Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 August 2022 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 1 Important Notes, Contents and Interpretations The Board of Directors, the Board of Supervisors, as well as the directors, supervisors and senior management of Hangzhou Robam Appliances Co., Ltd. (the Company) hereby guarantee that there are no false representations, misleading statements, or material omissions in this Semi-Annual Report (“the Report”), and are severally and jointly liable for the authenticity, accuracy and completeness of the information contained herein. Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’s accounting, and Zhang Guofu, the head of the accounting department (the accountant in charge) hereby declare and warrant that the financial report contained in the Report is authentic, accurate, and complete. All the directors attended a board meeting, during which they reviewed the Report. The Company is exposed to risks such as fluctuations in the real estate market, price fluctuations of raw materials and intensified market competition, so investors shall pay attention to investment risks. The Company does not plan to distribute cash dividends or bonus shares, or convert capital reserve into capital stock. - 1 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Contents Chapter 1 Important Notes, Contents and Interpretations ................................................................................ 1 Chapter 2 Company Profile and Major Financial Indicators ........................................................................... 5 Chapter 3 Management Discussion and Analysis ................................................................................................. 8 Chapter 4 Corporate Governance............................................................................................................................. 17 Chapter 5 Environmental and Social Responsibilities ................................................................................. 20 Chapter 6 Significant Matters ........................................................................................................................ 21 Chapter 7 Changes in Shares and Shareholders ................................................................................................... 25 Chapter 8 Preferred Shares ........................................................................................................................................ 31 Chapter 9 Bonds ............................................................................................................................................................ 32 Chapter 10 Financial Report ...................................................................................................................................... 33 - 2 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Documents available for reference I. Financial statement signed by the legal representative, the person in charge of accounting and the head of the accounting department and affixed with seal. II. Original copies of documents and announcements of the Company published in the newspaper designated by China Securities Regulatory Commission during the Reporting Period. III. The Semi-Annual Report 2022 signed by the legal representative. IV. Other information. - 3 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Interpretations Item refer(s) to Contents The Company, Company, Robam refer to Hangzhou Robam Appliances Co., Ltd. Appliances MingQi refers to Hangzhou MingQi Electric Co., Ltd. Kinde Subsidiary refers to Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. Robam Group refers to Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company The reporting period refers to The first half of 2022 AVC refers to Beijing All View Cloud Data Technology Co., Ltd. - 4 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 2 Company Profile and Major Financial Indicators I. Company Profile Stock abbreviation Robam Stock code 002508 Stocks traded on Shenzhen Stock Exchange Chinese name of the Company Hangzhou Robam Appliances Co., Ltd. Short Chinese name of the Robam Company (if any) Legal representative of the Ren Jianhua Company II. Contact Person and Contact Information Secretary of the Board of Directors Representative of securities affairs Name Wang Gang Jiang Yu No. 592, Linping Avenue, Linping No. 592, Linping Avenue, Linping Contact address District, Hangzhou, Zhejiang Province District, Hangzhou, Zhejiang Province Telephone 0571--86187810 0571--86187810 Fax 0571--86187769 0571--86187769 E-mail wg@robam.com jy@robam.com III. Other Information 1. Contact information Whether the registered address, office address and zip code as well as the website and email address of the Company changed during the reporting period? □Applicable √ Not applicable There are no changes in the registered address, office address and zip code as well as the website and email address of the Company during the reporting period. For details, please refer to the Annual Report 2021. 2. Information disclosure and filing location Whether the information disclosure and filing locations changed during the reporting period? □Applicable √ Not applicable During the reporting period, there were no changes in the newspapers designated by the Company for information disclosure, the website designated by China Securities Regulatory Commission (CSRC) for publishing the semi-annual report, and the location for filing the semi-annual report of the Company. For details, please refer to the Annual Report 2021. IV. Other information Whether other relevant information changed during the reporting period? □Applicable √ Not applicable IV. Key Accounting Data and Financial Indicators Whether the Company needs to retroactively adjust or restate the accounting data of previous years? □ Yes √ No - 5 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The reporting period The same period last year YoY change Operating Income (RMB) 4,444,310,099.69 4,326,082,031.62 2.73% Net profit attributable to shareholders of the 723,549,381.25 790,388,759.79 -8.46% listed company (RMB) Net profit attributable to shareholders of the listed company after deducting non- 635,845,084.07 746,385,371.21 -14.81% recurring gains/losses (RMB) Net cash flow from operating activities 322,855,122.33 730,222,059.09 -55.79% (RMB) Basic earnings per share (EPS) (RMB/share) 0.76 0.83 -8.43% Diluted EPS (RMB/share) 0.76 0.83 -8.43% Weighted average return on net assets 8.05% 9.49% -1.44% End of the reporting End of last year Change period Total assets (RMB) 13,982,964,746.92 13,906,035,181.12 0.55% Net assets attributable to shareholders of the 8,882,527,028.79 8,627,026,739.27 2.96% listed company (RMB) V. Differences in Accounting Data under Domestic and Foreign Accounting Standards 1. Whether there are differences in the net profit and net asset disclosed in the Financial Report under International Accounting Standards (IAS) and China’s accounting standards? □Applicable √Not applicable There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standards during the reporting period. 2. Whether there are differences in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s accounting standards during? □Applicable √Not applicable There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s accounting standards during the reporting period. VI. Items and Amounts of Non-recurring Gains and Losses √Applicable □Not applicable In RMB Item Amount Description Gains and losses on disposal of non-current assets (including the part written- -34,179.72 off with provision for asset impairment accrued) Government subsidy included in current gains and losses (except the 70,291,099.51 government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) Reversal of provision for impairment of receivables separately tested for 35,248,286.47 impairment Other non-operating revenues and expenses except the above items 1,209,871.06 Less: Affected amount of income tax 16,069,241.63 Affected amount of minority shareholders’ equity (after tax) 2,941,538.51 Total 87,704,297.18 Other items of gains and losses meeting the definition of non-recurring gains and losses: □Applicable √ Not applicable The Company does not have other items of gains and losses meeting the definition of non-recurring gains and losses. - 6 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred to as “Announcement No.1”) are defined as recurring gains and losses □Applicable √ Not applicable There is no circumstance where the items of non-recurring gains and losses enumerated in accordance with the Announcement No.1 are defined as recurring gains and losses. - 7 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 3 Management Discussion and Analysis I. Main Businesses during the Reporting Period In the first half of 2022, the kitchen appliance industry as a whole was in sluggish growth in the face of major unfavorable factors such as the recurrence of the COVID-19 epidemic, the sharp downturn in the real estate industry and the rise in comprehensive costs of the Company, but the industry concentration continued to rise. In terms of the retail channel, as shown in AVC monthly data report based on offline retail monitoring (“AVC Offline Report”), the retail sales of the main categories of kitchen appliances, i.e., range hoods and gas stoves, fell by 23.5% and 18.5% respectively, compared to that of the last year. In terms of the e-commerce channel, as shown in AVC monthly data report based on online retail monitoring (“AVC Online Report”), the year-on-year (YoY) growth of the retail sales of the kitchen appliances package registered 1.1%. In terms of the engineering channel, as shown in the AVC Real Estate Big Data (“AVC Real Estate Report”), the rate of equipping standard range hoods and stoves remained more than 95%, the rate of equipping disinfection cabinets continued to decline as it lost part of the market as a result of the disinfection function of dishwashers, and the rate of equipping dishwashers and combi-steam ovens as new categories of kitchen appliances gradually increased; the rate of equipping dishwashers from January to May 2022 was 26.5%, a YoY growth of 9.6%, and that of combi-steam ovens was 2.8%, a YoY growth of 0.7%. As the epidemic has been basically under control since June and a series of national incentive policies have been released, coupled with kitchen appliances having the attribute of durable household appliances, the demand for kitchen appliances will remain despite of the epidemic disturbance, which is expected to be unleashed gradually in the second half of the year. As a leading company in the industry, the Company has tightly focused on the annual management concept of “Ride the momentum, build dreams, and lead the development of the industry”, and has taken innovation in the kitchen appliance category as the driving force, realizing a significant increase in market share in all categories. According to the AVC Offline Report, the retail sales and retail market share of the Robam range hoods were 31.7% and 25.6%, respectively, a YoY growth of 1.1% and 1.5%. According to the AVC Online Report, the retail sales and retail market share of the Robam kitchen appliances package were 31.7% and 25.1%, respectively, a YoY growth of 3.1% and 3.8%. The retail sales and retail market share of the built-in dishwashers increased significantly to 12.8% from 6.8% in the same period last year. In the face of many unfavorable factors in the first half of the year, the Company achieved operating income of RMB 4.444 billion, a YoY growth of 2.73%, which was significantly higher than the industry average level. As of June 30, 2022, according to AVC Offline Report, the market shares and market rankings of the Company’s main product categories in terms of offline retail sales are shown in the following: - 8 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Table: Range hoods Gas stove Disinfection Built-in Built-in Built-in Built-in cabinet combi- electric electric dishwasher steam oven steam oven oven 31.7% 30.1% 22.5% 35.7% 23.9% 36.6% 17.4% 1 1 2 1 2 2 2 As of June 30, 2022, according to AVC Online Report, the market shares and market rankings of the Company’s main product categories in terms of online retail sales are shown in the following: Table: Kitchen 2-piece package Range hoods Gas stove Built-in Built-in Built-in appliance of range hood combi- electric dishwasher package and stove steam oven steam oven 31.7% 33.9% 15.0% 8.8% 16.0% 27.3% 12.8% 1 1 1 5 3 1 2 As of June 30, 2022, according to AVC Real Estate Report, the market share of Robam range hoods in the fine decoration channel was 29.2%, ranking No.2 in the industry. In the first half of 2022, in terms of the technology, the Company insisted on the product innovation, combining science and technology with kitchen appliances and continuing to promote cooking reform from product hardware innovation to the construction of digital cooking ecosystem. In terms of the hardware, kitchen appliances technology was iteratively upgraded to lead the development of the industry in an all- round way. “Ultra-slim technology” opens up a new form in the field of range hood and achieves a technological breakthrough in ultra-slim air duct and super wind pressure; “hybrid technology” breaks the boundary of steaming and baking and realizes the combination of multi-stage cooking steps of steaming, baking and frying; “Guangyan technology” breaks down functional barriers and realizes the function integration in terms of “washing, disinfection, drying and storage” of dishwashers; “integrated technology” takes the integrated stove as the starting point and it marks the first step into the field of integrated kitchen; “cold cooking technology” launches cold cooking refrigerator and achieves the full layout of kitchen appliances. In terms of the software, Robam established the world’s largest research library of Chinese AI cooking curves to restore the taste of Chinese kitchens with technology and enhance the soft power of kitchen appliances. In the first half year of 2022, the Company applied for 754 patents, including 223 invention patents, and participated in the formulation of 12 standards, 5 of which were led by the Company. As of June 30, 2022, a total of 2,658 patents were granted, including 78 invention patents; the Company participated in the formulation of 108 international, national, industry and group standards, 28 of which were led by the Company. The technological innovation capability has been continuously recognized by the industry, and the project of “Research and Development and industrialization of the Technology Reducing the Noise of and Improving the Sound Quality of Range Hood” won the first prize of Science and Technology Progress Award of China National Light Industry Council in 2021. In the first half of 2022, in terms of the marketing, the Company continued to strengthen the high-end brand - 9 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 positioning, superimpose the advantages of new and old product categories of kitchen appliances and stimulate the vitality of multiple channels, so as to provide comprehensive and customer-centered solutions for kitchen appliances. For the retail channel, with high-end positioning as the advantage, products as the carrier and service as the guarantee, the Company promoted the marketing digitalization, accelerated the establishment of channels in lower-tier cities, and optimized channel efficiency. For the e-commerce channel, relying on the new and old media matrix and mutual empowerment between high- quality products and flow resources, the Company strengthened the brand position and improved channel efficiency. For the innovation, the Company accurately positioned and deeply sought the existing market resources, and cooperated with leading whole house customization companies and home decoration companies, to obtain the front-end flow and enrich the consumption scenarios. For the engineering channel, the Company improved the awareness of risk control, optimized the customer structure, and made use of the advantages of old product categories to drive the continuous improvement of the permeability of new product categories, so as to provide kitchen appliance product package solutions for fine decoration houses. For the overseas channel, the Company steadily promoted the global layout and brand internationalization. In the first half of 2022, in terms of the production, the Company focused on the theme of “strengthening organization, seeking development and promoting reform”, and comprehensively implemented the three core strategies of “precise delivery, high-quality manufacturing and data-driven approach”, to constantly develop into one of the most competitive benchmarking enterprises in China's manufacturing industry. Through the digital construction of the whole industrial chain, the Company achieved scientific and accurate product demand forecast, and successfully completed the reform of direct distribution and delivery in more than 10 regions across the country, with the order satisfaction of users continuously improved. Meanwhile, the Company constantly improved the supply chain management system, implemented meticulous production management, and applied innovative processes and technologies, so as to ensure the high-quality delivery of new and old product categories of kitchen appliances. As the first intelligent manufacturing base in China's kitchen appliance industry, the Robam digital intelligent manufacturing base takes the lead in the overall digitalization upgrading of the industry, which has been selected as one of the first batch of “future factories” in Zhejiang Province. In addition, the Maoshan Intelligent Manufacturing Park Project has been gradually put into use, and the upgrading of intelligent manufacturing will further improve production efficiency and lay a solid foundation for the long-term development of the Company. In the first half of 2022, in terms of the brand, the Company insisted on the brand marketing theme of “holding on to high-end brand, building consumer-based cooking brand equity, and competing for users' likes” to develop into the No. 1 brand in the market of Chinese high-end kitchen appliances. Themed by “Higher Starting Point of High-tech Kitchen”, the 2022 New Chinese Kitchen - New Product Launch Conference was held, formally releasing a number of new products such as Robam ultra-slim near-suction range hood Huancai series, large-capacity combi-steam oven, Guangyan dishwasher series, new generation of high-performance integrated stove, Creator series and refrigerator. These new products, covering all aspects of cooking, are designed to enhance the starting point of the high-tech kitchen. The Company hold a series of activities, such as the National Tide Family Banquet, the First China Cooking Competition, the Second China Dishwasher - 10 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Festival; meanwhile, the brand was exposed in the “Focus Report”, showed as the title sponsor of the show “It Sounds Incredible 2”, and carried out cross-border cooperation with the variety show "Treasured Voice 3", to actively broaden the target audience range and set up a new brand image. In addition, as an official exclusive supplier of household kitchen appliances for the 2022 Hangzhou Asian Games, the Company helped to spread Chinese culinary culture and contributed to the construction of the Asian Games city. In the first half of 2022, MingQi promoted the integration of multiple channels and transformed into a one-stop, complete kitchen appliance provider. Kinde launched the dual chamber integrated stove series and integrated sink series, which are professional products specially designed for customers. Besides, the industrialization project of the intelligent integrated kitchen ecology, upon completion, will further improve the R&D and production capabilities of integrated kitchen appliances. In the first half of 2022, the Company continued to be recognized by the capital market in terms of corporate governance, internal management, shareholder return, etc. The Company has become the Council Member of China Association for Public Companies. Besides, it was awarded class A (excellent) in the 2021 Information Disclosure Assessment on Companies Listed on the Shenzhen Stock Exchange, and has won this award for nine consecutive years. In the field of investor relations, at the event of the 13th Tianma Award for Investor Relations of Chinese Listed Companies sponsored by Securities Times, the Company won the “Best Investor Relations Award of Chinese Listed Companies” and the “Best Board of Directors Award for Investor Relations of Chinese Listed Companies”, and the Secretary of the Board of Directors of the Company was awarded the “Best Board Secretary for Investor Relations of Listed Companies on the Mainboard”. Besides, the Company also won the honor of “Top 100 Listed Companies on China's Mainboard” at the event of the 15th Value Appraisal of Chinese Listed Companies. In order to practice common prosperity and build a regular incentive mechanism, the Company launched the 2022 Stock Option Incentive Plan to provide stock option incentive for the Company's middle-level personnel in core business and technical experts, so as to consolidate the Company's long-term development foundation. The Company has been adhering to standard operation, and will continue to make efforts in the kitchen field and facilitate value investment to promote its high-quality development. II. Analysis of Core Competitiveness There is NO material change in the Company’s core competitiveness during the reporting period. The Company’s core competitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation, comprehensive and efficient operation capability, as shown in the Annual Report 2021. III. Analysis of Main Business Overview Please refer to the relevant content of “I. Main Businesses during the Reporting Period”. Year-on-year changes in key financial data - 11 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB The reporting period The same period last YOY change Reason for change year Operating income 4,444,310,099.69 4,326,082,031.62 2.73% Operating costs 2,240,019,882.53 1,993,891,622.30 12.34% Sale expenses 1,184,704,589.52 1,163,782,611.88 1.80% Administrative expenses 183,583,864.57 149,993,109.17 22.39% Financial expense -62,275,458.91 -47,926,579.43 29.94% Income tax expense 131,172,418.86 143,489,604.07 -8.58% R&D input 169,368,645.53 143,433,206.12 18.08% It is mainly due to the 322,855,122.33 730,222,059.09 -55.79% procurement of raw Net cash flow from materials and the operating activities increase in various expenses. -275,734,087.51 214,520,601.79 -228.54% It is mainly due to the decrease in the amount of maturing bank Net cash flow from financial products and investing activities the increase in the Company's infrastructure expenditure. It is mainly due to the -443,071,536.06 -689,078,739.78 -35.70% Net cash flow from share repurchase in financing activities the previous period. It is mainly due to the -392,838,975.59 255,399,364.87 -253.81% increase in the procurement of raw materials and various Net increase in cash expenses, as well as and cash equivalents the increase in the Company's infrastructure expenditure. No major changes on profit composition or profit resources occurred in reporting period Composition of operating income In RMB The reporting period The same period last year % of % of YOY change Amount operating Amount operating income income Total operating income 4,444,310,099.69 100% 4,326,082,031.62 100% 2.73% By industry Kitchen and bathroom 4,317,490,105.88 97.15% 4,225,828,188.22 97.68% 2.17% appliances income 126,819,993.81 2.85% 100,253,843.40 2.32% 26.50% By product category Category 1 Incl: Range hood 2,074,153,523.02 46.68% 2,091,007,767.04 48.35% -0.81% Gas stove 1,057,307,687.10 23.79% 1,045,144,595.58 24.16% 1.16% - 12 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Disinfection 197,092,502.71 4.43% 239,178,201.99 5.53% -17.60% Category 2 Incl: All-purpose 358,429,402.29 8.06% 262,228,450.48 6.06% 36.69% ovenSteam oven 47,657,561.06 1.07% 80,562,429.90 1.86% -40.84% Baking oven 39,476,578.27 0.89% 67,544,092.31 1.56% -41.55% Category 3 Incl: Dishwasher 246,993,832.57 5.56% 170,976,797.67 3.95% 44.46% Water purifier 27,217,675.16 0.61% 24,371,501.10 0.56% 11.68% Water heater 85,479,990.00 1.92% 48,894,607.25 1.13% 74.82% Integrated stove 145,144,422.16 3.27% 143,366,801.65 3.31% 1.24% Other small appliances 38,536,931.54 0.87% 52,552,943.25 1.21% -26.67% Other operating income 126,819,993.81 2.85% 100,253,843.40 2.32% 26.50% By region East China-Main 2,188,169,639.99 49.24% 2,054,958,956.16 47.50% 6.48% Products 126,819,993.81 2.85% 100,253,843.40 2.32% 26.50% South China 540,221,730.07 12.16% 533,053,014.50 12.32% 1.34% Central China 400,497,450.21 9.01% 390,795,590.34 9.03% 2.48% North China 454,151,283.49 10.22% 457,558,221.06 10.58% -0.74% Northeast China 195,279,872.46 4.39% 229,898,842.06 5.31% -15.06% Northwest China 221,418,193.90 4.98% 218,086,613.97 5.04% 1.53% Southwest China 290,681,625.76 6.54% 317,765,047.05 7.35% -8.52% Overseas 27,070,310.00 0.61% 23,711,903.08 0.55% 14.16% Industries, products and regions accounting for more than 10% of the Company’s operating income or profit √Applicable □Not applicable In RMB YoY change in Gross YoY change in YoY change in the Operating income Operating costs operating margin operating costs gross margin income By industry Kitchen and 4,317,490,105.88 2,205,131,842.03 48.93% 2.17% 18.47% -7.03% bathroom appliances category Range hoods 2,074,153,523.02 1,024,406,260.72 50.61% -0.81% 17.20% -7.59% Gas stove 1,057,307,687.10 482,143,255.55 54.40% 1.16% 17.22% -6.24% By region East China 2,188,169,639.99 1,080,516,672.65 50.62% 6.48% 25.40% -7.45% South China 540,221,730.07 293,169,584.70 45.73% 1.34% 16.80% -7.18% North China 454,151,283.49 218,350,221.53 51.92% -0.74% 14.77% -6.50% Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of the reporting period is applied in case that the statistical caliber of such data is adjusted during the reporting period □Applicable √ Not applicable Description of reasons for relevant data increasing/decreasing by more than 30% year-on-year □Applicable √ Not applicable IV. Analysis of Non-core Business □Applicable √ Not applicable V. Analysis of Assets and Liabilities 1. Significant changes in assets composition - 13 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB End of the reporting period End of last year Note on % of total % of total Change in Amount Amount significan assets assets percentage t changes Cash and cash 3,400,788,038.91 24.32% 3,802,201,346.55 27.34% -3.02% equivalents Accounts 1,640,360,454.56 11.73% 1,597,692,860.90 11.49% 0.24% receivable Inventory 1,825,088,381.03 13.05% 1,772,231,632.25 12.74% 0.31% Investment real 4,286,705.36 0.03% 11,085,896.07 0.08% -0.05% estate Long-term equity 6,597,242.59 0.05% 5,405,129.91 0.04% 0.01% investment Fixed assets 1,168,388,890.69 8.36% 1,179,306,020.01 8.48% -0.12% Construction in 699,981,173.60 5.01% 454,643,364.82 3.27% 1.74% process Right-of-use 22,021,250.61 0.16% 29,902,954.22 0.22% -0.06% assets Short-term 39,657,061.74 0.28% 29,616,655.41 0.21% 0.07% borrowings Contract 979,436,556.29 7.00% 1,026,782,402.35 7.38% -0.38% liabilities Lease liabilities 18,575,629.84 0.13% 26,177,034.29 0.19% -0.06% 2. Major overseas assets □Applicable √ Not applicable 3. Assets and liabilities measured at fair value □Applicable √ Not applicable 4. Restricted asset rights by the end of the reporting period Restricted cash and cash equivalents In RMB Item Ending balance Beginning balance Letter of guarantee and margin for 73,638,194.15 82,212,526.20 acceptance of bill Total 73,638,194.15 82,212,526.20 VI. Analysis of Investment 1. Overview √ Applicable Not applicable Hangzhou Jinhe Electric Appliances Co., Ltd., a newly established wholly-owned subsidiary, with a registered capital of RMB 10 million, will complete the industrial and commercial registration procedures on June 22, 2022. 2. Major equity investments obtained during the reporting period □Applicable √ Not applicable 3. Major ongoing non-equity investments during the reporting period □Applicable √ Not applicable - 14 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 4. Financial asset investment (1) Securities investment □Applicable √ Not applicable The Company had no securities investment during the reporting period. (2) Derivative investment □Applicable √ Not applicable The Company had no derivatives investment during the reporting period. 5. Use of the raised funds □Applicable √ Not applicable The Company did not use the raised funds during the reporting period. VII. Sale of Major Assets and Equities 1. Sale of major assets □Applicable √ Not applicable The Company did not sell major assets during the reporting period. 2. Sale of major equities □Applicable √ Not applicable VIII. Analysis of Main Holding and Joint-stock Companies √ Applicable Not applicable In RMB Com Company Registered Total assets Net assets Operating income Operating profit Net profit name pany Main business capital type Shanghai Subs Sales of Robam 5000000 103,023,097.72 22,524,912.62 141,581,849.64 7,070,742.40 5,548,189.87 idiar kitchen Appliances y appliance Sales Co., s Ltd. Beijing Subs Sales of Robam 5000000 83,825,514.16 48,634,155.24 300,321,514.13 -1,449,802.68 -2,119,608.45 idiar kitchen Appliances y appliance Sales Co., s Ltd. Hangzhou Subs Sales of 50000000 191,246,312.60 70,678,739.83 151,908,412.43 -72,923.94 235,001.79 MingQi idiar kitchen Electric Co., y appliance Ltd. s Shengzhou Subs Production Kinde 32653061 502,228,995.00 283,501,335.13 77,502,270.79 -466,108.04 -2,848,019.82 idiar and sales of Intelligent y kitchen Kitchen appliances Appliances Co., Ltd. IX. Structured Entities Controlled by the Company □Applicable √ Not applicable X. Risks faced and countermeasures taken by the Company (1) Risk of fluctuations in the real estate market - 15 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The Company has been long engaged in the kitchen business, offering kitchen appliances such as range hoods, gas stoves, combi- steam ovens, dishwashers and integrated stoves. Its demand is closely related to the kitchen decoration, with certain "decoration" and "furniture" attributes. At present, the main market demand for kitchen appliances is mainly from the new house buyers, the proportion of renewal demand is gradually increasing, and the demand for products is greatly affected by the fluctuation of the real estate market. The Company has certain anti-fluctuation ability by virtue of its market leadership, although fluctuations in the real estate market will still have an impact on the Company’s operating results. In addition, some private real estate enterprises defaulted on commercial paper debt due to liquidity problems, which may lead to the failure to recover the Company's engineering business receivables. (2) Risk of price fluctuations of raw materials The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet, copper and glass, etc., whose price fluctuations will directly affect the cost of the Company’s products and in turn have an impact on its profitability. (3) Risk of intensified market competition In recent years, due to the tightening of the overall macro environment of the kitchen appliance industry, the continuous improvement of industry concentration and the entry of and increased investment of comprehensive brands and Internet brands in the kitchen appliance market, the market competition in the kitchen appliances industry has become increasingly fierce, and the intensification of market competition will have a certain impact on the Company’s operating results. - 16 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 4 Corporate Governance I. Annual General Meeting of Shareholders and Extraordinary General Meeting of Shareholders during the Reporting Period 1. Shareholders’ meeting during the reporting period Propo rtion of Type of atten Date of Session of meeting Date of meeting Resolutions meeting ding disclosure invest ors Announcement of Resolutions of the The first extraordinary general Extraord April 21, 2022 April 22, 2022 62.89 First Extraordinary meeting of shareholders in 2022 inary % general General Meeting of meeting Shareholders of Robam of Appliances in 2022 sharehol (Announcement No. 2022-027) ders Annual June 6, 2022 June 7, 2022 Announcement of Resolutions of 2021 Annual General Meeting 63.52 of Shareholders General the 2021 Annual General % Meeting of Shareholders of Meeting of Robam Appliances Sharehol (Announcement No. 2022-038) ders 2. Preferred shareholders with voting rights recovered requested to convene an extraordinary general meeting of shareholders □Applicable √ Not applicable II. Changes in Directors, Supervisors and Senior Management √Applicable □Not applicable Name Position held Type Date Reasons Zhou Haixin Deputy General Manager Appointment May 11, 2022 Company appointment III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during the Reporting Period □Applicable √ Not applicable The Company has no plans of distributing cash dividends or bonus shares, or converting capital reserve into capital stock for the first half of 2022. IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or other Employee Incentives √Applicable □Not applicable 1. Equity incentive - 17 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 2021 Stock Option Incentive Plan: 1. On April 19, 2022, the Tenth Meeting of the Fifth Session of the Board of Directors and the Tenth Meeting of the Fifth Session of the Board of Supervisors were held, deliberating and adopting the Proposal on Cancellation of Partial Stock Options in the 2021 Stock Option Incentive Plan and the Proposal on Cancellation of Stock Options of the 2021 Stock Option Incentive Plan in the Case Where the Vesting Conditions Are Not Met in the First Exercise Period. According to the relevant laws and regulations and the provisions of the Company's 2021 Stock Option Incentive Plan (Draft), the Company would cancel a total of 80,000 stock options that have been granted but not yet exercised by the four incentive targets who have left their jobs and thus no longer meet the incentive conditions; the Company would cancel the 1.184 million stock options held by the incentive targets that have been granted but not qualified for exercise in the first exercise period of 2021 Stock Option Incentive Plan because the vesting conditions are not met. 2. On April 26, 2022, it was examined and confirmed by Shenzhen Branch of China Securities Depository and Clearing Co., Ltd., that the cancellation of the above 1.264 million stock options had been completed. The Company cancelled a total of 1.264 million stock options mentioned above, accounting for 0.13% of the Company's current total capital stock. The cancellation of stock options conforms to the relevant laws and regulations, the Articles of Association and the 2021 Stock Option Incentive Plan (Draft) and other relevant provisions. The cancelled stock options have not been exercised yet, and it will not affect the Company's capital stock after cancellation, with the stock structure unchanged. 2022 Stock Option Incentive Plan: 1. On March 31, 2022, the Company held the Ninth Meeting of the Fifth Session of the Board of Directors, during which the Proposal on 2022 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals were deliberated and approved, and the independent directors expressed their independent opinions on and approved the matters related to the Company’s stock option incentive plan. The Ninth Meeting of the Fifth Session of the Board of Supervisors of the Company deliberated and approved the above-mentioned proposal and expressed its concurring opinion. The Company disclosed the above matters on April 1, 2022. 2. From April 1 to April 10, 2022, the Company internally disclosed the names and titles of the incentive targets of the stock option incentive plan. On April 13, 2022, the Company’s Board of Supervisors published the Review Opinions of the Board of Supervisors on the List of Incentive Targets of the 2022 Stock Option Incentive Plan and Explanation on the Publicity. On the same day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders and Incentive Targets of the 2022 Stock Option Incentive Plan. 3. On April 21, 2022, the Company held the first extraordinary general meeting of shareholders in 2022, and deliberated and adopted the Proposal on 2022 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals. The plan was approved by the first extraordinary general meeting of shareholders in 2022, and the Board of Directors was authorized to determine the stock option grant date; the stock option will be granted to the incentive targets and all matters relevant to the grant of stock option shall be handled when they are eligible. 