2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree Electric Appliances, Inc. of Zhuhai
2023 Annual Report
April 2024
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section I Important Notice, Contents and Paraphrase
The Board of Directors, Board of Supervisors, directors, supervisors and
senior executives of the Company hereby guarantee that the contents are
authentic, accurate and complete, without false records, misleading
representations or material omissions in the Annual Report, and shall take
all the joint and several legal liabilities.
Dong Mingzhu, the Company's responsible person, Liao Jianxiong,
responsible person in charge of accounting work and Liu Yanzi, the
Accounting Department's responsible person (accounting superintendent)
hereby declare and warrant that the financial report in the Annual Report
is authentic, accurate and complete.
All the directors have attended the meeting of the Board of Directors in
respect of deliberation of the Annual Report.
The forward-looking statements such as future plans and development
strategies in the Annual Report do not constitute a substantive commitment
of the Company to investors. Investors and relevant persons should
therefore make rational investments based on an awareness of risk factors
attendant on investment and understand the differences between plans,
forecasts and commitments.
The Company's profit distribution proposal passed upon deliberation at the
meeting of the Board of Directors is set out as below: Based on the total
share capital of 5,521,943,646 shares enjoying profit distribution rights at
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
the time of disclosure of this profit distribution plan (the total stock capital
of 5,631,405,741 shares excluding the 109,462,095 shares held in the
repurchase account of the Company), the Company plans to distribute all
shareholders a cash dividend of RMB23.8 (tax included) per 10 shares, but
does not plan to give any bonus share (0 share, tax included) or convert any
capital reserves into share capital.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Contents
Section I Important Notice, Contents and Paraphrase ......................................................... 2
Section II Company Profile and Main Financial Indicators ................................................ 7
Section III Management Discussion and Analysis .............................................................. 12
Section IV Corporate Governance ........................................................................................ 56
Section V Environmental and Social Responsibility ........................................................... 79
Section VI Important Matters ............................................................................................... 91
Section VII. Changes in Shares and Shareholders ............................................................ 137
Section VIII Preferred Share Related Information .......................................................... 149
Section IX Bond Related Information ................................................................................ 150
Section X Financial Statements ........................................................................................... 151
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
References
(I) The accounting statements signed and sealed by Dong Mingzhu, the legal representative, Liao Jianxiong, chief accountant
and Liu Yanzi, head of accounting department.
(II) The original audit report sealed by Union Power Certified Public Accountants (Special General Partnership) with
signatures and seals of certified public accountants Wu Zihao and Qiu Yiwu.
(III) Originals and original drafts of all the Company's documents and announcements published on the media and CNINFO
designated by the Company within the report period.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Paraphrase
Items Means Contents
Company, the Company, the Enterprise, Gree Electric
Means Gree Electric Appliances, Inc. of Zhuhai
Appliances or Gree
Zhuhai Mingjun Investment Partnership (Limited
Zhuhai Mingjun Means
Partnership)
GREE GROUP Means Zhuhai Gree Group Co., Ltd.
Finance Company Means Zhuhai Gree Group Finance Company Limited
Jinghai Internet Technology Development Co.,
Jinghai Internet Means
Ltd.
DunAn Environment Means Zhejiang DunAn Artificial Environment Co., Ltd.
Gree Altairnano Means Gree Altairnano New Energy Inc.
CSRC Means China Securities Regulatory Commission
Report Period Means January 1, 2023 to December 31, 2023
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section II Company Profile and Main Financial Indicators
I. Company information
Stock Abbreviation Gree Electric Appliances Stock Code 000651
Stock Exchange Shenzhen Stock Exchange
Name in Chinese Gree Electric Appliances, Inc. of Zhuhai
Name Abbreviation in
Gree Electric Appliances
Chinese
Name in Foreign Language (if
Gree Electric Appliances, Inc. of Zhuhai
any)
Name Abbreviation in
Gree
Foreign Language (if any)
Legal Representative of the
Dong Mingzhu
Company
Registered Address Room 608, No. 108 Huitong Third Road, Hengqin New Area, Zhuhai
Post Code of Registered
519031
Address
Historical Changes to the
On August 26, 2021, it was changed from Jinji West Road, Qianshan, Zhuhai City, Guangdong
Company's Registered
Province to its current registered address
Address
Office Address Jinji West Road, Qianshan, Zhuhai City, Guangdong Province
Post Code of Office Address 519070
Website http://www.gree.com.cn
Email gree0651@cn.gree.com
II. Contacts and contact information
Secretary of the Board of Directors Securities Affairs Representative
Name Deng Xiaobo Wu Qingqing
Jinji West Road, Qianshan, Zhuhai City, Jinji West Road, Qianshan, Zhuhai City,
Address
Guangdong Province Guangdong Province
Tel. 0756-8669232 0756-8669232
Fax 0756-8614998 0756-8614998
Email gree0651@cn.gree.com gree0651@cn.gree.com
III. Information disclosure and place of the report
Website of the stock exchange to which the Company's Annual
Shenzhen Stock Exchange (http://www.szse.cn)
Report is disclosed
China Securities Journal, Securities Times, Shanghai Securities
Media to which the Company's Annual Report is disclosed and
News, Securities Daily, and CNINFO
its website
(http://www.cninfo.com.cn)
Place where the Company's Annual Report is available for
Investment Management Department of the Company
inspection
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
IV. Alteration of registration
Unified Social Credit Code 91440400192548256N
Changes (if any) in the main business since the listing of the
No change
Company
On December 2, 2019, Gree Group and Zhuhai Mingjun signed
the Share Transfer Agreement. Gree Group planned to transfer
902,359,632 shares of the Company with unlimited sales
conditions held by Gree Group to Zhuhai Mingjun at a price of
RMB46.17/share; On December 13, 2019, the Zhuhai
Municipal People's Government and the State-owned Assets
Supervision and Administration Commission of the State
Council (SASAC) of Zhuhai City separately approved the share
Changes (if any) in the controlling shareholders
transfer. Gree Group obtained the Transfer Registration
Confirmation issued by China Securities Depository and
Clearing Corporation Limited (CSDC) Shenzhen Branch on
February 3, 2020. The share transfer registration procedures for
the transfer of this agreement have been completed, and the
transfer date is January 23, 2020. After the completion of the
share transfer registration, the Company has neither a
controlling shareholder nor an actual controller.
V. Other related information
Accounting firm engaged by the Company
Union Power Certified Public Accountants (Special General
Name of the accounting firm
Partnership)
F/1718, Yangtze River Industry Building, No. 166 Zhongbei
Office address of the accounting firm
Road, Wuhan, Hubei Province
Names of undersigned accountants Wu Zihao and Qiu Yiwu
Sponsor engaged by the Company to perform continuous supervision during the report period
□ Applicable Not Applicable
Financial adviser engaged by the Company to perform continuous supervision during the report period
□ Applicable Not Applicable
VI. Main accounting data and financial indicators
Whether the Company has retroactive adjustment or restatement of previous accounting data
□ Yes No
Increase/Decrease
Item 2023 2022 2021
Over the Previous Year
Operating revenue
203,979,266,387.09 188,988,382,706.68 7.93% 187,868,874,892.71
(yuan)
Net profits attributable
to shareholders of the 29,017,387,604.18 24,506,623,782.46 18.41% 23,063,732,372.62
listed Company (yuan)
Net profits attributable
to shareholders of the
27,565,461,117.79 23,986,248,264.15 14.92% 21,850,050,895.31
listed Company less
non-recurring profits
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
and losses (yuan)
Net cash flows from
operating activities 56,398,426,354.17 28,668,435,921.27 96.73% 1,894,363,258.72
(yuan)
Basic earnings per
5.22 4.43 17.83% 4.04
share (yuan/share)
Diluted earnings per
5.22 4.43 17.83% 4.04
share (yuan/share)
Weighted average
26.53% 24.19% 2.34% 21.34%
return on equity
Increase/Decrease
Item At the End of 2023 At the End of 2022 Over the End of At the End of 2021
Previous Year
Total assets (yuan) 368,053,902,576.37 355,024,758,878.82 3.67% 319,598,183,780.38
Net assets attributable
to shareholders of the 116,793,716,103.39 96,758,734,892.25 20.71% 103,651,654,599.87
listed Company (yuan)
The net profits of the Company before and after deducting non-recurring profits and losses in the last three fiscal years,
whichever is lower, is negative, and the audit report of the last year shows that the Company's ability to continue as a going
concern is uncertain
□ Yes No
The net profits before and after deducting non-recurring profits and losses, whichever is lower, is negative
□ Yes No
VII. Accounting data differences under domestic and foreign accounting standards
1. Differences in net profits and net assets in the financial report disclosed under the international
accounting standards and that disclosed under the domestic accounting standards
□ Applicable Not Applicable
There was no difference in net profits and net assets in the financial report disclosed under the international accounting
standards and that disclosed under the domestic accounting standards during the report period.
2. Differences in net profits and net assets in the financial report disclosed under the overseas
accounting standards and that disclosed under the domestic accounting standards
□ Applicable Not Applicable
There was no difference in net profits and net assets in the financial report disclosed under the overseas accounting standards
and that disclosed under the domestic accounting standards during the report period.
VIII. Quarter-based main financial indicators
Unit: yuan (RMB)
Item Quarter 1 Quarter 2 Quarter 3 Quarter 4
Operating revenue 35,455,753,354.18 63,780,987,835.32 55,770,570,627.81 48,971,954,569.78
Net profits attributable
to shareholders of 4,109,253,018.34 8,563,985,798.21 7,418,868,262.12 8,925,280,525.51
listed company
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Net profits attributable
to shareholders of
listed companies after
3,723,297,678.38 8,341,838,057.39 7,149,378,505.29 8,350,946,876.73
deduction of non-
recurring profits and
losses
Net cash flows from
15,065,152,965.60 15,794,538,969.00 8,736,479,777.58 16,802,254,641.99
operating activities
Whether major differences exist between the above financial indicators or their sum and those in the disclosed quarterly
report and semi-annual report
□ Yes No
IX. Non-recurring profit and loss items and amounts
Applicable □ Not applicable
Unit: yuan (RMB)
Item Amount in 2023 Amount in 2022 Amount in 2021 Description
For details, please refer
Profits and losses from disposal of non-
to this Note V. 67, 68
current assets (including the write-off of 324,413,866.77 -51,428,778.52 -7,498,891.48
and 69 in Section X
accrued asset impairment reserves)
Financial Statements.
Governmental subsidies included in the
current profits and losses (excluding the
governmental subsidies closely relating
For details, please refer
to the normal business operations of the
to this Note V. 62 and
Company, conforming to national 784,275,516.36 873,695,831.91 875,778,734.20
68 in Section X
policies and regulations, enjoyed
Financial Statements.
according to established standards, and
having a sustained impact on the
Company's profits and losses)
Profits and losses from changes in fair
value arising from financial assets and
financial liabilities held by non-financial
enterprises, and profits and losses from
553,697,207.25 -300,034,685.05 369,460,356.97
disposal of financial assets and financial
liabilities, except for the effective
hedging business related to the
Company's normal business operations
Fund possession costs collected from the
non-financial institution and included in 6,234,097.19
the current profits and losses
Reversal of impairment reserves for the
receivables under the independent 72,395,388.85 118,276,955.90 16,844,984.00
impairment test
For details, please refer
Non-operating revenues and expenditures to Note V. 68 and 69 in
-21,226,697.92 -25,299,493.59 58,510,843.19
other than the above items Section X Financial
Statements.
Other profit and loss items conforming to
the definition of non-recurring profits 40,553,390.36 -30,904,028.44 13,691,263.12
and losses
Less: Amount affecting income tax 301,917,937.60 64,515,784.15 82,923,289.84
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount affecting minority equity
264,247.68 -585,500.25 36,416,620.04
(after tax)
Total 1,451,926,486.39 520,375,518.31 1,213,681,477.31 --
Details of other profit and loss items conforming to the definition of non-recurring profits and losses:
Applicable □ Not applicable
Unit: yuan (RMB)
Amount in current
Item Reason
report period
Other profit and loss items conforming to the definition of non- Commissions refund of individual
40,553,390.36
recurring profits and losses income tax and others
Description of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profit and
loss items
□ Applicable Not Applicable
No non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public - Non-recurring Profits and Losses were defined by the Company as
recurring profit and loss items.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section III Management Discussion and Analysis
I. Industry situation of the Company during the report period
(I) Overview of industry development
1. Consumption field - stable growth in the household appliance industry and significant recovery in the air
conditioning market
In 2023, China's economy maintained an overall recovery trend, while stimulating consumption was of utmost importance in
stabilizing growth. The state encouraged and promoted the exchange of old for new consumer goods. This action brought the
greater circulation of the consumer economy, accelerated the emergence of replacement demand, increased the sales and
export of high-efficiency products, and further exploited the potential for green consumption.
1) Stable growth in the household appliance industry
In 2023, the domestic economy has significantly recovered, and the household appliance industry has maintained stable
growth. According to the Annual Report of China's Household Appliance Industry in 2023 released by the National
Household Appliance Industry Information Center (NAIC), the export sales of the household appliance industry have
significantly increased, with an export scale of RMB617.4 billion, a year-on-year increase of 9.9%; the domestic market has
achieved stable growth, with a sales scale of RMB773.6 billion, a year-on-year increase of 1.7%.
2) Significant recovery in the air conditioning market
In 2023, the air conditioning market has significantly recovered. According to the total retail data released by All View Cloud
(AVC), in 2023, the air conditioning market achieved a retail volume of RMB211.7 billion, a year-on-year increase of 7.5%,
and a retail quantity of 60.85 million units, a year-on-year increase of 6.5%. According to the data released by ChinaIOL.com,
in 2023, the production of residential air conditioners was 168.692 million units, a year-on-year increase of 11.1%, and the
sales were 170.44 million units, a year-on-year increase of 11.2%, including the domestic sales of 99.597 million units, a
year-on-year increase of 13.8%, and the export sales of 70.843 million units, a year-on-year increase of 7.8%, achieving
growth in both domestic and foreign sales.
2. Industrial field - stable and upward trend in the industrial economy
According to the data released by the Ministry of Industry and Information Technology (MIIT), in 2023, the industrial added
value above designated size in China increased by 4.6% year-on-year, an increase of 1 percentage point year-on-year and
among them, the industrial added value above designated size in the manufacturing industry increased by 5.0% year-on-year.
The scale of the intelligent manufacturing industry is growing. From Made in China 2025 to Development Plan on Smart
Manufacturing During the "14th Five-Year Plan", relevant policies all take the development of advanced intelligent
manufacturing industry as the core goal to overall arrange and plan the promotion of manufacturing power. China has
initially formed an intelligent manufacturing industry system represented by automated production lines, intelligent detection
and assembly equipment, intelligent control systems, industrial robots, etc., and the scale of the industry is growing. The
Zhongshang Industry Research Institute forecasted that the market scale of intelligent manufacturing equipment in China can
exceed RMB2.97 trillion in 2023. The Forward Industry Research Institute forecasts that by 2027, the market scale of China's
intelligent manufacturing industry will reach RMB6.6 trillion, of which the market scale of intelligent manufacturing
equipment is about RMB5.4 trillion and that of intelligent manufacturing system solutions is about RMB1.2 trillion. In 2023,
China accelerated the technological transformation and upgrading of traditional industries, strengthened the promotion of
intelligent manufacturing, established 62 "lighthouse factories", accounting for 40% of the Global Lighthouse Network, and
cultivated 421 national-level intelligent manufacturing demonstration factories, as well as more than 10,000 provincial-level
digital workshops and intelligent factories.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The industrial scale of air conditioning core parts and components increases significantly. According to the data released by
ChinaIOL.com, in 2023, the air conditioning rotor compressor market developed at a high speed; the annual output reached
261 million units, with a year-on-year increase of 12.2%, and the annual sales reached 262 million units, becoming the new
peak of the industry. In the domestic market, the performance of rotor compressor is outstanding, and it has maintained a
positive growth throughout the year. The domestic sales were expected to be 227 million units, with a year-on-year increase
of 14.3%; In the export market, the annual export was expected to be 35.647 million units, with a year-on-year increase of
2.1%. Benefiting from the growth in the sales scale of the downstream air conditioning market in 2023, both the production
scale and the sales scale of the air conditioning motor industry increased, reaching 422 million units, with a year-on-year
increase of 6.8%; the domestic market output about 350 million units, with a year-on-year increase of 8.4%; and the export
market output about 70 million units, flat year-on-year. The growth of the compressor industry and the motor industry has
provided strong support for the development of the entire air conditioning industry.
The new energy industry contributes to sustainable development. Following the path specified by China's carbon peaking and
carbon neutrality (dual carbon) phased goals, the proportion of non-fossil energy production and consumption will increase
rapidly in the future. The Annual Development Report of China's Electrification in 2022 stated that the consumption
proportion of electric energy in end-use energy is expected to exceed 30% in 2025. Under the background of low-carbon
transformation and development, promoting the electrification of energy systems and low-carbon power systems, and
building safe and efficient new power systems and energy storage systems centering new energy will give continuous support
for achieving the goal of green, low-carbon, and sustainable development.
II. Major businesses of the Company during the report period
Gree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and has three major
consumer brands of Gree, TOSOT and KINGHOME, and industrial brands of LANDA, Kaibang, and Xinyuan, etc. Its
industry covers two major areas of household consumer goods and industrial equipment. In the consumption field, it covers
residential air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental
appliances, smart buildings, and smart household appliances; In the industrial field, it covers high-end equipment, precision
molds, freezers and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting
equipment, basic materials, industrial energy storage, renewable resources, etc. So far, Gree products have served more than
600 million consumers in more than 190 countries and regions around the world, and continue to meet people's needs for a
better life.
According to the data released by AVC, the online retail share of Gree residential air conditioners in 2023 was 28.15%,
ranking first; among them, the online and offline retail shares of Gree floor-standing air conditioner were 30.28% and
34.43%, respectively, ranking first in the industry. According to the 2023 Report on the Development of China's Central Air
Conditioning Industry released in the ihos's HVAC and Heat Pump, Gree achieved the first sales scale among mainstream
brands in the central air conditioning industry with a market scale of more than RMB20 billion in 2023, and ranked first in
the central air conditioning market for 12 consecutive years. There are obvious advantages in the market competition for
high-end products such as floor-standing air conditioners and central air conditioners.
In 2023, the Company focused on consumer demands and continued to create multiple series of electrical products, gradually
forming a brand image of "Gree, Making Better Electric Appliances". According to the data released by AVC, the online
retail market share of electric fans in 2023 was 18.07%, ranking second in the industry; the online retail market share of
electric heaters is 13.10%, also ranking second in the industry.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
III. Core competence analysis
Gree Electric Appliances, revolving around carrying forward industrial spirit, mastering core technologies, pursuing perfect
quality, and providing first-class services, has been making innovations in technology to attain high-quality development,
provide a better life for the people, create value for society, promote the progress of society, and achieve the corporate vision
of Gree's century-old brand.
(I) Take a century-old brand as the vision and aim to create a first-class enterprise
The Company firmly follows the path of brand self-development, and has established a great valuable brand with leading
core technologies, excellent product quality, and a complete service system. Adhering to keeping up with the times and
constantly absorbing new concepts, Gree has embarked on a new era and journey of "Jointly Creating A Better Life for
Humanity", from "Gree, Making Better Air Conditioners", "Gree, the Master of Core Technologies" to "Made in China,
Loved by the World".
On the Chinese Brand Value Evaluation List, the Company has consistently ranked first in the household appliance industry
for many years, and the brand value has been gradually increasing. In 2023, with the outstanding comprehensive strength, the
Company was again listed in "Forbes Top 2000 Global Enterprises", "Forbes Top 2000 Global Best Employers" in 2023, and
on "China's Top 500 Private Enterprises in 2023", and won the honor of "Pacesetter of Brand Value in 2023" and the honor
of the first "2023 China-chic Innovation Model Pioneer Brand" of China Media Group (CMG). In the "2023 China Brand
Value Evaluation Information", the Company ranked first in the light industry group's household appliance industry with a
brand value of RMB162.883 billion. In addition, the Company won honors such as "China's World Famous Brand", "The
Most Competitive Brand in the Market", "National Quality Award", "Export Exemption Enterprise", "China Brand
Innovation Award", "China's Top 100 Light Industry Technology Enterprises", "China's Top 500 Enterprises in Credit", and
"2023 Excellent Green Development Cases". It has topped the air conditioning customer satisfaction list for 12 consecutive
years. The Company builds and establishes its brand based on perfect quality and internationally leading technology,
continuously creating value for society.
(II) Stick to the path of independent innovation and lead the development of the industry
Taking technology as the core driving force for development and adhering to the principles of "independent research and
development of core technologies" and "investment as needed without an upper limit", the Company has built a multi-level
and high-level research and development platform based on national scientific research platforms, forming a technology
innovation system that is "enterprise-oriented, market-oriented, and combined industry, academia, and research", in such a
way as to conquer key bottleneck technologies one by one and lead the industry development.
The Company has the world's largest air conditioning R&D center. It has established 16 research institutes, 152 research
institutions, 1,411 laboratories, 1 academician workstation, as well as 1 national key laboratory, 1 national engineering
technology research center, 1 State-level Industrial Design Center, and 1 State Recognized Enterprise Technology Center. In
addition, it has also become a research and evaluation base for refrigeration equipment of the National Notification Enquiry
Center. As of the end of 2023, the Company has received a total of 114 important awards at the national, provincial, and
industrial levels, and has possessed 40 "world-leading" technologies; has applied for 119,261 patents, including 64,174
invention patents; has obtained 20,416 invention patent grants, making it the only household appliance enterprise to enter the
top ten in China's invention patent grants for eight consecutive years; has won 77 Chinese patent awards, including 3 gold
awards for invention and 3 gold awards for appearance; and has got 14 gold awards of International Exhibition of Inventions
of Geneva and 10 gold awards of iENA. At the same time, the Company is one of the first batch of national enterprise
intellectual property demonstration unit, "National Patent Operation Pilot Enterprise", and won the China Trademark Gold
Award. The Company's steady increase in the number and quality of patents fully demonstrates Gree Electric Appliances's
invention and creation capabilities and international leading research and development strength to the world.
(III) Pursue perfect quality and support Made in China
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
One of the Company's mission is to pursue perfect quality. To this end, adhering to the three major quality control principles
of "never take consumer as an experiment", "everyone is a quality inspector", and "perfect quality is achieved through
fighting", the Company has successively proposed and established the "T9 Total Quality Control Model", the "D-CTFP
Quality Technology Innovation Cycle Methodology", and Gree's 'Perfect Quality' management model of "Made in China,
Loved by the World". The Company adheres to integrity management, takes national and international standards as the
threshold, with meeting consumer needs as the highest standard, perseveres in "Made in China, Loved by the World", and
contributes to China's grand goal of becoming a manufacturing and quality powerhouse.
The Company actively leads or participates in the development of international standards and makes good use of its advanced
core technologies and standards to help improve the industry quality. It has led and participated in the development of 836
international and national standards, including 58 international and foreign standards, and has led the development of 8 ISO
and IEC international standards; and has undertaken and participated in 140 standardization organizations related to the
household appliance industry at home and abroad, including 37 international and foreign standardization organizations. In
2018, Gree's 'Perfect Quality' management model of "Made in China, Loved by the World" won the third China Quality
Award, which is the highest award in the field of quality in China. In 2023, Gree Electric Appliances and the School of
Business Administration of South China University of Technology jointly wrote Pursuing Perfection - Innovation &
Progress: Gree Quality Model, which was selected for the "Best Quality Practices in China in the 21st Century" series
published by Standards Press of China
In 2023, according to the evaluation data from the Customer Satisfaction Evaluation Center of China National Institute of
Standardization, Gree's air conditioning products have maintained the industry's top customer satisfaction for 12 consecutive
years. The Company always relies on reputation to build its brand, occupy the market, and gain development advantages. Its
products have been exported to more than 190 countries and regions worldwide, with over 600 million users witnessing the
leading technology and excellent quality of "Gree Manufacturing".
(IV) Integrate online and offline business formats and create a channel ecological layout
The Company keeps establishing self-control and win-win sales channels and sales models, and implements a transformation
of "new retail" marketing model integrating online and offline channels. Based on 30 regions, over 30,000 offline outlets, and
official flagship stores of third-party e-commerce platforms, the Company established a dual-line sales network covering the
whole country. The Company is closely following the trend of smart retail and actively creating offline scene marketing
models to provide an experiential and immersive shopping environment. It also applies Internet engineering technology to
sales channels. Through the construction of digital information system, it connects all links of procurement, logistics, sales,
and service to realize the digital upgrading of terminal stores and the reform of retail channel flattening and integrates online
and offline channels to improve the overall efficiency of channels and the user service level.
(V) Accelerate the optimization of industrial chain layout and cultivate new quality productivity with the
craftsmanship spirit
The Company has developed into a diversified and technology-based global industrial manufacturing group, covering
household consumer goods and industrial equipment. Through the means of acquisition, self-research, etc., it has laid out
core components, production and manufacturing, green recycling and other sectors in the industrial chain, forming a circular
industry and enhancing the Company's core competitiveness and sustainable development capability.
In terms of core industrial components, the Company has strong R&D and manufacturing capabilities, laying a solid
foundation for the Company's high-quality development. The Company has completed the layout of core components in the
consumption and industrial fields, such as compressors, motors, molds, controllers, chips, enameled wires, capacitors,
intelligent equipment, CNC machine tools, robots, and cold chains. Through the acquisition of DunAn, Gree Altairnano, etc.,
the Company has further integrated the fields of refrigeration accessories, new energy vehicle thermal management, energy
storage, and battery manufacturing equipment, achieving independent and controllable core components in the consumption
and industrial sectors.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
In terms of production layout, the Company has established 77 production bases at home and abroad, located in Guangdong,
Chongqing, Anhui, Hebei, Henan, Hubei, Hunan, Jiangsu, Zhejiang, Tianjin, Sichuan, Jiangxi, Shandong, and Brazil. Among
them, the Company has 14 air conditioning production bases in China, including Zhuhai, Chongqing, Hefei, Zhengzhou,
Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou, Nanjing, Luoyang, Ganzhou, Linyi, and Zhuhai Gaolan Port. It also has
5 major household appliance production bases, respectively in Zhongshan, Shijiazhuang, Suqian, Chengdu, and Changsha.
Therefore, the production layout gains a highly coordinated development of industrial agglomeration and upstream and
downstream industrial chains, ensures the independent manufacturing of the Company's products and core components,
optimizes efficiency, and further stabilizes the competitiveness of the Company's products. The Gree intelligent
manufacturing factory built by the Company in Gaolan Port, Zhuhai, integrates the industrial advantages of intelligent
equipment, industrial Internet, and digital technology and realizes self-sensing, self-learning, self-decision-making, self-
executing, and self-adapting intelligent whole-process manufacturing, creating a new intelligent manufacturing factory and
empowering new quality productivity with production innovation.
In terms of downstream recycling, since 2010, the Company has successively established six renewable resource bases in
Changsha, Zhengzhou, Shijiazhuang, Wuhu, Tianjin, and Zhuhai. These bases are mainly engaged in the recycling and
treatment of waste electrical and electronic products, scrapped cars, as well as the deep processing and resource recovery of
waste circuit boards and waste plastics. This action indicates that the entire industry chain from production to downstream
recycling is covered, achieving green, circular, and sustainable development, and has now reached industry leadership. Now,
it has the qualification capacity of dismantling 13 million units of used household appliances, 75,000 vehicles, 180,000 tons
of recycled plastic processing capacity, and 60,000 tons of waste circuit board processing qualification capacity.
(VI) Carry out independent talent cultivation and drive innovative development
As a technology-driven enterprise, the Company has always regarded talent cultivation as an important strategic resource for
enterprise development and adhering to the concept of "no upper limit on R&D costs", provides employees with a R&D
platform to accumulate strength for technological innovation. The Company has established a set of "selection, training,
employment, retention" talent training system. Through the construction of a learning organization, continuous learning for
grassroots backbone management and other systems, it promotes the inheritance of management experience, sharing of R&D
technology, and improvement of skills and literacy; organizes and carries out "vanguards" and college students talent training
projects targeting key groups, providing comprehensive and multi-level training support for grassroots management and fresh
college students; and relying on the construction project of national-level high-skilled talent training base, it cultivates high-
skilled professional talents for itself and further enhances its core competitiveness.
As of the end of 2023, the Company has 50,000 R&D personnel and technical workers; and the Group has 14,000 newly
assessed skilled talents, of which, 1 has won the title of "National Technical Expert", 8 have won the title of "Guangdong
Provincial Technical Expert", 2 has won the title of "Nanyue Technical Expert", and 5 have won the title of "Zhuhai
Municipal Technical Expert". There are also 4 "Zhuhai Municipal Post Technical Expert Pacesetters", 16 "Zhuhai Municipal
Chief Technical Experts", 11 "Zhuhai Special Artisans", and 306 "Zhuhai Artisans". The Company has obvious advantages in
talent cultivation, talent welfare system construction, etc. and has been nominated for "Forbes Global Best Employers" for 9
consecutive years.
The Company will continue to strengthen the construction of talent team, share the dividends from the enterprise's
development through multiple channels such as the employee stock ownership plan, talent subsidies, talent housing, policy-
based care for public college degree, and dual-day off work system, and continuously improve employee satisfaction and
happiness. In addition, Gree will strengthen cooperation with universities and research institutions, jointly cultivate more top-
notch innovative talents, and provide strong support for the innovative development of the enterprise.
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IV. Analysis of main business
1. Overview
Insisting on the business philosophy of "Made in China, Loved by the World", relying on the efforts, courage, and continuous
innovation of Gree people worldwide, the Company has created the best performance since its establishment 33 years ago. In
2023, the total operating revenue of the Company exceeded RMB205.18 billion, a year-on-year increase of 7.82%, and the
net profit attributable to the parent company exceeded RMB29.017 billion, a year-on-year increase of 18.41%.
(I) Adhere to independent innovation and activate new quality productivity
1. Drive innovation through technology and become an industry benchmark
Gree adheres to the concept of "Made in China, Loved by the World", continuously innovates in the field of technology,
drives the value chain with the innovation chain, and supports the innovation chain with the value chain.
During the report period, in response to the long-standing problem of underground heat injury in the coal industry, the
Company developed the "Key technologies and applications of new refrigeration packaged equipment for heat treatment in
deep mine" project, which can generally reduce the temperature of coal mining face by more than 10°C and humidity by
more than 30%, improve the working environment of underground workers, and greatly increase the raw coal production
while ensuring safety. After appraisal by the China Machinery Industry Federation and Appraisal Committee, the overall
technology has reached the international leading level; the "High-efficiency Heat Pump Technology Based on Floor Heat
Storage" project developed by the Company plays a huge role in promoting the integration of China's dual carbon goals and
"dual transformation" (digitalization promotes greenization), and the overall technology has reached the international leading
level; and the "Innovation and Application of a New Generation of Intelligent Environmental Control System for Ventilation
and Air Conditioning Based on Direct Expansion Technology" project developed by the Company has reached the
international leading level via expert appraisal. The Company's "High-efficiency Electrothermal Dual Drive Bacteria
Disinfection Technology and Its Application in Air Purifier" project and "Key Technologies and Industrialization of High-
efficiency and Low-noise Air Conditioner Motor" project both won the first prize of Science and Technology Award of
China National Light Industry Council; the "Key Technologies and Application of Cloud Management for Multi-split Air
Conditioning Units" project based on application characteristics won the second prize of Science and Technology Award of
China National Light Industry Council. The "Magnetic Bearing Refrigeration Compressor Key Technologies and
Industrialization" project won the first prize of the 2022 Guangdong Provincial Science and Technology Award for Science
and Technology Progress, and the "Development of Large-scale High-efficiency Inverter Ice-storage and Refrigerating
Centrifugal Unit and Application in Integrated Intelligent Energy" project and the "Key Technologies and Application on
High-efficiency Direct-cooling Air Conditioning Unit for Large Space" project, respectively, won the second prize of the
2022 Guangdong Provincial Science and Technology Award for Science and Technology Progress.
During the report period, the Company won 15 international design awards (9 German iF Industrie Forum Design Awards
and 6 German Red Dot Design Awards) and the AWE Innovation Award. As of the end of 2023, Gree Electric Appliances
has received a total of 114 important awards at the national, provincial, and industrial levels and has possessed 40 "World-
leading" technologies, demonstrating Gree’s strong innovation ability.
2. Strengthen intellectual property protection and ensure independent innovation
The Company has established a scientific intellectual property reward mechanism and an annual high amount of scientific
and technological progress reward fund to reward units and individuals who have achieved outstanding results in
management and technology innovation that year, greatly mobilizing the innovation enthusiasm of scientific researchers; the
Company also has developed a "full-process intellectual property management system" to achieve electronic management for
the entire life cycle of intellectual property from the source to the end.
During the report period, three subsidiaries of the Company were rated as National Intellectual Property Demonstration
Enterprise, and three subsidiaries were rated as National Intellectual Property Advantage Enterprise. As of the end of 2023,
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Gree Electric Appliances's 7 companies have been selected as National Intellectual Property Demonstration Enterprise and 17
companies as National Intellectual Property Advantage Enterprise. By 2023, the Company has applied for 10,297 patents,
including 7,165 invention patents, and has obtained 3,640 invention patent grants. In addition, it has received 6 China Patent
Excellence Awards and 2 provincial patent gold awards; it also has won 3 gold, 3 silver, and 2 bronze awards at the
International Exhibition of Inventions of Geneva and Nuremberg, once again showing the power of Gree Creation to the
world.
(II)Pursue perfect quality, lead standard construction, and provide high-quality services
1. Optimize the perfect quality management model and further promote the high-level development of enterprise
quality
The Company vigorously promotes quality management innovation, method innovation, and theory innovation, represented
by the proposal of the forward quality-driven "Five Steps of Quality Prevention" and the reverse quality-driven "D-CTFP
Quality Technology Innovation Cycle Methodology". With the T9 total quality control mode and PQAM perfect quality
assurance mode as the core architecture, the Company integrates classic management theory with rich enterprise practice and
creatively constructs Gree Perfect Quality Management Model for its goal of "Made in China, Loved by the World".
During the report period, the Company continuously optimized the perfect quality management model, improved the
shortcomings in quality management, and ensured the high-level development of enterprise quality. In order to meet the
R&D and testing needs of diversified electrical products, the Company has established standard product laboratories for air
conditioners, large commercial air conditioners, household appliances, refrigerators, washing machines, compressors, motors,
industrial robots, etc., covering the performance, safety, noise, EMC, and chemical fields of air conditioners and refrigeration
units, and household appliances, so as to ensure product quality. In the First Selection of the Quality Control Pioneer of
Electronic and Electrical Laboratories by the China Inspection and Testing Society, the Company was selected as the
"Quality Control Pioneer of Electronic and Electrical Laboratories" and became one of the first domestic enterprises to
receive this honor; the Company's "Innovative Research and Application of Residential Air Conditioner with Distributed Air
Supply" and "Research and Practice on Intelligent Testing and Traceability of Safety Performance in the Whole Process of
Digital Air Conditioning Based on the Neural Network System" projects won the second prize of the 2023 China Quality
Award; and the Company's "Research and Application of Environmental Adaptability Improvement Technology for Air
Conditioners" and "Research and Application of Quality Assurance Technology for Fully Domestic Air Conditioning
Electronic Control Systems" projects won the Excellent Award of the 2023 China Quality Award.
2. Continue to promote standardization and foster international right of speech
The Company always upholds the core concept of meeting consumer needs, focuses on promoting the internationalization
process of independent innovation technology and standards, and is committed to continuously achieving new breakthroughs
and competitive advantages in international standardization work.
During the report period, Chairperson Dong Mingzhu of the Company was awarded the highest national standardization
award - Outstanding Contribution Award of China Standard Innovation Contribution Award, making her the only
entrepreneur to receive this award this time; the General Technology Requirements for Intelligent Household Appliances
(GB/T 28219-2018), which was specially developed under the leadership of the Company, won the third prize of the China
Standards Innovation and Contribution Award; the Company was awarded the title of "Advanced Collective in National
Light Industry Standardization Work from 2021 to 2022"; and the Company acts as a deputy leader-level domestic
technology counterpart targeting IEC/TC59/SC59N (International Electrotechnical Commission/Performance of Household
and Similar Electrical Appliances/Electrical Air Cleaners for Household and Similar Purposes), and it is the first household
appliance manufacturer among more than 200 IEC domestic technology counterparts. The Company has been selected as one
of the first batch of national standard verification points, becoming the only enterprise in the refrigeration industry to be
selected. The research and evaluation base for technical trade measures of refrigeration equipment undertaken by the
Company has been rated as one of the five excellent evaluation bases in China.
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In 2023, Gree Electric Appliances's 11 enterprise standards were shortlisted for the 2023 Enterprise Standard Forerunner,
which is an event guided by the National Development and Reform Commission and the State Administration for Market
Regulation while third-party evaluation agencies are responsible for selection, and the number of finalists was the first in the
home appliance industry. Since 2018, Gree Electric Appliances has been listed as the Enterprise Standard Forerunner for six
consecutive years. In the past four years, it has led the industry in the number of enterprise standards and has obtained a total
of 88 Enterprise Standard Forerunner certificates, ranking first in the home appliance industry in terms of the number of
finalists.
3. Provide high-quality services and boost quality upgrades
During the report period, the Company relied on the "old for new" business model, combined with its own sales and after-
sales systems, to launch the integrated service model of "new machine assembly and old machine disassembly", further
mitigating the core pain points of reverse logistics recycling, warehousing consolidation, and other aspects, significantly
improving the user replacement experience, promoting the upgrading of household appliance consumption, and
implementing the 5.4 million units recycling target required by the producer recycling responsibility system, so that more
consumers can enjoy policy benefits of environmental protection, standardization, convenient recycling, and resource reuse.
According to the evaluation data from the Customer Satisfaction Evaluation Center of China National Institute of
Standardization, since 2011, Gree's air conditioning products have maintained the industry's top customer satisfaction for 12
consecutive years.
(III) Innovate high-quality products and serve a better life
1. Air conditioner sector - focus on market demands and improve product matrices
1) Residential air conditioner - target customer demands and keep moving in product optimization In 2023, according
to the report from ChinaIOL.com, the Company's domestic sales of residential air conditioner reached 29.79 million units, a
year-on-year increase of 4.05%. During the report period, the Company enhanced the fashion of products from the
perspectives of design, colors, materials, etc. and continued to increase investment in the design of new products in new
fields. A total of 8 new series products were launched to tailor for different consumer levels of residential air conditioners. In
terms of split-type air conditioners, the Company launched a new split-type air conditioner, named Satin Time, which
increases the air volume through a new air duct design, with a circulating air volume of up to 650 m/h and an air supply
distance of up to 6 m; optimizes and upgrades the air guide structure, effectively achieving cold air uplift, that is, avoiding
direct blowing to people, and achieving separation of cold and hot air ducts. In terms of floor-standing air conditioners, the
Company continued to improve the product matrix of the new generation of up-and-down air outlet series and launched series
products such as Satin Time and GreeChina Chic. In the process, by adopting a new efficient double-suction & two-way
centrifugal fan system design and three innovative technologies, the overall performance and air supply comfort of such
products were improved, and the cumulative sales of the new generation of top and bottom air discharge series throughout the
year exceeded 100,000 sets, a year-on-year increase of 116%.
2) HVAC - empower products with technology and maintain leading in the market
The Company's HVAC sector covers over a thousand categories of 13 major series, including centrifugal chiller, VRF, screw
chiller, modular unit, packaged unit, condensing unit, and precision air conditioner, which, by continuously upgrading
product technology, can meet the equipment demands of different working conditions, scenarios, and industries, and serve
major benchmarking projects. According to Aircon's 2023 China Central Air Conditioning Market Report, Gree's central air
conditioner sector achieved the best market share for 12 consecutive years since 2012.
① Household central air conditioner - empower products with technology and create smart homes
In the household central air conditioner sector, Gree empowers products with technologies and to meet the diverse needs of
users, creates smart and comfortable home systems. During the report period, the Company launched two major series,
namely K+ series and K+ PRO series high-efficiency inverter duct-type air conditioning units targeting mid-to-high-end
consumer groups of the factory-installed market. The energy efficiency of the entire series far exceeds the national primary
energy efficiency standard, ushering in the "primary energy efficiency era" of duct-type air conditioners. At the same time,
the Company launched the optional accessories: 3D air vent and purification module (for particles and formaldehyde removal)
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for duct-type air conditioners, allowing customers to enjoy upgraded comfortable and healthy services. The newly launched
fresh air purifiers, such as Qinyuefeng and Jingyuefeng, effectively solve the problem of unsafe installation due to large-
diameter through beam drilling and provide users with a clean, peaceful, and comfortable bedroom fresh air experience.
② Commercial VRF - rely on technological advantages and provide customers with more valuable products
During the report period, the Company launched a new generation of GMV S commercial central air conditioning units,
providing users with strong cooling and heating effects, achieving targeted deep energy-saving and ultimate quiet experience
based on commercial premises. In the units, Gree's latest generation enthalpy-adding VRF technology and upgraded GMV
Water heat pump VRF are combined and the advantages of conventional water system and VRF system are integrated to
reduce the installation space of the units, and the units can be installed on the equipment floor to enhance the aesthetic value
of the building; multiple renewable resources can be utilized in the units to further improve energy efficiency.
During the report period, the Company continued to make efforts in project expansion in the commercial, real estate, and rail
transit industries and reached strategic partnerships with multiple industry-leading enterprises. It continuously exported
commercial VRF models and set benchmark sample engineering in many fields, further consolidating the leading position of
commercial VRF in the industry.
③ Clean heating - construct full building heating and spur sustainable development
The Company is committed to developing advanced heat pump technology and equipment, based on six categories of low-
temperature heat sources (air source, surface water, geothermal, data center, process industry, and power plant), and centered
on three types of key heat pump equipment (air source heat pump, ground source heat pump, high-capacity high-temperature
heat pump), to create full-scenario high-efficient thermal energy system solutions and serve four major application scenarios
(domestic hot water, building heating, industrial and agricultural heat, and industrial steam). At present, the Company has
established a full building heating product system, equipped with a series of advanced heat pump technologies such as
enhanced vapor injection vortex compressor, three-cylinder and dual-stage rotor compressor, permanent magnet inverter and
variable capacity screw compressor, double head series centrifugal compressor, air suspension/electromagnetic suspension
oil-free steam compressor, and has won the leading brand award in the heat pump industry for many years.
During the report period, the Company launched the Huofenghuang Supreme household heating and cooling (integrated) unit,
including single-heat and three-phase power special models, to meet the differentiated needs of the market. Besides, the
Company deepened the heat pump industry and launched commercial high-temperature heat pump water heaters and Jinquan
direct heating pressure water heaters to meet the needs of industry, agriculture, and high-end comfort. Relying on the
Company's innovation advantages in energy conservation research, focusing on clean and green heat products in segmented
markets, a new full-scenario application pattern of heat pumps has been constructed, promoting the application and
development of heat pump technology in more fields.
④ Precision air conditioner - create self-developed brands and meet market demands
The Company focuses on the "double carbon" strategy, helps the development and construction of green data centers, and
contributes to the construction of a clean, low-carbon, safe, and efficient energy system. During the report period, the
Company developed the air-cooled fluorine pump inverter intelligent double-cycle air conditioning unit for machine rooms,
which can automatically switch over the compressor refrigeration mode, the mixed (compressor + fluorine pump)
refrigeration mode, and the fluorine pump refrigeration mode according to the indoor and outdoor temperature difference in
different seasons, so as to ensure the energy-saving and efficient operation of the unit under stable and reliable conditions,
reduce the energy consumption of the whole unit, and save the operation cost; at the same time, a new and efficient cooling
method is selected to ensure the computing capacity of the server, meet the requirements of low PUE construction in the data
center, and ensure the operation of the server in the data center with extreme energy efficiency.
⑤ Freezing and refrigeration equipment - strengthen all cold chain products with technology and accelerate industry
development
Promoting the high-quality development of cold chain logistics is an important foundation to support and help rural
revitalization, is to improve the quality and safety systems of fresh agricultural products "from farmland to table, from the
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branches to the tongues", is to enhance the quality control ability for the whole process of pharmaceutical product logistics,
and is an important guarantee to support the implementation of food safety strategy and build a healthy China.
During the report period, the Company launched a new -86°C ultra-low temperature freezer, which can be used to store
viruses, bacterial samples, vaccines, and biological tissues and organs. The product features a fast cooling speed due to low-
temperature enhanced heat transfer technology and combined with precise temperature control technology and multiple
enhanced insulation technology, good temperature uniformity inside, so it can fully meet the requirements of low-
temperature storage applications in scientific research, biomedicine, pharmaceutical enterprises, and other fields. In response
to the call of the national green development policy, the Company also launched a new low-temperature hot fluorine
defrosting refrigeration unit. It has a full range of cooling capacity of 312 HP and can meet the storage temperature
requirements of -25°C15°C. Moreover, It has the advantages of high energy efficiency, accurate temperature control,
reliable operation, and others, leading the industry to build a low-carbon, green, and energy-saving cold storage system.
⑥ Large-scale water heater - delve into market demands and continuous technology innovation and become an
industry leader
During the report period, the Company launched the industrial large-capacity high-temperature centrifugal heat pump unit,
characterized by outstanding energy conservation, reliability, and adaptability, and the hot water outlet temperature is as high
as 120°C, filling the gap in the high-temperature heat pump market. The unit directly uses the heat pump unit to flash the
low-pressure steam of 100°C120°C at the primary temperature rise or with the help of steam compressor, the high-pressure
steam of 120°C160°C at the secondary enhanced temperature rise, which can meet the 80°C150°C heat requirements in
non-process industries such as food, medicine, and printing and dyeing and replace coal-fired and gas-fired boilers in non-
process industries, with more obvious economic advantages.
2. Home appliance sector - make "better appliances" through technological innovation
Revolving around the core development strategy from "Gree, Making Better Air Conditioners" to "Gree, Making Better
Electric Appliances", the Company persists in the orientation of health, intelligence, and personalization and implements a
systematic layout, realizing full coverage of industries such as kitchen appliances, environmental appliances, refrigerators,
and washing machines, and continues to build multiple series of intelligent household appliances focusing on consumer
demands.
1) Environmental appliance - dig deep into customer demands and upgrade product services
During the report period, the Company developed an energy storage folding circulation fan, with a built-in 5,200 mAh
battery, which can last about 10 h. The air speed is up to 4.6 m/s, the noise is as low as 30 dB(A), and the fan has dual usage
of placing on a desk and hanging, suitable for a variety of home and outdoor use scenarios. The Company also developed a
3D floor scrubber that can reach and clean dirt at edges and corners. The scrubber can intelligently sense the degree of
contamination and automatically adjust the suction or water output. In addition, it is equipped with heat-conduction air drying
technology for safe drying. According to the AVC data in 2023, the Company's online retail sales of electric fans have a
market share of 18.07%, ranking second in the industry.
2) Kitchen appliance - improve product technology and product quality
During the report period, the Company adhered to the core positioning of "simple cooking and healthy eating" and continued
to improve the functional effect of products through technological innovation to give customers a good cooking experience.
For example, the steam oven developed by the Company applies the steaming and baking 2.0 technology, and it adopts the
multi-dimensional heat field energy directional distribution scheme to realize simultaneous steaming and baking of three
dishes and rice without accessories, improving users' convenience while ensuring good taste, nutrition, and no tainting of
food materials. The new 16-liter gas water heater launched by the Company adopts a new high-efficiency coilless single-row
heat exchange technology, which improves the heat exchange efficiency by 10%, enhances the corrosion resistance, and
strengthens the reliability and durability, and it is unanimously recognized by customers.
3) Refrigerator - drive product and service upgrading with innovative technology
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The Company has overcome core technical problems in the preservation of fruits, vegetables, and meat in the household
refrigerator industry, developed world-leading key technologies for the preservation of fruits, vegetables, and meat in
household refrigerators, and manufactured products that meet the high-quality storage requirements of food materials. During
the report period, the Company launched a series of second-generation all-around freshness preservation refrigerators. The
series is equipped with a number of world-leading technologies such as fruit and vegetable preservation technology based on
self-balancing high permeability film and air source gas phase humidity, natural convection supercooled meat preservation
technology, and meat ultra-freezing storage technology of broadband fully sealed piston compressor. It has three core
functions: soft-freezing 2.0, ultra-freezing and fresh-keeping, and photosynthetic moisturized fresh-keeping, as well as
characteristic functions, for example, HCP full space sterilization and purification, dot matrix precise temperature control,
closed moisture control zone, and four temperature control options. The series can further enhance the refrigerator use
experience through the design of closed exclusive space, visual sterilization display, easy-to-take bottle frame, three-step
drawer, and other details.
4) Washer and dryer combo sector - inherit core technologies and lead the industry in terms of washing and drying
effects
For washer and dryer combo products, Gree has adhered to the direction of "leading heat pump washing and drying" and "AI
intelligent washing". Guided by consumers’ demands, it has been committed to meeting targeted customer demands. During
the report period, after comprehensive research and upgrading on the washing, drying, and care of conventional clothes and
delicate clothing materials, the Company launched the second-generation heat pump washer dryer, achieving a significant
improvement in the washing, drying, and care performance and user experience. In terms of intelligent applications, it can
realize one-button automatic door opening without manual pushing and pulling, so as to improve user experience. After the
washing program ends, it can automatically open the door to keep the air circulation in the cylinder and prevent clothes from
being stuffy and smelly. Equipped with the iCleaner2.0 all-round intelligent cleaning system, the self-cleaning of the drying
filter and heat exchanger has been upgraded from passive washing to active washing + brushing, improving the cleanliness to
100% and the drying efficiency of clothes, and eliminating secondary pollution of clothes. In terms of health, using anti-mold
and antibacterial door seals, the antibacterial rate reaches 99%, effectively preventing door seals from getting moldy and
breeding bacteria, and maintaining a clean laundry environment. Equipped with a 60°C cylinder cleaning function, high-
temperature water flow meticulously cleans the dirt and residue inside and outside the cylinder, offering a clean laundry
environment. Fitted with a dual spray system, it can clean the glass door and door seal rings to avoid secondary pollution
caused by foam or stain residue. Nano Ag+ ions slowly release when in contact with water and can achieve sterilization even
when washing at room temperature, with a sterilization rate of over 99.9%. Steam care is intended to remove bacteria mites,
with a bacteria removal rate of over 99.99% and a mite removal rate of over 99%.
(IV)Grasp the core links of industrial products and assist the Company in high-quality development
Gree Electric Appliances has strong research and manufacturing capabilities in the core components of household appliances
and intelligent equipment, laying solid groundwork for the Company's high-quality development.
1. Compressor sector - persist in continuous innovation and lead industry technology development
The Company has five major compressor production bases, including 16 series of products of C39/C44/C48/C49/C55/C63,
etc., covering over 1,000 models of high-efficiency, energy-saving, and eco-friendly products such as fixed frequency, DC
inverter, different power sources, different working substance, dual rotors, vortex type, with wide application scope covering
multiple air conditioning fields such as a household, commercial, vehicle, freezing and refrigeration, dehumidification and
heating. Its product technologies are at the forefront of the industry in fields such as two-stage enthalpy-adding compressors
and three-cylinder two-stage compressor of variable volume ratio.
During the report period, in response to the working environment of base station air conditioning, the Company developed a
new generation of high-efficiency compressors for base station air conditioning through innovative designs such as the low-
power consumption motor, compact but efficient pump structure, and low-friction bearing system. Due to the increase of 5%
in energy efficiency ratio, they act as core power for high-efficiency base station air conditioning, thus accelerating the
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Company's layout in the base station air conditioning field of the telecommunications industry. In the field of residential
floor-standing air conditioner, the Company developed a new generation of ultra-efficient compressors through innovative
designs such as wear-reducing materials and low-power consumption motors, with an energy efficiency ratio improvement of
5.3%, leading the industry's technological development.
2. Motor sector - deepen technological innovation and become a high-quality pioneer in the industry
The Company has launched motor products in 5 major categories, 24 series, and over 1,000 varieties and specifications, with
2,286 motor-specific national patents. They are mainly used in household appliances, BEVs, intelligent equipment, high-
efficiency industries, HVAC equipment, and other fields and have been widely applied and recognized by customers.
During the report period, the Company further expanded its application of magnetic bearing technology to the field of
industrial air compressors. The magnetic bearing high-speed motor system developed for 3-kilogram air compressors has a
rotational speed of up to 40,000 rpm, high levitation accuracy, and can achieve friction-free, efficient, high-speed, and oil-
free operation. It is matched with the entire air compressor, and its performance exceeds the national primary energy
efficiency level. This further consolidates Gree magnetic bearing leading position in the industry and helps achieve the
national "dual carbon" strategic goal.
In the field of industrial motor, the Company developed a new permanent magnet-assisted reluctance motor featuring high
torque density, high efficiency, no rare earth, and a full range of 0.75 kW315 kW. It reaches the industry's highest energy
efficiency IE5 level. Through the magnetic circuit anti-saturation design, high saliency ratio rotor topology, and efficient heat
dissipation technology, the torque density is increased by 20% compared to asynchronous motors of the same power. This
provides the industry with an efficient, low-carbon, and green product, frees the industrial motor industry from the constraints
of rare earth resources, ensures sustainable development of the industry, and plays a positive role in promoting carbon
peaking and carbon neutrality policies for the country.
3. Refrigeration accessories sector - strengthen supply chain control and improve industrial chain layout
In recent years, the Company has increased its diversified layout, acquired DunAn Environment, optimized the supply chain,
and improved its industrial chain layout. Focusing on the main business of refrigeration, DunAn Environment manufactures
series of products aimed at the entire HVAC&R industry to fully support segmented fields such as residential air conditioners,
commercial air conditioners, air source heat pumps, freezing and refrigeration, and new energy vehicle thermal management.
It has a state-recognized enterprise technology center, a national postdoctoral workstation, an academician workstation, a
CNAS laboratory, and a national full-performance testing center of central air conditioner. Therefore, it has formed a product
development platform and core technology system with independent intellectual property rights. Relying on the R&D
platform and following the orientation of "green, efficient, comfortable, and intelligent" technology development, DunAn
Environment makes doubled efforts in research and development and pursues progress in key new products. In 2023, the
market share of DunAn Environment's cut-off valve ranked first in the world, that of the four-way valve ranked second in the
world, and that of the electronic expansion valve ranked second in the world.
4. Precision mold sector - vigorously develop precision machining and build a leading mold enterprise
Gree Precision Mold is an important development pillar of the Company's industrial sector. Gree Precision Mold adheres to a
high-standard quality control concept and closely revolves around the "4+1" business model, that is, household appliance
molds, automobile molds, precision molds, and motor molds + mold products, making it maintain a leading position. Gree
Precision Mold has set up a supporting mold center in all production bases of the Company, 4 R&D platforms, 1 national-
level skilled master studio, 3 municipal-level skilled master studio, 1 municipal-level skill workstation, 1 municipal-level
model worker innovation studio, and 12 technical manufacturing service centers, providing customers with reliable and cost-
effective one-stop solutions.
During the report period, Gree Precision Mold accomplished multiple technological breakthroughs. For example, a new
energy large-scale dual color mold technology was developed, replacing the traditional manual pasting of sealing rings, and
the production efficiency of flow energy storage battery stacks was improved by more than twice; the high-speed stamping
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
technology for straight-bar iron cores at round riveting points increased the material utilization rate from 5% to 65%; and
through the optimization technology of cutting process parameters, the cutting efficiency of precision machining parameters
for ball end cutters can be improved by 37% to 42% and that for round nose cutters can be improved by 23% to 28%.
(V)Implement diversified and efficient operation of channels
1. Domestic sales channels: Promote digital upgrading of stores and steadily explore sinking channels
The Company vigorously promotes the construction of digital stores and by introducing a series of digital devices such as
intelligent shopping guide screens, cloud shelves, and electronic price tags, accelerates the upgrading of health, comfort, and
convenience of stores, allowing consumers to have a deep understanding of products.
The Company seeks innovation while maintaining stability in its sinking sales channels and fully grasps platform resources,
to jointly explore the market development of sinking channels. It also expands channels from the perspective of platform +
brand, demonstrated by the favorable development of brand stores on JD and Tmall. During the report period, the sales
performance of household appliance through channels such as JD and Tmall increased year-on-year, entering a stage of
steady development.
2. Overseas channels: Vigorously develop independent brands, deepen marketing transformation, and expand
overseas e-commerce layout
Strengthen the overseas social media matrix and create a diverse content ecosystem. During the report period, overseas social
media platforms had over 100 million online exposures and millions of user interactions, widely and deeply spreading Gree's
brand philosophy. The Company actively participated in professional refrigeration exhibitions such as the Canton Fair, AHR
Expo, MCE, and Refrigeration & HVAC Indonesia and received customers from 230 countries and regions around the world,
maximizing product and brand exposure, and subtly highlighting Gree's product attributes and brand tone. In order to
consolidate overseas distributors' loyalty to the brand, the Company held the 4th Gree Global Strategic Partners Conference
and Gree Global Dream Gala 2024, combined with creative expression and China chic of products, showcasing the corporate
culture, company strategy, product layout, and comprehensive strength to global consumers, further elevating Gree's
independent brand image.
Strengthen the layout of mainstream overseas retail e-commerce platforms and expand the categories in overseas markets.
The Company's home appliances such as circulating fans and humidifiers have been launched on mainstream retail e-
commerce platforms such as Amazon, Walmart, SHOPEE, LAZADA, and Mercadolibre. With a high-quality and innovative
product image, Gree has quickly captured the minds of local consumers and received widespread praise.
During the report period, the Company's products were sold to more than 190 countries and regions, and its overseas business
achieved a revenue of RMB24.904 billion, with independent brands accounting for nearly 70%, an increase of 8% year-on-
year. We have won over 130 typical projects with a total cooling capacity of over 450,000 RT, including Angola Luanda
New Airport, Pakistan Gwadar New Airport, Ivory Coast Abidjan Stadium, Peruvian Agricultural University, Oman Ministry
of Defense Office Building, Chinese University of Hong Kong, Pitts Street Hotel in Sydney, Australia, covering Africa,
Brazil, the Middle East, Australia, Asia Pacific, and other overseas countries and regions. We have achieved success in
various fields such as airports, power plants, oil fields, rail transit, hotels, factories, office buildings, and special China-aid
foreign projects, continuing to support Gree's international brand image.
(VI)Persist in technology to achieve success and accelerate diversified development
Taking technology as the core driving force for diversified development, the Company has overcome key bottleneck
technologies one after one and made continuous efforts in diversified fields such as intelligent equipment, industrial products,
home appliances, and new energy, providing growth momentum for performance.
1. Intelligent equipment - pursue continuous innovation and provide reliable intelligent manufacturing solutions
At present, Gree Intelligent Equipment has established 15 R&D units, 7 technology service centers, and 3 provincial-level
scientific research platforms in Zhuhai, Guangdong Province, including 1 provincial-level enterprise technology center and 1
provincial-level manufacturing innovation center. Its products involve four major sectors: industrial robots, CNC machine
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
tools, intelligent logistics & warehousing, and factory automation, and are applied to multiple fields such as home appliances,
new energy, automobiles, and 3C. In 2023, Gree Intelligent Equipment continued to optimize its product system architecture,
and focusing on series products in four major sectors: CNC machine tools, industrial robots, intelligent logistics &
warehousing, and factory automation, provided products for many leading enterprises in the industry at home and abroad,
helping to upgrade automation.
In the sector of CNC machine tools, revolving around the electrification and light weight of new energy vehicles, we have
successfully developed a series of fully closed-loop direct drive, high-speed three-axis vertical machining, four-axis vertical
machining, and five-axis gantry CNC machine tools to meet the requirements of PACK modules and components,
automotive safety components, chassis integrated die-casting components, and other CNC machine tool equipment. We are
committed to becoming a leader in high-speed machining system solutions for new energy vehicle components.
In the sector of industrial robots, revolving around the new energy market, we have developed industrial robots such as GR35,
GR50E, and GRS20 for the lithium-ion battery and photovoltaic fields, GR200 for automotive component die-casting, and
GRX5 collaborative robots for matching liquid dispensing workstations, providing robot automation application solutions for
the manufacturing of new energy vehicle components, and assisting in the intelligent upgrading of production and
manufacturing models in the new energy vehicle industry.
In the sector of intelligent logistics & warehousing, we have developed dual station control technology, multi-vehicle control
system, and modular control system for stacker cranes, and completed major project acceptance in the fields of electric power,
automotive components, and education. In addition, the Company has completed the promotion of a high-rise and high-
efficiency intelligent three-dimensional warehouse management and scheduling system for the automotive parts industry,
achieving intelligent scheduling and management of logistics from production, temporary storage, to distribution, and
providing professional system solutions for automotive and its parts manufacturers.
2. Green energy - deepen technology innovation and build a better future
Under the "dual carbon" background, China's energy green transformation is accelerating, and a new type of electric power
system and energy storage system with new energy as the focus, safe and efficient, is gradually becoming an important
measure to achieve the "dual carbon" strategy. In recent years, the Company has continued to make efforts in green energy,
committed to key technology research and product development in the field of new energy, and coordinated the construction
of new energy industry layouts, providing assistance for the transformation and development of China's green economy.
1) Photovoltaic (storage) air conditioner - develop "zero carbon source" technology and usher in the green revolution
After ten years of technological research and development, the Company innovatively integrates photovoltaic energy and air
conditioning products across borders. The world's first Gree "zero carbon source" air conditioning system won the highest
award at the 2021 Global Cooling Prize. According to the organizing committee's calculation, this technology can reduce air
conditioning carbon emissions by 85.7%.
During the report period, the "Key Technology Research and Product Development of Power Adjustable DC
Electromechanical Equipment" project of the Company's technical team was included in the 14th National Key R&D
Program of China, fully demonstrating the Company's research and development strength in this field. As of the end of 2023,
the technology related to the photovoltaic (storage) DC air conditioning system has won multiple domestic and international
awards, including the first Chinese Patent Gold Award in the household appliance industry, the UK RAC Annual
Achievement Award, and the Geneva International Invention Gold Award; the Company's "zero carbon source" system has
been applied in more than 12,000 engineering scenarios in 35 countries and regions worldwide. The Company's PEDF
technology has also been applied in key projects such as the 19th Asian Games Hangzhou 2022, Hainan Boao Forum for
Asia, Dammam Medical University in Saudi Arabia, and Qatar Mosque, exerting significant influence both domestically and
internationally.
2) New energy - seize the future track and further improve industrial layout
As of the end of 2023, Gree Altairnano has won honors such as "China's Top 500 Private Enterprises in the Manufacturing
Industry", "National Quality Trustworthy Products", "Bus Safety Technology Achievement Award", the "Most Influential
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Enterprise Award in China's Energy Storage Industry", and "Green Factory", and has been selected as the "National
Intellectual Property Advantage Enterprise" and "National Top 100 Quality Inspection Integrity Benchmark Enterprises".
Gree Altairnano's 18-meter dolphin bus won the "China Patent Award - Gold Award for Appearance Design", becoming the
only product selected in the new energy vehicle industry. The key technology of Gree Altairnano's high-safety and large-rate
energy storage system has been identified by the China Machinery Industry Federation as reaching the "international leading"
level, and has won the second prize of Guangdong Province Science and Technology Award and the first prize of Guangdong
Mechanical Engineering Society's Science and Technology Award. The "Lithium Titanate Power Efficient Energy Storage
System" has been selected into the catalog of recommended energy-saving technologies and equipment in the field of
industry and information technologies. Gree Altairnano has been selected as one of the top 500 global new energy enterprises
for many years.
During the report period, Gree Altairnano's invention patent won the gold medal at the iENA in Germany. As of the end of
2023, Gree Altairnano has applied for a total of 3,571 patents, including 1,016 invention patents; a total of 2,640 patents have
been granted, covering various fields such as lithium battery materials, electric vehicle powertrains, intelligent energy storage,
etc., fully demonstrating Gree Altairnano's research and innovation capabilities in the field of new energy.
① New energy vehicle - explore new markets and adhere to diversified sales channels
Insisting on independent innovation, Gree Altairnano launched two series of products, namely commercial vehicles and
special vehicles, according to the needs of different industries. In 2023, facing a fiercely competitive market environment,
Gree Altairnano adhered to diversified sales channels and product routes, achieving breakthroughs in the domestic vehicle
sales market of 10 meter and 18 meter buses and logistics vehicles. Gree Altairnano's new energy buses and classic new
energy buses have been delivered to places such as Yinchuan in Ningxia, Xining in Qinghai, and Linyi in Shandong, helping
to build demonstration zones for a green transportation powerhouse through the "public transportation + life" model.
During the report period, with the trend of increasing the volume of overseas new energy buses and increasing efforts to
expand overseas markets, Gree Altairnano achieved breakthrough growth in overseas markets. Gree Altairnano, focusing on
the field of public transportation vehicles, has reached strategic cooperation with high-end customers in the Middle East
market and has delivered in bulk; in response to the high heat and desert environment in the Middle East region, Gree
Altairnano made technological adjustments to the vehicle adaptability and took an active part in local BEV tourist vehicle
projects to promote the electrification process of zero-emission public transportation in the Middle East region and jointly
create a new green and low-carbon tourism experience.
② Lithium battery - expand product matrices and meet market demands
During the report period, Gree Altairnano achieved a breakthrough in the lithium titanate battery market. In the field of power
grid frequency modulation, Gree Altairnano achieved batch application and transformation of high-rate lithium titanate
container systems, and successfully undertaken the 33 million power plant project in Yuncheng, Shanxi. In terms of rail
transit, Gree Altairnano and CRRC Times reached a cooperation agreement, and the high-power pure electric new energy
shunting locomotive equipped with a high-voltage liquid-cooled lithium titanate power battery system has been successfully
put into use in Datong, Shanxi. Gree Altairnano has increased the development and promotion of independent LFP batteries,
enriching the main battery product route of lithium titanate batteries and further expanding the product matrix. In the battery
sector, Gree Altairnano achieved new business breakthroughs in markets in more than 20 countries, including Europe, the
Americas, Southeast Asia, Australia, and Russia, with the long-term customer demand increasing by 35% year-on-year;
carried out relevant overseas bus standard certification work and simultaneously explored the European pure electric bus
market; it had a cumulative sales exceeding RMB100 million of two-or three-wheeled vehicles in India, with a stabilizing
demand.
3. Semiconductor - seek efficient products and continuous innovation and enhance market competitiveness
The Company has developed series products including MCU, AIoT SoC, and power semiconductors. The 32-bit series MCU
chips have been widely used in terminal products such as residential air conditioners, commercial VRFs, wire controllers, and
remote controls, with an annual usage of over 30 million pieces. They can be widely used in consumer electronics, wearable
devices, home products, health and medical equipment, commercial large-scale units, industrial sensors, high-performance
motor controls, and other fields; power semiconductors such as FRD, IGBT, IPM, and PIM have been applied in batches on
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
inverter air conditioners, with an annual usage of over 20 million pieces, and can be widely used in fields such as household
appliances, intelligent equipment, and new energy. The developed AI chip combined with the key algorithm for the
Company's energy-saving air conditioners has been validated in mass production, which can achieve energy savings of over
15% in air conditioners. The third-generation semiconductor power devices have been validated in mass production on the
Company's residential floor-standing air conditioners, which can effectively improve the energy-saving efficiency of air
conditioners and reduce the overall cost of products.
4. Renewable resources - carry out social responsibilities with green renewable resource system
The Company actively practices the producer responsibility extension system and innovatively proposes the circular
development model of "green design - green manufacturing - green recycling" to ensure the green efficiency of the whole
industrial chain. Starting from 2010, the Company has established six recycling bases that mainly engage in the recycling of
waste electrical and electronic products and end-of-life vehicles, as well as the intensive processing of waste circuit boards
and waste plastics, in Changsha, Zhengzhou, Shijiazhuang, Wuhu, Tianjin, and Zhuhai.
During the report period, the Company processed a total of 9.95 million sets of waste household appliances. As of the end of
2023, a total of over 56.64 million units (sets) of various waste electrical and electronic products have been processed, and
approximately 719,000 tons of recycled copper, iron, aluminum, and plastic have been converted, which can reduce carbon
dioxide emissions by 876,100 tons and help achieve carbon peaking and carbon neutrality goals.
5. Healthcare - lay out new tracks and support the development of national healthcare industry
At present, breaking through the bottleneck technology in the medical field, optimizing intelligent solutions, and improving
the level of medical technology in China have become the main theme of innovation and development in China's medical
field. The Company has successively established a number of medical equipment companies, such as Zhuhai GE HEALTH
MEDICAL Technology Co., Ltd. and Chengdu Gree Xinhui Medical Equipment Co., Ltd., and engaged in R&D and
production of medical protective products, laboratory equipment, and mobile medical equipment. By building a platform for
research and transformation of generic technologies, the Company satisfied the customized needs of products in different
application scenarios, drove the localization of equipment in biomedicine and life sciences, and supported the high-quality
development of China's healthcare industry through technological innovation.
6. Prefabricated food equipment - adhere to independent innovation and build industrial clusters of prefabricated
food equipment
In 2009, the Company laid out the freezing and refrigeration industry and independently developed eight categories of cold
chain equipment, including pre-cooling, storage, and cooling categories. Based on years of deep research in the field of
freezing and refrigeration, our products have expanded into over 100 models in 17 series, achieving low-temperature
preservation at a minimum of -85°C and full cold chain coverage. Zhuhai Gree Prefabricated Vegetable Equipment
Technology Development Co., Ltd., established by the Company, combines automated production equipment, intelligent
logistics equipment, and high-end freezing and refrigeration equipment to provide customized intelligent solutions of
prefabricated food featuring equipment automation, operation informatization, and factory intelligence for enterprises.
During the report period, the Company launched a dedicated lychee preservation mobile equipment, which effectively
reduced the dehydration rate of lychees, prevented microbial invasion, extended the preservation period, and achieved a good
fruit rate of 99.8% by increasing humidity, sterilization, temperature control, and other functions, enhancing the international
competitiveness of Chinese lychees. The Company will connect the upstream and downstream industrial chains, promote
vigorous development of the prefabricated food industry through technological innovation, drive the upgrading of traditional
agricultural industrialization, and accelerate rural economic revitalization.
7. Upgrade all categories of smart home appliances and create a beautiful living and home ecosystem
The Company adheres to independent innovation, independent research and development, and independent manufacturing,
and builds zero-carbon healthy homes with core technology. The Company continuously upgrades the five smart living
systems of energy, air, health, security, and lighting throughout the entire house; it develops personalized spatial intelligent
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
solutions for different living spaces such as living rooms, bedrooms, and kitchens, to create a green, efficient, convenient, and
safe interconnected home space.
During the report period, the Company deepened its layout in areas such as smart home systems, smart home networks, smart
voice interaction, smart scenario solutions, and smart product technologies. According to the "2023 Top 100 Global Smart
Home Invention Patents Ranking" released by the intellectual property industry media IPRdaily, Gree ranked among the top
five globally with 3,011 patents.
In terms of whole-house smart home, Gree Zero Carbon Health Home has settled in various parts of the country, and dozens
of Gree Smart Comfortable Home stores have been established in Sichuan, Chongqing, Henan, Anhui, Guangxi, Jiangxi and
other regions. Through six technologies, five systems, and spatial deployment, Gree has achieved intelligent emission
reduction, creating energy-saving, environmentally friendly, comfortable and healthy smart homes.
In terms of centralized management platform, the Company developed a comprehensive solution for smart apartments in
Wuhan, Zhuhai, Luoyang, Jiangxi, Tianjin and other regions. Equipped with the Gree smart air conditioning centralized
management system and smart door lock, it provides services such as online informatization for check-in and check-out,
abnormal safety alarm for residents, remote control and management of apartment and dormitory appliances, reduces
operating costs and personnel investment, and improves the management level to give apartment residents higher quality of
life.
In terms of smart home ecological interconnection, Gree Standard Cloud cooperated with well-known manufacturers at home
and abroad. By providing authorized services for cooperative manufacturers, Gree Standard Cloud provided convenient
inquiry and control of Gree equipment for plenty of users, which improved the Company's influences and brand effect.
(VII)Build a scientific talent cultivation system and promote the endogenous development momentum of the
enterprise
The Company has established a set of unique "selection, training, employment, retention" talent training system and a
comprehensive salary and benefit system to cultivate the endogenous development momentum of the enterprise.
1. Build a learning organization and meet talent demands
During the report period, the Company actively advanced the establishment of a learning organization. Normalized company-
wide open courses and routine learning sessions for grassroots management leaders were implemented to nurture universally
applicable talents extensively. More than 100 public seminars were organized throughout the year, attracting close to 4,000
participants, solidly promoting the inheritance of management expertise, sharing of R&D technologies, and enhancing
professional competencies.
