老板电器：2023年半年度报告（英文版）

Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 August 2023Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 1 Chapter 1 Important Notes, Contents and Interpretations The Board of Directors, the Board of Supervisors, as well as the directors, supervisors and senior management of Hangzhou Robam Appliances Co., Ltd. (the Company) hereby guarantee that there are no false representations, misleading statements, or material omissions in this Semi-Annual Report (“the Report”), and are severally and jointly liable for the authenticity, accuracy and completeness of the information contained herein. Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’s accounting, and Zhang Guofu, the head of the accounting department (the accountant in charge) hereby declare and warrant that the financial report contained in the Report is authentic, accurate, and complete. All the directors attended a Board meeting during which they reviewed the Report. The Company is exposed to risks such as fluctuations in the real estate market policies, fluctuations in raw material prices and intensified market competition. Investors are advised to be aware of the investment risks. The Company does not plan to distribute cash dividends or bonus shares, or convert capital reserve into capital stock. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 Contents Chapter 1 Important Notes, Contents and Interpretations .................................................................................1 Chapter 2 Company Profile and Major Financial Indicators .............................................................................3 Chapter 3 Management Discussion and Analysis .................................................................................................6 Chapter 4 Corporate Governance ........................................................................................................................15 Chapter 5 Environmental and Social Responsibilities .......................................................................................18 Chapter 6 Significant Matters ..............................................................................................................................19 Chapter 7 Changes in Shares and Shareholders .................................................................................................23 Chapter 8 Preferred Shares ..................................................................................................................................28 Chapter 9 Bonds ....................................................................................................................................................29 Chapter 10 Financial Report ................................................................................................................................30 5 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 1 Documents Available for Reference I. Financial statement signed by the legal representative, the person in charge of accounting and the head of the accounting department and affixed with seal. II. Original copies of documents and announcements of the Company published in the newspaper designated by China Securities Regulatory Commission during the reporting period. III. The Semi-Annual Report 2023 signed by the legal representative IV. Other information. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 2 Interpretations Item refer(s) to Contents The Company, Company, Robam Appliances refer to Hangzhou Robam Appliances Co., Ltd. MingQi refers to Hangzhou MingQi Electric Co., Ltd. Kinde Subsidiary refers to Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. Robam Group refers to Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company The reporting period refers to The first half of 2023 AVC refers to Beijing All View Cloud Data Technology Co., Ltd. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 3 Chapter 2 Company Profile and Major Financial Indicators I. Company Profile Stock abbreviation Robam Stock code 002508 Stocks traded on Shenzhen Stock Exchange Chinese name of the Company Hangzhou Robam Appliances Co., Ltd. Short Chinese name of the Company (if any) Robam Short English name of the Company (if any) ROBAM Legal representative of the Company Ren Jianhua II. Contact Person and Contact Information Secretary of the Board of Directors Representative of securities affairs Name Wang Gang Jiang Yu Contact address No.592, Linping Avenue, Linping District, Hangzhou City, Zhejiang Province No.592, Linping Avenue, Linping District, Hangzhou City, Zhejiang Province Telephone 0571--861878100571--86187810 Fax 0571--861877690571--86187769 E-mail wg@robam.com jy@robam.com III. Other Information 1. Contact information Whether the registered address, office address and zip code as well as the website and email address of the Company changed during the reporting period □Applicable Not applicable There were no changes in the registered address, office address and zip code as well as the website and email address of the Company during the reporting period. For details, please refer to the Annual Report 2022. 2. Information disclosure and filing location Whether the information disclosure and filing locations changed during the reporting period □Applicable Not applicable During the reporting period, there were no changes in the website of stock exchange and name and website of media designated for information disclosure of the semi-annual report and the location for filing the semi-annual report of the Company. For details, please refer to the Annual Report 2022. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 4 3.Other information Whether other relevant information changed during the reporting period □Applicable Not applicable IV. Key Accounting Data and Financial Indicators Whether the Company needs to retroactively adjust or restate the accounting data of previous years □ Yes No The reporting period The same period last year YoY change Operating Income (RMB) 4,934,869,800.154,444,310,099.6911.04% Net profit attributable to shareholders of the listed company (RMB) 829,718,350.69723,549,381.2514.67% Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses (RMB) 746,691,977.38635,845,084.0717.43% Net cash flow from operating activities (RMB) 959,732,853.23322,855,122.33197.26% Basic earnings per share (EPS) (RMB/share) 0.870.7614.47% Diluted EPS (RMB/share) 0.870.7614.47% Weighted average return on net assets 8.24% 8.05% An increase of 0.19% End of the reporting period End of last year Change Total assets (RMB) 15,376,337,927.7115,039,825,287.532.24% Net assets attributable to shareholders of the listed company (RMB) 10,093,608,301.199,732,463,766.913.71% V. Differences in Accounting Data under Domestic and Foreign Accounting Standards 1. Whether there are differences in the net profit and net asset disclosed in the Financial Report under International Accounting Standards (IAS) and China’s accounting standards □Applicable Not applicable There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standards during the reporting period. 2. Whether there are differences in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s accounting standards during □Applicable Not applicable There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s accounting standards during the reporting period. VI. Items and Amounts of Non-recurring Gains and Losses Applicable □Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 5 In RMB Item Amount Description Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) -576,982.36 Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) 60,521,206.11 Reversal of impairment provision for accounts receivable tested for impairment separately 38,556,641.14 Other non-operating revenues and expenses except the above items 1,354,348.96 Less: Affected amount of income tax 15,524,210.60 Affected amount of minority shareholders’ equity (after tax) 1,304,629.94 Total 83,026,373.31 Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Profits and Losses (referred to as “Announcement No.1”) are defined as recurring profits and losses Applicable Not applicable Item Amount Reasons VAT exemption, reduction or refund 9,453,997.74 National tax policy, regular business Refund of individual income tax handling fee 684,354.91 National tax policy, regular business Total 10,138,352.65 — Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 6 Chapter 3 Management Discussion and Analysis I. Main Businesses during the Reporting Period In the first half of 2023, with the gradual implementation of national macroeconomic policies, the real estate industry has shown a gradual recovery in prosperity, and the kitchen appliance industry has experienced a moderate rebound overall. In terms of the retail channel, as shown in AVC monthly data report based on offline retail market monitoring (“AVCOffline Report”), the year-on-year (YoY) growth of the retail sales of the main categories of kitchen appliances, i.e. range hoods and gas stoves, registered 7.6% and 2.2% respectively. In terms of the e-commerce channel, as shown in AVC monthly data report based on online retail market monitoring (“AVCOnline Report”), the YoY growth of the retail sales of the kitchen appliances package registered 14.6%. In terms of the engineering channel, as shown in the AVCReal Estate Big Data (“AVCReal Estate Report”), due to the sluggish sales of new houses, there were 375,800 sets of newly launched houses with fine decoration in the first half of the year, a YoY decrease of 45.1%; the penetration rate of fine decoration projects was 37.7%, a decrease of 2.4 percentage points compared to that in the previous year. The installation rates of range hoods and gas stoves were 96.4% and 96.3% respectively, which remain basically unchanged compared to the same period last year; the penetration rate of dishwashers was 38.5%, an increase of 7.1 percentage points compared to the same period last year. In the first half of 2023, thanks to the implementation of the “ensuring timely delivery of presold homes” policy, the area of completed commercial residential buildings reached 246.036 million square meters, a YoY growth of 18.5%. It is expected that 2023 will become a significant year of housing delivery in the market. The Company has a solid leading position in the industry. According to the AVCOffline Report, the retail sales and its market share of Robam range hood were 31.0% and 25.8% respectively, while the retail sales and its market share of Robam gas stove were 30.4% and 23.1% respectively. As shown in the AVCOnline Report, the retail sales and its market share of Robam kitchen appliance package were 32.0% and 24.6% respectively, all the above indexes ranking first in the industry. In the first half of 2023, closely focusing on the annual business philosophy of “Creating a Dream for Long Journey, Winning through Innovation - Creating a New Future for Digital Kitchen Appliances”, the Company achieved a revenue of RMB 4.935 billion, a YoY growth of 11.04%, and a net profit attributable to the owners of the listed company of RMB 830 million, a YoY growth of 14.67%, both exceeding the industry average level. As of June 30,2023, according to AVCOffline Report, the market shares and market rankings of the Company’s main product categories in terms of offline retail sales are shown in the following table: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 7 Range hoods Gas stove Disinfection cabinet Built-in combi-steam oven Built-in electric steam oven Built-in electric oven Built-in dishwasher 31.0% 30.4% 20.3% 30.3% 25.3% 23.0% 15.7% 1121223 As of June 30,2023, according to AVCOnline Report, the market shares and market rankings of the Company’s main product categories in terms of online retail sales are shown in the following table: Kitchen appliance package 2-piece package of range hood and stove Range hoods Gas stove Built-in combi-steam oven Built-in electric steam oven Built-in dishwasher 32.0% 33.4% 17.5% 11.6% 11.3% 17.7% 7.5% 1114334 As of June 30,2023, according to AVCReal Estate Report, the market share of Robam range hoods in the fine decoration channel was 34.8%, ranking No.1 in the industry. In the first half of 2023, for the technology sector, the Company continued to lead industry innovation and drive culinary transformation. The release of Creator i7 – the AI-powered new flagship product in digital kitchen appliances has comprehensively improved the functions such as gas stove compatible automatic cooking, user interaction and automation experience, and the Company published the Digital Cooking Standard for Healthy Home jointly with the China Household Electric Appliance Research Institute, further promoting the healthy and orderly development of digital kitchen appliances. As of June 30,2023, a total of 3,858 patents have been granted to the Company, including 119 invention patents; the Company has participated in the formulation of a total of 136 standards, and the Company took the lead in developing 35 of them. In addition, the Company’s technological innovation capabilities have been continuously recognized by the industry, and it won the first and second prizes of the Science and Technology Progress Award of the China National Light Industry Council in 2023. The range hood (CG51X2) also won the China Excellent Design Patent Award. In the first half of 2023, as for the marketing, the Company adhered to its high-end brand positioning, and met the multi-dimensional needs of customers by centering on customers, with multiple brands and channels empowering each other for synergetic development. In terms of the retail channel, with traditional retail flow rebounding, exclusive shop system developed steadily, expanding channels grew rapidly, and innovative channels are poised for development; from the user side, the Company plans to promote worry-free kitchen renovation service and upgrade service experience. In terms of the E-commerce channel, the Company deeply tapped into user value, fully utilized flow resources, and enhanced channel efficiency through multi-category synergy. In terms of the engineering channel, in the context of the “ensuring timely delivery of presold homes” policy driving real estate market growth, the Company strictly controlled channel risks and optimized customer structure, significantly improving cash flow. For the overseas channel, the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 8 Company steadily promoted its global layout and the internationalization of the brand. In addition, the Robam brand has comprehensively supported MingQi brand by upgrading its organizational resources, brand potential, product innovation and channel expansion, and exploring the new retail development path of MingQi brands. It has also collaborated with sub-brands such as Kinde, DACHOO and ROKIDigital Kitchen Appliances to build a new brand matrix, achieving diversity integration for creating a joint development path. In the first half of 2023, as for production, with the core of “refining and leading innovation”, the Company focuses on refining and enhancing aspects related to product category, suppliers, manufacturing processes, and market presence, striving to become one of the strongest manufacturing benchmarks in China’s manufacturing industry. It was awarded the “2022 National Quality Benchmark” by the China Association for Quality. To better serve users, the Company built differentiated manufacturing and supply capabilities and enhanced quality control and product delivery capabilities; to better make use of resources, the Company promoted whole-process inventory management and established a cost control system with comprehensive competitive advantages; through evolution and innovation, the Company aimed to construct an integrated supply chain and a digitalized transparent future factory. The Maoshan Intelligent Manufacturing Park Project has been officially put into use, further achieving cost reduction and efficiency improvement and realizing continuous improvement of production efficiency and production benefits. In the first half of 2023, as for brand, the Company continued to build the brand image as the premier Chinese high-end kitchen appliance brand that best understands Chinese cooking. It also held the “Feeling Free to Cook and the Digital Kitchen Appliance Technology New Product Release Conference”. Multiple products such as the Lingxi fully automatic range hood and stove, Guangyan integrated washing and disinfection machine, Digital Kitchen Appliance Creator series and high-performance integrated stove appeared at the 2023 China Appliance & Electronics World Expo (AWE). Dishwasher S1 plus, combi-steam oven CQ928, and Digital Kitchen Appliance Creator i1 won the Excellent Product Prize, Design Prize, and Smart Technology Prize of AWEAward respectively. In addition, the Company held a series of activities such as the Chinese Culinary Banquet, the First Chinese Cooking Competition and the Third Dishwasher Festival; Robam also sponsored the reality show “It Sounds Incredible”, appeared on “CCTVFinance and Economics” Channel and joined hands with Wang Yibo to launch the theme activity of “Pampering Your Hands”, helping the dishwasher category to be accepted by more circles of people and accelerating its popularization. All these activities contributed to the ongoing exposure and influence of the brand. As the exclusive supplier of household kitchen appliances for the 19th Asian Games Hangzhou 2022, the Company empowered the Asian Games with innovative technology which further supported the promotion of the 19th Asian Games Hangzhou 2022, contributed to the ecological construction of the 19th Asian Games Hangzhou 2022, and made its efforts in creating this sports and Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 9 cultural event with “Chinese style, Zhejiang characteristics, Hangzhou charm, and shared development”. In the first half of 2023, the Company continued to gain recognition from the capital market in terms of corporate governance, information disclosure and shareholder returns. It has been rated as A level (excellent) in the information disclosure assessment on listed companies by the Shenzhen Stock Exchange for nine consecutive years. Meanwhile, based on improvement and excellent performance in corporate governance and employee welfare programs, its MSCI ESG has been rated as A level and ranks among the top in the global peer (household durable goods) companies. In order to implement common prosperity and establish a normalized incentive mechanism, the Company has launched the 2023 Stock Option Incentive Plan to provide stock option incentives for the Company’s middle-level key business and technical backbone staff, thereby consolidating the long-term development foundation of the Company.2023 is the starting year of the Company’s new three-year strategy. The Company will continue to focus on cooking and build a new core competitiveness based on “technology + humanity” to achieve long-term stable and high-quality development. II. Analysis of Core Competitiveness There is NO material change in the Company’s core competitiveness during the reporting period. The Company’s core competitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation, comprehensive and efficient operation capability, as shown in the Annual Report 2022. III. Analysis of Main Business Overview See the relevant content in the “I. Main Businesses during the Reporting Period”. Year-on-year changes in key financial data In RMB The reporting period The same period last year YOY change Reason for change Operating income 4,934,869,800.154,444,310,099.6911.04% Operating costs 2,372,095,971.502,240,019,882.535.90% Sale expenses 1,360,821,373.411,184,704,589.5214.87% Administrative expenses 203,425,816.25183,583,864.5710.81% Financial expense -68,958,985.09 -62,275,458.91 Not Applicable Income tax expense 151,830,927.51131,172,418.8615.75% Net cash flow from operating activities 959,732,853.23322,855,122.33197.26% Due to the increase in sales outstanding for this period. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 10 Net cash flow from investment activities 63,023,246.17 -275,734,087.51 Not Applicable Net cash flow from financing activities -443,777,479.65 -443,071,536.06 Not Applicable Net increase in cash and cash equivalents 581,455,567.34 -392,838,975.59 Not Applicable Due to the increase in sales outstanding for this period. Major changes on profit composition or profit resources in reporting period □Applicable Not applicable No major changes on profit composition or profit resources occurred in reporting period Composition of operating income In RMB The reporting period The same period last year YOY change Amount % of operating income Amount % of operating income Total operating income 4,934,869,800.15100% 4,444,310,099.69100% 11.04% By industry Kitchen and bathroom appliances 4,793,316,106.7697.13% 4,317,490,105.8897.15% 11.02% Other operating income 141,553,693.392.87% 126,819,993.812.85% 11.62% By product category Category 1 Incl: Range hood 2,324,953,220.9147.10% 2,074,153,523.0246.68% 12.09% Gas stove 1,183,171,484.3823.98% 1,057,307,687.1023.79% 11.90% Disinfection cabinet 208,586,939.174.23% 197,092,502.714.43% 5.83% Category 2 Incl: All-purpose oven 317,829,778.226.44% 358,429,402.298.06% -11.33% Steam oven 33,863,980.470.69% 47,657,561.061.07% -28.94% Baking oven 33,333,913.560.68% 39,476,578.270.89% -15.56% Category 3 Incl: Dishwasher 331,655,582.506.72% 246,993,832.575.56% 34.28% Water purifier 19,178,086.590.39% 27,217,675.160.61% -29.54% Water heater 96,459,546.771.95% 85,479,990.001.92% 12.84% Integrated stove 204,932,714.334.15% 145,144,422.163.27% 41.19% Other small appliances 39,350,859.860.80% 38,536,931.540.87% 2.11% Other operating income 141,553,693.392.87% 126,819,993.812.85% 11.62% By region East China-Main Products 2,465,263,265.3349.96% 2,188,169,639.9949.24% 12.66% East China-Others 141,553,693.392.87% 126,819,993.812.85% 11.62% South China 505,445,895.6010.24% 540,221,730.0712.16% -6.44% Central China 414,023,176.198.39% 400,497,450.219.01% 3.38% North China 519,977,554.2510.54% 454,151,283.4910.22% 14.49% Northeast China 264,181,426.545.35% 195,279,872.464.39% 35.28% Northwest China 268,067,121.495.43% 221,418,193.904.98% 21.07% Southwest China 328,679,596.666.66% 290,681,625.766.54% 13.07% Overseas 27,678,070.700.56% 27,070,310.000.61% 2.25% Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 11 Industries, products and regions accounting for more than 10% of the Company’s operating income or profit Applicable □Not applicable In RMB Operating income Operating costs Gross margin YoY change in operating income YoY change in operating costs YoY change in the gross margin By industry Kitchen and bathroom appliances 4,793,316,106.762,305,082,060.1151.91% 11.02% 4.53% 2.98% By product category Range hoods 2,324,953,220.911,043,996,959.6755.10% 12.09% 1.91% 4.49% Gas stove 1,183,171,484.38514,362,626.9056.53% 11.90% 6.68% 2.13% By region East China 2,465,263,265.331,121,781,782.2954.50% 12.66% 3.82% 3.88% South China 505,445,895.60261,724,564.7448.22% -6.44% -10.73% 2.49% North China 519,977,554.25232,661,198.6055.26% 14.49% 6.55% 3.33% Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of the reporting period is applied in case that the statistical caliber of such data is adjusted during the reporting period □Applicable Not applicable IV. Analysis of Non-core Business □Applicable Not applicable V. Analysis of Assets and Liabilities 1. Significant changes in assets composition In RMB End of the reporting period End of last year Change in percentage Note on significant changes Amount % of total assets Amount % of total assets Cash and cash equivalents 5,878,791,380.0638.23% 5,292,762,670.9435.19% 3.04% Accounts receivable 1,781,653,759.3411.59% 1,689,606,828.9411.23% 0.36% Inventory 1,532,632,739.879.97% 1,610,110,798.1010.71% -0.74% Investment real estate 94,803,614.180.62% 55,887,198.540.37% 0.25% Long-term equity investment 7,455,321.570.05% 8,718,505.620.06% -0.01% Fixed assets 1,585,824,017.2110.31% 1,622,235,227.7410.79% -0.48% Construction in process 463,232,352.923.01% 406,258,146.692.70% 0.31% Right of use assets 16,540,637.280.11% 22,220,144.130.15% -0.04% Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 12 Short-term borrowings 82,865,891.920.54% 51,723,429.990.34% 0.20% Contract liabilities 941,928,841.936.13% 959,915,567.036.38% -0.25% Lease liabilities 14,115,619.440.09% 18,588,966.670.12% -0.03% 2. Major overseas assets □Applicable Not applicable 3.Assets and liabilities measured at fair value □Applicable Not applicable 4.Restricted asset rights by the end of the reporting period Item Ending book value Reasons for limit Cash and cash equivalents 100,908,470.98 Letters of guarantee and bill acceptance margin Cash and cash equivalents 13,000.00 ETC security deposits Investment real estate 6,120,022.18 Collateral for bank loans Fixed assets 95,880,347.37 Collateral for bank loans Total 202,921,840.53 — VI. Analysis of Investment 1. Overview □Applicable Not applicable 2. Major equity investments obtained during the reporting period □Applicable Not applicable 3. Major ongoing non-equity investments during the reporting period □Applicable Not applicable 4. Financial asset investment (1) Securities investment □Applicable Not applicable The Company had no securities investment during the reporting period. (2) Derivative investment □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 13 The Company had no derivatives investment during the reporting period. 5. Use of the raised funds □Applicable Not applicable The Company did not use the raised funds during the reporting period. VII. Sale of Major Assets and Equities 1. Sale of major assets □Applicable Not applicable The Company did not sell major assets during the reporting period. 2. Sale of major equities □Applicable Not applicable VIII. Analysis of Main Holding and Joint-stock Companies Applicable □Not applicable Main subsidiaries and joint-stock companies affecting more than 10% of the Company’s net profit In RMB Company name Company type Main business Registered capital Total assets Net assets Operating income Operating profit Net profit Beijing Robam Appliances Sales Co., Ltd. Subsidiary Sales of kitchen appliances 5,000,00083,686,746.3741,316,274.79124,448,419.33914,059.98204,752.21 Shanghai Robam Appliances Sales Co., Ltd. Subsidiary Sales of kitchen appliances 5,000,000107,238,646.69 -8,321,381.44210,721,410.31 -10,612,385.56 -10,833,514.39 Hangzhou MingQi Electric Co., Ltd. Subsidiary Sales of kitchen appliances 50,000,000179,359,426.1050,484,973.40162,787,949.64466,736.71281,710.98 Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. Subsidiary Sales of kitchen appliances 32,653,061454,076,336.98241,351,314.2667,284,556.69 -11,053,509.60 -10,892,781.85 Hangzhou Jinhe Electric Appliances Co., Ltd. Subsidiary Sales of kitchen appliances 10,000,000206,425,581.8417,246,551.33229,711,484.236,840,175.585,129,567.07 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 14 Acquisition and disposal of subsidiaries during the reporting period □Applicable Not applicable Description of main holding and joint-stock companies IX. Structured Entities Controlled by the Company □Applicable Not applicable X. Risks faced and countermeasures taken by the Company (1) Risk of fluctuations in the real estate market The Company is long engaged in the kitchen business, offering various kitchen appliances, such as range hoods, gas stoves, dishwashers, combi-steam oven, disinfection cabinets, integrated stoves, etc. The demands for kitchen appliances are closely related to the kitchen decoration, with certain "decoration" and "furniture" attributes. At present, the demand for our main products is still closely related to the real estate market. The Company has certain anti-fluctuation ability by virtue of its market leadership, although fluctuations in the real estate market will still have an impact on the Company’s operating results. (2) Risk of price fluctuation of raw materials The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet, copper and glass, etc., whose price fluctuations will directly affect the cost of the Company’s products and in turn have an impact on its profitability. (3) Risk of intensified market competition In recent years, due to the tightening macro environment of the kitchen appliance industry, the continuous increase in industry concentration, the comprehensive brands' increasing investment in the kitchen appliance market and the entry of Internet brands, the market competition in the kitchen appliances industry has become increasingly fierce, and the intensification of market competition will have a certain impact on the Company’s operating results. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 15 Chapter 4 Corporate Governance I. Annual General Meeting of Shareholders and Extraordinary General Meeting of Shareholders during the Reporting Period 1. General Meeting of Shareholders during the reporting period Session of meeting Type of meeting Proportion of attending investors Date of meeting Date of disclosure Resolutions 2022 Annual General Meeting of Shareholders Annual General Meeting of Shareholders 61.55% May 18,2023 May 19,2023 The Announcement of Resolutions of the 2022 Annual General Meeting of Shareholders of Robam Appliances (Announcement No. 2023-025) 2. Preferred shareholders with voting rights recovered requested to convene an extraordinary general meeting of shareholders □Applicable Not applicable II. Changes in Directors, Supervisors and Senior Management □Applicable Not applicable There was no change in directors, supervisors, and senior management of the Company during the reporting period. For details, please refer to the Annual Report 2022. III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during the Reporting Period □Applicable Not applicable The Company has no plans of distributing cash dividends or bonus shares, or converting capital reserve into capital stock for the first half of 2023. IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or other Employee Incentives Applicable □Not applicable 1. Equity incentive 2021 Stock Option Incentive Plan: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 16 1. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors on April 25,2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2021 Stock Option Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions during the Second Exercise Period of the 2021 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it and expressed its agreement, and the independent directors of the Company expressed their independent opinion on it. 2. On May 9,2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the cancellation of the aforementioned 945,000 stock options has been completed. The Company cancelled a total of 945,000 stock options, accounting for 0.10% of the Company's current total capital stock. This cancellation of stock options complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., and the provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and the cancellation will not have any impact on the Company's capital stock. The capital stock structure remains unchanged. 2022 Stock Option Incentive Plan: 1. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors on April 25,2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2022 Stock Option Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions during the Second Exercise Period of the 2022 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it and expressed its agreement, and the independent directors of the Company expressed their independent opinion on it. 2. On May 9,2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the cancellation of the aforementioned 1,609,000 stock options has been completed. The Company cancelled a total of 1,609,000 stock options, accounting for 0.17% of the Company's current total capital stock. This cancellation of stock options complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., and the provisions of the Incentive Plan (Draft), etc. The stock options to be cancelled this time have not been exercised, and the cancellation will not have any impact on the Company's capital stock. The capital stock structure remains unchanged. 2023 Stock Option Incentive Plan: 1.On April 25,2023, the Company held the 14th meeting of the 5th Board of Directors, deliberating and adopting the Proposal on 2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals, and the independent directors expressed their independent opinions on and approved the matters related to the Company’s 2023 Stock Option Incentive Plan. The 14th meeting of the 5th Board of Supervisors of the Company deliberated and adopted the above-mentioned proposals and expressed its concurring opinion. The Company disclosed the above matters on April 26,2023. 2. From April 26,2023 to May 8,2023, the Company internally disclosed the names and titles of the incentive targets of the stock option incentive plan. On May 9,2023, the Company’s Board of Supervisors published the Review Opinions of the Board of Supervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2023 and Explanation on the Publicity. On the same day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders and Incentive Targets of the Stock Option Incentive Plan in 2023. 3. On May 18,2023, the Company held the 2022 Annual General Meeting of Shareholders, and deliberated and adopted the Proposal on 2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals. The Plan was Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 17 approved by the Company's 2022 Annual General Meeting of Shareholders and the Board of Directors was authorized to determine the stock option grant date on which stock option will be granted to the incentive targets when they are eligible and all matters relevant to the grant of stock option shall be handled. 4. On June 20,2023, the 15th meeting of the 5th Board of Directors and the 15th meeting of the 5th Board of Supervisors of the Company deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of Supervisors verified the list of incentive targets again and expressed its agreement, and the independent directors of the Company expressed their independent opinion on it. 5. On July 4,2023, the Company completed the registration of the stock option plan granting. The actual number of incentive targets for this stock option incentive plan was 325, and the total number of stock options granted was 5.52 million, accounting for approximately 0.58% of the current total capital stock of the Company. 2. Implementation of the employee stock ownership plan □Applicable Not applicable 3. Other employee incentive plans □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 18 Chapter 5 Environmental and Social Responsibilities I. Major Environmental Issues Whether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental protection authorities. □Yes No Administrative penalties due to environmental issues during the reporting period. Name of company or subsidiary Reasons for penalties Violations Penalties Impact on the production and operation of the listed company The Company's rectification measures None None None None None None Refer to other environmental information disclosed by key pollutant discharging units. None Measures taken to reduce carbon emissions during the reporting period and their effects □Applicable Not applicable Reasons for not disclosing other environmental information None II. Social Responsibility The Company discloses its annual CSRReport or ESGReport, as detailed in the Robam Appliances 2022 ESGReport disclosed on . Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 19 Chapter 6 Significant Matters I. Commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting period □Applicable Not applicable I. There were no commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting period II. Non-operating Occupation of Funds of the Listed Company by the Controlling Shareholder and Other Affiliated Parties □Applicable Not applicable There was no non-operating occupation of funds of the listed company by the controlling shareholder and other affiliated parties during the reporting period. III. Illegal External Guarantee □Applicable Not applicable There was no illegal external guarantee during the reporting period. IV. Appointment and Dismissal of Accounting Firm Whether the semi-annual financial report has been audited □Yes No The semi-annual financial report of the Company has not been audited. V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standard Audit Report” Issued by the Accounting Firm for the Reporting Period □Applicable Not applicable VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the Last Year □Applicable Not applicable VII. Matters Related to Bankruptcy Reorganization □Applicable Not applicable The Company did not have any matters related to bankruptcy reorganization during the reporting period. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 20 VIII. Litigation Matters Material litigation and arbitration □Applicable Not applicable The Company had no major litigation and arbitration during the reporting period. Other litigation matters □Applicable Not applicable IX. Punishment and Rectification □Applicable Not applicable X. Integrity Conditions of the Company and its Controlling Shareholders □Applicable Not applicable XI. Major Connected Transactions 1. Connected transactions concerning daily operations □Applicable Not applicable The Company had no connected transactions concerning daily operations during the reporting period. 2. Connected transactions related to the acquisition or sales of assets or equity □Applicable Not applicable The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period. 3. Connected transactions related to joint outward investment □Applicable Not applicable The Company had no connected transactions related to joint outward investment during the reporting period. 4. Connected transactions on credit and debt □Applicable Not applicable The Company had no connected transactions on credit and debt during the reporting period. 5.Transactions with connected finance companies □Applicable Not applicable There were no deposits, loans, credits or other financial operations between the Company and connected finance companies and affiliates. 6.Transactions between finance companies controlled by the Company and affiliates □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 21 There were no deposits, loans, credits or other financial operations between finance companies controlled by the Company and affiliates. 7. Other major connected transactions □Applicable Not applicable There were no other major connected transactions during the reporting period. XII. Major Contracts and Their Performance 1. Entrustment, contracting and leasing (1) Entrustment □Applicable Not applicable The Company had no entrustment during the reporting period. (2) Contracting □Applicable Not applicable There was no contracting during the reporting period. (3) Leasing □Applicable Not applicable There was no leasing during the reporting period. 2. Material guarantee □Applicable Not applicable The Company had no material guarantee during the reporting period. 3. Financial management entrusting Applicable □Not applicable Unit: RMB 10,000 Specific type Fund source of financial management entrusting Incurred amount of financial management entrusting Unexpired balance Overdue amount not recovered Impairment amount accrued of overdue but not recovered financial management products Bank financial products Own funds 66,000231,560.6600 Total 66,000231,560.6600 The specific situation of high-risk entrusted financial management with large single-item amount or low safety and poor liquidity □Applicable Not applicable Entrusted financial management is expected to be unable to recover the principal or there are other circumstances that may result Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 22 in impairment □Applicable Not applicable 4. Other material contracts □Applicable Not applicable The Company had no other material contracts during the reporting period. XIII. Explanation of Other Significant Matters □Applicable Not applicable The Company had no other significant matters that need to be explained during the reporting period. XIV. Significant Matters of Subsidiaries of the Company □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 23 Chapter 7 Changes in Shares and Shareholders I. Changes in Shares 1. Changes in shares Unit: share Before change Change (+. -) After change Quantity Percentage (%) Issue of new shares Bonus shares Shares converted from capital reserve Others Subtotal Quantity Percentage (%) I. Shares subject to sales restrictions 12,053,2691.27% 12,053,2691.27% 1. Shares held by the state 2. Shares held by the state-owned legal persons 3. Shares held by other domestic investors 12,053,2691.27% 12,053,2691.27% Including: shares held by domestic legal persons Including: shares held by domestic natural persons 12,053,2691.27% 12,053,2691.27% 4. Shares held by overseas investors Including: shares held by overseas legal persons Shares held by overseas natural persons II. Shares without sales restrictions 936,970,78198.73% 936,970,78198.73% 1. RMB ordinary shares 936,970,78198.73% 936,970,78198.73% 2. Domestically listed foreign shares 3. Overseas listed foreign shares 4. Others III. Total shares 949,024,050100.00% 949,024,050100.00% Reason for share changes □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 24 Approval of changes in shares □Applicable Not applicable Transfer of ownership of changes in shares □Applicable Not applicable Progress in the implementation of shares repurchase □Applicable Not applicable Progress of transferring repurchased shares by means of centralized bidding □Applicable Not applicable The impact of changes in shareholding on the financial indicators such as basic earnings per share (EPS), diluted EPS, and net assets per share attributable to common shareholders for the latest year and the latest period. □Applicable Not applicable Other information deemed necessary by the Company or required to be disclosed by securities regulatory authorities. □Applicable Not applicable 2. Changes in shares subject to sales restrictions □Applicable Not applicable II. Securities Issuance and Listing □Applicable Not applicable III. Number of Shareholders of the Company and Their Shareholdings Unit: share Total number of common shareholders at the end of the reporting period 61,265 Total number of preferred shareholders with the voting rights recovered at the end of reporting period 0 Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders Name of shareholder Nature of shareholder Shareholding ratio Number of common shares held at the end of the reporting period Change during the reporting period Number of shares subject to sales restrictions Number of shares without sales restrictions Pledged, marked or frozen shares Status Quantity Hangzhou Robam Industrial Group Co., Ltd. Domestic non-state-owned corporation 49.68% 471,510,0000 471,510,000 Hong Kong Securities Clearing Company Limited Overseas corporation 6.89% 65,370,004 -23,726,527 65,370,004 TEMASEK FULLERTONALPHA PTELTD Overseas corporation 1.86% 17,616,539886,478 17,616,539 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 25 Shen Guoying Domestic natural person 1.29% 12,240,0000 12,240,000 413 Portfolio of National Social Security Fund Others 0.76% 7,236,2007,236,200 7,236,200 418 Portfolio of National Social Security Fund Others 0.72% 6,822,7060 6,822,706 CITIC Securities Co., Ltd. - Social Security Fund 1106 Portfolio Others 0.71% 6,699,366 -329,700 6,699,366 Hangzhou Jinchuang Investment Co., Ltd. Domestic non-state-owned corporation 0.70% 6,640,0850 6,640,085 Hangzhou Yinchuang Investment Co., Ltd. Domestic non-state-owned corporation 0.67% 6,318,0000 6,318,000 Ren Jianhua Domestic natural person 0.62% 5,923,15004,442,3621,480,788 Strategic investor or general legal person who becomes one of the top 10 common shareholders due to rights issue (if any) None Description of the associated relationship or consistent actions of the above shareholders Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. Statements of the above shareholders on proxy/trustee voting rights and abstention from voting rights None Special note on the presence of repurchase accounts among the top 10 shareholders None Shareholdings of the top 10 common shareholders not subject to sales restrictions Name of shareholder Number of shares without sales restrictions held at the end of the reporting period Type of share Type of share Quantity Hangzhou Robam Industrial 471,510,000 RMB 471,510,000 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 26 Group Co., Ltd. ordinary shares Hong Kong Securities Clearing Company Limited 65,370,004 RMB ordinary shares 65,370,004 TEMASEKFULLERTON ALPHAPTELTD 17,616,539 RMB ordinary shares 17,616,539 Shen Guoying 12,240,000 RMB ordinary shares 12,240,000 413 Portfolio of National Social Security Fund 7,236,200 RMB ordinary shares 7,236,200 418 Portfolio of National Social Security Fund 6,822,706 RMB ordinary shares 6,822,706 CITICSecurities Co., Ltd. - Social Security Fund 1106 Portfolio 6,699,366 RMB ordinary shares 6,699,366 Hangzhou Jinchuang Investment Co., Ltd. 6,640,085 RMB ordinary shares 6,640,085 Hangzhou Yinchuang Investment Co., Ltd. 6,318,000 RMB ordinary shares 6,318,000 Industrial and Commercial Bank of China Limited - Penghua Quality Selection Mixed Securities Investment Fund 5,787,141 RMB ordinary shares 5,787,141 Description on associated relationship or consistent actions among the top 10 common shareholders not subject to sales restrictions and between the top 10 common shareholders not subject to sales restrictions and the top 10 common shareholders Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company have any agreed repurchase trading during the reporting period □Yes No There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company during the reporting period. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 27 IV. Changes in Shares Held by Directors, Supervisors, and Senior Management □Applicable Not applicable There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reporting period. For details, please refer to the Annual Report 2022. V. Changes in the Controlling Shareholder and the Actual Controller Changes in the controlling shareholder during the reporting period □Applicable Not applicable There was no change in the controlling shareholder of the Company during the reporting period. Changes in the actual controller during the reporting period □Applicable Not applicable There was no change in the actual controller of the Company during the reporting period. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 28 Chapter 8 Preferred Shares □Applicable Not applicable The Company had no preferred shares during the reporting period. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 29 Chapter 9 Bonds □Applicable Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 30 Chapter 10 Financial Report I. Audit Report Whether the semi-annual report has been audited □Yes No The semi-annual financial report of the Company has not been audited. II. Financial Statements The financial statement notes are represented in RMB. 1. Consolidated Balance Sheet Prepared by: Hangzhou Robam Appliances Co., Ltd. June 30,2023 In RMB Item June 30,2023 January 1,2023 Current assets: Cash and cash equivalents 5,878,791,380.065,292,762,670.94 Deposit reservation for balance Lendings to banks and other financial institutions Financial assets held for trading 2,315,606,606.832,511,844,508.00 Derivative financial assets Notes receivable 697,840,910.95881,773,341.71 Accounts receivable 1,781,653,759.341,689,606,828.94 Accounts receivable financing Prepayments 184,837,219.74177,500,353.37 Receivable premium Reinsurance accounts receivable Provision of cession receivable Other receivables 104,345,008.3580,429,057.84 Inc: Interests receivable Dividends receivable Redemptory monetary capital for sale Inventory 1,532,632,739.871,610,110,798.10 Contract assets Assets held for sale Non-current assets due within one year Other current assets 3,657,388.32334,348.76 Total current assets 12,499,365,013.4612,244,361,907.66 Non-current assets: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 31 Loans and advances Debt investment Other debt investment Long-term receivables Long-term equity investment 7,455,321.578,718,505.62 Investment in other equity instruments 2,116,023.222,116,023.22 Other non-current financial assets Investment real estate 94,803,614.1855,887,198.54 Fixed assets 1,585,824,017.211,622,235,227.74 Construction in process 463,232,352.92406,258,146.69 Biological assets for production Oil & gas assets Right-of-use assets 16,540,637.2822,220,144.13 Intangible assets 216,629,731.28221,356,558.38 Development expenses Goodwill 60,573,832.5660,573,832.56 Long-term prepaid expenses 5,150,512.225,852,899.90 Deferred income tax assets 375,644,313.06340,811,345.96 Other non-current assets 49,002,558.7549,433,497.13 Total non-current assets 2,876,972,914.252,795,463,379.87 Total assets 15,376,337,927.7115,039,825,287.53 Current liabilities: Short-term borrowings 82,865,891.9251,723,429.99 Borrowings from the central bank Borrowings from banks and other financial institutions Financial liabilities held for trading Derivative financial liabilities Notes payables 795,406,054.79872,550,306.86 Accounts payable 2,500,293,860.742,418,755,167.31 Advance receipts Contract liabilities 941,928,841.93959,915,567.03 Financial assets sold for repurchase Deposits from customers and interbank Receivings from vicariously traded securities Receivings from vicariously sold securities Payroll payable 69,065,454.11153,942,329.88 Taxes payable 221,499,567.82152,351,620.58 Other payables 281,333,439.52281,878,208.25 Inc: Interests payable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 32 Dividends payable Fees and commissions payable Dividends payable for reinsurance Liabilities held for sale Non-current liabilities due within one year 3,970,613.165,720,175.21 Other current liabilities 112,459,867.60120,126,501.73 Total current liabilities 5,008,823,591.595,016,963,306.84 Non-current liabilities: Reserves for insurance contracts Long-term loans Bonds payable Inc: Preferred shares Perpetual bonds Lease liabilities 14,115,619.4418,588,966.67 Long-term accounts payable Long-term payroll payable Estimated liabilities Deferred income 118,988,342.88123,912,110.43 Deferred income tax liabilities 21,488,962.5522,107,934.58 Other non-current liabilities Total non-current liabilities 154,592,924.87164,609,011.68 Total liabilities 5,163,416,516.465,181,572,318.52 Owner’s equity: Capital stock 949,024,050.00949,024,050.00 Other equity instruments Inc: Preferred shares Perpetual bonds Capital reserve 413,471,307.17409,997,665.58 Less: treasury share 199,995,742.59199,995,742.59 Other comprehensive income -100,157,634.16 -100,157,634.16 Special reserves Surplus reserves 474,516,412.50474,516,412.50 General risk reserves Undistributed profits 8,556,749,908.278,199,079,015.58 Total owners’ equity attributable to the parent company 10,093,608,301.199,732,463,766.91 Minority equity 119,313,110.06125,789,202.10 Total owner's equity 10,212,921,411.259,858,252,969.01 Total liabilities and owner’s equity 15,376,337,927.7115,039,825,287.53 Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu 2. Balance Sheet of the Parent Company In RMB Item June 30,2023 January 1,2023 Current assets: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 33 Cash and cash equivalents 5,642,420,668.835,054,810,287.04 Financial assets held for trading 2,310,000,000.002,500,000,000.00 Derivative financial assets Notes receivable 615,413,345.80879,223,549.33 Accounts receivable 1,766,241,334.831,620,543,528.97 Accounts receivable financing Prepayments 154,560,624.23167,724,048.79 Other accounts receivable 94,065,660.8583,900,676.77 Inc: Interests receivable Dividends receivable 10,200,000.00 Inventory 1,417,140,842.221,499,780,747.70 Contract assets Assets held for sale Non-current assets due within one year Other current assets Total current assets 11,999,842,476.7611,805,982,838.60 Non-current assets: Debt investment Other debt investment Long-term receivables Long-term equity investment 250,822,992.88251,769,849.44 Investment in other equity instruments 2,116,023.222,116,023.22 Other non-current financial assets Investment real estate 8,005,690.674,426,211.90 Fixed assets 1,388,761,454.251,396,227,874.68 Construction in process 463,232,352.92406,258,146.69 Biological assets for production Oil & gas assets Right-of-use assets Intangible assets 147,633,971.24149,864,689.61 Development expenses Goodwill Long-term prepaid expenses 1,336,731.941,486,622.90 Deferred income tax assets 360,600,644.53323,776,879.25 Other non-current assets 49,002,558.7549,433,497.13 Total non-current assets 2,671,512,420.402,585,359,794.82 Total assets 14,671,354,897.1614,391,342,633.42 Current liabilities: Short-term borrowings 6,715,891.92573,429.99 Financial liabilities held for trading Derivative financial liabilities Notes payables 747,796,646.86810,820,603.91 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 34 Accounts payable 2,294,413,665.552,282,866,624.07 Advance receipts Contract liabilities 852,939,142.65890,640,445.28 Payroll payable 48,172,777.49121,417,848.03 Taxes payable 209,660,558.55130,548,651.54 Other payables 258,096,331.10254,460,632.28 Inc: Interests payable Dividends payable Liabilities held for sale Non-current liabilities due within one year Other current liabilities 100,679,763.62109,801,716.95 Total current liabilities 4,518,474,777.744,601,129,952.05 Non-current liabilities: Long-term loans Bonds payable Inc: Preferred shares Perpetual bonds Lease liabilities Long-term accounts payable Long-term payroll payable Estimated liabilities Deferred income 82,961,858.8886,923,728.32 Deferred income tax liabilities 13,387,819.6013,804,141.19 Other non-current liabilities Total non-current liabilities 96,349,678.48100,727,869.51 Total liabilities 4,614,824,456.224,701,857,821.56 Owner’s equity: Capital stock 949,024,050.00949,024,050.00 Other equity instruments Inc: Preferred shares Perpetual bonds Capital reserve 413,082,217.21409,608,575.62 Less: treasury share 199,995,742.59199,995,742.59 Other comprehensive income -100,157,634.16 -100,157,634.16 Special reserves Surplus reserves 474,516,412.50474,516,412.50 Undistributed profits 8,520,061,137.988,156,489,150.49 Total owner's equity 10,056,530,440.949,689,484,811.86 Total liabilities and owner’s equity 14,671,354,897.1614,391,342,633.42 3. Consolidated Income Statement In RMB Item Semi-annual 2023 Semi-annual 2022 I. Total operating income 4,934,869,800.154,444,310,099.69 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 35 Inc: Operating income 4,934,869,800.154,444,310,099.69 Interest income Earned premium Fee and commission income II. Total operating costs 4,072,326,288.423,739,161,547.48 Inc: Operating costs 2,372,095,971.502,240,019,882.53 Interest expenses Fee and commission expenses Surrender value Net payments for insurance claims Net allotment of reserves for insurance liabilities Policy dividend expenditures Reinsurance expenses Taxes and surcharges 32,207,971.2023,760,024.24 Sale expenses 1,360,821,373.411,184,704,589.52 Administrative expenses 203,425,816.25183,583,864.57 R&D expenses 172,734,141.15169,368,645.53 Financial expense -68,958,985.09 -62,275,458.91 Including: Interest expenses 2,707,272.101,018,439.59 Interest income 69,274,034.4260,042,815.83 Add: other income 70,659,558.7694,070,746.70 Investment income (“-” for losses) 21,723,618.8119,168,941.11 Including: Income from investment in joint ventures and affiliated enterprises -1,263,184.05 -2,947,887.32 Gains on derecognition of financial assets measured at amortized cost Exchange gains (“-” for losses) Net exposure hedging gains (“-” for losses) Gains from changes in fair value (“-” for losses) Losses from credit impairment (“-” for losses) 23,290,586.409,024,313.93 Losses from asset impairment (“-” for losses) -3,921,456.1424,056,013.60 Gains on disposal of assets (“-” for losses) -576,718.4137,838.75 III. Operating profits (“-” for losses) 973,719,101.15851,506,406.30 Add: non-operating income 2,803,959.502,696,007.72 Less: non-operating expenditure 1,449,874.491,558,155.13 IV. Total profits (“-” for total losses) 975,073,186.16852,644,258.89 Less: income tax expenses 151,830,927.51131,172,418.86 V. Net profits (“-” for losses) 823,242,258.65721,471,840.03 (I) By operational sustainability 1. Net profits from continuing operations (“-” for net losses) 823,242,258.65721,471,840.03 2. Net profits from discontinued operations (“-” for net losses) (II) By ownership 1. Net profit attributable to shareholders of the parent 829,718,350.69723,549,381.25 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 36 company (“-” for net losses) 2. Minority shareholders’ gains and losses (“-” for net losses) -6,476,092.04 -2,077,541.22 VI. After-tax net amount of other comprehensive income After-tax net amount of other comprehensive income attributable to the owners of parent company (I) Other comprehensive income that cannot be reclassified into gains and losses 1. Changes in re-measured and defined benefit plans 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method 3. Changes in fair value of the investment in other equity instruments 4. Changes in fair value of the credit risk of the Company 5. Others (II) Other comprehensive income which will be reclassified into gains and losses 1. Other comprehensive income which can be transferred into gains and losses under the equity method 2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedge reserve 6. Converted difference in foreign currency statements 7. Others After-tax net amount of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 823,242,258.65721,471,840.03 Total comprehensive income attributable to owners of the parent company 829,718,350.69723,549,381.25 Total comprehensive income attributable to minority shareholders -6,476,092.04 -2,077,541.22 VIII. Earnings per share (EPS): (I) Basic EPS 0.870.76 (II) Diluted EPS 0.870.76 Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu 4. Income Statement of the Parent Company In RMB Item The first half of 2023 The first half of 2022 I. Operating income 4,490,148,776.214,159,599,550.58 Less: Operating costs 2,272,924,581.002,146,921,987.07 Taxes and surcharges 26,445,659.5021,169,789.36 Sale expenses 1,071,915,930.731,053,210,272.02 Administrative expenses 139,991,185.53130,121,271.69 R&D expenses 167,969,738.37161,720,456.56 Financial expense -69,761,406.60 -61,053,558.14 Including: Interest expenses 646,283.95714,893.28 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 37 Interest income 67,688,700.6958,189,221.15 Add: other income 61,866,650.1686,160,552.68 Investment income (“-” for losses) 21,795,614.0917,639,080.72 Including: Income from investment in joint ventures and affiliated enterprises -1,019,723.65 -2,947,887.32 Gains on derecognition of financial assets measured at amortized cost (“-” for losses) Net exposure hedging gains (“-” for losses) Gains from changes in fair value (“-” for losses) Losses from credit impairment (“-” for losses) 22,393,985.9911,220,864.57 Losses from asset impairment (“-” for losses) -3,921,456.1424,056,013.60 Gains on disposal of assets (“-” for losses) -607,881.96 -134,264.41 II. Operating profits (“-” for losses) 982,189,999.82846,451,579.18 Add: non-operating income 2,738,086.372,622,330.74 Less: non-operating expenditure 1,067,871.651,188,024.98 III. Total profits (“-” for total losses) 983,860,214.54847,885,884.94 Less: income tax expenses 148,240,769.05127,513,732.18 IV. Net profits (“-” for net losses) 835,619,445.49720,372,152.76 (I) Net profits from going concern (“-” for net losses) (II) Net profits from discontinued operations (“-” for net losses) V. After-tax net amount of other comprehensive income (I) Other comprehensive income that cannot be reclassified into gains and losses 1. Changes in re-measured and defined benefit plans 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method 3. Changes in fair value of the investment in other equity instruments 4. Changes in fair value of the credit risk of the Company 5. Others (II) Other comprehensive income which will be reclassified into gains and losses 1. Other comprehensive income which can be transferred into gains and losses under the equity method 2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedge reserve 6. Converted difference in foreign currency statements 7. Others VI. Total comprehensive income 835,619,445.49720,372,152.76 VII. EPS: (I) Basic EPS (II) Diluted EPS Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 38 5. Consolidated Cash Flow Statement In RMB Item The first half of 2023 The first half of 2022 I. Cash flow from operating activities: Cash received for the sale of goods and rendering of services 5,549,357,254.194,817,937,199.39 Net increase in clients’ deposits and deposits from banks and other financial institutions Net increase in borrowings from the central bank Net increase in borrowings from other financial institutions Cash received from receiving insurance premium of the original insurance contract Net cash from receiving reinsurance premium Net increase in deposits and investment of insured persons Cash received from interests, fees and commissions Net increase in borrowed funds Net increase in repurchase business funds Net cash received from vicariously traded securities Refunds of taxes 9,479,183.3129,520,918.02 Other cash received related to operating activities 162,988,244.01177,926,833.07 Subtotal of cash inflow from operating activities 5,721,824,681.515,025,384,950.48 Cash paid for purchased products and received services 2,509,505,444.232,583,318,265.69 Net increase in loans and advances to customers Net increase in deposits with the central bank and other financial institutions Cash paid for claims of original insurance contract Net increase in lending funds Cash paid for interests, fees and commissions Cash paid for policy dividends Cash paid to and on behalf of employees 531,293,363.95509,673,044.55 Cash paid for taxes 432,835,037.24408,649,175.45 Cash paid related to other operating activities 1,288,457,982.861,200,889,342.46 Subtotal of cash outflow from operating 4,762,091,828.284,702,529,828.15 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 39 activities Net cash flow from operating activities 959,732,853.23322,855,122.33 II. Cash flow from investment activities: Cash received from return of investments 856,237,901.17892,912,500.00 Cash received from return on investments 23,031,053.0323,238,518.93 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 156,960.001,030,970.40 Net cash received from disposal of subsidiaries and other business entities Cash received related to other investment activities Subtotal of cash inflow from investment activities 879,425,914.20917,181,989.33 Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets 156,402,668.03269,416,076.84 Cash paid to investments 660,000,000.00923,500,000.00 Net increase in pledged loans Net cash from subsidiaries and other operating entities Cash paid related to other investment activities Subtotal of cash outflow from investment activities 816,402,668.031,192,916,076.84 Net cash flow from investment activities 63,023,246.17 -275,734,087.51 III. Cash flow from financing activities: Cash from acquiring investments 25,000,000.00 Including: Cash received by subsidiaries from investments of minority shareholders 11,000,000.00 Cash from acquiring debts 38,500,000.0017,000,000.00 Other cashes received in relation to financing activities 6,482,178.881,012,732.06 Subtotal of cash inflow from financing activities 44,982,178.8843,012,732.06 Cash paid for repayments of debts 13,500,000.003,500,000.00 Cash paid for distribution of dividends, profits or interest expenses 472,047,458.00476,047,458.00 Including: Dividends or profits paid by subsidiaries to minority shareholders 4,000,000.00 Other cash paid in relation to financing activities 3,212,200.536,536,810.12 Subtotal of cash outflow from financing activities 488,759,658.53486,084,268.12 Net cash flow from financing activities -443,777,479.65 -443,071,536.06 IV. Effect of change in exchange rate on cash and cash equivalents 2,476,947.593,111,525.65 V. Net increase in cash and cash equivalents 581,455,567.34 -392,838,975.59 Add: Opening balance of cash and cash equivalents 5,196,414,341.743,719,988,820.35 VI. Ending balance of cash and cash equivalents 5,777,869,909.083,327,149,844.76 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 40 6. Cash Flow Statement of the Parent Company In RMB Item Semi-annual 2023 Semi-annual 2022 I. Cash flow from operating activities: Cash received for the sale of goods and rendering of services 5,061,947,996.394,510,190,738.71 Refunds of taxes 9,453,997.7423,286,694.84 Cash received related to other operating activities 127,408,820.55130,386,047.45 Subtotal of cash inflow from operating activities 5,198,810,814.684,663,863,481.00 Cash paid for purchased products and received services 2,388,027,327.892,444,657,366.67 Cash paid to and on behalf of employees 388,171,541.48388,860,388.83 Cash paid for taxes 376,468,624.51377,718,507.95 Cash paid related to other operating activities 1,093,033,326.171,074,310,127.24 Subtotal of cash outflow from operating activities 4,245,700,820.054,285,546,390.69 Net cash flow from operating activities 953,109,994.63378,317,090.31 II. Cash flow from investment activities: Cash received from return of investments 850,000,000.00800,000,000.00 Cash received from return on investments 33,049,300.0021,676,168.09 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 117,000.00509,970.40 Net cash received from disposal of subsidiaries and other business entities Cash received related to other investment activities Subtotal of cash inflow from investment activities 883,166,300.00822,186,138.49 Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets 133,509,231.58227,459,776.46 Cash paid to investments 660,000,000.00850,000,000.00 Net cash from subsidiaries and other operating entities Cash paid related to other investment activities Subtotal of cash outflow from investment activities 793,509,231.581,077,459,776.46 Net cash flow from investment activities 89,657,068.42 -255,273,637.97 III. Cash flow from financing activities: Cash from acquiring investments Cash from acquiring debts Other cashes received in relation to financing activities 6,482,178.881,012,732.06 Subtotal of cash inflow from financing activities 6,482,178.881,012,732.06 Cash paid for repayments of debts Cash paid for distribution of dividends, profits or interest expenses 472,047,458.00472,047,458.00 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 41 Other cash paid in relation to financing activities 3,516,183.32 Subtotal of cash outflow from financing activities 472,047,458.00475,563,641.32 Net cash flow from financing activities -465,565,279.12 -474,550,909.26 IV. Effect of change in exchange rate on cash and cash equivalents 2,476,788.623,111,599.62 V. Net increase in cash and cash equivalents 579,678,572.55 -348,395,857.30 Add: Opening balance of cash and cash equivalents 4,978,704,981.153,504,333,910.43 VI. Ending balance of cash and cash equivalents 5,558,383,553.703,155,938,053.13 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 42 7. Consolidated Statement of Changes in Owners’ Equity Current amount In RMB Item The first half of 2023 Owners’ equity attributable to the parent company Minority interests Total owner’s equity Capital stock Other equity instruments Capital reserve Less: Treasury share Other comprehensive income Special reserves Surplus reserves General risk reserves Undistributed profits Others Subtotal Preferred shares Perpetual bonds Others I. Ending balance of last year 949,024,050.0 0 409,997,665.5 8 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 8,199,079,015.5 8 9,732,463,766.91 125,789,202.1 0 9,858,252,969.01 Add: Changes in accounting policies Correction of errors of the previous period Business combination under common control Others II. Beginning balance of this year 949,024,050.0 0 409,997,665.5 8 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 8,199,079,015.5 8 9,732,463,766.91 125,789,202.1 0 9,858,252,969.01 III. Changes in current period (“-” for 3,473,641.59 357,670,892.69 361,144,534.28 -6,476,092.04354,668,442.24 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 43 decrease) (I) Total comprehensive income 829,718,350.69 829,718,350.69 -6,476,092.04823,242,258.65 (II) Capital invested and decreased by the owners 3,473,641.59 3,473,641.59 3,473,641.59 1. Common shares invested by the owners 2. Capital invested by holders of other equity instruments 3． Amount of share-based payments recognized in owners’ equity 3,473,641.59 3,473,641.59 3,473,641.59 4. Others (III) Profit distribution -472,047,458.00 -472,047,458.00 -472,047,458.00 1. Withdrawal of surplus reserve 2. Appropriation of general risk reserve 3． Distribution to owners (or shareholders) -472,047,458.00 -472,047,458.00 -472,047,458.00 4. Others Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 44 (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3． Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 45 2.2. Used in current period (VI) Others IV. Ending balance of current period 949,024,050.0 0 413,471,307.1 7 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 8,556,749,908.2 7 10,093,608,301.1 9 119,313,110.0 6 10,212,921,411.2 5 Amount of last year In RMB Item The first half of 2022 Owners’ equity attributable to the parent company Minority interests Total owner’s equity Capital stock Other equity instruments Capital reserve Less: Treasury share Other comprehensive income Special reserves Surplus reserves General risk reserves Undistributed profits Others Subtotal Preferred shares Perpetual bonds Others I. Ending balance of last year 949,024,050.0 0 404,918,098.1 5 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 7,098,721,555.3 7 8,627,026,739.2 7 139,031,776.9 6 8,766,058,516.2 3 Add: Changes in accounting policies Correction of errors of the previous period Business combination under common control Other Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 46 s II. Beginning balance of this year 949,024,050.0 0 404,918,098.1 5 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 7,098,721,555.3 7 8,627,026,739.2 7 139,031,776.9 6 8,766,058,516.2 3 III. Changes in current period (“-” for decrease) 3,998,366.27 251,501,923.25 255,500,289.524,922,458.78260,422,748.30 (I) Total comprehensive income 723,549,381.25 723,549,381.25 -2,077,541.22721,471,840.03 (II) Capital invested and decreased by the owners 3,998,366.27 3,998,366.2711,000,000.0014,998,366.27 1. Common shares invested by the owners 11,000,000.0011,000,000.00 2. Capital invested by holders of other equity instruments 3． Amount of share-based payments recognized in owners’ equity 3,998,366.27 3,998,366.27 3,998,366.27 4. Others (III) Profit distribution -472,047,458.00 -472,047,458.00 -4,000,000.00 -476,047,458.00 1. Withdrawal of surplus reserve 2. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 47 Appropriation of general risk reserve 3． Distribution to owners (or shareholders) -472,047,458.00 -472,047,458.00 -4,000,000.00 -476,047,458.00 4. Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3． Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings 5. Other comprehensive income carried forward to retained Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 48 earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others IV. Ending balance of current period 949,024,050.0 0 408,916,464.4 2 199,995,742.5 9 - 100,157,634.1 6 474,516,412.5 0 7,350,223,478.6 2 8,882,527,028.7 9 143,954,235.7 4 9,026,481,264.5 3 8. Statement of Changes in Owners’ Equity of the Parent Company Current amount In RMB Item The first half of 2023 Capital stock Other equity instruments Capital reserve Less: Treasury share Other comprehensive income Special reserves Surplus reserves Undistributed profits Others Total owner’s equity Preferred shares Perpetual bonds Others I. Ending balance of last year 949,024,050.00 409,608,575.62199,995,742.59 - 100,157,634.16 474,516,412.508,156,489,150.49 9,689,484,811.86 Add: Changes in accounting policies Correction of errors of the previous period Others II. Beginning balance of this 949,024,050.00 409,608,575.62199,995,742.59 - 100,157,634.16 474,516,412.508,156,489,150.49 9,689,484,811.86 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 49 year III. Changes in current period (“-” for decrease) 3,473,641.59 363,571,987.49 367,045,629.08 (I) Total comprehensive income 835,619,445.49 835,619,445.49 (II) Capital invested and decreased by the owners 3,473,641.59 3,473,641.59 1. Common shares invested by the owners 2. Capital invested by holders of other equity instruments 3． Amount of share-based payments recognized in owners’ equity 3,473,641.59 3,473,641.59 4. Others (III) Profit distribution -472,047,458.00 -472,047,458.00 1. Withdrawal of surplus reserve 2. Distribution to owners (or shareholders) -472,047,458.00 -472,047,458.00 3． Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3． Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 50 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others IV. Ending balance of current period 949,024,050.00 413,082,217.21199,995,742.59 - 100,157,634.16 474,516,412.508,520,061,137.98 10,056,530,440.94 Amount of last year In RMB Item The first half of 2022 Capital stock Other equity instruments Capital reserve Less: Treasury share Other comprehensive income Special reserves Surplus reserves Undistributed profits Others Total owner’s equity Preferred shares Perpetual bonds Others I. Ending balance of last year 949,024,050.00 404,873,115.14199,995,742.59 - 100,157,634.16 474,516,412.506,971,309,836.02 8,499,570,036.91 Plus: Changes in accounting policies Correction of errors of the previous period Others II. Beginning balance of this 949,024,050.00 404,873,115.14199,995,742.59 - 474,516,412.506,971,309,836.02 8,499,570,036.91 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 51 year 100,157,634.16 III. Change in current period (“-” for decrease) 3,998,366.27 248,324,694.76 252,323,061.03 (I) Total comprehensive income 720,372,152.76 720,372,152.76 (II) Capital invested and decreased by the owners 3,998,366.27 3,998,366.27 1. Common shares invested by the owners 2. Capital invested by holders of other equity instruments 3． Amount of share-based payments recognized in owners’ equity 3,998,366.27 3,998,366.27 4. Others (III) Profit distribution -472,047,458.00 -472,047,458.00 1. Withdrawal of surplus reserve 2. Distribution to owners (or shareholders) -472,047,458.00 -472,047,458.00 3． Others (IV) Internal carry-forward of owners’ equity 1. Capital reserve converted into capital (or capital stock) 2. Surplus reserve converted into capital (or capital stock) 3． Surplus reserves making up for losses 4. Changes of defined benefit plans carried forward to retained earnings Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 52 5. Other comprehensive income carried forward to retained earnings 6. Others (V) Special reserve 1. Withdrawn in current period 2. Used in current period (VI) Others IV. Ending balance of current period 949,024,050.00 408,871,481.41199,995,742.59 - 100,157,634.16 474,516,412.507,219,634,530.78 8,751,893,097.94 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 53 III. Basic Information of the Company Hangzhou Robam Appliances Co., Ltd. (hereinafter referred to as ROBAM or the Company) is an incorporated company established by overall changing Hangzhou Robam Home Appliances Co., Ltd. on November 7,2000. Approved by China Securities Regulatory Commission (ZJXK [2010] No.1512) in 2010, the Company for the first time offered 40 million ordinary shares in RMB to the public on November 23,2010 (stock code: 002508), with the par value per share of RMB 1 and the issue price per share of RMB 24.00. As of June 30,2023, the total capital stocks of the Company reached 949,024,050 shares, with a registered capital of RMB 949,024,050. The Company’s unified social credit code is 91330000725252053F; the legal representative is Ren Jianhua; the registration address is No.592, Linping Avenue, Yuhang Economic Development Area, Yuhang District, Hangzhou; and the Headquarters office address is No.592, Linping Avenue, Yuhang Economic Development Area, Yuhang District, Hangzhou. The main business scope is: manufacturing of household appliances; research and development of kitchenware, sanitary ware and daily necessities; wholesale of kitchenware, sanitary ware and daily necessities; sales of daily glass products; sales of household appliances; installation services for household appliances; research and development of household appliances; sales of household products; sales of daily necessities; manufacturing of wooden daily products; retail of daily household appliances; repair of daily electrical appliances; sales of electric heating food processing equipment; wholesale of daily necessities; technical services, technical development, technical consulting, technical exchange, technology transfer, technology promotion; sales of non -electric household appliances; manufacturing of non-electric household appliances; production of gas appliances; sales of refrigeration and air conditioning equipment; manufacturing of refrigeration and air conditioning equipment; development of basic artificial intelligence software; manufacturing of smart household consumption devices; sales of artificial intelligence hardware; manufacturing of commercial, catering, and service-specific equipment; sales of commercial, catering, and service-specific equipment; import and export of goods; manufacturing of environmental protection-specific equipment; sales of environmental protection-specific equipment (except for items that require approval according to law, the Company is authorized to carry out business activities independently with the business license). Manufacturing of disinfection devices; manufacturing of electric heating food processing equipment (items that require approval according to law can only be operated after approval by relevant departments, and the specific business items shall be subject to the approval results). The Company is a manufacturing company, with major businesses covering research & development, production, sales and comprehensive services of kitchen appliances. Its main products include range hoods, gas stoves, disinfection cabinets, steam ovens, baking ovens, dishwashers, water purifiers, microwave ovens, integrated stoves, and purification tanks. The consolidated financial statements of the Company cover ten subsidiaries, including Beijing Robam Electric Appliance Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd., Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances Trading (Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd., Hangzhou Robam Fuchuang Investment Management Co., Ltd., Zhejiang Cookingfuture Technology Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 54 Co., Ltd., Hangzhou Jinhe Electric Appliances Co., Ltd., Robam Appliances Holding (HK) Co., Ltd. and Robam International (HK) Trading Co., Ltd. Compared to the previous year, Robam Appliances Holding (HK) Co., Ltd. and Robam International (HK) Trading Co., Ltd. were newly established within the scope of consolida tion of the Company during the current period. IV. Basis for Preparation of Financial Statements 1. Preparation basis The financial statements of the Company are prepared on a going concern basis, and in light of the Company’s actual transactions and events, in accordance with the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance of China and relevant provisions, as well as the accounting policies and estimates stated in the section of "Significant Accounting Policies and Estimates" herein. 2.Going concern After taking into account of factors such as macro policy risks, market management risks, and the current and long-term profitability, solvency, and financial flexibility of the Company, as well as the intention of the management to change the operation policies, the management of the Company believes that there are no matters affecting the Company’s going concern within 12 months from the end of the reporting period onwards. V. Significant Accounting Policies and Estimates Specific accounting policies and estimates: The specific accounting policies and estimates prepared by the Company according to its actual production and operation include the operating cycle, the recognition and measurement of accounts receivable and bad debts, measurement of inventory delivered, fixed assets classification as well as depreciation methods, invisible as set amortization, conditions for the capitalization of R&D expenses, and revenue recognition and measurement. 1. Statement of compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Company comply with the requirements of the Accounting Standards for Business Enterprises, and truthfully and completely reflect the financial status, business results, cash flow and other relevant information of the Company. 2. Accounting period The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian calendar. 3. Operating cycle The normal operating cycle of the Company shall be one year (12 months). Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 55 4. Bookkeeping base currency The Company adopts RMB as the bookkeeping base currency. 5. Accounting approaches to business combinations under or not under common control The assets and liabilities acquired by the Company as the combining party in a business combination under common control shall be measured at the book value of the combined pa rty in the final controller’s consolidated statements on the combination date. The capital reserve shall be adjusted against the difference between the book value of the net assets acquired by the combining party and the book value of the combination consi deration paid by it. If the capital reserve is insufficient to offset the difference, the retained earnings shall be adjusted. The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a business combination not under common control shall be measured at fair value on the acquisition date. The combination cost is the sum of the fair values of cash or non-cash assets paid, liabilities issued or undertaken, equity securities issued, among others, by the Company for the purpose of taking control over the acquiree on the acquisition date and all directly related expenses incurred during the business combination (in case of business combination accomplished through multiple transactions step by step, the combination cost is the sum of the cost of every single transaction). If the combination cost is greater than the fair value share of the acquiree’s identifiable net assets acquired from the acquiree in the combination, the case is recognized as goodwill. Where the combination cost is less than the fair value share of the identifiable net assets acquired from the acquiree, the fair values of the identifiable assets, debts and contingent liabilities acquired in the combination and those of non -cash assets subject to combination consideration or issued equity securities shall be rechecked first, and then in case the combination cost is less than the fair value shares of the identifiable net assets acquired from the acquiree, the difference shall be included in the non-operating income in the period of the combination. 6. Methods of preparing consolidated financial statements All subsidiaries under the control of the Company are included into the consolidated financial statements. The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company when preparing the consolidated financial statements, where the accounting policies and accounting periods are inconsistent between the Company and its subsidiaries. All major internal transactions, inter-company balances, and unrealized profits with the scope of consolidation shall be offset when preparing consolidated financial statements. The portion of owner’s equity of subsidiaries not held by the parent company and net current profit & loss, other comprehensive incomes and the portion of total comprehensive incomes belonging to minority equity are presented under “minority equity, minority interest income, other comprehensive incomes attributable to minority shareholders and total comprehensive incomes attributable to minority shareholders, respectively”. For a subsidiary acquired from a business combination under common control, its operating results and cash flows are included into the consolidated financial statements since the beginning of the consolidation year. When Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 56 the comparable consolidated financial statements are being prepared, relevant items in the financial statements of the last year are adjusted with the stated party formed after merging deemed to exist from the time of the ultimate controlling party starting to control. For a subsidiary acquired through business combinations not under the same control, its operating results and cash flows shall be included into the consolidated financial statement since the date when the Company obtains control. When preparing the consolidated financial statements, the subsidiary's financial statements shall be adjusted on basis of the fair value of all identifiable assets, liabilities and contingent liabilities ascertained on t he purchasing date. For equity interests in an investee not under common control realized by two or more transactions, which finally bring about the business combination, equity interests in the investee before the acquisition date shall be re-measured at fair value on the acquisition date and the balance between the fair value and the book value shall be included in the investment gains for the current period when the consolidated statements are prepared. If the related acquiree’s equity held before the acquiring date contains other comprehensive income and the other changes of owner’s equity except for net profits and losses, other comprehensive income and profit distributions, it shall be transferred to investment gains or losses on the date of acquisition, excluding the other comprehensive income derived from changes of net liabilities or net assets due to re -measurement on defined benefit plan by the investee. Without losing any control right, the Company has partially disposed the long-term equity investment in the subsidiary. In the consolidated financial statement, according to the difference between the disposal prices of part of the equity investment in the subsidiary and net assets of the subsidiary attributed to the Company as a result of disposal of long-term equity investment continuously calculated from the purchase date or consolidation date in the subsidiary, capital premium or stock premium is adjusted, where the capital surplus is not sufficient to be offset, they are adjusted to the retained earnings. Where the Company loses the controlling right of the invested party for such reason as disposing partial equity investment, the remaining equity is re-measured as per the fair value of such equity on the day of losing controlling right when preparing the consolidated financial statements. The balance from the sum of the consideration obtained upon the disposal of equity and the fair value of the remaining equity less the appropriable share of the net asset of the former subsidiaries calculated as per the former shareholding proportion from the purchase day or merging day is included in the investment income for the period when the right of control is lost and the goodwill is deducted. Other comprehensive incomes related to former equity investment in subsidiaries shall be recognized as current investment profits & losses upon losing controls. 7. Classification of joint arrangement and accounting methods for joint operation The joint arrangement of the Company includes the joint venture. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 57 The Company, serving as one part of the joint venture, shall, in accordance with the provisions of the Accounting Standards for Business Enterprises No.2 Long-term Equity Investments, conduct accounting treatment of the investment of the joint venture. 8. Recognition standard of cash and cash equivalents Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that are available for payment at any time. Cash equivalents presented in the cash flow statement refer to short -term investments (no more than three months) with high liquidity and that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value. 9. Foreign currency business and conversion of foreign currency statement Foreign currency transactions The Company translates the foreign-currency amount of foreign-currency transactions into an RMB amount based on the spot exchange rate applicable on the transaction date. On the balance sheet date, the monetary items in foreign currencies shall be converted at the spot rate on the said balance sheet date. The conversion differences arising therefrom, except the exchange balance arising from the foreign currency borrowings special for acquisition or production of qualifying assets which shall be processed according to the capitalization principle, shall be directly included in the current profit or loss. The foreign currency non-monetary items measured at fair value shall be converted according to the spot rate of the date when the fair value is confirmed. If the difference between the converted amount of booking base currency and the original amount of booking base currency belongs to the foreign currency non-monetary item available for sale of financial assets, such difference shall be included in the capital reserve. If such difference belongs to the foreign currency non-monetary item which is measured at fair value and whose change is included into the current profits and losses, it shall be included into current profits and losses. The foreign currency non-monetary items measured by historical cost shall be still translated according to the spot rate on the transaction date, while RMB amount remains unchanged. Translation of foreign currency financial statements Assets and liabilities items in the balance sheets of foreign operations are translated into RMB using the spot exchange rate at the balance sheet date, while the shareholders’ equity items, except for the "undistributed profit items," are translated into RMB using the spot exchange rate at the date of transaction. The income and expense items in the income statements of overseas operations are translated at the exchange rate approximate to the spot rate at the date of transaction. The difference arising from the above translation is pre sented separately under other comprehensive income. For foreign currency monetary items that materially constitute overseas net investment in overseas operations, exchange differences arising from changes in exchange rates, when the consolidated financial statements are prepared, are also separately presented as other comprehensive income Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 58 During the disposal of an overseas operation, other comprehensive incomes related to the overseas operation are transferred in proportion into the disposal of current profits and losses. The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted using the exchange rate approximate to the spot rate of the transaction date of the cash flow. The effect of exchange rate changes on cash is presented separately in the cash flow statement. 10. Financial instruments The Company shall recognize a financial asset or a financial liability when it becomes a party to a financial instrument contract. Financial assets Classification, recognition basis and measurement method of financial assets Based on the business model for management of financial assets and the contractual cash flow characteristics of financial assets, the Company classifies the financial assets into three types: 1) the financial asset m easured at amortized cost; 2) the financial asset measured at the fair value with its changes included into other comprehensive incomes; and 3) and the financial asset measured at the fair value with its changes included into current profits or losses. The financial assets meeting all of the following conditions can be classified as those measured at amortized cost by the Company: ① the Company adopts the business management mode of financial assets for the purpose of collecting contractual cash flow. ② In accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount. Such financial assets are initially measured at their fair values, with related transaction costs included into the amount of initial recognition, and subsequent measurement conducted with the amortized cost. Apart from those designated as hedged items, the difference between the initial amount amortiz ed with the effective interest method and the amount due, profits or losses incurred upon amortization, impairment, exchange profits and losses and derecognition shall be included into current profits and losses. Where the following conditions are reached at the same time, the financial assets can be classified by the Company as those measured at fair value with the changes included into other comprehensive income: ① the Company adopts the business management mode of the financial assets for the purpose of collecting contractual cash flow and selling the financial assets. ② In accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount. Such financial assets are initially measured at their fair values, with related transaction costs included into the amount of initial recognition. Apart from those designated as the hedged items, profits or losses incurred by such financial assets shall be included into the comprehensive incomes, except for credit impairment losses or gains, exchange profits and losses and the interests calculated as per the actual interest rate for such financial assets. Upon derecognition of the financial assets, the accumulated gains or losses Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 59 previously recorded in other comprehensive incomes shall be transferred out of such other comprehensive incomes and included into the current profits and losses. The interest income is recognized by the Company using the effective interest method. The interest income is determined by multiplying the book balance of financial assets by the effective interest rate, except for conditions below: ① For the financial assets purchased by or originating from the Company with credit impairment, since initial confirmation, the interest income shall be determined as per the amortized cost of the financial asset and the effect interest rate subject to credit adjustment. ② The financial assets purchased by or originating from the Company with no credit impairment but having credit impairment during the follow-up period shall be subject to interest income calculation based on the amortized cost and actual interest rate of the financial assets during the follow-up period by the Company. The non-trading equity instrument is designated by the Company as the financial asset which is measured at its fair value with changes included into current profits and losses. The designation shall not be canceled once it is made. The non-trading equity instrument investment, designed by the Company to be measured at the fair value with their changes included into other comprehensive incomes, is initially measured at fair value, with related transaction cost included into the amount of initial confirmation. Except for the obtained dividends (excluding those of the recovered investment cost), which are included into current profits and losses, other related profits and losses (including exchange profits and losses) are completely included into other comprehensive incomes and will not then be converted into current profits and losses. Upon derecognition, the accumulated gains or losses previously included into other comprehensive incomes are transferred from other comprehensive incomes and included into retained earnings. Financial assets other than those measured at amortized cost and those measured at fair value with changes recognized in other comprehensive income. Such financial assets are initially measured at their fair values, with related transaction costs directly included into the current profits and losses. Such financial assets are initially measured at their fair values, with related transaction costs directly included into the current profits and losses. Profits or losses of such financial assets shall be included in the current profits and losses. The financial asset formed by the contingent consideration confirmed during business combination not under the same control are classified as those measured by its fair value by the Company, with changes included into current profits and losses. Recognition basis and measurement method for transfer of financial assets Financial assets meeting one of the following conditions shall be derecognized by the Company: ① the contractual right to collect the cash flow of the financial asset is terminated. ② The financial assets have been transferred by the Company, and almost all risks and rewards associated with the ownership of the financial asset are transferred. ③ The financial assets have been transferred, and the Company had neither transferred nor retained almost all risks and rewards associated with the ownership of the financial assets, but given up the control over the financial assets. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 60 For financial asset that is entirely transferred and meets the conditions of de-recognition, the difference between the book value of financial asset transferred and the sum of consideration received from such transfer and the accumulated changes in fair value, directly included into other comprehensive income and corresponding to the derecognized amount (in accordance with the contract terms of the financial assets involved in such transfer, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount), is included into the current profits and losses. For financial asset that is partially transferred and meets the conditions of derecognition, the overall book value of transferred financial asset is split according to their relative fair value between the part derecognized and the part not derecognized, and the difference between the following two amounts is recognized in current profits and losses: the sum of consideration received due to transfer and the amount amortized to the derecognized part and corresponding to the accumulative change of fair value which is firstly included into the other comprehensive income (in accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount), and the overall book value of aforesaid financial assets. Financial liabilities Classification, recognition basis and measurement method of financial liabilities The Company’s financial liabilities are grouped, upon initial recognition, into financial liabilities measured at fair value, with the changes included in the current profit or loss and other financial li abilities. Financial liabilities measured at fair value with changes included into the current profits and losses include trading financial liabilities and financial liabilities designated to be measured as at fair value with changes included into the current profits and losses upon initial recognition. The net gain or loss arising from changes in fair value, dividends and interest paid related to such financial liabilities are included into current profits and losses in which they are incurred. Other financial liabilities are measured subsequently at the amortized cost by adopting the effective interest method. Apart from the following items, the Company will classify the financial liabilities as those measured at amortized cost: ① the financial liabilities measured at fair value with changes included into current profits and losses include financial liabilities held for trading (including derivatives that are financial liabilities) and financial liabilities designated to be measured at fair value with changes included into current profits and losses. ② The financial liabilities formed by transferring the financial assets failed to meet the conditions for derecognition or formed by continuous involvement of transferred financial assets. ③ The financial guarantee contracts that do not fall under above ① and ② as well as loan commitments at a rate below the market rate of interest that do not fall under above ①. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 61 Where a contingent consideration is recognized by the Company as a financial liability in business combination not under common control, such financial liability shall be measured at fair value with changes included into the current profits and losses during accounting treatment. Derecognition conditions for financial liabilities When the current obligation of the financial liabilities has been relieved in whole or part, the part of the financial liabilities or obligations that have been relieved upon confirmation is terminated. If the Company reaches an agreement with the creditor to replace the existing financial liabilities by undertaking new financial liabilities and the contract terms of the existing and new liabilities are different in substance, the existing financial liabilities shall be derecognized while the new liabilities shall be recognized. Where all or part of the contract terms of the existing financial liabilities are subject to material modification, the Company shall derecognize all or part of the existing financial liabilities while recognizing the financial liabilities with modified ter ms as new financial liabilities. The difference between the book value of the terminated part upon confirmation and the considerations paid is included in the current profit and loss. Method for determining the fair value of financial assets and financial liabilities The Company measures the fair value of financial assets and financial liabilities in the main market. If there is no major market, the Company measures the fair value of financial assets and financial liabilities with most beneficial price for the market and adopts evaluation techniques with much available data and other information support that is applicable at that time. Input data for determining fair values has three levels, wherein the first level is the unadjusted price available for the same asset or liability on the date of evaluation in an active market; the second level is directly or indirectly observable input data of relevant assets or liabilities apart from input data of the first level; the third level is unobservable input data of relevant assets or liabilities. The Company gives priority of using the first-level inputs and takes the third-level inputs as the last. The lowest layer that has significant impact on the overall fair value evaluation determines which level this fair va lue evaluation result shall belong to. Investments in equity instruments of the Company are measured at fair value. However, under certain circumstances, if recent information needed to determine the fair value is insufficient, or if the estimated amount of the fair value features an extensive distribution scope and the cost represents the best estimate of the fair value in that distribution scope, the cost may represent the appropriate estimate on the fair value within that distribution scope. Offsetting financial assets and financial liabilities Financial assets and liabilities of the Company are presented separately in the balance sheet without offsetting. However, the net amount resulting from the offsetting between financial assets and financial liabili ties shall be presented in the balance sheet only if all of the following criteria are met: (1) The Company has the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 62 statutory right to set off recognized amounts which is currently enforceable. (2) The Company intends either to settle on a net basis, or to realize the financial assets and pay off the financial liabilities simultaneously. Distinction and relevant treatment methods of financial liabilities and equity instruments The Company distinguishes between financial liabilities and equity instruments according to the following principles: (1) Where the Company cannot unconditionally avoid fulfilling certain contractual obligation by delivering cash or other financial assets, then such contractual obligation is in line with the definition of the financial liability. Although certain financial instruments do not expressly contain terms and conditions for the contractual obligation to deliver cash or other financial instruments, the contractual obligation may be indirectly formed according to other terms and conditions. (2) Where a financial instrument must or is able to be settled by the Company’s own equity instrument, the Company shall consider whether the Company’s own equity instrument as the settlement instrument is a substitute of cash or other financial assets, or the residual interest in the assets of an entity after deducting all of its liabilities. If it is the first case, the instrument shall be the financia l liability of the issuer. If it is the latter case, the instrument shall be the equity inst rument of the issuer. Under some circumstances, the contract of a financial instrument may require that the financial instrument must or is able to be settled by the Company’s own equity instrument. The amount of contractual right or contractual obligation equals to the amount of its own equity instrument receivable or payable multiplied by its fair value at the time of settlement. Whether the amount of such contractual right or obligation is fixed, or varies, wholly or partially, based on variables other than the market value of the Company’s own equity instrument (such as interest rates, the price of a commodity or the price of a financial instrument), such contract is classified as financial liability. In classifying financial instruments (or components) in the consolidated statements, the Company shall take into account all the terms and conditions agreed between members of the Company and holders of the financial instruments. If the Company, as a whole, undertakes the obligation to deliver cash, other fi nancial assets or settle in other ways that cause the financial instrument to become a financial liability, the instrument shall be classified as financial liability. If a financial instrument or any of its components is a financial liability, the relevant interests, dividends, gains or losses, and gains or losses from redemption or re-financing and so on are included in the current profits and losses of the Company. If a financial instrument or its component belongs to an equity instrument, for its issue ( including re-financing), repurchase, sale or cancellation, the Company will treat it as a change in equity and will not recognize the change in fair value of equity instruments. Impairment of financial instruments Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 63 The Company, based on expected credit losses, performed impairment accounting and recognized credit impairment losses on financial assets measured at amortized cost, financial assets classified to be measured at the fair value with the changes included into other comprehensive incomes as well as f inancial guarantee contracts. The expected credit loss is a weighted average of credit losses on financial instruments weighted at the risk of default. Credit loss refers to the difference between all contractual cash flows discounted as per the original effective interest rate and receivable from the contract and all cash flows expected to be received by the Company, namely, the present value of a shortage of cash. Among them, financial assets purchased or underlying with credit impairment of the Company shall be discounted at the financial assets’ effective interest rate after credit adjustment. For accounts receivable arising from transactions scoped in ASBE on Revenue not containing significant financing components, the Company takes the simplified measurement method to measure its loss provisions based on the amount of expected credit losses during the entire duration. For financial assets purchased or underlying with credit impairment, the cumulative change in expected credit loss during the entire duration since the date of balance sheet date after initial recognition will be recognized as provision for loss. On each date of balance sheet, the amount of change in expected credit loss during the entire duration is included into current profits and losses as impairment losses or gains . Even if the expected credit loss within the entire duration determined on the date of balance sheet is less than the amount of expected credit loss reflected by estimated cash flow upon initial recognition, any favorable change in expected credit loss will be recognized as impairment gains. In addition to other financial assets adopting the aforesaid simplified measurement method or financial assets purchased or underlying with credit impairment, the Company shall assess whether the credit risk of relevant financial instruments has increased significantly since the initial recognition on each balance sheet date, and shall respectively accrue their provision for loss and recognize the expected credit loss and its change: 1. In the event that the credit risk has not increased significantly since the initial recognition and it is in Stage I, the Company shall measure its loss provisions based on the amount of expected credit losses for the coming 12 months of such financial instrument and calculate the interest on the basis of book balance and effective interest rate. 2. In the event that the credit risk of the financial instrument has increased significantly since the initial recognition but with no credit impairment and it is in Stage II, the Company shall measur e its loss provisions based on the amount of the expected credit loss of the financial instrument during the entire duration and calculate the interest on the basis of book balance and effective interest rate. 3. In case that credit impairment of the financial instrument has incurred since the initial recognition and it is in Stage III, the Company shall measure the loss provisions of the financial instrument based on the amount of expected credit losses during the entire duration, and calculate the interest a t amortized cost and effective interest rate. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 64 Increases or reversals of the provisions for credit losses of the financial instrument are recorded in the current profits and losses as impairment losses or gains. Except for financial assets classified to be measured at fair value through other comprehensive income, the book balance of financial assets is deducted with provision for credit losses. For financial assets classified to be measured at fair value, with the change included in other comprehensive incomes, the Company shall recognize the provision for credit loss in other comprehensive incomes, and shall not decrease the book value of such financial assets listed in the balance sheet. Where the Company has measured the provisions for losses based on the amount of the expected credit loss over the entire duration of such financial instruments in the prior accounting period, but on the current balance sheet date, such financial instruments no longer fall into the scope of significantly increased credit ris k since initial recognition, the Company measures the provisions for the losses of such financial instruments based on the amount equivalent to the expected credit losses over the coming 12 months on the current balance sheet date, with resulting carrybacks of provisions for losses included into the current profits and losses as impairment gains. ① Significant increase in credit risk The Company determines if there is a significant increase in credit risk of financial instruments since initial recognition by comparing the risks of default of financial instruments on the balance sheet date and the date of initial recognition based on reasonable and well-grounded forward-looking information available. For the financial guarantee contract, when the Company applies the regulations on impairment of financial instruments, the date when the Company becomes the party which makes the irrevocable undertaking is regarded as the date of initial recognition. The Company will take into account the following factors when it assesses whether the credit risk is significantly increased: whether the operating results of the debtor has actually changed or is expected to significantly change or not; whether the regulatory, economic or technical environment where the debtor is located has significantly and adversely changed or not; whether the value of the collateral as the debt pledge or the guarantee provided by the third party or credit enhancement quality has significantly changed or not, as these changes are expected to reduce the economic motives of the debtor to make repayments within the time limits prescribed in the Contract or to impact the default probability; whether the expected performance or repayment behavior of the debtor has significantly changed or not; whether the Company has changed its management method for financial instrument credit or not, etc. On the balance sheet date, if the Company determines that the financial instrument only carries low credit risks, then the Company will assume that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of default on financial instruments is low, the borrower is highly capable of performing its contractual cash flow obligations in the short term, and even if the economic situation and operating environment are adversely changed over a long period of time but not necessarily reducing the borrower’s performance of its contractual cash obligations, then the financial instrument is considered as having a lower credit risk. ② Credit-impaired financial assets Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 65 In case of one or more events adversely affecting the estimated future cash flows of a financial asset, the financial asset becomes a financial asset to which a credit impairment has occurred. Evidence of a c redit impairment on a financial asset includes the following information: serious financial difficulties of the debtor; a breach of contract by the debtor, such as a default or overdue payment of interest or principle; the creditor, for economic or contractual considerations related to financial difficulties of the debtor, offers the debtor concessions that are impossible in any other circumstances; it is probable that the debtor will enter bankruptcy or other financial reorganization; the disappearance of an active market for that financial asset because of financial difficulties of the issuer or the debtor; the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses. The credit impairment of financial assets may be caused by the joint effect of the above multiple events, and may not be caused by individually identifiable events. ③ Determination of expected credit losses In assessing the expected credit loss, the Company takes reasonable and well -founded information into consideration about past events, current condition and predictions of future economic status based on the expected credit loss of single and combined financial evaluation instruments. The Company divides the financial instruments into different portfolios based on the common credit risk characteristics. See accounting policies of relevant financial instruments for single evaluation standards and combined credit risk characteristics. The Company determines the expected credit losses of financial instruments under the following methods: For financial assets, the credit loss is calculated as the present value of the difference between the contractual cash flows to be collected by the Company and cash flows that are expected to be collected. For the financial guarantee contract, the credit loss is the expected payment made to the contract holder by the Company to reimburse the contract holder against the credit losses incurred by the contract holder, deducted by the present value of the differences between the amounts expected to be received by the Company from the contract holder, debtor or any other party. For financial assets which have been credit-impaired on the balance sheet date but are not purchased or underlying with credit impairment, the credit loss is calculated as the difference between the book balance of such financial assets and present value of anticipated future cash flows discounted at the original effective interest rate. 11. Notes receivable The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics, divides the notes receivable into different combinations and determines the accounting estimation policy of expected credit loss. Classification of combination Basis for determining combination Provision method Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 66 Banker’s acceptances combined The acceptor is a banking financial institution. The Company believed that there was no significant credit risk in the bank acceptance held by the Company and there will be no significant loss due to the default of the bank. Trade acceptances combined The acceptor is a non-bank financial institution or enterprise like a finance company. The company shall measure the bad-debt provision of receivable trade acceptance based on the expected credit loss during the entire duration. 12. Accounts receivable For the accounts receivable arising from transactions regulated by the Accounting Standards for Business Enterprises No.14 Revenue Standards (whether or not containing significant financing components) and the lease accounts receivable regulated by the Accounting Standards for Business Enterprises No.21 Leasing , the Company takes the simplified measurement method to measure its loss provisions based on the amount of expected credit losses during the entire duration. For accounts receivable, the Company assesses whether the credit risk increases significantly on the basis of a single financial instrument or a combination of financial instruments. The Company singly evaluates the credit risk of accounts receivable with significantly different credit risks and the following characteristics: accounts receivable in dispute with the other party or involved in litigation and arbitration; accounts rece ivable that there are obvious indications showing that the debtor is likely to be unable to fulfill the repayment obligation. The Company cannot obtain sufficient evidence of significant increase in credit risk at the level of single financial instrument at reasonable cost, but it is feasible to assess whether the credit risk increases significantly on the basis of the combination of financial instruments. When the assessment is performed on the combination of financial instruments, the Company can classify the financial instruments based on the common credit risk characteristics. The Company classifies the accounts receivable into the following combinations based on their credit risk characteristics: Classification of combination Basis for determining combination Provision method Credit loss that accrues accounts receivable by aging analysis method Accounts receivable with the same aging have similar credit risk characteristics Expected rates of credit loss Related parties within the consolidation scope Funds of subsidiaries within the consolidation scope of controlling shareholders No expected credit loss under normal circumstances If there is objective evidence showing that the credit impairment of certain account receivable has incurred, the Company shall singly withdraw the bad debt reserve of accounts receivable and confirm the expected credit loss. For accounts receivable with credit loss accrued from accounts receivable by aging analysis method, based on the actual credit loss of previous years and considering the forward-looking information of the current period, the accounting estimate policies of the Company for measuring the expected credit loss are as follows: Aging Expected rates of credit loss Within 1 year 5.00% 1-2 years 10.00% Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 67 2-3 years 20.00% 3-4 years 50.00% 4-5 years 80.00% More than 5 years 100.00% The Company calculates the expected credit loss of accounts receivable on the balance sheet date. If the expected credit loss is greater than the carrying amount of the current accounts receivables impairment provision, the Company will recognize the difference as impairment loss of accounts receivable, debit “credit impairment loss” and credit “bad debt provision”. Otherwise, the Company will recognize the difference as impairment gains and make opposite accounting records. For the actual credit losses of the Company, if the relevant accounts receivables are determined to be unrecoverable and are approved to be written off, the Company shall debit “bad debt provision” and credit “accounts receivable” according to the approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the “credit impairment loss” will be debited according to the difference. 13. Accounts receivable financing Where the following conditions are reached at the same time, the financial assets can be classified as those measured at fair value and its change and included into other comprehensive income: the Company adopts the business management mode of the financial assets for the purpose of collecting contractual cash flow and selling the financial assets. In accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount. The Company transfers the accounts receivable held in the form of discount or endorsement, and such business is more frequent and involves a large amount of money. Its business management model is, in essence, to collect and sell contract cash flow. According to the relevant provisions of financial instrument standards, the accounts receivable is classified into financial assets with changes measured at fair value and included in other comprehensive income. 14. Other accounts receivable Determination and accounting method for expected credit loss of other accounts receivable The Company divides the process of credit impairment of other accounts receivable into three stages and adopts different accounting treatment methods for the impairment of other accounts receivable in different stages: Credit risk has not increased significantly since initial recognition (Stage I) For the financial instruments in this stage, the Company shall measure the loss provisions based on th e expected credit loss in the next 12 months. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 68 The Company classifies other accounts receivable based on aging as a credit risk characteristic and measure them on the basis of combination, which is equivalent to the expected credit loss in the next 12 month s. Credit risk has increased significantly since initial recognition but has not been impaired (Stage II) For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss during the entire duration. Credit impairment after initial recognition (Stage III) For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss during the entire duration. 15. Inventories Inventories of the Company mainly include low-value consumables, raw materials, goods in-process, merchandise inventory and goods shipped in transit. The inventories are managed based on perpetual inventory system, and valued at actual cost on acquisition. Low-value consumables and packaging materials are amortized using one-off amortization method. Low-value consumables and packaging materials are amortized using one-off amortization method. Inventory revaluation reserves of merchandise inventories and raw materials are generally ac crued as the excess of the higher cost of individual inventory over its net realizable value. For raw and auxiliary materials of larger amount and lower unit price, inventory revaluation reserves shall be accrued based on the category. Net realizable value of stock goods, work in progress, or held-for-sale materials are determined by their estimated selling price deducted by estimated selling expenses and related taxes. Net realizable value for material held for production are determined by the estimated selling price of finished goods deducted by the estimated cost to completion, selling expenses and the related taxes. 16. Contract assets Recognition method and standard of contract asset Contract asset refers to the rights of the Company to receive consideration for goods transferred to the customer, which depend on other factors except for the lapse of time. Where the Company sells two clearly distinguished commodities to the customer and has the right to collect the payment because one commodity is delivered and the payment relies on the delivery of the other commodity, the Company will treat the collection rights as the contract assets. Determination and accounting method for expected credit loss of contract assets Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 69 For the determination method for expected credit loss of contract assets, please refer to relevant contents in 10. Financial asset and liabilities; 11. Notes receivable and 12. Account receivable. The Company calculates the expected credit loss of contract assets on the balance sheet date. If the expected credit loss is greater than the carrying amount of the current impairment provision of contract assets, the Company will recognize the difference as impairment loss, debit "asset impairment loss" and credit "contract asset impairment provision". Otherwise, the Company will recognize the difference as impairment gains and make opposite accounting records. For the actual credit losses of the Company, if the relevant contract assets are determined to be unrecoverable and are approved to be written off, the Company shall debit "contract asset impairment provision" and credit "contract assets" according to the approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the "asset impairment loss" will be debited according to the difference. 17. Contract costs Method for determining asset amount related to contract cost The Company’s assets related to the contract cost comprise the contract performance cost and the contract acquisition cost. The contract performance cost, which is the cost incurred to perform the contract by the Company, not covered by the accounting standards for business enterprises of other companies, shall be deemed as one asset if it meets the conditions below: the cost is directly related to one existing contract or one contract expected to be acquired and covers direct labor cost, direct material cost, manufacturing cost (or similar cost), the cost clearly specified to be borne by the customer and other costs incurred by the contract only; the cost increases the resources available to the Company to fulfill performance duties in the future; the cost is expected to be recovered. The contract acquisition cost refers to the incremental cost incurred by the Company for the purpose of securing a contract, which will be recognized in the form of contract acquisition cost as an asset if it is expected to be recovered. If the amortization period of the assets does not exceed one year, such cost shall be included as current profit or loss. Incremental cost refers to the cost which will not incur unless a contract is secured by the Company (e.g. sales commission, etc.). Other costs (such as the travel expense, whether or not the contract will be acquired, except the incremental cost which can be recovered as expected) incurred the Company for purpose of acquiring the contract shall be included in the current profit or loss at the time of occurrence, unless those clearly specified to be borne by the customer. Asset amortization related to contract cost The Company’s assets related to contract costs are amortized on the same basis as revenue recognition of goods related to the asset and included into the current profits or losses. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 70 Asset impairment related to contract cost When the Company recognizes the impairment loss related to contract cost, the Company shall firstly recognize the impairment loss of other assets which are recognized as per other account standards for business enterprises and are related to the contract. Then, if the book value is higher than the difference between the remaining consideration expected to be received for the transfer of the commodity associated with the asset and the estimated costs to be incurred for the relevant commodity, impairment provision will be made for the excess portion and recognized as asset impairment loss. If the factors causing the impairment of prior period change and make the previous difference between the above-mentioned items higher than the book value of the asset, the withdrew asset impairment provision shall be reversed and included into the current profits or losses, although the book value of asset after reversion shall not exceed the book value of the asset at the reversion date under the condition of not withdrawing the impairment provision. 18. Long-term equity investment Long-term equity investment of the Company mainly includes the investment to the subsidiaries, associated enterprises and joint ventures. The Company follows the basis to judge the joint control: all the participants or group of par ticipants collectively control the arrangements, and the policies for activities related to such arrangement must be agreed by all such participants. Generally, it constitutes significant influence on an investee if the Company controls 20% (inclusive) or more (less than 50%) voting shares of the investee directly or indirectly through a subsidiary. Where the Company controls less than 20% voting shares of the investee directly or indirectly through a subsidiary, significant effects on the investee shall be judged based on the facts and circumstances in the case that appoint representative to the board of directors or similar organ of power under the investee, participate the development of financial and operating policies of the investee, conduct important trading with the investee, dispatch management personnel to the investee, or provide key technical data to the investee. The one forming control over the investee is the subsidiary of the Company. For the long-term equity investment acquired through business combination under the same control, the share of the combined party in the book value of net assets presented in consolidated financial statements of ultimate controlling party acquired at the date of combination is recognized as initial investment cost of long-term equity investment. The book value of net assets for the combined party is negative on the combining date, and the long-term equity investment cost is determined as zero. In case that equity of the investee under the same control is obtained through multiple deals step by step to finally form business combination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, the share of the book value of combined party's net assets present ed in Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 71 consolidated financial statements of ultimate controlling party acquired at the date of combination is recognized as initial investment cost of long-term equity investment. The difference between initial investment cost and the sum of the book value of long-term equity investment before the combination is realized and the book value of consideration additionally paid to further acquire shares on the date of combination is adjusted against the capital surplus; if the capital surplus is not sufficient to be offset, the remaining balance is adjusted against retained earnings. For long-term equity investments acquired through business combinations not under common control, the combined cost is used as the initial investment cost. In case the equity of the investee not under the same control is obtained through multiple deals step by step to finally form business combination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, initial investment cost accounted using cost method will be the sum of the book value of original equity investment and new investment cost. For equity held before the date of acquisition and accounted with equity method, other related comprehensive income using equity met hod for accounting shall not be adjusted, and accounting treatment should be applied to these investments on the same basis as those adopted by the investee for direct disposal of related assets or liabilities. For equity held before the date of acquisition and accounted at fair value in the available-for-sale financial assets, the accumulated change in fair value which is originally included in other comprehensive income shall be transferred to the investment profit or loss for the current period on the combining date. Apart from the long-term equity investments acquired through business combination mentioned above, the long-term equity investments acquired by cash payment is used as the cost of investment based on the purchase price actually paid. For long-term equity investments obtained by issuing equity securities, the fair value of the equity securities issued is recorded as the initial investment cost. For long-term equity investments obtained by exchange of non-monetary assets, the initial investment cost shall be determined in accordance with relevant provisions in the Accounting Standards for Business Enterprises No.7 Exchange of Non-Monetary Assets; the initial investment cost shall be determined in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No.12 Debt Restructuring by the long-term equity investment of debt restructuring. Investment in subsidiaries by the Company shall be calculated by cost method, while investment in joint ventures and associates by the Company shall be calculated by equity method. For long-term equity investment calculated by cost method, the cost of long-term equity investment shall be adjusted when the investment is added or recovered. The cash dividends or profits declared to b e distributed by the investee shall be recognized as the current investment income. For long-term equity investment calculated by equity method in subsequent measurement, the book value of the long-term equity investment shall be increased or decreased accordingly with the changes in owner’s equity of the investee. The shares of the net profits and losses of the investee attributable to the Company shall be recognized based on the fair value of all identifiable net assets of the investee upon acquisition of the investment in accordance with the accounting policies and accounting period of the Company, after deducting the parts of the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 72 profits and losses arising from internal transactions between the associates and joint ventures attributable to the Company calculated on the basis of shareholding ratio and adjusting the net profits of the investee. When disposing the long-term equity investment, the balance between the book value and the acquired price actually shall be included in the current profit and loss. As for long-term equity investments calculated by the equity method, when other changes in owners’ equity other than net gain or loss of the investee are recorded in owners’ equity, the amount initially recorded in owners’ equity is proportionally transfer red into current investment income. If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong to package transaction, the Company will conduct accounting treatment for each transaction. In case of package transaction, all transactions shall be calculated as one transaction of disposing subsidiaries and losing control power for accounting treatment. However, the difference between disposal cost of each transaction and book value of long-term equity investment corresponding to equity disposed before losing control power shall be recognized as other comprehensive income and then shall be transferred into current profits and losses of losing control power upon such loss. 19. Investment real estate Measurement model of investment real estate Measurement by cost method Depreciation or amortization methods Leased houses and buildings are included into the investment real estates of the Company. Measurement is carried out by cost model. The investment real estates of the Company are depreciated or amortized by the composite life method. The estimated service life, net residual value ratio and annual depreciation (amortization) rate of the investment real estate are as follows: Type Depreciation period (year) Estimated residual value ratio (%) Annual depreciation rate (%) Houses and buildings 20 years 5.004.75 20. Fixed assets (1) Recognition conditions Fixed assets of the Company refer to tangible assets with service life over one year, which are held for producing goods, rendering labor services, lease (exclusive of leased houses and buildings) or operation and management. Fixed assets are recognized when the economic benefits related thereto are likely to flow into the Company and their costs can be measured reliably. Fixed assets include houses and buildings, machine and equipment, transportation equipment and other equipment, and the actual cost at the time of acquisition is taken as the entry value. Among them, the cost of purchased fixed assets includes the purchase price, import duties and other related taxes, as well as other expenditures that Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 73 can be directly attributed to the fixed assets before the fixed assets reach the predetermined serviceable state; the cost of the self-constructed fixed assets consists of necessary expenses incurred before the constructed assets are ready for the intended use; the fixed assets invested by investors shall be accounted for at the value agreed in the investment contract or agreemen t, or at the fair value if the value agreed in the investment contract or agreement is unfair; the fixed assets rented in by way of financial lease shall be accounted for at the fair value. For fixed assets obtained by financing lease, the lower of the fair value of rented assets and the present value of the minimum lease payment on the lease start date shall be recorded as the entry value. (2) Depreciation method Type Depreciation method Depreciation period Residual value rate Annual depreciation rate Houses and buildings Straight-line method 20 years 5.00% 4.75% Machine and equipment Straight-line method 10 years 5.00% 9.50% Transportation equipment Straight-line method 5 years 5.00% 19.00% Other equipment Straight-line method 5 years 5.00% 19.00% Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assets mainly includes renovation/modification expenditure, repair expenditure, etc. When the relevant economic benefits are likely to flow in and the costs can be measured in a reliable manner, they shall be in cluded into the cost of fixed assets. For the replaced part, the book value shall be derecognized. All the other subsequent expenditures are recognized in profit or loss for the current period in which they are incurred. The Company will recheck the estimated service life, the estimated net residual value and the depreciation method of the fixed assets on each balance sheet date. Changes, if any, are regarded as the accounting estimate changes. A fixed asset is derecognized when it is disposed of or no economic benefit is expected from the use or disposal of the asset. The amount of proceeds on sale and transfer of a fixed asset as well as disposal of a scrapped or damaged fixed asset less its carrying amount and related taxes, is recognized in profit and loss for the current period. 21. Construction in progress Construction in progress is measured at its actual cost. The self-operating works is measured according to the direct material, direct wage, direct construction cost, etc.; the outsourced works is me asured according to the project price payable; the project cost of the equipment installation works is determined according to the value of installed equipment, installation cost, commissioning cost and other expenditures incurred. The cost of construction in process shall also include borrowing costs that should be capitalized. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 74 The fixed assets constructed by the Company shall be transferred into fixed assets at the estimated value based on project budget, construction cost and actual project cost from the date when fixed assets get ready for intended use and depreciation of such assets will be accrued in next month. Upon completion of the final accounts formalities, the original value difference of the fixed assets will be adjusted. 22. Borrowing costs Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the Company that can be directly attributable to the acquisition and construction or production of qualifying assets will be capitalized and incurred in the relevant asset cost. Other borrowing costs are recognized as expenses based on the amount incurred, and included in the current profit and loss. Qualifying assets are defined as assets that require a substantial amount of time (usually more than one year) for construction or production activities before the asset is ready for its intended use or sale. These include fixed assets, intangible assets and inventory. Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costs related to the qualifying assets when the asset expenditure has been incurred, the borrowing costs have been incurred, and the acquisition, construction or production activities necessary to prepare assets for their intended use or sale are in progress. Where the acquisition or production of a qualifying asset are interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. Capitalization of borrowing costs shall cease once the acquisit ion, construction or production necessary to prepare the qualifying asset for its intended use or sale are complete. Method for calculating the amount of borrowing costs to capitalize: If borrowing funds specifically for acquiring, constructing or producing qualifying assets, the amount of interest eligible for capitalization by the Company will be the actual interest costs incurred during the specific borrowing period minus the interest income obtained by depositing or temporarily investing unspent borrowed funds. Where a general borrowing is used for the acquisition, construction or production of a qualifying asset, the Company shall calculate and determine its amount of interest to be capitalized by taking the weighted average of the accumulative asset expenditure minus the asset expenditure of the specific borrowing, multiplied by the weighted average interest rate of the general borrowing used. 23. Right-of-use assets The right-of-use asset refers to the right of the Company to use the leased assets as a lessee during the lease term. (1) Initial measurement On the commencement date of the lease term, the Company carries out initial measurement to the right -of-use asset. The cost comprises the following four items: ① initial measurement amount of lease liabilities; ② the amount of lease payment made on or before commencement date of lease term, net of relevant amount of used lease incentives (if any); ③ the initial direct cost incurred (i.e., the incremental cost incurred by reaching the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 75 lease agreement); ④ costs expected to be incurred to disassemble and remove the leased assets, restore the site where the leased assets are located or restore the leased assets to the conditions as agreed under the terms of the lease, excluding costs incurred to produce the inventory. (2) Subsequent measurement On the commencement date of the lease term, the Company carries out subsequent measurement to the right -of-use assets in the cost mode, that is, measuring the right-of-use assets by deducting the accrued depreciation amount and accrued impairment loss from the cost. Where the Company remeasures the lease liabilities according to relevant provisions of the lease criterion, the book value of the use-of-right asset shall be adjusted correspondingly. Depreciation of right-of-use assets On the commencement date of the lease term, the provision for depreciation shall be made by the Company to the right-of-use assets. Generally, the depreciation amount of the use-of-right assets is accrued from the month when the lease term starts. The accrued depreciation amount shall be recognized as the cost of relevant assets or current profit or loss according to the purpose of the right-of-use assets. When determining the depreciation method of right-of-use asset, the Company shall make decisions according to the expected consumption method of the economic benefits related to the right -of-use asset and accrue depreciation to the right-of-use asset with the linear method. When determining the depreciation years of the right-of-use asset, the Company shall follow the principles below: If the Company can reasonably determine that the ownership of the leased asset is acquired at the expiration of the lease term, depreciation shall be accrued within the remaining service life of the leased asset. Where it is not reasonably certain that the ownership of the lease assets can be obtained upon expiry of lease term, the lease assets shall be depreciated over the shorter of the lease term and the remaining service life of the lease assets. Impairment of right-of-use assets In case of impairment of right-of-use asset, the Company shall make subsequent depreciation as per the book value of right-of-use asset after the impairment loss is deducted. 