Haier Smart Home Co., Ltd. 2021 Annual Report
Company Code ： 600690.SH, 690D.DE Short Name ： Haier Smart Home
Haier Smart Home Co., Ltd.
2021 Annual Report
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Haier Smart Home Co., Ltd. 2021 Annual Report
Important Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of
Haier Smart Home Co., Ltd. (‘the Company’) hereby assure that the content set out in the annual
report is true, accurate and complete, and free from any false record, misleading representation or
material omission, and are individually and collectively responsible for the content set out therein.
II. All Directors of the Company have attended the board meetings.
III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified audit report
for the Company.
IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of the
Company) and Ying Ke (the person in charge of accounting department) hereby certify that the
financial report set out in the annual report is true, accurate and complete.
V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reporting period
resoluted and adopted by the Board
Proposal of profit distribution for the reporting period are examined and reviewed by the Board: to
declare a cash dividend of RMB4.60 per 10 shares (tax inclusive) to all shareholders based on the total
number of shares held on record date and after deducting the repurchased shares from the repurchase
account in respect of the future distribution proposal, with proposed distribution amounting to
RMB4,320,413,011.54 (tax inclusive). The proportion of cash distribution is 33.1% of the net profit
attributable to shareholder of parent company of the Company for the year. If there is any change in the
total share capital of the Company during the period from the date of this report to the record date of the
equity distribution, the total distribution amount will be remained unchanged with corresponding
adjustment to the proportion of distribution per share.
VI. Disclaimer in respect of forward-looking statements
√ Applicable □Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this report do
not constitute the Company’s substantial commitment to investors. Investors are advised to pay attention
to investment risks.
VII. Is there any fund occupation by controlling shareholders and their related parties for non-
operational purposes?
No
VIII. Is there any provision of external guarantee in violation of the prescribed decision-making
procedures?
No
IX. Are there more than half of the Directors who are unable to guarantee the truthfulness, accuracy
and completeness of the annual report disclosed by the Company?
No
X. Important Risk Warnings
For the possible risks which the Company may encounter, please refer to the relevant information set out in the
section of ‘MANAGEMENT DISCUSSION AND ANALYSIS’ in this report.
XI. Others
□ Applicable √ Not Applicable
Chairman: Liang Haishan
Haier Smart Home Co., Ltd
30 March 2022
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Contents
LETTER TO SHAREHOLDERS 4
SECTION I DEFINITIONS 11
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY 13
FINANCIAL INDICATORS
SECTION III MANAGEMENT DISCUSSION AND ANALYSIS 20
SECTION IV CORPORATE GOVERNANCE 61
SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 111
SECTION VI SIGNIFICANT EVENTS 120
SECTION VII CHANGES IN ORDINARY SHARES AND INFORMATION 146
ABOUT SHAREHOLDERS
SECTION VIII RELEVANT INFORMATION OF PREFERRED SHARES 157
SECTION IX RELEVANT INFORMATION OFCORPORATE BONDS 158
SECTION X FINANCIAL REPORT 166
(I) Financial statements with signatures and seals of the legal representative, chief
accountant and person in charge of accounting department.
DOCUMENTS
(II) Original audit report with seals of accounting firm, signatures and seals of registered
AVAILABLE
accountants.
FOR
(III) Originals of all documents and announcements of the Company which have been
INSPECTION
publicly disclosed on the newspaper designated by China Securities Regulatory
Commission during the reporting period.
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Letter to Shareholders
2021 was no doubt another year full of challenges. The COVID-19 pandemic has changed life and
work patterns. While consumption has yet to fully recover, the global supply chain was confronted by
various factors such as the chip shortage and insufficient logistics capacity. 2021 was also the first fiscal
year following the integration of Haier Electronics into Haier Smart Home. With unyielding dedication
of 100,000 Haier Smart Home innovators around the world, we have delivered more than 110 million
unit of home appliances to consumers worldwide and reported best business result ever, including all-
time-high sales revenue and net profit. By upholding entrepreneurial spirit since day one, we have firmly
implemented strategies of global brand creation, scenario-based innovation, and efficiency enhancement
by digitalization. 2021 represents the year when Haier Smart Home made significant progress in fulfilling
its mission to provided customized better living experience for families around the world.
Key Accomplishments:
Record-breaking revenue and profit: In 2021, the Company delivered revenue of RMB 227.556 billion,
representing 15.8% growth of organic revenue (excluding impact from disposed businesses). Also in
2021, the Company achieved net profit of RMB 13.217 billion, representing an increase of 16.7% as
compared to 2020. Net profit attributable to the owner of the parent company was RMB 13.067 billion,
representing growth of 47.1% from 2020.
Realizing synergy due to integration with Haier Electronics: The Company's operational efficiency
has been enhanced. In 2021, selling expense ratio was 16.1% and administrative expense ratio was 4.6%,
representing optimization of 1.1 and 0.5 percentage points from 2020 on a comparable basis respectively.
High quality growth: In 2021, the Company's cash flow from operating activities was RMB 23.130
billion, representing increase of RMB 5.52 billion from 2020. Net cash flow from operation activities to
net profit was 1.75.
Efforts to grow overseas business yielding results: Overseas business achieved record-high revenue
and profitability: overseas revenue reached RMB 113.725 billion, a growth of 13% from 2020; operating
profit amounted to RMB 5.926 billion, an increase of 48.1% from 2020.
High-end brands achieved rapid growth: (1) In China, Casarte’s sales revenue crossed RMB 10 billion
mark and reached RMB 12.9 billion, representing a year-on-year increase of more than 40%. (2) In
United States, our high-end brands Monogram, Café and GE Profile achieved over 40% growth rate.
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Alignment of management and shareholder interests: We for the first time established a global
management and employee equity incentive scheme based on the Haier Smart Home listed company
incentive platform, which comprised incentive tools such as restricted stock units and options. These
performance-based schemes further align interests of our management and shareholders.
Sustainable long-term development: The Fortune Magazine published the Fortune Global 500 in 2021.
Haier Smart Home was featured once again, moving up 30 places from 2020. In 2022, Fortune Magazine
named Haier Smart Home as one of the 2022 World’s Most Admired Companies. The Company was the
only company outside the United States listed in the Home Equipment and Furnishings category.
Harmonious employee relations: Haier Smart Home has strived to protect the health and safety of our
employees in areas affected by COVID-19, while maintaining our pledge to deliver quality service to
customers. In China, being Haier Smart Home’s home market, not a single employee’s living or health
suffered due to the pandemic. In the United States, the largest overseas market of our company, GE
Appliances was among the top 20 in the 2021 list of Healthiest 100 Workplaces in America and came
second as The Employers with the Healthiest Work Environment of Kentucky in 2021.
Remarkable results in technological progress: Haier Smart Home Air Conditioning, together with
other R&D institutes, won the “National Award for Science and Technology Progress Second Grade”
prize in November 2021 for the development of the “Theory of Building Thermal Environment and
related Key Technologies for Green Construction”. As China’s most acclaimed technology award, the
National Award for Science and Technology Progress recognizes major technological breakthroughs and
creative contributions by Chinese people and organizations in various fields.
According to the ‘2021 Global Smart Home Invention Patent Top100’ released by IPRdaily, Haier
Smart Home occupied the first place with 4,535 published patent applications in 2021. In the same year,
GEA was named the ‘Smart Home Appliance Company of the Year’ by IoT Breakthrough for the fourth
consecutive year in the United States.
Growth Opportunities and strategic initiatives
Achievements of 2021 is behind us. In 2022, we may face challenges such as declining demand in
China’s real estate market, elevated international shipping costs and high commodity prices. However,
the Company will remain proactive and fully committed to achieving rapid growth in 2022, with growth
coming from capturing leadership positions in categories with high growth potential, as well as from
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innovating service models and creating new revenue stream surrounding Haier Smart Home's loyal user
base.
The Company currently operates three main categories of products – 1) major home appliances
including refrigerators, washing machines, kitchen appliances; 2) heating, ventilation, and air
conditioning (HVAC) category including air conditioners, water heaters and water purifiers; and 3) small
home appliances. Consumer preference and technological trends relating to these three categories are
different. At this stage, Haier Smart Home’s market positions and competitive edge also vary in these
three areas. However, we will assemble all necessary resources, including talents and funds, to tackle our
weakness and support high-quality sustainable development in the next three years.
Since the outbreak of the pandemic in 2020, consumers’ expectations for home living experience
have become higher and higher. Their demand for better health, food freshness preservation, nutrition
and IoT have ceaselessly propelled the innovation of kitchen appliances. In 2021, the unit price of
refrigerator and kitchen appliances has recorded material surge, exhibiting an increasingly obvious trend
in product upgrade. Haier Smart Home’s comprehensive brand portfolio and proactive innovation based
on consumer insights have allowed us to deliver more competitive refrigerators and kitchen appliances,
thereby to achieving growth rate double that of the worldwide industry. Global R&D platform of Haier’s
refrigerator has provided support to the rapid growth of refrigerators in the European and Australian
markets, while the solid competitive edge of GEA and FPA kitchen appliances have continuously
strengthened the competitiveness of kitchen appliances in the China market. All of these demonstrate
Haier Smart Home’s competitive edge in global product R&D and operation system.
In terms of clothing caring, the Company's product range and technologies portfolio are a long way
ahead of our competitors. High-end products such as the Twin two-in-one washing and drying machine
have been highly recognized by the market, which enabled us to cement a leading position in the market
segment. Great user reputation and strong R&D capabilities of Haier’s washing machine have enabled
us to make breakthrough in the dryer market in China in 2021, recording a revenue increase of 203% and
topping the industry in terms of market share. In the United States, the sales volume of large volume
front-loads washing machine which was created with our integrated global R&D resources has reached
550,000 units in 2021, representing growth exceeding 30% as compared to 2020.
Having established a leading market position in the categories of kitchen taste and clothing caring,
Haier Smart Home’s plan for the next three years is to further expand our leading edge, increase our
market share and profit margins in various markets around the globe.
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For the HVAC and water appliances businesses, such categories require professional interior finish
and have a longer product cycle. The core competitive elements lie in whole supply chain cost
competitiveness and technical consistency, as well as support by professional channel. In 2021, the
Company achieved a market share of over 40% for electric water heaters, and the revenue of gas water
heaters recorded a year-on-year increase of 51%. We have also gained further market share in the highly
fragmented gas water heater market. Consistent investments in combustion technology, sterilization
materials and energy efficiency technology have enabled us to have the largest market share in water
heater business in China. In the United States, GEA's water heater plant in South Carolina is also going
to deliver high-quality gas water heater products to American consumers.
The Company came in third place in China’s domestic air conditioning market, with market share
increased by more than 2 percentage points in 2021. In the commercial air conditioning market, with our
magnetic bearing compressor technology solution which has the technological advantages of high
energy efficiency, low operating costs and minimal noise, we have achieved 50% market share in this
sub-segment. In 2022, the Company will ramp up investments in the core components of the air
conditioning industry and develop distributor channels in collaboration with other internal businesses
such as the water heater business, so as to realize large-scale and high-quality development of our air
conditioning business.
After preparation of half year, we announced in late 2021 the investment plan for launching a small
home appliance business division to further invest in emerging categories of home appliances, such as
cleaning appliances, small kitchen appliances, and personal care gadgets. The small home appliance
industry is having three favorable growth drivers – technological upgrade, smart interconnection, and
innovative experience. It is also becoming an industry with a global integrated supply chain, with
majority of production based in China. Meanwhile, small home appliances are becoming smarter. For
example, in the field of vacuuming robots, sensors, scenarios, and interactions produce wealth of data,
which enable replacement of manual labor by automatic cleaning. The merge of innovative experience
with technological breakthrough has redefined a new market for automatic vacuuming robots and
automatic floor cleaners, ushering the industry into a stage of rapid growth.
Through focused investment in categories with high growth potential, I believe Haier Smart Home
can become one of the key players in the thriving small home appliance market. This business line may
potentially contribute 10% of the Company's revenue in the next three years and can become a crucial
part of Haier Smart Home’s smart home scenarios. The development of small home appliance business
will ride on Haier’s brand strength, global scale, in-depth user insight and product definition capabilities,
and will take the form of a jointly built ecosystem alliance, accelerating its development through
collaborations. Haier Smart Home will make full use of China’s ample manufacturing capacity of small
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home appliances and pull together global technological resources to provide users around the world with
healthy, smart, and joyful consumption experience with small home appliances.
Haier Smart Home will fully leverage the benefits of globalization. In China, we intend to further
capture growth opportunities arising from market consolidation in all categories. In the United States,
strong momentum in the real estate market and infrastructure construction will power home appliance
consumption. In Europe and other markets, we have great potential to increase market shares in various
product categories.
Executional Enablers ： Leverage strength and attack weakness
Growth does not appear out of nowhere. The realization of growth depends on the resolute pursuit
of the Company’s mission by all Haier makers as well as our forward-looking and sustainable business
model. As a Fortune Global 500 company, Haier Smart Home is always ambitious. Our culture and
management system encourage all management staff and employees to push through their own limits
and take on challenges. Merely following market average growth demonstrates incompetence.
In 2022 and years to come, we may still live in an era when human co-exists with COVID-19 and
global macro-economic environment becomes more volatile. The pandemic has had a significant impact
on the home appliance industry. It has changed the operating environment of enterprises, people’s mode
of working, and consumers’ shopping patterns. It has also accelerated technology advancement and
application of information technology, and digitalization reshaped operation model of businesses.
Enterprises that strive to adapt to this environment will become more resilient and capable of gaining the
trust of broader users. Meanwhile, shareholders, employees, customers, communities and governments
in both China and other regions expect enterprises to shoulder more social responsibilities and promote
sustainable economic development. In my opinion, by adhering to our strategies of global brand creation,
localized operations, hyper-focus on user experience, and persisting in process reengineering by
digitalization, Haier Smart Home will become more resilient in coping with challenges due to volatile
economic climate, while paving a solid foundation for sustainable growth.
Haier has implemented localized operations in major markets around the world with majority of
products sold in regional markets coming from local production with the dedication of local employees
and by encouraging continued investment in local communities. For larger markets such as the United
States, Japan, and India, we are widely recognized as a local corporate citizen who have made significant
contribution to the respective local economy. GE Appliances, a wholly owned subsidiary of Haier in the
United States, has been the largest investor in the local United States appliance industry for the past five
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years. Since Haier's acquisition of GE Appliances, we have supported its expansion of local supply chain,
built new factory, and increased local investment. In the past five years, 3,000 new jobs have been created
with new investment exceeding USD 2 billion. By bringing Haier's local brands closer to consumers and
integrating them into the local community, while taking advantage of the parent company's technological
and operating platforms, such a business model will help us avoid adverse impacts such as trade barriers
and obtain more sustainable competitive advantages.
Haier Smart Home has implemented a global high-end brand creation strategy and strives to gain
a prominent position in the high-end market. The reason why we maintain focus on the high-end market
is our belief that fulfilling the ultimate experience of consumers is the driving force of our Company's
progress. Home appliances are not only functional but could also be artistic, aesthetic, and technological.
For example, we have launched a zero-distance built-in refrigerator in line with the trend of home
appliance and home furnishing integration, and introduced novel product such as the "Zhongzihemei"
( 美和子中 ) laundry combo which can perform three functions of washing, drying and fabric caring
within one machine. High-end brand strategy also enables us to generate greater user value to offset the
adverse impacts from commodity and labor costs.
The Company’s leading position in the field of major home appliances is not only attributed to its
market share, but also in its dedicated attention to customer experience, which creates one generation of
exquisite and amazing products after another. The key lies in the coordination between the systems of
product innovation and customer interaction. Since our establishment, we have been focusing on what
our customers desire, creating standards for quality and services in China. Consumers’ recognition is
Haier’s achievement. Such value system is not merely slogan but has deeply fused into the ideology of
top management and front-line personnel. Going forward, more and more interactions will take place on
e-commerce channels and online communities. In addition to humanized face-to-face channels, we will
strengthen digital marketing and develop a big data interactive system for countless users.
Cloud computing, big data and IoT offer massive possibilities for more agile and intelligent
enterprise operations in the future, and Haier Smart Home should also evolve to adapt. In 2022, we will
strive to promote processes reengineering driven by digitalization and press forward with the
optimization of operational efficiency from digitalization of R&D and design, logistics and service
processes, and interconnected factories. Haier Smart Home’s key process reengineering project in 2022
aims to realize digitalization of inventory management in the entire end-to-end supply chain process and
optimize the allocation of working capital.
Entering 2022 with High Confidence
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Mainstream view of the market is that it will become increasingly difficult for leading enterprises
to maintain relatively high growth in a mature industry such as home appliances. But I am optimistic that
Haier Smart Home will enjoy unique growth opportunities. First, our strategic planning and core
competencies are highly aligned, with the management of Haier Smart Home adhering to the original
vision of Haier’s first-generation entrepreneurs like never before. In other words, all Haier makers are to
promise global consumers a wonderful home life beyond their imagination, and to become their most
reliable partner for designing and serving their home requirements and creating smart experiences.
Furthermore, technological advances are driving the home appliances industry to become an
increasingly imaginative sector. All Haier team members around the world expect to participate in and
influence this historic process of innovation. Washing machine has first freed us from time constraints.
Large refrigerators not only keep our food fresh, but also save the need for frequent shopping trips, then
there is the ideal air environment that we can enjoy. Coming up next, the integration of technology and
scenarios will become a stronger driving force. Oven and pre-prepared meal enable consumers to enjoy
cuisine of master chef’s quality at home, and consumer robots will take care of cleaning and food
preparation. Technology will enrich our lives in ways beyond our expectations, and it is inevitable that
consumers, whether in China, the United States or Europe, will love and embrace the excitement brought
by technologically advanced home appliances. Haier Smart Home’s mission is to elevate to a whole new
level through creating products and innovating services, providing consumers iterative upgrades of
products and service experience that integrate technological innovation, personalized services, and smart
home scenarios.
In 2022, our established strategy will continue to be firmly implemented. Ahead of us is a
challenging, long-term, and fruitful journey, while our ride to the future gives all of us at Haier a chance
to carry out our mission and contribute to the well-being of all stakeholders. Lastly, I would like to thank
our users around the world for choosing Haier and all our shareholders for their trust in Haier Smart
Home!
Chairman of Haier Smart Home Co., Ltd: Liang Haishan
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Section I Definitions
I. DEFINITIONS
Unless otherwise stated in the context, the following terms should have the following meanings in this
report:
Definition of frequently used terms
CSRC China Securities Regulatory Commission
SSE Shanghai Stock Exchange
The Company, Haier Smart Home Co., Ltd., its original name is ‘Qingdao Haier Co.,
Haier Smart Home Ltd.’, and the original short name is ‘Qingdao Haier’.
Four Major Securities China Securities Journal, Shanghai Securities News, Securities
Newspapers Times, Securities Daily
Haier Electronics Group Co., Ltd. (a company originally listed in Hong
Kong, stock code: 01169.HK), a subsidiary as accounted for in the
Haier Electrics, 1169 consolidated statement of the Company. Haier Electrics has been
privatized by way of H shares issuance on 23 December 2020 and
became a wholly owned subsidiary of the Company since then.
GE Appliances, household appliances assets and business of General
GEA
Electric Group, have currently been owned by the Company.
Fisher & Paykel Appliances Holdings Limited (Chinese name: 雪斐
克派 ), was established in 1934 and is known as the national appliance
brand of New Zealand, the global top-level kitchen appliance brand
and the famous luxury brand of the world. It has products including
FPA
ventilator, gas stove, oven, dishwasher, microwave oven, built-in
freezer, washing machine, clothes dryer and etc. Its business covers
over 50 countries/regions across the world. FPA is a wholly-owned
subsidiary of the Company.
Candy Group (Candy S.p.A), is an international professional
appliances manufacturer from Italy. Since its establishment in 1945, it
has been committed to enabling the global users to enjoy a higher
quality of life through innovative technologies and quality services.
Candy
Candy Group has been prestigious in the global market with users all
over the world via its ten self-owned professional household appliance
brands. In January 2019, Candy became a wholly-owned subsidiary of
the Company.
China Market Monitor Co., Ltd., as an authoritative market research
institute in Chinese household appliances area, was established in
CMM
1994 and has been focusing on research of retail sales in China
consumption market ever since.
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Euromonitor, established in 1972, is the leading strategic market
information supplier and has over 40-years of experience in respect of
Euromonitor publishing market report, commercial reference data and on-line
database. They create data and analysis on thousands of products and
services around the world.
All View Cloud (AVC) is a big data integrated solution provider to the
All View Cloud smart home field, providing enterprises with big data information
services, regular data information services and special data services.
The International Electrotechnical Commission, founded in 1906, is
the world’s first organization for the preparation and publication of
international electrotechnical standardization and is responsible for
international standardization for electrical engineering and electronic
engineering. The goals of the commission include: to effectively meet
the needs of the global market; to ensure that the standards and
IEC
conformity assessment programs are applied globally in a prioritized
manner and to the greatest extent; to assess and improve the quality of
products and services involved in its standards; to create conditions for
the common use of complicated systems; to improve the effectiveness
of the industrialization process; to improve human health and safety,
and to protect the environment.
The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information science
engineers, is currently the largest non-profit professional technology
society in the world. It is committed to the development and research
IEEE of electrical, electronic, computer engineering and science-related
fields, and has now developed into an international academic
organization with great influence in terms of the fields of space,
computer, telecommunications, biomedicine, power and consumer
electronics.
The concept of ‘Achieving win-win via RenDanHeYi’is the guarantee
of Haier's sustainable operation and the driving force of the Company
featuring a self-motivated and empowering corporate culture. “Ren” is
Model of an employee who has the spirit of entrepreneurship and innovation;
RenDanHeYi “Dan” is to create value for users. The " RenDanHeYi " management
model encourages employees to create value for users with an
entrepreneurial mindset, and to achieve self-value in line with the those
of the Company and its shareholders.
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Section II General Information of the Company and Key Financial Indicators
I. INFORMATION OF THE COMPANY
Chinese name 司公限 有份股 家智尔海
Chinese short name 家智尔海
English name Haier Smart Home Co., Ltd.
English short name Haier Smart Home
Legal representative Liang Haishan
II. CONTACT PERSON AND CONTACT INFORMATION
Secretary to the Board Representative of Company
securities affairs
Secretary (D/H Others
shares)
Global
Customer
Name Ming Guozhen Liu Tao Ng Chi Yin, Trevor
Service
Hotline
Department of
Department of Securities of Securities of Haier Room 3513, 35th
Haier Smart Home Co., Ltd., Smart Home Co., Ltd., Floor, The Center,
Address Haier Information Industrial Haier Information 99 Queen’s Road /
Park, No.1 Haier Road, Industrial Park, No.1 Central, Central,
Qingdao City Haier Road, Qingdao Hong Kong
City
4006 999
Tel 0532-88931670 0532-88931670 +852 2169 0000
999
Fax 0532-88931689 0532-88931689 +852 2169 0880 /
Email finance@haier.com finance@haier.com ir@haier.hk /
III. SUMMARY OF THE GENERAL INFORMATION
Registered Address Haier Industrial Park, Laoshan District, Qingdao City
Historical Changes to the Registered Prior to the Company’s listing in 1993, the registered
Address address of the Company was No.165 Xiaobaigan Road,
Sifang District, Qingdao City, Shandong Province, and
has changed to the current address since 1994, during
which the address name was adjusted in line with the
change of name of the industrial park but the actual site
remains unchanged.
Business address Haier Information Industrial Park, Laoshan District,
Qingdao City
Postal code of the business address 266101
Website https://smart-home.haier.com/cn/
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Email 9999@haier.com
IV. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT
Newspapers and websites for annual Shanghai Securities News, Securities Times, China Securities
report disclosure Journal, Securities Daily
Stock Exchange Website for annual
report disclosure as designated by the www.sse.com.cn
CSRC
Other websites for annual report https://smart-home.haier.com/cn/ www.xetra.com
， ，
disclosure www.dgap.de https://www.hkexnews.hk
，
Department of Securities of Haier Smart Home Co., Ltd.,
Deposit place of annual report Haier Information Industrial Park, No.1 Haier Road, Qingdao
City
V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY
Summarized information of shares of the Company
Type of Shares Stock Exchange Stock Short Name Stock Code Stock Short Name
of Shares Listed Before Variation
Shanghai Stock
A-shares Haier Smart Home 600690 Qingdao Haier
Exchange
Frankfurt Stock
D-shares Haier Smart Home 690D Qingdao Haier
Exchange
Hong Kong Stock
H-shares Haier Smart Home 6690 /
Exchange
VI. OTHER RELATED INFORMATION
Name Hexin Certified Public Accountants LLP
Accounting firm
24th Floor, Century Building, No.39 Donghai Road
engaged by the Business Address
West, Qingdao City
Company
Name of signing Zhao Bo, Wang Lin
(domestic)
accountant
Name HLB Hodgson Impey Cheng Limited
Accounting firm 31st Floor, Gloucester Tower, The Landmark, 11
engaged by the Business address Pedder Street, Central, Hong Kong Special
Company Administrative Region
(overseas) Name of signing Jack, Tian Sun Kit
accountant
Financial Advisor Name Zheshang Securities Co.,Ltd.
responsible for No. 201, Wuxing Road, Jianggan District, Hangzhou
Business Address
continuing City, Zhejiang Province
supervision Name of signing
Yu Qichao, Wang Jian
during the financial advisors
reporting period Period of continuing 23 December 2020 to 31 December 2021
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supervision
Note:
(1) Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for
the appointment of an auditor approved at the Company's 2020 Annual Shareholders' Meeting, the
Company engaged Hexin Certified Public Accountants LLP and HLB Hodgson Impey Cheng Limited
to issue the China Accounting Standards and International Accounting Standards auditing report
respectively for the Company’s 2021 annual report.
(2) The financial advisor is responsible for continuing supervision: The H shares of the Company
were listed and traded on the Main Board of The Stock Exchange of Hong Kong Limited on 23
December, 2020. In accordance with the relevant requirements of the Material Assets Reorganization,
as the independent financial advisor for the issue, Zheshang Securities Co., Ltd. performs continuous
supervision duties for the remainder of the year in which the H shares of the Company are listed and
one full fiscal year thereafter. In addition, the Company has engaged Anglo Chinese Financial Advisors
Limited (Address: 40th Floor, Exchange Square Phase 2, 8 Connaught Place, Central, Hong Kong;
Sponsor: Stephen Clark) as a compliance advisor in accordance with the requirements of the Hong
Kong Rules, which performs continuous supervision duties during the continuous supervision period
(for the remainder of the year in which the H shares are listed and one full financial year thereafter).
VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE RECENT THREE
YEARS
(I) Key accounting data
Unit and Currency: RMB
Key accounting 2020 Yoy
data 2021 change 2019
Before
After adjustment (%)
adjustment
Operating revenue 227,556,143,618.17 209,723,430,081.03 209,725,821,099.44 8.50 200,761,983,256.57
Net profit
attributable to
13,067,038,271.85 8,883,129,055.16 8,876,593,208.19 47.10 8,206,247,105.96
shareholders of the
listed company
Net profit after
deduction of non-
recurring profit or
11,831,272,558.29 6,457,813,335.37 6,457,813,335.37 83.21 5,765,164,700.75
loss attributable to
shareholders of the
listed company
Net cash flows
from operating 23,129,640,417.72 17,609,513,831.64 17,599,111,715.51 31.35 15,082,630,942.73
activities
At the end of
2020 Yoy
At the end of At the end of
change
2021 Before 2019
After adjustment (%)
adjustment
Net assets 79,810,927,325.55 66,837,525,701.87 66,816,422,614.55 19.41 47,888,319,765.92
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attributable to
shareholders of the
listed company
Total assets 217,459,494,212.74 203,498,169,276.71 203,459,495,879.65 6.86 187,454,236,283.17
(II) Key financial indicators
2020 Yoy
Key financial indicators 2021 After Before change 2019
adjustment adjustment (%)
Basic earnings per
1.41 1.34 1.34 5.22 1.29
share(RMB/share)
Diluted earnings per share
1.40 1.31 1.31 6.87 1.19
(RMB/share)
Basic earnings per share
after deducting non-
1.27 0.97 0.97 30.93 0.90
recurring profit or loss
(RMB/share)
Weighted average return on
17.29 17.68 17.67 -0.39 19.12
net assets (%)
Weighted average return on
net assets after deducting
15.65 12.85 12.85 2.80 13.43
non- recurring profit or loss
(%)
Explanation of the key accounting data and financial indicators of the Company as at the end of the
reporting period for the previous three years
□ Applicable√ Not applicable
VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS
ACCOUNTING STANDARDS
(I) Differences in net profit and net asset attributable to shareholders of listed company in financial
report disclosed in accordance with International Accounting Standards and China Accounting
Standards
□ Applicable √ Not applicable
There is no difference between the net profit and net assets attributable to shareholders of the listed
company presented in the consolidated financial statements disclosed in accordance with International
Accounting Standards and China Accounting Standards.
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(II) Differences in net profit and net asset attributable to shareholders of the listed company in
financial statements disclosed in accordance with overseas accounting standards and China
Accounting Standards
□ Applicable √ Not applicable
Apart from the financial statements prepared in accordance with International Accounting Standards,
the Company did not prepared any financial statements in accordance with other overseas accounting
standards.
(III) Explanation on the difference between the domestic and overseas accounting standards:
□ Applicable √ Not applicable
IX. KEY FINANCIAL DATA OF 2021 BY QUARTER
Unit and Currency: RMB
Q3
Q1 Q2 Q4
(July-
(January-March) (April-June) (October-December)
September)
Operating revenue
54,773,701,753.64 56,845,120,311.09 58,344,749,484.03 57,592,572,069.41
Net profit attributable to
shareholders of the listed 3,053,933,589.63 3,798,338,223.34 3,082,339,695.41 3,132,426,763.47
Company
Net profit after deduction of
non-recurring profit or loss
attributable to shareholders of 2,823,027,182.06 3,446,879,224.66 2,785,809,654.46 2,775,556,497.11
the listed Company
Net cash flows from operating
2,863,386,935.66 5,560,436,791.23 4,935,460,348.29 9,770,356,342.54
activities
Explanation on the difference between quarterly data and disclosed regular reporting data
□ Applicable √ Not Applicable
X. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT
Non-recurring profit and loss items Amount in 2021
Profit and loss from disposal of non-current assets 95,443,538.78
Government subsidies included in current profit or loss, except for government 717,084,575.78
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subsidies that are closely related to the Company's normal business operations,
comply with national policies and regulations, and continue to be enjoyed in a
fixed amount or fixed quantity according to certain standards
Net profit and loss of subsidiaries arising from business combinations under
common control of the current period from the beginning of the period to the -1,015,618.64
date of consolidation
Profit and loss from fair value changes of financial assets held for trading,
derivative financial assets, financial liabilities held for trading and derivative
financial liabilities, as well as investment gains arising from disposal of
512,402,328.52
financial assets held for trading, derivative financial assets, financial liabilities
held for trading and derivative financial liabilities and other debt investments,
except the effective hedging related to the normal operations of the Company
Other non-operating income and expenses except the aforementioned items 60,282,401.05
reduction: Effect of income tax 135,105,480.15
Effect of minority equity interest (After Tax) 13,326,031.78
Total 1,235,765,713.56
XI. ITEMS MEASURED BY FAIR VALUE
√ Applicable □ Not Applicable
Unit and Currency: RMB
Affected amount to
Changes in the
Items Opening balance Closing balance profit of current
current period
period
Forward foreign
-58,007,371.41 142,380,197.33 200,387,568.74 439,056,947.32
currency contract
Wealth
management 1,862,036,322.21 2,168,622,090.00 306,585,767.79 60,499,015.46
products
Investment in
trading equity 83,949,637.05 330,557,610.82 246,607,973.77 46,729,587.36
instruments
Interest rate swap
-50,886,744.60 -19,684,900.48 31,201,844.12
agreement
Investment funds 113,759,845.57 150,516,274.37 36,756,428.80 18,097,485.77
Investment in other 2,659,025,265.54 4,848,709,438.96 2,189,684,173.42 58,558,795.05
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equity
instruments
Forward
commodity 25,644,774.08 6,997,783.42 -18,646,990.66
contract
Other derivative
financial 46,832,494.61 46,832,494.61
instruments
Total 4,682,354,223.05 7,674,930,989.03 2,992,576,765.98 622,941,830.96
XII. Others
□ Applicable √Not Applicable
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Section III Management Discussion and Analysis
I. DISCUSSION AND ANALYSIS ON OPERATIONS
In 2021, the Company realized sales revenue of RMB227.556 billion, representing an increase of
8.5% from 2020 and an increase of 13.3% from 2019. The Company disposed COSMOPlat in the third
quarter of 2020 and RRS Logistics in the third quarter of 2019. Excluding the impact from the disposal,
the Company's revenue growth in 2021 would have been 15.8% and 23.4% as compared to 2020 and
2019 respectively. Robust performance was driven by (1) strengthened high-end market leadership and
enhanced competitiveness in products and scenario-based solutions, while (2) accelerated global
coordination and growing online presence were vital to the expansion overseas, and (3) we also benefited
from continued distribution network expansion & increase in operation efficiency via end-to-end digital
transformation.
In 2021, the Company achieved net profit of RMB13.217 billion, an increase of 16.7% from 2020,
and an increase of 7.2% from 2019. Net profit attributable to the owner of the parent Company was
RMB13.067 billion, an increase of 47.1% from 2020 and an increase of 59.2% from 2019. (1) Faced
with escalating raw material and components costs, the Company still managed to expand gross profit
margin by 1.6 percentage points to 31.2% by leveraging on strong high-end revenue, efficiency initiatives
and disposal of low margin businesses. (2) Selling expense ratio was 16.1% and administrative expense
ratio was 4.6%. Excluding revenue of COSMOPlat in 2020, selling and administrative expense ratio in
2021 would have decreased by 1.1 and 0.5 percentage points respectively as compared to 2020 (including
COMSOPlat, selling expense ratio was 16.0% and administrative expense ratio was 4.8% in 2020). The
cost reduction was mainly due to continuous digital transformation in the Chinese market, rapid growth
overseas and improvement in operational efficiency. (3) Financial expense ratio reduced by 0.3
percentage points to 0.3%, this was mainly due to CB conversion, loan repayments and replacement of
high interest borrowings.
The Company's net cash flow from operating activities in 2021 was RMB 23.13billion, an increase
of RMB 5.52 billion from 2020 and an increase of RMB 8.047 billion from 2019, the growth was
attributable to greater profitability and enhanced efficiency. Net cash flow to net profit ratio was 1.75
during the reporting period.
）（ I Smart Home Business in China
In 2021, sales revenue from smart home business in China amounted to RMB 120.791 billion,
representing an increase of 22.2% from 2020. Operating profit grew by 27.5% to RMB 7.456 billion.
The growth was attributable to increase in market share and 40% revenue growth of Casarte brand as
well as distribution network expansion, accelerated digitalization and improved operational efficiency.
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1. Household Food Storage and Cooking Solutions (Internet of Food)
(1) Refrigerator and Freezer Business
In 2021, refrigerator business achieved sales revenue of RMB 41.743 billion, a year-on-year
increase of 21.4%. According to CMM, Haier’s market share increased by 2.1 percentage points to 41.3%
offline; and market share online went up by 2.7 percentage points to 37.8%.
The refrigeration industry has entered into the next stage of development where volume starts to
stabilize and growth driven primarily replacement demand.Users continue to look for larger storage
space with better preservation technologies, so we doubled the drawer space by moving the refrigeration
units from the back of machine to the bottom, we also introduced new hinge system to create the ultimate
seamless appearance, Casarte’s BCD-600 was an instant best seller contributing to the our market share
reaching 46.7%, in other words, up 2.8 percentage points in units priced above RMB 10,000; Casarte
also made breakthrough on ecommerce platforms where 30,000 units were sold during 618 Festival on
JD.com, the launch of Homey 505 and 506 series put us in no.1 in units priced above RMB 10,000 online.
Refrigerator business invests more in quality control, supply chain management and digital
transformation. During the reporting period, the Company implemented Super Factory Project targeting
capacity maximization, SKU concentration, global coordination and cost optimization, and we also
introduced 3A Engineers Programme and trained 100 cost management specialists.
In addition, enhanced competitiveness of large capacity T-door and French-style refrigerators
contributed to rapid growth in export revenue of units priced over US$1,000 and 1,000.
(2) Kitchen Appliance Business
In 2021, revenue of kitchen appliance segment reached RMB 3.496 billion, an increase of 26.1%
year-on-year, amongst which, Casarte’s revenue surged 95.1%, and its revenue contribution increased
by 7.4 percentage points to 22%. According to CMM, the Company’s market share grew 1.1 percentage
points offline to 7.1% and stayed flat at 5.2% online..
The Company remained committed to implementing high-end brand strategy with fast product
pipelines, introducing kitchen solution packages and improving store experience, while actively
developed partners from home improvement markets.
Meanwhile, dedicated effort was made to promote global coordination. R&D team in China worked
closely with FPA and GEA to develop new motor control technology that could deliver constant volume
of air flow using big data and algorithms. The new 12- square range hood could sense pressure, unclog
pipe and prevent blockage, the Five Ring stove could heat up the entire pan surface to the same
temperature, and built-in steamer ovens led the industry in revenue growth with 300 ℃ heating
temperature, precise control and dual water circulation system. Casarte's Asian style built-in dishwashers
were equipped with 7X cleaning system to provide 360° water coverage at 70°C for effective grease
removal. In 2021, dishwasher sales revenue grew 90% while Casarte’s dishwasher grew by 137.9%.
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During the reporting period, kitchen appliances segment prioritized efficiency improvement and
cost reductions in equipment, quality and production, realizing 35% increase in production capacity on
pre-processing lines without additional manpower. The Company gradually increased the proportion of
self-manufactured large metal parts in range hoods, stoves and ovens to 100%, contributing to increased
profitability.
(3) Internet of Food: integration of appliance and services to add value
Based on Smart Home cloud platform and Three-Winged Bird smart kitchen scenarios, the Internet
of Food integrated smart oven, digital cooking program and standardized pre-prepared dishes to provide
users with brand new experience where they can buy grocery from the oven screen and recreate master
chef’s dishes at home with just a simple click. Together with partners including Mengniu and Shuanghui,
the Company launched the industry’s first IoT-based platform specializing in pre-prepared dishes, since
then, a total of 387,000 roast ducks and 200,000 sets of Chinese New Year dinner have been sold,
realizing a 67% growth year-on-year. New application scenarios featuring B&Bs and offices were also
created.
2. Household Laundry Management Solutions (Internet of Clothing)
(1) Washing machine business
During the reporting period, the Company's washing machine business achieved sales revenue of
RMB 30.658 billion, representing a year-on-year increase of 18.0%. According to CMM, the Company’s
market share reached 43.1% offline, up 2.9 percentage points while market share grew by 0.5 percentage
points to 40.4% online.
In 2021, the Company consolidated high end leadership through continued innovation and captured
growth opportunities from new categories with Casarte’s Zhongzihemei ( 美和子中 )washer & dryer
combo, whose market share grew to 96.5% in top washer + bottom dryer category. The Company’s
tumble dryer revenue grew by 203% and led the market with 32.9% share offline and 24.5% shares online,
growth of 14.8 percentage points offline and 5.8 percentage points online respectively.
Despite pandemic resurgence, shipping constraints, rising commodity prices and currency fluctuation,
the Company remained committed to brand premiumization and mix upgrade in order to maintain solid
growth overseas.
(2) Internet of Clothing
The Internet of Clothing business started from simple washing machines, now it offers a full cycle
of smart scenario solutions including washing, fabric storages, and styling, During the reporting period,
in order to tackle stubborn stains, residual detergent and fabric discolouration, together with leading
detergent manufacturers, the Internet of Clothing team introduced washing machines featuring ink
cartridge type detergent dispenser in an attempt to create brand new experience of healthy and smart
colour care, a total of 160,000 units were sold in 2021.
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3. Air Solutions
During the reporting period, the overall air conditioning business achieved sales revenue of RMB
32.193 billion, an increase of 26.2% from 2020.
(1) Home air conditioning business
The Company adopted an efficient retail model and strived to breakthrough in the mid-to high-end
air conditioning market. We continued to accelerate channel integration, network expansion and scenario
experience upgrade. According to CMM, the Company’s market share increased 2.5 percentage points
to 16.8% offline in 2021, while the share online increased 2.4 percentage points to 13.6%. Meanwhile,
share in the high-end market (wall-mounted units priced above RMB 4,000 and standing units priced
above RMB 10,000) reached 20.2%, an increase of 5.2 percentage points.
By leveraging on multi-brand portfolio and strengthening technological innovation, the Company
filed 2,597 patents in 2021. (1) Casarte launched Galaxy series equipped with the industry's first full-
space constant-temperature air technology that enabled 360° coverage and speedy temperature
adjustment, contributing to the brand’s 56.7 % revenue growth. (2) Inspired by high-speed engines from
aviation industry, Haier launched air conditioners that could cleanse air at home with high-speed
centrifugal waterfall and multi-layer water spray technologies.(3) The household multi-split units
specialized in customized solutions for different user scenarios in the bedroom, kitchen and the basement,
providing users with fresh and healthy air at home.
During the reporting period, 620 new franchise stores specializing in air solutions were developed
with particular efforts made to increase presence in HVAC channels, the Company also capture the new
growth opportunities in lower-tier markets with the addition of 30,000 village sales outlets.
The export revenue maintained steady growth driven by speedy product iterations including health-
boosting air conditioner equipped with a LED-UVC module, Texcell in France verified its 99.998%
inhibitory effect on the novel coronavirus. Featuring a separated air supply system, the new ‘X’
split-type air conditioner could be disassembled in 28 seconds, making cleaning and maintenance much
easier, and this was recognized by SGS with the Easy-to-Clean 5-star rating certificate.
In addition, efficiency of product platform increased by 20% driven by greater production
concentration and manufacturing optimization, while specialized design, installation and service network
was fundamental to drive strong growth online.
(2) Commercial air conditioning business
The Company accelerated development of user-oriented scenario solutions. According to China IoL,
the Company's market share increased 0.9 percentage points to 10.7% offline in 2021.
Commercial air conditioner focused on product and technology innovations in IoT applications,
alternative source of energy and refrigerant. 1. IoT based multi-splits units received wide market
recognition from National Speed Skating Oval and projects in Shigatse prefecture of Tibet for remarkable
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energy-saving performance and advanced warning system. 2. With 50% market share (information
from China IoL), the Company has been leading the industry in maglev air conditioners since its first
introduction in 2006. Our latest energy efficiency, low-cost and low-noise maglev chiller was
widely used in projects including National Supercomputing Centre, Business Service Centre in Xiong ’an,
Underground Line 4 in Chongqing, People's Hospital in Shenzhen, and Shandong Energy Group. 3. The
Company was the first in the industry to introduce full-spectrum air conditioning unit which was widely
used in scenarios with complications such as hospitals in-patient wards, emergency rooms, operating
theatres and negative pressure isolation wards. This technology was also chosen by excavation site of
Sanxingdui for air disinfection and micro management of temperature and humidity level.
4. Household Water Solutions
The water heater and water purifier businesses achieved breakthrough with high-end differentiated
products in 2021 as revenue amounted to RMB 12.701 billion, a year-on-year growth of 24.3%.
(1) Water heaters
During the reporting period, the Company’s water heater business focused on providing safe,
and smart household water solutions. According to CMM, our market share grew 3.5 percentage
points to 28.1% offline and market share online amounted to 30.7%, with a rise of 3.4 percentage points
year-on-year. Revenue of Casarte water heaters grew 42.4%, with market share increase of 4.1
percentage points.
Gas water heater revenue grew by 51% leveraging on innovations in technology and
expansion in distribution network. According to CMM, the Company's market share in electric
water heaters was 41.7% online and 40.2% offline, representing increases of 4.0 and 3.7 percentage
points year-on-year. We launched Casarte Crystal Tank Galaxy series - the industry’s first water heater
without magnesium rod, significantly reduce limescale, leakage, rust and corrosions. Casarte’s revenue
was 1.8 times the runner-up in unit priced above RMB 8,000, partly driven by the best-selling mineral
springs bath specifically designed for skin care.
During the reporting period, the Company’s gas water heater achieved 51% revenue growth.
According to CMM, our market share grew 4.3 percentage points to 20.6% online, while market share
went up by 4.1 percentage points reaching 19.7% offline. The rapid growth was attributable to innovation
including gas-electric hybrid technology with optimal energy usages, contributing to our no.1 position
in water heater units priced RMB 8,000-10,000; dedicated efforts were made to enhance presence in
home improvement channels and building material markets while developing partnerships with interior
designers to capture growth opportunities from new houses and HVAC channels.
During the reporting period, Haier's air-powered heat pump water heater accelerated R&D of
health-oriented products specializing in high water temperature and water disinfection and we continued
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to lead the industry with market share of 64% offline and 58% online respectively; the Company also
made breakthrough by developing 7 out of 10 best-selling units priced above RMB 10,000.
(2) Water purifiers
The Company's market share in 2021 reached 11.6% offline1, realizing an increase of 1.7 percentage
points year-on-year, while ranking moved up by one place to number four.
During the reporting period, the Company adopted innovative RO+ mineral water system which
facilitates Casarte’s Yunzun ( 鱒雲 ) series in providing strontium-rich water solutions.
Supply chain capability was enhanced with the ramping up of new smart water purifier factory in
April, since then the Company has been manufacturing its own filter, water circuit board and moulding
modules, laying down solid foundations for future growth.
5. Strengthening network presence to expand user base; leveraging Casarte's leadership to
increase user value
During the reporting period, the Company adhered to retail transformation, network expansion and
user value enhancement leveraging on Casarte's high-end leadership. According to CMM, our overall
market share in China grew 2.3 percentage points to 25.1%.
1. Unlock growth potential with sales network expansion and omni-channel integration
Together with new national and regional partners from home improvement providers and
building material industries, 723 sales outlets were added to capture increasing traffic in home
improvement stores; the Company also promoted community-based micro stores that could offer laundry
and appliance repair services at users’ doorstep, thus building long lasting relationship at zero distance,
making our products and services packages a natural choice when users are looking to replace an aging
refrigerator or renovating the entire kitchen. On the other hand, 78,000 part-time sales representatives
were developed in the rural markets in order to raise our profile and promote consumption upgrade, all
of which increased our competitiveness, and contributed to revenue growth of over 20% in franchised
stores.
According to AVC, the Company led the industry with 28.8% growth online in 2021, during which
time, the Company actively worked with new partners including TikTok and Kuaishou, to capture young
users’ attention through innovative video clips and live streaming, this helped us become number one in
major home appliance on TikTok with the largest the number of fans and GMV. Over 90 million users
were identified as brand interest population, and membership from flagship store online exceeded 30
million. In addition, 10,000 new sales outlets were added in lower-tier markets in order to boost traffic
and average ticket price.
1
MMC :ecruoS
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(2) Casarte maintained strong momentum with record revenue
After 16 years of development, Casarte has successfully established itself as a leading brand of
cutting-edge technologies, outstanding quality and sophisticated taste. In 2021, its revenue grew by over
40% reaching RMB 12.9 billion. It also had 73.9% market share of washing machines priced above RMB
10,000; 36.2% market share of refrigerators priced above RMB 10,000, and 30.3% market share of air
conditioners priced above RMB 15,000.
6. Three-Winged Bird scenario brand creates smart home solutions that integrate appliances
with home improvements to grow user value
Increasing user demand for scenario based home appliances solutions unlocks significant growth
potentials, thus Three-Winged Bird made particular effort to enhance its scenario solutions, grow 1+N
service capability and expand distribution network.
During the reporting period, 1,317 scenario-based stores were added, covering more than 1,100
building material markets in tier one and tier two cities, the Company also upgraded Three-Winged Bird
APP, for example, users could place orders online while tracking the progress of their new kitchen, the
new hassle-free experience during the entire project was only made possible with Haier’s commitment
to create standardized comprehensive service and fulfilment practices.
During the reporting period, Three-Winged Bird focus on promoting comprehensive solution
packages, sales volume of high-end sets grew 62%, with its contribution increased 10.6 percentage
points to 37%; and sales volume of smart sets grew 15%, and its contribution up 2 percentage points to
17%.
7. Focusing on the development of a user-centred digital enterprise, the Company promoted
whole-process digital transformation to build a highly-efficient operation system.
In 2021, the Company focused on accelerating end-to-end digitalization in order to improve the
experience of distributors and users while enhancing internal operational efficiency. On one hand, the
entire user interaction process was consolidated on smart operating platform which then facilitated user
identification, interaction and maintenance throughout the life cycle. As a result, registered user increased
by 31 million to 204 million during the reporting period. On the other hand, greater efforts were made to
speed up the transition from ‘managing distributors’ to ‘helping distributors managing user data’. Online
contract system was launched to shorten the time required from new distributions when opening accounts
and developing stores, they also had digital tools to manage membership, logistics and services; sales
representatives were also able to promote products and maintain close user interaction through digital
middle platform, this resulted in 12.5% increase in average ticket size. In addition, 99% of personnel
managed their services online.
(2) The Company enhanced operational efficiency and user experience by digitalization in production
planning, inventory and operation management. 50% of the factories were capable of applying advanced
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algorithms and optimize turnovers, decision making significantly reduced to enhance flexibility in
production; physical boundaries removed with virtual management of inventory and services for optimal
user experience and enhanced efficiency
8. Promoting the continuous upgrading of intelligent manufacturing
By the end of 2021, the Company has built 18 smart factories. Haier’s third light house factory ---
Tianjin Washing Machine Smart Factory was recognized as the industry's first end-to-end lighthouse
factory in 2021 for precision in capturing user demand, flexible and efficient logistics and distribution
system, and low-carbon energy management system.
The Company remained committed to integrating new-generation information technologies of 5G,
artificial intelligence and digital twin with smart manufacturing, and was selected twice in a row by the
Ministry of Industry and Information Technology as ‘5G+ Industrial Internet’ model application
scenarios. In September 2021, the Sino-German washing machine factory, the central air conditioning
factory, Hefei refrigerator and washing machine factory passed the WEF Smart Industry Readiness Index
(SIRI) assessment and were chosen to represent home appliance industry in the ‘Smart Industry
Readiness Index Certification White Paper’. In December, the Sino-German washing machine factory
received 2021 Asia Communication Awards in recognition of its efforts in combining smart
manufacturing with 5G+MEC,
(II) Overseas home appliances and smart home businesses
During the reporting period, the Company delivered record revenue and profit from overseas
business. Sales revenue reached RMB 113.725 billion, an increase of 13.0%; operating profit amounted
to RMB 5.926 billion, a rise of 48.1%; operating profit margin reached 5.2%, a growth of 1.2 percentage
points from 2020.
The robust revenue and profit margin growth were attributable to fulfilling the needs of different
user groups with multiple brand portfolio, and continued iteration of user experience with innovative
products, where the proportion of high-end sales in the North America grew 2.6 percentage points, and
the proportion of high-end sales in Europe rose 5 percentage points. By using digital marketing tools, the
Company was able to seize the growth opportunities online while enhancing global supply chain
capabilities to boost manufacturing efficiency. In 2021, the refrigerator factory in Romania, the air
conditioning factory in Egypt, and the washing machine factory in India were put into production. In
addition, leveraging on global integration and collaboration, the Company managed to reduce the cost
impact from port congestion and chip shortages with initiatives including joint negotiations, resource
allocation optimization and strategic procurement.
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1 The North American market
With dedicated efforts made by the entire team, the Company’s revenue reached a record level of
RMB 70.277 billion in the North American market, representing a growth of 10.3% in RMB and 18.0%
denominated in USD. The growth was driven by the Company’s effort in product, brand and channel
innovations, acceleration of new businesses, and supply chain upgrade.
Market share and profitability were reinforced with successful new product launches including large
multi-door refrigerators, large size front-load washing machines, tall tub dish washers, professional oven
ranges and Café Wine Cabinets, contributing to over 40% revenue growth from our high-end
Monogram, Café and GE Profile brands. Specialists in Air and Water Team worked closely with
colleagues in China, and won Marriott Hotel contract in Austin, Texas Airport with Haier MRV5 units;
and DFS team signed serviced apartments project contract in Chicago. Small kitchen appliances revenue
doubled, driven by successful launches of several new series including Opal ice maker, which was named
Amazon’s Choice and Best sellers.
On the distribution front, the Company strengthened partnership with commitment and dedication.
We developed five new retail partners including Macy’s and were named Partner of the Year by Home
Depot, achieved steady revenue growth with buying groups, strengthened leadership in contractor
channel with double digit revenue growth; renewed contract with the largest property developer for
another three years; developed new partners from HVAC channel and established life style department
to cater for RV manufacturers. Revenue continued to double online in channels including Amazon. A
new zero distance channel was launched aiming to explore growth potential by creating seamless and
wholesome service that can be rewarded with lifelong user loyalty. The Company started building
Stamford Co-Creation Centre in September 2021 and plans to finish construction by second half this
year, by which time it will be the place for users to enjoy interactive, multi-dimensional and immersive
brand experience.
2. The European market
During the reporting period, the Company's European business achieved sales revenue of RMB
19.737 billion, an increase of 19.5% year-on-year.
In 2021, Haier brand continued to grow in price index and constantly outperformed the industry in
market share growth. The Company also optimized its product mix, with the launch of a variety of high-
end refrigerators and the 979 series large-diameter washing machines, the latter became No. 1 best seller
on Amazon Prime Day and Black Friday. In the meantime, the Company also accelerated online
growth, showcased high-end brand image and promoting brand stores and store-within-stores in
Germany.
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In Romania, the Company completed the construction of the new factory which specializes in
manufacturing high end refrigerators and it is designed to facilitate speedy response to local market
demand.
In addition, breakthrough was also made in building scenario-based ecosystem. The number of
registered users on hOn APP reached 4.5 million,
3. The Australian and New Zealand market
In Australia and New Zealand, the Company’s revenue grew by 17.3%, reaching 7.012 billion in
2021 and concentrated efforted continued to be made on product premiumization and network expansion.
During the reporting period, several new products include induction cooktops, insert ventilations
were introduced by FPA, we also started developing steamer ovens platform, all of which contributed to
33% revenue growth in kitchen appliances; we upgraded washing machines with low temperate UV
disinfection module and launched new tumble dryers, grew market share by 1.6 percentage points;
built-in refrigerator revenue grew by 60% thanks to the introduction of Column series and new four-door
series, particular efforts were made with comprehensive built-in range to capture opportunities in
construction channel.
4. The South Asian market
During the reporting period, sales revenue grew 30.5% to RMB 7.138 billion.
In India, the Company seized opportunities from consumption upgrade towards large-capacity and
health-oriented products, taking the lead in launching high-end side-by-side refrigerators and large-
capacity front-load washing machines, and the proportion of high-end revenue rose to 34%. Meanwhile,
the Company actively expanded the distribution network, realizing 94% coverage in franchised channels,
100% coverage in 5 national & 50 regional chain retailor and 82% coverage of rural markets. Installation
and equipment adjustment were carried out via video links to ensure the timely completion of
construction in Northern Industrial Park.
In Pakistan, the Company remained number one by taking a number of initiatives including the
launch of T3 air conditioner that could work under temperature as high as 56 ℃ , introduction of the
electric frequency-conversion refrigerator focusing on saving energy and advanced food preservation,
exactly what the users were looking for during the pandemic; meanwhile, sales revenue grew 150%
online with combination of Haier brand and newly introduced Candy brand.
5. The Southeast Asian market
During the reporting period, sales revenue grew by 15.0% to RMB 4.740 billion.
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The Company continued to strengthen technological and product leadership by launching large-
diameter washing machines and T-door refrigerators, the latter contributed to 4.7 percentage points
market share gain in Vietnam where distribution network coverage also increased to 100%, and the
Company introduced Candy brand in order to drive growth online in Thailand.
6. The Japanese market
In 2021, the Company realized sales revenue of RMB 3.491 billion, representing a year-on-year
decrease of 3.4% in RMB and a 6.3% growth in denominated in Japanese Yen. The aggregated market
share of refrigerators, freezers and washing machines reached 14.1%, and continued to be lead the
refrigeration segment with combined market share of 16.7% from refrigerators and freezer.
During the reporting period, the Company launched AQUA brand ultra-large TZ refrigerators and
upgraded Delie refrigerator series while renovated variable-frequency washing machines with ultrasonic
technology and introduced best-selling high-end front-load washer-dryer combo whose revenue
contributed reached 25% in December.
In addition, community-based laundry business continued to lead the industry with market share of
70%, the Company worked closely with partners including FamilyMart, P&G, ENEOS petrol stations
and MUJI, to add over 100 scenario-based stores specializing in laundry, clothing, food, and
transportation solutions.
(3) Establish incentive mechanism to unlock individual’s potential
In 2021, a new incentive system was established to unlock the fullest potential of our people, while
aligning long-term and short-term interest with shareholders. The Company successively launched the
A-share Core Employee Stock Ownership Plan, the H-share Core Employee Stock Ownership Plan, the
H-share Restricted Share Unit Scheme and the long-term A-share Options Incentive Scheme, in order to
provide complete coverage of core employees home and abroad over different vesting periods including
short, medium and long term, in order to accelerate the implementation of smart home strategies, attract
and retain talents thus creating greater value for shareholders with sustainable development in the long
term.
II. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATES DURING
THE REPOTING PERIOD
(I) Industry Overview for 2021
1. The Chinese Market
In the face of a complex and volatile domestic and international environment in 2021, China's
economy continued to steer development towards high-quality growth. In terms of the home appliance
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industry as a whole, it has entered the development stage focusing on replacement. Overall sales demand
became stable, and the average product price was enhanced due to product upgrade. Aggregated data
from CMM showed that the retail sales of China's major home appliance market reached RMB 481.8
billion in 2021, a year-on-year growth of 8.5% from 2020; the retail sales of the kitchen appliance market
was RMB 231.9 billion, a year-on-year increase of 8.7%.
By category: (1) The refrigerator and washing machine industries have benefited from average price
increase brought about by continuous product upgrade, retail revenue continued to grow. According to
data from CMM, retail sales of the refrigerator and washing machine industries reached RMB 98.1 billion
and RMB 73.5 billion respectively in 2021, representing growth of 7.6% and 7.3% respectively as
compared to 2020. (2) Impacted by factors including the real estate slowing down and the summer
temperature lower than previous years, retail sales of the air conditioning industry reached RMB 157.6
billion with a slight growth of 0.5%. (3) With increasing popularity of integrated stoves, which has
substitution effects on traditional kitchen appliance products such as range hoods and gas stoves and as
data from CMM showed, retail sales of the range hood industry in 2021 amounted to RMB 38.2 billion,
representing a growth of 7.0% as compared to 2020; retail sales of the integrated stove industry reached
RMB 26.7 billion, representing a surge of 43.5% from 2020. (4) The water heater industry’s overall
performance was stable, with retail sales amounted to RMB 60.8 billion, up 0.8% from 2020. (5)
Emerging categories such as clothes dryers and dishwashers have entered a stage of rapid growth after
years of incubation: according to CMM’s statistics, the retail sales of dishwashers reached RMB 11.3
billion in 2021, a rise of 20.2% from 2020; the retail sales of clothes dryers amounted to RMB 7.6 billion
in 2021, a jump of 123.5% compared to that of 2020. (6) The pandemic has caused people to stay home
for extended period of time, alongside product innovation, user demand for cleaning appliances and
emerging small kitchen appliances have been stimulated. For instance, according to data from CMM,
retail sales of cleaning appliances reached RMB 27.8 billion in 2021, an increase of 23% year-on-year.
According to statistics from Euromonitor, the sales volume of air fryers in the Chinese market recorded
a year-on-year growth of 37% in 2021.
As the market as a whole entered the development stage focusing on replacement, users’ concerns
and industry trends have displayed new characteristics.
(1) When purchasing products, users shifted their focus solely on functionalities and cost-
effectiveness to a comprehensive consideration of brand identity, diversity of experience, design
originality of products.
(2) In terms of industry development trends:
Firstly, against the backdrop of quality-of-life improvements, especially under the influence of the
pandemic, users' health awareness has greatly enhanced, leading to increased sales opportunities for
health-conscious and smart home appliances. For instance, smart large-sized refrigerators, freshness
preserving refrigerators and T door refrigerators have fulfilled user’s needs for healthy diets, product
intelligence, and refined storage space. Products such as washers with health-boosting sterilization
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features, washer dryer combos and smart washing machines have offered enhanced laundry and garment-
wearing experience. Air conditioning products have also transitioned from simple temperature
adjustments to provision of a healthy and comfortable environment. Products featuring fresh air,
sterilization, air purification, and self-cleaning functions were favoured by the public.
Secondly, consumption upgrade continued: CMM data showed that in the offline market, the share
of retail sales of refrigerators with unit price above RMB 15,000 has grown from 8% in 2020 to 13% in
2021.
Thirdly, suite-oriented and scenario-based integration of home appliances and household space has
become an established trend. The industry has gradually transitioned from single product retailing to the
sales of scenario-based solutions. In terms of product experience, home appliance product suites offered
a unified design style, enabling product appearances to be more in line with modern aesthetics and texture.
In terms of sales and services, compared to purchasing single products from different brands, purchasing
product suites from the same brand could save time and hassle in product delivery, installations and after-
sales services, which is in line with the trend of efficient and convenient consumption. In the context of
continuous pursuit of quality of life, users of home appliances, in addition to functional needs, look for
overall integration of home appliances and home environment, which could bring forth the experience
of improved home aesthetics and enhanced space utilization. From enterprise’s point of view, product
suites could increase the average order value, avoid losing customers, and achieve synergies between
strong and weak product categories. Enterprises equipped with product suite competitiveness would have
an edge in future competition. However, the development trend of product suites has raised the bar for
companies in the industry in terms of cross-category design, planning and scenario development
capabilities. It requires companies to conduct resource allocations across different product categories.
In terms of channel development trends: (1) Livestreaming e-commerce as part of online
channel has developed rapidly. According to the information of AVC, transaction value from
livestreaming e-commerce has exceeded RMB1.09 trillion in the first half of 2021. Compared to
traditional e-commerce which mainly displays product information through text and images,
livestreaming e-commerce is clearly advantageous in terms of interaction and user experience, making
it easier to motivate users. At the same time, introduction and product comparisons offered by KOLs can
also save users' time in decision making. (2) The continuous increase in user demand for personalization,
household customization and improvement in indoor space utilization has driven the development of
integrated sales of complementary home appliances and home furnishing via offline channels. In
particular, the building material channel is highly suitable for the promotion of the sales of high-end and
smart product suites of home appliances in the form of scenario-based solutions. Home appliance
enterprises have proactively strengthened sales networks in household building material outlets, so as to
attract users at the early stage when they are still designing and planning for home renovation, and
maximize average revenue per user through the sales of product suites.
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Export markets: due to recovery of the global market as well as continuous stability of the
production and supply capacity of China's home appliance industry chain, China's home appliance
exports have continued to grow in 2021. According to data of Industry Online ( 线 在业产 ), the annual
export volume of household air conditioners, refrigerators and washing machines in 2021 have increased
by 9.7%, 4.8% and 9.9% year-on-year respectively. However, challenges such as rising raw material
prices and surging shipping costs remained in 2021, which have placed pressure on export profitability.
2. Overseas markets
The global economy has gradually recovered in 2021. The global GDP was expected to grow 5.9%
in 2021 according to the forecast by the International Monetary Fund. Based on the information from
GfK, the global retail market for home appliances (including major white goods, small home appliances
and consumer electronics) was expected to reach USD 560 billion in 2021, with retail sales increased by
10% year-on-year. Specifically, the retail sales of major white goods have increased 13% year-on-year
due to product upgrades and average price hikes, whereas small home appliances have increased 6%.
By market:
(1) The U.S. User demand for appliances remained robust throughout the year in the U.S. because
of easing economic uncertainties, stimulus packages, and increased time at home. Major appliances
market resumed to 4.3% volume growth after two consecutive years of decline in sales volume. On the
other hand, the industry was under constant challenges from sharp increase in raw materials, Covid
related labour shortages, and port congestion.
(2) Europe: The pandemic has led to a continuous increase in user demand for home appliances
in the large-capacity and healthy-living categories. Overall industry performed well. According to
statistics from GfK, the sales volume and sales revenue for major home appliances in 25 major European
countries in 2021 have increased by 3.9% and 9.5% year-on-year respectively.
(3) South Asia. ① India: As the pandemic developed to a later stage, users increasingly favoured
products with large-capacity and health-conscious features. E-commerce has developed rapidly in the
past two years, with the proportion of online sales of home appliances steadily increased. ② Pakistan:
Despite depreciation of the rupee and the pandemic’s impacts on residents' willingness to consume,
health-boosting and smart products were gradually recognized by users. For example, energy-saving
variable-frequency refrigerator series and large-volume freshness preservation refrigerator series have
gradually become mainstream products.
(4) Southeast Asia: As the pandemic has impacted the local tourism industry and affected
consumption, performance in major markets were sluggish. According to data from GfK, the sales
volume of refrigerators in the Thai market increased 1%, the sales volume of household air-conditioners
dropped 1.7%, and the sales volume of washing machines rose 1.1%. In Indonesia, the pandemic has led
to increased unemployment and stagnant or declining wages, thus affecting the purchasing power of the
society.
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(5) Australia & New Zealand: ① Australia: The industry maintained its growth momentum in
the first half of the year. However, channel sales of home appliances were greatly hampered in the second
half of the year due to pandemic related lockdown. The size of the industry in 2021 remained the same
as 2020. ② New Zealand: The pandemic has led to prolonged home office hours for local residents,
which stimulated the demand for home renovation and refurbishment, and drove the development of the
real estate market. User demand for home appliances increased accordingly. According to the home
appliance import data from local customs, home appliance imports grew 11.9% in 2021.
(6) Japan: Affected by the withdrawal of government subsidies, multiple state of emergencies
caused by the pandemic, negative economic growth and other factors, the white goods industry
experienced sluggish growth: sales volume of the refrigerator industry has dropped for two consecutive
years, and sales revenue in 2021 has tumbled 4.3%; for the freezer industry, due to pull-forward demand
in 2020, growth in 2021 has lowered to 1.8%. The washing machine industry was benefited from the
continuous optimization of product mix, and proportion of front-load and variable-frequency products
continued to grow. Although sales volume dropped 3%, sales revenue rose 3% year-on-year.
(II) Industry Outlook for 2022
1. The Chinese market:
In the medium to long term, with the acceleration of the new urbanization, the steady increase of
residents' income, the continued expansion of the middle-income group and the improvement in social
welfare in China, the purchasing power and consumption willingness of residents grows stronger. The
home appliance market still has great upside potential. Changing user attitudes will drive the continuous
upgrade of product mix, bringing growth opportunities to high-end, high-quality home appliances. For
products such as small kitchen appliances and range hoods, there are significant gap in the penetration
rate between rural and urban areas. Room for growth is huge as driven by improvements in users' quality
of life and the expansion of product categories.
Looking ahead to 2022, the home appliance industry faces both challenges and opportunities:
seeking progress while maintaining stability, strategic initiatives to expand domestic consumption will
stimulate further demand, increased uncertainty in commodity prices due to global impact. According to
CMM's forecast, the size of China's major home appliance retail market will reach RMB 492.4 billion in
2022, representing an increase of 2.2% year-on-year; the retail size of the kitchen appliance market will
grow 6% to RMB 246.4 billion. Product mix enhancement and product iterations triggered by
consumption upgrade will continue to bring positive impact. User demand will become more segmented.
Sub-categories of home appliances such as products that improve quality-of-life will enter a period of
rapid growth.
Export markets: From 2020 to 2021, the global home appliance market was affected by the
pandemic and the supply chain of overseas markets was impacted. China's home appliance industry has
filled the supply gap in the global home appliance market with its efficient supply chain system, home
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appliance exports from China has grown strongly. It is expected that in 2022, the export market will face
certain pressure due to factors such as the recovery of supply chains in overseas markets and increase in
overseas production capacity.
2. The global market:
According to the International Monetary Fund's GDP growth forecast for major economies in 2022,
major economies and countries around the world will continue the trend of recovery but at a slower pace.
Global growth is expected to be at 4.4%. Meanwhile, international trade barriers, supply chain
disruptions and the impact of the pandemic will continue to have profound impacts on the global home
appliance industry in 2022.
According to GfK's forecast, the size of the global home appliance industry will reach USD 575.2
billion in 2022, with an expected growth of 3%. From the perspective of industry development trends,
quality consumption will further drive product upgrades, product innovation and expansion of product
intelligence; users will prefer products with higher energy efficiency in the context of climate change
and energy shortages; as the impact of the pandemic weakens and vaccination rate further improves,
markets in countries that are previously heavily affected by the pandemic will further recover. On the
other hand, there are unfavourable market factors at play. The outbreak of war in some region will have
impacts on regions and countries as well as posing certain challenges to upstream costs and supply chains
of the global home appliance industry.
III. INTRODUCTION OF THE COMPANY’S BUSINESS DURING THE REPORTING
PERIOD
Founded in 1984, the Company is committed to being an enterprise of the times. Through relentless
innovation and iterations, we seize opportunities in the industry by continuously launching new products
that steer market development. After more than 30 years, the Company has become a global leader in the
major home appliance industry, as well as a pioneer in global smart home solutions.
Global leader of the major home appliance industry: According to data from Euromonitor—an
authoritative market researcher, the Company ranked first in terms of sales volume in global major
appliance market for 13 consecutive years. The Company has a global portfolio of brands, including
Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to 2021, Haier
brand refrigeration and laundry appliances ranked first among major home appliance brands in sales
volume for 14 and 13 consecutive years respectively.
Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products,
the Company is recognized by Euromonitor as one of the first in the industry to introduce smart home
solutions. Leveraging our connected home appliance products and partners, supported by Haier Smart
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Home APP, Three-Winged Bird APP and Haier Smart Home Experiential Cloud Platform, with
integration of experience centres and franchised stores, the Company provides users with smart home
solutions for a variety of application scenarios, satisfying their pursuit for a better life.
Over the years, the Company has established three business segments, namely the Chinese Smart
Home Business, the Overseas Home Appliance and Smart Home Business, and Other Business.
Smart Home Business in China
The Company provides a full range of home appliance products and value-added services in China
market through Haier Smart Home APP and Three-Winged Bird APP, supplemented by our offline
experience centres, in order to cater for users’ needs for different lifestyle scenarios. Smart Home
Business in China comprises Household Food Storage and Cooking Solutions (Internet of Food),
Household Laundry Solutions (Internet of Clothing), Air Solutions (Internet of Air), and Household
Water Solutions (Internet of Water).
Household Food Storage and Cooking Solutions (Internet of Food): Through selling in domestic
market and exporting products such as refrigerators, freezers, kitchen appliances and value-added
services, including smart cooking and nutrition planning, the Company fully addresses users’ need for
convenient, healthy and tasteful gourmet experiences.
Household Laundry Solutions (Internet of Clothing): Through selling in domestic market and
exporting products such as washing machines, dryers and value-added laundry services solution such as
smart dispense of laundry detergent, the Company satisfies users’ demand for washing and caring of
apparels in a comprehensive manner.
Air Solutions (Internet of Air): Through domestic sales in China and exports, the Company
provides home air-conditioners, commercial air-conditioners, purifiers, fresh air systems, as well as
comprehensive range of solutions including coordination of multiple air-conditioners and purifiers,
adaptive air flow, air quality monitoring and air disinfection.
Household Water Solutions (Internet of Water): Through selling in domestic market and exporting,
the Company provides users with electric water heaters, gas water heaters, solar water heaters, heat pump
water heaters, POE water purifiers, POU water purifiers, water softening equipment, at the same time,
we offer smart water solutions including interactions between water heaters and purifiers, and between
heating appliances and water heaters, so as to comprehensively cater to users’ needs for water purification,
softening and heating.
Overseas Home Appliance and Smart Home Business
In addition, the Company manufactures and sells a comprehensive portfolio of home appliance products
and provides value-added services in more than 160 countries and regions, including North America,
Europe, South Asia and Southeast Asia, Australia and New Zealand, Japan, Middle East and Africa.
In the overseas market, the Company has been manufacturing and selling proprietary appliance
products catering for local users’ demands for more than 20 years. During the time, a number of
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acquisitions contributed to our growth including acquisition of Haier Group Corporation’s overseas
white goods business (Sanyo Electric Co., Ltd.’s white goods business in Japan and Southeast Asia) in
2015, home appliances of GE in the US in 2016, Fisher&Paykel in 2018, and Candy in 2019. The
development of the Company’s overseas businesses has been fuelled by synergies among our self-
developed business and our acquired businesses.
