Haier Smart Home Co., Ltd. 2021 Annual ReportCompany Code：600690.SH, 690D.DE

Short Name

：Haier Smart Home

Haier Smart Home Co., Ltd.
2021 Annual Report

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Haier Smart Home Co., Ltd. 2021 Annual Report

Important NoticeI.

The Board of Directors, the Board of Supervisors, directors, supervisors and senior management ofHaier Smart Home Co., Ltd. (‘the Company’) hereby assure that the content set out in the annual
report is true, accurate and complete, and free from any false record, misleading representation ormaterial omission, and are individually and collectively responsible for the content set out therein.

II. All Directors of the Company have attended the board meetings.
III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified audit reportfor the Company.

IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of theCompany) and Ying Ke (the person in charge of accounting department) hereby certify that thefinancial report set out in the annual report is true, accurate and complete.

V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reporting period
resoluted and adopted by the Board
Proposal of profit distribution for the reporting period are examined and reviewed by the Board: todeclare a cash dividend of RMB4.60 per 10 shares (tax inclusive) to all shareholders based on the total
number of shares held on record date and after deducting the repurchased shares from the repurchaseaccount in respect of the future distribution proposal, with proposed distribution amounting to
RMB4,320,413,011.54 (tax inclusive). The proportion of cash distribution is 33.1% of the net profit
attributable to shareholder of parent company of the Company for the year. If there is any change in the
total share capital of the Company during the period from the date of this report to the record date of theequity distribution, the total distribution amount will be remained unchanged with corresponding
adjustment to the proportion of distribution per share.

VI. Disclaimer in respect of forward-looking statements√

Applicable □Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this report do
not constitute the Company’s substantial commitment to investors. Investors are advised to pay attention
to investment risks.

VII. Is there any fund occupation by controlling shareholders and their related parties for nonoperational purposes?
No

VIII. Is there any provision of external guarantee in violation of the prescribed decision-making
procedures?
No

IX. Are there more than half of the Directors who are unable to guarantee the truthfulness, accuracy
and completeness of the annual report disclosed by the Company?
No
X. Important Risk Warnings
For the possible risks which the Company may encounter, please refer to the relevant information set out in thesection of ‘MANAGEMENT DISCUSSION AND ANALYSIS’ in this report.
XI. Others□ Applicable √ Not Applicable

Chairman: Liang Haishan
Haier Smart Home Co., Ltd
30 March 2022

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Contents
LETTER TO SHAREHOLDERS

4

SECTION I

DEFINITIONS

11

SECTION II

GENERAL INFORMATION OF THE COMPANY AND KEY
FINANCIAL INDICATORS

13

SECTION III

MANAGEMENT DISCUSSION AND ANALYSIS

20

SECTION IV

CORPORATE GOVERNANCE

61

SECTION V

ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES111

SECTION VI

SIGNIFICANT EVENTS

120

SECTION VII

146

SECTION VIIICHANGES IN ORDINARY SHARES AND INFORMATIONABOUT SHAREHOLDERSRELEVANT INFORMATION OF PREFERRED SHARES

157

SECTION IX

RELEVANT INFORMATION OFCORPORATE BONDS

158

SECTION X

FINANCIAL REPORT166

SECTION XIRESPONSIBILITY STATEMENT

366(I) Financial statements with signatures and seals of the legal representative, chief
accountant and person in charge of accounting department.
DOCUMENTS(II) Original audit report with seals of accounting firm, signatures and seals of registered
AVAILABLE
accountants.
FOR(III) Originals of all documents and announcements of the Company which have been
INSPECTION
publicly disclosed on the newspaper designated by China Securities Regulatory
Commission during the reporting period.

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Letter to Shareholders

2021 was no doubt another year full of challenges. The COVID-19 pandemic has changed life andwork patterns. While consumption has yet to fully recover, the global supply chain was confronted byvarious factors such as the chip shortage and insufficient logistics capacity. 2021 was also the first fiscal
year following the integration of Haier Electronics into Haier Smart Home. With unyielding dedicationof 100,000 Haier Smart Home innovators around the world, we have delivered more than 110 million
unit of home appliances to consumers worldwide and reported best business result ever, including alltime-high sales revenue and net profit. By upholding entrepreneurial spirit since day one, we have firmly
implemented strategies of global brand creation, scenario-based innovation, and efficiency enhancement
by digitalization. 2021 represents the year when Haier Smart Home made significant progress in fulfillingits mission to provided customized better living experience for families around the world.

Key Accomplishments:

Record-breaking revenue and profit: In 2021, the Company delivered revenue of RMB 227.556 billion,
representing 15.8% growth of organic revenue (excluding impact from disposed businesses). Also in
2021, the Company achieved net profit of RMB 13.217 billion, representing an increase of 16.7% ascompared to 2020. Net profit attributable to the owner of the parent company was RMB 13.067 billion,
representing growth of 47.1% from 2020.

Realizing synergy due to integration with Haier Electronics: The Company's operational efficiency
has been enhanced. In 2021, selling expense ratio was 16.1% and administrative expense ratio was 4.6%,
representing optimization of 1.1 and 0.5 percentage points from 2020 on a comparable basis respectively.

High quality growth: In 2021, the Company's cash flow from operating activities was RMB 23.130
billion, representing increase of RMB 5.52 billion from 2020. Net cash flow from operation activities to
net profit was 1.75.

Efforts to grow overseas business yielding results: Overseas business achieved record-high revenue
and profitability: overseas revenue reached RMB 113.725 billion, a growth of 13% from 2020; operating
profit amounted to RMB 5.926 billion, an increase of 48.1% from 2020.

High-end brands achieved rapid growth: (1) In China, Casarte’s sales revenue crossed RMB 10 billion
mark and reached RMB 12.9 billion, representing a year-on-year increase of more than 40%. (2) In
United States, our high-end brands Monogram, Café and GE Profile achieved over 40% growth rate.

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Alignment of management and shareholder interests: We for the first time established a global
management and employee equity incentive scheme based on the Haier Smart Home listed company
incentive platform, which comprised incentive tools such as restricted stock units and options. These
performance-based schemes further align interests of our management and shareholders.

Sustainable long-term development: The Fortune Magazine published the Fortune Global 500 in 2021.
Haier Smart Home was featured once again, moving up 30 places from 2020. In 2022, Fortune Magazine
named Haier Smart Home as one of the 2022 World’s Most Admired Companies. The Company was the
only company outside the United States listed in the Home Equipment and Furnishings category.

Harmonious employee relations: Haier Smart Home has strived to protect the health and safety of ouremployees in areas affected by COVID-19, while maintaining our pledge to deliver quality service tocustomers. In China, being Haier Smart Home’s home market, not a single employee’s living or healthsuffered due to the pandemic. In the United States, the largest overseas market of our company, GE
Appliances was among the top 20 in the 2021 list of Healthiest 100 Workplaces in America and came
second as The Employers with the Healthiest Work Environment of Kentucky in 2021.

Remarkable results in technological progress: Haier Smart Home Air Conditioning, together withother R&D institutes, won the “National Award for Science and Technology Progress Second Grade”
prize in November 2021 for the development of the “Theory of Building Thermal Environment andrelated Key Technologies for Green Construction”. As China’s most acclaimed technology award, theNational Award for Science and Technology Progress recognizes major technological breakthroughs andcreative contributions by Chinese people and organizations in various fields.

According to the ‘2021 Global Smart Home Invention Patent Top100’ released by IPRdaily, Haier
Smart Home occupied the first place with 4,535 published patent applications in 2021. In the same year,
GEA was named the ‘Smart Home Appliance Company of the Year’ by IoT Breakthrough for the fourthconsecutive year in the United States.

Growth Opportunities and strategic initiatives

Achievements of 2021 is behind us. In 2022, we may face challenges such as declining demand in
China’s real estate market, elevated international shipping costs and high commodity prices. However,
the Company will remain proactive and fully committed to achieving rapid growth in 2022, with growth
coming from capturing leadership positions in categories with high growth potential, as well as from5/366

Haier Smart Home Co., Ltd. 2021 Annual Reportinnovating service models and creating new revenue stream surrounding Haier Smart Home's loyal userbase.

The Company currently operates three main categories of products – 1) major home appliances
including refrigerators, washing machines, kitchen appliances; 2) heating, ventilation, and air
conditioning (HVAC) category including air conditioners, water heaters and water purifiers; and 3) small
home appliances. Consumer preference and technological trends relating to these three categories aredifferent. At this stage, Haier Smart Home’s market positions and competitive edge also vary in thesethree areas. However, we will assemble all necessary resources, including talents and funds, to tackle ourweakness and support high-quality sustainable development in the next three years.

Since the outbreak of the pandemic in 2020, consumers’ expectations for home living experience
have become higher and higher. Their demand for better health, food freshness preservation, nutrition
and IoT have ceaselessly propelled the innovation of kitchen appliances. In 2021, the unit price ofrefrigerator and kitchen appliances has recorded material surge, exhibiting an increasingly obvious trend
in product upgrade. Haier Smart Home’s comprehensive brand portfolio and proactive innovation basedon consumer insights have allowed us to deliver more competitive refrigerators and kitchen appliances,
thereby to achieving growth rate double that of the worldwide industry. Global R&D platform of Haier’s
refrigerator has provided support to the rapid growth of refrigerators in the European and Australianmarkets, while the solid competitive edge of GEA and FPA kitchen appliances have continuously
strengthened the competitiveness of kitchen appliances in the China market. All of these demonstrate
Haier Smart Home’s competitive edge in global product R&D and operation system.

In terms of clothing caring, the Company's product range and technologies portfolio are a long way
ahead of our competitors. High-end products such as the Twin two-in-one washing and drying machine
have been highly recognized by the market, which enabled us to cement a leading position in the market
segment. Great user reputation and strong R&D capabilities of Haier’s washing machine have enabled
us to make breakthrough in the dryer market in China in 2021, recording a revenue increase of 203% andtopping the industry in terms of market share. In the United States, the sales volume of large volume
front-loads washing machine which was created with our integrated global R&D resources has reached
550,000 units in 2021, representing growth exceeding 30% as compared to 2020.

Having established a leading market position in the categories of kitchen taste and clothing caring,
Haier Smart Home’s plan for the next three years is to further expand our leading edge, increase ourmarket share and profit margins in various markets around the globe.

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For the HVAC and water appliances businesses, such categories require professional interior finish
and have a longer product cycle. The core competitive elements lie in whole supply chain costcompetitiveness and technical consistency, as well as support by professional channel. In 2021, theCompany achieved a market share of over 40% for electric water heaters, and the revenue of gas water
heaters recorded a year-on-year increase of 51%. We have also gained further market share in the highly
fragmented gas water heater market. Consistent investments in combustion technology, sterilizationmaterials and energy efficiency technology have enabled us to have the largest market share in water
heater business in China. In the United States, GEA's water heater plant in South Carolina is also going
to deliver high-quality gas water heater products to American consumers.

The Company came in third place in China’s domestic air conditioning market, with market share
increased by more than 2 percentage points in 2021. In the commercial air conditioning market, with ourmagnetic bearing compressor technology solution which has the technological advantages of highenergy efficiency, low operating costs and minimal noise, we have achieved 50% market share in thissub-segment. In 2022, the Company will ramp up investments in the core components of the air
conditioning industry and develop distributor channels in collaboration with other internal businesses
such as the water heater business, so as to realize large-scale and high-quality development of our air
conditioning business.

After preparation of half year, we announced in late 2021 the investment plan for launching a small
home appliance business division to further invest in emerging categories of home appliances, such as
cleaning appliances, small kitchen appliances, and personal care gadgets. The small home applianceindustry is having three favorable growth drivers – technological upgrade, smart interconnection, andinnovative experience. It is also becoming an industry with a global integrated supply chain, withmajority of production based in China. Meanwhile, small home appliances are becoming smarter. For
example, in the field of vacuuming robots, sensors, scenarios, and interactions produce wealth of data,
which enable replacement of manual labor by automatic cleaning. The merge of innovative experience
with technological breakthrough has redefined a new market for automatic vacuuming robots andautomatic floor cleaners, ushering the industry into a stage of rapid growth.

Through focused investment in categories with high growth potential, I believe Haier Smart Homecan become one of the key players in the thriving small home appliance market. This business line may
potentially contribute 10% of the Company's revenue in the next three years and can become a crucialpart of Haier Smart Home’s smart home scenarios. The development of small home appliance businesswill ride on Haier’s brand strength, global scale, in-depth user insight and product definition capabilities,
and will take the form of a jointly built ecosystem alliance, accelerating its development throughcollaborations. Haier Smart Home will make full use of China’s ample manufacturing capacity of small

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home appliances and pull together global technological resources to provide users around the world withhealthy, smart, and joyful consumption experience with small home appliances.

Haier Smart Home will fully leverage the benefits of globalization. In China, we intend to further
capture growth opportunities arising from market consolidation in all categories. In the United States,
strong momentum in the real estate market and infrastructure construction will power home applianceconsumption. In Europe and other markets, we have great potential to increase market shares in various
product categories.

Executional Enablers：Leverage strength and attack weakness

Growth does not appear out of nowhere. The realization of growth depends on the resolute pursuitof the Company’s mission by all Haier makers as well as our forward-looking and sustainable businessmodel. As a Fortune Global 500 company, Haier Smart Home is always ambitious. Our culture andmanagement system encourage all management staff and employees to push through their own limits
and take on challenges. Merely following market average growth demonstrates incompetence.

In 2022 and years to come, we may still live in an era when human co-exists with COVID-19 andglobal macro-economic environment becomes more volatile. The pandemic has had a significant impact
on the home appliance industry. It has changed the operating environment of enterprises, people’s modeof working, and consumers’ shopping patterns. It has also accelerated technology advancement andapplication of information technology, and digitalization reshaped operation model of businesses.
Enterprises that strive to adapt to this environment will become more resilient and capable of gaining thetrust of broader users. Meanwhile, shareholders, employees, customers, communities and governments
in both China and other regions expect enterprises to shoulder more social responsibilities and promotesustainable economic development. In my opinion, by adhering to our strategies of global brand creation,
localized operations, hyper-focus on user experience, and persisting in process reengineering bydigitalization, Haier Smart Home will become more resilient in coping with challenges due to volatileeconomic climate, while paving a solid foundation for sustainable growth.

Haier has implemented localized operations in major markets around the world with majority of
products sold in regional markets coming from local production with the dedication of local employees
and by encouraging continued investment in local communities. For larger markets such as the UnitedStates, Japan, and India, we are widely recognized as a local corporate citizen who have made significant
contribution to the respective local economy. GE Appliances, a wholly owned subsidiary of Haier in the
United States, has been the largest investor in the local United States appliance industry for the past five

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years. Since Haier's acquisition of GE Appliances, we have supported its expansion of local supply chain,built new factory, and increased local investment. In the past five years, 3,000 new jobs have been createdwith new investment exceeding USD 2 billion. By bringing Haier's local brands closer to consumers andintegrating them into the local community, while taking advantage of the parent company's technologicaland operating platforms, such a business model will help us avoid adverse impacts such as trade barriers
and obtain more sustainable competitive advantages.

Haier Smart Home has implemented a global high-end brand creation strategy and strives to gaina prominent position in the high-end market. The reason why we maintain focus on the high-end market
is our belief that fulfilling the ultimate experience of consumers is the driving force of our Company's
progress. Home appliances are not only functional but could also be artistic, aesthetic, and technological.
For example, we have launched a zero-distance built-in refrigerator in line with the trend of home
appliance and home furnishing integration, and introduced novel product such as the "Zhongzihemei"(中子和美) laundry combo which can perform three functions of washing, drying and fabric caring

within one machine. High-end brand strategy also enables us to generate greater user value to offset theadverse impacts from commodity and labor costs.

The Company’s leading position in the field of major home appliances is not only attributed to its
market share, but also in its dedicated attention to customer experience, which creates one generation of
exquisite and amazing products after another. The key lies in the coordination between the systems of
product innovation and customer interaction. Since our establishment, we have been focusing on what
our customers desire, creating standards for quality and services in China. Consumers’ recognition isHaier’s achievement. Such value system is not merely slogan but has deeply fused into the ideology of
top management and front-line personnel. Going forward, more and more interactions will take place on
e-commerce channels and online communities. In addition to humanized face-to-face channels, we will
strengthen digital marketing and develop a big data interactive system for countless users.

Cloud computing, big data and IoT offer massive possibilities for more agile and intelligent
enterprise operations in the future, and Haier Smart Home should also evolve to adapt. In 2022, we will
strive to promote processes reengineering driven by digitalization and press forward with the
optimization of operational efficiency from digitalization of R&D and design, logistics and service
processes, and interconnected factories. Haier Smart Home’s key process reengineering project in 2022
aims to realize digitalization of inventory management in the entire end-to-end supply chain process andoptimize the allocation of working capital.

Entering 2022 with High Confidence

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Mainstream view of the market is that it will become increasingly difficult for leading enterprises
to maintain relatively high growth in a mature industry such as home appliances. But I am optimistic that
Haier Smart Home will enjoy unique growth opportunities. First, our strategic planning and corecompetencies are highly aligned, with the management of Haier Smart Home adhering to the originalvision of Haier’s first-generation entrepreneurs like never before. In other words, all Haier makers are topromise global consumers a wonderful home life beyond their imagination, and to become their mostreliable partner for designing and serving their home requirements and creating smart experiences.

Furthermore, technological advances are driving the home appliances industry to become anincreasingly imaginative sector. All Haier team members around the world expect to participate in andinfluence this historic process of innovation. Washing machine has first freed us from time constraints.
Large refrigerators not only keep our food fresh, but also save the need for frequent shopping trips, thenthere is the ideal air environment that we can enjoy. Coming up next, the integration of technology andscenarios will become a stronger driving force. Oven and pre-prepared meal enable consumers to enjoy
cuisine of master chef’s quality at home, and consumer robots will take care of cleaning and foodpreparation. Technology will enrich our lives in ways beyond our expectations, and it is inevitable that
consumers, whether in China, the United States or Europe, will love and embrace the excitement broughtby technologically advanced home appliances. Haier Smart Home’s mission is to elevate to a whole newlevel through creating products and innovating services, providing consumers iterative upgrades of
products and service experience that integrate technological innovation, personalized services, and smart
home scenarios.

In 2022, our established strategy will continue to be firmly implemented. Ahead of us is achallenging, long-term, and fruitful journey, while our ride to the future gives all of us at Haier a chance
to carry out our mission and contribute to the well-being of all stakeholders. Lastly, I would like to thankour users around the world for choosing Haier and all our shareholders for their trust in Haier SmartHome!

Chairman of Haier Smart Home Co., Ltd: Liang Haishan

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Section I Definitions
I. DEFINITIONS
Unless otherwise stated in the context, the following terms should have the following meanings in thisreport:Definition of frequently used terms
CSRC

China Securities Regulatory Commission

SSE

Shanghai Stock Exchange

The Company,

Haier Smart Home Co., Ltd., its original name is ‘Qingdao Haier Co.,

Haier Smart Home

Ltd.’, and the original short name is ‘Qingdao Haier’.

Four Major Securities

China Securities Journal, Shanghai Securities News, Securities

Newspapers

Times, Securities Daily
Haier Electronics Group Co., Ltd. (a company originally listed in Hong
Kong, stock code: 01169.HK), a subsidiary as accounted for in the

Haier Electrics, 1169

consolidated statement of the Company. Haier Electrics has been
privatized by way of H shares issuance on 23 December 2020 andbecame a wholly owned subsidiary of the Company since then.
GEA

GE Appliances, household appliances assets and business of General
Electric Group, have currently been owned by the Company.
Fisher & Paykel Appliances Holdings Limited (Chinese name:斐雪派克), was established in 1934 and is known as the national appliancebrand of New Zealand, the global top-level kitchen appliance brand
FPA

and the famous luxury brand of the world. It has products including
ventilator, gas stove, oven, dishwasher, microwave oven, built-in
freezer, washing machine, clothes dryer and etc. Its business covers
over 50 countries/regions across the world. FPA is a wholly-owned
subsidiary of the Company.
Candy Group (Candy S.p.A), is an international professional
appliances manufacturer from Italy. Since its establishment in 1945, it
has been committed to enabling the global users to enjoy a higher

Candy

quality of life through innovative technologies and quality services.
Candy Group has been prestigious in the global market with users allover the world via its ten self-owned professional household appliancebrands. In January 2019, Candy became a wholly-owned subsidiary of
the Company.
China Market Monitor Co., Ltd., as an authoritative market research

CMM

institute in Chinese household appliances area, was established in
1994 and has been focusing on research of retail sales in China
consumption market ever since.

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Euromonitor, established in 1972, is the leading strategic market
information supplier and has over 40-years of experience in respect ofEuromonitor

publishing market report, commercial reference data and on-line
database. They create data and analysis on thousands of products andservices around the world.
All View Cloud (AVC) is a big data integrated solution provider to the

All View Cloudsmart home field, providing enterprises with big data information
services, regular data information services and special data services.
The International Electrotechnical Commission, founded in 1906, isthe world’s first organization for the preparation and publication ofinternational electrotechnical standardization and is responsible forinternational standardization for electrical engineering and electronicengineering. The goals of the commission include: to effectively meetIEC

the needs of the global market; to ensure that the standards andconformity assessment programs are applied globally in a prioritizedmanner and to the greatest extent; to assess and improve the quality of
products and services involved in its standards; to create conditions forthe common use of complicated systems; to improve the effectivenessof the industrialization process; to improve human health and safety,
and to protect the environment.
The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information scienceengineers, is currently the largest non-profit professional technology
society in the world. It is committed to the development and researchIEEEof electrical, electronic, computer engineering and science-related
fields, and has now developed into an international academicorganization with great influence in terms of the fields of space,computer, telecommunications, biomedicine, power and consumer
electronics.
The concept of ‘Achieving win-win via RenDanHeYi’is the guaranteeof Haier's sustainable operation and the driving force of the Company
featuring a self-motivated and empowering corporate culture. “Ren” isModel ofan employee who has the spirit of entrepreneurship and innovation;

RenDanHeYi“Dan” is to create value for users. The " RenDanHeYi " management
model encourages employees to create value for users with anentrepreneurial mindset, and to achieve self-value in line with the thoseof the Company and its shareholders.

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Section II General Information of the Company and Key Financial Indicators
I. INFORMATION OF THE COMPANY
Chinese name
Chinese short nameEnglish name海尔智家股份有限公司
海尔智家
Haier Smart Home Co., Ltd.

English short nameHaier Smart Home

Legal representative

Liang Haishan

II. CONTACT PERSON AND CONTACT INFORMATION
Secretary to the Board

Representative ofsecurities affairs

Company
Secretary (D/H

Othersshares)GlobalName

Ming Guozhen

Liu Tao

Ng Chi Yin, Trevor

Customer

Service
HotlineDepartment of
Department of Securities of Securities of Haier

Room 3513, 35th

Haier Smart Home Co., Ltd., Smart Home Co., Ltd., Floor, The Center,

Address

Haier Information Industrial Haier Information

99 Queen’s Road

Park, No.1 Haier Road,

Industrial Park, No.1

Central, Central,

Qingdao City

Haier Road, Qingdao Hong Kong/City
4006 999

Tel

0532-88931670

0532-88931670+852 2169 0000

Fax

0532-88931689

0532-88931689+852 2169 0880

/

Email

finance@haier.com

finance@haier.com

ir@haier.hk/

999

III. SUMMARY OF THE GENERAL INFORMATION
Registered Address
Historical Changes to the Registered
Address

Business address
Postal code of the business address
WebsiteHaier Industrial Park, Laoshan District, Qingdao City
Prior to the Company’s listing in 1993, the registeredaddress of the Company was No.165 Xiaobaigan Road,
Sifang District, Qingdao City, Shandong Province, andhas changed to the current address since 1994, during
which the address name was adjusted in line with thechange of name of the industrial park but the actual siteremains unchanged.
Haier Information Industrial Park, Laoshan District,
Qingdao City
266101
https://smart-home.haier.com/cn/

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Email9999@haier.com

IV. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT
Newspapers and websites for annual
report disclosure
Stock Exchange Website for annual
report disclosure as designated by the
CSRC
Other websites for annual reportdisclosure
Deposit place of annual report

Shanghai Securities News, Securities Times, China Securities
Journal, Securities Dailywww.sse.com.cn，，

https://smart-home.haier.com/cn/ www.xetra.com
www.dgap.de https://www.hkexnews.hk
Department of Securities of Haier Smart Home Co., Ltd.,
Haier Information Industrial Park, No.1 Haier Road, Qingdao
City，

V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY
Summarized information of shares of the Company
Type of Shares
A-sharesD-sharesH-shares

Stock Exchangeof Shares Listed
Shanghai Stock
ExchangeFrankfurt Stock
Exchange
Hong Kong Stock
Exchange

Stock Short Name

Stock Code

Stock Short Name
Before Variation

Haier Smart Home

600690

Qingdao Haier

Haier Smart Home

690D

Qingdao Haier

Haier Smart Home

6690

/

VI. OTHER RELATED INFORMATION
Name
Accounting firm
engaged by theBusiness AddressCompany(domestic)

Name of signing

Hexin Certified Public Accountants LLP
24th Floor, Century Building, No.39 Donghai Road
West, Qingdao City
Zhao Bo, Wang Lin

accountant
Name
Accounting firm
engaged by the

31st Floor, Gloucester Tower, The Landmark, 11
Business addressCompany(overseas)

HLB Hodgson Impey Cheng Limited

Pedder Street, Central, Hong Kong Special
Administrative Region

Name of signingJack, Tian Sun Kit

accountant
Financial Advisor
responsible forcontinuing

Name
Business Addresssupervision

Name of signingduring thefinancial advisors

reporting period

Period of continuing

Zheshang Securities Co.,Ltd.
No. 201, Wuxing Road, Jianggan District, Hangzhou
City, Zhejiang Province
Yu Qichao, Wang Jian
23 December 2020 to 31 December 2021

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Note:(1) Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for
the appointment of an auditor approved at the Company's 2020 Annual Shareholders' Meeting, theCompany engaged Hexin Certified Public Accountants LLP and HLB Hodgson Impey Cheng Limited
to issue the China Accounting Standards and International Accounting Standards auditing reportrespectively for the Company’s 2021 annual report.
(2) The financial advisor is responsible for continuing supervision: The H shares of the Company
were listed and traded on the Main Board of The Stock Exchange of Hong Kong Limited on 23
December, 2020. In accordance with the relevant requirements of the Material Assets Reorganization,
as the independent financial advisor for the issue, Zheshang Securities Co., Ltd. performs continuous
supervision duties for the remainder of the year in which the H shares of the Company are listed and
one full fiscal year thereafter. In addition, the Company has engaged Anglo Chinese Financial Advisors
Limited (Address: 40th Floor, Exchange Square Phase 2, 8 Connaught Place, Central, Hong Kong;
Sponsor: Stephen Clark) as a compliance advisor in accordance with the requirements of the Hong
Kong Rules, which performs continuous supervision duties during the continuous supervision period(for the remainder of the year in which the H shares are listed and one full financial year thereafter).

VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE RECENT THREE
YEARS(I) Key accounting data
Unit and Currency: RMB
Key accounting
data

2020
2021

Beforeadjustment
227,556,143,618.17 209,723,430,081.03 209,725,821,099.44
After adjustment

Operating revenue
Net profit
attributable toshareholders of thelisted company
Net profit after
deduction of nonrecurring profit orloss attributable toshareholders of thelisted company
Net cash flows
from operating
activities2019

8.50 200,761,983,256.57

13,067,038,271.85

8,883,129,055.16

8,876,593,208.19

47.10

8,206,247,105.96

11,831,272,558.29

6,457,813,335.37

6,457,813,335.37

83.21

5,765,164,700.75

23,129,640,417.72

17,609,513,831.64

17,599,111,715.51

31.35

15,082,630,942.73

At the end of
2021
Net assets

Yoychange(%)

79,810,927,325.55

At the end of2020

After adjustment
66,837,525,701.87

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Beforeadjustment
66,816,422,614.55

Yoychange(%)

19.41

At the end of
2019

47,888,319,765.92

Haier Smart Home Co., Ltd. 2021 Annual Reportattributable toshareholders of thelisted company
Total assets

217,459,494,212.74 203,498,169,276.71 203,459,495,879.65

6.86 187,454,236,283.17(II) Key financial indicators

2020
Key financial indicators

2021

Basic earnings per
share(RMB/share)
Diluted earnings per share(RMB/share)
Basic earnings per shareafter deducting nonrecurring profit or loss
(RMB/share)
Weighted average return on
net assets (%)
Weighted average return on
net assets after deducting
non- recurring profit or loss(%)

Yoychange
(%)

2019

After
adjustment

Beforeadjustment

1.41

1.34

1.34

5.22

1.29

1.40

1.31

1.31

6.87

1.19

1.27

0.97

0.97

30.93

0.90

17.29

17.68

17.67

-0.39

19.12

15.65

12.85

12.85

2.80

13.43

Explanation of the key accounting data and financial indicators of the Company as at the end of thereporting period for the previous three years□ Applicable√ Not applicable

VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS
ACCOUNTING STANDARDS(I) Differences in net profit and net asset attributable to shareholders of listed company in financial
report disclosed in accordance with International Accounting Standards and China AccountingStandards□ Applicable √ Not applicable
There is no difference between the net profit and net assets attributable to shareholders of the listedcompany presented in the consolidated financial statements disclosed in accordance with International
Accounting Standards and China Accounting Standards.

