苏泊尔(002032)公司公告苏泊尔：2023年年度报告(英文版)新浪财经

ZhejiangSuporCo.,Ltd.2023AnnualReport

March2024

SECTIONIIMPORTANTNOTES,TABLEOFCONTENTSAND

DEFINITIONSTheBoardofDirectorsandtheBoardofSupervisorsofZhejiangSuporCo.,Ltd(hereinafterreferredtoasthe"Company")andallitsdirectors,supervisorsandseniorexecutiveswarrantthatthisannualreportistrue,accurateandcomplete,anddoesnotcontainanyfictitiousstatements,misleadinginformationorsignificantomissions;alldirectors,supervisorsandseniorexecutivesoftheCompanyundertake,separatelyandjointly,allresponsibilitiesinrelationtothetruth,accuracyandcompletenesshereof.

Mr.ThierrydeLATOURD'ARTAISE,personinchargeoftheCompany,andMr.XuBo,personinchargeofaccountingandpersoninchargeofaccountingdepartment(accountantincharge),herebyconfirmthatthefinancialstatementenclosedinthisAnnualReportistrue,accurateandcomplete.

AlldirectorshaveattendedtheBoardMeetinginperson.

Itisofgreatuncertainty,forwhetheritcanberealizedornotdependsonmultiplefactors,includingmarketchangeandeffortofmanagementteam.Pleasebecarefulofinvestmentrisks.

AsfortheriskfactorsconfrontedbytheCompany,seePart11"ProspectsforFutureDevelopment"ofSECTIONIII"DISCUSSIONANDANALYSISOFTHEMANAGEMENT"fordetails.

TheprofitdistributionplanadoptedatthisBoardMeetingspecifiesthat:

basedon796,891,157shares,theCompanydistributescashdividendofRMB

27.30per10shares(tax-inclusive)toallshareholders,andtotalamountofcashdividendsisRMB2,175,512,858.61,issues0bonusshares(tax-inclusive)andwillnotconvertcapitalreservestocapital.

TableofContents

SECTIONIIMPORTANTNOTES,TABLEOFCONTENTSANDDEFINITIONS......2

SECTIONIICOMPANYFILEANDMAJORFINANCIALINDICATORS......6

SECTIONIIIDISCUSSIONANDANALYSISOFTHEMANAGEMENT......10

SECTIONIVCORPORATIONGOVERNANCE......29

SECTIONVSOCIALANDENVIRONMENTALRESPONSIBILITIES......55

SECTIONVISIGNIFICANTEVENTS......60

SECTIONVIICHANGESINSHARECAPITALANDPARTICULARSABOUTSHAREHOLDERS......70

SECTIONVIIIINFORMATIONONPREFERREDSHARE......79

SECTIONIXBONDS......80

SECTIONXFINANCIALSTATEMENT......81

CATALOGOFREFERENCEDOCUMENTSI.2023AnnualReportoftheCompanyandAbstractwithsignatureoflegalrepresentative;II.Financialstatementswithsignatureoflegalrepresentative,personinchargeofaccountingandpersoninchargeofaccountingdepartmentandsealoftheCompany;III.Originalofauditreportwithsealofaccountingfirmandsignatureofcertifiedpublicaccountants(CPA);IV.OriginalofalldocumentsandannouncementspublishedinnewspapersdesignatedbyCSRCduringthereportingperiod.ReferencedocumentsabovearchivedattheSecuritiesDepartmentoftheCompany.

Definitions

SECTIONIICOMPANYFILEANDMAJORFINANCIAL

INDICATORS

I.CompanyInformation

II.ContactPersonandContactInformation

III.PlaceforInformationDisclosureandArchiving

IV.ChangesofRegistration

V.OtherRelevantInformation

CertifiedPublicAccountantsengagedbytheCompany

SponsorinstitutionengagedbytheCompanyforperformingcontinuoussupervisiondutiesduringthereportingperiod

□ApplicableNotapplicable

FinancialconsultantengagedbytheCompanyforperformingcontinuoussupervisiondutiesduringthereportingperiod

VI.MajorAccountingDataandFinancialIndicators

Doesthecompanyneedtoretroactivelyadjustorrestatepreviousyear'saccountingdata

□YesNo

TheCompany'snetprofitbeforeorafternon-recurringprofitandlossaredeductedforthelastthreefiscalyears,whicheverislower,isnegative,andtheauditreportforthelatestyearindicatesuncertaintyaboutitscontinuingoperationability

Netprofitbeforeorafternon-recurringprofitandlossarededucted,whicheverislower,isnegative

VII.FinancialDataDifferenceonPrincipleofDomesticandOverseaAccounting

1.NetprofitandnetassetsdiscrepanciesinfinancialstatementsdisclosedseparatelyunderInternationalAccountingStandardsandChineseAccountingStandards

NonetprofitandnetassetsdiscrepanciesinfinancialstatementsdisclosedseparatelyunderInternationalAccountingStandardsandChineseAccountingStandardsexistedduringthereportingperiod.

(2)NetprofitandnetassetsdiscrepanciesinfinancialstatementsdisclosedseparatelyunderOverseasAccountingStandardsandChineseAccountingStandards

NonetprofitandnetassetsdiscrepanciesinfinancialstatementsdisclosedseparatelyunderOverseasAccountingStandardsandChineseAccountingStandardsexistedduringthereportingperiod.VIII.Quarter-basedMajorFinancialIndicators

Unit:RMB

Anydifferencebetweenfinancialindicatorsorthetotalandrelevantfinancialindicatorsdisclosedinquarter-basedreportorsemiannualreport

IX.Non-recurringProfitorLossItemsandAmount

Applicable□Notapplicable

Otherspecificcircumstancesofotheritemsofprofitsandlossescomplyingwiththedefinitionofnon-recurringprofitsorlosses:

TheCompanydoesnothaveotherspecificcircumstancesofotheritemsofprofitsandlossescomplyingwiththedefinitionofnon-recurringprofitsorlosses.Descriptionofdefiningnon-recurringprofitsorlossesitemslistedintheExplanatoryAnnouncementNo.1onDisclosureoftheInformationofCompaniesOfferingTheirSecuritiestothePublic--Non-recurringProfitorLossasrecurringprofitsandlosses

TheCompanydoesnothavethedescriptionofdefiningnon-recurringprofitsorlossesitemslistedintheExplanatoryAnnouncementNo.1onDisclosureoftheInformationofCompaniesOfferingTheirSecuritiestothePublic--Non-recurringProfitorLossasrecurringprofitsandlosses.

SECTIONIIIDISCUSSIONANDANALYSISOFTHE

MANAGEMENTI.IndustrialSituationoftheCompanyintheReportingPeriod

Since2023,industriessuchastransportation,tourism,andcateringservicesarethefirsttopickupquickrecovery.However,consumerdemandsinotherindustries,includingcookwareandsmalldomesticappliances,arerelativelyweaker.Thankstoexcellentchanneloperationandmanagementcapabilitiesandstrongproductcompetitiveness,theCompanyhasachievedmoresatisfactoryperformancethantheindustryaverageunderthebackgroundofthecurrentstressontheconsumermarketasawhole.

Inthefieldofopenfirecookwarein2023,thegrowthrateofonlineretailsloweddown,andtheconventionale-commercewasstressful,withinterest-basede-commerceandlivestreaminge-commercebringingnewvitalitytotheindustry,whichfurtherdivertedthepurchasingchannelsofconsumers.Suporactivelyrespondstothevariedneedsofonlineandofflineconsumers,adoptsdigitalizationasananchoringpoint,constantlyexploresnewmodelstomatchconsumerdemand,andcontinuouslybuildscompetitiveadvantages.AccordingtomonitoringdataofAVC,theonlinecookwaremarketshareofSuporincreasedby24%year-onyearin2023,leadingthesecond-rankedbrandbymorethanfourtimes.Thetotalshareintheofflinemarkethasreachedapproximately50%intotal,firmlyoccupyingthetoppositionintheindustry.Fromtheperspectiveofproductcategoryperformance,thecategoriesrelatedtohealthconceptsareoutrunningtheothers,suchaspressurecookers,casseroles,steamers.Fromtheperspectiveofproductmaterials,cookwaremadeofhealthymaterialssuchasstainlesssteel316Landtitaniumaremorefavoredbyconsumers.

Inthefieldofsmalldomesticappliances,customerdemandstendtobemorerationalduetomacroeconomicimpacts.Strivingforwardunderpressure,Suporhasachievedagoodresultthatthecomprehensivemarketshareoftraditionale-commerceandtheDouyinchannelranksthefirst.AccordingtotheoverallmonitoringdataofAVCin2023,thesalesperformanceofSupor'ssmalldomesticappliances(includingthefollowingcategories:coffeemachines,electricricecookers,inductionhobs,electricpressurecookers,soymilkmakers,high-speedblenders,mixers,juicers,electrickettles,electricsteamers,healthkettles,bakedmachines,smalldesktopsinglefunctionovens,andairfryers)isoutrunningtheindustryaverage,andtheirsharesintheonlineandofflinemarketshaveimproved,rankingfirstandsecondrespectivelyintheindustry.Fromtheperspectiveofcategoryperformance,therigid-demandcategoriessuchaselectricricecookershaveastablemarket,andthecategoriesrelatedtohealthconceptssuchaselectricsteamersandsoymilkmakerscontinuewiththegrowthmomentum.II.MainBusinessduringtheReportingPeriod

AsChina'sfamouscookwareandsmalldomesticapplianceR&Dandmanufacturingcompanyandleadingbrand,theCompanyisalsothefirstlistedcompanyinChina'scookwareindustry.Establishedin1994,theheadquartersoftheCompanylocatesinHangzhouandowningsixR&DandmanufacturebaseslocatedinYuhuanCity,HangzhouCity,ShaoxingCity(YuechengDistrictandKeqiaoDistrict)inZhejiangProvince,WuhanCity,HubeiProvinceandHoChiMinhCity,Vietnam.Supor'smainbusinessesincludeopenfirecookwareandkitchenutensil,smalldomesticappliances,largekitchenappliancesandH&PCappliances.

(1)Openfirecookwareandkitchenutensilsmainlyincludewok,pressurecooker,fryingpan,saucepan,steamer,ceramicslowcooker,kettle,knife,spatula,thermalpot,thermos&flask,kitchengadgets,crisper,etc.;

(2)Thesmalldomesticappliancesmainlyincludeelectricricecooker,electricpressurecooker,inductionhob,soymilkmaker,electrickettle,juicer,slowcooker,electricsteamer,electrichotpot,foodprocessor,bakedmachine,airfryer,coffeemachine,etc.;

(3)Thelargekitchenappliancesmainlyincluderangehood,gasstove,disinfectioncabinet,waterpurifier,embeddedsteamingoven,integratedstove,waterheater,etc.;

(4)TheH&PCappliancesmainlyincludeairpurifier,garmentsteamers,vacuumcleaner,floorwasherandelectriciron,electricheater,air-circulatingfans,etc..

TheCompany'scookwareandelectricalproductshavebeenexportedtomorethan50countriesandregionssuchasJapan,EuropeanandAmericancountriesmainlythroughSEBGroup.

(IV)SynergisticeffectofintegrationwithSEBSince2006,theCompanyhasstartedtoestablishstrategiccooperationrelationshipwithSEBGroupwhichownsalonghistoryofmorethan160yearswithleadingmarketsharesofcookwareandsmalldomesticappliancesworldwide.ThepowerfulcooperationbetweenSuporandSEBGrouphasbroughtstableexportorderstotheCompany,andincreaseditsoverallbusinesssizeandmanufacturingcapacity.Meanwhile,theCompanystrengthenscooperationwithSEBGroupinvariedfieldssuchasproduction,R&D,IT,andmanagement,andprovidingcomprehensivesupportfortheCompany'sdevelopmentcontinuously.(V)AdvantageofmultiplebrandsandcategoriesIntermsofthemulti-brandoperation,inadditiontoSuporbrand,theCompanyalsointroducedalotofhigh-endbrandsunderSEBGroup,suchasWMF,LAGOSTINA,KRUPS,andTEFALsoastofullycoverthehigh-endbrandsinsmalldomesticappliances

andkitchencookwarefields.Intermsofthecategoryexpansion,theCompanyactivelyexploresnewproductcategoriesforkitchenappliances,H&PCappliances,personalcareappliances,andothersonthebasisoftheexistingadvantageouscategoriessuchasopenfirecookwareandsmalldomesticappliances.Suporhasestablishedastrongcompetitiveadvantagewiththemulti-bandandmulti-categorylayoutinthedomesticmarket.IV.Mainbusinessanalysis

Duringthereportingperiod,theCompanyachievedanoperatingincomeofRMB21,303,948,642.66,ayear-on-yearincreaseof

5.62%,mainlybecausethedomesticsaleskeptpositivegrowthwithmarketsharesofcorecategoriesonbothonlineandofflinechannelsgainedduringreportingperiodcomparedwiththatlastyearamongsuchchallengingmarketenvironment.Forexportbusiness,ithasimprovedobviouslysince2023Q3andtheexportsalesachievedfastgrowthduringreportingperiodcomparedwiththatlastyear.ThenetprofitattributabletoshareholdersoflistedcompanywasRMB2,179,798,147.27,ayear-on-yearincreaseof5.42%;andtheearningspersharewereRMB2.719,ayear-on-yearincreaseof6.00%.Amongthem,therealizedrevenuefromthemainbusinessofcookwarewasRMB6,056,346,176.44,ayear-on-yeardecreaseof1.07%;therealizedrevenuefromthemainbusinessofelectricapplianceswasRMB14,963,200,632.70,ayear-on-yearincreaseof8.40%;therealizedrevenuefromthemainbusinessofdomesticsaleswasRMB14,937,286,741.50,ayear-on-yearincreaseof0.95%;andtherealizedrevenuefromthemainbusinessofexportbusinesswasRMB6,110,174,972.63,ayear-on-yearincreaseof18.63%.

1.Overview

(I)Domesticsalesduringthereportingperiod

(1)Productstrategy

(2)Channelstrategy

enterprises,furtherexpandingthesaleschannels.Meanwhile,Suporcontinuestostrengthenthecooperationwithregionalpropertydevelopersanddecorationcompanies,expandingtheengineering-basedkitchenappliancebusiness.

(3)Brandbuilding

2.Revenuesandcosts

(1)Structureofoperatingincomes

Remarks:"Others"byindustry,"Otherdomesticelectricappliances"byproduct,andregion-basedandsales-basedmodesexceptionallyincludeotherbusinessincomes,thesamebelow.

(2)Industry,product,areaorsalesmodethataccountsformorethan10%oftheCompany'soperatingincomeoroperatingprofitApplicable□Notapplicable

IfthestatisticalcaliberoftheCompany'soperationbusinessdataisadjustedduringthereportingperiod,themainbusinessdataforthelatestyearafterthestatisticalcaliberisadjusted.

(3)Practicalsalesrevenuegreaterthanlaborincome

Yes□No

Descriptionsofcausewithabove30%changeofrelevantdataonaYoYbasis

(4)Performanceofimportantsalescontractsandpurchasecontractssignedtillthisreportingperiod

(5)Structureofoperatingcosts

Categoryofindustryandproduct

(6)Changeofmergerscopeduringthereportingperiod

(7)ImportantchangeoradjustmentfortheCompany'sbusinesses,productsorservicesduringthereportingperiod

(8)Mainsalescustomersandsuppliers

Mainsalescustomers

InformationontheCompany'stop5majorcustomers

Instructionformaincustomers'othercases

TheCompany'smainsupplier

InformationontheCompany'stop5suppliers

Instructionformainsuppliers'othercases

3.Costs

4.R&Dinput

Orientedbyconsumers'demand,theCompanyengagesinR&Dofthedifferentialproductsthatmeetkitchendemandandlocaleatingandlifehabits.TheCompanylaysemphasisonR&Dinvestment,booststechnicalinnovationactively,furtherexploresproductcategoryandaddsproductadditionalvalue;respectscustomer'sexperienceandfocusesonalldetailsofconsumeruseinordertorealizesafe,environmentallyfriendly,convenientandfashionableproducts.R&Dexpenditureinthisyearaccountsfor6.80%and2.02%ofnetassetsandoperatingincomeauditedintherecentperiod.R&DpersonneloftheCompany

R&DinvestmentoftheCompany

CauseandinfluenceofmajorchangesoftheCompany'sR&Dpersonnelcomposition

ReasonforlargechangeforproportionoftotalR&Dinputinoperatingincomecomparedwiththatoflastyear

ReasonandrationalintroductionforlargecapitalizationchangeofR&Dinput

5.Cashflow

InstructionformaininfluencefactorsofrelevantdatawithYoY(%)changedseriouslyApplicable□Notapplicable

1.Thenetcashflowsfromoperatingactivitiesdecreasedby35.60year-on-year,mainlyduetothecashinflowdecreaseforgoodssoldandrenderingofservicesduringthereportingperiod.

2.Thenetcashflowsfrominvestingactivitiesincreasedby48.22%year-on-year,mainlyduetothecashoutflowdecreaseininvestingactivitiesduringthereportingperiodintermdepositsandfinancialproductsforaperiodofmorethan3months.

3.Thenetincreaseincashandcashequivalentsdecreasedby1,971.55%year-on-year,mainlyduetothecashinflowdecreaseinoperatingactivitiesduringthereportingperiod.Reasonforgreatchangebetweennetcashflowcausedbyoperatingactivitiesandannualnetprofitsduringthereportingperiod

V.AnalysisonNon-mainBusiness

VI.AnalysisonAssetsandLiabilities

1.Significantchangesinassets

Highproportionofoverseasassets

2.Assetsandliabilitiesmeasuredatthefairvalue

ContentofotherchangesReceivablesfinancing:Asthedemandofdailyfundmanagement,theCompanywilldiscountortransferanendorsedbill,thebusinessmodeofrelatedbankacceptancebillincludingnotonlycollectcontractualcashflowbutsalesasthetarget,soreclassthebankacceptancebillasfinancialassetsatfairvaluethroughothercomprehensiveincomes.Otherdebtinvestment:Supor'sbusinessmodelofmanagingnegotiablelargedepositcertificatesisbothtocollectthecontractualcashflowandtosellthenegotiablecertificatesofdeposit,whichareclassifiedasfinancialassetsatfairvaluethroughothercomprehensiveincomes.Interestrevenueisaccruedaccordingtotheeffectiveinterestratemethodduringtheexpectedduration.ArethereanymajorchangesaboutthevaluationattributeofCompany'smainassetsduringthereportingperiod

3.Restrictionsofassetsandrightsbytheendofreportingperiod

See18."Assetswithtitleoruserightrestrictions",VII"Notestoitemsofconsolidatedfinancialstatements",SECTIONX"FINANCIALREPORT"fordetails.VII.InvestmentSituationAnalysis

1.Generalcondition

2.Significantequityinvestmenttobeacquiredduringthereportingperiod

3.Significantnon-equityinvestmenttobehandledduringthereportingperiod

4.Investmentsinfinancialassets

(1)Conditionsofthesecuritiesinvestment

TheCompanyinvolvesnosecuritiesinvestmentduringthereportingperiod.

(2)Derivativeinvestment

1)Hedgingderivativeinvestmentduringthereportingperiod

Unit:RMB10,000

2)Speculationderivativeinvestmentduringthereportingperiod

Duringthereportingperiod,therewasnospeculativeinvestmentonderivatives.

5.Applicationofcapitalraised

NocapitalraisedwasusedinreportingperiodVIII.Salesformajorassetsandequity

1.Salesformajorassets

TheCompanydidnotsellmajorassetstilltheendofthereportingperiod.

2.Salesformajorequities

IX.AnalysisforMainHoldingCompaniesandJointStockCompaniesApplicable□NotapplicableStatusofmainsubsidiariesandjointstockcompanieswithinfluenceontheCompany'snetprofitexceeding10%

Subsidiaryobtaininganddisposaldetailsduringthereportingperiod

X.StructuralSubjectundertheCompany'sControl

XI.ProspectsforFutureDevelopment

1.FuturedevelopmentstrategyandoperationplanoftheCompany

thanniversaryoftheCompany'sestablishmentasatippingpoint,togivebacktobrandfansandenhanceuserloyalty.

Withrespecttoexportbusiness,theCompany,regardlessofuncertaininternationalsituation,theCompanykeepsadvancingthecooperationwithSEBGroupinlinkssuchasR&D,designandmanufacturing,enlargeproductionscale,acquirescalecost-basedcompetitiveadvantageandimprovecorecompetenceofforeigntradeinvirtueofordertransferadvantageofSEB.

Withrespecttotalenttraining,theCompanywillstrengthentalentechelonconstructionandimprovelong-termincentivemechanismcontinuously;improvemanagementlevelofbasicandmediummanagementpersonnel,enhancesubjectiveinitiativeofemployeesandbuildanactiveandefficientworkingatmosphereforemployees.

2.Possiblerisksandcountermeasures

(1)Riskfrommacroeconomicfluctuation

In2023,thedomesticservice-orientedconsumerindustryisexperiencinggrowthforrecovery,whilethedemandforcookwareanddomesticappliancesattheretailendremainssluggish.ThehomeappliancemarketinChinahasdevelopedfromasimpleincrementalmarkettoanincrementalandinventorymarket,whereanewconsumptionformatisformedwiththeprevailingconsumptionrationalityandthecoexistenceofconsumptiondegradationandconsumptionupgrade.In2024,Suporwillcontinuetoinsistonitsestablishedstrategytoupgradetheproductstructuretostimulatethedemandforconventionalproductreplacementontheonehand;andtolookfornewgrowthpointthroughexplorationofnewcategoriesandnewscenesontheotherhand.

Intermsofexports,withtherecoveryofthedemandintheEuropeanandAmericanmarketsafterdestocking,itisexpectedthattheexportbusinesswillcontinuetoimprovein2024,andtheCompanywillworkwithforeigntradecustomerstopromotenewproductR&D,improveefficiency,reducecosts,andenhancethecompetitivenessoftheCompany'sforeigntradebusinesstogether.

(2)Riskfromproductionelementpricechange

In2023,thepricesofmainbulkrawmaterialssuchasaluminum,copper,stainlesssteel,andplasticforcookwareandsmalldomesticapplianceshavedeclinedtoastabilizedstate,whichhasplayedapositiveroleinreducingproductioncostsforindustryenterprises.Suporwillcontinuetoimplementcost-reductionleanprojectstoimprovetheinternallaborproductivity,sothatthecostcompetitivenessoftheCompany'sinternalandexternalsalesbusinesscanbeenhanced.BesidestheCompanyisactivelyboostingtheautomationofproductionline,improvingthepercapitalaboroutput,andreducetheimpactcausedbyriseinlaborcost.

(3)Riskofintensifyingmarketcompetitiveness

Withthegradingofconsumptioninthecookwareandhomeappliancemarket,ontheonehand,high-endbrandscontinuetosinktheirchannelsandadjusttheirproductandpricestrategiesinordertotakeupmoremarketshare,andontheotherhand,thesalesimpactbroughtbycompetitionsbetweenplatformsandisexpectedtointensifythecostperformancebattleinthecomingyear.

TheCompanywillcontinuetoadheretothestrategyofproductinnovationasitscore,andlaunchmorehighvalue-addedandhighmarginproductsthroughcontinuousimprovementofinnovationcapacity,inordertogainaleadingsalespositionandaleadingmarketshareinthemidtohighpricerange.Meanwhile,theCompanywillalsoincreasetheproductmarketingthroughonlineterminaltrafficappropriately,takeadvantageofitscomprehensivecompetitiveadvantageintermsofmultiplebrandsandcategories,andcontinuouslyinputmarketingresourcestoimprovemarketshares.Inaddition,theCompanywillactivelyinvestinthemarketsinlower-tiercitiesinordertoreachmoreconsumergroups.TheCompanywillcontinuetostrengthenandexpanditscorecategories,expeditetheproductlayoutinemergingcategoriesandsegmentmarkets,andtomaintainasteadyandsustainablegrowthfortheCompanyinthefuture.

(4)Productexportandexchangelosscausedbyexchangeratefluctuation

TheCompanyhasadoptedRMBsettlementformainexportcustomerSEBGroupwithlowexchangeraterisk.XII.Investigation&Research,CommunicationandInterviewActivitiesDuringtheReportingPeriod

XIII、ImplementationoftheActionPlanfor"DualImprovementofQualityandReturn"Hasthecompanydisclosedanactionplanfor"dualimprovementofqualityandreturn"。

SECTIONIVCORPORATIONGOVERNANCEI.BasicSituationDuringthereportingperiod,theCompanyfurtherstandardizedtheoperationoftheCompanyandimprovedthegovernancebycontinuouslybuildingupandstrengtheningthecorporategovernancesystem,improvingtheinternalcontrolandmanagementsystem,anddeepeningthegoverningprocessstrictlyinaccordancewiththeCompanyLaw,theSecuritiesLawandtheRulesontheCorporateGovernanceofListedCompanies,RulesGoverningtheListingofStocksonShenzhenStockExchangeandtheShenzhenStockExchangeRegulatoryGuidelinesforListedCompaniesNo.1-StandardizedOperationofListedCompaniesaswellasotherregulationsofCSRC.Bytheendofthereportingperiod,theactualgovernanceoftheCompanywasbasicallyincompliancewiththerelevantregulationsofcorporategovernanceoflistedcompaniesissuedbytheCSRCandShenzhenStockExchange,andwiththerulesofestablishedsystemsoftheCompany.NoadministrativeregulationmeasuresweretakenbyregulatorydepartmentupontheCompany.

Association.Inaddition,theCompanyheldanelectionofnewBoardofDirectorsandelectedthemembersoftheEighthBoardofDirectorsattheAnnualGeneralMeetingofShareholdersfor2022FiscalYear.(IV)RelatingtoSupervisorsandtheBoardofSupervisorsTheCompanyelectedsupervisorsstrictlyaccordingtotheprovisionsundertheCompanyLawandtheArticlesofAssociation.ThenumberofsupervisorsandcompositionoftheBoardofSupervisorsmettherequirementofrelevantlawsandregulations.AllsupervisorshaveperformedtheirdutiesasrequiredbytheRegulationsofProcedureoftheBoardofSupervisors,effectivelysupervisedthelegalityandregulatorycomplianceofimportantmatters,relatedtransactions,financialconditions,anddutyfulfillmentofdirectorsandseniorexecutivesoftheCompany,andmaintainedthelegitimaterightsandinterestsoftheCompanyanditsshareholders.