At present, the overseas business of the Company has entered a stage of promising growth, having
achieved a multi-brand, cross-product and cross-regional presence on a global basis. According to
Euromonitor, the Company's share of the global market (retail volume) for major home appliances in
key regions in 2021 is as follows: ranked first in Asia in terms of retail volume, with a 20.4% market
share; ranked second in America, with a market share of 15.1%; ranked second in Australia and New
Zealand, with a market share of 11.6%. The Company ranked third in Middle East and Africa with a
market share of 7.4%, and ranked fourth in Europe with a market share of 8.1%.
Other Businesses
Building on our established smart home businesses, the Company has also developed small home
appliances, channel distribution and other businesses. In particular, the small home appliance business
primarily involves small home appliances designed by the Company, produced by outsourced third-
party manufacturers and sold under the Company's brands, which serve to enrich our smart home
solutions product mix. The channel distribution business primarily offers distribution services for
products such as televisions and user electronics for the Haier Group or third-party brands, which
leverages the Company's sales network.
During the reporting period, the Company was once again listed among the Top 500 World’s
Companies by the Fortune Magazine, up 30 places as compared to 2020. We are named as the ‘2021
World’s Most Admired Companies’ by the Fortune Magazine. We are the only company being selected
in Europe and Asia in the home appliances industry, and are the only selected company incorporated
outside the US. Meanwhile, the Company is also the world’s only Internet-of-Things (IoT) ecosystem
brand being named again as BrandZtm Top 100 Most Valuable Global Brands in 2021.
IV. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING PERIOD.
√ Applicable □ Not Applicable
The Company has established a solid strategic presence and competitive advantage in China and
overseas markets. In China's major home appliance market, the Company has long maintained a leading
position across all product categories. According to CMM's report, the Company has established a
continued leading market position in key major home appliance categories in 2021. In overseas markets,
the Company has adhered to its high-end brand creation strategy, building capacity to create leading
sustainable growth, which has continuously improved its market shares. Building on this foundation, the
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Company will further consolidate its leadership position in the industry by leveraging integrated
synergies of its global unified platforms, through efficiency transformations driven by digitalization, and
by leveraging its technological strengths and innovative capabilities. As cornerstone for sustainable
development, our ‘Rendanheyi ( 一合單人 )’ Model also provided management guidance to the Company,
and enabled us to replicate successful experiences. It is believed that the following advantages will help
the Company to continue to strengthen its leading position:
(i) Dominance in China's high-end market; rapid growth of overseas high-end brands
Riding the trend of consumption upgrade in China, the Company has started to develop the high-
end brand Casarte in the Chinese market more than 10 years ago. The creation of high-end brands
required not only focus, experience and patience, but also continuous innovation of technological
standards and differentiated service capabilities to fulfil user demand for high-quality experiences. The
Casarte brand combined the Company's global technological strengths, product development capabilities
and manufacturing craftsmanship, as well as privilege marketing and differentiation services, and has
gradually won the trust of users in China's high-end market. According to data from CMM, the Casarte
brand has assumed a definitive leading position in China's high-end major home appliance market in
2021, ranking first in the retail sales of refrigerator, washing machine and air conditioner categories in
the high-end segment. Specifically, in terms of offline retail sales, shares of the Casarte brand of washing
machines and refrigerators reached 73.9% and 36.2% respectively in the market with product price above
RMB 10,000 in China, while its share of air conditioners priced above RMB 15,000 in the China's market
reached 30.3%. Our overall average price for refrigerators, air conditioners and washing machines was
roughly two to three times the average price of the industry.
In the North American market, the Company owns high-end brands such as Monogram, Café, and
GE Profile. The Company has enhanced its high-end brand profile through launch of trending products
such as high-end professional gas range, large multi-door refrigerators, ultra-fresh dishwashers with
stainless steel interior, Opal ice makers, and automatic espresso machines. For instance, the Monogram
high-end professional gas range earned recognitions such as the ‘2021 Design Excellence Award’ (from
the reputable magazine Architectural Design), GE Profile's smart induction oven range equipped with
interior-facing camera CookCam was named ‘Applause-Worthy Appliances’ by Good Housekeeping's
Kitchen Appliance Awards in 2021. Through the creation of luxurious, customizable and smart
technology-enabled user experience, our high-end brands Monogram, Café and GE Profile have grown
rapidly. In 2021, these three high-end brands have increased their revenue in the US market by more than
40% year-on-year.
(ii) Smart household solutions that continue to expand and upgrade
As users continued to demand for higher living quality, coupled with the development of
technologies such as Internet of Things, big data, cloud computing and artificial intelligence, the industry
has shown a smart and high-end development trend that prioritized product suites, based upon scenarios,
and home appliances integrated with home furnishings. With leading user insights, extensive product
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coverage and technological accumulation from intelligent AI algorithms, home big data and IoT
equipment technology, the Company provided scenario solutions such as food storage and cooking
management, clothes laundry and mix-and-match management, whole-house air comfort and purification
management, and healthy drinking water management for five major spaces at home, including the living
room, kitchen, bathroom, bedroom and balcony, thereby ‘Designing a home, building a home, and
serving a home’ for users.
Three-Winged Bird stores provided users with scenario solutions that integrates smart home
appliances and smart home furnishings, and through having a service steward to attend to the needs of
users throughout the process, through coordination and arranging with the internal specialised team,
providing users with a whole-process service that comprised design and implementation, building
materials selection, as well as installation and fulfilment. For example, the Three-Winged Bird kitchen
scenario solution could provide users with a whole-process service from a suite of smart kitchen
appliances to cabinet design, delivery, installation and fulfilment.
Based on the Haier Smart Home Brain platform, users could upgrade the functions of smart home
appliances, enjoy services such as professional fitness training, recipe recommendations, purchase of
ingredients through refrigerator, automatic selection of laundry programs, and personalized scenarios
through interfaces including the Haier Smart Home App and the Xiaoyou Speaker. In the future, the
Company will continue to address the needs of user experience, and to further improve and enrich the
smart home solutions provided by the Company. Through scenario solutions and ecosystem services, the
Company will provide lifelong services for users and further enhance users' loyalty.
(iii) Extensive and solid global presence with localized operational capability
In addition to success in the Chinese market, the Company also prospered in overseas markets. The
Company seeks overseas expansion of its own brands as well as synergies with acquired brands to
develop overseas markets. Such business strategy has guided the Company to establish R&D,
manufacturing and marketing three-in-one structure across multiple brands, products and regions, as well
as the model of self-development, interconnection and synergized operation.
The Company's extensive global presence depends on its localized business teams as well as its
flexible and autonomous management mechanisms established in various overseas markets, which have
enabled the Company to gain rapid insights and respond swiftly to local user demands. The Company
also proactively integrates into local markets and cultures, and has established a corporate image that is
recognized by local communities in the overseas regions where the Company operates.
In 2021, the Company operated 10 R&D centres, 122 manufacturing centres, and 108 marketing
centres around the world, and achieved a coverage of nearly 130,000 point of sales in overseas markets.
(iv) A comprehensive portfolio of proprietary brands recognised by users of all tiers
Through organic growth and acquisitions, the Company has formed seven brand clusters, including
Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. To address the needs of users
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from different tiers in various markets around the world, the Company has adopted a differentiated multi-
brand strategy in different regions that centred around users, so as to achieve an extensive and in-depth
user coverage. For example, in the Chinese market: the three brands of Casarte, Haier and Leader
achieved the coverage of high-end, mainstream and niche market groups respectively; in the U.S. market,
the six major brands such as Monogram, Café, GE Profile, GE, Haier, Hotpoint comprehensively
covered all segments of high-end, mid-range and low-end markets, thereby meeting the preferences and
needs of different types of users.
(v) Cross-border acquisition and synergy realisation capabilities
The Company has an excellent track record of acquisition and integration. The Company has
acquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co., Ltd.’s
white goods businesses in Japan and Southeast Asia in 2015, the home appliance business of General
Electric in the US in 2016, the New Zealand company Fisher&Paykel (which has been entrusted by the
Haier Group since 2015) in 2018, and the Italian company Candy in 2019. The Company's capability to
perform acquisition and integration is reflected in the following: First of all, the Company implements
the ‘Rendanheyi ( 一合單人 )’ Model in the acquired companies, which is a value-added sharing
mechanism for the whole-process team under a common goal. Such model can motivate the acquired
companies and their employees, and enable them to generate more value. Secondly, the Company made
use of its global platform to empower the acquired companies in terms of strategic planning, R&D and
procurement in order to enhance their competitiveness. Thirdly, the Company's open and inclusive
corporate culture can support the acquired companies in establishing a flexible and autonomous
management mechanism, which can easily earn recognition from the acquired companies and is
conducive to the promotion of integration.
(vi) Comprehensive and in-depth global collaborations and empowerment
The Company has made full use of its global collaborative platform, as well as its integrated
functions of R&D, product development, procurement, supply chain, sales and brand marketing. It was
able to share and expand its successful market development experience to various markets around the
world. By strengthening the synergies among its global businesses, the Company has created a strong
driving force for its future development.
Global collaborative R&D: The Company has a global collaborative R&D system and has
established global technology R&D mechanisms to share common modules, utilize common
technologies, and share patents within the scope of compliance. For example, ① the Company
successfully applied the direct-drive motor technology developed by Fisher&Paykel to the Casarte brand
of washing machines and achieved satisfactory results. ② integrating global R&D platform resources
and leveraging technologies around the globe, such as China's product structures and hydraulic
technology, Japan's functional design technology, New Zealand's driver system, and the American
control system, we launched the GE brand’s large-volume front-load washers in the U.S. market, which
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has led to increases in both the market share and average price of washing machine products in the U.S.
market.
Global collaborative product development: The Company has established a global product
development mechanism to coordinate global collaborative product development, which can enable
regional collaboration and supplementation across product categories. For example, the Company
successfully supported GE Appliances to relaunch water heater business: the development teams in North
America and China are highly integrated, benchmarking the differences in standards between Haier and
products in North America. Haier's R&D advantages were combined with GE Appliance’s quality
assurance system to jointly develop the product. The resulting electric water heater product has achieved
industry leadership in terms of design, manufacturing and inspection, with annual sales of more than
50,000 units, thus providing solid support for GE brand’s water heaters to successfully enter the North
American market.
Global collaborative procurement: The Company's global procurement activities are
coordinated by its global procurement guidance committee. By leveraging the Company's global
procurement operations platform, the Company's operating divisions in different regions can share global
procurement resources, thereby achieving economies of scale.
Global collaborative supply chain: The Company has a visualizable and digitalized global
supply chain management system, which has enabled flexible deployment of global production capacity,
and sharing and collaboration in the development of smart manufacturing technologies.
Global collaborative marketing and brand promotion: the Company operates a multi-level
brand portfolio on a global scale, which can realize global collaborative brand promotion. The Company
also promotes and introduces successful marketing strategies among regional markets around the world.
For example, the Company successfully replicated its sales and marketing model from third and fourth-
tier markets in China, in markets such as India, Pakistan, and Thailand, which have strengthened the
Company's brand image and its regional market competitiveness.
(vii) Industry-leading R&D and technological capabilities
To ensure better living experience for users, the Company has established a global leading R&D
system under the premise of developing original technologies, thereby using original technologies to
support the overall industry-leading positions of the Company’s high-end brands, scenario brands and
ecosystem brands.
The State Science and Technology Progress Award: In 2021, Haier Smart Home received another
State Science and Technology Progress Award, ranking first in the industry with a total of 16 awards.
Leadership in terms of patent quality: As of December 2021, Haier Smart Home has accumulated
more than 75,000 patents applications globally, of which invention patents accounted for more than 63%.
The number of overseas invention patents exceeded 14,000, making us the Chinese home appliance
enterprise with the largest number of overseas patents. The Company also accumulated 10 state patent
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gold awards, ranking first in the domestic market. In the ‘Global Smart Home Invention Patent Ranking’
in 2021, Haier Smart Home once again topped the list, ranking first in the world for six consecutive times.
Leadership in terms of international standards: As of December 2021, Haier Smart Home has
cumulatively led and participated in formulation of 82 international standards and 602 state industrial
standards. It is the only company in the industry to obtain comprehensive coverage in the five major
international standard organizations, namely the IEC, ISO, IEEE, OCF and Matter. It is also the only
enterprise in the world to serve on the IEC Board and the IEC Market Strategy Board at the same time,
which have enabled the Company to stay actively involved in international standardization work and
have a voice in the formulation of standards.
Leadership in terms of original technologies: In 2021, the Company has innovated a range of
solutions that exceeded users' expectations, such as the launch of the Casarte’s ‘simultaneous five-ring
fire’ gas stove, which enlarged the pot heating area by 40% through the use of multi-ring uniform
combustion system, ingredients in the pot could therefore be more evenly and comprehensively heated.
The Company also introduced the Casarte’s Zhongzihemei all-in-one laundry machine that could
perform the three functions of washing, fabric-caring and drying in the same machine; through
continuous iteration of original technologies, it solved the three major pain points of high-end washing,
drying and fabric-caring. We therefore created a new product category in the laundry industry and has
continued to increase our market share of high-end washing machines.
Leadership in terms of innovative ecosystem: In 2021, with approval of the Ministry of Industry
and Information Technology, Haier spearheaded the establishment of the National High-end Intelligent
Household Appliances Innovation Centre, which is the only national-level manufacturing innovation
centre in the field of home appliances. By centring on the development direction of high-end, smart and
scenario-based home appliances, the Centre focuses on breaking through a number of critical common
technologies in the technological fields of ontology, intelligence, security and scenario application, so as
to enhance the technological innovation level and product competitiveness of China's high-end smart
home appliance industry.
Our HOPE platform, as Haier's window for external technology collaboration, tracks, analyses and
researches technologies closely related to industry development that are 3-5 years ahead of time, and
promotes the industrialization of related technologies, continue to build on the core methodologies of
user insights, demand analysis, technology analysis and resource assessment, while brings together the
supply and demand side of technologies, knowledge and creativity, providing interactive scenarios and
tools to facilitate the creation and iterations of innovative products/scenarios. Taking Haier's air
conditioner’s ‘variable shunt technology’ as an example, through collaboration with relevant experts, 36
patents have been applied for the technology, including 4 PCT international patents. According to results
from a real device test conducted by CHEARI (Beijing) Certification & Testing Co. Ltd., the energy-
efficiency of a 1.5 HP Haier variable refrigerant flow air conditioner is 12% higher over a period of one
year than that of an air conditioner with the new national standard of first-class energy efficiency with
same power level.
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(viii) Staying committed to the principle of ‘value of people comes first’
‘Value of people comes first’ has always been a guiding principle for Haier's development. From
the autonomous operation team at the start of the venture to the current ‘Rendanheyi’( 一合單 人 ) model,
Haier encourages every employee to maximize their own values while creating values for users. In
Haier's ‘Rendanheyi’ ( 一 合單人 ) model, ‘Ren’ refers to creators; ‘Dan’ refers to user value; ‘Heyi’ refers
to the integration of values realized by employees and the values created for users. ‘Value of people
comes first’ is the highest purpose of the ‘Rendanheyi’( 一合單 人 ) model.
Haier Smart Home adheres to the values of recognizing users’ demand as priority and denying our
own perceptions , and is committed to the ‘two creative spirits’ of entrepreneurship and innovation. We
turned employees into creators, implementers into entrepreneurs, and transformed enterprises into open
ecosystem platforms, which have supported the Company to become a global leader of smart home in
the Internet of Things era.
V. MAJOR OPERATIONS DURING THE REPORTING PERIOD
Please refer to “I. DISCUSSION AND ANALYSIS ON OPERATIONS” under this chapter.
(I) Analysis of principal business
1. Table of movement analysis on the related items in income statement and cash flow statement
Unit and Currency: RMB
Items Corresponding
Current Period Change (%)
Period of Last Year
Operating revenue 227,556,143,618.17 209,723,430,081.03 8.50
Operating cost 156,482,657,366.94 147,471,922,284.89 6.11
Selling expenses 36,553,667,004.06 33,641,711,147.72 8.66
Administrative expenses 10,444,475,658.24 10,052,645,415.72 3.90
Financial expenses 686,364,977.04 1,196,199,335.22 -42.62
R&D expenses 8,357,332,946.25 6,852,861,422.32 21.95
Net cash flow from operating
23,129,640,417.72 17,609,513,831.64 31.35
activities
Net cash flow from investing
-8,066,823,538.43 -5,273,676,324.71 -52.96
activities
Net cash flow from financing
-15,641,428,143.57 -1,025,923,097.55 -1,424.62
activities
Investment income 2,403,102,640.29 4,060,104,212.78 -40.81
Gain on fair value change 119,277,623.85 62,629,747.80 90.45
Loss on credit impairment -520,299,915.42 -166,380,605.76 -212.72
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Gain from disposal of assets 110,983,720.04 -12,807,590.96 966.55
Non-operating expenses 159,240,779.44 241,918,187.91 -34.18
Analysis on the reasons of signification changes in certain indicators:
1) Reasons for changes in financial costs: Financial costs decreased by 42.62% over the corresponding
period, which was mainly due to the decrease in interest expenses;
2) Reasons for changes in net cash flow from operating activities: Net cash flow from operating
activities increased by 31.35% over the corresponding period, which was mainly due to the increase
in operating profit and improvement in operating efficiency during the period;
3) Reasons for changes in net cash flows from investing activities: Net cash outflows from investing
activities increased by 52.96% over the corresponding period, which was mainly due to the cash
outflow from the purchase of financial products and the inflow of proceeds from disposal of interests
in subsidiaries during the current period;
4) Reasons for changes in net cash flows from financing activities: Net cash outflows from financing
activities increased by 1,424.62% over the corresponding period, which was mainly due to the
repayment of borrowings and the decrease in new borrowings during the current period;
5) Reasons for the changes in investment income: Investment income decreased by 40.81% over the
corresponding period, which was mainly due to the one-off gain on disposal of equity interests
included in the corresponding period;
6) Reasons for the changes in gain from fair value change: Gain from fair value change increased by
90.45% over the corresponding period, which was mainly due to the increase in fair value change of
investment in equity instruments over the corresponding period;
7) Reasons for changes in credit impairment losses: Credit impairment losses increased by 212.72%
over the corresponding period, which was mainly due to the increase in the provision for bad debts
on receivables during the current period;
8) Reasons for changes in gain on disposal of assets: Gain on disposal of assets increased by 966.55%
over the corresponding period, which was mainly due to the increase of gain on disposal of assets
in the current period;
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9) Reason for changes in non-operating expenses: Non-operating expenses decreased by 34.18% over
the corresponding e period, which was mainly due to the decrease in the disposal of small-scale
production equipment in the current period.
Detailed explanation of significant changes in the operation types and the components of profit or sources
of profit of the company during the period
√Applicable□ Not Applicable
In December 2020, the Company completed the material asset restructuring involved in the
privatisation of Haier Electronics through H Share issues, details of which was set out in the “report on
the implementation of material asset acquisition and connected transaction of Haier Smart Home Co.,
Ltd.” dated 26 December 2020 of the Company. Upon completion of the material asset restructuring,
profit attributable to minority shareholders of Haier Electronics from the original minority shareholders’
profit and loss would be transferred to the Company’s net profit attributable to shareholders of the parent
company. Thus, the restructuring was one of factors in change in indicators, such as net profit attributable
to shareholders of the parent company, of the Company for the reporting period.
2. Analysis of Income and Cost
□ Applicable √ Not Applicable
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(1). Principle Operating Activities by Sector, Product, Region and Sales Mode
Unit and Currency: RMB
Principal operating activities by product
Operating Operating Gross profit
Gross
revenue cost margin
Operating Operating profit
By product increased/ increased/ increased/
revenue cost margin
decreased decreased decreased yoy
%
） （ yoy (%) yoy (%) (%)
Increase by
Air 0.52
37,531,431,456.40 27,048,946,901.15 27.93 25.11 24.22
conditioner percentage
points
Decrease by
0.69
Refrigerator 71,569,789,213.81 48,835,867,469.21 31.76 16.30 17.48
percentage
points
Increase by
Kitchen 0.96
35,244,040,315.09 23,735,209,066.45 32.65 12.38 10.81
appliances percentage
points
Increase by
Water 0.06
12,470,593,776.21 6,760,377,744.75 45.79 26.52 26.38
Appliances percentage
points
Increase by
Washing 0.52
54,758,839,273.57 36,334,162,716.43 33.65 13.02 12.13
Machine percentage
points
Equipment
Decrease by
parts and
0.26
channel 15,002,367,286.61 13,523,061,580.33 9.86 -45.21 -45.05
percentage
integrated
points
services
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Principal operating activities by region
Operating Operating Gross profit
Gross
revenue cost margin
Operating Operating profit
By region increased/ increased/ increased/
revenue cost margin
decreased decreased decreased yoy
%
） （ yoy (%) yoy (%) (%)
Increase by
3.11
Domestic 111,851,280,563.23 73,875,984,966.93 33.95 4.30 -0.39
percentage
points
Increase by
0.20
Overseas 114,725,780,758.46 82,361,640,511.39 28.21 13.20 12.88
percentage
points
Principal operating activities by sales mode
Operating Operating Gross profit
Gross
revenue cost margin
Operating Operating profit
Sale mode increased/ increased/ increased/
revenue cost margin
decreased decreased decreased yoy
%
） （ yoy (%) yoy (%) (%)
Increase by
Domestic -
1.21
direct sale 10,849,505,940.64 6,336,720,350.62 41.59 5.08 2.96
percentage
customers
points
Increase by
Domestic -
3.30
distribution 101,001,774,622.59 67,539,264,616.31 33.13 4.22 -0.69
percentage
and others
points
Decrease by
Overseas -
3.94
direct sale 3,946,307,570.97 3,611,298,895.65 8.49 34.74 40.80
percentage
customers
points
Overseas - Increase by
trading 0.44
110,779,473,187.49 78,750,341,615.74 28.91 12.55 11.86
companies percentage
sales points
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(2). Table of production and sales analysis
√Applicable □ Not Applicable
Production Sales
Inventory
volume volume
Main Production Sales increased/
Units Inventory increased/ increased/
products volume Volumn decreased
decreased decreased
yoy (%)
yoy (%) yoy (%)
Home 10,000
10,576 11,388 2,464 23.3 13.6 24.3
Appliance units/sets
(3). Performance of major purchase contracts and major sales contracts
□Applicable √Not Applicable
(4). Table of cost analysis
Unit: RMB 10,000
By sector
Percentage of
Percentage
Percentage of the change of the
of the
Amount for the amount for the amount for the
Amount for amount for
Cost corresponding corresponding current period
By sector the current the current
component period of last period of last compared to the
period period in
year year in total costs corresponding
total costs
(%) period of last
(%)
year (%)
Primary 12,251,576 100.00 18.1
14,468,983 100.00
operation costs
Home Raw materials 12,400,431 85.7 10,190,414 83.2 21.7
Appliance Labor 893,832 6.2 776,334 6.3 15.1
Industry Depreciation 238,331 1.6 240,106 2.0 -0.7
Energy 72,363 0.5 63,633 0.5 13.7
Others 864,026 6.0 981,089 8.0 -11.9
(5). Change of consolidation scope due to changes on shareholdings of major subsidiaries during
the reporting period
□ Applicable √ Not Applicable
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(6). Relevant information on significant changes or adjustments in the Company's business,
products or services during the reporting period
□ Applicable √Not Applicable
(7). Major distributors and major suppliers
A. Major distributors of the Company
Revenue from the top five distributors was RMB 50,650.28 million, representing 22.26 % of the
total sales for the year; among the revenue from the top five distributors, the revenue from related parties
was RMB 0 million, representing 0 % of the total sales for the year.
The proportion of sales to a single distributor exceeded 50% of the total during the reporting period,
and new distributor or depending heavily on a few distributors were seen among the top five distributors.
□Applicable √Not Applicable
B. Major suppliers of the Company
The purchase amount from the top five suppliers amounted to RMB 40,358.73 million, representing
19.83 % of the total purchase amount for the year; among the purchase amount from the top five suppliers,
the purchase amount from related parties was RMB 22,159.67 million, representing 10.89 % of the total
purchase amount for the year.
The proportion of purchase from a single supplier exceeded 50%of the total during the reporting
period, and new supplier or depending heavily on a few suppliers were seen among the top five suppliers.
□Applicable √Not Applicable
3. Expenses
□ Applicable √Not Applicable
4. R&D expenditure
(1). Table of R&D expenditure
√ Applicable □ Not Applicable
Unit: RMB
Expensed R&D expenditure for the
8,357,332,946.25
current period
Capitalized R&D expenditure for the
609,272,007.11
current period
Total R&D expenditure 8,966,604,953.36
Total R&D expenditure as a percentage in 3.94
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operating revenue (%)
Proportion of capitalization of R&D
6.79
expenditure (%)
(2). Table of R&D Personnel
√ Applicable □ Not Applicable
Number of R&D personnel 22,161
Percentage of R&D personnel took up in the total employees (%) 21.13
Educational structure of R&D personnel
Categories of educational structure Number of personnel
Doctor’s degree 95
Master’s degree 3,480
Bachelor’s degree 10,684
College Diploma 5,276
High School diploma or below 2,626
Age structure of R&D personnel
Categories of age structure Number of personnel
Under 30 years old (not including 30) 8,228
30-40 years old (including 30 and not including 40) 9,518
40-50 years old (including 40 and not including 50) 3,033
50-60 years old (including 50 and not including 60) 1,141
60 years old and above 241
(3). Explanation
√Applicable □Not Applicable
Haier Smart Home always focuses on user experience. Under the guidance of adhering to the
strategy of original technology, it has continuously increased its innovation investment, established a
global leading R&D system, and has seen a continuous emergence of innovative achievements.
In terms of products, in 2021, the Company created a series of innovative solutions that were beyond
users' expectations and led the industry, such as parallel flow air supply system, the second generation
of air-purifying air conditioner, five-ring fire gas stove, crystal water heater, neutron and beauty washing
and drying care machine, etc. In the next step, we will continue to increase investment in basic research
and subversive technology research.
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In terms of intelligence promotion: focusing on all-scenario solutions such as Smart Home APP and
whole house intelligence, we are continuously increasing our investment in the research and development
of IoT, cloud computing, artificial intelligence and related advanced technologies to advance the
development of home appliances towards intelligence and scenario-based development.
In terms of green and dual-carbon: we will undertake the national dual-carbon strategy and make
breakthroughs in green technologies such as DC home appliances and hydrogen energy to lead the trend
of "dual-carbon" development in the home appliance industry.
(4). Reason for significant change in the composition of R&D personnel and its impact on the
future development of the Company
□ Applicable √ Not Applicable
5. Cash flow
□ Applicable √ Not Applicable
(II) Explanation for major changes in profit caused by non-principal businesses
□ Applicable √ Not Applicable
(III) Analysis of assets and liabilities
√Applicable □ Not Applicable
1. Assets and liabilities
Unit: RMB10,000
Percentage
Change in the
Percentage of of Amount
Amount at Amount at the
Amount at the Amount at the at the End
the End of end of Current
Name of Item End of Current End of Current of Previous Description
Previous Period to the
Period Period to Total Period to
Period End of Previous
Assets (%) Total
Period (%)
Assets (%)
Mainly due to the
growth in revenue
Inventory 3,986,317.10 18.33 2,944,697.34 14.47 35.37 scale and
production
stocking
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Mainly due to
changes in fair
Investments in
value of
other equity 484,870.94 2.23 265,902.53 1.31 82.35
investments in
instruments
equity
instruments
Mainly due to the
increase in
Development
22,789.22 0.10 16,774.67 0.08 35.85 research and
Expenses
development
expenditures
Mainly as a result
Short-term of working
1,122,621.21 5.16 768,790.82 3.78 46.02
borrowings capital
replenishment
Mainly due to the
Trading
expiration of
financial 629.40 0.00 2,695.25 0.01 -76.65
lock-up
liabilities
instruments
Mainly due to
changes in the
Derivative
fair value of lock-
financial 8,021.24 0.04 23,958.25 0.12 -66.52
up instruments
liabilities
and interest rate
swap agreements
Mainly due to the
Contractual
1,001,687.03 4.61 626,958.44 3.08 59.77 increase in
liabilities
advance receipts
Mainly due to
Other current repayment of
223,453.01 1.03 689,110.94 3.39 -67.57
liabilities ultra-short term
bonds
Mainly due to
Long-term
303,857.38 1.40 1,182,141.63 5.81 -74.30 repayment of
borrowings
borrowings
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Mainly due to the
conversion of
Bonds Payable 33,473.00 0.15 671,350.11 3.30 -95.01 convertible bonds
in the current
period
Mainly due to the
increase in the
withholding of
Estimated
194,856.55 0.90 144,284.40 0.71 35.05 package
liabilities
installation fee in
line with growth
of revenue scale
Mainly due to the
Deferred increase in
85,279.46 0.39 63,376.17 0.31 34.56
revenue government
subsidies
Other non- Mainly due to
current 4,946.17 0.02 2,703.35 0.01 82.96 increase in
liabilities deposits
Mainly due to the
decrease in the
Other equity
11,801.75 0.05 236,419.53 1.16 -95.01 conversion equity
instruments
component of the
convertible bonds
Mainly due to the
increase in equity
Capital reserves 2,254,934.56 10.37 1,500,747.56 7.37 50.25 premium from the
conversion of
convertible bonds
Mainly due to the
Treasury shares 242,403.88 1.11 2,889.66 0.01 8,288.68 Company's share
repurchase
2. Overseas Assets
√Applicable □Not Applicable
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(1) Scope of assets
Among the assets, overseas assets amounted to 9,618,279 (unit and currency: RMB10,000),
representing 44.23 % of the total assets.
(2) Explanation of high percentage of overseas assets
√Applicable □Not Applicable
Unit and Currency: RMB
Operating Revenue
Name of overseas Net Profit of the
Reason for Formation Operating mode during the reporting
asset reporting period
period
Overseas Home Overseas mergers & Localized Operations
Appliance and acquisitions and the with the integration of
113,725,197,263.9 5,926,026,404.54
Smart Home Company’s own R&D, manufacturing
Business development and marketing
Note: The net profit stated in the above table represents operating profit.
3. Restrictions on major assets as of the end of reporting period
□ Applicable √ Not Applicable
4. Other Explanations
□ Applicable √ Not Applicable
(IV) Analysis of industry operating information
□ Applicable √ Not Applicable
(V) Analysis of investment
Overall analysis on external equity investment
√ Applicable □ Not Applicable
In the purpose of increasing net profit attributable to owners of the parent company, promoting
company’s governance level, reducing daily related-party transactions, streamlining the shareholding
structure of the subject company and enhancing the managing efficiency of subsidiaries, On 29 October
2021, as audited and approved at the Twenty-fourth Meeting of the Tenth Session of the Board of
Directors of the Company, the Company acquired in cash 10.00% equity interest in Dalian Haier
Refrigerator Co., Ltd. and 3.94% equity interest in Qingdao Haier Special Electric Freezer Co., Ltd. and
100% equity interest in Qingdao Haier Quality Inspection Co., Ltd. held by Haier Group . The transaction
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Haier Smart Home Co., Ltd. 2021 Annual Report
consideration was RMB 39,600,000, RMB 28,846,300 and RMB 36,300,000 respectively, totaling RMB
104,746,300. As at the end of the Reporting Period, the transaction was completed.
1. Significant equity investment
√Applicable □Not Applicable
Please refer to the content in ‘1. Overall analysis on external equity investment’ as stated above.
2. Significant non-equity investment
□Applicable √Not Applicable
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3. Financial assets measured at fair value
√Applicable □Not Applicable
Unit and Currency: RMB
Current purchase/ Sale Investment income Changes in fair value
Financial assets measured Initial investment Source
during the reporting during the reporting during the reporting
at fair value cost of funds
period period period
Foreign exchange forward
Self-owned 385,093,478.12 51,560,818.94
contracts
Wealth management
2,157,550,007.50 Self-owned 254,052,501.00 60,011,933.94 487,081.52
products
Investments in trading
284,382,243.23 Self-owned 199,878,386.41 46,729,587.36
equity instruments
Investment funds 124,067,582.04 Self-owned 12,696,004.62 18,097,485.77
Investments in other equity
3,587,415,678.11 Self-owned 736,271,801.04 58,558,795.05 1,472,225,880.04
instruments
Forward commodity
Self-owned -18,646,990.66
contracts
Other derivative financial
29,450,000.00 Self-owned
instruments
Total 6,182,865,510.88 / 1,202,898,693.07 503,664,207.11 1,570,453,862.97
Note: As of 31 December 2021, the aggregate balance of foreign exchange derivative transaction
amounted to approximately US$ 2.286 billion.
4. Detailed progression of material asset regroup and integration during the reporting period
□ Applicable √ Not Applicable
(VI) Sale of material assets and equity
□ Applicable √ Not Applicable
(VII) Analysis on major subsidiaries and Investees
□ Applicable √ Not Applicable
(VIII) Structured entities controlled by the Company
□ Applicable √ Not Applicable
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VI. DISCUSSION AND ANALYSIS ON THE COMPANY’S FUTURE DEVELOPMENT
)I( Setup and trend of the industry
√ Applicable □ Not Applicable
For details, please refer to the relevant contents of “II. INTRODUCTION OF THE INDUSTRY
WHERE THE COMPANY OPERATES DURING THE REPORTING PERIOD” under “Section III
Management Discussion and Analysis” in this report.
)II( Development strategy of the Company
√ Applicable □ Not Applicable
To become a user-centred digital enterprise in the IoT era, and achieve leadership as the world's
first IoT-based smart home ecosystem brand. The Company will continue to consolidated its leadership
in refrigerators, washing machines and water heaters; enhance the performance of kitchen appliances and
air conditioners; accelerate growth in tumble dryers and dishwashers, and capture opportunities of
lifestyle appliances and cleaning appliances while developing Three-Winged Bird scenario brand in order
to stay ahead in this competitive industry.
)III( Business plan
√ Applicable □ Not Applicable
In 2022, the Company will take the following measures to generate sustainable growth:
In the domestic market, the Company will accelerate the transition of ‘high-end brand → scenario
brand → ecosystem brand’, and expand Casarte’s market leadership from product to scenario
applications while increase user value with initiatives targeting outstanding quality, comprehensive
solution, smart scenario, ecosystem platform and lifelong user loyalty. On the other hand, Three-Winged
Bird brand will remain focused on improving user experience with accelerated introduction of solution
packages that combine smart appliances with home improvement offerings, thus become lifelong
partners in users’ pursuit of a better life.
In the overseas markets, guided by ‘RenDanHeYi ( 一 合單人 )’ principles, the Company will make
dedicated efforts become No. 1 globally by leveraging on well-established localized operations to speed
up product development pipeline, expanding online & offline presence; optimizing global supply chain
integration and manufacturing upgrade, thus promoting deeper integration of brands, R&D, procurement,
supply chain and human resource management.
On digital transformation front, the Company will remain committed to promote the
digitalization of logistics, services, marketing, and supply chain management so as to establish an end-
to-end operation system that creates first class user experience, facilitates distributors’ development and
improves network efficiency, while building long lasting partnership with users in assisting them
building and servicing a home through accelerated implementation of Three-Winged Bird platform and
Experience Cloud platform.
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)VI( Potential risks of the Company
√ Applicable □ Not Applicable
1. Risk of decreasing market demand due to slowdown in macroeconomic growth. Sales of
white goods as durable consumer appliances are subject to users' income level and their expectations of
future income growth which would have a certain impact on their willingness to purchase products. A
slowdown in macroeconomic growth causing a decline in users' purchasing power would have a negative
impact on industry growth. In addition, a slowdown in real estate market would also have a negative
impact on market demand, which would indirectly affect end-user demand for home appliances.
2. Risk of price war caused by intensified industry competitions. The white goods industry is
highly competitive with a high degree of product homogeneity, industry concentration has increased in
recent years. Increase in inventory in individual sub-sectors due to imbalance between supply and
demand may lead to risks such as price war. Furthermore, due to rapid technological advancements,
scarce talents in the industry, shortened product life cycles and ease of imitation, it is becoming
increasingly difficult to profit. New products, services and technologies are often associated with higher
selling prices, and it has become necessary for the Company to invest more in research and development
in order to achieve that. The Group will actively invest in research and development to attract users
through continuous innovation in products and services, and establish a lasting brand influence.
3. Risk of fluctuations in raw material prices. The Company's products and core components
mainly use metal such as steel, aluminum, and copper as raw materials, as well as bulk commodity such
as plastics and foam. If the prices of raw materials continue to rise, it will put certain pressure on the
Company’s production and operations. In addition, the Company relies on third party suppliers for key
raw materials, components and manufacturing equipment, as well as OEM suppliers, and any disruption
in supply or significant price increases by these suppliers will have a negative impact on the Company’s
businesses. As a leader in the industry, the Company will take measures to reduce the risk of raw material
fluctuations on its operations such as by using value adjustment mechanism on volume and price with
suppliers and hedging.
4. Operational risk in overseas business. The Company has steadily developed its global business
and has established production bases, research and development centers and marketing centers in many
parts of the world, with the proportion of overseas revenue increasing year by year. Overseas markets
are subject to political and economic situations (events such as military conflicts and wars), legal systems
and regulatory regimes of those countries and regions, and significant changes in these factors may pose
certain risks to the Company’s local operations in these markets. The Company has taken various
measures to mitigate the relevant impact, including active collaborations with suppliers and distributors,
improving production efficiency to offset the impact on the Company’s overall cost of sales, potentially
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expanding the Company’s supply resources to other countries, and taking measures to ensure safety of
its people and assets.
5. Risk of exchange rate fluctuations. As the Company expands its global footprint, the import
and export of the Company’s products involve the uses of foreign currencies such as the U.S. dollar, the
Euro and the Japanese yen. If the exchange rates of relevant currencies fluctuate, it will have a certain
impact on the Company’s financial position and increase its financial costs. In addition, the Company’s
consolidated financial statements are denominated in Renminbi, while the financial statements of its
subsidiaries are measured and reported in the currency of their primary economic environment in which
the entity operates, and are therefore subject to currency exchange risk. In this regard, the Company uses
hedging instruments to reduce its exposure to exchange rate fluctuations.
6. Risk of policy changes. The home appliance industry is closely related to the consumer goods
market and the real estate market. Changes in macroeconomic policies, consumption investment policies,
real estate policies and relevant laws and regulations will affect distributors' demand for products, which
in turn will affect product sales of the Company. The Company will closely monitor changes in policies,
laws and regulations, and anticipate market changes to safeguard the Company’s further development.
7. Risk of uncertainties resulted from COVID-19 outbreak. The COVID-19 outbreak, which
gradually spread around the end of 2019, could lead to a further weakening of consumer demand for
home appliances, which could in turn affect the Company’s product sales. Firstly, lockdowns, social
distancing measures and travel restrictions could reduce user mobility and result in the closure of retail
sales network, thereby reducing consumer demand for home appliances. Secondly, the pandemic may
also cause disruptions to the operations of distributors, such as logistical disruptions in the delivery of
products, resulting in distributors' dissatisfaction with the Company’s services and consequently reduced
demand for the Company’s products. The Company will leverage its anti-pandemic experience in the
Chinese market and make best use of its global resource synergies to mitigate the impact of the pandemic
on its businesses.
8. Credit risk. The Company may not be able to collect all trade receivables from its distributors,
or distributors may not be able to settle the Company's trade receivables in a timely manner, in which
case the Company's business, financial status and operation performance may be adversely affected. In
relation to this risk, the Company will maintain flexibility to offer credit period of 30 to 90 days to certain
distributors based on their credit history and their transaction volume.
9. Inventory risk. Since the Company cannot always accurately predict trends and events and
maintain appropriate inventory levels, there may be excess inventory as a result, for which the Company
may be forced to offer discounts or offer promotions to tackle the slow-moving inventory issue. On the
other hand, a shortage of inventory may occur, which may lead to loss of sales opportunities for the
Company. However, the Company will manage its inventory and make adjustment according to market
situation. It will also regularly assess if impairment of inventory is needed.
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)V(Others
□ Applicable √ Not Applicable
VII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON- DISCLOSURE BY
THE COMPANY IN CONSIDERATION OF INAPPLICABLE REGULATIONS, STATE
SECRETS AND COMMERCIAL SECRETES
□ Applicable √ Not Applicable
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Section IV Corporate Governance
I. EXPLANATION OF CORPORATE GOVERNANCE
√ Applicable □ Not Applicable
During the reporting period, the Company has strictly complied with the requirements under
Company Law of the People's Republic of China, Securities Law of the People's Republic of China, Code
of Corporate Governance of Listed Companies and the requirements of the relevant laws and regulations,
and has been committed to improving its governance structure, regulating its operation, perfecting its
information disclosure system, strengthening the communication with investors and upgrading the level
of the Company’s corporate governance. During the reporting period, the Company has made
amendments to Articles of Association according to domestic and overseas regulatory requirements to
enhance its standardized operation and comprehensive management. The corporate governance structure
of the Company is sound and there is no difference between the corporate governance structure and the
requirement of relevant documents from CSRC.
(1) Shareholders and general meeting of shareholders:
The Company could ensure that all shareholders, especially the minority shareholders enjoy equal
treatment and are able to fully exercise their rights; during the reporting period, the convening procedures
of the shareholders’ general meeting of the Company were in compliance with the requirements of
Articles of Association and Rules of Shareholders’ General Meeting of the Company. Attendance of
shareholders at the meeting was relatively high, which ensured that the shareholders fully excised voting
rights; the Company also engaged lawyers who possess the qualification to engage in securities business
to attend and witness the shareholders’ general meeting; the proposals were considered and approved in
accordance with legal procedures, which could guarantee the power and rights of minority shareholders.
(2) Relationship between controlling shareholders and the listed company:
The controlling shareholders acted normatively and did not interfere with the Company’s
management decisions and operations, directly or indirectly. The Company and the controlling
shareholders are independent of each other in terms of their staff, assets, finance, organization and
business. The Board of Directors, the Board of Supervisors and internal administrative departments are
all independent of each other. The specific requirements for regulating Related-party transactions and
fund flow are set out in Articles of Association, Fair Decision-Making System for Related-party
Transactions and Administrative System for Regulation of Fund Flow between the Company and Related
Parties, Risk Control System for Related-party Transaction with Haier Group Finance Co., Ltd., and
Proposal for Emergency Response System for Risk of Deposits with Haier Group Finance Co., Ltd.,
which guaranteed the interests of investors. After being approved at the annual general meeting, the daily
related-party transactions are implemented according to specialized review procedures. The basis of
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pricing and reasonability of operation agreement shall be supervised and reviewed by special
departments, so as to regulate the execution of related-party transactions. Internal control and internal
control audit of the Company would also focus on the compliance of the related-party transactions, in
order to protect the interests of minority shareholders and non-related shareholders.
(3) Directors and the Board of Directors:
The Board of Directors acts as the decision-making body of the Company. The Board of Directors
of the Company is responsible to the shareholders’ general meetings, and performs its duty within the
terms of reference under Articles of Association and other relevant laws and regulations in accordance
with the procedures under Rules of Procedure for the Board of Directors. During the reporting period,
the Board of Directors operated in accordance with rules and continued to perform their duties under
Articles of Association and relevant laws and regulations better and practically implement relevant
decisions at the shareholders’ general meeting. The decision-making procedure and particulars of the
resolutions of the Board of Directors were in compliance with relevant Listing Rules, Articles of
Association and relevant requirements under laws and regulations, and the resolutions made were legal
and valid.
In determining the composition of the Board of Directors, the Company took full account of the
diversity of the members of the Board, including but not limited to gender, age, culture, education
background, professional experience, skills, knowledge and length of service of the director as well as
other regulatory requirements. During the reporting period, the Company has 8 external directors, of
which 4 are independent directors, representing a large proportion of the total number of the directors
(11 in total) of the Company. The Board continues to maintain an open structure. The members of the
Board have extensive experience and expertise in areas of finance and accounting, investment strategy,
corporate culture and corporate governance, which helped to improve the efficiency of the Board,
reduced the risks of management and control and made better decisions so as to realize the sustainable
and healthy development of the Company.
During the reporting period, the directors attended the board meeting and shareholders’ general
meeting with responsible and diligent attitude and protected the interests of the Company. The
independent directors of the Company have a diligent and responsible attitude towards their work by
actively attending meetings of the Board and its committees, expressing independent opinion on matters
of related-party transactions, cash dividend, external guarantees and providing constructive advice on the
production and operation of the Company.
Strategic committee, audit committee, remuneration and appraisal committee, nomination
committee and ESG committee are established under the Board of the Company. The number of
independent directors represents more than one-half of the audit committee, nomination committee,
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remuneration and appraisal committee. During the reporting period, the Company set up the new ESG
committee, which will help to promote the environmental, social responsibility and management
capabilities of the Company.
(4) Supervisors and the Board of Supervisors:
During the reporting period, the Board of Supervisors operated in accordance with rules and
continued to practically perform their duties under Articles of Association and relevant laws and
regulations. The number and composition of the members of the Board of Supervisors complied with
requirements under laws and regulations. During the reporting period, the Supervisors of the Company
performed their duties earnestly and adhered to the principle of being responsible to the Company and
all shareholders to supervise legality and compliance on finance matters of the Company and
performance of duty by the Company’s directors, presidents of the Company and other senior
management strictly in accordance with requirements under Articles of Association, Rules of Procedure
for the Board of Supervisors and relevant laws and regulations.
(5) Performance evaluation and incentive and disciplinary mechanism:
In accordance with Articles of Association, the Board of Directors shall appoint or remove the
president and the secretary of the Board of Directors; the Board shall appoint or remove the vice president
and other senior management (including the chief financial officer) of the Company based on the
nomination by the president and determine their remunerations and rewards and penalties. The human
resource department of the Company shall make routine appraisal and evaluation on the performance of
directors, supervisors and senior management. Remuneration and Appraisal Committee shall make
inspection and evaluation on their performance to determine their remunerations at the end of the year.
The Company is focused on maximizing the value of people. In line with the global landscape of
the capital market, the Company has established an incentive system that unifies long and short-term
incentives and constraints and aligns the interests of employees and all shareholders. During the reporting
period ， the Company introduced domestic and overseas incentive plans with various appraisal cycle,
multi-level and all-round benefits, further expanding the scope of incentives. On the basis of A-Share
Employee Stock Ownership Plan, H-Share Core Employee Stock Ownership Plan and H-Share Overseas
Trust Incentive Plan, the Company introduced A-Share Option Incentive Scheme, which helped the
Company better focus on the implementation of smart home strategy, optimize the incentive mechanism
to further attract talents and promote business synergy and integration, enhance values of the Company
and the shareholders with a view to achieving quality and sustainable growth through the cycle.
(6) Stakeholders:
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The Company was able to fully respect and protect the lawful rights and interests of the suppliers,
channels, banks, other creditors, employees, consumers and other stakeholders. Meanwhile, the
Company actively took part in public welfare undertaking in such place where it operates, placed a lot
of emphasis on environment protection, performed its social duties earnestly and worked together with
these stakeholders actively with good communication to jointly promote the sustainable and sound
development of the Company. For details, please refer to relevant information in 2021 Environmental,
Social and Governance Report published on the same date of this report.
(7) Information disclosure:
During the reporting period ， the Company strictly complied with the requirements of the listing
rules of each place of listing and adhered to the principles of timely disclosure, truthful disclosure,
accurate disclosure, complete disclosure, fair disclosure and lawful disclosure to ensure that all investors
have equal access to information. The Company authorized Shanghai Securities News, China Securities
Journal, Securities Times and Securities Daily for information disclosure. The Company authorized the
secretary of the Board of Directors to take charge of information disclosure, reception of visits by
shareholders and handling of shareholder’s enquiries. Meanwhile, the Company broadened
communication channels for investors to get relevant information of the Company through result
presentation, telephone conference calls after periodical reporting and occasionally holding on-site and
online forums. With respect to the significant Related-party transactions, the Company performed
necessary approval procedures and disclosed relevant information strictly in compliance with Articles of
Association and Fair Decision-Making System for Related-party Transactions to protect the interests of
investors. During the reporting period, the Company further perfected the confidentiality procedure for
information disclosure strictly in compliance with the Registration System of Insiders, the Responsibility
System for Major Errors in Information Disclosure in Annual Reports and the Management System of
External Information Users to ensure the fairness and equity of information disclosure.
(8) Management of Investor Relation
During the reporting period, the Company continued to uphold the principle of respecting investors
with focus on the needs of investors to strengthen communication and exchange with investors in an
active, open, innovative and professional manner so as to enhance investors’ understanding and
recognition of the Company and safeguard the legal rights of investors. In accordance with guideline of
the Management System for Investor Relation, the Company integrated business and financial resources
by the office of the secretary of the board of Directors and realized positive and all-around access to
investors in a multi-layer and diversified format through introduction reference, annual investor
conference, result announcement conference, and online forum. Meanwhile, the Company replied
investors on a timely basis by ways of interview, e-mail, phone, fax and the website
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(http://sns.sseinfo.com) and enhanced interaction with investors, so as to respect and protect the interests
of various investors, with the aim of achieving harmonious and mutual success with the Company, staff
and investors.
Whether there is a significant difference between the corporate governance and requirements in
respect of corporate governance of listed companies of laws, administrative regulations and the CSRC;
if so, the reasons should be explained
□ Applicable √ Not Applicable
II. SPECIFIED MEASURES ADOPTED BY THE CONTROLLING SHAREHOLDERS AND
ULTIMATE CONTROLLERS TO MAINTAIN INDEPENDENCE WITH RESPECT TO
ASSETS, PERSONNEL, FINANCE, ORGANIZATION, BUSINESS, AND THE SOLUTIONS
ADOPTED, WORKING PROGRESS AND SUBSEQUENT WORKING PLANS IN CASE OF
THE COMPANY’S INDEPENDENCE BEING AFFECTED
□ Applicable √ Not Applicable
Controlling shareholders, ultimate controllers and other parties controlled by them engaged in
business that are same as or similar to the company, peer competition and impact of significant changes
in peer competition on the company, solutions adopted, working progress and subsequent solution plans
□ Applicable √ Not Applicable
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III. BRIEF INTRODUCTION TO THE GENERAL MEETING OF SHAREHOLDERS
Index for details of websites
Date of
Meeting Date designated for publishing Resolutions approved
disclosure
resolutions
Considered and
approved the
For details, please refer to the
resolutions for the
Announcement on Resolutions
amendment of the
Passed at the 2021 First
articles of association,
2021 First Extraordinary Extraordinary General Meeting,
the appointment of
General Meeting 2021 First A Shares Class
auditors, the general
Meeting, 2021 First D Shares
mandate to repurchase
Class Meeting and 2021 First H 6 March
5 March 2021 H share and the election
Shares Class Meeting of Haier 2021
of additional directors
Smart Home Co., Ltd. (L2021-
009) published by the Company on
2021 First A Shares Class
the website of Shanghai Stock
Meeting Considered and
Exchange (www.sse.com.cn) and
2021 First D Shares Class approved a resolution
the four major securities
Meeting for general mandate to
newspapers.
2021 First H Shares Class repurchase H share
Meeting
Considered and
approved the
For details, please refer to the resolutions related to
Announcement on Resolutions annual report, profit
Passed at the 2020 Annual General distribution proposal,
Meeting, 2021 Second A Shares expected annual
Class Meeting, 2021 Second D guarantee/foreign
Class Meeting and 2021 Second H exchange operation,
2020 Annual General
25 June 2021 Shares Meeting of Haier Smart 26 June 2021 general mandate to
Meeting
Home Co., Ltd. (2021-045) issue additional/
published by the Company on the repurchase H/D shares
website of Shanghai Stock of the Company,
Exchange (www.sse.com.cn) and Employee Stock
the four major securities Ownership Plan and the
Newspapers. election of sole
director/supervisors,
etc.
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2021 Second A Shares Class Considered and
Meeting approved a resolution
2021 Second D Shares Class for general
Meeting authorization to
2021 Second H Shares repurchase H/D shares
Meeting of the Company
For details, please refer to the Considered and
Announcement on Resolutions approved Share Option
2021 Second Extraordinary Passed at the 2021 Second Incentive Scheme,
General Meeting Extraordinary General Meeting, appraisal management
2021 Third A Shares Class method and relevant
Meeting, 2021 Third D Shares authorization
16
2021 Third A Shares Class 15 September Class Meeting and 2021 Third H
September
Meeting 2021 Shares Class Meeting of Haier
2021
2021 Third D Shares Class Smart Home Co., Ltd. (L2021-
Considered and
Meeting 072) published by the Company on
approved Share Option
the website of Shanghai Stock
Incentive Scheme
2021 Third H Shares Class Exchange (www.sse.com.cn) and
Meeting the four major securities
newspapers.
Preferred shareholders whose voting rights have been restored requested an extraordinary general
meeting
□ Applicable √ Not Applicable
Explanation of Shareholders' general meeting
√ Applicable □ Not Applicable
(1) The 2021 First Extraordinary General Meeting and the 2021 First A/D/H Shares Class
Meetings of the Company was held in successive order by way of on-site voting and network voting by
poll at Room B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road,
Qingdao, the PRC, in the afternoon on 5 March 2021, considering the amendment of articles of
association of the Company and other relevant resolutions. The total number of the shares of the
Company carrying voting rights amounted to 9,284,895,068 shares (of which 6,308,552,654 shares were
A shares, 271,013,973 shares were D shares and 2,705,328,441 shares were H shares). 463 shareholders
and proxies, representing 5,402,912,205 shares or 58.19% of the total number of the shares of the
Company carrying voting rights, were present at the 2021 First Extraordinary General Meeting; 342
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shareholders and proxies, representing 3,389,819,287 shares or 53.73% of the total number of A shares
of the Company carrying voting rights, were present at the 2021 First A Shares Class Meeting; 115
shareholders and proxies, representing 136,331,271 shares or 50.30% of the total number of D shares of
the Company carrying voting rights, were present at the 2021 First D Shares Class Meeting; 7
shareholders and proxies, representing 1,827,803,082 shares or 67.56% of the total number of H shares
of the Company carrying voting rights, were present at the 2021 First H Shares Class Meeting. The
Directors, supervisors and senior management of the Company as well as the lawyers engaged by the
Company also attended the abovementioned four meetings. The abovementioned four meetings were
convened by the Board of the Company, and Vice Chairman Ms. Tan Lixia presided over these meetings.
The Company had 8 Directors, of whom 2 Directors attended the meetings (Directors Liang Haishan,
Wu Changqi, Lin Sui, Dai Deming, Chien Da-Chun and Wong Hak Kun were unable to attend the
meetings due to personal engagement); the Company had 3 supervisors, all of whom attended the meeting.
The secretary of the Board of the Company attended the abovementioned meetings and other members
of senior management of the Company were invited to attend the abovementioned meetings.
(2) The 2020 Annual General Meeting and the 2021 Second A/D/H Shares Class Meetings of
the Company was held in successive order by way of on-site voting and network voting by poll at Room
B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road, Qingdao, the
PRC, in the afternoon on 25 June 2021, considering the annual report and other relevant resolutions. The
total number of the shares of the Company carrying voting right amounted to 9,351,540,298 shares (of
which 6,268,408,194 shares were A shares, 271,013,973 shares were D shares and 2,812,117,411 shares
were H shares). 985 shareholders and proxies, representing 6,080,584,192 shares or 64.63% of the total
number of the shares of the Company carrying voting right, were present at the 2020 Annual General
Meeting. 865 shareholders and proxies, representing 4,029,351,155 shares or 63.87% of the total number
of A shares of the Company carrying voting rights, were present at the 2021 Second A Shares Class
Meeting; 119 shareholders and proxies, representing 140,727,610 shares or 51.93% of the total number
of D shares of the Company carrying voting rights, were present at the 2021 Second D Shares Class
Meeting; 5 shareholders and proxies, representing 1,989,396,251 shares or 70.74% of the total number
of H shares of the Company carrying voting rights, were present at the 2021 Second H Shares Class
Meeting. The Directors, supervisors and senior management of the Company as well as the lawyers
engaged by the Company also attended the abovementioned four meetings. The abovementioned four
meetings were convened by the Board of the Company, and Chairman Mr. Liang Haishan presided over
these meetings. The Company had 11 Directors, of whom 4 Directors attended the meetings (Directors
Li Huagang, XieJuzhi, Wu Changqi, Lin Sui, Dai Deming, Chien Da-Chun and Li Shipeng were unable
to attend the meetings due to personal engagement); the Company had 3 supervisors, of whom 1
supervisor attended the meetings (Supervisors Wang Peihua and Ming Guoqing were unable to attend
the meetings due to personal engagement). The secretary of the Board of the Company attended the
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abovementioned meetings and other members of senior management of the Company were invited to
attend the abovementioned meetings.
(3) The 2021 Second Extraordinary General Meeting and the 2021 Third A/D/H Shares Class
Meetings of the Company was held in successive order by way of on-site voting and network voting by
poll at Room B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road,
Qingdao, the PRC, in the afternoon on 15 September 2021, considering the Share Option Incentive
Scheme and other relevant resolutions. The total number of the shares of the Company carrying voting
right amounted to 9,348,215,954 shares (of which 6,262,154,495 shares were A shares, 271,013,973
shares were D shares and 2,815,047,486 shares were H shares). 640 shareholders and proxies,
representing 5,996,610,506 shares or 64.15 % of the total number of the shares of the Company carrying
voting right, were present at the 2021 Second Extraordinary General Meeting. 527 shareholders and
proxies, representing 3,850,245,299 shares or 61.48 % of the total number of A shares of the Company
carrying voting rights, were present at the 2021 Third A Shares Class Meeting; 107 shareholders and
proxies, representing 149,499,080 shares or 55.16 % of the total number of D shares of the Company
carrying voting rights, were present at the 2021 Third D Shares Class Meeting; 6 shareholders and proxies,
representing 2,055,477,618 shares or 73.02 % of the total number of H shares of the Company carrying
voting rights, were present at the 2021 Third H Shares Class Meeting. The Directors, supervisors and
senior management of the Company as well as the lawyers engaged by the Company also attended the
abovementioned four meetings. The abovementioned four meetings were convened by the Board of the
Company, and Chairman Mr. Liang Haishan presided over these meetings. The Company had 11
Directors, of whom 9 Directors attended the meetings (Directors Chien Da-Chun, Wong Hak Kun, Li
Shipeng, Wu Changqi, Yu Hon To, Li Kam Fun participated by means of communication while directors
Lin Sui and WU Qi were unable to attend the meetings due to personal engagement); the Company had
3 supervisors, of whom 3 supervisors attended the meetings. The secretary of the Board of the Company
attended the abovementioned meetings and other members of senior management of the Company were
invited to attend the abovementioned meetings.
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IV. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
(I) Changes of shareholding and remuneration of current and retired directors, supervisors and senior management during the reporting period
√Applicable □Not Applicable
Unit: share
Total
remuneration Whether
Shareholdings received from the receive
Expiration Shareholdings Increase/decrease
Appointment at the Reason for Company during remuneration
Name Title (note) Gender Age date of at the end of in shares for the
date beginning of increase/decrease the reporting from the
appointment the year year
the year period Company’s
(RMB0’000) related party
(before tax)
Employee
Liang
Chairman Male 56 2019–06–18 2022–06–17 14,923,047 16,411,209 1,488,162 shareholding 259.5 NO
Haishan
scheme vested
Director,
Employee
Li Chief
Male 53 2019–06–18 2022–06–17 694,607 764,145 69,538 shareholding 224.3 NO
Huagang Executive
scheme vested
Officer
Vice
Xie Juzhi Male 56 2021-3-5 2022–06–17 195.5 NO
president
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Wu
Director Male 67 2019–06–18 2022–06–17 22.5 NO
Changqi
Lin Sui Director Male 66 2019–06–18 2022–06–17 22.5 NO
Yu Hon
Director Male 74 2021-3-5 2022–06–17 18.75 NO
To
Li Kam
Director Female 70 2021-3-5 2022–06–17 18.75 NO
Fun
Chien Da- Independent
Male 69 2019–06–18 2022–06–17 22.5 NO
chun director
Wong Independent
Male 66 2020–06–03 2022–06–17 22.5 NO
HakKun director
Li Independent
Male 55 2021-3-5 2022–06–17 18.75 NO
Shipeng director
Independent
Wu Qi Male 55 2021-6-25 2022–06–17 8.75 NO
director
Employee Received no
Tan Lixia Vice
Female 52 2019–06–18 2021-3-30 8,535,920 9,726,450 1,190,530 shareholding remuneration YES
(retired) president
scheme vested from the Company
Dai
Independent
Deming Male 60 2019–06–18 2021-6-25 13.75 NO
director
(retired)
Liu Dalin Chairman of Male 42 2021-6-25 2022–06–17 Received no YES
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Haier Smart Home Co., Ltd. 2021 Annual Report
the remuneration
Supervisory from the Company
Committee
Employee
Ma
Supervisor Female 53 2021-6-25 2022–06–17 3,904 3,904 shareholding 34.1 NO
Yingjie
scheme vested
Employee
Yu Miao Male 40 2019–06–18 2022–06–17 33.6 NO
supervisor
Chairman of
Wang Employee Received no
the
Peihua Male 65 2019–06–18 2021-6-25 161,067 210,127 49,060 shareholding remuneration YES
Supervisory
(retired) scheme vested from the Company
Committee
Ming Employee Received no
Guoqing Supervisor Male 62 2019–06–18 2021-6-25 105,511 137,564 32,053 shareholding remuneration YES
(retired) scheme vested from the Company
Deputy Employee
Li Pan general Male 46 2021-2-7 2022–06–17 387,118 533,218 146,100 shareholding 154.6 NO
manager scheme vested
Deputy
Employee
general
Gong Wei Male 49 2019–06–18 2022–06–17 1,724,315 1,911,970 187,655 shareholding 124.5 NO
manager,
scheme vested
Chief
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Haier Smart Home Co., Ltd. 2021 Annual Report
financial
officer
Deputy
Huang
general Male 45 2021-2-7 2022–06–17 86.0 NO
Xiaowu
manager
Deputy Employee
Wu Yong general Male 44 2021-2-7 2022–06–17 44,765 146,743 101,978 shareholding 118.7 NO
manager scheme vested
Deputy
Li Yang general Male 46 2021-2-7 2022–06–17 107.9 NO
manager
Deputy
Guan
general Male 44 2021-2-7 2022–06–17 115.6 NO
Jiangyong
manager
Deputy Employee
Wang Li general Female 57 2021-2-7 2022–06–17 504,505 575,100 70,595 shareholding 105.5 NO
manager scheme vested
Secretary to Employee
Ming
the board of Female 58 2019–06–18 2022–06–17 1,275,295 1,395,489 120,194 shareholding 80.3 NO
Guozhen
directors scheme vested
Total / / / / 28,356,150 31,815,919 3,459,769 / 1,808.85 /
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Note: (1) “Shareholdings at the beginning of the year” as stated in the above table represent the later of “the beginning of the year” of the appointment or “appointment
date” of such directors, supervisors and senior management; (2) all the aforesaid shares are A-shares.
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Name Major working experience
Male, born in 1966, is a senior engineer. He served as head of the quality department of Qingdao Haier Refrigerator Co., Ltd., general manager of Qingdao
Haier Air Conditioner Gen Corp., Ltd, vice president of Haier Group, senior vice president of Haier Group, rotating president of Haier Group, vice chairman,
Chairman and president of Haier Smart Home Co., Ltd. He is vice chairman of the board of directors of Haier Group, president of Haier Group, and
chairman of 10th session of the Board manager of Haier Smart Home Co., Ltd.; he was rewarded National May 1st Labor Medal, Outstanding Leadership
Liang Haishan
Award of the National Light Industry Enterprise Information ( 奖 导 领 秀 优 化息 信 业企 业 工 轻 国 全 ), Top 10 Leaders in China Strategic Emerging
Industries; Prize of Technology Advancement for China Household Appliances, First Prize Award of Science and Technology Progress of China National
Light Industry Council, China Patent Gold Prize, 2017 Forbes China Best CEO of Listed Company, 2017 Taishan Industry Leading Talent of Shandong
Province, Labor Model of Shandong Province.
Male, born in 1969. He graduated from Huazhong University of Technology in 1991 with a Bachelor’s degree of Economics, and from China Europe
International Business School in 2014 with a degree of Executive Master of Business Administration (EMBA). He was successively awarded 2015 China
Home Appliance Marketing Leader, 2016 Person of the Year in Home Appliance Industry of Shandong, Award of Outstanding Contribution in 40-Years
Li Huagang
Development of China’s Home Appliance Industry 2018, 2019 Qingdao Top Talent, and 2019 Person of the Year of China’s Top Ten Brands. He served
as the chief operating officer and executive director of Haier Electonics Group Co., Ltd. (HEG), a subsidiary of the Company, and is currently a director
and Chief Executive Officer of Haier Smart Home Co., Ltd.
Male, born in 1966. He graduated from Shandong University of Finance and Economics in July 1989 with a Bachelor’s degree, and joined Haier Group in
the same year. Mr. Xie has experience in whole-process product management, product-wide services and product-wide marketing. Mr. Xie has held senior
positions in Electrothermal Division of Haier Group, East China Marketing and Promotion Division of the Haier Group, and served as the General Manager
XieJuzhi of Customer Services of Haier Group. He has been the Chief Executive Officer and an Executive Director of Haier Electronics Group Co., Ltd. Since July
2012, he has been the Vice President of Haier Group in charge of the Group’s integration of community sales services in first and second-tier cities, and
developing the online and offline sales of new household products. He then has been managing the newly developed business segments of Haier Group,
including water purification, logistics, Haier home and Gooday services. Since March 2021, he has been the vice chairman of Haier Smart Home Co., Ltd.
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He is currently responsible for supervising the smart living appliances segment. Mr. Xie was awarded honorary titles including the Gold Award of
Outstanding Contribution Award of China’s Home Appliance Services Industry ( 奖金 奖献贡 出突业 行务服电 家 国中 ) and Outstanding Entrepreneur of
Shandong Province ( 家 业企秀优 省东 山 ).
Male, born in 1955. He is currently a professor of strategic management and doctoral supervisor of Guanghua School of Management, Peking University.
He graduated from Shandong University with a Bachelor’s degree of Economics in 1982, and Katholieke Universiteit Leuven in Belgium with a Master’s
degree of Business Administration and a Doctoral degree in applied economics in 1990. He served as an assistant professor and associate professor in the
Department of Economics of School of Business and Management of Hong Kong University of Science and Technology, a professor and head of the
Wu Changqi
Department of Strategic Management of Guanghua School of Management of Peking University, a deputy dean of the Guanghua School of Management
of Peking University, and a director of the EM-BA degree programme center. He is currently the executive vice president of the Academy of Development
Strategy for National High-tech Industry Zones, Peking University, the dean of the School of Management of Shandong University, and the director of the
Tenth Session of the Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1956. He was a partner of Deloitte Touche Tohmatsu China (retired on 31 May 2019). He has been engaged in international tax consultancy
in USA and China for nearly 30 years. He participated in transactions, mergers and acquisitions, initial public offerings, financing projects, supply chain
taxation optimization, internal tax risk control and other aspects of professional tax consultancy of many PRC international enterprises, and has abundant
experience in restructuring, acquisition, equity arrangement, tax accounting and business transformation. In recent years, he has been mainly engaged in
the consulting of digital transformation of corporate financial and tax management. In 1989, he pursued his studies in USA and obtained a Master’s degree
Lin Sui in Business Administration and a Master’s degree of Science in Taxation. He joined Deloitte Touche Tohmatsu USA in 1993 and was transferred to Deloitte
Touche Tohmatsu China in 2002. Mr. Lin Sui is a Certified Public Accountant in USA. Prior to his return to China, he was employed by Ministry of Science
and Technology of China as a member of the overseas scholars’ advisory committee of the National High-tech Development Torch Program and an expert
on the United Nations development projects in China. At present, he has been invited as an external lecturer of China Europe International Business School
and Shanghai National Institute of Ac-counting, a part-time master degree tutor of Fudan University and Shanghai University of Finance and Economics,
Deputy Director of the Advisory Committee of China Tax Institute of Large Business (TILB), a council member of the Shanghai branch of China
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Association for Fiscal and Tax Law, and a director of the Tenth Session of the Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1948. He holds a Bachelor of Social Science degree from Chinese University of Hong Kong. He is a Fellow of the Institute of Chartered
Accountants in England and Wales and an Associate Member of Hong Kong Institute of Certified Public Accountants. Mr. Yu is a chartered accountant
with over 40 years’ experience in the fields of auditing, corporate finance (including advisory on IPO, mergers & acquisitions and financial restructuring),
financial investigation and corporate governance. Mr. Yu was formerly a partner of Coopers & Lybrand (now merged as PricewaterhouseCoopers) in Hong
Kong with extensive experience in the corporate finance advisory assignments in Greater China for Hong Kong corporations, private equity groups and
Yu Hon To
multinationals. Mr. Yu also served as an independent non-executive director and the chairman of the audit committee of Haier Electronics Group Co., Ltd.,
a subsidiary of the Company, over the past three years. Mr. Yu had served various public offices including being a member of the Listing Committee of
the Hong Kong Stock Exchange from 1992 to 1995, a member of the Investment Committee and the Audit Committee of Employees Retraining Board
(established under the Employees Retraining Ordinance of Hong Kong) from 1999 to 2020, and a member of the Board of Review (established under Inland
Revenue Ordinance of Hong Kong) from 2006 to 2012. He is currently a director of 10th session of the Board of Directors of Haier Smart Home Co., Ltd.
Female, born in 1952. She graduated from University of Hong Kong with Bachelor of Arts and Master of Business Administration degrees. She was
conferred with the degree of Doctor of Business Administration, honoris causa, from the Open University of Hong Kong in 2014. Ms. Li Kam Fun is
currently the president of Our Hong Kong Foundation. She also serves as an independent non-executive director of Nestle S.A, a publicly listed company
on the SIX Swiss Exchange. Ms. Li Kam Fun served as an independent non-executive director of Haier Electronics Group Co., Ltd., a subsidiary of the
Company, over the past three years. Prior to joining Our Hong Kong Foundation, Ms. Li Kam Fun had a distinguished career that spanned 34 years with
Amway Corporation. When she retired in 2011, she held the concurrent positions of Executive Vice President of Amway Corporation and Executive
Li Kam Fun
Chairman of Amway China Co. Ltd. responsible for Amway Greater China & Southeast Asia Region. During the last three years, Ms. Li Kam Fun had
also been an independent non-executive director of Amcor Limited (a company listed on the Australian Securities Exchange) from 2014 to 2019, and an
independent non-executive director of Trinity Limited (a company listed on the Main Board of the Hong Kong Stock Exchange) from 2011 to 2020. Ms.
Li Kam Fun’s leadership was well recognised in the business community. She was twice named the ‘‘World’s 100 Most Powerful Women’’ by Forbes
Magazine in 2008 and 2009. CNBC awarded Ms. Li Kam Fun with the ‘‘China Talent Management Award’’ in its 2007 China Business Leaders Awards.
Ms. Li Kam Fun currently holds several positions in public service including member of the Election Committee of Hong Kong (2021-2025), deputy
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secretary of Hong Kong Coalition, director of the Chinese Association of Hong Kong & Macao Studies, honorary special representative, conference
consultant and honorary president of All-China Women's Federation honorary president of the Hong Kong Federation of Women, permanent honorary
、
director of The Chinese General Chamber of Commerce 、 court member of the Open University of Hong Kong and member of the advisory panel of the
Xiqu Centre of the West Kowloon Cultural District Authority. She is currently a director of the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1953. He served as Chairman of IBM Greater China region, CEO of IBM Greater China region, etc. He graduated from the Department of
Mathematics of Tamkang University of Taiwan, and studied advanced management courses in the Institute of Business Administration of Harvard
Chien Da-chun
University, as well as the global senior manager courses of International Business Machines Corporation (IBM). He is currently an independent director of
the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1956. He received a Bachelor’s of Social Science degree from University of Hong Kong. He has over 36 years of experience in auditing,
assurance and management in Deloitte China. He has been a partner of Deloitte China since 1992 and served as a member of the board of directors of
Deloitte China from 2000 to 2008. Prior to his retirement in May 2017, he was Deloitte China’s National Managing Partner of Audit & Assurance. Mr.