The Company persisted in carrying out the "Foundation Consolidation Project" aimed at elevating job-specific skills.
Through master-apprentice programs led by renowned mentors, assessment and certification processes, and skill
competitions, a total of 79 batches of new staff orientation training and base support training were conducted, involving
4,867 individuals. Additionally, 29 skill contests were held, engaging nearly 1,000 employees, and specialized training for
over 1,400 personnel was organized. This approach realized standardized job training, routine professional development, and
competitive skill enhancement, thereby reinforcing the Company's talent development. By leveraging platforms such as
Master Craftsmen Studios and Technician Workstations, a skill talent cultivation system was established, smoothing the
development path for skilled professionals, and vigorously building a highly skilled workforce characterized by "rational
structure, solid skills, ample numbers, and excellent quality", thereby enhancing the Company's industrial competitiveness.
During this period, the Company was shortlisted for the "Engineering and Technology Talent Contribution Award,"
becoming the first enterprise in the home appliance industry to receive this honor.
2. Improve the talent incentive policy and stimulate the inherent potential of employees
During the report period, the Company continued to promote the talent incentive policy and gave play to the exemplary
leading role of advanced employees. It set up scientific and technological progress award, management innovation award,
rationalization proposal award, performance bonus, year-end bonus and diversified bonus system, and created honorary
selection activities such as advanced individuals, pioneer workers, gold medal employees, outstanding city employees, and
skill pacesetters, etc., to encourage employees to innovate and give full play to their strengths.
3. Improve the employee welfare security system and create a happy and contented atmosphere within the Company.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The Company consistently intensified its investment in the "Talent Sanctuary," encompassing multiple facets of life
including clothing, food, housing, and transportation. In terms of transportation, the establishment of Zhuhai Gree
Transportation Co., Ltd. provides employees with complimentary, comfortable shuttle bus services, effectively functioning as
a secondary transportation network in Zhuhai. Regarding living conditions, the Company also invested hundreds of millions
of RMB to build Gree Kang Park and staff living areas to solve problems of staff housing, leisure and entertainment. It
established a perfect employee welfare security system and a "Sunshine Fund", which met the urgent needs of employees in
difficulty. In terms of salary and benefits, a well-rounded employee welfare and benefits system was established, offering not
only substantial and diverse compensation packages, social insurance and housing fund contributions, meal allowances, high-
temperature subsidies, housing allowances, and transportation allowances as fundamental benefits, but also incentive-based
rewards like the science and technology progress award, management innovation award, and rationalization proposal award.
4. Continue to implement the share incentive plan and share the dividends of enterprise development
The Company consistently launched and implemented the employee stock ownership plan to improve the benefit sharing and
risk-sharing mechanism between the Company and core employees, fully mobilize the enthusiasm and creativity of
employees, improve the cohesion of employees and the competitiveness of the Company, and promote the long-term,
sustainable, and healthy development of the Company.
2. Revenue and cost
(1) Composition of operating revenue
Unit: yuan (RMB)
2023 2022
Year-on-year
Item Proportion to Proportion to Increase/Decre
Amount Operating Amount Operating ase
Revenue Revenue
Total operating
203,979,266,387.09 100% 188,988,382,706.68 100% 7.93%
revenue
By industries
Manufacturing
174,565,470,852.38 85.58% 153,165,839,566.10 81.05% 13.97%
industry
Other business 29,413,795,534.71 14.42% 35,822,543,140.58 18.95% -17.89%
By products
Air conditioner 151,216,511,000.13 74.14% 134,859,394,542.06 71.36% 12.13%
Home
4,001,971,437.12 1.96% 4,567,901,238.21 2.42% -12.39%
appliance
Industrial
10,002,891,047.02 4.90% 7,599,259,996.39 4.02% 31.63%
product
Smart device 669,842,288.11 0.33% 432,085,871.36 0.23% 55.03%
Green energy 7,106,463,576.73 3.48% 4,701,188,530.73 2.49% 51.16%
Other main
1,567,791,503.27 0.77% 1,006,009,387.35 0.53% 55.84%
business
Other business 29,413,795,534.71 14.42% 35,822,543,140.58 18.95% -17.89%
By regions
Domestic sales
149,661,934,832.94 73.37% 129,895,113,805.01 68.74% 15.22%
main business
Export sales
24,903,536,019.44 12.21% 23,270,725,761.09 12.31% 7.02%
main business
Other business 29,413,795,534.71 14.42% 35,822,543,140.58 18.95% -17.89%
(2) Industries, products, regions, and sales models that account for more than 10% of the Company's operating
revenue or operating profits
Applicable □ Not applicable
Page 29 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Unit: yuan (RMB)
Increase or Increase or
Increase or
Decrease in Decrease in
Decrease in
Operating Operating
Gross Gross Margin
Item Operating revenue Operating Cost Revenue over Cost over the
Margin over the Same
the Same Same Period
Period of the
Period of the of the Previous
Previous Year
Previous Year Year
By industries
Manufacturi
174,565,470,852.38 113,508,550,549.59 34.98% 13.97% 7.52% 3.91%
ng industry
Other
29,413,795,534.71 28,116,999,197.36 4.41% -17.89% -17.81% -0.09%
business
By products
Air
151,216,511,000.13 95,207,973,716.18 37.04% 12.13% 4.49% 4.60%
conditioner
Other
29,413,795,534.71 28,116,999,197.36 4.41% -17.89% -17.81% -0.09%
business
By regions
Domestic
sales main 149,661,934,832.94 94,519,678,129.83 36.84% 15.22% 10.35% 2.78%
business
Export sales
main 24,903,536,019.44 18,988,872,419.76 23.75% 7.02% -4.69% 9.36%
business
Other
29,413,795,534.71 28,116,999,197.36 4.41% -17.89% -17.81% -0.09%
business
In case the statistical caliber of the Company's main business data is adjusted during the report period, the Company's main
business data will be adjusted according to the caliber at the end of the report period in the last year.
□ Applicable Not Applicable
(3) Whether the Company's revenue from physical sales is greater than that from labor services
Yes □No
Description of a year-on-year change of 30% or more in relevant data
□ Applicable Not Applicable
(4) Performance of significant sales contracts and purchase contracts entered into by the Company as of the report
period
□ Applicable Not Applicable
(5) Composition of operating costs
Industry and product classification
Unit: yuan (RMB)
2023 2022
Year-on-year
Industry Proportion to Increase/Decre
Item Proportion to
Classification Amount Amount Operating
Operating Cost ase
Cost
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Raw materials 93,909,272,081.72 87.94% 89,062,003,824.55 88.01% 5.44%
Household
Labor costs 4,839,203,936.92 4.53% 4,487,688,687.68 4.43% 7.83%
appliance
Depreciation 1,950,717,636.85 1.83% 1,963,862,221.35 1.94% -0.67%
manufacturing
Energy 1,060,398,535.08 0.99% 923,522,729.23 0.91% 14.82%
(6) Whether there was a change in the combination scope during the report period
Yes □No
1. Business combination not under common control
① Business combination not under common control in the current period
Unit: yuan (RMB)
Time Point of Equity Equity
Equity Acquisition Acquisition
Name of the Acquiree Equity Acquisition Acquisition
Cost Date
Acquisition Proportion Method
Ganzhou Qianjin Real Purchase
2023/10/31 239,485,900.00 90.00% 2023/10/31
Estate Co., Ltd. by cash
Unit: yuan (RMB)
Basis for Operating Income of Net Profit of the Cash Flow of the
Determining the the Acquiree from the Acquiree from the Acquiree from the
Name of the Acquiree
Acquisition Acquisition Date to Acquisition Date to Acquisition Date to
Date the End of the Period the End of the Period the End of the Period
Ganzhou Qianjin Real Acquisition of
-804,692.79 3,947,533.56
Estate Co., Ltd. control
② Cost and goodwill of business combination
Unit: yuan (RMB)
Cost of business combination Amount
Total cost of business combination 239,485,900.00
Including: Cash 239,485,900.00
Less: Fair value of the identifiable net assets acquired 239,485,903.54
Combination cost less than the share of fair value of
-3.54
identifiable net asset acquired
③ Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan (RMB)
Ganzhou Qianjin Real Estate Co., Ltd.
Item
Fair value on the acquisition Book value on the
date acquisition date
Assets:
Monetary funds 143,501.61 143,501.61
Other receivables 19,819,308.24 19,819,308.24
Inventory 226,354,123.01 226,354,123.01
Other current assets 19,778,515.52 19,778,515.52
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Subtotal of assets 266,095,448.38 266,095,448.38
Liabilities:
Subtotal of liabilities
Net Assets 266,095,448.38 266,095,448.38
Less: Minority shareholders' equity 26,609,544.84 26,609,544.84
Net assets acquired 239,485,903.54 239,485,903.54
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
④ Gains or losses arising from the remeasurement of equity held before the acquisition date at fair value
None.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
Amount of
The
Other
Difference Determination
Book Value Fair Value Comprehensive
Between the Methods and
of the of the Income
Disposal Price Proportion Main
Disposal Disposal Remaining Remaining Related to
Disposal and the Share of Gains or Losses Assumptions of
Ratio of Methods Basis for Equity at the Equity at the Equity
Price of of the Remaining Arising from the Fair Value of
the Time of the Determining ConsolidatedConsolidated Investment of
Time Point of Losing the Time Subsidiaries' Equity on Remeasurement the Remaining
Name of Subsidiary Point of Time the Time Point Financial Financial the Original
Control Point of Net Assets at the Date of of Remaining Equity on the
Losing Point of of Losing Statement Statement Subsidiary
Losing the Level of Losing Equity at Fair Date of Losing
Control Losing Control Level on the Level on the Transferred
Control Consolidated Control Value Control at the
(%) Control Date of Date of into Investment
Statements (%) Consolidated
Losing Losing Profits and
Corresponding Financial
Control Control Losses or
to the Disposal Statement Level
Retained
Investment
Earnings
Tianjin Gree Xinhui
Business
Medical Equipment 2023-10-30 100.00Cancelled None
registration
Co., Ltd.
SL Group Jingu
Business
Grain Depot Co., 2023-8-25 100.00Cancelled None
registration
Ltd.
Page 33 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount of
The
Other
Difference Determination
Book Value Fair Value Comprehensive
Between the Methods and
of the of the Income
Disposal Price Proportion Main
Disposal Disposal Remaining Remaining Related to
Disposal and the Share of Gains or Losses Assumptions of
Ratio of Methods Basis for Equity at the Equity at the Equity
Price of of the Remaining Arising from the Fair Value of
the Time of the Determining ConsolidatedConsolidated Investment of
Time Point of Losing the Time Subsidiaries' Equity on Remeasurement the Remaining
Name of Subsidiary Point of Time the Time Point Financial Financial the Original
Control Point of Net Assets at the Date of of Remaining Equity on the
Losing Point of of Losing Statement Statement Subsidiary
Losing the Level of Losing Equity at Fair Date of Losing
Control Losing Control Level on the Level on the Transferred
Control Consolidated Control Value Control at the
(%) Control Date of Date of into Investment
Statements (%) Consolidated
Losing Losing Profits and
Corresponding Financial
Control Control Losses or
to the Disposal Statement Level
Retained
Investment
Earnings
SL Group Songlin
Business
Grain Depot Co., 2023-9-22 100.00Cancelled None
registration
Ltd.
DunAn Sensing
Business
Technology Co., 2023-6-5 66.58Cancelled None
registration
Ltd.
Jilin Songliang
Modern Logistics Business
2023-5-6 100.00Cancelled None
Development Co., registration
Ltd.
Page 34 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
5. Change of combination scope for other reasons
Newly established entity in the current period:
Unit: yuan (RMB)
Net Profit from the
Net Assets at the End of
Company Name Date of Establishment Combination Date to the
the Period
End of the Period
Hunan DunAn Refrigeration Equipment
2023-2-7 22,486,643.44 2,486,643.44
Co., Ltd.
Luoyang Herun Real Estate Co., Ltd. 2023-9-28 -51,151.68 -51,151.68
Gree Lintanyuan (Shanghai) Technology
2023-10-20
Co., Ltd.
(7) Significant changes or adjustments in the Company's business, products or services during the report period
□ Applicable Not Applicable
(8) Main sales customers and suppliers
Main sales customers of the Company
Total sales amount of the top five customers (RMB) 36,373,719,797.80
Proportion of total sales amount of top five customers to the
17.74%
total annual sales
Proportion of sales amount of related parties in the sales
5.15%
amount of top five customers to the total annual sales
Information of top five customers
Proportion to Total Annual
S/N Customer Name Sales Amount (RMB)
Sales
1 First 11,643,121,629.28 5.68%
2 Second 8,861,614,850.62 4.32%
3 Third 5,885,129,357.41 2.87%
4 Fourth 5,310,473,001.39 2.59%
5 Fifth 4,673,380,959.10 2.28%
Total -- 36,373,719,797.80 17.74%
Other descriptions of major customers
□ Applicable Not Applicable
Main suppliers of the Company
Total purchase amount of the top five suppliers (RMB) 37,070,471,527.30
Proportion of total purchase amount of top five customers to
28.15%
the total annual purchases
Proportion of total purchase amount of related parties in the
purchase amount of top five suppliers to the total annual 0.00%
purchases
Information of top five suppliers
Proportion to Total Annual
S/N Supplier Name Purchase Amount (RMB)
Purchases
Page 35 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
1 First 10,414,856,904.36 7.91%
2 Second 7,917,687,520.80 6.01%
3 Third 7,800,951,953.66 5.92%
4 Fourth 7,464,163,661.22 5.67%
5 Fifth 3,472,811,487.26 2.64%
Total -- 37,070,471,527.30 28.15%
Other descriptions of major suppliers
□ Applicable Not Applicable
3. Expenses
Unit: yuan (RMB)
Year-on-year Significant Changes
Item 2023 2022
Increase/Decrease Description
Mainly affected by the
increase in product
Sales expenses 17,129,639,682.51 11,285,451,112.27 51.79%
installation and
maintenance costs.
Administrative
6,542,161,037.82 5,267,999,733.62 24.19%
expenses
Mainly affected by the
increase in financial
Financial expenses -3,526,521,851.75 -2,206,764,591.65 -59.81%
expenses and interest
income.
R&D expenses 6,762,136,262.23 6,281,394,430.40 7.65%
4. R&D investment
Applicable □ Not applicable
Expected Impact on the
Name of Major
Project Purpose Project Progress Objectives to be Achieved Future Development of
R&D Projects
the Company
Promote the deepening
The project has development of air
been completed conditioner ventilation
and successfully modes towards healthier,
Promote the iterative Realize innovative
promoted and more comfortable, and
Research on lean upgrading of distributed upgrading of fans and
applied to the new more efficient directions,
distributed air air supply products promote quality
products of Satin while enhancing the
supply technology through fan innovation, improvement, with an
Time floor production efficiency of
based on dual- and improve product APF of up to 4.50 for 3
standing air distributed ventilation
suction fans performance and exquisite HP models and up to 4.80
conditioner and products, facilitating
appearance. for 2 HP models.
Gree Chinoiserie their popularization and
floor standing air promotion, and enriching
conditioner. the layout of product
lines.
New high-speed Develop ultra-high-speed The 24K North Seasonal energy As a leading technology
compressor series compression technology American model efficiency can increase by in the industry, it can
split type unit (24K to solve the problem of has been launched, more than 10%, low- enhance the market
North American and synchronously improving while other temperature heating competitiveness of
EU product series) air conditioner energy models are still capacity can increase by products.
Page 36 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
efficiency and low- under review and more than 10%, SEER
temperature heating testing. energy efficiency can
capacity. reach 29, and low-
temperature heating
capacity does not decay at
-15°C.
This technology has been
identified as leading
Break through the key
internationally. It is
technologies of high-
Develop high-capacity, poised to conquer the
temperature heat pump
high-temperature, and pinnacle of large-
120°C + industrial compressors, high-
high-efficiency capacity high-
large-capacity, high- efficiency heat pump
centrifugal heat pumps Product series temperature heat pump
efficiency, and high- systems, and high-
above 120°C to replace development is technology, enabling
temperature temperature enhanced
non-process industrial underway. foray into the market as a
centrifugal heat heat exchange, achieving
boilers and assist in substitute for industrial
pump a single heat pump
industrial carbon boilers, thereby
capacity of 10 MW and a
reduction. presenting a broad
heating temperature of
commercial outlook and
over 120°C.
yielding substantial
societal benefits.
This technology has been
Achieve a breakthrough
identified as an
Develop a COP7.0 + two- of 7.0 in the energy
international leading
stage permanent magnet efficiency level of small
level, improving the
COP7.0 + two-stage variable frequency screw and medium-sized
Product series energy efficiency of
permanent magnet chiller to solve the cooling capacity chillers,
development is small and medium-sized
variable frequency problem of low energy and comprehensively
underway. cooling capacity chillers,
screw chiller efficiency of small and improve the energy
enhancing product
medium-sized cooling efficiency and energy-
competitiveness, and
capacity chillers. saving level of screw
promoting industry
refrigeration equipment.
technological innovation.
The European The refrigerant charge is
Actively promote the version of the as low as 152 g, Improve the entire chain
research and development product has been representing an 82% of R290 R&D, testing,
of green and efficient launched. The reduction compared to production, warehousing,
equipment, respond to Australian version R32; energy efficiency and transportation.
Development of
energy conservation and is planned to be reaches up to 145%; Enhance product
R290 heat pump
environmental protection developed by July maximum hot water competitiveness and
water heater
policies in various global 2024; research is output is increased by brand awareness by
markets, and develop new underway on the 64%, now at 546 L; and it introducing new low-
refrigerant R290 heat North American is capable of producing GWP refrigerant
pump water heaters. version of the hot water at a temperature products into the market.
product. as high as 70°C.
Expand the company's
cleaning appliances. Form a unique wet mop
Research zero Research on multiple cleaning technology
Development of
consumables and rolling The product has separation technologies to feature to build the
zero consumables
brush healthy drying been completed achieve zero HEPA foundation for the rapid
healthy drying floor
technology, and develop and launched. consumables; research on development of the
scrubber
competitive products. heat conduction drying to cleaning appliances in
achieve safe and healthy the future.
drying.
Research and Solve the problems of oil 1. Develop intelligent This technology has been
application of ten accumulation in the inner The product has rotary oil capture applied to the Star series
year cleaning-free chamber of the range been completed technology to reduce oil range hoods, filling the
technology for the hood, cleaning, weakened and launched. fumes entering the fan technical gap of cleaning
inner chamber of the suction, and increased and maintain stable and free in the industry and
Page 37 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
range hood noise after prolonged use. high suction. improving the core
2. Develop an oil- competitiveness of range
repellent wind wheel hood products.
system that prevents oil
stains from adhering
easily, achieving a 10-
year cleaning-free inner
chamber without
compromising
performance.
1. The weight loss rate of
Solve the problems of
spinach after 10 days of This technology has been
fruits and vegetables in
fruit and vegetable identified as leading
the refrigerator industry
Research and preservation is less than internationally, and it is
that are prone to
application of key 7%; of great significance for
dehydration and spoilage,
technologies for The product has 2. The drying rate of promoting the upgrading
short-term preservation of
preserving fruits, been completed short-term preservation of of core fresh-keeping
meat that is prone to air
vegetables, and meat and launched. meat for 10 days is less technologies in
drying and discoloration,
in household than 5%; refrigerators, enhancing
and insufficient freezing
refrigerators 3. Stable operation at - the quality of food
temperature of aquatic
38°C in the refrigerator's storage, and safeguarding
products that cannot be
freezer compartment can people's dietary health.
stored with high quality.
be achieved.
1. Increase the seasonal
energy efficiency ratio by In response to the climate
more than 15% and obtain characteristics of the
Development of
Saudi Arabia's A-level Middle East, such as high
high energy
The product is energy efficiency temperatures and
efficiency household Develop household split
under limited-run certification; abundant sunlight
split photovoltaic photovoltaic (storage) air
trial production 2. Internationally pioneer throughout the year,
(storage) air conditioner products.
stage. photovoltaic direct drive relevant models have
conditioner products
control technology, with a been developed to
in tropical climate
comprehensive energy enhance product
utilization efficiency of competitiveness.
over 99%.
Develop an efficient,
The energy efficiency of This can enable the
miniaturized, and highly
the motor can reach the industrial motor industry
reliable series of industrial
Development of IE5 energy efficiency to break free from the
motors to solve the
efficient rare earth The product has standard in IEC60034-30- constraints of rare earth
problems of low energy
free new permanent been completed 2 without using rare earth resources for efficiency
efficiency and limited rare
magnet assisted and launched. permanent magnet improvements, guiding
earth resources in three-
reluctance motor materials, meeting the the industry towards
phase asynchronous
needs of various more efficient
motors in the industrial
mechanical equipment. development.
field.
Compared to the previous As a new generation of
generation model, the main models, it has been
Develop a new generation
energy efficiency can fully applied in
Development of of household 1 HP3 HP
The product has increase by 2%5%. The household air conditioner
household 1 HP3 high-efficiency
been completed product can meet the systems, achieving
HP high-efficiency compressors to assist in
and put into mass efficient use needs of 1 efficiency improvement
variable frequency energy conservation and
production. HP3 HP air conditioners and further enhancing the
compressor carbon reduction of air
and is fully applied to the competitiveness of the
conditioner.
Company's household air household air conditioner
conditioner systems. market.
Development of Develop linear motors for The prototype is Overcome the design and Realize the autonomy of
modular high thrust the X-axis and Y-axis of currently in the process technology of core components of
linear motor the large gantry machine trial production modular linear motors, machine tools, improve
Page 38 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
tool 3020. stage. establish a product the market
platform, and meet the competitiveness of the
related requirements of Company's machine tool
the Company's machine products, and promote
tool products. the development of the
machine tool industry
towards high-speed
direct drive.
Company R&D personnel
2023 2022 Change Ratio
Number of R&D personnel
15,282 12,977 17.76%
(persons)
Proportion of number of R&D
21.05% 17.93% 3.12%
personnel
Educational structure of R&D personnel
Bachelor 8,773 8,312 5.55%
Master and above 1,407 1,294 8.73%
Age composition of R&D personnel
Under 30 7,667 7,323 4.70%
3040 5,915 4,529 30.60%
R&D investment of the Company
Item 2023 2022 Change Ratio
Amount of R&D investment
7,006,497,352.61 6,429,702,080.04 8.97%
(RMB)
Proportion of R&D
investment to the operating 3.43% 3.40% 0.03%
revenue
Capitalization amount of
244,361,090.38 148,307,649.64 64.77%
R&D investment (RMB)
Proportion of capitalized
R&D investment to R&D 3.49% 2.31% 1.18%
investment
Reasons and influences of significant changes in the composition of R&D personnel in the Company
□ Applicable Not Applicable
Reasons for significant changes in the proportion of total R&D investment to the operating revenue compared with the
previous year
□ Applicable Not Applicable
Reasons for significant changes in capitalization rate of R&D investment and its reasonableness
Applicable □ Not applicable
The Company's capitalized R&D investment increased by 64.77% year-on-year, mainly due to the increase in capitalized
investment such as fixed assets engaged in R&D activities.
5. Cash flow
Unit: yuan (RMB)
Item 2023 2022 Year-on-year
Page 39 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Increase/Decrease
Subtotal of cash inflows from
228,996,916,924.84 198,587,680,806.39 15.31%
operating activities
Subtotal of cash outflows
172,598,490,570.67 169,919,244,885.12 1.58%
from operating activities
Net cash flows from operating
56,398,426,354.17 28,668,435,921.27 96.73%
activities
Subtotal of cash inflows from
49,223,300,660.90 10,527,205,021.13 367.58%
investment activities
Subtotal of cash outflows
90,240,520,005.31 47,584,037,812.54 89.64%
from investment activities
Net cash flows from
-41,017,219,344.41 -37,056,832,791.41 -10.69%
investment activities
Subtotal of cash inflows from
88,825,770,725.94 102,978,746,831.03 -13.74%
financing activities
Subtotal of cash outflows
105,183,587,284.78 93,055,954,517.92 13.03%
from financing activities
Net cash flows from financing
-16,357,816,558.84 9,922,792,313.11 -264.85%
activities
Net increase in cash and cash
-840,460,509.20 1,802,912,937.61 -146.62%
equivalents
Description of the main factors affecting the significant year-on-year changes in relevant data
Applicable □ Not applicable
1. Net cash flows from operating activities increased by 96.73% year-on-year, mainly due to the increase in cash received in
connection with sales goods and labor services.
2. Net cash flows from financing activities decreased by 264.85% year-on-year, mainly due to the decrease in cash received
from borrowing and an increase in cash paid for debt repayment.
Reasons for significant differences between net cash flows from operating activities and net profit for the year during the
report period
Applicable □ Not applicable
That is mainly affected by the decrease in operating receivables and the increase in operating payables. Please refer to Note V.
72 Supplementary for cash flow statement in Section X Financial Statements for details.
V. Analysis of non-main business
□ Applicable Not Applicable
VI. Analysis of assets and liabilities
1. Significant changes in the composition of assets
Unit: yuan (RMB)
At the End of 2023 At the Beginning of 2023 Proportion Significant
Item Proportio Proportion Increase or Changes
Amount Amount Decrease Description
n to Total to Total
Page 40 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Assets Assets
Monetary
124,104,987,289.62 33.72% 157,484,332,251.39 44.35% -10.63%
funds
Accounts
16,099,477,117.56 4.37% 14,824,742,623.45 4.18% 0.19%
receivable
Contract
838,812,133.65 0.23% 1,047,739,817.94 0.30% -0.07%
assets
Inventory 32,579,140,028.70 8.85% 38,314,176,763.90 10.79% -1.94%
Investment
633,262,161.10 0.17% 634,689,201.98 0.18% -0.01%
real estate
Long-term
equity 4,488,967,031.20 1.22% 5,892,290,568.81 1.66% -0.44%
investments
Fixed assets 34,034,829,116.47 9.25% 33,817,019,391.36 9.52% -0.27%
Construction
6,563,911,378.94 1.78% 5,966,678,892.16 1.68% 0.10%
in progress
Usufruct
842,250,508.12 0.23% 207,344,779.05 0.06% 0.17%
assets
Due to the
repayment of
current short-
Short-term
26,443,476,388.52 7.18% 52,895,851,287.92 14.90% -7.72% term
borrowings
borrowings
during the
period
Contract
13,588,771,210.88 3.69% 14,972,336,715.45 4.22% -0.53%
liabilities
Long-term
39,035,742,535.09 10.61% 30,784,241,211.21 8.67% 1.94%
borrowings
Lease
767,007,951.92 0.21% 146,836,620.66 0.04% 0.17%
liabilities
Overseas assets account for a relatively high proportion.
□ Applicable Not Applicable
Page 41 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: yuan (RMB)
Impairm
Profits and Losses ent
Cumulative Fair
From Changes in Accrued Purchase Amount in Sales Amount in the
Item Beginning Amount Value Changes Other Changes Ending Amount
Fair Value in the in the the Current Period Current Period
Included in Equity
Current Period Current
Period
Financial assets
1. Trading financial
assets (excluding
3,867,203,363.52 9,741,126.98 18,874,695,670.00 21,341,651,471.35 8,204,434,714.25 9,614,423,403.40
derivative financial
assets)
2. Derivative financial
108,919,513.22 108,919,513.22
assets
3. Other debt
14,340,348,882.97 21,413,747.71 17,078,766.51 3,817,000,000.00 -1,814,920,964.72 16,363,841,665.96
investments
4. Other equity
4,669,455,797.90 -740,755,585.40 -883,261,200.43 74,520,335.95 10,685,632.82 3,864,865,509.37
instrument investments
5. Receivables financing 28,427,310,345.20 -11,939,843.77 -23,453,909.25 18,239,280,833.02 10,176,089,668.41
6. Other non-current
4,428,003,204.49 126,031,136.83 3,650,400,372.93 -8,204,434,714.25 -
financial assets
7. Others 3,278,106,802.74 5,929,312.07 2,781,162.07 3,000,000,000.00 2,082,280,523.08 2,366,316,637.89
Subtotal of financial
59,010,428,396.82 -480,660,592.36 -886,855,181.10 26,342,096,042.93 42,655,452,640.32 278,045,191.18 42,494,456,398.25
assets
Total above 59,010,428,396.82 -480,660,592.36 -886,855,181.10 26,342,096,042.93 42,655,452,640.32 278,045,191.18 42,494,456,398.25
Financial liabilities 184,811,894.98 181,438,868.23 706,893.16 4,079,919.91
Page 42 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other changes
Other changes mainly refer to the reclassification of financial statements, differences in foreign currency translation, and interest income.
Whether there was any significant change in the measurement attributes of the Company's major assets during the report period
□ Yes No
Page 43 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
3. Restricted rights to assets as of the end of the report period
Unit: yuan (RMB)
End of Period
Item
Book Value Restricted Reason
Required deposit reserve, earnest
Monetary funds 36,444,669,541.57
money, etc.
Accounts receivable 95,386,260.00 Pledged
Receivables financing 5,033,716,307.04 Pledged
Contract assets 103,189,654.26 Pledged
Other current assets 9,000,000,000.00 Pledged
Non-current assets due within one
1,000,000,000.00 Pledged
year
Other debt investments 10,090,000,000.00 Pledged
Long-term equity investments 310,838,556.07 Pledged
Fixed assets 2,285,127,725.15 Pledged
Construction in progress 223,626,881.02 Pledged
Intangible assets 1,436,665,729.28 Pledged
Other non-current assets 12,180,000,000.00 Pledged
Others 13,646,580.00 Pledged
Total 78,216,867,234.39
Page 44 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
VII. Analysis of investments
1. Overview
Applicable □ Not applicable
Investment in the Report Period (RMB) Investment in the Same Period of Last Year (RMB) Change Range
84,267,244,633.47 13,467,910,481.50 525.69%
2. Significant equity investments obtained during the report period
□ Applicable Not Applicable
3. Significant non-equity investments in progress during the report period
□ Applicable Not Applicable
4. Financial assets investments
(1) Securities investments
Applicable □ Not applicable
Unit: yuan (RMB)
Accounting Profits and Losses From Cumulative Fair Value Profits and Losses
Securities Securities Securities Initial Investment Book Value at the Purchase Amount in the Sales Amount in the Book Value at the Accounting Capital
Measureme Changes in Fair Value Changes Included in During the Report
Type Code Abbreviation Cost Beginning of the Period Current Period Current Period End of the Period Items Source
nt Model in the Current Period Equity Period
Zunyu No.1 Trading
Measured at Own
Others - Fund Trust 2,891,120,690.09 -8,010,137.57 4,165,035,779.92 1,273,915,089.83 77,957,574.66 2,883,110,552.52 financial
fair value funds
Plan assets
Anxin
Trading
Lixiang Asset Measured at Own
Others - 1,852,280,819.94 500,153,496.56 2,528,570.30 4,404,000,000.00 3,051,719,180.06 6,394,353.94 1,854,962,886.80 financial
Management fair value funds
assets
Plan
Page 45 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Stocks
listed on
Other
domestic San'an
Measured at equity Own
and 600703 Optoelectroni 2,000,000,000.00 1,965,635,734.92 -379,152,347.47 -413,516,612.55 5,727,376.85 1,586,483,387.45
fair value instrument funds
overseas cs
investments
stock
exchanges
Stocks
listed on
Other
domestic
Measured at equity Own
and 600745 WINGTECH 884,999,996.60 1,885,465,957.10 -368,271,878.65 632,194,081.85 1,517,194,078.45
fair value instrument funds
overseas
investments
stock
exchanges
Stocks
listed on
Other
domestic
Measured at equity Own
and 600619 Highly 1,145,544,479.57 522,205,716.62 103,698,375.62 -519,052,993.48 961,076.44 626,491,486.09
fair value instrument funds
overseas
investments
stock
exchanges
16Coupon-
Measured at Other debt Own
Bonds 160017 bearing bond 288,405,500.00 307,238,782.20 -1,736,417.62 6,766,380.25 7,761,600.00 306,780,382.20
fair value investments funds
17
Structured
deposits Trading
Measured at Own
Others - under macro 307,760,661.55 702,522,948.29 -6,692,032.70 300,000,000.00 692,239,338.44 1,068,628.85 303,591,577.15 financial
fair value funds
composite assets
index
Measured at Other debt Own
Bonds 200408 20 Nongfa 08 199,203,000.00 206,612,610.97 -1,082,667.73 4,080,477.13 5,979,400.00 205,692,010.97
fair value investments funds
23 CZBank
23238008 Measured at Other debt Own
Bonds Tier 2 Capital 200,000,000.00 2,685,600.00 2,685,600.00 200,000,000.00 3,356,832.86 203,356,832.86
2 fair value investments funds
Note 02
22 Huafa
10228093 Measured at Other debt Own
Bonds Group 180,000,000.00 178,827,514.51 7,813,080.00 1,441,800.00 14,946,327.87 186,640,594.51
4 fair value investments funds
MTN006
Page 46 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other securities investments held at
1,077,128,039.81 -- 5,143,422,671.74 -105,744,121.56 -581,175,480.05 707,369,863.01 5,246,080,198.96 188,657,339.33 509,062,598.70 -- --
the end of the period
11,026,443,187.5
Total -- 11,412,085,432.91 -753,963,977.38 -866,576,746.85 9,776,405,642.93 10,263,953,807.29 312,810,510.80 10,183,366,387.70 -- --
6
Announcement disclosure date of
board's meeting for approval of April 29, 2023
securities investment
(2) Derivative investments
Applicable □ Not applicable
1) Derivative investment for speculative purposes during the report period
Applicable □ Not applicable
Unit: RMB10,000
Profits and
Proportion of the
Losses From
Investment Investment Amount at
Initial Changes in Cumulative Fair Value
Derivatives Investments Beginning Purchase Amount Sales Amount During Amount at the the End of the Period
Investment Fair Value Changes Included in
Type Amount During the report period the report period End of the to Net Assets at the
Amount in the Equity
Period End of the report
Current
period
Period
Futures hedging contracts 219.02 219.02 639.04 317.55 858.06 0.01%
Forward financial
-18,481.19 -18,481.19 29,035.84 10,483.96 0.09%
contracts
Total -18,262.17 -18,262.17 29,674.88 317.55 11,342.02 0.10%
Description of whether
there was any significant
change in the accounting
No change
policies for hedging
business and specific
principles for financial
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
accounting during the
report period as
compared to the previous
report period
Statement of actual
The actual profits and losses of futures hedging contracts during the report period were RMB123,540,300, and that of forward financial contracts during the report period was
profits and losses during
RMB-334,089,600.
the report period
Description of the
-
hedging effect
Capital source of
Own funds
derivative investments
1. Legal risks: The Company needs to abide by laws and regulations to carry out hedging and foreign exchange fund trading business, and clearly stipulate the rights and
obligations between the Company and its agencies. Control measures: In addition to studying laws, regulations and market rules, the designated responsible departments of
Risk analysis and the Company shall strictly review contracts, clarify rights and obligations, and strengthen compliance inspection to ensure that the Company's derivative investments and
description of control position meet the requirements of laws, regulations, and the Company's internal management system.
measures for derivative 2. Operational risks: Risks caused by imperfect internal processes, staff operations, systems, etc. Control measures: The Company has formulated corresponding management
positions during the systems that clarified the division of responsibilities and approval process of hedging and foreign exchange fund trading business, and a relatively perfect supervision
report period (including mechanism to effectively reduce operational risks through risk control of business, decision-making, and trading processes.
but not limited to market 3. Market risks: The uncertainty of commodity price changes and exchange rate fluctuations in the foreign exchange market leads to greater market risks in the future
risks, liquidity risks, business and foreign exchange fund trading business. Control measures: The Company's futures hedging business and foreign exchange fund trading business shall not
credit risks, operational engage in speculative transactions by adhering to the principle of prudent and steady operation. For hedging business, it is strictly stipulated that the number of hedging shall
risks, legal risks, etc.) not exceed the actual number of spot transactions, and the futures positions shall not exceed the spot amount of hedging, and a stop loss mechanism shall be adopted. With
regard to foreign exchange fund business, the Company effectively prevents market risks by evaluating and judging the trend of foreign exchange rate, and determining the
foreign exchange settlement rate through contracts.
Changes in the market
price or fair value of the
product during the report
period of the invested
derivatives, with the
analysis of the fair value
The fair value change income of derivatives during the report period was RMB296,748,800.
of the derivatives
disclosing the specific
methodology used and
the setting of relevant
assumptions and
parameters
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Involvement in lawsuits
Not applicable
(if applicable)
Announcement
disclosure date of Board
of Directors for approval April 29, 2023
of derivative investment
(if any)
Announcement
disclosure date of
shareholder's meeting for July 1, 2023
approval of derivative
investment (if any)
Special opinions of
independent directors on The independent directors of the Company believed that conducting bulk material futures hedging and foreign exchange derivative hedging business was beneficial for
the Company's derivative locking production costs, controlling operational risks, and improving management level. The Company has established a corresponding control system for the relevant
Investments and risk business under legal and compliant approval and implementation, and with controllable risks, which is in the interests of the Company and all shareholders.
control
2) Derivative investment for speculative purposes during the report period
□ Applicable Not Applicable
The Company has no derivative investment for speculative purposes during the report period.
5. Use of placements
□ Applicable Not Applicable
The Company had no use of placements during the report period.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
VIII. Significant assets and equity sales
1. Significant assets sales
□ Applicable Not Applicable
The Company did not sell any significant assets during the report period.
2. Significant equity sales
□ Applicable Not Applicable
IX. Analysis of main holding and joint-stock companies
Applicable □ Not applicable
Main subsidiaries and joint-stock companies affecting 10% or more of the Company's net profits
Unit: yuan (RMB)
Registered
Company Name Company Type Main Business Total Assets Net Assets Operating revenue Operating Profits Net Profits
Capital
Gree (Hefei)
Electric Air conditioner
Subsidiary 150,000,000.00 9,308,217,007.17 4,979,727,191.70 9,378,753,397.98 531,771,935.27 454,085,224.53
Appliances Co., manufacturing
Ltd.
Zhuhai Landa
Compressor
Compressor Co., Subsidiary 93,030,000.00 13,832,678,719.30 9,110,715,685.50 10,909,199,594.60 1,005,572,325.67 880,561,916.21
manufacturing
Ltd.
Zhuhai Gree
Xinyuan Capacitor
Subsidiary 126,180,000.00 3,369,859,652.82 1,110,075,949.21 2,010,003,940.03 152,885,859.61 128,885,351.13
Electronics Co., manufacturing
Ltd.
Zhuhai Kaibang
Motor Motor
Subsidiary 82,000,000.00 4,055,437,723.78 1,308,663,778.53 3,320,602,636.53 148,892,882.43 130,706,244.21
Manufacturing manufacturing
Co., Ltd.
Page 50 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree (Zhong Small
Shan) Small Home household
Subsidiary 30,000,000.00 1,010,982,251.42 634,354,287.07 921,655,967.39 47,760,579.92 43,419,710.00
Appliances Co., appliance
Ltd. manufacturing
Information about the acquisition and disposal of subsidiaries during the report period
Applicable □ Not applicable
Unit: yuan (RMB)
Methods of Acquisition and Disposal of Subsidiaries During
Company Name Impact on Overall Production, Operation and Performance
the Report Period
Hunan DunAn Refrigeration Equipment Co., Ltd. New 2,486,643.44
Jilin Songliang Modern Logistics Development Co., Ltd. Cancelled 0.01
Gree Lintanyuan (Shanghai) Technology Co., Ltd. New
Ganzhou Qianjin Real Estate Co., Ltd. Acquisition -804,692.79
Luoyang Herun Real Estate Co., Ltd. New -51,151.68
Tianjin Gree Xinhui Medical Equipment Co., Ltd. Cancelled
SL Group Jingu Grain Depot Co., Ltd. Cancelled 426,668.73
SL Group Songlin Grain Depot Co., Ltd. Cancelled 108,192.07
DunAn Sensing Technology Co., Ltd. Cancelled -4,927.54
Description of major holding and participating companies
None
Page 51 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
X. Structured entities controlled by the Company
□ Applicable Not Applicable
XI. Prospects for the future development of the Company
(I) Development vision of the Company
The Company will continue to adhere to its corporate vision of "To create a world-class enterprise, achieving Gree's century-
old brand." Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, it remains true to its
original aspiration, keeps its mission firmly in mind, sticks to the real economy, and adheres to the road of self-reliance and
independent innovation and development. Through innovation, responsibility, and green development, it contributes to the
progress of human society, striving to become a trusted global brand and create a better future for all.
(II) 2024 business plan
1. Promote high-quality development of the enterprise with advanced enterprise Party building
The Company adheres to the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,
and promotes the implementation of the spirit of the Party Congress, which is to "remember instructions, be united, be
grateful and strive for progress, and grow together". It strengthens the construction of Party organizations and Party member
teams, fully leverages the exemplary role of Party members, deeply integrates Party building work with enterprise
development, promotes business through Party building, and promotes high-quality development of enterprise through
business.
2. Promote the development of the enterprise with science and technology based on existing industrial advantages
As a leading manufacturing enterprise, the Company relies on its advantages and is closely connected to the industrial
ecosystem, constantly overcoming key bottleneck technologies. With technology as the core driving force for diversified
development, industrial products, intelligent equipment, household appliances, and new energy are the key directions for
diversified development. It continues to promote the basic strategy of diversified transformation and achieve stable
development of diversified businesses.
3. Accelerate digital intelligent transformation and continue to promote cost reduction and efficiency
The Company will accelerate the implementation of the top-level design plan for group informatization, increase efforts to
build a digital enterprise, improve the digital management methods and operating system of the enterprise, comprehensively
carry out digital infrastructure construction, plan digital goals from marketing, production, supply chain, finance, quality, and
other fields, and integrate the entire business process. Through applying digital technologies, the Company aims to provide
superior solutions that facilitate business transformation by reducing costs, decreasing consumption, enhancing quality, and
boosting efficiency. Additionally, the acceleration of smart factory development leveraging digital technologies will pave the
way for establishing advanced demonstration sites within the group.
4. Adhere to quality first and build a solid foundation
The Company will continue to strengthen its quality concept, strictly implement a prevention-oriented quality control mode,
strictly control product quality and safety, ensure zero safety quality accidents in after-sales service, increase investment in
automated inspection and testing technology, build a digital and intelligent quality control mode, and use advanced standards
to promote product quality and efficiency improvement. By continuously optimizing quality management innovation and
using the "D-CTFP Quality Technology Innovation Cycle Methodology" and the "Five Steps of Quality Prevention", the
Company continues to promote the improvement of product quality level, helping the "perfect quality management model" to
serve every consumer.
5. Continuously expand the channels for attracting talents and deepen the cultivation of talents
The Company strengthens the construction of reserve cadres and talent teams and refines a normalized working system for
dynamic positions among cadres, gradually forming a good situation where the capable rise to the top, the outstanding are
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
rewarded, the mediocre are relegated, and the ineffective are removed. Targeted efforts will be made to strengthen the
introduction of talents from universities, enrich the cooperation models between schools and the enterprise, and continuously
enhance the supply capacity of key job talents. It focuses on key areas and groups to carry out key training projects and
accelerate the cultivation of core professional talents. The four-in-one linkage model of "government, industries, enterprises,
universities" can integrate high-quality resources, fully empower businesses, and supply high-quality talent for the stable
development of the Company.
6. Strengthen audit supervision of the Company and consolidate internal security management
The Company should continue to innovate its internal audit system construction, introduce advanced audit tools and means,
deeply and efficiently implement audit projects, continuously expand channels for information collection, data monitoring,
and project auditing, and strengthen the crackdown on behaviors that harm the Company's interests; strengthen the
maintenance and operation of information systems to ensure efficient and controlled information systems, establish a
comprehensive risk management internal control system, enhance risk control, facilitate rational and orderly conduct of all
office affairs, and promote the healthy development of the Company.
(III) Main risks to future development
1. Macroeconomic fluctuation risk
The Company's products span two major sectors: consumer goods and industrial products. Macroeconomic fluctuations affect
changes in consumer income and expenditure, which in turn impact corporate decisions regarding strategic contraction or
expansion. These decisions have a bearing on the sales of the Company's products.
2. Risk of factor price fluctuations
On the one hand, the raw materials for the Company's products are mainly copper, steel, aluminum, and plastics of different
grades. The cost of main raw materials accounts for a relatively high proportion of the main business cost, and fluctuations in
raw material prices will have an impact on the cost. On the other hand, the rise in labor costs has become a common
phenomenon in economic development, and the increase in labor costs will have a negative impact on the Company's gross
margin.
3. Risk of intensified market competition
The urbanization rate in China is gradually increasing, and the ownership of major household appliances has significantly
increased, leading to increasingly fierce industry competition.
4. Political risks overseas
With the uncertainties brought about by the tense overseas political situation, escalating trade frictions, economic
globalization, overseas business may be faced with more risks.
5. Risk of exchange rate fluctuations
Exchange rate fluctuations may weaken product competitiveness, bring adverse effects to product exports, and may also
cause exchange losses and increase financial costs.
In the face of complex and ever-changing internal and external environment and risks, Gree will continuously improve its
corporate governance structure, improve its standardized operation level, strengthen its internal control system in accordance
with the requirements of the Company Law, Securities Law, and relevant laws and regulations of the China Securities
Regulatory Commission, to effectively prevent and control risks, ensuring the Company's sustained, stable, and healthy
development.
Lastly, the Company, along with the Board of Directors, sincerely thanks all our shareholders, global customers, partners,
and all parts of society for their trust and support in Gree Electric Appliances. With the utmost consideration for the welfare
of all our shareholders, the Board of Directors is dedicated to achieving the annual operational goals and working tirelessly to
generate long-term, value-based investment returns for the shareholders!
Page 53 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
XII. Activities such as reception of research, communication, interviews during the
report period
Applicable □ Not applicable
Type of Main Contents
Time of Method of Reception Index of Basic Information
Place of Reception Reception Discussed and
Reception Reception Object of Research
Object Material Provided
Please refer to the
information disclosed by the
Company on June 15, 2023,
Jihuibao: on CNINFO
June 15, https://n.jhbshow.co Company (http://www.cninfo.com.cn/n
Others Others Company operations
2023 m/live- investors ew/index) Gree Electric
text/2124749415 Appliances: 2022
Performance Explanation
Meeting Investor Relations
Activity Record Form.
Please refer to the
information disclosed by the
Company on September 19,
2023, on CNINFO
Quanjingwang: (http://www.cninfo.com.cn/n
September Company
https://rs.p5w.net/ht Others Others Company operations ew/index) Gree Electric
19, 2023 investors
ml/140304.shtml Appliances: 000651 Gree
Electric Appliances Investor
Relations Activity Record
Form on September 19,
2023.
Please refer to the
information disclosed by the
Company on September 22,
2023, on CNINFO
September Company (http://www.cninfo.com.cn/n
Hong Kong Others Organization Company operations
22, 2023 investors ew/index) Gree Electric
Appliances: Investor
Relations Activity Record
Form on September 22,
2023.
Please refer to the
information disclosed by the
Company on October 19,
2023, on CNINFO
October 19, Company
Shenzhen Others Organization Company operations (http://www.cninfo.com.cn/n
2023 investors
ew/index) Gree Electric
Appliances: Investor
Relations Activity Record
Form on October 19, 2023.
XIII. Implementation of the action plan for "Double Improvement of Quality and
Return"
Has the Company disclosed an action plan for "Double Improvement of Quality and Return"?
Yes □No
Page 54 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
For specific details, please refer to the Announcement on Promoting the Implementation of the 'Double Improvement of
Quality and Return' Action Plan (Announcement No.: 2024-005) disclosed by the Company on February 19, 2024, on
CNINFO (http://www.cninfo.com.cn/new/index).
Page 55 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section IV Corporate Governance
I. Basic status of corporate governance
The Company, in strict accordance with the Company Law of the People's Republic of China, Securities Law of the People's
Republic of China, other relevant national laws and regulations, and the Shenzhen Stock Exchange Listed Companies Self-
regulatory Guidelines No. 1 Standardized Operation of Main Board Listed Companies, has established a normative
corporate governance structure and rules of procedure for the General Meeting of Shareholders, Board of Directors and
Board of Supervisors, clarified the responsibilities and authorities for decision-making, execution and supervision, forming
an effective division of responsibilities and balance mechanism, and continuously promoted the standardized operation level
of the Company, safeguarding the interests of investors and the Company.
The Company's governance complied with the Company Law of the People's Republic of China and the requirements of the
China Securities Regulatory Commission regarding the governance of listed companies.
Whether there were any significant differences between the actual state of corporate governance and the laws, administrative
regulations, and regulations on corporate governance of listed companies issued by the China Securities Regulatory
Commission.
□ Yes No
There were no significant differences between the actual state of corporate governance and the laws, administrative
regulations and the regulations on governance of listed companies issued by the China Securities Regulatory Commission.
II. The independence of the Company from the controlling shareholder and the actual
controller in terms of assets, personnel, finance, organization and business of the
Company
The Company has a sound corporate governance structure and is completely independent of the largest shareholder, Zhuhai
Mingjun, in assets, personnel, finance, organization, and business, and the Company has an independent and complete
business operation and independent management capability.
III. Horizontal competition
□ Applicable Not Applicable
IV. Annual general meeting of shareholders and interim general meeting of
shareholders during the report period
1. General meetings of shareholders during the report period
Investor
Session of
Type of Meeting Participat Date of Convening Date of Disclosure Meeting Resolutions
Meeting
ion Ratio
Announcement on the
2022 Annual Annual General Resolutions of 2022
General Meeting Meeting of 42.88% June 30, 2023 July 1, 2023 Annual General
of Shareholders Shareholders Meeting of
Shareholders
Page 56 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
(Announcement No.:
2023-031) on CNINFO
(http://www.cninfo.com
.cn/new/index)
2. Convening of an interim general meeting of shareholders requested by the preferred shareholders
with restored voting rights
□ Applicable Not Applicable
Page 57 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
V. Directors, supervisors, and senior executives
1. Basic information
Number of
Shares
Number of Shares Number of Shares Other Number of Shares
Decreased Reasons for Increase
Employme Held at the Increased in the Increase/Dec Held at the End of
Name Sex Age Title Term Start Date Term End Date in the or Decrease of
nt Status Beginning of the Current Period rease the Period
Current Shares
Period (Shares) (Shares) (Shares) (Shares)
Period
(Shares)
Chairperson Incumbent May 25, 2012 February 28, 2025 Ownership of
Dong employee stock
Female 69 44,488,492 10,000,000 54,488,492
Mingzhu President Incumbent April 24, 2001 February 28, 2025 ownership plan
shares
Ownership of
Director and Secretary employee stock
Zhang Wei Male 47 Incumbent January 16, 2019 February 28, 2025 183,328 183,328
of the Party Committee ownership plan
shares
Guo
Male 67 Director Incumbent January 16, 2019 February 28, 2025
Shuzhan
Zhang
Male 63 Director Incumbent May 25, 2012 February 28, 2025
Jundu
Director Incumbent February 28, 2022 February 28, 2025 Secondary market
Vice President Incumbent December 26, 2020 February 28, 2025 increase and
Deng ownership of
Male 48 116,600 116,600
Xiaobo Secretary of the Board employee stock
Incumbent December 26, 2020 February 28, 2025
of Directors ownership plan
shares
Liu Shuwei Female 71 Independent director Incumbent January 16, 2019 February 28, 2025
Wang
Male 62 Independent director Incumbent January 16, 2019 February 28, 2025
Xiaohua
Xing Ziwen Male 61 Independent director Incumbent January 16, 2019 February 28, 2025
Zhang
Male 56 Independent director Incumbent February 28, 2022 February 28, 2025
Qiusheng
Cheng Min Female 43 Supervisor Incumbent November 2, 2020 February 28, 2025
Page 58 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Duan Secondary market
Male 60 Supervisor Incumbent January 16, 2019 February 28, 2025 447,525 156,300 603,825
Xiufeng increase
Ownership of
Wang employee stock
Female 40 Employee supervisor Incumbent January 16, 2019 February 28, 2025 51,355 51,355
Fawen ownership plan
shares
Ownership of
employee stock
Zhuang Pei Male 59 Vice President Incumbent April 16, 2003 February 28, 2025 5,955,202 420,253 6,375,455
ownership plan
shares
Ownership of
Tan Vice President and employee stock
Male 59 Incumbent August 30, 2017 February 28, 2025 1,297,300 488,469 1,785,769
Jianming Chief Engineer ownership plan
shares
Ownership of
employee stock
Shu Lizhi Male 54 Vice President Incumbent December 26, 2020 February 28, 2025 99,719 99,719
ownership plan
shares
Ownership of
Liao President Assistant and employee stock
Male 50 Incumbent August 6, 2020 February 28, 2025 77,663 77,663
Jianxiong Finance Chief ownership plan
shares
Ownership of
Fang employee stock
Male 46 Vice President Incumbent November 19, 2021 February 28, 2025 167,400 391,890 559,290
Xiangjian ownership plan
shares
Total -- -- -- -- -- -- 52,355,919 11,985,577 64,341,496 --
Whether there are cases of quit of directors and supervisors and dismissal of senior executives during the report period
□ Yes No
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Changes in the Company's directors, supervisors and senior executives
□ Applicable Not Applicable
2. Employment situation
Professional background, major work experience, and current major responsibilities of the Company's current directors,
supervisors and senior executives
Ms. Dong Mingzhu, with a master's degree, currently serves as the Chairperson and President of Gree Electric Appliances,
Inc. of Zhuhai. She successively held the posts of salesperson, Vice Director of Sales Department, Director of Sales
Department, Deputy General Manager, Vice Chairperson and President of Gree Electric Appliances.
She was successively elected as a deputy of the 10th, 11th, 12th, 13th, and 14th National People's Congress, a member of the
10th, 11th, and 12th Executive Committee of the All-China Women's Federation, an expert who enjoys special government
allowances from the State Council, a member of the 13th Five-Year Plan Expert Committee of the National Development and
Reform Commission, a member of the Advisory Committee of the All-China Federation of Industry and Commerce, a United
Nations Ambassador for Sustainable Urban Development, the first rotating chair of the UNDP Commission on Sustainable
Development, and Chairperson of the ISO/TC86/SC4.
She was awarded the "National Model Worker", "National May Day Labor Medal", "National March 8th Red Banner
Pacesetter", China Patent Gold Award, the Third China Quality Award, Liu Yuanzhang Quality Technology Contribution
Award, Fudan University Outstanding Contribution to Enterprise Management Award, Top 10 Management Innovation
Leaders Practitioners of Tsinghua Business Review in 2018, and "China Outstanding Individual for Quality (National
Individual Quality Award)", Nomination Award for the 4th China Quality Award, Advanced Individual of Private Economy
in the Fight against the COVID-19 Epidemic, Outstanding Contribution Award of China Standard Innovation Contribution
Award, and other honors and titles, and three times has been selected by CCTV as "Economic Personality of the Year."
Mr. Zhang Wei, a senior economist with a bachelor's degree, currently serves as the Secretary of the Party Committee and
Director of Gree Electric Appliances, Inc. of Zhuhai.
He joined Gree Electric Appliances, Inc. of Zhuhai in 1999 and successively served as the head of Gree Electric Appliances
Pipeline Branch, Material Supply Department, Outsourcing and Purchasing Quality Management Department, Enterprise
Management Department, and President Assistant, and served as Vice President of Zhuhai Gree Group Co., Ltd. from 2013
to 2020, served as a director of Gree Electric Appliances from January 2019 to now, and has been serving as the Secretary of
the Party Committee of Gree Electric Appliances since September 2020.
Mr. Guo Shuzhan, with a junior college degree, currently serves as a director of Gree Electric Appliances, Inc. of Zhuhai.
Since August 2006, he has been serving as the Chairman and General Manager of Jinghai Internet Technology Development
Co., Ltd.; since August 2012, he has been serving as the Executive Director of Henan Shengshi Xinxing Gree Trade Co., Ltd.;
from May 2012 to January 2019, he served as a supervisor of the Company, and since January 2019, he has been serving as a
director of the Company.
Mr. Zhang Jundu, with a junior college degree, currently serves as a director of Gree Electric Appliances, Inc. of Zhuhai.
Since September 1999, he has been serving as the Chairman of Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. Sinc
August 2012 to the present, he has been concurrently serving as the Executive Director and General Manager of Zhejiang
Shengshi Xinxing Gree Trade Co., Ltd., and has served as director of the Company from May 2012 to the present.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Mr. Deng Xiaobo, with a bachelor's degree, currently serves as a director, Vice President and Secretary of the Board of
Directors of Gree Electric Appliances, Inc. of Zhuhai.
He joined Gree Electric Appliances, Inc. of Zhuhai in December 2020 and served as Vice President and Secretary of the
Board of Directors of the Company. Since February 2022, he has been serving as Director of Gree Electric Appliances, Inc.
of Zhuhai.
Ms. Liu Shuwei, with a master's degree, currently serves as an independent director of Gree Electric Appliances, Inc. of
Zhuhai.
Ms. Liu graduated from Peking University with a master's degree in economics in 1986 and studied under the tutelage of
Professor Chen Daisun and Professor Li Yining, who are renowned scholars in finance. In 2002, she was awarded "Economic
Personality of the Year" and "Touching China 2002 Person of the Year" by CCTV. Now, she is an independent director of
Costar Group Co., Ltd., and a researcher on Chinese enterprises at the Central University of Finance and Economics. She has
served as an independent Director of the Company from January 2019 to the present.
Mr. Xing Ziwen, with a doctoral degree, currently serves as an independent director of Gree Electric Appliances, Inc. of
Zhuhai.
He is currently a professor of Xi'an Jiaotong University, executive director of the Chinese Association of Refrigeration, an
academic member of the State Key Laboratory of High-end Compressor and System, State Key Laboratory of Air-
conditioning Equipment and System Energy Conservation, and the candidate of several national leading talent plans,
enjoying special allowance of the State Council. Professor Xing Ziwen has served as the director of the Department of
Refrigeration and Cryogenic Engineering, Director of Compressor Research Institute, and Deputy Director of the National
Engineering Center for Fluid Machinery and Compressors of School of Energy and Power Engineering, Xi'an Jiaotong
University. He has won 2 National Science and Technology Progress Awards, 9 Provincial and Ministerial Science and
Technology Progress Awards, and the Special Award for Science and Technology Progress of the Chinese Association of
Refrigeration, the Special Award for Invention and Entrepreneurship of the China Association of Inventions, the
Distinguished Professor Award of the Xia Anshi Education Foundation, and the Youth Innovation Award of the Ho Leung
Ho Lee Foundation, etc.
Mr. Wang Xiaohua, a Master of Laws from the University of East London, is a first-class lawyer in Guangdong Province, a
national outstanding lawyer, and a visiting professor at Zhongnan University of Economics and Law. He is now an
independent director of Gree Electric Appliances, Inc. of Zhuhai.
He has been working at ETR Law Firm since January 1993 and is currently the honorary director and founding partner of the
law firm. He also serves as a legal advisor to units such as the Guangdong Provincial Public Security Department, Zhong
Nanshan Medical Foundation, and the General Office of the Guangdong Provincial CPPCC. In addition, he is an independent
director of Guangzhou Tower Tourism and Culture Development Co., Ltd. and ARROW Home Group Co., Ltd. He has
served as a member of the Standing Committee of Guangdong Provincial CPPCC, a councilor of the All China Lawyers
Association, a legal advisor to the 16th Asian Games Organizing Committee, a supervisory judicial consulting expert of the
Standing Committee of the Guangdong Provincial People's Congress, the President of the Guangzhou Alumni Association of
Zhongnan University of Economics and Law, a member of the Guangdong Province Law Society, a member of the 9th All-
China Youth Federation, the President of the Guangzhou Lawyers Association, a legal consulting expert and legal advisor to
the People's Government of Guangzhou Municipality. Over the past 35 years of practice, he has handled more than 1,000
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
litigation, arbitration, and non-litigation cases and projects individually or with his team, having rich experience in legal
services.
Mr. Wang Xiaohua has published four monographs and co-authored four books, published more than 30 papers and articles,
and submitted more than 60 proposals, and was praised by the Nanfang Daily News as a major proposal writer.
Mr. Zhang Qiusheng, with a doctoral degree, is a non-practicing member of the Chinese Certified Public Accountant. He is
currently a professor at the School of Economics and Management of Beijing Jiaotong University, the director of the
National Institute of Transportation Development, the director of the China Center for Corporate Mergers and Acquisitions,
and an independent director of CMST Development Co., Ltd. and Luoniushan Co., Ltd.
Mr. Zhang Qiusheng has undertaken various provincial and ministerial research projects, including the National Natural
Science Foundation of China, the National Social Science Fund of China, the National Soft Science Program, as well as the
Ministry of Education, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the
State Council, and the China Securities Regulatory Commission. He has published more than 30 works (translations)
including the monograph A Framework for Mergers and Acquisitions and more than 100 academic and professional papers,
and has won a second prize for national teaching achievements, 4 awards for provincial and ministerial research
achievements, and 2 first prizes for teaching achievements in Beijing.
Ms. Cheng Min, with a bachelor's degree, currently serves as a supervisor of Gree Electric Appliances, Inc. of Zhuhai.
She serves as the President Assistant of Zhuhai Gree Group Co., Ltd., and the Chairperson of Zhuhai Gexin Development Co.,
Ltd. She successively held the posts of the head of the Planning Department of Zhuhai Exhibition and Convention Bureau, a
member of the Party Group of Zhuhai Exhibition and Convention Bureau, and the office director and secretary of the Board
of Directors of Zhuhai Gree Group Co., Ltd.
Mr. Duan Xiufeng currently serves as a supervisor of Gree Electric Appliances, Inc. of Zhuhai.
He graduated from Shandong Party School in 1999 and has served as the Deputy General Manager and General Manager of
Shandong Gree Electric Appliance Marketing Co., Ltd. and General Manager of Shandong Shengshi Xinxing Gree Trade Co.,
Ltd. He has served as a supervisor of the Company from January 2019 to the present.
Ms. Wang Fawen, with a master's degree, a mid-level economist and human resources manager, serves as the supervisor of
the staff representative of Gree Electric Appliances, Inc. of Zhuhai.
From 2007 to 2019, she successively served as Human Resources Specialist of the Human Resources Department, Director
of the Personnel General Office, Supervisor of the Performance Section, Supervisor of the Training Section, Assistant
Director of the Training Department, Human Resources Department and Director of the Training Department; she has been
serving as a supervisor of the Employee Representative of the Company since January 2019, and the Director Assistant of the
Human Resources Department of the Company since February 2019.
Mr. Zhuang Pei, a senior engineer with a bachelor’s degree, currently serves as the Vice President of Gree Electric
Appliances, Inc. of Zhuhai.
He served as President’s Assistant from 2002 to April 2003 and has been serving as Vice President of the Company since
April 2003.
Page 62 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Mr. Tan Jianming, with a master's degree, currently serves as the Vice President and Chief Engineer of Gree Electric
Appliances, Inc. of Zhuhai.
From 1982 to 1986, he studied Refrigeration and Cryogenic Engineering major at Huazhong University of Science and
Technology and received his bachelor's degree; from 1986 to 1989, he continued his studies in Refrigeration and Cryogenic
Engineering at Huazhong University of Science and Technology and received his Master's degree; after graduation in 1989,
he joined Gree Electric Appliances, Inc. of Zhuhai and successively served as a Designer, Director, President Assistant, and
Deputy Chief Engineer, etc. Since August 2017, he has been serving as the Vice President and Chief Engineer of the
Company.
Mr. Shu Lizhi, with a master's degree, currently serves as the Vice President of Gree Electric Appliances, Inc. of Zhuhai.
He served as the Deputy Director and Director of Wuhan Special Commission Office of the National Audit Office. He joined
Gree Electric Appliances, Inc. of Zhuhai in December 2019. He has served as Vice President of the Company from
December 2020 to the present.
Mr. Fang Xiangjian, a senior engineer with a master’s degree, currently serves as the Vice President of Gree Electric
Appliances, Inc. of Zhuhai.
From July 2004 to December 2016, he successively served as the assistant to factory manager, deputy factory manager and
factory manager of the Incoming Materials Inspection Factory, and Director of Quality Control Department, of Gree Electric
Appliances, Inc. of Zhuhai. He has been serving as the Assistant President of Gree Electric Appliances, Inc. of Zhuhai since
December 2016 and has been serving as the Vice President of Gree Electric Appliances, Inc. of Zhuhai since November 2021.
He won the Guangdong May Day Labor Medal, Liu Yuanzhang Quality Technical Talent Award, and the Management
Talent Award of the China Management Science Society. He serves as Vice President of the China Association for Quality
Inspection, Professional Committee Member of the China Fire Protection Association, Member of the 8th Academic
Committee of the China Association for Quality, Vice Chairman of the Green and Efficient Energy Products Professional
Committee of the China Energy Conservation Association, and a member of the 3rd TC463 Committee.
Mr. Liao Jianxiong, with a bachelor's degree, currently serves as the Finance Chief and President Assistant of Gree Electric
Appliances, Inc. of Zhuhai.
He joined Gree in May 1993 and successively served as the head of the Financial Department of Gree (Chongqing) Electric
Appliances Co., Ltd., head of the Financial Department and President Assistant of Gree Electric Appliances, Inc. of Zhuhai.
He has served as the Finance Chief and assistant to the president of the Company from August 2020 to the present.
Employment in Shareholders
Applicable □ Not applicable
Receive
Remuneration and
Name of Name of Position Held at
Term Start Date Term End Date Allowance From
Incumbent Shareholder the Shareholder
the Shareholder or
Not
Zhuhai Gree
Cheng Min President Assistant March 1, 2020 Yes
Group Co., Ltd.
Jinghai Internet
President and
Technology
Guo Shuzhan Legal August 1, 2006 Yes
Development Co.,
Representative
Ltd.
Jinghai Internet
Zhang Jundu Director September 20, 2023 Yes
Technology
Page 63 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Development Co.,
Ltd.
Description of
incumbent in None
shareholders
Employment in other companies
Applicable □ Not applicable
Receive
Remuneration
Position Held in
Name of Name of Other and Allowance
the Other Term Start Date Term End Date
Incumbent Companies From Other
Companies
Companies or
Not
Zhuhai Gezhen
Investment
Dong Mingzhu Management Executive Partner September 26, 2019 No
Partnership (Limited
Partnership)
Kingdee International
Non-executive
Dong Mingzhu Software Group Co., August 21, 2012 Yes
Director
Ltd.
Beijing Qianyuan
Guo Shuzhan Hengjiuhe Liquor Director April 25, 2014 No
Co., Ltd.
Xiahe Hengsheng
Guo Shuzhan Director May 1, 2017 No
Hydropower Co., Ltd.
Henan Shengshi
Guo Shuzhan Xinxing Gree Trade Executive Director August 1, 2010 Yes
Co., Ltd.
Luoyang Gree Executive Director
Guo Shuzhan Electric Appliance and General June 1, 2010 No
Logistics Co., Ltd. Manager
Xiahe Hengfa
Guo Shuzhan Director June 1, 2005 No
Hydropower Co., Ltd.
Henan Gree
Guo Shuzhan Installation Executive Director March 10, 2021 No
Engineering Co., Ltd.
Henan Sanli Real
Guo Shuzhan Estate Development Supervisor November 6, 2006 No
Co., Ltd.
Zhejiang Tongcheng
Zhang Jundu Gree Electric Chairman September 1, 1999 Yes
Appliances Co., Ltd.
Ningbo Tongcheng
Zhang Jundu Gree Electric Director July 1, 2013 No
Appliance Co., Ltd.
Zhejiang Shengshi Executive Director
Zhang Jundu Xinxing Gree Trade and General January 1, 2017 Yes
Co., Ltd. Manager
Zhejiang Ruitong
Zhang Jundu Director December 1, 2014 No
Vehicle Co., Ltd.
Wenzhou Tongcheng
Zhang Jundu Economic and Trade Director April 1, 2012 No
Co., Ltd.
Zhang Jundu Huzhou Tongcheng Director November 1, 2008 No
Page 64 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree Electric
Appliance Co., Ltd.
China Vanke Co., Independent
Liu Shuwei June 30, 2017 June 29, 2023 Yes
Ltd. director
Costar Group Co., Independent
Liu Shuwei April 10, 2019 Yes
Ltd. director
Wang Xiaohua ETR Law Firm Honorary Director July 1, 2022 Yes
ARROW Home Independent
Wang Xiaohua December 18, 2019 Yes
Group Co., Ltd. director
CantonTower
Cultural Tourism Independent
Wang Xiaohua April 27, 2021 Yes
Development Co., director
Ltd.
Jinneng Holding
Zhang Independent
Shanxi Coal Industry June 5, 2020 Yes
Qiusheng director
Co., Ltd.
Zhang Independent
Luoniushan Co., Ltd. October 1, 2022 Yes
Qiusheng director
Tianjin Lishen
Zhang Independent
Battery Joint-stock December 25, 2021 Yes
Qiusheng director
Co., Ltd.
Zhang Yusys Technologies Independent
August 18, 2022 Yes
Qiusheng Co., Ltd. director
Zhang CMST Development Independent
October 1, 2022 Yes
Qiusheng Co., Ltd. director
Zhejiang Wangzhou
Xing Ziwen Internet of Things Director November 10, 2014 Yes
Technology Co., Ltd.
Zhuhai Gexin President and
Cheng Min Development Co., Legal September 11, 2018 Yes
Ltd. Representative
Beijing Rongzhi
Xingwei
Duan Xiufeng Executive Director May 13, 2014 March 31, 2023 No
Management
Consulting Co., Ltd.
Jinan Qihui Small
Duan Xiufeng Director February 4, 2009 No
Loan Co., Ltd.
Shandong Blue
Economy Industrial
Duan Xiufeng Chairman November 5, 2014 No
Fund Management
Co., Ltd.
Jinan Jierui New Executive Director
Duan Xiufeng Energy Technology and General December 21, 2016 No
Co., Ltd. Manager
Zhongfu Huaxia
Duan Xiufeng Management Chairman December 23, 2005 No
Consulting Co., Ltd.
Executive Director
Hainan Jierui Tongda
Duan Xiufeng and General June 15, 2024 No
Investment Co., Ltd.
Manager
Jinan Rural
Duan Xiufeng Commercial Bank Supervisor May 22, 2020 No
Co., Ltd.
Description of
incumbent in
None
the other
companies
Page 65 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior executives in the report
period in the recent three years
Applicable □ Not applicable
On December 27, 2021, Mr. Duan Xiufeng, a supervisor of the Company, cumulatively reduced his holdings of the
Company's shares through centralized bidding, amounting to 149,175 shares, representing 0.0025% of the total share capital
at that time. However, Mr. Duan failed to disclose his share reduction plan 15 trading days prior to the first sale, contravening
the provisions of the Information Disclosure Regulations for Listed Companies, as well as the Several Provisions on the
Reduction of Shares Held by Shareholders, Directors, Supervisors, and Senior Management of Listed Companies. In
response to this situation, the Guangdong Branch of the China Securities Regulatory Commission has administered an
administrative regulatory measure against Mr. Duan Xiufeng in the form of a warning letter; concurrently, the Shenzhen
Stock Exchange has also issued a regulatory letter to him.
3. Remuneration of directors, supervisors and senior executives
Decision-making procedures, determination basis, and actual payment regarding the remunerations of directors, supervisors
and senior executives
During the report period, to fully stimulate the potential of the Board of Directors and Supervisors and create greater value,
and to establish a salary assessment and incentive system that is in line with the actual situation of the Company, the Board of
Directors evaluated the performance of senior executives in terms of "morality, ability, diligence, and performance" in
accordance with relevant provisions such as the Company's Articles of Association.