Duringthereportingperiod,eightmeetingsofBoardofSupervisorswereheld.Theconveningandholdingprocedures,qualificationsofattendedpersons,votingprocedures,votingresultsandresolutioncontentsofthemeetingconformedtolawsandregulationsandArticlesofAssociation.Inaddition,theCompanyheldanelectionofnewBoardofSupervisorsandelectedthemembersoftheEighthBoardofSupervisorsattheAnnualGeneralMeetingofShareholdersfor2022FiscalYear.

(V)RelatingtoPerformanceAppraisalandtheIncentiveandRestrainingMechanism

TheCompanyestablishedandconstantlyimprovedtheperformanceappraisalsystemandtheincentiverestrainingmechanismforsupervisors,directorsandseniorexecutiveswhoareemployedandpaidbythelistedcompany.Theappointmentandremunerationfordirectors,supervisorsandseniorexecutivesoftheCompanyareopen,clearandinlinewithrelevantlawsandregulations.Duringthereportingperiod,theCompanycompletedtheregistrationofrestrictedstockgrantsrelatedtothedeferredgrantpartunderthe2022RestrictedStockIncentivePlan(Draft)andtheregistrationofstockoptiongrantsrelatedtothe2023StockOptionIncentivePlan(Draft),anddeliberatedandapprovedtheCompany'sAdministrationMeasuresforthePerformanceIncentiveFundwithaviewtoprovidingeffectiveincentivestoseniorexecutives.

(VI)RelatingtoInformationDisclosureandTransparency

TheSecuritiesDepartmentoftheCompanyisresponsibleforinformationdisclosureandinvestor'srelationshipmanagement.AbidingbyrequirementsoftheCSRCandShenzhenStockExchangeandprovisionsoncompilationofperiodicreportsingoodfaith,thedepartment,inassociationwiththeFinancialDepartmentoftheCompany,hastimelyandaccuratelycompiledandsubmittedthe2022AnnualReport,2023FirstQuarterlyReport,2023SemiannualReportand2023ThirdQuarterlyReport,basedonthestrictcompliancewiththenon-disclosurerulesbeforethedisclosureofthereports.

Duringthereportingperiod,theCompanyissuedtheInternalControlSystemonEntrustedFinancialManagementofZhejiangSuporCo.,Ltd.TheCompanywillcontinuetosortoutandupdatetheinternalcontrolsystemsissuedbytheCompanyinatimely

mannerinaccordancewiththecurrentlawsandregulations,andwillcontinuouslyestablishandimprovetheinternalcontrolsystems,tomakethemworkmoreefficiently.IsthereanymajorvariationbetweentheactualsituationoftheCompany'scorporategovernance,andlaws,administrativeregulations,andstipulationsissuedbytheCSRCconcerningthegovernanceoflistedcompanies

ThereisnomajorvariationbetweentheactualsituationoftheCompany'scorporategovernance,andlaws,administrativeregulations,andstipulationsissuedbytheCSRCconcerningthegovernanceoflistedcompanies.

IV.GeneralMeetingsofShareholdersandInterimGeneralMeetingofShareholdersHeldduringtheReportingPeriod

1.Generalmeetingsofshareholdersduringthereportingperiod

2.InterimGeneralMeetingofShareholdersheldattherequestofpreferredshareholderswithrestoredvotingright

V.Directors,supervisorsandseniorexecutives

1.Basicinformation

IfthereisanyseparationofdirectorsandsupervisorsanddismissalofseniorexecutivesduringthereportingperiodYes□NoDuringthereportingperiod,Ms.NathalieLOMON,aformerdirectoroftheCompany,appliedforresigningfromherpositionasadirectoroftheEighthBoardofDirectorsandamemberoftheAuditCommitteeduetopersonalreasons,whowillnolongerholdanypositionintheCompanyfollowingtheresignation.ChangeofDirectors,SupervisorsandSeniorExecutivesApplicable□Notapplicable

2.Positioninformation

Professionalbackgrounds,mainworkingexperiences,andmainresponsibilitiesintheCompanyofpresentdirectors,supervisorsandseniorexecutives

1.Directors

Mr.SuXianze:Director,CEIBSEMBA,SeniorEconomist;ChairmanandGeneralManagerofSuporGroupCo.,Ltd.,ChairmanofTaizhouSuporRealEstateDevelopmentCo.,Ltd.andChairmanofZhejiangSuporWaterHeaterCo.,Ltd..HehasseveredasChairmanoftheCompanyfrom2001toApril2014,andGeneralManagerfrom2001toMarch2010.

Mr.TaiWaiChung:Director:graduatedfromtheIndustrialEngineeringMajorofUniversityofHongKong;ExecutiveVice-PresidentofAsianDivisionofSEBS.A.,hadservedasthedirectorandgeneralmanagerofApple(GreatChina)Company,marketingdirectorofElectroluxAppliancesCompany,directorandgeneralmanagerofShanghaiSEBElectricAppliancesCo.,LtdandgeneralmanageroftheCompanybefore.

Mr.HervéMACHENAUD:independentdirector,graduatedfromSciencesPo;PresidentofHongMaConsultingServices(Beijing)Co.,Ltd..HeformerlyservedasLeaderofEDFGroupDelegationtoChina,SeniorExecutiveVicePresidentofEDFGroup,DirectorinchargeofEDFGenerationandEngineering(DPI)andAsia-PacificDirector.

Mr.Jean-MichelPIVETEAU:independentdirector,doctorofbusinessadministrationandmasterofpoliticalscience.HeisSeniorConsultantofCFIFinancialConsultant,ChairmanoftheBoardofSupervisorsofMicroCredChina,Vice-ChairmanoftheBoardof

SupervisorsofBAOBAB,andmemberoftheBoardofDirectorsofFrenchForeignTradeAdvisors.HeformerlyservedasAdviserforChinatoBNPParibasChairman,SeniorAdvisertoBNPParibasforChina,CountryHeadofParibasBankinnumerousAsiancountriesandMiddleEastcountries.

Mr.ChenJun:independentdirector,doctorofaccountingofXiamenUniversity,post-doctorofbusinessadministration(accounting)ofZhejiangUniversity.HeisnowtheChairman,Professor,DoctoralTutoroftheDepartmentofFinanceandAccountingofZhejiangUniversity.HeistheDirectoroftheInstituteofFinanceandAccountingofZhejiangUniversity,DeputyDirectoroftheGlobalEntrepreneurshipResearchCenterofZhejiangUniversity,DirectoroftheResearchCenterofListedCompaniesofZhejiangBusinessResearchInstituteofZhejiangUniversity.HealsoservesasVicePresidentofZhejiangAssociationofChiefAccountantsandindependentdirectorofthelistingcompany.

2.Supervisors

Mr.PhilippeSUMEIRE:Supervisor,graduatedfromAix-en-ProvenceLawSchoolwithPHD'sdegreeofPrivateLawandComparativeLaw;VicePresidentLegalAffairsofGroupeSEBandBoardSecretary.HehasworkedfirstforPEUGEOTS.AandATOCHEM(chemicalindustry)andthenheldthepositionofGeneralCounselandCompanySecretaryforCLUBMED,GIATINDUSTRIESandMOULINEXS.A.

Mr.ZhangJunfa:Supervisor,graduatedfromNorthwesternPolytechnicalUniversity;ChairmanoftheTradeUnionoftheCompanyandseniormanagerofAdministrationDepartmentofYuhuanSite,hewasworkingforSecurityDepartmentandthenworkedinLegalAffairsDepartmentandoffice.

Ms.LuLanhua:Supervisor,graduatedfromShanghaiUniversityofFinanceandEconomicsandMBAofUniversityofManchester,memberofACCA.CurrentlythefinancialdirectorofCookwareBusinessUnitoftheCompany;shepreviouslyworkedastheCompany’sFinancialplanning&analysismanager,workedforGreifFlexibleProducts&Service(China)asaccountingmanager,UNSA(Hangzhou)PackagingManufacturingLtd.asfinancialmanager.

3.Seniorexecutives

Mr.CheungKwokWah:GeneralManageroftheCompany,BachelorofEconomics,ChineseUniversityofHongKong,MBAofKellySchoolofBusiness,IndianaUniversity,formerChairmanandPresidentoftheInternationalBusinessDepartmentofChinaFeiheCo.,Ltd.,andformerChairmanandCEOofNestléGreaterChina.Mr.XuBo:ChiefFinancialOfficer,graduatedfromCentralUniversityofFinanceandEconomics;memberofCICPAandACCA;formerSeniorAuditingManagerofShenzhenZhonghuaCertifiedPublicAccountants,ChiefFinancialOfficerofYueSaiKanCosmeticsLimited,ChiefFinancialOfficerofMolexInterconnect(Shanghai)Co.,Ltd.,ChiefFinancialOfficerofMicrosoftChina.

Mr.YeJide:BoardSecretary,ViceGeneralManager,andDirectorofSecuritiesDepartment,CEIBSEMBA.HeisIndependentDirectorofBeijingDeepZeroIntelligentTechnologyCo.,Ltd.,hasworkedsuccessivelyasthechiefofequipmentsector,officeheadandassistanttothegeneralmanageroftheCompany.Positioninformationinshareholders'companiesApplicable□Notapplicable

PositioninformationinothercompaniesApplicable□Notapplicable

Punishmentofsecuritiesregulatorycommissionondirectors,supervisorsandseniorexecutivesoftheCompanyatpresentorleavingduringthereportingperiod

3.RemunerationofDirectors,SupervisorsandSeniorExecutives

Decision-makingprocedures,determinationbasisofremunerationandactualpaymentfordirectors,supervisorsandseniorexecutives

RemunerationforDirectors,SupervisorsandSeniorExecutivesduringthereportingperiod

Descriptionofothersituations

VI.DutyPerformanceofDirectorsduringtheReportingPeriod

1.BoardofDirectorsduringthereportingperiod

2.Attendanceofboardmeetingandgeneralmeetingofshareholdersbydirectors

ExplanationonabsencefortwicecontinuouslyNone

3.Objectionsbydirectorstocompanyissue

Werethereanyobjectionsraisedbydirectorstocompanyissues

Therewasnoobjectionraisedbyanydirectortocompanyissuesduringthereportingperiod.

4.Otherexplanationsofdutyperformanceofdirectors

WasthereanyadviceraisedbydirectorstocompanyissuesadoptedbytheCompanyYes□NoExplanationonadoptionornon-adoptionoftheadvicefromdirectorsDuringthereportingperiod,alldirectorsoftheCompanywereresponsibleanddiligent.TheypaidcloseattentiontothereportsaboutCompanynewsbypressandontheInternetandunderstoodprogressoftheCompany'simportantmatterstimely.TheyreviewedtheinformationreportsprovidedbytheCompanyperiodically,andgaverelevantcommentsandadvices.Theyexertedtheirspecialtiesfully,performedthedutiesasdirectorsactivelyandmaintainedthelegitimaterightsandinterestsoftheCompanyandminorityshareholders.VII.SituationofSpecialCommitteesundertheBoardofDirectorsduringtheReportingPeriod

VIII.WorkoftheBoardofSupervisors

Duringthereportingperiod,didtheBoardofSupervisorsfindanyriskabouttheCompany

TheBoardofSupervisorsheldnoobjectiontotheissuessupervisedduringthereportingperiod.

IX.EmployeesoftheCompany

1.NumberofEmployees,professionalandeducationconditions

2.Remunerationpolicy

TheCompanyadoptsfloatingsalarysystemforallemployees.Salarythatweprovidetoemployeesincludespre-taxbasicsalary,performancesalaryandvariousincentivebonusesintheformofcurrency;wealsooffervariousnon-monetarywelfaressuchascommercialinsurance,internalandexternaltraining,internaldevelopmentandcomfortableworkingenvironment.Weprovideemployeeswithcompetitivesalaryandwelfaretokeepacertaindegreeofcompetitivenessandabsorbtalents;whileintheCompany,tostabilizethosekeyemployees,embodytheCompany'svalueorientation,motivateself-improvementofemployeeandcreatehighperformance.

3.Trainingplan

1)Trainingsystem:

Guidedbystrategicplanningandbusinessdevelopmentneeds,Suporreliesonemployees'careerdevelopmentandprofessionalabilityimprovementtocarryouttrainingonprofessionalandtechnicalsequencesandmanagementsequences.Accordingtotheplanningoftalentdevelopmentstrategyandcoordinatingwithtalentechelonconstruction,theCompanydesignslearningprojectssystematicallyandatdifferentlevels.

Thedetailedofflinetrainingdatain2023areasfollows:

2)Variousforms

Suporlaysemphasisontheinnovationofemployeetraining.Inordertopromotethetrainingexperienceandleaningconversionrate,theCompanyfacilitateslearninginmultipleperspectivesthroughdiverseformsinvolvedonlinelearning,livestreaming,offlinelearning,projectworkshops,internalandexternalthematicexchangesessions,andcross-fieldsvisits.

3)Internalinheritance

Accordingtotheplanningoftalentdevelopmentstrategyandcoordinatingwithtalentechelonconstruction,theCompanyirregularlyorganizesprofessionalpersonnelinrelevantfieldstoextractknowledge,developcoursesandimparttheirorganizationalandpersonalexperience.Wealsoprovideinstructorandtutorresourceswhicharemainlyfrominternalmanagerstoemployeestoimprovethecompetenceandspeedupthegrowthofemployeesandpracticeourtalentbuildinganddevelopmentpolicies.

4.Laboroutsourcing

X.ProfitdistributionandconversionfromcapitalreservestosharecapitalFormulation,implementationoradjustmentofprofitdistributionpolicies,especiallycashdividendpoliciesduringthereportingperiodApplicable□Notapplicable

Duringthereportingperiod,theCompanyimplementedtheprofitdistributionplaninstrictaccordancewiththeArticlesofAssociationandotherrelevantprovisions,wherethedividenddistributionstandardandproportionwereclearanddefiniteandtherelevantdecision-makingproceduresandmechanismswerecomplete.TheCompanyheldthe19

thSessionoftheSeventhBoardofDirectorsandthe18

thSessionoftheSeventhBoardofSupervisorsonMarch29,2023,andheldtheAnnualGeneralMeetingofShareholdersfor2022FiscalYearonApril25,2023,whichdeliberatedandapprovedtheProposalonProfitDistributionPlan2022.TheCompany'sProfitDistributionPlan2022is:basedonthe805,116,907shares(totalcapitalstockof808,654,476sharesattheendof2022deductedby3,537,569sharesofrepurchasedsharesintheCompany’sspecialstockrepurchaseaccount,theCompanyhavecanceled1,870,069sharesinthespecialstockrepurchaseaccountonApril10,2023,thelatesttotalcapitalstockoftheCompanyis806,784,407sharesandthelatestnumberofsharesinthespecialstockrepurchaseaccountis1,667,500shares),theCompanywilldistributeallshareholderscashdividendsofRMB30.30per10shares(taxincluded),andtotalamountofcashdividendsisRMB2,439,504,228.21.TheCompanywillissue0bonusshares(taxincluded)andnotconvertcapitalreservestocapital.OnMay26,2023,theprofitdistributionplanoftheCompanyfor2022FiscalYearwascompleted.

Informationonprofit-makingduringthereportingperiodandpositiveundistributedprofitofparentcompanyforshareholdersbutwithoutcashdividenddistributionplan

ProfitdistributionandconversionfromcapitalreservestosharecapitalduringthereportingperiodApplicable□Notapplicable

XI.ImplementationofCompany'sEquityIncentivePlan,EmployeeEquityHoldingPlanorOtherEmployeeIncentiveMeasures

1.Equityincentive

(I)2021EquityIncentivePlan

1.The14

thSessionoftheSeventhBoardofDirectorsandthe13

th

SessionoftheSeventhBoardofSupervisorsoftheCompanyheldonAugust30,2022deliberatedandapprovedtheProposalonRepurchasingandCancelingaPartofRestrictedStock.Fordisqualificationof13incentiveobjectsduetotheirresignation,theCompanydecidedtorepurchaseandcancel53,000sharesofrestrictedstock.Inaddition,the19

2.The2

ndSessionoftheEighthBoardofDirectorsandthe2

nd

3.The6

SessionoftheEighthBoardofDirectorsandthe6

SessionoftheEighthBoardofSupervisorsoftheCompanyheldonJanuary26,2024deliberatedandapprovedtheProposalonUnlockingofRestrictedStockwithintheFirstUnlockPeriodof2021RestrictedStockIncentivePlan,agreeingtounlocktheRestrictedStockfor270qualifiedIncentiveObjectsinthefirstunlockperiod.ThenumberofRestrictedStockunlockedis555,750shares,andtherestrictedstocksinthefirstunlockperiodhadbeenlistedandcirculatedonFebruary2,2024.

1.The18

thSessionoftheSeventhBoardofDirectorsandthe17

SessionoftheSeventhBoardofSupervisorsheldonJanuary31,2023deliberatedandapprovedtheProposalonGrantofPostponedPortionofRestrictedStocktoIncentiveObjects.TheCompanyplanstogrant79,000sharesofpostponedportionofrestrictedstocksto2incentiveobjects.TheCompanycompletedtheregistrationofrestrictedstockgrantsonFebruary24,2023.

2.The19

SessionoftheSeventhBoardofDirectorsandthe18

3.The2

SessionoftheEighthBoardofDirectorsandthe2

SessionoftheEighthBoardofSupervisorsoftheCompanyheldonAugust30,2023deliberatedandapprovedtheProposalonRepurchasingandCancelingaPartofRestrictedStock.Forthedisqualificationof3incentiveobjectsduetotheirresignation,theCompanydecidedtorepurchaseandcancel3,250sharesofrestrictedstock.AboverepurchaseandcancelationofRestrictedStocksshallbesubmittedtotheGeneralMeetingofShareholdersforapproval.

1.The3

rd

SessionoftheEighthBoardofDirectorsandthe3

SessionoftheEighthBoardofSupervisorsoftheCompanyheldonSeptember27,2023reviewedandadoptedtheProposalon2023StockOptionIncentivePlan(Draft)anditsAbstract.TheBoardofSupervisorsoftheCompanyconductedpreliminaryverificationonthelistofincentiveobjects.

2.OnOctober14,2023,theCompanydisclosedtheVerificationOpinionsonListofIncentiveObjectsfor2023StockOptionIncentivePlan.TheBoardofSupervisorshasverifiedtheIncentiveObjectsof2023StockOptionIncentivePlanandconcludedthatthesubjectivequalificationsoftheIncentiveObjectsinvolvedinthisplanarelegalandvalid.

3.TheSecondInterimGeneralMeetingofShareholders2023convenedbytheCompanyonOctober19,2023deliberatedandapprovedtheProposalon2023StockOptionIncentivePlan(Draft)anditsAbstracts,theProposalonAssessmentMeasuresfortheImplementationofthe2023StockOptionIncentivePlan,andtheProposalonRequestingtheGeneralMeetingofShareholderstoAuthorizetheBoardofDirectorstoDealwithIssuesRelatedtotheCompany's2023StockOptionIncentivePlan.

4.OnOctober20,2023,theCompanydisclosedtheSelf-verificationonBuyingorSellingtheCompany'sSharesbyInsidersandIncentiveObjectsof2023StockOptionIncentivePlan.TheCompany’sinsidersdidnottradetheCompany’ssharesorinvolvedininsidertradingduringtheprocessofplanning.Inaddition,theCompany’sinsidersandIncentiveObjectsdidnottradetheCompany’ssharesorinvolvedininsidertradingwithinsixmonthsbeforethepublicationoftheIncentivePlan..

5.OnOctober26,2023,the4

thSessionoftheEighthBoardofDirectorsandthe4

SessionoftheEighthBoardofSupervisorsoftheCompanydeliberatedandapprovedtheProposalonGrantofStockOptiontoIncentiveObjects.TheCompanyplannedtogrant1,075,000StockOptionstototally53IncentiveObjects.TheCompanycompletedtheregistrationofstockoptiononNovember7,2023.

Unit:share

Evaluationmechanismandincentiveofseniorexecutives

TheCompanyhasestablishedaperfectperformanceappraisalsystemandsalarysystemforseniorexecutives,whichdirectlyconnectstheworkperformanceofseniorexecutiveswiththeirsalary.BasedontheindicatorsoftheKPIsystemestablishedatthebeginningof2023,theCompanyhasconductedtheyear-endappraisalinJanuary2024ofseniorexecutivesoftheirworkingabilities,dutyperformanceandtargetfulfillment,meanwhile,distributedannualperformancesalary.Duringthereportingperiod,theCompanyimplementedthe2023StockOptionIncentivePlan(Draft),anddeliberatedandapprovedtheAdministratiomMeasuresforthePerformanceIncentiveFund,withaviewtoachievingeffectivemotivationoftheseniorexecutives.Besides,theCompanyheldthe

thSessionoftheEighthBoardofDirectorsonJanuary26,2024,andagreedtounlockrestrictedstocksgrantedtotheseniorexecutivesthatareunlockableinthefirstunlockperiodinaccordancewiththe2021RestrictedStockIncentivePlan(Draft).TheCompensationandAppraisalCommitteeoftheBoardofDirectors,asthespecialcommitteeundertheBoardofDirectors,reviewedtheappraisalresult.

2.Implementationoftheemployeestockownershipplan

3.Otheremployeeincentivemeasures

XII.DevelopmentandImplementationofInternalControlSystemsduringtheReportingPeriod

1.Developmentandimplementationofinternalcontrols

InaccordancewiththerequirementsoftheBasicStandardsforInternalControlofEnterprises,itssupportingguidelines,aswellasotherrequirementsforinternalcontrolsupervisionandbasedontheprinciplesofcomprehensiveness,significance,balance,adaptabilityandcost-effectiveness,theCompanyestablishesandimprovestheinternalcontrolsystemimplementedbytheBoardofDirectors,BoardofSupervisors,managersandallemployeestoachievetheCompany'sstrategicdevelopmentgoals,withaviewtoreasonablyensuringthelegalcomplianceoftheCompany'soperationandmanagement,assetsecurity,andauthenticityandintegrityoffinancialstatementsandrelatedinformation,andtoimprovingbusinessefficiencyandeffectiveness.

1.Controlenvironment

(1)Governancestructure

accordingtolaw.TheseniormanagementcomposedofthePresidentandtheChiefFinancialOfficerareaccountablefortheBoardofDirectors,andtakechargeofthedailyoperationandmanagementactivitiesoftheCompany.

(2)Organizationalstructureanddivisionofauthoritiesandresponsibilities

Inviewofthebusinesscharacteristicsandinternalcontrolrequirements,theCompanyreasonablysetsupinternalorganizationsatalllevels,suchasthefunctionaldepartmentsoftheheadquarters,businessdepartments,productionbases,marketingcentersandotherinternalinstitutions,anddefinesthedivisionofauthoritiesandresponsibilitiesintheorganizationstructurechart,jobdescriptions,businessflowcharts,authorizationsystemdocumentsandotherinternalmanagementdocuments,soastoformaworkingmechanismthatallowsperformanceofcorrespondingdutieswithmutualrestrictionandcoordination.

(3)Internalaudit

TheCompanyhassetupanauditdepartment,whichreportstotheAuditCommitteeoftheBoardofDirectors.Theauditdepartmentevaluatesthelevelofinternalcontrolandtheefficiencyofprocesscontrolandorganizationbymeansofinternalaudit,internalcontrolconsultationandorganizationalriskassessment,andtimelyreportstothemanagementandtheAuditCommitteefortheinternalcontroldefectsandpotentialrisksdetectedintheprocessofsupervisionandinspection,andpromotesrelevantdepartmentstoformulateactionplansandfollowupthecorrespondingrectificationperformancetoensuretheeffectiveimplementationofinternalcontrols.

(4)Humanresourcepolicies

Inaccordancewiththedevelopmentstrategy,currentsituationofhumanresources,andfuturedemandforecast,theCompanyformulatesandimplementshumanresourcespoliciesconducivetothesustainabledevelopmentoftheCompany.ThePersonnelManagementSystem,RecruitmentManagementSystem,RemunerationManagementSystem,TrainingManagementSystem,AttendanceManagementSystem,andEmployeeManualformulatedbytheCompanyclearlydefinetheprinciplesandprocessesfortheemployeesinaspectsofselectionandappointment,dimissionandtransfer,remunerationassessment,training,rewardsandpunishments,labordisciplines,informationconfidentiality,etc.

(5)Enterpriseculture

TheCompanyadherestotheenterprisespiritof"WithPressure,FacePressure,Overcomepressure",setsuptheenterprisestyleof"Patriotism,Integrity,Modesty,Pragmatism,InnovationandTranscendence,anddevotestoimprovingthelivingqualityofthousandsuponthousandsoffamiliesintheirkitchensandhomes,sothat"Wherethereisahome,thereisSupor"canbecometheconsensusofmoreandmoreconsumers.ThroughtheestablishmentofaseriesofinternalnormssuchastheBasicLawofSupor,theCodeofProfessionalEthicsofEmployeesandtheRulesforAnti-faulttheCompanyintegratestheefficientandpragmaticcorporatecultureintoallaspectsofdailyproductionandoperatingactivities,andenhancestheemployees'senseofresponsibilityandsenseofmission,normalizesemployeebehaviors,enhancescorporatecohesionandcoagulation,andconstantlyimprovestheoverallimageoftheCompany.

2.Riskassessment

Accordingtotheestablishedcontrolobjectivesandthecharacteristicsofbusinessdevelopmentindifferentstages,theCompanyintroducesdifferentformsofmeasures,suchasriskself-assessment,anti-corruptionquestionnaire,riskmapping,andtaxriskmatrix,tocarryoutcomprehensive,systematicandcontinuouscollectionofrelevantinformation,withthemethodcombiningbothquantitativeandqualitativemeasures,inordertotimelyidentifyandsystematicallyanalyzetheinternalrisksintheproductionandoperatingprocessesintermsofhumanresources,management,innovation,finance,assets,health,safety,environmentalprotection,data

confidentiality,businessloss,andcontinuingoperation,andtheexternalrisksintheproductionandoperatingprocessesintermsofpolitics,economy,law,taxation,scienceandtechnology,naturalenvironment,socialenvironment,etc.,andtodeterminetheriskresponsestrategythatmatchestheCompany'sriskbearingcapacityandtakeappropriatecontrolmeasurestoachieveeffectiveriskcontrol,onthebasisofweighingtheprincipleofcost-benefit.