24. Intangible assets (1) Valuation method, service life and impairment test The intangible assets of the Company mainly include land use rights, software, trademarks and patents. As for intangible assets that are purchased, the actual cost is composed of the actual price paid and other relevant expenditures. For the intangible assets that are invested by investors, the actual cost is determined by the agreed value in the investment contract or agreement, but if the agreed value is not fair, the fair value will be taken as the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 76 actual cost. Intangible assets are amortized using the composite life method, and the classifications and amortization periods of the Company’s intangible assets are as follows: Type Amortization year Land use right 50 years Patents 10 years Software 3-5 years Trademark or domain name 10 years The Company’s land use rights are amortized evenly according to the lease term, starting from the date of transfer. The Company’s patent rights, non-patented technologies, special software use rights and other intangible software amortized evenly by stages according to whichever period is the shortest: the asset’s estimated useful life, the beneficial period stipulated in the contract, or the period of legal validity. The amount of amortization is included into the current profits and losses or included into the relevant asset cost according to the beneficiaries. At the end of each year, the Company shall review, and adjust in case of changes, the estimated useful lives and amortization methods used for intangible assets with limited useful lives; in each accounting period, the Company carries out reviews of the estimated useful life of intangible assets whose useful life is uncertain. Where there is evidence showing that the useful life of these intangible assets is limited, the Company will estimate the useful life thereof and amortize these intangible assets during the estimated useful life remaining. The internal R&D expenditures of the Company can be divided into expenditures made at the research stage and those made at the development stage, depending on the nature of the expenditure and the extent of uncertainty on whether the R&D activities will finally form intangible assets. For internally-generated intangible assets, expenditures at the research stage are included into the current profits and losses when incurred; expenditures at the development stage are recognized as an asset, when the following conditions are met: It is technically feasible to complete the intangible assets so that they can be used or sold. There is an intention to complete and use or sell the intangible assets. There is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets themselves. There is sufficient support in terms of technological, financial and other resources in order to complete the development of the intangible assets, and there is the capability to use or sell the intangible asset; The expenditures made on the intangible assets during the development stage can be measured reliably. Expenditures made in the development stage that fail to meet the above conditions shall be included in the current profits and losses when incurred. The development expenditures previously included in the profit and loss statement will not be recognized as assets in subsequent periods. The expenditures incurred and capitalized at the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 77 development stage are recorded as development expenditures on the balance sheet and will be carried over as the intangible asset on the date when the project is ready for its intended use. If the expenditures made at the research and development stages cannot be distinguished, all the R&D expenditures incurred will be fully included in the current profits and losses. The costs of the intangible assets generated by internal development activities only include the total expenditures incurred from the time when the capitalization conditions are met to the point when the intangible assets are used for their intended purposes; for expenditures that are already recorded as such in the profit and loss statement before the capitalization conditions are met during development of the same intangible asset, no adjustments will be made. 25. Long-term deferred expenses On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures and associates, including long-term equity investments, fixed assets, projects under construction, and intangible assets with finite useful lives. If any of the signs listed below are identified, this is an indication that the asset may be impaired and the Company will conduct an impairment test. Impairment test is carried out on the intangible assets with uncertain goodwill and beneficial period at the end of each period, irrespective of whether there is any indication that the assets may be impaired. If there is difficulty in testing the recoverable amount of a single asset, a test shall be conducted on the asset group which the asset belongs to, or on a combination of asset groups. After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference shall be recognized as an impairment loss. Once such an impairment loss has been confirmed, it shall not be reversed in the subsequent accounting period. The recoverable amount of an asset is the greater of its fair value less the net value of asset disposal and present value of expected future cash flow. The following signs may indicate asset impairment: Current market price of the asset drops substantially, with the drop in price being notably higher than the expected drop over time or due to the asset’s normal use. Significant changes occur in the current period, or are predicted to occur in the near future, with regard to the economic, technological or legal environment in which the enterprise conducts its business operations, or in the asset market, and these changes have or will have negative impacts on the enterprise; The market interest rate or other market investment return rates have risen in the current period, affecting the enterprise’s discount rate for calculating the asset’s present value of expected future cash flow, and leading to a substantial decrease in recoverable amounts of the assets; There is any amount of evidence to prove the asset has been out of date or the physical asset has been damaged. The asset has been or will be left unused, terminated for use or disposed of ahead of schedule. There is evidence from the enterprise’s internal reports proving that the economic performance of the asset has been lower or will be lower than expected. For example, the net cash flow Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 78 generated by the assets or operating profits (or losses) realized is much lower (or higher) than the expected amounts; Other signs indicating that the asset may have been impaired. 26. Contract liabilities Contract liabilities reflect the obligations of the Company to transfer goods to the client for which consideration is received or receivable from the client. Before the Company transfers goods to the client, and the client has paid the consideration in the contract or the Company has obtained the right of unconditionally collecting the consideration, the contract liabilities are recognized according to the received or receivable amount either at the time of actual payment by the client or when the payment is due―whichever is earlier. 27. Employee remuneration (1) Accounting treatment method of short-term remuneration Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employee welfare, housing provident funds, labor union funds, employee education funds, medical insurance premiums, industrial injury insurance premiums, and maternity insurance premiums. In the accounting period during which the employee has rendered service, the actual short-term remuneration incurred is recognized as a liability and included into the current profits and losses or related asset costs based on the beneficiary. (2) Accounting treatment method of post-employment benefits The post-employment benefits mainly consist of basic endowment insurance, unemployment insurance, enterprise and annuity payments, which are classified into defined contribution plans according to the risks and obligations undertaken by the Company. Moreover, the contributions paid into a separate entity in exchange for the employee’s services during the accounting periods at the balance sheet date are recognized as a liability, and recorded in current profits and losses or relevant asset costs based on the beneficiary. (3) Accounting treatment method of dismissal benefits Dismissal benefits are required in instances when the Company terminates labor relationships with a certain employee prior to the maturity of their labor contract. The Company shall recognize the employee remuneration liabilities incurred from termination benefits and include them into the current profits and losses. This occurs either when the Company cannot unilaterally withdraw the termination benefits provided by the plan on the termination of the labor relationship or dismissal proposal, or when the Company recognizes the costs or expenses related to restructuring the payment of termination benefits―whichever occurs earlier. The compensations paid exceeding one year will be discounted then included in the current profits or losses. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 79 (4) Accounting treatment method of other long-term employee benefits Other long-term benefits mainly include long-term incentive plans and long-term benefits. The Company conducts accounting treatment according to relevant provisions of the defined contribution plans. 28. Lease liabilities (1) Initial measurement The Company shall initially measure the lease liabilities according to the present value of the lease payment unpaid on the commencement date of the lease term. 1) Lease payment The lease payment refers to the payment made by the Company to the leaser as for the right of use the leased assets during the lease term, including: ① fixed payment and practical fixed payment, with relevant lease incentive (if any) deducted; ② variable lease payments that are based on an index or rate, which shall be determined at the time of initial measurement based on the index or rate on the commencement date of the lease term; ③ the exercise price of a purchase option if the Company is reasonably cer tain to exercise that option; ④ the amount payable for exercising the option to terminate the lease if the Company intends to exercise the option to terminate the lease during the lease term; ⑤ expected payable amount based on secured residual value provided by the Company. 2) Discount rate In calculating the present value of the lease payments, the Company adopts the interest rate embedded in the lease as the discount rate. The rate is the interest rate that equates the sum of present value of the lessor's lease receipts and the present value of the unsecured residual value to the sum of the fair value of the leased asset and the lessor's initial direct costs. If the Company is unable to determine the interest rate embedded in the lease, it will adopt the incremental borrowing rate as the discount rate. The incremental loan interest rate is defined as the interest rate that the Company would have to pay to borrow, for a term similar to the duration of the lease and with similar security, the funds necessary to obtain an asset of similar value to the asset by right of use in a similar economic environment. The interest rate is related to the following items: ① The Company's own situation, including the debt repayment ability and credit status of the Group; ② the term of the "loan", i.e. the lease term; ③ the amount of "borrowed" funds, i.e. the amount of lease liabilities; ④ the "mortgage conditions", i.e. the nature and quality of the underlying assets; ⑤ the economic environment, including the jurisdiction where the lessee is located, the valuation currency, and the contract signing time. The incremental borrowing rate is determined by considering the above factors and adjusting the bank loan interest rate which is as a basis. (2) Subsequent measurement Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 80 When the lease term commences, the Company shall make subsequent measurement for the lease liabilities on the basis of principles below: ① the carrying account of increased lease liabilities when the interests of lease liabilities are recognized; ② the carrying account of decreased lease liabilities when the lease payment is made; ③ the book value of remeasured lease liabilities when the lease payment is changed due to revaluation, lease change or other reasons. The interest expenses of lease liabilities in each period of the lease term are calculated in accordance with the fixed periodic interest rate, and are included in the current profit or loss, unless capitalization is required. The periodic interest rate refers to the discount rate taken by the Company for initial measurement or the revised discount rate taken by the Company when it is necessary to remeasure the lease liabilities as per the revised discount rate due to lease payment change or lease change. (3) Re-measurement After the commencement date of the lease term, the Company remeasures the lease liabilities at the present value of the revised lease payments and adjusts the book value of the right -of-use asset accordingly, if any of the following occurs. If the book value of the right-to-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the Company shall include the remaining amount in the profits and losses of the current period. ① Substantial fixed payment amount changes (in this case, the original discount rate is used for discounting); ② changes in the estimated payable amount of the secured residual value (in this case, the original discount rate is used for discounting); ③ changes in the index or ratio used to determine lease payments (in this case, the revised discount rate is used for discounting); ④ changes in the evaluation results of purchase option (in this case, the revised discount rate is used for discounting); ⑤ changes in the evaluation results or actual exercise of renewal option or option to terminate the lease (in this case, the revised discount rate is used for discounting). 29. Provisions When a obligation related to contingencies such as external guarantee, pending litigation or arbitration, product quality assurance, layoff plans, loss contracts, restructuring obligations, environmental pollution control, commitments, and disposal obligation of fixed assets also meet the following conditions, the Company recogniz es it as a liability: the obligation is currently being undertaken by the Company; there is a high possibility that the fulfillment of the obligation will result in the outflow of economic benefits from the enterprise; and the amount of the obligation can be reliably measured. Provisions are initially measured according to the best estimate of the expenditure required to settle the present obligation, taking into account factors related to contingencies such as risks, uncertainties and the time value of money. Where the time value of money has a significant impact, the best estimate shall be ascertained after discounting the future relevant cash outflow. The book value of provisions is reviewed at the balance sheet date and adjusted to reflect the current best estimate if there is any change. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 81 For possible obligations arising from past transactions or events whose existence depends on whether one or more uncertain future events occur; or for present obligations formed by past transactions or events, where the fulfillment of the obligation is not likely to cause an outflow of economic benefits from the Company, or the amount of the obligation cannot be reliably measured, the Company will disclose these possible or present obligations as contingent liabilities. 30. Share-based payment Share-based payment refers to transactions in which equity instruments are granted or liabilities are incurred based on equity instruments in order to obtain services provided by the employees or other parties. Share -based payments are divided into equity-settled and cash-settled share-based payments. Equity-settled share-based payments made in exchange for the service of employees are measured at the fair value on the date at which the equity instrument is granted to employees. Where the right may only be exercised if the service is completed within the waiting period, or if specified performance conditions are met, the fair value shall be included in relevant costs or expenses using the straight-line method and capital surplus shall be increased accordingly, based on the best estimate of the number of vested equity instruments within the waiting period. Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized on the basis of share options or other equity instruments undertaken by the Company. If excisable immediately after the grant, the fair value of the liabilities assumed shall be included in the relevant costs or expenses on the granting date, and the liabilities shall be increased accordingly. If it is necessary to complete the services in the waiting period or achieve the specified performance conditions before the right is excisable, on each balance sheet date of the waiting period, the services acquired in the current period shall be included in the cost or expense based on the best estimation of the excisable right, and the liabilities shall be adjusted accordingly according to the fair values of the liabilities assumed by the Company. On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fair value of the liabilities will be re-measured, with any changes recorded in the profits and losses at the current period. 31. Revenue Accounting policies used for the recognition and measurement of income Operating revenues of the Company are mainly from sales of goods, rendering labor service and transferring right to use assets. Revenue recognition principle The Company recognizes the revenue upon fulfillment of its performance obligations within the contract, that is, when the client obtains control of the relevant goods or services. Acquisition of control over relevant Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 82 goods or services means the ability to manage the use of such goods or the provision of services and to receive almost all economic benefits therefrom. The Company assesses the contract from the commencement date of the contract and recognizes each individual performance obligation included by the contract, and determines if each individual performance obligation will be fulfilled during a certain period or at a certain time point. The performance obligations are to be fulfilled within a specified period once the Company meets one of the following conditions; otherwise, the Company is to fulfill the performance obligations at a specified time point: 1) The client obtains and consumes the economic benefits while the Company fulfills the performance obligations. 2) The client can control goods or services still under construction while the Company is still in the process of fulfilling the performance obligations. 3) The goods generated while the Company is in the process of performing the contract are indispensable, and the Company has the right to collect partial payments for the cumulative performance obligations that have been fulfilled so far within the contract period. If the performance obligations are performed within the specified period, the Company will recognize the revenue within this period in accordance with the progress of the contract’s performance. If the performance progress cannot be reasonably determined and the costs incurred by the Company are expected to be compensated, the revenue will be ascertained according to the costs incurred, until the performance progress can be reasonably determined. If the performance obligations are performed at the specified time point, the Company will recognize the revenue at the time when the client obtains control over the relevant goods or services. In judging whether the client has obtained control over goods or services, the Company shall consider the following signs: 1) The Company has the current right to collect payment for the goods or services. 2) The Company has transferred the legal ownership of the goods to the client. 3) The Company has transferred physical possession of the goods to the client. 4) The Company has transferred the main risks and rewards of ownership of the goods to the client. 5) The customer has accepted the goods or services, etc. The Company lists the right to receive considerations for transfer of goods or services to the customer as a contract asset, for which the impairment will be withdrawn on the basis of expected credit loss. The right of the Company to unconditionally receive considerations from the customer is listed as receivables. The Company presents the obligation to transfer goods or services to the customer for considerations received or receivable from the customer as a contract liability. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 83 Revenue measurement principle 1) If there are two or more performance obligations in the contract, the Company will apportion the transaction price to each single performance obligation according to the relative proportion of the separate selling price of the goods or services promised by the single performance obligation at the beginning of the contract, a nd the revenue shall be measured according to the transaction price apportioned to each single performance obligation. 2) The transaction price refers to the amount of consideration that the Company expects to collect due to the transfer of goods or services to the client, excluding the amount collected by third parties. The transaction price refers to the amount of consideration that the Company expects to collect for transfer of goods or services to the client, excluding the amount collected by third parties. The expected amount to be returned to the client will be listed as a liability and not be included into the transaction price. 3) If there is significant financing in the contract, the Company shall determine the transaction price according to the amount payable in cash when the client obtains control of the goods or services. The difference between the transaction price and the contract consideration shall be amortized by the effective interest method during the contract period. On the contract start date, if the Company estimates that the time between the client's acquisition of control over goods or services and the payment of the price by the client will not exceed one year, the significant financing in the contract shall not be considered. Specific method for revenue recognition Revenue recognized by time point Selling electric appliances, fittings and materials by the Company is the performance obligation at a time point. Revenue recognition conditions for domestic sales commodity: The Company has delivered the product to the customer according to the contract terms and the customer has received the product; the payment has been collected or the receipt voucher has been provided and relevant economic profits might flow into the Company; main risks and remuneration as for the ownership of the commodity have been transferred; and legal ownership and control right of the commodity have been transferred. Revenue recognition conditions for exported commodity: The Company has declared the product to the customs and the product has been delivered according to the contract terms; the bill of lading has been obtained, the payment has been collected or the receipt voucher has been provided and relevant economic profits might flow into the Company; main risks and remuneration as for the ownership of the commodity have been transferred; and legal ownership and control right of the commodity have been transferred. Revenue recognized by performance progress Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 84 The technical service revenue of the Company and the business contract between the operating lease and the customer are the performance obligations to be performed within a period, for which the revenue shall be recognized according to the performance progress. Differences in accounting policies for revenue recognition due to different operating models for the same type of business 32. Government grants The government grants of the Company include fiscal appropriation. Asset -related government grants refer to government grants obtained by the Company for purchasing and acquiring long-term assets or forming long-term assets by other ways. Income-related government grants refer to those other than asset-related government grants. In case the purpose of a grant is not expressly stipulated in the government document, t he Company will categorize the grant according to these above principles. If it is difficult to categorize the grant, it will be categorized as the income-related government grant. If a government grant is a monetary asset, it will be measured at the amount received; for the grant appropriated according to the fixed quota or for the grant where there is concrete evidence showing that the Company is qualified to receive governmental financial support and will be able to receive the support by the end of the period, the grant will be measured at the receivable; if the government grant is a non-monetary asset, it will be measured at the fair value, or measured at its nominal amount (RMB 1) if the fair value cannot be obtained reliably. If a government grant related to assets is recognized as deferred income, such grant is recognized in the current profit or loss based on equal division within the service life of the relevant asset. If the relevant asset has been sold, transferred, retired or damaged before the end of the service life, the balance of the relevant deferred income that has not been allocated will be transferred into the current profit and loss of asset disposal. Government grants related to income that compensate future costs, expenses or losses are recognized as deferred income, and recognized in profit or loss in reporting the related costs, expenses or losses. The government grants relating to the ordinary activities are included in other income or deducted against relevant costs and expenses according to the nature of the accounting event, otherwise, they are included in non-operating income. Government grants unrelated to daily activities will be included in non-operating income. If the Company obtains the subsidized loan as a result of preferential financial policy, there will be two situations: the Ministry of Finance appropriates the interest subsidy to the lending bank, or the Ministry of Finance directly appropriates the subsidy to the Company, and the accounting treatment for each of th ese situations is as follows: Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank provides the Company with the loan at a discounted interest rate, the Company will use the Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 85 actual amount of loan received as the book value of the loan, and calculate the relevant borrowing costs based on the principal of the loan and the interest rate. Where the Ministry of Finance directly appropriate the interest subsidy to the Company, the Company will deduct the corresponding interest subsidy against the borrowing costs. Where the governmental grants recognized by the Company need to be returned, the accounting treatment will be done as follows in the period they are returned: 1) Where the book value of relevant assets is deducted at the time of the initial recognition, the book value of assets will be adjusted. 2) Where there is any deferred income concerned, the book balance of the deferred income will be deducted, but the excessive part will be included in the current profit or loss . 3) For other circumstances, the government grants will be directly included in the current profit or loss. 33. Deferred income tax assets/deferred income tax liabilities Deferred income tax assets and deferred income tax liabilities of the Company are calculated and recognized based on the differences (temporary differences) between the tax base and the book value of the assets or liabilities. For the deductible loss and tax credits that can be deducted annually in the subsequent years according to tax laws, the corresponding deferred income tax assets are recognized. Where the temporary differences arise from the initial recognition of goodwill, the corresponding deferred income tax liabilities are not recognized. No deferred income tax asset or deferred income tax liability is recognized where the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination affect neither accounting profit nor taxable profit (or deductible loss). On the balance sheet date, the deferred income tax asset and liability are measured at the applicable tax rates during the period when the asset is realized or the liability is settled as expected. The Company recognizes the deferred income tax asset to the extent that it is probable that the taxable income will be available against which the deductible temporary differences, deductible losses and tax credits can be deducted. 34. Lease (1) Accounting method for operating lease (1) Identification of lease Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain period to obtain consideration contracts. On the commencement date of the contract, the Company assesses whether the contract serves as the lease or includes the lease. If one party to the contract transfers the right to control one or more identified assets during a certain period in exchange for consideration, such contract is or includes lease. To Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 86 determine whether the contract has transferred the right to control the use of the identified assets in a certain period of time, the Company assesses whether the customer in the contract is entitled to receive almost all the economic benefits arising from the use of the identified assets during the use period and i s entitled to manage the use of the identified assets during the use period. If a number of separate leases are contained in one contract, the Company will split the contract and adopt accounting methods to each lease on an individual basis. If a contract includes both lease and non-lease components, the Company will separate the lease from the non-lease component before accounting treatment. (2) The Company serves as the lessee 1） Lease confirmation At the commencement of the lease term, the right-of-use assets and lease liabilities shall be recognized for the lease by the Company. Refer to note on right-of-use assets and lease liabilities for details on the recognition and measurement of right-of-use assets and lease liabilities. 2) Lease change Lease change refers to the change in lease scope, lease consideration and lease term beyond the terms of the original contract, including increasing or terminating the right to use one or more leased assets, extending or shortening the lease term stipulated in the contract, etc. The effective date of lease change refers to the date when the Parties reach the agreement on lease change. When a change happens to the lease and meets the following conditions, the Company will treat it as a separate lease: ① the change expands the lease scope or extends lease term by increasing the right to use one or more leased assets; ② the increased consideration is equivalent to the single price for the expanded portion of lease scope or the extended portion of lease term adjusted according to contract circumstances. In case where accounting treatment is not made for lease change as a single lease, on the effective date of lease change, the Company will appropriate the consideration of the changed contract according to the relevant provisions of the lease criteria and redefine the updated lease term. In addition, the Company will discount the changed lease payment according to the revised discount rate, so as to remeasure the lease liabilities. In calculating the present value of the lease payment after the change, the Company uses the interest rate implicit in lease for the remaining lease term as the discount rate. if the interest rate implicit in lease for the remaining lease term cannot be determined, the incremental borrowing interest rate of the lessee on the effective date of lease change shall be used as the discount rate by the Company. With regard to the impact of the above adjustment of lease liabilities, the Company adopts accounting methods in the following situations: ① In the event that the lease scope is narrowed down or the lease term is shortened as a result of the lease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gains or losses from the partial or complete termination of the lease shall be included into the current loss and profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjust the book value of the right-of-use assets accordingly. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 87 3) Short-term leases and leases of low-value assets For short-term leases with a lease term of no more than 12 months and low-value asset leases at a low value when individual leased assets are brand new, the Company chooses not to recognize the right -of-use assets and lease liabilities. Lease payments under short-term leases and leases of low-value assets are recognized by the Company on a straight-line basis or other systematic and reasonable basis over the lease term, and included into the cost of the related assets or current profits or losses. (3) The Company serves as the lessor On the basis of the contract is evaluated as a lease or including a lease in (1), the Company, as the lessor, divides the lease into financial lease and operating lease at the commencement of the lease. A lease that transfers in substance almost all the risks and rewards incident to ownership of a leased asset is classified as a financial lease by the lessor. A lease other than the financial lease is an operating lease. The Company usually classifies a lease as a financial lease if one or more of the following situations exist: ① the ownership of the leased asset is transferred to the lessee at the expiration of the lease term; ② the lessee has the right to choose to purchase the leased asset; the established purchase price is expected to be much lower than the fair value of the leased asset when the right of choice is exercised, and hence it can be reasonably determined that the lessee will exercise this right of choice on the inception of lease; ③ the lease term accounts for a substantial proportion (no less than 75%) of the service life of the leased asset, notwithstanding that the ownership of the asset will not be transferred; and ④ on the inception of lease, the present value of the lease receipts is almost equal to the fair value of the leased asset (no less than 90% of the fair value of the leased asset.). and ⑤ the leased assets are of a specialized nature that only the lessee can use them without making major modifications. The Company may also classify a lease as a financial lease if one or more of the following signs exist: ① if the lessee cancels the lease, the resulting loss to the lessor shall be borne by the lessee; ② the gain or loss arising from the fluctuation in the fair value of the residual value of the asset shall be attributable to the lessee; and ③ the lessee is able to continue the lease to the next period at a rent much lower than the market level. 1) Accounting treatment of financial lease Initial measurement On the commencement date of lease term, the Company recognizes financial lease receivables for financial lease and derecognizes financial lease assets. Upon initial measurement of financial lease accounts receivable, the Company takes net investment in lease as entry value of financial lease accounts receivable. Net investment in lease is the sum of unsecured residual value and the present value of outstanding lease receipts discounted on interest rate implicit in lease on the commencement date of the lease term. Lease receipts refer to the amount that the lessor shall collect from the lessee for transferring the right to use the leased assets during the lease term, including: ① the amount of fixed payment and substantial fixed payment to be paid by the lessee, net of relevant amount of lease incentives if any; ② variable lease payments that are based on an index or Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 88 rate, which shall be determined at the time of initial measurement based on the index or rate on the commencement date of the lease term; ③ exercise price of call option, given that the lessee will reasonably exercise such option; ④ amount payable by the lessee for exercising the option to terminate the lease, if it is indicated during the lease term that the lessee will exercise the option to terminate the lease; ⑤ the residual value of the guarantee provided to the lessor by the lessee, a party related to the lessee and an independent third party with the financial ability to meet the guarantee obligation. Subsequent measurement The Company calculates and recognizes the interest income in each period of the lease term according to the fixed periodic rate. Such periodic rate refers to the implicit discount rate used to determine the net investment in the lease (in case of sublease, the discount rate of the original lease is adopted if the i nterest rate implicit in lease of the sublease cannot be determined (adjustments are made based on the initial direct costs associated with sublease)), or the revised discount rate determined according to the relevant provisions when the change of the financial lease has not been treated as a separate lease for accounting, and it is satisfied that the lease will be classified as the financial lease if the change takes effect at the beginning of the lease. Accounting treatment of lease change When a change happens to the financial lease and meets the following conditions, the Company will treat it as a separate lease: ① the change expands the lease scope by increasing the right to use one or more leased assets; ② the increased consideration is equivalent to the single price for the expanded portion of lease scope adjusted according to contract circumstances. If such a change to the financial lease is not accounted for as a separate lease and the condition is satisfied that if the change becomes effective on the commencement date of the lease, the lease is classified as an operating lease, the Company will account for it as a new lease from the effective date of the lease change and regard the net lease investment prior to the effective date of the lease change as the book value of the leased asset. 