, Meiling Group, the plaintiff, fulfilled the The case supply obligation according to the contract, while Gome has been and its affiliated companies, the defendant, failed to accepted fulfill the payment obligation to Meiling Group according and is in to the contract. According to statistics, the defendant (www.c the Gome and its affiliated companies owe Meiling Group ninfo.co formal No trial result No trial October20 RMB 9,841,267.21 for purchase payment and RMB 1,086.01 No m.cn)( 2 trial yet result yet ,2023 1,018,820.55 for liquidated damages for overdue 023- stage or payment, totaling RMB 10,860,087.76. Based on this, the 058) pre- plaintiff Meiling Group filed a lawsuit against the litigatio defendant Gome and its affiliated companies in the n People's Court of Hefei High-tech Industry Development mediatio Zone. It requested the court to order the defendant Gome n stage. to immediately pay the plaintiff Meiling Group the purchase payment and the liquidated damages for overdue payment, totaling RMB 10,860,087.76. Part of Accumulated amount of other litigation that does not 11,029.97 it is a - - - - - meet the disclosure standard of major litigation note Note: In 2023, an estimated liability of 394300 yuan was confirmed. For specific details, please refer to "40. Estimated Liabilities" in "V. Notes to Main Items of the Consolidated Financial Statements" in Section 10 of the financial report. Notes: The Company's shareholding in Zhiyijia is 50%, and the products are sold through Zhiyijia's smart trading platform. The customers, channels and sales transactions corresponding to the products sold are controlled and docked by the company itself, and the external transaction object is Zhiyijia, and related transactions are formed between the Company and Zhiyijia. In terms of payment settlement, the Company and Zhiyijia follow the principle of "external customer account period is Zhiyijia's account period to the Company, and external customer payment is Zhiyijia's payment to the Company, which is not allowed to be remained or transited at Zhiyijia". The amounts involved in this case are all accounts receivable and liquidated damages for overdue payment caused by the Company's sales through the smart trading platform of Zhiyijia, but the subject of the agreement is Zhiyijia, and this lawsuit will be filed by Zhiyijia. The Company and its affiliated enterprise Zhiyijia will claim their legitimate rights and interests according to law and actively take relevant measures to safeguard the legitimate rights and interests of the Company, Zhiyijia and the investors. 101 Annual Report 2023 XII. Penalty and rectification □Applicable√Not applicable During the reporting period, the Company had no Penalty and rectification. XIII. Integrity of the company and its controlling shareholders and actual controllers □Applicable √ Not applicable During the reporting period, the Company and the controlling shareholders and the actual controllers have had good reputation, and there is no large amount due unliquidated debt sentenced by the court. XIV. Major related party transaction (i) Related party transaction with routine operation concerned √ Applicable □ Not applicable 102 Annual Report 2023 Wheth er over Related Proporti Availa Type of Related Trading limit the Clearing transaction on in ble Seri Related related Content of related Pricing transaction approved (in approv form for Relationship price (in 10 similar similar Date of disclosure Index of disclosure al party transacti transaction principle amount (in 10 10 thousand ed related thousand transacti market on thousand Yuan) Yuan) limited transaction Yuan) ons (%) price or Not (Y/N) Juchao Website Pressure regulator, December 7, Sichuan Commo Spot (www.cninfo.com.cn) integrated circuit, 2023,December 23, Changhong Controlling dity Marketing exchange, Announcement No.: 2022-087,2022- 1 transistors, steel 34,336.31 34,336.31 1.80% 65,000.00 No - 2022,September 8, Electric Co., shareholder purchase price Bank 088,2022-089,2022-100,2023- plate, plastic parts, 2023,December Ltd. d acceptance 044,2023-045,2023-047,2023- etc 19,2023 077,2023-078,2023-079. Sichuan Juchao Website December 7, Changhong Commo Spot (www.cninfo.com.cn) Steel plate and 2023,December 23, Electric Controlling dity exchange, Announcement No.:2022-087,2022- 2 plastic particles, Marketing 3,715.78 3,715.78 0.20% 15,000.00 No - 2022,September 8, Holdings shareholder purchase price Bank 088,2022-089,2022-100,2023- etc 2023,December Group Co., d acceptance 044,2023-045,2023-047,2023- 19,2023 Ltd. 077,2023-078,2023-079. Other enterprise Juchao Website Sichuan control December 7, Commo Components, Spot (www.cninfo.com.cn) Changhong under the 2023,December 23, dity plastic parts and exchange, Announcement No.:2022-087,2022- 3 Mold Plastic same Marketing 78,955.55 78,955.55 4.15% 100,000.00 No - 2022,September 8, purchase lining accessories price Bank 088,2022-089,2022-100,2023- Tech. Co., controlling 2023,December d etc. acceptance 044,2023-045,2023-047,2023- Ltd. shareholder 19,2023 077,2023-078,2023-079. and ultimate controller 103 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control Spot (www.cninfo.com.cn) Commo Base plate 2023,December 23, Changhong under the exchange, Announcement No.:2022-087,2022- 4 dity assembly, black Marketing 47,006.81 47,006.81 2.47% 65,000.00 No - 2022,September 8, same Jijia Fine purchase price Bank 088,2022-089,2022-100,2023- controlling plate, bracket etc. 2023,December Co., Ltd. d acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control Spot (www.cninfo.com.cn) Changhong Commo Packing boxes, 2023,December 23, under the exchange, Announcement No.:2022-087,2022- 5 Package dity foam, fixed Marketing 11,012.12 11,012.12 0.58% 20,000.00 No - 2022,September 8, same purchase price Bank 088,2022-089,2022-100,2023- Printing Co., controlling support block etc. 2023,December d acceptance 044,2023-045,2023-047,2023- Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Sichuan Juchao Website enterprise December 7, Changhong control Printed board Spot (www.cninfo.com.cn) Commo 2023,December 23, Precision under the machine insertion exchange, Announcement No.:2022-087,2022- 6 dity Marketing 2,510.14 2,510.14 0.13% 4,500.00 No - 2022,September 8, same Electronics purchase machine paste price Bank 088,2022-089,2022-100,2023- controlling 2023,December Tech. Co., d assembly acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other enterprise Juchao Website Sichuan December 7, control Commo (www.cninfo.com.cn) Changhong 2023,December 23, under the dity Announcement No.:2022-087,2022- 7 International Foods Marketing 3.23 3.23 0.00% 15000 No Cash - 2022,September 8, same purchase price settlement 088,2022-089,2022-100,2023- Hotel Co., 2023,December controlling d 044,2023-045,2023-047,2023- Ltd. 19,2023 shareholder 077,2023-078,2023-079. and ultimate 104 Annual Report 2023 controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) 081 Commo 2023,December 23, under the Announcement No.:2022-087,2022- 8 Electronics dity Marketing 5.30 5.30 0.00% 8,000.00 No Cash - 2022,September 8, same power transformer Group Co., purchase price settlement 088,2022-089,2022-100,2023- controlling 2023,December Ltd. d 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Guangdong control Spot (www.cninfo.com.cn) Commo 2023,December 23, Changhong under the exchange, Announcement No.:2022-087,2022- 9 dity Foam and carton Marketing 753.21 753.21 0.04% 8,000.00 No - 2022,September 8, same Electronics purchase price Bank 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. d acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, control (www.cninfo.com.cn) Intelligence Commo 2023,December 23, under the Outside cover Announcement No.:2022-087,2022- 10 Manufacturi dity Marketing 0.05 0.05 0.00% 15000 No Cash - 2022,September 8, same purchase parts price settlement 088,2022-089,2022-100,2023- ng controlling 2023,December d 044,2023-045,2023-047,2023- Technology shareholder 19,2023 and ultimate 077,2023-078,2023-079 Co., Ltd. controller Other Juchao Website enterprise December 7, Sichuan control Electric (www.cninfo.com.cn) Commo 2023,December 23, Hongwei under the toothbrush, body Announcement No.:2022-087,2022- 11 dity Marketing 4.72 4.72 0.00% 8,000.00 No Cash - 2022,September 8, same Technology purchase fat weighing, price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd d smart watches, etc 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller 105 Annual Report 2023 Other Juchao Website enterprise December 7, Hefei control Spot (www.cninfo.com.cn) Commo 2023,December 23, Changhong under the exchange, Announcement No.:2022-087,2022- 12 dity Inverter integrated Marketing 714.92 714.92 0.04% 8,000.00 No - 2022,September 8, same Industrial purchase board price Bank 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. d acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control Spot (www.cninfo.com.cn) Changhong Commo 2023,December 23, under the exchange, Announcement No.:2022-087,2022- 13 New Energy dity Batteries Marketing 20.18 20.18 0.00% 15000 No - 2022,September 8, same purchase price Bank 088,2022-089,2022-100,2023- Technology controlling 2023,December d acceptance 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Zhiyijia Commo 2023,December 23, under the Announcement No.:2022-087,2022- 14 Network dity Air conditioner, Marketing 806.22 806.22 0.04% 8,000.00 No Cash - 2022,September 8, same purchase LCD TV price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December d 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Commo 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 15 dity Marketing 0.18 0.18 0.00% 8,000.00 No Cash - 2022,September 8, same Bushing Source Co., purchase price settlement 088,2022-089,2022-100,2023- controlling 2023,December Ltd. d 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller 106 Annual Report 2023 Other Changhong Juchao Website enterprise December 7, International control (www.cninfo.com.cn) Commo 2023,December 23, Holdings under the Announcement No.:2022-087,2022- 16 dity Television Marketing 5,500.00 5,500.00 0.29% 12,000.00 No Cash - 2022,September 8, same (Hong purchase price settlement 088,2022-089,2022-100,2023- controlling 2023,December Kong) Co., d 044,2023-045,2023-047,2023- shareholder 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Commo 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 17 dity Marketing 797.63 797.63 0.04% 8,000.00 No Bank - 2022,September 8, Device same printed board purchase price acceptance 088,2022-089,2022-100,2023- Technology controlling 2023,December d 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, Remote controls, Spot (www.cninfo.com.cn) control Changhong Commo switching 2023,December 23, under the exchange, Announcement No.:2022-087,2022- 18 Electronic dity transformers, Marketing 2,761.52 2,761.52 0.15% 4,000.00 No - 2022,September 8, same purchase printed boards, price Bank 088,2022-089,2022-100,2023- Products controlling 2023,December d electronic acceptance 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 components, etc. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Commo 2023,December 23, Jiahong under the Announcement No.:2022-087,2022- 19 dity Catering services Marketing 2.80 2.80 0.00% 15000 No Cash - 2022,September 8, same Industrial purchase price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd d 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller 107 Annual Report 2023 Other Juchao Website Sichuan enterprise December 7, control Commo Internet access Spot (www.cninfo.com.cn) Ailian 2023,December 23, under the dity modules, exchange, Announcement No.:2022-087,2022- 20 Science & same Marketing 1,234.06 1,234.06 0.06% 5,000.00 No - 2022,September 8, purchase electronic price Bank 088,2022-089,2022-100,2023- Technology controlling 2023,December shareholder d components, etc acceptance 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other enterprise Juchao Website control December 7, Changhong Commo Spot (www.cninfo.com.cn) under the 2023,December 23, Huayi dity Compressor,air exchange, Announcement No.:2022-087,2022- 21 same Marketing 56,361.04 56,361.04 2.96% 54,000.00 No - 2022,September 8, Compressor purchase compression price Bank 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. d acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 077,2023-078,2023-079. and ultimate controller Other Juchao Website Sichuan enterprise December 7, control Spot (www.cninfo.com.cn) Aichuang Commo 2023,December 23, under the exchange, Announcement No.:2022-087,2022- 22 Science & same dity Inverter integrated Marketing 16,847.00 16,847.00 0.89% 20,000.00 No - 2022,September 8, purchase board price Bank 088,2022-089,2022-100,2023- Technology controlling 2023,December d acceptance 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website December 7, Service Exp. enterprise Commo (www.cninfo.com.cn) 2023,December 23, Appliance control dity Announcement No.:2022-087,2022- 23 Filter element, etc Marketing 0.18 0.18 0.00% 8,000.00 No Cash - 2022,September 8, Service under the purchase price settlement 088,2022-089,2022-100,2023- 2023,December Chain Co., same d 044,2023-045,2023-047,2023- 19,2023 Ltd. controlling 077,2023-078,2023-079. 108 Annual Report 2023 shareholder and ultimate controller Other Juchao Website enterprise December 7, control Spot (www.cninfo.com.cn) Sichuan Commo Inverter integrated 2023,December 23, under the exchange, Announcement No.:2022-087,2022- 24 Aoku dity board , Marketing 2,758.52 2,758.52 0.15% 15000 No - 2022,September 8, same Technology purchase Electronic control price Bank 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. d components acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Juchao Website December 7, Changhong (www.cninfo.com.cn) Controlling 2023,December 23, Electronics Accept Shuttle Announcement No.:2022-087,2022- 25 shareholder Marketing 283.47 283.46 0.16% 15000 No Cash - 2022,September 8, labor transportation fee, Holding and ultimate price settlement 088,2022-089,2022-100,2023- service training fee 2023,December Group Co., controller 044,2023-045,2023-047,2023- 19,2023 Ltd. 077,2023-078,2023-079. Juchao Website December 7, Sichuan Software usage (www.cninfo.com.cn) 2023,December 23, Changhong Accept fee, information Announcement No.:2022-087,2022- 26 Controlling Marketing 388.67 388.67 0.22% 10,000.00 No Cash - 2022,September 8, labor consultation fee, Electric Co., shareholder price settlement 088,2022-089,2022-100,2023- service inspection and 2023,December Ltd. certification fee 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Other Transportation Juchao Website Sichuan enterprise December 7, control costs, storage and (www.cninfo.com.cn) Changhong 2023,December 23, under the Accept handling charges, Announcement No.:2022-087,2022- 27 Minsheng Marketing 68,322.47 68,322.47 37.86% 82,000.00 No Cash - 2022,September 8, same labor freight and price settlement 088,2022-089,2022-100,2023- Logistics controlling service 2023,December shareholder miscellaneous 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate charges etc. 077,2023-078,2023-079. controller 109 Annual Report 2023 Other Juchao Website Sichuan enterprise December 7, control Spot (www.cninfo.com.cn) Changhong commission 2023,December 23, under the Accept exchange, Announcement No.:2022-087,2022- 28 Mold Plastic processing fee, Marketing 4,094.39 4,094.39 2.27% 10000 No - 2022,September 8, same labor Change the mold price Bank 088,2022-089,2022-100,2023- Tech. Co., controlling service 2023,December service acceptance 044,2023-045,2023-047,2023- Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Sichuan Juchao Website enterprise December 7, Service Exp. control Three packages, (www.cninfo.com.cn) 2023,December 23, Appliance under the Accept equipment repair, Announcement No.:2022-087,2022- 29 Marketing 31,833.06 31,833.06 17.64% 45,000.00 No Cash - 2022,September 8, same labor miscellaneous Service price settlement 088,2022-089,2022-100,2023- controlling service fees, installation 2023,December Chain Co., shareholder fee etc. 044,2023-045,2023-047,2023- 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise Software usage December 7, Sichuan control (www.cninfo.com.cn) fee, service 2023,December 23, Hongxin under the Accept Announcement No.:2022-087,2022- 30 same labor supporting fee and Marketing 1,320.82 1,320.82 0.73% 10000 No Cash - 2022,September 8, Software price settlement 088,2022-089,2022-100,2023- controlling service information 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- service fee 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Guangdong control (www.cninfo.com.cn) Service support 2023,December 23, Changhong under the Accept Announcement No.:2022-087,2022- 31 fee, network Marketing 111.26 111.26 0.06% 10000 No Cash - 2022,September 8, same labor Electronics price settlement 088,2022-089,2022-100,2023- controlling service service fee etc. 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller 110 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Meals, property 2023,December 23, Jiahong under the Accept Announcement No.:2022-087,2022- 32 same labor management fees Marketing 558.03 558.03 0.31% 15000 No Cash - 2022,September 8, Industrial price settlement 088,2022-089,2022-100,2023- controlling service etc. 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong Meetings fee, 2023,December 23, under the Accept Announcement No.:2022-087,2022- 33 International same labor accommodation, Marketing 73.60 73.60 0.04% 15000 No Cash - 2022,September 8, price settlement 088,2022-089,2022-100,2023- Hotel Co., controlling service Travel service 2023,December shareholder 044,2023-045,2023-047,2023- Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Inspection and 2023,December 23, Orion.PDP. under the Accept Announcement No.:2022-087,2022- 34 certification Marketing 5.01 5.01 0.00% 15000 No Cash - 2022,September 8, same labor Co.,ltd price settlement 088,2022-089,2022-100,2023- controlling service services 2023,December shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Accept property Announcement No.:2022-087,2022- 35 Property Marketing 14.56 14.56 0.01% 15000 No Cash - 2022,September 8, same labor management fees price settlement 088,2022-089,2022-100,2023- Services controlling service 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 36 Sichuan Other Accept Training services Marketing 0.69 0.69 0.00% 10000 No Cash - December 7, Juchao Website enterprise labor price settlement 111 Annual Report 2023 Hongwei control service 2023,December 23, (www.cninfo.com.cn) Technology under the 2022,September 8, Announcement No.:2022-087,2022- same Co., Ltd. 2023,December 088,2022-089,2022-100,2023- controlling shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Zhiyijia 2023,December 23, under the Accept Design service fee Announcement No.:2022-087,2022- 37 Network Marketing 13.93 13.93 0.01% 10000 No Cash - 2022,September 8, same labor and platform price settlement 088,2022-089,2022-100,2023- Technology controlling service usage fee 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong Network 2023,December 23, under the Accept Announcement No.:2022-087,2022- 38 Network maintenance Marketing 3.05 3.05 0.00% 10000 No Cash - 2022,September 8, same labor price settlement 088,2022-089,2022-100,2023- Technology controlling service services 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, control (www.cninfo.com.cn) Intelligent 2023,December 23, under the Accept Consultation Announcement No.:2022-087,2022- 39 Manufacturi Marketing 9.43 9.43 0.01% 15000 No Cash - 2022,September 8, same labor service price settlement 088,2022-089,2022-100,2023- ng controlling service 2023,December shareholder 044,2023-045,2023-047,2023- Technology 19,2023 and ultimate 077,2023-078,2023-079. Co., Ltd. controller Sichuan Other December 7, Juchao Website Accept 40 Changhong enterprise commission Marketing 780.10 780.10 0.43% 10000 No Bank - 2023,December 23, (www.cninfo.com.cn) labor Jijia Fine control processing fee price acceptance service 2022,September 8, Announcement No.:2022-087,2022- Co., Ltd. under the 112 Annual Report 2023 same 2023,December 088,2022-089,2022-100,2023- controlling 19,2023 044,2023-045,2023-047,2023- shareholder 077,2023-078,2023-079. and ultimate controller Sichuan Other Changhong Juchao Website enterprise December 7, Gerun control (www.cninfo.com.cn) 2023,December 23, Environmen under the Accept Environmental Announcement No.:2022-087,2022- 41 Marketing 32.53 32.53 0.02% 15000 No Cash - 2022,September 8, same labor tal protection service price settlement 088,2022-089,2022-100,2023- controlling service 2023,December protection shareholder 044,2023-045,2023-047,2023- 19,2023 Technology and ultimate 077,2023-078,2023-079. Co., Ltd. controller Other enterprise Juchao Website Sichuan control December 7, (www.cninfo.com.cn) Changhong under the Accept 2023,December 23, Marketing Announcement No.:2022-087,2022- 42 Electronic same labor Labor serves 27.50 27.50 0.02% 10000 No Cash - 2022,September 8, price settlement 088,2022-089,2022-100,2023- Products controlling service 2023,December 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 077,2023-078,2023-079. and ultimate controller Other enterprise Juchao Website December 7, Sichuan control Technical service, (www.cninfo.com.cn) Accept 2023,December 23, Aichuang under the warehouse Announcement No.:2022-087,2022- 43 labor Marketing 137.13 137.13 0.08% 15000 No Cash - 2022,September 8, Technology same management price settlement 088,2022-089,2022-100,2023- service 2023,December Co., Ltd. controlling service 044,2023-045,2023-047,2023- 19,2023 shareholder 077,2023-078,2023-079. and ultimate 113 Annual Report 2023 controller Other enterprise Juchao Website control December 7, Sichuan (www.cninfo.com.cn) under the Accept Inspection and 2023,December 23, Ailian Announcement No.:2022-087,2022- 44 same labor certification Marketing 1.08 1.08 0.00% 15000 No Cash - 2022,September 8, Technology price settlement 088,2022-089,2022-100,2023- controlling service services 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 077,2023-078,2023-079. and ultimate controller Other Juchao Website enterprise Technology December 7, control development (www.cninfo.com.cn) Sichuan 2023,December 23, under the Accept service fee, Announcement No.:2022-087,2022- 45 Qiruike Marketing 990.12 990.12 0.55% 15000 No Cash - 2022,September 8, same labor instrument repair Technology price settlement 088,2022-089,2022-100,2023- controlling service fee, inspection and 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder certification fee, 19,2023 and ultimate etc. 077,2023-078,2023-079. controller Juchao Website December 7, Spot (www.cninfo.com.cn) Sichuan Air conditioner, 2023,December 23, exchange, Announcement No.:2022-087,2022- 46 Changhong Controlling Sales of Kitchen and Marketing 225.21 225.21 0.01% 1,500.00 No - 2022,September 8, Electric Co., shareholder goods bathroom, small price Bank 088,2022-089,2022-100,2023- 2023,December Ltd. appliances acceptance 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Sichuan Juchao Website December 7, Changhong (www.cninfo.com.cn) Controlling Kitchen and 2023,December 23, Electronics Announcement No.:2022-087,2022- 47 shareholder Sales of bathroom, small Marketing 0.60 0.60 0.00% 3,000.00 No Cash - 2022,September 8, Holding and ultimate goods price settlement 088,2022-089,2022-100,2023- appliances 2023,December Group Co., controller 044,2023-045,2023-047,2023- 19,2023 Ltd. 077,2023-078,2023-079. 114 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control Air (www.cninfo.com.cn) 2023,December 23, Changhong under the conditione Announcement No.:2022-087,2022- 48 Sales of 2.68 2.68 0.00% 5,000.00 No Cash - 2022,September 8, same Sales of goods r, and Jijia Fine goods settlement 088,2022-089,2022-100,2023- controlling Refrigerat 2023,December Co., Ltd. shareholder or 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Plastic pressure Announcement No.:2022-087,2022- 49 Mold Sales of Marketing 21.18 21.18 0.00% 5000 No Cash - 2022,September 8, same goods parts price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Yigin control (www.cninfo.com.cn) 2023,December 23, Hongxing under the Announcement No.:2022-087,2022- 50 Sales of Air conditioners, Marketing 8.67 8.67 0.00% 3,000.00 No Cash - 2022,September 8, same Electric Co., goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control washing machine, Spot (www.cninfo.com.cn) Zhiyijia 2023,December 23, under the Refrigerator, exchange, Announcement No.:2022-087,2022- 51 Network Sales of Marketing 728,895.73 728,895.73 30.34% 800,000.00 No - 2022,September 8, same freezer, Air goods price Bank 088,2022-089,2022-100,2023- TechNlogy controlling conditioner, small 2023,December shareholder appliances acceptance 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 115 Annual Report 2023 Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Announcement No.:2022-087,2022- 52 Minsheng Sales of Air conditioner, Marketing 79.93 79.93 0.00% 5000 No Cash - 2022,September 8, same goods Refrigerator price settlement 088,2022-089,2022-100,2023- Logistics controlling 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Sichuan Juchao Website enterprise December 7, Service Exp. control Air conditioners, (www.cninfo.com.cn) 2023,December 23, Appliance under the inverter integrated Announcement No.:2022-087,2022- 53 Sales of Marketing 654.81 654.81 0.03% 5000 No Cash - 2022,September 8, same Service goods boards, price settlement 088,2022-089,2022-100,2023- controlling 2023,December Chain Co., shareholder components etc. 044,2023-045,2023-047,2023- 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 54 Sales of Air conditioners, Marketing 6.11 6.11 0.00% 5000 No Cash - 2022,September 8, same Real Estate goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Announcement No.:2022-087,2022- 55 Property Sales of Refrigeratior Marketing 0.46 0.46 0.00% 3,000.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Service Co., controlling 2023,December shareholder 044,2023-045,2023-047,2023- Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 56 Guangdong Other Sales of small appliances, Marketing 20.78 20.78 0.00% 5000 No Cash - December 7, Juchao Website Changhong enterprise goods Air conditioner price settlement 116 Annual Report 2023 Electronics control 2023,December 23, (www.cninfo.com.cn) Co., Ltd. under the 2022,September 8, Announcement No.:2022-087,2022- same 2023,December 088,2022-089,2022-100,2023- controlling shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, control (www.cninfo.com.cn) Intelligence 2023,December 23, under the Refrigerators, Announcement No.:2022-087,2022- 57 Manufacturi Sales of Marketing 258.76 258.76 0.01% 3,000.00 No Cash - 2022,September 8, same freezers, and air- goods price settlement 088,2022-089,2022-100,2023- ng controlling conditioners 2023,December shareholder 044,2023-045,2023-047,2023- Technology 19,2023 and ultimate 077,2023-078,2023-079. Co., Ltd. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan 2023,December 23, under the Announcement No.:2022-087,2022- 58 Aoku Sales of Marketing 21.93 21.93 0.00% 3,000.00 No Cash - 2022,September 8, same Refrigerator Technology goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan 2023,December 23, under the Announcement No.:2022-087,2022- 59 Changhong Sales of Marketing 5.46 5.46 0.00% 5000 No Cash - 2022,September 8, same Air conditioner Source Co., goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Guangyuan Other December 7, Juchao Website 60 Changhong enterprise Sales of Marketing 24.10 24.10 0.00% 5000 No Cash - 2023,December 23, (www.cninfo.com.cn) Air conditioner Electronic control goods price settlement 2022,September 8, Announcement No.:2022-087,2022- Technology under the 117 Annual Report 2023 Co., Ltd. same 2023,December 088,2022-089,2022-100,2023- controlling 19,2023 044,2023-045,2023-047,2023- shareholder 077,2023-078,2023-079. and ultimate controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) WIFI 2023,December 23, Ailian under the Announcement No.:2022-087,2022- 61 Sales of communication Marketing 0.78 0.78 0.00% 3,000.00 No Cash - 2022,September 8, same Technology goods price settlement 088,2022-089,2022-100,2023- controlling line 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Kitchen and 2023,December 23, Jiahong under the Announcement No.:2022-087,2022- 62 Sales of bathroom, small Marketing 0.84 0.84 0.00% 3,000.00 No Cash - 2022,September 8, same Industry goods price settlement 088,2022-089,2022-100,2023- controlling appliances 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Sichuan Juchao Website enterprise December 7, Changhong control (www.cninfo.com.cn) 2023,December 23, Precision under the Kitchen and Announcement No.:2022-087,2022- 63 Sales of Marketing 1.08 1.08 0.00% 5000 No Cash - 2022,September 8, same Electronics goods bathroom price settlement 088,2022-089,2022-100,2023- controlling 2023,December Tech. Co., shareholder 044,2023-045,2023-047,2023- 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller CHANGHO Other December 7, Juchao Website enterprise NG(HK)TR Air conditioner 2023,December 23, (www.cninfo.com.cn) 64 control Sales of Marketing 69,999.52 69,999.52 2.91% 150,000.00 No Cash - ADINGLIM under the goods and part price settlement 2022,September 8, Announcement No.:2022-087,2022- ITED same 2023,December 088,2022-089,2022-100,2023- controlling 118 Annual Report 2023 shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Other Juchao Website CHANGHO enterprise December 7, control (www.cninfo.com.cn) NGELECT Refrigerator, 2023,December 23, under the Announcement No.:2022-087,2022- 65 RIC(AUST Sales of freezers ,washing Marketing 17,630.27 17,630.27 0.73% 150000 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- RALIA)PT controlling machine and part 2023,December shareholder 044,2023-045,2023-047,2023- Y.LTD. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) 2023,December 23, Orion.PDP. under the Announcement No.:2022-087,2022- 66 Sales of Refrigerator Marketing 4,478.34 4,478.34 0.19% 6,500.00 No Cash - 2022,September 8, same Co.,ltd goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Announcement No.:2022-087,2022- 67 EuropeElect Sales of Refrigerator Marketing 10,299.23 10,299.23 0.43% 10,300.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- rics.r.o controlling 2023,December shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Changhong enterprise December 7, (www.cninfo.com.cn) International control Refrigerator, 2023,December 23, Holdings under the Sales of freezers, Air Marketing Announcement No.:2022-087,2022- 68 11,246.60 11,246.60 0.47% 80,000.00 No Cash - 2022,September 8, (Hong same goods conditioner, price settlement 088,2022-089,2022-100,2023- 2023,December Kong) Co., controlling kitchen utensils 044,2023-045,2023-047,2023- Ltd. shareholder 19,2023 077,2023-078,2023-079. and ultimate 119 Annual Report 2023 controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Aichuang under the Announcement No.:2022-087,2022- 69 Sales of Marketing 407.43 407.43 0.02% 3,000.00 No Cash - 2022,September 8, Science & same IC goods price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Suchuan enterprise December 7, control (www.cninfo.com.cn) Hongmofan 2023,December 23, under the Announcement No.:2022-087,2022- 70 g Network Sales of Refrigerator Marketing 6.06 6.06 0.00% 5000 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Service Co., controlling 2023,December shareholder 044,2023-045,2023-047,2023- Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, control (www.cninfo.com.cn) Jiechuang 2023,December 23, under the Announcement No.:2022-087,2022- 71 Lithium Sales of Refrigerator Marketing 114.78 114.78 0.00% 3,000.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Battery controlling 2023,December shareholder 044,2023-045,2023-047,2023- Technology 19,2023 and ultimate 077,2023-078,2023-079. Co., Ltd. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Ansifei under the Print board Announcement No.:2022-087,2022- 72 Sales of Marketing 0.01 0.01 0.00% 3,000.00 No Cash - 2022,September 8, same Technology goods components price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller 120 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Qiruike under the Announcement No.:2022-087,2022- 73 Sales of Marketing 0.27 0.27 0.00% 3,000.00 No Cash - 2022,September 8, Technology same IC goods price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Qisai 2023,December 23, under the Announcement No.:2022-087,2022- 74 Microelectro Sales of Air conditioner Marketing 4.99 4.99 0.00% 3,000.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- nics Co., controlling 2023,December shareholder 044,2023-045,2023-047,2023- Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Zhongjiu enterprise December 7, control (www.cninfo.com.cn) Shining 2023,December 23, under the Announcement No.:2022-087,2022- 75 Medical Sales of Air conditioner Marketing 14.57 14.57 0.00% 3,000.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Qineng 2023,December 23, under the Announcement No.:2022-087,2022- 76 Zhongzheng Sales of Air conditioner Marketing 9.85 9.85 0.00% 3,000.00 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 121 Annual Report 2023 Sichuan Juchao Website December 7, Changhong (www.cninfo.com.cn) Controlling Providin 2023,December 23, Electronics Installation Announcement No.:2022-087,2022- 77 shareholder g Marketing 0.67 0.67 0.01% 3,000.00 No Cash - 2022,September 8, Holding and ultimate service price settlement 088,2022-089,2022-100,2023- services 2023,December Group Co., controller 044,2023-045,2023-047,2023- 19,2023 Ltd. 077,2023-078,2023-079. Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Announcement No.:2022-087,2022- 78 Marketing 139.00 139.00 2.35% 500 No Cash - 2022,September 8, Mold Plastic same g Labor service price settlement 088,2022-089,2022-100,2023- Tech. Co., controlling services 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control Spot (www.cninfo.com.cn) Sichuan 2023,December 23, under the Providin exchange, Announcement No.:2022-087,2022- 79 Changhong Marketing 12.75 12.75 0.22% 500 No - 2022,September 8, same g Labor service Jijia Fine price Bank 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. acceptance 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Aichuang under the Providin Announcement No.:2022-087,2022- 80 Marketing 474.35 474.35 8.01% 3,000.00 No Cash - 2022,September 8, Science & same g Labor service price settlement 088,2022-089,2022-100,2023- Technology controlling services 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Providin December 7, Juchao Website 81 Marketing 46.42 46.42 0.78% 3,000.00 No Cash - enterprise g Labor service Huafeng price settlement 2023,December 23, (www.cninfo.com.cn) control services 122 Annual Report 2023 Technology under the 2022,September 8, Announcement No.:2022-087,2022- Co., Ltd. same 2023,December 088,2022-089,2022-100,2023- controlling 19,2023 044,2023-045,2023-047,2023- shareholder and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Zhiyijia under the Providin Announcement No.:2022-087,2022- 82 Service fee Marketing 18.54 18.54 0.31% 10000 No Cash - 2022,September 8, Network same g price settlement 088,2022-089,2022-100,2023- Technology controlling services 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Juchao Website December 7, (www.cninfo.com.cn) Sichuan 2023,December 23, Providin Announcement No.:2022-087,2022- 83 Changhong Controlling Marketing 1,139.57 1,139.57 19.25% 10000 No Cash - 2022,September 8, g Labor service Electric Co., shareholder price settlement 088,2022-089,2022-100,2023- services 2023,December Ltd. 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Announcement No.:2022-087,2022- 84 Technical service Marketing 12.40 12.40 0.21% 10000 No Cash - 2022,September 8, Device same g fee price settlement 088,2022-089,2022-100,2023- Technology controlling services 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Installation December 7, Juchao Website enterprise Changhong Providin service, 2023,December 23, (www.cninfo.com.cn) 85 control Marketing 26.80 26.80 0.45% 10000 No Cash - g Network under the maintenance price settlement 2022,September 8, Announcement No.:2022-087,2022- services Technology same service 2023,December 088,2022-089,2022-100,2023- controlling 123 Annual Report 2023 Co., Ltd. shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Other Juchao Website Mianyang enterprise December 7, control (www.cninfo.com.cn) Huafeng 2023,December 23, under the Providin Announcement No.:2022-087,2022- 86 Hulian Repair Service Marketing 34.98 34.98 0.59% 3,000.00 No Cash - 2022,September 8, same g price settlement 088,2022-089,2022-100,2023- Technology controlling services 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Changhong 2023,December 23, under the Providin Announcement No.:2022-087,2022- 87 Huayi Marketing 134.40 134.40 2.27% 500 No Cash - 2022,September 8, same g Labor service Compressor price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Announcement No.:2022-087,2022- 88 Marketing 37.90 37.90 0.64% 10000 No Cash - 2022,September 8, Minsheng same g Labor service price settlement 088,2022-089,2022-100,2023- Logistics controlling services 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Hefei (www.cninfo.com.cn) control 2023,December 23, Changhong Providin Announcement No.:2022-087,2022- 89 under the Marketing 0.00 0.00 0.00% 10000 No Cash - 2022,September 8, g Labor service Industry same price settlement 088,2022-089,2022-100,2023- services 2023,December Co., Ltd. controlling 044,2023-045,2023-047,2023- shareholder 19,2023 077,2023-078,2023-079. and ultimate 124 Annual Report 2023 controller Other Juchao Website enterprise December 7, Sichuan (www.cninfo.com.cn) control Service Exp. 2023,December 23, under the Providin Announcement No.:2022-087,2022- 90 Appliance Marketing 231.55 231.55 3.91% 10000 No Cash - 2022,September 8, same g Labor service Service price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Chain Co., 044,2023-045,2023-047,2023- shareholder 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan 2023,December 23, under the Providin Announcement No.:2022-087,2022- 91 Aoku Marketing 0.45 0.45 0.01% 3,000.00 No Cash - 2022,September 8, same g Labor service Technology price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Announcement No.:2022-087,2022- 92 Marketing 6.57 6.57 0.11% 3,000.00 No Cash - 2022,September 8, International same g Maintenance fees price settlement 088,2022-089,2022-100,2023- Hotel Co., controlling services 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Chonghong 2023,December 23, under the Providin Announcement No.:2022-087,2022- 93 Network Marketing 12.87 12.87 0.22% 10000 No Cash - 2022,September 8, same g Labor service price settlement 088,2022-089,2022-100,2023- Technology controlling services 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 125 Annual Report 2023 Other enterprise Juchao Website Sichuan control December 7, (www.cninfo.com.cn) Changhong under the 2023,December 23, provide Announcement No.:2022-087,2022- 94 Electronic same Marketing 0.72 0.72 0.01% 10000 No Cash - 2022,September 8, Labor service labor price settlement 088,2022-089,2022-100,2023- Products controlling 2023,December 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 077,2023-078,2023-079. and ultimate controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan 2023,December 23, under the Providin Announcement No.:2022-087,2022- 95 Qiruike Marketing 9.57 9.57 0.16% 3,000.00 No Cash - 2022,September 8, same g Labor service Technology price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Sichuan Juchao Website enterprise December 7, Changhong control (www.cninfo.com.cn) 2023,December 23, Precision under the Providin Announcement No.:2022-087,2022- 96 Marketing 0.43 0.43 0.01% 10000 No Cash - 2022,September 8, same g Labor service Electronics price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Technology shareholder 044,2023-045,2023-047,2023- 19,2023 Co., Ltd and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, (www.cninfo.com.cn) Qineng control 2023,December 23, Providin Installation Announcement No.:2022-087,2022- 97 Zhongzheng under the Marketing 10.89 10.89 0.18% 3,000.00 No Cash - 2022,September 8, g same service price settlement 088,2022-089,2022-100,2023- Technology services 2023,December controlling 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 077,2023-078,2023-079. and ultimate 126 Annual Report 2023 controller Other Juchao Website enterprise December 7, Yuanxin control (www.cninfo.com.cn) 2023,December 23, Finance under the Providin Announcement No.:2022-087,2022- 98 Consultation Marketing 90.78 90.78 1.53% 10000 No Cash - 2022,September 8, same g Lease Co., service price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Announcement No.:2022-087,2022- 99 Technical service Marketing 25.90 25.90 0.44% 3,000.00 No Cash - 2022,September 8, Property same g fee price settlement 088,2022-089,2022-100,2023- Service Co., controlling services 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Changhong under the Providin Installation Announcement No.:2022-087,2022- 100 Marketing 4.60 4.60 0.08% 10000 No Cash - 2022,September 8, same g Real Estate service price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, control (www.cninfo.com.cn) Jiechuang Installation 2023,December 23, under the Providin Announcement No.:2022-087,2022- 101 Lithium service, Labor Marketing 227.77 227.77 3.85% 3,000.00 No Cash - 2022,September 8, same g price settlement 088,2022-089,2022-100,2023- Battery controlling services service 2023,December shareholder 044,2023-045,2023-047,2023- Technology 19,2023 and ultimate 077,2023-078,2023-079. Co., Ltd. controller 127 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Hongwei under the Providin Technical service Announcement No.:2022-087,2022- 102 Marketing 6.97 6.97 0.12% 10000 No Cash - 2022,September 8, same g TechNlogy fee price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co.,Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Guangdong 2023,December 23, under the Providin Announcement No.:2022-087,2022- 103 Changhong same g Labor service Marketing 62.74 62.74 1.06% 10000 No Cash - 2022,September 8, Electronics price settlement 088,2022-089,2022-100,2023- controlling services 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Qisai under the Providin Installation Announcement No.:2022-087,2022- 104 Microelectro Marketing 4.46 4.46 0.08% 3,000.00 No Cash - 2022,September 8, same g service price settlement 088,2022-089,2022-100,2023- nics Co., controlling services 2023,December Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website Sichuan enterprise December 7, control (www.cninfo.com.cn) Changhong Water, electricity, 2023,December 23, under the Announcement No.:2022-087,2022- 105 Device Sales of and compressed Marketing 14.81 14.81 0.00% 5000 No Cash - 2022,September 8, same goods price settlement 088,2022-089,2022-100,2023- Technology controlling air 2023,December shareholder 044,2023-045,2023-047,2023- Co., Ltd. 19,2023 and ultimate 077,2023-078,2023-079. controller 106 Hefei Other Rent to Rental apartment, Marketing 15.98 15.98 0.12% 4,000.00 No Cash - December 7, Juchao Website Changhong enterprise the warehouses price settlement 128 Annual Report 2023 Industrial control related 2023,December 23, (www.cninfo.com.cn) Co., Ltd. under the party 2022,September 8, Announcement No.:2022-087,2022- same 2023,December 088,2022-089,2022-100,2023- controlling shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Rent to 2023,December 23, Aichuang under the Announcement No.:2022-087,2022- 107 the Warehouse for Marketing 4.86 4.86 0.04% 3,000.00 No Cash - 2022,September 8, same Technology related rent price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Rent to 2023,December 23, Ailian under the Announcement No.:2022-087,2022- 108 Science & same the Warehouse for Marketing 0.35 0.35 0.00% 3,000.00 No Cash - 2022,September 8, related rent price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December party 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Rent to 2023,December 23, under the Announcement No.:2022-087,2022- 109 Aoku same the Warehouse for Marketing 4.34 4.34 0.03% 3,000.00 No Cash - 2022,September 8, Technology related rent price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Rent to December 7, Juchao Website 110 Hongxin enterprise the Marketing 0.44 0.44 0.00% 4000 No Cash - 2023,December 23, (www.cninfo.com.cn) Rental apartment Software control related price settlement 2022,September 8, Announcement No.:2022-087,2022- Co., Ltd. under the party 129 Annual Report 2023 same 2023,December 088,2022-089,2022-100,2023- controlling 19,2023 044,2023-045,2023-047,2023- shareholder 077,2023-078,2023-079. and ultimate controller Other Juchao Website enterprise December 7, Sichuan (www.cninfo.com.cn) control Service Exp. Rent to 2023,December 23, under the Announcement No.:2022-087,2022- 111 Appliance same the Rental apartment Marketing 16.24 16.24 0.12% 4000 No Cash - 2022,September 8, Service related price settlement 088,2022-089,2022-100,2023- controlling 2023,December Chain Co., party 044,2023-045,2023-047,2023- shareholder 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Rent to 2023,December 23, under the Announcement No.:2022-087,2022- 112 Qiruik same the Lease of factory Marketing 4.73 4.73 0.04% 3,000.00 No Cash - 2022,September 8, Technology related price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Juchao Website December 7, (www.cninfo.com.cn) Sichuan Rent to 2023,December 23, Changhong Controlling the Lease of factory, Marketing Announcement No.:2022-087,2022- 113 80.70 80.70 0.60% 4000 No Cash - 2022,September 8, Electric Co., shareholder related equipment price settlement 088,2022-089,2022-100,2023- 2023,December Ltd. party 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Sichuan December 7, Juchao Website Controlling Lease Changhong 2023,December 23, (www.cninfo.com.cn) shareholder from 114 Electronics Lease of factory Marketing 0.00 0.00 0.00% 3,000.00 No Cash - 2022,September 8, Announcement No.:2022-087,2022- and ultimate related price settlement Holding 2023,December 088,2022-089,2022-100,2023- controller parties Group Co., 19,2023 044,2023-045,2023-047,2023- 130 Annual Report 2023 Ltd. 077,2023-078,2023-079. Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Rent to 2023,December 23, under the Rental apartment, Announcement No.:2022-087,2022- 115 Changhong same the warehouses,plants, Marketing 462.10 462.10 3.44% 4000 No Cash - 2022,September 8, Jijia Fine related price settlement 088,2022-089,2022-100,2023- controlling equipment 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan (www.cninfo.com.cn) control Changhong Rent to 2023,December 23, under the Announcement No.:2022-087,2022- 116 Precision same the Rental apartment Marketing 6.83 6.83 0.05% 4000 No Cash - 2022,September 8, Electronics related price settlement 088,2022-089,2022-100,2023- controlling 2023,December Tech. Co., party 044,2023-045,2023-047,2023- shareholder 19,2023 Ltd. and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Rent to 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 117 Minsheng the Rental apartment, Marketing 25.96 25.96 0.19% 4000 No Cash - 2022,September 8, same related office, factory price settlement 088,2022-089,2022-100,2023- Logistics controlling 2023,December party 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Serviced (www.cninfo.com.cn) Sichuan control Rent to apartment, 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 118 Mold Plastic the warehouse, Marketing 933.88 933.88 6.94% 4000 No Cash - 2022,September 8, same related workshop, price settlement 088,2022-089,2022-100,2023- Tech. Co., controlling 2023,December party equipment and 044,2023-045,2023-047,2023- Ltd. shareholder 19,2023 living quarters and ultimate 077,2023-078,2023-079. controller 131 Annual Report 2023 Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Rent to 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 119 Device the Marketing 214.71 214.71 1.60% 4000 No Cash - 2022,September 8, same Lease of factory related price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December party 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) Rent to 2023,December 23, Zhiyijia under the Announcement No.:2022-087,2022- 120 Network the Marketing 18.83 18.83 0.14% 4000 No Cash - 2022,September 8, same Rental apartment related price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December party 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Changhong control (www.cninfo.com.cn) Rent to 2023,December 23, Huayi under the Announcement No.:2022-087,2022- 121 the Warehouse for Marketing 1.06 1.06 0.01% 500 No Cash - 2022,September 8, same Compressio related rent price settlement 088,2022-089,2022-100,2023- controlling 2023,December n Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Chengdu control (www.cninfo.com.cn) Leasing 2023,December 23, Changhong under the Announcement No.:2022-087,2022- 122 Electronic from Leasing office Marketing 85.70 85.70 0.64% 4000 No Cash - 2022,September 8, same related price settlement 088,2022-089,2022-100,2023- Technology controlling 2023,December party 044,2023-045,2023-047,2023- Co., Ltd. shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller 123 Guangdong Other Leasing Lease of staff Marketing 14.54 14.54 0.11% 4000 No Cash - December 7, Juchao Website Changhong enterprise from dormitory, plant price settlement 132 Annual Report 2023 Electronics control related 2023,December 23, (www.cninfo.com.cn) Co., Ltd. under the party 2022,September 8, Announcement No.:2022-087,2022- same 2023,December 088,2022-089,2022-100,2023- controlling shareholder 19,2023 044,2023-045,2023-047,2023- and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Hefei Leasing 2023,December 23, under the Announcement No.:2022-087,2022- 124 Changhong same from lease of plant Marketing 217.35 217.35 1.62% 4000 No Cash - 2022,September 8, Industrial related price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Leasing 2023,December 23, under the Announcement No.:2022-087,2022- 125 Jiahong same from Lease of staff Marketing 43.18 43.18 0.32% 15000 No Cash - 2022,September 8, Industrial related dormitory price settlement 088,2022-089,2022-100,2023- controlling 2023,December Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Juchao Website December 7, (www.cninfo.com.cn) Sichuan Leasing Lease of 2023,December 23, Changhong Controlling from Marketing Announcement No.:2022-087,2022- 126 laboratory and 372.13 372.13 2.77% 4000 No Cash - 2022,September 8, Electric Co., shareholder related price settlement 088,2022-089,2022-100,2023- workshop 2023,December Ltd. party 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Sichuan December 7, Controlling Leasing Juchao Website Changhong Lease of staff 2023,December 23, 127 Electronics shareholder from Marketing 14.33 14.33 0.11% 15000 No Cash - (www.cninfo.com.cn) and ultimate related dormitory price settlement 2022,September 8, Holding Announcement No.:2022-087,2022- controller party 2023,December Group Co., 133 Annual Report 2023 Ltd. 19,2023 088,2022-089,2022-100,2023- 044,2023-045,2023-047,2023- 077,2023-078,2023-079. Other Juchao Website enterprise December 7, Changhong control (www.cninfo.com.cn) Rent to 2023,December 23, Huayi under the Lease of staff Announcement No.:2022-087,2022- 128 the Marketing 11.58 11.58 0.09% 54000 No Cash - 2022,September 8, same Compressio related dormitory price settlement 088,2022-089,2022-100,2023- controlling 2023,December n Co., Ltd. party 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Sichuan Other Juchao Website Changhong enterprise December 7, Purchase Spot (www.cninfo.com.cn) control Intelligent and 2023,December 23, under the Information exchange, Announcement No.:2022-087,2022- 129 Manufacturi construc Marketing 210.04 210.04 0.74% 3000 No - 2022,September 8, same management tion of price Bank 088,2022-089,2022-100,2023- ng controlling system project 2023,December fixed acceptance 044,2023-045,2023-047,2023- Technology shareholder 19,2023 assets and ultimate 077,2023-078,2023-079. Co., Ltd. controller Juchao Website December 7, (www.cninfo.com.cn) Sichuan Leasing Lease of 2023,December 23, Changhong Controlling from Marketing Announcement No.:2022-087,2022- 130 laboratory and 42.86 42.86 0.15% 2,000.00 No Cash - 2022,September 8, Electric Co., shareholder related price settlement 088,2022-089,2022-100,2023- workshop 2023,December Ltd. party 044,2023-045,2023-047,2023- 19,2023 077,2023-078,2023-079. Other Juchao Website enterprise Purchase Knowledge December 7, (www.cninfo.com.cn) Sichuan control and management, 2023,December 23, Announcement No.:2022-087,2022- 131 Hongxin under the construc integration and Marketing 306.14 306.14 1.08% 2000 No Cash - 2022,September 8, Software same tion of functional price settlement 088,2022-089,2022-100,2023- 2023,December Co., Ltd. controlling fixed improvement 044,2023-045,2023-047,2023- shareholder assets projects 19,2023 077,2023-078,2023-079. and ultimate 134 Annual Report 2023 controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Purchase 2023,December 23, under the Information Announcement No.:2022-087,2022- 132 Hongxin same Intangibl Marketing 319.30 319.30 1.13% 2000 No Cash - 2022,September 8, Software management price settlement 088,2022-089,2022-100,2023- controlling e assets 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, Sichuan control (www.cninfo.com.cn) 2023,December 23, Zhiyijia under the Purchase Announcement No.:2022-087,2022- 133 Network Marketing 4.05 4.05 0.01% 2000 No Cash - 2022,September 8, same of fixed TV price settlement 088,2022-089,2022-100,2023- Technology controlling assets 2023,December Co., Ltd. shareholder 044,2023-045,2023-047,2023- 19,2023 and ultimate 077,2023-078,2023-079. controller Juchao Website Sichuan December 7, (www.cninfo.com.cn) Changhong Controlling Purchase New plant 2023,December 23, Announcement No.:2022-087,2022- 134 Electronics shareholder of fixed construction Marketing 169.81 169.81 0.60% 15000 No Cash - 2022,September 8, Holding and ultimate price settlement 088,2022-089,2022-100,2023- assets project 2023,December Group Co., controller 044,2023-045,2023-047,2023- Ltd. 19,2023 077,2023-078,2023-079. Other enterprise Juchao Website Sichuan December 7, control (www.cninfo.com.cn) Changhong Purchase 2023,December 23, under the Information Announcement No.:2022-087,2022- 135 Jiahua fixed Marketing 27.58 27.58 0.10% 2000 No Cash - 2022,September 8, same management price settlement 088,2022-089,2022-100,2023- Information assets 2023,December controlling 044,2023-045,2023-047,2023- Co., ltd. 19,2023 shareholder 077,2023-078,2023-079. and ultimate 135 Annual Report 2023 controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Sichuan Purchase 2023,December 23, under the Information Announcement No.:2022-087,2022- 136 Qiruik same of fixed Marketing 28.80 28.80 0.10% 15000 No Cash - 2022,September 8, Technology management price settlement 088,2022-089,2022-100,2023- controlling assets 2023,December Co., Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Other Juchao Website enterprise December 7, control (www.cninfo.com.cn) Yuanxin Financin 2023,December 23, under the Financing Announcement No.:2022-087,2022- 137 Financial same g Marketing 47,232.36 47,232.36 82,000.00 No Cash - 2022,September 8, Lease Co., business price settlement 088,2022-089,2022-100,2023- controlling business 2023,December Ltd. 044,2023-045,2023-047,2023- shareholder 19,2023 and ultimate 077,2023-078,2023-079. controller Total -- -- 1,273,229.01 -- -- -- -- -- -- -- Detail of sales return with major amount involved Not applicable Report the actual implementation of the daily related 1 It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel and power transactions which were projected about their total amount by from Sichuan Changhong and its subsidiary by the Company for year of 2023 was 2785 million yuan at most (tax-excluded), actually 1,851.6481 million yuan types during the reporting period (if applicable) occurred in reporting period. 2. It is estimated that the related transaction amount resulted by purchasing compressors, Sell goods, accept or provide services with Changhong Huayi and its subsidiary by the Company for year of 2023 was 545 million yuan at most (tax-excluded), actually 565.0808 million yuan occurred in reporting period. In 2023, the total amount of related party transactions between the Company and Sichuan Changhong and its subsidiaries (including Changhong Huayi and its subsidiaries) is estimated to be no more than 16,058,000,000 yuan, and the actual amount incurred is 12,398,976,900 yuan, and the actual total amount of routine related party transactions between the Company and Sichuan Changhong and its subsidiaries (including Changhong Huayi and its subsidiaries) does not exceed the estimated total amount, which is in line with the regulations of Article 25 of "Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 7-Transactions and Related Party Transactions". 3. It is estimated that the related transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and molds etc. from 136 Annual Report 2023 Sichuan Changhong and its subsidiary by the Company for year of 2023 was 20 million yuan at most (tax-excluded), actually 6.9993 million yuan occurred in reporting period. 4. It is estimated that the related transaction amount resulted by selling goods and providing fuel and power to Sichuan Changhong and its subsidiary by the Company for year of 2023 was 10,468 million yuan at most (tax-excluded), actually 8,391.3356 million yuan occurred in reporting period. 5. It is estimated that the related transaction amount resulted by leasing business to Sichuan Changhong and its subsidiary by the Company for year of 2023 was 40 million yuan at most (tax-excluded), actually 24.6539 million yuan occurred in reporting period. 6. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng Logistics Co., Ltd. by the Company for year of 2023 was 820 million yuan at most (tax-excluded), actually 683.2247 million yuan occurred in reporting period. 7. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance Service Chain Co., Ltd. by the Company for year of 2023 was 450 million yuan at most actually 318.3306 million yuan occurred in reporting period. 8. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor service etc. to Sichuan Changhong and its subsidiary by the Company for year of 2023 was 110 million yuan at most (tax-excluded), actually 85.3803 million yuan occurred in reporting period. 9. It is estimated that the related transaction amount resulted by selling goods and leasing business from Sichuan Changhong Electronics Holding Group Co., Ltd and its subsidiary by the Company for year of 2023 was 95 million yuan at most (tax-excluded), actually 61.8979 million yuan occurred in reporting period. 10. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and purchasing equipment etc. from Sichuan Changhong Electronics Holding Group Co., Ltd. and its subsidiary by the Company for year of 2023 was 430 million yuan at most (tax- excluded), actually 271.4154 million yuan occurred in reporting period. 