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Haier Smart Home Co., Ltd. 2021 Annual Report(II) Differences in net profit and net asset attributable to shareholders of the listed company infinancial statements disclosed in accordance with overseas accounting standards and China
Accounting Standards□ Applicable √ Not applicable
Apart from the financial statements prepared in accordance with International Accounting Standards,
the Company did not prepared any financial statements in accordance with other overseas accounting
standards.
(III)

Explanation on the difference between the domestic and overseas accounting standards:□ Applicable √ Not applicable

IX. KEY FINANCIAL DATA OF 2021 BY QUARTER
Unit and Currency: RMB
Q3
Q1

Q2

Q4
(July-(January-March)(April-June)(October-December)
September)Operating revenue

54,773,701,753.64

56,845,120,311.09

58,344,749,484.03

57,592,572,069.41

3,053,933,589.63

3,798,338,223.34

3,082,339,695.41

3,132,426,763.47

2,823,027,182.06

3,446,879,224.66

2,785,809,654.46

2,775,556,497.11

2,863,386,935.66

5,560,436,791.23

4,935,460,348.29

9,770,356,342.54

Net profit attributable toshareholders of the listed
Company
Net profit after deduction of
non-recurring profit or loss
attributable to shareholders of
the listed Company

Net cash flows from operating
activities

Explanation on the difference between quarterly data and disclosed regular reporting data
□ Applicable √ Not ApplicableX.

NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT

Non-recurring profit and loss items

Amount in 2021

Profit and loss from disposal of non-current assets

95,443,538.78

Government subsidies included in current profit or loss, except for government

717,084,575.78

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Haier Smart Home Co., Ltd. 2021 Annual Reportsubsidies that are closely related to the Company's normal business operations,comply with national policies and regulations, and continue to be enjoyed in a
fixed amount or fixed quantity according to certain standards
Net profit and loss of subsidiaries arising from business combinations undercommon control of the current period from the beginning of the period to the-1,015,618.64

date of consolidation
Profit and loss from fair value changes of financial assets held for trading,derivative financial assets, financial liabilities held for trading and derivative
financial liabilities, as well as investment gains arising from disposal of
financial assets held for trading, derivative financial assets, financial liabilities

512,402,328.52

held for trading and derivative financial liabilities and other debt investments,
except the effective hedging related to the normal operations of the Company
Other non-operating income and expenses except the aforementioned items

60,282,401.05

reduction: Effect of income tax

135,105,480.15
13,326,031.78

Effect of minority equity interest (After Tax)

1,235,765,713.56

Total

XI.

ITEMS MEASURED BY FAIR VALUE√ Applicable □ Not Applicable
Unit and Currency: RMB
Affected amount toChanges in the
Items

Opening balance

Closing balance

profit of current
current period
periodForward foreign-58,007,371.41

142,380,197.33

200,387,568.74

439,056,947.32

1,862,036,322.21

2,168,622,090.00

306,585,767.79

60,499,015.46

83,949,637.05

330,557,610.82

246,607,973.77

46,729,587.36-50,886,744.60-19,684,900.48

31,201,844.12

Investment funds

113,759,845.57

150,516,274.37

36,756,428.80

18,097,485.77

Investment in other

2,659,025,265.54

4,848,709,438.96

2,189,684,173.42

58,558,795.05

currency contract
Wealthmanagement
products
Investment intrading equity
instruments
Interest rate swap
agreement

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Haier Smart Home Co., Ltd. 2021 Annual Reportequityinstruments
Forwardcommodity

25,644,774.08

6,997,783.42

46,832,494.61

46,832,494.61

4,682,354,223.05

7,674,930,989.03-18,646,990.66

contract
Other derivative
financial
instruments
Total

XII.

Others□ Applicable √Not Applicable

19/3662,992,576,765.98

622,941,830.96

Haier Smart Home Co., Ltd. 2021 Annual Report

Section III Management Discussion and Analysis

I.

DISCUSSION AND ANALYSIS ON OPERATIONSIn 2021, the Company realized sales revenue of RMB227.556 billion, representing an increase of

8.5% from 2020 and an increase of 13.3% from 2019. The Company disposed COSMOPlat in the third
quarter of 2020 and RRS Logistics in the third quarter of 2019. Excluding the impact from the disposal,
the Company's revenue growth in 2021 would have been 15.8% and 23.4% as compared to 2020 and2019 respectively. Robust performance was driven by (1) strengthened high-end market leadership andenhanced competitiveness in products and scenario-based solutions, while (2) accelerated global
coordination and growing online presence were vital to the expansion overseas, and (3) we also benefited
from continued distribution network expansion & increase in operation efficiency via end-to-end digitaltransformation.
In 2021, the Company achieved net profit of RMB13.217 billion, an increase of 16.7% from 2020,
and an increase of 7.2% from 2019. Net profit attributable to the owner of the parent Company was
RMB13.067 billion, an increase of 47.1% from 2020 and an increase of 59.2% from 2019. (1)Facedwith escalating raw material and components costs, the Company still managed to expand gross profit
margin by 1.6 percentage points to 31.2% by leveraging on strong high-end revenue, efficiency initiatives
and disposal of low margin businesses. (2) Selling expense ratio was 16.1% and administrative expense
ratio was 4.6%. Excluding revenue of COSMOPlat in 2020, selling and administrative expense ratio in
2021 would have decreased by 1.1 and 0.5 percentage points respectively as compared to 2020 (including
COMSOPlat, selling expense ratio was 16.0% and administrative expense ratio was 4.8% in 2020). The
cost reduction was mainly due to continuous digital transformation in the Chinese market, rapid growthoverseas and improvement in operational efficiency. (3) Financial expense ratio reduced by 0.3
percentage points to 0.3%, this was mainly due to CB conversion, loan repayments and replacement ofhigh interest borrowings.
The Company's net cash flow from operating activities in 2021 was RMB 23.13billion, an increaseof RMB 5.52 billion from 2020 and an increase of RMB 8.047 billion from 2019, the growth was
attributable to greater profitability and enhanced efficiency. Net cash flow to net profit ratio was 1.75
during the reporting period.

（I）Smart Home Business in China
In 2021, sales revenue from smart home business in China amounted to RMB 120.791 billion,
representing an increase of 22.2% from 2020. Operating profit grew by 27.5% to RMB 7.456 billion.
The growth was attributable to increase in market share and 40% revenue growth of Casarte brand as
well as distribution network expansion, accelerated digitalization and improved operational efficiency.

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Haier Smart Home Co., Ltd. 2021 Annual Report

1. Household Food Storage and Cooking Solutions (Internet of Food)(1) Refrigerator and Freezer BusinessIn 2021, refrigerator business achieved sales revenue of RMB 41.743 billion, a year-on-yearincrease of 21.4%. According to CMM, Haier’s market share increased by 2.1 percentage points to 41.3%
offline; and market share online went up by 2.7 percentage points to 37.8%.
The refrigeration industry has entered into the next stage of development where volume starts tostabilize and growth driven primarily replacement demand.Users continue to look for larger storage
space with better preservation technologies, so we doubled the drawer space by moving the refrigeration
units from the back of machine to the bottom, we also introduced new hinge system to create the ultimate
seamless appearance, Casarte’s BCD-600 was an instant best seller contributing to the our market sharereaching 46.7%, in other words, up 2.8 percentage points in units priced above RMB 10,000; Casarte
also made breakthrough on ecommerce platforms where 30,000 units were sold during 618 Festival on
JD.com, the launch of Homey 505 and 506 series put us in no.1 in units priced above RMB 10,000 online.
Refrigerator business invests more in quality control, supply chain management and digitaltransformation. During the reporting period, the Company implemented Super Factory Project targeting
capacity maximization, SKU concentration, global coordination and cost optimization, and we also
introduced 3A Engineers Programme and trained 100 cost management specialists.
In addition, enhanced competitiveness of large capacity T-door and French-style refrigerators
contributed to rapid growth in export revenue of units priced over US$1,000 and €1,000.
(2) Kitchen Appliance BusinessIn 2021, revenue of kitchen appliance segment reached RMB 3.496 billion, an increase of 26.1%
year-on-year, amongst which, Casarte’s revenue surged 95.1%, and its revenue contribution increasedby 7.4 percentage points to 22%. According to CMM, the Company’s market share grew 1.1 percentage
points offline to 7.1% and stayed flat at 5.2% online..
The Company remained committed to implementing high-end brand strategy with fast productpipelines, introducing kitchen solution packages and improving store experience, while actively
developed partners from home improvement markets.
Meanwhile, dedicated effort was made to promote global coordination. R&D team in China worked
closely with FPA and GEA to develop new motor control technology that could deliver constant volume
of air flow using big data and algorithms. The new 12- square range hood could sense pressure, unclog
pipe and prevent blockage, the Five Ring stove could heat up the entire pan surface to the same
temperature, and built-in steamer ovens led the industry in revenue growth with 300℃heating

temperature, precise control and dual water circulation system. Casarte's Asian style built-in dishwashers
were equipped with 7X cleaning system to provide 360° water coverage at 70°C for effective grease
removal. In 2021, dishwasher sales revenue grew 90% while Casarte’s dishwasher grew by 137.9%.

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Haier Smart Home Co., Ltd. 2021 Annual Report

During the reporting period, kitchen appliances segment prioritized efficiency improvement andcost reductions in equipment, quality and production, realizing 35% increase in production capacity on
pre-processing lines without additional manpower. The Company gradually increased the proportion ofself-manufactured large metal parts in range hoods, stoves and ovens to 100%, contributing to increased
profitability.
(3) Internet of Food: integration of appliance and services to add value
Based on Smart Home cloud platform and Three-Winged Bird smart kitchen scenarios, the Internetof Food integrated smart oven, digital cooking program and standardized pre-prepared dishes to provide
users with brand new experience where they can buy grocery from the oven screen and recreate master
chef’s dishes at home with just a simple click. Together with partners including Mengniu and Shuanghui,
the Company launched the industry’s first IoT-based platform specializing in pre-prepared dishes, sincethen, a total of 387,000 roast ducks and 200,000 sets of Chinese New Year dinner have been sold,realizing a 67% growth year-on-year. New application scenarios featuring B&Bs and offices were also
created.

2. Household Laundry Management Solutions (Internet of Clothing)(1) Washing machine business
During the reporting period, the Company's washing machine business achieved sales revenue of
RMB 30.658 billion, representing a year-on-year increase of 18.0%. According to CMM, the Company’smarket share reached 43.1% offline, up 2.9 percentage points while market share grew by 0.5 percentage
points to 40.4% online.
In 2021, the Company consolidated high end leadership through continued innovation and captured
growth opportunities from new categories with Casarte’s Zhongzihemei (中子和美)washer & dryer

combo, whose market share grew to 96.5% in top washer + bottom dryer category. The Company’s
tumble dryer revenue grew by 203% and led the market with 32.9% share offline and 24.5% shares online,
growth of 14.8 percentage points offline and 5.8 percentage points online respectively.
Despite pandemic resurgence, shipping constraints, rising commodity prices and currency fluctuation,
the Company remained committed to brand premiumization and mix upgrade in order to maintain solid
growth overseas.
(2) Internet of Clothing
The Internet of Clothing business started from simple washing machines, now it offers a full cycleof smart scenario solutions including washing, fabric storages, and styling, During the reporting period,in order to tackle stubborn stains, residual detergent and fabric discolouration, together with leading
detergent manufacturers, the Internet of Clothing team introduced washing machines featuring ink
cartridge type detergent dispenser in an attempt to create brand new experience of healthy and smart
colour care, a total of 160,000 units were sold in 2021.

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Haier Smart Home Co., Ltd. 2021 Annual Report

3. Air Solutions
During the reporting period, the overall air conditioning business achieved sales revenue of RMB
32.193 billion, an increase of 26.2% from 2020.
(1) Home air conditioning business
The Company adopted an efficient retail model and strived to breakthrough in the mid-to high-end
air conditioning market. We continued to accelerate channel integration, network expansion and scenario
experience upgrade. According to CMM, the Company’s market share increased 2.5 percentage points
to 16.8% offline in 2021, while the share online increased 2.4 percentage points to 13.6%. Meanwhile,share in the high-end market (wall-mounted units priced above RMB 4,000 and standing units priced
above RMB 10,000) reached 20.2%, an increase of 5.2 percentage points.
By leveraging on multi-brand portfolio and strengthening technological innovation, the Company
filed 2,597 patents in 2021. (1) Casarte launched Galaxy series equipped with the industry's first fullspace constant-temperature air technology that enabled 360° coverage and speedy temperatureadjustment, contributing to the brand’s 56.7 % revenue growth. (2) Inspired by high-speed engines fromaviation industry, Haier launched air conditioners that could cleanse air at home with high-speed
centrifugal waterfall and multi-layer water spray technologies.(3) The household multi-split units
specialized in customized solutions for different user scenarios in the bedroom, kitchen and the basement,
providing users with fresh and healthy air at home.
During the reporting period, 620 new franchise stores specializing in air solutions were developedwith particular efforts made to increase presence in HVAC channels, the Company also capture the new
growth opportunities in lower-tier markets with the addition of 30,000 village sales outlets.
The export revenue maintained steady growth driven by speedy product iterations including healthboosting air conditioner equipped with a LED-UVC module, Texcell in France verified its 99.998%

inhibitory effect on the novel coronavirus. Featuring a separated air supply system, the new ‘X’split-type air conditioner could be disassembled in 28 seconds, making cleaning and maintenance mucheasier, and this was recognized by SGS with the Easy-to-Clean 5-star rating certificate.
In addition, efficiency of product platform increased by 20% driven by greater production
concentration and manufacturing optimization, while specialized design, installation and service network
was fundamental to drive strong growth online.
(2) Commercial air conditioning business
The Company accelerated development of user-oriented scenario solutions. According to China IoL,
the Company's market share increased 0.9 percentage points to 10.7% offline in 2021.
Commercial air conditioner focused on product and technology innovations in IoT applications,alternative source of energy and refrigerant. 1. IoT based multi-splits units received wide market
recognition from National Speed Skating Oval and projects in Shigatse prefecture of Tibet for remarkable23/366

Haier Smart Home Co., Ltd. 2021 Annual Reportenergy-saving performance and advanced warning system. 2. With 50% market share (informationfrom China IoL), the Company has been leading the industry in maglev air conditioners since its first
introduction in 2006. Our latest energy efficiency, low-cost and low-noise maglev chiller was
widely used in projects including National Supercomputing Centre, Business Service Centre in Xiong ’an,Underground Line 4 in Chongqing, People's Hospital in Shenzhen, and Shandong Energy Group. 3. The
Company was the first in the industry to introduce full-spectrum air conditioning unit which was widelyused in scenarios with complications such as hospitals in-patient wards, emergency rooms, operating
theatres and negative pressure isolation wards. This technology was also chosen by excavation site ofSanxingdui for air disinfection and micro management of temperature and humidity level.

4. Household Water Solutions
The water heater and water purifier businesses achieved breakthrough with high-end differentiatedproducts in 2021 as revenue amounted to RMB 12.701 billion, a year-on-year growth of 24.3%.
(1) Water heaters
During the reporting period, the Company’s water heater business focused on providing safe,

and smart household water solutions. According to CMM, our market share grew 3.5 percentage
points to 28.1% offline and market share online amounted to 30.7%, with a rise of 3.4 percentage points
year-on-year. Revenue of Casarte water heaters grew 42.4%, with market share increase of 4.1
percentage points.

Gas water heater revenue grew by 51% leveraging on innovations in technology andexpansion in distribution network.

According to CMM, the Company's market share in electricwater heaters was 41.7% online and 40.2% offline, representing increases of 4.0 and 3.7 percentage
points year-on-year. We launched Casarte Crystal Tank Galaxy series - the industry’s first water heater
without magnesium rod, significantly reduce limescale, leakage, rust and corrosions. Casarte’s revenue
was 1.8 times the runner-up in unit priced above RMB 8,000, partly driven by the best-selling mineralsprings bath specifically designed for skin care.
During the reporting period, the Company’s gas water heater achieved 51% revenue growth.
According to CMM, our market share grew 4.3 percentage points to 20.6% online, while market sharewent up by 4.1 percentage points reaching 19.7% offline. The rapid growth was attributable to innovation
including gas-electric hybrid technology with optimal energy usages, contributing to our no.1 position
in water heater units priced RMB 8,000-10,000; dedicated efforts were made to enhance presence inhome improvement channels and building material markets while developing partnerships with interior
designers to capture growth opportunities from new houses and HVAC channels.
During the reporting period, Haier's air-powered heat pump water heater accelerated R&D ofhealth-oriented products specializing in high water temperature and water disinfection and we continued

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Haier Smart Home Co., Ltd. 2021 Annual Reportto lead the industry with market share of 64% offline and 58% online respectively; the Company also
made breakthrough by developing 7 out of 10 best-selling units priced above RMB 10,000.
(2) Water purifiers
The Company's market share in 2021 reached 11.6% offline1, realizing an increase of 1.7 percentage
points year-on-year, while ranking moved up by one place to number four.
During the reporting period, the Company adopted innovative RO+ mineral water system whichfacilitates Casarte’s Yunzun (雲鱒) series in providing strontium-rich water solutions.

Supply chain capability was enhanced with the ramping up of new smart water purifier factory in
April, since then the Company has been manufacturing its own filter, water circuit board and moulding
modules, laying down solid foundations for future growth.
5. Strengthening network presence to expand user base; leveraging Casarte's leadership toincrease user value
During the reporting period, the Company adhered to retail transformation, network expansion anduser value enhancement leveraging on Casarte's high-end leadership. According to CMM, our overallmarket share in China grew 2.3 percentage points to 25.1%.
1. Unlock growth potential with sales network expansion and omni-channel integration
Together with new national and regional partners from home improvement providers andbuilding material industries, 723 sales outlets were added to capture increasing traffic in home
improvement stores; the Company also promoted community-based micro stores that could offer laundry
and appliance repair services at users’ doorstep, thus building long lasting relationship at zero distance,
making our products and services packages a natural choice when users are looking to replace an aging
refrigerator or renovating the entire kitchen. On the other hand, 78,000 part-time sales representatives
were developed in the rural markets in order to raise our profile and promote consumption upgrade, allof which increased our competitiveness, and contributed to revenue growth of over 20% in franchised
stores.
According to AVC, the Company led the industry with 28.8% growth online in 2021, during whichtime, the Company actively worked with new partners including TikTok and Kuaishou, to capture youngusers’ attention through innovative video clips and live streaming, this helped us become number one inmajor home appliance on TikTok with the largest the number of fans and GMV. Over 90 million users
were identified as brand interest population, and membership from flagship store online exceeded 30
million. In addition, 10,000 new sales outlets were added in lower-tier markets in order to boost traffic
and average ticket price.

1

Source: CMM

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Haier Smart Home Co., Ltd. 2021 Annual Report(2) Casarte maintained strong momentum with record revenue
After 16 years of development, Casarte has successfully established itself as a leading brand of
cutting-edge technologies, outstanding quality and sophisticated taste. In 2021, its revenue grew by over
40% reaching RMB 12.9 billion. It also had 73.9% market share of washing machines priced above RMB
10,000; 36.2% market share of refrigerators priced above RMB 10,000, and 30.3% market share of air
conditioners priced above RMB 15,000.
6. Three-Winged Bird scenario brand creates smart home solutions that integrate applianceswith home improvements to grow user value
Increasing user demand for scenario based home appliances solutions unlocks significant growthpotentials, thus Three-Winged Bird made particular effort to enhance its scenario solutions, grow 1+N
service capability and expand distribution network.
During the reporting period, 1,317 scenario-based stores were added, covering more than 1,100
building material markets in tier one and tier two cities, the Company also upgraded Three-Winged Bird
APP, for example, users could place orders online while tracking the progress of their new kitchen, the
new hassle-free experience during the entire project was only made possible with Haier’s commitment
to create standardized comprehensive service and fulfilment practices.
During the reporting period, Three-Winged Bird focus on promoting comprehensive solution

packages, sales volume of high-end sets grew 62%, with its contribution increased 10.6 percentage
points to 37%; and sales volume of smart sets grew 15%, and its contribution up 2 percentage points to17%.
7. Focusing on the development of a user-centred digital enterprise, the Company promoted
whole-process digital transformation to build a highly-efficient operation system.
In 2021, the Company focused on accelerating end-to-end digitalization in order to improve theexperience of distributors and users while enhancing internal operational efficiency. On one hand, theentire user interaction process was consolidated on smart operating platform which then facilitated user
identification, interaction and maintenance throughout the life cycle. As a result, registered user increasedby 31 million to 204 million during the reporting period. On the other hand, greater efforts were made to
speed up the transition from ‘managing distributors’ to ‘helping distributors managing user data’. Online
contract system was launched to shorten the time required from new distributions when opening accounts
and developing stores, they also had digital tools to manage membership, logistics and services; sales
representatives were also able to promote products and maintain close user interaction through digital
middle platform, this resulted in 12.5% increase in average ticket size. In addition, 99% of personnel
managed their services online.
(2) The Company enhanced operational efficiency and user experience by digitalization in production
planning, inventory and operation management. 50% of the factories were capable of applying advanced

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Haier Smart Home Co., Ltd. 2021 Annual Reportalgorithms and optimize turnovers, decision making significantly reduced to enhance flexibility inproduction; physical boundaries removed with virtual management of inventory and services for optimaluser experience and enhanced efficiency
8. Promoting the continuous upgrading of intelligent manufacturing
By the end of 2021, the Company has built 18 smart factories. Haier’s third light house factory --Tianjin Washing Machine Smart Factory was recognized as the industry's first end-to-end lighthousefactory in 2021 for precision in capturing user demand, flexible and efficient logistics and distribution
system, and low-carbon energy management system.
The Company remained committed to integrating new-generation information technologies of 5G,
artificial intelligence and digital twin with smart manufacturing, and was selected twice in a row by the
Ministry of Industry and Information Technology as ‘5G+ Industrial Internet’ model application
scenarios. In September 2021, the Sino-German washing machine factory, the central air conditioning
factory, Hefei refrigerator and washing machine factory passed the WEF Smart Industry Readiness Index(SIRI) assessment and were chosen to represent home appliance industry in the ‘Smart Industry
Readiness Index Certification White Paper’. In December, the Sino-German washing machine factory
received 2021 Asia Communication Awards in recognition of its efforts in combining smart
manufacturing with 5G+MEC,(II) Overseas home appliances and smart home businesses
During the reporting period, the Company delivered record revenue and profit from overseas
business. Sales revenue reached RMB 113.725 billion, an increase of 13.0%; operating profit amounted
to RMB 5.926 billion, a rise of 48.1%; operating profit margin reached 5.2%, a growth of 1.2 percentage
points from 2020.
The robust revenue and profit margin growth were attributable to fulfilling the needs of different
user groups with multiple brand portfolio, and continued iteration of user experience with innovative
products, where the proportion of high-end sales in the North America grew 2.6 percentage points, andthe proportion of high-end sales in Europe rose 5 percentage points. By using digital marketing tools, theCompany was able to seize the growth opportunities online while enhancing global supply chain
capabilities to boost manufacturing efficiency. In 2021, the refrigerator factory in Romania, the air
conditioning factory in Egypt, and the washing machine factory in India were put into production. In
addition, leveraging on global integration and collaboration, the Company managed to reduce the cost
impact from port congestion and chip shortages with initiatives including joint negotiations, resource
allocation optimization and strategic procurement.

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Haier Smart Home Co., Ltd. 2021 Annual Report

1 The North American market
With dedicated efforts made by the entire team, the Company’s revenue reached a record level of
RMB 70.277 billion in the North American market, representing a growth of 10.3% in RMB and 18.0%
denominated in USD. The growth was driven by the Company’s effort in product, brand and channel
innovations, acceleration of new businesses, and supply chain upgrade.

Market share and profitability were reinforced with successful new product launches including large
multi-door refrigerators, large size front-load washing machines, tall tub dish washers, professional oven
ranges and Café Wine Cabinets, contributing to over 40% revenue growth from our high-end

Monogram, Café and GE Profile brands. Specialists in Air and Water Team worked closely withcolleagues in China, and won Marriott Hotel contract in Austin, Texas Airport with Haier MRV5 units;and DFS team signed serviced apartments project contract in Chicago. Small kitchen appliances revenue
doubled, driven by successful launches of several new series including Opal ice maker, which was named
Amazon’s Choice and Best sellers.
On the distribution front, the Company strengthened partnership with commitment and dedication.
We developed five new retail partners including Macy’s and were named Partner of the Year by Home
Depot, achieved steady revenue growth with buying groups, strengthened leadership in contractor
channel with double digit revenue growth; renewed contract with the largest property developer for
another three years; developed new partners from HVAC channel and established life style department
to cater for RV manufacturers. Revenue continued to double online in channels including Amazon. A
new zero distance channel was launched aiming to explore growth potential by creating seamless andwholesome service that can be rewarded with lifelong user loyalty. The Company started building
Stamford Co-Creation Centre in September 2021 and plans to finish construction by second half thisyear, by which time it will be the place for users to enjoy interactive, multi-dimensional and immersive
brand experience.
2. The European market
During the reporting period, the Company's European business achieved sales revenue of RMB
19.737 billion, an increase of 19.5% year-on-year.
In 2021, Haier brand continued to grow in price index and constantly outperformed the industry inmarket share growth. The Company also optimized its product mix, with the launch of a variety of highend refrigerators and the 979 series large-diameter washing machines, the latter became No. 1 best selleron Amazon Prime Day and Black Friday. In the meantime, the Company also accelerated online

growth, showcased high-end brand image and promoting brand stores and store-within-stores inGermany.

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Haier Smart Home Co., Ltd. 2021 Annual Report

In Romania, the Company completed the construction of the new factory which specializes inmanufacturing high end refrigerators and it is designed to facilitate speedy response to local market
demand.
In addition, breakthrough was also made in building scenario-based ecosystem. The number ofregistered users on hOn APP reached 4.5 million,
3. The Australian and New Zealand market
In Australia and New Zealand, the Company’s revenue grew by 17.3%, reaching 7.012 billion in
2021 and concentrated efforted continued to be made on product premiumization and network expansion.
During the reporting period, several new products include induction cooktops, insert ventilations
were introduced by FPA, we also started developing steamer ovens platform, all of which contributed to
33% revenue growth in kitchen appliances; we upgraded washing machines with low temperate UV
disinfection module and launched new tumble dryers, grew market share by 1.6 percentage points;
built-in refrigerator revenue grew by 60% thanks to the introduction of Column series and new four-door
series, particular efforts were made with comprehensive built-in range to capture opportunities inconstruction channel.
4. The South Asian market
During the reporting period, sales revenue grew 30.5% to RMB 7.138 billion.
In India, the Company seized opportunities from consumption upgrade towards large-capacity andhealth-oriented products, taking the lead in launching high-end side-by-side refrigerators and largecapacity front-load washing machines, and the proportion of high-end revenue rose to 34%. Meanwhile,
the Company actively expanded the distribution network, realizing 94% coverage in franchised channels,
100% coverage in 5 national & 50 regional chain retailor and 82% coverage of rural markets. Installationand equipment adjustment were carried out via video links to ensure the timely completion of
construction in Northern Industrial Park.
In Pakistan, the Company remained number one by taking a number of initiatives including thelaunch of T3 air conditioner that could work under temperature as high as 56℃, introduction of theelectric frequency-conversion refrigerator focusing on saving energy and advanced food preservation,
exactly what the users were looking for during the pandemic; meanwhile, sales revenue grew 150%
online with combination of Haier brand and newly introduced Candy brand.
5. The Southeast Asian market
During the reporting period, sales revenue grew by 15.0% to RMB 4.740 billion.

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The Company continued to strengthen technological and product leadership by launching largediameter washing machines and T-door refrigerators, the latter contributed to 4.7 percentage points
market share gain in Vietnam where distribution network coverage also increased to 100%, and theCompany introduced Candy brand in order to drive growth online in Thailand.
6. The Japanese market
In 2021, the Company realized sales revenue of RMB 3.491 billion, representing a year-on-year
decrease of 3.4% in RMB and a 6.3% growth in denominated in Japanese Yen. The aggregated market
share of refrigerators, freezers and washing machines reached 14.1%, and continued to be lead therefrigeration segment with combined market share of 16.7% from refrigerators and freezer.
During the reporting period, the Company launched AQUA brand ultra-large TZ refrigerators andupgraded Delie refrigerator series while renovated variable-frequency washing machines with ultrasonictechnology and introduced best-selling high-end front-load washer-dryer combo whose revenue
contributed reached 25% in December.

In addition, community-based laundry business continued to lead the industry with market share of
70%, the Company worked closely with partners including FamilyMart, P&G, ENEOS petrol stations
and MUJI, to add over 100 scenario-based stores specializing in laundry, clothing, food, andtransportation solutions.
(3) Establish incentive mechanism to unlock individual’s potential
In 2021, a new incentive system was established to unlock the fullest potential of our people, whilealigning long-term and short-term interest with shareholders. The Company successively launched the
A-share Core Employee Stock Ownership Plan, the H-share Core Employee Stock Ownership Plan, theH-share Restricted Share Unit Scheme and the long-term A-share Options Incentive Scheme, in order toprovide complete coverage of core employees home and abroad over different vesting periods including
short, medium and long term, in order to accelerate the implementation of smart home strategies, attract
and retain talents thus creating greater value for shareholders with sustainable development in the longterm.

II. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATES DURING
THE REPOTING PERIOD(I) Industry Overview for 2021
1.

The Chinese Market
In the face of a complex and volatile domestic and international environment in 2021, China's

economy continued to steer development towards high-quality growth. In terms of the home appliance

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Haier Smart Home Co., Ltd. 2021 Annual Reportindustry as a whole, it has entered the development stage focusing on replacement. Overall sales demand
became stable, and the average product price was enhanced due to product upgrade. Aggregated datafrom CMM showed that the retail sales of China's major home appliance market reached RMB 481.8
billion in 2021, a year-on-year growth of 8.5% from 2020; the retail sales of the kitchen appliance market
was RMB 231.9 billion, a year-on-year increase of 8.7%.
By category: (1) The refrigerator and washing machine industries have benefited from average priceincrease brought about by continuous product upgrade, retail revenue continued to grow. According todata from CMM, retail sales of the refrigerator and washing machine industries reached RMB 98.1 billion
and RMB 73.5 billion respectively in 2021, representing growth of 7.6% and 7.3% respectively ascompared to 2020.

(2) Impacted by factors including the real estate slowing down and the summer

temperature lower than previous years, retail sales of the air conditioning industry reached RMB 157.6
billion with a slight growth of 0.5%.

(3) With increasing popularity of integrated stoves, which has

substitution effects on traditional kitchen appliance products such as range hoods and gas stoves and asdata from CMM showed, retail sales of the range hood industry in 2021 amounted to RMB 38.2 billion,
representing a growth of 7.0% as compared to 2020; retail sales of the integrated stove industry reached
RMB 26.7 billion, representing a surge of 43.5% from 2020.

(4) The water heater industry’s overall

performance was stable, with retail sales amounted to RMB 60.8 billion, up 0.8% from 2020.

(5)Emerging categories such as clothes dryers and dishwashers have entered a stage of rapid growth after
years of incubation: according to CMM’s statistics, the retail sales of dishwashers reached RMB 11.3
billion in 2021, a rise of 20.2% from 2020; the retail sales of clothes dryers amounted to RMB 7.6 billion
in 2021, a jump of 123.5% compared to that of 2020. (6) The pandemic has caused people to stay homefor extended period of time, alongside product innovation, user demand for cleaning appliances andemerging small kitchen appliances have been stimulated. For instance, according to data from CMM,
retail sales of cleaning appliances reached RMB 27.8 billion in 2021, an increase of 23% year-on-year.
According to statistics from Euromonitor, the sales volume of air fryers in the Chinese market recorded
a year-on-year growth of 37% in 2021.
As the market as a whole entered the development stage focusing on replacement, users’ concerns
and industry trends have displayed new characteristics.
(1) When purchasing products, users shifted their focus solely on functionalities and costeffectiveness to a comprehensive consideration of brand identity, diversity of experience, design
originality of products.
(2) In terms of industry development trends:
Firstly, against the backdrop of quality-of-life improvements, especially under the influence of thepandemic, users' health awareness has greatly enhanced, leading to increased sales opportunities forhealth-conscious and smart home appliances. For instance, smart large-sized refrigerators, freshness
preserving refrigerators and T door refrigerators have fulfilled user’s needs for healthy diets, productintelligence, and refined storage space. Products such as washers with health-boosting sterilization

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Haier Smart Home Co., Ltd. 2021 Annual Reportfeatures, washer dryer combos and smart washing machines have offered enhanced laundry and garmentwearing experience. Air conditioning products have also transitioned from simple temperatureadjustments to provision of a healthy and comfortable environment. Products featuring fresh air,sterilization, air purification, and self-cleaning functions were favoured by the public.
Secondly, consumption upgrade continued: CMM data showed that in the offline market, the shareof retail sales of refrigerators with unit price above RMB 15,000 has grown from 8% in 2020 to 13% in
2021.
Thirdly, suite-oriented and scenario-based integration of home appliances and household space has
become an established trend. The industry has gradually transitioned from single product retailing to thesales of scenario-based solutions. In terms of product experience, home appliance product suites offereda unified design style, enabling product appearances to be more in line with modern aesthetics and texture.
In terms of sales and services, compared to purchasing single products from different brands, purchasing
product suites from the same brand could save time and hassle in product delivery, installations and aftersales services, which is in line with the trend of efficient and convenient consumption. In the context ofcontinuous pursuit of quality of life, users of home appliances, in addition to functional needs, look foroverall integration of home appliances and home environment, which could bring forth the experienceof improved home aesthetics and enhanced space utilization. From enterprise’s point of view, productsuites could increase the average order value, avoid losing customers, and achieve synergies between
strong and weak product categories. Enterprises equipped with product suite competitiveness would havean edge in future competition. However, the development trend of product suites has raised the bar forcompanies in the industry in terms of cross-category design, planning and scenario development
capabilities. It requires companies to conduct resource allocations across different product categories.
In terms of channel development trends:(1) Livestreaming e-commerce as part of online

channel has developed rapidly. According to the information of AVC, transaction value fromlivestreaming e-commerce has exceeded RMB1.09 trillion in the first half of 2021. Compared to
traditional e-commerce which mainly displays product information through text and images,
livestreaming e-commerce is clearly advantageous in terms of interaction and user experience, making
it easier to motivate users. At the same time, introduction and product comparisons offered by KOLs canalso save users' time in decision making. (2) The continuous increase in user demand for personalization,
household customization and improvement in indoor space utilization has driven the development ofintegrated sales of complementary home appliances and home furnishing via offline channels. In
particular, the building material channel is highly suitable for the promotion of the sales of high-end andsmart product suites of home appliances in the form of scenario-based solutions. Home applianceenterprises have proactively strengthened sales networks in household building material outlets, so as toattract users at the early stage when they are still designing and planning for home renovation, andmaximize average revenue per user through the sales of product suites.

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Export markets: due to recovery of the global market as well as continuous stability of the
production and supply capacity of China's home appliance industry chain, China's home applianceexports have continued to grow in 2021. According to data of Industry Online (产业在线), the annual

export volume of household air conditioners, refrigerators and washing machines in 2021 have increased
by 9.7%, 4.8% and 9.9% year-on-year respectively. However, challenges such as rising raw material
prices and surging shipping costs remained in 2021, which have placed pressure on export profitability.
2. Overseas markets
The global economy has gradually recovered in 2021. The global GDP was expected to grow 5.9%
in 2021 according to the forecast by the International Monetary Fund. Based on the information from
GfK, the global retail market for home appliances (including major white goods, small home appliancesand consumer electronics) was expected to reach USD 560 billion in 2021, with retail sales increased by
10% year-on-year. Specifically, the retail sales of major white goods have increased 13% year-on-year
due to product upgrades and average price hikes, whereas small home appliances have increased 6%.
By market:(1) The U.S. User demand for appliances remained robust throughout the year in the U.S. becauseof easing economic uncertainties, stimulus packages, and increased time at home. Major appliancesmarket resumed to 4.3% volume growth after two consecutive years of decline in sales volume. On theother hand, the industry was under constant challenges from sharp increase in raw materials, Covid
related labour shortages, and port congestion.
(2) Europe: The pandemic has led to a continuous increase in user demand for home appliancesin the large-capacity and healthy-living categories. Overall industry performed well. According tostatistics from GfK, the sales volume and sales revenue for major home appliances in 25 major European
countries in 2021 have increased by 3.9% and 9.5% year-on-year respectively.
(3) South Asia.

①India: As the pandemic developed to a later stage, users increasingly favoured

products with large-capacity and health-conscious features. E-commerce has developed rapidly in thepast two years, with the proportion of online sales of home appliances steadily increased.

②Pakistan:

Despite depreciation of the rupee and the pandemic’s impacts on residents' willingness to consume,
health-boosting and smart products were gradually recognized by users. For example, energy-saving
variable-frequency refrigerator series and large-volume freshness preservation refrigerator series have
gradually become mainstream products.
(4) Southeast Asia: As the pandemic has impacted the local tourism industry and affectedconsumption, performance in major markets were sluggish. According to data from GfK, the sales
volume of refrigerators in the Thai market increased 1%, the sales volume of household air-conditioners
dropped 1.7%, and the sales volume of washing machines rose 1.1%. In Indonesia, the pandemic has led
to increased unemployment and stagnant or declining wages, thus affecting the purchasing power of thesociety.

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Haier Smart Home Co., Ltd. 2021 Annual Report(5) Australia & New Zealand:①Australia: The industry maintained its growth momentum inthe first half of the year. However, channel sales of home appliances were greatly hampered in the second
half of the year due to pandemic related lockdown. The size of the industry in 2021 remained the sameas 2020.

②New Zealand: The pandemic has led to prolonged home office hours for local residents,

which stimulated the demand for home renovation and refurbishment, and drove the development of thereal estate market. User demand for home appliances increased accordingly. According to the home
appliance import data from local customs, home appliance imports grew 11.9% in 2021.
(6) Japan: Affected by the withdrawal of government subsidies, multiple state of emergencies
caused by the pandemic, negative economic growth and other factors, the white goods industry
experienced sluggish growth: sales volume of the refrigerator industry has dropped for two consecutive
years, and sales revenue in 2021 has tumbled 4.3%; for the freezer industry, due to pull-forward demandin 2020, growth in 2021 has lowered to 1.8%. The washing machine industry was benefited from thecontinuous optimization of product mix, and proportion of front-load and variable-frequency products
continued to grow. Although sales volume dropped 3%, sales revenue rose 3% year-on-year.

(II) Industry Outlook for 2022

1. The Chinese market:
In the medium to long term, with the acceleration of the new urbanization, the steady increase ofresidents' income, the continued expansion of the middle-income group and the improvement in social
welfare in China, the purchasing power and consumption willingness of residents grows stronger. The
home appliance market still has great upside potential. Changing user attitudes will drive the continuous
upgrade of product mix, bringing growth opportunities to high-end, high-quality home appliances. For
products such as small kitchen appliances and range hoods, there are significant gap in the penetration
rate between rural and urban areas. Room for growth is huge as driven by improvements in users' qualityof life and the expansion of product categories.
Looking ahead to 2022, the home appliance industry faces both challenges and opportunities:
seeking progress while maintaining stability, strategic initiatives to expand domestic consumption will
stimulate further demand, increased uncertainty in commodity prices due to global impact. According to
CMM's forecast, the size of China's major home appliance retail market will reach RMB 492.4 billion in
2022, representing an increase of 2.2% year-on-year; the retail size of the kitchen appliance market willgrow 6% to RMB 246.4 billion. Product mix enhancement and product iterations triggered byconsumption upgrade will continue to bring positive impact. User demand will become more segmented.
Sub-categories of home appliances such as products that improve quality-of-life will enter a period of
rapid growth.
Export markets: From 2020 to 2021, the global home appliance market was affected by the
pandemic and the supply chain of overseas markets was impacted. China's home appliance industry has
filled the supply gap in the global home appliance market with its efficient supply chain system, home

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Haier Smart Home Co., Ltd. 2021 Annual Reportappliance exports from China has grown strongly. It is expected that in 2022, the export market will facecertain pressure due to factors such as the recovery of supply chains in overseas markets and increase inoverseas production capacity.

2.

The global market:

According to the International Monetary Fund's GDP growth forecast for major economies in 2022,
major economies and countries around the world will continue the trend of recovery but at a slower pace.
Global growth is expected to be at 4.4%. Meanwhile, international trade barriers, supply chain
disruptions and the impact of the pandemic will continue to have profound impacts on the global home
appliance industry in 2022.
According to GfK's forecast, the size of the global home appliance industry will reach USD 575.2
billion in 2022, with an expected growth of 3%. From the perspective of industry development trends,
quality consumption will further drive product upgrades, product innovation and expansion of productintelligence; users will prefer products with higher energy efficiency in the context of climate change
and energy shortages; as the impact of the pandemic weakens and vaccination rate further improves,markets in countries that are previously heavily affected by the pandemic will further recover. On theother hand, there are unfavourable market factors at play. The outbreak of war in some region will have
impacts on regions and countries as well as posing certain challenges to upstream costs and supply chainsof the global home appliance industry.

III. INTRODUCTION OF THE COMPANY’S BUSINESS DURING THE REPORTING
PERIODFounded in 1984, the Company is committed to being an enterprise of the times. Through relentless
innovation and iterations, we seize opportunities in the industry by continuously launching new productsthat steer market development. After more than 30 years, the Company has become a global leader in the
major home appliance industry, as well as a pioneer in global smart home solutions.
• Global leader of the major home appliance industry: According to data from Euromonitor—an
authoritative market researcher, the Company ranked first in terms of sales volume in global major
appliance market for 13 consecutive years. The Company has a global portfolio of brands, including
Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to 2021, Haier
brand refrigeration and laundry appliances ranked first among major home appliance brands in sales
volume for 14 and 13 consecutive years respectively.
• Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products,
the Company is recognized by Euromonitor as one of the first in the industry to introduce smart homesolutions. Leveraging our connected home appliance products and partners, supported by Haier Smart

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Home APP, Three-Winged Bird APP and Haier Smart Home Experiential Cloud Platform, withintegration of experience centres and franchised stores, the Company provides users with smart homesolutions for a variety of application scenarios, satisfying their pursuit for a better life.
Over the years, the Company has established three business segments, namely the Chinese Smart
Home Business, the Overseas Home Appliance and Smart Home Business, and Other Business.
Smart Home Business in China
The Company provides a full range of home appliance products and value-added services in China
market through Haier Smart Home APP and Three-Winged Bird APP, supplemented by our offline
experience centres, in order to cater for users’ needs for different lifestyle scenarios. Smart Home
Business in China comprises Household Food Storage and Cooking Solutions (Internet of Food),
Household Laundry Solutions (Internet of Clothing), Air Solutions (Internet of Air), and Household
Water Solutions (Internet of Water).
• Household Food Storage and Cooking Solutions (Internet of Food): Through selling in domestic
market and exporting products such as refrigerators, freezers, kitchen appliances and value-added
services, including smart cooking and nutrition planning, the Company fully addresses users’ need forconvenient, healthy and tasteful gourmet experiences.
• Household Laundry Solutions (Internet of Clothing): Through selling in domestic market andexporting products such as washing machines, dryers and value-added laundry services solution such as
smart dispense of laundry detergent, the Company satisfies users’ demand for washing and caring ofapparels in a comprehensive manner.
• Air Solutions (Internet of Air): Through domestic sales in China and exports, the Company
provides home air-conditioners, commercial air-conditioners, purifiers, fresh air systems, as well ascomprehensive range of solutions including coordination of multiple air-conditioners and purifiers,
adaptive air flow, air quality monitoring and air disinfection.
• Household Water Solutions (Internet of Water): Through selling in domestic market and exporting,
the Company provides users with electric water heaters, gas water heaters, solar water heaters, heat pumpwater heaters, POE water purifiers, POU water purifiers, water softening equipment, at the same time,
we offer smart water solutions including interactions between water heaters and purifiers, and between
heating appliances and water heaters, so as to comprehensively cater to users’ needs for water purification,softening and heating.
Overseas Home Appliance and Smart Home BusinessIn addition, the Company manufactures and sells a comprehensive portfolio of home appliance products
and provides value-added services in more than 160 countries and regions, including North America,
Europe, South Asia and Southeast Asia, Australia and New Zealand, Japan, Middle East and Africa.
In the overseas market, the Company has been manufacturing and selling proprietary applianceproducts catering for local users’ demands for more than 20 years. During the time, a number of

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Haier Smart Home Co., Ltd. 2021 Annual Reportacquisitions contributed to our growth including acquisition of Haier Group Corporation’s overseas
white goods business (Sanyo Electric Co., Ltd.’s white goods business in Japan and Southeast Asia) in
2015, home appliances of GE in the US in 2016, Fisher&Paykel in 2018, and Candy in 2019. The
development of the Company’s overseas businesses has been fuelled by synergies among our selfdeveloped business and our acquired businesses.
At present, the overseas business of the Company has entered a stage of promising growth, having
achieved a multi-brand, cross-product and cross-regional presence on a global basis. According toEuromonitor, the Company's share of the global market (retail volume) for major home appliances in
key regions in 2021 is as follows: ranked first in Asia in terms of retail volume, with a 20.4% market
share; ranked second in America, with a market share of 15.1%; ranked second in Australia and New
Zealand, with a market share of 11.6%. The Company ranked third in Middle East and Africa with amarket share of 7.4%, and ranked fourth in Europe with a market share of 8.1%.
Other Businesses
Building on our established smart home businesses, the Company has also developed small home
appliances, channel distribution and other businesses. In particular, the small home appliance businessprimarily involves small home appliances designed by the Company, produced by outsourced thirdparty manufacturers and sold under the Company's brands, which serve to enrich our smart homesolutions product mix. The channel distribution business primarily offers distribution services for
products such as televisions and user electronics for the Haier Group or third-party brands, whichleverages the Company's sales network.
During the reporting period, the Company was once again listed among the Top 500 World’s
Companies by the Fortune Magazine, up 30 places as compared to 2020. We are named as the ‘2021
World’s Most Admired Companies’ by the Fortune Magazine. We are the only company being selectedin Europe and Asia in the home appliances industry, and are the only selected company incorporated
outside the US. Meanwhile, the Company is also the world’s only Internet-of-Things (IoT) ecosystembrand being named again as BrandZtm Top 100 Most Valuable Global Brands in 2021.

IV. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING PERIOD.
√ Applicable □ Not Applicable
The Company has established a solid strategic presence and competitive advantage in China andoverseas markets. In China's major home appliance market, the Company has long maintained a leading
position across all product categories. According to CMM's report, the Company has established acontinued leading market position in key major home appliance categories in 2021. In overseas markets,
the Company has adhered to its high-end brand creation strategy, building capacity to create leading
sustainable growth, which has continuously improved its market shares. Building on this foundation, the37/366

Haier Smart Home Co., Ltd. 2021 Annual ReportCompany will further consolidate its leadership position in the industry by leveraging integrated
synergies of its global unified platforms, through efficiency transformations driven by digitalization, andby leveraging its technological strengths and innovative capabilities. As cornerstone for sustainable
development, our ‘Rendanheyi (人單合一)’ Model also provided management guidance to the Company,

and enabled us to replicate successful experiences. It is believed that the following advantages will help
the Company to continue to strengthen its leading position:(i)

Dominance in China's high-end market; rapid growth of overseas high-end brands

Riding the trend of consumption upgrade in China, the Company has started to develop the highend brand Casarte in the Chinese market more than 10 years ago. The creation of high-end brands
required not only focus, experience and patience, but also continuous innovation of technologicalstandards and differentiated service capabilities to fulfil user demand for high-quality experiences. The
Casarte brand combined the Company's global technological strengths, product development capabilities
and manufacturing craftsmanship, as well as privilege marketing and differentiation services, and has
gradually won the trust of users in China's high-end market. According to data from CMM, the Casarte
brand has assumed a definitive leading position in China's high-end major home appliance market in
2021, ranking first in the retail sales of refrigerator, washing machine and air conditioner categories in
the high-end segment. Specifically, in terms of offline retail sales, shares of the Casarte brand of washingmachines and refrigerators reached 73.9% and 36.2% respectively in the market with product price above
RMB 10,000 in China, while its share of air conditioners priced above RMB 15,000 in the China's market
reached 30.3%. Our overall average price for refrigerators, air conditioners and washing machines wasroughly two to three times the average price of the industry.
In the North American market, the Company owns high-end brands such as Monogram, Café, andGE Profile. The Company has enhanced its high-end brand profile through launch of trending products
such as high-end professional gas range, large multi-door refrigerators, ultra-fresh dishwashers withstainless steel interior, Opal ice makers, and automatic espresso machines. For instance, the Monogramhigh-end professional gas range earned recognitions such as the ‘2021 Design Excellence Award’ (fromthe reputable magazine Architectural Design), GE Profile's smart induction oven range equipped withinterior-facing camera CookCam™ was named ‘Applause-Worthy Appliances’ by Good Housekeeping's
Kitchen Appliance Awards in 2021. Through the creation of luxurious, customizable and smart
technology-enabled user experience, our high-end brands Monogram, Café and GE Profile have grown
rapidly. In 2021, these three high-end brands have increased their revenue in the US market by more than
40% year-on-year.
(ii) Smart household solutions that continue to expand and upgrade
As users continued to demand for higher living quality, coupled with the development oftechnologies such as Internet of Things, big data, cloud computing and artificial intelligence, the industry
has shown a smart and high-end development trend that prioritized product suites, based upon scenarios,and home appliances integrated with home furnishings. With leading user insights, extensive product38/366

Haier Smart Home Co., Ltd. 2021 Annual Reportcoverage and technological accumulation from intelligent AI algorithms, home big data and IoT
equipment technology, the Company provided scenario solutions such as food storage and cooking
management, clothes laundry and mix-and-match management, whole-house air comfort and purification
management, and healthy drinking water management for five major spaces at home, including the livingroom, kitchen, bathroom, bedroom and balcony, thereby ‘Designing a home, building a home, andserving a home’ for users.
Three-Winged Bird stores provided users with scenario solutions that integrates smart home
appliances and smart home furnishings, and through having a service steward to attend to the needs ofusers throughout the process, through coordination and arranging with the internal specialised team,providing users with a whole-process service that comprised design and implementation, building
materials selection, as well as installation and fulfilment. For example, the Three-Winged Bird kitchen
scenario solution could provide users with a whole-process service from a suite of smart kitchen
appliances to cabinet design, delivery, installation and fulfilment.
Based on the Haier Smart Home Brain platform, users could upgrade the functions of smart home
appliances, enjoy services such as professional fitness training, recipe recommendations, purchase ofingredients through refrigerator, automatic selection of laundry programs, and personalized scenarios
through interfaces including the Haier Smart Home App and the Xiaoyou Speaker. In the future, theCompany will continue to address the needs of user experience, and to further improve and enrich thesmart home solutions provided by the Company. Through scenario solutions and ecosystem services, theCompany will provide lifelong services for users and further enhance users' loyalty.
(iii) Extensive and solid global presence with localized operational capability
In addition to success in the Chinese market, the Company also prospered in overseas markets. The
Company seeks overseas expansion of its own brands as well as synergies with acquired brands todevelop overseas markets. Such business strategy has guided the Company to establish R&D,
manufacturing and marketing three-in-one structure across multiple brands, products and regions, as wellas the model of self-development, interconnection and synergized operation.
The Company's extensive global presence depends on its localized business teams as well as its
flexible and autonomous management mechanisms established in various overseas markets, which haveenabled the Company to gain rapid insights and respond swiftly to local user demands. The Company
also proactively integrates into local markets and cultures, and has established a corporate image that isrecognized by local communities in the overseas regions where the Company operates.
In 2021, the Company operated 10 R&D centres, 122 manufacturing centres, and 108 marketing
centres around the world, and achieved a coverage of nearly 130,000 point of sales in overseas markets.
(iv) A comprehensive portfolio of proprietary brands recognised by users of all tiers
Through organic growth and acquisitions, the Company has formed seven brand clusters, including
Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. To address the needs of users

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Haier Smart Home Co., Ltd. 2021 Annual Reportfrom different tiers in various markets around the world, the Company has adopted a differentiated multibrand strategy in different regions that centred around users, so as to achieve an extensive and in-depth
user coverage. For example, in the Chinese market: the three brands of Casarte, Haier and Leader
achieved the coverage of high-end, mainstream and niche market groups respectively; in the U.S. market,
the six major brands such as

Monogram, Café, GE Profile, GE, Haier, Hotpoint comprehensively

covered all segments of high-end, mid-range and low-end markets, thereby meeting the preferences andneeds of different types of users.

(v) Cross-border acquisition and synergy realisation capabilities
The Company has an excellent track record of acquisition and integration. The Company has
acquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co., Ltd.’swhite goods businesses in Japan and Southeast Asia in 2015, the home appliance business of General
Electric in the US in 2016, the New Zealand company Fisher&Paykel (which has been entrusted by the
Haier Group since 2015) in 2018, and the Italian company Candy in 2019. The Company's capability toperform acquisition and integration is reflected in the following: First of all, the Company implements
the ‘Rendanheyi (人單合一 )’ Model in the acquired companies, which is a value-added sharing

mechanism for the whole-process team under a common goal. Such model can motivate the acquiredcompanies and their employees, and enable them to generate more value. Secondly, the Company madeuse of its global platform to empower the acquired companies in terms of strategic planning, R&D andprocurement in order to enhance their competitiveness. Thirdly, the Company's open and inclusive
corporate culture can support the acquired companies in establishing a flexible and autonomous
management mechanism, which can easily earn recognition from the acquired companies and isconducive to the promotion of integration.
(vi) Comprehensive and in-depth global collaborations and empowerment
The Company has made full use of its global collaborative platform, as well as its integratedfunctions of R&D, product development, procurement, supply chain, sales and brand marketing. It wasable to share and expand its successful market development experience to various markets around theworld. By strengthening the synergies among its global businesses, the Company has created a strong
driving force for its future development.
• Global collaborative R&D: The Company has a global collaborative R&D system and has
established global technology R&D mechanisms to share common modules, utilize common
technologies, and share patents within the scope of compliance. For example,① the Company

successfully applied the direct-drive motor technology developed by Fisher&Paykel to the Casarte brandof washing machines and achieved satisfactory results.

② integrating global R&D platform resources

and leveraging technologies around the globe, such as China's product structures and hydraulictechnology, Japan's functional design technology, New Zealand's driver system, and the American
control system, we launched the GE brand’s large-volume front-load washers in the U.S. market, which

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has led to increases in both the market share and average price of washing machine products in the U.S.
market.
• Global collaborative product development: The Company has established a global productdevelopment mechanism to coordinate global collaborative product development, which can enableregional collaboration and supplementation across product categories. For example, the Company
successfully supported GE Appliances to relaunch water heater business: the development teams in North
America and China are highly integrated, benchmarking the differences in standards between Haier andproducts in North America. Haier's R&D advantages were combined with GE Appliance’s quality
assurance system to jointly develop the product. The resulting electric water heater product has achieved
industry leadership in terms of design, manufacturing and inspection, with annual sales of more than
50,000 units, thus providing solid support for GE brand’s water heaters to successfully enter the North
American market.
• Global collaborative procurement: The Company's global procurement activities arecoordinated by its global procurement guidance committee. By leveraging the Company's global
procurement operations platform, the Company's operating divisions in different regions can share global
procurement resources, thereby achieving economies of scale.
• Global collaborative supply chain: The Company has a visualizable and digitalized global
supply chain management system, which has enabled flexible deployment of global production capacity,and sharing and collaboration in the development of smart manufacturing technologies.
• Global collaborative marketing and brand promotion: the Company operates a multi-level
brand portfolio on a global scale, which can realize global collaborative brand promotion. The Company
also promotes and introduces successful marketing strategies among regional markets around the world.
For example, the Company successfully replicated its sales and marketing model from third and fourthtier markets in China, in markets such as India, Pakistan, and Thailand, which have strengthened theCompany's brand image and its regional market competitiveness.
(vii) Industry-leading R&D and technological capabilities
To ensure better living experience for users, the Company has established a global leading R&D
system under the premise of developing original technologies, thereby using original technologies tosupport the overall industry-leading positions of the Company’s high-end brands, scenario brands andecosystem brands.
• The State Science and Technology Progress Award: In 2021, Haier Smart Home received anotherState Science and Technology Progress Award, ranking first in the industry with a total of 16 awards.
• Leadership in terms of patent quality: As of December 2021, Haier Smart Home has accumulated
more than 75,000 patents applications globally, of which invention patents accounted for more than 63%.
The number of overseas invention patents exceeded 14,000, making us the Chinese home applianceenterprise with the largest number of overseas patents. The Company also accumulated 10 state patent

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Haier Smart Home Co., Ltd. 2021 Annual Reportgold awards, ranking first in the domestic market. In the ‘Global Smart Home Invention Patent Ranking’in 2021, Haier Smart Home once again topped the list, ranking first in the world for six consecutive times.
• Leadership in terms of international standards: As of December 2021, Haier Smart Home has
cumulatively led and participated in formulation of 82 international standards and 602 state industrial
standards. It is the only company in the industry to obtain comprehensive coverage in the five majorinternational standard organizations, namely the IEC, ISO, IEEE, OCF and Matter. It is also the only
enterprise in the world to serve on the IEC Board and the IEC Market Strategy Board at the same time,
which have enabled the Company to stay actively involved in international standardization work andhave a voice in the formulation of standards.
• Leadership in terms of original technologies: In 2021, the Company has innovated a range ofsolutions that exceeded users' expectations, such as the launch of the Casarte’s ‘simultaneous five-ringfire’ gas stove, which enlarged the pot heating area by 40% through the use of multi-ring uniform
combustion system, ingredients in the pot could therefore be more evenly and comprehensively heated.
The Company also introduced the Casarte’s Zhongzihemei all-in-one laundry machine that could
perform the three functions of washing, fabric-caring and drying in the same machine; throughcontinuous iteration of original technologies, it solved the three major pain points of high-end washing,drying and fabric-caring. We therefore created a new product category in the laundry industry and has
continued to increase our market share of high-end washing machines.
• Leadership in terms of innovative ecosystem: In 2021, with approval of the Ministry of Industry
and Information Technology, Haier spearheaded the establishment of the National High-end Intelligent
Household Appliances Innovation Centre, which is the only national-level manufacturing innovation
centre in the field of home appliances. By centring on the development direction of high-end, smart andscenario-based home appliances, the Centre focuses on breaking through a number of critical common
technologies in the technological fields of ontology, intelligence, security and scenario application, so as
to enhance the technological innovation level and product competitiveness of China's high-end smart
home appliance industry.
Our HOPE platform, as Haier's window for external technology collaboration, tracks, analyses andresearches technologies closely related to industry development that are 3-5 years ahead of time, andpromotes the industrialization of related technologies, continue to build on the core methodologies ofuser insights, demand analysis, technology analysis and resource assessment, while brings together the
supply and demand side of technologies, knowledge and creativity, providing interactive scenarios andtools to facilitate the creation and iterations of innovative products/scenarios. Taking Haier's air
conditioner’s ‘variable shunt technology’ as an example, through collaboration with relevant experts, 36
patents have been applied for the technology, including 4 PCT international patents. According to resultsfrom a real device test conducted by CHEARI (Beijing) Certification & Testing Co. Ltd., the energyefficiency of a 1.5 HP Haier variable refrigerant flow air conditioner is 12% higher over a period of one
year than that of an air conditioner with the new national standard of first-class energy efficiency withsame power level.