3.Controlactivity

Inthecourseofdailyoperation,theCompanycontinuouslyestablishesandimprovesvariousmanagementsystems,coveringfinancialaccounting,internalcontrol,humanresources,materialprocurement,inventorymanagement,assetmanagement,technologicalR&D,productionprocess,qualitycontrol,productsales,health,safetyandenvironment,comprehensivemanagement,etc.,toensurethecomplianceofallworkaspects.Underthevariousinstitutionalframeworks,theCompanyreasonablyensurestherealizationofbusinessobjectivesthroughtheimplementationofkeycontrolmeasuresandprocedures.Keycontrolsmustinclude:separatedcontrolforincompatibleposts,approvalcontrolforauthorization,accountingsystemcontrol,propertyprotectionandcontrol,budgetcontrol,operationalanalysiscontrol,performanceassessmentcontrolandothercontrols.

(1)Approvalcontrolforauthorization:theCompanydefinesthescope,authority,procedure,responsibilityandotherrelevantaspectsofauthorizationandapproval,andthemanagementstaffatalllevelsoftheCompanymustexercisethecorrespondingfunctionsandpowerswithinthescopeofauthorization,andthehandlingpersonnelmustalsohandleeconomictransactionswithinthescopeofauthorizationandbearcorrespondingliabilities.

(2)Separatedcontrolforincompatibleposts:theCompanysetsupareasonabledivisionoflabor,scientificallydividesresponsibilitiesandpowers,andformulatestheSystemofSeparationofResponsibilitiesandPowersinaccordancewiththeprincipleofseparationofincompatibleduties,soastoformamechanismofmutualchecksandbalances.Incompatibledutiesmainlyinclude:

feasibilitystudyanddecisionapproval,decisionapprovalandimplementation,implementationandsupervision&inspection.

(3)Accountingsystemcontrol:instrictaccordancewiththeprovisionsoftheAccountingStandardsforBusinessEnterprises,theCompanyformulatesthefinancialpoliciesandprocessessuchastheAccountingPreconditionsandBasicPrinciples,AccountingSystemofAccountingSubjects,RevenueRecognitionSystem,ConsolidatedStatementSystem,andAccountSettlementProcess,clearlydefinesthehandlingproceduresforaccountingvouchers,accountingbooksandfinancialstatements,soastoensuretheauthenticityandintegrityofaccountingdata.

(4)Propertyprotectionandcontrol:theCompanystrictlyrestrictsunauthorizedpersonnelfromaccessinganddisposingassets,andadoptsmeasuressuchasregularstocktaking,assetrecords,accountverification,andpropertyinsurance,toensurethesafetyofallkindsofassetsinaccordancewiththerequirementsoftheInventoryTakingandRegulationSystem,andFixedAssetsManagementSystemformulatedbytheCompany.

(5)Budgetcontrol:theCompanyimplementscomprehensivebudgetmanagementinaccordancewiththeBudgetSystem,andtheresponsibledepartmentsatalllevelspreparetheirbudgetsinaccordancewiththeirresponsibilitiesandpowers,andregularlyfollowuptheimplementationoftheirbudgetsafterbeingreviewedandapprovedbythemanagement.

(6)Operationalanalysiscontrol:theCompanyhasestablishedaregularoperationanalysismechanism,withwhichthemanagementcanutilizethedataandinformationacquiredintheproduction,procurement,sales,financeandothersystemstocomprehensivelyanalyzeandevaluatetheCompany'soperatingrisksandmarketsituations,timelydetectanyproblems,identifythecausesandformulateeffectiverectificationplansforimprovement.

(7)Performanceassessmentcontrol:accordingtotherequirementsoftheCompany'sRemunerationManagementSystem,theCompany'sorganizationsatalllevelshaveestablishedandimplementedacomprehensiveandsystematicperformanceassessmentsystem,toscientificallysetupperformanceassessmentindicatorsofvariousindividuals/groups,regularlyorganizeassessmentandobjectiveevaluation,andtaketheassessmentresultsasthebasisforemployeeremunerationadjustment,jobpromotion,rewardandpunishment,posttransfer,dismissal,etc.

4.Informationandcommunication

Accordingtotherequirementsofdevelopmentstrategy,riskcontrolandperformanceassessment,theCompanyhasestablisheddifferentlevelsofinternalreportingindicatorsystems,inordertoenablethemanagementatalllevelstotimelyandcomprehensivelyaccessallkindsofinternalandexternalinformationpertainingtoproductionandmanagementandpromptlyformulatebusinessprinciplesandpoliciesadaptivetobusinessandenvironmentalchanges.TheinternalreportingsystemsmakefulluseofinformationtechnologytobuildascientificinternalreportingnetworkbasedonreliableinformationsystemssuchasSAP,BI,CRM,consolidatedstatements,andmanagementstatements.

TheCompanyhasestablishedaspecialanti-fraudmechanism,clearlydefinedthekeyareasandkeylinksofanti-fraudeffortsandtheanti-fraudresponsibilitiesandpowersofrelevantdepartments,andsetupthesolely-designatedsupervisionchanneltostandardizethewhistleblowing,investigation,handling,reportingandfollow-upprocessesoffraudcases.Besides,throughe-mail,officialwebsite,WeChatofficialaccount,contracts,training,meetingsandotherformsofmeasures,theCompanypublicizestheanti-fraudpoliciesandsupervisionchannelstoemployees,suppliers,distributorsandotherstakeholdersfromtimetotime,soastoformananti-fraudatmospherewhichemphasizesonpreventionandcombinesbothpunishmentandprevention.

5.Supervisiononcontrol

TheCompanyhasestablishedaninternalcontrolandsupervisionmechanism,withwhichtheindependentdirectorsandtheBoardofSupervisorscanfullyandindependentlyperformsupervisorydutiesforthemanagementoftheCompany,andcarryoutindependentevaluationandprovideindependentsuggestions.TheCompanyhasformulatedtheInternalAuditSystem,andthespecialinternalauditdepartmentundertheleadershipoftheAuditCommitteeoftheBoardofDirectorscanindependentlycarryoutinternalaudit,implementeffectivesupervisionoverthemanagementandpromotetheeffectiveimplementationofinternalcontrols.Inthelightofthesituationofinternalsupervision,theCompanyregularlycarriesoutself-evaluationontheeffectivenessofinternalcontrolsandissuesSelf-EvaluationReportonInternalControlSystem.

2.Significantinternalcontroldefectsofinternalcontrolfoundduringthereportingperiod

XIII.Company'sManagementandControlofSubsidiariesduringtheReportingPeriodTheheadquartersoflistedcompanieseffectivelymonitorsthesubsidiariesthroughthefollowingmeasures:

(1)Delegateandappointseniorexecutivesofsubordinatesubsidiariesatthebeginningofeachyear,andclearlydefinetheirtermsofreferenceandreportobjects.

(2)Supervisesubordinatesubsidiariestoformulatedetailedmanagementprocessesandriskcontrolproceduresforvariousbusinesssectorsandfunctionalareasundertheprincipleframeworksofmanagementsystemsoftheheadquartersandbusinessdivisions.

(3)Conveneamonthlyoperatingandfinancialmeetingtoreviewandfollowuptheimplementationofthesubsidiaries'businessplansandthecompletionofvariousperformanceevaluationindicatorsinatimelymanner,inaccordancewiththeCompany'sdevelopmentandbusinessobjectivesspecifiedintheannualbudgetplanningmeeting.Besides,variousfunctionalcommittees,suchasproductcommittee,andprocurementcommittee,alsocarryouteffectivemonitoringoverthedailyoperationandoperatingactivitiesofthesubsidiaries.

(4)Themainfinancialandbusinessinformationsystems,includingSAP,CRM,SRM,BI,OMSandBPM,arecentrallymanagedintheheadquartersoflistedcompanies,whichisconvenientfortheheadquarterstoaccessandmanagetheproduction,salesandprocurementofthesubsidiariesthroughsystemreportsinrealtime.Inaddition,allsubsidiariesarealsorequiredtosubmitmanagementreportsinrespectofoperation,finance,industry,humanresources,etc.,totheheadquartersonamonthlybasis.

(5)ThereceiptsandpaymentsofmajorsubsidiariesaresubjecttocentralizedallocationanddisbursementoftheFinancialSharingCenteroftheheadquartersofthelistedcompanies,andtheFinancialSharingCenterisresponsibleforthepreparationandreportingofthemonthlybalancesheets,profitstatementsandcashflowstatementsofthesubordinatesubsidiaries,andconveningregularmeetingswithsubordinatesubsidiariestoanalyzeandfollowupthechangesofvariousfinancialdata.

(6)InaccordancewiththerequirementsoftheCompany'sManagementSystemforInformationDisclosureAffairs,eachsubsidiaryshallpromptlyreporttotheheadquartersofthelistedcompaniesrelevantinformationpertainingtomajorbusiness/financialandothermatters,andprovidetimelyfeedbackontheprogressorchangesofmajormatters,andifnecessary,gothroughthereviewandapprovalproceduresoftheBoardofDirectorsandBoardofShareholders.

(7)Timelyidentifythepotentialrisksandmajorissuesinsideandoutsidethesubsidiariesbymeansofinternalaudit,riskself-assessment,anti-corruptionquestionnaire,managementstatementandanti-fraudinvestigation,etc.,drawthemanagement'sattentiontokeyareasandvulnerablelinks,andpromptlytakemeasurestoreducerelevantrisks.XIV.EvaluationReportofInternalControlorInternalControlAuditReport

1.EvaluationReportofInternalControl

2.Auditreportofinternalcontrol

Didtheaccountingfirmissuetheauditreportofinternalcontrolwithnon-standardopinions

Istheauditreportofinternalcontrolissuedbytheaccountingfirmconsistentwiththeopinionsinself-evaluationreportoftheBoardofDirectorsYes□No

XV.RectificationofSelf-inspectedProblemsintheSpecialActiononGovernanceofListedCompanies

Notapplicable

SECTIONVSOCIALANDENVIRONMENTAL

RESPONSIBILITIESI.MajorEnvironmentalIssuesDothelistedcompanyanditssubsidiarybelongtokeypollutantdischargingunitpostedbytheenvironmentalprotectiondepartmentYes□NoPoliciesandindustrialstandardsrelatedtoenvironmentalprotection

AccordingtotheTechnicalSpecificationforApplicationandIssuanceofPollutantPermitGeneralProgramme(HJ942-2018),theSelf-monitoringTechnologyGuidelinesforPollutionSources-GeneralRule(HJ819-2017)andthenationalstandardsforpollutantsdischarge,theenvironmentalimpactassessmentdocumentsofconstructionprojectsandtheiradministrativelicenses,andtherequirementsinnationalenvironmentmonitoringtechnicalspecifications,theCompanyhasimproveditsself-monitoringscheme,whichneedstobeputonrecordbythecompetentdepartmentforecologicalenvironmentunderitsjurisdiction.AdministrativepermissionsforenvironmentalprotectionAccordingtotheinformationfromrelatedsystems,therelevantadministrativepermitsofenvironmentalprotectionareasfollows:

Industrialemissionstandardandpollutantdischargeinproductionandoperatingactivities

Duringthereportingperiod,theCompany'stotalinvestmentinenvironmentalgovernanceandprotectionwasRMB20.14million,includingRMB0.055millionofenvironmentalprotectiontax.Measuresandeffectstakentoreducecarbonemissionsduringthereportingperiod

AdministrativepenaltiesforenvironmentalproblemsduringthereportingperiodNoneOtherenvironmentalinformationthatshallbemadepublicNoneOtherenvironmentalprotectionrelatedinformationNone

II.Socialresponsibilities

Fordetails,pleaserefertotheEnvironmental,SocialandGovernanceReport2023releasedbytheCompany.III.ConsolidateandExpandtheAchievementofPovertyAlleviationandtheImplementationofRuralRevitalization

Duringthereportingperiod,theCompanyactivelysupportedthenationalpolicyofruralrevitalizationandcommonprosperity,adheredtotheCompany'svisionandmission,practicedthewelfarepropositionof"sharingabetterlifewitheachchild",activelydonatedfundstoimprovethebasiceducationconditionsinremotemountainousareasinthecentralandwesternregions,activelyleverageditsindustrialandresourceadvantagestosupporturbanandruralschoolsinpromotinglifeliteracyeducation.Indoingso,theCompanycollaboratedwiththefamiliesandschoolstojointlycultivatefuture-oriented,life-loving,andnew-generationchildrenwhocarefortheirfamilies.

Atpresent,theCompanyhasdonatedfortheconstructionof28SuporPrimarySchoolsinremotemountainousareasinthecentralandwesternregions,andwillsteadilyincreasethenumberofschoolsinthefuture.In2023,Suporjoinedhandswithpublicwelfarepartnerstocontinuetoprovideonlinelivestreamingcoursesofart,foreignlanguage,andscienceto14SuporPrimarySchools,allowingchildreninmountainvillagestoaccesshigh-qualityeducation.TheCompanyhasalsobeenfocusingonimprovingtheeducationalperspectivesandabilitiesofruralteachersinmountainousareasovertheyears.Inthesummerof2023,thestudytourforruralteachersatSuporPrimarySchoolsresumed,and41ruralteacherscametoHangzhouwiththesupportoftheCompanytocarryouteducationalexchanges.

The"Supor–LittleArtistsofLife"project,whichsupportstheimprovementoflifeliteracyeducationinurbanandruralschools,isalsoprogressingsteadily,andperfectingprogressively.Todate,over20urbanandruralschoolsacrossHangzhou,Shaoxing,Lishui,Wuhan,Xingyi,andmorehavereceivedsupport,creatinglifeeducationspaceandconductinglifeskillsclasses,enablingchildrentoachievebettergrowththroughpracticalexperiences.

Suporemployeesalsotookanactivepartinpublicwelfare.OntheeveoftheChildren'sDay,hundredsofemployeesoftheCompanyparticipatedinthe"RunningforChildren"campaigntoprovidedonationsbasedonthenumberofrunningsteps,supportingthechildreninneed.DuringthepublicwelfareweekinDecember,employeevolunteersvisitedQinglongDasendianSuporPrimarySchoolinHebeionbehalfoftheCompany,offeringinterestclassesincooking,crafts,reading,andhostingtothechildren,spendingjoyfultimetogether.

Inaddition,theCompanyalsoactivelydonatedusefulsuppliesforruralrevitalizationandearthquakerelief,bringingwarmthtoruralchildrenandvictims.

Inthefuture,theCompanywillcontinuetoactivelyrespondtothenationalpolicyofruralrevitalizationandcommonprosperity,givefullplaytotheadvantagesofSupor'sbusinesscapabilitiesandresources,activelypromotevariouscharityprogramsandactivitiesintermsofliteracyeducationforchildreninruralvillagesandbroadeningtheirhorizons,andworkwithmorelike-mindedcharitypartnerstocontributetoabetterlifeandbettersocietyinruralareas.

Ruralrevitalizationandcommonprosperity

Awardsreceived(content,grade)

SECTIONVISIGNIFICANTEVENTS

I.FulfillmentofCommitments

1.Commitmentsthatwerefulfilledduringthereportingperiodandhadnotbeenfulfilledtilltheendofreportingperiodbyactualcontroller,shareholder,relatedparty,acquirerandothercommitmentpartiesoftheCompany

Therewerenocommitmentsthatwerefulfilledduringthereportingperiodandhadnotbeenfulfilledtilltheendofreportingperiodbyactualcontroller,shareholder,relatedparty,acquirerandothercommitmentpartiesoftheCompany.

2.WhereassetsorprojectsoftheCompanyareexpectedtomakeprofit,andtheexpectedprofitingperiodisduringthereportingperiod,theCompanyherebyexplains

II.OccupiedNon-businessCapitalofListedCompanyforControllingShareholdersandRelatedParties

Therewasnonon-operatingoccupationofcapitaloflistedcompaniesbycontrollingshareholdersandtheirrelatedpartiesoftheCompanyduringthereportingperiod.III.IllegalExternalGuarantee

TherewasnoillegalexternalguaranteeoftheCompanyduringthereportingperiod.IV.ExplanationontheBoardofDirectorsontheLatest"Non-standardAuditReport"

V.ExplanationontheBoardofDirectors,theBoardofSupervisorsandIndependentDirectors(IfAny)onthe"Non-standardAuditReport"duringtheReportingPeriod

VI.RepresentationofChangesinAccountingPoliciesandAccountingEstimatesorCorrectionofImportantAccountingErrors,ComparedwiththeFinancialStatementsofthePreviousYear

Duringthereportingperiod,therewasnochangeinaccountingpolicies,accountingestimatesorcorrectionofimportantaccountingerrors.

VII.InformationonChangeoftheScopeofConsolidatedStatementComparedwiththePreviousYear'sFinancialStatements

Therewasnochangeinthescopeofconsolidatedstatementsduringthereportingperiod.

VIII.EmploymentandDisengagementofCertifiedPublicAccountants

Certifiedpublicaccountantsengagedatthemoment

Intensionofchangingcertifiedpublicaccountants

Employmentofinternalcontrolcountingfirm,financialconsultantorsponsorApplicable□NotapplicableSameaccountingfirmforinternalcontrolaudit

IX.DelistingafterDisclosureofAnnualReport

X.BankruptcyorReorganization

Therewasnobankruptcy,reorganizationorrelatedmattersintheCompanyduringthereportingperiod.

XI.ImportantMattersofLawsuitandArbitration

Therewasnosignificantlitigationandarbitrationoccurredduringthereportingperiod.XII.PunishmentandRectification

Therewasnopunishmentandrectificationduringthereportingperiod.XIII.IntegrityoftheCompany,ItsControllingShareholdersandActualControllers

XIV.MajorRelatedTransactions

1.Relatedtransactionrelatedtodailybusiness

2.Relatedtransactionsfrompurchaseandsalesforassetsorequity

Therewerenorelatedtransactionsfrompurchaseandsalesforassetsorequityduringthereportingperiod.

3.Relatedtransactionforco-investmentabroad

Therewasnorelatedtransactioninvolvingjointexternalinvestmentduringthereportingperiod.

4.Connectedcreditor'srightsanddebts

Therewerenorelatedcreditor'srightsanddebtsduringthereportingperiod

5.Dealingswithassociatedfinancialcompanies

Therewasnodeposit,loan,creditorotherfinancialbusinessbetweentheCompanyandassociatedfinancialcompaniesandtheirrelatedparties.

6.DealingsbetweenthefinancialcompaniescontrolledbytheCompanyandtheirrelatedparties

Therewasnodeposit,loan,creditorotherfinancialbusinessbetweentheCompanyandholdingfinancialcompaniesandtheirrelatedparties.

7.OtherimportantRelatedtransactions

Therewerenosignificantrelatedtransactionsduringthereportingperiod.XV.SignificantContractsandPerformance

1.Custody,contracting,andleasing

(1)Custody

Nocustodywasmadeduringthereportingperiod.

(2)Contracting

Nocontractingwasmadeduringthereportingperiod.

(3)Leasing

Applicable□NotapplicableCircumstancesofleasingPleasereferto15"Right-of-useassets"and28"leaseobligation"inSECTIONX"FINANCIALSTATEMENT"VII"Notestoitemsofconsolidatedfinancialstatements".Theprofitandlossbroughttothecompanyreachesmorethan10%ofthetotalprofitofthecompanyduringthereportingperiod.

Duringthereportingperiod,therearenoleasingitemsthatbringprofitsandlossesoftheCompanytomorethan10%ofthetotalprofitsoftheCompanyduringthereportingperiod.

2.Majorguarantee

Note:The19

SessionoftheSeventhBoardofDirectorsandtheAnnualGeneralMeetingofShareholdersfor2022FiscalYearoftheCompanyreviewedandadoptedtheProposalonGuaranteeforWholly-ownedSubsidiariesandMutualGuaranteeamongWholly-ownedSubsidiaries,andagreedthattheCompanyanditswholly-ownedsubsidiarieswouldprovideguaranteesuptoRMB4billionforthewholly-ownedsubsidiariesintheyearof2023.Amongthem,theguaranteedamountforcompanieswith70%(inclusive)asset-liabilityratiooroverisRMB3billion,andRMB1billionforcompanieswithaasset-liabilityratiobelow70%.SpecificdescriptionforusingthecompositeguaranteesituationNone

3.Entrustingothersforcashassetmanagement

(1)Entrustmentforfinancialmanagement

Applicable□NotapplicableOverviewofentrustedfinancingduringthereportingperiod

Circumstancesinwhichprincipalofentrustedfinancingmaynotberecoveredorwhichmayresultindecreaseinvalue:

(2)Entrustmentforloan

Noentrustmentforloanwasmadeduringthereportingperiod.

4.Othersignificantcontracts

TherewerenoothersignificantcontractsinvolvedintheCompanyduringthereportingperiod.XVI.Instructionsforotherimportantmatters

TheCompanyhasnootherimportantmatterstobeexplainedduringthereportingperiod.XVII.Importantmattersofsubsidiaries

SECTIONVIICHANGESINSHARECAPITALAND

PARTICULARSABOUTSHAREHOLDERSI.Changesofshares

1.Changesofshares

ReasonsforthechangeofsharesApplicable□Notapplicable

1.TopmanagementoftheCompanyunlocked25%ofthesharesregisteredundertheirnamesonthelasttransactiondateofthepreviousyear.

2.OnFebruary24,2023,atotalof79,000sharesofrestrictedstockofpostponedportionofthe2022RestrictedStockIncentivePlanweretransferredto2incentiveobjects.

3.OnApril10,2023,theCompanycancelledatotalof1,870,069repurchasedpublicshares.Uponthecancellation,theCompany'stotalsharecapitaldecreasedfrom808,654,476to806,784,407shares.

4.OnJune29,2023,totally75,750sharesofrestrictedstockthathavebeengrantedtoresignedincentiveobjectsbuthavenotbeenunlockedfromrestrictionin2021and2022RestrictedStockIncentivePlanswererepurchasedandcancelledbytheCompany.Upontherepurchaseandcancellation,theCompany'stotalsharecapitaldecreasedfrom806,784,407sharesto806,708,657shares.

5.OnNovember17,2023,thesharesheldbyMr.SuMing-Jui,formerGeneralManageroftheCompanythatwereoriginallylockedduetoresignationwereunlockedfully.ApprovalofchangeinshareApplicable□Notapplicable

1.OnJanuary31,2023,theProposalonGrantofPostponedPortionofRestrictedStocktoIncentiveObjectswasreviewedandadoptedatthe18

SessionoftheSeventhBoardofDirectorsandthe17

SessionoftheSeventhBoardofSupervisors,theCompanyagreedtograntatotalof79,000sharesofpostponedportionofrestrictedstockstotwoincentiveobjects.ThegrantdatewasFebruary1,2023.AfterconfirmedbyShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited,thepostponedportionofrestrictedstocksintheCompany's2022RestrictedStockIncentivePlanweretransferredandregisteredunderthenameoftwoincentiveobjectsonFebruary24,2023.

2.OnMarch29,2023,theProposalonTerminatingthePublicSharesRepurchasePlanwasreviewedandadoptedatthe19

thSessionoftheSeventhBoardofSupervisorsoftheCompany,theCompanyplanstocancel1,870,069sharesheldintheCompany’sspecialstockrepurchaseaccounttoreduceregisteredcapitalasauthorizedbytheAnnualGeneralMeetingofShareholdersfor2021FiscalYear.AfterconfirmedbyShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited,theCompanycompletedthecancellationoftheabovesharesonApril10,2023.

3.OnAugust30,2022andonMarch29,2023,theProposalonRepurchasingandCancelingaPartofRestrictedStockwasreviewedandadoptedrespectivelyatthe14

SessionoftheSeventhBoardofDirectorsandthe13

thSessionoftheSeventhBoardofSupervisorsandthe19

Thereare1,870,069publicsharesrepurchasedandcancelledand75,750restrictedstocksrepurchasedandcancelledintheperiodintotal,whichcreatesaminorimpactontheearningspershareanddilutionofearningspershare,andcreatesnoimpactonotherfinancialindicatorssuchasthenetassetpershareattributabletocommonshareshareholdersoftheCompany.Theothercontentsthecompanythinksfittodiscloseorthesecuritiesregulatoryauthorityrequirestodisclose

2.Changesofrestrictedshares

II.SecurityOfferingandListingInformation

1.Securityoffering(excludingpreferredshare)duringthereportingperiod

2.TotalsharesoftheCompany,changeofshareholderstructure,andchangesoftheCompany'sassetsandliabilitiesstructure

Applicable□NotapplicableDuringthereportingperiod,theCompanycancelled1,870,069publicsharesrepurchased,and75,750restrictedstocksgrantedtoresignedincentiveobjectsunderthe2021RestrictedStockIncentivePlanand2022RestrictedStockIncentivePlanbutnotliftedforsales,whichincombinationare1,945,819sharesintotal.Uponthecancellation,theCompany'stotalsharecapitaldecreasedfrom808,654,476sharesto806,708,657shares.

3.Staffshares

III.ShareholdersandtheActualController

1.NumberofshareholdersoftheCompanyandshare-holdingconditions

Top10shareholders'involvementinshareslentoutthroughsecuritiesfinancing

Changesoftop10shareholderscomparedwiththatinthelastperiodApplicable□Notapplicable

Didthetop10commonshareholdersandthetop10commonshareholdersholdingnon-restrictedsharesconducttheagreedrepurchasetransactionduringthereportingperiod

Thetop10commonshareholdersandthetop10commonshareholdersholdingnon-restrictedsharesdidnotconducttheagreedrepurchasetransactionduringthereportingperiod.

2.Controllingshareholder

Propertyofcontrollingshareholder:foreign-controlledshareholdingTypeofcontrollingshareholder:legalentity

Changeofcontrollingshareholderduringthereportingperiod

Nochangeofcontrollingshareholderoccurredduringthereportingperiod.

3.Actualcontrollerandpersonsactinginconcert

Natureofactualcontroller:otherforeignorganizationTypeofactualcontroller:legalentity

reportingperiod

Changeofactualcontrollerduringthereportingperiod

Nochangeofactualcontrolleroccurredduringthereportingperiod.PropertyrightandcontrollingrelationshipdiagrambetweentheCompanyandtheactualcontroller

ActualcontrollercontrollingtheCompanybytrustorotherassetsmanagementtypes

4.ThenumberofsharesaccumulativelypledgedbythecontrollingshareholderorfirstmajorityshareholderoftheCompanyanditspersonsactinginconcertaccountfor80%ofthetotalnumberofsharesheldbyitorthem.

5.Othercorporateshareholdersholdingmorethan10%shares

6.Sharerestrictionreductionofcommitmentsubjectssuchascontrollingshareholder,actualcontrollerandtherestructuringparty

IV.SpecificImplementationofShareRepurchaseduringtheReportingPeriodProgressintheimplementationofsharerepurchaseApplicable□Notapplicable

Progressinthereductionofshareholdingofrepurchasedsharesthroughauction

SECTIONVIIIINFORMATIONONPREFERREDSHARE

Nopreferredshareexistedduringthereportingperiod.

