GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
Annual Report 2020
April 2021
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section I Important Notice, Table of Contents and Paraphrase
The Board of Directors, Board of Supervisors, all directors, supervisors and Senior
Management Personnel of the Company hereby guarantee that the contents are
authentic, accurate and complete, and there are no false records, misleading
representations or material omissions in the Annual Report, and shall take all the joint
and several legal responsibilities.
Dong Mingzhu, the Company's responsible person, Liao Jianxiong, responsible person
in charge of accounting work and Liu Yanzi, in-charge person of accounting institution
(accounting superintendent) hereby declare and warrant that the financial report in
the Report is authentic, accurate and complete.
All the directors attended the meeting of the Board of Directors in respect of
deliberation of the Report.
The forward-looking statements such as future plans and development strategies in the
Report do not constitute a substantive commitment of the Company to investors.
Investors and relevant persons should therefore be aware of risk factors attendant in
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 number of 5,832,851,217
shares of the Company enjoying profit distribution rights as of 28 April, 2021 (the total
stock capital of 6,015,730,878 shares excluding the 182,879,661 shares held in the
repurchase account of the Company), the Company plans to distribute all shareholders
a cash dividend of RMB 30 (tax included) per 10 shares, but does not plan to give any
bonus share or use any public reserve funds for capitalization.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Table of Contents
Section I Important Notice, Table of Contents and Paraphrase ................................................................................... 1
Section II Company Profile and Main Financial Indices .............................................................................................. 4
Section III Corporate Business Overview ....................................................................................................................... 9
Section IV Discussion and Analysis of Business Operation ......................................................................................... 17
Section V Important Events ........................................................................................................................................... 53
Section VI Changes in Stock Capital & Information of Shareholders ....................................................................... 83
Section VII Related Information of Preferred Stock ................................................................................................... 91
Section VIII Related Information of Convertible Corporate Bonds .......................................................................... 92
Section IX Directors, Supervisors, Senior Management Personnel and Employees ................................................. 93
Section X Corporate Governance ................................................................................................................................ 109
Section XI Related Information of Corporate Bonds .................................................................................................114
Section XII Financial Report ........................................................................................................................................115
Section XIII References ................................................................................................................................................ 274
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Paraphrase
Items Means Contents
Company, the Company, the enterprise, GREE
Means GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
ELECTRIC APPLIANCES or GREE
GREE GROUP Means Zhuhai Gree Group Co., Ltd.
Zhuhai Mingjun Means Zhuhai Mingjun Investment Partnership (Limited Partnership)
Finance Company Means Zhuhai Gree Group Finance Company Limited
Jinghai Internet Means Jinghai Internet Technology Development Co., Ltd.
Yinlong Means Zhuhai Yinlong New Energy Co., Ltd.
CSRC Means China Securities Regulatory Commission
Report Period Means 1 January, 2020 to 31 December, 2020
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section II Company Profile and Main Financial Indices
I. Company information
Stock Abbreviation GREE ELECTRIC APPLIANCES Stock Code 000651
Stock Exchange Shenzhen Stock Exchange
Name in Chinese 珠海格力电器股份有限公司
Name Abbreviation in Chinese 格力电器
Name in Foreign Language (if
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
any)
Name Abbreviation in Foreign
GREE
Language (if any)
Legal Representative Dong Mingzhu
Registered Address Jinji West Road, Qianshan, Zhuhai City, Guangdong Province
Post Code of Registered
519070
Address
Office Address Jinji West Road, Qianshan, Zhuhai City, Guangdong Province
Post Code of Office Address 519070
Website http://www.gree.com.cn
Email gree@gree.com.cn
II. Contacts and contact information
Board Secretary Securities Affairs Representative
Name Deng Xiaobo Zhang Zhouhu, Yan Zhangxiang
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
Media designated by the Company for information China Securities Journal, Securities Times, Shanghai Securities News and
disclosure Securities Daily
Website specified by CSRC for release of the Annual http://www.cninfo.com.cn
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Report
Place where the Annual Report is available for
Investment Management Department of the Company
inspection
IV. Alteration of registration
Organization code 91440400192548256N
Changes (if any) in the main business since
No change
listing of the Company
On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer
Agreement. Gree Group planned to transfer 902,359,632 shares of the Company
with unlimited sales conditions held by Gree Group to Zhuhai Mingjun at a price
of RMB 46.17/share (accounting for 15% of the Company's total equity); On 13
December, 2019, the Zhuhai Municipal People's Government and the State-owned
Assets Supervision and Administration Commission of the State Council
Changes (if any) in the controlling
(SASAC) of Zhuhai City separately approved the share transfer.
shareholders
Gree Group obtained the Transfer Registration Confirmation issued by China
Securities Depository and Clearing Corporation Limited (CSDC) Shenzhen
Branch on 3 February, 2020. The share transfer registration procedures for the
transfer of this agreement have been completed, and the transfer date is 23
January, 2020. After the completion of the share transfer registration, the
Company has neither a controlling shareholder nor an actual controller.
V. Other related information
Accounting firm engaged by the Company
Name of the Accounting Firm Union Power Certified Public Accountants (Special General Partnership)
Office Address No. 169 Donghu Road, Wuchang District, Wuhan City
Names of Accountants as
Han Zhenping, Geng Ting
Signatories
Sponsor engaged by the Company to perform continuous supervision during the Report Period
√ Applicable □ Not applicable
Name of the recommended
Name of the sponsor Office address of the sponsor Continuous supervision period
representative
26F, CTS Tower, No.4011,
Huatai United Securities Co., From 26 July, 2019 to 25 July,
Shennan Boulevard, Futian Gu Chongxiang, Li Shijing
Ltd. 2020
District, Shenzhen
Financial adviser engaged by the Company to perform continuous supervision during the Report Period
□ Applicable √ Not applicable
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
VI. Main accounting data and financial indices
Whether the Company has retroactive adjustment or restatement of previous accounting data
□ Yes √ No
Unit: Yuan
Increase/Decrease
Item 2020 2019 over the previous 2018
year
Operating Revenue (Yuan) 168,199,204,404.53 198,153,027,540.35 -15.12% 198,123,177,056.84
Net profit attributable to shareholders of
22,175,108,137.32 24,696,641,368.84 -10.21% 26,202,787,681.42
listed Company (Yuan)
Net profit attributable to shareholders of
listed Company less non-recurring gains 20,285,816,036.00 24,171,511,911.32 -16.08% 25,580,865,501.38
and losses (Yuan)
Net cash flow generated from operating
19,238,637,309.16 27,893,714,093.59 -31.03% 26,940,791,542.98
activities (Yuan)
Basic earnings per share (Yuan per
3.71 4.11 -9.73% 4.36
Share)
Diluted earnings per share (Yuan per
3.71 4.11 -9.73% 4.36
Share)
Weighted average return on net assets 18.88% 25.72% -6.84% 33.36%
Increase/Decrease
Item At the end of 2020 At the end of 2019 over the previous At the end of 2018
year
Total asset (Yuan) 279,217,923,628.27 282,972,157,415.28 -1.33% 251,234,157,276.81
Net asset attributable to shareholders of
115,190,211,206.76 110,153,573,282.67 4.57% 91,327,095,069.10
listed Company (Yuan)
VII. Accounting data differences under domestic and foreign accounting standards
1. Differences in net profit and net assets in the financial report disclosed under international accounting
standards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial report disclosed under international accounting standards and that
disclosed under domestic accounting standards during the Report Period.
2. Differences in net profit and net assets in the financial report disclosed under overseas accounting
standards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
There was no difference in net profit and net assets in the financial report disclosed under overseas accounting standards and that
disclosed under domestic accounting standards during the Report Period.
VIII. Quarter-based main financial indicators
Unit: Yuan
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Operating incomes 20,395,535,183.42 49,106,787,186.52 56,387,073,628.99 42,309,808,405.60
Net profit attributable to
1,558,013,539.01 4,804,123,838.63 7,336,584,665.51 8,476,386,094.17
shareholders of listed company
Net profit attributable to
shareholders of listed companies
1,429,583,505.27 4,566,954,114.64 6,585,565,313.26 7,703,713,102.83
after deduction of non-recurring
profit and loss
Net cash flows from operating
-11,772,862,523.80 7,255,186,786.04 7,549,675,839.30 16,206,637,207.62
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
Item Amount in 2020 Amount in 2019 Amount in 2018 Description
Gains and losses from disposal of For details, see Note
non-current assets (including the provision -4,974,224.62 -9,293,929.38 -23,064,935.35 (V) 57, Note (V) 58,
for asset impairment write-off part) and Note (V) 59
Governmental subsidies recorded into the
current gains and losses (excluding the
For details, see Note
governmental subsidies closely relating to
1,346,168,393.38 1,215,852,371.66 671,678,104.47 (V) 52 and Note (V)
the business of the enterprise and enjoyed by
58
a fixed quota or a fixed amount in
accordance with the state policies)
Capital occupation fee collected from the
non-financial institution and recorded into 883,505.62 359,713.10 1,262,805.80
the current gains and losses
Net profits or losses of the subsidiaries in the
current period from the beginning of the
184,503.98
period to the combination date that are
generated by business combination involving
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
enterprises under common control
Gains and losses caused by fair value
changes from the holding of trading financial
assets, derivative financial assets, trading
financial liabilities and derivative financial
liabilities, and investment income obtained
from the disposal of trading financial assets, 877,450,950.74 1,449,722.86 151,222,484.83
derivative financial assets, trading financial
liabilities, derivative financial liabilities and
other debt investments, except for the
effective hedging business related to the
Company's normal business operations
Reversal of impairment provision for the
accounts receivable and contract assets for
2,320,229.26
which an independent impairment test is
conducted
For details, see Note
Non-operating incomes and expenditures
50,024,914.68 -530,486,147.03 32,323,207.44 (V) 58 and Note (V)
other than the above items
59
Other profit and loss items that conform to
17,915,425.64 997,770.17 6,119,851.77
the definition of non-recurring profit and loss
Less: Influence amount of income tax 386,974,457.37 147,189,032.83 170,139,883.37
Influence amount of minority equity (after
11,202,406.75 6,561,011.03 49,984,188.79
tax)
Total 1,889,292,101.32 525,129,457.52 621,922,180.04 --
Explanation should be given for non-recurring profit and loss items defined by the Company according to Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public -- Non-recurring Profit and
Loss and for non-recurring profit and loss items which are listed in Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public -- Non-recurring Profit and Loss and defined as recurring profit and loss items.
□ Applicable √ Not applicable
No non-recurring profit and loss items which are defined or listed in Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public -- Non-recurring Profit and Loss were defined by the Company as recurring profit
and loss items during the Report Period.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section III Corporate Business Overview
I. Major businesses engaged in during the Report Period
(I) Major businesses and position in industry
Gree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and has three
major brands: Gree, TOSOT and KINGHOME. Its products have been expanded to cover the two major fields of
household consumer goods and industrial equipment, including residential air conditioners, HVAC, refrigerators,
washing machines, water heaters, kitchen appliances, environmental appliances, communication products, smart
buildings, and smart household appliances in the consumption field; high-end equipment, precision moulds,
freezers and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting
equipment, basic materials, industrial energy storages, and renewable resources in the industrial field Gree
products are sold in more than 160 countries and regions, providing more than 400 million users with satisfactory
products and services, for the purpose of creating a better life.
In 2020, Gree was again listed in the Fortune Global 500 and ranked the 436th by virtue of its outstanding
comprehensive strength; listed in the Forbes Global 2000 – World's Best Employers and ranked the 246th, rising
14 places from 2019.
According to the data released by HVAC Information, Gree took the lead in the central air conditioner market
relying on a market share of 13.9% and has maintained the position for nine consecutive years in the Chinese
market; according to the 2020 domestic sales data of air conditioner brands published by ChinaIOL.com, Gree air
conditioners ranked the first in the field with a share of 36.9%, taking the lead for 26 years.
Gree takes "To be Global Leading Air Conditioning Enterprise" as its corporate vision, and "carrying forward the
industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, and achieving
‘Made in China, Loved by the World’" as its mission. By adhering to the management philosophy that "innovation
never stops", Gree focuses on independent innovation and development, in order to grasp the pulse of the times,
build a world brand and create a development model with Chinese characteristics for Chinese manufacturing
enterprises.
(II) Overview of industry development
1. Field of household appliances
According to the Report on China's Household Appliance Market in 2020 issued by China Center for Information
Industry Development, the household appliance market of China first underwent a depression and then recovered
in 2020. The retail sales volume of household appliances in the whole year was RMB 833.3 billion, a decrease of
6.5% year on year, and the retail sales of air conditioners, refrigerators, washing machines, and kitchen appliances
decreased to varying degrees. Due to the COVID-19 epidemic (the epidemic for short), the proportion of people
working at home increased, and the retail sales of home appliances increased by 1.85% year on year. According to
the statistics of ChinaIOL.com, the sales volume of residential air conditioners was 141,460,000 in 2020, a
year-on-year decrease of 6.1%; wherein the domestic sales volume was 80,280,000, decreased by 12.9%, and the
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
export sales volume was 61,180,000, increased by 4.7%.
The epidemic situation has promoted the rapid development of online retails. In 2020, the proportion of online
retails to the total retail sales of household appliances market increased from 41.17% in 2019 to 50.4%, and the
contribution rate of e-commerce channels to household appliances retails exceeded 50% for the first time, further
highlighting the importance of online retails. The epidemic has changed people's life philosophy and life style. For
the household appliances market in 2020, the air conditioners focusing on intelligence, comfort and health,
refrigerators focusing on large volume, healthy disinfection and scientific storage, and the washing machines
focusing on large capacity, healthy washing and care, and clothes drying have been recognized and accepted by
more and more consumers. Small household appliances such as dishwashers, hand-held vacuum cleaners, and air
fryers sold well at different degrees, not only enlivening the dull household appliance market, but also
strengthening the role of household appliances in enhancing people's happiness.
The remarkable retail sales of consumption upgrading goods and subdivided functional household appliances
reflected people's demand for improving the quality of life through consumption of household appliances, and the
upgrading of consumption and the transformation of household appliance business were speeding up at the same
time. "New consumption" and "high-end" will be the main innovative orientation of household appliances in
2021.
2. Industrial equipment field
The sector of core air conditioning parts benefited from the effective control of the epidemic. The compressor
field and the motor field began to recover gradually in the second half, and a slight decline was observed
throughout the year. According to the 2020 statistics of ChinaIOL.com, the sales volume of rotor compressors in
China was 211,551,000, a year-on-year decrease of 1.69%; the sales volume of rotor compressors in China was
356,762,000, a year-on-year decrease of about 5.5%.
For the intelligent equipment sector, with the proposal of the "Made in China 2025" strategy, the intelligent
manufacturing industry has ushered in an opportunity period of rapid development in recent years. According to
the data in the 2020 Statistical Bulletin of National Economic and Social Development of the PRC, the added
value of China's equipment manufacturing industry increased by 6.6% year on year in 2020, accounting for 33.7%
of the added value of industries above the designated scale; the output of industrial robots was 212,000 sets, a
year-on-year increase of 20.7%.
Regarding the product trend of industrial robots, manufacturers have probed into the application to the specific
industries and fields such as medical treatment, wine making, sewing, and edge cutting, and launched special robots.
In terms of technology development, traditional industrial robots perform more complex production tasks through
the collaborative application of force, vision, tactile, and other sensors; fusion development of the 5G, artificial
intelligence, big data, cloud computing, intelligent sensing, and other emerging technologies with robot technologies
will drive industrial robots to evolve towards a more intelligent and flexible direction.
At present, the development level of intelligent manufacturing is maintained at a sustained high speed, and the
development level of high-end intelligent equipment has become a criterion for measuring the development level
of a country's manufacturing industry. However, the intelligent manufacturing industry of China started relatively
late, and there is still a certain gap compared with developed countries. Fortunately, China has gradually extricated
itself from the dependence on foreign new and high technologies through unremitting independent R&D and
independent innovation of core technologies. Moreover, China will increase its investment in R&D in the future,
improve the policy for development of intelligent manufacturing industry, and promote intelligent transformation
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
of the industry. The intelligent manufacturing industry shows a huge growth potential.
II. Significant changes in major assets
1. Significant changes in major assets
Major assets Significant changes
Fixed assets A decrease of 0.69% over the end of last year. No significant change is made.
Intangible assets An increase of 10.80% over the end of last year. No significant change is made.
An increase of 65.20% over the end of last year. This is mainly caused by the increase
Construction in Progress
of construction in progress of the current period.
A decrease of 32.37% over the end of last year. This is mainly caused by the maturity of
Other current assets the Company’s investment in structured deposits and wealth management products in
the current period.
Long-term equity investment An increase of 14.94% over the end of last year. No significant change is made.
An increase of 67.69% over the end of last year. This is mainly caused by the increase
Other equity instrument investments of the equity investment in San’an Optoelectronics Co., Ltd. and the change in the fair
value of the equity investment.
2. Major overseas assets
□ Applicable √ Not applicable
III. Core competence analysis
Facing new opportunities and challenges, Gree takes "mastering core technologies and forging perfect quality" as
the two wheels for driving, transfers and improves the value through unique marketing model, sticks to
independent people cultivation, independent innovation and independent production, and takes "carrying forward
the industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, and
achieving Made in China, Loved by the World" as its mission to stride forward.
(I) World famous brand, continuing to create value for the society
Gree is a diversified technological global industrial group integrating R&D, production, sales and service. Gree
has won a great number of honors such as "World Brand", "Most Competitive Brand in the Market", "National
Quality Award", "Export Inspection Exemption Enterprise" and "China Brand Innovation Award" over these years.
Forbes released the Global 2000 – World's Best Employers in May 2020. Gree ranked the 246th, rising 14 places
from 2019. Since becoming one of the top 500 of the list in 2015, Gree's ranking has risen year after year, and its
development strength has been recognized by the world.
The world top 500 list of Fortune was released in August 2020. Gree was again listed in the Fortune Global 500
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
and ranked the 436th by virtue of its outstanding comprehensive strength. Meanwhile, Gree was listed in the
"China's Most Admired Companies in 2020" in the Fortune, ranking the seventh in the list and taking the first
place in the household appliance industry. According to the customer satisfaction survey results issued by the
Customer Satisfaction Evaluation Center of China National Institute of Standardization, the customer satisfaction
of Gree air conditioners and all the indexes were at the first place in the industry, ranking No.1 for 10 consecutive
years.
Gree has always been adhering to the core sense of worth of “quality first, customer satisfaction, good faith
management, and win-win situation”, and forging its brands and creating social value, environmental value and
economic value for the society and consumers depending on its perfect quality and world-leading technologies.
(II) Excellent R&D strength, continuously leading technological innovation and product upgrading of the
industry
Gree adheres to the philosophy that "science and technology change life; science and technology create life" and
insists on "independent research and development of core technologies". It firmly believes that only the real
mastery of core technologies can enable us to grasp the fate of the enterprise and realize independent development
of the enterprise. Meanwhile, Gree has set up a technological innovation system of "enterprise regarded as the
main player, market orientation, enterprise-university-research cooperation". It insists on innovation driving,
cultivates innovative talents, implements the leader strategy, and constantly consolidates its global leading
position in the field of refrigeration.
Gree boasts the largest R&D center of air conditioners in the world, four national R&D centers, one research and
evaluation base of the National Notification Enquiry Center, 15 research institutes, nearly 1,000 laboratories, and
nearly 15,000 R&D members. Its national R&D centers are the National Key Laboratory on Air Conditioning
Equipment and Energy-saving System Operation, National Engineering Research Center of Green Refrigeration
Equipment, State Recognized Enterprise Technology Center and the State-level Industrial Design Center.
Meanwhile, it has been recognized as the "National Demonstration Base for Standardization of Consumer Goods"
and "National Pilot Enterprise for Standardization of High-end Equipment Manufacturing Industry". In addition,
Gree has established the "Motor and Control" academician workstation and has been successively approved to
establish post-doctoral research centers and doctoral workstations in Guangdong Province. In 2020, Gree was
approved to establish "Guangdong Key Laboratory for Enterprises of High-speed Energy Saving Motor System".
Gree Electric continued to lead the industry in testing, certification and standards. Gree has built more than 300
professional laboratories for thermal balance, noises, reliability, electrical safety, electromagnetic compatibility,
etc., and has been successively recognized by a variety of national or international organizations (including CNAS,
TUV, UL, CSA, VDE, ITS, SGS, BV, and AHRI), growing into the largest experimental center in the industry that
can provide the most complete tests and receive the largest number of national and international recognitions.
Gree has accumulatively won 48 national, provincial or ministerial and industrial awards.
By the end of 2020, Gree has accumulatively applied for 79,014 patents, including 40,195 patents for inventions;
won 46 Chinese patent awards in total, including one gold award for invention and three gold awards for
appearance; won 6 gold awards at International Exhibition of Inventions of Geneva and 5 gold awards at iENA.
(III) Leading PQAM perfect quality assurance mode, achieving “Made in China, Loved by the World”
Gree regards "pursuing perfect quality" as the quality policy and "zero defect" and "best service not requiring
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
after-sales service" as the quality objectives, considers the "five-step method of quality prevention" and "quality
technology innovation cycle D-CTFP method" as the methods for continuously promoting and refining the perfect
quality management mode of Gree. From the quality concept of "zero defect" put forward in the early stage of
doing pioneering work to the concept of perfect quality nowadays, the connotation of Gree' quality management
concept has been constantly enriching and developing.
Gree adheres to the quality policy of "pursuing the perfect quality, creating an international brand, and forging a
century enterprise", sticks to the quality culture of "strict, true and new" oriented to customer demand and social
responsibility, sets no upper limit of investment in the basic capacity building of quality, implements all-round
quality training for all staff, and extensively carries out QCC quality improvement activities and Six Sigma quality
improvement projects. Based on the "four in one" system of ISO9001, ISO14001, ISO45001 and QC080000, a
total quality management model with independent innovation as the core has been gradually formed in the process
of introduction, promotion, and practicing total quality management, lean Six Sigma management and
performance excellence model.
Gree participated in the drafting and development of the Quality Management - Innovation Cycle Guide Based on
Customer Demand as a national standard, with a view to publicizing Gree's advanced quality management
experience throughout the industry and promoting continuous improvement of the quality level of the whole
industry. The quality level of Gree's products has been continuously improved by strengthening the internal
quality control, and the after-sale failure rate has fallen greatly for years.
From 2014 to 2020, Gree won 2 first prizes, 22 second prizes, 3 third prizes, and 61 excellent prizes of “Quality
Technology Award” of China Association for Quality respectively relying on its leading core technologies and
excellent quality management system; in November 2018, Gree won the “Third China Quality Award” relying on
its perfect quality management mode of "Made in China, Loved by the World", getting the highest honor in
China's quality field; Gree won the gold award of the 44th International Convention on Quality Control Circles
(ICQCC) in 2019 and the second award of innovation category of large enterprises in the Quality Innovation
Award (QIA) in 2020, becoming the first household appliance enterprise in China that won this award. These
awards highlighted Gree's solid strength in the field of quality technologies.
(IV) Online and offline integrated new retail system, meeting the new needs of consumers with digital
technologies
Gree insists on the sales channel construction and sales model of independent management, mutual benefit and
win-win and creates a solid online and offline business layout. The two channels complement each other and are
deeply integrated to create a full channel sales platform.
Gree has established an offline sales network covering the whole country, providing service for consumers
through its 27 sales companies and more than 30,000 exclusive stores. “Gree Dong Mingzhu's store” has been
transformed and upgraded into a comprehensive online retail e-commerce platform, selling high quality
commodities of various categories and varieties such as household appliances, food and beverage, beauty and
personal care products, clothing boutiques, and online travel products. As the market environment changes, Gree
has started the "new retail" marketing mode reform of online and offline integration. The online third-party
e-commerce platform and “Gree Dong Mingzhu's store” are deeply integrated with more than 30,000 offline
stores to provide online-offline linkage integrated services including offline experience, online ordering, and
nationwide unified distribution and installation.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Information, digital and intelligent technologies have been deeply applied to Gree's "new retail" marketing mode.
The whole chain construction and operation of new retail including the shopping mall platform, order fulfillment
system, online wholesale system, and after-sales dispatch system realizes user reaching of Gree’s new retail online,
the informatization capability empowers the channel business to drive the digital upgrade of marketing. Relying
on the Internet engineering technology and integrating the artificial intelligence, Internet of Things and AR/VR
technology, Gree promotes the digital upgrade of terminal stores through the intelligent touch interaction mode
offline, achieves the functions of product sampling, price adjustment, training, user value tag precipitation and
management in the cloud, builds Gree’s characteristic smart shopping guide stores, and constantly improves
consumers' shopping experience; uses the functions of inventory data analysis and early warning, dynamic display
and analysis of sales data and conduct data-driven operation to meet the new needs of consumers continuously.
(V) The full series of household appliances, providing consumers with overall solutions for high-quality
smart life
By 2020, Gree has provided 46 categories of household appliances, including 32 categories of home appliances,
which can meet consumers’ all-round needs for high quality life. In 2020, Gree launched new types of household
appliances such as hand-held water flosser, disinfectant maker, sterilization small square tube, heat pump washer
dryer, automatic drum washing machine with drying function, dishwasher, hand-held vacuum cleaner,
zero-cold-water gas water heater, baseboard heater, portable electric kettle, electric lunch box, and portable juicer,
enriching the life of consumers.
In 2020, Gree Smart Home built “Gree Zero-carbon Healthy Home” centering on the goal of " Link Gree, Connect
Free", and implemented the overall smart life solution featuring energy conservation, environmental protection,
comfort and health, wisdom and humanities, consisting of the six intelligent management systems of energy, air,
sleep, recipe, security and lighting, covering 61 categories of intelligent products, and meet consumers'
requirement for pursuing a better life depending on intelligent high technologies.
(VI) Precise production capacity layout and complete industrial support able to quickly meet the needs of
consumers
Gree Electric has established 17 production bases of household electrical appliances around the world, which are
located in Zhuhai, Chongqing, Hefei, Zhongshan, Zhengzhou, Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou,
Suqian, Luoyang, Nanjing, Chengdu, Ganzhou, Brazil, and Pakistan.
In 2020, Gree further improved the regional layout of production capacity for various categories of products,
promoted the upgrading of sales logistics services and coordinated to reduce the overall logistics operating cost
based on the channel reform of new retail mode. In addition, Gree has built upstream plants for parts of household
appliances, for example, compressors, motors, capacitors and enameled wires, in various bases, which greatly
enhances the control capability of the Company for upstream and downstream supply chain, guarantees the
efficient operation of production and meets the needs of consumers in a timely manner.
Moreover, the Company has built six renewable resource bases in Zhuhai, Changsha, Zhengzhou, Shijiazhuang,
Wuhu and Tianjin, covering the whole industrial chain from upstream production to downstream recycling, and
achieving green, cyclic and sustainable development. Meanwhile, Gree also provides convenient channels for
consumers to dispose of waste household appliances.
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(VII) Self-made core components and advanced supply chain management lay a solid foundation for steady
development
Gree showcases a powerful self-development and self-making capability of core components, and the production
capacity, technologies and quality of its wholly owned subsidiaries, Landa Compressor, Kaibang Motor, Xinyuan
Electronics and Gree Electrical stand in the front rank of the industry. Gree's 10 products including the
High-efficiency Scroll Compressor, High-performance Linear Servo Motor and Driver, and High-performance
Servo Motor and Driver for Industrial Robots were appraised as the "world-leading" level by the end of 2020. The
powerful R&D and manufacturing capabilities of core components vigorously support the leapfrog development
of Gree.
Aiming to create a leading supply chain in the industry, Gree has established a long-term win-win strategic
cooperative relationship with leading supporting enterprises in the industry to effectively guarantee the supply of
raw materials. In 2020, in the face of the complicated domestic and overseas political and economic environment,
Gree continued to give full play to its advantage of scale in the centralized procurement, and took measures such
as localization of sensitive materials and replacement with environmentally friendly materials, which effectively
alleviated the pressure caused by environmental changes on operation, and showed the powerful strength of Gree
in supply chain management.
(VIII) Refined cost control capability to provide guarantee for the steady development of the Company
Gree adheres to the orientation to market demand and user experience, plans and controls the product cost in
consideration of the Company's business objectives, promotes product design to implementing value engineering
by relying on technological innovation, and realizes whole process cost control and creates value for customers
and shareholders while completing product functions and guaranteeing product quality.
In 2020, Gree further promoted cost reduction through product design by taking measures such as optimizing the
product structure design, simplifying the process and developing lean models; reduced the cost of material
procurement by means such as promoting substitution schemes, locking resources in advance and annual rebate;
cut down the production cost of products by increasing the utilization rate of materials, boosting the automation
level and improving the production process.
In 2020, Gree further improved and promoted the lean manufacturing system (GMS) with Gree characteristics,
built an online learning platform of lean manufacturing, reinforced innovation in the three sections of new product
design, logistics technology and production technology, and focused on the work such as promoting lean design,
lean production, and low cost intelligent automation (LCIA) of new products. China Institute of Electronic Labor
awarded Gree the honorary title of “Excellent Enterprise Practicing Lean Management” in October 2020.
(IX) Adhere to independent training of talents and continuously upgrade the talent structure
Gree always adheres to the principle of "focusing on the strategic layout of the Company and adhering to
independent training of talents" and gradually forms an independent talent training mode with independent talent
introduction channel, independent training and development mechanism and all-round incentive and guarantee
system as the core based on the development experience and cultural deposit of the Company, striving to make
employees and the Company make progress and develop together.
Gree's talent team has been growing and its talent structure has been upgraded over the years. By the end of 2020,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
the Company had about 84,000 employees, including 2 leading talents in science and technology innovation under
the National Ten Thousand Talents Program, 3 experts enjoying special allowances from the State Council, 1
winner of the Award of Outstanding Contribution to Nanyue, 1 Outstanding Talent under the Guangdong Special
Support Program, and 80 high-level talents of Zhuhai, 448 outstanding young talents, 710 scientific and
technological experts evaluated inside the Company, and more than 7,500 intermediate and senior engineers.
Gree built a diversified independent training mechanism by setting up a training system independently,
strengthened the training of innovative talents and realized the supply of high quality talents. In 2020, Gree
continued to strengthen the independent cultivation of innovative talents, deepen the support to core businesses,
set up an intelligent learning organization, create an empowering ecology of vocational education, speed up the
talent cultivation and supply of innovation achievement transformation, and promote high quality development of
the enterprise. In 2020, Gree conducted more than 120 training sessions and evolved 8000 person-times in the
field of technology R&D; organized and carried out 12 special marketing training sessions, with a total of more
than 25,000 trainees, better supporting the first-tier marketing and service.
Employees are an important driving force for development of the Company. The Company seeks benefits for
employees through multiple channels including talent subsidies, talent housing and Gree school, improving the
employee satisfaction and happiness through continuous efforts.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section IV Discussion and Analysis of Business Operation
I. Overview
Influenced by the COVID-19 epidemic and other factors in 2020, the Company was confronted with many
difficulties and challenges in its development. However, the Company insisted on the principle of not reducing the
staff and not cutting pay, upheld the Work guiding ideology of "dream, innovation and solid work", strengthened
self-reliance and independent innovation, accelerated promotion of the new retail mode of online and offline
integration, and made new breakthroughs one after another on the road of high quality development. In 2020, the
Company achieved the total operating revenue of RMB 170.497 billion, a decrease of 14.97% year on year, and a
net profit attributable to the parent company of RMB 22.175 billion, a decrease of 10.21% year on year.
(I) Center on users, continuously improve product competitiveness and meet new needs of users
1. Residential air conditioner sector
Gree insists on centering on user needs for development of new products, creates perfect quality management and
fully considers new needs of users. Based on the product R&D idea of "Study one generation, reserve one
generation and develop one generation", Gree developed six series of new products centering on “health” and
“comfort”, covering all the use scenarios at home. In the normalization background of epidemic prevention, Gree
has completed the product line development and technical layout of healthy air conditioners, able to meet various
requirements of consumers for indoor healthy air. Focusing on improving the comfort, Gree realized the
popularization of distributed air supply by floor-standing air conditioners, upgraded the air supply technology and
heating technology of split-type air conditioners, and launched new products such as Jewel floor-standing air
conditioners, Freair series floor-standing air conditioners, new G-MAX series ODUs and single-stage
enthalpy-adding products in 2020, which were widely welcomed in the market.
2. HVAC equipment sector
In 2020, Gree constantly made breakthrough in key core technologies of the HVAC equipment sector, formed a
strong technical reserve and promoted product upgrading. The representative products are briefed below:
(1) “Hualong No.1” nuclear screw chiller. Gree successfully developed the nuclear screw chiller with independent
intellectual property rights, and studied the technologies including the "anti-seismic structure under complex
alternating load" and "flow adaptive regulation"; developed the nuclear semi-closed screw compressor with high
rigidity and high reliability, realizing the localization of nuclear screw compressor and filling the gap in the
industry. In September 2020, the 0%-100% variable load and efficient operation technology of units under wide
operating conditions passed the expert appraisal and reached the world-leading level.
(2) Gree magnetic bearing air-cooled centrifugal chiller. After making innovation in the magnetic bearing motor
system, Gree developed the first air-cooled magnetic bearing compressor and unit in China, and the related
products have been put in use in Pui Kiu Middle School in Hong Kong, achieving a breakthrough in the air-cooled
magnetic bearing market. So far, Gree has developed water-cooled and air-cooled magnetic bearing products,
which have been widely used in large office buildings, rail transit, industrial refrigeration, airports, hospitals,
shopping malls, hotels, etc. Typical projects include the office buildings organs of the National People's Congress,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
the Winter Olympic Village of Beijing 2022 Winter Olympic Games and Zhengzhou Metro Line 4. The project
received the Quality Innovation Award and the first award of the China Innovation Methods Competition.
The sales of HVAC equipment sales achieved remarkable results in 2020. Gree made a major breakthrough in the
sales of real estate sector, signed long-term strategic cooperation agreements with more than 80 leading real estate
developers, and started extensive cooperation with more than 400 real estate companies nationwide; in the clean
heating sector, Gree was awarded 31 governmental heating projects for centralized bidding in the northern
regional target market; in the rail transit sector, Gree won the bidding for T3 terminal of Hangzhou International
Airport, Fengtai Railway Station (the largest high-speed rail hub of communication in Asia) and other large
projects; in the data communication sector, Gree was awarded 22 large-scale data centers and centralized
procurement projects of operators with the significance of national model, and established a number of IDC model
projects with international influence.
3. Home appliances sector
By virtue of its profound understanding of fashion, world cutting-edge technologies, attitude of constant
perfecting and excellent detail control ability, Gree R&D team has tailored high-quality home appliances for
global users, achieving perfect integration of technologies and fashion. The representative products are briefed
below:
V-Lasso air purifier KXJFA300 is equipped with CKER triple sterilization system, and can kill COVID-19 virus
and other pathogenic viruses. This product has passed the disinfection certification, CE certification, CB
certification, SASO certification, and CQC certification. It has been widely used in hospitals, government
agencies, docks, hotels, schools, factories, and enterprises in China, sold to 30 provinces and cities in China to
make a contribution to production recovery, return to work and return to school, and also exported to more than 40
countries and regions such as the European Union, the Middle East and Mexico.
Gree steam oven first provides the function of simultaneous steaming/baking of three dishes and rice in the field;
with the healthy cooking curve, it achieves the VC retention rate of 87.50% for food, 17.89% higher than that of
the traditional technology; the product also provides the 1°C precise temperature control function.
Gree hand-held vacuum cleaner VCBG05T-B01 provides the maximum of 180 AW suction and 70 min battery life,
the user can pour out dust by one key without making hands dirty, the air outlet at the lateral front avoid directly
blowing users, dust is not raised in daily cleaning, fresh air is supplied without secondary pollution, and the deep
mite removal function is also available; users can use this product to clean the whole house easily.
4. Refrigerator and washing machine sector
(1) Refrigerator sector. Bearing in mind the growing consumer demand for preservation and sterilization, Gree
developed PLASMA antibiosis and deodorization, fruit and vegetable preservation with light oxygen and other
industry leading technologies based on the three meat preservation technologies, namely, -3°C tender freezing,
-5°C instant freezing and -33°C deep freezing, conductive to surface sterilization of articles and preservation of
fruits and vegetables. Meanwhile, it has made substantial progress in energy saving and intelligent interaction of
refrigerators.
The lineup of instant freezing refrigerators is constantly improving. Based on French six-door BCD-520 and
French five-door BCD-339, Gree newly launched cross opposite-door BCD-448 and French four-door BCD-468
in 2020, enabling the core technology to cove the mainstream volume segment of 300-550L market and meet the
requirements of consumers for different doors and different volume segments. The two new products provide the
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
five preservation modes of fruits and vegetables, zero degree, tender freezing, soft freezing, and cool fresh (instant
freezing), which can meet the diversified preservation needs.
At present, most of the refrigerator products with a sterilization function in the field show good sterilization effect
to the air, but poor sterilization effect to the surface of the items inside the refrigerator. BCD-448 instant freezing
refrigerator is combined with the ion sterilization function independently developed by Gree, and the tested
sterilization rate for the surface of the items is higher than 99%. In 2021, the technology will be further applied to
other new refrigerators.
For the small-sized apartments with a small kitchen, Gree newly developed the BCD-332 French four-door
refrigerator with a width of 62.6 cm only and covering an area of 0.43 m2, and the thin French four-door BCD-425
with an overall depth of 65 cm only.
(2) Washing machine sector. In 2020, Gree launched low/mid/high-end products to the market including heat
pump washer dryers, SC series front loading washing machines, and pulsator series washing machines, and
fulfilled the layout of all series of products. Aiming to provide “professional care of high-end fabric”, the featured
product, Gree heat pump washing, drying and care integrated machine, gives users a professional clothing care
experience by adopting heat pump drying, drying without cleaning, molecular level care and other differentiated
technologies, and owns the world leading air-conditioning drying system, which can dry clothes safely at a 37°C
low temperature and soft wind; the product integrates the steam molecular care, fresh water curtain and breeze
shaking technologies to effectively care for clothes, smooth folds and remove peculiar smell. Compared with the
traditional washing and drying machine, the heat pump washer dryer shortens the drying time by 30% and saves
energy by 60%; the fluffy ratio of its steam care function is higher than 0.95, the difference of odor removal grade
is greater than 3, and the difference of fold removal grade is greater than 3; the sterilization rate of silver ion is
99.9%, and the antibacterial rate of antibacterial door seal is 99%. The product won the title of “Good Appliances”
at the 2020 Annual Summit of China’s Household Appliance Industry.
5. Industrial product sector
(1) Efficient compressor product meeting new national standards. The product increases the energy efficiency
ratio of compressor by 8% for the new generation products by adopting core efficiency improvement and noise
reduction means such as "high-efficiency and low-friction loss bearing technology", "high-efficiency oil-gas
separation and circulation technology" and "side-exhaust noise elimination technology". The product has been put
into batch production in an all-round way, and 13 national invention patents have been requested for the related
technologies.
(2) R410A aluminum-shell scroll compressor for vehicles. In 2020, Gree successfully developed the first R410A
aluminum shell scroll compressor in the field, which adopted the unique flexible compression technology and
took into account both sealing and reliability; the original composite coating technology of aluminum alloy
surface eliminated the defect of easy wear or high power consumption of friction under a high load, and gave play
to the advantages of wear resistance and lubrication. Based on the above technological breakthroughs, the product
ideally combined light weight and high efficiency. The product has been put into batch production, and
successfully applied to the new energy vehicles in Tianjin and Macao. It can be popularized on a national scale.
(3) New energy vehicle controllers. Gree has conquered the core and key technologies such as the strong-power
and energy-saving torque control, design of high function security software and hardware architecture, intelligent
diagnosis, and OTA control, and developed Gree's first new energy vehicle controller, which has reached the
industry leading level in vehicle safety, optimal torque distribution, and energy-saving control, capable of meeting
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
the needs of new energy commercial buses and logistics vehicles. Currently, the product has been put into batch
production and realized stable operation in many cities, and its product performance has been recognized by
customers.
Gree’s five-in-one integrated controller for commercial vehicle tackles the difficult technologies such as highly
efficient and stable control of the main drive motor under all operating conditions, reliable startup of oil pump
motor, high reliability integration of multi-control function, and electromagnetic compatibility design, and
implements integrated control of the driving power systems such as main drive motor, steering oil pump, brake air
pump, power supply, and power distribution. The controllers are characterized by high integration, high safety and
reliability, and high power density, and can meet the needs of new energy commercial vehicles.
(4) High performance servo system. Gree has developed six series of servo motors involving more than 300
models and three major series of special servo drivers, which can comprehensively meet the equipment
application requirements of robots, CNC machine tools, automatic production lines, motor winding machines, and
other automation occasions. The products successively won the Gold Award of 2018 Nuremberg International
Invention Exhibition in Germany, Robot Award of 2019 China International Industry Fair (CIIF), Major Special
Project of Science and Technology of Guangdong Province in 2019, and the Grand Prize of 2020 Zhuhai Science
and Technology Award. They have altered the situation that China's high-end robot servo system relied on foreign
imports, indicating that Gree has been able to independently produce the core parts of industrial robots meeting
the international advanced level.
(II) Adhere to independent innovation, constantly make breakthrough in world-leading technologies and
lead industry standards to the world
1. Major scientific research achievements emerge one after another. Gree completed the appraisal of "nuclear
air-cooled screw chiller", "nuclear water-cooled screw chiller" and other technical achievements in 2020. It has
accumulated 31 world-leading technologies by now. The three projects named "Key Technologies and Application
of Efficient VRF Air Conditioning Unit Based on Full Sample Big Data", "Key Technologies and Application of
Wide Load and Full Scene Efficient VRF Unit", "Research and Application of Key Technologies of Adaptive
Efficient Screw Compressor under All Operating Conditions" won the first prize of the Science and Technology
Progress Award of Guangdong Province, the first prize of China Machinery Industry Technical Invention Award,
and the first prize of the Science and Technology Progress Award of China Energy Conservation Association in
turn.
In 2020, Gree made new progress in the research into basic technologies such as the key technologies of efficient
small air compressor and proton exchange membrane fuel cell, ultra-low gravity vapor compression heat pump
cycle technology, space ultra-low temperature refrigeration technology, air conditioning and auxiliary cooling
system for civil aircrafts, and the high precision and low drift technology of control and detection circuit, and also
developed Gree’s first GRM01 refrigerant with independent intellectual property rights.
2. Improve the level of standardization and generalization in an all-round way. Gree established 32 technical
standard sub-committees and compiled or revised 1,825 technical standards. The national standard for new energy
efficiency of household air conditioners, GB 21455-2019 Minimum Allowable Values of the Energy Efficiency and
Energy Efficiency Grades for Room Air Conditioners, revised by China National Institute of Standardization and
Gree as leading revisers was officially implemented as of 1 July, 2020. In terms of international standards, the two
international standard proposals regarding photovoltaic direct-driven appliance controller led by Gree were
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
approved by IEC/TC82 project initiation, which filled in gaps of the test specifications for photovoltaic
direct-driven appliance controllers; Gree Chairperson Dong Mingzhu officially served as the chairman of the
Sub-committee on Test and Evaluation of Refrigeration Compressors under the ISO Technical Committee on
Refrigeration and Air Conditioning, promoting the technology of cooling compressor to rise to an international
standard.
3. Strengthen the protection and application of intellectual property rights. The total number of patent applications
was 15,072 in 2020, including 8,793 invention patents and 2,743 invention patent grants, among which 2,513
invention patent grants were issued to the first applicant, ranking No.6 in China. Gree became the only household
appliance enterprise that has entered the top 10 enterprises in invention patent patents in China for five
consecutive years. The company licensed one patent for the invention of motor fairing hood to EBMPAPST
ranking among the top three fan companies in the world, an expert in the global blower area, which demonstrated
the creation power of Gree to the world following its granting of a patent license to Grundfos of Denmark in 2019.
4. Continuously improve the capability of product design. In 2020, Gree continued to increase its investment in
the R&D of new products in new areas, and made breakthrough progress in the product series design, CMF
planning and design, user experience, and UI design. Adhering to the principle of concentration and diversified
development, it promoted the development of original products, and made outstanding achievements in the field
of industrial design. Gree received 20 awards of three major International Design Awards (9 IF Product Design
Awards in Germany, 2 Red Dot Awards in Germany, and 9 IDEA Awards in the United States).
(III) Optimize the quality control system, insist on quality innovation and implement the perfect quality
assurance mode in an in-depth manner
To meet the consumers' requirement for pursuing a high quality life, Gree has been committed to providing high
quality products. In 2020, Gree won the honor of "High Quality Leading Enterprise" awarded by the China
Quality Certification Center, becoming the first and only enterprise of China that received this honor. In the China
Customer Satisfaction Index (C-CSI) issued by China National Institute of Standardization in 2020, Gree ranked
first in the category of air conditioners, and has topped the list for 10 consecutive years. The Quality Management
- Innovation Cycle Guide Based on Customer Demand, a national standard, drafted by Gree as the leading party
was officially implemented as of 1 July, 2020.
(IV) Pay close attention to industrial transformation, accelerate diversified layout, and cultivate new
growth points
1. Intelligent equipment sector
Zhuhai Gree Intelligent Equipment Co., Ltd. is an intelligent equipment manufacturing enterprise integrating
R&D, production, sales and service, which boasts 15 R&D departments, 421 R&D members, 5 production bases,
6 specialized companies, and 7 technical service centers. The company attaches importance to the R&D and
accumulation of autonomous technologies, and has applied for more than 2800 patents, of which 1760 are
invention patents. Relying on its own scientific research and technology level, Zhuhai Gree Intelligent Equipment
Co., Ltd. won the honors including National High-tech Enterprise and Guangdong Industrial Robot Key
Enterprise, and took the lead to complete a number of national key projects and participated in the formulation of
three national standards for the robot industry.
Its intelligent equipment products cover more than 10 fields, including servo manipulators, industrial robots,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
intelligent warehousing equipment, intelligent testing, special machine tool equipment for heat exchanger,
unmanned automation production line body, CNC machine tools, automatic production lines, and energy saving
and environmental protection, involving more than 100 specifications. In 2020, the company focused on the
introduction of full direct-driven five-axis processing machine tools, high-precision vertical processing machine
tools, and large-scale CNC gantry machine tools, among which the repeated positioning precision of
high-precision vertical processing machine tools reach 0.003 mm, and the five-axis machine tool FA500 has been
used in the field of complex surface and cavity processing in precision mold manufacturing, and the full
direct-driven vertical processing machine tool DV540 realizes the polishing-free process of high precision
graphite mold processing.
In 2020, Zhuhai Gree Intelligent Equipment Co., Ltd. vigorously promoted all construction works of the
provincial manufacturing innovation center in Zhanjiang, and successfully assisted more than 30 small household
appliance enterprises in Zhanjiang in implementing technological innovation and intelligent manufacturing
upgrade. Its intelligent manufacturing demonstration project of high-end CNC machine tools and demonstration
project of ten-million-level intelligent storage stereo warehouse were successfully implemented, which laid a
foundation for the market development of the automobile, casting, chemical industry and other fields.
2. Precision mould sector
Mould is the "mother of industry" and provides important technical support for high efficiency, low cost and high
quality of product manufacturing. The industrial level of moulds is an important symbol for the manufacturing
level of a country. Gree deeply exploits the mould field, and has established a benchmark in the mould industry in
terms of technological innovation, quality management, informatization, and intelligent manufacturing.
As of December 2020, Gree has accumulatively applied for 485 patents, of which 125 were invention patents, 251
were patents for utility models, and 109 were industrial design patent; obtained a total of 293 patents grants,
including 7 invention patents, 191 patents for utility models, and 95 industrial design patents.
In 2020, Gree Precision Mold Co., Ltd built “Guangdong Intelligent Mould Technology Innovation Center”,
organized to tackle key technical problems such as mould simulation design, intelligent design, new mould
technology, and intelligent manufacturing application, and applied for 90 patents.
In 2020, Gree Precision Mold Co., Ltd adopted the multi-cavity vertical square side-glue-in hot runner technology
for the first time to provide customers with a new precision and efficient multi-cavity injection molding solution,
helping the traditional stationery enterprises realize intelligent manufacturing upgrade; it has developed a clean
and efficient steam mould solution, which challenged the traditional oil-heated mould technology in the lunch box
field; it completed the mould design, material preparation, processing, and delivery of the forehead thermometer
project within 15 days; it has developed the new technologies and moulds including the forming technology of
black leather automotive exterior parts, the ultra-high speed turbine mould with carbon fiber, and the glass insert
mould.
3. Renewable resource sector
Gree organically combines the resource regeneration and development of circular economy with its corporate
social responsibilities, actively practices the extended producer responsibility regime, and strives to create a green
closed-loop industrial chain from design and manufacturing to recycling. Gree has successively established six
renewable resource bases in Zhuhai, Changsha, Zhengzhou, Shijiazhuang, Wuhu, and Tianjin since 2010, engaged
in the recycling of waste electrical and electronic products and end-of-life vehicles, as well as the deep processing
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
and recycling of waste circuit boards and waste plastics. Thanks to the rapid development for nearly one decade,
Zhuhai Gree Green Resources Recycling Co., Ltd has become a leading enterprise in the industry. At present, it
has the qualification and capacity of dismantling 13 million waste household appliances and 94,000 vehicles, the
processing capacity of 180,000 tons of recycled plastics, and the disposing qualification and capacity of 60,000
tons of waste circuit boards. It recycled 7 million sets of waste household appliances in 2020.
By the end of 2020, Zhuhai Gree Green Resources Recycling Co., Ltd has accumulatively disposed of more than
34 million sets of waste electrical and electronic products and more than 60,000 tons of end-of-life vehicles, and
converted over 500,000 tons of recycled copper, iron, aluminum, and plastics. It was estimated that the mining
amount of mineral crude oil resources was reduced by about 1.3 million tons, water was saved by about 3.3
million cubic meters, and carbon emission was reduced by more than 1.7 million tons.
4. Semiconductor sector
Gree has made great progress in the research of the semiconductor field and its self-developed chips and devices
have been verified by batch production. Gree achieved independent R&D of core technologies. Gree and its
subsidiary Zhuhai Zero Boundary Integrated Circuit Co., Ltd have applied for 629 patents in the field of
semiconductor technology, including 202 patent grants, 68 invention patents, and 134 patents for utility models,
and 56 international patents, among which the invention patent named Method and Device for Judging Stability of
Clock Circuit won one silver prize of the 7th Guangdong Patent Award in 2020.
Gree general industrial-grade 32-bit series MCU, featuring the advantages of high performance, high reliability,
low power consumption, and low cost, has been widely promoted and used in Gree air conditioner series products
with an annual output of more than 10 million. It can be widely applied to consumer electronics, wearable devices,
household products, health care support, large commercial units, industrial sensors, high-performance motor
control, and other fields.
Gree smart home series chips integrate the high-performance AI computing power and embedded MCU, and
implement intelligent control for image recognition, man-machine interaction, motor drive, security encryption
and other functions. These products have been applied to the intelligent energy-saving algorithm of air
conditioning and intelligent fans, and provided the complete supporting software and hardware solutions. They
can be widely used in smart household appliances, end-side AIoT, smart home, industrial computing, industrial
automation, and other fields.
5. New energy sector
The business scope of Gree new energy sector covers the photovoltaic storage DC air conditioning system,
industrial and commercial energy storage, new energy DC electric appliances, energy Internet system, new energy
auto parts, etc.
Bearing in mind the mission of jointly building a clean, safe, reliable, intelligent and efficient living and working
environment and a better new life, Gree leads the construction of a new zero-carbon DC ecology. In 2020, Gree’s
photovoltaic storage DC air conditioners and energy Internet system won the bidding of four major domestic
demonstration projects (Shenzhen Future Mansion, Suzhou Tongli DC Park Project, Xiong'an Green Energy
Magic Box, and Datong Energy Revolution Vanguard Exhibition Hall), which were put into full operation in 2020.
In addition, Gree was awarded the landmark projects such as Jiangsu Pangdong Energy Station, Xi'an
Aeronautical University, and the Green Energy and Building Research Center of CHN Energy.
In 2020, Gree’s photovoltaic air conditioning products achieved full coverage of VRF units, screw chillers and
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
centrifugal chillers, effectively fitting more application scenarios; it strove to create the popular 20 kW and 5 kW
photovoltaic air conditioning products with a high performance-price ratio, which adopted the topology
architecture of three-level separating power devices and the new thermal design for the first time to realize power
generation without derating at the ambient temperature of 50°C, reaching the industry-leading level. The
grid-connection performance of the airborne converter for photovoltaic inverter centrifugal unit was recognized
by TUV. It helped SANWO Yiwei photovoltaic centrifugal unit project become a national demonstration project
of efficient refrigerator room in Singapore. This project is the first zero energy consumption building in Singapore
and won the Platinum Award for Green Building Standard presented by the Academy of the Built Environment
(BCA) of Singapore.
In 2020, Gree launched the ultra-low temperature performance and high-capacity energy storage system products
in the energy storage sector, which are applied to the project of Pingdingshan High Voltage Apparatus Research
Institute; employing the key technologies of the park level energy Internet system, these products helped Gree
implement the 200 MWh industrial centralized energy storage project, and can not only function as a standby
power supply, but also improve the power quality and reduce the power cost.
Besides, the IEEE PES Low Voltage DC (LVDC) Technical Committee Gree intended to build as a chairman unit
has been approved, and Guangdong Energy Internet Innovation Center constructed under the leadership of Gree
has been put into operation to provide assistance for the double-carbon-objective driven green economic
transformation.
In the field of new energy vehicles, Gree has reached strategic cooperation with a lot of enterprises in the field to
provide customers with products and automatic manufacturing solutions covering new energy vehicle air
conditioners, motors, charging piles, process equipment, moulds, etc.
6. Medical and health sector
In the background of grim epidemic situation and shortage of prevention and control materials, Gree actively
fulfilled its social responsibilities, swiftly established Zhuhai Ge Health Medical Technology Co., Ltd to produce
epidemic prevention materials, and, based on the existing technical advantages, accessed the medical equipment
industry and established Chengdu Gree Xinhui Medical Equipment Co., Ltd to lay out and cultivate the strategic
emerging industry.
Zhuhai Ge Health deals with production and operation of medical goggles, medical masks, medical forehead
thermometers and other class-I and class-II medical devices. Relying on the solid strength of Gree in precision
moulds and intelligent equipment, it quickly and independently developed precision moulds for medical
protection products, automatic production line of plain face masks, and the automatic production line of KN95
mask. It took only 16 days from drawing design to equipment installation and debugging. In the hard times of
epidemic prevention and control, it successfully realized the mass production supply of masks and other materials,
making a contribution to winning the battle of epidemic prevention and control.
Focusing on the COVID-19 epidemic, Gree Xinhui started the development of mobile protective equipment
meeting the requirements for epidemic protection. In the end, it broke through the key technical difficulties of
biosafety laboratory, developed the P2+ environmental control system, filling the gap of the company in medical
equipment temperature control system, and successfully launched the system to the market and delivered it in
2020, helping mobile detection of nucleic acid and reducing the detection load of hospitals, promoting the
localization of high-end medical equipment and key technologies, and also providing a strong guarantee for
coping with public health emergencies.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(V) Strengthen digital operation, promote online and offline integration, and realize sales breakthrough of
all products
Based on the big data, artificial intelligence, and other advanced technologies, Gree new retail mode upgraded the
production, circulation and sales process of household appliances, and deeply integrated the online service, offline
experience, warehousing and distribution, and after-sales service.
In terms of offline exclusive shops, Gree promoted the construction of digital shops. By introducing the digital
devices such as intelligent shopping guide screen, cloud shelf and electronic price tag and upgrading the shop
image, offline shops not only have the offline and online sales functions, but also become a scene space for
experience, reception, and communication. Consumers will personally feel the technology convenience, health
and comfort brought by Gree products in shops. Next, Gree terminal new retail shops will create a new
omni-channel retail mode based on the experience in ten thousand shops.
In terms of online Gree Dong Mingzhu's store, Gree has promoted the opening of online Gree Dong Mingzhu's
stores for 30,000 offline stores, further enhancing the communication between consumers and brands, and
constantly improving the service efficiency and quality. The nationwide live streaming tour was completed at
eight sites throughout the year, showing the local economic and cultural characteristics and helping upgrade the
quality of life.
Benefiting from the application of Gree new retail mode, consumers can not only experience products offline, but
also buy more favorable products due to the reduction of intermediate links; the distributors have gained the
omni-channel sales capability, and can better manage and serve consumers according to the market changes; the
factories have more opportunities to directly contact consumers, and can optimize the product design according to
consumers' preferences and continuously provide better products.
(VI) Actively expand the overseas market, insist on the high-end leading strategy and energetically develop
proprietary brands
The COVID-19 epidemic spread in the world, international market demands declined, and the trade downward
pressure increased. Despite of this, Gree continued to exert its strength in overseas markets, persisted in the
market and user orientation, and developed independent brand construction from the aspects of strategy, product,
quality, and service. As a result, the international reputation of Gree brands was continuously improved.
In 2020, Gree's overseas commercial projects have achieved fruitful results. The total cooling capacity of overseas
HVAC design projects exceeded 1.1 million cold-tons. Gree was awarded many large-scale commercial projects
successively, e.g., Israel Hi Tower commercial and residential integration project, Serbia Chinese Cultural Center,
Nigeria Rai railway project, Indonesia Batam One Batam Mall project, and Taipei Arena project, and its bid
winning products included centrifugal units, screw units and other large-scale commercial products, which have
produced marked effects in public facilities, industrial parks, star hotels, chain restaurants, and other fields, and
established the international image of Gree brands.
The COVID-19 epidemic was severe overseas. To provide a healthier and cleaner environment for overseas
consumers, GREE has launched a series of household appliances integrating air purification, anti-virus and other
health functions to overseas markets. Freair fresh air conditioner is equipped with the suction and exhaust
two-way ventilation system, and provides the UVC sterilization function to effectively filter PM2.5; the
dehumidifier provides the UV sterilization function; the "V-Lasso" air purifier specially for killing COVID-19
virus leads the new trend of health upgrade, and helps Gree realize high-end brand positioning depending on
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
excellent products.
Affected by the continuous spreading of COVID-19 epidemic, the traditional promotion modes such as business
visit, international exhibition and offline promotion have been frustrated. Gree's overseas brand promotion has
been actively transformed. It took the advantage of digital means to participate in the online Canton Fair, and
displayed its corporate image and latest products to overseas customers in an all-round way through live
marketing, VR exhibition hall, online shops, and other new approaches.
(VII) Focus on user needs, continue to explore core technologies and lead the era where everything is
connected
Gree insists on independent innovation, uses core technologies to build a smart home where everything is
connected, focuses on the consumers' demand for intelligent life, and realizes the linkage of household appliances
in the whole house by connecting intelligent and high-quality household appliances of all categories. Centering on
the goal of "connecting everything, responding to any call" of Gree Zero-carbon Healthy Home, intelligent
household appliances continued to improve the smart life systems, products, entrances and Internet of Things
technologies, and achieved the overall smart life solution of energy conservation and environmental protection,
comfort and health, and wisdom and humanities in 2020.
The solution involves six smart life systems, namely, energy, air, sleep, recipe, security, and lighting, and five IOT
technologies, adopts the five major Internet of Things technologies including the connection technology,
interaction technology, sensing technology, cloud computing, and big data, and artificial intelligence, and covers
61 categories of intelligent products. Consumers can experience the family life of "connecting everything,
responding to any call" through five control entries (Gree IoT air conditioner, "Gree+" App, IoT mobile phone,
smart door lock and Cube Monster).
According to the “2020 Global Smart Home Invention Patent Top 100 Rankings” released by IPRdaily, an
intellectual property industry media, Gree ranked No.2 in the world, which proves its excellent R&D strength in
intelligent household appliances.
(VIII) Promote intelligent manufacturing and build a global intelligent demonstration factory of air
conditioners
Gree Electric is devoted to promoting the transformation and upgrade of intelligent manufacturing relying on the
independent and innovative core technologies. With the goal of establishing a whole process data-driven
intelligent decision-making platform and guided by the three major directions of "system construction,
technological innovation, and scene application", Gree makes great efforts to open up the whole process and all
factor business, strengthen the foundation of production and manufacturing, reshape the end-to-end value chain,
and build a global intelligent demonstration factory of air conditioners.
In 2020, aiming to build a digital factory and based on lean manufacturing, Gree optimized the core business of
the production system, and realized intelligent production scheduling, intelligent testing, efficiency improvement
of bottleneck positions, and process information management by improving the flexible automation capability,
connecting the data inside and outside the factory, integrating the information system platform, and implementing
intelligent application. The logistics circulation and driving between suppliers and factories promoted the quality
improvement, efficiency improvement, cost reduction, and inventory reduction in the manufacturing process; Gree
built a production and operation service command center to implement platform problem self-perception,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
intelligent prevention of exceptions, and intelligent service evaluation, quickly solve problems on the production
site, and improve the management efficiency.
As an important support for the future industrial Internet, 5G is the pioneering field of digital strategy. In 2020,
Gree accelerated the promotion of 5G+ industrial Internet and the deployment of 5G base station facilities,
achieved the 5G network coverage, transformed the existing resources and network, built Gree intelligent
manufacturing network, realized the interconnection between production equipment, instruments, sensors, control
system, and management system, and realized in-dept 5G application in the scenarios such as industrial video
surveillance, smart production service, intelligent quality inspection, intelligent warehouse storage, and intelligent
logistics distribution. Zhuhai base has been recognized as one of the first group of 5G+ industrial Internet
application demonstration parks by the Department of Industry and Information Technology of Guangdong
Province.