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Haier Smart Home Co., Ltd. 2021 Annual Report(viii) Staying committed to the principle of ‘value of people comes first’‘Value of people comes first’ has always been a guiding principle for Haier's development. From
the autonomous operation team at the start of the venture to the current ‘Rendanheyi’(人單合一) model,

Haier encourages every employee to maximize their own values while creating values for users. In
Haier's ‘Rendanheyi’ (人單合一) model, ‘Ren’ refers to creators; ‘Dan’ refers to user value; ‘Heyi’ refers

to the integration of values realized by employees and the values created for users. ‘Value of people
comes first’ is the highest purpose of the ‘Rendanheyi’(人單合一) model.

Haier Smart Home adheres to the values of recognizing users’ demand as priority and denying ourown perceptions , and is committed to the ‘two creative spirits’ of entrepreneurship and innovation. We
turned employees into creators, implementers into entrepreneurs, and transformed enterprises into open
ecosystem platforms, which have supported the Company to become a global leader of smart home in
the Internet of Things era.

V.

MAJOR OPERATIONS DURING THE REPORTING PERIOD
Please refer to “I. DISCUSSION AND ANALYSIS ON OPERATIONS” under this chapter.

(I) Analysis of principal business1.

Table of movement analysis on the related items in income statement and cash flow statement
Unit and Currency: RMB

Items

Current Period

Corresponding
Period of Last Year

Change (%)

Operating revenue

227,556,143,618.17

209,723,430,081.03

8.50

Operating cost

156,482,657,366.94

147,471,922,284.89

6.11

Selling expenses

36,553,667,004.06

33,641,711,147.72

8.66

Administrative expenses

10,444,475,658.24

10,052,645,415.72

3.90

686,364,977.04

1,196,199,335.22-42.62

8,357,332,946.25

6,852,861,422.32

21.95

23,129,640,417.72

17,609,513,831.64

31.35-8,066,823,538.43-5,273,676,324.71-52.96-15,641,428,143.57-1,025,923,097.55-1,424.62

2,403,102,640.29

4,060,104,212.78-40.81Gain on fair value change

119,277,623.85

62,629,747.80

90.45

Loss on credit impairment-520,299,915.42-166,380,605.76-212.72

Financial expenses
R&D expenses
Net cash flow from operating
activities
Net cash flow from investing
activities
Net cash flow from financing
activities
Investment income

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Haier Smart Home Co., Ltd. 2021 Annual Report

Gain from disposal of assets

110,983,720.04-12,807,590.96

966.55Non-operating expenses

159,240,779.44

241,918,187.91-34.18Analysis on the reasons of signification changes in certain indicators:

1) Reasons for changes in financial costs: Financial costs decreased by 42.62% over the corresponding
period, which was mainly due to the decrease in interest expenses;

2) Reasons for changes in net cash flow from operating activities: Net cash flow from operating
activities increased by 31.35% over the corresponding period, which was mainly due to the increasein operating profit and improvement in operating efficiency during the period;3) Reasons for changes in net cash flows from investing activities: Net cash outflows from investing
activities increased by 52.96% over the corresponding period, which was mainly due to the cash
outflow from the purchase of financial products and the inflow of proceeds from disposal of interestsin subsidiaries during the current period;

4) Reasons for changes in net cash flows from financing activities: Net cash outflows from financing
activities increased by 1,424.62% over the corresponding period, which was mainly due to therepayment of borrowings and the decrease in new borrowings during the current period;5) Reasons for the changes in investment income: Investment income decreased by 40.81% over thecorresponding period, which was mainly due to the one-off gain on disposal of equity interests
included in the corresponding period;6) Reasons for the changes in gain from fair value change: Gain from fair value change increased by
90.45% over the corresponding period, which was mainly due to the increase in fair value change ofinvestment in equity instruments over the corresponding period;7) Reasons for changes in credit impairment losses: Credit impairment losses increased by 212.72%
over the corresponding period, which was mainly due to the increase in the provision for bad debts
on receivables during the current period;

8)

Reasons for changes in gain on disposal of assets: Gain on disposal of assets increased by 966.55%
over the corresponding period, which was mainly due to the increase of gain on disposal of assets
in the current period;

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Haier Smart Home Co., Ltd. 2021 Annual Report

9)

Reason for changes in non-operating expenses: Non-operating expenses decreased by 34.18% overthe corresponding e period, which was mainly due to the decrease in the disposal of small-scale
production equipment in the current period.

Detailed explanation of significant changes in the operation types and the components of profit or sourcesof profit of the company during the period√Applicable□ Not Applicable

In December 2020, the Company completed the material asset restructuring involved in theprivatisation of Haier Electronics through H Share issues, details of which was set out in the “report on
the implementation of material asset acquisition and connected transaction of Haier Smart Home Co.,
Ltd.” dated 26 December 2020 of the Company. Upon completion of the material asset restructuring,profit attributable to minority shareholders of Haier Electronics from the original minority shareholders’profit and loss would be transferred to the Company’s net profit attributable to shareholders of the parent
company. Thus, the restructuring was one of factors in change in indicators, such as net profit attributable
to shareholders of the parent company, of the Company for the reporting period.

2. Analysis of Income and Cost
□ Applicable √ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report(1). Principle Operating Activities by Sector, Product, Region and Sales Mode
Unit and Currency: RMB
Principal operating activities by productOperatingOperatingGrossprofitrevenuecostmarginincreased/

increased/

increased/（%） decreasedyoy (%)

decreased

decreased yoyyoy (%)(%)

Gross
OperatingOperatingprofitrevenuecostmarginBy productIncrease by
Air

0.52
37,531,431,456.40

27,048,946,901.15

27.93

25.11

24.22

conditioner

percentage
pointsDecrease by
0.69

Refrigerator

71,569,789,213.81

48,835,867,469.21

31.76

16.30

17.48
percentage
pointsIncrease by

Kitchen0.96
35,244,040,315.09

23,735,209,066.45

32.65

12.38

10.81

appliances

percentage
pointsIncrease by

Water

0.06
12,470,593,776.21

6,760,377,744.75

45.79

26.52

26.38

Appliances

percentage
pointsIncrease by

Washing

0.52
54,758,839,273.57

36,334,162,716.43

33.65

13.02

12.13

Machinepercentage
pointsEquipment
Decrease byparts and0.26
channel

15,002,367,286.61

13,523,061,580.33

9.86-45.21-45.05percentage

integrated
pointsservices

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Haier Smart Home Co., Ltd. 2021 Annual Report

Principal operating activities by region
OperatingOperatingGross profit

revenuecostmarginincreased/

increased/

increased/（%） decreasedyoy (%)

decreased

decreased yoyyoy (%)(%)

Gross
OperatingOperatingprofitrevenuecostmarginBy region

Increase by
3.11
Domestic

111,851,280,563.23

73,875,984,966.93

33.95

4.30

-0.39
percentage
pointsIncrease by
0.20

Overseas

114,725,780,758.46

82,361,640,511.39

28.21

13.20

12.88
percentage
pointsPrincipal operating activities by sales mode
OperatingOperatingGross profit

revenuecostmarginincreased/

increased/

increased/（%） decreasedyoy (%)

decreased

decreased yoyyoy (%)(%)

Gross
OperatingOperatingprofitrevenuecostmarginSale mode

Increase by
Domestic

1.21

direct sale

10,849,505,940.64

6,336,720,350.62

41.59

5.08

2.96
percentage

customers
pointsIncrease by
Domestic

3.30

distribution

101,001,774,622.59

67,539,264,616.31

33.13

4.22

-0.69
percentage

and others
pointsDecrease by
Overseas-

directsale

3.94
3,946,307,570.97

3,611,298,895.65

8.49

34.74

40.80
percentage

customers
pointsOverseas-

Increase bytrading

0.44
110,779,473,187.49

78,750,341,615.74

28.91

12.55

11.86

companies

percentage

sales

points47/366

Haier Smart Home Co., Ltd. 2021 Annual Report(2). Table of production and sales analysis√Applicable □ Not Applicable
Production

Sales

volumevolumeincreased/

increased/

decreased

decreasedyoy (%)yoy (%)

Inventory
Main

Production

Sales

increased/Unitsproducts

Inventory
volumeVolumndecreasedyoy (%)

Home

10,000Appliance

units/sets

10,576

11,388

2,464

23.3

13.6

24.3

(3). Performance of major purchase contracts and major sales contracts□Applicable √Not Applicable(4). Table of cost analysis
Unit: RMB 10,000
By sector
Percentage ofPercentage
Percentage of thechange of theAmount for theamount for theamount for thecorresponding

corresponding

current period

period of lastperiod of lastcompared to theyear

year in total costs

corresponding(%)

period of lastof theAmount for

amount forthe current

the current

periodperiod in

Cost
By sector
component
total costs(%)

year (%)
Primary

12,251,576

100.0018.1

85.7

10,190,414

83.2

21.7

14,468,983

100.0012,400,431

operation costsHome

Raw materials

Appliance

Labor

893,832

6.2

776,334

6.3

15.1

Industry

Depreciation

238,3311.6

240,106

2.0-0.7

Energy72,363

0.5

63,633

0.5

13.7

Others864,026

6.0

981,089

8.0

-11.9

(5). Change of consolidation scope due to changes on shareholdings of major subsidiaries during
the reporting period□ Applicable √ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report(6). Relevant information on significant changes or adjustments in the Company's business,
products or services during the reporting period□ Applicable √Not Applicable(7). Major distributors and major suppliersA. Major distributors of the Company
Revenue from the top five distributors was RMB 50,650.28 million, representing 22.26 % of thetotal sales for the year; among the revenue from the top five distributors, the revenue from related parties
was RMB 0 million, representing 0 % of the total sales for the year.

The proportion of sales to a single distributor exceeded 50% of the total during the reporting period,and new distributor or depending heavily on a few distributors were seen among the top five distributors.
□Applicable √Not Applicable

B. Major suppliers of the Company
The purchase amount from the top five suppliers amounted to RMB 40,358.73 million, representing
19.83 % of the total purchase amount for the year; among the purchase amount from the top five suppliers,
the purchase amount from related parties was RMB 22,159.67 million, representing 10.89 % of the totalpurchase amount for the year.

The proportion of purchase from a single supplier exceeded 50%of the total during the reporting
period, and new supplier or depending heavily on a few suppliers were seen among the top five suppliers.
□Applicable √Not Applicable

3.

Expenses□ Applicable √Not Applicable

4.

R&D expenditure(1). Table of R&D expenditure√ Applicable □ Not Applicable
Unit: RMB
Expensed R&D expenditure for the
8,357,332,946.25
current period
Capitalized R&D expenditure for the609,272,007.11
current period
Total R&D expenditure

8,966,604,953.36

Total R&D expenditure as a percentage in

3.94

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Haier Smart Home Co., Ltd. 2021 Annual Report

operating revenue (%)
Proportion of capitalization of R&D
6.79
expenditure (%)(2). Table of R&D Personnel√ Applicable □ Not Applicable

Number of R&D personnel

22,161

Percentage of R&D personnel took up in the total employees (%)

21.13

Educational structure of R&D personnel
Categories of educational structure

Number of personnel

Doctor’s degree

95

Master’s degree

3,480

Bachelor’s degree

10,684

College Diploma

5,276High School diploma or below

2,626

Age structure of R&D personnel
Categories of age structure

Number of personnel

Under 30 years old (not including 30)

8,228

30-40 years old (including 30 and not including 40)

9,518

40-50 years old (including 40 and not including 50)

3,033

50-60 years old (including 50 and not including 60)

1,141

60 years old and above

241(3). Explanation√Applicable □Not Applicable

Haier Smart Home always focuses on user experience. Under the guidance of adhering to thestrategy of original technology, it has continuously increased its innovation investment, established a
global leading R&D system, and has seen a continuous emergence of innovative achievements.
In terms of products, in 2021, the Company created a series of innovative solutions that were beyond
users' expectations and led the industry, such as parallel flow air supply system, the second generationof air-purifying air conditioner, five-ring fire gas stove, crystal water heater, neutron and beauty washingand drying care machine, etc. In the next step, we will continue to increase investment in basic researchand subversive technology research.

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Haier Smart Home Co., Ltd. 2021 Annual Report

In terms of intelligence promotion: focusing on all-scenario solutions such as Smart Home APP andwhole house intelligence, we are continuously increasing our investment in the research and developmentof IoT, cloud computing, artificial intelligence and related advanced technologies to advance thedevelopment of home appliances towards intelligence and scenario-based development.
In terms of green and dual-carbon: we will undertake the national dual-carbon strategy and makebreakthroughs in green technologies such as DC home appliances and hydrogen energy to lead the trendof "dual-carbon" development in the home appliance industry.

(4). Reason for significant change in the composition of R&D personnel and its impact on the
future development of the Company□ Applicable √ Not Applicable
5.

Cash flow□ Applicable √ Not Applicable(II) Explanation for major changes in profit caused by non-principal businesses□ Applicable √ Not Applicable(III) Analysis of assets and liabilities√Applicable □ Not Applicable
1.

Assets and liabilities
Unit: RMB10,000
Percentage
Percentage ofName of Item

Amount at theAmount at theEnd of Current

End of Current

PeriodPeriod to Total
Assets (%)

Amount at
the End ofPrevious
Periodof Amountat the End
of Previous
Period to
Total
Assets (%)

Change in theAmount at theend of Current
Period to the

Description

End of Previous
Period (%)
Mainly due to thegrowth in revenue

Inventory

3,986,317.10

18.33

2,944,697.34

14.47

35.37

scale andproduction
stocking

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Haier Smart Home Co., Ltd. 2021 Annual Report

Mainly due tochanges in fair

Investments inother equity

484,870.94

2.23

265,902.53

1.31

82.35

instruments

value ofinvestments inequityinstruments
Mainly due to theDevelopment
Expenses

increase in
22,789.22

0.10

16,774.67

0.08

35.85

research anddevelopment
expenditures
Mainly as a result

Short-termborrowings

1,122,621.21

5.16

768,790.82

3.78

46.02

of working
capitalreplenishment
Mainly due to the

Tradingfinancial

629.400.00

2,695.25

0.01-76.65liabilities

expiration oflock-up
instruments
Mainly due tochanges in the

Derivative
financial

8,021.24

0.04

23,958.25

0.12-66.52

liabilities

fair value of lockup instruments
and interest rate
swap agreements

Contractual
liabilities

Mainly due to the
1,001,687.03

4.61

626,958.44

3.08

59.77

increase inadvance receipts
Mainly due to

Other current
liabilities

223,453.01

1.03

689,110.94

3.39-67.57

repayment of
ultra-short termbondsLong-term
borrowings

Mainly due to
303,857.38

1.40

1,182,141.63

5.81-74.30

repayment ofborrowings

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Haier Smart Home Co., Ltd. 2021 Annual Report

Mainly due to theconversion of
Bonds Payable

33,473.00

0.15

671,350.11

3.30-95.01convertible bondsin the current
periodMainly due to theincrease in the

Estimated
liabilities

withholding of
194,856.55

0.90

144,284.40

0.71

35.05

packageinstallation fee inline with growthof revenue scale
Mainly due to theDeferred

85,279.46

revenue

0.39

63,376.17

0.31

34.56

increase ingovernment
subsidies

Other noncurrent

Mainly due to4,946.17

0.02

2,703.35

0.01

82.96

liabilities

increase indeposits
Mainly due to the

Other equity
instruments

decrease in the
11,801.75

0.05

236,419.53

1.16-95.01conversion equity
component of theconvertible bonds
Mainly due to theincrease in equity

Capital reserves

2,254,934.56

10.37

1,500,747.56

7.37

50.25

premium from theconversion of
convertible bonds
Mainly due to theTreasury shares

242,403.88

1.11

2,889.66

0.01

8,288.68

Company's share
repurchase2.

Overseas Assets√Applicable □Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report(1)

Scope of assets
Among the assets, overseas assets amounted to 9,618,279 (unit and currency: RMB10,000),

representing 44.23 % of the total assets.

(2)

Explanation of high percentage of overseas assets√Applicable □Not Applicable
Unit and Currency: RMB
Name of overseas
asset

Operating Revenue
Reason for Formation

Operating mode

during the reporting
periodOverseas Home

Overseas mergers &Localized Operations

Appliance andacquisitions and thewith the integration of

Smart Home

Company’s own

R&D, manufacturing

Businessdevelopment

and marketing

113,725,197,263.9

Net Profit of thereporting period

5,926,026,404.54

Note: The net profit stated in the above table represents operating profit.

3.

Restrictions on major assets as of the end of reporting period□ Applicable4.

√ Not Applicable

Other Explanations□ Applicable√ Not Applicable(IV) Analysis of industry operating information□ Applicable√ Not Applicable(V) Analysis of investment
Overall analysis on external equity investment√ Applicable □ Not Applicable
In the purpose of increasing net profit attributable to owners of the parent company, promoting
company’s governance level, reducing daily related-party transactions, streamlining the shareholding
structure of the subject company and enhancing the managing efficiency of subsidiaries, On 29 October
2021, as audited and approved at the Twenty-fourth Meeting of the Tenth Session of the Board of
Directors of the Company, the Company acquired in cash 10.00% equity interest in Dalian Haier
Refrigerator Co., Ltd. and 3.94% equity interest in Qingdao Haier Special Electric Freezer Co., Ltd. and100% equity interest in Qingdao Haier Quality Inspection Co., Ltd. held by Haier Group . The transaction

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Haier Smart Home Co., Ltd. 2021 Annual Reportconsideration was RMB 39,600,000, RMB 28,846,300 and RMB 36,300,000 respectively, totaling RMB
104,746,300. As at the end of the Reporting Period, the transaction was completed.

1.

Significant equity investment√Applicable □Not Applicable
Please refer to the content in ‘1. Overall analysis on external equity investment’ as stated above.

2.

Significant non-equity investment□Applicable√Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report3.

Financial assets measured at fair value√Applicable □Not Applicable
Unit and Currency: RMB

Financial assets measured Initial investment

Sourceat fair valueof funds

cost

Foreign exchange forward

products
Investments in trading
equity instruments
Investment funds
Investments in other equity

instruments

Investment income

Changes in fair value

during the reporting

during the reporting

during the reporting

periodperiodperiodSelf-owned

contracts
Wealth management

Current purchase/ Sale

385,093,478.12

51,560,818.94

60,011,933.94

487,081.52

2,157,550,007.50 Self-owned

254,052,501.00

284,382,243.23 Self-owned

199,878,386.41

46,729,587.36

124,067,582.04 Self-owned

12,696,004.62

18,097,485.77

3,587,415,678.11 Self-owned

736,271,801.04

Forward commodity

58,558,795.05

Self-owned

contracts
Other derivative financial
instruments
Total-18,646,990.66

29,450,000.00 Self-owned
6,182,865,510.88/

1,202,898,693.07

503,664,207.11

Note: As of 31 December 2021, the aggregate balance of foreign exchange derivative transaction
amounted to approximately US$ 2.286 billion.

4.

Detailed progression of material asset regroup and integration during the reporting period□ Applicable√ Not Applicable(VI) Sale of material assets and equity□ Applicable√ Not Applicable(VII) Analysis on major subsidiaries and Investees□ Applicable√ Not Applicable(VIII) Structured entities controlled by the Company□ Applicable

1,472,225,880.04√ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

VI. DISCUSSION AND ANALYSIS ON THE COMPANY’S FUTURE DEVELOPMENT(I)Setup and trend of the industry√ Applicable□ Not Applicable

For details, please refer to the relevant contents of “II. INTRODUCTION OF THE INDUSTRY
WHERE THE COMPANY OPERATES DURING THE REPORTING PERIOD” under “Section III
Management Discussion and Analysis” in this report.

(II)Development strategy of the Company√ Applicable□ Not Applicable

To become a user-centred digital enterprise in the IoT era, and achieve leadership as the world's
first IoT-based smart home ecosystem brand. The Company will continue to consolidated its leadershipin refrigerators, washing machines and water heaters; enhance the performance of kitchen appliances andair conditioners; accelerate growth in tumble dryers and dishwashers, and capture opportunities oflifestyle appliances and cleaning appliances while developing Three-Winged Bird scenario brand in orderto stay ahead in this competitive industry.

(III)Business plan
√ Applicable□ Not Applicable

In 2022, the Company will take the following measures to generate sustainable growth:
In the domestic market, the Company will accelerate the transition of ‘high-end brand → scenario
brand → ecosystem brand’, and expand Casarte’s market leadership from product to scenario
applications while increase user value with initiatives targeting outstanding quality, comprehensive
solution, smart scenario, ecosystem platform and lifelong user loyalty. On the other hand, Three-Winged
Bird brand will remain focused on improving user experience with accelerated introduction of solution
packages that combine smart appliances with home improvement offerings, thus become lifelong
partners in users’ pursuit of a better life.
In the overseas markets, guided by ‘RenDanHeYi (人單合一)’ principles, the Company will makededicated efforts become No. 1 globally by leveraging on well-established localized operations to speed
up product development pipeline, expanding online & offline presence; optimizing global supply chain
integration and manufacturing upgrade, thus promoting deeper integration of brands, R&D, procurement,
supply chain and human resource management.

On digital transformation front, the Company will remain committed to promote thedigitalization of logistics, services, marketing, and supply chain management so as to establish an endto-end operation system that creates first class user experience, facilitates distributors’ development andimproves network efficiency, while building long lasting partnership with users in assisting thembuilding and servicing a home through accelerated implementation of Three-Winged Bird platform andExperience Cloud platform.

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Haier Smart Home Co., Ltd. 2021 Annual Report(IV)Potential risks of the Company√ Applicable□ Not Applicable

1. Risk of decreasing market demand due to slowdown in macroeconomic growth. Sales ofwhite goods as durable consumer appliances are subject to users' income level and their expectations of
future income growth which would have a certain impact on their willingness to purchase products. A
slowdown in macroeconomic growth causing a decline in users' purchasing power would have a negative
impact on industry growth. In addition, a slowdown in real estate market would also have a negative
impact on market demand, which would indirectly affect end-user demand for home appliances.
2. Risk of price war caused by intensified industry competitions. The white goods industry ishighly competitive with a high degree of product homogeneity, industry concentration has increased inrecent years. Increase in inventory in individual sub-sectors due to imbalance between supply anddemand may lead to risks such as price war. Furthermore, due to rapid technological advancements,
scarce talents in the industry, shortened product life cycles and ease of imitation, it is becoming
increasingly difficult to profit. New products, services and technologies are often associated with higher
selling prices, and it has become necessary for the Company to invest more in research and development
in order to achieve that. The Group will actively invest in research and development to attract users
through continuous innovation in products and services, and establish a lasting brand influence.

3. Risk of fluctuations in raw material prices. The Company's products and core components
mainly use metal such as steel, aluminum, and copper as raw materials, as well as bulk commodity suchas plastics and foam. If the prices of raw materials continue to rise, it will put certain pressure on the
Company’s production and operations. In addition, the Company relies on third party suppliers for key
raw materials, components and manufacturing equipment, as well as OEM suppliers, and any disruption
in supply or significant price increases by these suppliers will have a negative impact on the Company’sbusinesses. As a leader in the industry, the Company will take measures to reduce the risk of raw material
fluctuations on its operations such as by using value adjustment mechanism on volume and price with
suppliers and hedging.
4. Operational risk in overseas business. The Company has steadily developed its global businessand has established production bases, research and development centers and marketing centers in many
parts of the world, with the proportion of overseas revenue increasing year by year. Overseas markets
are subject to political and economic situations (events such as military conflicts and wars), legal systems
and regulatory regimes of those countries and regions, and significant changes in these factors may posecertain risks to the Company’s local operations in these markets. The Company has taken various
measures to mitigate the relevant impact, including active collaborations with suppliers and distributors,
improving production efficiency to offset the impact on the Company’s overall cost of sales, potentially

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Haier Smart Home Co., Ltd. 2021 Annual Report

expanding the Company’s supply resources to other countries, and taking measures to ensure safety of
its people and assets.
5. Risk of exchange rate fluctuations. As the Company expands its global footprint, the importand export of the Company’s products involve the uses of foreign currencies such as the U.S. dollar, theEuro and the Japanese yen. If the exchange rates of relevant currencies fluctuate, it will have a certain
impact on the Company’s financial position and increase its financial costs. In addition, the Company’s
consolidated financial statements are denominated in Renminbi, while the financial statements of its
subsidiaries are measured and reported in the currency of their primary economic environment in which
the entity operates, and are therefore subject to currency exchange risk. In this regard, the Company uses
hedging instruments to reduce its exposure to exchange rate fluctuations.
6. Risk of policy changes. The home appliance industry is closely related to the consumer goods
market and the real estate market. Changes in macroeconomic policies, consumption investment policies,
real estate policies and relevant laws and regulations will affect distributors' demand for products, which
in turn will affect product sales of the Company. The Company will closely monitor changes in policies,
laws and regulations, and anticipate market changes to safeguard the Company’s further development.
7. Risk of uncertainties resulted from COVID-19 outbreak. The COVID-19 outbreak, which
gradually spread around the end of 2019, could lead to a further weakening of consumer demand forhome appliances, which could in turn affect the Company’s product sales. Firstly, lockdowns, social
distancing measures and travel restrictions could reduce user mobility and result in the closure of retailsales network, thereby reducing consumer demand for home appliances. Secondly, the pandemic may
also cause disruptions to the operations of distributors, such as logistical disruptions in the delivery of
products, resulting in distributors' dissatisfaction with the Company’s services and consequently reduced
demand for the Company’s products. The Company will leverage its anti-pandemic experience in the
Chinese market and make best use of its global resource synergies to mitigate the impact of the pandemic
on its businesses.
8. Credit risk. The Company may not be able to collect all trade receivables from its distributors,
or distributors may not be able to settle the Company's trade receivables in a timely manner, in whichcase the Company's business, financial status and operation performance may be adversely affected. In
relation to this risk, the Company will maintain flexibility to offer credit period of 30 to 90 days to certain
distributors based on their credit history and their transaction volume.

9. Inventory risk. Since the Company cannot always accurately predict trends and events andmaintain appropriate inventory levels, there may be excess inventory as a result, for which the Company
may be forced to offer discounts or offer promotions to tackle the slow-moving inventory issue. On theother hand, a shortage of inventory may occur, which may lead to loss of sales opportunities for theCompany. However, the Company will manage its inventory and make adjustment according to market
situation. It will also regularly assess if impairment of inventory is needed.

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Haier Smart Home Co., Ltd. 2021 Annual Report(V)Others□ Applicable√ Not ApplicableVII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON- DISCLOSURE BY
THE COMPANY IN CONSIDERATION OF INAPPLICABLE REGULATIONS, STATESECRETS AND COMMERCIAL SECRETES□ Applicable√ Not Applicable

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Section IV Corporate GovernanceI.

EXPLANATION OF CORPORATE GOVERNANCE√ Applicable□

Not Applicable

During the reporting period, the Company has strictly complied with the requirements underCompany Law of the People's Republic of China, Securities Law of the People's Republic of China, Codeof Corporate Governance of Listed Companies and the requirements of the relevant laws and regulations,and has been committed to improving its governance structure, regulating its operation, perfecting its
information disclosure system, strengthening the communication with investors and upgrading the levelof the Company’s corporate governance. During the reporting period, the Company has madeamendments to Articles of Association according to domestic and overseas regulatory requirements toenhance its standardized operation and comprehensive management. The corporate governance structureof the Company is sound and there is no difference between the corporate governance structure and therequirement of relevant documents from CSRC.

(1) Shareholders and general meeting of shareholders:

The Company could ensure that all shareholders, especially the minority shareholders enjoy equal
treatment and are able to fully exercise their rights; during the reporting period, the convening proceduresof the shareholders’ general meeting of the Company were in compliance with the requirements ofArticles of Association and Rules of Shareholders’ General Meeting of the Company. Attendance ofshareholders at the meeting was relatively high, which ensured that the shareholders fully excised voting
rights; the Company also engaged lawyers who possess the qualification to engage in securities businessto attend and witness the shareholders’ general meeting; the proposals were considered and approved inaccordance with legal procedures, which could guarantee the power and rights of minority shareholders.