Wong HakKun Wong is an associate of the Hong Kong Institute of Certified Public Accountants (HKICPA), an associate of the Association of Chartered Certified
Accountants (ACCA), an associate of the Chartered Institute of Management Accountants (CIMA), an associate of The Institute of Chartered Secretaries
and Administrators. He currently serves as an independent non-executive director of Yue Yuen Industrial Holdings (Limited), Lung Kee (Bermuda)
Holdings Limited, Guangzhou Automobile Group Co., Ltd., Hangzhou SF Intra-City Industrial Co., Ltd. and Haier Smart Home Co., Ltd.
Male, born in 1967. He holds a bachelor’s and Master’s degree from University of Science and Technology of China, and a PhD degree from Lehigh
University, USA. Mr. Li has extensive experience in Internet of Things technology and artificial intelligence. Mr. Li is currently the director of Applied
Intelligence Research Center of Suzhou Industrial Technology Research Institute. Prior to that, he served as the Chief Researcher and Deputy Dean of
Li Shipeng Microsoft Research Asia, Chief Technology Officer of Cogobuy Group, Vice President of iFlytek Group and Executive President of Shenzhen Institute of
Artificial Intelligence and Robotics. Mr. Li is a member of the International Eurasian Academy of Sciences and a fellow of the International Institute of
Electrical and Electronics Engineers (IEEE fellow). He was listed as one of the world’s top 1,000 computer scientists by Guide2Research and ranked top
20 in Mainland China in 2020. Mr. Li is a renowned expert in Internet, computer vision, cloud computing, Internet of Things and artificial intelligence. He
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is currently an independent director of the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1967. He has 25 years of (New PCEBG) experience in world-class management and consulting companies. He is currently a senior consultant
for Foxconn’s D sub-business group strategy and intelligent manufacturing and a consultant of Xnode, a famous accelerator for startups, and independent
director of the 10th session of the Board of Haier Smart Home Co., Ltd. He served as the vice president (Global) and vice chairman (Greater China) of
Accenture, and the chairman of Shun Zhe Technology Development Co., Ltd. He was a member and the president (Greater China) of Roland Berger’s
Global Management Committee, a member of Roland Berger’s Global Supervisory Board. He was awarded 2015 Outstanding Talent in Jing’an District,
Wu Qi Shanghai. Mr. Wu’s experience in consulting industry involves transportation/logistics, high-tech manufacturing, tourism, finance, consumer goods, real
estate, government departments and other industries. His has extensive experience in development strategy, organizational change, sales and brand strategy,
corporate innovation, digital transformation and intelligent manufacturing, post-merger integration, regional industrial and economic development and
upgrading. He is a well-known expert in China in Industry 4.0, transportation and regional planning and development. He served as a consultant for
Hangzhou Bay Development Planning, a member of the Intelligent Manufacturing Expert Committee of Municipal Government, deputy head of the 13th
Five-Year Planning Expert Committee of Zhengzhou City, Henan Province, vice chairman of China Cold Chain Alliance.
Female, born in 1970. She is a Chartered Global Management Accountant (CGMA). She joined Haier in August 1992, served as the director of overseas
market development, head of department of financial management, Chief Financial Officer (CFO), senior vice president of Haier Group and the vice
chairman of the 10th session of the Board of Haier Smart Home Co., Ltd. She is currently the vice chairwoman, executive vice president of the Board of
Haier Group, chairwoman of board of directors of Qingdao Haier Biomedical Co., Ltd. and the chairwoman of board of directors of INKON Life
Tan Lixia
Technology Co., Ltd. She currently holds several social positions including: member of the 12th Standing Committee of the All-China Women’s Federation
(resigned)
and the vice president of the China Women Entrepreneurs Association, president of Shandong Women Entrepreneurs Association and vice chairwoman of
the 13th Standing Committee of Qingdao Women’s Federation. In recent years, she was successively awarded Model Worker of Shandong Province,
Outstanding Entrepreneur of the State, Special Allowance of State Council, ‘March 8’ Red-Banner Holders of the State’, Taishan Industry Leading Talent,
High-end Financial Talent of Shandong Province and Outstanding Communist Party Member of Shandong Province.
Dai Deming Male, born in 1962. He is currently a professor and doctoral supervisor of the department of accounting of the Renmin Business School, concurrently
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(resigned) holding the position of vice president of Accounting Society of China. He once served as an independent director of Beijing Capital Development Co., Ltd.
and an independent director of the 10th Board of Directors of Haier Smart Home.
Male, born in 1980. He holds a Master’s degree in Business Administration from Renmin University of China. He is a senior engineer. From August 2005
to September 2010, he served as a designer of water heater department of Heater Head Office at Haier Group, an assistant R&D engineer, a R&D engineer
and a R&D model manager of the heater R&D center of the Heater Head Office of Haier Group successively. From September 2010 to October 2015, he
was the deputy secretary of the Youth League Committee of Haier Group. From October 2015 to July 2020, he was the deputy secretary of the Disciplinary
Liu Dalin
Committee of Haier Group. From July 2020 to March 2021, he was the executive deputy secretary of the Disciplinary Committee of Haier Group and the
president of the Supervisory Committee of Gooday Supply Chain Technologies Co., Ltd. From March 2021 to date, he has been serving as the president
of the Supervisory Committee, the secretary of Society and Community department and executive deputy secretary of the Disciplinary Committee of Haier
Group. Mr. Liu has been the president of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd. since June 2021.
Female, born in 1969. She once served as the secretary of the Youth League Committee of Haier Smart Home Co., Ltd., the secretary of the labour union
Ma Yingjie of Haier Smart Home Co., Ltd., the contact person of the customer service department of Qingdao Haier Dishwasher Co., Ltd. Currently, she is the head
of Society and Community department and the supervisor of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd.
Male, born in 1982. Mr. Yu holds a master’s degree. He serves as the legal manager and employee supervisor of the 10th session of the Supervisory
Yu Miao
Committee of Haier Smart Home Co., Ltd. since April 2012.
Male, born in 1957, he served as the deputy secretary of Party Committee of Haier Group Air-Conditioner Head Office ( 部本调 空团集尔海 ), Washing
Wang Peihua Machine Head Office ( 部本机 衣洗 ), and Haier Group Freezer & Heater Head Office ( 部本热 电柜冷 团集尔海 ), chairman of the labor union of Haier
(retired) Group Technology and Equipment Head Office, deputy secretary of Discipline Inspection Committee head of the Organizational Department of Haier
Group. He served as the president of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd.
Male, born in 1960, served as deputy secretary of Discipline Inspection Committee of Qingdao Refrigerator General Factory, party branch secretary and
Ming Guoqing
assistant manager of Qingdao Haier Transportation Company ( 司公 输运尔 海岛青 ), head of the administration department of Qingdao Haier Co., Ltd.,
(retired)
deputy secretary of party committee, secretary of discipline inspection committee and chairman of labour union of Haier Refrigerator Products Head Office
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( 部本品 产箱冰尔海 ), chairman of the labor union of Haier Group, and the supervisor of the 10th session of the Supervisory Committee of Haier Smart
Home Co., Ltd.
Male, born in 1976. He graduated from Wuhan University in 1997 and obtained the double degree in economics and international business administration.
He joined Haier Group in 1997 and currently serves as the general manager of the overseas platform of Haier Smart Home. Mr. Li has held various positions
in Haier Group since 2004, including the assistant director of Asia-Pacific Division, the manager of the Haier ASEAN Center, the manager of the Overseas
Li Pan
Brands Marketing Center, the manager of the Overseas Strategic Center and the director on the operation of overseas markets. He has extensive frontline
management experience in product planning, brand marketing, market exploration and corporate operation. He is currently the vice president of Haier
Smart Home Co., Ltd.
Male, born in 1973, graduated from University Of International Business and Economics with an Executive Master degree in Business Administration in
2011. He is a member of the Chartered Institute of Management Accountants (CIMA). Mr. Gong Wei served as the financial manager of Haier Smart Home
Co., Ltd., senior financial manager and senior financial analyst of Haier Group, chief financial officer of Haier Washing Machine Head Office ( 衣洗 尔海
部本 机 ), chief financial officer of Haier Air-Conditioner Head Office 部 本调 空 尔 海 ), chief financial officer of White Goods Group. Mr. Gong has
Gong Wei
extensive financial management experience. Mr. Gong was granted the honorary titles including Outstanding Young Expert of Qingdao, Outstanding
Accounting Workers of Shandong Province, National Outstanding Accounting Workers, and received several awards, including Top Ten CFO in China by
‘New Money’ Magazine ( 》志 杂财理新 《 )in 2011, 2020 International Finance Leaders of the Year in China. He is currently the chief financial officer and
vice president of Haier Smart Home Co., Ltd.
Male, born in 1977. He graduated from the College of Photoelectric Engineering, Chongqing University with a Bachelor’s degree in Engineering in 1998,
and graduated from the Faculty of Business and Economics of The University of Hong Kong with a Master’s degree in Business Administration in 2004.
From 2009 to 2020, Mr. Huang served as the deputy general manager of Haier Electronics Group Co., Ltd., a subsidiary of the Company, to assist the chief
Huang Xiaowu
executive officer in implementing development strategy, and was responsible for investor relations, strategic investment and equity financing. Mr. Huang
Xiaowu has years of extensive experience in commercial banking, investment, industrial capital management and corporate finance. Prior to joining Haier
Group, he worked in Ningbo branch and Shanghai branch of Industrial and Commercial Bank of China, Investment Banking Division of Guosen Securities,
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Anglo Chinese Investment Banking Group ( 团集 行银资 投高英 ). He is currently the vice president of Haier Smart Home Co., Ltd.
Male, born in 1978. He graduated from Tianjin College of Commerce in 2001 and obtained a Bachelor’s degree in Heat Supply, Ventilation and Air-
conditioning Engineering. He obtained the degree of EMBA from School of Economics and Management of Tsinghua University and the INSEAD in 2015.
Mr. Wu joined Haier in 2001 and currently serves as the general manager of the kitchen appliances and household appliances and the internet of food
Wu Yong
platform of Haier Smart Home. Mr. Wu served as the general manager of the PRC Region in manufacturing and production of refrigerators, overseas
marketing and the air-conditioning business has whole-process management experience in high-end manufacturing, marketing and industrial platforms. He
is currently the vice president of Haier Smart Home Co., Ltd.
Male, born in 1976. He graduated from Qingdao University of Science & Technology in 1998 and obtained a Bachelor’s degree in Fine Chemical
Engineering. Mr. Li joined Haier in 1998 and currently serves as the general manager of washing machine and the internet of clothing platform. Mr. Li was
the manufacturing director and he has held important positions of the internet of clothing platform since 2008 with extensive experience in the quality and
Li Yang systemic management of washing machines, production and manufacturing. The ecological platform of the internet of clothing incubated under his
leadership was awarded the first prize for “Innovation Results in Modern Management of National Light Industry Enterprises” ( 现理管业企业工轻国全
果成 新创化代 ) in 2019. He received the “Most Promising Entrepreneur in Qingdao in 2018” and the “Advanced Individual in Management Innovation of
National Light Industry Enterprises”. He is currently the vice president of Haier Smart House Co., Ltd.
Male, born in 1978. He graduated from Northeast Electric Power University in 2001 and obtained a Bachelor’s degree in Management Information System.
Mr. Guan joined Haier in 2001 and currently serves as the general manager of water heater and the internet of water platform. Mr. Guan has been responsible
for product management, production and manufacturing, product marketing and industrial pipeline management and served as a regional general manager,
Guan Jiangyong
the market director of the water heater business and the general manager of the internet of water platform and the water heater business. He has whole-
process management experience in product manufacturing, marketing, corporate planning management and industrial platforms. He is currently the vice
president of Haier Smart Home Co., Ltd.
Female, born in 1965. She graduated from Qingdao University of Science & Technology in 1986 and obtained a Bachelor’s degree in Heat Supply,
Wang Li
Ventilation and Air-conditioning Engineering. She obtained a Master’s degree in Business Administration from Renmin University of China in June 2013.
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Ms. Wang joined Qingdao Air-conditioner Company in 1988. She has held various positions since 1988, including general manager of Haier’s central air-
conditioner business, general manager of Haier’s residential facilities business and general manager of Haier’s air business. Ms. Wang has management
experience in products and marketing. Ms. Wang has served various industrial positions, including a member of China Refrigeration and Air-Conditioning
Industry Association. Ms. Wang receives grants from the State Council and was awarded the Outstanding Entrepreneur in Light Industry in Shandong
Province, the Labor Model of Qingdao City, the Outstanding Talent in Professional Technology in Qingdao .She is currently the vice president of Haier
Smart Home Co., Ltd.
Female, born in 1964, graduated from Southwestern University of Finance and Economics with a Master’s degree in Economics in 1986. She is a senior
economist, and she was the lecturer of investment department of China Institute of Finance, deputy head of the Teaching and Research section of Investment
Economy Department, a member of treasury department of Everbright International Investment Consultancy Company, deputy director and director of
general manager office, general manager of business management department and general manager of personnel department, assistant to the general
manager, executive vice president of Everbright International Investment Consultancy Company; she was the office director of analysts professional
committee of the Securities Association of China, vice director of Qualification Management Department of the Securities Association of China, vice
Ming Guozhen
director of Practice Standards Committee ( 会 员委 准标 业执 ) of the Securities Association of China. She joined Haier in August 2007 and served as the
business director and merger & acquisition director of Haier Asset Operation Division from August 2007 to May 2008. She has been a vice general manager
since May 2008 and the board secretary since April 2009 of Haier Smart Home. She has played a leading role and participated in the introduction of
strategic investors, M&A of GEA/FPA and internal integration, issue of convertible bonds/exchangeable bonds, issue of D-Share/H-Share. She was awarded
as a member of “Board Secretary Hall of Fame ( 堂人名 秘董 牌金 )” at the 12th session of New Finance Election in June 2016.She is currently the secretary
to the Board of Haier Smart Home.
Other information
□ Applicable √Not Applicable
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Haier Smart Home Co., Ltd. 2021 Annual Report
(II) Appointment of current and departing of Directors, Supervisors and
Senior Management during the reporting period
1. Appointment in shareholder units
√ Applicable Not Applicable
Name of
Start date of End date of
Name shareholder Position
appointment appointment
unit
Haier
COSMO Co.,
Liang Haishan Director, General manager
Ltd.
Liang Haishan Haier Group Vice Chairman of the Board,
President of the Supervisory
Committee, the Secretary of
Haier Group Society and Community
Liu Dalin March 2021
Corporation Department, Executive
Deputy Secretary of the
Disciplinary Committee
Haier
September
Tan Lixia COSMO Co., Director
2014
Ltd.
Haier Group Vice chairwoman, Executive February
Tan Lixia
Corporation Vice President of the Board 2016
Explanation of
appointment in
Nil
shareholder
units
2. Appointment in other units
√ Applicable □ Not Applicable
Start date of End date of
Name Name of other unit Position
appointment appointment
Haier Group Finance Co.,
Liang Haishan Director
Ltd.
Qingdao Haier multimedia Chairman of the
Liang Haishan
Co., Ltd. Board
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Wu Changqi Peking University Professor
Wu Changqi China Hua Xia Bank Co., Ltd. Supervisor May 2015 May 2021
Independent
Wu Changqi Yijiahe Technology Co., Ltd. August 2018
director
Dean of School
Wu Changqi Shandong University October 2019
of Management
Tianneng Battery Group Co., Independent 19 February
Wu Changqi
Ltd. director 2019
Shenwan Hongyuan Group Independent
Wu Changqi May 2021
Co., Ltd. director
Yue Yuen Industrial Independent
Wong HakKun June 2018
(Holdings) Limited director
Lung Kee (Bermuda) Independent
Wong HakKun June 2018
Holdings Limited director
Hangzhou SF Intra-City Independent November
Wong HakKun
Industrial Co., Ltd. director 2021
Guangzhou Automobile Independent
Wong HakKun May 2020
Group Co., Ltd. director
Zhejiang Cangnan Instrument Independent
Wong HakKun June 2018 July 2021
Group Company Limited director
Keck Seng Investments (Hong Independent Non-
Yu Hon To April 2013
Kong) Limited executive director
Independent Non-
Yu Hon To MS Group Holdings Limited May 2018
executive director
China Resources Gas Group Independent Non- December
Yu Hon To
Limited executive director 2012
Independent Non-
Yu Hon To One Media Group Limited June 2005
executive director
China Renewable Energy Independent Non-
Yu Hon To April 2008 January 2022
Investment Limited executive director
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Haier Smart Home Co., Ltd. 2021 Annual Report
Independent Non-
Yu Hon To Playmates Holdings Limited April 1995 May 2021
executive director
Media Chinese International Independent Non-
Yu Hon To March 1999 July 2021
Limited executive director
New Century Real Estate Independent Non-
Yu Hon To June 2013 September 2021
Investment Trust executive director
Independent Non-
Yu Hon To Playmates Toys Limited May 2021
executive director
Independent
Lin Sui Focus Hotmelt Company Ltd. August 2020 July 2023
director
Applied Artificial Intelligence
Research Center
Li Shipeng Director
Of the Suzhou Industrial
Technology Research Institute
The Chinese University of
Li Shipeng Visiting Professor
Hong Kong (Shenzhen)
Qingdao Huaqiao Industrial
Ming Guozhen Director July 2008
Co., Ltd.
Haier Group Authorized
Tan Lixia (Qingdao) Jinying Holding representative, July 2014
Co.,Ltd. Director
Non-executive
Tan Lixia Bank of Qingdao Co., Ltd. April 2012
Director
Wanlian Holding Co., Ltd. ( 万 Chairwoman,
Tan Lixia
司公限 有股控链 ) Manager
Yingkang Life Technology Co.,
Tan Lixia Chairwoman 16 May 2019
Ltd.
Qingdao Haier Biomedical Co.,
Tan Lixia Chairwoman July 2018
Ltd.
China Zheshang Bank Co., Independent Non-
Dai Deming March 2015 July 2021
Ltd. executive director
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Haier Smart Home Co., Ltd. 2021 Annual Report
Independent Non-
Dai Deming BOC Aviation Limited
executive director May 2016
Independent Non-
Dai Deming CSC Financial Co., Ltd.
executive director August 2016
Power Construction Independent Non-
Dai Deming
Corporation of China, Ltd. executive director March 2018
Poly Developments and Independent Non- September
Dai Deming
Holdings Corporation Limited executive director 2018
Explanation of
appointment in Nil
other units
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Haier Smart Home Co., Ltd. 2021 Annual Report
(III) Compensation of Directors, Supervisors and Senior Management
√ Applicable □ Not Applicable
Decision-making process of The decision-making process of the Company for the
compensation of Directors, remuneration of directors, supervisors and senior management
Supervisors and Senior personnel is to establish a platform, define standards,
Management communicate and negotiate, and make objective decisions. The
Remuneration Committee of the Company shall formulate the
remuneration standards, adjust principles, and assess and
implement the principles and submit to the Board of Directors
for consideration and approval. The actual remuneration for the
year is determined according to the evaluation results such as
the ecosystem micro-community contract, Rendanheyi
scorecard, vertical and horizontal indicators and win-win value
appreciation table.
Determining basis of matrix The 2021 remuneration system of the management of the
compensation of Directors, Company reflects the ecosystem micro-community contract,
Supervisors and Senior high value-adding and high sharing, which is linked with win-
Management win value appraisal and Rendanheyi principle Vertically, the
Rendanheyi scorecard represents strategic undertaking and
ecosystem micro-community upgrade initiation, and
horizontally, it embodies the global leadership and ecosystem
achievements of the market competitiveness, which leads to the
upgrading from “high-end brand” to “scenario brand” and
“ecosystem brand”. The remuneration competitiveness is
determined based on elements of “strategic undertaking”,
“market competitiveness”, “micro-community initiation” and
“ecosystem achievements”. The senior management receives an
annual assessment of performance for the year, which is a key
factor in determining bonuses and On one hand, the overall
Rendanheyi remuneration system forms a diversified
combination of the management’s remuneration incentives,
which is oriented towards creating user value and ecosystem
value. On the other hand, it also makes the remuneration
mechanism of the management more flexible, which encourages
innovation and maximization of individual’s value. At the same
time, the Company has implemented measures such as the core
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Haier Smart Home Co., Ltd. 2021 Annual Report
employee stock ownership scheme, share option incentive to
enhance the incentive and mechanisms and establish a benefits
and risk sharing mechanism between the Company and the
operational and managerial personnel based on the user oriented
value creation principle.
After the approval by the general meeting, the adjusted
maximum allowance for the director of the Tenth Session of the
Board of Directors is RMB260,000/year before tax, of which
fixed allowance is RMB210,000/year, and the maximum
performance allowance is RMB50,000/year. The specific
amount of performance allowance will be determined according
to the comprehensive consideration of directors’ contribution to
the decision-making of the Board, effectiveness of resolutions
and suggestions to the Board, participation of the Board of
Directors, attendance of board meetings. The travelling
expenses of directors attending Board meetings and general
meetings and the expenses required for performing their duties
and according to the Articles of Association of the Company
will be reimbursed.
Actual compensation paid to
Directors, Supervisors and Senior Paid as prescribed.
Management
Total of actual compensation
paid to all Directors, Supervisors
RMB18,088,500
and Senior Management at the
end of the reporting period
(IV) Changes in of Directors, supervisors and senior management of the Company
√Applicable □Not Applicable
Name Position Method of Change Reason for Change
Xie Juzhi Vice President Election New Election
Yu Hon To Director Election New Election
Li Kam Fun Director Election New Election
Li Shipeng Independent director Election New Election
Wu Qi Independent director Election New Election
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Haier Smart Home Co., Ltd. 2021 Annual Report
Liu Dalin Chairman of the Board Election New Election
of Supervisors
Ma Yinjie Supervisor Election New Election
Li Pan Vice President Appointment New Appointment
Huang Xiaowu Vice President Appointment New Appointment
Wu Yong Vice President Appointment New Appointment
Li Yang Vice President Appointment New Appointment
Guan Jiangwu Vice President Appointment New Appointment
Wang Li Vice President Appointment New Appointment
Tan Lixia Vice Chairman of the Resignation Resignation
Board
Dai Deming Independent director Resignation Resignation on
expiration
Wang Peihua Chairman of the Board Resignation Resignation
of Supervisor
Ming Guoqing Supervisor Resignation Resignation
(V) Explanation of penalties imposed by securities regulators in the past three years
□Applicable √Not Applicable
(VI) Others
□Applicable √Not Applicable
V. RELEVANT INFORMATION ON THE BOARD MEETINGS HELD DURING THE
REPORTING PERIOD
VI. Meeting Date Resolutions approved
Considered and approved the Proposal on Amending the
Articles of Association of Haier Smart Home Co., Ltd., the
Proposal on the Election of Directors of Haier Smart Home
Co., Ltd., the Proposal on the Election of Independent Non-
The 15th meeting of executive Directors of Haier Smart Home Co., Ltd., the
the Tenth session of 7 February Proposal on Reorganizing the Senior Management Team of
the Board of 2021 Haier Smart Home Co., Ltd., the Proposal on Replacing H-
Directors share Company Secretary of Haier Smart Home Co., Ltd.,
the Proposal on the Appointment of an Audit Firm for
International Accounting Standards in 2020 of Haier Smart
Home Co., Ltd., the Proposal on Convening the First
Extraordinary General Meeting of 2021 and the First Class
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Haier Smart Home Co., Ltd. 2021 Annual Report
Meeting of A-Shares / D-Shares / H-Shares of 2021 of
Haier Smart Home Co., Ltd.
Considered and approved the Proposal on Establishment of
Environmental, Social and Governance Committee and
Appointment of Members of Haier Smart Home Co., Ltd.,
the Proposal on Formulation of the Implementing Rules of
The 16th meeting of the Environmental, Social and Governance Committee of
the Tenth session of the Board of Directors of Haier Smart Home Co., Ltd., the
5 March 2021
the Board of Proposal on Adjusting the Composition of Special
Directors Committees of the Board of Directors of Haier Smart Home
Co., Ltd., the Proposal on Election of Vice Chairman of the
Company of Haier Smart Home Co., Ltd., and the Proposal
on the Scheme of Repurchase of a Portion of A-share Public
Shares of Haier Smart Home Co., Ltd.
Considered and approved Report on the 2020 Annual
Financial Statements of Haier Smart Home Co., Ltd., 2020
Annual Report and Annual Report Summary of Haier Smart
Home Co., Ltd., 2020 Annual Work Report of the Board of
Directors of Haier Smart Home Co., Ltd., 2020 Annual
Corporate Social Responsibility Report of Haier Smart
Home Co., Ltd., 2020 Annual Internal Control Evaluation
Report of Haier Smart Home Co., Ltd., Internal Control
Audit Report of Haier Smart Home Co., Ltd., 2020 Annual
Profit Distribution Plan of Haier Smart Home Co., Ltd., the
The 17th meeting of
Resolution on the Anticipated Provision of Guarantees for
the Tenth session of 30 March
its Subsidiaries in 2021, the Resolution on the Conduct of
the Board of 2021
Foreign Exchange Fund Derivatives Business of Haier
Directors
Smart Home Co., Ltd., the Resolution on the Election of
Independent Director of Haier Smart Home Co., Ltd., the
Resolution on Adjusting the Allowance of Directors of
Haier Smart Home Co., Ltd., the Resolution on Closing
Certain Fund-raising Projects through Convertible
Corporate Bonds and Permanently Supplementing the
Working Capital with the Surplus Funds of Haier Smart
Home Co., Ltd. , the Resolution on the Postponement of
Certain Investment Projects with the Funds Raised from
Convertible Corporate Bonds of Haier Smart Home Co.,
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Haier Smart Home Co., Ltd. 2021 Annual Report
Ltd., the Resolution on the Special Report on the Deposit
and Actual Use of the Funds Raised in 2020 of Haier Smart
Home Co., Ltd., the Resolution on Proposing the General
Meeting to Grant General Mandate to the Board of
Directors on Additional Issuance of H-shares of Haier
Smart Home Co., Ltd., the Resolution on Proposing the
General Meeting to Grant General Mandate to the Board of
Directors on Additional Issuance of D-shares of Haier
Smart Home Co., Ltd., the Resolution on Proposing the
General Meeting to Grant the General Mandate to the Board
of Directors to Repurchase not more than 10% of the Total
Number of H-shares of the Company in Issue of Haier
Smart Home Co., Ltd., the Resolution on Proposing the
General Meeting to Grant the General Mandate to the Board
of Directors to Repurchase not more than 10% of the Total
Number of D-shares of the Company in Issue of Haier
Smart Home Co., Ltd., the Resolution on Amending the
Articles of Association of Haier Smart Home Co., Ltd., the
Resolution on Amending the Rules of Procedure for the
Board of Directors of Haier Smart Home Co., Ltd., the
Resolution on Amending the Management System of
External Guarantees of Haier Smart Home Co., Ltd., the
Resolution on Amending the Management System of
Information Disclosure of Haier Smart Home Co., Ltd., the
Resolution on Unified Expression of Amended Parts of
Corporate Systems of Haier Smart Home Co., Ltd., and the
Resolution on Convening the 2020 Annual General
Meeting and the Second A-shares / D-shares / H-shares
Class Meetings of 2021 of Haier Smart Home Co., Ltd.
Considered and approved the 2021 First Quarterly Report
of Haier Smart Home Co., Ltd., the Proposal on Re-
The 18th meeting of appointment of PRC GAAP Auditor of Haier Smart Home
the Tenth session of Co., Ltd., the Proposal on Re-appointment of IFRS Auditor
29 April 2021
the Board of of Haier Smart Home Co., Ltd., Proposal of Haier Smart
Directors Home Co., Ltd. on Renewal of the Financial Services
Framework Agreement and its Expected Related Party
Transaction Limit with Haier Group and Haier Finance
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Haier Smart Home Co., Ltd. 2021 Annual Report
Considered and approved the A Share Core Employee
Stock Ownership Plan of Haier Smart Home Co.,
Ltd.(2021-2025) (draft) and its Abstract, the H Share Core
Employee Stock Ownership Plan of Haier Smart Home Co.,
Ltd.(2021-2025) (draft) and its Abstract, Resolution on
Proposal to the General Meeting for Authorizing the Board
The 19th meeting of
of Directors to Handle Matters Relevant to the Company's
the Tenth session of
25 May 2021 Core Employee Stock Ownership Plan of Haier Smart
the Board of
Home Co., Ltd., H Share Restricted Share Unit Scheme of
Directors
Haier Smart Home Co., Ltd. (2021-2025) (draft), the
Resolution on Proposal to the General Meeting to Authorize
the Board of Directors or its Authorized Persons to Handle
Matters Related to Restricted Share Unit Plans of Haier
Smart Home Co., Ltd.
The 20th meeting of Considered and approved the Resolution of Haier Smart
the Tenth session of Home Co., Ltd. on Adjustments of the Composition of the
25 June 2021
the Board of Special Committees of the Board
Directors
Considered and approved the 2021 A Share Option
Incentive Scheme of Haier Smart Home Co., Ltd. (draft)
and Summary, the 2021 Management Practices for the
Assessment of A Share Option Incentive Scheme of Haier
The 21th meeting of Smart Home Co., Ltd., the Resolution of Haier Smart Home
the Tenth session of Co., Ltd. on Proposal to the General Meeting to Authorize
29 July 2021
the Board of the Board of Directors and its Authorized Persons to Take
Directors Full Control of the Matters Relating to the Company's 2021
A Share Option Incentive Scheme, the Proposal on
Convening the Second Extraordinary General Meeting of
2021 and the Third Class Meeting of A-Shares / D-Shares /
H-Shares of 2021 of Haier Smart Home Co., Ltd.
Considered and approved 2021 Interim Report of Haier
22nd meeting of the
Smart Home Co., Ltd. and its Summary, the Special Report
Tenth session of the
30 August on the Deposit and Actual Use of Raised Funds in the First
Board of Directors
2021 Half of 2021 of Haier Smart Home Co., Ltd., the Proposal
of Haier Smart
on the Use of Idle Raised Funds for Cash Management of
Home Co., Ltd.
Haier Smart Home Co., Ltd.
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Haier Smart Home Co., Ltd. 2021 Annual Report
Considered and approved the Resolution of Haier Smart
Home Co., Ltd. on Adjusting the Exercise Price of 2021 A
Share Stock Option Incentive Plan, the Resolution of Haier
23rd meeting of the Smart Home Co., Ltd. on First Grant of Stock Options to
Tenth session of the the Participants, the Resolution of Haier Smart Home Co.,
15 September
Board of Directors Ltd. on the Issue and Listing of New H Shares on the Main
2021
of Haier Smart Board of the Stock Exchange of Hong Kong Limited, the
Home Co., Ltd. Resolution of Haier Smart Home Co., Ltd. on
Determination of Authorized Person with Full Authority to
Handle Matters Relating to the Company's Overseas
Issuance of H Shares and Listing
24th meeting of the Considered and approved the 2021 Third Quarterly Report
Tenth session of the of Haier Smart Home Co., Ltd., the Resolution of Haier
29 October
Board of Directors Smart Home Co., Ltd. on Acquisition of Equity Interests in
2021
of Haier Smart Subsidiaries Held by Haier Group Corporation and
Home Co., Ltd. Connected Transactions
Considered and approved the Resolution of Haier Smart
25th meeting of the
Home Co., Ltd. on the Grant of the Reserved Share Options
Tenth session of the
15 December under the 2021 A Share Option Incentive Scheme to the
Board of Directors
2021 Participants, the Resolution of Haier Smart Home Co., Ltd.
of Haier Smart
on Additional Capital Injection into a Subsidiary and
Home Co., Ltd.
Establishment of Smart Lifestyle Appliances Division
VI. PERFORMANCE OF DUTIES BY DIRECTORS
(I) Attendance of board meetings and general meetings by directors
Attendances
Attendance of Board meetings at general
Whether an meetings
Name of Independent Absence from
Required Number of
director director or Attendan two
attendances of Attendance by Attendance attendance
not ce in Absence consecutive
Board telecommunication by proxy of general
person meetings in
meetings meetings
person or not
Liang
NO 11 11 0 0 0 NO 8
Haishan
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Haier Smart Home Co., Ltd. 2021 Annual Report
Li
NO 11 11 2 0 0 NO 8
Huagang
XieJuzhi NO 10 10 0 0 0 NO 8
Wu
NO 11 11 11 0 0 NO 4
Changqi
Lin Sui NO 11 11 11 0 0 NO 0
Yu Hon To NO 10 10 10 0 0 NO 8
Li Kam
NO 10 10 10 0 0 NO 8
Fun
Chien Da-
YES 11 11 11 0 0 NO 4
chun
Wong
YES 11 11 11 0 0 NO 4
HakKun
Li Shipeng YES 10 10 9 0 0 NO 4
Wu Qi YES 6 6 6 0 0 NO 0
Tan Lixia
NO 3 3 2 0 0 NO 4
(Resigned)
Dai
Deming YES 5 5 5 0 0 NO 0
(Resigned)
Explanation for absence from two consecutive Board meetings in person
□ Applicable √ Not Applicable
Number of Board meetings held in the year 11
Of which: Number of on-site meetings 0
Number of meetings held by telecommunication 0
Number of meetings held both on site and by
11
telecommunication
(II) Directors’ objection to the relevant matters of the Company
□ Applicable √ Not Applicable
(III) Others
□ Applicable √ Not Applicable
VII. THE SPECIAL COMMITTEES OF THE BOARD
√ Applicable □ Not Applicable
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Haier Smart Home Co., Ltd. 2021 Annual Report
(1). Personnel of The Special Committees of the Board
Categories of The Special
Name of Personnel
Committees
Wong HakKun, Chien Da-chun, Wu Qi, Yu Hon To, Wu
Audit Committee
Changqi
Wu Qi, Chien Da-chun, Wong HakKun, Li Shipeng, Liang
Nomination Committee
Haishan, Yu Hon To
Remuneration and Appraisal Chien Da-chun, Li Shipeng, Wu Qi, Liang Haishan, Wu
Committee Changqi
Liang Haishan, XieJuzhi, Li Huagang, Lin Sui, Wu Qi, Li
Strategy Committee
Shipeng
ESG Committee (Environment,
Society and Governance Li Kam Fun, Li Huagang, Lin Sui, Chien Da-chun
Committee)
(2). The Company convened 7 Audit Committee meetings during the reporting period
Other Notes
Major
Date of on
Contents of Meeting Opinions and
Meeting Performance
Suggestions
of Duty
Considered and approved 2020 Annual Report on
audit work plan of Haier Smart Home Co., Ltd., the
25 January No
Resolution of Haier Smart Home Co., Ltd. on Nil
2021 Objections
Appointments of International Accounting Standard
Auditor in 2020
Considered and Approved the Preliminary
Considerations on the 2020 Annual Financial
26 March Report of Haier Smart Home Co., Ltd., the No
Nil
2021 Preliminary Considerations on the 2020 Annual Objections
Audit Report of Internal Control of Haier Smart
Home Co., Ltd.
Considered and approved the 2020 Annual
Financial Accounts Report of Haier Smart Home
Co., Ltd., the 2020 Annual Report on the Self-
30 March
Assessment Report on Internal Control of Haier No objections Nil
2021
Smart Home Co., Ltd., the 2020 Annual Audit
Report of Internal Control of Haier Smart Home
Co., Ltd., the resolution of Haier Smart Home Co.,
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Haier Smart Home Co., Ltd. 2021 Annual Report
Ltd. on the Expected Provision of Guarantee for
subsidiaries in 2021, the Resolution of Haier Smart
Home Co., Ltd. on Conducting foreign exchange
funds derivatives business, 2020 Annual Profit
Distribution Plan of Haier Smart Home Co., Ltd.,
2020 Annual Report on Performance of Duties of
the Audit Committee of the Board of Haier Smart
Home Co., Ltd.
Considered and approved the 2021 First Quarterly
Financial Report of Haier Smart Home Co., Ltd.,
the Resolution of Haier Smart Home Co., Ltd. on
Re-assignment of International Accounting
28 April No
Standard Auditor, the Resolution of Haier Smart Nil
2021 Objections
Home Co., Ltd. on Renewing the Financial Service
Framework Agreements with Haier Group
Corporation and Estimated Amount of Connected
Transactions
26 August Considered and approved the 2021 Interim No
Nil
2021 Financial Report of Haier Smart Home Co., Ltd. Objections
Considered and approved the 2021 third quarterly
Financial Report of Haier Smart Home Co., Ltd.,
27
the Resolution of Haier Smart Home Co., Ltd. on No
October Nil
Acquisition of Equity Interests in Subsidiaries held Objections
2021
by Haier Group Corporation and Connected
Transactions.
20
Considered and approved the 2021 Annual Report No
December Nil
on Audit work Plan of Haier Smart Home Co., Ltd. Objections
2021
(3). The Company convened 2 Nomination Committee meetings during the reporting period
Major Other Notes on
Date of
Contents of Meeting Opinions and Performance of
Meeting
Suggestions Duty
Considered and approved the resolution of Haier Smart Home
7
Co., Ltd. on Election of Additional Directors of the Company, No
February Nil
the resolution of Haier Smart Home Co., Ltd. on Election of Objections
2021
Additional Independent Non-executive directors of the
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Haier Smart Home Co., Ltd. 2021 Annual Report
Company, the Resolution of Haier Smart Home Co., Ltd. on
Restructuring of the Company's Senior Management Team
Considered and approved the Report of Nomination
Committee of the Board of Haier Smart Home Co., Ltd. on the
Performance of Duty of Current Directors, Supervisors and
30 March No
Senior Management, the Resolution of Haier Smart Home Co., Nil
2021 Objections
Ltd. on the Election of Independent directors, the 2020 Annual
Report on the Performance of Duty of the Nomination
Committee of the Board of Haier Smart Home Co., Ltd.
(4). The Company convened 4 Remuneration and Appraisal Committee meetings during the reporting
period
Major Other Notes on
Date of
Contents of Meeting Opinions and Performance
Meeting
Suggestions of Duty
Considered and approved the 2020 Annual Report of Haier
Smart Home Co., Ltd. on Incentives for Senior Management
of the Company and Implementation of Remuneration
Assessment for Directors and Senior Management, the 2021
30 March No
Annual Report of Haier Smart Home Co., Ltd. on Nil
2021 Objections
Remuneration and Assessment Scheme of Directors and
Senior Management, the 2020 Annual Report of Haier Smart
Home Co., Ltd. on Performance of Duties of the
Remuneration and Appraisal Committee of the Board
Considered and approved Stock Ownership Plan of A Share
Core Employee of Haier Smart Home Co., Ltd.(2021-
25 May 2025)(Draft) and Summary, Stock Ownership Plan of H Share No
Nil
2021 Core Employee of Haier Smart Home Co., Ltd.(2021- Objections
2025)(Draft) and Summary, the H Share Restricted Share Unit
Scheme of Haier Smart Home Co., Ltd. (2021-2025) (Draft)
Considered and approved the 2021 A Share Option Incentive
29 July Scheme of Haier Smart Home Co., Ltd. (draft) and Summary, No
Nil
2021 the 2021 Management Practices for the assessment of A Share Objections
Option Incentive Scheme of Haier Smart Home Co., Ltd..
15 The Resolution of Haier Smart Home Co., Ltd. on Grant of
No
December Reserved Stock Options under the 2021 A Share Stock Option Nil
Objections
2021 Incentive Plan to Incentive Recipients
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Haier Smart Home Co., Ltd. 2021 Annual Report
(5). The Company convened 3 Strategy Committee meetings during the reporting period
Major Other Notes on
Date of
Contents of Meeting Opinions and Performance
Meeting
Suggestions of Duty
Considered and approved the Resolution of Haier Smart
Home Co., Ltd. on the Closing of Some the Convertible
Corporate Bonds Raised Funds Investment Projects and
Allocation of the Surplus Proceeds as Supplementary
30 March Working Capital on a Permanent Basis, the Resolution of No
Nil
2021 Haier Smart Home Co., Ltd. on the Postponement of Objections
Some Convertible Corporate Bond Raised Funds
Investment Projects, the 2020 Annual Report on the
Performance of Duties of the Strategy Committee of the
Board of Haier Smart Home Co., Ltd.
Considered and approved the Resolution of Haier Smart
29 October Home Co., Ltd. on Acquisition of Equity Interests in No
Nil
2021 Subsidiaries held by Haier Group Corporation and Objections
Connected Transactions
Considered and approved the Resolution of Haier Smart
15
Home Co., Ltd. on Capital Increase to subsidiaries and No
December Nil
establishing the Business Division of Smart Living Objections
2021
Appliances.
(6). The Company convened 1 meeting of the ESG Committee during the reporting period
Other Notes on
Date of Major Opinions
Contents of Meeting Performance of
Meeting and Suggestions
Duty
Considered and approved the 2020 Social
29 March
Responsibility Report of Haier Smart No Objections Nil
2021
Home Co., Ltd.
(7). Details of Disagreements
□ Applicable √ Not Applicable
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Haier Smart Home Co., Ltd. 2021 Annual Report
VIII. SUPERVISORY COMMITTEE’ EXPLANATION ON RISKS ABOUT THE
COMPANY
□ Applicable √ Not Applicable
Supervisory Committee had no objections to the supervising items during the reporting period.
IX. INFORMATION ON STAFF OF THE PARENT COMPANY AND PRINCIPAL
SUBSIDIARIES AT THE END OF THE REPORTING PERIOD
(I) Staff Information
Number of staff of the parent company 68
Number of staff of Principal subsidiaries 104,806
Total number of staff 104,874
Number of employees whose retirement expenses are borne by the parent
0
company and the principal subsidiaries
Breakdown by Function
Function Number
Production 60,286
Sales 18,283
Technical 22,161
Financial 1,729
Administrative 2,415
Total 104,874
Breakdown by Education Background
Education Number(person)
Bachelor and above 30,898
College Diploma 26,466
Secondary vocational training diploma and below 47,510
Total 104,874
(II) Remuneration policies
√ Applicable □ Not Applicable
The Company implements a value-creation-centric, user-paid, and Rendanheyi remuneration
system, which takes user value-added experience as a test and originates from the Haier strategic profit
and loss statement. It assesses the creation of user value, ecosystem micro-community initiation upgrade,
target-oriented budget implementation, ecosystem results and continuous optimization based on
ecosystem micro-community contracts, Rendanheyi scorecard and win-win value appreciation table.
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Haier Smart Home Co., Ltd. 2021 Annual Report
This incentive mechanism guides the user-paid salary, makers for everyone, and sharing and win-win
oriented, creates ecosystem value and builds the ecosystem brand of the Internet of Things.
(III) Personnel Training
√ Applicable □ Not Applicable
The Company adheres to the concept of “Everyone can develop, everyone should be heard” and
builds an ecological platform in the era of Internet of Things, thus realizing the best experience and
accelerated development of creators through building a system of non-linear development and diversified
cultivation.
The Company puts high priority on talent cultivation, abundant study resources and diversified
study forms, in order to facilitate makers to improve their professionalism, expertise and leadership skills.
The training courses include corporate culture, project management, English open classes, office skills,
series of professional classes, etc., simultaneously adopting live streaming, offline customization, online
studying, community forums and other forms of studying, building an open, sharing, efficient and
diversified studying ecosystem of Smart Living.
For details please refer to 2021 Environment, Social and Governance Report of Haier Smart Home
Co., Ltd. published on the same date as this report.
(IV) Labor Outsourcing
□ Applicable √ Not Applicable
X. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF CAPITAL
RESERVE
(I) Formulation, implementation or adjustment of the cash dividend policies
√ Applicable □ Not Applicable
The Company’s 2020 profit distribution plan was passed on its 2020 Annual General Meeting held
on 25 June 2021: based on the Company’s total existing shares (deducting the repurchased shares) of
9,346,772,322 (including 6,262,154,495 A shares , 271,013,973 D shares and 2,813,603,854 H shares),
it was proposed that the Company would distribute cash dividends of RMB3.66 (tax inclusive) per 10
shares to all shareholders, with a total amount before tax of RMB3,420,918,669.85(tax inclusive). The
plan was implemented and completed in August 2021. Details were set out in the Announcement on
Implementation of Rights and Interests Distribution of A-shares for 2020 of Haier Smart Home Co., Ltd.
(No: L2021-066) published by the Company on the four major securities newspapers and the website of
Shanghai Stock Exchange on 17 August 2021 and relevant announcements in respect of dividend
distribution of D shares and H shares published on the Company’s website, Hong Kong Stock Exchange
and other publication platforms.
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Haier Smart Home Co., Ltd. 2021 Annual Report
The Company has always applied a stable and sustainable profit distribution policy. During the
reporting period, the Company strictly followed the requirements set out in the Articles of Association
and in the Shareholder Return Plan for the Next Three Years of the Company. During the formulation of
the profit distribution plan, the Company took full account of return for investors, the long-term interests
of the Company, overall interests of all shareholders and sustainable development of the Company, and
continued to implement the stable dividend distribution policy to provide investors an opportunity to
share the growth of value, so that investors could form the expectation of a stable return. The procedures
and mechanisms for decision-making such as Articles of Association and planning of return of
shareholders implemented by the Company were complete in compliance with laws and regulations. The
process was open and transparent while the standard and ratio of dividends was clear. Responsibilities
of independent directors were clear during the policy-making process, and independent directors were
given the opportunities to play their roles. Minority shareholders were also given the opportunity to fully
express their views and demands, and the legitimate interests of minority shareholders were adequately
protected.
The dividend distribution plan of 2021 of the Company: based on the total number of shares after
deducting the repurchased shares on equity interest record date for future profit distribution, it is proposed
that the Company will distribute cash dividend of RMB4.60 per 10 shares (tax inclusive) with cash
dividend of RMB 4,320,413,011.54. related to the Company’s principal business in order to maintain
sustainable and stable development and to create value for investors. The proportion of this distribution
is 33.1% of the net profit attributable to owners’ parent company in 2021 (In 2021, the Company spent
RMB2.202 billion and HK$1 billion on the purchase of A shares and H shares; if this is included in cash
dividends, the ratio of cash dividends to net profit attributable to owners’ parent company for the year
would be 56.3%).100% dividend is paid in cash.
(II) Notes to the cash dividend policies
√ Applicable□ Not Applicable
Whether in compliance with regulations of the Articles of Association and
Requirements of the resolutions of the general meeting √Yes □No
Whether the standard and ratio of dividends were clear √Yes □No
Whether relevant procedures and mechanisms for decision-making were complete √Yes □No
Whether independent directors performed their duties and responsibilities √Yes □No
Whether minority shareholders were given the opportunity to fully express their √Yes □No
views and demands, and whether their legitimate interests were adequately
protected
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Haier Smart Home Co., Ltd. 2021 Annual Report
(III) The Company made profits and the profits for distribution to the owners’ Parent
Company was positive during the reporting period, but no cash profit distribution plan
was proposed; the Company should disclose the reasons in detail and the purpose of
undistributed profits
□Applicable √Not Applicable
XI. THE COMPANY’S SHARE OPTION INCENTIVE SCHEME, EMPLOYEE
SHAREHOLDING PLAN OR OTHER EMPLOYEE INCENTIVE MEASURES AND ITS
INFLUENCE
(I) Matters disclosed in temporary announcements and without any subsequent progress or
change
√Applicable □Not Applicable
Summary of matters Query index
Partial Vesting of Employee Stock Ownership Plan For details, please refer to the Announcement of
and Termination of the First Phase of Employee Stock Haier Smart Home Co., Ltd. on Vesting of Interests
Ownership Plan During the Reporting period, pursuant
： under the Core Employee Stock Ownership Plan
to the "Core Employee Stock Ownership Plan of Qingdao and the Termination of the First Core Employee
Haier Co., Ltd (Draft)" (the "First phase ESOP"), the Stock Ownership Plan (L2021-001) disclosed by
"Second Phase Stock Ownership Plan of Core Employee the Company on 29 January 2021.
Stock Ownership Plan of Qingdao Haier Co., Ltd (Draft)"
(the "Second Phase ESOP"), the "Third Phase Stock
Ownership Plan of Core Employee Stock Ownership Plan
of Qingdao Haier Co., Ltd (Draft)" (the "Third Phase of
ESOP"), on 15 January 2021, the Management
Committee resolved that: (1) the First phase ESOP to be
vested, 33 persons who pass the appraisal vest 1,783,038
shares; (2) Second Phase ESOP to be vested, 116 persons
who pass the appraisal vest 1,132,832 shares; (3) Third
Phase ESOP to be vested, 32 persons who pass the
appraisal vest 179,351 shares. Directors, supervisors and
senior management of the Company are entitled to vest a
total of 1,339,483 shares. Any change in their stock
ownership is subject to the relevant provisions of the
Rules Governing the Shares of the Company Held by
Directors, Supervisors and Senior Management of Listed
Companies and Changes Thereof. The Company has, in
accordance with the aforesaid resolutions, completed the
transfer of the relevant shares on 27 January 2021 at the
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Shanghai Branch of the China Securities Depository and
Clearing Corporation, with an aggregate number of
3,095,221 shares. During the reporting period, vesting of
shares of the First Phase ESOP were completed and all
assets of the stock ownership plan are in the form of
monetary funds. In accordance with the relevant
provisions of the First Phase ESOP, the First Phase ESOP
has been implemented and terminated. Upon completion
of the liquidation and allocation of assets, the remaining
capital was remitted to the Company.
Introduction of First Phase A Share Employee Stock For details, please refer to the Core Employee A
Ownership Plan and H Share Restricted Share Unit Share Ownership Plan of Haier Smart Home Co.,
Scheme ： In order to improve the corporate governance Ltd (for Years 2021–2025) (Draft), the Core
mechanism, create value for shareholders and promote the Employees H Share Ownership Plan of Haier Smart
full implementation of the Company's IoT smart home Home Co., Ltd (for Years 2021– 2025) (Draft), H
brand strategy, the Company introduced the Core Share Restricted Share Unit Scheme of Haier Smart
Employees A Share Ownership Plan of Haier Smart Home Co., Ltd and relevant contents disclosed by
Home Co., Ltd (for Years 2021–2025) (Draft) and its the Company on 26 May 2021.
Summary , the Core Employees H Share Ownership Plan
of Haier Smart Home Co., Ltd (for Years 2021– 2025)
(Draft) and its Summary and H Share Restricted Share
Unit Scheme of Haier Smart Home Co., Ltd upon the
approval at the 2020 Annual General Meeting convened
on 25 June 2021. During the reporting period, the shares
for the A-share and H-share ESOPs and the H Share
Restricted Share Unit Scheme for 2021 were purchased.
Termination of the Second Phase and Third Phase For details, please refer to the Announcement of
Employee Stock Ownership Plan During the Reporting
： Haier Smart Home Co., Ltd on the Termination of
period, all 721,736 and 5,374,465 shares held under the the Second Phase and Third Phase Employee Stock
Second Phase ESOP and the Third Phase ESOP, Ownership Plan under the Core Employee Stock
respectively, have been sold, and all assets of the stock Ownership Plan (L2021-037) disclosed by the
ownership plan are monetary funds. In accordance with Company on 15 May 2021
the relevant provisions of the Second Phase ESOP and the
Third Phase ESOP, the aforementioned plans have been
implemented and terminated. Upon completion of the
liquidation and allocation of assets, the remaining capital
was remitted to the Company.
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Vesting of the fourth Phase Employee Stock For details, please refer to the Announcement of
Ownership Plan ： During the reporting period, Haier Smart Home Co., Ltd on Vesting of the fourth
according to the Phase IV ESOPs under Core Employee Phase Employee Stock Ownership Plan (L 2021-
Stock Ownership Plan of Qingdao Haier Co., Ltd. (Draft) 059) disclosed by the Company on 30 July 2021.
and Summary (hereinafter referred to as “Phase IV
ESOPs”), after being resolved by the management
committee, a total of 575 employees were entitled to
receive 8,719,368 shares in July 2021, The directors,
supervisors and senior management of the Company were
entitled to receive 1,401,617 shares, any change in the
shares must comply with the relevant provisions of the
Rules on the Management of Shares Held by the
Directors, Supervisors and Senior Management of Listed
Companies and the Changes Thereof (
、事董司公市上《
理管動變其及份股司公本持所員人理管級高和事監
). According to the aforesaid resolution, the
》則規
Company completed the transfer of relevant shares at the
Shanghai branch of the China Securities Depository and
Clearing Corporation Limited on 28 July 2021 with the
aggregated amount of 8,719,368 shares. The directors,
supervisors and senior management of the Company were
entitled to receive 1,401,617 shares.
Introduction of A Share Stock Option Incentive Plan ： For details, please refer to the A Share Stock Option
As the Company's high-end brands continue to expand Incentive Plan of Haier Smart Home Co., Ltd (draft)
and its IoT scenario strategy continues to evolve, the and relevant contents disclosed by the Company on
Company needs more focused strategic more committed 30 July 2021.
management, as well as a matching long-term incentive
plan to supplement. Therefore, approved at the
Extraordinary General Meeting and Class Meeting
convened on 15 September 2021, the Company
introduced the 2021 A share Stock Option Incentive Plan.
The proposed stock options granted to the incentive
recipients were 51 million shares, among which were 46
million granted and 5 million.
(II) Incentive events not disclosed in provisional announcements or with subsequent
development
Equity incentive
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□Applicable √Not Applicable
Other explanations
□Applicable √Not Applicable
Employee stock ownership plan
□Applicable √Not Applicable
Other Incentives
□Applicable √Not Applicable
(III) Share option granted to directors and senior management during the reporting period
√Applicable □Not Applicable
Unit: 10,000 shares
Shares Number of
Number of Market
Number of subject to stock
new stock Exercisable Stock value at
stock stock options
options shares options the end of
options option held at the
Name Position granted during the exercise the
held at the exercised ending of
during the reporting price reporting
beginning during the the
reporting period (RMB) period
of the year reporting reporting
period (RMB)
period period
Chairman
Liang
of the 0 91.39 0 0 25.63 91.39 29.89
Haishan
Board
Director,
Li
0 91.39 0 0 25.63 91.39 29.89
Huagang
President
Vice
Chairman
XieJuzhi 0 91.39 0 0 25.63 91.39 29.89
of the
Board
Vice
Li Pan 0 45.70 0 0 25.63 45.70 29.89
President
Chief
financial
Gong Wei officer, 0 45.70 0 0 25.63 45.70 29.89
Vice
President
Vice
Huang
0 45.70 0 0 25.63 45.70 29.89
Xiaowu
President
Vice
Wu Yong 0 22.85 0 0 25.63 22.85 29.89
President
Vice
Li Yang 0 45.70 0 0 25.63 45.70 29.89
President
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Vice
Guan
0 22.85 0 0 25.63 22.85 29.89
Jiangyong
President
Vice
Wang Li 0 45.70 0 0 25.63 45.70 29.89
President
Total / 0 548.37 0 0 / 548.37 /
(IV) Establishment and implementation of appraisal and incentive mechanism for senior
management during the reporting period
√ Applicable □ Not Applicable
The 2021 remuneration system of the management personnel of the Company reflects the ecosystem
micro-community contract, high value-adding and high sharing, which is linked with win-win value adding
table and Rendanheyi scorecard, etc.. Vertically, the Rendanheyi scorecard represents strategic undertaking
and ecosystem micro-community contract, which is linked with the ecosystem micro-community upgrade
initiation and platform leading, and horizontally, it embodies the global leadership and ecosystem
achievements of the market competitiveness, which leads to the upgrading from “high-end brand” to “scenario
brand” and “ecosystem brand”. The remuneration competitiveness is determined based on such elements as
“strategic undertaking”, “market-leading target competitiveness”, “micro-community initiation, platform
leading” and “ecosystem achievements”. The senior management personnel receive an annual assessment of
performance for the year, which is a key factor in determining performance bonuses and development. On one
hand, the overall customer- paid, and Rendanheyi remuneration system forms a diversified combination of the
management’s remuneration incentives, which is oriented towards creating customer value and ecosystem
value. On the other hand, it also makes the remuneration mechanism of the management more flexible, which
provides impetus for the innovation of the management and embodies the maximization of people value.
At the same time, the Company implements measures such as the core employee stock-holding plan and share
option incentive plan to further improve the remuneration incentive system, enhances the incentive and
restraint mechanisms, and establishes a benefits and risk sharing mechanism between the Company and the
operational and managerial personnel based on the principle of the customer-paid compensation.
XII. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROL SYSTEM
DURING THE REPORTING PERIOD
√ Applicable □ Not Applicable
For details, please refer to the 2021 Internal Control Assessment Report of Haier Smart Home Co.,
Ltd. disclosed on the same day of this report.
Explanations on material defects found in internal control during the reporting period
□ Applicable √ Not Applicable
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XIII. CONTROL OVER MANAGEMENT OF SUBSIDIARIES DURING THE REPORTING
PERIOD
√ Applicable □ Not Applicable
The listed company established an internal control and management system covering all
subsidiaries within the scope of consolidated statement, which included four major areas of strategy,
finance, operation and compliance with a total of 22 primary business processes and control metrics. In
particular,
1.Unified control environment, such as strategy and culture, risk management system, internal
control manual, Rendanheyi remuneration system, unified accounting and information system in the
financial sharing center, etc.
2. The company has clear selection methods and terms of reference in respect of appointment of
directors, supervisors and important senior management to their controlling subsidiaries. Meanwhile,
relevant departments of the parent company stipulate the criteria and scope of authorization for major
decision and important events, formulate the approval procedure for major decision and important events
beyond the scope of authorization. The management of subsidiaries at different levels shall exercise their
authority and take responsibility within the scope of authorization.
Important personnel appointments and removals are generally conducted by selecting candidates
proposed by human resource department while re-designation of directors, supervisors, and senior
management need to be determined by the relevant authority of the parent company. Other important
personnel appointments and removals are conducted through the open competition process on
"Chuangba" system.
At the same time, the appointment of directors, supervisors and senior management is considered
as a change of company information, which is required to be reviewed in the Company’s legal cloud
supermarket system. The reviewer is the legal representative of the Company, and the review is based
on the request report signed by the platform owner or the minutes of the president’s office of Haier Smart
Home.
3. Management of major events of subsidiaries: The relevant authority of the parent company of
the listed company stipulates the criteria and scope of authorization for major decision and important
events, formulate the approval procedure for major decision and important events beyond the scope of
authorization. If the Company and its subsidiaries provide external guarantees, the total amount of which
shall propose for consideration at the general meetings after approval by the Board. Subject to the
authorization by the general meetings, the Board decides the Company’s external investment, acquisition
and disposal of assets, external guarantees, entrusted wealth management, related-party transactions and
other events.
4.Management of budget: The finance and budget center formulates the budget preparation policy
and guidance for the following year at the end of each year, and distributes them to each corporation
together with the budget template, requiring the preparation of a comprehensive budget in accordance
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with the unified budget preparation policy and guidance, which contains details of the preparation
principles, explanation of filling the template, submission process and examination. Each corporation
has prepared a comprehensive budget in accordance with the unified budget preparation policy and
guidance. Annual budgeting for the market of the following year is commenced in the third quarter every
year by making profit and loss budgets for each industry and subsidiaries based on market forecasts to
ensure accurate estimation in advance. The execution and adjustment of budgets are regularly monitored
and evaluated.
For non-fixed assets investment projects, the person in charge of fund of each corporation will
summarize the actual investment situation and report it to the manager of the investment, financing and
fund management department of Haier Smart Home. The manager of the investment, financing and fund
management department will monitor the execution of the budget of investment and financing by
comparing the report with the corresponding budget of the investment plan.
5. Operation analysis and performance evaluation: The Company regularly convenes global and
industry-specific performance and operations meetings to discuss the operations and performance
and carries out performance evaluation based on the principles of the Rendanheyi 2D Dot Matrix .
6. Information transmission: The Company widely collects macroeconomic and industry development
information, market information, regulatory compliance and other external information through various
channels, and analyzes and organizes the collected information into research reports every month, which
are submitted to different levels of management after review. The management of the parent company
holds regular meetings with industries and segments to convey the management requirements of the
parent company and to be aware of the operation status in a timely manner. At the same time, the
Company has formulated the information security and internal report confidentiality system, which
specifies the confidentiality content, confidentiality measures, confidentiality level and transmission
scope to prevent the disclosure of commercial secrets.
7. Test and audit of internal control: The parent company conducts internal test and audit of
subsidiaries, more than 85% of revenue and assets of which belong to the parent Company, every year
to identify problems in a timely manner and facilitate the closed-loop rectification of problems. During
the reporting period, there were no new major subsidiaries.
XIV. RELEVANT EXPLANATIONS ON THE AUDIT REPORT OF INTERNAL CONTROL
√ Applicable □ Not Applicable
The Company’s auditor Hexin Certified Public Accountants LLP has audited the efficiency of
internal control relating to the financial report of the Company, and has issued its standard unqualified
audit report for the Company’s internal control (He Xin Shen Zi (2022) No. 000359).
For the details of Audit Report of Internal Control of Haier Smart Home Co., Ltd., please refer to relevant
announcements published on the website of Shanghai Stock Exchange (www.sse.com.cn) on the same
day of this report.
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Whether to disclose the audit report on internal control: Yes
Type of opinion on the audit report on internal control: Standard unqualified opinion
XV. RECTIFICATION OF THE SELF-ASSESSMENT PROBLEMS UNDER THE
GOVERNANCE SPECIAL ACTION OF THE LISTED COMPANY
Not Applicable
XVI. OTHERS
□ Applicable √Not Applicable
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Section V Environmental and Social Responsibilities
I. ENVIRONMENTAL INFORMATION
(I) Explanation of the environmental protection status of companies and their important
subsidiaries that are key emission units announced by the environmental protection
department
√Applicable □Not Applicable
1. Information on pollutant discharge
√ Applicable □ Not Applicable
The Company’s indirect non-wholly owned subsidiaries Zhengzhou Haier Airconditioning Co., Ltd.
(“Zhengzhou Air-conditioning”), Foshan Haier Freezer Co., Ltd. (“Foshan Freezer”), Hefei Haier
Refrigerator Co., Ltd. (“Hefei Refrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water
Heater”), Wuhan Haier Freezer Co., Ltd. (“Wuhan Freezer”), Dalian Haier Refrigerator Co., Ltd.
(“Dalian Refrigerator”) and Chongqing Haier Airconditioning Co., Ltd., Chongqing Haier Water Heater
Co., Ltd. (the aforementioned 2 companies located in Chongqing are collectively referred to as the
"Chongqing Park Companies") are among the key emission units announced by the local environmental
protection department. The main information on pollutant discharge is as follows:
）（ 1 Zhengzhou Air-conditioning
① Main pollutants ：
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply for
a pollutant discharge permit and detect 17 types of pollutants (including specific pollutants) , namely,
total cadmium, total chromium, total mercury, total lead, total arsenic, hexavalent chromium, COD,
ammonia nitrogen, total phosphorus, total nitrogen, PH, suspended solids, chroma, petroleum, BOD, rate
of flow and temperature.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, north of the wastewater treatment plant,
pipeline discharge
④ Concentration and total amount of discharge and approved total amount of discharge: ：
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount
No. Name of pollutant total amount excessive
of discharge of discharge
of discharge discharge
1 COD 27.02mg/L 1.02 tons 6.25 tons No
2 Ammonia nitrogen 6.9mg/L 0.08 tons 0.63 tons No
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⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)
）（ 2 Foshan Freezer
① Main Pollutants:
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply for
a pollutant discharge permit and detect 6 types of pollutants (including specific pollutants), namely, COD,
ammonia nitrogen, zinc, PH, SS, suspended solids, petroleum
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, south of the wastewater treatment plant to
the southeast of Fushan Sanshui District Haier Park, pipeline discharge; exhaust emission,
one dust emitting processes, four foam generating processes, three welding processes, one
plastic injection and breaking process, two kitchens, for a total of 11
④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:
Total Approved total Whether it is
Concentration
No. Name of pollutant amount of amount of excessive
of discharge
discharge discharge discharge
1 COD 20 mg/L 4.17 tons 25.92 tons No
2 Ammonia nitrogen 1.46mg/L 0.304 tons 2.88 tons No
⑤ Pollutant discharge standards implemented: first standard of the second period set forth in the
“Discharge Limits of Water Pollutants” (DB44/26-2001) of local standard in Guangdong
Province
）（ 3 Hefei Refrigerator
① Main Pollutants ：
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply for
a pollutant discharge permit and detect 8 types of pollutants (including specific pollutants) , namely, total
nitrogen (as N), total phosphorus (as P), rate of flow, suspended solids, value of PH, Chemical oxygen
demand (COD), ammonia nitrogen (NH3-N) and five-day biochemical oxygen demand (BOD5).
Exhaust gas. According to the Volatile Organic Unorganized Emission Control Standard (GB
37822-1-2019), Development Zone Energy should apply for a pollutant discharge permit and detect
pollutants. Main types of atmospheric pollutants: particle matter, non-methane total hydrocarbons
② Way of discharge: continuous discharge
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③ Number and distribution of discharge outlets: 1 sewage, at the north entrance of the refrigerator
Park; 25 exhaust gas, at the refrigerator block A(11), B factories(11) and Phase III Factory(3).
④ Concentration of discharge and discharge standard:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount
No. Name of Pollutant total amount excessive
of discharge of discharge
of discharge discharge
1 COD 104.114 mg/L 56.2 tons 165 tons No
2 ammonia nitrogen 11.432 mg/L 5.373 tons 10 tons No
3 total nitrogen 22.45 mg/L 11.76 tons 25 tons No
4 total phosphorus 2.065 mg/L 1.082 tons 3 tons No
Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)
）（ 4 Wuhan Water Heater
① Main Pollutant ：
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Wuhan water heater should apply for a
pollutant discharge permit and detect 9 types of pollutants (including specific pollutants), namely, COD,
total zinc, suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5),
PH, anionic surface active agent, total phosphorus, and animal and vegetable oils.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, on the southwest of the wastewater treatment
plant, pipeline discharge
④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:
Approved
Concentration Total amount Whether it is
No. Name of Pollutant total amount
of discharge of discharge excessive discharge
of discharge
1 COD 40 mg/L 8.92 tons 9.075 tons No
Ammonia
2 0.336 mg/L 0.0749 tons 0.9075 tons No
nitrogen
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)
）（ 5 Wuhan freezer
① Main pollutants ：
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Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Wuhan freezer should apply for a pollutant
discharge permit and detect 9 types of pollutants (including specific pollutants), namely, COD, total zinc,
suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5), PH,
anionic surface active agent, total phosphorus, and animal and vegetable oils.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, on the south of the wastewater treatment plant,
pipeline discharge
④ Concentration and total amount of discharge and approved total amount of discharge: According
to the discharge permit, the concentration and total amount of pollutant discharge subject to approval for
the total amount are as follows:
Approved Whether it is
Concentration Total amount
No. Name of Pollutant total amount excessive
of Discharge of discharge
of discharge discharge
1 COD 46 mg/L 3.88 tons 4.3628 tons No
2 Ammonia nitrogen 0.497 mg/L 0.042 tons 0.4365 tons No
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)
）（ 6 Dalian Refrigerator
Main Pollutants
① ：
Wastewater. According to Measures for Pollutant Discharge Permitting Administration, 5 types of
pollutants should be tested, namely, COD, total phosphorus, PH, suspended solids, zinc.
②Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, on the wastewater treatment plant, pipeline
discharge
④ Concentration and total amount of discharge and approved total amount of discharge:
the concentration and total amount of pollutant discharge subject to approval for the total amount
are as follows:
Approved total Whether it is
Concentration Total amount
No. Name of Pollutant amount of excessive
of discharge of discharge
discharge discharge
1 COD 244 mg/L 2.66 tons 2.66 tons No
2 Ammonia nitrogen 5.4 mg/L 0.059 tons 0.059 tons No
Pollutant discharge standards implemented: Wastewater Discharge Standard for Liaoning Province (DB
21/ 1627-2008)
）（ 7 Chongqing Park Company
① Main pollutants:
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Wastewater. According to the registration and declaration of Pollutant Permit of the PRC, 7 types
of pollutants (including specific pollutants) should be tested, namely, COD 、 ammonia nitrogen (NH3-
N), five-day biochemical oxygen demand (BOD5), PH, suspended solids, petroleum, animal and
vegetable oil, rate of flow.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: three, first wastewater treatment plant, second
integrated wastewater treatment plant, the apartment wastewater treatment station, pipeline
discharge
④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount
No. Name of Pollutant Total amount excessive
of discharge of discharge
of discharge discharge
1 COD 59 mg/L 33.93tons 228.1tons No
2 Suspended solids 21 mg/L 12.08tons 177.2tons No
Animal and vegetable
3 1.24mg/L 0.71tons 34tons No
oil
4 Petroleum 0.14 mg/L 0.08tons 1.32tons No
Integrated wastewater discharge standard (GB 8978-1996) – grade 3
2. Construction and operation of pollution prevention and treatment facilities:
√Applicable □Not Applicable
Zhengzhou Air-conditioning, Foshan Freezer, Wuhan Freezer, Wuhan Water Heater have one, one,
one and two wastewater treatment plants with a designed treatment capacity of 550 tonnes/day, 1,800
tonnes/day, 550 tonnes/day, 300 tonnes/day and 260 tonnes/day, respectively. There are three wastewater
treatment plants in Chongqing Haier Park responsible for collecting and treating the wastewater produced
by the Chongqing Park Companies with a wastewater treatment capacity of 3,600 tonnes/day, and one
wastewater treatment plant in Dalian Haier Park responsible for collecting and treating the wastewater
produced by the Dalian Park Companies with a wastewater treatment capacity of 300 tonnes/day. The
construction, maintenance and daily operation of all wastewater treatment facilities are conducted in
accordance with the requirements of national and local environmental laws and regulations. Information
on all wastewater discharge is subject to 24-hour online monitoring and such monitored information is
transmitted to environmental authorities in a real-time manner. All equipment is operating normally. In
addition, the Company fully promotes all plants to install exhaust treatment facilities and VOCs online
monitoring facilities. All equipment is operating normally and exhaust produced is treated by the
prevention and treatment facilities before compliant release and is monitored.
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3. Environmental impact assessment of construction projects and other environmental
protection administrative permits
√Applicable □Not Applicable
The Company and its subsidiaries execute construction project implementation and production in
accordance with the requirements of laws and regulations and strictly comply with the three simultaneous
requirements of environmental protection for construction projects in the process of environmental
impact assessment, and have passed environmental assessment acceptance and are not involved in any
environmental illegal conducts such as construction before approval.
4. Emergency plans for environmental incidents
√Applicable □Not Applicable
The Company and its subsidiaries have formulated Emergency Plans for Environmental Incidents
in accordance with the requirements of laws and regulations and organized drills, and continue to
improve and upgrade the plans based on drill results.
5. Self-monitoring environmental programs
√Applicable □Not Applicable
The Company complies with national and local environmental standard requirements in respect of
all pollutant discharge. Wastewater collected is subject to standard treatment and is released in a
compliant manner. It is under real-time monitoring through the automatic online wastewater monitoring
system, which shares its information with Haier Smart Energy System. In March 2017, the Company
passed the upgraded certification in relation to ISO14001 environment management system. In May 2021,
a professional certification firm was appointed to conduct a review and audit on the operation of
ISO14001 system in 2020, where satisfactory results were obtained to demonstrate its good operating
condition. In May 2022, a second review and audit will be conducted on the operation of ISO14001
system in 2021.
6. Administrative penalty due to environmental issues during the Reporting Period
□Applicable √Not Applicable
7. Other environmental information that should be disclosed
□Applicable √Not Applicable
(II) Explanation on environmental protection of companies other than major pollutant
emission units
√Applicable □Not Applicable
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1. Administrative penalty due to environmental issues
□Applicable √Not Applicable
2. Other environmental information disclosure with reference to major pollutant emission units
√Applicable □Not Applicable
All divisions of the Company execute construction project implementation and production in
accordance with the requirements of laws and regulations and strictly comply with the three simultaneous
requirements of environmental protection for construction projects in the process of environmental
impact assessment, and have passed environmental assessment acceptance and are not involved in any
environmental illegal conducts such as construction before approval.
Through Haier Smart Energy Center, an industry leading energy big data analysis system, the
Company implements centralized dynamic monitoring and digitalized management in respect of major
energy consumption, such as water, electricity and gas, of all plants across the country by utilizing
automatized and informationalized technology and an integrated management model. It automatically
collects precise information on energy resources and completes prediction and analysis of energy
consumption information to optimize energy adjustment, reduce energy consumption per unit production
to achieve low-carbon production.