11. It is estimated that the related transaction amount resulted by received the financing lease, commercial factoring and bill financing from Yuanxin Financial Lease Co., Ltd was 820 million yuan at most, actually 472.3236 million yuan occurred in reporting period. Reasons for major differences between trading price and Not applicable market reference price (if applicable) 137 Annual Report 2023 (ii) Related transactions by assets acquisition and sold □Applicable √ Not applicable There are no related transactions by assets acquisition and sold in the period (iii) Related party transaction of joint foreign investment √Applicable □Not applicable Total assets Main Registered of the Net assets of Net profit of Name of the Associati business of capital of the invested the invested the invested Co-investor invested on the invested invested enterprise enterprise enterprise enterprise enterprise enterprise (RMB (RMB '0,000) (RMB '0,000) '0,000) Controlli ng Engagement sharehold in equity Sichuan Changhong Electronic er and investment, (Group) Co., Ltd., Sichuan ultimate investment Changhong Electric Co.,Ltd., controller management, Sichuan Shenwan Hongyuan , other asset Changhong Equity Investment enterprise management Management Co., Ltd., Guangdong s Changhong and other Changhong Electronics Co., Ltd., controlled Group Sichuan activities Sichuan Qiruike Technology Co., by the Shenwan with private Ltd., Sichuan Changhong Power same Hongyuan equity funds Supply Co., Ltd., Sichuan controllin 1,500 million Strategic New (registration 51,634.69 51,514.91 -137.78 Changhong New Energy Technology g yuan Industry Parent and filing Co., Ltd., Changhong Sanjie New sharehold Fund Partnership must be Energy Co., Ltd., Sichuan er and (Limited completed in Changhong Green Environmental ultimate Partnership) Asset Science and Technology Co., Ltd., controller Management Yibin Red-star Electronics Co., Ltd., , and Association Sichuan Changhong Digital listed of China Technology Co., Ltd., and companie before the Changhong Huayi Compressor s with engagement Co.,Ltd. natural in business persons activities). as directors Sichuan Hongyun Venture Equity For Sichuan General Investment Maqnagement Co., Ltd., controllin Hongyun items: Sichuan Changhong Electronics g Venture Capital venture 148 million 5,935.54 5,935.54 15.54 Holding Group Co., Ltd., Sichuan sharehold Partnership capital Changhong Electric Co., Ltd. er and (Limited (limited to 138 Annual Report 2023 ultimate partnership) unlisted controller enterprises). (Except for items that are subject to approval according to law, business activities shall be independentl y carried out according to law by virtue of business license. Accumulated amount of other litigation that does not meet the disclosure standard of major No litigation(If any) Note: Sichuan Hongyun Venture Capital Partnership is jointly established by the related parties Changhong Group, Sichuan Changhong and unrelated party Sichuan Hongyun Venture Equity Investment Management Co., Ltd. and the Company. For details, please refer to the relevant announcement disclosed by the Company in the designated information disclosure media Securities Times, China Securities Journal and CNINF (www.cninfo.com.cn) on January 17, 2023. (iv) Connect of related liability and debt √ Applicable □ Not applicable Whether has non-operational contact of related liability and debts or not □Yes √ No No non-operational contact of related liability or debts in Period (v) Contact with the related finance companies √ Applicable □ Not applicable Deposit business Amount for the Period Maximum daily The total Opening Total deposit Ending Balance deposit limit (In Deposit interest amount Related party Relationship balance (In 10 amount for the (10 thousand 10 thousand rate range withdrawn in the thousand yuan) Period (10 yuan) yuan) Period (10 thousand yuan) thousand yuan) Sichuan Other enterprises Changhong controlled by the 450,000.00 0.42%-3.50% 346,499.99 4,552,002.03 4,465,753.05 432,748.97 Group Finance same controlling Co., Ltd. shareholder and 139 Annual Report 2023 ultimate controller Credit extension or other financial business Total amount ( 10 Actual amount ( 10 Related party Relationship Type of business thousand yuan) thousand yuan) Other enterprises Sichuan Changhong Group controlled by the same Other financial services - 300,000.00 89,175.08 Finance Co., Ltd. controlling shareholder note issuance and ultimate controller Other enterprises Sichuan Changhong Group controlled by the same Other financial services - 300,000.00 74,017.06 Finance Co., Ltd. controlling shareholder note discounting and ultimate controller Other enterprises Sichuan Changhong Group controlled by the same Other financial services - 600,000.00 340.72 Finance Co., Ltd. controlling shareholder note discounting and ultimate controller Note 1: As of December 31,2023, registered capital of Changhong Finance Company is 2,693,938,365.84 yuan. The Company and Changhong Huayi holds 14.96% equity of Chonghong Finance Company respectively, and controlling shareholder of the Company -Sichuan Changhong Electric Co., Ltd and its controlling shareholder Sichuan Changhong Electronics Holding Group Co., Ltd holds 35.04% equity of Changhong Finance Company respectively. Note 2: After deliberated and approved by the 35th session of 9th BOD and 2thextraordinary shareholders general meeting of 2020 held on 16 October 2023 and 3 November , it is agreed to continue the financial services cooperation between the Company and Changhong Finance Company and renew the “Financial Service Agreement” for a period of three years. Changhong Finance Company will provides a series of financial services such as deposit and loans within scope of operation according to the requirements of Company and its subsidiaries(Excluding Zhongke Meiling and its subsidiaries). (vi) Transactions between the finance company controlled by the Company and related parties □ Applicable √ Not applicable (vii) Other related party transactions √ Applicable □ Not applicable 1. On September 7, 2023, after review and approval at the 34th meeting of the Tenth Board of Directors and the 25th meeting of the Tenth Board of Supervisors, it was agreed to extend the duration of Sichuan Hongyun New Generation of Information Technology Venture Capital Fund Partnership (Limited Partnership) for one year (the specific expiration date is subject to the industrial and commercial registration) (referred to as "Hongyun Fund Phase I" for short), that is, the cumulative duration of such fund after this extension is 9 years, and it was agreed that the Company and other partners signed the Amendment to the Partnership Agreement of Sichuan Hongyun New Generation of Information Technology Venture Capital Fund Partnership (Limited Partnership). 2. On September 7, 2023, it was reviewed and approved by the 34th meeting of the Tenth Board of Directors and the 25th meeting of the Tenth Board of Supervisors, and it was agreed that the amount of daily related transactions 140 Annual Report 2023 between the Company and its subsidiaries and Changhong Group and its subsidiaries on purchase of commodities and raw materials in 2023 should not exceed RMB 25 million (excluding tax); It was estimated that the amount of daily related transactions between the Company and its subsidiaries and Sichuan Changhong Electronic Component Co., Ltd. (hereinafter referred to as "Electronic Component Company") in 2023 would not exceed RMB 10 million (excluding tax). After this increase estimation, the total amount of daily related transactions between the Company and its subsidiaries and Changhong Group (excluding Sichuan Changhong) would not exceed RMB 450 million (excluding tax), and the total amount of daily related transactions with Sichuan Changhong and its subsidiaries (excluding Changhong Huayi, but including Electronic Component Company, etc.) would not exceed RMB 15.51 billion (excluding tax). 3. On October 16, 2023 and November 3, 2023, after review and approval by the 35th meeting of the Tenth Board of Directors, the 26th meeting of the Tenth Board of Supervisors and the Second Extraordinary General Meeting of Shareholders in 2023, it was agreed that the Financial Service Agreement between the Company and Changhong Finance Company would be renewed for another three years, and it was agreed that maximum deposit balance (including accrued interest and handling fee) and the maximum outstanding loan principal and interest of the Company and its subsidiaries (excluding Zhongke Meiling and its subsidiaries) in Changhong Finance Company would not exceed RMB 4.5 billion per day within the three-year validity period from the effective date of the new agreement. 4. On April 4, 2023 and December 21, 2023, after review and approval at the 37th meeting of the Tenth Board of Directors, the 28th meeting of the Tenth Board of Supervisors and the Third Extraordinary General Meeting of Shareholders in 2023, it was agreed the total amount of daily related transactions between the Company and its subsidiaries and related parties in 2024 would not exceed RMB 18,822 million (excluding tax); It was agreed that the Company and Sichuan Changhong Group Finance Co., Ltd. would continue to carry out related transactions of financial services such as deposits and loans in 2024. 5. On December 18, 2023, it was reviewed and approved by the 38th meeting of the Tenth Board of Directors and the 29th meeting of the Tenth Board of Supervisors, and it was agreed that the amount of daily related transactions between the Company and its holding subsidiaries and Changhong Group and its subsidiaries on purchase of commodities and raw materials in 2023 should not exceed RMB 75 million (excluding tax). After this increase estimation, the total amount of daily related transactions between the Company and its subsidiaries and Changhong Group (excluding Sichuan Changhong) in 2023 would not exceed RMB 525 million. Related searches for disclosure website of interim report with major related transaction concerned Interim report Disclosure date Website for disclosure Resolution Notice of the 34th session of 10thBOD (2023-044) Resolution Notice of the 25th session of 10thBOS (2023-045) Juchao Website Announcement on Extension and Related Transactions of Sichuan September 8,2023 www.cninfo.com.cn Hongyun New Generation of Information Technology Venture Capital Fund Partnership (Limited Partnership)(2023-046) Resolution Notice of the 34th session of 10thBOD (2023-044) Juchao Website Resolution Notice of the 25th session of 10thBOS (2023-045) September 8,2023 www.cninfo.com.cn Announcement on Increasing the Daily Related Party Transactions in 141 Annual Report 2023 2023(2023-047) Resolution Notice of the 35th session of 10thBOD (2023-053) Resolution Notice of the 26th session of 10thBOS (2023-053) Announcement on Renewing the Financial Services Agreement and October 18,2023, November Juchao Website Related Transactions with Sichuan Changhong Group Finance Co., Ltd. 4,2023 www.cninfo.com.cn (2023-054) Resolution Notice of Second extraordinary general meeting of 2023 (2023-065) Resolution Notice of the 37th session of 10thBOD (2023-066) Resolution Notice of the 28th session of 10thBOS (2023-067) Announcement on the daily related transactions of 2024(2023-068) Notice on Expected Continuing Related Transactions with Sichuan Changhong Group Finance Company in 2024 (2023-069) December 5,2023, December Juchao Website Resolution Notice of Fourth extraordinary general meeting of 2022 22, 2023 www.cninfo.com.cn Notice on Expected Continuing Related Transactions with Sichuan Changhong Group Finance Company in 2023 (2022-90) Resolution Notice of Third extraordinary general meeting of 2023 (2023- 080) Resolution Notice of the 38th session of 10thBOD (2023-077) Resolution Notice of the 29th session of 10thBOS (2023-078) Juchao Website December 19,2023 Increase the forecast announcement of daily related party transactions for www.cninfo.com.cn year of 2023 (2023-079) XV. Significant contract and implementations (i) Entrust, contract and leasing 1. Entrust □Applicable √ Not applicable No entrust in Period. 2. Contract □Applicable √ Not applicable No contract in Period. 3. Leasing □Applicable √ Not applicable No leasing in the period (ii) Major guarantee √ Applicable □ Not applicable 142 Annual Report 2023 In RMB 10,000 Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries) Counter Collatera Complete Name of the guarante Guarantee Related Announcement Actual guarantee l (if Guarantee implemen Company Guarantee limit Actual date of happening Guarantee type e (if for related disclosure date limit applicabl term tation or guaranteed applicab party e) not le) - - - - - - - - - - - Total approving external guarantee in report period (A1) 0 Total actual occurred external guarantee in report period (A2) 0 Total actual balance of external guarantee at the end of report Total approved external guarantee at the end of report period ( A3) 0 0 period (A4) Guarantee between the Company and the subsidiaries Counter Collatera Complete Name of the guarante Guarantee Related Announcement Actual guarantee l (if Guarantee implemen Company Guarantee limit Actual date of happening Guarantee type e (if for related disclosure date limit applicabl term tation or guaranteed applicab party e) not le) Joint liability March 10,2022 2,000.00 Yes 1 year Yes No guaranty Joint liability March 28,2022 7,000.00 Yes 1 year Yes No Announcement No.: guaranty 2021-091,2021- Joint liability Zhongshan April 22,2022 18,000.00 Yes 1 year Yes No 092,2021-096,2021-109 guaranty Changhong Electric 140,000.00 N/A released on December Joint liability Co., Ltd. May 6,2022 6,000.00 Yes 1 year Yes No 7,2021 and December guaranty 24, 2021 Joint liability June 10,2022 10,000.00 Yes 1 year Yes No guaranty Joint liability June 25,2022 13,000.00 Yes 1 year Yes No guaranty 143 Annual Report 2023 Joint liability July 2,2022 20,000.00 Yes 1 year Yes No guaranty Joint liability August 19,2022 5,000.00 Yes 1 year Yes No guaranty Joint liability October 11,2022 15,000.00 Yes 1 year No No guaranty Joint liability April 7,2023 6,000.00 Yes 1 year No No guaranty Joint liability April 24,2023 10,000.00 Yes 1 year No No guaranty Joint liability June 8,2023 10,000.00 Yes 1 year No No guaranty Announcement No.: Joint liability June 27,2023 7,000.00 Yes 1 year No No 2022-087,2022-088, guaranty 2022-091 and 2022-100 July 4,2023 10,000.00 Joint liability 150,000.00 Yes 1 year No No released on December guaranty 7,2022 and December July 10,2023 20,000.00 Joint liability Yes 1 year No No 23,2022 guaranty July 28,2023 5,000.00 Joint liability Yes 1 year No No guaranty August 29,2023 15,000.00 Joint liability Yes 1 year No No guaranty November 2,2023 5,000.00 Joint liability Yes 1 year No No guaranty Announcember No.: 2023-066,2023- 067,2023-070,2023-080 130,000.00 - - - - - - - released on December 5,2023 and December 144 Annual Report 2023 22, 2023 Announcement No.: Joint liability June 6,2022 3,000.00 Yes 1 year Yes No 2021-091,2021- guaranty 092,2021-096,2021-109 Joint liability Yes July 7,2022 4,000.00 Yes 1 year No released on December guaranty 16,000.00 7, Joint liability Yes October 25,2022 2,000.00 Yes 1 year No 2021, December guaranty 24,2021,December Joint liability December 8,2022 3,500.00 Yes 11.2 months No No 24,2021 guaranty Changhong Announcement No.: MeilingRidian 2022-087,2022- Technology Co., 088,2022-091,2022-100 Joint liability 16,000.00 July 10,2023 4,000.00 Yes 1 year No No Ltd. released on December guaranty 7,2022 December 23, 2022 Announcement No.: 2023-066,2023- 067,2023-07, 2023-080 14,500.00 - - - - - - - released on December 5,2023, December 22, 2023 Announcement No.: Joint liability 2021-091,2021- September 20,2022 2,000.00 Yes 4.5 months Yes No guaranty ZhongkeMeiling 092,2021-096,2021-109 26,000.00 Cryogenic released on December Joint liability Technology Co., 7, 2021, December 24, November 14,2022 5,000.00 Yes 7.2 months Yes No guaranty Ltd. 2021 Announcember No.: 20,000.00 - - - - - - - 2022-087,2022- 145 Annual Report 2023 088,2022-091,2022-100 released on December 7, 2022, December 23, 2022 Announcember No.: 2023-066,2023- 067,2023-070,2023-80 10,000.00 - - - - - - - released on December 5, 2023, December 22, 2023 Announcember No.: Joint liability 2020-097,2020- September 24,2021 5,000.00 Yes 1 year Yes No guaranty 098,2020-101,2020-107 100,000.00 released on December Joint liability 12, 2020, December December 7,2021 15,000.00 Yes 1 year Yes No guaranty 30,2020 Announcember No.: Joint liability 2021-091,2021- March 18,2022 8,000.00 Yes 1 year Yes No guaranty Sichuan Changhong 092,2021-096,2021-109 100,000.00 Air-conditioner Co., released on December Joint liability Ltd. 7, 2021, December 24, April 18,2022 30,000.00 Yes 1 year Yes No guaranty 2021 Joint liability Announcember No.: January 17,2023 10,000.00 Yes 9 months No No guaranty 2022-087,2022- Joint liability 088,2022-091,2022-100 January 17,2023 5,000.00 Yes 1 year No No 250,000.00 guaranty released on December Joint liability 7, 2022, December 23, February 27,2023 16,000.00 Yes 1 year No No guaranty 2022 March 16,2023 30,000.00 Joint liability Yes 1 year No No 146 Annual Report 2023 guaranty Joint liability March 24,2023 60,000.00 Yes 1 year No No guaranty Joint liability April 14,2023 12,000.00 Yes 1 year No No guaranty Joint liability June 28,2023 3,500.00 Yes 6 months Yes No guaranty July 5,2023 1,500.00 Joint liability Yes 5.4 months No No guaranty Announcember No.: 2023-066,2023- 067,2023-070,2023-080 262,000.00 - - - - - - - released on December 5,2023, December 22, 2023 Announcember No.: 2022-036,2022- Changhong RUBA 037,2022-049 released 5,955.93 note1 - - - - - - - Trade Company on May 18, 2022, June 30,2022 Announcember No.: 2022-087,2022- 088,2022-091,2022-100 15,000.00 - - - - - - - Jiangxi Meiling released on December Electric Appliance 7, 2022, December 23, Co., Ltd. 2022 Announcember No.: 2023-066,2023- 15,000.00 - - - - - - - 067,2023-070,2023-080 147 Annual Report 2023 released on December 5, 2023, December 22, 2023 Announcember No.: 2022-087,2022- 088,2022-091,2022-100 3,000.00 - - - - - - - released on December 7, 2022, December 23, Hefei Meiling 2022 Nonferrous Metal Announcember No.: Products Co., Ltd. 2023-066,2023- 067,2023-070,2023-080 3,000.00 - - - - - - - released on December 5, 2023, December 22, 2023 Announcember No.: 2021-091,2021- 092,2021-096,2021-109 Joint liability 40,000.00 April 18,2022 5,000.00 Yes 1 year Yes No released on December guaranty 7, 2021, December 24, 2021 Hefei Meiling Announcember No.: Group Holdings Joint liability 2022-087,2022- May 11,2023 4,500.00 Yes 1 year No No Limited guaranty 088,2022-091,2022-100 60,000.00 released on December Joint liability 7, 2022, December 23, July 12,2023 8,000.00 Yes 1 year No No guaranty 2022 Announcember No.: 25,000.00 - - - - - - - 2023-066,2023- 148 Annual Report 2023 067,2023-070,2023-080 released on December 5, 2023, December 22, 2023 Announcement No.: 2021-008,2021- 009,2021-011 and Joint liability 35,000.00 December 9,2021 4,000.00 Yes 11 monghs Yes No 2021-034 released on guaranty March 3, 2021 and April 29, 2021 Joint liability January 26,2022 3,000.00 Yes 1 year Yes No guaranty Joint liability March 17,2022 5,000.00 Yes 1 year Yes No guaranty Announcement No.: Joint liability Hefei Changhong August 25,2022 500.00 Yes 1 year Yes No 2021-091,2021- guaranty Meiling Life 092,2021-096 and Joint liability Appliances Co., 35,000.00 September 8,2022 1,000.00 Yes 1 year Yes No 2021-109 released on guaranty Ltd. December 7, 2021 and Joint liability September 22,2022 5,000.00 Yes 1 year Yes No December 24, 2021 guaranty Joint liability November 21,2022 5,000.00 Yes 1 year No No guaranty Joint liability December 8,2022 4,500.00 Yes 10.5 months Yes No guaranty Announcement No.: Joint liability February 22,2023 8,000.00 Yes 11 months No No 2022-087,2022- guaranty 088,2022-091 and 35,000.00 Joint liability April 24,2023 2,000.00 Yes 1 year No No 2022-100 released on guaranty December 7, 2022 and May 4,2023 5,000.00 Joint liability Yes 1 year No No 149 Annual Report 2023 December 23, 2022 guaranty November 3,2023 2,000.00 Joint liability Yes 1 year No No guaranty December 1,2023 10,000.00 Joint liability Yes 1 year No No guaranty December 15,2023 4,000.00 Joint liability Yes 5.7 months No No guaranty Announcember No.: 2023-040,2023-041, 2023-043,2023-065 8,000.00 - - - - - - - released on August 18, 2023, November 4, 2023 Announcember No.: 2023-066,2023- 067,2023-070,2023-080 50,000.00 - - - - - - - released on December 5, 2023, December 22, 2023 Total amount of approving guarantee for subsidiaries in report period Total amount of actual occurred guarantee for subsidiaries in 480,000.00 517,500.00 (B1) report period (B2) Total amount of approved guarantee for subsidiaries at the end of Total balance of actual guarantee for subsidiaries at the end of 293,500.00 1,219,500.00 reporting period (B3) reporting period (B4) Guarantee of the subsidiaries for the subsidiaries Counter Collatera Complete Name of the guarante Guarantee Related Announcement Actual guarantee l (if Guarantee implemen Company Guarantee limit Actual date of happening Guarantee type e (if for related disclosure date limit applicabl term tation or guaranteed applicab party e) not le) 150 Annual Report 2023 Announcement No.: 2021-091,2021-092 and 2021-096,2021-109 Joint liability 5,000.00 June 27,2022 500.00 1 year Yes No released on December guaranty 7, 2021 and December 24, 2021 Announcement No.: Joint liability June 20,2023 1,000.00 1year No No 2022-087,2022- guaranty Anhui Touxing 088,2022-091 and Joint liability Technology Co., 8,000.00 August 15,2023 400.00 1 year No No 2022-100 released on guaranty Ltd. December 7, 2022 and Joint liability October 20,2023 1,000.00 1 year No No December 23, 2022 guaranty Announcember No.: 2023-066,2023- 067,2023-070,2023-080 5,000.00 - - - - - - - released on December 5, 2023, December 22, 2023 Announcement No.: Joint liability 2022-087,2022- August 25,2023 1,000.00 1 year No No guaranty 088,2022-091 and 12,000.00 2022-100 released on Joint liability Anhui Ling'an December 7, 2022 and October 20,2023 1,000.00 1 year No No guaranty Medical Equipment December 23, 2022 Co., Ltd Announcember No.: 2023-066,2023- 067,2023-070,2023-080 10,000.00 - - - - - - - released on December 5, 2023, December 22, 151 Annual Report 2023 2023 Total amount of approving guarantee for subsidiaries in report period Total amount of actual occurred guarantee for subsidiaries in 15,000.00 4,900.00 (C1) report period (C2) Total amount of approved guarantee for subsidiaries at the end of Total balance of actual guarantee for subsidiaries at the end of 35,000.00 4,400.00 reporting period (C3) reporting period (C4) Total amount of guarantee of the Company (total of three abovementioned guarantee) Total amount of actual occurred guarantee in report period Total amount of approving guarantee in report period (A1+B1+C1) 532,500.00 484,900.00 (A2+B2+C2) Total amount of approved guarantee at the end of report period Total balance of actual guarantee at the end of report period 1,254,500.00 297,900.00 (A3+B3+C3) (A4+B4+C4) Ratio of actual guarantee (A4+B4+C4) in net assets of the Company 51.14% Including: Amount of guarantee for shareholders, actual controller and its related parties (D) 0 The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) 151,500.00 Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) 0 Total amount of the aforesaid three guarantees (D+E+F) 151,500.00 Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) N/A Explanations on external guarantee against regulated procedures (if applicable) N/A Note 1: In order to unify the currency for totaling, the exchange rate here was converted from the US dollar to the 6.6177 yuan on April 30, 2022. For details, please refer to the announcement No. 2022-037 disclosed by the company. The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company, and these wholly-owned and holding subsidiaries are in normal production and operation, there are no overdue loans, and the guarantee risks are controllable. During the reporting period, the highest level of security the Company provided amounted to 12,195 million yuan by the approval, the actual amount of guarantee is 4,800 million yuan. At the end of the reporting period, the practical guarantee balance amounted to 2,935 million yuan, accounting for the Company’s latest net assets ratio of 50.39%. The amount of effective guarantee provided by the approved subsidiaries of the Company to the subsidiaries is RMB 350 million, the actual amount of guarantee is RMB 49 million, and the actual guarantee balance provided by the subsidiaries to the subsidiaries is RMB 44 million, accounting for 0.76%of the Company's latest net assets. 152 Annual Report 2023 Explanation on guarantee with composite way: Not applicable 153 Annual Report 2023 (iii) Entrust others to cash asset management 1. Trust financing √ Applicable □ Not applicable Trust financing in the period In RMB 10,000 Impairment amount for Type Capital resources Amount for entrust Undue balance Overdue amount overdue financial management Bank financing Own idle funds 35,000.00 0 0 0 products Total 35,000.00 0 0 0 Note: The above-mentioned entrusted financing amount is the total financing amount of subsidiaries of the Company during the reporting period. Details of the single major amount, or high-risk trust investment with low security, poor fluidity √ Applicable □ Not applicable 154 Annual Report 2023 In RMB 10,000 Amou nt of reserv Wheth Whether Anticipa e for er Refere Actual has Trustee ted Actual devalu approv Summary of the Source Criteria nce collected entrust institution Truste Product Expiry income gains/los ation ed by items and related Amount of Start date Capital investment purpose for fixing annual gains/los finance (or name of e type type date (if ses in of legal query index (if funds reward rate of ses in plan in trustee) applicab period withdr proced applicable) return period the le) awing ure future (if (Y/N) applic able) The principal of this structured deposit is Zhongshanb Principal included in the unified operation and Juchao ranch of - Idle February management of funds of Guangfa Bank, and Not Not Website(www.cni China guarante May 15, Agreemen Bank 5,000.00 own 14, the income of investors' structured deposits 1.5% applicab 18.49 18.49 N Y applicab nfo.com.cn) ( Guangfa ed with 2023 t funds 2023 depends on the performance of USD/JPY le le Announcement Bank Co., floating during the observation period. No.: 2023-009) Ltd. income Bank of Communications operates the funds raised by structured deposit products in a Zhongshan Principal unified manner and manages them in Juchao branch of - Idle accordance with the principle of separating Not Not Website(www.cni Bank of guarante March 10, July 10, Agreemen Bank 5,000.00 own basic deposits from derivative transactions. 3.00% applicab 50.14 50.14 N Y applicab nfo.com.cn) ( Communica ed with 2023 2023 t funds The raised principal will be included in the le le Announcement tions Co., floating internal fund of Bank of Communications for No.: 2023-009) Ltd income unified operation and management, and will be included in the payment scope of deposit 155 Annual Report 2023 reserve fund and deposit insurance. The embedded derivative part of products will be linked to the exchange rate, interest rate, commodity and index, etc. Principal The structured deposits are included in the Juchao - Mianyang Idle September payment scope of deposit reserve and deposit Not Not Website(www.cni guarante June 26, Agreemen branch of Bank 5,000.00 own 26, insurance premium in accordance with 2.80% applicab 35.00 35.00 N Y applicab nfo.com.cn) ( ed with 2023 t SPD Bank funds 2023 deposit management and regulatory le le Announcement floating requirements, No.: 2023-038) income Principal This product will be invested in Juchao Mianyang - Idle Not Not Website(www.cni Branch of guarante September October derivatives related to the exchange rate Agreemen Bank 10,000.00 own 2.90% applicab 24.17 24.17 N Y applicab nfo.com.cn) ( Chengdu ed with 25,2023 25,2023 in the international foreign exchange t funds le le Announcement Bank floating market. No.: 2023-049) income Principal Juchao Mianyang - Idle This product will be invested in derivatives Not Not Website(www.cni Branch of guarante October November Agreemen Bank 10,000.00 own related to the exchange rate in the 2.80% applicab 25.67 25.67 N Y applicab nfo.com.cn) ( Chengdu ed with 25,2023 27,2023 t funds international foreign exchange market. le le Announcement Bank floating No.: 2023-049) income Total 35,000.00 -- -- -- -- -- -- -- 153.47 153.47 -- -- -- -- Note: Zhongke Meiling, a subsidiary of the Company, is a listed company of the Beijing Stock Exchange. For details of its entrusted financial management, please refer to Zhongke Meiling's 2023 annual Report. 156 Annual Report 2023 Entrust financial expected to be unable to recover the principal or impairment might be occurred □ Applicable √ Not applicable 2. Entrust loans □ Applicable √ Not applicable No entrust loans in the period. (iv) Other material contracts □ Applicable √ Not applicable No other material contracts in the period. XVI. Explanation on other significant events √ Applicable □ Not applicable 1. According to the resolutions adopted at the 31st meeting of the 10th Board of Directors, the 22nd meeting of the 10th Board of Supervisors and the 2022 Annual General Meeting of Shareholders, it was agreed that the Company and its subsidiaries would make a single provision for bad debts for the receivables of the customer, Changhong RUBA Electric Co., Ltd. (a joint venture of Zhongshan Changhong Electric Co., Ltd., a subsidiary of the Company) in the fourth quarter of 2022, and it was agreed that in the fourth quarter of 2022, the Company, its subsidiaries Hefei Meiling Group Holding Co., Ltd., Sichuan Changhong Air Conditioning Co., Ltd. and its affiliated company Sichuan Zhiyijia Network Technology Co., Ltd. would make a single provision for bad debts for the receivables of Gome (Gome is a general term for the subsidiaries, branches, offices and agencies at all levels of Gome Retail), and the total amount of the above-mentioned single provision for bad debts is RMB 101,962,546.44. Found more on appointed media “Securities Times”, “China Securities Journal and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-002, 2023-005 and 2023-030) on 18 January 2023 and 26 April 2023. 2. According to the resolutions of the 31st meeting of the 10th Board of Directors, the 22nd meeting of the 10th Board of Supervisors and the 2022 Annual General Meeting of Shareholders, the Plan on the Company's Profit Distribution in 2022 was adopted, and at the same time, the independent directors of the Company issued independent approval opinions on the plan. Considering the interests of shareholders and the long-term development needs of the Company, based on the Company's total share capital of 1,029,923,715 shares on December 31, 2022, the Company distributed a cash dividend of RMB 0.9 (including tax) to all shareholders for every 10 shares, with no bonus or conversion of reserve funds into share capital. After this distribution, the remaining accumulated undistributed profit of the parent company was RMB 971,443,732.63, and the remaining undistributed profit was carried forward to the next year for distribution.On June 10, 2023, the Company disclosed the Announcement on the Implementation of the Profit Distribution Plan for 2022, and implemented the aforementioned profit distribution plan.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-011, 2023-012 ,2023-014,2023-030 and 2023-037) on 31 March 2023, 26 April 2023 and 10 June 2023. 3. After deliberated and approved by the 31st session of 10th BOD and Annual General Meeting of 2022, it agreed that the Company and its subsidiaries shall carry out forward foreign exchange fund trading business during the period from 1 July 2023 to 30 June 2024. Balance of trading not exceeding US$ 1.046 billion (mainly including 157 Annual Report 2023 USD, AUD, EUR and other foreign exchange converted to USD), and the maximum period of delivery of a single business shall not exceed one year. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-011, 2023-016 and 2023-030) on 31 March 2023 and 26 April 2023. 4. By the resolution passed at the 31st meeting of the Tenth Board of Directors and the 2022 Annual General Meeting of Shareholders, it was agreed that the Company and its holding subsidiaries should apply for a special credit line for RMB bill pool of maximum RMB 400 million from Hefei Branch of Industrial Bank Co., Ltd., that of maximum RMB 300 million from Hefei Branch of Ping An Bank Co., Ltd., and that of RMB 400 million from Hefei Branch of Jiujiang Bank Co., Ltd., with a credit period of one year. The credit lines are mainly used for special business of bill pools and are pledged by bills. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-011, 2023-018 and 2023-030) on 31 March 2023 and 26 April 2023. 5. During the period from April 17, 2023 to April 19, 2023, the deviation of the closing price of the Company's stock trading for three consecutive trading days exceeded 20%. According to the relevant regulations of Shenzhen Stock Exchange, the Company issued the Announcement of Abnormal Fluctuations in Stock Trading. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-029) on 20 April 2023. 6 According to the resolution of the 32nd meeting of the Tenth Board of Directors and the First Extraordinary General Meeting of Shareholders in 2023, the Proposal on Changes in Accounting Policies in 2023 was reviewed and approved, and it was agreed that the Company would make changes in accounting policies in accordance with the relevant provisions of Interpretation No.16 of Accounting Standards for Business Enterprises of the Accounting Department of the Ministry of Finance. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-023, 2023-027 and 2023-033) on 20 April 2023 and 11 Mayl 2023. 7. According to the resolutions of the 32nd meeting of the 10th Board of Directors and the first extraordinary General Meeting of Shareholders in 2023, it was agreed to revise some articles of the Articles of Association according to the needs of the Company's operation and management and the actual situation of the Company.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-023, 2023-027 and 2023-033) on 20 April 2023 and 11 May 2023. 8. On April 27, 2023, the Company received a notice from Mr. Tang Youdao, Vice President of the Company. Based on his firm confidence in the Company's future development prospects and recognition of the Company's long-term investment value, Mr. Tang Youdao increased his holdings of common shares (A shares) by 800,000 shares through centralized bidding in the trading system of Shenzhen Stock Exchange.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-032) on 29 April 2023. 9. In order to establish a variety of shareholder return mechanisms, thank shareholders for their long-term concern 158 Annual Report 2023 and support, and at the same time to allow shareholders to experience the Company's new products and services, and improve investors' understanding and recognition of the Company's intrinsic value, the Company held the "Meiling 40th Anniversary Shareholder Thanksgiving Festival" from May 20, 2023 to May 28, 2023. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-034) on 18 May 2023. 10. On May 25, 2023, the Company issued the Announcement on the Resignation of Senior Managers of the Company, and Mr. Liu Hongwei, the former Executive Vice President of the Company, applied to resign as the executive vice president of the Company for personal reasons. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-036) on 25 May 2023. As of the disclosure date of this report, Mr. Liu Hongwei no longer holds any position in the Company and its subsidiaries. 11. On May 24, 2023, the Company received the Notice on Share Reduction Plan from Mr. Huang Danian, Vice President of the Company. Due to the needs of personal family funds, Mr. Huang Danian planned to reduce his shares by no more than 89,113 shares (accounting for 0.0087% of the Company's total share capital) through centralized bidding within 6 months after 15 trading days upon the announcement date of the reduction plan, with the amount of reduction not exceeding 25% of his shares of the Company. As of December 16, 2023, upon the expiry of the period of the share reduction plan, Mr. Huang Danian, the Vice President, did not reduce his shares in the Company during the period of the reduction plan, and the number of shares he held before and after the reduction plan had not changed, Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-035 and 2023-076) on 25 May 2023. 12. After the resolution passed at the 33rd meeting of the Tenth Board of Directors of the Company, it was agreed to adjust the shareholding structure of Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as "Hongmei Company"), that is, to transfer 100% equity of Hongmei Company held jointly by Sichuan Changhong Air Conditioning Co., Ltd. (a wholly-owned subsidiary of the Company, which holds 99% equity of Hongmei Company) and Mianyang Meiling Refrigeration Co., Ltd. (a wholly-owned subsidiary of the Company, which holds 1% equity of Hongmei Company) to the Company for direct holding, at an equity transfer price according to the audited net asset value of Hongmei Company as of December 31, 2022, which was RMB 22,725,052.60.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-040 and 2023-076) on 18 August 2023. 13. After the resolutions of the 33rd meeting of the Tenth Board of Directors, the 24th meeting of the Tenth Board of Supervisors and the Second Extraordinary General Meeting of Shareholders in 2023, it was agreed that the Company would provide an additional credit guarantee line of no more than RMB 80 million to its subsidiary Hefei Changhong Meiling Electrical Appliance Co., Ltd. with a guarantee period of one year.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the 159 Annual Report 2023 Company disclosed in the form of announcement (Announcement No. 2023-040, 2023-041 ,2023-043 and 2023- 065) on 18 August 2023 and November 4, 2023. 14. By the resolutions approved at the 34th meeting of the Tenth Board of Directors and the 25th meeting of the Tenth Board of Supervisors, it was agreed to extend the duration of Sichuan Hongyun New Generation of Information Technology Venture Capital Fund Partnership (Limited Partnership) for one year (the specific expiration date is subject to the industrial and commercial registration), that is, the cumulative duration of such fund after this extension is 9 years, and it was agreed that the Company and other partners signed the Amendment to the Partnership Agreement of Sichuan Hongyun New Generation of Information Technology Venture Capital Fund Partnership (Limited Partnership).Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-044,2023-045 and 2023-046) on 8 September 2023. 15. Ms. Pan Haiyun, the Company's securities affairs representative, applied to resign as the Company's securities affairs representative due to work adjustment. After resigning as the securities affairs representative, Ms. Pan Haiyun will work in the Company's holding subsidiary.According to the Company Law, the Articles of Association and other relevant regulations, the resignation report will take effect as of the date it is delivered to the Board of Directors, and the Board of Directors of the Company agrees to Ms. Pan Haiyun's resignation request.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-048) on 12 September 2023. 16 By the resolutions passed at the 35th meeting of the Tenth Board of Directors and the Second Extraordinary General Meeting of Shareholders in 2023, it was agreed that the Company and its subsidiaries would apply for a special credit line for RMB bill pool of maximum RMB 500 million from Hefei Branch of Huaxia Bank Co., Ltd., that of maximum RMB 600 million from Hefei Branch of Hangzhou Bank Co., Ltd., and that of maximum RMB 1 billion from Anhui Branch of Bank of Communications Co., Ltd., with a credit period of one year. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-055 and 2023-065) on 18 October 2023 and November 4,2023. 17. By the resolutions approved at the 36th meeting of the Tenth Board of Directors and the 36th meeting of the Tenth Board of Supervisors, it was agreed that the amount of bad debt provision accrued individually for direct and indirect receivables of Gome was RMB 44,358,520.13 in the third quarter of 2023. After this withdrawal, the above- mentioned receivables of Gome system have been fully accrued for bad debt provision. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-060, 2023-061 and 2023-062) on 24 October 2023. 18. By the resolutions approved at the 37th meeting of the Tenth Board of Directors, the 28th meeting of the Tenth Board of Supervisors and the Third Extraordinary General Meeting of Shareholders in 2023, it was agreed that the Company and its subsidiaries could use their own idle funds of no more than RMB 1.5 billion (which can be used in a rolling way) to invest in bank wealth management products with high safety, good liquidity, low risk and stability within one year. The authorization period is valid within one year from the date of deliberation and approval 160 Annual Report 2023 by the General Meeting of Shareholders of the Company.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-066, 2023-67, 2023-071 and 2023-080) on 5 December 2023 and December 22, 2023.. 19. By the resolution of the 37th meeting of the Tenth Board of Directors of the Company, it was agreed that the Company and its subsidiaries and Hefei Branch of China Zheshang Bank Co., Ltd. should carry out asset pool business with a total amount not exceeding RMB 500 million. The term is one year from the date when the matter is reviewed and approved by the Company's General Meeting of Shareholders.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-066 and 2023-072) on 5 December 2023. 20. By the resolutions approved at the 37th meeting of the Tenth Board of Directors and the Third Extraordinary General Meeting of Shareholders in 2023, the related clauses of the Articles of Association, the Rules of Procedure of the Board of Directors and the Independent Director System were agreed to be revised in accordance with the Administrative Measures for Independent Directors of Listed Companies of CSRC, the Guideline No.1 for Self- regulation of Listed Companies in Shenzhen Stock Exchange - Standardized Operation of Listed Companies on Main Board of Shenzhen Stock Exchange and other relevant laws and regulations.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-066, 2023-073 and 2023-080) on 5 December 2023 and December 22, 2023. XVII. Major event of the subsidiary √ Applicable □ Not applicable 1.According to the resolutions of the 31st meeting of the 10th Board of Directors and the 22nd meeting of the 10th Board of Supervisors, it was agreed that Zhongshan Changhong, a subsidiary of the Company would write off the uncollectible bad debts totaling RMB 1,307,424.41.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-011, 2023-012 and 2023-017) on 31 March 2023. 2. According to the resolution approved at the 33rd meeting of the Tenth Board of Directors of the Company, it was agreed to cancel Hefei Meiling Marketing Co., Ltd., a wholly-owned subsidiary of the Company according to the business development needs of the Company.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-040) on 8 September 2023. 3. By the resolution approved at the 33rd meeting of the Tenth Board of Directors, it was agreed that Zhongshan Changhong would invest RMB 36.526 million with its own funds to carry out technical transformation on its production line, improve its manufacturing capacity, reduce costs and improve efficiency, and enhance product competitiveness.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023- 040) on 8 September 2023. 161 Annual Report 2023 4. By the resolution approved at the 33rd meeting of the Tenth Board of Directors of the Company, it was agreed that Zhongshan Heat Pump would implement the relocation and capacity expansion project with its own funds of RMB 34.62 million to ensure its future business development. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-040) on 8 September 2023. 5. By the resolution approved at the 34th meeting of the Tenth Board of Directors of the Company, it was agreed that Changhong Air Conditioning would implement the capacity improvement and transformation project with its own funds of RMB 32,206,700, thus ensuring the stable operation and development of Changhong Air Conditioning in the future; It was agreed that Changhong Air Conditioning would carry out technical transformation with its own capital of RMB 17,135,700, thus ensuring the stable operation and development of Changhong Air Conditioning in the future.Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-044) on 8 September 2023. 6. At the 37th meeting of the Tenth Board of Directors of the Company, it was agreed that Zhongke Meiling would donate an automatic vaccination workstation with a value of RMB 1.15 million to the Linhu Community Health Service Center of Hefei Economic and Technological Development Zone through Hefei Red Cross Society to improve the efficiency and safety of vaccination. Found more on appointed media “Securities Times”, “China Securities Journal” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2023-066) on 5 December 2023. 162 Annual Report 2023 VII .Changes in Shares and Particulars about Shareholders I. Changes in Share Capital (i) Changes in Share Capital In Share Before the Change Increase/Decrease in the Change (+, -) After the Change Public reserve New Proporti Bonus transfer Proporti Amount shares Others Subtotal Amount on shares into on issued share capital I. Restricted 7,192,492 0.70% 0 0 0 +496,350 +496,350 7,688,842 0.75% shares 1. State-owned 0 0.00% 0 0 0 0 0 0 0.00% shares 2. State-owned legal person’s 1,141,053 0.11% 0 0 0 0 0 1,141,053 0.11% shares 3. Other domestic 4,784,019 0.47% 0 0 0 +496,350 +496,350 5,280,369 0.52% shares Including: Domestic legal 3,363,539 0.33% 0 0 0 0 0 3,363,539 0.33% person’s shares Domestic natural 1,420,480 0.14% 0 0 0 +496,350 +496,350 1,916,830 0.19% person’s shares 4. Foreign shares 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12% Including: Foreign legal 0 0.00% 0 0 0 0 0 0 0.00% person’s shares Foreign natural 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12% person’s shares II. Unrestricted 1,022,731,223 99.30% 0 0 0 -496,350 -496,350 1,022,234,873 99.25% shares 1. RMB ordinary 875,808,809 85.04% 0 0 0 -496,350 -496,350 875,312,459 84.99% shares 2. Domestically listed foreign 146,922,414 14.26% 0 0 0 0 0 146,922,414 14.26% shares 3. Overseas listed 0 0.00% 0 0 0 0 0 0 0.00% 163 Annual Report 2023 foreign shares 4. Others 0 0.00% 0 0 0 0 0 0 0.00% 100.00 100.00 III. Total shares 1,029,923,715 0 0 0 0 0 1,029,923,715 % % 1. Reasons for share changed √ Applicable □ Not applicable (1) On April 27, 2023, Mr. Tang Youdao, Vice President of the Company, based on his firm confidence in the Company's future development prospects and recognition of the Company's long-term investment value, increased his holdings of common shares by 800,000 shares through centralized bidding in the trading system of Shenzhen Stock Exchange. According to the Rules for the Administration of the Shares of the Company Held by Directors, Supervisors and Senior Managers of Listed Companies and Their Changes and other relevant regulations, 75% of the total shares of the company held by Mr. Tang Youdao, namely 600,000 shares, were locked. (2) According to the relevant provisions of the Company Law, the Securities Law and the Rules for the Administration of the Shares of the Company Held by Directors, Supervisors and Senior Managers of Listed Companies and Their Changes, 75% of 414,600 common shares held by Ms. Li Xia at the beginning of 2023, namely 310,950 shares, were restricted from sale, and the other 25%, namely 103,650 shares, were lifted from such restriction. 2. Approval of share changed □ Applicable √Not applicable 3. Ownership transfer of share changed □ Applicable √Not applicable 4. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √Not applicable 5. Other information necessary to disclose or need to disclosed under requirement from security regulators □ Applicable √ Not applicable (ii) Changes of lock-up stocks √ Applicable □ Not applicable In: Shares Restricted Opening Shares shares Ending Shareholder shares Restricted released in increased shares Date for released s restricte reasons Period in restricted d Period 164 Annual Report 2023 On April 27, 2023, Mr. Tang Youdao, Vice President of the Company, based on his firm confidence in the Company's future development prospects and recognition of the Company's long- term investment value, increased his holdings of common shares Top by 800,000 shares through centralized bidding in the trading Tang managemen system of Shenzhen Stock Exchange. According to the relevant 0 600,000 0 600,000 Youdao t lock-in provisions of the Company Law, the Securities Law and the Rules stock for the Administration of the Shares of the Company Held by Directors, Supervisors and Senior Managers of Listed Companies and Their Changes, 75% of the total shares of the Company held by Mr. Tang Youdao, namely 600,000 shares, were locked. According to the relevant provisions of the Company Law, the Securities Law and the Rules for the Administration of the Shares Top of the Company Held by Directors, Supervisors and Senior managemen Li Xia 414,600 0 103,650 310,950 Managers of Listed Companies and Their Changes, At the t lock-in beginning of 2023, 103,650 shares held by Ms. Li Xia, stock accounting for 25% of the total shares, were lifted from the restricted sale. Total 414,600 600,000 103,650 910,950 -- -- II. Securities issuance and listing (i) Security offering in reporting period (Not including preferred stock) □ Applicable √ Not applicable (ii) Explanation on changes of total shares, shareholders structure and assets & liability structures □ Applicable √ Not applicable (iii) Current shares held by internal staffs □ Applicable √ Not applicable III. Particulars about shareholder and actual controller of the Company (i) Amount of shareholders of the Company and particulars about shares holding In Share Total common Total preference shareholders Total preference shareholders shareholders at end with voting rights recovered at Total shareholders at end with voting rights recovered 49,871 of last month before 41,938 0 end of last month before 0 of the Period at end of reporting period (if annual report annual report disclosed (if applicable) disclosed applicable) Particulars about shares held above 5% by shareholders or top 10 shares holding Proportion Total Amount Amount of un- Information of Nature of Changes in Full name of Shareholders of shares shareholders of restricted shares shares pledged, shareholder report period held at the end restricte held tagged or frozen 165 Annual Report 2023 of report d shares State of Amou period held share nt State-owned legal Sichuan Changhong Electric Co., Ltd. 24.12% 248,457,724 0 0 248,457,724 - - person Hefei Industry Investment Holding (Group) State-owned legal 4.64% 47,823,401 0 0 47,823,401 - - Co., Ltd. person CHANGHONG (HK) TRADING Foreign legal 2.63% 27,077,797 0 0 27,077,797 - - LIMITED person National Social Security Fund 101 Portfolio Domestic non- state-owned legal 2.21% 22,782,736 +22,782,736 0 22,782,736 - - person Foreign nature CAO SHENGCHUN 1.43% 14,766,086 0 0 14,766,086 - - person China Construction Bank Co., Ltd.- Domestic non- Jiashixin Consumer Stock Securities state-owned legal 1.17% 12,082,100 +12,082,100 0 12,082,100 - - Investment Fund person Domestic nature Du Yunzhi 1.16% 12,050,000 +12,050,000 0 12,050,000 - - person Domestic non- ICBC-South Excellent Growth Stock state-owned legal 1.03% 10,643,000 +10,643,000 0 10,643,000 - - Securities Investment Fund person Industrial Bank-Southern Xingrun value Domestic non- one-year holding period of hybrid securities state-owned legal 0.89% 9,161,600 +9,161,600 0 9,161,600 - - investment fund person China Construction Bank Co., Ltd-China Construction Bank Co., Ltd. - Bank of Domestic non- Communications Schroeder Consumption state-owned legal 0.75% 7,763,568 +7,763,568 0 7,763,568 - - New Drive Stock Securities Investment person Fund Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if Not applicable applicable) Among the above shareholders, CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as Hong Kong Changhong) is the wholly-owned subsidiary of Sichuan Changhong Electric Co., Ltd., the foregoing shareholders constitute persons of uniform action. There existed no associated relationship or belong to the Explanation on associated concerted actors as specified in the Measures for the Administration of Information Disclosure of Shareholder relationship among the aforesaid Equity Changes of Listed Companies among Sichuan Changhong Electric Co., Ltd, Hong Kong Changhong and shareholders other top 8 shareholders, The company neither knows whether there is any association among other shareholders, nor knows whether other shareholders belong to the persons acting in concert that is stipulated in the “Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies”. Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from Not Applicable voting rights. Special note on the repurchase account among the top 10 shareholders (if applicable) Not Applicable Particular about top ten shareholders with un-restrict shares held Shareholders’ name Amount of Type of shares 166 Annual Report 2023 unrestricted shares held Type Amount at end of Period Sichuan Changhong Electric Co., Ltd. 248,457,724 RMB ordinary shares 248,457,724 Hefei Industry Investment Holding (Group) Co., Ltd. 47,823,401 RMB ordinary shares 47,823,401 CHANGHONG (HK) TRADING LIMITED 27,077,797 RMB ordinary shares 27,077,797 National Social Security Fund 101 Portfolio 22,782,736 RMB ordinary shares 22,782,736 Domestically listed CAO SHENGCHUN 14,766,086 14,766,086 foreign share China Construction Bank Co., Ltd.- Jiashixin Consumer Stock Securities Investment Fund 12,082,100 RMB ordinary shares 12,082,100 Du Yunzhi 12,050,000 RMB ordinary shares 12,050,000 ICBC-South Excellent Growth Stock Securities Investment Fund 10,643,000 RMB ordinary shares 10,643,000 Industrial Bank-Southern Xingrun value one-year holding period of hybrid securities 9,161,600 RMB ordinary shares 9,161,600 investment fund China Construction Bank Co., Ltd-China Construction Bank Co., Ltd. - Bank of 7,763,568 RMB ordinary shares 7,763,568 Communications Schroeder Consumption New Drive Stock Securities Investment Fund Expiation on associated relationship or consistent actors within the top 10 un-restrict Found more in “Particulars about shares held above 5% by shareholders and between top 10 un-restrict shareholders and top 10 shareholders shareholders or top 10 shares holding” Explanation on top ten common shareholders involving margin business (if Not applicable applicable) Note 1: At end of the reporting period, the person acting in concert with controlling shareholder Sichuan Changhong- - CHANGHONG (HK) TRADING LIMITED, holds B-stock of the Company as 33,374,710 shares, among which, 6,296,913 shares are held through Philip Securities (H.K.) Co., Ltd. by CHANGHONG (HK) TRADING LIMITED Note 2: In the above table, "Particulars about shares held above 5% by shareholders or top 10 shares holding" is subject to the data on stock transfer books provided by China Securities Depository and Clearing Corporation Limited Shenzhen Branch Lending of shares by the top ten shareholders participating in refinancing business □ Applicable √ Not applicable The top ten shareholders have changed from the previous period Applicable □Not applicable In Share Changes of the top ten shareholders compared with the end of the previous period Number of shares held by Addition/ Number of shares lent by shareholders in general accounts and Withdraw refinancing at the end of the credit accounts and lent by Name of shareholder (full name) al in this period and not yet returned refinancing at the end of the period reporting and not yet returned period Total Proportion of Proportion of Total quantity quantity total share total share 167 Annual Report 2023 capital capital The National Social Security Fund 101 portfolio Addition 0 0.00% 0 0.00% China Construction Bank Co., Ltd.