Remunerations of directors, supervisors and senior executives in the report period
Unit: RMB10,000
Receive
Total Pre-tax Remuneration
Employment Remuneration From a Related
Name Sex Age Title
Status Received From Party of the
the Company Company or
Not
Dong
Female 69 Chairperson & President Incumbent 1,213.8 Yes
Mingzhu
Director and Secretary of the Party
Zhang Wei Male 47 Incumbent 400 No
Committee
Guo
Male 67 Director Incumbent 0 Yes
Shuzhan
Zhang
Male 63 Director Incumbent 0 Yes
Jundu
Deng Director, Vice President, Secretary
Male 48 Incumbent 300 No
Xiaobo of the Board of Directors
Liu
Female 71 Independent director Incumbent 20 No
Shuwei
Wang
Male 62 Independent director Incumbent 20 No
Xiaohua
Xing
Male 61 Independent director Incumbent 20 Yes
Ziwen
Zhang
Male 56 Independent director Incumbent 20 No
Qiusheng
Cheng
Female 43 Supervisor Incumbent 0 Yes
Min
Duan Male 60 Supervisor Incumbent 0 No
Page 66 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Xiufeng
Wang
Female 40 Employee supervisor Incumbent 74.39 No
Fawen
Zhuang
Male 59 Vice President Incumbent 240 No
Pei
Tan
Male 59 Vice President and Chief Engineer Incumbent 400 No
Jianming
Shu Lizhi Male 54 Vice President Incumbent 220 No
Liao
Male 50 Finance Chief, President Assistant Incumbent 180 No
Jianxiong
Fang
Male 46 Vice President Incumbent 300 No
Xiangjian
Total -- -- -- -- 3,408.19 --
Explanation of other situations
□ Applicable Not Applicable
VI. Performance of directors' duties during the report period
1. The Board of Directors during the report period
Session of Meeting Date of Convening Date of Disclosure Meeting Resolutions
For details, please refer to
Announcement of Resolutions of
the 11th Meeting of the 12th
The 11th Meeting of the 12th Board of Directors
March 28, 2023 March 29, 2023
Board of Directors (Announcement No.: 2023-009)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
For details, please refer to
Announcement of Resolutions of
the 12th Meeting of the 12th
The 12th Meeting of the 12th Board of Directors
April 28, 2023 April 29, 2023
Board of Directors (Announcement No.: 2023-019)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
For details, please refer to
Announcement of Resolutions of
the 13th Meeting of the 12th
The 13th Meeting of the 12th Board of Directors
April 28, 2023 April 29, 2023
Board of Directors (Announcement No.: 2023-023)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
For details, please refer to
Announcement of Resolutions of
the 14th Meeting of the 12th
The 14th Meeting of the 12th Board of Directors
August 30, 2023 August 31, 2023
Board of Directors (Announcement No.: 2023-037)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
The 15th Meeting of the 12th For details, please refer to
October 30, 2023 October 31, 2023
Board of Directors Announcement of Resolutions of
Page 67 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
the 15th Meeting of the 12th
Board of Directors
(Announcement No.: 2023-041)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
For details, please refer to
Announcement of Resolutions of
the 16th Meeting of the 12th
The 16th Meeting of the 12th Board of Directors
December 19, 2023 December 20, 2023
Board of Directors (Announcement No.: 2023-051)
on CNINFO
(http://www.cninfo.com.cn/new/in
dex)
2. Attendance of directors at meetings of the Board of Directors and general meetings of shareholders
Attendance of directors at meetings of the Board of Directors and general meetings of shareholders
Number of Whether Fail
Times of On- Times of
Meetings of Times of Times of to Personally
site Attending Times of
the Board of Attending Absence Attend the
Attendance Meetings of Attending the
Name of the Directors Meetings of From Meetings of
at the the Board of General
Director Requiring the Board of Meetings of the Board of
Meetings of Directors via Meetings of
Attendance Directors by the Board of Directors for
the Board of Communicati Shareholders
in the Report Entrusting Directors Consecutivel
Directors on Tools
Period y Twice?
Dong
6 6 0 0 0 No 1
Mingzhu
Zhang Wei 6 6 0 0 0 No 1
Guo Shuzhan 6 1 5 0 0 No 1
Zhang Jundu 6 2 4 0 0 No 1
Deng Xiaobo 6 6 0 0 0 No 1
Liu Shuwei 6 5 1 0 0 No 1
Wang
6 4 2 0 0 No 1
Xiaohua
Xing Ziwen 6 4 2 0 0 No 1
Zhang
6 4 2 0 0 No 1
Qiusheng
Explanation of absence from the Board of Directors for consecutively twice
3. Directors' objection to relevant matters of the Company
Whether the directors objected to relevant issues of the Company?
□ Yes No
The directors didn't raise any objection to relevant issues of the Company.
4. Other descriptions for performance of duties by directors
Whether the relevant suggestions on the Company by directors were adopted
Yes □No
Directors' explanation on whether to adopt the suggestions
Page 68 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
During the report period, the directors of the Company were able to take the best interests of the Company and shareholders
as their code of conduct, faithfully performed their duties in accordance with the relevant regulations, attended the meetings
of the Board of Directors and Meeting of Shareholders, carefully deliberated the proposals and made suggestions and
comments on the management of the Company, which played a positive role in the effective decision-making of the Board of
Directors, improving the management level and standardizing the operation of the Company.
VII. Specialized committees under the Board of Directors during the report period
Important
Number of Comments Other Details of
Committee
Member Status Meetings Date of Convening Conference Content and Performance Objection
Name
Held Suggestions of Duties (if any)
Proposed
Deliberation of the
following proposals:
I. 2022 Financial
Statements
Liu Shuwei,
Audit II. 2022 Annual Report
Wang Xiaohua, April 28, 2023
Committee and its Summary
and Zhang Wei
III. Proposal on the
Proposed Appointment of
the Company's Audit
4 Agency in 2023
Liu Shuwei,
Audit Deliberation of the 2023
Wang Xiaohua, April 28, 2023
Committee First Quarter Report
and Zhang Wei
Liu Shuwei, Deliberation of 2023 Semi-
Audit
Wang Xiaohua, August 30, 2023 annual Report and its
Committee
and Zhang Wei Summary
Liu Shuwei,
Audit Deliberation of the 2023
Wang Xiaohua, October 30, 2023
Committee Third Quarter Report
and Zhang Wei
Deliberation of the 2022
Remuneration Wang Xiaohua, Compensation
and Appraisal Liu Shuwei, April 28, 2023 Distribution Plan for
Committee and Zhang Wei Directors, Supervisors and
2 Senior Executives
Deliberation of
Remuneration Wang Xiaohua,
Suggestions on the Highest
and Appraisal Liu Shuwei, December 12, 2023
Compensation for Senior
Committee and Zhang Wei
Executives of the Company
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors has identified any risks in the Company during its supervision activities during the report
period
□ Yes No
The Board of Supervisors has no objection to the supervision matters during the report period.
Page 69 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
IX. The Company's staff
1. Number of employees, their specialties and education level
Number of on-the-job employees of the parent company at the
20,259
end of the report period (person)
Number of on-the-job employees of the main subsidiaries at the
52,351
end of the report period (person)
Total number of on-the-job employees at the end of the report
72,610
period (person)
Total number of employees receiving salaries for the current
72,610
period (person)
Number of retired employees for whom the parent company
435
and main subsidiaries need to bear expenses (person)
Specialties
Category of specialties Number (person) of employees of specialties
Manufacturing personnel 50,292
Sales personnel 2,528
Technician 15,282
Financial personnel 1,115
Administrative personnel 3,393
Total 72,610
Educational level
Education level category Number of employees (person)
Bachelor’s degree or above 16,507
College degree 12,894
Technical secondary school and below 43,209
Total 72,610
2. Remuneration policy
Faced with the uncertainty and complexity of the macroeconomic environment, the Company attached great importance to
and safeguards the vital interests of employees, optimized and adjusted compensation plans, and continuously improved the
position-based and performance-oriented compensation mechanism. At the same time, the Company focused on high-quality
talents and continued to implement a project-based technology talent evaluation mechanism to motivate technology personnel
and R&D technology breakthroughs, deepen the reform of the salary system, build a career development channel for
employees, form a reasonable, flexible, and effective salary system, optimize the construction of the talent pool, and promote
the improvement of organizational efficiency.
3. Training plan
(1) Adhere to lifelong learning management and strive to build talent highland
Firstly, it is necessary to widely cultivate talents of universal applicability. Normalized company-wide open courses and
routine learning sessions for grassroots management leaders were implemented. More than 100 public seminars were
organized throughout the year, attracting nearly 4,000 participants, solidly promoting the inheritance of management
expertise, sharing of R&D technologies, and enhancing professional competencies. The four-level training linkage
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
mechanism of company, department, division, and individual was systematically promoted, and learning activities at all
levels were organized and carried out. About 7,400 special training sessions were organized and more than 400,000 people
participated throughout the year. Second, it is necessary to strengthen key groups. The "Pioneer" talent training project was
organized and carried out, training 270 grassroots management personnel; a fresh graduate training camp was carried out to
provide comprehensive and multi-level training support for nearly 800 fresh graduates. After the epidemic, the resumption of
the fresh graduate onboarding ceremony for the first time has received attention and praise from all levels. Third, it is
necessary to train highly skilled personnel vigorously. The Company persisted in carrying out the "Foundation Consolidation
Project" aimed at elevating job-specific skills. Through master-apprentice programs led by renowned mentors, assessment
and certification processes, and skill competitions, a total of 79 batches of new staff orientation training and base support
training were conducted, involving 4,867 individuals. Additionally, 29 skill contests were held, engaging nearly 1,000
employees, and specialized training for over 1,400 personnel was organized. This approach realized standardized job training,
routine professional development, and competitive skill enhancement. The Company focused on promoting the "Strong
Foundation Project" for highly skilled talents, relying on the construction of national-level highly skilled talent training bases
to overcome difficulties, actively coordinate resources, closely monitor nodes, efficiently promote, and annually cultivate
more than 1,500 highly skilled talents; at the same time, it took this opportunity to promote the upgrading and transformation
of the employee training center, solve the long-standing common aspiration, and fully realize the maximum benefits. The
Company utilized platforms such as skilled master studios and technician workstations to establish a skilled talent training
system, connect the development channels of skilled talents, and focus on building a highly skilled talent team with a
"reasonable structure, strong skills, sufficient quantity, and excellent quality", thereby enhancing the Company's industrial
competitiveness.
(2) Adhere to the ability to empower people, cultivate people, and steadily promote the construction of talents
First, ideological and political education is vividly implemented. The Company adhered to the guidance of political ideology,
actively practiced the core values of Chinese socialism, promoted advanced corporate culture, served the overall development
of the enterprise, and worked hard to cultivate industrial workers with moral integrity and talent for the new era. It organized
and carried out special training courses for young entrepreneurs in Zhuhai and training courses for the Company's Party
members and leaders, further enhancing the ideological realm and political consciousness of "learning and implementing the
20th National Congress, being the pioneer in the industry". It organized and carried out special education on "learning from
the spirit of Lei Feng, becoming a helpful person", special education on "protecting the market during the peak season",
national defense education month activities, ideological education on the "Young Eagle Plan" for fresh graduates, and special
education on "learning from models, striving for being advanced, creating excellent achievements, and making new
achievements". Efforts were being made to implement the guiding ideology of "raising the flag, gathering people's hearts,
nurturing new talents, promoting culture, and showcasing image" and achieve results. Second, Party building is efficiently
promoted. The Company actively took the initiative, bravely explored and innovated, carefully designed and produced a
special issue on Party building, highlighted the style of Party spirit, and created a Party building brand. The Company
completed the production of Party building promotional videos and microfilms, updated and improved the Party building
corridor and column in the Company's science and technology exhibition hall, established a propaganda platform, and created
a demonstration window, to fully display the image and style of "National Advanced Grassroots Party Organization." Third,
veteran service is actively advanced. The Company emphasized both business management and social responsibility and
worked hard to solidly promote the service work for retired soldiers with dedication and emotion. The Company's Veterans
Service Center was officially established to create connections, actively solve difficulties, and promote Party policies, thereby
driving the development of the enterprise. It was awarded the first batch of "socialized army-supporting enterprises" in China
and a member unit of the Guangdong Province "Veterans Employment and Entrepreneurship Service Alliance."
(3) Adhere to the market service after sales and actively build a talent system
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
First, domestic after-sales training has been fully promoted. The Company fully supported the after-sales training work of
national sales companies, with the aim of "linking training and innovation mechanisms, integrating resources for targeted
training". Through organizing the 9th "Journey of Best Products Building the Future" technical training camp, the "Keeping
Warning and Bearing Safety in Mind" peak season safety activities, and precise online and offline special training activities
covering different product series, more than 540,000 domestic after-sales training personnel were completed, achieving
hierarchical and precise levels. Second, overseas after-sales training has made a strong comeback. The Company assisted in
promoting the sales of its products, meeting the needs of overseas customers, and supporting the resolution of after-sales
technical problems. It adopted a model of "remote training + factory training + factory return training", and completed a total
of 99 overseas customer training needs online and offline through a combination of "theoretical teaching/practical
training/engineering support/market promotion". More than 700 after-sales training sessions were organized, achieving a
significant increase in the number of overseas remote training, normal resumption of factory training, and breakthrough in
zero factory return training, enhancing the influence of the Gree brand in overseas regions. Third, the system construction has
been optimized and improved constantly. The Company gradually established a sound after-sales training system to ensure
the orderly implementation of after-sales training management work. By establishing lecturer resources, 32 qualified after-
sales key members were included in the lecturer library, supporting the continuous improvement of 89 after-sales first level
lecturers, constructing new training platform resources, promoting the launch of customized functions for five batches,
updating nearly 300 after-sales technical courses, and activating accounts exceeding 60,000; at the same time, it strengthened
the management and supervision of after-sales training through the point based system.
4. Labor outsourcing
□ Applicable Not Applicable
X. Profit distribution and conversion of capital reserves into share capital by the
Company
Profit distribution policy during the report period, especially the formulation, implementation or adjustment of the cash
dividend policy
Applicable □ Not applicable
On June 30, 2023, the Company's 2022 annual general meeting of shareholders approved the 2022 Profit Distribution Plan.
Based on the total share capital of the Company, which was 5,631,405,741 shares, after deducting the number of shares in the
repurchase account, which was 17,564,128 shares, a cash dividend of RMB10 (tax inclusive) was distributed to all
shareholders for every 10 shares. No bonus shares were given, and no capital was converted from capital reserves. A total of
RMB5,613,841,613 in cash dividends was distributed. The plan was completed on August 9, 2023.
The cash dividend distribution proportion of the Company since its listing is in line with the provisions of the Articles of
Association of Gree Electric Appliances, Inc. of Zhuhai and cash dividend distribution policy of the Company is in line with
the provisions of laws and regulations such as the Articles of Association of Gree Electric Appliances, Inc. of Zhuhai and the
requirements of the resolutions of the general meeting of shareholders. The criteria for dividend distribution and the dividend
distribution ratio are clear and unambiguous, the relevant decision-making procedures and mechanisms are complete, and the
independent directors have performed their duties and responsibilities with due diligence and have played their roles.
Minority shareholders have adequate opportunities to express their opinions and demands on profit distribution, and the
legitimate rights and interests of minority shareholders are fully protected.
Special description of cash dividend policy
Whether to comply with the provisions of the Articles of
Yes
Association or the requirements of the general meeting's
Page 72 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
resolutions:
Whether the dividend criteria and ratio are clear and
Yes
unambiguous:
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether the independent directors perform their duties and
Yes
play their due roles:
If the Company does not distribute cash dividends, specific
reasons should be disclosed, as well as the measures to be taken Not applicable
next to enhance investor returns:
Whether the minority shareholders have the opportunity to
fully express their opinions and demands, and whether their Yes
legitimate rights and interests are adequately protected:
Whether the conditions and procedures are compliant and
Yes
transparent if the cash dividend policy is adjusted or changed:
The Company is profitable during the report period and the parent company has positive profit available for distribution to
shareholders but no cash dividend distribution plan has been proposed.
□ Applicable Not Applicable
Profit distribution and conversion of capital reserves into share capital in the report period
Applicable □ Not applicable
Number of dividend shares per ten shares (shares) 0
Dividends per 10 shares (yuan) (tax inclusive) 23.8
Number of shares converted per ten shares (shares) 0
Share capital base for the distribution plan (shares) 5,521,943,646
Cash dividends (yuan) (tax inclusive) 13,142,225,877.48
Amount of cash dividends by other means (e.g. share
2,999,997,275.61
repurchase) (yuan)
Total cash dividends (including other methods) (yuan) 16,142,223,153.09
Distributable profits (yuan) 71,086,199,251.37
Proportion of total cash dividends (including other methods) to
100%
total profit distribution
Current cash dividend
If the Company is in a maturity stage and there are no significant capital expenditure arrangements, the cash dividends in the
current profit distribution shall account for at least 80% of the profit distribution
Detailed description of plan for profit distribution or conversion of capital reserves into share capital
With the total share capital of 5,521,943,646 shares (deducting 109,462,095 shares in the Company's repurchase account from the
total share capital of 5,631,405,741 shares) entitled to profit distribution rights at the time of disclosure of this profit distribution
plan, the Company plans to distribute a cash dividend of RMB23.8 per 10 shares to all shareholders (tax inclusive), without bonus
shares or conversion of capital reserves into share capital, totaling RMB13,142,225,877.48 of cash shares distributed, and the
remaining undistributed profits will be carried forward for distribution in future years. If there is a change in the total share capital
of the Company entitled to profit distribution from the date of disclosure of the distribution plan to the date of implementation of
equity distribution registration, the Company will adjust the total dividend amount accordingly based on the principle of keeping
the distribution ratio per share unchanged.
XI. Implementation of the Company's equity incentive plan, employee stock ownership
plan, or other employee incentive measures
Applicable □ Not applicable
Page 73 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
1. Equity incentive
Not applicable
Equity incentives received by directors and senior executives of the Company
□ Applicable Not Applicable
Appraisal mechanism and incentives of senior executives
Not applicable
2. Implementation of employee stock ownership plan
Applicable □ Not applicable
All valid employee stock ownership plans during the report period
Proportion to
Source of funding for
Scope of Number of Total Number of the total share
Changes implementation of the
Employees Employees Shares Held (Shares) capital of listed
plan
companies
During the report period,
due to the rescission or
termination of labor
relations between some
holders and the Company,
they no longer qualified for
the employee stock
ownership plan, resulting in
changes in the total number
of holders and the shares
Legal remuneration of
held by some holders.
employees and self-
On November 27, 2023, the
Employee financing funds
meeting of the Employee
Stock obtained through other
4,513 46,334,473 Stock Ownership Plan 0.82%
Ownership means as permitted by
Phase I was held, and the
Plan Phase I laws and
Proposal on the termination
administrative
of the Employee Stock
regulations
Ownership Plan Phase I
was reviewed and approved.
The Employee Stock
Ownership Plan Phase I was
terminated prematurely, and
the holder continues to
fulfill their voluntary
commitment not to sell or
set up pledges on their own
during the lockup period.
Legal remuneration of
employees and self-
Employee financing funds
Stock obtained through other
3,170 77,163,880 None 1.37%
Ownership means as permitted by
Plan Phase II laws and
administrative
regulations
Page 74 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Shareholdings of Directors, Supervisors and senior executives in the employee stock ownership plan during the report period
Number of Shares Held Number of Shares Held Proportion to the
Name Title at the Beginning of the at the End of the Period total share capital of
Period (Shares) (Shares) listed companies
Chairperson &
Dong Mingzhu 10,000,000 46,310,000 0.82%
President
Director and
Zhang Wei Secretary of the Party 183,328 300,000 0.01%
Committee
Director, Vice
President, Secretary
Deng Xiaobo 107,600 300,000 0.01%
of the Board of
Directors
Employee
Wang Fawen representative 51,355 30,000 0.00%
supervisor
Zhuang Pei Vice President 420,253 300,000 0.01%
Vice President and
Tan Jianming 488,469 200,000 0.00%
Chief Engineer
Shu Lizhi Vice President 99,719 115,000 0.00%
Fang Xiangjian Vice President 391,890 250,000 0.00%
Finance Chief,
Liao Jianxiong 77,663 230,000 0.00%
President Assistant
Changes in asset management units during the report period
□ Applicable Not Applicable
Changes in equity during the report period due to disposal of shares by holders, etc.
Applicable □ Not applicable
1. During the report period, due to the rescission or termination of labor relations between some holders and the Company, in
accordance with the provisions of the draft of the Employee Stock Ownership Plan Phase I of Gree Electric Appliances, Inc.
of Zhuhai, their equity was sold by the management committee at the discretion of the management committee, and the
original capital contribution corresponding to the disposal amount was returned to the holders. The remaining income (if any)
was enjoyed by the holders of the employee stock ownership plan.
2. On February 3, 2023, the Company transferred 77,163,880 shares to the "Employee Stock Ownership Plan Phase II of
Gree Electric Appliances, Inc. of Zhuhai" special account through a non-trading transfer method in the repurchase special
securities account.
Exercise of shareholders' rights during the report period
During the report period, both Phase I and Phase II employee stock ownership plans of the Company participated in the
voting of the 2022 annual general meeting of shareholders.
Other relevant circumstances and explanations of the employee stock ownership plan during the report period
□ Applicable Not Applicable
Change in members of the Employee Stock Ownership Plan Management Committee
Applicable □ Not applicable
The first shareholder meeting of Employee Stock Ownership Plan Phase II was held on March 8, 2023, in the Company's
conference room through a combination of on-site and online voting. The meeting reviewed and approved the Proposal on
Electing Members of the Management Committee of Phase II Employee Stock Ownership Plan, and elected Mr. Li Gangfei,
Mr. Shao Liguo, and Ms. Zhao Mengmeng as members of the Employee Stock Ownership Plan Management Committee for
a term of three years.
Page 75 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Financial impact of employee stock ownership plan on listed companies and related accounting treatment during the report
period
Applicable □ Not applicable
In accordance with the Accounting Standards for Enterprises No. 11 Share-based Payments, the total expenses recognized
for equity settled share-based payments by the Company in 2023 was RMB1,413,200,011.24.
Termination of employee stock ownership plan during the report period
Applicable □ Not applicable
On November 27, 2023, the meeting of the Employee Stock Ownership Plan Phase I was held, and the Proposal on the
termination of the Employee Stock Ownership Plan Phase I was reviewed and approved. The Employee Stock Ownership
Plan Phase I was terminated prematurely, and the holder continues to fulfill their voluntary commitment not to sell or set up
pledges on their own during the lockup period.
Other statements: None
3. Other employee incentive measures
□ Applicable Not Applicable
XII. Construction and implementation of the internal control system during the report
period
1. Construction and implementation of internal control
The company continued to improve the construction of internal control system and improved the management mechanism of
rules and regulations. The Company regularly reviewed the internal control system and process, and improved and re-
improved the system and process. At the same time, the Company strictly implemented the rules and regulations,
continuously strengthened compliance management and risk management, and built a perfect internal control system and
process system.
The Company continued to pay attention to and strengthen the control of high-risk areas such as financial management, asset
management, capital activities, procurement business, production management, sales business and engineering projects, and
effectively improved the awareness of compliance management and the ability to prevent and control major risks. During the
report period, the Company updated and improved its internal control system promptly in accordance with the provisions of
the Basic Standard for Enterprise Internal Control and its accompanying guidelines, taking into account changes in the
Company's internal and external environment, internal organization and management requirements.
Based on the determination of significant defects in internal control, the Company did not have any significant defects or
material defects in internal control in the financial reporting and non-financial reporting in 2023. Through the operation,
analysis and evaluation of the internal control system, the Company effectively prevented the risks in operation and
management and promoted the achievement of internal control objectives. In the future, the Company will continue to perfect
the internal control system, standardize the implementation of the internal control system, strengthen the supervision and
inspection of internal control, and promote the healthy and sustainable development of the Company.
2. Details of significant defects in internal control identified during the report period
□ Yes No
Page 76 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
XIII. Management and control of the subsidiaries during the report period
Problems
Company Integration Solutions Resolution Subsequent
Integration Plan During
Name Progress Taken Progress Resolution Plan
Integration
None None None None None None None
XIV. Internal control evaluation report or internal control audit report
1. Internal control evaluation report
Date of disclosure of the full internal
April 30, 2024
control evaluation report
Index of disclosure of the full internal
CNINFO (http://www.cninfo.com.cn/new/index)
control evaluation report
The proportion of the total assets of the
units included in the scope of evaluation
96.00%
to the total assets of the Company's
consolidated financial statements
The proportion of operating revenue of
the units included in the scope of
evaluation to the operating revenue of 97.00%
the Company's consolidated financial
statements
Defect identification criteria
Category Financial statements Non-financial statements
For details, please refer to the 2023 For details, please refer to the 2023
Annual Internal Control Self-Evaluation Annual Internal Control Self-Evaluation
Qualitative standard Report of Gree Electric Appliances, Inc. Report of Gree Electric Appliances, Inc.
of Zhuhai disclosed on of Zhuhai disclosed on
www.cninfo.com.cn on April 30, 2024 www.cninfo.com.cn on April 30, 2024
For details, please refer to the 2023 For details, please refer to the 2023
Annual Internal Control Self-Evaluation Annual Internal Control Self-Evaluation
Quantitative standard Report of Gree Electric Appliances, Inc. Report of Gree Electric Appliances, Inc.
of Zhuhai disclosed on of Zhuhai disclosed on
www.cninfo.com.cn on April 30, 2024 www.cninfo.com.cn on April 30, 2024
Number of significant defects in the
0
financial statements
Number of significant defects in the non-
0
financial statements
Number of material defects in the
0
financial statements
Number of material defects in the non-
0
financial statements
2. Internal control audit report
Applicable □ Not applicable
Deliberation opinion section in the internal control audit report
Page 77 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Based on the determination of significant defects in internal control in the Company's financial report, as of the benchmark date of
the internal control evaluation report, there were no significant defects in internal control in the financial report. We believe that
the Company has maintained effective internal control in all significant aspects of the financial report in accordance with the
requirements of the enterprise's internal control standard system and relevant regulations.
Disclosure of internal control audit report Disclosure
Date of disclosure of full internal control audit report April 30, 2024
Index of disclosure of the full internal control audit report CNINFO (http://www.cninfo.com.cn/new/index)
Type of internal control audit report opinions Standard unqualified audit opinion
Is there a significant defect in the non-financial statements? No
Whether the accounting firm issued a non-standard opinion on the internal control audit report
□ Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the Board of
Directors' self-evaluation report
Yes □No
XV. Rectification of self-inspection issues in the special action on governance of listed
companies
Not applicable
Page 78 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section V Environmental and Social Responsibility
I. Major environmental problems
Whether the listed company and its subsidiaries are listed as key pollutant discharge units published by the environmental protection department
Yes □No
Environmental protection-related policies and industry standards
During the production and operation process, the Company and its subsidiaries strictly complied with the requirements of environmental protection laws and regulations such as the
Environmental Protection Law of the People's Republic of China, Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, Law of the People's Republic
of China on the Prevention and Control of Water Pollution, Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution, Law of the People's Republic of
China on Prevention and Control of Environmental Noise Pollution, Law of the People's Republic of China on Prevention and Control of Soil Pollution, and Environmental Impact Assessment
Law of the People's Republic of China; strictly followed the Discharge Limits of Water Pollutants (DB 44/26-2001), Emission Standard of Volatile Organic Compounds for Furniture
Manufacturing Operations (DB44/814-2010), Takeover Criteria of Hefei West Group Wastewater Treatment Plant, Integrated Wastewater Discharge Standards (GB8978-1996), Discharge
Standard Water Pollutants for Electroplating (DB 44/1597-2015), Emission Standard of Volatile Organic Compounds for Printing Industry (DB44/815-2010), Emission Limits of Air
Pollutants (DB44/27-2001), Emission Standard of Air Pollutants for Industrial Kiln and Furnace (GB 9078-1996), Emission Standard of Volatile Organic Compounds for Surface Coating of
Automobile Manufacturing Industry (DB44/816-2010), Emission Standard of Pollutants for Synthetic Resin Industry (GB 31572-2015), Emission Standards for Odor Pollutants (GB 14554-
1993), and other national, local, and related industry environmental protection emission standards.
Administrative license for environmental protection
Company Name Application Date for the Pollution Discharge Permit Valid Period
1 Gree Electric Appliances, Inc. of Zhuhai December 22, 2022 December 21, 2027
2 Gree (Hefei) Electric Appliances Co., Ltd. August 20, 2023 August 19, 2028
3 Zhuhai Landa Compressor Co., Ltd. October 28, 2022 October 27, 2027
Page 79 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
4 Zhuhai Gree Xinyuan Electronics Co., Ltd. December 13, 2022 December 12, 2027
5 Zhuhai Kaibang Motor Manufacturing Co., Ltd. June 19, 2023 June 18, 2028
6 Gree (Zhong Shan) Small Home Appliances Co., Ltd. June 4, 2020 June 3, 2025
Industry discharge standards and specific situations of pollutant discharge involved in production and business activities
Type of Major Name of Major Number Exces
Name of Discharge Total
Pollutant and Pollutant and Discharge of Distribution of Pollutant Discharge Standard Total sive
Company or Concentration/In Approved
Particular Particular Method Discharge Discharge Ports Implemented Discharge Disch
Subsidiary tensity Discharge
Pollutant Pollutant Ports arge
Phase III sewage
48.75 mg/m
station
Phase IV sewage
Waste water COD 3 16 mg/m 5.184 t/year 23.4 t/year
station
Phase VI sewage
19.75 mg/m
station
Phase III sewage
1.08 mg/m
station
Level III limit in Section II of the
Ammonia Intermittent Phase IV sewage
Waste water 3 0.12 mg/m Discharge Limits of Water 0.082 t/year 3.18 t/year
nitrogen emission station
Pollutants (DB44/26-2001)
Phase VI sewage
0.27 mg/m
station
Gree Electric Phase III sewage
5.34 mg/m
Appliances, station
Phase IV sewage None
Inc. of Waste water Total nitrogen 3 1.82 mg/m 0.517 t/year 2.4 t/year
Zhuhai station
Phase VI sewage
1.46 mg/m
station
Waste gas vent 02 5.8 mg/m
Waste gas vent 03 2.95 mg/m
Waste gas vent 04 14.925 mg/m Discharge limit for section II of
Waste gas vent 05 3.28 mg/m Emission Standard of Volatile
Organized 16.8734 341.02
Waste gas Total VOCs 16 Organic Compounds for Furniture
discharge Waste gas vent 06 4.04 mg/m t/year t/year
Manufacturing Operations in
Waste gas vent 07 2.395 mg/m Guangzhou (DB44/814-2010)
Waste gas vent 08 22.05 mg/m
Waste gas vent 09 5.33 mg/m
Page 80 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Waste gas vent 12 9.55 mg/m
Waste gas vent 15 28.5 mg/m
/ (Stop
Waste gas vent 16
production)
Waste gas vent 17 4.93 mg/m
Waste gas vent 18 14.89 mg/m
Waste gas vent 20 4.15 mg/m
Waste gas vent 21 12.8 mg/m
Waste gas vent 22 3.23 mg/m
Domestic sewage
13 mg/L
station 16.9246
Waste water COD 2 0.5153 t/year
Commercial sewage t/year
27 mg/L
station
Takeover criteria of Hefei West
Gree (Hefei) Domestic sewage
0.05 mg/L Group Wastewater Treatment Plant
Electric Intermittent station 1.69546
Waste water NH3-N 2 and Level III criteria of Integrated 0.0173 t/year None
Appliances emission Commercial sewage t/year
9.46 mg/L Wastewater Discharge Standard
Co., Ltd. station
(GB8978-1996)
Domestic sewage
3.85 mg/L
station 2.4178
Waste water TN 2 0.1056 t/year
Commercial sewage t/year
10.11 mg/L
station
Continuous
Waste water Total zinc 1 Area C sewage station 0.176 mg/L Discharge Standard Water 0.0376 t/year 0.29 t/year
emission
Pollutants for Electroplating (DB
Workshop wastewater
44/1597-2015) Table 2 Pearl River
Intermittent pre-treatment
Waste water Total nickel 1 0.018 mg/L Delta Emission Limits 0.0003 t/year 0.015 t/year
emission discharge outlet (Area
Corresponding to 200%
C)
Electrophoresis drying Emission Standard for Volatile 2023
3.66 mg/m
waste gas vent 1 Organic Compounds for Printing Pollutant
Zhuhai
Electrophoresis drying Industry (DB44/815-2010) Discharge
Landa 6.16 mg/m
waste gas vent 2 Emission Standard for Volatile Permit None
Compressor
Painting waste gas Organic Compounds in Furniture Approval:
Co., Ltd. 5.55 mg/m
vent 1 Manufacturing Industry A total of
Organized
Waste gas Total VOCs 6 Painting waste gas (DB44/814-2010) 1.207 t/year 2.49 t/year
discharge 3.26 mg/m
vent 2 Emission Limits for Air Pollutants of VOCs
Painting waste gas (DB44/27-2001) from
1.24 mg/m Emission Standard of Volatile electrophor
vent 3
Organic Compounds for Printing esis drying
Painting room waste Industry (GB 9078-1996)Emission waste gas,
19.76 mg/m
gas vent Standard of Volatile Organic painting
Page 81 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Compounds for Printing Industry waste gas,
(GB 9078-1996) and tooling
Emission Standard of Volatile coating
Organic Compounds for Surface painting
Coating of Automobile room waste
Manufacturing Industry gas
Screen printing waste / (Stop (DB44/816-2010)
gas vent production) Emission Standard of Pollutants for
Injection molding Electroplating (GB 21900-2008)
1.79 mg/m
waste gas vent
Hydrocarbon cleaning The
1.8 mg/m
discharge outlet pollutant
Cleaning drying waste discharge
7 1.44 mg/m 0.373 t/year
gas vent 1 permit in
Cleaning drying waste 2023 is not
1.94 mg/m
gas vent 2 approved
Cleaning drying waste
1.56 mg/m
gas vent 3
Dip coating waste gas
2.67 mg/m
vent
Industrial sewage
Intermittent
Waste water pH value 1 discharge outlet WS- 7.65 mg/L /
emission
39214A
Industrial sewage
Intermittent
Waste water Chromaticity 1 discharge outlet WS- 5 /
emission
39214A
Industrial sewage
Suspended Intermittent
Waste water 1 discharge outlet WS- 4 mg/L 0.1032 t/year
matter emission
39214A Level I criteria of maximum
The
Zhuhai Industrial sewage allowable discharge concentration
Chemical Intermittent pollutant
Kaibang Waste water 1 discharge outlet WS- 9 mg/L of class II pollutants (section II) in 0.0212 t/year
oxygen demand emission discharge
Motor 39214A Discharge Limits of Water None
permit in
Manufacturi Five-day Industrial sewage Pollutants (DB 44/26-2001) in
Intermittent 2023 is not
ng Co., Ltd. Waste water biochemical 1 discharge outlet WS- 0.6 mg/L Guangdong 0.0016 t/year
emission approved
oxygen demand 39214A
Industrial sewage
Intermittent
Waste water Phosphate 1 discharge outlet WS- 0.175 mg/L 0.0005 t/year
emission
39214A
Industrial sewage
Ammonia Intermittent
Waste water 1 discharge outlet WS- 0.058 mg/L 0.0002 t/year
nitrogen emission
39214A
Intermittent Industrial sewage
Waste water Total nitrogen 1 2.485 mg/L 0.0065 t/year
emission discharge outlet WS-
Page 82 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
39214A
Industrial sewage
Intermittent
Waste water Petroleum 1 discharge outlet WS- 0.06 mg/L 0.0002 t/year
emission
39214A
Die-casting waste gas
＜20 mg/m
vent FQ-39214A
Particulate Organized
Waste gas 2 Melting aluminum /
matter discharge
waste gas vent FQ- ＜20 mg/m
39214A1
Die-casting waste gas Emission limits of atmospheric
ND
vent FQ-39214A pollutants from process waste gas
Organized
Waste gas Sulfur dioxide 2 Melting aluminum (Section II) in Emission Limits of /
discharge
waste gas vent FQ- ND Air Pollutants (DB 44/27-2001) in
39214A1 Guangdong
Die-casting waste gas
11.5 mg/m
vent FQ-39214A
Organized
Waste gas Nitrogen oxide 2 Melting aluminum 0.1372 t/year
discharge
waste gas vent FQ- ND
39214A1
Dip coating waste gas
1 0.005 mg/m
vent FQ-39214B
Organized Industrial products 0.00009
Waste gas Benzene
discharge center dip coating t/year
1 ND
waste gas vent
FQ-39214G
Dip coating waste gas Emission limits of VOCs in
1 0.165 mg/m
vent FQ-39214B Emission Standard of Volatile
Toluene + Organized Industrial products Organic Compounds for Surface
Waste gas 0.0401 t/year
Xylene discharge center dip coating Coating of Automobile
1 11.5 mg/m
waste gas vent Manufacturing Industry (DB
FQ-39214G 44/816-2010) in Guangdong
Dip coating waste gas
1 ＜20 mg/m
vent FQ-39214B
Particulate Organized Industrial products
Waste gas /
matter discharge center dip coating
1 ＜20 mg/m
waste gas vent
FQ-39214G
Dip coating waste gas Emission limits of VOCs in
1 ND
vent FQ-39214B Emission Standard of Volatile
Organized
Waste gas Nitrogen oxide Industrial products Organic Compounds for Surface /
discharge
1 center dip coating ND Coating of Automobile
waste gas vent Manufacturing Industry (DB
Page 83 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
FQ-39214G 44/816-2010) in Guangdong
Dip coating waste gas
1 ND
vent FQ-39214B
Organized Industrial products
Waste gas Sulfur dioxide /
discharge center dip coating
1 ND
waste gas vent
FQ-39214G
Dip coating waste gas
1 1.145
vent FQ-39214B
Organized Industrial products
Waste gas NMHC 0.0100 t/year
discharge center dip coating
1 1.84
waste gas vent
FQ-39214G
Dip coating waste gas
1 <1 (grade)
vent FQ-39214B
Ringelman Organized Industrial products
Waste gas <1 (grade)
emittance discharge center dip coating
1 <1 (grade)
waste gas vent
FQ-39214G
Dip coating waste gas
1 26.5 mg/m
vent FQ-39214B
Organized Industrial products
Waste gas Total VOCs 0.0695 t/year
discharge center dip coating
1 8.4 mg/m
waste gas vent
FQ-39214G
Organized waste gas
FQ-11860
ND
after-treatment
monitoring port Emission Standard of Pollutants for
Organized waste gas Synthetic Resin Industry (GB
FQ-11859 31572-2015) Table 9 Enterprise
ND The
Gree (Zhong after-treatment boundary air pollutant
pollutant
Shan) Small monitoring port concentration limits and local
Organized discharge
Home Waste gas Benzene 4 Organized waste gas standards of Guangdong Province 0.5183 t/year None
discharge permit in
Appliances FQ-008199 after- the one with stricter concentration
2023 is not
Co., Ltd. treatment monitoring ND limits for unorganized emissions
approved
port of waste gas monitoring in section II of the
treatment equipment Emission Limits of Air Pollutants
Organized waste gas (DB 44/27-2001);
FQ-008198
ND
after-treatment
monitoring port
Page 84 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Organized waste gas
FQ-11860
9.97 mg/m
after-treatment
monitoring port
Organized waste gas
FQ-11859
0.03 mg/m
after-treatment
monitoring port
Organized
Waste gas Toluene 4 Organized waste gas 0.3307 t/year
discharge
FQ-008199 after-
treatment monitoring 0.08 mg/m
port of waste gas
treatment equipment
Organized waste gas
FQ-008198
0.01 mg/m
after-treatment
monitoring port
Organized waste gas
FQ-11860
1.37 mg/m
after-treatment
monitoring port
Organized waste gas
FQ-11859
0.03 mg/m
after-treatment
monitoring port
Organized
Waste gas Xylene 4 Organized waste gas 0.2688 t/year
discharge
FQ-008199 after-
treatment monitoring 0.12 mg/m
port of waste gas
treatment equipment
Organized waste gas
FQ-008198
ND
after-treatment
monitoring port
Organized waste gas
FQ-11860
22.8 mg/m
after-treatment
monitoring port
Organized
Waste gas VOCs 3 Organized waste gas 0.7165 t/year
discharge
FQ-008199 after-
treatment monitoring 0.70 mg/m
port of waste gas
treatment equipment
Page 85 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Organized waste gas
FQ-008198
0.16 mg/m
after-treatment
monitoring port
Organized waste gas
Organized FQ-11859
Waste gas NMHC 1 0.97 mg/m 0.5441 t/year
discharge after-treatment
monitoring port
Monitoring port before
Organized oil fume and waste gas
Waste gas Oil fume 1 0.6 mg/m 0.0001 t/year
discharge treatment
(FQ-11865)
North of 2nd floor
<20 mg/m
roof: DA001
Table 2 Level II Criteria in Section
Particulate Organized North of 2nd floor
Waste gas 3 <20 mg/m II of Emission Limits of Air /
matter discharge roof: DA004
Pollutants (DB 44/27-2001)
North of 2nd floor
<20 mg/m
roof: DA005
Table 2 (Section II of emission
limits) of the Emission Standards
for Volatile Organic Compounds in
Organized South of Building 2
Waste gas NMHC 1 2.14 mg/m the Printing Industry (DB44/815- 0.0925 t/year
discharge roof: DA002
2010): lithography (excluding
lithography on metal, ceramics, and
glass) and flexographic printing
The
Zhuhai Gree South of Building 2 pollutant
0.00265 mg/m Table 2 Level II Criteria in Section
Xinyuan Tin and its Organized roof: DA002 discharge
Waste gas 2 II of Emission Limits of Air 0.0002 t/year None
Electronics compounds discharge South of Building 2 permit in
0.00319 mg/m Pollutants (DB 44/27-2001)
Co., Ltd. roof: DA003 2023 is not
Table 2 Level II Criteria in Section approved
Lead and its Organized South of Building 2 0.00002
Waste gas 1 0.002 mg/m II of Emission Limits of Air
compounds discharge roof: DA003 t/year
Pollutants (DB 44/27-2001)
Emission Standards for Odor
Organized Northwest of Building Pollutants (GB 14554-1993) Table
Waste gas Ammonia 1 3.84 mg/m 0.1350 t/year
discharge 1 roof: DA006 2 Emission Standard Value of Odor
Pollutants
Table 2 Level II Criteria in Section
Sulfuric acid Organized Northwest of Building
Waste gas 1 0.2 mg/m II of Emission Limits of Air 0.0073 t/year
mist discharge 2 roof: DA007
Pollutants (DB 44/27-2001)
Table 2 Level II Criteria in Section
Hydrogen Organized Northwest of Building
Waste gas 1 72.2 mg/m II of Emission Limits of Air 0.2612 t/year
chloride discharge 2 roof: DA007
Pollutants (DB 44/27-2001)
Page 86 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Table 2 Level II Criteria in Section
Organized Northwest of Building
Waste gas Nitrogen oxide 1 3 mg/m II of Emission Limits of Air 0.0461 t/year
discharge 2 roof: DA007
Pollutants (DB 44/27-2001)
Total volatile Table 2 (Section II of emission
Organized North of Building 1
Waste gas organic 1 2.40 mg/m limits) of the Emission Standards 0.1057 t/year
discharge roof: DA008
compounds for Volatile Organic Compounds in
Toluene + Organized North of Building 1 the Printing Industry (DB44/815-
Waste gas 1 0.101 mg/m 0.0028 t/year
Xylene discharge roof: DA008 2010): lithography (excluding
Organized North of Building 1 lithography on metal, ceramics, and
Waste gas Benzene 1 0.004 mg/m glass) and flexographic printing 0.0042 t/year
discharge roof: DA008
Total nitrogen
Waste water 0.926 mg/L 0.0218 t/year
(N)
Total
Waste water 0.33 mg/L 0.0023 t/year
phosphorus (P)
Ammonia
Waste water nitrogen (NH3- 0.454 mg/L 0.0070 t/year
N) Longshan No. 3 Road Level II Limit in Section II of
Intermittent
Waste water pH value 1 industrial wastewater 7.1 Discharge Limits of Water /
emission
WS-124635: DW001 Pollutants (DB44/26-2001)
Waste water Total copper 0.006 mg/L 0.0001 t/year
Suspended
Waste water 9 mg/L 0.2469 t/year
matter
Waste water Petroleum 0.17 mg/L 0.0073 t/year
Chemical
Waste water 80 mg/L 0.4820 t/year
oxygen demand
Treatment of pollutants
1. Wastewater pollution prevention and control facilities
The Company and its subsidiaries are equipped with corresponding wastewater treatment facilities and full-time environmental management, operation and monitoring personnel in accordance
with the environmental protection requirements of the construction project. So far, the systems are in normal operation and have been discharged in a stable manner without over-standard
discharge.
2. Waste gas pollution prevention and control facilities
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The waste gas pollution prevention and control facilities of the Company's subsidiaries operated normally, and the indicators of waste gas monitoring were in compliance with national and local
emission standards, without over-standard discharge.
3. Solid waste treatment and disposal facilities
The Company implements the classification and collection system of hazardous waste and entrusts the disposal to the unit with the corresponding disposal qualification. General industrial solid
waste are handed over to resource recycling manufacturers for recycling and disposal after being classified in the factory, and there is no illegal disposal.
Environment self-monitoring scheme
The Company and its subsidiaries formulate self-monitoring plans in accordance with the requirements of pollutant discharge permits and environmental impact assessment, and entrust third-
party qualified testing units to carry out environmental monitoring; online automatic monitoring is adopted for key discharge outlets, and data is uploaded online with local ecological and
environmental authorities for real-time management.
Contingency plan for environmental emergencies
In order to implement the requirements of the national Measures on Emergency Management of Environmental Emergencies and related laws and regulations, and to ensure environmental
emergencies to be dealt with in a timely, orderly, efficient and appropriate manner, to protect the personal safety of the employees and to reduce property losses, each subsidiary of the Company
formulates an emergency plan for environmental emergencies and reported it to the environmental protection department for filing.
Investment in environmental governance and protection and payment of environmental protection taxes
Unit: RMB10,000
Company Name Investment in Environmental Protection and Governance Environmental Protection Taxes Paid
1 Gree Electric Appliances, Inc. of Zhuhai 473 9.06
2 Gree (Hefei) Electric Appliances Co., Ltd. 250 0.43
3 Zhuhai Landa Compressor Co., Ltd. 350 1.89
4 Zhuhai Gree Xinyuan Electronic Co., Ltd. 70 0.15
5 Zhuhai Kaibang Motor Manufacturing Co., Ltd. 300 1.02
6 Gree (Zhong Shan) Small Home Appliances Co., Ltd. 72 0.42
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Measures and effects are taken to reduce carbon emissions during the report period
Applicable □ Not applicable
The Company attaches great importance to energy conservation and emission reduction. With the vision of "making the sky bluer and the earth greener", it has always practiced the development
concept of "lucid waters and lush mountains are invaluable assets", actively responded to the national "dual carbon (carbon peaking and carbon neutrality)" strategy, and as a domestic
"photovoltaic (storage)" and "zero-carbon source" air conditioner technology leader, committed to promoting clean and low-carbon energy consumption in production and operation and creating
a healthy and green quality life for consumers and society.
In recent years, the Company has continuously carried out the inventory of greenhouse gas emissions at the company level, and has continuously implemented carbon reduction measures,
including vigorously developing photovoltaic power generation, continuously investing in energy-saving technological transformation, and continuously deepening resource regeneration and
recycling, effectively reducing the Company's total carbon emissions. In 2023, the Company carried out 335 energy-saving technical transformation projects, saving 75.806 million kWh of
electricity, 836,000 m3 of natural gas, and reducing carbon dioxide emissions by 45,042 t.
In 2023, the Company used 572 million kWh of nuclear power and 28.06 million kWh of photovoltaic power, and reduced carbon dioxide emissions by 16,003 t, an increase of 9.8% over 2022.
Combined with the lithium titanate energy storage cabinet independently developed by Gree for peak shaving and valley filling, 160 MWh of energy storage was invested, and the cumulative
peak shaving was 72 million kWh of electricity.
Administrative penalties for environmental problems during the report period
Impact on the Production
The Company's Corrective
Name of Company or Subsidiary Reason for Penalty Violation Penalty Results and Operation of Listed
Measures
Companies
/ / / / / /
Other environmental information that should be disclosed
None.
Other environmental-related information
None.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
II. Social responsibility
In 2023, Gree Electric Appliances actively fulfilled its responsibilities in environmental protection, social responsibility, and corporate governance, especially in intelligent manufacturing, green
innovation, and safeguarding the rights and interests of stakeholders, and fulfilled the mission of promoting the sustainable development of the industry. (For details, please refer to the 2023
Environmental, Social, and Corporate Governance (ESG) Report published by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on April 30, 2024)
III. Consolidation and expansion of achievements in poverty alleviation and rural revitalization
None
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section VI Important Matters
I. Fulfillment of commitments
1. Commitments fulfilled by the actual controller(s), shareholders, related parties, acquirers, and the Company within the report period and commitments not yet fulfilled by the end
of the report period
Applicable □ Not applicable
Reason for Commitment Commitment Party Commitment Type Commitment Content Committed Time Commitment Period Fulfillment
1. The Transferee
commits to lock up all
Gree shares acquired as
a result of the transfer
upon completion of the
registration of the
transfer and not to
transfer them for 36
months from the date of
completion of the
registration of the
Commitments in the Zhuhai Mingjun
Share sale restriction transfer; if there are
acquisition report or Investment Partnership December 2, 2019 January 23, 2023 Fulfilled
commitment relevant laws and
equity change report (Limited Partnership)
regulations requiring the
lock-up period of the
transferred shares to
exceed the above lock-
up period committed by
the Transferee, the
Transferee agrees to
extend the lock-up
period of the shares
accordingly to comply
with the prescribed
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period.
2. Upon completion of
this share transfer, the
Transferee shall comply
with the above share
lock-up undertaking for
the shares acquired by
the Transferee as a result
of the share bonus and
capital increase of the
listed company.
Letter of Commitment on
Maintaining the
Independence of Listed
Companies: To ensure
the independent
operation of the listed
company after this
equity transfer, Zhuhai
Mingjun, Zhuhai
Zhuhai Mingjun Xianying, and Zhuhai
Investment Partnership Yuxiu make the
(Limited Partnership); following commitments:
Commitments in the
Zhuhai Xianying Equity Maintain independence (I) To ensure asset
acquisition report or December 2, 2019 Long-term effective In progress
Investment Partnership of listed companies independence and
equity change report
(Limited Partnership); completeness of the
Zhuhai Yuxiu listed company: 1. To
Investment Co., Ltd. ensure that Gree Electric
Appliances will be
equipped with the
relevant production
system, auxiliary
production system as
well as supporting
facilities related to its
business operations,
have the right to own or
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
use the land, workshop
and machines and
facilities relating to its
business operations as
well as the ownership or
use right to its
trademarks, patent
technologies and know-
how, and have an
independent purchase
system of raw materials
and sales system of
products. 2. To ensure
that Gree Electric
Appliances has
independent and
complete assets, and all
of its assets are under
the control of Gree
Electric Appliances and
are independently
owned and operated by
Gree Electric
Appliances. 3. To ensure
that Zhuhai Mingjun and
other enterprises
controlled by Zhuhai
Mingjun will not
illegally occupy the
assets of Gree Electric
Appliances in any way;
and will not use the
assets of Gree Electric
Appliances, or provide
guarantee for the debts
of Zhuhai Mingjun and
other enterprises under
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
its control with Gree
Electric Appliances'
assets.
(II) To ensure the
independence of the
personnel of the listed
company: 1. To ensure
that the labor, personnel
and remuneration
management of Gree
Electric Appliances is
completely independent
from its affiliated
enterprises. 2. The
recommendation of
directors, supervisors
and senior executives by
the enterprise to Gree
Electric Appliances is
made through legal
procedures and does not
surpass the decisions on
personnel appointment
and removal made by
the Board of Directors
and the General Meeting
of Shareholders of Gree
Electric Appliances.
(III) To ensure the
financial independence
of the listed company: 1.
To ensure that Gree
Electric Appliances will
establish an independent
financial department and
an independent financial
accounting system, and
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
will have a standardized
and independent
financial accounting
system. 2. To ensure that
Gree Electric
Appliances will open
bank accounts
independently and will
not share bank accounts
with its affiliated
enterprises. 3. To ensure
that the financial
personnel of Gree
Electric Appliances will
not work part-time in its
affiliated companies. 4.
To ensure that Gree
Electric Appliances pays
taxes independently in
accordance with the law.
5. To ensure that Gree
Electric Appliances can
make independent
financial decisions and
that the intended
Transferee will not
illegally interfere with
Gree Electric
Appliances's fund
utilization and
scheduling.
(IV) To ensure the
independence of units of
the listed company: 1.
To ensure that Gree
Electric Appliances will
establish a sound
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
corporate governance
structure and will have
an independent and
complete organizational
structure. 2. To ensure
that the internal
management bodies of
Gree Electric
Appliances will exercise
their powers and
functions independently
in accordance with laws,
regulations and the
Articles of Association
of the Company.
(V) To ensure the
business independence
of the listed company: 1.
To ensure that Gree
Electric Appliances will
have the assets,
personnel, qualification
and ability to carry out
business activities
independently and will
have the ability to
operate independently
and continuously in the
market. 2. To ensure not
to interfere with the
business activities of
Gree Electric
Appliances except
through the exercise of
shareholders' rights. 3.
To ensure the enterprise
and other enterprises
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
under its control shall
avoid horizontal
competition with Gree
Electric Appliances. 4.
To ensure that, when the
enterprise and other
enterprises under its
control conduct
necessary and
unavoidable affiliate
transactions with Gree
Electric Appliances, the
enterprise will conduct
fair operation in
accordance with the
marketization principle
and at fair prices, and
perform transaction
procedures and
information disclosure
obligations in
accordance with relevant
laws and regulations and
regulatory documents.
If any one of the above
commitments is
violated, the enterprise
will be willing to bear
all the liabilities arising
therefrom, and fully
compensate or
reimburse all direct or
indirect losses caused to
Gree Electric
Appliances.
Commitments in the Zhuhai Mingjun Commitment on Letter of Commitment on
December 2, 2019 Long-term effective In progress
acquisition report or Investment Partnership avoiding horizontal Avoiding Horizontal
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
equity change report (Limited Partnership); competition Competition: To avoid
Zhuhai Xianying Equity horizontal competition
Investment Partnership with listed company,
(Limited Partnership); Zhuhai Mingjun, Zhuhai
Zhuhai Yuxiu Xianying, and Zhuhai
Investment Co., Ltd. Yuxiu make the
following commitments:
1. The enterprise and
other enterprises under
its control, the
controlling shareholder
and actual controller of
the enterprise will not
engage in the same or
similar business with
Gree Electric
Appliances and its
subsidiaries directly or
indirectly in the future,
so as to avoid possible
direct or indirect
business competition
with Gree Electric
Appliances and its
subsidiaries.
2. If other enterprises
under the control of the
enterprise further
expand their business
scope, the other
enterprises under the
control of the enterprise
will take all possible
measures to avoid
horizontal competition
with Gree Electric
Appliances and its
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
subsidiaries on the
principle of giving
priority to safeguarding
the rights and interests
of Gree Electric
Appliances.
3. If Gree Electric
Appliances and its
subsidiaries or related
regulatory authorities
determine that the
enterprise and other
enterprises under its
control are engaging in
or will engage in any
business which
constitutes horizontal
competition with Gree
Electric Appliances and
its subsidiaries, the
enterprise will give up
or urge the enterprise's
direct or indirect holding
company to give up any
business or business
opportunities that may
result in horizontal
competition, or urge
such business or
business opportunities to
be provided with a
priority to Gree Electric
Appliances or its
wholly-owned and
holding subsidiaries on a
fair and reasonable basis
or to be transferred to
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
other unrelated third
parties.
4. If any one of the
above commitments is
violated, the enterprise
will be willing to bear
all the liabilities arising
therefrom, and fully
compensate or
reimburse all direct or
indirect losses caused to
Gree Electric
Appliances.
Letter of Commitment on
Standardizing the
Affiliated Transactions:
In order to safeguard the
interests of public
shareholders and
maintain the sustainable
and healthy
Zhuhai Mingjun development of the
Investment Partnership listed company, Zhuhai
(Limited Partnership); Mingjun, Zhuhai
Commitments in the Commitment on
Zhuhai Xianying Equity Xianying, and Zhuhai
acquisition report or standardizing the December 2, 2019 Long-term effective In progress
Investment Partnership Yuxiu make the
equity change report affiliated transactions
(Limited Partnership); following commitments:
Zhuhai Yuxiu 1. To ensure that the
Investment Co., Ltd. future affiliated
transactions between the
enterprise and other
enterprises under its
control and Gree
Electric Appliances will
be fair and conducted in
accordance with the
normal code of business
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
conduct; and the
enterprise commits to
further regulate
affiliated transactions
with Gree Electric
Appliances and its
subsidiaries.
2. The enterprise will
perform its obligations
as a shareholder of Gree
Electric Appliances in
good faith and goodwill,
and for affiliated
transactions that cannot
be avoided or exist on
reasonable grounds, it
will sign a standard
affiliated transaction
agreement with Gree
Electric Appliances in
accordance with the law,
and fulfill the approval
procedures in
accordance with relevant
laws, regulations, rules,
other regulatory
documents and the
Articles of Association;
the price of affiliated
transactions will be
determined in
accordance with fair and
reasonable market
prices, and the price of
affiliate transactions will
be fair; it will perform
the information
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
disclosure obligations of
affiliated transactions in
accordance with relevant
laws, regulations and the
Articles of Association;
it will not use affiliated
transactions to illegally
transfer the funds and
profits of Gree Electric
Appliances or damage
the interests of Gree
Electric Appliances and
affiliated shareholders.
3. To ensure that the
enterprise and other
enterprises under its
control will, in
accordance with the
provisions of laws,
regulations and the
Articles of Association,
when deliberating
affiliated transactions
involving the enterprise
and other enterprises
under its control,
effectively abide by the
avoidance procedure
during the voting on
affiliated transactions at
the meeting of the board
of shareholders or the
general meeting of
shareholders of Gree
Electric Appliances.
Commitments in the Maintain independence Letter of Commitment on
Dong Mingzhu December 2, 2019 Long-term effective In progress
acquisition report or of listed companies Maintaining the
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
equity change report Independence of the
Listed Company: To
ensure the independent
operation of the listed
company after this
equity transfer, I make
the following
commitments:
(I) To ensure asset
independence and
completeness of the
listed company: 1. To
ensure that Gree Electric
Appliances will be
equipped with the
relevant production
system, auxiliary
production system as
well as supporting
facilities related to its
business operations,
have the right to own or
use the land, workshop
and machines and
facilities relating to its
business operations as
well as the ownership or
use right to its
trademarks, patent
technologies and know-
how, and have an
independent purchase
system of raw materials
and sales system of
products. 2. To ensure
that Gree Electric
Appliances has
Page 103 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
independent and
complete assets, and all
of its assets are under
the control of Gree
Electric Appliances and
are independently
owned and operated by
Gree Electric
Appliances. 3. To ensure
that Zhuhai Mingjun and
other enterprises
controlled by Zhuhai
Mingjun will not
illegally occupy the
assets of Gree Electric
Appliances in any way;
and will not use the
assets of Gree Electric
Appliances, or provide
guarantee for the debts
of Zhuhai Mingjun and
other enterprises under
its control with Gree
Electric Appliances'
assets.
(II) To ensure the
independence of the
personnel of the listed
company: 1. To ensure
that the labor, personnel
and remuneration
management of Gree
Electric Appliances is
completely independent
from its affiliated
enterprises. 2. The
recommendation of
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
senior executives by me
to Gree Electric
Appliances is conducted
in accordance with legal
procedures.
(III) To ensure the
financial independence
of the listed company: 1.
To ensure that Gree
Electric Appliances will
establish an independent
financial department and
an independent financial
accounting system, and
will have a standardized
and independent
financial accounting
system. 2. To ensure that
Gree Electric
Appliances will open
bank accounts
independently and will
not share bank accounts
with its affiliated
enterprises. 3. To ensure
that the financial
personnel of Gree
Electric Appliances will
not work part-time in its
affiliated companies. 4.
To ensure that Gree
Electric Appliances pays
taxes independently in
accordance with the law.
5. To ensure that Gree
Electric Appliances can
make independent
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
financial decisions and
that the intended
Transferee will not
illegally interfere with
Gree Electric
Appliances's fund
utilization and
scheduling.
(IV) To ensure the
independence of units of
the listed company: 1.
To ensure that Gree
Electric Appliances will
establish a sound
corporate governance
structure and will have
an independent and
complete organizational
structure. 2. To ensure
that the internal
management bodies of
Gree Electric
Appliances will exercise
their powers and
functions independently
in accordance with laws,
regulations and the
Articles of Association
of the Company.
(V) To ensure the
business independence
of the listed company: 1.
To ensure that Gree
Electric Appliances will
have the assets,
personnel, qualification
and ability to carry out
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
business activities
independently and will
have the ability to
operate independently
and continuously in the
market. 2. To ensure
that, except through the
exercise of shareholders'
rights and the
performance of
functions and duties of
Chairman/senior
executive of the listed
company, I will not
interfere in the business
activities of Gree
Electric Appliances. 3.
To ensure that I and
other enterprises under
my control will avoid
substantial horizontal
competition with Gree
Electric Appliances. 4.
To ensure that, when
conducting necessary
and unavoidable
affiliated transactions
with Gree Electric
Appliances, I and other
enterprises under my
control will conduct fair
operation in accordance
with the marketization
principle and at fair
prices, and perform
transaction procedures
and information
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
disclosure obligations in
accordance with relevant
laws and regulations and
regulatory documents.
If any one of the above
commitments is
violated, I will be
willing to bear all the
liabilities arising
therefrom, and fully
compensate or
reimburse all direct or
indirect losses caused to
Gree Electric
Appliances.
Letter of Commitment on
Avoiding Horizontal
Competition: I make the
following commitments:
1. I and other enterprises
under my control will
not engage in the same
or similar business with
Gree Electric
Appliances and its
Commitments in the
Avoiding horizontal subsidiaries in a direct
acquisition report or Dong Mingzhu December 2, 2019 Long-term effective In progress
competition or indirect manner in the
equity change report
future, so as to avoid
possible direct or
indirect business
competition with Gree
Electric Appliances and
its subsidiaries. 2. If
other enterprises under
my control further
expand their business
scope, the other
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
enterprises under my
control will take all
possible measures to
avoid horizontal
competition with Gree
Electric Appliances and
its subsidiaries on the
principle of giving
priority to safeguarding
the rights and interests
of Gree Electric
Appliances. 3. If Gree
Electric Appliances and
its subsidiaries or related
regulatory authorities
determine that I and
other enterprises under
by control are engaging
in or will engage in any
business which
constitutes horizontal
competition with Gree
Electric Appliances and
its subsidiaries, I will
give up or urge my
direct or indirect holding
company to give up any
business or business
opportunities that may
result in horizontal
competition, or urge
such business or
business opportunities to
be provided with a
priority to Gree Electric
Appliances or its
wholly-owned and
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
holding subsidiaries on a
fair and reasonable basis
or to be transferred to
other unrelated third
parties. 4. If any one of
the above commitments
is violated, I will be
willing to bear all the
liabilities arising
therefrom, and fully
compensate or
reimburse all direct or
indirect losses caused to
Gree Electric
Appliances.
Letter of Commitment on
Standardizing the
Affiliated Transactions:
I make the following
commitments: 1. To
ensure that the future
affiliated transactions
between me and other
enterprises under my
control and Gree
Commitments in the
Standardizing affiliated Electric Appliances will
acquisition report or Dong Mingzhu December 2, 2019 Long-term effective In progress
transactions be fair and conducted in
equity change report
accordance with the
normal code of business
conduct; and that I
commit to further
standardize affiliated
transactions with Gree
Electric Appliances and
its subsidiaries. 2. I will
perform my obligations
as a shareholder of Gree
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Electric Appliances in
good faith and in
goodwill, and for
affiliated transactions
that cannot be avoided
or exist on reasonable
grounds, I will sign a
standard affiliated
transaction agreement
with Gree Electric
Appliances in
accordance with the law,
and fulfill the approval
procedures in
accordance with relevant
laws, regulations, rules,
other regulatory
documents and the
Articles of Association;
the price of affiliated
transactions will be
determined in
accordance with fair and
reasonable market
prices, and the price of
affiliate transactions will
be fair; I will perform
the information
disclosure obligations of
affiliated transactions in
accordance with relevant
laws, regulations and the
Articles of Association;
I will not use affiliated
transactions to illegally
transfer the funds and
profits of Gree Electric
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Appliances or damage
the interests of Gree
Electric Appliances and
affiliated shareholders.
3. To ensure that I and
other enterprises under
my control will, in
accordance with the
provisions of laws,
regulations and the
Articles of Association,
when deliberating
affiliated transactions
involving me and other
enterprises under my
control, effectively abide
by the avoidance
procedure during the
voting on affiliated
transactions at the
meeting of the board of
shareholders or the
general meeting of
shareholders of Gree
Electric Appliances.
1. The Transferee
commits that it will
maintain the overall
stability of the
management team of
Commitments in the Zhuhai Mingjun
Gree Electric
acquisition report or Investment Partnership Other commitments December 2, 2019 Long-term effective In progress
Appliances within the
equity change report (Limited Partnership)
scope of its authority
upon completion of the
transfer and that there
will be no significant
changes in the
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
governance structure of
Gree Electric
Appliances.
2. The Transferee
commits not to initiate
any suggestion or
proposal to relocate the
headquarters and
registered office of Gree
Electric Appliances
from Zhuhai during the
period of direct or
indirect shareholding of
Gree Electric
Appliances, and to
actively urge all parties
to ensure that the
headquarters and
registered office of Gree
Electric Appliances will
not be relocated from
Zhuhai; if any
shareholder proposes
any suggestion or
proposal to relocate the
headquarters and
registered office of Gree
Electric Appliances
from Zhuhai, the
Transferee commits to
attend the shareholders'
meeting and to vote
against such proposal.
3. The Transferee
commits to make its best
effort and ability to
make effective industrial
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
investment and strategic
resource introduction for
the economic
development of Zhuhai,
and to promote Gree to
make new contributions
to the sustainable and
healthy economic
development of Zhuhai.
4. Zhuhai Mingjun
commits to actively
exercise the
shareholders' voting
right at the shareholders'
meeting of the listed
company involving
dividend payment and to
urge its nominated
directors to vote in favor
of the resolution of the
Board of Directors on
the dividend payment
ratio of not less than
50% of the annual net
profit of the listed
company.
During the period of
holding shares of Gree
Electric Appliances, the
Company will fully
During the period of
assume all reasonable
Zhuhai Gree Group Co., being a shareholder of
Other commitments Other commitments expenses and economic June 14, 2019 In progress
Ltd. Gree Electric
losses (if any) incurred
Appliances
by Gree Electric
Appliance due to the
Company's termination
of the Residual Equity
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Incentive Plan.
Whether commitments
Yes
are fulfilled on time
If commitments are not
fulfilled within the
deadline, detail the
specific reason for Not applicable
fulfillment failure and
the work plan for the
next step
2. The Company's assets or projects involve earnings forecast and the report period is still in the earnings forecast period and the Company explains the assets or projects that
achieve the original earnings forecast and the relevant reasons
□ Applicable Not Applicable
II. The listed company's non-operating funds occupied by the controlling shareholders and their affiliated parties
□ Applicable Not Applicable
No controlling shareholder or its affiliated party occupied non-operating funds of the listed company in the report period of the Company.
III. Violation of external guarantees
□ Applicable Not Applicable
The Company has no violation of external guarantees during the report period.
IV. Statement by the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable Not Applicable
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
V. Statement by the Board of Directors, Board of Supervisors and independent directors (if any) on the "Non-standard Audit Report"
of the accounting firm in the report period
□ Applicable Not Applicable
VI. Description of changes in accounting policies, accounting estimates or corrections of significant accounting errors compared to the
previous year's financial statement
Applicable □ Not applicable
1. Changes in major accounting policies and accounting estimate
(1). Changes of major accounting policies
On December 13, 2022, the Ministry of Finance issued the Accounting Standards for Enterprises Interpretation No.16 (hereinafter referred to as "Interpretation No.16"). According to the
requirements of the Ministry of Finance, the content of "deferred income tax related to assets and liabilities arising from a single transaction is not applicable to the accounting treatment of
initial recognition exemption" came into effect on January 1, 2023. According to the relevant requirements, the Company made corresponding changes to the accounting policies, and this
change in accounting policies not had a significant impact on the Company's financial indicators such as total assets, total liabilities, net assets, and net profit.
The following shows adjustments to the financial statements at the beginning of the year of the first implementation of the new accounting standard for the first time starting from 2023:
Unit: RMB
Amount as at December 31, 2022 (before change) Amount as at January 1, 2023 (after change)
Statement Item
Consolidated Statements Company's statement Consolidated Statements Company's statement
Non-current assets:
Deferred income tax assets 14,598,866,870.23 11,399,848,879.09 14,644,877,571.11 11,399,848,879.09
Total non-current assets 99,884,719,906.36 68,573,037,866.58 99,930,730,607.24 68,573,037,866.58
Page 116 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Total assets 355,024,758,878.82 286,630,030,242.19 355,070,769,579.70 286,630,030,242.19
Non-current liabilities:
Deferred income tax liabilities 2,225,127,743.74 710,194,350.26 2,271,138,444.62 710,194,350.26
Total non-current liabilities 36,776,774,049.04 28,240,257,442.77 36,822,784,749.92 28,240,257,442.77
Total liabilities 253,148,710,864.63 229,227,597,889.80 253,194,721,565.51 229,227,597,889.80
Total liabilities and shareholders'
355,024,758,878.82 286,630,030,242.19 355,070,769,579.70 286,630,030,242.19
equity
(2). Changes in major accounting estimates
None.
VII. Description of changes in the consolidated statement scope in comparison with the financial statements of last year
Applicable □ Not applicable
1. Business combinations not under common control
① Business combination not under common control in the current period
Unit: RMB
Time Point of Equity Equity Acquisition Equity Acquisition
Name of the Acquiree Equity Acquisition Cost Acquisition Date
Acquisition Proportion Method
Ganzhou Qianjin Real Estate Co., Ltd. 2023/10/31 239,485,900.00 90.00% Purchase by cash 2023/10/31
(Continued)
Unit: RMB
Page 117 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Operating Income of the Acquiree Net Profit of the Acquiree from the Cash Flow of the Acquiree from the
Basis for Determining the
Name of the Acquiree from the Acquisition Date to the Acquisition Date to the End of the Acquisition Date to the End of the
Acquisition Date
End of the Period Period Period
Ganzhou Qianjin Real Estate Co., Ltd. Acquisition of control -804,692.79 3,947,533.56
② Cost and goodwill of business combination
Unit: RMB
Cost of business combination Amount
Total cost of business combination 239,485,900.00
Including: Cash 239,485,900.00
Less: Fair value of the identifiable net assets acquired 239,485,903.54
Combination cost less than the share of fair value of identifiable net asset acquired -3.54
③ Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB
Ganzhou Qianjin Real Estate Co., Ltd.
Item
Fair value on the acquisition date Book value on the acquisition date
Assets:
Monetary funds 143,501.61 143,501.61
Other receivables 19,819,308.24 19,819,308.24
Page 118 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Inventory 226,354,123.01 226,354,123.01
Other current assets 19,778,515.52 19,778,515.52
Subtotal of assets 266,095,448.38 266,095,448.38
Liabilities:
Subtotal of liabilities
Net Assets 266,095,448.38 266,095,448.38
Less: Minority shareholders' equity 26,609,544.84 26,609,544.84
Net assets acquired 239,485,903.54 239,485,903.54
④ Gains or losses arising from the remeasurement of equity held before the acquisition date at fair value
None.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
Page 119 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount of
The Determinatio
Other
Difference n Methods
Comprehensiv
Between the Book Value Fair Value and Main
e Income
Disposal Price Proportion of the of the Assumptions
Disposa Related to
Disposa Disposal and the Share of Remaining Remaining Gains or of the Fair
Time l Ratio Basis for Equity
l Price Methods of the Remainin Equity at the Equity at the Losses Arising Value of the
Point of the Determinin Investment of
of the of the Subsidiaries' g Equity Consolidate Consolidate from Remaining
Name of of Time g the Time the Original
Time Time Net Assets at on the d Financial d Financial Remeasuremen Equity on the
Subsidiary Losing Point of Point of Subsidiary
Point of Point of the Level of Date of Statement Statement t of Remaining Date of
Contro Losing Losing Transferred
Losing Losing Consolidated Losing Level on the Level on the Equity at Fair Losing
l Control Control into
Control Control Statements Control Date of Date of Value Control at the
(%) Investment
Correspondin (%) Losing Losing Consolidated
Profits and
g to the Control Control Financial
Losses or
Disposal Statement
Retained
Investment Level
Earnings
Tianjin Gree
Xinhui
2023- Cancelle Business
Medical 100.00 None
10-30 d registration
Equipment
Co., Ltd.
SL Group
Jingu Grain 2023- Cancelle Business
100.00 None
Depot Co., 8-25 d registration
Ltd.
SL Group
Songlin 2023- Cancelle Business
100.00 None
Grain Depot 9-22 d registration
Co., Ltd.