3. Reasons for failure to disclose other environmental information
□Applicable √Not Applicable
(III) Relevant information favorable to ecological protection, pollution prevention and control
and environmental responsibility fulfillment
√Applicable □Not Applicable
The Company proactively advances product iteration and upgrade and participates in the
development of ecological environment. The Company took part in the formulation of energy
consumption standard of household appliances organized by Beijing Institute of Standardization to
promote the shift to energy-saving models in the household appliance field. We cooperated with relevant
organizations in relevant refrigerant research and development projects to strive for the application of
refrigerants with lower greenhouse gas emission. Meanwhile, the Company and Haier’s suppliers, among
others, cooperated in the research and development of low-carbon related technology, such as recyclable
packaging materials, to facilitate environmental protection.
The Company proactively responds to the household appliance recycling policies of the NDRC by
launching a household appliance recycling project and investing in the construction of Haier’s household
appliance recycling plant. With the recycling business as the starting point, we tapped into the
disintegration process and implemented extended accountability for household appliance manufacturer
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to initiate the development of household appliance recycling plants. The measure will significantly boost
the efficiency of resource utilization to achieve sustainable development.
(IV) Measures taken during the Reporting Period to reduce its carbon emission and their
effectiveness
√Applicable □Not Applicable
As the leading enterprise in the industry, the Company proactively seeks ways to achieve carbon
neutrality and carbon peak and optimize industrial structure and energy structure. Currently, the
Company has designed and established Haier Zhong De Smart Park, Haier’s first “beacon base” in the
world to achieve carbon neutrality, and intends to expand its coverage within the Company in the future,
with a view to reaching carbon neutrality for Haier Smart Home’s industrial parks in the PRC within a
reasonable time, while giving due regards to comprehensive elements, such as costs. Haier Zhong De
Industrial Park uses a smart general energy control platform to implement centralized dynamic
monitoring and digitalized management in respect of the production, transmission, distribution and
utilization of energy and power in the park, such as electricity, water, gas, heat, compressed air,
photovoltaic, thereby improving and optimizing energy balance, controlling and adjusting the energy
system in the park and enhancing overall efficiency.
II. PERFORMANCE OF SOCIAL RESPONSIBILITIES
√ Applicable □ Not Applicable
For details, please refer to the 2021 Environment, Social and Governance Report of Haier Smart
Home Co., Ltd. disclosed on the date of this periodic report.
III. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITS
ACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREA
INVIGORATION
√Applicable □Not Applicable
In accordance with the national targeted poverty alleviation plan and documents requirements, the
Company emphasizes poverty alleviation and conducts targeted poverty alleviation within the authority
granted on the general meeting in respect of, among others, donations.
For years, the Company has made genuine contributions to education to improve the basic cultural
quality of people in poverty and skills of families in poverty, with an emphasis on shoring up the weak
link of the education sector and stopping inter-generational poverty. As of now, the Company, Haier
Group Companies (the effective controller of the Company) and its subordinate enterprises (hereafter,
the “Haier Group”) have constructed over 300 hope primary schools and hope secondary schools,
covering 26 provinces, municipalities and autonomous regions in the PRC. It also offers continuous
resource assistance to such schools every year to effectively boost the base education capacity in poverty
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regions and improve education quality. At the same time, during the major flooding of Zhengzhou, on
the one hand, local industry parks of the Company conducted self-rescue proactively and ensured the
normal resumption of work and production; on the other hand, the Company donated RMB20 million,
taking up social responsibilities voluntarily and supporting the reconstruction of disaster areas. The
Company maintains its support to rural development in respect of poverty alleviation in agricultural
development and poverty alleviation in farmers’ health to promote beautiful rural development. During
the Reporting Period, it offered, among other assistance, funds to Xian Feng Village, Tao Lin Town, Xi
Shui County, Gui Zhou.
In 2021, the Company’s capital expenditure in targeted poverty alleviation amounted to
approximately RMB37.79 million, primarily attributable to education poverty alleviation, poverty
alleviation in agricultural development, poverty alleviation in farmers’ health and construction of disaster
areas, etc., to proactively respond to the government’s call for social responsibility fulfillment.
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Section VI Significant Events
I. FULFILLMENT STATUS OF UNDERTAKINGS
(I) The undertakings made by the ultimate controller, shareholders, related parties, acquirer as well as the Company and other relevant parties during or up
to the reporting period
√Applicable □Not Applicable
Any Whether
Background deadline performed
Type of Date and term of
of Covenanter Contents of undertakings for in a timely
undertaking s undertakings
undertakings performanc and strict
e way
During the period from September 2006 to May 2007, the Company issued shares to Haier
Group Corporation (“Haier Group”) to purchase the controlling equity in its four subsidiaries,
namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. (
公限有子电调空尔海岛青
司 ), Hefei Haier Air-conditioning Co., Limited (
司公限有器调空尔海肥合 ), Wuhan Haier
Undertaking
Eliminate the Electronics Holding Co., Ltd. ( 司公限有份股器电尔海汉武 ), Guizhou Haier Electronics
related to
right defects Haier Group Co., Ltd. ( ). With regard to the land and property required in the
司公限有器电尔海州贵 27 September
significant Yes Yes
in land Corporation operation of three companies, namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. 2006, long-term
reorganizatio
property etc. (
司公限有子电调空尔海岛青 ), Hefei Haier Air-conditioning Co., Limited (
调空尔海肥合
n
), Wuhan Haier Electronics Holding Co., Ltd. (
司公限有器 司公限有份股器电尔海汉武 )
(the “Covenantees”), Haier Group made an undertaking (the “2006 Undertaking”). According
to the content of 2006 Undertaking and current condition of each Covenantee, Haier Group
will constantly assure that Covenantees will lease the land and property owned by Haier
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Group for free. Haier Group will make compensation in the event that the Covenantees suffer
loss due to the unavailability of such land and property.
Prior to the Transaction (hereinafter “the Transaction” refers to the transaction in relation to
the privatization of Haier Electronics by Haier Smart Home), Haier Electric was a controlling
subsidiary of the Company and did not have peer competition with the Company; after the
Haier Smart
Address peer completion of the Transaction, Haier Electric became a wholly-owned or controlling 31 July 2020,
Home Co., Yes Yes
competition subsidiary of the Company and no new peer competition with the Company existed or will long-term
Ltd.
arise. There is no new peer competition or potential competition between the Company and
other related parties controlled by the controlling shareholders or the de facto controller of
the Company.
1. The Transaction constitutes a connected transaction and the connected transaction
procedures performed under the Transaction are in compliance with the relevant regulations.
The pricing of the connected transaction is fair and there are no circumstances under which
the interests of the listed company and the non-connected shareholders are prejudiced. 2.
Upon completion of the Transaction, the Company and its affiliates will take lawful and
Address
Haier Group effective measures to minimize and regulate the connected transactions with the listed 29 July 2020,
connected Yes Yes
Corporation company, take the initiative to safeguard the interests of the listed company and all long-term
transactions
shareholders, and refrain from taking advantages of connected transactions for improper
benefits. 3. Provided that there is no conflict with laws and regulations, if connected
transactions between the Company and its affiliates and the listed company occur or exist
which cannot be avoided or for which there are reasonable reasons, the Company and its
affiliates will legally enter into a transaction agreement with the listed company to ensure
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strict compliance with the procedures of connected transactions required by the laws,
regulations, regulatory documents and the articles of association of the Company, conduct
transactions in accordance with the principles of marketability and fair prices to ensure the
fairness and compliance of connected transactions, and refrain from taking advantages of
such connected transactions to engage in any acts that are detrimental to the interests of the
listed company or its minority shareholders, and at the same time, comply with the
information disclosure obligations in accordance with relevant regulations.
1. The Company and its controlling subsidiary, Haier COSMO Co., Ltd., were principally
engaged in investment business during the reporting period, and the Company and its
controlling subsidiary, Haier COSMO Co., Ltd. (including its subsidiaries and entities with
more than 30% shareholding), have no real or potential per competition with Haier Smart
Home; 2. the domestic and overseas white goods businesses and assets held by the Company
(including the Company's subsidiaries and entities with more than 30% shareholding) have
been injected into Haier Smart Home through asset consolidation and equity transfer in
Address peer Haier Group 29 July 2020,
accordance with the commitments made by the Company in January 2011 and the Yes Yes
competition Corporation long-term
requirements for adjusting such commitments as considered and approved by Haier Smart
Home at its 2014 annual general meeting; 3. Since the acquisition of 100% of Haier New
Zealand Investment Holding Company Limited (which holds 100% of the shares in Fisher &
Paykel Appliances Holdings Limited) by Haier Smart Home's offshore subsidiary, Haier
Singapore Investment Holding Co., Ltd., following the completion in July 2018, the
Company (including the Company's subsidiaries and entities with more than 30%
shareholding) and Haier Smart Home do not have any peer competing relationship in any
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business areas both within and outside the PRC. During the reporting period, the Company
(including the Company's subsidiaries and entities with more than 30% shareholding) did not
have any new peer competition with Haier Smart Home; 4. Upon completion of the
Transaction, the Company (including the Company's subsidiaries and entities with more than
30% shareholding) and its affiliates do not have any new or potential peer competition with
Haier Smart Home; 5. During the period when the company is the controlling shareholder of
Haier Smart Home and the shares of Haier Smart Home are listed on the Hong Kong Stock
Exchange, the company and its other subsidiaries and entities with more than 30%
shareholding will not operate any business that competes with the business engaged by Haier
Smart Home and will not engage in real or potential peer competition with Haier Smart Home.
Upon completion of the Transaction, the company will strictly comply with the Company
Law, the Securities Law, the relevant regulations of the China Securities Regulatory
Commission, the Shanghai Stock Exchange and the articles of association of Haier Smart
Home, etc., fairly exercise shareholders' rights and fulfill shareholders' obligations, refrain
from taking advantage of its shareholding position for improper benefits, ensure the listed
Haier Group company will continue to be completely separate from the company and other enterprises on 29 July 2020,
Others Yes Yes
Corporation which the company exercises control and exerts significant influence in terms of long-term
management, personnel, assets, finance, organization and business operations, and maintain
the continued independence of the listed company in terms of management, personnel, assets,
finance, organization and business operations. Upon completion of the Transaction, the
company will comply with the provisions of the Notice on Several Issues concerning
Regulating Fund Transactions between Listed Companies and Their Affiliates and the
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External Guarantee of Listed Companies and the Circular of China Securities Regulatory
Commission and China Banking Regulatory Commission on Regulating the External
Guaranties Provided by Listed Companies to regulate the external guarantees by listed
companies and their subsidiaries, and will not misappropriate the funds of the listed company
and their subsidiaries. The company undertakes to strictly fulfill the above commitments. In
the event that the interests of the listed company are damaged as a result of any breach of the
above commitments by the company and other enterprises on which the company exercises
control and exerts significant influence, the company will legally bear the corresponding
liability for damage.
1. The company legally holds the Subject Shares, of which the company has full ownership,
and there are no restrictions on the rights of the Subject Shares or any circumstances that may
affect the offer or settlement of the Transaction. 2. The company has full rights to participate
in the Transaction and has the right to accept the Offer in connection with the Transaction
HCH (HK)
and to sign and perform all agreements and documents involved in the Transaction. 3. The 29 July 2020,
INVESTME
Company intends to participate in the Transaction as a shareholder under the scheme of termination of
NT
Others arrangement. 4.Unless the privatisation of Haier Electronics is completed or Haier Smart privatization / six Yes Yes
MANAGEM
Home announces the termination of privatisation, except for the transactions with Haier months after H
ENT CO.,
Smart Home and its designated entities, the Company will not sell the Subject Shares, reach Share listing
LIMITED
any disposal arrangements with any third party regarding the Subject Shares or their rights
and interests, and set any rights restrictions such as pledge on the Subject Shares from the
date of issuance of this confirmation letter. 5. Unless the privatisation of Haier Electronics is
completed or Haier Smart Home announces the termination of privatization, except for
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participating in and promoting the Transaction, the company will not increase its
shareholding in Haier Electronics, reach any arrangements with other shareholders of Haier
Electronics regarding the disposal of the Subject Shares or their rights and interests, or set
any rights restrictions such as pledge on Haier Electronics shares held by other shareholders
of Haier Electronics. 6. The company will abide by the relevant restrictions on the sale of
Haier Smart Home Shares in Rule 10.07 of the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited, which has been revised from time to time:
within six months from the date of disclosure of our shareholding in Haier Smart Home H
shares listed in the Transaction to the date of trading of Haier Smart Home H shares on the
Hong Kong Stock Exchange, the company will not sell Haier Smart Home H shares acquired
by the company through the Transaction, or enter into any agreement to sell such shares, or
create any options, rights, interests or encumbrances in respect of such shares; In addition,
the sale of the Haier Smart Home H Shares, the entering into of any agreement to sell such
shares, or the exercise or enforcement of such options, rights, benefits or encumbrances in
respect of such shares by the company during the six months following the expiry of the
aforesaid six-month period shall not result in Haier Group Companies and parties acting in
concert with it losing their status as controlling shareholders of Haier Smart Home.
1. The Transaction constitutes a connected transaction and the connected transaction
HCH (HK)
Address procedures performed under the Transaction are in compliance with the relevant regulations.
INVESTME 29 July 2020,
connected The pricing of the connected transaction is fair and there are no circumstances under which Yes Yes
NT long-term
transactions the interests of the listed company and the non-connected shareholders are prejudiced. 2.
MANAGEM
Upon completion of the Transaction, the company and other enterprises on which the
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ENT CO., company exercises control will take lawful and effective measures to minimize and regulate
LIMITED the connected transactions with the listed company, take the initiative to safeguard the
interests of the listed company and all shareholders, and refrain from taking advantages of
connected transactions for improper benefits. 3. Provided that there is no conflict with laws
and regulations, if connected transactions between the company and other enterprises on
which the company exercise control and the listed company occur or exist which cannot be
avoided or for which there are reasonable reasons, the company and other enterprises on
which the company exercises control will legally enter into a transaction agreement with the
listed company to ensure strict compliance with the procedures of connected transactions
required by the laws, regulations, regulatory documents and the articles of association of the
company, conduct transactions in accordance with the principles of marketability and fair
prices, and refrain from taking advantages of such connected transactions to engage in any
acts that are detrimental to the interests of the listed company or its minority shareholders,
and at the same time, comply with the information disclosure obligations in accordance with
relevant regulations. 4. Any covenants and arrangements between the company and other
enterprises on which the company exercise control and the listed company in relation to
connected transactions shall not prevent the other party from conducting business or dealing
with any third party for its own benefit and on equal competitive terms in the market.
Undertaking Eliminate the Haier Group Corporation undertakes that it will assure Haier Smart Home and its subsidiaries
Haier Group 24 December
related to right defects of the constant, stable and unobstructed use of the leased property. In the event that Haier Yes Yes
Corporate 2013, long-term
refinancing in land Smart Home or any of its subsidiaries suffers any economic loss due to the fact that leased
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property and property has no relevant ownership certificate, Haier Group Corporation will make
etc. compensation to impaired party in a timely and sufficient way and take all reasonable and
practicable measures to support the impaired party to recover to normal operation before the
occurrence of loss. Upon the expiration of relevant leasing period, Haier Group Corporation
will grant or take practicable measures to assure Haier Smart Home and its subsidiaries of
priority to continue to lease the property at a price not higher than the rent in comparable
market at that time. Haier Group Corporation will assure Haier Smart Home and its
subsidiaries of the constant, stable, free and unobstructed use of self-built property and land
of the Group. In the event that Haier Smart Home or any of its subsidiaries fails to continue
to use self-built property according to its own will or in original way due to the fact that self-
built property has no relevant ownership certificate, Haier Group Corporation will take all
reasonable and practicable measures to eliminate obstruction and impact, or will support
Haier Smart Home or its affected subsidiary to obtain alternative property as soon as possible,
if Haier Group Corporation anticipates it is unable to cope with or eliminate the external
obstruction and impact with its reasonable effort. For details, please refer to the
Announcement of Qingdao Haier Co., Ltd. on the Formation, Current Situation of the
Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of
Ownership, Solution for the Defect and Guarantee Measures (L2014-005) published by the
Company on the four major securities newspapers and the website of Shanghai Stock
Exchange on 29 March 2014.
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The Company undertakes that it will eliminate the property defects of the Company and main
subsidiaries within five years with reasonable business effort since 24 December 2013, to
achieve the legality and compliance of the Company and main subsidiaries in terms of land
and property. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on
the Formation, Current Situation of the Defective Property, the Influence on Operation of
Issuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures
(L2014-005) published by the Company on the four major securities newspapers and the
Eliminate the
Haier Smart website of Shanghai Stock Exchange on 29 March 2014. As at the end of 2018, the Company
right defects 24 December
Home Co., has resolved the property defects of itself and its eight major subsidiaries and is in the process Yes Yes
in land 2013, eight years
Ltd. of resolving the property defects of the remaining five major subsidiaries. After the approval
property etc.
of the board meeting held by the Company on 5 November 2018 and the general meeting
held on 21 December 2018, the term of the above undertakings was extended for three years
based on the original deadline. At present, the property defects of the five major subsidiaries
have been properly resolved by applying for property ownership certificates, relocating the
defective properties and categorizing them as reserve alongside the lands, divesting the
defective properties with the equity of the subsidiaries and other means. The Company has
fulfilled this undertaking.
15 September
Undertakings
Haier Smart The Company will not provide loans or any other forms of financial assistance, including 2021, the
related to
Others Home Co., guaranteeing their loans, to any incentive recipient for acquiring relevant stock options under completion of Yes Yes
Equity
Ltd. this incentive plan. equity incentive
incentive
implementation
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Inject the assets of Haier Photoelectric to the Company or dispose such assets through other
ways according to the requirements of the domestic supervision before June 2025. For more
Asset Haier Group December 2015
details, please refer to the Announcement of Haier Smart Home Co., Ltd. on the Changes of Yes Yes
injection Corporation to June 2025
Some Commitments on Asset Injection (L2020- 024) published on the four major securities
newspapers and the website of Shanghai Stock Exchange on 30 April 2020.
In August 2018, Guanmei (Shanghai) Enterprise Management Company Limited ( (
上 美贯
)
司公限有理管业企 海 ) (hereinafter referred to as “Guanmei”), an indirect holding
subsidiary of the Company replaced the 55% equity interests of Bingji (Shanghai) Enterprise
Management Company Limited ( ( )
司公限有理管业企 海上 戟冰 ) held by it with the 51%
Haier
equity interests of Qingdao HSW Water Appliance Co., Ltd. (hereinafter referred to as
COSMO Co.,
Other “Water Equipment”) held by Haier Electric Appliances International Co., Ltd. (hereinafter
Ltd.
undertakings referred to as “Haier International”). In this regard, Haier International promises that the
(formerly
Profit cumulative actual net profit recorded by the Water Equipment in the three accounting years
known as As of 30 April
forecast and during the profit compensation period shall not be less than its cumulative forecasted net Yes Yes
“Haier 2021
compensation profit in the corresponding year, otherwise Haier International shall compensate Guanmei’s
Electric
results according to the Assets Replacement Agreement. Details are set out in the
Appliances
Announcement on the Equity Replacement and Related Party Transactions to Be Conducted
International
by the Holding Subsidiary of Qingdao Haier Co., Ltd. and Haier Electronics International
Co., Ltd.”)
Co., Ltd. (L2018-047) published by the Company on the four major securities newspapers
and the website of Shanghai Stock Exchange on 31 August 2018. Since the Water Equipment
achieved the cumulative net profit in the three accounting years during the profit
compensation period, Haier International shall not compensate the results. Details are set out
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in the Special Audit Report on the Satisfaction of Performance Commitment of Haier Smart
Home Co., Ltd. (Report No.: He Xin Zhuan Zi (2021) No.000101) disclosed by the Company
on 31 March 2021.
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(II) The Company’s explanation on whether the earnings forecast on assets or projects was
met and its reasons in the situation that earnings in the Company’s assets or projects
have a forecast, and the period of which includes the reporting period.
□ Reached □ Not Reached √Not Applicable
(III) Completion of performance commitments and their impact on the impairment test of
goodwill
□ Applicable √ Not Applicable
II. NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLING
SHAREHOLDERS AND OTHER RELATED PARTIES DURING THE REPORTING
PERIOD
□Applicable √Not Applicable
III. INFORMATION ON NON-COMPLIANCE GUARANTEES
□Applicable √Not Applicable
IV. EXPLANATION OF THE BOARD OF THE COMPANY ON THE ‘NON-STANDARD
AUDIT REPORT’ ISSUED BY THE ACCOUNTING FIRM
□Applicable √Not Applicable
V. EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS AND EFFECTS
OF CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OR
CORRECTION OF SIGNIFICANT ACCOUNTING ERRORS
(I) Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates
□Applicable √Not Applicable
(II) Explanation of the Company’s analysis on reasons and effects of correction of significant
accounting errors
□Applicable √Not Applicable
(III) Communication with former accounting firm
□Applicable √Not Applicable
(IV) Other explanations
□Applicable √Not Applicable
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VI. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM
Unit and Currency: RMB million
Current appointment
Name of domestic accounting firm Hexin Certified Public Accountants LLP
Remuneration of domestic accounting firm 7.15
Audit period of domestic accounting firm 9 years
Name of overseas accounting firm HLB Hodgson Impey Cheng Limited
Remuneration of overseas accounting firm 3.89
Audit period of overseas accounting firm
2 years
Name Remuneration
Accounting firm for Internal control audit Hexin Certified Public Accountants LLP 2.85
Financial advisor Zheshang Securities Co., Ltd. 0
Explanation of appointment and dismissal of accounting firm
□ Applicable √ Not Applicable
Explanation of change of accounting firm during the auditing period
□ Applicable √ Not Applicable
VII. POSSIBILITY OF DELISTING
(I) Reasons of warning for delisting risks
□ Applicable √ Not Applicable
(II) Response measures to be taken by the Company
□ Applicable √ Not Applicable
(III) Circumstances and reasons for termination of listing
□ Applicable √ Not Applicable
VIII. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING
□ Applicable √ Not Applicable
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IX. MATERIAL LITIGATION AND ARBITRATION MATTERS
□ Material litigation and arbitration matters during the year
√ No material litigation and arbitration matters during the year
X. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING
SHAREHOLDERS AND ULTIMATE CONTROLLERS DUE TO SUSPECT OF LAW
VIOLATIONS AND THE ISSUE OF RECTIFICATION
□ Applicable √ Not applicable
XI. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND ITS
CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER DURING
THE REPORTING PERIOD
□ Applicable √ Not applicable
XII. SIGNIFICANT RELATED-PARTY TRANSACTIONS
(I) Related-party transactions from daily operation
1. Matters that have been disclosed in temporary announcements and with no subsequent
progress or change
□ Applicable √Not applicable
2.Matters that have been disclosed in temporary announcements and with subsequent progress
or change
√Applicable □Not applicable
Pursuant to the " Resolution on Proposal to the General Meeting to Authorize the Board of Directors
and its Authorized Persons to Sign the Framework Agreement on Connected Transactions for 2020-
2022" ( 署 签 士 人权 授其 及会 事董 权授 会 大东 股请 提于关《 2020-2022 议的 定协 架框 易 交联关年
》案 ) considered and approved at the 10th meeting of the 10th session of the Board of Directors and the
Second Extraordinary General Meeting of 2020, the " Resolution on Signing the Framework Agreement
on Connected Transactions" ( 》 案议的定 协架 框易交 联关署 签于关《 ) considered and approved at the
14th meeting of the 10th session of the Board of Directors, and the " Resolution of Haier Smart Home
Co., Ltd. on Renewing the Framework Agreement on Financial Services with Haier Group Corporation
and Estimated Amount of Connected Transactions" ( 司公 团集尔海 与于 关司公 限有份 股家智尔海《
》案议 的度 额易交 联关计 预暨签续 ) considered and approved at the 18th meeting of the 10th session
of the Board of Directors and the 2020 Annual General Meeting, the Company has made estimation on
the connected transactions for the next three years, as detailed in the aforesaid announcements regarding
the resolutions of the meetings.
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For the actual performance of the Company's connected transactions in the year of 2021, please
refer to "XII. Related parties and related-party transactions " under Section X — Financial and
Accounting Report set out in this regular report.
3.Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matter disclosed in temporary announcements and with no subsequent progress or change
√ Applicable □ Not Applicable
Summary of matters Query index
Related-party transactions involved in the For details, please refer to the Announcement of
acquisition of minority interests: please refer to Haier Smart Home Co., Ltd. on the Acquisition
(V) Analysis of status of investment in Section III of Equity Interests in Subsidiaries held by Haier
Discussion and Analysis of Operation of this Group Corporation and Related-Party
report. Transactions disclosed on 30 October 2021 and
relevant announcements disclosed on the same
day.
2. Matters that have been disclosed in temporary announcements and with subsequent progress or
change
□ Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
4. If performance agreement is involved, the performance achieved during the reporting period
shall be disclosed
□ Applicable √ Not applicable
(III) Significant related-party transactions of joint external investment
1. Matters that have been disclosed in temporary announcements and with no subsequent progress
or change
□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent progress or
change
□ Applicable √ Not applicable
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Haier Smart Home Co., Ltd. 2021 Annual Report
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
(IV) Amounts due to or from related parties
1. Matters that have been disclosed in temporary announcements and with no subsequent progress
or change
□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcement and with subsequent progress or
change
□ Applicable √ Not applicable
3. Matters that haven’t been disclosed in temporary announcements
□ Applicable √ Not applicable
(V) Financial business between the Company and the finance company with which it has a
related relationship, or it is the company's controlling finance company and related
parties
√ Applicable □Not applicable
1. Deposit business
√ Applicable □Not applicable
Unit and Currency: RMB
Changes of the period
Range
Maximum Balance as at the
Related of Total amount Balance as at the end
Relationship daily deposit beginning of the Total amount
party deposit deposited during the of the period
limit period withdrawn during the
interest period
period
Haier Subsidiary 0.385%
Finance of Haier 29 billion to 24,964,098,241.74 410,845,216,685.05 407,177,168,007.49 28,632,146,919.30
Co., Ltd. Group 3.25%
Total / / / 24,964,098,241.74 410,845,216,685.05 407,177,168,007.49 28,632,146,919.30
2. Lending business
√ Applicable □Not applicable
Unit and Currency: RMB
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Changes of the period
Range of Balance as at the
Related Loan Total loan Balance as at the
Relationship loan beginning of the Total repayment
party limit amount for the end of the period
interest period amount for the
period
period
Haier
Subsidiary of 5 1.52%to
Finance 454,470,450.05 19,359,969.00 137,322,759.93 336,507,659.12
Haier Group billion 3.08%
Co., Ltd.
Total / / / 454,470,450.05 19,359,969.00 137,322,759.93 336,507,659.12
3. Credit business or other finance businesses
√ Applicable □Not applicable
Unit and Currency: RMB
Actual amount of
Related party Relationship Type of business Total amount
occurrence
Foreign exchange derivatives
Haier Finance Co., Ltd. Subsidiary of Haier Group 5.5 billion 2,611,999,252.69
products
Haier Finance Co., Ltd. Subsidiary of Haier Group Service charge 80 million 23,493,333.12
4. Other explanations
□Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
XIII. SIGNIFICANT CONTRACTS AND THEIR EXECUTION
(I) Trusteeship, contracting and leasing
1. Trusteeship
□ Applicable √ Not applicable
During the reporting period, the Company had no material escrow matters. Up to now, the following
entrusted assets that have been approved by the Company's shareholders' meeting are still in effect:
According to Haier Group's commitment in 2011 on further supporting the development of Qingdao
Haier and resolving interbank competition to reduce connected transactions, based on the fact that
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Qingdao Haier Optoelectronics Co., Ltd. ( 司公限 有 电光尔海岛青 ) and its subsidiaries, the main body
of Haier Group engaging in the color television business, are still in a period of transformation and
integration, and their financial performance has not yet met the Company's expectations, Haier Group is
unable to complete the transfer before the aforesaid commitment period. Haier Group intends to entrust
the Company with the operation and management of the escrow assets and pay the Company an annual
escrow fee of RMB1 million during the escrow period.
2. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
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(II) Guarantee
√ Applicable □ Not applicable
Unit and Currency: RMB0’000
External guarantees provided by the Company (excluding guarantees for subsidiaries)
Date of
Whether
Relationship occurrence Whether Overdue Whether
Expiration the
between the Secured Amount of of the Commencement Type of Collateral the amount of Whether there is a Related-party
Guarantor date of guarantee Relationship
guarantor and the party guarantee guarantee date of guarantee guarantee (if any) guarantee the counter-guarantee guarantee or
guarantee has been
listed company (date of is overdue guarantee not
fulfilled
agreement)
Total amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries) 0
Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries) 0
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries occurred during the reporting period 3,111,075
Total balance of guarantees for subsidiaries at the end of the reporting period (B) 1,135,728
Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total amount of guarantee (A + B) 1,135,728
Ratio of total amount of guarantees to net assets of the Company (%) 14.28
Including:
Amount of guarantees for shareholders, ultimate controllers and their related parties(C) 0
Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio 252,863
exceeding 70% (D)
The amount of total amount of guarantee in excess of 50% of net assets (E) 0
Total amount of the above three guarantees (C + D + E) 252,863
Explanation of possibly bearing related discharge duty for premature guarantees Nil
Explanation of guarantee status Nil
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(III) Entrusted others to manage cash assets
1. Entrusted wealth management
(1) Overall of entrusted wealth management
√ Applicable □ Not applicable
Unit and Currency: RMB
Premature Past due uncollected
Type Sources of funds Amount
balance amount
Principal-guaranteed
wealth management Self-owned
2,472,550,008 2,472,550,008 0
products and funds, CB
structured deposit
Others
√ Applicable □ Not applicable
By the end of the reporting period, the balance of the Company’s entrusted wealth
management amounted to RMB2.473 billion, including two parts: ①temporarily-idle fundraising
wealth management: at the end of December 2018, the Company’s proceeds for the issuance of
convertible corporate bonds were fully landed. In order to improve the yield of temporarily-idle
funds, the Company intended to carry out cash management with the amounts not exceeding
RMB0.5 billion after approved by the Board of Directors. By the end of the reporting period, the
balance of the entrusted wealth management amounted to RMB315 million; ②
Temporary-idle
funds wealth management by certain subsidiaries of the Company: Under the premise of
ensuring sufficient capital required by the principal operating activities and daily operations, some
subsidiaries of the company purchased some short-term principal-guaranteed wealth management
products and structured deposits from major commercial banks to improve the yield of temporarily-
idle funds and the return for shareholders within the authority of the general manager’s office
meeting and under the condition of ensuring fund safety. By the end of the reporting period, the
balance of the entrusted wealth management amounted to RMB2.158 billion.
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(2) Individual entrusted wealth management
√ Applicable □ Not applicable
Unit and Currency: RMB
Any future Amount of
Type of Commencement Expiration date plan for provision for
Amount of Actual Whether
entrusted date of entrusted of entrusted Sources of Determination Annualized Expected Collectio entrusted impairment
Trustee entrusted wealth Investment gains or approved by
wealth wealth wealth funds of return yield return (if any) n wealth (if any)
management losses due process
management management management managemen
t
Haier Road
sub-branch of Wealth Self-owned Not
240,000,000.00 2021/10/27 2022/1/27 3.40% 2,056,767
Construction management funds expired YES YES
Bank
Haier Road
sub-branch of Wealth Self-owned Not
300,000,000.00 2021/11/24 2022/5/24 3.50% 5,206,849
Construction management funds expired YES YES
Bank
Qingdao branch
of Bank of Wealth Self-owned Not
878,000,000.00 2021/10/27 2022/1/26 3.35% 7,333,104
Communication management funds expired YES YES
s
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Qingdao branch
of Shanghai Wealth Not
Self-owned
Pudong management 290,000,000.00 2021/11/3 2022/1/29 3.20% 2,211,945 expired YES YES
funds
Development
Bank
Qingdao branch
of Shanghai
Pudong Wealth Self-owned Not
278,500,000.00 2021/11/22 2022/2/21 3.20% 2,221,896
Development management funds expired YES YES
Bank
Qingdao branch
of Bank of Wealth Self-owned Not
62,000,000.00 2021/9/17 2022/1/18 3.30% 689,474
Communication management funds expired YES YES
s
Haier Road
sub-branch of Wealth Self-owned Not
100,000,000.00 2021/12/22 2022/3/22 3.40% 838,356
Construction management funds expired YES YES
Bank
Haier Road Linked Not
sub-branch of structured 65,000,000 2021/11/29 2022/5/29 CB 3.50% 1,128,151 expired YES YES
China deposit
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Construction
Bank
Corporation
Haier Road Linked
sub-branch of structured
China deposit Not
Construction 125,000,000 2021/12/27 2022/6/26 CB 3.50% 2,169,521 expired YES YES
Bank
Corporation
Haier Road Linked
sub-branch of structured
China deposit
Construction 125,000,000 2021/9/2 2022/2/15 CB 3.50% 1,989,726 Not YES YES
Bank expired
Corporation
Asset Short-term
Self-owned Not
management wealth 9,050,008 YES YES
funds expired
account of management
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Industrial Bank
CO., LTD.
Others
□ Applicable √Not applicable
(3) Provisions for impairment of entrusted wealth management
□ Applicable √Not applicable
2. Entrusted loans
(1) Overall entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not Applicable
(2) Individual entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not Applicable
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(3) Provisions for impairment of entrusted loans
□ Applicable √ Not Applicable
3. Others
√ Applicable □ Not Applicable
RMB0’000
Amount
Initial investment Amount sold Proportion of closing
Operator name of Type of Opening purchased Provision for Closing Actual profit or
amount of during the investment amount
derivatives derivatives Starting date Ending date investment during the impairment investment loss for the
derivatives reporting over net assets at end
investment investment amount reporting (if any) amount reporting period
investment period of reporting period
period
Forward
foreign
Bank 1,250,593 1 Jan 2021 31 Dec 2021 1,250,593 1,247,880 20,489
exchange
contract
Interest
Bank rate/exchange 230,366 1 Jan 2021 31 Dec 2021 230,366 209,737 -2,596
rate swap
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Own funds of the Company
Funding sources of derivatives investments
Changes in market prices or fair value of products,
1. The profit or loss of the foreign exchange forward contracts amounted to RMB204.89 million during the reporting period;
For changes in the market price or fair value of the invested
derivatives products during the reporting period, the 2. The profit and loss arising from the interest rate/exchange rate swap was –RMB25.96 million during the reporting period.
specific methodology used and the settings of relevant
assumptions and parameters should be disclosed in the fair The specific methodology used and the related assumptions and parameter settings are according to the forward quotations of foreign exchange and interest rate
value analysis of the derivatives. swaps of the financial institutions
(IV) Other Major Contracts
□ Applicable √ Not Applicable
XIV. EXPLANATION OF OTHER SIGNIFICANT MATTERS THAT HAVE A SIGNIFICANT IMPACT ON THE VALUE JUDGMENTS AND
INVESTMENT DECISIONS OF INVESTORS
□ Applicable √ Not Applicable
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Section VII Changes in Shares and Information about Shareholders
I. CHANGES IN SHARE CAPITAL
(I) Table of Changes in shares
1. Table of Changes in shares
Unit: share
Prior to the change Increase and decrease of the change ( ＋ ,-) After the change
Shares
New shares Bonus
Number Percentage converted Others Subtotal Number Percentage
issued shares
(%) from reserve (%)
I. Shares with selling
restrictions
1. Shares held by the state
2. Shares held by the
state-owned legal entities
3. Shares held by other
domestic investors
Including: shares held by
Domestic non-state-
owned
legal entities
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Shares held by domestic
individuals
4. Shares held by foreign
investors
Including: shares held by
foreign legal
entities
Shares held by foreign
individuals
II. Tradable shares
9,027,846,441 100.00 403,210,889 -32,352,800 370,858,089 9,398,704,530 100.00
without selling restrictions
1. RMB ordinary shares 6,308,552,654 69.88 6,308,552,654 67.12
2. Domestic listed foreign
shares
3. Overseas listed foreign
2,719,293,787 30.12 403,210,889 -32,352,800 370,858,089 3,090,151,876 32.88
shares
4. Others
III. Total shares 9,027,846,441 100.00 403,210,889 -32,352,800 370,858,089 9,398,704,530 100.00
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2. Statement on the changes in shares
√ Applicable □ Not Applicable
(1) H-share convertible bonds: On 27 October 2020, the China Securities Regulatory Commission
issued the Reply to the Approval of Issuance of Overseas Listed Foreign Shares and Convertible Corporate
Bonds by Haier Smart Home Co., Ltd. ( 换 转可及 股资外市 上外 境行发 司公限 有份股家 智 尔海准 核于关《
》 复批的 券债司公 ) (Zheng Jian Xu Ke [2020] No. 2768), which approved that: (1) the Company issued no
more than 2,856,526,138 overseas listed foreign shares (including additional shares issued by holders of
convertible corporate bonds not exceeding HK$8.0 billion or equivalent in foreign currencies upon the exercise
of the convertible rights), with a par value of RMB1 each, all of which are ordinary shares. After the completion
of this issuance, the Company can be listed on the main board of the Stock Exchange of Hong Kong Limited
(hereinafter referred to as the “Hong Kong Stock Exchange”) ; (2) the issuance of corporate bonds not exceeding
HK$8.0 billion or equivalent in foreign currencies that can be converted into the Company’s overseas listed
foreign shares by the overseas wholly-owned subsidiaries guaranteed by the Company. On 23 December 2020,
2,448,279,814 H shares of the Company, issued for the privatisation of Haier Electronics Group Co., Ltd. (a
Hong Kong listed company), were listed and traded on the Main Board of the Hong Kong Stock Exchange and
the related convertible bonds under the H share convertible bonds scheme became valid and in effect
immediately after the listing amounting to HK$7,993,000,000. During the reporting period, HK$7,594,000,000
of the convertible bonds were converted into a total of 403,210,889 H shares of the Company and the
outstanding amount was HK$399,000,000.
(2) Cancellation of H share repurchase: On 5 March 2021, the First Extraordinary General Meeting of
2021 and the First Class Meeting of 2021 for A shares/D shares/H shares of the Company considered and
approved the "Resolution on the Introduction of General Mandate for Repurchase of H Shares upon Completion
of Listing", in which the Company intends to repurchase H shares and cancel them within the agreed period.
During the reporting period, the Company repurchased a total of 32,352,800 H shares and all such shares have
been cancelled.
Based on the above, during the reporting period, the share capital of the Company was changed from
9,027,846,441 shares at the beginning of the reporting period to 9,398,704,530 shares.
3. Effect of changes in shares on the financial indicators such as earnings per share and net assets per
share (if any) over the last year and the last reporting period
√ Applicable □ Not Applicable
In 2021, the Company achieved net profit attributable to shareholders of the Parent Company of
RMB13,067,038,271.85, equity attributable to owners of the Parent Company of RMB79,810,927,325.55, in
terms of total share capital of 9,027,846,441 shares at the beginning of the period, profit per share was RMB1.45
and net asset was RMB8.84 per share accordingly; in terms of total share capital of 9,398,704,530 shares at the
end of the period, profit per share was RMB1.39 and net asset was RMB8.49 per share accordingly.
4. Other disclosure deemed necessary by the Company or required by securities
regulatory authorities
□Applicable √Not Applicable
(II) Changes in shares with selling restriction
□Applicable √Not Applicable
II. ISSUANCE AND LISTING OF SECURITIES
(I) Issuance of securities as of the reporting period
√Applicable □Not Applicable
Unit: share Currency: RMB
Type of shares and Date of Issuing price Number of Date of listing Number of Date of
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Haier Smart Home Co., Ltd. 2021 Annual Report
its derivative securities issue (or interests issuance shares under termination
rate) listing
approval
Convertible corporation bonds, convertible bonds with warrants
Corporate bonds convertible 23 /
23 December
into H-shares December 7,993,000,000 7,993,000,000 21 November 2022
2020
2020
Details of issuance of securities as of the reporting period (please specify separately for bonds with different
interest rates within the duration):
√ Applicable □ Not Applicable
On 27 October 2020, China Securities Regulatory Commission (CSRC) issued the Reply on Approval of
the Foreign Public Issuance of Convertible Bonds by Qingdao Haier Co., Ltd.” (Zheng Jian Xu Ke [2020] No.
2768, hereinafter referred to as “CSRC Reply”), which approved: (1) Haier Smart Home shall issue not more
than 2,856,526,138 overseas listed foreign capital shares (including not more than HK$8 billion or the
equivalent in foreign currencies of shares issued for the holders of convertible corporate bonds upon the exercise
of conversion rights), with a par value of RMB1 each and all of which are ordinary shares. Upon the completion
of this issue, Haier Smart Home can be listed on the Main Board of The Stock Exchange of Hong Kong Limited;
(2) the overseas wholly-owned subsidiary guaranteed by Haier Smart Home can issue corporate bonds of not
exceeding HK$8 billion or equivalent in foreign currencies that can be converted into overseas listed foreign
capital shares of the issuer. Pursuant to which and with the approval of the relevant parties, the Company and
Harvest International Company, a wholly- owned subsidiary of the Company, issued 2,448,279,814 H-shares
and convertible bonds respectively on Hong Kong Stock Exchange on 23 December 2020 (the ex-changeable
bonds of HK$8 billion issued in November 2017 were converted into convertible bonds, and the convertible
bonds in effect amounted to HK$7,993 million, which can be converted into H-shares of the Company). For
details, please refer to the prospectus and other relevant documents disclosed in Hong Kong market during the
reporting period of the Company and the Report on the Implementation of Material Asset Purchase and Related
Party Transactions and other relevant documents disclosed on 26 December 2020.
(II) Changes in total shares and shareholder structure as well as assets and liabilities structure of the
Company
√ Applicable □ Not Applicable
For the total number of ordinary shares of the Company and changes in shareholder structure, please refer
to the relevant explanations in ‘I. Changes in share capital’ and ‘III. Information on shareholder and ultimate
controllers’ in this section. For the impact of the aforesaid changes on ‘Paid-in capital (or share capital)’ in the
Company’s balance sheet and other items, please refer to the relevant content in ‘Section X Financial Report’
of this report.
(III) Information on existing shares specifically issued for staff
□ Applicable √ Not Applicable
III. INFORMATION ON SHAREHOLDERS AND ULTIMATE CONTROLLERS
(I) Total number of shareholders
Total number of ordinary shareholders up to the end of the reporting period 156,482
Total number of ordinary shareholders as at the end of the last month prior to 170,068
the disclosure day of the annual report
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Haier Smart Home Co., Ltd. 2021 Annual Report
(II) Table of top ten shareholders, top ten common shareholders (or the shareholders not subject to selling restrictions) by the end of the reporting period
Unit: share
Shareholdings of top ten shareholders
Number of Status of shares
Number of shares pledged, marked or
Increase/decrease
shares held at Percentage held frozen
Name of shareholder during the reporting Nature of shareholder
the end of the (%) with
(full name) period
period selling Status Number
restrictions
HKSCC NOMINEES LIMITED 1,820,935,022 19.37 Unknown Foreign legal entity
Haier COSMO Co., Ltd. ( 斯奥卡尔海 Domestic non-state-owned
1,258,684,824 13.39 None
)
司公 限有份股 legal entity
Domestic non-state-owned
Haier Group Corporation 1,072,610,764 11.41 None
legal entity
HCH (HK) INVESTMENT
538,560,000 5.73 None Foreign legal entity
MANAGEMENT CO., LIMITED
Hong Kong Securities Clearing Co.,
682,954,688 7.27 None Unknown
Ltd.
China Securities Finance Corporation
182,592,654 1.94 None Unknown
Limited
Qingdao Haier Venture & Investment
Information Co., Ltd. (
业创尔 海岛青 Domestic non-state-owned
172,252,560 1.83 None
legal entity
司 公限有 询咨资投 )
Qingdao Haichuangzhi Management
Consulting Domestic non-state-owned
Enterprise (Limited Partnership) (
岛青 103,210,216 1.10 None
legal entity
）伙合 限有 （业企 询咨理 管智创海 )
ALIBABA INVESTMENT
83,823,993 0.89 None Unknown
LIMITED
China Merchant Bank Co., Ltd. –
Xingquan Herun mixed securities 71,302,442 0.76 None Unknown
investment fund
Shareholdings of top ten shareholders not subject to selling restrictions
Number of tradable shares without Class and number of shares
Name of shareholder
selling restrictions Class Number
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Overseas listed
HKSCC NOMINEES LIMITED 1,820,935,022 1,820,935,022
foreign shares
Haier COSMO Co., Ltd. ( 司公限 有份股 斯奥卡尔海 ) 1,258,684,824 RMB ordinary 1,258,684,824
Haier Group Corporation 1,072,610,764 RMB ordinary 1,072,610,764
Overseas listed
HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED 538,560,000 538,560,000
foreign shares
Haier Group Corporation 682,954,688 RMB ordinary 682,954,688
China Securities Finance Corporation Limited 182,592,654 RMB ordinary 182,592,654
Qingdao Haier Venture & Investment Information Co., Ltd.
172,252,560 RMB ordinary 172,252,560
( )
司公限 有询咨 资投业 创尔海岛青
Qingdao Haichuangzhi Management Consulting Enterprise
(Limited Partnership) (
合限 有（业 企询咨 理管智创 海岛青 103,210,216 RMB ordinary 103,210,216
) ）伙
Overseas listed
ALIBABA INVESTMENT LIMITED 83,823,993 83,823,993
foreign shares
China Merchant Bank Co., Ltd. – Xingquan Herun mixed
71,302,442 RMB ordinary 71,302,442
securities investment fund
Explanation on repurchase account
Not applicable
of top ten shareholders
Explanation on delegated voting rights, entrusted voting
Not applicable
rights, abstained voting rights of the aforesaid shareholders
(1) Haier COSMO Co., Ltd. ( ) is a holding subsidiary of Haier
司 公限有 份股斯 奥卡尔海
Group Corporation. Haier Group Corporation holds 51.20% of its equity. Each of Qingdao
Haier Venture & Investment Information Co., Ltd.(
司 公限有 询咨资 投业创尔 海岛青 ), HCH
Related parties or parties acting in concert among the (HK) INVESTMENT MANAGEMENT CO., LIMITED and Qingdao Haichuangzhi
aforesaid shareholders Management Consulting Enterprise (Limited Partnership) (
限有 （业 企询咨 理管智 创海岛青
）伙合 ) is a party acting in concert with Haier Group Corporation;
(2) The Company is not aware of the existence of any connections of other shareholders.
Explanation of preferential shareholders with
Not applicable
restoration of voting rights and their shareholdings
Note: (1) HKSCC NOMINEES LIMITED is the Banking Collection Account for the shareholders of the Company’s H-shares, which is the original data provided by China Hong
Kong securities registration agency to the Company after the merger according to local market practices and technical settings, not representing the ultimate shareholder. (2) As at the
end of the reporting period, Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) engaged in refinancing and securities lending business, involving a total
of 1,700,000 shares, whilst the ownership of which had not been transferred. The actual number of shares held by it totaled 104,910,216 shares.
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Haier Smart Home Co., Ltd. 2021 Annual Report
Number of shares held by top ten shareholders with selling restrictions and the selling
restrictions
□ Applicable √ Not Applicable
(III) Strategic investors or general legal persons who became the top ten shareholders due to
placing of new shares
□ Applicable √ Not Applicable
IV. CONTROLLING SHAREHOLDER AND THE ULTIMATE CONTROLLER
(I) Status of controlling shareholder
1 Legal person
√ Applicable □ Not Applicable
Name Haier COSMO Co., Ltd. ( 司公限 有份股 斯奥卡尔海 )
Person in charge of the Company or Zhou Yunjie ( 杰云周 )
legal representative
Establishment date 1988–06–30
Principal business Information technology integration and Internet of Things technology services:
industrial automation technology research and development, technical
consulting; research and development and manufacturing of electrical appliances,
electronic products, mechanical products, communication equipment and related
accessories, industrial automation control equipment, computer hardware and
software and auxiliary equipment; import and export business (operated within
the scope approved by MOFCOM); wholesale and retail: domestic commerce
(except for merchandises prohibited by the state); investment in medical industry;
investment advisory services; enterprise management consulting. (For projects
subject to approval, business activities can only be carried out after the approval
by relevant departments)
Shareholding of other controlling and Indirect controlling/participating Company: ‘Qingdao Haier Biomedical Co.,
participating domestic and overseas listed Ltd.’ ） 司公 限 有 份股 疗医 物 生 尔海 岛 青 （ (stock name: ‘Haier Biomedical’,
companies in the reporting period stock code: 688139), Yingkang Life Technology Co., Ltd. ( 份 股技科 命生康盈
)(stock name: ‘Yingkang Life’, stock code: 300143), ‘Qingdao Bank
司公限有
Co., Ltd.’
）司公限 有 份股行 银岛青 （ (stock name: ‘Bank of Qingdao’ , stock
code: 002948 and 3866.HK), ‘China International Capital Corporation Limited’
(stock name: ‘CICC’, stock code: 601995 and 3908.HK) etc.
Other explanation Nil
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2 Natural person
□ Applicable √ Not Applicable
3 Explanation on the absence of controlling shareholders of the Company
□ Applicable √ Not Applicable
4 Explanation on the change in controlling shareholders during the reporting period
□ Applicable √ Not Applicable
5 Framework of the ownership and controlling relationship between the Company and its
controlling shareholder
√ Applicable □ Not Applicable
(II) Status of the ultimate controller
1 Legal person
√ Applicable □ Not Applicable
Name Haier Group Corporation
Person in charge of the Company or Zhou Yunjie ( 杰云周 )
legal representative
Establishment date 1980–03–24
Principal business Technology development, technology consultation, technology transfer and
technology services (including industrial Internet, etc.); data processing; digital
technology, intelligent technology, software technology; research and development,
sales and after-sales service of robots and automation equipment products; logistics
information service; research and development and sales of software technology for
smart home products and solutions systems; manufacturing of household appliances,
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electronic products, communication equipment, electronic computers and
accessories, general machinery, kitchen utensils, industrial robots; wholesale and
retail of domestic commerce (except for the national dangerous prohibition franchise
exclusive control merchandises); import and export business (see the foreign trade
enterprise finalized certification for details); economic and technological
consultation; research and development and transfer of technological achievements;
rental of owned properties. (For projects subject to approval, business activities can
only be carried out after the approval by relevant departments)
Shareholding of other controlling Indirect controlling/participating Company: ‘Qingdao Haier Biomedical Co., Ltd.’
and participating domestic and ）司公限 有份 股疗医 物生尔 海岛青（ (stock name: ‘Haier Biomedical’, stock
overseas listed companies in the code: 688139), Yingkang Life Technology Co., Ltd. ( 司公限 有份股 技科命生康盈 )
reporting period (stock name: ‘Yingkang Life’, stock code: 300143), ‘Qingdao Bank Co., Ltd.’
岛青（
）司 公限有 份股行银 (stock name: ‘Bank of Qingdao’, stock code: 002948 and
3866.HK), China International Capital Corporation Limited’ (stock name: ‘CICC’,
stock code: 601995 and 3908.HK)
Other explanation Nil
2 Natural person
□ Applicable √ Not Applicable
3 Explanation on the absence of ultimate controller of the Company
□ Applicable √ Not Applicable
4 Explanation on the change in control over the Company during the reporting period
□ Applicable √ Not Applicable
5 Framework of ownership and controlling relationship between the Company and the ultimate
controllers
√ Applicable □ Not Applicable
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6 The ultimate controller controls the Company by way of Trust or other assets management
□ Applicable √ Not Applicable
(III) Introduction of controlling shareholders and ultimate controllers
√ Applicable □ Not Applicable
Haier Group Company is registered as a joint-stock enterprise. According to the statement issued
by the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believed that the
enterprise nature of Haier Group Company is a collective owned enterprise.
V. THE PROPORTION OF THE ACCUMULATED NUMBER OF SHARES PLEDGED BY
THE CONTROLLING SHAREHOLDERS OR THE LARGEST SHAREHOLDER OF
THE COMPANY, TOGETHER WITH THE PARTIES ACTING IN CONCERT WITH
THEM TO THE NUMBER OF SHARES OF THE COMPANY HELD BY THEM
AMOUNTS TO MORE THAN 80%
□ Applicable √ Not Applicable
VI. OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDING
PERCENTAGE OVER 10%
□ Applicable √ Not Applicable
VII. EXPLANATION OF REDUCTION OF SHARE RESTRICTIONS
□ Applicable √ Not Applicable
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VIII. SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE
REPORTING PERIOD
√ Applicable □ Not Applicable
Unit and Currency: RMB
Name of share repurchase plan Haier Smart Home Co., Ltd.’s public share proposal in relation to the
partial repurchase of A Shares
Date of disclosure of the share repurchase plan 6 March 2021
Number of shares proposed to repurchased and its 86,960,000 shares, 0.94
percentage to the total share capital (%)
Proposed amount of repurchase RMB 2 -4 billion
Proposed period of repurchase 6 March 2021 – 16 November 2021
Purpose of repurchase Used in entirety to implement the Company’s equity incentive
scheme and/or employee share ownership plans
Amount repurchased (share) 79,492,366
Repurchased amount as a percentage to the underlying
/
shares covered by the equity incentive scheme (%) (if any)
Progress of the Company’s reduction of its holdings of
/
repurchased shares by way of centralised bidding
Note: During the reporting period, the Company also implemented the H-share repurchase scheme. For
details, please refer to "2. Statement on the changes in shares" under "Section VII Changes in Shares
and Information about Shareholders " of this report and the Announcement on the Changes in Shares of
Overseas Listed Foreign Shares (H Shares) of Haier Smart Home Co., Ltd. ( 司公 限有份股 家智 尔海《
H
》 告公的 况情动 变份股） 股 （股资 外市上 外境于关 ) (No.: Lin 2021-049) disclosed by the
Company on 1 July 2021.
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Section VIII Relevant Information of Preferred Shares
□ Applicable √ Not Applicable
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Section IX Relevant Information of Bonds
I. Enterprise bond, corporate bond, and non-financial corporate debt financing instruments
√Applicable □Not Applicable
(1) Enterprise bond
□Applicable √Not Applicable
(2) Corporate bond
□Applicable √Not Applicable
(3) Non-financial corporate debt financing instruments in interbank bond market
√Applicable □Not Applicable
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1. General information on non-financial corporate debt financing
Unit and Currency: RMB100 million
Payment
method Arrangement Whether
Date Expiry Interest
Short Value Bond of Trading of investor Trading risk of
Bond Name Code of date Rate
Name date balance principal venue suitability (if mechanism delisting
issue (%)
and any) exists
interest
Haier Smart
Home Co., Ltd. 20 Haier
13
2020 first Smart 17 July 17 July
012002518 January 30 1.45 One-off None / No
tranche of ultra- Home 2020 2020
2021 Principal
short-term SCP001
and Interbank
financing bond
interest bond
Haier Smart
payment market
Home Co., Ltd. 20 Haier
28 28 24 upon
2020 second Smart
012003094 August August February 25 1.71 maturity None / No
tranche of ultra- Home
2020 2020 2021
short-term SCP002
financing bond
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Response measure in respect of risk of delisting of bonds
□Applicable √Not Applicable
Outstanding bonds past due
□Applicable √Not Applicable
Interest payment of bonds during the reporting period
√Applicable □Not Applicable
Bond Name Explanation on interest payment
Haier Smart Home Co., Ltd. 2020 first tranche the principal and interest have been settled in
of ultra-short-term financing bond full as agreed
Haier Smart Home Co., Ltd. 2020 second the principal and interest have been settled in
tranche of ultra-short-term financing bond full as agreed
2. Trigger and implementation of issuer or investor option terms and investor protection terms
√Applicable □Not Applicable
For the above two tranches of ultra-short-term financing bond, there were trigger mechanisms of
investor protection emergency response in place in case of extraordinary events to protect the interests
of the investors and minimize the adverse impact to the bond market. For details of the investor protection
mechanism, please refer to relevant documents, such as the prospectus of ultra-short-term financing
bonds, published by the Company on public document disclosure platforms for debt financing
instruments, including Chinamoney.com.cn.
During the valid period of the above-mentioned financing bonds, the Company did not experience any
relevant event triggering the investor protection mechanism.
3. Utilization of funds raised as at the end of the reporting period
□Applicable √Not Applicable
Progress of utilizing funds raised in construction projects and its operational efficiency
□Applicable √Not Applicable
Explanation on change in use of funds raised from bonds during the reporting period
□Applicable √Not Applicable
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Oher explanations
□Applicable √Not Applicable
4. Adjustment to credibility assessment results
□Applicable √Not Applicable
Oher explanations
□Applicable √Not Applicable
5. Guarantee, repayment schedule and implementation and change of other repayment guarantee
measures during the reporting period and their impact
□Applicable √Not Applicable
The above two tranches of ultra-short-term financing bond were not guaranteed and the repayment
was primarily funded by monetary assets of the Company. The Company devised prudent and detailed
financial arrangements and plans and delegated the task of repayment of debt financing instruments to
the financial department of the Company to obtain funding for timely repayment, ensure capital to be
deployed as planned and confirm the timely and full settlement of principal and interests of the debt
financing instruments, thereby properly safeguarding the interests of bondholders.
6. Explanation on other information on non-financial corporate debt financing instruments
□Applicable √Not Applicable
(IV) Losses exceeding 10% of net assets as at the end of previous year in the scope of combined
statements during the reporting period
□Applicable √Not Applicable
(V) Overdue interest-bearing liabilities other than bonds as at the end of the reporting period
□Applicable √Not Applicable
(VI) The impacts of breaching the requirements under laws and regulations, our articles of
association, our administrative system for information disclosure and agreements or undertakings
in the prospectuses of bonds on the interests of bond investors during the reporting period
□Applicable √Not Applicable
(VII) Accounting data and financial indicators for the last 2 years as of the end of the reporting
period
√Applicable □Not Applicable
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Unit and Currency: RMB
Key indicators 2021 2020 Yoy change (%)
Net profit after deduction of non-
11,831,272,558.29 6,457,813,335.37 83.21
recurring profit or loss
Liquidity ratio 0.99 1.04 -4.81
Quick ratio 0.67 0.78 -14.10
Debt to assets ratio (%) 63 67 -5.97
Total liabilities ratio of EBITDA 38 32 18.75
Interest coverage ratio 23.34 11.22 108.02
Cash interest coverage ratio 32.47 13.27 144.69
EBITDA interest coverage ratio 30.44 15.06 102.12
II. Convertible corporate bond
√Applicable □Not Applicable
(I) Convertible bond issue
√Applicable □Not Applicable
On 27 October 2020, the CSRC issued “reply to the approval for the issue of overseas listed foreign
shares and convertible corporate bonds by Haier Smart Home Co., Ltd.” ( 有份 股家智尔 海 准核于 关《
》复批 的 券 债 司 公 换 转 可 及 股资 外 市 上 外 境 行 发 司 公 限 ) (Zheng Jian Xu Ke [2020] No. 2768)
(hereafter, the “CSRC Reply”) to approve: (1) Haier Smart Home to issue not more than 2,856,526,138
overseas listed foreign Shares (including Shares to be issued pursuant to the exercise of conversion rights
by the holders of convertible corporate bonds with an amount of not more than HK$8 billion or equivalent
in any foreign currency) with a par value of RMB1, all registered as ordinary shares. Upon the completion
of the issue, Haier Smart Home may be listed on the main board of the Hong Kong Stock Exchange; (2)
With the guarantee of Haier Smart Home, its wholly-owned foreign subsidiary issued overseas corporate
bonds with an amount of not more than HK$8 billion or equivalent in any foreign currency, convertible
into overseas listed foreign shares of the issuer. Pursuant to this and approval from relevant parties,
2,448,279,814 H Shares and convertible bonds were issued by the Company and Harvest International
Company, a wholly-owned subsidiary of the Company in the Hong Kong Stock Exchange on 23
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December 2020, respectively (exchangeable bonds of HK$8 billion issued in November 2017 were
converted into convertible bonds, resulting in valid convertible bonds of HK$7.993 billion, which were
convertible into H Shares of the Company). Please refer to the prospectus and other relevant documents
disclosed by the Company in the Hong Kong market during the reporting period and the Report on
Implementation of Significant Asset Acquisition and Connected Transactions ( 联 关暨买购 产资大 重《
》书告 报况情 施实易交 ) disclosed by the Company on 26 December 2020 for details.
For the above-mentioned bonds, 105.11% of the remaining par value of the bonds were repaid in
a one-off repayment of principal and interest upon maturity.
(II) Convertible bond holders and guarantors for the reporting period
√Applicable □Not Applicable
Harvest International Company
HK$8,000,000,000 Zero Coupon Guaranteed
Name of convertible corporate bond
Convertible Bonds due 2022 (hereafter, “H Share
Convertible Bonds”)
Number of convertible bond holders as at the end
1
of the period
Guarantor of the Company’s convertible bonds Haier Smart Home Co., Ltd.
Top 10 holders of convertible bonds are as follows:
Name of holder of corporate Holdings as at the end of the
Holding percentage (%)
convertible bonds period ($)
HSBC Nominees (Hong Kong)
399,000,000 100
Limited
Note: (1) the aforementioned bonds as at the end of the period are denominated in Hong Kong Dollar;
(2) H Share Convertible Bonds of the Company are held on behalf by HSBC Nominees (Hong Kong)
Limited as the sole legal holder, who is not the ultimate holder. Information on the ultimate holders of
the bonds is only stored in the clearing system and, without the authorization from the ultimate holder,
the clearing system shall not directly provide the detailed list of ultimate bond holders to any cooperating
party.
(III) Conversion of convertible bonds for the reporting period
√Applicable □Not Applicable
Unit and Currency: HKD
Number of convertible Before the Increase/decrease for the conversion After the conversion
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corporate bond conversion Conversion Redemption Resale
H Share Convertible Bonds 7,993,000,000 7,594,000,000 399,000,000
Cumulative conversion of convertible bond for the reporting period
√Applicable □Not Applicable
Currency: HKD
Name of convertible corporate bond H Share Convertible Bonds H Share Convertible Bonds
Amount of conversion for the Reporting
7,594,000,000
Period ($)
Number of conversion for the Reporting
403,210,889
Period (Share)
Cumulative number of conversion
403,210,889
(Share)
Percentage of cumulative number of
conversion to total issued Shares of the 4.47
Company prior to the conversion (%)
Outstanding amount ($) 399,000,000
Percentage of outstanding amount to
total amount of convertible bonds issued 4.99
(%)
(IV) Historical adjustment of conversion price
√Applicable □Not Applicable
Unit and Currency: HKD
Name of convertible corporate bond H Share Convertible Bonds
Date of adjustment to conversion price Media for Explanation on adjustment
Date of disclosure
conversion price (adjusted) disclosure to conversion price
Hong Kong The implementation of the
23 August 2021 18.58 2 September 2021 Stock Company’s 2020 equity
Exchange, etc. distribution plan
Latest conversion price as of the end of the reporting
18.58
period
(V) Liabilities, change in credit and cash arrangements of repayment in the coming year of the
Company
√Applicable □Not Applicable
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As at the end of the reporting period, liabilities of the Company amounted to RMB136,376.5328
million, in which current liabilities amounted to RMB124,796.9546 million and non-current liabilities
amounted to RMB11,579.5782 million.
The Company remains stable in every operating condition with reasonable asset structure and good
credibility and is capable of providing stable and sufficient working capital for the interests of convertible
corporate bonds and repayment of the bonds in the coming year.
(VI) Other information on convertible bonds
√Applicable □Not Applicable
On 23 November 2017, the first 2017 Extraordinary General Meeting of the Company adopted the
Resolution of Qingdao Haier Co., Ltd. on the Scheme for Public Offering of Convertible Corporate
Bonds (the “A-share Convertible Bonds”) upon consideration. Pursuant to the resolution at this general
meeting and the approval documents of the China Securities Regulatory Commission and others, the
Company completed the issue of convertible corporate bonds in December 2018, with a total issue
amount of RMB3,007.49 million. The bonds were listed on 18 January 2019, which is referred to as
“Haier Convertible Bonds” and its bond code is 110049. For details, please refer to the Prospectus for
the Public Offering of A-share Convertible Corporate Bonds by Qingdao Haier Co., Ltd. as disclosed on
14 December 2018, and the Announcement on the Listing of Convertible Corporate Bonds by Qingdao
Haier Co., Ltd. as disclosed on 16 January 2019 and other relevant documents. As the convertible bonds
in 2019 met the redemption conditions and the Board of Directors of the Company decided to exercise
the redemption right after consideration and approval, the Company redeemed the balance of the
convertible bonds in full up to the registered amount on redemption registration date. After the
redemption, the convertible bonds of the Company were delisted on 17 December 2019. At present, the
A-share convertible bonds have ceased to be in existence, but the funds raised from the issuance of the
bonds have not been fully utilized. As of 31 December 2021, RMB2,681.48 million of the funds raised
from A-share convertible bonds have been utilized, with a balance of RMB369.1982 million (the account
balance includes the income generated from the purchase of wealth management products, interest on
demand deposits, foreign exchange gains and losses and the not-yet-invested capital raised). For details
of the use of funds, please refer to the Special Audit Report of Haier Smart Home Co., Ltd. on the Deposit
and Actual Utilization of Funds Raised in 2021, which was disclosed on the same date as this report.
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Section X Financial Report
I. AUDIT REPORT
√ Applicable □ Not Applicable
Audit Report
He Xin Shen Zi. (2022) No.000358
To all shareholders of Haier Smart Home Co., Ltd.:
I. AUDIT OPINION
We have audited the financial statements of Haier Smart Home Co., Ltd. (hereinafter referred to
as the ‘Haier Smart Home Co.’), which comprise the Consolidated and the Company’s Balance Sheet as
at 31 December 2021, the Consolidated and the Company’s Income Statement, the Consolidated and the
Company’s Cash Flow Statement, the Consolidated and the Company’s Statement of Changes in
Shareholders’ Equity for the year 2021, and notes related to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
Consolidated and the Company’s financial position of the Haier Smart Home Co as at 31 December 2021,
and the Consolidated and the Company’s financial performance and cash flow for the year 2021 in
accordance with the requirements of Accounting Standards for Business Enterprises.
II. BASIS OF OUR AUDIT OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities
under those standards are further described in Auditor’s responsibilities for the Audit of Financial
Statements section of the report. We are independent of Haier Smart Home Co in accordance with the
CICPA’s Code of Ethics for Professional Accountants (the Code), and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements for the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We identify the following matters as the key audit matters
that need to be communicated in the audit report:
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Key Audit Matters Audit Response
(I) Provision for impairment of goodwill and intangible assets with indefinite useful lives
Relevant disclosures are included in Note V. 28 Other significant
We mainly implemented the following audit procedures on the
accounting policies and accounting estimates and Note V.19
provisions for the impairment of goodwill and intangible assets
Impairment of long-term assets to the financial statements.
with indefinite useful life:
As of 31 December 2021, the book value of goodwill was
(1) Compared the actual operating results of the related assets
RMB21.827 billion, and the book value of intangible assets with
group with previous year’s forecasted figures, to assess the
indefinite useful lives was RMB2.476 billion, without any provision
reliability of the management forecast on cash flow;
for asset impairment. Whether the provision for impairment of long-
term assets was sufficient had great influence to the financial
(2) Compared the input of cash flow forecast with historical data,
statements.
approved budget and business plan;
Significant management judgments are involved in calculation of
(3) Tested the calculation accuracy of the discounted cash flow
asset group’s recoverable amount, such as revenue growth rate, gross
model;
margin, discount rate, etc.
(4) Assessed the appropriateness of parameters in the cash flow
Provision for impairment of goodwill and intangible assets with
conversion model, such as the discount rate and the perpetual
indefinite useful lives is considered as the key audit matter due to the
growth rate. The assessment is based our understanding of the
significant amount and management judgement involved in
Company’s businesses and the industry.
calculation.
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(II) Provision for impairment of inventory
Relevant disclosures are included in Note VII.8 Inventory to the
financial statements.
We mainly implemented the following audit procedures on the
provision for impairment of inventories:
The Company’s inventories are measured at the lower of cost and net
realizable value. As of 31 December 2021, the inventory balance was
(1) Obtained the calculation table for provision for impairment of
RMB41.229 billion, and the provision for impairment of inventory
inventory of the Company, and reviewed the conditions and
was RMB1.366 billion and the book value was RMB39.863 billion.
aging of the products models stated in the table to see whether
Whether the provision for the impairment of inventories was
they are consistent with the information obtained through
sufficient and accurate had great influence to the financial statements.
physical inventory on a sample basis;
The Company determines the net realizable value of inventory based
(2) Compared the major parameters estimated by management
on the estimated selling price minus the estimated selling expenses
with historical data, and assessed the appropriateness;
and related taxes.
(3) Assessed the selling price estimated by the management, and
Management estimates the selling price based on the status of
checked the inventory against the actual selling price after the
inventory. The estimation process involves significant management
balance sheet date on a sample basis;
judgments such as inventory status, repair rate, discount rate, etc.
(4) Assessed selling expenses and related tax estimated by
Provision for inventories is considered as the key audit matter due to
management and compared with actual amounts incurred.
the significant amount and management judgement involved in
calculation.
(III) Product warranty
Relevant disclosures are included in Note VII. 32 Non-current
liabilities due within one year and Note VII. 39 Estimated liabilities We mainly implemented the following audit procedures on the
to the financial statements. estimated liabilities:
Estimated liabilities of the Company are mainly accrued due to (1) Obtained the calculation table on provisions of the
current obligations arising from product warranty. As of 31 management;
December 2021, the balance of the estimated liabilities and non-
current liabilities due within one year related to product warranty was (2) Compared the main parameters estimated by management
RMB3.681 billion, and whether the provision for warranty was with historical data;
sufficient and accurate had great influence to the financial statements.
(3) Tested the accuracy of the calculation on estimated liabilities;
Estimated liabilities for product warranty of the Company were
measured in accordance with the best estimate of the cost to fulfill (4) Compared and analyzed the calculation results of the
the relevant current obligations. estimated liabilities and the Company’s actual operation;
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Calculation of the product warranty involves management’s
significant judgments based on historical experience, such as:
replacement rate, repair rate, and loss due to disassemble product.
Estimated liabilities are considered as the key audit matters due to the
significant amount and management judgement involved in
calculation.
IV. OTHER INFORMATION
The management of Haier Smart Home Co (hereinafter referred to as the “Management”) is
responsible for other information. Other information includes the information covered in the 2021 annual
report of Haier Smart Home Co, but does not include the financial statements and our audit reports.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management is responsible for the preparation of the financial statements that give a true and
fair view in accordance with the requirements as set out in the Accounting Standards for Business
Enterprises, and for such internal control as necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management are responsible for assessing the ability of
Haier Smart Home Co to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the management either intends to
liquidate Haier Smart Home Co or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of
Haier Smart Home Co.