(2) Relationship between controlling shareholders and the listed company:

The controlling shareholders acted normatively and did not interfere with the Company’s
management decisions and operations, directly or indirectly. The Company and the controllingshareholders are independent of each other in terms of their staff, assets, finance, organization andbusiness. The Board of Directors, the Board of Supervisors and internal administrative departments are
all independent of each other. The specific requirements for regulating Related-party transactions andfund flow are set out in Articles of Association, Fair Decision-Making System for Related-party
Transactions and Administrative System for Regulation of Fund Flow between the Company and Related
Parties, Risk Control System for Related-party Transaction with Haier Group Finance Co., Ltd., andProposal for Emergency Response System for Risk of Deposits with Haier Group Finance Co., Ltd.,
which guaranteed the interests of investors. After being approved at the annual general meeting, the daily
related-party transactions are implemented according to specialized review procedures. The basis of

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Haier Smart Home Co., Ltd. 2021 Annual Reportpricing and reasonability of operation agreement shall be supervised and reviewed by special
departments, so as to regulate the execution of related-party transactions. Internal control and internal
control audit of the Company would also focus on the compliance of the related-party transactions, inorder to protect the interests of minority shareholders and non-related shareholders.

(3) Directors and the Board of Directors:
The Board of Directors acts as the decision-making body of the Company. The Board of Directorsof the Company is responsible to the shareholders’ general meetings, and performs its duty within theterms of reference under Articles of Association and other relevant laws and regulations in accordancewith the procedures under Rules of Procedure for the Board of Directors. During the reporting period,
the Board of Directors operated in accordance with rules and continued to perform their duties under
Articles of Association and relevant laws and regulations better and practically implement relevant
decisions at the shareholders’ general meeting. The decision-making procedure and particulars of theresolutions of the Board of Directors were in compliance with relevant Listing Rules, Articles of
Association and relevant requirements under laws and regulations, and the resolutions made were legal
and valid.

In determining the composition of the Board of Directors, the Company took full account of thediversity of the members of the Board, including but not limited to gender, age, culture, education
background, professional experience, skills, knowledge and length of service of the director as well asother regulatory requirements. During the reporting period, the Company has 8 external directors, ofwhich 4 are independent directors, representing a large proportion of the total number of the directors(11 in total) of the Company. The Board continues to maintain an open structure. The members of theBoard have extensive experience and expertise in areas of finance and accounting, investment strategy,
corporate culture and corporate governance, which helped to improve the efficiency of the Board,
reduced the risks of management and control and made better decisions so as to realize the sustainable
and healthy development of the Company.

During the reporting period, the directors attended the board meeting and shareholders’ general
meeting with responsible and diligent attitude and protected the interests of the Company. The
independent directors of the Company have a diligent and responsible attitude towards their work by
actively attending meetings of the Board and its committees, expressing independent opinion on mattersof related-party transactions, cash dividend, external guarantees and providing constructive advice on the
production and operation of the Company.

Strategic committee, audit committee, remuneration and appraisal committee, nominationcommittee and ESG committee are established under the Board of the Company. The number of
independent directors represents more than one-half of the audit committee, nomination committee,

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Haier Smart Home Co., Ltd. 2021 Annual Report

remuneration and appraisal committee. During the reporting period, the Company set up the new ESG
committee, which will help to promote the environmental, social responsibility and management
capabilities of the Company.

(4) Supervisors and the Board of Supervisors:
During the reporting period, the Board of Supervisors operated in accordance with rules andcontinued to practically perform their duties under Articles of Association and relevant laws andregulations. The number and composition of the members of the Board of Supervisors complied withrequirements under laws and regulations. During the reporting period, the Supervisors of the Company
performed their duties earnestly and adhered to the principle of being responsible to the Company andall shareholders to supervise legality and compliance on finance matters of the Company andperformance of duty by the Company’s directors, presidents of the Company and other senior
management strictly in accordance with requirements under Articles of Association, Rules of Procedure
for the Board of Supervisors and relevant laws and regulations.

(5) Performance evaluation and incentive and disciplinary mechanism:

In accordance with Articles of Association, the Board of Directors shall appoint or remove thepresident and the secretary of the Board of Directors; the Board shall appoint or remove the vice president
and other senior management (including the chief financial officer) of the Company based on thenomination by the president and determine their remunerations and rewards and penalties. The humanresource department of the Company shall make routine appraisal and evaluation on the performance of
directors, supervisors and senior management. Remuneration and Appraisal Committee shall makeinspection and evaluation on their performance to determine their remunerations at the end of the year.

The Company is focused on maximizing the value of people. In line with the global landscape ofthe capital market, the Company has established an incentive system that unifies long and short-term
incentives and constraints and aligns the interests of employees and all shareholders. During the reporting
period，the Company introduced domestic and overseas incentive plans with various appraisal cycle,

multi-level and all-round benefits, further expanding the scope of incentives. On the basis of A-Share
Employee Stock Ownership Plan, H-Share Core Employee Stock Ownership Plan and H-Share Overseas
Trust Incentive Plan, the Company introduced A-Share Option Incentive Scheme, which helped theCompany better focus on the implementation of smart home strategy, optimize the incentive mechanism
to further attract talents and promote business synergy and integration, enhance values of the Company
and the shareholders with a view to achieving quality and sustainable growth through the cycle.

(6) Stakeholders:

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The Company was able to fully respect and protect the lawful rights and interests of the suppliers,
channels, banks, other creditors, employees, consumers and other stakeholders. Meanwhile, theCompany actively took part in public welfare undertaking in such place where it operates, placed a lotof emphasis on environment protection, performed its social duties earnestly and worked together withthese stakeholders actively with good communication to jointly promote the sustainable and sounddevelopment of the Company. For details, please refer to relevant information in 2021 Environmental,
Social and Governance Report published on the same date of this report.

(7) Information disclosure:During the reporting period，the Company strictly complied with the requirements of the listing

rules of each place of listing and adhered to the principles of timely disclosure, truthful disclosure,accurate disclosure, complete disclosure, fair disclosure and lawful disclosure to ensure that all investors
have equal access to information. The Company authorized Shanghai Securities News, China Securities
Journal, Securities Times and Securities Daily for information disclosure. The Company authorized thesecretary of the Board of Directors to take charge of information disclosure, reception of visits byshareholders and handling of shareholder’s enquiries. Meanwhile, the Company broadened
communication channels for investors to get relevant information of the Company through result
presentation, telephone conference calls after periodical reporting and occasionally holding on-site andonline forums. With respect to the significant Related-party transactions, the Company performed
necessary approval procedures and disclosed relevant information strictly in compliance with Articles of
Association and Fair Decision-Making System for Related-party Transactions to protect the interests ofinvestors. During the reporting period, the Company further perfected the confidentiality procedure for
information disclosure strictly in compliance with the Registration System of Insiders, the Responsibility
System for Major Errors in Information Disclosure in Annual Reports and the Management System ofExternal Information Users to ensure the fairness and equity of information disclosure.

(8) Management of Investor Relation

During the reporting period, the Company continued to uphold the principle of respecting investors
with focus on the needs of investors to strengthen communication and exchange with investors in an
active, open, innovative and professional manner so as to enhance investors’ understanding andrecognition of the Company and safeguard the legal rights of investors. In accordance with guideline of
the Management System for Investor Relation, the Company integrated business and financial resourcesby the office of the secretary of the board of Directors and realized positive and all-around access toinvestors in a multi-layer and diversified format through introduction reference, annual investor
conference, result announcement conference, and online forum. Meanwhile, the Company repliedinvestors on a timely basis by ways of interview, e-mail, phone, fax and the website

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Haier Smart Home Co., Ltd. 2021 Annual Report(http://sns.sseinfo.com) and enhanced interaction with investors, so as to respect and protect the interestsof various investors, with the aim of achieving harmonious and mutual success with the Company, staff
and investors.

Whether there is a significant difference between the corporate governance and requirements in
respect of corporate governance of listed companies of laws, administrative regulations and the CSRC;
if so, the reasons should be explained□ Applicable√ Not Applicable

II. SPECIFIED MEASURES ADOPTED BY THE CONTROLLING SHAREHOLDERS ANDULTIMATE CONTROLLERS TO MAINTAIN INDEPENDENCE WITH RESPECT TOASSETS, PERSONNEL, FINANCE, ORGANIZATION, BUSINESS, AND THE SOLUTIONSADOPTED, WORKING PROGRESS AND SUBSEQUENT WORKING PLANS IN CASE OF
THE COMPANY’S INDEPENDENCE BEING AFFECTED□ Applicable√ Not Applicable

Controlling shareholders, ultimate controllers and other parties controlled by them engaged inbusiness that are same as or similar to the company, peer competition and impact of significant changes
in peer competition on the company, solutions adopted, working progress and subsequent solution plans□ Applicable√ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

III.

BRIEF INTRODUCTION TO THE GENERAL MEETING OF SHAREHOLDERS
Index for details of websites
Date of

MeetingDatedesignated for publishing

Resolutions approved
disclosure

resolutions
Considered andapproved the
For details, please refer to theresolutions for theAnnouncement on Resolutions

amendment of the

Passed at the 2021 First
2021 First Extraordinary

Extraordinary General Meeting,General Meeting

2021 First A Shares Class

articles of association,
the appointment ofauditors, the general

Meeting, 2021 First D Shares
5 March 2021

mandate to repurchase

Class Meeting and 2021 First H

6 MarchShares Class Meeting of Haier2021

H share and the electionof additional directors

Smart Home Co., Ltd. (L2021009) published by the Company on

2021 First A Shares Class

the website of Shanghai Stock

Meeting

Considered andExchange (www.sse.com.cn) and

2021 First D Shares Class

approved a resolution

the four major securities

Meetingfor general mandate tonewspapers.

repurchase H share2021 First H Shares Class
Meeting

Considered andapproved the2020 Annual General
Meeting

25 June 2021

For details, please refer to theresolutions related toAnnouncement on Resolutions

annual report, profit

Passed at the 2020 Annual General

distribution proposal,

Meeting, 2021 Second A Shares

expected annual

Class Meeting, 2021 Second D

guarantee/foreign

Class Meeting and 2021 Second H

exchange operation,

Shares Meeting of Haier Smart

26 June 2021

general mandate toHome Co., Ltd. (2021-045)

issue additional/

published by the Company on the

repurchase H/D shareswebsite of Shanghai Stockof the Company,

Exchange (www.sse.com.cn) and

Employee Stockthe four major securities

Ownership Plan and theNewspapers.

election of sole
director/supervisors,
etc.

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Haier Smart Home Co., Ltd. 2021 Annual Report

2021 Second A Shares Class

Considered andMeeting

approved a resolution

2021 Second D Shares Classfor general

Meetingauthorization to2021 Second H Shares

repurchase H/D shares

Meetingof the Company
For details, please refer to theConsidered andAnnouncement on Resolutions

approved Share Option

2021 Second Extraordinary

Passed at the 2021 Second

Incentive Scheme,

General Meeting

Extraordinary General Meeting,appraisal management

2021 Third A Shares Class

method and relevant

Meeting, 2021 Third D Shares
2021 Third A Shares Class

15 September

Class Meeting and 2021 Third H

Meeting

2021

Shares Class Meeting of Haier2021 Third D Shares Class

Smart Home Co., Ltd. (L2021-

Meeting072) published by the Company on
the website of Shanghai Stock

2021 Third H Shares Class

Exchange (www.sse.com.cn) andMeeting

the four major securities

16

authorization

September
2021
Considered andapproved Share Option
Incentive Scheme

newspapers.

Preferred shareholders whose voting rights have been restored requested an extraordinary general
meeting□ Applicable√ Not Applicable

Explanation of Shareholders' general meeting√ Applicable□ Not Applicable(1) The 2021 First Extraordinary General Meeting and the 2021 First A/D/H Shares Class
Meetings of the Company was held in successive order by way of on-site voting and network voting bypoll at Room B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road,
Qingdao, the PRC, in the afternoon on 5 March 2021, considering the amendment of articles ofassociation of the Company and other relevant resolutions. The total number of the shares of theCompany carrying voting rights amounted to 9,284,895,068 shares (of which 6,308,552,654 shares wereA shares, 271,013,973 shares were D shares and 2,705,328,441 shares were H shares). 463 shareholders
and proxies, representing 5,402,912,205 shares or 58.19% of the total number of the shares of theCompany carrying voting rights, were present at the 2021 First Extraordinary General Meeting; 342

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Haier Smart Home Co., Ltd. 2021 Annual Reportshareholders and proxies, representing 3,389,819,287 shares or 53.73% of the total number of A sharesof the Company carrying voting rights, were present at the 2021 First A Shares Class Meeting; 115
shareholders and proxies, representing 136,331,271 shares or 50.30% of the total number of D shares of
the Company carrying voting rights, were present at the 2021 First D Shares Class Meeting; 7
shareholders and proxies, representing 1,827,803,082 shares or 67.56% of the total number of H sharesof the Company carrying voting rights, were present at the 2021 First H Shares Class Meeting. The
Directors, supervisors and senior management of the Company as well as the lawyers engaged by theCompany also attended the abovementioned four meetings. The abovementioned four meetings wereconvened by the Board of the Company, and Vice Chairman Ms. Tan Lixia presided over these meetings.
The Company had 8 Directors, of whom 2 Directors attended the meetings (Directors Liang Haishan,
Wu Changqi, Lin Sui, Dai Deming, Chien Da-Chun and Wong Hak Kun were unable to attend themeetings due to personal engagement); the Company had 3 supervisors, all of whom attended the meeting.
The secretary of the Board of the Company attended the abovementioned meetings and other membersof senior management of the Company were invited to attend the abovementioned meetings.

(2) The 2020 Annual General Meeting and the 2021 Second A/D/H Shares Class Meetings of
the Company was held in successive order by way of on-site voting and network voting by poll at Room
B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road, Qingdao, the
PRC, in the afternoon on 25 June 2021, considering the annual report and other relevant resolutions. The
total number of the shares of the Company carrying voting right amounted to 9,351,540,298 shares (ofwhich 6,268,408,194 shares were A shares, 271,013,973 shares were D shares and 2,812,117,411 shareswere H shares). 985 shareholders and proxies, representing 6,080,584,192 shares or 64.63% of the total
number of the shares of the Company carrying voting right, were present at the 2020 Annual General
Meeting. 865 shareholders and proxies, representing 4,029,351,155 shares or 63.87% of the total numberof A shares of the Company carrying voting rights, were present at the 2021 Second A Shares Class
Meeting; 119 shareholders and proxies, representing 140,727,610 shares or 51.93% of the total number
of D shares of the Company carrying voting rights, were present at the 2021 Second D Shares Class
Meeting; 5 shareholders and proxies, representing 1,989,396,251 shares or 70.74% of the total numberof H shares of the Company carrying voting rights, were present at the 2021 Second H Shares Class
Meeting. The Directors, supervisors and senior management of the Company as well as the lawyers
engaged by the Company also attended the abovementioned four meetings. The abovementioned four
meetings were convened by the Board of the Company, and Chairman Mr. Liang Haishan presided overthese meetings. The Company had 11 Directors, of whom 4 Directors attended the meetings (Directors
Li Huagang, XieJuzhi, Wu Changqi, Lin Sui, Dai Deming, Chien Da-Chun and Li Shipeng were unable
to attend the meetings due to personal engagement); the Company had 3 supervisors, of whom 1
supervisor attended the meetings (Supervisors Wang Peihua and Ming Guoqing were unable to attend
the meetings due to personal engagement). The secretary of the Board of the Company attended the68/366

Haier Smart Home Co., Ltd. 2021 Annual Report

abovementioned meetings and other members of senior management of the Company were invited toattend the abovementioned meetings.

(3) The 2021 Second Extraordinary General Meeting and the 2021 Third A/D/H Shares Class
Meetings of the Company was held in successive order by way of on-site voting and network voting bypoll at Room B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road,
Qingdao, the PRC, in the afternoon on 15 September 2021, considering the Share Option Incentive
Scheme and other relevant resolutions. The total number of the shares of the Company carrying voting
right amounted to 9,348,215,954 shares (of which 6,262,154,495 shares were A shares, 271,013,973
shares were D shares and 2,815,047,486 shares were H shares). 640 shareholders and proxies,
representing 5,996,610,506 shares or 64.15 % of the total number of the shares of the Company carrying
voting right, were present at the 2021 Second Extraordinary General Meeting. 527 shareholders andproxies, representing 3,850,245,299 shares or 61.48 % of the total number of A shares of the Company
carrying voting rights, were present at the 2021 Third A Shares Class Meeting; 107 shareholders andproxies, representing 149,499,080 shares or 55.16 % of the total number of D shares of the Company
carrying voting rights, were present at the 2021 Third D Shares Class Meeting; 6 shareholders and proxies,
representing 2,055,477,618 shares or 73.02 % of the total number of H shares of the Company carrying
voting rights, were present at the 2021 Third H Shares Class Meeting. The Directors, supervisors andsenior management of the Company as well as the lawyers engaged by the Company also attended theabovementioned four meetings. The abovementioned four meetings were convened by the Board of theCompany, and Chairman Mr. Liang Haishan presided over these meetings. The Company had 11
Directors, of whom 9 Directors attended the meetings (Directors Chien Da-Chun, Wong Hak Kun, Li
Shipeng, Wu Changqi, Yu Hon To, Li Kam Fun participated by means of communication while directors
Lin Sui and WU Qi were unable to attend the meetings due to personal engagement); the Company had
3 supervisors, of whom 3 supervisors attended the meetings. The secretary of the Board of the Company
attended the abovementioned meetings and other members of senior management of the Company wereinvited to attend the abovementioned meetings.

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Haier Smart Home Co., Ltd. 2021 Annual ReportIV.

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT(I)

Changes of shareholding and remuneration of current and retired directors, supervisors and senior management during the reporting period√Applicable □Not Applicable

Unit: share
Total
remuneration

Whether

received from thereceive

Reason for

Company during

remuneration

increase/decrease

the reportingfrom theperiodCompany’s(RMB0’000)

related party

Shareholdings
Expiration
Appointment
Name

Title (note)

GenderAge

Shareholdings

Increase/decreaseat the end of

in shares for thethe yearyear

at thedate ofdate

beginning of
appointment
the year(before tax)
Employee
Liang
ChairmanMale

56

2019–06–18

2022–06–17

14,923,047

16,411,209

1,488,162

shareholding

259.5

NO

224.3

NO

195.5

NO

Haishanscheme vested
Director,
Employee
Li

Chief
Male

Huagang53

2019–06–18

2022–06–17

694,607764,145

69,538shareholding

Executive
scheme vested
OfficerVice

Xie Juzhi

Male

56

2021-3-5

2022–06–17

president

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Haier Smart Home Co., Ltd. 2021 Annual Report

Wu
Director

Male

67

2019–06–18

2022–06–17

22.5

NO

Director

Male

66

2019–06–18

2022–06–17

22.5

NO

Director

Male

74

2021-3-5

2022–06–17

18.75

NO

DirectorFemale702021-3-5

2022–06–17

18.75

NO

Male

69

2019–06–18

2022–06–17

22.5

NO

Male

66

2020–06–03

2022–06–17

22.5

NO

Male

55

2021-3-5

2022–06–17

18.75

NO

Male

55

2021-6-25

2022–06–17

8.75

NO

Changqi
Lin Sui
Yu HonTo
Li KamFun
Chien Da-

Independentchun

director

Wong

Independent

HakKundirector

Li
Shipeng

Independent
director
Independent

Wu Qi
director
Tan Lixia

Vice(retired)president

Female52

2019–06–18

2021-3-30

8,535,920

9,726,450

1,190,530

Employee

Received noshareholding

remuneration

scheme vested

from the Company

YES

Dai
Independent
DemingMale

60

2019–06–18

2021-6-25

13.75

NO

Male

42

2021-6-25

2022–06–17

Received no

YESdirector(retired)
Liu Dalin

Chairman of

71/366

Haier Smart Home Co., Ltd. 2021 Annual Reporttheremuneration

Supervisoryfrom the Company

Committee
Employee
Ma
Supervisor

Female53

2021-6-25

2022–06–17

3,904

3,904

shareholding

34.1

NO

33.6

NO

Yingjiescheme vested
Employee
Yu MiaoMale40

2019–06–18

2022–06–17

supervisor
Chairman of
Wang

Employee

Received noshareholding

remuneration

scheme vested

from the Company

Employee

Received noshareholding

remuneration

scheme vested

from the Company

thePeihuaMale

65

2019–06–18

2021-6-25

161,067

210,127

49,060

YES

Supervisory(retired)Committee
Ming
Guoqing

Supervisor

Male

62

2019–06–18

2021-6-25

105,511

137,564

32,053(retired)
DeputyLi PangeneralYES

EmployeeMale46

2021-2-7

2022–06–17

387,118

533,218

146,100

managershareholding

154.6

NO

124.5

NO

scheme vested

DeputyEmployeegeneralGong Wei

Male

49

2019–06–18

2022–06–17

1,724,315

1,911,970

187,655

shareholding

manager,scheme vested
Chief

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Haier Smart Home Co., Ltd. 2021 Annual Reportfinancial
officer
DeputyHuang
generalMale

452021-2-7

2022–06–17

86.0

NO

118.7

NO

Xiaowumanager
DeputyWu Yong

general

EmployeeMale442021-2-7

2022–06–17

44,765

146,743

101,978

managershareholding
scheme vested

DeputyLi Yang

generalMale

462021-2-7

2022–06–17

107.9

NO

Male

44

2021-2-7

2022–06–17

115.6

NO

105.5

NO

80.3

NO

1,808.85/

manager
DeputyGuan
generalJiangyongmanager
DeputyWang Li

general

Employee
Female57

2021-2-7

2022–06–17

504,505

575,100

70,595

shareholding

managerscheme vested

Secretary to

EmployeeMing
the board of

Female58

2019–06–18

2022–06–17

1,275,295

1,395,489

120,194

shareholding

Guozhendirectors
Total/

scheme vested///

28,356,150

31,815,919

73/3663,459,769/

Haier Smart Home Co., Ltd. 2021 Annual Report

Note: (1) “Shareholdings at the beginning of the year” as stated in the above table represent the later of “the beginning of the year” of the appointment or “appointment
date” of such directors, supervisors and senior management; (2) all the aforesaid shares are A-shares.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Name

Major working experience
Male, born in 1966, is a senior engineer. He served as head of the quality department of Qingdao Haier Refrigerator Co., Ltd., general manager of Qingdao
Haier Air Conditioner Gen Corp., Ltd, vice president of Haier Group, senior vice president of Haier Group, rotating president of Haier Group, vice chairman,
Chairman and president of Haier Smart Home Co., Ltd. He is vice chairman of the board of directors of Haier Group, president of Haier Group, andLiang Haishan

chairman of 10th session of the Board manager of Haier Smart Home Co., Ltd.; he was rewarded National May 1st Labor Medal, Outstanding LeadershipAward of the National Light Industry Enterprise Information (全国轻工业企业信息化优秀领导奖), Top 10 Leaders in China Strategic Emerging

Industries; Prize of Technology Advancement for China Household Appliances, First Prize Award of Science and Technology Progress of China National
Light Industry Council, China Patent Gold Prize, 2017 Forbes China Best CEO of Listed Company, 2017 Taishan Industry Leading Talent of Shandong
Province, Labor Model of Shandong Province.
Male, born in 1969. He graduated from Huazhong University of Technology in 1991 with a Bachelor’s degree of Economics, and from China Europe
International Business School in 2014 with a degree of Executive Master of Business Administration (EMBA). He was successively awarded 2015 China
Li Huagang

Home Appliance Marketing Leader, 2016 Person of the Year in Home Appliance Industry of Shandong, Award of Outstanding Contribution in 40-Years
Development of China’s Home Appliance Industry 2018, 2019 Qingdao Top Talent, and 2019 Person of the Year of China’s Top Ten Brands. He served
as the chief operating officer and executive director of Haier Electonics Group Co., Ltd. (HEG), a subsidiary of the Company, and is currently a director
and Chief Executive Officer of Haier Smart Home Co., Ltd.
Male, born in 1966. He graduated from Shandong University of Finance and Economics in July 1989 with a Bachelor’s degree, and joined Haier Group in
the same year. Mr. Xie has experience in whole-process product management, product-wide services and product-wide marketing. Mr. Xie has held senior
positions in Electrothermal Division of Haier Group, East China Marketing and Promotion Division of the Haier Group, and served as the General Manager

XieJuzhiof Customer Services of Haier Group. He has been the Chief Executive Officer and an Executive Director of Haier Electronics Group Co., Ltd. Since July
2012, he has been the Vice President of Haier Group in charge of the Group’s integration of community sales services in first and second-tier cities, anddeveloping the online and offline sales of new household products. He then has been managing the newly developed business segments of Haier Group,
including water purification, logistics, Haier home and Gooday services. Since March 2021, he has been the vice chairman of Haier Smart Home Co., Ltd.

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Haier Smart Home Co., Ltd. 2021 Annual Report

He is currently responsible for supervising the smart living appliances segment. Mr. Xie was awarded honorary titles including the Gold Award of
Outstanding Contribution Award of China’s Home Appliance Services Industry (Shandong Province (山东省优秀企业家).

中国家电服务行业突出贡献奖金奖) and Outstanding Entrepreneur ofMale, born in 1955. He is currently a professor of strategic management and doctoral supervisor of Guanghua School of Management, Peking University.
He graduated from Shandong University with a Bachelor’s degree of Economics in 1982, and Katholieke Universiteit Leuven in Belgium with a Master’s
degree of Business Administration and a Doctoral degree in applied economics in 1990. He served as an assistant professor and associate professor in the
Wu Changqi

Department of Economics of School of Business and Management of Hong Kong University of Science and Technology, a professor and head of the
Department of Strategic Management of Guanghua School of Management of Peking University, a deputy dean of the Guanghua School of Managementof Peking University, and a director of the EM-BA degree programme center. He is currently the executive vice president of the Academy of Development
Strategy for National High-tech Industry Zones, Peking University, the dean of the School of Management of Shandong University, and the director of theTenth Session of the Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1956. He was a partner of Deloitte Touche Tohmatsu China (retired on 31 May 2019). He has been engaged in international tax consultancy
in USA and China for nearly 30 years. He participated in transactions, mergers and acquisitions, initial public offerings, financing projects, supply chain
taxation optimization, internal tax risk control and other aspects of professional tax consultancy of many PRC international enterprises, and has abundant
experience in restructuring, acquisition, equity arrangement, tax accounting and business transformation. In recent years, he has been mainly engaged in
the consulting of digital transformation of corporate financial and tax management. In 1989, he pursued his studies in USA and obtained a Master’s degree

Lin Suiin Business Administration and a Master’s degree of Science in Taxation. He joined Deloitte Touche Tohmatsu USA in 1993 and was transferred to Deloitte
Touche Tohmatsu China in 2002. Mr. Lin Sui is a Certified Public Accountant in USA. Prior to his return to China, he was employed by Ministry of Scienceand Technology of China as a member of the overseas scholars’ advisory committee of the National High-tech Development Torch Program and an expert
on the United Nations development projects in China. At present, he has been invited as an external lecturer of China Europe International Business School
and Shanghai National Institute of Ac-counting, a part-time master degree tutor of Fudan University and Shanghai University of Finance and Economics,
Deputy Director of the Advisory Committee of China Tax Institute of Large Business (TILB), a council member of the Shanghai branch of China

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Haier Smart Home Co., Ltd. 2021 Annual Report

Association for Fiscal and Tax Law, and a director of the Tenth Session of the Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1948. He holds a Bachelor of Social Science degree from Chinese University of Hong Kong. He is a Fellow of the Institute of Chartered
Accountants in England and Wales and an Associate Member of Hong Kong Institute of Certified Public Accountants. Mr. Yu is a chartered accountant
with over 40 years’ experience in the fields of auditing, corporate finance (including advisory on IPO, mergers & acquisitions and financial restructuring),
financial investigation and corporate governance. Mr. Yu was formerly a partner of Coopers & Lybrand (now merged as PricewaterhouseCoopers) in Hong
Yu Hon To

Kong with extensive experience in the corporate finance advisory assignments in Greater China for Hong Kong corporations, private equity groups andmultinationals. Mr. Yu also served as an independent non-executive director and the chairman of the audit committee of Haier Electronics Group Co., Ltd.,a subsidiary of the Company, over the past three years. Mr. Yu had served various public offices including being a member of the Listing Committee ofthe Hong Kong Stock Exchange from 1992 to 1995, a member of the Investment Committee and the Audit Committee of Employees Retraining Board(established under the Employees Retraining Ordinance of Hong Kong) from 1999 to 2020, and a member of the Board of Review (established under Inland
Revenue Ordinance of Hong Kong) from 2006 to 2012. He is currently a director of 10th session of the Board of Directors of Haier Smart Home Co., Ltd.
Female, born in 1952. She graduated from University of Hong Kong with Bachelor of Arts and Master of Business Administration degrees. She wasconferred with the degree of Doctor of Business Administration, honoris causa, from the Open University of Hong Kong in 2014. Ms. Li Kam Fun iscurrently the president of Our Hong Kong Foundation. She also serves as an independent non-executive director of Nestle S.A, a publicly listed company
on the SIX Swiss Exchange. Ms. Li Kam Fun served as an independent non-executive director of Haier Electronics Group Co., Ltd., a subsidiary of theCompany, over the past three years. Prior to joining Our Hong Kong Foundation, Ms. Li Kam Fun had a distinguished career that spanned 34 years with
Amway Corporation. When she retired in 2011, she held the concurrent positions of Executive Vice President of Amway Corporation and Executive

Li Kam Fun

Chairman of Amway China Co. Ltd. responsible for Amway Greater China & Southeast Asia Region. During the last three years, Ms. Li Kam Fun had
also been an independent non-executive director of Amcor Limited (a company listed on the Australian Securities Exchange) from 2014 to 2019, and an
independent non-executive director of Trinity Limited (a company listed on the Main Board of the Hong Kong Stock Exchange) from 2011 to 2020. Ms.
Li Kam Fun’s leadership was well recognised in the business community. She was twice named the ‘‘World’s 100 Most Powerful Women’’ by Forbes
Magazine in 2008 and 2009. CNBC awarded Ms. Li Kam Fun with the ‘‘China Talent Management Award’’ in its 2007 China Business Leaders Awards.
Ms. Li Kam Fun currently holds several positions in public service including member of the Election Committee of Hong Kong (2021-2025), deputy

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Haier Smart Home Co., Ltd. 2021 Annual Report

secretary of Hong Kong Coalition, director of the Chinese Association of Hong Kong & Macao Studies, honorary special representative, conference、

consultant and honorary president of All-China Women's Federation honorary president of the Hong Kong Federation of Women, permanent honorary
director of The Chinese General Chamber of Commerce、court member of the Open University of Hong Kong and member of the advisory panel of theXiqu Centre of the West Kowloon Cultural District Authority. She is currently a director of the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1953. He served as Chairman of IBM Greater China region, CEO of IBM Greater China region, etc. He graduated from the Department ofChien Da-chun

Mathematics of Tamkang University of Taiwan, and studied advanced management courses in the Institute of Business Administration of Harvard
University, as well as the global senior manager courses of International Business Machines Corporation (IBM). He is currently an independent director of
the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1956. He received a Bachelor’s of Social Science degree from University of Hong Kong. He has over 36 years of experience in auditing,assurance and management in Deloitte China. He has been a partner of Deloitte China since 1992 and served as a member of the board of directors of
Deloitte China from 2000 to 2008. Prior to his retirement in May 2017, he was Deloitte China’s National Managing Partner of Audit & Assurance. Mr.