4. On May 10, 2022, the 11th Meeting of the Fifth Session of the Board of Directors and the 11th Meeting of the Fifth Session of the Board of Supervisors of the Company deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of Supervisors verified the list of incentive targets again and expressed its agreement, and the independent directors of the Company expressed their independent agreement on it. 5. On May 26, 2022, the Company completed the registration of the grant of the options. As the departed employees did not have the qualification of incentive targets, the number of incentive targets actually granted under this Stock Option Incentive Plan was adjusted from 285 to 282, and the total number of stock options actually granted was adjusted from 4.81 million to 4.78 million, accounting for 0.50% of the current total capital stock of the Company. - 18 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 2. Implementation of Employee Stock Ownership Plan □Applicable √ Not applicable 3. Other employee incentive measures □Applicable √ Not applicable - 19 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 5 Environmental and Social Responsibilities I. Major Environmental Issues Whether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental protection authorities. □Yes √ No Administrative penalties imposed on the Company for environmental issues during the reporting period Impact on the Name of the The Company's production and Company or its Reasons for penalties Violations Penalties rectification operation of the subsidiary measures listed company None None None None None None Other environmental information disclosed with reference to key emission units: None Measures taken to reduce the Company's carbon emissions during the reporting period and their effects □Applicable √ Not applicable Reasons for not disclosing other environmental information: None. II. Social Responsibility The Company regularly publishes the CSR Report or the ESG Report every year. For details, please refer to the Robam Appliances 2021 ESG Report disclosed on www.cninfo.com.cn. - 20 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 6 Significant Matters I. Commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting period □Applicable √ Not applicable There were no commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and other relevant parties that was already fulfilled during the reporting period and was not yet fulfilled at the end of the reporting period II. Non-operating Occupation of Funds of the Listed Company by the Controlling Shareholder and Other Affiliated Parties □Applicable √Not applicable There was no non-operating occupation of funds of the listed company by the controlling shareholder and other affiliates during the reporting period. III. Illegal External Guarantee □Applicable √Not applicable There was no illegal external guarantee during the reporting period. IV. Appointment and Dismissal of Accounting Firm Whether the semi-annual financial report has been audited □Yes √No The semi-annual financial report of the Company was not audited. V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standard Audit Report” Issued by the Accounting Firm for the Reporting Period □Applicable √Not applicable VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the Last Year □Applicable √Not applicable VII. Matters Related to Bankruptcy Reorganization □Applicable √Not applicable The Company did not have any matters related to bankruptcy reorganization during the reporting period. VIII. Litigation Matters Material litigation and arbitration □Applicable √Not applicable The Company had no major litigation and arbitration during the reporting period. Other litigation matters □Applicable √Not applicable IX. Punishment and Rectification - 21 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 □Applicable √Not applicable X. Integrity Conditions of the Company and its Controlling Shareholders □Applicable √Not applicable XI. Major Connected Transactions 1. Connected transactions concerning daily operations □Applicable √Not applicable The Company had no connected transactions concerning daily operations during the reporting period. 2. Connected transactions related to the acquisition or sales of assets or equity □Applicable √Not applicable The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period. 3. Connected transactions related to joint outward investment □Applicable √Not applicable The Company had no connected transactions related to joint outward investment during the reporting period. 4. Connected transactions on credit and debt □Applicable √Not applicable The Company had no connected transactions on credit and debt during the reporting period. 5. Transactions with connected finance companies □Applicable √Not applicable There were no deposits, loans, credits or other financial operations between the Company and connected finance companies and affiliates. 6. Transactions between the finance companies controlled by the Company and the affiliates □Applicable √Not applicable There were no deposits, loans, credits or other financial operations between the finance companies controlled by the Company and the affiliates. 7. Other major connected transactions □Applicable √Not applicable There were no other major connected transactions during the reporting period. - 22 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 XII. Major Contracts and Their Performance 1. Entrustment, contracting and leasing (1) Entrustment □Applicable √Not applicable The Company had no entrustment during the reporting period. (2) Contracting □Applicable √Not applicable The Company had no contracting during the reporting period. (3) Leasing □Applicable √Not applicable The Company had no leasing during the reporting period. 2. Material guarantee □Applicable √Not applicable The Company had no material guarantee during the reporting period. 3. Financial management entrusting √Applicable □Not applicable Unit: RMB 10,000 Impairment amount Sources of Incurred amount of accrued of overdue financial Amount overdue Specific type financial management Unexpired balance but not recovered management but not recovered entrusting financial entrusting management Bank financial Own funds 92,350 288,476 0 0 products Total 92,350 288,476 0 0 The specific situation of high-risk entrusted financial management with large single-item amount or low safety, poor liquidity and no break-even □Applicable √Not applicable Entrusted financial management is expected to be unable to recover the principal or where there are other circumstances that may result in impairment □Applicable √Not applicable 4. Other material contracts □Applicable √Not applicable The Company had no other material contracts during the reporting period. XIII. Explanation of Other Significant Matters □Applicable √Not applicable The Company had no other significant matters that need to be explained during the reporting period. - 23 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 XIV. Significant Matters of Subsidiaries of the Company □Applicable √Not applicable - 24 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 7 Changes in Shares and Shareholders I. Changes in Shares 1. Changes in shares Unit: share Before change Change (+. -) After change Shares Bon conver Percentage Issue us ted Percentag Quantity of new Others Subtotal Quantity (%) shar from e (%) shares capital es reserve I. Shares subject to 14,123,269 1.49% -2,070,000 -2,070,000 12,053,269 1.27% sales restrictions 1. Shares held by the state 2. Shares held by the state-owned legal persons 3. Shares held by 14,123,269 1.49% -2,070,000 -2,070,000 12,053,269 1.27% other domestic investors Including: shares held by domestic legal persons Including: shares 14,123,269 1.49% -2,070,000 -2,070,000 12,053,269 1.27% held by domestic natural persons 4. Shares held by overseas investors Including: shares held by overseas legal persons Shares held by overseas natural persons II. Shares without sales 934,900,781 98.51% 2,070,000 2,070,000 936,970,781 98.73% restrictions 1. RMB ordinary 934,900,781 98.51% 2,070,000 2,070,000 936,970,781 98.73% shares 2. Foreign shares listed in China 3. Foreign shares listed abroad 4. Others 100.00 III. Total shares 949,024,050 100.00% 0 0 949,024,050 % Reason for share changes √ Applicable Not applicable The directors, supervisors and senior management of the Company shall unlock 25% of the Company's shares registered in their names on the last trading day of the previous year. 2. Changes in restricted shares - 25 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 √Applicable □Not applicable Number of Number of Number of shares whose Number of restricted restricted sales restricted Shareholder shares The reasons for shares at the restrictions shares at the Date of lifting sales restrictions name increased in sales restrictions beginning of have been lifted end of the the current the period in the current period period period Zhao Jihong 1,267,549 316,875 950,674 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Zhang 834,234 208,500 625,734 Locked shares Unlock 25% of the Company's Songnian of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Zhang 834,236 208,500 625,736 Locked shares Unlock 25% of the Company's Linyong of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Zhang Guofu 308,962 0 308,962 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Xia Zhiming 308,962 0 308,962 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Wang Gang 432,562 0 432,562 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Tang 834,234 208,500 625,734 Locked shares Unlock 25% of the Company's Genquan of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Shen 1,143,198 285,750 857,448 Locked shares Unlock 25% of the Company's Guoliang of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Ren 1,267,546 316,875 950,671 Locked shares Unlock 25% of the Company's Luozhong of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management - 26 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Ren Jianhua 4,442,362 0 4,442,362 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Ren Fujia 2,100,056 525,000 1,575,056 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management He Yadong 308,962 0 308,962 Locked shares Unlock 25% of the Company's of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Shen 40,406 0 40,406 Locked shares Unlock 25% of the Company's Yueming of directors, shares registered in their names on supervisors the last trading day of the previous and senior year management Total 14,123,269 2,070,000 0 12,053,269 -- -- II. Securities Issuance and Listing □Applicable √Not applicable III. Number of Shareholders of the Company and Their Shareholdings Unit: share Total number of preferred shareholders Total number of common shareholders 52,457 0 with the voting rights recovered at the at the end of the reporting period end of reporting period Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders Pledged, marked or frozen Number of Number shares common of Number of shares held Change during shares shares without Name of shareholder Nature of Sharehold at the end subject the reporting sales Status of shareholder ing ratio of the to sales Quantity period restrictions shares reporting restricti period ons Domestic Hangzhou Robam non-state- 471,510,00 Industrial Group Co., 49.68% 0 471,510,000 owned legal 0 Ltd. person Hong Kong Securities Overseas Clearing Company 8.90% 84,446,021 -10,883,905 84,446,021 corporation Limited TEMASEK Overseas FULLERTON 1.65% 15,690,099 10,345,244 15,690,099 corporation ALPHA PTE LTD - 27 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Domestic Shen Guoying natural 1.29% 12,240,000 0 12,240,000 Norges Bank- equity person Overseas 0.81% 7,680,141 1,969,886 7,680,141 fund corporation Domestic Hangzhou Jinchuang non-state- Investment Co., Ltd. owned legal 0.70% 6,640,085 0 6,640,085 person Industrial Bank Co., Ltd. ICBC Credit Suisse Culture & Others Sports Industry Stock 0.68% 6,436,819 -911,700 6,436,819 Securities Investment Fund Hangzhou Yinchuang Domestic non- state-owned Investment Co., Ltd. legal person 0.67% 6,318,000 0 6,318,000 Qian Hai Life Insurance Co., Ltd. Others -participating 0.65% 6,199,919 6,199,919 6,199,919 insurance products PICC Life Insurance Company Limited- Others dividends-individual 0.64% 6,037,014 2,327,714 6,037,014 insurance dividends Strategic investor or general legal None person who becomes one of the top 10 common shareholders due to rights issue Description of the associated Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- relationship or consistent actions of Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou the above shareholders Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. Statements of the above shareholders on proxy/trustee voting None rights and abstention from voting rights Special note on the existence of None special repurchase accounts among the top 10 shareholders Shareholdings of the top 10 common shareholders not subject to sales restrictions Type of shares Number of shares without sales restrictions held at the end of the Name of shareholder Type of reporting period Quantity shares RMB Hangzhou Robam Industrial Group ordinar 471,510,000 471,510,000 Co., Ltd. y shares Hong Kong Securities Clearing ordinar 84,446,021 84,446,021 Company Limited y shares RMB TEMASEK FULLERTON ALPHA ordinar 15,690,099 15,690,099 PTE LTD y shares - 28 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 RMB Shen Guoying 12,240,000 ordinar 12,240,000 y shares RMB Norges Bank-equity fund 7,680,141 ordinar 7,680,141 y shares RMB Hangzhou Jinchuang Investment Co., ordinar 6,640,085 6,640,085 Ltd. y shares RMB Industrial Bank Co., Ltd. ICBC Credit Suisse Culture & Sports ordinar Industry Stock Securities Investment 6,436,819 y 6,436,819 Fund shares Hangzhou Yinchuang Investment RMB 6,318,000 ordinar 6,318,000 Co., Ltd. y shares RMB Qian Hai Life Insurance Co., Ltd. 6,199,919 ordinar 6,199,919 -participating policy products y shares RMB PICC Life Insurance Company Limited ordinar -dividends-individual insurance 6,037,014 y 6,037,014 dividends shares Description on associated relationship or concerted actions Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- among the top 10 common Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - shareholders not subject to sales Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, restrictions and between the top 10 is his wife. Therefore, there is a possibility that these shareholders will act in concert. common shareholders not subject to sales restrictions and the top 10 common shareholders Description of the top 10 common None shareholders engaging in securities margin trading Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company have any agreed repurchase trading during the reporting period? □Yes √No There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company during the reporting period. IV. Changes in Shares Held by Directors, Supervisors, and Senior Management □Applicable √Not applicable There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reporting period. For details, please refer to the Annual Report 2021. V. Changes in the Controlling Shareholder and the Actual Controller Changes in the controlling shareholder during the reporting period □Applicable √Not applicable There was no change in the controlling shareholder of the Company during the reporting period. Changes in the actual controller during the reporting period □Applicable √Not applicable There was no change in the actual controller of the Company during the reporting period. - 29 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 8 Preferred Shares □Applicable √Not applicable The Company had no preferred shares during the reporting period. - 30 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 9 Bonds □Applicable √Not applicable - 31 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Chapter 10 Financial Report I. Audit Report Whether the semi-annual report has been audited □Yes √No The semi-annual financial report of the Company was not audited. II. Financial Statements The financial statement notes are represented in RMB. 1. Consolidated Balance Sheet Prepared by: Hangzhou Robam Appliances Co., Ltd. June 30, 2022 In RMB Item June 30, 2022 January 1, 2022 Current assets: Cash and cash equivalents 3,400,788,038.91 3,802,201,346.55 Deposit reservation for balance Lendings to banks and other financial institutions Financial assets held for trading 2,884,760,000.00 2,872,312,500.00 Derivative financial assets Notes receivable 1,308,046,816.29 1,330,193,894.82 Accounts receivable 1,640,360,454.56 1,597,692,860.90 Accounts receivable financing Prepayments 186,696,023.47 131,162,030.95 Receivable premium Reinsurance accounts receivable Provision of cession receivable Other receivables 105,383,151.12 73,487,381.46 Inc: Interests receivable Dividends receivable Redemptory monetary capital for sale Inventory 1,825,088,381.03 1,772,231,632.25 Contract assets Assets held for sale Non-current assets due within one year Other current assets 105,891.12 4,110,429.16 Total current assets 11,351,228,756.50 11,583,392,076.09 Non-current assets: - 32 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Loans and advances Debt investment Other debt investment Long-term receivables Long-term equity investment 6,597,242.59 5,405,129.91 Investment in other equity instruments 2,116,023.22 2,116,023.22 Other non-current financial assets Investment real estate 4,286,705.36 11,085,896.07 Fixed assets 1,168,388,890.69 1,179,306,020.01 Construction in process 699,981,173.60 454,643,364.82 Biological assets for production Oil & gas assets Right-of-use assets 22,021,250.61 29,902,954.22 Intangible assets 225,772,221.34 229,391,803.26 Development expenditure Goodwill 80,589,565.84 80,589,565.84 Long-term prepaid expenses 3,589,385.75 5,385,436.20 Deferred income tax assets 340,774,443.43 286,348,037.04 Other non-current assets 77,619,087.99 38,468,874.44 Total non-current assets 2,631,735,990.42 2,322,643,105.03 Total assets 13,982,964,746.92 13,906,035,181.12 Current liabilities: Short-term borrowings 39,657,061.74 29,616,655.41 Borrowings from the central bank Borrowings from banks and other financial institutions Financial liabilities held for trading Derivative financial liabilities Notes payables 809,469,587.67 962,665,463.99 Accounts payable 2,303,202,819.34 2,181,900,261.00 Advance receipts Contract liabilities 979,436,556.29 1,026,782,402.35 Financial assets sold for repurchase Deposits from customers and interbank Receivings from vicariously traded securities Receivings from vicariously sold securities Payroll payable 53,282,842.44 165,177,425.08 Taxes payable 230,030,822.59 212,202,393.54 Other payables 269,409,072.30 267,781,215.06 Inc: Interests payable Dividends payable Fees and commissions payable Dividends payable for reinsurance - 33 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Liabilities held for sale Non-current liabilities due within one 5,414,420.90 5,387,591.43 year Other current liabilities 115,300,198.58 124,284,081.56 Total current liabilities 4,805,203,381.85 4,975,797,489.42 Non-current liabilities: Reserves for insurance contracts Long-term loans Bonds payable Inc: Preferred shares Perpetual bonds Lease liabilities 18,575,629.84 26,177,034.29 Long-term accounts payable Long-term payroll payable Estimated liabilities Deferred income 124,643,232.96 131,747,378.42 Deferred income tax liabilities 8,061,237.74 6,254,762.76 Other non-current liabilities Total non-current liabilities 151,280,100.54 164,179,175.47 Total liabilities 4,956,483,482.39 5,139,976,664.89 Owner’s equity: Capital stock 949,024,050.00 949,024,050.00 Other equity instruments Inc: Preferred shares Perpetual bonds Capital reserve 408,916,464.42 404,918,098.15 Less: Treasury share 199,995,742.59 199,995,742.59 Other comprehensive income -100,157,634.16 -100,157,634.16 Special reserves Surplus reserves 474,516,412.50 474,516,412.50 General risk reserves Undistributed profits 7,350,223,478.62 7,098,721,555.37 Total owners’ equity attributable to the 8,882,527,028.79 8,627,026,739.27 parent company Minority interests 143,954,235.74 139,031,776.96 Total owner’s equity 9,026,481,264.53 8,766,058,516.23 Total liabilities and owner’s equity 13,982,964,746.92 13,906,035,181.12 Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu 2. Balance Sheet of the Parent Company In RMB Item June 30, 2022 January 1, 2022 Current assets: Cash and cash equivalents 3,213,633,336.04 3,554,239,202.02 Financial assets held for trading 2,850,000,000.00 2,800,000,000.00 Derivative financial assets Notes receivable 1,308,046,816.29 1,327,893,894.82 - 34 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Accounts receivable 1,567,703,600.71 1,496,691,827.59 Accounts receivable financing Prepayments 162,530,740.38 108,926,615.26 Other receivables 92,064,235.68 66,149,239.78 Inc: Interests receivable Dividends receivable Inventory 1,705,978,027.59 1,674,764,364.28 Contract assets Assets held for sale Non-current assets due within one year Other current assets Total current assets 10,899,956,756.69 11,028,665,143.75 Non-current assets: Debt investment Other debt investment Long-term receivables Long-term equity investment 239,273,010.65 242,037,500.08 Investment in other equity instruments 2,116,023.22 2,116,023.22 Other non-current financial assets Investment real estate 4,549,733.16 11,361,192.77 Fixed assets 1,104,047,903.97 1,114,958,987.32 Construction in process 490,566,391.05 280,105,490.57 Biological assets for production Oil & gas assets Right-of-use assets Intangible assets 151,047,407.97 152,123,403.04 Development expenditure Goodwill Long-term prepaid expenses 1,533,100.35 1,653,433.47 Deferred income tax assets 339,011,895.46 285,017,337.53 Other non-current assets 76,677,276.82 36,602,077.16 Total non-current assets 2,408,822,742.65 2,125,975,445.16 Total assets 13,308,779,499.34 13,154,640,588.91 Current liabilities: Short-term borrowings 26,157,061.74 29,616,655.41 Financial liabilities held for trading Derivative financial liabilities Notes payables 734,514,108.17 869,702,988.97 Accounts payable 2,188,681,498.77 2,051,194,342.69 Advance receipts Contract liabilities 896,481,698.25 923,802,307.69 Payroll payable 42,165,488.89 129,893,906.19 - 35 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Taxes payable 221,371,522.40 196,058,797.24 Other payables 247,212,708.19 240,983,242.45 Inc: Interests payable Dividends payable Liabilities held for sale Non-current liabilities due within one year Other current liabilities 104,516,067.03 110,927,917.94 Total current liabilities 4,461,100,153.44 4,552,180,158.58 Non-current liabilities: Long-term loans Bonds payable Inc: Preferred shares Perpetual bonds Lease liabilities Long-term accounts payable Long-term payroll payable Estimated liabilities Deferred income 95,786,247.96 102,890,393.42 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 95,786,247.96 102,890,393.42 Total liabilities 4,556,886,401.40 4,655,070,552.00 Owner’s equity: Capital stock 949,024,050.00 949,024,050.00 Other equity instruments Inc: Preferred shares Perpetual bonds Capital reserve 408,871,481.41 404,873,115.14 Less: Treasury share 199,995,742.59 199,995,742.59 Other comprehensive income -100,157,634.16 -100,157,634.16 Special reserves Surplus reserves 474,516,412.50 474,516,412.50 Undistributed profits 7,219,634,530.78 6,971,309,836.02 Total owner’s equity 8,751,893,097.94 8,499,570,036.91 Total liabilities and owner’s equity 13,308,779,499.34 13,154,640,588.91 3. Consolidated Income Statement In RMB Item The first half of 2022 The first half of 2021 I. Total operating income 4,444,310,099.69 4,326,082,031.62 Inc: Operating income 4,444,310,099.69 4,326,082,031.62 Interest income Earned premium Fee and commission income - 36 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 II. Total operating costs 3,739,161,547.48 3,435,552,198.16 Inc: Operating costs 2,240,019,882.53 1,993,891,622.30 Interest expenses Fee and commission expenses Surrender value Net payments for insurance claims Net allotment of reserves for insurance liabilities Policy dividend expenditures Reinsurance expenses Taxes and surcharges 23,760,024.24 32,378,228.12 Sale expenses 1,184,704,589.52 1,163,782,611.88 Administrative expenses 183,583,864.57 149,993,109.17 R&D expenses 169,368,645.53 143,433,206.12 Financial expenses -62,275,458.91 -47,926,579.43 Inc: Interest expenses 1,018,439.59 1,228,635.41 Interest income 60,042,815.83 50,677,538.57 Add: other income 94,070,746.70 55,086,765.01 Investment income (“-” for losses) 19,168,941.11 31,429,517.67 Inc: Income from investment in joint ventures and associated companies -2,947,887.32 -1,440,070.07 Gains on derecognition of financial assets measured at amortized cost Exchange gains (“-” for losses) Net exposure hedging gains (“-” for losses) Gains from changes in fair value (“-” for losses) Losses from credit impairment (“-” for 9,024,313.93 -31,492,439.21 losses) Losses from asset impairment (“-” for 24,056,013.60 losses) Gains on disposal of assets (“-” for losses) 37,838.75 -2,035,843.51 III. Operating profits (“-” for losses) 851,506,406.30 943,517,833.42 Add: non-operating income 2,696,007.72 1,195,370.24 Less: non-operating expenditure 1,558,155.13 1,577,924.28 IV. Total profits (“-” for total losses) 852,644,258.89 943,135,279.38 Less: income tax expenses 131,172,418.86 143,489,604.07 V. Net profits (“-” for losses) 721,471,840.03 799,645,675.31 (I) By operational sustainability 1. Net profits from continuing operations 721,471,840.03 799,645,675.31 (“-” for net losses) 2. Net profits from discontinued operations (“-” for net losses) (II) By ownership 1. Net profits attributable to owners of the 723,549,381.25 790,388,759.79 parent company - 37 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 2. Minority shareholders’ gains and losses -2,077,541.22 9,256,915.52 VI. After-tax net amount of other comprehensive income After-tax net amount of other comprehensive income attributable to the owners of parent company (I) Other comprehensive incomes that cannot be reclassified into profit or loss 1. Changes in re-measured and defined benefit plans 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method 3. Changes in fair value of the investment in other equity instruments 4. Changes in fair value of the credit risk of the Company 5. Others (II) Other comprehensive income which will be reclassified into gains and losses 1. Other comprehensive income which can be transferred into gains and losses under the equity method 2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedge reserve 6. Converted difference in foreign currency statements 7. Others After-tax net amount of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 721,471,840.03 799,645,675.31 Total comprehensive income attributable to 723,549,381.25 790,388,759.79 owners of the parent company Total comprehensive income attributable to -2,077,541.22 9,256,915.52 minority shareholders VIII. Earnings per share (EPS): (I) Basic EPS 0.76 0.83 (II) Diluted EPS 0.76 0.83 Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu 4. Income Statement of the Parent Company In RMB Item The first half of 2022 The first half of 2021 I. Operating income 4,159,599,550.58 3,957,294,958.01 Less: Operating costs 2,146,921,987.07 1,867,434,874.51 Taxes and surcharges 21,169,789.36 29,052,610.83 Sale expenses 1,053,210,272.02 995,416,077.48 Administrative expenses 130,121,271.69 107,028,148.18 R&D expenses 161,720,456.56 136,896,643.39 Financial expenses -61,053,558.14 -46,049,005.34 Inc: Interest expenses 714,893.28 1,228,635.41 - 38 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Interest income 58,189,221.15 47,935,867.95 Add: other income 86,160,552.68 51,032,167.31 Investment income (“-” for losses) 17,639,080.72 52,446,657.81 Inc: Income from investment in joint ventures -2,947,887.32 -1,440,070.07 and associated companies Gains on derecognition of financial assets measured at amortized cost (“-” for losses) Net exposure hedging gains (“-” for losses) Gains from changes in fair value (“-” for losses) Losses from credit impairment (“-” for losses) 11,220,864.57 -32,279,529.57 Losses from asset impairment (“-” for losses) 24,056,013.60 Gains on disposal of assets (“-” for losses) -134,264.41 -2,072,673.59 II. Operating profits (“-” for losses) 846,451,579.18 936,642,230.92 Add: non-operating income 2,622,330.74 917,022.51 Less: non-operating expenditure 1,188,024.98 1,203,445.87 III. Total profits (“-” for total losses) 847,885,884.94 936,355,807.56 Less: Income tax expenses 127,513,732.18 137,593,038.71 IV. Net profits (“-” for net losses) 720,372,152.76 798,762,768.85 (I) Net profits from going concern (“-” for net 720,372,152.76 798,762,768.85 losses) (II) Net profits from discontinued operations (“-” for net losses) V. After-tax net amount of other comprehensive income (I) Other comprehensive income that cannot be reclassified into gains and losses 1. Changes in re-measured and defined benefit plans 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method 3. Changes in fair value of the investment in other equity instruments 4. Changes in fair value of the credit risk of the Company 5. Others (II) Other comprehensive income which will be reclassified into gains and losses 1. Other comprehensive income which can be transferred into gains and losses under the equity method 2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedge reserve 6. Converted difference in foreign currency statements 7. Others VI. Total comprehensive income 720,372,152.76 798,762,768.85 VII. EPS: (I) Basic EPS (II) Diluted EPS - 39 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 5. Consolidated Cash Flow Statement In RMB Item The first half of 2022 The first half of 2021 I. Cash flow from operating activities: Cash received for the sale of goods and 4,817,937,199.39 4,738,990,263.73 rendering of services Net increase in clients’ deposits and deposits from banks and other financial institutions Net increase in borrowings from the central bank Net increase in borrowings from other financial institutions Cash received from receiving insurance premium of the original insurance contract Net cash from receiving reinsurance premium Net increase in deposits and investment of insured persons Cash received from interests, fees and commissions Net increase in borrowed funds Net increase in repurchase business funds Net cash received from vicariously traded securities Refunds of taxes 29,520,918.02 7,323,753.03 Cash received relating to other 177,926,833.07 118,704,652.16 operating activities Subtotal of cash inflow from operating 5,025,384,950.48 4,865,018,668.92 activities Cash paid for purchased products and 2,583,318,265.69 2,252,759,526.62 received services Net increase in loans and advances to customers Net increase in deposits with the central bank and other financial institutions Cash paid for claims of original insurance contract Net increase in lending funds Cash paid for interests, fees and commissions Cash paid for policy dividends Cash paid to and on behalf of 509,673,044.55 437,124,075.00 employees Cash paid for taxes 408,649,175.45 369,427,461.40 Cash paid related to other operating 1,200,889,342.46 1,075,485,546.81 activities Subtotal of cash outflow from operating 4,702,529,828.15 4,134,796,609.83 activities Net cash flow from operating activities 322,855,122.33 730,222,059.09 II. Cash flow from investing activities: Cash received from return of 892,912,500.00 1,234,000,000.00 investments Cash received from return on 23,238,518.93 33,853,727.02 investments - 40 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Net cash received from disposal of 1,030,970.40 2,206,278.90 fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other business entities Cashes received related to other investment activities Subtotal of cash inflow from investment 917,181,989.33 1,270,060,005.92 activities Cash paid for purchase and 269,416,076.84 154,539,404.13 construction of fixed assets, intangible assets and other long-term assets Cash paid to investments 923,500,000.00 901,000,000.00 Net increase in pledged loans Net cash from subsidiaries and other operating entities Cash paid related to other investment activities Subtotal of cash outflow from investment 1,192,916,076.84 1,055,539,404.13 activities flow from investment activities -275,734,087.51 214,520,601.79 III. Cash flow from financing activities: Cash from acquiring investments 25,000,000.00 850,000.00 Including: Cash received by 11,000,000.00 850,000.00 subsidiaries from investments of minority shareholders Cash from acquiring debts 17,000,000.00 Other cashes received in relation to 1,012,732.06 5,552,160.81 financing activities Subtotal of cash inflow from financing 43,012,732.06 6,402,160.81 activities Cash paid for repayments of debts 3,500,000.00 Cash paid for distribution of dividends, profits or interest expenses 476,047,458.00 495,485,158.00 Inc: Dividends or profits paid by 4,000,000.00 22,950,000.00 subsidiaries to minority shareholders Other cashes paid in relation to 6,536,810.12 199,995,742.59 financing activities Subtotal of cash outflow from financing 486,084,268.12 695,480,900.59 activities Net cash flow from financing activities -443,071,536.06 -689,078,739.78 IV. Effect of change in exchange rate 3,111,525.65 -264,556.23 on cash and cash equivalents V. Net increase in cash and cash -392,838,975.59 255,399,364.87 equivalents Plus: Opening balance of cash and cash 3,719,988,820.35 3,886,096,513.56 equivalents VI. Closing balance of cash and cash 3,327,149,844.76 4,141,495,878.43 equivalents - 41 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 6. Cash Flow Statement of the Parent Company In RMB Item The first half of 2022 The first half of 2021 I. Cash flow from operating activities: Cash received for the sale of goods and 4,510,190,738.71 4,346,968,618.40 rendering of services Refunds of taxes 23,286,694.84 7,323,753.03 Cash received relating to other 130,386,047.45 99,542,054.03 operating activities Subtotal of cash inflow from operating 4,663,863,481.00 4,453,834,425.46 activities Cash paid for purchased products and 2,444,657,366.67 2,138,946,028.17 received services Cash paid to and on behalf of 388,860,388.83 340,735,312.05 employees Cash paid for taxes 377,718,507.95 330,152,814.67 Cash paid related to other operating 1,074,310,127.24 932,462,696.53 activities Subtotal of cash outflow from operating 4,285,546,390.69 3,742,296,851.42 activities Net cash flow from operating activities 378,317,090.31 711,537,574.04 II. Cash flow from investing activities: Cash received from return of 800,000,000.00 960,000,000.00 investments Cash received from return on 21,676,168.09 54,819,617.81 investments Net cash received from disposal of 509,970.40 2,156,298.90 fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other business entities Cashes received related to other investment activities Subtotal of cash inflow from investment 822,186,138.49 1,016,975,916.71 activities Cash paid for purchase and 227,459,776.46 112,968,774.96 construction of fixed assets, intangible assets and other long-term assets Cash paid to investments 850,000,000.00 610,000,000.00 Net cash from subsidiaries and other operating entities Cash paid related to other investment activities Subtotal of cash outflow from investment 1,077,459,776.46 722,968,774.96 activities Net cash flow from investment activities -255,273,637.97 294,007,141.75 III. Cash flow from financing activities: Cash from acquiring investments Cash from acquiring debts Other cashes received in relation to 1,012,732.06 5,552,160.81 financing activities Subtotal of cash inflow from financing 1,012,732.06 5,552,160.81 activities Cash paid for repayments of debts Cash paid for distribution of 472,047,458.00 473,435,158.00 dividends, profits or interest expenses Other cashes paid in relation to 3,516,183.32 199,995,742.59 financing activities - 42 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Subtotal of cash outflow from financing 475,563,641.32 673,430,900.59 activities Net cash flow from financing activities -474,550,909.26 -667,878,739.78 IV. Effect of change in exchange rate 3,111,599.62 -264,437.65 on cash and cash equivalents V. Net increase in cash and cash -348,395,857.30 337,401,538.36 equivalents Plus: Opening balance of cash and cash 3,504,333,910.43 3,627,178,859.95 equivalents VI. Closing balance of cash and cash 3,155,938,053.13 3,964,580,398.31 equivalents - 43 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 7. Consolidated Statement of Changes in Owners’ Equity Current amount In RMB The first half of 2022 Owners’ equity attributable to the parent company Other equity instruments Gen Item Spe Pref Perp eral Minority interests Total owner’s equity erre etua Other comprehensive cial Oth Capital stock Capital reserve Less: Treasury share Surplus reserves risk Undistributed profits Subtotal Oth income rese er d l rese er rves shar bon rves es ds I. Ending balance of 949,024,050.00 404,918,098.15 199,995,742.59 -100,157,634.16 474,516,412.50 7,098,721,555.37 8,627,026,739.27 139,031,776.96 8,766,058,516.23 last year Plus: Changes in accounting policies Correction of errors of the previous period Business combination under common control Others II. Beginning balance 949,024,050.00 404,918,098.15 199,995,742.59 -100,157,634.16 474,516,412.50 7,098,721,555.37 8,627,026,739.27 139,031,776.96 8,766,058,516.23 of this year III. Change in current period (“-” 3,998,366.27 - - 251,501,923.25 255,500,289.52 4,922,458.78 260,422,748.30 for decrease) (I) Total 723,549,381.25 723,549,381.25 -2,077,541.22 721,471,840.03 comprehensive income (II) Capital invested 3,998,366.27 - 3,998,366.27 11,000,000.00 14,998,366.27 and decreased by the owners - 44 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 1. Common shares 11,000,000.00 11,000,000.00 - invested by the owners 2. Other equity - - instruments Capital invested by holders 3. Amount of share- 3,998,366.27 3,998,366.27 3,998,366.27 based payments recognized in owners’ equity 4. Others - (III) Profit -472,047,458.00 -472,047,458.00 -4,000,000.00 -476,047,458.00 distribution 1. Withdrawal of - surplus reserve 2. Appropriation - of general risk reserve 3. Distribution -472,047,458.00 -472,047,458.00 -4,000,000.00 -476,047,458.00 to owners (or shareholders) 4. Others - (IV) Internal carry- - forward of owners’ equity 1. Capital reserve - converted into capital (or capital stock) 2. Surplus reserve - converted into capital (or capital stock) 3. Surplus reserves making up for losses - 45 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others IV. Ending balance of 949,024,050.00 408,916,464.42 199,995,742.59 -100,157,634.16 474,516,412.50 7,350,223,478.62 8,882,527,028.79 143,954,235.74 9,026,481,264.53 current period - 46 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Amount of last year In RMB The first half of 2021 Owners’ equity attributable to the parent company Item Other equity instruments Special General Othe Minority interests Total owner’s equity Other comprehensive reserve risk Capital stock Perpet Capital reserve Less: Treasury share Surplus reserves Undistributed profits Subtotal Othe income r Preferred s reserves ual shares r bonds - I. Ending balance of last year 949,024,050.00 401,799,332.67 474,516,412.50 6,240,444,654.34 8,050,626,815.35 143,152,413.29 8,193,779,228.64 15,157,634.16 Plus: Changes in accounting policies Correction of errors of the previous period Business combination under common control Others - II. Beginning balance of this year 949,024,050.00 401,799,332.67 474,516,412.50 6,240,444,654.34 8,050,626,815.35 143,152,413.29 8,193,779,228.64 15,157,634.16 III. Change in current period (“-” 802,690.61 199,995,742.59 294,903,601.79 95,710,549.81 10,106,915.52 105,817,465.33 for decrease) (I) Total comprehensive income 790,388,759.79 790,388,759.79 9,256,915.52 799,645,675.31 (II) Capital invested and decreased by 802,690.61 802,690.61 850,000.00 1,652,690.61 the owners 1. Common shares invested by the 850,000.00 850,000.00 owners 2. Capital invested by holders of other equity instruments 3. Amount of share-based payments 802,690.61 802,690.61 802,690.61 recognized in owners’ equity 4. Others (III) Profit distribution -495,485,158.00 -495,485,158.00 -495,485,158.00 1. Withdrawal of surplus reserve 2. Appropriation of general risk reserve - 47 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 3. Distribution to owners (or -495,485,158.00 -495,485,158.00 -495,485,158.00 shareholders) 4. Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3. Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others 199,995,742.59 -199,995,742.59 -199,995,742.59 - IV. Ending balance of current period 949,024,050.00 402,602,023.28 199,995,742.59 474,516,412.50 6,535,348,256.13 8,146,337,365.16 153,259,328.81 8,299,596,693.97 15,157,634.16 8. Statement of Changes in Owners’ Equity of the Parent Company Current amount In RMB The first half of 2022 Item Other equity instruments Capital stock Capital reserve Less: Treasury Other Special Surplus reserves Undistributed Others Total owner’s equity share comprehensive reserves profits Preferred Perpetual Others income shares bonds I. Ending balance of last year 949,024,050.00 404,873,115.14 199,995,742.59 -100,157,634.16 474,516,412.50 6,971,309,836.02 8,499,570,036.91 Plus: Changes in accounting policies - 48 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Correction of errors of the previous period Others II. Beginning balance of this year 949,024,050.00 404,873,115.14 199,995,742.59 -100,157,634.16 474,516,412.50 6,971,309,836.02 8,499,570,036.91 III. Change in current period (“-” for decrease) 3,998,366.27 248,324,694.76 252,323,061.03 (I) Total comprehensive income 720,372,152.76 720,372,152.76 (II) Capital invested and decreased by the owners 3,998,366.27 3,998,366.27 1. Common shares invested by the owners 2. Capital invested by holders of other equity instruments 3. Amount of share-based payments recognized in owners’ 3,998,366.27 3,998,366.27 equity 4. Others (III) Profit distribution -472,047,458.00 -472,047,458.00 1. Withdrawal of surplus reserve 2. Distribution to owners (or shareholders) -472,047,458.00 -472,047,458.00 3. Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3. Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others IV. Ending balance of current period 949,024,050.00 408,871,481.41 199,995,742.59 -100,157,634.16 474,516,412.50 7,219,634,530.78 8,751,893,097.94 - 49 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Amount of last year In RMB The first half of 2021 Item Other equity instruments Capital stock Capital reserve Less: Treasury Other Special Surplus reserves Undistributed profits Others Total owner’s equity share comprehensive reserves Preferred Perpetual Others shares bonds income I. Ending balance of last year 949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 6,120,603,639.69 7,930,740,817.69 Plus: Changes in accounting policies Correction of errors of the previous period Others II. Beginning balance of this year 949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 6,120,603,639.69 7,930,740,817.69 III. Change in current period (“-” for decrease) 802,690.61 199,995,742.59 325,327,610.85 126,134,558.87 (I) Total comprehensive income 798,762,768.85 798,762,768.85 (II) Capital invested and decreased by the owners 802,690.61 802,690.61 1. Common shares invested by the owners 2. Capital invested by holders of other equity instruments 3. Amount of share-based payments recognized in owners’ 802,690.61 802,690.61 equity 4. Others (III) Profit distribution -473,435,158.00 -473,435,158.00 1. Withdrawal of surplus reserve 2. Distribution to owners (or shareholders) -473,435,158.00 -473,435,158.00 3. Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3. Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings - 50 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others 199,995,742.59 -199,995,742.59 IV. Ending balance of current period 949,024,050.00 402,557,040.27 199,995,742.59 -15,157,634.16 474,516,412.50 6,445,931,250.54 8,056,875,376.56 - 51 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 III. Basic Information of the Company Hangzhou Robam Appliances Co., Ltd. (hereinafter referred to as Robam or the Company) is an incorporated company established by overall changing Hangzhou Robam Home Appliances Co., Ltd. on November 7, 2000. Approved by China Securities Regulatory Commission (Approval document No.: ZJXK [2010] No. 1512), the Company offered 40 million ordinary shares in RMB to the public for the first time on November 23, 2010 (stock code: 002508), with the par value of RMB 1 per share and the issue price of RMB 24.00 per share. As of June 30, 2022, the total capital stocks of the Company reached RMB 949,024,050 after several equity changes. The Company’s unified social credit code is 91330000725252053F; the legal representative is Ren Jianhua; the address is No.592, Linping Avenue, Yuhang Economic Development Area, Yuhang District, Hangzhou. The Company is a manufacturing company, with major businesses covering research & development, production, sales and comprehensive services of kitchen appliances. Its main products include range hoods, gas stoves, disinfection cabinets, steam ovens, baking ovens, dishwashers, water purifiers, microwave ovens, integrated stoves, and purification tanks. The main business scope is: business items licensed in Article 13: production of disinfection device; production of electrothermal food processing equipment (For business subject to approval according to law, relevant operating activities may not be carried out until they are approved by relevant authorities, and the specific business items shall be subject to the results of examination and approval). General business: research and development of kitchen utensils, sanitary ware and daily sundries; wholesale of kitchen utensils, sanitary ware and daily sundries; sales of daily glass products; sales of household appliances; installation services for household appliances; research and development of household appliances; sales of household products; sales of daily necessities; manufacturing of daily wood products; retail of household appliances; repair of household appliances; manufacturing of household appliances; sales of electrothermal food processing equipment; wholesale of daily necessities; technical services, technology development, technical consultation, technology exchange, technology transfer and technology promotion; sales of non-electric household appliances; manufacturing of non-electric household appliances; production of gas appliances; sales of refrigeration and air-conditioning equipment; manufacturing of refrigeration and air-conditioning equipment; basic artificial intelligence software development; manufacturing of intelligent household consumption equipment; sales of artificial intelligence hardware; manufacturing of special equipment for commerce, catering and service; sales of special equipment for commerce, catering and service; import and export of goods; manufacturing of special equipment for environmental protection; sales of special equipment for environmental protection (except for business subject to approval according to law, operating activities shall be independently carried out as described in business license according to law). The consolidated financial statements of the Company cover eight companies, including Beijing Robam Appliances Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd., Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances Trading (Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd., Hangzhou Robam Fuchuang Investment Management Co., Ltd. Zhejiang Cookingfuture Technology Co., Ltd. and Hangzhou Jinhe Electric Appliances Co., Ltd. Compared to the last period, the Company added one subsidiary in this period as the Hangzhou Jinhe Electric Appliances Co., Ltd. was newly established. For details, please see relevant contents in the section of "IX. Interests in Other Entities" herein. IV. Basis for Preparation of Financial Statements 1. Preparation basis The financial statements of the Company are prepared on a going concern basis, and in light of the Company’s actual transactions and events, in accordance with the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance of China and - 52 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 relevant provisions, as well as the accounting policies and estimates stated in the section of "Significant Accounting Policies and Estimates" herein. 2. Going concern After taking into account of factors such as macro policy risks, market management risks, and the current and long-term profitability, solvency, and financial flexibility of the Company, as well as the intention of the management to change the operation policies, the management of the Company believes that there are no matters affecting the Company’s going concern within 12 months from the end of the reporting period onwards. V. Significant Accounting Policies and Estimates Specific accounting policies and estimates: The specific accounting policies and estimates prepared by the Company according to its actual production and operation include the operating cycle, the recognition and measurement of receivables and bad debts, measurement of inventory delivered, fixed assets classification as well as depreciation methods, invisible asset amortization, conditions for the capitalization of R&D expenses, and revenue recognition and measurement. 1. Statement of compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Company comply with the requirements of the Accounting Standards for Business Enterprises, and truthfully and completely reflect financial position, business results, cash flow and other relevant information of the Company. 2. Accounting period The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian calendar. 3. Operating cycle The normal operating cycle of the Company shall be one year (12 months). 4. Bookkeeping base currency The Company adopts RMB as the bookkeeping base currency. 5. Accounting approaches to business combinations under or not under common control The assets and liabilities acquired by the Company as the combining party in a business combination under common control shall be measured at the book value of the combined party in the final controller’s consolidated statements on the combination date. The capital reserve shall be adjusted against the difference between the book value of the net assets acquired by the combining party and the book value of the combination consideration paid by it. If the capital reserve is insufficient to offset the difference, the retained earnings shall be adjusted. The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a business combination not under common control shall be measured at fair value on the acquisition date. The combination cost is the sum of fair values of cash or non- cash assets paid, liabilities issued or undertaken, equity securities issued, etc. by the Company for the purpose of taking control over the acquired party on the acquisition date and all directly related expenses incurred during the business combination (in case of business combination accomplished through multiple transactions step by step, the combination cost is the sum of the cost of every single transaction). If the combination cost is greater than the fair value share of the acquiree’s identifiable net assets acquired from the acquiree in the combination, the case is recognized as goodwill. Where the combination cost is less than the fair value share of the identifiable net assets acquired from the acquiree, the fair values of the identifiable assets, debts and contingent liabilities acquired in the combination and those of non-cash assets subject to combination consideration or issued equity securities shall be rechecked first, - 53 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 and then in case the combination cost is less than the fair value shares of the identifiable net assets acquired from the acquiree, the difference shall be included in the non-operating income in the period of the combination. 6. Methods of preparing consolidated financial statements All subsidiaries under the control of the Company are included into the consolidated financial statements. The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company when preparing the consolidated financial statements, where the accounting policies and accounting periods are inconsistent between the Company and its subsidiaries. All major internal transactions, inter-company balances, and unrealized profits with the scope of consolidation shall be offset when preparing consolidated financial statements. The portion of owner’s equity of subsidiaries not held by the parent company and net current profit & loss, other comprehensive incomes and the portion of total comprehensive incomes belonging to minority equity are presented under "minority equity, minority interest income, other comprehensive incomes belonging to minority shareholders and total comprehensive incomes belonging to minority shareholders, respectively." For a subsidiary acquired from a business combination under common control, its operating results and cash flows are included in the consolidated financial statements since the beginning of the consolidation year. When the comparable consolidated financial statements are being prepared, relevant items in the financial statements of the last year are adjusted with the stated party formed after merging deemed to exist from the time of the ultimate controlling party starting to control. For a subsidiary acquired through business combinations not under the same control, its operating results and cash flows shall be included into the consolidated financial statement since the date when the Company obtains control. When preparing the consolidated financial statements, the subsidiary’s financial statements shall be adjusted on basis of the fair value of all identifiable assets, liabilities and contingent liabilities ascertained on the purchasing date. For equity interests in an investee not under common control realized by two or more transactions, which finally bring about the business combination, equity interests in the investee before the acquisition date shall be re-measured at fair value on the acquisition date and the balance between the fair value and the book value shall be included in the investment gains for the current period when preparing the consolidated statements. If the related acquiree’s equity held before the acquiring date contains other comprehensive income and the other changes of owner’s equity except for net profits and losses, other comprehensive income and profit distributions, it shall be transferred to investment gains or losses on the date of acquisition, excluding the other comprehensive income derived from changes of net liabilities or net assets due to re-measurement on defined benefit plan by the investee. Without losing any control right, the Company has partially disposed the long-term equity investment in the subsidiary. In the consolidated financial statement, according to the difference between the disposal prices of part of the equity investment in the subsidiary and net assets of the subsidiary attributed to the Company as a result of disposal of long-term equity investment continuously calculated from the purchase date or consolidation date in the subsidiary, capital premium or stock premium is adjusted, where the capital surplus is not sufficient to be offset, they are adjusted to the retained earnings. Where the Company loses the controlling right of the invested party for such reason as disposing partial equity investment, the remaining equity is re-measured as per the fair value of such equity on the day of losing controlling rights when preparing the consolidated financial statements. The balance from the sum of the consideration obtained upon the disposal of equity and the fair value of the remaining equity less the appropriable share of the net asset of the former subsidiaries, calculated as per the former shareholding proportion from the purchase day or merging day, is included in the investment income for the period when the right of control is lost and the goodwill is deducted. Other comprehensive incomes related to former equity investment in subsidiaries shall be recognized as current investment profits & losses upon losing controls. 7. Classification of joint venture arrangement and accounting methods for joint operation - 54 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The joint arrangement of the Company includes the joint venture. The Company, serving as one part of the joint venture, shall, in accordance with the provisions of the Accounting Standards for Business Enterprises No. 2 Long-term Equity Investments, conduct accounting treatment of the investment of the joint venture. 8. Recognition standard of cash and cash equivalents Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that are available for payment at any time. Cash equivalents presented in the cash flow statement refer to short-term investments (not exceeding three months) with high liquidity and that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value. 9. Foreign currency business and conversion of foreign currency statement Foreign currency transactions The Company translates the foreign-currency amount of foreign-currency transactions into an RMB amount based on the spot exchange rate applicable on the transaction date. On the balance sheet date, the monetary items in foreign currencies shall be converted at the spot rate on the said balance sheet date. The conversion differences arising therefrom, except the exchange balance arising from the foreign currency borrowings special for acquisition or production of qualifying assets which shall be processed according to the capitalization principle, shall be directly included in the current profit or loss. The foreign currency non-monetary items measured at fair value shall be converted according to the spot rate of the date when the fair value is confirmed. If the difference between the converted amount of booking base currency and the original amount of booking base currency belongs to the salable financial asset, such difference shall be included in the capital reserve; if such difference belongs to the foreign currency non-monetary item which is measured at fair value and whose change is included in the profits and losses of the current period, it shall be included in current profits and losses. The foreign currency non-monetary items measured by historical cost shall still be translated according to the spot rate on the transaction date, while RMB amount remains unchanged. Translation of foreign currency financial statements Assets and liabilities items in the balance sheets of foreign operations are translated into RMB using the spot exchange rate at the balance sheet date, while the shareholders’ equity items, except for the "undistributed profit", are translated into RMB using the spot exchange rate at the date of transaction. The income and expense items in the income statements of overseas operations are translated at the exchange rate approximate to the spot rate at the date of transaction. The difference arising from the above translation is presented separately under other comprehensive income. For monetary items denominated in foreign currencies that materially constitute overseas net investment in overseas operations, exchange differences arising from changes in exchange rates, when preparing the consolidated financial statements, are also separately presented under the Shareholders’ equity as foreign currency translation differences. In case of disposal of an overseas operation, foreign currency translation differences relating to the overseas operation are proportionately transferred to the profits or losses of the period when the disposal was transacted. During the disposal of an overseas operation, other comprehensive incomes related to the overseas operation are transferred in proportion into the disposal of current profits and losses. The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted using the exchange rate approximate to the spot rate of the transaction date of the cash flow. The effect of exchange rate changes on cash is presented separately in the cash flow statement. 10. Financial instruments The Company shall recognize a financial asset or a financial liability when it becomes a party to a financial instrument contract. Financial assets - 55 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Classification, recognition basis and measurement method of financial assets Based on the business model for management of financial assets and the contractual cash flow characteristics of financial assets, the Company classifies the financial assets into three types: 1) the financial asset measured at amortized cost; 2) the financial asset measured at the fair value with its changes included into other comprehensive incomes; and 3) and the financial asset measured at the fair value with its changes included into current profits or losses. The financial assets meeting all of the following conditions can be classified as those measured at amortized cost by the Company: ① the Company adopts the business management mode of financial assets for the purpose of collecting contractual cash flow. ② In accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount. Such financial assets are initially measured at their fair values, with related transaction costs included into the amount of initial recognition, and subsequent measurement conducted with the amortized cost. Apart from those designated as hedged items, the difference between the initial amount amortized with the effective interest method and the amount due, profits or losses incurred upon amortization, impairment, exchange profits and losses and derecognition shall be included into current profits and losses. Where the following conditions are reached at the same time, the financial assets can be classified by the Company as those measured at fair value with the changes included into other comprehensive income: ① the Company adopts the business management mode of the financial assets for the purpose of collecting contractual cash flow and selling the financial assets. ② In accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount. Such financial assets are initially measured at their fair values, with related transaction costs included into the amount of initial recognition. Apart from those designated as the hedged items, profits or losses incurred by such financial assets shall be included into the comprehensive incomes, except for credit impairment losses or gains, exchange profits and losses and the interests calculated as per the actual interest rate for such financial assets. Upon derecognition of the financial assets, the accumulated gains or losses previously recorded in other comprehensive incomes shall be transferred out of such other comprehensive incomes and included into the current profits and losses. The interest income is recognized by the Company using the effective interest method. The interest income is determined by multiplying the book balance of financial assets by the effective interest rate, except for conditions below: ① For the financial assets purchased by or originating from the Company with credit impairment, from the initial confirmation, the interest income shall be determined as per the amortized cost of the financial asset and the effect interest rate subject to credit adjustment. ② The financial assets purchased by or originating from the Company with no credit impairment but having credit impairment during the follow-up period shall be subject to interest income calculation by the Company based on the amortized cost and actual interest rate of the financial assets during the follow-up period. The non-trading equity instrument is designated by the Company as the financial asset which is measured at its fair value with changes included into current profits and losses. The designation shall not be canceled once it is made. The non-trading equity instrument investment, designed by the Company to be measured at the fair value with their changes included in other comprehensive incomes, is initially measured at fair value, with related transaction cost included in the amount of initial confirmation. Except for the obtained dividends (excluding those of the recovered investment cost), which are included in current profits and losses, other related profits and losses (including exchange profits and losses) are completely included in the other comprehensive incomes and will not then be converted into current profits and losses. Upon derecognition, the accumulated gains or losses previously included into other comprehensive incomes are transferred from other comprehensive incomes and included into retained earnings. Except for the financial assets classified to be measured by the amortized cost and those measured at fair value through other comprehensive income, other financial assets are classified by the Company as those measured at fair value through current profits and losses. Such financial assets are initially measured at their fair values, with related transaction costs directly included into the current - 56 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 profits and losses. Such financial assets are initially measured at their fair values, with related transaction costs directly included into the current profits and losses. Profits or losses of such financial assets shall be included in the current profits and losses. The financial asset formed by the contingent consideration confirmed during business combination not under the same control are classified as those measured by its fair value by the Company, with changes included into current profits and losses. Recognition basis and measurement method for transfer of financial assets Financial assets meeting one of the following conditions shall be derecognized by the Company: ① the contractual right to collect the cash flow of the financial asset is terminated; ② The financial assets have been transferred by the Company, and almost all risks and returns associated with the ownership of the financial asset are transferred; ③ The financial assets have been transferred, and the Company had neither transferred nor retained almost all risks and rewards in the ownership of the financial assets, but given up the control over the financial assets. For a financial asset that is entirely transferred and meets the conditions of derecognition, the difference is calculated between the book value of the transferred financial asset and the sum of consideration received from such transfer and the accumulated changes in fair value, which is directly included into other comprehensive income and corresponds to the derecognized amount (in accordance with the contract terms of the financial assets involved in such transfer, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount). This difference is included into the current profits and losses. For a financial asset that is partially transferred and meets the conditions of derecognition, the overall book value of the transferred financial asset is split according to the relative fair value between the part derecognized and the part not derecognized, and the difference between the following two amounts is recognized in current profits and losses: the sum of consideration received due to transfer and the amount amortized to the derecognized part and corresponding to the accumulative change of fair value which is firstly included into the other comprehensive income (in accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount), and the overall book value of aforesaid financial assets. Financial liabilities 1) Classification, recognition basis and measurement method of financial liabilities The Company’s financial liabilities are grouped, upon initial recognition, into financial liabilities measured at fair value, with the changes included in the current profit or loss and other financial liabilities. Financial liabilities measured at fair value with changes included in the current profits and losses include trading financial liabilities and financial liabilities designated to be measured as at fair value with changes included in the current profits and losses upon initial recognition. The net gain or loss arising from changes in fair value, dividends and interest paid related to such financial liabilities are recorded in profits and losses for the period in which they are incurred. Other financial liabilities are measured subsequently at the amortized cost by adopting the effective interest method. Apart from the following items, the Company will classify the financial liabilities as those measured at amortized cost: ① the financial liabilities measured at fair value with changes included into current profits and losses include financial liabilities held for trading (including derivatives that are financial liabilities) and financial liabilities designated to be measured at fair value with changes included into current profits and losses. ② The financial liabilities formed by transferring of the financial assets failed to meet the conditions for derecognition or formed by continuous involvement of transferred financial assets. ③ The financial guarantee contracts that do not fall under the above ① and ② as well as loan commitments at a rate below the market rate of interest that do not fall under the above ①. Where a contingent consideration is recognized by the Company as a financial liability in a business combination not under common control, such financial liability shall be measured at fair value with changes included into the current profits and losses during - 57 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 accounting treatment. 