SECTIONIXBONDS

SECTIONXFINANCIALSTATEMENT

I.Auditreport

MainTextofAuditReportAllshareholdersofZhejiangSuporCo.,Ltd.,

IV.Otherinformation

ThemanagementofSuporisresponsibleforotherinformation.Otherinformationincludestheinformationcoveredbythe2023SuporAnnualReport,butexcludesthefinancialstatementandourauditreport.Ourauditopinionsonfinancialstatementdonotcoverotherinformation,andwedonotexpressanyauthenticationconclusionsonotherinformation.Integratedwithourauditonfinancialstatement,ourresponsibilityistoreadotherinformation.Inthisprocess,weconsiderwhethertheotherinformationissignificantlydifferentfromtheinformationwewillacquirefromourauditorwhethertheotherinformationhassignificanterror.Basedontheworkwehavealreadyexecuted,ifweconfirmtheotherinformationhassignificanterror,weshouldreportthefact.Onthisaspect,wedonotneedtoreportanyitems.V.ResponsibilitiesofManagementandGovernanceonFinancialStatement

(1)Identifyandevaluatematerialmisstatementriskoffinancialstatementcausedbyfraudulentpracticeorerror,designandimplementauditprocedurestocopewiththeserisks,andobtainsufficientandappropriateauditevidenceasthebasisforissuingauditopinions.Afraudulentpracticemayinvolveincollusion,counterfeit,deliberateomission,falsestatementormaybeabovetheinternalcontrol,sotheriskthatmaterialmisstatementcausedbyfraudulentpracticemaynotbefoundishigherthantheriskthatmaterialmisstatementcausedbyerrormaynotbefound.

(2)Learninternalcontrolrelatedtotheauditforthepurposeofdesigningproperauditprocedures.

(3)Evaluatetheappropriatenessoftheaccountingpolicyselectedbymanagementandtherationalityoftheaccountingestimateandrelateddisclosuremadebythemanagement.

(4)Makeconclusionfortheappropriatenessofthecontinuingoperationassumptionusedbymanagement.Meanwhile,makeconclusionsfortheonewhetherthereissignificantuncertaintyintheissueoritemwhichmayresultinsubstantivedoubtonthecontinuingoperationabilityofSuporinaccordancewiththeacquiredauditevidences.Ifourconclusionthinksthatthereissignificantuncertainty,theauditingstandardrequiresustoremindfinancialstatementuserinourauditreportofpayingattentiontotherelateddisclosureinthefinancialstatement.Ifthedisclosureisnotsufficient,weshouldpresentmodifiedauditreport.Ourconclusionisbasedontheinformationthatisavailablebytheauditreportdate.HoweverfutureissueorcircumstancemayresultindiscontinuingoperationtoSupor.

(5)Evaluatetheoverallpresentation(includingdisclosure),structureandcontentsoffinancialstatement,andevaluatewhetherfinancialstatementpresentsrelatedtransactionsanditemsfairly.

(6)AcquiresufficientandappropriateauditevidencesforfinancialinformationofentityactivityorbusinessactivityofSupor,andexpressopinionsonauditfinancialstatement.Weareresponsibleforguiding,supervisingandexecutingtheauditoftheGroup,andbearfullresponsibilityforauditopinions.

Wecommunicatedauditscope,timescheduleandsignificantauditfindingandotherissueswithgovernance,includingtheinternalcontroldefectthatisworthyofnotingintheauditprocess.

Wehaveprovidedadeclarationtothegovernancethatwehaveabidedbytheprofessionalethicsrequirementsrelatedtoindependency,andhavecommunicatedwiththegovernanceallrelationshipsandotherissuesthosearethoughttoaffectourindependency,aswellastherelatedprecautionarymeasures(ifapplicable).

Intheissuewecommunicatedwiththegovernance,wedeterminedwhichissuesaremostimportanttothefinancialstatementauditinthecurrentperiod,sowhichconstitutesthekeyaudititems.Wedescribedtheseitemsinourauditreport,unlessotherwise

theseitemsareprohibitedtoopenlydisclosebylawandregulation,orunderfewcircumstances,ifaccordingtoanrationalexpectation,whennegativeconsequenceofcommunicatinganissueintheauditreportmayexceeditsbenefitontheaspectofpublicbenefit,weconfirmthatwewillnotcommunicatetheissueinourauditreport.

KPMGHuazhenLLP(SpecialGeneralPartnership)ChineseCPA:

(Projectpartner):________________

HuangFeng

Beijing,ChinaChineseCPA:________________

JinYang

Date:March29,2024

II.FinancialStatements

Unitofstatementinnotestofinancialstatement:RMB

1.Consolidatedbalancesheet

Compiledby:ZhejiangSuporCo.,Ltd.

December31,2023

Legalrepresentative:ThierrydeLATOURD'ARTAISEPersoninchargeofaccounting:XuBoPersoninchargeofaccountingdepartment:XuBo

2.Balancesheetofparentcompany

3.Consolidatedprofitstatement

Iftheenterpriseunderthesamecontrolismerged,thenetprofitrealizedbythemergedpartybeforemergerwasRMB0,andthenetprofitrealizedbythemergedpartyduringthepriorperiodwasRMB0.Legalrepresentative:ThierrydeLATOURD'ARTAISEPersoninchargeofaccounting:XuBoPersoninchargeofaccountingdepartment:XuBo

4.Profitstatementoftheparentcompany

5.Consolidatedcashflowstatement

6.Cashflowstatementofparentcompany

7.StatementofChangesinConsolidatedOwners'Equities

Amountofthisperiod

Amountofthepriorperiod

8.StatementofChangesinOwners'EquitiesoftheParentCompany

III.CompanyProfileZhejiangSuporCo.,Ltd(hereinafterreferredtoas"theCompany")isalimitedliabilitycompany(byshares)transformedonanintegralbasisfromZhejiangSuporCookwareCo.,LtdundertheapprovalofLeadingGroupforEnterpriseListingofthePeople'sGovernmentofZhejiangProvincewithNo.ZSS[2000]24approvaldocument.OnNovember10,2000,theCompanyregisteredatZhejiangAdministrationforIndustryandCommerce.Registeredaddress:YuhuanCity,ZhejiangProvince;headofficeaddress:

HangzhouCity,ZhejiangProvince.TheCompany'sparentcompanyisSEBINTERNATIONALES.A.SwhosefinalparentcompanyisSEBS.A.TheCompanyhasacorporatebusinesslicensenumbered913300007046976861.

Thecompanyanditssubsidiaries(hereinafterreferredtoas"Supor")aremainlyengagedintheR&D,productionanddistributionofkitchenutensils,stainlesssteelproducts,dailyhardware,smalldomesticappliancesandcookware;itsproductsarecookwareandsmalldomesticappliances.ThefinancialstatementwasreleasedaftertheapprovaloftheCompany'sBoardofDirectorsonMarch292024.ByDecember31,2023,therewerealtogether20subsidiariesincludedinthescopeofconsolidatedfinancialstatement.SeeNoteX"EquityinOtherEntities"fordetails.IV.PreparationBasisoftheFinancialStatements

1.Preparationbasis

ThefinancialstatementsoftheGrouparepreparedbasedontheassumptionofcontinuingoperationandactualtransactionsanditemsandinaccordancewiththeAccountingStandardforBusinessEnterprises--BasicStandard(ReleasedCZBLNo.33,RevisedCZBLNo.76)issuedbytheMinistryofFinanceofthePeople'sRepublicofChina(hereinafterreferredtoasthe"MinistryofFinance"),and42specificaccountingstandards,guidelinesfortheapplicationofaccountingstandardsforbusinessenterprises,interpretationstotheaccountingstandardsforbusinessenterprisesandotherprovisionsreleasedandrevisedonandafterFebruary15,2006(hereinafterreferredtoasaccountingstandardsforbusinessenterprises)andthedisclosureprovisionsoftheRegulationsofCorporateInformationDisclosureandPreparationbyCompaniesPubliclyIssuingSecuritiesNo.15--GeneralProvisionsonFinancialReporting(Revisedin2023)oftheChinaSecuritiesRegulatoryCommission.

Accordingtotherelevantregulationsoftheaccountingstandardsforbusinessenterprises,theGroup'saccountingismadeonaccrualbasis.Exceptforcertainfinancialinstruments,measurementsinthesefinancialstatementsaremadeonthebasisofhistoricalcost.Ifanassetisimpaired,correspondingimpairmentprovisionwillbemadeinaccordancewithrelevantregulations.

2.Continuingoperation

TheCompanyhastheabilitytocontinueoperationsforatleast12monthssincetheendofthereportingperiod,andtherearenomajorissuesaffectingtheabilitytocontinueoperations.V.ImportantAccountingPoliciesandEstimates

Promptforspecificaccountingpoliciesandestimates:

TheGrouphasformulatedseveralspecificaccountingpoliciesandestimatesbasedontheactualproductionandoperationcharacteristicsandrelevantaccountingstandardsforenterprises.

Whenpreparingfinancialstatements,thegroup'smanagementneedstouseestimatesandassumptions,whichwillaffecttheapplicationofaccountingpoliciesandtheamountsofassets,liabilities,income,andexpenses.Theactualsituationmaydifferfromtheseestimates.Themanagementofthegroupcontinuouslyevaluatesthekeyassumptionsanduncertaintiesinvolvedintheestimation,andrecognizestheimpactofchangesinaccountingestimatesinthecurrentandfutureperiodsofthechange.Thegroup'smainaccountingestimatesincludedepreciationandamortizationoffixedassetsandintangibleassets(seenotesV,17,and20),impairmentofvariousassets(seenotesVII,4,6,8,13,andXIX,1,and2),recognitionofdeferredtaxassetsandliabilities(seenotesVII,17),disclosureoffairvalue(seenoteXIII),andsharebasedpayments(seenoteXV).

1.AbidanceofthestatementofAccountingStandardsforBusinessEnterprisesThefinancialstatementconformstotherequirementsofAccountingStandardsforBusinessEnterprisesandhasreflectedrelevantinformationsuchasthefinancialconditionandconsolidatedfinancialconditionasatDecember31,2023,andtheoperatingresult,consolidatedoperatingresult,cashflow,andconsolidatedcashflowfortheyearof2023,oftheCompanyandSupor.Inaddition,thefinancialstatementsoftheCompanyandtheGroupconformtothedisclosurerequirementsoftheRegulationsofCorporateInformationDisclosureandPreparationbyCompaniesPubliclyIssuingSecuritiesNo.15-GeneralProvisionsonFinancialReportingrevisedbytheChinaSecuritiesRegulatoryCommission(CSRC)in2023andrelatedfinancialstatementsandtheirnotes.

2.Accountingperiod

TheaccountingperiodoftheGroupisdividedintoannualperiodandinterimperiod;aninterimperiodreferstoareportingperiodwhichisshorterthanawholefiscalyear.TheGrouptakescalendaryearasthefiscalyear,i.e.,fromJanuary1toDecember31.

3.Operatingcycle

ThenormaloperatingcyclemeanstheperiodfromthetimewhentheGrouppurchasestheassetsusedforprocessingtothetimeofrealizingcashorcashequivalents.TheGrouptakes12monthsasanoperatingcycleandusesitasastandardforclassifyingtheliquidityofassetsandliabilities.

4.Recordingcurrency

RMBisusedinthemaineconomicenvironmentinwhichtheCompanyanditsdomesticsubsidiariesoperateandtheCompanyanditsdomesticsubsidiariesuseRMBastherecordingcurrency.RecordingcurrencyforforeignsubsidiariesoftheCompanyisdeterminedasVND,SGDandIDRseparatelybasedonthecurrencyinmaineconomicenvironmentinwhichtheyoperate.TheGroupusesRMBastherecordingcurrencytopreparethefinancialstatement.

5.Determinationmethodandselectionbasisofsignificancestandards

6.Accountingtreatmentmethodfortheenterprisemergerunderandnotunderthesamecontrol

Enterprisemergerreferstothetransactionoreventsoftwoormoreseparateenterprisescombingintoareportingentity.Enterprisemergerisdividedintotheenterprisemergerunderthesamecontrolandenterprisemergernotunderthesamecontrol.Fortransactionsnotunderthesamecontrol,thepurchasingpartywillconsiderwhethertochoosethesimplifiedjudgmentmethodof"concentrationtest"whenjudgingwhethertheacquiredassetportfolioconstitutesabusiness.Iftheportfoliopassestheconcentrationtest,itisjudgedthatitdoesnotconstituteabusiness.Otherwise,itshallstillbejudgedinlinewithbusinessconditions.WhentheGroupacquiresagroupofassetsornetassetsthatdonotconstituteabusiness,thepurchasecostshallbeallocatedonthebasisoftherelativefairvalueoftheidentifiableassetsandliabilitiesacquiredonthepurchasedate,andshallnotbetreatedasperthefollowingaccountingtreatmentmethodsforenterprisemerger.

(1)Enterprisemergerunderthesamecontrol

Ifenterprisesinvolvedwithmergerareunderthefinalcontrolofthesamepartyorsamemultiplepartiesbeforeandaftermerger,andforanon-temporaryperiod,thenitbelongstoanenterprisemergerunderthesamecontrol.Theassetsandliabilitiesobtainedbythemergingpartyshallbemeasuredonthebasisofbookvalueofthemergedpartyonthemergerdate.Astothedifferencebetweenthebookvalueofnetassetsacquiredbymergingpartyandthebookvalueofmergerconsiderationpaidbyit(ortotalamountofthefacevalueofsharesissued),thecapitalreserve(sharecapitalpremium)shallbeadjustedcorrespondingly;theretainedearningswillbeadjustedaslongascapitalreserve(sharecapitalpremium)isinsufficienttobeoffset.Themergingparty'sdirectexpensesincurredfromenterprisemergershallberecognizedthroughcurrentprofitsandlossesatthetimeofoccurrence.Themergerdatereferstothedaywhenthemergingpartyactuallyobtainsthecontrolrightsofthemergedparty.

(2)Enterprisemergernotunderthesamecontrol

Ifenterprisesinvolvedwithmergerarenotunderthefinalcontrolofthesamepartyorsamemultiplepartiesbeforeandaftermerger,thenitbelongstoanenterprisemergernotunderthesamecontrol.Forenterprisemergernotunderthesamecontrol,thepartywhichhasobtainedthecontrolrightsforothercombiningenterprisesonthepurchasedatewillbeconsideredasthepurchasingparty,andotherparticipatingenterpriseisthepurchasedparty.Thepurchasedatereferstothedaywhenthepurchasingpartyobtainsthecontrolrightoverthepurchasedparty.

Asforenterprisemergernotunderthesamecontrol,themergercostsincludetheassetspaidbythepurchasingparty,theliabilitiesaccruedandassumed,aswellasthefairvalueofequitysecuritiesissuedforobtainingpurchasedparty'scontrolrightonthepurchasedate;theintermediaryfees,suchasauditing,legalserviceandevaluationandconsulting,andotherrelatedadministrativeexpensesfortheenterprisemergershallberecognizedthroughcurrentprofitsandlossesatthetimeofoccurrence.Transactioncostofequitysecuritiesordebtsecuritiesissuedbythepurchasingpartyasmergerconsiderationshallberecognizedthroughinitialrecognitionamountoftheequitysecuritiesordebtsecurities.Contingentconsiderationinvolvedshallberecognizedthroughmergercostaccordingtothefairvalueatthepurchasedate;ifneworfurtherproofsappearingwithin12monthsafterthepurchasedateshowthatthe

Inconsolidatedfinancialstatements,theequityofthepurchasedpartyheldbeforethepurchasedateshallbemeasuredagainaccordingtothefairvalueoftheequityatthepurchasedate,andthedifferencebetweenfairvalueanditsbookvalueshallberecognizedthroughcurrentinvestmentincome;incasethatequityofthepurchasedpartyheldbeforethepurchasedateisinvolvedinothercomprehensiveincomes,othercomprehensiveincomerelatedshallbetransferredtothecurrentinvestmentincomeonthepurchasedate.

7.Judgmentcriteriaofcontrol,andpreparationmethodforconsolidatedfinancialstatements

(1)Principlesfordefiningthescopeofconsolidatedfinancialstatement

Thescopeoftheconsolidatedfinancialstatementsiscontrol-based.ControlreferstothatSuporhastherightinaninvesteewhichallowsittoenjoyvariablereturnsbyparticipatingrelevantactivitiesofsuchinvesteeandtousesuchrighttoinfluencetheamountofsuchreturns.IndeterminingwhethertheGrouphascontroloveraninvestee,theGroupconsiderssubstantiverightsrelatedtotheinvestee(includingsubstantiverightsheldbytheGroupitselfandthoseheldbyotherparties).Thefinancialcondition,operatingresults,andcashflowsofthesubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatecontrolcommencestothedatecontrolceases.TheconsolidationscopeshallincludetheCompanyandallitssubsidiaries,and"subsidiaries"referstothebodiesunderthecontrolofSupor.

Suporwillre-evaluatethesituationoncethechangeinrelevantfactsandcircumstancesaffectsthefactorsinvolvedintheabovedefinitionofcontrol.

(2)Preparationmethodforconsolidatedfinancialstatements

transactionsonsubsidiaries'equityinvestmentsuntillossofcontrolrightisapackagedeal,theyareregardedasatransactionthatdisposesthesubsidiaryandlosesthecontrolright;however,thedifferencebetweeneachdisposalpriceandthesubsidiary'snetassetshareenjoyedcorrespondingtodisposinginvestmentbeforelossofcontrolrightshallberecognizedasothercomprehensiveincomesintheconsolidatedfinancialstatements,whichwillbetransferredintothecurrentinvestmentprofitsandlossesoninvestmentsoflosingthecontrolrightwhenthecontrolrightislost.

8.Determiningstandardsforcashandcashequivalents

CashandcashequivalentsoftheGroupincludescashonhandandthedepositthatcanbeusedformakingpaymentatanytimeaswellasinvestmentsthatareheldbytheGroup,haveashortterm(generallymaturewithin3monthssincethepurchasedate)andstrongliquidity,canbeconvertedintothecashofknownamounteasily,andhavesmallrisksinvaluechange.

9.Foreigncurrencybusinessandforeigncurrencystatementconversion

(1)Conversionmethodforforeigncurrencytransactions

Afterinitialrecognition,theforeigncurrencytransactionsoccurringintheGroupareconvertedintorecordingcurrencyamountsatthespotrateprevailingonthetransactiondate(usuallythecentralparityoftheexchangeratequotedonthedayofissuancebythePeople'sBankofChina,thesamebelow).

(2)Conversionmethodforforeigncurrencymonetaryitemsandforeigncurrencynon-monetaryitems

Forthebalancesheetdate,thespotrateonthebalancesheetdatewillbeadoptedintheconversionoftheforeigncurrencymonetaryitems.Intermsoftheresultingexchangedifferences:①Theexchangedifferenceofspecialforeigncurrencyborrowingsrelatedtoacquiringandconstructingassetswhichmeetcapitalizationconditionsisdisposedontheprincipleofthecapitalizationofborrowingexpense;and②foreigncurrencymonetaryitemsatfairvaluethroughothercomprehensiveincomes,exceptthattheexchangedifferencecreatedbyotherbookbalancechangesotherthanbyamortizedcosts(includingdecreaseinvalue)isrecognizedthroughothercomprehensiveincomes,arerecognizedthroughcurrentprofitsandlosses.

Astoforeigncurrencynon-monetaryitemsmeasuredbyhistoricalcost,theamountintherecordingcurrencyconvertedatthespotrateonthetransactiondateisstillemployedformeasurement;astoforeigncurrencynon-monetaryitemsmeasuredbyfairvalue,it'srequiredtoemploythespotrateatthefairvalueconfirmationdateforconversion,andtheresultingexchangedifferencebelongstothedifferenceofequityinstrumentinvestmentatfairvaluethroughothercomprehensiveincomes,andisrecognizedthroughothercomprehensiveincomeorrecognizedthroughothercomprehensiveincomes;otherdifferencesarerecognizedthroughcurrentprofitsandlosses.

(3)Conversionofforeigncurrencyfinancialstatement

Foreigncashflowsandcashflowsofsubsidiariesoverseasareconvertedbasedonspotrateontheoccurringdateofcashflows.Theinfluencedamountofchangesintheexchangerateoncashislistedseparatelyinthecashflowstatementasanadjustmentitem.

Thebeginningamountandactualamountoftheyearshallbepresentedaccordingtotheamountafterconversionoffinancialstatementoflastyear.IncaseoflossofcontrolrightofoverseasbusinessduetodisposaloftheGroup'sentireowners'equitiesinoverseasbusiness,orthedisposalofpartialequityinvestmentorotherreasons,theforeigncurrencyconversiondifferencelistedintheshareholders'equitiesitemsinthebalancesheet,relatedtotheoverseasbusinessandattributabletoowners'equitiesbelongingtoparentcompanyshallbetotallyconvertedintothecurrentdisposalprofitsandlosses.Incaseofdecreaseoftheratioofoverseasbusiness,butnolossofcontrolrightduetodisposalofpartialequityinvestmentorotherreasons,theconversiondifferencerelatedtothedisposalofpartofrelatedcurrencyintheoverseasbusinessshallbeattributabletotheminorityshareholders'equities,andnotconvertedintothecurrentprofitsandlosses.

Ifthereareanyforeigncurrencymonetaryitemsthatsubstantiallyconstitutenetinvestmentinoverseasbusinesses,theexchangedifferencegeneratedduetothechangeinexchangerateintheconsolidatedfinancialstatementsshallbedeterminedtoothercomprehensiveincomesas"conversiondifferenceinforeigncurrencystatements";whendisposingoverseasbusiness,itshallberecognizedthroughcurrentdisposalprofitsandlosses.

10.Financialinstruments

WhentheGroupbecomesonepartyoffinancialinstrumentcontract,it'srequiredtorecognizefinancialassetsorfinancialliabilities.

(1)Classification,recognitionandmeasurementoffinancialassets

Basedonthebusinessmodeformanagingfinancialassetsandthecontractualcashflowcharacteristicsoffinancialassets,theGroupdividesthefinancialassetsinto:financialassetsmeasuredbyamortizedcost,financialassetsatfairvaluethroughothercomprehensiveincomes,financialassetsatfairvaluethroughcurrentprofitsandlosses

ThebusinessmodeoftheCompany'smanagementoffinancialassetsmeansthathowtheGroupmanagesitsfinancialassetssoastogeneratecashflows.Throughbusinessmode,itcanbedeterminedthatwhetherthecashflowoffinancialassetsmanagedbytheGroupisfromthecollectionofcontractualcashflow,salesoffinancialassets,orboth.TheGroup,basedontheobjectivefactandspecificbusinessobjectiveoffinancialassetmanagementdeterminedbykeymanagementpersonnel,makesdecisionsonthebusinessmodeformanagingfinancialassets.

TheGroupevaluatesthecontractualcashflowcharacteristicsoffinancialassetstodeterminewhetherthecontractualcashflowgeneratedbytherelevantfinancialassetsonthespecificdateisonlypaymentofprincipalandinterestsforoutstandingprincipalamount.Wherein,theprincipalreferstothefairvalueoffinancialassetsatinitialrecognition;interestincludesconsiderationofthetimevalueofmoney,thecreditriskrelatedtotheoutstandingprincipalamountforaspecificperiod,andotherbasicborrowingrisks,costs,andprofits.Furthermore,theGroupevaluatesthecontracttermsandconditionsthatarelikelytocausechangesinthedistributionoftimeoramountofthecontractualcashflowoffinancialassets,todeterminewhetherthetermssatisfytherequirementsoftheabovecontractualcashflowcharacteristics.

UnlesstheGroupchangesitsbusinessmodeformanagingfinancialassets,allaffectedrelatedfinancialassetsarereclassifiedonthefirstdayofthefirstreportingperiodafterthechangeofbusinessmode,otherwise,financialassetscannotbereclassifiedafterinitialrecognition.

Financialassetsshallbemeasuredbyfairvalueduringinitialrecognition.Astofinancialassetsatfairvaluethroughcurrentprofitsandlosses,relatedtransactioncostshallberecognizedthroughcurrentprofitsandlossesdirectly;astoothercategoriesoffinancialassets,relatedtransactioncostshallberecognizedthroughinitialrecognitionamount.Accountsreceivableornotesreceivablethatarefromsaleofproductsorrenderingofservices,anddonotincludeortakeintoaccountsignificantfinancingpartsaretakenasinitialrecognitionamountbytheGroupbasedontheconsiderationamountthattheGroupisentitledtoreceive.(a)Financialassetsmeasuredbyamortizedcost

ThebusinessmodeoftheGrouptomanagefinancialassetsmeasuredbyamortizedcostisaimedatreceivingcontractualcashflows;thecontractualcashflowcharacteristicsofsuchfinancialassetsareconsistentwithbasicloanarrangements,thatis,cashflows

(2)Classification,recognitionandmeasurementoffinancialliabilities

(3)Recognitionbasisandmeasurementmethodofthetransferoffinancialassets

Iffinancialassetsmeetoneofthefollowingconditions,derecognitionofsuchfinancialassetswillbecarriedout:①thecontractualrighttoreceivecashflowfromthefinancialassetsisterminated;②thefinancialassetshavebeentransferredandalmostalltherisksandrewardsintheownershipofthefinancialassetsaretransferredtothetransferee;③thefinancialassetshavebeentransferredand,althoughtheGrouphasneithertransferrednorretainedalmostallrisksandrewardsintheownershipofthefinancialassets,ithaswaiveditscontroloverthefinancialassets.

IftheGroupneithertransfersnorretainsalmostalltherisksandrewardsintheownershipofthefinancialassetsanddoesnotrelinquishcontroloverthefinancialassets,thefinancialassetsshallberecognizedaccordingtothedegreeofcontinuousinvolvementofthefinancialassetstransferred,andtherelevantliabilitiesshallberecognizedaccordingly.DegreeofcontinuousinvolvementofthefinancialassetstransferredistheriskleveloftheGroupduetochangesinvalueofsuchfinancialassets.

Incasewholetransferoffinancialassetssatisfiesthederecognitioncondition,thedifferencebetweenthesumofthebookvalueoffinancialassetstransferredandconsiderationreceivedduetothetransferandthesumofchangesinfairvalueoriginalrecognizedthroughothercomprehensiveincomeshallberecognizedthroughcurrentprofitsandlosses.