(IX) Deepen reform and accelerate the transformation and upgrade of intelligence and informatization
Gree has built its own big data platform to provide the massive data storage, analysis, query and data mining
capabilities. The platform features high data throughput, high response speed, horizontal expansion, easy-to-use
scheduling function, and complete data flow management functions, laying a solid foundation for the information
upgrading in the process of product production and R&D.
Centering on its intelligent manufacturing development strategy and relying on the abundant scenes of industrial
manufacturing, Gree accelerated the promotion of AI applications, focused on the in-depth layout in intelligent
detection, intelligent recognition, intelligent office, and other fields, and promoted the implementation and
application of behavior identification of key positions, intelligent detection of key materials, AOI detection
application, industrial visual inspection application, face recognition access control, and other business sectors,
improving the production efficiency and quality level.
In the aspect of smart new retail, Gree took root in the sales scene of Gree's offline terminal shops to conform to
the trend of new retail mode. Gree worked out Gree's dream shop plan, built the digital upgrade entrance for
terminal shops relying on the Internet engineering technology and through the touch interaction mode, connected
the online and offline closed-loop paths, and created Gree’s characteristic smart shopping guide shops.
Regarding smart quality management, Gree developed the digital intelligent management platform to collect and
analyze the whole process quality data, realize remote monitoring, prevention and timely response of the quality
problems found in the production process, provide an underlying data support for the digital plant, and concentrate
advantageous resources to fix the core quality problems. It promoted the implementation of supplier management
information projects such as big data quality management (Tian-yan), supplier audit system management, and
supply source interconnection management platform, and comprehensively controlled and improved the quality
level of suppliers.
In terms of intelligent production management, Gree accelerated the application of the Internet of Things,
impelled the networking of eight categories of equipment, namely, the key supporting capacity equipment, high
energy consumption equipment, quality testing equipment, process guarantee equipment, automation equipment,
security equipment, key logistics equipment, and air conditioning sector equipment of the group, developed a full
life cycle management platform for equipment, and interconnected various equipment operation information with
systems, achieving the goals of real-time equipment monitoring, parameter performance optimization, early
warning management, and quality testing improvement, and implementing the integrated management of
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
equipment operation and maintenance.
In the aspect of smart customer service, Gree implemented information projects such as intelligent dispatching,
service personnel turnover analysis, parts management, and system logic optimization, and improved the
dispatching service efficiency by replacing traditional manual dispatching with intelligent dispatching; it
monitored and analyzed the after-sales data generated in the process of providing after-sales service, so as to more
reasonably and intelligently deploy the installation and maintenance personnel and repair parts in the sales
territory and make the service more accurate and effective; it established the real-time feedback system of
consumer information through the after-sales service information platform to comprehensively identify and
efficiently collect maintenance information.
As for smart management, big data means was used to integrate the data of various business sectors of the
enterprise, conduct business intelligence analysis, and realize transparent and intelligent management of data
through multi-dimensional data analysis perspective, with a view to providing effective operation monitoring for
enterprise managers, efficiently supporting business growth, boosting the data insight of enterprises, and driving
the digital transformation and upgrade of enterprises.
As for smart property, Gree built a smart community of Gree talents. With the help of various Internet, Internet of
Things and AI technologies and methods, it integrated the security, facilities, personnel, energy efficiency,
environment, and other property services in a unified way to create a comprehensive service platform from
scattered intelligence to overall intelligence, provide a new mode of convenient services for the community, and
create a new experience of smart living environment.
(X) Optimize the talent cultivation mechanism and incentive system, and help the Company develop
steadily
In 2020, the Company continued to increase independent training of innovative talents, deepened core business
support, built smart learning organizations, created an enabling ecosystem for vocational education, accelerated
the supply of talents for the transformation of innovative achievements, and promoted high-quality development
of the Company.
The independent training of innovative talents was reinforced. Gree specially carried out practical technology
training of the manufacturing field to realize continuous and in-depth training of technical talents and urge
employees to grow into professional talents in the high-grade, high-precision and advanced technology field;
adhered to the continuous cultivation of innovative talents, promoted independent innovation of science and
technology, and strove to build Gree into a world R&D center of the manufacturing field; prepared to establish a
national training base of talents with high technical ability, and build a platform for training of technical talents to
promote the cultivation of talents with high technical ability; strengthened the reserve and training of young
talents, forged a young management cadre team, and cultivated more talents for the development of enterprises.
Support to the Company's core businesses was deepened. Closely linked to the core strategic businesses of the
enterprise and focusing on the important areas and topics of strategic development, Gree carried out training, and
supported the implementation of enterprise strategy; strengthened the support to enterprise management and
operation, and conducted the cultivation of special talents for operation support in consideration of the needs of
employee development and position promotion; supported and served the first-tier marketing, and closely
followed the Company's "New Retail" marketing innovation mode to forge a marketing talent team with "Gree
characteristics", and better support the first-tier marketing and service.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
In 2020, in order to continuously improve employee satisfaction and happiness, Gree established an "all-round
employee incentive system", a well-equipped living area for employees, and a Gree school with a beautiful
environment and complete teaching facilities, and prepared to build Gree Hospital. All these welfare guarantee
measures built a happy enterprise for Gree people. In 2021, Gree will launch an employee stock ownership plan to
allow employees to share more of the achievements of corporate development.
II. Analysis on principal businesses
1. Overview
See the description in "Overview" of "Discussion and Analysis of Business Operation".
2. Revenue and cost
(1) Composition of operating income
Unit: Yuan
2020 2019
Increase/Decre
Proportion in
Proportion in ase over the
Amount Operating Amount
Operating Income previous year
Income
Total operating
168,199,204,404.53 100% 198,153,027,540.35 100% -15.12%
income
Categorized by industry
Manufacturing 130,427,766,473.54 77.54% 156,888,659,016.13 79.18% -16.87%
Other businesses 37,771,437,930.99 22.46% 41,264,368,524.22 20.82% -8.46%
Categorized by product
Air Conditioner 117,881,639,913.77 70.08% 138,665,055,103.82 69.99% -14.99%
Home Appliances 4,521,756,518.81 2.69% 5,575,911,375.57 2.81% -18.91%
Intelligent
790,942,676.61 0.47% 2,141,285,558.55 1.08% -63.06%
equipment
Other main
7,233,427,364.35 4.30% 10,506,406,978.19 5.30% -31.15%
business
Other businesses 37,771,437,930.99 22.46% 41,264,368,524.22 20.82% -8.46%
Categorized by region
Domestic-main 110,407,002,220.87 65.64% 136,073,206,974.43 68.67% -18.86%
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
business
Overseas-main
20,020,764,252.67 11.90% 20,815,452,041.70 10.51% -3.82%
business
Other businesses 37,771,437,930.99 22.46% 41,264,368,524.22 20.82% -8.46%
(2) Industry, product, or region accounting for more than 10% of the Company's operating income or
operating profit
√ Applicable □ Not applicable
Unit: Yuan
Increase or Increase or
Increase or
Decrease of Decrease of
Gross Profit Decrease of
Operating incomes Operating Cost Operating Gross Profit
Margin Operating Cost
Income over Margin over
over Last Year
Last Year Last Year
Categorized by industry
Manufacturing 130,427,766,473.54 87,921,191,886.69 32.59% -16.87% -15.22% -1.31%
Other
37,771,437,930.99 36,307,841,794.23 3.87% -8.46% -8.77% 0.31%
businesses
Categorized by product
Air Conditioner 117,881,639,913.77 77,430,333,762.13 34.32% -14.99% -11.20% -2.80%
Other
37,771,437,930.99 36,307,841,794.23 3.87% -8.46% -8.77% 0.31%
businesses
Categorized by region
Domestic-main
110,407,002,220.87 70,329,850,923.05 36.30% -18.86% -17.93% -0.72%
business
Overseas-main
20,020,764,252.67 17,591,340,963.64 12.13% -3.82% -2.30% -1.37%
business
Other
37,771,437,930.99 36,307,841,794.23 3.87% -8.46% -8.77% 0.31%
businesses
In case of adjustment of statistical caliber for the Company's main business data during the Report Period, main business data after
statistical caliber adjustment at the end of the Report Period in the recent year
□ Applicable √ Not applicable
(3) Physical item income is higher than service income
√ Yes □ No
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(4) Fulfillment of major sales contracts signed by the Company by the end of the Report Period
□ Applicable √ Not applicable
(5) Composition of operating cost
Unit: Yuan
2020 2019
Increase/Decrease
Industry Proportion to
Item Proportion to over the previous
Category Amount Operating Amount
Operating Cost year
Cost
Raw material 75,879,070,146.39 86.90% 88,126,710,086.12 86.66% -13.90%
Household
Labor wage 4,261,563,030.87 4.88% 4,943,375,465.37 4.86% -13.79%
appliances
Depreciation 1,693,963,131.00 1.94% 1,565,803,533.57 1.54% 8.18%
manufacturing
Energy 779,821,409.66 0.89% 836,728,653.04 0.82% -6.80%
(6) Changes in the consolidation scope occurred during the Report Period
√ Yes □ No
1. Business combination not involving enterprises under common control
(1) Business combination involving enterprises not under common control in the current period
Unit: Yuan
Name of acquired party Time point of Cost of equity Proportion of Equity Date of Determination basis
equity acquisition equity acquisition purchase of date of purchase
acquisition acquisition mode
Songyuan Grain Group 2020/12/31 246,272,496.65 75.00% Purchase by 12/31/2020 Acquisition of
Co., Ltd. means of cash control power
(2) Combination cost and business reputation
Unit: Yuan
Combination cost Amount
Fair value of the equity held before the date of purchase on the date of purchase 246,272,496.65
Total combination cost 246,272,496.65
Less: Fair value share of the identifiable net assets acquired 246,272,496.65
Business reputation/combination cost smaller than the amount of fair value share of the identifiable net -
assets acquired
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, the
Company increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and its
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
shareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Group
was re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the total
Board members, thus the Company has control over Songyuan Grain Group.
As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to the
owners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable net
assets were appraised by Beijing Yachao Assets Appraisal Co., Ltd which issued [Beijing Yachao Appraisal Report
(2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originally held by
the Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paid on the
date of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
Unit: Yuan
Songyuan Grain Group Co., Ltd.
Item
Fair value on the date of purchase Carrying amount on date of purchase
Assets:
Monetary capital 70,436,872.44 70,436,872.44
Accounts receivable 58,501,141.40 58,501,141.40
Receivables financing 1,632,600.00 1,632,600.00
Prepayment 41,963,876.05 41,963,876.05
Other receivables 24,912,813.07 24,912,813.07
Inventories 397,055,281.83 397,055,281.83
Other current assets 47,958,691.72 47,958,691.72
Other equity instrument investments 7,000,000.00 7,000,000.00
Fixed assets 103,601,989.38 87,182,573.65
Construction in Progress 27,971,600.68 27,971,600.68
Intangible assets 41,875,107.81 29,763,765.14
Long-term deferred expenses 6,613,861.32 6,613,861.32
Deferred income tax assets 1,735,376.11 1,735,376.11
Other non-current assets 45,165,068.36 45,165,068.36
Subtotal of assets 876,424,280.17 847,893,521.77
Liabilities:
Short-term borrowing 421,685,022.79 421,685,022.79
Accounts payable 25,076,251.02 25,076,251.02
Contractual liabilities 22,238,960.98 22,238,960.98
32
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Payroll payable 3,036,030.14 3,036,030.14
Taxes payable 592,097.19 592,097.19
Other payables 11,819,022.22 11,819,022.22
Other current liabilities 3,347,033.54 3,347,033.54
Deferred income 20,938,130.35 20,938,130.35
Deferred income tax liabilities 7,132,689.60
Subtitle of liabilities 515,865,237.83 508,732,548.23
Net assets 360,559,042.34 339,160,973.54
Less: minority equity 114,286,545.69 108,937,028.49
Net assets obtained 246,272,496.65 230,223,945.05
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
Unit: Yuan
Carrying amount of the equity Fair value of the equity originally Gains or losses from remeasurement of the
Name of
originally held before the date of held before the date of purchase equity originally held before the date of
acquired party
purchase on the date of purchase on the date of purchase purchase at the fair value
Songyuan
Grain Group 230,223,945.05 246,272,496.65 16,048,551.60
Co., Ltd.
(5) Method and main assumptions for determining the fair value on the date of purchase
1.Appraisal and recognition methods: The asset based approach and the income approach were used to appraise
the assets and liabilities this time.
2.Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of the
evaluated unit can be timely adjusted and innovated along with the development of the market and science and
technology.
B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showing
that the production capacity will change in the future, it is assumed that the evaluated unit will not carry out major
fixed-asset investment activities that affect its operations in the future income period, and the production capacity
of the enterprise is estimated according to the condition on the evaluation benchmark date.
C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accounts
receivable and accounts payable similar to the historical years, with no payment in arrears that is significantly
different from the historical years.
D. There are no property right disputes or other economic disputes related to the assets and liabilities declared by
the appraised unit.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significant
adverse effects on the enterprise.
3.Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housing
prices in the areas where they are located led to valuation appreciation.
B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land market
prices led to valuation appreciation.
2. Business combination involving enterprises under common control
None.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Unit: Yuan
Name Time of Net assets of the end Net profit from the combination
establishment of the period date to the end of the period
Gree Electric (Zhuhai Gaolan Port) Co., Ltd. 1/16/2020 1,000,170,464.38 170,464.38
Zhuhai Ge Health Medical Technology Co., Ltd. 2/18/2020 44,211,752.29 24,211,752.29
Chengdu Gree Xinhui Medical Equipment Co., Ltd. 4/8/2020 86,869,920.67 1,199,920.67
Suzhou Qingzhan Environmental Technology Co., Ltd. 5/13/2020 13,636,129.44 -363,870.56
Gree (Ganzhou) Electric Appliances Co., Ltd. 9/25/2020 80,049,226.28 49,226.28
Gree Tianjin Xinhui Medical Equipment Co., Ltd. 10/26/2020 Not yet invested
(7) Major changes or adjustment of businesses, products or services during the Report Period
□ Applicable √ Not applicable
(8) Major sales customers and suppliers of the Company
Major sales customers
Total sales amount of 5 top customers (RMB) 25,319,031,693.14
Proportion of total sales amount of 5 top customers to the
14.86%
annual sales volume
34
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Proportion of sales amount of related party in the sales
5.20%
amount of 5 top customers to the annual sales volume
Information of 5 top customers
Serial
Customer Name Sales Volume (Yuan) Proportion to Annual Sales Volume
Number
1 First 7,906,348,022.11 4.64%
2 Second 5,111,746,539.95 3.00%
3 Third 4,526,734,392.66 2.66%
4 Fourth 4,328,457,769.40 2.54%
5 Fifth 3,445,744,969.02 2.02%
Total -- 25,319,031,693.14 14.86%
Other description of major customers
√ Applicable □ Not applicable
Among the top five customers, Zhejiang Shengshi Xinxing Gree Trading Co., Ltd and Henan Shengshi Xinxing Gree Trading Co.,
Ltd are related parties of the Company. Other customers have no related-party relationship with the Company.
Major suppliers of the Company
Total amount of purchase of top 5 suppliers (RMB) 37,290,901,785.46
Percentage to the total amount of annual purchase 32.28%
Percentage of related parties' purchase amount in the total amount of
0.00%
purchase of top 5 suppliers to the total amount of annual purchase
Information about top 5 suppliers of the Company
Serial Percentage to the total amount of annual
Name of supplier Amount of purchase (yuan)
Number purchase
1 First 12,433,227,710.60 10.76%
2 Second 8,920,198,128.91 7.72%
3 Third 6,133,511,219.60 5.31%
4 Fourth 5,575,473,433.40 4.83%
5 Fifth 4,228,491,292.95 3.66%
Total -- 37,290,901,785.46 32.28%
Other information about the major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Increase/Decrease
2020 2019 over the previous Description of the material change
year
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Sales expense 13,043,241,798.27 18,309,812,188.35 -28.76%
Overhead Expense 3,603,782,803.64 3,795,645,600.08 -5.05%
Financial expense -1,937,504,660.07 -2,426,643,429.91 20.16%
R&D expenses 6,052,563,108.10 5,891,219,715.90 2.74%
4. Investment in research and development
√ Applicable □ Not applicable
Gree adheres to the philosophy that "science and technology change life; science and technology create life" and
insists on "independent research and development of core technologies". It firmly believes that only the real
mastery of core technologies can enable us to grasp the fate of the enterprise and realize independent development
of the enterprise. Meanwhile, Gree has set up a technological innovation system of "enterprise regarded as the
main player, market orientation, enterprise-university-research cooperation". It insists on innovation driving,
cultivates innovative talents, implements the leader strategy, and constantly consolidates its global leading
position in the field of refrigeration.
Gree boasts the largest R&D center of air conditioners in the world, four national R&D centers, one research and
evaluation base of the National Notification Enquiry Center, 15 research institutes, nearly 1,000 laboratories, and
nearly 15,000 R&D members. Its national R&D centers are the National Key Laboratory on Air Conditioning
Equipment and Energy-saving System Operation, National Engineering Research Center of Green Refrigeration
Equipment, State Recognized Enterprise Technology Center and the State-level Industrial Design Center.
Meanwhile, it has been recognized as the "National Demonstration Base for Standardization of Consumer Goods"
and "National Pilot Enterprise for Standardization of High-end Equipment Manufacturing Industry". In addition,
Gree has established the "Motor and Control" academician workstation and has been successively approved to
establish post-doctoral research centers and doctoral workstations in Guangdong Province. In 2020, Gree was
approved to establish "Guangdong Key Laboratory for Enterprises of High-speed Energy Saving Motor System".
Gree Electric continued to lead the industry in testing, certification and standards. Gree has built more than 300
professional laboratories for thermal balance, noises, reliability, electrical safety, electromagnetic compatibility,
etc., and has been successively recognized by a variety of national or international organizations such as CNAS,
TUV, UL, CSA, VDE, ITS, SGS, BV accredited laboratory, and AHRI certification, growing into the largest
experimental center in the industry that can provide the most complete tests and receive the largest number of
national and international recognitions. Gree has accumulatively won 48 national, provincial or ministerial and
industrial awards. By the end of 2020, Gree accumulatively applied for 79,014 patents, including 40,195 patents
for inventions; won 50 Chinese patent awards in total, including one gold award; won 11 China industrial design
awards in total, including 3 gold awards; won 5 gold awards at the International Exhibition of Inventions of
Geneva and 5 gold awards at iENA.
R&D investment of the Company
2020 2019 Change ratio
Number of R&D personnel
14,458 14,251 1.45%
(persons)
Proportion of number of 17.22% 16.04% 1.18%
36
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
R&D personnel
Investment amount in
research and development 6,213,796,926.90 6,011,210,604.21 3.37%
(Yuan)
Proportion of investment in
research and development in 3.69% 3.03% 0.66%
operating income
Capitalization amount of
research and development 161,233,818.80 119,990,888.31 34.37%
investment (RMB)
Proportion of capitalized
research and development
2.59% 2.00% 0.59%
investment to research and
development investment
Reason for the significant change in proportion of investment in research and development to the operating income compared to the
previous year
□ Applicable √ Not applicable
Reason of the great change in the capitalization rate of R&D investment and its rationality explanation
□ Applicable √ Not applicable
5. Cash flows
Unit: Yuan
Increase/Decrease over the
Item 2020 2019
previous year
Sub-total of cash inflows from
163,892,764,321.22 175,195,923,314.18 -6.45%
operating activities
Sub-total of cash outflows from
144,654,127,012.06 147,302,209,220.59 -1.80%
operating activities
Net cash flows from operating
19,238,637,309.16 27,893,714,093.59 -31.03%
activities
Sub-total of cash inflows from
14,155,332,757.58 8,445,533,871.01 67.61%
investing activities
Sub-total of cash outflows from
14,057,602,607.40 19,720,582,471.78 -28.72%
investing activities
Net Cash Flow from Investment
97,730,150.18 -11,275,048,600.77 100.87%
Activities
Sub-total of cash inflows from
37,614,461,534.80 21,595,107,923.68 74.18%
financing activities
Sub-total of cash outflows from 58,725,959,033.00 40,817,084,044.61 43.88%
37
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
financing activities
Net Cash Flow from Financing
-21,111,497,498.20 -19,221,976,120.93 -9.83%
Activities
Net increase in cash and cash
-2,147,522,183.34 -2,399,549,002.85 10.50%
equivalents
Major factors that result in major changes in relevant data
√ Applicable □ Not applicable
Increase/decre
Item 2020 2019 Cause of change
ase proportion
Mainly attributable to the decrease of cash
Net cash flows from
19,238,637,309.16 27,893,714,093.59 -31.03% received from sale of goods or rendering of
operating activities
services
Mainly attributable to the increase of cash
Net Cash Flow from
97,730,150.18 -11,275,048,600.77 100.87% received from recovery of investments and
Investment Activities
the decrease of cash paid for investments
The description of causes of major differences existing between the net cash flows from operating activities of the Company and net
profits of the current year in the Report Period
□ Applicable √ Not applicable
III. Non-core business analysis
□ Applicable √ Not applicable
IV. Analysis of assets and liabilities
1. Major changes in assets composition
Since 2020, the Company has implemented the new income standards or new lease standards for the first time and adjusted and
implemented relevant items in financial statements at the beginning of the year.
√ Applicable □ Not applicable
Unit: Yuan
At the end of 2020 At the beginning of 2020 Description of
Change of
Proportion to Proportion to the material
Amount Amount proportion
total assets total assets change
Monetary
136,413,143,859.81 48.86% 125,400,715,267.64 44.32% 4.54%
capital
Accounts
8,738,230,905.44 3.13% 8,439,719,697.00 2.98% 0.15%
receivable
Inventories 27,879,505,159.39 9.98% 24,084,854,064.29 8.51% 1.47%
Investment real 463,420,861.39 0.17% 498,648,691.85 0.18% -0.01%
38
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
estate
Long-term
equity 8,119,841,062.14 2.91% 7,064,186,161.29 2.50% 0.41%
investment
Fixed assets 18,990,525,087.94 6.80% 19,121,930,757.04 6.76% 0.04%
Construction in
4,016,082,730.07 1.44% 2,431,051,409.94 0.86% 0.58%
Progress
Short-term
20,304,384,742.34 7.27% 15,944,176,463.01 5.63% 1.64%
borrowing
Long-term
1,860,713,816.09 0.67% 46,885,882.86 0.02% 0.65%
borrowing
39
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2 Assets and liabilities measured by fair value
√ Applicable □ Not applicable
Unit: Yuan
Accumulated fair
Amount at the Gains and losses Depreciation Amount of Amount of selling
value changes Other Amount at the end
Item beginning of the from changes in fair reserves withdrawn buying in during out during the
recognized in changes of the period
period value during the period the period period
equity
Financial assets
1. Trading financial assets
(excluding derivative 955,208,583.58 -19,994,874.52 534,846,535.22 1,099,239,744.28 370,820,500.00
financial assets)
2. Derivative financial assets 92,392,625.69 193,101,528.27 285,494,153.96
3. Receivables financing 28,226,248,997.12 -4,724,303.98 -4,724,303.98 7,248,120,097.65 20,973,404,595.49
4. Other debt investments 296,836,282.20 3,072,274.54 4,767,408.61 200,000,000.00 502,202,293.17
5. Other equity instrument
4,644,601,697.51 1,226,377,338.69 2,939,667,619.14 2,007,000,000.00 44,676,920.00 7,788,405,891.47
investments
6. Other non-current
2,003,483,333.33 2,003,483,333.33
financial assets
7. Others 432,924,010.26 38,205,618.45 22,298,300.00 410,000,000.00 44,822,900.00
Subtotal 36,651,695,529.69 1,436,037,581.45 2,962,009,023.77 2,741,846,535.22 8,802,036,761.93 31,968,633,667.42
Total 36,651,695,529.69 1,436,037,581.45 2,962,009,023.77 2,741,846,535.22 8,802,036,761.93 31,968,633,667.42
Financial liabilities
Content of other changes
None
Whether there are significant changes in the main asset measurement attribute of the Company during the Report Period.
□ Yes √ No
40
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
3. Limitation of asset rights by the end of the Report Period
Unit: Yuan
Item Carrying amount at the end of Cause of restriction
the period
Monetary capital 20,335,403,491.19 Statutory deposit reserve and deposits
Receivables financing 10,145,874,359.07 Pledged
Fixed assets 15,133,873.82 Mortgage
Other equity instrument investments 6,643,969,479.37 For details about the restricted shares, see Note (V) 15
Intangible assets 419,175,255.02 Mortgage
Other debt investments 496,933,800.00 Pledged
Total 38,056,490,258.47
V. Investments
1. Overall review
√ Applicable □ Not applicable
Unit: Yuan
Investment in the Report Period Investment in the same period last year Change percentage
3,561,055,956.90 7,192,756,039.01 -50.49%
2. Major equity investments obtained during the Report Period
□ Applicable √ Not applicable
3. Major non-equity investments during the Report Period
□ Applicable √ Not applicable
41
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
4. Financial asset investment
(1) Securities investment
√ Applicable □ Not applicable
Unit: Yuan
Accumulated fair Amount of
Accounting Carrying amount at Profit and loss Carrying amount Capital
Type of Security Abbreviation of security Initial investment Gains and losses from value changes Amount of buying selling out Accounting
measurement the beginning of the during the Report at the end of the Source of
securities code name cost changes in fair value recognized in in during the period during the calculation items
method period Period period Investment
equity period
Stocks listed
on domestic Other equity
Measure at
and overseas 600745 Wingtech Technology 884,999,996.60 3,316,957,037.50 233,083,467.50 2,665,040,508.40 5,378,849.25 3,550,040,505.00 instrument Private
fair values
stock investments
exchanges
Stocks listed
on domestic Other equity
Measure at
and overseas 600703 San’an Optoelectronics 2,000,000,000.00 1,093,928,974.37 1,093,928,974.37 2,000,000,000.00 3,093,928,974.37 instrument Private
fair values
stock investments
exchanges
Stocks listed
on domestic Other equity
Measure at
and overseas 600619 HIGHLY 1,142,602,956.85 775,199,650.33 -104,929,468.64 -474,800,740.04 17,265,162.85 667,802,216.81 instrument Private
fair values
stock investments
exchanges
Stocks listed
on domestic Other equity
Measure at
and overseas 01528 RSMACALLINE-HSHS 658,812,241.64 341,894,553.87 -45,004,435.09 -404,350,382.71 12,924,322.85 254,461,858.93 instrument Private
fair values
stock investments
exchanges
16 Interest-bearing Measure at Other debt
Bonds 160017 288,405,500.00 296,836,282.20 870,710.17 2,565,844.24 10,250,400.00 298,866,682.20 Private
treasuries 17 fair values investments
Measure at Trading financial
Bonds 150629 18 Chang'an 04 237,007,123.28 -403,823.28 237,007,123.28 17,991,436.58 236,603,300.00 Private
fair values assets
Stocks listed Measure at Other equity
600888 Xinjiang Joinworld 155,323,077.24 210,550,455.81 49,298,800.55 59,849,259.12 44,676,920.00 2,752,293.54 215,172,336.36 Private
on domestic fair values instrument
42
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
and overseas investments
stock
exchanges
Measure at Other debt
Bonds 200408 20 Nongfa 08 199,203,000.00 2,201,564.37 2,201,564.37 200,000,000.00 3,697,816.45 203,335,610.97 Private
fair values investments
Measure at Trading financial
Bonds 150588 18 Chang'an 03 134,444,931.50 -227,731.50 134,444,931.50 10,169,579.60 134,217,200.00 Private
fair values assets
Total 5,700,798,827.11 -- 4,941,437,979.71 1,228,818,058.45 2,944,435,027.75 2,571,452,054.78 44,676,920.00 80,429,861.12 8,654,428,684.64 -- --
Disclosure date of Announcement on Approval
30 April, 2020
of Portfolio Investment by Board of Directors
Disclosure date of Announcement on Approval
of Portfolio Investment by Board of 2 June, 2020
Shareholders (if any)
Important bond investment
Balance at the end of the period Beginning Balance
Item
Face value Coupon rate Real interest rate Maturity date of bonds Face value Coupon rate Real interest rate Maturity date of bonds
16 Interest-bearing treasuries
200,000,000.00 2.74% 3.10% 4 August, 2026 200,000,000.00 2.74% 3.10% 4 August, 2026
17
16 Interest-bearing treasuries
100,000,000.00 2.74% 3.44% 4 August, 2026 100,000,000.00 2.74% 3.44% 4 August, 2026
17
17 Baoanji MTN001 60,000,000.00 6.20% 6.24% 18 August, 2020
10 State grid bonds 01 350,000,000.00 4.74% 4.98% 5 February, 2020
20 Nongfa 08 200,000,000.00 3.45% 3.54% 23 September, 2025
19 Chang'an 01 491,000,000.00 7.50% 21 February, 2022
18 Chang'an 04 230,000,000.00 8.00% 23 August, 2021
18 Chang'an 03 130,000,000.00 8.00% 6 August, 2021
Total 860,000,000.00 -- -- -- 1,201,000,000.00 -- -- --
43
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(2) Investment in derivatives
√ Applicable □ Not applicable
Unit: RMB 10,000
Amount Amount
Whether Initial Proportion of the
Operation of of selling Withdrawing
or not Type of amount of Beginning Ending ending contract Profits and losses
name of Incidence buying in out depreciation
transaction investment in investment Start date Expiry date investment investment amount to net assets during the report
investment relation during during reserve amount
was derivatives in amount amount at the end of the period
in derivative the the (If any)
related derivatives report period
period period
31
Futures Non-related Futures Hedging 1 January,
No 613.47 December, 613.47 4,482.29 0.04% 9,692.70
Company party Contract 2020
2020
Forward 31
Financing Non-related 1 January,
No Financial 9,239.26 December, 9,239.26 28,549.42 0.25% 32,512.05
Institution party 2020
Contract 2020
Total 9,852.73 -- -- 9,852.73 33,031.71 0.29% 42,204.75
Capital Source of Investment in Derivatives Own funds
Lawsuits (if apply) None
Disclosure Date of Announcement on Approval of
Investment in Derivatives by Board of Directors (if 30 April, 2020
any)
Disclosure Date of Announcement on Approval of
Investment in Derivatives by Board of Shareholders (if 2 June, 2020
any)
44
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
In order to evade any risk in the cost of purchase of raw materials by the Company which might arise from wide fluctuations of the price of bulk
raw materials, the Company carried on the hedging business for part of the raw materials and duly locked the cost of raw materials according to
the futures market situation to reduce any uncertainty risk from fluctuations of the market price of the spot goods; meanwhile, the Company
carried out foreign exchange transactions by bank's financial instruments to evade any risk in the fluctuations of exchange rate and interest rate,
reduce foreign exchange liabilities and conduct the cost locking, and realize the maintenance and increase of the value of foreign exchange
assets. The Company laid down the Rules for Hedging Management of Futures and the Internal Control System of Forward Foreign Exchange
Transactions to execute the full appraisal and control of the investment in derivatives and risks in open interest, and the detailed description is
shown as below:
Legal and regulatory risk; While the Company carried on hedging and foreign exchange transactions, it was required to follow the laws and
Risk analysis of open interest of derivatives and regulations and specifically stipulate the rights and obligations with the agency. Control measures: The Company assigned the responsible
control measures during the Report Period (including department to strictly execute the contract review, clarify the rights and obligations, strengthen compliance check and ensure the Company's
but not limited to market risk, liquidity risk, credit investment in derivatives and operation of open interest in accordance with any laws and regulations and internal control system of the
risk, operation risk and legal risk) Company. 2. Operation risk: it means any risk in operation arising out of imperfect internal process, operation of employees and system. Control
measures: The Company established the corresponding management system, clarified the division of responsibilities and examination &
approval procedures of the hedging and foreign exchange transactions, built more perfect supervision mechanism and effectively reduced any
operation risk through business, decision and transaction processes. 3. Market risk: The price change of bulk goods and uncertainty of
fluctuations of exchange rate of foreign exchange market bring a greater market risk to the futures business and foreign exchange transactions.
Control measures: The principle of prudent and moderate operation is upheld in the futures hedging and foreign exchange transactions of the
Company, in which any speculative transaction is not permitted. As to the hedging business, the Company strictly restricted the number of
hedging not to exceed the number of actual spot transaction and the open interest of the futures not to exceed the number of hedged spot goods
and implemented the mechanism to stop loss. In respect of the foreign exchange transactions, the Company effectively prevented the market risk
by judging the trend of foreign exchange rate and utilizing a contract to lock the settlement of exchange rate.
The detailed usage and related hypothesis and
parameter setting should be disclosed in terms of the
The loss under the futures hedging contract during the Report Period was RMB 96,927,000; the loss under the forward foreign exchange contract
market price of the invested derivatives or changes in
during the Report Period was RMB 570,683,800.
fair value of the products during the Report Period and
analysis on the fair value of the derivatives.
Descriptions about whether there were major changes
in the accounting policies and detailed accounting
No change
principle of the Company's derivatives during the
Report Period as compared to the last report period.
In the opinion of the Company's independent directors, the Company improved its management level by strengthening internal control and
Special opinions of independent directors regarding the
carrying out the risk prevention measures as well as stabilizing price fluctuations through futures hedging. It also enhanced its foreign exchange
investment in derivatives and risk control of the
risk control level through foreign exchange transactions. The above investment in derivatives helps to give play to competitive advantages of the
Company
Company, so it is feasible for the Company to carry on the investment in derivatives under controllable risk.
45
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
5. Usage of raised funds
□ Applicable √ Not applicable
The Company was not involved in any usage of raised funds during the Report Period.
VI. Sales of major assets and equities
1. Sales of major assets
□ Applicable √ Not applicable
The Company was not involved in sales of major assets during the Report Period
2. Sale of major equities
□ Applicable √ Not applicable
VII. Analysis on major controlling shareholder and joint stock companies
√ Applicable □ Not applicable
Information regarding major subsidiaries and joint stock companies that contribute over 10% of net profits to the Company
Unit: Yuan
Company Name Company type Main business Registered capital Total assets Net assets Operating incomes Operating profit Net profits
Zhuhai Gree Group Finance
Subsidiary Financial Services 3,000,000,000.00 52,809,789,174.39 5,943,480,021.66 2,379,170,026.46 903,806,493.36 679,943,713.67
Company Limited
Varnished Wire
Zhuhai Gree Electrical Co., Ltd. Subsidiary 1,669,315,586.15 8,680,684,344.10 2,865,029,893.56 39,015,319,286.82 111,088,800.89 121,413,705.03
Manufacturing
Gree (Hefei) Electric Appliances Air Conditioner
Subsidiary 150,000,000.00 8,009,667,080.98 4,317,192,791.74 12,789,248,250.31 571,033,631.71 528,951,821.99
Co., Ltd. Manufacturing
46
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Zhuhai Landa Compressor Co., Compressor
Subsidiary 93,030,000.00 12,143,593,715.54 6,663,222,026.66 12,960,088,029.14 522,578,607.82 447,213,264.72
Ltd. Manufacturing
Zhuhai Gree Xinyuan Electronics Capacitor
Subsidiary 126,180,000.00 2,107,710,337.09 1,076,177,134.88 1,696,966,770.48 253,422,663.36 221,684,147.79
Co., Ltd. Manufacturing
Zhuhai Kaibang Motor Motor
Subsidiary 82,000,000.00 3,465,524,747.75 1,026,995,907.07 2,912,954,806.31 103,772,121.72 90,241,227.98
Manufacture Co., Ltd. Manufacturing
Small Home
GREE (Zhongshan) Home
Subsidiary Appliances 30,000,000.00 932,098,102.99 472,790,005.65 1,029,985,925.91 146,073,017.56 127,201,672.98
Appliances Co., Ltd.
Manufacturing
47
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Information about acquisition and disposal of subsidiaries during the Report Period
√ Applicable □ Not applicable
Unit: Yuan
Methods of acquisition and
Impact on overall production and operation
Company Name disposal of subsidiaries during the
and financial results
Report Period
Zhuhai Ge Health Medical Technology Co., Ltd. Establishment 24,211,752.29
Gree Electric (Zhuhai Gaolan Port) Co., Ltd. Establishment 170,464.38
Chengdu Gree Xinhui Medical Equipment Co.,
Establishment 1,199,920.67
Ltd.
Gree (Ganzhou) Electric Appliances Co., Ltd. Establishment 49,226.28
Suzhou Qingzhan Environmental Technology Co.,
Establishment -363,870.56
Ltd.
Gree Tianjin Xinhui Medical Equipment Co., Ltd. Establishment -
Songyuan Grain Group Co., Ltd. Acquisition -
Songyuan Chagan Lake Grain Co., Ltd. Acquisition -
Jilin Chagan Lake Rice Industrial Park Co., Ltd. Acquisition -
Jilin SL Tuga Grain Market Co., Ltd. Acquisition -
SL Group Rice Research Institute Co., Ltd. Acquisition -
SL (Ningbo) Grain Sales Co., Ltd. Acquisition -
Jilin SL Modern Agriculture Development Co.,
Acquisition -
Ltd.
SL Shengyuan (Jilin) Agricultural Development
Acquisition -
Co., Ltd.
SL Group Jiangwan Rice Industry Co., Ltd. Acquisition -
SL Group Ermapao Ecological Farm Co., Ltd. Acquisition -
SL Group Lianhe Ecological Farm Co., Ltd. Acquisition -
SL Group Juyuan Agriculture Co., Ltd. Acquisition -
SL Group Lvzhiyuan Agriculture Co., Ltd. Acquisition -
SL Group Dongwei Rice Industry Co., Ltd. Acquisition -
SL Group Tongda Grain Storage Co., Ltd. Acquisition -
SL Group Jingu Grain Depot Co., Ltd. Acquisition -
SL Group Songlin Grain Depot Co., Ltd. Acquisition -
Jilin SL Huilong Technology Co., Ltd. Acquisition -
Jilin SL Modern Logistics Development Co., Ltd. Acquisition -
SL (Shenzhen) South China Agricultural
Acquisition -
Development Co., Ltd.
SL Jinyu Daqing Agricultural Technology Co., Ltd. Acquisition -
Zhenlai SL Shengyuan Agricultural Development
Acquisition -
Co., Ltd.
Jilin SL Xinyu Agricultural Development Co., Ltd. Acquisition -
Total -- 25,267,493.06
48
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
VIII. Information about businesses controlled by the Company
□ Applicable √ Not applicable
IX. Prospects of the Company's future development
(I) Development strategy of the Company
Gree takes "To be Global Leading Air Conditioning Enterprise” as its corporate vision. Driven by technological
innovation and guaranteed by perfect quality, it comprehensively deepens reform, accelerates digital
transformation, steadily develops emerging industries such as intelligent equipment, precision mould, new energy
and semiconductors based on the household appliance industry, and builds a more competitive diversified and
technological global industrial group.
(II) Key work of the Company in 2021
1. Center on the market to build a new development pattern
Deeply exploit the domestic market and promote the overall layout of new retails. Continue the nationwide live
streaming tour to impel the deep integration of online and offline channels, expand the business scope of Gree
Dong Mingzhu's store, implement the whole-process real-time monitoring, optimize the logistics distribution
system, upgrade the after-sales service of new retail mode, and expand and strengthen the new retail business.
Develop the commercial market segment and expand the sales scale; actively and steadily promote the global
business layout and Gree brand globalization, optimize the overseas management mode, and reinforce the
independent brand promotion overseas; promote the distribution of home appliances with complete types and
wide coverage, launch popular products to seize the market, and continue to make great efforts in the field of
healthy household appliances; energetically expand the electromechanical engineering business cooperation of
national new infrastructure projects, new urbanization construction projects, and transportation and water
conservancy projects; in the equipment field, create competitive products focusing on emerging industries to make
industrial breakthroughs; in the mould field, carry out the strategy of high quality products, and constantly
develop external customers.
2. Adhere to independent innovation and constantly strength the core technologies
Establish a customer demand-oriented development process, and improve the core competitiveness of air
conditioners, refrigerators, washing machines, home appliances, and other products closely centering on the
quality life needs of consumers; construct a scientific and technological development route that attaches equal
importance to core technologies and cutting-edge technologies, implement a batch of forward-looking and
strategic key technology projects, optimize the science and technology planning system and operation mechanism,
and reinforce the support to basic frontier research; accelerate the research, judgment and deployment of major
innovation fields, break the bottleneck of key core technologies and equipment, including chips and
high-precision processing equipment, and forge a more secure and controllable industrial chain.
3. Optimize industrial layout and promote digital transformation
Push forward the preparation for putting Luoyang, Nanjing, and Chengdu bases into operation in an orderly
manner, and speed up the preparation progress for Gaolan Port, Ganzhou and Caidian. Create a demonstration
project with intelligent service, intelligent product, intelligent equipment, intelligent production, and intelligent
49
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
management by taking Gaolan Port intelligent manufacturing base as a model. Center on the construction of a
digital intelligent factory to create a flexible production mode, and use the high-end intelligent logistics system to
realize seamless connection between the information flow and real logistics. In terms of industrial equipment,
continue to deeply exploit the high-end equipment, precision mould, industrial robot, and other fields, and provide
more industrial enterprises with systematic transformation and upgrading service of intelligent manufacturing
through the strategic layout and implementation of factory automation, digital production line transformation and
upgrading; in the aspect of new energy, complete the whole area and full series coverage of photovoltaic VRF
units, and make contributions to energy conservation and emission reduction.
4. Comprehensively deepen the reform and improve the management mechanism
Further promote the Company's institutional reform, promote the marketization of diversified business sectors,
and enhance the overall operating efficiency of the enterprise; implement the employee stock ownership plan,
stimulate the enthusiasm and creativity of employees, retain and attract core talents, and promote long-term
development of the Company.
5. Promote green development and highlight social responsibility
Grasp the opportunity of a new round of national policies for promoting the consumption of green energy-saving
household appliances and "trade-in" program to promote the "trade-in" activity of household appliances in service
longer than originally intended, and continue to provide users with "combination blow" services from choosing
new machines, enjoying discounts, and dismantling old machines to free installation; meanwhile, speed up the
development promotion of renewable resources industry, interconnect all links of the renewable resources industry
chain, form closed-loop management of recycling, classification, deep processing, and reuse, build a complete
renewable resources operation system, and boost the green and sustainable development of economy.
6. Improve construction of the safety system and take comprehensive preventive measures
Stick to the principle of people foremost and safe development, strengthen supervision and inspection, reinforce
construction of the enterprise safety system, adhere to the epidemic prevention and control route, and strictly carry
out all the prevention and control measures. Strengthen the construction of information security and data security,
and strengthen network security assurance; use modern information technologies to establish and improve the
price management, cost management, tax control, reimbursement management, and other information systems,
and further enhance the level of financial information and the level of risk prevention and control; sort out and
complete the relevant regulations of discipline inspection and supervision, give full play to the role of discipline
inspection and supervision office, and maintain the order of operation and management; move the audit link
forward, follow up the whole process before, during and after the event, and prevent risks from the source.
7. Strengthen construction of the talent system and enhance the soft power of corporate
culture
Adhere to combination of the technical expertise and ideological and moral character, complete the training and
evaluation mechanism of talents at all levels, and further improve the talent management system of "selection,
cultivation, use, retention"; strengthen construction of the contingent of cadres, go deep to carry out quality
education for all staff, and reinforce construction of the talent echelon.
50
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(III) Major risks in future development
1. Macroeconomic fluctuation risk
The products sold by the Company are mainly HVAC and home appliances, and its market demand is greatly
influenced by the economic situation and macroeconomic regulation. The world has not completely shaken off the
impact by COVID-19, which may lead to a slowdown in the growth of macro-economy or consumer demand, and
the growth of the Company in the household appliances market will also slow down. In addition, the slowdown in
the growth of the real estate market also indirectly affects the end-use demand of household appliances.
2. Risk of price fluctuation in production factors
The main raw materials used to produce products of the Company are copper, steel, aluminium, and plastics of
various grades, and their cost accounts for a large proportion. If the prices of raw materials continue to rise and
suppliers increase their prices significantly, it will have a certain impact on the Company's operating performance.
As an industry leader, the Company showcases a powerful advantage in centralized procurement, and will
alleviate the adverse impact of raw material fluctuations on the operation by hedging and stocking up in advance.
3. Market risks caused by trade protectionism
With the enhancement of China's political and economic strength, it will be inevitably to have friction with the
beneficiaries of the existing international order. "De-globalization" and the tide of trade protectionism are still
continuing in some countries, which bring new challenges to the expansion in the overseas market and the risk of
increasing the operating costs.
4. Export market risks and exchange losses caused by exchange rate fluctuation
The Company's products are exported to more than 160 countries and regions. With continuous expansion of the
Company's overseas market, exchange rate fluctuations may not only bring adverse effects on the Company's
export of products, but also cause the Company's exchange losses and increase the financial costs.
51
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
X. Reception of activities including researches, communication and interviews
1. Registration form for reception of activities including researches, communication and interviews
√ Applicable □ Not applicable
Time of Method of Type of Reception Contents discussed Basic situation index of
Place of reception
reception reception reception object object and material provided research
For details, see Gree:
Online
China Fund Record Table for Investor
institutional
News-Jihuibao Relations Activities on 14
14 May, and individual Operation of the
Online Roadshow Others Others May, 2020 disclosed by the
2020 investors, Company
Center Company on
1,233 persons
(www.jhbshow.com) www.cninfo.com.cn on 16
in total
May, 2020.
For details, see Gree:
Record Table for Investor
3 to 30 Telephone Relations Activities on 3 to
Shanghai and Gree Operation of the
September, Communic Institution Institution 30 September, 2020
HQ Company
2020 ation disclosed by the Company
on www.cninfo.com.cn on
30 September, 2020.
Times of reception 35
Number of received institutions 372
Number of received individuals 947
Number of other received objects 0
Whether undisclosed material information is
No
revealed, disclosed or divulged
52
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section V Important Events
I. Information about common stock profit distribution and capitalization from capital reserve
funds
The common stock profit distribution policy in the report period, especially preparation, execution or adjustment of the cash dividend
policy
√ Applicable □ Not applicable
Profit distribution plan of 2019 (executed already in 2020): Calculated by the total stock capital of the Company
equivalent to 6,015,730,878 shares, all shareholders will be distributed a cash of RMB 12 (tax included) per 10
shares, with the total amount of cashes to be distributed in such a way up to RMB 7,218,877,053.60 and the
balance to be carried forward to the future year.
Profit distribution plan for half year of 2020 (executed already in 2020): Calculated by 5,921,546,216 shares
(namely the total stock capital of the Company equivalent to 6,015,730,878 shares minus 94,184,662 shares of the
Company repurchased cumulatively as at the disclosure date of the announcement on the implementation of the
equity distribution for half year of 2020), all shareholders will be distributed a cash of RMB 10 (tax included) per
10 shares, with the total amount of cashes to be distributed in such a way up to RMB 5,921,546,216.00 and the
balance to be carried forward to the future year.
Special description of the cash dividend policy
In compliance with provisions of the Articles of Association or
requirements of the resolution of the general meeting of Yes
shareholders:
The dividend standard and ratio are definite and clear: Yes
The related decision procedures and mechanisms are complete: Yes
Independent directors perform their duties responsibly and play
Yes
their due roles:
Minority shareholders have the opportunity to fully express their
opinions and demands and their legitimate rights and interests Yes
are fully protected:
The conditions and procedures are transparent and comply with
Not applicable
regulations if the cash dividend policy is adjusted or changed:
The common stock dividend distribution plan (preplan) and the capitalization plan (preplan) from capital reserve funds in recent three
years (including the Report Period)
1) Profit distribution plan of 2020: Temporarily calculated by the total 5,832,851,217 shares entitled to profit
distribution rights on 28 April, 2021 (namely the total stock capital of the Company equivalent to 6,015,730,878
shares minus 182,879,661 shares held by the Company's repurchase account), all shareholders will be distributed a
cash of RMB 30 (tax included) per 10 shares, with the total amount of cashes to be distributed in such a way up to
RMB 17,498,553,651.00 and the balance to be carried forward to the future year.
53
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2) Profit distribution plan for half year of 2020: Calculated by 5,921,546,216 shares (namely the total stock capital
of the Company equivalent to 6,015,730,878 shares minus 94,184,662 shares of the Company repurchased
cumulatively as at the disclosure date of the announcement on the implementation of the equity distribution for
half year of 2020), all shareholders will be distributed a cash of RMB 10 (tax included) per 10 shares, with the
total amount of cashes to be distributed in such a way up to RMB 5,921,546,216.00 and the balance to be carried
forward to the future year.
3) Profit distribution plan of 2019: Calculated by the total stock capital of the Company equivalent to
6,015,730,878 shares, all shareholders will be distributed a cash of RMB 12 (tax included) per 10 shares, with the
total amount of cashes to be distributed in such a way up to RMB 7,218,877,053.60 and the balance to be carried
forward to the future year.
4) Profit distribution plan of 2018: Calculated by the total stock capital of the Company equivalent to
6,015,730,878 shares, all shareholders will be distributed a cash of RMB 15 (tax included) per 10 shares, with the
total amount of cashes to be distributed in such a way up to RMB 9,023,596,317.00 and the balance to be carried
forward to the future year.
5) Profit distribution plan for half year of 2018: Calculated by the total stock capital of the Company equivalent to
6,015,730,878 shares, all shareholders will be distributed a cash of RMB 6 (tax included) per 10 shares, with the
total amount of cashes to be distributed in such a way up to RMB 3,609,438,526.80 and the balance to be carried
forward to the future year.
Table for common stock cash dividends of the Company in the recent three years (including the Report Period)
Unit: Yuan
Ratio of
Proportion of
Proportion of amount of
total cash
amount of cash
dividend
Net profit cash dividend to
(including
attributable to dividend to net profit
other ways)
common net profit Amount of cash attributable
Total cash to net profit
Amount of cash shareholders of attributable dividends based to common
dividend attributable
Year dividend (tax listed company in to common on other ways shareholders
(including other to common
included) annual shareholders (e.g., share of listed
ways) shareholders
consolidated of listed repurchase) company in
of listed
financial company in consolidated
company in
statements consolidated financial
consolidated
financial statements
financial
statements based on
statements
other ways
2020 23,420,099,867.00 22,175,108,137.32 105.61% 5,181,586,503.65 23.37% 28,601,686,370.65 128.98%
2019 7,218,877,053.60 24,696,641,368.84 29.23% 0.00 0.00% 7,218,877,053.60 29.23%
2018 12,633,034,843.80 26,202,787,681.42 48.21% 0.00 0.00% 12,633,034,843.80 48.21%
The profits of the Company in the Report Period and the parent company's profits distributable to common shareholders are positive,
but the common stock cash dividend distribution plan has not been put forward.
□ Applicable √ Not applicable
54
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
II. Preplan for profit distribution and capitalization from public reserve funds in the Report
Period
√ Applicable □ Not applicable
Number of bonus shares (stock) given per 10
0
stocks
Dividend allocated per 10 stocks (RMB) (tax
30
included)
Increase by transfer per 10 stocks (stock) 0
Equity base of distribution proposal (stock) 5,832,851,217
Cash dividend (RMB) (tax included) 17,498,553,651.00
Cash dividend in other ways (such as
5,181,586,503.65
repurchasing shares) (RMB)
Total cash dividend (including other methods)
22,680,140,154.65
(RMB)
Distributable profit (RMB) 68,536,203,624.18
Proportion of total cash dividends (including other
100%
methods) in total profit distribution
Cash dividends of this distribution
If the company's development stage is mature and there are no major capital expenditure arrangements, when the profit is
distributed, the minimum proportion of cash dividends in this profit distribution should reach 80%
Detailed description of the preplan for profit distribution or capitalization from public reserve funds
Temporarily calculated by the total 5,832,851,217 shares entitled to profit distribution rights on 28 April, 2021 (namely the total
stock capital of the Company equivalent to 6,015,730,878 shares minus 182,879,661 shares held by the Company's repurchase
account), all shareholders will be distributed a cash of RMB 30 (tax included) per 10 shares, no bonus share will be given and
public reserve funds will not be used for capitalization.
In accordance with the Implementation Rules for the Repurchase of Shares by Listed Companies on the Shenzhen Stock Exchange,
the shares in the special repurchase account are not entitled to profit distribution. If the total number of shares of the Company
entitled to profit distribution changes during the period from the disclosure date of this announcement to the date of equity
registration for the implementation of equity distribution due to equity incentive exercise, convertible bonds to shares, share
repurchase, etc., the Company will follow the principle of unchanged share distribution ratio to adjust the total amount of dividends
accordingly.
55
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
III. Fulfillment of commitments
1. Commitments of the Company's actual controllers, shareholders and acquirers, the Company and other
related parties of commitments that have been fulfilled completely in the Report Period or have not been
fulfilled completely as of the end of the Report Period
√ Applicable □ Not applicable
Cause of Party of Type of Time of Period of Fulfillment
Content of commitment
commitment commitment commitment commitment commitment status
Share-splitting
commitment
1. The transferee commits that shares acquired
from Gree Electric Appliances due to this
transfer will be fully locked up when the
transfer registration is completed in this
transaction, and will not be transferred for 36
months from the date of completion of the
share transfer registration; if there are relevant
laws and regulations that require the lock-up 36 months
period of the transferred shares exceeds the from the date
Being under
Zhuhai Share above-mentioned lock-up period committed by 2 December, of completion
normal
Mingjun lock-up the transferee, the transferee agrees to extend 2019 of the share
fulfillment
the lock-up period of the shares accordingly to transfer
meet the prescribed period. 2. After the registration
completion of this share transfer, for shares
acquired by the transferee from Gree Electric
Appliances, Inc. due to this transfer, their
dividend shares generated due to bonus share
and capitalization from public reserve funds
by the listed company will also abide by the
Commitments above share lock-up commitment.
made in the 1. The transferee commits that after the
acquisition report completion of the transfer, the overall stability
or equity change of Gree Electric Appliances' Operation and
report Management Team will be maintained within
the scope of authority, and no major changes
will be made to Gree Electric Appliances'
management structure. 2. The transferee
commits that during the period of direct or
indirect holding of shares of Gree Electric
Appliances, it will not take the initiative to put
forward any suggestions and proposals Being under
Zhuhai Other 2 December, Effective for a
regarding the relocation of Gree Electric normal
Mingjun commitments 2019 long time
Appliances' headquarters and registered fulfillment
address from Zhuhai City, and it will actively
urge all parties to ensure that Gree Electric
Appliances' headquarters and registered
address are not relocated from Zhuhai City; if
any shareholder puts forward any suggestions
and proposals regarding the relocation of Gree
Electric Appliances' headquarters and
registered address from Zhuhai City, the
transferee commits to participate in the general
meeting of shareholders and vote against such
56
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
proposals. 3. The transferee commits to do its
utmost to make effective industrial investment
and strategic resource introduction for
Zhuhai's economic development, and urge
Gree Electric Appliances to make new
contributions to the sustainable and healthy
development of Zhuhai's economy. 4. Zhuhai
Mingjun commits to actively exercise the
voting rights of shareholders in the general
meeting of shareholders of the listed company
involving dividends and to prompt the
directors nominated by it to vote in favor of
the board of directors' resolution of the listed
company regarding an annual net profit
dividend ratio of not less than 50%.
Letter of Commitment on Maintaining the
Independence of the Listed Company: In order
to guarantee the independent operation of the
listed company after this equity transfer,
Zhuhai Mingjun, Zhuhai Xianying and Zhuhai
Yuxiu make the following commitments. (I)
To ensure asset independence and
completeness of the listed company: 1. To
ensure that Gree Electric Appliances will be
equipped with the relevant production system,
auxiliary production system as well as
supporting facilities corresponding to its
business operations, have the right to own or
use the land, workshop and machines and
facilities relating to its business operations as
well as the ownership or use right to its
trademarks, patent technologies and
know-how, and have an independent purchase
system of raw materials and sales system of
Zhuhai Maintaining
products. 2. To ensure that Gree Electric
Mingjun, the Being under
Appliances will have independent and 2 December, Effective for a
Zhuhai independence normal
complete assets, and all of their assets will be 2019 long time
Xianying, of the listed fulfillment
under the control of Gree Electric Appliances
Zhuhai Yuxiu company
and independently owned and operated by
Gree Electric Appliances. 3. To ensure that
Zhuhai Mingjun and other enterprises
controlled by Zhuhai Mingjun will not
illegally occupy Gree Electric Appliances'
assets in any way; or provide guarantee for the
debts of Zhuhai Mingjun and other enterprises
under its control with Gree Electric
Appliances' assets. (II) To ensure personnel
independence of the listed company: 1. To
ensure that Gree Electric Appliances' labor,
personnel and compensation management will
be completely independent from related
companies. 2. To ensure that the
recommendation of directors, supervisors and
senior management personnel by the
enterprise to Gree Electric Appliances will be
conducted in accordance with legal
procedures, and will not be beyond the
57
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
personnel appointment and removal decisions
adopted at Gree Electric Appliances' meeting
of board of directors and general meeting of
shareholders. (III) To ensure finance
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 have a standardized and
independent financial accounting system. 2. To
ensure that Gree Electric Appliances will
independently open accounts in banks and will
not share bank accounts with its related
companies. 3. To ensure that Gree Electric
Appliances' financial personnel will not take
part-time jobs in its related companies. 4. To
ensure that Gree Electric Appliances will pay
taxes independently according to law. 5. To
ensure that Gree Electric Appliances can make
financial decisions independently, and the
intended transferee will not illegally interfere
with Gree Electric Appliances' use of funds.
(IV) To ensure organization independence of
the list company: 1. To ensure that Gree
Electric Appliances will establish a sound
corporate governance structure for joint stock
companies and have an independent and
complete organizational structure. 2. To ensure
that Gree Electric Appliances' internal
management organization will independently
exercise its functions and powers in
accordance with laws, regulations and the
Articles of Association. (V) To ensure business
independence of the listed company: 1. To
ensure that Gree Electric Appliances will have
the assets, personnel, qualifications and ability
to independently carry out business activities,
and have the ability to independently and
continuously operate in the market. 2. To
ensure that, except through the exercise of
shareholders' rights, the enterprise will not
interfere in its business activities of Gree
Electric Appliances. 3. To ensure that the
enterprise and other enterprises controlled by
the enterprise will avoid substantial industry
competition with Gree Electric Appliances. 4.
To ensure that, when the enterprise and other
enterprises controlled by the enterprise
conduct necessary and unavoidable related
transactions with Gree Electric Appliances, the
enterprise will conduct fair operation in
accordance with the marketization principle
and at fair prices, and perform transaction
procedures and information disclosure
obligations in accordance with relevant laws
and regulations and regulatory documents. If
any one of the above commitments is violated,
the enterprise will be willing to bear all the
58
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
responsibilities arising therefrom, and fully
compensate or reimburse all direct or indirect
losses caused to Gree Electric Appliances.
Letter of Commitment on Avoiding Horizontal
Competition: In order to avoid horizontal
competition with the listed company, Zhuhai
Mingjun, Zhuhai Xianying and Zhuhai Yuxiu
make the following commitments: 1. the
enterprise and other enterprises controlled by
the enterprise (me), the controlling
shareholders and actual controllers of the
enterprise will not engage in the same or
similar business with Gree Electric Appliances
and its subsidiaries in a direct or indirect
manner in the future, so as to avoid possible
direct or indirect business competition with
Gree Electric Appliances and its subsidiaries.
2. If other enterprises controlled by the
enterprise further expand their business
scopes, other enterprises controlled by the
enterprise will take the principle of giving
priority to the protection of the rights and
interests of Gree Electric Appliances and take
Zhuhai
all possible measures to avoid horizontal
Mingjun, Avoiding Being under
competition with Gree Electric Appliances and 2 December, Effective for a
Zhuhai horizontal normal
its subsidiaries. 3. If Gree Electric Appliances 2019 long time
Xianying, competition fulfillment
and its subsidiaries or related regulatory
Zhuhai Yuxiu
authorities determine that the enterprise and
other enterprises controlled by the enterprise
are engaging in or will engage in any business
which constitutes horizontal competition with
Gree Electric Appliances and its subsidiaries,
the enterprise will give up or cause the
enterprises which its subsidiaries directly or
indirectly hold to give up any business or
business opportunities that may result in
horizontal competition, or cause such business
or business opportunities to be provided with a
priority to Gree Electric Appliances or its
wholly-owned and holding subsidiaries on a
fair and reasonable basis or to be transferred to
other unrelated third parties. 4. If any one of
the above commitments is violated, the
enterprise will be willing to bear all the
responsibilities arising therefrom, and fully
compensate or reimburse all direct or indirect
losses caused to Gree Electric Appliances.