2) Derecognition conditions for financial liabilities When the current obligation of the financial liabilities has been relieved in whole or part, the part of the financial liabilities or obligations that have been relieved upon confirmation is terminated. If the Company reaches an agreement with the creditor to replace the existing financial liabilities by undertaking new financial liabilities and the contract terms of the existing and new liabilities are different in substance, the existing financial liabilities shall be derecognized while the new liabilities shall be recognized. Where all or part of the contract terms of the existing financial liabilities are subject to material modification, the Company shall derecognize all or part of the existing financial liabilities while recognizing the financial liabilities with modified terms as new financial liabilities. The difference between the book value of the terminated part upon confirmation and the considerations paid is included in the current profit and loss. 3) Method for determining the fair value of financial assets and financial liabilities The Company measures the fair value of financial assets and financial liabilities in the main market. If there is no major market, the Company measures the fair value of financial assets and financial liabilities with most beneficial price for the market and adopts evaluation techniques with much available data and other information support that is applicable at that time. Input data for determining fair values has three levels, wherein the input data of the first level is the unadjusted price available for the same asset or liability on the date of evaluation in an active market; the input data of the second level are directly or indirectly observable value of relevant assets or liabilities apart from input data of the first level; the input data of the third level are unobservable value of relevant assets or liabilities. The Company gives priority of using the first-level inputs and takes the third-level inputs as the last. The lowest layer that has significant impact on the overall fair value evaluation determines which layer this fair value evaluation result shall belong to. Investments in equity instruments of the Company are measured at fair value. However, under certain circumstances, if recent information needed to determine the fair value is insufficient, or if the estimated amount of the fair value features an extensive distribution scope and the cost represents the best estimate of the fair value in that distribution scope, the cost may represent the appropriate estimate on the fair value within that distribution scope. Offsetting financial assets and financial liabilities Financial assets and liabilities of the Company are presented separately in the balance sheet without offsetting. However, the net amount resulting from the offsetting between financial assets and financial liabilities shall be presented in the balance sheet only if all of the following criteria are met: (1) The Company has the statutory right to set off recognized amounts which is currently enforceable. (2) The Company intends either to settle on a net basis, or to realize the financial assets and pay off the financial liabilities simultaneously. Distinction and relevant treatment methods of financial liabilities and equity instruments The Company distinguishes between financial liabilities and equity instruments according to the following principles: (1) Where the Company cannot unconditionally avoid fulfilling certain contractual obligation by delivering cash or other financial assets, then such contractual obligation is in line with the definition of the financial liabilities. Although certain financial instruments do not expressly contain terms and conditions for the contractual obligation to deliver cash or other financial instruments, the contractual obligation may be indirectly formed according to other terms and conditions. (2) Where a financial instrument must or is able to be settled by the Company’s own equity instrument, the Company shall consider whether the Company’s own equity instrument as the settlement instrument is a substitute of cash or other financial assets, or the residual interest in the assets of an entity after deducting all of its liabilities. If it is the first case, the instrument shall be the financial liability of the issuer; if it is the second case, the instrument shall be the equity instrument of the issuer. Under some circumstances, the contract of a financial instrument may require - 58 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 that the financial instrument must or is able to be settled by the Company’s own equity instrument. The amount of contractual right or contractual obligation equals to the amount of its own equity instrument receivable or payable multiplied by its fair value at the time of settlement. Whether the amount of such contractual right or obligation is fixed, or varies, wholly or partially, based on variables other than the market value of the Company’s own equity instrument (such as interest rates, the price of a commodity or the price of a financial instrument), such contract is classified as financial liability. In classifying financial instruments (or components) in the consolidated statements, the Company shall take into account all the terms and conditions agreed between members of the Company and holders of the financial instruments. If the Company, as a whole, undertakes the obligation to deliver cash, other financial assets or settle in other ways that cause the financial instrument to become a financial liability, the instrument shall be classified as a financial liability. If a financial instrument or any of its components is a financial liability, the relevant interests, dividends, gains or losses, and gains or losses from redemption or re-financing and so on are included in the current profits & losses of the Company. If a financial instrument or its component belongs to an equity instrument, for its issue (including re-financing), repurchase, sale or cancellation, the Company will treat it as a change in equity and will not recognize the change in fair value of equity instruments. Impairment of financial instruments The Company, based on expected credit losses, performed impairment accounting and recognized credit impairment losses on financial assets measured at amortized cost, financial assets classified to be measured at the fair value with the changes included into other comprehensive incomes as well as financial guarantee contracts. The expected credit loss is a weighted average of credit losses on financial instruments weighted at the risk of default. Credit loss refers to the difference between all contractual cash flows discounted as per the original effective interest rate and receivable from the contract and all cash flows expected to be received by the Company, namely, the present value of a shortage of cash. Among them, financial assets purchased or underlying with credit impairment of the Company shall be discounted at the financial assets’ effective interest rate after credit adjustment. For account receivables arising from transactions scoped in ASBE on Revenue not containing significant financing components, the Company takes the simplified measurement method to measure its loss provisions based on the amount of expected credit losses during the entire duration. For financial assets purchased or underlying with credit impairment, the cumulative change in expected credit loss during the entire duration since the date of balance sheet date after initial recognition will be recognized as provision for loss. On each date of balance sheet, the amount of change in expected credit loss during the entire duration is included into current profits and losses as impairment losses or gains. Even if the expected credit loss within the entire duration determined on the date of balance sheet is less than the amount of expected credit loss reflected by estimated cash flow upon initial recognition, any favorable change in expected credit loss will be recognized as impairment gains. In addition to other financial assets adopting the aforesaid simplified measurement method or financial assets purchased or underlying with credit impairment, the Company shall assess whether the credit risk of relevant financial instruments has increased significantly since the initial recognition on each balance sheet date, and shall respectively accrue their provision for loss and recognize the expected credit loss and its change: 1) In the event that the credit risk has not increased significantly since the initial recognition and it is in Stage I, the Company shall measure its loss provisions based on the amount of expected credit losses for the coming 12 months of such financial instrument and calculate the interest on the basis of book balance and effective interest rate. 2) In the event that the credit risk of the financial instrument has increased significantly since the initial recognition but with no - 59 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 credit impairment and it is in Stage II, the Company shall measure its loss provisions based on the amount of the expected credit loss of the financial instrument during the entire duration and calculate the interest on the basis of book balance and effective interest rate. 3) In case that credit impairment of the financial instrument has incurred since the initial recognition and it is in Stage III, the Company shall measure the loss provisions of the financial instrument based on the amount of expected credit losses during the entire duration, and calculate the interest at amortized cost and effective interest rate. Increases or reversals of the provisions for credit losses of the financial instrument are recorded in the current profits and losses as impairment losses or gains. Except for financial assets classified to be measured at fair value through other comprehensive income, the book balance of financial assets is deducted with provision for credit losses. For financial assets classified to be measured at fair value, with the change included in other comprehensive incomes, the Company shall recognize the provision for credit loss in other comprehensive incomes, and shall not decrease the book value of such financial assets listed in the balance sheet. Where the Company has measured the provisions for losses based on the amount of the expected credit loss over the entire duration of such financial instruments in the prior accounting period, but on the current balance sheet date, such financial instruments no longer fall into the scope of significantly increased credit risk since initial recognition, the Company measures the provisions for the losses of such financial instruments based on the amount equivalent to the expected credit losses over the coming 12 months on the current balance sheet date, with resulting carrybacks of provisions for losses recorded in the current profits and losses as impairment gains. ① Significant increase in credit risk The Company determines if there is a significant increase in credit risk of financial instruments since initial recognition by comparing the risks of default of financial instruments on the balance sheet date and the date of initial recognition based on reasonable and well-grounded forward-looking information available. For the financial guarantee contract, when the Company applies the regulations on impairment of financial instruments, the date when the Company becomes the party which makes the irrevocable undertaking is regarded as the date of initial recognition. The Company will take into account the following factors when it assesses whether the credit risk is significantly increased: the operating results of the debtor have actually changed or are expected to significantly change or not; whether the regulatory, economic or technical environment where the debtor is located has significantly and adversely changed or not; whether the value of the collateral as the debt pledge or the guarantee provided by the third party or credit enhancement quality has significantly changed or not, as these changes are expected to reduce the economic motives of the debtor to make repayments within the time limits prescribed in the Contract or to impact the default probability; whether the expected performance or repayment behavior of the debtor has significantly changed or not; whether the Company has changed its management method for financial instrument credit or not, etc. On the balance sheet date, if the Company determines that the financial instrument only carries low credit risks, then the Company will assume that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of default on financial instruments is low, the borrower is highly capable of performing its contractual cash flow obligations in the short term, and even if the economic situation and operating environment are adversely changed over a long period of time but not necessarily reducing the borrower’s performance of its contractual cash obligations, then the financial instrument is considered as having a lower credit risk. ② Credit-impaired financial assets In case of one or more events adversely affecting the estimated future cash flows of a financial asset, the financial asset becomes a financial asset to which a credit impairment has occurred. Evidence of a credit impairment on a financial asset includes the following information: serious financial difficulties of the debtor; a breach of contract by the debtor, such as a default or overdue payment of interest or principle; the creditor, for economic or contractual considerations relating to financial difficulties of the debtor, offers the debtor concessions that are impossible in any other circumstances; it is probable that the debtor will enter bankruptcy or - 60 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 other financial reorganization; the disappearance of an active market for that financial asset because of financial difficulties of the issuer or the debtor; the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses. The credit impairment of financial assets may be caused by the joint effect of the above multiple events, and may not be caused by individually identifiable events. ③ Determination of expected credit losses In assessing the expected credit loss, the Company takes reasonable and well-founded information into consideration about past events, current condition and predictions of future economic status based on the expected credit loss of single and combined financial evaluation instruments. The Company divides the financial instruments into different portfolios based on the common credit risk characteristics. See accounting policies of relevant financial instruments for single evaluation standards and combined credit risk characteristics. The Company determines the expected credit losses of financial instruments under the following methods: For financial assets, the credit loss is calculated as the present value of the difference between the contractual cash flows to be collected by the Company and cash flows that are expected to be collected. For the financial guarantee contract, the credit loss is the expected payment made to the contract holder by the Company to reimburse the contract holder against the credit losses incurred by the contract holder, deducted by the present value of the differences between the amounts expected to be received by the Company from the contract holder, debtor or any other party. For financial assets which have been credit-impaired on the balance sheet date but are not purchased or underlying with credit impairment, the credit loss is calculated as the difference between the book balance of such financial assets and present value of anticipated future cash flows discounted at the original effective interest rate. 11. Notes receivable The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics, divides the notes receivable into different combinations and determines the accounting estimation policy of expected credit loss. Classification of combination Basis for determining combination Provision method The Company believed that there was no significant credit risk Banker’s acceptances The acceptor is a banking financial in the bank’s acceptance held by the Company and there will be combined institution. no significant loss due to the default of the bank. The acceptor is a non-bank The Company shall measure the bad-debt provision of Trade acceptances combined financial institution or enterprise receivable trade acceptance based on the expected credit loss like a finance company. during the entire duration. 12. Accounts receivable For the receivables arising from transactions regulated by the Accounting Standards for Business Enterprises No. 14 Revenue Standards (whether or not containing significant financing components) and the lease receivables regulated by the Accounting Standards for Business Enterprises No. 21 Leasing, the Company takes the simplified measurement method to measure its loss provisions based on the amount of expected credit losses during the entire duration. For accounts receivable, the Company assesses whether the credit risk increases significantly on the basis of a single financial - 61 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 instrument or a combination of financial instruments. The Company singly evaluates the credit risk of receivables with significantly different credit risks and the following characteristics: receivables in dispute with the other party or involved in litigation and arbitration; accounts receivable that there are obvious indications showing that the debtor is likely to be unable to fulfill the repayment obligation. The Company is unable to obtain sufficient evidence of significant increase in credit risk at the level of single financial instrument at reasonable cost, but it is feasible to assess whether the credit risk increases significantly on the basis of the combination of financial instruments. When the assessment is performed on the combination of financial instruments, the Company can classify the financial instruments based on the common credit risk characteristics. The Company classifies the accounts receivable into the following combinations based on their credit risk characteristics: Classification of combination Basis for determining combination Provision method Credit loss that accrues accounts Accounts receivable with the same aging have receivable by aging analysis method similar credit risk characteristics Expected rates of credit loss Related parties within the Funds of subsidiaries within the consolidation No expected credit loss under normal consolidation scope scope of controlling shareholders circumstances If there is objective evidence showing that the credit impairment of certain account receivable has incurred, the Company shall singly withdraw the bad debt reserve of accounts receivable and confirm the expected credit loss. For accounts receivable with credit loss accrued from receivables by aging analysis method, based on the actual credit loss of previous years and considering the forward-looking information of this year, the accounting estimate policies of the Company for measuring the expected credit loss are as follows: Aging Expected rates of credit loss Within 1 year 5.00% 1-2 years 10.00% 2-3 years 20.00% 3-4 years 50.00% 4-5 years 80.00% More than 5 years 100.00% The Company calculates the expected credit loss of receivables on the balance sheet date. If the expected credit loss is greater than the carrying amount of the current receivables impairment provision, the Company will recognize the difference as impairment loss of receivables, debit "credit impairment loss" and credit "bad debt provision". Otherwise, the Company will recognize the difference as impairment gains and make opposite accounting records. For the actual credit losses of the Company, if the relevant receivables are determined to be unrecoverable and are approved to be written off, the Company shall debit "bad debt provision" and credit "accounts receivable" according to the approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the "credit impairment loss" will be debited according to the difference. 13. Receivables financing Where the following conditions are reached at the same time, the financial assets can be classified as those measured at fair value and its change and included in other comprehensive income: the Company adopts the business management mode of the financial assets for the purpose of collecting contractual cash flow and selling the financial assets; as stipulated in contract terms of the financial assets, the cash flows generated on special dates are solely the payments to principals and interests on the principal amount outstanding. - 62 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In the case where the Company transfers the receivables held in the form of discount or endorsement and such business is more frequent and involves a large amount of money, its business management model is, in essence, to collect and sell contract cash flow, and according to the relevant provisions of financial instrument standards, the receivables are classified into financial assets with changes measured at fair value and included in other comprehensive income. 14. Other receivables Determination and accounting method for expected credit loss of other receivables The Company divides the process of credit impairment of other receivables into three stages and adopts different accounting treatment methods for the impairment of other receivables in different stages: Credit risk has not increased significantly since initial recognition (Stage I) For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss in the next 12 months. The Company classifies other receivables based on aging as a credit risk characteristic and measure them on the basis of combination, which is equivalent to the expected credit loss in the next 12 months. Credit risk has increased significantly since initial recognition but has not been impaired (Stage II) For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss during the entire duration. Credit impairment after initial recognition (Stage III) For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss during the entire duration. 15. Inventories Inventories of the Company mainly include low-value consumables, raw materials, goods in-process, merchandise inventory and goods shipped in transit. The inventories are managed based on perpetual inventory system, and valued at actual cost on acquisition. Low-value consumables and packaging materials are amortized using one-off amortization method. At the end of accounting period, inventory is valuated at cost or net realizable value, whichever is lower; provision for inventory depreciation reserves is made for the part of the cost uncollectible of inventory due to damage, fully or partially out of date or selling price lower than the cost, etc. Inventory revaluation reserves of merchandise inventories and raw materials are generally accrued as the excess of the higher cost of individual inventory over its net realizable value. For raw and auxiliary materials of larger amount and lower unit price, inventory revaluation reserves shall be accrued based on the category. Net realizable value of merchandise inventories, goods in-process or held-for-sale materials is determined by their estimated selling price deducted by estimated selling expenses and related taxes; net realizable value for materials held for production is determined by the estimated selling price of finished goods deducted by the estimated cost to completion, estimated selling expenses and the related taxes. 16. Contract assets Recognition method and standard of contract asset Contract asset refers to the rights of the Company to receive consideration for goods transferred to the customer, which depend on other factors except for the lapse of time. For example, where the Company sells two clearly distinguished commodities to the customer and has the right to collect the payment because one commodity is delivered but the payment relies on the delivery of the other - 63 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 commodity, the Company will treat the collection rights as the contract assets. Determination and accounting method for expected credit loss of contract assets For the determination method for expected credit loss of contract assets, please refer to relevant contents in 10. Financial asset and liabilities; 11. Notes receivable and 12. Receivables. The Company calculates the expected credit loss of contract assets on the balance sheet date. If the expected credit loss is greater than the carrying amount of the current impairment provision of contract assets, the Company will recognize the difference as impairment loss, debit "asset impairment loss" and credit "contract asset impairment provision". Otherwise, the Company will recognize the difference as impairment gains and make opposite accounting records. For the actual credit losses of the Company, if the relevant contract assets are determined to be unrecoverable and are approved to be written off, the Company shall debit "contract asset impairment provision" and credit "contract assets" according to the approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the "asset impairment loss" will be debited according to the difference. 17. Contract costs Method for determining amount of assets related to contract costs The Company’s assets related to the contract costs comprise the contract performance cost and the contract acquisition cost. The contract performance cost, namely the cost incurred to perform the contract by the Company, not covered by other accounting standards for business enterprises, shall be deemed as one asset if it meets the conditions below: the cost is directly related to one existing contract or one contract expected to be acquired and covers direct labor cost, direct material cost, manufacturing cost (or similar cost), the cost clearly specified to be borne by the customer and other costs incurred by the contract only; the cost increases the resources available to the Company to fulfill performance duties in the future; the cost is expected to be recovered. The contract acquisition cost refers to the incremental cost incurred by the Company for the purpose of securing a contract, which will be recognized in the form of contract acquisition cost as an asset if it is expected to be recovered; if the amortization period of the assets does not exceed one year, such cost shall be included in current profit or loss. Incremental cost refers to the cost which will not incur unless a contract is secured by the Company (e.g., sales commission, etc.). Other costs (such as the travel expense, whether or not the contract will be acquired, except the incremental cost which can be recovered as expected) incurred the Company for purpose of acquiring the contract shall be included in the current profit or loss at the time of occurrence, unless those clearly specified to be borne by the customer. Asset amortization related to contract costs The Company’s assets related to contract costs are amortized on the same basis as revenue recognition of goods related to the asset and included in the current profits or losses. Asset impairment related to contract cost When the Company recognizes the impairment loss related to contract costs, the Company shall firstly recognize the impairment loss of other assets which are recognized as per other account standards for business enterprises and are related to the contract. Then, if the book value is higher than the difference between the remaining consideration expected to be received for the transfer of the commodity associated with the asset and the estimated costs to be incurred for the transfer of relevant commodity, impairment provision will be made for the excess portion and recognized as asset impairment loss. - 64 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 If the factors causing the impairment of prior period change and make the previous difference between the above-mentioned items higher than the book value of the asset, the withdrew asset impairment provision shall be reversed and recorded in the current profits or losses, although the book value of asset after reversion shall not exceed the book value of the asset at the reversion date under the condition of not withdrawing the impairment provision. 18. Assets held for sales None 19. Debt investment None 20. Other debt investment None 21. Long-term receivables None 22. Long-term equity investment Long-term equity investment of the Company mainly includes the investment to the subsidiaries, associated enterprises and joint ventures. The Company follows the basis to judge the joint control: all the participants or group of participants collectively control the arrangements, and the policies for activities related to such arrangement must be agreed by all such participants. In general, it constitutes significant influence on an investee if the Company directly or indirectly, through a subsidiary, controls 20% (inclusive) or more (less than 50%) of voting shares of the investee. Where the Company controls less than 20% voting shares of the investee directly or indirectly through a subsidiary, significant effects on the investee shall be judged based on the facts and circumstances where the Company appoints representative to the board of directors or similar authority of the investee, participates the development of financial and operating policies of the investee, conducts important trading with the investee, dispatches management personnel to the investee or provides key technical data to the investee. The one forming control over the investee is the subsidiary of the Company. For the long-term equity investment acquired through business combination under the same control, the share of the combined party in the book value of net assets presented in consolidated financial statements of ultimate controlling party acquired at the date of combination is recognized as initial investment cost of long-term equity investment. The book value of net assets for the combined party is negative on the combining date, and the long-term equity investment cost is determined as zero. In case the equity of the investee under the same control is obtained through multiple deals step by step to finally form business combination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, the share of the book value of combined party’s net assets presented in consolidated financial statements of ultimate controlling party acquired at the date of combination is recognized as initial investment cost of long-term equity investment. The difference between initial investment cost and the sum of the book value of long-term equity investment before the combination is realized and the book value of consideration additionally paid to further acquire shares on the date of combination is adjusted against the capital surplus; if the capital reserve is not sufficient to be offset, the remaining balance is adjusted against retained earnings. For long-term equity investments acquired through business combinations not under common control, the combined cost is used as the initial investment cost. In case the equity of the investee under the same control is obtained through multiple deals step by step to finally form business combination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, initial - 65 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 investment cost accounted using cost method will be the sum of the book value of original equity investment and new investment cost. For equity investments held before the date of acquisition where equity method is adopted, relevant other comprehensive income accounted originally by equity method shall not be adjusted for the time being, accounting treatment should be applied to the investment on the same basis as those adopted by the invested entity for direct disposal of related assets or liabilities. For equity held before the date of acquisition and accounted at fair value in the available-for-sale financial assets, the accumulated change in fair value which is originally included in other comprehensive income shall be transferred to the investment profit or loss for the current period on the combining date. Apart from the long-term equity investments acquired through business combination mentioned above, the long-term equity investments acquired by cash payment is recorded as the cost of investment based on the purchase price actually paid. For long-term equity investments obtained by issuing equity securities, the fair value of the equity securities issued is recorded as the investment cost. For long-term equity investments obtained by exchange of non-monetary assets, the initial investment cost shall be determined in accordance with relevant provisions in the Accounting Standards for Business Enterprises No. 7 Exchange of Non-Monetary Assets. For long-term equity investments obtained by debt restructuring, the initial investment cost shall be determined in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No. 12 Debt Restructuring. Investment in subsidiaries by the Company shall be calculated by cost method, while investment in joint ventures and associates by the Company shall be calculated by equity method. For long-term equity investment calculated by cost method, the cost of long-term equity investment shall be adjusted when the investment is added or recovered. The cash dividends or profits declared to be distributed by the investee shall be recognized as the current investment income. For long-term equity investment calculated by equity method in subsequent measurement, the book value of the long-term equity investment shall be increased or decreased accordingly with the changes in owner’s equity of the investee. The shares of the net profits & losses of the investee attributable to the Company shall be recognized based on the fair value of all identifiable net assets of the investee upon acquisition of the investment in accordance with the accounting policies and accounting period of the Company, after deducting the parts of the profits & losses arising from internal transactions between the associates and joint ventures attributable to the Company calculated on the basis of shareholding ratio and adjusting the net profits of the investee. When disposing the long-term equity investment, the balance between the book value and the acquired price actually shall be included in the current profit and loss. As for long-term equity investments calculated by the equity method, when other changes in owners’ equity other than net gain or loss of the investee are recorded in owners’ equity, the amount initially recorded in owners’ equity is proportionally transferred into current investment income. If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong to package transaction, the Company will conduct accounting treatment for each transaction. In case of package transaction, all transactions shall be calculated as one transaction of disposing subsidiaries and losing control power for accounting treatment. However, the difference between disposal cost of each transaction and book value of long-term equity investment corresponding to equity disposed before losing control power shall be recognized as other comprehensive income and then shall be transferred into current profits and losses of losing control power upon such loss. 23. Investment real estate Leased houses and buildings are included into the investment real estates of the Company. Measurement is carried out by cost model. The investment real estates of the Company are depreciated or amortized by the composite life method. The estimated service life, net residual value ratio and annual depreciation (amortization) rate of the investment real estate are as follows: - 66 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Type Depreciation Estimated residual Annual Houses and buildings period (year) value ratio (%) depreciation rate (%) 24. Fixed assets (1) Recognition conditions Fixed assets of the Company refer to tangible assets with service life over one year, which are held for producing goods, rendering labor services, lease (exclusive of leased houses and buildings) or operation and management. Fixed assets are recognized when the economic benefits related thereto are likely to flow into the Company and their costs can be measured reliably. Fixed assets include houses and buildings, machine and equipment, transportation equipment and other equipment, and the actual cost at the time of acquisition is taken as the entry value. Among them, the cost of purchased fixed assets includes the purchase price, import duties and other related taxes, as well as other expenditures that can be directly attributed to the fixed assets before the fixed assets reach the predetermined serviceable state; the cost of the self-constructed fixed assets consists of necessary expenses incurred before the constructed assets are ready for the intended use; the fixed assets invested by investors shall be accounted for at the value agreed in the investment contract or agreement, or at the fair value if the value agreed in the investment contract or agreement is unfair; for fixed assets obtained by financing lease, the lower of the fair value of rented assets and the present value of the minimum lease payment on the lease start date shall be recorded as the entry value. (2) Depreciation method Type Depreciation Depreciation Residual value rate Annual method period depreciation rate Houses and buildings Straight-line method 20 years 5.00% 4.75% Machine and equipment Straight-line method 10 years 5.00% 9.50% Transportation Straight-line method 5 years 5.00% 19.00% equipment Straight-line method 5 years 5.00% 19.00% Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assets mainly includes renovation/modification expenditure and repair expenditure. When the relevant economic benefits are likely to flow in and the costs can be measured in a reliable manner, they shall be included in the cost of fixed assets. For the replaced part, the book value shall be derecognized. All the other subsequent expenditures are recognized in profit or loss for the current period in which they are incurred. The Company will recheck the estimated service life, the estimated net residual value and the depreciation method of the fixed assets on each balance sheet date. Changes, if any, are regarded as the accounting estimate changes. A fixed asset is derecognized when it is disposed of or no economic benefit is expected from the use or disposal of the asset. The amount of proceeds on sale and transfer of a fixed asset as well as disposal of a scrapped or damaged fixed asset less its carrying amount and related taxes, is recognized in profit and loss for the current period. 25. Construction in process Construction in progress is measured at the actual cost. The self-operating works are measured according to the direct material, direct wage, direct construction cost, etc.; the outsourced works are measured according to the project price payable; the project cost of the equipment installation works is determined according to the value of installed equipment, installation cost, commissioning cost and other expenditures incurred. The cost of construction in process shall also include borrowing costs that should be capitalized. The fixed assets constructed by the Company shall be transferred into fixed assets at the estimated value based on project budget, construction cost and actual project cost from the date when fixed assets get ready for intended use and depreciation of - 67 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 such assets will be accrued in next month. Upon completion of the final accounts formalities, the original value difference of the fixed assets will be adjusted. 