Incasepartialtransferoffinancialassetssatisfiesthederecognitioncondition,bookvalueofthefinancialassetstransferredshallbeamortizedbetweenthederecognitionpartandthepartwithoutderecognitionaccordingtotheirownfairvalue,andthedifferencebetweenthesumoftheconsiderationreceivedforthetransferandaccumulatedamountofthechangeinfairvaluetobeamortizedtoderecognitionpartandoriginallyrecognizedthroughothercomprehensiveincome,andtheforegoingbookvalueamortizedshallberecognizedthroughcurrentprofitsandlosses.

Forfinancialassetssoldwithrightofrecourse,ortotransferfinancialassetsbyendorsement,theGroupneedstodeterminewhetheralmostallrisksandrewardsrelatedtoownershipofsuchfinancialassetshavebeentransferred.Ifalmostallrisksandrewardsrelatedtotheownershipofsuchfinancialassetsaretransferredtothetransferee,derecognitionofsuchfinancialassetsshallbeconducted;derecognitionofsuchfinancialassetsshouldnotbeconductediftherisksandrewardsrelatedtotheownershipofsuchfinancialassetsarereserved;iftherisksandrewardsrelatedtotheownershipofsuchfinancialassetsarenottransferrednorreserved,itneedstodeterminewhethertheCompanykeepsitscontroloversuchassetsandmakeaccountingtreatmentbasedonprinciplesasdescribedintheforegoingparagraphs.

(4)Derecognitionoffinancialliabilities

Incasethecurrentobligationsoffinancialliabilities(orpartofthefinancialliabilities)havebeenterminated,theGroupwillcarryoutderecognitionofsuchfinancialliabilitiesorpartofthem.IncasetheGroup(borrower)signsanagreementwiththedebtortoreplacetheoriginalfinancialliabilitiesbymeansofbearingnewfinancialliabilities,andcontractclausesrelatedtothenewfinancialliabilitiesandoriginalfinancialliabilitiesaredifferentinessence,it'srequiredtocarryoutderecognitionoforiginalfinancialliabilitiesandrecognizethenewfinancialliabilitiessimultaneously.IftheGroupsubstantiallymodifiesthecontracttermsandconditionsofthe

originalfinancialliability(orpartofit),theoriginalfinancialliabilityisderecognizedandanewfinancialliabilityisrecognizedinaccordancewiththerevisedtermsandconditions.Incasederecognitioniscarriedoutforthewholeorpartoffinancialliabilities,thedifferencebetweentheirbookvalueandtheconsiderationpaid(includingnon-cashassetstransferredoutorliabilitiesassumed)shallbeincludedbytheGroupinthecurrentprofitsandlosses.

(5)Offsetoffinancialassetsandfinancialliabilities

IncasetheGrouphasthelegalrightofoffsettingthefinancialassetsandfinancialliabilitiesrecognizedandsuchlegalrightisexecutablenow,andtheGroupplanstocarryoutsettlementbynetamountorrealizethefinancialassetsandpayoffthefinancialliabilitiessimultaneously,thenetamountaftermutualoffsetofsuchfinancialassetsandfinancialliabilitiesshallbesetoutinthebalancesheet.Otherwise,financialassetsandfinancialliabilitiesshallbesetoutinthebalancesheetrespectivelyandwillnotbeoffsetmutually.

(6)Equityinstruments

AnequityinstrumentreferstoacontractthatcanprovetheownershipofresidualinterestinassetsaftertheGroupdeductsallliabilities.TheGroup'sissuing(includingrefinancing),repurchase,saleorcancellationofequityinstrumentsaretreatedaschangesinequity,andtransactioncostsrelatedtoequitytransactionsaredeductedfromequity.TheGroupdoesnotdeterminechangesinfairvalueofequityinstruments.

Distributionofdividends(including"interest"frominstrumentsclassifiedasequityinstruments)fromtheequityinstrumentsduringthedurationoftheGroupistreatedasprofitdistribution.

11.Financialassetsimpairment

Suporneedstorecognizethefinancialassetswithimpairmentlossesasfinancialassetmeasuredatamortizedcostsanddebttoolsatfairvaluethroughothercomprehensiveincomes,includingmainlynotesreceivable,accountsreceivable,receivablesfinancing,otherreceivablesandotherdebtinvestments.Moreover,forcontractassetsandsomefinancialguaranteecontracts,theimpairmentprovisionshallbeaccruedandthecreditimpairmentlossshallberecognizedpursuanttotheaccountingpolicysetforthherein.

(1)Recognitionmethodofimpairmentprovision

TheaboveitemsareaccruedforimpairmentprovisionandcreditimpairmentlossesbytheGroupinaccordancewithapplicableexpectedcreditlossmeasuremethods(generalorsimplified)basedontheexpectedcreditloss.

Expectedcreditlossreferstotheweightedaverageofcreditlossesoffinancialinstrumentsweightedbytheriskofdefault.CreditlossreferstothedifferencebetweenallcontractualcashflowsdiscountedaspertheoriginaleffectiveinterestrateandreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheGroup,namely,thepresentvalueofashortageofcash.Wherein,thepurchasedorunderlyingfinancialassetswithcreditimpairmentoftheGroupshallbediscountedaspereffectiveinterestratebasedoncreditadjustment.

Thegeneralmethodformeasuringexpectedcreditlossisasfollows,theGroupevaluateswhethercreditriskoffinancialassets(includingcontractassetsandotherapplicableitems,thesamebelow)hasremarkablyincreasedafterinitialrecognitiononeachbalancesheetdate.Incaseofcreditriskhavingremarkablyincreasedafterinitialrecognition,theGroupwillmeasurelossprovisionaspertheamountequivalenttoexpectedcreditlossintheentireduration;incaseofcreditriskfailingtoremarkablyincreaseafterinitialrecognition,theGroupwillmeasurelossprovisionaspertheamountequivalenttoexpectedcreditlossinthenext12months.Atthetimeofevaluatingexpectedcreditloss,theGroupconsidersallreasonableandwell-foundedinformation,includingforward-lookinginformation.

Whentheexpectedcreditlossismeasured,thelongestperiodtobeconsideredbytheGroupisthelongestcontractperiodwhentheenterprisefacesthecreditrisk(includingconsideringtherenewaloption).Theexpectedcreditlossoftheentiredurationreferstotheexpectedcreditlossarisingfromallpossibleeventsofdefaultregardingfinancialinstrumentoccurringduringtheentireexpectedduration.Expectedcreditlossinthenext12monthsreferstoexpectedcreditlossresultingfromdefaultoffinancialinstrumentslikely

occurringwithin12monthsafterthebalancesheetdate(expecteddurationiftheexpecteddurationoffinancialinstrumentsislessthan12months)whichispartofexpectedcreditlossduringtheentireduration.Forthefinancialinstrumentwithalowercreditriskonthebalancesheetdate,theGroupassumesthatitscreditriskshavenotincreasedsignificantlysincetheinitialrecognition,andmeasuresthelossprovisionsaccordingtotheexpectedcreditlossesofthefuture12months.

(2)Standardforjudgingwhethercreditriskhasremarkablyincreasedafterinitialrecognition.Incasethatprobabilityofdefaultofonefinancialassetconfirmedonthebalancesheetdateintheexpecteddurationisobviouslyhigherthanthatconfirmedatthemomentofinitialrecognitionintheexpectedduration,itmeanscreditriskofsuchfinancialassetremarkablyincreases.Thechangesofdefaultriskwithinthenext12monthsareadoptedbytheGroupotherthanspecialcasesasreasonableestimateintheentireduration,ensuringwhetherthecreditriskhasincreasedsignificantlysincetheinitialrecognition.

(3)Combinatorialmethodofappraisingfuturecreditriskbasedonportfolio

TheGroupappraisesthecreditriskofthefinancialassetitemofsignificantlydifferentcreditrisks,suchas:receivablesfromtherelatedparties;receivablesdisputedwiththeoppositesideorinvolvinglitigationorarbitration;therehavebeenobvioussignsshowingthatthedebtorpossiblyisnotabletoperformtherepaymentobligationsofreceivableamounts,etc.

Exceptfinancialassetsofindividualcreditriskassessment,theGroupdividesfinancialassetsintodifferentgroupsbasedonthecommonriskcharacteristicsandappraisescreditrisksbasedonportfolio.

(4)Accountingtreatmentmethodoffinancialassetsimpairment

TheexpectedcreditlossesofallkindsoffinancialassetsarecalculatedbytheGroupattheendoftheduration.Iftheestimatedcreditlossisgreaterthanthebookvalueofthecurrentimpairmentprovision,thedifferenceisrecognizedasimpairmentloss;ifnot,itisrecognizedasimpairmentprofits.

(5)Determinationmethodofcreditlossesofallkindsoffinancialassets

(a)Accountsreceivableandcontractassets

Foraccountsreceivableandcontractassetnotinvolvingsignificantfinancingpart,Suporalwayscalculatesthelossprovisionastheamountofexpectedcreditlosswithintheentireduration.

Foraccountsreceivableandcontractassetinvolvingsignificantfinancingpart,Suporalwayscalculatesthelossprovisionastheamountofexpectedcreditlosswithintheduration.

Theotheraccountsreceivablesotherthanindividualcreditriskassessmentaredividedintodifferentportfoliosbasedontheircreditriskcharacteristics:

Accountsreceivable:

(b)Otherreceivables

TheimpairmentlossismeasuredbytheGroupinaccordancewiththeamountofexpectedcreditlossequivalenttothatwithinthenext12monthsortheentiredurationbasedonwhetherthecreditriskofotherreceivableshasincreasedsignificantlysincetheinitialrecognition.Theotherreceivablesotherthanindividualcreditriskassessmentaredividedintodifferentportfoliosbasedontheircreditriskcharacteristics:

Portfolio1:ageportfolio

（c）Notesreceivableandaccountsreceivablefinancing

12.Receivablesfinancing

Thenotesreceivableandaccountsreceivableatfairvaluethroughothercomprehensiveincomesarelistedasreceivablesfinancingwithatermoflessthanoneyear(includingoneyear)fromtheinitialrecognition;SeetheNoteV.10"FinancialInstruments"and11"FinancialAssetsImpairments"forrelevantaccountingpolicies.

13.Inventories

(1)Category

Inventorymainlyincludesrawmaterials,unfinishedproducts,finishedproducts,lowvalueconsumablesandpackingmaterials.

(2)Valuationmethodfortheacquisitionanddistributionofinventory

Wheninventoriesareacquired,theyarepricedatactualcosts.Inventorycostsincludeprocurementcosts,processingcosts,andothercosts.Wheninventoriesareusedanddistributed,thepriceiscalculatedbytheone-offweightedaveragemethodattheendofamonth.

(3)Inventorysystemisperpetualinventorysystem

(4)Amortizationmethodforlowvalueconsumablesandpackingmaterials

Lowvalueconsumablesareamortizedbytheone-offwrite-offmethodoramortizedovertwoyears;Packagingmaterialsareamortizedusingaone-timewriteoffmethod.

(5)Methodofrecognizingnetrealizablevalueandaccruingdepreciationreserveofinventories

Atthebalancesheetdate,theinventoryshallbemeasuredaccordingtothecostornetrealizablevalue,subjecttothelowerone.

Netrealizablevaluereferstotheamountoftheestimatedsellingpriceofinventoriesdeductedbyestimatedcoststobeincurreduponcompletion,estimatedsalesexpensesandrelatedtaxesindailyactivities.Fortherawmaterialsheldforproduction,thenetrealizablevalueshallbemeasuredbasedonthenetrealizablevalueofthefinishedproductstheyproduce.Fortheinventoriesheldforexecutingthesalescontractorlaborcontract,thenetrealizablevalueshallbemeasuredbasedonthecontractprice.Whentheamountofholdinginventoryismorethantheorderingamountinsalescontract,thenetrealizablevalueoftheexcessinventoryshallbemeasuredbasedongeneralsalesprice.Thedifferencebetweenthecostcalculatedbyinventorycategoryanditsnetrealizablevalueshallberecognizedasaprovisionforinventoryimpairmentandrecognizedinthecurrentperiod'sprofitandloss.

14.Contractassets

TheGroupliststhecustomer'sunpaidcontractconsiderationascontractassetsinthebalancesheet,underwhichtheGrouphasfulfilleditsperformanceobligationsinaccordancewiththecontract,anditdoesnothavetherighttocollectpaymentsfromcustomersunconditionally(thatis,onlydependingonthepassageoftime).Contractassetsandliabilitiesunderthesamecontractarelistedinnetamount,andthoseunderdifferentcontractsshallnotbeoffset.

Forthedeterminationandaccountingtreatmentmethodsofexpectedcreditlossesofcontractassets,pleaserefertoNoteV.11"FinancialAssetsImpairment".

15.Held-for-saleassetsanddisposalgroups

(1)heldforsaleNoncurrentassetsordisposalgroups

IncasetheGroupmainlyrecoversthebookvaluebyselling(includingnon-monetaryassetsexchangeofcommercialessence,thesamebelow)ratherthanusinganon-currentassetordisposalgroupcontinuously,itwillbeclassifiedasheld-for-salecategory.Specificstandardreferstomeetingthefollowingconditionsatthesametime:onenon-currentassetordisposalgroupcanbeimmediatelysoldunderthecurrentsituationpursuanttotheconventionforsellingsuchassetordisposalgroupinsimilartransaction;theGrouphasmadearesolutionaboutsaleplanandgotcertainofpurchasecommitment;it'spredictedthatthesalewillbecompletedwithinoneyear.Disposalgroupreferstoagroupofassetsthatwillbedisposedtogetherasawholebysellingorothermeansinatransactionandtheliabilitiesdirectlyrelatedtotheseassetsandtransferredinthetransaction.IncasetheassetgrouporassetgroupportfoliowherethedisposalgroupbelongshasamortizedthegoodwillacquiredinenterprisemergeraccordingtoAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairment,thedisposalgroupshallincludethegoodwillamortizedtoit.

Depreciationoramortizationwillnotbewithdrawnforheld-for-salenon-currentassetsornon-currentassetsinthedisposalgroup,andtheinterestofliabilitiesinheld-for-saledisposalgroupandotherexpensesshallberecognizedcontinuously.

Whenthenon-currentassetsordisposalgroupcan'tbeclassifiedasheld-for-salecategory,theGroupwillnolongercontinuetoclassifythemasheld-for-saleorremovenon-currentassetsfromtheheld-for-saledisposalgroupandmeasurethemaccordingtothefollowingtwoitems,subjecttothelowerone:①bookvaluebeforetheassetsareclassifiedasheld-for-salecategory,namely,theamountaftertheadjustmentiscarriedoutaccordingtothedepreciation,amortizationorimpairment,etc.thatshallberecognizedintheconditionthattheassetsaresupposednottobeclassifiedasheld-for-salecategory;②recoverableamount.

(2)Terminationofoperations

ThegroupwilldefinetheterminationofoperationsasaseparatelyidentifiablecomponentthatmeetsoneofthefollowingconditionsandhasbeendisposedofbytheGrouporclassifiedasheldforsale:

-Thiscomponentrepresentsanindependentmainbusinessoraseparatemainoperatingarea;

-Thiscomponentispartofarelatedplantodisposeofanindependentmainbusinessoraseparatemainoperatingarea;

-Thiscomponentisasubsidiaryacquiredspecificallyforresale.

Thegroupseparatelypresentsthecontinuingoperationsprofitandlossandtheterminationoperationsprofitandlossinthecurrentprofitandlossstatement,andrepresentstheinformationpreviouslyreportedascontinuingoperationsprofitandlossastheterminationoperationsprofitandlossforcomparableaccountingperiodsintheprofitandlossstatementforthecomparativeperiod.

16.Long-termequityinvestment

Thelong-termequityinvestmentmentionedinthispartreferstothelong-termequityinvestmentofwhichtheGrouphascontrolright,commoncontrolrightorsignificantimpactontheinvestedunits.Long-termequityinvestmentsthattheGroupdoesnothavecontrol,commoncontrolorsignificantimpactontheinvestedunitareaccountedforasfinancialassetsatfairvaluethroughcurrentprofitsandlosses.Ifsuchassetsarenotnon-transactional,theGroupmayspecifythesecapitalsasmeasuredatthefinancialassetsatfairvaluethroughothercomprehensiveincomesattheinitialrecognition.SeeNoteV.10"FinancialInstruments"fordetails.

CommoncontrolreferstocommoncontrolonacertainarrangementaccordingtorelatedprovisionsbytheGroupandrelatedactivitiesofthearrangementcanbedecidedonlyaftertheconsentoftheparticipantsharingthecontrolright.SignificantimpactreferstotheGroup'spoweronparticipatinginthedecision-makingoffinancialandoperatingpoliciesoftheinvestedunit,butitcan'tcontroltheformulationofthesepoliciesorcontroltheformulationcommonlywithotherparty.Determinationofinvestmentcost

(1)Determinationofinvestmentcosts

Thelong-termequityinvestmentobtainedfromtheenterprisemergernotunderthesamecontrolshallbeusedastheinitialinvestmentcostoflong-termequityinvestmentaccordingtothemergercostonthepurchasedate.Themergercostincludesthesum

(2)Methodsforthesubsequentmeasurementandtheprofitandlossconfirmation

Long-termequityinvestmentsthathavecommoncontrol(exceptforjointoperators)orsignificantimpactontheinvestedunitareaccountedbyequitymethod.Besides,theCompany'sfinancialstatementadoptsthecostmethodtoaccountthelong-termequityinvestmentthatcanbecontrolledbytheinvestedunit.(a)Long-termequityinvestmentsunderthecostmethod

Whenthecostmethodisadoptedforaccounting,long-termequityinvestmentispricedattheinitialinvestmentcost,andthecostoflong-termequityinvestmentshallbeadjustedwhentheinvestmentisaddedorrecovered.Thecurrentinvestmentincomesshallberecognizedbythecashdividendsorprofitsannouncedandissuedbytheinvestedunit,exceptfortheactualpricepaidwhentheinvestmentisobtainedorthecashdividendsorprofitswhichhavebeendeclaredbutnotissuedintheconsideration.(b)Long-termequityinvestmentsundertheequitymethod

Astolong-termequityinvestmentscheckedbyequitymethod,incasetheinitialinvestmentcostismorethanthesharesoffairvalueofidentifiablenetassetsoftheinvestedunitthatshallbeenjoyedduringtheinvestment,initialinvestmentcostofthelong-termequityinvestmentsshallnotbeadjusted;incasetheinitialinvestmentcostislessthanthesharesoffairvalueofidentifiablenetassetsoftheinvestedunitthatshallbeenjoyedduringtheinvestment,thedifferenceshallberecognizedthroughcurrentprofitsandlossesandthecostoflong-termequityinvestmentsshallbeadjustedsimultaneously.

17.Fixedassets

(1)Recognitionconditions

Fixedassetsrefertotangibleassetsheldforproducingcommodities,providinglaborservice,leasingoroperationmanagementwithservicelifeofmorethan1fiscalyear.ThefixedassetscanbeconfirmedonlywhentherelevanteconomicinterestsarepossibletoflowintotheGroupanditscostscanbemeasuredreliably.Theinitialmeasurementoffixedassetsshallbecarriedoutaccordingtothecostandconsideringtheexpectedinfluenceofthediscardexpenses.

(2)Depreciationmethod

TheexpectednetresidualvaluereferstotheexpectedamountthattheGroupmayobtainfromthecurrentdisposaloffixedassetsafterdeductingtheexpecteddisposalexpensesattheexpirationofitsexpectedservicelife.

(3)Impairmenttestmethodandcountingandwithdrawingmethodoftheimpairmentprovisionoffixedassets

SeemoredetailsabouttheimpairmenttestmethodandthewithdrawingmethodofimpairmentprovisionoffixedassetsinNoteV.22"ImpairmentofLong-termAssets".

(4)Otherremarks

Thesubsequentexpendituresrelatedtofixedassetsshallberecognizedthroughfixedassetscost,andthederecognitionofthebookvalueofthesubstitutionpartshallbecarriedoutifeconomicbenefitsrelatedtosuchfixedassetsmayflowinanditscostcanbereliablymeasured.Othersubsequentexpenditures,exceptforthis,shallberecognizedthroughcurrentprofitsandlossesonceoccurred.

Asforeachcomponentconstitutingfixedassets,incasethattheyhavedifferentservicelifeorprovideeconomicinterestforthegroupbydifferentwaysandapplytodifferentratesofdepreciationanddepreciationmethods,theGroupconfirmseachcomponentassinglefixedasset,respectively.

Whenthefixedassetsareunderdisposalstateoritisestimatedthatnoeconomicbenefitscanbeproducedthroughusageordisposal,suchfixedassetisconfirmedtobederecognized.Thedifferenceoftheamountleftasthebookvalueandrelevanttaxesaredeductedfromthedisposalrevenueobtainedfromthesale,transfer,discardordamageofthefixedassetshallberecognizedthroughcurrentprofitsandlosses.

TheGroupshallreviewtheservicelife,expectednetresidualvalueanddepreciationmethodofthefixedassetsatleastbytheendoftheyear.Incaseofanychange,itshallbedeemedaschangesinaccountingestimate.

18.Constructioninprogress

Thecostofconstructioninprogressshallbeconfirmedasperactualengineeringexpenditures,includingvariousprojectexpendituresunderconstruction,capitalizedborrowingexpenseformakingtheprojectreachtheexpectedserviceablecondition,andotherrelevantcosts.Theconstructioninprogressshallbetransferredtothefixedassetswhenitreachestheexpectedserviceablecondition.

Standardandtimespotofconvertingconstructioninprogressdisclosedpercategorytofixedassets:

SeemoredetailsabouttheimpairmenttestmethodandthewithdrawingmethodofimpairmentprovisionofconstructioninprogressinNoteV.22"ImpairmentofLong-termAssets".

TheincomeandcostoftheGroup'sexternalsalesofproductsorby-productsproducedbeforethefixedassetsreachtheexpectedserviceablecondition,thecompanyshouldcarryoutaccountingtreatmentseparatelyaccordingtoAccountingStandardsforBusinessEnterprisesNo.14-RevenueandAccountingStandardsforBusinessEnterprisesNo.1-Inventory,whichshallberecognizedthroughcurrentprofitsandlosses.

19.Borrowingexpenses

20.Intangibleassets

(1)Intangibleassets

Intangibleassetsrefertotheidentifiablenon-monetaryassetsthathavebeenownedorcontrolledbytheGroupandhavenophysicalform.

Theinitialmeasurementofintangibleassetsshallbeconductedaccordingtoitscosts.ExpendituresrelatedtointangibleassetsshallberecognizedthroughcostofintangibleassetsiftherelevanteconomicbenefitsmayflowintheGroupanditscostcanbereliablymeasured.Otherprojects'expenditures,exceptforthis,shallberecognizedthroughcurrentprofitsandlossesonceoccurred.

Landuserightacquiredisusuallycalculatedasanintangibleassets.Asforbuildingssuchasself-developedandconstructedworkshops,therelatedlanduserightexpenditureandconstructioncostofthebuildingsshallbecalculatedasintangibleassetsandfixedassetsrespectively.Asforpurchasedbuildingsandstructures,therelatedpricesaredistributedbetweenlanduserightandthebuildings.Ifitisdifficulttodistributethemreasonably,allofthemshallbedisposedasfixedasset.

Asforintangibleassetswithalimitedservicelife,theaccumulativeamountafterdeductingtheexpectednetresidualvalueandtheaccruedimpairmentprovisionswithoriginalvaluesincetheserviceabledate,itisamortizedwiththestraight-linemethodwithintheexpectedservicelife.Intangibleassetswithundeterminedservicelifewillnotbeamortized.

Theservicelife,determinationbasis,andamortizationmethodofvariousintangibleassetsare::

Landuseright

Trademarkuseright

Attheendofeachperiod,theservicelifeofintangibleassetswithlimitedservicelifeandtheamortizationmethodforthemwillberechecked.Changesofthemwillberegardedaschangesofaccountingestimate.Inaddition,theservicelifeofintangibleassetswithundeterminedservicelifewillberechecked.Ifthereisevidencemanifestingthatanintangibleassetcanbringeconomicbenefitsfortheenterprisewithinaforeseeableperiod,thenitsservicelifewillbeestimatedanditwillbeamortizedaccordingtotheamortizationpolicyforintangibleassetswithlimitedservicelife.

(2)R&Dexpenditure

ExpendituresontheinternalR&DitemsoftheGrouparedividedintoresearchexpenditureanddevelopmentexpenditure.

Researchexpenditureisrecognizedthroughcurrentprofitsandlossesatthetimeofoccurrence.

Developmentexpenditurethatcanmeetthefollowingconditionswillberecognizedasintangibleassets,whilethosecannotmeetwillberecognizedthroughcurrentprofitsandlosses.-Completetheintangibleassetsoastomaketheuseorsaleofittechnicallyfeasible;-Havetheintentiontocompletetheintangibleassetanduseorsellit;-Thewaythatanintangibleassetgenerateseconomicbenefitsistocertifythattheproductsproducedwiththeintangibleassethasmarketortheintangibleassetitselfhasmarket,ortocertifyitsusabilitywhenitwillbeusedinternally;-Thereareenoughtechnology,financialresourcesandotherresourcestosupportfinishingthedevelopmentofanintangibleasset,anditiscapableofusingorsellingthisintangibleasset;-Expenditurewithinthedevelopmentstageofthisintangibleassetcanbemeasuredreliably.Ifitisunabletodistinguishtheresearchexpenditurefromdevelopmentexpenditure,bothR&Dexpenditureswillberecognizedthroughcurrentprofitsandlosses.

(3)ImpairmenttestmethodandcountingandwithdrawingmethodoftheimpairmentprovisionofintangibleassetsSeemoredetailsabouttheimpairmenttestmethodandthewithdrawingmethodofimpairmentprovisionofintangibleassetsinNoteV.22"ImpairmentofLong-termAssets".

21.Long-termunamortizedexpense

Long-termunamortizedexpensesareexpensesthathaveoccurredbutshallbeborneduringthereportingperiodandsubsequentperiodswithasharingperiodofmorethanoneyear.Long-termunamortizedexpensesoftheGroupmainlyincludeimprovementexpenditureoffixedassetsleasedforoperation.Long-termunamortizedexpensesareamortizedbythestraight-linemethodovertheexpectedbenefitperiod.

22.Impairmentoflong-termassets

Asforfixedassets,constructioninprogress,right-of-useassets,intangibleassetswithalimitedservicelife,investmentpropertiesmeasuredbycostmeasurement,long-termunamortizedexpenses,andnon-currentandnon-financialassetssuchasthelong-termequityinvestmentandgoodwillofsubsidiaries,jointventuresandassociatedenterprises,theGroupshalldeterminewhetherthereisanysignofimpairmentonthebalancesheetdate.Iftherearesignsofimpairment,therecoverableamountshallbeestimatedandimpairmenttestshallbecarriedout.Goodwill,intangibleassetswithundeterminedservicelifeandintangibleassetsthathavenotreachedtheserviceablestate,whetherthereisanysignofimpairment,shallbesubjecttoimpairmenttesteveryyear.