- Jiashixin Consumer Addition 0 0.00% 0 0.00% Stock Securities Investment Fund Du Yunzhi Addition 0 0.00% 0 0.00% ICBC-South Excellent Growth Stock Securities Investment Addition 0 0.00% 0 0.00% Fund Industrial Bank-Southern Xingrun value one-year holding Addition 0 0.00% 0 0.00% period of hybrid securities investment fund China Construction Bank Co., Ltd-China Construction Bank Co., Ltd. - Bank of Communications Schroeder Consumption Addition 0 0.00% 0 0.00% New Drive Stock Securities Investment Fund Ma Guobin Out 0 0.00% 0 0.00% Xu Aiyun Out 0 0.00% 0 0.00% Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Out 0 0.00% 0 0.00% Emerging Industry Investment Fund (Limited Partnership) Wang Xinzhong Out 0 0.00% 0 0.00% Wang Kai Out 0 0.00% 0 0.00% Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy- back agreement dealing in reporting period. □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back agreement dealing in reporting period. (ii) Controlling shareholder of the Company 1. Nature of controlling shareholders: local state-owned holding 2. Type of controlling shareholders: legal person Controlling Legal Dated Organization shareholders rep./person in Main business founded code ’ name charge of unit 168 Annual Report 2023 Manufactures, sales and maintenance of household appliance, automotive electrical appliance, Electronic products and spare parts, communications equipment, lighting equipment, household products, computer and other Electronic equipment, specialized equipment of Electronic and Electronic, Electronic machinery and equipment, series products of batteries, Electronic medicine products, Electronic equipment, mechanical equipment, Refrigeration equipment and accessories digital monitoring products, metal products, apparatus and instruments, culture and office machines, culture and education and sports products, kitchen cabinet and gas appliance; house and equipment rental; packing products and technical services; road transportation; storage and discharging convey; R&D, sales and services of integrated circuit and software; consultancy and services of enterprise management; hi-tech project investment and other state-permitted business; Sichuan development and operation of property; engineering construction for house and Changhong April 9151070020541 Liu Jiang buildings; callback and disposal of obsolete appliance and Electronic products; Electric Co., 8,1993 2308D services of Information Technology; consultancy and services of finance; Ltd. sales, relevant import and export business of Chemical raw materials and products(Not contain dangerous chemicals), building materials, non-ferrous metal, Steel, plastics, packing material, mechanical and electrical equipment, Precious metals, Automotive components, Electronic components, Value added telecommunication service, agent service of telecommunication; designing, manufacturing, releasing and agency for the advertisement; Radio and television program production; Internet information services (excluding investment, finance and securities); audio and video production and services; R&D and design of the drone and unmanned aerial vehicle system as well as the promotion of drone technology; transfer and technical consulting service, production and sales of drone (any projects that needs permission by the law should subject to the approval by relevant authority ) Equity controlling 1. As of December 31,2023, Sichuan Changhong directly holds 212,994,972 shares of Changhong Huayi Compressor Co., Ltd. (Stock and jointly code: 000404)- a company listed on the main board of the Shenzhen Stock Exchange, accounting for 30.60% of the equity of of other Changhong Huayi Compressor Co., Ltd. foreign/dom 2. As of December 31,2023, Sichuan Changhong indirectly holds 1,990,518,000 ordinary shares and preferred shares in total of estic listed Changhong Jiahua Holdings Co., Ltd. (Stock code: 03991) - a company listed on the main board of Hong Kong Stock Exchange, company by accounting for 77.44% of the whole ordinary shares and preferred shares under the name of Changhong Jiahua Holdings Co., Ltd. controlling 3.As of December 31, 2023, Sichuan Changhong directly holds 86,258,333 shares of Sichuan Changhong Minsheng Logistics Co., Ltd shareholder (stock code:836237)- the company with shares transferring in National Equities Exchange and Quotations, accounting for 70.27% of the in reporting equity of Sichuan Changhong Minsheng Logistics Co., Ltd. period 3. Controlling shareholder changes in reporting period □ Applicable √ Not applicable Controlling shareholder stays the same in Period. (iii) Actual controller of the Company and its person acting in concert 1. Nature of actual controller: local state-owned assets management 2. Type of actual controller: legal person 169 Annual Report 2023 Legal Dated Actual controller rep./person in Organization code Main business founded charge of unit State-owned Assets Supervision & Administration Commission of Mianyang Municipality is entrusted by the same level State-owned Assets Supervision & government, together performs decision-making Administration Commission of Mianyang -- -- -- and management of state-owned asset owners, Municipality and is one organization which executes comprehensive management and supervision on its belonged state-owned assets. Equity controlling of other foreign/domestic listed company by Not Applicable actual controller in reporting period 3. Changes of actual controller in Period □ Applicable √ Not applicable Actual controller stays the same in Period 4. Property rights and the block diagram of the control relationship between the Company and the actual control (ended as 31st December 2023) Mianyang State owned Assets Sichuan Provincial Supervision and 90% Department of Finance 10% Administration Commission % % Sichuan Changhong Electronics Holding Group Co., Ltd. 23.22% % Sichuan Changhong Electric Co., Ltd. 100% 四川 CHANGHONG (HK) TRADING 省绵 LIMITED 3.24% 24.12% CHANGHONG (HK) TRADING % 虹欢 MEILING CO.,LTD. 四川省 LIMITED 科技 绵阳市 5. Actual controller controlling the Company by有限means of entrust or other assets虹欢科 management □ Applicable √ Not applicable 责任 技有限 (iv) The total number of shares pledged by controlling shareholders or the first majority shareholder and 公司 责任公 its persons acting in concert accounts for 80% of the shares held by them 司 □ Applicable √ Not applicable % 170 % Annual Report 2023 (v)Other legal person’s shareholders with over ten percent shares held 10%. □ Applicable √ Not applicable (vi) Actual controller controlling the Company by means of entrust or other assets management □ Applicable √ Not applicable IV. The specific implementation of shares repurchased/buy-back during the reporting period (i) Implementation progress of shares buy-back □ Applicable √ Not applicable (ii) Implementation progress of reducing holdings of shares buy-back by centralized bidding □ Applicable √ Not applicable 171 Annual Report 2023 VIII. Situation of the Preferred Shares □ Applicable √ Not applicable The Company had no preferred stock in the Period 172 Annual Report 2023 IX. Corporate Bond □ Applicable √ Not applicable 173 Annual Report 2023 X. Financial Report I. Audit report Type of audit opinion Standard unqualified opinion Date for signing the report March 282024 Name of audit institute Shine Wing Certified Public Accountants (LLP) Serial of Auditing Report XYZH/2024CDAA7B0066 Name of CPA Wang Xiaodong , Tu Xiaofeng Auditor’s Report XYZH/2024CDAA7B0066 To Shareholders of Changhong Meiling Co., Ltd.: I.Auditor’s opinion We, as the auditors, audited the financial statements of Changhong Meiling Co., Ltd. (the “Company”), which included the consolidated balance sheet as of 31 December 2023, the consolidated statement of income, the consolidated statement of cash flow and the consolidated statement of changes in equity of the Company for Current Year ended 31 December 2023, together with the relevant notes thereto. We are the view that the attached financial statements are prepared in accordance with the Business Accounting Standards in all material aspects, which reflect fairly the consolidated financial position of the Company as of 31 December 2023 and the operating results and cash flow of the Company for Current Year of 2023. II. Basis for audit opinions We conducted this audit under the requirements of the Auditing Standards of the Certified Public Accountant of the PRC. The section headed “Certified Public Accountant’s responsibility for audit of financial statement” in the audit report has further clarified our responsibilities under these standards. Pursuant to the code of professional conduct as certified public accountant in the PRC, we are independent of the Company and have performed other responsibility as required by our professional ethics. We believe that the audit evidence obtained by us is sufficient and adequate, which provides foundation for us to issue audit opinion. III.Key audit issues Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matter we identified is as follows: 1.Recognition of revenue Please refer to note (iv) 30 and note (v) 48. Key audit matters Audit address 174 Annual Report 2023 Main auditing procedures for revenue recognition are including: 1) Understand and evaluate the design and effectiveness of the operation of internal control related to revenue recognition; 2) Check whether the revenue recognition conforms to the provisions of the criteria; 3) Implement analytical review procedures, including analysis of annual, Sales revenue of the Company was mainly monthly and seasonal revenue fluctuations of major products, changes in sourced from sales of refrigerator, air major customers, and changes in sales prices and gross margins; conditioner, small household appliances and 4) 1) Implement detailed test procedures, check the supporting documents kitchen and washing machines to both domestic related to business revenue recognition, and determine whether the and overseas customers. As indicated in note conditions for revenue recognition are met and whether the time point of (v) 48 of the financial statement - Operating revenue recognition is correct; income and cost, the operating income was 5) Carry out supervision and other procedures to the important inventory at RMB24,247,678,970.56in 2023. Since the end of the period, well-known the progress of the contracts and follow up truthfulness and completeness of revenue the abnormal situations found in inspection; recognition has material impact on operating 6) Conduct inquiry through issue of letters, and carry out additional audit results, we attached great importance to procedures for the items for which reply was abnormal; recognition of sales revenue. 7) review collection of trade receivables, confirm the conformity between the entities owing receivables and name of customers to verify whether there was collection of receivables from third parties, to review the truthfulness of the collection and revenue; 8) review collection of receivables in subsequent period; 9) make cut-off test and analysis re-review 2.Capitalization of development expense Please refer to note (iii)21 and note (vi) Key audit matters Audit address The development expense occurred for research 1) Understand the key control of capitalization of development and development of non-patent technology in expenditures, implement internal control audit procedures, understand the 2023 was RMB147,821,273.96, which was scope and accounting methods of development expenditures, understand and capitalized and accounted for as development make research and development on related control systems and processes, expense in the consolidated financial statement. and test the effectiveness of relevant internal control design and operation; Development expense could only be capitalized 2) Implementation: compare the developed projects in intangible assets upon satisfaction of all the capitalization with machinery models for external sales, and re-verify the truthfulness of conditions set out in note (iii) 21 to the capitalization of completely developed projects financial statement. Since to confirm whether 3) Dual purpose testing: inspect the project reports and inspection and all the capitalization conditions are met requires acceptance reports formed during the research and development and the management to make significant judgment commercialization of developed products, and judge the sufficiency of basis and estimate, we deem this matter important in for accounting of development expense the context of our audit. IV. Other information The management of Changhong Meiling Co., Ltd. (the “Management”) is responsible for other information which includes the information covered in the Company’s 2022 annual report excluding the financial statement and our audit report. 175 Annual Report 2023 The audit opinion issued by us for the financial statement has not covered other information, for which we do not issue any form of assurance opinions. Considering our audit on financial statements, we are liable to read other information, during which, we shall consider whether other information differs materially from the financial statements or that we understand during our audit, or whether there is any material misstatement. Based on the works executed by us, we should report the fact if we find any material misstatement in other information. In t his regards, we have nothing to report. V. Responsibilities of management and those charged with governance for the financial statements The management is responsible for the preparation of the financial statements in accordance with the Accounting Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the internal control necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue as a going concern, disclosing matters related to going concern and using the going concern assumption unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. VI. Responsibilities of the auditor for the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: (1) identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. (2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. (3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. (4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty 176 Annual Report 2023 exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based on the information obtained up to the date of audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. (5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. (6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express audit opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, related safeguard measures. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Shine Wing Certified Public Accountants Chinese CPA: Wang Xiaodong (LLP) (Engagement partner) Chinese CPA: Tu Xiaofeng Beijing China 28 March 2024 177 Annual Report 2023 II. Financial statements Units in Notes of Financial Statements is RMB 1. Consolidated Balance Sheet Prepared by CHANGHONG MEILING CO., LTD. December 31, 2023 In RMB Items December 31,2023 January 1,2023 Current assets: Monetary funds 8,840,685,525.71 6,839,421,779.13 Settlement provisions Capital lent Trading financial assets 39,236,447.63 57,660,588.67 Derivative financial assets Note receivable 267,174.50 Account receivable 1,633,706,889.06 1,306,871,945.85 Receivable financing 1,641,858,740.34 1,446,358,719.88 Accounts paid in advance 45,738,805.90 45,859,491.55 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Other account receivable 82,953,808.97 88,354,803.24 Including: Interest receivable Dividend receivable Buying back the sale of financial assets Inventories 2,022,738,412.97 1,710,306,933.71 Contractual assets 13,261,690.62 3,530,922.13 Assets held for sale Non-current asset due within one year 122,294,027.78 170,167,638.89 Other current assets 225,419,883.07 120,589,431.85 Total current assets 14,668,161,406.55 11,789,122,254.90 Non-current assets: Loans and payments on behalf Debt investment 420,537,485.54 121,543,750.00 Other debt investment Long-term account receivable Long-term equity investment 112,745,811.75 100,384,428.50 Investment in other equity instrument Other non-current financial assets 674,139,515.48 628,549,448.31 Investment real estate 50,920,487.71 52,898,060.89 Fixed assets 2,136,912,034.28 2,229,553,866.96 178 Annual Report 2023 Construction in progress 69,920,839.20 66,522,492.77 Productive biological asset Oil and gas asset Right-of-use assets 49,993,400.61 36,646,135.10 Intangible assets 886,455,434.73 900,568,008.21 Expense on Research and Development 97,177,535.34 102,148,390.57 Goodwill Long-term expenses to be apportioned 35,698,465.62 14,900,600.59 Deferred income tax asset 162,340,495.03 161,565,695.30 Other non-current asset 26,601,614.35 893,238.57 Total non-current asset 4,723,443,119.64 4,416,174,115.77 Total assets 19,391,604,526.19 16,205,296,370.67 Current liabilities: Short-term loans 1,134,102,419.03 674,143,916.67 Loan from central bank Capital borrowed Trading financial liability 32,229,012.86 41,961,524.78 Derivative financial liability Note payable 5,904,387,089.98 4,964,374,512.60 Account payable 3,882,303,908.89 2,917,997,138.00 Accounts received in advance 55,949.90 Contractual liability 405,698,756.02 358,755,397.77 Selling financial asset of repurchase Absorbing deposit and interbank deposit Security trading of agency Security sales of agency Wage payable 443,612,216.56 348,154,915.13 Taxes payable 91,917,751.71 80,287,878.62 Other account payable 884,714,721.30 828,207,568.21 Including: Interest payable Dividend payable 5,384,407.44 4,978,994.16 Commission charge and commission payable Reinsurance payable Liability held for sale Non-current liabilities due within one 48,822,798.47 30,287,099.08 year Other current liabilities 19,172,541.50 22,605,269.51 Total current liabilities 12,847,017,166.22 10,266,775,220.37 Non-current liabilities: Insurance contract reserve Long-term loans 108,000,000.00 148,000,000.00 Bonds payable Including: Preferred stock 179 Annual Report 2023 Perpetual capital securities Lease liability 43,488,292.70 28,164,287.97 Long-term account payable 800,347.84 1,145,286.48 Long-term wages payable 11,417,181.82 10,790,859.64 Accrual liability 32,054,790.39 32,685,631.78 Deferred income 132,977,494.33 161,013,911.91 Deferred income tax liabilities 21,814,466.43 17,509,503.08 Other non-current liabilities Total non-current liabilities 350,552,573.51 399,309,480.86 Total liabilities 13,197,569,739.73 10,666,084,701.23 Owner’s equity: Share capital 1,029,923,715.00 1,029,923,715.00 Other equity instrument Including: Preferred stock Perpetual capital securities Capital public reserve 2,805,503,457.77 2,806,493,904.30 Less: Inventory shares Other comprehensive income -20,704,362.05 -20,881,462.63 Reasonable reserve 11,246,811.91 2,467,205.78 Surplus public reserve 477,053,194.82 441,218,691.48 Provision of general risk Retained profit 1,521,759,836.64 909,249,365.79 Total owner’ s equity attributable to 5,824,782,654.09 5,168,471,419.72 parent company Minority interests 369,252,132.37 370,740,249.72 Total owner’ s equity 6,194,034,786.46 5,539,211,669.44 Total liabilities and owner’ s equity 19,391,604,526.19 16,205,296,370.67 Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 2. Balance Sheet of Parent Company In RMB Items December 31,2023 January 1,2023 Current assets: Monetary funds 4,809,758,761.19 3,104,218,400.02 Trading financial assets 18,729,757.94 21,847,922.36 Derivative financial assets Note receivable 38,674.50 Account receivable 1,451,795,533.72 1,145,561,769.05 Receivable financing 1,497,014,392.88 1,433,254,352.52 Accounts paid in advance 57,223,852.86 66,583,414.71 180 Annual Report 2023 Other account receivable 61,841,221.91 29,903,408.82 Including: Interest receivable Dividend receivable Inventories 563,055,688.46 463,576,760.77 Contractual assets 37,408.05 46,970.75 Assets held for sale Non-current assets maturing within one 122,294,027.78 170,167,638.89 year Other current assets 117,873,746.80 165,510.80 Total current assets 8,699,663,066.09 6,435,326,148.69 Non-current assets: Debt investment 185,038,444.44 121,543,750.00 Other debt investment Long-term receivables Long-term equity investments 1,857,475,810.90 1,856,359,424.33 Investment in other equity instrument Other non-current financial assets 639,796,405.98 608,527,275.52 Investment real estate 3,335,032.47 3,543,885.11 Fixed assets 1,129,605,191.26 1,127,344,454.50 Construction in progress 23,067,134.99 51,057,550.03 Productive biological assets Oil and natural gas assets Right-of-use assets 14,847,119.40 16,739,912.26 Intangible assets 450,919,869.65 467,075,020.10 Research and development costs 59,134,989.07 60,386,906.45 Goodwill Long-term deferred expenses 18,688,725.10 11,686,542.49 Deferred income tax assets 112,630,572.62 127,720,739.83 Other non-current assets 638,649.57 638,649.57 Total non-current assets 4,495,177,945.45 4,452,624,110.19 Total assets 13,194,841,011.54 10,887,950,258.88 Current liabilities: Short-term borrowings 1,128,097,377.36 618,091,666.67 Trading financial liability 13,310,995.04 13,537,472.81 Derivative financial liability Notes payable 2,697,168,522.01 2,230,728,460.34 Account payable 2,296,410,046.78 1,531,945,762.15 Accounts received in advance Contractual liability 107,529,353.67 121,216,205.12 Wage payable 159,773,962.41 64,869,503.19 Taxes payable 25,137,168.64 20,168,907.95 Other accounts payable 951,772,428.91 708,015,820.72 Including: Interest payable Dividend payable 4,784,407.44 4,378,994.16 181 Annual Report 2023 Liability held for sale Non-current liabilities due within one 42,339,541.12 22,238,340.38 year Other current liabilities 4,875,594.29 5,978,477.02 Total current liabilities 7,426,414,990.23 5,336,790,616.35 Non-current liabilities: Long-term loans 108,000,000.00 148,000,000.00 Bonds payable Including: Preferred stock Perpetual capital securities Lease liability 14,511,484.16 15,861,027.13 Long-term account payable Long term employee compensation 6,554,481.48 7,184,302.85 payable Accrued liabilities 8,758,265.23 7,785,977.55 Deferred income 75,130,950.40 84,762,685.97 Deferred income tax liabilities 13,589,235.48 11,153,985.85 Other non-current liabilities Total non-current liabilities 226,544,416.75 274,747,979.35 Total liabilities 7,652,959,406.98 5,611,538,595.70 Owners’ equity: Share capital 1,029,923,715.00 1,029,923,715.00 Other equity instrument Including: Preferred stock Perpetual capital securities Capital public reserve 2,740,508,510.57 2,740,508,510.57 Less: Inventory shares Other comprehensive income Special reserve 505,111.75 687,069.38 Surplus reserve 476,835,029.14 441,000,525.80 Retained profit 1,294,109,238.10 1,064,291,842.43 Total owner’s equity 5,541,881,604.56 5,276,411,663.18 Total liabilities and owner’s equity 13,194,841,011.54 10,887,950,258.88 Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 3. Consolidated Profit Statement In RMB 2023 2022 I. Total operating income 24,247,678,970.56 20,215,220,192.20 Including: Operating income 24,247,678,970.56 20,215,220,192.20 182 Annual Report 2023 Interest income Insurance gained Commission charge and commission income II. Total operating cost 23,472,449,382.09 19,895,690,025.90 Including: Operating cost 20,866,555,797.73 17,444,530,235.32 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Tax and extras 195,095,277.47 158,529,459.29 Sales expense 1,571,486,417.63 1,428,874,991.47 Administrative expense 361,134,794.49 358,586,472.37 R&D expense 596,920,491.26 560,383,547.49 Financial expense -118,743,396.49 -55,214,680.04 Including: Interest expenses 30,088,976.40 30,470,512.88 Interest income 191,805,963.97 159,034,499.30 Add: Other income 146,608,702.27 102,556,591.53 Investment income (Loss is listed with 8,438,592.04 33,018,838.80 “-”) Including: Investment income on 19,133,884.40 20,440,095.97 affiliated company and joint venture The termination of income recognition for financial assets measured by -22,489,932.70 -24,385,552.13 amortized cost Exchange income (Loss is listed with “-”) Net exposure hedging income (Loss is listed with “-”) Income from change of fair value 7,565,104.05 24,137,501.27 (Loss is listed with “-”) Loss of credit impairment (Loss is listed -81,621,384.13 -164,446,765.99 with “-”) Losses of devaluation of asset (Loss is -55,134,397.60 -56,496,124.06 listed with “-”) Income from assets disposal (Loss is 1,336,229.47 27,602,023.18 listed with “-”) III. Operating profit (Loss is listed with 802,422,434.57 285,902,231.03 “-”) 183 Annual Report 2023 Add: Non-operating income 14,660,583.17 9,249,343.27 Less: Non-operating expense 7,732,783.31 8,487,764.98 IV. Total profit (Loss is listed with “-”) 809,350,234.43 286,663,809.32 Less: Income tax expense 36,147,590.26 9,565,346.81 V. Net profit (Net loss is listed with “-”) 773,202,644.17 277,098,462.51 (i) Classify by business continuity 1.continuous operating net profit (net 773,202,644.17 277,098,462.51 loss listed with ‘-”) 2.termination of net profit (net loss listed with ‘-”) (ii) Classify by ownership 1.Net profit attributable to owner’s of 741,038,108.54 244,538,734.49 parent company 2.Minority shareholders’ gains and losses 32,164,535.63 32,559,728.02 VI. Net after-tax of other comprehensive 433,908.69 184,552.23 income Net after-tax of other comprehensive income attributable to owners of parent 177,100.58 21,807.94 company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (ii) Other comprehensive income items which will be reclassified subsequently 177,100.58 21,807.94 to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 3.Amount of financial assets re-classify to other comprehensive income 4.Credit impairment provision for other debt investment 184 Annual Report 2023 5.Cash flow hedging reserve 6.Translation differences arising on translation of foreign currency financial 177,100.58 21,807.94 statements 7.Other Net after-tax of other comprehensive income attributable to minority 256,808.11 162,744.29 shareholders VII. Total comprehensive income 773,636,552.86 277,283,014.74 Total comprehensive income attributable 741,215,209.12 244,560,542.43 to owners of parent Company Total comprehensive income attributable 32,421,343.74 32,722,472.31 to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.7195 0.2366 (ii) Diluted earnings per share 0.7195 0.2366 As for the enterprise combined under the same control, net profit of 0 yuan achieved by the merged party before combination while 0 yuan achieved last period Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 4. Profit Statement of Parent Company In RMB Item 2023 2022 I. Operating income 9,608,398,530.57 7,398,328,633.00 Less: Operating cost 8,694,749,484.01 6,720,247,726.04 Taxes and surcharge 86,233,117.13 63,202,337.06 Sales expenses 274,974,268.69 189,954,443.11 Administration expenses 139,854,173.76 132,320,693.51 R&D expenses 281,165,357.51 245,429,316.63 Financial expenses -34,410,768.97 -17,219,867.57 Including: Interest expenses 28,980,467.63 28,128,736.65 Interest income 91,292,890.78 77,631,152.76 Add: Other income 26,474,061.57 31,044,974.74 Investment income (Loss is listed with 190,286,552.58 79,584,251.32 “-”) Including: Investment income on 18,713,956.61 11,196,374.66 affiliated Company and joint venture The termination of income recognition for financial assets measured by -6,157,758.00 -4,767,753.29 amortized cost (Loss is listed with “-”) 185 Annual Report 2023 Net exposure hedging income (Loss is listed with “-”) Changing income of fair value (Loss is 13,710,776.81 20,986,049.21 listed with “-”) Loss of credit impairment (Loss is listed -9,095,054.57 -40,156,897.45 with “-”) Losses of devaluation of asset (Loss is -11,009,739.57 -192,559.56 listed with “-”) Income on disposal of assets (Loss is 1,382,274.00 27,531,109.99 listed with “-”) II. Operating profit (Loss is listed with 377,581,769.26 183,190,912.47 “-”) Add: Non-operating income 1,740,921.86 2,611,298.85 Less: Non-operating expense 3,452,240.92 2,250,917.85 III. Total Profit (Loss is listed with “-”) 375,870,450.20 183,551,293.47 Less: Income tax 17,525,416.84 2,648,942.71 IV. Net profit (Net loss is listed with “-”) 358,345,033.36 180,902,350.76 (i) continuous operating net profit (net 358,345,033.36 180,902,350.76 loss listed with ‘-”) (ii) termination of net profit (net loss listed with ‘-”) V. Net after-tax of other comprehensive income (i) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 186 Annual Report 2023 3.Amount of financial assets re-classify to other comprehensive income 4.Credit impairment provision for other debt investment 5.Cash flow hedging reserve 6.Translation differences arising on translation of foreign currency financial statements 7.Other VI. Total comprehensive income 358,345,033.36 180,902,350.76 VII. Earnings per share: (i) Basic earnings per share 0.3479 0.1750 (ii) Diluted earnings per share 0.3479 0.1750 Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 5. Consolidated Cash Flow Statement In RMB Item 2023 2022 I. Cash flows arising from operating activities: Cash received from selling commodities 25,221,834,323.66 21,089,427,398.84 and providing labor services Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Net cash received by agents in sale and purchase of securities Write-back of tax received 635,547,201.36 642,483,547.59 Other cash received concerning 109,951,859.80 218,923,533.27 187 Annual Report 2023 operating activities Subtotal of cash inflow arising from 25,967,333,384.82 21,950,834,479.70 operating activities Cash paid for purchasing commodities 20,643,740,044.38 17,573,333,598.31 and receiving labor service Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Net increase of capital lent Cash paid for interest, commission charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 1,916,516,956.80 1,740,232,680.16 Taxes paid 563,839,013.94 516,256,689.43 Other cash paid concerning operating 760,894,064.66 655,855,763.74 activities Subtotal of cash outflow arising from 23,884,990,079.78 20,485,678,731.64 operating activities Net cash flows arising from operating 2,082,343,305.04 1,465,155,748.06 activities II. Cash flows arising from investing activities: Cash received from recovering 1,290,000,000.00 923,322,268.35 investment Cash received from investment income 38,159,487.68 41,956,520.69 Net cash received from disposal of fixed, 4,122,107.93 78,341,283.79 intangible and other long-term assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing 190,064,612.83 161,913,535.52 activities Subtotal of cash inflow from investing 1,522,346,208.44 1,205,533,608.35 activities Cash paid for purchasing fixed, 274,018,117.08 276,171,087.23 intangible and other long-term assets Cash paid for investment 1,531,781,453.97 1,300,000,000.00 Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning investing 116,256,169.35 135,747,164.72 activities 188 Annual Report 2023 Subtotal of cash outflow from investing 1,922,055,740.40 1,711,918,251.95 activities Net cash flows arising from investing -399,709,531.96 -506,384,643.60 activities III. Cash flows arising from financing activities: Cash received from absorbing 368,459,272.52 investment Including: Cash received from absorbing minority shareholders’ investment by 368,459,272.52 subsidiaries Cash received from loans 1,923,365,052.15 1,255,467,515.59 Other cash received concerning 370,831,446.18 23,536,567.33 financing activities Subtotal of cash inflow from financing 2,294,196,498.33 1,647,463,355.44 activities Cash paid for settling debts 1,489,564,263.12 1,522,040,918.37 Cash paid for dividend and profit 133,439,380.60 109,680,687.85 distributing or interest paying Including: Dividend and profit of 16,677,010.63 25,417,858.64 minority shareholder paid by subsidiaries Other cash paid concerning financing 89,323,864.66 770,652,259.57 activities Subtotal of cash outflow from financing 1,712,327,508.38 2,402,373,865.79 activities Net cash flows arising from financing 581,868,989.95 -754,910,510.35 activities IV. Influence on cash and cash equivalents due to fluctuation in 13,403,803.08 69,166,544.08 exchange rate V. Net increase of cash and cash 2,277,906,566.11 273,027,138.19 equivalents Add: Balance of cash and cash 6,113,222,069.76 5,840,194,931.57 equivalents at the period -begin VI. Balance of cash and cash equivalents 8,391,128,635.87 6,113,222,069.76 at the period -end Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 6. Cash Flow Statement of Parent Company In RMB 189 Annual Report 2023 Item 2023 2022 I. Cash flows arising from operating activities: Cash received from selling commodities 8,764,645,288.77 7,440,766,977.75 and providing labor services Write-back of tax received 219,064,162.92 224,205,911.53 Other cash received concerning 39,429,001.18 75,592,511.92 operating activities Subtotal of cash inflow arising from 9,023,138,452.87 7,740,565,401.20 operating activities Cash paid for purchasing commodities 7,020,255,494.88 6,385,517,418.45 and receiving labor service Cash paid to/for staff and workers 555,776,356.25 508,284,706.96 Taxes paid 130,615,286.70 67,235,152.14 Other cash paid concerning operating 247,010,356.89 227,845,615.46 activities Subtotal of cash outflow arising from 7,953,657,494.72 7,188,882,893.01 operating activities Net cash flows arising from operating 1,069,480,958.15 551,682,508.19 activities II. Cash flows arising from investing activities: Cash received from recovering 170,094,761.15 457,300,378.10 investment Cash received from investment income 252,919,498.24 82,054,474.12 Net cash received from disposal of fixed, 4,023,955.68 78,191,029.45 intangible and other long-term assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing 92,192,116.86 82,511,271.70 activities Subtotal of cash inflow from investing 519,230,331.93 700,057,153.37 activities Cash paid for purchasing fixed, 145,165,539.29 164,617,367.95 intangible and other long-term assets Cash paid for investment 239,391,719.60 730,000,000.00 Net cash received from subsidiaries and other units obtained Other cash paid concerning investing 54,598,530.06 49,326,025.46 activities Subtotal of cash outflow from investing 439,155,788.95 943,943,393.41 activities Net cash flows arising from investing 80,074,542.98 -243,886,240.04 activities 190 Annual Report 2023 III. Cash flows arising from financing activities: Cash received from absorbing investment Cash received from loans 1,917,365,052.15 1,189,467,515.59 Other cash received concerning 191,861,996.18 3,251,034.56 financing activities Subtotal of cash inflow from financing 2,109,227,048.33 1,192,718,550.15 activities Cash paid for settling debts 1,433,564,263.12 1,502,040,918.37 Cash paid for dividend and profit 115,586,128.29 81,201,833.46 distributing or interest paying Other cash paid concerning financing 52,320,157.85 264,626,271.90 activities Subtotal of cash outflow from financing 1,601,470,549.26 1,847,869,023.73 activities Net cash flows arising from financing 507,756,499.07 -655,150,473.58 activities IV. Influence on cash and cash equivalents due to fluctuation in 1,866,961.18 19,360,991.70 exchange rate V. Net increase of cash and cash 1,659,178,961.38 -327,993,213.73 equivalents Add: Balance of cash and cash 3,086,968,775.61 3,414,961,989.34 equivalents at the period -begin VI. Balance of cash and cash equivalents 4,746,147,736.99 3,086,968,775.61 at the period -end Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 191 长虹美菱股份有限公司 2023 年年度报告 7. Statement of Changes in Owners’ Equity (Consolidated) This Period In RMB 2023 Owners’ equity attributable to the parent Company Other equity instrument Prov Less: Perp Capi Other Reaso ision Item Inve etual tal compreh nable Surplus of Retained Othe Minority interests Total owners’ equity Share capital Prefe ntory Subtotal capit Othe reser ensive reserv reserve gene profit r rred share al r ve income e ral stock s secur risk ities I. The ending 2,80 - 2,467, balance of 1,029,923,71 6,49 441,201,471.9 909,082,037. 20,881,4 205.7 5,168,286,872.09 370,748,395.26 5,539,035,267.35 the 5.00 3,90 8 66 62.63 8 previous 4.30 year Add: Changes of 17,219.50 167,328.13 184,547.63 -8,145.54 176,402.09 accountin g policy Error correction of the last 192 长虹美菱股份有限公司 2023 年年度报告 period Other II. The 2,80 beginning - 2,467, 1,029,923,71 6,49 441,218,691.4 909,249,365. balance of 20,881,4 205.7 5,168,471,419.72 370,740,249.72 5,539,035,267.35 5.00 3,90 8 79 the current 62.63 8 4.30 year III. Increase/ Decrease - 8,779, in the 990, 177,100. 612,510,470. 606.1 35,834,503.34 656,311,234.37 -1,488,117.35 654,823,117.02 period 446. 58 85 3 (Decrease 53 is listed with “-”) (i) Total comprehe 177,100. 741,038,108. 741,215,209.12 32,421,343.74 773,636,552.86 nsive 58 54 income (ii) Owners’ - devoted 990, -990,446.53 -18,627,553.47 -19,618,000.00 and 446. decreased 53 capital 1.Commo n shares invested by 193 长虹美菱股份有限公司 2023 年年度报告 sharehold ers 2. Capital invested by holders of other equity instrument s 3. Amount reckoned into owners equity with share- based payment - 990, 4. Other -990,446.53 -18,627,553.47 -19,618,000.00 446. 53 (iii) Profit - distributio 35,834,503.34 128,527,637. -92,693,134.35 -16,677,010.63 -109,370,144.98 n 69 1. - Withdraw 35,834,503.34 35,834,503.3 al of 4 surplus 194 长虹美菱股份有限公司 2023 年年度报告 reserves 2. Withdraw al of general risk provisions 3. Distributi - on for 92,693,134.3 -92,693,134.35 -16,677,010.63 -109,370,144.98 owners (or 5 sharehold ers) 4. Other (iv) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed 195 长虹美菱股份有限公司 2023 年年度报告 to capital (share capital) 3. Remedyin g loss with surplus reserve 4. Carry- over retained earnings from the defined benefit plans 5. Carry- over retained earnings from other comprehe nsive income 6. Other (v) 8,779, Reasonabl 606.1 8,779,606.13 1,395,103.01 10,174,709.14 e reserve 3 196 长虹美菱股份有限公司 2023 年年度报告 1. Withdraw 31,27 al in the 7,872. 31,277,872.27 2,105,658.15 33,383,530.42 report 27 period 2. Usage 22,49 in the 8,266. 22,498,266.14 710,555.14 23,208,821.28 report 14 period (vi) Others IV. 2,80 - 11,246 Balance at 1,029,923,71 5,50 477,053,194.8 1,521,759,83 20,704,3 ,811.9 5,824,782,654.09 369,252,132.37 6,194,034,786.46 the end of 5.00 3,45 2 6.64 62.05 1 the period 7.77 Last Period In RMB 2022 Owners’ equity attributable to the parent Company Other equity instrument Less: Shar Perp Capi Other Reaso Provis Item Inve e etual tal compreh nable Surplus ion of Minority interests Total owners’ equity Prefe ntory Retained profit Other Subtotal capit capit Othe reser ensive reserv reserve gener rred share al al r ve income e al risk stock s secur ities I. The ending 1,04 2,68 26,4 - 423,111,236.9 734,129,724.0 4,837,334,400. 157,456,980.84 4,994,791,381.05 197 长虹美菱股份有限公司 2023 年年度报告 balance of the 4,59 2,82 30,5 20,903,2 0 0 21 previous year 7,88 9,40 71.3 70.57 1.00 0.26 8 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control 1,04 2,68 26,4 - 4,59 2,82 30,5 423,111,236.9 734,129,724.0 4,837,334,400. Other 20,903,2 157,456,980.84 4,994,791,381.05 7,88 9,40 71.3 0 0 21 70.57 1.00 0.26 8 - - 123, II. The beginning 14,6 26,4 2,467, 664, 21,807.9 174,952,313.6 330,952,471.8 balance of the 74,1 30,5 205.7 18,090,235.08 213,291,414.42 544,243,886.30 504. 4 6 8 current year 66.0 71.3 8 04 0 8 III. Increase/ Decrease in the 21,807.9 244,538,734.4 244,560,542.4 32,722,472.31 277,283,014.74 period (Decrease 4 9 3 is listed with “-”) - - 123, (i) Total 14,6 26,4 664, 135,420,909.4 comprehensive 74,1 30,5 205,763,149.35 341,184,058.77 504. 2 income 66.0 71.3 04 0 8 (ii) Owners’ - - - -737,262.35 228,415,223.18 227,677,960.83 198 长虹美菱股份有限公司 2023 年年度报告 devoted and 14,6 12,4 26,4 decreased capital 74,1 93,6 30,5 66.0 67.7 71.3 0 3 8 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount 136, reckoned into 158, 136,158,171.7 owners equity -22,652,073.83 113,506,097.94 171. 7 with share-based 77 payment - - 4. Other 18,090,235.08 -25,417,858.64 -76,914,044.39 69,586,420.83 51,496,185.75 (iii) Profit - 18,090,235.08 distribution 18,090,235.08 1. Withdrawal of surplus reserves 2. Withdrawal of - - general risk -25,417,858.64 -76,914,044.39 51,496,185.75 51,496,185.75 provisions 3. Distribution for owners (or shareholders) 4. Other 199 长虹美菱股份有限公司 2023 年年度报告 (iv) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Carry-over retained earnings from the defined benefit plans 5. Carry-over retained earnings from other comprehensive income 2,467, 6. Other 205.7 2,467,205.78 223,651.40 2,690,857.18 8 (v) Reasonable 2,467, 2,467,205.78 223,651.40 2,690,857.18 reserve 205.7 200 长虹美菱股份有限公司 2023 年年度报告 8 1. Withdrawal in the report period 2. Usage in the report period 1,02 2,80 - 2,467, 9,92 6,49 441,201,471.9 909,082,037.6 5,168,286,872. (vi) Others 20,881,4 205.7 370,748,395.26 5,539,035,267.35 3,71 3,90 8 6 09 62.63 8 5.00 4.30 IV. Balance at the end of the period Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 8. Statement of Changes in Owners’ Equity (Parent Company) This Period In RMB 2023 Other Othe equity instrument r com Surp Less: Item Capital preh Reasonable lus Share capital Perpetual Inventory Retained profit Other Total owners’ equity Preferred reserve ensi reserve reser capital Other shares stock ve ve securities inco me I. The ending 440, 1,029,923,71 2,740,50 balance of the 687,069.38 983, 1,064,136,866.98 5,276,239,468.23 5.00 8,510.57 previous year 306. 201 长虹美菱股份有限公司 2023 年年度报告 30 Add: Changes 17,2 of accounting 19.5 154,975.45 172,194.95 policy 0 Error correction of the last period Other II. The 441, beginning 1,029,923,71 2,740,50 000, 687,069.38 1,064,291,842.43 5,276,411,663.18 balance of the 5.00 8,510.57 525. current year 80 III. Increase/ Decrease in 35,8 the period 34,5 -181,957.63 229,817,395.67 265,469,941.38 (Decrease is 03.3 listed with 4 “-”) (i) Total comprehensiv 358,345,033.36 358,345,033.36 e income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 202 长虹美菱股份有限公司 2023 年年度报告 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share- based payment 4. Other 35,8 (iii) Profit 34,5 -128,527,637.69 -92,693,134.35 distribution 03.3 4 35,8 1. Withdrawal 34,5 of surplus -35,834,503.34 03.3 reserves 4 2. Distribution for owners (or -92,693,134.35 -92,693,134.35 shareholders) 3. Other (iv) Carrying forward internal owners’ equity 203 长虹美菱股份有限公司 2023 年年度报告 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Carry-over retained earnings from the defined benefit plans 5. Carry-over retained earnings from other comprehensiv e income 6. Other (v) Reasonable -181,957.63 -181,957.63 reserve 204 长虹美菱股份有限公司 2023 年年度报告 1. Withdrawal in the report 8,557,762.79 8,557,762.79 period 2. Usage in the report 8,739,720.42 8,739,720.42 period (vi) Others 476, IV. Balance at 1,029,923,71 2,740,50 835, the end of the 505,111.75 1,294,109,238.10 5,541,881,604.56 5.00 8,510.57 029. period 14 Last period In RMB 2022 Other Other equity instrument compr Less: Item Capital ehensi Reasonabl Surplus Share capital Perpetual Inventory Retained profit Other Total owners’ equity Preferred reserve ve e reserve reserve capital Other shares stock incom securities e I. The ending 1,044,597,88 2,753,00 26,430,571. 422,893, balance of the 952,820,937.05 5,146,883,496.19 1.00 2,178.30 38 071.22 previous year Add: Changes of accounting policy Error correction of the last period 205 长虹美菱股份有限公司 2023 年年度报告 Other II. The beginning 1,044,597,88 2,753,00 26,430,571. 422,893, 952,820,937.05 5,146,883,496.19 balance of the 1.00 2,178.30 38 071.22 current year III. Increase/ Decrease in - - - the period 687,069.3 18,090,2 14,674,166.0 12,493,6 26,430,571. 111,315,929.93 129,355,972.04 (Decrease is 8 35.08 0 67.73 38 listed with “-”) (i) Total comprehensiv 180,902,350.76 180,902,350.76 e income (ii) Owners’ - - - devoted and 14,674,166.0 12,493,6 26,430,571. -737,262.35 decreased 0 67.73 38 capital 1.Common - - - shares 14,674,166.0 12,493,6 26,430,571. -737,262.35 invested by 0 67.73 38 shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into 206 长虹美菱股份有限公司 2023 年年度报告 owners equity with share- based payment 4. Other (iii) Profit 18,090,2 -69,586,420.83 -51,496,185.75 distribution 35.08 1. Withdrawal 18,090,2 of surplus -18,090,235.08 35.08 reserves 2. Distribution for owners (or -51,496,185.75 -51,496,185.75 shareholders) 3. Other (iv) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 207 长虹美菱股份有限公司 2023 年年度报告 3. Remedying loss with surplus reserve 4. Carry-over retained earnings from the defined benefit plans 5. Carry-over retained earnings from other comprehensiv e income 6. Other (v) 687,069.3 Reasonable 687,069.38 8 reserve 1. Withdrawal 687,069.3 in the report 687,069.38 8 period 2. Usage in the report period (vi) Others IV. Balance at 1,029,923,71 2,740,50 687,069.3 440,983, the end of the 1,064,136,866.98 5,276,239,468.23 5.00 8,510.57 8 306.30 period 208 长虹美菱股份有限公司 2023 年年度报告 Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun 209 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) I. Company profile Changhong Meiling Co., Ltd (hereinafter referred to as “the Company”) ,originally named as Hefei Meiling Co., Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator General Factory and approved on June 12th 1992 through [WanTiGaiHanZi (1992) No.039] issued by original Mechanism Reform Committee of Anhui Province. On August 30th 1993, through Anhui Provincial Government [Wanzhenmi (1993) No.166] and re-examination of China Securities Regulatory Commission, the Company made first public issue for 30 million A shares and the Company was listed on Oct. 18th, 1993 in Shenzhen Stock Exchange. On August 13th, 1996, the Company was approved to issue 100 million B shares to investors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory Commission. The Company went public in Shenzhen Stock Exchange on August 28th, 1996. State-owned Assets Supervision & Administration Commission of the State Council approved such transfers with Document Guozi Chanquan (2007) No.253 Reply on Matters of Hefei Meiling Group Holdings Limited Transferring Partial State-owned Ownership, Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group) transferred its holding 37,852,683 shares in 82,852,683 state-owned shares of the Company to Sichuan Changhong Electronic Group Co., Ltd (hereinafter referred to as Changhong Group), other 45,000,000 shares to Sichuan Changhong Electric Co. Ltd (hereinafter referred to as Sichuan Changhong). On Aug 15, 2007, the above ownership was transferred and Cleaning Corporation Limited. On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui Provincial Government replied with Document [WGZCQH (2007) No.309] Reply on “Related Matters of Share Merger Reform of Hefei Meiling Co., Ltd.”, agreed the Company’s ownership split reform plan. The Company made consideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares, and original Meiling Group made prepayment 3,360,329 shares for some non-tradable share holders as consideration for split reform plan. On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group, the “Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group”[HGZCQ(2008) No. 59] issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal, agrees to transfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(“Xingtai Holding Co.,”) for free. On 7 August 2008, the “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned shareholders” [GZCQ (2007) No. 752] issued by SASAC, agrees the above said transferring. On October 29, 2008, Changhong Group signed Agreement on Equity Transfer of Hefei Meiling Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of the Company (accounting for 7.76% in total shares) held by Changhong Group. On 23 December 2008, “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned shareholders” [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring. On 24 December 2010, being deliberated and approved in 32nd Session of 6th BOD and 2nd Extraordinary 210 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Shareholders’ General Meeting of 2010 as well as approval of document [ZJXK (2010) No. 1715] from CSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target investors with issue price of RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after issuing expenses RMB 22,045,500 deducted, net capital collected amounting to RMB 1,177,954,320, and paid-in capital (share capital) increased RMB 116,731,500 with capital reserve (share premium) RMB 1,061,106,088.5 increased. The increasing capital has been verified by Capital Verification Report No.: [XYZH2010CDA6021]issued from Shin Wing CPA Co., Ltd. On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit distribution plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares held by shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December 2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. The capital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification report WHSZDKYZ (2011) No.141. On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distribution and capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares to all shareholders capitalized from capital reserve, based on the total share capital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company upon implementation of capitalization of capital reserve increased to 763,739,205 shares from 636,449,338 shares, and was verified by Anhui Anlian Xinda Accounting Firm with the verification report WALXDYZ (2012) No.093. On November 18, 2015, considered and approved by the 12th Session of the 8th BOD of the company and the first extraordinary general meeting in 2016, and approved by the document of China Securities Regulatory Commission [CSRC License No. (2016) 1396] “Reply to the approval of non-public offering of shares of Hefei Meiling Co., Ltd.”, the company has actually raised funds of 1,569,999,998.84 yuan by non-public offering of no more than 334,042,553 new shares at face value of 1 yuan per share and with issue price no less than 4.70 yuan per share, after deducting the issue costs of 29,267,276.08 yuan, the net amount of raised funds is 1,540,732,722.76 yuan, the increased paid-in capital (share capital) of 280,858,676.00 yuan, increased capital reserve (share premium) of 1,259,874,046.76 yuan. This capital increase has been verified by No.[XYZH2016CDA40272]capital verification report of Shine Wing Certified Public Accountants (LLP). Since the first repurchase of shares on November 4, 2020, the company had cumulatively repurchased 14,674,166 shares of the company (B shares) in centralized bidding transactions through the special securities account for repurchase until February 18, 2022, and completed the cancellation procedures of the repurchased shares at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 2, 2022, a total of 14,674,166 shares of the company (B shares) were cancelled, accounting for 1.4048% of the company's total share capital before cancellation. After the cancellation, the total share capital of the company was reduced from 1,044,597,881 shares to 1,029,923,715 shares. Ended as December 31, 2023, total share capital of the Company amounting to 1,029,923,715shares with ordinary shares in full. Among which, 881,733,881 shares of A-share accounting 85.62% in total shares while B-share with 148,189,834 shares accounting 14.38% in total shares. Specific capital structure is as follows: 211 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Type of stock Quantity Proportion (I)Restricted shares 7,688,842.00 0.75 1. State-owned shares 2. State-owned legal person’s shares 1,141,053.00 0.11 3. Other domestic shares 5,280,369.00 0.52 Including: Domestic legal person’s shares 3,363,539.00 0.33 Domestic natural person’s shares 1,916,830.00 0.19 4. Foreign shares 1,267,420.00 0.12 Including: Overseas legal person’s shares Overseas natural person’s shares 1,267,420.00 0.12 (II)Unrestricted shares 1,022,234,873.00 99.25 1. RMB Ordinary shares 875,312,459.00 84.99 2. Domestically listed foreign shares 146,922,414.00 14.26 3. Overseas listed foreign shares 4. Others Total shares 1,029,923,715.00 100.00 The Company belongs to the electrical machinery and equipment manufacturing industry, and engaged in the production and sale of refrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK; Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; Legal Representative: Wu Dinggang; register capital (paid-in capital): 1,029,923,715 yuan; type of company: limited liability company(joint venture and listed of Taiwan, Hong Kong and Macao) This financial statement was approved by the Board of Directors of the Company on March 28, 2024. According to the Articles of Association of the Company, the financial statement will be submitted to the General Meeting of Shareholders for review. II.Basis for preparation of financial statement 1.Basis for preparation According to the actual transactions and matters, the Company's financial statements are prepared in accordance with the Accounting Standards for Business Enterprises and its application guidelines, explanations and other relevant provisions (hereinafter referred to as "Accounting Standards for Business Enterprises") promulgated by the Ministry of Finance, as well as the disclosure-related provisions of No.15 Rules on Information Disclosure and Compilation of Companies Offering Securities to the Public - General Provisions on Financial Reports (revised in 2023) issued by China Securities Regulatory Commission (hereinafter referred to as "CSRC"). 2.Continuous operation The Company recently has a history of profitability operation and has financial resources supporting, and prepared the financial statement on basis of going concern is reasonable. III.Significant Accounting Policy and accounting Estimation Specific accounting policies and accounting estimates: The specific accounting policies and accounting estimates 212 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) formulated by the Company according to the actual production and operation characteristics include bad debt provision of receivable, inventory depreciation provision, capitalization conditions of R&D expenses, revenue recognition and measurement, etc. 1.Statement on observation of accounting standards for enterprise The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises, and truly, accurately and completely reflect the financial status of the Company on December 31, 2023, as well as the operating results and cash flow in 2023. 2.Accounting period The accounting period of the Company is the calendar date from 1 January to 31 December. 3.Operation cycle Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets and liabilities. 4.Standard currency for accounting The Company takes RMB as the standard currency for accounting. 5.Determination method and selection basis of importance standard The Company follows the principle of materiality in preparing and disclosing financial statements. The matters disclosed in the notes to the financial statements involving judgement by materiality standard, and the determination method and selection basis of materiality standard are as follows: Matters disclosed involving the judgment by Determination method and selection basis of importance materiality standards standard The individual recovery or reversal amount accounts for more than Recovery or reversal of important accounts receivable 10% of the total recovery or reversal amount of accounts receivable, bad debt reserves and the amount is greater than RMB 10 million The single item write off amount accounts for more than 10% of the Actual write off of important accounts receivable total bad debt write off amount of various receivables, and the amount is greater than 5 million yuan The single provision amount accounts for 10% of the total bad debt Important accounts receivable with single provision for provision for various accounts receivable and is greater than RMB bad debt reserves 50 million Single debt investment accounts for 5% of the total debt investment Important debt investment and the amount is greater than RMB 20 million The change in the book value of contract assets accounts for more Significant changes in the book value of contract assets than 30% of the initial balance of contract assets Important ongoing projects The budget for a single project is greater than RMB 50 million Important capitalized research and development projects The budget for a single project is greater than RMB 20 million Significant changes in the book value of contractual The change in the book value of contractual liabilities accounts for liabilities more than 30% of the initial balance of contractual liabilities 213 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Matters disclosed involving the judgment by Determination method and selection basis of importance materiality standards standard Accounts payable with a single account age exceeding 1 year Important accounts payable account for more than 5% of the total accounts payable and with an amount greater than RMB 100 million Other payables with a single account age exceeding 1 year account Important other payables for more than 5% of the total other payables and an amount greater than RMB 50 million Subsidiary net assets account for over 1% of the company's net Important non wholly-owned subsidiaries assets The book value of long-term equity investments in a single invested entity accounts for more than 1% of the company's net assets and Important joint ventures or associates the amount is greater than RMB 50 million, or the investment gains and losses under the equity method account for more than 1% of the company's consolidated net profit Individual investment activities account for more than 10% of the Important investment activities total cash inflows or outflows related to received or paid investment activities, and the amount is greater than RMB 100 million Significant activities that do not involve current cash Not involving current cash inflows and outflows, with an impact on inflows and outflows the current financial statements greater than 10% of net assets 6.Accountant arrangement method of business combination under common control and not under common control As acquirer, the Company measures the assets and liabilities acquired through business combination under common control at their carrying values as reflected in the consolidated financial statement of the ultimate controller as of the combination date. Capital reserve shall be adjusted in respect of any difference between carrying value of the net assets acquired and carrying value of the combination consideration paid. In case that capital reserve is insufficient to offset, the Company would adjust retained earnings. The acquiree’s net identifiable assets, liabilities or contingent liabilities acquired through business combination not under common control shall be measured at fair value as of the acquisition date. The cost of combination represents the fair value of the cash or non-cash assets paid, liabilities issued or committed and equity securities issued by the Company as at the date of combination in consideration for acquiring the controlling power in the acquiree, together with the sum of any directly related expenses occurred during business combination(in case of such business combination as gradually realized through various transactions, the combination cost refers to the sum of each cost of respective separate transaction). Where the cost of the combination exceeds the acquirer’s interest in the fair value of the acquirer’s identifiable net assets acquired, the difference is recognized as goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the Company shall firstly make further review on the fair values of the net identifiable assets, liabilities or contingent liabilities acquired as well as the fair value of the non-cash assets portion of combination consideration or the equity securities issued by the Company. In case that the Company finds the cost of combination is still lower than the 214 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) acquirer’s interest in the fair value of the acquiree’s identifiable net assets after such further review, the difference is recognized in non-operating income for the current period when combination occurs. 