Letter of Commitment on Regulating Related
Transactions: In order to protect the interests
of public shareholders and maintain the
Zhuhai
sustained and healthy development of the
Mingjun, Regulating Being under
listed company, Zhuhai Mingjun, Zhuhai 2 December, Effective for a
Zhuhai related normal
Xianying, and Zhuhai Yuxiu make the 2019 long time
Xianying, transactions fulfillment
following commitments: 1. To ensure that the
Zhuhai Yuxiu
future related transactions between the
enterprise and other enterprises controlled by
the enterprise and Gree Electric Appliances
59
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
will be fair and conducted in accordance with
the normal business conduct standards; and
that the enterprise will continue to regulate
related transactions with Gree Electric
Appliances and its subsidiaries. 2. To ensure
that the enterprise will perform its obligations
as a shareholder of Gree Electric Appliances in
good faith and in good faith, and for related
transactions that cannot be avoided or exist on
reasonable grounds, it will sign a standard
related transaction agreement with Gree
Electric Appliances in accordance with the
law, and in accordance with relevant laws,
regulations, rules, other regulatory documents
and the articles of association, and fulfill the
approval procedures; the price of related
transactions will be determined in accordance
with fair and reasonable market prices, and the
price of related transactions will be fair; it will
perform the information disclosure obligations
of related transactions in accordance with
relevant laws, regulations and the articles of
association; it will not use related transactions
to illegally transfer the funds and profits of
Gree Electric Appliances or damage the
interests of Gree Electric Appliances and
related shareholders. 3. To ensure that the
enterprise and other enterprises controlled by
the enterprise will, in accordance with the
provisions of laws, regulations and the articles
of association, when considering related
transactions involving the enterprise and other
enterprises controlled by the enterprise,
effectively abide by the avoidance procedure
during the voting on related transactions at the
meeting of the board of shareholders or the
general meeting of shareholders of Gree
Electric Appliances.
Letter of Commitment on Maintaining the
Independence of the Listed Company: In order
to guarantee the independent operation of the
listed company after this equity transfer, I
make the following commitments. (I) To
ensure asset independence and completeness
of the listed company: 1. To ensure that Gree
Maintaining Electric Appliances will be equipped with the
the relevant production system, auxiliary Being under
Dong 2 December, Effective for a
independence production system as well as supporting normal
Mingzhu 2019 long time
of the listed facilities corresponding to its business fulfillment
company operations, have the right to own or use the
land, workshop and machines and facilities
relating to its business operations as well as
the ownership or use right to its trademarks,
patent technologies and know-how, and have
an independent purchase system of raw
materials and sales system of products. 2. To
ensure that Gree Electric Appliances will have
60
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
independent and complete assets, and all of
their assets will be under the control of Gree
Electric Appliances and independently owned
and operated by Gree Electric Appliances. 3.
To ensure that Zhuhai Mingjun and other
enterprises controlled by Zhuhai Mingjun will
not illegally occupy Gree Electric Appliances'
assets in any way; or provide guarantee for the
debts of Zhuhai Mingjun and other enterprises
under its control with Gree Electric
Appliances' assets. (II) To ensure personnel
independence of the listed company: 1. To
ensure that Gree Electric Appliances' labor,
personnel and compensation management will
be completely independent from related
companies. 2. To ensure that the
recommendation of senior management
personnel by I to Gree Electric Appliances will
be conducted in accordance with legal
procedures. (III) To ensure finance
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 have a standardized and
independent financial accounting system. 2. To
ensure that Gree Electric Appliances will
independently open accounts in banks and will
not share bank accounts with its related
companies. 3. To ensure that Gree Electric
Appliances' financial personnel will not take
part-time jobs in its related companies. 4. To
ensure that Gree Electric Appliances will pay
taxes independently according to law. 5. To
ensure that Gree Electric Appliances can make
financial decisions independently, and the
intended transferee will not illegally interfere
with Gree Electric Appliances' use of funds.
(IV) To ensure organization independence of
the list company: 1. To ensure that Gree
Electric Appliances will establish a sound
corporate governance structure for joint stock
companies and have an independent and
complete organizational structure. 2. To ensure
that Gree Electric Appliances' internal
management organization will independently
exercise its functions and powers in
accordance with laws, regulations and the
Articles of Association. (V) To ensure business
independence of the listed company: 1. To
ensure that Gree Electric Appliances will have
the assets, personnel, qualifications and ability
to independently carry out business activities,
and have the ability to independently and
continuously operate in the market. 2. To
ensure that, except through the exercise of
shareholders' rights and the performance of
functions and duties of board chairman /
61
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
senior management personnel of the listed
company, I will not interfere in its business
activities of Gree Electric Appliances. 3. To
ensure that I and other enterprises controlled
by me will avoid substantial industry
competition with Gree Electric Appliances. 4.
To ensure that, when I and other enterprises
controlled by me conduct necessary and
unavoidable related transactions with Gree
Electric Appliances, the enterprise will
conduct fair operation in accordance with the
marketization principle and at fair prices, and
perform transaction procedures and
information disclosure obligations in
accordance with relevant laws and regulations
and regulatory documents. If any one of the
above commitments is violated, I will be
willing to bear all the responsibilities arising
therefrom, and fully compensate or reimburse
all direct or indirect losses caused to Gree
Electric Appliances.
Letter of Commitment on Avoiding Horizontal
Competition: In order to avoid horizontal
competition with the listed company, I make
the following commitments: 1. I and other
enterprises controlled by me will not engage in
the same or similar business with Gree
Electric Appliances and its subsidiaries in a
direct or indirect manner in the future, so as to
avoid possible direct or indirect business
competition with Gree Electric Appliances and
its subsidiaries. 2. If other enterprises
controlled by I further expand their business
scopes, other enterprises controlled by I will
take the principle of giving priority to the
protection of the rights and interests of Gree
Electric Appliances and take all possible
measures to avoid horizontal competition with
Avoiding Being under
Dong Gree Electric Appliances and its subsidiaries. 2 December, Effective for a
horizontal normal
Mingzhu 3. If Gree Electric Appliances and its 2019 long time
competition fulfillment
subsidiaries or related regulatory authorities
determine that I and other enterprises
controlled by me are engaging in or will
engage in any business which constitutes
horizontal competition with Gree Electric
Appliances and its subsidiaries, I will give up
or cause the enterprises which its subsidiaries
directly or indirectly hold to give up any
business or business opportunities that may
result in horizontal competition, or cause such
business or business opportunities to be
provided with a priority to Gree Electric
Appliances or its wholly-owned and holding
subsidiaries on a fair and reasonable basis or
to be transferred to other unrelated third
parties. 4. If any one of the above
commitments is violated, I will be willing to
62
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
bear all the responsibilities arising therefrom,
and fully compensate or reimburse all direct or
indirect losses caused to Gree Electric
Appliances.
Letter of Commitment on Regulating Related
Transactions: I make the following
commitments: 1. To ensure that the future
related transactions between I and other
enterprises controlled by me and Gree Electric
Appliances will be fair and conducted in
accordance with the normal business conduct
standards; and that I will continue to regulate
related transactions with Gree Electric
Appliances and its subsidiaries. 2. To ensure
that I will perform its obligations as a
shareholder of Gree Electric Appliances in
good faith and in good faith, and for related
transactions that cannot be avoided or exist on
reasonable grounds, it will sign a standard
related transaction agreement with Gree
Electric Appliances in accordance with the
law, and in accordance with relevant laws,
regulations, rules, other regulatory documents
and the articles of association, and fulfill the
Regulating Being under
Dong approval procedures; the price of related 2 December, Effective for a
related normal
Mingzhu transactions will be determined in accordance 2019 long time
transactions fulfillment
with fair and reasonable market prices, and the
price of related transactions will be fair; it will
perform the information disclosure obligations
of related transactions in accordance with
relevant laws, regulations and the articles of
association; it will not use related transactions
to illegally transfer the funds and profits of
Gree Electric Appliances or damage the
interests of Gree Electric Appliances and
related shareholders. 3. To ensure that I and
other enterprises controlled by I will, in
accordance with the provisions of laws,
regulations and the articles of association,
when considering related transactions
involving I and other enterprises controlled by
I, effectively abide by the avoidance procedure
during the voting on related transactions at the
meeting of the board of shareholders or the
general meeting of shareholders of Gree
Electric Appliances.
Commitments
made during
asset
reorganization
Commitment issued during public issuance of
Commitments
additional shares in 2007: 1. In the future, the
made during Avoiding
GREE Company and the enterprises controlled by the 29 June, 3 February, Fulfilled
initial public horizontal
GROUP Company will not directly or indirectly engage 2007 2020 completely
offering or competition
in the household air conditioner, central air
refinancing
conditioner, household appliances and other
63
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
businesses that constitute horizontal
competition with Gree Electric Appliances,
Inc. of Zhuhai, nor will they invest in the
enterprises or projects related to the above
businesses or having direct or indirect
competition with Gree Electric Appliances,
Inc. of Zhuhai. 2. If it is found that the
Company and the enterprises controlled by the
Company are engaged in or intend to engage
in the household air conditioner, central air
conditioner, household appliances and other
businesses that constitute horizontal
competition with Gree Electric Appliances,
Inc. of Zhuhai, or have invested or plan to
invest in the enterprises or projects related to
the above businesses or having direct or
indirect competition with Gree Electric
Appliances, Inc. of Zhuhai, Gree Electric
Appliances, Inc. of Zhuhai has the right to
request the Company to stop engaging in the
above competitive business, stop
implementing the above competitive projects
and stop investing in the above-mentioned
related enterprises; if the Company has
completed the investment, Gree Electric
Appliances, Inc. of Zhuhai has the right to
request the Company to transfer the relevant
equity of the project or the enterprise dealing
with the business; if the Company breaches
this commitment and engages in related
competitive businesses, resulting in damage to
the interests of Gree Electric Appliances, Inc.
of Zhuhai, the Company is willing to assume
the corresponding liability for compensation.
Commitment issued during public issuance of
additional shares in 2007: promised to ensure that
Gree's business has the independent and complete
production, supply, marketing and other auxiliary
supporting systems so as to reduce unnecessary
related transactions. When related transactions
occur, the relevant matters of related transactions
Reducing will be handled in accordance with the principle
and of good faith, fairness, impartiality, due diligence
GREE standardizing and public disclosure, the transaction price will 29 June, 3 February, Fulfilled
GROUP the related be determined in accordance with the principle of 2007 2020 completely
transactions market fairness, and the relevant procedures of
with Gree avoiding voting by associated shareholders and
associated directors and the relevant procedures
for independent directors to express their
opinions on related transactions independently
will be strictly implemented to ensure legitimacy
and fairness of the related transaction procedures
and fairness and reasonableness of the related
transaction results.
During the period of holding shares of Gree The period Being under
Equity incentive GREE Other 14 June,
Electric Appliances, the Company will fully when I am a normal
commitments GROUP commitments 2019
assume all reasonable expenses and economic shareholder of fulfillment
64
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
losses (if any) incurred by Gree Electric due to Gree Electric
the Company's termination of the remaining Appliances
equity incentive plan.
Other
commitments
made to minority
shareholders of
the Company
Commitments are
Yes
fulfilled in time
If commitments
are not fulfilled
in time, detail the
specific reason of
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
IV. The listed company's non-operating funds occupied by the controlling shareholders and
their related parties
□ Applicable √ Not applicable
No controlling shareholder or its related party occupied non-operating funds of the listed company in the Report Period of the
Company.
V. Description about the "Non-standard Audit Report" of the accounting firm in the Report
Period by the Board of Directors, Board of Supervisors and independent director (if any)
□ Applicable √ Not applicable
VI. Description about changes in the accounting policies, accounting estimates and accounting
methods in comparison to the financial report of last year
√ Applicable □ Not applicable
1. Changes of major accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 14 - Revenues (Finance
and Accounting [2017] No. 22) (hereinafter referred to as "new revenue standards") on 5 July, 2017, requiring
companies listed at home and abroad at the same time and companies listed overseas and adopting IFRS or
Accounting Standards for Business Accounting to prepare financial statements to implement the new revenue
standards from 1 January, 2018; and requiring other domestic listed companies to implement the new revenue
65
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
standards from 1 January, 2020. Under the new revenue standards, the Company makes corresponding changes to
its accounting policies and implements the new revenue standards from 1 January, 2020.
Under the new revenue standards, the Company only adjusts the retained earnings at the beginning of 2020 and
the amount of other related items in the financial statements for the cumulative impact on the contract which has
not been fulfilled on the first implementation date.
Before and after the implementation of the new revenue standards, the main difference in revenue recognition
accounting policies is that the timing of revenue recognition changes from the transfer of risks and rewards to the
transfer of control. Before and after the implementation of the new revenue standards, the Company's business
model and contract terms remain unchanged, and there is no difference in the specific timing of revenue
recognition. The implementation of the new revenue standards has no significant impact on the operating income,
net profit attributable to the Company's common shareholders, total assets, and net assets attributable to the
company’s common shareholders in each year (end) before the first implementation date.
2. Changes of major accounting estimates
None.
3. Adjustments to relevant items in financial statements at the beginning of the period of the first
implementation year due to the first implementation of new revenue standards from 2020
Unit: Yuan
Report item Amount as at 31 December, 2019 (before change) Amount as at 1 January, 2020 (after change)
Consolidated statements Parent company's Consolidated statements Parent company's
statements statements
Current assets:
Accounts 8,513,334,545.08 3,873,270,521.33 8,439,719,697.00 3,873,270,521.33
receivable
Contract 73,614,848.08
assets
Total current 213,364,040,964.83 191,741,346,310.18 213,364,040,964.83 191,741,346,310.18
assets
Current liabilities:
Advances 8,225,707,662.42 11,832,592,136.06 -
from customers
Contractual 7,311,804,415.54 10,965,696,063.40
liabilities
Other current 65,181,491,855.14 64,375,139,451.87 66,095,395,102.02 65,242,035,524.53
liabilities
Total current 169,568,300,209.60 163,622,323,232.13 169,568,300,209.60 163,622,323,232.13
liabilities
Description about adjustments: For the financial statements at the beginning of the period, the Company's implementation of the new
revenue standards only affects the reclassification of assets and liabilities, but has no impact on the total assets, total liabilities and
total net assets.
4. Adjustments to relevant items in financial statements at the end of the period of the first implementation
year due to the first implementation of new revenue standards from 2020
66
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Unit: Yuan
Amount under the new revenue standards as at 31 Amount under the old revenue standards as at 31
December, 2020 December, 2020
Report item
Consolidated Parent company's Consolidated statements Parent company's
statements statements statements
Current assets:
Accounts 8,738,230,905.44 3,548,791,695.27 8,816,776,431.04 3,548,791,695.27
receivable
Contract assets 78,545,525.60
Total current assets 213,632,987,164.66 190,395,751,656.57 213,632,987,164.66 190,395,751,656.57
Current liabilities:
Advances from 13,147,449,930.78 16,044,928,449.57
customers
Contractual 11,678,180,424.65 14,594,653,911.45
liabilities
Other current liabilities 64,382,254,283.54 59,737,975,078.14 62,912,984,777.41 58,287,700,540.02
Total current liabilities 158,478,718,130.74 157,595,121,705.31 158,478,718,130.74 157,595,121,705.31
Description about adjustments: For the financial statements at the end of the period, the Company's implementation of the new
revenue standards only affects the reclassification of assets and liabilities, but has no impact on the total assets, total liabilities and
total net assets.
VII. Description about the retrospective restatement required for correction of significant
accounting errors that occurred in the Report Period
□ Applicable √ Not applicable
The Company didn't involve any correction of significant accounting errors in the Report Period that requires retrospective
restatement.
VIII. Description about changes in the consolidated statement scope in comparison with the
financial report of last year
√ Applicable □ Not applicable
1. Business combination involving enterprises not under common control
(1) Business combination involving enterprises not under common control in the current period
Unit: Yuan
Name of acquired party Time point of Cost of equity Proportion of Equity Date of Determination basis
equity acquisition equity acquisition purchase of date of purchase
acquisition acquisition mode
Songyuan Grain Group 31 246,272,496.65 75.00% Purchase by 31 Acquisition of
Co., Ltd. December, means of December, control power
2020 cash 2020
67
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(2) Combination cost and business reputation
Unit: Yuan
Combination cost Amount
Fair value of the equity held before the date of purchase on the date of purchase 246,272,496.65
Total combination cost 246,272,496.65
Less: Fair value share of the identifiable net assets acquired 246,272,496.65
Business reputation/combination cost smaller than the amount of fair value share of the identifiable
net assets acquired
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, the
Company increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and its
shareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Group
was re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the total
Board members, thus the Company has control over Songyuan Grain Group.
As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to the
owners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable net
assets were appraised by Beijing Yachao Assets Appraisal Co., Ltd. which issued [Beijing Yachao Appraisal
Report (2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originally
held by the Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paid
on the date of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
Unit: Yuan
Songyuan Grain Group Co., Ltd.
Item
Fair value on the date of purchase Carrying amount on date of purchase
Assets:
Monetary capital 70,436,872.44 70,436,872.44
Accounts receivable 58,501,141.40 58,501,141.40
Receivables financing 1,632,600.00 1,632,600.00
Prepayment 41,963,876.05 41,963,876.05
Other receivables 24,912,813.07 24,912,813.07
Inventories 397,055,281.83 397,055,281.83
Other current assets 47,958,691.72 47,958,691.72
Other equity instrument investments 7,000,000.00 7,000,000.00
Fixed assets 103,601,989.38 87,182,573.65
Construction in Progress 27,971,600.68 27,971,600.68
68
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Intangible assets 41,875,107.81 29,763,765.14
Long-term deferred expenses 6,613,861.32 6,613,861.32
Deferred income tax assets 1,735,376.11 1,735,376.11
Other non-current assets 45,165,068.36 45,165,068.36
Subtotal of assets 876,424,280.17 847,893,521.77
Liabilities:
Short-term borrowing 421,685,022.79 421,685,022.79
Accounts payable 25,076,251.02 25,076,251.02
Contractual liabilities 22,238,960.98 22,238,960.98
Payroll payable 3,036,030.14 3,036,030.14
Taxes payable 592,097.19 592,097.19
Other payables 11,819,022.22 11,819,022.22
Other current liabilities 3,347,033.54 3,347,033.54
Deferred income 20,938,130.35 20,938,130.35
Deferred income tax liabilities 7,132,689.60
Subtitle of liabilities 515,865,237.83 508,732,548.23
Net assets 360,559,042.34 339,160,973.54
Less: minority equity 114,286,545.69 108,937,028.49
Net assets obtained 246,272,496.65 230,223,945.05
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
Unit: Yuan
Carrying amount of the equity Fair value of the equity originally Gains or losses from remeasurement of the
Name of
originally held before the date of held before the date of purchase on equity originally held before the date of
acquired party
purchase on the date of purchase the date of purchase purchase at the fair value
Songyuan
Grain Group 230,223,945.05 246,272,496.65 16,048,551.60
Co., Ltd.
(5) Method and main assumptions for determining the fair value on the date of purchase
1.Appraisal and recognition methods: The asset based approach and the income approach were used to appraise
the assets and liabilities this time.
2.Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of the
evaluated unit can be timely adjusted and innovated along with the development of the market and science and
technology.
69
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showing
that the production capacity will change in the future, it is assumed that the evaluated unit will not carry out major
fixed-asset investment activities that affect its operations in the future income period, and the production capacity
of the enterprise is estimated according to the condition on the evaluation benchmark date.
C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accounts
receivable and accounts payable similar to the historical years, with no payment in arrears that is significantly
different from the historical years.
D. There are no property right disputes or other economic disputes related to the assets and liabilities declared by
the appraised unit.
E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significant
adverse effects on the enterprise.
3. Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housing
prices in the areas where they are located led to valuation appreciation.
B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land market
prices led to valuation appreciation.
2. Business combination involving enterprises under common control
None.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Unit: Yuan
Name Time of Net assets of the end Net profit from the combination
establishment of the period date to the end of the period
Gree Electric (Zhuhai Gaolan Port) Co., Ltd. 16 January, 2020 1,000,170,464.38 170,464.38
Zhuhai Ge Health Medical Technology Co., Ltd. 18 February, 2020 44,211,752.29 24,211,752.29
Gree Chengdu Xin Hui Medical Equipment Co., 8 April, 2020 86,869,920.67 1,199,920.67
Ltd.
Suzhou Qingzhan Environmental Technology Co., 13 May, 2020 13,636,129.44 -363,870.56
Ltd.
Gree (Ganzhou) Electric Appliances Co., Ltd. 25 September, 80,049,226.28 49,226.28
2020
Gree Tianjin Xin Hui Medical Equipment Co., Ltd. 26 October, 2020 Not yet invested
70
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
IX. Engagement and disengagement of accounting firms
Currently engaged accounting firms
Union Power Certified Public Accountants (Special General
Name of domestic accounting firm
Partnership)
Remuneration for the domestic accounting firm (RMB 10,000) 396
Consecutive years for the domestic accounting firm to render
6
audit service
Names of certified public accountants of the domestic
Han Zhenping, Geng Ting
accounting firm
Consecutive years for the domestic accounting firm to render
1
CPA audit service
A new accounting firm was engaged in the current period
□ Yes √ No
Engagement of an accounting firm for internal control auditing, financial adviser or sponsor
√ Applicable □ Not applicable
During the year, the Company hired Union Power CPAs Co., Ltd. (special general partnership) as its internal control accounting firm;
the Company hired Huatai United Securities Co., Ltd. as a sponsor for resolving the follow-up matters of the share split reform.
X. Delisting after disclosure of the annual report
□ Applicable √ Not applicable
XI. Matters related to bankruptcy reorganization
□ Applicable √ Not applicable
The Company was not involved in any matter related to bankruptcy reorganization in the Report Period.
XII. Major legal action or arbitration
□ Applicable √ Not applicable
The Company was not involved in any major legal action or arbitration during the Report Period.
XIII. Punishment and rectification
□ Applicable √ Not applicable
The Company was not involved in any punishment or rectification during the Report Period.
71
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
XIV. Integrity status of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company's equity incentive plan, employee stock ownership plan
or other employee motivation measures
□ Applicable √ Not applicable
The Company was not involved in any equity incentive plan, employee stock ownership plan or other employee motivation measures
or their implementation during the Report Period.
72
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
XVI. Significant related transactions
1. Related transactions associated with day-to-day operation
√ Applicable □ Not applicable
Approved
Related Amount of Proportion Exceeding Available
Type of Contents of Prices of transaction Settlement Disclo
Incidence transaction related to amount of the market price Date of
Related parties related related related amount (ten of related sure
relation pricing transactions (ten similar approved of similar disclosure
transactions transactions transactions thousand transactions index
principle thousand Yuan) transaction quota transactions
Yuan)
Companies
where
Zhejiang directors of
Shengshi the Company Payment www.c
Sales of Sales of 30 April,
Xinxing Gree act as Market price Market price 450,943.43 3.46% 550,000 No before Market price ninfo.c
commodities products 2020
Trading Co., executive delivery om.cn
Ltd. directors and
general
managers
Companies
Henan where
Shengshi directors of Payment www.c
Sales of Sales of 30 April,
Xinxing Gree the Company Market price Market price 428,595.56 3.29% 880,000 No before Market price ninfo.c
commodities products 2020
Trading Co., act as delivery om.cn
Ltd. executive
directors
Companies
Shandong
where
Shengshi Payment www.c
supervisors of Sales of Sales of 30 April,
Xinxing Gree Market price Market price 309,970.99 2.38% 520,000 No before Market price ninfo.c
the Company commodities products 2020
Trading Co., delivery om.cn
act as
Ltd.
managers
Zhuhai Companies Sales of www.c
Sales of Settlement 30 April,
Yinlong New and their smart Market price Market price 12,380.09 0.09% 100,000 No Market price ninfo.c
commodities by schedule 2020
Energy Co., subsidiaries equipment, om.cn
73
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Ltd. and its and holding bus air
subsidiaries subsidiaries conditioners,
and holding where the molds,
subsidiaries chairman of motors, etc.
the Company
serves as a
director
Companies
and their
Zhuhai Procurement
subsidiaries
Yinlong New of batteries,
and holding
Energy Co., energy www.c
subsidiaries Materials Settlement 30 April,
Ltd. and its storage Market price Market price 42,390.45 0.37% 150,000 No Market price ninfo.c
where the procurement by schedule 2020
subsidiaries product om.cn
chairman of
and holding components,
the Company
subsidiaries etc.
serves as a
director
Total -- -- 1,244,280.52 -- 2,200,000 -- -- -- -- --
Details of huge-amount sales return Not applicable
Actual fulfillment (if any) in the Report Period when the
total amount is estimated by category for the daily related Not applicable
transaction to take place in the current period
Cause (if applicable) of the large difference between the
Not applicable
transaction price and market reference price
74
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2. Related transactions of acquisition or sales of assets or equity
□ Applicable √ Not applicable
The Company was not involved in any related transaction of acquisition or sales of assets or equity in the Report Period.
3. Related transactions of common foreign investment
□ Applicable √ Not applicable
The Company was not involved in any related transaction of common foreign investment during the Report Period.
4. Associated credits and liabilities
□ Applicable √ Not applicable
The Company was not involved in any associated credit or liability in the Report Period.
5. Other significant related transactions
√ Applicable □ Not applicable
On 12 June, 2020, the Company held the thirteenth meeting of the eleventh session of board of directors. At the
meeting, the Proposal on Capital Increase to Subsidiaries and Related Transactions was reviewed and approved.
The Company intended to increase capital to its controlling subsidiary Zhuhai Gree Group Finance Co., Ltd. with
its self-owned funds, totaling RMB 2,640,000,000, of which RMB 1,500,000,000 is included in the registered
capital of Zhuhai Gree Group Finance Co., Ltd. and the remaining RMB 1,140,000,000 is included in the capital
reserve of Zhuhai Gree Group Finance Co., Ltd.
Related inquiries from disclosure website of interim reports on major related transactions
Disclosure date of temporary Disclosure website name of temporary
Name of temporary announcement
announcement announcement
Proposal on Capital Increase to Subsidiaries
13 June, 2020 www.cninfo.com.cn
and Related Transactions
XVII. Major contracts and their fulfillment
1. Information about trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
The Company was not involved in any trusteeship during the Report Period.
(2) Contracting
□ Applicable √ Not applicable
The Company was not involved in any contracting matter during the Report Period.
75
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(3) Lease
□ Applicable √ Not applicable
The Company was not involved in any lease during the Report Period.
2. Major guarantee
□ Applicable √ Not applicable
The Company was not involved in any major guarantee during the Report Period.
3. Entrusting others to execute any cash asset management
(1) Entrusted financing
√ Applicable □ Not applicable
Overview of entrusted wealth management during the report period
Unit: RMB 10,000
Source of funds for Occurrence amount of
Amount overdue but not
Specific type entrusted wealth entrusted wealth Outstanding balance
recovered yet
management management
Broker wealth
Private 42,596.42
management products
Total 42,596.42
Specific situation of high-risk entrusted wealth management with large single amount or low security, poor liquidity and
non-guaranteed principal
□ Applicable √ Not applicable
Entrusted wealth management has the circumstance that it is expected to be unable to recover the principal or other circumstances
that may cause impairment
□ Applicable √ Not applicable
(2) Entrusted loan
□ Applicable √ Not applicable
The Company was not involved in any entrusted loan during the Report Period.
4. Major contracts for daily operations
□ Applicable √ Not applicable
5. Other major contracts
□ Applicable √ Not applicable
The Company did not have any other major contract during the Report Period.
76
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
XVIII. Social responsibilities
1. Fulfilling social responsibilities
Gree actively and voluntarily performed its social responsibilities, effectively protected the lawful rights and
interests of all stakeholders, won with its strength the recognition of the enterprise, brand and products from
capital market and consumer market and promoted the low-carbon green growth in the industry through various
activities. (For details, please refer to the Company's Social Responsibility Report for the Year 2020 published on
www.cninfo.com.cn on 29 April, 2021.)
2. Fulfilling the social responsibilities of taking targeted measures in poverty alleviation
In 2020, Gree Electric Appliances actively responded to the provincial party committee and the provincial
government's implementation of the rural revitalization strategy and the "Ten Thousand Enterprises Helping Ten
Thousand Villages in the Form of Pairing Assistance" action. Under the leadership of the Zhuhai Federation of
Trade Unions, Gree Electric Appliances helped Qixing Village, Shuangjiao Town, Yangchun City to carry out
poverty alleviation work by donating home appliances to the registered poor households and village committee of
Qixing Village through Zhuhai Pearl Charity Foundation and providing local residents with employment
opportunities to local residents. By stimulating the internal motivation of the needy groups to be self-reliant and
strive to be strong, Gree Electric Appliances made strong efforts in targeted advancement and achieved practical
results in targeted landing, and thus won the battle of targeted poverty alleviation.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
3. Circumstances related to environmental protection
If the listed company and its subsidiaries are key pollutant discharge units published by the environmental protection department
√ Yes □ No
Names of
Number Distribution
Company or Major
Serial Discharge of of Discharge Adopted Pollutant Total Approved Over-standard
Subsidiary Pollutants and Total Discharge
Number Mode Discharge Discharge Concentration Discharge Standard Discharge Discharge
Name Particular
Ports Ports
Pollutants
Level 2 limit of the
GREE COD: COD: 26.4
second period COD: 10.257
ELECTRIC COD, Intermitte 21mg/L; tons/year;
Sewage specified in the tons/year;
1 APPLIANCE ammonia nt 3 Ammonia Ammonia None
station Discharge Limits of Ammonia nitrogen:
S, INC. OF nitrogen discharge nitrogen: nitrogen: 3.6
Water Pollutants 0.115 tons/year.
ZHUHAI 0.259mg/L. tons/year.
(DB44/26-2001)
Total nitrogen:
Total 6.935235
nitrogen: Total nitrogen: 1.75 tons/year; COD:
5.5mg/L; tons/year; 23.117450
Total nitrogen, Pollutant Discharge
COD: COD: 4.56 tons/year;
Zhuhai Landa COD, Continuou Standard for
Sewage 23.6mg/L; tons/year; Ammonia
2 Compressor ammonia s 1 Electroplating None
station Ammonia Ammonia nitrogen: nitrogen:
Co., Ltd. nitrogen, total discharge Water
nitrogen: 0.065 tons/year; 3.698792
zinc (DB44/1597-2015)
0.648mg/L; Total zinc: 0.023 tons/year;
Total zinc: tons/year. Total zinc:
0.12mg/L. 0.462349
tons/year.
Grade-3 Standard of
Ammonia COD: 208.704
Gree (Hefei) Comprehensive COD: 5.491
COD, Intermitte nitrogen: tons/year;
Electric Sewage Sewage Discharge tons/year;
3 ammonia nt 2 0.216mg/L; Ammonia None
Appliances station Standard Ammonia nitrogen:
nitrogen discharge COD: nitrogen: 20.870
Co., Ltd. (GB8978-1996) and 0.112 tons/year.
14.71mg/L. tons/year.
Requirements of
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Takeover Standards
for Sewage
Treatment Plants in
Economic
Development Zones
Suspended
matter: Grade-1 standard Suspended matter:
Suspended
4mg/L; for the second 0.045 tons/year;
matter Intermitte
Sewage COD: period in Discharge COD: 0.107
COD, nt 1
station 21.9mg/L; Limits of Water tons/year;
ammonia emission
Ammonia Pollutants Ammonia nitrogen:
nitrogen
nitrogen: (DB44/26-2001) 0.046 tons/year.
4.01mg/L.
Emission limits of
process waste gas
(the second period)
Zhuhai specified in the
Toluene:
Kaibang Emission Limits of 2020 sewage
0.01mg/m
4 Motor Air Pollutants of Toluene: 0.466 permit not None
Xylene:
Manufacture Guangdong tons/year; approved
Toluene, 0.32mg/m
Co., Ltd. (DB44/27-2001), Xylene: 0.095
xylene, sulfur Sulfur
Emission limits of tons/year;
dioxide, Roof of dioxide:
Organized exhaust cylinder Sulfur dioxide:
nitrogen 3 factory 15mg/m
discharge VOCs of the 2.153 tons/year;
oxide, building Nitrogen
Emission Standard Nitrogen oxide:
particulate oxide:
of Volatile Organic 2.313 tons/year;
matter 12mg/m
Compounds for Particulate matter:
Particulate
Surface Coating of 3.941 tons/year.
matter:
Automobile
20mg/m
Manufacturing
Industry of
Guangdong
(DB44/816-2010)
Level 2 limit of the
Zhuhai Gree Xylene, Roof of Xylene: Xylene: 0.2777 2020 sewage
Organized second period
5 Electrical Co., phenols, 12 factory 1.41047mg/m tons/year; permit not None
discharge specified in the
Ltd. TVOCs building ; Phenols: 0.09882 approved
Emission Limits of
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Phenols: Air Pollutants tons/year;
0.3mg/m (DB44/27-2001); TVOCs: 1.60818
TVOCs: the second period tons/year.
10.2513mg/m specified in the
. Emission Standard
of Volatile Organic
Compounds for
Furniture
Manufacturing
Operations
(DB44/814-2010)
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Construction and operation of pollution prevention facilities
1. Wastewater pollution control facilities:
The Company and its subsidiaries are all equipped with corresponding sewage treatment facilities in accordance
with the environmental protection requirements for construction projects, as well as full-time environmental
protection managers, operators and monitors. Up to now, all the systems have been in normal operation, and met
the emission standards stably, without emissions beyond the standards.
2. Waste gas pollution control facilities:
The waste gas pollution control facilities of the Company and its subsidiaries are in normal operation, the
indicators of waste gas monitoring conform to the national and local emission standards, and there is no situation
exceeding the standards.
3. Solid waste treatment and disposal facilities:
The Company implemented the hazardous waste classification and collection system and entrusted the institutions
with corresponding hazardous waste treatment qualifications to dispose of them. No illegal disposal ever occurred.
Environmental impact assessment of construction projects and other administrative licenses for
environmental protection
The waste gas pollution control facilities of the Company and its subsidiaries are in normal operation, the
indicators of waste gas monitoring conform to the national and local emission standards, and there is no situation
exceeding the standards.
Contingency plan for unexpected environmental events
The Company implemented requirements of the Emergency Management Measures for Unexpected
Environmental Events and related national laws and regulations. To ensure timely, orderly, efficient and
appropriate response to unexpected environmental events, protect the personal safety of employees and reduce
property losses, each subsidiary of the Company formulated a contingency plan for unexpected environmental
events and reported them to the environmental protection department for recording.
Environmental self-monitoring plan
The Company formulated an environmental self-monitoring plan according to the requirements of environmental
impact assessment, and detected wastewater pollutants once a day and air pollutants at least once a year.
Other environmental information that should be made public
None
Other environmental protection related information
None
XIX. Description of other significant matters
√ Applicable □ Not applicable
On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement. Gree Group
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by Gree Group to
Zhuhai Mingjun at a price of RMB 46.17/share (accounting for 15% of the Company's total equity); On 13
December, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision and
Administration Commission of the State Council (SASAC) of Zhuhai City separately approved the share transfer.
Gree Group obtained the Transfer Registration Confirmation issued by China Securities Depository and Clearing
Corporation Limited (CSDC) Shenzhen Branch on 3 February, 2020. The share transfer registration procedures
for the transfer of this agreement have been completed, and the transfer date is 23 January, 2020. After the
completion of the share transfer registration, the Company has neither a controlling shareholder nor an actual
controller.
XX. Significant matters of the Company's subsidiaries
□ Applicable √ Not applicable
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section VI Changes in Stock Capital & Information of Shareholders
I. Changes in stock capital
1. Changes in stock capital
Unit: Share
Before the change Increase/Decrease (+, -) After the change
Stock Converted
New Bonus from Housing
Qty Percentage Others Subtotal Qty Percentage
Issue Issue Accumulation
Fund
I. Stocks with trading
45,799,625 0.76% 22,419 22,419 45,822,044 0.76%
restriction conditions
1. Stocks held by the
State
2. Stocks held by the
state-owned legal person
3. Stocks held by
45,799,625 0.76% 22,419 22,419 45,822,044 0.76%
other domestic capital
Including: Stocks
held by the domestic
legal person
Stocks held by
the domestic natural 45,799,625 0.76% 22,419 22,419 45,822,044 0.76%
person
4. Stocks held by the
foreign capital
Including: Stocks
held by the foreign legal
person
Stocks held by
the foreign natural
person
II. Tradable Stocks
without trading 5,969,931,253 99.24% -22,419 -22,419 5,969,908,834 99.24%
restriction conditions
1. RMB ordinary 5,969,931,253 99.24% -22,419 -22,419 5,969,908,834 99.24%
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
stocks
2. Domestically listed
foreign capital stocks
3. Overseas listed
foreign capital stocks
4. Others
III. Total of stocks 6,015,730,878 100.00% 6,015,730,878 100.00%
Causes of changes in stock capital
□ Applicable √ Not applicable
Approval of changes in stock capital
□ Applicable √ Not applicable
Transfer due to changes in stock capital
□ Applicable √ Not applicable
Progress of share repurchase
√ Applicable □ Not applicable
1. The Company held the tenth meeting of the eleventh session of board of directors on 10 April, 2020. At the
meeting, the Proposal on the Partial Repurchase of Public Shares (hereinafter referred to as the "first phase of
repurchase") was reviewed and approved. The Company intended to perform the repurchase in the form of
centralized bidding transactions with its self-owned funds totaling between RMB 3 billion (inclusive) and RMB 6
billion (inclusive) at a repurchase price of less than RMB 67.82/share (after the annual equity distribution plan of
2019 is implemented, the repurchase price will be adjusted from no more than RMB 70/share to no more than
RMB 68.80/share. After the equity distribution plan for half year of 2020 is implemented, the repurchase price
will be adjusted from no more than RMB 68.80/share to no more than RMB 67.82/share). The repurchase period
shall not exceed 12 months from the date of review and approval of the repurchase plan by the Company's board
of directors.
2. The Company held the sixteenth meeting of the eleventh session of board of directors on 13 October, 2020. At
the meeting, the Proposal on the Partial Repurchase of Public Shares (hereinafter referred to as the "second phase
of repurchase") was reviewed and approved. The Company intended to perform the repurchase in the form of
centralized bidding transactions with its self-owned funds totaling between RMB 3 billion (inclusive) and RMB 6
billion (inclusive) at a repurchase price of less than RMB 69.02/share (after the annual equity distribution plan of
2020 is implemented, the repurchase price will be adjusted from no more than RMB 70/share to no more than
RMB 69.02/share). The repurchase period shall not exceed 12 months from the date of review and approval of the
repurchase plan by the Company's board of directors.
3. By the end of the Report Period (31 December, 2020), the Company has repurchased a total of 94,184,662
shares, all of which were purchased in the first phase of the repurchase plan, at the cost of RMB 5,181,586,503.65
(excluding transaction costs), with the minimum purchase price of RMB 53.01/share and the highest purchase
price of RMB 57.00/share. For details, see the relevant repurchase progress announcement.
4. By the disclosure date of the 2020 annual report, the Company has repurchased a total of 182,879,661 shares by
the special repurchase account through two phases of the repurchase plan, at the cost of RMB 10,420,236,003.53
(excluding transaction costs), with the minimum purchase price of RMB 53.01/share and the highest purchase
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
price of RMB 61.95/share.
For the first phase of the repurchase plan, the Company repurchased a total of 108,365,753 shares at the cost of
RMB 5,999,591,034.74 (excluding transaction costs), with the minimum purchase price of RMB 53.01/share and
the highest purchase price of RMB 60.18/share. The repurchase plan was already implemented on 24 February,
2021. For details, see the Company's relevant progress announcement disclosed in the designated information
disclosure media.
For the second phase of the repurchase plan, the Company has repurchased a total of 74,513,908 shares at the cost
of RMB 4,420,644,968.79 (excluding transaction costs), with the minimum purchase price of RMB 56.46/share
and the highest purchase price of RMB 61.95/share. For details, see the Company's relevant progress
announcement disclosed in the designated information disclosure media.
Progress of reducing shares repurchased by centralized bidding
□ Applicable √ Not applicable
Impact by changes in stock capital on financial indicators such as basic earnings per share and diluted earnings per share,
and the net asset value per share attributable to common shareholders of the Company in the recent year and the recent
period
□ Applicable √ Not applicable
Other contents that must be disclosed in the opinion of the Company or according to requirements of the securities regulatory
institution
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Number of
Number of Number of restricted sales Number of
Name of restricted shares restricted shares released from the restricted shares Reasons for
Release date
shareholder at the beginning increased in the lock-up at the end of the restriction
of the period current period requirements in period
the current period
Shares locked by
Duan Xiufeng 795,375 198,750 596,625 -
executives
Share lock-up of
Wang Jingdong 663,505 221,169 884,674 outgoing 16 July, 2022
executives
Total 1,458,880 221,169 198,750 1,481,299 -- --
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
II. Issuance and listing of securities
1. Issuance of securities (excluding the preferred stock) in the Report Period
□ Applicable √ Not applicable
2. Description about changes in the Company's total number of stocks and shareholder structure, and
assets and liability structure
□ Applicable √ Not applicable
3. Existing internal employee stock
□ Applicable √ Not applicable
III. Information about the shareholders and actual controllers
1. Total number of shareholders and their shareholding status
Unit: Share
Total
number of
Total preferred
number of shareholder
Total number preferred s (if any)
of common shareholders whose
Total number of shareholders (if any) voting
common at the end of whose rights were
shareholders at 480,000 last month 468,644 voting rights 0 restored at 0
the end of the before the were the end of
Report Period disclosure date restored at last month
of the annual the end of before the
report Report disclosure
Period (See date of the
Note 8) annual
report (See
Note 8)
Shareholding of the shareholders holding more than 5% of total stocks or shareholding of the top 10 shareholders
Total number of Number of Number of Pledge or freezing
Increase/Decr
Name of Nature of Shareholding the stocks held the trading the trading
ease in the Stock
shareholder shareholder proportion at the end of the restricted unrestricted Qty
Report Period status
Report Period stocks held stocks held
Hong Kong
Securities Foreign
18.70% 1,124,911,044 230,038,565
Clearing legal person
Company Ltd.
Zhuhai Mingjun
Domestic
Investment
non-state-o
Partnership 15.00% 902,359,632 902,359,632 Pledged 902,359,632
wned legal
(Limited
person
Partnership)
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Jinghai Internet Domestic
Technology non-state-o
8.20% 493,140,455 -42,881,778
Development wned legal
Co., Ltd. person
Zhuhai Gree State-owned
3.22% 193,895,992 -902,359,632
Group Co., Ltd. legal person
China Securities
State-owned
Finance Co., 2.99% 179,870,800
legal person
Ltd.
Central Huijin
Asset State-owned
1.40% 84,483,000
Management legal person
Co., Ltd.
Qian Hai Life
Insurance Co.,
Others 1.00% 60,086,861 -5,523,921
Ltd. – Hai Li
Nian Nina
GOLDMAN,SA Foreign
0.81% 49,027,500 45,467,910
CHS&CO.LLC legal person
Domestic
Dong Mingzhu natural 0.74% 44,488,492 33,366,369 11,122,123 Pledged 43,632,750
person
Hillhouse
Capital Foreign
0.72% 43,396,407
Management–H legal person
CM China Fund
Situation (if any) where a
strategic investor or general
legal person becomes one of
None
top 10 shareholders due to
placement of new shares (see
Note 3)
Description for affiliated
Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons
relationship or concerted
acting in concert. Except for that, the Company does not know whether there is an associated
action of the above
relationship between the above shareholders or whether they are persons acting in concert.
shareholders
Description about
above-mentioned
shareholders’ entrusting/being None
entrusted with and waiving
voting rights
Shareholding of the top 10 shareholders without trading restriction conditions
Number of the trading unrestricted stocks held at the end of Type of stocks
Name of shareholder
the Report Period Type of stocks Qty
Hong Kong Securities
1,124,911,044 RMB ordinary stocks 1,124,911,044
Clearing Company Ltd.
Zhuhai Mingjun Investment
Partnership (Limited 902,359,632 RMB ordinary stocks 902,359,632
Partnership)
Jinghai Internet Technology
493,140,455 RMB ordinary stocks 493,140,455
Development Co., Ltd.
87
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Zhuhai Gree Group Co., Ltd. 193,895,992 RMB ordinary stocks 193,895,992
China Securities Finance Co.,
179,870,800 RMB ordinary stocks 179,870,800
Ltd.
Central Huijin Asset
84,483,000 RMB ordinary stocks 84,483,000
Management Co., Ltd.
Qian Hai Life Insurance Co.,
60,086,861 RMB ordinary stocks 60,086,861
Ltd. – Hai Li Nian Nian
GOLDMAN,SACHS&CO.LL
49,027,500 RMB ordinary stocks 49,027,500
C
Hillhouse Capital
Management–HCM China 43,396,407 RMB ordinary stocks 43,396,407
Fund
China Life Insurance
Company Ltd. – Traditional –
32,357,424 RMB ordinary stocks 32,357,424
General Insurance
Product-005L-CT001 Shen
Description for affiliated
relationship or concerted
action among the top 10
shareholders holding tradable
stocks without trading Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons
restriction conditions and acting in concert. Except for that, the Company does not know whether there is an associated
between the top 10 relationship between the above shareholders or whether they are persons acting in concert.
shareholders holding tradable
stocks without trading
restriction conditions and the
top 10 shareholders
Description of the
participation in margin trading
business of the top 10 None
common shareholders (if any)
(see Note 4)
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.
2. Information of the controlling shareholders of the Company
Nature of controlling shareholder: No controlling entity
Type of the controlling shareholder: No controlling shareholder
Description about the situation that the Company has no controlling shareholder
On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement between Zhuhai
Gree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15% of the
Shares of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI, pursuant to which Gree Group transferred its
902,359,632 held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun.
After the transaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting in
88
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
concert Dong Mingzhu cannot approve the specific proposals with their voting rights on the shares of listed
companies that are actually at their disposal, which are not enough to have a significant impact on the resolutions
of the shareholders' meeting of the listed company, and cannot decide the selection of more than half of the
members of the board of directors of the listed company. Therefore, the listed company has no controlling
shareholders and no actual controllers. For details, see the Instructions on the Reply to the Inquiry Letter of the
Shenzhen Stock Exchange disclosed by the Company at www.cninfo.com.cn on 18 January, 2020.
Controlling shareholder change in the Report Period
√ Applicable □ Not applicable
Name of new controlling shareholder No controlling shareholder
Change date 3 February, 2020
Announcement on the Completion of the Transfer Registration of
the Shares Transferred by the Controlling Shareholder by
Query index at the website specified Agreement and the Change of the Controlling Shareholder and
Actual Controller of the Company disclosed by the Company on
www.cninfo.com.cn
Date of disclosure at the website specified 4 February, 2020
3. Actual controller of the Company and its person acting in concert
Nature of the actual controller: No actual controller
Type of the actual controller: No actual controller
Description about the situation that the Company has no actual controller
On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement between Zhuhai
Gree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15% of the
Shares of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI, pursuant to which Gree Group transferred its
902,359,632 held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun.
After the transaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting in
concert Dong Mingzhu cannot approve the specific proposals with their voting rights on the shares of listed
companies that are actually at their disposal, which are not enough to have a significant impact on the resolutions
of the shareholders' meeting of the listed company, and cannot decide the selection of more than half of the
members of the board of directors of the listed company. Therefore, the listed company has no controlling
shareholders and no actual controllers. For details, see the Instructions on the Reply to the Inquiry Letter of the
Shenzhen Stock Exchange disclosed by the Company at www.cninfo.com.cn on 18 January, 2020.
Particulars on whether there are shareholders with a shareholding ratio of more than 10% at the ultimate
control level of the Company
√ Yes □ No
Legal person
Particulars on shareholding at the ultimate control level
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Legal
Name of shareholder at the Date of
representative/Person Organization code Principal business
ultimate control level establishment
in charge
Business scope recorded in
the agreement: Equity
Zhuhai Xianying
Zhuhai Mingjun Investment investment. (items that need
Equity Investment
Partnership (Limited 11 May, 2017 91440400MA4WJBCR4W to be approved in accordance
Partnership (Limited
Partnership) with law can only be operated
Partnership)
after approval by relevant
departments)
Information regarding equity
of other domestic and oversea
listed companies controlled by
None
the shareholder at the ultimate
control level during the Report
Period
Change in the actual controller in the Report Period
√ Applicable □ Not applicable
Name of the new actual controller None
Change date 3 February, 2020
Announcement on the Completion of the Transfer Registration of the Shares
Transferred by the Controlling Shareholder by Agreement and the Change of the
Query index at the website specified
Controlling Shareholder and Actual Controller of the Company disclosed by the
Company on www.cninfo.com.cn
Date of disclosure at the website specified 4 February, 2020
The actual controller controlled the Company through trust or other asset management modes
□ Applicable √ Not applicable
4. Other corporate shareholders holding more than 10% of shares
□ Applicable √ Not applicable
5. Restricted share reduction of controlling shareholders and actual controllers, restructuring party and
other commitment subjects
□ Applicable √ Not applicable
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section VII Related Information of Preferred Stock
□ Applicable √ Not applicable
The Company did not have any preferred stock in the Report Period.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section VIII Related Information of Convertible Corporate Bonds
□ Applicable √ Not applicable
The Company did not have any convertible corporate bonds in the Report Period.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section IX Directors, Supervisors, Senior Management Personnel
and Employees
I. Shareholding changes of directors, supervisors and senior management personnel
Number Number
Stocks held of held of held
Other
Commenc at the stocks stocks Stocks held
Terminati increase/
Tenure ement of beginning increased reduced at the end of
Name Title Gender Age on of term decrease
status term of of the in the in the the Period
of office changes
office Period current current (shares)
(shares)
(shares) period period
(shares) (shares)
15
Dong Chairperson 25 May,
Incumbent F 66 January, 44,488,492 44,488,492
Mingzhu & President 2012
2022
16 15
Zhang
Director Incumbent M 44 January, January,
Wei
2019 2022
15
Zhang 25 May,
Director Incumbent M 60 January,
Jundu 2012
2022
16 15
Guo
Director Incumbent M 64 January, January,
Shuzhan
2019 2022
16 15
Liu Independent
Incumbent F 68 January, January,
Shuwei Director
2019 2022
16 15
Xing Independent
Incumbent M 58 January, January,
Ziwen Director
2019 2022
16 15
Wang Independent
Incumbent M 59 January, January,
Xiaohua Director
2019 2022
Chairman 2 15
Cheng
of Board of Incumbent F 42 November January,
Min
Supervisors , 2020 2022
Duan Supervisor Incumbent M 57 16 15 795,500 198,800 596,700
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Xiufeng January, January,
2019 2022
16 15
Wang Staff
Incumbent F 37 January, January,
Fawen Supervisor
2019 2022
15
Zhuang Vice 25 May,
Incumbent M 56 January, 5,955,202 5,955,202
Pei President 2012
2022
31 15
Tan Vice
Incumbent M 56 August, January, 1,297,300 1,297,300
Jianming President
2017 2022
Vice
26 15
Deng President &
Incumbent M 45 December January,
Xiaobo Board
, 2020 2022
Secretary
26 15
Vice
Shu Lizhi Incumbent M 51 December January,
President
, 2020 2022
15
Liao Finance 6 August,
Incumbent M 47 January,
Jianxiong Chief 2020
2022
19
Huang Director 25 May,
Resigned M 57 February, 7,380,000 7,380,000
Hui and CEO 2012
2021
Director,
Vice
President,
Wang Chief 25 May, 17 August,
Resigned M 50 884,674 884,674
Jingdong Financial 2012 2020
Officer,
Board
Secretary
Chairman 16 2
Li
of Board of Resigned M 51 January, November
Xupeng
Supervisors 2019 , 2020
Total -- -- -- -- -- -- 60,801,168 0 198,800 60,602,368
II. Changes in the directors, supervisors and senior management personnel
√ Applicable □ Not applicable
94
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Name Title Type Date Reason
Wang Jingdong Finance Chief Disengagement 6 August, 2020 Internal job transfer
Director, Vice
Wang Jingdong President, Board Resigned 17 August, 2020 Resignation due to personal reasons
Secretary
Chairman of Board of
Li Xupeng Resigned 2 November, 2020 Resignation due to personal reasons
Supervisors
III. Positions of directors, supervisors and senior management personnel
Professional background, major work experience and current main responsibilities in the Company of the current
directors, supervisors and senior management personnel of the Company
Ms. Dong Mingzhu, with a master degree, currently acts as the Chairperson of the Board & President of Gree
Electric Appliances, Inc. of Zhuhai.
She has served as salesman, Vice Director and Director of Sales Department, Vice General Manager, Vice
Chairperson of the board and President of Gree Electric Appliances, etc.
She consecutively served as deputy to the tenth, eleventh, twelfth and thirteenth National People's Congresses, and
ever acted as a member of the tenth, eleventh and twelfth Executive Committees of the All-China Women's
Federation, the "Messenger of UN Sustainable Urban Development" of the United Nations, the first rotating
presidency of the "Sustainable Development Commission" of the United Nations Development Programme, vice
president of the China Quality Association, vice chairperson of China Association of Women Entrepreneurs,
member of Expert Committee for the thirteenth five-year development planning of the National Development and
Reform Commission, director of Board of Directors of China Social Economic Investigation Research Center,
member of WFEO-CHINA of China Association for Science and Technology, etc. She has been successively
appointed as a part-time professor or MBA tutor by Northwest University, Sun Yat-sen University, China
University of Science and Technology, Zhongnan University of Economics and Law, Communication University
of China and other colleges, and was awarded the title of honorary academician by Beijing Normal
University-Hong Kong Baptist University United International College (UIC). She was awarded the title of
"National Labor Model" by the State Council in 2015, elected as "CCTV China Economic Person of the Year" in
2006, 2010 and 2013, selected as "The Most Influential Women in Business" by the Fortune magazine for 14
times from 2004 to 2019, ranked in the ranking list of "Top 50 Women to Watch" of Financial Times for three
consecutive years from 2009 to 2011, was enrolled in the ranking list of "Global Best CEO" of the "Harvard
Business Review" magazine in 2013, becoming China's only female on the list.
Mr. Zhang Wei, with a bachelor degree, currently acts as the Director of Gree Electric Appliances, Inc. of Zhuhai.
He joined in Gree Electric Appliances in 1999 and served as the person in charge of Gree Electric Appliances Pipe
Branch, Material Supply Department, Outsourcing & Purchase Quality Management Department, and Enterprise
Management Department, and President Assistant of Gree Electric Appliances; from 2013 to 2017, he served as
Executive Deputy President of Gree Group; from 2017 to March 2020, he served as Vice President of Party
Affairs of Gree Group; from April 2020 to October 2020, he served as the President Assistant of the Company;
currently he serves as the Secretary of the Party Committee of the Company.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Mr. Zhang Jundu, with a junior college degree, currently acts as the Director of Gree Electric Appliances, Inc. of
Zhuhai.
Since September 1999, he has served as chairman of Zhejiang Tongcheng Gree Electric Appliances Co., Ltd.
Since August 2012, he has concurrently served as general manager of Zhejiang Shengshi Xinxing Gree Trading
Co., Ltd. Since May 2012, he has served as director of the Company.
Mr. Guo Shuzhan, with a junior college degree, currently acts as the Director of Gree Electric Appliances, Inc. of
Zhuhai.
Since August 2006, he has been served as Chairman of Jinghai Internet Technology Development Co., Ltd.; Since
August 2012, he has been served as General Manager of Henan Shengshi Xinxing Gree Trading Co., Ltd.; from
May 2012 to January 2019, he served as the Supervisor of the Company; since January 2019, he has been served
as the Director of the Company.
Ms. Liu Shuwei, with a master degree, currently acts as the Independent Director of Gree Electric Appliances, Inc.
of Zhuhai.
Ms. Liu Shuwei graduated from Peking University in 1986 with a master degree in economics. Ms. Liu studies
under the famous economists Chen Daisun Professor and Li Yining Professor in China, and is a well-known
scholar in finance. In 2002, she was appraised as CCTV's "Economic Person of the Year" and "Moving China -
Person of 2002". She is currently an Independent Director of Vanke Enterprise Co., Ltd., an Independent Director
of Henan Costar Group Co., Ltd., and a director and a researcher at the China Enterprise Research Center of
Central University of Finance and Economics. Since January 2019, she has been an independent director of the
Company.
Mr. Xing Ziwen, with a doctor degree, currently acts as the Independent Director of Gree Electric Appliances, Inc.
of Zhuhai.
He is also a professor of Xi'an Jiaotong University, a distinguished professor of the Yangtze River Scholar
Program by the Ministry of Education, a national candidate for the Ten Million Talents Project in the New Century,
and enjoys special allowances from the State Council. Professor Xing Ziwen used to be the director of the
Department of Refrigeration and Cryogenic Engineering, School of Energy and Power Engineering, and the
director of the Compressor Research Institute at Xi'an Jiaotong University. He currently acts as the deputy director
of the National Engineering Center for Fluid Machinery and Compressors at Xi'an Jiaotong University. He has
won 2 national scientific and technological progress awards, 7 provincial and ministerial scientific and
technological progress awards, the Special Science and Technology Progress Award issued by the Chinese
Association of Refrigeration, the Special Invention and Entrepreneurship Award issued by the China Association
of Inventions, the Outstanding Professor Award issued by the Xia Anshi Education Foundation, and the Youth
Innovation Award issued by Ho Leung Ho Lee Foundation.
Mr. Wang Xiaohua, with a master degree, currently acts as the Independent Director of Gree Electric Appliances,
Inc. of Zhuhai.
Mr. Wang Xiaohua is the director of Guangdong Guangxin Junda Law Firm. He has successively studied law at
the Central University for Nationalities, Peking University, Wuhan University, Japan Faith Corporation and the
University of East London. In 2003, he obtained a master degree in law from the University of East London. Since
1988, he has been working as a part-time lawyer, sponsoring and leading a team to jointly handle over 1,000
litigation and non-litigation cases and projects, and assisting companies to raise tens of billions of yuan from
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
domestic and foreign securities markets. Since 1998, he has been a member of Guangdong Provincial Committee
of Chinese People's Political Consultative Conference (CPPCC) and has submitted about 50 proposals. He has
published four books such as Legal Issues on Enterprise Listing and more than 20 articles such as the rise and fall
of the nation concerns everyone and the progress of rule of law concerns every lawyer. He once served as the
president of the Guangzhou Lawyers Association, and currently serves as a standing committee of Guangdong
Provincial Committee of the CPPCC, a member of the Guangdong Provincial Election Committee for Judges and
Procurators, the legal consulting expert of the Guangzhou Municipal People's Government, and the legal
consultant at the Security Bureau of the Guangdong Provincial Committee of the CCP, Guangdong Provincial
Public Security Department (GDPSD) and Guangdong Provincial Tax Service, State Taxation Administration. He
also served as the Guangzhou Asian Games Torch-Bearer; and won the honorary titles such as "Outstanding
Lawyers of Guangdong Province", "Top Ten Innovation Leading Talents of Tianhe District", and "Guangzhou
Leading Talents of Innovation and Entrepreneurship Services".
Ms. Cheng Min, with a bachelor degree, currently acts as the Supervisor of Gree Electric Appliances, Inc. of
Zhuhai.
Ms. Cheng Min is currently President Assistant and Board Secretary of Zhuhai Gree Group Co., Ltd., and the
Chairman and General Manager of Zhuhai Gexin Development Co., Ltd. She has served as the director of the
Overall Planning Department of Zhuhai Convention and Exhibition Bureau, a member of the Party Group of
Zhuhai Convention and Exhibition Bureau, and the office director of Zhuhai Gree Group Co., Ltd.
Mr. Duan Xiufeng, currently acts as the Supervisor of Gree Electric Appliances, Inc. of Zhuhai.
Graduated from Shandong Party School in 1999, he has successively served as the Deputy General Manager and
the General Manager of Shandong Gree Electric Appliances Marketing Co., Ltd. and the General Manager of
Shandong Shengshi Xinxing Gree Trading Co., Ltd. Since January 2019, he has been the Supervisor of the
Company.
Ms. Wang Fawen, with a master degree, currently acts as the Employee Supervisor of Gree Electric Appliances,
Inc. of Zhuhai.
She has the national vocational qualification certificates such as Intermediate Economist and Professional in
Human Resources. From 2007 to 2019, she successively served as the human resources specialist of Human
Resources Department, the director of Personnel Integration Office, the head of Performance Section, and the
head of Training Section, the assistant to the director of Training Department, and the director of Human
Resources and Training Department of the Company; from February 2019 to the present, she has been serving as
the vice director of Human Resources Department of the Company.
Mr. Zhuang Pei, with a master degree and the title of Engineer, currently acts as the Vice President of Gree
Electric Appliances, Inc. of Zhuhai.
From 2002 to April 2003, he served as President Assistant of the Company. From April 2003 up to now, he has
served as vice president of the Company.
Mr. Tan Jianming, with a master degree, currently acts as the Chief Engineer and Vice President of Gree Electric
Appliances, Inc. of Zhuhai.
He studied the major of refrigeration and low temperature technology of Huazhong University of Science and
Technology from 1982 to 1986 and received the Bachelor's Degree; from 1986 to 1989, he continued to study at
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
the major of refrigeration and low temperature technology of Huazhong University of Science and Technology
and received a master's degree, after graduation in 1989, he joined Gree Electric Appliances, Inc. of Zhuhai
immediately and successively served as designer, department head, President Assistant, Deputy Chief Engineer,
etc. Since August 2017, he has served as a Chief Engineer & Vice President of the Company.
Mr. Deng Xiaobo, with a bachelor degree, currently acts as the Vice President & Board Secretary of Gree Electric
Appliances, Inc. of Zhuhai.
From July 2015 to November 2020, he served as the Chairman of Shanxi Coal and Chemical Industry Group
Finance Co., Ltd. In November 2020, he joined GREE Electric Appliances, Inc. of Zhuhai. Since December 2020,
he has served as the Vice President & Board Secretary of the Company.
Mr. Shu Lizhi, with a master degree, currently acts as the Vice President of Gree Electric Appliances, Inc. of
Zhuhai.