Forthegoodwillseparatelypresentedinthefinancialstatements,duringtheimpairmenttest,thebookvalueofgoodwillshallbeapportionedtotheassetgrouporassetgroupportfolioexpectedtobebenefitedfromthesynergisticeffectofenterprisemerger.Ifthetestresultsshowthattherecoverableamountoftheassetgrouporassetgroupportfoliocontainingtheapportionedgoodwillislowerthanitsbookvalue,thecorrespondingimpairmentlossshallberecognized.Theamountofimpairmentlossfirstlyoffsetsthebookvalueofgoodwillapportionedtotheassetgrouporassetgroupportfolio,andthenoffsetsthebookvalueofotherassetsinproportionaccordingtotheproportionofthebookvalueotherthangoodwillintheassetgrouporassetgroupportfolio.

Oncetheabove-mentionedassetimpairmentlossesarerecognized,thepartofwhichcanberecoveredshallnotbereversedinsubsequentperiods.

23.Contractliabilities

ContractliabilitiesrefertotheobligationoftheGrouptotransfercommoditiestocustomersforthereceivedorreceivableconsiderationfromcustomers.IntheeventthatthecustomerhaspaidthecontractualconsiderationortheGrouphasobtainedtheunconditionalcollectionrightbeforeittransfersthecommoditiestocustomers,theGroupshallpresentthereceivedorreceivableaccountascontractliabilitieswithregardtotheactualpaymentbycustomersandtheduepayment,whicheverhappensearlier.Contractassetsandliabilitiesunderthesamecontractarelistedinnetamount,andthoseunderdifferentcontractsshallnotbeoffset.

24.Employeeremuneration

TheGroup'semployeeremunerationmainlyincludesshort-termemployeeremuneration,post-employmentbenefits,terminationbenefitsandotherlong-termemployeewelfare.Including:

Short-termemployeeremunerationmainlyincludessalary,bonus,allowanceandsubsidy,employeebenefitsexpense,medicarepremium,maternitypremium,occupationalinjuriespremium,housingaccumulationfund,laborunionexpenditure,personneleducationfund,non-monetarywelfare,etc.DuringtheaccountingperiodinwhichtheGroup'semployeesprovideservicesfortheGroup,actualshort-termemployeeremunerationincurredshallberecognizedastheliabilitiesandrecognizedthroughcurrentprofitsandlossesorrelevantassetcosts.Andthenon-monetarywelfareshallbemeasuredatfairvalue.

Post-employmentbenefitmainlyincludesbasicendowmentinsurance,unemploymentinsurance,andannuity.Theplanofpost-employmentbenefitincludesthedefinedcontributionplan.Incasethatthedefinedcontributionplanisadopted,correspondingamountwhichshallbedepositedwillberecognizedthroughrelevantassetcostsorcurrentprofitsandlossesatthetimeofoccurrence.

Laborrelationwithemployeesshallbecancelledbeforetheemployee'slaborcontractexpires,orsuggestionongivingcompensationshallbeproposedforthepurposeofencouragingemployeestovoluntarilyacceptdownsizing.WhentheGroupcannotunilaterallywithdrawterminationbenefitsprovidedforcancellationoflaborrelationplanordownsizingsuggestionandonthedate

whentheGroupconfirmsthecostrelatedtorestructuringinvolvingpaymentofterminationbenefits,whicheveristheearlier,theemployeeremunerationliabilitiescausedbyterminationbenefitsshallberecognizedthroughcurrentprofitsandlosses.However,ifitisexpectedthattheterminationbenefitscannotbefullypaidwithintwelvemonthsaftertheannualreportingperiodisover,itshallbehandledaccordingtootherlong-termemployeeremuneration.Thesameprincipleforterminationbenefitsdescribedaboveshallbeadoptedfortheplanofemployeeinternalretirement.StaffsalaryandsocialinsurancepremiumtobepaidbytheGroupfortheearlyretiredemployeefromthedateofstoppingprovidingservicestothedateofnormalretirementarerecognizedthroughcurrentprofitsandlosses(terminationbenefit)iftheestimatedliabilitiesrecognitionconditionsaremet.

25.Estimatedliabilities

Iftheobligationrelatedtocontingenciessatisfiesthefollowingconditionsatthesametime,theGroupshallrecognizeitastheestimatedliabilities:①ThisobligationisthecurrentobligationundertakenbytheGroup;②Performanceofthisobligationmaymakeeconomicbenefitsflowoutoftheenterprise;③Amountofthisobligationcanbereliablymeasured.Theestimatedliabilitiesareinitiallymeasuredbasedonthebestestimateoftheexpensesrequiredtofulfilltherelevantcurrentobligations.Forthosewithsignificantimpactonthetimevalueofcurrency,estimatedliabilitiesaredeterminedbasedonthediscountedamountofexpectedfuturecashflows.Whendeterminingthebestestimate,theGroupcomprehensivelyconsidersfactorssuchasrisk,uncertainty,andtimevalueofmoneyrelatedtocontingencies.Thenecessaryexpenditurehasacontiguousrange,andwithinthisrange,allkindsofresultshavethesamepossibilitytooccur.Theoptimalestimateisdeterminedaccordingtothemedianofthisrange.Inothercircumstances,theoptimalestimateistreatedasbelow:

-Ifthecontingencyinvolveswithasingleitem,thentheoptimalestimatewillbedeterminedbasedontheamountthatismostlikelytooccur.-Ifthecontingencyinvolveswithseveralitems,thentheoptimalestimatewillbedeterminedbasedonallpossibleresultsandtheirprobabilities.Thegroupreviewsthebookvalueofestimatedliabilitiesonthebalancesheetdateandadjuststhebookvaluebasedonthecurrentbestestimate.

(1)Losscontract

Thelosscontractreferstoacontractwhoseperformanceofthecontractualobligationswillinevitablyincurcostsinexcessoftheexpectedeconomicbenefits.Whenanenforceablecontractbecomesalosscontract,forwhichtheliabilitycanconformtotheaforesaidestimatedliabilitiesrecognitionconditions,confirmtheparttheestimatedlossesofthecontractsurpasstheconfirmedimpairmentloss(ifany)oftheunderlyingassetinthecontractasestimatedliability.

(2)Restructuringobligations

Itshalldeterminetheestimatedliabilitiesamountaccordingtothedirectexpendituresrelatedtotherestructuringwhichhasdetailed,formalandpubliclystatedrestructuringplanandwhichareinlinewiththerecognitionconditionsoftheaforesaidestimatedliabilities.Therestructuringobligationrelatedtopartially-soldbusinesswillberecognizedtobetheassociatedobligationonlywhentheGrouppromisestosellpartialbusinesses(namely,signsthebinding-forcesalesagreement).

26.Share-basedpayment

(1)Accountingtreatmentofshare-basedpayment

Ashare-basedpaymentisatransactionthatgrantstheequityinstrumentsorassumesaliabilitydeterminedonthebasisoftheequityinstrumentsinordertoobtainservicesfromemployeesorotherparties.Share-basedpaymentsaredividedintoequity-settledshare-basedpaymentsandcash-settledshare-basedpayments.(a)Equity-settledshare-basedpayment

Equity-settledshare-basedpaymentsinexchangeforservicesprovidedbyemployeesaremeasuredatthefairvaluewiththeequityinstrumentsgrantedtotheemployeesatthegrantdate.Theamountofthefairvalueisrecognizedthroughrelevantcostorexpensebasedontheoptimalestimateofthenumberofvestingequityinstrumentsincaseofcompletingtheservicewithinthewaitingperiodormeetingtherequiredperformanceconditions;whenthevestingrightisgrantedimmediately,therelevantcostorexpenseisincludedonthegrantdateaccordingtothestraight-linemethod,andthecapitalreservesshallbeincreasedaccordingly.

Oneachbalancesheetdateduringthewaitingperiod,theGroupmakestheoptimalestimatebasedonthelatestinformationsuchasthechangeinthenumberofemployeeswithvestingrights,andcorrectsthenumberofequityinstrumentsthatareexpectedtobevested.Theimpactoftheaboveestimatesisrecognizedthroughcurrentrelevantcostorexpense,andthecapitalreservesshallbeadjustedaccordingly.

Inthecaseofequity-settledshare-basedpaymentsinexchangeforotherparties'services,ifthefairvalueofotherparties'servicescanbereliablymeasured,thefairvalueofotherparties'servicesismeasuredatthefairvalueonthedateofacquisition;ifthefairvalueofotherparties'servicescannotbereliablymeasured,butthefairvalueofequityinstrumentscanbemeasuredreliably,itshallbemeasuredatthefairvalueoftheequityinstrumentontheacquisitiondate,andisrecognizedthroughrelevantcostorexpense,andincreasestheshareholders'equitiesaccordingly.(b)Cash-settledshare-basedpayment

Thecash-settledshare-basedpaymentismeasuredatthefairvalueoftheliabilitiesdeterminedbytheGroupbasedonsharesorotherequityinstruments.Ifthevestingrightisgrantedimmediatelyafterthegrant,therelevantcostorexpensewillbeincludedonthegrantdate,andtheliabilitiesincreasedaccordingly;iftheservicewithinthewaitingperiodmustbecompletedortherequiredperformanceconditionsaremet,thefairvalueoftheliabilitiesassumedbytheGroupisbasedontheoptimalestimateofthevestingrightsoneachbalancesheetdateofthewaitingperiod.Theservicesobtainedinthecurrentperiodarerecognizedthroughcostorexpense,andtheliabilitiesareincreasedaccordingly.

Thefairvalueoftheliabilityisre-measuredatthebalancesheetdateandthesettlementdaybeforethesettlementoftherelevantliabilities,andthechangeshallberecognizedthroughcurrentprofitsandlosses.

(2)Accountingtreatmentrelatedtothemodificationandterminationofshare-basedpaymentplan

WhentheGroupmodifiestheshare-basedpaymentplan,ifthemodificationincreasesthefairvalueoftheequityinstrumentsgranted,theincreaseinthefairvalueoftheequityinstrumentsisrecognizedaccordingly.Theincreaseofthefairvalueofequityinstrumentsreferstothedifferencebetweenthefairvalueoftheequityinstrumentsbeforeandafterthemodificationonthemodificationday.Ifthemodificationreducesthetotalfairvalueoftheshare-basedpaymentoradoptsothermethodsthatarenotconducivetotheemployee,theserviceobtainedwillcontinuetobeaccountedfor,asifthechangehasneveroccurred,unlesstheGroupcancelssomeoralloftheequityinstrumentsgranted.

Duringthewaitingperiod,ifthegrantedequityinstrumentiscancelled,theGroupwillcancelthegrantedequityinstrumentasanacceleratedexercise,andtheamounttoberecognizedintheremainingwaitingperiodwillbeimmediatelyrecognizedthroughcurrentprofitsandlosses,andthecapitalreservesshallberecognizedatthesametime.Iftheemployeeorotherpartycanchoosetomeetthenon-vestingconditionsbutfailstomeetinthewaitingperiod,theGroupwilltreatitasacancellationoftheequityinstrument.

(3)Accountingtreatmentoftheshare-basedpaymenttransactionsinvolvingtheGroupandtheshareholdersoractualcontrollersoftheCompany

Forshare-basedpaymenttransactioninvolvingtheGrouportheCompany'sshareholdersoractualcontroller,ifeithersettlemententerpriseorenterpriseacceptingserviceisinsidetheGrouporoutsidetheGroup,theaccountingtreatmentshallbeconductedintheconsolidatedfinancialstatementsoftheGroupaccordingtothefollowingregulations:

-Wherethesettlemententerprisemakescalculationbyitsownequityinstruments,theshare-basedpaymenttransactionshallbetreatedastheequity-settledshare-basedpayment;inaddition,itshallbehandledasacash-settledshare-basedpayment.

-Ifthesettlemententerpriseisaninvestorofaenterpriseacceptingservice,itshallberecognizedasthelong-termequityinvestmentoftheenterpriseacceptingserviceaccordingtothefairvalueoftheequityinstrumentatthegrantdateorthefairvalueoftheliabilitytobeassumed,andthecapitalreserves(othercapitalreserves)orliabilitiesshallberecognized.

-Iftheenterpriseacceptingservicedoesnothaveasettlementobligationortheequityinstrumentsgrantedtotheenterpriseemployeesareitsownequityinstrument,suchshare-basedpaymenttransactionshallbetreatedastheequity-settledshare-basedpayment.-Iftheenterpriseacceptingservicehaveasettlementobligationandtheequityinstrumentsgrantedtotheenterpriseemployeesareitsownequityinstrument,suchshare-basedpaymenttransactionshallbetreatedasthecash-settledshare-basedpayment.Theshare-basedpaymenttransactionsbetweentheenterpriseswithintheGroup,iftheenterpriseacceptingserviceandthesettlemententerprisearenotthesameenterprise,andtheconfirmationandmeasurementoftheshare-basedpaymenttransactioninindividualfinancialstatementsoftheenterpriseacceptingserviceandthesettlemententerpriseshallbecomparedwiththeaboveprinciples.

27.Revenues

Accountingpolicyadoptedforrecognitionandmeasurementofrevenuesdisclosedperbusinesstype

Onthebeginningdateofthecontract,theGroupidentifiestheindividualperformanceobligationspecifiedinthecontractandamortizesthetransactionpricetoeachindividualperformanceobligationbasedontherelativeproportionoftheindividualsalespriceofthecommodityguaranteedinindividualperformanceobligation.Variableconsideration,significantfinancingpartinthecontract,non-cashconsideration,customerconsiderationpayable,etc.havebeentakenintoaccountthetransactionprice.

Fortheconsiderationpayabletocustomers,thepayableconsiderationshouldbeoffsetagainstthetransactionprice,andthecurrentincomeshouldbeoffsetatthelateroftherecognitionofrelevantincomeandthepayment(orcommitmenttopay)ofcustomerconsideration,exceptfortheconsiderationpayabletocustomersforthepurposeofobtainingotherclearlydistinguishablegoodsfromcustomers.

Forcontractswithqualityassurancetermsandconditions,theGroupanalyzesthenatureofthequalityassuranceprovidedbythem.Ifthequalityassuranceprovidesaseparateserviceinadditiontoassuringcustomersthatthecommoditiessoldmeettheestablishedstandards,theGroupregardsitasasingleperformanceobligation.TransactionpriceistheconsiderationamounttheGroupisexpectedtobeentitledtoreceiveforthetransferofcommoditiesorservicestocustomers,excludingpaymentsreceivedonbehalfofthirdparties.ThetransactionpricerecognizedbytheGroupdoesnotexceedtheamountforwhichitishighlyprobablethattheaccumulatedrecognizedrevenuewillnotbereversedsignificantlywhentherelevantuncertaintyiseliminated.

Asforeachindividualperformanceobligationinthecontract,ifoneofthefollowingconditionsismet,theGroupshallconfirmthetransactionpricewhichisamortizedintotheindividualperformanceobligationbasedontheperformanceprogresswithinarelevantperformanceperiodastherevenue:thecustomerobtainsandconsumestheeconomicbenefitswhiletheGroupfulfillstheperformanceobligation;thecustomermanagestocontrolthecommoditiesinprocesswhiletheGroupfulfillstheperformanceobligation.CommoditiesproducedduringtheperformanceperiodhaveirreplaceablepurposesandtheGrouphastherighttoreceivepaymentfortheperformancepartwhichhasbeencompletedsofarduringtheentirecontractperiod.Theperformanceprogressshallbeconfirmedbasedonthenatureofcommoditiestransferredbyvirtueoftheinputmethodortheoutputmethod.Whentheperformanceprogress

TheGroup'ssellingofcommoditiessuchascookwareandsmalldomesticappliancesisatypeofperformanceobligationatacertaintimepoint,ofwhichtherevenueisrecognizedwhenthecontroloverthecommoditieshasbeentransferredtothecustomer.Accordingtotheagreementinthesalescontract,thegroupmainlyrecognizesthecontrolovercommodityashavingbeentransferredtothecustomerandrecognizesrelevantcommodityrevenuewhensuchcommodityhasleftthegroup'swarehousesoritsspecifiedwarehouses,deliveredtothecustomerwithacceptancereceiptissued,orsuchcommodityhasbeendeliveredonboardtotheseatransportcarrierwiththecustomsdeclarationforexportandbillofladingobtained.

28.Contractcosts

TheincrementalcostincurredbytheGrouptoobtainthecontractandexpectedtoberecoveredshallberecognizedasanassetasthecontractacquisitioncost.However,iftheamortizationperiodoftheassetdoesnotexceedoneyear,itshallberecognizedthroughcurrentprofitsandlossesatthetimeofoccurrence.

IntheeventthatthecostincurredfortheperformanceofthecontractdoesnotfallwithinthescopeoftheAccountingStandardsforBusinessEnterprisesNo.14-Revenue(Revisedin2017)andmeetsthefollowingconditionsatthesametime,itshallberecognizedasanassetasthecontractperformancecost:①Thecostisdirectlyrelatedtoacurrentorexpectedcontract,includingdirectlabor,directmaterials,manufacturingexpenses(orsimilarexpenses),costsbornebythecustomerandothercostsonlyincurredbythecontract;②ThecostincreasestheGroup'sresourcestofulfillitsperformanceobligationsinthefuture;③Thecostisexpectedtoberecovered.

Assetsrecognizedforcontractacquisitioncostandassetsrecognizedforcontractperformancecost(hereinafterreferredtoas"assetsrelatedtocontractcost")shallbeamortizedonthesamebasisastherevenuerecognitionofcommoditiesorservicesrelatedtosuchassetsandrecognizedthroughcurrentprofitsandlosses.

Wherethebookvalueofassetsrelatedtocontractcostsishigherthanthedifferencebetweenthefollowingtwoitems,theGroupshallwithdrawtheimpairmentprovisionsoftheexcesspartandrecognizeitastheassetimpairmentloss:

-ResidualconsiderationexpectedtobeobtainedarisingfromthetransferofcommoditiesorservicesrelatedtotheassetsbytheGroup;

-Costestimatedtobeoccurredforthetransferoftherelevantcommoditiesorservices.

29.Governmentsubsidies

Ifthegovernmentsubsidiesconcerningassetsarerecognizedasdeferredincomesandarerecognizedthroughcurrentprofitsandlossesbyinstallmentsinareasonableandsystematicwaywithintheservicelifeofunderlyingassets.Governmentsubsidiesconcerningbenefitsusedtocompensatefuturerelevantcostsorlosseswillberecognizedasdeferredincome,andrecognizedthroughcurrentprofitsandlossesduringtheperiodwhentherelatedcostsorlossesarerecognized;thoseusedtocompensaterelevantcostsorlossesthathaveoccurredwillberecognizedthroughcurrentprofitsandlossesdirectly.

Atthesametime,itincludesthegovernmentsubsidiesrelatedtoassetsandincomes,andseparatesdifferentpartsforaccountingtreatment;forthosehardtobedifferentiated,itshallbetakenasgovernmentsubsidiesconcerningbenefitsasawhole.

ThegovernmentsubsidiesconcerningdailyactivitiesoftheGroupshallberecognizedthroughotherincomes,orusedtooffsettherelevantcostsaccordingtotheeconomicbusinessnature.Governmentsubsidiesnotconcerningdailyactivitieswillberecognizedthroughnon-operatingincomeandexpenditure.

Ifthegovernmentsubsidiesconfirmedneedtobereturnedandthereisthedeferredincomebalanceconcerned,thebookbalanceofrelevantdeferredincomesshallbeoffsetagainst,buttheexcessivepartshallberecognizedthroughcurrentprofitsandlosses;Inothercircumstances,theyshallberecognizedthroughcurrentprofitsandlossesdirectly.

30.Deferredincometaxassets/deferredincometaxliabilities

(1)Currentincometax

Onthebalancesheetdate,thecurrentincometaxliabilities(orassets)formedinthecurrentperiodandpreviousperiodsshallbemeasuredbytheexpectedamountofincometaxpayable(orreturnable)calculatedinaccordancewiththeprovisionsofthetaxlaw.Thetaxableincomeonwhichthecurrentincometaxexpensesarecalculatedshallbecalculatedafterthecorrespondingadjustmentofthepre-taxaccountingprofitinthecurrentreportingperiodinaccordancewiththerelevanttaxlaw.

(2)Deferredincometaxassets/deferredincometaxliabilities

Thedifferencebetweenthebookvalueofsomeassetsandliabilitiesandtheirtaxbases,andthetemporarydifferencecausedbythedifferencebetweenthebookvalueoftheitemsthatarenotrecognizedasassetsandliabilitiesbutwhosetaxbasescanbedeterminedaccordingtothetaxlaw,shallbeusedtorecognizedeferredincometaxassetsanddeferredincometaxliabilitieswiththebalancesheetliabilitymethod.

Fortaxabletemporarydifferencesrelatedtotheinitialrecognitionofgoodwillandtheinitialrecognitionofassetsorliabilitiesarisingfromtransactionsthatareneitherenterprisemergernoraffectaccountingprofitandtaxableincome(ordeductibleloss)atthetimeofoccurrence,therelevantdeferredincometaxliabilitiesshallnotberecognized.Inaddition,fortaxabletemporarydifferencesrelatedtotheinvestmentsofsubsidiaries,associatedenterprisesandjointventures,iftheGroupcancontrolthetimeofreversalofthetemporarydifferences,andthetemporarydifferencesarelikelynottobereversedintheforeseeablefuture,therelevantdeferredincometaxliabilitiesshallnotberecognized.Exceptfortheaboveexceptions,theGroupshallrecognizeallotherdeferredincometaxliabilitiesincurredinthetaxabletemporarydifferences.

Taxabletemporarydifferencesanddeductibletemporarydifferencesrelatedtotheinitialrecognitionofassetsorliabilitiesarisingfromasingletransactionthatisneitheraenterprisemergernoraffectsaccountingprofitsandtaxableincomes(ordeductiblelosses)shallberespectivelyrecognizedasdeferredincometaxliabilitiesanddeferredincometaxassetsatthetimeoftransaction.Inaddition,forthedeductibletemporarydifferencesrelatedtotheinvestmentofsubsidiaries,associatedenterprisesandjointventures,ifthetemporarydifferencesarenotlikelytobereversedintheforeseeablefuture,oritisnotlikelytoobtainthetaxableincomeusedtooffsetthedeductibletemporarydifferencesinthefuture,therelevantdeferredincometaxassetsshallnotberecognized.Exceptfortheaboveexceptions,theGroupshallrecognizethedeferredincometaxassetsarisingfromotherdeductibletemporarydifferencestotheextentthattaxableincomeislikelytobeobtainedfordeductingthedeductibletemporarydifferences.

Fordeductiblelossesandtaxdeductionsthatcanbecarrieddowninsubsequentyears,thecorrespondingdeferredincometaxassetsshallberecognizedwiththelimitofthefuturetaxableincomewhichislikelytobeobtainedfordeductingthedeductiblelossesandtaxdeduction.

Deferredincometaxassetsanddeferredincometaxliabilitiesshallbecalculatedonthebalancesheetdatebasedontheapplicabletaxrateduringtheperiodofexpectedrecoveryofrelevantassetsorclearingoffrelevantliabilitiesaccordingtotaxlaws.

Onthebalancesheetdate,itisrequiredtorecheckthebookvalueofthedeferredincometaxassets.Ifsufficienttaxableincomeisnotlikelytobeobtainedfordeductingtheinterestofdeferredincometaxassetsinthefuture,thebookvalueofdeferredincometaxassetsshallbewrittendown.Whenitisverylikelytoobtainenoughtaxableincomethewrite-downamountshallbereversed.

(3)Incometaxexpenses

Theincometaxexpensescomprisethecurrentincometaxanddeferredincometax.

Moreover,theothercurrentincometaxanddeferredincometaxexpensesorearningsshallberecognizedthroughcurrentprofitsandlosses,exceptforbookvalueofgoodwillwhichisadjustedonthebasisofthedeferredincometaxcausedbytheenterprisemerger,andthatthecurrentincometaxandthedeferredincometaxesrelatedtoothercomprehensiveincomesortransactionoraffairsofdirectrecordingintheshareholders'equitiesarerecognizedthroughothercomprehensiveincomesorshareholders'equities.

(4)Offsetofincometax

Whenithasthelegalrightsofsettlementbasedonthenetamountanditintendstomakesettlementbasedonnetamount,obtainassetsoroffsetliabilitiessimultaneously,thecurrentincometaxassetsandcurrentincometaxliabilitiesoftheGroupshallbepresentedbasedonthenetamountafteroffsetting.

Whenithasthelegalrightsofsettlingthecurrenttaxassetsandcurrentincometaxliabilitiesbasedonthenetamount,andthedeferredincometaxassetsanddeferredincometaxliabilitiesarerelatedtoincometaxleviedtothesamesubjectoftaxpaymentby

thesametaxcollectionandadministrationdepartmentorarerelatedtodifferenttaxpayer,butineachimportantperiodofdeferredincometaxassetsandliabilitiesreverseinthefuture,andwhentheinvolvedtaxpayerintendtosettlethecurrentincometaxassetsandliabilitiesbasedonthenetamountorobtainassetsandpayofftheliabilitiesatthesametime,theGroup'sdeferredincometaxassetsanddeferredincometaxliabilitiesshallbepresentedafteroffsetting.

31.Lease

Leasereferstoacontractinwhichitisagreedthatthelessortransferstheuserightofassetstothelesseetogetcorrespondingconsiderationwithinacertainperiod.TheGroupevaluateswhetherthecontractisusedforleaseorincludestheleaseonthecontractcommencementdate.Whereeitherpartytheretoassignsoneormoreuserightsoftherecognizedassetsunderitscontrolinacertainperiodtogetconsideration,thecontractisaleaseorincludesalease.Inordertodeterminewhetherthecontracttransferstherightofcontrollingtheuseofanidentifiedassetforacertainperiodoftime,theGroupconductsthefollowingassessment:

-Whetherthecontractinvolvestheuseoftheidentifiedasset.Theidentifiedassetmaybeexplicitlyspecifiedbythecontract,orimplicitlyspecifiedwhentheassetisavailableforusebythecustomer,andtheassetisphysicallydistinguishable,orintheeventthatanyproductioncapacityoftheassetorotherpartoftheassetisphysicallyindistinguishable,butitsubstantiallyrepresentsthefullcapacityoftheasset,andthusenablesthecustomertohaveaccesstoalmostalltheeconomicbenefitsarisingfromtheuseoftheasset.Ifthesupplieroftheassethasthesubstantialrightofreplacingtheassetthroughouttheperiodofuse,thentheassetisnotattributedtoanidentifiedasset;

-Whetherthelesseehastherighttoacquirealmostalltheeconomicbenefitsarisingfromtheuseoftheidentifiedassetduringtheperiodofuse;

-Whetherthelesseehastherighttodirecttheuseoftheidentifiedassetduringtheperiodofuse.