7.Criteria for Control and Preparation Method of Consolidated Financial Statements Control means that the Company has the power over the investee, enjoys variable returns by participating in the related activities of the investee, and has the ability to influence the amount of returns by using the power over the investee. The Company shall put all the subsidiaries controlled and main body structured into consolidated financial statements. Any difference arising from the inconformity of accounting year or accounting policies between the subsidiaries and the Company shall be adjusted in the consolidated financial statements. All the material inter-company transactions, non-extraordinary items and unrealized profit within the combination scope are written-off when preparing consolidated financial statement. Owners’ equity of subsidiary not attributable to parent company and current net gains and losses, other comprehensive income and total comprehensive income attributable to minority shareholders are recognized as non-controlling interests, minority interests, other comprehensive income attributable to minority shareholders and total comprehensive income attributable to minority shareholders in consolidated financial statement respectively. As for subsidiary acquired through business combination under common control, its operating results and cash flow will be included in consolidated financial statement since the beginning of the period when combination occurs. When preparing comparative consolidated financial statement, the relevant items in previous years financial statement shall be adjusted as if the reporting entity formed upon combination has been existing since the ultimate controller commenced relevant control. As for equity interests of the investee under common control acquired through various transactions which eventually formed business combination, the Company shall supplement disclosure of the accounting treatment in consolidated financial statement in the reporting period when controlling power is obtained. For example, as for equity interests of the investee under common control acquired through various transactions which eventually formed business combination, adjustments shall be made as if the current status had been existing when the ultimate controller commenced control in connection of preparing consolidated financial statement; in connection with preparing comparative statement, the Company shall consolidate the relevant assets and liabilities of the acquiree into the Company’s comparative consolidated financial statement to the extent not earlier than the timing when the Company and the acquiree are all under control of the ultimate controller, and the net assets increased due to combination shall be used to adjust relevant items under owners’ equity in comparative statement. In order to prevent double computation of the value of the acquiree’s net assets, the relevant profits and losses, other comprehensive income and change of other net assets recognized during the period from the date when the Company acquires original equity interests and the date when the Company and the acquiree are all under ultimate control of the same party (whichever is later) to the date of combination in respect of the long-term equity investment held by the Company before satisfaction of combination shall be utilized to offset the beginning retained earnings and current gains and 215 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) losses in the period as the comparative financial statement involves, respectively. As for subsidiary acquired through business combination not under common control, its operating results and cash flow will be included in consolidated financial statement since the Company obtains controlling power. When preparing consolidated financial statement, the Company shall adjust the subsidiary’s financial statement based on the fair value of the various identifiable assets, liabilities or contingent liabilities recognized as of the acquisition date. As for equity interests of the investee not under common control acquired through various transactions which eventually formed business combination, the Company shall supplement disclosure of the accounting treatment in consolidated financial statement in the reporting period when controlling power is obtained. For example, as for equity interests of the investee not under common control acquired through various transactions which eventually formed business combination, when preparing consolidated financial statement, the Company would re-measure the equity interests held in the acquiree before acquisition date at their fair value as of the acquisition date, and any difference between the fair value and carrying value is included in current investment income. in case that the equity interests in acquiree held by the Company before the relevant acquisition date involves other comprehensive income at equity method and change of other owners’ equity (other than net gains and losses, other comprehensive income and profit distribution), then the equity interests would transfer to investment gains and losses for the period which the acquisition date falls upon. The other comprehensive income arising from change of the net liabilities or net assets under established benefit scheme as acquiree’s re-measured such scheme is excluded. The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary without losing control rights over the subsidiary, the difference between the proceeds from disposal of interests and the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In case capital reserve is not sufficient to offset the difference, retained earnings will be adjusted. As for disposal of part equity investment which leads to losing control over the investee, the Company would re- measure the remaining equity interests at their fair value as of the date when the Company loses control over the investee when preparing consolidated financial statement. The sum of consideration received from disposal of equity interest and fair value of the remaining equity interest, less the net assets of the original subsidiary attributable to the Company calculated based on the original shareholding proportion since the acquisition date or the date then consolidation commences, is included in investment gains and losses for the period when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equity interest investment in original subsidiaries is transferred into current investment gains and losses upon lost of control. If the disposal of the equity investment of subsidiary is realized through multi pletran section sunlit loss of control and is a pack age deal. the accounting treatment of the sterna sections should be dealt with as one transaction of disposal of the subsidiary until loss of control. However, before the Company loses total control of the subsidiary, the differences between the actual disposal price and the share of the net assets of the subsidiary disposed of in every transaction should be recognized as other comprehensive income in the consolidated financial statements, and transferred to profit or loss when losing control. 216 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 8. Accounting treatment for joint venture arrangement and joint controlled entity The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As for jointly controlled entity, the Company determines the assets held and liabilities assumed separately as a party to the jointly controlled entity, recognizes such assets and liabilities according to its proportion, and recognizes relevant income and expense separately under relevant agreement or according to its proportion. As for asset transaction relating to purchase and sales with the jointly controlled entity which does not constitute business activity, part of the gains and losses arising from such transaction attributable to other participators of the jointly controlled entity is only recognized. 9.Cash and cash equivalents Cash in the cash flow statement comprises the Group’s cashon hand and deposits that can be readily with drawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group, that are readily convertible to known amounts of cash and which are subject to aninsignificantriskofchanges in value. 10. Foreign currency business and foreign currency financial statement conversion (1) Foreign currency business As for the foreign currency business, the Company converts the foreign currency amount into RMB amount pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance sheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than the disclosure which is made according to capitalization rules for the exchange difference occurred from the special foreign currency borrowings borrowed for constructing and producing the assets satisfying condition of capitalization. As for the foreign currency non- monetary items measured by fair value, the amount is then converted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the conversion difference occurred during the procedure is recorded into prevailing gains and losses directly as change of fair value. As for the foreign currency non-monetary items measured by historical cost, conversion is made with the spot exchange rate as of the business day, with no change in RMB amount. (2) Conversion of foreign currency financial statement Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreign currency balance sheet; as for the items in statement of owners’ equity except for “Retained profit”, conversion is made pursuant to the spot exchange rate of business day; income and expense items in income statement then are also converted pursuant to the spot exchange rate of transaction day. Difference arising from the aforementioned conversions shall be listed separately in items of owners’ equity. Spot exchange rate as of the occurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amount of cash affected by exchange rate movement shall be listed separately in cash flow statement. 11. Financial assets and liabilities A financial asset or liability is recognized when the group becomes a party to a financial instrument contract. The 217 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) financial assets and financial liabilities are measured at fair value on initial recognition. For the financial assets and liabilities measured by fair value and with variation reckoned into current gains/losses, the related transaction expenses are directly included in current gains or losses; for other types of financial assets and liabilities, the related transaction costs are included in the initial recognition amount. (1) Method for determining the fair value of financial assets and financial liabilities Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an active market, the Company uses the quoted prices in the active market to determine its fair value. Quotations in an active market refer to prices that are readily available from exchanges, brokers, industry associations, pricing services, etc., and represent the prices of market transactions that actually occur in an arm's length transaction. If there is no active market for a financial instrument, the Company uses valuation techniques to determine its fair value. Valuation techniques include reference to prices used in recent market transactions by parties familiar with the situation and through voluntary trade, and reference to current fair values of other financial instruments that are substantially identical, discounted cash flow methods, and option pricing models. (2) Category and measurement on financial assets The group divided the financial assets as the follow while initially recognized: the financial assets measured at amortized cost; the financial assets measured at fair value and whose changes are included in other comprehensive income; and the financial assets measured by fair value and with variation reckoned into current gains/losses. The classification of financial assets depends on the business model that the Group's enterprises manage the financial assets and the cash flow characteristics of the financial assets. 1) The financial assets measured at amortized cost Financial assets are classified as financial assets measured at amortized cost when they also meet the following conditions: The group's business model for managing the financial assets is to collect contractual cash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid for the principal and interest based on the outstanding principal amount. For such financial assets, the effective interest method is used for subsequent measurement according to the amortized cost, and the gains or losses arising from amortization or impairment are included in current profits and losses. Such financial assets mainly include monetary funds, notes receivable, accounts receivable, other receivables, debt investment and long-term receivables, and so on. The Group lists the debt investment and long-term receivables due within one year (including one year) from the balance sheet date as non-current assets due within one year, and lists the debt investment with time limit within one year (including one year) when acquired as other current assets. 2) Financial assets measured at fair value and whose changes are included in other comprehensive income Financial assets are classified as financial assets measured at fair value and whose changes are included in other comprehensive income when they also meet the following conditions: The Group's business model for managing the financial assets is targeted at both the collection of contractual cash flows and the sale of financial assets; the 218 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of the principal and the interest based on the outstanding principal amount. For such financial assets, fair value is used for subsequent measurement. The discount or premium is amortized by using the effective interest method and is recognized as interest income or expenses. Except the impairment losses and the exchange differences of foreign currency monetary financial assets are recognized as the current profits and losses, the changes in the fair value of such financial assets are recognized as other comprehensive income until the financial assets are derecognized, the accumulated gains or losses are transferred to the current profits and losses. Interest income related to such financial assets is included in the current profit and loss. Such financial assets are listed as other debt investments, other debt investments due within one year (including one year) from the balance sheet date are listed as non-current assets due within one year; and other debt investments with time limit within one year (including one year) when acquired are listed as other current assets. 3) Financial assets measured at fair value and whose changes are included in current gains/losses Financial assets except for the above-mentioned financial assets measured at amortized cost and financial assets measured at fair value and whose changes are included in other comprehensive income are classified as financial assets measured at fair value and whose changes are included in current profits and losses, which adopt fair value for subsequent measurement and all changes in fair value are included in current profits and losses. The Group classifies non-trading equity instruments as financial assets measured at fair value and whose changes are included in current profits and losses. Such financial assets are presented as trading financial assets, and those expire after more than one year and are expected to be held for more than one year are presented as other non-current financial assets. (3) Devaluation of financial instrument On the basis of expected credit losses, the Group performs impairment treatment on financial assets measured at amortized cost and financial assets measured at fair value and whose changes are included in other comprehensive income and recognize the provisions for loss. Credit loss refers to the difference between all contractual cash flows that the Company discounts at the original actual interest rate and are receivable in accordance with contract and all cash flows expected to be received, that is, the present value of all cash shortages. Among them, for the purchase or source of financial assets that have suffered credit impairment, the Company discounts the financial assets at the actual interest rate adjusted by credit. The Group considers all reasonable and evidenced information, including forward-looking information, based on credit risk characteristics. When assessing the expected credit losses of receivables, they are classified according to the specific credit risk characteristics as follows: 1) For receivables and contractual assets and lease receivables (including significant financing components and not including significant financing components), the Group measures the provisions for loss based on the amount of expected credit losses equivalent to the entire duration. For other receivables, our company measures impairment losses based on whether credit risk has significantly increased since initial recognition. For those that have not 219 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) significantly increased, the amount equivalent to the expected credit loss for the entire duration of the next 12 months is used to measure impairment losses. ①Evaluate expected credit losses based on individual items: notes receivable and financial institution credit receivables (including accepted letters of credit) in accounts receivable, related party payments (related parties and significant impact related parties under the same control); Dividends receivable, interest receivable, reserve funds, investment loans, margin (including warranty), and government subsidies (including dismantling subsidies) in other receivables; Contract assets; Accounts receivable containing significant financing components (i.e. long-term receivables);. ② Evaluating expected credit losses based on customer credit characteristics and aging combinations: In addition to evaluating expected credit losses based on individual items, our company evaluates expected credit losses of notes receivable, accounts receivable, and other receivables financial instruments based on customer credit characteristics and aging combinations. Customer credit characteristics and aging combination: t. The Group considers all reasonable and evidenced information, including forward-looking information, when assessing expected credit losses. When there is objective evidence that its customer credit characteristics and ageing combination cannot reasonably reflect its expected credit loss, the current value of the expected future cash flow is measured by a single item, and the cash flow shortage is directly written down the book balance of the financial asset. 2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial instruments are impaired, such as the loan commitments and financial guarantee contracts that are not measured at fair value through profit or loss, financial assets measured at fair value and whose changes are recognized in other comprehensive income; other financial assets measured at amortized cost (such as other current assets, other non- current financial assets, etc.). (4) Reorganization basis and measure method for transfer of financial assets The financial assets meet one of following requirements will be terminated recognition: ① The contract rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already been transferred, and the Company has transferred almost all risks and remunerations of financial assets ownership to the transferee; ③The financial assets has been transferred, even though the Company has neither transferred nor kept almost all risks and remunerations of financial assets ownership, the Company has given up controlling the financial assets. If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets ownership, nor given up controlling the financial assets, then confirm the relevant financial assets according to how it continues to involve into the transferred financial assets and confirm the relevant liabilities accordingly. The extent of continuing involvement in the transferred financial assets refers to the level of risk arising from the changes in financial assets value faced by the enterprise. If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance between the book value of the transferred financial assets and the sum of consideration received from transfer and 220 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) fluctuation accumulated amount of fair value formerly reckoned in other consolidated income in the current profits and losses. If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book value of the transferred financial assets between the derecognized parts and the parts not yet derecognized according to each relative fair value, and reckon the balance between the sum of consideration received from transfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidated income that should be apportioned to the derecognized parts and the apportioned aforementioned carrying amounts in the current profits and losses. When the Group sells financial assets adopting the mode of recourse, or endorses and transfers its financial assets, it is necessary to ensure whether almost all the risks and rewards of ownership of the financial assets have been transferred. If almost all the risks and rewards of ownership of the financial assets have been transferred to the transferee, the financial assets shall be derecognized; if almost all the risks and rewards of ownership of the financial assets are retained, the financial assets shall not be derecognized; if almost all the risks and rewards of ownership of the financial assets are neither transferred nor retained, continue to judge whether the company retains control over the assets, and conduct accounting treatment according to the principles described in the preceding paragraphs. (5) Category and measurement of financial liability Financial liability is classified into financial liability measured by fair value and with variation reckoned into current gains/losses and other financial liability at initially measurement. Financial liability shall be initially recognized and measured at fair value. As for the financial liability measured by fair value and with variation reckoned into current gains/losses, relevant trading costs are directly reckoned into current gains/losses while other financial liability shall be reckoned into the initial amount recognized. ① the financial liability measured by fair value and with variation reckoned into current gains/losses The conditions to be classified as trading financial liabilities and as financial liabilities designated to be measured at fair value and whose changes are included in current profit or loss at the initial recognition are consistent with the conditions to be classified as trading financial assets and as financial assets designated to be measured at fair value and whose changes are included in current profit or loss at the initial recognition. Financial liabilities measured at fair value and whose changes are included in current profit or loss are subsequently measured at fair value, and the gain or loss arising from changes in fair value and the dividends and interest expense related to these financial liabilities are included in current profit or loss. ② Other financial liability It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link to the equity instruments that are not quoted in an active market and whose fair value cannot be reliably measured, and the subsequent measurement is carried out in accordance with the cost. Other financial liabilities are 221 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) subsequently measured at amortized cost by using the effective interest method. The gain or loss arising from derecognition or amortization is included in current profit or loss. ③Financial guarantee contract The financial guarantee contract of a financial liability which is not designated to be measured at fair value through profit or loss is initially recognized at fair value, and its subsequent measurement is carried out by the higher one between the amount confirmed in accordance with the Accounting Standards for Business Enterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulated amortization amount determined in accordance with the principle of Accounting Standards for Business Enterprises No. 14—Revenue from the initial recognition amount. (6) Termination of recognition of financial liability The financial liability or part of it can only be terminated for recognized when all or part of the current obligation of the financial liability has been discharged. The Group (debtor) and the creditor sign an agreement to replace the existing financial liabilities with new financial liabilities, and if the contract terms of the new financial liabilities are substantially different from the existing financial liabilities, terminated for recognized the existing financial liabilities and at the same time recognize the new financial liabilities. If the financial liability is terminated for recognized in whole or in part, the difference between the carrying amount of the part that terminated for recognized and the consideration paid (including the transferred non-cash assets or the assumed new financial liabilities) is included in current profits and losses. (7) Off-set between the financial assets and liabilities When the Company has a legal right to offset a recognized financial asset and a financial liability and such legal right is currently enforceable, and the Company plans to settle the financial asset on a net basis or to realize the financial asset and settle the financial liability simultaneously, the financial asset and the financial liability are presented in the balance sheet at their respective offsetting amounts. In addition, the financial assets and financial liabilities are presented in the balance sheet separately, and are not offset against each other. (8) Derivatives and embedded derivatives Derivatives are initially measured at fair value on the signing date of the relevant contract, and are subsequently measured at fair value. Except for derivatives that are designated as hedging instruments and are highly effective in hedging, the gains or losses arising from changes in fair value will be determined based on the nature of the hedging relationship in accordance with the requirements of the hedge accounting and be included in the period of profit and loss, other changes in fair value of derivatives are included in current profits and losses. For a hybrid instrument that includes an embedded derivative, if it is not designated as a financial asset or financial liability measured at fair value and whose changes are included in current profit or loss, the embedded derivative does not have a close relationship with the main contract in terms of economic characteristics and risks, and as with embedded derivatives, 222 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) if the tools existing separately conform to the definition of the derivatives, the embedded derivatives are split from the hybrid instruments and are treated as separate derivative financial instruments. If it is not possible to measure the embedded derivative separately at the time of acquisition or subsequent balance sheet date, the whole hybrid instrument is designated as a financial asset or financial liability measured at fair value and whose changes are included in current profits and losses. (9) Equity instrument The equity instrument is the contract to prove the holding of the surplus stock of the assets with the deduction of all liabilities in the Group. The Company issues (including refinancing), repurchases, sells or cancels equity instruments as movement of equity. No fair value change of equity instrument would be recognized by the Company. Transaction costs associated with equity transactions are deducted from equity. The Group's various distributions to equity instrument holders (excluding stock dividends) reduce shareholders' equity. 12. Inventory Inventories of the Company principally include raw materials, stock goods; work in process, self-made semi- finished product, materials consigned to precede, low-value consumption goods, goods in transit, goods in process, mould and contract performance costs. Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted for raw materials, low-value consumption goods and stock goods. Switch-back cost of the current month is adjusted by distribution price difference at the end of the month, the dispatched goods will share the cost differences of inventory while in settlement the business income; and low-value consumption goods is carried forward at once when being applied for use and the mould shall be amortized within one year after receipt. Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value.The provision for inventory depreciation shall be drawn from the difference between the book cost of a single inventory item and its net realizable value, and the provision for inventory depreciation shall be recorded into the current profit and loss. 13. Contract assets (1) Confirmation methods and standards of contract assets Contract assets refer to the right of the Company to receive consideration after transferring goods to customers, and this right depends on factors other than the passage of time. If the Company sells two clearly distinguishable commodities to a customer and has the right to receive payment because one of the commodities has been delivered, but the payment is also dependent on the delivery of the other commodity, the Company shall take the right to receive payment as a contract asset. (2) Determination method and accounting treatment method of expected credit loss of contract assets For the determination method for expected credit loss of contract assets, please refer to the above-mentioned Accounting treatment methods for financial instrument impairment. The Company calculates the expected credit 223 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) loss of contract assets on the balance sheet date, if the expected credit loss is greater than the book value of provision for impairment of contract assets, the Company shall recognize the difference as an impairment loss, debiting the "asset impairment loss" and crediting the "contract asset impairment provision". On the contrary, the Company shall recognize the difference as an impairment gain and keep the opposite accounting records. If the Company actually incurs credit losses and determines that the relevant contract assets cannot be recovered, for those approved to be written off, debit the "contract asset impairment reserve" and credit the "contracted asset" based on the approved write-off amount. If the written-off amount is greater than the provision for loss that has been withdrawn, the "asset impairment loss" is debited based on the difference. 14. Contract cost (1) The method of determining the amount of assets related to the contract cost The Company’s assets related to contract costs include contract performance cost and contract acquisition cost. The contract performance cost is the cost incurred by the Company for the performance of the contract, those that do not fall within the scope of other accounting standards and meet the following conditions at the same time are recognized as as an asset as the contract performance cost: the cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses (or similar expenses), costs clarified to be borne by the customer, and other costs incurred solely due to the contract; this cost increases the Company's future resources for fulfilling the contract's performance obligations; this cost is expected to be recovered. Contract acquisition cost is the incremental cost incurred by the Company to obtain the contract, those that are expected to be recovered are recognized as the contract acquisition cost as an asset; if the asset amortization period does not exceed one year, it shall be included in the current profit and loss when it occurs. Incremental cost refers to the cost (such as sales commission, etc.) that will not incur if the Company doesn’t obtain the contract. The Company’s expenses (such as travel expenses incurred regardless of whether the contract is obtained) incurred for obtaining the contract other than the incremental costs expected to be recovered are included in the current profits and losses when they are incurred, except those are clarified to be borne by the customer. (2) Amortization of assets related to contract costs The Company’s assets related to contract costs are amortized on the same basis as the recognition of commodity income related to the asset and included in the current profit and loss. (3) Impairment of assets related to contract costs When the Company determines the impairment loss of assets related to the contract cost, it first determines the impairment loss of other assets related to the contract that are confirmed in accordance with other relevant accounting standards for business enterprises; then based on the difference between the book value of which is higher than the remaining consideration that the Company is expected to obtain due to the transfer of the commodity related to the asset and the estimated cost of transferring the related commodity, the excess shall be provided for impairment and recognized as an asset impairment loss. If the depreciation factors of the previous period changed later, causing the aforementioned difference to be 224 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) higher than the book value of the asset, the original provision for asset impairment shall be reversed and included in the current profit and loss, but the book value of the asset after the reversal shall not exceed the book value of the asset on the reversal date under the assumption that no impairment provision is made. 15.Long-term equity investment Long-term equity investment of the Company is mainly about investment in subsidiary, investment in associates and investment in joint-ventures. For long-term equity investments acquired through business combination under common control, the initial investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of the combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-term equity investment shall be zero. For long-term equity investment acquired through business combination not under common control, the initial investment cost shall be the combination cost. Excluding the long-term equity investment acquired through business combination, there is also a king of long-term equity investment acquired through cash payment, for which the actual payment for the purchase shall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair value of issuing equity investment shall be investment cost; for Long-term equity investments which are invested by investors, the agreed price in investment contract or agreement shall be investment cost; and for long-term equity investment which is acquired through debt reorganization and non-monetary assets exchange, regulations of relevant accounting standards shall be referred to for confirming investment cost. The Company adopts cost method for investment in subsidiaries, makes calculation for investments in joint- ventures and associates by equity method. When calculated by cost method, long-term equity investment is priced according to its investment cost, and cost of the investment is adjusted when making additional investment or writing off investment; When calculated by equity method, current investment gains and losses represent the proportion of the net gains and losses realized by the invested unit in current year attributable to or undertaken by the investor. When the Company is believed to enjoy proportion of net gains and losses of invested unit, gains and losses attributable to the Company according to its shareholding ratio is to computer out according to the accounting policy and accounting period of the Company, on the basis of the fair value of various recognizable assets of the invested unit as at the date of obtaining of the investment, after offset of gains and losses arising from internal transactions with associates and joint-ventures, and finally to make confirmation after adjustment of net profit of the invested unit. Confirmation on gains and losses from the long-term equity investment in associates and joint-ventures held by the Company prior to the first execution day, could only stand up with the precedent condition that debit balance of equity investment straightly amortized according to its original remaining term has already been deducted, if the aforementioned balance relating to the investment do exist. 225 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) In case that investor loses joint control or significant influence over investee due to disposal of part equity interest investment, the remaining equity interest shall be calculated according to Accounting Standards for Business Enterprise No.22-Recognition and Measurement of Financial Instrument. Difference between the fair value of the remaining equity interest as of the date when loss of joint control or significant influence and the carrying value is included in current gains and losses. Other comprehensive income recognized in respect of the original equity interest investment under equity method should be treated according to the same basis which the investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equity method calculation; and also switches to cost method for calculating the long-term equity investments which entitles the Company to have conduct control over the invested units due to its additional investments; and switches to equity method for calculating the long-term equity investments which entitles the Company to conduct common control or significant influence, while no control over the invested units due to its additional investments, or the long-term equity investments which entitles the Company with no control over the invested units any longer while with common control or significant influence. When disposing long-term equity investment, the balance between it carrying value and effective price for obtaining shall be recorded into current investment income. When disposing long-term equity investment which is calculated by equity method, the proportion originally recorded in owners’ equity shall be transferred to current investment income according to relevant ratio, except for that other movements of owners’ equity excluding net gains and losses of the invested units shall be recorded into owners’ equity 16. Investment real estate The investment real estate of the Company includes leased houses and buildings, and is accounted value by its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is formed with all necessary expenditures occurred before construction completion of the assets arriving at the estimated utilization state. Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided with average service life method pursuant to the predicted service life and net rate of salvage value. The predicted service life and net rate of salvage value and annual depreciation are listed as follows: Predicted rate of salvage Depreciation rate per Category Depreciation term(Year) value (%) annual (%) House and buildings 30-40 years 4%-5% 2.375%-3.20% When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or additional capital, the fixed assets or intangible assets shall switch to investment real estate commencing from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as the credit value after the switch. 226 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) When investment real estate is disposed, or out of utilization forever and no economic benefit would be predicted to obtain through the disposal, the Company shall terminate recognition of such investment real estate. The amount of income from disposal, transfer, discarding as scrap or damage of investment real estate after deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses. 17.Fixed assets Fixed assets of the Company are tangible assets that are also held for the production of goods, provision of services, rental or management of operations, have a useful life of more than one year and have a unit value of more than 2,000 yuan. Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of purchased- in fixed assets include bidding price and import duty and relevant taxes, and other expenditure which occurs before the fixed assets arrive at the state of predicted utilization and which could be directly attributable to the assets; while cost of self-built fixed asset is formed with all necessary expenditures occurred before construction completion of the assets arriving at the estimated utilization state; credit value of the fixed assets injected by investors is determined based on the agreed value of investment contracts or agreements, while as for the agreed value of investment contracts or agreements which is not fair, it shall take its fair value as credit value; and for fixed assets which are leased in through finance leasing, credit value is the lower of fair value of leased assets and present value of minimized leasing payment as at the commencing date of leasing. Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset cost; and for the part which is replaced, recognization of its carrying value shall cease; for those not meeting requirements for recognization of fixed assets, they shall be accounted in current gains and losses as long as they occur. When fixed asset is disposed, or no economic benefit would be predicted to obtain through utilization or disposal of the asset, the Company shall terminate recognization of such fixed asset. The amount of income from disposal, transfer, discarding as scrap or damage of fixed asset after deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses. The Company withdraws depreciation for all fixed assets except for those which have been fully depreciated while continuing to use. It adopts average service life method for withdrawing depreciation which is treated respectively as cost or current expense of relevant assets according to purpose of use. The depreciation term, predicted rate of salvage value and depreciation rate applied to fixed assets of the Company are as follows: Predicted rate of salvage Depreciation rate per No. Category Depreciation term value year 1 House and buildings 30-40 years 4%-5% 2.375%-3.20% 2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60% 227 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Predicted rate of salvage Depreciation rate per No. Category Depreciation term value year 3 Transport equipment 5-12 years 4%-5% 7.92%-19.20% 4 Other equipment 8-12 years 4%-5% 7.92%-12.00% End of each year, the Company makes re-examination on predicted service life, predicted rate of salvage value and depreciation method at each year-end. Any change will be treated as accounting estimation change. 18. Construction in progress On the day when the construction in progress reaches the expected usable state, it will be carried forward to fixed assets according to the estimated value based on the construction budget, cost or actual construction cost, and depreciation will be accrued from the next month, and the difference in the original value of fixed assets shall be adjusted after the completion of the final accounting procedures. 19. Borrowing expense For the incurred borrowing expense that can be directly attributable to fixed assets, investment real estate, and inventory which require more than one year of purchase, construction or production activities to reach the intended usable or saleable state, the capitalization begins when the asset expenditure has occurred, the borrowing expense have occurred, and the acquisition, construction or production activities necessary to make the asset reach the intended usable or saleable state have begun; when the acquisition, construction or production of assets that meet the capitalization conditions reaches the intended usable or saleable state, stop the capitalization, the borrowing expense incurred thereafter are included in the current profit and loss. If an asset that meets the capitalization conditions is abnormally interrupted during the acquisition, construction or production process, and the interruption lasts for more than 3 months, the capitalization of borrowing expense shall be suspended until the acquisition, construction or production activities of the asset restart. Capitalization shall be exercised for interest expense actually occurred from special borrowings in current period after deduction of the interest income arising from unutilized borrowing capital which is saved in banks or deduction of investment income obtained from temporary investment; For recognization of capitalized amount of common borrowing, it equals to the weighted average of the assets whose accumulated expense or capital disburse is more than common borrowing times capitalization rate of occupied common borrowing. Capitalization rate is determined according to weighted average interest rate of common borrowing. 20. Right-of-use assets Upon becoming a lessee under a lease contract, the Company is entitled to receive substantially all of the economic benefits, arising from the use of the identified assets during the period of use and is entitled to recognized the right- of-use assets at the sum of the present value of the lease liability, prepaid rent and initial direct costs, and to recognized the depreciation and interest expenses respectively, when the use of the identified assets dominates during that period of use. 228 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) When the Company becomes the lessee of a lease contract, for short-term leases of less than one year without a purchase option and leases with a value of less than 40000 yuan (excluding sublease or expected sublease assets), the Company elects to follow simplified treatment and record the related assets at cost or current gain/loss on a straight-line basis over the lease period. 21. Intangible assets (1) Valuation method, service life and impairment test The Company’s intangible assets include land use rights, trademark rights and non-proprietary technology, which are measured at actual cost at the time of acquisition, of which, acquired intangible assets are stated at actual cost based on the price actually paid and related other expenditure; the actual cost of an intangible asset invested by an investor is determined at the value agreed in the investment contract or agreement, except where the agreed value in the contract or agreement is not fair, in which case the actual cost is determined at fair value. The Company analyzes and judges the service life of intangible assets when acquiring them. Intangible assets with definite service life, such as land use rights, are amortized by the straight-line method during the service life from the time when the intangible assets are available for use until they are no longer recognized as intangible assets. Other intangible assets shall be amortized according to the service life stipulated in the contract or law. Intangible assets with uncertain service life shall not be amortized. Intangible assets developed by the Company shall be generally amortized on an average of 3-5 years according to the benefit period of the results of the project recognized in advance. The service life and amortization method of intangible assets with limited service life shall be reviewed at the end of the year. If the estimated service life and amortization method of intangible assets are different from those previously estimated, the amortization period and amortization method shall be changed. The service life of intangible assets with uncertain service life shall be rechecked. If there is evidence that their service life is limited, estimate their service life and treat them as intangible assets with limited service life. If there is any change after the recheck, it will be regarded as the change of accounting estimate. (2) Collection scope of R&D expenditure and related accounting treatment methods The Company's R&D expenditure is directly related to the Company's R&D activities, including R&D staff salaries, direct input expenses, depreciation expenses and other expenses. The R&D expenditure of the Company is divided into research stage expenditure and development stage expenditure according to its nature and whether there is great uncertainty in the final formation of intangible assets from R&D activities. Research stage expenditure is included in the current profits and losses when it occurs; Development stage expenditure is recognized as intangible assets if it meets the following conditions at the same time: (1) It is technically feasible to complete the intangible assets so that they can be used or sold; (2) It has the intention to complete the intangible assets and use or sell them; (3) The products produced by using the intangible assets exist in the market or the intangible assets themselves exist in the market; (4) It has sufficient technical, financial and other resources to support the development of the intangible assets, and has the ability to use or sell 229 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) the intangible assets; (5) Expenditure attributable to the development stage of the intangible assets can be reliably measured. -Expenditure attributable to development of the intangible assets could be reliable measured. Expenditure arising during development not satisfying the above conditions shall be recorded in current gains and losses upon occurrence. Development expenditure which had been recorded in gains and losses in previous period would not be recognized as assets in later period. Expenditure arising during development phase which has been starting capitalization is listed in balance sheet as development expenditure, and transferred to intangible assets since the project reaches at predicted utilization state. 22. Impairment of long-term assets As at each balance sheet date, the Company has inspection on fixed assets, construction in process and intangible assets with limited service life. When the following indications appear, assets may be impaired, and the Company would have impairment test. As for goodwill and intangible assets which have uncertain service life, no matter there is impairment or not, impairment test shall be conducted at the end of every year. If it is hard to make test on recoverable amount of single asset, test is expected to make on the basis of the assets group or assets group portfolio where such asset belongs to. Indications for impairment are as follows: (1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the predicted drop due to move-on of times or normal utilization; (2) Economy, technology or law environment where enterprise operates or market where asset is located will have significant change in current or recent periods, which brings negative influence to enterprise; (3) Market interest rate or returning rate of other market investments have risen in current period, which brings influence in calculating discount rate of present value of predicted future cash flow of assets, which leads to a great drop in recoverable amount of such assets; (4) Evidence proving that asset is obsolete and out of time or its entity has been damaged; (5) Asset has been or will be keep aside, terminating utilization or disposed advance; (6) Internal report of enterprise shows that economic performance of asset has been or will be lower than prediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatly lower (or higher) than the predicted amount; (7) Other indications showing possible impairment of assets After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance is recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, it couldn’t be switched back in later accounting periods. Recoverable amount of assets refers to the higher of fair value of assets net disposal expense and present value of predicted cash flow of the asset. 23. Contract liability Contract liabilities reflect the Company's obligation to transfer goods to customers for consideration received or receivable from customers. Before the Company transfers the goods to the customer, if the customer has paid the 230 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) contract consideration or the Company has obtained the right to unconditionally receive the contract consideration, the contract liability is recognized based on the received or receivable amount at the earlier time point of the actual payment by the customer and the payment due. 24. Goodwill Goodwill represents balance between equity investment cost or business combination cost under no common control exceeding the attributable part or fair value of recognizable net assets of party invested or purchased (obtained through business combination) as of acquisition day or purchase day. Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill relating to associates and joint-ventures is included in carrying value of long-term equity investment. 25.Long-term deferred expenses The company's long-term deferred expenses refer to the expenses that have been paid, but should be borne by the current period and future periods with an amortization period of more than one year (excluding one year), and these expenses are amortized evenly during the benefit period. If the long-term deferred expense item cannot benefit the future accounting period, all the amortized value of the item that has not been amortized will be transferred into the current profit and loss. 26. Staff remuneration Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered by employees or compensation to the termination of employment relationship such as short-term wages, post- employment benefits, compensation for the termination of employment relationship and other long-term employee welfare. Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund, labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing scheme, and non-monetary benefits as well as other short-term remuneration. During the accounting period when staff provides services, the short-term remuneration actually occurred is recognized as liabilities and shall be included in current gains and losses or related asset costs according to the beneficial items. Retirement benefits mainly consist of basic pension insurance, unemployment insurance and early-retirement benefits, etc. retirement benefit scheme represents the agreement reached by the Company and its employees in respect of retirement benefits, or the rules or regulations established by the Company for providing retirement benefits to employees. In particular, defined contribution plan means a retirement benefit plan, pursuant to which, the Company makes fixed contribution to independent fund, upon which, and it is not obliged to make further 231 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) payment. Defined benefit plan refers to retirement benefit scheme other than defined contribution plan. The early retirement policy for staff and workers of the Company is the compensation for encouraging staff and workers to accept the reduction voluntarily. The employees make applications voluntarily, the two parties sign the compensation agreement after approved by the Company and calculate the compensation amount according to the compensation standard passed by the staff representative conference, and the Company confirms it as dismiss welfare and reckons it in current profits and losses. As the Company promises to adjust the treatment for early retiring staff and workers with the increase of social basic cost of living allowances, the discount elements will not be considered for calculating the dismiss welfare. 27.Lease liability Upon becoming a lessee under a lease contract, the Company recognizes a lease liability for the leased-in asset at the present value of the unpaid lease payments, net of lease incentives (except for short-term leases and leases of low-value assets for which simplified treatment is elected), when it is entitled to receive substantially all of the economic benefits arising from the use of the identified asset during the period of use and is entitled to dominate the use of the identified asset during that period of use. 28.Accrual liability If the business in connection with such contingencies as a security involving a foreign party, commercial acceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of the following conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existing obligation of the Company; performance of the obligation is likely to cause economic benefits to flow out of the enterprise; the amount of the obligation is reliably measurable. 29. Special reserve The work safety expense extracted according to the regulations will be included in the cost of related products or the current profit and loss, and also included in the special reserve; When used, it will be treated separately according to whether fixed assets are formed or not: if it is an expense expenditure, the special reserve will be directly offset; If the fixed assets are formed, the expenses incurred shall be collected, and the fixed assets shall be confirmed when the predetermined usable state is reached, and at the same time, the equivalent special reserve shall be offset and the equivalent accumulated depreciation shall be confirmed. 30. Revenue The Company’s sales revenue is mainly comprised of revenue from sale of goods, labor providing income and revenue from assignment of asset use rights. The Company has fulfilled the performance obligations in the contract, that is, revenue is recognized when the customer obtains control of the relevant goods or services. If the contract contains two or more performance obligations, the Company will allocate the transaction price to each individual performance obligation according to the relative proportion of the stand-alone selling price of the 232 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) goods or services promised by each individual performance obligation on the date of the contract. The revenue is measured according to the transaction price of each individual performance obligation. The transaction price is the amount of consideration that the Company expects to be entitled to receive due to the transfer of goods or services to customers, excluding payments on behalf of third parties. The transaction price confirmed by the Company does not exceed the amount at which the cumulatively recognized revenue will most likely not to undergo a significant switch back when the relevant uncertainty is eliminated. The money expected to be returned to the customer will be regarded as a return liability and not included in the transaction price. If there is a significant financing component in the contract, the Company shall determine the transaction price based on the amount payable on the assumption that the customer pays in cash when obtaining the control of the goods or services. The difference between the transaction price and the contract consideration shall be amortized by the effective interest method during the contract period. On the starting date of the contract, if the Company expects that the interval between the customer's acquisition of control of the goods or services and the customer's payment of the price doesn’t exceed one year, the significant financing components in the contract shall be ruled out. When meeting one of the following conditions, the Company is to perform its performance obligations within a certain period of time, otherwise, it is to perform its performance obligations at a certain point in time: 1) The customer obtains and consumes the economic benefits brought by the Company's performance at the same time as the Company's performance; 2) Customers can control the products under construction during the performance of the Company; 3) The goods produced by the Company during the performance of the contract have irreplaceable uses, and the Company has the right to collect payment for the accumulated performance part of the contract during the entire contract period. For performance obligations performed within a certain period of time, the Company recognizes revenue in accordance with the performance progress during that period and determine the progress of performance in accordance with the output method. When the performance progress cannot be reasonably determined, if the cost incurred by the Company is expected to be compensated, the revenue shall be recognized according to the amount of the cost incurred until the performance progress can be reasonably determined. For performance obligations performed at a certain point in time, the Company recognizes revenue at the point when the customer obtains control of the relevant goods or services. When judging whether a customer has obtained control of goods or services, the Company will consider the following signs: 1) The Company has the current right to collect payment for the goods or services; 2) The Company has transferred the goods in kind to the customer; 3) The Company has physically transferred the goods to the customer; 233 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 4) The Company has transferred the principal risks and rewards of ownership of the goods to the customer; 5) The customer has accepted the goods or services, etc. 31. Government subsidy Government subsidy of the Company include project grants, financial subsidies and job stabilization subsidies. Of which, asset-related government subsidy are government subsidy acquired by the Company for the acquisition or other formation of long-term assets; government subsidy related to revenue are government subsidy other than those related to assets. If the government document does not clearly specify the subsidy object, the Company will judge according to the above-mentioned distinguishing principle. If it is difficult to distinguish, it will be overall classified as a government subsidy related to income. If government subsidies are monetary assets, they are measured according to the amount actually received. For subsidies paid on the basis of a fixed quota standard, when there is conclusive evidence at the end of the year that it can meet the relevant conditions stipulated by the financial support policy and is expected to receive financial support funds, they are measured according to the amount receivable. If the government subsidy is a non-monetary asset, it shall be measured at its fair value, when the fair value cannot be obtained reliably, it shall be measured at its nominal amount (1 yuan). Government subsidies related to assets are recognized as deferred income. Asset-related government subsidies that are recognized as deferred income are included in the current profit and loss in installments according to the average life method during the useful life of the relevant assets. If the relevant asset is sold, transferred, scrapped or damaged before the end of its useful life, the undistributed deferred income balance shall be transferred to the current profit and loss of asset disposal. 