26. Borrowing costs Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the Company that can be directly attributable to the acquisition and construction or production of qualifying assets, will be capitalized and included in the relevant asset cost. Other borrowing costs are recognized as expenses based on the amount incurred and included in the current profit and loss. Qualifying assets are defined as assets that require a substantial amount of time (usually more than one year) for construction or production activities before the asset is ready for its intended use or sale. These include fixed assets, intangible assets and inventory. Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costs related to the qualifying assets when the asset expenditure has been incurred, the borrowing costs have been incurred, and the acquisition, construction or production activities necessary to prepare assets for their intended use or sale are in progress. Where the acquisition, construction or production of a qualifying asset are interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. Capitalization of borrowing costs shall cease once the acquisition, construction or production necessary to prepare the qualifying asset for its intended use or sale are complete. Method for calculating the amount of borrowing costs to capitalize: If borrowing funds are used specifically for acquiring, constructing or producing qualifying assets, the amount of interest eligible for capitalization by the Company will be the actual interest costs incurred during the specific borrowing period minus the interest income obtained by depositing or temporarily investing unspent borrowed funds. Where a general borrowing is used for the acquisition and construction or production of qualifying assets, the Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average of the accumulative asset expenditure minus the asset expenditure of the specific borrowing by the weighted average interest rate of the general borrowing used. 27. Biological assets: none 28. Oil & gas assets: none 29. Right-of-use assets The right-of-use asset refers to the right of the Company to use the leased assets as a lessee during the lease term. (1) Initial measurement On the commencement date of the lease term, the Company carries out initial measurement to the use-of-right asset. The cost comprises the following four items: ① initial measurement amount of lease liabilities; ② the amount of lease payment made on or before commencement date of lease term, net of relevant amount of used lease incentives (if any); ③ the initial direct cost incurred (i.e., the incremental cost incurred by reaching the lease agreement); ④ costs expected to be incurred to disassemble and remove the leased assets, restore the site where the leased assets are located or restore the leased assets to the conditions as agreed under the terms of the lease, excluding costs incurred to produce the inventory. (2) Subsequent measurement On the commencement date of the lease term, the Company carries out subsequent measurement to the use-of-right assets in the cost mode, that is, measuring the use-of-right assets by deducting the accrued depreciation amount and accrued impairment loss from the cost. Where the Company remeasures the lease liabilities according to relevant provisions of the lease criterion, the book value of the use-of-right assets shall be adjusted correspondingly. Depreciation of right-of-use assets On the commencement date of the lease term, the provision for depreciation shall be made by the Company to the right-of-use assets. Generally, the depreciation amount of the use-of-right assets is accrued from the month when the lease term starts. The accrued depreciation amount shall be recognized as the cost of relevant assets or current profit or loss according to the purpose of the right-of-use assets. - 68 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 When determining the depreciation method of right-of-use asset, the Company shall make decisions according to the expected consumption method of the economic benefits related to the right-of-use asset and accrue depreciation to the right-of-use asset with the linear method. When determining the depreciation years of the right-of-use assets, the Company shall follow the principles below: If the Company can reasonably determine that the ownership of the leased assets is acquired at the expiration of the lease term, depreciation shall be accrued within the remaining service life of the leased assets; if it is not reasonably certain that the ownership of the leased assets can be acquired at the expiration of the lease term, the leased assets shall be depreciated over the shorter of the lease term and the remaining service life of the leased assets. Impairment of right-of-use assets In case of impairment of use-of-right assets, the Company shall make subsequent depreciation as per the book value of use-of- right assets after the impairment loss is deducted. 30. Intangible assets (1) Valuation method, service life and impairment test The intangible assets of the Company mainly include land use rights, software, trademarks and patents. As for intangible assets that are purchased, the actual cost is composed of the actual price paid and other relevant expenditures. For the intangible assets that are invested by investors, the actual cost is determined by the agreed value in the investment contract or agreement, but if the agreed value is not fair, the fair value will be taken as the actual cost. Intangible assets are amortized using the composite life method, and the classifications and amortization periods of the Company’s intangible assets are as follows: Type Amortization year Land use right 50 years Patents 10 years Software 3--5 years Trademark or domain name 10 years The Company’s land use rights are amortized evenly according to the lease term, starting from the date of transfer. The Company’s patent rights, non-patented technologies, special software use rights and other intangible assets are amortized evenly by stages according to whichever period is the shortest: the asset’s estimated service life, the beneficial period stipulated in the contract, or the period of legal validity. The amount of amortization is included into the current profits and losses or included into the relevant asset cost according to the beneficiaries. At the end of each year, the Company shall review, and adjust in case of changes, the estimated service life and amortization methods used for intangible assets with limited service life; in each accounting period, the Company shall review the estimated service life of intangible assets whose service life is uncertain. Where there is evidence showing that the service life of these intangible assets is limited, the Company shall estimate the service life thereof and amortize these intangible assets during the estimated service life. (2) Accounting policies for internal R&D expenditures The internal R&D expenditures of the Company can be divided into expenditures made at the research stage and those made at the development stage, depending on the nature of the expenditure and the extent of uncertainty on whether the R&D activities will finally form intangible assets. For internally-generated intangible assets, expenditures at the research stage are included in the current profits and losses, and expenditures at the development stage are recognized as asset when the following conditions are met: - 69 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 It is technically feasible to complete the intangible assets so that they can be used or sold. There is an intention to complete and use or sell the intangible assets. There is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets themselves. There is sufficient support in terms of technological, financial and other resources in order to complete the development of the intangible assets, and there is the capability to use or sell the intangible asset. The expenditures made on the intangible assets during the development stage can be measured reliably. Expenditures made in the development stage that fail to meet the above conditions shall be included in the current profits and losses when incurred. The development expenditures previously included in the profit and loss statement will not be recognized as assets in subsequent periods. The expenditures incurred and capitalized at the development stage are recorded as development expenditures on the balance sheet and will be carried over as the intangible asset on the date when the project is ready for its intended use. If the expenditures made at the research and development stages cannot be distinguished, all the R&D expenditures incurred will be fully included in the current profits and losses. The costs of the intangible assets generated by internal development activities only include the total expenditures incurred from the time when the capitalization conditions are met to the point when the intangible assets are used for their intended purposes; for expenditures that are already recorded as such in the profit and loss statement before the capitalization conditions are met during development of the same intangible asset, no adjustments will be made. 31. Impairment of long-term assets On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures and associated companies, including long-term equity investments, fixed assets, projects under construction, and intangible assets with finite service life. If any of the signs listed below are identified, this is an indication that the asset may be impaired and the Company shall conduct an impairment test. Impairment tests are carried out on goodwill and intangible assets with uncertain service life at the end of each period, irrespective of whether there is any indication that the assets may be impaired. If there is difficulty in testing the recoverable amount of a single asset, a test shall be conducted on the asset group which the asset belongs to, or on a combination of asset groups. After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference shall be recognized as an impairment loss. Once such an impairment loss has been confirmed, it shall not be reversed in the subsequent accounting period. The recoverable amount of an asset is the greater of its fair value less the net value of asset disposal and present value of expected future cash flow. The following signs may indicate asset impairment: Current market price of the asset drops substantially, with the drop in price being notably higher than the expected drop over time or due to the asset’s normal use. Significant changes occur in the current period or will occur in the recent future in terms of the economic, technical or legal environment of the operation of an enterprise, and the asset market which have or will have negative impacts on the enterprise. The market interest rate or other market investment return rates have risen in the current period, affecting the enterprise’s discount rate for calculating the asset’s present value of expected future cash flow, and leading to a substantial decrease in recoverable amounts of the assets. There is any amount of evidence to prove the asset has been out of date or the physical asset has been damaged. The asset has been or will be left unused, terminated for use or disposed of ahead of schedule. There is evidence from the enterprise’s internal reports proving that the economic performance of the asset has been lower or will be lower than expected. For example, the net cash flow generated by the assets or operating profits (or losses) realized is much lower (or higher) than the expected amounts; - 70 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Other signs indicating that the asset may have been impaired. 32. Long-term deferred expenses The long-term deferred expenses of the Company refer to the expenses that have been paid, but shall be borne in the current and future periods with an amortization period of more than one year. Moreover, such expenses shall be subject to average amortization within the benefit period. If long-term deferred expense items cannot benefit the future accounting periods, the amortized value of such items yet to be amortized shall be fully transferred into the current profits and losses. 33. Contract liabilities Contract liabilities reflect the obligations of the Company to transfer goods to the client for which consideration is received or receivable from the client. Before the Company transfers goods to the client, and the client has paid the consideration in the contract or the Company has obtained the right of unconditionally collecting the consideration, the contract liabilities are recognized according to the received or receivable amount either at the time of actual payment by the client or when the payment is due―whichever is earlier. 34. Employee remuneration (1) Accounting treatment method of short-term remuneration Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employee welfare, housing funds, labor union funds, employee education funds, medical insurance premiums, industrial injury insurance premiums, and maternity insurance premiums. In the accounting period during which the employee has rendered service, the actual short-term remuneration incurred is recognized as a liability and recorded in the current profits and losses or related asset costs based on the beneficiary. (2) Accounting treatment method of post-employment benefits The post-employment benefits mainly consist of basic endowment insurance, unemployment insurance, enterprise and annuity payments, which are classified into defined contribution plans according to the risks and obligations undertaken by the Company. Moreover, the contributions paid into a separate entity in exchange for the employee’s services during the accounting periods at the balance sheet date are recognized as a liability, and recorded in current profits and losses or relevant asset costs based on the beneficiary. (3) Accounting treatment method of dismissal benefits Dismissal benefits are required in instances when the Company terminates labor relationships with a certain employee prior to the maturity of their labor contract. The Company shall recognize the employee remuneration liabilities incurred from termination benefits and include them into the current profits and losses. This occurs either when the Company cannot unilaterally withdraw the termination benefits provided by the plan on the termination of the labor relationship or dismissal proposal, or when the Company recognizes the costs or expenses related to restructuring the payment of termination benefits-whichever occurs earlier. The compensations paid exceeding one year will be discounted then included in the current profits or losses. (4) Accounting treatment method of other long-term employee benefits Other long-term benefits mainly include long-term incentive plans and long-term benefits. The Company conducts accounting treatment according to relevant provisions of the defined contribution plans. 35. Lease liabilities (1) Initial measurement The Company shall initially measure the lease liabilities according to the present value of the lease payment unpaid on the - 71 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 commencement date of the lease term. 1) Lease payment The lease payment refers to the payment made by the Company to the leaser as for the right of use the leased assets during the lease term, including: ① fixed payment and practical fixed payment, with relevant lease incentive (if any) deducted; ② variable lease payments that are based on an index or rate, which shall be determined at the time of initial measurement based on the index or rate on the commencement date of the lease term; ③ the exercise price of a purchase option if the Company is reasonably certain to exercise that option; ④the amount payable for exercising the option to terminate the lease if the Company intends to exercise the option to terminate the lease during the lease term; ⑤ expected payable amount based on secured residual value provided by the Company. 2) Discount rate In calculating the present value of the lease payments, the Company adopts the interest rate implicit in lease as the discount rate. This interest rate is the interest rate that makes the sum of the present value of the lessor's lease income and the present value of the unsecured residual value equal to the sum of the fair value of the leased assets and the lessor's initial direct costs. If the Company is unable to determine the interest rate implicit in lease, it will adopt the incremental borrowing rate as the discount rate. The incremental loan interest rate is defined as the interest rate that the Company would have to pay to borrow, for a term similar to the duration of the lease and with similar security, the funds necessary to obtain an asset of similar value to the asset by right of use in a similar economic environment. The interest rate is related to the following items: ① the Company's own conditions, namely, the solvency and credit status of the Group; ② the term of the "loan", namely, the lease term; ③ the amount of "borrowed" funds, namely, the amount of the lease liability; ④ the "mortgage condition", namely, the nature and quality of the underlying asset; and ⑤ the economic environment, including the jurisdiction of the lessee, the invoicing currency and the time of signing the contract. On the basis of the bank loan interest rate and taking into account the above factors, the Company calculates the incremental borrowing rate. (2) Subsequent measurement When the lease term commences, the Company shall make subsequent measurement for the lease liabilities on the basis of principles below: ① increase the carrying account of lease liabilities when the interests of lease liabilities are recognized; ② decrease the carrying account of lease liabilities when the lease payment is made; ③ remeasure the book value of lease liabilities when the lease payment is changed due to revaluation, lease change or other reasons. The interest expenses of lease liabilities in each period of the lease term are calculated in accordance with the fixed periodic interest rate, and are included in the current profit or loss, unless capitalization is required. The periodic interest rate refers to the discount rate taken by the Company for initial measurement or the revised discount rate taken by the Company when it is necessary to remeasure the lease liabilities as per the revised discount rate due to lease payment change or lease change. (3) Remeasurement When the following circumstances occur after the commencement of the lease term, the Company shall remeasure the lease liabilities according to the present value of the changed lease payment and adjust the book value of right-to-use assets accordingly. If the book value of the right-to-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the Company shall include the remaining amount in the profits and losses of the current period. ① a change in the practical fixed payment (in this case, the original discount rate is adopted); ② a change in the amount expected to be payable for the residual value of the guarantee (in this case, the original discount rate is adopted); ③ a change in the index or ratio used to determine the lease payment (in this case, the revised discount rate is adopted). ④ a change in the evaluation result of the purchase option (in this case, the revised discount rate is adopted); ⑤ a change in the evaluation results or actual exercise of the option to renew or terminate the lease (in this case, the revised discount rate is adopted). - 72 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 36. Provisions When obligations relating to contingencies such as external guarantee, pending litigation or arbitration, product quality assurance, layoff plans, loss contracts, restructuring obligations, environmental pollution control, commitments, and disposal obligation of fixed assets also meet the following conditions, the Company recognizes it as a liability: the obligation is currently being undertaken by the Company; there is a high possibility that the fulfillment of the obligation will result in the outflow of economic benefits from the enterprise; and the amount of the obligation can be reliably measured. Provisions are initially measured according to the best estimate of the expenditure required to settle the present obligation, taking into account factors relating to contingencies such as risks, uncertainties and the time value of money. Where the time value of money has a significant impact, the best estimate shall be ascertained after discounting the future relevant cash outflow. The book value of provisions is reviewed at the balance sheet date and adjusted to reflect the current best estimate if there is any change. For possible obligations arising from past transactions or events whose existence depends on whether one or more uncertain future events occur; or for present obligations formed by past transactions or events, where the fulfillment of the obligation is not likely to cause an outflow of economic benefits from the Company, or the amount of the obligation cannot be reliably measured, the Company will disclose these possible or present obligations as contingent liabilities. 37. Share-based payment Share-based payment refers to transactions in which equity instruments are granted or liabilities are incurred based on equity instruments in order to obtain services provided by the employees or other parties. Share-based payments are divided into equity- settled and cash-settled share-based payments. Equity-settled share-based payments made in exchange for the service of employees are measured at the fair value on the date at which the equity instrument is granted to employees. Where the right may only be exercised if the service is completed within the waiting period, or if specified performance conditions are met, the fair value shall be included in relevant costs or expenses using the straight-line method and capital reserve shall be increased accordingly, based on the best estimate of the number of vested equity instruments within the waiting period. Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized on the basis of share options or other equity instruments undertaken by the Company. If excisable immediately after the grant, the fair value of the liabilities assumed shall be included in the relevant costs or expenses on the grant date, and the liabilities shall be increased accordingly. If it is necessary to complete the services in the waiting period or achieve the specified performance conditions before the right is excisable, on each balance sheet date of the waiting period, the services acquired in the current period shall be included in the cost or expense based on the best estimation of the excisable right, and the liabilities shall be adjusted accordingly according to the fair values of the liabilities assumed by the Company. On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fair value of the liabilities will be re-measured, with any changes recorded in the profits and losses at the current period. 38. Preferred shares, perpetual bonds and other financial instruments. 39. Income Accounting policies used for the recognition and measurement of income Operating revenues of the Company mainly include the income from sales of goods, rendering labor service and transferring right- of-use assets. Revenue recognition principle - 73 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The Company recognizes the revenue upon fulfillment of its performance obligations within the contract, that is, when the client obtains control of the relevant goods or services. Acquisition of control over relevant goods or services means the ability to manage the use of such goods or the provision of services and to receive almost all economic benefits therefrom. The Company assesses the contract from the commencement date of the contract and recognizes each individual performance obligation included by the contract, and determines if each individual performance obligation will be fulfilled during a certain period or at a certain time point. The performance obligations are to be fulfilled within a specified period once the Company meets one of the following conditions; otherwise, the Company is to fulfill the performance obligations at a specified time point: 1) The client obtains and consumes the economic benefits while the Company fulfills the performance obligations. 2) The client can control goods or services still under construction while the Company is still in the process of fulfilling the performance obligations. 3) The goods generated while the Company is in the process of performing the contract are indispensable, and the Company has the right to collect partial payments for the cumulative performance obligations that have been fulfilled so far within the contract period. If the performance obligations are performed within the specified period, the Company will recognize the revenue within this period in accordance with the progress of the contract’s performance. If the performance progress cannot be reasonably determined and the costs incurred by the Company are expected to be compensated, the revenue will be ascertained according to the costs incurred, until the performance progress can be reasonably determined. If the performance obligations are performed at the specified time point, the Company will recognize the revenue at the time when the client obtains control over the relevant goods or services. In judging whether the client has obtained control over goods or services, the Company shall consider the following signs: 1) The Company has the current right to collect payment for the goods or services. 2) The Company has transferred the legal ownership of the goods to the client. 3) The Company has transferred physical possession of the goods to the client. 4) The Company has transferred the main risks and rewards of ownership of the goods to the client. 5) The customer has accepted the goods or services, etc. The Company lists the right to receive considerations for transfer of goods or services to the customer as a contract asset, for which the impairment will be withdrawn on the basis of expected credit loss. The right of the Company to unconditionally receive considerations from the customer is listed as receivables. The Company presents the obligation to transfer goods or services to the customer for considerations received or receivable from the customer as a contract liability. Revenue measurement principle 1) If there are two or more performance obligations in the contract, the Company will apportion the transaction price to each single performance obligation according to the relative proportion of the separate selling price of the goods or services promised by the single performance obligation at the beginning of the contract, and the revenue shall be measured according to the transaction price apportioned to each single performance obligation. 2) The transaction price refers to the amount of consideration that the Company expects to collect as a result of the transfer of goods or services to the client, excluding the amount collected by third parties. The transaction price recognized by the Company shall not exceed the amount of the recognized accumulative revenue which is not likely to significantly turn back when relevant uncertainty is eliminated. The expected amount to be returned to the client will be listed as a liability and not be included in the transaction price. - 74 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 3) If there is significant financing in the contract, the Company shall determine the transaction price according to the amount payable in cash when the client obtains control over the goods or services. The difference between the transaction price and the contract consideration shall be amortized by the effective interest method during the contract period. On the contract commencement date, if the Company estimates that the time between the client’s acquisition of control over goods or services and the payment of the price by the client will not exceed one year, the significant financing in the contract shall not be considered. Specific method for revenue recognition 1) Revenue recognized by time point Selling electric appliances, fittings and materials by the Company is the performance obligation at a time point. Revenue recognition conditions for goods made for domestic market: The Company has delivered the goods to the customer according to the contract terms and the customer has received the product; the payment has been collected or the receipt voucher has been provided and relevant economic profits might flow into the Company; main risks and remuneration as for the ownership of the goods have been transferred; and legal ownership and control right of the goods have been transferred. Revenue recognition conditions for exported commodity: The Company has declared the product to the customs and the product has been delivered according to the contract terms; the bill of lading has been obtained, the payment has been collected or the receipt voucher has been provided and relevant economic profits might flow into the Company; main risks and remuneration as for the ownership of the commodity have been transferred; and legal ownership and control right of the commodity have been transferred. 2) Revenue recognized by performance progress The technical service revenue of the Company and the business contract between the operating lease and the customer are the performance obligations to be performed within a period, for which the revenue shall be recognized according to the performance progress. Differences in accounting policies for revenue recognition due to different operating models for the same type of business 40. Government grants The government grants of the Company include fiscal appropriation. Government grants relating to assets refer to government grants obtained by the Company for purchasing and acquiring long-term assets or forming long-term assets by other ways. The income-related government grants refer to those other than asset-related grants. In case the purpose of a grant is not expressly stipulated in the government document, the Company will categorize the grant according to these above principles. If it is difficult to categorize the grant, it will be categorized as the income-related government grant. If a government grant is a monetary asset, it will be measured at the amount received; for the grant appropriated according to the fixed quota or for the grant where there is concrete evidence showing that the Company is qualified to receive governmental financial support and will be able to receive the support by the end of the accounting period, the grant will be measured at the receivable; if the government grant is a non-monetary asset, it will be measured at the fair value, or measured at its nominal amount (RMB 1) if the fair value cannot be obtained reliably. The government grants relating to assets are recognized as deferred income, and the government subsidies relating to assets recognized as deferred income are included into the current losses and profits according to the average distribution method within relevant asset service life. If the relevant asset has been sold, transferred, retired or damaged before the end of the service life, the balance of the relevant deferred income that has not been allocated will be transferred into the current profit and loss of asset disposal. - 75 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Government grants relating to income that compensate future costs, expenses or losses are recognized as deferred income, and recognized in profit or loss in reporting the related costs, expenses or losses. The government grants relating to the ordinary activities are included in other income or deducted against relevant costs and expenses according to the nature of the accounting event, otherwise, they are included in non-operating income. Government grants unrelated to daily activities will be included in non-operating income. If the Company obtains the subsidized loan as a result of preferential financial policy, there will be two situations: the Ministry of Finance appropriates the interest subsidy to the lending bank, or the Ministry of Finance directly appropriates the subsidy to the Company, and the accounting treatment for each of these situations is as follows: Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank provides the Company with the loan at a discounted interest rate, the Company will use the actual amount of loan received as the book value of the loan, and calculate the relevant borrowing costs based on the principal of the loan and the interest rate. Where the Ministry of Finance directly appropriate the interest subsidy to the Company, the Company will deduct the corresponding interest subsidy against the borrowing costs. Where the governmental grants recognized by the Company need to be returned, the accounting treatment will be done as follows in the period they are returned: 1) Where the book value of relevant assets is deducted at the time of the initial recognition, the book value of assets will be adjusted. 2) Where there is any deferred income concerned, the book balance of the deferred income will be deducted, but the excessive part will be included in the current profit or loss. 3) For other circumstances, the government grants will be directly included in the current profit or loss. 41. Deferred income tax assets/deferred income tax liabilities Deferred income tax assets and deferred income tax liabilities of the Company are calculated and recognized based on the differences (temporary differences) between the tax base and the book value of the assets or liabilities. For the deductible loss and tax credits that can be deducted annually in the subsequent years according to tax laws, the corresponding deferred income tax assets are recognized. Where the temporary differences arise from the initial recognition of goodwill, the corresponding deferred income tax liabilities are not recognized. No deferred tax asset or deferred tax liability is recognized where the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination affect neither accounting profit nor taxable profit (or deductible loss). On the balance sheet date, the deferred income tax asset and liability are measured at the applicable tax rates during the period when the asset is realized or the liability is settled as expected. The Company recognizes the deferred income tax asset to the extent that it is probable that the taxable income will be available against which the deductible temporary differences, deductible losses and tax credits can be deducted. 42. Lease (1) Accounting method for operating lease (1) Identification of lease Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain period to obtain consideration contracts. On the commencement date of the contract, the Company assesses whether the contract serves as the lease or includes the lease. If one party to the contract transfers the right to control one or more identified assets during a certain period in exchange for consideration, such contract is or includes lease. To determine whether the contract has transferred the right to control the use of the identified assets in a certain period of time, the Company assesses whether the customer in the contract is entitled to receive almost all the economic benefits arising from the use of the identified assets during the use period and is entitled to manage the use of the identified assets during the use period. - 76 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 If a number of separate leases are contained in one contract, the Company will split the contract and adopt accounting methods to each lease on an individual basis. If a contract includes both lease and non-lease components, the Company will separate the lease from the non-lease component before accounting treatment. (2) The Company serves as the lessee 1) Lease recognition At the commencement of the lease term, the right-of-use assets and lease liabilities shall be recognized for the lease by the Company. For the recognition and measurement of right-to-use assets and lease liabilities, please refer to the items of "Right-to-use assets" and "Lease liabilities" in notes. 