He served as the deputy director and the director of Wuhan Special Commission Office of the National Audit
Office of the People's Republic of China; in December 2019, he joined GREE Electric Appliances, Inc. of Zhuhai.
Since December 2020, he has been serving as the Vice President of the Company.
Mr. Liao Jianxiong, currently acts as the Finance Chief of Gree Electric Appliances, Inc. of Zhuhai.
He joined in Gree Electric Appliances in May 1993 and successively served as the head of the Financial
Department of Gree (Chongqing) Electric Appliances Co., Ltd., the head of the Financial Department, and the
President Assistant & head of the Financial Department of Gree Electric Appliances, Inc. of Zhuhai. Since August
2020, he has been serving as the Finance Chief, President Assistant & head of the Financial Department of the
Company.
Information of positions in shareholders
√ Applicable □ Not applicable
Remuneration and
Name of Position at the Commencement of Termination of allowance received
Name of shareholder
incumbent shareholder term of office term of office from the
shareholder
President Assistant &
Cheng Min Zhuhai Gree Group Co., Ltd. 1 August, 2017 Yes
Board Secretary
Jinghai Internet Technology Chairman and legal
Guo Shuzhan 1 August, 2006 No
Development Co., Ltd. representative
Information of positions in other companies
√ Applicable □ Not applicable
Remuneration and
Name of Position at other Commencement Termination of
Names of other companies allowance received from
incumbent companies of term of office term of office
other companies
Zhuhai Gezhen Investment
Dong 26 September,
Management Partnership (Limited Executive Partner No
Mingzhu 2019
Partnership)
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Dong Zhuhai Xima Pearl New Media Director and 1 October,
No
Mingzhu Co., Ltd. Manager 2015
Dong Zhuhai Yinlong New Energy Co., 1 February,
Director No
Mingzhu Ltd. 2017
Guo Beijing Qianyuan Hengjiuhe
Director 25 April, 2014 No
Shuzhan Liquor Co., Ltd.
Guo Xiahe Hengsheng Hydropower
Director 1 May, 2007 No
Shuzhan Co., Ltd.
Guo Henan Shengshi Xinxing Gree
Executive Director 1 August, 2010 Yes
Shuzhan Trading Co., Ltd.
Executive Director
Guo Henan Gree Electric Appliances
and General 1 August, 2006 No
Shuzhan Customer Service Co., Ltd.
Manager
Executive Director
Guo Luoyang Gree Electric Appliances
and General 1 June, 2010 No
Shuzhan Logistics Co., Ltd.
Manager
Guo Henan Huizhong Yifeng 1 December,
Chairperson No
Shuzhan Electronic Commerce Co., Ltd. 2015
Guo Xiahe Hengfa Hydropower Co.,
Director 1 June, 2005 No
Shuzhan Ltd.
Zhengzhou Hengzhixin Metal Executive Director
Guo
Component Manufacturing Co., and General 1 March, 2017 No
Shuzhan
Ltd. Manager
Zhang Zhejiang Tongcheng Gree Electric 1 September,
Chairperson No
Jundu Appliances Co., Ltd. 1999
Zhang Ningbo Tongcheng Gree Electric
Director 1 July, 2013 No
Jundu Appliances Co., Ltd.
Executive Director
Zhang Zhejiang Shengshi Xinxing Gree
and General 1 January, 2017 Yes
Jundu Trading Co., Ltd.
Manager
Zhang Zhejiang Ruitong Automobile Co., 1 December,
Director No
Jundu Ltd. 2014
Zhang Wenzhou Tongcheng Economic
Director 1 April, 2012 No
Jundu and Trade Co., Ltd.
Zhang Huzhou Tongcheng Gree Electric 1 November,
Director No
Jundu Appliances Co., Ltd. 2008
Liu Independent
China Vanke Co., Ltd. 30 June, 2017 29 June, 2023 Yes
Shuwei Director
Liu Costar Group Co., Ltd. Independent 10 April, 2019 10 April, 2022 Yes
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shuwei Director
Wang
ETR Law Firm Partner Chairman 1 June, 2017 Yes
Xiaohua
Wang Guangzhou Nansha Reclamation 1 October,
External Director Yes
Xiaohua Development Ltd. 2015
Wang Guangdong Guangxin Information Independent
1 July, 2014 Yes
Xiaohua Industry Co., Ltd. Director
Wang Guangdong Shirong Zhaoye Co., Independent
26 March, 2019 26 March, 2022 Yes
Xiaohua Ltd. Director
Duan Beijing Detai Hengrun Investment
Manager 3 July, 2014 No
Xiufeng Co., Ltd.
Duan Beijing Rongzhi Xingwei
Manager 2 July, 2013 No
Xiufeng Management Consulting Co., Ltd.
Executive Director
Duan Shandong Jierui Logistics Co., 11 August,
and General Yes
Xiufeng Ltd. 2010
Manager
Duan Shandong Shengshi Xinxing Gree
Manager 30 June, 2011 No
Xiufeng Trading Co., Ltd.
Duan Jinan Qihui Microfinance Co., 4 February,
Director No
Xiufeng Ltd. 2009
Shandong Gree Electric Executive Director
Duan
Appliances Customer Service Co., and General 2 August, 2012 No
Xiufeng
Ltd. Manager
Duan Shandong Binzhou Dongsheng
Executive Director 26 June, 2009 No
Xiufeng Real Estate Co., Ltd.
Shandong Blue Economy
Duan 5 November,
Industrial Fund Management Co., Chairperson No
Xiufeng 2014
Ltd.
Duan Shandong Youbu Network 27 October,
Executive Director No
Xiufeng Technology Co., Ltd. 2015
Executive Director
Duan Jinan Jierui New Energy 21 December,
and General No
Xiufeng Technology Co., Ltd. 2016
Manager
Executive Director
Duan Shandong Red April Brand
and General 1 August, 2017 No
Xiufeng Management Co., Ltd.
Manager
Executive Director
Duan Shandong Red April E-commerce 30 August, No
and General
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Xiufeng Co., Ltd. Manager 2017
Duan Zhongfu Huaxia Management 23 December,
Chairperson No
Xiufeng Consulting Co., Ltd. 2005
Duan Shandong Red April Holdings Executive Director
5 May, 2015 No
Xiufeng Group Co., Ltd. and Manager
Executive Director
Duan Shandong Red April Venture
and General 24 April, 2017 No
Xiufeng Capital Co., Ltd.
Manager
Duan Shandong Red April New Energy Executive Director 13 December,
No
Xiufeng Technology Co., Ltd. and Manager 2017
Punishments given by the securities regulatory institution to the incumbent directors, supervisors and senior management personnel
or those who resigned in the Report Period in the recent three years
□ Applicable √ Not applicable
IV. Remunerations of the directors, supervisors and senior management personnel
Decision making procedures, determination basis, and actual payment regarding the remunerations of directors, supervisors and
senior management personnel
Within the Report Period, the Board of Directors of the Company conducted the performance review of the
achievements and performance of duties of the senior management personnel and implemented the assignment
assessment system regarding the working results in ethic, competence, diligence and achievement. The Company
adhered to the principle of rationality, fairness and justice and laid emphasis on combination of material incentive
and spiritual incentive. As for the material incentive, the Company paid attention to reasonably controlling reward
grade and properly opening the reward gap and emphasized the time and frequency of reward. As for the spiritual
incentive, the Company paid attention to combining the corporate objectives with the spirit of dedication, sense of
social responsibility and career achievement of the senior management personnel.
Remunerations of the directors, supervisors and senior management personnel in the Report Period
Unit: RMB 10,000
Total amount of pre-tax Remuneration received from
Tenure
Name Title Gender Age remuneration received a related party of the
status
from the Company Company
Dong
Chairperson & President F 66 Incumbent 915 No
Mingzhu
Zhang
Director M 60 Incumbent Yes
Jundu
Guo
Director M 64 Incumbent Yes
Shuzhan
Zhang Wei Director M 44 Incumbent 19.25 No
Liu Independent Director F 68 Incumbent 15 Yes
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shuwei
Wang
Independent Director M 59 Incumbent 15 Yes
Xiaohua
Xing
Independent Director M 58 Incumbent 15 Yes
Ziwen
Cheng
Supervisor F 40 Incumbent Yes
Min
Duan
Supervisor M 57 Incumbent Yes
Xiufeng
Wang
Staff Supervisor F 37 Incumbent 100.65 No
Fawen
Zhuang
Vice President M 56 Incumbent 230 No
Pei
Tan
Vice President M 56 Incumbent 330 No
Jianming
Deng Vice President & Board
M 45 Incumbent 3.2 No
Xiaobo Secretary
Shu Lizhi Vice President M 51 Incumbent 10.42 No
Liao
Finance Chief M 47 Incumbent 124.97 No
Jianxiong
Huang
Director and CEO M 57 Resigned 375 No
Hui
Director, Vice President, Chief
Wang
Financial Officer, Board M 50 Resigned 17.7 No
Jingdong
Secretary
Li Xupeng Supervisor M 51 Resigned Yes
Total -- -- -- -- 2,171.19 --
Equity incentives granted to the directors and senior management personnel in the Report Period
□ Applicable √ Not applicable
V. Employees of the Company
1. Number of employees and their specialties and education level
Number (person) of on-the-job employees of the parent company 25,729
Number (person) of on-the-job employees of the main
58,223
subsidiaries
Total number (person) of on-the-job employees 83,952
Total number (person) of employees receiving salaries in the 83,952
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
current period
Number (person) of retired employees for whom the parent
368
company and main subsidiaries need to bear expenses
Formation of Specialties
Category of formation of specialties Number (person) of employees in the formation
Manufacturing Personnel 62,192
Sales Personnel 2,659
Technicians 14,458
Financial Personnel 1,007
Administrative Personnel 3,636
Total 83,952
Education Level
Education level category Number (person) of employees
Bachelor Degree or above 18,023
College Degree 12,455
Technical Secondary School Education and below 53,474
Total 83,952
2. Remuneration policy
The Company implements a comprehensive remuneration management system, adopts a remuneration mechanism
combining fixed salary and floating performance salary, and upholds the concept of remuneration payment
according to the position, capacity and performance of the employees, which reflects the value of positions,
ensures internal fairness, attaches importance to per capita efficiency enhancement, and realizes the dual balance
of enterprise and employee development. During the 2020 epidemic, adhering to the concept of equally protecting
the legitimate rights and interests of employees, the Company formulated the remuneration payment policy in a
timely manner in accordance with national laws and regulations and the Company's operating situation to ensure
the orderly, accurate and timely payment of salaries to employees, performed the planned, organized and orderly
resumption of work and production, maintained harmonious labor relations, and demonstrated corporate social
responsibility. At the same time, for constant changes in the market environment and huge uncertainties, the
Company strengthened its sales strategy orientation for all employees, formulated the special sales incentive
policy, and encouraged employees to further enhance their confidence and morale in product sales, extensively
explored the market of home appliances, fully excavated sales channels, and strove for better sales performance.
In addition, the Company continued to pump money into scientific and technological personnel and R&D
technological breakthroughs, gave full play to the guiding and incentive role of scientific and technological
rewards in innovation development and talent gathering, and provided solid support for the vast number of
scientific and technological R&D personnel to accelerate the pace of innovation.
3. Training plan
In 2020, the Company continued to increase independent training of innovative talents, deepened core business
support, built smart learning organizations, created an enabling ecosystem for vocational education, accelerated
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the supply of talents for the transformation of innovative achievements, and promoted high-quality development
of the Company.
(I) Increasing independent training of innovative talents
Talent is the key to innovation. The Company has always adhered to the principle of "focusing on the strategic
layout of the Company and adhering to independent training of talents", mastered the initiative of talent training,
built a diversified independent training mechanism by setting up a training system independently, strengthened the
training of innovative talents and realized the supply of high quality talents.
1) Independently training innovative scientific and technological talents
The key to enhancing the independent innovation capability of an enterprise lies in training innovative scientific
and technological talents. Campus recruitment is the main channel for the Company to introduce talents.
According to the growth path of technical R&D personnel, the Company created the unique "6-1-3" training mode
for college students by using "centralized training, project practice and mentor guidance" as the main method to
achieve the rapid evolution of innovative talents and provide the Company with a steady stream of innovations. In
2020, the Group completed the induction training for nearly 5,000 college students and expanded the team of
scientific research talent talents.
The special manufacturing practice technical training was conducted to realize the continuous and deep training of
technical talents and promote the development of employees towards professional talents in high, sophisticated
and cutting-edge fields. In 2020, the Company organized and carried out expert lectures on the cutting-edge
technology of 22 topics in 12 series, such as smart manufacturing and smart home, to improve the technical level
of technical R&D personnel. In the past three years, the Company has carried out more than 350 professional
technical trainings, with the total number of more than 25,000 participants.
Gree's talent team has been growing and its talent structure has been upgraded over the years. By the end of 2020,
the Company had about 84,000 employees, including 2 leading talents in science and technology innovation under
the National Ten Thousand Talents Program, 3 experts enjoying special allowances from the State Council, 1
winner of the Award of Outstanding Contribution to Nanyue, 1 Outstanding Talent under the Guangdong Special
Support Program, and 80 high-level talents of Zhuhai, 448 outstanding young talents, 710 scientific and
technological experts evaluated inside the Company, and more than 7,500 intermediate and senior engineers. The
Company adhered to the continuous cultivation of innovative talents, so that it has the ability to independently
innovate to cope with the ever-changing external environment. Through the cultivation and guarantee of scientific
and technological talents, the Company promoted independent scientific and technological innovation and strove
to build Gree into a world research and development center for manufacturing.
2) Cultivating skilled craftsmen for precision manufacturing
In order to adapt to the transformation of the production model to automation and intelligence, the Company
accelerates the training of applied-skilled talents. In 2020, the Company continued to promote the "skill upgrade
and academic qualification upgrade" plan by organizing and performing the training of more than 6,500 skilled
workers throughout the year and completing the training of nearly 200 people to upgrade their academic
qualifications. The Company deepened the "2+2" standardization training mode for front-line new employees by
completing the entry and induction training for new employees.
The Company vigorously promoted the spirit of model workers and craftsmen in the new era, and made full use of
the resource advantages of Guangdong technicians, skilled master studios, and technician workstations to deepen
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
the Company's high-skilled personnel training mechanism. "Huang Guojun National Mold Technician Studio" was
established and 3 new technician studios were newly built. Laboratory testing, pressure vessel welding,
air-conditioning after-sales technician workstations were newly built. The Company prepared to build a national
high-skilled talent training base and established a skilled talent training platform to drive the training of
high-skilled talents.
Internal and external resources were adopted to organize and carry out trainings such as "targeted trainings of
enterprise vocational skills, competitions for vocational skills, new apprenticeship mechanism, right position
training and skill upgrade" to broaden the skills training channels and forms and build the collaborative mode for
training of high-skilled new talents. The Company organized the 2020 labor skill competition called "Build
Dreams with Originality", dug "Gree Top 300 Skilled Workers", expanded the "reservoir" of skilled talents,
selected and cultivated a group of "high-tech and cutting-edge" skilled talents, and delivered more talents with
outstanding skills to various talent selection projects at the provincial and municipal levels.
Up to now, the Group has 36,000 skilled talents, of which more than 8,000 are rated as intermediate and senior
technicians, 7 have won the title of "Guangdong Provincial Technical Expert", 1 has won the title of "Nanyue
Technical Expert", and 5 have won the title of "Zhuhai Municipal Technical Expert", 4 "Zhuhai Municipal Post
Technical Expert Pacesetter", 6 "Zhuhai Municipal Chief Technical Expert", 6 "Zhuhai Municipal Chief Technical
Expert", and 133 "Zhuhai Special Artisan".
3) Building young management cadres
The Company strove to establish a team of cadres who are passionate, capable, entrepreneurial and ambitious. In
2020, the Company organized and carried out the advanced-form training program for newly appointed cadres to
improve the ability of management cadres. The Company also organized and carried out the "Special Training
Camp of Supervisor Elites" and the "Pilot School of Team Leaders" to select, reserve and cultivate more than 700
grassroots management personnel. In order to strengthen the reserve and training of young talents, the Company
organized and carried out the "2020 Development Plan of Talents with High Potential and Quality" to train more
than 500 company-level personnel and more than 5,500 unit personnel, adding more talents to the development of
the Company.
The Company strengthened the ideological education and military sports training of its middle-level management
cadres by organizing and carrying out the first "Pioneer" training camp for middle-level management cadres. The
training camp thoroughly implemented the general secretary's guiding ideologies for the cadres, and made cadres
learn the spirit of the soldiers who are willing to endure hardships and fight through military trainings. Through a
series of activities such as "Discussion on International Situation", "Policy Sharing and Interpretation", and
"Education on Honesty and Integrity", the ideological awareness and comprehensive ability of cadres were
improved and the cohesion and centripetal force of Gree people were further enhanced.
(II) Deepening core business support for the Company
According to the Company's annual development goals, focusing on the important areas and topics of the
Company's strategic development, nearly 80 learning projects such as technology and R&D support topics, key
thematic training camps, operation management training topics, etc. were organized and implemented, to
comprehensively connect strategy and performance, and support the innovation development of core business.
1) Strongly focusing on the core business of the corporate strategy
In 2020, the training strongly focused on the Company's development plan and strategic goals to deepen learning,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
and special trainings such as Gree mode, Gree perfect quality mode and Gree product online marketing were
organized and carried out. The incubation trainings for emerging businesses such as freezing and refrigeration
technology, washing technology, and intelligent manufacturing were performed to support the implementation of
the corporate strategy. Throughout the year, more than 120 business trainings were carried out in the field of
technology R & D, training more than 8,000 persons. Production trainings on lean production, on-site
management, logistics technology and equipment maintenance were organized and carried out, which not only
reserved a group of specialized talents in the production field, but also strengthened the practice transformation of
training projects to promote the implementation of a series of production management projects.
2) Strengthening enterprise management and operation support
In the field of management and operation, oriented to the needs of staff development and position promotion, the
Company solidly carried out special talent training camps such as human resources, process quality, financial
management and operation support to meet the needs of the cultivation requirement of various talents for strategic
development of the Company. The Company organized and carried out the 2020 special training camp of project
management talents, and carried out the project manager qualification certification for the first time in which
finally more than 100 trainees completed the courses and obtained the qualifications. The Company also organized
and carried out quality management training camps, completing the quality management system training, Six
Sigma training, reliability engineer training, FMEA training, QC team training, quality manager and other special
quality personnel trainings, and reserving and training more than 500 professional quality management personnel.
3) Supporting and serving first-line market sales
Closely following the company's "new retail" marketing innovation model, the Company built a team of
marketing talents of "Gree Features". The special training on product knowledge of "Product
Empowerment Helping Sales" was performed to all employees, with a total of more than 10,000 trainees. 12
special trainings on marketing topics such as user research and sales skills were organized and carried out, with a
total of more than 25,000 trainees, to further help employees understand product knowledge, facilitate marketing
service personnel to improve their skills, and better support first-line market sales and services.
(III) Building a digital and intelligent learning organization
Combining the characteristics of its talent training, the Company independently built a team of internal lecturers
and developed practical teaching courses, to realize the extraction and inheritance of internal experience. The
Company innovated learning methods, established a learning culture and mechanism for all employees, and
created a unique learning organization.
1) Creating high-quality lecturers
Internal lecturers are the core force that inherits Gree's excellent corporate culture and wisdom. In order to create
high-quality lecturers and ensure that everyone is a lecturer, the Company organized and implemented the
"Intelligent Manufacturing Inheritance" lecturer development plan to continuously provide high-level and
high-quality lecturers for the independent training of corporate talents. Up to now, there are more than 200
part-time lecturers and 320 quality courses in the Company's headquarters. In 2020, internal lecturers gave more
than 1,200 lessons, with the trainee satisfaction degree of 96%, providing an important guarantee for the training
of talents at all levels of the Company.
In the 2020 Enterprise Trainer Vocational Skills Competition in Guangdong, the Company's internal lecturers Liu
Fei and Wang Shengli achieved excellent results and won the honorary title of "Guangdong Provincial Technical
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Expert", demonstrating the excellent skills and demeanor of Gree lecturers.
2) Emphasizing the extraction and inheritance of Gree experience
In order to inherit Gree's practical experience in enterprise production, operation and management, the Company
built an internal knowledge and information sharing system, and steadily promoted the extraction and inheritance
of internal experience. The Company organized and carried out learning programs called "Middle-level cadres on
the platform - Micro classroom for managerial cadres", "Technology experts on the platform - Auditorium for
technology experts", "Skill elites on the platform - Auditorium for skilled craftsmen" and "Business elites on the
platform - Auditorium for internal lecturers", to better inherit Gree experience and propagate Gree culture. In 2020,
the Company organized and carried out more than 120 experience extraction activities, attracting more than 8,000
trainees.
3) Innovating training methods to create a learning atmosphere for all employees
The Company innovated training methods to promote the precipitation and co-creation and sharing of learning
resources. It actively responded to the impact of the epidemic by steadily promoting online training. It organized
and carried out the fight against the "epidemic" and online education, with a total of 25,000 trainees. It organized
and carried out the online auditorium for "Space Empowerment Boosting Development", attracting 5,000
participants. It organized and carried out the micro-course competition called "Gathering MicroCo-Creation",
accumulating 500 high-quality micro-courses close to the first-line business.
(IV) Creating an enabling ecosystem for vocational education
In terms of talent training, Gree actively explored the deepening reform of national vocational education, and built
and created a collaborative and open highland for training manufacturing talents.
1) Building a vocational education ecosystem
The Company made full use of the national, provincial and municipal policy advantages to build a new
manufacturing talent training alliance. The Company undertook 18 provincial and municipal skill competition
projects, built a multi-level skill competition echelon through open and standardized development, and explored
the establishment of a progressive vocational skill competition mechanism. Technician studios and technician
workstations were built, and a standard and evaluation system for cultivating skilled talents was created to
promote the implementation of manufacturing talent training. The Company prepared to build a national training
base for high-skilled talents, created a benchmark for industry-education integration in Guangdong, organized and
carried out the reemployment training for Guangdong provincial labor unions, promoted the upgrading of industry
technical skills, and build a talent training base for the entire industry chain and the whole industry.
2) Creating a benchmark for vocational education
In 2020, with the care and help of people from the country, provinces and cities, and people from all walks of life,
Chairman Dong Mingzhu personally deployed, implemented and promoted the construction of Gree College. Gree
College is planned and designed with the advanced campus construction concept, which fully integrates Gree
culture and green design to create a digital and smart university building community. The construction of the
college will officially start in early 2021.
The College is located in Tangjiawan Town, Zhuhai High-tech Zone, covering an area of 200,000 square meters,
adjacent to the "University Town" cluster area of Zhuhai universities and close to Huitong Ancient Village. It has a
strong cultural atmosphere and a unique regional environment. The 2021 Government Work Report pointed out
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
that it is necessary to enhance the adaptability of vocational education, deepen industry-education integration and
school-enterprise cooperation. The construction of Gree College will further deepen the exploration of the
education mechanism of "vocational-universal integration, industry-education integration, and school-enterprise
cooperation", train talents needed for the development of the new manufacturing industry for Gree and the country,
and promote industrial transformation and innovative development of the real economy.
4. Labor outsourcing
□ Applicable √ Not applicable
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section X Corporate Governance
I. Basic conditions of corporate governance
In strict accordance with the Company Law, Securities Law and other relevant national laws and regulations and
the Guidelines for Standardized Operation of Companies Listed on the Main Board of Shenzhen Stock Exchange,
the Company establishes the normative corporate governance structure and the rules of procedure for the General
Meeting of Shareholders, Board of Directors and Board of Supervisors, clarifies the responsibilities and
authorities in decision-making, performance and supervision, forms effective division of responsibilities and
balance mechanism, continuously promotes the level of normal operation and safeguards the interests of investors
and the Company.
The corporate governance conforms to the Company Law and requirements of CSRC for governance of listed
companies.
Great differences exist between the actual corporate governance and the normative document related to listed company governance
published by the CSRC
□ Yes √ No
No great differences exist between the actual corporate governance and the normative document related to listed company
governance published by the CSRC
II. Independence of the Company relative to the controlling shareholder in the aspects such as
business operation, personnel, assets, organization and finance
The Company has a sound corporate governance structure and completely separates from Zhuhai Mingjun as the
largest shareholder in business operation, personnel, assets, organization and finance, and the Company has
independent and complete business operation and independent management capability.
III. Horizontal competition
□ Applicable √ Not applicable
IV. Convening of the annual general meeting of shareholders and interim general meeting of
shareholders during the Report Period
1. General meetings of shareholders during the Report Period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Proportion of
Type of Date of Date of
Session of meeting participating Disclosure index
meeting meeting disclosure
investors
The first interim Interim The Announcement on Resolutions of the
general meeting of general 17 March, 18 March, First Interim General Meeting of
45.61%
shareholders for the meeting of 2020 2020 Shareholders for the Year 2020 and so on on
year of 2020 shareholders www.cninfo.com.cn
Annual
2019 annual general The Announcement on Resolutions of the
general
meeting of 46.64% 1 June, 2020 2 June, 2020 General Meeting of Shareholders for the Year
meeting of
shareholders 2019 and so on on www.cninfo.com.cn
shareholders
The Second Interim Interim The Announcement on Resolutions of the
General Meeting of general 2 November, 3 November, Second Interim General Meeting of
47.43%
Shareholders for the meeting of 2020 2020 Shareholders for the Year 2020 and so on on
Year 2020 shareholders www.cninfo.com.cn
2. Convening of an interim general meeting of shareholders requested by the preferred shareholders whose
voting rights have been restored
□ Applicable √ Not applicable
V. Performance of duties by independent directors during the Report Period
1. Attendance of independent directors at meetings of the Board of Directors and general meetings of
shareholders
Attendance of independent directors at meetings of the Board of Directors and general meetings of shareholders
Failed to
Number of Times of
personally
meetings of the Times of attending Times of
Times of attend the Times of
Board of attending meetings of the attending
Name of absence from meetings of the attending the
Directors meetings of the Board of meetings of the
independent meetings of the Board of general
requiring Board of Directors in Board of
director Board of Directors for meetings of
attendance in Directors on the way of Directors by
Directors two Shareholders
the Report the field communicatio entrusting
consecutive
Period n
times
Liu Shuwei 10 1 9 0 0 No 3
Xing Ziwen 10 1 9 0 0 No 3
Wang Xiaohua 10 0 10 0 0 No 3
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2. Objection raised by independent directors to relevant issues of the Company
Independent directors raised objection to relevant issues of the Company
□ Yes √ No
The independent directors didn't raise any objection to relevant issues of the Company.
3. Other descriptions for performance of duties by independent directors
Whether the relevant suggestions on the Company by independent directors were adopted
√ Yes □ No
Description about the relevant suggestions on the Company by independent directors that were adopted or not adopted
Within the Report Period, the independent directors of the Company were able to act in maintaining the best
interest of the Company and its shareholders, faithfully perform their own duties in accordance with the relevant
provisions, attend the meetings of the Board of Directors, review and discuss various proposals carefully, fully
express their suggestions and opinions for the operation and management of the Company, play an active role in
making effective decisions, improving management level and standardizing business operations by the Board of
Directors of the Company, and practically safeguarding the interests of minority stock holders.
VI. Performance of duties by special committees under the Board of Directors during the
Report Period
In 2020, the nomination committee nominated two executive candidates to the Company's board of directors after
a thorough investigation.
The remuneration and appraisal committee reviewed and approved the Remuneration Distribution Plan for
Directors, Supervisors and Senior Management Personnel for the Year 2020.
According to the Rules of Procedure of Audit Committee of the Company, the audit committee conducted
communication, supervision and check for internal and external audits of the Company:
a. The audit committee carried out full communications with the accounting firm responsible for the annual audit
of the Company in respect of audit plan, engagement letter and risk and control, etc.
b. Before the annual audit certified public accountants accessed to the site, the audit committee reviewed the
preliminarily prepared financial statements of the Company and held that these statements reflected the present
financial position of the Company in all major aspects.
c. After the annual audit certified public accountants issued preliminary opinions, the audit committee reviewed
the financial statements of the Company, communicated with the accounting firm in respect of material particulars
and significant accounting estimates, audit adjustments and significant accounting policies which might have
potential influence on the financial statements and held that the financial statements of the Company gave a true,
accurate and complete view of the whole position of the Company and agreed to prepare the annual report for the
year 2020 on the basis of these financial statements.
d. The audit committee reviewed the financial statements for the year 2020 which had been audited by the auditors
and held that these financial statements gave a fair view of the financial position of the Company ended 31
December, 2020 and operating results and cash flows for the year 2020 in all major aspects and agreed to submit
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
them to the board of directors for deliberation.
e. The audit committee summarized and evaluated the audit work for this year as done by Union Power CPAs Co.,
Ltd. and held that the annual audit certified public accountants performed their audit work in strict accordance
with the Independent Auditing Standards for Chinese Certified Public Accountants and suggested the Company
re-engage Union Power CPAs Co., Ltd. as the audit institution for the year 2021.
VII. Work of the Board of Supervisors
The Board of Supervisors found whether there are risks in the supervision during the Report Period.
□ Yes √ No
The Board of Supervisors had no objection to the supervision during the Report Period.
VIII. Appraisal and incentive for senior management personnel
Within the Report Period, the Board of Directors of the Company conducted the performance review of the
achievements and performance of duties of the senior management personnel and implemented the assignment
assessment system regarding the working results in ethic, competence, diligence and achievement. The Company
adhered to the principle of rationality, fairness and justice and laid emphasis on combination of material incentive
and spiritual incentive. As for the material incentive, the Company paid attention to reasonably controlling reward
grade and properly opening the reward gap and emphasized the time and frequency of reward. As for the spiritual
incentive, the Company paid attention to combining the corporate objectives with the spirit of dedication, sense of
social responsibility and career achievement of the senior management personnel.
IX. Internal control
1. Details about major defects found in internal control in the Report Period
□ Yes √ No
2. Internal control self-evaluation report
Full disclosure date of the internal control
29 April, 2021
evaluation report
Full disclosure index of the internal control
www.cninfo.com.cn
evaluation report
Proportion of the total amount of unit assets
included in the evaluation scope to the total
97.00%
amount of assets in the consolidated financial
statements of the Company
Proportion of the unit operating income
included in the evaluation scope to the unit
98.00%
operating income in the consolidated financial
statements of the Company
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Defect identification standard
Category Financial report Non-financial report
For details, see the Internal Control For details, see the Internal Control
Self-evaluation Report of Gree Electric Self-evaluation Report of Gree Electric
Qualitative standard Appliances, Inc. of Zhuhai for the Year Appliances, Inc. of Zhuhai for the Year
2020 disclosed on www.cninfo.com.cn by 2020 disclosed on www.cninfo.com.cn
the Company on 29 April, 2021. by the Company on 29 April, 2021.
For details, see the Internal Control For details, see the Internal Control
Self-evaluation Report of Gree Electric Self-evaluation Report of Gree Electric
Quantitative standard Appliances, Inc. of Zhuhai for the Year Appliances, Inc. of Zhuhai for the Year
2020 disclosed on www.cninfo.com.cn by 2020 disclosed on www.cninfo.com.cn
the Company on 29 April, 2021. by the Company on 29 April, 2021.
Number of major defects in the financial
0
report
Number of major defects in the non-financial
0
report
Number of important defects in the financial
0
report
Number of important defects in the
0
non-financial report
X. Internal control audit report
√ Applicable □ Not applicable
Deliberation opinion section in the internal control audit report
We hold that the Company has maintained effective internal control of financial reports in accordance with the Basic Rules for
Internal Control of Enterprises and relevant regulations.
Disclosure of internal control audit report Disclosed
Full disclosure date of the internal control audit report 29 April, 2021
Full disclosure index of the internal control audit report www.cninfo.com.cn
Type of internal control audit report opinions Standard without reserved opinion
Major defects found in the non-financial report No
The accounting firm issued the internal control audit report of non-standard opinions
□ Yes √ No
The internal control audit report issued by the accounting firm is consistent with the self-evaluation report opinion of the Board of
Directors
√ Yes □ No
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section XI Related Information of Corporate Bonds
Whether the Company has any corporate bonds that have been issued publicly and listed on the stock exchange, and have not become
due on the approved submission date of the annual report or have become due but have not been not paid in full.
No
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section XII Financial Report
I. Audit report
Audit opinion type Standard without reserved opinion
Signing date of the audit report 28 April, 2021
Union Power Certified Public Accountants (Special General
Name of the audit institution
Partnership)
Audit Report Doc No. Union Power Audit No. (2021) No. 0500040
Name of the certified public accountant Han Zhenping, Geng Ting
Audit Report
Union Power Audit No. (2021) No. 0500040
All shareholders of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI:
1 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 parent company's balance sheets ended 31
December, 2020 and consolidated and parent company's income statements, consolidated and parent
company's cash flow statements and consolidated and parent company's statements of changes in
shareholders' equity and notes to financial statements for the year 2020.
In our opinion, the accompanying financial statements have been prepared in all material aspects in
accordance with the Accounting Standards for Business Enterprises and fairly reflected the consolidated
and parent company's financial position of your company ended 31 December, 2020 and consolidated and
parent company's operating results and cash flows for the year 2020.
2 Basis for forming audit opinions
We have conducted our audit work according to the provisions of 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 China
Code of Ethics for Certified Public Account, we are independent of your company and performed other
responsibilities in respect of professional ethics. We believe the audit evidences obtained by us are
sufficient and proper and shall provide the basis for expressing our audit opinion.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
3 Key audit items
The key audit items are the items that are deemed to be the most important ones in the current financial
statement audit according to our professional judgment. The response to these items is based on the overall
audit of the financial statements and the formation of audit opinions. We do not give separate opinions on
these items.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(1) Revenue recognition
Key audit items How this item is dealt with in auditing
Refer to the description in "Note III. 28" 1. We understood the internal control of key financial
"Note V. 45" and "Note XV. 4" in the reports related to revenue recognition, and evaluated
financial report. the effectiveness of its design and operation;
In the 2019 and 2020 consolidated financial 2. We asked about the revenue recognition policy
statements of your company, the income from adopted by the management, checked the sales
selling goods was RMB 168,199,204,400 and contract sample, understood the delivery terms of the
RMB 198,153,027,500 respectively, transaction, evaluated whether the business model
representing a year-on-year decrease of was consistent with revenue recognition, evaluated
15.12%. whether the terms of the sales contract comply with
Since the amount is significant and revenue is industry practices, and whether the revenue
one of the key business indicators of your recognition accounting policy meets the requirements
company, and whether it is based on real of the accounting standards for business enterprises;
transactions and whether it is included in the 3. On the basis of audit sampling, we inspected the
appropriate accounting period has a original supporting documents related to revenue
significant impact on the financial statements, recognition, such as orders, delivery orders, and
we consider revenue recognition as a key arrival receipts, to evaluate whether the income
audit matter. actually occurred and whether it was recognized in
accordance with the accounting policies;
4. On the basis of audit sampling, we implemented the
letter verification procedure, and checked the original
documents of the difference in the response letter and
the situation of the payment, in order to evaluate the
accuracy and authenticity of the occurrence amount of
income;
5. We implemented an analysis procedure to analyze
different dimensions such as monthly fluctuations,
sales regions, product categories, and product gross
profit margins to verify the rationality of the
transaction;
6. We carried out a cut-off test procedure and expanded
the scope of post-period inspections to check whether
there was an income inter-period and a sales return to
deal with the income inter-period;
7. We also reviewed the adequacy of the information
disclosure related to revenue recognition in "Note III.
28", "Note V. 45" and "Note XV. 4" in the financial
report.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(2) Related party relationships and transactions
Key audit items How this item is dealt with in auditing
Refer to the description in "Note X 4", "Note 1. We understood, evaluated and tested the internal
X. 5", "Note X. 6" and "Note X. 8" in the control related to the identification and disclosure of
financial report. related party relationships and their transactions, and
In 2020, your company purchased RMB reviewed effectiveness of the corresponding internal
2,593,248,700 of raw materials, fixed assets control design and implementation;
and other products and leased RMB 2. We obtained the management's statement on integrity
8,886,100 of fixed assets from the related of the related party relationships and their
parties, totaling RMB 2,602,134,800; sold transactions, obtained a list of related party
RMB 13,424,451,700 of air conditioners, relationships provided by management, and checked
intelligent equipment and other products and it against the information obtained from other public
leased RMB 131,100 of fixed assets to the channels;
related parties, totaling RMB 3. We checked the major procurement, sales and other
13,424,582,800. contracts to identify whether there was an undisclosed
Because of the significant transaction amount related party, and also obtained the resolution of the
of your company's related party, the related board of directors and the resolution of the
party relationships and integrity of its shareholders' meeting related to the related
transaction disclosure and the fairness of the transaction, checked the permissions and procedure of
related transaction will have a significant the related transaction decision, judged the legality
impact on the business performance and and compliance of related transactions, and checked if
disclosure of information. Therefore, we it was authorized and approved appropriately;
regard the related party relationships and 4. We carried out the sampling inspection procedure,
their transactions as key audit items. checked the corresponding transaction agreement,
delivery order, receipt document, sales invoice,
purchase invoice, sales receipt and purchase payment
voucher, analyzed the purpose of transaction to
determine whether the way of obtaining cash flow of
the two parties before and after the transaction,
amount and risks were substantially changed, and
whether the transaction has commercial substance,
and combined other audit procedures such as letters to
verify authenticity of the related transaction;
5. We compared the sale and purchase prices of the
related party with the sale and purchase prices of
similar products of the non-related parties or the
market prices of similar products, and judged fairness
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Key audit items How this item is dealt with in auditing
of the related transaction price;
6. We expanded the scope of the post-period test
procedure and checked whether there was a sales
return;
7. We also reviewed adequacy of the information
disclosure related to the related relationship and
related transaction in "Note (X) 4", "Note (X) 5",
"Note (X) 6" and "(Note X) 8" in the financial report.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(3) Provision for obsolete stocks
Key audit items How this item is dealt with in auditing
Refer to the description in "Note III. 13", 1. We tested implementation of the internal control
"Note V. 8" and "Note V. 56" in the financial related to confirmation of provision for obsolete
report. stocks;
As of 31 December, 2020, the book value of 2. We evaluated the important judgments, assumptions
inventory in your company's consolidated and estimates involved in calculation of the net
balance sheet was RMB 27,879,505,200, realizable value by management, and also checked the
wherein the book balance of inventory was bases and documents for the management to
RMB 28,376,719,400 and the provision for determine items such as the future selling price of
obsolete stocks was RMB 497,214,200. stock, cost (e.g., the related cost) to be incurred by the
time of completion, selling expenses, and the related
Confirmation of the provision for obsolete
tax amount;
stocks depends on estimation of the net
realizable value of the stock. For 3. We carried out the auditing procedures such as
confirmation of the net realizable value of the checking and recalculation, and particularly we
stock, the management should estimate the recalculated to determine the net realizable value of
future selling price of stock, cost (e.g., the the stock according to the related data;
related cost) to be incurred by the time of
4. We conducted an analytic review of the inventory age
completion, selling expenses, and the related
to determine whether the corresponding provision for
tax amount.
obsolete stocks is adequate;
In consideration of the importance of
5. We conducted supervision of inventory taking. During
confirmation of the stocks and provision for
supervision of inventory taking, we focused on
obsolete stocks to the consolidated financial
authenticity and accuracy of the inventory and use of
statements and the complicated calculation
the inventory, checked for slow moving inventory and
process of provision for obsolete stocks, and
defective inventory so as to evaluate adequacy of the
major judgments, assumptions and estimates
provision for obsolete stocks;
of the management involved when the net
6. We also checked the adequacy of the information
realizable value of the stock is determined,
disclosure related to the provision for obsolete stocks
there may be error or potential management
in "Note III. 13", "Note V. 8" and "Note V. 56" in the
bias. Therefore, we identified it as a key audit
financial report.
item of your company.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
4 Other information
The management of your company is responsible for other information. Other information includes the
information covered in the 2020 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 the 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.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor's report, we conclude that there is a material misstatement of the other information, we are required
to report that fact. We have nothing to report in this regard.
5 Responsibilities of management and those charged with governance for financial statements
The management of your company is responsible for preparing the financial statements in accordance with
the requirements of Accounting Standards to achieve a fair presentation, and for the designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are
free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, the management of your company is responsible for accessing your
company's ability to continue as a going concern, disclosing matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate your company or to cease
operation, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing your company's financial reporting process.
6 Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of 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
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with the audit standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve
collusion, forgery, omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosure made by management of your company.
(IV) Conclude on the appropriateness of using the going concern assumption by the management of your
company, and conclude, based on the audit evidence obtained, whether a material uncertainty exits related
to events or conditions that may cast significant doubt on our company's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosure in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up the date of our auditor's report.
However, future events or conditions may cause your company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosure, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence for the financial information of your company's entity
or business activities so as to express opinions on the financial statements. We are responsible for guiding,
supervising and implementing group audits. We assume full responsibility for the audit opinions.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit matters, including any significant deficiencies in internal
control that we identify during our audit.
We also provide a statement to those charged with governance regarding the observed professional moral
requirements related to independence, and communicate with those charged with governance about all the
relationships and other matters that may be reasonably considered to affect our independence, as well as the
related countermeasures (if applicable).
In the matters we communicated with those charged with governance, we determine the matters that are
most important to audit of the current period financial statements, thus constituting key audit matters. We
describe these matters in the audit report, unless laws and regulations prohibit public disclosure of these
matters, or, in a few cases, we confirm that the matter should not be communicated in the audit report if it is
reasonably anticipated that the negative consequence caused by communicating a matter in the audit report
exceeds the benefit generated in terms of public interests.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Union Power Certified Public Accountants
(Special General Partnership)
Chinese CPA:
(engagement partner):
Han Zhenping
Chinese CPA:
Geng Ting
Wuhan, China 28 April, 2021
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Balance Sheet
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note 31 December, 2020 1 January, 2020 31 December, 2019
Current assets:
Monetary capital V. 1 136,413,143,859.81 125,400,715,267.64 125,400,715,267.64
Lending funds
Trading financial assets V. 2 370,820,500.00 955,208,583.58 955,208,583.58
Derivative financial assets V. 3 285,494,153.96 92,392,625.69 92,392,625.69
Bills receivable
Accounts receivable V. 4 8,738,230,905.44 8,439,719,697.00 8,513,334,545.08
Receivables financing V. 5 20,973,404,595.49 28,226,248,997.12 28,226,248,997.12
Prepayment V. 6 3,129,202,003.24 2,395,610,555.26 2,395,610,555.26
Other receivables V. 7 147,338,547.86 159,134,399.10 159,134,399.10
Including: Interests receivable
Dividends receivable
Buying back the sale of financial assets
Inventories V. 8 27,879,505,159.39 24,084,854,064.29 24,084,854,064.29
Contract assets V. 9 78,545,525.60 73,614,848.08 Not applicable
Assets held for sale
Non-current assets due within one year V. 10 445,397,710.39 445,397,710.39
Other current assets V. 11 15,617,301,913.87 23,091,144,216.68 23,091,144,216.68
Total current assets 213,632,987,164.66 213,364,040,964.83 213,364,040,964.83
Non-current assets:
Disbursement of loans statements and advances V. 12 5,273,805,581.52 14,423,786,409.22 14,423,786,409.22
Debt investment
Other debt investments V. 13 502,202,293.17 296,836,282.20 296,836,282.20
Long-term receivables
Long-term equity investment V. 14 8,119,841,062.14 7,064,186,161.29 7,064,186,161.29
Other equity instrument investments V. 15 7,788,405,891.47 4,644,601,697.51 4,644,601,697.51
Other non-current financial assets V. 16 2,003,483,333.33 2,003,483,333.33 2,003,483,333.33
Investment real estate V. 17 463,420,861.39 498,648,691.85 498,648,691.85
Fixed assets V. 18 18,990,525,087.94 19,121,930,757.04 19,121,930,757.04
Construction in Progress V. 19 4,016,082,730.07 2,431,051,409.94 2,431,051,409.94
Intangible assets V. 20 5,878,288,762.64 5,305,541,098.92 5,305,541,098.92
Development expenditures
Business reputation V. 21 201,902,704.02 325,919,390.58 325,919,390.58
Long-term deferred expenses 8,567,923.50 2,718,105.35 2,718,105.35
Deferred income tax assets V. 22 11,550,292,201.02 12,541,085,078.09 12,541,085,078.09
Other non-current assets V. 23 788,118,031.40 948,328,035.13 948,328,035.13
Total non-current assets 65,584,936,463.61 69,608,116,450.45 69,608,116,450.45
Total assets 279,217,923,628.27 282,972,157,415.28 282,972,157,415.28
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Balance Sheet (Continued)
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note 31 December, 2020 1 January, 2020 31 December, 2019
Current liabilities:
Short-term borrowing V. 24 20,304,384,742.34 15,944,176,463.01 15,944,176,463.01
Deposits from customers and interbank V. 25 261,006,708.24 352,512,311.72 352,512,311.72
Loans from other banks V. 26 300,020,250.00 1,000,446,666.67 1,000,446,666.67
Trading financial liabilities
Derivative financial liabilities
Bills payable V. 28 21,427,071,950.32 25,285,207,843.86 25,285,207,843.86
Accounts payable V. 29 31,604,659,166.88 41,656,815,752.46 41,656,815,752.46
Advances from customers 8,225,707,662.42
Contractual liabilities V. 30 11,678,180,424.65 7,311,804,415.54 Not applicable
Financial assets sold for repurchase V. 27 475,033,835.62 2,074,500,000.00 2,074,500,000.00
Payroll payable V. 31 3,365,355,468.69 3,430,968,964.33 3,430,968,964.33
Taxes payable V. 32 2,301,355,583.02 3,703,779,716.33 3,703,779,716.33
Other payables V. 33 2,379,395,717.44 2,712,692,973.66 2,712,692,973.66
Including: Interests payable
Dividends payable 6,986,645.96 707,913.60 707,913.60
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities V. 34 64,382,254,283.54 66,095,395,102.02 65,181,491,855.14
Total current liabilities 158,478,718,130.74 169,568,300,209.60 169,568,300,209.60
Non-current liabilities:
Long-term borrowing V. 35 1,860,713,816.09 46,885,882.86 46,885,882.86
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term payroll payable V. 36 149,859,788.00 141,021,228.00 141,021,228.00
Accrued liabilities
Deferred income V. 37 437,033,702.46 240,504,270.47 240,504,270.47
Deferred income tax liabilities V. 22 1,411,111,102.84 927,789,301.27 927,789,301.27
Other non-current liabilities
Total non-current liabilities 3,858,718,409.39 1,356,200,682.60 1,356,200,682.60
Total liabilities 162,337,436,540.13 170,924,500,892.20 170,924,500,892.20
Shareholders’ equity
Capital stock V. 38 6,015,730,878.00 6,015,730,878.00 6,015,730,878.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves V. 39 121,850,280.68 93,379,500.71 93,379,500.71
Less: Treasury stock V. 40 5,182,273,853.90
Other comprehensive income V. 41 7,396,060,195.47 6,260,291,981.13 6,260,291,981.13
Special reserves
Surplus reserve V. 42 3,499,671,556.59 3,499,671,556.59 3,499,671,556.59
General risk provisions V. 43 497,575,772.26 489,855,826.75 489,855,826.75
Undistributed profit V. 44 102,841,596,377.66 93,794,643,539.49 93,794,643,539.49
Equity total attributable to the shareholders of the
parent company 115,190,211,206.76 110,153,573,282.67 110,153,573,282.67
Minority equity 1,690,275,881.38 1,894,083,240.41 1,894,083,240.41
Equity total of the shareholders 116,880,487,088.14 112,047,656,523.08 112,047,656,523.08
Total liabilities and shareholders' equity 279,217,923,628.27 282,972,157,415.28 282,972,157,415.28
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of accounting department: Liu Yanzi
126
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance Sheet of Parent Company
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note 31 December, 2020 1 January, 2020 31 December, 2019
Current assets:
Monetary capital 123,828,677,860.41 121,906,528,984.14 121,906,528,984.14
Trading financial assets 370,820,500.00 945,701,633.58 945,701,633.58
Derivative financial assets 76,680,617.45
Bills receivable
Accounts receivable XV. 1 3,548,791,695.27 3,873,270,521.33 3,873,270,521.33
Receivables financing 18,642,206,012.24 24,599,149,450.48 24,599,149,450.48
Prepayment 17,963,607,702.38 16,755,065,015.75 16,755,065,015.75
Other receivables XV. 2 2,307,154,984.66 2,757,398,837.97 2,757,398,837.97
Including: Interests receivable
Dividends receivable 2,932,373.42
Inventories 13,884,110,379.81 9,763,530,439.65 9,763,530,439.65
Contract assets Not applicable
Assets held for sale
Non-current assets due within one year
Other current assets 9,773,701,904.35 11,140,701,427.28 11,140,701,427.28
Total current assets 190,395,751,656.57 191,741,346,310.18 191,741,346,310.18
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment XV. 3 24,619,357,367.01 20,224,198,957.34 20,224,198,957.34
Other equity instrument investments 7,505,139,669.97 4,271,848,596.31 4,271,848,596.31
Other non-current financial assets 2,003,483,333.33 2,003,483,333.33 2,003,483,333.33
Investment real estate 22,173,605.79 24,475,730.79 24,475,730.79
Fixed assets 2,706,217,465.90 2,965,550,178.74 2,965,550,178.74
Construction in Progress 570,077,306.55 262,245,182.66 262,245,182.66
Intangible assets 780,743,893.31 761,621,258.44 761,621,258.44
Development expenditures
Business reputation
Long-term deferred expenses
Deferred income tax assets 10,926,393,867.16 12,019,079,098.54 12,019,079,098.54
Other non-current assets 97,653,134.61 195,330,890.98 195,330,890.98
Total non-current assets 49,231,239,643.63 42,727,833,227.13 42,727,833,227.13
Total assets 239,626,991,300.20 234,469,179,537.31 234,469,179,537.31
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance Sheet of Parent Company (Continued)
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note 31 December, 2020 1 January, 2020 31 December, 2019
Current liabilities:
Short-term borrowing 15,862,663,592.40 11,188,890,759.19 11,188,890,759.19
Trading financial liabilities
Derivative financial liabilities
Bills payable 19,177,017,664.74 23,013,715,200.07 23,013,715,200.07
Accounts payable 44,365,200,963.00 45,097,063,852.05 45,097,063,852.05
Advances from customers 11,832,592,136.06
Contractual liabilities 14,594,653,911.45 10,965,696,063.40 Not applicable
Payroll payable 1,306,897,769.56 1,398,044,643.25 1,398,044,643.25
Taxes payable 777,604,964.68 1,819,362,036.62 1,819,362,036.62
Other payables 1,773,107,761.34 4,897,515,153.02 4,897,515,153.02
Including: Interests payable
Dividends payable 602,881.87 602,881.87 602,881.87
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities 59,737,975,078.14 65,242,035,524.53 64,375,139,451.87
Total current liabilities 157,595,121,705.31 163,622,323,232.13 163,622,323,232.13
Non-current liabilities:
Long-term borrowing 143,254,262.42
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term payroll payable 149,859,788.00 141,021,228.00 141,021,228.00
Accrued liabilities
Deferred income 74,814,702.48 51,891,300.00 51,891,300.00
Deferred income tax liabilities 848,906,843.68 528,382,787.62 528,382,787.62
Other non-current liabilities
Total non-current liabilities 1,216,835,596.58 721,295,315.62 721,295,315.62
Total liabilities 158,811,957,301.89 164,343,618,547.75 164,343,618,547.75
Shareholders’ equity
Capital stock 6,015,730,878.00 6,015,730,878.00 6,015,730,878.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 184,850,281.86 179,564,695.55 179,564,695.55
Less: Treasury stock 5,182,273,853.90
Other comprehensive income 7,763,409,043.86 6,462,024,096.41 6,462,024,096.41
Special reserves
Surplus reserve 3,497,114,024.31 3,497,114,024.31 3,497,114,024.31
Undistributed profit 68,536,203,624.18 53,971,127,295.29 53,971,127,295.29
Equity total of the shareholders 80,815,033,998.31 70,125,560,989.56 70,125,560,989.56
Total liabilities and shareholders' equity 239,626,991,300.20 234,469,179,537.31 234,469,179,537.31
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
128
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Income Statement
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note For the Year 2020 For the Year 2019
I. Total operating revenues 170,497,415,702.41 200,508,333,611.34
Including: Operating Revenue V. 45 168,199,204,404.53 198,153,027,540.35
Interest revenue V. 46 2,295,972,686.55 2,351,471,964.56
Fee and commission income 2,238,611.33 3,834,106.43
II. Total operating costs 146,260,681,865.34 170,723,573,765.20
Including: Operating Cost V. 45 124,229,033,680.92 143,499,372,581.36
Interest expense V. 46 304,448,121.92 110,579,966.36
Handling charges and commission expenses 516,318.75 603,394.43
Taxes and surcharges V. 47 964,600,693.81 1,542,983,748.63
Sales expense V. 48 13,043,241,798.27 18,309,812,188.35
Overhead Expense V. 49 3,603,782,803.64 3,795,645,600.08
R&D expenses V. 50 6,052,563,108.10 5,891,219,715.90
Financial expense V. 51 -1,937,504,660.07 -2,426,643,429.91
Including: Interest expense 1,088,369,394.87 1,598,276,258.59
Interest revenue 3,708,312,903.06 3,698,387,243.32
Add: Other incomes V. 52 1,164,120,111.04 936,148,644.87
Income from investments (losses expressed with "-") V. 53 713,010,071.67 -226,634,780.62
Including: Investment incomes from joint ventures or associates 35,314,343.21 -20,983,248.83
Income from derecognition of financial assets measured at amortization costs
Income from changes in fair value (losses expressed with "-") V. 54 200,153,472.05 228,264,067.88
Credit impairment losses (losses expressed with "-") V. 55 192,824,692.53 -279,448,586.27
Asset impairment losses (losses expressed with "-") V. 56 -466,270,321.67 -842,893,299.94
Income from disposal of assets (losses expressed with "-") V. 57 2,945,975.01 4,911,230.34
III. Operating profit (losses expressed with "-") 26,043,517,837.70 29,605,107,122.40
Add: Non-operating revenues V. 58 287,160,721.97 345,706,663.13
Less: Non-operating expenses V. 59 21,741,130.88 598,106,556.83
IV. Total profit (total losses expressed with "-") 26,308,937,428.79 29,352,707,228.70
Less: Income tax expenses V. 60 4,029,695,233.52 4,525,463,624.73
V. Net profit (net loss expressed with "-") 22,279,242,195.27 24,827,243,603.97
(I) Classification by business sustainability
1. Continuous operating net profit (net loss expressed with "-") 22,279,523,503.64 24,827,761,617.47
2. Discontinued operation net profit (net loss expressed with "-") -281,308.37 -518,013.50
(II) Classification by ownership
1. Net profits attributable to shareholders of the parent company ("-" stands for net losses) 22,175,108,137.32 24,696,641,368.84
2. Minority shareholders' gains and losses ("-" stands for net losses) 104,134,057.95 130,602,235.13
VI. Net of tax of other comprehensive income V. 41 1,135,981,683.99 6,880,143,079.03
(I) Net of tax of other comprehensive income attributable shareholders of the parent company 1,135,768,214.34 6,880,538,494.36
1. Other comprehensive income which cannot be reclassified into profits and losses 1,242,966,688.50 6,811,462,395.19
(1) Changes arising from remeasurement of the defined benefit plan -6,851,653.00 -8,029,478.00
(2) Other comprehensive income which cannot be transferred to profit or loss under
215,136,201.85 4,784,432,411.50
the equity method
(3) Changes in fair value of other equity instrument investments 1,034,682,139.65 2,035,059,461.69
(4) Changes in fair value of the company's own credit risk
(5) Others
2. Other comprehensive income which will be reclassified into profits and losses in the
-107,198,474.16 69,076,099.17
future
(1) Other comprehensive income that can be transferred to profit or loss under the equity
-182,758.17 4,536.91
method
(2) Changes in fair value of other debt investments -1,862,050.54 9,498,573.66
(3) Amount of financial assets reclassified and included into other comprehensive income
(4) Provision for credit impairment of other debt investments
(5) Cash flow hedge reserve 13,739,102.50 10,465,879.70
(6) Difference arising from translation of financial statements in foreign currency -118,892,767.95 49,107,108.90
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(II) Net of tax of other comprehensive income attributable to minority shareholders 213,469.65 -395,415.33
VII. Total comprehensive income 23,415,223,879.26 31,707,386,683.00
(I) Total comprehensive income attributable to shareholders of the parent company 23,310,876,351.66 31,577,179,863.20
(II) Total comprehensive income attributable to minority shareholders 104,347,527.60 130,206,819.80
VIII. Earnings per share: XVI. 2
(I) Basic earnings per share (Yuan per Share) 3.71 4.11
(II) Diluted earnings per share (Yuan per Share) 3.71 4.11
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
130
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Income Statement of Parent Company
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note For the Year 2020 For the Year 2019
I. Operating revenues XV. 4 107,841,790,174.49 136,219,366,183.61
Less: Operating Cost XV. 4 76,008,352,345.28 98,709,058,850.15
Taxes and surcharges 174,392,631.24 594,645,728.21
Sales expense 11,169,691,825.61 17,663,837,022.22
Overhead Expense 808,715,696.48 963,036,368.05
R&D expenses 4,811,036,302.94 4,450,053,310.36
Financial expense -2,919,245,870.62 -3,740,059,339.22
Including: Interest expense 840,469,134.14 792,553,518.40
Interest revenue 4,434,457,504.91 4,022,458,638.70
Add: Other incomes 233,757,468.48 104,241,039.06
Income from investments (losses expressed with "-") XV. 5 12,402,627,036.29 4,621,766,925.83
Including: Investment incomes from joint ventures or associates -12,168,894.57 -20,983,248.83
Income from derecognition of financial assets measured at amortization costs
Income from net exposure hedging (losses expressed with "-")
Income from changes in fair value (losses expressed with "-") 56,685,742.93 -6,160,581.57
Credit impairment losses (losses expressed with "-") 2,282,469.02 -116,414,495.32
Asset impairment losses (losses expressed with "-") -178,340,890.13 -788,564,505.35
Income from disposal of assets (losses expressed with "-") 1,733,177.13 2,293,132.37
II. Operating profit (losses expressed with "-") 30,307,592,247.28 21,395,955,758.86
Add: Non-operating revenues 46,252,800.73 42,197,397.49
Less: Non-operating expenses 9,176,432.87 561,145,018.76
III. Total profit (total losses expressed with "-") 30,344,668,615.14 20,877,008,137.59
Less: Income tax expenses 2,659,156,932.61 2,394,694,613.25
IV. Net profit (net loss expressed with "-") 27,685,511,682.53 18,482,313,524.34
(I) Net profit from continuing operations (net loss expressed with "-") 27,685,511,682.53 18,482,313,524.34
(II) Net profit from discontinued operations (net loss expressed with "-")
V. Net of tax of other comprehensive income 1,301,384,947.45 6,861,621,096.02
(I) Other comprehensive income not to be reclassified to profit or loss 1,294,557,343.46 6,835,662,576.38
1. Changes arising from remeasurement of the defined benefit plan -6,851,653.00 -8,029,478.00
2. Other comprehensive income which cannot be transferred to profit or loss under the 215,136,201.85 4,784,432,411.50
equity method
3. Changes in fair value of other equity instrument investments 1,086,272,794.61 2,059,259,642.88
4. Changes in fair value of the company's own credit risk
5. Others
(II) Other comprehensive income to be reclassified to profit or loss 6,827,603.99 25,958,519.64
1. Other comprehensive income that can be transferred to profit or loss under the
-182,758.17 4,536.91
equity method
2. Changes in fair value of other debt investments -6,728,740.34 15,488,103.03
3. Amount of financial assets reclassified and included into other comprehensive
income
4. Provision for credit impairment of other debt investments
5. Cash flow hedge reserve 13,739,102.50 10,465,879.70
6. Difference arising from translation of financial statements in foreign currency
7. Others
VI. Total comprehensive income 28,986,896,629.98 25,343,934,620.36
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
131
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Cash Flow Statement
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note For the Year 2020 For the Year 2019
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of services 155,890,384,313.86 166,387,697,953.52
Net increase in deposits and due from banks -92,506,750.32 31,898,181.64
Net increase in borrowings from central bank
Net increase in placements from other financial institutions -700,000,000.00 1,000,000,000.00
Cash received from interests, fees and commissions 1,137,265,615.92 1,051,389,792.25
Net increase in placements from other financial institutions
Net increase in repurchase business capital 475,000,000.00 2,074,500,000.00
Refund of tax and levies 2,484,293,128.44 1,854,373,548.43
Other cash received relating to operating activities V 61. (1) 4,698,328,013.32 2,796,063,838.34
Sub-total of cash inflows from operating activities 163,892,764,321.22 175,195,923,314.18
Cash payments for goods acquired and services received 121,793,121,343.62 94,214,771,389.83
Net increase in loans and advances to customers -9,091,377,401.54 7,529,473,836.40
Net increase in deposits with central bank and other financial
-976,192,487.64 -31,341,719.47
institutions
Net increase in lending funds
Cash paid for interests, fees and commissions 312,753,420.49 103,327,387.96
Cash paid to and on behalf of employees 8,901,277,136.77 8,831,213,736.01
Payments of all types of taxes 8,184,052,900.55 15,128,311,796.96
Other cash paid relating to operating activities V 61. (2) 15,530,492,099.81 21,526,452,792.90
Sub-total of cash outflows from operating activities 144,654,127,012.06 147,302,209,220.59
Net cash flows from operating activities 19,238,637,309.16 27,893,714,093.59
II. Cash flows from investing activities:
Cash received from recovery of investments 9,520,639,757.24 3,130,974,036.48
Cash received from return of investments 305,411,730.38 426,919,989.41
Net cash received from disposal of fixed assets, intangible assets and
6,631,829.54 9,614,513.94
other long-term assets
Net cash received from disposal of subsidiaries and other business units
Other cash received relating to investing activities V 61. (3) 4,322,649,440.42 4,878,025,331.18
Sub-total of cash inflows from investing activities 14,155,332,757.58 8,445,533,871.01
Cash paid for purchase and construction of fixed assets, intangible
4,528,646,805.03 4,713,187,965.97
assets and other. long-term assets
Cash paid for investments 3,561,055,956.90 7,192,756,039.01
Net cash paid for acquisition of subsidiaries and other business units V 62. (2) 425,875,376.81 774,183,781.48
Other cash paid relating to investing activities V 61. (4) 5,542,024,468.66 7,040,454,685.32
Sub-total of cash outflows from investing activities 14,057,602,607.40 19,720,582,471.78
Net Cash Flow from Investment Activities 97,730,150.18 -11,275,048,600.77
III. Cash flows from financing activities:
Cash received from absorbing investment 14,670,000.00 326,850,000.00
Including: Cash received from minority shareholder investment by 14,670,000.00 326,850,000.00
subsidiary received from borrowings
Cash 37,599,791,534.80 21,268,257,923.68
Other cash received relating to financing activities
Sub-total of cash inflows from financing activities 37,614,461,534.80 21,595,107,923.68
Cash repayments of amounts borrowed 29,475,431,119.54 27,657,703,656.20
Cash paid for dividend and profit distribution or interest payment 14,236,014,439.83 13,159,380,388.41
Including: Dividends and profits paid to minority shareholders by
411,607,065.23
subsidiaries
Other cash paid relating to financing activities V 61. (5) 15,014,513,473.63
Sub-total of cash outflows from financing activities 58,725,959,033.00 40,817,084,044.61
Net Cash Flow from Financing Activities -21,111,497,498.20 -19,221,976,120.93
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
IV. Effect of foreign exchange rate changes on cash and cash equivalents -372,392,144.48 203,761,625.26
V. Net increase in cash and cash equivalents -2,147,522,183.34 -2,399,549,002.85
Add: Beginning balance of cash and cash equivalents 26,372,571,821.49 28,772,120,824.34
VI. Ending balance of cash and cash equivalents 24,225,049,638.15 26,372,571,821.49
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
133
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Cash Flow Statements of Parent Company
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
Item Note For the Year 2020 For the Year 2019
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of services 93,602,519,755.19 112,341,680,710.73
Refund of tax and levies 2,108,659,339.52 1,465,166,072.58
Other cash received relating to operating activities 35,640,698,959.97 51,510,498,359.13
Sub-total of cash inflows from operating activities 131,351,878,054.68 165,317,345,142.44
Cash payments for goods acquired and services received 88,931,239,009.32 105,224,849,035.82
Cash paid to and on behalf of employees 3,521,483,800.64 3,453,320,937.66
Payments of all types of taxes 3,915,413,842.97 9,443,887,671.06
Other cash paid relating to operating activities 18,625,111,285.52 19,406,931,680.64
Sub-total of cash outflows from operating activities 114,993,247,938.45 137,528,989,325.18
Net cash flows from operating activities 16,358,630,116.23 27,788,355,817.26
II. Cash flows from investing activities:
Cash received from recovery of investments 1,154,839,757.24 4,302,974,036.48
Cash received from return of investments 3,616,084,603.45 201,582,776.58
Net cash received from disposal of fixed assets, intangible
2,552,696.74 3,947,642.20
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Other cash received relating to investing activities 5,376,248,383.05 7,274,898,788.81
Sub-total of cash inflows from investing activities 10,149,725,440.48 11,783,403,244.07
Cash paid for purchase and construction of fixed assets,
806,766,396.66 1,390,377,306.14
intangible assets and other. long-term assets
Cash paid for investments 6,623,118,162.38 8,174,203,389.69
Net cash paid for acquisition of subsidiaries and other business
150,000,000.00
units
Other cash paid relating to investing activities 8,155,280,838.65 14,656,152,091.36
Sub-total of cash outflows from investing activities 15,735,165,397.69 24,220,732,787.19
Net Cash Flow from Investment Activities -5,585,439,957.21 -12,437,329,543.12
III. Cash flows from financing activities:
Cash received from absorbing investment
Cash received from borrowings 29,395,517,581.94 16,640,128,940.00
Other cash received relating to financing activities 878,448,565.19 3,805,792,927.96
Sub-total of cash inflows from financing activities 30,273,966,147.13 20,445,921,867.96
Cash repayments of amounts borrowed 24,568,052,850.00 23,372,991,990.00
Cash paid for dividend and profit distribution or interest
13,662,321,384.07 13,031,345,175.19
payment
Other cash paid relating to financing activities 15,508,240,629.89 2,041,863,709.67
Sub-total of cash outflows from financing activities 53,738,614,863.96 38,446,200,874.86
Net Cash Flow from Financing Activities -23,464,648,716.83 -18,000,279,006.90
IV. Effect of foreign exchange rate changes on cash and cash
-548,526,629.60 693,156,236.38
equivalents
V. Net increase in cash and cash equivalents -13,239,985,187.41 -1,956,096,496.38
Add: Beginning balance of cash and cash equivalents 30,359,765,967.46 32,315,862,463.84
VI. Ending balance of cash and cash equivalents 17,119,780,780.05 30,359,765,967.46
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
134
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Statement of Changes in Shareholders' Equity
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
For the Year 2020
Equity attributable to the shareholders of the parent company
Item Equity total of the
Other equity instruments Other Minority equity
Capital Less: Treasury Special General risk shareholders
Capital stock comprehensive Surplus reserve Undistributed profit Subtotal
Preferred Perpetu reserves stock reserves provisions
Others income
stock al bond
1. Ending balance for the previous year 6,015,730,878.00 93,379,500.71 6,260,291,981.13 3,499,671,556.59 489,855,826.75 93,794,643,539.49 110,153,573,282.67 1,894,083,240.4 112,047,656,523.08
1
Add: Changes in accounting policies
Early error correction
Business combination involving enterprises under
common control
2. Beginning balance for the current year 6,015,730,878.00 93,379,500.71 6,260,291,981.13 3,499,671,556.59 489,855,826.75 93,794,643,539.49 110,153,573,282.67 1,894,083,240.4 112,047,656,523.08
1
III. Increase or decrease in the current year (decrease
28,470,779.97 5,182,273,853.90 1,135,768,214.34 7,719,945.51 9,046,952,838.17 5,036,637,924.09 -203,807,359.03 4,832,830,565.06
expressed with "-")
(I) Total comprehensive income 1,135,768,214.34 22,175,108,137.32 23,310,876,351.66 104,347,527.60 23,415,223,879.26
(2) Capital invested by shareholders and capital decrease 2,966,412.88 5,182,273,853.90 -5,179,307,441.02 128,956,545.69 -5,050,350,895.33
1. Ordinary stocks invested by shareholders 14,670,000.00 14,670,000.00
2. Capital invested by holders of other equity
instruments
3. Amounts of share-based payments recognized into
shareholders' equity
4. Others 2,966,412.88 5,182,273,853.90 -5,179,307,441.02 114,286,545.69 -5,065,020,895.33
(III) Profit distribution 7,719,945.51 -13,148,143,215.11 -13,140,423,269.60 -411,607,065.23 -13,552,030,334.83
1. Appropriation to surplus reserves
2. Appropriation to general risk provisions 7,719,945.51 -7,719,945.51
3. Allocation to shareholders -13,140,423,269.60 -13,140,423,269.60 -411,607,065.23 -13,552,030,334.83
4. Others
(4) Internal carry-over of shareholders' equity 25,504,367.09 19,987,915.96 45,492,283.05 -25,504,367.09 19,987,915.96
1. Transfer of capital reserves into capital (or stock
capital)
2. Transfer of surplus reserves into capital (or stock
capital)
3. Surplus reserves for making up losses
4. Defined benefit plan change carried over into
retained earnings
5. Other comprehensive income carried forward to
19,987,915.96 19,987,915.96 19,987,915.96
retained earnings
6. Others 25,504,367.09 25,504,367.09 -25,504,367.09
(V) Appropriative reserve
1. Amount withdrawn for the period
2. Amount used for the period
(VI) Others
IV. Ending balance for the current year 6,015,730,878.00 121,850,280.6 5,182,273,853.90 7,396,060,195.47 3,499,671,556.59 497,575,772.26 102,841,596,377.66 115,190,211,206.76 1,690,275,881.38 116,880,487,088.14
8
Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
135
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Consolidated Statement of Changes in Shareholders' Equity (Continued)
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
For the Year 2019
Equity attributable to the shareholders of the parent company
Item Other equity instruments Equity total of the
Less: Other
Capital Special General risk Undistributed Minority equity
Capital stock Treasury comprehensive Surplus reserve Subtotal shareholders
Preferred Perpetual reserves reserves provisions profit
Others stock income
stock bond
1. Ending balance for the previous year 6,015,730,878.00 93,379,500.71 -550,806,051.51 3,499,671,556.59 329,417,571.48 81,939,701,613.83 91,327,095,069.10 1,387,616,658.36 92,714,711,727.46
Add: Changes in accounting policies -69,440,461.72 -48,226,344.11 -117,666,805.83 -117,666,805.83
Early error correction
Business combination involving enterprises under
common control
2. Beginning balance for the current year 6,015,730,878.00 93,379,500.71 -620,246,513.23 3,499,671,556.59 329,417,571.48 81,891,475,269.72 91,209,428,263.27 1,387,616,658.36 92,597,044,921.63
III. Increase or decrease in the current year (decrease expressed
6,880,538,494.36 160,438,255.27 11,903,168,269.77 18,944,145,019.40 506,466,582.05 19,450,611,601.45
with “-”)
(I) Total comprehensive income 6,880,538,494.36 24,696,641,368.84 31,577,179,863.20 130,206,819.80 31,707,386,683.00
(2) Capital invested by shareholders and capital decrease 395,965,448.59 395,965,448.59
1. Ordinary stocks invested by shareholders 326,850,000.00 326,850,000.00
2. Capital invested by holders of other equity instruments
3. Amounts of share-based payments recognized into
shareholders' equity
4. Others 69,115,448.59 69,115,448.59
(III) Profit distribution 160,438,255.27 -12,793,473,099.07 -12,633,034,843.80 -19,705,686.34 -12,652,740,530.14
1. Appropriation to surplus reserves
2. Appropriation to general risk provisions 160,438,255.27 -160,438,255.27
3. Allocation to shareholders -12,633,034,843.80 -12,633,034,843.80 -19,705,686.34 -12,652,740,530.14
4. Others
(4) Internal carry-over of shareholders' equity
1. Transfer of capital reserves into capital (or stock capital)
2. Transfer of surplus reserves into capital (or stock capital)
3. Surplus reserves for making up losses
4. Defined benefit plan change carried over into retained
earnings
5. Other comprehensive income carried forward to retained
earnings
(V) Appropriative reserve
1. Amount withdrawn for the period
2. Amount used for the period
(VI) Others
IV. Ending balance for the current year 6,015,730,878.00 93,379,500.71 6,260,291,981.13 3,499,671,556.59 489,855,826.75 93,794,643,539.49 110,153,573,282.67 1,894,083,240.41 112,047,656,523.08
Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
136
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Statement of Changes in Shareholders' Equity of Parent Company
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
For the Year 2020
Item Other equity instruments Other
Special Equity total of the
Capital stock Capital reserves Less: Treasury stock comprehensive Surplus reserve Undistributed profit
Preferred Perpetual reserves shareholders
Others income
stock bond
1. Ending balance for the previous year 6,015,730,878.00 179,564,695.55 6,462,024,096.41 3,497,114,024.31 53,971,127,295.29 70,125,560,989.56
Add: Changes in accounting policies
Early error correction
Others
2. Beginning balance for the current year 6,015,730,878.00 179,564,695.55 6,462,024,096.41 3,497,114,024.31 53,971,127,295.29 70,125,560,989.56
III. Increase or decrease in the current year (decrease expressed with “-”) 5,285,586.31 5,182,273,853.90 1,301,384,947.45 14,565,076,328.89 10,689,473,008.75
(I) Total comprehensive income 1,301,384,947.45 27,685,511,682.53 28,986,896,629.98
(2) Capital invested by shareholders and capital decrease 5,285,586.31 5,182,273,853.90 -5,176,988,267.59
1. Ordinary stocks invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amounts of share-based payments recognized into shareholders' equity
4. Others 5,285,586.31 5,182,273,853.90 -5,176,988,267.59
(III) Profit distribution -13,140,423,269.60 -13,140,423,269.60
1. Appropriation to surplus reserves
2. Allocation to shareholders -13,140,423,269.60 -13,140,423,269.60
3. Others
(4) Internal carry-over of shareholders' equity 19,987,915.96 19,987,915.96
1. Transfer of capital reserves into capital (or stock capital)
2. Transfer of surplus reserves into capital (or stock capital)
3. Surplus reserves for making up losses
4. Defined benefit plan change carried over into retained earnings
5. Other comprehensive income carried forward to retained earnings 19,987,915.96 19,987,915.96
6. Others
(V) Appropriative reserve
1. Amount withdrawn for the period
2. Amount used for the period
(VI) Others
IV. Ending balance for the current year 6,015,730,878.00 184,850,281.86 5,182,273,853.90 7,763,409,043.86 3,497,114,024.31 68,536,203,624.18 80,815,033,998.31
Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
137
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Statement of Changes in Shareholders' Equity of Parent Company (Continued)
Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan
For the Year 2019
Item Other equity instruments
Other comprehensive Special Equity total of the
Capital stock Capital reserves Less: Treasury stock Surplus reserve Undistributed profit
Preferred Perpetual income reserves shareholders
Others
stock bond
1. Ending balance for the previous year 6,015,730,878.00 179,564,695.55 -330,283,919.33 3,497,114,024.31 48,123,803,614.75 57,485,929,293.28
Add: Changes in accounting policies -69,313,080.28 -1,955,000.00 -71,268,080.28
Early error correction
Others
2. Beginning balance for the current year 6,015,730,878.00 179,564,695.55 -399,596,999.61 3,497,114,024.31 48,121,848,614.75 57,414,661,213.00
III. Increase or decrease in the current year (decrease expressed with “-”) 6,861,621,096.02 5,849,278,680.54 12,710,899,776.56
(I) Total comprehensive income 6,861,621,096.02 18,482,313,524.34 25,343,934,620.36
(2) Capital invested by shareholders and capital decrease
1. Ordinary stocks invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amounts of share-based payments recognized into shareholders'
equity
4. Others
(III) Profit distribution -12,633,034,843.80 -12,633,034,843.80
1. Appropriation to surplus reserves
2. Allocation to shareholders -12,633,034,843.80 -12,633,034,843.80
3. Others
(4) Internal carry-over of shareholders' equity
1. Transfer of capital reserves into capital (or stock capital)
2. Transfer of surplus reserves into capital (or stock capital)
3. Surplus reserves for making up losses
4. Defined benefit plan change carried over into retained earnings
5. Other comprehensive income carried forward to retained earnings
6. Others
(V) Appropriative reserve
1. Amount withdrawn for the period
2. Amount used for the period
(VI) Others
IV. Ending balance for the current year 6,015,730,878.00 179,564,695.55 6,462,024,096.41 3,497,114,024.31 53,971,127,295.29 70,125,560,989.56
Legal representative: Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
Notes to Financial Statements for the Year 2020
I. Basic information of the Company
Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as "the Company") was established in December,
1989, with the unified social credit code 91440400192548256N.