DunAn
Sensing 2023- Cancelle Business
66.58 None
Technology 6-5 d registration
Co., Ltd.
Jilin
Songliang 2023- Cancelle Business
Modern 100.00 None
5-6 d registration
Logistics
Developmen
Page 120 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
t Co., Ltd.
5. Change of combination scope for other reasons
Newly established entity in the current period:
Unit: RMB
Net Profit from the Combination Date
Company Name Date of Establishment Net Assets at the End of the Period
to the End of the Period
Hunan DunAn Refrigeration Equipment Co., Ltd. 2023-2-7 22,486,643.44 2,486,643.44
Luoyang Herun Real Estate Co., Ltd. 2023-9-28 -51,151.68 -51,151.68
Gree Zero Carbon Source (Shanghai) Technology Co., Ltd. 2023-10-20
VIII. Engagement and disengagement of accounting firms
Accounting firm currently employed
Name of domestic accounting firm Union Power Certified Public Accountants (Special General Partnership)
Remuneration for the domestic accounting firm (RMB10,000) 396
Consecutive years for the domestic accounting firm to render audit service 9 years
Name of Certified Public Accountants of the domestic accounting firm Wu Zihao and Qiu Yiwu
Consecutive years for the Certified Public Accountants of domestic accounting firm to render
2 years and 3 years
audit service
Whether a new accounting firm was hired for the current period
Page 121 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
□ Yes No
Engagement of an accounting firm for internal control auditing, financial adviser or sponsor
Applicable □ Not applicable
During the year, the Company hired Union Power CPAs Co., Ltd. (Special General Partnership) as the accounting firm for internal control audit of the Company.
IX. Delisting after disclosure of the Annual Report
□ Applicable Not Applicable
X. Matters related to bankruptcy reorganization
□ Applicable Not Applicable
The Company was not involved in any matter related to bankruptcy reorganization in the report period.
XI. Major legal action or arbitration
□ Applicable Not Applicable
The Company was not involved in any major legal action or arbitration for the report period.
XII. Punishment and rectification
□ Applicable Not Applicable
The Company was not involved in any punishment or rectification during the report period.
XIII. Integrity status of the Company and its controlling shareholder(s) and actual controller(s)
□ Applicable Not Applicable
Page 122 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
XIV. Significant affiliated transactions
1. Affiliated transactions associated with day-to-day operation
Applicable □ Not applicable
Pricing Whether Available
Amount of Proportion Approved Settlement
Parties to Type of Content of Principles Price of it Market
Affiliated to Amount Transaction Method of Date of
Affiliated Associatio Affiliated Affiliated for Affiliated Exceeds Price of
Transactions of Similar Amount Affiliated Disclosur Disclosure Index
Transaction n Transactio Transaction Affiliated Transaction the Similar
(RMB10,000 Transaction (RMB10,000 Transaction e
s n s Transaction s Approve Transaction
) s ) s
s d Limit s
Companies
where Based on
directors the market
Zhejiang of the price, to be Disclosed on CNINFO
Shengshi Company determined Payment (http://www.cninfo.com.cn/new/inde
Sale of Sale of Market Market April 29,
Xinxing act as subject to 588,512.94 3.37% 659,000 before x) on April 29, 2023, announcement
goods products price price 2023
Gree Trade executive the delivery number: 2023-012
Co., Ltd. directors negotiation
and between the
general two parties
No
managers
Based on
Companies
the market
where
Henan price, to be Disclosed on CNINFO
directors
Shengshi determined Payment (http://www.cninfo.com.cn/new/inde
of the Sale of Sale of Market Market April 29,
Xinxing subject to 467,338.10 2.68% 400,000 before x) on April 29, 2023, announcement
Company goods products price price 2023
Gree Trade the delivery number: 2023-012
act as
Co., Ltd. negotiation
executive
between the
directors
two parties
Total -- -- 1,055,851.04 -- 1,059,000 -- -- -- -- --
Details of large-amount sales return Not applicable
Actual fulfillment (if any) in the report period In fiscal year 2023, the Company expected that the total amount of daily related transactions with the above-mentioned associated parties would
when the total amount is estimated by category not exceed RMB10.59 billion, and the actual amount was RMB10.559 billion, which did not exceed the expected amount.
Page 123 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
for the daily affiliated transaction that will
incur in the current period
Cause for the large difference between the
transaction price and market reference price (if Not applicable
applicable)
2. Affiliated transactions of acquisition or sales of assets or equity
□ Applicable Not Applicable
The Company was not involved in any affiliated transaction of acquisition or sales of assets or equity in the report period.
3. Affiliated transactions of common foreign investment
□ Applicable Not Applicable
The Company was not involved in any affiliated transaction of common foreign investment during the report period.
4. Affiliated credits and liabilities
□ Applicable Not Applicable
The Company was not involved in any affiliated credit or liability in the report period.
5. Transactions with finance companies with which the Company with association
□ Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the Company and its affiliated financial companies and the affiliated parties
6. Transactions between the financial company under the Company's control and the affiliated parties
□ Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the finance company under the Company's control and the affiliated parties.
Page 124 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
VII. Other significant affiliated transactions
□ Applicable Not Applicable
The Company was not involved in other significant affiliated transactions during the report period.
XV. Significant contracts and their fulfillment
1. Information about trusteeship, contracting and lease
(1) Trusteeship
□ Applicable Not Applicable
The Company was not involved in any trusteeship during the report period.
(2) Contracting
□ Applicable Not Applicable
The Company was not involved in any contracting matter during the report period.
(3) Lease
□ Applicable Not Applicable
The Company was not involved in any lease during the report period.
2. Significant guarantee
Applicable □ Not applicable
Unit: RMB10,000
External guarantees by the Company and its subsidiaries (excluding guarantees to subsidiaries)
Object of Disclosure Guarantee Actual Date Actual Guarantee Collateral (if Counter- Guarantee Whether the Is it a
Page 125 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Guarantee Date of the Amount of Incurring Guarantee Type any) guarantee (if Period Fulfillment is Guarantee for
Announcement Amount any) Completed Affiliated
Related to the Parties
Guarantee
Amount
None
Total amount of external guarantees Total actual amount of external
approved during the report period guarantees incurred during the
(A1) report period (A2)
Total amount of external guarantees Total actual external guarantee
approved at the end of the report balance at the end of the report
period (A3) period (A4)
Guarantee of the Company to its subsidiaries
Disclosure
Date of the Is it a
Actual Counter- Whether the
Object of Announcement Guarantee Actual Date Guarantee Collateral (if Guarantee Guarantee for
Guarantee guarantee (if Fulfillment is
Guarantee Related to the Amount of Incurring Type any) Period Affiliated
Amount any) Completed
Guarantee Parties
Amount
From the
Nanjing Walsin actual date of
April 29, 2023 30,491.14 Pledged Note pool None No
Metal Co., Ltd. guarantee to
June 7, 2024
Zhuhai Gree From the
Green Control actual date of
April 29, 2023 2,735.46 Pledged Note pool None No
Technology Co., guarantee to
Ltd. June 7, 2024
Gree (Nanjing) 1,900,000 From the
Electric actual date of
April 29, 2023 461.06 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
Zhuhai Gree
From the
Energy
actual date of
Environment April 29, 2023 13,180.66 Pledged Note pool None No
guarantee to
Technology Co.,
June 7, 2024
Ltd.
Page 126 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree (Hangzhou) From the
Electric actual date of
April 29, 2023 801.73 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
Gree Changsha From the
HVAC actual date of
April 29, 2023 781.11 Pledged Note pool None No
Equipment Co., guarantee to
Ltd. June 7, 2024
Zhuhai Gree
From the
Mechanical and
actual date of
Electrical April 29, 2023 8,257.28 Pledged Note pool None No
guarantee to
Engineering Co.,
June 7, 2024
Ltd.
Gree TOSOT From the
(Suqian) Home actual date of
April 29, 2023 2,948.57 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
From the
Gree (Anji)
actual date of
Precision Mould April 29, 2023 98.3 Pledged Note pool None No
guarantee to
Co., Ltd.
June 7, 2024
Gree (Wuhu) From the
Electric actual date of
April 29, 2023 734.43 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
Zhuhai Gree From the
Intelligent actual date of
April 29, 2023 27,445.02 Pledged Note pool None No
Equipment Co., guarantee to
Ltd. June 7, 2024
Zhuhai Gree I
Zhuhai Gree From the
Intelligent actual date of
April 29, 2023 14,698.51 Pledged Note pool None No
Equipment guarantee to
Technology June 7, 2024
Institute Co., Ltd.
Gree (Wuhan) From the
April 29, 2023 3,022.57 Pledged Note pool None No
Electric actual date of
Page 127 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Appliances Co., guarantee to
Ltd. June 7, 2024
Gree (WuAn)
From the
Precision
actual date of
Equipment April 29, 2023 6,206.91 Pledged Note pool None No
guarantee to
Manufacturing
June 7, 2024
Co., Ltd.
Zhuhai Gree
Electric From the
Appliances actual date of
April 29, 2023 1,426.44 Pledged Note pool None No
Intelligent guarantee to
Manufacturing June 7, 2024
Co., Ltd
Gree (Chengdu) From the
Electric actual date of
April 29, 2023 56,354.33 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
From the
Zhuhai Gree
actual date of
Precision Mold April 29, 2023 22,988.46 Pledged Note pool None No
guarantee to
Co., Ltd.
June 7, 2024
Zhuhai Kaibang From the
Motor actual date of
April 29, 2023 77.59 Pledged Note pool None No
Manufacturing guarantee to
Co., Ltd. June 7, 2024
From the
Zhuhai Gree New actual date of
April 29, 2023 4,052.92 Pledged Note pool None No
Material Co., Ltd. guarantee to
June 7, 2024
From the
Gree (Wuhan)
actual date of
Precision Mould April 29, 2023 1,348.87 Pledged Note pool None No
guarantee to
Co., Ltd.
June 7, 2024
Gree (Wuhan) From the
Intelligent actual date of
April 29, 2023 3,241.67 Pledged Note pool None No
Equipment Co., guarantee to
Ltd. June 7, 2024
Page 128 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree (Linyi) From the
Electric actual date of
April 29, 2023 6,328.01 Pledged Note pool None No
Appliances Co., guarantee to
Ltd. June 7, 2024
From the
Zhuhai Edgeless
actual date of
Integrated Circuit April 29, 2023 200 Pledged Note pool None No
guarantee to
Co., Ltd.
June 7, 2024
Changsha
From the
Kinghome
actual date of
Electric April 29, 2023 560.3 Pledged Note pool None No
guarantee to
Appliances Co.,
June 7, 2024
Ltd
From the
Gree (Meishan)
actual date of
Electric April 29, 2023 345.93 Pledged Note pool None No
guarantee to
Enterprises Ltd.
June 7, 2024
Gedianxincai From the
(Ma'anshan) actual date of
April 29, 2023 1,906.26 Pledged Note pool None No
Technology Co., guarantee to
Ltd. June 7, 2024
Zhuhai Gree From the
Electronic actual date of
April 29, 2023 49,730.54 Pledged Note pool None No
Components Co., guarantee to
Ltd. June 7, 2024
Total amount of guarantees to Total amount incurred of
subsidiaries approved during the 1,900,000 guarantees to subsidiaries 260,424.07
report period (B1) during the report period (B2)
Total amount of guarantees to Total actual guarantee balance
subsidiaries approved at the end of 1,900,000 to subsidiaries at the end of the 260,424.07
the report period (B3) report period (B4)
Guarantee of subsidiaries to subsidiaries
Disclosure Is it a
Actual Counter- Whether the
Object of Date of the Guarantee Actual Date Guarantee Collateral (if Guarantee Guarantee for
Guarantee guarantee (if Fulfillment is
Guarantee Announcement Amount of Incurring Type any) Period Affiliated
Amount any) Completed
Related to the Parties
Page 129 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Guarantee
Amount
Zhejiang DunAn
Joint liability
Hetian Metals May 18, 2023 50,000 June 29, 2023 10,090 3 years No No
guarantee
Co., Ltd.
Zhejiang DunAn
Joint liability
International April 29, 2023 20,000
guarantee
Trade Co., Ltd.
Zhejiang DunAn
Artificial October 27, November 20, Joint liability
30,000 30,000 3 years No No
Environment Co., 2023 2023 guarantee
Ltd.
Zhejiang DunAn
Artificial January 3, Joint liability
30,000 30,000 3 years No No
Environment Co., 2023 guarantee
Ltd.
Zhejiang DunAn
Artificial Joint liability
May 18, 2023 20,000 June 29, 2023 20,000 3 years No No
Environment Co., guarantee
Ltd.
From the
effective date
of the
guarantee
Zhuhai Gree contract to
Altairnano three years
December 29, January 5, Joint liability
Electric 5,600 None None after the date No No
2022 2023 guarantee
Appliance Co., of expiration of
435,500
Ltd. the
performance
period of the
debt under the
main contract
Zhuhai The guarantee
Guangtong December 29, March 12, Joint liability period is two
30,000 None None No No
Automobile Co., 2022 2023 guarantee years from the
Ltd., Chengdu effective date
Page 130 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Guangtong of the
Automobile Co., independent
Ltd., and Tianjin contract to the
Gree Altairnano date of the
New Energy Co., performance
Ltd. period of the
last installment
of the debt
under the main
contract.
If the main
contract is a
loan contract,
the guarantee
period under
this contract is
three years
from the day
after the
expiration of
the loan term
under the main
contract; if the
Gree Altairnano December 29, March 14, Joint liability
31,900 Yes None creditor No No
New Energy Inc. 2022 2023 guarantee
announces the
early due of
the loan
according to
the provisions
of the main
contract, the
guarantee
period shall be
three years
from the day
after the early
due date of the
Page 131 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
loan.
The creditor's
rights
guaranteed by
the mortgagor
Zhuhai Gree are during the
Altairnano period from
December 29, Joint liability
Electric July 18, 2023 1,000 Yes None July 21, 2023, No No
2022 guarantee
Appliance Co., to January 21,
Ltd. 2027
(including the
start date and
expiration
date)
From January
13, 2023, to
January 12,
2028, the
creditor's rights
were formed
by the
mortgagee and
the debtor's
Gree Altairnano December 29, January 18, Joint liability
50,000 Yes None handling of No No
New Energy Inc. 2022 2023 guarantee
various
business
agreements.
This period is
the period for
determining
the maximum
amount of
secured debt.
It is a series of
Gree Altairnano December 29, October 11, Joint liability debts under the
27,000 Yes None No No
New Energy Inc. 2022 2023 guarantee financing
business
Page 132 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
initiated by the
debtor through
the bank
network supply
chain "E
Xintong" from
September 26,
2023, to
September 25,
2028.
From the
effective date
of the
guarantee
contract to
Tianjin
three years
Guangtong December 29, January 5, Joint liability
35,000 None None after the date Yes No
Automobile Co., 2022 2023 guarantee
of expiration of
Ltd.
the
performance
period of the
debt under the
main contract
From the
effective date
of the
guarantee
contract to
three years
Gree Altairnano December 29, January 5, Joint liability
55,000 None None after the date Yes No
New Energy Inc. 2022 2023 guarantee
of expiration of
the
performance
period of the
debt under the
main contract.
Gree Altairnano December 29, July 16, 2023 10,000 Joint liability Yes None Mortgage right Yes No
Page 133 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
New Energy Inc. 2022 guarantee and mortgage
guarantee debt
exist at the
same time, and
the mortgage
right is
eliminated
after the
creditor's rights
are paid off.
Total amount of guarantees to Total amount incurred of
subsidiaries approved during the 455,500 guarantees to subsidiaries 335,590
report period (C1) during the report period (C2)
Total amount of guarantees to Total actual guarantee balance
subsidiaries approved at the end of 455,500 to subsidiaries at the end of the 235,590
the report period (C3) report period (C4)
Total amount of company guarantee (i.e. total of the first three major items)
Total amount of guarantee approved Total amount of guarantees
during the report period 2,355,500 incurred during the report 596,014.07
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total actual guarantee balance
guarantees at the end of the report 2,355,500 at the end of the report period 496,014.07
period (A3+B3+C3) (A4+B4+C4)
Proportion of actual total guarantees (i.e. A4+B4+C4) to the
4.25%
Company's net assets
Including:
Balance of guarantees provided to shareholders, effective controllers
0
and their affiliated parties (D)
Debt guarantee balance provided directly or indirectly for guaranteed
parties with an debt ratio exceeding 70% (E)
Amount of the total guarantee exceeding 50% of net assets (F)
Total amount of the three guarantees mentioned above (D+E+F)
Explanation (if any) where a guarantee liability or evidence is Not applicable
Page 134 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
indicating the possibility of assuming joint and several liabilities for
unexpired guarantee contracts during the report period
Explanation of external guarantees provided in violation of prescribed
Not applicable
procedures (if any)
Explanation of the specific situation of using composite guarantee
None
3. Entrusting others to execute any cash asset management
(1) Entrusted financial management
Applicable □ Not applicable
Overview of entrusted financial management during the report period
Unit: RMB10,000
Amount incurred by
Source of funds for entrusted Impaired amount for overdue
Specific type entrusted financial Undue balance Overdue uncollected amount
financial management uncollected amount
management
Bank financial products Own funds 414,355.10 414,355.10
Trust financial products Own funds 432,943.41 388,211.06
Securities traders' financial
Own funds 386,687.68 190,889.05
products
Total 1,233,986.19 993,455.21
Specific situation of high-risk entrusted financial management with large individual amounts or low security and poor liquidity
□ Applicable Not Applicable
Expected inability to recover principal or other situations that may lead to impairment in entrusted financial management
□ Applicable Not Applicable
Page 135 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
(2) Entrusted loan
□ Applicable Not Applicable
The Company was not involved in any entrusted loan during the report period.
4. Other significant contracts
□ Applicable Not Applicable
The Company did not enter into any other significant contract during the report period.
XVI. Description of other significant matters
□ Applicable Not Applicable
There were no other significant matters that needed to be explained during the report period.
XVII. Significant matters of the Company's subsidiaries
□ Applicable Not Applicable
Page 136 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section VII. Changes in Shares and Shareholders
I. Changes in shares
1. Changes in share capital
Unit: share
Before this change Increase and decrease of this change (+, -) After this change
Shares
Quantity Percentage New issue Bonus issue converted from Others Subtotal Quantity Percentage
reserved funds
I. Shares with
trading
39,266,939 0.70% 8,989,182 8,989,182 48,256,121 0.86%
restriction
conditions
1. Shares held
by the State
2. Shares held
by state-owned
legal person
3. Shares held
by other 39,266,939 0.70% 8,989,182 8,989,182 48,256,121 0.86%
domestic capital
Including:
Shares held by
domestic legal
person
Shares held
by domestic 39,266,939 0.70% 8,989,182 8,989,182 48,256,121 0.86%
natural person
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
4. Shares held
by foreign
capital
Including:
Shares held by
foreign legal
person
Shares held
by foreign
natural person
II. Shares
without trading
5,592,138,802 99.30% -8,989,182 -8,989,182 5,583,149,620 99.14%
restriction
conditions
1. RMB
5,592,138,802 99.30% -8,989,182 -8,989,182 5,583,149,620 99.14%
common share
2.
Domestically
listed foreign
shares
3. Overseas
listed foreign
shares
4. Others
III. Total
number of 5,631,405,741 100.00% 0 0 5,631,405,741 100.00%
shares
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Causes for changes in share capital
□ Applicable Not Applicable
Approval of share changes
□ Applicable Not Applicable
Transfer of share changes
□ Applicable Not Applicable
Effect of share changes on financial indicators such as basic earnings per share, diluted earnings per share and net assets per
share attributable to common shareholders of the Company for the latest year and the latest period
□ Applicable Not Applicable
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory authority
□ Applicable Not Applicable
2. Changes in restricted shares
Applicable □ Not applicable
Unit: share
Number of Number of Number of Number of
Restricted Restricted Restricted Restricted
Name of Reasons for
Shares at the Shares Shares Lifted in Shares at the Date of Lifting
Shareholder Restriction
Beginning of Increased in the the Current End of the
the Period Current Period Period Period
Senior
Dong Mingzhu 33,366,369 7,500,000 40,866,369 executive share -
lockup
Senior
Zhang Wei 137,496 137,496 executive share -
lockup
Senior
Deng Xiaobo 87,450 87,450 executive share -
lockup
Senior
Duan Xiufeng 335,644 117,225 452,869 executive share -
lockup
Senior
Wang Fawen 38,516 38,516 executive share -
lockup
Senior
Zhuang Pei 4,466,401 315,190 4,781,591 executive share -
lockup
Senior
Tan Jianming 972,975 366,352 1,339,327 executive share -
lockup
Senior
Shu Lizhi 74,789 74,789 executive share -
lockup
Senior
Liao Jianxiong 58,247 58,247 executive share -
lockup
Senior
Fang Xiangjian 125,550 293,917 419,467 executive share -
lockup
Page 139 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Total 39,266,939 8,989,182 0 48,256,121 -- --
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the report period
□ Applicable Not Applicable
2. Description of changes in the Company's total number of shares and shareholder structure, and
asset and liability structure
□ Applicable Not Applicable
3. Existing internal employee share
□ Applicable Not Applicable
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
III. Shareholders and actual controller(s)
1. Number of shareholders and their shareholding status
Unit: share
Total number of Total number of
common preferred
Total number of Total number of preferred shareholders
shareholders as of shareholders with
common with restored voting rights (if any) at the
the end of the restored voting
shareholders at the 613,839 507,379 0 end of the previous month before the 0
previous month rights (if any) at
end of the report disclosure date of the Annual Report
before the the end of the
period (See Note 8)
disclosure date of report period (See
the Annual Report Note 8)
Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding shares lent through refinancing)
Number of Shares Number of Shares Pledge, Tag or Freezing
Number of Shares Increase/Decrease
Name of Nature of Shareholding With Trading Without Trading
Held at the End of During the Report
Shareholder Shareholder Proportion Restriction Restriction Share status Quantity
the Report Period Period
Conditions Held Conditions Held
Zhuhai Mingjun
Investment Domestic non-
Partnership state-owned legal 16.02% 902,359,632 0 0 902,359,632 Pledged 902,359,632
(Limited person
Partnership)
Hong Kong
Securities Foreign legal
10.95% 616,582,994 -29,948,233 0 616,582,994 0
Clearing person
Company Ltd.
Jinghai Internet
Domestic non-
Technology
state-owned legal 6.86% 386,043,038 3,121,800 0 386,043,038 0
Development Co.,
person
Ltd.
Zhuhai Gree State-owned legal
3.44% 193,895,992 15,430,000 0 193,895,992 0
Group Co., Ltd. person
China Securities Domestic non-
3.19% 179,870,800 0 0 179,870,800 0
Finance state-owned legal
Page 141 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Corporation person
Limited
Gree Electric
Appliances, Inc.
of Zhuhai -
Others 1.37% 77,163,880 77,163,880 0 77,163,880 0
Employee Stock
Ownership Plan
Phase II
Domestic natural
Dong Mingzhu 0.97% 54,488,492 10,000,000 40,866,369 13,622,123 0
person
Industrial and
Commercial Bank
of China Limited -
Huatai-PineBridge
Others 0.60% 33,568,621 15,005,100 0 33,568,621 0
CSI 300 Trading
Open-end Index
Securities
Investment Fund
Central Huijin
Asset State-owned legal
0.47% 26,291,256 0 0 26,291,256 0
Management Co., person
Ltd
Basic Pension
Insurance Fund Others 0.40% 22,465,556 Unknown 0 22,465,556 0
15012 Portfolio
Situation (if any) where a strategic
investor or general legal person
None
becomes one of top 10 shareholders due
to placement of new shares (see Note 3)
Description of association or concerted Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company
action of the above shareholders does not know whether there is an association between the above shareholders or whether they are persons acting in concert.
Description of above-mentioned
shareholders’ involvement in
None
entrusting/being entrusted with and
waiving voting rights
Special note on the existence of Gree Electric Appliances, Inc. of Zhuhai held 109,462,095 shares in the repurchase special securities account at the end of the report period, with a
Page 142 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
repurchase accounts among the top 10 shareholding ratio of 1.94%.
shareholders (if any) (see Note 10)
Shareholding of the top 10 shareholders of shares without trading restriction conditions
Type of shares
Name of Shareholder Number of shares without trading restriction conditions held at the end of the report period
Type of shares Quantity
Zhuhai Mingjun Investment Partnership RMB common
902,359,632 902,359,632
(Limited Partnership) share
Hong Kong Securities Clearing RMB common
616,582,994 616,582,994
Company Ltd. share
Jinghai Internet Technology RMB common
386,043,038 386,043,038
Development Co., Ltd. share
RMB common
Zhuhai Gree Group Co., Ltd. 193,895,992 193,895,992
share
China Securities Finance Corporation RMB common
179,870,800 179,870,800
Limited share
Gree Electric Appliances, Inc. of Zhuhai
RMB common
- Employee Stock Ownership Plan 77,163,880 77,163,880
share
Phase II
Industrial and Commercial Bank of
China Limited - Huatai-PineBridge CSI RMB common
33,568,621 33,568,621
300 Trading Open-end Index Securities share
Investment Fund
Central Huijin Asset Management Co., RMB common
26,291,256 26,291,256
Ltd share
Basic Pension Insurance Fund 15012 RMB common
22,465,556 22,465,556
Portfolio share
Agricultural Bank of China Co., Ltd.-
RMB common
Dacheng High-tech Industry Equity 20,641,701 20,641,701
share
Securities Investment Fund
Description of the association or
concerted action between the top 10
shareholders of circulating shares
Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company
without trading restriction conditions, as
does not know whether there is an association between the above shareholders or whether they are persons acting in concert.
well as between the top 10 shareholders
of circulating shares without trading
restriction conditions and the top 10
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
shareholders
Description of the participation of the
top 10 common shareholders in margin
None
trading and securities lending business
(if any) (see Note 4)
Lending shares of the top 10 shareholders participating in refinancing business
Applicable □ Not applicable
Unit: share
Lending shares of the top 10 shareholders participating in refinancing
Shares Lent Through Refinancing at the
Ordinary Account and Credit Account Ordinary Account and Credit Account Shares Lent Through Refinancing at the
Beginning of the Period and Not Yet
Name of Holdings at the Beginning of the Period Holdings at the End of the Period End of the Period and Not Yet Repaid
Repaid
Shareholder (Full
Name) Proportion to Proportion to Proportion to Proportion to
Total Quantity Total Share Total Quantity Total Share Total Quantity Total Share Total Quantity Total Share
Capital Capital Capital Capital
Zhuhai Gree
178,465,992 3.17% 15,430,000 0.27% 193,895,992 3.44% 0 0.00%
Group Co., Ltd.
Industrial and
Commercial Bank
of China Limited -
Huatai-PineBridge
18,563,521 0.33% 0 0.00% 33,568,621 0.60% 20,300 0.00%
CSI 300 Trading
Open-end Index
Securities
Investment Fund
Changes in the top 10 shareholders compared with the previous period
Applicable □ Not applicable
Unit: share
Changes in the top ten shareholders from the end of the previous period
Name of Shareholder (Full Additions/Exits During Number of Shares Lent Through Refinancing at the End of Number of Shares Held by Shareholders in Ordinary
Name) the Report Period the Period and Not Yet Repaid Accounts and Credit Accounts and Shares Lent by
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Refinancing and Not Yet Returned at the End of the Period
Proportion to Total Share Proportion to Total Share
Total Quantity Total Quantity
Capital Capital
Gree Electric Appliances, Inc. of
Zhuhai - Employee Stock Addition 0 0.00% 77,163,880 1.37%
Ownership Plan Phase II
Industrial and Commercial Bank
of China Limited - Huatai-
PineBridge CSI 300 Trading Addition 20,300 0.00% 33,588,921 0.60%
Open-end Index Securities
Investment Fund
Central Huijin Asset
Addition 0 0.00% 26,291,256 0.47%
Management Co., Ltd
Basic Pension Insurance Fund
Addition 0 0.00% 22,465,556 0.40%
15012 Portfolio
Foresea Life Insurance Co., Ltd.
Exit 0 0.00% Unknown Unknown
Hai Li Nian Nian
Gree Electric Appliances, Inc. of
Zhuhai Employee Stock Exit 0 0.00% 0 0.00%
Ownership Plan Phase I
HHLR Management Pte. Ltd.
Exit 0 0.00% 15,445,807 0.27%
HHLR China Fund
Abu Dhabi Investment Authority Exit 0 0.00% 3,363,222 0.06%
Note: Foresea Life Insurance Co., Ltd. - Hai Li Nian Nian's ordinary account and credit account holdings are not among the top 200 of the Company at the end of the year
Whether the top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company conducted agreed repurchase transactions in the report period
□ Yes No
The top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company didn't conduct agreed repurchase transactions in the report period.
Page 145 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
2. The Company's controlling shareholder
Nature of controlling shareholder: No controlling entity
Type of controlling shareholder: No controlling shareholder
Description of the situation that the Company has no controlling shareholder
On December 2, 2019, Gree Group signed the Share Transfer Agreement Between Zhuhai Gree Group Co., Ltd. and Zhuhai
Mingjun Investment Partnership (Limited Partnership) on 15% of the Shares of Gree Electric Appliances, Inc. of Zhuhai,
with Zhuhai Mingjun to transfer 902,359,632 shares of the listed company held by Zhuhai Mingjun. After the transaction was
completed, the single largest shareholder Zhuhai Mingjun and its concerted action person Dong Mingzhu could not pass
specific resolutions based on their actual voting rights of the listed company's shares, which was not enough to have a
significant impact on the resolutions of the shareholders' meeting of the listed company, nor could they decide the election of
more than half of the members of the board of directors of the listed company. Therefore, the listed company had no
controlling shareholders and actual controllers. For more details, please refer to the Reply to the Inquiry Letter from
Shenzhen Stock Exchange disclosed by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on January 18,
2020.
Change in controlling shareholder during the report period
□ Applicable Not Applicable
There was no change in the controlling shareholder of the Company during the report period.
3. Actual controller of the Company and its person acting in concert
Nature of the actual controller: No actual controller
Type of the actual controller: No actual controller
Description of the situation that the Company has no actual controller
On December 2, 2019, Gree Group signed the Share Transfer Agreement Between Zhuhai Gree Group Co., Ltd. and Zhuhai
Mingjun Investment Partnership (Limited Partnership) on 15% of the Shares of Gree Electric Appliances, Inc. of Zhuhai,
with Zhuhai Mingjun to transfer 902,359,632 shares of the listed company held by Zhuhai Mingjun. After the transaction was
completed, the single largest shareholder Zhuhai Mingjun and its concerted action person Dong Mingzhu could not pass
specific resolutions based on their actual voting rights of the listed company's shares, which was not enough to have a
significant impact on the resolutions of the shareholders' meeting of the listed company, nor could they decide the election of
more than half of the members of the board of directors of the listed company. Therefore, the listed company had no
controlling shareholders and actual controllers. For more details, please refer to the Reply to the Inquiry Letter from
Shenzhen Stock Exchange disclosed by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on January 18,
2020.
Whether there are shareholders with a shareholding ratio of more than 10% at the ultimate control level of the Company
Yes □No
Legal person □ Natural person
Shareholding at the ultimate control level
Name of Shareholder Legal
at the Ultimate Control Representative/Person Date of Establishment Organization Code Main Business
Level in Charge
Zhuhai Mingjun Zhuhai Xianying May 11, 2017 91440400MA4WJBCR Business scope
Page 146 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Investment Partnership Equity Investment 4W recorded in the
(Limited Partnership) Partnership (Limited agreement: Equity
Partnership) investment. (Items that
need to be approved in
accordance with law
can only be operated
after approval by
relevant departments)
Equity of other
domestic and overseas
listed companies
controlled by the
None
shareholder at the
ultimate control level
during the report
period
Change in the actual controller in the report period
□ Applicable Not Applicable
There has been no change in the actual controller of the Company during the report period.
Block diagram of the property rights and control relationship between the Company and the actual controller
The Company has no actual controller.
The actual controller controls the Company through a trust or other asset management methods
□ Applicable Not Applicable
4. The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of the
Company and its persons acting in concert reached 80% of the number of shares held by them in the Company.
Applicable □ Not applicable
Whether it
Total Amount Is There a
Affects the
of Stock Source of Risk of Debt
Company Type of Specific Repayment Stability of
Pledge Repayment Repayment
Name Shareholder Purpose Period the Control
Financing Funds or
of the
(RMB10,000) Liquidation
Company
Zhuhai
Mingjun
Repayment Own funds
Investment The largest April 30,
1,620,400 of original and self- No No
Partnership shareholder 2027
loan financing
(Limited
Partnership)
5. Other corporate shareholders holding more than 10% of shares
□ Applicable Not Applicable
6. Restrictions on shareholding reduction by controlling shareholder(s), actual controller(s),
restructuring parties and other committed entities
□ Applicable Not Applicable
Page 147 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
IV. Specific implementation of share repurchase during the report period
Progress of implementation of share repurchase
Applicable □ Not applicable
Proportion of
Repurchased
Shares to the
Number of Proposed Number of
Program Proportion to Proposed Underlying
Shares to be Repurchase Repurchase Shares
Disclosure Total Share Repurchase Stocks
Repurchased Amount Purpose Repurchased
Time Capital Period Involved in
(shares) (RMB10,000) (shares)
the Equity
Incentive
Plan (if any)
Calculated
based on a
repurchase
price limit of Not less than Not more
Equity
RMB50 per RMB1.5 than 12
Not less than incentive or
share, not billion months
October 31, 0.53% and employee
less than (inclusive) and from 91,897,967
2023 not more stock
30,000,000 not more than October 30,
than 1.07% ownership
shares and RMB3 billion 2023
plan
not more (inclusive)
than
60,000,000
shares
Implementation progress of reducing holdings of repurchased shares through centralized bidding
□ Applicable Not Applicable
Page 148 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section VIII Preferred Share Related Information
□ Applicable Not Applicable
The Company did not have any preferred shares during the report period.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section IX Bond Related Information
□ Applicable Not Applicable
Page 150 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Section X Financial Statements
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report April 29, 2024
Union Power Certified Public Accountants (Special General
Name of audit agency
Partnership)
Document number of audit report ZHS ZI (2024) No. 0500139
Name of certified public accountant Wu Zihao and Qiu Yiwu
Audit report text
Audit Report
ZHS ZI (2024) No. 0500139
All shareholders of Gree Electric Appliances, Inc. of Zhuhai:
I. Audit opinion
We have audited the financial statements of Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred
to as "your company"), including the Consolidated and Company's Balance Sheets as of December 31,
2023, and 2023 Consolidated and Company's Income Statements, 2023 Consolidated and Company's Cash
Flow Statements and 2023 Consolidated and Company's Statements of Changes in Shareholders' Equity
and Notes to Financial Statements.
In our opinion, the attached financial statements have been prepared in all material aspects in accordance
with the Accounting Standards for Business Enterprises and fairly reflected the consolidated and your
company's financial position of your company as of December 31, 2023, and the consolidated and
Company's operating results and cash flows in 2023.
II. Basis for forming audit opinions
We have conducted our audit work according to the provisions of the Audit Standards for Certified Public
Accountants of China. The part related to "CPA's responsibility for the audit of financial statements" in the
audit report further elaborates our responsibilities under these standards. In accordance with the Code of
Ethics for Certified Public Accountants of China, we are independent of your company and perform other
responsibilities in respect of professional ethics. We believe that the audit evidence obtained by us is
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
sufficient and appropriate, providing a basis for expressing our audit opinion.
III. Key audit matters
The key audit matters are the matters that are deemed to be the most important ones in the current financial
statement audit according to our professional judgment. The response to these matters is based on the
overall audit of the financial statements and the formation of audit opinions. We do not give separate
opinions on these matters.
(I) Accrual of inventory falling price reserves
Key audit matters Coping methods
Refer to "Note III. 14," "Note V. 11," and 1. Understand, evaluate, and test the effectiveness of the
"Note V. 66" in the financial statements. design and execution of internal controls related to the
recognition of inventory falling price reserves;
As of December 31, 2023, the book value of
inventory in your company's consolidated 2. Evaluate the significant judgments, assumptions and
balance sheet was RMB32,579,140,000, estimates involved in management's calculation of net
wherein the book balance of inventory was realizable value, and review the basis and documents on
RMB37,063,809,400 and the inventory falling which management determines the future selling price
price reserves was RMB4,484,669,300. of the inventory and the costs incurred until completion
(if related), the sales expenses and the related taxes and
Recognition of the inventory falling price
fees;
reserves depends on the estimation of the net
realizable value of the inventory. For 3. Carry out audit procedures such as inspection and
recognition of the net realizable value of the recalculation, especially for the determination of the net
inventory, the management should estimate realizable value of the inventory, we carried out
the future selling price of inventory, the costs recalculation according to relevant data;
(if related) to be incurred until completion, the
4. Analyze and review the inventory aging to determine
sales expenses, and the related taxes and fees.
whether the corresponding inventory falling price
In consideration of the importance of reserves are sufficient;
recognition of the inventory and inventory
5. Supervise the inventory-taking, and during the
falling price reserves to the consolidated
supervising process, in addition to paying attention to
financial statements and the complicated
the authenticity and accuracy of the inventory, the focus
calculation process of inventory falling price
was also on the usage status of the inventory, whether
reserves, and significant judgments,
there was inventory in a stagnant or defective condition,
assumptions and estimates of the management
to evaluate the adequacy of the accrual of inventory
involved when the net realizable value of the
falling price reserves;
inventory is determined, there may be error or
6. Review the adequacy of the disclosure of information
potential management bias. Therefore, we
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Key audit matters Coping methods
identified it as a key audit matter for your related to inventory falling price reserves in "Note III.
company. 14", "Note V. 11", and "Note V. 66" in the financial
statements.
(II) Revenue recognition
Key audit matters Coping methods
Please refer to "Note III. 32" and "Note V. 1. Understand, evaluate, and test the effectiveness of
55" in the financial statements. internal control design and operation related to revenue
recognition;
In 2023 and 2022 Consolidated Financial
Statements of your company, the revenue 2. Review sales contract samples, understand the delivery
from selling goods was RMB203,979,266,400 terms of the transaction, evaluate whether the business
and RMB188,988,382,700 respectively, an model is consistent with revenue recognition, evaluate
increase of 7.93% year-on-year. whether the sales contract terms comply with industry
practices, and whether the revenue recognition
Since the amount is significant and revenue is
accounting policies comply with the requirements of
one of the key business indicators of your
Accounting Standards for Business Enterprises;
company, and whether it is based on real
transactions and whether it is included in the 3. Check the original supporting documents related to
appropriate accounting period has a revenue recognition, such as orders, delivery notes, and
significant impact on the financial statements, arrival receipts based on audit sampling, to evaluate
we consider revenue recognition as a key whether revenue has truly incurred and whether it has
audit matter. been recognized in accordance with accounting policies;
4. Implement the letter verification procedure and check
the original documents and payment status for
discrepancies in the response letter to evaluate the
accuracy and authenticity of the revenue amount
incurred;
5. Carry out an analysis program to analyze from different
dimensions such as monthly fluctuations, sales regions,
product categories, and product profit margins to verify
the reasonableness of the transaction;
6. Carry out cut-off test program and post-test program to
check for any revenue intertemporal or sales return to
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Key audit matters Coping methods
address revenue intertemporal;
7. Review the adequacy of the disclosure of information
related to revenue recognition in "Note III. 32" and
"Note V. 55" in the financial statements.
IV. Other information
The management of your company is responsible for other information. Other information includes the
information covered in the 2023 Annual Report of your company, excluding the financial statements and
our audit reports.
Our audit opinions published on financial statements do not cover any other information, and we will not
publish any form of forensic conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other information
identified above, and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
Based on the work we have performed, if we determine that there is a material misstatement in other
information, we should report that fact. We have nothing to report in this regard.
V. Responsibilities of management and governance for financial statements
The management of your company (hereinafter referred to as the "management") is responsible for
preparing the financial statements in accordance with the requirements of Accounting Standards for
Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining
internal control that is necessary to ensure that the financial statements are free from material misstatements,
whether due to frauds or errors.
When preparing financial statements, the management is responsible for evaluating your company's ability
to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the
assumption of going concern, unless the management plans to liquidate your company, cease operations, or
has no other realistic choice.
The governance is responsible for overseeing your company's financial reporting process.
VI. CPA's responsibilities for the audit of the financial statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
from material misstatements caused by fraud or error, and to issue an audit report containing an audit
opinion. Reasonable assurance is a high-level assurance, but is not a guarantee that an audit conducted in
accordance with the audit standards will always detect a material misstatement when it exits. Misstatements
may be caused by fraud or error and are generally considered material if they are reasonably expected,
individually or collectively, to affect the economic decisions made by users of the financial statements.
We exercised professional judgment and maintained professional skepticism when conducting the audit in
accordance with the auditing standards. We also:
(I) Identified and assessed the risks of material misstatement of the financial statements, whether due to
fraud or error, designed and performed audit procedures responsive to those risks, and obtaineded audit
evidence that was sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve
collusion, forgery, omissions, misrepresentations, or the override of internal control.
(II) Obtained an understanding of internal control related to the audit in order to design appropriate audit
procedures.
(III) Evaluated the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosure made by management of your company.
(IV) Concluded on the appropriateness of using the going concern assumption by the management of your
company, and concluded, based on the audit evidence obtained, whether a material uncertainty exited
related to events or conditions that might cast significant doubt on our company's ability to continue as a
going concern. If we concluded that there was a significant uncertainty, we were required by audit
standards to draw the attention of report users to the relevant disclosures in the financial statements in the
audit report; if such disclosures were inadequate, we should express a non-unqualified opinion. Our
conclusions were based on the information available as of the audit report date. However, future events or
conditions may result in your company ceasing to continue as a going concern.
(V) Evaluated the overall presentation, structure and content of the financial statements, and evaluate
whether the financial statements fairly reflect relevant transactions and events.
(VI) Obtained sufficient and appropriate audit evidence for the financial information of your company's
entity or business activities to express an opinion on the financial statements. We were responsible for
guiding, supervising and implementing group audits. We assume full responsibility for the audit opinions.
We communicated with the governance regarding, among other matters, the planned audit scope, schedule,
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
and major audit findings, including any significant defects in internal control that we identified during our
audit.
We also provided a statement to the governance regarding the observed professional moral requirements
related to independence, and communicated with the governance about all the relationships and other
matters that might be reasonably considered to affect our independence, as well as the related
countermeasures (if applicable).
From the matters discussed with the governance, we have determined which are the most important for the
audit of the current financial statements and therefore constitute key audit matters. We described these
matters in the audit report, unless laws and regulations prohibit public disclosure of these matters, or in rare
cases, we determined that the matter should not be communicated in the audit report if it was reasonably
anticipated that the negative consequence caused by communicating a matter in the audit report exceeds the
benefit generated in terms of public interests.
Union Power Certified Public Accountants (Special Certified Public Accountant of China:
General Partnership) (engagement partner):
Wu Zihao
Certified Public Accountant of China:
Qiu Yiwu
Wuhan, China April 29, 2024
Page 156 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Balance Sheet
December 31, 2023
Prepared by: Gree Electric Appliances, Inc.
Unit: yuan (RMB)
of Zhuhai
Item Note December 31, 2023 January 1, 2023
Current assets:
Monetary funds V. 1 124,104,987,289.62 157,484,332,251.39
Lending funds
Trading financial assets V. 2 9,614,423,403.40 3,867,203,363.52
Derivative financial assets V. 3 108,919,513.22
Notes receivable V. 4 87,340,130.52 6,818,428.95
Accounts receivable V. 5 16,099,477,117.56 14,824,742,623.45
Receivables financing V. 7 10,176,089,668.41 28,427,310,345.20
Advance payments V. 8 2,492,647,395.31 2,344,668,845.48
Other receivables V. 9 826,558,622.42 804,277,958.80
Including: Interests receivable
Dividends receivable 19,936,649.83 1,260,498.66
Buying back the sale of financial assets V. 10 3,932,338,954.49
Inventory V. 11 32,579,140,028.70 38,314,176,763.90
Contract assets V. 6 838,812,133.65 1,047,739,817.94
Assets held for sale
Non-current assets due within one year V. 12 2,411,633,459.29 3,314,191,633.19
Other current assets V. 13 24,868,941,754.15 4,704,576,940.64
Total current assets 228,141,309,470.74 255,140,038,972.46
Non-current assets:
Disbursement of loans and advances V. 14 543,726,609.23 719,799,280.27
Debt investment V. 15 1,150,744,482.05 150,351,500.00
Other debt investments V. 16 16,363,841,665.96 14,340,348,882.97
Long-term receivables V. 17 62,185,327.12 116,084,973.52
Long-term equity investments V. 18 4,488,967,031.20 5,892,290,568.81
Other equity instrument investments V. 19 3,864,865,509.37 4,669,455,797.90
Other non-current financial assets V. 20 4,428,003,204.49
Investment real estate V. 21 633,262,161.10 634,689,201.98
Fixed assets V. 22 34,034,829,116.47 33,817,019,391.36
Construction in progress V. 23 6,563,911,378.94 5,966,678,892.16
Usufruct assets V. 24 842,250,508.12 207,344,779.05
Intangible assets V. 25 10,827,694,521.82 11,621,853,071.43
Development expenditures
Goodwill V. 26 1,452,496,852.11 1,659,358,399.03
Long-term unamortized expenses V. 27 24,275,474.94 22,862,393.90
Deferred income tax assets V. 28 16,561,437,021.81 14,644,877,571.11
Other non-current assets V. 29 42,498,105,445.39 1,039,712,699.26
Total non-current assets 139,912,593,105.63 99,930,730,607.24
Total assets 368,053,902,576.37 355,070,769,579.70
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 157 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Balance Sheet (Continued)
December 31, 2023
Prepared by: Gree Electric Appliances, Inc.
Unit: yuan (RMB)
of Zhuhai
Item Note December 31, 2023 January 1, 2023
Current liabilities:
Short-term borrowings V. 31 26,443,476,388.52 52,895,851,287.92
Borrowings from the central bank
Loans from other banks
Transaction financial liabilities
Derivative financial liabilities V. 32 4,079,919.91 184,811,894.98
Notes payable V. 33 23,741,128,400.12 38,609,900,819.74
Accounts payable V. 34 41,147,359,221.95 32,856,071,488.87
Advance receipts
Contract liabilities V. 35 13,588,771,210.88 14,972,336,715.45
Financial assets sold for repurchase
Deposits from customers and interbank V. 36 254,616,899.35 219,111,069.61
Payroll payable V. 37 4,288,611,386.29 3,897,862,091.84
Taxes and dues payable V. 38 4,337,631,560.28 3,819,424,639.48
Other payables V. 39 5,513,266,516.82 10,912,406,666.89
Including: Interests payable
Dividends payable 5,572,388.92 5,620,664,762.67
Liabilities held for sale
Non-current liabilities due within one year V. 40 20,605,521,073.03 255,342,537.57
Other current liabilities V. 41 61,058,837,178.77 57,748,817,603.24
Total current liabilities 200,983,299,755.92 216,371,936,815.59
Non-current liabilities:
Long-term borrowings V. 42 39,035,742,535.09 30,784,241,211.21
Bonds payable
Including: Preferred share
Perpetual bond
Lease liabilities V. 43 767,007,951.92 146,836,620.66
Long-term payables V. 44 27,028,498.30 104,644,415.20
Long-term payroll payable V. 45 195,057,663.00 175,712,728.00
Estimated liabilities
Deferred income V. 46 3,527,855,598.12 3,340,211,330.23
Deferred income tax liabilities V. 28 2,871,757,157.58 2,271,138,444.62
Other non-current liabilities
Total non-current liabilities 46,424,449,404.01 36,822,784,749.92
Total liabilities 247,407,749,159.93 253,194,721,565.51
Shareholders' equity:
Share capital V. 47 5,631,405,741.00 5,631,405,741.00
Other equity instruments
Including: Preferred share
Perpetual bond
Capital reserves V. 48 1,352,522,393.67 496,102,011.66
Less: Treasury share V. 49 4,942,723,911.44 5,643,935,587.86
Other comprehensive income V. 50 275,538,293.30 2,042,901,605.04
Special reserves V. 51 26,969,643.44 25,845,351.28
Surplus reserves V. 52 1,731,130,024.40 2,241,118,692.92
General risk provisions V. 53 507,223,117.40 507,223,117.40
Undistributed profits V. 54 112,211,650,801.62 91,458,073,960.81
Total equity attributable to shareholders of
116,793,716,103.39 96,758,734,892.25
the parent company
Minority equity 3,852,437,313.05 5,117,313,121.94
Total equity 120,646,153,416.44 101,876,048,014.19
Total liabilities and shareholders' equity 368,053,902,576.37 355,070,769,579.70
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 158 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Income Statement
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
Item Note 2023 2022
I. Total operating revenue 205,018,123,834.21 190,150,672,542.13
Including: Operating revenue V. 55 203,979,266,387.09 188,988,382,706.68
Interest income V. 56 1,038,856,837.77 1,162,289,741.08
Fee and commission income 609.35 94.37
II. Total operating costs 170,774,052,191.66 162,107,253,847.61
Including: Operating costs V. 55 141,625,549,746.95 139,784,387,882.78
Interest expense V. 56 126,399,291.44 82,118,835.96
Fee and commission expenses 503,529.63 423,034.83
Taxes and surcharges V. 57 2,114,184,492.83 1,612,243,409.40
Sales expenses V. 58 17,129,639,682.51 11,285,451,112.27
Administrative expenses V. 59 6,542,161,037.82 5,267,999,733.62
R&D expenses V. 60 6,762,136,262.23 6,281,394,430.40
Financial expenses V. 61 -3,526,521,851.75 -2,206,764,591.65
Including: Interest expenses 2,962,205,439.75 2,836,743,431.08
Interest income 6,189,969,897.82 4,646,747,718.69
Add: Other income V. 62 900,669,135.95 879,809,512.05
Income from investments (losses expressed with "") V. 63 217,156,605.23 86,883,941.74
Including: Investment income from joint ventures or associates 93,222,443.16 -3,324,287.24
Income from the derecognition of financial assets measured at
amortization costs
Income from net exposure hedging (losses expressed with "")
Income from changes in fair value (losses expressed with "-") V. 64 437,583,988.72 -343,575,705.11
Credit impairment losses (losses expressed with "") V. 65 -824,045,112.30 -416,368,773.22
Asset impairment losses (losses expressed with "") V. 66 -2,493,579,694.08 -966,679,009.51
Income from disposal of assets (losses expressed with "") V. 67 382,923,791.69 608,425.71
III. Operating profits (losses expressed with "") 32,864,780,357.76 27,284,097,086.18
Add: Non-operating revenue V. 68 128,371,808.52 59,810,331.36
Less: Non-operating expenses V. 69 177,448,328.09 126,522,574.93
IV. Total profits (total losses expressed with "") 32,815,703,838.19 27,217,384,842.61
Less: Income tax expenses V. 70 5,096,680,924.60 4,206,040,489.50
IV. Net profit (net losses expressed with "") 27,719,022,913.59 23,011,344,353.11
(I) Classification by business continuity:
1. Net profits from continuing operations (net losses expressed with "") 27,719,217,635.33 23,011,552,161.18
2. Net profits from discontinuing operations (net losses expressed with "") -194,721.74 -207,808.07
(II) Classification by ownership:
1. Net profits attributable to shareholders of the parent company (net losses
29,017,387,604.18 24,506,623,782.46
expressed with "")
2. Minority profits and losses (net losses expressed with "") -1,298,364,690.59 -1,495,279,429.35
VI. Net of tax of other comprehensive income V. 50 -1,335,306,322.73 -9,157,870,577.73
(I) Net of tax of other comprehensive income attributable to shareholders of the
-1,353,437,738.42 -9,161,102,750.23
parent company
1. Other comprehensive income that cannot be reclassified into profits and losses -1,419,870,672.10 -9,426,072,167.28
(1) Changes arising from remeasurement of the defined benefit plan -15,837,466.00 -8,601,949.00
(2) Other comprehensive income that cannot be transferred to profits and losses
-852,472,209.72 -4,749,379,513.24
under the equity method
(3) Changes in fair value of other equity instrument investments -551,560,996.38 -4,668,090,705.04
(4) Changes in fair value of the Company's own credit risk
(5) Others
2. Other comprehensive income to be reclassified into profits and losses 66,432,933.68 264,969,417.05
(1) Other comprehensive income that can be transferred to profits and losses under
160,652.18
the equity method
(2) Changes in fair value of other debt investments 5,646,351.69 51,928,741.98
(3) Amount of financial assets reclassified into and included in other comprehensive
income
(4) Provision for credit impairment of other debt investments 2,753,149.69 -3,667,360.51
(5) Cash flow hedging reserves 1,650,685.72 -24,846,643.18
(6) Difference arising from translation of financial statements in foreign currency 56,222,094.40 241,554,678.76
(7) Others
(II) Net of tax of other comprehensive income attributable to minority shareholders 18,131,415.69 3,232,172.50
VII. Total comprehensive income 26,383,716,590.86 13,853,473,775.38
(I) Total comprehensive income attributable to shareholders of the parent company 27,663,949,865.76 15,345,521,032.23
(II) Total comprehensive income attributable to minority shareholders -1,280,233,274.90 -1,492,047,256.85
VIII. Earnings per share:
(I) Basic earnings per share (yuan/share) 5.22 4.43
(II) Diluted earnings per share (yuan/share) 5.22 4.43
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 159 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Cash Flow Statement
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
Item Note 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of services 222,450,716,185.76 191,722,692,750.88
Net increase in deposits from customers and interbank 35,681,305.16 36,042,751.33
Net increase in borrowings from the central bank
Net increase in loans from other banks -300,000,000.00
Cash received for interests, fees and commissions 404,330,867.02 316,385,822.75
Net increase in loans from other banks
Net increase in repurchase business capital -746,500,000.00
Refund of taxes and levies 3,267,420,421.11 3,671,277,018.74
Other cash received related to operating activities V. 71 (1) 2,838,768,145.79 3,887,782,462.69
Subtotal of cash inflows from operating activities 228,996,916,924.84 198,587,680,806.39
Cash payments for goods acquired and services received 122,277,671,203.25 140,307,498,966.97
Net increase in customer loans and advances 3,751,715,000.00 -3,541,760,000.00
Net increase in deposits with central bank and interbank funds 121,006,301.94 -142,968,622.64
Net increase in lending funds
Cash paid for interests, fees and commissions 126,487,510.44 72,151,067.99
Cash paid to and on behalf of employees 11,191,368,139.74 10,236,422,672.26
Payments of all types of taxes 17,572,921,744.39 12,501,020,989.21
Other cash paid related to operating activities V. 71 (1) 17,557,320,670.91 10,486,879,811.33
Subtotal of cash outflows from operating activities 172,598,490,570.67 169,919,244,885.12
Net cash flows from operating activities 56,398,426,354.17 28,668,435,921.27
II. Cash flows from investment activities:
Cash received from the recovery of investment V. 71 (2) 21,852,693,438.10 6,897,604,278.47
Cash received from return on investment 688,434,561.28 96,017,802.71
Net cash received from the disposal of fixed assets, intangible assets 1,931,290,335.02 22,767,686.65
Net cash received assets
and other long-termfrom the disposal of subsidiaries and other business 35,000,000.00 67,258,353.52
units cash received related to investment activities
Other V. 71 (2) 24,715,882,326.50 3,443,556,899.78
Subtotal of cash inflows from investment activities 49,223,300,660.90 10,527,205,021.13
Cash paid for the purchase and construction of fixed assets, intangible 5,425,734,302.92 6,036,136,315.75
Cash paid for long-term
assets and otherinvestmentsassets V. 71 (2) 84,267,244,633.47 13,467,910,481.50
Net cash paid for acquisition of subsidiaries and other business units 239,342,398.39 2,031,361,368.42
Other cash paid related to investment activities V. 71 (2) 308,198,670.53 26,048,629,646.87
Subtotal of cash outflows from investment activities 90,240,520,005.31 47,584,037,812.54
Net cash flows from investment activities -41,017,219,344.41 -37,056,832,791.41
III. Cash flows from financing activities:
Cash received from absorbing investment 32,000,000.00
Including: Cash received from subsidiaries absorbing minority 32,000,000.00
shareholder investments
Cash received from borrowings V. 71 (3) 68,622,584,547.14 102,926,746,831.03
Other cash received related to financing activities V. 71 (3) 20,203,186,178.80 20,000,000.00
Subtotal of cash inflows from financing activities 88,825,770,725.94 102,978,746,831.03
Cash repayments of amounts borrowed V. 71 (3) 87,009,692,089.60 60,908,105,526.39
Cash paid for dividend and profit distribution or interest payment 13,811,350,664.09 18,469,103,441.58
Including: Dividends and profits paid to minority shareholders by 111,193,450.56 49,000,000.00
subsidiaries paid related to financing activities
Other cash V. 71 (3) 4,362,544,531.09 13,678,745,549.95
Subtotal of cash outflows from financing activities 105,183,587,284.78 93,055,954,517.92
Net cash flows from financing activities -16,357,816,558.84 9,922,792,313.11
IV. Effect of foreign exchange rate changes on cash and cash 136,149,039.88 268,517,494.64
equivalents
V. Net increase in cash and cash equivalents -840,460,509.20 1,802,912,937.61
Add: Beginning balance of cash and cash equivalents 31,754,656,695.61 29,951,743,758.00
VI. Ending balance of cash and cash equivalents 30,914,196,186.41 31,754,656,695.61
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 160 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Statement of Changes in Shareholders’ Equity
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
2023
Equity attributable to shareholders of the parent company
Other equity
Item instruments
Minority equity Total equity
Other comprehensive General risk Other
Share capital Perpe Capital reserves Less: Treasury share Special reserves Surplus reserves Undistributed profits Subtotal
Preferre income provisions s
tual Others
d share
bond
I. Ending balance of the previous year 5,631,405,741.00 496,102,011.66 5,643,935,587.86 2,042,901,605.04 25,845,351.28 2,241,118,692.92 507,223,117.40 91,458,073,960.81 96,758,734,892.25 5,117,313,121.94 101,876,048,014.19
Add: Changes in accounting policies
Early error correction
Business combination under common
control
Others
II. Beginning balance of the current year 5,631,405,741.00 496,102,011.66 5,643,935,587.86 2,042,901,605.04 25,845,351.28 2,241,118,692.92 507,223,117.40 91,458,073,960.81 96,758,734,892.25 5,117,313,121.94 101,876,048,014.19
III. Increase or decrease in the current
856,420,382.01 -701,211,676.42 -1,767,363,311.74 1,124,292.16 -509,988,668.52 20,753,576,840.81 20,034,981,211.14 -1,264,875,808.89 18,770,105,402.25
year (decrease expressed with "")
(I) Total comprehensive income -1,353,437,738.42 29,017,387,604.18 27,663,949,865.76 -1,280,233,274.90 26,383,716,590.86
(II) Capital invested and reduced by
856,420,382.01 -701,211,676.42 -3,255,546,661.73 -313,591,772.67 -2,011,506,375.97 120,317,891.30 -1,891,188,484.67
shareholders
1. Ordinary shares invested by
49,000.00 49,000.00
shareholders
2. Capital invested by holders of other
equity instruments
3. Amount of share-based payments
1,411,326,160.71 1,411,326,160.71 1,873,850.53 1,413,200,011.24
recognized in shareholders' equity
4. Others -554,905,778.70 -701,211,676.42 -3,255,546,661.73 -313,591,772.67 -3,422,832,536.68 118,395,040.77 -3,304,437,495.91
(III) Profit distribution 2,704,897,285.76 -8,318,738,898.76 -5,613,841,613.00 -111,193,450.56 -5,725,035,063.56
1. Withdrawal of surplus reserves 2,704,897,285.76 -2,704,897,285.76
2. Withdrawal of general risk provisions
3. Distribution to shareholders -5,613,841,613.00 -5,613,841,613.00 -111,193,450.56 -5,725,035,063.56
4. Others
(IV) Internal carry-over of shareholders'
-413,925,573.32 40,660,707.45 368,519,908.06 -4,744,957.81 -4,744,957.81
equity
1. Transfer of capital reserves into capital
(or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves for making up losses
4. Changes in defined benefit plan
carried forward to retained earnings
5. Other comprehensive income carried
-413,925,573.32 40,660,707.45 368,519,908.06 -4,744,957.81 -4,744,957.81
forward to retained earnings
6. Others
(V) Special reserves 1,124,292.16 1,124,292.16 6,233,025.27 7,357,317.43
1. Withdrawal in the current period 5,017,397.69 5,017,397.69 6,563,685.31 11,581,083.00
2. Amount used in the current period 3,893,105.53 3,893,105.53 330,660.04 4,223,765.57
(VI) Others
IV. Ending balance of this year 5,631,405,741.00 1,352,522,393.67 4,942,723,911.44 275,538,293.30 26,969,643.44 1,731,130,024.40 507,223,117.40 112,211,650,801.62 116,793,716,103.39 3,852,437,313.05 120,646,153,416.44
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 161 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
2022
Equity attributable to shareholders of the parent company
Item Other equity
instruments Minority equity Total equity
Other comprehensive General risk Other
Share capital Perpe Capital reserves Less: Treasury share Special reserves Surplus reserves Undistributed profits Subtotal
Preferre income provisions s
tual Others
d share
bond
I. Ending balance of the previous year 5,914,469,040.00 125,874,127.56 19,579,646,233.43 11,204,004,355.27 22,403,846.26 1,983,727,107.74 505,599,356.30 103,475,223,000.17 103,651,654,599.87 4,273,796,566.64 107,925,451,166.51
Add: Changes in accounting policies
Early error correction
Business combination under common
control
Others
II. Beginning balance of the current year 5,914,469,040.00 125,874,127.56 19,579,646,233.43 11,204,004,355.27 22,403,846.26 1,983,727,107.74 505,599,356.30 103,475,223,000.17 103,651,654,599.87 4,273,796,566.64 107,925,451,166.51
III. Increase or decrease in the current
-283,063,299.00 370,227,884.10 -13,935,710,645.57 -9,161,102,750.23 3,441,505.02 257,391,585.18 1,623,761.10 -12,017,149,039.36 -6,892,919,707.62 843,516,555.30 -6,049,403,152.32
year (decrease expressed with "")
(I) Total comprehensive income -9,118,287,340.45 24,506,623,782.46 15,388,336,442.01 -1,488,212,820.78 13,900,123,621.23
(II) Capital invested and reduced by
-283,063,299.00 370,227,884.10 -13,935,710,645.57 -1,983,727,107.74 -12,097,640,969.32 -58,492,846.39 2,387,192,801.09 2,328,699,954.70
shareholders
1. Ordinary shares invested by
32,000,000.00 32,000,000.00
shareholders
2. Capital invested by holders of other
equity instruments
3. Amount of share-based payments
370,227,884.10 370,227,884.10 352,740.48 370,580,624.58
recognized in shareholders' equity
4. Others -283,063,299.00 -13,935,710,645.57 -1,983,727,107.74 -12,097,640,969.32 -428,720,730.49 2,354,840,060.61 1,926,119,330.12
(III) Profit distribution 2,237,070,151.57 1,623,761.10 -24,462,568,724.67 -22,223,874,812.00 -61,203,558.59 -22,285,078,370.59
1. Withdrawal of surplus reserves 2,237,070,151.57 -2,237,070,151.57
2. Withdrawal of general risk provisions 1,623,761.10 -1,623,761.10
3. Distribution to shareholders -22,223,874,812.00 -22,223,874,812.00 -61,203,558.59 -22,285,078,370.59
4. Others
(IV) Internal carry-over of shareholders'
-42,815,409.78 4,048,541.35 36,436,872.17 -2,329,996.26 -2,329,996.26
equity
1. Transfer of capital reserves into
capital (or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves for making up losses
4. Changes in defined benefit plan
carried forward to retained earnings
5. Other comprehensive income carried
-42,815,409.78 4,048,541.35 36,436,872.17 -2,329,996.26 -2,329,996.26
forward to retained earnings
6. Others
(V) Special reserves 3,441,505.02 3,441,505.02 5,740,133.58 9,181,638.60
1. Withdrawal in the current period 6,207,315.33 6,207,315.33 6,367,313.24 12,574,628.57
2. Amount used in the current period 2,765,810.31 2,765,810.31 627,179.66 3,392,989.97
(VI) Others
IV. Ending balance of this year 5,631,405,741.00 496,102,011.66 5,643,935,587.86 2,042,901,605.04 25,845,351.28 2,241,118,692.92 507,223,117.40 91,458,073,960.81 96,758,734,892.25 5,117,313,121.94 101,876,048,014.19
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 162 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Balance Sheet of Company
December 31, 2023
Prepared by: Gree Electric Appliances, Inc.
Unit: yuan (RMB)
of Zhuhai
Item Note December 31, 2023 January 1, 2023
Current assets:
Monetary funds 108,942,922,385.17 138,498,302,123.84
Trading financial assets 9,239,143,613.00 3,826,643,235.64
Derivative financial assets 95,917,736.67
Notes receivable
Accounts receivable XVI. 1 5,005,378,177.86 2,811,623,322.77
Receivables financing 7,524,899,223.47 24,888,338,026.70
Advance payments 30,848,777,000.48 28,967,607,814.23
Other receivables XVI. 2 4,860,219,830.31 3,602,220,649.55
Including: Interests receivable
Dividends receivable
Inventory 6,554,892,982.74 9,662,044,202.39
Contract assets
Assets held for sale
Non-current assets due within one year 2,275,251,779.59 3,275,847,602.74
Other current assets 21,109,801,963.63 2,524,365,397.75
Total current assets 196,457,204,692.92 218,056,992,375.61
Non-current assets:
Debt investment 1,150,744,482.05 150,351,500.00
Other debt investments 15,167,794,246.58 13,312,747,743.53
Long-term receivables
Long-term equity investments XVI. 3 29,745,489,074.58 29,292,448,754.90
Other equity instrument investments 3,720,140,478.30 4,498,529,086.64
Other non-current financial assets 4,428,003,204.49
Investment real estate 15,267,230.92 17,569,355.86
Fixed assets 1,920,285,695.06 3,291,354,893.44
Construction in progress 827,683,995.65 460,979,229.34
Usufruct assets
Intangible assets 538,236,487.90 823,495,905.07
Development expenditures
Goodwill
Long-term unamortized expenses
Deferred income tax assets 12,918,181,096.41 11,399,848,879.09
Other non-current assets 39,079,582,229.05 897,709,314.22
Total non-current assets 105,083,405,016.50 68,573,037,866.58
Total assets 301,540,609,709.42 286,630,030,242.19
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 163 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Balance Sheet of Company (Continued)
December 31, 2023
Prepared by: Gree Electric Appliances, Inc.