2) Lease change Lease change refers to the change in lease scope, lease consideration and lease term beyond the terms of the original contract, including increasing or terminating the right to use one or more leased assets and extending or shortening the lease term stipulated in the contract. The effective date of lease change refers to the date when the Parties reach the agreement on lease change. When a change happens to the lease and meets the following conditions, the Company will treat it as a separate lease: ① the lease change expands the lease scope or extends the lease term by increasing one or more use rights to the leased assets; ② the increased consideration is equivalent to the single price for the expanded portion of lease scope or extended portion of lease term adjusted according to the contract. In case where accounting treatment is not made for lease change as a single lease, on the effective date of lease change, the Company will appropriate the consideration of the changed contract according to the relevant provisions of the lease criteria and redefine the updated lease term. In addition, the Company will discount the changed lease payment according to the revised discount rate, so as to remeasure the lease liabilities. In calculating the present value of the lease payment after the change, the Company uses the interest rate implicit in lease for the remaining lease term as the discount rate. if the interest rate implicit in lease for the remaining lease term cannot be determined, the incremental borrowing interest rate of the lessee on the effective date of lease change shall be used as the discount rate by the Company. With regard to the impact of the above adjustment of lease liabilities, the Company adopts accounting methods in the following situations: ① In the event that the lease scope is narrowed down or the lease term is shortened as a result of the lease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gains or losses from the partial or complete termination of the lease shall be included into the current loss and profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjust the book value of the right-of-use assets accordingly. 3)Short-term leases and leases of low-value assets For short-term leases with a lease term of no more than 12 months and low-value asset leases at a low value when individual leased assets are brand new, the Company chooses not to recognize the right-of-use assets and lease liabilities. Lease payments under short- term leases and leases of low-value assets are recognized by the Company on a straight-line basis or by other systematic and reasonable methods over the lease term, and included in either the cost of the related asset or the current profit or loss. (3) The Company serves as the lessor On the basis that (1) the contract is assessed to be a lease or include a lease, the Company, as the lessor, divides the lease into financial lease and operating lease at the commencement of the lease. A lease that transfers in substance almost all the risks and rewards incident to ownership of a leased asset is classified as a financial lease by the lessor. A lease other than the financial lease is an operating lease. The Company usually classifies a lease as a financial lease if one or more of the following situations exist: ① the ownership of the leased asset is transferred to the lessee at the expiration of the lease term; ② the lessee has the right to choose to purchase the leased asset; the established purchase price is expected to be much lower than the fair value of the leased asset at the time of the expected - 77 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 exercise of the option, and hence it can be reasonably determined that the lessee will exercise this right of choice on the inception of lease; ③ the lease term accounts for a substantial proportion (no less than 75%) of the service life of the leased asset, notwithstanding that the ownership of the asset will not be transferred; ④ on the inception of lease, the present value of the lease receipts is almost equal to the fair value of the leased asset (no less than 90% of the fair value of the leased asset); and ⑤ the leased assets are of a specialized nature that only the lessee can use them without making major modifications. The Company may also classify a lease as a financial lease if one or more of the following signs exist: ① if the lessee cancels the lease, the resulting loss to the lessor shall be borne by the lessee; ② the gain or loss arising from the fluctuation in the fair value of the residual value of the asset shall be attributable to the lessee; and ③ the lessee is able to continue the lease to the next period at a rent much lower than the market level. (2) Accounting methods of financial lease 1) Accounting methods for financial lease Initial measurement On the commencement date of lease term, the Company recognizes financial lease receivables for financial lease and derecognizes financial lease assets. Upon initial measurement of financial lease receivables, the Company takes net investment in lease as entry value of financial lease receivables. Net investment in lease is the sum of unsecured residual value and the present value of outstanding lease receipts discounted on interest rate implicit in lease on the commencement date of the lease term. Lease receipts refer to the amount that the lessor shall collect from the lessee for transferring the right to use the leased assets during the lease term, including: ① the amount of fixed payment and substantial fixed payment to be paid by the lessee, net of relevant amount of lease incentives if any; ② variable lease payments that are based on an index or rate, which shall be determined at the time of initial measurement based on the index or rate on the commencement date of the lease term; ③ exercise price of call option, given that the lessee will reasonably exercise such option; ④ amount payable by the lessee for exercising the option to terminate the lease, if it is indicated during the lease term that the lessee will exercise the option to terminate the lease; ⑤ The residual value of the guarantee provided to the lessor by the lessee, a party related to the lessee and an independent third party with the financial ability to meet the guarantee obligation. Subsequent measurement The Company calculates and recognizes the interest income in each period of the lease term according to the fixed periodic rate. Such periodic rate refers to the implicit discount rate used to determine the net investment in the lease (in case of sublease, the discount rate of the original lease is adopted if the interest rate implicit in lease of the sublease cannot be determined (adjusted according to the initial direct cost related to sublease)), or the revised discount rate determined according to the relevant provisions when the change of the financial lease has not been treated as a separate lease for accounting and it is satisfied that the lease will be classified as the financial lease if the change takes effect at the beginning of the lease. Accounting treatment of lease change When a change happens to the financial lease and meets the following conditions, the Company will treat it as a separate lease: ① the change expands the lease scope by increasing one or more use rights to the leased assets; ② the increased consideration is equivalent to the single price for the expanded portion of lease scope adjusted according to the contract. If such a change to the financial lease is not accounted for as a separate lease and the condition is satisfied that if the change becomes effective on the commencement date of the lease, the lease is classified as an operating lease, the Company will account for it as a new lease from the effective date of the lease change and regard the net lease investment prior to the effective date of the lease change as the book value of the leased asset. 2) Accounting methods for operating lease Treatment of rent - 78 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The Company adopts the straight-line method/other systematic and reasonable methods to recognize the lease receipts from operating leases as rental income during all periods within the lease term. Incentive measures provided If a rent-free period is provided, total rent shall be amortized by adopting the straight-line method/other systematic and reasonable methods within the lease term not excluding the rent-free period, and the rental income shall be recognized in the rent-free period. Certain costs incurred by the lessee, if undertaken by the Company, shall be excluded from total rental income and the balance of rental income after deducting these costs shall be amortized within the lease term. Initial direct costs The initial direct costs incurred by the Company related to the operating lease shall be capitalized to the cost of leased underlying asset and shall be included in current profits and losses on the same basis as recognition of rental income during the lease term. Depreciation For fixed assets included in assets under operating leases, accrual depreciation shall base on the depreciation policy adopted by the Company for similar assets. Other assets under operating leases shall be amortized in a systematic and reasonable manner. Variable lease payments Variable lease payments acquired by the Company in connection with operating leases that are not included in the lease receipts are recognized in the current profits and losses when actually incurred. Change of operating lease In case of changes in the operating lease, the Company will treat it as a new lease as of the effective date of the change, and the lease advance or receivables related to the lease before the change will be regarded as the amount received from the new lease. 43. Other significant accounting policies and accounting estimates When preparing the financial statements, the management of the Company needs to use estimates and assumptions that will have an impact on the application of accounting policies and the amount of assets, liabilities, income and expenses. The actual situation may be different from these estimates. The management of the Company continuously evaluates the key assumptions and uncertainties involved in the estimates. The impact of a change in accounting estimates is recognized in the current and future periods of the change. The following accounting estimates and key assumptions pose a risk of significant adjustment to the book value of assets and liabilities in future periods: (1) Impairment of financial assets The expected credit loss model is used to evaluate the impairment of financial instruments. The application of the expected credit loss model requires significant judgments and estimates, and all reasonable and well-founded information, including forward-looking information, should be considered. When making such judgments and estimates, the Company deduces the expected changes in the debtor's credit risk based on historical data combined with economic policies, macroeconomic indicators, industry risk, external market environment, technical environment, changes in customer conditions and other factors. (2) Provision for impairment of inventories Basis for determining net realizable value of inventories: The net realizable value of merchandise inventories or held-for-sale materials are determined by their estimated selling price deducted by estimated selling expenses and related taxes. The net realizable value of inventories held for the execution of sales contracts or labor contracts is calculated on the basis of the contract price. If the quantity of inventories held by the Company is more than the quantity ordered in a sales contract, the net realizable value of the excess inventories is calculated on the basis of the general sales price. Methods of provision for inventory depreciation: At the end of accounting period, inventory is valuated at cost or net realizable value, whichever is lower; at the end of accounting period, on the basis of a comprehensive inventory count, provision for inventory depreciation reserves is made for the part of the cost uncollectible of inventory due to damage, fully or partially out of date or selling - 79 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 price lower than the cost, etc. If the factors affecting the write-down of inventory value in previous years have disappeared, the amount of write-down shall be restored, and reversed within the original provision for inventory depreciation, and the amount reversed shall be included in the current profits or losses. (3) Accounting estimates for provision for impairment of goodwill The Company conducts an impairment test on goodwill every year. The recoverable amount of the asset group and the asset group combination that include goodwill are the present values of their estimated future cash flows, the calculation of which requires the use of accounting estimates. If the management revises the gross profit margin used in the future cash flow calculation of the asset group and the asset group combination and the revised gross profit margin is lower than the current one, the Company shall increase the provision for impairment of goodwill. If the management revises the pre-tax discount rate applied to the discounted cash flow, and the revised pre-tax discount rate is higher than the current one, the Company shall increase the provision for impairment of goodwill. If the actual gross profit margin or pre-tax discount rate is higher or lower than the management's estimates, the Company cannot reverse the goodwill impairment loss originally accrued. (4) Accounting estimates for provision for impairment of fixed assets The Company conducts impairment tests on buildings, machinery and equipment and other fixed assets that show signs of impairment on the balance sheet date. Recoverable amount of fixed assets Accounting estimates shall be used for the calculation of the higher of the present value of its estimated future cash flows and the net amount of the fair value of the assets minus the disposal expenses. If the management revises the gross profit margin used in the future cash flow calculation of the asset group and the asset group combination, and the revised gross profit margin is lower than the current one, the Company shall increase the provision for impairment of fixed assets. If the management revises the pre-tax discount rate applied to the discounted cash flow, and the revised pre-tax discount rate is higher than the current one, the Company shall increase the provision for impairment of fixed assets. If the actual gross profit margin or pre-tax discount rate is higher or lower than the management estimates, the Company cannot reverse the original provision for impairment of fixed assets. (5) Accounting estimates for the recognition of deferred income tax assets The estimation of deferred income tax assets requires the estimates of taxable income and the applicable tax rate for each future year. The realization of deferred income tax assets depends on whether it is probable that sufficient taxable income will be available to the Group in the future. Changes in future tax rates and the reversal time of temporary differences may also affect income tax expenses (income) and the balance of deferred income tax. Changes in the above estimates may lead to significant adjustments to deferred income tax. (6) Service life of fixed assets and intangible assets The Company shall review the expected service life of fixed assets and intangible assets at least at the end of each year. The expected service life is determined by the management based on the historical experience of similar assets, referring to the estimates commonly used in the same industry and in combination with expected technological updates. When there is a significant change in previous estimates, depreciation expenses and amortization expenses for future periods are adjusted accordingly. - 80 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 44. Significant accounting policy and accounting estimate changes (1) Significant accounting policy changes □Applicable √Not applicable (2) Significant accounting estimate changes □Applicable √Not applicable 45. Others VI. Taxation 1. Main tax categories and tax rates Category Tax base Tax rate VAT Income from sales of goods 13% VAT Income from provision of technical 6% VAT servicesincome 5% City maintenance and construction tax Turnover tax payable 7% Education surcharge Turnover tax payable 3% Local education surcharge Turnover tax payable 2% House tax 70% of the original value of the house 1.2% House tax Rental income 12% Land use tax Total land area RMB 5-10/m2 Corporate income tax Taxable income 15%, 25%, 20% Disclosure of taxpayers with different corporate income tax rates Name of taxpayer Income tax rate Hangzhou Robam Appliances Co., Ltd. 15% Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 15% Zhejiang Cookingfuture Technology Co., Ltd. 25% Beijing Robam Appliances Sales Co., Ltd. 25% Shanghai Robam Appliances Sales Co., Ltd. 25% Hangzhou MingQi Electric Co., Ltd. 25% De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. 25% Hangzhou Robam Fuchuang Investment Management Co., Ltd. 20% Hangzhou Jinhe Electric Appliances Co., Ltd. 20% 2. Preferential tax policy Preferential income tax policy The Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR202033007142) jointly issued by Zhejiang Provincial Department of Science and Technology, Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, State Taxation Administration, and Local Taxation Bureau of Zhejiang Province on December 1, 2020. The certificate is valid for 3 years. According to the relevant provisions, after being identified as a high-tech enterprise, the Company will enjoy the relevant preferential policies of the state on high-tech enterprises for three consecutive years (i.e., the Company is entitled to the preferential corporate income tax policy from January 1, 2020 to December 31, 2022), and the corporate income tax shall be levied at the rate of 15%. The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. (hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise (Certificate No.: GR201933002261) jointly issued by Zhejiang Provincial Department of Science and Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State Taxation Administration on December 4, 2019. After the recognition, it will enjoy the preferential tax policy of the state on high-tech enterprises for three consecutive years (i.e., it is entitled to the preferential corporate income tax policy from January 1, 2019 to - 81 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 December 31, 2021), and its corporate income tax shall be levied at the tax rate of 15%. According to the Announcement ([2017] No. 24) of the State Taxation Administration: Notice of the State Taxation Administration on Issues Related to the Implementation of Preferential Income Tax Policies for High-tech Enterprises, prior to passing the next recognition, Shengzhou Kinde will temporarily prepay at a tax rate of 15% for corporate income tax in the year in which the qualification as a high-tech enterprise expires, i.e., 2022. According to the Announcement ([2021] No. 8) of the State Taxation Administration, for Hangzhou Robam Fuchuang Investment Management Co., Ltd. and Hangzhou Jinhe Electric Appliances Co., Ltd., subsidiaries of the Company, the part of the annual taxable income of small low-profit enterprises not exceeding RMB 1 million shall be reduced to 12.5% to be levied at the tax rate of 20% for the corporate income tax. Preferential VAT policy According to the Notice of the Ministry of Finance and the State Taxation Administration on the Value-added Tax Policy for Software Products (CS [2011] No. 100), the Company's embedded software products are entitled to immediate VAT refund. 3. Others VII. Notes to Items in the Consolidated Financial Statements 1. Cash and cash equivalents In RMB Item Ending balance Beginning balance Cash in hand 122,392.82 80,944.99 Deposit in bank 3,326,702,947.52 3,718,304,060.33 Other cash and cash equivalents 73,962,698.57 83,816,341.23 Total 3,400,788,038.91 3,802,201,346.55 Other description Note: The other cash and cash equivalents at the end of the accounting period are RMB 73,962,698.57, including the banker’s L/G margin of RMB 57,695,282.91, and the bill acceptance margin of RMB 15,942,911.24, the use of which are both restricted, as well as the Alipay balance of RMB 311,187.79 and WeChat balance of RMB 13,316.63, which are unrestricted funds to be withdrawn at any time. Restricted cash and cash equivalents Item Ending balance Beginning balance Banker’s L/G margin and bill acceptance margin 73,638,194.15 82,212,526.20 Total 73,638,194.15 82,212,526.20 2. Financial assets held for trading In RMB Item Ending balance Beginning balance Financial assets measured at fair value through profit or loss 2,884,760,000.00 2,872,312,500.00 Including: financial products 2,884,760,000.00 2,872,312,500.00 Including: - 82 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Total 2,884,760,000.00 2,872,312,500.00 3. Notes receivable (1) Classified presentation of notes receivable In RMB Item Ending balance Beginning balance Banker’s acceptance 900,887,049.22 862,581,158.56 Trade acceptance 407,159,767.07 467,612,736.26 Total 1,308,046,816.29 1,330,193,894.82 In RMB Ending balance Beginning balance Book Book balance Bad debt reserve Book balance Bad debt reserve Type value Book Percentag value Percentag Percentage e of Percentage e of Amount Amount Amount Amount (%) provision (%) provision Notes receiva ble 108,894 7.83% 63,437, 58.26% 45,456, 269,463 17.09% 224,066 83.15% 45,396, with ,455.48 739.55 715.93 ,729.35 ,803.50 925.85 an individ ual bad debt provisi on Including: Provisi 108,894 7.83% 63,437, 58.26% 45,456, 269,463 17.09% 224,066 83.15% 45,396, on for ,455.48 739.55 715.93 ,729.35 ,803.50 925.85 bad debts by individual item Notes receiva 1,281,6 1,262,5 1,307,0 1,284,7 ble 92.17% 19,037, 1.49% 82.91% 22,221, 1.70% 27,103. 002.70 90,100. 18,853. 884.76 96,968. with a 06 36 73 97 collect ive bad debt provisi on Including: - 83 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Banker 900,887 64.79% 900,887 862,581 54.72% 862,581 ’s ,049.22 ,049.22 ,158.56 ,158.56 accept ance Trade 380,740 27.38% 19,037, 5.00% 361,703 444,437 28.19% 22,221, 5.00% 422,215 accept ,053.84 002.70 ,051.14 ,695.17 884.76 ,810.41 ance 1,390,5 1,308,0 1,576,4 1,330,1 100.00% 82,474, 5.93% 100.00% 246,288 15.62% Total 21,558. 46,816. 82,583. 93,894. 742.25 ,688.26 54 29 08 82 Provision for bad debts by individual item: In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Reasons for provision Unit 1 53,694,250.56 10,738,850.10 20.00% Debt rollover Unit 2 46,862,486.65 46,862,486.65 100.00% Debt default Unit 3 5,183,343.00 3,628,340.10 70.00% Full recovery is expected Unit 4 995,659.17 696,961.42 70.00% to berecovery is expected Unit 5 1,459,193.10 1,021,435.17 70.00% to berecovery is expected Unit 6 455,562.75 318,893.93 70.00% to berecovery is expected Unit 7 243,960.25 170,772.18 70.00% to berecovery is expected Total 108,894,455.48 63,437,739.55 to be difficult Collective bad debt provision: Combination of bank acceptance In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Banker’s acceptances 900,887,049.22 0.00 combined Total 900,887,049.22 0.00 Collective bad debt provision: Combination of trade acceptance In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Trade acceptances combined 380,740,053.84 19,037,002.70 5.00% Total 380,740,053.84 19,037,002.70 If the provision for bad debts of notes receivable is made according to the general model of expected credit loss, please refer to the disclosure methods of other receivables to disclose the relevant information about the provision for bad debts: □Applicable √ Not applicable (2) Bad debt provision, and its recovery or reversal in the current period Provision for bad debts in the current period: In RMB Amount of change in the current period Type Beginning Ending balance Provision Recovery or Write-off Others balance reversal - 84 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 - 246,288,688. 155,207,942. 8,606,003.69 82,474,742.2 Trade acceptance 26 32 5 - Total 246,288,688. 155,207,942. 8,606,003.69 82,474,742.2 26 32 5 Significant recoveries or reversals of provisions for bad debts during the reporting period: □Applicable √Not applicable (3) Notes receivable that has been endorsed or discounted by the Company and not due on the balance sheet date at the end of the period In RMB Item Ending amount derecognized Ending amount not derecognized Trade acceptance 0.00 2,651,069.04 Total 0.00 2,651,069.04 (4) Notes transferred to accounts receivable by the Company due to drawer’s non-performance at the end of the period In RMB Item Amount of accounts receivable transferred at the end of the period Trade acceptance 193,510,242.90 Total 193,510,242.90 5. Accounts receivable (1) Classified disclosure of accounts receivable In RMB Ending balance Beginning balance Type Book balance Bad debt reserve Book balance Bad debt reserve Book value Book value Percentage Percentage Percentage Percentage Amount Amount Amount Amount (%) of provision (%) of provision Accounts receivabl e with 793,829 706,359 87,470, 630,075 553,584 76,490, individual 32.42% 88.98% 28.04% 87.86% ,431.62 ,418.12 013.50 ,052.06 ,090.07 961.99 bad debt provision s Including: Provision for bad debts by 793,829 32.42% 706,359 88.98% 87,470, 630,075 28.04% 553,584 87.86% 76,490, individual ,431.62 ,418.12 013.50 ,052.06 ,090.07 961.99 item Accounts receivabl e with a 1,655,0 1,552,8 1,617,3 1,521,2 102,189 96,145, collective 79,442. 67.58% 6.17% 90,441. 47,143. 71.96% 5.94% 01,898. ,001.34 244.24 bad debt 40 06 15 91 provision Including: - 85 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Multiple accounts receivable which are grouped by expected credit loss based on 1,655,079,4 102,189,0 1,552,890,4 1,617,347,1 96,145, 1,521,201,8 67.58% 6.17% 71.96% 5.94% their age 42.40 01.34 41.06 43.15 244,24 98.91 characterist ics and with a collective bad debt provision 2,448,9 1,640,3 2,247,4 1,597,6 Total 08,874. 100.00% 808,548 33.02% 60,454. 22,195. 100.00% 649,729 28.91% 92,860. 02 ,419.46 56 21 ,334.31 90 Provision for bad debts by individual item: Provision for bad debts of receivables by individual item In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Reasons for provision Unit 1 613,202,711.42 613,202,711.42 100.00 Debt default Unit 2 68,795,196.31 13,759,039.26 20.00 Debt rollover Unit 3 27,760,507.34 19,432,355.14 70.00% Full recovery is expected to be difficult Unit 4 20,766,804.51 14,536,763.16 70.00% Full recovery is expected to be difficult Unit 5 19,980,052.93 13,986,037.05 70.00% Full recovery is expected to be difficult Unit 6 14,247,715.67 9,973,400.97 70.00% Full recovery is expected to be difficult Unit 7 9,243,574.60 6,470,502.22 70.00% Full recovery is expected to be difficult Unit 8 8,070,171.98 5,649,120.39 70.00% Full recovery is expected to be difficult Unit 9 3,654,431.88 2,558,102.32 70.00% Full recovery is expected to be difficult Unit 10 2,887,210.93 2,021,047.65 70.00% Full recovery is expected to be difficult Unit 11 1,773,645.05 1,773,645.05 100.00% Debt default Unit 12 3,447,409.00 2,996,693.49 86.93% Expected to be exposed to recovery risk Total 793,829,431.62 706,359,418.12 Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics, their bad debts are provided for collectively. In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Within 1 year 1,372,778,421.26 68,638,921.06 5.00% 1-2 years 261,066,239.87 26,106,623.99 10.00% 2-3 years 14,024,540.13 2,804,908.03 20.00% 3-4 years 4,816,068.57 2,408,034.30 50.00% 4-5 years 818,293.02 654,634.41 80.00% More than 5 years 1,575,879.55 1,575,879.55 100.00% Total 1,655,079,442.40 102,189,001.34 If the bad debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the - 86 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 disclosure methods of other receivables to disclose the relevant information about the provision for bad debts: □Applicable √Not applicable Disclosed based on the aging of receivables In RMB Aging Ending balance Within 1 year (including 1 year) 1,585,366,431.89 Within 1 year (including 1 year) 1,585,366,431.89 1-2 years 686,217,532.78 2-3 years 165,746,625.01 More than 3 years 11,578,284.34 3-4 years 7,090,417.37 4-5 years 966,963.42 More than 5 years 3,520,903.55 Total 2,448,908,874.02 (2) Bad debt provision, and its recovery or reversal in the current period Provision for bad debts in the current period: In RMB Amount of change in the current period Type Beginning balance Ending balance Provision Recovery or reversal Write-off Others Bad debt 649,729,334.31 185,461,367.93 26,642,282.78 808,548,419.46 provision for accounts receivable Total 649,729,334.31 185,461,367.93 26,642,282.78 808,548,419.46 (3) Top five debtors with the biggest ending balances of receivables In RMB Ending balance of accounts Proportion in the total ending Ending balance of bad debt Unit balance of accounts receivable receivable reserves Unit 1 614,703,488.15 25.10% 37,386,355.40 Unit 2 422,007,941.34 17.23% 422,007,941.34 Unit 3 95,125,955.20 3.88% 95,125,955.20 Unit 4 68,013,931.65 2.78% 3,400,696.58 Unit 5 55,059,796.18 2.25% 2,752,989.81 Total 1,254,911,112.52 51.24% 7. Advance payments (1) Advance payments presented by aging In RMB Ending balance Beginning balance Aging Amount Percentage (%) Amount Percentage (%) - 87 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Within 1 year 184,421,637.20 98.78% 129,823,235.88 98.98% 1-2 years 2,143,102.72 1.15% 1,308,725.59 1.00% 2-3 years 56,337.70 0.03% 30,069.48 0.02% More than 3 years 74,945.85 0.04% Total 186,696,023.47 131,162,030.95 8. Other receivables In RMB Item Ending balance Beginning balance Other receivables 105,383,151.12 73,487,381.46 Total 105,383,151.12 73,487,381.46 (1) Other receivables 1) Classification of other receivables by nature In RMB Initial book balance at the beginning of the Nature of receivable Book balance at the end of the period period Security/guarantee deposits 37,642,042.10 48,646,642.67 Collections by a third party 61,097,321.97 39,389,486.99 Cash reserve 12,223,382.79 2,785,329.49 Withholdings 6,919,436.49 3,224,265.49 Others 4,087,739.14 57,881.26 Total 121,969,922.49 94,103,605.90 2) Bad debt provision In RMB Phase I Phase II Phase III Expected credit loss Bad debt reserve Expected credit loss Expected credit loss Total over the entire duration over the next 12 over the entire duration (without credit months (with credit impairment) impairment) Balance on January 1, 20,616,224.44 20,616,224.44 2022 Balance on January 1, 2022 in the current period Provision in the current -4,029,453.07 -4,029,453.07 period Balance on June 30, 2022 16,586,771.37 16,586,771.37 Changes in the book balance with significant change in amount of the loss provision in the current period □Applicable √ Not applicable Disclosed based on the aging of receivables In RMB Aging Ending balance Within 1 year (including 1 year) 98,365,217.59 Within 1 year (including 1 year) 98,365,217.59 - 88 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 1-2 years 8,072,690.63 2-3 years 2,812,051.27 More than 3 years 12,719,963.00 3-4 years 4,201,000.60 4-5 years 1,729,913.50 More than 5 years 6,789,048.90 Total 121,969,922.49 3) Bad debt provision, and its recovery or reversal in the current period Provision for bad debts in the current period: In RMB Type Beginning Amount of change in the current period Ending balance balance Provision Recover Write-off Others y or reversal Bad debt 20,616,224.44 -4,029,453.07 16,586,771.37 reserve for other receivables Total 20,616,224.44 -4,029,453.07 16,586,771.37 4) Top five debtors with the biggest ending balances of other receivables In RMB Proportion in the total ending Ending balance of Unit Nature of receivable Ending balance Aging balance of other bad debt provision accounts receivable Unit 1 Collections by a 27,716,044.47 22.72 1,385,802.22 third party Within 1 year Unit 2 Withholdings 5,416,389.09 Within 1 year 4.44 270,819.45 Unit 3 Security/guarantee 4,928,000.00 4.04 4,928,000.00 deposits More than 5 years Unit 4 Security/guarantee 1,660,000.00 1.36 83,000.00 deposits Within 1 year Unit 5 Security/guarantee 1,175,000.00 0.96 292,623.25 deposits 0-4 years Total 40,895,433.56 33.53 6,960,244.92 9. Inventory (1) Classification of inventories In RMB Ending balance Beginning balance - 89 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Provision for Provision for Item Book balance obsolete Book value Book balance obsolete Book value inventory or for inventory or impairment of the for impairment cost of contract of the cost of performance contract performance Raw 134,841,725.92 134,841,725.92 161,795,174.65 161,795,174.65 materials Products in 109,408,799.37 109,408,799.37 116,573,107.77 116,573,107.77 process 28,819,579.6 Merchandise 548,931,655.53 19,005,263.10 529,926,392.43 529,957,331.64 501,137,752.04 inventory 0 Contract 47,737,003.06 47,737,003.06 48,844,764.12 48,844,764.12 performance costs 51,220,027.9 Goods 1,011,705,771.92 36,978,330.88 974,727,441.04 971,605,585.98 920,385,558.00 shipped in 8 transit Low-cost consumab 28,447,019.21 28,447,019.21 23,495,275.67 23,495,275.67 les and packing materials 1,825,088,381.0 1,852,271,239. 80,039,607.5 1,772,231,632.2 Total 1,881,071,975.01 55,983,593.98 3 83 8 5 (2) Provision for obsolete inventory or for impairment of the contract performance costs In RMB Increased amount in the current Decreased amount in the Item Beginning balance period current period Ending balance Provision Others Reversals or write- Others off Merchandise 28,819,579.60 -9,814,316.50 19,005,263.10 inventory Goods shipped 51,220,027.98 -14,241,697.10 36,978,330.88 in transit Total 80,039,607.58 -24,056,013.60 55,983,593.98 (3) Explanation that the ending balance of inventory includes the amount of capitalized borrowing costs (4) Explanation on amortization amount of contract performance costs in current period 10. Other current assets In RMB Item Ending balance Beginning balance Input tax to be deducted 105,891.12 3,442,185.74 Prepaid tax 668,243.42 Total 105,891.12 4,110,429.16 - 90 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 11. Long-term equity investment In RMB Increase/decrease in the current period Investme Cash Ending Beginnin nt profit Adjustm dividend balance Ending g Addition or loss s or Provisio of Negative ent of Other balance Investee balance al recogniz profits n for impairm other (book (book investme investme ed using changes declare d impairm Others ent nt compreh in equity value) value) nt the and ent provisio ensive n equity income distribut method ed I. Joint venture De Dietric - 3,661, 2,538, 1,122, h 700.03 742.02 958.01 Trade (Shang hai) Co., Ltd. Shaoxi ng 4,140, 4,140, Shuaig 000.00 000.00 e Kitche n & Bathro om Techno logy Co., Ltd. - Subtotal 3,661, 4,140, 2,538, 5,262, 700.03 000.00 958.01 742.02 II. Associated companies Zhejian g - 1,743, 408,92 1,334, Tingsh 429.88 500.57 9.31 uo Brand Operati on and Manag ement Co., Ltd. - Subtotal 1,743, 408,92 1,334, 429.88 9.31 500.57 - Total 5,405, 4,140, 2,947, 6,597, 129.91 000.00 887.32 242.59 - 91 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 12. Other equity instrument investments In RMB Item Ending balance Beginning balance Shanghai MXCHIP Information 2,116,023.22 2,116,023.22 Technology Co., Ltd. Total 2,116,023.22 2,116,023.22 Disclosure of non-tradable equity instrument investment by item in the current period In RMB Recognize Amount transferred Reason for being designated to Reason for the transfer d Accum from other be measured by fair value and of other comprehensive Item ulated Accumulated losses dividends comprehensive the change being recorded in incomes to retained income gains incomes to retained other comprehensive income earnings earnings Suzhou Industrial Park Ruican 100,000,000.00 Investment Held not for the purpose of Enterprise (Limited trading Partnership) Shanghai MXCHIP 17,832,510.78 Information Held not for the purpose of Technology Co., trading Ltd. 13. Investment real estate (1) Investment real estate under the cost measurement mode √Applicable □Not applicable In RMB Item Buildings Total I. Original book value 1. Beginning balance 11,676,710.68 11,676,710.68 2. Increased amount in the current period 3. Decreased amount in the current period 6,992,399.10 6,992,399.10 (1) Other transfer-out 6,992,399.10 6,992,399.10 4. Ending balance 4,684,311.58 4,684,311.58 II. Accumulated depreciation and amortization 1. Beginning balance 590,814.61 590,814.61 2. Increased amount in the current period 111,252.36 111,252.36 (1) Accrual or amortization 111,252.36 111,252.36 3. Decreased amount in the current period 304,460.75 304,460.75 (1) Other transfer-out 304,460.75 304,460.75 4. Ending balance 397,606.22 397,606.22 III. Impairment provision 0 0 IV. Book value 1. Ending book value 4,286,705.36 4,286,705.36 2. Beginning book value 11,085,896.07 11,085,896.07 - 92 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 14. Fixed assets In RMB Item Ending balance Beginning balance Fixed assets 1,168,388,890.69 1,179,306,020.01 Total 1,168,388,890.69 1,179,306,020.01 (1) Fixed assets In RMB Item Machine and Transportation Total Houses and buildings Other equipment equipment equipment I. Original book value: 1. Beginning balance 1,072,125,559.85 679,169,886.72 21,794,424.31 84,018,707.52 1,857,108,578.40 2. Increased amount in 13,472,162.01 32,996,332.65 785,486.72 3,091,735.94 50,345,717.32 the current period (1) Purchase 6,479,762.91 8,987,725.72 2,551,982.50 18,019,471.13 (2) Construction in 24,008,606.93 785,486.72 539,753.44 25,333,847.09 process transfer-in (3) Other increases 6,992,399.10 6,992,399.10 3. Decreased amount in 3,431,788.07 293,110.00 981,072.86 4,705,970.93 the current period (1) Disposal or 3,431,788.07 293,110.00 981,072.86 4,705,970.93 retirement waste 4. Ending balance 1,085,597,721.86 708,734,431.30 22,286,801.03 86,129,370.60 1,902,748,324.79 II. Accumulated depreciation 1. Beginning balance 267,528,198.84 341,157,676.17 12,747,836.37 56,368,847.01 677,802,558.39 2. Increased amount in 26,013,144.29 28,293,360.58 1,192,980.00 4,828,661.11 60,328,145.98 the current period (1) Provision 25,708,683.54 28,293,360.58 1,192,980.00 4,828,661.11 60,023,685.23 (2) Other increases 304,460.75 304,460.75 3. Decreased amount in 2,584,243.83 278,454.50 908,571.94 3,771,270.27 the current period (1) Disposal or 2,584,243.83 278,454.50 908,571.94 3,771,270.27 retirement 4. Ending balance 293,541,343.13 366,866,792.92 13,662,361.87 60,288,936.18 734,359,434.10 III. Impairment provision IV. Book value 1. Ending book value 792,056,378.73 341,867,638.38 8,624,439.16 25,840,434.42 1,168,388,890.69 2. Beginning book value 804,597,361.01 338,012,210.55 9,046,587.94 27,649,860.51 1,179,306,020.01 (2) Fixed assets without property right certificate In RMB Reasons for failure to obtain the property Item Book value right certificate 419,931,359.46 The formalities for the newly built plant Houses and buildings are in progress - 93 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 15. Construction in process In RMB Item Ending balance Beginning balance Construction in process 699,981,173.60 454,643,364.82 Total 699,981,173.60 454,643,364.82 (1) Construction in progress In RMB Ending balance Beginning balance Item Impairme Impairment nt Book balance Book value Book balance Book value provision provision Construction of 331,252,892.16 331,252,892.16 194,423,004.31 194,423,004.31 Maoshan Intelligent Manufacturing Base infrastructure Shengzhou 209,171,419.72 209,171,419.72 174,099,821.16 174,099,821.16 Chengnan project Robam Mansion 109,722,514.61 109,722,514.61 59,931,795.23 59,931,795.23 project Project of the 10,336,283.17 10,336,283.17 First Production Department Integrated Range 3,256,637.20 3,256,637.20 3,256,637.20 3,256,637.20 Hood Project Customized 2,110,176.00 2,110,176.00 3,223,516.47 3,223,516.47 management software Project of the 135,398.24 135,398.24 2,779,911.26 2,779,911.26 Third Production Department Project of the 424,778.76 424,778.76 1,185,840.80 1,185,840.80 Second Production Department Project of the 42,352,732.41 42,352,732.41 Fourth Production Department Other smaller 1,554,624.50 1,554,624.50 5,406,555.22 5,406,555.22 projects Total 699,981,173.60 699,981,173.60 454,643,364.82 454,643,364.82 - 94 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 (2) Current changes in major projects under construction In RMB Amoun Proport Includi t ion of ng: Accum Interest Increas transfer Other accum Amoun ulated capitali ed red decreas ulated t of Beginn Project amount zation Fundin Name amount into es in Ending project capitali Budget ing progres of rate in g of item in the fixed the balance invest zed balance s interest the source current assets current ment in interest capitali current period in the period the in the zation period current budget current period (%) period Constr 899,28 194,42 136,82 331,25 83.55% 83.55% uction 0,000. 