The registered capital and equity of the Company was RMB 6,015,730,878.00 by the end of 31 December, 2020.
For the specific equity, see Note (V) 38.
1. Registered address, organizational form and address of the Company
Organizational form of the Company: joint stock limited company
Registered address and headquarters office address of the Company: Jinji West Road, Qianshan, Zhuhai City,
Guangdong Province.
2. Nature of business and main business activities of the Company
The Company falls in to the household electrical appliance industry and is engaged in production and sales of air
conditioners and their accessories, and home appliances and their accessories.
3. Names of the parent company and the ultimate parent company
As of 31 December, 2020, the Company has no actual controller. For the specific change in the actual controller of
the Company, see Note (X) 1.
4. Scope of consolidated financial statements of the current period and its change
Totally 120 subsidiaries were incorporated in the scope of the consolidated financial statements by the end of the
Report Period. For details, see Note (VII) 1. For the detailed changes to the scope of consolidated financial
statements in the Report Period, see Note (VI).
5. Approved submitter and approved submission date of the financial report
This financial report was submitted under approval of the Board of Directors of the Company as of 28 April,
2021.
II. Preparation basis of the financial statements
1. Preparation basis of the financial statements
The Company prepares the financial statements on the basis of a going concern and according to the 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 15 February, 2006
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(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 (2014 Revision) promulgated by China Securities Regulatory Commission ("CSRC").
According to the relevant provisions of the Enterprise Accounting Standards, the Company's accounting is based
on the 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.
2. Going concern
This financial statement was presented on a going concern basis. The management carefully evaluated factors of
the Company in the future 12 months commencing from 31 December, 2020 such as the macropolicy risk, market
operation risk, current and long-term profitability and solvency of the enterprise, financial flexibility, and the
management's intention of changing the operations policy, and held that there was no event that 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 each subsidiary are engaged in production and sales of air conditioners and their accessories,
and home appliances and their accessories. The Company has prepared several specific accounting policies 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.
1. 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 31 December,
2020, and the related information such as operating results and cash flows in the year 2020. 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 - General Provisions on Financial Reports revised by the China Securities
Regulatory Commission in 2014.
2. Accounting period
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 1 January and ends on 31 December of
each year.
3. 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
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
liquidity classification standard for assets and liabilities.
4. Functional currency
RMB is the functional currency used by the Company. Some subsidiaries of the Company adopt currencies other
than Renminbi as the functional currency.
5. Accounting treatment of business combination involving enterprises under common control and
business combination 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 involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the combination,
and that control is not transitory. For business combination involving enterprises under common control, the party
that obtains the right to control other enterprises participating in the combination on the combination date is the
combining 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 invested entities 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 stocks) 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 and appraisal and consultation costs, and other related overhead
expenses are charged to profits or losses in the period in which they are incurred; the transaction expenses directly
attributable to the consideration paid for the combination through 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 issuance of
debt instruments are recorded into the initially recognized amount of debt instruments. Where the equities of
invested entities under common control are obtained step by step through multiple transactions to achieve
business combination but these transactions do not belong to a package deal, the Company will recognize the cost
of 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
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
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 capital stock premium); if the capital
reserve is not sufficient to absorb the difference, any excess is adjusted 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 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 invested entity to directly dispose
of relevant assets or liabilities. For other changes in owners' equities other than the net profits/losses, other
comprehensive income and profit distribution in net assets of the invested entity 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 combination not involving enterprises under common control
A business combination not involving enterprises under common control is a business combination in which all of
the combining enterprises are not ultimately controlled by the same party or parties both before and after the
combination. For business combination 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 the 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 stocks are accounted using the equity method prior to the
date of acquisition, the cost of 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
disposal of the investment using the basis the same as that used by the invested entity to directly dispose of
relevant assets or liabilities; the owner's equity that is recognized due to other changes in owners' equities other
than the net profits/losses, other comprehensive income and profit distribution of the invested entity 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 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 stocks and the carrying amount and
all the cumulative fair value changes originally recorded into other comprehensive income are transferred to the
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
investment income of the current period.
In the consolidated financial statements, the stocks of the acquired party held before the date of acquisition shall
be remeasured based on the fair value of such stocks on the date of acquisition, and the difference between their
fair value and carrying amount shall be charged to the investment income of the current period; where the stocks
of the acquired party held before the date of acquisition involve other comprehensive income under accounting of
the equity method and other changes in owners' equities other than the net profits/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 invested entity). The summation of the fair value of the stocks 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, and appraisal and consultation costs, and other related overhead
expenses are charged to profits or losses in the period in which they are incurred. The transaction expenses
directly attributable to the consideration paid for the combination through 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
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 business reputation 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 or losses of the current period after being checked.
(3) Principle of judging whether multiple transactions are "a package deal"
When the terms and conditions of multiple transactions and the economic impact thereof accord with one or 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) occurrence of one transaction depends on occurrence of at least one of the other transactions;
4) one transaction is not economical when considered separately, but economical when taken into account together
with other transactions.
6. Preparation of consolidated financial statements
(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of consolidated financial statements shall be determined on the basis of control. Control
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
means that the Company owns the power to the invested entity, enjoys variable return by participating relevant
activities of the invested entity, and has the capacity of using the power to the invested entity to affect its return
amount.
(2) Preparation of consolidated financial statements
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 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 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 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 shareholders' equity under the owners' equity in the consolidated balance sheet. The
share of net profits or losses of the subsidiaries in the current period that is attributable to the minority
shareholders' equity shall be presented as the item of "Minority interest income" under the net profit in the
consolidated profit statement. The share of comprehensive income of the subsidiaries in the current period that is
attributable to the minority shareholders' 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 be still
adjusted against the minority shareholders' equity.
For acquisition of the subsidiary's stocks owned by minority shareholders thereof, in the consolidated financial
statements, the difference between the long-term equity investment newly obtained because of acquisition of
minority shareholders' stocks 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 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 capital stock premium); if the capital reserve is not sufficient to absorb the difference, any excess is
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
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 remaining stocks shall be remeasured at their 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 remaining stocks,
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 business reputation 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 or losses in the period when the control right is lost.
Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till the
control right is lost and the transactions do not belong to a package deal, all the transactions before 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 stocks, or selling-out and
buying-in turn.
7. 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
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. Joint venture refers to the joint arrangement where the parties to the venture only
enjoy rights to net assets of this arrangement.
(2) Accounting treatment of co-management
1) The Company recognizes the following items related to quantum of interest in co-management and performs
accounting treatment in accordance with provisions of the corresponding Accounting Standards for Business
Enterprises:
a. Independently held assets, as well as the jointly held assets to be recognized according to the share of the
Company;
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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;
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 or losses arising from this transaction that is attributable to other participants
in the co-management. In case that the put or sold assets involve the asset impairment loss complying with
provisions in the Accounting Standard for Business Enterprises No. 8 - Impairment of Assets, the Company shall
recognize the said loss in full.
3) 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 or losses
arising from this transaction that is attributable to other participants in the co-management. In case that the
purchased assets involve the asset impairment loss complying with provisions in the Accounting Standard for
Business Enterprises No. 8 - Impairment of Assets, the Company shall recognize this part of loss according to the
share to undertake.
8. Criteria for cash and cash equivalents
The cash refers to the enterprise's money on hand and deposits for payment at any time. Cash equivalents refer to
investments held by the enterprise which 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.
9. Foreign currency transactions and translation of financial statements in foreign currency
(1) Method of translation for foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the 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 spot rate of the balance sheet
date. The exchange difference generated from the difference of spot rate of the current balance sheet date and the
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time of initial recognition of a foreign currency or the previous balance sheet date is charged to the profit or loss
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 spot rate of the transaction date
without change in their amount in functional currency. Non-monetary items of foreign currencies such as stocks
and funds measured at their 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 fluctuation 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 asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet
date; Among the owners' equity items, except the ones as "undistributed profits", others shall be translated at the
spot exchange rate at the time when they are incurred. The income and expense items in the profit statements shall
be translated at the average exchange rate. The balance arisen from the translation of foreign currency financial
statements in compliance with the aforesaid method shall be presented separately under the owners' equity item of
the balance sheets. 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 cashes shall be presented separately
under the adjusted item in the cash flow statement.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, it recognizes a financial asset or financial
liability.
(1) Classification, recognition and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics of
financial assets, the Company divides financial assets into: financial assets measured at amortization cost,
financial assets which are measured at their fair values and of which the changes are included into other
comprehensive income, and financial assets which are measured at their fair values and of which the changes are
included into the current profits and losses.
The financial assets initially recognized by the Company shall be measured at their fair values. For the financial
assets which are measured at their fair values and of which the changes are included into the current profits and
losses, the transaction expenses thereof are directly included into the current profits and losses; for other
categories of financial assets, the transaction expenses thereof are included into the initially recognized amount.
For the accounts receivable or notes receivable arising from the sale of products or the provision of services that
do not contain or do not consider significant financing components, the Company shall use the amount of
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consideration expected to be entitled to be charged as the initial confirmation amount.
1) Financial assets measured at amortization costs
The Company's business model for managing financial assets measured at amortization cost is to 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 into the current profits and losses.
2) Financial assets which are measured at their fair values and of which the changes are included into other
comprehensive income
The Company's business model for managing such financial assets is to collect and sell contractual cash flows,
and the contractual cash flow characteristics of such financial assets are consistent with basic borrowing
arrangements. The Company measures such financial assets at fair value and includes the changes of fair value are
included in other comprehensive income, but impairment losses or gains, exchange gains and losses and interest
income calculated according to the actual interest rate method are included into the current profits and losses.
In addition, the Company designates some non-trading equity instrument investments as financial assets which are
measured at their fair values and of which the changes are included into other comprehensive income. The
Company includes the relevant dividend income of such financial assets into the current profits and losses, and
includes the changes of fair value in other comprehensive income. When the financial assets are derecognized, the
cumulative gains or losses previously included into other comprehensive income will be transferred from other
comprehensive income to retained income, but will not be included into the current profits and losses.
3) Financial assets measured at their fair values and of which the changes are recorded into the current profits and
losses
The Company classifies the financial assets other than the above financial assets measured at amortization cost
and financial assets which are measured at their fair values and of which the changes are included into other
comprehensive income as financial assets which are measured at their fair values and of which the changes are
included into the current profits and losses. In addition, in the initial recognition, in order to eliminate or
significantly reduce the accounting mismatch, the Company designates some financial assets as financial assets
which are measured at fair value and of which the changes are included into the current profits and losses. For
such financial assets, the Company uses fair value for subsequent measurement, and the changes of 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 which are measured at fair value and of which the
changes are included in the current profits or losses and other financial liabilities. For the financial liabilities
which are measured at their fair values and of which the changes are included into the current profits and losses,
the transaction expenses thereof are directly included into the current profits and losses; for other financial
liabilities, the transaction expenses thereof are included into the initially recognized amount.
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1) Financial liabilities measured at their fair values and of which the changes are recorded into the current profits
and losses
Financial liabilities which are measured at fair value and of which the changes are included in the current profits
or losses include trading financial liabilities (including derivatives that are financial liabilities) and financial
liabilities designated as those which are measured at fair value at the initial recognition and of which changes are
included in the current profits or losses.
Trading financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fair
value. Except for hedge accounting, the changes in fair value are included in current profits or losses.
For financial liabilities designated as those which are measured at fair value at the initial recognition and of which
changes are included in the current profits or 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 recognition of the liabilities is
terminated, 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 or losses. If 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, 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 the transfer of financial assets that does not meet the conditions for derecognition or continued
involvement in the financial liabilities and financial guarantee contracts formed by the transferred financial assets,
other financial liabilities are classified as financial liabilities measured at amortization cost, which are
subsequently measured at amortization 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.
If 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, 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 extent of continued involvement in the transferred financial assets
refers to the level of risk that the changes in the value of the financial assets expose the enterprise to.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the 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
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current profits and losses.
If the partial transfer of financial assets satisfies the conditions for derecognition, the 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 and the above book amount apportioned will be
include 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. If 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, the original financial liability will
be derecognized and the new financial liability will be recognized at the same time. If a material amendment is
made to the contractual terms for the original financial liability or the relevant portion thereof, 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 or losses.
(5) Offsetting financial assets with financial liabilities
When the Company has the legal right to offset the financial asset and the financial liability with recognized
amount, and such legal rights are currently enforceable, and the Company plans to settle in 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
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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, 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 the valuation techniques. The value appraisal
techniques include the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon 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 issue (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.
11. 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 which are measured at fair value and of which changes
included in other comprehensive income, mainly including receivables financing, accounts receivable, other
receivables, loans and advances, debt investment, other debt investment, long-term receivables, etc.
(1) Method for recognition of impairment provisions
Based on the expected credit loss, the Company makes impairment provision and recognizes credit 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 provisions according to the
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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) Criteria for judging whether credit risk has increased significantly since initial recognition
If 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, 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) Combination method for assessing expected credit risk based on combination
The Company individually assesses credit risk for financial assets that have significantly different credit risks,
such as: receivables in dispute with the other party or involving litigation and arbitration; and receivables with
obvious signs that the debtor is likely to fail to meet its repayment obligations.
In addition to financial assets of which credit risk is individually assessed, the Company divides financial assets
into different combinations based on common risk characteristics, and assesses credit risk on the basis of the
combination.
(4) Accounting treatment method of financing assets
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If 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) Method for determining credit loss of various financial assets
1) Notes receivable and receivables financing
The Company measures the loss provision for notes receivable and receivables financing based on the lifetime
expected credit loss amount. Based on the credit risk characteristics of notes receivable and receivables financing,
financial assets are divided into different combinations:
Item Basis for recognition of combinations
Banker's acceptance bill The acceptor is a bank institution or a financial company
Trade acceptance draft The acceptor is a company other than a bank institution or financial company
2) Accounts receivable and contract assets
For accounts receivable and contract assets that do not contain significant financing components and contain
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significant financing components, the Company measures the loss provision based on the lifetime expected credit
loss amount. Expected credit losses related to contract assets are included in asset impairment losses.
In addition to accounts receivable of which credit risk is individually assessed, the Company divides accounts
receivable 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 accounts receivable as the basis for the combination
combination
Combination 2: Low risk The combination takes the dismantling subsidy of waste electrical and electronic products receivable
combination from government departments as the basis for the combination
Combination 3: None risk The combination takes the receivables from related units within the scope of consolidation as the basis
combination for the combination
3) Disbursement of loans statements and advances
Based on the internal assessment results of the credit risk management system of the relevant financial
instruments, the Company defines whether credit impairment has occurred: the Company calculates the expected
credit loss of the financial assets at the expected credit loss rate of different categories, according to the five-level
classification of the financial industry (normal, concerned, secondary, suspicious and loss) based on the borrower's
actual repayment ability.
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: None risk The combination takes the receivables from related units within the scope of consolidation as the basis
combination 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 accounts for the debt investments which are measured at their fair values and of
which the changes are included into other comprehensive income. 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.
12. 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
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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. 10 "Financial Instruments" and Note III. 11
"Impairment of Financial Assets".
13. Inventories
(1) Classification of inventories
The Company's inventories mainly include raw materials, work in progress, finished products, development costs,
and development products.
Development cost refers to the property that has not been completed and is for sale; the Company accounts for 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 for delivered inventories
Valuation for delivered inventories: When various kinds of inventories of the Company are delivered, they shall be
valuated at planned costs, and the planned costs shall be adjusted into actual costs based on the difference of costs
of the current month at the end of the month.
Development cost and product development cost include land transfer fees, infrastructure expenditures,
construction and installation engineering expenditures, borrowing costs incurred before the development project is
completed, and other related costs incurred in the development process. When developing product is carried
forward the cost, the total cost is allocated between the sold and unsold properties in proportion to the
construction area.
(3) Recognition of the net realizable value and measurement of provision for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. if the cost of
inventories is higher than the net realizable value, a provision for decline in value of inventories shall be made and
shall be recorded into the profits and losses of the current period, where a provision for decline in value of
inventories has been made, if the value of the said inventories is resumed later, the said value shall be reversed
from the provision for 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) Stock count system for inventories
The perpetual inventory system is adopted for stock count of the Company.
(5) Amortization methods of low-value consumables and packaging materials
Low-value consumables and packaging materials are written off in full when issued for use.
14. Contract assets
The Company presented the right to collect payments from customers which the customers have not yet paid the
contract consideration, but the Company has fulfilled its performance obligations in accordance with the contract,
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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.
11 "Financial Asset Impairment".
15. Contract costs
(1) Determination of asset amount related to contract costs
The Company's asset related to contract costs includes contract acquisition cost and contract obtain cost.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it will be
recognized as an asset as contract acquisition cost. However, if the amortization period of the asset does not
exceed one year, it will be included in current profits or losses when it occurs.
If the cost incurred by the Company for the performance of the contract does not fall within the scope specified in
the accounting standards for business enterprises other than the Accounting Standards for Business Enterprises No.
14 - Revenue (Revised in 2017), it be recognized as an asset as the contract performance cost when the 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
Assets related to contract costs are amortized on the same basis as the revenue recognition of goods related to the
assets, and included in the current profits or losses.
(3) Impairment of assets related to contract costs
When determining the impairment loss of assets related to the contract cost, the Company first determines the
impairment loss of other assets related to the contract that are recognized in accordance with other relevant
accounting standards for business enterprises; then, if the book value is higher than the difference between the
remaining consideration expected to be obtained due to the transfer of goods related to the assets and the costs
expected to be incurred due to the transfer of the related goods, the Company will make provision for impairment
of the excess part and recognize it as an asset impairment loss.
If the depreciation factors in the previous period change later, causing the aforementioned difference is higher than
the book value of the asset, the Company will reverse the previously-made provision for impairment and include it
in the current profits or losses, but the book value of the asset after the reversal can not exceed the book value of
the asset at the date of reversal under the assumption that no provision is made for the impairment.
16. Assets held for sale
(1) Recognition standard
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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;
The sale is very likely to happen, i.e., the Company has made a decision on a sale plan and has obtained the
determined purchase commitment, and the sale is expected to be completed within one year. The relevant
regulations require that the relevant organ of authority of the Company or regulatory authorities must approve the
sale, it shall have been approved. A determined purchase commitment refers to a legally binding purchase
agreement signed between the Company and other parties. The agreement includes important terms such as the
transaction price, time and severe penalties for breach of contract, making it almost impossible to make major
adjustments or cancel the agreement.
For the non-current asset or disposal group specially obtained by the Company for resale, if it meets the specified
condition that "the sale is expected to be completed within one year" on the date of acquisition and it is very likely
to meet other classification conditions of the category held for sale in a short period of time (usually 3 months), it
shall be classified into the category held for sale on the date of acquisition.
The disposal group refers to a group of assets that are disposed of as a whole in a transaction through sale or other
means, and the liabilities that are directly related to these assets and transferred in the transaction. Where the
business reputation 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 - Asset
Impairment, this disposal group should contain the business reputation apportioned to the disposal group.
(2) Accounting treatment
For the non-current asset and disposal group that is classified as the category held for sale, the Company 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 loss and
include in the current profits and losses, and the provision for impairment of the assets held for sale is made at the
same time; for the amount of assets impairment loss confirmed by the disposal group held for sale, the book value
of the business reputation 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 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 reversed in the amount of
assets impairment loss after classification as the category held for sales is confirmed, and the reversed amount
shall be included in the current profits and losses. The assets impairment loss confirmed before classification as
the category held for sales shall not be reversed.
Where the net value of the fair value of disposal group held for sale on the balance sheet date minus the selling
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expense increases subsequently, the previous write-down amount is restored and will be reversed in the amount of
assets impairment loss 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 reversed amount shall be included in the
current profits and losses.
For the deducted book value of business reputation and the non-current assets applicable to the measurement
provisions of the category held for sale, the assets impairment loss confirmed before classification as the category
held for sales shall not be reversed. For the subsequently reversed amount of assets impairment loss confirmed for
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 business reputation. 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 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) Book value before being classified as held for sale, and the adjusted amount of depreciation, amortization or
impairment that should be recognized under the assumption that it is not classified as held for sale; and
2) Recoverable amount.
17. Long-term equity investment
Long-term equity investments mainly include the equity investment held by the Company that is able to control, is
under common control with or has significant influences on the invested entity and the equity investment to joint
ventures.
(1) Judgment standards of control and significant influence
Judgment standards of control:
1) The Company owns the power to the invested entity;
2) The Company enjoys variable return by participating relevant activities of the invested entity;
3) The Company has the ability to use the power over the invested entity to influence the Company's return
amount;
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4) The Company acknowledges the control force for the invested entity that meets the above three conditions.
Judgment standards of significant influence:
1) The Company has the power to participate in decision making for the financial and operations policies of the
invested entity, but cannot control formulation of these policies independently or together with other parties.
2) Where the Company can exert a great influence on the invested entity, the invested entity is an associate of the
Company.
3) The invested entity 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 on this arrangement can prevent other participants or the combination
of participants from independently controlling this arrangement.
(2) Investment cost recognition of long-term equity investment
The long-term equity investment of the Company is measured at the investment cost at the time of acquisition.
Normally the investment cost refers to the assets paid, liabilities incurred or undertaken, and the fair value 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 business combination involving enterprises
under common control, the investment cost is the share of 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 recognition of profits or losses
The Company adopts the cost method for accounting for the long-term equity investment based on which the
Company is able to control the invested enterprise; the Company adopts the equity method for accounting for
investments put into associates and joint ventures.
The price of a long-term equity investment accounted by employing the cost method shall be included at its 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 distribute by the invested entity shall be recognized as
investment income and charged to profits or losses of the current period.
When the Company employs the equity method for accounting of the long-term equity investment, if the
investment cost of a long-term equity investment is more than the investing enterprise' attributable share of the
fair value of the invested entity'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 invested entity's identifiable net assets for the
investment, the carrying amount of the long-term equity investment shall be adjusted, and the difference shall be
recorded into the profits or losses of the current period.
When the Company employs the equity method for accounting of the long-term equity investment, the Company
first adjusts the invested entity's net profits or losses and other comprehensive income in the aspects such as the
fair value of the invested entity's identifiable net assets at the time of investment acquisition, accounting policy
and accounting period, and then recognizes the current-period investment profits or losses and other
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comprehensive income according to the investing enterprise' attributable or shareable share of the invested entity's
net profits or losses and other comprehensive income. For other changes in owners' equities other than the net
profits or 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/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/losses shall be recognized on the basis of offsetting.
For the long-term equity investments held already prior to 1 January, 2007 for the associates and joint ventures, if
there is any equity investment difference on the debit side, the investment profits/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 invested entity
Common control is recognized as the control which does not exist unless the investing parties unanimously agree
on sharing the control power over the relevant important financial and operating decisions of the invested entity
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 invested entity, 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% (included) but less than 50.00% of
voting shares of the invested entity directly or indirectly through a subsidiary, significant influences on the
invested entity shall be recognized, unless there is clear evidence indicating that the Company cannot participate
in production and management decision-making of the invested entity in this situation and therefore cannot
generate significant influences; if the Company holds less than 20.00% (excluded) of voting shares of the invested
entity, usually the Company is not deemed to have a significant influence on the invested entity, unless there is
clear evidence indicating that the Company can participate in production and management decision-making of the
invested entity in this situation and therefore can generate significant influences.
(5) Conversion of the long-term equity investment accounting method
Where the equity investment originally held by the Company, which is unable to control, is not under 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 or losses accounted by the equity method instead.
For the originally held investments for associates and joint ventures, if they are not able to be under 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 reason such as partial disposal, accounting
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treatment must be performed for remaining equity investments according to the recognition and measurement
standards for financial instruments, and 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 or 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 invested entity to directly dispose of relevant assets or liabilities; all the owners' equities that are recognized
due to other changes in owners' equities other than the net profits/losses, other comprehensive income and profit
distribution of the invested entity shall be transferred to the profits or 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 invested entity to directly dispose of relevant
assets or liabilities when such an investment is disposed of.
When the influencing capability on the invested entity is converted from control to a significant influence 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 invested entity's identifiable net assets at the time of original investment, which
is calculated according to the remaining shareholding proportion. For the business reputation 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 invested entity'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. For the share attributable to the Company in the invested
entity's realized net profits/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 invested entity's realized net profits/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 or losses shall be adjusted for the share attributable to the
Company in the invested entity's realized net profits/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
invested entity's other changes in owners' equities arising from reasons other than the net profits or losses, other
comprehensive income and profit distribution shall be recorded into "Capital reserves -- Other capital reserves"
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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 invested entity's
realized net profits/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 invested entity, 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 invested entity, 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 into the investment income of the current period.
In the process of holding the long-term equity investment, if the Company decides to sell all or part of held stocks
of the invested entity in consideration of all aspects, the carrying amount of the long-term equity investment
corresponding to the sold stocks shall be carried over accordingly, and the difference between the selling price and
the carrying amount of long-term equity investment for disposal shall be recognized as disposal profit or loss.
If the Company disposes of all the long-term equity investments accounted by the equity method, 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
invested entity 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/losses, other comprehensive income and profit
distribution of the invested entity 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 remaining stocks are still accounted using the equity method, other related
comprehensive income originally subject to accounting of equity method shall be handled using the basis the same
as that used by the invested entity 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/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.
18. Investment real estate
The Company's investment real estate includes a land use right that is leased out, a land use right held for 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.
19. Fixed assets
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(1) Recognition standard of fixed assets
The Company's fixed assets refer to the tangible assets that are held for the sake of producing commodities,
rendering labor service, renting or business management and whose useful life is in excess of one fiscal year.
Fixed assets can not be recognized unless they simultaneously meet the conditions as follows:
1) The economic benefits pertinent to the fixed assets are likely to flow into the enterprise; and
2) The cost of the fixed assets can be measured reliably.
(2) Measurement of fixed assets
The measurement of a fixed asset shall be made at its cost.
1) The cost of a purchased fixed asset consists of the purchase price, the relevant taxes, freight, loading 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 the Accounting
Standards No. 17 - Borrowing Costs.
3) The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the
asset to the expected conditions for use.
4) The cost invested to a fixed asset by the investor shall be recognized in accordance with the value as 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 financial leasing 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 annual depreciation rate
recognized according to the category, service life and expected net salvage value rate of fixed assets is as follows:
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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 asset.
For the fixed assets that have reached intended usable condition but not prepared the final account for completion,
their costs shall be recognized at their estimated value, and their depreciation shall be made accordingly; 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 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 or the depreciation method of a fixed asset, it shall be regarded as a change of 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 and otherwise incurred in the course of 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.
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The improvement expenditures incurred on a fixed asset leased by operating lease shall be capitalized and
reasonably amortized as long-term prepaid expenses.
20. Construction in progress
The term "construction in progress" refers to all necessary expenditures incurred before the acquired fixed assets
enable the project to reach expected usable condition, including project direct materials, direct employee
remunerations, installation costs for equipment to be installed and project construction, project management fees,
net profits and losses of project commissioning and approved capitalized borrowing costs.
(1) Valuation of construction in progress
The Company's construction in progress shall be measured individually by construction project and shall be
valuated at actual cost.
(2) Time point of carrying over construction in progress into fixed asset
When the construction in progress reaches the expected usable condition, they shall be transferred to fixed asset at
their actual cost. For the fixed assets that have reached expected usable condition but not prepared the final
account for completion, they shall be charged to the account at their estimated value and shall be adjusted after
their actual value is recognized.
21. 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 and otherwise 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) Time point of capitalization of borrowing costs.
The capitalization of borrowing costs commences only when all of the following conditions are satisfied:
a. Expenditures for the asset have been incurred;
b. Borrowing costs have been incurred; and
c. Activities relating to the acquisition, construction or production of the asset that are necessary to prepare the
asset for its intended use or sale have commenced.
2) Time point of ceasing capitalization of borrowing costs:
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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 into 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 which 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) Calculation of capitalized amounts 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) Where special funds are borrowed for the acquisition, construction or production of a qualifying asset, the
amount of interest to be capitalized shall be the actual interest expense incurred on that borrowing for the period
less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment
income on the temporary investment of those funds.
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 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 interests 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 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.
22. 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;
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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 uncertain service life.
With regard to an intangible asset with limited service life, its amortization amount shall be amortized by expected
realization pattern of its economic benefits, if the Company is unable to recognize the expected 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
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) General life cycle of products manufactured by using the assets and information about 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 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.
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2) Development expenditures in internal research and development projects shall be recognized as intangible
assets where they satisfy all of the following conditions:
a. Technical feasibility of completing the intangible asset so that it will be available for use or sale;
b. Intention to complete the intangible asset and use or sell it;
c. How the intangible asset will generate economic benefits, including the ability to demonstrate the existence of 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.
23. Impairment of long-term assets
On the balance sheet date, if there is any sign showing possible impairment of assets (referring to the assets 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 business reputation 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
business reputation 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 business reputation), 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 switched back in future accounting periods.
24. Long-term deferred expenses
Long-term deferred expenses refer to the expenses incurred by the Company but attributable to the current and
subsequent accounting periods of more than one year (excluding one year), including the expenses for
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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.
25. Contractual liabilities
Contract liability refers to the Company's obligation to transfer goods to customers for consideration 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.
26. Employees' wages and salaries
(1) Accounting treatment of short-term wages and salaries
In the accounting period during which employees provide services to the Company, the Company recognizes the
short-term wages and salaries actually incurred as liabilities and charges them to the current-period profits and
losses or relevant asset costs.
(2) Accounting treatment of separation benefits
Separation benefits are classified into the defined contribution plan and defined benefit plan
1) In the accounting period during which employees provide services to the Company, the Company recognizes
the amount to be deposited (calculated according to the defined contribution plan) as liabilities and charges it to
the current-period profits and losses or relevant asset costs.
2) Usually accounting treatment for the defined benefit plan consists of the following steps:
a. According to the projected unit credit method, adopt the unbiased and mutually consistent actuarial assumption
to estimate the demographic variables and financial variables, measure obligations generated by the defined
benefit plan, and determine the period to which relevant obligations belong;
b. In case that the defined benefit plan involves assets, recognize the deficit or surplus formed by reducing the fair
value of assets of the defined benefit plan from the present obligation value of the defined benefit plan as one net
liability or net asset of the defined benefit plan. If the defined benefit plan has any surplus, use the lower of the
defined benefit plan surplus and the upper asset limit to measure net assets of the defined benefit plan. The upper
asset limit refers to the present value of the economic interest that can be obtained by the Company from refund of
the defined benefit plan or by reducing the fund to be deposited for the defined benefit plan in the future;
c. At the end of the period, recognize the costs of employees' wages and salaries arising from the defined benefit
plan as the service costs, net interests of net liabilities or net assets of the defined benefit plan, and changes arising
from remeasurement of net liabilities or net assets of the defined benefit plan, wherein the service costs and net
interests of net liabilities or net assets of the defined benefit plan are recorded into the current-period profits/losses
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
or relevant asset costs, changes arising from remeasurement of net liabilities or net assets of the defined benefit
plan are recorded into other comprehensive income and cannot be reversed to profits/losses in the subsequent
accounting period, but such amount recognized in other comprehensive income can be transferred within the
equity scope;
d. Recognize a settlement gain or loss during settlement of the defined benefit plan.
(3) Accounting treatment of dismiss welfare
The liability of employees' wages and salaries that arises from the dismiss welfare shall be recognized on the
earlier one of the following two dates and charged to the current-period profits/losses:
1) When the Company cannot unilaterally cancel the dismiss welfare provided for the labor relationship
cancellation plan or staff reduction suggestion;
2) When the Company recognizes the cost or expense related to reconstruction involving dismiss welfare
payment.
(4) Accounting treatment of other long-term employee welfares
If other long-term employee welfares offered by the Company to employees comply with the defined contribution
plan, accounting treatment will be conducted according to the defined contribution plan; the long-term benefits
other than these will undergo accounting treatment according to the defined benefit plan. However, "changes
arising from remeasurement of net liabilities or net assets of the defined benefit plan" under relevant employees'
wages and salaries will be included into the current profits or losses or relevant asset costs.
27. Accrued liabilities
(1) Recognition of estimated liabilities
When the businesses related to contingencies such as external guarantee, pending action or arbitration, product
quality assurance, plan for layoffs, loss contract, restructuring obligations and fixed asset disposal obligations
meet all of the following conditions, they shall be recognized as liabilities:
1) The liabilities are present liabilities assumed by the Company;
2) The fulfillment of the liabilities might cause outflow of economic benefits from the enterprise.
3) The amount of the liabilities can be reliably measured.
(2) Measurement of estimated liabilities
The estimated liabilities shall be measured in accordance with the best estimate of the necessary expenses for the
performance of the current obligation. If there is a sequent range for the necessary expenses and if all the
outcomes within this range are equally likely to occur, the best estimate shall be recognized in accordance with the
middle estimate within the range. In other cases, the best estimate shall be recognized in accordance with the
following methods, respectively:
1) If the contingencies concern a single item, it shall be recognized in the light of the most likely outcome.
2) If the contingencies concern two or more items, the best estimate shall be calculated and recognized in
accordance with all possible outcomes and the relevant probabilities.
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When all or some of the expenses necessary for the liquidation of estimated liabilities of the company is expected
to be compensated by a third party or other parties, the compensation shall be separately recognized as an asset
only when it is virtually certain that the reimbursement will be obtained. The amount recognized for the
reimbursement shall not exceed the carrying amount of the recognized estimated liabilities.
28. Revenue
For the contract between the Company and the customer, the Company recognizes the revenue at the point when
the customer obtains control over the relevant goods and the following conditions are met simultaneously: 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 out 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
rewards of the ownership of the goods to the customer, that is, the customer has obtained the main risks and
rewards 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.
The Company's main sales of air conditioners and related products usually only include the performance
obligations of the transferred goods.
(1) Income from selling goods
1) For the income from domestic sales of products, the Company mainly adopts the form of payment in advance,
and recognizes the income when the product is outbound and delivered to the purchaser, the delivery order or
outbound order is issued, and the amount of income from product sales is determined;
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2) In terms of thee export sales income, the Company completes the customs declaration and port departure
procedures for the products according to the contract and obtains the bill of lading. The income is confirmed when
the amount of the sales revenue is determined.
(2) Income from rendering labor services
1) For the income from storage services, after the relevant labor services are provided, the Company will settle the
income on a monthly basis when the amount of income has been determined according to the working hours and
standard wages of the services provided, facilities used and related expenses;
2) For the income from material processing services, the Company will recognize the income when it processes
the materials according to the contract and delivers it to the customer to obtain the customer's receipt document,
and the amount of income is determined.
3) The Company's service charge and commission income include the service charge income of acceptance
business, service charge income of loan by mandate, etc.
For the service charge and commission income, the completion time point 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 abalienating the right to use assets
The income from abalienating the right to use assets includes the interest income, leasehold income, etc.
The Company confirms the income from abalienating the right to use assets when the income amount can be
reliably measured and the relevant economic benefits are likely to flow into the enterprise.
1) The interest income of the Company includes the income from the interest of the money deposited at a financial
enterprise and loan interest income. The income from the interest of the money deposited at a financial enterprise
is recognized by period according to the time of depositing and the actual interest rate. The loan interest income is
recognized when the Company grants self-operating loan and the interest is accrued by period. The loan interest
income is recognized according to the effective interest rate method.
The effective interest rate method means that the amortization cost of a financial asset or financial liability and
interest income or interest expenditure of each period are calculated according to its effective rate of interest. The
effective rate of interest refers to the interest rate used to discount the future cash flow of a financial asset or
financial liability within the expected period of existence or a shorter period to the current book value of the
financial asset or financial liability. When determining the effective rate of interest, the Company predicts the
future cash flow on the basis of considering all the contract terms of financial asset or financial liability, but does
not consider the loss of future credits. All the charges paid or collected by the Company and becoming a
constituent part of the effective rate of interest, transaction expense and transaction premium or discount shall be
considered when the effective rate of interest is determined.
2) The leasehold revenue recognition conditions of the Company are as follows:
a. The lease contract, agreement or other settlement notices recognized by the lessee are available;
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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.
29. Government subsidies
A government subsidy means the monetary and non-monetary assets obtained free by the Company from the
government, but excluding the capital invested by the government as the owner. Government subsidies consist of
the government subsidies pertinent to assets and government subsidies pertinent to income.
The Company defines the obtained government subsidies used for purchase or construction, or forming the
long-term assets by other ways as government subsidies pertinent to assets, and all the other government subsidies
as government subsidies pertinent to income. If the government document does not specify the subsidy object, the
following mode is adopted to classify the subsidies into government subsidies pertinent to income and
government subsidies pertinent to assets:
(1) If the government document specifies the project to which the subsidy aims, the amount is divided according
to the relative proportion of the paid amount to form assets to the paid amount to be recorded into expenses in the
budget of this specific project, and this division proportion needs to be checked on every balance sheet date and be
changed when necessary;
(2) If the government document provides only a general presentation of the purpose without specifying the
specific project, the subsidy shall be regarded as government subsidy pertinent to income.
The government subsidies pertinent to assets shall be recognized as deferred income and included in the profits
and losses by period according to the reasonable and systematic methods in the service life of the relevant asset
when this asset reaches the intended state of use. Where the relevant asset is sold, transferred, scrapped or
damaged before the service life ends, the related deferred income balance unallocated is transferred to the profits
and losses of the current period of asset disposal.
If the government subsidies pertinent to incomes are used for compensating the related expenses or losses in the
later period, they shall be recognized as deferred income when being obtained and shall be recorded into the
current-period profits and losses in the period when the relevant expenses or losses are recognized; if the
government subsidies pertinent to incomes are used for compensating the related cost expenses or losses incurred,
they shall be recorded into the current-period profits and losses directly when being obtained.
The government subsidies pertinent to daily activities shall be recorded in other incomes; the government
subsidies not pertinent to daily activities shall be recorded in the non-operating incomes and expenditures.
(3) The obtained subsidized interest of policy preference undergoes accounting treatment by differentiating the
following two obtaining ways:
a. Where the financial department disburses the discount fund to the loan bank so that the loan bank provides a
loan to the Company at the policy-based preferential interest rate, the fair value of loan is used as the entry value
of 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 borrowing is recognized as deferred income. The
deferred income is amortized using the effective interest rate method in the borrowing remaining period to offset
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the relevant borrowing cost.
b. Where the financial department disburses the discount fund to the Company directly, the corresponding
discount is used to offset the relevant borrowing cost.
(4) Where the government subsidies are monetary assets, they shall be measured according to the amount received
or receivable. Where the government subsidies of non-monetary assets, they shall be measured at the fair value; if
the fair value cannot be obtained in a reliable way, the subsidies shall be measured at the nominal amount. When a
government subsidy is actually received, the Company usually recognizes and measures it according to the
actually received amount. At the end of the period, however, if there is any exact evidence showing that the
Company complies with relevant conditions provided in the financial supporting policy and it is expected to
receive the capital support from the government, this subsidy shall be measured according to the amount
receivable. The government subsidy measured according to the amount receivable shall comply with all the
following conditions:
1) The amount of receivable subsidy has been confirmed by the authoritative government department by issuing a
document, or the subsidy can be independently and reasonably measured and calculated in accordance with
relevant provisions of the formally issued financial fund management measures and it is predicted that its amount
does not involve significant uncertainty;
2) The subsidy is based on the financially supported project that is formally released by the local financial
department and initiatively disclosed according to provisions of the Regulation of the People's Republic of China
on the Disclosure of Government Information, as well as its financial fund management measures, and the
management measures must be generous (any enterprise meeting the defined conditions can apply for the subsidy)
and are not formulated specially for specific enterprises;
3) Other conditions that shall be matched according to specific conditions of the Company and this matter of
subsidy.
30. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on the
difference (temporary difference) between the tax base of assets and liabilities and their carrying value. 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 business reputation, 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 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 obtain and which can be deducted from the deductible temporary differences, deductible losses
and tax deductions.
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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 satisfied:
the Company is able to control the timing of the reversal of the temporary differences; and it is likely that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for all
deductible temporary differences associated with investments in subsidiaries, joint ventures and associates if all of
the following conditions are satisfied: It is likely that the deductible temporary difference will reverse 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 tax assets and the deferred tax liabilities are offset and presented on a net basis when all of
conditions are satisfied:
a. deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same taxation
authority on the same taxable entity of the Company; and
b. the taxable entity of the Company has a legal right to settle current tax assets and liabilities on a net basis.
31. Lease
The term "lease" refers to an agreement under which the lessor conveys to the lessee in return for rent the right to
use an asset for an agreed period of time. Leases consist of financing leases and operating leases.
(1) Accounting treatment of financial lease
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financing lease:
a. The ownership of the leased asset is transferred to the lessee when the term of lease expires;
b. The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value
of the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can be
reasonably determined that the option will be exercised;
c. Even if the ownership of the asset is not transferred, the lease term covers the major part (over 75.00%
(included)) of the service life of the leased asset;
d. In the case of the lessee, the present value of the minimum lease payments on the lease beginning date amounts
to substantially all (over 90.00% (included)) of the fair value of the leased asset on the lease beginning date; in the
case of the lessor, the present value of the minimum lease receipts on the lease beginning date amounts to
substantially all (over 90.00% (included)) of the fair value of the leased asset on the lease beginning date; and
e. The leased assets are of a specialized nature that only the lessee can use them without making major
modifications.
A lease that does not satisfy the above conditions shall be recognized as an operating lease.
The fixed assets leased by financing lease shall be recorded into the account based on the lower of the fair value
of leased assets on the lease beginning date and the present value of the minimum lease payments, and a
depreciation of the said fixed assets shall be made in accordance with the depreciation policies for the depreciable
assets owned by the lessee.
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(2) Accounting treatment of operating lease
The rents paid by the lessee shall be recorded by the Company into the relevant asset costs or the profits and
losses of the current period by using the straight-line method over each period of the lease term. The direct costs
incurred from operating leases carried on by the Company shall be directly recorded into the profits and losses of
the current period. The contingent rents involved in the operating lease agreement shall be recorded into the
profits and losses of the current period in which they actually arise.
32. Discontinued operation
Discontinued operation refers to a constituent part that meets one of the following conditions and can be
distinguished separately, and this constituent part has been disposed of or classified into the category held for sale:
(1) This constituent part represents an independent main business or a separate main business area;
(2) This constituent part is one part of an associated plan for disposing of an independent main business or a
separate main business area;
(3) This constituent part is a subsidiary specially acquired for resale.
The Company lists the continuous operation profit and loss and discontinued operation profit and loss in 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 reversed
amount and profit and loss from disposal shall be listed as continuous operation profit and loss. The impairment
loss and reversed amount of discontinued operation and other operation profits and losses and profits and losses
from disposal shall be listed as discontinued operation profits and losses.
For the discontinued operation listed in the current period, in the current financial statements, the information
originally listed as continuous operation profit and loss is re-listed as discontinued operation profits and losses of
the comparable accounting period. Where the disposal group for discontinued use that is not for sale meets the
condition of the relevant constituent part in the definition of discontinued operation, it shall be listed as
discontinued operation from the date of discontinued use. Where the control right of a subsidiary is lost due to
reasons such as selling the investment into the subsidiary and this subsidiary complies with the definition of
discontinued operation, the relevant discontinued operation profits and losses shall be listed in the consolidated
income statement.
33. Segment report
The Company determines the operating segment based on the internal organizational structure, management
requirements and internal reporting system, determines the report segment based on the operating segment, and
discloses the segment information.
The operating segment refers to the constituent part in the Company that meets the following conditions at the
same time:
(1) This constituent part can generate income and cost in daily activities;
(2) The management of the Company can regularly evaluate the operating results of the constituent part so as to
decide configuration of resources to it and evaluate its performance;
(3) The Company can obtain the relevant accounting information of this constituent part such as its financial status,
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operating results and cash flows. If two or more operating segments have similar economic characteristics and
satisfy certain conditions, they can be combined into one operating segment.
34. Hedging
To avoid certain risks, the Company hedges certain financial instruments as hedging instruments. Hedge that
meets the prescribed conditions will be handled by the Company using hedge accounting methods. The
Company's hedging includes fair value hedge, cash flow hedge and hedge 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 engages in hedging. In addition, the Company will continue to assess the effectiveness
of the hedging when and after the hedging begins.
(1) Fair value hedge
For eligible hedging instruments designated as fair value hedge, the gains or losses generated thereby are included
in the current profits and losses. If a hedging instrument is hedged on a non-trading equity instrument investment
(or its component) that is selected to be measured at fair value and of which changes are included in other
comprehensive income, the gains and losses generated thereby are included in other comprehensive income. Gain
or loss of a hedged item due to hedging risk exposure is included in the current profits and losses, while adjusting
the book value of the hedged item. If a hedged item is measured at fair value, the gain or loss of the hedged item
due to hedging risk exposure does not need to adjust the book value of the hedged item, and the related gain and
loss are included in the current profits or losses or other comprehensive income.
When the Company revokes the designation of the hedging relationship, the hedging instrument has expired or is
sold, the contract is terminated or exercised, or the conditions for the use of hedging accounting is no longer met,
the use of hedging accounting is terminated.
(2) Cash flow hedge
For eligible hedging instruments designated as cash flow hedge, the portion of the gains or losses 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.
If the expected transaction causes the Company to subsequently recognize a non-financial asset or non-financial
liability, or 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 includes it in the initial recognition amount of the asset
or liability. For other cash flow hedging, the Company will, during the same period in which the hedged expected
cash flow affects the profit or loss, transfer out the amount of cash flow hedge reserve originally recognized in
other comprehensive income and includes it in the current profits and losses.
If it is expected that all or part of the net loss originally included in other comprehensive income cannot be
compensated in the future accounting period, the portion which cannot be compensated will be transferred out and
included in the current profits and losses.