Unit: yuan (RMB)
of Zhuhai
Item Note December 31, 2023 January 1, 2023
Current liabilities:
Short-term borrowings 14,746,805,059.21 39,282,170,543.24
Transaction financial liabilities
Derivative financial liabilities 4,079,919.91 36,789,650.89
Notes payable 20,930,759,577.37 35,967,986,466.43
Accounts payable 56,619,857,856.76 49,009,643,905.62
Advance receipts
Contract liabilities 8,477,695,446.71 9,160,537,495.63
Payroll payable 1,538,244,958.36 1,584,146,109.11
Taxes and dues payable 2,617,451,988.73 2,053,684,659.63
Other payables 3,127,041,358.88 8,044,168,532.69
Including: Interests payable
Dividends payable 602,881.87 5,614,444,494.87
Liabilities held for sale
Non-current liabilities due within one year 19,446,383,711.42
Other current liabilities 59,082,715,501.14 55,848,213,083.79
Total current liabilities 186,591,035,378.49 200,987,340,447.03
Non-current liabilities:
Long-term borrowings 36,308,065,111.81 27,272,830,327.56
Bonds payable
Including: Preferred share
Perpetual bond
Lease liabilities
Long-term payables
Long-term payroll payable 195,057,663.00 175,712,728.00
Estimated liabilities
Deferred income 143,416,179.21 81,520,036.95
Deferred income tax liabilities 1,306,743,893.80 710,194,350.26
Other non-current liabilities
Total non-current liabilities 37,953,282,847.82 28,240,257,442.77
Total liabilities 224,544,318,226.31 229,227,597,889.80
Shareholders' equity:
Share capital 5,631,405,741.00 5,631,405,741.00
Other equity instruments
Including: Preferred share
Perpetual bond
Capital reserves 1,893,049,118.18 479,849,106.94
Less: Treasury share 4,942,723,911.44 5,643,935,587.86
Other comprehensive income 585,972,104.35 2,390,383,701.31
Special reserves
Surplus reserves 2,742,389,179.65 2,240,943,653.27
Undistributed profits 71,086,199,251.37 52,303,785,737.73
Total equity 76,996,291,483.11 57,402,432,352.39
Total liabilities and shareholders' equity 301,540,609,709.42 286,630,030,242.19
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 164 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Income Statement of Company
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
Item Note 2023 2022
I. Operating revenue XVI. 4 134,653,638,564.88 119,790,450,591.45
Less: Operating costs XVI. 4 87,964,474,582.78 84,193,036,470.44
Taxes and surcharges 859,092,997.83 612,252,827.55
Sales expenses 15,103,736,810.10 10,387,387,452.52
Administrative expenses 1,821,653,380.75 1,052,070,843.18
R&D expenses 5,011,334,301.81 4,858,805,454.26
Financial expenses -3,106,751,273.76 -2,676,657,645.12
Including: Interest expenses 2,614,299,954.46 2,088,897,062.24
Interest income 6,174,406,252.36 4,994,497,152.18
Add: Other income 51,153,924.37 197,947,953.08
Income from investments (losses expressed with "") XVI. 5 4,277,964,743.44 3,978,824,626.50
Including: Investment income from joint ventures or associates -6,685,965.10 -13,564,461.54
Income from the derecognition of financial assets measured at
amortization costs
Income from net exposure hedging (losses expressed with "")
Income from changes in fair value (losses expressed with "-") 225,560,468.94 -21,732,079.44
Credit impairment losses (losses expressed with "") -143,073,661.64 29,008,430.71
Asset impairment losses (losses expressed with "") -1,011,653,917.67 -116,830,227.19
Income from disposal of assets (losses expressed with "") 385,145,031.19 -12,890.45
II. Operating profits (losses expressed with "") 30,785,194,354.00 25,430,761,001.83
Add: Non-operating revenue 69,675,985.99 9,279,405.22
Less: Non-operating expenses 2,865,046.70 2,780,548.68
III. Total profits (total losses expressed with "") 30,852,005,293.29 25,437,259,858.37
Less: Income tax expenses 3,803,032,435.67 3,066,558,342.67
IV. Net profit ("" for net loss) 27,048,972,857.62 22,370,701,515.70
1. Net profits from continuing operations (net losses expressed with "") 27,048,972,857.62 22,370,701,515.70
2. Net profits from discontinuing operations (net losses expressed with "")
V. Net of tax of other comprehensive income -1,393,059,564.60 -9,272,631,892.47
1. Other comprehensive income that cannot be reclassified into profits and losses -1,385,556,900.05 -9,308,453,566.04
(1) Changes arising from remeasurement of the defined benefit plan -15,837,466.00 -8,601,949.00
(2) Other comprehensive income that cannot be transferred to profits and losses
-855,045,750.68 -4,747,875,029.30
under the equity method
(3) Changes in fair value of other equity instrument investments -514,673,683.37 -4,551,976,587.74
(4) Changes in fair value of the Company's own credit risk
(5) Others
2. Other comprehensive income to be reclassified into profits and losses -7,502,664.55 35,821,673.57
(1) Other comprehensive income that can be transferred to profits and losses
under the equity method
(2) Changes in fair value of other debt investments -9,130,605.80 60,670,722.32
(3) Amount of financial assets reclassified into and included in other
comprehensive income
(4) Provision for credit impairment of other debt investments
(5) Cash flow hedging reserves 1,627,941.25 -24,849,048.75
(6) Difference arising from translation of financial statements in foreign currency
(7) Others
VI. Total comprehensive income 25,655,913,293.02 13,098,069,623.23
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 165 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Cash Flow Statement of Company
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: yuan (RMB)
Item Note 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of services 144,179,376,788.30 109,450,181,009.15
Refund of taxes and levies 2,331,542,341.22 1,435,352,776.76
Other cash received related to operating activities 42,036,996,855.66 46,980,196,866.35
Subtotal of cash inflows from operating activities 188,547,915,985.18 157,865,730,652.26
Cash payments for goods acquired and services received 118,570,609,203.77 116,205,098,866.43
Cash paid to and on behalf of employees 3,156,268,049.00 3,092,307,818.11
Payments of all types of taxes 11,257,710,858.48 7,430,521,751.61
Other cash paid related to operating activities 10,627,695,536.89 8,763,205,023.74
Subtotal of cash outflows from operating activities 143,612,283,648.14 135,491,133,459.89
Net cash flows from operating activities 44,935,632,337.04 22,374,597,192.37
II. Cash flows from investment activities:
Cash received from the recovery of investment 21,792,641,532.16 6,392,709,278.47
Cash received from return on investment 761,944,706.94 100,686,978.57
Net cash received from the disposal of fixed assets, intangible assets
1,518,775,880.59 6,678.00
and other long-term assets
Net cash received from the disposal of subsidiaries and other business
units
Other cash received related to investment activities 17,579,810,310.30 3,859,149,215.21
Subtotal of cash inflows from investment activities 41,653,172,429.99 10,352,552,150.25
Cash paid for the purchase and construction of fixed assets, intangible
535,255,593.94 1,310,618,056.46
assets and other long-term assets
Cash paid for investments 81,994,120,506.79 13,307,412,872.29
Net cash paid for acquisition of subsidiaries and other business
2,423,031,350.00
units
Other cash paid related to investment activities 4,190,445,611.95 27,971,602,744.39
Subtotal of cash outflows from investment activities 86,719,821,712.68 45,012,665,023.14
Net cash flows from investment activities -45,066,649,282.69 -34,660,112,872.89
III. Cash flows from financing activities:
Cash received from absorbing investment
Cash received from borrowings 53,605,339,999.39 72,179,295,627.37
Other cash received related to financing activities 9,273,478,862.85 2,320,913,943.00
Subtotal of cash inflows from financing activities 62,878,818,862.24 74,500,209,570.37
Cash repayments of amounts borrowed 55,186,410,550.58 29,745,813,719.56
Cash paid for dividend and profit distribution or interest payment 13,409,157,688.67 18,022,950,452.52
Other cash paid related to financing activities 3,390,981,384.42 15,019,655,898.35
Subtotal of cash outflows from financing activities 71,986,549,623.67 62,788,420,070.43
Net cash flows from financing activities -9,107,730,761.43 11,711,789,499.94
IV. Effect of foreign exchange rate changes on cash and cash
-137,818,393.05 161,480,573.74
equivalents
V. Net increase in cash and cash equivalents -9,376,566,100.13 -412,245,606.84
Add: Beginning balance of cash and cash equivalents 19,554,231,293.07 19,966,476,899.91
VI. Ending balance of cash and cash equivalents 10,177,665,192.94 19,554,231,293.07
Legal representative: Person in charge of accounting work: Person in charge of the accounting agency:
Page 166 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Statement of Changes in Shareholders’ Equity of Company
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: RMB
2023
Other equity instruments
Item Less: Treasury Other comprehensive Special Undistributed
Share capital Preferred Perpetual Capital reserves Surplus reserves Total equity
Others share income reserves profits
share bond
I. Ending balance of the previous year 5,631,405,741.00 479,849,106.94 5,643,935,587.86 2,390,383,701.31 2,240,943,653.27 52,303,785,737.73 57,402,432,352.39
Add: Changes in accounting policies
Early error correction
Others
II. Beginning balance of the current year 5,631,405,741.00 479,849,106.94 5,643,935,587.86 2,390,383,701.31 2,240,943,653.27 52,303,785,737.73 57,402,432,352.39
III. Increase or decrease in the current
1,413,200,011.24 -701,211,676.42 -1,804,411,596.96 501,445,526.38 18,782,413,513.64 19,593,859,130.72
year (decrease expressed with "")
(I) Total comprehensive income -1,393,059,564.60 27,048,972,857.62 25,655,913,293.02
(II) Capital invested and reduced by -
1,413,200,011.24 -701,211,676.42 -313,766,812.32 -443,467,591.49
shareholders 2,244,112,466.83
1. Ordinary shares invested by shareholders
2. Capital invested by holders of other equity
instruments
3. Amount of share-based payments
1,413,200,011.24 1,413,200,011.24
recognized in shareholders' equity
-
4. Others -701,211,676.42 -313,766,812.32 -1,856,667,602.73
2,244,112,466.83
(III) Profit distribution 2,704,897,285.76 -8,318,738,898.76 -5,613,841,613.00
1. Withdrawal of surplus reserves 2,704,897,285.76 -2,704,897,285.76
2. Distribution to shareholders -5,613,841,613.00 -5,613,841,613.00
3. Others
(IV) Internal carry-over of shareholders'
-411,352,032.36 40,660,707.45 365,946,367.10 -4,744,957.81
equity
1. Transfer of capital reserves into capital (or
share capital)
2. Transfer of surplus reserves into capital (or
share capital)
3. Surplus reserves for making up losses
4. Changes in defined benefit plan carried
forward to retained earnings
5. Other comprehensive income carried
-411,352,032.36 40,660,707.45 365,946,367.10 -4,744,957.81
forward to retained earnings
6. Others
(V) Special reserves
1. Withdrawal in the current period
2. Amount used in the current period
(VI) Others
IV. Ending balance of this year 5,631,405,741.00 1,893,049,118.18 4,942,723,911.44 585,972,104.35 2,742,389,179.65 71,086,199,251.37 76,996,291,483.11
Legal Representative: Chief Accountant: Head of Accounting Department:
Page 167 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Statement of Changes in Shareholders’ Equity of Company (Continued)
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: RMB
2022
Other equity instruments
Item Capital Less: Treasury Other comprehensive Special Undistributed
Share capital Preferred Perpetual Surplus reserves Total equity
Others reserves share income reserves profits
share bond
I. Ending balance of the previous year 5,914,469,040.00 109,621,222.84 19,579,646,233.43 11,663,015,593.78 1,983,727,107.74 66,028,087,909.15 66,119,274,640.08
Add: Changes in accounting policies
Early error correction
Others
II. Beginning balance of the current
5,914,469,040.00 109,621,222.84 19,579,646,233.43 11,663,015,593.78 1,983,727,107.74 66,028,087,909.15 66,119,274,640.08
year
III. Increase or decrease in the current
-283,063,299.00 370,227,884.10 -13,935,710,645.57 -9,272,631,892.47 257,216,545.53 -13,724,302,171.42 -8,716,842,287.69
year (decrease expressed with "")
(I) Total comprehensive income -9,231,566,879.24 22,370,701,515.70 13,139,134,636.46
(II) Capital invested and reduced by -
-283,063,299.00 370,227,884.10 -13,935,710,645.57 -11,668,920,238.83 370,227,884.10
shareholders 1,983,727,107.74
1. Ordinary shares invested by
shareholders
2. Capital invested by holders of other
equity instruments
3. Amount of share-based payments
370,227,884.10 370,227,884.10
recognized in shareholders' equity
-
4. Others -283,063,299.00 -13,935,710,645.57 -11,668,920,238.83
1,983,727,107.74
-
(III) Profit distribution 2,237,070,151.57 -24,460,944,963.57
22,223,874,812.00
1. Withdrawal of surplus reserves 2,237,070,151.57 -2,237,070,151.57
-
2. Distribution to shareholders -22,223,874,812.00
22,223,874,812.00
3. Others
(IV) Internal carry-over of
-41,065,013.23 3,873,501.70 34,861,515.28 -2,329,996.25
shareholders' equity
1. Transfer of capital reserves into capital
(or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves for making up losses
4. Changes in defined benefit plan carried
forward to retained earnings
5. Other comprehensive income carried
-41,065,013.23 3,873,501.70 34,861,515.28 -2,329,996.25
forward to retained earnings
6. Others
(V) Special reserves
1. Withdrawal in the current period
2. Amount used in the current period
(VI) Others
IV. Ending balance of this year 5,631,405,741.00 479,849,106.94 5,643,935,587.86 2,390,383,701.31 2,240,943,653.27 52,303,785,737.73 57,402,432,352.39
Legal Representative: Chief Accountant: Head of Accounting Department:
Page 168 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree Electric Appliances, Inc. of Zhuhai
Notes to 2023 Financial Statements
I. Basic information of the Company
Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as "the Company") was founded in
December 1989, with the unified social credit code of 91440400192548256N.
As of December 31, 2023, the registered capital and share capital of the Company was
RMB5,631,405,741.00. Please refer to Note “V. 47. Share” capital for details of the share capital.
Registered address, organizational form and address of the Company
The organizational form of the Company: a company limited by shares
The Company's registered address and headquarters address: Room 608, No. 108 Huitong Third Road,
Hengqin New Area, Zhuhai
Nature of business and main business activities of the Company
The Company is a manufacturing enterprise mainly engaged in the production and sales of air-
conditioners and their accessories, as well as home appliances and their accessories.
Names of the parent company and the ultimate parent company
As of December 31, 2023, the Company had no parent company and no actual controller.
Approved submitter and approved submission date of the financial statements
This financial report was submitted under approval by the Board of Directors of the Company as of April
29, 2024.
II. Preparation basis of financial statements
Preparation basis
The Company prepares the financial statements on the basis of a going concern and according to the
transactions and events actually incurred and the disclosure provisions in the Accounting Standards for
Business Enterprises Basic Standards (promulgated by the Ministry of Finance Order No. 33, revised by
the Ministry of Finance Order No.76) and the specific accounting standards, the Implementation Guide for
the Accounting Standards for Business Enterprises, the Interpretations of the Accounting Standards for
Business Enterprises and other applicable regulations promulgated and revised by the Ministry of Finance
on and after February 15, 2006 (collectively referred to as the "Accounting Standards for Business
Enterprises"), as well as the Preparation Rules for Information Disclosure by Companies Offering
Securities to the Public No. 15 General Provisions on Financial Reports (Revised in 2023) promulgated
by China Securities Regulatory Commission ("CSRC").
Page 169 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
According to the relevant provisions of the Accounting Standards for Business Enterprises, the Company's
accounting is based on an accrual basis. Except for certain financial instruments, the financial statements
are measured on the basis of historical cost. If an asset is impaired, the corresponding impairment provision
shall be made in accordance with relevant regulations.
Going concern
The financial statements were presented on a going-concern basis. The management carefully evaluated
factors of the Company in the future 12 months since December 31, 2023 such as the macro policy risk,
market operation risk, current and long-term profitability and solvency of the enterprise, financial
flexibility, and the management's intention of changing the operation policy, and held that no event can
generate significant influence on the Company's ability to continue as a going concern.
III. Major accounting policies and accounting estimates
Specific accounting policies and accounting estimate suggestions:
The Company and its subsidiaries are mainly engaged in the production and sales of air-conditioners and
their accessories, as well as home appliances and their accessories. The Company has prepared several
specific accounting policies and accounting estimates for transactions and events such as revenue
recognition based on the actual production management characteristics and in accordance with
provisions of the related Accounting Standards for Business Enterprises. For details, see the detailed
description in Note III herein.
Statements regarding observance of the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises and give a true and complete view of the financial position of the
Company on December 31, 2023, and the related information such as operating results and cash flows in
2023. Besides, the financial statements prepared by the Company, in all the major aspects, also conform to
the disclosure requirements of financial statements and their notes in the Preparation Rules for Information
Disclosure by Companies Offering Securities to the Public No. 15 revised by the China Securities
Regulatory Commission, as revised in 2023.
Accounting period
The accounting period of the Company includes one year and interim periods. An interim period covers
six-month, a quarter and a month. The accounting year of the Company commences on January 1 and ends
on December 31 of each year.
Operating cycle
The normal operating cycle refers to the period from the Company's purchase of assets used for processing
to achieving of cash or cash equivalent. The Company regards 12 months as one operating cycle and uses it
as the liquidity classification standard for assets and liabilities.
Page 170 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Functional currency
RMB is the functional currency used by the Company. Some subsidiaries of the Company adopt
currencies other than RMB as the functional currency.
Determination method and selection basis of importance criteria
Item Importance Criteria
The amount of accrual by individual item accounts for more
Important receivables with bad debt
than 5% of the ending balance of various receivables and the
reserves accrued by individual item
amount is greater than RMB100 million
The single recovery or reversal amount accounts for more
Recovery or reversal of important
than 5% of the ending balance of various receivables and the
receivables bad debt reserves
amount is greater than RMB100 million
The wrote-off amount accounts for more than 5% of the
Actual write-off of important receivables ending balance of various receivables and the amount is
greater than RMB100 million
Advance payments aged over one-year account for more than
Important advance payments aged over
10% of the ending balance of advance payments and the
one year
amount is greater than RMB100 million
The ending balance of a single project is greater than
Important construction in progress
RMB100 million
Accounts payable/other payables aged over 1 year account
Important accounts payable and other for more than 10% of the ending balance of accounts
payables aged over one year payable/other payables and the amount is greater than
RMB100 million
Contractual liabilities aged over 1 year account for more than
Important contractual liabilities aged
10% of the ending balance of contractual liabilities and the
over one year
amount is greater than RMB100 million
Subsidiary's ending net assets/total ending assets/total
Important non-wholly-owned
current profit account for more than 10% of the Company's
subsidiaries
ending net assets/total ending assets/total current profit
The ending book value of long-term equity investments in a
single investee accounts for more than 5% of the Company's
Important joint ventures or associates ending net assets, or the current investment profit and loss
under the equity method accounts for more than 10% of the
Company's consolidated net profit for the current period
Individual investment activities account for more than 10%
Important investment activities of the total cash inflows or outflows related to received or
paid investment activities
Page 171 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Accounting treatment of business combinations involving enterprises under common control and
business combinations not involving enterprises under common control
Business combination refers to the transaction or event of combining two or more independent enterprises
to form a reporting entity. Business combination is classified into business combination involving
enterprises under common control and business combination not involving enterprises under common
control.
(1) Business combination under common control
A business combination under common control is a business combination in which the enterprises
participating in the combination are ultimately controlled by the same party or parties before and after the
combination, and the control is not temporary. For business combinations involving enterprises under
common control, the party that obtains the right to control other enterprises participating in the combination
on the combination date is the combined party, and other enterprises participating in the combination are
the combined party. The combination date refers to the date on which the combining party actually obtains
the right to control the combined party.
Where business combination involving enterprises under common control arises from one transaction or
equities of investees under common control are obtained step by step through multiple transactions and
these transactions belong to a package deal, the Company will recognize the cost of combination according
to the share of carrying amount of net assets obtained for the combined party in the ultimate controlling
party's consolidated financial statements on the combination date. The difference between the carrying
amount of the consideration paid for the combination (or total par value of the issued shares) and the
combination cost is adjusted to capital reserve; if the capital reserve is not sufficient to absorb the
difference, any excess is adjusted against retained earnings.
Costs incurred that are attributable to the business combination made by the Company, including
intermediary costs such as the audit fee, legal service charge appraisal and consultation costs, and other
related overhead expenses are charged to profits and losses in the period in which they are incurred; the
transaction expenses directly attributable to the consideration paid for the combination through the issuance
of equity instruments are credited against the capital reserve; if the capital reserve is not sufficient, any
excess is adjusted against retained earnings; the transaction expenses directly attributable to the
consideration paid for the combination through the issuance of debt instruments are recorded into the
initially recognized amount of debt instruments. Where the equities of investees under common control are
obtained step by step through multiple transactions to achieve a business combination, but these
transactions do not belong to a package deal, the Company will recognize the cost of the combination
according to the share of carrying amount of net assets to be enjoyed by the combined party after the
combination in the ultimate controlling party's consolidated financial statements on the combination date.
The difference between the combination cost and the sum of the carrying amount of long-term equity
investments prior to the combination plus the carrying amount of the consideration newly paid for further
acquisition of shares on the date of combination is adjusted to capital reserve (capital premium or share
capital premium); if the capital reserve is not sufficient to absorb the difference, any excess is adjusted
Page 172 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
against retained earnings. For the equity investment held before the date of combination, accounting
treatment is not performed temporarily for other comprehensive incomes that are accounted for using the
equity method or recognized using financial instruments and accounted according to the measurement
standard for recognition. When this investment is disposed of, accounting treatment is conducted using the
basis the same as that used by the investee to directly dispose of relevant assets or liabilities directly. For
other changes in owners' equities other than the net profits and losses, other comprehensive income and
profit distribution in net assets of the investee that are recognized because of accounting using the equity
method, accounting treatment is not conducted temporarily; they shall be transferred to the profits and
losses of the current period at the time of disposing of this investment.
(2) Business combinations not under common control
A business combination not involving enterprises under common control is a business combination in
which all combining enterprises are not ultimately controlled by the same party or parties both before and
after the combination. For business combinations not involving enterprises under common control, the
party that obtains the right to control other enterprises participating in the combination on the date of
combination is the acquiring party, and other enterprises participating in the combination are the acquired
party. The date of acquisition refers to the date on which the acquiring party actually obtains the right to
control the acquired party.
For the business combination implemented through one transaction, the cost of business combination refers
to the fair value of assets paid, liabilities incurred or assumed, and equity securities issued by the Company
on the date of acquisition for obtaining the right to control the acquired party. On the date of acquisition,
the assets, liabilities and contingent liabilities obtained by the Company from the acquired party are
recognized at fair value.
For a business combination realized by two or more transactions of exchange, the accounting treatment for
the combination costs shall be made by distinguishing individual financial statements and consolidated
financial statements:
In the individual financial statements, where the held shares are accounted using the equity method prior to
the date of acquisition, the cost of the combination of the investment is the aggregate of the carrying
amount of the equity investment of the acquired party held before the date of acquisition and the investment
cost newly increased on the date of acquisition. For other related comprehensive income, accounting
treatment is performed during the disposal of the investment using the basis the same as that used by the
investee to dispose of relevant assets or liabilities directly; the owner's equity that is recognized due to
other changes in owner's equities other than the net profits and losses, other comprehensive income and
profit distribution of the investee is accordingly transferred to the profits and losses of the current period at
the time of disposing of this investment. Where the equity investment held before the date of acquisition is
recognized using financial instruments and undergoes accounting treatment according to the measurement
standard, the cost of the combination of the investment is the aggregate of the fair value of the equity
investment recognized according to this standard and the newly increased investment cost. The difference
between the fair value of the originally held shares and the carrying amount and all the cumulative fair
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value changes originally recorded into other comprehensive income are transferred to the investment
income of the current period.
In the consolidated financial statements, the shares of the acquired party held before the date of acquisition
shall be remeasured based on the fair value of such shares on the date of acquisition, and the difference
between their fair value and the carrying amount shall be charged to the investment income of the current
period; where the shares of the acquired party held before the date of acquisition involve other
comprehensive income under the accounting of the equity method and other changes in owners' equities
other than the net profits and losses, other comprehensive income and profit distribution, other
comprehensive income and other changes in owners' equities concerned with them shall be transferred to
the investment income in the period in which the date of acquisition is included (excluding other
comprehensive income arising from changes in the net assets or net liabilities of the benefit plan
remeasured and redefined by the investee). The summation of the fair value of the shares of the acquired
party held before the date of acquisition on the date of acquisition and newly increased investment costs on
the date of acquisition shall be the combination cost of the investment.
Costs incurred that are attributable to the business combination made by the Company, including
intermediary costs such as the audit fee, legal service charge, appraisal and consultation costs, and other
related overhead expenses are charged to profits and losses in the period in which they are incurred. The
transaction expenses directly attributable to the consideration paid for the combination through the issuance
of equity instruments are credited against the capital reserve; if the capital reserve is not sufficient, any
excess is adjusted against retained earnings; the transaction expenses directly attributable to the
consideration paid for the combination through the issuance of debt instruments are recorded into the
initially recognized amount of debt instruments.
In the Company, the positive balance between the business combination cost and the fair value of the
identifiable net assets obtained by the Company from the acquired party shall be recognized as goodwill
and subsequently measured after the accumulated provision for impairment is deducted from the cost; the
negative balance between the business combination cost and the fair value of the identifiable net assets
obtained by the Company from the acquired party shall be charged to profits and losses of the current
period after being checked.
(3) Principle of judging whether multiple transactions are "a package deal"
When the terms and conditions of multiple transactions and the economic impact thereof accord with one
or more of the following cases, usually it indicates that these transactions shall undergo accounting
treatment as "a package deal":
1) These transactions are concluded at the same time or concluded in consideration of mutual influence;
2) Only the whole of these transactions can achieve a complete business result;
3) The occurrence of one transaction depends on the occurrence of at least one of the other transactions;
4) One transaction is not economical when considered separately but economical when taken into account
together with other transactions.
Preparation of consolidated financial statements
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(1) Principles for determining the scope of consolidated financial statements
The consolidation scope of consolidated financial statements shall be determined on the basis of control.
Control means that the Company owns the power to the investee, enjoys variable return by participating
relevant activities of the investee, and has the capacity of using the power to the investee to affect its return
amount.
(2) Preparation of consolidated financial statements
The Company prepares the consolidated financial statements of the Company are prepared by the Company
based on individual financial statements of the Company and subsidiaries and according to other relevant
data. During the preparation of consolidated financial statements, the accounting policy and accounting
period of the Company shall be consistent with those of subsidiaries, and the inter-company major
transactions and balances shall be offset.
For the subsidiary added due to a business combination involving enterprises under common control in the
Report Period, the Company adjusts the amount at the beginning of the period in the consolidated balance
sheet, incorporates the revenue, expense, and profit of this subsidiary from the beginning of the period for
consolidation to the end of the report period into the consolidated profit statement, includes its cash flow
into the consolidated cash flow statement, and adjusts relevant items in the comparative statements; for the
subsidiary added due to business combination not involving enterprises under common control, the
Company does not adjust the amount at the beginning of the period in the consolidated balance sheet, but
only incorporates the revenue, expense and profit of this subsidiary from the date of acquisition to the end
of the report period into the consolidated profit statement and its cash flow into the consolidated cash flow
statement.
The portion of owners' equity of the subsidiaries that isn't attributable to the Company shall be separately
presented as the minority equity under the owners' equity in the Consolidated Balance Sheet. The portion of
the subsidiary's current net profits and losses attributable to minority equity is presented as the "Minority
profits and losses" item in the Consolidated Income Statement. The share of comprehensive income of the
subsidiaries in the current period that is attributable to the minority equity shall be presented as the item of
"Total comprehensive income attributable to minority shareholders" under the total comprehensive income
in the Consolidated Profit Statement. Where the losses of a subsidiary undertaken by minority shareholders
exceed the share enjoyed by minority shareholders in the owners' equities of this subsidiary at the
beginning of the period, the balance shall still be adjusted against the minority shareholders' equity.
For the acquisition of the subsidiary's shares owned by minority shareholders thereof, in the consolidated
financial statements, the difference between the long-term equity investment newly obtained because of the
acquisition of minority shareholders' shares and the share of net assets of the subsidiary to be enjoyed and
continuously calculated according to the proportion of newly added shares from the acquisition date or
consolidation date is adjusted to capital reserve; if the capital reserve is not sufficient to absorb the
difference, any excess is adjusted against retained earnings.
For the transaction for which a part of equity investment is disposed of but the right to control this
subsidiary is not lost, in the consolidated financial statements, the difference between the disposal price and
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the share of net assets of the subsidiary to be enjoyed accordingly for disposal of the long-term equity
investment and continuously calculated from the acquisition date or consolidation date is adjusted to capital
reserve (capital premium or share capital premium); if the capital reserve is not sufficient to absorb the
difference, any excess is adjusted against retained earnings.
Where the right to control the original subsidiary is lost due to disposal of a part of equity investment or
other reasons, the residual shareholding shall be remeasured at fair value on the date of losing the control
right; the result of the sum of the consideration obtained from the equity disposal plus the fair value of
residual shareholding, minus the share of net assets of the original subsidiary that should be enjoyed and is
continuously calculated according to the original proportion of held shares from the acquisition date, shall
be charged to the investment income in the period when the control right is lost, and adjusted against the
goodwill at the same time; other comprehensive income related to the original subsidiary's equity
investment shall be transferred to the investment income of the current period when the control right is lost.
Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till
the control right is lost and all the transactions belong to a package deal, accounting treatment shall be
performed for the transactions by deeming all the transactions as one item for disposing of the subsidiary
and losing the control right; however, prior to loss of the control right, the difference between every
disposal price and the share of net assets of this subsidiary to be enjoyed accordingly for investment
disposal shall be recognized as other comprehensive income in the consolidated financial statements and, at
the time of losing the control right, be jointly transferred to the profits and losses in the period when the
control right is lost.
Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till
the control right is lost, and the transactions do not belong to a package deal, all the transactions before the
loss of the right to control the subsidiary shall be handled according to the regulations of the Company on
partial disposal of the subsidiary's long-term equity investment provided that the Company does not lose
the right to control the subsidiary.
This report period does not involve buying-in and selling-out of the same subsidiary's equity or selling-out
and buying-in turn.
Classification of joint arrangements and accounting treatment of co-management
Joint arrangement refers to the arrangement for joint control by two or more participants.
(1) Joint arrangement classification
A joint arrangement is classified into co-management and joint venture. Co-management refers to the joint
arrangement where the parties to the venture enjoy relevant assets of this arrangement and assume relevant
liabilities of this arrangement. A joint venture refers to a joint arrangement where the parties to the venture
only enjoy rights to the net assets of this arrangement.
(2) Accounting treatment of co-management
1) The Company recognizes the following items related to the quantum of interest in co-management and
performs accounting treatment in accordance with provisions of the corresponding Accounting Standards
for Business Enterprises:
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a. Independently held assets, as well as the jointly held assets to be recognized according to the share of the
Company;
b. Independently undertaken liabilities, as well as the jointly undertaken liabilities to be recognized
according to the share of the Company;
c. Revenue generated by selling the output share of co-management that is enjoyed by the Company enjoys;
d. Revenue that is generated by selling the output during co-management and recognized according to the
share of the Company;
e. Independently incurred expense, as well as the expense incurred by co-management and recognized
according to the share of the Company.
2) Where the Company puts assets into or sells assets to the parties to co-management (except that the
assets constitute business), before the said assets are sold to a third party by the parties to co-management,
the Company recognizes only the part in the profits and losses arising from this transaction that is
attributable to other participants in the co-management. In case the put or sold assets involve the asset
impairment losses complying with provisions in the Accounting Standards for Business Enterprises No. 8
Impairment of Assets, the Company shall recognize the said loss in full.
Where the Company purchases assets from the parties to co-management (except that the assets constitute
business), before said assets are sold to a third party, the Company recognizes only the part in the profits
and losses arising from this transaction that is attributable to other participants in the co-management. In
case the purchased assets involve asset impairment losses complying with provisions in the Accounting
Standards for Business Enterprises No. 8 Impairment of Assets, the Company shall recognize this part of
loss according to the share to undertake.
Determination criteria for cash and cash equivalents
The cash refers to the enterprise's money on hand and deposits for payment at any time. Cash equivalents
refer to investments held by the enterprise that are short in term (generally referring to those expiring
within not more than 3 months from the date of acquisition), high in liquidity, convertible to the known
amount of cash and insignificant in risk of change of value.
Foreign currency transactions and translation of financial statements in foreign currency
(1) Method of translation for foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the
foreign currency shall be translated into the amount in RMB currency at the spot exchange rate of the
transaction date (generally referring to the medial rate of foreign exchange quotation published by the
People's Bank of China at the date of transaction, the same below).
(2) Treatment of monetary items of foreign currencies and non-monetary items of foreign currencies on
the balance sheet date
For the monetary items of foreign currencies, the translation is done according to the spot rate of the
balance sheet date. The exchange difference generated from the difference between the spot rate of the
current balance sheet date and the time of initial recognition of a foreign currency or the previous balance
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sheet date is charged to the profits and losses of the current period except that the exchange difference
generated from foreign currency borrowings relating to assets of which the acquisition or production
satisfies the capitalization conditions is capitalized in accordance with the Accounting Standards for
Business Enterprises No. 17 Borrowing Costs. For the non-monetary items of foreign currencies
measured by historical cost, translation is done according to the spot rate of the transaction date without
change in their amount in functional currency. Non-monetary items of foreign currencies such as shares
and funds measured at fair value are translated as per the spot rate on the date when their fair value is
confirmed. The differences between the translated amounts in functional currency and the original amounts
in functional currency are recorded into current profits and losses as fluctuations in fair value (including
fluctuation in exchange rates).
(3) Translation of foreign currency financial statements
The Company translates the financial statements expressed in foreign currency into ones expressed in RMB
currency according to the following provisions.
The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance
sheet date, except for the "undistributed profits" item. Other items of owners' equity are converted at the
spot exchange rate at the time of occurrence. The asset and liability items in the balance sheets shall be
translated at an average exchange rate. The difference arising from the translation of financial statements in
foreign currency generated by the above method shall be separately presented under the owner's equity item
in the balance sheet. The foreign currency cash flow statement shall be translated at the average exchange
rate on the cash flow date. The amount of influence of the exchange rate change on cash shall be presented
separately under the adjusted item in the cash flow statement.
Financial instruments
A financial asset or financial liability can be recognized when the Company becomes one party of financial
instrument contract.
(1) Classification, recognition, and measurement of financial assets
According to the business mode for management of the financial assets and the characteristics of the
contractual cash flows of the financial assets, the Company classifies the financial assets as financial assets
measured at amortized cost; financial assets measured at fair value with changes included in other
comprehensive income; financial assets measured at fair value with changes included in the current profits
and losses.
The financial assets initially recognized by the Company shall be measured at fair value. For the financial
assets measured at fair value with changes included in the current profits and losses, the transaction
expenses thereof are directly included in the current profits and losses; for other categories of financial
assets, the transaction expenses thereof are included in the initially recognized amount. For the accounts
receivable or notes receivable arising from the sale of products or the provision of services, which do not
include or consider significant financing components, the initial recognition amount is based on the
expected amount of consideration that the Company is entitled to receive.
1) Financial assets measured at amortization costs
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The Company's business model for managing financial assets measured at amortization cost is to collect
contractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent
with basic borrowing arrangements, that is, cash flows generated on a specific date, are for the payment of
principal and interest based on the outstanding principal amount. The Company adopts the effective interest
rate method for such financial assets and performs subsequent measurement based on amortization cost.
The gains or losses arising from their amortization or impairment are included in the current profits and
losses.
2) Financial assets measured at fair value with changes included in other comprehensive income
The Company's business model for managing such financial assets aims at the collection of contractual
cash flows and sales, and the contractual cash flow characteristics of such financial assets are consistent
with the basic lending arrangements. The company measures such financial assets at fair value and their
changes are recognized in other comprehensive income, but impairment losses or gains, exchange profits
and losses, and interest income calculated using the effective interest rate method are recognized in the
current profits and losses.
In addition, the Company designates some non-transaction equity instrument investments as financial assets
measured at fair value with changes included in other comprehensive income. The Company includes the
relevant dividend income of such financial assets in the current profits and losses with changes in fair value
included in other comprehensive income. When the financial assets are derecognized, the cumulative gains
or losses previously included in other comprehensive income will be transferred from other comprehensive
income to retained income but will not be included in the current profits and losses.
3) Financial assets measured at fair value with changes included in other comprehensive income
The Company classifies financial assets other than those measured at amortized cost and those measured at
fair value with changes included in other comprehensive income as financial assets measured at fair value
with changes included in the current profits and losses In addition, in the initial recognition, in order to
eliminate or significantly reduce the accounting mismatch, the Company designated some financial assets
as financial assets measured at fair value with changes included in the current profits and losses. For such
financial assets, the Company uses fair value for subsequent measurement, and the changes in fair value are
included in the current profits and losses.
(2) Classification, recognition, and measurement of financial liabilities
Financial liabilities are initially classified as financial liabilities measured at fair value with changes
included in the current profits and losses and other financial liabilities. For the financial liabilities measured
at fair value with changes included in the current profits and losses, the transaction expenses thereof are
directly included in the current profits and losses; for other financial liabilities, the transaction expenses
thereof are included in the initially recognized amount.
1) Financial liabilities are measured at fair value with changes included in the current profits and losses
Financial liabilities are measured at fair value with changes included in the current profits and losses,
including transaction financial liabilities (including derivatives that are financial liabilities) and financial
liabilities designated at initial recognition as measured at fair value with changes included in the current
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profits and losses.
Transaction financial liabilities (including derivatives that are financial liabilities) are subsequently
measured at fair value with changes included in the current profits and losses, except for those related to
hedge accounting.
For financial liabilities designated as those measured at fair value at the initial recognition with changes
included in the current profits and losses, the changes of fair value caused by changes in the Company's
own credit risk are included in other comprehensive income, and when the liabilities are derecognized, the
cumulative changes in fair value caused by changes in own credit risk included in other comprehensive
income are transferred to retained earnings. Other changes in fair value are included in current profits and
losses. Suppose the accounting mismatch in profits and losses may be caused or expanded as the effects of
changes in the own credit risk of such financial liabilities are processed in the above manner. In that case,
the Company will include all gains or losses of such financial liabilities (including the amount affected by
changes in the Company's own credit risk) included in the current profit and loss.
2) Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer of financial assets
that do not meet the conditions for derecognition or continue to be involved in the transferred financial
assets, other financial liabilities are classified as financial liabilities measured at amortized cost and are
subsequently measured at amortized cost. Gains or losses arising from derecognition or amortization are
included in the current profits and losses.
(3) Basis for the recognition and method for the measurement of financial assets
Financial assets that meet one of the following conditions shall be derecognized:
1) The contract right to receive the cash flow of the financial assets is terminated;
2) The financial assets have been transferred, and almost all the risks and rewards of ownership of the
financial assets are transferred to the transferring party;
3) The financial assets have been transferred. Although the enterprise has neither transferred nor retained
almost all the risks and rewards of the ownership of the financial assets, it has given up control over the
financial assets.
Suppose the enterprise has neither transferred nor retained almost all the risks and rewards of the ownership
of the financial assets, and has not given up control over the financial assets. In that case, the relevant
financial assets shall be recognized according to the extent of continued involvement in the transferred
financial assets, and the relevant liabilities shall be recognized accordingly. The degree of continued
participation involvement in the transferred financial assets refers to the level of risk faced by the enterprise
due to changes in the value of the financial assets.
Suppose the overall transfer of financial assets meets the conditions for derecognition. In that case, the
difference between the book value of the transferred financial assets and the sum of the consideration
received due to the transfer and the cumulative amount of changes in fair value originally included in other
comprehensive income is included in the current profits and losses.
Suppose the partial transfer of financial assets satisfies the conditions for derecognition. In that case, the
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book value of the transferred financial assets will be apportioned between the portion derecognized, and the
portion not derecognized according to their relative fair values, and the difference between the sum of the
consideration received for the transfer and the amount of cumulative changes in the fair value which was
previously directly recognized in owner's equity and which should be apportioned to the portion
derecognized. The above book amount apportioned will be included in the current profits and losses.
The Company must determine whether almost all the risks and rewards of ownership of the financial assets
have been transferred before endorsing the transfer of financial assets sold by means of recourse and
financial assets held. If almost all the risks and rewards of ownership of the financial asset have been
transferred to the transferee, the financial asset will be derecognized; if the risks and rewards of the
ownership of the financial asset have been retained, the financial asset will not be derecognized; if almost
all the risks and rewards of ownership of the financial asset have not been transferred or retained, the
enterprise needs to continue to determine whether it retains control over the asset and performs accounting
treatment in accordance with the principles described in the preceding paragraphs.
(4) Derecognition of financial liabilities
If the present obligation for a financial liability has been fully or partially discharged, the financial liability
or the relevant portion thereof will be derecognized. Suppose the Company (borrower) signs an agreement
with the lender to replace the original financial liability by assuming a new financial liability, and the
contract terms of the new financial liability and the original financial liability are substantially different. In
that case, original financial liability will be derecognized, and the new financial liability will be recognized
at the same time. Suppose a material amendment is made to the contractual terms for the original financial
liability or the relevant portion thereof. In that case, the original financial liability will be derecognized, and
the new financial liability will be recognized according to the amended terms at the same time.
If the financial liability or the relevant portion thereof is derecognized, the difference between the book
value of the financial liability derecognized, and the consideration paid for it (including the non-cash asset
transferred or the liability assumed) will be included in the current profits and losses.
(5) Offsetting financial assets with financial liabilities
When the Company has the legal right to offset the financial asset and the financial liability with the
recognized amount, and such legal rights are currently enforceable, and the Company plans to settle in the
net or simultaneously realize the financial asset and liquidate the financial liability, the financial asset and
the financial liability will be presented in the balance sheet in net amounts after mutual offset. In addition,
financial assets and financial liabilities are presented separately in the balance sheet and are not offset
against each other.
(6) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive for the sale of an asset or need to pay for
the transfer of a liability in the orderly transaction that occurs on the measurement date. For financial
instruments for which there is an active market, the fair value thereof will be determined by the Company
based on the quotation in the active market. Quotation in the active market refers to the price that is easily
obtained from exchanges, brokers, industry associations, pricing service agencies, etc., on a regular basis,
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and represents the price of market transactions that actually occur in fair trading. For financial instruments
for which there is no active market, the fair value thereof will be determined by the Company using
valuation techniques. The value appraisal techniques include the prices adopted by the parties, who are
familiar with the condition in the latest market transaction of their own free will, the current fair value
obtained by referring to other financial instruments of the same essential nature, the cash flow
capitalization method and the option pricing model, etc. At the time of valuation, the Company adopts a
valuation technique that is applicable in the current circumstances and that there is sufficient available data
and other information to support, selects the input values consistent with the asset or liability characteristics
considered by the market participants in the transaction of the underlying asset or liability, and as far as
possible uses relevant observable input values. Unobservable input values are used where the relevant
observable input values are not available or are not practicable.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the residual equity in assets of the
Company after deduction of all the liabilities. The Company treats issues (including refinancing),
repurchases, sale or cancellation of equity instruments as changes in equity, and transaction expenses
related to equity transactions are deducted from equity. The Company does not recognize changes in the
fair value of equity instruments.
If the Company's equity instruments distribute dividends (including "interest" generated by instruments
classified as equity instruments) during the existence period, such dividends will be treated as profit
distribution.
Impairment of financial assets
Financial assets of which the Company needs to recognize impairment losses include financial assets
measured at amortization cost and debt instrument investments measured at fair value with changes
included in other comprehensive income, mainly including notes receivable, receivables financing,
accounts receivable, contract assets, other receivables, loans and advances, debt investment, other debt
investment, long-term receivables, etc.
(1) Recognition methods of provision for impairment
Based on the expected credit loss, the Company makes an impairment provision. It recognizes credit
impairment loss according to the applicable expected credit loss measurement method (general method or
simplified method) for the above items.
Credit loss refers to the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the Company expects to receive (i.e., all cash
shortfalls), discounted at the original effective interest rate. Among them, for purchased or originated
credit-impaired financial assets, the Company discounts the difference at the credit-adjusted effective
interest rate of the financial assets.
The general method for measuring expected credit losses is that the Company assesses on each balance
sheet date whether the credit risk of financial assets has increased significantly since initial recognition. If
the credit risk has increased significantly since initial recognition, the Company measures the loss
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provisions according to the amount equal to lifetime expected credit losses. If the credit risk has not
increased significantly since initial recognition, the Company measures the loss provisions according to the
amount equal to 12-month expected credit losses. The Company considers all reasonable and valid
information, including forward-looking information, when assessing expected credit losses.
For financial instruments with lower credit risk on the balance sheet date, the Company assumes that their
credit risk has not increased significantly since initial recognition.
(2) Judgment standards for whether the credit risks have increased significantly since the initial
recognition
Suppose the probability of default of a financial asset in the expected lifetime determined on the balance
sheet date is significantly higher than the probability of default in the expected lifetime determined at the
time of initial recognition. In that case, it indicates that the credit risk of the financial asset has increased
significantly. Except for special circumstances, the Company uses the change in default risk that occurs
within the next 12 months as a reasonable estimate of the change in default risk that occurs throughout the
lifetime to determine whether the credit risk has increased significantly since initial recognition.
(3) Assessment methods of the expected credit risks based on combinations
The Company assesses the credit risks of the financial assets with significantly different credit risks
respectively, such as accounts receivable from disputes with the other party or litigation and arbitration and
receivables with obvious signs indicating that the debtor is likely to be unable to fulfill the repayment
obligation, etc.
In addition to the financial assets whose credit risks are assessed respectively, the Company divides the
financial assets into different combinations based on their common risk characteristics. It assesses the credit
risks on the basis of combinations.
(4) Accounting treatment methods for financial assets impairment
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If
the estimated credit losses are greater than the book value of the current impairment provisions, the
difference is recognized as an impairment loss; if the estimated credit losses are smaller than the book value
of the current impairment provisions, the difference is recognized as an impairment gain.
(5) Recognition methods of the credit losses of all kinds of financial assets
1) Notes receivable and receivables financing notes receivable
For notes receivable and receivables financing notes receivable, the Company measures the loss reserves
according to the amount of the expected credit losses during the whole duration. Based on the credit risk
characteristics of notes receivable and receivables financing notes receivable, financial assets are divided
into different combinations:
Item Basis for recognition of combinations
Banker's acceptance bill The acceptor is a banking institution
Financial company
The acceptor is a financial company
acceptance bill
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Item Basis for recognition of combinations
Trade acceptance draft The acceptor is a company other than a bank institution or financial company
2) Accounts receivable, receivables financing accounts receivable and contract assets
For accounts receivable that do not contain significant financing components, accounts receivable that
contain significant financing components, receivables financing accounts receivable, and contract assets,
the Company measures loss reserves based on an expected credit loss amount equivalent to the entire
duration. Expected credit losses related to contract assets are included in asset impairment losses.
In addition to accounts receivable of which credit risk is individually assessed, the Company divides
accounts receivable into different combinations based on their credit risk characteristics:
Item Basis for recognition of combinations
Combination 1: Account
The combination takes the account age of accounts receivable as the basis for the combination
age combination
The combination takes the dismantling subsidy of waste electrical and electronic products
Combination 2: Low risk
receivable from government departments and new energy vehicle subsidies as the basis for the
combination
combination
Combination 3: No risk The combination takes the receivables from related units within the scope of consolidation as
combination the basis for the combination
3) Disbursement of loans and advances
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expected
credit losses, based on whether the credit risk of disbursement of loans and advances has increased
significantly since initial recognition.
4) Other receivables
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expected
credit losses based on whether the credit risk of other receivables has increased significantly since initial
recognition. In addition to other receivables of which credit risk is individually assessed, the Company
divides other receivables into different combinations based on their credit risk characteristics:
Item Basis for recognition of combinations
Combination 1: Account age The combination takes the account age of other receivables as the basis for the
combination combination
Combination 2: Low risk The combination takes the receivable government grain deposits as the basis for the
combination combination
Combination 3: No risk The combination takes the receivables from related units within the scope of consolidation
combination as the basis for the combination
5) Debt investment
Debt investment mainly accounts for bond investment measured at amortization cost. The Company
measures impairment losses using an amount equivalent to 12-month or lifetime expected credit losses
based on whether the credit risk of other debt investments has increased significantly since initial
recognition.
6) Other debt investments
Other debt investments mainly account for the debt instrument investments measured at fair value with
changes included in other comprehensive income. The Company measures impairment losses using an
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amount equivalent to 12-month or lifetime expected credit losses based on whether the credit risk of other
debt investments has increased significantly since initial recognition.
7) Long-term receivables
The Company's long-term receivables are incomes from the sales of goods collected in installments. The
Company measures the loss reserves according to the amount of the expected credit losses during the whole
duration.
Receivables financing
For notes receivable and accounts receivable classified as measured at fair value and of which changes are
included in other comprehensive income, the portion within one year (including one year) from the date of
acquisition is presented as receivables financing, while the portion beyond one year is presented as other
debt investment. For related accounting policies, please refer to Note “III. 11. Financial instruments” and
Note “III. 12. Impairment of financial assets”.
Inventory
(1) Inventory classification
The Company's inventories mainly include raw materials, work in progress and contract performance costs,
finished products, development costs, and development products.
Development cost refers to the property that has not been completed and is for sale; the Company accounts
for the land use rights purchased and used for commercial housing development as the development cost.
Development product refers to the property that has been completed and is to be sold.
(2) Valuation method for delivered inventories
The Company mainly adopts the planned cost method for inventory accounting, while some subsidiaries
adopt the actual cost method for inventory accounting.
Inventories accounted for with the planned cost method are valued at planned cost upon shipment, and at
the end of the month, the planned cost is adjusted to the actual cost based on the cost difference of the
current month; inventories accounted for using the actual cost method mainly use the weighted average
method at the end of each month to value the issued inventory.
Development cost and product development costs include land transfer fees, infrastructure expenditures,
construction and installation engineering expenditures, borrowing costs incurred before the development
project is completed, and other related costs incurred in development. When carrying forward the cost for
product development, the total cost is allocated between the sold and unsold properties in proportion to the
construction area.
(3) Basis for determining the net realizable value of inventory and accrual method for inventory
depreciation reserves
At the balance sheet date, inventories are measured at the lower cost and net realizable value. If the cost of
inventories is higher than the net realizable value, a provision for the decline in the value of inventories
shall be made and shall be recorded in the profits and losses of the current period, whereas a provision for
the decline in the value of inventories has been made, if the value of the said inventories is resumed later,
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the said value shall be transferred back from the provision for the decline in value of the inventories. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale and relevant taxes.
(4) Inventory system
The Company's inventory adopts the perpetual inventory system.
(5) Amortization methods of low-value consumables and packing materials
Low-value consumables and packing materials are written off in full when issued for use.
Contract assets
The Company presented the right to collect payments from customers which the customers have not yet
paid the contract consideration. While the Company has fulfilled its performance obligations in accordance
with the contract, and which is not unconditional (that is, only depending on the passage of time) as
contract assets in the balance sheet. Contract assets and contract liabilities under the same contract are
presented in net amount, and contract assets and contract liabilities under different contracts are not offset.
For the determination and accounting treatment of expected credit losses of contract assets, please refer to
Note “III. 12. Impairment of financial assets”.
Contract costs
(1) Determination of asset amount related to contract costs
The Company's asset related to contract costs includes contract acquisition cost and contract obtain cost.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it will
be recognized as an asset as the contract acquisition cost. However, if the amortization period of the asset
does not exceed one year, it will be included in current profits and losses when it is incurred.
If the cost incurred by the Company for the performance of the contract does not fall within the scope
specified in the accounting standards for business enterprises other than the Accounting Standards for
Business Enterprises No. 14 Revenues (Revised in 2017), it shall be recognized as an asset as the contract
performance cost when the following conditions are met simultaneously: ① the cost is directly related to a
current or expected contract, including direct labor cost, direct material cost, manufacturing expense (or
similar expense), cost clearly borne by the customer, and other costs incurred only due to the contract; ②
the cost increases the Company's future resources for fulfilling its performance obligations; and ③ the cost
is expected to be recovered.
(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 goods
income related to the asset and included in the current profits and losses.
(3) Impairment of assets related to contract costs
When recognizing the impairment loss of assets related to the contract cost, the Company shall first
recognize the impairment loss of other assets related to the contract and recognized in accordance with
other relevant corporate accounting standards; then, based on the fact that the book value is higher than the
difference between the residual consideration expected to be obtained by the Company due to the transfer
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of the goods related to the asset and the estimated cost to be incurred for the transfer of the relevant goods,
the excess part shall be withdrawn for impairment provision and recognized as asset impairment losses.
If the depreciation factors in the previous period change later, causing the aforementioned difference above
to be higher than the book value of the asset, the Company will transfer back the previously-made
provision for impairment and include it in the current profits and losses. While the book value of the asset
after transferring back can not exceed the book value of the asset at the date of transferring back under the
assumption that no provision is made for the impairment.
Assets held for sale
(1) Recognition standard
Where the Company recovers its book value by selling (including the non-monetary asset exchange with
commercial substance; it is the same below), not continuously using a non-current asset or disposal group,
it shall be classified into the category of assets held for sale. The non-current asset or disposal group to be
classified into the category of assets held for sale shall meet the following conditions at the same time:
According to the practice of selling such assets or disposal groups in similar transactions, they can be sold
immediately under the current circumstances;
Selling is extremely likely to happen. That is to say that the Company has made the decision to a selling
plan and has obtained recognized purchase commitment and selling is expected to be completed within one
year. If it can be sold only after being approved by the relevant authority organization or supervision
department of the Company according to relevant requirements, it should have been approved. Recognized
purchase commitment refers to a purchase agreement with a legally binding force that the Company
concludes with other parties, which includes important clauses of the transaction price, time and enough
strict default punishment, etc., with which the possibility to lead to major adjustment or cancellation of
agreement is tiny.
The non-current asset or disposal group acquired by the Company for resale shall be classified as the held
for sale on the acquisition date if it meets the requirements of “expected to be sold within one year” on the
acquisition date, and it is likely to meet the other classification conditions for holding for sale in the short
term (usually three months).
The disposal group refers to a group of assets that are disposed of as a whole in a transaction through sale
or other means, and the liabilities that are directly related to these assets and transferred in the transaction.
Where the goodwill obtained in the merger of enterprises is apportioned for the asset group or asset group
combination to which the disposal group belongs according to Accounting Standards for Enterprises No.8
Impairment of Assets, this disposal group should contain the goodwill apportioned to the disposal group.
(2) Accounting treatment
For the non-current asset and disposal group that is classified as the category held for sale, the Company
carries out initial measurement or re-measurement according to the smaller result of the net value of the
book value and the fair value minus the net amount of the disposal expense. Where the net value of the fair
value minus the disposal cost is lower than the original book value, the difference is confirmed as assets
impairment losses and included in the current profits and losses, and the provision for impairment of the
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assets held for sale is made at the same time; for the amount of assets impairment losses confirmed by the
disposal group held for sale, the book value of the goodwill in the disposal group is deducted first, and then
its book value is deducted in proportion according to the ratios of the book values of various non-current
assets applicable to the measurement of the category held for sales in the disposal group.
Where the net value of the fair value of non-current assets held for sale on the balance sheet date minus the
selling expense increases subsequently, the previous write-down amount is restored and will be transferred
back in the amount of assets impairment loss after classification as the category held for sales is confirmed,
and the amount transferred back shall be included in the current profits and losses. Asset impairment losses
recognized before the classification are not transferred back.
Where the net value of the fair value of the disposal group held for sale on the balance sheet date minus the
selling expense increases subsequently, the previous write-down amount is restored and will be transferred
back in the amount of asset impairment losses confirmed for non-current assets applicable to the
measurement provisions of the category held for sale after classification as the category held for sales, and
the amount transferred back shall be included in the current profits and losses.
For the deducted book value of goodwill and the non-current assets applicable to the measurement
provisions of the category held for sale, the asset impairment losses confirmed before classification as the
category held for sales shall not be transferred back. For the amount subsequently transferred back for asset
impairment losses recognized in the disposal group held for sale, its book value is increased in proportion
according to the ratios of the book values of various non-current assets applicable to measurement
provisions of the category held for sales in the disposal group excluding the goodwill. The non-current
assets held for sale or non-current assets in the disposal group are not made for provision for impairment or
amortized, and the interests on debts and other expenses in the disposal group held for sale will be
confirmed continuously.
The measurement methods of the category held for sale do not apply to the deferred income tax assets,
financial assets complying with the specifications of Accounting Standards for Business Enterprises No. 22
Recognition and Measurement of Financial Instruments, investment real estate and biological assets
measured at fair value, contract rights produced in the insurance contract, and the assets produced in the
welfare of the workers, and they are measured according to the relevant criteria or corresponding
accounting policies formulated by the Company. Where the disposal group contains the non-current assets
applicable to the measurement method of the category held for sale, the measurement method of the
category held for sale is applicable to the whole disposal group. The related accounting standards apply to
the measurement of liabilities in the disposal group.
When the non-current assets or disposal group is removed from the disposal group held for sale because it
does not meet the classification condition of the category held for sale anymore and will not be classified as
the category held for sale or non-current assets, it shall be measured according to the smaller one of the
following two:
1) In the case of the book value before being classified into the held for sale category, the amount adjusted
according to the depreciation, amortization or impairment that should have been recognized under the
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assumption that it is not classified as held for sale category;
2) Recoverable amount.
Long-term equity investments
The long-term equity investments mainly include the equity investment held by the Company that can take
control over the investee and have a significant impact, as well as the equity investment in its joint venture.
(1) Judgment standards of control and significant influence
Judgment standards of control:
1) The Company owns the power to the investee;
2) The Company enjoys variable returns by participating in relevant activities of the investee;
3) The Company is able to use the power over the investee to influence the Company's return amount;
4) The Company acknowledges the control force for the investee that meets the above three conditions.
Judgment standards of significant influence:
1) The Company has the power to participate in the decision-making of the investee's financial and
operating policies, but does not control, or jointly control the formulation of these policies with other
parties;
2) Where the Company is able to exert a significant impact on the investee, it is the associated enterprise of
the Company;
3) The investee under common control by the Company and other participants is a joint venture of the
Company. Common control means that any participant cannot independently control this arrangement, and
any participant with the right to common control of this arrangement can prevent other participants or the
combination of participants from independently controlling this arrangement.
(2) Determination of the investment cost of the long-term equity investment
The long-term equity investment of the Company is measured at the investment cost at the time of
acquisition. Typically, the investment cost refers to the assets paid, liabilities incurred or undertaken, and
the fair value of equity securities issued for the acquisition of this investment, including the costs directly
attributable to the acquisition. However, for the long-term equity investment formed by a business
combination involving enterprises under common control, the investment cost is the share of the carrying
amount of the combined party's net assets acquired on the combination date in the ultimate controlling
party's consolidated financial statements.
(3) Subsequent measurement of long-term equity investments and methods of profits and losses
recognition
The Company adopts the cost method to calculate the long-term equity investment that can control the
investee and the equity method to calculate the investment of associated enterprise and joint venture.
The price of a long-term equity investment accounted for by employing the cost method shall be included
in its initial investment cost. If there are additional investments or disinvestments, the cost of the long-term
equity investment shall be adjusted. The cash dividends or profits declared to be distributed by the investee
shall be recognized as investment income and charged to profits and losses of the current period.
When the Company employs the equity method for accounting for the long-term equity investment, if the
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investment cost of a long-term equity investment is more than the investing enterprise's attributable share
of the fair value of the investee's identifiable net assets for the investment, the investment cost of the long-
term equity investment may not be adjusted; if the investment cost of a long-term equity investment is less
than the investing enterprise' attributable share of the fair value of the investee's identifiable net assets for
the investment, the carrying amount of the long-term equity investment shall be adjusted. The difference
shall be recorded in the profits and losses of the current period.
When the Company employs the equity method for accounting for the long-term equity investment, the
Company first adjusts the investee's net profits and losses and other comprehensive income in aspects such
as the fair value of the investee's identifiable net assets at the time of investment acquisition, accounting
policy and accounting period. Then it recognizes the current-period investment profits and losses and other
comprehensive income based on the net profits and losses and other comprehensive income shares of the
investee that should be enjoyed or shared. For other changes in owners' equities other than the net profits
and losses, other comprehensive income, and profit distribution, the carrying amount of the long-term
equity investment shall be adjusted and recorded into the owners' equities.
For the unrealized internal transaction profits and losses that arise between the Company and the associates
and joint ventures, the part attributable to the Company shall be calculated according to the shareholding
proportion, and the investment profits and losses shall be recognized on the basis of offsetting.
For the long-term equity investments held already prior to January 1, 2007 for the associates and joint
ventures, if there is any equity investment difference on the debit side, the investment profits and losses
shall be recognized after deduction of the equity investment difference on the debit side amortized by the
straight-line method according to the original residual maturity.
(4) Recognition of common control and significant influences on the investee
Common control is recognized as the control that does not exist unless the investing parties unanimously
agree on sharing the control power over the relevant important financial and operating decisions of the
investee according to the provisions of the contract.
Significant influences will be recognized where there is power to participate in making decisions on the
financial and operating policies of the investee but not to control or do joint control together with other
parties over the formulation of these policies. When the Company holds more than 20.00% (inclusive) but
less than 50.00% of voting shares of the investee directly or indirectly through a subsidiary, significant
influences on the investee shall be recognized unless there is clear evidence indicating that the Company
cannot participate in production and management decision-making of the investee in this situation and
therefore cannot generate significant influences; if the Company holds less than 20.00% (exclusive) of
voting shares of the investee, usually the Company is not deemed to have a significant influence on the
investee, unless there is clear evidence indicating that the Company can participate in production and
management decision-making of the investee in this situation and therefore can generate significant
influences.
(5) Conversion of accounting method of long-term equity investment
Where the equity investment originally held by the Company, which is unable to control, is not under
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common control with or has no significant influences on the invested entity, is converted into an investment
for an associate or joint venture due to additional investment, the investment shall be accounted by the
equity method instead, and the Company shall use the fair value of the original equity investment plus the
fair value of the consideration paid to acquire the newly added investment as the initial investment cost
accounted by the equity method instead. The difference between the fair value and carrying amount of the
originally held equity investment prior to the additional investment and the cumulative fair value changes
originally recorded into other comprehensive income shall be transferred to the current-period profits and
losses accounted by the equity method instead.
For the originally held investments for associates and joint ventures, if they are not able to be under
common control with or have significant influences on the invested entity, if they are not able to be under
common control with or have significant influences on the invested entity due to reasons such as partial
disposal, accounting treatment must be performed for residual equity investments according to the
recognition and measurement standards for financial instruments. The difference between the fair value and
carrying amount on the date on which the common control or significant influence is lost shall be charged
to profits and losses of the current period. When accounting based on the equity method is terminated for
other related comprehensive income originally subject to accounting of equity method, accounting
treatment is performed using the basis the same as that used by the investee to directly dispose of relevant
assets or liabilities directly; all the owners' equities that are recognized due to other changes in owners'
equities other than the net profits and losses, other comprehensive income and profit distribution of the
investee shall be transferred to the profits and losses of the current period when accounting based on the
equity method is terminated.
Where the originally held investments for associates or joint ventures are converted to investments for
subsidiaries due to additional investment, in the individual financial statements, the sum of the carrying
value of the acquired party's equity investment held prior to the acquisition date and the investment cost
newly added on the acquisition date shall be used as the initial investment cost of such an investment; for
the equity investment held prior to the acquisition date, other comprehensive income recognized due to
accounting of the equity method shall undergo accounting treatment using the basis the same as that used
by the investee to directly dispose of relevant assets or liabilities when such an investment is disposed of.
When the influencing capability of the investee is converted from control to a significant influence or
common control together with other investors due to investment disposal, the long-term equity investment
cost, for which recognition shall be terminated, is first carried over according to the proportion of
investment disposal. On such a basis, the remaining long-term equity investment cost is compared with the
share attributable to the Company in the fair value of the investee's identifiable net assets at the time of
original investment, which is calculated according to the remaining shareholding proportion. For the
goodwill part to be embodied in the investment evaluation, the carrying amount of long-term equity
investment shall not be adjusted; where the investment cost is less than the share attributable to the
Company in the fair value of the investee's identifiable net assets at the time of original investment, any
excess shall be adjusted against retained earnings when the long-term equity investment cost is adjusted.
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For the share attributable to the Company in the investee's realized net profits and losses between
acquisition of the original investment and conversion to accounting of the equity method due to investment
disposal, the carrying amount of the long-term equity investment shall be adjusted, meanwhile, any excess
shall be adjusted against retained earnings for the share attributable to the Company in the investee's
realized net profits and losses (excluding the cash dividends or profits distributed or declared to distribute)
from acquisition of the original investment to the beginning of the period in which the investment is
disposed of, and the current-period profits and losses shall be adjusted for the share attributable to the
Company in the investee's realized net profits and losses from the beginning of the period in which the
investment is disposed of to the investment disposal date; the share attributable to the Company in the
invested entity's changes in other comprehensive income shall be recorded into other comprehensive
income when the carrying amount of the long-term equity investment is adjusted; the share attributable to
the Company in the investee's other changes in owners' equities arising from reasons other than the net
profits and losses, other comprehensive income and profit distribution shall be recorded into "Capital
reserves other capital reserves" when the carrying amount of the long-term equity investment is adjusted.
After the cost method is converted to the equity method for the long-term equity investment, the share
attributable to the Company in the investee's realized net profits and losses, other comprehensive income,
and other changes in owners' equities shall be calculated and recognized according to provisions of the
standard in the future period.
For the originally held long-term equity investment that is able to control the investee, if the shareholding
proportion declines due to reasons such as partial disposal and the investment cannot be able to control, be
under common control with or have significant influences on the investee, accounting treatment must be
performed for remaining equity investments according to the recognition and measurement standards for
financial instruments. The difference between the fair value and carrying amount on the date of control loss
shall be recorded in the investment income of the current period.
In the process of holding the long-term equity investment, if the Company decides to sell all or part of the
held equity of the investee in consideration of all aspects, the carrying amount of the long-term equity
investment corresponding to the sold equity shall be carried over accordingly. The difference between the
selling price and the carrying amount of long-term equity investment for disposal shall be recognized as
disposal profits and losses.
If the Company disposes of all the long-term equity investments accounted by the equity method, when
accounting based on the equity method is terminated for other related comprehensive income originally
subject to accounting of equity method, accounting treatment is performed using the basis the same as that
used by the investee to directly dispose of relevant assets or liabilities; all the owners' equities that are
recognized due to changes in other owners' equities other than the net profits and losses, other
comprehensive income and profit distribution of the investee shall be transferred to the investment income
of the current period when accounting based on the equity method is terminated; if a part of the long-term
equity investment accounted by the equity method is disposed of and the residual equity is still accounted
using the equity method, other related comprehensive income originally subject to accounting of equity
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method shall be handled using the basis the same as that used by the investee to directly dispose of relevant
assets or liabilities and be carried over by proportion, and the owners' equities that are recognized due to
other changes in owners' equities other than the net profits and losses, other comprehensive income and
profit distribution of the invested entity shall be carried over to the investment income of the current period
according to the proportion.
Investment real estate
The Company's investment real estate includes a land use right that is leased out, a land use right held for
transfer upon capital appreciation, and a building that is leased out.
The Company's investment real estate is measured at its cost, and the Company uses the cost model for a
subsequent measurement of its investment real estate. The depreciation and amortization of the investment
real estate shall be made in accordance with the accounting policies of fixed assets or intangible assets of
the Company.
When the Company changes the purpose of the investment real estate, such as for self-use, it shall transfer
the relevant investment real estate to other assets.
See Note “III. 25. Impairment of long-term assets” for the impairment test method and impairment reserve
accrual method of investment real estate.
Fixed assets
(1) Recognition standard of fixed assets
The Company's fixed assets refer to tangible assets held for the production of commodities, provision of
labor services, lease or operation and management, with a service life exceeding one accounting year.
Fixed assets can not be recognized unless they simultaneously meet the conditions as follows:
1) The economic interests related to the fixed assets are likely to flow into the enterprise;
2) The cost of this fixed asset can be measured reliably.
(2) Measurement of fixed assets
The fixed assets are measured at cost.
1) The cost of a purchased fixed asset consists of the purchase price, the relevant taxes, freight, loading and
unloading fees, professional service fees, and other expenses that bring the fixed asset to the expected
conditions for use and that may be relegated to the fixed asset;
2) If the payment for a fixed asset is delayed beyond the normal credit conditions, and it is of financing
nature in effect, the cost of the fixed asset shall be recognized based on the present value of the purchase
price. The difference between the actual payment and the present value of the purchase price shall be
included in the current profits and losses within the credit period, unless it shall be capitalized in
accordance with Accounting Standards No. 17 Borrowing Costs.
3) The cost of self-constructed fixed assets consists of the necessary expenditures incurred before the assets
reach the predetermined usable state;
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4) The cost invested in a fixed asset by the investor shall be recognized in accordance with the value as
stipulated in the investment contract or agreement, other than those of unfair value as stipulated in the
contract or agreement;
5) The costs of fixed assets acquired through the exchange of non-monetary assets, recombination of
liabilities, merger of enterprises and lease shall be respectively recognized in accordance with the
Accounting Standards No. 7 Exchange of Non-monetary Assets, Accounting Standards for Enterprises
No. 12 Debt Restructuring, Accounting Standards for Enterprises No. 20 Merger of Enterprises and
Accounting Standards for Enterprises No. 21 Leases.
(3) Classification of fixed assets
The Company's fixed assets are classified into houses and buildings, machinery equipment, electronic
equipment and transportation equipment and otherwise.
(4) Depreciation of fixed assets
1) Recognition of depreciation method and service life, expected net salvage value rate and annual
depreciation rate:
The depreciation of fixed assets shall be made by the straight-line method. The yearly depreciation rate
recognized according to the category, service life and expected net salvage value rate of fixed assets is as
follows:
Expected net salvage value Annual depreciation
Category of fixed assets Expected service Life (year)
rate (%) rate (%)
Houses and buildings 5.00 20.00 4.75
Machinery equipment 5.00 6.00-10.00 9.50-15.83
Electronic equipment 5.00 2.00-3.00 31.67-47.50
Transportation equipment 5.00 3.00-4.00 23.75-31.67
Others 5.00 3.00-5.00 19.00-31.67
Depreciation of fixed assets of which a provision for impairment has been made: For a fixed asset of which
a provision for impairment has been made, the depreciation of the fixed asset shall be made based on the
amount of deducting its expected net salvage value, depreciation amount and provision for impairment
from the original price of the fixed asset and remaining service life of the fixed assets.
For the fixed assets that have reached the intended usable condition but not prepared the final account for
completion, their costs shall be recognized at their estimated value, and their depreciation shall be made
accordingly; after completion of the final account for completion, the original estimated value of the fixed
assets shall be adjusted by their actual costs, but the original depreciation amount does not require adjusting.
2) Check of service life, expected net salvage value, and depreciation method of fixed assets:
The Company shall, at least at the end of each year, have a check on the service life, expected net salvage
value, and the depreciation method of the fixed assets. If the Company finds that there is any difference
between the expected service life and the previously estimated service life of a fixed asset, the expected
service life of the fixed asset shall be adjusted; if there is any difference between the amount of expected
net salvage value and the previously estimated amount of the net salvage value, the expected net salvage
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value shall be adjusted; if any significant change is made on the form of the realization of the expected
economic benefits concerning a fixed asset, the method for the depreciation of the fixed asset shall be
changed. If any change is made to the service life, expected net salvage value, and depreciation method of a
fixed asset, it shall be regarded as a change in the accounting estimates.
(5) Treatment of subsequent expenditures for fixed assets
Subsequent expenditures incurred on a fixed asset refer to repair expenses, renovation expenses, repair
costs, and decoration expenses incurred in the course of the use of the fixed asset. Their accounting
treatment is as follows: Where subsequent expenditures of a fixed asset such as renovation expenses meet
the conditions of recognizing the fixed asset, they shall be recorded into the cost of the fixed asset, and the
carrying amount of the replaced part of the subsequent expenditures shall be deducted; where subsequent
expenditures of a fixed asset such as repair costs do not meet the conditions of recognizing the fixed asset,
they shall be recorded into the profits and losses of the current period in which they are incurred; where the
decoration expenses of a fixed asset meet the conditions of recognizing the fixed asset, they shall be
measured in a single detail account of "Fixed Assets", and the depreciation of the fixed asset shall be made
separately by the straight-line method in a shorter time of the period of two decorations and remaining
usable life of the fixed asset.
The improvement expenditures incurred on a fixed asset leased by operating leases shall be capitalized and
reasonably amortized as long-term prepaid expenses.
(6) Impairment test method and accounting and drawing method for impairment provision of fixed assets
See Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting and
drawing method for impairment provision of fixed assets.
Construction in progress
The term "construction in progress" refers to all necessary expenditures incurred before the acquired fixed
assets enable the project to reach expected usable condition, including project direct materials, direct
employee compensation, installation costs for equipment to be installed and project construction, project
management fees, net profits and losses of project commissioning and approved capitalized borrowing
costs.
(1) Valuation of construction in progress
The Company's construction in progress shall be measured individually by the construction project and
valuated at actual cost.
(2) The time when construction in process is carried forward to fixed assets
When the construction in progress reaches the expected usable condition, they shall be transferred to fixed
assets at their actual cost. For the fixed assets that have reached the expected usable condition but have not
prepared the final account for completion, they shall be charged to the account at their estimated value.
They shall be adjusted after their actual value is recognized.
See Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting and
drawing method for impairment provision of constructions in progress.
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Borrowing costs
Borrowing costs are interests and other costs incurred by the Company in connection with the borrowing of
the funds, including interests, amortization of discounts or premiums related to borrowings, ancillary costs
incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign
currency borrowings.
(1) Recognition of capitalization of borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction, or production of a
qualifying asset shall be capitalized, and the amounts of other borrowing costs incurred shall be recorded
into the profits and losses of the period in which they are incurred. Qualifying assets are fixed assets,
investment real estate, and inventories that necessarily take a substantial period of time for acquisition,
construction, or production to get ready for their intended use or sale.
(2) Period of capitalization of borrowing costs
1) The time point of capitalization of borrowing costs:
The capitalization of borrowing costs commences only when all the following conditions are satisfied:
a. Expenditures for the asset have been incurred;
b. Borrowing costs have been incurred; and
c. Activities relating to the acquisition, construction, or production of the asset that is necessary to prepare
the asset for its intended use or sale have commenced.
2) The time point of ceasing capitalization of borrowing costs:
Capitalization of borrowing costs ceases when the qualifying asset acquired, constructed, or produced
becomes ready for its intended use or sale. The subsequent borrowing costs shall be recorded in the profits
and losses of the current period.
3) Recognition of suspending capitalization of borrowing costs:
When an abnormal interruption occurs during the construction or production of an asset that satisfies the
conditions for capitalization and the interruption continues for more than three months consecutively, the
capitalization of borrowing expense will be paused, the borrowing expense incurred during the suspension
will be included in the current profits and losses.
(3) Computing method of capitalizing amount of borrowing costs
During the capitalization period, the amount of interest (including amortization of discounts or premiums)
to be capitalized for each accounting period shall be recognized as follows:
1) If a specialized loan is borrowed for the purchase, construction, or production of assets that meet the
capitalization conditions, the amount shall be determined based on the actual interest expenses incurred in
the current period of the specialized loan minus the interest income obtained from depositing unused loan
funds in the bank or the investment income obtained from temporary investments;
2) Where general funds are borrowed for the acquisition, construction, or production of a qualifying asset,
the amount of interest to be capitalized on such general borrowings shall be calculated and recognized by
applying a capitalization rate of such general borrowings to the weighted average of the excess amounts of
accumulated expenditures on the asset over and above the amounts of special borrowings. The
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capitalization rate shall be calculated and recognized by the weighted average interest rate of general
borrowings.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized
during each accounting period shall be recognized by the real interest rate method, and an adjustment shall
be made to the amount of interest in each period. During the period of capitalization, the amount of interest
capitalized during each accounting period shall not exceed the amount of interest actually incurred to the
relevant borrowings in the current period.
Ancillary costs in connection with special borrowings that are incurred before the qualifying asset acquired,
constructed, or produced becomes ready for its intended use or sale shall be capitalized on the basis of the
incurred amount when they are incurred, and they shall be recorded into the cost of the qualifying asset;
those incurred after the qualifying asset acquired, constructed or produced becomes ready for its intended
use or sale shall be recognized as expenses on the basis of the incurred amount when they are incurred and
shall be recorded into the profits and losses of the current period. The ancillary costs arising from a general
borrowing shall be recognized as expenses at their incurred amount when they are incurred and shall be
recorded into the profits and losses of the current period.
Usufruct assets
For the determination method of right-of-use asset and accounting treatment method, please see Note “III.
35. Lease”.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled
by the Company. Intangible assets can be recognized only when they meet the conditions simultaneously as
follows:
a. They are consistent with the definition of intangible assets;
b. The economic benefits related to intangible assets are likely to flow into the Company; and
c. The cost of intangible assets can be measured reliably.
(1) Measurement of intangible assets
The intangible assets shall be measured according to their cost or fair value (if increased through business
combination not involving enterprises under common control).
(2) Subsequent measurement
The Company shall analyze and judge the service life of intangible assets when it obtains intangible assets.
If the Company is unable to forecast the period when the intangible asset can bring economic benefits to it,
it shall be regarded as an intangible asset with an uncertain service life.
With regard to an intangible asset with limited service life, its amortization amount shall be the amortized
by expected realization pattern of its economic benefits. If the Company is unable to recognize the
anticipated realization pattern reliably, intangible assets shall be amortized by the straight-line method.
The Company shall, at least at the end of each year, check the service life and the amortization method of
intangible assets with limited service life. If necessary, it shall adjust the said service life and amortization
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method.
With regard to an intangible asset with uncertain service life, its amortization amount shall not be
amortized, but the Company shall check the service life of the said intangible asset every year and shall
carry out an impairment test for it.