Ifthecontractcontainsmultipleseparateleasesatthesametime,thelesseeandlessorwillsplitthecontractandhaveeachseparateleaseseparatelysubjecttoaccountingtreatment.Ifthecontractincludesleaseandnon-leasepartsatthesametime,thelesseeandthelessorwillsplitthemseparately.

(1)Lessee

Atthebeginningdateoftheleaseterm,theGrouprecognizestheright-of-useassetandleaseobligationofthelease.Theright-of-useassetisinitiallymeasuredatcost,includingtheinitialmeasurementamountoftheleaseobligation,theleasepaymentpaidatorbeforethebeginningdateoftheleaseterm(lesstheamountofleaseincentivesalreadygranted),theinitialdirectexpensesincurred,andthecostsexpectedtobeincurredtodemolishandremovetheleasedasset,restorethesitewheretheleasedassetislocatedorrestoretheleasedassettothestateagreeduponintheprovisionsofthelease.

TheGroupemploysthestraight-linemethodtodepreciateright-of-useassets.Iftheownershipoftheleasedassetscanbereasonablyconfirmedtobeobtaineduponexpiryoftheleaseterm,thedepreciationofleasedassetsshallbewithdrawnbytheGroupduringtheremainingservicelifethereof;Otherwise,theleasedassetisdepreciatedduringtheshorteroftheleasetermandtheremainingservicelifeoftheleasedasset.Impairmentprovisionsforright-of-useassetsshallbemadeinaccordancewiththeaccountingpoliciesdescribedinNoteV.22"Impairmentoflong-termassets".

Theleaseobligationisinitiallymeasuredatthepresentvalueoftheleasepaymentthathasnotbeenpaidatthebeginningdateoftheleaseterm,andthediscountrateistheimplicitrateofthelease.Iftheimplicitrateoftheleasecannotbedetermined,theincrementalborrowingrateoftheGroupshallbeadoptedasthediscountrate.

TheGroupcalculatestheinterestexpenseoftheleaseobligationforeachperiodoftheleasetermatafixedperiodicinterestrate,whichisrecognizedthroughcurrentprofitsandlossesorrelevantassetcosts.Thevariableleasepaymentnotrecognizedthroughmeasurementofleaseobligationswillberecognizedthroughcurrentprofitsandlossesorrelevantassetcostswhenitactuallyoccurs.

Incaseofanyoffollowingcircumstancesafterthebeginningdateoftheleaseterm,theGroupwillremeasureleaseobligationsatthepresentvalueoftheleasepaymentafteranychange:

-Wheretheamountpayableanticipatedchangesaccordingtotheguaranteedresidualvalue;-Wheretheindexorratiousedforrecognizingtheleasepaymentchanges;-WherethereisachangeintheGroup'sassessmentresultsoftheoptionofpurchase,renewaloptionoroptionofterminationofleaseortheactualexercisingoftheterminationoftherenewaloptionoroptionofterminationofleaseisinconsistentwiththeoriginalassessmentresult.

Whentheleaseobligationismeasuredanew,theGroupwilladjustthebookvalueofright-of-useassetsaccordingly.Ifthebookvalueoftheright-of-useassethasbeenreducedtozero,buttheleaseobligationstillneedstobefurtherreduced,theGroupwillincludetheremainingamountinthecurrentprofitsandlosses.TheGroupchoosesnottoconfirmtheright-of-useassetandleaseobligationforshort-termlease(withaleasetermnotexceeding12months)andlow-valueassetlease(thevalueofasingleleasedassetislowerwhenitisabrandnewasset)aswellasincludesrelatedleasepaymentintothecurrentprofitsandlossesorrelevantassetcostsineachperiodduringtheleasetermpursuanttothestraight-linemethod.

(2)Lessor

Atthebeginningdateoftheleaseterm,theGroupdividesleasesintofinancingandoperatingleases.Financingleasereferstoaleaseinwhichalmostalltherisksandrewardsrelatedtotheownershipoftheleasedassetareessentiallytransferred,regardlessofwhethertheownershipisfinallytransferredornot.Theoperatingleasereferstotheotherleasesexceptforthefinancinglease.

TheGroup,asthelessor,providesclassificationofsubleasesbasedontheright-of-useassetscreatedbytheoriginalleaseratherthantheunderlyingassetsoftheoriginallease.Iftheoriginalleaseisashort-termleaseandtheGroupchoosestoapplythesimplifiedtreatmentoftheaboveshort-termleasetotheoriginallease,thentheGroupclassifiesthesubleaseasanoperatinglease.

Underfinancingleases,atthebeginningdateoftheleaseterm,theGroupconfirmsfinancingleasereceivablesforfinancingleaseandderecognizesthefinancialleasingassets.TheGroupregardsthenetinvestmentinaleaseastheentryvalueoffinancingleasereceivablesatthetimeofinitialmeasurementoffinancingleasereceivables.Thenetinvestmentinaleaseisthesumofthepresentvalueofunguaranteedresidualvalueandleasereceiptnotreceivedyetonthebeginningdateoftheleasetermwhichissubjecttodiscountingattheimplicitrateintheleaseterm.

TheGroupcalculatesandrecognizestheInterestrevenueineachperiodwithintheleasetermaccordingtoafixedperiodicrate.ThederecognitionandimpairmentoffinancingleasereceivablesshallbetreatedinaccordancewiththeaccountingpoliciesdescribedinNoteV.10"FinancialInstruments"and11"FinancialAssetsImpairment".Thevariableleasepaymentwhichisnotrecognizedthroughnetleaseinvestmentshallberecognizedthroughcurrentprofitsandlosseswhenitactuallyoccurs.

Theleasereceiptsofoperatingleaseareconfirmedasrentrevenueineachperiodwithintheleaseterminlightofstraight-linemethod.TheGroupcapitalizestheinitialdirectexpensesincurredinconnectionwithoperatingleases,apportionedthemovertheleasetermonthesamebasisastherentrevenuerecognition,andrecordedintothecurrentprofitsandlossesbystages.Thevariableleasepaymentwhichisnotrecognizedthroughleasereceiptshallberecognizedthroughcurrentprofitsandlosseswhenitactuallyoccurs.

32.Relatedparties

Ifonepartycontrolsorjointlycontrolstheotherpartyorimposessignificantimpactontheotherparty,andtwoormorepartiesarecontrolledorjointlycontrolledbyoneparty,thesepartiesarerelatedparties.Relatedpartycanbeindividualorenterprise.Anenterprisethatisonlycontrolledbythestatebutdoesnothaveotherrelatedpartyrelationshipsdoesnotconstitutearelatedparty.

Inaddition,theCompanyalsodeterminestheGrouporrelatedpartiesoftheCompanyinaccordancewiththeAdministrativeMeasuresfortheDisclosureofInformationofListedCompaniespromulgatedbytheCSRC.

33.Segmentreport

SeeNoteXVIII,1"SegmentInformation"fordetailsofaccountingpoliciesrelatedtosegmentreportingfordetails.

34.Otherimportantaccountingpoliciesandestimates

(1)Repurchasedshares

IftheGroupreducesitscapitalbyacquiringthestocksoftheCompanywithapproval,thenitshallreduceequitiesaccordingtothetotalamountofthefacevalueofcancelledstocks,andadjustowners'equitiesaccordingtothedifferencebetweenthepricepaidtopurchasestocksback(includingtransactioncost)andthefacevalueofstocks.Thepartexceedingthetotalfacevalueshallbeusedtowritedowncapitalreserve(sharecapitalpremium),surplusreserveandundistributedprofit.Ifthepriceislowerthanthetotalfacevalue,thenthepartlowershallbeincreasedwithcapitalreserve(sharecapitalpremium).SharesrepurchasedbytheGroupshallbemanagedastreasurysharesbeforetheyarecancelledortransferred;totalexpenditureofrepurchasedsharesshallbetransferredasthecostoftreasuryshares.

Whentreasurysharesaretransferred,theparthigherthantheirrevenueshallbetransferredtoincreasecapitalreserve(sharecapitalpremium);thepartlowerthanthecostoftreasurysharesshallwritedowncapitalreserve(sharecapitalpremium),surplusreserveandundistributedprofitinsequence.

IftheGrouprepurchasesharesforthereasonofequityincentive,itshalltreatallexpensesonsharesrepurchaseastreasuryshareswhilerepurchasingandmakeregistrationforfuturereference.

(2)Fairvaluemeasurement

Fairvalue,referstothepricethatmarketparticipantcanobtainorneedstopayaftersellinganassetortransferringaliability,amongtheorderlytransactionsmadeonthemeasurementdate.TheGroupmeasuresrelevantassetorliabilityandconsidersthecharacteristicsofthisassetorliabilityatfairvalue;supposesthesellingofassetsortransferofliabilitiesbymarketparticipantareorderlytransactionundercurrentmarketconditions;supposestheorderlysellingofassetsortransferofliabilitiesarecarriedoutinthemainmarketofrelevantassetsorliabilities;supposesthetransactionismadeinthemostfavorablemarketforrelevantassetsorliabilitieswhenthereisnomainmarket.TheGroupadoptstheassumptionsthatmarketparticipantsusetomaximumtheireconomicbenefitswhentheypriceassetsorliabilities.

TheGroupjudgeswhetherthefairvalueatinitialrecognitionequalstoitstransactionpriceaccordingtotransactionnatureandthecharacteristicsofrelevantassetsorliabilities;ifthetransactionpriceisnotequaltothefairvalue,relevantgainsorlosseswillberecognizedthroughcurrentprofitsandlosses,unlessotherwisespecifiedbyrelevantaccountingstandards.

TheGroupadoptsthevaluationtechniquethatisapplicabletothecurrentsituationandhasenoughavailabledataandotherinformationtosupport.Mainlyusedvaluationtechniquesincludemarketapproach,incomeapproachandcostmethod.Intheapplicationofvaluationtechniques,relevantobservableinputvaluesshallbeusedfirst,andunobservedinputvaluescanonlybeusedwhenrelevantobservableinputvaluescannotbeobtainedoritisnotfeasibletoobtainthem.

InputvaluesusedbytheGroupforfairvaluemeasurementisdividedinto3levels.Thefirstlevelofinputvalueswillbeusedfirst,andthenthesecondlevelandthethirdlevel.Firstlevelofinputvaluesarethequotationsofsameassetsorliabilitiesthatcanbeobtainedonthemeasurementdateandarenotadjustedintheactivemarket;thesecondlevelofinputvaluesarethedirectorindirectobservableinputvaluesofrelevantassetsorliabilitiesotherthanthefirstlevelofinputvalues;thethirdlevelofinputvaluesaretheunobservableinputvaluesofrelevantassetsorliabilities.

TheGroupmeasuresnon-financialassetswithfairvalue,considersmarketparticipant'sabilitytousethisassetinthebestwaytogenerateeconomicbenefits,ortheabilitytosellthisassettoothermarketparticipantswhocanusethisassetinthebestwaytogenerateeconomicbenefits.Tomeasurealiabilitywithfairvalue,theGroupsupposesthisliabilityistransferredtoothermarketparticipantsonthemeasurementdate,andfurtherexistsaftertransfer,andthemarketparticipant,whoisthetransferee,performsobligations.Tomeasureone'sownequityinstrumentwithfairvalue,supposethisequityinstrumentistransferredtoothermarketparticipantsonthemeasurementdata,andfurtherexitsaftertransfer,andthemarketparticipant,asthetransferee,obtainsrelevantrightstothisinstrumentandundertakescorrespondingobligations.

35.Changeofimportantaccountingpoliciesandestimates

(1)Changeofimportantaccountingpolicies

(2)Changeofimportantaccountingestimates

(3)Firstimplementationofnewaccountingstandardsadjuststherelateditemsinfinancialstatementssince2023

VI.Taxes

1.Maintaxesandtaxrates

2.Taxpreferences

VII.NotestoItemsofConsolidatedFinancialStatements

1.Monetarycapital

Otherremarks:

1)AsatDecember31,2023,therestrictedbankdepositisthecancelledfrozenamountofRMB30,423.72(December31,2022:RMB8,541.04)inthebranchcompany'sbankaccount,thereisnofrozenamount(December31,2022:RMB82,189.64)inthebankaccountforchangeofjudicialpersonforindustrialandcommercialpurpose,andthereisnotermdepositamount(December31,2022:RMB12,546,000.00)pledgedforissuingbankacceptancebills,andtheremainingRMB2,964,386,945.81inbankdepositsisnotrestrictedforuse,amongthem,morethanthreemonthstermdepositsofRMB1,607,020,342.48.

2)AsatDecember31,2023,othermonetarycapitalsincludetherestrictedacceptancebillsecurityofRMB476,860,000.00(December31,2022:RMB254,129,233.86),e-commerceplatformsecurityofRMB613,739.88(December31,2022:RMB975,570.02),advancepaymentfinancingdepositsecurityofRMB58,000,000.00(December31,2022:RMB58,000,000.00),andunrestrictedmonetarycapitalofRMB48,323,738.89(December31,2022:RMB34,302,408.17)inAlipaywallet,JDpay,Douyinwallet,securitiessettlementaccount,futuressettlementaccount,andYouzanaccount,etc.

3)AsatDecember31,2023,themonetarycapitaldepositedbySuporinVietnamisequivalenttoRMB44,335,548.85(December31,2022:equivalenttoRMB193,083,117.24).ThemonetarycapitaldepositedbySuporinSingaporeisequivalenttoRMB4,491,068.45(December31,2022:equivalenttoRMB3,754,734.88).ThemonetarycapitaldepositedbySuporinIndonesiaisequivalenttoRMB12,296,278.60(December31,2022:equivalenttoRMB11,141,736.80).

2.Transactionalfinancialassets

AsatDecember31,2023,thefinancialassetsatfairvaluethroughcurrentprofitsandlossesarethefinancialproductspurchasedbytheCompany,amountingtoRMB350,000,000.00(December31,2022:RMB430,000,000.00).Thesefinancialproductswithfloatingincome,andlinkedtointerestratesandexchangerates,etc.,andthecorrespondinggainsfromchangesinfairvalue,i.eRMB1,137,787.54(December31,2022:RMB1,382,527.79),arerecognizedattheendofthecurrentperiod.

3.Notesreceivable

(1)Detailsoncategories

(2)Classifieddisclosurebythebaddebtprovisionmethod

Provisionforbaddebtsmadeonaportfoliobasis:0

Ifyes,aprovisionforbaddebtsfornotesreceivableshallbeaccruedaccordingtothegeneralmodelofexpectedcreditloss:

(3)Provisionforbaddebtsmade,collectedorreversedincurrentperiod

Provisionforbaddebtsmadeincurrentperiod:

Wherein,importantamountsofprovisionforbaddebtscollectedorreversedinthecurrentperiod:

(4)NotesreceivablesthattheCompanyhaspledgedattheendoftheperiod

AsofDecember31,2023,theGrouphadnonotesreceivablepledged(December31,2022:None).

(5)Endorsedordiscountednotesreceivableundueatthebalancesheetdateattheendoftheyear

ByDecember31,2023,Supor'sundueandendorsednotesreceivableofRMB10,761,655.33(December31,2022:RMB22,383,800.87).havenotbeenrecognizedasnotestransferredtothesupplierstosettletheamountpayable.Thisismainlybecausethat,accordingtothemanagement,therisksandremunerationsattachedtotheownershipofthenoteshavenotbeenactuallytransferred.Thebookvaluesofthesaidunduenotesreceivableapproximatetheirfairvalues.Thesaidunduenotesreceivablewillgetmaturewithin1year.

(6)NotestheCompanytransferstoaccountsreceivableduetothedrawer'sfailuretoperformthecontractattheendoftheperiodAsatDecember31,2023,theGrouphasnotanynotestransferredtoaccountsreceivableduetonon-performanceofdrawers.(December31,2022:None)

4.Accountsreceivable

(1)Disclosurebyaging

Provisionforbaddebtsmadeonanindividualbasis:RMB195,920.38

Categoriesforbaddebtsprovision:Portfolio1Provisionforbaddebtsmadeonaportfoliobasis:RMB107,029,354.59

Explanationonthebasisfordeterminingsuchportfolio:

Theexpectedcreditlossrateiscalculatedupontheexperienceinactualcreditloss,andadjustedbasedonthedifferencebetweentheeconomyduringthehistoricperiodofdatacollection,thecurrenteconomyandtheeconomyduringthedurationexpectedbySupor.Ifyes,aprovisionforbaddebtsforaccountsreceivableshallbeaccruedaccordingtothegeneralmodelofexpectedcreditloss:

DecreasedprovisionforbaddebtsofRMB60,246.56forconversiondifferenceinforeigncurrencystatementcausedbythechangeinexchangerate.

(4)Accountsreceivableactuallywrittenoffincurrentperiod

Includingsignificantaccountsreceivablewrittenoff:

None

(5)Accountsreceivableandcontractassetdetailsofthetop5closingbalancesbydebtors

5.Receivablesfinancing

(1)Classificationofreceivablesfinancing

TheGroupendorsesordiscountscertainbankacceptancebillsbytheneedsofday-to-dayfundmanagement.Takingintoaccountoftheamountandfrequencyofendorsementordiscountofbankacceptancebills,theGroupdeterminesthattheobjectiveofsuchbusinessmodelistoreceivecontractualcashflowsandsellthenotesreceivablesimultaneously,andtherefore,suchnotesreceivableare

classifiedintofinancialassetsmeasuredatthefairvaluewiththeirchangesincludedintoothercomprehensiveincomes,andpresentedasreceivablesfinancing.AsatDecember31,2023,theGrouphadnoreceivablesfinancingpledged.(December31,2022:None).

(2)Endorsedordiscountedreceivablesfinancingundueatthebalancesheetdateattheendoftheyear

Inordertosettlepartofthepayables,theGroupendorsestheequalamountofunduenotesreceivabletothesuppliers,andthemanagementoftheGroupconsidersthatcertainunduenotesmeettheconditions,thatis,almostallrisksandremunerationpertainingtoownershiphavebeentransferredandmeanwhilethecurrentobligationsoftherelevantpayableshavebeenfullydischarged,thustherelevantnotesandpayablesarederecognized.ThepossiblegreatestlossundertakenbytheGroupforthecontinuedinvolvementthereinistheamountoftheunduenotesreceivableendorsedbytheGrouptosuppliers.Thesaidunduenotesreceivablewillgetmaturewithin1year.

6.Otherreceivables

(1)Otherreceivables

1)Otherreceivablescategorizedbynature

2)Disclosurebyaging

3)Classifieddisclosurebythebaddebtprovisionmethod

Provisionforbaddebtsmadeonanindividualbasis:RMB1,190,578.89

Categoriesforbaddebtsprovision:Portfolio1

Provisionforbaddebtsmadeonaportfoliobasis:RMB3,500,901.22

Aprovisionforbaddebtsthatareaccruedaccordingtothegeneralmodeloftheexpectedcreditloss:

DecreasedprovisionforbaddebtsofRMB2,306.81forconversiondifferenceinforeigncurrencystatementcausedbythechangeinexchangerate.Changesinbookbalanceoflossprovisionduetosignificantchangesinthecurrentperiod

4)Provisionforbaddebtsmade,collectedorreversedincurrentperiod

5)Otherreceivablesofthetop5closingbalancesbydebtors

7.Advancepayment

(1)Listingbyages

(2)Advancepaymentofthetop5closingbalancesbyprepaymentobjects

Agingiscalculatedfromthedateofconfirmationoftheadvancepayment.

8.Inventories

WhethertheCompanyneedstocomplywiththedisclosurerequirementsoftherealestateindustryNo

(1)Inventoryclassification

(2)Inventorydepreciationreservesandimpairmentprovisionforcontractperformancecost

ThereisanincreasedinventorydepreciationreservesofRMB39,138.59forconversiondifferenceinforeigncurrencystatementcausedbythechangeinexchangerate.

9.Non-currentassetsduewithinoneyear

(1)Debtinvestmentduewithinoneyear

(2)Otherdebtinvestmentduewithinoneyear

1)Otherdebtinvestmentsduewithinoneyear

10.Othercurrentassets

11.Otherdebtinvestments

(1)Situationofotherdebtinvestment

(2)Importantotherdebtinvestmentattheendoftheperiod

12.Long-termequityinvestment

Therecoverableamountisdeterminedasthenetamountofthefairvaluelessdisposalexpenses

Therecoverableamountisdeterminedasthepresentvalueofestimatedfuturecashflowofassets

13.Fixedassets

(1)Fixedassets

(2)Fixedassetswithpropertyownershipcertificateunsettled

14.Constructioninprogress

(1)Detailsofconstructioninprogress

(2)Impairmenttestoftheconstructioninprogress

15.Right-of-useassets

(1)Right-of-useassets

(2)Impairmenttestofright-of-useassets

16.Intangibleassets

Attheendofthisperiod,theproportionofintangibleassetsformedthroughinternalR&Dinthebalanceofintangibleassetsis0.00%.

17.Deferredincometaxassets/deferredincometaxliabilities

(1)Un-offsetdeferredincometaxassets

(2)Un-offsetdeferredincometaxliabilities

(3)Deferredincometaxassetsorliabilitiespresentedwithnetamountafteroffsetting

(4)Detailaboutunrecognizeddeferredincometaxassets

(5)Deductiblelossesofunconfirmeddeferredincometaxassetsshallexpireinthefollowingyears

18.Assetswithtitleoruserightrestrictions

19.Short-termloans

(1)Classificationofshort-termloans

Therearenooverdueandunpaidloansattheendofthisyear.

20.Notespayable

TheamountofdueunpaidnotespayableisRMB0.00attheendofthecurrentperiod.Theaboveamountsareallnotespayableduewithinoneyear.

21.Accountspayable

(1)Details

AsatDecember31,2023,Suporhadnosignificantaccountspayablewithanageofmorethanoneyear(December31,2022:None).

22.Otherpayables

(1)Otherpayables

1)Listingbynature

Theamountwithmajorchangesinitsbookvalueduringthereportingperiodanditsreasons

24.Payableemployeeremuneration

(2)Detailsofshort-termemployeeremuneration

(3)Detailsofdefinedcontributionplan

OnMarch25,2019,theGeneralOfficeoftheStateCouncilreleasedtheOpinionsonComprehensivelyPromotingtheCombinedImplementationofMaternityInsuranceandBasicMedicalInsuranceforEmployees,whichpromotesthecombinedimplementationofthetwoinsurances.

(4)Terminationbenefit

TheterminationbenefitpaidbySuporintheyearforterminationoflaborrelationsisRMB3,804,066.37(2022:RMB9,120,232.80),andtheoutstandingpayableamountattheendoftheyearisRMB1,731,091.20(asofDecember31,2022:RMB580,305.42).

25.Taxesandfeespayable

26.Non-currentliabilitiesduewithinoneyear

27.Othercurrentliabilities

28.Leaseobligation

TheGroupalsorentsemployeedormitories,temporarywarehouses,etc.foraleasetermuptooneyear,representingshort-termleases.TheGrouphaschosennottorecognizetheright-of-useassetsandleaseobligationsfortheseleases.

29.Long-termpayrollpayabletoemployees

(1)Long-termpayrollpayabletoemployees

30.Estimatedliabilities

31.Sharecapital

32.Capitalreserves

Remarks(includingincreaseanddecreaseincurrentperiodandvariationreason):

1)TheincreaseofRMB47,741,637.58inothercapitalreservesinthecurrentperiodrefersto①theequity-settledshare-basedpaymentcostofRMB45,786,307.92inthecurrentperiodincludedinthecapitalreserve(othercapitalreserves),asdetailedinNoteXV"DescriptionofShare-basedPayment"tothesefinancialstatements.②Theestimateddeductibleamountoftheshare-basedpayment

inthefutureofthisyearexceedsthecostrecognizedinthewaitingperiod.ThedeferredincometaxassetsformedbytheexcessofRMB1,955,329.66aredirectlyrecognizedthroughcapitalreserve-othercapitalreserves.

33.Treasuryshares

1)The12thSessionoftheSeventhBoardofDirectorsoftheCompanyand2021AnnualGeneralMeetingofShareholdersdeliberatedandapprovedtheProposalonRepurchasingCertainPublicShares.TheCompanyplannedtouseitsself-ownedcapitaltobuybackitssharesforthewrite-offanddecreaseoftheregisteredcapitalandtheimplementationofequityincentives.TheincreaseintheyearisduetotheCompany'srepurchaseof1,545,000sharesoftheCompanyfromthesecondarymarketthroughcentralizedbidtransactionsduringthereportingperiod,totalingRMB79,937,608.83,includingtherepurchasehandlingfeeofRMB8073.73.Amongthem,RMB79,945,682.56oftreasurysharesareintendedforcancellationorimplementationofequityincentives.

2)The2022AnnualGeneralMeetingofShareholdersoftheCompanydeliberatedandapprovedtheProposalonRepurchasingCertainPublicShares,andtheCompanyplannedtorepurchaseitssharesthroughself-ownedcapitalforpartcancellationanddecreaseoftheregisteredcapitalandimplementationofequityincentive.TheincreaseintheyearisduetotheCompany'srepurchaseof8,150,000sharesoftheCompanyfromthesecondarymarketthroughcentralizedbidtransactionsduringthereportingperiod,totalingRMB400,080,671.30,includingtherepurchasehandlingfeeofRMB39,414.88.Amongthem,RMB400,120,086.18oftreasurysharesareintendedforcancellationorimplementationofequityincentives.

3)ThetreasurysharecapitaldecreasedbyRMB91,733,258.47intheyear,①The11thmeetingofthe7thBoardofDirectorsin2022andthe15thmeetingofthe7thBoardofDirectorsin2022approvedtheProposalonGrantingRestrictedStockstoIncentiveObjects.Atotalof79,000restrictedstockshavebeengrantedtoincentiveobjectsthisyear,withagrantamountofRMB3,650,590.00②Atthe14thmeetingofthe7thBoardofDirectorsin2022,itwasdecidedthatthirteenincentiverecipientsofthecompany,whohaveresignedandnolongermeettheincentiveconditions,willrepurchaseandcancelatotalof53,000restrictedsharesatapriceofRMB1pershare,reducingtherepurchaseobligationbyRMB53,000.00.③The19thmeetingofthe7thBoardofDirectorsofthecompanyin2023hasdecidedthatfiveincentiverecipientswhohaveleftthecompanyandnolongermeettheincentiveconditionswillrepurchaseandcancelatotalof22,750restrictedsharesatapriceofRMB1pershare,reducingtherepurchaseobligationbyRMB22,750.00.