32. Deferred Income Tax Assets and Deferred Income Tax Liabilities A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference) between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be recognized for the carry forward of unused deductible losses that it is probable that future taxable profits will be available against which the deductible losses can be utilized. For temporary difference arising from initial recognition of goodwill, no corresponding deferred income tax liabilities will be recognized. For temporary difference arising from initial recognition of assets and liabilities occurred in the transaction related to non-business combination which neither affect accounting profit nor taxable income (or deductible losses), no corresponding deferred income tax assets and deferred income tax liabilities will be recognized. As of the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the effective tax rate applicable to the period when recovery of assets or settlement of liabilities occur. The Company recognizes deferred income tax assets to the extent of future taxable income tax which is likely to be obtained to offset deductible temporary difference, deductible losses and tax credits. For the confirmed deferred 234 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) income tax assets. 33.Lease When the Company becomes the lessee of the lease contract, has the right to obtain almost all the economic benefits arising from the use of the identified assets during the period of use, and has the right to lead the use of the identified assets during the period of use, the present value of unpaid lease payments of the lease assets after deducting lease incentives (except for short-term leases and leases of low-value assets for which simplified treatment is selected) is recognized as a lease liability, and a right-of-use asset is recognized based on the sum of the present value of the lease liability, prepaid rent, and initial direct costs, and depreciation and interest expenses are recognized separately. When the Company becomes the lessee of a lease contract, for short-term leases of less than one year without a purchase option and leases with a value of less than 40,000 yuan (excluding sublease or expected sublease assets), the Company elects to follow simplified treatment and record the related assets at cost or current gain/loss on a straight-line basis over the lease period. When the Company becomes the lessor of a lease contract, it classifies the lease into an operating lease and a finance lease at the lease commencement date. A finance lease is a lease that transfers substantially all the risks and rewards associated with the ownership of an asset. Operating leases are leases other than finance leases. Rentals under operating leases are recognized as income on a straight-line basis over the lease term. Finance leases are recorded at the net lease investment value of the finance lease receivable, which is the sum of the unguaranteed residual value and the present value of the lease receipts not yet received as of the commencement date of the lease term. There are both leasing and non-leasing businesses in the contract and can be split, and the leasing business is financially accounted according to the lease standards. There are both leasing and non-leasing businesses in the contract and cannot be split, and the entire contract is included in the lease business for financial accounting according to the lease standards. The lease change needs to be judged whether it can be recognized as a single leasing business, and it needs to be recognized separately if it meets the recognition conditions of a single lease; if it does not meet the recognition of a single leasing business, or there is a major event or change within the controllable range of the lessee, re-evaluate and measure the present value of lease liabilities, and adjust the book value of the right-of-use asset accordingly. If the book value of the right-of-use asset has been reduced to zero, but the lease liability still needs to be further reduced, the lessee shall include the remaining amount in the corresponding expenses for the current period. When the Company becomes the lessor of a lease contract, the lease is divided into operating lease and finance lease on the start date of lease. A finance lease is a lease that transfers substantially all the risks and rewards associated with ownership of an asset. An operating lease refers to a lease other than finance leases. The rent of an operating lease is recognized as income on a straight-line basis during the lease term. For an finance lease, the net investment in the lease is regarded as the entry value of the finance lease receivables, and the net investment in the lease is the sum of the unguaranteed residual value and the present value of the lease receipts that have not been received on the start date of the lease term. 235 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 34. Income tax accounting The Company accounted the income tax in a method of debit in balance sheet. The income tax expenses include income tax in the current year and deferred income tax. The income tax associated with the events and transactions directly included in the owners’ equity shall be included in the owners’ equity; and the deferred income tax derived from business combination shall be included in the carrying amount of goodwill, except for that above, the income tax expense shall be included in the profit or loss in the current period. The income tax expense in the current year refers to the tax payable, which is calculated according tothe tax laws on the events and transactions incurred in the current period. The deferred income tax refersto the difference between the carrying amount and the deferred tax assets and deferred tax liabilities at Current Year-end recognized in the method of debit in the balance sheet. 35. Segment information Business segment was the major reporting form of the Company, which divided into four parts: air- conditioning, refrigerator & freezer& washing machine, small home appliance and others. The transfer price among the segments will recognize based on the market price, common costs will allocated by income proportion between segments except for the parts that without reasonable allocation. 36. Explanation on significant accounting estimation The management of the Company needs to apply estimation and assumption when preparing financial statement which will affect the application of accounting policy and amounts of assets, liabilities, income and expense. The actual condition may differ from the estimation. Constant evaluation is conducted by the management in respect of the key assumption involved in the estimation and judgment of uncertainties. Effect resulting from change of accounting estimation is recognized in the period the change occurs and future periods. The following accounting estimation and key assumption may result in material adjustment to the book value of assets and liabilities in future period. (1) Inventory impairment provision The Company's provision for impairment of inventories on the balance sheet date is the part of the net realizable value lower than the cost of inventories. The net realizable value of the inventory of goods that are directly used for sale, such as the goods in stock, the goods sent out, and the materials for sale, and the low-consumption goods, shall be determined by the amount of the estimated selling price of the inventory minus the estimated selling expenses and relevant taxes. The net realizable value of the material inventory held for production is determined by the amount of the estimated selling price of the finished product produced minus the estimated cost to be incurred at the time of completion, the estimated selling expenses and relevant taxes. 236 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (2) Accounting estimation on long-term assets impairment provision The Company makes impairment test on fixed assets such as buildings, machine and equipment which have impairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverable amount of relevant assets and assets group shall be the present value of the projected future cash flow which shall be calculated with accounting estimation. If the management amends the gross profit margin and discount rate adopted in calculation of future cash flow of assets and assets group and the amended gross profit margin is lower than the currently adopted one or the amended discount rate is higher than the currently adopted one, the Company needs to increase provision of impairment provision. If the actual gross profit margin is higher (or the discount rate is lower) than the estimation of management, the Company can not transfer back the long term assets impairment provision provided already. (3) Accounting estimation on realization of deferred income tax assets Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate for each future year. Realization of deferred income tax assets depends on whether a company is able to obtain sufficient taxable income in future. Change of future tax rate and switch back of temporary difference could affect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimation may result in material adjustment to deferred income tax. (4) Usable term and residual value rate of fixed assets and intangible assets The Company, at least at the end of each accounting year, reviews the projected usable life and residual value rate of fixed assets and intangible assets. The projected usable life and residual value rate are determined by the management based on the historical experiences of similar assets by reference to the estimation generally used by the same industry with consideration on projected technical upgrade. If material change occurs to previous estimation, the Company shall accordingly adjust the depreciation expenses and amortization expenses for future period. 37. Other comprehensive income Other comprehensive income represents various gains and losses not recognized in current gains and losses according to other accounting rules. Other comprehensive income items shall be reported in the following two classes under other relevant accounting rules: (1)Other comprehensive income items that can not be reclassified into gains and losses in future accounting periods, mainly including changes arising from re-measurement of net liabilities or net assets under defined benefit plan and interest in investee’s other comprehensive income which are measured under equity method and which can not be reclassified into gains and losses in future accounting periods; (2) Other comprehensive income items that will be reclassified into gains and losses in future accounting periods 237 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) upon satisfaction of required conditions, mainly includes the share of other comprehensive income that is reclassified into profit and loss when the investee’s subsequent accounting periods are accounted for in accordance with the equity method and meet the specified conditions, the fair value changes occurred by the debt investment that is measured at fair value and whose changes are included in other comprehensive income, the difference between the original book value included in other comprehensive income and the fair value when a financial asset measured at amortized cost is reclassified as a financial asset measured at fair value and its changes are included in other comprehensive income, the loss provisions for financial assets measured at fair value and whose changes are included in other comprehensive income, the gains or losses generated from cash flow hedging instruments are part of effective hedging, and the differences in conversion of foreign currency financial statements. 38. Change of significant accounting policies and accounting estimates (1) Change of significant accounting policy Contents and reasons of changes in accounting policies Remark On November 30, 2022, the Ministry of Finance issued the Interpretation No.16 of Accounting Standards for Business Enterprises, which stipulated that Relevant accounting policy changes have "Deferred income tax related to assets and liabilities arising from a single been approved at the 32nd meeting of the transaction is not applicable to the accounting treatment of initial recognition 10th Board of Directors of the Company exemption". The names and amounts of the report items that are significantly affected are as follows: Consolidated statement Parent company statement 2022-12-31 2022-12-31 Affected items Adjustment 2023-1-1 Adjustment 2023-1-1 (before (before amount (after change) amount (after change) change) change) Deferred income 156,630,537.43 4,935,157.87 161,565,695.30 125,037,558.04 2,683,181.79 127,720,739.83 tax assets Deferred income 12,750,747.30 4,758,755.78 17,509,503.08 8,642,999.01 2,510,986.84 11,153,985.85 tax liabilities Surplus public 441,201,471.98 17,219.50 441,218,691.48 440,983,306.30 17,219.50 441,000,525.80 Undistributed 1,064,136,866.9 1,064,291,842.4 909,082,037.66 167,328.13 909,249,365.79 154,975.45 profit 8 3 Minority equity 370,748,395.26 -8,145.54 370,740,249.72 (2) Change of significant accounting estimates: N/A IV. Taxation 1. Major taxes and tax rates Tax (expenses) Tax (expenses) base Tax (expenses) rate VAT Income from sales of goods and from processing 13%,9%,6%,5%,3% Urban maintenance and Turnover tax 5% or7% 238 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Tax (expenses) Tax (expenses) base Tax (expenses) rate construction tax Education surcharge Turnover tax 3% Local education Turnover tax 2% surcharge Corporate income tax Taxable income 15%,20%,22%,29%,30% Original Book value of house property×(1-30%)or House Property Tax 1.2% or 12% annual rent income Land use tax Actual land area used 1 yuan/M2 tto 15yuan/M2 Description of taxpayers with different corporate income tax rates: Name Income tax rate Changhong Meiling Co., Ltd. 15% Zhongke Meiling Cryogenic Technology Co., Ltd. 15% Zhongshan Changhong Electric Co., Ltd. 15% Sichuan Hongmei Intelligent Technology Co., Ltd. 15% Mianyang Meiling Refrigeration Co., Ltd. 15% Changhong Meiling Ridian Technology Co., Ltd. 15% Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. 15% Hefei Meiling Nonferrous Metal Products Co., Ltd. 15% Jiangxi Meiling Electric Appliance Co., Ltd. 15% Sichuan Changhong Air-conditioner Co., Ltd. 15% Hebei Hongmao Daily Appliance Technology Co., Ltd. 20% Anhui Tuoxing Technology Co., Ltd. 20% Guangzhou Changhong Trading Co., Ltd. 20% Anhui Ling'an Medical Equipment Co., Ltd 20% Hefei Meiling Wulian Technology Co., Ltd 15% Hefei Changhong Meiling Life appliance Co., Ltd. 15% CH-Meiling International (Philippines) Inc. 30% Changhong Ruba Trading Company (Private) Limited 29% CHANGHONG MEILING ELECTRIC INDONESIA,PT 22% 2. Preferential tax (1)On August 17, 2020, the company obtained the high-tech enterprise certificate numbered GR202034000222 approved by the Anhui Provincial Department of Science and Technology, Anhui Provincial Department of Finance, and Anhui Provincial Taxation Bureau of the State Administration of Taxation, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term. On November 30, 2023, the Company obtained the certificate of high-tech enterprise with the number GR2020340006385 through the identification of high-tech enterprises, and 239 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) continued to enjoy the income tax rate of 15% of national high-tech enterprises, valid for three years. (2) On August 17, 2020, the subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd. obtained the high-tech enterprise certificate numbered GR202034000072 approved by the Anhui Provincial Department of Science and Technology, Anhui Provincial Department of Finance, and Anhui Provincial Taxation Bureau of the State Administration of Taxation, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term. On October 16, 2023, it obtained the certificate of high-tech enterprise with the number GR202334003036 approved by the Department of Science and Technology of Anhui Province, Anhui Provincial Department of Finance and the Anhui Provincial Taxation Service, State Taxation Administration, and continued to enjoy the enterprise income tax rate of 15% of the national high-tech enterprises, valid for three years. (3) On December 9, 2020, the subsidiary Zhongshan Changhong Electric Co., Ltd., was included in the “Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Recognized in Guangdong Province in 2020'' published by the Office of the National High-tech Enterprise Certification Management Leading Group, and continues to enjoy 15% rate for the income tax for State Hi-Tech Enterprise for three years term. Enjoy a 15% income tax rate for national high-tech enterprises, valid for three years. On December 28, 2023, we obtained the high-tech enterprise certificate with certificate number GR202344012950 approved by the Guangdong Provincial Department of Science and Technology, Guangdong Provincial Department of Finance, and Guangdong Provincial Taxation Bureau of the State Administration of Taxation. We will continue to enjoy a 15% corporate income tax rate for national high-tech enterprises, with a validity period of three years. (4) Subsidiary Mianyang Meiling Refrigeration Co., Ltd., belongs to the encouraged industry in the Industrial Structure Adjustment Guidance Catalog and enjoys the preferential taxation policy of corporate income tax for the Western Development, and the corporate income tax is levied at a reduced tax rate of 15%, valid until December 31, 2030. (5) The subsidiary Guangdong Changhong Meiling Ridian Technology Co., Ltd. has passed the qualification of high-tech enterprise certification on 22 December 2022, and enjoys 15% rate for the income tax for State Hi- Tech Enterprise for three years term. (6) The subsidiary Hong Yuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. has passed the qualification of high-tech enterprise certification on 22 December 2022, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term. (7) The subsidiary Hefei Meiling Nonferrous Metal Products Co., Ltd. has passed the qualification of high-tech enterprise certification on 18 September 2021, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term. (8) The subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. has passed the qualification of high-tech enterprise certification on 4 November 2022, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term. (9) The subsidiary Sichuan Changhong Air-conditioner Co., Ltd., has passed the qualification of high-tech 240 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) enterprise certification on 29 November 2022, and enjoys 15% income tax rate for national payroll technology enterprise for three years term. (10) The subsidiary Anhui Tuoxing Technology Co., Ltd., Anhui Ling’an Medical Equipment Co., Ltd., Hefei Meiling Wulian Technology Co., Ltd., Guangzhou Changhong Trading Co., Ltd. are in compliance with the relevant standards for small and medium-sized enterprises with meager profits in the “Notice on matters related to the implementation of preferential income tax policy to support the development of small & medium-size enterprise and individual entrepreneurs” (Guoshui [2021] No. 8) and “Notice on Further Implementation of Preferential Income Tax Policies for Small & Micro Enterprises (No.: 6 of 2023)” of the Ministry of Finance and the State Administration of Taxation, and temporarily implements below policies: the part of annual taxable income that does not exceed one million yuan is included in taxable income by 25% after a reduction, and corporate income tax is paid at a tax rate of 20%, valid until December 31, 2024; while the part of annual taxable income exceeds one million yuan but not exceeding three million yuan is included in taxable income by 25% after a reduction, and corporate income tax is paid at a tax rate of 20%, which is valid until December 31, 2024. (11) The subsidiary Hebei Meiling Wulian Technology Co., Ltd. has passed the qualification of high-tech enterprise certification on 18 September 2021, and enjoys 15% income tax rate for national payroll technology eenterprises for three years term. (12) The subsidiary Hebei Changhong Meiling Life Appliance Co., Ltd. has passed the qualification of high- tech enterprise certification on 18 November 2022, and enjoys 15% income tax rate for national payroll technology eenterprise for three years term. V. Notes to the major items in th e consolida ted financia l statemen ts With respect to the financial statements figures disclosed below, unless otherwise specified, “year-beginning” refers to Jan. 1, 2023; “year-end” refers to Dec. 31, 2023; “Current Year” refers to Jan. 1 to Dec. 31, 2023; “the last year” refers to Jan. 1 to Dec. 31, 2022; the currency is RMB. 1. Monetary fund Item Ending balance Opening balance Cash 12,727.56 21,243.42 Bank deposit 4,160,096,314.60 3,141,070,623.60 Other monetary fund 425,569,359.11 720,140,385.24 Interest receivable on deposit 4,255,007,124.44 2,978,189,526.87 Total 8,840,685,525.71 6,839,421,779.13 Total amount deposited in overseas 25,902,580.15 9,295,065.32 2. Tradable financial assets Item Balance at year-end Balance at year-begin Financial assets measured at fair value and whose changes are included 39,236,447.63 57,660,588.67 in current gains/losses Including: Derivative financial assets 39,236,447.63 57,660,588.67 241 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Tradable financial assets refers to the RMB forward exchange fund in Current Year 3. Note receivable (1) Category of note receivable Item Balance at year-end Balance at year-begin Bank acceptance 228,500.00 Trade acceptance 38,674.50 Total 267,174.50 (2) By accrual of bad debt provision Balance at year-end Category Book balance Bad debt provision Book value Amount Ratio (%) Amount Ratio (%) With bad debt provision 267,174.50 100.00 267,174.50 accrual on single item Including: Bank acceptance 228,500.00 85.52 228,500.00 Trade acceptance 38,674.50 14.48 38,674.50 Total 267,174.50 100.00 267,174.50 1) Note receivable withdrawal bad debt provision on single item Balance at year-begin Balance at year-end Bad Name Book Bad debt debt Provision Book balance Provision reason balance provision provisi ratio (%) on Minimal risk, holding maturity Bank acceptance 228,500.00 acceptance Minimal risk, holding maturity Trade acceptance 38,674.50 acceptance Total 267,174.50 — — (2) Bad debt provision of note receivable that has been accrued, withdrawn, and reversed this year N/A (3) Notes receivable that have been pledged at the end of the year: N/A (4) Notes receivable that have been endorsed or discounted at the end of the year and have not yet matured on the balance sheet date Amount to be derecognized at the end Amount not derecognized at the end of Item of the year the year Trade acceptance 38,674.50 Total 38,674.50 242 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (5) Notes receivable actually written off this year: N/A 4. Account receivable (1) Category of account receivable by aging Account age Balance at year-end Balance at year-begin Within 1 year(Including 1 year) 1,629,505,172.78 1,253,020,874.80 Including: Within 3 months (3 months included) 1,441,654,287.27 839,113,924.70 More than 3 months and less than 6 months (6 140,150,202.58 319,861,920.01 months included) Over 6 months and within one year (One year 47,700,682.93 94,045,030.09 included) Over one year - within 2 years (2 years included) 131,340,766.08 241,992,516.95 Over 2 years - within 3 years (3 years included) 154,167,214.15 32,346,833.25 Over 3 years 53,619,387.00 38,203,610.15 Total 1,968,632,540.01 1,565,563,835.15 (2) Category of account receivable by bad debt accrual Amount at year-end Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Account receivable that withdrawal 682,942,277.48 34.69 195,578,324.84 28.64 487,363,952.64 bad debt provision by single item Including: current payment with 545,656,729.90 27.72 154,606,151.98 28.33 391,050,577.92 related party Account receivable with letter of 83,951,301.01 4.26 83,951,301.01 credit Account receivable with single minor amount but withdrawal single item 53,334,246.57 2.71 40,972,172.86 76.82 12,362,073.71 bad debt provision Account receivable withdrawal bad 1,285,690,262.53 65.31 139,347,326.11 10.84 1,146,342,936.42 debt provision by portfolio Including: account receivable of 212,621,463.45 10.80 44,910,916.50 21.12 167,710,546.95 engineering customers Receivables other than engineering 1,073,068,799.08 54.51 94,436,409.61 8.80 978,632,389.47 customers Total 1,968,632,540.01 100.00 334,925,650.95 17.01 1,633,706,889.06 Continued 243 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Account receivable that withdrawal 781,312,227.18 49.90 140,035,432.60 17.92 641,276,794.58 bad debt provision by single item Including: current payment with 651,212,122.14 41.60 111,191,911.65 17.07 540,020,210.49 related party Account receivable with letter of 70,940,571.45 4.53 70,940,571.45 credit Account receivable with single minor amount but withdrawal single item 59,159,533.59 3.77 28,843,520.95 48.76 30,316,012.64 bad debt provision Account receivable withdrawal bad 784,251,607.97 50.10 118,656,456.70 15.13 665,595,151.27 debt provision by portfolio Including: account receivable of 201,410,848.70 12.87 24,773,169.64 12.30 176,637,679.06 engineering customers Receivables other than engineering 582,840,759.27 37.23 93,883,287.06 16.11 488,957,472.21 customers Total 1,565,563,835.15 100.00 258,691,889.30 16.52 1,306,871,945.85 1) Account receivable that withdrawal bad debt provision by single item Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minor single receivables, and withdrawal bad debt provision by combination shows no risk characteristic of the receivables, 96 clients involved. 2) Account receivable withdrawal bad debt provision by portfolio A.Account receivable of engineering customers Balance at year-end Account age Book balance Bad debt provision Provision ratio (%) Within 3 months (3 months included) 33,502,386.39 More than 3 months and less than 6 months (6 29,638,184.67 months included) Over 6 months and within one year (One year 29,724,507.75 included) Over one year - within 2 years (2 years included) 71,526,399.70 14,305,279.94 20.00 Over 2 years - within 3 years (3 years included) 35,248,696.77 17,624,348.39 50.00 Over 3 years 12,981,288.17 12,981,288.17 100.00 Total 212,621,463.45 44,910,916.50 — Continued 244 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Balance at year-begin Account age Book balance Bad debt provision Provision ratio (%) Within 3 months (3 months included) 46,445,327.67 More than 3 months and less than 6 months (6 18,955,344.03 months included) Over 6 months and within one year (One year 42,492,137.30 included) Over one year - within 2 years (2 years included) 73,286,167.38 14,657,233.48 20.00 Over 2 years - within 3 years (3 years included) 20,231,872.32 10,115,936.16 50.00 Over 3 years 100.00 Total 201,410,848.70 24,773,169.64 B.Receivables other than engineering customers Balance at year-end Account age Book balance Bad debt provision Provision ratio (%) Within 3 months (3 months included) 923,822,329.93 9,238,223.30 1.00 More than 3 months and less than 6 months (6 41,778,451.31 4,177,845.13 10.00 months included) Over 6 months and within one year (One year 9,463,055.00 1,892,611.00 20.00 included) Over one year - within 2 years (2 years included) 2,723,777.86 1,361,888.93 50.00 Over 2 years - within 3 years (3 years included) 87,576,718.61 70,061,374.88 80.00 Over 3 years 7,704,466.37 7,704,466.37 100.00 Total 1,073,068,799.08 94,436,409.61 — Continued Balance at year-begin Account age Book balance Bad debt provision Provision ratio (%) Within 3 months (3 months included) 388,904,609.29 3,889,046.09 1.00 More than 3 months and less than 6 months (6 27,600,654.77 2,760,065.48 10.00 months included) Over 6 months and within one year (One year 11,098,413.19 2,219,682.64 20.00 included) Over one year - within 2 years (2 years included) 136,495,488.03 68,247,744.02 50.00 Over 2 years - within 3 years (3 years included) 9,874,225.80 7,899,380.64 80.00 Over 3 years 8,867,368.19 8,867,368.19 100.00 Total 582,840,759.27 93,883,287.06 — 245 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (3) Bad debt provision of accounts receivable this year Changes this year Balance at Balance at year- Category Withdrawal or Resale or Other year-begin Accrual end reversal write-off decreases Bad debt 258,691,889.30 86,947,228.49 5,404,101.29 3,092,614.56 2,216,750.99 334,925,650.95 provision Total 258,691,889.30 86,947,228.49 5,404,101.29 3,092,614.56 2,216,750.99 334,925,650.95 (4) Account receivable actually written-off in Current Year Item Written-off amount Account receivable actually written-off 3,092,614.56 (5) Top five receivables collected by arrears party amounting to 572,545,992.76 yuan in total, accounted for 28.88% of the receivables of current year-end, the bad debt provision accrual correspondingly amounting to 181,259,573.75 yuan at year-end balance. 5. Receivables financing (1)Classification and listing of receivable financing Item Balance at year-end Balance at year-begin Bank acceptance 1,641,858,740.34 1,446,358,719.88 Total 1,641,858,740.34 1,446,358,719.88 (2)Receivable financing is classified and listed by bad debt accrual method Amount at year-end Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Withdrawal bad debt provision by 1,641,858,740.34 100.00 1,641,858,740.34 single item Including:Bank acceptance 1,641,858,740.34 100.00 1,641,858,740.34 Total 1,641,858,740.34 100.00 1,641,858,740.34 Continued Balance at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Withdrawal bad debt provision by 1,446,358,719.88 100.00 1,446,358,719.88 single item 246 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Balance at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Including:Bank acceptance 1,446,358,719.88 100.00 1,446,358,719.88 Total 1,446,358,719.88 100.00 1,446,358,719.88 (3)There is no bad debt provision accrued, recovered or reversed this year; (4)Financing of receivables that have been pledged at the end of the year Item Year-end pledged amount Bank acceptance 997,291,535.93 Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge parts of the outstanding notes receivable to the bank. For details of the pledge of bills receivable, see Note V. 24. Assets with restricted ownership or use rights. (5) Notes endorsement or discount and undue on balance sheet date listed in receivables financing at the end of the year Amount derecognition at year- Amount without Item end derecognition at year-end Bank acceptance 873,061,985.45 Total 873,061,985.45 6. Accounts paid in advance (1) Age of account paid in advance Balance at year-end Balance at year-begin Item Amount Ratio (%) Amount Ratio (%) Within one year 43,288,908.76 94.64 39,700,777.69 86.57 1-2 years 811,122.73 1.77 5,042,628.29 11.00 2-3 years 707,919.39 1.55 1,116,085.57 2.43 Over 3 years 930,855.02 2.04 Total 45,738,805.90 100.00 45,859,491.55 100.00 (2) Top 5 of account paid in advance in balance at year-end amounting to 30,421,376.72 yuan, accounted for 66.51% of the account. 7. Other account receivable Item Balance at year-end Balance at year-begin Other account receivable 82,953,808.97 88,354,803.24 247 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year-end Balance at year-begin Total 82,953,808.97 88,354,803.24 (1) Category of other account receivable Nature Book balance at year-end Book balance at year-begin Export rebate 41,300,752.20 13,304,094.59 Cash deposit 20,927,726.52 53,876,630.71 Loans of employee’s pretty cash 20,970,369.96 19,142,320.86 Related party not in consolidation statement 619,414.34 716,725.90 Advance money temporary 707,676.06 3,122,122.93 Other 1,488,175.37 1,174,866.78 Total 86,014,114.45 91,336,761.77 (2) By account age Account age Balance at year-end Balance at year-begin Within 1 year(Including 1 year) 74,641,189.07 44,978,802.65 Including: Within 3 months (3 months included) 60,732,006.02 32,703,626.46 More than 3 months and less than 6 months (6 1,842,273.09 3,033,052.73 months included) Over 6 months and within one year (One year 12,066,909.96 9,242,123.46 included) Over one year - within 2 years (2 years 3,017,092.43 16,985,265.38 included) Over 2 years - within 3 years (3 years included) 2,473,240.42 22,359,916.12 Over 3 years 5,882,592.53 7,012,777.62 Total 86,014,114.45 91,336,761.77 (3) Category of Other account receivable bad debt reserves Amount at year-end Book balance Bad debt provision Category Ratio Book value Amount Amount Ratio (%) (%) That withdrawal bad debt provision by 85,698,646.43 99.63 2,945,873.36 3.44 82,752,773.07 single item In which: other receivables with no major 43,778,479.89 50.90 2,945,873.36 6.73 40,832,606.53 248 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount at year-end Book balance Bad debt provision Category Ratio Book value Amount Amount Ratio (%) (%) individual amount but bad debt provision accrued individually Export tax refund 41,300,752.20 48.01 41,300,752.20 Related party funds 619,414.34 0.72 619,414.34 Bad debt provision accrued by portfolio 315,468.02 0.37 114,432.12 36.27 201,035.90 In which: other receivables accrued by 315,468.02 0.37 114,432.12 36.27 201,035.90 aging portfolio Total 86,014,114.45 100.00 3,060,305.48 3.56 82,953,808.97 Continued Balance at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) That withdrawal bad debt provision by 90,992,381.84 99.62 2,915,104.37 3.20 88,077,277.47 single item accrued individually 13,304,094.59 14.57 13,304,094.59 Related party funds 716,725.90 0.78 716,725.90 Bad debt provision accrued by portfolio 344,379.93 0.38 66,854.16 19.41 277,525.77 In which: other receivables accrued by 344,379.93 0.38 66,854.16 19.41 277,525.77 aging portfolio Total 91,336,761.77 100.00 2,981,958.53 3.26 88,354,803.24 1) Accrual of bad debt provision for other receivables First stage Second stage Third stage Expected Expected credit loss Expected credit loss Bad debt provision credit loss in for the whole duration Total for the whole duration next 12 (credit impairment has (no credit impairment) months occurred) Balance as at 1 Jan. 2023 1,690,724.90 1,291,233.63 2,981,958.53 Book balance of other account receivable in Current Year as at — — — — 1 Jan. 2023 --Transfer to the second stage 249 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) First stage Second stage Third stage Expected Expected credit loss Expected credit loss Bad debt provision credit loss in for the whole duration Total for the whole duration next 12 (credit impairment has (no credit impairment) months occurred) -- Transfer to the third stage -1,188,850.00 1,188,850.00 -- Reversal to the second stage -- Reversal to the first stage Provision in Current Year 181.49 22,779.94 1,456,556.15 1,479,517.58 Reversal in Current Year 88,570.63 88,570.63 Conversion in Current Year Write off in Current Year Other change 377,600.00 935,000.00 1,312,600.00 Balance as at 31 Dec. 2023 181.49 58,484.21 3,001,639.78 3,060,305.48 (4)Bad debt provision for other receivables accrued, recovered or reversed this year Amount of change this year Category Year-beginning Recovery or Write-off or Year-end Accrual Other reversal cancellation Bad debt 2,981,958.53 1,479,517.58 88,570.63 1,312,600.00 3,060,305.48 provision Total 2,981,958.53 1,479,517.58 88,570.63 1,312,600.00 3,060,305.48 (5)Other account receivable actually written-off in Current Year:N/A (6) Top 5 other receivables collected by arrears party at balance of period-end Proportion in Bad debt total other provision Name Nature Balance at year-end Account age receivables Balance ending at year- balance (%) end Unit I Tax rebate 41,179,511.61 Within 1 year 47.88 Unit II Cash deposit 10,000,000.00 Within 1 year 11.63 Within 1 year, 2-3 Unit III Cash deposit 2,639,979.48 3.07 years, Over 3 years Unit IV Cash deposit 2,490,621.17 Within 1 year 2.90 Unit V Cash deposit 2,324,874.66 Within 1 year 2.70 250 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Proportion in Bad debt total other provision Name Nature Balance at year-end Account age receivables Balance ending at year- balance (%) end Total 58,634,986.92 68.18 (7)There are no other receivables reported due to centralized management of funds. 8. Inventories (1) Classification of inventories Amount at year-end Inventory price decline Item provision/contract Book balance Book value performance cost impairment provision Raw materials 150,806,222.67 4,061,217.23 146,745,005.44 Stock commodities 1,216,300,557.72 60,027,642.16 1,156,272,915.56 Low value consumable articles 3,141,564.20 143,306.82 2,998,257.38 Goods in transit 641,198,998.83 7,934,263.70 633,264,735.13 Goods-in-process 7,337,268.01 7,337,268.01 Contract performance cost 28,988,664.67 28,988,664.67 Deferred expense for mould 47,131,566.78 47,131,566.78 Total 2,094,904,842.88 72,166,429.91 2,022,738,412.97 Continued Amount at year-begin Inventory price decline Item provision/contract Book balance Book value performance cost impairment provision Raw materials 174,848,711.84 6,676,011.97 168,172,699.87 Stock commodities 938,676,768.88 48,374,183.50 890,302,585.38 Low value consumable articles 2,653,770.39 871,871.72 1,781,898.67 Goods in transit 578,924,325.36 6,074,817.77 572,849,507.59 Goods-in-process 7,901,880.53 7,901,880.53 Contract performance cost 41,622,651.08 41,622,651.08 Deferred expense for mould 27,675,710.59 27,675,710.59 Total 1,772,303,818.67 61,996,884.96 1,710,306,933.71 251 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (2) Provision for inventory depreciation and contract performance cost impairment provision Increase this year Decrease this year Amount at year- Amount at year- Item Reversal or begin Accrual Other Other end reselling Raw materials 6,676,011.97 2,262,820.96 4,877,615.70 4,061,217.23 Stock 48,374,183.50 32,786,974.12 3,372.37 21,136,887.83 60,027,642.16 commodities Goods in transit 6,074,817.77 6,482,986.09 4,623,540.16 7,934,263.70 Low value consumable 871,871.72 275.02 728,839.92 143,306.82 articles Total 61,996,884.96 41,533,056.19 3,372.37 31,366,883.61 72,166,429.91 (3) Accrual for inventory falling price reserves Reasons for the reversal or Item Specific basis for determining of net realizable value reselling in Current Year Cost is higher than net realizable value (The processed products are Raw materials For production decline) Stock Cost is higher than net realizable value (The market price at period-end For sale commodities fell) Cost is higher than net realizable value (The market price at period-end Goods in transit For sale fell) Low value consumable Cost is higher than net realizable value Already used articles Contract Engineering construction Cost is higher than net realizable value (The Already used performance cost processed products are decline) 9. Contract assets (1) Contract assets Ending balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision Warranty 13,879,087.90 617,397.28 13,261,690.62 4,301,610.03 770,687.90 3,530,922.13 Total 13,879,087.90 617,397.28 13,261,690.62 4,301,610.03 770,687.90 3,530,922.13 (2)Amount and reasons for significant changes in book value during the year 252 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Items Change amount Change cause Warranty 9,730,768.49 New performance sales contract Total 9,730,768.49 — (3) Provision for impairment of contract asset in the Period Balance at year-end Category Book balance Bad debt provision Book value Amount Ratio (%) Amount Ratio (%) Withdrawal bad debt provision 13,879,087.90 100.00 617,397.28 4.45 13,261,690.62 by single Total 13,879,087.90 100.00 617,397.28 4.45 13,261,690.62 Continued Amount at year-begin Category Book balance Bad debt provision Book value Amount Ratio (%) Amount Ratio (%) Withdrawal bad debt provision 4,301,610.03 100.00 770,687.90 17.92 3,530,922.13 by single Total 4,301,610.03 100.00 770,687.90 17.92 3,530,922.13 1)Bad debt provisions are made individually for contract assets Amount at year-begin Ending balance Name Bad debt Bad debt Book balance Book balance Ratio (%) Reason provision provision Provision for bad debts of 4,301,610.03 770,687.90 13,879,087.90 617,397.28 4.45 contract ass ets Total 4,301,610.03 770,687.90 13,879,087.90 617,397.28 — — (4)The provision, recovery or transfer of bad debt provisions for contract assets this year project Item Provision for this Transferred this year Write -off this year Reason year Provision for bad debts of c 153,272.28 306,562.90 ontract assets 253 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Provision for this Transferred this year Write -off this year Reason year Total 153,272.28 306,562.90 — 10. Non-current assets coming due within one year Item Balance at year-end Balance at year -begin Creditor's right investment due within 122,294,027.78 170,167,638.89 one year Total 122,294,027.78 170,167,638.89 (1)Creditor's right investment due within one year 1)Creditor's right investment due within one year Balance at year-end Balance at year-begin Impair Impair Name ment ment Book balance Book value Book balance Book value provisi provisi on on large deposit 122,294,027.78 122,294,027.78 170,167,638.89 170,167,638.89 certificates Total 122,294,027.78 122,294,027.78 170,167,638.89 170,167,638.89 2).Creditor's right investment due within 1 year at the end of the year Actual rate Overdue principal Interest Date of Balance Balance Item Face value Balance at year- Balance at rate expiring at year- at year- end year-begin end begin large deposit 20,000,000.00 3.70% 2024-4-13 22,039,111.11 certificates 21,288,833.33 large deposit 100,254,916.6 100,000,000.00 3.99% 2024-2-8 100,254,916.67 certificates 7 Total 120,000,000.00 — — — — 11.Other current asset Item Balance at year-end Balance at year-begin VAT to be deducted 193,911,165.30 39,540,856.28 Advance payment of income tax 29,599,620.50 22,673,762.88 Contract acquisition cost 701,222.80 5,654,727.03 254 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year-end Balance at year-begin Time deposits held to maturity 50,559,479.17 Local sales tax in Pakistan 511,584.19 1,269,125.78 Other 696,290.28 891,480.71 Total 225,419,883.07 120,589,431.85 12.Creditors' right investment (1)creditor's right investment Balance at year-end Balance at year-begin Impair Impair Item ment ment Book balance Book value Book balance Book value provisio provisio n n large deposit 420,537,485.54 420,537,485.54 121,543,750.00 121,543,750.00 certificates Total 420,537,485.54 420,537,485.54 121,543,750.00 121,543,750.00 (2)important creditor's right investment balance at year-end Item Overdue Face value Interest rate Actual rate Date of expiring principal large deposit 100,000,000.00 3.20% 3.20% 2026-1-31 certificates large deposit 80,000,000.00 3.35% 3.35% 2026-3-28 certificates large deposit 30,000,000.00 3.20% 3.20% 2026-3-16 certificates large deposit 30,000,000.00 3.30% 3.30% 2026-5-31 certificates large deposit 50,000,000.00 3.30% 3.30% 2026-6-14 certificates large deposit 50,000,000.00 3.10% 3.10% 2026-6-26 certificates large deposit 20,000,000.00 3.15% 3.15% 2026-7-31 certificates large deposit 25,000,000.00 3.25% 3.25% 2025-8-30 certificates large deposit 25,000,000.00 3.30% 3.30% 2025-8-30 certificates 255 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) balance at year-end Item Overdue Face value Interest rate Actual rate Date of expiring principal Total 410,000,000.00 — — — Continued Balance at year-begin Item Overdue Face value Interest rate Actual rate Date of expiring principal large deposit 100,000,000.00 3.99% 3.99% 2024-2-8 certificates large deposit 20,000,000.00 3.70% 3.70% 2024-4-13 certificates Total 120,000,000.00 — — — 256 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 13. Long-term equity investment Changes in Current Year Othe Impair r Balanc ment com Oth Investment e at provisi preh er profit and Declaration Provision Balance at on ensiv cha Balance at year- Invested enterprise Additional Disinvestme loss of cash for year-begin begin- e nge Other year-end end of investment nt confirmed by dividends or impairme year inco s of impair equity profits nt balanc me equ method ment e adjus ity tmen t Associated companies 1.Hefei Xingmei Assets Management 19,899,17 33,680.34 14,139,256.7 Co., Ltd. 6.44 5,793,600.00 8 2.Sichuan Zhiyijia Network Technology 51,850,17 18,633,005.7 68,854,162.7 note1 Co., Ltd. 9.61 1,629,022.64 3 0 3.Hong Yuan Ground Energy Heat Tech. 17,019,04 24,500,000.0 - Co., Ltd.note2 1.81 0 1,847,143.30 9,328,101.49 4.Sichuan Tianyou Guigu Technology 3,110,581. -161,722.64 Co., Ltd.note3 87 2,948,859.23 5.Chengdu Guigu Environmental Tech. 8,505,448. 250,813.73 257 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Changes in Current Year Othe Impair r Balanc ment com Oth Investment e at provisi preh er profit and Declaration Provision Balance at on ensiv cha Balance at year- Invested enterprise Additional Disinvestme loss of cash for year-begin begin- e nge Other year-end end of investment nt confirmed by dividends or impairme year inco s of impair equity profits nt balanc me equ method ment e adjus ity tmen t Co., Ltd.note4 77 8,756,262.50 6.ChanghongRuba 注5 ElectricCompany(Private)Ltd. 7. .Hefei Xinmei Solar Energy 注6 Technology Co., Ltd.note 2,177,980.00 2,177,980.00 8.Sichuan Hongyun Venture Investment 注7 18,000,000.0 47,270.54 18,047,270.5 Partnership(LP) 0 4 100,384,4 24,500,000.0 Total 18,000,000.0 19,133,884.4 112,745,811. 28.50 0 9,600,602.64 9,328,101.49 0 0 75 258 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Note 1: on 16 December 2014, the Company executed a joint venture agreement with its controlling shareholder Sichuan Changhong Electric Co., LTD, targeting to jointly establish Sichuan Zhiyijia Network Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of 50 million yuan, among which, the Company made contribution of 15 million yuanwith shareholding proportion of 30% and Sichuan Changhong Electric Co., LTD made contribution of 35 million yuanwith shareholding proportion of 70%. In 2019, the Company increase capital of 29,087,040.00 yuan (of which: 20 million yuan reckoned in registered capital and 9,087,040 yuan reckoned in capital reserves) to Zhiyijia with shareholding ratio up to 50%. Note 2: subsidiary Sichuan Changhong Air Conditioner Co., Ltd (“Changhong Air Conditioner”) and Hengyou yuan Technology Development Group Co., Ltd. (“Hengyou yuan”) cooperated to establish Hong Yuan Ground Energy Heat Technology Co., Ltd. on 28 October 2015. The registered capital of the company is 50 million yuan, among which, Changhong Air Conditioner contributed 24.5 million yuan, accounting for 49% of the registered capital, and Hengyou yuan contributed 25.5 million yuan, accounting for 51% of the registered capital. In December 2022, the shareholders' meeting of Hongyuan Ground Company passed the decision to cancel and liquidate the company, and the liquidation and cancellation was completed within this year. Note 3: Sichuan Tianyou Guigu Technology Co., Ltd. was incorporated on 31 March 2015 with registered capital of 100 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution of RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 20 million yuan, accounting for 20% of the registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 20 million yuan, accounting for 20% of the registered capital. Mianyang Investment Holding (Group) Co., Ltd made capital contribution of 5 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 5 million yuan, accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd. made capital contribution of 10 million yuan, accounting for 10% of the registered capital. In November 2015, Jiangsu Runye Investment Co., Ltd. transferred all its 10% shares to Sichuan Shuye Jiachen Real Estate Development Co., Ltd.;Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 15 million yuan, accounting for 15% of the registered capital.In November 2015, Chengdu Dongyu Shangmao Co., Ltd. transferred all its 15% shares to Chengdu Dongyu No. 1 Enterprise Management Consulting Partnership (Limited Partnership).In 2016, shareholders meeting of Sichuan Tianyou Guigu Technology Co., Ltd. agreed to reduce the 50 million Yuan capital, the shareholders are reducing the capital by ratio of share-holding. After capital reduction, subsidiary Changhong Air conditioner contributed 12.5 million Yuan, representing 25% of the registered capital. Note 4: Chengdu Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 with registered capital of 40 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution of 10 million yuan, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 8 million yuan, accounting for 20% of the registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 8 million yuan, accounting for 20% of the registered capital. 259 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Mianyang Investment Holding (Group) Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of 4 million yuan, accounting for 10% of the registered capital. Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 6 million yuan, accounting for 15% of the registered capital Note 5: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint venture agreement with RUBA Comprehensive Trading Company in 2017, pursuant to which, both parties agreed to increase capital contribution of US$ 1,130,191.00, among which, Zhongshan Changhong subscribed to contribute US$ 452,076.00 (equivalent to 3,001,649.02 yuan on the actual contribution date) according to the original shareholding proportion of 40% and RUBA Comprehensive Trading Company subscribed to contribute US$ 678,115.00 according to the original shareholding proportion of 60%. Note 6: Hefei Meiling Solar Energy Technology Co., Ltd. was incorporated on April 18, 2002, with a registered capital of 10 million yuan. Subsidiary Hefei Meiling Group Holdings Limited invested 3.1114 million yuan, accounting for 31.114% of the registered capital; Hefei Huayi Investment Co., Ltd. invested 4.972 million yuan, accounting for 49.72% of the registered capital; Hefei Xingtai Asset Management Co., Ltd. invested 1.9166 million yuan, accounting for 19.166% of the registered capital. Note 7.On May 5, 2023, the Company signed a partnership agreement with the controlling shareholder Sichuan Changhong Electric Co.,Ltd., Sichuan Changhong Electronic (Group) Co., Ltd. and Sichuan Hongyun Venture Equity Investment Management Co., Ltd. to jointly establish Sichuan Hongyun Venture Capital Partnership (Limited Partnership) with a registered capital of RMB 148 million, of which RMB 45 million was subscribed by the Company, with a shareholding ratio of 304.1%. This year, the Company actually contributed RMB 18 million. 14. Other non-current financial assets Item Ending balance Opening balance Sichuan Changhong Group Finance Co., Ltd. 554,145,436.29 542,489,224.37 Sichuan Hongyun New-Generation Information technology Venture Capital Fund Partnership (limited 36,507,860.19 41,015,878.36 partnership) Changhong Group Sichuan Shenwan Hongyuan Strategic New Industrial Parent Fund Partnership (limited 68,686,219.00 40,044,345.58 partnership) Huishang Bank Co., Ltd. 14,800,000.00 5,000,000.00 Total 674,139,515.48 628,549,448.31 15. Investment real estate (1) Investment real estate measured at costs 260 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item House and buildings Total I.Original book value 1.Balance at year-begin 62,361,143.47 62,361,143.47 2.Increase in this year 3.Decrease in this year 4.Balance at year-end 62,361,143.47 62,361,143.47 II.Accumulated depreciation and accumulated amortization 1.Balance at year-begin 9,463,082.58 9,463,082.58 2.Increase in this year 1,977,573.18 1,977,573.18 (1)Withdrawal or amortization 1,977,573.18 1,977,573.18 3.Decrease in this year 4.Balance at year-end 11,440,655.76 11,440,655.76 III.Impairment provision IV.Book value 1.Ending book value 50,920,487.71 50,920,487.71 2. Opening book value 52,898,060.89 52,898,060.89 (2) No investment real estate measured by fair value at year-end. (3) Investment real estate without property certification held Reasons for failing to complete Item Book value property rights certificate J04workshop 26,619,770.82 Related property rights in procedure J03workshop 18,395,279.76 Related property rights in procedure J20 air compressor station workshop 1,314,489.13 Related property rights in procedure J18 opening and closing office 636,117.23 Related property rights in procedure Total 46,965,656.94 16.Fixed assets Item Book value at year-end Book value at year-begin Fixed assets 2,104,618,850.52 2,197,260,683.20 Liquidation of fixed assets 32,293,183.76 32,293,183.76 Total 2,136,912,034.28 2,229,553,866.96 16.1 Fixed assets (1) Fixed assets 261 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) House and Machinery Transport Other Item Total buildings equipment equipment equipment I.Original book value 1,712,329,446. 1.Balance at year-begin 1,865,348,912.3 34,208,114.6 243,498,921.3 3,855,385,395.0 72 2 0 6 0 2.Increase in this year 43,261,437.77 127,160,620.75 208,336,752.62 1,981,576.26 35,933,117.84 (1)Purchase 10,037,274.17 7,011,877.87 19,030,728.30 1,981,576.26 (2)Construction in progress 42,770,821.16 111,314,699.90 transfer-in 28,885,411.88 182,970,932.94 (3)Other increase 490,616.61 5,808,646.68 35,828.09 6,335,091.38 3.Decrease in this year 17,917,779.20 150,468,417.32 679,157.25 8,178,141.27 177,243,495.04 (1)Dispose or retirement 46,817.00 61,989,767.62 514,675.38 7,693,871.79 70,245,131.79 (2)Construction in progress 84,128,835.52 84,128,835.52 transfer-in (3)Other increase 17,870,962.20 4,349,814.18 164,481.87 484,269.48 22,869,527.73 4.Balance at year-end 1,737,673,105. 1,842,041,115.7 35,510,533.6 271,253,897.9 3,886,478,652.5 29 5 1 3 8 II.Accumulated depreciation 1.Balance at year-begin 1,064,311,933.4 22,446,081.4 114,040,153.7 1,656,055,119.1 455,256,950.47 8 4 9 8 2.Increase in this year 55,603,756.85 142,849,646.44 3,021,425.90 27,246,030.87 228,720,860.06 (1)Accrual 55,603,756.85 142,849,646.44 3,021,425.90 27,225,313.68 228,700,142.87 (2)Other increase 20,717.19 20,717.19 3.Decrease in this year 3,172,136.80 92,885,751.89 610,384.11 7,359,926.59 104,028,199.39 (1)Dispose or retirement 22,180.29 54,711,171.42 484,471.72 7,007,459.33 62,225,282.76 (2)Construction in progress 37,833,279.51 37,833,279.51 transfer-in (3)Other increase 3,149,956.51 341,300.96 125,912.39 352,467.26 3,969,637.12 4.Balance at year-end 1,114,275,828.0 24,857,123.2 133,926,258.0 1,780,747,779.8 507,688,570.52 3 3 7 5 262 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) House and Machinery Transport Other Item Total buildings equipment equipment equipment III.Impairment provision 1.Balance at year-begin 1,060,299.52 1,009,293.10 2,069,592.62 2.Increase in this year 3.Decrease in this year 946,836.82 10,733.59 957,570.41 (1)Dispose or retirement 924,106.56 10,733.59 934,840.15 (2)Other decrease 22,730.26 22,730.26 4.Balance at year-end 113,462.70 998,559.51 1,112,022.21 IV.Book value 1.Ending book value 1,229,984,534. 727,651,825.02 10,653,410.3 136,329,080.3 2,104,618,850.5 77 8 5 2 1,257,072,496. 