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VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an audit report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with auditing standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also perform the following tasks:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsible to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used by the Management and the
reasonableness of accounting estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cause significant doubt on the ability of Haier Smart
Home Co to continue as a going concern. If we conclude that a material uncertainty exists, we
are required by the auditing standards to draw attention in our audit report to the related
disclosures in the financial statements or; if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit
report. However, future events or conditions may cause Haier Smart Home Co to cease to
continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether
the financial statements represent the underlying transactions and events in a manner that
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achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within Haier Smart Home Co to express an opinion on the financial
statements. We are responsible for the direction, supervision and performance of the group audit,
and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters
that are of most significance in the audit of the financial statements of the current period and therefore
constitute the key audit matters. We describe these matters in our audit report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our audit report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Hexin Certified Public Accountants LLP
Certified Public Accountant: Zhaobo (Engagement Partner)
Certified Public Accountant: Wang Lin
Jinan, China
30 March 2022
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II. FINANCIAL STATEMENTS
Consolidated Balance Sheet
31 December 2021
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 31 December 2021 31 December 2020
Current assets:
Monetary funds VII.1 45,857,170,275.40 46,467,732,459.51
Provision of settlement fund
Funds lent
Financial assets held for trading VII.2 2,786,075,529.09 2,165,192,497.83
Derivative financial assets VII.3 79,819,974.01 77,839,006.63
Bills receivable VII.4 13,354,791,068.29 14,136,349,754.34
Accounts receivable VII.5 14,631,018,397.43 15,930,024,286.67
Financing receivables
Prepayments VII.6 857,233,123.00 765,822,151.70
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables VII.7 1,955,082,163.25 1,717,691,799.32
Including: Interest receivables 294,379,438.82 322,473,254.91
Dividends receivables 4,915,409.42
Financial assets purchased under resale
agreements
Inventories VII.8 39,863,171,040.31 29,446,973,404.75
Contract assets VII.9 304,434,294.70 263,412,927.58
Assets held for sale
Non-current assets due in one year
Other current assets VII.10 3,918,981,117.19 3,284,857,281.38
Total current assets 123,607,776,982.67 114,255,895,569.71
Non-current assets:
Loans and advances granted
Debt investments
Other debt investments
Long-term receivables 308,998,755.30 330,588,978.97
Long-term equity investments VII.11 23,232,200,859.25 21,567,658,450.89
Investments in other equity instruments VII.12 4,848,709,438.96 2,659,025,265.54
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Other non-current financial assets
Investment properties VII.13 24,964,888.48 28,387,002.81
Fixed assets VII.14 22,307,089,801.15 20,911,790,241.39
Construction in progress VII.15 4,183,263,398.79 3,610,195,094.37
Biological assets for production
Oil and gas assets
Right-of-use assets VII.16 2,734,016,745.17 2,839,858,259.27
Intangible assets VII.17 9,549,607,918.13 10,018,145,894.06
Development cost VII.18 227,892,229.13 167,746,724.13
Goodwill VII.19 21,827,103,060.76 22,518,460,337.64
Long-term prepaid expenses VII.20 588,676,388.91 456,354,639.51
Deferred income tax assets VII.21 1,854,809,732.90 2,208,301,258.25
Other non-current assets VII.22 2,164,384,013.14 1,925,761,560.17
Total non-current assets 93,851,717,230.07 89,242,273,707.00
Total assets 217,459,494,212.74 203,498,169,276.71
Current liabilities:
Short-term borrowings VII.23 11,226,212,134.39 7,687,908,165.88
Borrowings from central bank
Funds borrowed
Financial liabilities held for trading VII.24 6,294,014.40 26,952,508.66
Derivative financial liabilities VII.25 80,212,433.24 239,582,532.90
Bills payable VII.26 25,023,238,406.72 21,236,057,053.67
Accounts payables VII.27 42,344,857,144.49 36,309,048,800.85
Receipts in advance
Contract liabilities VII.28 10,016,870,340.44 6,269,584,417.32
Disposal of repurchased financial assets
Absorbing deposit and deposit in inter-bank
market
Customer deposits for trading in securities
Amounts due to issuer for securities
underwriting
Payables for staff’s remuneration VII.29 4,113,881,586.96 3,763,036,123.19
Taxes payable VII.30 2,603,683,461.84 2,401,122,732.07
Other payables VII.31 17,524,160,065.70 17,063,294,004.33
Including: Interest payables
Dividends payables 10,639,313.22
Fees and commissions payable
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Haier Smart Home Co., Ltd. 2021 Annual Report
Reinsurance Accounts payables
Liabilities held for sale
Non-current liabilities due within one year VII.32 9,623,014,847.76 7,522,724,913.40
Other current liabilities VII.33 2,234,530,124.82 6,891,109,386.79
Total current liabilities 124,796,954,560.76 109,410,420,639.06
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings VII.34 3,038,573,824.53 11,821,416,259.81
Bonds payable VII.35 334,730,048.82 6,713,501,050.27
Including: Preference shares
Perpetual bonds
Lease liabilities VII.36 1,960,894,981.47 2,072,702,352.68
Long-term payables VII.37 99,602,707.76 98,203,261.27
Long-term payables for staff’s remuneration VII.38 1,173,151,761.64 1,245,775,024.35
Estimated liabilities VII.39 1,948,565,477.11 1,442,844,036.73
Deferred income VII.40 852,794,567.20 633,761,669.48
Deferred income tax liabilities VII.21 2,121,803,173.83 1,900,401,265.97
Other non-current liabilities 49,461,683.90 27,033,458.13
Total non-current liabilities 11,579,578,226.26 25,955,638,378.69
Total liabilities 136,376,532,787.02 135,366,059,017.75
Owners’ equity (or shareholders’ equity):
Paid-in capital (or share capital) VII.41 9,398,704,530.00 9,027,846,441.00
Other equity instruments VII.42 118,017,507.59 2,364,195,333.79
Including: Preference shares
Perpetual bonds
Capital reserve VII.43 22,549,345,568.94 15,007,475,607.40
Less: treasury stock 2,424,038,819.70 28,896,550.65
Other comprehensive income VII.44 -1,176,851,699.92 -1,046,216,729.06
Special reserve
Surplus reserve VII.45 3,438,615,909.84 3,045,334,539.60
General risk provisions
Undistributed profits VII.46 47,907,134,328.80 38,467,787,059.79
Total equity attributable to owners (or
79,810,927,325.55 66,837,525,701.87
shareholders) of the Parent Company
Minority shareholders’ interests 1,272,034,100.17 1,294,584,557.09
Total owners’ equity (or shareholders’
81,082,961,425.72 68,132,110,258.96
equity)
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Haier Smart Home Co., Ltd. 2021 Annual Report
Total liabilities and owners’ equity (or
217,459,494,212.74 203,498,169,276.71
shareholders’ equity)
Person in charge of the Company: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Balance Sheet of the Parent Company
31 December 2021
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 31 December 2021 31 December 2020
Current Assets:
Monetary funds 4,043,535,735.48 8,286,549,909.64
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable XVIII.1 546,532,442.90 5,491,536,070.42
Financing receivables
Prepayments 275,052,864.92 295,050,991.15
Other receivables XVIII.2 16,245,280,168.41 3,906,373,387.61
Including: Interest receivables 51,632,471.99 38,582,434.11
Dividends receivables 3,615,840,000.00
Inventories 1,139,135.32 73,974,562.87
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 337,476,209.01 459,309,301.58
Total current assets 21,449,016,556.04 18,512,794,223.27
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments XVIII.3 52,513,760,277.77 52,290,227,070.21
Investments in other equity instruments 1,615,450,032.92 804,334,894.58
Other non-current financial assets
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Investment properties
Fixed assets 179,789,817.34 196,529,502.16
Construction in progress 17,569,516.17 8,319,418.36
Biological assets for production
Oil and gas assets
Right-of-use assets 1,217,186.49 2,076,376.95
Intangible assets 55,171,485.39 62,103,457.66
Development cost
Goodwill
Long-term prepaid expenses 3,781,398.54 4,208,602.97
Deferred income tax assets 159,338,211.77 154,335,216.49
Other non-current assets 803,323,404.28 26,894,836.99
Total non-current assets 55,349,401,330.67 53,549,029,376.37
Total assets 76,798,417,886.71 72,061,823,599.64
Current liabilities:
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables 183,690,889.86 248,172,640.78
Receipts in advance
Contract liabilities 12,605,139.93 8,716,599.17
Payables for staff’s remuneration 12,323,670.21 86,872,482.44
Taxes payable 1,747,023.87 55,756,358.98
Other payables 34,484,355,762.60 29,642,219,320.03
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
877,995.65 20,840,106.80
year
Other current liabilities 5,420,156.55 5,538,254,928.01
Total current liabilities 34,701,020,638.67 35,600,832,436.21
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
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Lease liabilities 877,995.63
Long-term payable
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income 19,270,000.00 24,250,000.00
Deferred income tax liabilities 448,965,654.25 219,544,771.62
Other non-current liabilities
Total non-current liabilities 468,235,654.25 244,672,767.25
Total liabilities 35,169,256,292.92 35,845,505,203.46
Owners’ equity (or Shareholders’ equity):
Paid-in capital (or share capital) 9,398,704,530.00 9,027,846,441.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 25,802,279,483.13 20,408,352,380.95
Less: treasury stock 1,495,170,675.08
Other comprehensive income 621,302,944.83 -10,030,704.15
Special reserve
Surplus reserve 2,833,469,684.39 2,440,188,314.15
Undistributed profits 4,468,575,626.52 4,349,961,964.23
Total owners’ equity (or shareholders’
41,629,161,593.79 36,216,318,396.18
equity)
Total liabilities and owners’ equity (or
76,798,417,886.71 72,061,823,599.64
shareholders’ equity)
Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong
WeiPerson in charge of accounting department: Ying Ke
Consolidated Profit Statement
January-December 2021
Unit and Currency: RMB
Items Notes 2021 2020
I. Total operating revenue 227,556,143,618.17 209,723,430,081.03
Including: Operating revenue VII.47 227,556,143,618.17 209,723,430,081.03
Interest income
Insurance premiums earned
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Fee and commission income
II. Total cost of operations 213,331,476,543.09 199,875,942,230.54
Including: Operating cost VII.47 156,482,657,366.94 147,471,922,284.89
Interest expenses
Fee and commission expenses
Insurance withdrawal payment
Net payment from indemnity
Net provisions withdrew for insurance
contract liability
Insurance policy dividend paid
Reinsurance cost
Taxes and surcharges VII.48 806,978,590.56 660,602,624.67
Selling expenses VII.49 36,553,667,004.06 33,641,711,147.72
Administrative expenses VII.50 10,444,475,658.24 10,052,645,415.72
R&D expenses VII.51 8,357,332,946.25 6,852,861,422.32
Financial expenses VII.52 686,364,977.04 1,196,199,335.22
Including: Interest expenses 712,448,120.18 1,327,091,393.08
Interest income 564,584,788.99 486,204,314.18
Add: Other income VII.53 957,500,458.03 1,150,848,182.38
Investment income (losses are represented by
VII.54 2,403,102,640.29 4,060,104,212.78
‘-’)
Including: investment income of associates and
joint ventures
Income generated from the derecognition of
financial assets measured at amortized cost
Exchange gain (losses are represented by ‘-’)
Gains on net exposure hedges (losses are
represented by ‘-’)
Income from change in fair value (losses
VII.55 119,277,623.85 62,629,747.80
are represented by ‘-’)
Loss on credit impairment (losses are
VII.56 -520,299,915.42 -166,380,605.76
represented by ‘-’)
Loss on assets impairment (losses are
VII.57 -1,418,753,618.82 -1,335,630,451.94
represented by ‘-’)
Gain from disposal of assets (losses are
VII.58 110,983,720.04 -12,807,590.96
represented by ‘-’)
III. Operating profit (losses are represented by ‘-’) 15,876,477,983.05 13,606,251,344.79
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Add: non-operating income VII.59 198,793,345.45 197,945,472.39
Less: non-operating expenses VII.60 159,240,779.44 241,918,187.91
IV. Total profit (total losses are represented by ‘-’) 15,916,030,549.06 13,562,278,629.27
Less: income tax expense VII.61 2,698,963,370.55 2,233,126,505.02
V. Net profit (net losses are represented by ‘-’) 13,217,067,178.51 11,329,152,124.25
(1) Classification by continuous operation
1. Net profit from continuous operation
13,217,067,178.51 11,329,152,124.25
(net losses are represented by ‘-’)
2. Net profit from discontinued
operation (net losses are represented by
‘-’)
(2) Classification by ownership of the equity
1. Net profit attributable to shareholders
of the Parent Company (net losses are 13,067,038,271.85 8,883,129,055.16
represented by ‘-’)
2. Profit or loss attributable to minority
shareholders (net losses are represented 150,028,906.66 2,446,023,069.09
by ‘-’)
VI. Other comprehensive income, net of tax VII.62 -148,110,004.96 -2,576,197,838.54
(I) Other comprehensive income attributable to
-132,249,780.03 -2,537,334,822.50
owners of the Parent Company, net of tax
1. Other comprehensive income that cannot be
1,201,363,091.13 -73,070,215.55
reclassified into the profit or loss
(1) Changes arising from re-measurement
36,214,421.81 -23,030,495.09
of defined benefit plans
(2) Other comprehensive income that
cannot be transferred into profit or loss
under equity method
(3) Changes in fair value of investments in
1,165,148,669.32 -50,039,720.46
other equity instruments
(4) Changes in fair value of credit risks of
the enterprise
2. Other comprehensive income to be reclassified
-1,333,612,871.16 -2,464,264,606.95
into the profit or loss
(1) Other comprehensive income that can be
transferred into profit or loss under equity -50,414,905.68 -368,885,317.13
method
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Haier Smart Home Co., Ltd. 2021 Annual Report
(2) Changes in fair value of other debt
Investments
(3) Reclassified financial assets that are credited
to other comprehensive income
(4) Credit impairment provision for other debt
investments
(5) Reserve for cash flow hedging 102,858,281.74 -104,122,543.00
(6) Exchange differences on translation of
financial statements denominated in -1,386,056,247.22 -1,991,256,746.82
foreign currencies
(7) Others
(II) Other comprehensive income attributable to
-15,860,224.93 -38,863,016.04
minority shareholders, net of tax
VII. Total comprehensive income 13,068,957,173.55 8,752,954,285.71
(I) Total comprehensive income attributable to
12,934,788,491.82 6,345,794,232.66
the owners of Parent Company
(II) Total comprehensive income attributable to the
134,168,681.73 2,407,160,053.05
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) XVIII.1 1.41 1.34
(II) Diluted earnings per share (RMB/share) XVIII.1 1.40 1.31
Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Profit Statement of the Parent Company
January-December 2021
Unit and Currency: RMB
Items Notes 2021 2020
I. Operating income XVIII.4 353,798,248.52 7,367,641,013.39
Less: operating cost XVIII.4 315,357,106.14 6,067,653,816.35
Taxes and surcharges 1,315,011.31 25,848,932.07
Selling expenses 8,325,070.07 395,396,033.18
Administration expenses 126,563,950.19 308,014,697.80
R&D expenses 29,294,763.78 301,514,824.27
Financial expenses -41,920,112.37 40,412,640.04
Including: interest expenses 7,328,997.57 96,677,861.04
Interest income 56,558,735.54 60,291,871.74
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Haier Smart Home Co., Ltd. 2021 Annual Report
Add: other income 45,491,181.80 57,446,351.54
Investment income (losses are represented by ‘-’) XVIII.5 3,918,401,070.56 4,283,510,237.79
Including: investment income of associates and
joint ventures
Derecognition income on financial assets measured
at amortized cost
Gains on net exposure hedges (losses are
represented by ‘-’)
Income from change in fair value (losses are
represented by ‘-’)
Loss on credit impairment (losses are represented
187,273.03 363,022.59
by ‘-’)
Loss on assets impairment (losses are represented
-41,019,305.94
by ‘-’)
Gain from disposal of assets (losses are represented
40,509,776.77
by ‘-’)
II. Operating profit (losses are represented by ‘-’) 3,919,451,761.56 4,529,100,375.66
Add: non-operating income 855,197.78 816,497.38
Less: non-operating expenses 53,850.65 1,544,188.81
III. Total profit (total losses are represented by ‘-’) 3,920,253,108.69 4,528,372,684.23
Less: income tax expenses -12,560,593.69 628,301,342.84
IV. Net profit (net losses are represented by ‘-’) 3,932,813,702.38 3,900,071,341.39
(I) Net profit from continuous operations (net
3,932,813,702.38 3,900,071,341.39
losses are represented by ‘-’)
(II) Net profit from discontinued operations
(net losses are represented by ‘-’)
V. Other comprehensive income, net of tax 631,333,648.98 -21,108,181.60
(I) Other comprehensive income that cannot
608,336,353.75 -954,819.46
be reclassified into the profit or loss
1. Changes arising from re-measurement
of defined benefit plans
2. Other comprehensive income that
cannot be transferred into profit or loss under equity
method
3. Changes in fair value of investments in
608,336,353.75 -954,819.46
other equity instruments
4. Changes in fair value of credit risks of
the enterprise
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Haier Smart Home Co., Ltd. 2021 Annual Report
(II) Other comprehensive income to be
22,997,295.23 -20,153,362.14
reclassified into the profit or loss
1. Other comprehensive income that can
be transferred into profit or loss under equity 22,997,295.23 -20,153,362.14
method
2. Changes in fair value of other debt
investments
3. Reclassified financial assets that are
credited to other comprehensive income
4. Credit impairment provision for other
debt investments
5. Reserve for cash flow hedging
6. Exchange differences on translation of
financial statements denominated in foreign
currencies
7. Others
VI. Total comprehensive income 4,564,147,351.36 3,878,963,159.79
VII. Earnings per share:
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share (RMB/share)
Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Cash Flow Statement
January-December 2021
Unit and Currency: RMB
Items Notes 2021 2020
I. Cash flow from operating activities:
Cash received from the sale of goods and
259,627,755,397.89 207,932,234,800.67
rendering services
Net increase in distributor and inter-bank deposits
Net increase in borrowing from the central bank
Net cash increase in borrowing from other
financial institutes
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Haier Smart Home Co., Ltd. 2021 Annual Report
Cash received from premiums under original
insurance contract
Net cash received from reinsurance business
Net increase in deposits of policy holders and
investment
Cash received from interest, fee and commissions
Net increase in cash borrowed
Net increase in cash received from repurchase
operation
Net cash received from customer deposits for
trading in securities
Refunds of taxes 1,759,232,414.94 1,028,615,379.56
Cash received from other related operating
VII.63 1,881,414,522.08 1,538,619,649.49
activities
Sub-total of cash inflows from operating
263,268,402,334.91 210,499,469,829.72
activities
Cash paid on purchase of goods and services 180,877,179,178.59 141,661,861,466.13
Net increase in loans and advances of distributors
Net increase in deposits in the PBOC and inter
bank
Cash paid for compensation payments under
original insurance contact
Net increase in cash lent
Cash paid for interest, bank charges and
commissions
Cash paid for insurance policy dividend
Cash paid to and on behalf of employees 24,366,034,563.46 22,098,193,430.86
Cash paid for all types of taxes 10,068,357,244.98 8,022,305,290.30
Cash paid to other operation related activities VII.64 24,827,190,930.16 21,107,595,810.79
Sub-total of cash outflows from operating
240,138,761,917.19 192,889,955,998.08
activities
Net cash flow from operating activities VII.68 23,129,640,417.72 17,609,513,831.64
II. Cash flow from investing activities:
Cash received from recovery of investments 6,687,038,126.49 7,645,625,690.38
Cash received from return on investments 699,858,754.46 616,767,534.63
Net cash received from the disposal of fixed
289,831,105.17 324,276,028.59
assets, intangible assets and other long-term assets
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Haier Smart Home Co., Ltd. 2021 Annual Report
Net cash received from disposal of subsidiaries
861,212,858.63
and other operating entities
Other cash received from investment activities 187,717,849.30
Sub-total of cash inflows from investing
7,676,727,986.12 9,635,599,961.53
activities
Cash paid on purchase of fixed assets, intangible
7,372,428,832.38 7,783,249,528.98
assets and other long-term assets
Cash paid for investments 8,151,830,046.62 6,816,360,337.69
Net increase in secured loans
Net cash paid on acquisition of subsidiaries and
309,348,956.95
other operating entities
Other cash paid on investment activities VII.65 219,292,645.55 317,462.62
Sub-total of cash outflows from investing
15,743,551,524.55 14,909,276,286.24
activities
Net cash flow from investing activities -8,066,823,538.43 -5,273,676,324.71
III. Cash flow from financing activities:
Cash received from capital contributions 41,513,900.00 1,331,296,569.70
Including: cash received from capital
contributions by minority shareholders of
subsidiaries
Cash received from borrowings 12,051,534,836.66 28,732,212,245.36
Other cash received from financing activities VII.66 1,091,077.43 14,082,437.17
Sub-total of cash inflows from financing
12,094,139,814.09 30,077,591,252.23
activities
Cash paid on repayment of loans 19,550,437,489.34 23,508,653,041.48
Cash paid on distribution of dividends, profits or
4,017,661,595.21 4,290,278,773.42
repayment of interest expenses
Including: dividend and profit paid to minority
shareholders by subsidiaries
Other cash paid to financing activities VII.67 4,167,468,873.11 3,304,582,534.88
Sub-total of cash outflows from financing
27,735,567,957.66 31,103,514,349.78
activities
Net cash flow from financing activities -15,641,428,143.57 -1,025,923,097.55
IV. Effect of fluctuations in exchange rates on cash
-105,423,623.70 -636,852,569.96
and cash equivalents
V. Net increase in cash and cash equivalents -684,034,887.98 10,673,061,839.42
Add: balance of cash and cash equivalents at the
VII.69 45,641,535,671.08 34,968,473,831.66
beginning of the period
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Haier Smart Home Co., Ltd. 2021 Annual Report
VI. Balance of cash and cash equivalents at the end
VII.69 44,957,500,783.10 45,641,535,671.08
of the period
Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Cash Flow Statement of the Parent Company
January-December 2021
Unit and Currency: RMB
Items Notes 2021 2020
I. Cash flow from operating activities:
Cash received from the sale of goods and rendering of
5,372,947,747.51 3,603,881,541.71
services
Refunds of taxes 21,335,747.71 24,537,663.34
Other cash received from operating activities 68,763,057.13 75,205,449.89
Sub-total of cash inflows from operating activities 5,463,046,552.35 3,703,624,654.94
Cash paid on purchase of goods and services 129,965,401.55 10,101,283,560.88
Cash paid to and on behalf of employees 111,120,434.68 515,906,240.68
Cash paid for all types of taxes 45,674,576.87 235,780,589.82
Other cash paid to operation activities 63,480,813.55 141,423,832.28
Sub-total of cash outflows from operating activities 350,241,226.65 10,994,394,223.66
Net cash flow from operating activities 5,112,805,325.70 -7,290,769,568.72
II. Cash flow from investing activities:
Cash received from recovery of investments 660,600,000.00 4,234,131,825.64
Cash received from return on investments 251,846,511.15 4,203,101,788.48
Net cash received from the disposal of fixed assets,
40,244,472.35
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and other
operating entities
Other cash received from investment activities
Sub-total of cash inflows from investing activities 952,690,983.50 8,437,233,614.12
Cash paid on purchase of fixed assets, intangible assets
39,508,054.66 107,123,777.09
and other long-term assets
Cash paid for investments 710,121,200.00 2,159,770,900.00
Net cash paid on acquisition of subsidiaries and other
operating entities
Other cash paid on investment activities 155,218,996.43 217,500,000.00
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Haier Smart Home Co., Ltd. 2021 Annual Report
Sub-total of cash outflows from investing activities 904,848,251.09 2,484,394,677.09
Net cash flow from investing activities 47,842,732.41 5,952,838,937.03
III. Cash flow from financing activities:
Cash received from capital injections
Cash received from borrowings 10,000,000,000.00
Other cash received from financing activities 2,877,023,451.15 1,071,070,663.49
Sub-total of cash inflows from financing activities 2,877,023,451.15 11,071,070,663.49
Cash paid on repayment of borrowings 5,520,000,000.00 4,500,000,000.00
Cash paid on distribution of dividends, profits or
3,463,452,916.42 2,528,459,679.57
repayment of interest expenses
Other cash paid on financing activities 3,296,944,621.19 42,665,759.89
Sub-total of cash outflows from financing activities 12,280,397,537.61 7,071,125,439.46
Net cash flow from financing activities -9,403,374,086.46 3,999,945,224.03
IV. Effect of fluctuations in exchange rates on cash and cash
-288,145.81 128,500.51
equivalents
V. Net increase in cash and cash equivalents -4,243,014,174.16 2,662,143,092.85
Add: balance of cash and cash equivalents at the
8,286,549,909.64 5,624,406,816.79
beginning of the period
VI. Balance of cash and cash equivalents at the end of the
4,043,535,735.48 8,286,549,909.64
period
Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
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Haier Smart Home Co., Ltd. 2021 Annual Report
Consolidated Statement of Changes in Owner’s Equity
January-December 2021
Unit and Currency: RMB
2021
Equity attributable to owners of the Parent Company
Minority Total
Items
Paid-in Other equity instruments shareholders’ owners’
Less: Other General
capital (or Capital Surplus Undistributed
Preference Perpetual treasury comprehensive risk interests equity
share Others reserve reserve profits
shares bonds stock income provision
capital)
I. Closing
balance for the 9,027,846,441.00 2,364,195,333.79 15,009,027,407.40 28,896,550.65 -1,046,216,729.06 3,045,334,539.60 - 38,445,132,172.47 1,294,584,557.09 68,111,007,171.64
previous year
Add: changes in
accounting
policies
Error
correction for
prior period
Business
combination
-1,551,800.00 22,654,887.32 21,103,087.32
under common
control
Others
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Haier Smart Home Co., Ltd. 2021 Annual Report
II. Opening
balance for the 9,027,846,441.00 2,364,195,333.79 15,007,475,607.40 28,896,550.65 -1,046,216,729.06 3,045,334,539.60 38,467,787,059.79 1,294,584,557.09 68,132,110,258.96
current year
III.
Increase/decrease
for the current
370,858,089.00 -2,246,177,826.20 7,541,869,961.54 2,395,142,269.05 -130,634,970.86 393,281,370.24 9,439,347,269.01 -22,550,456.92 12,950,851,166.76
period (decrease
is represented by
‘-’)
(I) Total
comprehensive -132,249,780.03 13,067,038,271.85 134,168,681.73 13,068,957,173.55
income
(II) Capital
injection and
370,858,089.00 -2,246,177,826.20 7,542,034,703.88 2,395,142,269.05 - -93,710,059.35 3,177,862,638.28
reduction by
owners
1. Ordinary
shares invested -136,417,222.36 -93,710,059.35 -230,127,281.71
by owners
2. Capital
contribution by 403,210,889.00 -2,246,177,826.20 8,211,218,327.05 6,368,251,389.85
holders of other
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equity
instruments
3. Share-based
payment
261,635,166.10 261,635,166.10
included in
owners’ equity
4. Others -32,352,800.00 -794,401,566.91 2,395,142,269.05 -3,221,896,635.96
(III) Profit
- 393,281,370.24 -3,804,025,640.63 -63,252,252.15 -3,473,996,522.54
distribution
1. Withdrawal of
393,281,370.24 -393,281,370.24 -
surplus reserves
2. Withdrawal of
general risk -
provision
3. Distribution to
owners (or -3,410,744,270.39 -63,252,252.15 -3,473,996,522.54
shareholders)
4. Others
(IV) Internal
transfer of
owner’s equity
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1. Transfer of
capital reserves
into capital (or
share capital)
2. Transfer of
surplus reserves
into capital (or
share capital)
3. Surplus
reserves used for -
remedying loss
4. Changes in
defined benefit
plans carried
forward to
retained earnings
5. Other
comprehensive
income carried
forward to
retained earnings
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6. Others
(V) Special
reserve
1. Withdrawal
for the period
2. Utilization for
the period
(VI) Others -164,742.34 1,614,809.17 176,334,637.79 243,172.85 178,027,877.47
IV. Closing
balance for the 9,398,704,530.00 - - 118,017,507.59 22,549,345,568.94 2,424,038,819.70 -1,176,851,699.92 3,438,615,909.84 - 47,907,134,328.80 1,272,034,100.17 81,082,961,425.72
period
2020
Equity attributable to owners of the Parent Company
Minority
Total owners’
Items Other equity instruments
Paid-in Less: Other General shareholders’
Capital Surplus Undistributed equity
capital (or Preference Perpetual treasury comprehensive risk
reserve reserve profits interests
Others
share capital) stock income provision
shares bonds
I. Closing
balance for the 6,579,566,627.00 431,424,524.07 4,435,890,845.47 1,317,988,619.66 2,655,327,405.46 - 32,468,121,744.26 17,101,540,502.01 64,989,860,267.93
previous year
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Add: changes in
accounting
policies
Error
correction for
prior period
Business
combination
-1,551,800.00 16,119,040.35 14,567,240.35
under common
control
Others -
II. Opening
balance for the 6,579,566,627.00 431,424,524.07 4,434,339,045.47 1,317,988,619.66 2,655,327,405.46 - 32,484,240,784.61 17,101,540,502.01 65,004,427,508.28
current year
III.
Increase/decrease
for the current
2,448,279,814.00 1,932,770,809.72 10,573,136,561.93 28,896,550.65 -2,364,205,348.72 390,007,134.14 - 5,983,546,275.18 -15,806,955,944.92 3,127,682,750.68
period (decrease
is represented by
‘-’)
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(I) Total
comprehensive -2,537,334,822.50 8,883,129,055.16 2,407,160,053.05 8,752,954,285.71
income
(II) Capital
injection and
2,448,279,814.00 1,932,770,809.72 10,732,277,435.61 28,896,550.65 13,988,600.10 -17,488,531,204.72 -2,390,111,095.94
reduction by
owners
1. Ordinary
shares invested 2,448,279,814.00 12,696,003,281.09 28,896,550.65 -17,488,531,204.72 -2,373,144,660.28
by owners
2. Capital
contribution by
holders of other 1,932,770,809.72 -1,936,586,159.16 -3,815,349.44
equity
instruments
3. Share-based
payment
included in
owners’ equity
4. Others -27,139,686.32 13,988,600.10 -13,151,086.22
(III) Profit
390,007,134.14 -2,857,344,619.27 -725,584,793.25 -3,192,922,278.38
distribution
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1. Withdrawal of
390,007,134.14 -390,007,134.14
surplus reserves
2. Withdrawal of
general risk
provision
3. Distribution to
owners (or -2,467,337,485.13 -725,584,793.25 -3,192,922,278.38
shareholders)
4. Others
(IV) Internal
transfer of -
owner’s equity
1. Transfer of
capital reserves
into capital (or
share capital)
2. Transfer of
surplus reserves
into capital (or
share capital)
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3. Surplus
reserves used for
remedying loss
4. Changes in
defined benefit
plans carried
forward to
retained earnings
5. Other
comprehensive
income carried
forward to
retained earnings
6. Others
(V) Special
reserve
1. Withdrawal
for the period
2. Utilization for
the period
(VI) Others -159,140,873.68 159,140,873.68 -42,238,160.71 -42,238,160.71
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IV. Closing
balance for the 9,027,846,441.00 2,364,195,333.79 15,007,475,607.40 28,896,550.65 -1,046,216,729.06 3,045,334,539.60 - 38,467,787,059.79 1,294,584,557.09 68,132,110,258.96
period
Legal representative of the Company:LiangHaishan Person in charge of accounting function:Gong Wei Person in charge of accounting department:YingKe
Statement of Changes in Owners’ Equity of the Parent Company
January-December 2021
Unit and Currency: RMB
2021
Other equity instruments Other
Paid-in Less:
Items Capital Special Surplus Undistributed Total owners’
capital (or Preference Perpetual treasury comprehens
Others reserve reserve reserve profits equity
share capital) shares bonds stock
ive income
I. Closing balance for the previous year 9,027,846,441.00 20,408,352,380.95 -10,030,704.15 2,440,188,314.15 4,349,961,964.23 36,216,318,396.18
Add: changes in accounting policies
Error correction for prior period
Others
II. Opening balance for the current year 9,027,846,441.00 20,408,352,380.95 -10,030,704.15 2,440,188,314.15 4,349,961,964.23 36,216,318,396.18
III. Increase/decrease for the current period (decrease
370,858,089.00 5,393,927,102.18 1,495,170,675.08 631,333,648.98 393,281,370.24 118,613,662.29 5,412,843,197.61
is represented by ‘-’)
(I) Total comprehensive income 631,333,648.98 3,932,813,702.38 4,564,147,351.36
(II) Capital injection and reduction by owners 370,858,089.00 5,393,927,102.18 1,495,170,675.08 4,269,614,516.10
1. Ordinary shares invested by owners -17,642,864.51 -17,642,864.51
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2. Capital contribution by holders of other equity
403,210,889.00 5,965,040,500.85 6,368,251,389.85
instruments
3. Share-based payment included in owners’ equity 245,199,533.31 245,199,533.31
4. Others -32,352,800.00 -798,670,067.47 1,495,170,675.08 - -2,326,193,542.55
(III) Profit distribution 393,281,370.24 -3,814,200,040.09 -3,420,918,669.85
1. Withdrawal of surplus reserves 393,281,370.24 -393,281,370.24 -
2. Distribution to owners (or shareholders) -3,420,918,669.85 -3,420,918,669.85
3. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or share
capital)
2. Transfer of surplus reserves into capital (or share
capital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward to
retained earnings
5. Other comprehensive income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
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(VI) Others
IV. Closing balance for the period 9,398,704,530.00 25,802,279,483.13 1,495,170,675.08 621,302,944.83 - 2,833,469,684.39 4,468,575,626.52 41,629,161,593.79
2020
Other equity instruments Other
Paid-in
Less: comprehen
Items capital (or Capital
treasury
Special Surplus Undistributed
Total owners’ equity
share Preference Perpetual reserve reserve reserve profits
Others stock sive
capital) shares bonds
income
I. Closing balance for the previous year 6,579,566,627.00 7,036,531,178.83 11,077,477.45 2,050,181,180.01 3,307,235,242.11 18,984,591,705.40
Add: changes in accounting policies
Error correction for prior period
Others
II. Opening balance for the current year 6,579,566,627.00 7,036,531,178.83 11,077,477.45 2,050,181,180.01 3,307,235,242.11 18,984,591,705.40
III. Increase/decrease for the current period
2,448,279,814.00 13,371,821,202.12 -21,108,181.60 390,007,134.14 1,042,726,722.12 17,231,726,690.78
(decrease is represented by ‘-’)
(I) Total comprehensive income -21,108,181.60 3,900,071,341.39 3,878,963,159.79
(II) Capital injection and reduction by owners 2,448,279,814.00 13,371,821,202.12 15,820,101,016.12
1. Ordinary shares invested by owners 2,448,279,814.00 13,371,821,202.12 15,820,101,016.12
2. Capital contribution by holders of other equity
instruments
3. Share-based payment included in owners’ equity
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4. Others
(III) Profit distribution 390,007,134.14 -2,857,344,619.27 -2,467,337,485.13
1. Withdrawal of surplus reserves 390,007,134.14 -390,007,134.14
2. Distribution to owners (or shareholders) -2,467,337,485.13 -2,467,337,485.13
3. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or share
capital)
2. Transfer of surplus reserves into capital (or share
capital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others
IV. Closing balance for the period 9,027,846,441.00 20,408,352,380.95 -10,030,704.15 2,440,188,314.15 4,349,961,964.23 36,216,318,396.18
Legal representative of the Company:LiangHaishan Person in charge of accounting function:Gong Wei Person in charge of accounting department:YingKe
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III. GENERAL INFORMATION OF THE COMPANY
1. Overview of the Company
√Applicable □Not Applicable
The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by People’s
Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing Ti Gai [1989]
No. 3 issued on 24 March 1989, based on the reconstruction of the original Qingdao Refrigerator
Factory, a limited company was set up by directional fund raising of RMB150 million. In March
and September 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2 and No. 9
issued by the pilot leading team of Qingdao joint stock company, the Company was converted from
a directional offering company to a public subscription company and issued additional 50 million
shares to the public and listed with trading on Shanghai Stock Exchange in November 1993. In
October 2018, D-shares in issue of the Company were listed on the China Europe International
Exchange AG. In December 2020, H-shares in issue of the Company were listed on the Stock
Exchange of Hong Kong Limited by way of introduction.
The Company’s registered office is located at the Haier Industrial Park of Laoshan District,
Qingdao, Shandong Province, and the headquarters is located at the Haier Industrial Park of
Laoshan District, Qingdao, Shandong Province.
The Company is mainly engaged in research and development, manufacturing and sales of home
appliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliances
and water appliances, and other smart home business, as well as providing smart home packaged
solutions.
The ultimate controlling parent company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on
30 March 2022.
2. Scope of consolidated financial statements
√Applicable □Not Applicable
For details of changes in the scope of consolidated financial statements for the current period,
please refer to ‘VIII. Changes in Consolidation Scope’ and ‘IX. Interest in Other Entities’ of this
note.
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IV. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial statements of the Company were prepared on the going concern basis according to
the transactions and matters actually occurred, in accordance with the Accounting Standards for
Enterprises — Basic Standards published by the Ministry of Finance, specific accounting standards,
and guidance on application of accounting standards for enterprises, interpretations to accounting
standards for enterprises and other relevant requirements (hereinafter collectively referred to as the
‘Accounting Standards for Enterprises’) which issued subsequently, and in combination with the
disclosure provisions of the Rules for the Information Disclosure and Compilation of Companies
Publicly Issuing Securities No. 15: General Provisions for Financial Report (Revised in 2014) of
CSRC as well as the following significant accounting policies and accounting estimation.
The Company has ability to continue its operation for at least 12 months since the end of the reporting
period and there are no significant events affecting its ability to continue as a going concern.
V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
Specific accounting policies and accounting estimates:
√Applicable □Not Applicable
According to the characteristics of its production and operation, the Company formulated a series
of specific accounting policies and accounting estimates, including the provisions for impairment
for accounts receivable (Note V.10); the measurement of inventories (Note V.11); the depreciation
and amortization of the investment properties (NoteV.13); the depreciation of fixed assets (Note
V.14), the amortization of intangible assets (Note V.18), the criterion for determining of long-term
assets impairment (Note V.19); and the date of revenue recognition (Note V.25), etc.
1. Statement of compliance with Accounting Standards for Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting
Standards for Enterprises, which accurately and completely reflected information relating to the financial
position, results of operations and changes in shareholders' equity and cash flows of the Company.
2. Accounting period
The accounting year of the Company is from 1 January each year to 31 December of the same year
in solar calendar.
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3. Operating period
√Applicable □Not Applicable
The Company takes 12 months as an operating period, which is also the classification basis for the
liquidity of its assets and liabilities.
4. Recording currency
Renminbi is the recording currency of the Company
5. Accounting methods of business combinations under common control and not under common
control
√Applicable □Not Applicable
A business combination is a transaction or event that brings together two or more separate
entities into one reporting entity. Business combinations are classified into business
combinations under common control and business combinations not under common control.
(1) Business combinations under common control
A business combination under common control is a business combination in which all
of the combining entities are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory. For business
combination under common control, the party that obtains the control over the other
parties on the combination date is the acquirer, and other parties involving in the business
combination are the transferors. The combination date is the date on which the acquiring
party effectively obtains the control over the party being acquired.
In case the consideration for long-term equity investments formed in business
combination under common control is paid by ways of cash, transfer of non-cash assets
or assumption of debts, the Company will regard the share of carrying amounts of the net
assets of the transferor in the ultimate controller’s consolidated financial statements
obtained as the initial investment cost of long-term equity investments as at the date of
combination. For carrying value of net assets of the transferor is negative as at the date
of combination, investment cost of long-term equity investment is calculated as zero. In
case the transferor is controlled by the ultimate controller by the business combination
under non-common control before combination, the initial investment cost of the long-
term equity investment of the acquirer includes relevant goodwill. The Company should
adjust the capital reserve (capital premium or share premium) in accordance with the
differences between initial investment cost of the long-term equity investment and the
cash paid, the non-cash assets transferred and the carrying value of liability assumed; in
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case the balance of the capital reserve (capital premium or share premium) is insufficient
for the elimination, the surplus reserves and undistributed profits shall be used to dilute
such expenses in order. In case the consideration for the combination is paid by issuance
of equity instruments, the aggregate nominal value of shares issued will be deemed as
the share capital. The difference between the initial investment cost of long-term equity
investments and aggregate nominal value of shares issued shall be adjusted to capital
reserve (capital premium or share premium), in case the capital reserve (capital premium
or share premium) is insufficient for the elimination, the surplus reserves and
undistributed profits shall be used to dilute such expenses in order.
Intermediary fees (such as audit, legal services and valuation consultancy) and other
relevant management fees incurred in the business combination by the acquirer are
credited in profit or loss in the period when they occurred. Trading expenses in direct
relation to the issuance of equity instrument as the consideration for the combination is
written down to the capital reserve (share premium), where the capital reserve (share
premium) is insufficient, and to surplus reserves and undistributed profits in order.
Trading expenses in direct relation to the issuance of debt instrument as the consideration
for the combination is included in the initial recognition amount of the debt instrument.
For business combination under common control realized through several transactions
step by step, in case of a package transaction, all the transactions are accounted as one
transaction that has acquired the control; in case of not a package transaction, in the
financial statement of parent company the capital reserve (share premium) is adjusted by
the difference between the initial investment cost and the sum of the carrying value of
the original long-term equity investment and the book value of the new payment
consideration for further acquisition of shares with the share of acquirer’s owner’s equity
on the date of combination in case calculated on the proportion of shareholding on the
date of combination as its initial investment cost; where the capital reserve is insufficient,
the retained earnings will be used to offset such expenses.
In the consolidated financial statements, the long-term equity investment held by the
combining party before the date of acquiring control of the combined parties, and the
profit and loss, the other comprehensive income and changes in the other owners’ equity
recognized during the period between the later of the date of acquisition and the date
when the combining and the combined parties are under the common control of the same
party and the date of combination, are written down to the retained earnings or profit or
loss at the beginning of the comparative reporting period, respectively.
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(2) Business combinations involving entities not under common control
A business combination not under common control is a business combination in which
all of the combining entities are not ultimately controlled by the same party or parties
both before and after the combination. For business combination not under common
control, the party that obtains the control of the other parties at the combination date is
the acquirer; other parties involving in the business combination are the transferors. The
combination date is the date on which the acquirer effectively obtains control of the
transferors.
In business combination involving entities not under common control, the cost of
combination shall be the sum of the assets paid, obligations incurred or assumed and the
fair value of the equity securities issued by the acquirer for obtaining control of the
transferor at the date of acquisition. Intermediary fees (such as audit, legal services and
valuation consultancy) and other relevant management fees incurred by the acquirer for
the purpose of business combination are credited in profit or loss in the period when they
occurred. Transaction fees for the equity instruments or debt instruments issued by the
acquirer as combination consideration is included in the initial recognition amount of
such equity instruments or debt instruments. Contingent consideration involved shall be
recorded as the combination cost based on its fair value on the acquisition date. Should
any new or further evidence arise within 12 months after the acquisition date and makes
it necessary to adjust the contingent consideration on the acquisition date, the goodwill
arising from the business combination shall be amended accordingly.
The cost of combination and identifiable net assets obtained by the acquirer in a
business combination are measured at fair value on the acquisition date. Where the cost
of the combination exceeds the acquirer’s interest in the fair value of the transferor’s
identifiable net assets, the difference is recognized as goodwill; where the cost of
combination is lower than the acquirer’s interest in the fair value of the transferor’s
identifiable net assets, the difference is initially recognized in profit or loss for the current
year after a review of computation for the identifiable assets, liabilities or fair value of
contingent liabilities and combination cost, and where the combination cost is still lower
than the fair value of the identifiable net assets of the transferor obtained during the
course of combination, then the difference is recorded in the profit and loss.
In business combination involving entities not under common control that is realized
in phases through multiple exchange transactions, in the Company individual financial
statements, the sum of the book value of the equity investment of the transferor held
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before the date of acquisition and the cost of new investment on the date of acquisition
are recognized as the initial investment cost of such investment.
In the consolidated financial statement, the equity of the transferor held before the date
of acquisition is re-measured at the fair value on the date of acquisition, and the difference
between the fair value and book value is included in current investment income; where
the equity of the transferor held before the date of acquisition involves the other
comprehensive income, such equity and relevant other comprehensive income are
transferred to current investment income on the date of acquisition, other than the other
comprehensive income that cannot be reclassified in the profit or loss.
The fair value on the acquisition date of equity interest in the transferor prior to the
acquisition date and the fair value of the considerations paid for the acquisition of the
new equity on the acquisition date are regarded as the combination costs of the Company,
comparing with acquirer’s share of the fair value on the acquisition date of the
transferor’s net identifiable assets on the proportion of the shareholding on the acquisition
date to confirm the goodwill that required to be recognized on the acquisition date or the
amount that shall be included in the profit or loss.
6. Preparation method of consolidated financial statements
√Applicable □Not Applicable
(1) Scope of consolidated financial statements
The Company incorporated all of its subsidiaries (including the separate entities
controlled by the Company) into the scope of consolidation financial statements,
including the enterprises under the Company’s control, divisible part in the investees and
structured entities.
(2) To unify the accounting policies, balance sheets date and accounting periods of the
Company and subsidiaries
When preparing consolidated financial statements, adjustments are made if
subsidiaries’ accounting policies or accounting periods are different from that of the
Company, in accordance with the Company’s accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balance
sheets of the Company and subsidiaries, which offset the internal transactions incurred
between the Company and subsidiaries and among subsidiaries. The owner’s equity of
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the subsidiaries not attributable to the Company shall be presented as ‘minority equity’
under the owner’s equity item in the consolidated balance sheet.
The long-term equity investment of the Company held by the subsidiaries, deemed as
treasury stock of the corporate group as well as the reduction of owners’ equity, shall be
presented as ‘Less: Treasury stock’ under the owner’s equity item in the consolidated
balance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control, the assets,
liabilities, operating results and cash flow of the subsidiaries are included in the consolidated
financial statements from the beginning of the period in which the combination took place,
as if the combination has taken since the ultimate controller began its control. When
preparing the consolidated financial statements, for the subsidiaries acquired from business
combination under non-common control, separate financial statement will be adjusted on the
basis of their fair values of the identifiable net assets on the date of acquisition.
7. Classification of joint arrangement and accounting methods of joint operations
√Applicable □Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In
accordance with the Company’s rights and obligations under a joint arrangement, the
Company classifies joint arrangements into joint operations and joint ventures.
Joint operations refer to a joint arrangement in which the Company is a party and is entitled
to relevant assets and obligations of this arrangement. The Company recognizes the following
items in relation to its interest in a joint operation, and accounts the same in accordance with
relevant accounting standards for business enterprises:
(1) recognize the assets held solely by the Company, and recognize assets held jointly by the
Company in appropriation to the share of the Company;(2) recognize the obligations assumed
solely by the Company, and recognize obligations assumed jointly by the Company in
appropriation to the share of the Company;(3) recognize revenue from disposal of joint
operations in appropriation to the share of the Company; (4) recognize revenue from disposal
of joint operations in appropriation to the share of the Company; (5) recognize fees solely
occurred by the Company and recognize fees from joint operations in appropriation to the
share of the Company.
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When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets
do not constitute a business, the same below) from joint operations, the Company shall only
recognize the part of profit or lost from this transaction attributable to other parties of joint
operations before these assets are sold to a third party. In case of an impairment loss incurred
on these assets which meets the requirements as set out in Accounting Standards for Business
Enterprises No. 8 — Asset Impairment, the Company shall full recognize the amount of this
loss in relation to its investment in or sale of assets to joint operations or recognize the loss
according to the Company’s share of commitment in relation to the its purchase of assets from
joint operations.
Joint ventures refer to a joint arrangement during which the Company only is entitled to net
assets of this arrangement. Investment in joint venture is accounted for using the equity method
according to the accounting policies referred to under ‘12 Long-term equity investment’ of
Note V.
8. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available
for payment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and which
are subject to an insignificant risk on change in value.
9. Foreign currency businesses and translation of foreign currency statements
√Applicable □Not Applicable
(1) Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functional
currency by applying the spot exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated into functional currencies
at the rates of exchange ruling at the balance sheet date. All foreign exchange difference are
credited in the profit or loss, except ① those arising from the funds denominated in foreign
currency specially borrowed for the establishment of the qualifying assets are treated based on
the principal of capitalization of borrowing costs; ② those arising from the other changes in
the balance other than amortized cost of available-for-sale monetary items denominated in
foreign currency are recognized in the other comprehensive income.
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Non-monetary items in foreign currency measured at historical cost are translated using the
spot exchange rate prevailing on the date when transaction occurred and its functional currency
shall remain unchanged. Non-monetary items denominated in foreign currencies that are
measured at fair value are translated using the foreign exchange rate at the date
the fair value is determined; the exchange differences between the translated and original
amounts of functional currencies are recognized in the statement of profit or loss or other
comprehensive income as changes in fair value (including changes in exchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint
ventures and associates under the control of the Company are different from that of the
Company, their financial statements denominated in foreign currencies shall be translated to
perform accounting and prepare the consolidated financial statements.
The assets and liabilities of the balance sheet are translated using the spot exchange rate at
the balance sheet date; all items except for ‘undistributed profits’ of the owner’s equity are
translated at the spot exchange rate on the transaction date. The revenue and expenses in the
income statement are translated using the approximate rate of the spot exchange rate on the
transaction date. Exchange differences on translation of financial statements denominated in
foreign currencies are presented as the ‘other comprehensive income’ in the owner’s equity of
the balance sheet.
Foreign currency cash flow is translated using the approximate rate of the spot exchange
rate on the transaction date. The impact of exchange rate changes on cash amount is reflected
separately in the cash flow.
When disposing overseas operations, the translation difference related to the overseas
operation shall be transferred together or as the percentage of disposing the overseas operation
to profit or loss in the current period of disposal.
10. Financial instruments
√Applicable □Not Applicable
A financial instrument refers to any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. A financial asset or financial liability is
recognized when the Company becomes a party to the contract of a financial instrument.
(1) Financial assets
① Classification and measurement
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According to the business model for managing financial assets and the contractual cash flow
characteristics of financial assets, the Company classifies financial assets into: (1) Financial assets
measured at amortized cost; (2) financial assets measured at fair value through other
comprehensive income; (3) financial assets measured at fair value through profit or loss of the
current period.
Financial assets are measured at fair value upon initial recognition. For financial assets
measured at fair value through profit and loss of the current period, related transaction costs are
directly included in profit and loss of the current period; for other types of financial assets, related
transaction costs are included in their initial recognized amounts. For the accounts receivable or
bills receivable arising from the sale of products or the provision of labor services that do not
contain or consider the significant financing components, the Company shall take the consideration
amount entitled to be received as the initial recognized amount.
a. Debt instrument
The debt instruments held by the Company refer to the tools that are in conformity
with the definition of financial liability from the perspective of the issuing party, which are
measured in the following three ways, respectively:
(a) Measured at amortized cost:
The Company’s business model for managing such financial assets is: With the
aim of obtaining contractual cash flow, the contractual cash flow characteristics of such
financial assets shall be consistent with the basic lending arrangements, that is, the cash
flow generated on a specific date is only the payment for the principal and the interest
based on the outstanding principal amount. For such financial assets, the Company
recognizes the interest income in accordance with the effective interest method. Such
financial assets mainly include cash and cash equivalents, bills receivable and accounts
receivable, other receivables, creditor’s right investment and long-term receivables.
The Company lists the creditor’s rights investments and long-term receivables matured
within one year (including one year) from the balance sheet date as non-current assets
matured within one year; the creditor’s rights investments matured within one year
(including one year) when being obtained are listed as other current assets.
(b) Measured at fair value through other comprehensive income:
The Company’s business mode for managing such financial assets is: With the
aim of obtaining contractual cash flow and selling the financial assets, the contractual
cash flow characteristics of such financial assets shall be consistent with the basic
lending arrangements. Such financial assets are measured at fair value through other
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comprehensive income, but impairment gains and losses, exchange gains and losses,
and interest income calculated by the effective interest method are included in profit
and loss of the current period. Such financial assets are listed as other creditor’s rights
investments. Other creditor’s rights investments matured within one year (including
one year) from the balance sheet date are listed as non-current assets matured within
one year; other creditor’s rights investments matured within one year (including one
year) when being obtained are listed as other current assets.
(c) Measured at fair value through profit or loss of the current period:
The Company lists its held debt instruments that are neither measured at amortized
cost nor at fair value through other comprehensive income as financial assets held for
trading measured at fair value through profit or loss of the current period. At the time of
initial recognition, in order to eliminate or significantly reduce accounting mismatch, the
Company designated some financial assets as financial assets measured at fair value
through profit or loss of the current period. Investments that are matured more than one
year and are expected to be held for more than one year from the balance sheet date are
listed as other non-current financial assets.
b. Equity instruments
The Company lists equity instrument investments that have no control, joint control and
significant influence on itself as financial assets held for trading measured at fair value through
profit or loss of the current period; investments that are expected to be held for more than one year
from the balance sheet date are listed as other non-current financial assets.
In addition, the Company designated some non-trading equity instrument investments as
financial assets measured at fair value through other comprehensive income, which are listed as
other equity instrument investments. The relevant dividends and interest income of such financial
assets are included in profit and loss of the current period.
② Impairment
For financial assets measured at amortized cost and debt instrument investments measured at
fair value through other comprehensive income, contract assets and financial guarantee contracts,
the Company recognizes the loss provision based on the expected credit losses.
The Company considers reasonable and reliable information about past events, current
conditions and forecasts of future economic conditions, and takes the risk of default as a weight,
and calculates the probability-weighted amount of the present value of the difference between the
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cash flow receivable and the cash flow expected to be received of the contract to confirm the
expected credit losses.
On each balance sheet date, the Company measures the expected credit losses of financial
instruments in different phases. If the credit risk has not increased significantly since the initial
recognition, the financial instruments are in the first phase. The Company measures the loss
provision according to the expected credit losses in the next 12 months; if credit risk has increased
significantly but credit impairment has not yet occurred since the initial recognition, the financial
instruments are in the second phase. The Company measures the loss provision according to the
expected credit losses of the instruments during the entire duration; if credit impairment has
occurred since the initial recognition, the financial instruments are in the third phase. The Company
measures the loss provision according to the expected credit losses of the instruments during the
entire duration.
For financial instruments with lower credit risk on the balance sheet date, the Company measures
the loss provision according to the expected credit losses in the next 12 months, assuming that its
credit risk has not increased significantly since the initial recognition.
For financial instruments in the first phase and second phase and financial instruments with
relatively lower credit risk, the Company calculates interest income based on their book balance
before the deduction of provisions and effective interest rate. For financial instruments in the third
phase, the Company calculates interest income based on their amortized cost after the impairment
provision has been deducted from the book balance and effective interest rate.
For bills receivable, accounts receivable and contractual assets, whether there exist significant
financing components, the Company measures loss provision based on expected credit loss over
the entire duration.
The Company classifies accounts receivable into groups on the basis of shared credit risk
characteristics, and calculates the expected credit losses on groups, the bases of group
determination are as follows:
For each group of bills receivable, the Company applies exposure at default and expected credit
losses rate over the entire duration to calculate the expected credit losses by taking into account the
historical credit losses experience, the existing conditions and forecast of future economic
conditions.
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For each group of accounts receivable, the Company makes the comparison of expected
credit losses rates of accounts receivable in overdue days and over the entire duration to calculate
the expected credit losses by taking into account the historical credit losses experience, the existing
conditions and forecast of future economic conditions.
For each group of other accounts receivable, the Company applies exposure at default and
expected credit losses rate within the next 12 months or over the entire duration to calculate the
expected credit losses by taking into account the historical credit losses experience, the existing
conditions and forecast of future economic conditions.
The Company recognizes the loss impairment provision or reversed in profit or loss of the
current period. For held debt instruments at fair value through other comprehensive income, the
Company recognizes loss/gain on impairment in profit or loss of the current period, and adjusts
other comprehensive income at the same time.
③ Derecognition
A financial asset is derecognized when any of the below criteria is met: a. the contractual
rights to receive the cash flow from the financial asset have been transferred; b. the financial asset
has been transferred and the Company transfers substantially all the risks and rewards of ownership
of the financial asset to the transferee; c. the financial asset has been transferred and the Company
has not retained control of the financial asset, although the Company neither transfers nor retains
substantially all the risks and rewards of ownership of the financial asset.
On de-recognition of other equity instruments investment, the difference between the book
balance and the sum of the consideration received and any cumulative profit or loss of fair value
that had been recognized in other comprehensive income is recognized in the retained earnings.
On de-recognition of other financial assets, the difference between the book balance and the sum
of the consideration received and any cumulative profit or loss of fair value that had been
recognized in other comprehensive income is recognized in the profit and loss of the current period.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at amortized cost and
financial liabilities at fair value through profit and loss of the current period at initial recognition.
The financial liabilities of the Company are financial liabilities measured at amortized cost,
including bills payable, accounts payable, other payables, borrowings, bonds payable, etc. Such
financial liabilities are recognized initially at fair value less transaction costs and subsequently
measured using the effective interest method. Financial liabilities with a maturity of less than one
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year (including one year) are listed as current liabilities: those with maturity of more than one year
but are mature within one year from the balance sheet date (including one year) are listed as non-
current liabilities due within one year; the rest are presented as non-current liabilities.
When all or partial current obligations of financial liabilities have been discharged, such
financial liabilities or the part with obligations discharged are derecognized by the Company. The
difference between the carrying amount of a financial liability de-recognized and the consideration
paid is recognized in the profit and loss of the current period.
(3) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the
quoted price in the active market. The fair value of a financial instrument that is not traded in an
active market is determined by using a valuation technique. During the valuation, the Company
adopts an applicable valuation technique under current conditions and there are enough available
data and other information to support. Those inputs should be consistent with the inputs a market
participant would use when pricing the asset or liability, and the Company should maximize the
use of relevant observable inputs. When related observable inputs can’t be acquired or are not
feasible to be acquired, then use unobservable inputs.
(4) Significant accounting estimates and judgment
① Significant accounting estimates and underlying key assumptions
Measurement of expected credit loss (“ECL”)
The Company measures ECL through default risk exposure and the ECL rate, which is
determined based on the default probability rate and default loss rate. In determining the ECL
rate, the Company uses data such as internal historic credit loss experience and adjusts the
historic data taking into consideration current conditions and prospective information. When
considering prospective information, indicators adopted by the Company include the risk of
economic downside, expected growth in unemployment rate, and changes in external market
conditions, technical conditions and customer conditions. The Company monitors and reviews
the assumptions relating to ECL computation on a regular basis. There was no significant
change to aforesaid estimation technique and key assumptions during the year.
② Key judgment made in the adoption of accounting policies
a. Classification of financial assets
The determination of the classification of financial assets involves significant judgment,
including analysis of the business model and characteristics of contract cash flow.
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The Company determines the business model for managing financial assets at the level of
financial asset groups. Factors considered include the methods by which the performance of
financial assets are assessed and reported to key management members, risks affecting the
performance of financial assets and how such risks are managed and the method in which related
business management personnel are remunerated.
In assessing whether the contract cash flow of financial assets is consistent with the basic
loan arrangement, the Company exercises the following principal judgments: whether the time
distribution or amount of principal during the period could change as a result of early repayment
or other reasons; whether interest include only the time value of the currency, cost of credit risk
and other basic risk and consideration for profit. For example, whether the early repayment amount
reflects only the outstanding principal amount and interests accrued thereon, and reasonable
compensation paid for premature termination of contract.
b. Judgment of significant increase in credit risk
The Company’s principal criteria for the judgment that credit risk has significantly increased is
an overdue for more than 30 days, or significant change in one or more of the following indicators:
significant change in the business environment in which the debtor operates, its internal and
external credit ratings, and its actual or expected operating results, and significant decrease in the
value of collaterals or the credit rating of the guarantor, among others.
The Company’s principal criteria for the judgment that a credit impairment has occurred is an
overdue for more than 90 days (namely, default has occurred), or fulfillment of one or more of the
following conditions: the debtor experiences significant financial difficulties, is undergoing other
debt restructuring or is likely to go into bankruptcy.
11. Inventory
√Applicable □Not Applicable
(1) Classification of inventory
Inventory refers to finished products and commodities held by the Company in daily activities for
sale, products in progress, materials and supplies consumed in the process of production or provision of
labour services, including mainly raw materials, turnover materials, materials for commissioned
processing work, packaging materials, products in progress, semi-finished products through in-house
manufacturing, finished products (products in stock) and project construction, among others.
(2) Pricing of dispatch of inventory
An inventory item is accounted for using the weighted average method upon dispatch.
(3) Impairment provision for inventory
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At the balance sheet date, inventory is measured at the lower of cost and net realisable value.
The net realisable value of inventories that can be directly put to sale, including finished products,
commodities and materials for sale is determined as the estimated selling price of such inventory less
estimated selling expenses and related tax expenses; the net realisable value of or inventories held for
production, is determined as the estimated selling price of finished products manufactured less estimated
cost incurred upon completion, estimated selling expenses and related tax expenses; the net realisable
value of inventory held for the execution of sales contract or labour contract is computed on the basis of
the contract price. If the quantity of inventories held by a company is more than the quantity ordered
under a sales contract, the net realisable value of the inventories in excess is computed on the basis of
the general selling price.
Inventory impairment provision is made on the basis of individual inventory items, provided that
if certain inventories are related to a series of products manufactured and sold in the same region with
identical or similar end uses or purposes and are difficult to measure separately with other items, their
cost and net realisable value may be measured on an aggregate basis. Inventories The cost and net
realizable value of inventories in large quantity with low unit prices are measured according to inventory
types.
At the balance sheet date, if the cost of inventory is higher than its net realisable value, impairment
provision is made and charged to current profit or loss. If the factor causing the write-down of inventory
value has been removed, the amount of write-down should be reversed and transferred out of the previous
inventory impairment provision amount. The reversed amount is included in current profit or loss.
(4) Inventory system
The Company adopts the perpetual inventory system.
(5) Amortisation of low-value consumables and packaging materials
The Company adopts one-off amortisation of its low-value consumables and packaging materials.
12. Long-term equity investments
√Applicable □Not Applicable
Long-term equity investments hereunder refer long-term equity investments in which the Company
exercises control, joint control or significant influence over the investee. Long-term equity investments
in which the Company does not exercises control, joint control or significant influence over the investee
are classified as other equity instruments investments.
(1)Determination of initial investment cost
① The initial cost of long-term equity investments acquired through business combination
involving parties under common control should be recognised as the share of the carrying value
of the owner’s equity of the acquired party; the initial cost of long-term equity investments
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acquired through business combination involving parties not under common control should be
recognised as the combination costs determined at the date of acquisition;
② For equity investment other than long-term equity investments acquired through business
combination, the initial investment cost of long-term equity investments acquired with cash payment is
the acquisition price actually paid; the initial investment cost of long-term equity investments acquired
with the issuance of equity- based securities is represented by the fair value of equity-based securities;
the initial investment cost of long-term equity investments acquired through debt restructuring should be
determined in accordance with relevant provisions under “Accounting Standards for Business Enterprises
No.12 — Debt Restructuring”; the initial investment cost of long-term equity investment acquired in
exchange for non-monetary assets shall be determined in accordance with relevant provisions of the
standard.
(2) Subsequent measurement and recognition of profit or loss
① Cost method
Long-term equity investments in which the investor is able to exercise control over the investee is
accounted for using the cost method. Under the cost method, the carrying value of long-term equity
investments, other than additional investment or recouped investment, shall remain constant. When profit
distribution or cash dividend is declared, the portion of entitlement is recognised as investment income.
② Equity method
The equity method is used to account for long-term equity investments in associates and joint
ventures. If a part of the equity investment in an associate is held indirectly through risk investment
institutions, mutual funds, trust companies or similar principals (including investment-cum-insurance
funds), the investor may elect to measure such indirectly held investment at fair value through profit or
loss and measure the remaining portions using the equity method, in accordance with relevant provisions
of “Accounting Standards for Business Enterprises No.22- Recognition and Measurement of Financial
Instruments”, whether or the aforesaid principals are exercising significant influence over this part of the
investment.
Under the equity method, the initial investment cost is not adjusted for any excess of the initial
investment cost over the share of the net fair value of the investee’s identifiable assets. When the initial
investment cost is less than the share of the fair value of the investment’s identifiable net assets, the
difference is recognised in current profit or loss and the cost of long-term equity investment is adjusted
accordingly.
Under the equity method, share of net profit or losses and other comprehensive income of the
investee are recognised as investment income and other comprehensive income, respectively, and the
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carrying amount of the long-term equity investment is adjusted accordingly. Share of profit or cash
dividend declared by the investee is charged against the carrying value of the long-term equity investment;
changes in owners’ equity of the investee other than net profit or loss, other comprehensive income and
profit distribution are adjusted against the carrying value of long-term equity investment and included in
capital reserve. Share of net profit or loss of the investee is recognised on the basis of the fair value of
the identifiable assets of the investee when the investment is acquired and adjusted against the net profit
of the investee. If the accounting policy and accounting period of the investee are inconsistent with those
of the Company, the financial statements of the investee is adjusted to align with the accounting policy
and accounting period of the Company, and investment income and other comprehensive income is
recognised accordingly.
Net losses of the investee is recognised by deducting the carrying value of the long- term equity
investment together with long-term equity that in substance forms part of the net investment in the
investee until it reaches zero. Moreover, if the Company has incurred obligations to assume additional
losses of the investee, estimated liabilities are recognised according to the obligation expected to be
assumed and charged to current investment loss. If the investee records net profit in future periods, the
Company shall recognise its share of gains after applying such share of gains to make up for the
unrecognised share of loss.
(3) Change of accounting method for long-term equity investment
① Change from fair value measurement to the equity method: If an equity investment in the investee
not previously affording control, joint control or significant influence and accounted for in accordance
with the standard for recognition and measurement of financial instruments becomes capable of affording
joint control or significant influence over the investee as a result of increased shareholding following
additional investment, the accounting method should be changed to the equity method, and the fair value
of the original equity investment determined according to the standard for recognition and measurement
of financial instruments plus the fair value of consideration paid for the acquisition of the new investment
shall be changed the initial investment cost under the equity method.
② Change from fair value measurement or equity method to cost method: if an equity investment
previously held in the investee not previously affording control, joint control or significant influence and
accounted for in accordance with the standard for recognition and measurement of financial instruments,
or a long- term equity investment previously held in associates or joint ventures becomes capable of
affording control over the investee, it is accounted for long-term equity investment formed through
business combination.
③ Change from equity method to fair value measurement: if a long-term equity investment previously
held in the investee affording joint control or significant influence ceases to afford joint control or
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significant influence as a result of decrease in shareholding percentage following partial disposal, the
remaining equity investment is recognised in accordance with the standard for recognition and
measurement of financial instruments, and the difference between the fair value at the date of loss of
joint control or significant influence and the carrying value is included in current profit or loss.
④ Change from cost method to equity method or fair value measurement: when preparing separate
financial statements, if the Company losses control over an investee due to disposal of some equity-based
investment and other reasons, the Company accounts for the remaining equity affording joint control or
significant influence over an investee as a result of disposal based on the equity method, and the
remaining equity will be adjusted as if it is accounted for using the equity method from the date of
acquisition; for the remaining equity not affording joint control or significant influence over an investee
as a result of disposal, it is accounted for in accordance with relevant requirements of Accounting
Standards for Business Enterprises No. 22— Recognition and measurement of financial assets, and the
differences between the fair value and book value on the date when control is lost are included in profit
or loss. When preparing consolidated financial statements, it shall be accounted for in accordance with
relevant requirements of Accounting Standards for Business Enterprises No.33— Consolidated financial
statements.
(4) Bases for determining joint control or significant influence over an investee
① Basis for determining joint control over an investee: decisions on activities having a significant
impact on the reward of a certain arrangement must be made with unanimous approval of parties sharing
the joint control, such as the sale and purchase of commodities or labour services, management of
financial assets, asset acquisition and disposal, R&D activities and financing activities.
② Basis for determining significant influence over an investee: holding of capital with more than 20
and up to 50 voting rights is deemed to be having significant influence. Or even though it is less than 20,
fulfillment of one of the following conditions is also deemed as having significant influence:
1) Representation at the board or similar authority of the investee;
2) Participation in the decision-making process of the investee;
3) Posting of management personnel at the investee;
4) Dependence of the investee on the investing party’s technology and technical data;
5) Having important transactions with the investee.
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(5) Methods for impairment test and impairment provision
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of a long-term equity investment. If there are indications of impairment, an impairment test
should be performed to ascertain its recoverable amount, and an impairment provision equivalent to the
margin by which the recoverable amount is lower than the carrying value should be made. Once
recognised, impairment loss will not be reversed in subsequent accounting periods.
The recoverable amount is determined as the higher of net fair value of the long-term equity
investment on disposal and present value of estimated future cash flow.
(6) Disposal of long-term equity investments
Upon disposal of long-term equity investments, the difference between the carrying value and
consideration actually acquired is included in current profit or loss. Upon disposal of long-term equity
investment, the portion previously included in other comprehensive income is accounted for according
to the relevant percentage on the same basis adopted in the direct disposal of the relevant assets or
liabilities by the investee.
13. Investment properties
The Company’s investment properties included leased land-use rights and leased buildings.
The Company’s investment properties is initially measured at cost and subsequently on a cost basis.
Among the Company’s investment properties, leased buildings are subject to depreciation on a
straight-line basis in accordance with accounting policies identical with accounting policies for fixed
assets. Leased land-use rights and land-use rights held for disposal after appreciation land- use rights in
investment properties are amortised using the straight-line method in accordance with accounting
policies identical with fixed asset accounting policies for intangible assets.
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of an investment property. If there are indications of impairment, an impairment test should
be performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin
by which the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.
14. Fixed assets
(1) Recognition criteria
√Applicable □Not Applicable
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Fixed assets refer to tangible assets held for the production of commodities, provision of labour
services, lease or operational management with a useful life of more than one accounting year. Fixed
assets are recognised if all of the following conditions are met:
① Economic benefits relating to such fixed assets are likely to flow into the enterprise;
② The cost of the fixed assets can be reliably measured.
(2) Classification and depreciation of fixed assets
The Company’s fixed assets are mainly classified into: buildings, production equipment,
transportation equipment and office equipment; depreciation is conducted on a straight-line basis. The
useful life and estimated net residual value of fixed assets are determined based on the nature and use of
the fixed assets. At the end of the year, the useful life and estimated residual value of and depreciation
method for fixed assets are reviewed, and adjustment is made for any difference with the original
estimated amount. Other than fully depreciated fixed assets which remain in use, the Company measures
depreciation for all fixed assets.
Type of fixed assets Useful life Estimated residual
Land ownership - -
Buildings 8-40 years 0%-5%
Machinery equipment 4-20 years 0%-5%
Transportation equipment 5-10 years 0%-5%
Office equipment and others 3-10 years 0%-5%
(3) Methods for impairment test and impairment provision for fixed assets
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of fixed assets. If there are indications of impairment, an impairment test should be
performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin by
which the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.
(4) Disposal of fixed assets
Fixed assets are derecognised upon disposal, or when no economic benefits are expected from use
or disposal. The difference between gains on disposal, transfer, retirement or damage of fixed assets, net
of their book value and related taxes, are included in profit and loss.
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15. Construction in progress
√Applicable □Not Applicable
(1) Measurement of construction in progress
The cost of the Company’s construction in progress is recognised at actual construction expenses,
including all necessary construction expenses incurred during the construction, and borrowing costs
capitalized before the work reaches the expected conditions for use and other related costs.
(2) Criteria for and timing of the transfer of construction in progress to fixed assets
The Company’s construction in progress is transferred to fixed assets when the work is completed
and reaches the expected conditions for use. The criteria for judgement of expected conditions for use
should meet one of the following:
① The physical construction (including installation) of fixed assets has been completed in full or
substantially completed in full;
② Trial production or operation has commenced and the result indicates that the asset can operate
normally or can manufacture compliant products in a consistent manner, or the trial operation indicates
that it can operate or conduct business normally;
③ The amount of fixed asset expenditure of the construction is minimal or almost certain not be further
incurred;
④ Fixed assets acquired have reached design or contractual requirements, or are essentially consistent
with design and contractual requirements.
(3) Methods for impairment test and impairment provision for construction in progress
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of construction in progress. If there are indications of impairment, an impairment test should
be performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin
by which the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.
The recoverable amount is determined as the higher of net fair value of the asset less disposal cost
and the present value of estimated future cash flow.
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16. Borrowing costs
√Applicable □Not Applicable
(1) Principle for recognition of capitalisation of borrowing cost
Borrowing costs incurred by the Company that can be directly attributed to the acquisition or
production of assets qualified for capitalisation are capitalised and included in relevant asset costs; other
borrowing costs are recognised as cost at the amount incurred at the time of incurrence and charged to
current profit or loss. Assets qualified for capitalisation refer to fixed assets, investment properties and
inventory that require a considerably long period of acquisition or production activities to reach the
expected conditions for use or sale.
(2) Computation of capitalised amounts
Capitalisation period: from the point of time at which the capitalisation of borrowing costs begins
to the point of time at which capitalisation ceases. The period of suspension of capitalisation of borrowing
costs is not included.
Period of suspension of capitalisation: In case of abnormal disruption during the acquisition or
production process for a consecutive period of more than 3 months, the capitalisation period for
borrowing costs should be suspended.
Computation of capitalised amount: ① For specific borrowings, the amount is determined as
interest expense incurred for the period in respect of the specific borrowing less interest income received
through the deposit of unutilised borrowed funds or investment gains received through provisional
investments; ② For general borrowings utilised, the amount is determined as the weighted average
amount of the portion of cumulative asset expenses in excess of the asset expense of specific borrowings
multiplied by the capitalisation rate for the general borrowings utilised, where the capitalisation rate is
the weighted average interest rate of general borrowings; ③ where there is a discount or premium in
the borrowings, the amortisation of such discount or premium for each accounting period is determined
according to the effective interest rate and the interest amount for each period is adjusted accordingly.