When the Company terminates the use of hedging accounting for cash flow hedges, the accumulated cash flow
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hedge reserve that has been included in other comprehensive income will be retained when future cash flow
expectations still occur, and will be transferred out of other comprehensive income and included in the current
profits and losses when future cash flow expectations no longer occur.
(3) Hedge of net investment in an overseas operation
Hedge of net investment in overseas operations is accounted for using a method similar to the cash flow hedge.
Among the gains or losses of hedging instruments, the portion that is determined to be an effective hedge 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.
Gains and losses that have been included in other comprehensive income will be transferred out of other
comprehensive income and included in the current profits and losses when disposing of overseas operations.
35. Major accounting policies and accounting estimate changes
(1) Changes of major accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 14 - Revenues (Finance
and Accounting [2017] No. 22) (hereinafter referred to as "new revenue standards") on 5 July, 2017, requiring
companies listed at home and abroad at the same time and companies listed overseas and adopting IFRS or
Accounting Standards for Business Accounting to prepare financial statements to implement the new revenue
standards from 1 January, 2018; and requiring other domestic listed companies to implement the new revenue
standards from 1 January, 2020. Under the new revenue standards, the Company makes corresponding changes to
its accounting policies and implements the new revenue standards from 1 January, 2020.
Under the new revenue standards, the Company only adjusts the retained earnings at the beginning of 2020 and
the amount of other related items in the financial statements for the cumulative impact on the contract which has
not been fulfilled on the first implementation date.
Before and after the implementation of the new revenue standards, the main difference in revenue recognition
accounting policies is that the timing of revenue recognition changes from the transfer of risks and rewards to the
transfer of control. Before and after the implementation of the new revenue standards, the Company's business
model and contract terms remain unchanged, and there is no difference in the specific timing of revenue
recognition. The implementation of the new revenue standards has no significant impact on the operating income,
net profit attributable to the Company's common shareholders, total assets, and net assets attributable to the
company’s common shareholders in each year (end) before the first implementation date.
(2) Changes of major accounting estimates
None.
(3) Adjustments to relevant items in financial statements at the beginning of the period of the first
implementation year due to the first implementation of new revenue standards from 2020
Amount as at 31 December, 2019 (before change) Amount as at 1 January, 2020 (after change)
Report item
Parent company's Parent company's
Consolidated statements Consolidated statements
statements statements
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Current assets:
Accounts
8,513,334,545.08 3,873,270,521.33 8,439,719,697.00 3,873,270,521.33
receivable
Contract assets 73,614,848.08
Total current assets 213,364,040,964.83 191,741,346,310.18 213,364,040,964.83 191,741,346,310.18
Current liabilities:
Advances from
8,225,707,662.42 11,832,592,136.06 -
customers
Contractual
7,311,804,415.54 10,965,696,063.40
liabilities
Other current
65,181,491,855.14 64,375,139,451.87 66,095,395,102.02 65,242,035,524.53
liabilities
Total current liabilities 169,568,300,209.60 163,622,323,232.13 169,568,300,209.60 163,622,323,232.13
Description about adjustments: For the financial statements at the beginning of the period, the Company's
implementation of the new revenue standards only affects the reclassification of assets and liabilities, but has no
impact on the total assets, total liabilities and total net assets.
(4) Adjustments to relevant items in financial statements at the end of the period of the first implementation year
due to the first implementation of new revenue standards from 2020
Amount under the new revenue standards as at 31 Amount under the old revenue standards as at 31
December, 2020 December, 2020
Report item
Parent company's Parent company's
Consolidated statements Consolidated statements
statements statements
Current assets:
Accounts
8,738,230,905.44 3,548,791,695.27 8,816,776,431.04 3,548,791,695.27
receivable
Contract assets 78,545,525.60
Total current assets 213,632,987,164.66 190,395,751,656.57 213,632,987,164.66 190,395,751,656.57
Current liabilities:
Advances from
13,147,449,930.78 16,044,928,449.57
customers
Contractual
11,678,180,424.65 14,594,653,911.45
liabilities
Other current
64,382,254,283.54 59,737,975,078.14 62,912,984,777.41 58,287,700,540.02
liabilities
Total current liabilities 158,478,718,130.74 157,595,121,705.31 158,478,718,130.74 157,595,121,705.31
Description about adjustments: For the financial statements at the end of the period, the Company's
implementation of the new revenue standards only affects the reclassification of assets and liabilities, but has no
impact on the total assets, total liabilities and total net assets.
IV. Taxes
1. Main tax categories and tax rates
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Category Tax Base Tax Rate
Value added because of sales of
Added-value tax 13.00%, 9.00%, 6.00%, etc.
commodities or rendering of services
Urban maintenance &
Circulation taxes payable 7.00%, 5.00%
construction tax
Educational
Circulation taxes payable 3.00%
surcharges
Local education
Circulation taxes payable 2.00%
surcharge
Business income tax Taxable income 34.00%, 25.00%, 20.00%, 16.50%, 15.00%, etc.
[Note] The place of business of the Company's subsidiary Hong Kong Gree Electric Appliances Sales Limited is
Hong Kong Special Administrative Region, and the profit tax rate of Hong Kong is 16.50%; the place of business
of the Company's subsidiaries Gree (Brazil) Electric Appliances Co., Ltd. and Brazil United Electric Appliances
Industry and Commerce Co., Ltd. is Brazil, and the federal enterprise income tax rate of Brazil is 34.00%.
2. Tax preferences
(1) The Company was registered in Zhuhai, Guangdong, and has been enjoying the preferential policy for the high
and new tech enterprises (High-tech Enterprise Certificate No. GR202044007307). 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 2020
Time for acquiring the Valid
No. Name of tax payer Certificate number
certificate period
Three
1 Zhuhai Landa Compressor Co., Ltd. GR202044007788 9 December, 2020
years
Three
2 Zhuhai Gree Xinyuan Electronics Co., Ltd. GR201944009719 30 November, 2019
years
Three
3 Zhuhai Kaibang Motor Manufacture Co., Ltd. GR201844002288 28 November, 2018
years
Three
4 Zhuhai Gree Daikin Precision Mold Co., Ltd. GR201944005454 2 December, 2019
years
Three
5 Gree (Hefei) Electric Appliances Co., Ltd. GR202034000570 17 August, 2020
years
Gree Green Refrigeration Technology Center Co., Ltd. Three
6 GR202044006403 9 December, 2020
Of Zhuhai years
Three
7 Gree (Wuhan) Electric Appliances Co., Ltd. GR201942003097 28 November, 2019
years
Three
8 Gree (Zhengzhou) Electric Appliances Co., Ltd. GR202041001002 9 September, 2020
years
Three
9 Gree (Wuhu) Electric Appliances Co., Ltd. GR202034002197 17 August, 2020
years
Three
10 Gree (Shijiazhuang) Electric Appliances Co., Ltd. GR201913002804 2 December, 2019
years
Three
11 Zhuhai IVP Information Technology Co., Ltd. GR201944005394 2 December, 2019
years
Three
12 Changsha Gree HVAC Equipment Co., Ltd. GR202043000055 11 September, 2020
years
Three
13 Zhuhai Gree Precision Mold Co., Ltd. GR202044007901 9 December, 2020
years
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Time for acquiring the Valid
No. Name of tax payer Certificate number
certificate period
Three
14 GREE (Zhongshan) Home Appliances Co., Ltd. GR202044011848 9 December, 2020
years
Three
15 Hefei Kinghome Electrical Co., Ltd. GR201834001303 24 July, 2018
years
Three
16 Zhuhai Gree New Material Co., Ltd. GR201944009559 2 December, 2019
years
Three
17 Gree (Shijiazhuang) Small Home Appliances Co., Ltd. GR201913002825 2 December, 2019
years
Three
18 Zhuhai Gree Dakin Device Co., Ltd. GR201844007626 28 November, 2018
years
Zhuhai Gree Electrical and Mechanical Engineering Three
19 GR202044011411 9 December, 2020
Co., Ltd. years
Three
20 Gree TOSOT (Suqian) Home Appliances Co., Ltd. GR202032012986 2 December, 2020
years
Three
21 Gree (Hangzhou) Electric Appliances Co., Ltd. GR202033001006 1 December, 2020
years
Three
22 Hefei Landa Compressor Co., Ltd. GR202034001654 17 August, 2020
years
Three
23 Zhengzhou Landa Compressor Co., Ltd. GR202041001848 4 December, 2020
years
Three
24 Wuhan Landa Compressor Co., Ltd. GR202042001716 1 December, 2020
years
Three
25 Hefei Kaibang Motor Manufacture Co., Ltd. GR202034002198 17 August, 2020
years
Three
26 Henan Kaibang Motor Manufacture Co., Ltd. GR202041000105 9 September, 2020
years
Three
27 Gree Electric Enterprises (Ma'anshan) Ltd. GR202034001625 17 August, 2020
years
(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 tax payer Start time
1 Gree (Chongqing) Electric Appliances Co., Ltd. 1 January, 2008
2 Chongqing Landa Compressor Co., Ltd. 1 January, 2015
3 Chongqing Kaibang Motor Manufacture Co., Ltd. 1 January, 2013
4 Chengdu Gree Xinhui Medical Equipment Co., Ltd. 8 April, 2020
V. Item notes of consolidated financial statements
For the following note items (including notes to the main items of the parent company's financial statements),
unless otherwise specified, "the beginning of the period" means 1 January, 2020, "the end of the period" means 31
December, 2020, and "the end of the previous year" means 31 December, 2019, "the current year" refers to 2020,
and "the previous year" refers to 2019. Unless otherwise stated, the amount unit is RMB Yuan.
1. Monetary capital
Item Balance at the end of the period Beginning Balance
Cash on hand 468,623.79 1,357,064.14
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Balance at the end of the period Beginning Balance
Bank deposits 78,022,377,237.18 62,105,349,148.41
Other monetary capital [Note 1] 18,693,373,853.14 10,695,206,587.82
Deposits in central bank [Note 2] 2,039,998,699.60 3,016,086,870.50
Deposits in other banks 35,190,517,674.79 47,928,688,430.00
Subtotal 133,946,736,088.50 123,746,688,100.87
Including: Total amount deposited abroad 637,626,876.23 631,329,193.55
Accrued interest 2,466,407,771.31 1,654,027,166.77
Total 136,413,143,859.81 125,400,715,267.64
[Note 1] The balance at the end of the period of other monetary capital refers to banks' acceptance bill deposits,
guarantee deposits, letter of credit deposits, etc., where the restricted fund was RMB 18,297,513,521.07;
[Note 2] The statutory deposit reserve in the Company's deposits in central bank are RMB 2,037,889,970.12, and
its use is restricted;
[Note 3] Except the above situations, there are no other funds in the end-of-period balance of monetary funds that
have limited use and potential recovery risks due to mortgage, pledge or freezing.
2. Trading financial assets
Balance at the end
Item Beginning Balance
of the period
Financial assets measured at their fair values and of which the changes are
370,820,500.00 955,208,583.58
recorded into the current profits and losses
Including: Debt instrument investment 370,820,500.00 955,208,583.58
Total 370,820,500.00 955,208,583.58
3. Derivative financial assets
Item Balance at the end of the period Beginning Balance
Forward foreign exchange
285,494,153.96 92,392,625.69
settlement/sale
Total 285,494,153.96 92,392,625.69
4. Accounts receivable
(1) Accounts receivables is disclosed by account age
Account age Balance at the end of the period
Within 1 year 7,933,682,269.67
1 to 2 years 603,725,306.34
2 to 3 years 515,803,198.01
Over 3 years 438,137,210.08
Subtotal 9,491,347,984.10
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Account age Balance at the end of the period
Less: Bad debt provisions 753,117,078.66
Total 8,738,230,905.44
[Note] The Company's accounts receivable with the account age of over 1 year are mainly subsidy receivables of
RMB 1,121,467,230.00 for dismantling waste electrical and electronic products and receivables of RMB
273,816,766.58 for commercial coal-to-electricity, subway and other commercial air-conditioning projects.
(2) Accounts receivable is disclosed by category
Balance at the end of the period
Book balance Bad debt provision
Category
Percentage
Carrying amount
Percentage of
Amount Amount
(%) appropriati
on (%)
Accounts receivable with bad debt
125,518,248.51 1.32 125,518,248.51 100.00
provisions accrued separately
Accounts receivable with bad debt
provisions accrued according to the 9,365,829,735.59 98.68 627,598,830.15 6.70 8,738,230,905.44
combination
Including: account age combination 7,773,779,870.59 81.91 484,681,830.93 6.23 7,289,098,039.66
Low risk combination 1,592,049,865.00 16.77 142,916,999.22 8.98 1,449,132,865.78
Total 9,491,347,984.10 100.00 753,117,078.66 7.93 8,738,230,905.44
(Continued)
Beginning Balance
Book balance Bad debt provision
Category
Percentage
Carrying amount
Percentage of
Amount Amount
(%) appropriati
on (%)
Accounts receivable with bad debt
132,904,666.21 1.45 132,904,666.21 100.00
provisions accrued separately
Accounts receivable with bad debt
provisions accrued according to the 9,030,300,257.90 98.55 590,580,560.90 6.54 8,439,719,697.00
combination
Including: account age combination 7,743,407,932.90 84.51 486,153,539.81 6.28 7,257,254,393.09
Low risk combination 1,286,892,325.00 14.04 104,427,021.09 8.11 1,182,465,303.91
Total 9,163,204,924.11 100.00 723,485,227.11 7.90 8,439,719,697.00
1) Accounts receivable with bad debt provisions accrued separately:
Balance at the end of the period
Name
Percentage of Reason for
Book balance Bad debt provision
appropriation (%) appropriation
Expected to be difficult
A total of 10 units 125,518,248.51 125,518,248.51 100.00
to recover
Total 125,518,248.51 125,518,248.51 100.00 --
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
Account age Book balance Bad debt provision Percentage of appropriation (%)
Within 1 year 7,463,099,634.67 373,154,982.04 5.00
1 to 2 years 177,536,216.34 35,507,243.30 20.00
2 to 3 years 114,248,828.01 57,124,414.02 50.00
Over 3 years 18,895,191.57 18,895,191.57 100.00
Total 7,773,779,870.59 484,681,830.93 6.23
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
3) In the combination, the accounts receivable with bad debt provisions accrued by low risk combination
Balance at the end of the period
Name
Book balance Bad debt provision Percentage of appropriation (%)
Low risk combination 1,592,049,865.00 142,916,999.22 8.98
Total 1,592,049,865.00 142,916,999.22 8.98
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
(3) Bad debt provision appropriated, recovered or reversed in the current period
Change of the current period
Balance at the end
Category Beginning Balance Changes in the
Recovered or of the period
Appropriation Wrote-off consolidation
reversed
scope
Accrued
132,904,666.21 7,385,343.48 1,074.22 125,518,248.51
separately
Account age
486,153,539.81 5,712,733.52 7,880.50 4,248,905.14 484,681,830.93
combination
Low risk
104,427,021.09 38,489,978.13 142,916,999.22
combination
Total 723,485,227.11 38,489,978.13 13,098,077.00 8,954.72 4,248,905.14 753,117,078.66
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Particulars on accounts receivable actually wrote-off in the current period
Item Wrote-off amount
A total of 3 units 8,954.72
[Note] There was no significant writing-off of accounts receivable during the current period.
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
Percentage (%) in the total
Balance at the end of the period Balance of provision for bad debts at
Name of entity balance at the end of the period
of accounts receivable the end of the period
of accounts receivable
First 1,592,049,865.00 16.77 142,916,999.22
Second 838,838,926.80 8.84 41,941,946.34
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Percentage (%) in the total
Balance at the end of the period Balance of provision for bad debts at
Name of entity balance at the end of the period
of accounts receivable the end of the period
of accounts receivable
Third 421,266,292.15 4.44 21,063,314.61
Fourth 252,078,651.19 2.66 12,603,932.56
Fifth 226,116,412.62 2.38 11,305,820.63
Total 3,330,350,147.76 35.09 229,832,013.36
(6) Accounts receivable derecognized due to the transfer of financial assets
None.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivable
None.
5. Receivables financing
(1) Receivables financing is presented by category
Balance at the end of the
Item Beginning Balance
period
Notes receivable measured at fair value 20,973,404,595.49 28,226,248,997.12
Including: Bank acceptance bills 20,972,269,154.21 28,180,783,659.30
Including: Notes accepted by Gree Finance Company 1,105,774,342.96 3,534,750,791.04
Commercial acceptance bills 1,135,441.28 45,465,337.82
Total 20,973,404,595.49 28,226,248,997.12
[Note] For the specific basis for recognition of this combination, refer to Note III. 11.
(2) Receivables financing pledged by the Company at the end of the period
Item Pledged amount at the end of the period
Bank acceptance bills 10,145,874,359.07
Total 10,145,874,359.07
(3) Receivables financing that has been endorsed or discounted by the Company at the end of the period but not
yet due at the balance sheet date
Amount whose recognition is Amount whose recognition is not terminated
Item
terminated at the end of the period at the end of the period
Bank acceptance bills [Note] 37,016,180,562.63 4,585,817,500.00
Commercial acceptance bills 2,772,280.94
Total 37,016,180,562.63 4,588,589,780.94
[Note] The acceptor of bank acceptance bills not derecognized at the end of the period mentioned above is Zhuhai
Gree Group Finance Company Limited, a subsidiary of the Company, which has the final acceptance
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
responsibility for the discount or endorsement.
(4) Receivables financing transferred by the Company into accounts receivable due to the note issuer's failure of
performance
None.
(5) Receivables financing actually wrote-off in the current period
None.
6. Prepayment
(1) The prepayments are listed by account age as follows:
Balance at the end of the period Beginning Balance
Account age
Amount Percentage (%) Amount Percentage (%)
Within 1 year 3,103,519,802.42 99.18 2,375,291,199.19 99.15
1 to 2 years 17,658,164.08 0.56 16,328,421.09 0.68
2 to 3 years 5,665,338.67 0.18 1,401,531.66 0.06
Over 3 years 2,358,698.07 0.08 2,589,403.32 0.11
Total 3,129,202,003.24 100.00 2,395,610,555.26 100.00
(2) Prepayments of the current period whose account age exceeded one year and amount was important
None.
(3) Prepayments of top 5 prepayment objects in the balance at the end of the period collected by the prepayment
object
The aggregate balance amount of prepayments of top 5 suppliers in the balance at the end of the period collected
by the supplier was RMB 1,486,335,222.60, accounting for 47.50% of the total balance of prepayments at the end
of the period.
7. Other receivables
Item Balance at the end of the period Beginning Balance
Other receivables 147,338,547.86 159,134,399.10
Total 147,338,547.86 159,134,399.10
[Note] The Company had no interest receivable and dividend receivable balances at the end of the period and the
beginning of the period.
(1) Classification of other receivables by the nature of money
Book balance at the beginning of the
Nature of money Book balance at the end of the period
period
Current and low-risk payments 165,954,624.87 177,704,695.37
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Book balance at the beginning of the
Nature of money Book balance at the end of the period
period
Less: Bad debt provisions 18,616,077.01 18,570,296.27
Total 147,338,547.86 159,134,399.10
(2) Particulars on accruing of bad debt provisions
Phase 1 Phase 2 Phase 3
Bad debt provision Expected credit Expected credit loss for the Expected credit loss for the Total
losses in the next entire duration (no credit entire duration (credit
12 months impairment occurred) impairment occurred)
Balance as at 1 January, 2020 8,096,833.06 10,473,463.21 18,570,296.27
Appropriation for the current
18,370.11 18,370.11
period
Reserved in the current
1,770,917.91 1,770,917.91
period
Wrote-off in the current
50,920.20 50,920.20
period
Changes in the consolidation
scope during the current 1,051,982.28 797,266.46 1,849,248.74
period
Balance as at 31 December,
7,377,897.43 11,238,179.58 18,616,077.01
2020
(3) Disclosure by account age
Account age Book balance
Within 1 year 151,127,945.46
1 to 2 years 2,800,662.90
2 to 3 years 2,695,938.99
Over 3 years 9,330,077.52
Subtotal 165,954,624.87
Less: Bad debt provisions 18,616,077.01
Total 147,338,547.86
(4) Bad debt provision appropriated, recovered or reversed in the current period
Change of the current period
Balance at the end
Category Beginning Balance
Appropriatio Recovered or Changes in the of the period
Wrote-off
n reversed consolidation scope
Account age
18,570,296.27 18,370.11 1,770,917.91 50,920.20 1,177,748.74 17,944,577.01
combination
Low risk
671,500.00 671,500.00
combination
Total 18,570,296.27 18,370.11 1,770,917.91 50,920.20 1,849,248.74 18,616,077.01
[Note] There was no significant reversal or recovery of bad debt provisions during current period.
(5) Particulars on other receivables actually wrote-off in the current period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Wrote-off amount
A total of 5 units 50,920.20
[Note] There was no significant writing-off of other receivables during the current period.
(6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
Proportion to the total Balance of
Balance at the end balance of other provision for bad
Name of entity Nature of money Account age
of the period receivables at the end of debts at the end of
the period (%) the period
First Intercourse funds 28,070,764.04 Within 1 year 16.91 1,403,538.20
Second Low-risk money 9,000,000.00 Within 1 year 5.42 355,500.00
Third Low-risk money 8,000,000.00 Within 1 year 4.82 316,000.00
Fourth Intercourse funds 7,162,906.75 Within 1 year 4.32 358,145.34
Fifth Intercourse funds 5,483,816.35 Within 1 year 3.30 274,190.82
Total -- 57,717,487.14 -- 34.77 2,707,374.36
(7) Receivables involving government subsidies
None.
(8) Other receivables derecognized due to the transfer of financial assets
None.
(9) Assets and liabilities formed due to the transfer and continuous involvement of other receivables
None.
8. Inventories
(1) Classification of inventories
Balance at the end of the period
Provision for the loss on decline
Item
in value of inventories or
Book balance Carrying amount
provision for the impairment of
contract performance cost
Raw material 8,959,268,217.85 388,954,526.10 8,570,313,691.75
Goods in process and contract
2,046,139,363.33 2,046,139,363.33
performance cost
Finished goods 15,761,579,871.16 108,259,680.25 15,653,320,190.91
Development cost [Note] 1,609,731,913.40 1,609,731,913.40
Total 28,376,719,365.74 497,214,206.35 27,879,505,159.39
(Continued)
Item Beginning Balance
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Provision for the loss on decline in
value of inventories or provision for
Book balance Carrying amount
the impairment of contract
performance cost
Raw material 10,313,734,271.81 207,784,826.11 10,105,949,445.70
Goods in process and contract
1,833,675,212.23 1,833,675,212.23
performance cost
Finished goods 11,120,744,840.53 49,841,301.93 11,070,903,538.60
Development cost 1,074,325,867.76 1,074,325,867.76
Total 24,342,480,192.33 257,626,128.04 24,084,854,064.29
[Note] The development cost is a supporting project of Luoyang base real estate developed and constructed by the
Company based on the housing needs of employees.
(2) Provision for obsolete stocks
Increased amount in the Decreased amount in the
current period current period Balance at the end of the
Item Beginning Balance
period
Appropriation Write-off amount
Raw material 207,784,826.11 256,488,647.08 75,318,947.09 388,954,526.10
Finished
49,841,301.93 80,148,006.02 21,729,627.70 108,259,680.25
goods
Total 257,626,128.04 336,636,653.10 97,048,574.79 497,214,206.35
Specific bases for making a provision for decline in value of inventories and reasons of reversing or writing off
the provision for decline in value of inventories in the current period:
Specific basis for making a provision for decline in value of Writing off the provision for decline in value of
Item
inventories inventories in the current period
Raw material The lower of the inventory cost and net realizable value Applied for or sold in the current period
Finished goods The lower of the inventory cost and net realizable value Sold in the current period
(3) The inventory balance at the end of the period did contain capitalized amounts of borrowing costs
None.
(4) Amortization amount of the current period of contract performance cost
None.
9. Contract assets
(1) Contract assets are disclosed by account age
Account age Balance at the end of the period
Within 1 year 57,650,874.29
1 to 2 years 26,198,716.11
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2 to 3 years 5,636,444.31
Over 3 years 2,300,800.00
Subtotal 91,786,834.71
Less: provision for impairment 13,241,309.11
Total 78,545,525.60
(2) Contract assets are disclosed by category
Balance at the end of the period Beginning Balance
Item
Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Account age
91,786,834.71 13,241,309.11 78,545,525.60 81,819,226.44 8,204,378.36 73,614,848.08
combination
Total 91,786,834.71 13,241,309.11 78,545,525.60 81,819,226.44 8,204,378.36 73,614,848.08
[Note] The book value of contract assets did not change significantly during the current period.
(3) Particulars on impairment provisions accrued for contract assets in the current period:
Appropriation for Reserved in the Resold/wrote-off in the Balance at the end of
Item Beginning Balance
the current period current period current period the period
Account age
8,204,378.36 5,036,930.75 13,241,309.11
combination
Total 8,204,378.36 5,036,930.75 13,241,309.11
10. Non-current assets due within one year
Balance at the end of the
Item Beginning Balance
period
Other debt investments due within one year 410,404,100.00
Debt investments due within one year 18,000,000.00
Subtotal 428,404,100.00
Accrued interest 16,993,610.39
Total 445,397,710.39
11. Other current assets
Item Balance at the end of the period Beginning Balance
Structured deposits and wealth management products 8,274,000,000.00 16,211,800,000.00
Input tax to be deducted and prepaid tax 2,532,692,156.12 3,744,248,963.45
Notes which have been endorsed or discounted but not yet due
4,588,589,780.94 2,876,918,995.36
[Note]
Hedging tools and others 104,308,689.13 37,399,876.25
Subtotal 15,499,590,626.19 22,870,367,835.06
Accrued interest 117,711,287.68 220,776,381.62
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Balance at the end of the period Beginning Balance
Total 15,617,301,913.87 23,091,144,216.68
[Note] As of the disclosure date of this report, the accepted amount of the notes that have endorsed or discounted
but have not yet expired was RMB 1,695,817,500.00.
12. Disbursement of loans statements and advances
(1) Distribution of enterprises and individuals
Balance at the end of the
Item Beginning Balance
period
Disbursement of loans statements and advances measured at
amortized costs:
Disbursement of corporate loans and advances 5,403,251,177.80 14,771,705,384.26
Including: (1) Loan 3,857,680,000.00 14,723,530,000.00
(2) Discount 1,545,571,177.80 48,175,384.26
Including: discount asset interest adjustment -7,547,171.66 -470,366.74
Less: loan loss provision 135,269,958.74 369,304,393.78
Including: combined appropriation 135,269,958.74 369,304,393.78
Subtotal 5,267,981,219.06 14,402,400,990.48
Accrued interest 5,824,362.46 21,385,418.74
Book value of disbursement of corporate loans and advances 5,273,805,581.52 14,423,786,409.22
[Note] During the current period, affected by the epidemic, the business scale of member units and upstream and
downstream enterprises fell, and the Company carefully verified the credit information and repayment ability of
loan customers, so the scale of disbursement of loans and advances declined to a certain extent.
(2) Changes in loss provision for loans
Balance at the end of the
Item Beginning Balance
period
Disbursement of loans statements and advances measured at amortized
costs:
Beginning Balance 369,304,393.78 232,937,547.86
Appropriation for the current period -234,034,435.04 136,366,845.92
Balance at the end of the period 135,269,958.74 369,304,393.78
13. Other debt investments
(1) Particulars on other debt investments
Item Balance at the end of the period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Accumulate
d loss
provisions
Accrued Changes in fair
Cost Carrying amount recognized
interest value
in other
comprehens
ive income
Treasuries 292,922,755.76 3,378,082.20 2,565,844.24 298,866,682.20
Corporate bonds 199,243,635.63 1,890,410.97 2,201,564.37 203,335,610.97
Subtotal 492,166,391.39 5,268,493.17 4,767,408.61 502,202,293.17
Less: Other debt investments due within
one year
Total 492,166,391.39 5,268,493.17 4,767,408.61 502,202,293.17
(Continued)
Beginning Balance
Accumulat
ed loss
provisions
Item Changes in fair recognized
Cost Accrued interest Carrying amount
value in other
comprehen
sive
income
Treasuries 291,763,065.93 3,378,082.20 1,695,134.07 296,836,282.20
Corporate bonds 409,921,468.45 16,385,260.26 482,631.55 426,789,360.26
Subtotal 701,684,534.38 19,763,342.46 2,177,765.62 723,625,642.46
Less: Other debt investments due within
409,921,468.45 16,385,260.26 482,631.55 426,789,360.26
one year
Total 291,763,065.93 3,378,082.20 1,695,134.07 296,836,282.20
(2) Important other debt investments
Balance at the end of the period Beginning Balance
Other debt items Real Real
Coupon Coupo
Face value interest Date due Face value interest Date due
rate n rate
rate rate
16 Interest-bearing 4 August, 4 August,
200,000,000.00 2.74% 3.10% 200,000,000.00 2.74% 3.10%
treasuries 17 2026 2026
16 Interest-bearing 4 August, 4 August,
100,000,000.00 2.74% 3.44% 100,000,000.00 2.74% 3.44%
treasuries 17 2026 2026
18 August,
17 Baoanji MTN001 60,000,000.00 6.20% 6.24%
2020
10 State grid bonds 5 February,
350,000,000.00 4.74% 4.98%
01 2020
23
20 Nongfa 08 200,000,000.00 3.45% 3.54% September,
2025
Total 500,000,000.00 —— —— —— 710,000,000.00 —— —— ——
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
14. Long-term equity investment
Beginning Balance Increase/Decrease in the current period Balance at the end of the period
Name of invested entities Investment Adjustment of Cash dividends
Provision
Provision for Additional profits/losses other Changes in or profits Provision for
Original value Disinvestment for Others Original value
impairment investment recognized under the comprehensive other equities declared to impairment
impairment
equity method income distribute
1. Joint venture
Songyuan Grain Group
74,672,147.86 150,000,000.00 24,532,722.21 2,932,373.42 -246,272,496.65
Co., Ltd. [Note 1]
Subtotal 74,672,147.86 150,000,000.00 24,532,722.21 2,932,373.42 -246,272,496.65
2. Associates
Gree (Vietnam) Electric
1,940,009.35 1,940,009.35 1,940,009.35 1,940,009.35
Appliances, Inc.
Liaowang All Media
31,511,790.36 1,574,756.85 2,966,412.88 36,052,960.09
Communication Co., Ltd.
Beijing Gree Technology
2,701,833.71 -407,582.62 2,294,251.09
Co., Ltd.
Chongqing Pargo
Mechanical Equipment 11,565,505.21 -316,275.18 11,249,230.03
Co., Ltd.
Gree Volinco (Hong
924,327.19 1,169,388.58 427,819.56 -182,758.17
Kong) Ltd.
Wuhan Digital Design
and Manufacturing
14,574,841.85 154,246.07 14,729,087.92
Innovation Center Co.,
Ltd.
Hunan Guoxin
Semiconductor 10,010,170.50 10,000,000.00 89,674.97 20,099,845.47
Technology Co., Ltd.
Zhuhai Ronglin Equity
Investment Partnership 6,867,715,580.60 -21,142,722.89 215,136,201.85 7,061,709,059.56
(Limited Partnership)
Henan Yuze Finance
50,509,964.01 1,286,191.49 509,963.75 51,286,191.75
Leasing Co., Ltd.
Zhuhai Hanling Equity
Investment Partnership
920,000,000.00 29,115,512.75 26,695,076.52 922,420,436.23
(Limited Partnership)
[Note 2]
Subtotal 6,991,454,022.78 1,940,009.35 930,000,000.00 1,169,388.58 10,781,621.00 214,953,443.68 2,966,412.88 27,205,040.27 8,121,781,071.49 1,940,009.35
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Beginning Balance Increase/Decrease in the current period Balance at the end of the period
Name of invested entities Investment Adjustment of Cash dividends
Provision
Provision for Additional profits/losses other Changes in or profits Provision for
Original value Disinvestment for Others Original value
impairment investment recognized under the comprehensive other equities declared to impairment
impairment
equity method income distribute
Total 7,066,126,170.64 1,940,009.35 1,080,000,000.00 1,169,388.58 35,314,343.21 214,953,443.68 2,966,412.88 30,137,413.69 -246,272,496.65 8,121,781,071.49 1,940,009.35
[Note 1] In September 2020, according to the capital increase and share expansion agreement signed by the company and Songyuan Financial Investment
Management Center, a shareholder of the Company's joint venture Songyuan Grain Group Co., Ltd., the Company increased the capital to Songyuan Grain by RMB
150,000,000.00, with the shareholding ratio increasing from 50.00% to 75.00%, and the industrial and commercial registration change was completed on 14
September, 2020. On 31 December, 2020, Songyuan Grain's board of directors was re-elected with 5 board members, and the Company elected 4 directors of them,
accounting for 80.00% of all members of the board of directors. According to the Articles of Association of Songyuan Grain, the Company had control over
Songyuan Grain. At the end of the period, Songyuan Grain was included in the scope of consolidation. Long-term equity investment was accounted by the cost
method other than the equity method, and the book value of the original long-term equity investment was transferred into the initial investment cost of long-term
equity investment accounted by the cost method.
[Note 2] For the current period, the Company's wholly-owned subsidiary Zhuhai IVP Information Technology Co., Ltd. invested RMB 920,000,000.00 as a limited
partner into Zhuhai Hanling Equity Investment Partnership (Limited Partnership), which is mainly engaged in equity investment in industry chain companies related
to semiconductor and 5G technology.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
15. Other equity instrument investments
(1) Particulars on other equity instrument investments
Item Balance at the end of the period Beginning Balance
Shanghai Highly (Group) Co., Ltd. 667,802,216.81 775,199,650.33
Xinjiang Joinworld Company Limited 215,172,336.36 210,550,455.81
Wingtech Technology Co., Ltd. [Note 1] 3,550,040,505.00 3,316,957,037.50
RSMACALLINE-HSHS 254,461,858.93 341,894,553.87
San'an Optoelectronics Co., Ltd. [Note 2] 3,093,928,974.37
COFCO Trading (Suibin) Agricultural Development
7,000,000.00
Co., Ltd.
Total 7,788,405,891.47 4,644,601,697.51
[Note 1] The Company directly holds 35,858,995 shares of Wingtech Technology Co., Ltd., and the sale of such shares is restricted for 36 months from the date of
registration of the newly-added shares;
[Note 2] For the current period, the Company subscribed for 114,547,537 non-publicly issued shares of San'an Optoelectronics Co., Ltd. with its self-owned funds of
RMB 2,000,000,000.00, with a shareholding ratio of 2.56%. The sale of such shares is restricted for 36 months from the date of registration of the newly-added
shares.
(2) Particulars on non-trading equity instrument investment
Reason for
Amount the amount
transferred from transferred
Reason for designation
Dividend other from other
as at fair value through
Item Name income Accumulated gains Accumulated losses comprehensive comprehens
other comprehensive
recognized income into ive income
income
retained into
earnings retained
earnings
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Reason for
Amount the amount
transferred from transferred
Reason for designation
Dividend other from other
as at fair value through
Item Name income Accumulated gains Accumulated losses comprehensive comprehens
other comprehensive
recognized income into ive income
income
retained into
earnings retained
earnings
According to the
Shanghai Highly (Group) Co., management's intention
17,265,162.85 474,800,740.04
Ltd. and contractual cash
flow
According to the
Xinjiang Joinworld Company management's intention Partial sale
2,752,293.54 59,849,259.12 19,987,915.96
Limited and contractual cash of shares
flow
According to the
management's intention
Wingtech Technology Co., Ltd. 5,378,849.25 2,665,040,508.40
and contractual cash
flow
According to the
management's intention
San'an Optoelectronics Co., Ltd. 1,093,928,974.37
and contractual cash
flow
According to the
management's intention
RSMACALLINE-HSHS 12,924,322.85 404,350,382.71
and contractual cash
flow
Total 38,320,628.49 3,818,818,741.89 879,151,122.75 19,987,915.96
16. Other non-current financial assets
Balance at the end of the
Item Beginning Balance
period
Financial assets measured at their fair values and of which the changes are
2,003,483,333.33 2,003,483,333.33
recorded into the current profits and losses
Including: trust products 2,003,483,333.33 2,003,483,333.33
Total 2,003,483,333.33 2,003,483,333.33
17. Investment real estate
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Investment real estate using cost measurement model
Item Houses and buildings Total
I. Total of original carrying amount
1. Beginning balance 703,795,397.10 703,795,397.10
2. Increased amount in the current period 45,403,141.22 45,403,141.22
Including:(1) Transfer-in from fixed assets 42,951,618.75 42,951,618.75
(2) Transfer-in from construction in progress 2,451,522.47 2,451,522.47
3. Decreased amount in the current period 42,540,103.02 42,540,103.02
Including: Transfer into fixed assets 42,540,103.02 42,540,103.02
4. Balance at the end of the period 706,658,435.30 706,658,435.30
II. Accumulated depreciation and accumulated amortization
1. Beginning balance 205,146,705.25 205,146,705.25
2. Increased amount in the current period 48,213,778.91 48,213,778.91
Including: (1) appropriation or amortization 38,536,870.05 38,536,870.05
(2) Transfer-in from fixed assets 9,676,908.86 9,676,908.86
3. Decreased amount in the current period 10,122,910.25 10,122,910.25
Including: Transfer into fixed assets 10,122,910.25 10,122,910.25
4. Balance at the end of the period 243,237,573.91 243,237,573.91
III. Provision for impairment
1. Beginning balance
2. Increased amount in the current period
3. Decreased amount in the current period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Houses and buildings Total
4. Balance at the end of the period
IV. Carrying amount
1. Carrying amount at the end of the period 463,420,861.39 463,420,861.39
2. Carrying amount at the beginning of the period 498,648,691.85 498,648,691.85
[Note] As of 31 December, 2020, the book value of investment real estate - houses and buildings of which the Company has not obtained the
property ownership certificates was RMB 47,091,436.92.
18. Fixed assets
Item Balance at the end of the period Beginning Balance
Fixed assets 18,983,485,128.88 19,111,024,793.28
Fixed assets in liquidation 7,039,959.06 10,905,963.76
Total 18,990,525,087.94 19,121,930,757.04
[Note] The fixed assets in the table above refer to the fixed assets after deduction of the fixed assets in liquidation.
(1) Information of fixed assets
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipments Total
equipment
1. Total of original carrying amount:
1. Beginning balance 16,308,346,541.92 15,066,839,010.59 1,098,745,908.47 1,428,923,983.60 451,726,740.23 34,354,582,184.81
2. Increased amount in the current period 1,080,298,026.70 1,834,546,239.94 85,799,675.40 283,944,842.56 73,927,719.71 3,358,516,504.31
Including: (1) Procurement 1,355,973,321.64 81,820,961.66 282,524,178.35 72,913,748.00 1,793,232,209.65
(2) Transfer-in from
951,229,567.70 445,685,385.89 1,396,914,953.59
construction in progress
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipments Total
equipment
(3) Increase by business
86,528,355.98 32,887,532.41 3,978,713.74 1,420,664.21 1,013,971.71 125,829,238.05
combination
(4) Amount transferred into
42,540,103.02 42,540,103.02
investment real estate
3. Decreased amount in the current period 42,951,618.75 146,213,511.70 15,130,725.98 15,606,746.87 22,488,696.89 242,391,300.19
Including: (1) Disposal or scrapping 146,213,511.70 15,130,725.98 15,606,746.87 22,488,696.89 199,439,681.44
(2) Transfer into investment real
42,951,618.75 42,951,618.75
estate
4. Difference arising from translation of
-40,902,758.22 -15,600,751.41 -867,866.03 -636,058.43 -541,835.46 -58,549,269.55
financial statements in foreign currency
5. Balance at the end of the period 17,304,790,191.65 16,739,570,987.42 1,168,546,991.86 1,696,626,020.86 502,623,927.59 37,412,158,119.38
II. Accumulated depreciation
1. Beginning balance 4,459,757,662.14 8,419,614,480.38 720,270,236.75 1,269,129,123.13 357,450,229.78 15,226,221,732.18
2. Increased amount in the current period 1,022,568,689.56 1,884,080,477.93 157,047,328.21 267,843,059.67 39,652,620.54 3,371,192,175.91
Including: (1) Appropriation 1,001,034,619.35 1,877,641,590.24 154,988,130.53 266,939,954.96 38,237,721.91 3,338,842,016.99
(2) Amount transferred into
10,122,910.25 10,122,910.25
investment real estate
(3) Increase by business
11,411,159.96 6,438,887.69 2,059,197.68 903,104.71 1,414,898.63 22,227,248.67
combination
3. Decreased amount in the current period 9,676,908.86 119,065,403.98 14,083,987.09 13,585,761.08 18,635,042.68 175,047,103.69
Including: (1) Disposal or scrapping 119,065,403.98 14,083,987.09 13,585,761.08 18,635,042.68 165,370,194.83
(2) Transfer into investment real
9,676,908.86 9,676,908.86
estate
4. Difference arising from translation of
-946,766.61 -8,310,025.94 -263,872.67 -608,854.58 -326,499.36 -10,456,019.16
financial statements in foreign currency
5. Balance at the end of the period 5,471,702,676.23 10,176,319,528.39 862,969,705.20 1,522,777,567.14 378,141,308.28 18,411,910,785.24
III. Provision for impairment
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipments Total
equipment
1. Beginning balance 13,788,472.27 3,100,613.50 8,282.39 131,160.63 307,130.56 17,335,659.35
2. Increased amount in the current period
3. Decreased amount in the current period 167,803.12 167,803.12
Including: Disposal or scrap 167,803.12 167,803.12
4. Difference arising from translation of
-405,650.97 -405,650.97
financial statements in foreign currency
5. Balance at the end of the period 13,788,472.27 2,694,962.53 8,282.39 131,160.63 139,327.44 16,762,205.26
IV. Carrying amount
1. Carrying amount at the end of the period 11,819,299,043.15 6,560,556,496.50 305,569,004.27 173,717,293.09 124,343,291.87 18,983,485,128.88
2. Carrying amount at the beginning of the
11,834,800,407.51 6,644,123,916.71 378,467,389.33 159,663,699.84 93,969,379.89 19,111,024,793.28
period
[Note] As of 31 December, 2020, the book value of fixed assets - houses and buildings that the Company has not obtained the property ownership certificates was
RMB 5,879,273,020.73.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(2) Information of temporary idle fixed assets
None.
(3) Information of fixed assets leased in through financing leases
None.
(4) Information of fixed assets leased out through operating leases
None.
(5) Fixed assets in liquidation
Item Balance at the end of the period Beginning Balance
Fixed assets in liquidation 7,039,959.06 10,905,963.76
Total 7,039,959.06 10,905,963.76
19. Construction in Progress
Item Balance at the end of the period Beginning Balance
Construction in Progress 4,016,082,730.07 2,431,051,409.94
Total 4,016,082,730.07 2,431,051,409.94
[Note] The construction in progress in the above table refers to the construction in progress after deduction of
engineering materials.
(1) Information of construction in progress
Balance at the end of the period Beginning Balance
Item Provision Provision
Book balance for Carrying amount Book balance for Carrying amount
impairment impairment
Gree Nanjing
1,141,086,342.69 1,141,086,342.69 333,459,029.75 333,459,029.75
Project
Gree Luoyang
1,046,021,393.89 1,046,021,393.89 442,202,237.46 442,202,237.46
Project
Gree HQ project 570,077,306.55 570,077,306.55 262,245,182.66 262,245,182.66
Gree Chengdu
260,766,823.26 260,766,823.26 36,203,794.46 36,203,794.46
Project
Gree Wuhan project 201,062,491.78 201,062,491.78 104,859,292.68 104,859,292.68
Gree Energy Project 150,133,461.00 150,133,461.00 8,781,438.20 8,781,438.20
Gree Hangzhou
145,541,748.96 145,541,748.96 638,157,589.99 638,157,589.99
project
Wu'an Precision
130,390,603.41 130,390,603.41 113,318,790.64 113,318,790.64
Project
Zhuhai Landa
79,117,085.15 79,117,085.15 132,330,042.15 132,330,042.15
Project
Gree Gaolan Port
62,939,878.48 62,939,878.48
Project
200
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of the period Beginning Balance
Item Provision Provision
Book balance for Carrying amount Book balance for Carrying amount
impairment impairment
Gree Zhengzhou
43,680,322.62 43,680,322.62 59,928,438.47 59,928,438.47
project
Others 185,265,272.28 185,265,272.28 299,565,573.48 299,565,573.48
2,431,051,409.9
Total 4,016,082,730.07 4,016,082,730.07 2,431,051,409.94
4
(2) Current-period changes in important construction projects in progress
Amount
transferred
Amount Including:
into
Increased amount transferred into Amount of
Beginning investment Balance at the
Item Name in the current fixed assets capitalization of
Balance real estate end of the period
period during the interests for the
during the
current period current period
current
period
Gree Nanjing
333,459,029.75 807,627,312.94 1,141,086,342.69 32,349,138.79
Project
Gree Luoyang
442,202,237.46 603,819,156.43 1,046,021,393.89
Project
Gree HQ project 262,245,182.66 325,415,305.13 17,583,181.24 570,077,306.55
Gree Chengdu
36,203,794.46 227,395,480.68 2,832,451.88 260,766,823.26 6,350,168.86
Project
Gree Wuhan
104,859,292.68 110,932,985.42 14,729,786.32 201,062,491.78
project
Gree Energy
8,781,438.20 141,352,022.80 150,133,461.00
Project
Gree Hangzhou
638,157,589.99 206,711,133.67 699,326,974.70 145,541,748.96
project
Wu'an Precision
113,318,790.64 126,876,912.82 109,805,100.05 130,390,603.41 3,076,100.00
Project
Zhuhai Landa
132,330,042.15 65,711,569.34 118,924,526.34 79,117,085.15
Project
Gree Gaolan Port
62,939,878.48 62,939,878.48
Project
Gree Zhengzhou
59,928,438.47 25,345,655.78 41,268,394.37 325,377.26 43,680,322.62
project
Others 299,565,573.48 280,270,382.70 392,444,538.69 2,126,145.21 185,265,272.28
Total 2,431,051,409.94 2,984,397,796.19 1,396,914,953.59 2,451,522.47 4,016,082,730.07 41,775,407.65
(3) Appropriation of provisions for impairment of construction in progress during the current period
None.
20. Intangible assets
Information of intangible assets
Item Land use rights Patent rights and others Total
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Land use rights Patent rights and others Total
I. Total of original carrying amount
1. Beginning balance 5,854,129,734.47 954,740,585.36 6,808,870,319.83
2. Increased amount in the current period 725,730,155.06 9,150,598.27 734,880,753.33
Including: (1) Procurement 685,309,804.34 5,330,843.55 690,640,647.89
(2) Increase by business
40,420,350.72 3,819,754.72 44,240,105.44
combination
3. Decreased amount in the current period 53,855,560.00 53,855,560.00
Including: Write-off [Note 1] 53,855,560.00 53,855,560.00
4. Balance at the end of the period 6,579,859,889.53 910,035,623.63 7,489,895,513.16
II. Accumulated amortization
1. Beginning balance 679,591,202.19 48,448,467.78 728,039,669.97
2. Increased amount in the current period 131,815,254.70 81,877,189.67 213,692,444.37
Including: (1) Appropriation 129,811,531.31 81,515,915.43 211,327,446.74
(2) Increase by business
2,003,723.39 361,274.24 2,364,997.63
combination
3. Decreased amount in the current period 53,855,560.00 53,855,560.00
Including: write-off 53,855,560.00 53,855,560.00
4. Balance at the end of the period 811,406,456.89 76,470,097.45 887,876,554.34
III. Provision for impairment
1. Beginning balance 775,289,550.94 775,289,550.94
2. Increased amount in the current period
3. Decreased amount in the current period 51,559,354.76 51,559,354.76
Including: write-off 51,559,354.76 51,559,354.76
4. Balance at the end of the period 723,730,196.18 723,730,196.18
IV. Carrying amount
1. Carrying amount at the end of the period 5,768,453,432.64 109,835,330.00 5,878,288,762.64
2. Carrying amount at the beginning of the
5,174,538,532.28 131,002,566.64 5,305,541,098.92
period
[Note 1] Write-off amounts of intangible assets - patented technology and others in the current period were the
used quota licensing rights;
[Note 2] As of 31 December, 2020, the book value of intangible assets of which the Company has not obtained the
property ownership certificates was RMB 51,441,805.00.
[Note 3] There were no intangible assets formed through the Company's internal research and development during
the current period.
21. Business reputation
(1) Original carrying amount of business reputation
202
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Decrease for
Increase in the current
the current
period
Name of invested entity or matter generating Beginning period Balance at the end
business reputation Balance Formed by of the period
Other Dispo Other
business
s sal s
combination
Kinghome Hefei Electrical Co., Ltd. 51,804,350.47 51,804,350.47
Nanjing Walsin Nonferrous Metal Co., Ltd. 274,115,040.11 274,115,040.11
Total 325,919,390.58 325,919,390.58
(2) Provision for impairment of business reputation
Decrease for
Increase in the current period the current
Name of invested entity or matter generating Beginning period Balance at the end
business reputation Balance of the period
Other Dispo Other
Appropriation
s sal s
Nanjing Walsin Nonferrous Metal Co., Ltd. 124,016,686.56 124,016,686.56
Total 124,016,686.56 124,016,686.56
[Note] The Company acquired 94.30% of the equity of Nanjing Walsin Nonferrous Metal Co., Ltd., forming a
business reputation of RMB 274,115,040.11. According to the Appraisal Report on the Impairment Test Project of
Nanjing Walsin Nonferrous Metal Co., Ltd. Involved by Zhuhai Gree Electrical Co., Ltd. for the Purpose of
Financial Reporting with the report number of China Alliance Appraisal Report [2021] No. 040203 issued by
China Alliance Appraisal Co., Ltd., RMB 124,016,686.56 of impairment provision was accrued for the
above-mentioned business reputation formed due to the acquisition in the current period.
(3) Business reputation group and impairment test
1) Information about the asset or combination of asset groups where the business reputation is included
The Company tested the impairment of business reputation by combining the asset group related to business
reputation that can benefit from the synergistic effect of business combination. Because it was difficult to directly
obtain the fair market value of the asset group containing business reputation, the Company calculated the
recoverable amount of the asset group by using the method of predicting the present value of future cash flow.
After comprehensively considering factors such as production and operation activities management, monitoring
methods, continuous use and disposal, the asset group containing business reputation was finally determined. At
the end of the period, the asset group where the business reputation was located was consistent with the assets
group determined when the business reputation was formed on the acquisition date, and its composition has not
changed. The information on the asset group including business reputation was as follows:
Unit: 10,000 Yuan
Serial number Name of assets Book value of asset group
1 Fixed assets 12,076.05
2 Construction in progress 945.97
3 Intangible assets 11,260.87
203
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Serial number Name of assets Book value of asset group
4 Business reputation [Note] 29,068.40
Total 53,351.29
[Note] The business reputation shown in the above table included the part attributable to minority shareholders.
2) Important assumptions and key parameters of business reputation impairment test:
A. Assumption of orderly transactions: orderly transactions refer to transactions where the relevant assets or
liabilities have usual market activities during a period of time before the measurement date;
B. Assumption of going concern: assumption of going concern refers to the assumption that the asset group will
be used normally and continuously according to the purpose and use method of the benchmark date, and there will
be no unforeseen factors that will cause it to fail to continue operations, and the valuation method, parameters and
basis will be determined accordingly;
C. It is assumed that the Company has no major changes in the core management team, technical team, and
marketing team based on the existing management methods and levels, and no other human force majeure and
unforeseen factors have a major adverse impact on the Company;
D. Given the Company's operation and production are mainly to earn processing profits, the fluctuation of raw
material prices does not have a substantial impact on the Company's operating profits, therefore, it is assumed that
the raw material prices will remain unchanged in the coming years in the evaluation.
When conducting the asset impairment test, the Company estimated the expected return on investment of property
rights holders based on the analysis and calculation of selected and compared companies. After the calculation, the
pre-tax discount rate used in the impairment test was 12.70%.
3) Evaluation results of business reputation impairment test
Unit: 10,000 Yuan
Book value of asset Recoverable amount of asset Business reputation
Company Name
group group impairment amount
Nanjing Walsin Nonferrous Metal Co., Ltd. 53,351.29 40,200.00 13,151.29
According to the Appraisal Report on the Impairment Test Project of Nanjing Walsin Nonferrous Metal Co., Ltd.
Involved by Zhuhai Gree Electrical Co., Ltd. for the Purpose of Financial Reporting with the report number of
China Alliance Appraisal Report [2021] No. 040203 issued by China Alliance Appraisal Co., Ltd., the asset group
including business reputation should be provided with a business reputation impairment loss of RMB
131,512,923.18, of which the business reputation impairment loss attributable to shareholders of the parent
company should be RMB 124,016,686.56.
22. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
Balance at the end of the period Beginning Balance
Item
Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Assets depreciation
1,945,939,722.60 331,079,465.72 1,818,201,959.97 324,279,108.41
reserves
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Balance at the end of the period Beginning Balance
Item
Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Deductible loss 929,716,127.83 200,650,142.61 442,563,341.90 106,861,346.18
Accrued expenses 70,734,519,794.58 10,612,752,964.88 78,082,911,509.22 11,713,704,909.46
Payroll payable 1,138,661,981.04 177,276,992.60 1,147,772,355.98 181,068,388.98
Amortization of
277,892,654.00 42,292,876.53 295,771,738.84 45,001,546.37
assets
Others 1,051,311,939.85 186,239,758.68 1,115,621,255.53 170,169,778.69
Total 76,078,042,219.90 11,550,292,201.02 82,902,842,161.44 12,541,085,078.09
(2) Deferred income tax liabilities not offset
Balance at the end of the period Beginning Balance
Item
Taxable temporary Deferred income tax Taxable temporary Deferred income
differences liabilities differences tax liabilities
Changes in fair value of
894,532,218.27 172,009,915.29 144,585,199.56 23,711,924.81
derivative financial assets
Accrued interest 2,595,212,306.29 481,753,397.01 1,916,560,659.72 361,013,520.74
Amortization of assets 1,150,514,923.85 188,338,452.95 977,566,325.96 159,701,815.27
Changes in fair value of other
3,360,535,396.59 504,080,309.49 2,082,567,402.93 312,385,110.44
equity instrument investments
Others 283,463,076.51 64,929,028.10 320,552,939.98 70,976,930.01
Total 8,284,257,921.51 1,411,111,102.84 5,441,832,528.15 927,789,301.27
(3) Details of deferred income tax assets which were not recognized
Item Balance at the end of the period Beginning Balance
Deductible temporary differences 741,969,846.84 523,331,619.91
Deductible loss 202,245,092.25 196,707,582.91
Total 944,214,939.09 720,039,202.82
(4) The deductible losses of deferred income tax assets not recognized will become due in the following years:
Year Amount at the end of the period Amount at the beginning of the period
2023 30,888,536.25 33,889,569.81
2024 196,543.53 4,243.31
2025 8,502,385.16
2029 437,450.85
Open-ended 162,657,627.31 162,376,318.94
Total 202,245,092.25 196,707,582.91
23. Other non-current assets
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Balance at the end of the period Beginning Balance
Item Provision Provision
Carrying Carrying
Book balance for Book balance for
amount amount
impairment impairment
Advance payment for
642,531,256.64 642,531,256.64 600,147,738.32 600,147,738.32
equipment
Advance payment for the
111,813,697.80 111,813,697.80 210,752,497.85 210,752,497.85
project and deposit
Advance payment of land
33,773,076.96 33,773,076.96 137,427,798.96 137,427,798.96
transfer fee and others
Total 788,118,031.40 788,118,031.40 948,328,035.13 948,328,035.13
24. Short-term borrowing
(1) Classification of short-term borrowings
Item Balance at the end of the period Beginning Balance
Pledge loans 10,050,000,000.00 60,000,000.00
Mortgaged borrowings 92,999,987.80
Guaranteed loan 58,000,000.00 767,512,482.00
Borrowing on credit 9,991,044,455.36 14,905,397,876.22
Subtotal 20,192,044,443.16 15,732,910,358.22
Accrued interest 112,340,299.18 211,266,104.79
Total 20,304,384,742.34 15,944,176,463.01
(2) Short-term borrowings that have been overdue but not yet repaid
None.
25. Deposits from customers and interbank
Item Balance at the end of the period Beginning Balance
Current deposits 40,660,078.51 95,908,461.12
Time deposits 153,847,631.94 134,656,999.65
Draft deposits 60,763,500.00 117,212,500.00
Subtotal 255,271,210.45 347,777,960.77
Accrued interest 5,735,497.79 4,734,350.95
Total 261,006,708.24 352,512,311.72
26. Loans from other banks
Item Balance at the end of the period Beginning Balance
Credit lending 300,000,000.00 1,000,000,000.00
Accrued interest 20,250.00 446,666.67
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Item Balance at the end of the period Beginning Balance
Total 300,020,250.00 1,000,446,666.67
27. Financial assets sold for repurchase
Item Balance at the end of the period Beginning Balance
Bonds (Pledge-style Repo) 475,033,835.62
Bills rediscounted 2,074,500,000.00
Total 475,033,835.62 2,074,500,000.00
28. Bills payable
Type Balance at the end of the period Beginning Balance
Banker's acceptance bill 21,416,071,950.32 25,284,631,379.70
Trade acceptance draft 11,000,000.00 576,464.16
Total 21,427,071,950.32 25,285,207,843.86
29. Accounts payable
(1) Listing of accounts payable
Item Balance at the end of the period Beginning Balance
Loans and service money 30,675,053,443.18 40,581,441,741.13
Others 929,605,723.70 1,075,374,011.33
Total 31,604,659,166.88 41,656,815,752.46
(2) Important payables with account age exceeding 1 year
None.
30. Contractual liabilities
Item Balance at the end of the period Beginning Balance
Loans 11,678,180,424.65 7,311,804,415.54
Total 11,678,180,424.65 7,311,804,415.54
31. Payroll payable
(1) Presentation of employees' wages and salaries payable
Increase in the Decrease for the Balance at the end of
Item Beginning Balance
current period current period the period
I. Short-term wages and salaries 3,426,832,941.73 8,865,617,233.70 8,929,940,986.30 3,362,509,189.13
2. Separation benefits - defined
4,136,022.60 381,449,179.90 382,738,922.94 2,846,279.56
contribution plan
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Increase in the Decrease for the Balance at the end of
Item Beginning Balance
current period current period the period
Total 3,430,968,964.33 9,247,066,413.60 9,312,679,909.24 3,365,355,468.69
(2) Listing of short-term wages and salaries
Increase in the Decrease for the Balance at the end of
Item Beginning Balance
current period current period the period
1. Wages, bonuses, subsidies and
2,623,347,333.68 7,558,804,647.71 7,727,285,036.63 2,454,866,944.76
allowances
2. Employee welfares 704,506,039.05 704,506,039.05
3. Social insurance premiums 561,320.59 180,980,466.26 180,781,452.17 760,334.68
Including: Medical insurance
528,018.34 155,807,507.65 155,610,323.87 725,202.12
premium
Industrial injury
26,100.66 9,579,284.15 9,591,162.94 14,221.87
insurance premium
Birth insurance premium 7,201.59 15,593,674.46 15,579,965.36 20,910.69
4. Housing accumulation funds 1,370,053.91 176,725,233.33 176,592,223.55 1,503,063.69
5. Labor union expenditures and
801,554,233.55 244,600,847.35 140,776,234.90 905,378,846.00
employee education funds
Total 3,426,832,941.73 8,865,617,233.70 8,929,940,986.30 3,362,509,189.13
(3) Presentation of separation benefits - defined contribution plan
Increase in the current Decrease for the current Balance at the end of
Item Beginning Balance
period period the period
1. Basic endowment insurance
3,206,972.39 367,156,819.14 367,847,968.66 2,515,822.87
premium
2. Unemployment insurance
929,050.21 14,292,360.76 14,890,954.28 330,456.69
premium
Total 4,136,022.60 381,449,179.90 382,738,922.94 2,846,279.56
32. Taxes payable
Item Balance at the end of the period Beginning Balance
Added-value tax 1,188,975,420.12 1,672,108,943.75
Business income tax 785,653,809.28 1,678,470,486.79
Others 326,726,353.62 353,200,285.79
Total 2,301,355,583.02 3,703,779,716.33
33. Other payables
Item Balance at the end of the period Beginning Balance
Dividends payable [Note 1] 6,986,645.96 707,913.60
Other payables [Note 2] 2,372,409,071.48 2,711,985,060.06
Total 2,379,395,717.44 2,712,692,973.66
[Note 1] The Company had no interest payable and important dividend payable at the end of the period and the
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beginning of the period;
[Note 2] Other payables in the above table refer to other payables after deduction of the interest payable and
dividends payable.