11,762,033.1 128,449,474.4 2,197,260,683.2 2. Opening book value 799,976,679.32 25 6 7 0 The new fixed assets in this year mainly due to the 182,970,932.94 yuan transfer from construction in process; decrease of the fixed assets in Current Year mainly including assets dispose for retirement. (2) Fixed assets temporary idle at year-end. N/A (3) Fixed assets leased through operating lease at year-end Accumulated Impairment Item Original book value Book value depreciation provision House and buildings 77,095,418.04 30,649,122.95 46,446,295.09 Machinery 23,864,393.68 15,528,428.42 8,335,965.26 equipment Other equipment 10,720.00 10,184.00 536.00 Total 100,970,531.72 46,187,735.37 54,782,796.35 (4) Fixed assets without property certificate Reason of not complete the property Item Book value certificate J07 electrical workshop 43,746,628.68 Related property rights in procedure J02workshop 28,141,535.48 Related property rights in procedure J05 evaporator and condenser 27,102,662.73 Related property rights in procedure workshop J01workshop 26,083,556.62 Related property rights in procedure J06 central air-conditioner 18,404,265.79 Related property rights in procedure workshop J50finished product warehouse 16,219,453.72 Related property rights in procedure 263 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Reason of not complete the property Item Book value certificate J51finished product warehouse 15,737,406.33 Related property rights in procedure J53finished product warehouse 11,941,524.09 Related property rights in procedure J52finished product warehouse 11,412,002.93 Related property rights in procedure J54finished product warehouse 11,160,992.28 Related property rights in procedure J55finished product warehouse 10,290,013.27 Related property rights in procedure J56 finished product warehouse 10,290,013.27 Related property rights in procedure J09raw material warehouse 6,238,503.81 Related property rights in procedure J10raw material warehouse 4,821,256.39 Related property rights in procedure J11raw material warehouse 4,749,533.53 Related property rights in procedure J08 packing materials warehouse 4,328,338.68 Related property rights in procedure J17 chemical storage 1,481,542.49 Related property rights in procedure J15 house of refrigerant forklift 1,451,852.84 Related property rights in procedure J16 chemical storage 1,195,695.94 Related property rights in procedure J19 main guard room 354,683.89 Related property rights in procedure J19A guard room 188,172.78 Related property rights in procedure J19D guard room 138,334.30 Related property rights in procedure J19E guard room 138,334.30 Related property rights in procedure Total 255,616,304.14 16.2 Disposal of fixed assets Amount at year- Amount at year- Reasons for disposal Item end begin transferred Relocation for land Relevant assets disposal for reserved lands 32,293,183.76 32,293,183.76 reserve Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of Feidong county, the land reserve center of Feidong county will purchase and store the land use right of an economic development zone located at Feidong county, Hefei city, which is owned by the Company’s subordinate companies, Equator Electric and Equator Home Appliance, respectively, with an area of 19,245.09 sq.m. (Approximately 28.87 mu, Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0366, the stated use of the land is for industrial purpose) and an area of 46,161.9 sq.m. (Approximately 69.24 mu, Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0367, the stated use of the land is for industrial purpose). The total consideration for purchasing and storage is approximately 36 million yuan, of which the consideration for the land use right owned by Equator Electric and Equator Home Appliance is approximately 10.59 million yuan and 25.41 million yuan, respectively. The Company has completed the relocation of occupants of the premises, and the net fixed assets in relation to the land will transfer as disposal, accounting treatment will be conduct in line with relevant rules upon receiving of the 264 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) relocation compensation. No impairment of relevant assets disposal for reserved lands at year-end. 17. Construction in progress Item Balance at year-end Balance at year-begin Construction in progress 69,920,839.20 66,522,492.77 Total 69,920,839.20 66,522,492.77 (1) Details of construction in progress Balance at year-end Balance at year-begin Im pa Im ir pai m rm Item en Book balance ent Book value Book balance Book value t pro pr visi ov on isi on Air conditioning manufacturing system capacity upgrading projec 24,062,124.83 24,062,124.83 Zhongshan Changhong technical 7,036,680.59 7,036,680.59 615,619.91 615,619.91 transformation project Industrial Internet Changhong 5,563,207.57 5,563,207.57 13,041,733.93 Meiling Promotion Project 13,041,733.93 New flat color plate door shell line 2,155,584.07 2,155,584.07 project Transformation and maintenance project of large line for B-line shift 2,048,088.46 2,048,088.46 recovery To-be-installed equipment project 2,003,069.71 2,003,069.71 Commercial kitchen refrigerator 1,894,989.00 1,894,989.00 2,627,743.25 2,627,743.25 cabinet project Projects to improve the capacity and production efficiency of the 1,624,647.04 1,624,647.04 washing machine manufacturing company in the first quarter Fixed assets project of 7 kg 1,534,513.28 1,534,513.28 supporting production equipment 265 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Balance at year-end Balance at year-begin Im pa Im ir pai m rm Item en Book balance ent Book value Book balance Book value t pro pr visi ov on isi on Large refrigerator efficiency improvement and transformation 1,388,626.00 1,388,626.00 project Rectification project of elevators and fire hazards in charging area of 1,124,589.14 1,124,589.14 finished product warehouse Manufacturing system automation 1,113,002.29 1,113,002.29 project in 2023 Extrusion and crushing capacity improvement demand project of 1,033,130.00 1,033,130.00 Hefei refrigerator manufacturing company New plastic vacuum forming 1,027,433.62 1,027,433.62 machine project Adaptability transformation project of fin stamping production line and 2,634,632.94 2,634,632.94 its supporting equipment Liquid nitrogen tank production 680,956.02 680,956.02 560,521.11 560,521.11 line construction project Laboratory investment projects 627,076.10 627,076.10 2,384,325.39 2,384,325.39 Supporting production equipment 617,699.12 617,699.12 1,919,823.02 1,919,823.02 of washing machine Meiling extrusion line relocation 339,115.04 339,115.04 6,938,682.02 6,938,682.02 and capacity expansion project Efficiency improvement of 182,748.20 182,748.20 refrigerator cabinet Comprehensive renovation project of mixed flow of rainwater and 6,995,545.89 6,995,545.89 sewage in freezer park and living area 266 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Balance at year-end Balance at year-begin Im pa Im ir pai m rm Item en Book balance ent Book value Book balance Book value t pro pr visi ov on isi on Accident emergency pool 1,539,361.49 1,539,361.49 construction project Comprehensive renovation project of mixed flow of rainwater and 2,597,950.95 2,597,950.95 sewage in freezer park and living area Front-end expansion project of Hefei base with an annual output 3,242,813.99 3,242,813.99 of 10 million refrigerator cabinets Refrigerator park 35 kV substation 1,273,661.54 1,273,661.54 construction project Door lining to homemade phase I 2,328,292.80 2,328,292.80 project Multi-door shell molding line 5,053,126.87 5,053,126.87 Large refrigerator low boiling point foaming equipment 1,652,011.04 1,652,011.04 renovation project Freeze lining structure changed to 2,886,521.55 2,886,521.55 bottom package side 21 years of Manufacturing System 186,700.00 186,700.00 Automation Project (Phase I) Meiling PLM project 237,168.14 237,168.14 Other petty projects 10,258,141.68 11,411,674.38 11,411,674.38 10,258,141.68 Total 69,920,839.20 69,920,839.20 66,522,492.77 66,522,492.77 18. Right-of-use assets Item House and buildings Total I. Original book value 267 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item House and buildings Total 1.Balance at year-begin 58,322,978.95 58,322,978.95 2.Increase in this year 29,503,973.75 29,503,973.75 (1) Rent in 29,503,973.75 29,503,973.75 3. Decrease in this year 25,821,804.55 25,821,804.55 (1)lease expired 25,821,804.55 25,821,804.55 4.Balance at year-end 62,005,148.15 62,005,148.15 II.Accumulated depreciation 1.Balance at year-begin 21,676,843.85 21,676,843.85 2. Increase in this year 8,872,309.05 8,872,309.05 (1)Accrual 8,872,309.05 8,872,309.05 3. Decrease in this year 18,537,405.36 18,537,405.36 (1)lease expired 18,537,405.36 18,537,405.36 4.Balance at year-end 12,011,747.54 12,011,747.54 III.Impairment provision 1.Balance at year-begin 2. Increase in this year 3. Decrease in this year 4.Balance at year-end IV.Book value 1.Ending book value 49,993,400.61 49,993,400.61 2. Opening book value 36,646,135.10 36,646,135.10 The Company accrual the depreciation on right-of-use assets from the commencement date of the lease period. Depending on use of the assets, amount of accrual will included in costs of relevant assets or current gain/loss. 19. Intangible assets (1) Intangible assets Trademark Non-patent Patent Item Land use right Other Total special right technology technology I.Original book value 1.Balance at year- 283,292,439. 148,876,015.35 1,945,670,528.8 begin 864,798,616.68 34 637,791,820.51 10,911,637.00 8 2.Increase in this 56,025,706.04 281,800.00 year 105,295,988.38 161,603,494.42 (1) Internal 96,484,623.15 56,025,706.04 281,800.00 268 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Trademark Non-patent Patent Item Land use right Other Total special right technology technology research 152,792,129.19 (2)Other 8,811,365.23 8,811,365.23 3.Decrease in this 60,000.00 8,811,365.23 8,871,365.23 year (1) Disposal (2)Other 60,000.00 8,811,365.23 8,871,365.23 decreases 4.Balance at year- 283,292,439. 196,090,356.16 2,098,402,658.0 end 864,798,616.68 34 743,027,808.89 11,193,437.00 7 II.Accumulated amortization 1.Balance at year- 283,292,439. 48,405,910.79 3,169,107.30 begin 214,959,291.84 34 449,672,240.15 999,498,989.42 2.Increase in this 18,422,044.59 28,534,580.71 1,066,351.37 year 100,621,606.54 148,644,583.21 (1)Accrual 18,422,044.59 28,534,580.71 1,066,351.37 100,621,606.54 148,644,583.21 3.Decrease in this year 4.Balance at year- 283,292,439. 76,940,491.50 4,235,458.67 1,148,143,572.6 end 233,381,336.43 34 550,293,846.69 3 III.Impairment provision 1.Balance at year- 33,820,367.20 7,274,668.72 4,508,495.33 45,603,531.25 begin 2.Increase in this 7,183,626.21 11,016,493.25 18,200,119.46 year (1)Accrual 7,183,626.21 11,016,493.25 18,200,119.46 3.Decrease in this year 4.Balance at year- 41,003,993.41 18,291,161.97 4,508,495.33 63,803,650.71 end IV.Book value 1.Ending book 100,858,702.69 2,449,483.00 value 631,417,280.25 151,729,968.79 886,455,434.73 2. Opening book 93,195,435.84 3,234,034.37 269 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Trademark Non-patent Patent Item Land use right Other Total special right technology technology value 649,839,324.84 154,299,213.16 900,568,008.21 The intangible assets resulted from internal research takes 7.28% of the balance of intangible assets at year-end (2) No land use right without property certification done at year-end (3) Impairment test of intangible assets The recoverable amount is determined according to the present value of the expected future cash flow Determinati Number Key on basis of of years Key paramete Recoverabl Impairment key Item Book value of parameters of rs of e amount amount parameters forecast forecast period stable in stable period period period Ice washing Sales volume, intangible 1,028,634.7 593,540.28 3 435,094.51 income, cost assets 1 9 Ice washing Sales volume, intangible 617,999.09 617,999.09 3 income, cost assets 2 Ice washing Sales volume, intangible 579,421.08 383,768.42 3 195,652.66 income, cost assets 3 Ice washing Sales volume, intangible 4,145,708.7 3,616,298.6 3 529,410.04 income, cost assets 4 3 9 Air- conditioning Sales volume, 13,410,734. 12,988,512. 5 intangible 422,221.41 income, cost 39 98 assets 1 Total 19,782,498. 1,582,378.6 18,200,119. — — — — 08 2 46 20. Goodwill (1) Original value of goodwill 270 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Increase this year Decrease this year Formation Formation Balance at year- Balance at Invested enterprise from from begin Other Other year-end enterprise enterprise merger merger Hefei Meiling Group Holdings 3,553,367. 3,553,367.77 Limited 77 3,553,367. Total 3,553,367.77 77 (2) Impairment loss of goodwill Balance at Increase this year Decrease this year Balance at Invested enterprise year-begin Accrual Other Accrual Other year-end Hefei Meiling Group Holdings 3,553,367.77 3,553,367.77 Limited Total 3,553,367.77 3,553,367.77 Note: The Company’s goodwill has been fully accrued for impairment reserves at year-end. 21. Long-term prepaid expenses Increase this Amortization Item Opening balance Other decreases Ending balance period for the period Long-term prepaid 14,900,600.59 29,997,082.89 9,199,217.86 35,698,465.62 expenses Total 14,900,600.59 29,997,082.89 9,199,217.86 35,698,465.62 22. Deferred tax assets and deferred tax liabilities (1) Deferred income tax assets without the offset Ending balance Opening balance Deductible Deferred Deductible Deferred Item temporary income tax temporary income tax difference assets difference assets Deferred income tax assets recognized 575,117,840.02 684,314,381.95 from ir-reparable losses 86,267,676.00 102,647,157.29 Deferred income tax assets recognized 312,522,821.29 220,654,506.50 33,098,175.98 from assets impairment 47,114,940.66 Deferred income tax assets recognized 89,179,865.35 100,794,535.00 15,119,180.24 from deferred income 13,376,979.81 Deferred income tax assets recognized 52,138,935.61 7,287,948.90 38,239,898.15 4,935,157.87 271 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Ending balance Opening balance Deductible Deferred Deductible Deferred Item temporary income tax temporary income tax difference assets difference assets by lease liabilitie Deferred income tax assets recognized 31,904,790.39 4,785,718.56 12,624,332.22 1,893,649.84 from accrual liability Deferred income tax assets recognized 13,940,576.25 2,091,086.44 9,072,708.08 1,360,906.21 from Dismission welfare Accrued income tax assets 6,464,906.83 1,367,611.03 8,718,636.16 1,666,526.91 Deferred income tax assets recognized 323,557.50 48,533.63 by changes in fair value Deferred income tax assets recognized 5,632,939.75 844,940.96 for development expenditure 1,081,593,293.2 162,340,495.0 Total 1,080,051,937.81 161,565,695.30 4 3 (2) Deferred income tax liabilities without the offset Ending balance Opening balance Taxable Deferred Taxable Deferred Item temporary income tax temporary income tax differences liability differences liability Recognized by changes in fair value 72,922,565.81 10,938,384.87 57,642,166.20 8,646,324.93 Deferred income tax liabilities 49,993,400.61 7,031,136.31 36,646,135.08 4,758,755.78 recognized by use asset Recognized by fixed assets depreciation 25,632,968.47 3,844,945.25 27,362,815.80 4,104,422.37 Total 21,814,466.43 121,651,117.08 17,509,503.08 148,548,934.89 (3) Details of unrecognized deferred income tax assets Item Ending balance Opening balance Deductible temporary difference 159,108,623.94 168,621,827.52 Deductible loss 216,256,401.45 1,068,180,146.62 Total 375,365,025.39 1,236,801,974.14 23. Other non-current assets 272 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount at year-end Amount at year-begin Item Impairment Impairment Book balance Book value Book balance Book value provision provision Prepaid equipment, 15,299,373.85 15,299,373.85 893,238.57 893,238.57 engineering, etc. Contract asset 11,955,960.50 653,720.00 11,302,240.50 Total 27,255,334.35 653,720.00 26,601,614.35 893,238.57 893,238.57 24.Assets with restricted ownership or use right Year-end Item Book Balance Restrictio Book value Restriction information n type Security deposit; Frozen for Monetary funds 438,655,288.66 438,655,288.66 Frozen litigation Receivable Pledge for issuing bank 997,291,535.93 997,291,535.93 Pledge financing acceptance bills Fixed assets 478,732,601.33 321,209,491.52 Mortgage Loan mortgage Intangible assets 415,797,056.93 264,252,595.08 Mortgage Loan mortgage Real estate 5,795,017.72 3,097,441.68 Mortgage Loan mortgage investment Total 2,336,271,500.57 2,024,506,352.87 — — Continued Year-Begin Item Book Balance Restrictio Book value Restriction information n type Security deposit; Frozen for Monetary funds 718,777,132.92 718,777,132.92 Frozen litigation Receivable Pledge for issuing bank 405,400,483.49 405,400,483.49 Pledge financing acceptance bills Fixed assets 477,550,851.88 335,613,742.86 Mortgage Loan mortgage Intangible assets 415,797,056.93 272,690,841.98 Mortgage Loan mortgage Real estate 5,795,017.72 3,278,221.44 Mortgage Loan mortgage investment Total 2,023,320,542.94 1,735,760,422.69 — — 25. Short-term loans 273 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (1)Classification of short-term loans Category Ending balance Opening balance Guaranteed loan 5,000,000.00 55,000,000.00 Loan in credit 1,128,967,080.14 619,000,000.00 Interest payable 135,338.89 143,916.67 Total 1,134,102,419.03 674,143,916.67 (2)Short-term loans overdue:N/A. 26. Trading financial liability Item Balance at year-end Balance at year-begin Trading financial liability 32,229,012.86 41,961,524.78 Including: Derivative financial liability 32,229,012.86 41,961,524.78 27. Note payable Type Balance at year-end Balance at year-begin Bank acceptance 5,604,059,289.98 4,814,889,712.60 Trade acceptance 300,327,800.00 149,484,800.00 Total 5,904,387,089.98 4,964,374,512.60 There were no Notes payable that were due but unpaid at the end of the year. 28. Account payable (1) Account payable Item Amount at year-end Amount at year-begin Total 3,882,303,908.89 2,917,997,138.00 Including: Amount aged over 1 year 87,743,285.28 60,523,652.84 (2) Major account payable with over one year book age at year-end.:N/A 29 Received in advance. Category Amount at year-end Amount at year-begin Total 55,949.90 Including: Amount aged over 1 year 30. Contract liabilities (1) Contract liabilities 274 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Amount at year-end Amount at year-begin Total 405,698,756.02 358,755,397.77 Including: Amount aged over 1 year 42,798,796.43 29,823,819.05 (2) Major contract liabilities with over one year book age at year-end.: N/A (3)Significant changes in book value this year.: N/A 31. Wages payable (1) Category Balance at year- Balance at year- Item Increase this year Decrease this year begin end Short-term compensation 323,031,068.96 1,940,853,268.37 1,826,488,008.55 437,396,328.78 After-service welfare- 20,496,424.32 130,607,322.88 149,350,753.71 1,752,993.49 defined contribution plans Dismiss welfare 4,627,421.85 5,351,632.96 5,516,160.52 4,462,894.29 Total 348,154,915.13 2,076,812,224.21 1,981,354,922.78 443,612,216.56 (2) Short-term compensation Balance at year- Item Increase this year Decrease this year Balance at year-end begin Wages, bonuses, 311,848,079.07 1,763,520,099.95 1,646,156,298.23 429,211,880.79 allowances and subsidies Welfare for workers and 402,556.82 44,956,094.77 44,800,915.71 557,735.88 staff Social insurance 5,220,685.85 55,304,847.10 58,824,501.74 1,701,031.21 Including: Medical 4,811,752.39 51,120,600.05 54,344,297.18 1,588,055.26 insurance Work injury insurance 325,176.62 3,877,243.14 4,173,200.65 29,219.11 Maternity insurance 83,756.84 307,003.91 307,003.91 83,756.84 Housing accumulation 5,115,350.86 71,450,059.56 71,153,065.18 5,412,345.24 fund Labor union expenditure and personnel education 444,396.36 5,622,166.99 5,553,227.69 513,335.66 expense Total 323,031,068.96 1,940,853,268.37 1,826,488,008.55 437,396,328.78 (3) Defined contribution plans Item Balance at year- Increase this year Decrease this year Balance at year-end begin Basic endowment 18,215,805.28 117,094,798.57 134,712,242.46 598,361.39 275 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year- Increase this year Decrease this year Balance at year-end begin insurance Unemployment 2,280,619.04 13,512,524.31 14,638,511.25 1,154,632.10 insurance Total 20,496,424.32 130,607,322.88 149,350,753.71 1,752,993.49 32. Tax payable Item Balance at year-end Balance at year-begin Value-added tax 16,433,804.39 30,277,729.74 Enterprise income tax 22,442,997.30 1,822,555.65 Individual income tax 9,049,531.30 4,799,031.61 Urban maintenance and construction 8,800,180.85 9,544,272.36 tax Real estate tax 3,702,169.69 3,658,985.41 Land use tax 1,430,553.17 1,431,191.08 Educational surtax 6,388,436.72 6,850,511.36 Stamp tax 4,270,122.54 3,654,400.08 Construction fund of Water 663,334.83 668,948.01 Conservancy Projects Treatment fund for abandon electrics 16,436,695.00 17,508,786.00 & electronics Other 2,299,925.92 71,467.32 Total 91,917,751.71 80,287,878.62 33. Other account payable Item Balance at year-end Balance at year-begin Dividend payable 5,384,407.44 4,978,994.16 Other account payable 879,330,313.86 823,228,574.05 Total 884,714,721.30 828,207,568.21 33.1 Dividend payable 276 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year-end Balance at year-begin The People’s Insurance Company (Group) of China 432,607.23 432,607.23 Limited Hefei Branch of Bank of China 446,576.60 391,245.50 Hefei Collective Industrial Association 446,575.90 391,244.89 Provincial trust and investment company Wuhu 357,261.30 312,996.42 office China Life Insurance Group Co., Ltd. 288,404.82 288,404.82 BOC- Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50 Other units 3,259,284.09 3,008,797.80 Total 5,384,407.44 4,978,994.16 33.2 Other account payable (1) Other account payable by nature Nature Balance at year-end Balance at year-begin Accrued expenses (expenses occurred without reimbursed) 381,110,482.12 344,028,624.89 Receivables received temporary and deducted temporary 13,201,384.59 13,166,091.61 Deposit, margin 170,042,120.52 174,331,550.53 Not the come-and-go with related parties in statement scope 285,951,275.98 278,716,366.01 Other 29,025,050.65 12,985,941.01 Total 879,330,313.86 823,228,574.05 (2) At end of the year, the major other account payable with account age over one year mainly refers to the deposit and margin. :N/A 34. Non-current liability due within one year Item Balance at year-end Balance at year-begin Long-term loan principal and interest due within one year 40,172,155.56 20,211,488.89 Lease liabilities due within one year 8,650,642.91 10,075,610.19 Total 48,822,798.47 30,287,099.08 35. Other current liabilities Item Balance at year-end Balance at year-begin Pending sales tax 18,915,531.41 21,970,126.59 Factoring fees payable 218,335.59 635,142.92 Bill recovery 38,674.50 Total 19,172,541.50 22,605,269.51 277 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 36. Long term borrowings (1) Category of long term borrowings Category Amount at year-end Amount at year-begin Loan in mortgage 108,000,000.00 148,000,000.00 Total 108,000,000.00 148,000,000.00 (2) Long-term borrowings at year-end Foreig Borrowing n Interest Amount at year- Amount at year- Loan from Returning day day curren rate end (RMB) begin(RMB) cy EIBC (Export-Import Bank) Anhui Province 2020/3/26 2026/11/25 RMB 4.105% 98,000,000.00 98,000,000.00 Branch note1 EIBC (Export-Import Bank) Anhui Province 2019/12/23 2026/11/25 RMB 4.005% 10,000,000.00 50,000,000.00 Branch note2 Total 108,000,000.00 148,000,000.00 Note 1: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - Fixed Assets)" with the Export-Import Bank of China Anhui Branch, the Company's fixed assets and intangible assets are used as mortgage for a long-term loan under the contract. And withdrawal of 98,000,000.00 yuan on March 26, 2020. The term of the loan is from March 26, 2020 to November 25, 2026, the interest rate of the loan is determined according to the market quotation rate of the loan with a term of more than 5 years reduced by 0.195%, which fluctuates annually, and the amount of the loan is 98,000,000.00 yuan. The balance at the end of the year is RMB 98,000,000.00. Note 2: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - Fixed Assets)" with the Export-Import Bank of China Anhui Branch, the Company's investment real estate, fixed assets and intangible assets are used as mortgage for the loan. The term of the loan is from December 23, 2019 to November 25, 2026, the interest rate of the loan is determined according to the market quotation rate of the loan with a term of more than 5 years reduced by 0.195%, which fluctuates annually, and the amount of the loan is 100,000,000.00 yuan. According to the repayment plan agreed with the bank, the Company has repaid 50,000,000.00 yuan. It plans to repay 20,000,000.00 yuan on June 25, 2024 and repay 20,000,000.00 yuan on December 25, 2024, a total of 40,000,000.00 yuan has been reclassified to non-current liabilities due within one year. The balance at the end of the year is RMB 10,000,000.00. 37. Lease liability Item Balance at year-end Balance at year-begin Lease liability 43,488,292.70 28,164,287.97 278 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year-end Balance at year-begin Total 43,488,292.70 28,164,287.97 38. Long-term payable Item Balance at year-end Balance at year-begin Special payable 800,347.84 1,145,286.48 Total 800,347.84 1,145,286.48 38.1Special payable Balance at Increase this Decrease this Balance at year- Item Reason year-begin year year end Special funds for Technology plan technological 1,145,286.48 344,938.64 800,347.84 project in transformation from Zhongshan City Zhongshan Changhong 39. Long-term wage payable Item Balance at year-end Balance at year-begin Dismissal welfare 11,417,181.82 10,790,859.64 Total 11,417,181.82 10,790,859.64 According to the internal early retirement policy, the long-term payable dismissal welfare bears by the Company up to year-end amounting to 11,417,181.82 yuan 40. Accrual liability Item Balance at year-end Balance at year-begin Reason Product quality guarantee note1 29,939,918.07 30,965,097.36 Product warranty note2 Litigation matters 2,114,872.32 1,720,534.42 Total 32,054,790.39 32,685,631.78 Note 1: Product quality deposit is the maintenance expense provided by the Company under the national policy. Note2: In November 2021, Zhejiang Teruisi Pharmaceutical Inc. filed a lawsuit against Zhongke Meiling for the "Cold Storage Design, Equipment Purchase and Installation Construction Contract". Currently, quality of the subject under the contract is being authenticated by a third party engineering quality appraisal agency, the initial start-up operation test is now completed. Zhongke Meiling intends to maintain the cold storage project, and the estimated maintenance cost is 1,720,534.42 yuan. The management has provided a total estimated liability of 394337.90 yuan for other business lawsuits. 41. Deferred income 279 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Balance at year- Increase this Decrease this Balance at year- Item Reason begin year year end Government subsidies--- subsidies of development 127,493,219.76 2,744,400.00 28,197,396.49 102,040,223.27 project Government subsidies--- 33,520,692.15 2,583,421.09 30,937,271.06 subsidies of Relocation Total 161,013,911.91 2,744,400.00 30,780,817.58 132,977,494.33 42. Share capital Change during the year (+、-)) Bon Shares Balance at year- New Items us transferred Ending balance begin shares Other Subtotal shar from capital issued e reserve Total 1,029,923,715.00 1,029,923,715.00 shares 43. Capital reserve Item Opening balance Increase this period Decrease this period Ending balance Share premium 2,758,450,812.90 990,446.53 2,757,460,366.37 Other capital 48,043,091.40 48,043,091.40 reserve Total 2,806,493,904.30 990,446.53 2,805,503,457.77 This year's decrease is the difference between the consideration paid by Sichuan Changhong Air Conditioning Co., Ltd., a subsidiary, to Hongyuan Dineng Heat Pump Technology Co., Ltd. and the net asset value it should be entitled to when it is transferred. 44. Other comprehensive income 280 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Current Year Less: written in other comprehe nsive Less Account income in : Belong to Belong to Balance at before Balance at Item previous Incom parent minority year-begin income tax year-end period and e tax company shareholder in Current carried expens after tax s after tax Year forward to es gains and losses in current period Other comprehensive income re-divided into gains/losses Conversion difference - - arising from 20,881,462.6 433,908.69 177,100.58 256,808.11 20,704,362.0 foreign currency 3 5 financial statement - - Total 20,881,462.6 433,908.69 177,100.58 256,808.11 20,704,362.0 3 5 45.Special reserves Amount at year- Amount at year- Item Increase this year Decrease this year begin end Safety production costs 2,467,205.78 31,277,872.27 22,498,266.14 11,246,811.91 Total 2,467,205.78 31,277,872.27 22,498,266.14 11,246,811.91 Note: This year's increase refers to the work safety expenses accrued according to the notice issued by the Ministry of Finance on November 21, 2022 on printing and distributing the Administrative Measures for the Extraction and Use of Work Safety Expenses of Enterprises (CZ [2022] No.136). 46. Surplus reserves Amount at year- Amount at year- Item Increase this year Decrease this year begin end Statutory surplus reserve 325,610,989.32 35,834,503.34 361,445,492.66 281 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount at year- Amount at year- Item Increase this year Decrease this year begin end Discretionary surplus 115,607,702.16 115,607,702.16 reserve Total 441,218,691.48 35,834,503.34 477,053,194.82 47. Retained profit Item Current Year Last Year Prior year-end balance 909,082,037.66 734,129,724.00 Add: adjustment from undistributed profit at year-begin 167,328.13 Including: retroactive adjustment by Accounting Standards for Business Enterprise change of accounting policy 167,328.13 Correction of former material error Change of combination scope under common control Balance at year-begin 909,249,365.79 734,129,724.00 Add: net profit attributable to shareholders of parent 741,038,108.54 244,538,734.49 company for this year Less: withdraw of statutory surplus reserve 35,834,503.34 18,090,235.08 withdraw of discretionary surplus reserve Withdraw of general risk provision Dividend payable for ordinary shares 92,693,134.35 51,496,185.75 Dividend of ordinary shares transferred to share capital Balance at year-end 1,521,759,836.64 909,082,037.66 48. Operation income and operation cost (1) Operation income and operation cost Current Year Last Year Item Income Cost Income Cost Main 24,022,148,584.59 20,725,758,770.77 20,037,625,297.52 17,325,069,941.59 business Other 225,530,385.97 140,797,026.96 177,594,894.68 119,460,293.73 business Total 24,247,678,970.56 20,866,555,797.73 20,215,220,192.20 17,444,530,235.32 (2)The decomposition information of operation income and operation cost 282 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Current Year Last Year Type Income Cost Income Cost Product Including: Refrigerator, 9,088,215,517.67 7,356,737,998.45 7,664,575,851.66 6,346,869,532.77 Freezer Air-conditioning 11,566,440,523.53 10,531,949,090.31 9,781,896,262.72 8,770,265,668.68 Washing machine 1,329,017,674.88 1,088,175,149.78 753,549,855.38 607,693,261.63 Small household appliances and 1,849,440,139.12 1,616,157,130.27 1,605,989,880.27 1,408,047,190.15 kitchen and bathroom Other 189,034,729.39 132,739,401.96 231,613,447.49 192,194,288.36 Total 225,530,385.97 140,797,026.96 177,594,894.68 119,460,293.73 Area Domestic 16,662,953,598.39 14,285,021,891.36 15,038,808,862.28 12,912,826,550.40 Overseas 7,584,725,372.17 6,581,533,906.37 5,176,411,329.92 4,531,703,684.92 Total 24,247,678,970.56 20,866,555,797.73 20,215,220,192.20 17,444,530,235.32 (3)Information related to performance obligations Types of Nature of Amount quality the goods Main expected to be Time to perform assurance Material payment that the responsibl refunded to Item performance provided by terms Company e person customers obligations the Company promises to or not undertaken by and related transfer the Company obligations When the Advance payment Income customer obtains Product or payment from sales the control right Goods Yes No quality collected according of goods of relevant assurance to credit period commodities Income Advance payment When customers from or payment obtain related Service Yes No providing collected according services services to credit period (4)Information related to the transaction price allocated to the remaining performance obligations At the end of this year, the income corresponding to the performance obligations that have been signed but not yet fulfilled or not yet fully fulfilled is RMB 146,656,929.43, of which RMB 71,158,765.31 is expected to be 283 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) recognized in 2024, RMB 44,426,066.33 in 2025 and RMB 31,072,097.79 in 2026. 49. Business tax and extra charges Item Current Year Last Year Treatment fund for abandon electrics & electronics 83,954,161.00 71,372,020.99 City construction tax 30,495,241.79 19,846,779.61 Extra charge for education and local education 23,205,904.33 14,548,311.46 surcharge Real estate tax 21,776,071.72 20,864,349.97 Stamp duty 20,180,028.35 16,752,387.61 Land use tax 7,842,009.24 7,416,201.59 Water fund 7,621,811.71 7,714,862.00 Other 20,049.33 14,546.06 Total 195,095,277.47 158,529,459.29 50. Sales expense Item Current Year Last Year Salary, extra charges and labor service expenses 651,978,914.10 615,364,927.31 Market support expenses 299,976,638.54 286,466,250.64 National three guarantees expense 180,682,812.32 203,466,003.55 Shipping and Installation expense 170,138,310.70 120,722,067.28 Storage lease expenses 99,071,460.40 75,019,986.16 Insurance 34,456,542.89 14,913,058.66 Travelling expenses 28,183,664.81 19,660,517.01 Business activity expenses 16,817,763.84 14,837,137.30 Service 16,695,232.90 10,978,315.77 Vehicle expenses 13,438,130.42 14,012,267.21 Depreciation expenses 8,123,955.41 8,478,387.85 Advertising expenses 6,372,451.62 2,981,861.74 Meeting organization expenses 2,064,895.82 1,570,396.34 House-lease expenses 2,511,983.50 2,977,765.70 Other expenses 40,973,660.36 37,426,048.95 Total 1,571,486,417.63 1,428,874,991.47 51. Administration expense Item Current Year Last Year Salary and social insurance etc. 233,339,461.44 226,027,033.59 284 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Year Last Year Depreciation 22,633,551.78 22,139,475.42 Amortized intangible assets 17,934,318.50 18,097,815.58 Software use 11,618,336.70 9,031,826.08 Water and electricity fee 6,418,796.52 6,326,879.79 Business activities fee 6,202,767.07 4,538,295.97 Property insurance 6,081,059.31 7,095,645.48 Safety in production 4,936,056.08 Domestic travelling fee 3,868,355.25 2,808,407.52 Board fees 1,799,460.97 2,816,281.49 Office fee 1,479,151.05 1,589,370.87 Inspection and authentication fee 994,648.51 738,557.52 Other expenses 43,828,831.31 57,376,883.06 Total 361,134,794.49 358,586,472.37 52. R&D expenses Item Current Year Last Year Salary and social insurance etc. 288,740,055.61 237,572,628.90 Amortized intangible assets 128,124,567.42 126,373,792.68 Trial fee of R&D 51,097,363.34 72,478,568.76 Cost of mould 27,618,399.05 26,976,366.44 Technical development cost 25,289,565.25 27,806,672.78 Depreciation 19,699,982.53 19,226,603.19 Inspection and authentication fee 17,003,613.90 14,858,218.53 Domestic travel expenses 3,481,605.92 1,657,904.73 Other expenses 35,865,338.24 33,432,791.48 Total 596,920,491.26 560,383,547.49 53. Financial expenses Item Current Year Last Year Interest expenditure 30,088,976.40 30,470,512.88 Less: Interest income 191,805,963.97 159,034,499.30 Add: exchange loss 54,709,775.56 88,349,559.02 Handling fee expenditure 13,550,845.06 12,041,091.12 Discount expenditure -27,106,971.67 -29,168,764.27 Interest expense on lease liability 1,819,942.13 2,127,420.51 285 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Year Last Year Total -118,743,396.49 -55,214,680.04 54. Other income Item Current Period Last Period Advanced manufacturing value-added tax deduction 56,552,366.70 The deferred income is transferred 30,780,817.58 28,913,326.92 Enterprise support funds 8,719,711.00 12,463,661.00 Financial awards 26,985,794.09 33,430,854.69 Immediate VAT refund after collection 9,415,201.81 15,709,711.47 Other 2,121,570.46 1,723,142.63 Export credit insurance subsidy 2,892,195.29 3,415,565.07 Stable job subsidy 2,427,836.46 4,920,730.76 Foregn economic and trade developmnet promotion 4,884,590.00 791,337.43 funds Other tax returns 1,104,918.88 896,261.56 Talent incentives and technologycal transformation 723,700.00 292,000.00 subsidies Total 146,608,702.27 102,556,591.53 55. Investment income Item Current Year Last Year Long-term equity investment income by equity method 19,133,884.40 20,440,095.97 Disposition of the investment income generated by the long-term 22,760.28 equity investment Investment income obtained from the disposal of trading financial -27,576,564.08 6,873,207.97 assets Income from financial products 6,357,755.52 5,066,526.99 Investment income of other non-current financial assets during -22,489,932.70 -24,385,552.13 holding period The termination of income recognition for financial assets measured 20,057,997.72 14,763,930.55 by amortized cost Interest income from debt investment during the holding period 12,932,690.90 10,260,629.45 Total 8,438,592.04 33,018,838.80 56. Changes in fair value gains Item Current Period Last Period Trading financial assets -18,424,141.04 39,663,502.48 286 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Period Last Period Including :Income of fair value changes from derivative -18,424,141.04 39,663,502.48 financial instruments Trading financial liability 9,732,511.92 -29,657,252.37 Including: Income of fair value changes from derivative 9,732,511.92 -29,657,252.37 financial instruments Other non-current financial assets 16,256,733.17 14,131,251.16 Total 7,565,104.05 24,137,501.27 57. Credit impairment loss Item Current Year Last Year Account receivable bad debt loss -81,543,127.20 -162,588,905.74 Other account receivable bad debt loss -78,256.93 -1,857,860.25 Total -81,621,384.13 -164,446,765.99 58. Assets impairment loss Item Current Year Last Year Loss on inventory valuation -36,433,848.76 -37,286,366.52 Impairment loss on intangible assets -18,200,119.46 -17,091,365.68 Impairment loss on fixed assets -1,347,703.96 Impairment loss on contractual assets -500,429.38 -770,687.90 Total -55,134,397.60 -56,496,124.06 59. Income from assets disposal Item Current Period Last Period Income from non-current assets disposal 1,336,229.47 27,602,023.18 Including: income classify to assets ready for sale income not classify as to assets ready for sale 1,336,229.47 27,602,023.18 Including: Income from fixed assets disposal 1,262,436.25 15,371,880.61 Income from intangible assets disposal 12,230,142.57 Income from the disposal of the right to use the assets 73,793.22 Total 1,336,229.47 27,602,023.18 60. Non-operation revenue 287 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount reckoned into non-recurring Item Current Period Last Period gains/losses in Current Period Income of penalty 6,025,864.71 1,731,499.87 6,025,864.71 other 8,634,718.46 7,517,843.40 8,634,718.46 Total 14,660,583.17 9,249,343.27 14,660,583.17 61. Non-operating expenditure Amount reckoned into non- Item Current Period Last Period recurring gains/losses in Current Period Non-current asset retirement 5,218,522.66 1,467,133.15 5,218,522.66 losses Public welfare donation 1,106,759.24 1,611,780.39 1,106,759.24 expenditure Penalty and late fee 16,611.86 724,538.98 16,611.86 Other 1,390,889.55 4,684,312.46 1,390,889.55 Total 7,732,783.31 8,487,764.98 7,732,783.31 62. Income tax expenses Item Current Year Last Year Current income tax 32,617,426.64 15,647,487.73 Deferred income Tax 3,530,163.62 -6,082,140.92 Total 36,147,590.26 9,565,346.81 63. Other comprehensive income Found more in 44. Other comprehensive income in V 64. Items of cash flow statement (1) Cash related to business activities 1) Cash received from other activities relating to operation Item Current Year Last Year Collection of restriction fund 80,505,851.57 Government subsidy and rewards 53,964,201.06 72,305,923.02 Cash deposit, deposit 37,414,693.10 28,044,590.50 Receive compensation 2,526,647.13 21,715,660.93 288 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Year Last Year Rental income 6,783,387.55 6,448,934.35 Other 9,262,930.96 9,902,572.90 Total 109,951,859.80 218,923,533.27 2) Cash paid for other activities relating to operation Item Current Year Last Year Operating out of cash expenses 695,985,203.09 603,739,218.72 Petty cash, deposit, Cash deposit 64,908,861.57 52,116,545.02 Total 760,894,064.66 655,855,763.74 (2) Cash related to Investment activities 1) Important cash received related to investment activities Item Current Period Last Period Structural deposits 1,120,000,000.00 600,000,000.00 Large deposit certificate 170,000,000.00 320,000,000.00 Total 1,290,000,000.00 920,000,000.00 2)Important cash payable related to investment activities Item Current Period Last Period Structural deposits 1,120,000,000.00 600,000,000.00 Large deposit certificate 360,000,000.00 660,000,000.00 Total 1,480,000,000.00 1,260,000,000.00 3) Cash received from other activities relating to investment Item Current Period Last Period Interest income arising from bank savings 188,869,688.96 161,501,486.59 Cash deposit 1,194,923.87 391,416.52 Income of forward exchange settlement 20,632.41 Other 190,064,612.83 161,913,535.52 Total 4) Cash paid for other activities relating to investment Item Current Period Last Period Loses of forward exchange settlement 115,756,169.35 135,747,164.72 Bid bond refund 500,000.00 Total 116,256,169.35 135,747,164.72 ( 3) Cash related to financing activities 1) Cash received from other activities relating to financing 289 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Year Last Year Recover restricted funds 351,333,854.83 Meiling series (internal) bill discounting 23,536,567.33 fundraising 19,497,591.35 Total 370,831,446.18 23,536,567.33 2) Cash paid for other activities relating to financing Item Current Year Last Year Turn into limited funds 71,212,010.57 713,173,457.92 Distribusigned to shareholders at the time of cancellation 22,652,073.83 Meiling series (internal) bill discounting 8,257,294.29 fundraising 14,747,852.83 Lease liability principal and interest 9,788,959.46 13,924,674.35 Service fees of financing intermediary agencies 5,205,286.50 Payment for B share repurchase 737,262.35 Financing lease 175,323.88 Intermediary service fee 65,600.34 36,327.91 Total 89,323,864.66 770,652,259.57 3) Changes in liabilities arising from fund-raising activities Increase this year Decrease this year Amount at Amount at Item Non Cash Non Cash year-begin Cash changes Cash changes year-end changes changes Short-term 674,143,916 1,923,365,052 1,469,708,179.7 1,134,102,419 6,301,630.00 Loans .67 .15 9 .03 Long-term 148,000,000 40,000,000.0 108,000,000.0 loans .00 0 0 Lease 28,190,817. 21,994,649.75 6,697,174.83 43,488,292.70 liabilities 78 Lease 10,075,610. liabilities due 8,667,439.78 9,788,959.46 303,447.60 8,650,642.91 19 within 1 year Long-term 20,211,488. due within 1 46,832,440.27 26,871,773.60 40,172,155.56 89 year Other payable- 4,978,994.1 93,176,662.27 92,771,248.99 5,384,407.44 Dividend 6 payable 290 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Increase this year Decrease this year Amount at Amount at Item Non Cash Non Cash year-begin Cash changes Cash changes year-end changes changes 885,600,827 1,923,365,052 176,972,822.0 1,599,140,161.8 47,000,622.4 1,339,797,917 Total .69 .15 7 4 3 .64 (4)Statement of cash flow in net amount Financi Basis for adopting Item Relevant facts al net presentation impact As a legal entity, the Company reports the gains or losses of Forward foreign The reported foreign exchange contract delivery to the receipt of other cash exchange information is more No related to investment activities and the payment of other cash delivery intuitive related to investment activities As a legal entity, the Company reports the current year's change of restricted funds to the receipt of other cash related to fund- Restricted funds Rolling reflection No raising activities and the payment of other cash related to fund- raising activities As a legal entity, the Company reclassifies the current year's Meiling change in Meiling (internal) notes discount undue, from cash (internal) notes received from sales of goods, service provision/cash paid from Rolling reflection No discount fund- purchase of goods, and receipt of services to other received cash raising amount related to fund-raising activities/other paid cash related to fund- raising activities (5)It does not involve the current cash receipts and payments, but affects the financial situation of the enterprise or may affect the cash flow of the enterprise in the future Item Amount incurred this year Notes endorsement transfer 640,130,128.86 Total 640,130,128.86 65.Supplementary of the consolidated cash flow statement (1)Supplementary of cash flow statement Item Current Period Last Period 1. Net profit is adjusted to cash flow of operation 773,202,644.17 277,098,462.51 activities: Net profit 55,134,397.60 11,726,938.40 Credit impairment loss 81,621,384.13 164,446,765.99 Add: provision for depreciation of assets 136,755,781.73 176,173,704.39 291 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Period Last Period Depreciation of fixed assets, consumption of oil gas 230,677,716.05 223,767,338.55 assets and depreciation of productive biological assets Amortization of intangible assets 148,644,583.21 151,246,185.43 Depreciation of right-of-use assets 8,872,309.05 12,973,556.19 Loss from disposal of fixed assets, intangible assets and -1,336,229.47 -27,602,023.18 other long term assets (gain is listed with “-”) Loss from discarding fixed assets as useless (gain is 5,081,404.15 1,001,047.96 listed with “-”) Loss from change of fair value (gain is listed with “-”) -7,565,104.05 -24,137,501.27 Financial expense (gain is listed with “-”) -105,187,269.88 -38,087,006.89 Investment loss (gain is listed with “-”) -8,438,592.04 -33,018,838.80 Decrease of deferred income tax assets (increase is listed -774,799.73 -9,142,184.15 with “-”) Increase of deferred income tax liabilities (decrease is 4,304,963.35 3,080,311.85 listed with “-”) Decrease of inventories (increase is listed with “-”) -322,601,024.21 -347,146,382.60 Decrease of operational accounts receivable (increase is -788,860,958.90 343,604,791.45 listed with “-”) Increase of operational accounts receivable (decrease is 2,009,567,881.61 674,838,435.05 listed with “-”) Other 80,505,851.57 Net cash flow arising from operation activities 2,082,343,305.04 1,465,155,748.06 2. Major investment and financing activities that do not involve cash receipts: Conversion of debt into capital Switching Company bonds due within one year financing lease of fixed assets 3. Net change in cash and cash equivalents: Balance at period-end of cash 8,391,128,635.87 6,113,222,069.76 Less: Opening balance of cash 6,113,222,069.76 5,840,194,931.57 Add: Balance at period-end of cash equivalents Less: Opening balance of cash equivalents Net increase in cash and cash equivalents 2,277,906,566.11 273,027,138.19 (2) No net cash paid for subsidiary obtained in Current Period (3) No net cash received from subsidiary disposal in Current Period (4) Cash and cash equivalent 292 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Balance at year-end Balance at year-begin Cash 8,391,128,635.87 6,113,222,069.76 Including: cash in stock 12,727.56 21,243.42 Bank deposits available for payment at any time. 8,387,387,613.83 6,113,166,932.47 Other monetary fund available for payment at any time 3,728,294.48 33,893.87 Cash equivalents Including: bond investment due within 3 months Balance of cash and cash equivalents at year-end 8,391,128,635.87 6,113,222,069.76 Including: using the restricted cash and cash equivalents of the parent company or subsidiary of the group (5)This year, there is no limited scope of use but it is still listed in cash and cash equivalents (6)Monetary funds that are not cash and cash equivalents Reasons other than cash and Item This year's amount Last year's amount cash equivalents Judicial freezing of funds due to 27,715,825.21 6,093,218.00 Limited use contract disputes Guarantee and acceptance bill 410,939,463.45 712,683,914.92 Limited use deposit Interest receivable 10,901,601.18 7,422,576.45 Interest accrual Total 449,556,889.84 726,199,709.37 — 66. Foreign currency (1) Foreign currency Ending foreign currency Item Exchange rate Ending RMB converted balance balance Monetary fund — — 127,204,596.01 Including: USD 2,869,080.48 7.0827 20,320,836.32 Euro 4,329,141.62 7.8592 34,023,589.82 PKR 758,800,389.64 0.0251 19,045,889.78 Won 1,255,283,246.00 0.005514 6,921,631.82 IDR 20,769,792,551.00 0.000461 9,574,874.37 PHP 15,100,323.00 0.1279 1,931,331.31 AUD 7,298,581.51 4.8484 35,386,442.59 Account receivable — — 1,067,169,191.65 Including: USD 116,294,473.22 7.0827 823,678,865.48 Euro 9,957,190.73 7.8592 78,255,553.39 PKR 410,308,696.41 0.0251 10,298,748.28 293 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Ending foreign currency Item Exchange rate Ending RMB converted balance balance IDR 92,408,396,216.76 0.000461 42,600,270.66 AUD 19,577,081.00 4.8484 94,917,519.52 AUD 29,205,109.07 0.1279 3,735,333.45 Won 2,481,483,655.00 0.005514 13,682,900.87 Other account receivable — — 346,351.02 Including: PKR 5,378,768.53 0.0251 135,007.09 IDR 321,790,412.15 0.000461 148,345.38 PHP 492,561.00 0.1279 62,998.55 Account payable — — 31,543,031.60 Including: USD 132,118.93 7.0827 935,758.75 Euro 13,419.32 7.8592 105,465.12 PKR 525,713,593.23 0.0251 13,195,411.19 IDR 17,884,398,462.83 0.000461 8,244,707.69 PHP 70,849,795.53 0.1279 9,061,688.85 Other account payable — — 14,949,132.09 Including: PKR 281,823,229.08 0.0251 7,073,763.05 IDR 16,602,444,208.24 0.000461 7,653,726.78 PHP 1,732,934.00 0.1279 221,642.26 (2) Foreign operational entity The foreign operational entity of the Company was Changhong Ruba Trading Company (Private) Limited, mainly operates in Lahore, Pakistan; Recording currency is Pakistan Rupi. CHANGHONG MEILING ELECTRIC INDONESIA, PT, mainly operates in Jakarta; recording currency is IDR. CH-Meiling International (Philippines) Inc, mainly operates in Philippines; Recording currency is PHP. 67.Lease (1)The Company as lessee Amount incurred this Amount incurred last Item year year Interest expense of lease liabilities 1,819,942.13 2,127,420.51 Short-term lease expenses with simplified treatment included in 7,381,795.96 2,605,800.01 current profits and losses (2)The Company as lessor 1)Operating lease of the Company as lessor 294 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) In which: income related to variable Item Lease income lease payment not included in lease receipts House building 33,393,088.86 Equipment 3,266,344.81 Total 36,659,433.67 2)Financial lease of the Company as lessor: N/A. (3)The Company does not recognize the profit and loss of financial lease sales as a manufacturer or distributor. VI.R&D expenditure Item Amount incurred this year Amount incurred last year Salary, social security, etc 332,685,385.50 289,045,189.33 Depreciation expenses 20,217,498.97 19,595,950.42 Other expenses 36,033,763.45 33,999,384.05 Domestic travel expenses 3,760,534.31 1,719,347.59 Inspection and certification fees 19,974,458.24 19,809,891.42 R&D and trial production costs 83,379,401.74 90,075,741.11 Amortization of intangible assets 128,124,567.42 126,373,792.68 Mold costs 93,918,099.78 86,300,051.96 technological development expense 26,648,055.81 29,217,316.19 Total 744,741,765.22 696,136,664.75 Among them: Expensed R&D 596,920,491.26 560,383,547.49 expenses Capitalized R&D expenditure 147,821,273.96 135,753,117.26 1.R&D projects eligible for capitalization Increased amount this year Decreased amount this year Transfer to Year-beginning Internal Other Recognized as current Year-end Item balance development increase intangible profits and balance expenditure assets losses Development of ice washing 60,386,906.45 58,420,870.74 2,132,644. 59,134,989. 59,672,788.12 technology 84 07 295 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Increased amount this year Decreased amount this year Transfer to Year-beginning Internal Other Recognized as current Year-end Item balance development increase intangible profits and balance expenditure assets losses Development of air 41,761,484.12 89,400,403.22 86,880.59 38,042,546. conditioning 93,119,341.07 27 technology 2,219,525. Total 102,148,390.57 147,821273.96 152,792,129.1 97,177,535. 43 9 34 (1)Material capitalized R&D projects: N/A. (2)There is no provision for impairment of development expenditure this year. VII. Changes of consolidation rage 1. Enterprise combined are not under the same control:N/A 2. Enterprise combined under the same control:N/Al 3. Reversed takeover: N/Al 4. Disposal of subsidiary: N/A 5.Other change 5.1 Subsidiary liquidated Difference Amount of between the investment Basis disposal price gain/loss for Equit and the share of transferred Point o determi Share y net assets of the from other Equity at which ning the disposa dispo subsidiary at the comprehensive Subsidiary disposal the point at l ratio sal consolidate income that price control which (%) meth financial related to is lost the od statement equity control corresponding to investment of is lost the disposal of original the investment subsidiary Liqui Comple datio ted the Jinan Xiangyou Novemb n& liquidati Electric Appliances 100.00 er cance on & Marketing Co., Ltd 11,2023 llatio cancella n tion 296 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Difference Amount of between the investment Basis disposal price gain/loss for Equit and the share of transferred Point o determi Share y net assets of the from other Equity at which ning the disposa dispo subsidiary at the comprehensive Subsidiary disposal the point at l ratio sal consolidate income that price control which (%) meth financial related to is lost the od statement equity control corresponding to investment of is lost the disposal of original the investment subsidiary Liqui Comple datio ted the Wuhan Meizhirong n& March liquidati Electric Appliances 100.00 cance 2023 on & Marketing Co., Ltd llatio cancella n tion VIII. Equity in other entity 1. Equity in subsidiary (1) Composition of the enterprise group Shareholding Registered Main Registra Business ratio(%) Acquire Subsidiary capital(RM office tion nature Direct Indire by B0'000) place place ly ctly Investm Zhongke Meiling Cryogenic Manufacturin 47.45 ent 9,673.09 Hefei Hefei Technology Co., Ltd g and sales 12 establis hment Investm Sichuan Hongmei Intelligent Mianyan Mianya Software ent 500.00 100 Technology Co., Ltd. g ng development establis hment Investm Mianyang Meiling Refrigeration Mianyan Mianya Manufacturin ent 10,000.00 95 5 Co., Ltd. g ng g and sales establis hment Jiangxi Meiling Electric Appliance Jingdezhe Jingdez Manufacturin Investm 5,000.00 98.75 1.25 Co., Ltd n hen g and sales ent 297 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Shareholding Registered Main Registra Business ratio(%) Acquire Subsidiary capital(RM office tion nature Direct Indire by B0'000) place place ly ctly establis hment Investm Hefei Meiling Wulian Technology Software ent 1,000.00 Hefei Hefei 100 Co., Ltd5) development establis hment Enterpri se combin Hefei Meiling Electric Appliances ed 2,428.68 Hefei Hefei Sales 100 Marketing Co., Ltd6) under the same control Enterpri se combin Changhong Meiling Ridian Zhongsha Zhongs Manufacturin 99.03 ed 8,300.00 Technology Co., Ltd n han g and sales 61 under the same control Investm CHANGHONG MEILING ent 4,027.20 Jakapta Jakapta Sales 100 ELECTRIC INDONESIA,PT8) establis hment Investm ChanghongRubaTradingCompany Pakista ent 8,308.98 Pakistan Sales 60 (Private)Limited 9) n establis hment Enterpri se combin Sichuan Changhong Air- Mianyan Mianya Manufacturin 85,000.00 100 ed conditioner Co., Ltd g ng g and sales under the same 298 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Shareholding Registered Main Registra Business ratio(%) Acquire Subsidiary capital(RM office tion nature Direct Indire by B0'000) place place ly ctly control Enterpri se combin Zhongshan Changhong Electric Zhongsha Zhongs Manufacturin ed 33,400.00 90 10 Co., Ltd n han g and sales under the same control Enterpri se combin Hefei Meiling Group Holdings Manufacturin ed not 8,000.00 Hefei Hefei 100 Limited g and sales under the same control Enterpri se combin Meiling Equator Household Manufacturin ed not 2,479.32 Hefei Hefei 100 Appliance (Hefei) Co., Ltd g and sales under the same control Enterpri se combin Manufacturin ed not Hefei Equator Appliance Co., Ltd 1,200.00 Hefei Hefei 100 g and sales under the same control Investm Ground Energy Heat Pump Tech. Mianyan Mianya Manufacturin ent 5,000.00 85 Co., Ltd. g ng g and sales establis hment 299 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Shareholding Registered Main Registra Business ratio(%) Acquire Subsidiary capital(RM office tion nature Direct Indire by B0'000) place place ly ctly Investm Ground Energy Heat Pump Tech. Zhongsha Zhongs Manufacturin ent 4,500.00 85 (Zhongshan) Co., Ltd. n han g and sales establis hment Investm Guangzhou Changhong Trading Guangzh Guangz ent 100.00 Sales 100 Co., Ltd. ou hou establis hment Investm Hebei Hongmao Daily Appliance Manufacturin 99.03 ent 500.00 Handan Handan Technology Co., Ltd. g and sales 61 establis hment Investm Anhui Tuoxing Technology Co., Manufacturin 47.45 ent 1,000.00 Hefei Hefei Ltd. g and sales 12 establis hment Investm CH-Meiling.International Philippin Philippi ent 688.91 Sales 100 (Philippines) Inc. es nes establis hment Investm Hefei Changhong Meiling Life ent 5,000.00 Hefei Hefei Sales 70 Appliances Co., Ltd. establis hment Investm Anhui Ling'an Medical Equipment Manufacturin 47.45 ent 5,000.00 Lu'an Lu'an Co., Ltd g and sales 12 establis hment Note: 1) Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling), the predecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company, was established on 29 October 2002 by joint contribution from the Company and Technical Institute of Physics and Chemistry, CAS (“TIPC”), with registered capital of 60 million yuan upon the establishment, among which, the Company made capital contribution of 42 million yuan (including the assets in specie at the consideration of35,573,719.70 yuan as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with issuance of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of 6,426,280.30 yuan) accounting for 70% of the aforesaid registered capital, and TIPC made 300 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) capital contribution of 18 million yuan with intangible assets of such value (namely the single compressor mixture industrial low temperature refrigeration technology) as evaluated by Jingzhongzi Assets Appraisal Co., Ltd. with issuance of the Appraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid registered capital. The paid-in of the above registered capital has been verified by Huazheng Accounting Firm by issuance of the Assets Verification Report (HZYZ (2002) No. B157) dated 16 October 2002. In October 2014, according to the relevant provision under the Management Rules on Application of State Owned Assets by Central Business Organs, TIPC transferred the 30% equity interests held by it in Zhongke Meiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing (Beijing) Assets Management Co., Ltd (hereinafter referred to as Zhongke Xianxing) which would perform management over the operating assets of TIPC. Upon consideration and approval at the 37th session of the 7thBOD of Hefei Meiling Co., Ltd, it is agreed to waive the pre-emptive right. On 10 August 2015, all the founders signed the Founder Agreement of Zhongke Meiling Cryogenic Technology Company Limited, pursuant to which, they decided to change the firm type of Zhongke Meiling Cryogenic Technology Company Limited to a joint stock company. Based on the net assets of 96, 431,978.25 yuan as audited by Xinyong Zhonghe CPA as of 30 June 2015, an aggregate of 65,000,000 shares have been converted at the proportion of 1:0.67, which are to be held by the original shareholders according to their respective entitlement. In case that the net assets exceed registered capital, the balance shall be recorded in capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered capital and paid-in thereof in respect of the stock reform, and issued Assets Verification Report (XYZH/2015CDA40161). The Company registered industrial and commercial information on 11 September 2015. On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke Meiling Cryogenic Technology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the Company; Zhongke Meiling Company issued 3,150,000 shares to specific investors by the non-public offering of shares at 1.63 yuan per share. The current capital increase was verified by the No.