17. Right-of-use assets
√Applicable □Not Applicable
Right-of-use assets are the rights of the Company as lessee to use leased assets during the lease
period. At the inception date of the lease, the Company as lessee should recognise right- of-use assets
and lease liabilities in respect of the lease, other than short-term leases and leases of low-value assets
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which are subject to simplified treatment. The inception date of the lease means the date on which the
provision of the leased asset by the lessor for use by the lessee is started.
The Company’s right-of-use assets are initially measured at cost, which includes:
(1) The amount of lease liability under initial measurement;
(2) The lease payment made on or before the inception date of the lease term, less the relevant amount
of lease incentive received if such incentive is available;
(3) The initial direct cost of the Company as lessee;
(4) Estimated cost to be incurred for the demolishing and removal of leased assets, restoration of venues
where the leased assets are located or restoration of the leased assets to the conditions agreed under the
lease terms.
The Company charges depreciation in respect of right-of-use assets in accordance with
“Accounting Standards for Business Enterprises No. 4 — Fixed Assets”. Where the acquisition of
ownership of the leased asset at the end of the lease period can be reasonably ascertained by the Company,
depreciation is charged over the remaining useful life of the leased assets. If the acquisition of ownership
of the leased asset at the end of the lease period cannot be reasonably ascertained, depreciation is charged
during the lease term or the remaining useful life of the leased assets, whichever is shorter.
The Company shall determine whether impairment of right-of-use assets has occurred and account
for impairment loss which has been identified in accordance with the provisions of “Accounting
Standards for Business Enterprises No. 8 — Asset Impairment”.
When the Company remeasures lease liabilities in accordance with the accounting standard, the
carrying value of the right-of-use assets is adjusted accordingly. If the carrying value of the right- of-use
assets is reduced to zero but the lease liabilities still require further adjustment, the remaining amount is
charged to current profit or loss.
Where lease modification results in a reduced scope of lease or shortened lease term, the carrying
value of the right-of-use assets is reduced accordingly, and the relevant gain or loss resulting from the
partial or full termination of the lease is included in current profit or loss. For other lease modifications
resulting in the remeasurement of lease liabilities, the carrying value of the right-of-use assets is adjusted
accordingly.
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18. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical form and are possessed
or controlled by the Company.
(1) Measurement of intangible assets
Intangible assets of the Company are initially recognized at costs. The actual costs of purchased
intangible assets include the consideration and relevant expenses actually paid. For intangible assets
contributed by investors, relevant actual costs are determined based on the value agreed in the investment
contract or agreement. But if the value agreed in the investment contract or agreement is not a fair value,
the actual costs should be determined based on the fair value. The cost of a self-developed intangible
asset is the total expenditure incurred in bringing the asset to its intended use.
Subsequent measurement of intangible assets of the Company: ① Intangible assets with finite
useful lives are amortized on a straight-line basis; their useful lives and amortization methods are
reviewed at the end of each year, and adjusted accordingly if there is any variance with the previous
estimates; ② Intangible assets with indefinite useful lives are not amortized and their useful lives are
reviewed at the end of each year. If there is an objective evidence that the useful life of an intangible
asset is finite, an estimation should be made on the useful life and the intangible asset should be amortized
using the straight- line method.
(2) Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the asset brings economic
benefits for the Company is unforeseeable, or the useful life could not be ascertained.
Criterion of determining indefinite useful lives: ① the period is derived from contractual rights
or other legal rights and there are no explicit years of use stipulated in the contract or laws and regulations;
② the period in which the intangible assets generate benefits for the Company still could not be
estimated after considering the industrial practice or relevant expert opinions.
At the end of each year, the useful lives of the intangible assets with indefinite useful lives are
reviewed. The assessment is primarily reviewed by relevant departments that use the intangible assets,
using the down-to-top approach, to determine if there are changes to the determination basis of indefinite
useful lives.
(3) Methods of test and provision for impairment of intangible assets
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At the balance sheet date, the Company reviews intangible assets to check whether there is any
sign of impairment. If yes, the recoverable amount is recognized through an impairment test and
provision for impairment is made based on the difference between the carrying value and the recoverable
amount.
Impairment loss will not be reversed in subsequent accounting periods once provision is made for
it. The recoverable amount of intangible assets should be based on the higher of the net fair value of the
assets less the disposal expense and the present value of estimated future cash flow of the assets.
(4) Basis for research and development phases for internal research and development project and basis
for capitalization of expenditure incurred in development stage
As for an internal research and development project, expenditure incurred in the research stage is
recognized in the profit or loss as incurred. Expenses incurred in the development stage are recognized
as intangible assets if all of the following conditions are met: ① the technical feasibility of completing
the intangible assets so that they will be available for use or for sale; ② the intention to complete the
intangible assets for use or for sale; ③ how the intangible assets will generate economic benefits,
including there is evidence that the products produced by the intangible assets has a market or the
intangible assets themselves have a market; if the intangible assets are for internal use, there is evidence
that there exists usage for the intangible assets; ④ the availability of adequate technical, financial and
other resources to complete the development and gain the ability to use or sell the intangible assets; ⑤
the capability to reliably measure the expenditures attributable to the development stage of the intangible
assets.
Specific standards for distinguishing research stage and development stage of an internal research
and development project: research stage refers to the stage of planned investigation and search for
obtaining new technology and knowledge, which features planning and exploration; before commercial
production or other uses, the stage of applying the research achievements and other knowledge in a plan
or design to produce new or substantially improved materials, equipment and products is regarded as
development stage, which features pertinence and is very likely to form results.
All the expenditures incurred on research and development which cannot be distinguished between
research stage and development stage are recognized in the profit or loss.
19. Impairment of long-term assets
√Applicable □Not Applicable
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Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment if there is
any sign of impairment at the balance sheet date. If the result of the impairment test indicates that the
recoverable amount of the assets is less than the carrying amount, a provision for impairment will be
made based on the difference and will be recorded in impairment loss. The recoverable amount is the
higher of the net fair value of the assets less the disposal expense and the present value of estimated
future cash flow of the assets. Provision for asset impairment is calculated and recognized on the
individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of the asset group to which the asset belongs is determined. An asset group is the
smallest asset portfolio that can generate cash inflows independently.
Goodwill is tested for impairment at least at the end of each year.
In terms of impairment test of the goodwill of the Company, the carrying amount of the goodwill,
arising from business combination, shall be allocated to the related asset groups on reasonable basis since
the acquisition date, or to the related asset group portfolios if it is difficult to be allocated to the related
asset groups. When the carrying amount of the goodwill is allocated to the related asset groups or asset
group portfolios, it shall be allocated in the proportion of the fair value of each asset group or asset group
portfolio against the total fair value of related asset groups or asset group portfolios. If it is difficult to
measure the fair value reliably, it shall be allocated in the proportion of the carrying amount of each asset
group or asset group portfolio against the total carrying amount of related asset groups or asset group
portfolios. When impairment test is made to the related asset groups or asset group portfolios including
goodwill, if there is a sign that the related asset groups or asset group portfolios are prone to impair, the
Company shall first conduct impairment test on the asset groups or asset group portfolios excluding
goodwill, calculate the recoverable amount and recognize the corresponding impairment loss by
comparing with its carrying amount. The Company shall then conduct impairment test on the asset groups
or asset group portfolios including goodwill and compare the carrying amount (including the carrying
amount of allocated goodwill) of related asset groups or asset group portfolios with the recoverable
amount thereof. Impairment loss on goodwill shall be recognized when the recoverable amount of the
related asset groups or asset group portfolios is lower than the carrying amount thereof.
Once the above impairment loss on assets is recognized, it shall not be reversed in any subsequent
accounting period.
20. Long-term prepaid expense
√Applicable □Not Applicable
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Long-term prepaid expenses of the Company are expenditures which have incurred but the benefit
period of which is more than one year (exclusive). They are amortized by installments over the benefit
period based on each item under the expenses. If items under the long-term pre-paid expenses are no
longer beneficial to the subsequent accounting periods, the amortized value of such unamortized items
is then fully transferred to the profit or loss.
21. Staff’s remuneration
Staff’s remunerations are all forms of compensation and other relevant expenditure given by the
Company in exchange for services rendered by employees, including short-term remunerations, post-
employment benefits, termination benefits and other long-term benefits.
Short-term remunerations include short-term salaries, bonus, allowance, subsidies, employee
welfare, housing provident fund, labor union fee and education fee, medical insurance premiums, work-
related injury insurance premiums, maternity insurance premiums, short-term compensated leave, short-
term profit-sharing plans, etc. During the accounting period when employees render services, short-term
remunerations that actually incurred shall be recognized as liabilities and credited into the current profit
or loss or the cost of relevant assets on an accrual basis by the benefit objects.
Post-employment benefits mainly include the basic pension insurance, enterprise annuity, etc., In
accordance with the risks and obligations undertaken by the Company, the post- employment benefits
are classified as defined contribution plans and defined benefit plans. Defined contribution plans: the
Company shall recognize the sinking funds paid on the balance sheet date to individual entities in
exchange for services from employees in the accounting period as liabilities, and shall credit such funds
into the profit or loss or the cost of relevant assets in accordance with the benefit objects. Defined benefit
plans: the cost for providing benefits is determined using the expected cumulative welfare unit method,
with actuarial valuations being carried out by independent actuary at the interim and annual balance sheet
date. The costs for staff’s remunerations incurred by the defined benefit plans of the Group are
categorized as follows: (1) service cost, including current period service cost, past service cost and
settlement profit or loss. Specifically, current period service cost means the increase of the present value
of defined benefit obligations resulted from the current period services offered by employees. Past service
cost means the increase or decrease of the present value of defined benefit obligations resulted from the
revision of the defined benefit plans related to the prior period services offered by employees; (2) interest
expenses of defined benefit plans; (3) changes caused by the remeasurement of liabilities for defined
benefit plans. Unless other accounting standards require or permit the credit of the costs for employee
welfare into the cost of assets, the Company will credit (1) and (2) above into the profit or loss; and
recognize (3) above as other comprehensive income and will not transfer it back to the profit or loss in
subsequent accounting periods.
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Termination benefits: The indemnity proposal provided by the Company for employees for the
purpose of terminating labor relations with employees before expiry of the labor contracts or encouraging
employees to accept downsizing voluntarily. When the following conditions are met, the Company will
recognize and credit into the profit or loss the accrued liabilities arising from the indemnity as a result of
terminating labor relations with the employees: the Company has made a formal plan for termination of
labor relations or has made an offer for voluntary redundancy which will be implemented immediately;
and the Company could not unilaterally withdraw the plan for termination of labor relations or the
redundancy offer. Early retirement plans for employees will be handled in the principle the same as the
termination benefits above. The Company will credit the salaries and social insurance premiums to be
paid to the early retirees during the period from the date of early retirement to the normal retirement date
to the profit or loss when recognition conditions for estimated liabilities are met.
22. Lease liabilities
√Applicable □Not Applicable
On the commencement date of the lease term, the Company as the lessee shall recognize the right-
of-use assets and lease liabilities for the lease. The Company’s lease liabilities are initially measured at
the present value of the lease payment that has not been paid on the commencement date of the lease
term.
When calculating the present value of the lease payment, the Company adopts interest rate implicit
in lease as discount rate; if it is impossible to determine the interest rate implicit in lease, the incremental
borrowing rate of the Company (i.e. lessee) shall be adopted as the discount rate.
The interest rate implicit in lease refers to the interest rate that makes the sum of the present value
of the lessor’s lease receivable amount and the present value of the unguaranteed residual value equal to
the sum of the fair value of the leased asset and the initial direct cost of the lessor. The lessee’s
incremental borrowing rate refers to the interest rate that the lessee is required to pay for borrowing funds
under similar mortgage conditions in a similar economic environment in order to obtain assets close to
the value of the right-of-use assets during a similar period.
The Company shall calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate, and include it into current profit or loss or assets cost.
After the commencement date of the lease term, where the assessment results of the renewal of the
option, the termination of the lease option and the purchase option have changed, the Company re-
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determines the lease payment and re-measures the lease liabilities in accordance with the present value
of the lease payment after changes and the revised discount rate. After the commencement date of the
lease term, in the event that the future lease payment changes due to a change in expected payment under
a guaranteed remaining value or changes in an index or rate used in determining the lease payments, the
Company shall re-measure lease liabilities based on present value of the lease payment after changes. In
such cases, the discount rate adopted by the Company shall remain unchanged; however, if the change
in lease payment results from a change in floating interest rates, the Company shall use a revised discount
rate.
23. Estimated liability
√Applicable □Not Applicable
(1) Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting of commercial
acceptance bills, pending litigation or arbitration and product quality assurance is the present obligation
of the Company and the performance of such obligation is likely to lead to an outflow of economic
interests and its amount can be reliably measured, such obligation shall be recognized as an estimated
liability.
(2) Measurement of estimated liability
The estimated liability shall be initially measured according to the best estimate of the necessary
expenses for the performance of the present obligation. If there is a continuous range for the necessary
expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be
determined according to the middle estimate within the range.; if there are two or more items involved,
the best estimate should be determined according to all possible outcomes and relevant probabilities.
At the balance sheet date, the carrying value of estimated liabilities should be reviewed. If there is
objective evidence that the carrying value could not reflect in the current best estimate, the carrying value
shall be adjusted to reflect the current best estimate.
24. Share-based payments
√Applicable □Not Applicable
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For equity-settled share-based payment transaction in return for services from employees, it shall
be measured at the fair value of equity instruments granted to the employees at the grant date. For the
payment of such fair value that may only be exercised if services are fulfilled during the vesting period
or the specified performance condition is achieved, the amount of such fair value shall, based on the best
estimate of the number of exercisable equity instruments during the vesting period, be recognized in
relevant costs or expenses in straight-line method with the increase in the capital reserve accordingly.
The cash-settled share-based payment shall be measured at the fair value of liability assumed by
the Company, which is determined based on the shares or other equity instruments. For the cash-settled
share-based payment that may be exercised immediately after the grant, the fair value of the liability
assumed by the Company shall, on the date of the grant, be recognized in relevant costs or expenses and
the liabilities shall be increased accordingly. For cash-settled share-based payment that may be exercised
if services are fulfilled during the vesting period or the specified performance condition is achieved, on
each balance sheet date within the vesting period, the services acquired in the current period shall, based
on the best estimate of exercise, be recognized in relevant costs or expenses at the fair value of the liability
assumed by the Company, and the liabilities shall be adjusted correspondingly.
At each balanced sheet date and the settlement date prior to the settlement of liabilities, the fair value of
the liability is re-measured with its change consolidated in profit/loss.
When there is changes to the Company’s share-based payment plans, if the modification increases
the fair value of the equity instruments granted, corresponding recognition of service increase in
accordance with the increase in the fair value of the equity instruments; if the modification increases the
number of equity instruments granted, the increase in fair value of the equity instruments is recognized
as a corresponding increase in service achieved. Increase in the fair value of equity instruments refer to
the difference between the fair values of the equity instrument on the modified date before or after the
modification. If the Company modifies the vesting conditions in such manner conductive to the
employees, including the shortening of the vesting period, change or cancellation of the performance
conditions (rather than market conditions), the Company shall consider the modified vesting conditions
upon the disposal of vesting conditions. If the modification reduces the total fair value of shares paid or
the Company uses other methods not conductive to employees to modify the terms and conditions of
share- based payment plans, it will continue to be accounted for the services obtained in the accounting
treatment, as if the change had not occurred, unless the Company cancelled some or all of the equity
instruments granted.
During the vesting period, if the Company cancel equity instruments granted which will be treated
as accelerating the exercise of rights and any amount to be charged over the remaining vesting period
should be recognized immediately in the profit or loss, while at the same time recognize the capital
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reserve. Employees or other parties can choose to meet non-vesting conditions, but for those that are not
met in the vesting period, the Company will treat it as cancellation of equity instruments granted.
25. Revenue
√Applicable □Not Applicable
Revenue is the total inflow of economic benefits formed by the Company and its subsidiaries
during day-to-day operations which might lead to increase of shareholders’ equity and be irrelevant to
capital invested by shareholders.
The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,
recognized revenue when the client obtains the control right of relevant goods or services.
Where the contract includes two or more performance obligations, during the starting date of the
contract, the Company and its subsidiaries allocate transaction price to various single performance
obligation in accordance with the relevant proportion of separate selling price of goods or services
promised by various single performance obligation, and measure revenue in accordance with transaction
price allocated to various single performance obligation.
Transaction price is the amount of consideration that the Company and its subsidiaries are expected
to be entitled to collect due to transfer of goods and services transferred to the client, excluding the
amount collected for any third party. The transaction price recognized by the Company and its
subsidiaries does not exceed the amount of recognized revenue when relevant uncertainties are
eliminated and might not incur material carrying back. The amount that is expected to be returned to the
client is taken as liability of returned goods and is not recorded in transaction price.
When one of the following conditions is met, the Company and its subsidiaries perform
performance obligations during a certain time horizon, otherwise, it belongs to fulfilling performance
obligations at a certain time point:
① The client simultaneously obtains and consumes economic benefits as the Company and its
subsidiaries perform the contract;
② The client is able to control goods under construction during the process of performance of the
Company and its subsidiaries;
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③ Goods produced by the Company and its subsidiaries during the process of performance have no
alternative use, and the Company and its subsidiaries are entitled to collect the amount for the cumulative
completed and performed portion to date during the entire contractual period.
For the performance obligations performed during a certain time horizon, the Company and its
subsidiaries recognize revenue in accordance with the schedule of performance during such time horizon.
When the schedule of performance can’t be reasonably recognized, where the costs that have been
incurred by the Company and its subsidiaries are estimated to be compensated, revenue shall be
recognized in accordance with the amount of costs that has been incurred until the schedule of
performance can be reasonably confirmed.
For performance obligations performed at a certain time point, the Company and its subsidiaries
recognize revenue at the time point when the client obtains the control right of relevant goods or services.
When judging whether the client has obtained control right over goods or services, the Company and its
subsidiaries will consider the following signs:
① The Company and its subsidiaries enjoy the right of instant collection over such goods and services;
② The Company and its subsidiaries have transferred the material objects of such goods to the client;
③ The Company and its subsidiaries have transferred statutory ownership right of the goods or major
risks and rewards of the ownership to the client;
⑤ The client has accepted such goods or service.
The right that the Company and its subsidiaries are entitled to collect the consideration for having
transferred goods or services to the client (and such right depends on other factors other than time lapse)
is presented as contractual asset, and contractual asset is provisioned impairment on the basis of expected
credit losses. The right owned by and unconditionally collected from the client by the Company and its
subsidiaries (only depend on time lapse) shall be presented as accounts receivable. Obligations that the
Company and its subsidiaries have collected or shall collect consideration from the client and shall
transfer goods or services to the client are presented as contractual obligations.
Specific accounting policies relating to major activities that the Company and its subsidiaries
obtain revenue are described as follows:
(1) Sale of goods
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Generally, contracts for sale of goods between the Company and its clients only include
performance obligation of transferring the whole machine of home appliance. Generally, on the basis of
taking into account the following factors comprehensively, the Company recognizes the revenue at the
time point of transfer of control right of goods: the right of instant collection for obtaining goods, transfer
of major risks and rewards on ownership of goods, transfer of statutory ownership of goods, transfer of
assets of material objects of goods, the client’s acceptance of such goods.
(2) Construction contract income
Construction contract between the Company and the client generally includes performance
obligations of construction and installation of commercial air-conditioner and smart home, because the
client is able to control goods under construction during the Company’s performance process, the
Company takes them as performance obligations performed during a certain time horizon, and recognizes
revenue in accordance with the schedule of performance, and it is an exemption when the schedule of
performance can’t be reasonably confirmed. The Company confirms the schedule of performance of
services provided in accordance with the input method. When the schedule of performance can’t be
reasonably confirmed, where the costs that have been incurred by the Company are estimated to be
compensated, the revenue will be recognized in accordance with the amount of costs that has been
incurred until the schedule of performance can be reasonably confirmed.
(3) Warranty obligations
According to contractual agreement and regulations of laws, the Company provides quality
assurance for goods sold and project constructed. For guarantee-type quality assurance in order to ensure
the client that goods sold comply with existing standards, the Company conducts accounting treatment
in accordance with estimated liabilities. For service-type quality assurance in order to ensure the client
that we also provide a separate service other than that the goods sold comply with existing standards, the
Company takes it as a separate performance obligation, and allocates partial transaction price to service-
type quality assurance in accordance with the relevant proportion of separate selling price of goods and
service-type quality assurance, and recognizes revenue when the client obtains control right over services.
When assessing whether quality assurance provides a separate service other than ensuring the client that
the goods sold comply with existing standards, the Company shall consider factors such as whether such
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quality assurance is under statutory requirements or industrial practices, the term of quality assurance
and the nature of the Company’s commitment to perform the tasks.
26. Government grants
√Applicable □Not Applicable
(1) Types of government grants
Government grants refer to the gratuitous monetary assets or non-monetary assets obtained by the
Company from the government, excluding the capital invested by the government as an owner. The
government grants are mainly divided into asset-related government grants and revenue-related
government grants.
(2) Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in current profit or loss on
an even basis over the useful life of relevant assets; government grants measured at nominal amount shall
be recognized directly in current profit or loss. Revenue-related government grants shall be treated as
follows: ① those used to compensate relevant expenses or losses to be incurred by the enterprise in
subsequent periods are recognized as deferred income and recorded in current profit or loss when such
expenses are recognized; ② those used to compensate relevant expenses or losses that have been incurred
by the enterprise are recorded directly in current profit or loss.
(3) Basis for determination of asset-related government grant and revenue-related government grant
If the government grant received by the Company is used for purchase, construction or other project
that forms a long-term asset, it is recognized as asset-related government grant.
If the government grant received by the Company is not asset-related, it is recognized as revenue-
related government grant.
Government grant received without clear objective shall be classified as asset-related government
grant or revenue-related government grant by:
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① Government grant subject to a certain project shall be separated according to the proportion of
expenditure budget and capitalization budget, and the proportion shall be reviewed and modified if
necessary on each balance sheet date;
② Government grant shall be categorized as revenue-related if its usage is described in general statement
and no specific project is specified in the relevant government document.
(4) Amortization method and determination of amortization period of deferred revenue related to
government grants
Asset-related government grant received by the Company is recognized as deferred revenue and is
evenly amortized to the profit or loss in the current period over the estimated useful life of the relevant
asset starting from the date when the asset is available for use.
(5) Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of the period when
there is clear evidence that the relevant conditions set out in the financial subsidy policies and regulations
are fulfilled and the receipt of such financial subsidy is assured.
Other government grants other than those measured at the account receivable is recognized upon
actual receipt of such subsidies.
27. Deferred tax assets/deferred tax liabilities
√Applicable □Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company are recognized:
(1) Based on the difference between the carrying amount and the tax base amount of an asset or a liability
(items not recognized as assets and liabilities but their tax base is ascertained by the tax laws and
regulations, the tax base is the difference), deferred income tax asset or deferred income tax liability is
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calculated using the applicable tax rate prevailing at the expected time of recovering the asset or
discharging the liability.
(2) Deferred income tax asset is recognized to the extent that there is enough taxable income for the
deduction of the deductible temporary difference. At the balance sheet date, if there is sufficient evidence
that there will be enough taxable income in the future for the deduction of the deductible temporary
difference, the deferred income tax asset not recognized in previous accounting period is recognized. If
there is no sufficient evidence that there will be enough taxable income in the future for the deduction of
the deferred income tax asset, the carrying value of the deferred income tax asset is reduced.
(3) Deferred income tax liability is recognized for taxable temporary difference arising from investments
in subsidiaries and associated companies, unless the Company could control the time of reversal of the
temporary differences and the temporary differences would not be probably reversed in the foreseeable
future. For deductible temporary differences arising from investments in subsidiaries and associated
companies, deferred income tax asset is recognized if the temporary difference will be very probably
reversed in the foreseeable future and it is highly probable that taxable income will be available in the
future to deduct the deductible temporary difference.
(4) No deferred income tax liability is recognized for a temporary difference arising from the initial
recognition of goodwill. No deferred income tax asset or deferred income tax liability is recognized for
the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction
other than a business combination, which affects neither accounting profit nor taxable income (or
deductible loss). At the balance sheet date, deferred income tax assets and deferred income tax liabilities
are measured at the tax rates that apply to the period when the asset is expected to be recovered or the
liability is expected to be settled.
28. Other significant accounting policies and accounting estimates
√Applicable □Not Applicable
(1) Asset securitisation
The Company has securitised certain receivables to entrust the assets to specific-purpose entities
which would issue such securities to investors. As asset service provider, the Company is responsible for
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the provision of maintenance and daily management of the assets, formulation of annual asset disposal
plans, formulation and implementation of asset disposal plan, signing of relevant asset disposal
agreements and preparation asset service reports on a regular basis.
In applying the accounting policy for the securitisation of financial assets, the Company has
considered the extent to which the risk and reward of the assets have been transferred to other entities,
and the extent to which the Company exercises control over the entity:
① When the Company has transferred substantially all risk and reward relating to the ownership of a
financial asset, such financial asset is derecognised;
② When the Company retains substantially all risk and reward relating to the ownership of a financial
asset, the Company continues to recognise such financial asset;
③ If the Company neither transfers nor retains substantially all risk and reward relating to the ownership
of a financial asset, the Company considers whether it has control over the financial asset. If the Company
does not retain control, the financial asset is derecognised, and the rights and obligations arising from or
retained the transfer are recognised as assets and liabilities, respectively. If the Company retains control,
the financial asset is recognised according to the extent of continued involvement in the financial assets.
(2) Hedge accounting
Hedge refers, in respect of the risk exposure arising from the company’s management of specific
risks such as foreign exchange risks, interest rate risks, price risks and credit risks, to risk management
activity of designating financial instruments as hedging instruments such that the change in the fair value
or cash flow of the hedging instruments can be expected to set off the change in the fair value or cash
flow of the hedged item.
The hedged item refers to an item designated for hedge against the risk of change in fair value or
cash flow that can be reliably measured.
Hedging instruments are financial instruments designated for hedge, the change in fair value or
cash flow of which is expected to set off the change in the fair value or cash flow of the hedged item.
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The Company assesses whether the hedge relationship fulfills the requirement for hedge
effectiveness at the inception date of the hedge and continuously in subsequent periods. The effectiveness
of hedge refers to the extent to which the change in the fair value or cash flow of the hedging instruments
can offset the change in the fair value or cash flow of the hedged item caused by the risk against which
the hedge is made. The change in the fair value or cash flow of a hedging instrument in excess or shortfall
of the change in the fair value or cash flow of the hedging instruments can offset the change in the fair
value or cash flow of the hedged item represents the ineffective portion of the hedge.
(3) Significant accounting estimates
In the course of applying accounting policies, the Company is required to make judgements,
estimations and assumptions on the carrying values of statement items that cannot be accurately measured
owing to uncertainties to which operating activities are subject. Such judgements, estimations and
assumptions are made based on the past experience of the management and taking into consideration of
other relevant factors. Such judgements, estimations and assumptions affect the reported amounts of
income, expenses, assets and liabilities and the disclosure of contingent liabilities as at the balance sheet
date. However, the actual outcome resulting from the uncertainty of such estimates could be different
from the current estimates of the management, thereby resulting in significant adjustments to the carrying
value of the future assets or liabilities affected. The Company regularly reviews such judgements,
estimations and assumptions on a going concern basis. If the change in accounting estimates affects only
the current period in which the change occurs, the affected amount is recognized for the period in which
the change occurs; if both the current period and future periods are affected, the affected amount is
recognised for the current period and the future periods.
At the balance sheet date, important aspects in which the Company is required to make judgements,
estimations and assumptions on the amount of items on the financial statements are as follows:
① Estimated liabilities
The Company estimates and makes provision for product warranty and estimated contract loss
according to contract terms, existing knowledge and historical experience. When such contingencies
have given rise to a present obligation, and the performance of such present obligation is likely to result
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in the outflow of economic benefit from the Company, the Company recognises estimated liabilities for
the contingencies based on the best estimates of expenses required for the performance of relevant present
obligations. The recognition and measurement of estimated liabilities is dependent to a large extent on
management judgement. In the course of judgement, the Company is required to assess factors such as
risks, uncertainties and the time value of currency relating to such contingencies. In particular, the
Company recognises estimated liabilities in respect of after-sales undertaking to customers for return and
replacement, maintenance and installation of goods sold. The recognition of estimated liabilities has
taken into account the maintenance experience and data of the Company for recent years, although past
experience in maintenance may not reflect maintenance in the future. Any increase or decrease in this
provision might affect the profit or loss of future years.
② Provision for ECL
The Company measures ECL through default risk exposure and the ECL rate, which is determined
based on the default probability rate and default loss rate. In determining the ECL rate, the Company
uses data such as internal historic credit loss experience and adjusts the historic data taking into
consideration current conditions and prospective information. When considering prospective information,
indicators adopted by the Company include the risk of economic downside, expected growth in
unemployment rate, and changes in external market conditions, technical conditions and customer
conditions. The Company monitors and reviews the assumptions relating to ECL computation on a
regular basis. There was no significant change to aforesaid estimation technique and key assumptions
during the year.
③ Impairment provisions for inventory
The Company makes impairment provisions for inventory of which cost is higher than net
realisable value and obsolete and slow-moving inventory based on the lower of cost and net realisable
value according to its inventory accounting policy. The impairment of inventory to its net realisable value
is based on assessment of the sellability of inventory and its net realisable value. The authentication of
inventory impairment requires the management to obtain conclusive evidence and make judgment and
estimates taking into consideration factors such as the purpose of inventory and post-balance sheet date
events. Any difference between the actual outcome and the previous estimate will affect the carrying
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value of inventory and the charge or reversal of impairment provisions for inventory during the period
in which the estimates are modified.
④ Fair value of financial instruments
For financial instruments without an active trading market, the Company determines its fair value
using valuation techniques. Such valuation techniques include discounted cash flow model analysis and
others. During the assessment, the Company is required to make estimates on future cashflow, credit risk,
market volatility rate and relevance and select an appropriate discount rate. Such relevant assumptions
are subject to uncertainty, and any change will affect the fair value of financial instruments.
⑤ Impairment of other equity instrument investments
The Company’s determination of impairment for other equity instrument investments is largely
dependent on the management’s judgment and assumptions to determine whether impairment should be
recognised. In the course of making judgments and assumptions, the Company is required to assess the
extent and duration of the fair value of the investment being lower than cost, as well as the financial
conditions and short-term business prospects of the investee, including industry conditions, technological
revolution, credit rating, default rate and counterparty risks.
⑥ Impairment provision for long-term assets
At the balance sheet date, the Company assesses whether there are indications of possible
impairment of non-current assets other than financial assets. In addition to the annual impairment test,
intangible assets with indefinite useful life are also tested for impairment when there are indications of
the same. Impairment tests on non- current assets other than financial assets are conducted when there
are indications that its carrying value may not be recoverable. An impairment has occurred when the
carrying value of an asset or asset group is higher than the recoverable amount (the higher of net fair
value less disposal cost and the present value of estimated future cash flow). The net fair value less
disposal cost is determined with reference to the agreed selling price of similar assets in a fair transaction
or observable market prices less incremental costs attributable directly to the disposal of such asset. In
estimating the present value of future cashflow, significant judgement is required to be made in respect
of the production volume and selling price of the asset or (asset group), relevant operating cost and
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discount rate for the computation of present value. The Company takes into consideration all available
relevant information when making estimates on the recoverable amount, including forecasts on
production volume, selling price and relevant operating costs based on reasonable and justifiable
assumptions. The Company conducts goodwill impairment tests at least annually. This requires estimates
on the present value of future cashflow of asset group or portfolio of asset groups to which goodwill has
been allocated. When making estimates on the present value of future cashflow, the Company is required
to make estimates on cashflow generated from future asset group or portfolio of asset groups, and at the
same time select an appropriate discount rate to determine the present value of future cashflow.
⑦ Depreciation and amortisation
Depreciation and amortisation of investment properties, fixed assets and intangible assets is
charged on a straight-line basis over their useful life after taking their residual values into account. The
Company reviews the useful life on a regular basis to determine the amount of depreciation and
amortisation charge to be allocated to each reporting period. The useful life is determined based on past
experience relating to similar assets taking into consideration expected technological upgrades. If there
are significant changes in previous estimates, the depreciation and amortisation charge for future periods
will be adjusted.
⑧ Deferred income tax assets
The Company recognises deferred income tax assets in respect of all unutilised tax losses, to the
extent that it is probable that sufficient taxable profit will be available to offset the loss. This requires the
exercise of significant judgement by the Company’s management to estimate the timing and amount of
future taxable profit, taking into account its tax planning strategy, to determine the amount of deferred
income tax assets to be recognised.
⑨ Income tax
In the Company’s usual operating activities, the final tax treatment and computation of certain
transactions are subject to uncertainty. Whether certain items can be presented on a pretax basis is subject
to approval of the competent taxation authority. If the final confirmed outcome of such taxation matters
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is different from the amount of the initial estimates, such difference will affect the current income tax
and deferred income tax for the period of final confirmation.
⑩ Provision for sales rebate
The Company and its subsidiaries adopt a sales rebate policy for sales agent customers. Based on
relevant provisions of the sales agreements, vetting of specific transactions, market conditions, channel
inventory level and past experience with reference to the status of completion of agreed appraisal
indicators by sales agent customers, the Company and its subsidiaries makes estimates on and provision
for sales rebate on a regular basis. The provision of sales rebate involves judgment and estimation by the
management. In the event of any material change in previous estimates, the aforesaid difference will
affect the sales rebate for the period for which the estimates are changed.
29. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
□Applicable √Not Applicable
(2) Changes in significant accounting estimates
□Applicable √Not Applicable
VI. TAXATION
1. Main tax categories and rates
Tax types Basis of taxation Tax rate
Taxable revenue from sales of goods and
Value-added tax 6%, 9%, 13%
rendering services
City maintenance and
Circulation tax payable 7%
construction tax
(Local) education
Circulation tax payable 1%, 2%, 3%
surcharge
Statutory tax rate or preferential rates as
EIT Taxable income
follows
2. Preferential tax
√Applicable □Not Applicable
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Companies subjected to preferential tax and preferential tax rate:
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Haier Smart Home Co., Ltd. 2021 Annual Report
Tax rate
Company Preferential tax
(%)
entitled to the preferential taxation policies
Qingdao Haier Refrigerator Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Special Refrigerator Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Dishwasher Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Special Freezer Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Intelligent Home Appliance Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Electronics Holding Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Freezer Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Refrigerator Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Air-conditioning Co., Limited 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Zhengzhou Haier Air-conditioning Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Shenyang Haier Refrigerator Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Air-Conditioner Electronics Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Meier Plastic Powder Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Hai Gao Design and Manufacture Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Hairi High Tech Model Co., Ltd 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited 15.00
as a hi-tech enterprise
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Haier Smart Home Co., Ltd. 2021 Annual Report
entitled to the preferential taxation policies
Qingdao Haier Intelligent Technology Development Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Haier Freezer Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Central Air Conditioning Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Air Conditioner Gen Corp., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Haier U+smart Intelligent Technology (Beijing) Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Beijing Zero Micro Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Washing Machine Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Washing Machine Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Jiaonan Haier Washing Machine Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Shunde Haier Electric Co., Ltd. 15.00
as a hi-tech enterprise
Tianjin Haier Cleaning Electrical Appliances Co., Ltd. ( 海津天 entitled to the preferential taxation policies
15.00
司公限有器电涤洗尔 ) as a hi-tech enterprise
Qingdao Economic and Technological Development Zone Haier entitled to the preferential taxation policies
15.00
Water Heater Co., Ltd. as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Water Heater Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Drum Washing Machine Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Strauss Water Equipment Co., Ltd. 15.00
as a hi-tech enterprise
Qingdao Lejia Haier Smart Living Appliances Co., Ltd. ( 乐岛青 entitled to the preferential taxation policies
15.00
司公限有器电活生慧智尔海家 ) as a hi-tech enterprise
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Haier Smart Home Co., Ltd. 2021 Annual Report
entitled to the preferential taxation policies
Qingdao Haier New Energy Electric Appliance Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Washing Appliance Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Ririshun Lexin Cloud Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Drum Washing Machine Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Electronic Plastic Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Wei Xi Intelligent Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Special Refrigerating Appliance Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Smart Kitchen Appliance Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Air Conditioning Electronics Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Beijing Lingli Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Hairuijiejing Electronics Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Shanghai Haier Medical Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Yunshang Yuyi IOT Technology Co., Ltd. 15.00
as a hi-tech enterprise
Haier (Shanghai) Home Appliance Research and Development entitled to the preferential taxation policies
15.00
Center Co., Ltd. as a hi-tech enterprise
entitled to the preferential taxation policies
Haier (Shenzhen) R&D Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Ririshun Lejia IOT Technology Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Smart Electrical Equipment Limited 15.00
as a hi-tech enterprise
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Haier Smart Home Co., Ltd. 2021 Annual Report
entitled to the preferential taxation policies
Laiyang Haier Smart Kitchen Appliance Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Guangdong Heilong Intelligent Technology Co. Ltd] 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Dalian Haier Refrigerator Co., Ltd. 15.00
as a hi-tech enterprise
entitled to the preferential taxation policies
Chongqing Haier Electronics Sales Co., Ltd. and some Western
15.00 under the Western Development initiative of
companies
the PRC
entitled to the preferential taxation policies
Chongqing Xin Ririshun Electric Sales Co., Ltd. and some
15.00 under the Western Development initiative of
Western companies
the PRC
entitled to the preferential taxation policies
Chongqing Haier Air-conditioning Co., Ltd. 15.00 under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Refrigeration Appliance Co., Ltd. 15.00 under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Guizhou Haier Electronics Co., Ltd. 15.00 under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Washing Machine Co., Ltd 15.00 under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Water Heater Co., Ltd 15.00 under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Drum Washing Machine Co., Ltd 15.00 under the Western Development initiative of
the PRC
entitled to the preferential policies as a
Haier Smart Home (Qingdao) Network Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Haier Smart Home (Qingdao) Network Operations Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haixiangxue Human Resources Co., Ltd. 2.50
small/micro enterprise
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Haier Smart Home Co., Ltd. 2021 Annual Report
entitled to the preferential policies as a
Qingdao Three-Winged Bird Technology Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Haier Smart Home Technology (Hebei Xiong’an) Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haier Quality Testing Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haiyongcheng Certification Service Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haishuzhi Enterprise Consultancy Service Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haier Innovative Technology Co., Ltd. 2.50
small/micro enterprise
Qingdao Ririshun Lexin Information Technology Service Co., entitled to the preferential policies as a
20.00
Ltd. small/micro enterprise
entitled to the preferential policies as a
Dalian Free Trade Zone Haier Refrigerator Trading Co., Ltd. 5.00
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haimeihui Management Consulting Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
GE Appliance (Shanghai) Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Shanghai Haier Zhongzhi Fang Chuang Ke Management Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Tianjin Internet of Clothing Ecosystem Technology Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Dalian Haier Precise Manufacturing Co,. Ltd. 5.00
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haizhi Yunlan Technology Co., Ltd. 2.50
small/micro enterprise
entitled to the preferential policies as a
Qingdao Haixianghui Technology Co., Ltd. 2.50
small/micro enterprise
entitled to half deduction the preferential
Qingdao Haier Technology Co., Ltd. 10.00
taxation policies as a key software enterprise
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VII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIAL
STATEMENTS
Unless otherwise specified, the following closing balances represent the amount as at 31 December
2021 and opening balances represent the amount as at 31 December 2020; amount for the period
represents the amount from 1 January to 31 December 2021 and amount for the previous period
represents the amount from 1 January to 31 December 2020.
1. Monetary funds
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Cash on hand 3,085,964.28 2,257,666.98
Cash in bank 44,771,536,799.60 45,312,481,450.19
Other cash balances 1,082,547,511.52 1,152,993,342.34
Total 45,857,170,275.40 46,467,732,459.51
Include: —total amount of overseas
8,966,246,518.74 10,409,047,820.91
deposits
Other explanation
The investment fund in the closing balance of other monetary funds was RMB51,432,853.25, deposit
on third party payment platforms was RMB131,445,165.97 and the security deposit was
RMB755,120,965.62, the frozen fund was RMB7,619,238.06, and other restricted fund was
RMB136,929,288.62.
2. Financial assets held for trading
Items Closing balance Opening balance
Short-term wealth management
2,168,622,090.00 1,862,036,322.21
products
Investments in other equity
330,557,610.82 83,949,637.05
instruments
Investment funds 150,516,274.37 113,759,845.57
Forward foreign exchange contracts 136,379,553.90 105,446,693.00
Total 2,786,075,529.09 2,165,192,497.83
3. Derivative financial assets
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Items Closing balance Opening balance
Forward foreign exchange contracts 72,822,190.59 52,194,232.55
Forward commodity contracts 6,997,783.42 25,644,774.08
Total 79,819,974.01 77,839,006.63
4. Bills receivable
(1) Bills receivable presented by types
Items Closing balance Opening balance
Bank acceptance notes 13,053,809,505.49 3,091,631,183.91
Commercially acceptance notes 368,076,810.80 11,056,075,267.03
Balance of bills receivable 13,421,886,316.29 14,147,706,450.94
Allowance for bad debts 67,095,248.00 11,356,696.60
Bills receivable, net 13,354,791,068.29 14,136,349,754.34
(2) Changes in allowance for bad debts of bills receivable in the current period:
□Applicable √Not Applicable
Increase for the Decrease for the
current period current period
Write-
Opening Provision for
Items off/ Closing balance
balance the current Other
Reversal other
period movement
move
ment
Allowance for bad debts 11,356,696.60 61,256,000.00 5,517,448.60 67,095,248.00
Total 11,356,696.60 61,256,000.00 5,517,448.60 67,095,248.00
The bills receivable pledged by the Company at the end of the period was RMB12,526,757,275.50.
5. Accounts receivable
① Accounts receivable are disclosed by aging as follow:
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Aging Closing balance Opening balance
Within one year 14,782,898,997.57 15,866,291,515.38
1–2 years 375,662,087.58 229,618,450.58
2–3 years 78,861,353.76 91,669,887.74
Over 3 years 135,768,657.33 184,125,877.54
Balance of accounts receivable 15,373,191,096.24 16,371,705,731.24
Allowance for bad debts 742,172,698.81 441,681,444.57
Accounts receivable, net 14,631,018,397.43 15,930,024,286.67
② By method of provision of allowance for bad debts
Closing balance
Percentage
Categories Allowance for of
Book balance Carrying value
bad debts provision
(%)
Account receivables subject to
provision for bad debts on a 381,406,983.17 320,303,932.13 83.98 61,103,051.04
separate basis
Account receivables subject to
provision for bad debts on a 14,991,784,113.07 421,868,766.68 2.81 14,569,915,346.39
collective basis
Total 15,373,191,096.24 742,172,698.81 4.83 14,631,018,397.43
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(continued)
Opening balance
Categories Allowance for bad Percentage of
Book balance Carrying value
debts provision (%)
Account receivables subject to
provision for bad debts on a 1,737,051.69 1,737,051.69 100.00
separate basis
Account receivables subject to
provision for bad debts on a 16,369,968,679.55 439,944,392.88 2.69 15,930,024,286.67
collective basis
Total 16,371,705,731.24 441,681,444.57 2.70 15,930,024,286.67
③ Account receivables subject to provision for bad debts on a collective basis as at the end of the
period
√Applicable □Not Applicable
Percentage of
Allowance for bad
Items Book balance provision
debts
(%)
Within 1 year 14,560,959,317.86 312,565,470.27 2.15
1-2 years 223,861,765.61 9,396,866.15 4.20
2-3 years 75,991,817.89 23,388,497.43 30.78
Over 3 years 130,971,211.71 76,517,932.83 58.42
Total 14,991,784,113.07 421,868,766.68 2.81
④Changes in allowance for bad debts of accounts receivable in the current period:
Increase for the Decrease for the
current period current period
Items Opening balance Provision for the Closing balance
Other Write-off/ other
current period Reversal
movement movement
Allowance
for bad 441,681,444.57 408,834,958.95 46,625,275.84 61,718,428.87 742,172,698.81
debts
⑤ The aggregate amount of the top 5 account receivables as at the end of the period was
RMB3,856,035,612.12, accounting for 25.08% of the book balance of account receivables.
⑥ Actual write-off of accounts receivable in the current period
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The amount of accounts receivable actually written off in the current period is RMB32,949,945.78
and there is no important bad debt write-off of accounts receivable.
⑦ The company’s accounts receivable that were terminated due to the transfer of financial
assets in the current period
In the current period, the amount of accounts receivable that the company terminated due to the
transfer of financial assets was RMB4,127,671,197.04 and the transfer method was outright sale
factoring/asset securitization.
⑧ Restricted accounts receivable in the current period
The amount of accounts receivable restricted at the end of the period is RMB1,913,582,226.30.
6. Prepayments
(1) Prepayments are presented by aging:
Aging Closing balance Opening balance
Within one year 816,905,110.58 698,370,175.05
1–2 years 22,367,994.84 30,590,250.54
2–3 years 9,728,842.63 4,580,733.23
Over 3 years 8,231,174.95 32,280,992.88
Total 857,233,123.00 765,822,151.70
(2) The total amount of the top 5 in the prepayments at the end of the period is
RMB174,076,576.41, which accounts for 20.31% of the prepayment balance.
7. Other receivables
Presented by item:
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Interest receivable 294,379,438.82 322,473,254.91
Dividend receivable 4,915,409.42
Other receivables 1,660,702,724.43 1,390,303,134.99
Total 1,955,082,163.25 1,717,691,799.32
Interest receivable
√ Applicable □ Not Applicable
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Haier Smart Home Co., Ltd. 2021 Annual Report
Unit and Currency: RMB
Item Closing balance Opening balance
Within one year 231,011,687.28 230,234,039.92
1–2 years 47,983,727.86 82,575,210.18
2–3 years 15,384,023.68 8,925,141.80
Over 3 years 738,863.01
Total 294,379,438.82 322,473,254.91
Dividend receivable
√Applicable □Not Applicable
Unit and Currency: RMB
Item (or investee) Closing balance Opening balance
Within one year 4,915,409.42
1–2 years
2–3 years
Over 3 years
Total 4,915,409.42
Other receivables
① Other receivables are disclosed by aging as follows:
Aging Closing balance Opening balance
Within one year 1,273,332,768.49 931,793,427.44
1–2 years 109,677,138.52 417,514,929.49
2–3 years 355,219,038.13 61,251,809.96
Over 3 years 113,113,998.61 75,401,513.32
Balance of other receivables 1,851,342,943.75 1,485,961,680.21
Allowance for bad debts 190,640,219.32 95,658,545.22
Other receivables, net 1,660,702,724.43 1,390,303,134.99
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Haier Smart Home Co., Ltd. 2021 Annual Report
② The total amount of the top 5 other receivables at the end of the period is
RMB588,207,363.50, which accounts for 31.77% of the book balance of other receivables.
③ Provision of allowance for bad debts
Stage 1 Stage 2 Stage 3
Expected credit losses for Lifetime expected Lifetime expected credit
Allowance for bad debts Total
the coming 12 months credit losses (not losses (credit-impaired)
credit-impaired)
31 December 2020 12,652,199.27 83,006,345.95 95,658,545.22
Provision for the current period 106,691,852.67 106,691,852.67
Reversal for the current period 751,371.76 3,588,800.00 4,340,171.76
Write-off and others for the
6,570,006.81 800,000.00 7,370,006.81
current period
31 December 2021 112,022,673.37 78,617,545.95 190,640,219.32
④ Changes in allowance for bad debt provision of other receivables in the current period
Increase for the Decrease for the
current period current period
Opening
Items Provision for the Closing balance
balance Other Write-off/ other
current period Reversal
movement movement
Allowance for
95,658,545.22 106,691,852.67 4,340,171.76 7,370,006.81 190,640,219.32
bad debts
⑤ Other receivables written off during the period
The amount of other receivables actually written off in the current period is RMB5,202,064.68 and
no significant other receivables are written off for bad debts.
⑥ Other receivables mainly include deposits, quality guarantees, employee loans, tax refunds,
and advance payments, etc.
8. Inventories
(1) Category of inventories
Closing Balance Opening Balance
Items Book value Impairment Impairment
Book value balance
balance Provision Provision
Raw materials 5,160,836,755.15 117,428,681.85 2,785,611,125.08 115,958,355.70
Work in progress 115,676,026.77 336,866,878.61
Finished goods 35,952,553,480.95 1,248,466,540.71 27,613,569,305.90 1,173,115,549.14
Total 41,229,066,262.87 1,365,895,222.56 30,736,047,309.59 1,289,073,904.84
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Haier Smart Home Co., Ltd. 2021 Annual Report
(2) Impairment provision of inventories
Increase for the Decrease for the
current period current period
Opening Provision for
Items Other Write-off/ Closing balance
balance the current
moveme Reversal other
period
nt movement
Raw materials 115,958,355.70 26,258,008.75 7,348,287.53 17,439,395.07 117,428,681.85
Work in progress
Finished goods 1,173,115,549.14 1,044,919,101.14 6,170,082.33 963,398,027.24 1,248,466,540.71
Total 1,289,073,904.84 1,071,177,109.89 13,518,369.86 980,837,422.31 1,365,895,222.56
9. Contractual assets
(1) Details
Closing Balance Opening Balance
Items Impairment Impairment
Book value balance Book value balance
Provision Provision
Relating to construction service contract 304,434,294.70 263,412,927.58
Total 304,434,294.70 263,412,927.58
10. Other current assets
(1) Details
Closing Balance Opening Balance
Items Impairment Impairment
Book value balance Book value balance
Provision Provision
Bank deposit for wealth management products 316,590,333.42 554,131,037.76
Deductible taxes 3,273,993,417.28 2,439,951,209.94 2,907,303.98
Returns cost receivables 585,140,752.69 328,552,987.70 418,107,603.27 242,502,616.01
Others 71,809,601.50 118,077,350.40
Total 4,247,534,104.89 328,552,987.70 3,530,267,201.37 245,409,919.99
(2) Impairment Provision
Increase for the Decrease for the Closing
Items Opening balance
current period current period balance
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Haier Smart Home Co., Ltd. 2021 Annual Report
Provision for the Write-off/
Other
current period Reversal other
movement
movement
Deductible input tax 2,907,303.98 2,905,520.72 1,783.26
Returns cost receivables 242,502,616.01 328,552,987.70 242,502,616.01 328,552,987.70
Total 245,409,919.99 328,552,987.70 2,905,520.72 242,504,399.27 328,552,987.70
11. Long-term equity investments
√Applicable □Not Applicable
Increase/decrease for the current period
Adjustment in
Investees Opening balance Investment profit Declaration of
Investment other Other changes
recognized under cash dividends or
increase comprehensive in equity
equity method profits
income
Associate ：
Haier Group Finance Co., Ltd. 6,526,237,270.67 631,292,558.96 -16,151,956.03 -218,400,000.00
Bank of Qingdao Co., Ltd. 2,463,096,567.92 199,119,144.81 58,051,969.41 -66,019,246.02
Wolong Electric (Jinan) Motor Co., Ltd. 143,847,870.70 23,879,508.29 -15,890,000.00
Qingdao Hegang New Material
297,154,935.85 20,073,071.70 -4,734,751.34
Technology Co., Ltd.
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited 385,797,036.73 90,366,894.80 -82,565,558.94
Partnership)
Mitsubishi Heavy Industries Haier
654,581,961.84 94,920,014.89 -66,600,000.00
(Qingdao) Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration
415,298,165.93 18,829,952.52 -25,074,310.40
Equipment Co., Ltd.
Qingdao Haier Multimedia Co., Ltd 328,987,205.07 -51,884,641.19
Qingdao Haier Moulds Co., Ltd. 259,696,084.44 9,462,450.10
Hefei Feier Smart Technology Co.,
1,491,024.72 -1,225,918.45
Ltd.
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Anhui Kunhe Smart Technology Co.,
3,000,000.00 -1,122,425.86
Ltd.
Zhejiang Futeng Fluid Technology
84,150,000.00 -2,051,152.25
Co., Ltd.
Beijing Mr. Hi Network Technology
7,507,759.75
Company Limited
Beijing Xiaobei Technology Co., Ltd. 2,687,341.82
Beijing ASU Tech Co., Ltd. 32,365,969.45 -21,104,770.00 4,268,500.56
Shenzhen Genyuan Environmental
6,914,487.73
Protection Technology Co., Ltd.
Qingdao Haimu Investment Management
2,349,240.51 116,059.19
Co., Ltd.
Qingdao Haimu Smart Home Investment
47,870,696.66 11,553,965.78
Partnership (Limited Partnership)
Guangzhou Heying Investment
288,209,197.58 -2,650,839.24 235,219.53
Partnership (Limited Partnership)
Qingdao Home Wow Cloud Network
2,629,009.63 -28,959.13
Technology Co., Ltd.
Qingdao Ririshun Service Co., Ltd. 33,010,000.00 -1,693,481.32
Bingji (Shanghai) Corporate Management
928,444,178.47 43,756,309.41
Co., Ltd.
Youjin (Shanghai) Corporate
1,687,262,142.67 79,556,926.19
Management Co., Ltd.
RRS (Shanghai) Investment Co., Ltd. 3,066,931,168.49 144,648,956.72
Haier Best Water Technology Co., Ltd. 33,455,159.59 52,627,176.00 -6,296,778.20
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited 120,000,000.00 -991,032.97
Partnership)
Qingdao Ririshun Huizhi Investment Co.,
2,100,000.00 -16,517.22
Ltd.
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Qingdao Xinshenghui Technology
10,000,000.00 -35,226.48
Co., Ltd.
Meiling Candy Washing Machine Co.,
22,558,307.10 193,924.97
Ltd.
EuropaltersItaliaS.r.l. 9,361,965.48
Konan Electronic Co., Ltd. 77,561,552.87 1,597,435.48 -9,620,675.74 -264,600.00
HNR Company (Private) Limited 92,141,887.27 31,133,180.32 -9,219,748.62
HPZ LIMITED 66,827,745.66 9,235,751.42 -4,794,448.11
HaierRayaElectricS.A.E 10,741,234.10 1,257,900.00 -1,430,626.70
CONTROLADORAMABES.A.deC.V
3,667,310,241.31 590,464,695.25 -66,623,131.23 15,816,589.94 -74,984,722.17
.
MiddleEast Air conditioning
19,002,595.66 -6,770,031.76 -1,913,665.77
Company,Limited
Total 21,694,068,040.19 157,746,202.24 1,905,784,458.80 -50,271,656.09 15,350,339.16 -549,798,437.53
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(Continued)
Increase/decrease for the
Impairment
current period
Provision
Investees The disposal Closing balance
Other Closing
of the
movement Balance
investment
Associate ：
Haier Group Finance Co., Ltd. 185,731,501.78 7,108,709,375.38
Bank of Qingdao Co., Ltd. 2,654,248,436.12
Wolong Electric (Jinan) Motor Co., Ltd. 151,837,378.99
Qingdao Hegang New Material Technology Co., Ltd. 312,493,256.21
Qingdao Haier SAIF Smart Home Industry Investment
393,598,372.59
Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Air-
682,901,976.73
conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. 409,053,808.05 -21,000,000.00
Qingdao Haier Multimedia Co., Ltd 277,102,563.88 -88,300,000.00
Qingdao Haier Moulds Co., Ltd. 269,158,534.54
Hefei Feier Smart Technology Co., Ltd. 265,106.27
Anhui Kunhe Smart Technology Co., Ltd. 1,877,574.14
Zhejiang Futeng Fluid Technology Co., Ltd. 82,098,847.75
Beijing Mr. Hi Network Technology Company Limited 7,507,759.75 -7,507,759.75
Beijing Xiaobei Technology Co., Ltd. 2,687,341.82 -2,687,341.82
Beijing ASU Tech Co., Ltd. 15,529,700.01
Shenzhen Genyuan Environmental Protection Technology
6,914,487.73 -6,914,487.73
Co., Ltd.
Qingdao Haimu Investment Management Co., Ltd. 2,465,299.70
Qingdao Haimu Smart Home Investment Partnership (Limited
59,424,662.44
Partnership)
Guangzhou Heying Investment Partnership (Limited 285,793,577.87
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Haier Smart Home Co., Ltd. 2021 Annual Report
Partnership)
Qingdao Home Wow Cloud Network Technology Co., Ltd. 2,600,050.50
Qingdao Ririshun Service Co., Ltd. 31,316,518.68
Bingji (Shanghai) Corporate Management Co., Ltd. 972,200,487.88
Youjin (Shanghai) Corporate Management Co., Ltd. 1,766,819,068.86
RRS (Shanghai) Investment Co., Ltd. 3,211,580,125.21
Haier Best Water Technology Co., Ltd. 79,785,557.39
Huizhixiangshun Equity Investment Fund (Qingdao)
119,008,967.03
Partnership (Limited Partnership)
Qingdao Ririshun Huizhi Investment Co., Ltd. 2,083,482.78
Qingdao Xinshenghui Technology Co., Ltd. 9,964,773.52
Meiling Candy Washing Machine Co., Ltd. 22,752,232.07
EuropaltersItaliaS.r.l. 9,361,965.48
Konan Electronic Co., Ltd. 69,273,712.61
HNR Company (Private) Limited 114,055,318.97
HPZ LIMITED 71,269,048.97
HaierRayaElectricS.A.E 10,568,507.40
CONTROLADORAMABES.A.deC.V. 4,131,983,673.10
MiddleEast Air conditioning Company,Limited 10,318,898.13
Total 185,731,501.78 23,358,610,448.55 -126,409,589.30
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Haier Smart Home Co., Ltd. 2021 Annual Report
12. Investments in other equity instruments
(1) Details of investments in other equity instruments
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
SINOPEC Fuel Oil Sales Corporation Limited 1,290,487,901.40 1,117,637,000.00
Haier COSMO IOT Ecosystem Technology Co., Ltd. 2,812,000,000.00 1,396,555,521.94
Other 746,221,537.56 144,832,743.60
Total 4,848,709,438.96 2,659,025,265.54
(2) Dividends from investment in other equity instruments during the current period:
Items Amount for the current period
SINOPEC Fuel Oil Sales Corporation
57,678,519.95
Limited
Other 880,275.10
Total 58,558,795.05
13. Investment properties
(1) The changes in investment properties measured at cost this year are as follows:
Items Houses and buildings Land use rights Total
I. Original book value
1. Opening balance 46,978,578.83 2,128,550.51 49,107,129.34
2. Increase for the period
(1) External acquisition
(2) Inventories/fixed assets/construction in progress
transferred in
(3) Increase in business combinations
3. Decrease for the period
(1) Disposal 11,716,051.65 11,716,051.65
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(2) Disposal of subsidiaries
(3) Other transferring out
4. Translation difference of foreign currency statement -1,239,815.68 -1,239,815.68
5. Closing balance 34,022,711.50 2,128,550.51 36,151,262.01
II. Accumulated depreciation and accumulated
amortization
1. Opening balance 20,129,742.37 590,384.16 20,720,126.53
2. Increase for the period
(1) Provision or amortization 1,296,955.14 40,236.22 1,337,191.36
3. Decrease for the period
(1) Disposal 10,722,484.32 10,722,484.32
(2) Disposal of subsidiaries
(3) Other transferring out
4. Translation difference of foreign currency statement -148,460.04 -148,460.04
5. Closing balance 10,555,753.15 630,620.38 11,186,373.53
III. Provision for impairment
1. Opening balance
2. Increase for the period
(1) Provision
3. Decrease for the period
(1) Disposal
(2) Disposal of subsidiaries
(3) Other transferring out
4. Translation difference of foreign currency statement
5. Closing balance
IV. Book value
1. Closing book value 23,466,958.35 1,497,930.13 24,964,888.48
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2. Opening book value 26,848,836.46 1,538,166.35 28,387,002.81
(2) The depreciation and amortization amount charge for the period is RMB1,337,191.36.
(3) The recoverable amount of the investment real estate of the Company at the end of the period
is not less than its book value, so no provision for impairment is made.
14. Fixed assets
Presented by item
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Fixed assets 22,302,546,431.63 20,894,802,468.57
Disposals of fixed assets 4,543,369.52 16,987,772.82
Total 22,307,089,801.15 20,911,790,241.39
1
）（ Fixed assets:
Transportation
Items Houses and buildings Production equipment
equipment
I. Original book value:
1. Opening balance 10,162,375,605.28 24,419,389,978.14 169,128,209.23
2. Increase for the period
(1) Acquisition 90,801,047.72 1,006,202,589.34 5,104,975.09
(2) Construction in progress
1,412,983,726.05 2,381,586,393.12 17,694,321.22
transferred in
(3) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 55,567,496.52 871,744,635.26 11,723,854.89
(2) Disposal of subsidiaries 6,926,964.50
(3) Transfer to hold for sale
4. Translation difference of foreign
-256,723,859.20 -375,264,070.37 -1,119,962.72
currency statements
5. Closing balance 11,353,869,023.33 26,553,243,290.47 179,083,687.93
II. Accumulated depreciation
1. Opening balance 3,513,815,327.49 11,613,034,474.08 99,044,833.13
2. Increase for the period
(1) Provision 492,924,941.20 2,309,299,744.13 18,925,788.82
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Haier Smart Home Co., Ltd. 2021 Annual Report
(2) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 26,407,163.11 628,235,406.18 9,785,922.11
(2) Disposal of subsidiaries 6,383,333.90
(3) Transfer to hold for sale
4. Translation difference of foreign
-57,880,698.45 -79,705,314.18 -234,440.54
currency statements
5. Closing balance 3,922,452,407.13 13,208,010,163.95 107,950,259.30
III. Provision for impairment
1. Opening balance 33,638,997.63 39,684,984.39 185,490.35
2. Increase for the period
(1) Provision 4,234,330.15 948.59
(2) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 19,989,491.58
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Translation difference of foreign
-4,139,559.42 -2,282,260.87 -12,953.81
currency statements
5. Closing balance 29,499,438.21 21,647,562.09 173,485.13
IV. Book value
1. Closing book value 7,401,917,177.99 13,323,585,564.43 70,959,943.50
2. Opening book value 6,614,921,280.16 12,766,670,519.67 69,897,885.75
Fixed assets (continued)
Items Office furniture Other Total
I. Original book value:
1. Opening balance 953,174,443.16 2,313,836,002.70 38,017,904,238.51
2. Increase for the period
(1) Acquisition 11,926,966.11 103,267,926.65 1,217,303,504.91
(2) Construction in progress
186,749,076.20 269,993,951.27 4,269,007,467.86
transferred in
(3) Increase in business
combinations
3. Decrease for the period
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Haier Smart Home Co., Ltd. 2021 Annual Report
(1) Disposal or write-off 97,545,918.17 102,341,010.65 1,138,922,915.49
(2) Disposal of subsidiary 172,000.00 7,098,964.50
(3) Transfer to hold for sale
4. Translation difference of foreign
-23,368,552.40 -120,369,213.64 -776,845,658.33
currency statements
5. Closing balance 1,030,764,014.90 2,464,387,656.33 41,581,347,672.96
II. Accumulated depreciation
1. Opening Balance 484,523,249.85 1,333,389,832.83 17,043,807,717.38
2. Increase for the period
(1) Provision 156,708,729.58 234,997,884.46 3,212,857,088.19
(2) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 70,524,439.03 77,143,107.86 812,096,038.29
(2) Disposal of subsidiary 163,400.00 6,546,733.90
(3) Transfer to hold for sale
4. Translation difference of foreign
-5,339,893.54 -72,757,899.31 -215,918,246.02
currency statements
5. Closing Balance 565,204,246.86 1,418,486,710.12 19,222,103,787.36
III. Provision for impairment
1. Opening balance 367,009.63 5,417,570.56 79,294,052.56
2. Increase for the period
(1) Provision 42,859.26 346,792.91 4,624,930.91
(2) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 24,657.37 260,018.77 20,274,167.72
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
-126,683.44 -385,904.24 -6,947,361.78
currency statements
5. Closing balance 258,528.08 5,118,440.46 56,697,453.97
IV. Book value
1. Closing book value 465,301,239.96 1,040,782,505.75 22,302,546,431.63
2. Opening book value 468,284,183.68 975,028,599.31 20,894,802,468.57
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(2) In the current period, the balance of the construction in progress transferred to the original value of
the fixed assets in a total of RMB4,269,007,467.86.
(3) There was no mortgage secured by the fixed assets mortgage at the end of the period.
(4) Disposals of fixed assets
Reason for
Items Closing Balance Opening Balance transferring to
disposal
Relocation of Qingdao
4,543,369.52 12,964,689.10 Demolition
Industrial Park
Other 4,023,083.72 Scrap cleanup
Total 4,543,369.52 16,987,772.82
15. Construction in progress
Presented by item
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing Balance Opening Balance
Construction in progress 4,183,263,398.79 3,610,195,094.37
Construction materials
Total 4,183,263,398.79 3,610,195,094.37
CONSTRUCTION IN PROGRESS
）（
1 Balance of construction in progress
√Applicable □Not Applicable
Unit and Currency: RMB
Closing Balance Opening Balance
Projects Book balance Impairment Book Value Book balance Impairment Book Value
Provision provision
America GEA Project 722,008,600.99 722,008,600.99 518,260,493.01 518,260,493.01
Smart home appliance
598,122,551.15 598,122,551.15 291,584,097.58 291,584,097.58
technology project
Foshan freezer Project 199,726,996.70 199,726,996.70 89,437,456.94 89,437,456.94
Hefei Refrigerator Project 208,080,465.14 208,080,465.14 87,566,220.44 87,566,220.44
Special freezer Project 220,203,225.72 220,203,225.72 26,181,149.22 26,181,149.22
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Haier Smart Home Co., Ltd. 2021 Annual Report
Closing Balance Opening Balance
Projects Book balance Impairment Book Value Book balance Impairment Book Value
Provision provision
Haier Russian Project 182,497,069.58 182,497,069.58 76,966,572.40 76,966,572.40
Haier Indian Project 179,479,688.03 179,479,688.03 400,955,285.59 400,955,285.59
Europe Candy Project 153,117,404.68 153,117,404.68 611,529,115.13 611,529,115.13
Qingdao Haier Washing
139,065,246.00 139,065,246.00 107,072,469.09 107,072,469.09
Machine Project
Zhengzhou New Energy
125,734,579.67 125,734,579.67 134,884,592.49 134,884,592.49
Project
New Zealand FPA Project 111,516,266.46 111,516,266.46 96,050,392.73 96,050,392.73
Wuhan Haier freezer
103,052,450.36 103,052,450.36 29,444,043.15 29,444,043.15
Project
Haier Dishwasher Project 91,964,708.57 91,964,708.57 25,231,410.35 25,231,410.35
Beijing Haixianghui
87,901,666.83 87,901,666.83 11,010,911.27 11,010,911.27
Project
Tianjin Haier Washing
59,409,379.45 59,409,379.45 28,524,965.12 28,524,965.12
Appliance Project
Hailvyuan Recycling
58,589,285.46 58,589,285.46
Technology Project
Haier Air Conditioning
Electronics 57,933,662.48 57,933,662.48 56,560,330.52 56,560,330.52
Project
Special Refrigerator
55,838,238.24 55,838,238.24 28,379,142.82 28,379,142.82
Project
Hefei Haier Drum
Washing 54,949,612.93 54,949,612.93 21,461,405.85 21,461,405.85
Machine Project
Chongqing Haier Drum
Washing 49,077,644.27 49,077,644.27 29,138,857.36 29,138,857.36
Machine Project
Jiaonan Washing Machine
47,486,780.72 47,486,780.72 48,681,689.86 48,681,689.86
Project
Others 678,712,857.08 1,204,981.72 677,507,875.36 892,112,229.30 837,735.85 891,274,493.45
Total 4,184,468,380.51 1,204,981.72 4,183,263,398.79 3,611,032,830.22 837,735.85 3,610,195,094.37
）（
2 Details of significant changes of construction in progress for the period
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Increase for
Opening Transfer to Other Exchange Closing Source of
Project name the current
balance fixed assets decrease differences balance fund
period
America GEA Project 518,260,493.01 679,115,465.43 460,892,584.42 -14,474,773.03 722,008,600.99 Self-funding
Smart home appliance Self-funding
291,584,097.58 306,538,453.57 598,122,551.15
technology project
Foshan freezer Project 89,437,456.94 324,364,137.25 214,074,597.49 199,726,996.70 Self-funding
Hefei Refrigerator Self-funding
87,566,220.44 264,844,650.10 144,330,405.40 208,080,465.14
Project
Special freezer Project 26,181,149.22 220,770,669.22 26,748,592.72 220,203,225.72 Self-funding
Haier Russian Project 76,966,572.40 358,283,591.35 248,927,128.96 -3,825,965.21 182,497,069.58 Self-funding
Self-funding
Haier Indian Project 400,955,285.59 522,285,330.49 732,409,681.02 -11,351,247.03 179,479,688.03
/fund raising
Europe Candy Project 611,529,115.13 304,791,921.03 637,122,648.23 -126,080,983.25 153,117,404.68 Self-funding
Qingdao Haier Self-funding
Washing Machine 107,072,469.09 31,992,776.91 139,065,246.00
Project
Zhengzhou New Self-funding
Energy 134,884,592.49 119,251,117.02 128,401,129.84 125,734,579.67
Project
New Zealand FPA Self-funding
96,050,392.73 142,298,231.49 119,808,789.54 -7,023,568.22 111,516,266.46
Project
Wuhan Haier freezer Self-funding
29,444,043.15 82,772,652.72 9,164,245.51 103,052,450.36
Project
Haier Dishwasher Self-funding
25,231,410.35 159,346,735.80 92,613,437.58 91,964,708.57
Project
Beijing Haixianghui Self-funding
11,010,911.27 132,587,372.62 55,696,617.06 87,901,666.83
Project
Tianjin Haier Washing Self-funding
28,524,965.12 59,601,486.19 28,717,071.86 59,409,379.45
Appliance Project
Hailvyuan Self-funding
Recycling Technology 58,589,285.46 58,589,285.46
Project
Haier Air Self-funding
Conditioning
56,560,330.52 31,788,177.06 30,414,845.10 57,933,662.48
Electronics
Project
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Special Refrigerator Self-funding
28,379,142.82 64,543,973.25 37,084,877.83 55,838,238.24
Project
Hefei Haier Drum Self-funding
Washing Machine 21,461,405.85 44,908,605.51 11,420,398.43 54,949,612.93
Project
Chongqing Haier Self-funding
Drum Washing 29,138,857.36 52,427,535.19 32,488,748.28 49,077,644.27
Machine Project
Jiaonan Washing Self-funding
48,681,689.86 58,666,753.38 59,861,662.52 47,486,780.72
Machine Project
Self-funding
Others 892,112,229.30 994,366,893.44 1,198,830,006.07 -8,936,259.59 678,712,857.08
/fund raising
Total 3,611,032,830.22 5,014,135,814.48 4,269,007,467.86 -171,692,796.33 4,184,468,380.51
）（ 3 Impairment provision of construction in progress
Increase for
Opening Transfer to fixed Other Exchange Closing
Project name the current
balance assets decrease differences balance
period
Lejia IOT Project 837,735.85 837,735.85
Others 372,747.55 -5,501.68 367,245.87
Total 837,735.85 372,747.55 -5,501.68 1,204,981.72
16. Right-of-use assets
Transportation
Items Houses and buildings Production equipment
equipment
I. Original book value:
1. Opening balance 3,363,666,439.28 39,645,820.91 194,507,833.03
2. Increase for the current period
(1) Increase 590,379,460.52 6,330,101.00 57,543,799.23
3. Decrease for the current period
(1) Disposal 250,622,974.89 226,268.14 23,908,878.73
(2) Disposal of subsidiary
4. Translation difference of foreign
-140,113,129.94 -2,607,473.37 -23,137,512.47
currency statements
5. Closing balance 3,563,309,794.97 43,142,180.40 205,005,241.06
II. Accumulated depreciation
1. Opening balance 885,680,688.93 12,842,957.01 89,243,999.98
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2. Increase for the current period
(1) Provision 532,226,885.47 12,630,223.08 53,395,839.74
3. Decrease for the current period
(1) Disposal 187,866,877.23 226,268.14 23,849,617.69
(2) Disposal of subsidiary
4. Translation difference of foreign
-44,598,513.32 -6,708,374.15 -13,962,599.81
currency statements
5. Closing balance 1,185,442,183.85 18,538,537.80 104,827,622.22
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value
1. Closing book balance 2,377,867,611.12 24,603,642.60 100,177,618.84
2. Opening book balance 2,477,985,750.35 26,802,863.90 105,263,833.05
Right-of-use assets (continued)
Items Office furniture Other Total
I. Original book value:
1. Opening balance 48,709,675.83 355,706,633.95 4,002,236,403.00
2. Increase for the current period
(1) Increase 18,479,561.69 77,418,603.09 750,151,525.53
3. Decrease for the current period
(1) Disposal 2,873,441.85 32,226,895.74 309,858,459.35
(2) Disposal of subsidiary
4. Translation difference of foreign
-7,430,164.08 -8,669,580.22 -181,957,860.08
currency statements
5. Closing balance 56,885,631.59 392,228,761.08 4,260,571,609.10
II. Accumulated depreciation
1. Opening balance 14,096,013.92 160,514,483.89 1,162,378,143.73
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2. Increase for the current period
(1) Provision 9,913,547.88 75,492,399.87 683,658,896.04
3. Decrease for the current period
(1) Disposal 2,873,441.85 32,052,592.44 246,868,797.35
(2) Disposal of subsidiary
4. Translation difference of foreign
-3,154,691.04 -4,189,200.17 -72,613,378.49
currency statements
5. Closing balance 17,981,428.91 199,765,091.15 1,526,554,863.93
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value
1. Closing book balance 38,904,202.68 192,463,669.93 2,734,016,745.17
2. Opening book balance 34,613,661.91 195,192,150.06 2,839,858,259.27
17. Intangible assets
Items Proprietary technology Licenses and franchises Land use rights
I. Original book value
1.Opening balance 1,842,005,662.53 4,010,777,802.58 1,200,138,465.93
2.Increase for the current period
(1) Purchase 170,453,877.93 110,696,693.03
(2) Internal research and
137,493,871.57
development
(3) Increase in business
combination
3. Decrease for the current period
(1) Disposal 26,777,550.69 38,133,428.22
(2) Disposal of subsidiary
(3) Transfer to hold for sale
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4. Translation difference of foreign
-100,044,350.84 60,451,857.10 -6,255,398.64
currency statements
5. Closing balance 1,852,677,632.57 4,241,683,537.61 1,266,446,332.10
II. Accumulated amortization
1. Opening balance 871,204,292.17 564,045,820.06 139,165,642.83
2. Increase for the current period
(1) Provision 152,156,601.55 123,653,462.19 76,470,555.49
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 26,763,782.11
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
-50,287,715.47 135,286,362.99 -335,926.52
currency statements
5. Closing balance 946,309,396.14 822,985,645.24 215,300,271.80
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value
1. Closing book balance 906,368,236.43 3,418,697,892.37 1,051,146,060.30
2. Opening book balance 970,801,370.36 3,446,731,982.52 1,060,972,823.10
Intangible assets (continued)
Application
Items Trademark rights Total
management
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software and others
I. Original book value
1. Opening balance 2,713,444,699.59 3,828,496,475.88 13,594,863,106.51
2. Increase for the current period
(1) Purchase 105,569,123.12 386,719,694.08
(2) Internal research and
405,327,526.09 542,821,397.66
development
(3) Increase in business
combination
3. Decrease for the current period
(1) Disposal 33,427,012.30 77,637,764.05 175,975,755.26
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
-204,300,544.66 -67,013,460.78 -317,161,897.82
currency statements
5. Closing balance 2,475,717,142.63 4,194,741,900.26 14,031,266,545.17
II. Accumulated amortization
1. Opening balance 1,946,261,208.96 3,520,676,964.02
2. Increase for the current period
(1) Provision 553,646,765.63 905,927,384.86
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 47,488,233.09 74,252,015.20
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
-11,286,960.87 73,375,760.13
currency statements
5. Closing balance 2,441,132,780.63 4,425,728,093.81
III. Impairment provision
1. Opening balance 56,040,248.43 56,040,248.43
2. Increase for the current period
(1) Provision 29,631,196.82 29,631,196.82
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 29,631,196.82 102,076.80 29,733,273.62
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(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Translation difference of foreign
-7,638.40 -7,638.40
currency statements
5. Closing balance 55,930,533.23 55,930,533.23
IV. Book Value
1. Closing book balance 2,475,717,142.63 1,697,678,586.40 9,549,607,918.13
2. Opening book balance 2,713,444,699.59 1,826,195,018.49 10,018,145,894.06
At the end of the period, the intangible assets developed through the Company accounted for the
17.06% of the original value at the end of the period.