④Thisyear,thecompanycancelledandrepurchased1,870,069shares,totalingRMB88,006,918.47.

34.Othercomprehensiveincomes

35.Surplusreserves

Remarksonsurplusreserve(includingincreaseanddecreaseincurrentperiodandvariationreason):

Theincreaseinsurplusreservethisyearisbasedontheprovisionofstatutorysurplusreservebasedonthecompany'snetprofitrealizedthisyear.Thecumulativestatutorysurplusreservewithdrawnbyourcompanyhasreached50%oftheregisteredcapital,andwewillnolongercontinuetowithdrawstatutorysurplusreserve.Thedecreaseinsurplusreserveintheyearisduetothecancellationof1,870,069repurchasedsharesoftheCompany,wherethedifferencebetweenthepricepaidforthecancellationofrepurchasedsharesandthefacevalueofthesharesisoffsetagainstthecapitalreserve-sharecapitalpremium,andtheshortfallisoffsetagainstthesurplusreservebyRMB86,136,849.47.

36.Undistributedprofits

Adjustmentofundistributedprofitsatperiodbeginning:

1).DuetoretroactiveadjustmentofAccountingStandardsforBusinessEnterprisesandrelevantnewregulations,undistributedprofitatperiodbeginningwaschangedbyRMB0.00.

2)Duetochangeofaccountingpolicies,undistributedprofitatperiodbeginningwaschangedbyRMB0.00.

3)Duetorectificationofimportantaccountingerrors,undistributedprofitatperiodbeginningwaschangedbyRMB0.00.

4)Duetochangeofmergerscoperesultedfromsamecontrol,undistributedprofitatperiodbeginningwaschangedbyRMB0.00.

5)Duetootheradjustment,undistributedprofitatperiodbeginningwaschangedbyRMB0.00.

37.Operatingincomesandcosts

Whetherthenetprofitbeforeorafternon-recurringprofitandlossarededucted,whicheverislower,isnegative

Breakdowninformationofoperatingincomeandoperatingcost:

Informationrelatedtoperformanceobligations:

NoneInformationrelatedtothetransactionpriceallocatedtotheremainingperformanceobligations:

Attheendofthisreportingperiod,therevenuefromtheperformanceobligationsthathavenotbeenfulfilledorcompletelyfulfilledunderexistingcontractisRMB862,706,076.18,ofwhichRMB862,706,076.18isexpectedtoberecognizedasincomein2024.

38.Taxesandsurcharges

SeeNoteVI.Taxesforcalculatingstandardoftaxesandsurcharges.

39.Administrativeexpenses

40.Salesexpense

41.R&Dexpense

42.Financialexpenses

43.Otherincome

(1)Classificationofotherincome

Total

(2)Governmentsubsidiesconcerningdailyactivities

44.Gainsfromchangesinfairvalue

45.Investmentincomes

46.Creditimpairmentlosses

47.Assetimpairmentlosses

48.Assetsdisposalincome

49.Non-operatingincome

50.Non-operatingexpense

51.Incometaxexpenses

(2)Reconciliationofaccountingprofittoincometaxexpenses

52.Othercomprehensiveincomes

SeeNote34fordetails.

53.Itemsofcashflowstatement

(1)Cashrelatedtooperatingactivities

Othercashreceiptsrelatedtooperatingactivities

Othercashpaymentsrelatedtooperatingactivities

(2)Cashrelatedtoinvestingactivities

Othercashreceiptsrelatedtoinvestingactivities

Othercashpaymentsrelatedtoinvestingactivities

(3)Cashrelatedtofinancingactivities

Othercashpaymentsrelatedtofinancingactivities

ChangesinvariousliabilitiesarisingfromfinancingactivitiesApplicable□Notapplicable

(4)Netamountspresentedincashflows

54.Supplementaryinformationtothecashflowstatement

(1)Supplementinformationtothecashflowstatement

(2)Cashandcashequivalents

(3)Monetaryfundsthatdonotbelongtocashandcashequivalents

55.Foreigncurrencymonetaryitems

(1)Foreigncurrencymonetaryitems

(2)Descriptionofoverseasbusinessentities,includingimportantoverseasbusinessentities,indicatedthatitsmainoverseasbusinessentity,recordingcurrencyandselectionbasis,aswellasthereasonsforchangesofrecordingcurrencyshallbedisclosed.

56.Lease

(1)Thecompanyasthelessee

Applicable□NotapplicableVariableleasepaymentsnotrecognizedthroughmeasurementofleaseobligation

Leasingcostsofshort-termleasesorlowvalueassetswithsimplifiedtreatmentApplicable□Notapplicable

(2)Thecompanyastheleaser

OperatingleaseasthelessorApplicable□Notapplicable

Financingleaseasthelessor

Annualundiscountedleasereceiptsforthefuturefiveyears

(3)Salesprofitandlossoffinancingleasesrecognizedasmanufacturerordistributor

VIII.R&DExpenditure

IX.Changeonmergerscope

1.Others

ThereisnochangeinthemergerscopeoftheCompanyintheperiod.X.EquityinOtherEntities

1.Equityinsubsidiaries

(1)StructureofenterpriseGroup

Unit:RMBExplanationonshareholdingratioinsubsidiarydifferentfromvotingratio:

Note1:Thefollowingareabbreviations:ZhejiangSuporElectrical,ShaoxingSupor,SuporVietnam,WuhanRecycling,WuhanSuporCookware,Omegna,ShanghaiMarketing,WuhanSuporPressureCooker,P&RProducts,WuhanSupor,YuhuanSales,SEADA,AFS,ShanghaiWMFEnterpriseDevelopment,ZhejiangWMFHousewares,ShaoxingSuporHousewares,ZhejiangSuporLKA,SuporWaterHeater,HainanSuporE-commerceCompanyandHainanTefalTradingCompany.Note2:TheCompanyissubsidiaryofWuhanSuporPressureCookerCo.,Ltd.;ofwhich,WuhanSuporPressureCookerCo.,Ltdholds75%sharesandtheCompanyholds25%shares.Note3:TheCompanyholds51%equityofSEADA,andAFSistotallyheldbySEADA.SEADAholds100%sharesofAFS.

Note4:PTGROUPESEBINDONESIAMSDwasestablishedjointlybySEADA,asubsidiaryoftheCompanyandPTMULTIFORTUNAinIndonesiathisyear.SEADAholds66.67%sharesandPTMULTIFORTUNAholds33.33%shares.Note5:ZhejiangSuporWaterHeaterCo.,LtdisjointlyinvestedandestablishedbytheCompanyandSuporGroupCo.,Ltd.TheCompanyholds52%oftheshares,andSuporGroupCo.,Ltdholds48%oftheshares.Note6:HainanSuporE-commerceCompanyandHainanTefalTradingCompanyaretotallyheldbyZhejiangSuporElectrical.

2.Equityinjointventureorassociatedenterprises

(1)Insignificantjointventureorassociatedenterprises

XI.Governmentsubsidies

1.Governmentsubsidiesaffirmedasperreceivableattheendofreportingperiod

Reasonsfornotreceivingtheexpectedamountofgovernmentsubsidiesatexpectedtimepoints

2.Liabilityprojectswithgovernmentsubsidies

3.Governmentsubsidyrecognizedthroughcurrentprofitsandlosses

VII.Risksrelatedtofinancialinstruments

1.Variousrisksarisingfromfinancialinstruments

(I)RiskmanagementobjectivesandpoliciesTheGroupaimstoseektheappropriatebalancebetweentherisksandbenefitsfromitsuseoffinancialinstrumentsandtominimizetheadverseeffectsofrisksontheGroup'sfinancialperformanceandmaximizetheinterestsofshareholdersandotherequityinvestors.Basedonsuchobjectives,theGroup'sriskmanagementpoliciesareestablishedtoidentifyandanalyzetherisksfacedbytheGroup,tosetappropriaterisklimitsandcontrols,andtomonitorrisksandadherencetolimits.

1.Marketrisk

(1)Foreignexchangerisk

ForeignexchangeriskistheriskthattheGroupmayencounterfluctuationinfairvalueoffinancialinstrumentsorfuturecashflowsduetochangesinexchangerate.TheGroup'sforeigncurrencyriskrelatesmainlytoforeigncurrencymonetaryassetsandliabilitiesoftheGroup.Whenshort-termimbalanceoccurredtoforeigncurrencyassetsandliabilities,theGroupmayconductforeignexchangehedgeortradeforeigncurrencyatmarketexchangeratewhennecessary,inordertomaintainthenetriskexposurewithinanacceptablelevel.

ThelistofforeigncurrencyfinancialassetsandliabilitiesattheendoftheyearinSuporisshowninNoteVII.55Foreigncurrencymonetaryitems.Sensitivityanalysis:

Assumingthatotherriskvariablesotherthantheexchangerateremainunchanged,theincreaseinshareholders'equitiesandnetprofitsduetothe1%appreciationofRMBduetothechangeinexchangerateofRMBagainstallforeigncurrenciesasat31DecemberoftheGroupwillbeasfollows.ThisinfluenceistranslatedintoRMBatthespotrateonthebalancesheetdate.

(2)Interestrisk-riskforcashflowchanges

InterestriskistheriskthattheGroupmayencounterfluctuationinfairvalueoffinancialinstrumentsorfuturecashflowsduetochangesinmarketinterestrate.AsofDecember31,2023,theGroup'sBank'sloanisatafixedinterestrate,theGroup'sgrossprofitsandshareholders'equitieswillnotbesignificantlyaffectedbyinterestrisk.

2.Creditrisk

Creditriskistheriskthatonepartytoafinancialinstrumentwillcauseafinanciallossfortheotherpartybyfailingtodischargeanobligation.

ThemonetarycapitaloftheGroupotherthancashismainlydepositedincreditworthyfinancialinstitutions,andtheentrustedfinancialproductsareissuedbycreditworthyfinancialinstitutions.ThemanagementconsidersthatthereisnotanysignificantcreditriskanditisnotexpectedtocreatelossestotheGroupasaresultofdefaultbythecounterparty.

TheexposureofthemaximumcreditriskassumedbytheGroupisthebookvalueofeachfinancialassetinthebalancesheet(includingderivativefinancialinstruments).ExceptforthefinancialguaranteeprovidedbytheGroupinNoteXIV,theGrouphasnotprovidedanyotherguaranteethatmayexposetheGrouptocreditrisk.TheexposureofthemaximumcreditriskassumedbytheabovefinancialguaranteesonthebalancesheetdatehasbeendisclosedinNoteXVI.

TheCompany'screditriskisprimarilyattributabletoreceivables.Inordertocontrolsuchrisks,theCompanyhastakenthefollowingmeasures.

(1)Receivablesfinancingandnotesreceivable

ReceivablesfinancingandnotesreceivableoftheGroupismainlybankacceptancebillreceivable.TheGroupconductsongoingmonitoringonreceivables,toavoidsignificantrisksinbaddebts.

(2)Accountsreceivable

TheGrouponlyconductsbusinesswithcredibleandwell-reputedthirdparties.AccordingtotheGroup'spolicies,creditevaluationsareperformedonallcustomerstodeterminethecreditlimitandtermsapplicabletothecustomers.Inaddition,theGroupconductsongoingmonitoringonaccountsreceivable,toavoidsignificantrisksinbaddebts.(i)Continuetostrengthenriskawareness,strengthenriskmanagementofaccountsreceivable,andstrengtheninternalcontrolofcustomercreditpolicymanagement.Customercreditpolicyadjustmentsarerequiredtopassthenecessaryapprovalprocedures.(ii)Keepdetailedbusinessrecordsandaccountingwork.Andusetherecordsasimportantreferenceforfuturecreditrating.Keeprealtimeupdatingoncustomers'informationandlearntheirlatestcreditsituation,inordertomakesuitablecreditpolicies.

TheGroup'saccountsreceivablefromrelatedpartySEBS.A.anditssubsidiariesaccountedfor60.95%ofclosingbalance(December31,2022:50.14%),andtheGroup'saccountreceivablesareexpectedtohavelesscreditrisk.AstheCompany'screditrisksfallintoseveralbusinesspartnersandcustomers,asofDecember31,2023,21.00%(December31,2022:26.43%)ofthetotalaccountsreceivablewasduefromthefivelargestcustomersoftheCompanyafterdeductingreceivablesfromrelatedpartySEBS.A.TheCompanyhasnosignificantcentralcreditrisk.

(3)Otherreceivables

OtherreceivablesoftheGrouparemainlyexportrebatereceivableanddepositassecurityreceivable,etc.TheGroupperformedcollectivemanagementandongoingmonitoringonsuchreceivablesandrelatedbusinesstoavoidsignificantrisksinbaddebts.

3.Liquidityrisk

LiquidityriskistheriskthattheGroupmayencounterdeficiencyoffundsinmeetingobligationsassociatedwithcashorotherfinancialassetssettlement.Liquidityriskispossiblyattributabletofailureinsellingfinancialassetsatfairvalueonatimelybasis,orfailureincollectingliabilitiesfromcounterpartsofcontracts,orearlyredemptionofdebts,orfailureinachievingestimatedcashflows.

Inordertocontrolsuchrisk,theGroupoptimizesthestructureofassetsandliabilities,andfinallymaintainsabalancebetweenfinancingsustainabilityandflexibility.Financialinstrumentsclassifiedbasedonremainingtimeperiodtillmaturity

(Continued)

Note:Othercurrentassetsaretermdepositsforthepurposeofobtaininginterests.(II)TransferoffinancialassetsTransferredbutnotwhollyderecognizedfinancialassetsFordetails,pleasereferto"3.Notesreceivable"inNoteVIItothefinancialstatements.XIII.FairValueDisclosure

1.Fairvalueasofthebalancesheetdateoftheassetsandliabilitiesmeasuredatthefairvalue

2.Basisfordeterminingthemarketvalueofcontinuousandnon-continuousLevel1fairvaluemeasurementitemsNone

3.Qualitativeandquantitativeinformationofcontinuousandnon-continuousLevel2fairvaluemeasurementitems,valuationtechniquesadoptedandimportantparametersThefairvalueoffinancialassetsmeasuredatfairvaluethroughprofitorloss,includingwealthmanagementproducts,otherdebtinvestmentsandreceivablefinancingisdeterminedbasedonvaluationtechniques.Valuationtechniquesshouldmakeuseofobservablemarketdataasmuchaspossibleandrelylessonspecificestimatesfromentities.

4.Qualitativeandquantitativeinformationofcontinuousandnon-continuousLevel3fairvaluemeasurementitems,valuationtechniquesadoptedandimportantparametersNone

5.Fairvalueofthefinancialassetsandfinancialliabilitiesnotmeasuredatfairvalue

AsofDecember31,therewasnotasignificantdifferencebetweenthebookvalueandfairvalueoftheGroup'svariousfinancialassetsandfinancialliabilities.XI.Relatedpartsandrelatedtransactions

1.Parentcompany

ExplanationontheparentcompanyoftheGroupBusinessscopeoftheparentcompany:equityparticipationinallkindsofFrenchandoverseasenterprises(regardlessoperationpurpose),namely,purchaseandsubscriptionofstocks,bonds,companysharesandinterest,varioussecuritiesandmarketablesecurities,andtransferofsuchsecuritiesornotes,allfinancialoperationsrelatedtoequityparticipation,purchase,manufacturingandsellingofhomeappliancesforthepurposeofdistributionandrenderingofrelevantservices,allactivitiesdirectlyorindirectlycontributingtotherealizationoftheseoperations,particularlyintheareasofmovableproperties,realestate,finance,commerceandindustryoperation.TheGroup'sfinalcontrollingpartyisSEBS.A.

2.Company'ssubsidiaries

SeeNoteX"1.Equityinsubsidiaries"fordetailsontheCompany'ssubsidiariesfordetails.

3.JointventuresandassociatedenterprisesoftheCompany

SeeNoteX"2.Equityinjointventuresorassociatedenterprises"fordetailsontheCompany'ssignificantjointventuresandassociatesfordetails.DetailsofotherjointventuresorassociatedenterprisescarryingoutrelatedpartytransactionswiththeCompanyincurrentperiodorinPriorperiodbutwithbalanceincurrentperiodareasfollows:

4.OtherrelatedpartiesoftheCompany

5.Relatedtransactions

(1)Relatedtransactionsinthepurchaseandsaleofcommodities,andprovisionandacceptanceoflaborservicesPurchaseofcommoditiesandreceivingofservices

Saleofcommoditiesandrenderingofservices

(2)Relatedpartyleases

TheCompanyasthelessee:

(3)Fundallocationoftherelatedparts

(4)Keymanagement'semoluments

(5)Otherrelatedtransactions

①Waterandelectricityfee

②Propertymanagement,maintenanceandberthfees

③Consultingfee

④R&Dandhumanresourcesservices

⑤Warehousingservice

⑥Interestexpense

⑦Softwareuselicense,etc.

⑧PursuanttotheTechnicalLicenseContractenteredintobetweenWuhanSuporCookwareCo.,LtdandS.A.S.SEBonDecember29,2013,S.A.S.SEBlicensedWuhanSuporCookwareCo.,LtdcompensateduseofitspatentofHouseholdApplianceforFoodCookingunderPressurewithElastomerSafetyValveandotherfourutilitypatents.Accordingtorelatedtermsandconditionsinthecontractsignedbybothparties,usechargesareaccruedat3%ofrevenuefromsalesofproductslicensed.Inthecurrentperiod,WuhanSuporCookwareCo.,LtdshouldpayS.A.S.SEBtechnologyusechargesofRMB986,969.97(2022:RMB526,305.07),andasofDecember31,2023,abalanceofRMB111,278.17hasnotbeenpaid(December31,2022:RMB94,651.13).

⑨PursuanttotheTrademarkLicenseenteredintobetweenWuhanSuporCookwareCo.,LtdandLAGOSTINAS.P.A.onDecember15,2014,LAGOSTINAS.P.AlicensedWuhanSuporCookwareCo.,Ltdforcompensateduseofitstrademark"LAGE".Accordingtorelatedtermsandconditionsinthecontractsignedbybothparties,usechargesareaccruedat4%ofrevenuefromsalesofproductslicensed.Inthecurrentperiod,WuhanSUPORshouldpayLAGOSTINAS.P.A.trademarkusechargesofRMB1,071.69(2022:RMB43,093.45),andasofDecember31,2023,abalanceofRMB1,071.69hasnotbeenpaid(December31,2022:RMB1,395,659.11).

⑩PursuanttotheTrademarkLicenseenteredintobetweenOmegnaandLAGOSTINAS.P.A.onDecember5,2016,LAGOSTINAS.P.AlicensedOmegnaforcompensateduseofitstrademark"LAGE".Accordingtorelatedtermsandconditionsinthecontractsignedbybothparties,usechargesareaccruedat4%ofrevenuefromsalesofproductslicensed.Inthecurrentperiod,OmegnashouldpayLAGOSTINAS.P.A.trademarkusechargesofRMB6,525.10(2022:RMB66,105.73),andasofDecember31,2023,abalanceofRMB3,392,562.80hasnotbeenpaid(December31,2022:RMB3,989,846.80).

ShaoxingSuporpurchasedandusedparticlesproductofairpurifierandrelevanttechnologyinaccordancewithAgreementonPurchaseandUsingforParticlesofAirPurifiersignedbyShaoxingSuporonApril25,2016withETHERA.Accordingtorelevanttermsandconditionsinthecontractsignedbybothparties,ShaoxingSuporshouldpaytechnologytransferfeeRMB8,621.96(2022:

RMB22,268.70)toETHERAincurrentperiod,whichwascalculatedaspercorrespondingunitpriceofactualtotalsales.UntilDecember31,2023,allpaymentshavebeenmade(December31,2022:RMB4,424.04).

6.Receivablesandpayablesbyrelatedparties

(1)Receivables

(2)Payables

XV.Share-basedpayment

1.Overallinformation

OutstandingstockoptionsorotherequityinstrumentsattheendoftheperiodApplicable□NotapplicableRestrictedstockincentiveplansfor2021and2022:

2023StockOptionIncentivePlan:

2.Equity-settledshare-basedpayment

3.Share-basedpaymentexpensesforthisyear

XII.Commitmentsandcontingencies

1.Contingencies

(1)Significantcontingenciesatthebalancesheetdate

(2)AstatementshallbegiveneveniftheCompanyhasnosignificantcontingenciestodisclose.TheCompanyhasnosignificantcontingenciestodisclose.XVII.Eventsafterthebalancesheetdate

1.Profitdistribution

Accordingtotheprofitdistributionplanfor2023adoptedatthe7thSessionoftheEighthBoardofDirectorsoftheCompanyonMarch29,2024,Companydistributescashdividendof796,891,157sharesattheendof2023(totalsharecapitalof806,708,657sharesattheendof2023deductedby9,817,500sharesofspecialsecuritiesaccountforrepurchase),acashdividendofRMB27.30(tax-

inclusive)per10sharesisdistributedtoallshareholders,andthetotalcashdividendwasRMB2,175,512,858.61.NobonussharewillbedistributedorconversionfromcapitalreservestosharecapitalismadethisyearTheundistributedprofitsofparentcompanyattheendofthereportingperiodwereRMB3,782,559,441.04,includingthedividendstobedistributedRMB2,175,512,858.61.Duringtheperiodfromthedisclosureofthisprofitdistributionplantotheactualimplementationdate,iftheCompany'ssharecapitalchangesduetoconversionofconvertiblebondsintostocks,sharerepurchases,equityincentiveexercise,andrefinancingandnewsharelisting,itwillbeexecutedbasedonthechangedsharecapital,andtheabovedistributionratioremainsunchanged.ThisprofitdistributionplanshallbesubmittedtotheAnnualGeneralMeetingofShareholdersfor2023FiscalYearforapprovalafteradoptedbytheBoardofDirectors.XVIII.Otherimportantmatters

1.Segmentinformation

(1)Determinationbasisandaccountingpolicyofreportsegment

TheGroupestablishesoperatingsegmentaccordingtointernalorganizationalstructure,managementrequirementandinternalreportsystem;determinesreportsegmentanddisclosesegmentinformationbasedonOperatingSegment.OperatingSegmentreferstotheGroup'sorganizationmeetingfollowingconditions:(1)Theorganizationcanyieldrevenueandcostindailyactivity;(2)TheGroup'smanagementcanappraiseoperatingresultoftheorganizationregularlytoallocateresourcesonatargetedbasisandevaluateitsperformance;(3)TheGroupcanobtainfinancialcondition,operatingresult,cashflowandotherrelevantaccountinginformationoftheorganization.Twoormoreoperatingsegments,whichhavesimilareconomiccharacteristicsandmeetacertaincondition,canbecombinedintoanoperatingsegment.Thepreparationofsegmentreportsisconductedwiththerevenueoftrans-branchtransactionmeasuredattheactualtransactionprice.TheaccountingpolicyforsegmentreportpreparationisconsistentwiththatusedinSupor'sfinancialstatement.

TheGroup,withmainproductfocusedoncookwareandSDA(smalldomesticappliances)inkitchen,establishesreportsegmentbasedonproductandgeographicsegmentsandassetsandliabilitiessharedbyproductsegmentsisunabletobeclearlydistinguished.

(2)Financialinformationofreportablesegments

(3)Otherexplanations

②Geographicsegment

InformationontheGroup'srevenuefromexternaltransactionsandnon-currentassets(excludingfinancialassetsanddeferredincometaxassets,thesamebelow)byregionisshowninthefollowingtable.Revenuefromexternaltransactionsisdividedaccordingtothelocationofcustomerswhoreceiveservicesorpurchaseproducts.Non-currentassetsareclassifiedasperthephysicallocationoftheassets(forfixedassetsandconstructioninprogress)orthelocationwheretheyareallocatedtorelatedbusiness(forintangibleassets)orthelocationofjointventuresandassociatedenterprises.

③Majorcustomers

AmongtheGroup'scustomers,onecustomer(2022:1)whoserevenuefromasinglecustomeraccountedfor10%ormoreoftheGroup'stotalrevenuewasrelatedpartySEBS.A.anditssubsidiaries,accountingforapproximately27.45%(2022:23.18%)oftheGroup'stotalrevenue.XIX.Notestoitemsofparentcompanyfinancialstatements

1.Accountsreceivable

Categoriesforbaddebtsprovision:Portfolio1Provisionforbaddebtsmadeonaportfoliobasis:RMB15,395,153.38

Ifyes,aprovisionforbaddebtsforaccountsreceivableshallbeaccruedaccordingtothegeneralmodelofexpectedcreditloss:

(4)Accountsreceivableandcontractassetdetailsofthetop5closingbalancesbydebtors

2.Otherreceivables

Provisionforbaddebtsmadeonanindividualbasis:RMB1,187,578.89

Provisionforbaddebtsmadeonaportfoliobasis:RMB947,162.54

Changesinbookbalanceoflossprovisionduetosignificantchangesinthecurrentperiod

6)Presentedinotherreceivablesduetocentralizedfundmanagement

3.Long-termequityinvestment

(1)Investmentsinsubsidiaries

(2)Investmentsinassociatesandjointventures

4.Operatingincomesandcosts

Attheendofthisreportingperiod,therevenuefromtheperformanceobligationsthathavenotbeenfulfilledorcompletelyfulfilledunderexistingcontractisRMB1,702,589.31,ofwhichRMB1,702,589.31isexpectedtoberecognizedasincomein2024.

5.Investmentincomes

XX.SupplementaryData

1.Breakdownofnon-recurringprofitorlossinthecurrentperiod

2.Returnonnetassetsandearningspershare

3.FinancialDataDifferenceonPrincipleofDomesticandOverseaAccounting

(1)NetprofitandnetassetsdiscrepanciesinfinancialstatementsdisclosedseparatelyunderInternationalAccountingStandardsandChineseAccountingStandards

(3)Thereasonofaccountingdatadifferenceunderdomesticandforeignaccountingstandardshallbeexplained.Ifthedataauditedbytheforeignauditorganizationcarriesoutthedifferentadjustment,thenameofforeignorganizationshallbeindicated.

ZhejiangSuporCo.,Ltd.Chairman:ThierrydeLATOURD'ARTAISE