Wong HakKun

Wong is an associate of the Hong Kong Institute of Certified Public Accountants (HKICPA), an associate of the Association of Chartered Certified
Accountants (ACCA), an associate of the Chartered Institute of Management Accountants (CIMA), an associate of The Institute of Chartered Secretaries
and Administrators. He currently serves as an independent non-executive director of Yue Yuen Industrial Holdings (Limited), Lung Kee (Bermuda)
Holdings Limited, Guangzhou Automobile Group Co., Ltd., Hangzhou SF Intra-City Industrial Co., Ltd. and Haier Smart Home Co., Ltd.
Male, born in 1967. He holds a bachelor’s and Master’s degree from University of Science and Technology of China, and a PhD degree from Lehigh
University, USA. Mr. Li has extensive experience in Internet of Things technology and artificial intelligence. Mr. Li is currently the director of AppliedIntelligence Research Center of Suzhou Industrial Technology Research Institute. Prior to that, he served as the Chief Researcher and Deputy Dean of

Li Shipeng

Microsoft Research Asia, Chief Technology Officer of Cogobuy Group, Vice President of iFlytek Group and Executive President of Shenzhen Institute ofArtificial Intelligence and Robotics. Mr. Li is a member of the International Eurasian Academy of Sciences and a fellow of the International Institute ofElectrical and Electronics Engineers (IEEE fellow). He was listed as one of the world’s top 1,000 computer scientists by Guide2Research and ranked top
20 in Mainland China in 2020. Mr. Li is a renowned expert in Internet, computer vision, cloud computing, Internet of Things and artificial intelligence. He

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Haier Smart Home Co., Ltd. 2021 Annual Report

is currently an independent director of the 10th Board of Directors of Haier Smart Home Co., Ltd.
Male, born in 1967. He has 25 years of (New PCEBG) experience in world-class management and consulting companies. He is currently a senior consultant
for Foxconn’s D sub-business group strategy and intelligent manufacturing and a consultant of Xnode, a famous accelerator for startups, and independent
director of the 10th session of the Board of Haier Smart Home Co., Ltd. He served as the vice president (Global) and vice chairman (Greater China) of
Accenture, and the chairman of Shun Zhe Technology Development Co., Ltd. He was a member and the president (Greater China) of Roland Berger’s
Global Management Committee, a member of Roland Berger’s Global Supervisory Board. He was awarded 2015 Outstanding Talent in Jing’an District,
Wu Qi

Shanghai. Mr. Wu’s experience in consulting industry involves transportation/logistics, high-tech manufacturing, tourism, finance, consumer goods, realestate, government departments and other industries. His has extensive experience in development strategy, organizational change, sales and brand strategy,
corporate innovation, digital transformation and intelligent manufacturing, post-merger integration, regional industrial and economic development andupgrading. He is a well-known expert in China in Industry 4.0, transportation and regional planning and development. He served as a consultant for
Hangzhou Bay Development Planning, a member of the Intelligent Manufacturing Expert Committee of Municipal Government, deputy head of the 13thFive-Year Planning Expert Committee of Zhengzhou City, Henan Province, vice chairman of China Cold Chain Alliance.
Female, born in 1970. She is a Chartered Global Management Accountant (CGMA). She joined Haier in August 1992, served as the director of overseas
market development, head of department of financial management, Chief Financial Officer (CFO), senior vice president of Haier Group and the vicechairman of the 10th session of the Board of Haier Smart Home Co., Ltd. She is currently the vice chairwoman, executive vice president of the Board of

Tan Lixia(resigned)

Haier Group, chairwoman of board of directors of Qingdao Haier Biomedical Co., Ltd. and the chairwoman of board of directors of INKON Life
Technology Co., Ltd. She currently holds several social positions including: member of the 12th Standing Committee of the All-China Women’s Federationand the vice president of the China Women Entrepreneurs Association, president of Shandong Women Entrepreneurs Association and vice chairwoman of
the 13th Standing Committee of Qingdao Women’s Federation. In recent years, she was successively awarded Model Worker of Shandong Province,
Outstanding Entrepreneur of the State, Special Allowance of State Council, ‘March 8’ Red-Banner Holders of the State’, Taishan Industry Leading Talent,High-end Financial Talent of Shandong Province and Outstanding Communist Party Member of Shandong Province.

Dai Deming

Male, born in 1962. He is currently a professor and doctoral supervisor of the department of accounting of the Renmin Business School, concurrently

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Haier Smart Home Co., Ltd. 2021 Annual Report(resigned)

holding the position of vice president of Accounting Society of China. He once served as an independent director of Beijing Capital Development Co., Ltd.
and an independent director of the 10th Board of Directors of Haier Smart Home.
Male, born in 1980. He holds a Master’s degree in Business Administration from Renmin University of China. He is a senior engineer. From August 2005
to September 2010, he served as a designer of water heater department of Heater Head Office at Haier Group, an assistant R&D engineer, a R&D engineer
and a R&D model manager of the heater R&D center of the Heater Head Office of Haier Group successively. From September 2010 to October 2015, he

Liu Dalin

was the deputy secretary of the Youth League Committee of Haier Group. From October 2015 to July 2020, he was the deputy secretary of the Disciplinary
Committee of Haier Group. From July 2020 to March 2021, he was the executive deputy secretary of the Disciplinary Committee of Haier Group and thepresident of the Supervisory Committee of Gooday Supply Chain Technologies Co., Ltd. From March 2021 to date, he has been serving as the presidentof the Supervisory Committee, the secretary of Society and Community department and executive deputy secretary of the Disciplinary Committee of HaierGroup. Mr. Liu has been the president of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd. since June 2021.
Female, born in 1969. She once served as the secretary of the Youth League Committee of Haier Smart Home Co., Ltd., the secretary of the labour union

Ma Yingjie

of Haier Smart Home Co., Ltd., the contact person of the customer service department of Qingdao Haier Dishwasher Co., Ltd. Currently, she is the headof Society and Community department and the supervisor of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd.

Yu MiaoMale, born in 1982. Mr. Yu holds a master’s degree. He serves as the legal manager and employee supervisor of the 10th session of the Supervisory
Committee of Haier Smart Home Co., Ltd. since April 2012.
Male, born in 1957, he served as the deputy secretary of Party Committee of Haier Group Air-Conditioner Head Office (海尔集团空调本部), Washing

洗衣机本部), and Haier Group Freezer & Heater Head Office (海尔集团冷柜电热本部), chairman of the labor union of Haier

Wang Peihua

Machine Head Office ((retired)Group Technology and Equipment Head Office, deputy secretary of Discipline Inspection Committee head of the Organizational Department of HaierGroup. He served as the president of the 10th session of the Supervisory Committee of Haier Smart Home Co., Ltd.

Ming Guoqing(retired)Male, born in 1960, served as deputy secretary of Discipline Inspection Committee of Qingdao Refrigerator General Factory, party branch secretary andassistant manager of Qingdao Haier Transportation Company (青岛海尔运输公司), head of the administration department of Qingdao Haier Co., Ltd.,

deputy secretary of party committee, secretary of discipline inspection committee and chairman of labour union of Haier Refrigerator Products Head Office80/366

Haier Smart Home Co., Ltd. 2021 Annual Report(海尔冰箱产品本部), chairman of the labor union of Haier Group, and the supervisor of the 10th session of the Supervisory Committee of Haier Smart

Home Co., Ltd.
Male, born in 1976. He graduated from Wuhan University in 1997 and obtained the double degree in economics and international business administration.
He joined Haier Group in 1997 and currently serves as the general manager of the overseas platform of Haier Smart Home. Mr. Li has held various positions
Li Panin Haier Group since 2004, including the assistant director of Asia-Pacific Division, the manager of the Haier ASEAN Center, the manager of the Overseas
Brands Marketing Center, the manager of the Overseas Strategic Center and the director on the operation of overseas markets. He has extensive frontline
management experience in product planning, brand marketing, market exploration and corporate operation. He is currently the vice president of Haier
Smart Home Co., Ltd.
Male, born in 1973, graduated from University Of International Business and Economics with an Executive Master degree in Business Administration in
2011. He is a member of the Chartered Institute of Management Accountants (CIMA). Mr. Gong Wei served as the financial manager of Haier Smart Home
Co., Ltd., senior financial manager and senior financial analyst of Haier Group, chief financial officer of Haier Washing Machine Head Office (Gong Wei

海尔洗衣机本部), chief financial officer of Haier Air-Conditioner Head Office 海尔空调本部), chief financial officer of White Goods Group. Mr. Gong has
extensive financial management experience. Mr. Gong was granted the honorary titles including Outstanding Young Expert of Qingdao, Outstanding
Accounting Workers of Shandong Province, National Outstanding Accounting Workers, and received several awards, including Top Ten CFO in China by‘New Money’ Magazine (《新理财杂志》)in 2011, 2020 International Finance Leaders of the Year in China. He is currently the chief financial officer andvice president of Haier Smart Home Co., Ltd.
Male, born in 1977. He graduated from the College of Photoelectric Engineering, Chongqing University with a Bachelor’s degree in Engineering in 1998,
and graduated from the Faculty of Business and Economics of The University of Hong Kong with a Master’s degree in Business Administration in 2004.
Huang Xiaowu

From 2009 to 2020, Mr. Huang served as the deputy general manager of Haier Electronics Group Co., Ltd., a subsidiary of the Company, to assist the chief
executive officer in implementing development strategy, and was responsible for investor relations, strategic investment and equity financing. Mr. Huang
Xiaowu has years of extensive experience in commercial banking, investment, industrial capital management and corporate finance. Prior to joining HaierGroup, he worked in Ningbo branch and Shanghai branch of Industrial and Commercial Bank of China, Investment Banking Division of Guosen Securities,

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Haier Smart Home Co., Ltd. 2021 Annual Report

Anglo Chinese Investment Banking Group (英高投资银行集团). He is currently the vice president of Haier Smart Home Co., Ltd.

Male, born in 1978. He graduated from Tianjin College of Commerce in 2001 and obtained a Bachelor’s degree in Heat Supply, Ventilation and Airconditioning Engineering. He obtained the degree of EMBA from School of Economics and Management of Tsinghua University and the INSEAD in 2015.
Wu Yong

Mr. Wu joined Haier in 2001 and currently serves as the general manager of the kitchen appliances and household appliances and the internet of food
platform of Haier Smart Home. Mr. Wu served as the general manager of the PRC Region in manufacturing and production of refrigerators, overseas
marketing and the air-conditioning business has whole-process management experience in high-end manufacturing, marketing and industrial platforms. He
is currently the vice president of Haier Smart Home Co., Ltd.
Male, born in 1976. He graduated from Qingdao University of Science & Technology in 1998 and obtained a Bachelor’s degree in Fine Chemical
Engineering. Mr. Li joined Haier in 1998 and currently serves as the general manager of washing machine and the internet of clothing platform. Mr. Li was
the manufacturing director and he has held important positions of the internet of clothing platform since 2008 with extensive experience in the quality and

Li Yangsystemic management of washing machines, production and manufacturing. The ecological platform of the internet of clothing incubated under his
leadership was awarded the first prize for “Innovation Results in Modern Management of National Light Industry Enterprises” (全国轻工业企业管理现

代化创新成果) in 2019. He received the “Most Promising Entrepreneur in Qingdao in 2018” and the “Advanced Individual in Management Innovation of
National Light Industry Enterprises”. He is currently the vice president of Haier Smart House Co., Ltd.
Male, born in 1978. He graduated from Northeast Electric Power University in 2001 and obtained a Bachelor’s degree in Management Information System.
Mr. Guan joined Haier in 2001 and currently serves as the general manager of water heater and the internet of water platform. Mr. Guan has been responsible
Guan Jiangyong

for product management, production and manufacturing, product marketing and industrial pipeline management and served as a regional general manager,
the market director of the water heater business and the general manager of the internet of water platform and the water heater business. He has wholeprocess management experience in product manufacturing, marketing, corporate planning management and industrial platforms. He is currently the vicepresident of Haier Smart Home Co., Ltd.

Wang Li

Female, born in 1965. She graduated from Qingdao University of Science & Technology in 1986 and obtained a Bachelor’s degree in Heat Supply,
Ventilation and Air-conditioning Engineering. She obtained a Master’s degree in Business Administration from Renmin University of China in June 2013.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Ms. Wang joined Qingdao Air-conditioner Company in 1988. She has held various positions since 1988, including general manager of Haier’s central airconditioner business, general manager of Haier’s residential facilities business and general manager of Haier’s air business. Ms. Wang has management
experience in products and marketing. Ms. Wang has served various industrial positions, including a member of China Refrigeration and Air-Conditioning
Industry Association. Ms. Wang receives grants from the State Council and was awarded the Outstanding Entrepreneur in Light Industry in Shandong
Province, the Labor Model of Qingdao City, the Outstanding Talent in Professional Technology in Qingdao .She is currently the vice president of Haier
Smart Home Co., Ltd.
Female, born in 1964, graduated from Southwestern University of Finance and Economics with a Master’s degree in Economics in 1986. She is a senioreconomist, and she was the lecturer of investment department of China Institute of Finance, deputy head of the Teaching and Research section of Investment
Economy Department, a member of treasury department of Everbright International Investment Consultancy Company, deputy director and director ofgeneral manager office, general manager of business management department and general manager of personnel department, assistant to the generalmanager, executive vice president of Everbright International Investment Consultancy Company; she was the office director of analysts professional
Ming Guozhen

committee of the Securities Association of China, vice director of Qualification Management Department of thedirector of Practice Standards Committee (Securities Association of China, vice

执业标准委员会) of the Securities Association of China. She joined Haier in August 2007 and served as thebusiness director and merger & acquisition director of Haier Asset Operation Division from August 2007 to May 2008. She has been a vice general manager
since May 2008 and the board secretary since April 2009 of Haier Smart Home. She has played a leading role and participated in the introduction ofstrategic investors, M&A of GEA/FPA and internal integration, issue of convertible bonds/exchangeable bonds, issue of D-Share/H-Share. She was awarded
as a member of “Board Secretary Hall of Fame (金牌董秘名人堂)” at the 12th session of New Finance Election in June 2016.She is currently the secretary

to the Board of Haier Smart Home.
Other information□ Applicable √Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

(II)
1.

Appointment of current and departing of Directors, Supervisors andSenior Management during the reporting period

Appointment in shareholder units√ Applicable ◻Not Applicable
Name ofNameshareholder

Positionunit

Start date of

End date of

appointment

appointment

Haier
Liang Haishan

Liang Haishan

COSMO Co.,Ltd.

Haier Group

Director, General manager

Vice Chairman of the Board,
President of the Supervisory
Committee, the Secretary of

Liu Dalin

Haier Group

Society and Community

Corporation

Department, Executive

March 2021

Deputy Secretary of theDisciplinary Committee
Haier
Tan Lixia

COSMO Co.,

September

Director

2014

Ltd.
Tan Lixia

Haier Group

Vice chairwoman, Executive

February

Corporation

Vice President of the Board

2016

Explanation of
appointment inshareholder

Nil

units

2.

Appointment in other units√ Applicable □ Not Applicable

Name

Liang Haishan

Liang HaishanName of other unit
Haier Group Finance Co.,
Ltd.

Position

Director

Qingdao Haier multimedia

Chairman of theCo., Ltd.

Board

84/366

Start date of

End date of

appointment

appointment

Haier Smart Home Co., Ltd. 2021 Annual Report

Wu Changqi

Peking University

Professor

Wu Changqi

China Hua Xia Bank Co., Ltd.

Supervisor

Wu Changqi

Yijiahe Technology Co., Ltd.

Wu Changqi

Shandong University

Independent
director
Dean of Schoolof Management

May 2015

May 2021

August 2018

October 2019

Tianneng Battery Group Co.,

Independent

19 FebruaryLtd.

director

2019

Shenwan Hongyuan Group

Independent

Co., Ltd.

director

Yue Yuen Industrial

Independent(Holdings) Limited

director

Lung Kee (Bermuda)

Independent

Holdings Limited

director

Hangzhou SF Intra-City

Independent

NovemberIndustrial Co., Ltd.

director

2021

Guangzhou Automobile

IndependentGroup Co., Ltd.

director

Wu Changqi

May 2021

Wu Changqi

Wong HakKun

June 2018

June 2018

Wong HakKun

Wong HakKun

May 2020

Wong HakKun

Zhejiang Cangnan Instrument Independent
Wong HakKun

June 2018
Group Company Limited

July 2021

director

Keck Seng Investments (Hong Independent NonYu Hon To

April 2013
Kong) Limited

executive director
Independent Non-Yu Hon To

MS Group Holdings Limited

May 2018
executive director

China Resources Gas Group

Independent Non- December

Limitedexecutive director 2012

Yu Hon To

Independent NonYu Hon To

One Media Group Limited

June 2005
executive director

China Renewable Energy

Independent Non-

Investment Limited

executive director

Yu Hon To

April 2008

85/366

January 2022

Haier Smart Home Co., Ltd. 2021 Annual Report

Independent NonYu Hon To

Playmates Holdings Limited

April 1995

May 2021

March 1999

July 2021

June 2013

September 2021

executive director
Media Chinese International

Independent Non-

Limitedexecutive director

New Century Real Estate

Independent Non-

Investment Trust

executive director

Yu Hon To

Yu Hon To

Independent NonYu Hon To

Playmates Toys Limited

May 2021
executive director
Independent

Lin Sui

Focus Hotmelt Company Ltd.

August 2020

July 2023

director
Applied Artificial Intelligence

Research Center
Li Shipeng

Director
Of the Suzhou Industrial
Technology Research Institute
The Chinese University of

Li Shipeng

Visiting Professor
Hong Kong (Shenzhen)
Qingdao Huaqiao Industrial

Ming Guozhen

Director

July 2008

Co., Ltd.

Tan Lixia

Tan Lixia

Haier Group

Authorized(Qingdao) Jinying Holding

representative,

Co.,Ltd.

Director

Wanlian Holding Co., Ltd. (Tan Lixia

Non-executive

Bank of Qingdao Co., Ltd.

链控股有限公司)

Director

July 2014

April 2012

万 Chairwoman,
Manager

Yingkang Life Technology Co.,

Tan Lixia

Chairwoman

16 May 2019

Chairwoman

July 2018

Ltd.
Qingdao Haier Biomedical Co.,

Tan Lixia
Ltd.

China Zheshang Bank Co.,

Independent Non-

Ltd.

executive director

Dai Deming

March 201586/366

July 2021

Haier Smart Home Co., Ltd. 2021 Annual Report

Independent NonDai Deming

BOC Aviation Limited
executive director May 2016
Independent Non-

Dai Deming

CSC Financial Co., Ltd.
executive director August 2016
Power Construction

Independent Non-

Corporation of China, Ltd.

executive director March 2018

Poly Developments andIndependent Non- September

Dai Deming

Dai Deming
Holdings Corporation Limited executive director 2018
Explanation of
appointment in

Nilother units

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Haier Smart Home Co., Ltd. 2021 Annual Report(III)

Compensation of Directors, Supervisors and Senior Management√ Applicable □ Not Applicable
Decision-making process of

The decision-making process of the Company for thecompensation of Directors,

remuneration of directors, supervisors and senior management

Supervisors and Seniorpersonnel is to establish a platform, define standards,

Management

communicate and negotiate, and make objective decisions. The
Remuneration Committee of the Company shall formulate theremuneration standards, adjust principles, and assess andimplement the principles and submit to the Board of Directors

for consideration and approval. The actual remuneration for theyear is determined according to the evaluation results such astheecosystem

micro-community

contract,

Rendanheyi

scorecard, vertical and horizontal indicators and win-win value
appreciation table.

Determining basis of matrix

The 2021 remuneration system of the management of thecompensation of Directors,

Company reflects the ecosystem micro-community contract,

Supervisors and Seniorhigh value-adding and high sharing, which is linked with win-

Management

win value appraisal and Rendanheyi principle Vertically, theRendanheyi scorecard represents strategic undertaking andecosystem

micro-community

upgradeinitiation,

andhorizontally, it embodies the global leadership and ecosystemachievements of the market competitiveness, which leads to theupgrading from “high-end brand” to “scenario brand” and“ecosystem brand”. The remuneration competitiveness isdetermined based on elements of “strategic undertaking”,“market competitiveness”, “micro-community initiation” and“ecosystem achievements”. The senior management receives anannual assessment of performance for the year, which is a key
factor in determining bonuses and On one hand, the overall
Rendanheyi

remuneration

systemforms

adiversified

combination of the management’s remuneration incentives,

which is oriented towards creating user value and ecosystem
value. On the other hand, it also makes the remuneration

mechanism of the management more flexible, which encourages
innovation and maximization of individual’s value. At the sametime, the Company has implemented measures such as the core

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Haier Smart Home Co., Ltd. 2021 Annual Report

employee stock ownership scheme, share option incentive toenhance the incentive and mechanisms and establish a benefits
and risk sharing mechanism between the Company and theoperational and managerial personnel based on the user oriented
value creation principle.

After the approval by the general meeting, the adjusted
maximum allowance for the director of the Tenth Session of theBoard of Directors is RMB260,000/year before tax, of which

fixed allowance is RMB210,000/year, and the maximum
performance allowance is RMB50,000/year. The specificamount of performance allowance will be determined according
to the comprehensive consideration of directors’ contribution to

the decision-making of the Board, effectiveness of resolutions
and suggestions to the Board, participation of the Board of
Directors, attendance of board meetings. The travelling
expenses of directors attending Board meetings and general

meetings and the expenses required for performing their duties
and according to the Articles of Association of the Company
will be reimbursed.

Actual compensation paid to
Directors, Supervisors and Senior

Paid as prescribed.

Management
Total of actual compensation
paid to all Directors, Supervisors
and Senior Management at the

RMB18,088,500

end of the reporting period(IV) Changes in of Directors, supervisors and senior management of the Company√Applicable □Not Applicable
Name

Position

Method of Change

Reason for Change

Xie Juzhi

Vice President

Election

New Election

Yu Hon To

Director

Election

New Election

Li Kam Fun

Director

Election

New Election

Li Shipeng

Independent director

Election

New Election

Wu Qi

Independent director

Election

New Election

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Haier Smart Home Co., Ltd. 2021 Annual Report

Liu Dalin

Chairman of the Board

Election

New Electionof Supervisors
Ma Yinjie

Supervisor

Election

New Election

Li PanVice President

Appointment

New Appointment

Huang Xiaowu

Vice President

Appointment

New Appointment

Wu Yong

Vice President

Appointment

New Appointment

Li Yang

Vice President

Appointment

New Appointment

Guan Jiangwu

Vice President

Appointment

New Appointment

Wang Li

Vice President

Appointment

New Appointment

Tan Lixia

Vice Chairman of the

Resignation

Resignation

Resignation

Resignation on

Board
Dai Deming

Independent director

expiration
Wang Peihua

Chairman of the Board

Resignation

Resignation

Resignation

Resignationof Supervisor
Ming Guoqing(V)

Supervisor

Explanation of penalties imposed by securities regulators in the past three years□Applicable √Not Applicable(VI) Others□Applicable √Not Applicable

V.

RELEVANT INFORMATION ON THE BOARD MEETINGS HELD DURING THE
REPORTING PERIOD

VI.

Meeting

Date

Resolutions approved
Considered and approved the Proposal on Amending the
Articles of Association of Haier Smart Home Co., Ltd., theProposal on the Election of Directors of Haier Smart Home
Co., Ltd., the Proposal on the Election of Independent Non-

The 15th meeting ofexecutive Directors of Haier Smart Home Co., Ltd., thethe Tenth session of

7 February

Proposal on Reorganizing the Senior Management Team of

the Board of2021

Haier Smart Home Co., Ltd., the Proposal on Replacing H-

Directors

share Company Secretary of Haier Smart Home Co., Ltd.,the Proposal on the Appointment of an Audit Firm forInternational Accounting Standards in 2020 of Haier Smart
Home Co., Ltd., the Proposal on Convening the First
Extraordinary General Meeting of 2021 and the First Class

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Haier Smart Home Co., Ltd. 2021 Annual Report

Meeting of A-Shares / D-Shares / H-Shares of 2021 ofHaier Smart Home Co., Ltd.

Considered and approved the Proposal on Establishment ofEnvironmental, Social and Governance Committee andAppointment of Members of Haier Smart Home Co., Ltd.,the Proposal on Formulation of the Implementing Rules of
The 16th meeting of
the Tenth session of
the Board of

the Environmental, Social and Governance Committee of
5 March 2021

Directors

the Board of Directors of Haier Smart Home Co., Ltd., theProposal on Adjusting the Composition of Special
Committees of the Board of Directors of Haier Smart Home
Co., Ltd., the Proposal on Election of Vice Chairman of theCompany of Haier Smart Home Co., Ltd., and the Proposalon the Scheme of Repurchase of a Portion of A-share Public
Shares of Haier Smart Home Co., Ltd.
Considered and approved Report on the 2020 Annual
Financial Statements of Haier Smart Home Co., Ltd., 2020
Annual Report and Annual Report Summary of Haier Smart
Home Co., Ltd., 2020 Annual Work Report of the Board of
Directors of Haier Smart Home Co., Ltd., 2020 Annual
Corporate Social Responsibility Report of Haier Smart
Home Co., Ltd., 2020 Annual Internal Control Evaluation
Report of Haier Smart Home Co., Ltd., Internal Control
Audit Report of Haier Smart Home Co., Ltd., 2020 Annual
Profit Distribution Plan of Haier Smart Home Co., Ltd., theThe 17th meeting of
the Tenth session of

30 March

the Board of2021

Directors

Resolution on the Anticipated Provision of Guarantees for
its Subsidiaries in 2021, the Resolution on the Conduct ofForeign Exchange Fund Derivatives Business of Haier
Smart Home Co., Ltd., the Resolution on the Election of
Independent Director of Haier Smart Home Co., Ltd., theResolution on Adjusting the Allowance of Directors ofHaier Smart Home Co., Ltd., the Resolution on Closing
CertainFund-raising

Projects

through

Convertible

Corporate Bonds and Permanently Supplementing theWorking Capital with the Surplus Funds of Haier Smart
Home Co., Ltd. , the Resolution on the Postponement of
Certain Investment Projects with the Funds Raised from
Convertible Corporate Bonds of Haier Smart Home Co.,

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Haier Smart Home Co., Ltd. 2021 Annual ReportLtd., the Resolution on the Special Report on the Deposit
and Actual Use of the Funds Raised in 2020 of Haier Smart
Home Co., Ltd., the Resolution on Proposing the General
Meeting to Grant General Mandate to the Board of
Directors on Additional Issuance of H-shares of Haier
Smart Home Co., Ltd., the Resolution on Proposing theGeneral Meeting to Grant General Mandate to the Board of
Directors on Additional Issuance of D-shares of Haier
Smart Home Co., Ltd., the Resolution on Proposing theGeneral Meeting to Grant the General Mandate to the Boardof Directors to Repurchase not more than 10% of the Total
Number of H-shares of the Company in Issue of Haier
Smart Home Co., Ltd., the Resolution on Proposing theGeneral Meeting to Grant the General Mandate to the Boardof Directors to Repurchase not more than 10% of the Total
Number of D-shares of the Company in Issue of Haier
Smart Home Co., Ltd., the Resolution on Amending the
Articles of Association of Haier Smart Home Co., Ltd., theResolution on Amending the Rules of Procedure for the
Board of Directors of Haier Smart Home Co., Ltd., theResolution on Amending the Management System ofExternal Guarantees of Haier Smart Home Co., Ltd., theResolution on Amending the Management System ofInformation Disclosure of Haier Smart Home Co., Ltd., theResolution on Unified Expression of Amended Parts ofCorporate Systems of Haier Smart Home Co., Ltd., and the
Resolution on Convening the 2020 Annual General
Meeting and the Second A-shares / D-shares / H-sharesClass Meetings of 2021 of Haier Smart Home Co., Ltd.
Considered and approved the 2021 First Quarterly Reportof Haier Smart Home Co., Ltd., the Proposal on ReThe 18th meeting of
the Tenth session of
the Board of
Directors

appointment of PRC GAAP Auditor of Haier Smart Home
29 April 2021

Co., Ltd., the Proposal on Re-appointment of IFRS Auditorof Haier Smart Home Co., Ltd., Proposal of Haier Smart
Home Co., Ltd. on Renewal of the Financial Services
Framework Agreement and its Expected Related Party
Transaction Limit with Haier Group and Haier Finance

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Haier Smart Home Co., Ltd. 2021 Annual Report

Considered and approved the A Share Core Employee
Stock Ownership Plan of Haier Smart Home Co.,
Ltd.(2021-2025) (draft) and its Abstract, the H Share Core
Employee Stock Ownership Plan of Haier Smart Home Co.,
Ltd.(2021-2025) (draft) and its Abstract, Resolution on
Proposal to the General Meeting for Authorizing the Board

The 19th meeting of
the Tenth session of
the Board ofof Directors to Handle Matters Relevant to the Company's
25 May 2021

Core Employee Stock Ownership Plan of Haier Smart
Home Co., Ltd., H Share Restricted Share Unit Scheme of

Directors

Haier Smart Home Co., Ltd. (2021-2025) (draft), theResolution on Proposal to the General Meeting to Authorize
the Board of Directors or its Authorized Persons to Handle
Matters Related to Restricted Share Unit Plans of Haier
Smart Home Co., Ltd.