(3) Estimation of service life
As for intangible assets with limited service life, the estimation of their service life generally considers the
following factors:
1) The general life cycle of products manufactured by using the assets and information about the service
life of similar assets available;
2) Present situation of technologies and process and estimation for future development trends;
3) Market demand of products manufactured or services rendered by using the assets;
4) Expected actions of present or potential competitors;
5) Expected maintenance expenses for economic capacity from the assets and the Company's expected
capability to pay relevant expenses;
6) Laws and regulations or similar restrictions relating to the control period of the assets, such as
concession period and lease period;
7) Relevance with a service life of other assets held by the Company, etc.
(4) Division of research expenditures and development expenditures included in expenditures for internal
research and development projects
1) Research expenditures in internal research and development projects shall be recorded into the profits
and losses of the current period when they are incurred.
2) The expenditures for the development stage of internal R&D projects shall be recognized as intangible
assets when the following conditions are met at the same time:
a. The development of the intangible asset is completed to make the use or sale of the intangible assets
feasible technically;
b. Have the intent to complete the intangible assets and use or sell them;
c. How the intangible asset will generate economic benefits, including the ability to demonstrate the
existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset;
d. Availability of adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset;
e. Ability to measure reliably the expenditure that is attributable to the intangible asset during its
development.
Where the expenditures at the research stage or at the development stage cannot be distinguished, all
expenditures to research and development shall be included in the current profits and losses.
(5) Impairment test method and accounting and drawing method of impairment provision for intangible
assets
See Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting and
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drawing method of impairment provision for intangible assets.
Impairment of long-term assets
On the balance sheet date, if there is any sign showing possible impairment of assets (referring to the assets
other than inventories, equity instruments that have no quoted price and reliable fair value measurement in
active market, investment real estate measured by fair value model, consumable biological assets, assets
formed under construction contract, deferred income tax assets, residual value not guaranteed by the renter
in the financing lease and financial assets), their recoverable amount shall be estimated on the basis of
single item assets. Where it is difficult to estimate the recoverable amount of the single item assets, the
recoverable amount of the assets shall be recognized on the basis of their asset group or combination of
asset groups.
The recoverable amount shall be recognized in light of the higher one of the net amount of the fair value of
the single item assets, asset group, or combination of asset groups less the disposal expenses and the
present value of the expected future cash flow of the single item assets, asset group or combination of asset
groups.
Where the recoverable amount of the single item assets is lower than their carrying amount, a provision for
the asset impairment shall be made accordingly on the basis of the difference between the carrying amount
of the single item assets and their recoverable amount. Where the recoverable amount of an asset group or a
combination of asset groups is lower than its carrying amount, it shall be recognized as the corresponding
impairment loss. The amount of the impairment loss shall first charge against the carrying amount of
goodwill which is apportioned to the asset group or combination of asset groups, then charge it against the
carrying amount of other assets in proportion to the weight of other assets in the asset group or combination
of asset groups with the goodwill excluded. The charges against the carrying amount of the assets above
shall be treated as the impairment loss of the single item assets (including the goodwill), and a provision for
impairment of the single item assets shall be made accordingly.
Once the above loss of asset impairment is recognized, it shall not be transferred back in future accounting
periods.
Long-term unamortized expenses
Long-term deferred expenses refer to the expenses incurred by the Company but attributable to the current
and subsequent accounting periods of more than one year (excluding one year), including the expenses for
improvement of fixed assets leased by operating lease.
Long-term deferred expenses shall be recorded into the account based on their actual amount of
expenditure and shall be averagely amortized by their beneficial period. If long-term deferred expenses can
not benefit subsequent accounting periods, the unamortized value of the project shall be all transferred to
the profits and losses of the current period.
Contract liabilities
Contract liability refers to the Company's obligation to transfer goods to customers for consideration
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received or receivable from customers. If before the Company transfers the goods to the customer, the
customer has paid the contract consideration or the Company has obtained the unconditional right to
receive payment, the Company will, at the earlier time point between the actual payment by the customer
and the payment due, present the amount received or receivables as contract liabilities. Contract assets and
contract liabilities under the same contract are presented in net amount, and contract assets and contract
liabilities under different contracts are not offset.
Employee compensation
(1) Accounting treatment of short-term compensation
In the accounting period during which employees provide services to the Company, the Company
recognizes the short-term compensation actually incurred as liabilities and charges them to the current-
period profits and losses or relevant asset costs.
(2) Accounting treatment for post-employment benefits
Post-employment benefits can be divided into the defined contribution plan and the defined benefit plan
1) In the accounting period during which employees provide services for the Company, the amount to be
deposited calculated based on the defined contribution plan is recognized as liabilities and included in the
current profits and losses or relevant asset costs.
2) The accounting treatment for the defined benefit plan generally includes the following steps:
a. According to the Expected Cumulative Benefit Unit (ECBU) method, unbiased and mutually consistent
actuarial assumptions are used to estimate relevant demographic and financial variables, quantify the
obligations arising from the defined benefit plan, and determine the period to which the obligations relate;
b. If there are assets in the defined benefit plan, the deficit or surplus formed by deducting the present value
of the defined benefit plan obligation from the fair value of the defined benefit plan assets shall be
recognized as net liabilities or net assets of the defined benefit plan. For the defined benefit plan with
surplus, the Company should measure the net assets based on the surplus or asset ceiling of the benefit plan
(whichever is lower). The asset ceiling refers to the present value of the economic interest that can be
obtained by the Company from refunding or reducing future contributions to the defined benefit plan.
c. At the end of the period, the costs of employee compensation arising from the defined benefit plan are
recognized as service costs, net interest on net liabilities or net assets of the defined benefit plan, and
changes arising from the remeasurement of net liabilities or net assets. The service costs and net interest on
net liabilities or net assets of the defined benefit plan are included in the current profits and losses or
relevant asset costs. In contrast, changes arising from the remeasurement of net liabilities or net assets are
included in other comprehensive income and cannot be transferred back to profits and losses in subsequent
accounting periods. However, the amount recognized in other comprehensive income can be transferred
within the equity section;
d. Recognize a settlement gain or loss during settlement of the defined benefit plan.
(3) Accounting treatment for termination benefits
The liabilities of employees' wages and salaries that arise from the termination benefits shall be recognized
on the earlier one of the following two dates and included in the current profits and losses:
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1) When the Company cannot unilaterally cancel the termination benefits provided as a result of a plan to
terminate employment or a proposal to downsize;
2) When the Company recognizes the cost or expense related to reconstruction involving the payment of
termination benefits.
(4) Accounting treatment for other long-term employee benefits
For other long-term employee benefits provided by the Company to its employees that comply with the
defined contribution plan, accounting treatment shall be conducted in accordance with the defined
contribution plan. For benefits other than these, accounting treatment will be undertaken in accordance with
the defined benefit plan. However, the portion of the relevant employee compensation costs that relate to
"changes arising from remeasurement of net liabilities or net assets of the defined benefit plan" shall be
included in the current profits and losses or related asset costs.
Lease liabilities
For the methods of recognition and accounting treatment of lease liabilities, please refer to Note “III. 35.
Lease”.
Estimated liabilities
(1) Recognition criteria of estimated liabilities
When business related to contingencies such as external guarantee, pending litigation or arbitration, product
quality assurance, staff reduction, loss contract, restructuring obligations, and fixed asset disposal
obligations that meet the following conditions, it shall be recognized as liabilities:
1) The liabilities are current obligations undertaken by the Company;
2) The fulfillment of the liabilities might cause outflow of economic benefits from the enterprise;
3) The amount of the liabilities can be reliably measured.
(2) Measurement methods of estimated liabilities
Accrued liabilities shall be measured on the best estimate of the expenditures required to fulfill current
obligations. If there is a continuous range for the necessary expenses and if all the outcomes within this
range are equally likely to occur, the best estimate shall be determined by the midpoint of the range. In
other cases, the best estimate shall be determined by the following methods:
1) When a contingency is related to a single item, the best estimate shall be determined based on the most
probable amount;
2) When a contingency is related to multiple items, the best estimate shall be calculated and determined
based on all possible amounts and their probabilities of occurrence.
If all or part of the expenditure required to settle the estimated liabilities of the Company is expected to be
compensated by a third party or other parties, the amount of compensation shall be separately recognized as
an asset only when it is virtually certain that the compensation will be obtained. The amount recognized for
the compensation shall not exceed the book value of the recognized estimated liabilities.
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Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment refers to the transaction of granting equity instruments or bearing liabilities
recognized on the basis of equity instrument for obtaining services from employees or other parties. The
share-based payment is classified into equity-settled share-based payment and cash-settled share-based
payment.
1) Equity-settled share-based payment
The equity-settled share-based payments in exchange for services provided by employees are measured at
the fair value of the equity instruments granted to employees on the grant date. The fair value is calculated
by the straight-line method and included in the relevant costs or expenses based on the best estimate of the
number of vested equity instruments in the vesting period when it is vested only after the service in the
vesting period is completed or the specified performance terms are met. When it is vested immediately after
grant, it is included in relevant costs or expenses on the grant date, and the capital reserve is increased
accordingly.
On each balance sheet date during the vesting period, the Company makes the best estimate of subsequent
information such as the latest change in the number of vesting employees to correct the estimated number
of vested equity instruments. The aforementioned estimated influences are included in current relevant
costs or expenses, and the capital reserves are adjusted correspondingly.
The equity-settled share-based payment in exchange for the services of other parties shall be measured at
the fair value of the services of other parties on the obtaining date if the services of other parties can be
measured reliably; the equity-settled share-based payment shall be measured at the fair value of the equity
instruments on the obtaining date of the services of other parties if the fair value of the services of other
parties cannot be measured reliably while the fair value of the equity instruments can be measured reliably,
and be included in the relevant costs or expenses, and the shareholders' equity shall be increased
correspondingly.
2) Cash-settled share-based payment
The cash-settled share-based payments are measured at the fair value of liabilities determined based on
shares or other equity instruments undertaken by the Company. When it is vested immediately after grant,
it is included in relevant costs or expenses on the grant date, and the liabilities are increased
correspondingly; if it is vested after completing the services in the vesting period or meets the specified
performance terms, the current obtained services are included in costs or expenses based on the best
estimate of vesting and at fair value of liabilities borne by the Company on each balance sheet date of the
vesting period, and the liabilities are increased correspondingly.
On each balance sheet date and settlement date before the settlement of the relevant liabilities, re-measure
the fair value of the liabilities with the changes included in the current profits and losses.
(2) Relevant accounting treatment for amending and terminating share-based payment plan
When the Company amends the share-based payment plan, if the fair value of equity instruments granted is
increased due to the amendment, the increase of the services obtained will be recognized correspondingly
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by the increase of the fair value of equity instruments. The increase in the fair value of equity instruments
refers to the difference between the fair value of equity instruments before and after amendment on the
amendment date. If the amendment reduces the total fair value of the share-based payment or adopts other
unfavorable methods to the employees, the accounting treatment of the obtained services will be continued
as if the modification has never occurred, unless the Company cancels part or all of the equity instruments
granted.
During the vesting period, if the granted equity instrument is canceled, the Company will handle the
cancellation as an accelerated vesting, the amount that shall be recognized during the remaining vesting
period is immediately included in the current profits and losses with the capital reserves recognized at the
same time. If an employee or other party can choose to meet the non-vesting conditions but fails to meet
them during the vesting period, the Company shall treat that as a cancellation of the grant of equity
instruments.
Revenue
When the contract between the Company and the customer simultaneously meets the following conditions,
the Company recognizes the revenue at the point when the customer obtains control over the relevant goods:
the parties to the contract have approved the contract and promised to perform their respective obligations;
the contract clarifies the rights and obligations of the parties to the contract in relation to the transferred
goods or the provided services; the contract has clear payment terms related to the transferred goods; the
contract has commercial substance, that is, the performance of the contract will change the risk, time
distribution or amount of the Company's future cash flow; and the consideration that the Company is
entitled to obtain due to its transfer of goods to customers is likely to be recovered.
At the commencement date of the contract, the Company identifies each individual performance obligation
in the contract, and allocates the transaction price to each individual performance obligation in accordance
with the relative proportion of the stand-alone selling price of the goods promised by each individual
performance obligation. When determining the transaction price, the Company considers the impact of a
variable consideration, major financing components in the contract, non-cash consideration, consideration
payable to customers, and other factors.
The Company recognizes the transaction price allocated to each individual performance obligation as
revenue at the point when the customer obtains control over the relevant goods. When judging whether the
customer has obtained control over the goods, the Company considers the following signs: where the
Company has the current right to receive payment for the goods, that is, the customer has the current
payment obligation for the goods; where the Company has transferred the legal ownership of the goods to
the customer, that is, the customer has the legal ownership of the goods; where the Company has
transferred the goods to the customer in kind, that is, the customer has taken possession of the goods in
kind; where the Company has transferred the main risks and payments of the ownership of the goods to the
customer, that is, the customer has obtained the main risks and payments of the ownership of the goods;
where the customer has accepted the goods; and other signs that the customer has obtained control over the
goods.
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The Company mainly sells air conditioners and their accessories, and household appliances and their
accessories, which usually only include the performance obligations of the transferred goods.
(1) Revenue from selling goods
1) For the revenue from domestic sales of products, the Company mainly adopts the form of payment in
advance. The Company recognizes the revenue when the product is outbound and delivered to the
purchaser, the shipping document is issued or the customer's receipt is obtained, the amount of revenue
from product sales is determined, the payment for goods is recovered, or the receipt certificate is obtained
and the relevant economic benefits are likely to flow in.
2) In terms of the export sales income, the Company recognizes the revenue when the products are declared
and departed according to the contract, the bill of lading is obtained, and the amount of the sales revenue is
determined.
(2) Revenue from rendering labor services
1) For the revenue from warehousing services, the Company will settle the revenue on a monthly basis by
the working hours and standard wages of the services provided, facilities used, and related expenses, and
the amount of revenue has been determined;
2) For the revenue from material processing services, the Company recognizes the revenue when the
materials are processed according to the contract and delivered to the customer to obtain the customer's
signed receipt, and the amount of revenue has been determined;
3) The Company's service charge and commission income include the service charge income of acceptance
business, service charge income of entrusted loan, etc.
For the service charge and commission income, the completion time of the contractual performance
obligations is determined according to the business settlement sheet formulated through settlement with the
customer when the business is completed, and the specific amount of revenue is recognized according to
the terms and ratios stipulated in the business contract or agreement.
(3) Income from the transfer of the right to use assets
Income from the transfer of the right to use assets includes interest income, rental income, etc.
The Company recognizes the income from the transfer of the right to use assets when the income amount
can be reliably measured and the relevant economic benefits are likely to flow into the enterprise.
1) The interest income of the Company mainly includes the interest income from deposits in financial
enterprises and loan interest income. Interest income from deposits in financial enterprises is recognized on
a regular basis based on the time of deposit and the effective interest rate. Loan interest refers to the income
recognized by the Company for granting self-operated loans and accruing interest on a regular basis. The
loan interest income is recognized according to the effective interest rate method.
The effective interest rate method refers to the method of calculating the amortized cost and interest income
or interest expense for each period based on the effective interest rate financial assets or financial liabilities.
The effective interest rate refers to the interest rate used to discount the future cash flows of a financial
asset or financial liability within the expected period of existence or applicable shorter period into the
current book value of the financial asset or financial liability. When determining the effective interest rate,
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the Company estimates future cash flow based on all contractual terms of financial assets or financial
liabilities, but does not consider the loss of future credits. All the charges, transaction fees, and premiums
or discounts paid or collected by the Company as part of the effective interest rate shall be considered when
determining the effective interest rate.
2) The recognition conditions for the rental income of the Company are as follows:
a. A lease contract, agreement, or other settlement notices recognized by the Lessee are available;
b. The obligations stipulated in the contract are fulfilled; the lease invoice is issued, and the price has been
obtained or will be obtained for sure;
c. The rental cost can be measured reliably.
Government grants
Government grants refer to the Company's free acquisition of monetary and non-monetary from the
government, excluding capital invested by the government as the owner. Government grants consist of
asset related government grants and income related government grants.
Government grants obtained by the Company for the purchase, construction, or forming the long-term
assets in other ways are defined as asset related government grants, and all the other government grants are
defined as income related government grants. If the government document does not specify the grant object,
the following mode is adopted to classify the subsidies into income related government grants and asset
related government grants:
(1) If the government document specifies the item to which the grant aims, the allocation should be based
on the relative proportion of the expenditure amount to form assets and the expenditure amount included in
expenses in the budget of this specific item, and this allocation proportion needs to be reviewed on every
balance sheet date and changed when necessary;
(2) If the government document provides only a general presentation of the purpose without specifying the
specific item, the grants shall be regarded as income related government grants.
The asset related government grants are recognized as deferred income upon acquisition, and are included
in the profits and losses in reasonable and systematic installments over the useful life of the asset when the
relevant asset reaches its intended usable state. Where the relevant assets are sold, transferred, scrapped, or
damaged before the end of their useful lives, the undistributed deferred income balance is transferred to the
current profits and losses of the asset disposal.
In terms of income related government grants, those are used for compensating the related expenses or
losses in the later period, are recognized as deferred income upon acquisition and included in the current
profits and losses during the period when the relevant costs or losses are recognized; those are used for
compensating the related cost expenses or losses incurred, are included in the current profits and losses
directly upon acquisition.
Government grants related to daily activities are included in other income; government grants not related to
daily activities are included in non-operating revenue and expenses.
(3) If policy preferential loans are obtained with interest discounts, accounting treatment should be carried
out by distinguishing between the following two ways of obtaining them:
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1) Where the financial department disburses the discount interest fund to the lending bank, the lending bank
provides a loan to the Company at a policy preferential interest rate, the fair value of the loan is used as the
entry value of the loan, the borrowing cost is calculated according to the effective interest rate method, and
the difference between the actual amount received and the fair value of the loan is recognized as deferred
income. The deferred income is amortized using the effective interest rate method during the duration of
the loan to offset the relevant borrowing cost;
2) Where the financial department disburses the discount interest fund to the Company directly, the
corresponding discount is used to offset the relevant borrowing costs.
(4) Government grants that are monetary assets are measured at the amount received or receivable.
Government grants that are non-monetary assets are measured at the fair value; if the fair value cannot be
reliably acquired, they are measured at the nominal amount. The Company usually recognizes and
measures government grants based on the actual amount received upon receipt. However, funds that have
conclusive evidence at the end of the period, indicating that they meet the relevant conditions stipulated in
the financial support policy and are expected to receive financial support, are measured at the amount
receivable. Government grants measured at the amount receivable shall simultaneously comply with the
following conditions:
1) The authoritative government department has confirmed the amount of receivable grants by issuing a
document, or can be independently and reasonably calculated in accordance with the relevant provisions of
the officially issued financial fund management measures, and it is predicted that its amount is not subject
to significant uncertainty;
2) The basis is the financially supported projects and their financial fund management measures that are
officially released by the local finance department and actively disclosed in accordance with the provisions
of the Regulation of the People's Republic of China on Disclosure of Government Information, as well as
its financial fund management measures, and the management measures should be inclusive (any enterprise
meeting the defined conditions can apply for the grants), rather than specially formulated for specific
enterprises;
3) Other conditions that shall be met according to specific conditions of the Company and this matter of
grants.
Deferred income tax assets/deferred income tax liabilities
The deferred income tax assets and deferred income tax liabilities are calculated and recognized based on
the difference between the tax base of the assets and liabilities and their book values (temporary difference).
For deductible losses that can be deducted from taxable income in subsequent years in accordance with the
provisions of the tax law, the corresponding deferred income tax assets are recognized. For temporary
differences arising from the initial recognition of goodwill, the corresponding deferred income tax
liabilities are not recognized. For temporary differences arising from the initial recognition of assets or
liabilities arising from non-business combination transactions that neither affect accounting profits nor
taxable income (or deductible losses), the corresponding deferred income tax assets and deferred income
tax liabilities are not recognized. At the balance sheet date, the deferred income tax assets and deferred
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income tax liabilities are measured at the tax rate applicable to the period during which the assets are
expected to be recovered, or the liabilities are expected to be settled.
The Company recognizes the deferred income tax assets to the extent of the amount of the taxable income
which it is most likely to acquire and which can be deducted from the deductible temporary differences,
deductible losses, and tax deductions.
Deferred income tax liabilities are recognized for all taxable temporary differences arising from the
investments in subsidiaries, joint ventures, and associates, except to the extent that both of the following
conditions are met: the Company is able to control the timing of the transferring back of the temporary
differences; and it is likely that the temporary difference will not reverse in the foreseeable future. Deferred
income tax assets are recognized for all deductible temporary differences associated with investments in
subsidiaries, joint ventures, and associates if all the following conditions are met: it is likely that the
deductible temporary difference will be transferred back in the foreseeable future, and it is likely that
taxable profit in the future will be available against which the deductible temporary difference can be
utilized.
The deferred income tax assets and the deferred income tax liabilities that meet the following conditions
are presented at the net amount after offsetting:
1) The deferred income tax assets and deferred income tax liabilities relate to the income taxes levied by
the same taxation authority on the same taxpayer of the Company; and
2) The taxpayer of the Company has a legal right to settle current income tax assets and current income tax
liabilities on a net basis.
Lease
Lease refers to a contract in which the Company transferred or acquired the right to control the use of one
or more identified assets for a certain period of time in exchange for or payment of consideration. On the
contract commencement date, the Company evaluates whether the contract is a lease or includes a lease.
(1) With the Company as the Lessee
1) Initial measurement
On the commencement date of the lease term, the Company will recognize the right to use the leased assets
during the lease term as the right-of-use asset, and recognize the current value of the unpaid lease payment
amount as a lease liability, except for short-term leases and low-value asset leases. When calculating the
current value of the lease payment amount, the Company uses the implied interest rate in lease as a
discount rate. If the implied interest rate in lease cannot be determined, the Lessee incremental borrowing
interest rate is used as the discount rate.
Right-to-use assets should be initially measured at cost. The cost includes:
a. The initially measured amount of the lease liabilities;
b. The lease payments made on or before the commencement date of the lease term, if there is a lease
incentive, deduct the amount related to the lease incentive that has been enjoyed;
c. The initial direct expenses incurred by the Lessee;
d. The estimated cost that the Lessee will incur for dismantling and removing the leased assets, restoring
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the site where the leased assets are located, or restoring the leased assets to the state agreed in the lease
terms.
2) Subsequent measurement
The Company calculates and distills depreciation by referring to fixed asset depreciation policies (see Note
“III. 20. Fixed assets”). If the Company can reasonably determine the obtaining of the ownership of the
leasing assets when the lease term expires, it will calculate and distill depreciation within the remaining
service life of the leasing asset. Where it is impossible to reasonably determine if the ownership of the
leased assets can be acquired upon the expiration of the lease term, the Company will make depreciation
within a shorter period between the lease term and the remaining useful life of the leased assets.
For lease liabilities, the Company calculates its interest expenses for each period of the lease term at a fixed
periodic interest rate, and includes them in the current profits and losses or in the cost of related assets. The
variable lease payment amount that is not included in the measurement of lease liabilities is included in the
current profits and losses or cost of related assets when actually incurred.
After the lease term starts, in case of changes in the substantial fixed payment amount, the estimated
amount payable of the guarantee residual value, the index or ratio used for determining the lease payment
amount, a change in the evaluation results or actual vesting of the purchase option, renewal option or
termination option, the Company re-measures the lease liability based on the current value of the changed
lease payment amount, and adjusts the book value of the right-of-use assets accordingly. If the book value
of the right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced,
the Company will include the remaining amount in the current profits and losses.
3) Short-term leases and low value asset leases
For short-term leases (with a lease term of no more than 12 months from the beginning of the lease) and
low-value asset leases, the Company adopts a simplified treatment method to include the lease payment
amount into the cost of relevant asset costs or the current profits and losses during the lease term by the
straight-line method or other systematic and reasonable methods instead of recognizing the right-of-use
assets and lease liabilities.
(2) With the Company as the lessor
On the commencement date of the lease, the Company divides the lease into financial lease and operating
lease based on the essence of the transaction. Financial lease refers to the lease that transfers substantially
almost all risks and rewards associated with the ownership of the assets. Operating lease refers to the leases
other than the financial lease.
1) Operating leases
The Company adopts the straight-line method to recognize the lease payment amount of the operating lease
as the rental income during the lease term. Variable lease payments in connection with the operating lease
that are not included in lease payment are included in the current profits and losses when actually incurred.
2) Financial lease
On the beginning date of the lease term, the Company recognizes the financial lease receivables and
derecognizes the financial lease assets. The financial lease receivables are initially measured by the net
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lease investment (the sum of the unguaranteed residual value and the present value of the lease payments
that have not been received on the beginning date of the lease term discounted at the implied interest rate of
the lease), and interest income during the lease term is calculated and recognized at a fixed periodic interest
rate. The variable lease payments obtained by the Company that are not included in the measurement of net
lease investment are included in the current profits and losses when actually incurred.
Discontinued operation
Discontinued operation refers to a constituent part that meets one of the following conditions, can be
distinguished separately, and has been disposed of or classified as held for sale:
(1) This constituent part represents an independent main business or a separate main business area;
(2) This constituent part is part of an associated plan for disposing of an independent main business or a
separate main business area;
(3) This constituent part is a subsidiary specially acquired for resale.
The Company presents the profits and losses from continuing operations and the profits and losses from
discontinued operations in the Consolidated Income Statement and the Income Statement respectively. For
the non-current asset or disposal group held for sale that does not comply with the definition of
discontinued operation, its impairment loss and amount transferred back and profits and losses from
disposal shall be presented as profits and losses from continuing operations. The impairment losses and
amount transferred back of discontinued operations and other operating profits and losses as well as profits
and losses from disposal are presented as profits and losses from discontinued operations.
For the discontinued operations presented in the current period, the information previously presented as
profits and losses from continuing operations is re-presented as profits and losses from discontinued
operations for comparable accounting period in the current financial statements. Where the disposal group
that is intended to be discontinued rather than sold meets the conditions for the relevant constituent part in
the definition of discontinued operations, it is presented as discontinued operation from the date of
discontinuation of use. Where the control over a subsidiary is lost due to reasons such as selling the
investment in the subsidiary and this subsidiary complies with the definition of discontinued operations, the
relevant profits and losses from discontinued operations are presented in the Consolidated Income
Statement.
Segment report
The Company determines the operating segments based on the internal organizational structure,
management requirements and internal reporting systems, determines the report segments based on the
operating segments, and discloses segment information.
Operating segments refer to the constituent part of the Company that meets the following conditions at the
same time:
(1) This constituent part can generate revenue and expenses in daily activities;
(2) The management of the Company can regularly evaluate the operating results of the constituent part to
determine the allocation of resources and evaluate its performance;
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(3) The Company can obtain the relevant accounting information of this constituent part such as its
financial status, operating results and cash flows. If two or more operating segments have similar economic
characteristics and meet certain conditions, they can be merged into one operating segment.
Share repurchase
If the Company's shares are acquired due to registered capital reduction or employee rewards, the amount
actually paid shall be treated as treasury shares, and shall be registered at the same time for future reference.
If the repurchased shares are cancelled, the difference between the total face value of the cancelled shares
and the amount actually paid for the repurchase shall be offset against capital reserve. If the capital reserve
is insufficient, the offset shall be made against retained earnings. If the repurchased shares are rewarded to
employees of the Company as equity settled share-based payments, refer to Note “III. 31. Share-based
payment” for corresponding accounting treatment.
Hedging
To avoid certain risks, the Company hedges certain financial instruments as hedging instruments. Hedge
that meets the prescribed conditions will be handled by the Company using hedge accounting methods. The
Company's hedging includes fair value hedging, cash flow hedging and hedging of net investment in
overseas operations.
At the beginning of the hedging, the Company officially designates the hedging tool and the hedged item,
and prepares written documents on the hedging relationship and the risk management strategy and risk
management objectives of the Company engaged in hedging. In addition, the Company will continue to
assess the effectiveness of the hedging when and after the hedging begins.
(1) Fair value hedging
For eligible hedging instruments designated as fair value hedging, the gains or losses generated thereby are
included in the current profits and losses. If a hedging instrument is used to hedge non-trading equity
instrument investment (or its component) that is selected to be measured at fair value with changes
included in other comprehensive income, the gains and losses generated by the hedging instrument are
included in other comprehensive income. Gains or losses of a hedged item arising from the hedged risk
exposure is included in the current profits and losses, while the book value of the hedged item is adjusted.
If a hedged item is measured at fair value, the gains or losses incurred by the hedged item due to the hedged
risk exposure are included in the current profits and losses or other comprehensive income, and there is no
need to adjust the book value of the hedged item.
When the Company revokes the designation of the hedging relationship, the hedging instrument has
expired or been sold, the contract is terminated or exercised, or the conditions for the use of hedge
accounting are no longer met, terminate the use of hedge accounting.
(2) Cash flow hedging
For eligible hedging instruments designated as cash flow hedging, the portion of the gains or losses
generated thereby that is determined to be an effective hedge is included in other comprehensive income,
while the portion that is determined to be an ineffective hedge is included in the current profits and losses.
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If the expected transaction causes the Company to subsequently recognize a non-financial asset or non-
financial liability, or if the expected transaction of the non-financial asset or non-financial liability forms a
firm commitment applicable to fair value hedge accounting, the Company will transfer out the amount of
cash flow hedge reserve originally recognized in other comprehensive income and include it in the initial
recognition amount of the asset or liability. For other cash flow hedging, the Company will, during the
same period when the expected cash flow being hedged affects profits or losses, transfer out the amount of
cash flow hedge reserve originally recognized in other comprehensive income and include it in the current
profits and losses.
If it is expected that all or part of the net losses originally included in other comprehensive income cannot
be compensated in the future accounting period, transfer the portion which cannot be compensated out and
include it in the current profits and losses.
When the Company terminates the use of hedge accounting for cash flow hedging, the accumulated cash
flow hedge reserves that have been included in other comprehensive income are retained when future cash
flows are expected to continue to occur, and are transferred out of other comprehensive income and
included in the current profits and losses when future cash flows are expected to no longer appear.
(3) Hedging of net investment in overseas operations
Hedging of net investment in overseas operations is accounted for using a method similar to the cash flow
hedging. Among the gains or losses of hedging instruments, the portion that is determined to be an effective
hedging is included in other comprehensive income, while the portion that is determined to be an
ineffective hedging is included in the current profits and losses.
Gains and losses that have been included in other comprehensive income are transferred out of other
comprehensive income and included in the current profits and losses when disposing of overseas operations.
Safe production expenses
Some subsidiaries of the Company withdraw safe production expenses in accordance with national
regulations and include them in the costs of related products or current profits and losses.
Where the expenses for production safety extracted are of a cost nature, the special reserves shall be
directly written off. If the expenses for safe production extracted are used to form fixed assets, the expenses
incurred by the account collection of "construction in progress" shall be recognized as fixed assets when the
safety project is completed and reaches the expected serviceable state; at the same time, write off special
reserves based on the cost of forming fixed assets and recognize accumulated depreciation of the same
amount. The fixed asset will no longer be depreciated in the future.
Risk reserve
In accordance with regulations such as the Administrative Measures for the Reserve Accrual of Financial
Enterprises ("Accrual Measures") (CJ [2012] No. 20) issued by the Ministry of Finance, the subsidiaries of
the Company in financial industry, have established a general risk reserve on the basis of withdrawing asset
impairment provision of assets to compensate for potential losses related to risk assets that have not yet
been identified. This general risk reserve is treated as a profit distribution and is an integral part of the
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
owner's equity, which in principle should be no less than 1.5% of the ending balance of risk assets.
According to the requirements of the accrual measures, if the proportion of the general reserve balance of
financial enterprises to the ending balance of risk assets is difficult to reach 1.5% at one time, it can be paid
in installments, and in principle, it should not exceed 5 years.
Changes in major accounting policies and accounting estimate
(1) Changes in major accounting policies
On December 13, 2022, the Ministry of Finance issued the Accounting Standards for Enterprises
Interpretation No.16 (hereinafter referred to as "Interpretation No.16"). According to the requirements of
the Ministry of Finance, the content of "deferred income tax related to assets and liabilities arising from a
single transaction is not applicable to the accounting treatment of initial recognition exemption" came into
effect on January 1, 2023. According to the relevant requirements, the Company made corresponding
changes to the accounting policies, and this change in accounting policies did not have a significant impact
on the Company's financial indicators such as total assets, total liabilities, net assets, and net profit.
The following shows adjustments to the financial statements at the beginning of the year of the first
implementation of the new accounting standard for the first time starting from 2023:
Unit: RMB
Amount as of December 31, 2022 (before
Amount as of January 1, 2023 (after change)
change)
Statement Item
Consolidated Consolidated
Company's statement Company's statement
Statements Statements
Non-current assets:
Deferred income tax
14,598,866,870.23 11,399,848,879.09 14,644,877,571.11 11,399,848,879.09
assets
Total non-current
99,884,719,906.36 68,573,037,866.58 99,930,730,607.24 68,573,037,866.58
assets
Total assets 355,024,758,878.82 286,630,030,242.19 355,070,769,579.70 286,630,030,242.19
Non-current
liabilities:
Deferred income tax
2,225,127,743.74 710,194,350.26 2,271,138,444.62 710,194,350.26
liabilities
Total non-current
36,776,774,049.04 28,240,257,442.77 36,822,784,749.92 28,240,257,442.77
liabilities
Total liabilities 253,148,710,864.63 229,227,597,889.80 253,194,721,565.51 229,227,597,889.80
Total liabilities and
355,024,758,878.82 286,630,030,242.19 355,070,769,579.70 286,630,030,242.19
shareholders' equity
(2) Changes in major accounting estimates
None.
IV. Taxes
Main tax categories and tax rates
Category Tax Basis Tax Rate
Value added from sales of goods or
Value-added tax 13.00%, 9.00%, 6.00%, etc.
provision of labor services
Urban maintenance
Turnover tax payable 7.00%, 5.00%
& construction tax
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Category Tax Basis Tax Rate
Education surcharge Turnover tax payable 3.00%
Local education
Turnover tax payable 2.00%
surcharge
Business income tax Taxable income 34.00%, 25.00%, 20.00%, 16.50%, 15.00%, etc.
[Note 1] The Company's subsidiaries including Gree Hong Kong Electric Appliances Sales Co., Ltd.,
Yinlong Electric Vehicle (Hong Kong) Group Co., Ltd., and Energy Storage Technology (China) Group
Co., Ltd., operate in Hong Kong Special Administrative Region, where the profit tax rate is 16.50%.
[Note 2] The Company's subsidiaries Gree (Brazil) Electric Appliances Co., Ltd. and Brazil United
Electric Appliances Industry and Commerce Co., Ltd. operate in Brazil, with a federal business income
tax rate of 34.00% in Brazil.
[Note 3] The Company's subsidiaries DunAn Precision Machinery (USA) Group Co., Ltd., DunAn
Microstaq, Inc., and Altairnano, Inc., operate in the United States, and are subject to paying federal taxes
and state taxes. The federal tax rate is 21.00% while the state tax rates for DunAn Precision and DunAn
Microstaq, are 0.50%1.00% of gross profit on sales.
[Note 4] The Company's subsidiary, DunAn Metals (Thailand) Co., Ltd. operates in Thailand, where the
business income tax rate is 20.00%.
[Note 5] The Company's subsidiary, Japan DunAn International Co., Ltd., is located in Japan, where the
business income tax rate is 23.20%.
[Note 6] The Company's subsidiary, DunAn Korea Co., Ltd. operates in South Korea, where the business
income tax rate is 10.00%.
[Note 7] The Company's subsidiary, DunAn International (Europe) GmbH operates in Frankfurt,
Germany, where the business income tax rate is 15.00%;
[Note 8] Some subsidiaries of the Company are small and low-profit enterprises, subject to the
Announcement No.12 of 2023 issued by the Ministry of Finance and the State Taxation Administration
of Announcement on Further Supporting the Development of Small and Micro Enterprises and
Individual Businesses in Relevant Tax Policies, where the taxable income is calculated at a reduced rate
of 25.00%, and the business income tax is paid at a rate of 20.00%.
Tax preferences
(1) The Company was identified as a high-tech enterprise in 2023, and has been enjoying preferential
policies for high-tech enterprises (High-tech Enterprise Certificate No. GR202344009175). The
Company applied the income tax rate of 15.00%, which is valid for 3 years.
(2) Deemed to be high and new tech enterprises, the following subsidiaries of the Company applied the
enterprise income tax rate of 15.00% in 2023.
Page 213 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Date of Obtaining
High-tech Enterprise the High-tech Valid
No. Name of Taxpayer
Certificate No. Enterprise Period
Certificate
1 Zhuhai Landa Compressor Co., Ltd. GR202344010890 December 2023 3 years
2 Hefei Landa Compressor Co., Ltd. GR202334001713 October 2023 3 years
3 Zhengzhou Landa Compressor Co., Ltd. GR202341000260 November 2023 3 years
4 Wuhan Landa Compressor Co., Ltd. GR202342000821 October 2023 3 years
5 Gree Electric Enterprise (Maanshan) Ltd. GR202334005154 November 2023 3 years
6 Zhuhai Gree Xinyuan Electronics Co., Ltd. GR202244010903 December 2022 3 years
7 Zhuhai Kaibang Motor Manufacturing Co., Ltd. GR202144007599 December 2021 3 years
8 Hefei Kaibang Motor Co., Ltd. GR202334002919 October 2023 3 years
9 Henan Kaibang Motor Co., Ltd. GR202341001262 November 2023 3 years
10 Gree (Hefei) Electric Appliances Co., Ltd. GR202334003315 October 2023 3 years
11 Zhuhai Gree Daikin Precision Mold Co., Ltd. GR202244010633 December 2022 3 years
12 Zhuhai Gree Dakin Device Co., Ltd. GR202144007849 December 2021 3 years
Green Refrigeration Equipment Engineering
13 GR202344006183 December 2023 3 years
Research Center of Zhuhai Gree Group Co., Ltd.
14 Gree (Zhengzhou) Electric Appliances Co., Ltd. GR202341000272 November 2023 3 years
15 Gree (Wuhan) Electric Appliances Co., Ltd. GR202242006898 November 2022 3 years
Gree (Shijiazhuang) Small Home Appliances
16 GR202213000723 October 2022 3 years
Co., Ltd.
17 Gree (Wuhu) Electric Appliances Co., Ltd. GR202334001396 October 2023 3 years
18 Gree (Shijiazhuang) Electric Appliances Co., Ltd. GR202213000331 October 2022 3 years
19 Zhuhai EWPE Information Technology Inc. GR202244010117 December 2022 3 years
20 Gree (Changsha) HVAC Equipment Co., Ltd. GR202343003172 October 2023 3 years
Gree TOSOT (Suqian) Home Appliances Co.,
21 GR202332019062 December 2023 3 years
Ltd.
22 Wuhu Gree Precision Manufacturing Co., Ltd. GR202234003673 October 2022 3 years
23 Zhuhai Gree Precision Mold Co., Ltd. GR202344006995 December 2023 3 years
Zhuhai Gree Intelligent Equipment Technology
24 GR202344006963 December 2023 3 years
Institute Co., Ltd.
25 Gree New Material Co., Ltd. GR202244008332 December 2022 3 years
26 Gree (Hangzhou) Electric Appliances Co., Ltd. GR202333008152 December 2023 3 years
27 Gree (Nanjing) Electric Appliances Co., Ltd. GR202232008326 November 2022 3 years
28 Gree (Luoyang) Electric Appliances Co., Ltd. GR202241002986 December 2022 3 years
29 Zhuhai Edgeless Integrated Circuit Co., Ltd. GR202144007551 December 2021 3 years
30 Hefei Kinghome Electrical Co., Ltd. GR202134001678 September 2021 3 years
Zhuhai Gree Mechanical and Electrical
31 GR202344009878 December 2023 3 years
Engineering Co., Ltd.
Page 214 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Date of Obtaining
High-tech Enterprise the High-tech Valid
No. Name of Taxpayer
Certificate No. Enterprise Period
Certificate
Zhuhai Gree Green Renewable Resources Co.,
32 GR202244004245 December 2022 3 years
Ltd.
33 Gree Altairnano New Energy Inc. GR202144004177 December 2021 3 years
34 Zhuhai Guangtong Automobile Co., Ltd. GR202344009746 December 2023 3 years
Zhuhai Gree Altairnano Electric Appliance Co.,
35 GR202144006478 December 2021 3 years
Ltd.
36 Hebei Gree Titanium New Energy Co., Ltd. GR202213004750 December 2022 3 years
37 Northern Aotai Nanotechnologies Co., Ltd. GR202113001126 September 2021 3 years
38 Zhuhai Gree Intelligent Equipment Co., Ltd. GR202244003127 December 2022 3 years
39 Zhejiang DunAn Thermal Technology Co., Ltd. GR202333008719 December 2023 3 years
40 Zhuhai DunAn Thermal Technology Co., Ltd. GR202144001846 December 2021 3 years
41 Tianjin Huaxin Machinery Co., Ltd. GR202212000479 November 2022 3 years
42 Hangzhou Safety Equipment Co., Ltd. GR202333000665 December 2023 3 years
43 Zhejiang DunAn Hetian Metals Co., Ltd. GR202133006933 December 2021 3 years
44 Zhuhai Huayu Metal Co., Ltd. GR202144002525 December 2021 3 years
45 Chongqing Huachao Metal Co., Ltd. GR202151100597 November 2021 3 years
46 Zhejiang DunAn Machinery Co., Ltd. GR202133002758 December 2021 3 years
Zhejiang DunAn Electro-Mechanical Technology
47 GR202133001775 December 2021 3 years
Co., Ltd.
48 Suzhou Huayue Metal Co., Ltd. GR202332005590 November 2023 3 years
DunAn Automotive Thermal Management
49 GR202333001123 December 2023 3 years
Technology Co., Ltd.
50 Jiangsu Tongsheng Heat Exchanger Co., Ltd. GR202332010309 December 2023 3 years
Jilin Songliang Seed Industry Technology Co.,
51 GR202222000173 November 2022 3 years
Ltd.
DunAn (Wuhu) Zhongyuan Automatic Control
52 GR202134000039 September 2021 3 years
Co., Ltd.
(3) The following subsidiaries of the Company enjoy the country's western development policy, and
applied the income tax rate of 15.00%.
No. Name of Taxpayer Start time
1 Gree (Chongqing) Electric Appliances Co., Ltd. 2008/1/1
2 Chongqing Landa Compressor Co., Ltd. 2015/1/1
3 Chongqing Kaibang Motor Co., Ltd. 2013/1/1
4 Gree Chengdu Xinhui Medical Equipment Co., Ltd. 2020/4/8
5 Gree (Chengdu) Electric Appliances Co., Ltd. 2022/1/1
Page 215 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
No. Name of Taxpayer Start time
6 Gree (Ganzhou) Electric Appliances Co., Ltd. 2023/1/1
7 Chengdu Guangtong Automobile Co., Ltd. 2017/6/13
(4) The following subsidiaries of the Company are entitled to enjoy the preferential policy of business
income tax in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, with an income tax rate of
15.00%.
No. Name of Taxpayer Start time
1 Zhuhai Mingruida Supply Chain Technology Co., Ltd. 2022/1/1
(5) According to the Announcement on the Value-Added Tax Deduction Policy for Advanced
Manufacturing Enterprises (Announcement No. 43 of 2023 issued by the Ministry of Finance and the State
Taxation Administration), from January 1, 2023 to December 31, 2027, advanced manufacturing
enterprises are allowed to deduct the value-added tax payable by an additional 5% of the deductible input
tax amount in the current period; the Company and some of its subsidiaries enjoy the above preferential
policies.
(6) According to the Notice of the Ministry of Finance and the State Taxation Administration on Value-
added Tax Policies for Software Products (CS [2011] No. 100), general value-added taxpayers who sell
software products developed and produced by themselves will be subject to refund policy for the portion of
their actual value-added tax burden exceeding 3%. Some subsidiaries of the Company are subject to value-
added tax refund if the actual value-added tax burden exceeds 3%.
V. Notes to items in consolidated financial statements
For the following note items (including notes to the main items of the parent company's financial
statements), unless otherwise specified, "the end of the period" means December 31, 2023, "the beginning
of the period" means January 1, 2023, and "the end of the previous year" means December 31, 2022, "the
current year" refers to 2023, and "the previous year" refers to 2022. Unless otherwise stated, the amount
unit is Yuan.
Monetary funds
Item Ending Balance Beginning balance
Cash on hand 747,248.45 678,327.53
Bank deposit 57,386,642,916.17 67,106,080,448.62
Other monetary funds [Note 1] 35,532,754,818.90 48,296,387,517.05
Deposits in the central bank [Note 2] 1,388,929,188.19 1,267,324,345.11
Deposits in other banks 23,842,392,737.43 36,150,447,388.93
Subtotal 118,151,466,909.14 152,820,918,027.24
Accrued interest 5,953,520,380.48 4,663,414,224.15
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Total 124,104,987,289.62 157,484,332,251.39
Including the total amount deposited outside mainland
512,193,597.72 480,814,074.59
China
[Note 1] The balance at the end of the period of other monetary capital refers to banks' acceptance bill
deposits, guarantee deposits, letter of credit deposits, etc., where the restricted fund was
RMB35,062,650,448.84;
[Note 2] The statutory deposit reserve in the Company's deposits in the central bank is
RMB1,382,019,092.73, and its use is restricted;
[Note 3] Except in above situations, there are no other funds in the ending balance of monetary funds
that are restricted in use or have potential recovery risks due to mortgage, pledge or freezing.
Trading financial assets
Item Ending Balance Beginning balance
Financial assets measured at fair value with changes
9,614,423,403.40 3,867,203,363.52
included in other comprehensive income
Including: Debt instrument investment 9,591,172,203.40 3,845,900,963.52
Equity instrument investments 23,251,200.00 21,302,400.00
Total 9,614,423,403.40 3,867,203,363.52
Derivative financial assets
Item Ending Balance Beginning balance
Foreign exchange derivatives 108,919,513.22
Total 108,919,513.22
Notes receivable
(1) Notes receivable presentation by categories
Item Ending Balance Beginning balance
Trade acceptance draft 87,340,130.52 6,818,428.95
Total 87,340,130.52 6,818,428.95
(2) Notes receivable have pledged at the end of the period
None.
(3) Notes receivable that have been endorsed or discounted at the end of the period and have not yet due
on the balance sheet date
Amount Derecognized at the Amount Recognized at the
Item
End of the Period End of the Period
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount Derecognized at the Amount Recognized at the
Item
End of the Period End of the Period
Trade acceptance draft 2,600,520.63
Total 2,600,520.63
Accounts receivable
(1) Accounts receivable disclosed by account age
Account age Ending Balance Beginning balance
Within 1 year 13,969,080,305.98 12,746,203,387.66
12 years 1,399,796,274.58 1,416,147,908.71
23 years 1,134,033,141.29 877,548,093.14
Over 3 years 3,089,537,345.23 2,577,872,659.51
Subtotal 19,592,447,067.08 17,617,772,049.02
Less: Bad debt reserves 3,492,969,949.52 2,793,029,425.57
Total 16,099,477,117.56 14,824,742,623.45
[Note] The Company's accounts receivable with an account age of over 1 year are mainly subsidy
receivables for dismantling waste electrical and electronic products and payments for new energy vehicles.
(2) Bad debt accrual method by categories
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proporti Credit loss
Amount Amount
on (%) rate (%)
Accounts receivable with bad
debt reserves accrued by 1,289,240,411.21 6.58 1,183,947,802.62 91.83 105,292,608.59
individual item
Accounts receivable with bad
debt reserves accrued by 18,303,206,655.87 93.42 2,309,022,146.90 12.62 15,994,184,508.97
portfolios
Including: Account age
16,283,805,825.87 83.11 1,906,323,339.24 11.71 14,377,482,486.63
portfolio
Low-risk portfolio 2,019,400,830.00 10.31 402,698,807.66 19.94 1,616,702,022.34
Total 19,592,447,067.08 100.00 3,492,969,949.52 17.83 16,099,477,117.56
(Continued)
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proport Credit loss
Amount Amount
ion (%) rate (%)
Accounts receivable with bad
debt reserves accrued by 1,345,411,996.82 7.64 1,116,288,302.43 82.97 229,123,694.39
individual item
Accounts receivable with bad
debt reserves accrued by 16,272,360,052.20 92.36 1,676,741,123.14 10.30 14,595,618,929.06
portfolios
Including: Account age
14,562,451,303.20 82.65 1,475,714,843.63 10.13 13,086,736,459.57
portfolio
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proport Credit loss
Amount Amount
ion (%) rate (%)
Low-risk portfolio 1,709,908,749.00 9.71 201,026,279.51 11.76 1,508,882,469.49
Total 17,617,772,049.02 100.00 2,793,029,425.57 15.85 14,824,742,623.45
1) Accounts receivable with bad debt reserves accrued by individual item
Ending Balance
Company Name
Credit loss
Book balance Bad debt reserves Reason for accruing
rate (%)
It is expected to be
69 units in total 1,289,240,411.21 1,183,947,802.62 91.83 difficult to recover
in full
Total 1,289,240,411.21 1,183,947,802.62 91.83
(Continued)
Beginning balance
Company Name
Credit loss
Book balance Bad debt reserves Reason for accruing
rate (%)
It is expected to be
69 units in total 1,345,411,996.82 1,116,288,302.43 82.97 difficult to recover
in full
Total 1,345,411,996.82 1,116,288,302.43 82.97
2) In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio
Ending Balance
Account age
Book balance Bad debt reserves Credit loss rate (%)
Within 1 year 13,447,724,928.12 672,386,248.32 5.00
12 years 1,072,880,131.92 203,605,581.83 18.98
23 years 792,595,070.82 229,609,905.14 28.97
Over 3 years 970,605,695.01 800,721,603.95 82.50
Total 16,283,805,825.87 1,906,323,339.24 11.71
3) In the portfolios, the Accounts receivable with bad debt reserves accrued by low risk portfolio
Ending Balance
Company Name
Book balance Bad debt reserves Credit loss rate (%)
Low-risk portfolio 2,019,400,830.00 402,698,807.66 19.94
Total 2,019,400,830.00 402,698,807.66 19.94
(3) Bad debt reserves accrued, recovered or reversed in the current period
Change of the current period
Category Beginning balance Ending Balance
Accrual/recovery/trans
Write-off
ferring back
Accrual by individual
1,116,288,302.43 67,659,500.19 1,183,947,802.62
item
Account age portfolio 1,475,714,843.63 430,660,213.05 51,717.44 1,906,323,339.24
Page 219 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Change of the current period
Category Beginning balance Ending Balance
Accrual/recovery/trans
Write-off
ferring back
Low-risk portfolio 201,026,279.51 201,672,528.15 402,698,807.66
Total 2,793,029,425.57 699,992,241.39 51,717.44 3,492,969,949.52
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Accounts receivable actually written off in the current period
Item Written Off Amount
10 units in total 51,717.44
Total 51,717.44
(5) Accounts receivable and contract assets of the top 5 debtors in terms of ending balance collected by
debtors
The total amount of accounts receivable and contract assets of the top 5 debtors in terms of ending balance
collected by debtors is RMB4,925,454,628.46, accounting for 23.54% of the ending balance of accounts
receivable and contract assets, and the amount of bad debt provision is RMB1,062,641,020.88.
Contract assets
(1) Contract assets
Ending Balance Beginning balance
Item
Impairment Impairment
Book balance Book Value Book balance Book Value
provision provision
Accrual
by
7,841,594.46 7,841,594.46 7,841,594.46 7,841,594.46
individua
l item
Account
age 1,006,698,488.92 422,787,788.10 583,910,700.82 1,127,165,757.29 395,385,285.59 731,780,471.70
portfolio
Low-risk
317,305,464.00 62,404,031.17 254,901,432.83 382,514,539.00 66,555,192.76 315,959,346.24
portfolio
Total 1,331,845,547.38 493,033,413.73 838,812,133.65 1,517,521,890.75 469,782,072.81 1,047,739,817.94
(2) Bad debt reserves accrued, recovered or reversed in the current period
Accrual/recovery/transferrin
Item Beginning balance Total
g back in the current period
Accrual by individual item 7,841,594.46 7,841,594.46
Account age portfolio 395,385,285.59 27,402,502.51 422,787,788.10
Low-risk portfolio 66,555,192.76 -4,151,161.59 62,404,031.17
Total 469,782,072.81 23,251,340.92 493,033,413.73
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(3) Contract assets actually written off in the current period
None.
Receivables financing
Page 220 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
(1) Receivables financing presentation by categories
Item Ending Balance Beginning balance
Notes receivable measured at fair value 9,795,997,038.02 28,274,911,539.46
Including: Bank acceptance draft 9,652,625,873.81 28,016,413,651.48
Financial company acceptance bill 143,371,164.21 258,497,887.98
Accounts receivable measured at fair value 380,092,630.39 152,398,805.74
Including: Accounts receivable 380,092,630.39 152,398,805.74
Total 10,176,089,668.41 28,427,310,345.20
(2) Receivables financing pledged by the Company at the end of the period
Item Pledged Amount at the End of the Period
Banker's acceptance bill 5,033,716,307.04
Total 5,033,716,307.04
(3) Receivables financing that has been endorsed or discounted by the Company at the end of the period
but not yet due at the balance sheet date
Amount Derecognized at the Amount Recognized at the
Item
End of the Period End of the Period
Banker's acceptance bill 30,462,789,477.03
Financial company acceptance bill 981,153.01
Total 30,463,770,630.04
(4) Receivables financing credit impairment provision of accounts receivable
1) Credit impairment provision accrued by portfolios
Ending Balance
Item Bad debt reserves
Book balance Change in fair value Book Value
Accounts receivable 380,092,630.39 380,092,630.39 22,939,575.95
Total 380,092,630.39 380,092,630.39 22,939,575.95
2) Changes in credit impairment provision
Accrual/recovery/transferrin
Item Beginning balance Ending Balance
g back
Accounts receivable 18,346,188.11 4,593,387.84 22,939,575.95
Total 18,346,188.11 4,593,387.84 22,939,575.95
(5) Receivables financing actually written off in the current period
None.
Advance payments
(1) Prepayments presented by account age
Account age Ending Balance Beginning balance
Page 221 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount Proportion (%) Amount Proportion (%)
Within 1 year 2,305,877,292.53 92.51 2,099,933,220.14 89.56
12 years 43,605,485.46 1.75 188,034,392.04 8.02
23 years 98,923,012.64 3.97 9,925,947.44 0.42
Over 3 years 44,241,604.68 1.77 46,775,285.86 2.00
Total 2,492,647,395.31 100.00 2,344,668,845.48 100.00
(2) Significant prepayments aged over one year
None.
(3) Prepayments of the top 5 prepayment objects in terms of ending balance collected by prepayment
objects
The aggregate balance amount of prepayments of the top 5 suppliers in the balance collected by the
supplier was RMB1,474,084,591.94, accounting for 59.14% of the total balance of prepayments at the
end of the period.
Other receivables
Item Ending Balance Beginning balance
Dividends receivable 19,936,649.83 1,260,498.66
Other receivables [Note 1] 806,621,972.59 803,017,460.14
Total 826,558,622.42 804,277,958.80
[Note 1] Other receivables in the table above refer to other receivables after deduction of interest
receivables and dividends receivable;
[Note 2] The Company has no interest receivable balance at the end and the beginning of the period.
(1) Dividends receivable
1) Dividends receivable
Item Ending Balance Beginning balance
Dividends receivable 19,936,649.83 1,260,498.66
Total 19,936,649.83 1,260,498.66
2) Important dividends receivable aged over 1 year
None.
(2) Other receivables
1) Disclosure by account age
Account age Ending Balance Beginning balance
Within 1 year 559,642,182.51 175,729,511.54
12 years 49,650,562.46 411,297,254.70
23 years 87,315,224.98 100,645,380.37
Page 222 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Account age Ending Balance Beginning balance
Over 3 years 559,302,826.00 500,287,750.22
Subtotal 1,255,910,795.95 1,187,959,896.83
Less: Bad debt reserves 449,288,823.36 384,942,436.69
Total 806,621,972.59 803,017,460.14
2) Classification by nature of payment
Nature of payment Ending Balance Beginning balance
Intercourse funds 763,529,291.78 661,459,896.83
Equity and asset transfer payments 492,381,504.17 526,500,000.00
Subtotal 1,255,910,795.95 1,187,959,896.83
Less: Bad debt reserves 449,288,823.36 384,942,436.69
Total 806,621,972.59 803,017,460.14
3) Disclosure by classification of bad debt reserves accrual methods
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Other accounts receivable with
bad debt reserves accrued by 510,787,480.98 40.67 354,908,028.59 69.48 155,879,452.39
individual item
Other accounts receivable with
bad debt reserves accrued by 745,123,314.97 59.33 94,380,794.77 12.67 650,742,520.20
portfolios
Including: Account age
745,123,314.97 59.33 94,380,794.77 12.67 650,742,520.20
portfolio
Total 1,255,910,795.95 100.00 449,288,823.36 35.77 806,621,972.59
(Continued)
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Other accounts receivable with
bad debt reserves accrued by 510,842,233.78 43.00 298,353,952.59 58.40 212,488,281.19
individual item
Other accounts receivable with
bad debt reserves accrued by 677,117,663.05 57.00 86,588,484.10 12.79 590,529,178.95
portfolios
Including: Account age
677,117,663.05 57.00 86,588,484.10 12.79 590,529,178.95
portfolio
Total 1,187,959,896.83 100.00 384,942,436.69 32.40 803,017,460.14
Other accounts receivable with bad debt reserves accrued by individual item
Ending Balance
Company Name
Credit loss rate
Book balance Bad debt reserves Reason for accruing
(%)
It is expected to be
Unit 1 172,325,809.58 129,244,357.19 75.00
difficult to to
Page 223 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance
Company Name
Credit loss rate
Book balance Bad debt reserves Reason for accruing
(%)
Recover in full
It is expected to be
Unit 2 221,500,000.00 110,750,000.00 50.00 difficult to recover
in full
It is expected to be
13 units remaining 116,961,671.40 114,913,671.40 98.25 difficult to recover
in full
Total 510,787,480.98 354,908,028.59 69.48
(Continued)
Beginning balance
Company Name
Credit loss rate
Book balance Bad debt reserves Reason for accruing
(%)
It is expected to be
Unit 1 172,380,562.38 86,190,281.19 50.00 difficult to recover
in full
It is expected to be
Unit 2 221,500,000.00 110,750,000.00 50.00 difficult to recover
in full
It is expected to be
13 units remaining 116,961,671.40 101,413,671.40 86.71 difficult to recover
in full
Total 510,842,233.78 298,353,952.59 58.40
Other receivables in the portfolio with the accrual of bad debt reserves by the aging
Ending Balance
Account age
Book balance Bad debt reserves Credit loss rate (%)
Within 1 year 559,642,182.51 27,982,109.24 5.00
12 years 48,506,430.27 6,714,536.70 13.84
23 years 85,315,224.98 12,990,629.28 15.23
Over 3 years 51,659,477.21 46,693,519.55 90.39
Total 745,123,314.97 94,380,794.77 12.67
4) Accrual of bad debt reserves
Phase I Phase II Phase III
Expected credit loss for
Bad debt reserves Expected credit Expected credit loss for Total
the entire duration (no
losses in the the entire duration (credit
credit impairment
next 12 months impairment occurred)
occurred)
Beginning balance 8,562,921.73 376,379,514.96 384,942,436.69
Accrual in the current
19,419,187.51 44,967,199.16 64,386,386.67
period
Wrote-off in the current
40,000.00 40,000.00
period
Ending Balance 27,982,109.24 421,306,714.12 449,288,823.36
5) Bad debt reserves accrued, recovered or reversed in the current period
Category Beginning balance Change of the current period Ending Balance
Page 224 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Accrual/recovery/tra
Write-off
nsferring back
Accrual by individual
298,353,952.59 56,554,076.00 354,908,028.59
item
Account age portfolio 86,588,484.10 7,832,310.67 40,000.00 94,380,794.77
Total 384,942,436.69 64,386,386.67 40,000.00 449,288,823.36
[Note] There is no significant recovery or transfer back of bad debt reserves during the current period.
6) Other receivables were actually written off in the current period
Item Written Off Amount
1 units in total 40,000.00
7) Other receivables of top 5 debtors in terms of ending balance collected by debtors
The total amount of other receivables of top 5 debtors in terms of ending balance collected by debtors is
RMB751,557,816.50, accounting for 59.84% of the total balance of ending balance of other receivables,
and the amount of bad debt provision is RMB260, 736,456.91.
8) Other receivables due to centralized fund management
None.
Buying back the sale of financial assets
Item Ending Balance Beginning balance
Bonds 3,930,985,000.00
Accrued interest 4,431,450.15
Subtotal 3,935,416,450.15
Less: Provision for impairment 3,077,495.66
Total 3,932,338,954.49
Inventory
(1) Classification of inventories
Ending Balance
Item Inventory falling price
reserves/impairment
Book balance Book Value
provision of contract
performance costs
Raw materials 7,057,081,762.87 1,425,810,833.17 5,631,270,929.70
Goods in process and
2,134,877,242.86 115,317,125.00 2,019,560,117.86
contract performance costs
Finished goods 21,827,045,795.09 2,943,541,383.93 18,883,504,411.16
Development costs 5,674,994,638.60 5,674,994,638.60
Development products 369,809,931.38 369,809,931.38
Total 37,063,809,370.80 4,484,669,342.10 32,579,140,028.70
(Continued)
Page 225 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance
Inventory falling price
Item
reserves/impairment
Book balance Book Value
provision of contract
performance costs
Raw materials 10,672,997,728.11 1,009,327,287.63 9,663,670,440.48
Goods in process and
2,403,582,415.78 2,403,582,415.78
contract performance costs
Finished goods 23,183,839,506.90 1,770,944,083.73 21,412,895,423.17
Development costs 4,834,028,484.47 4,834,028,484.47
Total 41,094,448,135.26 2,780,271,371.36 38,314,176,763.90
(2) Inventory falling price reserves and impairment provision of contract performance costs
Increased amount in the Decreased amount in
current period the current period
Item Beginning balance Ending Balance
Accrual Write-off amount
Raw materials 1,009,327,287.63 520,096,944.19 103,613,398.65 1,425,810,833.17
Unfinished goods 115,317,125.00 115,317,125.00
Finished goods 1,770,944,083.73 1,442,784,118.73 270,186,818.53 2,943,541,383.93
Total 2,780,271,371.36 2,078,198,187.92 373,800,217.18 4,484,669,342.10
Specific bases for making a provision for the decline in the value of inventories and reasons for reversing
or writing off the provision for the decline in the value of inventories in the current period:
The specific basis for making a provision for the Write-off of inventory falling price reserves in
Item
decline in value of inventories the current period
Inventory cost or net realizable value, whichever
Raw materials Received or sold in the current period
is lower
Inventory cost or net realizable value, whichever
Unfinished goods Received or sold in the current period
is lower
Inventory cost or net realizable value, whichever
Finished goods Sold in the current period
is lower
(3) Capitalization amount of borrowing costs included in the ending balance of inventory
None.
(4) Amortization amount of contract performance costs in the current year of RMB272,628,491.22.
Non-current assets due within one year
Item Ending Balance Beginning balance
Other debt investments are due within 1 year 2,181,118,917.45 3,000,000,000.00
Long-term receivables due within 1 year 55,162,876.25 41,094,547.81
Subtotal 2,236,281,793.70 3,041,094,547.81
Add: Accrued interest of other debt investments due within
176,614,895.44 275,847,602.74
1 year
Less: Provision for impairment 1,263,229.85 2,750,517.36
Total 2,411,633,459.29 3,314,191,633.19
Page 226 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other current assets
Item Ending Balance Beginning balance
Input tax to be deducted and prepaid tax 2,225,932,314.59 2,057,987,526.82
Bond products 100,000,000.00
Monetary investment products 22,059,399,315.54 2,415,000,000.00
Others 181,031,697.63 189,229,261.68
Subtotal 24,566,363,327.76 4,662,216,788.50
Add: Accrued interests 341,107,724.98 72,656,393.15
Less: Provision for impairment 38,529,298.59 30,296,241.01
Total 24,868,941,754.15 4,704,576,940.64
Disbursement of loans and advances
(1) Distribution of enterprises and individuals
Item Ending Balance Beginning balance
Loans and advances measured at amortized costs:
Issuance of corporate loans and advances 558,000,000.00 737,270,000.00
Including: (1) Loans 558,000,000.00 492,550,000.00
(2) Discount 244,720,000.00
Subtotal 558,000,000.00 737,270,000.00
Add: Accrued interests 671,437.49 961,030.27
Less: Provision for impairment 14,944,828.26 18,431,750.00
Book value of issued corporate loans and advances 543,726,609.23 719,799,280.27
(2) Changes in loan loss reserves
Item Ending Balance Beginning balance
Beginning balance 18,431,750.00 106,975,750.00
Transferring back to the current period 3,486,921.74 88,544,000.00
Ending Balance 14,944,828.26 18,431,750.00
Debt investment
(1) Debt investment
Ending Balance Beginning balance
Impai Impair
Item rment ment
Book balance Book Value Book balance Book Value
provi provis
sion ion
Debt investment 1,149,000,000.00 1,149,000,000.00 150,000,000.00 150,000,000.00
Accrued interest 1,744,482.05 1,744,482.05 351,500.00 351,500.00
Page 227 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance Beginning balance
Impai Impair
Item rment ment
Book balance Book Value Book balance Book Value
provi provis
sion ion
Total 1,150,744,482.05 1,150,744,482.05 150,351,500.00 150,351,500.00
(2) Debt investment
Ending Balance Beginning balance
Item Effective Effective
Coupon Coupon
Face value interest Date Due Face value interest Date Due
rate rate
rate rate
Jinyu
Guoshi 999,000,000.00 5.30% 5.30% 2025-9-30
trust plan
(Twenty-
six)
Agricultura
150,000,000.00 2.28% 2.28% 2025-11-25 150,000,000.00 2.28% 2.28% 2025-11-25
l Bank
treasury
bonds
Total 1,149,000,000.00 150,000,000.00
(3) Accrual of impairment provision
None.
Page 228 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other debt investments
(1) Other debt investments
Ending Balance
Accumulated
loss reserves
Item
recognized in
Cost Accrued interest Change in fair value Book Value
other
comprehensive
income
Treasury bond 316,621,828.84 3,551,890.42 6,786,591.16 326,960,310.42
Corporate bonds and financial bonds 899,720,207.58 14,149,657.51 9,897,862.42 923,767,727.51
Negotiable certificate of deposit 16,667,335,007.45 803,512,433.47 17,470,847,440.92
Subtotal 17,883,677,043.87 821,213,981.40 16,684,453.58 18,721,575,478.85
Less: Other debt investments due
2,180,334,092.16 176,614,895.44 784,825.29 2,357,733,812.89
within 1 year
Total 15,703,342,951.71 644,599,085.96 15,899,628.29 16,363,841,665.96
(Continued)
Beginning balance
Accumulated
loss reserves
Item
recognized in
Cost Accrued interest Change in fair value Book Value
other
comprehensive
income
Treasury bond 315,342,376.29 3,551,890.42 8,069,643.71 326,963,910.42
Corporate bonds and financial bonds 699,557,264.91 13,484,589.02 -12,404,624.91 700,637,229.02
Negotiable certificate of deposit 16,052,655,138.75 535,940,207.52 16,588,595,346.27
Subtotal 17,067,554,779.95 552,976,686.96 -4,334,981.20 17,616,196,485.71
Page 229 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance
Accumulated
loss reserves
Item
recognized in
Cost Accrued interest Change in fair value Book Value
other
comprehensive
income
Less: Other debt investments due
3,000,000,000.00 275,847,602.74 3,275,847,602.74
within 1 year
Total 14,067,554,779.95 277,129,084.22 -4,334,981.20 14,340,348,882.97
[Note] Other debt investment held by the Company is classified as financial assets measured at fair value with changes included in other comprehensive income
based on the management's intention and the cash flow of the contract, and listed as other debt investments, and non-current assets due within 1 year according to
its liquidity. On December 31, 2023, there was no significant difference between the cost of the Company's negotiable certificate of deposit and its fair value.
(2) Other debt investments
Ending Balance Beginning balance
Other debt items Effective Effective
Coupon Coupon
Face value interest Date Due Face value interest Date Due
rate (%) rate (%)
rate (%) rate (%)
February 26, September
2024 to 10, 2023 to
Negotiable certificate of deposit 16,667,000,000.00 3.10-4.00 3.10-4.00 16,050,000,000.00 3.20-4.00 3.20-4.00
October 21, October 21,
2027 2027
16 coupon-bearing bond 17 200,000,000.00 2.74 3.10 2026-08-04 200,000,000.00 2.74 3.10 2026-08-04
20 Nongfa 08 200,000,000.00 3.45 3.54 2025-09-23 200,000,000.00 3.45 3.54 2025-09-23
23 CZBank Tier 2 Capital Note 02 200,000,000.00 3.50 3.50 2033-11-27
22 Huafa Group MTN006 180,000,000.00 4.20 4.20 2025-04-25 180,000,000.00 4.20 4.20 2025-04-25
Page 230 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance Beginning balance
Other debt items Effective Effective
Coupon Coupon
Face value interest Date Due Face value interest Date Due
rate (%) rate (%)
rate (%) rate (%)
22 Huafa Group MTN009B 180,000,000.00 4.00 4.00 2025-06-20 180,000,000.00 4.00 4.00 2025-06-20
16 coupon-bearing bond 17 100,000,000.00 2.74 3.44 2026-08-04 100,000,000.00 2.74 3.44 2026-08-04
21 Huafa Group MTN007 70,000,000.00 4.65 4.65 2024-06-28 70,000,000.00 4.65 4.65 2024-06-28
22 Huafa Group MTN012B 60,000,000.00 3.75 3.75 2025-08-16 60,000,000.00 3.75 3.75 2025-08-16
22 coupon-bearing bond 19 20,000,000.00 2.60 2.61 2032-09-01 20,000,000.00 2.60 2.61 2032-09-01
19 Huafa Group MTN008B 10,000,000.00 5.30 5.31 2024-12-11 10,000,000.00 5.30 5.31 2024-12-11
Total 17,887,000,000.00 17,070,000,000.00
[Note] Other debt investments in the table above include other debt investments due within one year.
Page 231 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Long-term receivables
(1) Long-term receivables
Ending Balance
Item
Book balance Bad debt reserves Book Value
Goods of installment sales 186,803,996.60 26,735,849.27 160,068,147.33
Less: Unrealized financing
income 18,178,746.29 18,178,746.29
Less: Long-term accounts
receivable due within 1 year 55,162,876.25 1,263,229.85 53,899,646.40
Less: Reclassified to other
current assets 49,819,628.06 24,015,200.54 25,804,427.52
Total 63,642,746.00 1,457,418.88 62,185,327.12
(Continued)
Beginning balance
Item
Book balance Bad debt reserves Book Value
Goods of installment sales 235,996,799.59 32,095,022.13 203,901,777.46
Less: Unrealized financing
15,048,370.77 15,048,370.77
income
Less: Long-term accounts
41,094,547.81 2,750,517.36 38,344,030.45
receivable due within 1 year
Less: Reclassified to other
61,048,258.76 26,623,856.04 34,424,402.72
current assets
Total 118,805,622.25 2,720,648.73 116,084,973.52
[Note] The Company reclassifies long-term receivables due within 1 year to non-current assets due within 1
year and reclassifies overdue long-term receivables to other current assets.
(2) Disclosure by classification of bad debt reserves accrual methods
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Long-term accounts receivable
with bad debt reserves accrued
by individual item
Long-term accounts receivable
with bad debt reserves accrued 63,642,746.00 100.00 1,457,418.88 2.29 62,185,327.12
by portfolios
Including: Account age
63,642,746.00 100.00 1,457,418.88 2.29 62,185,327.12
portfolio
Total 63,642,746.00 100.00 1,457,418.88 2.29 62,185,327.12
(Continued)
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Long-term accounts receivable
with bad debt reserves accrued
by individual item
Page 232 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Long-term accounts receivable
with bad debt reserves accrued 118,805,622.25 100.00 2,720,648.73 2.29 116,084,973.52
by portfolios
Including: Account age
118,805,622.25 100.00 2,720,648.73 2.29 116,084,973.52
portfolio
Total 118,805,622.25 100.00 2,720,648.73 2.29 116,084,973.52
Long-term accounts receivable with bad debt reserves accrued by portfolios
Ending Balance
Account age
Book balance Bad debt reserves Credit loss rate (%)
Goods of installment sales 63,642,746.00 1,457,418.88 2.29
Total 63,642,746.00 1,457,418.88 2.29
(3) Bad debt reserves accrued, recovered or reversed in the current period
Accrual/recovery/transferrin
Category Beginning balance Ending Balance
g back
Goods of installment sales 2,720,648.73 -1,263,229.85 1,457,418.88
Total 2,720,648.73 -1,263,229.85 1,457,418.88
(4) Long-term accounts receivable were actually written off in the current period
None.