2) Accounting treatment of operating leases Treatment of rent The Company adopts the straight-line method or other systematic and reasonable methods to recognize the lease receipts from operating leases as rental income during all periods within the lease term. Incentive measures provided If a rent-free period is provided, total rent shall be amortized by adopting the straight -line method or other systematic and reasonable methods within the lease term not excluding the rent-free period, and the rental income shall be recognized in the rent-free period. Certain costs incurred by the lessee, if undertaken by the Company, shall be excluded from total rental income and the balance of rental income after deducti ng these costs shall be amortized within the lease term. Initial direct costs Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 89 The initial direct costs incurred by the Company related to the operating lease shall be capitalized to the cost of leased underlying asset and shall be included into current profits and losses on the same basis as recognition of rental income during the lease term. Depreciation For fixed assets included in assets under operating leases, accrual depreciation shall base on the depreciation policy adopted by the Company for similar assets. Other assets under operating leases shall be amortized in a systematic and reasonable manner. Variable lease payments Variable lease payments acquired by the Company in connection with operating leases that are not included in the lease receipts are included into the current profits and losses when actually incurred. Change of operating lease In case of changes in the operating lease, the Company will treat it as a new lease as of the effective date of the change, and the lease advance or accounts receivable related to the lease before the change will be regarded as the amount received from the new lease. 35. Significant accounting policy and accounting estimate changes (1) Significant accounting policy changes Applicable □Not applicable Contents and reasons for accounting policies changes Approval procedure Remarks On December 13,2022, the Ministry of Finance issued the Interpretation No.16 of the Accounting Standards for Business Enterprises (CK [2022] No.31). The Company has implemented the Interpretation No.16 of the ASBE since January 1,2023. The 2nd meeting of the 6th Board of Directors On December 13,2022, the Ministry of Finance issued the Interpretation No.16 of the Accounting Standards for Business Enterprises (CK [2022] No.31), wherein the accounting treatment for deferred income tax related to assets and liabilities arising from single transaction not eligible for initial recognition exemption is effective from January 1,2023, without requiring retrospective adjustments. For single transaction subject to this regulation that occurred between the beginning of the earliest reporting period for which this regulation is first applied and the implementation date, as well as temporary differences and deductible temporary differences arising from the recognition of right-of-use assets and lease liabilities at the beginning of the earliest reporting period due to the application of this regulation, adjustments shall be made in Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 90 accordance with this regulation. The implementation of this regulation has not had a significant impact on the financial condition and operating results of the Company. (2) Significant accounting estimate changes □Applicable Not applicable (3) Relevant financial statement items at the beginning of 2023 when the adjustments stipulated in the new accounting standards apply for the first time □Applicable Not applicable VI. Taxation 1. Main tax categories and tax rates Category Tax base Tax rate VATIncome from sales of goods 13% VAT Income from provision of technical services 6% VATRental income 5%,9% City maintenance and construction tax Turnover tax payable 7% Education surcharge Turnover tax payable 3% Local education surcharge Turnover tax payable 2% House tax 70% of the original value of the house 1.2% House tax Rental income 12% Land use tax Total land area RMB 5-10/m2 Corporate income tax Taxable income 8.25%,15%,16.5%,20%,25% Disclosure of taxpayers with different corporate income tax rates Name of taxpayer Income tax rate Hangzhou Robam Appliances Co., Ltd.15% Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 15% Zhejiang Cookingfuture Technology Co., Ltd.25% Beijing Robam Appliances Sales Co., Ltd.25% Shanghai Robam Appliances Sales Co., Ltd.25% Hangzhou MingQi Electric Co., Ltd.25% De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. 25% Hangzhou Robam Fuchuang Investment Management Co., Ltd. 20% Hangzhou Jinhe Electric Appliances Co., Ltd.25% Robam Appliances Holding (HK) Co., Ltd. (Note 1) The tax rate for profits less than 2 million Hong Kong Dollars under the second-tier tax system is 8.25%, and for the excess portion equal to or greater than 2 million Hong Kong Dollars, it is 16.5%. Robam International (HK) Trading Co., Ltd. (Note 1) The tax rate for profits less than 2 million Hong Kong Dollars under the second-tier tax system is 8.25%, and for the excess portion equal to or greater than 2 million Hong Kong Dollars, it is 16.5%. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 91 2. Preferential tax policy The Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR202033007142) jointly issued by Department of Science and Technology of Zhejiang Province, Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, State Taxation Administration, and Local Taxation Bureau of Zhejiang Province on December 1,2020. The certificate is valid for 3 years. According to the relevant provisions, after being identified as a high-tech enterprise, the Company will enjoy the relevant preferential policies of the state on high-tech enterprises for three consecutive years (i.e., the Company is entitled to the preferential income tax policy from January 1,2020 to December 31, 2022), and the corporate income tax shall be levied at the rate of 15%. According to the Announcement of the State Taxation Administration on the Implementation of Preferential Income Tax Policy for Hi-tech Enterprises (Announcement 2017 No.24 of the State Taxation Administration), an enterprise shall prepay the income tax temporarily at the rate of 15% before passing the re-certification in the year when the enterprise's Certificate of High-Tech Enterprise expires, and if it still fails to obtain the qualification as a high-tech enterprise before the end of the year, it shall make up for the taxes of the corresponding period in accordance with the regulations The Company has reapplied for the qualification of high-tech enterprise. Before the recognition is approved, the corporate income tax will be temporarily prepaid at a tax rate of 15% in 2023 The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. (hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise (Certificate No.: GR202233010421) jointly issued by Department of Science and Technology of Zhejiang Province, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State Taxation Administration on December 24,2022. After the recognition, it will enjoy the preferential tax policy of the state on high-tech enterprises for three consecutive years (i.e., it is entitled to the preferential income tax policy from January 1,2022 to December 31,2024), and its corporate income tax shall be levied at the tax rate of 15%. According to the Announcement [2023] No.6 of the State Taxation Administration), Hangzhou Robam Fuchuang Investment Management Co., Ltd., a subsidiary of the Company, will include 25% of the portion of annual taxable income not exceeding RMB 1 million of small and micro-profit enterprises into the taxable income, and pay corporate income tax at a rate of 20%. Preferential VAT policy According to the Notice on Value-Added Tax Policies for Software Products Issued by the Ministry of Finance and the State Taxation Administration (CS [2011] No.100), the Company's sales of embedded software products are eligible for immediate VAT refund after collection. Preferential land use tax policy Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 92 According to Article 7 of the Decision of the State Council on Amending the Interim Regulations of the People's Republic of China on Urban Land Use Tax (State Council Order No.483 of the People's Republic of China), the Company enjoys preferential policies of exemption from land use tax. VII. Notes to items in the consolidated financial statements 1. Cash and cash equivalents In RMB Item Ending balance Beginning balance Cash in hand 182,584.1385,806.05 Deposit in bank 5,776,710,554.595,194,887,841.18 Other cash and cash equivalents 101,898,241.3497,789,023.71 Total 5,878,791,380.065,292,762,670.94 Other description Note: The other cash and cash equivalents are RMB 101,898,241.34, including the L/G margin of RMB 84,024,115.13, the bill acceptance margin of RMB 16,884,355.85 and the ETC margin of RMB 13,000.00, the use of which are limited; and the Alipay and WeChat wallet balance is RMB 976,770.36, which can be withdrawn without any limit at any time. Use of restricted cash and cash equivalents Item Ending balance Beginning balance Letter of guarantee and margin for acceptance of bill 100,908,470.9896,335,329.20 ETC margin 13,000.0013,000.00 Total 100,921,470.9896,348,329.20 2. Financial assets held for trading In RMB Item Ending balance Beginning balance Financial assets measured at fair value with changes included into current profit or loss 2,315,606,606.832,511,844,508.00 Including: financial products 2,315,606,606.832,511,844,508.00 Total 2,315,606,606.832,511,844,508.00 3. Notes receivable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 93 (1) Classified presentation of notes receivable In RMB Item Ending balance Beginning balance Banker’s acceptance 578,318,951.21609,791,571.72 Trade acceptance 119,521,959.74271,981,769.99 Total 697,840,910.95881,773,341.71 In RMB Type Ending balance Beginning balance Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value Amount Percentage (%) Amount Percentage of provision Amount Percentage (%) Amount Percentage of provision Notes receivable with an individual bad debt provision 12,553,2 05.80 1.39% 6,659,94 3.22 53.05% 5,893,26 2.58 Including: Bad debt provisions by individual item 12,553,2 05.80 1.39% 6,659,94 3.22 53.05% 5,893,26 2.58 Notes receivable with a collective bad debt 704,131,540.67 100.00% 6,290,62 9.72 0.89% 697,840,910.95 889,884,737.69 98.61% 14,004,6 58.56 1.57% 875,880,079.13 Including: Including: Banker’s acceptance 578,318,951.21 82.13% 578,318,951.21 609,791,571.72 67.57% 609,791,571.72 Trade acceptance 125,812,589.46 17.87% 6,290,62 9.72 5.00% 119,521,959.74 280,093,165.97 31.04% 14,004,6 58.56 5.00% 266,088,507.41 Total 704,131,540.67 100.00% 6,290,62 9.72 0.89% 697,840,910.95 902,437,943.49 100.00% 20,664,6 01.78 2.29% 881,773,341.71 Collective bad debt provision: In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision Banker’s acceptances combined 578,318,951.210.000.00% Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 94 Trade acceptances combined 125,812,589.466,290,629.725.00% Total 704,131,540.676,290,629.72 (2) Bad debt provision, and its recovery or reversal in the current period Bad debt provision in the current period: In RMB Type Beginning balance Amount of change in the current period Ending balance Provision Recovery or reversal Write-off Others Trade acceptance 20,664,601.78 -14,373,972.06 6,290,629.72 Total 20,664,601.78 -14,373,972.06 6,290,629.72 Significant recoveries or reversals of provisions for bad debts during the reporting period: □Applicable Not applicable (3) Notes transferred to accounts receivable by the Company due to drawer’s non -performance at the end of the period In RMB Item Amount of accounts receivable transferred at the end of the period Trade acceptance 388,054,304.18 Total 388,054,304.18 5. Accounts receivable (1) Classified disclosure of accounts receivable In RMB Type Ending balance Beginning balance Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value Amount Percentage (%) Amount Percentage of provision Amount Percentage (%) Amount Percentage of provision Accounts receivable with individual bad debt provisions 1,579,34 0,304.84 54.96% 1,007,91 9,074.13 63.82% 571,421,230.71 1,639,67 9,315.79 58.71% 1,030,78 0,696.17 62.86% 608,898,619.62 Including: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 95 Bad debt provisions by individual item 1,579,34 0,304.84 54.96% 1,007,91 9,074.13 63.82% 571,421,230.71 1,639,67 9,315.79 58.71% 1,030,78 0,696.17 62.86% 608,898,619.62 Accounts receivable with a collective bad debt provision 1,294,46 7,156.01 45.04% 84,234,6 27.38 6.51% 1,210,23 2,528.63 1,153,26 9,565.99 41.29% 72,561,3 56.67 6.29% 1,080,70 8,209.32 Including: Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision 1,294,46 7,156.01 45.04% 84,234,6 27.38 6.51% 1,210,23 2,528.63 1,153,26 9,565.99 41.29% 72,561,3 56.67 6.29% 1,080,70 8,209.32 Total 2,873,80 7,460.85 100.00% 1,092,15 3,701.51 38.00% 1,781,65 3,759.34 2,792,94 8,881.78 100.00% 1,103,34 2,052.84 39.50% 1,689,60 6,828.94 Bad debt provisions by individual item: In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision Reasons for provision Unit 1657,106,467.98657,106,467.98100.00% Debt default Unit 2541,917,836.68162,577,431.4630.00% Overdue debt Unit 3116,422,160.3847,034,405.3640.40% Overdue debt Unit 478,095,830.7754,667,081.5370.00% Debt default Unit 531,086,961.456,217,392.2920.00% Overdue debt Unit 628,139,039.0219,225,685.8168.32% Overdue debt Unit 724,428,569.146,195,424.4725.36% Overdue debt Unit 822,763,973.1315,934,781.1970.00% Debt default Unit 914,080,420.748,587,655.5260.99% Overdue debt Unit 1013,773,333.343,646,561.0326.48% Overdue debt Unit 1113,671,133.596,306,115.0446.13% Overdue debt Unit 128,644,489.506,051,142.6570.00% Debt default Unit 138,009,318.822,345,903.1129.29% Overdue debt Unit 144,204,830.932,943,381.6570.00% Debt default Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 96 Unit 153,660,575.031,415,427.5238.67% Overdue debt Unit 1613,335,364.347,664,217.5257.47% Expected to be exposed to recovery risk Total 1,579,340,304.841,007,919,074.13 Collective bad debt provision: In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision With 1 year 1,104,644,435.4055,232,221.795.00% 1-2 years 142,429,477.1114,242,947.7110.00% 2-3 years 36,173,783.467,234,756.6920.00% 3-4 years 6,221,442.983,110,721.4950.00% 4-5 years 2,920,186.802,336,149.4480.00% More than 5 years 2,077,830.262,077,830.26100.00% Total 1,294,467,156.0184,234,627.38 Description on basis for determining combination：If the bad debt provisions for accounts receivable is recognized in accordance with the expected general credit loss model, please disclose the relevant information of the bad debt provisions in the same manner as the disclosure of other accounts receivable. □Applicable Not applicable Disclosed based on the aging In RMB Aging Ending balance Within 1 year (including 1 year) 1,379,014,659.28 Within 1 year (including 1 year) 1,379,014,659.28 1-2 years 1,100,579,786.95 2-3 years 352,124,136.31 More than 3 years 42,088,878.31 3-4 years 7,614,738.77 4-5 years 26,807,322.13 More than 5 years 7,666,817.41 Total 2,873,807,460.85 (2) Bad debt provision, and its recovery or reversal in the current period Bad debt provision in the current period: In RMB Type Beginning balance Amount of change in the current period Ending balance Provision Recovery or reversal Write-off Others Bad debt reserves for accounts receivable 1,103,342,052.8427,424,660.7638,556,641.1456,370.95 1,092,153,701.51 Total 1,103,342,052.8427,424,660.7638,556,641.1456,370.95 1,092,153,701.51 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 97 (3) Accounts receivable actually written off in the current period In RMB Item Amounts written off Accounts receivable actually written off 56,370.95 (4) Top five debtors with the largest ending balances of accounts receivable In RMB Unit Ending balance of accounts receivable Proportion in the total ending balance of accounts receivable Ending balance of bad debt reserves Unit 1541,936,354.7218.86% 160,861,018.17 Unit 2452,376,997.9815.74% 452,376,997.98 Unit 3215,712,302.127.51% 10,805,775.09 Unit 495,125,955.203.31% 95,125,955.20 Unit 583,171,694.862.89% 4,158,584.74 Total 1,388,323,304.8848.31% (5) Accounts receivable whose recognition is terminated due to transferal of financial assets Amount of assets and liabilities arising from the transfer of accounts receivable and continued involvement Asset item Ending balance Liability item Ending balance Accounts receivable with recourse factoring 6,715,891.92 Short-term borrowings 6,715,891.92 6. Advance payments (1) Advance payments presented by age In RMB Aging Ending balance Beginning balance Amount Percentage (%) Amount Percentage (%) With 1 year 183,566,440.8299.32% 176,828,710.5999.62% 1-2 years 1,134,681.120.61% 331,685.800.19% 2-3 years 81,569.770.04% 309,887.500.17% More than 3 years 54,528.030.03% 30,069.480.02% Total 184,837,219.74 177,500,353.37 Explanation on the reasons for no timely settlement of advance payments with an account age of over 1 year and significant amount: (2) Top five payers with the largest ending balances of advance payments The ending balances of advance payments of the top five payers by the end of the current period totaled RMB 65,777,907.89, accounting for 35.59% of the total. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 98 Other description: 7. Other accounts receivable In RMB Item Ending balance Beginning balance Other receivables 104,345,008.3580,429,057.84 Total 104,345,008.3580,429,057.84 Other accounts receivable 1) Classification of other accounts receivable by nature In RMB Nature of receivable Book balance at the end of the period Initial book balance at the beginning of the period Security/guarantee deposits 41,749,526.3238,184,552.92 Collections by a third party 66,011,015.0450,695,825.81 Cash reserve 7,456,903.932,601,040.33 Withholdings 6,654,501.044,898,268.76 Others 1,158,091.06519,033.02 Total 123,030,037.3996,898,720.84 2) Bad debt provision In RMB Bad debt reserve Phase IPhase IIPhase III Total Expected credit loss over the next 12 months Expected credit loss over the entire duration (without credit impairment) Expected credit loss over the entire duration (with credit impairment) Balance as of January 1,2023 16,469,663.00 16,469,663.00 Balance on January 1, 2023 in the current period Provision in the current period 2,215,366.04 2,215,366.04 Balance as of June 30, 2023 18,685,029.04 18,685,029.04 Changes in the book balance with significant change in amount of the loss provision in the current period □Applicable Not applicable Disclosed based on the aging In RMB Aging Ending balance Within 1 year (including 1 year) 94,698,406.83 Within 1 year (including 1 year) 94,698,406.83 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 99 1-2 years 8,273,716.75 2-3 years 6,735,204.93 More than 3 years 13,322,708.88 3-4 years 2,402,760.48 4-5 years 1,714,913.00 More than 5 years 9,205,035.40 Total 123,030,037.39 3) Bad debt provision, and its recovery or reversal in the current period Bad debt provision in the current period: In RMB Type Beginning balance Amount of change in the current period Ending balance Provision Recovery or reversal Write-off Others Bad debt provision for other receivables 16,469,663.002,215,366.04 18,685,029.04 Total 16,469,663.002,215,366.04 18,685,029.04 4) Top five debtors with the largest ending balances of other accounts receivable In RMB Unit Nature of receivable Ending balance Aging Proportion in the total ending balance of other accounts receivable Ending balance of bad debt reserves Unit 1 Collections by a third party and unit deposits 42,366,468.93 0-5 years and above 34.44% 2,247,773.50 Unit 2 Collections by a third party and unit deposits 6,168,313.580-5 years 5.01% 363,415.70 Unit 3 Collections by a third party and unit deposits 5,858,119.760-3 years 4.76% 372,256.20 Unit 4 Collections by a third party and unit deposits 5,797,765.08 0-5 years and above 4.71% 339,888.30 Unit 5 Unit deposits 5,500,000.00 With 1 year 4.47% 275,000.00 Total 65,690,667.35 53.39% 3,598,333.70 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 100 8. Inventories (1) Classification of inventories In RMB Item Ending balance Beginning balance Book balance Provision for obsolete inventory or for impairment of the cost of contract performance Book value Book balance Provision for obsolete inventory or for impairment of the cost of contract performance Book value Delivered goods 894,301,401.8731,897,303.28862,404,098.59946,934,786.6834,166,612.43912,768,174.25 Merchandise inventory 448,216,935.2235,057,065.80413,159,869.42433,960,199.8738,422,564.56395,537,635.31 Raw materials 89,091,388.40 89,091,388.40124,228,344.80 124,228,344.80 Low-cost consumables and packing materials 25,474,820.36 25,474,820.3622,715,660.50 22,715,660.50 Products in process 108,746,110.84 108,746,110.84110,725,274.36 110,725,274.36 Contract performance costs 33,756,452.26 33,756,452.2644,135,708.88 44,135,708.88 Total 1,599,587,108.9 5 66,954,369.08 1,532,632,739.8 7 1,682,699,975.0 9 72,589,176.99 1,610,110,798.1 0 (2) Provision for obsolete inventory or for impairment of the cost of contract performance In RMB Item Beginning balance Increased amount in the current period Decreased amount in the current period Ending balance Provision Others Reversals or write-off Others Delivered goods 34,166,612.43 -2,269,309.15 31,897,303.28 Merchandise inventory 38,422,564.56 -3,365,498.76 35,057,065.80 Total 72,589,176.99 -5,634,807.91 66,954,369.08 10. Long-term equity investment In RMB Investee Beginning balance（book value) Increase/decrease in the current period Ending balance（book value) Ending balance of impairment provisioAdditional investment Negative investment Investment profit or loss recognizAdjustment of other comprehensive Other changes in equity Cash dividends or profits declared Impairment provision Others Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 101 ed using the equity method incomes and distributed n I. Joint venture De Dietrich Trade (Shanghai) Co., Ltd. 3,824,4 60.03 - 551,583.95 3,272,8 76.08 Subtotal 3,824,4 60.03 - 551,583.95 3,272,8 76.08 II. Associated enterprises Zhejiang Tingshuo Brand Operation Management Co., Ltd. 1,065,9 93.31 - 468,139.70 597,853.61 Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. 3,828,0 52.28 - 243,460.40 3,584,5 91.88 Subtotal 4,894,0 45.59 - 711,600.10 4,182,4 45.49 Total 8,718,5 05.62 - 1,263,1 84.05 7,455,3 21.57 11. Other equity instrument investments In RMB Item Ending balance Beginning balance Shanghai MXCHIPInformation Technology Co., Ltd. 2,116,023.222,116,023.22 Total 2,116,023.222,116,023.22 Disclosure of non-tradable equity instrument investment by item in the current period In RMB Name of item Recognized dividends Accumulated gains Accumulated losses Amount transferred Reason for being Reason for the transfer Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 102 income from other comprehensive incomes to retained earnings designated to be measured by fair value and the change being recorded in other comprehensive income of other comprehensive incomes to retained earnings Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) 100,000,000.00 Held not for the purpose of trading Shanghai MXCHIP Information Technology Co., Ltd. 17,832,510.7 8 Held not for the purpose of trading 12. Investment real estate (1) Investment real estate under the cost measurement mode Applicable □Not applicable In RMB Item Buildings Land use right Total I. Original book value 1. Beginning balance 61,641,757.011,062,744.0062,704,501.01 2. Increased amount in the current period 41,366,660.67 41,366,660.67 (1) Outsourcing 3,808,528.00 3,808,528.00 (2) Transfer from inventories/fixed assets/construction in progress 37,558,132.67 37,558,132.67 (3) Increased amount in business combination 3. Decreased amount in the current period (1) Disposal (2) Other transfer-out 4. Ending balance 103,008,417.681,062,744.00104,071,161.68 II. Accumulated depreciation and amortization Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 103 1. Beginning balance 6,480,766.87336,535.606,817,302.47 2. Increased amount in the current period 2,439,617.5910,627.442,450,245.03 (1) Accrual or amortization 2,439,617.5910,627.442,450,245.03 3. Decreased amount in the current period (1) Disposal (2) Other transfer-out 4. Ending balance 8,920,384.46347,163.049,267,547.50 III. Impairment provision 1. Beginning balance 2. Increased amount in the current period (1) Provision 3. Decreased amount in the current period (1) Disposal (2) Other transfer-out 4. Ending balance IV. Book value 1. Ending book value 94,088,033.22715,580.9694,803,614.18 2. Beginning book value 55,160,990.14726,208.4055,887,198.54 13. Fixed assets In RMB Item Ending balance Beginning balance Fixed assets 1,585,809,148.561,622,235,227.74 Disposal of fixed assets 14,868.65 Total 1,585,824,017.211,622,235,227.74 (1) Fixed assets In RMB Item Houses and buildings Machine and equipment Transportation equipment Other equipment Total I. Original book value: 1. Beginning balance 1,523,220,278.27772,545,629.6222,374,395.72100,291,571.582,418,431,875.19 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 104 2. Increased amount in the current period 20,459,727.2947,079,335.37411,327.439,696,218.3377,646,608.42 (1) Purchase 977,189.882,828,491.16411,327.43578,489.304,795,497.77 (2) Transfer from construction in progress 19,482,537.4144,250,844.21 9,117,729.0372,851,110.65 3. Decreased amount in the current period 37,558,132.672,971,354.221,168,153.67420,470.4642,118,111.02 (1) Disposal or retirement 2,971,354.221,168,153.67420,470.464,559,978.35 (2) Other decreases 37,558,132.67 37,558,132.67 4. Ending balance 1,506,121,872.89816,653,610.7721,617,569.48109,567,319.452,453,960,372.59 II. Accumulated depreciation 1. Beginning balance 321,138,425.43395,184,441.8414,716,378.2865,157,401.90796,196,647.45 2. Increased amount in the current period 35,424,531.7130,617,780.33921,753.566,860,725.8473,824,791.44 (1) Provision 35,424,531.7130,617,780.33921,753.566,860,725.8473,824,791.44 3. Decreased amount in the current period 398,543.79897,570.06574,101.011,870,214.86 (1) Disposal or retirement 398,543.79897,570.06574,101.011,870,214.86 4. Ending balance 356,562,957.14425,403,678.3814,740,561.7871,444,026.73868,151,224.03 III. Impairment provision 1. Beginning balance 2. Increased amount in the current period 3. Decreased amount in the current period 4. Ending balance Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 105 IV. Book value 1. Ending book value 1,149,558,915.75391,249,932.396,877,007.7038,123,292.721,585,809,148.56 2. Beginning book value 1,202,081,852.84377,361,187.787,658,017.4435,134,169.681,622,235,227.74 (2) Fixed asset without certificate of title In RMB Item Book value Reasons for failure to obtain the property right certificate Houses and buildings 695,125,331.52 The formalities for newly built houses are being processed (3) Disposal of fixed assets In RMB Item Ending balance Beginning balance Disposal of fixed assets 14,868.650,00 Total 14,868.65 14. Construction in progress In RMB Item Ending balance Beginning balance Construction in process 463,232,352.92406,258,146.69 Total 463,232,352.92406,258,146.69 (1) Construction in progress In RMB Item Ending balance Beginning balance Book balance Impairment provision Book value Book balance Impairment provision Book value Construction of Maoshan Intelligent Manufacturing Base infrastructure 199,024,556.32 199,024,556.32192,769,369.56 192,769,369.56 Robam Mansion project 254,045,734.41 254,045,734.41192,286,508.04 192,286,508.04 Project of the First Production Department 663,716.80 663,716.805,941,592.92 5,941,592.92 Customized management software 4,922,885.32 4,922,885.325,505,845.75 5,505,845.75 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 106 Project of the Third Production Department 747,113.74 747,113.743,855,078.16 3,855,078.16 Project of the Second Production Department 1,387,610.64 1,387,610.641,387,610.64 1,387,610.64 Other smaller projects 2,440,735.69 2,440,735.694,512,141.62 4,512,141.62 Total 463,232,352.92 463,232,352.92406,258,146.69 406,258,146.69 (2) Current changes in major projects under construction In RMB Name of item Budget Beginning balance Increased amount in the current period Amount transferred into fixed assets in the current period Other decreases in the current period Ending balance Proportion of accumulative construction investment in the budget Project progress Accumulated amount of capitalized interest Including: capitalized interests in the current period Interest capitalization rate in the current period Funding source Construction of Maoshan Intelligent Manufacturing Base infrastructure 954,23 8,416.50 192,76 9,369.56 50,254,074.8 6 43,998,888.1 0 199,02 4,556.32 86.27 % 86.27 Others Robam Mansion project 724,75 0,000.00 192,28 6,508.04 61,759,226.3 7 254,04 5,734.41 35.05 % 35.05 Others Total 1,678,988,41 6.50 385,05 5,877.60 112,01 3,301.23 43,998,888.1 0 453,07 0,290.73 14. Right-of-use assets In RMB Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 107 Item Houses and buildings Total I. Original book value 1. Beginning balance 33,078,049.0233,078,049.02 2. Increased amount in the current period 3. Decreased amount in the current period 3,146,563.113,146,563.11 (1) Disposal 3,146,563.113,146,563.11 4. Ending balance 29,931,485.9129,931,485.91 II. Accumulated depreciation 1. Beginning balance 10,857,904.8910,857,904.89 2. Increased amount in the current period 2,662,033.502,662,033.50 (1) Provision 2,662,033.502,662,033.50 3. Decreased amount in the current period 129,089.76129,089.76 (1) Disposal 129,089.76129,089.76 4. Ending balance 13,390,848.6313,390,848.63 III. Impairment provision 1. Beginning balance 2. Increased amount in the current period (1) Provision 3. Decreased amount in the current period (1) Disposal 4. Ending balance IV. Book value 1. Ending book value 16,540,637.2816,540,637.28 2. Beginning book value 22,220,144.1322,220,144.13 Other description: 15. Intangible assets (1) Intangible assets In RMB Item Land use right 3. Patent right Software Trademark Total I. Original book value 1. Beginning balance 224,593,935.957,300,000.0066,054,963.4224,624,622.64322,573,522.01 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 108 2. Increased amount in the current period 2,043,855.39 2,043,855.39 (1) Purchase 766,037.73 766,037.73 (2) Internal research and development (3) Increased amount in business combination (4) Transfer from construction in progress 1,277,817.66 1,277,817.66 3. Decreased amount in the current period (1) Disposal 4. Ending balance 224,593,935.957,300,000.0068,098,818.8124,624,622.64324,617,377.40 II. Accumulated amortization 1. Beginning balance 34,355,786.065,053,846.1550,741,829.1411,065,502.28101,216,963.63 2. Increased amount in the current period 2,248,848.08561,538.462,729,064.831,231,231.126,770,682.49 (1) Provision 2,248,848.08561,538.462,729,064.831,231,231.126,770,682.49 3. Decreased amount in the current period (1) Disposal 4. Ending balance 36,604,634.145,615,384.6153,470,893.9712,296,733.40107,987,646.12 III. Impairment provision 1. Beginning balance 2. Increased amount in the current period 3. Decreased amount in the current period Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 109 4. Ending balance IV. Book value 1. Ending book value 187,989,301.811,684,615.3914,627,924.8412,327,889.24216,629,731.28 2. Beginning book value 190,238,149.892,246,153.8515,313,134.2813,559,120.36221,356,558.38 16. Goodwill (1) Original book value of goodwill In RMB Name of investee or item that generates goodwill Beginning balance Increase in the current period Decrease in the current period Ending balance Generated by business combination Disposal Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 80,589,565.84 80,589,565.84 Total 80,589,565.84 80,589,565.84 (2) Goodwill impairment provision In RMB Name of investee or item that generates goodwill Beginning balance Increase in the current period Decrease in the current period Ending balance Provision Disposal Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 20,015,733.28 20,015,733.28 Total 20,015,733.28 20,015,733.28 17. Long-term deferred expenses In RMB Item Beginning balance Increased amount in the current period Amount of amortization in the current period Other decreases Ending balance Office decoration expenses 4,975,535.19943,396.231,764,259.99 4,154,671.43 Service fee 568,331.27422,287.67181,450.61 809,168.33 Brand endorsement cost 184,204.48 78,449.44 105,755.04 Consulting fee 78,916.6711,567.5332,711.45 57,772.75 Environmental protection costs 45,912.29 22,767.62 23,144.67 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 110 Total 5,852,899.901,377,251.432,079,639.11 5,150,512.22 18. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets before offset In RMB Item Ending balance Beginning balance Deductible temporary differences Deferred income tax assets Deductible temporary differences Deferred income tax assets Credit impairment provision 1,117,119,566.34174,412,881.201,140,080,421.22177,937,345.82 Deferred income tax assets before offset recognized based on the provisional estimated expenses 1,039,899,206.63155,984,881.00775,373,813.20116,306,071.98 Changes in the fair value of other equity instrument investments 117,832,510.7817,674,876.62117,832,510.8017,674,876.62 Deferred income tax assets before offset recognized based on the deferred income 82,961,858.8812,444,278.8386,923,728.3313,038,559.25 Asset impairment provision 79,826,380.4511,973,957.0775,904,924.3311,385,738.65 Unrealized profits of internal transactions 4,303,976.681,075,994.179,265,235.742,316,308.94 Deferred income tax assets before offset recognized due to equity incentive 11,327,867.571,743,813.087,950,207.601,239,475.54 Unrecognized financial expenses 1,334,524.36333,631.093,651,876.63912,969.16 Total 2,454,605,891.69375,644,313.062,216,982,717.85340,811,345.96 (2) Deferred income tax liabilities before offset In RMB Item Ending balance Beginning balance Taxable temporary difference Deferred income tax liabilities Taxable temporary difference Deferred income tax liabilities Asset appraisal appreciation arising from business combination where the acquired company is not controlled by the same party after the combination 19,530,747.802,929,612.1721,533,616.613,230,042.49 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 111 Temporary taxable difference incurred from pre-tax deduction of fixed assets 123,729,002.5318,559,350.38125,852,613.9018,877,892.09 Total 143,259,750.3321,488,962.55147,386,230.5122,107,934.58 (3) Deferred income tax assets or liabilities presented in net amount after offset In RMB Item Amount of deferred income tax assets offset against deferred income tax liabilities at the end of the period Ending balance of deferred income tax assets or liabilities after offset Initial amount of deferred income tax assets offset against deferred income tax liabilities Beginning balance of deferred income tax assets or liabilities after offset Deferred income tax assets 375,644,313.06 340,811,345.96 Deferred income tax liabilities 21,488,962.55 22,107,934.58 (4) Presentation of unrecognized deferred income tax assets In RMB Item Ending balance Beginning balance Deductible tax losses 62,061,288.6244,298,409.84 Total 62,061,288.6244,298,409.84 (5) The deductible losses of unrecognized deferred income tax assets will be due in the following years In RMB Year Ending amount Beginning amount Remarks 20236,714.346,714.34 20245,602.285,602.28 20259,556,499.129,556,499.12 202610,380,561.5710,380,561.57 202724,349,032.5324,349,032.53 202817,762,878.78 Total 62,061,288.6244,298,409.84 19 Other non-current assets In RMB Item Ending balance Beginning balance Book balance Impairment Book value Book balance Impairment Book value Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 112 provision provision Prepayments for equipment purchase 2,123,363.72 2,123,363.724,082,671.76 4,082,671.76 Engineering mortgage housing*1 59,751,206.4012,872,011.3746,879,195.0348,666,572.693,315,747.3245,350,825.37 Total 61,874,570.1212,872,011.3749,002,558.7552,749,244.453,315,747.3249,433,497.13 Other description: *1. It refers to the engineering mortgage housing and parking space that the Company has signed a debt restructuring agreement at the end of the period and completed the procedures for purchasing houses through online signing, with a total value of RMB 59,751,200 and a provision for impairment of RMB 12,872,000 Please refer to the relevant description in 2. The Company's debt restructuring matters of Section XVOther Important Matters of this report. 