The 20th meeting of
the Tenth session of
the Board ofConsidered and approved the Resolution of Haier Smart
25 June 2021

Home Co., Ltd. on Adjustments of the Composition of theSpecial Committees of the Board

Directors
Considered and approved the 2021 A Share Option
Incentive Scheme of Haier Smart Home Co., Ltd. (draft)
and Summary, the 2021 Management Practices for theAssessment of A Share Option Incentive Scheme of HaierThe 21th meeting of
the Tenth session of
the Board of

Smart Home Co., Ltd., the Resolution of Haier Smart Home
29 July 2021

Directors

Co., Ltd. on Proposal to the General Meeting to Authorize
the Board of Directors and its Authorized Persons to Take
Full Control of the Matters Relating to the Company's 2021
A Share Option Incentive Scheme, the Proposal on
Convening the Second Extraordinary General Meeting of2021 and the Third Class Meeting of A-Shares / D-Shares /H-Shares of 2021 of Haier Smart Home Co., Ltd.
Considered and approved 2021 Interim Report of Haier

22nd meeting of theTenth session of theBoard of Directorsof Haier Smart
Home Co., Ltd.

Smart Home Co., Ltd. and its Summary, the Special Report
30 Auguston the Deposit and Actual Use of Raised Funds in the First

2021

Half of 2021 of Haier Smart Home Co., Ltd., the Proposalon the Use of Idle Raised Funds for Cash Management ofHaier Smart Home Co., Ltd.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Considered and approved the Resolution of Haier Smart
Home Co., Ltd. on Adjusting the Exercise Price of 2021 A
Share Stock Option Incentive Plan, the Resolution of Haier
23rd meeting of theTenth session of theBoard of Directorsof Haier Smart

Smart Home Co., Ltd. on First Grant of Stock Options to
15 September
2021

the Participants, the Resolution of Haier Smart Home Co.,
Ltd. on the Issue and Listing of New H Shares on the Main
Board of the Stock Exchange of Hong Kong Limited, theHome Co., Ltd.

Resolution

of

Haier

Smart

Home

Co.,

Ltd.

on

Determination of Authorized Person with Full Authority to
Handle Matters Relating to the Company's Overseas
Issuance of H Shares and Listing
24th meeting of theTenth session of theBoard of Directorsof Haier Smart

Considered and approved the 2021 Third Quarterly Reportof Haier Smart Home Co., Ltd., the Resolution of Haier

29 October

Smart Home Co., Ltd. on Acquisition of Equity Interests in

2021

Subsidiaries Held by Haier Group Corporation andHome Co., Ltd.

Connected Transactions
Considered and approved the Resolution of Haier Smart

25th meeting of theTenth session of theBoard of Directorsof Haier Smart

Home Co., Ltd. on the Grant of the Reserved Share Options
15 December

under the 2021 A Share Option Incentive Scheme to the2021

Participants, the Resolution of Haier Smart Home Co., Ltd.
on Additional Capital Injection into a Subsidiary andHome Co., Ltd.

Establishment of Smart Lifestyle Appliances Division

VI. PERFORMANCE OF DUTIES BY DIRECTORS(I)

Attendance of board meetings and general meetings by directors
Attendances
Attendance of Board meetingsat general
meetings

Whether an
Name ofIndependent

Absence from
Required

director

Number of

director or

Attendanattendances of

not

two
Attendance byAttendance

ce inattendance
AbsenceBoard

telecommunicationconsecutive

by proxyof generalpersonmeetings inmeetings

meetings
person or not

Liang
NO

11

11

0

Haishan

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0

0

NO

8

Haier Smart Home Co., Ltd. 2021 Annual Report

Li
NO

11

11

2

0

0

NO

8

NO

10

10

0

0

0

NO

8

NO

11

11

11

0

0

NO

4

Lin Sui

NO

11

11

11

0

0

NO

0

Yu Hon To

NO

10

10

10

0

0

NO

8

NO

10

10

10

0

0

NO

8

YES

11

11

11

0

0

NO

4

YES

11

11

11

0

0

NO

4

Li Shipeng

YES

10

10

9

0

0

NO

4

Wu Qi

YES

6

6

6

0

0

NO

0

NO

3

3

2

0

0

NO

4

YES

5

5

5

0

0

NO

0

Huagang
XieJuzhi
Wu
Changqi

Li KamFun
Chien Dachun
Wong
HakKunTan Lixia(Resigned)
Dai
Deming(Resigned)

Explanation for absence from two consecutive Board meetings in person□ Applicable √ Not Applicable
Number of Board meetings held in the year

11

Of which: Number of on-site meetings

0

Number of meetings held by telecommunication0

Number of meetings held both on site and by

11

telecommunication(II)

Directors’ objection to the relevant matters of the Company□ Applicable √ Not Applicable(III)

Others□ Applicable √ Not ApplicableVII.

THE SPECIAL COMMITTEES OF THE BOARD√ Applicable□ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report(1). Personnel of The Special Committees of the Board
Categories of The Special

Name of Personnel

Committees
Audit Committee

Nomination Committee

Wong HakKun, Chien Da-chun, Wu Qi, Yu Hon To, Wu
Changqi
Wu Qi, Chien Da-chun, Wong HakKun, Li Shipeng, Liang
Haishan, Yu Hon To

Remuneration and Appraisal

Chien Da-chun, Li Shipeng, Wu Qi, Liang Haishan, Wu

Committee

Changqi

Strategy Committee

Liang Haishan, XieJuzhi, Li Huagang, Lin Sui, Wu Qi, Li
Shipeng

ESG Committee (Environment,
Society and Governance

Li Kam Fun, Li Huagang, Lin Sui, Chien Da-chunCommittee)(2). The Company convened 7 Audit Committee meetings during the reporting period

Date of
Meeting

Major
Contents of Meeting

Opinions and
Suggestions

Other Notes
on
Performanceof Duty

Considered and approved 2020 Annual Report on
25 January
2021

audit work plan of Haier Smart Home Co., Ltd., theResolution of Haier Smart Home Co., Ltd. on
Appointments of International Accounting Standard

No
Objections

Nil

Auditor in 2020
Considered and Approved the Preliminary
Considerations on the 2020 Annual Financial
26 March

Report of Haier Smart Home Co., Ltd., the

No

2021

Preliminary Considerations on the 2020 Annual

Objections

Nil

Audit Report of Internal Control of Haier Smart
Home Co., Ltd.
Considered and approved the 2020 Annual
Financial Accounts Report of Haier Smart Home
30 March
2021

Co., Ltd., the 2020 Annual Report on the SelfAssessment Report on Internal Control of Haier
Smart Home Co., Ltd., the 2020 Annual Audit
Report of Internal Control of Haier Smart Home
Co., Ltd., the resolution of Haier Smart Home Co.,

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No objections

Nil

Haier Smart Home Co., Ltd. 2021 Annual ReportLtd. on the Expected Provision of Guarantee forsubsidiaries in 2021, the Resolution of Haier Smart
Home Co., Ltd. on Conducting foreign exchange
funds derivatives business, 2020 Annual Profit
Distribution Plan of Haier Smart Home Co., Ltd.,
2020 Annual Report on Performance of Duties of
the Audit Committee of the Board of Haier Smart
Home Co., Ltd.
Considered and approved the 2021 First Quarterly
Financial Report of Haier Smart Home Co., Ltd.,the Resolution of Haier Smart Home Co., Ltd. on
28 April2021

Re-assignment of International AccountingStandard Auditor, the Resolution of Haier Smart
Home Co., Ltd. on Renewing the Financial Service

No
Objections

Nil

Framework Agreements with Haier Group
Corporation and Estimated Amount of ConnectedTransactions
26 AugustConsidered and approved the 2021 Interim

No

2021

Financial Report of Haier Smart Home Co., Ltd.

Objections

Nil

Considered and approved the 2021 third quarterly
27
October
2021

Financial Report of Haier Smart Home Co., Ltd.,the Resolution of Haier Smart Home Co., Ltd. on

NoAcquisition of Equity Interests in Subsidiaries held

Objections

Nil

by Haier Group Corporation and ConnectedTransactions.

20
December
2021

Considered and approved the 2021 Annual ReportNo

on Audit work Plan of Haier Smart Home Co., Ltd.

Objections

Nil(3). The Company convened 2 Nomination Committee meetings during the reporting period
Major

Other Notes on

Opinions andPerformance ofSuggestions

Duty

Date ofContents of Meeting
Meeting

7
February
2021

Considered and approved the resolution of Haier Smart Home
Co., Ltd. on Election of Additional Directors of the Company,Nothe resolution of Haier Smart Home Co., Ltd. on Election of

Objections

Additional Independent Non-executive directors of the

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Haier Smart Home Co., Ltd. 2021 Annual ReportCompany, the Resolution of Haier Smart Home Co., Ltd. on
Restructuring of the Company's Senior Management Team
Considered and approved the Report of Nomination
Committee of the Board of Haier Smart Home Co., Ltd. on the

30 March
2021

Performance of Duty of Current Directors, Supervisors andSenior Management, the Resolution of Haier Smart Home Co.,
Ltd. on the Election of Independent directors, the 2020 AnnualNo
Objections

Nil

Report on the Performance of Duty of the Nomination
Committee of the Board of Haier Smart Home Co., Ltd.

(4). The Company convened 4 Remuneration and Appraisal Committee meetings during the reporting
periodMajor

Other Notes on

Opinions andPerformance

Suggestionsof Duty

Date ofContents of Meeting
Meeting

Considered and approved the 2020 Annual Report of Haier
Smart Home Co., Ltd. on Incentives for Senior Managementof the Company and Implementation of Remuneration
Assessment for Directors and Senior Management, the 2021
30 March

No
Annual Report of Haier Smart Home Co., Ltd. on

2021

Nil
Objections

Remuneration and Assessment Scheme of Directors andSenior Management, the 2020 Annual Report of Haier Smart
Home Co., Ltd. on Performance of Duties of theRemuneration and Appraisal Committee of the Board
Considered and approved Stock Ownership Plan of A Share
Core Employee of Haier Smart Home Co., Ltd.(202125 May2025)(Draft) and Summary, Stock Ownership Plan of H Share

No

2021

Core Employee of Haier Smart Home Co., Ltd.(2021-

Objections

Nil2025)(Draft) and Summary, the H Share Restricted Share Unit
Scheme of Haier Smart Home Co., Ltd. (2021-2025) (Draft)
Considered and approved the 2021 A Share Option Incentive
29 July

Scheme of Haier Smart Home Co., Ltd. (draft) and Summary,

No

2021

the 2021 Management Practices for the assessment of A Share

Objections

Nil
Option Incentive Scheme of Haier Smart Home Co., Ltd..
15

The Resolution of Haier Smart Home Co., Ltd. on Grant ofDecemberReserved Stock Options under the 2021 A Share Stock Option

No
Nil
Objections
2021

Incentive Plan to Incentive Recipients

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Haier Smart Home Co., Ltd. 2021 Annual Report(5). The Company convened 3 Strategy Committee meetings during the reporting period
Major

Other Notes on

Opinions andPerformance

Suggestionsof Duty

Date ofContents of Meeting
Meeting

Considered and approved the Resolution of Haier Smart
Home Co., Ltd. on the Closing of Some the Convertible
Corporate Bonds Raised Funds Investment Projects andAllocation of the Surplus Proceeds as Supplementary
30 March

Working Capital on a Permanent Basis, the Resolution of

No

2021

Haier Smart Home Co., Ltd. on the Postponement of

Objections

Nil
Some Convertible Corporate Bond Raised Funds
Investment Projects, the 2020 Annual Report on the
Performance of Duties of the Strategy Committee of theBoard of Haier Smart Home Co., Ltd.
Considered and approved the Resolution of Haier Smart
29 OctoberHome Co., Ltd. on Acquisition of Equity Interests in

No

2021

Subsidiaries held by Haier Group Corporation andObjections

Nil
Connected Transactions
Considered and approved the Resolution of Haier Smart
15
Home Co., Ltd. on Capital Increase to subsidiaries andNoestablishing the Business Division of Smart Living

Objections

December

Nil

2021
Appliances.

(6). The Company convened 1 meeting of the ESG Committee during the reporting period

Date of
Meeting

29 March
2021

Major Opinions

Contents of Meetingand Suggestions

Other Notes on
Performance of
Duty

Considered and approved the 2020 Social
Responsibility Report of Haier Smart
Home Co., Ltd.

(7). Details of Disagreements□ Applicable √ Not Applicable

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No Objections

Nil

Haier Smart Home Co., Ltd. 2021 Annual Report

VIII.

SUPERVISORY COMMITTEE’ EXPLANATION ON RISKS ABOUT THE
COMPANY□ Applicable √ Not Applicable
Supervisory Committee had no objections to the supervising items during the reporting period.

IX.

INFORMATION ON STAFF OF THE PARENT COMPANY AND PRINCIPALSUBSIDIARIES AT THE END OF THE REPORTING PERIOD(I)

Staff Information

Number of staff of the parent company

68

Number of staff of Principal subsidiaries

104,806

Total number of staff

104,874

Number of employees whose retirement expenses are borne by the parent

0

company and the principal subsidiaries
Breakdown by Function
Function

NumberProduction

60,286

Sales

18,283

Technical

22,161

Financial

1,729

Administrative

2,415
Total

104,874

Breakdown by Education Background
Education

Number(person)

Bachelor and above

30,898

College Diploma

26,466

Secondary vocational training diploma and below

47,510

Total

(II)

104,874

Remuneration policies√ Applicable □ Not Applicable
The Company implements a value-creation-centric, user-paid, and Rendanheyi remuneration
system, which takes user value-added experience as a test and originates from the Haier strategic profit
and loss statement. It assesses the creation of user value, ecosystem micro-community initiation upgrade,target-oriented budget implementation, ecosystem results and continuous optimization based on
ecosystem micro-community contracts, Rendanheyi scorecard and win-win value appreciation table.

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Haier Smart Home Co., Ltd. 2021 Annual Report

This incentive mechanism guides the user-paid salary, makers for everyone, and sharing and win-win
oriented, creates ecosystem value and builds the ecosystem brand of the Internet of Things.

(III)

Personnel Training√ Applicable □ Not Applicable
The Company adheres to the concept of “Everyone can develop, everyone should be heard” andbuilds an ecological platform in the era of Internet of Things, thus realizing the best experience andaccelerated development of creators through building a system of non-linear development and diversified
cultivation.
The Company puts high priority on talent cultivation, abundant study resources and diversifiedstudy forms, in order to facilitate makers to improve their professionalism, expertise and leadership skills.
The training courses include corporate culture, project management, English open classes, office skills,
series of professional classes, etc., simultaneously adopting live streaming, offline customization, online
studying, community forums and other forms of studying, building an open, sharing, efficient anddiversified studying ecosystem of Smart Living.
For details please refer to 2021 Environment, Social and Governance Report of Haier Smart Home
Co., Ltd. published on the same date as this report.

(IV)

Labor Outsourcing□ Applicable √ Not Applicable

X. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF CAPITALRESERVE(I)

Formulation, implementation or adjustment of the cash dividend policies√ Applicable □ Not Applicable
The Company’s 2020 profit distribution plan was passed on its 2020 Annual General Meeting heldon 25 June 2021: based on the Company’s total existing shares (deducting the repurchased shares) of
9,346,772,322 (including 6,262,154,495 A shares , 271,013,973 D shares and 2,813,603,854 H shares),it was proposed that the Company would distribute cash dividends of RMB3.66 (tax inclusive) per 10
shares to all shareholders, with a total amount before tax of RMB3,420,918,669.85(tax inclusive). The
plan was implemented and completed in August 2021. Details were set out in the Announcement on
Implementation of Rights and Interests Distribution of A-shares for 2020 of Haier Smart Home Co., Ltd.
(No: L2021-066) published by the Company on the four major securities newspapers and the website ofShanghai Stock Exchange on 17 August 2021 and relevant announcements in respect of dividend
distribution of D shares and H shares published on the Company’s website, Hong Kong Stock Exchange
and other publication platforms.

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Haier Smart Home Co., Ltd. 2021 Annual Report

The Company has always applied a stable and sustainable profit distribution policy. During thereporting period, the Company strictly followed the requirements set out in the Articles of Associationand in the Shareholder Return Plan for the Next Three Years of the Company. During the formulation of
the profit distribution plan, the Company took full account of return for investors, the long-term interestsof the Company, overall interests of all shareholders and sustainable development of the Company, andcontinued to implement the stable dividend distribution policy to provide investors an opportunity toshare the growth of value, so that investors could form the expectation of a stable return. The procedures
and mechanisms for decision-making such as Articles of Association and planning of return ofshareholders implemented by the Company were complete in compliance with laws and regulations. The
process was open and transparent while the standard and ratio of dividends was clear. Responsibilities
of independent directors were clear during the policy-making process, and independent directors were
given the opportunities to play their roles. Minority shareholders were also given the opportunity to fully
express their views and demands, and the legitimate interests of minority shareholders were adequately
protected.
The dividend distribution plan of 2021 of the Company: based on the total number of shares after
deducting the repurchased shares on equity interest record date for future profit distribution, it is proposedthat the Company will distribute cash dividend of RMB4.60 per 10 shares (tax inclusive) with cash
dividend of RMB 4,320,413,011.54. related to the Company’s principal business in order to maintainsustainable and stable development and to create value for investors. The proportion of this distribution
is 33.1% of the net profit attributable to owners’ parent company in 2021 (In 2021, the Company spent
RMB2.202 billion and HK$1 billion on the purchase of A shares and H shares; if this is included in cash
dividends, the ratio of cash dividends to net profit attributable to owners’ parent company for the year
would be 56.3%).100% dividend is paid in cash.

(II)

Notes to the cash dividend policies√ Applicable□ Not Applicable
Whether in compliance with regulations of the Articles of Association andRequirements of the resolutions of the general meeting√Yes □No

Whether the standard and ratio of dividends were clear√Yes □No

Whether relevant procedures and mechanisms for decision-making were complete√Yes □No

Whether independent directors performed their duties and responsibilities√Yes □No

Whether minority shareholders were given the opportunity to fully express their√Yes □No

views and demands, and whether their legitimate interests were adequately
protected

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The Company made profits and the profits for distribution to the owners’ Parent
Company was positive during the reporting period, but no cash profit distribution plan
was proposed; the Company should disclose the reasons in detail and the purpose ofundistributed profits□Applicable √Not Applicable
XI.

THE

COMPANY’SSHARE

OPTIONINCENTIVESCHEME,EMPLOYEESHAREHOLDING PLAN OR OTHER EMPLOYEE INCENTIVE MEASURES AND ITSINFLUENCE(I)

Matters disclosed in temporary announcements and without any subsequent progress orchange√Applicable □Not Applicable
Summary of matters

Query index

Partial Vesting of Employee Stock Ownership Plan

For details, please refer to the Announcement ofand Termination of the First Phase of Employee Stock

Haier Smart Home Co., Ltd. on Vesting of Interests

Ownership Plan During the Reporting period, pursuant

under the Core Employee Stock Ownership Plan

to the "Core Employee Stock Ownership Plan of Qingdao

and the Termination of the First Core Employee

Haier Co., Ltd (Draft)" (the "First phase ESOP"), theStock Ownership Plan (L2021-001) disclosed by"Second Phase Stock Ownership Plan of Core Employee

the Company on 29 January 2021.

：

Stock Ownership Plan of Qingdao Haier Co., Ltd (Draft)"(the "Second Phase ESOP"), the "Third Phase Stock
Ownership Plan of Core Employee Stock Ownership Planof Qingdao Haier Co., Ltd (Draft)" (the "Third Phase of
ESOP"), on 15 January 2021, the Management
Committee resolved that: (1) the First phase ESOP to bevested, 33 persons who pass the appraisal vest 1,783,038
shares; (2) Second Phase ESOP to be vested, 116 persons
who pass the appraisal vest 1,132,832 shares; (3) Third
Phase ESOP to be vested, 32 persons who pass theappraisal vest 179,351 shares. Directors, supervisors andsenior management of the Company are entitled to vest a
total of 1,339,483 shares. Any change in their stock
ownership is subject to the relevant provisions of theRules Governing the Shares of the Company Held byDirectors, Supervisors and Senior Management of Listed
Companies and Changes Thereof. The Company has, inaccordance with the aforesaid resolutions, completed thetransfer of the relevant shares on 27 January 2021 at the103/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Shanghai Branch of the China Securities Depository andClearing Corporation, with an aggregate number of
3,095,221 shares. During the reporting period, vesting ofshares of the First Phase ESOP were completed and all
assets of the stock ownership plan are in the form ofmonetary funds. In accordance with the relevant
provisions of the First Phase ESOP, the First Phase ESOP
has been implemented and terminated. Upon completionof the liquidation and allocation of assets, the remaining
capital was remitted to the Company.
Introduction of First Phase A Share Employee Stock

For details, please refer to the Core Employee A

Ownership Plan and H Share Restricted Share Unit

Share Ownership Plan of Haier Smart Home Co.,

Scheme：In order to improve the corporate governance Ltd (for Years 2021–2025) (Draft), the Coremechanism, create value for shareholders and promote the

Employees H Share Ownership Plan of Haier Smartfull implementation of the Company's IoT smart home

Home Co., Ltd (for Years 2021– 2025) (Draft), H

brand strategy, the Company introduced the Core

Share Restricted Share Unit Scheme of Haier Smart

Employees A Share Ownership Plan of Haier Smart

Home Co., Ltd and relevant contents disclosed byHome Co., Ltd (for Years 2021–2025) (Draft) and its

the Company on 26 May 2021.

Summary , the Core Employees H Share Ownership Planof Haier Smart Home Co., Ltd (for Years 2021– 2025)(Draft) and its Summary and H Share Restricted Share
Unit Scheme of Haier Smart Home Co., Ltd upon theapproval at the 2020 Annual General Meeting convened
on 25 June 2021. During the reporting period, the sharesfor the A-share and H-share ESOPs and the H Share
Restricted Share Unit Scheme for 2021 were purchased.
Termination of the Second Phase and Third Phase

For details, please refer to the Announcement of

Employee Stock Ownership Plan During the Reporting

Haier Smart Home Co., Ltd on the Termination of

period, all 721,736 and 5,374,465 shares held under thethe Second Phase and Third Phase Employee Stock

Second Phase ESOP and the Third Phase ESOP,

Ownership Plan under the Core Employee Stockrespectively, have been sold, and all assets of the stock

Ownership Plan (L2021-037) disclosed by theownership plan are monetary funds. In accordance with

Company on 15 May 2021：

the relevant provisions of the Second Phase ESOP and theThird Phase ESOP, the aforementioned plans have been
implemented and terminated. Upon completion of theliquidation and allocation of assets, the remaining capital
was remitted to the Company.

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Vesting of the fourth Phase Employee Stock
Ownership Plan

For details, please refer to the Announcement of： During the reporting period, Haier Smart Home Co., Ltd on Vesting of the fourth

according to the Phase IV ESOPs under Core Employee

Phase Employee Stock Ownership Plan (L 2021-

Stock Ownership Plan of Qingdao Haier Co., Ltd. (Draft)059) disclosed by the Company on 30 July 2021.

and Summary(hereinafter referred to as “Phase IV

ESOPs”), after being resolved by the management
committee, a total of 575 employees were entitled toreceive 8,719,368 shares in July 2021, The directors,
supervisors and senior management of the Company wereentitled to receive 1,401,617 shares, any change in theshares must comply with the relevant provisions of theRules on the Management of Shares Held by the
Directors, Supervisors and Senior Management of Listed《上市公司董事、監事和高級管理人員所持本公司股份及其變動管理規則》 ). According to the aforesaid resolution, theCompanies and the Changes Thereof (Company completed the transfer of relevant shares at the
Shanghai branch of the China Securities Depository andClearing Corporation Limited on 28 July 2021 with theaggregated amount of 8,719,368 shares. The directors,
supervisors and senior management of the Company wereentitled to receive 1,401,617 shares.

： For details, please refer to the A Share Stock Option

Introduction of A Share Stock Option Incentive PlanAs the Company's high-end brands continue to expand

Incentive Plan of Haier Smart Home Co., Ltd (draft)and its IoT scenario strategy continues to evolve, theand relevant contents disclosed by the Company on

Company needs more focused strategic more committed

30 July 2021.

management, as well as a matching long-term incentive
plan to supplement. Therefore, approved at theExtraordinary General Meeting and Class Meeting
convened on 15 September 2021, the Company
introduced the 2021 A share Stock Option Incentive Plan.
The proposed stock options granted to the incentive
recipients were 51 million shares, among which were 46
million granted and 5 million.

(II)

Incentive events not disclosed in provisional announcements or with subsequentdevelopment

Equity incentive

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Haier Smart Home Co., Ltd. 2021 Annual Report□Applicable √Not Applicable
Other explanations□Applicable √Not Applicable
Employee stock ownership plan
□Applicable √Not Applicable
Other Incentives□Applicable √Not Applicable(III)

Share option granted to directors and senior management during the reporting period√Applicable □Not Applicable
Unit: 10,000 shares

Name

Position

Number ofstock
options
held at the
beginningof the year

Number of
new stock
options
grantedduring thereportingperiodExercisable
sharesduring thereportingperiodSharessubject tostock
optionexercisedduring thereportingperiodStockoptions
exercise
price
(RMB)

Number ofstock
options
held at theending ofthereportingperiodMarketvalue atthe end ofthereportingperiod
(RMB)

0

91.39

0

0

25.63

91.39

29.89

0

91.39

0

0

25.63

91.39

29.89

0

91.39

0

0

25.63

91.39

29.89

0

45.70

0

0

25.63

45.70

29.89

0

45.70

0

0

25.63

45.70

29.89

0

45.70

0

0

25.63

45.70

29.89

0

22.85

0

0

25.63

22.85

29.89

0

45.70

0

0

25.63

45.70

29.89

Chairman
Liang
Haishanof theBoard

Li
Huagang

Director,
President
Vice
Chairman

XieJuzhiof theBoard
Vice
Li PanPresident
Chief
financial
Gong Wei

officer,
Vice
President

Huang
XiaowuVice
President
Vice

Wu Yong
President
Vice
Li Yang
President

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Haier Smart Home Co., Ltd. 2021 Annual Report

Guan
Jiangyong

Vice
0

22.85

0

0

25.63

22.85

29.89

0

45.70

0

0

25.63

45.70

29.89

0

548.3700/548.37/

President
Vice

Wang Li
President
Total

(IV)

/

Establishment and implementation of appraisal and incentive mechanism for senior
management during the reporting period√

Applicable □ Not Applicable

The 2021 remuneration system of the management personnel of the Company reflects the ecosystem
micro-community contract, high value-adding and high sharing, which is linked with win-win value adding
table and Rendanheyi scorecard, etc.. Vertically, the Rendanheyi scorecard represents strategic undertaking
and ecosystem micro-community contract, which is linked with the ecosystem micro-community upgrade
initiation and platform leading, and horizontally, it embodies the global leadership and ecosystemachievements of the market competitiveness, which leads to the upgrading from “high-end brand” to “scenario
brand” and “ecosystem brand”. The remuneration competitiveness is determined based on such elements as“strategic undertaking”, “market-leading target competitiveness”, “micro-community initiation, platform
leading” and “ecosystem achievements”. The senior management personnel receive an annual assessment of
performance for the year, which is a key factor in determining performance bonuses and development. On one
hand, the overall customer- paid, and Rendanheyi remuneration system forms a diversified combination of the
management’s remuneration incentives, which is oriented towards creating customer value and ecosystem
value. On the other hand, it also makes the remuneration mechanism of the management more flexible, which
provides impetus for the innovation of the management and embodies the maximization of people value.
At the same time, the Company implements measures such as the core employee stock-holding plan and shareoption incentive plan to further improve the remuneration incentive system, enhances the incentive andrestraint mechanisms, and establishes a benefits and risk sharing mechanism between the Company and theoperational and managerial personnel based on the principle of the customer-paid compensation.