Page 233 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Long-term equity investments
Beginning balance Increase/Decrease in the Current Period Ending Balance
Accru
Profits and Declared
Adjustment of al of
Investee losses on distribution of
Impairment Additional Decreased other impair Impairment
Original value investment cash Original value
provision Investment Investment comprehensive ment provision
recognized by dividends or
income reserv
equity method profits
es
I. Joint ventures
SL Group
Jiangwan Rice
1,166,358.97 -7,424.29 1,158,934.68
Industry Co.,
Ltd
Subtotal 1,166,358.97 -7,424.29 1,158,934.68
II. Associates
Gree (Vietnam)
Electric 1,940,009.35 1,940,009.35 1,940,009.35 1,940,009.35
Appliances, Inc.
Outlook All
35,478,374.26 509,236.20 35,987,610.46
Media Co., Ltd.
Wuhan Digital
Design and
Manufacturing 15,239,073.92 301,716.52 150,000.00 15,390,790.44
Innovation
Center Co., Ltd.
Coresing
Semiconductor
20,071,663.90 1,219,923.05 21,291,586.95
Technology
Co., Ltd.
Zhuhai Ronglin
Equity
Investment
4,131,807,804.94 279,197,890.11 -10,162,802.37 -1,020,652,263.34 2,821,794,849.12
Partnership
(Limited
Partnership)
Zhuhai Jiayao
989,000.00 -181,112.17 807,887.83
Food
Page 234 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Accru
Profits and Declared
Adjustment of al of
Investee losses on distribution of
Impairment Additional Decreased other impair Impairment
Original value investment cash Original value
provision Investment Investment comprehensive ment provision
recognized by dividends or
income reserv
equity method profits
es
Technology
Co., Ltd.
Henan Yuze
Finance
52,591,103.02 1,627,073.67 1,642,181.50 52,575,995.19
Leasing Co.,
Ltd.
Zhuhai Hanling
Equity
Investment
956,251,794.91 163,000,000.00 43,500,899.07 14,430,690.00 822,322,003.98
Partnership
(Limited
Partnership)
Lanzhou
Guangtong
New Energy 97,017,695.89 -4,781,436.49 92,236,259.40
Automobile
Co., Ltd.
Guizhou
Qianzhixing
1,528,855.03 -409,538.08 1,119,316.95
New Energy
Co., Ltd.
Ningxia
Nenggu New
Energy 194,350.24 -164,803.35 29,546.89
Technology
Co., Ltd.
Beijing Liyin
Automobile
4,605,056.55 4,605,056.55
Technology
Co., Ltd.
Sichuan Jinshi
Leasing Co., 293,539,194.32 21,397,575.85 527,247.07 4,625,461.17 310,838,556.07
Ltd.
Zhuji Rushan
53,905,361.06 21,000,000.00 193,323.38 33,098,684.44
Huiying
Page 235 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Accru
Profits and Declared
Adjustment of al of
Investee losses on distribution of
Impairment Additional Decreased other impair Impairment
Original value investment cash Original value
provision Investment Investment comprehensive ment provision
recognized by dividends or
income reserv
equity method profits
es
Venture
Investment
Partnership
(Limited
Partnership)
DunAn
(Tianjin)
Energy Saving 228,893,881.80 40,179,812.17 6,636,258.28 275,709,952.25
System Co.,
Ltd.
Subtotal 5,893,064,219.19 1,940,009.35 989,000.00 463,197,890.11 93,229,867.45 -1,013,488,757.99 20,848,332.67 4,489,748,105.87 1,940,009.35
Total 5,894,230,578.16 1,940,009.35 989,000.00 463,197,890.11 93,222,443.16 -1,013,488,757.99 20,848,332.67 4,490,907,040.55 1,940,009.35
[Note 1] The change in other comprehensive income in the current period of the joint venture of the Company, Zhuhai Ronglin Equity Investment Partnership
(Limited Partnership), is due to the fluctuation of the share price of Wingtech Technology Co., Ltd. held by it and the disposal of the equity of Wingtech Technology
Co., Ltd.;
[Note 2] According to the partnership agreement of Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Zhuhai Ronglin"),
the Company invested in Zhuhai Ronglin as a limited partner. Upon the decision of all partners, the general partner is entrusted to perform partnership affairs. For
matters related to the partnership submitted by the general partner to all partners for discussion, the voting method of one partner, one vote, and unanimously
approved by all partners is implemented to make resolutions. The Company has no control over Zhuhai Ronglin, and Zhuhai Ronglin is not included in the scope of
consolidation of the Company's statements during the report period.
Other equity instrument investments
(1) Other equity instrument investments
Item Ending Balance Beginning balance
Page 236 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
San'an Optoelectronics Co., Ltd. 1,586,483,387.45 1,965,635,734.92
Wingtech Technology Co., Ltd. 1,517,194,078.45 1,885,465,957.10
Shanghai Highly (Group) Co., Ltd. 626,491,486.09 522,205,716.62
RSMACALLINE-HSHS 125,653,291.82 143,361,786.48
COFCO Trading (Suibin) Agricultural Development Co.,
7,000,000.00 7,000,000.00
Ltd.
Xinjiang Joinworld Company Limited 2,043,265.56 145,786,602.78
Total 3,864,865,509.37 4,669,455,797.90
(2) Non-trading equity instrument investment
Reasons for
Accumulated Amount Reason for
Accumulated gains amount
Gains included in Losses included losses included in transferred designation as
included in other transferred
Dividend other in other other from other measured at fair value
comprehensive from other
Item income comprehensive comprehensive comprehensive comprehensive with changes
income at the end comprehensive
recognized income in the income in the income at the end income to included in other
of the current income to
current period current period of the current retained comprehensive
period retained
period earnings income
earnings
Based on the
San'an
management's
Optoelectronics Co., 5,727,376.85 379,152,347.47 413,516,612.55
intention and
Ltd.
contractual cash flow
Based on the
RSMACALLINE- management's
4,553,508.27 27,806,733.63 583,728,425.60
HSHS intention and
contractual cash flow
Based on the
Shanghai Highly management's
961,076.44 103,698,375.62 519,052,993.48
(Group) Co., Ltd. intention and
contractual cash flow
COFCO Trading Based on the
(Suibin) Agricultural management's
800,000.00
Development Co., intention and
Ltd. contractual cash flow
Page 237 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Reasons for
Accumulated Amount Reason for
Accumulated gains amount
Gains included in Losses included losses included in transferred designation as
included in other transferred
Dividend other in other other from other measured at fair value
comprehensive from other
Item income comprehensive comprehensive comprehensive comprehensive with changes
income at the end comprehensive
recognized income in the income in the income at the end income to included in other
of the current income to
current period current period of the current retained comprehensive
period retained
period earnings income
earnings
Based on the
Xinjiang Joinworld management's Sales of some
98,776.65 69,223,001.27 842,749.35 83,614,348.15
Company Limited intention and shares
contractual cash flow
Based on the
Wingtech management's
368,271,878.65 632,194,081.85
Technology Co., Ltd. intention and
contractual cash flow
Total 12,140,738.21 103,698,375.62 844,453,961.02 633,036,831.20 1,516,298,031.63 83,614,348.15
Page 238 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other non-current financial assets
Item Ending Balance Beginning balance
Financial assets measured at fair value with changes included in other
4,428,003,204.49
comprehensive income
Total 4,428,003,204.49
Investment real estate
Investment real estate using cost measurement model
Item Houses and buildings Land use rights Total
I. Original book value
1. Beginning balance 1,031,496,189.10 50,861,964.09 1,082,358,153.19
2. Increased amount in the current period 119,082,596.25 119,082,596.25
Including: (1) Transfer-in from fixed assets 115,729,609.69 115,729,609.69
(2) Transfer-in from construction in
3,352,986.56 3,352,986.56
progress
3. Decreased amount in the current period 19,783,075.82 19,783,075.82
Including: Transfer to fixed assets 19,783,075.82 19,783,075.82
4. Ending balance 1,130,795,709.53 50,861,964.09 1,181,657,673.62
II. Accumulated depreciation and accumulated
amortization
1. Beginning balance 435,542,379.87 12,126,571.34 447,668,951.21
2. Increased amount in the current period 111,573,872.36 906,133.57 112,480,005.93
Including: (1) Accrual or amortization 70,886,924.36 906,133.57 71,793,057.93
(2) Transfer-in from fixed assets 40,686,948.00 40,686,948.00
3. Decreased amount in the current period 11,753,444.62 11,753,444.62
Including: Transfer to fixed assets 11,753,444.62 11,753,444.62
4. Ending balance 535,362,807.61 13,032,704.91 548,395,512.52
III. Impairment provision
IV. Book value
1. Book value at the end of the period 595,432,901.92 37,829,259.18 633,262,161.10
2. Book value at the beginning of the period 595,953,809.23 38,735,392.75 634,689,201.98
[Note] As of December 31, 2023, the book value of investment real estate houses and buildings of
which the Company has not obtained the property ownership certificates was RMB45,588,201.73.
Page 239 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Fixed assets
Item Ending Balance Beginning balance
Fixed assets [Note] 34,023,728,822.05 33,810,042,180.83
Fixed assets in liquidation 11,100,294.42 6,977,210.53
Total 34,034,829,116.47 33,817,019,391.36
[Note] The fixed assets in the table above refer to the fixed assets after deduction of the fixed assets in liquidation.
(1) Fixed assets
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total
equipment
I. Original book value
1. Beginning balance 31,875,670,110.98 27,559,215,436.70 1,494,692,518.12 2,443,114,320.58 797,370,152.11 64,170,062,538.49
2. Increased amount in the current
3,918,015,162.25 1,878,246,110.96 127,006,803.19 210,908,503.76 58,617,873.17 6,192,794,453.33
period
Including: (1) Purchase 207,940.00 780,448,700.31 127,006,803.19 210,908,503.76 58,617,873.17 1,177,189,820.43
(2) Transfer-in from
19,783,075.82 19,783,075.82
investment real estate
(3) Transfer-in from
3,898,024,146.43 1,097,797,410.65 4,995,821,557.08
construction in progress
3. Decreased amount in the
1,240,967,448.84 490,698,426.78 21,121,947.68 38,708,603.64 13,335,504.59 1,804,831,931.53
current period
Including: (1) Disposal or
1,125,237,839.15 490,698,426.78 21,121,947.68 38,708,603.64 13,335,504.59 1,689,102,321.84
scrapping
(2) Transfer to
115,729,609.69 115,729,609.69
investment real estate
4. Foreign currency financial
13,997,346.78 9,421,971.11 269,277.89 1,110,085.72 292,388.36 25,091,069.86
statement translation
5. Ending balance 34,566,715,171.17 28,956,185,091.99 1,600,846,651.52 2,616,424,306.42 842,944,909.05 68,583,116,130.15
II. Accumulated depreciation
1. Beginning balance 9,146,684,939.16 17,073,717,000.50 1,244,171,703.27 2,203,916,723.13 673,587,840.24 30,342,078,206.30
2. Increased amount in the current
1,675,573,462.96 2,542,268,079.80 115,919,795.12 224,753,815.21 87,469,381.66 4,645,984,534.75
period
Page 240 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total
equipment
Including: (1) Accrual 1,663,820,018.34 2,542,268,079.80 115,919,795.12 224,753,815.21 87,469,381.66 4,634,231,090.13
(2) Transfer-in from
11,753,444.62 11,753,444.62
investment real estate
3. Decreased amount in the
139,562,980.00 390,178,923.54 19,751,957.32 35,202,781.56 12,435,483.39 597,132,125.81
current period
Including: (1) Disposal or
98,876,032.00 390,178,923.54 19,751,957.32 35,202,781.56 12,435,483.39 556,445,177.81
scrapping
(2) Transfer to
40,686,948.00 40,686,948.00
investment real estate
4. Foreign currency financial
2,597,234.88 4,529,050.12 239,578.99 943,917.73 145,173.59 8,454,955.31
statement translation
5. Ending balance 10,685,292,657.00 19,230,335,206.88 1,340,579,120.06 2,394,411,674.51 748,766,912.10 34,399,385,570.55
III. Impairment provision
1. Beginning balance 13,788,472.27 3,861,058.83 179,924.90 112,695.36 17,942,151.36
2. Increased amount in the current
43,997,287.74 97,206,774.93 244,907.04 33,041.95 578,646.91 142,060,658.57
period
Including: Accrual 43,997,287.74 97,206,774.93 244,907.04 33,041.95 578,646.91 142,060,658.57
3. Decreased amount in the
98,088.74 18,146.27 116,235.01
current period
Including: Disposal or scrapping 98,088.74 18,146.27 116,235.01
4. Foreign currency financial
115,162.63 115,162.63
statement translation
5. Ending balance 57,785,760.01 101,084,907.65 244,907.04 194,820.58 691,342.27 160,001,737.55
IV. Book value
1. Book value at the end of the
23,823,636,754.16 9,624,764,977.46 260,022,624.42 221,817,811.33 93,486,654.68 34,023,728,822.05
period
2. Book value at the beginning of
22,715,196,699.55 10,481,637,377.37 250,520,814.85 239,017,672.55 123,669,616.51 33,810,042,180.83
the period
Page 241 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
[Note] As of December 31, 2023, the book value of the Company's fixed assets houses and buildings of which the Company has not obtained the certificate of
title was RMB15,446,032,647.23. The acquisition of certificate of title is mainly affected by the progress of project final acceptance, and the Company is still
processing according to the schedule.
(2) Temporary idle fixed assets
The Company has no significant temporary idle fixed assets.
(3) Fixed assets leased out through operating leases
The Company has no significant fixed assets leased out through operating leases.
(4) Fixed assets in liquidation
Item Ending Balance Beginning balance
Fixed assets in liquidation 11,100,294.42 6,977,210.53
Total 11,100,294.42 6,977,210.53
Construction in progress
Item Ending Balance Beginning balance
Construction in progress [Note] 6,563,911,378.94 5,966,678,892.16
Total 6,563,911,378.94 5,966,678,892.16
[Note] The construction in progress in the above table refers to the construction in progress after deduction of construction materials.
(1) Construction in progress
Ending Balance Beginning balance
Item Impairme
Impairment
Book balance Book Value Book balance nt Book Value
provision
provision
Gree Titanium Project 1,740,587,474.47 21,644,400.92 1,718,943,073.55 2,127,613,084.25 54,413.75 2,127,558,670.50
Zhuhai Intelligent
1,531,971,594.79 1,531,971,594.79 759,287,741.79 759,287,741.79
Manufacturing Project
Page 242 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance Beginning balance
Item Impairme
Impairment
Book balance Book Value Book balance nt Book Value
provision
provision
Zhuhai Electronic
1,257,752,616.62 1,257,752,616.62
Component Project
Gree HQ Project 827,683,995.65 827,683,995.65 460,979,229.34 460,979,229.34
Wuhan Mold Project 283,100,962.02 283,100,962.02 129,629,721.74 129,629,721.74
Zhuhai Electrical Project 165,437,659.94 165,437,659.94 41,939,278.97 41,939,278.97
Wuhan HVAC Project 111,944,374.67 111,944,374.67 22,518,193.06 22,518,193.06
Others 667,077,101.70 667,077,101.70 2,424,766,056.76 2,424,766,056.76
Total 6,585,555,779.86 21,644,400.92 6,563,911,378.94 5,966,733,305.91 54,413.75 5,966,678,892.16
(2) Currentd changes in important construction in progress
The amount Including: the
The amount
transferred to capitalization
Increased amount in transferred to fixed Disposal in the
Item Beginning balance investment real Ending Balance amount of interest
the current period assets in the current current period
estate in the in the current
period
current period period
Gree Titanium Project 2,127,613,084.25 83,545,315.94 470,570,925.72 1,740,587,474.47
Zhuhai Intelligent
759,287,741.79 1,200,486,953.15 427,803,100.15 1,531,971,594.79
Manufacturing Project
Zhuhai Electronic
1,277,560,061.16 19,807,444.54 1,257,752,616.62
Component Project
Gree HQ Project 460,979,229.34 385,390,418.43 18,685,652.12 827,683,995.65
Wuhan Mold Project 129,629,721.74 193,811,851.36 40,340,611.08 283,100,962.02 3,297,330.57
Zhuhai Electrical
41,939,278.97 134,308,569.19 10,810,188.22 165,437,659.94 1,475,468.66
Project
Wuhan HVAC
22,518,193.06 93,249,673.01 3,823,491.40 111,944,374.67
Project
Others 2,424,766,056.76 2,251,406,882.24 4,003,980,143.85 3,352,986.56 1,762,706.89 667,077,101.70 416,885.31
Page 243 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The amount Including: the
The amount
transferred to capitalization
Increased amount in transferred to fixed Disposal in the
Item Beginning balance investment real Ending Balance amount of interest
the current period assets in the current current period
estate in the in the current
period
current period period
Total 5,966,733,305.91 5,619,759,724.48 4,995,821,557.08 3,352,986.56 1,762,706.89 6,585,555,779.86 5,189,684.54
[Note] The capitalization amount of interest for the current period includes government grants for loan interest discounts.
Page 244 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Usufruct assets
Item Housing and buildings
I. Original book value
1. Beginning balance 302,875,919.25
2. Increased amount in the current period 737,787,974.66
Including: Renting 737,787,974.66
3. Decreased amount in the current period 16,037,696.01
Including: Due 16,037,696.01
4. Ending balance 1,024,626,197.90
II. Accumulated depreciation
1. Beginning balance 95,531,140.20
2. Increased amount in the current period 102,120,476.76
Including: Accrual 102,120,476.76
3. Decreased amount in the current period 15,275,927.18
Including: Due 15,275,927.18
4. Ending balance 182,375,689.78
III. Impairment provision
IV. Book value
1. Book value at the end of the period 842,250,508.12
2. Book value at the beginning of the period 207,344,779.05
Intangible assets
Item Land use rights Patent rights and others Total
I. Original book value
1. Beginning balance 11,195,701,778.22 3,605,169,628.21 14,800,871,406.43
2. Increased amount in the
45,576,665.79 9,946,571.33 55,523,237.12
current period
Including: Purchase 45,576,665.79 9,946,571.33 55,523,237.12
3. Decreased amount in the
387,560,731.04 22,609,516.77 410,170,247.81
current period
Including: (1) Disposal 387,560,731.04 17,178,156.77 404,738,887.81
(2) Write-off 5,431,360.00 5,431,360.00
4. Ending balance 10,853,717,712.97 3,592,506,682.77 14,446,224,395.74
II. Accumulated
amortization
1. Beginning balance 1,463,282,355.57 997,254,432.13 2,460,536,787.70
2. Increased amount in the
233,546,094.22 264,334,728.93 497,880,823.15
current period
Page 245 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Land use rights Patent rights and others Total
Including: Accrual 233,546,094.22 264,334,728.93 497,880,823.15
3. Decreased amount in the
52,644,262.72 9,651,617.48 62,295,880.20
current period
Including: (1) Disposal 52,644,262.72 4,220,257.48 56,864,520.20
(2) Write-off 5,431,360.00 5,431,360.00
4. Ending balance 1,644,184,187.07 1,251,937,543.58 2,896,121,730.65
III. Impairment provision
1. Beginning balance 718,481,547.30 718,481,547.30
2. Increased amount in the
8,670,282.34 13,409,396.37 22,079,678.71
current period
Including: Amortization 8,670,282.34 13,409,396.37 22,079,678.71
3. Decreased amount in the
18,153,082.74 18,153,082.74
current period
Including: (1) Disposal 12,953,296.18 12,953,296.18
(2) Write-off 5,199,786.56 5,199,786.56
4. Ending balance 8,670,282.34 713,737,860.93 722,408,143.27
IV. Book value
1. Book value at the end of
9,200,863,243.56 1,626,831,278.26 10,827,694,521.82
the period
2. Book value at the
9,732,419,422.65 1,889,433,648.78 11,621,853,071.43
beginning of the period
[Note 1] Write-off amount of intangible assets patent right and others in the current period were the
used quota licensing rights;
[Note 2] As of December 31, 2023, the book value of intangible assets of which the Company has not
obtained the property ownership certificates was RMB31,273.85.
[Note 3] No intangible assets were formed through the Company's internal research and development in
the current period.
Goodwill
(1) Original book value of goodwill
Increase in the Decrease in the
Name of Investee or matters forming Beginning current period current period
Ending Balance
goodwill balance Formed by
Disposal
business merger
Zhejiang DunAn Artificial
1,198,301,590.22 1,198,301,590.22
Environment Co., Ltd.
Gree Altairnano New Energy Inc. 612,777,583.92 612,777,583.92
Nanjing Walsin Metal Co., Ltd. 274,115,040.11 274,115,040.11
Hefei Kinghome Electrical Co., Ltd. 51,804,350.47 51,804,350.47
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Increase in the Decrease in the
Name of Investee or matters forming Beginning current period current period
Ending Balance
goodwill balance Formed by
Disposal
business merger
Shenyang Water and Heat Source
372,585.32 372,585.32
Development Co., Ltd.
Total 2,137,371,150.04 2,137,371,150.04
(2) Goodwill impairment provision
Decrease in
Increase in the current
the current
Name of Investee or matters forming Beginning period
period Ending Balance
goodwill balance
Accrual Others Disposal
Gree Altairnano New Energy Inc. 151,720,775.11 206,861,546.92 358,582,322.03
Nanjing Walsin Metal Co., Ltd. 274,115,040.11 274,115,040.11
Hefei Kinghome Electrical Co., Ltd. 51,804,350.47 51,804,350.47
Shenyang Water and Heat Source
372,585.32 372,585.32
Development Co., Ltd.
Total 478,012,751.01 206,861,546.92 684,874,297.93
(3) Information about the asset group or asset group combination in which the goodwill is located
Is it consistent
Composition and basis of the asset group or Operating segments and
Company Name with previous
combination basis
years
Operating assets of an asset group (excluding
Classified by company
Gree Altairnano non-operating assets and surplus assets), based on
management requirements Yes
asset group the asset group that can generate independent
and business modules
cash flows
Asset group of Including fixed assets, construction in progress, DunAn Hetian and
DunAn right-of-use assets, intangible assets, long-term Zhuhai Huayu, classified
Environment unamortized expenses, and other long-term by company management Yes
refrigeration assets, based on the asset group that can generate requirements and business
accessories independent cash flows modules
Including fixed assets, construction in progress, DunAn Electro-
Asset group of
right-of-use assets, intangible assets, long-term Mechanical, classified by
DunAn
unamortized expenses, and other long-term company management Yes
Environment
assets, based on the asset group that can generate requirements and business
equipment
independent cash flows modules
Including fixed assets, construction in progress, DunAn Thermal and
Asset group of
right-of-use assets, intangible assets, long-term Zhuhai Thermal,
DunAn
unamortized expenses, and other long-term classified by company Yes
Environment
assets, based on the asset group that can generate management requirements
thermal
independent cash flows and business modules
Asset group of Including fixed assets, construction in progress, DunAn thermal
DunAn right-of-use assets, intangible assets, long-term management, classified
Environment unamortized expenses, and other long-term by company management Yes
thermal assets, based on the asset group that can generate requirements and business
management independent cash flows modules
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
(4) Specific determination method of recoverable amount
1) Determined based on the net amount after deducting disposal expenses from fair value
Impairment amount
of goodwill Determination of
Recoverable Key
Item Book Value attributable to fair value and Basis for determining key parameters
amount parameters
shareholders of the disposal expenses
parent company
Determine the replacement cost based on market inquiry, local
engineering cost information of each park, depreciation rate of
Fair value,
Gree Altairnano service life, and survey depreciation rate, and determine the
13,279,725,255.23 12,600,822,902.34 206,861,546.92 Fair value disposal
asset group fair value based on the replacement cost; confirm disposal
expenses
expenses based on property rights transaction costs, stamp
taxes, and additional taxes
Total 13,279,725,255.23 12,600,822,902.34 206,861,546.92
[Note] In accordance with the Asset Evaluation Report on the Asset Group Including the Recoverable Amount of Goodwill Assets Involved in the Impairment Test of
the Goodwill Formed by the Merger of GREE Altairnano New Energy Inc. by Gree Electric Appliances, Inc. of Zhuhai (ZZH [2024] ZI No. HZ1107) issued by
Zhejiang Zhongheng Real Estate Land Assets Appraisal Consulting Co., Ltd., the amount of goodwill impairment attributable to the parent company in the current
period is RMB206,861,546.92, and the recoverable amount of the asset group is calculated by using the method of net amount after deducting disposal expenses from
fair value in the assessment report;
2) Determine based on the present value of expected future cash flows
Basis for
Key parameters for
Impai determining Basis for
Years in the the stable period
Recoverable rment Key parameters for the forecast parameters determining key
Item Book Value forecast (growth rate, profit
amount amou period (growth rate and profit rate) during the parameters during
period rate, and discount
nt forecast the stable period
rate)
period
Asset group of
Revenue growth
DunAn 5 years + Revenue growth rate: Pre-tax wacc
rate: 2.00%
Environment 5,336,747,308.36 5,463,000,000.00 perpetual 6.59%21.16% [Note 2] calculated from
Discount rate:
refrigeration period Gross margin: 14.04%19.67% industry data
14.27%
accessories
Asset group of Revenue growth
5 years + Revenue growth rate: Pre-tax wacc
DunAn rate: 2.00%
940,384,243.78 1,743,000,000.00 perpetual 9.31%20.78% [Note 2] calculated from
Environment Discount rate:
period Gross margin: 21.63%23.75% industry data
thermal 14.27%
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Basis for
Key parameters for
Impai determining Basis for
Years in the the stable period
Recoverable rment Key parameters for the forecast parameters determining key
Item Book Value forecast (growth rate, profit
amount amou period (growth rate and profit rate) during the parameters during
period rate, and discount
nt forecast the stable period
rate)
period
Asset group of
Revenue growth
DunAn 5 years + Revenue growth rate: Pre-tax wacc
rate: 2.00%
Environment 438,875,471.77 2,981,000,000.00 perpetual 10.00%99.71% [Note 3] [Note 2] calculated from
Discount rate:
thermal period Gross margin: 23.37%27.62% industry data
14.27%
management
Asset group of Revenue growth
5 years + Revenue growth rate: Pre-tax wacc
DunAn rate: 2.00%
328,324,949.71 2,717,000,000.00 perpetual 8.00%14.72% [Note 2] calculated from
Environment Discount rate:
period Gross margin: 25.58%28.49% industry data
equipment 14.27%
Total 7,044,331,973.62 12,904,000,000.00
[Note 1] According to the Asset Evaluation Report on the Recoverable Amount of the Asset Group (Including Goodwill) of Zhejiang DunAn Artificial
Environment Co., Ltd. Involved in the Goodwill Impairment Test of Gree Electric Appliances, Inc. of Zhuhai for the Preparation of Financial Reports (BJYCPB ZI
(2024) No. A101) issued by Beijing Yachao Asset Appraisal Co., Ltd., there is no impairment of goodwill, and the recoverable amount of the asset group is
calculated by using the method of the present value of expected future cash flows in the assessment report;
[Note 2] The recoverable amount of the asset group or asset group combination containing goodwill is based on the profit forecast determined by the management
of DunAn Environment. The basis for revenue growth is mainly due to the future development of foreign markets. The increase in profit margin was mainly due to
the fact that the revenue in the foreign market was higher than that in the domestic market, and the cost was estimated based on the historical annual average
production cost, resulting in a gradual increase in profit rate;
[Note 3] The reason for the higher revenue growth rate of the thermal management asset group is that it is still in the start-up stage and the historical revenue
growth rate is relatively high.
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Long-term unamortized expenses
Increased amount in Amortization amount
Item Beginning balance Ending Balance
the current period in the current period
Renovation costs and
22,862,393.90 14,390,031.04 12,976,950.00 24,275,474.94
others
Total 22,862,393.90 14,390,031.04 12,976,950.00 24,275,474.94
Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
Ending Balance Beginning balance
Item Deductible
Deductible temporary Deferred income tax Deferred income
temporary
differences assets tax assets
differences
Accrued expenses 81,894,353,560.58 12,299,777,470.95 74,646,872,375.32 11,202,831,506.36
Assets impairment
9,185,884,979.39 1,563,753,624.25 6,643,992,630.67 1,130,458,707.56
reserves
Deductible losses 7,607,177,645.41 1,383,660,092.05 8,528,191,787.64 1,667,323,200.67
Payroll payable 2,403,160,852.09 368,434,495.66 1,488,929,099.06 230,456,696.17
Lease liabilities 855,196,661.01 210,201,073.63 212,875,571.23 47,385,845.47
Asset
285,078,030.33 43,422,888.16 264,225,302.62 39,712,114.04
amortization/depreciation
Changes in fair value of
other equity instrument 270,341,234.04 40,551,185.11
investments
Others 3,386,147,827.13 651,636,192.00 1,800,297,523.36 326,709,500.84
Total 105,887,340,789.98 16,561,437,021.81 93,585,384,289.90 14,644,877,571.11
(2) Deferred income tax liabilities not offset
Ending Balance Beginning balance
Item
Taxable temporary Deferred income tax Taxable temporary Deferred income
differences liabilities differences tax liabilities
Accrued interest 8,004,193,370.39 1,338,930,710.07 5,290,711,334.53 968,378,001.20
Appraised appreciation
of consolidated assets of
3,068,234,386.94 628,766,638.59 3,582,036,617.90 738,945,765.64
enterprises not under the
common control
Usufruct assets 841,445,774.92 207,082,853.09 207,344,779.05 46,010,700.88
Assets amortization 1,178,075,518.52 185,886,711.77 1,750,007,228.31 271,416,568.54
Changes in fair value of
derivative financial 174,933,139.85 27,862,021.19 23,731,530.82 3,970,875.35
assets
Changes in fair value of
other equity instrument 433,527,038.34 65,029,055.75
investments
Others 2,442,258,390.98 483,228,222.87 732,645,089.17 177,387,477.26
Total 15,709,140,581.60 2,871,757,157.58 12,020,003,618.12 2,271,138,444.62
(3) Details of deferred income tax assets not recognized
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Deductible losses 5,611,793,371.12 2,599,631,551.36
Deductible temporary differences 3,078,969,898.57 3,281,958,579.26
Total 8,690,763,269.69 5,881,590,130.62
(4) The deductible losses of deferred income tax assets not recognized will be due in the following years
Investment Amount at the End of the
Year Beginning Amount
Period
2023 224,603,342.52
2024 1,417,170,907.63 762,961,760.88
2025 1,017,526,622.61 785,496,400.36
2026 856,758,140.24 115,411,404.36
2027 585,602,169.96 110,109,117.96
2028 820,192,288.14 13,674,872.10
2029 14,221,495.75
2030 19,960,469.70 5,609,610.89
2031 17,117,414.62
2032 32,376,800.88
Open-ended 830,867,061.59 581,765,042.29
Total 5,611,793,371.12 2,599,631,551.36
Other non-current assets
Ending Balance Beginning balance
Item
Impairment Impairment
Book balance Book Value Book balance Book Value
provision provision
Monetary
investment
41,018,451,427.70 41,018,451,427.70
products and
accrued interest
Advance
payments for 1,196,720,503.05 1,196,720,503.05 739,880,724.35 739,880,724.35
equipment
Advance project
funds and cash
276,954,860.61 76,969,740.55 199,985,120.06 286,681,230.43 30,808,387.19 255,872,843.24
pledge and
deposit
Advance land-
transferring fees 82,948,394.58 82,948,394.58 43,959,131.67 43,959,131.67
and others
Total 42,575,075,185.94 76,969,740.55 42,498,105,445.39 1,070,521,086.45 30,808,387.19 1,039,712,699.26
Assets with restricted ownership or right-to-use
End of Period
Item
Book Value Restricted Reason
Required deposit reserve, earnest
Monetary funds 36,444,669,541.57
money, etc.
Accounts receivable 95,386,260.00 Pledged
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End of Period
Item
Book Value Restricted Reason
Receivables financing 5,033,716,307.04 Pledged
Contract assets 103,189,654.26 Pledged
Other current assets 9,000,000,000.00 Pledged
Non-current assets due within one
1,000,000,000.00 Pledged
year
Other debt investments 10,090,000,000.00 Pledged
Long-term equity investments 310,838,556.07 Pledged
Fixed assets 2,285,127,725.15 Pledged
Construction in progress 223,626,881.02 Pledged
Intangible assets 1,436,665,729.28 Pledged
Other non-current assets 12,180,000,000.00 Pledged
Others 13,646,580.00 Pledged
Total 78,216,867,234.39
(Continued)
Beginning of period
Item
Book Value Restricted Reason
Required deposit reserve, earnest
Monetary funds 49,215,097,504.03
money, etc.
Accounts receivable 239,378,920.65 Pledged
Receivables financing 12,304,327,541.08 Pledged
Non-current assets due within one
3,022,847,488.96 Pledged
year
Other debt investments 5,700,000,000.00 Pledged
Other equity instrument investments 1,965,635,734.92 Restricted shares
Long-term equity investments 293,539,194.32 Pledged
Fixed assets 976,001,655.74 Pledged
Intangible assets 1,063,362,713.41 Pledged
Others 192,982,228.53 Pledged
Total 74,973,172,981.64
Short-term borrowings
(1) Classification of short-term borrowings
Item Ending Balance Beginning balance
Pledge borrowings 13,689,816,990.91 20,215,759,226.93
Credit borrowings 11,791,884,924.68 31,117,982,271.80
Mortgaged borrowings 403,850,000.00 438,390,000.00
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Pledge, mortgaged, and credit borrowings 318,978,953.96
Pledge and mortgaged borrowings 115,500,000.00
Mortgaged and credit borrowings 35,500,000.00
Guaranteed borrowings 900,000,000.00
Subtotal 26,355,530,869.55 52,672,131,498.73
Accrued interest 87,945,518.97 223,719,789.19
Total 26,443,476,388.52 52,895,851,287.92
(2) Overdue and unpaid short-term borrowings
None.
Derivative financial liabilities
Item Ending Balance Beginning balance
Foreign exchange derivatives 4,079,919.91 184,811,894.98
Total 4,079,919.91 184,811,894.98
Notes payable
Type Ending Balance Beginning balance
Banker's acceptance bill 23,741,128,400.12 38,346,486,801.38
Trade acceptance draft 263,414,018.36
Total 23,741,128,400.12 38,609,900,819.74
[Note] As of December 31, 2023, the Company had no notes payable that were due and unpaid.
Accounts payable
(1) List of accounts payable
Item Ending Balance Beginning balance
Payment for goods and services 37,687,019,566.61 30,384,290,338.76
Others 3,460,339,655.34 2,471,781,150.11
Total 41,147,359,221.95 32,856,071,488.87
(2) Important payables aged over 1 year
None.
Contract liabilities
Item Ending Balance Beginning balance
Payment for goods and pre-sale housing 13,588,771,210.88 14,972,336,715.45
Total 13,588,771,210.88 14,972,336,715.45
[Note] Contract liabilities mainly consist of advance payments from distributors for goods.
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Deposits from customers and interbank
Item Ending Balance Beginning balance
Time deposits 245,243,190.05 190,606,127.38
Current deposits 3,188,766.08 22,144,523.59
Subtotal 248,431,956.13 212,750,650.97
Accrued interest 6,184,943.22 6,360,418.64
Total 254,616,899.35 219,111,069.61
Payroll payable
(1) List of employee remuneration payable
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
I. Short-term wages and salaries 3,887,857,360.44 11,105,934,748.86 10,728,021,808.72 4,265,770,300.58
II. Separation benefits defined
10,004,731.40 812,059,419.17 799,223,064.86 22,841,085.71
contribution plan
Total 3,897,862,091.84 11,917,994,168.03 11,527,244,873.58 4,288,611,386.29
(2) List of short-term wages and salaries
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
1. Wages, bonuses, subsidies and
2,794,951,468.75 9,364,041,403.07 9,106,317,169.18 3,052,675,702.64
allowances
2. Employee welfare 429,699.41 770,490,581.96 769,038,005.30 1,882,276.07
3. Social insurance premiums 2,881,491.17 330,420,482.50 326,082,508.89 7,219,464.78
Including: Medical insurance
2,435,896.66 298,191,523.46 294,011,570.82 6,615,849.30
premiums
Work-related injury
315,476.86 24,314,251.80 24,091,352.06 538,376.60
insurance premiums
Maternity insurance
130,117.65 7,914,707.24 7,979,586.01 65,238.88
premiums
4. Housing provident funds 4,411,203.23 388,522,174.53 389,016,435.18 3,916,942.58
5. Labor union expenditures and
1,085,183,497.88 252,460,106.80 137,567,690.17 1,200,075,914.51
employee education funds
Total 3,887,857,360.44 11,105,934,748.86 10,728,021,808.72 4,265,770,300.58
(3) List of separation benefits defined contribution plan
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
1. Basic endowment insurance
8,963,101.99 780,820,624.32 768,438,437.37 21,345,288.94
premiums
2. Unemployment insurance
1,041,629.41 31,238,794.85 30,784,627.49 1,495,796.77
premiums
Total 10,004,731.40 812,059,419.17 799,223,064.86 22,841,085.71
Taxes and dues payable
Item Ending Balance Beginning balance
Business income tax 2,544,807,089.57 1,856,871,168.58
Value-added tax 1,393,002,309.22 1,650,439,583.33
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Others 399,822,161.49 312,113,887.57
Total 4,337,631,560.28 3,819,424,639.48
Other payables
Item Ending Balance Beginning balance
Dividends payable 5,572,388.92 5,620,664,762.67
Other payables [Note 1] 5,507,694,127.90 5,291,741,904.22
Total 5,513,266,516.82 10,912,406,666.89
[Note 1] Other payables in the table above refer to other payables deducting interests payable and dividends
payable;
[Note 2] The Company has no interests payable at the end and the beginning of the period.
(1) Dividends payable
Item Ending Balance Beginning balance
Common stock dividends 602,881.87 5,614,444,494.87
Others 4,969,507.05 6,220,267.80
Total 5,572,388.92 5,620,664,762.67
[Note] The Company has no important dividends payable aged over 1 year.
(2) Other payables
1) Other payables listed by nature of payment
Item Ending Balance Beginning balance
Intercourse funds 2,617,427,058.95 2,485,922,439.12
Enterprise borrowing and interest 1,654,225,040.13 1,621,102,937.08
Cash pledge and deposit 1,236,042,028.82 1,184,716,528.02
Total 5,507,694,127.90 5,291,741,904.22
2) Other important payables aged over 1 year
Reasons for failing to repay
Item Ending Balance
or carry-over
Unsatisfied repayment
Unit 1 1,003,043,216.69
conditions
Total 1,003,043,216.69
Non-current liabilities due within one year
Item Ending Balance Beginning balance
Long-term borrowings due within one year 20,411,257,654.34
Long-term payables to be due within one year 104,437,399.09 188,387,613.61
Lease liabilities due within 1 year 89,826,019.60 66,954,923.96
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Total 20,605,521,073.03 255,342,537.57
Other current liabilities
Item Ending Balance Beginning balance
Sales rebate 50,881,332,212.24 52,515,732,341.58
Others 10,177,504,966.53 5,233,085,261.66
Total 61,058,837,178.77 57,748,817,603.24
Long-term borrowings
Item Ending Balance Beginning balance
Pledge borrowings 19,537,435,550.95 3,312,962,532.03
Credit borrowings 37,768,442,020.95 24,721,907,621.41
Mortgaged borrowings 2,089,219,068.84 2,718,972,309.96
Subtotal 59,395,096,640.74 30,753,842,463.40
Add: Accrued interests 51,903,548.69 30,398,747.81
Less: Long-term borrowings due within one year 20,411,257,654.34
Total 39,035,742,535.09 30,784,241,211.21
Lease liabilities
Item Ending Balance Beginning balance
Lease liabilities 856,833,971.52 213,791,544.62
Less: Lease liabilities due within 1 year 89,826,019.60 66,954,923.96
Total 767,007,951.92 146,836,620.66
Long-term payables
Item Ending Balance Beginning balance
Financial liabilities formed after sale and leaseback 131,465,897.39 274,393,778.81
Others 18,638,250.00
Subtotal 131,465,897.39 293,032,028.81
Less: Long-term payables due within 1 year 104,437,399.09 188,387,613.61
Total 27,028,498.30 104,644,415.20
Long-term payroll payable
(1) Table of long-term payroll payable
Item Ending Balance Beginning balance
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Ending Balance Beginning balance
Net liabilities of separation benefits defined benefit
195,057,663.00 175,712,728.00
plan
Total 195,057,663.00 175,712,728.00
(2) Changes in the defined benefit plan
1) Present value of obligations under the defined benefit plan:
Amount incurred for the
Item Amount for the current period
previous period
I. Beginning balance 175,712,728.00 164,408,471.00
II. Defined benefit cost included in the current profits
9,941,893.00 8,733,357.00
and losses
1. Service costs in the current period 3,238,005.00 2,945,591.00
2. Net interest 5,173,500.00 5,241,236.00
3. Impact of adding new personnel 1,530,388.00 546,530.00
III. Defined benefit cost included in other
15,837,466.00 8,601,949.00
comprehensive income
Including: actuarial gains (losses expressed with
15,837,466.00 8,601,949.00
"")
IV. Other changes -6,434,424.00 -6,031,049.00
Including: Paid benefits -6,434,424.00 -6,031,049.00
V. Ending balance 195,057,663.00 175,712,728.00
2) Net liabilities (net assets) of the defined benefit plan:
Amount incurred for the
Item Amount for the current period
previous period
I. Beginning balance 175,712,728.00 164,408,471.00
II. Defined benefit cost included in the current profits
9,941,893.00 8,733,357.00
and losses
III. Defined benefit cost included in other
15,837,466.00 8,601,949.00
comprehensive income
IV. Other changes -6,434,424.00 -6,031,049.00
V. Ending balance 195,057,663.00 175,712,728.00
(3) The descriptions of contents and associated risks of the defined benefit plan, and its influences on the
Company’s future cash flow, time, and uncertainty are as follows:
1) Descriptions of contents and associated risks of the defined benefit plan, and its influences on the
Company’s future cash flow, time, and uncertainty
The Company’s defined benefit plan is a supplementary post-retirement benefit plan for some retirees,
early retirees, and serving officers after normal retirement. Given that the amount involved in the defined
benefit plan is not significant, it cannot have a significant impact on the Company's future cash flow.
2) Descriptions of significant actuarial assumptions and sensitivity analysis results of the defined benefit
plan
Under the requirements of the Accounting Standards for Business Enterprises No. 9 Employee
Compensation, the discount rate adopted by the Company at the time of discount is recognized by the
market yields of high-quality corporate bonds in the treasury bonds or active market that match the
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
obligatory term and currency of the defined benefit plan on the balance sheet date; the annual growth rates
and annual dismissal rates of all benefits are based on the actual measurement data of the Company; and
the death rate is recognized by referring to the experience life table for insurance business of China Life
Insurance (Group) Company.
Deferred income
Beginning Increase in the Decrease in the Cause of
Item Ending Balance
balance current period current period formation
Related to
Government grants 3,335,077,967.39 424,153,554.48 235,076,720.35 3,524,154,801.52 assets/income
s
Unconfirmed
profit and loss
Others 5,133,362.84 1,432,566.24 3,700,796.60
from sale and
leaseback
Total 3,340,211,330.23 424,153,554.48 236,509,286.59 3,527,855,598.12
Share capital
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
Total number of stocks 5,631,405,741.00 5,631,405,741.00
Total 5,631,405,741.00 5,631,405,741.00
Capital reserves
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
Share capital premium 560,382,088.91 560,382,088.91
Other capital reserves 496,102,011.66 1,411,326,160.71 554,905,778.70 1,352,522,393.67
Total 496,102,011.66 1,971,708,249.62 1,115,287,867.61 1,352,522,393.67
[Note 1] The share of equity incentive employee stock ownership plan expenses in the current period
increased the capital reserves other capital reserves by RMB1, 411,326,160.71;
[Note 2] In this period, some subsidiaries engaged in equity transactions, resulting in an increase of
RMB5,476,310.21 in capital reserves share capital premium;
[Note 3] The expiration of the lock-up period of the first phase of the employee stock ownership plan
and the fulfillment of the vesting conditions resulted in an increase of RMB554,905,778.70 in capital
reserves share capital premium, and a decrease of RMB554,905,778.70 in capital reserves other
capital reserves;
[Note 4] Capital reserves share capital premium of RMB560,382,088.91 is offset by the purchase of
minority equity interests in subsidiaries and the expected payment of performance compensation.
Treasury share
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Increase in the current Decrease in the
Item Beginning balance Ending Balance
period current period
Repurchased share 5,643,935,587.86 4,108,275,713.17 4,809,487,389.59 4,942,723,911.44
Total 5,643,935,587.86 4,108,275,713.17 4,809,487,389.59 4,942,723,911.44
[Note 1] On February 3, 2023, the Company transferred 77,163,880 shares from the Company's special
securities account for repurchase to the special account of "Gree Electric Appliances, Inc. of Zhuhai
employee stock ownership plan phase II" through non-trading transfer, and the treasury shares decreased
RMB3,665,952,595.95, and the transferred shares accounted for 1.37% of the Company's total share
capital at that time. At the same time, the confirmation of stock repurchase obligations in this period
increased the treasury shares by RMB1,108,073,316.80;
[Note 2] In accordance with the Announcement on the Expiration of the Lock-up Period and
Achievement of Vesting Conditions of Employee Stock Ownership Plan Phase I of the Company, the
appraisal period of the phase of the employee stock ownership plan of the Company has expired and the
performance indicators of the appraisal and vesting period have been met, and the attributable stock
rights can be distributed. The Company derecognized the obligation to repurchase the shares of the
employee stock ownership plan phase I during the current period, resulting in a decrease of
RMB1,143,534,793.64 in treasury shares;
[Note 3] As of December 31, 2023, the Company repurchased 91,897,967 shares in phase IV, and the
repurchase amount was RMB3,000,202,396.37. The repurchased treasury shares in this period accounted
for 1.63% of the Company's total share capital at that time, and all of them were deposited in the
Company's special securities account for repurchase. During the deposit period, they did not enjoy
related rights such as voting rights at shareholders' meetings, profit distribution, conversion of reserves
into share capital, allotment, and pledge.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Other comprehensive income
Amount for the current period
Less: Amount
included in Less: Amount
other included in
comprehensiv other
Amount
Beginning Amount incurred e income in comprehensive Amount
Item attributable to Ending Balance
balance before income tax the previous income in the Less: Income attributable to the
minority
in the current period but previous period tax expenses parent company
shareholders
period transferred to but transferred after tax
after tax
the profits to retained
and losses in earnings in the
the current current period
period
I. Other comprehensive
income cannot be reclassified 1,820,479,359.65 -1,359,257,024.09 413,925,573.32 56,550,930.69 -1,833,796,245.42 4,062,717.32 -13,316,885.77
into profits and losses
Changes arising from
remeasurement of the defined -72,008,226.00 -15,837,466.00 -15,837,466.00 -87,845,692.00
benefit plan
Other comprehensive income
that cannot be transferred to
2,100,022,256.43 -686,278,320.85 330,311,225.17 162,131,171.55 -1,182,783,434.89 4,062,717.32 917,238,821.54
profits and losses under the
equity method
Changes in the fair value of
other equity instrument -207,534,670.78 -657,141,237.24 83,614,348.15 -105,580,240.86 -635,175,344.53 -842,710,015.31
investments
II. Other comprehensive
income to be reclassified into 222,422,245.39 97,364,238.49 8,725,200.15 8,137,406.29 66,432,933.68 14,068,698.37 288,855,179.07
profits and losses
Other comprehensive income
that can be transferred to
-208,819.44 527,247.07 160,652.18 366,594.89 -48,167.26
profits and losses under the
equity method
Changes in the fair value of
-8,060,421.69 9,079,591.01 3,399,497.28 5,646,351.69 33,742.04 -2,414,070.00
other debt investments
Reserves for credit
impairment of other debt -3,667,360.51 19,004,631.52 7,464,950.15 4,440,275.26 2,753,149.69 4,346,256.42 -914,210.82
investments
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount for the current period
Less: Amount
included in Less: Amount
other included in
comprehensiv other
Amount
Beginning Amount incurred e income in comprehensive Amount
Item attributable to Ending Balance
balance before income tax the previous income in the Less: Income attributable to the
minority
in the current period but previous period tax expenses parent company
shareholders
period transferred to but transferred after tax
after tax
the profits to retained
and losses in earnings in the
the current current period
period
Cash flow hedging reserves 1,073,618.07 3,244,475.00 1,260,250.00 297,633.75 1,650,685.72 35,905.53 2,724,303.79
Differences arising from the
translation of financial 233,285,228.96 65,508,293.89 56,222,094.40 9,286,199.49 289,507,323.36
statements in foreign currency
Total 2,042,901,605.04 -1,261,892,785.60 8,725,200.15 413,925,573.32 64,688,336.98 -1,767,363,311.74 18,131,415.69 275,538,293.30
Page 261 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Special reserves
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
Safe production
25,845,351.28 5,017,397.69 3,893,105.53 26,969,643.44
expenses
Total 25,845,351.28 5,017,397.69 3,893,105.53 26,969,643.44
Surplus reserves
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
Statutory surplus
2,241,118,692.92 2,745,557,993.21 3,255,546,661.73 1,731,130,024.40
reserves
Total 2,241,118,692.92 2,745,557,993.21 3,255,546,661.73 1,731,130,024.40
[Note 1] The reasons for the increase in surplus reserves for the current period are:
① According to the regulations, the Company appropriated 10% of the parent company's net profit for
the current period to the statutory surplus reserves of RMB2,704,897,285.76;
② The transfer of other comprehensive income to retained earnings resulted in an increase of
RMB40,660,707.45 to the surplus reserve.
[Note 2] The transfer of treasury shares under the employee stock ownership plan phase II and the
acquisition of minority interests in subsidiaries resulted in a decrease of RMB3,255,546,661.73 in
surplus reserve statutory surplus reserve.
General risk provisions
Increase in the Decrease in the
Item Beginning balance Ending Balance
current period current period
General risk
507,223,117.40 507,223,117.40
provisions
Total 507,223,117.40 507,223,117.40
Undistributed profits
Amount for the current Amount incurred for the
Item
period previous period
Undistributed profits at the end of the previous period
91,458,073,960.81 103,475,223,000.17
before adjustment
Total adjustment of undistributed profits at the beginning
of the period (increase +, decrease )
Beginning undistributed profit after adjustment 91,458,073,960.81 103,475,223,000.17
Add: Net profit attributable to owners of the parent
29,017,387,604.18 24,506,623,782.46
company for the current period
Less: Withdrawal of statutory surplus reserves 2,704,897,285.76 2,237,070,151.57
Withdrawal of general risk reserves 1,623,761.10
Common share dividends payable [Note] 5,613,841,613.00 22,223,874,812.00
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount for the current Amount incurred for the
Item
period previous period
Influence of share-based payment and share
313,591,772.67 11,668,920,238.83
cancellation
Purchase of minority shareholder's equity in
428,720,730.49
subsidiaries
Add: Amount transferred from other comprehensive
368,519,908.06 36,436,872.17
income to retained earnings
Ending undistributed profit 112,211,650,801.62 91,458,073,960.81
[Note] Under the resolutions of the annual general meeting of shareholders on June 30, 2023, the
Company distributed cash dividends to all shareholders at a rate of RMB10.00 (tax inclusive) per 10
shares. Based on the shares deducting repurchased shares 17,564,128 in the account for repurchased from
the Company's total capital shares of 5,631,405,741, RMB5,613,841,613.00 of cash dividends should be
actually distributed.
Operating revenues and costs
Amount for the current period Amount incurred for the previous period
Item
Revenue Cost Revenue Cost
Main business 174,565,470,852.38 113,508,550,549.59 153,165,839,566.10 105,573,859,862.27
Other business 29,413,795,534.71 28,116,999,197.36 35,822,543,140.58 34,210,528,020.51
Total 203,979,266,387.09 141,625,549,746.95 188,988,382,706.68 139,784,387,882.78
Information related to the revenues from the main business:
Amount for the current period Amount incurred for the previous period
Item
Revenue Cost Revenue Cost
Classified by
industry
Manufacturing
174,565,470,852.38 113,508,550,549.59 153,165,839,566.10 105,573,859,862.27
industry
Total 174,565,470,852.38 113,508,550,549.59 153,165,839,566.10 105,573,859,862.27
Classified by
product type
Including: Air
151,216,511,000.13 95,207,973,716.18 134,859,394,542.06 91,116,284,416.91
conditioner
Home
4,001,971,437.12 2,579,480,666.41 4,567,901,238.21 3,051,711,250.15
appliance
Industrial
10,002,891,047.02 7,730,401,393.36 7,599,259,996.39 6,057,662,877.96
product
Smart
669,842,288.11 459,908,441.68 432,085,871.36 303,247,852.63
device
Green
7,106,463,576.73 6,193,955,989.91 4,701,188,530.73 4,077,474,678.11
energy
Others 1,567,791,503.27 1,336,830,342.05 1,006,009,387.35 967,478,786.51
Total 174,565,470,852.38 113,508,550,549.59 153,165,839,566.10 105,573,859,862.27
Classified by region
Including: Sales in
149,661,934,832.94 94,519,678,129.83 129,895,113,805.01 85,650,631,599.13
domestic market
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount for the current period Amount incurred for the previous period
Item
Revenue Cost Revenue Cost
Export sales 24,903,536,019.44 18,988,872,419.76 23,270,725,761.09 19,923,228,263.14
Total 174,565,470,852.38 113,508,550,549.59 153,165,839,566.10 105,573,859,862.27
Interest income and interest expenses
Amount for the current Amount incurred for the
Item
period previous period
Interest income 1,038,856,837.77 1,162,289,741.08
Including: Interest income from deposits in other banks
769,444,269.59 900,104,771.54
and central banks
Interest income from the issuance of loans and
116,256,351.56 46,543,226.92
advances
Others 153,156,216.62 215,641,742.62
Interest expense 126,399,291.44 82,118,835.96
Including: Expenses from transactions with financial
113,834,187.03 63,728,710.63
institutions
Others 12,565,104.41 18,390,125.33
Net interest income 912,457,546.33 1,080,170,905.12
Taxes and surcharges
Amount for the current Amount incurred for the
Item
period previous period
Urban maintenance & construction tax 608,933,524.27 410,993,531.12
Education surcharge 443,446,170.48 296,533,867.57
Building tax 291,022,667.17 242,591,473.78
Land use tax 150,553,829.97 150,191,753.52
Others 620,228,300.94 511,932,783.41
Total 2,114,184,492.83 1,612,243,409.40
Sales expenses
Amount incurred for the
Item Amount for the current period
previous period
Sales expenses 17,129,639,682.51 11,285,451,112.27
Total 17,129,639,682.51 11,285,451,112.27
[Note] In 2023, the sales expenses mainly included the installation and maintenance expenses, warehousing
expenses, loading and unloading fees, and promotion expenses, totally accounting for more than 80% of the
total sales expenses.
Administrative expenses
Amount incurred for the
Item Amount for the current period
previous period
Administrative expenses 6,542,161,037.82 5,267,999,733.62
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount incurred for the
Item Amount for the current period
previous period
Total 6,542,161,037.82 5,267,999,733.62
[Note] In 2023, the overhead expenses included the employees' remuneration, material consumption,
depreciation, and amortization, totally accounting for more than 80% of the total overhead expenses.
R&D expenses
Amount incurred for the
Item Amount for the current period
previous period
R&D expenses 6,762,136,262.23 6,281,394,430.40
Total 6,762,136,262.23 6,281,394,430.40
[Note] In 2023, the R&D expenses mainly included the employees' labor cost and direct investment cost,
accounting for more than 80% of the total R&D expenses.
Financial expenses
Amount incurred for the
Item Amount for the current period
previous period
Interest expense [Note 1] 2,962,205,439.75 2,836,743,431.08
Less: Interest income [Note 2] 6,189,969,897.82 4,646,747,718.69
Add: Exchange profits and losses -373,003,623.17 -500,019,034.67
Commissions 67,736,176.25 97,740,063.96
Interest expense for defined benefit obligation 5,173,500.00 5,241,236.00
Others 1,336,553.24 277,430.67
Total -3,526,521,851.75 -2,206,764,591.65
[Note 1] The above interest expenses include borrowing interest expenses and discount interest expenses;
[Note 2] Both the above interest income and the interest income in this Note “V. 56. Interest income and
interest expenses are capital income”.
Other income
The amount included in
Amount for the current Amount incurred for the
Sources of other income non-recurring profits and
period previous period
losses in the current period
Government grants 716,882,751.82 866,364,721.39 680,624,707.59
Commissions refund
individual income tax and 183,786,384.13 13,444,790.66 40,553,390.36
others
Total 900,669,135.95 879,809,512.05 721,178,097.95
Income from investment
Amount for the current Amount incurred for the
Item
period previous period
Investment income obtained from trading financial
280,532,436.05 12,797,272.64
instruments
Long-term equity investment income measured by the
93,222,443.16 -3,324,287.24
equity method
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount for the current Amount incurred for the
Item
period previous period
Investment income from derivative financial instruments -334,089,576.80 5,308,155.89
Others 177,491,302.82 72,102,800.45
Total 217,156,605.23 86,883,941.74
Income from changes in fair value
Amount incurred for the
Sources of income from changes in fair value Amount for the current period
previous period
Derivative financial instruments 290,358,381.45 -389,491,823.26
Trading financial instruments 135,772,263.81 59,588,240.62
Others 11,453,343.46 -13,672,122.47
Total 437,583,988.72 -343,575,705.11
Credit impairment losses
Amount incurred for the
Item Amount for the current period
previous period
Bad debt losses -824,454,538.38 -504,912,773.22
Impairment losses of buying back the sale -3,077,495.66
Impairment losses of loans and advances 3,486,921.74 88,544,000.00
Total -824,045,112.30 -416,368,773.22
Asset impairment losses
Amount incurred for the
Item Amount for the current period
previous period
Inventory falling price losses -2,077,565,556.79 -682,224,437.94
Goodwill impairment losses -206,861,546.92 -246,572,327.43
Impairment losses of contract assets -23,251,340.92 -41,268,491.89
Other asset impairment losses -185,901,249.45 3,386,247.75
Total -2,493,579,694.08 -966,679,009.51
Income from disposal of assets
Amount incurred for the
Source of income from disposal of assets Amount for the current period
previous period
Gains from disposal of non-current assets (losses
382,923,791.69 608,425.71
expressed with "")
Total 382,923,791.69 608,425.71
Non-operating revenues
The amount included in
Amount for the current Amount incurred for the non-recurring profits and
Item
period previous period losses in the current
period
Net profit from destruction scrap
3,273,237.25 580,724.89 3,273,237.25
of non-current assets
Page 266 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The amount included in
Amount for the current Amount incurred for the non-recurring profits and
Item
period previous period losses in the current
period
Including: Gains or losses from
3,273,237.25 580,724.89 3,273,237.25
destruction scrap of fixed assets
Government subsidies related to
26,340,308.60 11,816,261.51 26,340,308.60
non-operation
Others 98,758,262.67 47,413,344.96 98,758,262.67
Total 128,371,808.52 59,810,331.36 128,371,808.52
Non-operating expenses
The amount included in
Amount for the current Amount incurred for the non-recurring profits and
Item
period previous period losses in the current
period
Total losses from scrap of non-
57,463,367.50 53,809,736.38 57,463,367.50
current assets
Including: Losses from
57,463,367.50 42,611,579.47 57,463,367.50
destruction scrap of fixed assets
Others 119,984,960.59 72,712,838.55 119,984,960.59
Total 177,448,328.09 126,522,574.93 177,448,328.09
Income tax expenses
(1) Table of income tax expenses
Amount for the current The amount incurred for the
Item
period previous period
Income tax expenses in the current period 6,477,401,667.61 4,911,250,568.93
Deferred income tax expenses -1,380,720,743.01 -705,210,079.43
Total 5,096,680,924.60 4,206,040,489.50
(2) Adjustment of accounting profits and income tax expenses
Amount for the current
Item
period
Total profits 32,815,703,838.19
Income tax expenses calculated at the statutory/applicable tax rate 4,922,355,575.73
Impact by different tax rates applicable to subsidiaries -41,823,864.43
Impact by non-deductible costs, expenses and losses 50,924,079.26
Impact of deductible temporary differences or deductible losses on unrecognized deferred
305,236,870.16
income tax assets at the end of the period
Others -140,011,736.12
Income tax expenses 5,096,680,924.60
Items of cash flow statement
(1) Cash flows related to operating activities
1) Other cash received related to operating activities
Amount incurred for the
Item Amount for the current period
previous period
Page 267 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount incurred for the
Item Amount for the current period
previous period
Government grants 990,758,810.62 1,505,716,278.65
Interest income 386,430,147.87 232,202,309.34
Net decrease in bill pledge deposits and guarantee
630,231,744.37
deposits
Cash pledges, deposits, and others 1,461,579,187.30 1,519,632,130.33
Total 2,838,768,145.79 3,887,782,462.69
2) Other cash payments related to operating activities
Amount for the current Amount incurred for the
Item
period previous period
Cash payments for sales expenses 8,562,376,407.52 7,472,508,694.30
Net increase in bill pledge deposits and guarantee
5,911,533,582.83
deposits
Cash payments for overhead expenses and R&D expenses 1,800,397,545.02 1,687,485,005.09
Return of advance project funds 165,658,259.48 201,388,556.08
Payment of performance, bid security, and others 1,117,354,876.06 1,125,497,555.86
Total 17,557,320,670.91 10,486,879,811.33
(2) Cash related to investment activities
1) Cash received related to investment activities
Amount incurred for the
Item Amount for the current period
previous period
Redemption of monetary investment products, large
certificates of deposit, debt instrument investments, and 21,394,360,863.88 6,820,424,111.41
other products
Total 21,394,360,863.88 6,820,424,111.41
2) Cash payment related to investment activities
Amount incurred for the
Item Amount for the current period
previous period
Payment of monetary investment products, large
certificates of deposit, debt instrument investments, and 84,266,255,633.47 13,113,484,681.50
other products
Total 84,266,255,633.47 13,113,484,681.50
3) Other cash received related to investment activities
Amount incurred for the
Item Amount for the current period
previous period
Net decrease in fixed deposits 21,131,039,386.45
Fixed deposit interest income 3,556,171,690.87 3,443,556,899.78
Others 28,671,249.18
Total 24,715,882,326.50 3,443,556,899.78
4) Other cash payments related to investment activities
Amount incurred for the
Item Amount for the current period
previous period
The net outflow of forward foreign settlement and
304,332,374.80 706,243,786.63
purchase
Net increase in fixed deposits 25,303,307,257.06
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount incurred for the
Item Amount for the current period
previous period
Others 3,866,295.73 39,078,603.18
Total 308,198,670.53 26,048,629,646.87
(3) Other cash paid related to financing activities
1) Other cash payments related to financing activities
Amount incurred for the
Item Amount for the current period
previous period
Net decrease in pledge deposits on borrowings 19,055,112,862.00
Collection of employee stock ownership plan funds 1,108,073,316.80
Others 40,000,000.00 20,000,000.00
Total 20,203,186,178.80 20,000,000.00
2) Other cash payments related to financing activities
Amount incurred for the
Item Amount for the current period
previous period
Cash payment for repurchased shares 3,000,202,396.37
Net increase in pledge deposits on borrowings 12,253,655,898.35
Others 1,362,342,134.72 1,425,089,651.60
Total 4,362,544,531.09 13,678,745,549.95
3) Changes in liabilities arising from financing activities
Increase in the current period Decrease in the current period
Item Beginning balance Non Ending Balance
Non cash
Cash changes Cash changes cash
changes
changes
Bank loans and
105,836,297,465.02 67,752,847,047.14 2,881,245,758.59 88,794,222,755.28 87,676,167,515.47
others
Bonds payable 899,737,500.00 12,087,909.84 911,825,409.84
Dividends payable 5,620,664,762.67 5,725,035,063.56 11,340,127,437.31 5,572,388.92
Lease liabilities
(including lease
213,791,544.62 804,053,382.56 161,010,955.66 856,833,971.52
liabilities due
within one year)
Total 111,670,753,772.31 74,377,619,610.70 3,697,387,050.99 101,207,186,558.09 88,538,573,875.91
Supplementary for cash flow statement
(1) Supplementary for cash flow statement
Amount in the current Amount in the previous
Supplementary
period period
1. Adjusting net profit to cash flow from operating activities:
Net Profits 27,719,022,913.59 23,011,344,353.11
Add: Assets and credit impairment reverse 3,317,624,806.38 1,383,047,782.73
Depreciation of fixed assets, depreciation of investment
4,808,144,624.82 4,597,938,791.84
real estate, and amortization of right-to-use assets
Amortization of intangible assets 475,186,591.56 372,007,224.51
Page 269 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Amount in the current Amount in the previous
Supplementary
period period
Losses on disposal of fixed assets, intangible assets and
-382,923,791.69 -608,425.71
other long-term assets (income expressed with “”)
Loss from scrapping fixed assets (income expressed with
54,190,130.25 53,229,011.49
“”)
Losses from changes in fair value (income expressed with
-437,583,988.72 343,575,705.11
“”)
Financial expenses (income expressed with “”) -3,910,047,955.94 -3,022,815,788.07
Investment losses (income expressed with “”) -217,156,605.23 -86,883,941.74
Decrease in deferred income tax assets (increase expressed
-1,966,236,836.12 -897,724,577.56
with “”)
Increase in deferred income tax liabilities (decrease
585,516,093.11 192,514,498.13
expressed with “”)
Decrease of inventories (increase expressed with “”) 3,656,838,547.28 5,509,950,723.66
Decrease in operating receivables (increase expressed with
12,312,109,488.56 6,522,203,496.59
“”)
Increase in operating payables (decrease expressed with
15,003,082,209.85 -10,082,543,299.83
“”)
Others [Note] -4,619,339,873.53 773,200,367.01
Net cash flows from operating activities 56,398,426,354.17 28,668,435,921.27
2. Significant investing and financing activities that do not
involve cash deposit and withdrawal:
3. Net changes in cash and cash equivalents:
Ending balance of cash 30,914,196,186.41 31,754,656,695.61
Less: Beginning balance of cash 31,754,656,695.61 29,951,743,758.00
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -840,460,509.20 1,802,912,937.61
[Note] "Others" include the increase in statutory deposit reserves of RMB121,006,301.94, the net
increase in bill deposits of RMB5,911,533,582.83, and the apportioned expenses of employee stock
ownership plan for the current period of RMB1,413,200,011.24.
(2) Net cash payment for acquisition of subsidiaries in the current period
Ganzhou Qianjin Real Estate
Item
Co., Ltd.
Cash or cash equivalent payment for business combination that occurred in the current
239,485,900.00
period
Including: Cash 239,485,900.00
Less: Cash and cash equivalents held by the subsidiary on the acquisition date 143,501.61
Net cash payment for acquisition of subsidiaries 239,342,398.39
(3) Net cash from disposal of subsidiaries this year
Jiangsu Datong Fan Co.,
Item
Ltd.
Page 270 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Jiangsu Datong Fan Co.,
Item
Ltd.
Cash or cash equivalents from the disposal of subsidiaries in this period
Add: Cash or cash equivalents received this period from the disposal of subsidiaries in the
35,000,000.00
previous period
Net cash from disposal of subsidiaries 35,000,000.00
(4) Composition of cash and cash equivalents
Item Ending Balance Beginning balance
I. Monetary funds 124,104,987,289.62 157,484,332,251.39
Including: Cash on hand 747,248.45 678,327.53
Bank deposits for payment at any time 12,145,466,861.21 12,976,313,644.11
Other monetary funds for payment at any time 470,104,370.06 342,302,803.81
Deposits in the central bank for payment at any time 6,910,095.46 6,311,554.32
Deposits in other banks for payment at any time 18,290,967,611.23 18,429,050,365.84
Time deposits and accrued interest not in the category of
56,746,121,561.64 76,514,578,051.75
cash and cash equivalents
Deposits with restricted use 36,444,669,541.57 49,215,097,504.03
II. Cash equivalents
III. Ending balance of monetary funds and cash equivalents 124,104,987,289.62 157,484,332,251.39
Less: Time deposits and accrued interest not in the category of cash
56,746,121,561.64 76,514,578,051.75
and cash equivalents
Less: Deposits with restricted use 36,444,669,541.57 49,215,097,504.03
Including: Statutory deposit reserves 1,382,019,092.73 1,261,012,790.79
Bill, letter of credit and other deposits 35,062,650,448.84 47,954,084,713.24
IV. Ending balance of cash and cash equivalents 30,914,196,186.41 31,754,656,695.61
(5) Restricted usage scope but still listed as cash and cash equivalents
None.
Annotations to items in the statement of changes in owner's equity
None.
Page 271 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Converted into RMB in
Item USD converted into RMB Euro converted into RMB BRL converted into RMB THB converted into RMB Others
total
Exchange rate of
7.0827 7.8592 1.4655 0.2074 Not applicable Not applicable
December 31, 2023
Monetary funds 3,946,995,304.47 23,691,794.88 356,888,862.00 35,089,794.84 28,028,281.68 4,390,694,037.87
Accounts receivable 3,055,728,463.16 45,559,034.28 1,115,273,168.07 62,799,772.25 127,628,045.32 4,406,988,483.08
Other receivables 7,033,673.13 443,276.56 358,152.20 3,504,201.14 7,545,993.12 18,885,296.15
Short-term borrowings 1,815,817,633.94 1,815,817,633.94
Accounts payable 222,105,016.90 3,985,533.30 55,643,642.10 34,361,823.24 31,043,508.39 347,139,523.93
Other payables 185,865,733.39 12,243,392.79 2,413,819.79 2,660,553.66 203,183,499.63
(2) Description of overseas operating entities
None.
Page 272 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Lease
1) The simplified treatment of short-term lease or low-value asset lease expenses is RMB82,935,016.32.
2) Sale-leaseback transaction
Some subsidiaries of the Company transferred some machinery equipment to financial lease
companies and leased them back. In the sale-leaseback transaction, the financial lease company cannot
dominate the use of the goods and obtain almost all economic benefits from it. The Company can dominate
the use of the leased assets, and has not transferred the control of them. Therefore, the sale-leaseback
transaction does not meet the requirements of sales. The Company continues to recognize the transferred
assets and recognizes long-term payables at the same time.
3) When the Company is a lessor
Including: Income related to variable
Item Rental incomes lease payments not included in lease
payments
Operating lease as a lessor 129,448,972.66
Total 129,448,972.66
VI. Change in the consolidation scope
Business combinations not under common control
(1) Business combinations not under common control in the current period
Time Point of Equity Equity
Equity Acquisition Acquisition
Name of the Acquiree Equity Acquisition Acquisition
Cost Date
Acquisition Proportion Method
Ganzhou Qianjin Real Purchase
2023/10/31 239,485,900.00 90.00% 2023/10/31
Estate Co., Ltd. by cash
(Continued)
Basis for Operating Income of Net Profit of the Cash Flow of the
Determining the the Acquiree from the Acquiree from the Acquiree from the
Name of the Acquiree
Acquisition Acquisition Date to Acquisition Date to Acquisition Date to
Date the End of the Period the End of the Period the End of the Period
Ganzhou Qianjin Real Acquisition of
-804,692.79 3,947,533.56
Estate Co., Ltd. control
(2) Cost and goodwill of business combination
Cost of the business combination Amount
The total cost of the business combination 239,485,900.00
Including: Cash 239,485,900.00
Less: Fair value of the identifiable net assets acquired 239,485,903.54
Combination cost less than the share of fair value of
-3.54
identifiable net asset acquired
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Ganzhou Qianjin Real Estate Co., Ltd.
Item
Fair value on the acquisition Book value on the
date acquisition date
Assets:
Page 273 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ganzhou Qianjin Real Estate Co., Ltd.
Item
Fair value on the acquisition Book value on the
date acquisition date
Monetary funds 143,501.61 143,501.61
Other receivables 19,819,308.24 19,819,308.24
Inventory 226,354,123.01 226,354,123.01
Other current assets 19,778,515.52 19,778,515.52
Subtotal of assets 266,095,448.38 266,095,448.38
Liabilities:
Subtotal of liabilities
Net Assets 266,095,448.38 266,095,448.38
Less: Minority shareholders' equity 26,609,544.84 26,609,544.84
Net assets acquired 239,485,903.54 239,485,903.54
(4) Gains or losses arising from the remeasurement of equity held before the acquisition date at fair value
None.