[XYZH/2016CDA40294]capital verification report issued by ShineWing CPA (special general partnership). After the completion of the issuance, the share capital of Zhongke Meiling Company increased to 68,150,000 shares and the Company's shareholding ratio was 66.76%. On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic Technology Co., Ltd for year of 2017 was deliberated and approved by 4th session extraordinary of shareholders general meeting of 2017. Zhongke Meiling offering 490,300 shares to specific investors by way of privately placement, which has 1.72 yuan per share in amount. The capital increasement has been verified by the No. [XYZH/2017CDA40324]capital verification report issued by ShineWing CPA (special general partnership). After the completion of shares placement, stock of the Company increased to 68,640,300 shares and 66.87% held by the Company. On September 9, 2019, the 10th Meeting of the 2ndBOD and the Fourth Extraordinary Shareholders’ Meeting reviewed and approved the Proposal on the First Stock Issuance Plan of Zhongke Meiling Cryogenic Technology Co., Ltd. in 2019 (Revised Version), the number of shares to be issued this time does not exceed 3,907,900 shares (including 3,907,900 shares), the issue price is not less than 2.16 yuan per share, and the raised funds are expected 301 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) to not exceed 8,441,064.00 yuan (including 8,441,064.00 yuan). After the completion of the additional issue, the company’s share capital increased to 72,548,200 shares, which was verified by [No. XYZH/2020CDA30002] “Capital Verification Report” issued by Shine Wing Certified Public Accountants (LLP), and the Company’s shareholding ratio was 63.2683%. On September 16, 2022, the Management Committee of China Securities Regulatory Commission issued the Reply on Approving the Registration of Zhongke Meiling Cryogenics Co.,Ltd. to Public Offering of Shares to Unspecified Qualified Investors (ZJXK [2022] No. 2182), which approved the registration application of Zhongke Meiling to Public Offering of Shares to Unspecified Qualified Investors. The price of this issue is RMB 16.00/share, the initial number of shares issued is 24,182,734, and the actual net fund raised is RMB 364,573,394.95. By September 30, 2022, all the above-mentioned raised funds had been received and verified by the Capital Verification Report [XYZH/No. 2022CDAA70693] issued by ShineWing Certified Public Accountants (special general partnership). After the issuance, the share capital of Zhongke Meiling is 96,730,934 shares, and the shareholding ratio of the Company is 47.4512%. 2) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) was established on Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling Refrigeration Co., Ltd., being approved by the Industrial and Commerce Bureau of Peicheng District, Mianyang City. The company owes registered capital of 5 million yuan, including 4.95 million yuan contributed by Changhong Meiling Company in cash, accounted for 99% of the registered capital; Mianyang Meiling Refrigeration Co., Ltd. contributed 50000 yuan in cash with 1% of the register capital occupied. The above mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No. [2014] B039 issued by Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares of Hongmei Intelligent, held by the Company has transferred to Sichuan Changhong AC Co., Ltd., after transferred, Changhong AC has 99% equity of Hongmei Intelligent, the Company has no shares of Hongmei Intelligent directly.In October 2023, Changhong Air Conditioning and Mianyang Meiling transferred their respective shares to the Company. After the transfer, the Company held 100% shares of Hongmei Intelligent. 3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling), a limited liability company jointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Its registered capital and paid-in capital were 50 million yuan upon establishment, of which, the Company invested 45 million yuan, accounting for 90% of the registered capital; Zhongke Meiling Company invested 5 million yuan, accounting for 10% of the registered capital. The capital receipt was verified by the verification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public Accountants. On 19 January 2011, the Company increase 50 million yuan in capital of Mianyang Meiling, of which 95 million yuan invested by the Company, a 95% of total register capital while 5 million yuan invested by Zhongke Meiling, a 5% of total capital occupied. The paid-in capital has been verified by Capital Verification Report [ XYZH/2010CDA6040 ] from Chengdu Branch of Shinewing CPA CO., Ltd. In 2011, Zhongke Meiling entered into “Equity Transfer Agreement” with Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity of Mianyang Meiling held by Zhongke Meiling was transferred to Jiangxi 302 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Meiling Refrigerator. In September 2013, Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Electric Appliance Co., Ltd., than 5 percent equity was transfer to Jiangxi Meiling Electric Appliance. 4) Jiangxi Meiling Electric Appliance Co., Ltd. (hereinafter referred to as Jiangxi Meiling Electric Appliance) was a limited liability company jointly established by the Company and Mianyang Meiling on 23 May 2011. Register capital of the company totally as 50 million yuan, 49.375 million yuan invested by the Company, 98.75% in total register capital while 0.625 million yuan invested by Mianyang Meiling, a 1.25% in total register capital occupied. The initial investment 10.50 million yuan was received dated 13 May 2011 with 10 million yuan from the Company and 0.5 million yuan from Mianyang Meiling. Rest of the capital shall be invested fully within 2 years after the joint ventures established according to capital requirement. The initial investment capital were verified by the Capital Verification Report [JXKYZi (2011) No. 090] issued from Jingdezhen Xingci CPA Co., Ltd. Second capital 39.5 million yuan was fully funded on 28 July 2011, the Company contributed 39.375 million yuan while Mianyang Meiling Company invested 125,000 yuan, the contributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134] issued from JDZ Xingci CPA Co., Ltd. 5) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) was established dated 21 January 2019 with registered capital of 10 million yuan, and it is the subsidiary of the Company with fully-owned establishment. On 19 March 2019 and December 11,2023, paid in capital is 6 million yuan and 4 million yuan, The cumulative investment of 10 million yuan, accounting for 100% of its registered capital 6) Hefei Meiling Nonferrous Metal Products Co., Ltd. (hereinafter referred to as Nonferrous Metal) was the Sino-foreign joint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore Kim Shin Development Co., Ltd., which have been originally approved by the [WJMWFZZ (1996) No.349] of Foreign Trade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million upon establishment, of which, original Meiling Group invested US$ 1.46 million (monetary capital), accounting 50% of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB 0.18 million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim Shin Development Co., Ltd invested US$ 0.876 million (monetary capital), accounting 30% of the registered capital. The above mentioned investment verified by the verification report of [HSWZ (1995) No. 0737], [HSWZ (1996) No. 328] and [HSWZ (1998) No. 088] from Anhui CPAs Co., Ltd. In July 2008, approved by [HWS (2008) No.53] from Foreign Trade Economic Cooperation Bureau of Hefei City, 30% equity and 20% equity held by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively transferred to original Meiling Group Totally. The Company’s register capital came into 24,286,808.00 yuan after transference, and was not the joint- venture any more. 7) Changhong Meiling Ridian Technology Co., Ltd. (hereinafter referred to as Ridian Technology) is a limited liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafter referred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred to as Changhong Motor Transport Company) on May 25, 2016. The registered capital and paid-in capital are 40 million yuan, of which Sichuan Changhong has invested 32 million yuan by monetary capital, accounting for 80% of the registered 303 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) capital; Changhong Motor Transport Company has invested 8 million yuan, accounting for 20% of the registered capital. The official receipts of registered capital have been verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Ridian Technology increased registered capital of 43 million yuan on January 4, 2007, changing from 40 million yuan to 83 million yuan, for the newly increased 43 million yuan, Sichuan Changhong invested 1.8 million yuan, Guangdong Xiongfeng Electric Co., Ltd. invested 40 million yuan, and Kou Huameng and other 9 natural person shareholders invested 1.2 million yuan, at the same time, the shareholders' meeting considered and agreed to transfer the investment of 8 million yuan of Changhong Motor Transport Company to Sichuan Changhong Venture Investment Co., Ltd, the structure of the registered capital after changes was that Sichuan Changhong invested 33.8 million yuan, accounting for 40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million yuan, accounting for 48.19%; Sichuan Changhong Venture Investment Co., Ltd Invested 8 million yuan, accounting for 9.64%; Kou Huameng and other 9 natural person shareholders invested 1.2 million yuan, accounting for 1.45%. The change of registered capital was verified by Zhongshan Promise Accounting Firm [No. ZCHZ (2007)501010]. On February 18, 2009, seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng, after the transfer, the registered capital of Changhong Ridian was still 83 million yuan, the structure of registered capital after changes was that Sichuan Changhong invested 33.8 million yuan, accounting for 40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million yuan, accounting for 48.19%; Sichuan Changhong Venture Investment Co., Ltd invested 8 million yuan, accounting for 9.64%; Hu Zhiheng and other two natural person shareholders invested 1.2 million yuan, accounting for 1.45%. On October 9, 2014, Changhong Ridian held the shareholders meeting which considered and agreed Kou Huameng to transfer its stock rights of total 250,000 yuan which accounts for 0.301% of the Ridian Technology’s registered capital to Sichuan Changhong Venture Investment Co., Ltd at the cost of 317,802 yuan. The other shareholders of the Ridian Technology waived the right of pre-emption. On December 11, 2014, Ridian Technology held the shareholders meeting which considered and agreed Guangdong Xiongfeng Electric Co., Ltd. to transfer its stock rights of total 40 million yuan which accounts for 48.19 % of the company's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 yuan. The other shareholders of the Ridian Technology waived the right of pre-emption. The structure of registered capital after changes was that Sichuan Changhong invested 73.8 million yuan, accounting for 88.92%; Sichuan Changhong Venture Investment Co., Ltd Invested 8.25 million yuan, accounting for 9.94%; Hu Zhiheng and another natural person shareholder invested 950,000 yuan, accounting for 1.14%. On 4 January 2016, Sichuan Changhong and Sichuan Changhong Venture Investment Co., Ltd. transferred total 98.855% equity of the Ridian Technology to the Company. After the transfer, the Company directly holds 98.855% stock rights of Ridian Technology. On 7 April 2020, Ridian Technology convened the shareholders’ meeting, and agreed the Wu Chang yuan to transferred total 0.18% equity of the Ridian Technology to the Company. After the transfer, the Company directly holds 99.0361% stock rights of Ridian Technology. 304 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 8) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as Indonesia Meiling) is a subsidiary established in Indonesia and jointly invested by Zhongshan Changhong and Sichuan Changhong in 2016, the company’s registered capital is 6 million US dollars, of which Zhongshan Changhong subscribed and paid 5.88 million US dollars in cash, accounting for 98% of the registered capital, Changhong Air Conditioning subscribed and paid 120,000 US dollars in cash, accounting for 2% of the registered capital. On 4 July 2017, rests of the 2.94 million US dollars are subscribed by Zhongshan Changhong in line with the agreement. 9) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was a joint venture established by Zhongshan Changhong Appliances Company Limited and RUBA GENERAL TRADING FZE Company (“RUBA”) on 5 August 2011 with the approval from Guangdong Development and Reform Commission by issuance of the Approval Relating to Joint Construction of a Manufacturing and Selling Platform Project in Pakistan by Zhongshan Changhong Appliances Company Limited (YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba Trading Company (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capital to Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at an earlier stage, Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAE RUBA Company invested 2.56 million US dollars, the shares held by both sides remained unchanged. After the capital increase, the company’s registered capital became 12.4 million US dollars, of which Zhongshan Changhong Home Appliances Company Limited invested 7.44 million US dollars in cash, shareholding ratio was 60%, UAE RUBA Company invested 4.96 million US dollars in cash, and shareholding ratio was 40%. In 2017, the shareholder meeting of Zhongshan Changhong Electric Co., Ltd. passed the "Proposal on the Compa ny's Increased Investment in Pakistan Refrigerator Project", agreeing that Zhongshan Changhong and the U AE RUBA company will jointly increase the capital of ChanghongRuba. , the shares held by both parties remain unchanged. After the capital increase, the registered capital of ChanghongRuba is US$13,004,923, of which Zhon gshan Changhong contributed US$7,802,954 in cash, holding 60% of the shares, and RUBA of the United Arab E mirates contributed US$5,201,969 in cash, holding 40% of the shares. 10) Sichuan Changhong Air Conditioning Co., Ltd. (hereinafter referred to as Changhong Air Conditioner), a limited liability company jointly set up by Sichuan Changhong and Changhong Chuangtou, was founded on November 28, 2008. Its registered capital was 200 million yuan upon establishment, of which, Sichuan Changhong invested 298 million yuan ( 210,088,900 yuan invested by monetary capital while 87,911,100 yuan invested by real material), equivalent to 198 million yuan shares, accounting for 99% of the registered capital; and Changhong Chuangtou invested 3 million yuan, accounting for 1% of the registered capital with equivalent of 2 million yuan shares. The registered capital receipt was verified by the verification report [CGYYZ (2008) No. 177] of Sichuan Guang yuan Certified Public Accountants Co., Ltd. and [HLTHYZ (2008) No. 12-006] of Sichuan Henglitai Certified Public Accountants Co., Ltd. In December 2009, the Company obtained 100% equity of Changhong Air- conditioner by consolidated under the same control. In 2017, the Company increased capital of 650 million yuan to 305 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Changhong Air Conditioner, after capital increased, registered capital of Sichuan Changhong comes to 850 million yuan from 200 million yuan, shareholding still counted as 100%. 11) Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong), was the original Guangdong Changhong Electric Co., Ltd., and is a limited liability company jointly set up by Sichuan Changhong and China Minmetals on May 22, 2001. Its registered capital was RMB 80 million upon establishment, of which, Sichuan Changhong invested 72 million yuan, including 69.3 million yuan biding for the estate/non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And its patent use-right of 2.7 million yuan, accounting for 90% of the registered capital; Chine Minmetals invested 8 million yuan in monetary capital accounting 10% of the registered capital. The Company changed its name originally from Guangdong Changhong Electric Co., Ltd in July 2003. In December 2009, the Company obtained 90% equity of Zhongshan Changhong by consolidated under same control. 10% equity held by China Minmetals has been transferred by Changhong Air-conditioner on April 11, 2010. On 25 May 2014, the Company increased 36 million yuan to Zhongshan Changhong, and Changhong AC increased 4 million yuan. In 2016, according to the overseas development strategy of the Company and the development and operation needs of the subsidiaries, the Company and the wholly-owned subsidiary Changhong Air Conditioning have increased capital of 64 million yuan to Zhongshan Changhong according to the existing shareholding ratio, among which the capital increase of the Company was 57.6 million yuan, and the capital increase of Changhong Air Conditioning was 6.4 million yuan. After the completion of this capital increase, the registered capital Zhongshan Changhong shall increase to184 million yuan, the shareholding ratio of the company and Changhong Air Conditioning remained unchanged and was still 90% and 10%, of which the Company invested 165.6 million yuan, accounting for 90% of the registered capital, Changhong Air Conditioning invested 18.4 million yuan, accounting for 10% of the registered capital. In March 2020, in accordance with the Company’s overseas development strategy and the operation and development needs of its subsidiaries, the Company and its wholly- owned subsidiary Changhong Air Conditioning increased capital of 150 million yuan to Zhongshan Changhong according to the existing shareholding ratios, of which the Company increased capital of 135 million yuan, Changhong Air-Conditioning increased capital of 15 million yuan. After the completion of capital increase, the registered capital of Zhongshan Changhong has increased to 334 million yuan. The Company’s and Changhong’s shareholding ratios in Zhongshan Changhong remain unchanged at 90% and 10%, of which the Company funded 300.6 million yuan, accounting for 90% of the registered capital, while Changhong Air Conditioning funded 33.4 million yuan, accounting for 10% of the registered capital. 12) Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group), was the state-owned company originally approved by People’s Government of Hefei Province and established authorized by SASAC of Hefei City. On July 14, 2008, 100% state-owned equity of Meiling Group has freely transferred to Xingtai Holding by Hefei SASAC. Agreement by the approval of < State-owned property agreement transfer from Meiling Group> [ HGZCQ (2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of Meiling Group after partial assets and liabilities separated transferred to the Company from Xingtai Holding as amount of 113.2 million yuan. The re-registration of industrial and commercial procedure for Meiling Group after separated partial assets 306 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) liability has finished on July 28, 2010. The new Meiling Group has register capital of 80 million yuan, and has been verified by the [AD (2010) YZD No. 016] from Anhui Auding CPAs Co., Ltd. 13) Meiling EquatorHousehold Appliance (Hefei) Co., Ltd. (hereinafter referred to as EquatorHousehold Appliance) was the Sino-foreign joint venture jointly set up by original Meiling Group and EQUATOR INVESTMENTS (USA) INC. (EQUATOR for short), which have been approved by the [SWZWFZZ(2004) No.0103] of Approval Certificate of Foreign Enterprise from People’s Government of Anhui Province. Its registered capital was US$ 3 million upon establishment, of which, Sino company invested US$ 2.25 million in machinery equipment, accounting 75% of the registered capital while foreign company invested US$ 0.5 million in monetary capital and US$ 0.25 million in intangible assets, amounting to US$0.75 million, accounting 25% of the registered capital. The above mentioned investment verified by the verification report of [WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. In July 2007, approved by [HWJ (2007) No.136] from Foreign Trade Economic Cooperation Bureau of Hefei City, 25% equity held by EQUATOR transferred to Anhui Meiling Electric Co., Ltd. Totally. The Company’s register capital came into 24,793,200 yuan after transference, and was not the joint-venture any more. 25% equity owned by Anhui Meiling Electric Co., Ltd has been transferred totally to original Meiling Group in July 2009. 14) Hefei Equator Appliance Co., Ltd. (hereinafter referred to as Equator Appliance) was jointly set up by original Meiling Group and Yingkaite Appliance on September 26, 2007. Its register capital was 12 million yuan, among which, original Meiling Group invested 8,670,600 yuan in monetary capital, accounting 72.255% in registered capital; Equator Appliance invested 3,329,400 yuan in the assessment value of intangible assets (land-use right), accounting 27.745% of total registered capital. The investment being verified by [WYAZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. 15) Hong Yuan Ground Energy Heat Pump Technology Co., Ltd. (hereinafter referred to as Hong Yuan Ground Energy) was established on 28 August 2015, it is a limited liability company authorized by Administration for Industry and Commerce of Peicheng District, Mianyang, Sichuan, contributed by Sichuan Changhong Air Conditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyou yuan Technology Development Group Co., Ltd. together. Registered capital amounted as 50 million yuan, including 25.5 million yuan contributed by Changhong Air Conditioner in cash, a 51% in total registered capital; Hengyou yuan Technology Development Group Co., Ltd. invested 24.5 million yuan in cash, a 49% in registered capital. In September 2023, Hengyouyuan Technology Development Group Co., Ltd. transferred its 34% equity of Hongyuan Dineng to Changhong Air Conditioning. After the transfer, Changhong Air Conditioning held 85% equity of Hongyuan Dineng. 16) Hong Yuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.(hereinafter referred to as Hong yuan Zhongshan) was established and invested on 18 July 2017 with registered capital of 15 million yuan, The Hong Yuan Ground Energy Heat Pump Tech. Co., Ltd contributed 1.5 million yuan with own funds and takes 100% in the registered capital.In 2018, the shareholders of the Hong yuan Zhongshan decided to increase capital of 30 million yuan, and contributed by the shareholder Hong Yuan Ground Energy; thus registered capital of Hong yuan Zhongshan up to 45 million yuan 307 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 17)Guangzhou Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was established on 6 Jan. 2017, the wholly-owned subsidiary of Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong) with registered capital of one million yuan 18) Hebei Hongmao Household Appliance Technology Co., Ltd (hereinafter referred to as Hebei Hongmao) was established on 21 July 2017 with registered capital of 5 million yuan. Changhong Ridian invested 5 million yuan by own fund and takes 100% in registered capital. 19) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was established on 20 May 2019 with registered capital of 10 million yuan and it is the subsidiary of Zhongke Meiling with fully- owned establishment. On May 21, 2020 and February 21, 2021, Zhongke Meiling invested RMB 5 million, with a total investment of RMB 10 million, accounting for 100% of its registered capital. 20) CH-Meiling.International (Philippines) Inc. was established on 13 February 2020 in Philippines with registered capital of US$ 1,000,000, takes 100% of the equity. As of December 31,2020, the Company has invested US$ 1,000,000, 21) Hefei Changhong Meiling Life Electric Co., Ltd was established on 24 December 2020, jointly established by the Company and Ningbo Hongling Enterprise Management Partnership (Limited Partnership). the Company contributed 35 million yuan, representing 70% of the equity while 15 million yuan invested by Ningbo Hongling Enterprise Management Partnership (Limited Partnership), a 30% takes in the equity. The paid-in capital contribution from the Company and Ningbo Hongling Enterprise Management Partnership (Limited Partnership) has been completed on January 21, 2021 and on January 18, 2021 respectively. 22) Anhui Ling’an Medical Equipment Co., Ltd. (hereinafter referred to as Ling’an Medical) was established on 4 September 2021, which is a wholly-owned subsidiary of Zhongke Meiling, and registered capital of 10 million yuan. On June 29, 2021, Zhongke Meiling actually contributed 10 million yuan, accounting for 100% of the registered capital. In 2022, the Board of Directors of Zhongke Meiling decided to increase the registered capital by RMB 40 million. On December 30, 2022, the paid-in capital was completed, and the registered capital of Ling'an Medical increased to RMB 50 million. (2) Major non-wholly-owned subsidiary Dividend distributed Balance of Shareholding Gains/losses attributable to to minority Subsidiary minority’s interest at ratio of minority minority in Current Period announced in period-end Current Period Zhongke Meiling 52.5488% 8,474,284.50 9,149,568.12 316,091,458.55 Ground Energy 15.00% 3,572,482.75 10,001,298.99 Ridian Technology 0.9639% 20,397.33 1,356,058.15 Meiling Life 30.00% 17,282,369.68 7,527,442.51 41,938,054.82 Appliances (3) Financial information for major non-wholly-owned subsidiary 308 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Ending balance Subsidiary Current Non-current Current Non-current Total Total assets assets assets liability liability liabilities Zhongke 590,872,333. 734,480,745. 120,874,302. 132,960,772 143,608,411.32 12,086,470.45 Meiling 93 25 44 .89 256,060,078. 283,294,314. 216,616,587. 216,618,988 Ground Energy 27,234,236.22 2,400.97 76 98 41 .38 Ridian 226,657,040. 266,940,994. 125,655,866. 125,948,367 40,283,953.89 292,501.04 Technology 82 71 42 .46 Meiling Life 621,873,116. 622,486,357. 481,523,383. 482,692,841 613,240.68 1,169,458.41 Appliances 90 58 11 .52 (Continued) Opening balance Subsidiary Current Non-current Current Non-current Total Total assets assets assets liability liability liabilities Zhongke 649,452,399. 807,871,608. 190,256,989. 206,733,772. 158,419,208.85 16,476,782.72 Meiling 30 15 79 51 190,767,892. 208,990,348. 158,674,964. 158,889,623. Ground Energy 18,222,456.16 214,658.38 48 64 71 09 Ridian 231,271,013. 273,283,685. 135,113,073. 135,651,967. 42,012,672.36 538,894.36 Technology 10 46 14 50 Meiling Life 559,068,082. 559,292,964. 452,015,872. 452,015,872. 224,882.24 Appliances 42 66 49 49 (Continued) Current Period Subsidiary Total comprehensive Cash flow from Operation income Net profit income operation activity Zhongke Meiling 302,800,718.15 16,126,507.82 16,126,507.82 -9,706,149.56 Ground Energy 564,892,721.56 15,842,650.38 15,842,650.38 56,039,000.87 Ridian Technology 238,871,773.09 2,116,223.21 2,116,223.21 14,725,141.77 Meiling Life 1,660,852,475.77 57,607,898.93 57,607,898.93 77,583,337.61 Appliances (Continued) Last Period Subsidiary Total comprehensive Cash flow from Operation income Net profit income operation activity Zhongke Meiling 406,489,091.83 46,273,692.68 46,273,692.68 -38,010,376.20 Ground Energy 316,282,181.46 6,969,895.59 6,969,895.59 20,156,454.01 309 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Last Period Subsidiary Total comprehensive Cash flow from Operation income Net profit income operation activity Ridian Technology 237,989,059.17 623,419.57 623,419.57 -13,918,903.50 Meiling Life 1,419,586,443.18 40,576,245.84 40,576,245.84 67,906,512.81 Appliances (4) Major limitation on using enterprise group’s assets and liquidate debts of enterprise group: nil (5) Offering financial supporting or other supports for structured entity that included in consolidation statement scope: nil 2. Changes of owner’ equity shares in subsidiary and its impacts: nil Item Ground Energy Total Original ratio of shares held 51% 51% Equity purchased from minority 18,627,553.47 18,627,553.47 Stock issue End-of-term shareholding ratio 85% 85% Equity purchased from minority 19,618,000.00 19,618,000.00 Less: Ratio of the net assets measured by equity ratio while acquiring the subsidiary Equity dilution for shares issuance Balance 990,446.53 990,446.53 Including: Capital public reserve adjusted 990,446.53 990,446.53 3. Equity in joint venture or associate enterprise (1) Major joint venture or associate enterprise Shareholding Accounting ratio(%) treatment for Main Registe Business investment of Joint venture or associate enterprise office r place nature Direc Indire joint venture or place tly ctly associate enterprise Associated companies: Sichuan Zhiyijia Network Technology Mianyan Mianya Sales 50.00 Equity Co., Ltd. g ng (2) Financial information for major Joint venture: nil (3) Financial information for associate enterprise 310 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Sichuan Zhiyijia Network Technology Co., Ltd. Item Balance at year-end/Current Year Balance at year-begin /Last Year Current assets 2,466,521,759.37 3,283,851,057.02 Including: cash and cash equivalent 364,453,302.32 14,808,208.88 Non-current assets 18,519,147.09 5,635,867.44 Total assets 2,485,040,906.46 3,289,486,924.46 Current liability 2,343,467,271.81 3,185,798,119.47 Non-current liability 5,509,063.82 1,632,200.33 Total liabilities 2,348,976,335.63 3,187,430,319.80 Total of net asset 136,064,570.83 102,056,604.66 Minority's interest Equity attributable to shareholder 136,064,570.83 102,056,604.66 of parent company Share of net assets measured by 68,032,285.42 51,028,302.33 shareholding Adjustment --Goodwill 821,877.28 821,877.28 Unrealized profit of the internal downstream transactions Unrealized profit of the internal upstream transactions Other Book value of the equity 51,850,179.61 investment for associate enterprise Fair value of equity investment for the affiliates with consideration publicly Operation income 509,222,643.15 11,137,539,778.84 Financial expenses -34,478,238.96 -50,856,868.09 Income tax expenses 5,834,031.10 -135,812.07 Net profit 37,428,167.10 12,126,330.11 Other Other comprehensive income Total comprehensive income 37,428,167.10 12,126,330.11 Dividend received from associate 1,629,022.64 enterprise in Current Year 311 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (4) Financial summary for non-important Joint venture and associate enterprise Balance at year-end/Current Item Balance at year-begin /Last Year Year Associated companies: Total book value of investment 43,891,649.05 48,534,248.89 Total amount measured by shareholding ratio --Net profit -28,901,875.68 -30,626,025.12 --Other comprehensive income 7,663,003.10 4,165,076.91 -- Total comprehensive income -21,238,872.58 -26,460,948.21 (5) Major limitation on capital transfer ability to the Company from joint venture or affiliates: Nil (6) Excess loss occurred in joint venture or affiliates Hefei Meiling Solar Energy Technology Co., Ltd and ChanghongRubaElectricCompany(Private)Ltd have losses above the quota. (7) Unconfirmed commitment with joint venture investment concerned: Nil (8) Intangible liability with joint venture or affiliates investment concerned: Nil 4. Major conduct joint operation: Nil 5. Structured body excluding in consolidate financial statement: Nil IX.Government subsidies 1.There is no government subsidies recognized by amount receivable at the end of the year 2.Liabilities involving government subsidies Amount included Amount Other Related Accou New subsidy Year-beginning in non- transferred to chang to nting amount this Year-end balance balance operatin other income es this assets/in subject year g income this year year come this year Deferr ed Asset- 161,013,911.91 2,744,400.00 30,780,817.58 132,977,494.33 incom related e 3.Government subsidies included in current profits and losses Accounting subject Amount incurred this year Amount incurred last year Other income 59,275,517.99 73,643,264.61 Deferred income 144,573.97 980,007.31 312 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Accounting subject Amount incurred this year Amount incurred last year Financial expenses 42,100.00 X. Relevant risks re la ted with financial in strument The major financial instruments of the Company include borrowings, account receivables, account payable, Trading financial assets, Trading financial liability, the details of which are set out in Note VI.Risks related to these financial instruments include exchange risks and interest rate risks. The management of the Company controls and monitors the risk exposures to ensure the above risks are under control. 1. Various risk management objectives and policies The Company's goal in risk management is to strike a proper balance between risks and benefits, reduce the negative impact of risks on the Company's operating performance to the lowest level, and maximize the interests of shareholders and other equity investors. Based on this risk management goal, the basic strategy of the Company's risk management is to identify and analyze all kinds of risks faced by the Company, establish an appropriate risk tolerance bottom line and conduct risk management, and timely and reliably supervise all kinds of risks to control the risks within a limited range. (1) Market risk 1) Exchange rate risk The Company pays close attention to the impact of exchange rate changes on the Company. The Company attaches great importance to the study of exchange rate risk management policies and strategies. In order to avoid the exchange rate risk of foreign currency payment and foreign currency collection and settlement income, the Company has signed several forward foreign exchange contracts with banks. The fair value of forward foreign exchange contracts recognized as derivative financial instruments on December 31, 2023 is RMB 7,007,434.77. Changes in the fair value of derivative financial instruments have been included in the profit and loss, and the relevant contents of "V. 56 Income from changes in fair value" in this note. In the meantime, with the constant change in the share of the international market, if there are risks beyond the control of the Company, such as unilateral large changes in the RMB exchange rate, the Company will reduce the risks by adjusting the sales or purchasing strategies. 2) Interest rate risk The Company's interest rate risk arises from bank loans and interest-bearing debts. Financial liabilities with floating interest rate expose the Company to cash flow interest rate risk, while financial liabilities with fixed interest rate expose the Company to fair value interest rate risk. The Company decides the relative proportion of fixed interest rate and floating interest rate contracts according to the market environment at that time. On December 31, 2023, the Company's interest-bearing debts were mainly the fixed-rate loan contracts denominated in RMB, with a total amount of RMB 1,133,967,080.14 ; and the RMB floating-rate loan contracts, with a total amount of RMB 148,000,000.00. The Company's risk of changes in the fair value of financial instruments due to changes in interest rates is mainly related to fixed-rate bank loans. The Company's risk of cash flow changes of financial instruments caused by interest rate changes is mainly related to floating interest rate bank loans. The Company pays close 313 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) attention to the impact of this part of interest rate changes on the Company and attaches importance to the study of interest rate risk management policies and strategies. (2) Credit risk On December 31, 2023, the biggest credit risk exposure that may cause the financial loss of the Company mainly comes from the loss of the Company's financial assets caused by the failure of the other party to the contract and the financial guarantee undertaken by the Company, including: the book amount of the financial assets recognized in the consolidated balance sheet; For financial instruments measured at fair value, the book value reflects their risk exposure, but not the maximum risk exposure, and its maximum risk exposure will change with the change of fair value in the future. In order to reduce the credit risk, the Company set up a special department to determine the credit line, conduct credit approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover overdue creditor's rights. Meanwhile, the Company tries to reduce the impact of credit default of creditor's rights by purchasing credit insurance. In addition, the Company reviews the recovery of each single receivable on each balance sheet date to ensure that sufficient bad debt provision is made for unrecoverable funds. Therefore, the management of the Company believes that the credit risk assumed by the Company has been greatly reduced. The Company's working capital is deposited in the finance company, so the credit risk of working capital is low. The Company has adopted necessary policies to ensure that all sales customers have good credit records. The total amount of the top five accounts receivable is RMB 572,545,992.76, accounting for 28.88% of the accounts receivable at the end of the year, which is dependent on major customers. Except for the top five accounts receivable, the Company has no other major credit risks. (3) Liquidity risk Liquidity risk is the risk that the Company cannot fulfill its financial obligations on the due date. The Company's method of managing liquidity risk is to ensure that there is enough financial liquidity to fulfill the due debts through capital plan management, without causing unacceptable losses or damaging the reputation of the company. According to the requirements of the capital plan cycle, the Company makes a capital plan in advance to ensure that there is sufficient capital when the debt is due. The management of the Company monitors the use of bank loans and ensures compliance with the loan agreement. In the meantime, it conducts financing negotiations with financial institutions to maintain a certain credit line and reduce liquidity risk. 2.Hedging (1)The Company carries out hedging business and risk management The Company uses forward foreign exchange contracts to hedge the risk of exchange rate fluctuations. The Co mpany designates the purchased forward foreign exchange contracts as hedging instruments and processes them in accordance with the hedging accounting method. The hedged items of unrecognized asset and liability items such as unconfirmed firm commitments are evaluated on the balance sheet date. The Company uses ratio analysis meth od to evaluate the effectiveness of hedging. The Company conducts qualified hedging business and applies hedging accounting 314 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (2)The Company conducts qualified hedging business and applies hedging accounting Hedging adjustment of Impact of hedging Book value related accumulated fair value of Hedging effectiveness and accounting on the to hedged items Item hedged items included in source of part with invalid Company's and hedging the book value of hedged hedging financial instruments items recognized statements Fair value hedging Exchange rate risk - Financial expenses - Forward foreign Exchange losses; exchange contracts and 610,421,375.18 — -90,977,968.76 Investment income; unrecognized firm Change of income fair value commitments, etc. 3.Transfer of financial assets (1)Classification of transfer modes Nature of Amount of transferred Derecognize Transfer mode transferred Judgment basis of derecognition financial assets d or not financial assets Notes Not Almost all its risks and rewards, endorsement/ Notes receivable 38,674.50 derecognize including the risk of default related to Notes d it, are retained discount Notes endorsement/ Receivable Derecognize Almost all its risks and rewards have 2,505,643,801.34 Notes financing d been transferred discount Accounts Derecognize Almost all its risks and rewards have Factoring 5,401,255,213.11 receivable d been transferred Total 7,906,937,688.95 (2)Financial assets that are derecognized due to transfer Ways of financial assets Amount of financial assets Gains or losses related to Item transfer derecognized derecognition Notes endorsement/Notes Receivable financing 2,505,643,801.34 -11,479,703.09 discount Accounts receivable Factoring 5,401,255,213.11 -20,643,418.20 Total — 7,906,899,014.45 -32,123,121.29 (3) Financial assets that continue to be involved in asset transfer 315 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Amount of liabilities Amount of assets formed Item Mode of asset transfer formed by continuous by continuous involvement involvement Notes endorsement/Notes Notes receivable 38,674.50 discount Other current liabilities Notes restoration 38,674.50 — Total 38,674.50 38,674.50 - On December 31, 2023, the book value endorsed by the Company to suppliers for settlement of accounts payable was RMB 38,674.50. The Company believes that it has retained almost all its risks and rewards, including the risk of default related to it, so it continues to fully recognize its related liabilities. XI. Fair va lue d isclo sure 1. Asset and liability measured by fair value at end of Current Period and fair value measurement level Fair value at period-end Items 1st level 2nd level 3rd level Total I. Continuous fair value — — — — measurement (i) Trading financial assets 39,236,447.63 39,236,447.63 1.Financial assets measured at fair value and whose changes are 39,236,447.63 39,236,447.63 included in current gains/losses Including: Derivative financial 39,236,447.63 39,236,447.63 assets (ii) Other non-current financial 105,194,079.19 568,945,436.29 674,139,515.48 assets (iii) Receivables financing 1,641,858,740.34 1,641,858,740.34 Total assets continuously 39,236,447.63 105,194,079.19 2,210,804,176.63 2,355,234,703.45 measured at fair value (iv) Trading financial liability 32,229,012.86 32,229,012.86 1. Financial liabilities measured by fair value and with variation 32,229,012.86 32,229,012.86 reckoned into current gains/losses Including: Derivative financial 32,229,012.86 32,229,012.86 liability Total liabilities continuously 32,229,012.86 32,229,012.86 measured at fair value 2. The basis for determining the market price of continuous and non-continuous first-level fair value measurement items 316 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) The company's fair value measurement items are futures contracts and foreign exchange options. The market price of futures contracts is determined based on the closing price of the futures contract at the end of the period; the market price of foreign exchange options is determined based on the quotation of contract products of the foreign exchange options at the end of the period. 3. Qualitative and quantitative information on the valuation techniques used and important parameters for continuous and non-continuous second-level fair value measurement items The fair value measurement items are long-term investments in the fund company. For long-term investments in fund companies, the assessed book value can represent the best estimate of fair value within the scope. 4. Qualitative and quantitative information on the valuation techniques used and important parameters for continuous and non-continuous third-level fair value measurement items The items with fair value measurement refer to the investment of Sichuan Changhong Group Finance Co., Ltd and Huishang Bank Co., Ltd. As the unlisted equity instrument, the fair value are estimated using a range of valuation models, the assumptions used are not supported by observable market prices or interest rates. We believes that the fair value and their changes estimated by valuation techniques are reasonable and are the most appropriate values at the balance sheet date. XII. Rela ted par ties a nd rela ted transa ction (I) Relationship of related parties 1. Controlling shareholder and ultimate controller Share- Voting Registra Controlling shareholder and ultimate Business holding rights ratio tion Registered capital controller nature ratio in the in the place Company Company Sichuan Changhong Electric Co., Mianya Manufacture 4,616,244,222.00 27.36% 27.36% Ltd. ng and sales (1) Controlling shareholder and ultimate controller Sichuan Changhong Electronics Holding Group is the controlling shareholder of Sichuan Changhong Electric Co., LTD, and the SASAC Mianyang office holds 90% equity interests of Sichuan Changhong Electronic Holding Group, which means that SASAC Mianyang office is the ultimate controller of the Company. (2) Register capital and change thereof of controlling shareholder Increase this Decrease Controlling shareholder Opening balance Ending balance period this period Sichuan Changhong Electric Co., Ltd. 4,616,244,222.00 4,616,244,222.00 317 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (3) Shares held by the controlling shareholder and its changes on equity Amount of shares held Shareholding ratio Controlling shareholder Ratio at Ratio at period- Ending balance Opening balance period-end beginning Sichuan Changhong Electric Co., 281,832,434.00 281,832,434.00 27.36% 27.36% Ltd. 2. Subsidiary Found more in Note “VIII. 1 (1) Enterprise group composition” 3. Joint venture and associated enterprise Other Joint venture and associated enterprise that have related transactions occurred with the Company in Current Period or occurred in last period, and with balance results: Joint venture and associated enterprise Relationship with the company Changhong Ruba Electric Company (Private) Ltd. Associated enterprise of subsidiary Zhongshan Changhong Associated enterprise of subsidiary Changhong Air- Chengdu Guigu Environmental Tech. Co., Ltd conditioner Associated enterprise of subsidiary Changhong Air- Hong Yuan Ground Energy Heat Tech. Co., Ltd conditioner Associated enterprise of subsidiary Changhong Air- Sichuan Tianyou Guigu Technology Co., Ltd conditioner Associated enterprise of the Company, has the same Sichuan Zhiyijia Network Technology Co., Ltd. controlling shareholder and actual control of the Company 4. Other related party Other related party Relationship with the company Mianyang Haili Appliance Co., Ltd. Associated enterprise of controlling shareholder Sichuan Hongran Green Energy Co., Ltd. Associated enterprise of controlling shareholder Sichuan Changxin Refrigeration Parts Co., Ltd. Associated enterprise of controlling shareholder Associated enterprise of other enterprise that have the same Sichuan Baiku Technology Co., Ltd controlling shareholder Associated enterprise of other enterprise that have the same Sichuan Hongyu Metal Manufacturing Co., Ltd. controlling shareholder Control by same controlling shareholder and ultimate CHANGHONG ELECTRIC MIDDLE EAST FZCO controller Control by same controlling shareholder and ultimate Changhong Europe Electric s.r.o controller CHANGHONG (HK) TRADING LIMITED Control by same controlling shareholder and ultimate 318 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Other related party Relationship with the company controller Control by same controlling shareholder and ultimate CHANGHONG.ELECTRIC.(AUSTRALIA) PTY.LTD. controller Control by same controlling shareholder and ultimate Orion.PDP.Co.,Ltd controller Control by same controlling shareholder and ultimate PT.CHANGHONG ELECTRIC INDONESIA controller Control by same controlling shareholder and ultimate Chengdu Changhong Electronic Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Guangdong Changhong Electronics Co., Ltd. controller Control by same controlling shareholder and ultimate Guangyuan Hongcheng Industrial Co., Ltd. controller Control by same controlling shareholder and ultimate Guangyuan Changhong Electronic Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Hefei Changhong Industrial Co., Ltd. controller Control by same controlling shareholder and ultimate 081 Electronic Group Co., Ltd. controller Control by same controlling shareholder and ultimate Mianyang Hongshang Real Estate Co., Ltd. controller Control by same controlling shareholder and ultimate Mianyang Huafeng Hulian Technology Co., Ltd. controller Mianyang Science & Technology City Big Data Technology Control by same controlling shareholder and ultimate Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Aichuang Science & Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Ailink Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Ansifei Technology Co., Ltd. controller Associated enterprise of other enterprise that have the same Sichuan Baiku Technology Co., Ltd controlling shareholder Control by same controlling shareholder and ultimate Sichuan Hongmofang Network Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Hongwei Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Hongxin Software Co., Ltd. controller 319 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Other related party Relationship with the company Control by same controlling shareholder and ultimate Sichuan Huafeng Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Jiahong Industry Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Kuaiyidian Electric Appliance Service Chain Co., Ltd controller Control by same controlling shareholder and ultimate Sichuan Qineng Zhongzheng Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Qiruik Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Qisai Microelectronics Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Package Printing Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Power Source Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Electronic Products Co., Ltd. controller Sichuan Changhong Gerun Environmental Protection Tech. Control by same controlling shareholder and ultimate Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong International Hotel Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Jineng Sunshine Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Group Finance Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Jijia Fine Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Jiahua Information Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Jichuang Lithium Technology Co., LTD controller Control by same controlling shareholder and ultimate Sichuan Changhong Precision Electronics Tech. Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Minsheng Logistics Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Moulding Tech. Co., Ltd. controller Sichuan Changhong Device Technology Co., Ltd. Control by same controlling shareholder and ultimate 320 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Other related party Relationship with the company controller Control by same controlling shareholder and ultimate Sichuan Changhong Network Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Property Service Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong New Energy Technology Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Xinwang Technology Co., Ltd. controller Sichuan Changhong Intelligent Manufacturing Technology Control by same controlling shareholder and ultimate Co., Ltd. controller Control by same controlling shareholder and ultimate Sichuan Changhong Real Estate Co., Ltd. controller Control by same controlling shareholder and ultimate Yibin Hongxing Electric Co., Ltd. controller Control by same controlling shareholder and ultimate Yuanxin Financial Lease Co., Ltd. controller Control by same controlling shareholder and ultimate Changhong International Holdings (Hong Kong) Co., Ltd. controller Control by same controlling shareholder and ultimate Changhua Huayi Compressor Co., Ltd. controller Control by same controlling shareholder and ultimate Zhongjiu Shining Medical Technology Co., Ltd. controller (ii) Related transactions 1. Purchasing commodity Current Year Approved Last year tradingquota Whether the (In 10 ((In 10 (In 10 Related party Content trading inmit thousand is exceeded thousand thousand yuan) yuan) yuan) Purchasing Sichuan Changhong Model Technology Co., Ltd. 78,955.55 100,000.00 No 80,947.69 commodity Purchasing Changhong Huayi Compressor Co., Ltd. 56,361.04 54,000.00 Yes 45,173.47 commodity Purchasing Sichuan Changxin Refrigeration Parts Co., Ltd. 53,476.76 53,050.78 commodity Sichuan Changhong Jijia Fine Co., Ltd. Purchasing 47,006.81 65,000.00 No 45,767.42 321 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Current Year Approved Last year tradingquota Whether the (In 10 ((In 10 (In 10 Related party Content trading inmit thousand is exceeded thousand thousand yuan) yuan) yuan) commodity Purchasing Mianyang Haili Appliance Co., Ltd 36,490.77 10,109.13 commodity Purchasing Guangdong Changhong Electronics Co., Ltd. 34,336.31 65,000.00 No 33,985.13 commodity Purchasing Sichuan Aichuang Technology Co., Ltd. 16,847.00 20,000.00 No 11,551.33 commodity Purchasing Sichuan Changhong Package Printing Co., Ltd. 11,012.12 20,000.00 No 13,066.04 commodity Changhong International Holdings (Hong Kong) Purchasing 5,500.00 12,000.00 No 510.85 Co., Ltd. commodity Sichuan Changhong Electric Holdings Group Purchasing 3,715.78 15,000.00 No Co., Ltd. commodity Sichuan Changhong Electronic Products Co., Purchasing 2,761.52 4,000.00 No 2,546.79 Ltd. commodity Purchasing Sichuan Aoku Technology Co., Ltd. 2,758.52 15,000.00 No 764.15 commodity Sichuan Changhong Precision Electronics Tech. Purchasing 2,510.14 4,500.00 No 2,570.75 Co., Ltd. commodity Purchasing ChanghongRubaElectricCompany (Private) Ltd. 1,234.06 6,640.82 commodity Purchasing Sichuan Ailian Technology Co., Ltd. 1,231.98 5,000.00 No 913.94 commodity Purchasing Sichuan Zhiyijia Network Technology Co., Ltd. 806.22 8,000.00 No 530.29 commodity Sichuan Changhong Appliance Technology Co., Purchasing 797.63 8,000.00 No 768.89 Ltd. commodity Purchasing Sichuan Changhong Electric Co., Ltd. 753.21 8,000.00 No 417.80 commodity Purchasing Hefei Changhong Industrial Co., Ltd. 714.92 8,000.00 No 394.74 commodity Purchasing Sichuan Hongran Green Energy Co., Ltd. 145.41 commodity Sichuan Changhong New Energy Technology Purchasing 20.18 15,000.00 No 4.31 Co., Ltd. commodity 322 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Current Year Approved Last year tradingquota Whether the (In 10 ((In 10 (In 10 Related party Content trading inmit thousand is exceeded thousand thousand yuan) yuan) yuan) Purchasing 081 Electronic Group Co., Ltd. 5.30 8,000.00 No commodity Purchasing Sichuan Hongwei Technology Co., Ltd. 4.72 8,000.00 No commodity Purchasing Sichuan Changhong International Hotel Co., Ltd. 3.23 15,000.00 No 1.17 commodity Purchasing Sichuan Jiahong Industrial Co., Ltd. 2.80 15,000.00 No 8.25 commodity Purchasing Sichuan Hongyu Metal Manufacturing Co., Ltd. 1.47 commodity Sichuan Kuaiyidian Electric Appliance Service Purchasing 0.18 8,000.00 No 0.12 Chain Co., Ltd commodity Purchasing Sichuan Changhong Power Source Co., Ltd. 0.18 8,000.00 No commodity Sichuan Changhong Intelligent Manufacturing Purchasing 0.05 15,000.00 No 1.62 Technology Co., Ltd. commodity Chengdu Guigu Environment Technology Co., Purchasing 22.19 Ltd. commodity Total 357,540.13 309,747.67 2. Accept the services Whethe r the Approved trading trading Related party Content Current Year Last Year quota limit is exceed ed Sichuan Changhong Minsheng Logistics Accept the 683,224,664.94 820,000,000.00 No 616,571,560.92 Co., Ltd. services Sichuan Service Exp. Appliance Service Accept the 318,330,631.13 450,000,000.00 No 300,207,670.49 Chain Co., Ltd. services Sichuan Changhong Moulding Tech. Co., Accept the 40,943,864.06 100,000,000.00 No 21,996,492.76 Ltd. services Sichuan Hongxin Software Co., Ltd. Accept the 13,208,179.25 100,000,000.00 No 10,867,739.17 323 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Whethe r the Approved trading trading Related party Content Current Year Last Year quota limit is exceed ed services Sichuan Qiruik Technology Co., Ltd. Accept the 9,901,242.40 150,000,000.00 No 8,525,543.51 services Accept the Sichuan Changhong Jijia Fine Co., Ltd. 7,801,048.46 100,000,000.00 No 10,671,879.96 services Accept the Sichuan Jiahong Industry Co., Ltd. 5,580,266.42 150,000,000.00 No 7,421,624.51 services Accept the Sichuan Changhong Electric Co., Ltd. 3,886,724.22 100,000,000.00 No 4,882,453.51 services Sichuang Changhong Electric Holdings Accept the 2,834,748.30 150,000,000.00 No 1,954,498.90 Group Co., Ltd. services Sichuan Changxin Refirgeration Part Co., Accept the 2,113,071.18 8,889,532.68 Ltd. services Accept the Sichuan Aichuang Technology Co., Ltd. 1,371,321.88 150,000,000.00 No 1,069,829.75 services Accept the Guangdong Changhong Electric Co., Ltd. 1,112,606.43 100,000,000.00 No 1,223,519.69 services Sichuan Changhong International Hotel Co., Accept the 736,015.39 150,000,000.00 No 351,928.96 Ltd. services Sichuan Changhong Gerun Environmental Accept the 325,332.17 150,000,000.00 No 59,745.71 Technology Co., Ltd. services Accept the Sichuan Changhong Electric Part Co., Ltd. 275,044.71 100,000,000.00 No services Sichuan Changhong Property Service Co., Accept the 145,611.44 150,000,000.00 No 114,522.42 Ltd. services Sichuan Zhiyijia Network Technology Co., Accept the 139,286.01 100,000,000.00 No 155,202.18 Ltd. services Sichuan Changhong Intelligent Accept the 94,339.62 150,000,000.00 No 73,130.53 Manufacturing Technology Co., Ltd. services Accept the Orion.PDP.Co.,ltd 50,097.44 150,000,000.00 No services Sichuan Changhong Network Technology Accept the 30,517.92 100,000,000.00 No 24,891.99 Co., Ltd. services Sichuan Ailian Technology Co., Ltd. Accept the 10,754.72 150,000,000.00 No 324 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Whethe r the Approved trading trading Related party Content Current Year Last Year quota limit is exceed ed services Accept the Sichuan Hongwei Technology Co., Ltd. 6,920.35 100,000,000.00 No services Chengdu Gugu Environment Technology Accept the 124,778.76 Co., Ltd. services Sichuan Changhong Appliance Technology Accept the 81,652.50 Co., Ltd. services Total 1,092,122,288.44 995,268,198.90 3. Sales of goods Current Period Last Period Related party Content (in 10 thousand (in 10 thousand Yuan) Yuan) Sichuan Zhiyijia Network Technolgy Co., Ltd. Sales of goods 728,895.73 683,645.83 CHANGHONG(HK)TRADINGLIMITED Sales of goods 69,999.52 35,986.86 CHANGHONGELECTRIC(AUSTRALIA)PTY.LTD. Sales of goods 17,630.27 16,831.82 Changhong International Holdings (Hong Kong) Co., Ltd. Sales of goods 11,246.60 10,146.95 Changhong Europe Electric s.r.o Sales of goods 10,299.23 1,376.83 Orion.PDP.Co.,ltd Sales of goods 4,478.34 5,156.73 Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 654.81 704.59 Sichuan Aichuang Technology Co., Ltd. Sales of goods 407.43 2.19 Sichuan Changhong Intelligent Manufacturing Technology Co., Ltd. Sales of goods 258.76 Sichuan Changhong Electric Co., Ltd. Sales of goods 225.21 138.77 Sichuan Changhong Jiechuang Lithium battery Technology Co., Ltd. Sales of goods 114.78 Sichuan Tianyou Guigu Technology Co., Ltd. Sales of goods 96.18 206.70 Sichuan Changhong Minsheng Logistic Co., Ltd. Sales of goods 79.93 254.19 Chengdu Guigu Environment Technology Co., Ltd. Sales of goods 43.78 53.43 Guangyuan Changhong Electric Technology Co., Ltd. Sales of goods 24.10 15.00 Hong Yuan Ground Energy Heat Tech. Co., Ltd. Sales of goods 23.32 571.43 Sichuan Aoku Technology Co., Ltd. Sales of goods 21.93 23.01 Sichuan Changhong Model Technology Co., Ltd. Sales of goods 21.18 68.44 Guangdong Changhong Electric Co., lTD. Sales of goods 20.78 10.59 Sichuan Baiku Technology Co., Ltd. Sales of goods 19.20 64.39 325 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Current Period Last Period Related party Content (in 10 thousand (in 10 thousand Yuan) Yuan) Sichuan Changhong Appliance Technology Co., Ltd. Sales of goods 14.81 10.46 Zhongjiu Shining Medical Technology Co., Ltd. Sales of goods 14.57 Sichuan Qineng Zhongzheng Technology Co., Ltd. Sales of goods 9.85 Yibin Hongxing Electric Co., Ltd. Sales of goods 8.67 Sichuan Changhong Real Estate Co., Ltd. Sales of goods 6.11 9.72 Sichuan Hongmofang Network Technology Co., Ltd. Sales of goods 6.06 Sichuan Changhong Power Source Co., Ltd. Sales of goods 5.46 Sichuan Qisai Microelectronics Co.,Ltd. Sales of goods 4.99 Sichuan Changhong Jija Fine Co., Ltd. Sales of goods 2.68 6.20 Sichuan Changhong Precision Electronic Technology Co., Ltd Sales of goods 1.08 Sichuan Jiahong Industry Co., Ltd. Sales of goods 0.84 Sichuan Ailian Technology Co., Ltd. Sales of goods 0.78 Sichuan Changhong Electric Holdings Group Co., Ltd. Sales of goods 0.60 42.38 Sichuan Changhong Property Service Co., Ltd. Sales of goods 0.46 Sichuan Qiruik Technology Co., Ltd. Sales of goods 0.27 0.31 Sichuan Ansifei Technology Co., Ltd. Sales of goods 0.01 2.42 CHANGHONG ELECTRIC MIDDLE EAST FZCO Sales of goods 1,725.97 Changhong Ruba Electric Company (Private) Ltd. Sales of goods 1,032.08 Yuanxin Financing Lease Co., Ltd. Sales of goods 245.87 Sichuan Huafeng Technology Co., Ltd. Sales of goods 35.31 Changhong Huayi Compressor Co., Ltd. Sales of goods 7.26 Mianyang Hongsheng Real Estate Co., Ltd. Sales of goods 2.56 Sichuan Hongxin Software Co., Ltd. Sales of goods 0.11 Total 844,638.32 758,378.40 4. Providing services Related party Content Current Year Last Year Sichuan Changhong Electric Co., Ltd. Providing services 11,395,693.06 2,271,754.66 Sichuan Aichuang Technology Co., Ltd. Providing services 4,743,474.93 -242,246.63 Sichuan Service Exp. Appliance Service Chain Co., Provide the services 2,315,536.37 1,977,927.75 Ltd. Sichuan Changhong Jiechuang Lithium Battery Providing services 2,277,747.12 57,269.68 Technology Co., Ltd. Sichuan Changhong Model Technology Co., Ltd. Providing services 1,390,026.86 339,008.37 Changhong Huayi Compressor Co., Ltd. Provide the services 1,343,950.04 2,049,559.70 Yuanxin Financing Lease Co., Ltd. Providing services 907,791.40 2,843,225.41 326 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Related party Content Current Year Last Year Guangdong Changhong Electric Co., Ltd Providing services 627,354.91 819,840.18 Sichuan Huafeng Technology Co., Ltd. Provide the services 464,234.00 442,842.31 Sichuan Changhong Minsheng Logistics Co., Ltd. Providing services 379,007.97 215,817.23 Mianyang Huafeng Hulian Technology Co., Ltd. Providing services 349,753.68 88,192.89 Sichuan Changhong Network Technology Co., Ltd. Provide the services 268,020.00 Sichuan Changhong Property Service Co., Ltd. Providing services 259,029.87 171,595.00 Sichuan Zhiyijia Network Technology Co., Ltd. Providing services 185,395.50 952,679.40 Sichuan Changhong Xinwang Technology Co., Ltd Provide the services 128,670.00 Sichuan Changhong Jija Fine Co., Ltd. Provide the services 127,547.47 83,244.16 Sichuan Changhong Appliance Technology Co., Ltd. Providing services 124,018.93 93,760.05 Sichuan Qineng Zhongzheng Technology Co., Ltd. Providing services 108,865.14 Sichuan Qiruik Technology Co., Ltd. Provide the services 95,653.62 1,332.00 Sichuan Hongwei Technology Co., Ltd. Providing services 69,735.85 46,490.57 Sichuan Changhong International Hotel Co., Ltd. Providing services 65,714.90 34,555.53 Sichuan Changhong Real Estate Co., Ltd. Provide the services 45,992.16 Sichuan Qisai \Microelectonics Co., Ltd. Providing services 44,593.58 Sichuan Changhong Xingwang Technology Co., Ltd. Providing services 16,670.00 Chengdu Guigu Environment Technology Co., Ltd. Provide the services 10,061.17 263,625.23 Sichuan Changhong Electric Part Co., Ltd. Providing services 7,200.00 3,600.00 Sichuan Changhong Electric Group Co., Ltd. Providing services 6,742.60 311,964.22 Sichuan Aoku Technology Co., Ltd. Provide the services 4,456.25 156,191.31 Sichuan Changhong Precision Electronic Technology Providing services 4,320.00 4,050.00 Co., Ltd Hefei Changhong Industry Co., Ltd. Providing services 42.50 3,457.50 Sichuan Changxin Refrigeration Part Co., Ltd. Provide the services 229,524.66 081 Electronic Group Co., Ltd. Providing services 93,124.78 Guangyuan Hongcheng Industry Co., Ltd. Providing services 45,871.56 Sichuan Ansifei Technology Co., Ltd. Providing services -2,685.82 Total 27,750,629.88 13,355,571.70 Businesses between the Company and its connected persons are generally conducted under market operation rules as if they were the same as other business counterparties. For price of sale or purchase and provision of other labor service between the Company and its related parties, the state pricing is applicable if the pricing do exists; in case of absence of such state pricing, price is determined under market price; in case of absence of such market price, price is determined by both parties at actual cost plus reasonable expenses; for some special services, the price of which cannot be determined under the rule of cost plus expense, the price shall be determined by both parties by negotiation. 