18. Development cost
Decrease for the current period Translation
Increase for difference of
Opening Recognized as Included in Closing
Items the current Disposal of foreign
balance intangible current profit balance
period subsidiary currency
asset and loss
statements
91ABD. ERP
97,893,800.99 74,915,278.41 129,278,261.16 -1,584,565.77 41,946,252.47
IT Program
IOT Project 110,027,251.84 110,027,251.84
Others 69,852,923.14 634,136,234.69 413,543,136.50 209,806,757.83 -4,720,538.68 75,918,724.82
Total 167,746,724.13 819,078,764.94 542,821,397.66 209,806,757.83 -6,305,104.45 227,892,229.13
19. Goodwill
Effect of fluctuations
Increase for the Decrease for the
Items Opening balance in exchange rates for Closing balance
current period current period
the current period
GEA 19,382,602,366.26 -444,138,636.83 18,938,463,729.43
Candy 2,086,499,983.95 -209,377,998.39 1,877,121,985.56
Others 1,049,357,987.43 -37,840,641.66 1,011,517,345.77
Total 22,518,460,337.64 -691,357,276.88 21,827,103,060.76
In the case of a goodwill impairment test, the Company compares the carrying amount of the relevant
asset group or asset group combination (including goodwill) with its recoverable amount. If the
recoverable amount is less than the book value, corresponding difference will be recognized in profit or
loss.
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The recoverable amount of the asset group (including goodwill) is calculated with discounted
estimated future cash flow method based on a management-approved 5-15 years budget. Future cash
flows beyond the budget period are estimated using the estimated perpetual annual growth rate. The
perpetual annual growth rate (mainly 2%) adopted by the management is consistent with industry forecast
data and does not exceed the long-term average growth rate of each product. The management determines
the compound income growth rate (mainly 3%- 15.54%) and the EBITDA profit margin (mainly 3%-
14%) based on historical experience and market development forecasts, and adopts the pre-tax interest
rate that can reflect the specific risks of the relevant asset group as the discount rate (mainly 9.42%-
17.85%). The management analyzes the recoverable amount of each asset group based on these
assumptions and believes that there is no need to make provision for goodwill.
20. Long-term amortized expenses
Translation
difference of
Increase for the Amortization for Other
Items Opening balance foreign Closing balance
current period the current period decrease
currency
statements
Renovation 169,271,684.58 365,418,857.03 193,374,991.17 -34,833.08 341,280,717.36
Improvement
on leased 170,612,483.47 11,540,486.75 26,650,376.39 -1,673,364.70 153,829,229.13
property
Others 116,470,471.46 15,890,708.64 37,491,766.35 -1,302,971.33 93,566,442.42
Total 456,354,639.51 392,850,052.42 257,517,133.91 -3,011,169.11 588,676,388.91
21. Deferred income tax assets / deferred income tax liabilities
）（1 Deferred income tax assets before elimination
Items Closing balance Opening balance
Provision for assets impairment 354,806,051.43 374,373,978.37
Liabilities 1,402,480,307.20 1,745,260,196.51
Internal unrealized earnings eliminated
619,291,715.60 668,981,845.53
due to combination
Government grants 163,806,221.87 124,822,115.15
Uncovered losses 817,306,157.01 806,710,012.75
Others 286,586,600.19 237,331,301.90
Total 3,644,277,053.30 3,957,479,450.21
）（2 Deferred income tax liabilities before elimination
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Items Closing balance Opening balance
Asset amortisation 2,318,829,386.48 2,371,032,689.77
Remeasurement of fair value of the
reaming equity on the day when the 878,623,804.46 878,623,804.46
control right was lost
Changes in fair value of investments in
292,476,080.49 6,593,323.58
other equity instruments
Others 421,341,222.80 393,329,640.12
Total 3,911,270,494.23 3,649,579,457.93
）（3 The deferred income tax assets and the deferred income tax liabilities eliminated at the end
of the period was RMB1,789,467,320.40.
22. Other non-current assets
Items Closing balance Opening balance
Prepayments for equipment and land 1,859,693,694.07 1,403,997,069.15
Others 304,690,319.07 521,764,491.02
Total 2,164,384,013.14 1,925,761,560.17
23. Short-term borrowings
(1) Category of short-term borrowings
√Applicable □Not Applicable
Unit and Currency: RMB
Item Closing balance Opening balance
Borrowings — secured by pledge 255,103,925.36 472,098,030.36
Borrowings — secured by credit 10,661,927,352.96 7,200,328,217.00
Borrowings — secured by guarantee 304,896,830.40
Interest payable for short-term borrowings 4,284,025.67 15,481,918.52
Total 11,226,212,134.39 7,687,908,165.88
24. Financial liabilities held for trading
Items Closing balance Opening balance
Forward foreign exchange contracts 6,294,014.40 26,952,508.66
Total 6,294,014.40 26,952,508.66
25. Derivative financial liabilities
√Applicable □Not Applicable
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Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange contracts 60,527,532.76 188,695,788.30
Interest rate swap agreement 19,684,900.48 50,886,744.60
Total 80,212,433.24 239,582,532.90
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26. Bills payable
√Applicable □Not Applicable
Unit and Currency: RMB
Category Closing balance Opening balance
Commercial acceptance notes 3,022,602,833.31 2,710,903,499.32
Bank acceptance notes 22,000,635,573.41 18,525,153,554.35
Total 25,023,238,406.72 21,236,057,053.67
27. Accounts payables
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Accounts payables 42,344,857,144.49 36,309,048,800.85
Total 42,344,857,144.49 36,309,048,800.85
The book balance at the end of the period was mainly the unpaid expenditures on material and
labour.
28. Contractual liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Contractual liabilities 10,016,870,340.44 6,269,584,417.32
Total 10,016,870,340.44 6,269,584,417.32
The book balance at the end of the period is mainly the receipt in advance.
29. Payables for staff remuneration
(1) Payables for staff remuneration
√Applicable □Not Applicable
Unit and Currency: RMB
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Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
I. Short-term remuneration 3,626,057,331.52 23,693,152,376.11 23,335,695,144.59 3,983,514,563.04
II. Post-employment
benefits defined 21,043,040.29 1,224,424,105.01 1,226,517,443.13 18,949,702.17
contribution plan
III. Termination benefits 9,818,188.41 1,956,763.54 1,956,763.54 9,818,188.41
IV. Other benefits due within
106,117,562.97 115,774,332.29 120,292,761.92 101,599,133.34
one year
Total 3,763,036,123.19 25,035,307,576.95 24,684,462,113.18 4,113,881,586.96
(2) Short-term remuneration
√Applicable □Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
I. Salaries, bonus,
2,525,846,505.03 17,512,726,575.91 17,194,737,310.61 2,843,835,770.33
allowances and benefit
II. Employee welfare 320,384,691.00 973,611,847.84 971,999,744.62 321,996,794.22
III. Social benefit 183,954,347.24 1,575,512,243.06 1,587,820,756.64 171,645,833.66
IV. Housing fund 5,093,655.54 421,467,144.94 415,423,178.97 11,137,621.51
V. Labor union fee and
1,323,116.90 117,422,341.74 115,233,417.25 3,512,041.39
education fund
VI. Short-term compensated
276,729,127.32 420,876,453.84 429,392,416.31 268,213,164.85
leave
VII. Others 312,725,888.49 2,671,535,768.78 2,621,088,320.19 363,173,337.08
Total 3,626,057,331.52 23,693,152,376.11 23,335,695,144.59 3,983,514,563.04
(3) Defined contribution plan
√Applicable □Not Applicable
Unit and Currency: RMB
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Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
1. Basic pension insurance 20,356,802.61 1,144,702,494.45 1,146,662,819.95 18,396,477.11
2.Unemployment insurance 170,304.70 28,705,475.59 28,743,362.94 132,417.35
3.Enterprise annuity payment 515,932.98 51,016,134.97 51,111,260.24 420,807.71
Total 21,043,040.29 1,224,424,105.01 1,226,517,443.13 18,949,702.17
(4) Termination benefits
Items Closing balance Opening balance
Termination compensation 9,818,188.41 9,818,188.41
Total 9,818,188.41 9,818,188.41
30. Taxes payable
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Value-added tax 961,177,432.37 645,186,165.21
Corporate income tax 1,305,299,090.59 1,372,787,595.03
Individual income tax 94,858,745.38 144,339,932.23
City maintenance and construction tax 40,370,470.67 14,014,839.95
Education surcharge 16,171,169.64 5,970,374.68
The electrical and electronic products waste
95,522,090.50 88,989,555.00
treatment fund
Other taxes 90,284,462.69 129,834,269.97
Total 2,603,683,461.84 2,401,122,732.07
31. Other payables
Presented by item:
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Interest payable
Dividends payable 10,639,313.22
Other payables 17,513,520,752.48 17,063,294,004.33
Total 17,524,160,065.70 17,063,294,004.33
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）（1 Dividends payable:
Name of unit Closing balance Opening balance
Qingdao Ruidecheng Information Management
Consulting Enterprise (Limited Partnership) 1,191,000.00
Others 9,448,313.22
Total 10,639,313.22
）（2 Other payables:
Items Closing balance Opening balance
Other payables 17,513,520,752.48 17,063,294,004.33
Total 17,513,520,752.48 17,063,294,004.33
The closing balance mainly included the incurred but unpaid costs.
32.Non-current liabilities due within one year
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Long-term borrowings due within one year 6,745,950,334.20 4,950,555,670.08
Long-term payables due within one year 20,000,000.00
Lease liabilities due within one year 686,666,860.72 670,863,763.75
Anticipated liabilities due within one year 2,190,397,652.84 1,881,305,479.57
Total 9,623,014,847.76 7,522,724,913.40
33. Other current liabilities
Status of other current liabilities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Payable refund 655,801,519.33 540,552,003.81
Tax amount to be transferred to output tax 1,565,649,557.85 799,241,847.23
Ultra-short-term payable bonds 5,535,262,500.00
Others 13,079,047.64 16,053,035.75
Total 2,234,530,124.82 6,891,109,386.79
34. Long-term borrowings
√Applicable □ Not Applicable
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Unit and Currency: RMB
Items Closing balance Opening balance
Borrowings — unsecured by credit 3,038,573,824.53 11,821,416,259.81
Total 3,038,573,824.53 11,821,416,259.81
The interest rates of the Company’s long-term borrowings: 0.80%-7.50%.
35. Bonds payable
In November 2017, Harvest International Company, the Company’s wholly-owned subsidiary,
issued HK$8 billion five-year exchangeable corporate bonds, with a coupon rate of zero and a rate
on investment of 1%. In September 2020, the Company considered and approved the scheme to
convert the exchangeable bonds into convertible bonds. The underlying shares of the original
exchangeable bonds were changed from the shares of Haier Electronic to newly issued H-shares of
Haier Smart Home (referred to as EB to CB Scheme). On 23 December 2020, H-shares of Haier
Smart Home were listed and traded, and the EB-to-CB Scheme took effect. The outstanding principle
amount of the original exchangeable bonds was HK$7.993 billion. The maturity date, coupon rate
and yield rate of the bond remain unchanged. The liability component and equity component of
convertible bonds at the initial recognition:
Items Convertible corporate bonds on 23 December 2020
Initial recognition: 9,105,660,619.93
Including ：
Equities of the convertible bond 2,364,195,333.79
Liabilities of the convertible bond 6,741,465,286.14
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Changes in the liability portion of corporate bonds in the current period:
Less: bond Redemption
Increase for Accrued bond
interest paid for in the Shares converted in
Items Opening balance the current Interest for the Exchange rate impact Closing balance
the current current the current period
period current period
period period
Convertible
corporate 6,713,501,050.27 49,610,212.45 6,368,251,389.85 -60,129,824.05 334,730,048.82
bonds (CB)
Total 6,713,501,050.27 49,610,212.45 6,368,251,389.85 -60,129,824.05 334,730,048.82
36. Lease liabilities
Items Closing balance Opening balance
Lease liabilities 2,647,561,842.19 2,743,566,116.43
Less: lease liabilities due within one year 686,666,860.72 670,863,763.75
Total 1,960,894,981.47 2,072,702,352.68
37. Long-term payables
Items Closing balance Opening balance
Investment from CDB development fund 36,500,000.00 56,500,000.00
Others 63,102,707.76 61,703,261.27
Less: long-term payables due within one
20,000,000.00
year
Total 99,602,707.76 98,203,261.27
Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou)
Air-conditioning Co., Limited together with China Development Fund Co. Ltd. in 2015 and 2016,
China Development Fund Co. Ltd. invested RMB73 million in Qingdao Haier (Jiaozhou) Air-
conditioning Co., Limited. China Development Fund Co. Ltd. obtained an annual return of 1.2% by
means of dividends or buyback premium for the above investments. As of 31 December 2021, the
subsidiaries of the Company made buyback in amount of RMB36.5 million. From 2022 to 2025,
the Company and its subsidiaries will repurchase the investments made by China Development Fund
Co. Ltd. to the subsidiaries of the Company.
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38. Long-term employee benefits payable
√Applicable □ Not Applicable
(1) Presented by Long-term employee benefits payable
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
I. Post-employment benefits: net
517,077,143.43 602,802,957.77
liability of defined benefit plan
II. Termination benefits 453,425,129.57 429,651,733.32
III. Other long-term benefits
IV. Provision for work-related injury
202,649,488.64 213,320,333.26
compensation
Total 1,173,151,761.64 1,245,775,024.35
(2) Defined benefits plan
Some subsidiaries of the Company have set several defined benefit plans for the qualified
staff. Under these plans, the employees are entitled to the retirement benefits agreed in such
defined benefit plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary
and other risks.
The recent actuarial evaluation of the assets and the present value of defined benefit
obligations under such plans are determined by using the projected unit credit method.
① The defined benefit plan of Haier Asia Co., Ltd., a subsidiary of the Company
Actuarial assumptions used to defined benefit plans
Items Rate
Discount rate 0.50%
Expected rate of return 2.00%
Present value of defined benefit obligations
Items Amount
I. Opening balance 324,375,540.91
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II. Defined benefit cost recognized in current profit or loss 10,011,449.19
1. Current service cost 8,502,422.76
2. Past service cost
3. Settlement gains (loss indicated in ‘ － ’)
4. Interest cost 1,509,026.43
III. Defined benefit cost recognized in other comprehensive
-73,957.13
income
1. Actuarial loss (gain indicated in ‘ － ’) -73,957.13
IV. Other changes -55,160,610.85
1. The consideration paid at the time of settlement
2. Benefit paid -15,357,112.08
3. Exchange differences -39,803,498.77
V. Closing balance 279,152,422.12
Fair value of plan assets
Items Amount
I. Opening balance 371,501,327.98
II. Defined benefit cost recognized in current profit and loss 6,747,900.43
1. Interest income 6,747,900.43
III. Defined benefit cost recognized in other comprehensive
11,440,127.15
income
1. Return on plan assets (except those included in net
11,440,127.15
interests)
2. Changes in impact of asset cap (except those included in net
interests)
IV. Other changes -52,607,670.32
1. Employer contributions 2,770,993.80
2. Benefit paid -8,719,907.93
3. Exchange differences -46,658,756.19
V. Closing balance 337,081,685.24
Neither the Company’s ordinary shares or bonds, nor the properties occupied by the Company are
included in the plan assets.
Net liability (net asset) of defined benefit plan
Items Amount
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I. Opening balance -47,125,787.08
II. Defined benefit cost recognized in current profit or loss 3,263,548.76
III. Defined benefit cost recognized in other
-11,514,084.28
comprehensive income
IV. Other changes -2,552,940.52
V. Closing balance -57,929,263.12
The average term for the defined benefit obligation is 11.73 years at the balance sheet date.
② The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has provided post-employment defined benefit
plan of health care benefits to eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discount rate 2.91%
Present value of defined benefit obligations
Items Amount
I. Opening balance 151,567,760.38
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 10,034,855.69
1. Current service cost 6,640,419.89
2. Past service cost
3. Settlement gains (loss indicated in ‘ － ’)
4. Interest cost 3,394,435.80
IV. Defined benefit cost recognized in other
-12,591,840.29
comprehensive incomes
1. Actuarial loss (gain indicated in ‘ － ’) -12,591,840.29
V. Other changes -20,031,091.61
1. The consideration paid at the time of settlement
2. Benefit paid -8,640,362.09
3. Exchange differences -11,390,729.52
VI. Closing balance 128,979,684.17
Net liability (net asset) of defined benefit plan
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Items Amount
I. Opening balance 151,567,760.38
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 10,034,855.69
IV. Defined benefit cost recognized in other
-12,591,840.29
comprehensive incomes
V. Other changes -20,031,091.61
VI. Closing balance 128,979,684.17
The average term for the defined benefit obligation is 10.68 years at the balance sheet date.
③ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided post-retirement
defined benefit plan of health care benefits for the eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discount rate 2.62%
Present value of defined benefit obligations
Items Amount
I. Opening balance 293,063,281.71
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 4,996,390.09
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘ － ’)
4. Interest cost 4,996,390.09
IV. Defined benefit cost recognized in other
-29,917,008.35
comprehensive incomes
1. Actuarial loss (gain indicated in ‘ － ’) -29,917,008.35
V. Other changes -46,540,207.93
1. The consideration paid at the time of settlement
2. Benefit paid -24,853,891.14
3. Exchange differences -21,686,316.79
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VI. Closing balance 221,602,455.52
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance 293,063,281.71
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 4,996,390.09
IV. Defined benefit cost recognized in other
-29,917,008.35
comprehensive incomes
V. Other changes -46,540,207.93
VI. Closing balance 221,602,455.52
④ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
defined benefit plan of pension for the eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discount rate 2.61%
Present value of defined benefit obligations
Items Amount
I. Opening balance 224,286,521.09
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 3,928,310.86
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘ － ’)
4. Interest cost 3,928,310.86
IV. Defined benefit cost recognized in other
-7,089,253.36
comprehensive incomes
1. Actuarial loss (gain indicated in ‘ － ’) -7,089,253.36
V. Other changes -54,615,138.72
1. The consideration paid at the time of settlement
2. Benefit paid -38,055,774.79
3. Exchange differences -16,559,363.93
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VI. Closing balance 166,510,439.87
Fair value of plan assets
Items Amount
I. Opening balance 160,409,027.51
II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in other
1,407,910.01
comprehensive incomes
1. Return on plan assets (except those included in
1,407,910.01
net interests)
2. Changes in impact of asset cap (except those included in
net interests)
IV. Other changes -35,796,859.67
1. Employer contributions 14,186,495.90
2. Benefits paid out -38,055,774.79
3. Exchange differences -11,927,580.78
V. Closing balance 126,020,077.85
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance 63,877,493.58
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or
3,928,310.86
loss
IV. Defined benefit cost recognized in other
-8,497,163.37
comprehensive income
V. Other changes -18,818,279.05
VI. Closing balance 40,490,362.02
(3) Provision for work-related injury compensation
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, made a provision for
work-related injury claims for the staff injured during the production accidents from 1
January 1991, which was used to pay for the claim made by the injured staff. The provision
was calculated by Beechercarlson Insurance Services, LLC., based on actuarial method and
a discount rate of 3.72%.
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Items Amount
I. Opening balance 213,320,333.26
II. Business combination not under common control
III. Compensation recognized in current profit and loss 81,545,079.75
IV. Actual compensation paid -67,284,048.24
V. Other changes -24,931,876.13
VI. Closing balance 202,649,488.64
Classification of the balance of defined benefit plan
Items Closing balance Opening balance
Short-term Benefit 32,502,729.33 38,202,187.93
Long-term Benefit 517,077,143.43 602,802,957.77
Total 549,579,872.76 641,005,145.70
39. Estimated liabilities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Opening balance Closing balance
Active litigation 21,550,139.03 29,259,869.48
Others 238,570,708.44 252,996,489.56
Projection of warranty expenses and
1,182,723,189.26 1,666,309,118.07
installation fees
Total 1,442,844,036.73 1,948,565,477.11
Significant assumption and estimation relating to estimation of warranty expenses and installation fees :
the Company reasonably estimated the warranty expenses and installation fees rate based on its actual
expenses on the warranty expenses and installation fees as well as sales data in the past. The Company
estimated the warranty expenses and installation fees that are likely to be incurred in the future according
to its policies on the warranty expenses and installation fees, as well as the actual sales data.
40. Deferred income
√Applicable □ Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
Government
633,761,669.48 317,666,578.97 98,633,681.25 852,794,567.20
grants
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Total 633,761,669.48 317,666,578.97 98,633,681.25 852,794,567.20
41. Share capital
Increase for Decrease for
Opening Closing
Share category the current the current
balance balance
period period
I. Restricted shares
1. State-owned
shares
2. Shares held by
domestic non-state-
owned legal entities
3. Shares held by
domestic individuals
4. Shares held by
offshore non-state-
owned legal entities
II. Non-restricted
9,027,846,441 403,210,889 32,352,800 9,398,704,530
shares
1. Ordinary shares in
6,308,552,654 6,308,552,654
RMB
2. Domestic listed
foreign Shares
3. Offshore listed
2,719,293,787 403,210,889 32,352,800 3,090,151,876
foreign Shares
4. Others
III. Total shares 9,027,846,441 403,210,889 32,352,800 9,398,704,530
42. Other equity instruments
Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
Equity portion of
2,364,195,333.79 2,246,177,826.20 118,017,507.59
convertible bond
Total 2,364,195,333.79 2,246,177,826.20 118,017,507.59
43. Capital reserve
√Applicable □ Not Applicable
Unit and Currency: RMB
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Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
Capital
premium (Share 14,193,795,340.17 8,254,921,278.43 974,220,232.21 21,474,496,386.39
premium)
Others capital
813,680,267.23 265,903,666.66 4,734,751.34 1,074,849,182.55
reserve
Total 15,007,475,607.40 8,520,824,945.09 978,954,983.55 22,549,345,568.94
The main reasons for the change in capital premium: The conversion of convertible bonds (CB)
resulted in the increase in capital premium of RMB8,211,218,327.05; the cancellation of treasury stock
resulted in the decrease in capital premium of RMB793,935,316.13.
The main reasons for the change in other capital reserves: share-based payment resulted in the
increase in capital reserves of RMB 261,635,166.10.
44. Other comprehensive income
Amounts for the current period
Attributable to
Items Opening balance Closing balance
Deduction of Attributable to the
Amount before minority
Impact on income parent company Others
current income tax shareholders
tax after tax
after tax
a -292,647,416.24 -50,271,656.09 0.68 -50,414,905.68 143,250.27 1,591,633.47 -341,470,688.45
b -101,239,895.27 143,932,964.92 -42,933,731.28 102,858,281.74 -1,859,048.10 1,618,386.47
c -530,525,234.75 -1,400,161,188.22 -1,386,056,247.22 -14,104,941.00 -32,973.82 -1,916,614,455.79
d -159,428,469.24 1,472,225,880.04 -307,119,421.90 1,165,148,669.32 -42,211.18 56,149.52 1,005,776,349.60
e 37,624,286.44 50,627,475.68 -14,410,328.79 36,214,421.81 2,725.08 73,838,708.25
Total -1,046,216,729.06 216,353,476.33 -364,463,481.29 -132,249,780.03 -15,860,224.93 1,614,809.17 -1,176,851,699.92
Notes:
(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details
are as follows:
Item a represents other comprehensive income classified to profit and loss under the equity method.
Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).
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Item c represents exchange differences on translation of financial statements denominated in foreign
currencies.
(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details
are as follows:
Item d represents the change in fair value of investments in other equity instruments.
Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.
45. Surplus reserve
√Applicable □ Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance Closing balance
current period current period
Statutory surplus
2,997,677,738.01 393,281,370.24 3,390,959,108.25
reserve
Discretionary
26,042,290.48 26,042,290.48
surplus reserve
Reserve fund 11,322,880.64 11,322,880.64
Enterprise
10,291,630.47 10,291,630.47
expansion fund
Total 3,045,334,539.60 393,281,370.24 3,438,615,909.84
Pursuant to the Company Law of the People’s Republic of China and the Articles of Association, the
Company is required to appropriate the statutory surplus reserve at 10% of its net profit.
46. Undistributed profits
√Applicable □ Not Applicable
Items Amounts
Undistributed profits at the end of previous year 38,445,132,172.47
Change in accounting policy
Combination under common control 22,654,887.32
Undistributed profits at the beginning of the year 38,467,787,059.79
Add: net profit attributable to owners of the parent company 13,067,038,271.85
Other transfer in -7,703,624.31
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Adjustment due to implementation of enterprise accounting
184,038,262.10
standard ①
Profit available for appropriation for the year 51,711,159,969.43
Less: appropriation of statutory surplus reserve 393,281,370.24
Appropriation of staff incentive and welfare fund
Dividend payable for ordinary shares 3,410,744,270.39
Undistributed profits at the end of period 47,907,134,328.80
① The amount is the result of the adjustment to the opening amount for the implementation of
the new financial instruments standard for financial enterprises accounted for by the equity
method of the Company.
47. Operating income and operating cost
）（ 1 Operating income
Items Amount for the current period Amount for the previous period
Primary business 226,577,061,321.69 208,590,878,160.05
Other Business 979,082,296.48 1,132,551,920.98
Total 227,556,143,618.17 209,723,430,081.03
2
）（ Primary business income and primary business cost by product category
Amount for the current period Amount for the previous period
Categories Primary business Primary business Primary business Primary business
income cost income cost
Air conditioner 37,531,431,456.40 27,048,946,901.15 29,998,860,385.28 21,775,814,158.53
Refrigerator 71,569,789,213.81 48,835,867,469.21 61,538,038,448.75 41,567,754,922.29
Kitchen appliance 35,244,040,315.09 23,735,209,066.45 31,361,319,774.44 21,420,569,709.06
Water appliance 12,470,593,776.21 6,760,377,744.75 9,856,730,639.50 5,349,058,135.46
Washing machine 54,758,839,273.57 36,334,162,716.43 48,452,426,668.33 32,402,560,443.74
Equipment product
and integrated 15,002,367,286.61 13,523,061,580.33 27,383,502,243.75 24,610,805,601.74
channel services
Total 226,577,061,321.69 156,237,625,478.32 208,590,878,160.05 147,126,562,970.82
48. Taxes and surcharge
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
City maintenance and construction tax 302,029,468.26 222,160,876.09
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Education surcharge 216,731,035.53 158,108,924.81
Property tax 58,844,071.60 56,952,660.77
Land use tax 16,126,888.33 16,516,606.32
Stamp duty 176,130,521.55 159,658,266.08
Others 37,116,605.29 47,205,290.60
Total 806,978,590.56 660,602,624.67
49. Selling expenses
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
Selling expenses 36,553,667,004.06 33,641,711,147.72
Total 36,553,667,004.06 33,641,711,147.72
The Company’s selling expenses are mainly salary expenses, transportation and storage fees,
advertising and promotion fees, and after-sales expenses.
50. Administrative expenses
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
Administrative expenses 10,444,475,658.24 10,052,645,415.72
Total 10,444,475,658.24 10,052,645,415.72
The Company’s administrative expenses are mainly salary expenses, office fees, depreciation and
amortization of assets fees, etc.
51. R&D expenses
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
R&D expenses 8,357,332,946.25 6,852,861,422.32
Total 8,357,332,946.25 6,852,861,422.32
The Company's R&D expenses are mainly salary expenses, R&D equipment expenses,
inspection and testing fees.
52. Financial expenses
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Items Amount for the current period Amount for the previous period
Interest expense 712,448,120.18 1,327,091,393.08
Less: interest income 564,584,788.99 486,204,314.18
Less: cash discount 163,118,260.27 143,826,274.59
Exchange gains and losses 577,459,958.22 385,010,384.45
Others 124,159,947.90 114,128,146.46
Total 686,364,977.04 1,196,199,335.22
Interest expenditure in lease liabilities in the current period is RMB113,089,361.42.
53. Other income
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
Government grants related to revenue 874,974,469.27 1,081,735,842.10
Government grants related to assets 82,525,988.76 69,112,340.28
Total 957,500,458.03 1,150,848,182.38
54. Investment income (losses are represented by ‘-’)
Items Amount for the current period Amount for the previous period
Long-term equity investments income calculated by the equity
1,886,217,552.85 1,619,755,825.37
method
Investment income from disposal of long-term equity
5,189,653.78 2,261,114,345.13
investments
Investment income from other equity instrument investments
58,558,795.05 21,366,723.72
during holding period
Income from wealth management products 60,011,933.94 88,139,276.75
Investment income from disposal of financial assets measured
393,124,704.67 69,728,041.81
at fair value with changes included in current profit and loss
Total 2,403,102,640.29 4,060,104,212.78
55. Gains on changes in fair value (losses are represented by ‘-’)
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Items Amount for the current period Amount for the previous period
Change in fair value of forward foreign exchange contracts 53,963,469.20 40,882,087.10
Change in fair value of equity instrument investments 46,729,587.36 3,507,512.50
Others 18,584,567.29 18,240,148.20
Total 119,277,623.85 62,629,747.80
56. Credit impairment loss
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
Bad debts losses on bills receivable -55,738,551.40 3,700,000.00
Bad debts losses on accounts receivable -464,561,364.02 -170,080,605.76
Total -520,299,915.42 -166,380,605.76
57. Impairment loss on assets (losses are represented by ‘-’)
Amount for the previous
Items Amount for the current period
period
Impairment losses on inventory -1,057,658,740.03 -1,014,527,325.32
Impairment losses on other current assets -325,647,466.98 -230,024,566.63
Impairment losses on fixed assets -4,624,930.91 -413,079.67
Impairment losses on construction in progress -372,747.55 -837,735.85
Impairment losses on intangible assets -29,631,196.82 -46,077,744.47
Impairment losses on long-term equity investment -818,536.53 -43,750,000.00
Total -1,418,753,618.82 -1,335,630,451.94
58. Gains on disposal of assets (losses are represented by ‘-’)
Items Amount for the current period Amount for the previous period
Gains on disposal of non-current assets 127,727,521.31 33,997,251.62
Less: losses on disposal of non-current assets 16,743,801.27 46,804,842.58
Total 110,983,720.04 -12,807,590.96
59. Non-operating income
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
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Total gains on disposal of non-current assets 1,546,396.81 13,544,653.33
Quality claims and fines 37,375,030.81 43,211,550.06
Others 159,871,917.83 141,189,269.00
Total 198,793,345.45 197,945,472.39
60. Non-operating expenses
√Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the previous
Items Amount for the current period
period
Total losses on disposal of non-current assets 22,276,231.85 112,009,363.05
Others 136,964,547.59 129,908,824.86
Total 159,240,779.44 241,918,187.91
61. Income tax expenses
1
）（ Statement of income tax expenses
Items Amount for the current period Amount for the previous period
Current income tax expense 2,500,983,850.06 2,116,781,342.14
Deferred income tax expense 197,979,520.49 116,345,162.88
Total 2,698,963,370.55 2,233,126,505.02
2 Reconciliation between accounting profit and income tax expenses for the current period
）（
Items Amounts
Total accounting profit 15,916,030,549.06
Income tax expense calculated pursuant to statutory tax rate 3,979,007,637.26
Impact from different tax rates applicable to subsidiaries -494,977,318.87
Impact from adjustment to income tax in prior periods -354,744,458.06
Impact from non-taxable income -534,225,422.28
Impact from non-deductible cost, expense and loss 270,381,075.17
Impact from deductible provisional differences or deductible losses of unrecognized deferred tax -166,478,142.67
Total income tax expense 2,698,963,370.55
62. Other comprehensive income
√Applicable □ Not Applicable
Please refer to notes VII.44 for details.
63. Other cash received from operating activities
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√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period
Deposits and securities 185,423,029.27
Government grants 964,636,149.19
Non-operating income excluding government
96,076,482.19
grants
Interest income 566,384,075.56
Others 68,894,785.87
Total 1,881,414,522.08
64. Other cash paid to operating activities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period
Cash paid on selling expenses 17,323,147,912.48
Cash paid on administrative and R&D expenses 7,305,126,302.31
Cash paid on financial expenses 135,730,144.52
Non-operating expenses 43,959,971.99
Others 19,226,598.86
Total 24,827,190,930.16
65. Other cash paid to investing activities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period
Disposal of subsidiary 219,042,645.55
Others 250,000.00
Total 219,292,645.55
66. Other cash received from financing activities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period
Others 1,091,077.43
Total 1,091,077.43
300/365
Haier Smart Home Co., Ltd. 2021 Annual Report
67. Other cash paid to financing activities
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amount for the current period
Cash paid to lease 769,383,299.55
Repurchase of shares 3,221,079,401.36
Expenses from issuance of H-shares 176,588,472.20
Others 417,700.00
Total 4,167,468,873.11
68. Net profit adjusted to cash flow of operating activities
Net profit adjusted to cash flow of operating Amount for the previous
Amount for the current period
activities period
1. Net profit 13,217,067,178.51 11,329,152,124.25
Add: impairment provision for assets 1,939,053,534.24 1,502,011,057.70
Depreciation of fixed assets 3,897,853,175.59 3,954,878,769.18
Amortization of intangible assets 905,927,384.86 950,566,688.96
Amortization of long-term prepaid expenses 257,517,133.91 189,323,872.70
Losses on disposal of fixed assets, intangible assets and
-90,253,885.00 111,272,300.68
other long-term assets (‘-’ represents ‘gains’)
Loss and gains on change of fair value (‘-’ represents
-119,277,623.85 -62,629,747.80
‘gains’)
Financial expenses (‘-’ represents ‘gains’) 1,289,908,078.40 1,712,106,376.89
Loss on investments (‘-’ represents ‘gains’) -2,403,102,640.29 -4,060,104,212.78
Decrease in deferred income tax assets (‘-’ represents
115,721,268.20 -495,054,794.76
‘increase’)
Increase of deferred income tax liabilities (‘-’
82,258,252.29 611,399,957.64
represents ‘decrease’)
Decrease in inventories (‘-’ represents ‘increase’) -11,473,856,375.59 -3,118,305,579.15
Decrease of operational account receivables (‘-’
5,027,066,051.66 -5,382,355,896.89
represents ‘increase’)
Increase of operational account payables (‘-’ represents
10,123,490,037.44 9,956,434,869.15
‘decrease’)
Others 360,268,847.35 410,818,045.87
Net cash flow generated from operational activities 23,129,640,417.72 17,609,513,831.64
301/365
Haier Smart Home Co., Ltd. 2021 Annual Report
2. Significant investment and financing activities not
involving cash inflows and outflows:
Capital transferred from debts 6,368,251,389.85
Convertible corporate bonds due within one year
Fixed assets under finance lease
3. Net changes of cash and cash equivalents:
Cash balance at the end of the period 44,957,500,783.10 45,641,535,671.08
Less: cash balance at the beginning of the period 45,641,535,671.08 34,968,473,831.66
Add: cash equivalents balance at the end of the period
Less: cash equivalents balance at the beginning of the
period
Net increase of cash and cash equivalents -684,034,887.98 10,673,061,839.42
69. Cash and cash equivalents
Items Closing balance Opening balance
I. Cash 44,957,500,783.10 45,641,535,671.08
Including: Cash on hand 3,085,964.28 2,257,666.98
Bank deposits always available for payment 44,771,536,799.60 45,312,481,450.19
Other monetary funds always available for payment 182,878,019.22 326,796,553.91
II. Cash equivalents
Including: bond investments due within three months
III. Closing balance of cash and cash equivalents 44,957,500,783.10 45,641,535,671.08
70. Monetary items in foreign currency
Closing balance Opening balance
Balance in
Items Balance in Exchange Exchange
Balance in RMB foreign Balance in RMB
foreign currency rate rate
currency
Monetary funds
USD 850,630,647.69 6.3757 5,423,365,820.48 924,028,432.95 6.5249 6,029,193,122.15
EUR 149,225,110.60 7.2197 1,077,360,530.99 196,320,365.21 8.0250 1,575,470,930.80
JPY 10,520,503,841.74 0.055415 582,993,720.39 6,477,692,063.70 0.063236 409,623,335.34
HKD 483,444,582.35 0.8176 395,264,290.53 834,174,659.07 0.8416 702,041,393.07
Others 2,955,290,563.22 3,237,415,723.48
Subtotal 10,434,274,925.61 11,953,744,504.84
Accounts receivables
302/365
Haier Smart Home Co., Ltd. 2021 Annual Report
USD 721,343,093.77 6.3757 4,599,067,162.94 670,644,124.35 6.5249 4,375,885,846.99
EUR 413,528,990.85 7.2197 2,985,555,255.25 416,947,689.18 8.0250 3,346,005,205.68
JPY 4,064,574,659.93 0.055415 225,238,404.78 2,804,117,973.94 0.063236 177,321,204.20
Others 3,668,237,038.46 3,303,192,557.86
Subtotal 11,478,097,861.43 11,202,404,814.73
Short-term borrowings
USD 347,844,969.69 6.3757 2,217,755,173.25 338,394,354.56 6.5249 2,207,989,324.04
EUR 883,863,602.21 7.2197 6,381,230,048.85 365,208,045.49 8.0250 2,930,794,565.08
JPY 623,360,869.80 0.055415 34,543,542.60 559,047,191.47 0.063236 35,351,908.20
HKD 2,600,000,000.00 0.8176 2,125,760,000.00 2,601,626,661.87 0.8416 2,189,528,998.63
Others 328,850,057.11 17,716,918.41
Subtotal 11,088,138,821.81 7,381,381,714.36
Accounts payables
USD 2,033,952,669.54 6.3757 12,967,872,035.21 1,686,174,380.87 6.5249 11,002,119,217.74
EUR 640,851,532.98 7.2197 4,626,755,812.65 509,699,528.76 8.0250 4,090,338,718.32
JPY 8,161,874,338.90 0.055415 452,290,266.49 5,948,544,811.66 0.063236 376,162,179.71
NZD 151,371,298.46 4.3553 659,267,416.20 184,521,657.35 4.7050 868,174,397.82
Others 3,268,885,987.84 2,331,300,734.45
Subtotal 21,975,071,518.39 18,668,095,248.04
Non-current liabilities due in one year
USD 757,148,488.12 6.3757 4,827,351,615.72 460,056,675.99 6.5249 3,001,823,805.15
EUR 214,053,730.55 7.2197 1,545,403,718.47 362,785,908.96 8.0250 2,911,356,919.41
JPY 3,705,244,389.61 0.055415 205,326,117.85 409,229,611.46 0.063236 25,878,043.71
RUB 651,073,870.06 0.0855 55,666,815.89 172,776,559.98 0.087700 15,152,504.31
Others 1,589,397,292.33 347,591,362.24
Subtotal 8,223,145,560.26 6,301,802,634.82
Long-term borrowings
USD 403,838,717.50 6.3757 2,574,754,511.17 1,338,974,588.19 6.5249 8,736,675,290.47
EUR 37,498,911.17 7.2197 270,730,888.98 143,342,874.40 8.0250 1,150,326,567.02
RUB 186,061,000.00 0.0855 15,908,215.50 500,000,000.00 0.087700 43,850,000.00
NZD 319,947,612.96 4.7050 1,505,353,518.98
JPY 3,197,333,012.36 0.055415 177,180,208.88 5,861,628,375.61 0.063236 370,665,931.96
Others 14,544,951.38
Subtotal 3,038,573,824.53 11,821,416,259.81
303/365
Haier Smart Home Co., Ltd. 2021 Annual Report
VIII. CHANGES OF CONSOLIDATION SCOPE
1. Business combination not under common control
□ Application √ Not application
2. Business combination under common control
√Applicable □ Not Applicable
1
）（ Business combination under common control occurring in the current period
The The basis for the
proportion of transaction of
Recognition
Name of the equity constituting Combinati
basis of
acquiree acquired in business on date
combination date
the business combination under
combination common control
Subject equity-
Controlled by Haier
Qingdao Haier Quality related right and
Group Corporation
Inspection Co., Ltd. (
岛青 100.00% 2021.12 obligation
before and after
司公限 有测检 量质尔海 ) transferred to the
combination
Company
(Continued)
The income of the Net profit of the The income of Net profit of
acquiree from the acquiree from the the acquiree the acquiree
Name of the acquiree beginning of the beginning of the during the during the
current period to current period to comparison comparison
combination date combination date period period
Qingdao Haier Quality
Inspection Co., Ltd. (
海岛青 84,673,565.56 -1,015,618.64 76,623,721.00 6,535,846.97
司公 限有测 检量质尔)
2 Combination cost
）（
Combination cost ------Cash ------Equity
Qingdao Haier Quality Inspection
Co., Ltd. ( 公限有 测 检量质 尔海岛 青 36,300,000.00 N/A
司 )
3
）（ Acquiree’s assets and liabilities
304/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Haier Quality Inspection Co., Ltd. ( 尔海岛青
Items
司公限有测检量质 )
Combination date End of the previous
period
Monetary funds 9,910,049.02 6,403,032.60
Accounts receivables 3,861,071.67
Other current assets 715,080.00 968,380.80
Fixed assets 15,433,189.54 16,285,519.18
Construction in progress 10,288,776.92 13,292,647.30
Intangible assets 1,976,261.74 278,248.13
Long-term amortized expenses 335,191.20 612,135.38
Less: Accounts payables -14,422,407.78 -16,144,531.42
Payables for staff’s remuneration -3,921,004.81 -2,936,144.37
Taxes payable -127,667.15 -1,417,271.95
Net assets 20,187,468.68 21,203,087.32
3.Disposal of subsidiary
Whether single disposal of investment in subsidiary will result in losing control power:
Wuhan Haier Energy and Power Co.,
Items
Ltd. ( 司公限有力动源能尔海汉武 )
Equity disposal price 15,315,825.00
Proportion of equity disposal 75%
Method of equity disposal Disposal
Time of loss-of-control 2021.12
Basis for determination the time of loss-
Transfer
of- control
Difference between consideration and its
share of net assets of the subsidiary as
2,195,693.03
respect to the disposal in the consolidated
level
4. Changes of consolidation scope due to other reasons
(1) Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary Tianjin Yilian Ecological Technology Co., Ltd. for the current period.
(2) Shanghai Haier Medical Technology Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary Jiangxi Haier Medical Technology Co., Ltd. for the current period.
305/365
Haier Smart Home Co., Ltd. 2021 Annual Report
(3) Qingdao Haier Intelligent Home Appliance Technology Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary Qingdao Haizhi Shenlan Technology Co., Ltd. for the current
period.
(4) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary Qingdao Haishengze Technology Co., Ltd. for the current period.
(5) Qingdao Haizhi Investment Management Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary Qingdao Hailvyuan Recycling Technology Co., Ltd. for the current period.
(6) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Qingdao Haier HVAC Equipment Co., Ltd. ( 限 有备设调 空 通暖尔海岛青
司公 ) for the period.
(7) Qingdao Weixi Smart Technology Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary, Zhejiang Weixi IoT Technology Co., Ltd. ( 司公限有 技科联 物玺卫 江浙 )for
the period.
(8) Qingdao Haier Air Conditioner General Corp., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Qingdao Haixianghui Technology Co., Ltd. ( 司公限有 技 科汇享 海岛青 )for
the period.
(9) Chongqing Haier Electronics Sales Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary, Haier Smart Home (Xiongan, Hebei) Technology Co., Ltd. ( 技 科家智尔海
司公限 有）安 雄北河（ ) for the period.
(10) The Company established a wholly-owned subsidiary, Qingdao Ruibo Ecological
Environmental Technology Co., Ltd. ( 司公 限有技科 保环 态生博瑞岛青 )for the period.
(11) Haier Smart Home Experience Cloud Ecological Technology Co., Ltd., a subsidiary of the
Company, established a wholly-owned subsidiary, Qingdao Sanyiniao Technology Co., Ltd. ( 翼三岛青
司公限 有技科鸟 ) for the period.
(12) Qingdao Ruibo Ecological Environmental Technology Co., Ltd. ( 有技科 保环态 生博瑞 岛青
司公限 ), a subsidiary of the Company, established a wholly-owned subsidiary, Qingdao Jingzhi Recycle
Environmental Technology Co., Ltd. ( 司公 限有技科 保环 生再智鲸岛青 ) for the period.
306/365
Haier Smart Home Co., Ltd. 2021 Annual Report
(13) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Qingdao Yunshang Jieshen Yilian Technology Co., Ltd. ( 衣神 洁裳云岛 青
司公限 有技科联 ) for the period.
(14) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Shanghai Yunshang Yuyi IoT Technology Co., Ltd. ( 科联 物衣羽裳 云海上
司 公限有技 ) for the period.
(15) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Shijiazhuang Yunshang Yilian Technology Co., Ltd. ( 科联 衣裳云庄 家石
司 公限有技 ) for the period.
(16) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Nanjing Yunshang Yilian Technology Co., Ltd. ( 限有 技科联衣 裳云京南
司公 ) for the period.
(17) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Yunshang Zhonglian Technology (Shanghai) Co., Ltd. ( 上（ 技科联众裳云
司公 限有）海 ) for the period.
(18) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Shanxi Yunshang Yilian Technology Co., Ltd. ( 公限 有技科联 衣裳云西山
司 ) for the period.
(19) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Tianjin Yunshang Yilian Technology Co., Ltd. ( 限 有技科网 联 衣裳云津天
司公 ) for the period.
(20) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Chongqing Yunshang Haihong Yilian Technology Co., Ltd. ( 海 裳云庆重
司公 限有技 科联衣宏 ) for the period.
(21) Qingdao Haier Air Conditioner General Corp., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Qingdao Haixiangmian Technology Co., Ltd. ( 司 公限有技 科 眠享海岛青 )
for the period.
307/365
Haier Smart Home Co., Ltd. 2021 Annual Report
(22) Qingdao Haier Smart Kitchen Appliance Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Qingdao Haier Kitchen IoT Technology Co., Ltd. ( 科 联物网联 厨尔 海岛青
司 公限有技 ) for the period.
(23) Shanghai Haier Medical Technology Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary, Tibet Haifeng Intelligent Innovation Technology Co., Ltd. ( 创能 智峰海藏西
司公限 有技科新 ) for the period.
(24) The Company established a wholly-owned subsidiary Qingdao Haier Home AI Industry
Innovation Center Co., Ltd. ( 司 公限有 心中新创 业产 能智工 人庭家 尔海岛青 ) for the period.
(25) Haier America Company, LLC, a subsidiary of the Company was deregistered for the period.
IX. INTERESTS IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
Principal Place of Shareholding (%) % of
Name of subsidiary place of registratio Nature of business voting Method
Direct Indirect
business n right (%)
Group company,
which mainly
engage in
investment holding,
Mainland Establishm
Flourishing Reach Limited Bermuda the production and 100.00 100.00
of China ent
sale of washing
machines and water
heaters, distribution
service
Group company,
Mainland which mainly
Haier Electronics Group of China engage in Establishm
Bermuda 100.00 100.00
Co., Ltd. and Hong investment holding, ent
Kong the production and
sale of water
308/365
Haier Smart Home Co., Ltd. 2021 Annual Report
equipment,
distribution service
Group company,
which mainly
Haier U.S. Appliance the United the United engage in home Establishm
100.00 100.00
Solutions, Inc. States States appliances ent
production and
distribution business
Group company, Business
Singapore which mainly combinati
Haier Singapore
and other engage in home on under
Investment Holding Co., Singapore 100.00 100.00
overseas appliances common
Ltd.
areas production and control
distribution business
New New Group company, Business
Zealand Zealand which mainly combinati
Haier New Zealand
engage in home on under
Investment Holding 100.00 100.00
appliances common
Company Limited
production and control
distribution business
Group company, Business
which mainly combinati
engage in home on not
Candy S.p.A Europe Italy 100.00 100.00
appliances under
production and common
distribution business control
Qingdao Qingdao Business
Qingdao Haier Air
High-tech High-tech Manufacture and combinati
Conditioner Gen Corp.,
Zone Zone sale of household 100.00 100.00 on under
Ltd.
air-conditioners common
control
Huichuan Huichuan Business
Guizhou Haier Electronics District, District, combinati
Manufacture and
Co., Ltd. Zunyi City, Zunyi City, 59.00 59.00 on under
sale of refrigerator
Guizhou Guizhou common
Province Province control
309/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Hefei Haier Hefei Haier Business
Industrial Industrial Manufacture and combinati
Hefei Haier Air-
Park Park sale of air- 99.22 99.22 on under
conditioning Co., Limited
conditioners common
control
Wuhan Wuhan Business
Wuhan Haier Electronics Haier Haier Manufacture and combinati
Holding Co., Ltd. Industrial Industrial sale of air- 60.00 60.00 on under
Park Park conditioners common
control
Qingdao Qingdao Business
Qingdao Haier Air-
Developme Developme Manufacture and combinati
Conditioner Electronics
nt Zone nt Zone sale of air- 100.00 100.00 on under
Co., Ltd.
conditioners common
control
Qingdao Qingdao Business
Qingdao Haier
High-tech High-tech combinati
Information Plastic Manufacturing of
Zone Zone 100.00 100.00 on under
Development Co., Ltd. plastic products
common
control
Dalian Dalian Business
Dalian Haier Precision Export Export Manufacture and combinati
Products Co., Ltd. Expressing Expressing sale of precise 90.00 90.00 on under
Zone Zone plastics common
control
Hefei Hefei Business
Economic Economic combinati
Hefei Haier Plastic Co., & & on under
Manufacture and
Ltd. Technologi Technologi 77.36 4.83 82.19 common
sale of plastic parts
cal cal control
Developme Developme
nt Area nt Area
Qingdao Qingdao Manufacture of Business
Qingdao Meier Plastic Developme Developme plastic powder, combinati
Powder Co., Ltd. nt Zone nt Zone plastic sheet and 40.00 60.00 100.00 on under
high-performance common
coatings control
310/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Jiangbei Jiangbei Business
Plastic products,
Chongqing Haier Precision District, District, combinatio
sheet metal work,
Plastic Co., Ltd. Chongqing Chongqing 90.00 10.00 100.00 n under
electronics and
City City common
hardware
control
Qingdao Qingdao Manufacture and
Qingdao Haier Refrigerator
High-tech High-tech production of Establishm
Co., Ltd. 100.00 100.00
Zone Zone fluorine-free ent
refrigerators
Pingdu Pingdu
Qingdao Haier Refrigerator
Developme Developme Manufacture of Establishm
(International) Co., Ltd. 100.00 100.00
nt Zone, nt Zone, refrigerators ent
Qingdao Qingdao
Qingdao Qingdao Research and
Qingdao Household High-tech High-tech development of Establishm
Appliance Technology and Zone Zone home appliances ent
100.00 100.00
Equipment Research mold and
Institute technological
equipment
Qingdao Qingdao Research,
Qingdao Haier Whole Set
High-tech High-tech development and Establishm
Home Appliance Service
Zone Zone sales of health- 98.33 98.33 ent
Co., Ltd.
related small home
appliance
Qingdao Haier Special Qingdao Qingdao Manufacture and
Refrigerator Co., Ltd. Developme Developme sales of fluorine-free 100.00 100.00 Establishm
nt Zone nt Zone refrigerators ent
Qingdao Haier Dishwasher Qingdao Qingdao Manufacture of dish
Co., Ltd. Developme Developme washing machine 100.00 100.00 Establishm
nt Zone nt Zone and gas stove ent
Qingdao Qingdao Research,
Qingdao Haier Special Developme Developme manufacture and Establishm
Freezer Co., Ltd. nt Zone nt Zone sales of freezer and 100.00 100.00 ent
other refrigeration
products
Dalian Haier Air- Dalian Dalian Air conditioner
conditioning Co., Ltd. Export Export processing and 90.00 90.00 Establishm
manufacturing ent
311/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Expressing Expressing
Zone Zone
Dalian Dalian
Dalian Haier Refrigerator Refrigerator
Export Export Establishm
Co., Ltd. processing and 100.00 100.00
Expressing Expressing ent
manufacturing
Zone Zone
Qingdao Qingdao Development,
Qingdao Haier Electronic Developme Developme assembling and sales Establishm
Plastic Co., Ltd. nt Zone nt Zone of plastics, 100.00 100.00 ent
electronics and
products
Wuhan Wuhan
Economic Economic Establishm
& & ent
Research,
Technologi Technologi
manufacture and
Wuhan Haier Freezer Co., cal cal
sales of freezer and 95.00 5.00 100.00
Ltd Developme Developme
other refrigeration
nt Zone nt Zone
products
High-tech High-tech
Industrial Industrial
Park Park
Qingdao Haidarui Qingdao Qingdao Develop, purchase
Procurement Service Co., High-tech High-tech and sell electrical Establishm
98.00 2.00 100.00
Ltd. Zone Zone products and ent
components
Qingdao Qingdao Development and
High-tech High-tech application of home Establishm
Qingdao Haier Intelligent
Zone Zone appliances, ent
Home Appliance
communication, 98.91 1.09 100.00
Technology Co., Ltd.
electronics and
network engineering
technology
Jiangbei Jiangbei
Manufacture and
Chongqing Haier Air- District, District, Establishm
sales of air 76.92 23.08 100.00
conditioning Co., Ltd. Chongqing Chongqing ent
conditioners
City City
312/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qianwang Qianwang Development and
ang Road, ang Road, manufacture of Establishm
Qingdao Haier Precision
Jiaonan Jiaonan precise plastic, metal ent
Products Co., Ltd. 70.00 70.00
City City plate, mold and
electronic products
for home appliances
Qingdao Haier Air Jiaonan Jiaonan
Manufacture of
Conditioning Equipment City, City, Establishm
home appliances and 100.00 100.00
Co., Ltd. Qingdao Qingdao ent
electronics
Dalian Free Trade Zone Dalian Dalian
Haier Air-conditioning Export Export Establishm
Domestic trade 100.00 100.00
Trading Co., Ltd. Expressing Expressing ent
Zone Zone
Dalian Free Trade Zone Dalian Dalian
Haier Refrigerator Trading Export Export Establishm
Domestic trade 100.00 100.00
Co., Ltd. Expressing Expressing ent
Zone Zone
Jiangbei Jiangbei
Chongqing Haier
District, District, Sales of home Establishm
Electronics Sales Co., Ltd. 95.00 5.00 100.00
Chongqing Chongqing appliances ent
City City
Chongqing Haier Jiangbei Jiangbei
Processing and
Refrigeration Appliance District, District, Establishm
manufacturing of 84.95 15.05 100.00
Co., Ltd. Chongqing Chongqing ent
refrigerator
City City
Hefei Haier Hefei Haier Processing and
Haier Refrigerator Co., Ltd.
Industrial Industrial manufacturing of 100.00 100.00 Establishm
Park Park refrigerator ent
Qingdao Haier HVAC Qingdao Qingdao
Air-conditioning
Engineering Co., Ltd. Developme Developme 100.00 100.00 Establishm
engineer
nt Zone nt Zone ent
Chongqing Goodaymart Jiangbei Jiangbei
Sales of home
Electric Appliance Sale District, District, Establishm
appliances and 51.00 51.00
Co., Ltd. Chongqing Chongqing ent
electronics
City City
313/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Haier (Jiaozhou) Jiaozhou Jiaozhou Manufacture and
Air-conditioning Co., City, City, sale of air- 100.00 100.00 Establishm
Limited Qingdao Qingdao conditioners ent
Jiaozhou Jiaozhou Manufacture and
Qingdao Haier Component
City, City, sales of plastic and Establishm
Co., Ltd. 100.00 100.00
Qingdao Qingdao precise sheet metal ent
products
Haier Shareholdings (Hong
Hong Kong Hong Kong Investment 100.00 100.00 Establishm
Kong) Limited
ent
Cayman Cayman
Harvest International
Islands Islands Investment 100.00 100.00 Establishm
Company
ent
Shenbei Shenbei
Shenyang Haier
New Area, New Area, Manufacture and Establishm
Refrigerator Co., Ltd. 100.00 100.00
Shenyang Shenyang sales of refrigerator ent
City City S
Foshan Haier Freezer Co., Sanshui Sanshui
Manufacture and
Ltd. District, District, 100.00 100.00 Establishm
sales of refrigerator
Foshan City Foshan City ent
Zhengzhou Zhengzhou
Economic Economic Establishm
Zhengzhou Haier Air- and and ent
Manufacture and
conditioning Co., Ltd. Technologi Technologi 100.00 100.00
sales of freezer
cal cal
Developme Developme
nt Zone nt Zone
Qingdao Haidayuan Qingdao Qingdao Develop, purchase
Procurement Service Co., Developme Developme and sell electrical Establishm
100.00 100.00
Ltd. nt Zone nt Zone products and ent
components
Qingdao Haier Intelligent Qingdao Qingdao
Development and
Technology Development High-tech High-tech Establishm
research of home 100.00 100.00
Co., Ltd. Zone Zone ent
appliance products
Qingdao Hairi Hi-Tech Qingdao Qingdao Design, manufacture Business
Model Co., Ltd. High-tech High-tech and sales of product 100.00 100.00 combinatio
Zone Zone model and mould n under
314/365
Haier Smart Home Co., Ltd. 2021 Annual Report
common
control
Qingdao Qingdao Business
Qingdao Hai Gao Design High-tech High-tech combinatio
Industrial design and
and Manufacture Co., Ltd. Zone Zone 75.00 75.00 n under
prototype production
common
control
Beijing Beijing Business
Beijing Haier Guangke Development,
combinatio
Digital Technology Co., promotion and
55.00 55.00 n under
Ltd. transfer of
common
technology
control
Shanghai Haier Medical Shanghai Shanghai
Wholesale and retail
Technology Co., Ltd. 80.93 80.93 Establishm
of medical facility
ent
Qingdao Qingdao Business
Qingdao Haier Technology Development and combinatio
Co., Ltd. sales of software and 100.00 100.00 n under
information product common
control
Qingdao Haier Technology Qingdao Qingdao Entrepreneurship
Investment Co., Ltd. investment and 100.00 100.00 Establishm
consulting ent
Qingdao Casarte Smart Qingdao Qingdao Development,
Living Appliances Co., Ltd. production and sales 100.00 100.00 Establishm
of appliances ent
Qingdao Haichuangyuan Qingdao Qingdao Sales of home
Appliances Sales Co., Ltd. appliances and 100.00 100.00 Establishm
digital products ent
Qingdao Qingdao Sales of home
Haier Overseas Electric
appliances, Establishm
Appliance Co., Ltd. 100.00 100.00
international freight ent
forwarding
Dalian Dalian Sales of home Business
Haier Group (Dalian)
appliances, combinatio
Electrical Appliances
international freight 100.00 100.00 n under
Industry Co., Ltd.
forwarding common
control
315/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Qingdao Production and sales
Qingdao Haier Central Air
of air and Establishm
Conditioning Co., Ltd. 100.00 100.00
refrigeration ent
equipment
Chongqing Haier Home Hefei Hefei
Appliance Sale Hefei Co., Sales of home Establishm
100.00 100.00
Ltd. appliances ent
Qingdao Weixi Smart Qingdao Qingdao
Intelligent sanitary
Technology Co., Ltd. 71.43 71.43 Establishm
ware
ent
Haier U+smart Intelligent Beijing Beijing
Technology (Beijing) Co., Software Establishm
100.00 100.00
Ltd. development ent
Haier (Shanghai) Shanghai Shanghai Sales, research and
Electronics Co., Ltd. development of 100.00 100.00 Establishm
home appliances ent
Shanghai Haier Zhongzhi Shanghai Shanghai Business
Fang Chuang Ke management Establishm
100.00 100.00
Management Co., Ltd. consulting, chuangke ent
management
Qingdao Haier Smart Qingdao Qingdao
Production and sales
Kitchen Appliance Co., Establishm
of kitchen smart 100.00 100.00
Ltd. ent
home appliances
GE Appliance (Shanghai) Shanghai Shanghai
Sales of home
Co., Ltd. 100.00 100.00 Establishm
appliances
ent
Qingdao Haier Special Qingdao Qingdao
Refrigerating Appliance Production and sales Establishm
100.00 100.00
Co., Ltd. of home appliances ent
Beijing Zero Micro Beijing Beijing Promotion of
Technology Co., Ltd. technological 55.00 55.00 Establishm
development ent
316/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Laiyang Haier Smart Laiyang Laiyang Production and
Kitchen Appliance Co., sales of home Establishm
100.00 100.00
Ltd. appliances ent
Hefei Haier Air Hefei Hefei Production and
Conditioning Electronics sales of home Establishm
100.00 100.00
Co., Ltd. appliances ent
Haier (Shanghai) Home Shanghai Shanghai
Appliance Research and Research and Establishm
Development Center Co., development of 100.00 100.00 ent
Ltd. home appliances
Shenzhen Shenzhen Development,
Haier (Shenzhen) R&D research and Establishm
Co., Ltd. technical services of 100.00 100.00 ent
household and
commercial electrical
Guangdong Guangdong Manufacturing of
Guangzhou Haier Air
refrigeration and air Establishm
Conditioner Co., Ltd. 100.00 100.00
conditioning ent
equipment
Qingdao Yunshang Yuyi Qingdao Qingdao IoT technology
IOT Technology Co., Ltd. research and 70.00 70.00 Establishm
development ent
Qingdao Haizhi Investment Qingdao Qingdao
Asset management,
Management Co., Ltd. 100.00 100.00 Establishm
equity investment
ent
Qingdao Jijia Cloud Qingdao Qingdao
Intelligent Technology Co., R&D and sales of Establishm
80.00 80.00
Ltd. lighting appliances ent
Qingdao Haimeihui Qingdao Qingdao
Management Consulting Leasing and business Establishm
100.00 100.00
Co., Ltd.( 理管汇美海岛青 services ent
司公限有询咨 )
317/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Wuxi Yunshang Internet of Wuxi Wuxi
Clothing Technology Co., Internet of Things Establishm
100.00 100.00
Ltd.( 技科网联衣裳云锡无 technology R & D ent
司公限有 )
Qingdao Guochuang Qingdao Qingdao
Intelligent Household Establishm
Appliance Research Scientific research ent
37.75 37.75
Institute Co., Ltd. (
国岛青 and technical service
公限有院究研电家能智创
司)
Hangzhou Gandao Hangzhou Hangzhou
Intelligent Technology Co., Technology Establishm
52.58 52.58
Ltd. ( 技科能智道甘州杭 development, service ent
司公限有 )
Qingdao Haidacheng Qingdao Qingdao Develop, purchase
Procurement Service Co., and sell electrical Establishm
100.00 100.00
Ltd. products and ent
components
Business
Guangdong Heilong
Guangzhou Guangzhou Scientific research combinatio
Intelligent Technology Co.
and technology 76.72 76.72 n not under
Ltd ( 有技科能智龙黑东广
service sector common
司公限 )
control
Beijing Haixianghui Beijing Beijing Scientific research
Establishm
Technology Co., Ltd.( 京北 and technology 100.00 100.00
ent
司公限有技科汇享海 ) service sector
Qingdao Qingdao Electronic equipment Business
Qingdao Hairuijiejing technology research, combinatio
Electronics Co., Ltd.( 岛青 development, 51.00 51.00 n not under
司公限有子电净洁瑞海 ) transfer, consulting common
and services control
Qingdao Qingdao Technology
Haier Smart Home
development of Establishm
Experience Cloud
smart home ent
Ecological Technology 100.00 100.00
products, whole
Co., Ltd.( 云验体家智尔海
furniture
司公限有技科态生 )
customization, etc.
318/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Haier Smart Home Qingdao Qingdao Technical services,
(Qingdao) Network Co., development, Establishm
100.00 100.00
Ltd.( 网）岛青（家智尔海 consulting, transfer, ent
司公限有络 ) etc.
Qingdao Qingdao Residential interior
decoration, Establishm
professional ent
Haier Smart Home
construction
(Qingdao) Network
operation, special
Operation Co., Ltd.( 智尔海 100.00 100.00
equipment
限有营运络网）岛青（家
installation,
司公 )
upgrading and repair,
etc.
Qingdao Qingdao Urban distribution
and transportation Establishm
Qingdao Internet of Wine
services, import and ent
Technology Co., Ltd. ( 岛青
export of goods, 100.00 100.00
公限有技科联物网联酒
technology import
司)
and export and food
business, etc.
Qingdao Qingdao Manufacture and
Qingdao Linghai Air
production of air Establishm
Conditioning Equipment
conditioner and 100.00 100.00 ent
Co., Ltd. ( 设调空海菱岛青
refrigeration
司公限有备 )
equipment
Chongqing Chongqing Food business,
commodity import Establishm
Chongqing Yunshang and export, ent
Yilian Technology Co., technology import
100.00 100.00
Ltd.( 有技科联衣裳云庆重 and export, Internet
司公限 ) information services,
etc.
Shenzhen Shenzhen Import and export
Shenzhen Yunshang Yilian
business, Internet, Establishm
Technology Co., Ltd. ( 圳深 100.00 100.00
Internet of things, big ent
司公限有技科联衣裳云 )
data, AI, AR and
319/365
Haier Smart Home Co., Ltd. 2021 Annual Report
technical services
operation
Qingdao Haixiangxue Qingdao Qingdao
Professional
Human Resources Co., Ltd. Establishm
intermediary 100.00 100.00
(
有源资力人学享海岛青 ent
activities
司公限 )
Jiangxi Jiangxi Wholesale and retail
Jiangxi Haier Medical
of medical 100.00 100.00 Establishm
Technology Co., Ltd.
equipment ent
Qingdao Haizhi Shenlan Qingdao Qingdao
Technical service
Technology 100.00 100.00 Establishm
development
Co., Ltd. ent
Qingdao Qingdao Air conditioning
Qingdao Haishengze
equipment technical 100.00 100.00 Establishm
Technology Co., Ltd.
services ent
Qingdao Hailvyuan Qingdao Qingdao Electrical and
Recycling Technology Co., electronic products 100.00 100.00 Establishm
Ltd. waste treatment ent
Tianjin Internet of clothes Tianjin Tianjin
IoT technology
Ecological Technology 100.00 100.00 Establishm
development
Co., Ltd. ent
Qingdao Haier HVAC Qingdao Qingdao
Manufacture and
Equipment Co., Ltd. ( 岛 Establishm
sale of air- 100.00 100.00
公 有 设 空 暖 海 ent
conditioners
司 )
Qingdao Haier Home AI Qingdao Qingdao
Industry Innovation Center Integrated service of Establishm
Co., Ltd. ( 人 家 海 青 AI industry 100.00 100.00 ent
限有心中新创业产能智工 application system
司 )
Zhejiang Weixi IoT Zhejiang Zhejiang
IoT application
Technology Co., Ltd. ( 江 100.00 100.00 Establishm
service
司公限有技科联物玺卫 ) ent
Qingdao Qingdao Business
Qingdao Haier Quality Inspection and combinatio
Inspection Co., Ltd. (岛青 testing of home 100.00 100.00 n under
司公限有测检量质尔海 ) appliance common
control
320/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Qingdao Business
Qingdao Haiyongcheng
combinatio
Certification Service Co., Product certification
100.00 100.00 n under
Ltd.( 务服证认成永海岛青 service
common
司公限有 )
control
Qingdao Zhonghai Borui Qingdao Qingdao Business
Home appliance
Testing Technology combinatio
testing and
Service Co., Ltd.( 海中岛青 100.00 100.00 n under
technology
公限有务服术技测检睿博 common
consulting
司 ) controls
Qingdao Qingdao Software
Qingdao Haixianghui
development and Establishm
Technology Co., Ltd. ( 岛青 100.00 100.00
sale of daily ent
司 限 技 汇 海 )
necessities
Haier Smart Home Qingdao Qingdao
(Xiongan, Hebei) Promotion of Establishm
Technology Co., Ltd. ( 尔 energy-saving 100.00 100.00 ent
有 安 北 （ 科 智 technology
司 限 )
Qingdao Ruibo Ecological Qingdao Qingdao
Environmental and
Environmental Technology Establishm
AI technology 100.00 100.00
Co., Ltd. ( 环态生博瑞岛青 ent
consulting
司 限 技 保 )
Qingdao Sanyiniao Qingdao Qingdao Technology service
Technology Co., Ltd. ( 岛 and advertisement 100.00 100.00 Establishm
司公限有技科鸟翼三 ) design ent
Qingdao Jingzhi Recycle Qingdao Qingdao
Environmental Technology Operation of Establishm
100.00 100.00
Co., Ltd. ( 环 再 鲸 青 dangerous waste ent
司 限 技 保 )
Qingdao Yunshang Jieshen Qingdao Qingdao
Professional cleaning
Yilian Technology Co., Establishm
and sale of daily 51.00 51.00
Ltd. ( 联 神 裳 岛 ent
necessities
司 限 技 )
Shanghai Yunshang Yuyi Shanghai Shanghai
IoT technology
IoT Technology Co., Ltd. Establishm
research and 51.00 51.00
(
技科联物衣羽裳云海上 ent
development
司 限 )
321/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Shijiazhuang Yunshang Shijiazhuan Shijiazhuan
Engineering
Yilian Technology Co., g g Establishm
technology research 51.00 51.00
Ltd. (科联衣裳云庄家石 ent
and development
司 限 技 )
Nanjing Yunshang Yilian Nanjing Nanjing
Export of goods,
Technology Co., Ltd. ( 京 51.00 51.00 Establishm
technology
司公限有技科联衣裳云 ) ent
Yunshang Zhonglian Shanghai Shanghai
Technology services
Technology (Shanghai) Establishm
in the field of science 51.00 51.00
Co., Ltd. (
技 联 裳 ent
and technology
司 限 ） 上 )
Shanxi Yunshang Yilian Shanxi Shanxi Technology service
Technology Co., Ltd. ( 西 in computer software 51.00 51.00 Establishm
司 限 技 联 裳 ) and hardware ent
Tianjin Yunshang Yilian Tianjin Tianjin
Technology Co., Ltd. ( 津天 5G communication Establishm
51.00 51.00
公 有 科 联 裳 technology service ent
司)
Chongqing Yunshang Chongqing Chongqing
Haihong Yilian Establishm
Live internet
Technology Co., Ltd. ( 庆 51.00 51.00 ent
technology service
公限有技科联衣宏海裳云
司)
Qingdao Haixiangmian Qingdao Qingdao
Sale of food and
Technology Co., Ltd. ( 岛 100.00 100.00 Establishm
daily necessities
司 限 技 眠 海 ) ent
Qingdao Haier Kitchen IoT Qingdao Qingdao
Technology service
Technology Co., Ltd. ( 岛 Establishm
and sale of daily 100.00 100.00
限 技 联 网 厨 海 ent
necessities
司 )
Tibet Haifeng Intelligent Tibet Tibet Development of
Innovation Technology software and Establishm
100.00 100.00
Co., Ltd. (
创能智峰海藏西 medical ent
司 限 技 新 ) equipment
Microenterprises such as All over the All over the
Qingdao Hai Heng Feng country country Sales of home Establishm
Electrical Appliances Sale appliances ent
& Service Co., Ltd.