20.Short-term borrowings (I)Short-term borrowing classification In RMB Item Ending balance Beginning balance Credit borrowings*162,650,000,0051,150,000,00 Mortgaged borrowings*213,500,000,00 Accounts receivable factoring 6,715,891,92573,429,99 Total 82,865,891,9251,723,429,99 Description on the classification of short-term borrowings: *1: Shengzhou Kinde, a subsidiary of the Company, has obtained a working capital credit loan from Shaoxing Shengzhou Branch of Bank of Communications and Shaoxing Shengzhou Branch of China Construction Bank. The loan has a term of 1 year and an interest rate range of 3.40% - 3.70%. *2: Shengzhou Kinde, a subsidiary of the Company, has mortgaged a portion of its new factory building to Shaoxing Shengzhou Guangtong Branch of Bank of Communications for a working cap ital loan. The loan has a term of 1 year and an interest rate of 3.35%. 21. Notes payable In RMB Type Ending balance Beginning balance Banker’s acceptance 795,406,054.79872,550,306.86 Total 795,406,054.79872,550,306.86 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 113 22. Accounts payable (1) Presentation of accounts payable In RMB Item Ending balance Beginning balance Payment for materials 1,059,832,651.571,179,804,339.04 Payment for expenses 1,217,692,019.851,004,448,565.06 Payment for construction 194,896,770.92202,679,315.68 Payment for equipment 27,872,418.4031,822,947.53 Total 2,500,293,860.742,418,755,167.31 Note: As of June 30,2023, the balance of important accounts payable with an age of more than one year totaled RMB 54,451,132.43, mainly involving the unsettled project payments and expenses. 23. Contract liabilities In RMB Item Ending balance Beginning balance Advances on sales 941,928,841.93959,915,567.03 Total 941,928,841.93959,915,567.03 24. Employee compensation payable (1) Presentation of employee compensation payable In RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance I. Short-term remuneration 150,070,271.37417,416,219.82500,581,551.1566,904,940.04 II. Post-employment benefits-defined contribution plan 3,696,456.8031,866,055.1933,632,928.801,929,583.19 III. Termination benefits 175,601.71572,112.46516,783.29230,930.88 Total 153,942,329.88449,854,387.47534,731,263.2469,065,454.11 (2) Presentation of short-term employee compensation In RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance 1. Salaries, bonuses, subsidies and allowances 144,681,781.61357,827,466.15439,929,384.2862,579,863.48 2. Employee welfare 12,582,379.1112,582,379.11 3. Social insurance 4,319,168.4421,129,684.1124,244,215.051,204,637.50 Including: medical 4,212,988.2020,091,043.2323,144,243.381,159,788.05 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 114 insurance Work-related injury insurance 106,180.241,038,640.881,099,971.6744,849.45 4. Housing funds 664,905.0018,782,832.7819,170,734.78277,003.00 5. Labor union and staff education expenses 404,416.327,093,857.674,654,837.932,843,436.06 Total 150,070,271.37417,416,219.82500,581,551.1566,904,940.04 (3) Presentation of the defined contribution plans In RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance 1. Basic pensions 3,571,259.1930,813,899.9232,515,092.451,870,066.66 2. Unemployment insurance 125,197.611,052,155.271,117,836.3559,516.53 Total 3,696,456.8031,866,055.1933,632,928.801,929,583.19 25. Taxes payable In RMB Item Ending balance Beginning balance Corporate income tax 120,316,589.5170,376,526.39 VAT 88,178,502.5556,957,133.24 House tax 10,992.7710,345,173.49 Land use tax 4,382,947.50 City maintenance and construction tax 6,212,384.113,805,759.15 Individual income tax 2,128,408.212,226,988.94 Education surcharge 2,662,450.291,631,039.59 Stamp tax 215,273.421,538,692.42 Local education surcharge 1,774,966.961,087,359.86 Total 221,499,567.82152,351,620.58 26. Other amounts payable In RMB Item Ending balance Beginning balance Other payables 281,333,439.52281,878,208.25 Total 281,333,439.52281,878,208.25 (1) Other amounts payable presented by nature In RMB Item Ending balance Beginning balance Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 115 Security deposits payable 268,251,005.52265,582,978.77 Collections by a third party 3,509,947.187,285,543.45 Guarantee deposits payable 5,425,488.886,122,832.30 Others 4,146,997.942,886,853.73 Total 281,333,439.52281,878,208.25 Note: As of June 30,2023, the important other accounts payable with an age of more than one year totaled RMB 246,327,416.93, mainly involving the sales deposits. 27. Non-current liabilities due within one year In RMB Item Ending balance Beginning balance Lease liabilities due within one year 3,970,613.165,720,175.21 Total 3,970,613.165,720,175.21 28. Other current liabilities In RMB Item Ending balance Beginning balance Output VAT to be carried forward 112,459,867.60120,126,501.73 Total 112,459,867.60120,126,501.73 29. Lease liabilities In RMB Item Ending balance Beginning balance Lease payment amount 20,814,370.4628,173,738.18 Unrecognized financial expenses -2,728,137.86 -3,864,596.28 Non-current liabilities due within one year after reclassification -3,970,613.16 -5,720,175.23 Total 14,115,619.4418,588,966.67 30. Deferred income In RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance Cause of formation Government grants 123,912,110.434,900,000.009,823,767.55118,988,342.88 Total 123,912,110.434,900,000.009,823,767.55118,988,342.88 Items with government grants: Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 116 In RMB Liability item Beginning balance Added subsidy amount in the current period Amount included in non-operating income in the current period Amount included in other income in the current period Amount of cost deduction in current period Other changes Ending balance Related to assets/incomes Subsidies for factory buildings, infrastructure construction, equipment, etc. in new Chengnan District 36,988,382.11 961,898.11 36,026,484.00 Related to assets Funds for intelligent manufacturing, integrated standard and new model application program 29,705,342.50 4,269,752.82 25,435,589.68 Related to assets Construction of production line with an annual output of 2.25 million sets of kitchen appliances 19,757,289.36 1,288,947.10 18,468,342.26 Related to assets Intelligent unmanned factory project based on 5G and cloud technology 15,669,066.25 1,039,424.10 14,629,642.15 Related to assets Technological upgrading for manufacturing enterprises 8,300,000.004,900,000.00 711,713.40 12,488,286.60 Related to assets Construction project of kitchen appliance R&D, design and testing center 5,769,425.16 712,343.86 5,057,081.30 Related to assets Construction of production line with an annual output of 1.08 million sets of built-in kitchen appliances 3,569,352.75 341,245.58 3,228,107.17 Related to assets Technological 1,842,576.75 181,798.36 1,660,778.39 Related to Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 117 upgrading project with an annual output of 500,000 assets Robam Future Factory Project 1,118,255.66 87,829.56 1,030,426.10 Related to assets Construction of digital intelligent workshop for smart home appliances 375,935.50 56,521.62 319,413.88 Related to assets Development of new generation of environmentally-friendly energy-saving kitchen appliances and their production line 340,374.47 95,325.46 245,049.01 Related to assets Recycling-centered renewal project 268,856.49 45,794.94 223,061.55 Related to assets Academician & expert work station 166,251.24 21,860.04 144,391.20 Related to assets Kitchen appliance R&D, design and testing center 27,322.00 3,812.40 23,509.60 Related to assets Construction of the digital workshop with an annual output of 2.25 million sets of kitchen appliances 13,680.19 5,500.20 8,179.99 Related to assets 31. Capital stock In RMB Beginning balance Increase and decrease of this change (+, -) Ending balance Issue of new shares Bonus shares Shares converted from capital reserve Others Subtotal Total number of shares 949,024,050.00 949,024,050.00 32. Capital reserve In RMB Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 118 Item Beginning balance Increase in the current period Decrease in the current period Ending balance Capital (stock) premium 401,799,332.67 401,799,332.67 Other capital reserves 8,198,332.913,473,641.59 11,671,974.50 Total 409,997,665.583,473,641.59 413,471,307.17 33. Treasury shares In RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance Share repurchase 199,995,742.59 199,995,742.59 Total 199,995,742.59 199,995,742.59 34. Other comprehensive incomes In RMB Item Beginning balance Amount of the current period Ending balance Amount incurred before income tax in the current period Less: amount included in other comprehensive incomes previously and then transferred into the current profit or loss Less: amount included in other comprehensive incomes previously and then transferred into current retained earnings Less: income tax expenses Amount after tax attributable to the parent company Amount after tax attributable to minority shareholders I. Other comprehensive incomes that cannot be reclassified into profit or loss - 100,157,634.16 - 100,157,634.16 Changes in the fair value of other equity instrument investments - 100,157,634.16 - 100,157,634.16 Total other comprehensive incomes - 100,157,634.16 - 100,157,634.16 35. Surplus reserve In RMB Item Beginning balance Increase in the current Decrease in the Ending balance Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 119 period current period Statutory surplus reserve 474,516,412.50 474,516,412.50 Total 474,516,412.50 474,516,412.50 36. Undistributed profit In RMB Item Current period Previous period Undistributed profit at the end of previous period before adjustment 8,199,079,015.587,098,721,555.37 Undistributed profit at the beginning of the period after adjustment 8,199,079,015.587,098,721,555.37 Add: Net profits attributable to owners of the parent company in the current period 829,718,350.691,572,404,918.21 Ordinary share dividend transferred to capital stock 472,047,458.00472,047,458.00 Undistributed profit at the end of the period 8,556,749,908.278,199,079,015.58 37. Operating income and operating cost In RMB Item Amount of the current period Amount of the previous period Income Cost Income Cost Main business 4,793,316,106.762,305,082,060.114,317,490,105.882,205,131,842.03 Other businesses 141,553,693.3967,013,911.39126,819,993.8134,888,040.50 Total 4,934,869,800.152,372,095,971.504,444,310,099.692,240,019,882.53 38. Taxes and surcharges In RMB Item Amount of the current period Amount of the previous period City maintenance and construction tax 19,865,052.4515,541,302.70 Education surcharge 14,189,320.4211,100,930.49 House tax 1,211,155.82309,227.61 Stamp tax 1,306,922.241,176,949.93 Vehicle and vessel usage tax 5,139.849,939.84 Land use tax -4,374,871.70 -4,382,947.50 Others 5,252.134,621.17 Total 32,207,971.2023,760,024.24 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 120 39. Sales expense In RMB Item Amount of the current period Amount of the previous period Marketing service expenses 650,120,122.89631,391,446.17 Advertisement expenses 356,749,434.59259,175,406.07 Employee compensation 166,363,948.22139,790,625.89 Booth decoration expenses 60,230,248.9159,578,022.62 Promotional activity expenses 33,830,183.3218,422,096.45 Material consumption 38,389,111.9833,049,395.80 Travel expenses 11,697,748.476,801,054.02 Intermediary service fees 10,695,310.637,477,610.64 Rental fees 7,933,192.978,555,672.36 Business hospitality cost 9,309,526.517,472,828.11 Office expenses 7,850,063.784,560,789.33 Others 7,652,481.148,429,642.06 Total 1,360,821,373.411,184,704,589.52 40. Administrative expenses In RMB Item Amount of the current period Amount of the previous period Employee remuneration 109,523,028.0391,121,750.84 Depreciation and amortization 31,430,035.9825,271,929.68 Consulting service fees 13,684,786.2012,229,974.53 Maintenance expenses 2,281,377.2410,083,182.01 Office expenses 6,714,440.346,639,136.07 Rental and property fees 4,762,887.305,712,938.91 Business hospitality cost 4,660,750.074,374,301.07 Travel expenses 4,142,395.013,083,013.05 Communication expense 3,460,975.012,918,739.13 Costs of equity incentive 3,473,641.593,998,366.27 Travel expenses 2,465,253.342,285,073.79 Material consumption 4,742,269.134,431,994.70 Others 12,083,977.0111,433,464.52 Total 203,425,816.25183,583,864.57 41. R&D expenses In RMB Item Amount of the current period Amount of the previous period Employee remuneration 88,567,764.0378,436,915.06 Direct input 65,160,510.1373,217,115.42 Depreciation and amortization 7,419,085.387,636,633.77 Design fees 2,146,030.752,899,636.01 Other expenses 9,440,750.867,178,345.27 Total 172,734,141.15169,368,645.53 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 121 42. Financial expenses In RMB Item Amount of the current period Amount of the previous period Interest expenses 2,707,272.101,018,439.59 Less: Interest income 69,274,034.4260,042,815.83 Add: foreign exchange gain/loss -3,213,064.29 -3,940,324.55 Add: other expenses 820,841.52689,241.88 Total -68,958,985.09 -62,275,458.91 43. Other incomes In RMB Sources generating other incomes Amount of the current period Amount of the previous period Financial support fund to boost the corporate development 44,730,000.0049,775,390.00 Amortization of deferred income 9,823,767.558,354,145.46 Embedded software tax refund 9,453,997.7423,286,694.84 Special funds for industrial development 3,289,700.009,608,719.00 VAT exemption or reduction 922,350.0010,643.41 Post allowance and social insurance allowance 723,791.561,372,323.40 Handling fee refund 684,354.91482,308.94 R&D input grants 382,847.00 Patent awards 1,175,521.65 Other grants 648,750.005,000.00 Total 70,659,558.7694,070,746.70 44. Investment income In RMB Item Amount of the current period Amount of the previous period Income from long-term equity investments accounted for using the equity method -1,263,184.05 -2,947,887.32 Investment income during holding of financial assets for trading 22,986,802.8622,116,828.43 Total 21,723,618.8119,168,941.11 45. Loss from credit impairment In RMB Item Amount of the current period Amount of the previous period Bad debt losses on notes receivable 14,373,972.06163,813,946.01 Bad debt losses from accounts receivable 11,131,980.38 -158,819,085.15 Bad debt losses of other receivables -2,215,366.044,029,453.07 Total 23,290,586.409,024,313.93 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 122 46. Loss from asset impairment In RMB Item Amount of the current period Amount of the previous period Loss from obsolete inventory and from impairment of the cost of contract performance 5,634,807.9124,056,013.60 Loss from non-current asset impairment -9,556,264.05 Total -3,921,456.1424,056,013.60 47. Asset disposal income In RMB Sources of asset disposal income Amount of the current period Amount of the previous period Non-current asset disposal income -711,723.9037,838.75 Including: income from disposal of fixed assets -711,723.9037,838.75 Right-of-use asset disposal income 135,005.49 48. Non-operating revenue In RMB Item Amount of the current period Amount of the previous period Amount included in the current non-recurring profit or loss Liquidated damages and fines 13,200.00 Non-current asset scrapping income 410.00 410.00 Others 2,803,549.502,682,807.722,803,549.50 Total 2,803,959.502,696,007.722,803,959.50 49. Non-operating expenditures In RMB Item Amount of the current period Amount of the previous period Amount included in the current non-recurring profit or loss External donations 1,120,457.501,000,077.701,120,457.50 Amercement outlay 14,450.0056,677.0014,450.00 Losses from non-current asset damage or retirement 673.9572,018.47673.95 Others 314,293.04429,381.96314,293.04 Total 1,449,874.491,558,155.131,449,874.49 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 123 50. Income tax expenses (1) Presentation of income tax expenses In RMB Item Amount of the current period Amount of the previous period Current income tax expenses 187,282,866.64183,792,350.28 Deferred income tax expenses -35,451,939.13 -52,619,931.42 Total 151,830,927.51131,172,418.86 (2) Adjustment of accounting profit and income tax expense In RMB Item Amount of the current period Total profit 975,073,186.16 Income tax expense calculated based on statutory/applicable tax rate 146,260,977.93 Effects of the subsidiaries’ application of different tax rates -820,020.02 Effects of the adjustment of income tax in previous period 25,904.18 Effects of the non-deductible costs, expenses and losses 1,548,109.31 Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period 4,626,478.50 Profit and loss of joint ventures and associated companies accounted for by equity method 189,477.61 Income tax expense 151,830,927.51 51. Cash flow statement items (1) Other cash received in relation to operating activities In RMB Item Amount of the current period Amount of the previous period Interest revenue on deposits 69,274,034.4260,042,815.83 Government grants 56,322,854.7663,679,906.40 Guarantee and security deposits 14,303,618.6214,850,829.06 Letter of credit and acceptance bill margin 9,984,355.8530,104,468.61 Revenue collected and payment made on behalf of other agencies 5,493,388.355,123,692.97 Cash reserve 1,343,606.651,233,346.31 Other payments 6,266,385.362,891,773.89 Total 162,988,244.01177,926,833.07 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 124 (2) Other cash paid related to operating activities In RMB Item Amount of the current period Amount of the previous period Period expenses 1,243,206,922.011,141,993,734.77 Letter of credit and acceptance bill margin 21,285,415.7421,530,136.56 Revenue collected and payment made on behalf of other agencies 10,398,113.729,787,117.46 Guarantee and security deposits 8,133,397.6613,629,302.87 Cash reserve 4,097,943.968,383,255.70 Others 1,336,189.775,565,795.10 Total 1,288,457,982.861,200,889,342.46 (3) Other cash received in relation to financing activities In RMB Item Amount of the current period Amount of the previous period Income from accounts receivable factoring 6,482,178.881,012,732.06 Total 6,482,178.881,012,732.06 (4) Other cash paid in relation to financing activities In RMB Item Amount of the current period Amount of the previous period Attached refund of recourse factoring 3,516,183.32 Rental 3,212,200.533,020,626.80 Total 3,212,200.536,536,810.12 52. Supplementary information of Cash Flow Statement (1) Supplementary information of Cash Flow Statement In RMB Supplementary information Current amount Amount of the previous period 1. Reconciliation of net profit to cash flow from operating activities: Net profit 823,242,258.65721,471,840.03 Add: Asset impairment provision 3,921,456.14 -24,056,013.60 Loss from credit impairment -23,290,586.40 -9,024,313.93 Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets 76,275,036.4860,134,937.59 Depreciation of right-of-use assets 2,662,033.502,735,187.20 Amortization of intangible assets 6,770,682.506,787,723.52 Amortization of long-term deferred expenses 2,079,639.112,454,162.19 Losses arising from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") 576,718.41 -37,838.75 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 125 Losses on disposal of fixed assets (gains indicated with "-") 673.9572,018.47 Losses from fair value change (gains expressed with “-”) Financial expenses (profit shall be indicated with"-") -1,152,076.14 -2,921,884.96 Investment losses (gains expressed with “-”) -21,723,618.81 -19,168,941.11 Decrease in deferred income tax assets (increase shall be indicated with “-”) -34,832,967.10 -54,426,406.39 Increase in deferred income tax liabilities (decrease shall be indicated with “-”) -618,972.031,806,474.98 Decrease in inventories (increase shall be indicated with “-”) 83,112,866.12 -28,800,735.18 Decrease in operating receivables (increase shall be indicated with “-”) 80,656,601.27 -137,525,667.47 Increase in operating payables (decrease expressed with "-") -37,946,892.42 -196,645,420.26 Net cash flow from operating activities 959,732,853.23322,855,122.33 2. Non-cash flow-involved major investing and financing activities: Conversion of debt into capital Convertible bonds due within one year Fixed assets acquired under financing leases 3． Net increase/decrease in cash and cash equivalents: Ending balance of cash 5,777,869,909.083,327,149,844.76 Less: cash beginning balance 5,196,414,341.743,719,988,820.35 Add: ending balance of cash equivalents Less: cash equivalents at the beginning of the period Net increase in cash and cash equivalents 581,455,567.34 -392,838,975.59 (2) Composition of cash and cash equivalents In RMB Item Ending balance Beginning balance I.Cash 5,777,869,909.085,196,414,341.74 Including: cash on hand 182,584.1385,806.05 deposits available for payment at any time 5,776,710,554.595,194,874,841.18 Other cash and cash equivalents available for payment at any time 976,770.361,453,694.51 III.Balance of cash and cash equivalents at the end of the period 5,777,869,909.085,196,414,341.74 53. Assets with limited ownership or right to use In RMB Item Ending book value Reasons for limit Cash and cash equivalents 100,908,470.98 Letters of guarantee and bill acceptance margin Cash and cash equivalents 13,000.00 ETC margin Investment real estate 6,120,022.18 Collateral for bank loans Fixed assets 95,880,347.37 Collateral for bank loans Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 126 Total 202,921,840.53 54. Foreign currency monetary item (1) Foreign currency monetary item In RMB Item Ending balance in foreign currency Exchange rate for conversion Ending balance in RMB Cash and cash equivalents Including: USD 9,596,961.057.225869,345,721.16 Euro 11.927.877593.90 Australian Dollar 858.774.79924,121.41 Accounts receivable Including: USD 3,338,013.857.225824,119,820.48 AUD 30.004.7992143.98 Accounts received in advance Including: USDollar 493,687.677.22583,567,288.37 Australian dollar 179,904.814.7992863,399.16 55. Government grants (1) Basic information of government grants In RMB Type Amount Items Amounts included in current profits and losses Financial support fund to boost the corporate development 44,730,000.00 Other income 44,730,000.00 Embedded software tax refund 9,453,997.74 Other income 9,453,997.74 Technological upgrading for manufacturing enterprises 4,900,000.00 Deferred income Special funds for industrial development 3,289,700.00 Other income 3,289,700.00 VAT exemption or reduction 922,350.00 Other income 922,350.00 Post allowance and social insurance allowance 723,791.56 Other income 723,791.56 Refund of individual income tax handling fee 684,354.91 Other income 684,354.91 R&D input grants 382,847.00 Other income 382,847.00 Other grants 648,750.00 Other income 648,750.00 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 127 VIII. Changes in the scope of consolidated financial statements 1. Changes in the scope of consolidated financial statements due to other reasons Explanation on changes in the scope of consolidated financial statements due to other reasons (such as the establishment or liquidation of subsidiary companies, etc.) and relevant circumstances: On May 29,2023, the Company invested in and established Robam Appliances Holding (HK) Co., Ltd., with a registered capital of USD 500,000 and a shareholding ratio of 100%, which mainly operates investment business in Hong Kong. On June 7,2023, Robam Appliances Holding (HK) Co., Ltd. invested in and established Robam International (HK) Trading Co., Ltd., with a registered capital of USD 500,000 and a shareholding ratio of 100%, which mainly opera tes the sales of kitchen appliances in overseas markets. Currently, both companies have completed the registration with the Hong Kong government, but the registered capital has not been in place and they have not been put into operation. IX. Interests in Other Entities 1. Equity in subsidiaries (1) Composition of the Robam Group Subsidiary Principal place of business Registration place Nature of business Shareholding ratio Acquisition method Direct Indirect Beijing Robam Appliances Sales Co., Ltd. Beijing Beijing Sales of kitchen appliances 100.00% Businesses combination under common control Shanghai Robam Appliances Sales Co., Ltd. Shanghai Shanghai Sales of kitchen appliances 100.00% Businesses combination under common control Hangzhou MingQi Electric Co., Ltd. Hangzhou Hangzhou Sales of kitchen appliances 100.00% Acquisition upon its establishment De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. Shanghai Shanghai Sales of kitchen appliances 51.00% Acquired through investment Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. Shengzhou Shengzhou Production and sales of kitchen appliances 51.00% Business combination not under common control Hangzhou Robam Fuchuang Hangzhou Hangzhou Asset, investment management, 100.00% Acquisition upon its establishment Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 128 Investment Management Co., Ltd. etc. Zhejiang Cookingfuture Technology Co., Ltd. Shengzhou Shengzhou Smart kitchen design 32.13% Acquisition upon its establishment Hangzhou Jinhe Electric Appliances Co., Ltd. Hangzhou Hangzhou Sales of kitchen appliances 100.00% Acquisition upon its establishment Robam International (HK) Trading Co., Ltd. Hong Kong Hong Kong Sales of kitchen appliances 100.00% Acquisition upon its establishment Robam Appliances Holding (HK) Co., Ltd. Hong Kong Hong Kong Asset, investment management, etc. 100.00% Acquisition upon its establishment Explanation on the shareholding ratio in subsidiaries that differs from the voting right ratio in subsidiaries: Note: The Company holds 50% or less voting rights in Zhejiang Cookingfuture Technology Co., Ltd., but still maintains control over it. This is based on the fact that the Company has a controlling relationship with Shengzhou Kinde, so the Company has a controlling relationship with its holding subsidiary Zhejiang Cookingfuture Technology Co., Ltd. (2) Major non-wholly owned subsidiaries In RMB Subsidiary Proportion of shares held by minority shareholders Gains/losses attributable to minority shareholders in the current period Dividend declared and distributed to minority shareholders in the current period Ending balance of minority equity Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 49.00% -4,243,411.45 114,049,873.06 Zhejiang Cookingfuture Technology Co., Ltd. 37.00% -2,232,758.49 8,596,471.29 (3) Main financial information of important partially-owned subsidiaries In RMB Subsidiary Ending balance Beginning balance Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shengzhou Kinde 120,29 4,987.90 353,31 2,096.86 473,60 7,084.76 188,12 8,143.55 44,127,626.9 5 232,25 5,770.50 152,25 6,797.00 348,85 5,702.41 501,11 2,499.41 203,57 6,227.80 45,292,175.5 0 248,86 8,403.30 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 129 Intelligent Kitchen Appliances Co., Ltd. Zhejiang Cookingfuture Technology Co., Ltd. 18,369,746.7 7 8,339,535.88 26,709,282.6 5 3,475,576.46 3,475,576.46 25,723,850.4 8 6,669,996.33 32,393,846.8 1 3,125,658.21 3,125,658.21 In RMB Subsidiary Amount incurred in the current period Amount of the previous period Operating income Net profit Total comprehensive income Cash flow from operating activities Operating income Net profit Total comprehensive income Cash flow from operating activities Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 67,284,556.69 - 10,892,781.85 - 10,892,781.85 - 37,399,921.57 77,502,270.79 - 2,848,019.82 - 2,848,019.82 - 21,169,064.76 Zhejiang Cookingfuture Technology Co., Ltd. 1,510,766.45 - 6,034,482.41 - 6,034,482.41 - 8,517,161.83 593,200.02 - 3,614,071.30 - 3,614,071.30 - 10,664,349.92 3. Equity in joint ventures or associates (1) Important joint ventures or associates Name of joint ventures or associates Principal place of business Registration place Nature of business Shareholding ratio Accounting treatment for investment in joint ventures or associates Direct Indirect De Dietrich Appliances Trading (Shanghai) Co., Ltd. Shanghai Shanghai Sales of kitchen appliances 51.00% Equity method Zhejiang Tingshuo Brand Operation Management Hangzhou Hangzhou Retail 40.00% Equity method Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 130 Co., Ltd. Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. Shaoxing Shaoxing Kitchen appliance manufacturing 40.00% Equity method (2) Summary of the financial information of minor joint ventures and associates In RMB Ending balance/amount incurred in current period Beginning balance/amount of the previous period Joint venture: Total book value of investment 3,272,876.083,824,460.03 Totals of the following items calculated as per respective shareholding proportion --Net profit -551,583.95162,760.00 -Total comprehensive income -551,583.95162,760.00 Associated company: Total book value of investment 4,182,445.494,894,045.59 Totals of the following items calculated as per respective shareholding proportion --Net profit -711,600.10 -989,384.29 -Total comprehensive income -711,600.10 -989,384.29 X. Risks Related to Financial Instruments Major financial instruments of the Company include accounts receivable, accounts payable, etc. See Note for detailed description of these financial instruments. Risks related to these financial instruments and risk management policies adopted by the Company to reduce such risks are outlined as follows. The management of the Company manages and monitors such risk exposures to ensure to keep the risks above within limited scope. 1. ． The Company’s various risk management objectives and policies are outlined as follows: Risk management conducted by the Company is to properly balance risk and income, minimize negative impacts of the risks on the Company’s business performance and maximize benefits of the shareholders and other equity investors. Based on the risk management objective, the Company’s basic risk management policy is to determine and analyze all kinds of risks faced by the Company, establish appropriate risk bottom line for risk management, and monitor all risks promptly and reliably to keep risks within a limited range. Market risk price risk Since the Company sells its products at market prices, it may be affected by such price fluctuations. Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 131 Credit risk As of Friday, June 30,2023, the biggest credit risk exposure that may bring financial loss to the Company mainly comes from the Company’s financial assets loss caused by the other party’s failure to perform its obligations in the contract, particularly including the loss in the book value of recognized financial assets in the consolidated balance sheet. To reduce credit risk, the Company has a dedicated team responsible for determining the credit line, conducting credit approval and implementing other monitoring procedures, to ensure that necessary measures are taken to recover due debt. In addition, the Company reviews the recovery of each account payable on each balance sheet date, so as to ensure sufficient bad debt provisions for unrecoverable accounts. Therefore, the management of the Company holds that the credit risk faced by the Company has been significantly reduced. The credit risk of the Company’s liquid capital is low since it is deposited at banks with relatively high credit rating. Because the risk exposures of the Company are related to multiple contracting parties and multiple clients, the Company has no major credit risk concentration. The Company adopts necessary policies to ensure all of the clients involved in the sales of our products have good credit record. The Company has no major credit risk concentration. Total amount of the top five accounts receivable: RMB 1,388,323,304.88. Total amount of the top five other accounts receivable: RMB 65,690,667.35 Liquidity risk Liquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due. The Company manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoid unacceptable losses or damages to corporate reputation. The Company management has closely examined the liquid assets of the Company and regularly analyzed the liability structure/term and bank lines and so on to endure fund sufficiency. It is concluded that the Company has sufficient funds to meet the demands of short -term loans and capital expenditure of the Company. Analysis of the financial assets and financial liabilities of the Company as per maturity of the undiscounted contract obligations remained is made as follows: Balance on June 30,2023: Item Within 1 year 1-2 years 2-5 years Over 5 years Total Financial assets Cash and cash equivalents 5,878,791,380.06 5,878,791,380.06 Financial assets held for trading 2,315,606,606.83 2,315,606,606.83 Notes receivable 697,840,910.95 697,840,910.95 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 132 Accounts receivable 1,781,653,759.34 1,781,653,759.34 Other accounts receivable 104,345,008.35 104,345,008.35 Financial liabilities Short-term borrowings 82,865,891.92 82,865,891.92 Notes payables 795,406,054.79 795,406,054.79 Accounts payable 2,500,293,860.74 2,500,293,860.74 Other payables 281,333,439.52 281,333,439.52 Payroll payable 69,065,454.11 69,065,454.11 Other current liabilities 112,459,867.60 112,459,867.60 Non-current liabilities due within one year 3,970,613.16 3,970,613.16 Lease liabilities 3,760,929.49 5,367,442.53 4,987,247.42 14,115,619.44 Sensitivity analysis of foreign exchange risk The exchange rate risk borne by the Company is mainly associated with USDollar, Euro, Australian Dollar, etc. The foreign exchange risk borne by the Company is mainly associated with USDollar (which shall be changed according to relevant realities). The Company's main business activities are priced and settled in Renminbi. As of June 30,2023, the Company’s balances of assets and liabilit ies are in RMB (except for the balance of the assets and liabilities in foreign currency in “Foreign currency monetary item" in this Note). Exchange risk resulting from the assets and liabilities whose balances are in foreign currency may affect the Company’s performance. The Company pays close attention to the impact of change in exchange rate on the Company’s exchange risk. Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk. XI. Disclosure of Fair Value 1. Ending fair value of assets and liabilities measured at fair value In RMB Item Ending fair value Fair value measurement (Level 1) Fair value measurement (Level 2) Fair value measurement (Level 3) Total I. Continuous fair value measurement -- -- -- -- (I) Financial assets held for trading 2,315,606,606.832,315,606,606.83 1. Financial assets measured at fair value 2,315,606,606.832,315,606,606.83 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 133 with changes included in current profit or loss (1) Financial products 2,315,606,606.832,315,606,606.83 (III) Investment in other equity instruments 2,116,023.222,116,023.22 Total assets measured continuously at fair value 2,317,722,630.052,317,722,630.05 II. Non-continuous fair value measurement -- -- -- -- 2. Adjustment information between the beginning and ending book values and sensitivity analysis of unobservable parameters for the items involved in Level 3 continuous fair value measurement Item June 30,2023 Fair value Valuation techniques Significant unobservable value Relationship between unobservable value and fair value financial products 2,315,606,606.83 Optimal fair value estimation Investment cost — Investment in other equity instruments 2,116,023.22 Optimal fair value estimation Investment cost — Note: Due to the deteriorating operating environment, operating conditions and financial status of the invested company, Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership), the Company measured its fair value at zero yuan as a reasonable estimate. XII. Related Party and Related Party Transactions 1. The Company’s parent company Parent company Registration place Nature of business Registered capital Proportion of the voting right of the parent company Proportion of Company's shares held by the parent company in the Company Hangzhou Robam Industrial Group Co., Ltd. Hangzhou, Zhejiang Investment and industrial management RMB 60 million 49.68% 49.68% 2. The Company’s subsidiaries See Note "Composition of the Robam Group" for more about the Company’s subsidiaries 3. Other related parties Name of other related parties Relation between other related parties and the Company Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 134 Hangzhou Amblem Household Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Yuhang Robam Fuel Station Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Nbond Nonwovens Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Yuhang Yaguang Spray Coating Factory Other related parties Hangzhou City Garden Hotel Co., Ltd. Other related parties Hangzhou Bonyee Daily Necessity Technology Co., Ltd. Controlled by the same ultimate controlling party Shaoxing Kinde Electric Appliances Co., Ltd. Other related parties Hangzhou Guoguang Touring Commodity Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Xiaozhijia Health Care Product Co., Ltd. Controlled by the same ultimate controlling party Hangzhou Linping ROBAMCharity Foundation Other related parties Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. Other related parties Hangzhou Runqun Hardware Co., Ltd. Other related parties 4. Related transactions (1) Related transactions regarding purchasing and selling goods and providing and accepting labor services Table of the purchasing of goods and receiving of labor services In RMB Related parties Description of the connected transactions Amount of the current period Trading limit approved Whether exceeds the approved limited or not (Y/N) Amount of the previous period Hangzhou Amblem Household Co., Ltd. Purchase of goods 845,058.44845,058.44 No 19,517,425.33 Hangzhou Yuhang Yaguang Spray Coating Factory Receiving of labor services 805,737.85805,737.85 No 3,910,128.45 Hangzhou Xiaozhijia Health Care Product Co., Ltd. Purchasing of goods 1,046,680.731,046,680.73 No 1,767,541.39 Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. Purchase of goods 439,198.72439,198.72 No 376,177.00 Hangzhou Yuhang Robam Fuel Station Co., Ltd. Purchase of goods 429,770.25429,770.25 No 485,747.10 Zhejiang Tingshuo Brand Operation Management Co., Ltd. Receiving of labor services 00 No 200,000.00 Hangzhou Guoguang Touring Commodity Co., Purchase of goods 13,954.3413,954.34 No 85,584.42 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 135 Ltd. Hangzhou Bonyee Daily Necessity Technology Co., Ltd. Purchase of goods 4,470.084,470.08 No 8,344.42 Hangzhou Runqun Hardware Co., Ltd. Receiving of labor services 3,569,947.743,569,947.74 No 0 Table of goods sales/labor service provision In RMB Related parties Description of the connected transactions Amount of the current period Amount of the previous period Hangzhou Amblem Household Co., Ltd. Sale of goods 1,629,834.522,332,591.12 Hangzhou linping ROBAM Charity Foundation Sale of goods 1,001,649.72696,446.84 Hangzhou Nbond Nonwovens Co., Ltd. Sale of goods 16,429.2010,746.90 (2) Related lease The Company acts as the lessor: In RMB Lessee Type of leased asset Rental income recognized in the current period Lease income recognized in the previous period Hangzhou Robam Industrial Group Co., Ltd. Housing 14,400.0014,400.00 The Company acts as the Lessee: In RMB Lessor Type of leased asset Rental expenses for simplified short-term leases and leases of low-value assets (if applicable) Variable lease payments not included in the measurement of lease liabilities (if applicable) Rental paid Interest expense incurred on lease liabilities Increased right-of-use assets Amount incurred in the current period Amount of the previous period Amount incurred in the current period Amount of the previous period Amount incurred in the current period Amount of the previous period Amount incurred in the current period Amount of the previous period Amount incurred in the current period Amount of the previous period Hangzhou Robam Industrial Group Co., Ltd. Housing 275,01 2.28 275,01 2.28 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 136 6. Amounts receivable and payable of related parties (1) Accounts receivable In RMB Name of item Related parties Ending balance Beginning balance Book balance Bad debt reserve Book balance Bad debt reserve Accounts receivable Hangzhou Amblem Household Co., Ltd. 2,043,521.00 1,432,274.00 Prepayments Hangzhou Xiaozhijia Health Care Product Co., Ltd. 3,769.89 Accounts receivable Hangzhou Nbond Nonwovens Co., Ltd. 12,000.00 Accounts receivable Hangzhou linping ROBAMCharity Foundation 966,744.00 (2) Accounts payable In RMB Name of item Related parties Book balance at the end of the period Initial book balance at the beginning of the period Accounts payable Hangzhou Yuhang Robam Fuel Station Co., Ltd. 3,033,735.552,548,095.18 Accounts payable Hangzhou Runqun Hardware Co., Ltd. 2,984,762.46 Accounts payable Hangzhou Amblem Household Co., Ltd. 1,344,844.584,386,391.83 Accounts payable Hangzhou Xiaozhijia Health Care Product Co., Ltd. 481,898.83 Accounts payable Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. 95,111.00298,021.70 Accounts payable Hangzhou Yuhang Yaguang Spray Coating Factory 3,043,849.87 Accounts payable Hangzhou Guoguang Touring Commodity Co., Ltd. 6,963.19 Other payables Hangzhou Yuhang Yaguang Spray Coating Factory 200,000.00200,000.00 Other payables Hangzhou Amblem Household Co., Ltd. 5,000.00 Other payables Hangzhou Guoguang Touring Commodity Co., Ltd. 2,000.002,000.00 XIII. Share Payment 1. Overview of share payment Applicable □Not applicable Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 137 In RMB Total amount of equity instruments granted by the Company in the current period 5,520,000.00 Total amount of equity instruments exercised by the Company in the current period 0.00 Total amount of invalid equity instruments of the Company in the current period 2,554,000.00 The range of exercise price and remaining contract term of the Company's outstanding stock options at the end of the period. The exercise price of the 2021 Stock Option Incentive Plan is RMB 36.57/share, with a remaining term of 1-2 years; the exercise price of the 2022 Stock Option Incentive Plan is RMB 29.27/share, with a remaining term of 1-3 years; the exercise price of the 2023 Stock Option Incentive Plan is RMB 22.51/share, with a remaining term of 1-3 years. Other description 1) 2021 Stock Option Incentive Plan In April 2021, the Company granted stock options to 138 middle-level managers and key technical (business) backbone personnel, with a total of 3.04 million shares and an exercise price of RMB 36.57 /share. In April 2022, due to the failure to meet the exercise conditions of the first exercise period of the stock options under the Company's 2021 Stock Option Incentive Plan and the departure of 4 incentive targets who no longer meet the incentive conditions, the Company cancelled 1.264 million stock options. In May 2023, due to the failure to meet the exercise conditions of the second exercise period of the stock options under the Company's 2021 Stock Option Incentive Plan and the departure of 13 incentive targets who no longer meet the incentive conditions, the Company cancelled 945,000 stock options. 2) 2022 Stock Option Incentive Plan In April 2022, the Company granted stock options to 282 middle-level managers and key technical (business) backbone personnel, with a total of 4.78 million shares and an exercise price of RMB 29.27 /share. In May 2023, due to the failure to meet the exercise conditions of the first exercise period of the stock options under the Company's 2022 Stock Option Incentive Plan and the departure of 13 incentive targets who no longer meet the incentive conditions, the Company cancelled 1,609,000 stock options. 3) 2023 Stock Option Incentive Plan On April 25,2023, the Company held the 14th meeting of the 5th Board of Directors, deliberating and adopting the Proposal on 2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals. On May 18,2023, the Proposal was approved by the 2022 Annual Shareholders’ Meeting of the Compa ny. On June 20,2023, the stock options were actually granted, with a total of 325 incentive targets,5.52 million options granted and an exercise price of RMB 22.57 /share. 2. Equity-settled share-based payment Applicable □Not applicable In RMB Method for determining the fair value of equity instruments The Company evaluates the fair value of stock options Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 138 on the grant date using the internationally recognized Black-Scholes option pricing model. basis for determining the number of vested equity instruments Best estimate of the number of vested equity instruments Reasons for material differences between the current estimate and the previous estimate Not Applicable Cumulative amount of equity-settled share-based payments included in the capital reserve 11,327,867.55 Total expense recognized for equity-settled share-based payments in the current period 3,473,641.59 XIV. Commitments and Contingencies 1. Major commitments (1) Major commitments on the balance sheet date The Company committed to investing RMB 4 million in Zhejiang Tingshuo Brand Operation Management Co., Ltd., of which RMB 2 million has been paid in, accounting for 40% of the shares. The remaining RMB 2 million has not been paid in. In addition to the above commitments, as of the day of submission of the Financial Statements, the Company has no other major commitments. XV. Events After the Balance Sheet Date: None XVI. Other Significant Events 1. Debt restructuring As of June 30,2023, the Company's situation regarding the signing of the engineering mortgage housing agreement and the completion of procedures for purchasing houses through online signing is as follows: Item Amount of debt repayment agreement signed Including: Completion of procedures for online signing and delivery of houses Amount required for the procedures Amount required in case of unfinished procedures for online signing and delivery of houses Real estate clients 329,839,806.7470,422,825.01259,416,981.73 Total 329,839,806.7470,422,825.01259,416,981.73 The Company signed a engineering mortgage housing agreement with the aforementioned real estate clients, involving a total accounts receivable balance of RMB 329,839,800. The procedures for online signing and delivery of the portion of RMB 70,422,800 has been completed, and the recognition of creditor's rights on accounts receivable has been terminated. The fair value of the real estate used for debt repayment at the time of debt restructuring is presented in the item of other non -current assets, with a fair value of the portion of RMB 70,422,800 confirmed through public market inquiry. The Company paid a price difference of RMB 2,588,700 in cash. At the time of debt restructuring, there was no profit or loss from the restructur ing. The procedures for online signing and filing of the houses have not yet been completed for the remaining portion of RMB Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 139 259,417,000. The Company has not terminated the recognition of the creditor's rights on accounts receivable and has made a bad debt provision at an expected credit loss rate of 20%. As of June 30,2023, the Company has no other significant events to be disclosed. XVII. Notes to Main Items of the Financial Statements of the Parent Company 1. Accounts receivable (1) Classified disclosure of accounts receivable In RMB Type Ending balance Beginning balance Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value Amount Percentage (%) Amount Percentage of provision Amount Percentage (%) Amount Percentage of provision Accounts receivable with individual bad debt provisions 1,491,0 18,527.24 53.38% 951,136,758.57 63.79% 539,881,768.67 1,543,9 55,986.32 58.11% 972,062,395.33 62.96% 571,893,590.99 Including: Bad debt provisions by individual item 1,491,0 18,527.24 53.38% 951,136,758.57 63.79% 539,881,768.67 1,543,9 55,986.32 58.11% 972,062,395.33 62.96% 571,893,590.99 Accounts receivable with a collective bad debt provision 1,302,1 30,129.47 46.62% 75,770,563.31 5.82% 1,226,3 59,566.16 1,112,9 30,148.56 41.89% 64,280,210.58 5.78% 1,048,6 49,937.98 Including: Accounts receivable grouped accordin139,822,432.68 5.01% 139,822,432.68 99,792,768.36 3.76% 99,792,768.36 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 140 g to related parties Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision 1,162,3 07,696.79 41.61% 75,770,563.31 6.52% 1,086,5 37,133.48 1,013,1 37,380.20 38.13% 64,280,210.58 6.34% 948,857,169.62 Total 2,793,1 48,656.71 100.00 % 1,026,9 07,321.88 36.77% 1,766,2 41,334.83 2,656,8 86,134.88 100.00 % 1,036,3 42,605.91 39.01% 1,620,5 43,528.97 Bad debt provisions by individual item: In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision Reasons for provision Unit 1657,106,467.98657,106,467.98100.00% Debt default Unit 2527,846,545.67158,353,963.7030.00% Overdue debt Unit 3116,422,160.3847,034,405.3640.40% Overdue debt Unit 431,086,961.456,217,392.2920.00% Overdue debt Unit 528,139,039.0219,225,685.8168.32% Overdue debt Unit 624,428,569.146,195,424.4725.36% Overdue debt Unit 722,763,973.1315,934,781.1970.00% Debt default Unit 814,080,420.748,587,655.5260.99% Overdue debt Unit 913,773,333.343,646,561.0326.48% Overdue debt Unit 1013,671,133.596,306,115.0446.13% Overdue debt Unit 118,644,489.506,051,142.6570.00% Debt default Unit 128,009,318.822,345,903.1129.29% Overdue debt Unit 135,797,448.184,058,213.7370.00% Debt default Unit 144,204,830.932,943,381.6570.00% Debt default Unit 153,660,575.031,415,427.5238.67% Overdue debt Unit 1611,383,260.345,714,237.5250.20% Expected to be exposed to recovery risk Total 1,491,018,527.24951,136,758.57 Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 141 characteristics, their bad debts are provided for collectively. In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision With 1 year 985,880,622.4449,294,031.125.00% 1-2 years 131,537,661.5113,153,766.1510.00% 2-3 years 35,221,158.957,044,231.7920.00% 3-4 years 5,656,362.682,828,181.3450.00% 4-5 years 2,807,691.482,246,153.1880.00% More than 5 years 1,204,199.731,204,199.73100.00% Total 1,162,307,696.7975,770,563.31 Description on basis for determining combination：Collective bad debt provision: Accounts receivable grouped according to related parties with a collective bad debt provision In RMB Name Ending balance Book balance Bad debt reserve Percentage of provision Accounts receivable grouped according to related parties 139,822,432.68 Total 139,822,432.68 Description on basis for determining combination：If the bad debt provisions for accounts receivable is recognized in accordance with the expected general credit loss model, please disclose the relevant information of the bad debt provisions in the same manner as the disclosure of other accounts receivable. □Applicable Not applicable Disclosed based on the aging In RMB Aging Ending balance Within 1 year (including 1 year) 1,399,469,771.05 Within 1 year (including 1 year) 1,399,469,771.05 1-2 years 1,025,247,285.91 2-3 years 350,955,036.85 More than 3 years 17,476,562.90 3-4 years 7,049,658.47 4-5 years 5,578,741.55 More than 5 years 4,848,162.88 Total 2,793,148,656.71 (2) Bad debt provision, and its recovery or reversal in the current period Bad debt provision in the current period: In RMB Type Beginning balance Amount of change in the current period Ending balance Provision Recovery or Write-off Others Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 142 reversal Bad debt reserves for accounts receivable 1,036,342,605.9 1 29,121,357.1138,556,641.14 1,026,907,321.8 8 Total 1,036,342,605.9 1 29,121,357.1138,556,641.14 1,026,907,321.8 8 (3) Top five debtors with the largest ending balances of accounts receivable In RMB Unit Ending balance of accounts receivable Proportion in the total ending balance of accounts receivable Ending balance of bad debt reserves Unit 1527,846,545.6218.90% 158,353,963.69 Unit 2452,376,997.9816.19% 452,376,997.98 Unit 3147,390,416.195.28% 7,369,520.81 Unit 495,125,955.203.40% 95,125,955.20 Unit 583,153,664.862.98% 4,157,683.24 Total 1,305,893,579.8546.75% (4) Amount of assets and liabilities arising from the transfer of accounts receivable and continued involvement Asset item Ending balance Liability item Ending balance Accounts receivable factoring 6,715,891.92 Short-term borrowings 6,715,891.92 2. Other accounts receivable In RMB Item Ending balance Beginning balance Dividends receivable 10,200,000.00 Other accounts receivable 94,065,660.8573,700,676.77 Total 94,065,660.8583,900,676.77 (1) Dividends receivable 1) Classification of dividends receivable In RMB Item (or investee) Ending balance Beginning balance Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 10,200,000.00 Total 10,200,000.00 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 143 (2) Other accounts receivable 1) Classification of other accounts receivable by nature In RMB Nature of receivable Book balance at the end of the period Initial book balance at the beginning of the period Collections by a third party 66,011,015.0450,695,825.81 Security/guarantee deposits 32,855,617.6430,213,932.48 Related transactions 4,064,000.004,064,000.00 Withholdings 5,886,431.324,337,682.15 Cash reserve 3,227,223.761,972,794.63 Others 1,026,223.496,022.00 Total 113,070,511.2591,290,257.07 2) Bad debt provision In RMB Bad debt reserve Phase IPhase IIPhase III Total Expected credit loss over the next 12 months Expected credit loss over the entire duration (without credit impairment) Expected credit loss over the entire duration (with credit impairment) Balance as of January 1,2023 17,589,580.30 17,589,580.30 Balance on January 1, 2023 in the current period Provision in the current period 1,415,270.10 1,415,270.10 Balance as of June 30, 2023 19,004,850.40 19,004,850.40 Changes in the book balance with significant change in amount of the loss provision in the current period □Applicable Not applicable Disclosed based on the aging In RMB Aging Ending balance Within 1 year (including 1 year) 87,477,200.35 Within 1 year (including 1 year) 87,477,200.35 1-2 years 6,791,034.68 2-3 years 4,704,106.97 More than 3 years 14,098,169.25 3-4 years 1,572,867.85 4-5 years 1,503,349.00 More than 5 years 11,021,952.40 Total 113,070,511.25 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 144 3) Bad debt provision, and its recovery or reversal in the current period Bad debt provision in the current period: In RMB Type Beginning balance Amount of change in the current period Ending balance Provision Recovery or reversal Write-off Others Bad debt provision for other receivables 17,589,580.301,415,270.10 19,004,850.40 Total 17,589,580.301,415,270.10 19,004,850.40 4) Top five debtors with the largest ending balances of other accounts receivable In RMB Unit Nature of receivable Ending balance Aging Proportion in the total ending balance of other accounts receivable Ending balance of bad debt reserves Unit 1 Collections by a third party and unit deposits 42,067,468.930-3 years 37.21% 2,146,623.45 Unit 2 Collections by a third party and unit deposits 5,948,313.58 With 1 year 5.26% 297,415.68 Unit 3 Collections by a third party and unit deposits 5,747,755.08 0-5 years and above 5.08% 334,887.75 Unit 4 Collections by a third party and unit deposits 5,512,168.680-3 years 4.88% 316,415.93 Unit 5 Unit deposits 5,500,000.00 Within 1 year 4.86% 275,000.00 Total 64,775,706.27 57.29% 3,370,342.81 3. Long-term equity investment In RMB Item Ending balance Beginning balance Book balance Impairment provision Book value Book balance Impairment provision Book value Investments in subsidiaries 267,352,263.1 9 20,400,000.00 246,952,263.1 9 267,279,396.1 0 20,400,000.00 246,879,396.1 0 Investments in joint ventures and associated companies 3,870,729.690.003,870,729.694,890,453.340.004,890,453.34 Total 271,222,992.8 8 20,400,000.00 250,822,992.8 8 272,169,849.4 4 20,400,000.00 251,769,849.4 4 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 145 (1) Investment in subsidiaries In RMB Investee Beginning balance（book value) Increase/decrease in the current period Ending balance（book value) Ending balance of impairment provision Additional investment Negative investment Impairment provision Others Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. 162,320,000.00 162,320,000.00 Hangzhou MingQi Electric Co., Ltd. 52,275,243.18 72,867.09 52,348,110.27 De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. 630,900.00 630,900.00 20,400,000.00 Shanghai Robam Appliances Sales Co., Ltd. 5,838,272.1 0 5,838,272.1 0 Beijing Robam Appliances Sales Co., Ltd. 5,814,980.8 2 5,814,980.8 2 Hangzhou Robam Fuchuang Investment Management Co., Ltd. 10,000,000.00 10,000,000.00 Hangzhou Jinhe Electric Appliances Co., Ltd. 10,000,000.00 10,000,000.00 Robam International (HK) Trading Co., Ltd. Robam Appliances Holding (HK) Co., Ltd. Total 246,879,396.10 72,867.09 246,952,263.19 20,400,000.00 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 146 (2) Investment in joint ventures and associated companies In RMB Investor Beginning balance（book value) Increase/decrease in the current period Ending balance（book value) Ending balance of impairment provision Additional investment Negative investment Investment profit or loss recognized using the equity method Adjustment of other comprehensive incomes Other changes in equity Cash dividends or profits declared and distributed Impairment provision Others I. Joint venture De Dietrich Trade (Shanghai) Co., Ltd. 3,824,4 60.03 - 551,58 3.95 3,272,8 76.08 Subtotal 3,824,4 60.03 - 551,58 3.95 3,272,8 76.08 II. Associated enterprises二、联营企业Zhejiang Tingshuo Brand Operation Management Co., Ltd. 1,065,9 93.31 - 468,13 9.70 597,85 3.61 Subtotal 1,065,9 93.31 - 468,13 9.70 597,85 3.61 Total 4,890,4 53.34 - 1,019,7 23.65 3,870,7 29.69 0.00 4. Operating income and operating cost In RMB Item Amount of the current period Amount of the previous period Income Cost Income Cost Main business 4,362,487,508.282,211,299,281.374,044,712,473.722,113,758,543.93 Other businesses 127,661,267.9361,625,299.63114,887,076.8633,163,443.14 Total 4,490,148,776.212,272,924,581.004,159,599,550.582,146,921,987.07 Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 147 5. Investment income In RMB Item Amount of the current period Amount of the previous period Income from long-term equity investments accounted for using the equity method -1,019,723.65 -2,947,887.32 Investment income during holding of financial assets for trading 22,815,337.7420,586,968.04 Total 21,795,614.0917,639,080.72 XVIII. Supplementary Information 1. Breakdown of non-recurring profits and losses in the current period Applicable □Not applicable In RMB Item Amount Description Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) -576,982.36 Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) 60,521,206.11 Reversal of impairment provision for accounts receivable tested for impairment separately 38,556,641.14 Other non-operating revenues and expenses except the above items 1,354,348.96 Less: Affected amount of income tax 15,524,210.60 Affected amount of minority shareholders’ equity 1,304,629.94 Total 83,026,373.31 -- Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Profits and Losses (referred to as “Announcement No.1”) are defined as recurring profits and losses Applicable Not applicable Item Amount Reasons VAT exemption, reduction or refund 9,453,997.74 National tax policy, regular business Refund of individual income tax handling fee 684,354.91 National tax policy, regular business Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2023 148 Total 10,138,352.65 — 2. Return on net assets and earnings per share (EPS) Profit within the Reporting Period Weighted average return on net assets EPS Basic earnings per share (EPS) (RMB/share) Diluted EPS (RMB/share) Net profit attributable to common stockholders of the Company 8.24% 0.870.87 Net profit attributable to common shareholders of the Company after deducting non-recurring profits and losses 7.42% 0.790.79 3. Accounting data differences under domestic and foreign accounting standards (1) Differences of net profits and net assets in the Financial Report disclosed as per the IAS and CAS □Applicable Not applicable (2) Differences of net profits and net assets in the Financial Report disclosed as per the foreign accounting standard and CAS □Applicable Not applicable (3) Explanation of the reasons of accounting data differences under domestic and foreign accounting standards shall be made, and where data audited by an overseas audit institution has been adjusted based on the differences, the name of the overseas institution shall be indicated. 4. Others August 2023 Chapter 1 Important Notes, Contents and Interpretations Chapter 2 Company Profile and Major Financial Indicators I. Company Profile II. Contact Person and Contact Information III. Other Information 1. Contact information 2. Information disclosure and filing location 3.Other information IV. Key Accounting Data and Financial Indicators V. Differences in Accounting Data under Domestic and Foreign Accounting Standards 1. Whether there are differences in the net profit and net asset disclosed in the Financial Report under International Accounting Standards (IAS) and China’s accounting standards 2. Whether there are differences in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s accounting standards during VI. Items and Amounts of Non-recurring Gains and Losses Chapter 3 Management Discussion and Analysis I. Main Businesses during the Reporting Period II. Analysis of Core Competitiveness III. Analysis of Main Business IV. Analysis of Non-core Business V. Analysis of Assets and Liabilities 1. Significant changes in assets composition 2. Major overseas assets 3.Assets and liabilities measured at fair value 4.Restricted asset rights by the end of the reporting period VI. Analysis of Investment 1. Overview 2. Major equity investments obtained during the reporting period 3. Major ongoing non-equity investments during the reporting period 4. Financial asset investment (1) Securities investment (2) Derivative investment 5. Use of the raised funds VII. Sale of Major Assets and Equities 1. Sale of major assets 2. Sale of major equities VIII. Analysis of Main Holding and Joint-stock Companies IX. Structured Entities Controlled by the Company X. Risks faced and countermeasures taken by the Company Chapter 4 Corporate Governance I. Annual General Meeting of Shareholders and Extraordinary General Meeting of Shareholders during the Reporting Period 1. General Meeting of Shareholders during the reporting period 2. Preferred shareholders with voting rights recovered requested to convene an extraordinary general meeting of shareholders II. Changes in Directors, Supervisors and Senior Management III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during the Reporting Period IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or other Employee Incentives 1. Equity incentive 2. Implementation of the employee stock ownership plan 3. Other employee incentive plans Chapter 5 Environmental and Social Responsibilities I. Major Environmental Issues II. Social Responsibility Chapter 6 Significant Matters I. Commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting period II. Non-operating Occupation of Funds of the Listed Company by the Controlling Shareholder and Other Affiliated Parties III. Illegal External Guarantee IV. Appointment and Dismissal of Accounting Firm V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standard Audit Report” Issued by the Accounting Firm for the Reporting Period VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the Last Year VII. Matters Related to Bankruptcy Reorganization VIII. Litigation Matters IX. Punishment and Rectification X. Integrity Conditions of the Company and its Controlling Shareholders XI. Major Connected Transactions 1. Connected transactions concerning daily operations 2. Connected transactions related to the acquisition or sales of assets or equity 3. Connected transactions related to joint outward investment 4. Connected transactions on credit and debt 5.Transactions with connected finance companies 6.Transactions between finance companies controlled by the Company and affiliates 7. Other major connected transactions XII. Major Contracts and Their Performance 1. Entrustment, contracting and leasing (1) Entrustment (2) Contracting (3) Leasing 2. Material guarantee 3. Financial management entrusting 4. Other material contracts XIII. Explanation of Other Significant Matters XIV. Significant Matters of Subsidiaries of the Company Chapter 7 Changes in Shares and Shareholders I. Changes in Shares 1. Changes in shares 2. Changes in shares subject to sales restrictions II. Securities Issuance and Listing III. Number of Shareholders of the Company and Their Shareholdings IV. Changes in Shares Held by Directors, Supervisors, and Senior Management V. Changes in the Controlling Shareholder and the Actual Controller Chapter 8 Preferred Shares Chapter 9 Bonds Chapter 10 Financial Report I. Audit Report II. Financial Statements 1. Consolidated Balance Sheet 2. Balance Sheet of the Parent Company 3. Consolidated Income Statement 4. Income Statement of the Parent Company 5. Consolidated Cash Flow Statement 6. Cash Flow Statement of the Parent Company 7. Consolidated Statement of Changes in Owners’ Equity 8. Statement of Changes in Owners’ Equity of the Parent Company III. Basic Information of the Company IV. Basis for Preparation of Financial Statements 1. Preparation basis V. Significant Accounting Policies and Estimates 1. Statement of compliance with the Accounting Standards for Business Enterprises 2. Accounting period 3. Operating cycle 4. Bookkeeping base currency 5. Accounting approaches to business combinations under or not under common control 6. Methods of preparing consolidated financial statements 7. Classification of joint arrangement and accounting methods for joint operation 8. Recognition standard of cash and cash equivalents 9. Foreign currency business and conversion of foreign currency statement 10. Financial instruments 11. Notes receivable 12. Accounts receivable 13. Accounts receivable financing 14. Other accounts receivable 15. Inventories 16. Contract assets 17. Contract costs 18. Long-term equity investment 19. Investment real estate 20. Fixed assets (1) Recognition conditions (2) Depreciation method 21. Construction in progress 22. Borrowing costs 23. Right-of-use assets 24. Intangible assets (1) Valuation method, service life and impairment test 25. Long-term deferred expenses 26. Contract liabilities 27. Employee remuneration (1) Accounting treatment method of short-term remuneration (2) Accounting treatment method of post-employment benefits (3) Accounting treatment method of dismissal benefits (4) Accounting treatment method of other long-term employee benefits 28. Lease liabilities 29. Provisions 30. Share-based payment 31. Revenue 32. Government grants 33. Deferred income tax assets/deferred income tax liabilities 34. Lease (1) Accounting method for operating lease 35. Significant accounting policy and accounting estimate changes (1) Significant accounting policy changes (2) Significant accounting estimate changes (3) Relevant financial statement items at the beginning of 2023 when the adjustments stipulated in the new accounting standards apply for the first time VI. Taxation 1. Main tax categories and tax rates 2. Preferential tax policy VII. Notes to items in the consolidated financial statements 1. Cash and cash equivalents 2. Financial assets held for trading (1) Classified presentation of notes receivable (2) Bad debt provision, and its recovery or reversal in the current period (3) Notes transferred to accounts receivable by the Company due to drawer’s non-performance at the end of the period 5. Accounts receivable (1) Classified disclosure of accounts receivable (2) Bad debt provision, and its recovery or reversal in the current period (3) Accounts receivable actually written off in the current period (4) Top five debtors with the largest ending balances of accounts receivable (5) Accounts receivable whose recognition is terminated due to transferal of financial assets 6. Advance payments (1) Advance payments presented by age (2) Top five payers with the largest ending balances of advance payments 7. Other accounts receivable Other accounts receivable 1) Classification of other accounts receivable by nature 2) Bad debt provision 3) Bad debt provision, and its recovery or reversal in the current period 4) Top five debtors with the largest ending balances of other accounts receivable 8. Inventories (1) Classification of inventories (2) Provision for obsolete inventory or for impairment of the cost of contract performance 10. Long-term equity investment 11. Other equity instrument investments 12. Investment real estate (1) Investment real estate under the cost measurement mode 13. Fixed assets (1) Fixed assets (2) Fixed asset without certificate of title (3) Disposal of fixed assets 14. Construction in progress (1) Construction in progress (2) Current changes in major projects under construction 14. Right-of-use assets 15. Intangible assets (1) Intangible assets 16. Goodwill (1) Original book value of goodwill (2) Goodwill impairment provision 17. Long-term deferred expenses 18. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets before offset (2) Deferred income tax liabilities before offset (3) Deferred income tax assets or liabilities presented in net amount after offset (4) Presentation of unrecognized deferred income tax assets (5) The deductible losses of unrecognized deferred income tax assets will be due in the following years 19 Other non-current assets 20.Short-term borrowings (I)Short-term borrowing classification 21. Notes payable 22. Accounts payable (1) Presentation of accounts payable 23. Contract liabilities 24. Employee compensation payable (1) Presentation of employee compensation payable (2) Presentation of short-term employee compensation (3) Presentation of the defined contribution plans 25. Taxes payable 26. Other amounts payable (1) Other amounts payable presented by nature 27. Non-current liabilities due within one year 28. Other current liabilities 29. Lease liabilities 30. Deferred income 31. Capital stock 32. Capital reserve 33. Treasury shares 34. Other comprehensive incomes 35. Surplus reserve 36. Undistributed profit 37. Operating income and operating cost 38. Taxes and surcharges 39. Sales expense 40. Administrative expenses 41. R&D expenses 42. Financial expenses 43. Other incomes 44. Investment income 45. Loss from credit impairment 46. Loss from asset impairment 47. Asset disposal income 48. Non-operating revenue 49. Non-operating expenditures 50. Income tax expenses (1) Presentation of income tax expenses (2) Adjustment of accounting profit and income tax expense 51. Cash flow statement items (1) Other cash received in relation to operating activities (2) Other cash paid related to operating activities (3) Other cash received in relation to financing activities (4) Other cash paid in relation to financing activities 52. Supplementary information of Cash Flow Statement (1) Supplementary information of Cash Flow Statement (2) Composition of cash and cash equivalents 53. Assets with limited ownership or right to use 54. Foreign currency monetary item (1) Foreign currency monetary item 55. Government grants (1) Basic information of government grants VIII. Changes in the scope of consolidated financial statements 1. Changes in the scope of consolidated financial statements due to other reasons IX. Interests in Other Entities 1. Equity in subsidiaries (1) Composition of the Robam Group (2) Major non-wholly owned subsidiaries (3) Main financial information of important partially-owned subsidiaries 3. Equity in joint ventures or associates (1) Important joint ventures or associates (2) Summary of the financial information of minor joint ventures and associates X. Risks Related to Financial Instruments XI. Disclosure of Fair Value 1. Ending fair value of assets and liabilities measured at fair value 2. Adjustment information between the beginning and ending book values and sensitivity analysis of unobservable parameters for the items involved in Level 3 continuous fair value measurement XII. Related Party and Related Party Transactions 1. The Company’s parent company 2. The Company’s subsidiaries 3. Other related parties 4. Related transactions (1) Related transactions regarding purchasing and selling goods and providing and accepting labor services (2) Related lease 6. Amounts receivable and payable of related parties (1) Accounts receivable (2) Accounts payable XIII. Share Payment 1. Overview of share payment 2. Equity-settled share-based payment XIV. Commitments and Contingencies 1. Major commitments XV. Events After the Balance Sheet Date: None XVI. Other Significant Events 1. Debt restructuring XVII. Notes to Main Items of the Financial Statements of the Parent Company 1. Accounts receivable (1) Classified disclosure of accounts receivable (2) Bad debt provision, and its recovery or reversal in the current period (3) Top five debtors with the largest ending balances of accounts receivable (4) Amount of assets and liabilities arising from the transfer of accounts receivable and continued involvement 2. Other accounts receivable (1) Dividends receivable 1) Classification of dividends receivable (2) Other accounts receivable 1) Classification of other accounts receivable by nature 2) Bad debt provision 3) Bad debt provision, and its recovery or reversal in the current period 4) Top five debtors with the largest ending balances of other accounts receivable 3. Long-term equity investment (1) Investment in subsidiaries (2) Investment in joint ventures and associated companies 4. Operating income and operating cost 5. Investment income XVIII. Supplementary Information 1. Breakdown of non-recurring profits and losses in the current period 2. Return on net assets and earnings per share (EPS) 3. Accounting data differences under domestic and foreign accounting standards (1) Differences of net profits and net assets in the Financial Report disclosed as per the IAS and CAS (2) Differences of net profits and net assets in the Financial Report disclosed as per the foreign accounting standard and CAS (3) Explanation of the reasons of accounting data differences under domestic and foreign accounting standards shall be made, and where data audited by an overseas audit institution has been adjusted based on the differences, the name of the overseas i... 4. Others