1) Other payables are presented by amount nature
Item Balance at the end of the period Beginning Balance
Intercourse funds 1,527,670,503.18 1,880,900,981.33
Margin and deposit 844,738,568.30 831,084,078.73
Total 2,372,409,071.48 2,711,985,060.06
2) Other important payables with account age exceeding 1 year
Item Balance at the end of the period Cause of failing to repay or carry over
Entity 1 326,905,170.30 Failure to meet repayment conditions
Entity 2 222,036,077.83 Failure to meet repayment conditions
Total 548,941,248.13
34. Other current liabilities
Item Balance at the end of the period Beginning Balance
Repair cost 1,893,012,124.81 2,032,816,015.42
Sales rebate 55,808,250,764.80 61,751,640,937.64
Obligation to pay commercial papers which is not
4,588,589,780.94 802,418,995.36
derecognized
Output tax to be wrote-off 1,469,269,506.13 913,903,246.88
Others 623,132,106.86 594,615,906.72
Total 64,382,254,283.54 66,095,395,102.02
35. Long-term borrowing
Item Balance at the end of the period Beginning Balance
Pledge loans 142,481,242.20
Mortgaged borrowings 1,561,190,447.00 46,795,740.49
Borrowing on credit 152,752,584.38
Subtotal 1,856,424,273.58 46,795,740.49
Accrued interest 4,289,542.51 90,142.37
Total 1,860,713,816.09 46,885,882.86
36. Long-term payroll payable
(1) Table of long-term payroll payable
Balance at the end of the
Item Beginning Balance
period
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Balance at the end of the
Item Beginning Balance
period
Separation benefits - net liabilities of defined benefit plan 149,859,788.00 141,021,228.00
Total 149,859,788.00 141,021,228.00
(2) Changes in the defined benefit plan
1) Present value of obligations under the defined benefit plan:
Amount for the current Amount for the previous
Item
period period
I. Beginning balance 141,021,228.00 130,840,170.00
II. Defined benefit cost recorded in the current profits and losses 7,441,863.00 7,311,017.00
1. Service cost of the current period 2,312,128.00 2,123,433.00
2. Net interest 4,837,059.00 4,487,322.00
3. Impact on new personnel 292,676.00 700,262.00
III. Cost of the defined benefit plan included in other comprehensive
6,851,653.00 8,029,478.00
income
Including: actuarial gains (losses represented by "-") 6,851,653.00 8,029,478.00
IV. Other changes -5,454,956.00 -5,159,437.00
Including: paid benefits -5,454,956.00 -5,159,437.00
V. Balance at the end of the period 149,859,788.00 141,021,228.00
2) Net liabilities (net assets) of the defined benefit plan:
Amount for the current Amount for the previous
Item
period period
I. Beginning balance 141,021,228.00 130,840,170.00
II. Defined benefit cost recorded in the current profits and losses 7,441,863.00 7,311,017.00
III. Cost of the defined benefit plan included in other comprehensive
6,851,653.00 8,029,478.00
income
IV. Other changes -5,454,956.00 -5,159,437.00
V. Balance at the end of the period 149,859,788.00 141,021,228.00
(3) Contents and associated risks of the defined benefit plan, and its influences on the Company’s future cash
flow, time and uncertainty:
1) Contents and associated risks of the defined benefit plan, and its influences on the Company’s future cash flow,
time and uncertainty:
The Company’s defined benefit plan is a supplementary post-retirement pension plan for some retirees, early
retirees and serving officers after normal retirement. The present obligation value of this defined benefit plan was
recognized by Towers-Watson actuarial company using the projected unit credit method on 31 December, 2020.
This defined benefit plan didn’t involve big amount, so it didn’t lead to significant influence on the future cash
flow the Company.
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2) Significant actuarial assumptions and sensitivity analysis results of the defined benefit plan
According to requirements of the Accounting Standards for Business Enterprises No. 9 - Employee Compensation,
the discount rate adopted by the Company at the time of discount is recognized by the market yields of
high-quality corporate bonds in the treasury bonds or active market that match the obligatory term and currency of
the defined benefit plan on the balance sheet date; the annual growth rates and annual dismission rates of all
benefits are based on the actual measurement data of the Company; the death rate is recognized by referring to the
experience life table for insurance business of China Life Insurance (Group) Company.
(4) Quantitative sensitivity analysis of all the used major assumptions by the end of the Report Period:
Sensitivity analysis of discount rate Influence on the amount at the end of the period
Influence on the present obligation value of defined welfare benefit by
-19,484,161.00
increase of one percentage point
Influence on the present obligation value of defined welfare benefit by
24,608,583.00
decrease of one percentage point
Influence on the service cost by increase of one percentage point -616,336.00
Influence on the service cost by decrease of one percentage point 643,631.00
37. Deferred income
(1) Classification of deferred income
Increase in the Decrease for the Changes in the Balance at the end of
Item Beginning Balance
current period current period consolidation scope the period
Government
240,504,270.47 238,679,841.17 63,088,539.53 20,938,130.35 437,033,702.46
subsidies
Total 240,504,270.47 238,679,841.17 63,088,539.53 20,938,130.35 437,033,702.46
(2) Items involving government subsidies:
Changes in Current period
Amount of Balance at the
Beginning the amount recorded in
Item subsidies added in end of the
Balance consolidation the current period
the current period period
scope profits and losses
I. Government subsidies
139,309,047.32 71,050,300.70 7,415,335.02 36,684,909.00 181,089,774.04
pertinent to incomes
1. Environmental protection
1,868,218.92 872,760.00 84,112.70 2,656,866.22
upgrade project
2. Scientific research project
87,321,653.21 53,520,171.73 25,827,580.45 115,014,244.49
of refrigerating field
3. Others 50,119,175.19 16,657,368.97 7,415,335.02 10,773,215.85 63,418,663.33
II. Government subsidies
101,195,223.15 167,629,540.47 13,522,795.33 26,403,630.53 255,943,928.42
pertinent to assets
1. Environmental protection
14,485,084.84 888,413.79 1,666,173.26 13,707,325.37
upgrade project
2. Scientific research project
79,911,751.57 152,793,004.20 22,080,933.60 210,623,822.17
of refrigerating field
3. Others 6,798,386.74 13,948,122.48 13,522,795.33 2,656,523.67 31,612,780.88
Total 240,504,270.47 238,679,841.17 20,938,130.35 63,088,539.53 437,033,702.46
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38. Capital stock
Increase/Decrease for the period (+, -)
Stock converted Balance at the end of
Item Beginning Balance
Bonus from housing Subtot the period
New Issue Others
Issue accumulation al
fund
Total number
6,015,730,878.00 6,015,730,878.00
of stocks
39. Capital reserves
Increase in the current Decrease for the Balance at the end of the
Item Beginning Balance
period current period period
Capital stock premium 26,979,063.83 26,979,063.83
Other capital reserves 66,400,436.88 28,470,779.97 94,871,216.85
Total 93,379,500.71 28,470,779.97 121,850,280.68
[Note] Changes in capital reserve in the current period mainly included the capital reserve of RMB 25,504,367.09
recognized due to the capital increased to Zhuhai Gree Group Finance Company Limited, a holding subsidiary of
the Company, and the capital reserve change of RMB 2,966,412.88 recognized due to the accounting of
investment in associates by the equity method.
40. Treasury stock
Beginning Decrease for the
Item Increase in the current period Balance at the end of the period
Balance current period
Repurchase of stocks 5,182,273,853.90 5,182,273,853.90
Total 5,182,273,853.90 5,182,273,853.90
[Note] By the end of the period, the Company accumulatively repurchased 94,184,662 shares in the current period,
accounting for 1.57% of the Company's total stock capital by the end of the period, all of which were deposited in
the Company's special securities repurchase account. During the period of deposit, the Company was not entitled
to voting at the general meeting of shareholders, profit distribution, capitalization from public reserve funds,
allotment, pledge and other related rights. In future, the Company will choose the opportunity to implement
employee stock ownership plans or equity incentives. If the transfer is not completed within the time limit
specified by relevant laws and regulations, the untransferred shares will be cancelled according to law.
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41. Other comprehensive income
Amount for the current period
Less: Amount Less: Amount
recognized into included into
other other
Amount Amount
Beginning comprehensive comprehensive Balance at the
Item Amount incurred attributable to attributable
Balance income in income in the Less: Income end of the period
before income tax in the parent to minority
previous period previous period tax expenses
the current period company after shareholders
and transferred and transferred
tax after tax
to the current to retained
profits and earnings in the
losses current period
1. Other comprehensive
income which cannot be
6,141,174,740.49 1,454,649,803.51 19,987,915.96 191,695,199.05 1,242,966,688.50 7,384,141,428.99
reclassified into profits and
losses
Including: Changes arising
from remeasurement of the -44,162,841.00 -6,851,653.00 -6,851,653.00 -51,014,494.00
defined benefit plan
Other comprehensive
income which cannot be
4,784,432,411.50 215,136,201.85 215,136,201.85 4,999,568,613.35
transferred to profit or loss
under the equity method
Changes in fair value
of other equity instrument 1,400,905,169.99 1,246,365,254.66 19,987,915.96 191,695,199.05 1,034,682,139.65 2,435,587,309.64
investments
2. Other comprehensive
income which will be
119,117,240.64 -98,729,128.94 6,317,408.17 1,938,467.40 -107,198,474.16 213,469.65 11,918,766.48
reclassified into profits and
losses in the future
Including: Other
comprehensive income that
182,758.17 182,758.17 -182,758.17
can be transferred to profit or
loss under the equity method
Changes in fair value
-55,780,978.58 -2,134,660.99 -486,080.10 -1,862,050.54 213,469.65 -57,643,029.12
of other debt investments
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Amount for the current period
Less: Amount Less: Amount
recognized into included into
other other
Amount Amount
Beginning comprehensive comprehensive Balance at the
Item Amount incurred attributable to attributable
Balance income in income in the Less: Income end of the period
before income tax in the parent to minority
previous period previous period tax expenses
the current period company after shareholders
and transferred and transferred
tax after tax
to the current to retained
profits and earnings in the
losses current period
Cash flow hedge
5,214,452.50 22,298,300.00 6,134,650.00 2,424,547.50 13,739,102.50 18,953,555.00
reserve
Difference arising from
translation of financial 169,501,008.55 -118,892,767.95 -118,892,767.95 50,608,240.60
statements in foreign currency
Total other comprehensive
6,260,291,981.13 1,355,920,674.57 6,317,408.17 19,987,915.96 193,633,666.45 1,135,768,214.34 213,469.65 7,396,060,195.47
income
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
42. Surplus reserve
Increase in the Decrease for the Balance at the end of the
Item Beginning Balance
current period current period period
Statutory surplus reserve 2,530,583,291.14 2,530,583,291.14
Discretionary surplus
969,088,265.45 969,088,265.45
reserve
Total 3,499,671,556.59 3,499,671,556.59
43. General risk provisions
Increase in the current Decrease for the Balance at the end of the
Item Beginning Balance
period current period period
General risk provisions 489,855,826.75 7,719,945.51 497,575,772.26
Total 489,855,826.75 7,719,945.51 497,575,772.26
44. Undistributed profit
Amount for the current
Item Amount for the previous period
period
Undistributed profit at the beginning of the period 93,794,643,539.49 81,939,701,613.83
Add: Changes in accounting policies -48,226,344.11
Undistributed profit at the beginning of the period after
93,794,643,539.49 81,891,475,269.72
adjustment
Add: Amount transferred from other comprehensive income into
19,987,915.96
retained earnings [Note 1]
Net profit attributable to owners of the parent company for
22,175,108,137.32 24,696,641,368.84
the current period
Less: appropriation of general risk provisions 7,719,945.51 160,438,255.27
Ordinary stock dividends payable [Notes 2 and 3] 13,140,423,269.60 12,633,034,843.80
Undistributed profit at the end of the period 102,841,596,377.66 93,794,643,539.49
[Note 1] In the current period, the Company disposed of some other equity instrument investments - 10,247,000
shares of Xinjiang Joinworld Company Limited, and RMB 19,987,915.96 of changes in fair value (after tax)
accumulatively included in other comprehensive income were transferred to retained earnings;
[Note 2] According to the resolutions of the general meeting of shareholders on 1 June, 2020, the Company
distributed cash dividends to all shareholders at a rate of RMB 12.00 (including tax) per 10 shares. Calculated
according to the issued 6,015,730,878 shares, RMB 7,218,877,053.60 of cash dividends were actually distributed;
[Note 3] According to the resolution at the extraordinary general meeting of shareholders on 2 November, 2020,
the Company distributed cash dividends to all shareholders at a rate of RMB 10.00 (including tax) per 10 shares.
Calculated according to the issued 6,015,730,878 shares, after 94,184,662 shares of the Company repurchased
cumulatively were excluded, RMB 5,921,546,216.00 of cash dividends were actually distributed.
45. Operating revenues and operating costs
Item Amount for the current period Amount for the previous period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Revenue Cost Revenue Cost
Main
130,427,766,473.54 87,921,191,886.69 156,888,659,016.13 103,703,283,171.60
business
Other
37,771,437,930.99 36,307,841,794.23 41,264,368,524.22 39,796,089,409.76
businesses
Total 168,199,204,404.53 124,229,033,680.92 198,153,027,540.35 143,499,372,581.36
[Note] At the end of the reporting period, the amount of revenue corresponding to the performance obligations for
which the contracts have been signed but not yet performed or not yet completed was RMB 17,282,465,483.33.
Information of income from main operations:
Amount for the current period Amount for the previous period
Item
Revenue Cost Revenue Cost
By industry category
Manufacturing 130,427,766,473.54 87,921,191,886.69 156,888,659,016.13 103,703,283,171.60
Total 130,427,766,473.54 87,921,191,886.69 156,888,659,016.13 103,703,283,171.60
By type of goods
Including: Air
117,881,639,913.77 77,430,333,762.13 138,665,055,103.82 87,192,449,061.21
conditioner
Home
4,521,756,518.81 3,083,266,840.17 5,575,911,375.57 4,271,001,457.59
Appliances
Intelligent
790,942,676.61 603,504,721.68 2,141,285,558.55 2,014,056,867.41
equipment
Others 7,233,427,364.35 6,804,086,562.71 10,506,406,978.19 10,225,775,785.39
Total 130,427,766,473.54 87,921,191,886.69 156,888,659,016.13 103,703,283,171.60
By territory
Including: domestic
110,407,002,220.87 70,329,850,923.05 136,073,206,974.43 85,697,917,155.53
sale
Overseas 20,020,764,252.67 17,591,340,963.64 20,815,452,041.70 18,005,366,016.07
Total 130,427,766,473.54 87,921,191,886.69 156,888,659,016.13 103,703,283,171.60
46. Interest revenue and interest expense
Amount for the previous
Item Amount for the current period
period
Interest revenue 2,295,972,686.55 2,351,471,964.56
Including: interest revenue from deposits in other banks and central
1,395,939,587.36 1,676,328,736.19
banks
Interest revenue from disbursement of loans and advances 762,577,244.28 496,600,631.52
Others 137,455,854.91 178,542,596.85
Interest expense 304,448,121.92 110,579,966.36
Including: expense from transactions with financial institutions 290,237,534.52 95,647,504.93
Others 14,210,587.40 14,932,461.43
Net interest revenue 1,991,524,564.63 2,240,891,998.20
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
47. Taxes and surcharges
Item Amount for the current period Amount for the previous period
Urban maintenance & construction tax 181,452,425.09 459,354,196.12
Educational surcharges 136,118,810.46 334,351,737.99
Waste electrical appliance treatment fund 203,651,307.67 286,294,935.08
House property tax 141,422,302.62 147,560,273.40
Land use tax 98,229,736.11 94,573,090.72
Commodity circulation tax and industrial product tax of Brazil 82,095,878.99 71,779,078.43
Others 121,630,232.87 149,070,436.89
Total 964,600,693.81 1,542,983,748.63
48. Sales expense
Item Amount for the current period Amount for the previous period
Sales expense 13,043,241,798.27 18,309,812,188.35
Total 13,043,241,798.27 18,309,812,188.35
[Note 1] In 2020, the selling expenses mainly included the installation and maintenance cost, transportation and
warehousing fee and loading and unloading fee, and promotion fee, accounting for more than 80% of the total
selling expenses;
[Note 2] Sales rebates in the period were not included in sales expenses due to the implementation of the new
revenue standards, and were used to offset operating income.
49. Overhead Expense
Item Amount for the current period Amount for the previous period
Overhead Expense 3,603,782,803.64 3,795,645,600.08
Total 3,603,782,803.64 3,795,645,600.08
[Note] In 2020, the overhead expenses included the employees' wages and salaries, material consumption,
depreciation and amortization, accounting for more than 80% of the total overhead expenses.
50. R&D expenses
Item Amount for the current period Amount for the previous period
R&D expenses 6,052,563,108.10 5,891,219,715.90
Total 6,052,563,108.10 5,891,219,715.90
[Note] In 2020, the R&D expenses included the employees' labor cost and direct investment cost, accounting for
more than 80% of the total R&D expenses.
51. Financial expense
Item Amount for the current period Amount for the previous period
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Amount for the current period Amount for the previous period
Interest expense [Note 1] 1,088,369,394.87 1,598,276,258.59
Less: Interest income [Note 2] 3,708,312,903.06 3,698,387,243.32
Exchange gain and loss 598,702,350.00 -366,166,349.99
Bank charges 76,682,416.86 35,131,571.19
Interest charges for defined welfare benefit obligations 4,837,059.00 4,487,322.00
Others 2,217,022.26 15,011.62
Total -1,937,504,660.07 -2,426,643,429.91
[Note 1] The above interest expenses included the long-term and short-term borrowing interest expenses and the
note discount interest expense immediately recognized upon the derecognition of notes;
[Note 2] Both the above interest income and the interest income in Note V. 46 were capital gains.
52. Other incomes
(1) Classification of other incomes
Amount for the current Amount for the Amount recorded into the current
Source of generating other income
period previous period non-recurring profit and loss
Government subsidies 1,146,204,685.40 935,150,874.70 1,122,853,517.34
Handling charge refund of
17,915,425.64 997,770.17 17,915,425.64
individual income tax and others
Total 1,164,120,111.04 936,148,644.87 1,140,768,942.98
(2) Government subsidies recorded in the profits and losses of current period
Amount for the current Amount for the previous
Subsidy items Pertinent to assets/pertinent to incomes
period period
Financial rewards 450,465,248.34 458,139,748.75 Pertinent to assets and incomes
Capital allowance for
137,091,175.26 149,396,154.17 Pertinent to assets and incomes
development projects
Technological innovation
149,409,503.16 147,525,365.16 Pertinent to assets and incomes
subsidies income
Human resources subsidy 230,407,062.27 103,289,308.06 Pertinent to incomes
Others 178,831,696.37 76,800,298.56 Pertinent to assets and incomes
Total 1,146,204,685.40 935,150,874.70
53. Investment income
Item Amount for the current period Amount for the previous period
Long-term equity investment income measured by equity method 35,314,343.21 -20,983,248.83
Investment income from derivative financial instruments 325,129,297.18 -336,389,070.84
Investment income recognized from trading financial assets 213,050,762.46 63,410,268.30
Others 139,515,668.82 67,327,270.75
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Amount for the current period Amount for the previous period
Total 713,010,071.67 -226,634,780.62
54. Incomes from changes in fair value
Amount for the current Amount for the previous
Sources of incomes from changes in fair value
period period
Trading financial assets -19,994,874.52 48,617,126.28
Income from changes in fair value of derivative financial instruments 245,563,316.57 179,646,941.60
Others -25,414,970.00
Total 200,153,472.05 228,264,067.88
55. Credit impairment losses
Item Amount for the current period Amount for the previous period
Loss on bad debt -41,209,742.51 -143,081,740.35
Impairment losses of loans and advances 234,034,435.04 -136,366,845.92
Total 192,824,692.53 -279,448,586.27
56. Asset impairment loss
Item Amount for the current period Amount for the previous period
Impairment losses of contract assets -5,036,930.75
Inventory falling price loss -337,216,704.36 -67,603,749.00
Impairment losses of intangible assets -775,289,550.94
Impairment losses of business reputation [Note] -124,016,686.56
Total -466,270,321.67 -842,893,299.94
[Note] For details, please refer to Note V. 21.
57. Income from disposal of assets
Amount for the current Amount for the previous
Source of income from disposal of assets
period period
Profit from disposal of non-current assets (losses indicated with "-") 2,945,975.01 4,911,230.34
Total 2,945,975.01 4,911,230.34
58. Non-operating revenues
Amount for the Amount for the Amount recorded into the current
Item
current period previous period non-recurring profit and loss
Government subsidies not pertinent to
223,314,876.04 292,291,413.05 223,314,876.04
operation
Net profit from destruction scrap of
414,312.82 738,673.12 414,312.82
non-current assets
Including: Gains from disposal of
414,312.82 738,673.12 414,312.82
fixed assets
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Amount for the Amount for the Amount recorded into the current
Item
current period previous period non-recurring profit and loss
Others 63,431,533.11 52,676,576.96 63,431,533.11
Total 287,160,721.97 345,706,663.13 287,160,721.97
Government subsidies recorded in current profits or losses:
Amount for the current Amount for the previous Amount recorded into the current non-recurring profit
Subsidy items
period period and loss
Financial rewards 223,268,715.18 291,949,736.50 223,268,715.18
Others 46,160.86 341,676.55 46,160.86
Total 223,314,876.04 292,291,413.05 223,314,876.04
59. Non-operating expenses
Amount for the Amount for the Amount recorded into the current
Item
current period previous period non-recurring profit and loss
Net loss from destruction scrap of
8,334,512.45 14,943,832.84 8,334,512.45
non-current assets
Including: net losses from destruction
8,334,512.45 14,943,832.84 8,334,512.45
scrap of fixed assets
Others 13,406,618.43 583,162,723.99 13,406,618.43
Total 21,741,130.88 598,106,556.83 21,741,130.88
60. Income tax expenses
(1) Table of income tax expenses
Item Amount for the current period Amount for the previous period
Income tax expenses of the current period 2,745,896,993.46 5,715,582,577.24
Deferred income tax expenses 1,283,798,240.06 -1,190,118,952.51
Total 4,029,695,233.52 4,525,463,624.73
(2) Adjustment process of accounting profits and income tax expenses
Amount for the current
Item
period
Total profit 26,308,937,428.79
Income tax expenses calculated by the statutory/applicable tax rate 3,946,340,614.32
Impact by different tax rates applicable to subsidiaries 201,297,689.16
Impact by non-deductible costs, expenses and losses 29,491,410.99
Impact by deductible temporary differences or deductible losses of deferred income tax assets not
29,420,204.56
recognized in the current period
Others -176,854,685.51
Income tax expenses 4,029,695,233.52
61. Items of cash flow statement
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(1) Other cash received relating to operating activities
Amount for the current Amount for the previous
Item
period period
Government subsidies 1,521,419,832.12 1,301,652,938.19
Interest revenue 83,834,745.40 283,444,434.07
Net decrease in bill pledge deposits and guarantee deposits 1,833,792,536.95
Margin, deposit and others 1,259,280,898.85 1,210,966,466.08
Total 4,698,328,013.32 2,796,063,838.34
(2) Other cash paid relating to operating activities
Amount for the previous
Item Amount for the current period
period
Cash repayments for selling expenses 13,357,256,381.18 11,601,156,921.11
Cash repayments for overhead expenses and R&D expenses 1,591,137,889.61 1,621,907,242.09
Net increase in bill pledge deposits and guarantee deposits 7,323,512,969.28
Returned project funds advanced 73,050,795.30 193,648,219.08
Others 509,047,033.72 786,227,441.34
Total 15,530,492,099.81 21,526,452,792.90
(3) Other cash received relating to investing activities
Item Amount for the current period Amount for the previous period
Receipts from forward foreign exchange settlement and
342,260,149.12
sales
Fixed deposit interest revenue and others 3,980,389,291.30 4,878,025,331.18
Total 4,322,649,440.42 4,878,025,331.18
(4) Other cash paid relating to investing activities
Amount for the previous
Item Amount for the current period
period
Net increase in time deposits and forward foreign exchange
5,542,024,468.66 7,029,966,816.61
settlement and sale payments
Others 10,487,868.71
Total 5,542,024,468.66 7,040,454,685.32
(5) Other cash paid relating to financing activities
Amount for the previous
Item Amount for the current period
period
Cash paid for repurchase of stocks 5,182,273,853.90
Net borrowing margin expenditure and handling charge expenditure 9,832,239,619.73
Total 15,014,513,473.63
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62. Supplementary information about cash flow statement
(1) Supplementary information about cash flow statement
Amount for the current Amount for the
Supplementary information
period previous period
1. Convert net profit to cash flow from operating activities:
Net profits 22,279,242,195.27 24,827,243,603.97
Add: Assets depreciation reserves 273,445,629.14 1,122,341,886.21
Fixed assets depreciation, oil and gas assets accumulated depreciation,
3,377,378,887.04 2,977,103,353.04
productive biological assets accumulated depreciation
Amortization of intangible assets 211,327,446.74 215,796,437.95
Losses on disposal of fixed assets, intangible assets and other long-term
-2,945,975.01 -4,911,230.34
assets (incomes expressed with “-”)
Losses on disposal of fixed assets (incomes expressed with “-”) 7,920,199.63 14,205,159.72
Losses from changes in fair value (incomes expressed with “-”) -200,153,472.05 -228,264,067.88
Financial expenses (incomes expressed with “-”) -3,117,118,954.25 -4,096,866,714.43
Investment losses (incomes expressed with “-”) -713,010,071.67 226,634,780.62
Decrease in deferred income tax assets (increase expressed with “-”) 993,661,744.02 -1,267,872,732.83
Increase in deferred income tax liabilities (decrease expressed with “-”) 290,136,496.04 77,753,780.32
Decrease of inventories (increase expressed with “-”) -3,734,232,466.37 -4,049,893,387.15
Decrease in operating receivables (increase expressed with “-”) 15,242,828,006.57 -3,656,032,331.71
Increase in operating payables (decrease expressed with “-”) -18,480,942,047.82 19,086,284,288.30
Others [Note] 2,811,099,691.88 -7,349,808,732.20
Net cash flows from operating activities 19,238,637,309.16 27,893,714,093.59
2. Major investing and financing activities not involving cash receipts and
-- --
payment:
Conversion of debt into capital
Convertible bonds expiring within one year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents: -- --
Ending balance of cash 24,225,049,638.15 26,372,571,821.49
Less: Beginning balance of cash 26,372,571,821.49 28,772,120,824.34
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -2,147,522,183.34 -2,399,549,002.85
[Note] "Others" included the decreased amount RMB 976,192,487.64 of statutory deposit reserve and the net
decreased amount RMB 1,834,907,204.24 of bill margin.
(2) Net cash paid for acquisition of subsidiaries in the current period
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Item Amount
Cash or cash equivalent paid in the current period for business combination that occurred in the current
150,000,000.00
period
Including: Bank deposits 150,000,000.00
Less: Cash and cash equivalents held by the subsidiary on the date of purchase 70,436,872.44
Including: Songyuan Grain Group Co., Ltd. 70,436,872.44
Add: Cash or cash equivalent paid in the current period for business combination that occurred in the
346,312,249.25
previous period
Including: Nanjing Walsin Nonferrous Metal Co., Ltd. 346,312,249.25
Net cash paid for acquisition of subsidiaries 425,875,376.81
(3) Composition of cash and cash equivalents
Balance at the end of the
Item Beginning Balance
period
I. Cash 24,225,049,638.15 26,372,571,821.49
Including: Cash on hand 468,623.79 1,357,064.14
Bank deposit for payment at any time 7,302,375,145.99 7,877,998,010.69
Other monetary capital for payment at any time 395,860,332.07 379,859,995.42
Deposits in the central bank available for payment at any time 2,108,729.48 2,004,412.74
Deposits in other banks available for payment at any time 16,524,236,806.82 18,111,352,338.50
II. Cash equivalents
III. Ending balance of cash and cash equivalents 24,225,049,638.15 26,372,571,821.49
(4) Adjustment of monetary capital and cash equivalents
Amount for the current Amount for the previous
Item
period period
Monetary capital 136,413,143,859.81 125,400,715,267.64
Less: Deposits with restricted use 20,335,403,491.19 13,329,429,050.16
Including: Statutory deposit reserve 2,037,889,970.12 3,014,082,457.76
Bill, letter of credit and other deposits 18,297,513,521.07 10,315,346,592.40
Less: Fixed deposits and accrued interest not in the category of cash and cash
91,852,690,730.47 85,698,714,395.99
equivalents
Add: Other cash equivalents
Ending balance of cash and cash equivalents 24,225,049,638.15 26,372,571,821.49
63. Assets with restricted ownerships or use rights
Carrying amount at the end of
Item Cause of restriction
the period
Monetary capital 20,335,403,491.19 Statutory deposit reserve and deposits
Receivables financing 10,145,874,359.07 Pledged
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Carrying amount at the end of
Item Cause of restriction
the period
Fixed assets 15,133,873.82 Mortgage
Other equity instrument investments 6,643,969,479.37 For details about the restricted shares, see Note (V) 15
Intangible assets 419,175,255.02 Mortgage
Other debt investments 496,933,800.00 Pledged
Total 38,056,490,258.47
64. Monetary items of foreign currencies
(1) Monetary items of foreign currencies
Balance in foreign currency at Balance of RMB converted at the
Item Exchange rate for conversion
the end of period end of period
Monetary capital: 19,252,053,105.84
Including: USD 2,715,307,560.30 6.5249 17,717,110,300.23
HKD 1,153,890,726.87 0.8416 971,114,435.74
BRL 434,105,329.49 1.2557 545,106,062.24
Euro 2,331,958.13 8.0250 18,713,963.99
JPY 131,944.51 0.0632 8,343.64
Accounts receivable: 2,819,474,218.13
Including: USD 354,198,482.95 6.5249 2,311,109,681.37
BRL 373,844,774.44 1.2557 469,436,883.26
HKD 23,154,284.71 0.8416 19,486,646.01
Euro 2,422,555.45 8.0250 19,441,007.49
Contract assets: 1,329,114.55
Including: USD 203,698.84 6.5249 1,329,114.55
Other receivables: 1,527,102.31
Including: USD 129,904.60 6.5249 847,614.52
HKD 403,801.43 0.8416 339,839.28
BRL 149,628.34 1.2557 187,888.31
Pounds 9,010.00 8.8903 80,101.60
Euro 8,929.42 8.0250 71,658.60
Subtotal of monetary assets of
22,074,383,540.83
foreign currency
Short-term borrowing: 3,084,726,921.72
Including: USD 432,696,283.57 6.5249 2,823,299,980.68
HKD 310,630,871.01 0.8416 261,426,941.04
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Balance in foreign currency at Balance of RMB converted at the
Item Exchange rate for conversion
the end of period end of period
Long-term borrowings: 143,254,262.42
Including: USD 10,317,337.57 6.5249 67,319,595.90
Euro 9,462,263.74 8.0250 75,934,666.52
Accounts payable: 281,835,940.95
Including: USD 32,212,769.46 6.5249 210,185,099.46
BRL 33,308,848.95 1.2557 41,825,921.63
JPY 228,048,285.79 0.0632 14,420,861.40
HKD 9,273,600.61 0.8416 7,804,662.27
Euro 798,963.42 8.0250 6,411,681.45
Pounds 133,596.70 8.8903 1,187,714.74
Other payables: 169,167,466.94
Including: USD 24,257,254.76 6.5249 158,276,161.58
Euro 866,095.53 8.0250 6,950,416.63
HKD 2,895,815.87 0.8416 2,437,118.64
BRL 1,176,239.84 1.2557 1,477,004.37
JPY 423,267.05 0.0632 26,765.72
Other current liabilities: 1,143,061,076.53
Including: USD 175,184,459.00 6.5249 1,143,061,076.53
Subtotal of monetary
4,822,045,668.56
liabilities of foreign currency
(2) Description of overseas operating entities
None.
VI. Change in the consolidation scope
1. Business combination not involving enterprises under common control
(1) Business combination involving enterprises not under common control in the current period
Time point of Proportion of Equity Determination
Cost of equity Date of
Name of acquired party equity equity acquisition basis of date of
acquisition purchase
acquisition acquisition mode purchase
Songyuan Grain Group 31 December, Purchase by 31 December, Acquisition of
246,272,496.65 75.00%
Co., Ltd. 2020 means of cash 2020 control power
(2) Combination cost and business reputation
Combination cost Amount
Fair value of the equity held before the date of purchase on the date of purchase 246,272,496.65
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Combination cost Amount
Total combination cost 246,272,496.65
Less: Fair value share of the identifiable net assets acquired 246,272,496.65
Business reputation/combination cost smaller than the amount of fair value share of the identifiable net
assets acquired
[Note] The Company originally held 50.00% of the equity of Songyuan Grain Group of which the remaining
50.00% equity was held by Liaoning Songyuan Financial Investment Management Center. In September 2020, the
Company increased its capital contribution to Songyuan Grain Group by RMB 150,000,000.00, and its
shareholding ratio increased to 75.00%; on 31 December, 2020, the Board of Directors of Songyuan Grain Group
was re-elected, with 5 Board members, and the Company elected 4 directors, accounting for 80% of the total
Board members, thus the Company has control over Songyuan Grain Group.
As at the date of purchase of 31 December, 2020, the fair value of the identifiable net assets attributable to the
owners of the parent company was RMB 328,363,328.86, and the fair value of corresponding identifiable net
assets were appraised by Beijing Yachao Assets Appraisal Co., Ltd. which issued [Beijing Yachao Appraisal
Report (2020) No. A184] Appraisal Report. As at the date of purchase, the fair value of 75.00% equity originally
held by the Company in Songyuan Grain Group was RMB 246,272,496.65. No additional consideration was paid
on the date of purchase, and the corresponding combination cost was RMB 246,272,496.65.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
Songyuan Grain Group Co., Ltd.
Item
Fair value on the date of purchase Carrying amount on date of purchase
Assets:
Monetary capital 70,436,872.44 70,436,872.44
Accounts receivable 58,501,141.40 58,501,141.40
Receivables financing 1,632,600.00 1,632,600.00
Prepayment 41,963,876.05 41,963,876.05
Other receivables 24,912,813.07 24,912,813.07
Inventories 397,055,281.83 397,055,281.83
Other current assets 47,958,691.72 47,958,691.72
Other equity instrument investments 7,000,000.00 7,000,000.00
Fixed assets 103,601,989.38 87,182,573.65
Construction in Progress 27,971,600.68 27,971,600.68
Intangible assets 41,875,107.81 29,763,765.14
Long-term deferred expenses 6,613,861.32 6,613,861.32
Deferred income tax assets 1,735,376.11 1,735,376.11
Other non-current assets 45,165,068.36 45,165,068.36
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Songyuan Grain Group Co., Ltd.
Item
Fair value on the date of purchase Carrying amount on date of purchase
Subtotal of assets 876,424,280.17 847,893,521.77
Liabilities:
Short-term borrowing 421,685,022.79 421,685,022.79
Accounts payable 25,076,251.02 25,076,251.02
Contractual liabilities 22,238,960.98 22,238,960.98
Payroll payable 3,036,030.14 3,036,030.14
Taxes payable 592,097.19 592,097.19
Other payables 11,819,022.22 11,819,022.22
Other current liabilities 3,347,033.54 3,347,033.54
Deferred income 20,938,130.35 20,938,130.35
Deferred income tax liabilities 7,132,689.60
Subtitle of liabilities 515,865,237.83 508,732,548.23
Net assets 360,559,042.34 339,160,973.54
Less: minority equity 114,286,545.69 108,937,028.49
Net assets obtained 246,272,496.65 230,223,945.05
(4) Gains or losses from remeasurement of the equity held before the date of purchase at the fair value
Carrying amount of the equity Fair value of the equity originally Gains or losses from remeasurement of the
Name of
originally held before the date of held before the date of purchase equity originally held before the date of
acquired party
purchase on the date of purchase on the date of purchase purchase at the fair value
Songyuan
Grain Group 230,223,945.05 246,272,496.65 16,048,551.60
Co., Ltd.
(5) Method and main assumptions for determining the fair value on the date of purchase
1) Appraisal and recognition methods: The asset based approach and the income approach were used to appraise
the assets and liabilities this time.
2) Main hypothesis during the appraisal:
A. On the basis of maintaining consistency, the business scope, business methods and management models of the
evaluated unit can be timely adjusted and innovated along with the development of the market and science and
technology.
B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidence showing
that the production capacity will change in the future, it is assumed that the evaluated unit will not carry out major
fixed-asset investment activities that affect its operations in the future income period, and the production capacity
of the enterprise is estimated according to the condition on the evaluation benchmark date.
C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accounts
receivable and accounts payable similar to the historical years, with no payment in arrears that is significantly
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
different from the historical years.
D. There are no property right disputes or other economic disputes related to the assets and liabilities declared by
the appraised unit.
E. The source of funds and cost of future R&D and production of the evaluated unit will not cause significant
adverse effects on the enterprise.
3) Reasons for asset appreciation:
A. The acquisition of housing and buildings under fixed assets took place earlier, and the increase in housing
prices in the areas where they are located led to valuation appreciation.
B. The acquisition of land use rights under intangible assets took place earlier, and the increase in land market
prices led to valuation appreciation.
2. Business combination involving enterprises under common control
None.
3. Counter purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the consolidation scope arising from other causes
The newly established new bodies in this period are as follows:
Time of Net assets of the end of Net profit from the combination
Name
establishment the period date to the end of the period
16 January,
Gree Electric (Zhuhai Gaolan Port) Co., Ltd. 1,000,170,464.38 170,464.38
2020
18 February,
Zhuhai Ge Health Medical Technology Co., Ltd. 44,211,752.29 24,211,752.29
2020
Gree Chengdu Xinhui Medical Equipment Co., Ltd. 8 April, 2020 86,869,920.67 1,199,920.67
Suzhou Qingzhan Environmental Technology Co.,
13 May, 2020 13,636,129.44 -363,870.56
Ltd.
25 September,
Gree (Ganzhou) Electric Appliances Co., Ltd. 80,049,226.28 49,226.28
2020
26 October,
Gree Tianjin Xinhui Medical Equipment Co., Ltd. Not yet invested
2020
228
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
VII. Equity in other subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Chongqing Chongqing Industrial
1 Gree (Chongqing) Electric Appliances Co., Ltd. 97.00 97.00 Establishment
City City manufacture
Industrial
2 Gree (Hefei) Electric Appliances Co., Ltd. Hefei City Hefei City 100.00 100.00 Establishment
manufacture
Manaus, Manaus, Industrial
3 Gree (Brazil) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
Brazil Brazil manufacture
Zhengzhou Zhengzhou Industrial
4 Gree (Zhengzhou) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
5 Gree (Wuhan) Electric Appliances Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Industrial
6 Gree (Wuhu) Electric Appliances Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Business combination not
Shijiazhuang Shijiazhuang Industrial
7 Gree (Shijiazhuang) Electric Appliances Co., Ltd. 100.00 100.00 involving enterprises under
City City manufacture
common control
Hangzhou Hangzhou Industrial
8 Gree (Hangzhou) Electric Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
9 Gree (Luoyang) Electric Appliances Co., Ltd. Luoyang Luoyang 100.00 100.00 Establishment
manufacture
Industrial
10 Gree (Nanjing) Electric Appliances Co., Ltd. Nanjing Nanjing 100.00 100.00 Establishment
manufacture
Industrial
11 Gree (Chengdu) Electric Appliances Co., Ltd. Chengdu Chengdu 100.00 100.00 Establishment
manufacture
Industrial
12 Gree Changsha HVAC Equipment Co., Ltd. Changsha City Changsha City 100.00 100.00 Establishment
manufacture
229
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Industrial
13 Gree (Chengdu) HVAC Equipment Co., Ltd. Chengdu Chengdu 100.00 100.00 Establishment
manufacture
Business combination
14 Zhuhai Gree Group Finance Company Limited [Note 1] Zhuhai City Zhuhai City Finance 94.16 0.46 94.62 involving enterprises under
common control
15 Zhuhai Hengqin GREE business factoring Co., Ltd. Zhuhai City Zhuhai City Finance 100.00 100.00 Establishment
Business combination
Industrial
16 Zhuhai Landa Compressor Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 involving enterprises under
manufacture
common control
Industrial
17 Hefei Landa Compressor Co., Ltd. Hefei City Hefei City 100.00 100.00 Establishment
manufacture
Zhengzhou Zhengzhou Industrial
18 Zhengzhou Landa Compressor Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Chongqing Chongqing Industrial
19 Chongqing Landa Compressor Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
20 Wuhan Landa Compressor Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Business combination
Industrial
21 Zhuhai Meilingda Refrigeration Technology Co., Ltd. Zhuhai City Zhuhai City 70.00 70.00 involving enterprises under
manufacture
common control
Industrial
22 Zhuhai Landa Material Supply Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Business combination not
Industrial
23 Zhuhai Kaibang Motor Manufacture Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 involving enterprises under
manufacture
common control
Industrial
24 Hefei Kaibang Motor Manufacture Co., Ltd. Hefei City Hefei City 100.00 100.00 Establishment
manufacture
Chongqing Chongqing Industrial
25 Chongqing Kaibang Motor Manufacture Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Zhengzhou Zhengzhou Industrial
26 Henan Kaibang Motor Manufacture Co., Ltd. 100.00 100.00 Establishment
City City manufacture
230
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Business combination
Industrial
27 Zhuhai Gree Electrical Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 involving enterprises under
manufacture
common control
Business combination
Ma'anshan Ma'anshan Industrial
28 Gree Electric Enterprises (Ma'anshan) Ltd. 100.00 100.00 involving enterprises under
City City manufacture
common control
Industrial
29 Gree (Meishan) Electrician Co., Ltd. Meishan City Meishan City 100.00 100.00 Establishment
manufacture
Industrial
30 Gree (Nanjing) Electrician Co., Ltd. Nanjing Nanjing 100.00 100.00 Establishment
manufacture
Zhongshan Zhongshan Industrial
31 GREE (Zhongshan) Home Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Shijiazhuang Shijiazhuang Industrial
32 Gree (Shijiazhuang) Small Home Appliances Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Technical
Gree Green Refrigeration Technology Center Co., Ltd.
33 Zhuhai City Zhuhai City research and 100.00 100.00 Establishment
Of Zhuhai
development
Zhengzhou Zhengzhou Industrial
34 Zhengzhou Gree Green Resources Recycling Co., Ltd 100.00 100.00 Establishment
City City manufacture
Ningxiang Ningxiang Industrial
35 Hunan Green Resources Recycling Co., Ltd 100.00 100.00 Establishment
County County manufacture
Industrial
36 Wuhu Green Resources Recycling Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Shijiazhuang Shijiazhuang Industrial
37 Shijiazhuang Green Resources Recycling Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
38 Tianjin Green Resources Recycling Co., Ltd. Tianjin City Tianjin City 100.00 100.00 Establishment
manufacture
Industrial
39 Zhuhai Gree Daikin Precision Mold Co., Ltd. Zhuhai City Zhuhai City 51.00 51.00 Establishment
manufacture
Industrial
40 Zhuhai Gree Dakin Device Co., Ltd. Zhuhai City Zhuhai City 51.00 51.00 Establishment
manufacture
41 Zhuhai Ligao Precision Manufacturing Co., Ltd. Zhuhai City Zhuhai City Industrial 100.00 100.00 Establishment
231
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
manufacture
Industrial
42 Zhuhai Gree TOSOT Life Electric Appliances Co., Lid. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
43 Gree TOSOT (Suqian) Home Appliances Co., Ltd. Suqian City Suqian City 100.00 100.00 Establishment
manufacture
Industrial
44 Zhuhai HVAC Equipment Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
45 Gree (Wuhan) HVAC Equipment Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
46 Zhuhai EWPE Information Technology Co., Ltd. Zhuhai City Zhuhai City IT 100.00 100.00 Establishment
Business combination
Industrial
47 Zhuhai Gree Xinyuan Electronics Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 involving enterprises under
manufacture
common control
Industrial
48 Gree (Nanjing) Xinyuan Electronics Co., Ltd. Nanjing Nanjing 100.00 100.00 Establishment
manufacture
Business combination not
Kowloon, Kowloon,
49 Gree Hong Kong Electric Appliances Sales Co., Ltd. Sales 100.00 100.00 involving enterprises under
Hong Kong Hong Kong
common control
GREE Shanghai Air Conditioners Sales Co., Ltd. [Note
50 Shanghai City Shanghai City Sales 90.00 9.70 99.70 Establishment
2]
Brazil United Electric Appliances Industry and Sao Paulo, Sao Paulo,
51 Sales 100.00 100.00 Establishment
Commerce Co., Ltd. Brazil Brazil
California, California,
52 Gree (USA) Sales Co., Ltd. Sales 100.00 100.00 Establishment
USA USA
Industrial
53 Zhuhai GREE Intelligent Equipment Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Zhuhai GREE Intelligent Equipment Technology Industrial
54 Zhuhai City Zhuhai City 100.00 100.00 Establishment
Research Institute Co., Ltd. manufacture
Industrial
55 GREE (Wuhan) Intelligent Equipment Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
232
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Technical
56 Gree (Luoyang) Robot Co., Ltd. Luoyang Luoyang research and 100.00 100.00 Establishment
development
Industrial
57 Zhuhai Gree Robot Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
58 Wuhu Precision Manufacturing Co., Ltd. Wuhu City Wuhu City 100.00 100.00 Establishment
manufacture
Industrial
59 Gree (Wuhan) Precision Mold Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Industrial
60 Zhuhai Gree Precision Mold Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Gree (Wu'an) Precision Equipment Manufacturing Co., Industrial
61 Wu'an County Wu'an County 70.00 70.00 Establishment
Ltd. manufacture
Industrial
62 Zhuhai Gree New Material Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
63 Zhuhai Gree Energy Environment Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
64 Zhuhai Gree Info Technology Co., Ltd. Zhuhai City Zhuhai City IT 51.00 51.00 Establishment
Technical
Zhuhai Gree CNC Machine Tool Research Institute Co.,
65 Zhuhai City Zhuhai City research and 100.00 100.00 Establishment
Ltd.
development
Transportation
66 Zhuhai Gree Transportation Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
industry
Industrial
67 Zhuhai Lianyun Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
68 Zhuhai Zero Boundary Integrated Circuit Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
69 Zhuhai Gree Material Supply Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Industrial
70 Zhuhai Gree Lvkong Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
233
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Business combination not
Industrial
71 Hefei Kinghome Electrical Co., Ltd. Hefei City Hefei City 100.00 100.00 involving enterprises under
manufacture
common control
Industrial
72 Gree (Chengdu) Precision Mold Co., Ltd. Chengdu Chengdu 100.00 100.00 Establishment
manufacture
Business combination
Zhuhai Gree Electrical and Mechanical Engineering Industrial
73 Zhuhai City Zhuhai City 100.00 100.00 involving enterprises under
Co., Ltd. manufacture
common control
Industrial
74 Gree (Luoyang) Washing Machine Co., Ltd. Luoyang Luoyang 100.00 100.00 Establishment
manufacture
Guochuang Energy Internet Innovation Center
75 Zhuhai City Zhuhai City IT 75.00 75.00 Establishment
(Guangdong) Co., Ltd.
Industrial
76 Gree (Anji) Precision Mold Co., Ltd. Anji County Anji County 100.00 100.00 Establishment
manufacture
Industrial
77 Zhuhai Gree Green Resources Recycling Co., Ltd Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Business combination not
Industrial
78 Nanjing Walsin Nonferrous Metal Co., Ltd. Nanjing Nanjing 94.30 94.30 involving enterprises under
manufacture
common control
Industrial
79 Guangdong Guochuang Intelligent Technology Co., Ltd. Lianjiang City Lianjiang City 60.00 60.00 Establishment
manufacture
80 Luoyang Lianmei Real Estate Co., Ltd. Luoyang Luoyang Real estate 51.00 51.00 Establishment
Zhuhai Hengqin Gree Huatai Energy Development Co., Industrial
81 Zhuhai City Zhuhai City 51.00 51.00 Establishment
Ltd. manufacture
Industrial
82 Handan Yingdong New Energy Technology Co., Ltd. Wu'an County Wu'an County 100.00 100.00 Establishment
manufacture
Inner Inner Industrial
83 Bayannur Huatai Technology Development Co., Ltd. 51.00 51.00 Establishment
Mongolia Mongolia manufacture
Industrial
84 Gree Material Supply (Wuhan) Co., Ltd. Wuhan City Wuhan City 100.00 100.00 Establishment
manufacture
Industrial
85 Gree Material Supply (Hefei) Co., Ltd. Hefei City Hefei City 100.00 100.00 Establishment
manufacture
234
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Zhengzhou Zhengzhou Industrial
86 Gree Material Supply (Zhengzhou) Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Chongqing Chongqing Industrial
87 Gree Material Supply (Chongqing) Co., Ltd. 100.00 100.00 Establishment
City City manufacture
Industrial
88 Huzhou Landa Compressor Co., Ltd. Anji County Anji County 100.00 100.00 Establishment
manufacture
Wholesale and
89 Gree E-commerce Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
retail trade
Industrial
90 Gree Rongzhu Copper (Nanjing) Co., Ltd. Nanjing Nanjing 100.00 100.00 Establishment
manufacture
Gelan Environmental Protection Technology
91 Shaoguan City Shaoguan City Sales 100.00 100.00 Establishment
(Shaoguan) Co., Ltd.
Business combination not
Songyuan Songyuan
92 Songyuan Grain Group Co., Ltd. Agriculture 75.00 75.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
93 Songyuan Chagan Lake Grain Co., Ltd. Agriculture 100.00 100.00 involving enterprises under
City City
common control
Business combination not
SL Shengyuan (Jilin) Agricultural Development Co., Songyuan Songyuan
94 Agriculture 51.00 51.00 involving enterprises under
Ltd. City City
common control
Business combination not
Songyuan Songyuan
95 SL Group Rice Research Institute Co., Ltd. Agriculture 100.00 100.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
96 Jilin SL Tuga Grain Market Co., Ltd. Agriculture 100.00 100.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
97 Jilin SL Modern Agriculture Development Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
98 SL Group Jiangwan Rice Industry Co., Ltd. Agriculture 51.00 51.00 involving enterprises under
City City
common control
235
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Business combination not
Jilin Chagan Lake Grain and Rice Industrial Park Co., Songyuan Songyuan
99 Agriculture 100.00 100.00 involving enterprises under
Ltd. City City
common control
Business combination not
Songyuan Songyuan
100 SL Jinyu Daqing Agricultural Technology Co., Ltd. Agriculture 51.00 51.00 involving enterprises under
City City
common control
Business combination not
SL (Shenzhen) South China Agricultural Development
101 Shenzhen Shenzhen Agriculture 100.00 100.00 involving enterprises under
Co., Ltd.
common control
Business combination not
102 Songyuan (Ningbo) Grain Sales Co., Ltd. Ningbo Ningbo Agriculture 100.00 100.00 involving enterprises under
common control
Business combination not
Zhenlai County SL Shengyuan Agricultural
103 Baicheng Baicheng Agriculture 100.00 100.00 involving enterprises under
Development Co., Ltd.
common control
Business combination not
Jilin Songyuan Grain Modern Logistics Development Songyuan Songyuan
104 Agriculture 100.00 100.00 involving enterprises under
Co., Ltd. City City
common control
Business combination not
Songyuan Songyuan
105 Jilin SL Xinyu Agricultural Development Co., Ltd. Agriculture 100.00 100.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
106 SL Group Ermapao Ecological Farm Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
107 SL Group Lianhe Ecological Farm Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
108 SL Group Juyuan Agriculture Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
109 SL Group Lvzhiyuan Agriculture Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Shareholding ratio
Serial Main location Place of Nature of (%) Voting right percentage
Name Acquisition mode
Number of operation registration business (%)
Direct Indirect
Business combination not
Songyuan Songyuan
110 SL Group Dongwei Rice Industry Co., Ltd. Agriculture 51.00 51.00 involving enterprises under
City City
common control
Business combination not
111 SL Group Songlin Grain Depot Co., Ltd. Fuyu Fuyu Agriculture 100.00 100.00 involving enterprises under
common control
Business combination not
Songyuan Songyuan
112 SL Group Jingu Grain Depot Co., Ltd. Agriculture 100.00 100.00 involving enterprises under
City City
common control
Business combination not
Songyuan Songyuan
113 SL Group Tongda Grain Storage Co., Ltd. Agriculture 70.00 70.00 involving enterprises under
City City
common control
Business combination not
Jilin Songyuan Grain Huilong Agricultural Technology Songyuan Songyuan
114 Agriculture 51.00 51.00 involving enterprises under
Co., Ltd. City City
common control
Medical
115 Zhuhai Ge Health Medical Technology Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
instruments
Industrial
116 Gree Electric (Zhuhai Gaolan Port) Co., Ltd. Zhuhai City Zhuhai City 100.00 100.00 Establishment
manufacture
Medical
117 Gree Chengdu Xinhui Medical Equipment Co., Ltd. Chengdu Chengdu 75.00 75.00 Establishment
instruments
Industrial
118 Suzhou Qingzhan Environmental Technology Co., Ltd. Suzhou Suzhou 65.00 65.00 Establishment
manufacture
Industrial
119 Gree (Ganzhou) Electric Appliances Co., Ltd. Ganzhou Ganzhou 100.00 100.00 Establishment
manufacture
Industrial
120 Gree Tianjin Xinhui Medical Equipment Co., Ltd. Tianjin City Tianjin City 100.00 100.00 Establishment
manufacture
[Note 1] During the period, the Company increased capital contribution to its controlling subsidiary Zhuhai Gree Group Finance Company Limited (hereinafter
referred to as "Gree Finance Company") by RMB 2,640,000,000, of which RMB 1,500,000,000 was included in the registered capital of Gree Finance Company and
the remaining RMB 1,140,000,000 was included in the capital reserve of Gree Finance Company. After the capital increase, the Company held 94.16% of Gree
Finance Company, and the Company's wholly-owned subsidiaries Gree Electrical and Gree Xinyuan each held 0.23% of Gree Finance Company, so the Company's
237
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
control over Gree Finance Company remained unchanged;
[Note 2]: The Company directly holds 90.00% of total stocks of Gree Shanghai Air Conditioners Sales Co., Ltd., and Gree (Chongqing) Electric Appliances Co., Ltd.
as the subsidiary of the Company holds its remaining 9.70% stocks, so the Company holds its 99.70% stocks in the direct and indirect ways.
(2) Important non-wholly owned subsidiaries
Information of rights and interests held by minority shareholders of important non-wholly owned subsidiaries and profits and losses:
Profits or losses attributable to Equity balance of minority
Shareholding ratio of Dividends declared to distribute to minority
Name minority shareholders in the current shareholders at the end of the
minority shareholders shareholders in the current period
period period
Gree (Chongqing) Electric Appliances Co., Ltd. 3.00% 2,255,432.00 73,884,144.21
Zhuhai Gree Group Finance Company Limited
5.38% 63,127,166.19 411,607,065.23 319,521,485.92
[Note]
[Note] For changes in equity of Zhuhai Gree Group Finance Company Limited, see Note (VII) 1. (1) for details.
(3) Main financial information of important non-wholly owned subsidiaries
Balance at the end of the period
Name
Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liabilities
Gree (Chongqing) Electric Appliances Co.,
2,920,871,321.12 944,587,263.99 3,865,458,585.11 1,390,158,036.58 12,495,741.40 1,402,653,777.98
Ltd.
Zhuhai Gree Group Finance Company
38,131,598,722.42 14,678,190,451.97 52,809,789,174.39 46,634,275,949.33 232,033,203.40 46,866,309,152.73
Limited
(Continued)
Beginning Balance
Name
Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liabilities
Gree (Chongqing) Electric Appliances Co.,
3,898,672,996.86 1,045,004,552.90 4,943,677,549.76 2,542,579,996.06 13,473,813.34 2,556,053,809.40
Ltd.
Zhuhai Gree Group Finance Company
52,065,731,802.44 18,385,117,667.65 70,450,849,470.09 63,819,886,177.95 181,178,505.54 64,001,064,683.49
Limited
238
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(Continued)
Amount for the current period
Name
Operating incomes Net profits Total comprehensive income Cash flows from operating activities
Gree (Chongqing) Electric Appliances Co., Ltd. 4,820,238,798.40 75,181,066.77 75,181,066.77 -3,051,189,240.49
Zhuhai Gree Group Finance Company Limited 2,379,170,026.46 679,943,713.67 681,885,945.92 -12,691,657,223.44
(Continued)
Amount for the previous period
Name
Operating incomes Net profits Total comprehensive income Cash flows from operating activities
Gree (Chongqing) Electric Appliances Co., Ltd. 10,703,012,677.06 784,272,003.69 784,272,003.69 1,209,651,124.46
Zhuhai Gree Group Finance Company Limited 2,399,580,625.93 795,328,040.73 792,299,281.53 3,359,858,744.18
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
2. Equities in joint ventures or associates
(1) Important joint ventures or associates
Shareholding ratio
Main Place of (%) Accounting treatment of
Nature of
Name of invested entity location of registratio associates or joint
business Indire
operation n Direct ventures
ct
Zhuhai Ronglin Equity Investment Zhuhai Business
Zhuhai City 91.27 Equity method
Partnership (Limited Partnership) City services
Zhuhai Hanling Equity Investment Zhuhai Business
Zhuhai City 47.92 Equity method
Partnership (Limited Partnership) City services
(2) Main financial information of important joint ventures
1) Zhuhai Ronglin Equity Investment Partnership (Limited Partnership)
Balance at the end of the period/Amount Balance at the beginning of the
Item
for the current period period/Amount for the previous period
Current assets 1,536,916.77 1,689,835.43
Including: cash and cash equivalents 1,536,916.77 1,689,835.43
Non-current assets 8,660,996,176.54 7,522,991,256.00
Total assets 8,662,533,093.31 7,524,681,091.43
Current liabilities 23,078,118.19 66,000.00
Total liabilities 23,078,118.19 66,000.00
Share of net assets calculated by the agreement 7,061,709,059.56 6,867,716,193.95
Total comprehensive income 1,114,839,883.69 5,209,135,267.94
2) Zhuhai Hanling Equity Investment Partnership (Limited Partnership)
Balance at the end of the period/Amount Balance at the beginning of the
Item
for the current period period/Amount for the previous period
Current assets 123,178,588.99 --
Including: cash and cash equivalents 476,698.58 --
Non-current assets 800,000,000.00 --
Total assets 923,178,588.99 --
Current liabilities 758,152.76 --
Total liabilities 758,152.76 --
Share of net assets calculated by the
922,420,436.23 --
agreement
Total comprehensive income 29,115,512.75 --
Dividends received from joint ventures in
26,695,076.52 --
the current year
(3) Significant restrictions on the ability of joint ventures or associates to transfer funds to the Company
None.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(4) Excess losses incurred by joint ventures or associates
None.
(5) Unrecognized commitments related to investment in joint ventures
None.
(6) Contingent liabilities related to investment in joint ventures or associates
None.
3. Important co-management
None.
4. Equity in structured entities which were not included in the scope of consolidated financial statements
None.
VIII. Risks associated with financial instruments
Main financial instruments of the Company included monetary capital, trading financial assets, derivative
financial assets, receivables financing, receivables, disbursement of loans and receivables, buying back the sale of
financial assets, debt investments, other debt investments, other equity instrument investments, other financial
liabilities (e.g., payables) arising from operation, etc. These financial instruments aimed to provide funds for
operation of the Company.
The financial instruments of the Company may lead to the main risks of credit risks, liquidity risks and market
risks.