Business combination under common control
None.
Reverse acquisitions
None.
Page 274 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Disposal of subsidiaries
The Amount of
Difference Other
Between the Book Determination Comprehen
Fair Value
Dispo Disposal Value of Gains or Methods and sive
of the
sal Price and Proporti the Losses Main Income
Remainin
Disposal Metho the Share of on of Remainin Arising Assumptions Related to
Disposal g Equity
Ratio of ds of Basis for the Remaini g Equity from of the Fair Equity
Price of at the
the the Determining Subsidiaries' ng at the Remeas Value of the Investment
Time Point of the Consolida
Time Time the Time Net Assets Equity Consolida urement Remaining of the
Name of Subsidiary Losing Time ted
Point of Point Point of at the Level on the ted of Equity on the Original
Control Point of Financial
Losing of Losing of Date of Financial Remaini Date of Losing Subsidiary
Losing Statement
Control Losin Control Consolidate Losing Statement ng Control at the Transferred
Control Level on
(%) g d Control Level on Equity Consolidated into
the Date
Contr Statements (%) the Date at Fair Financial Investment
of Losing
ol Correspondi of Losing Value Statement Profits and
Control
ng to the Control Level Losses or
Disposal Retained
Investment Earnings
Tianjin Gree Xinhui
Cance Business
Medical Equipment 2023-10-30 100.00 None
led registration
Co., Ltd.
SL Group Jingu Grain Cance Business
2023-8-25 100.00 None
Depot Co., Ltd. led registration
SL Group Songlin Cance Business
2023-9-22 100.00 None
Grain Depot Co., Ltd. led registration
DunAn Sensing Cance Business
2023-6-5 66.58 None
Technology Co., Ltd. led registration
Jilin Songliang Modern
Cance Business
Logistics Development 2023-5-6 100.00 None
led registration
Co., Ltd.
Change of consolidation scope for other reasons
Newly established entity in the current period:
Page 275 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Net Profit from the Combination Date
Company Name Date of Establishment Net Assets at the End of the Period
to the End of the Period
Hunan DunAn Refrigeration Equipment Co., Ltd. 2023-2-7 22,486,643.44 2,486,643.44
Luoyang Herun Real Estate Co., Ltd. 2023-9-28 -51,151.68 -51,151.68
Gree Lintanyuan (Shanghai) Technology Co., Ltd. 2023-10-20
VII. Equity in other subjects
Equity in subsidiaries
(1) Composition of the enterprise group
Shareholding
Main
Place of Nature of Ratio (%) Voting Right
S/N Name of Subsidiary Business Acquisition Method
Registration Business Indirec Proportion (%)
Location Direct
t
Chongqing Chongqing Industrial
1 Gree (Chongqing) Electric Appliances Co., Ltd. 97.00 97.00 Establishment
City City manufacture
Industrial Business combination
2 Zhuhai Landa Compressor Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00
manufacture under common control
Industrial Business combination
3 Zhuhai Gree Electric Enterprises Ltd. Zhuhai City Zhuhai City 100.00 100.00
manufacture under common control
Industrial Business combination
4 Zhuhai Gree Xinyuan Electronics Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00
manufacture under common control
Industrial Business combinations not
5 Zhuhai Kaibang Motor Manufacturing Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00
manufacture under common control
Industrial
6 Gree (Hefei) Electric Appliances Co., Ltd. Hefei City Hefei City 100.00 100.00 Establishment
manufacture
Zhongshan Zhongshan Industrial
7 Gree (Zhongshan) Small Home Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Business combination
8 Zhuhai Gree Group Finance Company Limited Zhuhai City Zhuhai City Finance 99.54 0.46 100.00
under common control
Manaus, Manaus, Industrial
9 Gree Electric Appliances (Brazil) Co., Ltd. 100.00 100.00 Establishment
Brazil Brazil manufacture
Kowloon, Kowloon, Business combinations not
10 Gree Hong Kong Electric Appliances Sales Co., Ltd. Sales 100.00 100.00
Hong Kong Hong Kong under common control
Shanghai Shanghai
11 Gree Shanghai Air Conditioners Sales Co., Ltd. Sales 90.00 9.70 99.70 Establishment
City City
Page 276 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Shareholding
Main
Place of Nature of Ratio (%) Voting Right
S/N Name of Subsidiary Business Acquisition Method
Registration Business Indirec Proportion (%)
Location Direct
t
Industrial
12 Zhuhai Gree Daikin Precision Mold Co., Ltd. Zhuhai City Zhuhai City 51.00 51.00 Establishment
manufacture
Industrial
13 Zhuhai Gree Dakin Device Co., Ltd. Zhuhai City Zhuhai City 51.00 51.00 Establishment
manufacture
Technical
Zhuhai Gree Green Refrigeration Technology Research
14 Zhuhai City Zhuhai City research and 100.00 100.00 Establishment
Center Co., Ltd.
development
Zhengzhou Zhengzhou Industrial
15 Gree (Zhengzhou) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
16 Gree (Wuhan) Electric Appliances Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Zhengzhou Zhengzhou Industrial
17 Zhengzhou Gree Green Renewable Resources Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Ningxiang Ningxiang Industrial
18 Hunan Green Renewable Resources Co., Ltd. 100.00 100.00 Establishment
County County manufacture
Industrial
19 Wuhu Green Renewable Resources Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Shijiazhuang Shijiazhuang Industrial
20 Gree (Shijiazhuang) Small Home Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
21 Gree (Wuhu) Electric Appliances Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Shijiazhuang Shijiazhuang Industrial
22 Shijiazhuang Green Renewable Resources Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Shijiazhuang Shijiazhuang Industrial Business combinations not
23 Gree (Shijiazhuang) Electric Appliances Co., Ltd. 100.00 100.00
City City manufacture under common control
Tianjin Green Renewable Resources Utilization Co., Industrial
24 Tianjin City Tianjin City 100.00 100.00 Establishment
Ltd. manufacture
Zhuhai Gree HVAC and Refrigeration Equipment Co., Industrial
25 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Ltd. manufacture
Industrial
26 Zhuhai Gree TOSOT Home Appliances Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Information
27 Zhuhai EWPE Information Technology Inc. Zhuhai City Zhuhai City 100.00 100.00 Establishment
technologies
Changsha Changsha Industrial
28 Gree (Changsha) HVAC Equipment Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
29 Gree TOSOT (Suqian) Home Appliances Co., Ltd. Suqian City Suqian City 100.00 100.00 Establishment
manufacture
Page 277 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Shareholding
Main
Place of Nature of Ratio (%) Voting Right
S/N Name of Subsidiary Business Acquisition Method
Registration Business Indirec Proportion (%)
Location Direct
t
Industrial
30 Wuhu Gree Precision Manufacturing Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Industrial
31 Zhuhai Gree Intelligent Equipment Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
32 Zhuhai Hengqin Gree Business Factoring Co., Ltd. Zhuhai City Zhuhai City Finance 100.00 100.00 Establishment
Industrial
33 Zhuhai Gree Precision Mold Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Gree HVAC and Refrigeration Equipment (Wuhan) Industrial
34 Wuhan City Wuhan City 100.00 100.00 Establishment
Co., Ltd. manufacture
Zhuhai Gree Intelligent Equipment Technology Industrial
35 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Institute Co., Ltd. manufacture
Industrial
36 Zhuhai Gree New Material Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
37 Gree Precision Mould (Wuhan) Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Zhuhai Gree Energy Environment Technology Co., Industrial
38 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Ltd. manufacture
Hangzhou Hangzhou Industrial
39 Gree (Hangzhou) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Information
40 Gree Information Technology Co., Ltd. of Zhuhai Zhuhai City Zhuhai City 51.00 51.00 Establishment
technologies
Chengdu Chengdu Industrial
41 Gree HVAC Equipment (Chengdu) Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Technical
Gree CNC Machine Tool Research Institute Co., Ltd.
42 Zhuhai City Zhuhai City research and 100.00 100.00 Establishment
of Zhuhai
development
Gree (Wu'an) Precision Equipment Manufacturing Co., Wu'an Wu'an Industrial
43 70.00 70.00 Establishment
Ltd. County County manufacture
44 Zhuhai Gree Transportation Co., Ltd. Zhuhai City Zhuhai City Transportation 100.00 100.00 Establishment
Technical
Luoyang Luoyang
45 Gree Robot (Luoyang) Co., Ltd. research and 100.00 100.00 Establishment
City City
development
Industrial
46 Gree (Nanjing) Electric Appliances Co., Ltd. Nanjing City Nanjing City 100.00 100.00 Establishment
manufacture
Luoyang Luoyang Industrial
47 Gree (Luoyang) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Page 278 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Shareholding
Main
Place of Nature of Ratio (%) Voting Right
S/N Name of Subsidiary Business Acquisition Method
Registration Business Indirec Proportion (%)
Location Direct
t
Industrial
48 Zhuhai Edgeless Integrated Circuit Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
49 Zhuhai Lianyun Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Chengdu Chengdu Industrial
50 Gree (Chengdu) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
51 Gree Material Supply Co., Ltd. of Zhuhai Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
52 Zhuhai Gree Green Control Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial Business combinations not
53 Hefei Kinghome Electrical Co., Ltd. Hefei City Hefei City 100.00 100.00
manufacture under common control
Zhuhai Gree Mechanical and Electrical Engineering Industrial Business combination
54 Zhuhai City Zhuhai City 100.00 100.00
Co., Ltd. manufacture under common control
Chengdu Chengdu Industrial
55 Gree Precision Mold (Chengdu) Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Gree Electric Appliances (Luoyang) Washing Machine Luoyang Luoyang Industrial
56 100.00 100.00 Establishment
Co., Ltd. City City manufacture
Guochuang Energy Internet Innovation Center Information
57 Zhuhai City Zhuhai City 75.00 1.52 76.52 Establishment
(Guangdong) Co., Ltd. technologies
Industrial
58 Gree Precision Mould (Anji) Co., Ltd. Anji County Anji County 100.00 100.00 Establishment
manufacture
Industrial
59 Zhuhai Gree Green Resources Recycling Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Wholesales
60 Gree E-commerce Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
and retails
Medical
61 Zhuhai Gejian Health Medical Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
device
Zhuhai Gree Electrical Intelligent Manufacturing Co., Industrial
62 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Ltd. manufacture
Chengdu Chengdu Medical
63 Gree Chengdu Xinhui Medical Equipment Co., Ltd. 75.00 1.52 76.52 Establishment
City City device
Songyuan Songyuan Business combinations not
64 SL Group Co., Ltd. Agriculture 75.00 75.00
City City under common control
Ganzhou Ganzhou Industrial
65 Gree (Ganzhou) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
66 Gree (Linyi) Electric Appliances Co., Ltd. Linyi City Linyi City 100.00 100.00 Establishment
manufacture
Page 279 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Shareholding
Main
Place of Nature of Ratio (%) Voting Right
S/N Name of Subsidiary Business Acquisition Method
Registration Business Indirec Proportion (%)
Location Direct
t
Real estate
67 Gree (Zhuhai Hengqin) Development Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
industry
Changsha Changsha Industrial
68 Changsha Kinghome Electric Appliances Co., Ltd 100.00 100.00 Establishment
City City manufacture
Research and
Business combinations not
69 Gree Altairnano New Energy Inc. Zhuhai City Zhuhai City experimental 55.01 72.47
under common control
development
70 Zhuhai Mingruida Supply Chain Technology Co., Ltd. Zhuhai City Zhuhai City Transportation 70.00 70.00 Establishment
Industrial Business combinations not
71 Zhejiang DunAn Artificial Environment Co., Ltd. Zhuji City Zhuji City 38.78 38.78
manufacture under common control
Industrial
72 Zhuhai Gree Electronic Components Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Wholesales
73 Zhuhai Gree Digital Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
and retails
Zhuhai Gree Prefabricated Vegetable Equipment Industrial
74 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Technology Development Co., Ltd. manufacture
Electrical
machinery and
Shanghai Shanghai
75 Gree Lintanyuan (Shanghai) Technology Co., Ltd. equipment 40.00 15.30 55.30 Establishment
City City
manufacturing
industry
[Note] The Company directly holds 38.78% equity interests in Zhejiang DunAn Artificial Environment Co., Ltd. (hereinafter referred to as "DunAn
Environment"), becoming the largest shareholder of DunAn Environment, which has the power to reorganize the board of directors of DunAn Environment and
nominate more than half of the directors. The Company has completed the reorganization of the board of directors of DunAn Environment, and occupies more than
half of the seats on the board of directors. It can control DunAn Environment, and include DunAn Environment into the scope of company consolidation.
(2) Important non wholly-owned subsidiaries
None.
Page 280 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Transactions in which the share of owner's equity in the subsidiary changes and still controls the
subsidiary
In December 2023, the Company transferred 270.7232 million shares of Gree Altairnano (accounting for
24.54% of the total share capital of Gree Altairnano) held by 12 minority shareholders of its subsidiary
GREE Altairnano New Energy Inc. (hereinafter referred to as "Gree Altairnano"), the transaction price is
RMB1,015,328,400. After the transfer of this part of the shares, the Company controls the voting rights
corresponding to 799,592,600 shares of Gree Altairnano, accounting for 72.47% of the total share capital of
Gree Altairnano. Among them, the Company directly holds 606,920,600 shares of Gree Altairnano
(accounting for 55.01% of Gree Altairnano's total share capital), and arranges for the voting rights
corresponding to Ms. Dong Mingzhu's 192.672 million shares of Gree Altairnano (accounting for 17.46%
of Gree Altairnano's total share capital) through voting rights delegation.
Equities in joint ventures or associates
(1) Important joint ventures or associates
None.
(2) Main financial information of important joint ventures
None.
(3) Main financial information of important associates
None.
(4) Summary financial information of unimportant joint ventures and associates
Ending balance/Current amount Beginning balance/Amount incurred
Item
incurred in the previous period
Joint ventures:
Total investment book value 1,158,934.68 1,166,358.97
The total number of the following
items was calculated based on the
shareholding ratio
Net Profits -7,424.29 -54,555.22
Total comprehensive income -7,424.29 -54,555.22
Associates:
Total investment book value 4,487,808,096.52 5,891,124,209.84
The total number of the following
items was calculated based on the
shareholding ratio
Net Profits 93,229,867.45 -3,269,732.02
Other comprehensive income -1,013,488,757.99 -4,752,978,434.78
Total comprehensive income -920,258,890.54 -4,756,248,166.80
(5) Significant restrictions on the ability of joint ventures or associates to transfer funds to the Company
None.
(6) Excess losses incurred by joint ventures or associates
Page 281 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Unrecognized losses in the Accumulated
Accumulated unrecognized
Name of joint venture or current period (or net unrecognized losses at
losses accumulated in the
associates profit share in the current the end of the current
previous period
period) period
Beijing Gree Technology Co.,
-571,081.35 -557,806.42 -1,128,887.77
Ltd.
Eocell Limited -2,002,480.71 -8,184,268.64 -10,186,749.35
(7) Unrecognized commitments related to investment in joint ventures
None.
(8) Contingent liabilities related to investment in joint ventures or associates
None.
Important co-management
None.
Equity in structured entities is not included in the Consolidated Financial Statements
None.
VIII. Government grants
Government grants are recognized at the end of the period based on the amount receivable
There are no government grants recognized at the end of the period based on the amount receivable
Debt projects involved government grants
Items in Newly added grant Other income
Beginning Related to
financial amount in this transferred in this Ending Balance
balance assets/incomes
statements period period
Deferred
3,159,328,449.42 348,896,246.22 183,078,821.79 3,325,145,873.85 Related to assets
income
Deferred Related to
175,749,517.97 75,257,308.26 51,997,898.56 199,008,927.67
income incomes
Total 3,335,077,967.39 424,153,554.48 235,076,720.35 3,524,154,801.52
Government subsidies included in the profits and losses this year
Amount incurred for the previous
Items in financial statements Amount for the current period
period
Other income 716,882,751.82 866,364,721.39
Non-operating revenues 26,340,308.60 11,816,261.51
Total 743,223,060.42 878,180,982.90
IX. Risks associated with financial instruments
Main financial instruments of the Company including monetary funds, trading financial assets, derivative
financial assets, notes receivable, receivables financing, receivables, loans issued and advances, buying
back the sale of financial assets, debt investments, other debt investments, other equity instrument
investments, other financial liabilities arising from operation (e.g., payables). These financial instruments
aim to provide funds for operations of the Company.
Page 282 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The main risks caused by the Company's financial instruments are credit risk, liquidity risk, and market risk.
Risks of financial instruments
(1) Classification of financial instruments
The book values of various financial instruments on the balance sheet date:
1) Ending Balance
Classification of financial assets
Financial assets
Financial assets
measured at fair
measured at fair
Item Financial assets are value with
value with changes
measured at changes included Total
included in other
amortization costs in other
comprehensive
comprehensive
income
income
1. Measured at amortized
costs
Monetary funds 124,104,987,289.62 124,104,987,289.62
Notes receivable 87,340,130.52 87,340,130.52
Accounts receivable 16,099,477,117.56 16,099,477,117.56
Other receivables 826,558,622.42 826,558,622.42
Buying back the sale of
3,932,338,954.49 3,932,338,954.49
financial assets
Non-current assets due
53,899,646.40 53,899,646.40
within one year
Other current financial assets 22,648,940,712.61 22,648,940,712.61
Disbursement of loans and
543,726,609.23 543,726,609.23
advances
Debt investment 1,150,744,482.05 1,150,744,482.05
Long-term receivables 62,185,327.12 62,185,327.12
Other non-current financial
41,140,982,554.52 41,140,982,554.52
assets
Subtotal 210,651,181,446.54 210,651,181,446.54
2. Measured at fair values
Trading financial assets 9,614,423,403.40 9,614,423,403.40
Derivative financial assets 108,919,513.22 108,919,513.22
Receivables financing 10,176,089,668.41 10,176,089,668.41
Non-current assets due
2,357,733,812.89 2,357,733,812.89
within one year
Other current financial assets 3,175,475.00 5,407,350.00 8,582,825.00
Other debt investments 16,363,841,665.96 16,363,841,665.96
Other equity instrument
3,864,865,509.37 3,864,865,509.37
investments
Subtotal 32,765,706,131.63 9,728,750,266.62 42,494,456,398.25
Total 210,651,181,446.54 32,765,706,131.63 9,728,750,266.62 253,145,637,844.79
(Continued)
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Classification of financial liabilities
Financial liabilities
Item
measured at fair value with
Other financial liabilities Total
changes included in the
current profits and losses
1. Measured at amortized
costs
Short-term borrowings 26,443,476,388.52 26,443,476,388.52
Notes payable 23,741,128,400.12 23,741,128,400.12
Accounts payable 41,147,359,221.95 41,147,359,221.95
Deposits from customers and
254,616,899.35 254,616,899.35
interbank
Other payables 5,513,266,516.82 5,513,266,516.82
Non-current liabilities due
20,605,521,073.03 20,605,521,073.03
within one year
Other current financial
8,654,989,988.95 8,654,989,988.95
liabilities
Long-term borrowings 39,035,742,535.09 39,035,742,535.09
Lease liabilities 767,007,951.92 767,007,951.92
Long-term payables 27,028,498.30 27,028,498.30
Subtotal 166,190,137,474.05 166,190,137,474.05
2. Measured at fair values
Derivative financial
4,079,919.91 4,079,919.91
liabilities
Subtotal 4,079,919.91 4,079,919.91
Total 4,079,919.91 166,190,137,474.05 166,194,217,393.96
2) Beginning balance
Classification of financial assets
Financial assets Financial assets
Item measured at fair measured at fair
Financial assets
value with changes value with changes
measured at Total
included in other included in other
amortization costs
comprehensive comprehensive
income income
1. Measured at amortized
costs
Monetary funds 157,484,332,251.39 157,484,332,251.39
Notes receivable 6,818,428.95 6,818,428.95
Accounts receivable 14,824,742,623.45 14,824,742,623.45
Other receivables 804,277,958.80 804,277,958.80
Non-current assets due
38,344,030.45 38,344,030.45
within one year
Other current financial assets 2,646,094,959.26 2,646,094,959.26
Disbursement of loans and
719,799,280.27 719,799,280.27
advances
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Classification of financial assets
Financial assets Financial assets
Item measured at fair measured at fair
Financial assets
value with changes value with changes
measured at Total
included in other included in other
amortization costs
comprehensive comprehensive
income income
Debt investment 150,351,500.00 150,351,500.00
Long-term receivables 116,084,973.52 116,084,973.52
Other non-current financial
192,148,986.36 192,148,986.36
assets
Subtotal 176,982,994,992.45 176,982,994,992.45
2. Measured at fair values
Derivative financial assets 3,867,203,363.52 3,867,203,363.52
Receivables financing 28,427,310,345.20 28,427,310,345.20
Non-current assets due
3,275,847,602.74 3,275,847,602.74
within one year
Other current financial assets 1,260,250.00 998,950.00 2,259,200.00
Other debt investments 14,340,348,882.97 14,340,348,882.97
Other equity instrument
4,669,455,797.90 4,669,455,797.90
investments
Other non-current financial
4,428,003,204.49 4,428,003,204.49
assets
Subtotal 50,714,222,878.81 8,296,205,518.01 59,010,428,396.82
Total 176,982,994,992.45 50,714,222,878.81 8,296,205,518.01 235,993,423,389.27
(Continued)
Classification of financial liabilities
Financial liabilities
Item
measured at fair value with
Other financial liabilities Total
changes included in the
current profits and losses
1. Measured at amortized
costs
Short-term borrowings 52,895,851,287.92 52,895,851,287.92
Notes payable 38,609,900,819.74 38,609,900,819.74
Accounts payable 32,856,071,488.87 32,856,071,488.87
Deposits from customers and
219,111,069.61 219,111,069.61
interbank
Other payables 10,912,406,666.89 10,912,406,666.89
Non-current liabilities due
188,387,613.61 188,387,613.61
within one year
Other current financial
3,412,127,253.85 3,412,127,253.85
liabilities
Long-term borrowings 30,784,241,211.21 30,784,241,211.21
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Classification of financial liabilities
Financial liabilities
Item
measured at fair value with
Other financial liabilities Total
changes included in the
current profits and losses
Lease liabilities 146,836,620.66 146,836,620.66
Long-term payables 104,644,415.20 104,644,415.20
Subtotal 170,129,578,447.56 170,129,578,447.56
2. Measured at fair values
Derivative financial
184,811,894.98 184,811,894.98
liabilities
Subtotal 184,811,894.98 184,811,894.98
Total 184,811,894.98 170,129,578,447.56 170,314,390,342.54
(2) Credit risks
Credit risk refers to a risk of financial losses suffered by one party due to the non-performance of
obligations by the other party of financial instrument.
The Company only have transactions with recognized customers with a good reputation. Under the policies
of the Company, all the customers who require the credit form for transactions shall undergo credit review.
Besides, the Company continuous to monitor the balance of accounts receivable to ensure that the
Company is not confronted with the major risk of bad debts.
Financial assets of the Company include monetary funds, receivables financing. The credit risks of these
financial assets come from nonperformance of the transaction counterparty, and the maximum risk
exposure is equal to the carrying amount of these instruments.
The monetary funds are deposited in state-owned financial institutions with high credit rating, minimizing
the risk; the receivables financing is mainly banker's acceptance bills, and the risk exposure is rather small.
The book values of notes receivable, receivables financing, accounts receivable, other receivables, contract
assets, loans issued and advances, and long-term receivables in the Consolidated Balance Sheet are the
highest credit risk with which the Company may be confronted.
As of the end of the report period, the Company's notes receivables, accounts receivable, receivables
financing, other receivables, contract assets, loans issued and advances, and long-term receivables account
for 12.96% of the total assets (the beginning balance is 14.11%), and the above amounts are mainly due
within 1 year, so the Company has no significant credit risk. The Company's credit risk exposure arising
from the above financial assets is disclosed in this Note “V. 4. Notes receivable”, Note “V. 5. Accounts
receivable”, Note “V. 7. Receivables financing” , Note “V. 9. Other receivables”, Note “V. 6. Contract
assets”, Note “V. 14. Disbursement of loans and advances”, and Note “V. 17. Long-term receivables”.
(3) Liquidity risks
Liquidity risk refers to a risk of fund shortage generated when the enterprise performs the obligation to
settle accounts by cash payment or other financial assets.
As indicated by changes in the Company’s financial instruments at the beginning and end of the period, the
proportion of the Company's "Financial assets" to "Financial liabilities" at the end of the report period was
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
1.52 (which was 1.39 at the beginning of the period), showing that the Company has adequate liquidity and
the risk in shortage of liquidity is low.
(4) Market risks
Market risk refers to a risk of fluctuation in the fair value or future cash flow of financial instrument due to
changes in the market price, including fair value fluctuation risk, exchange rate risk, and interest rate risk.
1) Fair value fluctuation risk
The Company's financial investments mainly involve products such as stocks, wealth management products,
bonds, negotiable certificates of deposit, and forward settlement and sales. Except for the significant
fluctuations in the fair value of stocks, the fair value of products such as wealth management products,
bonds, negotiable certificates of deposit, and forward settlement and sales does not fluctuate significantly.
The stocks held by the Company are mainly stocks traded on the open market, and the quality of the
invested companies is relatively good.
As of the end of the report period, the Company's wealth management products, bonds, negotiable
certificates of deposit, and forward settlement and sales account for 11.55% of the total assets (the
beginning balance is 16.62%), which are measured at fair value. The Company's fair value risk exposure
arising from the above financial assets is described in this Note “V. 2. Trading financial assets”, Note “V. 3.
Derivative financial assets”, Note “V. 7. Receivables financing”, Note “V. 13. Other current assets”, Note
“V. 16. Other debt investments”, and Note “5. 19. Other equity instrument investments”.
2) Exchange rate risk
Exchange rate risk refers to the risk of fluctuation in the fair value or future cash flow of financial
instruments due to changes in the foreign exchange rate.
As of December 31, 2023, the amounts of foreign currency financial assets and liabilities held by the
Company converted into RMB are presented in details in this Note “V. 74. (1). Monetary items in foreign
currencies”.
The Company minimizes the exchange rate risk by carrying out the forward exchange transaction business
and controlling the scale of foreign currency assets and liabilities according to changes in the market
exchange rate.
3) Interest rate risks
Interest rate risk refers to the risk of fluctuation in the fair value or future cash flow of financial instruments
due to changes in the market interest rate.
As of December 31, 2023, the Company's liabilities with interests are as follows:
Statement Item Amount Interest Rate Range
Short-term borrowings 26,443,476,388.52 1.10%-7.32%
Deposits from customers and
254,616,899.35 0.38%-3.65%
interbank
Other payables 1,654,225,040.13 4.35%-5.00%
Non-current liabilities due within one
20,515,695,053.43 2.55%-5.30%
year
Long-term borrowings 39,035,742,535.09 2.00%-5.80%
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Statement Item Amount Interest Rate Range
Long-term payables 27,028,498.30 4.67%-6.20%
Total 87,930,784,414.82
X. Fair value disclosure
Ending fair value of assets and liabilities measured at fair value
Ending Fair Value
Item Measurement of Measurement of Measurement of
level 1 of the fair level 2 of the fair level 3 of the fair Total
value hierarchy value hierarchy value hierarchy
Continuous fair value
measurement
Trading financial assets 4,210,873,172.60 5,347,467,140.40 56,083,090.40 9,614,423,403.40
Derivative financial assets 108,919,513.22 108,919,513.22
Receivables financing 10,176,089,668.41 10,176,089,668.41
Non-current assets due within
82,482,033.30 2,275,251,779.59 2,357,733,812.89
one year
Other current financial assets 8,582,825.00 8,582,825.00
Other debt investments 1,168,246,004.63 15,195,595,661.33 16,363,841,665.96
Other equity instrument
3,857,865,509.37 7,000,000.00 3,864,865,509.37
investments
The total of assets measured at
9,328,049,544.90 33,103,323,762.95 63,083,090.40 42,494,456,398.25
fair value continuously
Derivative financial liabilities 4,079,919.91 4,079,919.91
Total of liabilities measured at
4,079,919.91 4,079,919.91
fair value continuously
The basis for determining market prices of items measured within the level 1 of the fair value
hierarchy continuously and not continuously
Trading financial assets, other current assets, other debt investment bonds, other equity instrument
investments, and other non-current financial assets held by the Company and measured within level 1 of
fair value hierarchy are determined based on the quotation of corresponding products and investment
projects on the open market.
Qualitative and quantitative information on valuation techniques and important parameters for
items measured within level 2 of the fair value hierarchy continuously and not continuously
Assets held by the Company measured within level 2 of the fair value hierarchy are determined using the
market approach and income approach;
Receivables financing held by the Company measured within level 2 of fair value hierarchy are the bank
acceptance bills and accounts receivable held by the Company, and their corresponding transfer and
discounted amounts are used as the basis for determining their market prices.
Trading financial assets and derivative financial liabilities held by the Company measured within level 2 of
fair value hierarchy are mainly forward hedging instruments and asset management plans, and the
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
determination of the fair value is based on the fair value confirmation letter issued by the trading institution
at the end of the period;
Non-current assets and other debt investments held by the Company measured within level 2 of fair value
hierarchy within one year are mainly negotiable certificates of deposit, and the fair value is determined
based on the prices of the same or similar assets in the inactive market.
Qualitative and quantitative information on valuation techniques and important parameters for
items measured within level 3 of the fair value hierarchy continuously and not continuously
Trading financial assets and non-trading equity instrument investments designated to be measured at fair
value with their changes included in other comprehensive income held by the Company and measured
within level 3 of the fair value hierarchy are mainly items that have no observable data validation in the
active market and use their data to make financial predictions.
For continuous fair value measurement items, in case of conversion among different levels during the
current period, the reasons for conversion and the policy for determining the timing for conversion
None.
Changes in valuation techniques and reasons for changes occurred during the current period
None.
Fair values of financial assets and liabilities not measured at fair value
None.
XI. Affiliated parties and affiliated transaction
Information on the Company's parent company
The Company has no controlling shareholders or substantial controllers.
Information on the Company's subsidiaries
For details, see Note “VII. 1. Equity in subsidiaries”.
Joint ventures and associates of the Company
(1) For details of other joint ventures or associates that have affiliated party transactions with the
Company in the current period, or have affiliated party transactions with the Company in the previous
period to form a balance, please refer to this Note “V. 18. Long-term equity investments” and Note “VII. 3.
(6) Excess losses incurred by joint ventures or associates”.
Other affiliated parties
Relationship Between Other Related Parties and the
Name of other affiliates
Company
Company that have a significant impact on it by the
Wuhu Green Renewable Resources Recycling Co., Ltd.
Company.
Shanghai Highly (Group) Co., Ltd. and its holding Company in which the Company holds over 5.00% of its
subsidiaries shares
Page 289 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Relationship Between Other Related Parties and the
Name of other affiliates
Company
Companies where directors of the Company act as executive
Zhejiang Shengshi Xinxing Gree Trade Co., Ltd.
directors and general managers
Companies where directors of the Company act as executive
Henan Shengshi Xinxing Gree Trade Co., Ltd.
directors
Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. Companies held by directors of the Company or where a
and its holding companies director of the Company acts as chair of the board
Companies where directors of the Company act as executive
Henan Gree Installation Engineering Co., Ltd.
directors
Shandong Jierui Logistics Co., Ltd. Company held by the Company's supervisor
Company where the Company's independent directors serve
ETR Law Firm
as its partner chair
Shandong Red April Holding Group Co., Ltd. and its
Company held by the Company's supervisor
holding companies
Company where the son of the Company's director acts as
Henan Huizhong Yifeng E-commerce Co., Ltd.
executive directors
Company that have a significant impact on it by the
Hunan Green Renewable Resources Recycling Co., Ltd.
Company.
Company where the Director and Vice President of the
Chang'an Bank Co., Ltd.
Company serve as a Director
Affiliated transaction
(1) Affiliated transactions of purchase and sale of commodities, provision and receiving labor services
1) Purchase of commodities/receiving labor services
Type of Content of Amount incurred
Amount for the
Affiliated parties Affiliated Affiliated for the previous
current period
Transaction Transactions period
Shanghai Highly (Group) Co., Ltd. and Material
Raw materials 1,347,112,001.68 1,823,440,035.04
its holding subsidiaries procurement
Material
Beijing Gree Technology Co., Ltd. Accessories 16,652,917.66 39,096,011.43
procurement
Interest
Sichuan Jinshi Leasing Co., Ltd. and its Service expenses and
14,709,472.85 28,480,495.00
holding companies procurement consulting
services
Service
Henan Yuze Finance Leasing Co., Ltd. Interest expense 3,549,617.92 5,633,699.15
procurement
Henan Shengshi Xinxing Gree Trade Material
Raw materials 488,645.15
Co., Ltd. procurement
Zhejiang Tongcheng Gree Electric
Accept money
Appliances Co., Ltd. and its holding Interest expense 62.23 83.91
deposits
companies
Henan Shengshi Xinxing Gree Trade Accept money
Interest expense 45.18 57.58
Co., Ltd. deposits
Shanghai Highly (Group) Co., Ltd. and Fixed asset Equipment
531,000.00
its holding subsidiaries procurement procurement
Lanzhou Guangtong New Energy Material
Raw materials 530,973.42
Automobile Co., Ltd. procurement
Hunan Green Renewable Resources Material
Raw materials 15,284.03
Recycling Co., Ltd. procurement
Shanghai Highly (Group) Co., Ltd. and Service Transport
711,075.42
its holding subsidiaries procurement service
DunAn (Tianjin) Energy Saving System Service
Design services 18,867.92
Co., Ltd. and its holding companies procurement
Total 1,382,512,762.67 1,898,457,582.90
2) Schedule of commodities sold/services provided
Type of Content of Amount incurred
Amount for the
Affiliated parties Affiliated Affiliated for the previous
current period
Transaction Transactions period
Page 290 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Type of Content of Amount incurred
Amount for the
Affiliated parties Affiliated Affiliated for the previous
current period
Transaction Transactions period
Zhejiang Shengshi Xinxing Gree
Sale of goods Sales revenue 5,885,129,357.41 5,731,889,146.80
Trade Co., Ltd.
Henan Shengshi Xinxing Gree Trade
Sale of goods Sales revenue 4,673,380,959.10 4,142,114,712.28
Co., Ltd.
Shanghai Highly (Group) Co., Ltd.
Sale of goods Sales revenue 1,025,827,011.12 886,224,374.20
and its holding subsidiaries
Henan Huizhong Yifeng E-commerce
Sale of goods Sales revenue 22,940,080.25 101,355,077.81
Co., Ltd.
Lanzhou Guangtong New Energy
Sale of goods Sales revenue 1,747,290.45 569,555.04
Automobile Co., Ltd.
Beijing Gree Technology Co., Ltd. Loan Interest income 647,429.80 939,755.42
Beijing Gree Technology Co., Ltd. Sale of goods Sales revenue 115,919.47 417,472.01
Zhejiang Tongcheng Gree Electric
Appliances Co., Ltd. and its holding Sale of goods Sales revenue 74,808.34
companies
Eocell Limited Sale of goods Sales revenue 35,657.27 27,570.07
ETR Law Firm Sale of goods Sales revenue 2,779.94 10,250.01
Chang'an Bank Co., Ltd. Sale of goods Sales revenue 211.50
Shanghai Highly (Group) Co., Ltd.
Loan Interest income 11,901.29
and its holding subsidiaries
Hunan Green Renewable Resources
Sale of goods Sales revenue 2,160.00
Recycling Co., Ltd.
Henan Yuze Finance Leasing Co.,
Sale of goods Sales revenue 3,074.34
Ltd.
Henan Shengshi Xinxing Gree Trade Commission
Loan 4.91
Co., Ltd. income
Total 11,609,901,504.65 10,863,565,054.18
(2) Associated trusteeship management/contracting or entrusted management/contract awarding
None.
(3) Associated lease
1) The Company as the Lessor:
None.
2) The Company as the Leasee:
None.
(4) Associated guarantee
None.
(5) Fund lending among affiliated parties
None.
(6) Asset transfer and debt restructuring of affiliated parties
None.
(7) Remunerations for key management personnel
Amount incurred for the
Item Amount for the current period
previous period
Remunerations for key management personnel 34,081,922.40 31,583,041.09
(8) Other affiliated transactions
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
None.
Receivables and payables of affiliated parties
(1) Receivables
Ending Balance Beginning balance
Item Affiliated parties
Book balance Bad debt reserves Book balance Bad debt reserves
Shanghai Highly (Group)
Accounts
Co., Ltd. and its holding 246,543,051.23 12,327,152.54 287,911,901.16 14,395,595.07
receivable
subsidiaries
Accounts Lanzhou Guangtong New
168,267,904.76 138,251,251.48 180,395,669.13 94,149,507.45
receivable Energy Automobile Co., Ltd.
Wuhu Green Renewable
Accounts
Resources Recycling Co., 2,263,529.62 1,131,764.81 6,053,077.41 3,026,538.71
receivable
Ltd.
Receivables Henan Shengshi Xinxing
435,297,317.29 1,336,259,825.18
financing Gree Trade Co., Ltd.
Receivables Zhejiang Shengshi Xinxing
189,472,820.55 748,666,894.28
financing Gree Trade Co., Ltd.
Receivables Shandong Jierui Logistics
176,233,586.82 312,596,763.66
financing Co., Ltd.
Shanghai Highly (Group)
Receivables
Co., Ltd. and its holding 124,206,884.12 221,903,936.78
financing
subsidiaries
Receivables Henan Gree Installation
9,972,475.49
financing Engineering Co., Ltd.
Zhejiang Tongcheng Gree
Receivables
Electric Appliances Co., Ltd. 5,634,448.65 54,569,724.30
financing
and its holding companies
Shandong Red April Holding
Receivables
Group Co., Ltd. and its 189,907,561.46
financing
holding companies
Shanghai Highly (Group)
Notes
Co., Ltd. and its holding 16,000,000.00 800,000.00
receivable
subsidiaries
Sichuan Jinshi Leasing Co.,
Advance
Ltd. and its holding 6,082,225.00 12,164,450.00
payments
companies
Shanghai Highly (Group)
Advance
Co., Ltd. and its holding 5,641,887.98 2,349,194.19
payments
subsidiaries
Advance Beijing Gree Technology
21,117.45
payments Co., Ltd.
DunAn (Tianjin) Energy
Other
Saving System Co., Ltd. and 172,325,809.58 129,244,357.19 172,380,562.38 86,190,281.19
receivables
its holding companies
Sichuan Jinshi Leasing Co.,
Other
Ltd. and its holding 19,519,366.99 4,879,841.75 20,000,000.00 3,000,000.00
receivables
companies
Shanghai Highly (Group)
Other
Co., Ltd. and its holding 343,266.03 19,413.30 5,000.00 350.00
receivables
subsidiaries
Sichuan Jinshi Leasing Co.,
Other non-
Ltd. and its holding 18,500,000.00 4,625,000.00 18,500,000.00 2,775,000.00
current assets
companies
Contract Lanzhou Guangtong New
4,866,569.63 1,946,627.85
assets Energy Automobile Co., Ltd.
Total 1,596,304,574.11 291,278,781.07 3,568,552,247.01 205,483,900.27
(2) Payables
Beginning
Item Affiliated parties Ending Balance
balance
Page 292 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning
Item Affiliated parties Ending Balance
balance
Zhejiang Tongcheng Gree Electric Appliances
Accept money deposits 16,192.56 16,124.33
Co., Ltd. and its holding companies
Accept money deposits Henan Shengshi Xinxing Gree Trade Co., Ltd. 12,068.59 11,323.41
Shanghai Highly (Group) Co., Ltd. and its
Accounts payable 425,094,848.95 184,621,746.92
holding subsidiaries
Accounts payable Beijing Gree Technology Co., Ltd. 12,029,563.76 8,942,070.53
Hunan Green Renewable Resources Recycling
Accounts payable 2,437,065.09 2,437,065.09
Co., Ltd.
Accounts payable Henan Shengshi Xinxing Gree Trade Co., Ltd. 249,988.68 249,988.68
DunAn (Tianjin) Energy Saving System Co., Ltd.
Accounts payable 4,716.98
and its holding companies
Lanzhou Guangtong New Energy Automobile
Accounts payable 17,001,014.00
Co., Ltd.
Wuhu Green Renewable Resources Recycling
Accounts payable 3,789,547.79
Co., Ltd.
Other payables Henan Huizhong Yifeng E-commerce Co., Ltd. 100,000.00
Other payables Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. 21,617.37 21,617.37
Shanghai Highly (Group) Co., Ltd. and its
Other payables 14,200.00 12,200.00
holding subsidiaries
Zhejiang Tongcheng Gree Electric Appliances
Other payables 204.24 204.24
Co., Ltd. and its holding companies
Other payables Shandong Jierui Logistics Co., Ltd. 0.26 0.26
Other payables Henan Yuze Finance Leasing Co., Ltd. 20,065,000.00
Contract liabilities Henan Shengshi Xinxing Gree Trade Co., Ltd. 566,925,018.21 589,585,262.00
Contract liabilities Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. 277,427,020.12 368,281,472.85
Contract liabilities Henan Huizhong Yifeng E-commerce Co., Ltd. 4,027,582.80 5,780,268.45
Shanghai Highly (Group) Co., Ltd. and its
Contract liabilities 1,071,224.64 416,534.37
holding subsidiaries
Contract liabilities Eocell Limited 42,382.22
Other current liabilities
Henan Shengshi Xinxing Gree Trade Co., Ltd. 73,700,252.37 76,646,084.07
value-added tax
Other current liabilities
Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. 36,065,512.62 47,876,591.48
value-added tax
Other current liabilities
Henan Huizhong Yifeng E-commerce Co., Ltd. 523,585.76 751,496.78
value-added tax
Other current liabilities Shanghai Highly (Group) Co., Ltd. and its
139,259.20 54,149.47
value-added tax holding subsidiaries
Long-term payables Henan Yuze Finance Leasing Co., Ltd. 18,027,707.93 16,053,322.20
Sichuan Jinshi Leasing Co., Ltd. and its holding
Long-term payables 7,515,470.87 83,990,713.19
companies
Non-current liabilities due Sichuan Jinshi Leasing Co., Ltd. and its holding
75,632,127.95 129,789,372.21
within one year companies
Non-current liabilities due
Henan Yuze Finance Leasing Co., Ltd. 25,690,210.83 34,595,617.06
within one year
Total 1,526,767,822.00 1,590,988,786.75
Commitment of affiliated parties
None.
XII. Share-based payment
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
The overall situation of share-based payment
Item Content
On February 3, 2023, the Company's special securities
account for repurchase transferred 77,163,880 shares to the
special account of "Gree Electric Appliances, Inc. of
Total amount of equity instruments granted this year
Zhuhai employee stock ownership plan phase II" through
non-trading transfer. The total amount of equity
instruments is RMB1,569,513,319.20.
According to the Gree Electric Appliances, Inc. of Zhuhai
Employee Stock Ownership Plan Phase I (Draft) (Revised
Draft), the Audit Report of ZHS ZI (2023) No. 0500065
issued by Union Power Certified Public Accountants
(Special General Partnership), and the Company's relevant
equity distribution, the company-level performance
Total amount of equity instruments exercised this year
evaluation indicators of the Company's employee stock
ownership plan phase I have been achieved, and the two
phases of attributable stock rights can be vested and
distributed. The total amount of equity instruments in the
employee stock ownership plan phase I is
RMB555,550,331.27.
Total amount of various equity instruments that have
None
expired this year
The exercise price range and remaining contract term of
RMB14.36/share; half a year.
shares issued to the public at the end of the period
No shares issued to the public or other equity instruments at the end of the period.
Equity settled share-based payments
Item Content
Method for determining the fair
The Company determines the fair value of the employee stock ownership plan by
value of equity instruments on
deducting the grant price from the market price on the grant date.
the grant date
By assessing the company's performance and individual performance per year, the
Company takes the number of equity instruments held by incentive targets achieving
The basis for determining the the assessment goals as the basis. On each balance sheet date during the vesting period,
number of exercisable equity the Company makes the best estimate of subsequent information such as the latest
instruments change in number of vesting employees to correct the estimated number of vested
equity instruments. On the vesting date, the final estimated number of exercisable
equity instruments is consistent with their actual number.
Reasons for significant
differences between estimates
None
in the current year and the
previous period
Accumulated amount of equity
settled share-based payments 1,257,651,176.82
recognized in capital reserves
Total expenses recognized for
equity settled share-based 1,413,200,011.24
payments this period
Cash settled share-based payments
None.
Amendment and termination of share-based payment
None.
XIII. Commitments and contingencies
Important commitments
Page 294 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
None.
Contingencies
(1) In accordance with the Equity Transfer Agreement entered into between Zhejiang DunAn Energy
Saving Technology Co., Ltd. (hereinafter referred to as "Zhejiang Energy Saving"), a holding subsidiary of
the Company, and Shuifa Energy Group Co., Ltd. (hereinafter referred to as "Shuifa Energy") on
November 21, 2019, the transfer of other debts or payment obligations (hereinafter referred to as
"contingent liabilities") of the target company DunAn (Tianjin) Energy Saving System Co., Ltd.
(hereinafter referred to as "Tianjin Energy Saving") before the audit base date (May 31, 2019), including
but not limited to contingent debts, and debts or liabilities arising after the base date due to the fault of
Zhejiang Energy Saving before the base date, shall be borne by Zhejiang Energy Saving. If the above debts
are borne by Tianjin Energy Saving in advance or Tianjin Energy Saving is punished as a result, Tianjin
Energy Saving has the right to recover from Zhejiang Energy Saving. If Shuifa Energy has money payable
to Zhejiang Energy Saving, Zhejiang Energy Saving agrees that Shuifa Energy will directly deduct the
compensation to Tianjin Energy Saving. Tianjin Energy Saving has the right to continue to recover from
the Company for the insufficient part. The aforementioned responsibilities of Zhejiang Energy Saving can
be directly deducted from the equity transaction price payable by Shuifa Energy or the dividends of
Zhejiang Energy Saving in Tianjin Energy Saving, and the shortfall will be compensated by Zhejiang
Energy Saving.
(2) The Company provides guarantees for mortgage loans for homebuyers in accordance with industry
practices, mainly in the form of phased guarantees. The guarantee period starts from the effective date of
the guarantee contract and ends on the date when the real estate certificate and mortgage registration
procedures for the products purchased by the customer are completed and delivered to the bank for
management. As of December 31, 2023, the outstanding guarantee amount is RMB2,058.292 million.
Others
None.
XIV. Matters after the balance sheet date
Important non-adjustment matters
None.
Distribution of profits
Under the resolution at the 18th meeting of the 12th session of the Board of Directors, the Company's profit
distribution plan for 2023 is as follows: Since the total shares entitled to profit distribution as of April 29,
2024, totaling 5,521,943,646 shares (share capital of 5,631,405,741 shares less 109,462,095 shares held in
the Company's repo account), is proposed as the base temporarily, the Company plans to distribute a cash
dividend of RMB23.80 (tax inclusive) per 10 shares to all shareholders, totaling RMB13,142,225,877.48.
This distribution plan still requires approval of the General Meeting of Shareholders.
Page 295 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Sales return
No important sales return occurred after the balance sheet date.
Divided as held for sale after the balance sheet date
None.
Other important non-adjustment matters after the balance sheet date
None.
XV. Other important matters
Correction of accounting errors in the previous period
None.
Important debt restructuring
None.
Asset replacement
(1) Exchange of non-monetary assets
None.
(2) Replacement of other assets
None.
Annuity plan
None.
Discontinued operation
Profit from
discontinued
Income tax operation
Item Revenue Expense Total profits Net Profits
expenses attributable to
owners of
parent company
Gree (USA) Sales Co.,
189,082.78 -189,082.78 5,638.96 -194,721.74 -194,721.74
Ltd.
(Continued)
Net cash flows from Net cash flows from Net cash flows from
Item
operating activities investment activities financing activities
Gree (USA) Sales Co., Ltd. -3,635,051.24
Other important matters affecting investor decisions
(1) Company guarantee
As of December 31, 2023, the total amount of Gree Altairnano guarantees is RMB2,994,536,614.53, of
which the total amount of guarantees provided by Gree Altairnano subsidiaries for short-term loans, long-
term loans, accounts payable (E Xintong), and long-term payables is RMB1,010,834,713.96; the total
Page 296 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
amount of guarantees provided to companies outside the consolidated statements is RMB1,983,701,900.57
(the stock guarantee provided by Gree Altairnano for the financial leasing and car purchase business of its
bus company and other customers).
(2) Financial support
1) Gree Altairnano provided financial loans of RMB94,200, RMB681,400, RMB23,019,800, and
RMB17,200 respectively to its original shareholder and its affiliated parties Wei Yincang, Sun Guohua,
Zhuhai Yinlong Investment Holding Group Co., Ltd. As of the date of this Annual Report, the aforesaid
loans have not been recovered.
2) On November 21, 2019, Zhejiang Energy Saving signed an equity transfer agreement with Shuifa
Energy. Zhejiang Energy Saving agreed to transfer its 65% equity and related rights of creditor of Tianjin
Energy Saving (and its subsidiaries and branches) to Shuifa Energy (hereinafter referred to as "Tianjin
Energy Saving Equity Transfer"), with an equity transfer price of RMB390 million, a payment for rights of
creditor transfer of RMB390 million, totaling RMB780 million; after the completion of the Tianjin Energy
Saving Equity Transfer, the shareholding ratio of Zhejiang Energy Saving in Tianjin Energy Saving
decreased from 100% to 35%, and Tianjin Energy Saving became a joint stock company of the Company.
Zhejiang Energy Saving's credit of RMB600 million to Tianjin Energy Saving thereby formed passive
financial support. Before Shuifa Energy paid for the rights of creditor transfer, Zhejiang Energy Saving had
a credit of RMB600 million to Tianjin Energy Saving, forming financial support of RMB600 million; After
Shuifa Energy paid RMB390 million for the rights of creditor transfer under the Equity Transfer Agreement,
Zhejiang Energy Saving had a remaining credit of RMB210 million to Tianjin Energy Saving, forming
financial support of RMB210 million.
XVI. Notes to main items of financial statements of the parent company
Accounts receivable
(1) Accounts receivable disclosed by account age
Account age Ending Balance Beginning balance
Within 1 year 5,093,333,514.94 2,801,488,718.60
12 years 99,365,598.67 122,421,456.35
23 years 72,800,967.64 19,975,735.77
Over 3 years 29,800,846.44 20,339,910.40
Subtotal 5,295,300,927.69 2,964,225,821.12
Less: Bad debt reserves 289,922,749.83 152,602,498.35
Total 5,005,378,177.86 2,811,623,322.77
(2) Bad debt accrual method by categories
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Accounts receivable with bad
debt reserves accrued by 4,715,115.32 0.09 4,715,115.32 100.00
individual item
Accounts receivable with bad
debt reserves accrued by 5,290,585,812.37 99.91 285,207,634.51 5.39 5,005,378,177.86
portfolios
Including: Account age
4,274,218,293.99 80.72 285,207,634.51 6.67 3,989,010,659.48
portfolio
Free-risk portfolios 1,016,367,518.38 19.19 1,016,367,518.38
Total 5,295,300,927.69 100.00 289,922,749.83 5.48 5,005,378,177.86
(Continued)
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proportion Credit loss
Amount Amount
(%) rate (%)
Accounts receivable with bad
debt reserves accrued by 4,715,115.32 0.16 4,715,115.32 100.00
individual item
Accounts receivable with bad
debt reserves accrued by 2,959,510,705.80 99.84 147,887,383.03 5.00 2,811,623,322.77
portfolios
Including: Account age
2,113,830,562.80 71.31 147,887,383.03 7.00 1,965,943,179.77
portfolio
Free-risk portfolios 845,680,143.00 28.53 845,680,143.00
Total 2,964,225,821.12 100.00 152,602,498.35 5.15 2,811,623,322.77
1) Accounts receivable with bad debt reserves accrued by individual items:
Ending Balance
Company Name
Credit loss
Book balance Bad debt reserves Reason for accruing
rate (%)
It is expected to be
Unit 1 4,715,115.32 4,715,115.32 100.00 difficult to be
recovered
Total 4,715,115.32 4,715,115.32 100.00
(Continued)
Beginning balance
Company Name
Credit loss
Book balance Bad debt reserves Reason for accruing
rate (%)
It is expected to be
Unit 1 4,715,115.32 4,715,115.32 100.00 difficult to be
recovered
Total 4,715,115.32 4,715,115.32 100.00
2) In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio:
Account age Book balance Bad debt reserves Credit loss rate (%)
Within 1 year 4,076,965,996.56 203,848,299.84 5.00
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Account age Book balance Bad debt reserves Credit loss rate (%)
12 years 99,365,598.67 19,873,119.73 20.00
23 years 72,800,967.64 36,400,483.82 50.00
Over 3 years 25,085,731.12 25,085,731.12 100.00
Total 4,274,218,293.99 285,207,634.51 6.67
(3) Bad debt reserves accrued, recovered or reversed in the current period
Accrual/recovery/transferrin
Category Beginning balance Ending Balance
g back in the current period
Accrual by individual item 4,715,115.32 4,715,115.32
Account age portfolio 147,887,383.03 137,320,251.48 285,207,634.51
Total 152,602,498.35 137,320,251.48 289,922,749.83
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Accounts receivable actually written off in the current period
None.
(5) Accounts receivable of the top 5 debtors in terms of ending balance collected by debtors
The total amount of accounts receivable and contract assets of the top 5 debtors in terms of ending balance
collected by debtors is RMB2,721,408,204.31, accounting for 51.39% of the ending balance of accounts
receivable and contract assets, and the amount of bad debt provision is RMB90,515,487.65.
Other receivables
Item Ending Balance Beginning balance
Other receivables [Note 1] 4,860,219,830.31 3,602,220,649.55
Total 4,860,219,830.31 3,602,220,649.55
[Note 1] Other receivables in the table above refer to other receivables after deduction of interest
receivables and dividends receivable;
[Note 2] The Company has no beginning and ending balance of interests receivable and dividends
receivable.
(6) Other receivables
1) Disclosure by account age
Account age Ending Balance Beginning balance
Within 1 year 4,863,865,345.66 3,593,232,529.73
12 years 6,358,344.91 8,697,524.27
23 years 1,650,917.24 8,176,823.31
Over 3 years 4,910,948.86 1,389,811.30
Subtotal 4,876,785,556.67 3,611,496,688.61
Less: Bad debt reserves 16,565,726.36 9,276,039.06
Page 299 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Account age Ending Balance Beginning balance
Total 4,860,219,830.31 3,602,220,649.55
2) Classification by nature of payment
Nature of payment Ending book balance Beginning book balance
Intercourse and free-risk funds 4,739,303,404.07 3,611,496,688.61
Asset transfer payments 137,482,152.60
Subtotal 4,876,785,556.67 3,611,496,688.61
Less: Bad debt reserves 16,565,726.36 9,276,039.06
Total 4,860,219,830.31 3,602,220,649.55
3) Disclosure by classification of bad debt reserves accrual methods
Ending Balance
Category Book balance Bad debt reserves
Book Value
Proportio Credit loss
Amount Amount
n (%) rate (%)
Other accounts receivable with
bad debt reserves accrued by
individual item
Other accounts receivable with
bad debt reserves accrued by 4,876,785,556.67 100.00 16,565,726.36 0.34 4,860,219,830.31
portfolios
Including: Account age
204,073,208.93 4.18 16,565,726.36 8.12 187,507,482.57
portfolio
Free-risk portfolios 4,672,712,347.74 95.82 4,672,712,347.74
Total 4,876,785,556.67 100.00 16,565,726.36 0.34 4,860,219,830.31
(Continued)
Beginning balance
Category Book balance Bad debt reserves
Book Value
Proporti Credit loss
Amount Amount
on (%) rate (%)
Other accounts receivable with
bad debt reserves accrued by
individual item
Other accounts receivable with
bad debt reserves accrued by 3,611,496,688.61 100.00 9,276,039.06 0.26 3,602,220,649.55
portfolios
Including: Account age
59,430,383.80 1.65 9,276,039.06 15.61 50,154,344.74
portfolio
Free-risk portfolios 3,552,066,304.81 98.35 3,552,066,304.81
Total 3,611,496,688.61 100.00 9,276,039.06 0.26 3,602,220,649.55
In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio:
Ending Balance
Account age
Book balance Bad debt reserves Credit loss rate (%)
Within 1 year 191,152,997.92 9,557,649.90 5.00
12 years 6,358,344.91 1,271,668.98 20.00
Page 300 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Ending Balance
Account age
Book balance Bad debt reserves Credit loss rate (%)
23 years 1,650,917.24 825,458.62 50.00
Over 3 years 4,910,948.86 4,910,948.86 100.00
Total 204,073,208.93 16,565,726.36 8.12
4) Accrual of bad debt reserves
Phase I Phase II Phase III
Expected credit loss for Expected credit loss for
Bad debt reserves Expected credit Total
the entire duration (no the entire duration
losses in the next 12
credit impairment (credit impairment
months
occurred) occurred)
Beginning balance 2,058,311.25 7,217,727.81 9,276,039.06
Accrual in the current
7,499,338.65 7,499,338.65
period
Transferring back in
209,651.35 209,651.35
the current period
Ending Balance 9,557,649.90 7,008,076.46 16,565,726.36
5) Other receivables that were actually written off in the current period
None.
6) Other receivables of top 5 debtors in terms of ending balance collected by debtors
The total amount of other receivables of top 5 debtors in terms of ending balance collected by debtors is
RMB4,751,126,676.83, accounting for 97.42% of the total balance of ending balance of other receivables,
and the amount of bad debt provision is RMB6,874,107.63.
7) Other receivables due to centralized fund management
None.
Page 301 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Long-term equity investments
Ending Balance Beginning balance
Item
Book balance Impairment provision Book Value Book balance Impairment provision Book Value
Investments to subsidiaries 26,797,640,354.59 26,797,640,354.59 25,037,260,734.86 25,037,260,734.86
Investments to associates and
2,949,788,729.34 1,940,009.35 2,947,848,719.99 4,257,128,029.39 1,940,009.35 4,255,188,020.04
joint ventures
Total 29,747,429,083.93 1,940,009.35 29,745,489,074.58 29,294,388,764.25 1,940,009.35 29,292,448,754.90
(1) Investments to subsidiaries
Beginning balance Increase/Decrease in the Current Period Ending Balance
Investee Accrual of Impairme
Impairment Additional Decreased
Original value impairment Others Original value nt
provision Investment Investment
reserves provision
Gree (Chongqing) Electric
226,229,869.60 5,334,458.48 231,564,328.08
Appliances Co., Ltd.
Zhuhai Landa Compressor Co., Ltd. 980,129,791.43 14,845,009.28 994,974,800.71
Zhuhai Gree Electric Enterprises
1,688,925,419.46 2,224,720.67 1,691,150,140.13
Ltd.
Zhuhai Gree Xinyuan Electronics
157,587,082.83 1,656,340.92 159,243,423.75
Co., Ltd.
Zhuhai Kaibang Motor
88,488,390.23 4,535,602.87 93,023,993.10
Manufacturing Co., Ltd.
Gree (Hefei) Electric Appliances
508,118,662.16 3,378,930.69 511,497,592.85
Co., Ltd.
Gree (Zhongshan) Small Home
32,886,680.43 369,944.73 33,256,625.16
Appliances Co., Ltd.
Zhuhai Gree Group Finance
4,405,435,403.58 34,675,548.68 536,699.68 4,440,647,651.94
Company Limited
Gree Electric Appliances (Brazil)
660,779,779.97 949,253.68 661,729,033.65
Co., Ltd.
Hong Kong Gree Electric
472,879.08 472,879.08
Appliances Sales Limited
Shanghai Gree Air Conditioners
1,800,000.00 1,800,000.00
Sales Co., Ltd.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Investee Accrual of Impairme
Impairment Additional Decreased
Original value impairment Others Original value nt
provision Investment Investment
reserves provision
Zhuhai Gree Daikin Precision Mold
202,027,721.67 1,049,462.52 203,077,184.19
Co., Ltd.
Zhuhai Gree Dakin Device Co.,
283,117,574.47 489,431.25 283,607,005.72
Ltd.
Green Refrigeration Equipment
Engineering Research Center of 676,040,000.00 676,040,000.00
Zhuhai Gree Group Co., Ltd.
Gree (Zhengzhou) Electric
722,900,444.95 4,496,297.49 727,396,742.44
Appliances Co., Ltd.
Gree (Wuhan) Electric Appliances
602,507,444.72 3,450,613.97 605,958,058.69
Co., Ltd.
Zhengzhou Gree Green Renewable
5,008,960.53 45,000,000.00 3,968.84 50,012,929.37
Resources Co., Ltd.
Hunan Green Renewable Resources
5,089,645.23 45,000,000.00 32,628.75 50,122,273.98
Co., Ltd.
Wuhu Green Renewable Resources
2,083,410.43 48,000,000.00 213,637.59 50,297,048.02
Co., Ltd.
Gree (Shijiazhuang) Small Home
11,393,405.86 988,945.61 12,382,351.47
Appliances Co., Ltd.
Gree (Wuhu) Electric Appliances
22,956,278.38 1,999,023.88 24,955,302.26
Co., Ltd.
Shijiazhuang Green Renewable
5,008,960.53 45,000,000.00 3,968.84 50,012,929.37
Resources Co., Ltd.
Gree (Shijiazhuang) Electric
102,277,724.26 4,728,594.45 107,006,318.71
Appliances Co., Ltd.
Tianjin Green Renewable
5,000,000.00 45,000,000.00 50,000,000.00
Resources Utilization Co., Ltd.
Zhuhai Gree HVAC and
100,000,000.00 100,000,000.00
Refrigeration Equipment Co., Ltd.
Zhuhai Gree TOSOT Home
30,000,000.00 30,000,000.00
Appliances Co., Ltd.
Zhuhai Ligao Precision
30,365,623.06 30,365,623.06
Manufacturing Co., Ltd.
Zhuhai EWPE Information
100,000,000.00 100,000,000.00
Technology Inc.
Gree (Changsha) HVAC Equipment
52,571,759.08 3,535,799.68 56,107,558.76
Co., Ltd.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Investee Accrual of Impairme
Impairment Additional Decreased
Original value impairment Others Original value nt
provision Investment Investment
reserves provision
Gree TOSOT (Suqian) Home
141,167,674.13 884,952.12 142,052,626.25
Appliances Co., Ltd.
Wuhu Gree Precision
30,471,646.63 630,988.89 31,102,635.52
Manufacturing Co., Ltd.
Zhuhai Gree Intelligent Equipment
105,056,894.40 5,894,478.90 110,951,373.30
Co., Ltd.
Zhuhai Hengqin Gree Commercial
100,000,000.00 375,230.63 100,375,230.63
Factoring Co., Ltd.
Zhuhai Gree Precision Mold Co.,
109,346,308.91 15,129,558.73 124,475,867.64
Ltd.
Gree HVAC and Refrigeration
100,000,000.00 410,577.46 100,410,577.46
Equipment (Wuhan) Co., Ltd.
Zhuhai Gree Intelligent Equipment
50,026,881.58 591,066.84 50,617,948.42
Technology Institute Co., Ltd.
Gree New Material Co., Ltd. 30,773,083.23 2,488,168.72 33,261,251.95
Gree Precision Mould (Wuhan)
100,570,444.23 1,143,147.20 101,713,591.43
Co., Ltd.
Zhuhai Gree Energy Environment
202,771,064.85 1,069,037.59 203,840,102.44
Technology Co., Ltd.
Gree (Hangzhou) Electric
550,772,403.79 494,235.62 551,266,639.41
Appliances Co., Ltd.
Gree Information Technology Co.,
510,000.00 510,000.00
Ltd. of Zhuhai
Gree (Wu'an) Precision Equipment
210,319,941.16 268,496.80 210,588,437.96
Manufacturing Co., Ltd.
Zhuhai Gree Transportation Co.,
50,553,930.01 954,014.93 51,507,944.94
Ltd.
Gree (Nanjing) Electric Appliances
700,681,927.25 890,716.00 701,572,643.25
Co., Ltd.
Gree (Luoyang) Electric Appliances
51,017,511.37 892,725.86 51,910,237.23
Co., Ltd..
Zhuhai Edgeless Integrated Circuit
50,000,000.00 50,000,000.00
Co., Ltd.
Zhuhai Lianyun Technology Co.,
40,300,301.54 10,000,000.00 1,691,787.92 51,992,089.46
Ltd.
Gree (Chengdu) Electric
400,454,836.65 100,998.30 400,555,834.95
Appliances Co., Ltd.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Investee Accrual of Impairme
Impairment Additional Decreased
Original value impairment Others Original value nt
provision Investment Investment
reserves provision
Gree Material Supply Co., Ltd. of
150,000,000.00 150,000,000.00
Zhuhai
Zhuhai Gree Green Control
270,000,000.00 280,000,000.00 550,000,000.00
Technology Co., Ltd.
Hefei Kinghome Electrical Co.,
1,248,579,623.96 1,486,672.11 1,250,066,296.07
Ltd.
Zhuhai Gree Mechanical and
149,843,449.82 3,245,579.86 153,089,029.68
Electrical Engineering Co., Ltd.
Gree Electric Appliances (Luoyang)
50,000,000.00 50,000,000.00
Washing Machine Co., Ltd.
Guochuang Energy Internet
Innovation Center (Guangdong) 75,000,000.00 75,000,000.00
Co., Ltd.
Gree Precision Mould (Anji) Co.,
113,200,000.00 3,000,000.00 116,200,000.00
Ltd.
Zhuhai Gree Green Renewable
51,527,406.10 50,000,000.00 263,911.93 101,791,318.03
Resources Co., Ltd.
Gree E-commerce Co., Ltd. 100,329,005.60 1,490,145.35 101,819,150.95
Zhuhai Gejian Health Medical
20,008,960.53 15,875.36 20,024,835.89
Technology Co., Ltd.
Zhuhai Gree Electrical Intelligent
1,001,034,984.79 2,386,589.80 1,003,421,574.59
Manufacturing Co., Ltd.
Gree Chengdu Xinhui Medical
75,000,000.00 1,303,850.65 76,303,850.65
Equipment Co., Ltd.
SL Group Co., Ltd. 230,223,945.05 230,223,945.05
Gree (Ganzhou) Electric
100,167,596.22 563,562.15 100,731,158.37
Appliances Co., Ltd.
Gree Electric Appliances (Linyi)
367,949,060.36 36,000,000.00 497,867.79 404,446,928.15
Co., Ltd.
Gree (Zhuhai Hengqin)
1,000,000,000.00 1,000,000,000.00
Development Co., Ltd.
Changsha Kinghome Electric
50,000,000.00 424,173.75 50,424,173.75
Appliances Co., Ltd
Gree Altairnano New Energy Inc. 1,828,403,518.47 1,015,328,446.32 654,161.12 2,844,386,125.91
Page 305 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Investee Accrual of Impairme
Impairment Additional Decreased
Original value impairment Others Original value nt
provision Investment Investment
reserves provision
Zhuhai Mingruida Supply Chain
35,000,000.00 35,000,000.00
Technology Co., Ltd.
Zhejiang DunAn Artificial
3,236,995,422.29 3,236,995,422.29
Environment Co., Ltd.
Zhuhai Gree Electronic
100,000,000.00 1,533,335.29 101,533,335.29
Components Co., Ltd. VII.
Zhuhai Gree Digital Technology
50,000,000.00 1,142,006.25 51,142,006.25
Co., Ltd. VIII. IX.
Zhuhai Gree Prefabricated
Vegetable Equipment Technology 30,000,000.00 30,000,000.00
Development Co., Ltd.
Total 25,037,260,734.86 1,687,003,995.00 30,365,623.06 103,741,247.79 26,797,640,354.59
(2) [Note] Changes in Others are the expenses allocated by the parent company for the subsidiaries, involving the employee equity incentive employee stock
ownership plan.
(3) Investments to associates and joint ventures
Beginning balance Increase/Decrease in the Current Period Ending Balance
Profits and Declared
Adjustment of Other
Investee Additional losses on distribution of
Impairment other chang Othe Impairment
Original value investment/disin investment cash Original value
provision comprehensive es in rs provision
vestment recognized by dividends or
income equity
equity method profits
Associated
enterprise
Gree (Vietnam)
Electric Appliances, 1,940,009.35 1,940,009.35 1,940,009.35 1,940,009.35
Inc.
Outlook All Media
35,478,374.26 509,236.20 35,987,610.46
Co., Ltd.
Wuhan Digital
Design and
Manufacturing 15,239,073.92 301,716.52 150,000.00 15,390,790.44
Innovation Center
Co., Ltd.
Page 306 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Beginning balance Increase/Decrease in the Current Period Ending Balance
Profits and Declared
Adjustment of Other
Investee Additional losses on distribution of
Impairment other chang Othe Impairment
Original value investment/disin investment cash Original value
provision comprehensive es in rs provision
vestment recognized by dividends or
income equity
equity method profits
Coresing
Semiconductor
20,071,663.90 1,219,923.05 21,291,586.95
Technology Co.,
Ltd.
Zhuhai Ronglin
Equity Investment
2,821,794,849.
Partnership 4,131,807,804.94 -279,197,890.11 -10,162,802.37 -1,020,652,263.34
12
(Limited
Partnership)
Henan Yuze
Finance Leasing 52,591,103.02 1,627,073.67 1,642,181.50 52,575,995.19
Co., Ltd.
Zhuhai Jiayao Food
Technology Co., 989,000.00 -181,112.17 807,887.83
Ltd.
2,949,788,729.
Total 4,257,128,029.39 1,940,009.35 -278,208,890.11 -6,685,965.10 -1,020,652,263.34 1,792,181.50 1,940,009.35
34
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Operating revenues and costs
Amount for the current period Amount incurred for the previous period
Item
Revenue Cost Revenue Cost
Main
129,423,899,406.84 83,109,940,207.26 114,824,763,292.63 79,648,915,725.67
business
Other
5,229,739,158.04 4,854,534,375.52 4,965,687,298.82 4,544,120,744.77
business
Total 134,653,638,564.88 87,964,474,582.78 119,790,450,591.45 84,193,036,470.44
Income from investment
Amount for the current Amount incurred for the
Item
period previous period
Dividend shares recognized for long-term equity investment
3,818,312,481.64 3,932,671,473.40
measured in the cost method
Investment income obtained from trading financial assets 280,583,705.07 12,657,637.64
Investment income from derivative financial instruments 135,154,303.55 9,416,978.74
Long-term equity investment income measured by the equity
-6,685,965.10 -13,564,461.54
method
Others 50,600,218.28 37,642,998.26
Total 4,277,964,743.44 3,978,824,626.50
XVII. Supplementary
Detailed statement of non-recurring profits and losses in this period
Item Amount Description
For details, please
Profits and losses from disposal of non-current assets (including
324,413,866.77 refer to this Note V.
the write-off of accrued asset impairment reserves)
67, 68, and 69
Governmental subsidies included in the current profits and losses
For details, please
(but excluding the governmental subsidies closely relating to the 784,275,516.36
normal business operations of the Company, conforming to refer to this Note V.
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2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Item Amount Description
national policies and regulations, and enjoyed by a fixed quota or a 62 and 68
fixed amount in accordance with a certain standard)
Profits and losses from changes in fair value arising from financial
assets and financial liabilities held by non-financial enterprises,
and profits and losses from disposal of financial assets and 553,697,207.25
financial liabilities, except for the effective hedging business
related to the Company's normal business operations
Reversal of impairment reserves for the receivables under
72,395,388.85
independent impairment test
For details, please
Non-operating revenues and expenditures other than the above
-21,226,697.92 refer to this Note V.
items
68 and 69
Other profit and loss items conforming to the definition of non-
40,553,390.36
recurring profits and losses
Subtotal 1,754,108,671.67
Less: Amount affecting income tax 301,917,937.60
Amount affecting minority equity (after tax) 264,247.68
Total 1,451,926,486.39
[Note] The number "+" of the non-recurring profit and loss item means income, and "" means loss or expenditure.
The recognition of the Company's non-recurring profit and loss items is implemented in accordance with the provisions of the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit and Loss (Revised in 2023) (CSRC Announcement
[2023] No. 65).
ROE and earnings per share
Earnings per share
Weighted average
Profits for the report period
return on equity (%) Basic earnings per Diluted earnings per
share share
Net profit attributable to common shareholders of
26.53 5.22 5.22
the Company
Net profit deducting non-recurring profits and
25.20 4.96 4.96
losses attributable to common shareholders
Page 309 of 310
2023 Annual Report of Gree Electric Appliances, Inc. of Zhuhai
Gree Electric Appliances, Inc. of Zhuhai
April 30, 2024
Page 310 of 310