3,004. 9,887. 2,892. Others of 00 31 85 16 Maosh an Intellig ent Manuf acturin g Base infrastr ucture 240,960, 174,099, 35,071,5 209,171, 86.81% 86.81% 000.00 821.16 98.56 419.72 Others Sheng zhou Cheng nan projec t 708,250, 59,931,7 49,790,7 109,722, 15.49% 15.49% Robam 000.00 95.23 19.38 514.61 Others Mansion Project 1,848,490, 428,454, 221,692, 650,146, Total 000,00 620.70 205.79 826.49 16. Right-of-use assets In RMB Item Houses and buildings Total I. Original book value 1. Beginning balance 35,620,757.32 35,620,757.32 2. Increased amount in the current period - 95 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 3. Decreased amount in the current 5,542,402.33 5,542,402.33 period (1) Disposal 5,542,402.33 5,542,402.33 4. Ending balance 30,078,354.99 30,078,354.99 II. Accumulated depreciation 1. Beginning balance 5,717,803.10 5,717,803.10 2. Increased amount in the current 2,735,187.20 2,735,187.20 period (1) Provision 2,735,187.20 2,735,187.20 3. Decreased amount in the current 395,885.92 395,885.92 period (1) Disposal 395,885.92 395,885.92 4. Ending balance 8,057,104.38 8,057,104.38 III. Impairment provision IV. Book value 1. Ending book value 22,021,250.61 22,021,250.61 2. Beginning book value 29,902,954.22 29,902,954.22 17. Intangible assets (1) Intangible assets In RMB Item Land use right Software Trademark Patents Total I. Original book value 1. Beginning balance 225,656,679.95 59,863,685.75 24,624,622.64 7,300,000.00 317,444,988.34 2. Increased amount in the 3,168,141.60 3,168,141.60 current period (1) Purchase 3,168,141.60 3,168,141.60 3. Decreased amount in the current period (1) Disposal 4. Ending balance 225,656,679.95 63,031,827.35 24,624,622.64 7,300,000.00 320,613,129.94 II. Accumulated amortization 1. Beginning balance 30,136,519.99 45,379,740.27 8,606,155.60 3,930,769.22 88,053,185.08 2. Increased amount in the 2,296,326.15 2,698,627.78 1,231,231.12 561,538.47 6,787,723.52 current period (1) Provision 2,296,326.15 2,698,627.78 1,231,231.12 561,538.47 6,787,723.52 3. Decreased amount in the current period 4. Ending balance 32,432,846.14 48,078,368.05 9,837,386.72 4,492,307.69 94,840,908.60 III. Impairment provision IV. Book value 1. Ending book value 193,223,833.81 14,953,459.30 14,787,235.92 2,807,692.31 225,772,221.34 2. Beginning book value 195,520,159.96 14,483,945.48 16,018,467.04 3,369,230.78 229,391,803.26 18. Goodwill (1) Original book value of goodwill - 96 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Decrease in Increase in the current the current Name of investee or item that generates period Beginning balance period Ending balance goodwill Generated by business Disposal combination Shengzhou Kinde Intelligent Kitchen 80,589,565.84 80,589,565.84 Appliances Co., Ltd. Total 80,589,565.84 80,589,565.84 Information about the asset group or combination of asset groups to which goodwill belongs The Company recognizes Shengzhou Kinde as an asset group. Goodwill at the end of this period is in the same asset group as recognized upon goodwill impairment test at the date of purchase and in previous year. Procedures and parameters of goodwill impairment test and methods to recognize goodwill impairment loss The Company appoints Zhonghe Appraisal Co., Ltd. (Zhonghe Appraisal) to evaluate the Shengzhou Kinde assets group, so as to determine if there is goodwill impairment. According to the Appraisal Report (ZHZBZ (2022) No. BJU3002,002) for the purpose of goodwill impairment test issued by Zhonghe Appraisal, Zhonghe Appraisal has determined according to the five-year cash flow estimate approved by the management, reckoned the cash flow after the five-year forecast period using certain long-term average growth rate, calculated using the present value model of future cash flow, and, under the going-concern assumption, made goodwill impairment test with the higher of the net value of assets’ fair value minus disposal expenses and the present value of estimated assets’ future cash flow. As tested, the recoverable amount of Shengzhou Kinde assets group is higher than the book value of the assets group containing goodwill. No sign of goodwill impairment is found. 19. Long-term unamortized expenses In RMB Amount of Increased amount in Item Beginning balance amortization in the Other decreases Ending balance the current period current period Service fee 918,029.08 473,907.27 489,297.54 902,638.81 Consulting fee 171,200.15 37,667.36 133,532.79 Brand endorsement 1,572,876.21 184,204.47 791,648.15 965,432.53 cost decoration 2,693,191.62 1,120,603.43 1,572,588.19 expenses 30,139.14 14,945.71 15,193.43 protection costs Total 5,385,436.20 658,111.74 2,454,162.19 3,589,385.75 20. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets before offset In RMB Ending balance Beginning balance Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax differences assets differences assets Credit impairment 907,609,933.08 137,464,760.94 917,479,025.92 138,811,114.82 provision Deferred income tax 1,064,974,915.35 159,746,237.30 656,596,891.65 98,489,533.76 assets before offset recognized based on the provisional estimated expenses - 97 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Change of the fair 117,832,510.78 17,674,876.62 117,832,510.78 17,674,876.62 value of other equity instrument investments Deferred income tax 95,786,247.96 14,367,937.19 102,890,393.42 15,433,559.00 assets before offset recognized based on the deferred income Asset impairment 55,983,593.98 8,397,539.10 80,039,607.58 12,005,941.14 provision Accrued and unpaid 9,848,248.72 1,477,237.31 salaries Unrealized profits of 6,392,315.82 1,597,686.80 6,550,213.16 1,637,825.81 internal transactions Deferred income tax 7,117,131.75 1,098,553.20 3,118,765.48 480,458.47 assets before offset recognized due to equity incentive Unrecognized financial 1,707,409.13 426,852.28 1,349,960.44 337,490.11 expenses Total 2,257,404,057.85 340,774,443.43 1,895,705,617.15 286,348,037.04 (2) Deferred income tax liabilities before offset In RMB Item Ending balance Beginning balance Taxable temporary Deferred income tax Taxable temporary Deferred income tax difference liabilities difference liabilities Asset appraisal 23,538,118.33 3,530,717.75 25,908,559.83 3,886,283.97 appreciation arising from business combination where the acquired company is not controlled by the same party after the combination Temporary taxable difference incurred 30,203,466.60 4,530,519.99 15,789,858.60 2,368,478.79 from pre-tax deduction of fixed assets Total 53,741,584.93 8,061,237.74 41,698,418.43 6,254,762.76 (3) Deferred income tax assets or liabilities presented in net amount after offset In RMB Amount of deferred Initial amount of Ending balance of Beginning balance of income tax assets offset deferred income tax deferred income tax deferred income tax Item against deferred income assets offset against assets or liabilities after assets or liabilities after tax liabilities at the end deferred income tax offset offset of the period liabilities Deferred income tax 340,774,443.43 286,348,037.04 assets - 98 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Deferred income tax 8,061,237.74 6,254,762.76 liabilities (4) Presentation of unrecognized deferred income tax assets In RMB Item Ending balance Beginning balance Deductible tax losses 21,721,067.74 18,037,908.58 Total 21,721,067.74 18,037,908.58 (5) The deductible losses of unrecognized deferred income tax assets will be due in the following years In RMB Year Ending amount Beginning amount Remarks 2022 39,552.31 39,552.31 2023 6,714.34 6,714.34 2024 5,602.28 5,602.28 2025 9,556,499.12 9,556,499.12 2026 8,429,540.53 8,429,540.53 2027 3,683,159.16 Total 21,721,067.74 18,037,908.58 21. Other non-current assets In RMB Ending balance Beginning balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision Prepayments 51,019,955.27 51,019,955.27 33,649,858.27 33,649,858.27 for equipment 25,657,321.55 25,657,321.55 3,129,005.00 3,129,005.00 purchase Prepayments 941,811.17 941,811.17 1,690,011.17 1,690,011.17 purchase Total 77,619,087.99 77,619,087.99 38,468,874.44 38,468,874.44 22. Short-term borrowings (I) Classification of short-term borrowings In RMB Item Ending balance Beginning balance Credit borrowings 39,657,061.74 29,616,655.41 Total 39,657,061.74 29,616,655.41 Description on the classification of short-term borrowings: Note: This represents the Company's failure to derecognize the bank receivables with recourse factoring of RMB 26,157,061.74 and bank credit loans of RMB 13,500,000.00. 23. Notes payable In RMB Type Ending balance Beginning balance Banker’s acceptance 809,469,587.67 962,665,463.99 Total 809,469,587.67 962,665,463.99 - 99 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The total amount of notes payable that were due and unpaid at the end of this period was RMB 0.00. 24. Accounts payable In RMB Item Ending balance Beginning balance Payment for materials 999,839,708.25 1,087,160,715.37 Payment for expenses 1,081,853,053.58 923,334,216.09 Payment for construction 197,017,080.54 152,898,742.07 Payment for equipment 24,492,976.97 18,506,587.47 Total 2,303,202,819.34 2,181,900,261.00 Note: As of June 30, 2022, the important accounts payable with an age of more than one year totaled RMB 13,390,151.23, mainly involving the outstanding payment for expenses. 25. Contract liabilities In RMB Item Ending balance Beginning balance Advances on sales 979,436,556.29 1,026,782,402.35 Total 979,436,556.29 1,026,782,402.35 26. Employee remuneration payable (1) Presentation of employee remuneration payable In RMB Increase in the current Decrease in the current Item Beginning balance Ending balance period period I. Short-term 159,707,932.44 362,682,903.25 471,190,482.93 51,200,352.76 remuneration II. Post-employment 5,469,492.64 30,869,390.02 34,637,886.83 1,700,995.83 benefits defined contribution plan III. Termination benefits 1,209,255.99 827,762.14 381,493.85 Total 165,177,425.08 394,761,549.26 506,656,131.90 53,282,842.44 (2) Presentation of short-term remuneration In RMB Item Beginning Increase in the Decrease in the Ending balance balance current period current period 1. Salaries, bonuses, subsidies and 155,146,075.83 306,920,793.36 412,651,592.31 49,415,276.88 allowances 2. Employee welfare 80.00 11,590,637.58 11,590,717.58 3. Social insurance 3,769,101.65 20,070,961.00 22,645,067.06 1,194,995.59 Including: Medical insurance 3,619,348.25 19,523,501.39 21,980,169.99 1,162,679.65 Occupation al injury 149,753.40 547,459.61 664,897.07 32,315.94 insurance 4. Housing funds 374,934.40 16,595,977.25 16,754,372.65 216,539.00 - 100 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 5. Labor union and staff education 417,740.56 7,504,534.06 7,548,733.33 373,541.29 expenses Total 159,707,932.44 362,682,903.25 471,190,482.93 51,200,352.76 (3) Presentation of the defined contribution plans In RMB Item Beginning Increase in the Decrease in the Ending balance balance current period current period 1. Basic pensions 5,282,063.72 29,889,193.15 33,527,153.25 1,644,103.62 2. Unemployment 187,428.92 980,196.87 1,110,733.58 56,892.21 insurance Total 5,469,492.64 30,869,390.02 34,637,886.83 1,700,995.83 27. Taxes payable In RMB Item Ending balance Beginning balance Corporate income tax 124,049,884.68 137,979,203.70 VAT 87,399,323.21 53,911,099.54 City maintenance and construction tax 6,159,411.70 2,141,479.84 Individual income tax 1,120,602.89 3,868,615.91 Education surcharge 2,639,747.85 1,657,978.22 Local education surcharge 1,759,832.01 1,105,318.89 Stamp tax 409,582.18 600,407.34 Land use tax 4,382,947.50 House tax 6,492,438.07 6,555,342.60 Total 230,030,822.59 212,202,393.54 28. Other payables In RMB Item Ending balance Beginning balance Other payables 269,409,072.30 267,781,215.06 Total 269,409,072.30 267,781,215.06 (1) Other payables 1) Other payables presented by nature In RMB Item Ending balance Beginning balance Security deposits payable 257,963,026.75 252,335,944.60 Collections by a third party 4,491,763.37 6,179,088.18 Guarantee deposits payable 5,929,870.30 5,104,062.30 Connected transactions 2,700,000.00 Others 1,024,411.88 1,462,119.98 Total 269,409,072.30 267,781,215.06 2) Other important payables with an age of more than one year - 101 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 As of June 30, 2022, the important other payables with an age of more than one year totaled RMB 231,518,785.92, mainly involving the sales deposits. 29. Non-current liabilities due within one year In RMB Item Ending balance Beginning balance Lease liabilities due within one year 5,414,420.90 5,387,591.43 Total 5,414,420.90 5,387,591.43 30. Other current liabilities In RMB Item Ending balance Beginning balance Output tax to be transferred 115,300,198.58 124,284,081.56 Total 115,300,198.58 124,284,081.56 31. Lease liabilities In RMB Item Ending balance Beginning balance Lease payment amount 27,033,092.96 37,325,149.01 Unrecognized financial expenses -3,043,042.22 -5,760,523.29 Non-current liabilities due within one year -5,414,420.90 -5,387,591.43 after reclassification Total 18,575,629.84 26,177,034.29 32. Deferred income In RMB Increase in the current Decrease in the Item Beginning balance Ending balance Cause of formation period current period Government grants 131,747,378.42 1,250,000.00 8,354,145.46 124,643,232.96 Total 131,747,378.42 1,250,000.00 8,354,145.46 124,643,232.96 Projects with government grants: In RMB Projects with government Amount of newly Amount included in the Related to Beginning balance added government current profits and Ending balance assets/income grants Project of intelligent grants for this year for this year losses4,269,752.82 33,975,095.32 38,244,848.14 Related to manufacturing and integrated assets standard and new modelof application 1,286,890.62 21,044,179.98 22,331,070.60 Related to line with an annual output of assets 2.25 million sets of kitchen appliances Construction of kitchen 549,179.75 6,495,421.26 7,044,601.01 Related to appliance R&D, design and assets testing center Subsidy for the construction 571,891.98 567,165.14 1,139,057.12 Related to of production line assets with an annual output of 1 million sets of kitchen appliances - 102 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Construction of production 341,245.50 3,910,598.25 4,251,843.75 Related to line assets with an annual new Development ofoutput of 1.08 95,325.42 435,699.89 531,025.31 Related to million setsofof built-in assets kitchen appliances energy-saving kitchen appliances and their production line Construction of digital -9,136.48 431,358.76 422,222.28 Related to intelligent workshop for assets smart home appliances Construction of the digital -123,825.26 148,505.91 24,680.65 Related to workshop with an annual assets output of 2.25 million sets of kitchen appliances Recycling-centered renewal 360,466.65 45,805.08 314,661.57 Related to project assets Subsidy for an investment in 30,106.11 - 30,106.11 Related to a production line with an assets annual output of 150,000 kitchen range hoods Academician & expert work 210,622.64 22,553.06 188,069.58 Related to station assets Construction of the kitchen 3,812.40 31,134.40 34,946.80 Related to appliance R&D, design and assets testing center Technological upgrading for 8,300,000.00 - 8,300,000.00 Related to manufacturing enterprises assets Technological upgrading 2,216,987.91 187,205.58 2,029,782.33 Related to project with an annual output assets of 500,000 Intelligent unmanned factory 1,039,424.10 16,708,490.35 17,747,914.45 Related to based on 5G and cloud assets technologies Subsidy for the 28,856,985.00 28,856,985.00 Related to No. M2020-09 Land of assets Chengnan New Area Robam Future Factory 1,250,000.00 43,914.78 1,206,085.22 Related to Project assets Total 131,747,378.42 1,250,000.00 8,354,145.46 124,643,232.96 — 33. Capital stock In RMB Increase and decrease of this change (+, -) Beginning Ending balance Issue of new Bonus shares Shares Others Subtotal balance shares converted from capital reserve Total number 949,024,05 949,024,05 of shares 0.00 0.00 - 103 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 34. Capital reserve In RMB Item Beginning balance Increase in the current Decrease in the current Ending balance period period Capital (stock) premium 401,799,332.67 401,799,332.67 Other capital reserves 3,118,765.48 3,998,366.27 7,117,131.75 Total 404,918,098.15 3,998,366.27 408,916,464.42 Note: for the increase in other capital reserves, please refer to the relevant explanation on equity incentives in the item of other significant matters in this note. 35. Treasury shares In RMB Item Beginning balance Increase in the current Decrease in the current Ending balance period period Share repurchase 199,995,742.59 199,995,742.59 Total 199,995,742.59 199,995,742.59 36. Other comprehensive incomes In RMB Amount of the current period Less: Less: amount amount included in included in Amount other other Net income Net income incurred comprehens Beginning comprehens after tax after tax Ending Item before ive incomes Less: balance ive incomes attributable attributable balance income tax previously income tax previously to the to minority in the and then expenses and then parent shareholder current transferred transferred company s period into the into current current retained profit or earnings loss I. Other comprehe - - nsive 100,157,6 100,157,6 incomes 34.16 34.16 that cannot be reclassifie d into profit or loss Cha - - nges in 100,157,6 100,157,6 fair value of the 34.16 34.16 investme nt in other equity instrumen ts - 104 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Total of - - other 100,157,6 100,157,6 comprehe 34.16 34.16 nsive incomes - 105 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 37. Surplus reserve In RMB Item Beginning Increase in the Decrease in the Ending balance balance current period current period Statutory surplus reserve 474,516,412.50 474,516,412.50 Total 474,516,412.50 474,516,412.50 38. Undistributed profit In RMB Item Current period Previous period Undistributed profit at the end of previous 7,098,721,555.37 6,240,444,654.34 period before adjustment Undistributed profit at the beginning of the 7,098,721,555.37 6,240,444,654.34 period after adjustment Add: Net profits attributable to owners of the parent company in the current 723,549,381.25 1,331,712,059.03 period Dividends payable for ordinary shares 472,047,458.00 473,435,158.00 Undistributed profit at the end of the 7,350,223,478.62 7,098,721,555.37 period Details of adjustment of undistributed profit at the beginning of the period: 1) Undistributed profit at the beginning of the period affected due to the retroactive adjustment of the Accounting Standards for Business Enterprises and its related new regulations (RMB). 2) Undistributed profit at the beginning of the period affected due to the change in accounting policies (RMB). 3) Undistributed profit at the beginning of the period affected due to the correction of significant accounting errors (RMB). 4) Undistributed profit at the beginning of the period affected due to the change in the scope of consolidation caused by the common control (RMB). 5) Total undistributed profits at the beginning of the period affected due to other adjustments (RMB). 39. Operating income and operating cost In RMB Amount of the current period Amount of the previous period Item Income Cost Income Cost Main business 4,317,490,105.88 2,205,131,842.03 4,225,828,188.22 1,968,087,094.43 Other businesses 126,819,993.81 34,888,040.50 100,253,843.40 25,804,527.87 Total 4,444,310,099.69 2,240,019,882.53 4,326,082,031.62 1,993,891,622.30 40. Taxes and surcharges In RMB Item Amount of the current period Amount of the previous period City maintenance and construction tax 15,541,302.70 18,048,209.85 Education surcharge 11,100,930.49 12,771,763.53 House tax 309,227.61 421,529.89 - 106 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Land use tax -4,382,947.50 61,524.00 Stamp tax 1,176,949.93 1,060,955.85 Vehicle and vessel usage tax 9,939.84 9,895.14 Environmental protection tax 4,621.17 4,349.86 Total 23,760,024.24 32,378,228.12 Other notes: According to the Notice on Taxation Matters of Hangzhou Linping District Tax Service, State Taxation Administration (HLPT [2022] No. 17731), the Company was exempted from the urban land use tax for the year 2021. 41. Sales expenses In RMB Item Amount of the current period Amount of the previous period Marketing service expenses 631,391,446.17 658,869,399.50 Advertisement expenses 259,175,406.07 212,712,834.57 Employee remuneration 139,790,625.89 111,001,158.94 Booth decoration expenses 59,578,022.62 66,732,522.09 Promotional activity expenses 18,422,096.45 37,411,007.65 Material consumption 33,049,395.80 31,534,245.53 Business hospitality cost 7,472,828.11 7,040,351.39 Travel expenses 6,801,054.02 7,379,352.93 Rental fees 8,555,672.36 7,880,885.39 Intermediary service fees 7,477,610.64 7,606,687.09 Office expenses 4,560,789.33 7,154,345.09 Others 8,429,642.06 8,459,821.71 Total 1,184,704,589.52 1,163,782,611.88 42. Administrative expenses In RMB Item Amount of the current period Amount of the previous period Employee remuneration 91,121,750.84 75,168,362.35 Depreciation and amortization 25,271,929.68 20,340,171.28 Consulting service fees 12,229,974.53 8,560,518.67 Maintenance expenses 10,083,182.01 8,390,641.09 Office expenses 6,639,136.07 6,978,151.70 Rental fees 5,712,938.91 9,087,992.71 Travel expenses 3,083,013.05 3,019,005.02 Business hospitality cost 4,374,301.07 3,159,347.68 Communication expense 2,918,739.13 2,603,129.38 Travel expenses 2,285,073.79 2,016,160.37 Costs of equity incentive 3,998,366.27 802,690.60 Material consumption 4,431,994.70 2,719,283.02 Others 11,433,464.52 7,147,655.30 Total 183,583,864.57 149,993,109.17 43. R&D expenses In RMB Item Amount of the current period Amount of the previous period Employee remuneration 78,436,915.06 63,291,760.88 Direct input 73,217,115.42 61,648,388.01 - 107 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Depreciation and amortization 7,636,633.77 7,336,784.12 Design fees 2,899,636.01 4,232,409.85 Other expenses 7,178,345.27 6,923,863.26 Total 169,368,645.53 143,433,206.12 44. Financial expenses In RMB Item Amount of the current period Amount of the previous period Interest expenses 1,018,439.59 1,228,635.41 Less: Interest income 60,042,815.83 50,677,538.57 Add: foreign exchange gain/loss -3,940,324.55 332,356.04 Add: other expenses 689,241.88 1,189,967.69 Total -62,275,458.91 -47,926,579.43 45. Other incomes In RMB Sources generating other incomes Amount of the current period Amount of the previous period Financial support fund to boost the 49,775,390.00 35,660,000.00 corporate development Amortization of deferred income 8,354,145.46 9,208,072.74 Tax rebate for sales of embedded software 23,286,694.84 7,323,753.03 Special funds for industrial development 9,608,719.00 2,350,852.22 Patent awards 1,175,521.65 Post allowance and social insurance 1,372,323.40 122,278.28 allowance Refund of individual income tax handling 482,308.94 412,808.74 fee VAT exemption or reduction 10,643.41 Other subsidies 5,000.00 9,000.00 46. Investment income In RMB Item Amount of the current period Amount of the previous period Income from long-term equity investments -2,947,887.32 -1,440,070.07 accounted for using the equity method Investment income during holding of financial assets for trading 22,116,828.43 32,869,587.74 Total 19,168,941.11 31,429,517.67 47. Loss from credit impairment In RMB Item Amount of the current period Amount of the previous period Bad debt losses of other receivables 4,029,453.07 -7,524,268.32 Bad debt losses on notes receivable 163,813,946.01 -23,680,868.74 Bad debt losses from accounts receivable -158,819,085.15 -287,302.15 Total 9,024,313.93 -31,492,439.21 48. Loss from asset impairment - 108 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Item Amount of the current period Amount of the previous period II. Loss from obsolete inventory or from impairment of the contract performance 24,056,013.60 costs Total 24,056,013.60 49. Asset disposal income In RMB Sources of asset disposal income Amount of the current period Amount of the previous period Non-current asset disposal income 37,838.75 -2,035,843.51 Including: income from disposal of fixed 37,838.75 -2,035,843.51 assets Total 37,838.75 -2,035,843.51 50. Non-operating revenue In RMB Amount included in the Item Amount of the current period Amount of the previous period current non-recurring gains and losses Government grants 13,000.00 Penalty income 13,200.00 13,200.00 Others 2,682,807.72 1,182,370.24 2,682,807.72 Total 2,696,007.72 1,195,370.24 2,696,007.72 Government grants included in the current profit or loss: Amount of the previous Related to Item Amount of the current period Source and basis assets/income period Subsidy for early scrapping of diesel 13,000.00 Related to vehicle of national III emission income standard Total 13,000.00 — — 51. Non-operating expenditures In RMB Amount included in the Item Amount of the current period Amount of the previous period current non-recurring gains and losses External donations 1,000,077.70 1,000,000.00 1,000,077.70 Amercement outlay 56,677.00 56,677.00 Losses from non-current asset 72,018.47 1,923.08 72,018.47 damage or retirement Others 429,381.96 576,001.20 429,381.96 Total 1,558,155.13 1,577,924.28 1,558,155.13 - 109 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 52. Income tax expenses (1) Presentation of income tax expenses In RMB Item Amount of the current period Amount of the previous period Current income tax expenses 183,792,350.28 221,466,949.04 Deferred income tax expenses -52,619,931.42 -77,977,344.97 Total 131,172,418.86 143,489,604.07 (2) Adjustment of accounting profit and income tax expenses In RMB Item Amount of the current period Total profit 852,644,258.89 Income tax expense calculated based on statutory/applicable tax 127,896,638.88 rate Effects of the subsidiaries’ application of different tax rates 181,089.38 Effects of the adjustment of income tax in previous period 175,155.04 Effects of the non-deductible costs, expenses and losses 3,181,949.83 Effects of using deductible losses of unrecognized deferred income taxes in the previous period Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current 920,789.79 period Profit and loss of joint ventures and associated companies -442,183.10 accounted for by equity method Effects of taxes deducted by research and development expense -741,020.96 addition (indicated with "-") Income tax expense 131,172,418.86 53. Other comprehensive incomes See 36. Other comprehensive incomes of Note VII for details. 54. Items in cash flow statement (1) Other cash received from operating activities In RMB Item Amount of the current period Amount of the previous period Interest revenue on deposits 60,042,815.83 50,677,538.57 Government grants 63,679,906.40 38,558,939.24 Revenue collected and payment made on 5,123,692.97 12,423,235.01 behalf of other agencies Cash reserve 1,233,346.31 5,010,000.00 Guarantee and security deposits 14,850,829.06 9,382,127.28 L/C margin and bill acceptance margin 30,104,468.61 Other payments 2,891,773.89 2,652,812.06 Total 177,926,833.07 118,704,652.16 (2) Other cash paid in relation to operating activities - 110 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Item Amount of the current period Amount of the previous period Period expenses 1,141,993,734.77 1,035,315,521.21 Revenue collected and payment made on 9,787,117.46 7,363,869.83 behalf of other agencies Guarantee and security deposits 13,629,302.87 7,846,747.85 L/C margin and bill acceptance margin 21,530,136.56 10,236,863.39 Cash reserve 8,383,255.70 13,693,388.58 Others 5,565,795.10 1,029,155.95 Total 1,200,889,342.46 1,075,485,546.81 (3) Other cash received from financing activities In RMB Item Amount of the current period Amount of the previous period Income from accounts receivable factoring 1,012,732.06 5,552,160.81 Total 1,012,732.06 5,552,160.81 (4) Other cash paid in relation to financing activities In RMB Item Amount of the current period Amount of the previous period Expenditure for accounts receivable 3,516,183.32 factoring Rental 3,020,626.80 Share repurchase 199,995,742.59 Total 6,536,810.12 199,995,742.59 - 111 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 55. Supplementary information of Cash Flow Statement (1) Supplementary information of Cash Flow Statement In RMB Supplementary information Current amount Amount of the previous period 1. Reconciliation of net profit to cash flow from operating activities: Net profit 721,471,840.03 799,645,675.31 Add: Asset impairment provision -24,056,013.60 Credit impairment provision -9,024,313.93 31,492,439.21 Depreciation of fixed assets, depreciation of oil and gas assets, and 60,134,937.59 51,125,161.10 depreciation of productive biological assets Depreciation of right-of-use assets 2,735,187.20 Amortization of intangible assets 6,787,723.52 6,475,429.26 Amortization of long-term deferred expenses 2,454,162.19 1,613,095.73 Losses arising from disposal of fixed assets, intangible assets and other long- term assets (gains expressed with "-") -37,838.75 2,035,843.51 Losses on disposal of fixed assets (gains indicated with "-") 72,018.47 1,923.08 Losses from fair value change (gains expressed with “-”) Financial expenses (profit shall be indicated with"-") -2,921,884.96 264,556.23 Investment losses (gains expressed with “-”) -19,168,941.11 -31,429,517.67 Decrease in deferred income tax assets (increase shall be indicated with “-”) -54,426,406.39 -77,723,821.81 Increase in deferred income tax liabilities (decrease shall be indicated with “- 1,806,474.98 -253,781.85 ”) Decrease in inventories (increase shall be indicated with “-”) -28,800,735.18 -192,725,465.63 Decrease in operating receivables (increase shall be indicated with “-”) -137,525,667.47 -530,224,948.55 Increase in operating payables (decrease expressed with "-") -196,645,420.26 678,330,853.31 Others -8,405,382.14 Net cash flow from operating activities 322,855,122.33 730,222,059.09 2. Non-cash flow-involved major investing and financing activities: Conversion of debt into capital Convertible bonds due within one year Fixed assets acquired under financing leases 3. Net increase/decrease in cash and cash equivalents: Ending balance of cash 3,327,149,844.76 4,141,495,878.43 Less: cash beginning balance 3,719,988,820.35 3,886,096,513.56 Add: ending balance of cash equivalents Less: cash equivalents at the beginning of the period Net increase in cash and cash equivalents -392,838,975.59 255,399,364.87 (2) Composition of cash and cash equivalents - 112 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Item Ending balance Beginning balance I. Cash 3,327,149,844.76 3,719,988,820.35 Including: cash on hand 122,392.82 80,944.99 deposits available for payment at 3,326,702,947.52 3,718,304,060.33 any time Other cash and cash equivalents available for payment at any time 324,504.42 1,603,815.03 III. Balance of cash and cash equivalents 3,327,149,844.76 3,719,988,820.35 at the end of the period 56. Note to items in the Statement of Changes in Owner’s Equity Name of the item under "Others" whose previous ending balance was adjusted, the adjusted amount and other matters: NA 57. Assets with restricted ownership and right to use In RMB Item Ending book value Reasons for limit Cash and cash equivalents 73,638,194.15 L/G margin and note margin Total 73,638,194.15 58. Foreign currency monetary item (1) Foreign currency monetary item In RMB Item Ending balance in foreign Exchange rate for conversion Ending balance in RMB currency Cash and cash equivalents Including: USD 9,527,417.96 6.7114 63,942,312.90 EUR 101.12 7.0084 708.69 AUD 3.29 4.6145 15.18 Accounts receivable Including: USD 3,088,568.19 6.7114 20,728,616.53 EUR 289.60 7.0084 2,029.63 AUD 30.00 4.6145 138.44 Accounts received in advance Including: AUD 41,826.83 4.6145 193,009.90 USD 338,682.83 6.7114 2,273,035.95 EUR 17,468.96 7.0084 122,429.46 (2) Description for overseas operating entities, including the disclosure of the main overseas business location, bookkeeping base currency and selection basis for the important overseas operating entities as well as the reason for the change of bookkeeping base currency (if any). □Applicable √ Not applicable 59. Government grants (1) Basic information about government grants - 113 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Type Amount Items Amounts included in current profits and losses 2020 advantage enterprise cultivation funds 30,000,000.00 Other income 30,000,000.00 Tax rebate for sales of embedded software 23,286,694.84 Other income 23,286,694.84 2020 Yuhang District "Kunpeng" and "Quasi-Kunpeng" 18,715,390.00 Other income 18,715,390.00 enterprise cultivation funds Fund subsidy for equipment under industrial economic policies 3,149,100.00 Other income 3,149,100.00 Subsidy for project of collaborative innovation of industrial 2,400,000.00 Other income 2,400,000.00 chains R&D subsidy for science and technology enterprises in 1,988,200.00 Other income 1,988,200.00 Hangzhou Post allowance and social insurance allowance 1,372,323.40 Other income 1,372,323.40 Financial rewards for enterprises with annual main business 1,000,000.00 Other income 1,000,000.00 income exceeding RMB 10 billion Subsidy for the purchase of industrial robots in Shengzhou in 867,900.00 Other income 867,900.00 2021 Standardization project subsidy 835,120.00 Other income 835,120.00 Refund of individual income tax handling fee 482,308.94 Other income 482,308.94 2021 District Open 88 credit insurance policy subsidy 285,040.00 Other income 285,040.00 Special funds for the development of e-commerce industry in 200,000.00 Other income 200,000.00 2020 Funds (first batch) for the science and technology policy in 200,000.00 Other income 200,000.00 2022 Manufacturing industry incentive 170,000.00 Other income 170,000.00 Subsidy for protection of intellectual property rights 163,635.65 Other income 163,635.65 2022 Hangzhou special patent subsidy (first batch) 135,000.00 Other income 135,000.00 2021 Shaoxing intelligent manufacturing subsidy 100,000.00 Other income 100,000.00 New product project award (second batch) for the development 60,000.00 Other income 60,000.00 of private economy in 2020 Commendation and reward for key enterprises 60,000.00 Other income 60,000.00 The "795 Policy" subsidy 50,000.00 Other income 50,000.00 "Top ten industrial enterprises" in Shengzhou Sanjiang Sub- 50,000.00 Other income 50,000.00 district Subsidies for encouraging intellectual property development 41,766.00 Other income 41,766.00 Incentives for encouraging industrial enterprises to increase 30,000.00 Other income 30,000.00 equipment investment 2021 Innovation voucher subsidy funds 28,479.00 Other income 28,479.00 Special funds for promotion of finance of the Linping District 20,000.00 Other income 20,000.00 Commerce Bureau VAT exemption or reduction 10,643.41 Other income 10,643.41 Subsidy of the Linping District Commerce Bureau for 10,000.00 Other income 10,000.00 enhancing the level of commercial and trade development Talent introduction and cultivation reward 5,000.00 Other income 5,000.00 Future Factory subsidy 1,250,000.00 Deferred 1,250,000.00 income (2) Return of government grants □Applicable √ Not applicable VIII. Changes in the scope of consolidated financial statements After being examined and approved by the President's Office Meeting of the Company, Hangzhou Jinhe Electric Appliances Co., Ltd., a wholly-owned subsidiary, was established with a registered capital of RMB 10 million, and its industrial and commercial registration formalities were completed on June 22, 2022. IX. Interests in Other Entities - 114 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 1. Interests in subsidiaries (1) Composition of the Robam Group Principal place of Shareholding ratio Acquisition Subsidiary Registration place Nature of business business Direct Indirect method Beijing Robam Beijing Beijing Sales of kitchen 100.00% Business Appliances appliances combination Sales Co., Ltd. under common control Shanghai Robam Shanghai Shanghai Sales of kitchen 100.00% Business Electric appliances combination under Appliance common control Sales Co., Ltd. Hangzhou Hangzhou Hangzhou Sales of kitchen 100.00% MingQi Electric appliances Acquisition upon Co., Ltd. its establishment De Dietrich Shanghai Shanghai Sales of kitchen 51.00% Acquired through Household appliances investment Appliances Trading Production Shengzhou Shengzhou 51.00% (Shanghai) and sales of Business Co., Ltd. kitchen combination not Kitchen appliances under common Appliances control Co., Ltd. Hangzhou Asset, Hangzhou Hangzhou 100.00% Robam investment Fuchuang management, Acquisition upon Investment etc. its establishment Management Co., Ltd. Zhejiang Shengzhou Shengzhou Smart kitchen 32.13% Cookingfuture design Acquisition upon Technology its establishment Co., Ltd. Hangzhou Hangzhou Hangzhou Sales of kitchen 100.00 Jinhe Electric appliances Acquisition upon Appliances its establishment Co., Ltd. Note: The basis for the Company to hold half or less of the voting rights of Zhejiang Cookingfuture Technology Co., Ltd. but still control it: as the Company has a controlling relationship with Shengzhou Kinde, it also has a controlling relationship with its holding subsidiary Zhejiang Cookingfuture Technology Co., Ltd. (2) Major partially-owned subsidiaries In RMB Dividend declared and Gains/losses attributable Balance of minority Proportion of shares held to minority shareholders distributed to minority Subsidiary shareholders’ equity at by minority shareholders in the current period shareholders in the the end of the period current period Shengzhou Kinde 49.00% -740,298.59 4,000,000.00 133,016,480.44 Intelligent Kitchen Appliances Co., Ltd. Zhejiang 37.00% -1,337,206.38 11,024,123.58 Cookingfuture Technology Co., Ltd. - 115 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 (3) Main financial information of major partially-owned subsidiaries In RMB Ending balance Beginning balance Subsidi ary Non- Non- Non- Current Total Non- Current Total Current Total current Current Total current current liabiliti liabiliti current liabiliti liabiliti assets assets liabiliti assets assets liabiliti assets es es assets es es es es 156,5 345,6 502,2 175,4 43,31 218,7 215,5 309,6 525,1 204,3 35,11 239,4 Sheng 36,55 92,43 28,99 14,16 3,496 27,65 40,93 21,53 62,47 06,09 1,747 17,84 zhou 5.46 9.54 5.00 3.40 .47 9.87 6.45 5.16 1.61 5.17 .76 2.93 Kinde Intelli gent Kitch en Appli ances Co., Ltd. Zhejia 35,75 2,319 38,07 1,326 1,326 18,29 1,856 20,15 4,790 4,790 ng 4,206 ,556. 