327 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 5. Related rental (1) Rent out Leasing income in Leasing income Lessor Lessee Type of assets Current Period in Last Period Changhong Sichuan Changhong Moulding Tech. Apartments, warehouses, 2,956,810.97 2,666,842.20 Meiling Co., Ltd. factories Changhong warehouse, apartment, Sichuan Changhong Jijia Fine Co., Ltd. 950,642.38 893,341.66 Meiling forklift, warehouse Changhong Sichuan Changhong Minsheng Logistics apartment, office 206,115.96 181,355.96 Meiling Co., Ltd. Changhong Sichuan Zhiyijia Network Technology Apartment 188,256.88 188,256.88 Meiling Co., Ltd. Changhong Sichuan Service Exp. Appliance Service Apartments, Offices, 162,376.19 184,560.00 Meiling Chain Co., Ltd. Forklifts Changhong Apartments, warehouses, Hefei Changhong Industrial Co., Ltd. 159,792.74 611,142.15 Meiling forklifts Changhong Sichuan Aoku Technology Co., Ltd. Warehouse 43,392.81 9,467.90 Meiling Changhong Sichuan Ailink Technology Co., Ltd. Warehouse 39,014.00 51,093.26 Meiling Changhong Changhong Huayi Compressor Co., Ltd. Warehouse 5,811.32 Meiling Changhong Sichuan Hongxin Software Co., Ltd. Apartments 4,400.00 Meiling Changhong Sichuan Aichuang Science & Warehouse 3,496.76 1,877.88 Meiling Technology Co., Ltd. Changhong Sichuan Changhong Precision Apartments 1,105.00 63,600.00 Meiling Electronic Technology Co., Ltd Changhong Sichuan Changhong Moulding Tech. Workshop 5,524,818.10 5,329,999.71 Air-conditioner Co., Ltd. Changhong Sichuan Changhong Jijia Fine Co., Ltd. warehouse 3,662,397.40 3,601,311.97 Air-conditioner Changhong Sichuan Changhong Electric Co., Ltd. Workshop 807,070.04 1,786,799.14 Air-conditioner Changhong Sichuan Changxin Refrigeration Parts Processing equipment of U 159,999.98 206,666.67 Air-conditioner Co., Ltd. Changhong Chengdu Guigu Environmental Tech. House and buildings 28,403.67 28,403.67 Air-conditioner Co., Ltd Changhong Sichuan Changhong Electric Holding plant, equipment 4.49 19,563.84 Air-conditioner Co., Ltd. 328 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Leasing income in Leasing income Lessor Lessee Type of assets Current Period in Last Period Ridian Sichuan Changhong Device Technology 2# living area 2,147,149.80 2,147,149.80 Technology Co., Ltd. Ridian Sichuan Qiruik Technology Co., Ltd. plant 47,314.29 47,314.29 Technology Zhongshan Sichuan Changhong Device Technology living area 67,200.00 84,000.00 Changhong Co., Ltd. Zhongshan Sichuan Changhong Minsheng Logistics Warehouse Office 44,297.16 44,297.16 Changhong Co., Ltd. Zhongshan Sichuan Changhong Moulding Tech. living area 34,946.67 64,800.00 Changhong Co., Ltd. Zhongshan Guangdong Electric Co., Ltd. living area 14,221.47 Changhong Sichuan Changhong Moulding Tech. Jiangxi Meiling Workshop 822,288.36 822,288.36 Co., Ltd. Sichuan Aichuang Science & Jiangxi Meiling Warehouse 9,600.00 8,914.29 Technology Co., Ltd. Sichuan Changhong Minsheng Logistics Jiangxi Meiling Workshop 9,142.86 9,142.86 Co., Ltd. Jiangxi Meiling Sichuan Changhong Jijia Fine Co., Ltd. Workshop 8,000.00 7,428.57 Jiangxi Meiling Changhong Huayi Compressor Co., Ltd. Workshop 4,800.00 4,457.14 Jiangxi Meiling Hefei Changhong Industry Co., Ltd. Workshop 1,485.71 Total 18,098,647.83 19,079,782.54 329 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) (2)Lessee of related parties Variable lease Rental charges for short-term payments not included Interest expenses on lease Rent paid Increased use right assets and low-value assets (if any) in lease liabilities liabilities assumed Lessor Lessee Type of assets measurement (if any) Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of current period previous current previous current period previous current period previous current period previous period period period period period period Sichuan Changhong Changhong Electronics Air- Rental 143,252.58 125,548.80 Holding Group conditioner Co., Ltd. Sichuan Changhong Changhong Staff Electronics Air- 1,920.00 dormitory Holding Group conditioner Co., Ltd. Sichuan Jiahong Changhong Staff Industrial Co., Air- 399,176.91 464,805.24 dormitory Ltd. conditioner Sichuan Changhong Changhong VISA Air- 341,178.04 306,863.00 34,315.04 1,534,315.05 Electric Co., Laboratories conditioner Ltd. 330 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Variable lease Rental charges for short-term payments not included Interest expenses on lease Rent paid Increased use right assets and low-value assets (if any) in lease liabilities liabilities assumed Lessor Lessee Type of assets measurement (if any) Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of current period previous current previous current period previous current period previous current period previous period period period period period period Guangdong Changhong Hong yuan Staff 80,355.16 104,751.85 Electronics Co., Zhongshan dormitory Ltd. Chengdu Changhong Hongmei Electronic Office 678,008.96 603,257.97 47,945.48 88,127.19 Intelligent Technology Co., Ltd. Sichuan Changhong Mianyang Workshop 96,779.07 2,831,656.00 2,904,844.69 451,647.92 378,459.23 26,088,842.03 701,858.10 Electric Co., Meiling leasing Ltd. Sichuan Jiahong Mianyang Staff Industrial Co., 32,599.20 34,379.52 Meiling dormitory Ltd. Guangdong Ridian Staff 64,994.60 132,045.20 Changhong Technology dormitory 331 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Variable lease Rental charges for short-term payments not included Interest expenses on lease Rent paid Increased use right assets and low-value assets (if any) in lease liabilities liabilities assumed Lessor Lessee Type of assets measurement (if any) Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of current period previous current previous current period previous current period previous current period previous period period period period period period Electronics Co., Ltd. Chengdu Changhong Meiling Life Electric Office 130,997.43 22,542.67 appliance Technology Co., Ltd. Changhong Huayi Jiangxi Staff 115,810.67 140,483.38 Compressor Meiling dormitory Co., Ltd. Hefei Changhong Changhong Plant 1,209,008.90 908,010.50 953,113.00 1,019,690.31 Industry Co., Meiling Ltd. Hefei Changhong Changhong Sale site 11,428.57 Meiling Industry Co., 332 Annotations of Financial Statements of Changhong Meiling Co., Ltd. January 1 ,2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Variable lease Rental charges for short-term payments not included Interest expenses on lease Rent paid Increased use right assets and low-value assets (if any) in lease liabilities liabilities assumed Lessor Lessee Type of assets measurement (if any) Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of Amount of current period previous current previous current period previous current period previous current period previous period period period period period period Ltd. Total 1,075,394.19 1,367,654.70 5,025,536.86 4,416,113.16 1,487,021.44 1,486,276.73 27,623,157.08 701,858.10 333 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) 6. Related guarantee Maximum guarantee Completed Secured party Sponsored party amount Start Date due (Y/N) (in 10 thousand Yuan) Fulfill Changhong Meiling Meiling Group 4,500.00 2023/5/11 2024/5/11 No Changhong Meiling Meiling Group 8,000.00 2023/7/12 2024/7/11 No Changhong Meiling Jiangxi Meiling 5,000.00 2022/4/18 2023/4/18 Yes Changhong Meiling Meiling Life Appliances 8,000.00 2023/2/22 2024/1/12 No Changhong Meiling Meiling Life Appliances 2,000.00 2023/4/24 2024/4/23 No Changhong Meiling Meiling Life Appliances 5,000.00 2023/4/21 2024/4/21 No Changhong Meiling Meiling Life Appliances 2,000.00 2023/11/3 2024/11/2 No Changhong Meiling Meiling Life Appliances 10,000.00 2023/12/1 2024/11/30 No Changhong Meiling Meiling Life Appliances 4,000.00 2023/12/15 2024/6/4 No Changhong Meiling Meiling Life Appliances 3,000.00 2022/1/26 2023/1/26 Yes Changhong Meiling Meiling Life Appliances 5,000.00 2022/3/16 2023/3/16 Yes Changhong Meiling Meiling Life Appliances 5,000.00 2022/9/22 2023/9/21 Yes Changhong Meiling Meiling Life Appliances 1,000.00 2022/9/8 2023/9/8 Yes Changhong Meiling Meiling Life Appliances 500.00 2022/8/26 2023/8/26 Yes Changhong Meiling Meiling Life Appliances 4,500.00 2022/12/8 2023/10/24 Yes Changhong Meiling Meiling Life Appliances 5,000.00 2022/10/26 2023/10/25 No Changhong Meiling Meiling Life Appliances 4,000.00 2021/12/9 2022/11/2 Yes Changhong air- Changhong Meiling 10,000.00 2023/1/17 2023/10/11 No conditioner Changhong air- Changhong Meiling 5,000.00 2023/1/17 2024/1/16 No conditioner Changhong air- Changhong Meiling 16,000.00 2023/2/27 2024/2/26 No conditioner Changhong air- Changhong Meiling 30,000.00 2023/3/16 2024/3/16 No conditioner Changhong air- Changhong Meiling 60,000.00 2023/3/18 2024/3/18 No conditioner Changhong air- Changhong Meiling 12,000.00 2023/4/14 2024/4/13 No conditioner Changhong air- Changhong Meiling 3,500.00 2023/6/28 2023/12/28 Yes conditioner Changhong air- Changhong Meiling 1,500.00 2023/7/5 2023/12/13 No conditioner Changhong air- Changhong Meiling 8,000.00 2022/3/18 2023/3/17 Yes conditioner Changhong air- Changhong Meiling 30,000.00 2022/4/18 2023/4/18 Yes conditioner 334 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Maximum guarantee Completed Secured party Sponsored party amount Start Date due (Y/N) (in 10 thousand Yuan) Fulfill Changhong air- Changhong Meiling 5,000.00 2021/9/24 2022/9/24 Yes conditioner Changhong air- Changhong Meiling 15,000.00 2021/12/7 2022/12/6 Yes conditioner Changhong Meiling Ridian Technology 4,000.00 2023/7/8 2024/7/8 No Changhong Meiling Ridian Technology 3,000.00 2022/3/25 2023/3/25 Yes Changhong Meiling Ridian Technology 4,000.00 2022/7/7 2023/7/7 Yes Changhong Meiling Ridian Technology 2,000.00 2022/10/25 2023/10/24 Yes Changhong Meiling Ridian Technology 3,500.00 2022/11/10 2023/11/9 No Changhong Meiling Zhongke Meiling 2,000.00 2022/9/20 2023/1/27 Yes Changhong Meiling Zhongke Meiling 5,000.00 2022/11/14 2023/6/19 Yes Changhong Meiling Zhongshan Changhong 6,000.00 2023/3/15 2024/3/15 No Changhong Meiling Zhongshan Changhong 10,000.00 2023/5/11 2024/5/10 No Changhong Meiling Zhongshan Changhong 10,000.00 2023/5/30 2024/5/29 No Changhong Meiling Zhongshan Changhong 7,000.00 2023/6/15 2024/6/14 No Changhong Meiling Zhongshan Changhong 10,000.00 2023/5/12 2024/5/12 No Changhong Meiling Zhongshan Changhong 20,000.00 2023/7/3 2024/7/3 No Changhong Meiling Zhongshan Changhong 5,000.00 2023/7/28 2024/7/27 No Changhong Meiling Zhongshan Changhong 15,000.00 2023/8/23 2024/8/23 No Changhong Meiling Zhongshan Changhong 5,000.00 2023/11/2 2024/11/2 No Changhong Meiling Zhongshan Changhong 2,000.00 2022/2/15 2023/2/14 Yes Changhong Meiling Zhongshan Changhong 18,000.00 2022/4/22 2023/4/22 Yes Changhong Meiling Zhongshan Changhong 6,000.00 2022/3/15 2023/3/15 Yes Changhong Meiling Zhongshan Changhong 10,000.00 2022/4/22 2023/4/22 Yes Changhong Meiling Zhongshan Changhong 7,000.00 2022/3/28 2023/3/29 Yes Changhong Meiling Zhongshan Changhong 13,000.00 2022/6/16 2023/6/16 Yes Changhong Meiling Zhongshan Changhong 20,000.00 2022/7/2 2023/7/2 Yes Changhong Meiling Zhongshan Changhong 5,000.00 2022/8/19 2023/8/19 Yes Changhong Meiling Zhongshan Changhong 15,000.00 2022/8/15 2023/8/14 No Zhongke Meiling Lingan Medical 1,000.00 2023/8/25 2024/8/24 No Zhongke Meiling Lingan Medical 1,000.00 2023/10/20 2024/10/20 No Zhongke Meiling Anhui Tuoxing 500.00 2022/6/27 2023/6/27 Yes Zhongke Meiling Anhui Tuoxing 1,000.00 2023/6/20 2024/6/4 No Zhongke Meiling Anhui Tuoxing 400.00 2023/8/15 2024/8/14 No Zhongke Meiling Anhui Tuoxing 1,000.00 2023/10/20 2024/10/20 No Counter guarrantee: 335 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Maximum guarantee Completed Secured party Sponsored party amount Start Date due (Y/N) (in 10 thousand Yuan) Fulfill Meiling Group Changhong Meiling 4,500.00 2023/5/11 2024/5/11 No Meiling Group Changhong Meiling 8,000.00 2023/7/12 2024/7/11 No Meiling Group Changhong Meiling 5,000.00 2022/4/18 2023/4/18 Yes Meiling Life Changhong Meiling 8,000.00 2023/2/22 2024/1/12 No Appliances Meiling Life Changhong Meiling 2,000.00 2023/4/24 2024/4/23 No Appliances Meiling Life Changhong Meiling 5,000.00 2023/4/21 2024/4/21 No Appliances Meiling Life Changhong Meiling 2,000.00 2023/11/3 2024/11/2 No Appliances Meiling Life Changhong Meiling 10,000.00 2023/12/1 2024/11/30 No Appliances Meiling Life Changhong Meiling 4,000.00 2023/12/15 2024/6/4 No Appliances Meiling Life Changhong Meiling 3,000.00 2022/1/26 2023/1/26 Yes Appliances Meiling Life Changhong Meiling 5,000.00 2022/3/16 2023/3/16 Yes Appliances Meiling Life Changhong Meiling 5,000.00 2022/9/22 2023/9/21 Yes Appliances Meiling Life Changhong Meiling 1,000.00 2022/9/8 2023/9/8 Yes Appliances Meiling Life Changhong Meiling 500.00 2022/8/26 2023/8/26 Yes Appliances Meiling Life Changhong Meiling 4,500.00 2022/12/8 2023/10/24 Yes Appliances Meiling Life Changhong Meiling 5,000.00 2022/10/26 2023/10/25 No Appliances Meiling Life Changhong Meiling 4,000.00 2021/12/9 2022/11/2 Yes Appliances Changhong air- Changhong Meiling 10,000.00 2023/1/17 2023/10/11 No conditioner Changhong air- Changhong Meiling 5,000.00 2023/1/17 2024/1/16 No conditioner Changhong air- Changhong Meiling 16,000.00 2023/2/27 2024/2/26 No conditioner Changhong air- Changhong Meiling 30,000.00 2023/3/16 2024/3/16 No conditioner 336 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Maximum guarantee Completed Secured party Sponsored party amount Start Date due (Y/N) (in 10 thousand Yuan) Fulfill Changhong air- Changhong Meiling 60,000.00 2023/3/18 2024/3/18 No conditioner Changhong air- Changhong Meiling 12,000.00 2023/4/14 2024/4/13 No conditioner Changhong air- Changhong Meiling 3,500.00 2023/6/28 2023/12/28 Yes conditioner Changhong air- Changhong Meiling 1,500.00 2023/7/5 2023/12/13 No conditioner Changhong air- Changhong Meiling 8,000.00 2022/3/18 2023/3/17 Yes conditioner Changhong air- Changhong Meiling 30,000.00 2022/4/18 2023/4/18 Yes conditioner Changhong air- Changhong Meiling 5,000.00 2021/9/24 2022/9/24 Yes conditioner Changhong air- Changhong Meiling 15,000.00 2021/12/7 2022/12/6 Yes conditioner Ridian Technology Changhong Meiling 4,000.00 2023/7/8 2024/7/8 No Ridian Technology Changhong Meiling 3,000.00 2022/3/25 2023/3/25 Yes Ridian Technology Changhong Meiling 4,000.00 2022/7/7 2023/7/7 Yes Ridian Technology Changhong Meiling 2,000.00 2022/10/25 2023/10/24 Yes Ridian Technology Changhong Meiling 3,500.00 2022/11/10 2023/11/9 No Zhongke Meiling Changhong Meiling 2,000.00 2022/9/20 2023/1/27 Yes Zhongke Meiling Changhong Meiling 5,000.00 2022/11/14 2023/6/19 Yes Zhongshan Changhong Meiling 6,000.00 2023/3/15 2024/3/15 No Changhong Zhongshan Changhong Meiling 10,000.00 2023/5/11 2024/5/10 No Changhong Zhongshan Changhong Meiling 10,000.00 2023/5/30 2024/5/29 No Changhong Zhongshan Changhong Meiling 7,000.00 2023/6/15 2024/6/14 No Changhong Zhongshan Changhong Meiling 10,000.00 2023/5/12 2024/5/12 No Changhong Zhongshan Changhong Meiling 20,000.00 2023/7/3 2024/7/3 No Changhong Zhongshan Changhong Meiling 5,000.00 2023/7/28 2024/7/27 No Changhong Zhongshan Changhong Meiling 15,000.00 2023/8/23 2024/8/23 No Changhong 337 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Maximum guarantee Completed Secured party Sponsored party amount Start Date due (Y/N) (in 10 thousand Yuan) Fulfill Zhongshan Changhong Meiling 5,000.00 2023/11/2 2024/11/2 No Changhong Zhongshan Changhong Meiling 2,000.00 2022/2/15 2023/2/14 Yes Changhong Zhongshan Changhong Meiling 18,000.00 2022/4/22 2023/4/22 No Changhong Zhongshan Changhong Meiling 6,000.00 2022/3/15 2023/3/15 Yes Changhong Zhongshan Changhong Meiling 10,000.00 2022/4/22 2023/4/22 Yes Changhong Zhongshan Changhong Meiling 7,000.00 2022/3/28 2023/3/29 Yes Changhong Zhongshan Changhong Meiling 13,000.00 2022/6/16 2023/6/16 Yes Changhong Zhongshan Changhong Meiling 20,000.00 2022/7/2 2023/7/2 Yes Changhong Zhongshan Changhong Meiling 5,000.00 2022/8/19 2023/8/19 Yes Changhong Zhongshan Changhong Meiling 15,000.00 2022/8/15 2023/8/14 No Changhong Lingan Medical Zhongke Meiling 1,000.00 2023/8/25 2024/8/24 No Lingan Medical Zhongke Meiling 1,000.00 2023/10/20 2024/10/20 No Anhui Tuoxing Zhongke Meiling 500.00 2022/6/27 2023/6/27 Yes Anhui Tuoxing Zhongke Meiling 1,000.00 2023/6/20 2024/6/4 No Anhui Tuoxing Zhongke Meiling 400.00 2023/8/15 2024/8/14 No Anhui Tuoxing Zhongke Meiling 1,000.00 2023/10/20 2024/10/20 No 7. Assets transfer and debt reorganization of related parties Related party Type Current Period Last Period Purchase and construction Sichuan Hongxin Software Co., Ltd. 3,192,988.66 1,254,943.40 of fixed assets Purchase and construction Sichuan Hongxin Software Co., Ltd. 3,061,404.42 5,668,396.24 of fixed assets Sichuan Changhong Intelligent Manufacturing Purchase and construction 2,100,406.26 536,783.19 Technology Co., Ltd. of fixed assets Sichuan Changhong Electric Holding Group Co., Purchase and construction 1,698,113.21 2,264,150.94 Ltd. of fixed assets Sichuan Changhong Electric Co., Ltd. Construction of fixed 428,600.00 1,400,000.03 338 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) assets Purchase and construction Sichuan Qiruik Technology Co., Ltd. 288,000.00 65,575.22 of fixed assets Sichuan Changhong Jiahua Information Product Purchase and construction 275,800.17 394,336.28 Co., Ltd. of fixed assets Chengdu Guigu Environment Technology Co., Purchase and construction 50,600.00 Ltd. of fixed assets Purchase and construction Sichuan Zhiyijia Network Technology Co., Ltd. 40,519.46 22,384.06 of fixed assets Mianyang Science & Technology City Big Data Purchase and construction 450,367.31 Technology Co., Ltd. of fixed assets Purchase and construction Guangdong Changhong Electric Co., Ltd. 1,800.00 of fixed assets Sichuan Aoku Technology Co., Ltd. Sale of fixed assets 121,030.34 Total 11,136,432.18 12,179,767.01 8.Other Current Period (in 10 Last Period (in 10 thousand Name of company Content thousand Yuan) Yuan) Yuanxin Financial Lease Co., Financing business 47,232.36 40,942.87 Ltd. 9. Related transaction with Changhong Finance Company (1) Saving balance Interest income from Name of company Ending balance Opening balance bank saving in the period Changhong Meiling Co., Ltd. 2,052,187,201.79 1,576,180,731.79 55,927,448.19 Sichuan Changhong Air-conditioner Co., Ltd 977,689,247.58 975,985,071.65 9,442,854.40 Zhongshan Changhong Electric Co., Ltd 761,905,289.07 490,792,121.80 15,139,706.91 合肥长虹美菱生活电器有限公司 243,577,856.45 218,066,151.18 4,799,892.28 Hefei Changhong Meiling Life Appliances Co., 167,225,376.64 112,954,489.66 1,888,440.19 Ltd. Ground Energy Heat Pump Tech. (Zhongshan) 60,561,687.38 50,619,272.37 1,352,974.65 Co., Ltd. Changhong Meiling Ridian Technology Co., 56,655,316.22 33,296,010.27 200,762.90 Ltd. Hebei Hongmao Daily Appliance Technology 6,769,834.89 5,675.83 Co., Ltd. Hefei Meiling Group Holdings Limited 304,516.48 207,918.41 10,355.85 Anhui Tuoxing Technology Co., Ltd. 7,358,942.16 84,076.99 15,330.04 Mianyang Meiling Refrigeration Co., Ltd. 13,743.00 21,366.13 61.24 339 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Interest income from Name of company Ending balance Opening balance bank saving in the period Ground Energy Heat Pump Tech. Co., Ltd. 13,260.69 17.12 Jiangxi Meiling Electric Appliance Co., Ltd. 9,667.64 9,626.58 41.07 Anhui Ling'an medical equipment Co., Ltd. 825.26 0.08 0.91 Total 4,327,489,669.67 3,464,999,932.49 88,783,561.58 (2) Discounted bills Bank acceptance Discounting fees Bank acceptance Discounted face Amount of Discounted amount amount expenses Sichuan Changhong Air-conditioner Co., Ltd 1,033,728,549.36 1,025,823,634.69 7,904,914.67 Changhong Meiling Co., Ltd. 657,198,568.01 654,852,590.83 2,345,977.18 Hefei Changhong Meiling Life Appliances Co., 77,674,243.38 77,101,568.97 572,674.41 Ltd. Ground Energy Heat Pump Tech. (Zhongshan) 8,650,000.00 8,527,558.31 122,441.69 Co., Ltd. Changhong Meiling Ridian Technology Co., 3,373,116.42 3,338,859.99 34,256.43 Ltd. Zhongshan Changhong Electric Co., Ltd 13,291,988.00 13,185,288.15 106,699.85 Total 1,793,916,465.17 1,782,829,500.94 11,086,964.23 (3) Issuance of invoices Name of company Issuer Bill amount Types Sichuan Changhong Air-conditioner Sichuan Changhong Group 914,629,184.69 Bank acceptance Co., Ltd. Finance Co., Ltd. Zhongshan Changhong Electric Co., Sichuan Changhong Group 327,452,556.31 Bank acceptance Ltd. Finance Co., Ltd. Ground Energy Heat Pump Tech. Sichuan Changhong Group 139,455,669.44 Bank acceptance (Zhongshan) Co., Ltd. Finance Co., Ltd. Sichuan Changhong Group Changhong Meiling Co., Ltd. 128,561,000.00 Bank acceptance Finance Co., Ltd. Hefei Changhong Meiling Life Sichuan Changhong Group 85,660,685.29 Bank acceptance Appliances Co., Ltd. Finance Co., Ltd. Zhongke Meiling Cryogenic Sichuan Changhong Group 34,517,933.96 Bank acceptance Technology Co., Ltd. Finance Co., Ltd. Hefei Meiling Group Holdings Sichuan Changhong Group 32,688,754.50 Bank acceptance Limited Finance Co., Ltd. Changhong Meiling Ridian Sichuan Changhong Group 4,673,370.72 Bank acceptance Technology Co., Ltd. Finance Co., Ltd. Sichuan Changhong Group Anhui Tuoxing Technology Co., Ltd. 248,235.95 Bank acceptance Finance Co., Ltd. 340 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Name of company Issuer Bill amount Types Anhui Ling'an medical equipment Co., Sichuan Changhong Group 351,295.87 Bank acceptance Ltd. Finance Co., Ltd. Total 1,668,238,686.73 (4) Credit or other financial services Name of company Transaction content Amount incurred this year Sichuan Changhong Air Guarantee letter 3,077,160.00 Conditioning Co., Ltd Anhui Tuoxing Technology Co., Ltd Guarantee letter 330,000.00 Total 3,407,160.00 (5) Borrowings: Nil (6) Receivable factoring: Nil 10.Remuneration for key management Item Current Year (In 10 thousand yuan) Last Year (In 10 thousand yuan) Total remuneration 893.76 767.09 Including: performance incentive fund (iii) Come and go balance with related parties 1. Receivable items Balance at year-end Balance at year-begin Item Related party Bad debt Bad debt Book balance Book balance provision provision Account Sichuan Zhiyijia Network Technology Co., 110,410,176.95 receivable Ltd. 188,235,530.60 440,272,480.19 68,442,866.04 Account CHANGHONG(HK)TRADINGLIMITED 60,041,559.36 receivable 117,003,398.60 Account CHANGHONGELECTRIC(AUSTRALIA) 79,488,591.21 24,835,082.91 receivable PTY.LTD. Account CHANGHONG(HK)TRADINGLIMITED 67,734,903.25 3,339,617.94 53,357,857.70 1,137,912.73 receivable Account Changhong Ruba Electric Company 40,856,357.09 40,856,357.09 41,456,983.76 receivable (Private) Ltd. 41,456,983.76 Account Changhong Europe Electric s.r.o 31,860,854.17 9,350,935.09 receivable Account Orion.PDP.Co.,ltd 13,506,278.22 18,169,829.16 96,826.72 receivable 341 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Balance at year-end Balance at year-begin Item Related party Bad debt Bad debt Book balance Book balance provision provision Account Sichuan Aichuang Technology Co., Ltd. 3,195,467.74 receivable Account Sichuan Changhong Electric Appliance 900,179.64 944,871.90 receivable Co., Ltd Sichuan Changhong Intelligent Account Manufacturing Technology Co., Ltd 727,500.00 receivable Account Yuanxin Financing Lease Co., Ltd. 558,665.14 545,991.98 receivable Account Changhong Huayi Compressor Co., Ltd. 519,071.54 432,726.15 receivable Account Sichuan Service Exp. Appliance Service 349,069.73 288,033.65 receivable Chain Co., Ltd. Account Sichuan Huafeng Technology Co., Ltd. 176,400.00 receivable Account Sichuan Changhong Model Technology 176,175.52 17,580.00 receivable Co., Ltd. Account Sichuan Changhong Real Estate Co., Ltd. 119,213.45 receivable Account Sichuan Changhong Xingwang Technology 112,000.00 receivable Co., Ltd. Account Sichuan Changhong Network Technology 96,000.00 receivable Co., Ltd. Account Sichuan Changhong Lithium Battery 30,600.00 receivable Technology Co., Ltd. Account Mianyang Huafeng Hulian Technology 8,800.00 receivable Co., Ltd. Account Sichuan Changhong Electric Part Co., Ltd. 954.00 receivable Account Sichan Changhong Electric Holdings 720.00 240,063.11 receivable Group Co., Ltd. Account CHANGHONG ELECTRIC MIDDLE 755,784.47 receivable EAST FZCO Account Ground Energy Heat Pump Tech. Co., Ltd. 342,203.53 57,322.40 receivable Account Guangdong Changhong Electric Co., Ltd. 147,629.98 receivable Account Sichuan Changhong Jijia Fine Co., Ltd. 8,204.00 receivable 342 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Balance at year-end Balance at year-begin Item Related party Bad debt Bad debt Book balance Book balance provision provision Account Sichuan Changhong Minsheng Logistics 4,305.20 receivable Co., Ltd. Account paid Chengdu Changhong Electric Technology 381,126.07 in advance Co., Ltd. Account paid Sichuan Ailian Technology Co., Ltd. 53,247.60 178.22 in advance Account paid Sichuan Changhong Minsheng Logistics 8,396.00 in advance Co., Ltd. Account paid Hefei Changhong Industry Co., Ltd. 2,986.27 in advance Account paid Sichuan Changhong Electric Co., Ltd. 19.17 in advance Account paid Sichuan Changhong Property Service Co., 1,613.85 in advance Ltd. Other account Sichuan Service Exp. Appliance Service 313,490.41 42,202.32 receivable Chain Co., Ltd. Sichuan Yizhijia Network Technology Co., Other account Ltd. 303,019.00 200,000.00 receivable Other account Sichuan Changhong Property Service Co., 2,904.93 1,291.08 receivable Ltd. Other account Changhong Huayi Compressor Co., Ltd. 267,000.00 receivable Other account Sichuan Changhong Jiechuang Lithium 129,000.00 receivable Battery Technology Co., Ltd. Other account Sichuan Changhong Electric Appliance 60,000.00 receivable Co., Ltd Other account Sichuan Changhong Jiajia Fine Co., Ltd. 17,232.50 receivable 111,191,911.6 Total 546,721,919.35 154,606,151.98 651,930,640.11 5 2.Payable items Item Related party Balance at year-end Balance at year-begin Account payable Sichuan Changhong Moulding Tech. Co., Ltd. 173,023,852.05 102,735,433.69 Account payable Changhong Huayi Compressor Co., Ltd. 117,609,190.18 21,947,957.79 Account payable Sichuan Aichuang Technology Co., Ltd. 56,579,812.80 13,416,872.06 Account payable Sichuan Changhong Jijia Fine Co., Ltd. 32,211,531.65 48,446,852.70 343 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Item Related party Balance at year-end Balance at year-begin Account payable Sichuan Changhong Electric Holdings Group Co., Ltd. 23,732,724.50 12,932.00 Account payable Changhong Huayi Compressor Co., Ltd. 17,976,156.76 14,948,871.57 Account payable Mianyang Haili Appliance Co., Ltd. 17,723,765.52 7,021,268.99 Account payable Sichuan Aoku Technology Co., Ltd. 14,614,765.93 8,194,344.79 Account payable Sichuan Changhong Package Printing Co., Ltd. 14,430,893.66 20,626,143.74 Account payable Changhong Ruba Electric Company (Private) Ltd. 13,195,411.19 15,632,092.38 Changhong International Holdings (Hong Kong) Co., Account payable 8,933,631.46 17,634,983.97 Ltd. Account payable Sichuan Changhong Minsheng Logistics Co., Ltd. 4,022,048.97 1,633,873.17 Account payable Sichuan Changhong Electronic Products Co., Ltd. 3,801,344.25 2,892,627.07 Sichuan Changhong Intelligent Manufacturing Account payable 2,884,803.49 5,027,626.73 Technology Co., Ltd. Account payable Sichuan Changhong Electric Co., Ltd. 2,863,953.34 24,051,245.19 Account payable Sichuan Ailian Technology Co., Ltd. 1,721,318.59 2,098,307.00 Account payable Guangdong Changhong Electric Co., Ltd. 1,554,593.15 1,152,123.68 Account payable PT.CHANGHONG.ELECTRIC INDONESIA 1,514,130.31 Account payable Sichuan Changhong Device Technology Co., Ltd. 1,148,884.00 1,728,816.01 Account payable Sichuan Service Exp. Appliance Service Chain Co., Ltd. 725,473.65 754,759.55 Account payable Sichuan Hongxin Software Co., Ltd. 451,301.89 490,315.10 Sichuan Changhong Intelligent Manufacturing Account payable 270,846.58 670,179.94 Technology Co., Ltd. Account payable Sichuan Changhong New Energy Technology Co., Ltd. 225,732.08 27,120.00 Account payable Sichuan Changhong International Hotel Co., Ltd. 146,276.00 99,873.00 Account payable Chengdu Guigu Environmental Tech. Co., Ltd 57,178.00 34,717.86 Account payable Sichuan Zhiyijia Network Technology Co., Ltd. 35,267.63 8,752.84 Account payable Sichuan Qiruik Technology Co., Ltd. 32,000.00 6,805.20 Account payable Sichuan Hongwei Technology Co., Ltd. 5,492.64 Account payable Sichuan Jiahong Industry Co., Ltd. 396.00 300.00 Account payable 081 Electronic Group Co., Ltd. 53,026.90 Account payable Sichuan Hongyu Metal Manufacturing Co., Ltd. 14,662.40 Account payable Hefei Changhong Industrial Co., Ltd. 13,283.74 Account payable Sichuan Changhong Source Co., Ltd. 1,831.62 Contract liability Sichuan Zhiyijia Network Technology Co., Ltd. 32,073,215.34 70,485.08 Contract liability Sichuan Changhong Electric Appliance Co., Ltd 353,941.29 447,676.77 Contract liability CHANGHONG ELECTRIC MIDDLE EAST FZCO 90,332.93 92,761.51 Contract liability Sichuan Baiku Technology Co., Ltd. 22,932.74 71,396.02 Contract liability Sichuan Changhong Minsheng Logistics Co., Ltd. 14,654.86 Contract liability Sichuan Service Exp. Appliance Service Chain Co., Ltd. 10,727.89 10,174.94 344 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Item Related party Balance at year-end Balance at year-begin Contract liability Sichuan Ansifei Technolgy Co., Ltd. 2,646.19 2,736.19 Contract liability Sichuan Changhong Moulding Tech. Co., Ltd. 2,415.93 Contract liability CHANGHONG(HK)TRADINGLIMITED 908.66 893.51 Changhong International Holdings(Hongkong)Co., Contract liability 713.44 Ltd. Contract liability 081 Electronic Group Co., Ltd. 22.61 22.61 Contract liability Sichuan Aichuang Technology Co., Ltd. 1,961,333.35 Sichuan Changhong Intelligence Manufacturing Contract liability 1,120,221.22 Technology Co., Ltd. Contract liability Chengdu Guigu Environmental Tech. Co., Ltd 171,499.69 Contract liability Sichuan Qisai Microelectronic Co., Ltd. 65,599.81 Contract liability Yibin Hongxing Electric Co., Ltd. 43,362.83 Contract liability Hong Yuan Ground Energy Heat Tech. Co., Ltd 39,343.58 Contract liability Sichuan Changhong Source Co., Ltd 27,300.88 Contract liability Sichuan Changhong Electric Holding Group Co., Ltd. 4,495.58 Contract liability Sichuan Changhong International Hotel Co., Ltd 0.88 Contract liability Guangyuan Changhong Electric Technology Co., Ltd. 0.03 Lease liability Sichuan Changhong Electric Co., Ltd. 27,418,257.97 9,129,947.19 Lease liability Hefei Changhong Industrial Co., Ltd. 16,678,869.72 17,887,878.62 Lease liability Chengdu Changhong Electronic Technology Co., Ltd. 381,126.07 10,468.90 Other payable Sichuan Changhong Minsheng Logistics Co., Ltd. 132,815,918.64 111,049,082.37 Other payable Sichuan Service Exp. Appliance Service Chain Co., Ltd. 82,400,851.21 80,970,437.14 Other payable Yuanxin Financial Lease Co., Ltd. 61,295,062.03 79,112,334.67 Other payable Sichuan Changhong Moulding Tech. Co., Ltd. 2,559,981.65 2,700,501.98 Other payable Changhong Huayi Compressor Co., Ltd. 1,903,400.00 1,898,900.00 Other payable Sichuan Aichuang Technology Co., Ltd. 1,443,020.00 100,000.00 Other payable Sichuan Hongxin Software Co., Ltd. 594,516.98 160,000.00 Other payable Sichuan Qiruik Technology Co., Ltd. 585,767.70 479,244.80 Other payable Sichuan Zhiyijia Network Technology Co., Ltd. 566,063.25 429,131.05 Other payable Sichuan Changhong Jijia Fine Co., Ltd. 425,492.32 400,500.00 Other payable Sichuan Changhong Electric Holding Group Co., Ltd. 393,156.00 Other payable Sichuan Aoku Technology Co., Ltd. 260,212.20 189,859.40 Other payable Sichuan Changxin Refrigeration Parts Co., Ltd. 173,907.41 46,702.03 Other payable Sichuan Changhong Package Printing Co., Ltd. 139,699.18 50,000.00 Sichuan Changhong Intelligence Manufacturing Other payable 109,596.00 255,867.10 technology Co., Ltd. Other payable Sichuan Changhong Electric Appliance Co., Ltd 58,735.52 81,251.02 Other payable Sichuan Ailian Technology Co., Ltd. 50,000.00 50,000.00 Other payable Sichuan Changhong Electronic Products Co., Ltd. 50,000.00 50,000.00 Other payable Hefei Changhong Industrial Co., Ltd. 50,000.00 50,000.00 345 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Item Related party Balance at year-end Balance at year-begin Other payable Sichuan Changhong New Energy Technology Co., Ltd. 50,000.00 Other payable Guangdong Changhong Electric Co., Ltd. 25,113.76 38,429.50 Sichuan Changhong Precision Electronic Technology Other payable 734.43 Co., Ltd Other payable Sichuan Changhong Device Technology Co., Ltd. 29.70 Other payable Sichuan Jiahong Industrial Co., Ltd. 18.00 74,316.41 Sichuan Changhong Jineng Sunshine Technology Co., Other payable 500,000.00 Ltd. Other payable CHANGHONG(HK)TRADINGLIMITED 29,808.54 Total 874,494,817.89 621,251,965.88 (iv) Commitments from related parties: Nil XIII. Share-based payment: Nil XIV. Contingency 1. Pending action or possible liabilities formed from arbitration In November 2021, Zhejiang Teruisi Pharmaceutical Co., Ltd. filed a lawsuit against Zhongke Meiling for the "Contract for Cold Storage Design, Equipment Procurement and Installation Construction". Currently, a third-party engineering quality appraisal agency is conducting quality appraisal of the objects under the contract, the boot-up and operation test has been initially completed, and Zhongke Meiling intends to advocate maintenance of the cold storage project, and the maintenance cost is estimated to be 1,720,534.42 yuan. As of December 31, 2023, apart from the aforementioned lawsuits, some of our subsidiaries have been defendants in certain legal proceedings and plaintiffs in other lawsuits that arise in our daily business operations. Although the outcome of these contingencies, legal proceedings, or other lawsuits cannot be determined at present, the management believes that any resulting liabilities will not have a significant negative impact on the financial condition or operating performance of the company. 2. Contingency from external guarantee: Nil 3. Other contingency: Nil XV. Commitments: Nil XVI. Events occurring after the balance sheet date 1. Important non-adjustment items: Nil 2. Profit distribution: According to the audit by ShineWing Certified Public Accountants (Special General Partnership), in 2023, the net profit realized in individual financial statements of the parent company was RMB 358345033.36. As of December 31, 2023, the cumulative undistributed profit in individual financial statements of the parent company was RMB 346 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) 1294109238.10. In addition, in the consolidated financial statements of the company for the year 2023, the net profit attributable to the owners of the parent company was 741038108.54 yuan. As of December 31, 2023, the cumulative undistributed profit in the consolidated financial statements was 1521759836.64 yuan. According to relevant regulations, the distribution of company profits should be based on the profits available for distribution by the parent company, and follow the principle of distributing the lower of the cumulative undistributed profits in the consolidated financial statements and the parent company's financial statements. Therefore, the distributable profit for 2023 is the accumulated undistributed profit of RMB 1294109238.10 in individual financial statements of the parent company. Based on relevant regulations and the provisions of the Company's Articles of Association, taking into account the interests of shareholders and the long-term development needs of the company, it is proposed to: Based on the total share capital of 1029923715 shares as of December 31, 2023, the company will distribute a cash dividend of 3 yuan (including tax) to all shareholders for every 10 shares, without bonus shares or conversion of reserve funds into share capital. It is expected to distribute a cash dividend of 30897714.50 yuan. After this distribution, it is expected that the remaining cumulative undistributed profit of the parent company will be 985132123.60 yuan, and the remaining undistributed profit will be carried forward for distribution in future years. The aforementioned plan has been reviewed and approved by the 42nd meeting of the 10th Board of Directors of the company and is still awaiting approval by the shareholders' meeting. 3.Major sales return: Nil 4.Other than the above mentioned events, the Company have no other events occurred after balance sheet date. XVII. Other significant matters 1. Correction of previous periods and influence: Nil 2. Debt restructuring: Nil 3. Assets replacement: Nil 4. Pension plan: Nil 5. Discontinuing operation: Nil 6.Branch information In RMB 10,000 Refrigerator, Small freezer Air- Sales in Item home Other Total Washing conditioner branch appliances machine Operation income 1,058,627.40 1,173,949.73 208,366.86 41,045.98 57,222.07 2,424,767.90 Including: foreign trade 1,049,061.00 1,173,863.42 188,693.36 13,150.12 2,424,767.90 income Income from transactions 9,566.39 86.32 19,673.50 27,895.86 57,222.07 between divisions 347 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Refrigerator, Small freezer Air- Sales in Item home Other Total Washing conditioner branch appliances machine Operation expenses 1,035,343.27 1,144,115.11 202,976.31 37,262.27 57,265.63 2,362,431.33 Operation profit 23,284.13 29,834.62 5,390.55 3,783.71 -43.56 62,336.57 Total assets 1,370,097.26 621,813.60 87,961.23 23,412.66 180,358.35 1,922,926.40 Total liability 811,662.26 472,775.91 59,926.46 8,345.70 35,134.80 1,317,575.53 Supplementary information Depreciation and 21,777.76 15,049.37 369.27 738.59 2.76 37,932.23 amortization expenses Capital expenditure 15,766.85 11,608.52 50.81 1,224.86 5.20 28,645.84 Total assets do not include deferred income tax assets, and total liabilities exclude deferred income tax liabilities. 7. Other major transactions and events shows impact on investor’s decision-making: Nil XVIII. Notes to main items of finan cia l sta tement of paren t compa ny 1.Account receivable (1) Presented according to the bad debt accrual method Account age Balance at year-end Balance at year-begin Within 1 year(Including 1 year) 1,455,451,760.05 1,148,810,442.19 Including: Within 3 months (3 months included) 1,405,485,686.08 1,100,472,354.68 More than 3 months and less than 6 months (6 40,372,699.21 30,307,002.60 months included) Over 6 months and within one year (One year 9,593,374.76 18,031,084.91 included) Over one year - within 2 years (2 years 13,012,239.58 31,469,257.52 included) Over 2 years - within 3 years (3 years included) 26,677,206.61 8,570,995.44 Over 3 years 24,592,353.91 16,093,304.66 Total 1,519,733,560.15 1,204,943,999.81 (2) Category of account receivable by bad debt accrual Amount at year-end Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Account receivable that withdrawal 876,212,956.55 57.66 6.15 822,298,060.28 348 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Amount at year-end Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) bad debt provision by single item 53,914,896.27 Including: current payment with 803,660,757.46 52.88 4.92 764,106,877.25 related party 39,553,880.21 Account receivable with letter of 52,483,325.93 3.46 52,483,325.93 credit Account receivable with single minor amount but withdrawal single item 20,068,873.16 1.32 71.56 5,707,857.10 14,361,016.06 bad debt provision Account receivable withdrawal bad 643,520,603.60 42.34 2.18 629,497,473.44 debt provision by portfolio 14,023,130.16 Including: account receivable of engineering customers Receivables other than engineering 643,520,603.60 42.34 2.18 629,497,473.44 customers 14,023,130.16 Total 4.47 1,519,733,560.15 100.00 67,938,026.43 1,451,795,533.72 Continued Amount at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) Account receivable that withdrawal 966,219,951.36 80.19 41,766,187.59 4.32 924,453,763.77 bad debt provision by single item Including: current payment with 930,280,151.88 77.21 40,223,800.95 4.32 890,056,350.93 related party Account receivable with letter of 28,689,555.75 2.38 28,689,555.75 credit Account receivable with single minor amount but withdrawal single item 7,250,243.73 0.60 1,542,386.64 21.27 5,707,857.09 bad debt provision Account receivable withdrawal bad 238,724,048.45 19.81 17,616,043.17 7.38 221,108,005.28 debt provision by portfolio Including: account receivable of engineering customers Receivables other than engineering 238,724,048.45 19.81 17,616,043.17 7.38 221,108,005.28 customers Total 100.00 59,382,230.76 4.93 1,145,561,769.05 1,204,943,999.81 349 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) 1) Account receivable that withdrawal bad debt provision by single item Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minor single receivables, and withdrawal bad debt provision by combination shows no risk characteristic of the receivables, 9 clients involved. 2) Account receivable withdrawal bad debt provision by portfolio A.Account receivable of engineering customers Balance at year-end Account age Book balance Bad debt Provision ratio (%) Within 3 months (3 months included) 616,484,217.92 provision 6,164,842.18 1.00 More than 3 months and less than 6 months (6 10,991,345.13 1,099,134.51 10.00 months included)and within one year (One year 9,190,814.21 1,838,162.84 20.00 included) year - within 2 years (2 years included) Over one 2,053,806.51 1,026,903.26 50.00 Over 2 years - within 3 years (3 years included) 4,531,662.28 3,625,329.82 80.00 Over 3 years 268,757.55 268,757.55 100.00 Total 643,520,603.60 14,023,130.16 — Continued Balance at year-begin Account age Book balance Bad debt Provision ratio (%) Within 3 months (3 months included) 201,773,944.94 provision 2,017,739.45 1.00 More than 3 months and less than 6 months (6 9,319,360.50 931,936.05 10.00 months months and within one year (One year 5,821,154.56 1,164,230.91 20.00 included) year - within 2 years (2 years included) Over one 13,330,951.73 6,665,475.87 50.00 Over 2 years - within 3 years (3 years included) 8,209,879.17 6,567,903.34 80.00 Over 3 years 268,757.55 268,757.55 100.00 Total 238,724,048.45 17,616,043.17 (3) Bad debt provision of accounts receivable this year Changes this year Balance at year- Category Withdrawal or Resale or write- Balance at year-end begin Accrual reversal off Bad debt 59,382,230.76 10,411,585.73 1,855,790.06 67,938,026.43 provision Total 59,382,230.76 10,411,585.73 1,855,790.06 67,938,026.43 (4) Top five receivables collected by arrears party amounting to 812,183,738.76 yuan in total, accounted for 53.44% of the receivables of current year-end, the bad debt provision accrual correspondingly amounting to 1,965,769.40 yuan at year-end balance. 2. Other account receivable 350 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Item Balance at year-end Balance at year-begin Other account receivable 61,841,221.91 29,903,408.82 Total 61,841,221.91 29,903,408.82 Total 82,953,808.97 88,354,803.24 (1) Category of other account receivable Nature Book balance at year-end Book balance at year-begin Export rebate 41,179,511.61 12,703,975.11 Cash deposit 4,109,987.09 2,528,111.92 Loans of employee’s pretty cash 10,727,346.46 7,342,858.38 Related party not in consolidation statement 5,957,370.23 5,162,387.15 Advance money temporary 42,202.32 Other 456,265.42 2,173,873.94 Total 62,430,480.81 29,953,408.82 (2) By account age Account age Balance at year-end Balance at year-begin Within 1 year(Including 1 year) 57,173,854.18 25,568,594.52 Including: Within 3 months (3 months included) 53,994,269.35 24,770,884.16 More than 3 months and less than 6 months (6 1,161,881.37 261,521.34 months included) Over 6 months and within one year (One year 2,017,703.46 536,189.02 included) Over one year - within 2 years (2 years included) 1,206,412.81 1,445,151.00 Over 2 years - within 3 years (3 years included) 1,288,721.92 1,360,620.00 Over 3 years 2,761,491.90 1,579,043.30 Total 62,430,480.81 29,953,408.82 (3) Category of Other account receivable bad debt reserves Amount at year-end Book balance Bad debt provision Category Ratio Book value Amount Amount Ratio (%) (%) That withdrawal bad debt provision by 62,430,480.81 100.00 589,258.90 0.94 61,841,221.91 single item In which: other receivables with no major individual amount but bad debt 15,293,598.97 24.5 589,258.90 3.85 14,704,340.07 provision accrued individually Export tax refund 41,179,511.61 65.96 41,179,511.61 Related party funds 5,957,370.23 9.54 5,957,370.23 351 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) Amount at year-end Book balance Bad debt provision Category Ratio Book value Amount Amount Ratio (%) (%) Bad debt provision accrued by portfolio In which: other receivables accrued by aging portfolio Total 62,430,480.81 100.00 589,258.90 0.94 61,841,221.91 Continued Balance at year-begin Book balance Bad debt provision Category Ratio Ratio Book value Amount Amount (%) (%) That withdrawal bad debt provision 29,953,408.82 100.00 50,000.00 0.17 29,903,408.82 by single item In which: other receivables with no major individual amount but bad debt 12,044,844.24 40.21 50,000.00 0.42 11,994,844.24 provision accrued individually Export tax refund 12,703,975.11 42.41 12,703,975.11 Related party funds 5,204,589.47 17.38 5,204,589.47 Bad debt provision accrued by portfolio In which: other receivables accrued by aging portfolio Total 29,953,408.82 100.00 50,000.00 0.17 29,903,408.82 1) Accrual of bad debt provision for other receivables First stage Second stage Third stage Expected Expected credit loss Expected credit loss for Bad debt provision credit loss in for the whole the whole duration Total next 12 duration (no credit (credit impairment has months impairment) occurred) Balance as at 1 Jan. 2023 50,000.00 50,000.00 Book balance of other account receivable in Current Year as — — — — at 1 Jan. 2023 --Transfer to the second stage -- Transfer to the third stage -- Reversal to the second stage 352 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) First stage Second stage Third stage Expected Expected credit loss Expected credit loss for Bad debt provision credit loss in for the whole the whole duration Total next 12 duration (no credit (credit impairment has months impairment) occurred) -- Reversal to the first stage Provision in Current Year 539,258.90 539,258.90 Reversal in Current Year Conversion in Current Year Write off in Current Year Other change Balance as at 31 Dec. 2023 589,258.90 589,258.90 (4)Bad debt provision for other receivables accrued, recovered or reversed this year Amount of change this year Year- Category Recovery or Write-off or Year-end beginning Accrual Other reverasl cancellation Bad debt provision 50,000.00 539,258.90 589,258.90 Total 50,000.00 539,258.90 589,258.90 (5)Other account receivable actually written-off in Current Year:N/A (6) Top 5 other receivables collected by arrears party at balance of period-end Proportion in Bad debt total other Balance at year- provision Name Nature Account age receivables end Balance at ending balance year-end (%) Unit I Export rebates 41,179,511.61 Within 1 year 65.96 Employee petty Within 1 year, 2-3 Unit II 2,639,979.48 4.23 cash years, Over 3 years Employee petty Unit III 2,439,621.17 Within 1 year 3.91 cash Employee petty Unit IV 1,021,194.03 Within 1 year 1.64 cash Employee petty Within 1 year, 2-3 ,Unit V 669,693.08 1.07 cash years, Over 3 years Total 47,949,999.37 76.81 (7) There are no receivables involving government subsidies 3. Long-term equity investments 353 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) (1) Classification of long-term equity investments Ending balance Opening balance Impair Impairm Book Book balance ment Book value Book balance ent loss value loss 1,756,435,12 1,784,610,068.2 1,784,610, Investment in subsidiaries: 1,756,435,120.88 0.88 8 068.28 101,040,690. 71,749,35 Investment in associates: 101,040,690.02 71,749,356.05 02 6.05 1,857,475,81 1,856,359,424.3 1,856,359, Total 1,857,475,810.90 0.90 3 424.33 354 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) (2) Investment in subsidiaries Provision for Increased in Decreased in Current impairment Ending balance of Invested enterprise Opening balance Ending balance Current Period Period losses in the impairment Period Zhongke Meiling Cryogenic Technology Co., 42,652,000.00 42,652,000.00 Ltd Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00 Hefei Meiling Electric Appliances Marketing 54,900,000.00 54,900,000.00 Co., Ltd Zhongshan Changhong Electric Co., Ltd 304,856,419.37 304,856,419.37 Sichuan Changhong Air-conditioner Co., Ltd 955,600,437.79 955,600,437.79 Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00 Jiangxi Meiling Electric Appliance Co., Ltd. 79,000,000.00 79,000,000.00 Changhong Meiling Ridian Technology Co., 91,082,111.12 91,082,111.12 Ltd. Hefei Meiling Wulian Technology Co., Ltd. 6,000,000.00 4,000,000.00 10,000,000.00 CH-Meiling.International (Philippines) Inc. 6,889,100.00 6,889,100.00 Hefei Changhong Meiling Life Appliances Co., 35,000,000.00 35,000,000.00 Ltd. Sichuan Hongmei Intellgence Technology Co., 22,725,052.60 22,725,052.60 Ltd. Total 1,784,610,068.28 26,725,052.60 54,900,000.00 1,756,435,120.88 (3) Investment in associates Invested enterprise Opening Changes in Current Period Ending balance Ending 355 Annotations to Financial Statements of Changhong Meiling Co., Ltd. From 1 January 2023 to 31 December 2023 (Unless otherwise specified. RMB for record in the statement) balance Neg Adjustme balance Cash Provisi ativ Investment nt for of dividend or on for Ot Additional e income other Other equity impairme profit impair he Investment Inve recognized comprehe change nt announced to ment r stm under equity nsive issued loss ent income Hefei Xingmei Assets Management 19,899,176.44 33,680.34 14,139,256.78 Co., Ltd. 5,793,600.00 Sichuan Zhiyijia Network 18,633,005.73 1,629,022.64 68,854,162.70 Technology Co., Ltd. 51,850,179.61 Sichuan Hongyuan Venture 18,000,000.00 47,270.54 18,047,270.54 Investment Partnership(LP) Total 18,000,000.00 18,713,956.61 7,422,622.64 71,749,356.05 101,040,690.02 356 Notes of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) 4. Operation income, operation cost (1) Operation income and operation cost Current Period Last Period Item Income Cost Income Cost Main business 9,149,147,263.72 8,292,274,506.85 6,895,525,518.29 6,249,708,036.25 Other business 459,251,266.85 402,474,977.16 502,803,114.71 470,539,689.79 Total 9,608,398,530.57 8,694,749,484.01 7,398,328,633.00 6,720,247,726.04 (2)The decomposition information of operation income and operation cost Current Year Last Year Type Income Cost Income Cost Product Including: Refrigerator, 7,620,019,850.61 6,954,362,367.45 5,993,436,795.13 5,524,684,113.61 Freezer Air-conditioning 9,284,414.16 9,279,679.94 5,518,915.06 5,357,940.73 Washing machine 1,298,981,507.21 1,126,741,590.47 664,313,682.51 600,074,230.97 Small household appliances and 220,861,491.74 201,890,868.99 231,527,349.84 118,997,813.34 kitchen and bathroom Other products 728,775.75 593,937.60 Other businesses 459,251,266.85 402,474,977.16 502,803,114.71 470,539,689.79 Area Domestic 5,565,648,590.03 5,282,171,820.60 5,098,312,560.63 4,712,738,010.07 Overseas 4,042,749,940.54 3,412,577,663.41 2,300,016,072.37 2,007,509,715.97 Total 9,608,398,530.57 8,694,749,484.01 7,398,328,633.00 6,720,247,726.04 5. Investment income Item Current Year Last Year Long-term equity investment income by equity method 18,713,956.61 11,196,374.66 Investment income obtained from the disposal of trading financial -18,582,366.11 -563,287.28 assets Income from financial products 756,009.30 Long-term equity investment income by Cost method 168,821,072.56 47,938,347.93 Investment income of other non-current financial assets during 12,932,690.90 10,260,629.45 holding period The termination of income recognition for financial assets measured -6,157,758.00 -4,767,753.29 357 Notes of Financial Statements of Changhong Meiling Co., Ltd. January 1, 2023 to December 31, 2023 (Unless other wise specified, RMB for record in the statement) Item Current Year Last Year by amortized cost Interest income from debt investment during the holding period 14,558,956.62 14,763,930.55 Total 190,286,552.58 79,584,251.32 XIX.Supplementary in formation for financia l statement 1. Non-recurring gains and losses for this year Item Current Year Note Non-current asset disposal gain/loss(including the write-off part for 1,336,229.47 which assets impairment provision is made) Government subsidies recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the 80,683,233.76 state’s policies) Losses/gains from changes of fair values occurred in holding trading financial assets and trading financial liabilities, and investment income obtaining from the disposal of trading financial assets,trading financial -90,853,412.77 liability and financial assets available-for-sale, excluded effective hedging business relevant with normal operations of the Company Reversal of the account receivable depreciation reserves subject to 4,547,547.09 separate impairment test Other non-operating income and expenses other than the above 6,927,799.86 Subtotal 2,641,397.41 Less: impact on income tax -377,847.36 Impact on minority shareholders’ equity (post-tax) 11,396,138.62 Total -8,376,893.85 — 2. Return on equity and earnings per share Weighted average return on Earnings per share/EPS (RMB/Share) Profit during the report period equity Basic EPS Diluted EPS Net profit attributable to ordinary 13.49% 0.7195 0.7195 shareholders of the parent company Net profit attributable to ordinary shareholders of the parent company 13.64% 0.7276 0.7276 after deduction of the non-recurring gains/losses Chairman: Wu Dinggang Changhong Meiling Co., Ltd. March 30, 2024 358