322/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Reasons for including subsidiaries which the Company has 50% or less of the equity into the scope of
consolidated financial statements:
At the end of the reporting period, the Company had substantial control over the finance and operation
of small companies like Qingdao Hai Heng Feng Electrical Appliances Sale & Service Co., Ltd, which
were included into the scope of consolidated financial statements.
(2) Material non-wholly owned subsidiaries
Profit or loss Balance of minority
Shareholding of Distribute dividends to
attributable to minority shareholders’ equity
Name of subsidiaries minority minority shareholders
shareholders for the at the end of the
shareholders in the current period
current period period
Guizhou Haier Electronics Co., Ltd. 41.00% 14,337,990.71 12,300,000.00 108,678,010.60
Wuhan Haier Electronics Holding
40.00% 6,000,188.28 8,000,000.00 248,923,194.12
Co., Ltd.
(3) Summarized financial information in respect of material non-wholly owned subsidiaries
Closing balance
Name of subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liabilities
Guizhou Haier
548,369,499.75 90,003,558.19 638,373,057.94 368,134,127.34 5,170,612.06 373,304,739.40
Electronics Co., Ltd.
Wuhan Haier
Electronics Holding Co., 795,204,982.68 144,368,337.05 939,573,319.73 317,265,334.43 317,265,334.43
Ltd.
(continued)
Opening balance
Name of subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liabilities
Guizhou Haier
598,503,571.44 99,869,513.40 698,373,084.84 432,050,892.47 6,224,582.87 438,275,475.34
Electronics Co., Ltd.
Wuhan Haier
Electronics Holding Co., 857,372,778.47 162,182,594.22 1,019,555,372.69 392,247,858.10 392,247,858.10
Ltd.
Name of subsidiary Amount for the current period
323/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Total comprehensive Cash flow of operating
Operating income Net profit
income activities
Guizhou Haier Electronics Co., Ltd. 1,434,916,082.22 34,970,709.04 34,970,709.04 428,271,861.58
Wuhan Haier Electronics Holding Co.,
1,658,928,537.91 15,000,470.71 15,000,470.71 124,310,705.76
Ltd.
324/365
Haier Smart Home Co., Ltd. 2021 Annual Report
(continued)
Amount for the previous period
Name of subsidiary Total comprehensive Cash flow of
Operating income Net profit
income operating activities
Guizhou Haier Electronics Co., Ltd. 1,108,361,158.81 16,627,945.41 16,627,945.41 -182,379,402.95
Wuhan Haier Electronics Holding
1,226,979,947.42 -35,650,596.23 -35,650,596.23 -102,707,239.57
Co., Ltd.
2. Transactions leading to the change of shareholding in subsidiaries but not losing the control
√Applicable □ Not Applicable
(1). Description of changes in the share of owners’ equity in subsidiaries
√Applicable □ Not Applicable
Capital contribution by minority shareholders of the subsidiary of the Company leads to changes
in the Company’s shareholding ratio.
(2). Impact of the transactions on minority interest and the equity attributable to
shareholders of the Company:
Items Others
Total Consideration for acquisition/disposal 242,078,260.00
Less: share of net assets of subsidiaries in respect to the
152,660,912.57
shareholding proportion acquired/disposed
Difference -89,417,347.43
Including: adjustment to increase capital reserve -89,417,347.43
3. Interests in joint ventures and associates
√Applicable □ Not Applicable
(1). Joint ventures and associates
Place of Accounting
Principal place Nature of Nature of
Name of joint venture and associates registratio treatment of
of business business business
n investment
Haier Group Finance Co.,Ltd Qingdao Qingdao Financial services 42.00% Equity method
Bank of Qingdao Co.,Ltd Qingdao Qingdao Commercial Bank 8.13% Equity method
Motor
Wolong Electric(Jinan) Motor Co., Ltd. Jinan Jinan 30.00% Equity method
Manufacturing
Qingdao Hegang New Material Technology Co., Steel plate
Qingdao Qingdao 23.94% Equity method
Ltd. (
司公限有份股技科料材新钢河岛青 ) manufacturing
325/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Haier SAIF Smart Home Industry
Qingdao Qingdao Venture Capital 63.13% Equity method
Investment Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Air- Manufacturing of
Qingdao Qingdao 45.00% Equity method
conditioners Co., Ltd. home appliances
Qingdao Haier Carrier Refrigeration Equipment Co., Manufacturing of
Qingdao Qingdao 49.00% Equity method
Ltd. home appliances
R&D and sales of
Qingdao Haier Multimedia Co., Ltd Qingdao Qingdao 20.20% Equity method
television
Mold processing
Qingdao Haier Moulds Co., Ltd. Qingdao Qingdao 25.00% Equity method
and manufacturing
Technology
Hefei Feier Smart Technology Co., Ltd. Hefei Hefei 40.00% Equity method
development
Anhui Kunhe Intelligent Technology Co., Electrical
Hefei Hefei 30.00% Equity method
Ltd. equipment R&D
Gas compression
machinery
Zhejiang Futeng Fluid Technology Co., Ltd. Huzhou Huzhou 48.00% Equity method
development and
manufacturing
Beijing Mr. Hi Network Technology Company Technology
Beijing Beijing 36.29% Equity method
Limited development
Sales of home
Beijing Xiaobei Technology Co., Ltd. Beijing Beijing 42.75% Equity method
appliances
Technical service
Beijing ASU Tech Co., Ltd. Beijing Beijing import and export 36.45% Equity method
business
Shenzhen Genyuan Environmental Protection Technical advisory
Shenzhen Shenzhen 14.70% Equity method
Technology Co., Ltd. services
Investment
Qingdao Haimu Investment Management Co., Ltd. Qingdao Qingdao 49.00% Equity method
management
Qingdao Haimu Smart Home Investment Investment
Qingdao Qingdao 24.00% Equity method
Partnership (Limited Partnership) management
Guangzhou Heying Investment Partnership (Limited
Guangzhou Guangzhou Investment 49.00% Equity method
Partnership)
Qingdao Home Wow Cloud Network Technology Home online
Qingdao Qingdao 24.93% Equity method
Co., Ltd service
Water equipment
Qingdao RRS Service Co., Ltd. Qingdao Qingdao 40.00% Equity method
technical service
326/365
Haier Smart Home Co., Ltd. 2021 Annual Report
Investment
Bingji (Shanghai) Corporate Management Co., Ltd. Shanghai Shanghai 45.00% Equity method
management
Investment
Youjin (Shanghai) Corporate Management Co., Ltd Shanghai Shanghai 45.00% Equity method
management
RRS (Shanghai) Investment Co., Ltd. (上（顺日日 Investment
Shanghai Shanghai 45.00% Equity method
司公限有资投）海 ) management
Water equipment
Haier Best Water Technology Co., Ltd. ( 尔海世倍 technology
Qingdao Qingdao 49.00% Equity method
司公限有技科水饮 ) development
service
HuizhiXiangshun Equity Investment Fund Investment
Qingdao Qingdao 30.00% Equity method
(Qingdao) Partnership (Limited Partnership) management
Investment
Qingdao RRS Huizhi Investment Co., Ltd. Qingdao Qingdao 50.00% Equity method
management
Technology
Qingdao Xinshenghui Technology Co., Ltd. ( 岛青
Qingdao Qingdao service 20.00% Equity method
司公限有技科汇晟鑫 )
development
Meiling Candy Washing Machine Co., Ltd.( 卡菱美 Manufacturing of
Hefei Hefei 40.00% Equity method
司公限有机衣洗迪 ) home appliances
Motor
Konan Electronic Co., Ltd Japan Japan 50.00% Equity method
Manufacturing
Manufacturing of
HPZ LIMITED Nigeria Nigeria 25.01% Equity method
home appliance
Manufacturing of
HNR Company (Private) Limited Pakistan Pakistan 31.72% Equity method
home appliance
Manufacturing of
Haier Raya Electric S.A.E Egypt E Egypt E 15.00% Equity method
home appliance
Manufacturing of
ControladoraMabeS.A.deC.V. Mexico Mexico 48.41% Equity method
home appliance
Saudi Sales of home
Middle East Air conditioning Company,Limited Saudi Arabia 49.00% Equity method
Arabia appliances
(2). Major financial information of important associates
① The basic profile of important associates:
Haier Group Finance Co., Ltd. (hereinafter referred to as ‘Finance company’) was established by
Haier Group Corporation and its three affiliates. Registration place and principal place of business:
No.178-2 Haier Road, Laoshan District, Qingdao City. The Company’s subsidiaries hold an
aggregate of 42.00% equity interest in Finance Company.
327/365
Haier Smart Home Co., Ltd. 2021 Annual Report
② Financial information of important associates:
Finance company
Items Closing balance/ Amount for Opening balance/ Amount
the current period for the previous period
Current assets 61,294,606,916.47 62,750,087,810.02
Non-current assets 9,404,030,263.35 12,907,238,025.07
Total assets 70,698,637,179.82 75,657,325,835.09
Current liabilities 53,403,515,414.15 59,895,340,204.39
Non-current liabilities 369,623,253.07 223,325,462.63
Total liabilities 53,773,138,667.22 60,118,665,667.02
Minority equity interests
Equity attributable to shareholders of
16,925,498,512.60 15,538,660,168.07
the parent company
Including: share of net assets calculated
7,108,709,375.29 6,526,237,270.60
per shareholding percentage
Operating income 2,039,657,544.66 2,225,723,222.45
Net profit 1,503,077,521.32 1,550,909,520.81
Other comprehensive income -38,457,038.17 -23,229,657.93
Total comprehensive income 1,464,620,483.15 1,527,679,862.88
Dividend received from associates for
218,400,000.00 126,000,000.00
the year
(3). Summarized financial information of insignificant joint ventures and associates
Investment in associates Closing balance/ Opening balance/
Amount for the Amount for the
current period previous period
Bank of Qingdao Co., Ltd. 2,654,248,436.12 2,463,096,567.92
Wolong Electric (Jinan) Motor Co., Ltd. 151,837,378.99 143,847,870.70
Qingdao Hegang New Material Technology Co., Ltd.
312,493,256.21 297,154,935.85
(
司公限有份股技科料材新钢河岛青 )
Qingdao Haier SAIF Smart Home Industry Investment
393,598,372.59 385,797,036.73
Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao)
682,901,976.73 654,581,961.84
Airconditioners Co., Ltd.
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Qingdao Haier Carrier Refrigeration Equipment Co.,
409,053,808.05 415,298,165.93
Ltd.
Qingdao Haier Multimedia Co., Ltd 277,102,563.88 328,987,205.07
Qingdao Haier Moulds Co., Ltd. 269,158,534.54 259,696,084.44
Hefei Feier Smart Technology Co., Ltd. 265,106.27 1,491,024.72
Anhui Kunhe Intelligent Technology Co., Ltd. 1,877,574.14
Zhejiang Futeng Fluid Technology Co., Ltd. 82,098,847.75
Beijing Mr. Hi Network Technology Company Limited 7,507,759.75 7,507,759.75
Beijing Xiaobei Technology Co., Ltd. 2,687,341.82 2,687,341.82
Beijing ASU Tech Co., Ltd. 15,529,700.01 32,365,969.45
Shenzhen Genyuan Environmental Protection
6,914,487.73 6,914,487.73
Technology Co., Ltd.
Qingdao Haimu Investment Management Co., Ltd. 2,465,299.70 2,349,240.51
Qingdao Haimu Smart Home Investment Partnership
59,424,662.44 47,870,696.66
(Limited Partnership)
Guangzhou Heying Investment Partnership (Limited
285,793,577.87 288,209,197.58
Partnership)
Qingdao Home Wow Cloud Network Technology Co.,
2,600,050.50 2,629,009.63
Ltd
Qingdao RRS Service Co., Ltd. 31,316,518.68 33,010,000.00
Bingji (Shanghai) Corporate Management Co., Ltd. 972,200,487.88 928,444,178.47
Youjin (Shanghai) Corporate Management Co., Ltd 1,766,819,068.86 1,687,262,142.67
RRS (Shanghai) Investment Co., Ltd. ( 上（顺日日 3,211,580,125.21 3,066,931,168.49
）海 Investment 司公限有)
Haier Best Water Technology Co., Ltd. ( 水饮尔海世倍 79,785,557.39 33,455,159.59
司公限有技科 )
HuizhiXiangshun Equity Investment Fund (Qingdao)
119,008,967.03 120,000,000.00
Partnership (Limited Partnership)
Qingdao RRS Huizhi Investment Co., Ltd. 2,083,482.78 2,100,000.00
Qingdao Xinshenghui Technology Co., Ltd.( 晟鑫岛青 9,964,773.52
司公限有技科汇 )
Meiling Candy Washing Machine Co., Ltd.( 迪卡菱美 22,752,232.07 22,558,307.10
司公限有机衣洗 )
EuropaltersItaliaS.r.l. 9,361,965.48
Konan Electronic Co., Ltd 69,273,712.61 77,561,552.87
HNR Company (Private) Limited 114,055,318.97 92,141,887.27
HPZ LIMITED 71,269,048.97 66,827,745.66
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Haier Raya Electric S.A.E 10,568,507.40 10,741,234.10
ControladoraMabeS.A.deC.V. 4,131,983,673.10 3,667,310,241.31
Middle East Air conditioning Company,Limited 10,318,898.13 19,002,595.66
Total book value of investment 16,249,901,073.17 15,167,830,769.52
Total amount of the following financial data of
associates calculated based on shareholding percentage
Net profit 1,274,491,899.84 984,566,512.00
Other comprehensive income -34,119,700.06 -314,658,014.39
Total comprehensive income 1,240,372,199.78 669,908,497.61
X. SEGMENT REPORT
(1) Basis for determining the reporting segments and accounting policy
√Applicable □ Not Applicable
The Company is principally engaged in manufacture and sales of home appliances and relevant services
business, manufacture of upstream home appliances parts, distribution of products of third party, logistics
and after-sale business. The Company has three business segments: (1) China smart home business
segment; (2) Overseas home appliance and smart home business segment; (3) Other business segments.
The management of the Company assesses operating performance of each segment and allocates
resources according to the division. Sales between segments were mainly based on market price.
(1) China smart home business segment consists of:
① Internet of Food solutions: mainly engages in production and sales of refrigerator/freezers and
kitchen appliances.
② Internet of Clothing solutions: mainly engages in production and sales of washing machine
products.
③ Air energy solutions: mainly engages in production and sales of air conditioners.
④ Whole house water solutions: mainly engages in production and sales of water home appliances
such as water heaters and water purification products.
(2) Overseas home appliance and smart home business segment mainly includes overseas business
segments such as GEA, FPA, Candy and so on.
(3) Other business segments: mainly include channel, equipment components, small home appliance
business and others.
Due to centralized management under the headquarters or exclusion from the assessment scope of
segment management, the total assets of segments exclude monetary funds, financial assets held for
trading, derivative financial assets, dividends receivable, held-for-sale financial assets, other current
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assets, other equity instruments investment, long-term accounts receivable, long-term equity investment,
goodwill and deferred income tax assets; the total liabilities of segments exclude long-term and short-
term borrowings, financial liabilities held for trading, derivative financial liabilities, taxes payable,
interests payable, dividends payable, held-for-sale liabilities, bonds payable, deferred income tax
liabilities and other non-current liabilities; profits of segments exclude financial expenses, profit or loss
in fair value changes, income from investment, and income on disposal of assets, Non-value-added tax
refundable upon imposition component of other income, non-operating incomes and expenses and
income tax.
1
）（ Information of reportable segments
Segment information for the period
China smart home business
Internet of
Air energy Whole house water
Segment Internet of Food solutions clothing
solutions solutions
information solutions W
Refrigerator/ Kitchen Washing Water home
Air conditioners
freezers appliances machine appliances
Segment revenue 41,743,157,017.74 3,495,589,873.43 32,192,834,146.73 30,658,121,874.87 12,701,189,534.01
Including:
36,854,876,837.94 3,013,351,768.25 27,412,948,533.30 25,916,495,249.83 12,478,797,708.26
external revenue
Inter-segment
4,888,280,179.80 482,238,105.18 4,779,885,613.43 4,741,626,625.04 222,391,825.75
revenue
Total segment
38,754,084,806.60 3,442,698,782.42 31,944,204,039.40 27,951,528,749.31 11,242,746,656.47
operating cost
Segment
2,989,072,211.14 52,891,091.01 248,630,107.33 2,706,593,125.56 1,458,442,877.54
operating profit
Total segment
17,849,098,835.46 2,547,615,110.79 17,958,004,697.79 20,919,506,189.82 8,406,963,618.39
assets
Total segment
42,593,142,081.38 2,371,416,306.28 15,600,383,361.76 11,249,225,999.71 7,865,505,122.98
liabilities
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(continued)
Overseas home
Segment Inter-segment
appliance and smart Other business Total
information eliminations
home business
Segment revenue 113,725,197,263.88 92,166,599,326.81 -99,126,545,419.30 227,556,143,618.17
Including:
113,090,283,595.32 8,789,389,925.27 - 227,556,143,618.17
external revenue
Inter-segment
634,913,668.56 83,377,209,401.54 -99,126,545,419.30 -
revenue
Total segment
107,799,170,859.34 92,379,974,264.60 -99,170,658,940.10 214,343,749,218.04
operating cost
Segment operating
5,926,026,404.54 -213,374,937.79 44,113,520.80 13,212,394,400.13
profit
Total segment
57,368,272,498.73 51,069,491,924.21 -63,373,327,405.31 112,745,625,469.88
assets
Total segment
33,874,070,274.78 59,664,263,444.00 -63,106,428,270.31 110,111,578,320.58
liabilities
Segment information for the corresponding period of last year
China smart home business
Internet of Internet of
Air energy
Segment Internet of Food solutions clothing clothing
solutions
information solutions solutions
Refrigerator/ Kitchen Water home
Air conditioners Air conditioners
freezers appliances appliances
Segment
34,392,366,627.27 2,772,514,504.29 25,512,310,018.54 25,985,087,875.74 10,217,370,018.95
revenue
Including:
external 30,571,800,331.77 2,636,709,451.75 21,867,508,645.86 22,482,809,819.55 9,832,880,899.81
revenue
Inter-segment
3,820,566,295.50 135,805,052.54 3,644,801,372.68 3,502,278,056.19 384,489,119.14
revenue
Total segment
32,050,102,593.72 2,732,391,511.07 25,412,035,059.34 23,785,181,115.90 9,051,888,737.91
operating cost
Segment
2,342,264,033.55 40,122,993.22 100,274,959.20 2,199,906,759.84 1,165,481,281.04
operating profit
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Total segment
11,689,348,816.41 2,532,594,848.74 20,925,304,799.58 10,136,244,423.99 4,136,849,021.24
assets
Total segment
29,205,929,335.98 1,538,646,245.07 13,440,305,435.84 8,218,924,225.44 5,108,347,965.67
liabilities
(continued)
Overseas home
Segment appliance and Inter-segment
Other business Total
information smart home eliminations
business
Segment revenue 100,622,879,428.15 92,707,457,540.87 -82,486,555,932.78 209,723,430,081.03
Including: external
100,043,920,934.59 22,287,799,997.70 - 209,723,430,081.03
revenue
Inter-segment
578,958,493.56 70,419,657,543.17 -82,486,555,932.78 -
revenue
Total segment
96,622,453,341.44 92,705,972,354.35 -82,483,992,857.84 199,876,031,855.89
operating cost
Segment operating
4,000,426,086.71 1,485,186.52 -2,563,074.94 9,847,398,225.14
profit
Total segment
50,763,259,766.21 57,018,026,183.75 -54,988,029,529.27 102,213,598,330.65
assets
Total segment
31,137,719,930.78 60,188,210,663.05 -54,848,048,847.94 93,990,034,953.89
liabilities
(2) Geographical information
‘Other countries/regions’ in this report refers to all other countries/regions (including Hong Kong
and Macau Special Administration Region and Taiwan) other than the mainland China for the
purpose of information disclosure
External transaction revenue
Amount for the current Amount for the previous
Items
period period
Mainland China 112,316,894,142.15 107,675,765,368.40
Other countries/regions 115,239,249,476.02 102,047,664,712.63
Among which:
America 70,277,292,639.70 63,704,731,841.17
Australia 7,011,702,914.33 5,978,691,773.66
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South Asia 7,138,132,421.70 5,471,774,634.45
Europe 19,736,797,708.72 16,512,783,759.03
Southeast Asia 4,740,118,325.43 4,122,964,419.05
Middle East and Africa 1,478,785,406.72 1,205,510,726.84
Japan 3,491,226,268.28 3,613,139,400.23
Others 1,365,193,791.14 1,438,068,158.20
Total 227,556,143,618.17 209,723,430,081.03
Total non-current assets
Items Closing balance Opening balance
Mainland China 16,570,598,653.17 14,745,600,858.85
Other countries/regions 25,209,296,729.73 25,212,638,556.86
Total 41,779,895,382.90 39,958,239,415.71
Total non-current assets exclude: other equity instrument investments, long-term receivable, long-term
equity investments, goodwill, deferred income tax assets, and other non-current financial assets.
XI. DISCLOSURE OF FAIR VALUE
1. Fair value of assets and liabilities measured at fair value
The level to which the fair value measurement result belongs is determined by the lowest level
to which the input value is significant to the fair value measurement as a whole:
Level 1: Unadjusted quotes for the same asset or liability in an active market.
Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except
for Level 1 inputs.
Level 3: Unobservable inputs of related assets or liabilities.
At the end of the period
Input used for fair value measurement
Quotes in an Important unobservable input
Items Important observable
active market (Level 3) Total
input (Level 2)
(Level 1)
Continuously measured at
fair value
Financial assets held for
374,782,417.76 2,305,001,643.90 106,291,467.43 2,786,075,529.09
trading
Including: Bank wealth
2,168,622,090.00 2,168,622,090.00
management products
Forward foreign exchange
136,379,553.90 136,379,553.90
contract
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Investment fund 150,516,274.37 150,516,274.37
Investment in equity
224,266,143.39 106,291,467.43 330,557,610.82
instruments
Derivative financial assets 79,819,974.01 79,819,974.01
Including: Forward foreign
72,822,190.59 72,822,190.59
exchange contract
Forward commodity contract 6,997,783.42 6,997,783.42
Other equity instruments 21,055,159.54 2,812,000,000.00 2,015,654,279.42 4,848,709,438.96
Including: Equity instruments 2,812,000,000.00 2,015,654,279.42
measured at fair value
and changes of which
21,055,159.54 4,848,709,438.96
included in other
comprehensive
income
Other non-current assets 46,832,494.61 46,832,494.61
Including: Other non-current
46,832,494.61 46,832,494.61
financial assets
Financial liabilities held for 6,294,014.40
6,294,014.40
trading
Including: Forward foreign 6,294,014.40
6,294,014.40
exchange contract
Derivative financial
80,212,433.24 80,212,433.24
liabilities
Including: Forward foreign
60,527,532.76 60,527,532.76
exchange contract
Interest rate swap agreement 19,684,900.48 19,684,900.48
At the beginning of the period
Input used for fair value measurement
Quotes in an Important Important
Items
active market observable input unobservable Total
(Level 1) ） (Level 2) input (Level 3)
Continuously measured at fair value
Financial assets held for trading 113,759,845.57 1,967,483,015.21 83,949,637.05 2,165,192,497.83
Including: Bank wealth management
1,862,036,322.21 1,862,036,322.21
products
Forward foreign exchange contract 105,446,693.00 105,446,693.00
Investment fund 113,759,845.57 113,759,845.57
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Investment in equity instruments 83,949,637.05 83,949,637.05
Derivative financial assets 77,839,006.63 77,839,006.63
Including: Forward foreign exchange
52,194,232.55 52,194,232.55
contract
Interest rate swap agreement 25,644,774.08 25,644,774.08
Other equity instruments 19,802,461.70 2,639,222,803.84 2,659,025,265.54
Including: Equity instruments measured at
fair value and changes of which
19,802,461.70 2,639,222,803.84 2,659,025,265.54
included in other comprehensive
income
Other non-current assets 46,832,494.61 46,832,494.61
Including: Other non-current financial
46,832,494.61 46,832,494.61
assets
Financial liabilities held for trading 26,952,508.66 26,952,508.66
Including: Forward foreign exchange
26,952,508.66 26,952,508.66
contract
Derivative financial liabilities 239,582,532.90 239,582,532.90
Including: Forward foreign exchange
188,695,788.30 188,695,788.30
contract
Interest rate swap agreement 50,886,744.60 50,886,744.60
For financial instruments traded in an active market, the Company determines its fair value based
on its quotes in an active market; for financial instruments not traded in an active market, the
Company uses valuation techniques to determine its fair value.
2. The basis for determining the fair value of the continual Level 2 fair value measurement
items
Fair value at the end of
Items Valuation techniques
the period
Financial assets held for trading
Including: Bank wealth management products 2,168,622,090.00 Discounted cash
Discounted cash
Forward foreign exchange contract 136,379,553.90
flow
Derivative financial assets
Discounted cash
Including: Forward foreign exchange contract 72,822,190.59
flow
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Discounted cash
Forward commodity contract 6,997,783.42
flow
Other equity instruments investment — —
Including: equity instruments measured at fair value Recent transaction
2,812,000,000.00
through other comprehensive income methods
Financial liabilities held for trading
Discounted cash
Including: Forward foreign exchange contract 6,294,014.40
flow
Derivative financial liabilities
Discounted cash
Including: Forward foreign exchange contract 60,527,532.76
flow
Discounted cash
Interest rate swap agreement 19,684,900.48
flow
3. Continual Level 3 fair value measurement major items, the valuation techniques adopted
and information of important parameters
Significant
Fair value at the Valuation
Items unobservable Range Sensitivity of fair value to the input
end of the period technique
input
Other equity instruments
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1. 1% increase (decrease) in average P/E
multiple of the Comparable Companies
Including: SINOPEC 1. Average P/E
1. 27.43 would result in increase (decrease) in fair
Fuel Oil Sales multiple of peers
Market to 29.43 value by RMB45,300,000.00.
Corporation Limited (中 1,290,487,901.40 2. Discount for
approach 2. 30.74% 2. 1% increase (decrease) in the lack of
公限有份股售销化石国 lack of
to 32.74% marketability would result in decrease
司) marketability
(increase) in fair value by
RMB18,900,000.00.
4. Financial instruments not measured at fair value
Items Closing book value Closing fair value
Bonds payable (convertible corporate
334,730,048.82 567,173,133.58
bonds)
Financial assets and financial liabilities not measured at fair value include: monetary funds, bills
receivable, accounts receivable, other receivables, other current assets, long-term and short-term
borrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable, etc.
Except for the difference between the book value and the fair value of bonds payable disclosed above,
the difference between the book value and the fair value of financial assets and financial liabilities not
measured at fair value at the end of the period is small.
XII. RELATIONSHIP BETWEEN RELATED PARTIES AND THEIR TRANSACTIONS
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(I) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party Disclosures,
parties are considered to be related if one party has the ability to control or jointly control the other party
or exercise significant influence over the other party. Parties (two or more than two) are also considered
to be related if they are subject to common control, joint control or significant influence from another
party.
According to Management Practices for Information Disclosure of Listed Company (China
Securities Regulatory Commission Order No. 182), related legal entity or individual will be identified as
related parties in certain occasions.
(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of the Company
Relationships
Type of Legal Interest in the Voting rights to
Name Registered place Registered capital with the
enterprise representative Company the Company
Company
Collective
Haier Group Qingdao High-tech Parent
ownership 311,180,000 Zhou Yunjie 11.41% 11.41%
Corporation Zone Haier Park Company
company
Haier
COSMO Co., Subsidiary of
Joint-stock Qingdao High-tech
Ltd. (
卡尔海 631,930,000 Zhou Yunjie Parent 13.39% 13.39%
company Zone Haier Park
限 份 斯 Company
司 )
HCH (HK) Parties acting
Investment in concert of
Private company Hong Kong HKD 10,000 / 5.73% 5.73%
Management Parent
Co., Limited Company
Qingdao Haier
Parties acting
Venture &
Company with Qingdao Free Trade in concert of
Investment 923,000,000 Zhou Yunjie 1.83% 1.83%
limited liability Zone Parent
Information
Company
Co., Ltd.
Qingdao Limited Qingdao High-tech Parties acting
1,616,120,000 Zhang Ruimin 1.12% 1.12%
Haichuangzhi partnership Zone Haier Park in concert of
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Management company Parent
Consulting Company
Enterprise
(Limited
Partnership)
Parties acting
Haier
in concert of
International Private company Hong Kong HKD 2 / 0.62% 0.62%
Parent
Co., Limited
Company
2. Subsidiaries
The details of the subsidiaries of the Company are detailed in Note IX.1.
3. Joint ventures and associates
The details of associates and joint ventures of the Company are detailed in Note VII.11 and
IX.3.
4. Connected companies with no relationship of control
Relationship with the
Name
Company
Gooday Supply Chain Technologies Co., Ltd. Subsidiary of Haier Group
Shanghai Cotai Supply Chain Management Co., Ltd. Subsidiary of Haier Group
Qingdao Goodaymart Supply Chains Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Industrial Intelligence Research Institute Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Robot Co., Ltd. Subsidiary of Haier Group
Qingdao Blue Whale Technology Co., Ltd. Subsidiary of Haier Group
Chongqing Zhonglian Energy Technology Co., Ltd. Subsidiary of Haier Group
Dalian Haier International Trade Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group
Hefei Haier Logistics Co., Limited Subsidiary of Haier Group
Chongqing Haier Electrical Appliances Sales Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Logistics Co., Ltd. Subsidiary of Haier Group
CosmoplatChuangzhi IOT Technology Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Trading Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Travel Agency Co., Ltd. Subsidiary of Haier Group
Qingdao Haiyongda Property Management Co., Ltd. Subsidiary of Haier Group
Shanghai Zhiyu Technology Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Special Plastic Development Co., Ltd. Subsidiary of Haier Group
Qingdao Haina Cloud Intelligent System Co., Ltd. Subsidiary of Haier Group
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Qingdao Dingxin Electronic Technology Co., Ltd. Subsidiary of Haier Group
Hefei Haier Smart Electronics Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Industry and City Innovation Group Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Smart Electronics Co., Ltd. Subsidiary of Haier Group
Laiyang Haier Electrical Co. Ltd. Subsidiary of Haier Group
Subsidiary and associate of
Qingdao Haier New Materials R & D Co., Ltd.
Haier Group
Wolong Electric (Jinan) Motor Co., Ltd. Associate
Controladora Mabe S.A.deC.V. Associate
HNR Company (Private) Limited Associate
Qingdao Hegang New Material Technology Co., Ltd. Associate
Qingdao Haier Moulds Co., Ltd. Associate
HPZ Limited Associate
Qingdao HBIS Composite New Material Co., Ltd. Subsidiary of associate
Hefei Hegang New Material Technology Co., Ltd. Subsidiary of associate
(III)Related transactions
1. Details of the Company’s procurement of goods and services from related parties are as
follows:
Amount for the current Amount for the previous
Related parties
period period
Controladora Mabe S.A.deC.V. 12,314,855,657.89 11,999,474,973.38
Chongqing Haier Electrical Appliances Sales
5,274,865,476.66 3,551,418,241.21
Co., Ltd.
Gooday Supply Chain Technologies Co., Ltd. 3,847,847,323.30 2,597,452,446.62
HNR Company (Private) Limited 2,733,833,669.59 2,018,249,351.88
Cosmoplat Chuangzhi IOT Technology Co.,
2,121,388,092.90 555,538,358.70
Ltd.
Shanghai Cotai Supply Chain Management
1,624,701,243.17 1,716,167,555.69
Co., Ltd.
Hefei Hegang New Material Technology Co.,
1,190,287,247.15 906,960,612.06
Ltd.
Chongqing Haier Intelligent Electronics Co.,
1,031,357,405.38 241,701,291.50
Ltd.
Wolong Electric (Jinan) Motor Co., Ltd. 1,013,817,589.80 773,829,886.35
Qingdao HBIS Composite New Material Co.,
923,986,491.86 778,581,344.26
Ltd.
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Haier Smart Home Co., Ltd. 2021 Annual Report
Qingdao Ding Xin Electronics Technology
885,837,757.21 226,464,559.30
Co., Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd. 688,451,059.64 424,574,287.86
Other related parties 6,954,266,150.51 13,425,132,973.66
Total 40,605,495,165.06 39,215,545,882.47
2. Details of the Company’s sales of goods to related parties are as follows:
Amount for the current Amount for the previous
Related parties
period period
Controladora Mabe S.A.deC.V. 730,275,993.98 556,773,753.65
Qingdao Haier Special Plastic Development
701,097,705.82 623,502,863.63
Co., Ltd.
HNR Company (Private) Limited 681,960,950.97 434,316,420.93
Qingdao Haier International Trading Co., Ltd. 613,132,319.62 587,335,502.32
Qingdao Haier International Travel Agency Co.,
214,648,613.53 141,625,117.57
Ltd.
HPZ Limited 90,831,902.38 48,089,463.32
Chongqing Haier Electrical Appliances Sales
90,815,520.61 100,306,070.59
Co., Ltd.
Other related parties 906,110,423.34 1,666,886,162.31
Total 4,028,873,430.25 4,158,835,354.32
3. Amount of unsettled items of related parties
Items and name of customers Closing Balance Opening Balance
Bills receivable:
Qingdao Haina Cloud Intelligent System Co.,
21,511,057.07
Ltd.
Cosmoplat Chuangzhi IOT Technology Co.,
13,520,000.00
Ltd.
Qingdao Hegang New Material Technology
10,440,243.35
Co., Ltd.
Hefei Haier Smart Electronics Co., Ltd. 4,324,429.00 1,106,165.28
Other related parties 8,690,387.26
Accounts receivable:
HNR Company (Private) Limited 588,605,242.72 388,679,073.55
Controladora Mabe S.A.deC.V. 123,524,843.42 81,498,939.68
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Qingdao Haier International Travel Agency
99,648,729.88 113,933,378.64
Co., Ltd.
Chongqing Zhonglian Energy Technology Co.,
45,403,951.21 24,860,829.14
Ltd.
Shanghai Zhiyu Technology Co., Ltd. 43,349,588.61 12,817,842.19
Qingdao Haier Special Plastic Development
39,101,648.72 187,101,398.95
Co., Ltd.
Qingdao Haier International Trading Co., Ltd. 34,284,071.61 72,248,862.19
Qingdao Haina Cloud Intelligent System Co.,
31,824,063.09 17,159,667.62
Ltd.
Other related parties 224,141,742.32 663,077,856.12
Prepayments:
HNR Company (Private) Limited 82,148,476.31 78,420,575.44
Qingdao Haier International Trading Co., Ltd. 32,539,796.91 80,759,659.73
Qingdao Haier International Travel Agency
23,936,807.36 26,860,737.70
Co., Ltd.
Hefei Haier Logistics Co., Limited 18,382,367.83 1,398,654.93
Qingdao Haiyongda Property Management Co.,
17,069,128.00 16,353,318.00
Ltd.
Other related parties 27,184,746.15 76,852,557.93
Other receivables:
Gooday Supply Chain Technologies Co., Ltd. 27,180,000.00 1,405,264.35
Qingdao Haier International Trading Co., Ltd. 16,601,596.21 4,779,282.75
Controladora Mabe S.A.deC.V. 16,260,655.41 15,777,379.54
Qingdao Junyi Holding Group Co., Ltd. 88,640,000.00
Other related parties 93,718,348.16 164,345,066.12
Bills payable:
Laiyang Haier Electrical Co. Ltd. 50,019,985.82 49,720,701.09
Qingdao Haier New Materials R & D Co., Ltd. 90,348,253.59 56,956,689.86
Other related parties 4,127,872.00
Accounts payable:
Qingdao Haier Parts Procurement Co., Ltd. 1,985,902,077.10 1,647,724,215.65
Controladora Mabe S.A.deC.V. 941,545,815.41 316,079,431.43
Hefei Haier Logistics Co., Limited 337,481,850.21 242,590,693.06
Chongqing Haier Electrical Appliances Sales
332,415,203.41 407,357,263.21
Co., Ltd.
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Chongqing Haier Logistics Co., Ltd. 305,338,331.45 290,743,396.11
Cosmoplat Chuangzhi IOT Technology Co.,
268,605,818.56 671,426,347.70
Ltd.
Dalian Haier International Trade Co., Ltd. 175,739,251.85 197,461,939.55
Qingdao HBIS Composite New Material Co.,
161,242,782.98 104,132,210.10
Ltd.
Hefei Hegang New Material Technology Co.,
151,305,730.27 120,733,728.22
Ltd.
Qingdao Haier Moulds Co., Ltd. 136,685,798.49 134,769,248.08
Other related parties 753,058,673.76 1,324,746,884.11
Contract liabilities:
Qingdao Haier Parts Procurement Co., Ltd. 91,082,063.05
Wolong Electric (Jinan) Motor Co., Ltd. 21,373,101.27 520,294.42
Chongqing Zhonglian Energy Technology Co.,
17,210,554.92 17,210,554.92
Ltd.
Other related parties 24,928,637.72 19,659,969.53
Other payables:
Gooday Supply Chain Technologies Co., Ltd. 687,378,382.22 790,674,332.08
Shanghai Cotai Supply Chain Management Co.,
154,351,301.35 183,123,979.68
Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd. 72,545,343.35 77,995,078.37
Qingdao Haier Industrial Intelligence Research
30,783,024.61 25,622,538.88
Institute Co., Ltd.
Qingdao Haier Robot Co., Ltd. 28,372,133.16 49,076,364.39
Qingdao Blue Whale Technology Co., Ltd. 27,367,393.54 3,056,124.30
Chongqing Zhonglian Energy Technology Co.,
22,715,499.00 59,926,366.50
Ltd.
Dalian Haier International Trade Co., Ltd. 21,800,000.00 21,800,000.00
Qingdao Haier Moulds Co., Ltd. 21,298,170.87 73,679,757.76
Other related parties 109,983,863.60 259,025,181.20
4. Others
√Applicable □ Not Applicable
(1) On 29 April 2021, Haier Group Corporation and Haier Group Finance Co., Ltd. (hereafter, the
“Finance Company”) renewed the Financial Services Framework Agreement, and the “resolution on the
renewal of the Financial Services Framework Agreement between Haier Smart Home Co., Ltd. and Haier
Group Corporation and the estimated amount of connected transaction” was considered and passed at the
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2020 Annual General Meeting held on 25 June 2021. The Financial Services Framework Agreement
became effective from the passing of the resolution at the general meeting.
Various current balances of the Company and the Finance Company are as follows:
Items Closing Balance Opening Balance
Monetary funds deposited at the
28,632,146,919.30 24,964,098,241.74
Finance Company
Interest receivable from the
260,262,550.46 120,777,203.01
Finance Company
Loans of the Finance Company 336,507,659.12 454,470,450.05
Interest payable to the Finance
1,813,534.66 2,808,989.55
Company
Bank acceptance note issued 21,697,666,574.19 18,314,739,389.38
Foreign exchange derivatives of
1,577,848.15 29,804,904.63
the Finance Company
Various balances of the Company and the Finance Company are as follows:
Items Amount for the current period Amount for the previous period
Interest income of the Finance
339,728,297.25 158,335,607.74
Company
Interest expense of the Finance
8,137,583.63 86,769,880.74
Company
Service fee of the Finance
23,493,333.12 17,649,560.80
Company
(2) The lease expense of the Company and its subsidiaries for production and operation leased from
related parties for the current period was RMB106 million.
(3) Related information on the guarantor of the Company’s guaranteed borrowings as a related
party at the end of period:
Borrowing
Lender Guarantor
amounts
Haier Russian Electric Co., Ltd. 304,896,830.40 Haier Group Corporation
Total 304,896,830.40
(IV) Pricing Policy
1. Related-party Sales
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Some related parties purchase components through the independent procurement platform of the
Company, purchase electrical appliances for sales from the Company, and receive after-sales services,
R&D service, housing rental and other business provided by the company due to their business needs. In
November 2020, according to the implementation of connected transactions in the early stage and the
relevant listing requirements in Hong Kong, the Company and Haier Group Corporation revised and
signed the Product and Materials Sales Framework Agreement, the Service Provision Framework
Agreement and the Property Leasing Framework Agreement on the basis of the original execution
contract, which agreed on the financial connected transactions. The pricing principle included that both
parties should agree on the price which is not less favourable than those provided by the Company to the
Independent Third Parties on arm’s length to ensure the fairness and reasonableness of connected
transactions. The valid term of the agreement commenced from the listing date to 31 December 2022,
which can be renewed for another three years upon expire.
2. Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group Corporation
and its subsidiaries for procurements of part of raw materials. Moreover, the Company entrusted Haier
Group Corporation and its subsidiaries to provide the Company with logistics and distribution, energy
and power, basic research and testing, equipment leasing, house leasing and maintenance, greening and
cleaning, gift procurement, design, consulting, various ticket booking and other services. In November
2020, according to the implementation of connected transactions in the early stage and the relevant listing
requirements in Hong Kong, the Company and Haier Group Corporation revised and signed the Product
and Materials Sales Framework Agreement, the Service Provision Framework Agreement and the
Property Leasing Framework Agreement on the basis of the original execution contract, which agreed
on the financial connected transactions. The pricing principle included that both parties should agree on
the price which is not less favourable than those provided by the Company to the Independent Third
Parties on arm’s length to ensure the fairness and reasonableness of connected transactions. The valid
term of the agreement commenced from the listing date to 31 December 2022, which can be renewed for
another three years upon expire.
3. Financial aspect
Some of the financial services such as deposit and loan service, discounting service and foreign
exchange derivatives needed by the Company are provided by Haier Group Corporation, its subsidiaries
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and other companies. According to the Financial Service Agreement entered among the Company, Haier
Group Corporation and other parties, the price of financial services is determined by the principle of not
less favourable than market value fair. The Company is entitled to decide whether to keep cooperation
relationship with them with the knowledge of the price prevailing in the market and in combination with
its own interests. While performing the agreement, the Company could also require other financial
service institutions to provide related financial services basing on actual situation. In order to meet the
Company’s demands such as the avoidance of foreign exchange fluctuation risk, the Company may
choose Haier Group Finance Co., Ltd. to provide some foreign exchange derivative business after
comparing with comparable companies. The Company will uphold the safe and sound, appropriate and
reasonable principle, under which all foreign exchange capital business shall have a normal and
reasonable business background to eliminate speculative operation. At the same time, the Company has
specified the examination and permission rights, management positions and responsibilities at all levels
for its foreign exchange capital business to eradicate the risks of operation by persons and improved its
response speed to risks on the premise that the risks are effectively controlled. In June 2021, the Company
and Haier Group Corporation renewed the Financial Services Framework Agreement, which agreed on
the financial connected transactions. The pricing principle included the deposit interest rate not lower
than the maximum interest rate of major banks listed and the loan interest rate not less favourable than
the market price to ensure the fairness and reasonableness of connected transactions. The valid term of
the agreement lasts until 31 December 2023, which can be renewed for another three years upon expire.
4. Others
The Company signed the Intellectual Property Licensing Framework Agreement with Haier Group
Corporation in November 2020. According to the agreement, Haier Group has agreed to grant or procure
its subsidiaries and contact persons to grant the license to the Company at nil consideration to use all its
intellectual property rights, including but not limited to trademarks, patents, copyrights and logos for the
products, packaging, services and business introduction documents of the Company. The date of the
Intellectual Property Licensing Framework Agreement shall be permanently effective from the listing
date. When such specific intellectual property rights expire and are not renewed by Haier Group, our
right to use certain intellectual property rights under the Intellectual Property Licensing Framework
Agreement will terminate.
XIII. SHARE-BASED PAYMENTS
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(1) Employee Stock Ownership Plan
The A Share Core Employee Stock Ownership Plan (2021-2025), H Share Core Employee Stock Ownership
Plan (2021-2025) and H Share Restricted Share Unit Plan (2021-2025) were adopted at the 2020 General Meeting
held on 25 June 2021.
(a) A Share Core Employee Stock Ownership Plan (2021-2025)
According to the relevant arrangement in respect of the A Share Core Employee Stock Ownership Plan
(2021-2025) considered and passed at the 2020 General Meeting held on 25 June 2021, 25,440,807 Shares in the
“securities account for repurchase of Haier Smart Home Co., Ltd.” were transferred in a non-transactional manner
to the specific account of “Haier Smart Home Co., Ltd. - A Share Core Employee Stock Ownership Plan (2021-
2025)” on 22 July 2021. The shares purchased by the plan are subject to a lock-up period of 12 months.
(b) H Share Core Employee Stock Ownership Plan (2021-2025)
According to the relevant arrangement in respect of the H Share Core Employee Stock Ownership Plan
(2021-2025) considered and passed at the 2020 General Meeting held on 25 June 2021, the Company had engaged
an asset management company to purchase 3,757,000 H Shares in aggregate in the secondary market through the
Hong Kong Stock Connect. The shares purchased by the plan are subject to a lock-up period of 12 months.
(2) Share Options
① According to the “resolution on the first grant of share options to the incentive target of Haier Smart
Home Co., Ltd.” passed on the 23rd meeting of the 10th session of the Board of Directors of the Company on 15
September 2021, it was agreed that on the date of the first grant on 15 September 2021, 46,000,000 share options
would be granted to 400 qualifying incentive targets at the exercise price of RMB25.63 per Share.
Number for the Number for the
Share Options
current period previous period
At the beginning of the period
Granted during the period 46,000,000.00
Vested during the period
Lapsed during the period
At the end of the period 46,000,000.00
② According to the “resolution on the grant of share options reserved for the 2021 Share Option of A
Share Incentive Plan to the incentive target of Haier Smart Home Co., Ltd.” passed on the 25rd meeting of the
10th session of the Board of Directors of the Company on 15 December 2021, it was agreed that on the date of
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the grant of reserved share options on 15 December 2021, 4,525,214 share options would be granted to 18
qualifying incentive targets at the exercise price of RMB25.63 per Share.
Number for the Number for the
Share Options
current period previous period
At the beginning of the period
Granted during the period 4,525,214.00
Vested during the period
Lapsed during the period
At the end of the period 4,525,214.00
(3) Restricted Shares
(a) According to the arrangement in respect of the H Share Restricted Share Unit Plan (2021-2025)
considered and passed at the 2020 General Meeting held on 25 June 2021, the number of restricted shares granted
by the Company during the period was 4,438,027 Shares. Subject to the satisfaction of the predetermined result
condition by the Company, restricted shares granted and received would be vested on the first, second and third
anniversary of 1 August 2021, respectively.
(b)Changes of restricted share for the current period
Number for the Number for the
Number of restricted shares
current period previous period
At the beginning of the period
Granted during the period 4,438,027.00
Vested during the period
Lapsed during the period
At the end of the period 4,438,027.00
(4) Method of determining the fair value of equity instrument on the date of grant:
(a) The Company has adopted the B-S model to determine the fair value of the share options.
The B-S model is subject to six variables: current price of the target share (S), exercise price of the
option (K), risk-free rate (r), valid term of the option (t), expected volatility of the share price (σ),
and the dividend rate of the target share (i).
Parameters selected for the calculation of the value of the option of the Company are as follows:
The first tranche (1) share price (S): RMB26.02 per share (closing price on the date of grant on 15
September 2021). (2) exercise price (K): RMB25.63 per share. (3) risk-free rate (r): according to the
maturity yield rate of the China Government Bonds from Bloomberg’s system, the risk-free rate for one
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year was 2.40%; 2.54% for two years; 2.59% for three years; 2.67% for four years; and 2.74% for five
years, where the risk-free rate for the fourth year was calculated as the arithmetic average of the risk-free
rate of the third and fifth year. (4) lifetime of the option (t): 1 year, 2 years, 3 years, 4 years and 5 years,
respectively (from the date of grant to the deadline of the first exercisable date of each tranche). (5)
historical volatility rate (σ): 0.4050 (1 year); 0.3983 (2 years); 0.3864 (3 years); 0.3784 (4 years); 0.3568
(5 years). The interval adopted for the calculation of historical volatility was the continuous closing price
of the Company in the preceding five years. At the same time, the historical volatility for the preceding 1,
2, 3, 4, and 5 years was calculated, respectively, based on the differences in waiting period. (6) yield rate
(i) 1.4066% based on the yield rate shown in Bloomberg’s system on the valuation date (15 September
2021), dividing the dividend per share by the closing price on the date of grant. According to the
calculation under the above pricing model, the theoretical aggregate value of the 46,000,000 share options
granted under this incentive plan of the Company amounted to RMB308,000,000.
The second tranche (1) share price (S): RMB29.40 per share (closing price on the date of grant on
15 December 2021). (2) exercise price (K): RMB25.63 per share. (3) risk-free rate (r): according to the
maturity yield rate of the China Government Bonds from Bloomberg’s system, the risk-free rate for one
year was 2.30%; 2.49% for two years; 2.58% for three years; 2.64% for four years; and 2.70% for five
years, where the risk-free rate for the fourth year was calculated as the arithmetic average of the risk-free
rate of the third and fifth year. (4) lifetime of the option (t): 1 year, 2 years, 3 years, 4 years and 5 years,
respectively (from the date of grant to the deadline of the first exercisable date of each tranche). (5)
historical volatility rate (σ): 0.4040 (1 year); 0.4098 (2 years); 0.3891 (3 years); 0.3827 (4 years); 0.3584
(5 years). The interval adopted for the calculation of historical volatility was the continuous closing price
of the Company in the preceding five years. At the same time, the historical volatility for the preceding 1,
2, 3, 4, and 5 years was calculated, respectively, based on the differences in waiting period. (6) yield rate
(i) 1.2449% based on the yield rate shown in Bloomberg’s system on the valuation date (15 December
2021), dividing the dividend per share by the closing price on the date of grant. According to the
calculation under the above pricing model, the theoretical aggregate value of the 4,525,214 share options
granted under this incentive plan of the Company amounted to RMB41,000,000.
(b) The fair value on the date of grant was arrived at on the basis of the share price of the Company on
the date of grant, taking into account the current value of cash dividend.
(5) Based on the latest available subsequent information, such as change in number of vesting employee,
result condition of the Company and evaluation of personal performance appraisal of incentive targets,
the Company makes the best estimation of the number of vesting equity instruments, based on which,
the Company includes services received for the current period in relevant costs of expenses in accordance
with the fair value of the equity instrument on the date of grant, and accordingly included in the capital
reserve.
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Expense recognized in respect of the share-based payment incentive plan for the period:
RMB209,000,000 for the stock ownership plan; RMB36,000,000 for the share options; and
RMB20,000,000 for the restricted shares.
On 31 December 2021, balance associated with the above share-based payment incentive plans
provided in the capital reserve amounted to RMB262,000,000.
XIV. CONTINGENCIES
□Applicable √ Not Applicable
As of 30 March 2022, the Company has no significant contingencies that need to be disclosed.
XV. EVENTS AFTER THE BALANCE SHEET DATE
1. According to the resolution of the 27th meeting of the Tenth session of the Board of Directors of
the Company held on 30 March 2022, the profit for the year is proposed to be distributed on the basis of
the total number of shares on the record date after deducting the repurchased shares from the repurchased
account when the plan is implemented in the future, the Company will declare cash dividend of RMB4.60
(including taxes) for every 10 shares to all shareholders.
2. On the 26th meeting of the 10th session of the Board of Directors of the Company on 11 January
2022, the “resolution on the placing of new H Shares under the general mandate of Haier Smart Home
Co., Ltd.” was considered and passed. According to the placing agreement, the Company intended to
issue 41,413,600 H Shares. As at 21 January 2022, the Company had received, in aggregate, newly
injected capital (share capital) contributed by the shareholders of RMB41,413,600.
3. The Company has subsidiaries in Russia engaging in the production and sale of home
appliances. As of the date of this report, the Russian-Ukrainian conflict has not imposed a material impact
on the Company's production and sales in Russia. The financial impact of the incident on the Company
is uncertain, but the Company will continue to assess the effects of the incident in the future as it develops.
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XVI. RISKS RELATED TO FINANCIAL INSTRUMENTS
√Applicable □ Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
Closing Balance
Financial assets Financial assets
measured at fair measured at fair
Measured at
Items value and changes value and changes
amortized cost Total
of which included in of which included in
current profit and other
loss comprehensive income
Monetary funds 45,857,170,275.40 45,857,170,275.40
Financial assets held for
2,786,075,529.09 2,786,075,529.09
trading
Derivative financial assets 79,819,974.01 79,819,974.01
Receivable 13,354,791,068.29 13,354,791,068.29
Accounts receivable 14,631,018,397.43 14,631,018,397.43
Other receivables 1,955,082,163.25 1,955,082,163.25
Other current assets 316,590,333.42 316,590,333.42
Long-term receivables 308,998,755.30 308,998,755.30
Other equity instruments 4,848,709,438.96 4,848,709,438.96
Other non-current assets 46,832,494.61 46,832,494.61
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Financial assets (continued)
Opening Balance
Financial assets
Financial assets measured at fair
measured at fair value and
value and changes Measured at changes
Items
of which included amortized cost of which included Total
in in
current profit and other
loss comprehensive
income
Monetary funds 46,467,732,459.51 46,467,732,459.51
Financial assets held for
2,165,192,497.83 2,165,192,497.83
trading
Derivative financial
77,839,006.63 77,839,006.63
assets
Receivable 14,136,349,754.34 14,136,349,754.34
Accounts receivable 15,930,024,286.67 15,930,024,286.67
Other receivables 1,717,691,799.32 1,717,691,799.32
Other current assets 554,131,037.76 554,131,037.76
Long-term receivables 330,588,978.97 330,588,978.97
Other equity
2,659,025,265.54 2,659,025,265.54
instruments
Other non-current assets 46,832,494.61 46,832,494.61
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Financial liabilities
Closing Balance
Financial liabilities Financial liabilities
Items
measured at measured at Total
fair value amortised cost
Short-term borrowings 11,226,212,134.39 11,226,212,134.39
Financial liabilities held
6,294,014.40 6,294,014.40
for trading
Derivative financial
80,212,433.24 80,212,433.24
liabilities
Bills payable 25,023,238,406.72 25,023,238,406.72
Accounts payable 42,344,857,144.49 42,344,857,144.49
Other payables 17,524,160,065.70 17,524,160,065.70
Non-current liabilities
6,745,950,334.20 6,745,950,334.20
due in one year
Long-term borrowings 3,038,573,824.53 3,038,573,824.53
Bonds payable 334,730,048.82 334,730,048.82
Long-term payables 99,602,707.76 99,602,707.76
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Financial liabilities (continued)
Opening Balance
Financial liabilities Financial liabilities
Items
measured at measured at Total
fair value amortised cost
Short-term borrowings 7,687,908,165.88 7,687,908,165.88
Financial liabilities held
26,952,508.66 26,952,508.66
for trading
Derivative financial
239,582,532.90 239,582,532.90
liabilities
Bills payable 21,236,057,053.67 21,236,057,053.67
Accounts payable 36,309,048,800.85 36,309,048,800.85
Other payables 17,063,294,004.33 17,063,294,004.33
Non-current liabilities
4,950,555,670.08 4,950,555,670.08
due in one year
Other current liabilities 5,535,262,500.00 5,535,262,500.00
Long-term borrowings 11,821,416,259.81 11,821,416,259.81
Bonds payable 6,713,501,050.27 6,713,501,050.27
Long-term payables 98,203,261.27 98,203,261.27
Please refer to related items in Note VII for details on each of the financial instruments of the Company.
Risks related to these financial instruments and the risk management policies taken by the Company to
mitigate these risks are summarized below. The management of the Company manages and monitors
these risk exposures to ensure the above risks are well under control.
1. Credit risk
The credit risk of the Company mainly arises from bank deposits, bills receivable, accounts
receivable, interest receivable, other receivables and wealth management products.
(1) The Company’s bank deposits and wealth management products are mainly deposited in Haier
Finance Co., Ltd., state-owned banks and other large and medium-sized listed banks. The interest
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receivables are mainly the accrued interests from fixed deposits which are deposited in the above banks.
The Group does not believe there is any significant credit risk due to defaults of its counterparties which
would cause any significant loss. (2) Accounts receivable and bills receivable: The Company only trades
with approved and reputable third parties. All customers who are traded by credit are subject to credit
assessment according to the policies of the Company, and the payment terms shall be determined on a
reasonable basis. The Company monitors the balances of accounts receivable on an ongoing basis and
purchases credit insurance for receivables of large-amount credit customers in order to ensure the
Company is free from material bad debts risks. (3) Other receivables of the Company mainly include
export tax refund, borrowings and contingency provision. The Company strengthened its management
and continuous monitoring in respect of these receivables and relevant economic business based on
historical data, so as to ensure that the Company’s significant risk of bad debts is controllable and will
be further reduced.
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling
obligations associated with financial liabilities. To control such risk, the Company utilizes various
financing methods such as notes settlement and bank loans to strive for a balance between sustainable
and flexible financing. It also has obtained bank credit facilities from several commercial banks to satisfy
its needs for working capital and capital expenditures.
3. Exchange rate risk
The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia, South Asia,
central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and other currencies.
The Company’s overseas assets and liabilities denominated in foreign currencies as well as
transactions to be settled in foreign currencies expose the Company to fluctuations in exchange rates.
The Company’s finance department is responsible for monitoring the size of transactions in foreign
currencies and assets and liabilities denominated in foreign currencies to minimize the risk of exposure
to fluctuation in exchange rate; the Company resorts the way of signing forward foreign exchange
contracts to avoid the risk of exchange fluctuation.
4. Interest rate risk
The Company’s interest rate risk arises primarily from its long- and short- term bank loans and
bonds payables which are interest-bearing debts. Financial liabilities with floating interest rates expose
the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the
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Company to fair value interest rate risk. The Group determines the relative proportion of fixed-interest
rate and floating interest rate contracts in light of the prevailing market conditions.
XVII. OTHER SIGNIFICANT EVENTS
The Company has no other significant events that need to be disclosed.
XVIII. NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE
PARENT COMPANY
1. Accounts receivable
Aging Closing Balance Opening Balance
Within one year 546,532,442.90 5,491,427,973.11
1–2 years 416,430.64
2–3 years
Over 3 years
Accounts receivable balance 546,532,442.90 5,491,844,403.75
Allowance for bad debts 308,333.33
Net receivables 546,532,442.90 5,491,536,070.42
The total amount of the top 5 accounts receivable at the end of the period was
RMB546,349,942.90, accounting for 99.97% of book balance of the accounts receivable.
Provision for bad debts is made on a portfolio basis:
□ Applicable √ Applicable
Decrease for the current
Increase for the current period
period Closing
Opening
Items Provision for Write-off Balance
Balance Other
the current Reversal and other
increase
period movement
Allowance
308,333.33 308,333.33
for bad debts
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2. Other receivables
Presented by items
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing Balance Opening Balance
Interest receivable 51,632,471.99 38,582,434.11
Dividend receivable 3,615,840,000.00
Other receivables 12,577,807,696.42 3,867,790,953.50
Total 16,245,280,168.41 3,906,373,387.61
Interest receivable
√Applicable □ Not Applicable
Unit and Currency: RMB
Item Closing Balance Opening Balance
Within 1 year 51,632,471.99 38,582,434.11
More than 1 year
Total 51,632,471.99 38,582,434.11
Dividend receivable
√Applicable □ Not Applicable
Unit and Currency: RMB
Aging Closing Balance Opening Balance
Within 1 year 3,615,840,000.00
More than 1 year
Total 3,615,840,000.00
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Other receivables
① The disclosure of other receivables by aging is as follows:
Aging Closing Balance Opening Balance
Within one year 12,040,141,153.64 3,501,616,045.85
More than one year 537,791,379.00 366,178,683.57
Other receivables balance 12,577,932,532.64 3,867,794,729.42
Allowance for bad debts 124,836.22 3,775.92
Net other receivables 12,577,807,696.42 3,867,790,953.50
② The total amount of the top 5 other receivables at the end of the period is
RMB9,951,615,765.33, accounting for 79.12% of book balance of other receivables.
③ Changes in bad debt provision for other receivables in the current period:
Increase for the current period Decrease for the current period
Opening
Provision for Write-off Closing
Items Balance
the current Other increase Reversal and other Balance
period movement
Allowance
3,775.92 121,060.30 124,836.22
for bad debts
3. Long-term equity investment
√Applicable □ Not Applicable
(1) Details of long-term equity investments:
Unit and Currency: RMB
Closing Balance Opening Balance
Items Provision for Provision for
Book balance Book balance
impairment impairment
Investments to subsidiaries 49,377,425,428.31 7,100,000.00 49,231,447,092.82 7,100,000.00
Investments to associates and joint
3,252,734,849.46 109,300,000.00 3,175,179,977.39 109,300,000.00
ventures
Total 52,630,160,277.77 116,400,000.00 52,406,627,070.21 116,400,000.00
(2) Long-term equity investments to subsidiaries
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Impairment
provisions
Increase/Decrease
Investee Opening Balance Closing Balance at the end
for the period
of the
period
I. Subsidiaries:
Chongqing Haier Electronics Sales Co., Ltd. 9,500,000.00 9,500,000.00
Haier Group (Dalian) Electrical Appliances Industry
34,735,489.79 34,735,489.79
Co., Ltd
Qingdao Haier Refrigerator Co., Ltd. 402,667,504.64 402,667,504.64
Qingdao Haier Special Refrigerator Co., Ltd. 329,832,047.28 329,832,047.28
Qingdao Haier Information Plastic Development Co.,
102,888,407.30 102,888,407.30
Ltd.
Dalian Haier Precision Products Co., Ltd. 41,836,159.33 41,836,159.33
Hefei Haier Plastic Co., Ltd. 42,660,583.21 42,660,583.21
Qingdao Haier Technology Co., Ltd. 16,817,162.03 16,817,162.03
Qingdao Household Appliance Technology and
66,778,810.80 66,778,810.80
Equipment Research Institute
Qingdao Meier Plastic Powder Co., Ltd. 24,327,257.77 24,327,257.77
Chongqing Haier Precision Plastic Co., Ltd. 47,811,283.24 47,811,283.24
Qingdao Haier Electronic Plastic Co., Ltd. 48,000,000.00 21,200,000.00 69,200,000.00
Dalian Haier Refrigerator Co., Ltd. 99,000,000.00 39,600,000.00 138,600,000.00
Dalian Haier Air-conditioning Co., Ltd. 99,000,000.00 99,000,000.00
Guizhou Haier Electronics Co., Ltd. 96,904,371.71 96,904,371.71
Hefei Haier Air-conditioning Co., Limited 67,110,323.85 67,110,323.85
Qingdao Haier Refrigerator (International) Co., Ltd. 238,758,240.85 238,758,240.85
Qingdao Haier Air-Conditioner Electronics Co., Ltd. 1,113,433,044.51 17,674,900.00 1,131,107,944.51
Qingdao Haier Air Conditioner Gen Corp., Ltd. 220,636,306.02 220,636,306.02
Qingdao Haier Special Freezer Co., Ltd. 442,684,262.76 28,846,300.00 471,530,562.76
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Qingdao Haier Dishwasher Co., Ltd. 206,594,292.82 206,594,292.82
Wuhan Haier Freezer Co., Ltd. 47,310,000.00 47,310,000.00
Wuhan Haier Electronics Holding Co., Ltd. 100,715,445.04 100,715,445.04
Chongqing Haier Air-conditioning Co., Ltd 100,000,000.00 100,000,000.00
Hefei Haier Refrigerator Co., Ltd. 49,000,000.00 49,000,000.00
Qingdao Haier Whole Set Home Appliance Service
118,000,000.00 118,000,000.00
Co., Ltd.
Chongqing Haier Refrigeration Appliance Co., Ltd. 91,750,000.00 91,750,000.00
Haier Shanghai Zhongzhi Fang Chuang Ke
2,000,000.00 2,000,000.00
Management Co., Ltd.
Qingdao Haier Special Refrigerating Appliance Co.,
100,000,000.00 100,000,000.00
Ltd.
Haier Shareholdings (Hong Kong) Limited 26,022,782,526.24 26,022,782,526.24
Shenyang Haier Refrigerator Co., Ltd. 100,000,000.00 100,000,000.00
Foshan Haier Freezer Co., Ltd. 100,000,000.00 100,000,000.00
Zhengzhou Haier Air-conditioning Co., Ltd. 100,000,000.00 100,000,000.00
Qingdao Haidayuan Procurement Service Co., Ltd. 20,000,000.00 20,000,000.00
Qingdao Haier Intelligent Technology Development
130,000,000.00 130,000,000.00
Co., Ltd.
Qingdao Haier Technology Investment Co., Ltd. 367,505,635.00 367,505,635.00
Qingdao Casarte Smart Living Appliances Co., Ltd. 10,000,000.00 10,000,000.00
Haier Overseas Electric Appliance Co., Ltd. 500,000,000.00 500,000,000.00
Haier (Shanghai) Electronics Co., Ltd. 12,500,000.00 12,500,000.00
Haier U+smart Intelligent Technology (Beijing) Co.,
143,000,000.00 143,000,000.00
Ltd.
Haier Electronics Group Co., Ltd. 16,730,707,938.63 -12,751,300,336.02 3,979,407,602.61 7,100,000.00
Flourishing Reach Limited (SPVX) 12,751,300,336.02 12,751,300,336.02
Qingdao Haidarui Procurement Service Co., Ltd. 107,800,000.00 107,800,000.00
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Qingdao Haier Intelligent Household Appliances Co.,
326,400,000.00 326,400,000.00
Ltd.
Qingdao Haidacheng Procurement Service Co., Ltd. 100,000,000.00 100,000,000.00
Qingdao Haier Quality Inspection Co., Ltd. 18,657,135.49 18,657,135.49
Qingdao Haier Home AI Industry Innovation Center
20,000,000.00 20,000,000.00
Co., Ltd.
Haier Zhijia Experience Cloud Ecological
100,000,000.00 100,000,000.00
Technology Co., Ltd.
Total 49,231,447,092.82 145,978,335.49 49,377,425,428.31 7,100,000.00
(3) Long-term equity investments to associates
Increase/Decrease for the current period
Increased/ Investment Impairment
Opening decreased income Closing provisions at
Name of investee
Balance amount for recognized Others Balance the end of
the current under equity the period
period method
Wolong Electric
136,709,910.73 24,389,362.58 -15,890,000.00 145,209,273.31
(Jinan) Motor Co., Ltd.
Qingdao Haier SAIF
Smart Home Industry
385,797,036.73 90,366,894.80 -82,565,558.94 393,598,372.59
Investment Center
(Limited Partnership)
Bank of Qingdao Co.,
975,756,025.82 78,881,075.12 -3,156,237.67 1,051,480,863.27
Ltd.
Mitsubishi Heavy
Industries Haier
654,581,961.84 94,920,014.89 -66,600,000.00 682,901,976.73
(Qingdao) Air-
conditioners Co., Ltd.
Qingdao Haier Carrier
Refrigeration Equipment 415,298,165.93 18,829,952.52 -25,074,310.40 409,053,808.05 21,000,000.00
Co., Ltd.
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Qingdao Haier
328,987,205.06 -51,884,641.19 277,102,563.87 88,300,000.00
Multimedia Co., Ltd
Hefei Hegang New
Material Technology 278,049,671.28 20,073,071.70 -4,734,751.34 293,387,991.64
Co., Ltd.
Total 3,175,179,977.39 275,575,730.42 -198,020,858.35 3,252,734,849.46 109,300,000.00
4. Operating revenue and operating cost
(1) Information of operating revenue and operating cost
√Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the current period Amount for the previous period
Items
Revenue Cost Revenue Cost
Primary Business 208,799,283.50 197,653,713.44 7,221,635,652.63 5,941,477,236.22
Other Business 144,998,965.02 117,703,392.70 146,005,360.76 126,176,580.13
Total 353,798,248.52 315,357,106.14 7,367,641,013.39 6,067,653,816.35
5. Investment income
√Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the previous
Items Amount for the current period
period
Investment income from long-term equity
3,633,540,000.00 191,366,562.3000
investment accounted for using cost method
Long-term equity investments income
275,575,730.42 111,755,685.69
calculated by the equity method
Investment income generated from disposal
3,962,491,511.91
of long-term equity investment
Income from wealth management products 9,015,443.80 17,628,284.37
Investment income from investment in other
269,896.34 268,193.52
equity instrument during the holding period
Total 3,918,401,070.56 4,283,510,237.79
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XIX. APPROVAL OF FINANCIAL REPORT
This financial report was approved for publication by the Directors of the Company on
30 March 2022.
XX. OTHER SUPPLEMENTARY INFORMATION
1. Basic earnings per share and diluted earnings per share
Amount for the current period Amount for the previous period
Earnings per share Earnings per share
Weighted Weighted
(RMB) (RMB)
Items average average
Basic Diluted Basic Diluted
return return
earnings earnings earnings earnings
on net assets on net assets
per share per share per share per share
Net profit attributable to
ordinary shareholders of 17.29% 1.41 1.40 17.68% 1.34 1.31
the Company
Net profit attributable to
ordinary shareholders of
the Company after 15.65% 1.27 1.27 12.85% 0.97 0.94
deduction of non-recurring
profit or loss
1.Details of extraordinary profit and loss for the current period
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Amounts
Profit or loss from disposal of non-current assets 95,443,538.78
Government subsidies included in current profit or loss, except for government
subsidies that are closely related to the Company's business , to be enjoyed in a 717,084,575.78
fixed amount or fixed quantity according to national unified standards
Net profit or loss of subsidiaries arising from business combinations under
common control of the current period from the beginning of the period to the -1,015,618.64
date of consolidation
Profit or loss from fair value changes of financial assets held for trading,
512,402,328.52
derivative financial assets, financial liabilities held for trading and derivative
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financial liabilities, as well as investment gains arising from disposal of
financial assets held for trading, derivative financial assets, financial liabilities
held for trading and derivative financial liabilities and other debt investments,
except the effective hedging related to the normal operations of the Company
Other non-operating income and expenses except the aforementioned items 60,282,401.05
reduction: Effect of income tax 135,105,480.15
Effect of minority equity interest (After Tax) 13,326,031.78
Total 1,235,765,713.56
Chairman: Liang Haishan
Date of approval for publication by the Board:30 March 2022
Revised information
□ Applicable √ Not Applicable
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