3,763 ,685. ,685. 5,624 ,306. 1,931 ,781. ,781. .83 78 .61 00 00 .97 24 .21 30 30 Cooki ngfutu re Techn ology Co., Ltd. In RMB Amount of the current period Amount of the previous period Subsidiar y Cash flow Cash flow Total Total Operating from Operating from Net profit comprehens Net profit comprehens income operating income operating ive income ive income activities activities Shengzhou 77,502,270.7 - - - 124,027,172. 20,862,147.6 20,862,147.6 6,936,248.30 Kinde 9 2,848,019 2,848,019 21,169,06 62 6 6 Intelligent .82 .82 4.76 Kitchen Appliances Co., Ltd. - 116 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Zhejiang 593,200,0 - - - - - - Cookingfu 2 3,614,071 3,614,071 10,664,34 3,217,615 3,217,615 4,240,135 ture .30 .30 9,92 .53 .53 .64 Technolog y Co., Ltd. 3. Interests in joint ventures or associated companies (1) Minor joint ventures or associated companies Accounting Name of joint Principal place Registration Nature of treatment of ventures or Shareholding ratio of business place business investment in associated joint ventures companies or associated Direct Indirect companies De Dietrich Trade Shanghai Shanghai Sales of kitchen 51.00% Equity method appliances (Shanghai) Co., Ltd. Zhejiang Hangzhou Hangzhou Retail 40.00% Equity method Tingshuo Brand Operation and Management Co., Ltd. Shaoxing Shaoxing Shaoxing Sales of kitchen 40.00% Equity method Shuaige appliances Kitchen & Bathroom Technology Co., Ltd. (2) Summary of the financial information of minor joint ventures or associated companies In RMB Ending balance/amount incurred in current Beginning balance/amount of the previous period period Joint venture: Total book value of investment 5,262,742.02 3,661,700.03 Totals of the following items calculated as per respective shareholding proportion --Net profit -2,538,958.01 208,930.44 -Total comprehensive income -2,538,958.01 208,930.44 Associated company: Total book value of investment 1,334,500.57 1,743,429.88 Totals of the following items calculated as per respective shareholding proportion --Net profit -408,929.31 -256,570.12 -Total comprehensive income -408,929.31 -256,570.12 X. Risks Related to Financial Instruments Major financial instruments of the Company include receivables and payables. See the note for detailed description - 117 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 of these financial instruments. Risks related to these financial instruments and risk management policies adopted by the Company to reduce such risks are outlined as follows. The management of the Company manages and monitors such risk exposures to ensure to keep the risks above within limited scope. 1. The Company’s various risk management objectives and policies are outlined as follows: Risk management conducted by the Company is to properly balance risk and income, minimize negative impacts of the risks on the Company’s business performance and maximize benefits of the shareholders and other equity investors. Based on the risk management objective, the Company’s basic risk management policy is to determine and analyze all kinds of risks faced by the Company, establish appropriate risk bottom line for risk management, and monitor all risks promptly and reliably keep risks within a limited range. (1) Market risk – price risk Since the Company sells its products at market prices, it may be affected by such price fluctuations. (2) Credit risk As of June 30, 2022, the largest credit risk exposure that may bring financial loss to the Company mainly comes from the Company’s financial assets loss caused by the other party’s failure to perform its obligations in the contract, particularly including the loss in the book value of recognized financial assets in the consolidated balance sheet. To reduce credit risk, the Company has a dedicated team responsible for determining the credit line, conducting credit approval and implementing other monitoring procedures, to ensure that necessary measures are taken to recover due debt. In addition, the Company reviews the recovery of each account payable on each balance sheet date, so as to ensure sufficient bad debt provisions for unrecoverable accounts. Therefore, the management of the Company holds that the credit risk faced by the Company has been significantly reduced. The credit risk of the Company’s liquid capital is low since it is deposited at banks with relatively high credit rating. Because the risk exposures of the Company are related to multiple contracting parties and multiple clients, the Company has no major credit risk concentration. The Company adopts necessary policies to ensure all of the clients involved in the sales of our products have good credit record. The Company has no major credit risk concentration. The receivables of the top five contracting parties totaled RMB 1,254,911,112.52. Other receivables of the top five contracting parties totaled RMB 40,895,433.56. (3) Liquidity risk Liquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due. The Company manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoid unacceptable losses or damage to corporate reputation. The Company management has closely examined the liquid capital of the Company and regularly analyzed the liability structure/term, bank lines and so on to endure fund sufficiency. It is concluded that the Company has sufficient funds to meet the demands of short-term debt and capital expenditure of the Company. Analysis of the financial assets and financial liabilities of the Company as per maturity of the undiscounted contract obligations remained is made as follows: Amount on June 30, 2022 - 118 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Item Within 1 year 1-2 years 2-5 years Over 5 years Total Financial assets Cash and cash equivalents 3,400,788,038.91 3,400,788,038.91 Financial assets held for 2,884,760,000.00 2,884,760,000.00 trading Notes receivable 1,308,046,816.29 1,308,046,816.29 Accounts receivable 1,640,360,454.56 1,640,360,454.56 Other receivables 105,383,151.12 105,383,151.12 Financial liabilities Short-term borrowings 39,657,061.74 39,657,061.74 Notes payables 809,469,587.67 809,469,587.67 Accounts payable 2,303,202,819.34 2,303,202,819.34 Other payables 269,409,072.30 269,409,072.30 Payroll payable 53,282,842.44 53,282,842.44 Other current liabilities 115,300,198.58 115,300,198.58 Non-current liabilities 5,414,420.90 5,414,420.90 due within one year Lease liabilities 3,498,355.33 8,140,360.20 6,936,914.31 18,575,629.84 (4) Sensitivity analysis on foreign exchange risks The exchange rate risk borne by the Company is mainly associated with USD, Euro and HKD, etc. The foreign exchange risk borne by the Company is mainly associated with USD (which shall be changed according to relevant realities). As of June 30, 2022, the Company's balances of assets and liabilities are in RMB (except for the balances of the assets and liabilities in foreign currency in "VII. 58 Foreign currency monetary item" in this Note). Exchange risk resulting from the assets and liabilities whose balances are in foreign currency may affect the Company’s performance. The Company pays close attention to the impact of change in exchange rate on the Company’s exchange risk. Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk. XI. Disclosure of Fair Value 1. Assets and liabilities measured at fair value at the end of the period In RMB Ending fair value Item Fair value measurement Fair value measurement Fair value measurement (Level 1) (Level 2) (Level 3) Total Continuous fair value measurement -- -- -- -- (I) Financial assets held for trading 2,884,760,000.00 2,884,760,000.00 1. Financial assets measured at fair value 2,884,760,000.00 2,884,760,000.00 with changes included in current profit or loss (1) Financial products 2,884,760,000.00 2,884,760,000.00 - 119 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 2. Financial assets measured at fair value 2,116,023.22 2,116,023.22 with changes included in current profit or loss (III) Investment in other equity 2,116,023.22 2,116,023.22 instruments Total assets measured continuously at fair 2,886,876,023.22 2,886,876,023.22 value II. Non-continuous -- -- -- -- fair value measurement 2. Valuation techniques adopted and qualitative and quantitative information on important parameters for the items involved in Level 3 continuous and non-continuous fair value measurement Item June 30, 2022 Valuation Significant Relationship between Fair value techniques unobservable unobservable value financial products 2,884,760,000.00 Optimal fair value value Investment and fair value — estimation cost Shanghai MXCHIP 2,116,023.22 Optimal fair value Investment — Information Technology estimation cost Co., Ltd. Due to the deterioration of the operating environment, operating conditions and financial situation of the invested enterprise, Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership), the Company measured it with zero as a reasonable estimate of fair value. XII. Related Party and Related Party Transactions 1. The Company’s parent company Proportion of the Proportion of Company’s shares voting right of the Parent company Registration place Nature of business Registered capital held by the parent parent company in company the Company Hangzhou Hangzhou, Zhejiang Investment and RMB 60 million 49.68% 49.68% Robam Industrial industrial Group Co., Ltd. management The ultimate controlling party of the Company is Ren Jianhua 2. The Company’s subsidiaries See the Note for more about the Company’s subsidiaries. 3. The Company's joint ventures and associated companies See the Note for more about the Company’s major joint ventures or associated companies. 4. Other related parties Name of other related parties Relation between other related parties and the Company Hangzhou Amblem Household Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Yuhang Robam Fuel Station Co., Ltd. Controlled by the same ultimate controlling party - 120 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Hangzhou Nbond Nonwovens Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Yuhang Yaguang Spray Coating Factory Other related parties Hangzhou City Garden Hotel Co., Ltd. Other related parties Hangzhou Bonyee Daily Necessity Technology Co., Ltd. Controlled by the same ultimate controlling party Shaoxing Kinde Electric Appliances Co., Ltd. Other related parties Hangzhou Guoguang Touring Commodity Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Small Planter Technology Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Linping ROBAM Charity Foundation Other related parties 5. Connected transactions (1) Connected transactions regarding purchasing and selling goods and providing and accepting labor services Table of goods purchase and labor services receiving In RMB Description of the Whether exceeds the Amount of the current Amount of the Related parties connected approved limited or not period previous period transactions (Y/N) Hangzhou Yuhang Yaguang Spray Receiving of labor 3,910,128.45 No 4,188,923.61 Coating Factory services Hangzhou Small Planter Technology Co., Purchase of goods 1,767,541.39 No 2,277,929.75 Ltd. Hangzhou Amblem Household Co., Ltd. Purchase of goods 19,517,425.33 No 413,419.77 Hangzhou Yuhang Robam Fuel Station Purchase of goods 485,747.10 No 299,710.75 Co., Ltd. Zhejiang Tingshuo Brand Operation and Receiving of labor 200,000.00 No Management Co., Ltd. services Shaoxing Shuaige Kitchen & Bathroom Purchase of goods 376,177.00 No Technology Co., Ltd. Hangzhou City Garden Hotel Co., Ltd.Receiving of labor No 201,474.34 services Hangzhou Guoguang Touring Commodity Purchase of goods 85,584.42 No 70,568.15 Co., Ltd. Hangzhou Bonyee Daily Necessity Purchase of goods 8,344.42 No 424.78 Technology Co., Ltd. Table of goods sales and labor services provision In RMB Related parties Description of the Amount of the Amount of the connected current period previous period Hangzhou Amblem Household Co., Ltd. Saletransactions 2,332,591.12 7,335,655.75 Hangzhou Nbond Nonwovens Co., Ltd. Sale of goods 10,746.90 Hangzhou Linping ROBAM Charity Foundation Sale of goods 696,446.84 13,100.00 (2) Related lease The Company acts as the lessor: In RMB Lessee Type of leased asset Rental income recognized Lease income recognized in in the current period the previous period Hangzhou Robam Industrial Group Housing 14,400.00 14,400.00 Co., Ltd. - 121 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 The Company acts as the Lessee: In RMB Rental costs of Variable lease short-term leases payments not Interest expenses Increased right- Rental paid Lessor Type and low-value included in lease on lease of-use of asset leases with liabilities for liabilities assets leased simplified measurement (if assumed asset treatment (if applicable) applicable) Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun t of t of t of t of t of t of t of t of t of t of the the the the the the the the the the curre previ curre previ curre previ curre previ curre previ nt ous nt ous nt ous nt ous nt ous perio perio perio perio perio perio perio perio perio perio d d d d d d d d d d Hangz hou Housing 275,01 275,01 Robam 2.28 2.28 Industr ial Group Co., Ltd. (3) Remuneration of key management personnel In RMB Item Amount of the current period Amount of the previous period Total remuneration 4,198,071.27 3,165,800.00 6. Receivables and payables of related parties (1) Receivables: None (2) Payables In RMB Book balance at the end of the Initial book balance at the Name of item Related parties period beginning of the period Accounts payable Hangzhou Yuhang Yaguang Spray 2,391,109.79 3,543,430.78 Coating Factory Accounts payable Hangzhou Yuhang Robam Fuel Station 2,272,284.87 1,723,356.74 Co., Ltd. Accounts payable Hangzhou Guoguang Touring 24,000.00 23,605.20 Commodity Co., Ltd. Accounts payable Hangzhou Amblem Household Co., 873,629.56 Ltd. Accounts payable Hangzhou Small Planter Technology 925,935.50 Co., Ltd. Accounts payable Shaoxing Shuaige Kitchen & 328,876.46 Bathroom Technology Co., Ltd. Other payables Hangzhou Yuhang Yaguang Spray 200,000.00 200,000.00 Coating Factory Other payables Hangzhou Guoguang Touring 2,000.00 2,000.00 Commodity Co., Ltd. - 122 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Accounts received in Hangzhou Linping ROBAM 380,400.00 advance Charity Foundation XIII. Share Payment 1. Overview of share payment □Applicable √Not applicable 2. Equity-settled share payment □Applicable √Not applicable 3. Cash-settled share payment □Applicable √Not applicable 4. Modification and termination of share payment 5. Others XIV. Commitments and contingencies 1. Major commitments Major commitments on the balance sheet date The Company has made a capital contribution of RMB 4.0 million to Zhejiang Tingshuo Brand Operation and Management Co., Ltd., an associate company, and has made a paid-up capital contribution of RMB 2.0 million, representing 40% of the equity, with RMB 2.0 million still outstanding. In addition to the above commitments, as of the day of submission of the Financial Statements, the Company has no other major commitments. 2. Contingencies (1) Major contingencies on the balance sheet date As of June 30, 2022, the Company has no major contingencies that need to be disclosed (2) It is also necessary to make it clear hereby that the Company has no major contingencies that need to be disclosed. The Company has no major contingency that need to be disclosed. XV. Events After the Balance Sheet Date As of June 30, 2022, the Company has no events after the Balance Sheet date to be disclosed. XVI. Other Significant Events On April 14, 2021, the Company held the Fourth Meeting of the Fifth Session of the Board of Directors, and deliberated and adopted relevant proposals such as Business Partner Stock Ownership Plan (Draft) and 2021 Stock Option Incentive Plan (Draft). It was decided to take the operating income and net profit attributable to the mother company after deducting non-recurring gains and losses from 2021 to 2023 as the main performance appraisal target, to implement the Business Partner Stock Ownership Plan for the core management personnel of the Company (including subsidiaries) who play an important role in the overall performance and development of the Company, including directors (excluding independent directors), general managers, deputy general managers, senior directors and directors, and to provide stock option incentives for 142 middle management personnel and core technical (business) backbone of the Company. On April 30, 2021, the first extraordinary general meeting of shareholders of the Company in 2021 deliberated and adopted the above proposals, and determined May 10, 2021 as the first grant date of stock options under this Stock Option Incentive Plan, with - 123 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 3,130,000 stock options granted and 138 persons granted in 2021. The Company used the internationally accepted Black-Scholes Option Pricing Model to estimate the fair value of the stock options granted for the first time under this Plan. The amount of the services obtained in the current period included in the related costs and capital reserve was RMB 2,422,022.38. On March 31, 2022, the Company held the Ninth Meeting of the Fifth Session of the Board of Directors, and deliberated and adopted relevant proposals such as the 2022 Stock Option Incentive Plan (Draft). It was decided to take the operating income from 2022 to 2024 as the main performance appraisal target, and to provide stock option incentives for 285 middle management personnel and core technical (business) backbone of the Company. On April 21, 2022, the first extraordinary general meeting of shareholders of the Company in 2022 deliberated and adopted the above proposals, and determined May 10, 2022 as the first grant date of stock options under this Stock Option Incentive Plan, with 4,810,000 stock options granted and 285 persons granted in 2022. On May 26, 2022, the Company completed the registration of the grant of the Stock Option Incentive Plan. As the departed employees did not have the qualification of incentive targets, the number of incentive targets actually granted under this Stock Option Incentive Plan was adjusted from 285 to 282, and the total number of stock options actually granted was adjusted from 4.81 million to 4.78 million, accounting for 0.50% of the current total capital stock of the Company. The Company used the internationally accepted Black-Scholes Option Pricing Model to estimate the fair value of the stock options granted for the first time under this Plan. The amount of the services obtained in the current period included in the related costs and capital reserve was RMB 1,576,343.89. As of June 30, 2022, the Company has no other significant events that need to be disclosed. XVII. Notes to Main Items of the Financial Statements of the Parent Company 1. Accounts receivable (1) Classified disclosure of accounts receivable In RMB Ending balance Beginning balance Book balance Bad debt reserve Book Book balance Bad debt reserve value Type Percenta Book Percentag Percentage e of Percentage ge of value Amount Amount Amount Amount provision (%) provision (%) Accou nts receiva 791,884 33.47% 704,414 88.95% 87,470, 628,127 29.39% 551,636 87.82% 76,490, ble ,407.62 ,394.12 013.50 ,248.06 ,286.07 961.99 with individ ual bad debt provisi ons Including: - 124 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Provisi 791,884 33.47% 704,414 88.95% 87,470, 628,127 29.39% 551,636 87.82% 76,490, on by ,407.62 ,394.12 013.50 ,248.06 ,286.07 961.99 individ ual item Accou nts 1,573,8 1,480,2 1,509,3 1,420,2 receiva 66.53% 93,580, 5.95% 70.61% 89,120, 5.90% 14,171. 33,587. 21,539. 00,865. ble 584.45 674.12 66 21 72 60 with a collecti ve bad debt provisi on Including: Accou 49,434, 2.09% 0.00% 49,434, 13,799, 0.64% 13,799, nts 128.61 128.61 399.00 399.00 receiva ble groupe d accordi ng to related parties Multiple accounts receivab 1,524,3 1,430,7 1,495,5 1,406,4 93,580, 89,120, le which 80,043. 64.44% 584.45 6.14% 99,458. 22,140. 69.97% 674.12 5.96% 01,466. are 05 60 72 60 grouped by expected credit loss based on their age characte ristics and with a collectiv e bad debt provisio n 2,365,6 1,567,7 2,137,4 1,496,6 Total 100.00% 797,994 33.73% 100.00% 640,756 29.98% 98,579. 03,600. 48,787. 91,827. ,978.57 ,960.19 28 71 78 59 - 125 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Individual bad debt provision: Provision for bad debts by individual item In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Reasons for provision Unit 1 613,202,711.42 613,202,711.42 100.00% Debt default Unit 2 68,795,196.31 13,759,039.26 20.00% Debt rollover Unit 3 27,760,507.34 19,432,355.14 70.00% Full recovery is expected to be difficult Unit 4 20,766,804.51 14,536,763.16 70.00% Full recovery is expected to be difficult Unit 5 19,980,052.93 13,986,037.05 70.00% Full recovery is expected to be difficult Unit 6 14,247,715.67 9,973,400.97 70.00% Full recovery is expected to be difficult Unit 7 9,243,574.60 6,470,502.22 70.00% Full recovery is expected to be difficult Unit 8 8,070,171.98 5,649,120.39 70.00% Full recovery is expected to be difficult Unit 9 3,654,431.88 2,558,102.32 70.00% Full recovery is expected to be difficult Unit 10 2,887,210.93 2,021,047.65 70.00% Full recovery is expected to be difficult Unit 11 1,773,645.05 1,773,645.05 100.00% Debt default Unit 12 1,502,385.00 1,051,669.49 70.00% Full recovery is expected to be difficult Total 791,884,407.62 704,414,394.12 Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics, their bad debts are provided for collectively. In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Within 1 year 1,262,166,953.38 63,108,347.67 5.00% 1--2 years 243,801,231.91 24,380,123.19 10.00% 2--3 years 12,395,441.23 2,479,088.25 20.00% 3--4 years 4,531,460.52 2,265,730.26 50.00% 4--5 years 688,304.63 550,643.70 80.00% More than 5 years 796,651.38 796,651.38 100.00% Total 1,524,380,043.05 93,580,584.45 Collective bad debt provision: Accounts receivable grouped according to related parties with a collective bad debt provision In RMB Ending balance Name Book balance Bad debt reserve Percentage of provision Accounts receivable grouped 49,434,128.61 according to related parties Total 49,434,128.61 If the bad debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the disclosure methods of other receivables to disclose the relevant information about the provision for bad debts: □Applicable √Not applicable - 126 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Disclosed based on the aging of receivables In RMB Aging Ending balance Within 1 year (including 1 year) 1,524,263,631.65 Within 1 year (including 1 year) 1,524,263,631.65 1-2 years 668,877,985.79 2-3 years 164,117,526.11 More than 3 years 8,439,435.73 3-4 years 6,805,809.32 4-5 years 836,975.03 More than 5 years 796,651.38 Total 2,365,698,579.28 (2) Bad debt provision, and its recovery or reversal in the current period Provision for bad debts in the current period: In RMB Amount of change in the current period Type Beginning Ending balance balance Provision Recovery or Write- reversal Others off Bad debt reserves for 640,756,960.19 183,880,301.16 26,642,282.78 797,994,978.57 accounts receivable Total 640,756,960.19 183,880,301.16 26,642,282.78 797,994,978.57 (3) Top five debtors with the biggest ending balances of receivables In RMB Unit Ending balance of accounts Proportion in the total ending Ending balance of bad debt receivable balance of accounts receivable reserves Unit 1 614,426,565.71 25.97% 37,344,885.46 Unit 2 422,007,941.34 17.84% 422,007,941.34 Unit 3 95,125,955.20 4.02% 95,125,955.20 Unit 4 68,013,931.65 2.88% 3,400,696.58 Unit 5 55,059,796.18 2.33% 2,752,989.81 Total 1,254,634,190.08 53.04% 2. Other receivables In RMB Item Ending balance Beginning balance Other receivables 92,064,235.68 66,149,239.78 Total 92,064,235.68 66,149,239.78 (1) Other receivables 1) Classification of other receivables by nature - 127 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 In RMB Nature of receivable Initial book balance at the beginning of the Book balance at the end of the period period Collections by a third party 61,100,121.97 39,389,486.99 Security/guarantee deposits 29,918,951.94 41,547,121.13 Related transactions 4,064,000.00 4,064,000.00 Withholdings 5,433,817.70 2,646,050.39 Cash reserve 5,764,647.00 966,513.08 Others 3,607,713.93 6,021.99 Total 109,889,252.54 88,619,193.58 2) Bad debt provision In RMB Phase I Phase II Phase III Bad debt reserve Expected credit loss over the Expected credit loss over the Total Expected credit loss entire duration (without credit entire duration (with credit over the next 12 months impairment) impairment) Balance on 22,469,953.80 22,469,953.80 January 1, 2022 Balance on January 1, 2022 in the current period Provision in the current period -4,644,936.94 -4,644,936.94 Balance on June 30, 2022 17,825,016.86 17,825,016.86 Changes in the book balance with significant change in amount of the loss provision in the current period □Applicable √ Not applicable Disclosed based on the aging of receivables In RMB Aging Ending balance Within 1 year (including 1 year) 87,599,700.03 Within 1 year (including 1 year) 87,599,700.03 1-2 years 6,163,068.61 2-3 years 1,935,029.70 More than 3 years 14,191,454.20 3-4 years 3,004,501.80 4-5 years 1,234,124.00 More than 5 years 9,952,828.40 Total 109,889,252.54 3) Bad debt provision, and its recovery or reversal in the current period Provision for bad debts in the current period: In RMB Amount of change in the current period Type Beginning balance Recovery or Ending balance Provision Write-off Others reversal - 128 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 Bad debt provision for other 22,469,953.80 -4,644,936.94 17,825,016.86 receivables Total 22,469,953.80 -4,644,936.94 17,825,016.86 4) Top five debtors with the biggest ending balances of other receivables In RMB Proportion in the total Ending balance of Unit Nature of receivable Ending balance Aging ending balance of other bad debt provision accounts receivable Unit 1 Collections by a third 27,716,044.47 Within 1 25.22% 1,385,802.22 party year Unit 2 Withholdings 5,416,389.09 Within 1 4.93% 270,819.45 year Unit 3 Security/guarantee 4,928,000.00 More than 4.48% 4,928,000.00 deposits 5 years Unit 4 Borrowings 4,064,000.00 More than 3.70% 4,064,000.00 5 years Unit 5 Security/guarantee 1,660,000.00 Within 1 1.51% 83,000.00 deposits year Total 43,784,433.56 39.84% 10,731,621.67 3. Long-term equity investment In RMB Item Ending balance Beginning balance Impairment Impairment Book balance Book value Book balance Book value provision provision Investments in 257,215,768.06 20,400,000.00 236,815,768.06 257,032,370.17 20,400,000.00 236,632,370.17 subsidiaries Investments in 2,457,242.59 0.00 2,457,242.59 5,405,129.91 0.00 5,405,129.91 joint ventures and associated companies Total 259,673,010.65 20,400,000.00 239,273,010.65 262,437,500.08 20,400,000.00 242,037,500.08 (1) Investment in subsidiaries In RMB Increase/decrease in the current period Neg Ending balance of Beginning balance Provisio Ending balance (book Investee ative impairment (book value) n for Oth value) Additional inve provision investment impairm er stme ent nt Shengzhou Kinde 162,320,000.00 162,320,000.00 Intelligent Kitchen Appliances Co., Ltd. Hangzhou MingQi 52,028,217.25 183,397.89 52,211,615.14 Electric Co., Ltd. - 129 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 De Dietrich 630,900.00 630,900.00 20,400,000.00 Household Appliances Trading (Shanghai) Co., Ltd. Shanghai Robam 5,838,272.10 5,838,272.10 Appliances Sales Co., Ltd. Beijing Robam 5,814,980.82 5,814,980.82 Appliances Sales Co., Ltd. Hangzhou Robam 10,000,000.00 10,000,000.00 Fuchuang Investment Management Co., Ltd. Total 236,632,370.17 183,397.89 236,815,768.06 20,400,000.00 (2) Investment in joint ventures and associated companies In RMB Increase/decrease in the current period Adjust Ending Cash ment Othe balance Add Neg divide Prov Beginning Investment profit of r of ition ativ nds or ision Ending balance Investee balance (book or loss other chan impairm al e profits for Oth (book value) value) recognized using compr ges ent inve inve declare impa er the equity ehensi in provisio stm stm d and irme method ve equit n ent ent distrib nt incom y uted e I. Joint venture De Dietrich 3,661,700.03 -2,538,958.01 1,122,742.02 Trade (Shanghai) Co., Ltd. Subtotal 3,661,700.03 -2,538,958.01 1,122,742.02 II. Associated companies Zhejiang Tingshuo 1,743,429.88 -408,929.31 1,334,500.57 Brand Operation and Managem ent Co., Ltd. Subtotal 1,743,429.88 -408,929.31 1,334,500.57 Total 5,405,129.91 -2,947,887.32 2,457,242.59 0.00 - 130 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 4. Operating income and operating cost In RMB Amount of the current period Amount of the previous period Item Income Cost Income Cost Main business 4,044,712,473.72 2,113,758,543.93 3,860,204,084.81 1,841,874,747.10 Other businesses 114,887,076.86 33,163,443.14 97,090,873.20 25,560,127.41 Total 4,159,599,550.58 2,146,921,987.07 3,957,294,958.01 1,867,434,874.51 5. Investment income In RMB Item Amount of the current period Amount of the previous period Income from long-term equity investments -2,947,887.32 -1,440,070.07 accounted for using the equity method Investment income during holding of financial 20,586,968.04 53,886,727.88 assets for trading Total 17,639,080.72 52,446,657.81 6. Others XVIII. Supplementary Information 1. Breakdown of non-recurring profits and losses in the current period √Applicable □Not applicable In RMB Item Amount Description Gains and losses from disposal of non-current assets -34,179.72 Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal 70,291,099.51 business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) Reversal of provision for impairment of receivables separately tested 35,248,286.47 for impairment Other non-operating income and expenses except the above items 1,209,871.06 Less: Affected amount of income tax 16,069,241.63 Affected amount of minority shareholders’ equity 2,941,538.51 Total 87,704,297.18 -- Other items of gains and losses meeting the definition of non-recurring gains and losses: □Applicable √Not applicable The Company does not have other items of gains and losses meeting the definition of non-recurring gains and losses. Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred to as “Announcement No.1”) are defined as recurring gains and losses □Applicable √Not applicable - 131 - Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 2. Return on equity and earnings per share (EPS) EPS Profit within the Reporting Period Weighted average return on net assets Basic earnings per share (EPS) Diluted EPS (RMB/share) (RMB/share) Net profit attributable to common 8.05% 0.76 0.76 stockholders of the Company Net profit attributable to common shareholders of the Company after 9.49% 0.83 0.83 deducting non-recurring profits and losses 3. Accounting data differences under domestic and foreign accounting standards (1) Differences of net profits and net assets in the Financial Reports disclosed as per the IAS and CAS □Applicable √Not applicable (2) Differences of net profits and net assets in the Financial Reports disclosed as per the foreign accounting standard and CAS □Applicable √Not applicable (3) Explanation on the reasons for accounting data differences under domestic and foreign accounting standards shall be made, and where data audited by an overseas audit institution has been adjusted based on the differences, the name of the overseas audit institution shall be indicated. - 132 -