1. Classification information of financial instruments
The book values of various financial instruments on the balance sheet date:
(1) Balance at the end of the period
Classification of financial assets
Financial assets
Financial assets which
measured at their fair
Item are measured at their
Financial assets values and of which
fair values and of which
measured at the changes are Total
the changes are included
amortization costs recorded into the
into other
current profits and
comprehensive income
losses
1. Measured by cost or amortized cost
Monetary capital 136,413,143,859.81 136,413,143,859.81
Accounts receivable 8,738,230,905.44 8,738,230,905.44
Other receivables 147,338,547.86 147,338,547.86
Non-current assets due within one
year (debt investment)
Other current assets [note] 13,039,786,857.75 13,039,786,857.75
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Classification of financial assets
Financial assets
Financial assets which
measured at their fair
Item are measured at their
Financial assets values and of which
fair values and of which
measured at the changes are Total
the changes are included
amortization costs recorded into the
into other
current profits and
comprehensive income
losses
Disbursement of loans and advances 5,273,805,581.52 5,273,805,581.52
Subtotal 163,612,305,752.38 163,612,305,752.38
2. Measured at fair values
Trading financial assets 370,820,500.00 370,820,500.00
Derivative financial assets 285,494,153.96 285,494,153.96
Receivables financing 20,973,404,595.49 20,973,404,595.49
Non-current assets due within one
year (other debt investments)
Other current assets 22,298,300.00 22,524,600.00 44,822,900.00
Other debt investments 502,202,293.17 502,202,293.17
Other equity instrument investments 7,788,405,891.47 7,788,405,891.47
Other non-current financial assets 2,003,483,333.33 2,003,483,333.33
Subtotal 29,286,311,080.13 2,682,322,587.29 31,968,633,667.42
Total 163,612,305,752.38 29,286,311,080.13 2,682,322,587.29 195,580,939,419.80
(Continued)
Classification of financial liabilities
Item
Derivative financial
Other financial liabilities Total
liabilities
1. Measured by cost or amortized cost
Short-term borrowing 20,304,384,742.34 20,304,384,742.34
Deposits from customers and
261,006,708.24 261,006,708.24
interbank
Loans from other banks 300,020,250.00 300,020,250.00
Bills payable 21,427,071,950.32 21,427,071,950.32
Accounts payable 31,604,659,166.88 31,604,659,166.88
Financial assets sold for repurchase 475,033,835.62 475,033,835.62
Other payables 2,379,395,717.44 2,379,395,717.44
Other current liabilities 62,912,984,777.41 62,912,984,777.41
Long-term borrowing 1,860,713,816.09 1,860,713,816.09
Subtotal 141,525,270,964.34 141,525,270,964.34
Total 141,525,270,964.34 141,525,270,964.34
(2) Beginning Balance
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Classification of financial assets
Financial assets which Financial assets
Item are measured at their measured at their fair
Financial assets
fair values and of which values and of which the
measured at Total
the changes are included changes are recorded
amortization costs
into other into the current profits
comprehensive income and losses
1. Measured by cost or amortized cost
Monetary capital 125,400,715,267.64 125,400,715,267.64
Accounts receivable 8,439,719,697.00 8,439,719,697.00
Other receivables 159,134,399.10 159,134,399.10
Non-current assets due within one
18,608,350.13 18,608,350.13
year (debt investment)
Other current assets [note] 19,346,895,253.23 19,346,895,253.23
Disbursement of loans and advances 14,423,786,409.22 14,423,786,409.22
Subtotal 167,788,859,376.32 167,788,859,376.32
2. Measured at fair values
Trading financial assets 955,208,583.58 955,208,583.58
Derivative financial assets 92,392,625.69 92,392,625.69
Receivables financing 28,226,248,997.12 28,226,248,997.12
Non-current assets due within one
426,789,360.26 426,789,360.26
year (other debt investments)
Other debt investments 296,836,282.20 296,836,282.20
Other equity instrument investments 4,644,601,697.51 4,644,601,697.51
Other non-current financial assets 2,003,483,333.33 2,003,483,333.33
Subtotal 33,594,476,337.09 3,051,084,542.60 36,645,560,879.69
Total 167,788,859,376.32 33,594,476,337.09 3,051,084,542.60 204,434,420,256.01
(Continued)
Classification of financial liabilities
Item
Derivative financial liabilities Other financial liabilities Total
1. Measured by cost or amortized cost
Short-term borrowing 15,944,176,463.01 15,944,176,463.01
Deposits from customers and
352,512,311.72 352,512,311.72
interbank
Loans from other banks 1,000,446,666.67 1,000,446,666.67
Bills payable 25,285,207,843.86 25,285,207,843.86
Accounts payable 41,656,815,752.46 41,656,815,752.46
Financial assets sold for repurchase 2,074,500,000.00 2,074,500,000.00
Other payables 2,712,692,973.66 2,712,692,973.66
Other current liabilities 65,181,491,855.14 65,181,491,855.14
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Classification of financial liabilities
Item
Derivative financial liabilities Other financial liabilities Total
Long-term borrowing 46,885,882.86 46,885,882.86
Subtotal 154,254,729,749.38 154,254,729,749.38
Total 154,254,729,749.38 154,254,729,749.38
[Note] The above other current assets and other current liabilities excluded prepaid taxes, output tax to be
wrote-off and other items.
2. Credit risks
Credit risks refer to financial losses suffered by one party to the financial instrument due to the other party's
inability to fulfill obligations.
The Company will have transactions with recognized customers with a good reputation only. According to the
policy of the Company, all the customers who require the credit form for transactions shall undergo credit review.
Besides, the Company implements continuous monitoring on the balance of accounts receivable to ensure that the
Company is not confronted with the major risk of bad debts.
Financial assets of the Company include monetary capital, receivables financing, etc. The credit risks of these
financial assets come from nonperformance of the transaction counterparty, and the maximum risk exposure is
equal to the carrying amount of these instruments. Trade terms between the Company and customers focus on
advances, banker's acceptance bill or the mode of pay on delivery, assisted by deal on credit.
The monetary capital is deposited in state-owned financial institutions with a higher credit rating, minimizing the
risk; the receivables financing is mainly banker's acceptance bills, and the risk exposure is rather small. The book
value of receivables financing, accounts receivable, prepayments and other receivables in the consolidated balance
sheet is the highest credit risk with which the Company may be confronted. As at the end of the Report Period, the
Company's receivables financing, accounts receivable, and other accounts receivable accounted for 10.69% of the
total assets (the balance at the beginning of the period was 13.01%), and the above amounts were mainly due
within 1 year, so the Company had no significant credit risk. For the Company's credit risk exposures arising from
the receivables financing, accounts receivable and other receivables, see the disclosed information in Note V. 4
"Receivables", Note V. 5 "Receivables financing" and Note V. 7 "Other receivables".
3. Liquidity risks
Liquidity risks refer to risks of fund shortage generated when the enterprise performs the obligation to 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 1.38
(which was 1.33 at the beginning of the period). which shows that the Company has adequate liquidity and the
risk in shortage of liquidity is low.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
4. Market risks
Market risks refer to fluctuation risks of the fair value or future cash flow of financial instrument due to changes
in the market price, including exchange rate risk and interest rate risk.
(1) Exchange rate risk
Exchange rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments due to
changes in the foreign exchange rate.
As at 31 December, 2020, the amounts of foreign currency financial assets and liabilities held by the Company
converted into RMB were presented in details in Note (V) 64 (1) "Foreign Currency Monetary Items".
The Company will minimize the exchange risk by carrying out the forward exchange transaction business and
controlling the scale of foreign currency assets and liabilities according to changes in the market exchange rate.
(2) Interest rate risks
Interest rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments due to
changes in the market rate of interest.
Set out below are the Company's liabilities with interests as of 31 December, 2020:
Report item Amount Interest rate range Remarks
Floating interest
Short-term borrowing 20,304,384,742.34 0.63%-6.525%
rate
Floating interest
Deposits from customers and interbank 261,006,708.24 0.35%-3.65%
rate
Loans from other banks 300,020,250.00 2.43%
Floating interest
Long-term borrowing 1,860,713,816.09 0.41%-6.18%
rate
Money from financial assets sold for
475,033,835.62 2.60%
repurchase
Total 23,201,159,352.29
IX. Fair value disclosure
1. Fair values of assets and liabilities at the end of period that are measured at the fair value
Fair value at the end of period
Item Measurement of the Measurement of the fair Measurement of
fair value at the first value at the second the fair value at the Total
layer layer third layer
I. Continuous fair value
-- -- -- --
measurement
1. Trading financial assets
Financial assets measured at
their fair values and of which the
changes are recorded into the
current profits and losses
(1) Debt instrument investment 370,820,500.00 370,820,500.00
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Fair value at the end of period
Item Measurement of the Measurement of the fair Measurement of
fair value at the first value at the second the fair value at the Total
layer layer third layer
(2) Derivative financial assets 285,494,153.96 285,494,153.96
2. Other debt investments
Other debt investments 502,202,293.17 502,202,293.17
3. Other equity instrument
investments
Including: Other equity
instrument investments designated
as measured at their fair values and 7,781,405,891.47 7,000,000.00 7,788,405,891.47
of which the changes are recorded
into the current profits and losses
4. Receivables financing
Including: Notes receivable
designated as measured at their fair
values and of which the changes are 20,973,404,595.49 20,973,404,595.49
recorded into the current profits and
losses
5. Other non-current financial assets
Including: Debt instrument
investments designated as measured
at their fair values and of which the 2,003,483,333.33 2,003,483,333.33
changes are recorded into the
current profits and losses
6. Others 44,822,900.00 44,822,900.00
Total of assets measured by fair
8,699,251,584.64 23,262,382,082.78 7,000,000.00 31,968,633,667.42
value continuously
2. Basis for determining market prices of items continuously and not continuously measured at the
first-level fair value
Market prices of trading financial assets - debt instruments, other debt investment, other equity instrument
investments and hedging instruments held by the Company are determined based on the quotation of
corresponding products and investment projects on the open market.
3. Qualitative and quantitative information on valuation techniques and important parameters adopted
by items continuously and not continuously measured at the second-level fair value
Receivables financing held by the Company is the bank acceptance bills and commercial acceptance bills held by
the Company, and their corresponding transfer and discounted amounts are used as the basis for determining their
market prices;
Derivative financial assets and other non-current financial assets held by the Company are mainly forward
hedging instruments and trust products with a recovery period of more than one year, and the recoverable amount
of the corresponding financial assets is used as the basis for determining the market price.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
4. Qualitative and quantitative information on valuation techniques and important parameters adopted
by items continuously and not continuously measured at the third-level fair value
Non-trading equity instrument investments designated as measured at their fair values and of which the changes
are recorded into the current profits and losses, which are held by the Company at the third layer, were mainly
equity investment projects which cannot be verified with the data from the observable active market and of which
the financial forecast is made with their own data.
5. For items continuously measured at fair value, in case of any conversion between various levels during
the current period, reasons for the conversion and policies to determine the conversion time should be
provided
None.
6. Changes in valuation techniques and reasons for changes occurred during the current period
None.
7. Particulars on fair value of financial assets and liabilities which are not measured at fair value
None.
X. Related parties and related transaction
1. Parent company of the Company
On 2 December, 2019, Zhuhai Gree Group Co., Ltd. (hereinafter referred to as "Gree Group"), the original major
shareholder of the Company, signed the Share Transfer Agreement with Zhuhai Mingjun Investment Partnership
(Limited Partnership) (hereinafter referred to as "Zhuhai Mingjun"), pursuant to which Gree Group transferred its
902,359,632 non-restricted circulating shares held in the Company (accounting for 15.00% of the Company's total
equity) to Zhuhai Mingjun. The above equity change was approved by Zhuhai Municipal People's Government
and the State-owned Assets Supervision and Administration Commission of Zhuhai Municipal People's
Government on 13 December, 2019.
On 3 February, 2020, the Transfer Registration Confirmation issued by China Securities Depository and Clearing
Corporation Limited (CSDC) Shenzhen Branch showed that the share transfer registration procedures were
completed, the transfer date was 23 January, 2020, and the Company had neither a controlling shareholder nor an
actual controller.
2. Subsidiaries of the Company
For details, see Note (VII) 1 "Equity in subsidiaries".
3. Joint ventures and associates of the Company
For important joint ventures and associates of the Company, see the Note VII. 2 for details.
4. Other related parties
Name of other related parties Relationships of other related parties with the Company
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Name of other related parties Relationships of other related parties with the Company
Subsidiaries and holding companies of Zhuhai Gree Group Co., Subsidiaries and holding subsidiaries of the Company's original
Ltd. controlling shareholder
Companies where supervisors of the Company act as executive
Shandong Jierui Logistics Co., Ltd.
directors and general managers
Companies where supervisors of the Company act as executive
Shandong Zhirun Electric Appliances Co., Ltd.
directors
Shandong Shengshi Xinxing Gree Trading Co., Ltd. Companies where supervisors of the Company act as managers
Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries and Companies and their subsidiaries and holding subsidiaries where the
holding subsidiaries chairman of the Company serves as a director
Companies where directors of the Company act as executive
Zhejiang Shengshi Xinxing Gree Trading Co., Ltd.
directors and general managers
Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its Companies where the Company's director holds equity and serves as
holding companies the board chairman
Companies where directors of the Company act as executive
Henan Shengshi Xinxing Gree Trading Co., Ltd.
directors
Shanghai Highly (Group) Co., Ltd. and its subsidiaries and The company in which the Company holds more than 5.00% of its
holding subsidiaries shares
Shandong Red April Holdings Group Co., Ltd. and its Companies where supervisors of the Company act as executive
subsidiaries directors and general managers
Zhuhai Xima Pearl New Media Co., Ltd. Companies where board chairman of the Company act as director
Wuhu Green Renewable Resources Recycling Co., Ltd. A company upon which the Company has great influence
Hunan Green Renewable Resources Recycling Co., Ltd. A company upon which the Company has great influence
Subsidiaries where sons of supervisors of the Company act as
Shandong Mely Property Co., Ltd.
executive directors and managers
Henan Huizhong Yifeng Electronic Commerce Co., Ltd. Companies where directors of the Company act as board chairmans
Wholly-owned or holding subsidiaries where former independent
Zhuhai Wantong Special Engineering Plastics Co., Ltd.
directors of the Company act as independent directors
5. Related transactions
(1) Related-party transactions for the purchase and sales of goods and the rendering and receipt of services
1) Purchase of commodities/receiving of services
Contents of
Type of related Amount for the Amount for the
Related party related
transactions current period previous period
transactions
Zhuhai Gree Group Co., Ltd. and its holding
Deposit-taking Interest expense 168,517.68 32,813.02
companies
Zhejiang Shengshi Xinxing Gree Trading
Deposit-taking Interest expense 640.04 26,350.32
Co., Ltd.
Shandong Jierui Logistics Co., Ltd. Deposit-taking Interest expense 540.83 1,624.60
Songyuan Grain Group Co., Ltd. and its
Deposit-taking Interest expense 2,103.39 1,484.15
subsidiaries
Henan Shengshi Xinxing Gree Trading Co.,
Deposit-taking Interest expense 5,393.77 1,290.45
Ltd.
Shandong Shengshi Xinxing Gree Trading
Deposit-taking Interest expense 7,116.88 185.25
Co., Ltd.
Zhejiang Tongcheng Gree Electric
Appliances Co., Ltd. and its holding Deposit-taking Interest expense 105.88 102.16
companies
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Contents of
Type of related Amount for the Amount for the
Related party related
transactions current period previous period
transactions
Shandong Zhirun Electric Appliances Co.,
Deposit-taking Interest expense 0.65 89.21
Ltd.
Shandong Mely Property Co., Ltd. Deposit-taking Interest expense 8.75
Shanghai Highly (Group) Co., Ltd. and its Materials
Raw material 2,057,922,093.99 2,169,555,677.45
holding subsidiaries procurement
Wuhu Green Renewable Resources Materials
Raw material 509,270.48 10,788,213.00
Recycling Co., Ltd. procurement
Hunan Green Renewable Resources Materials
Raw material 4,281,006.00 846,184.00
Recycling Co., Ltd. procurement
Materials
Beijing Gree Technology Co., Ltd. Fittings 46,875,937.46 164,958,551.96
procurement
Songyuan Grain Group Co., Ltd. and its Materials
Foodstuff 1,273,086.22 8,097,519.11
subsidiaries procurement
Accessories and
Zhuhai Gree Group Co., Ltd. and its holding Materials
infrastructure 5,563,078.35 503,256.74
companies procurement
projects
New energy
Zhuhai Yinlong New Energy Co., Ltd. and Purchase of fixed
vehicles and
its subsidiaries and holding subsidiaries assets and 456,527,871.20 72,389,092.82
energy storage
[Note] materials
equipment, etc.
Purchase of fixed Accessories,
Chongqing Pargo Mechanical Equipment
assets and finished products 15,961,014.17 18,138,184.74
Co., Ltd.
materials and equipment
Liaowang All Media Communication Co., Publicity and
Service sourcing 4,150,943.41 4,758,867.94
Ltd. advertising fee
Total 2,593,248,729.15 2,450,099,486.92
2) Sales of commodities/rendering of services
Contents of
Type of related Amount for the Amount for the
Related party related
transactions current period previous period
transactions
Henan Shengshi Xinxing Gree Trading
Loan Interest revenue 42,501,985.05 54,947,437.57
Co., Ltd.
Shandong Jierui Logistics Co., Ltd. Loan Interest revenue 10,440,199.17 24,460,821.26
Zhejiang Shengshi Xinxing Gree Trading
Loan Interest revenue 17,299,672.42 9,588,766.71
Co., Ltd.
Songyuan Grain Group Co., Ltd. and its
Loan Interest revenue 49,766,184.02 7,658,695.92
subsidiaries
Shandong Zhirun Electric Appliances
Loan Interest revenue 141,115.31 3,679,077.57
Co., Ltd.
Shandong Shengshi Xinxing Gree
Loan Interest revenue 1,373,925.57
Trading Co., Ltd.
Zhuhai Gree Group Co., Ltd. and its Handling charge
Loan 801,650.95
holding companies income
Shandong Shengshi Xinxing Gree Handling charge
Loan 141,698.58 339,622.64
Trading Co., Ltd. income
Handling charge
Shandong Jierui Logistics Co., Ltd. Loan 194.34 378.30
income
Henan Shengshi Xinxing Gree Trading Handling charge
Loan 189.15 189.15
Co., Ltd. income
Zhejiang Shengshi Xinxing Gree Trading Handling charge
Loan 378.30 189.15
Co., Ltd. income
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Contents of
Type of related Amount for the Amount for the
Related party related
transactions current period previous period
transactions
Shandong Zhirun Electric Appliances Handling charge
Loan 5.19
Co., Ltd. income
Henan Shengshi Xinxing Gree Trading Sales of
Sales revenue 4,285,955,595.20 8,719,678,107.95
Co., Ltd. commodities
Shandong Shengshi Xinxing Gree Sales of
Sales revenue 3,099,709,898.65 4,935,412,388.65
Trading Co., Ltd. commodities
Zhejiang Shengshi Xinxing Gree Trading Sales of
Sales revenue 4,509,434,341.94 5,202,670,390.20
Co., Ltd. commodities
Shanghai Highly (Group) Co., Ltd. and Sales of
Sales revenue 1,135,301,130.49 1,487,554,791.81
its subsidiaries commodities
Zhuhai Yinlong New Energy Co., Ltd.
Sales of
and its subsidiaries and holding Sales revenue 123,800,930.62 321,087,832.12
commodities
subsidiaries [Note]
Sales of
Beijing Gree Technology Co., Ltd. Sales revenue 21,750,223.87 79,181,522.51
commodities
Zhuhai Gree Group Co., Ltd. and its Sales of
Sales revenue 26,204,546.50 102,866.04
holding companies commodities
Shandong Red April Holdings Group Sales of
Sales revenue 18,008,378.79 102,226.24
Co., Ltd. and its subsidiaries commodities
Sales of
Zhuhai Xima Pearl New Media Co., Ltd. Sales revenue 75,195.22
commodities
Wuhu Green Renewable Resources Sales of
Sales revenue 3,620,606.44
Recycling Co., Ltd. commodities
Henan Huizhong Yifeng Electronic Sales of
Sales revenue 79,088,623.28
Commerce Co., Ltd. commodities
Chongqing Pargo Mechanical Equipment Sales of
Sales revenue 474,477.90
Co., Ltd. commodities
Zhuhai Wantong Special Engineering Sales of
Sales revenue 152,362.61
Plastics Co., Ltd. commodities
Songyuan Grain Group Co., Ltd. and its Sales of
Sales revenue 49,646.00
subsidiaries commodities
Wuhan Digital Design and
Sales of
Manufacturing Innovation Center Co., Sales revenue 2,856,000.00
commodities
Ltd.
Total 13,424,451,702.95 20,850,962,756.40
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. and
its subsidiaries and holding subsidiaries are detailed in Note X. 8.
(2) Associated trusteeship management/contracting or entrusted management/contracting-out
None.
(3) Associated lease
1) The Company as the lessor:
Confirmed income earned on leases
Name of the lessee Type of leased assets
Amount for the current Amount for the previous
period period
Chongqing Pargo Mechanical Equipment
House rental 4,402.87
Co., Ltd.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Confirmed income earned on leases
Name of the lessee Type of leased assets
Amount for the current Amount for the previous
period period
Wuhu Green Renewable Resources
House rental 621,678.57
Recycling Co., Ltd.
Songyuan Grain Group Co., Ltd. and its
House rental 131,062.84 98,297.13
subsidiaries
Total 131,062.84 724,378.57
2) The Company as the lessee:
Confirmed rental expenditure
Name of the lessor Type of leased assets
Amount for the Amount for the
current period previous period
Zhuhai Gree Group Co., Ltd. and its subsidiaries Lease of fixed assets 524,859.52 1,561,299.20
Zhuhai Yinlong New Energy Co., Ltd. and its subsidiaries
Lease of fixed assets 8,361,254.31
and holding subsidiaries [Note]
Total 8,886,113.83 1,561,299.20
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. and
its subsidiaries and holding subsidiaries are detailed in Note X. 8.
(4) Associated guarantee
None.
(5) Fund borrowing of related party
Amount of Balance of
Related party borrowing in the borrowing at the Start date Date due
current period end of the period
Zhejiang Shengshi Xinxing Gree Trading
1,000,000,000.00 5-12 March, 2020 5-12 September, 2020
Co., Ltd.
Shandong Shengshi Xinxing Gree Trading
100,000,000.00 18 March, 2020 18 September, 2020
Co., Ltd.
Songyuan Grain Group Co., Ltd. and its 11 March-30 October, 27 October, 2020-
280,000,000.00
subsidiaries [Note] 2020 30 October, 2021
Total 1,380,000,000.00
[Note] At the end of the period, Songyuan Grain was included in the scope of consolidation. See Note (VI) 1 for
details.
(6) Asset transfer and debt restructuring of the related party
None.
(7) Remunerations for key management
Item Amount for the current period Amount for the previous period
Remunerations for key management 21,711,900.94 23,636,286.12
(8) Other related transactions
None.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
6. Accounts receivable and payable by related parties
(1) Receivable items
Balance at the end of the period Beginning Balance
Item Related party
Bad debt Bad debt
Book balance Book balance
provision provision
Accounts Shanghai Highly (Group) Co.,
252,078,651.19 12,603,932.56 342,684,906.60 17,134,245.33
receivable Ltd. and its subsidiaries
Zhuhai Yinlong New Energy
Accounts
Co., Ltd. and its subsidiaries 46,026,267.23 2,309,517.93 287,055,620.42 16,308,943.33
receivable
and holding subsidiaries
Accounts Chongqing Pargo Mechanical
32,670.00 1,633.50
receivable Equipment Co., Ltd.
Accounts Zhuhai Xima Pearl New Media
61,437.00 3,071.85
receivable Co., Ltd.
Accounts Zhuhai Gree Group Co., Ltd.
1,597,970.47 79,898.52 522,694.59 26,134.73
receivable and its subsidiaries
Accounts Zhuhai Wantong Special
13,050.00 652.50
receivable Engineering Plastics Co., Ltd.
Accounts Wuhu Green Renewable
6,053,168.30 302,658.42 6,629,024.73 331,451.24
receivable Resources Recycling Co., Ltd.
Other Shanghai Highly (Group) Co.,
300.00 15.00
receivables Ltd. and its subsidiaries
Zhuhai Yinlong New Energy
Receivables
Co., Ltd. and its subsidiaries 35,829,151.38 866,644,774.28
financing
and holding subsidiaries [Note]
Receivables Shandong Shengshi Xinxing 1,354,822,618.4
1,445,558,820.62
financing Gree Trading Co., Ltd. 0
Receivables Henan Shengshi Xinxing Gree 1,060,266,463.3
1,378,451,569.12
financing Trading Co., Ltd. 3
Receivables Shandong Jierui Logistics Co.,
250,000.00 958,492,633.76
financing Ltd.
Receivables Zhejiang Shengshi Xinxing
51,154,515.78 962,599,288.80
financing Gree Trading Co., Ltd.
Receivables Shanghai Highly (Group) Co.,
250,468,129.83 209,149,853.41
financing Ltd. and its subsidiaries
Shandong Red April Holdings
Receivables
Group Co., Ltd. and its 29,922,971.83
financing
subsidiaries
Receivables Zhejiang Tongcheng Gree
54,790,620.60
financing Electric Appliances Co., Ltd.
Beijing Gree Technology Co.,
Prepayment 4,525,924.98
Ltd.
Chongqing Pargo Mechanical
Prepayment 1,272,187.75 982,237.44
Equipment Co., Ltd.
Shanghai Highly (Group) Co.,
Prepayment 18,388,182.09 2,038,333.25
Ltd. and its subsidiaries
Wuhan Digital Design and
Contract
Manufacturing Innovation 461,040.00 23,052.00
assets
Center Co., Ltd.
Disburseme
nt of loans Henan Shengshi Xinxing Gree
1,400,000,000.00 35,000,000.00
and Trading Co., Ltd.
advances
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of the period Beginning Balance
Item Related party
Bad debt Bad debt
Book balance Book balance
provision provision
Disburseme
nt of loans Zhejiang Shengshi Xinxing
890,000,000.00 22,250,000.00
and Gree Trading Co., Ltd.
advances
Disburseme
nt of loans Shandong Jierui Logistics Co.,
517,400,000.00 12,935,000.00
and Ltd.
advances
Disburseme
nt of loans Songyuan Grain Group Co.,
1,100,000,000.00 27,500,000.00
and Ltd.
advances
Disburseme
nt of loans Shandong Zhirun Electric
80,000,000.00 2,000,000.00
and Appliances Co., Ltd.
advances
Loans and
advances - Henan Shengshi Xinxing Gree
2,046,916.67
accrued Trading Co., Ltd.
interest
Loans and
advances - Zhejiang Shengshi Xinxing
1,376,038.89
accrued Gree Trading Co., Ltd.
interest
Loans and
advances - Shandong Jierui Logistics Co.,
725,263.89
accrued Ltd.
interest
Loans and
advances - Shandong Zhirun Electric
117,528.89
accrued Appliances Co., Ltd.
interest
Loans and
advances - Songyuan Grain Group Co.,
81,079.17
accrued Ltd.
interest
Other Zhuhai Yinlong New Energy
current Co., Ltd. and its subsidiaries 802,418,995.36
assets and holding subsidiaries
Other
Chongqing Pargo Mechanical
non-current 20,224.55 281,863.41
Equipment Co., Ltd.
assets
3,138,051,135.8
Total 15,321,360.43 11,285,241,852.13 133,488,846.48
8
[Note] The related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. and
its subsidiaries and holding subsidiaries are detailed in Note (X) 8.
(2) Payable items
Balance at the end of
Item Related party Beginning Balance
the period
Shanghai Highly (Group) Co., Ltd. and its holding
Contractual liabilities 126,505.08
subsidiaries
Contractual liabilities Shandong Red April Holdings Group Co., Ltd. and its 872,251.43
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of
Item Related party Beginning Balance
the period
subsidiaries
Contractual liabilities Henan Shengshi Xinxing Gree Trading Co., Ltd. 892,271,917.85 114,555,126.32
Contractual liabilities Shandong Shengshi Xinxing Gree Trading Co., Ltd. 783,594,597.96 1,057,527,043.55
Contractual liabilities Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. 195,303,464.04 356,707,439.96
Other current liabilities - Shanghai Highly (Group) Co., Ltd. and its holding
16,445.66
Output tax to be wrote-off subsidiaries
Other current liabilities - Shandong Red April Holdings Group Co., Ltd. and its
113,392.69
Output tax to be wrote-off subsidiaries
Other current liabilities -
Henan Shengshi Xinxing Gree Trading Co., Ltd. 115,995,349.32 14,892,166.42
Output tax to be wrote-off
Other current liabilities -
Shandong Shengshi Xinxing Gree Trading Co., Ltd. 101,867,297.74 137,478,515.66
Output tax to be wrote-off
Other current liabilities -
Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. 25,389,450.32 46,371,967.19
Output tax to be wrote-off
Deposit-taking Songyuan Grain Group Co., Ltd. 50,021,372.44
Deposit-taking Zhuhai Gree Group Co., Ltd. and its subsidiaries 523,466.48 9,208,139.00
Deposit-taking Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. 21,518.97 50,347.95
Deposit-taking Shandong Shengshi Xinxing Gree Trading Co., Ltd. 126,971.59 49,087.42
Deposit-taking Shandong Jierui Logistics Co., Ltd. 0.26 13,324.91
Zhejiang Tongcheng Gree Electric Appliances Co.,
Deposit-taking 29,820.55 29,714.68
Ltd. and its holding companies
Deposit-taking Henan Shengshi Xinxing Gree Trading Co., Ltd. 273,262.06 7,691.24
Deposit-taking Shandong Mely Property Co., Ltd. 2,464.18
Deposit-taking Shandong Zhirun Electric Appliances Co., Ltd. 196.01
Deposits from customers -
Zhuhai Gree Group Co., Ltd. and its subsidiaries 44.66 1,522.01
Accrued interest
Deposits from customers -
Songyuan Grain Group Co., Ltd. and its subsidiaries 1,168.95
Accrued interest
Deposits from customers -
Shandong Jierui Logistics Co., Ltd. 914.35
Accrued interest
Deposits from customers -
Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. 2.30 5.38
Accrued interest
Deposits from customers -
Shandong Shengshi Xinxing Gree Trading Co., Ltd. 9.69 5.25
Accrued interest
Deposits from customers -
Shandong Mely Property Co., Ltd. 0.26
Accrued interest
Deposits from customers - Zhejiang Tongcheng Gree Electric Appliances Co.,
3.19 3.18
Accrued interest Ltd. and its holding companies
Deposits from customers -
Henan Shengshi Xinxing Gree Trading Co., Ltd. 19.11 0.82
Accrued interest
Deposits from customers -
Shandong Zhirun Electric Appliances Co., Ltd. 0.02
Accrued interest
Shanghai Highly (Group) Co., Ltd. and its
Accounts payable 205,355,411.45 445,278,880.37
subsidiaries
Zhuhai Yinlong New Energy Co., Ltd. and its holding
Accounts payable 70,497,837.19 59,560,969.05
companies
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of
Item Related party Beginning Balance
the period
Accounts payable Beijing Gree Technology Co., Ltd. 17,669,736.14 20,290,119.30
Hunan Green Renewable Resources Recycling Co.,
Accounts payable 3,341,338.52 4,111,822.34
Ltd.
Wuhu Green Renewable Resources Recycling Co.,
Accounts payable 3,789,547.79 4,011,812.79
Ltd.
Accounts payable Chongqing Pargo Mechanical Equipment Co., Ltd. 4,875,439.28 3,885,008.94
Accounts payable Zhuhai Gree Group Co., Ltd. and its subsidiaries 858,490.19 769,880.13
Accounts payable Songyuan Grain Group Co., Ltd. and its subsidiaries 722,696.60
Accounts payable Henan Shengshi Xinxing Gree Trading Co., Ltd. 249,988.68
Shanghai Highly (Group) Co., Ltd. and its
Other payables 1,013,050.00 30,293.52
subsidiaries
Other payables Beijing Gree Technology Co., Ltd. 205,402.42 5,402.42
Zhejiang Tongcheng Gree Electric Appliances Co.,
Other payables 204.24 204.24
Ltd. and its holding companies
Other payables Zhuhai Gree Group Co., Ltd. and its subsidiaries 80,000.00 5,411.63
Other payables Chongqing Pargo Mechanical Equipment Co., Ltd. 141,592.92
Total 2,423,227,710.67 2,326,966,837.58
7. Related party's commitment
None.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
8. Related transactions and current amounts between the Company and Yinlong New Energy Co., Ltd. and its subsidiaries and holding subsidiaries
(1) Purchase of commodities/receiving of services and payables and prepayments
Balance at the end of the
Beginning Balance
period
Type of related Contents of related Amount for the Amount for the
Related party Other non-current
transactions transactions current period previous period Other non-current assets
assets (+)/accounts
(+)/accounts payable (-)
payable (-)
Purchase of fixed assets New energy vehicles and
Zhuhai Guangtong Automobile Co., Ltd. 32,456,758.70 54,076,060.52 -76,830,334.68 -55,832,870.55
and materials energy storage equipment, etc.
Zhuhai Yinlong Electric Appliance Co., Purchase of fixed assets New energy vehicles and
1,931,623.93 -218,273.50 -218,273.50
Ltd. and materials energy storage equipment, etc.
Purchase of fixed assets New energy vehicles and
Zhuhai Yinlong New Energy Co., Ltd. 16,381,555.97 4,677,568.56 -2,464,269.09 -2,946,841.40
and materials energy storage equipment, etc.
Shijiazhuang Zhongbo Automobile Co., Purchase of fixed assets New energy vehicles and
384,706.96 7,434,867.09 320,894.16
Ltd. and materials energy storage equipment, etc.
Purchase of fixed assets New energy vehicles and
Tianjin Guangtong Automobile Co., Ltd. 156,878.28 2,175,159.89 8,805.08 -25,677.08
and materials energy storage equipment, etc.
Purchase of fixed assets New energy vehicles and
Tianjin Yinlong New Energy Co., Ltd. 2,106,414.29 622,066.91 -243,255.40 -288.00
and materials energy storage equipment, etc.
Purchase of fixed assets
New energy vehicles and
Chengdu Yinlong New Energy Co., Ltd. and materials and lease of 385,045.87 253,529.85 -419,700.00 -286,488.73
energy storage equipment, etc.
fixed assets
Purchase of fixed assets New energy vehicles and
Hebei Yinlong New Energy Co., Ltd. 90,311.20 50,000.00 300,000.00
and materials energy storage equipment, etc.
Chengdu Guangtong Automobile Co., Purchase of fixed assets New energy vehicles and
404,164,773.10 1,218,216.07 9,198,296.24 -550,529.79
Ltd. and materials energy storage equipment, etc.
Purchase of fixed assets New energy vehicles and
Altairnano Inc. 6,317.88 50,000.00
and materials energy storage equipment, etc.
Luoyang Guangtong Automobile Co., Purchase of fixed assets New energy vehicles and
701,769.91
Ltd. and materials energy storage equipment, etc.
Purchase of fixed assets
New energy vehicles and
Luoyang Yinlong New Energy Co., Ltd. and materials and lease of 7,976,509.12
energy storage equipment, etc.
fixed assets
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of the
Beginning Balance
period
Type of related Contents of related Amount for the Amount for the
Related party Other non-current
transactions transactions current period previous period Other non-current assets
assets (+)/accounts
(+)/accounts payable (-)
payable (-)
Handan Branch of Zhuhai Guangtong Purchase of fixed assets New energy vehicles and
21,928.04 50,000.00
Automobile Co., Ltd. and materials energy storage equipment, etc.
Luoyang Branch of Zhuhai Guangtong Purchase of fixed assets New energy vehicles and
56,156.19
Automobile Co., Ltd. and materials energy storage equipment, etc.
Total 464,889,125.51 72,389,092.82 -70,497,837.19 -59,560,969.05
[Note] The above-mentioned related transactions included RMB 456,527,871.20 for purchase of fixed assets and materials and RMB 8,361,254.31 for lease of fixed
assets, totaling RMB 464,889,125.51.
(2) Sales of commodities/rendering of services and receivables and advances from customers
Balance at the end of the period Beginning Balance
Accounts
Type of Accounts receivable
Contents of related Amount for the Amount for the receivable
Related party related Receivables Receivables
transactions current period previous period (+)/contract (+)/contract
transactions financing / other financing / other
liabilities (-)/other liabilities (-)/other
current assets current assets
current liabilities (-) current liabilities
(-)
Sales of smart equipment,
Hebei Yinlong New Energy Sales of
bus air conditioners, molds, 11,484,769.87 12,771,027.31 3,533,733.09 -8,363,164.52 648,985,142.03
Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Sales of
Altairnano Inc. bus air conditioners, molds, 100,000.00
commodities
motors, etc.
Sales of smart equipment,
Chengdu Guangtong Sales of
bus air conditioners, molds, 4,189,479.65 5,399,830.77 4,734,112.00 -779,170.51
Automobile Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Tianjin Guangtong Sales of
bus air conditioners, molds, 3,982,247.77 54,796,039.36 4,499,940.00 -728,658.77
Automobile Co., Ltd. commodities
motors, etc.
Chengdu Yinlong New Sales of Sales of smart equipment,
52,625,416.72 23,795,711.05
Energy Co., Ltd. commodities bus air conditioners, molds,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance at the end of the period Beginning Balance
Accounts
Type of Accounts receivable
Contents of related Amount for the Amount for the receivable
Related party related Receivables Receivables
transactions current period previous period (+)/contract (+)/contract
transactions financing / other financing / other
liabilities (-)/other liabilities (-)/other
current assets current assets
current liabilities (-) current liabilities
(-)
motors, etc.
Sales of smart equipment,
Zhuhai Yinlong New Energy Sales of
bus air conditioners, molds, 25,795,708.14 11,947,948.73 2,460,901.13 24,186,193.10 303,700,960.38 802,418,995.36
Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Tianjin Yinlong New Energy Sales of
bus air conditioners, molds, 126,713,067.31 665,000.00
Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Zhuhai Guangtong Sales of
bus air conditioners, molds, 4,015,794.02 36,972.48 6,608,210.07 391,183.31 67,893,830.24
Automobile Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Zhuhai Yinlong Electric Sales of
bus air conditioners, molds, 18,096,962.94 20,133,788.34 10,000,000.00 -6,924,346.16
Appliance Co., Ltd. commodities
motors, etc.
Sales of smart equipment,
Shijiazhuang Zhongbo Sales of
bus air conditioners, molds, 3,591,835.91 85,627,235.11 4,055,582.60 586,774.97 149,765,802.01
Automobile Co., Ltd. commodities
motors, etc.
Handan Branch of Zhuhai Sales of smart equipment,
Sales of
Guangtong Automobile Co., bus air conditioners, molds, 50,000.00
commodities
Ltd. motors, etc.
Luoyang Branch of Zhuhai Sales of smart equipment,
Sales of
Guangtong Automobile Co., bus air conditioners, molds, 18,715.60
commodities
Ltd. motors, etc.
Total 123,800,930.62 321,087,832.12 46,026,267.23 35,829,151.38 287,055,620.42 1,669,063,769.64
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
XI. Share-based payments
None.
XII. Commitments and contingencies
1. Important commitments
The Company had no significant commitments to be disclosed.
2. Contingencies
None.
3. Others
None.
XIII. Events after the balance sheet date
1. Important non-adjustment matters
None.
2. Profit distribution
According to the resolution at the nineteenth meeting of the eleventh session of the board of directors, the
Company's profit distribution plan of 2020: Temporarily calculated by the total 5,832,851,217 shares entitled to
profit distribution rights on 28 April, 2021 (namely the total stock capital of the Company equivalent to
6,015,730,878 shares minus 182,879,661 shares held by the Company's repurchase account), all shareholders will
be distributed a cash of RMB 30 (tax included) per 10 shares, with the total amount of cash dividends to be
distributed in such a way up to RMB 17,498,553,651.00. This distribution preplan still needs to be approved by
the general meeting of shareholders.
3. Sales return
No important sales return occurred after the balance sheet date.
4. Other events after the balance sheet date
None.
XIV. Other important events
1. Correction of early errors in accounting
None.
2. Debt restructuring
None.
3. Asset replacement
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(1) Exchange of non-monetary assets
None.
(2) Replacement of other assets
None.
4. Pension plan
None.
5. Discontinued operation
Profit from discontinued
Income
operation attributable to
Item Revenue Expense Total profit tax Net profits
owners of parent
expenses
company
Gree (USA) Sales Co., Ltd. 275,791.17 -275,791.17 5,517.20 -281,308.37 -281,308.37
(Continued)
Net cash flows from operating Net cash flows from Net cash flows from financing
Item
activities investment activities activities
Gree (USA) Sales Co., Ltd. -281,308.37
6. Other important transactions and events affecting investor decisions
(1) Share repurchase
The Company held the tenth and sixteenth meetings of the eleventh session of board of directors on 10 April, 2020
and 13 October, 2020, respectively, which deliberated and approved the Proposal on the Partial Repurchase of
Public Shares and agreed to the Company's use of self-owned funds to repurchase the Company's A shares by
means of centralized bidding transactions (hereinafter referred to as "Phase-1 Repurchase" and "Phase-2
Repurchase"), and the total amount of repurchase funds of each phase shall not be lower than RMB 3 billion
(inclusive) and shall not exceed RMB 6 billion (inclusive).
As at 24 February, 2021, the phase-1 repurchase plan of the Company had been implemented. The Company
accumulatively bought 108,365,753 shares of the Company by means of centralized bidding transactions through
the special securities repurchase account. The highest transaction price was RMB 60.18/share, the lowest
transaction price was RMB 53.01/share, and the total transaction amount was RMB 5,999,591,034.74 (excluding
transaction costs). As at 28 April, 2021, for the phase-2 repurchase plan, the Company accumulatively bought
74,513,908 shares of the Company by means of centralized bidding transactions through the special securities
repurchase account. The highest transaction price was RMB 61.95/share, the lowest transaction price was RMB
56.46/share, and the total transaction amount was RMB 4,420,644,968.79 (excluding transaction costs). Both
phases of repurchases complied with the requirements of relevant laws and regulations, as well as the Company's
established repurchase plans.
(2) Issuance of ultra-short-term financing bills
The Company's first extraordinary general meeting of shareholders in 2020 considered and approved the
260
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
"Proposal on Debt Financing Instruments to be Registered and Issued", and agreed that the Company registers
debt financing instruments with a total amount not exceeding RMB 18 billion (inclusive), of which the
ultra-short-term financing bonds to be registered do not exceed RMB 10 billion (inclusive), the short-term
financing bonds to be registered do not exceed RMB 3 billion (inclusive), and the medium-term notes to be
registered do not exceed RMB 5 billion (inclusive).
The China Interbank Market Dealers Association held the 37th registration meeting in 2020 on 7 April, 2020,
agreed to accept the registration of the Company's ultra-short-term financing bonds, short-term financing bonds
and medium-term bills, and issued the Registration Acceptance Notice for them respectively
According to the Company's capital plan arrangement and the inter-bank market situation, during 21 January - 16
April, 2021, the Company issued the first - fifth phases of ultra-short-term financing bonds for 2021, and the total
actual issuance amount was RMB 15 billion. The first-fifth phases of ultra-short-term financing bills were
honored on 26 February, 9 April, 26 June, 6 July and 2 June, 2021 respectively.
XV. Notes to main items of financial statements of the parent company
1. Accounts receivable
(1) Receivable are disclosed by account age
Account age Balance at the end of the period
Within 1 year 3,505,314,072.52
1 to 2 years 159,850,396.86
2 to 3 years 105,768,515.14
Over 3 years 12,912,969.90
Subtotal 3,783,845,954.42
Less: Bad debt provisions 235,054,259.15
Total 3,548,791,695.27
(2) Accounts receivable is disclosed by category
Balance at the end of the period
Book balance Bad debt provision
Category
Percentage of Carrying amount
Percentage
Amount Amount appropriation
(%)
(%)
Accounts receivable with bad debt
4,715,115.32 0.12 4,715,115.32 100.00
provisions accrued separately
Accounts receivable with bad debt
provisions accrued according to the 3,779,130,839.10 99.88 230,339,143.83 6.10 3,548,791,695.27
combination
Including: account age combination 3,019,555,812.57 79.81 230,339,143.83 7.63 2,789,216,668.74
Risk free combination 759,575,026.53 20.07 759,575,026.53
Total 3,783,845,954.42 100.00 235,054,259.15 6.21 3,548,791,695.27
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(Continued)
Beginning Balance
Book balance Bad debt provision
Category
Percentage of Carrying amount
Percentage
Amount Amount appropriation
(%)
(%)
Accounts receivable with bad
debt provisions accrued 4,715,115.32 0.11 4,715,115.32 100.00
separately
Accounts receivable with bad
debt provisions accrued 4,105,680,036.39 99.89 232,409,515.06 5.66 3,873,270,521.33
according to the combination
Including: account age
3,480,423,548.05 84.68 232,409,515.06 6.68 3,248,014,032.99
combination
Risk free combination 625,256,488.34 15.21 625,256,488.34
Total 4,110,395,151.71 100.00 237,124,630.38 5.77 3,873,270,521.33
1) Accounts receivable with bad debt provisions accrued separately:
Balance at the end of the period
Name
Percentage of appropriation
Book balance Bad debt provision Reason for appropriation
(%)
Expected to be difficult to
Entity 1 4,715,115.32 4,715,115.32 100.00
recover
Total 4,715,115.32 4,715,115.32 100.00 --
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
Account age Book balance Bad debt provision Percentage of appropriation (%)
Within 1 year 2,745,739,045.99 137,286,952.30 5.00
1 to 2 years 159,850,396.86 31,970,079.37 20.00
2 to 3 years 105,768,515.14 52,884,257.58 50.00
Over 3 years 8,197,854.58 8,197,854.58 100.00
Total 3,019,555,812.57 230,339,143.83 7.63
3) In the combination, the accounts receivable with bad debt provisions accrued by low risk combination
None.
(3) Bad debt provision appropriated, recovered or reversed in the current period
Change of the current period
Balance at the end of the
Category Beginning Balance
Appropri Recovered or Wrote-of period
Others
ation reversed f
Accrued
4,715,115.32 4,715,115.32
separately
Account age
232,409,515.06 2,070,371.23 230,339,143.83
combination
Total 237,124,630.38 2,070,371.23 235,054,259.15
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
(4) Particulars on accounts receivable actually wrote-off in the current period
None.
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
Percentage (%) in the
Balance of provision for
Balance at the end of the period of total balance at the end
Name of entity bad debts at the end of the
accounts receivable of the period of accounts
period
receivable
First 838,780,517.80 22.17 41,939,025.89
Second 687,830,573.02 18.18
Third 155,015,146.87 4.10 9,007,363.94
Fourth 114,960,567.88 3.04 5,748,028.39
Fifth 108,651,482.62 2.87 5,432,574.13
Total 1,905,238,288.19 50.36 62,126,992.35
(6) Accounts receivable derecognized due to the transfer of financial assets
None.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivable
None.
2. Other receivables
Item Balance at the end of the period Beginning Balance
Other receivables 2,304,222,611.24 2,757,398,837.97
Dividends receivable 2,932,373.42
Total 2,307,154,984.66 2,757,398,837.97
[Note] Other receivables in the above table refers to other receivables after deduction of the interest receivable and
dividends receivable.
(1) Classification of other receivables by the nature of money
Book balance at the beginning of the
Nature of money Book balance at the end of the period
period
Intercourse funds and risk-free money 2,310,790,456.35 2,764,178,780.86
Less: Bad debt provisions 6,567,845.11 6,779,942.89
Total 2,304,222,611.24 2,757,398,837.97
(2) Particulars on accruing of bad debt provisions
Phase 1 Phase 2 Phase 3
Bad debt provision Expected credit Expected credit loss for the Expected credit loss for the entire Total
losses in the next entire duration (no credit duration (credit impairment
12 months impairment occurred) occurred)
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Phase 1 Phase 2 Phase 3
Bad debt provision Expected credit Expected credit loss for the Expected credit loss for the entire Total
losses in the next entire duration (no credit duration (credit impairment
12 months impairment occurred) occurred)
Balance as at 1 January,
4,881,492.49 1,898,450.40 6,779,942.89
2020
Appropriation for the
496,094.20 496,094.20
current period
Reserved in the current
708,191.98 708,191.98
period
Balance as at 31
4,173,300.51 2,394,544.60 6,567,845.11
December, 2020
(3) Disclosure by account age
Account age Book balance
Within 1 year 2,307,405,410.83
1 to 2 years 413,410.49
2 to 3 years 1,319,545.06
Over 3 years 1,652,089.97
Subtotal 2,310,790,456.35
Less: Bad debt provisions 6,567,845.11
Total 2,304,222,611.24
(4) Bad debt provision appropriated, recovered or reversed in the current period
Change of the current period
Balance at the end of
Category Beginning Balance
the period
Appropriation Recovered or reversed Wrote-off
Account age
6,779,942.89 496,094.20 708,191.98 6,567,845.11
combination
Total 6,779,942.89 496,094.20 708,191.98 6,567,845.11
(5) Particulars on other receivables actually wrote-off in the current period
None.
(6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
Balance of
Proportion to the total provision for
Balance at the end of
Name of entity Nature of money Account age balance of other receivables bad debts at
the period
at the end of the period (%) the end of the
period
First Risk-free money 1,867,782,133.47 Within 1 year 80.83
Second Risk-free money 205,347,922.46 Within 1 year 8.89
Third Risk-free money 54,293,176.38 Within 1 year 2.35
Fourth Risk-free money 45,000,000.00 Within 1 year 1.95
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Balance of
Proportion to the total provision for
Balance at the end of
Name of entity Nature of money Account age balance of other receivables bad debts at
the period
at the end of the period (%) the end of the
period
Fifth Intercourse funds 27,294,761.04 Within 1 year 1.18 1,364,738.05
Total -- 2,199,717,993.35 -- 95.20 1,364,738.05
(7) Receivables involving government subsidies
None.
(8) Other receivables derecognized due to the transfer of financial assets
None.
(9) Assets and liabilities formed due to the transfer and continuous involvement of other receivables
None.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
3. Long-term equity investment
Balance at the end of the period Beginning Balance
Item
Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investment in subsidiaries 17,421,936,741.10 17,421,936,741.10 13,160,012,796.05 13,160,012,796.05
Investment in associated and joint
7,199,360,635.26 1,940,009.35 7,197,420,625.91 7,066,126,170.64 1,940,009.35 7,064,186,161.29
ventures
Total 24,621,297,376.36 1,940,009.35 24,619,357,367.01 20,226,138,966.69 1,940,009.35 20,224,198,957.34
(1) Investment in subsidiaries
Increase/Decrease in the current period Balance of
Opening balance (book Closing balance (book provision for
Name of invested entities Appropriated
value) Additional Disinvest value) impairment at the
provision for Others
investment ment end of the period
impairment
Gree (Brazil) Electric Appliances Co., Ltd. 659,342,914.36 659,342,914.36
Gree (Chongqing) Electric Appliances Co.,
223,100,000.00 223,100,000.00
Ltd.
GREE Shanghai Air Conditioners Sales Co.,
1,800,000.00 1,800,000.00
Ltd
Zhuhai Gree Group Finance Company Limited 1,400,371,239.99 2,640,000,000.00 4,040,371,239.99
Zhuhai Gree Electrical Co., Ltd. 1,684,680,359.95 1,684,680,359.95
Zhuhai Landa Compressor Co., Ltd. 968,225,519.93 968,225,519.93
Zhuhai Gree Xinyuan Electronics Co., Ltd. 154,290,096.61 154,290,096.61
Zhuhai Gree TOSOT Life Electric Appliances
30,000,000.00 30,000,000.00
Co., Lid.
Zhuhai Kaibang Motor Manufacture Co., Ltd. 83,860,929.67 83,860,929.67
Gree (Hefei) Electric Appliances Co., Ltd. 505,370,626.10 505,370,626.10
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Increase/Decrease in the current period Balance of
Opening balance (book Closing balance (book provision for
Name of invested entities Appropriated
value) Additional Disinvest value) impairment at the
provision for Others
investment ment end of the period
impairment
Gree Hong Kong Electric Appliances Sales
472,879.08 472,879.08
Co., Ltd.
Zhuhai Gree Dakin Device Co., Ltd. 283,117,574.47 283,117,574.47
Zhuhai Gree Daikin Precision Mold Co., Ltd. 201,911,186.86 201,911,186.86
GREE (Zhongshan) Home Appliances Co.,
30,000,000.00 30,000,000.00
Ltd.
Gree Green Refrigeration Technology Center
676,040,000.00 676,040,000.00
Co., Ltd. Of Zhuhai
Zhuhai HVAC Equipment Co., Ltd. 100,000,000.00 100,000,000.00
Gree (Wuhan) Electric Appliances Co., Ltd. 600,000,000.00 600,000,000.00
Gree (Zhengzhou) Electric Appliances Co.,
720,000,000.00 720,000,000.00
Ltd.
Gree Zhengzhou Green Resources Recycling
5,000,000.00 5,000,000.00
Co., Ltd
Hunan Green Resources Recycling Co., Ltd 5,000,000.00 5,000,000.00
Wuhu Green Resources Recycling Co., Ltd. 2,000,000.00 2,000,000.00
Gree (Shijiazhuang) Small Home Appliances
10,000,000.00 10,000,000.00
Co., Ltd.
Gree (Wuhu) Electric Appliances Co., Ltd. 20,000,000.00 20,000,000.00
Shijiazhuang Green Resources Recycling Co.,
5,000,000.00 5,000,000.00
Ltd.
Gree (Shijiazhuang) Electric Appliances Co.,
98,940,059.97 98,940,059.97
Ltd.
Tianjin Green Resources Recycling Co., Ltd. 5,000,000.00 5,000,000.00
Zhuhai Ligao Precision Manufacturing Co.,
30,000,000.00 30,000,000.00
Ltd.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Increase/Decrease in the current period Balance of
Opening balance (book Closing balance (book provision for
Name of invested entities Appropriated
value) Additional Disinvest value) impairment at the
provision for Others
investment ment end of the period
impairment
Gree Changsha HVAC Equipment Co., Ltd. 50,000,000.00 50,000,000.00
Zhuhai IVP Information Technology Co., Ltd. 100,000,000.00 100,000,000.00
Gree TOSOT (Suqian) Home Appliances Co.,
140,000,000.00 140,000,000.00
Ltd.
Wuhu Precision Manufacturing Co., Ltd. 30,000,000.00 30,000,000.00
Zhuhai Gree New Material Co., Ltd. 30,000,000.00 30,000,000.00
Zhuhai GREE Intelligent Equipment Co., Ltd. 100,000,000.00 100,000,000.00
Zhuhai Hengqin GREE business factoring Co.,
100,000,000.00 100,000,000.00
Ltd.
Zhuhai Gree Precision Mold Co., Ltd. 100,000,000.00 100,000,000.00
Gree (Wuhan) Precision Mold Co., Ltd. 80,000,000.00 80,000,000.00
Zhuhai GREE Intelligent Equipment
50,000,000.00 50,000,000.00
Technology Research Institute Co., Ltd.
Zhuhai Gree Energy Environment Technology
200,000,000.00 200,000,000.00
Co., Ltd.
Gree (Wuhan) HVAC Equipment Co., Ltd. 40,000,000.00 40,000,000.00
Gree (Hangzhou) Electric Appliances Co., Ltd. 550,000,000.00 550,000,000.00
Zhuhai Gree Info Technology Co., Ltd. 510,000.00 510,000.00
Gree (Wu'an) Precision Equipment
210,000,000.00 210,000,000.00
Manufacturing Co., Ltd.
Zhuhai Gree Transportation Co., Ltd. 50,000,000.00 50,000,000.00
Gree (Luoyang) Electric Appliances Co., Ltd. 50,000,000.00 50,000,000.00
Gree (Nanjing) Electric Appliances Co., Ltd. 300,000,000.00 204,000,000.00 504,000,000.00
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Increase/Decrease in the current period Balance of
Opening balance (book Closing balance (book provision for
Name of invested entities Appropriated
value) Additional Disinvest value) impairment at the
provision for Others
investment ment end of the period
impairment
Zhuhai Gree Material Supply Co., Ltd. 150,000,000.00 150,000,000.00
Gree (Chengdu) Electric Appliances Co., Ltd. 400,000,000.00 400,000,000.00
Hefei Kinghome Electrical Co., Ltd. 1,247,087,108.76 1,247,087,108.76
Zhuhai Zero Boundary Integrated Circuit Co.,
50,000,000.00 50,000,000.00
Ltd.
Zhuhai Lianyun Technology Co., Ltd. 40,000,000.00 40,000,000.00
Zhuhai Gree Electrical and Mechanical
149,092,300.30 149,092,300.30
Engineering Co., Ltd.
Zhuhai Gree Green Resources Recycling Co.,
50,000,000.00 50,000,000.00
Ltd
Zhuhai Gree Lvkong Technology Co., Ltd. 270,000,000.00 270,000,000.00
Gree (Luoyang) Washing Machine Co., Ltd. 50,000,000.00 50,000,000.00
Guochuang Energy Internet Innovation Center
22,500,000.00 22,500,000.00
(Guangdong) Co., Ltd.
Gree (Anji) Precision Mold Co., Ltd. 47,300,000.00 12,700,000.00 60,000,000.00
Songyuan Grain Group Co., Ltd. 230,223,945.05 230,223,945.05
Gree Electric (Zhuhai Gaolan Port) Co., Ltd. 1,000,000,000.00 1,000,000,000.00
Zhuhai Ge Health Medical Technology Co.,
20,000,000.00 20,000,000.00
Ltd.
Chengdu Gree Xinhui Medical Equipment Co.,
75,000,000.00 75,000,000.00
Ltd.
Gree (Ganzhou) Electric Appliances Co., Ltd. 80,000,000.00 80,000,000.00
Total 13,160,012,796.05 4,031,700,000.00 230,223,945.05 17,421,936,741.10
(2) Investment in associated and joint ventures
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Beginning Balance Increase/Decrease in the current period Balance at the end of the period
Name of invested Investment Adjustment of
entities Additional Cash dividends or
Provision for profits/losses other Changes in Provision for
Original value investment/withdr profits declared to Other decreases Original value
impairment recognized under comprehensive other equities impairment
ew investment distribute
the equity method income
1. Joint venture
Songyuan Grain
Group Co., Ltd. 74,672,147.86 150,000,000.00 6,164,997.18 2,319,173.43 2,932,373.42 230,223,945.05
[Note]
Subtotal 74,672,147.86 150,000,000.00 6,164,997.18 2,319,173.43 2,932,373.42 230,223,945.05
2. Associates
Gree (Vietnam)
Electric 1,940,009.35 1,940,009.35 1,940,009.35 1,940,009.35
Appliances, Inc.
Liaowang All
Media
31,511,790.36 1,574,756.85 2,966,412.88 36,052,960.09
Communication
Co., Ltd.
Beijing Gree
Technology Co., 2,701,833.71 -407,582.62 2,294,251.09
Ltd.
Chongqing Pargo
Mechanical
11,565,505.21 -316,275.18 11,249,230.03
Equipment Co.,
Ltd.
Gree Volinco
(Hong Kong) 924,327.19 -1,169,388.58 427,819.56 -182,758.17
Ltd.
Wuhan Digital
Design and
Manufacturing 14,574,841.85 154,246.07 14,729,087.92
Innovation
Center Co., Ltd.
Hunan Guoxin
Semiconductor
10,010,170.50 10,000,000.00 89,674.97 20,099,845.47
Technology Co.,
Ltd.
Zhuhai Ronglin 6,867,715,580.60 -21,142,722.89 215,136,201.85 7,061,709,059.56
Equity
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Beginning Balance Increase/Decrease in the current period Balance at the end of the period
Name of invested Investment Adjustment of
entities Additional Cash dividends or
Provision for profits/losses other Changes in Provision for
Original value investment/withdr profits declared to Other decreases Original value
impairment recognized under comprehensive other equities impairment
ew investment distribute
the equity method income
Investment
Partnership
(Limited
Partnership)
Henan Yuze
Finance Leasing 50,509,964.01 1,286,191.49 509,963.75 51,286,191.75
Co., Ltd.
Subtotal 6,991,454,022.78 1,940,009.35 8,830,611.42 -18,333,891.75 214,953,443.68 2,966,412.88 509,963.75 7,199,360,635.26 1,940,009.35
Total 7,066,126,170.64 1,940,009.35 158,830,611.42 -12,168,894.57 214,953,443.68 5,285,586.31 3,442,337.17 230,223,945.05 7,199,360,635.26 1,940,009.35
[Note] For the increase/decrease in the current period - other changes of Songyuan Grain Group Co., Ltd., see Note (V) 14 for details.
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
4. Operating revenues and operating costs
Amount for the current period Amount for the previous period
Item
Revenue Cost Revenue Cost
Main business 101,918,116,676.30 70,442,870,159.78 130,710,855,078.36 93,652,520,856.50
Other
5,923,673,498.19 5,565,482,185.50 5,508,511,105.25 5,056,537,993.65
businesses
Total 107,841,790,174.49 76,008,352,345.28 136,219,366,183.61 98,709,058,850.15
[Note] At the end of the reporting period, the amount of revenue corresponding to the performance obligations for
which the contracts have been signed but not yet performed or not yet completed was RMB 15,900,877,125.62.
5. Investment income
Amount for the previous
Item Amount for the current period
period
Long-term equity investment income measured by equity method -12,168,894.57 -20,983,248.83
Investment income recognized from trading financial assets 213,050,762.46 48,942,780.74
Dividend share confirmed for long-term equity investment income
12,177,372,543.12 4,658,202,677.12
measured by cost method
Others 24,372,625.28 -64,395,283.20
Total 12,402,627,036.29 4,621,766,925.83
XVI. Supplementary information
1. Schedule of non-recurring profit and loss
Item Amount Description
For details, see Note (V)
Profit and loss from disposal of non-current assets -4,974,224.62 57, Note (V) 58, and Note
(V) 59
Governmental subsidies recorded into the current gains and losses
(excluding the governmental subsidies closely relating to the For details, see Note (V) 52
1,346,168,393.38
business of the enterprise and enjoyed by a fixed quota or a fixed and Note (V) 58
amount in accordance with the state policies)
Capital occupation fee collected from the non-financial institution
883,505.62
and recorded into the current gains and losses
Gains and losses caused by fair value changes from the holding of
trading financial assets, derivative financial assets, trading
financial liabilities and derivative financial liabilities, and 877,450,950.74
investment income obtained from the disposal of trading financial
assets, derivative financial assets, trading financial liabilities,
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Item Amount Description
derivative financial liabilities and other debt investments, except
for the effective hedging business related to the Company's normal
business operations
Non-operating incomes and expenditures other than the above For details, see Note (V) 58
50,024,914.68
items and Note (V) 59
Other profit and loss items that conform to the definition of
17,915,425.64
non-recurring profit and loss
Subtotal 2,287,468,965.44
Less: Influence amount of income tax 386,974,457.37
Impact of minority shareholders' equity 11,202,406.75
Total 1,889,292,101.32
2. Rate of return on net assets and earnings per share
Earnings per share
Weighted average return
Profit during the report period Basic earnings per share Diluted earnings per
on net assets
(Yuan per Share) share (Yuan per Share)
Net profit attributable to shareholders of ordinary
18.88% 3.71 3.71
stocks of the Company
Net profit attributable to shareholders of ordinary
stocks of the Company after deduction of 17.27% 3.39 3.39
non-recurring profit and loss
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GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020
Section XIII 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 China Audit Union Power Certified Public Accountants Co., Ltd. and
signed and sealed by certified public accountants Han Zhenping and Geng Ting.
(III) Originals and original drafts of all the Company's documents and announcements published on the
newspapers designated by CSRC and on www.cninfo.com.cn within the Report Period.
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
29 April, 2021
274