XII. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROL SYSTEM
DURING THE REPORTING PERIOD√ Applicable □ Not Applicable
For details, please refer to the 2021 Internal Control Assessment Report of Haier Smart Home Co.,
Ltd. disclosed on the same day of this report.
Explanations on material defects found in internal control during the reporting period□ Applicable √ Not Applicable

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XIII. CONTROL OVER MANAGEMENT OF SUBSIDIARIES DURING THE REPORTING
PERIOD√ Applicable □ Not Applicable
The listed company established an internal control and management system covering all
subsidiaries within the scope of consolidated statement, which included four major areas of strategy,
finance, operation and compliance with a total of 22 primary business processes and control metrics. In
particular,
1.Unified control environment, such as strategy and culture, risk management system, internal
control manual, Rendanheyi remuneration system, unified accounting and information system in thefinancial sharing center, etc.

2. The company has clear selection methods and terms of reference in respect of appointment of
directors, supervisors and important senior management to their controlling subsidiaries. Meanwhile,
relevant departments of the parent company stipulate the criteria and scope of authorization for majordecision and important events, formulate the approval procedure for major decision and important events
beyond the scope of authorization. The management of subsidiaries at different levels shall exercise theirauthority and take responsibility within the scope of authorization.
Important personnel appointments and removals are generally conducted by selecting candidates
proposed by human resource department while re-designation of directors, supervisors, and senior
management need to be determined by the relevant authority of the parent company. Other important
personnel appointments and removals are conducted through the open competition process on"Chuangba" system.
At the same time, the appointment of directors, supervisors and senior management is considered
as a change of company information, which is required to be reviewed in the Company’s legal cloudsupermarket system. The reviewer is the legal representative of the Company, and the review is basedon the request report signed by the platform owner or the minutes of the president’s office of Haier Smart
Home.
3. Management of major events of subsidiaries: The relevant authority of the parent company ofthe listed company stipulates the criteria and scope of authorization for major decision and important
events, formulate the approval procedure for major decision and important events beyond the scope of
authorization. If the Company and its subsidiaries provide external guarantees, the total amount of whichshall propose for consideration at the general meetings after approval by the Board. Subject to theauthorization by the general meetings, the Board decides the Company’s external investment, acquisitionand disposal of assets, external guarantees, entrusted wealth management, related-party transactions andother events.
4.Management of budget: The finance and budget center formulates the budget preparation policy
and guidance for the following year at the end of each year, and distributes them to each corporation
together with the budget template, requiring the preparation of a comprehensive budget in accordance

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Haier Smart Home Co., Ltd. 2021 Annual Reportwith the unified budget preparation policy and guidance, which contains details of the preparation
principles, explanation of filling the template, submission process and examination. Each corporation
has prepared a comprehensive budget in accordance with the unified budget preparation policy andguidance. Annual budgeting for the market of the following year is commenced in the third quarter every
year by making profit and loss budgets for each industry and subsidiaries based on market forecasts toensure accurate estimation in advance. The execution and adjustment of budgets are regularly monitored
and evaluated.
For non-fixed assets investment projects, the person in charge of fund of each corporation willsummarize the actual investment situation and report it to the manager of the investment, financing andfund management department of Haier Smart Home. The manager of the investment, financing and fundmanagement department will monitor the execution of the budget of investment and financing bycomparing the report with the corresponding budget of the investment plan.
5. Operation analysis and performance evaluation: The Company regularly convenes global andindustry-specific performance and operations meetings to discuss the operations and performanceand carries out performance evaluation based on the principles of the Rendanheyi 2D Dot Matrix .
6. Information transmission: The Company widely collects macroeconomic and industry development
information, market information, regulatory compliance and other external information through various
channels, and analyzes and organizes the collected information into research reports every month, which
are submitted to different levels of management after review. The management of the parent company
holds regular meetings with industries and segments to convey the management requirements of theparent company and to be aware of the operation status in a timely manner. At the same time, theCompany has formulated the information security and internal report confidentiality system, which
specifies the confidentiality content, confidentiality measures, confidentiality level and transmission
scope to prevent the disclosure of commercial secrets.
7. Test and audit of internal control: The parent company conducts internal test and audit ofsubsidiaries, more than 85% of revenue and assets of which belong to the parent Company, every year
to identify problems in a timely manner and facilitate the closed-loop rectification of problems. During
the reporting period, there were no new major subsidiaries.

XIV. RELEVANT EXPLANATIONS ON THE AUDIT REPORT OF INTERNAL CONTROL√ Applicable □ Not Applicable
The Company’s auditor Hexin Certified Public Accountants LLP has audited the efficiency ofinternal control relating to the financial report of the Company, and has issued its standard unqualified
audit report for the Company’s internal control (He Xin Shen Zi (2022) No. 000359).
For the details of Audit Report of Internal Control of Haier Smart Home Co., Ltd., please refer to relevantannouncements published on the website of Shanghai Stock Exchange (www.sse.com.cn) on the same
day of this report.

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Whether to disclose the audit report on internal control: Yes
Type of opinion on the audit report on internal control: Standard unqualified opinion
XV.

RECTIFICATION

OF

THE

SELF-ASSESSMENT

PROBLEMS

GOVERNANCE SPECIAL ACTION OF THE LISTED COMPANY
Not Applicable

XVI. OTHERS□ Applicable √Not Applicable

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THE

Haier Smart Home Co., Ltd. 2021 Annual Report

Section V Environmental and Social Responsibilities

I.
(I)

ENVIRONMENTAL INFORMATION
Explanation of the environmental protection status of companies and their important
subsidiaries that are key emission units announced by the environmental protection
department√Applicable □Not Applicable

1.

Information on pollutant discharge√Applicable □Not Applicable
The Company’s indirect non-wholly owned subsidiaries Zhengzhou Haier Airconditioning Co., Ltd.
(“Zhengzhou Air-conditioning”), Foshan Haier Freezer Co., Ltd. (“Foshan Freezer”), Hefei Haier
Refrigerator Co., Ltd. (“Hefei Refrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water
Heater”), Wuhan Haier Freezer Co., Ltd. (“Wuhan Freezer”), Dalian Haier Refrigerator Co., Ltd.
(“Dalian Refrigerator”) and Chongqing Haier Airconditioning Co., Ltd., Chongqing Haier Water HeaterCo., Ltd. (the aforementioned 2 companies located in Chongqing are collectively referred to as the"Chongqing Park Companies") are among the key emission units announced by the local environmental
protection department. The main information on pollutant discharge is as follows:（1）Zhengzhou Air-conditioning①Main pollutants：

Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply fora pollutant discharge permit and detect 17 types of pollutants (including specific pollutants) , namely,
total cadmium, total chromium, total mercury, total lead, total arsenic, hexavalent chromium, COD,
ammonia nitrogen, total phosphorus, total nitrogen, PH, suspended solids, chroma, petroleum, BOD, rateof flow and temperature.

②Way of discharge: indirect discharge③ Number and distribution of discharge outlets: one, north of the wastewater treatment plant,

pipeline discharge④Concentration and total amount of discharge and approved total amount of discharge:：

According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:

No.

Name of pollutant

Concentration

Total amountof dischargeof discharge

Approved

Whether it istotal amountexcessiveof discharge

discharge

1

COD

27.02mg/L

1.02 tons

6.25 tonsNo

2Ammonia nitrogen

6.9mg/L

0.08 tons

0.63 tons

No

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Haier Smart Home Co., Ltd. 2021 Annual Report⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)（2）Foshan Freezer① Main Pollutants:
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply fora pollutant discharge permit and detect 6 types of pollutants (including specific pollutants), namely, COD,
ammonia nitrogen, zinc, PH, SS, suspended solids, petroleum② Way of discharge: indirect discharge③ Number and distribution of discharge outlets: one, south of the wastewater treatment plant tothe southeast of Fushan Sanshui District Haier Park, pipeline discharge; exhaust emission,
one dust emitting processes, four foam generating processes, three welding processes, one
plastic injection and breaking process, two kitchens, for a total of 11④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:

No.

Name of pollutant

Concentrationof discharge

Total

Approved total

Whether it isamount ofamount ofexcessivedischarge

discharge

discharge

1

COD

20 mg/L

4.17 tons

25.92 tonsNo

2Ammonia nitrogen

1.46mg/L

0.304 tons

2.88 tons

No⑤ Pollutant discharge standards implemented: first standard of the second period set forth in the“Discharge Limits of Water Pollutants” (DB44/26-2001) of local standard in Guangdong
Province（3）Hefei Refrigerator①Main Pollutants：
Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy should apply fora pollutant discharge permit and detect 8 types of pollutants (including specific pollutants) , namely, total
nitrogen (as N), total phosphorus (as P), rate of flow, suspended solids, value of PH, Chemical oxygen
demand (COD), ammonia nitrogen (NH3-N) and five-day biochemical oxygen demand (BOD5).
Exhaust gas. According to the Volatile Organic Unorganized Emission Control Standard (GB37822-1-2019), Development Zone Energy should apply for a pollutant discharge permit and detectpollutants. Main types of atmospheric pollutants: particle matter, non-methane total hydrocarbons②Way of discharge: continuous discharge

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Haier Smart Home Co., Ltd. 2021 Annual Report③Number and distribution of discharge outlets: 1 sewage, at the north entrance of the refrigerator
Park; 25 exhaust gas, at the refrigerator block A(11), B factories(11) and Phase III Factory(3).

④Concentration of discharge and discharge standard:

According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:

No.

Name of Pollutant

Concentration

Total amountof dischargeof discharge

Approved

Whether it istotal amountexcessiveof discharge

discharge

1

COD

104.114 mg/L

56.2 tons

165 tonsNo2ammonia nitrogen

11.432 mg/L

5.373 tons

10 tonsNo3

total nitrogen22.45 mg/L

11.76 tons

25 tonsNo4

total phosphorus

2.065 mg/L

1.082 tons

3 tonsNo

Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)（4）Wuhan Water Heater①Main Pollutant：

Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Wuhan water heater should apply for apollutant discharge permit and detect 9 types of pollutants (including specific pollutants), namely, COD,
total zinc, suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5),PH, anionic surface active agent, total phosphorus, and animal and vegetable oils.

②Way of discharge: indirect discharge③Number and distribution of discharge outlets: one, on the southwest of the wastewater treatment

plant, pipeline discharge④Concentration and total amount of discharge and approved total amount of discharge:

According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:

No.

1
2

Name of Pollutant

COD
Ammonia
nitrogenApproved

Concentration

Total amountof dischargeof discharge

40 mg/L

8.92 tons

9.075 tons

No0.336 mg/L

0.0749 tons

0.9075 tons

No

total amountof discharge

Whether it isexcessive discharge⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to
Municipal Sewers (GBT 31962-2015)（5）Wuhan freezer①Main pollutants：
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Haier Smart Home Co., Ltd. 2021 Annual Report

Wastewater. According to the Technical Specification for Application and Issuance of Pollutant
Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Wuhan freezer should apply for a pollutant
discharge permit and detect 9 types of pollutants (including specific pollutants), namely, COD, total zinc,suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5), PH,anionic surface active agent, total phosphorus, and animal and vegetable oils.

②Way of discharge: indirect discharge③Number and distribution of discharge outlets: one, on the south of the wastewater treatment plant,

pipeline discharge④ Concentration and total amount of discharge and approved total amount of discharge: According

to the discharge permit, the concentration and total amount of pollutant discharge subject to approval forthe total amount are as follows:

No.

Name of Pollutant

Concentration

Total amountof Dischargeof discharge

Approved

Whether it istotal amountexcessiveof discharge

discharge

1

COD

46 mg/L

3.88 tons

4.3628 tonsNo

2Ammonia nitrogen

0.497 mg/L

0.042 tons

0.4365 tons

No

⑤Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge to

Municipal Sewers (GBT 31962-2015)（6）Dalian Refrigerator①Main Pollutants：
Wastewater. According to Measures for Pollutant Discharge Permitting Administration, 5 types ofpollutants should be tested, namely, COD, total phosphorus, PH, suspended solids, zinc.

②Way of discharge: indirect discharge③Number and distribution of discharge outlets: one, on the wastewater treatment plant, pipeline
discharge④Concentration and total amount of discharge and approved total amount of discharge:
the concentration and total amount of pollutant discharge subject to approval for the total amountare as follows:

No.

Name of Pollutant

Concentration

Total amountof dischargeof discharge

Approved total

Whether it isamount ofexcessivedischarge

discharge

1

COD

244 mg/L

2.66 tons

2.66 tonsNo

2Ammonia nitrogen

5.4 mg/L

0.059 tons

0.059 tons

No

Pollutant discharge standards implemented: Wastewater Discharge Standard for Liaoning Province (DB21/ 1627-2008)（7）Chongqing Park Company① Main pollutants:
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Haier Smart Home Co., Ltd. 2021 Annual Report

Wastewater. According to the registration and declaration of Pollutant Permit of the PRC, 7 typesof pollutants (including specific pollutants) should be tested, namely, COD、 ammonia nitrogen (NH3-

N), five-day biochemical oxygen demand (BOD5), PH, suspended solids, petroleum, animal andvegetable oil, rate of flow.

② Way of discharge: indirect discharge③ Number and distribution of discharge outlets: three, first wastewater treatment plant, second
integrated wastewater treatment plant, the apartment wastewater treatment station, pipeline
discharge④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge subject
to approval for the total amount are as follows:No.

Concentration

Total amountof dischargeof discharge

Name of Pollutant

Approved

Whether it isTotal amountexcessiveof discharge

discharge

1

COD

59 mg/L

33.93tons

228.1tonsNo

2

Suspended solids

21 mg/L

12.08tons

177.2tons

No

1.24mg/L

0.71tons

34tonsNo0.14 mg/L

0.08tons

1.32tons

No

3
4

Animal and vegetable
oil
Petroleum

Integrated wastewater discharge standard (GB 8978-1996) – grade 32.

Construction and operation of pollution prevention and treatment facilities:√Applicable □Not Applicable
Zhengzhou Air-conditioning, Foshan Freezer, Wuhan Freezer, Wuhan Water Heater have one, one,

one and two wastewater treatment plants with a designed treatment capacity of 550 tonnes/day, 1,800
tonnes/day, 550 tonnes/day, 300 tonnes/day and 260 tonnes/day, respectively. There are three wastewater
treatment plants in Chongqing Haier Park responsible for collecting and treating the wastewater producedby the Chongqing Park Companies with a wastewater treatment capacity of 3,600 tonnes/day, and one
wastewater treatment plant in Dalian Haier Park responsible for collecting and treating the wastewaterproduced by the Dalian Park Companies with a wastewater treatment capacity of 300 tonnes/day. The
construction, maintenance and daily operation of all wastewater treatment facilities are conducted inaccordance with the requirements of national and local environmental laws and regulations. Informationon all wastewater discharge is subject to 24-hour online monitoring and such monitored information istransmitted to environmental authorities in a real-time manner. All equipment is operating normally. In
addition, the Company fully promotes all plants to install exhaust treatment facilities and VOCs online
monitoring facilities. All equipment is operating normally and exhaust produced is treated by theprevention and treatment facilities before compliant release and is monitored.

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3.

Environmental impact assessment of construction projects and other environmental
protection administrative permits√Applicable □Not Applicable
The Company and its subsidiaries execute construction project implementation and production inaccordance with the requirements of laws and regulations and strictly comply with the three simultaneous
requirements of environmental protection for construction projects in the process of environmental
impact assessment, and have passed environmental assessment acceptance and are not involved in any
environmental illegal conducts such as construction before approval.

4.

Emergency plans for environmental incidents√Applicable □Not Applicable
The Company and its subsidiaries have formulated Emergency Plans for Environmental Incidents

in accordance with the requirements of laws and regulations and organized drills, and continue toimprove and upgrade the plans based on drill results.

5.

Self-monitoring environmental programs√Applicable □Not Applicable
The Company complies with national and local environmental standard requirements in respect ofall pollutant discharge. Wastewater collected is subject to standard treatment and is released in acompliant manner. It is under real-time monitoring through the automatic online wastewater monitoring
system, which shares its information with Haier Smart Energy System. In March 2017, the Company
passed the upgraded certification in relation to ISO14001 environment management system. In May 2021,
a professional certification firm was appointed to conduct a review and audit on the operation of
ISO14001 system in 2020, where satisfactory results were obtained to demonstrate its good operating
condition. In May 2022, a second review and audit will be conducted on the operation of ISO14001
system in 2021.

6.

Administrative penalty due to environmental issues during the Reporting Period□Applicable √Not Applicable

7.

Other environmental information that should be disclosed□Applicable √Not Applicable(II)

Explanation on environmental protection of companies other than major pollutant
emission units√Applicable □Not Applicable

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1.

Administrative penalty due to environmental issues□Applicable √Not Applicable

2.

Other environmental information disclosure with reference to major pollutant emission units√Applicable □Not Applicable
All divisions of the Company execute construction project implementation and production inaccordance with the requirements of laws and regulations and strictly comply with the three simultaneous
requirements of environmental protection for construction projects in the process of environmental
impact assessment, and have passed environmental assessment acceptance and are not involved in any
environmental illegal conducts such as construction before approval.
Through Haier Smart Energy Center, an industry leading energy big data analysis system, theCompany implements centralized dynamic monitoring and digitalized management in respect of majorenergy consumption, such as water, electricity and gas, of all plants across the country by utilizing
automatized and informationalized technology and an integrated management model. It automaticallycollects precise information on energy resources and completes prediction and analysis of energy
consumption information to optimize energy adjustment, reduce energy consumption per unit production
to achieve low-carbon production.

3.

Reasons for failure to disclose other environmental information□Applicable √Not Applicable(III)

Relevant information favorable to ecological protection, pollution prevention and control
and environmental responsibility fulfillment√Applicable □Not Applicable
The Company proactively advances product iteration and upgrade and participates in thedevelopment of ecological environment. The Company took part in the formulation of energy
consumption standard of household appliances organized by Beijing Institute of Standardization topromote the shift to energy-saving models in the household appliance field. We cooperated with relevantorganizations in relevant refrigerant research and development projects to strive for the application ofrefrigerants with lower greenhouse gas emission. Meanwhile, the Company and Haier’s suppliers, among
others, cooperated in the research and development of low-carbon related technology, such as recyclable
packaging materials, to facilitate environmental protection.
The Company proactively responds to the household appliance recycling policies of the NDRC bylaunching a household appliance recycling project and investing in the construction of Haier’s household
appliance recycling plant. With the recycling business as the starting point, we tapped into thedisintegration process and implemented extended accountability for household appliance manufacturer

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to initiate the development of household appliance recycling plants. The measure will significantly boost
the efficiency of resource utilization to achieve sustainable development.

(IV) Measures taken during the Reporting Period to reduce its carbon emission and theireffectiveness√Applicable □Not ApplicableAs the leading enterprise in the industry, the Company proactively seeks ways to achieve carbon
neutrality and carbon peak and optimize industrial structure and energy structure. Currently, theCompany has designed and established Haier Zhong De Smart Park, Haier’s first “beacon base” in theworld to achieve carbon neutrality, and intends to expand its coverage within the Company in the future,with a view to reaching carbon neutrality for Haier Smart Home’s industrial parks in the PRC within areasonable time, while giving due regards to comprehensive elements, such as costs. Haier Zhong De
Industrial Park uses a smart general energy control platform to implement centralized dynamic
monitoring and digitalized management in respect of the production, transmission, distribution andutilization of energy and power in the park, such as electricity, water, gas, heat, compressed air,photovoltaic, thereby improving and optimizing energy balance, controlling and adjusting the energy
system in the park and enhancing overall efficiency.

II.

PERFORMANCE OF SOCIAL RESPONSIBILITIES√Applicable □ Not Applicable

For details, please refer to the 2021 Environment, Social and Governance Report of Haier Smart
Home Co., Ltd. disclosed on the date of this periodic report.

III. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITSACHIEVEMENTS

IN

POVERTY

ALLEVIATION

AND

RURAL

AREA

INVIGORATION√Applicable □Not Applicable
In accordance with the national targeted poverty alleviation plan and documents requirements, theCompany emphasizes poverty alleviation and conducts targeted poverty alleviation within the authority
granted on the general meeting in respect of, among others, donations.
For years, the Company has made genuine contributions to education to improve the basic culturalquality of people in poverty and skills of families in poverty, with an emphasis on shoring up the weaklink of the education sector and stopping inter-generational poverty. As of now, the Company, HaierGroup Companies (the effective controller of the Company) and its subordinate enterprises (hereafter,
the “Haier Group”) have constructed over 300 hope primary schools and hope secondary schools,
covering 26 provinces, municipalities and autonomous regions in the PRC. It also offers continuous
resource assistance to such schools every year to effectively boost the base education capacity in poverty

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regions and improve education quality. At the same time, during the major flooding of Zhengzhou, on
the one hand, local industry parks of the Company conducted self-rescue proactively and ensured thenormal resumption of work and production; on the other hand, the Company donated RMB20 million,
taking up social responsibilities voluntarily and supporting the reconstruction of disaster areas. The
Company maintains its support to rural development in respect of poverty alleviation in agriculturaldevelopment and poverty alleviation in farmers’ health to promote beautiful rural development. During
the Reporting Period, it offered, among other assistance, funds to Xian Feng Village, Tao Lin Town, Xi
Shui County, Gui Zhou.
In 2021, the Company’s capital expenditure in targeted poverty alleviation amounted toapproximately RMB37.79 million, primarily attributable to education poverty alleviation, poverty
alleviation in agricultural development, poverty alleviation in farmers’ health and construction of disasterareas, etc., to proactively respond to the government’s call for social responsibility fulfillment.

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Section VI Significant EventsI.

FULFILLMENT STATUS OF UNDERTAKINGS(I)

The undertakings made by the ultimate controller, shareholders, related parties, acquirer as well as the Company and other relevant parties during or up
to the reporting period√Applicable □Not Applicable

Background
Type ofof

Any

Whetherdeadline

performed

forin a timely

performanc

and strict

e

way

Yes

Yes

Date and term ofCovenanter

Contents of undertakings

undertaking s

undertakings

undertakings

During the period from September 2006 to May 2007, the Company issued shares to HaierGroup Corporation (“Haier Group”) to purchase the controlling equity in its four subsidiaries,

right defects

Haier Group青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier
Electronics Holding Co., Ltd. ( 武汉海尔电器股份有限公司 ), Guizhou Haier Electronics
Co., Ltd. (贵州海尔电器有限公司). With regard to the land and property required in the 27 September

in land

Corporation

operation of three companies, namely Qingdao Haier Air-Conditioner Electronics Co., Ltd.

namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. (Undertaking
Eliminate therelated tosignificant
reorganizatio
property etc.
n

青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Holding Co., Ltd. (武汉海尔电器股份有限公司)((the “Covenantees”), Haier Group made an undertaking (the “2006 Undertaking”). According
to the content of 2006 Undertaking and current condition of each Covenantee, Haier Groupwill constantly assure that Covenantees will lease the land and property owned by Haier

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2006, long-term

Haier Smart Home Co., Ltd. 2021 Annual Report

Group for free. Haier Group will make compensation in the event that the Covenantees suffer
loss due to the unavailability of such land and property.
Prior to the Transaction (hereinafter “the Transaction” refers to the transaction in relation to
the privatization of Haier Electronics by Haier Smart Home), Haier Electric was a controlling
subsidiary of the Company and did not have peer competition with the Company; after the
Haier Smart
Address peer

completion of the Transaction, Haier Electric became a wholly-owned or controlling

31 July 2020,

subsidiary of the Company and no new peer competition with the Company existed or will

long-termHome Co.,
competition

Yes

Yes

Yes

Yes

Ltd.
arise. There is no new peer competition or potential competition between the Company andother related parties controlled by the controlling shareholders or the de facto controller of
the Company.
1. The Transaction constitutes a connected transaction and the connected transaction
procedures performed under the Transaction are in compliance with the relevant regulations.
The pricing of the connected transaction is fair and there are no circumstances under which
the interests of the listed company and the non-connected shareholders are prejudiced. 2.
Upon completion of the Transaction, the Company and its affiliates will take lawful andAddress
Haier Groupeffective measures to minimize and regulate the connected transactions with the listed

29 July 2020,

Corporationcompany, take the initiative to safeguard the interests of the listed company and all

long-term

connected
transactions
shareholders, and refrain from taking advantages of connected transactions for improper
benefits. 3. Provided that there is no conflict with laws and regulations, if connectedtransactions between the Company and its affiliates and the listed company occur or exist
which cannot be avoided or for which there are reasonable reasons, the Company and its
affiliates will legally enter into a transaction agreement with the listed company to ensure

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Haier Smart Home Co., Ltd. 2021 Annual Reportstrict compliance with the procedures of connected transactions required by the laws,
regulations, regulatory documents and the articles of association of the Company, conducttransactions in accordance with the principles of marketability and fair prices to ensure thefairness and compliance of connected transactions, and refrain from taking advantages ofsuch connected transactions to engage in any acts that are detrimental to the interests of thelisted company or its minority shareholders, and at the same time, comply with theinformation disclosure obligations in accordance with relevant regulations.
1. The Company and its controlling subsidiary, Haier COSMO Co., Ltd., were principally
engaged in investment business during the reporting period, and the Company and its
controlling subsidiary, Haier COSMO Co., Ltd. (including its subsidiaries and entities withmore than 30% shareholding), have no real or potential per competition with Haier Smart
Home; 2. the domestic and overseas white goods businesses and assets held by the Company(including the Company's subsidiaries and entities with more than 30% shareholding) havebeen injected into Haier Smart Home through asset consolidation and equity transfer in
Address peer

Haier Group

29 July 2020,
accordance with the commitments made by the Company in January 2011 and thecompetition

Corporation

Yes
long-term

requirements for adjusting such commitments as considered and approved by Haier Smart
Home at its 2014 annual general meeting; 3. Since the acquisition of 100% of Haier New
Zealand Investment Holding Company Limited (which holds 100% of the shares in Fisher &Paykel Appliances Holdings Limited) by Haier Smart Home's offshore subsidiary, Haier
Singapore Investment Holding Co., Ltd., following the completion in July 2018, theCompany (including the Company's subsidiaries and entities with more than 30%
shareholding) and Haier Smart Home do not have any peer competing relationship in any

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Yes

Haier Smart Home Co., Ltd. 2021 Annual Reportbusiness areas both within and outside the PRC. During the reporting period, the Company(including the Company's subsidiaries and entities with more than 30% shareholding) did nothave any new peer competition with Haier Smart Home; 4. Upon completion of theTransaction, the Company (including the Company's subsidiaries and entities with more than
30% shareholding) and its affiliates do not have any new or potential peer competition with
Haier Smart Home; 5. During the period when the company is the controlling shareholder ofHaier Smart Home and the shares of Haier Smart Home are listed on the Hong Kong Stock
Exchange, the company and its other subsidiaries and entities with more than 30%
shareholding will not operate any business that competes with the business engaged by Haier
Smart Home and will not engage in real or potential peer competition with Haier Smart Home.
Upon completion of the Transaction, the company will strictly comply with the Company
Law, the Securities Law, the relevant regulations of the China Securities Regulatory
Commission, the Shanghai Stock Exchange and the articles of association of Haier Smart
Home, etc., fairly exercise shareholders' rights and fulfill shareholders' obligations, refrainfrom taking advantage of its shareholding position for improper benefits, ensure the listed
Haier Group

company will continue to be completely separate from the company and other enterprises on

29 July 2020,

Corporation

which the company exercises control and exerts significant influence in terms oflong-term

OthersYesmanagement, personnel, assets, finance, organization and business operations, and maintainthe continued independence of the listed company in terms of management, personnel, assets,finance, organization and business operations. Upon completion of the Transaction, thecompany will comply with the provisions of the Notice on Several Issues concerning
Regulating Fund Transactions between Listed Companies and Their Affiliates and the123/366

Yes

Haier Smart Home Co., Ltd. 2021 Annual Report

External Guarantee of Listed Companies and the Circular of China Securities Regulatory
Commission and China Banking Regulatory Commission on Regulating the External
Guaranties Provided by Listed Companies to regulate the external guarantees by listedcompanies and their subsidiaries, and will not misappropriate the funds of the listed company
and their subsidiaries. The company undertakes to strictly fulfill the above commitments. In
the event that the interests of the listed company are damaged as a result of any breach of theabove commitments by the company and other enterprises on which the company exercises
control and exerts significant influence, the company will legally bear the corresponding
liability for damage.
1. The company legally holds the Subject Shares, of which the company has full ownership,
and there are no restrictions on the rights of the Subject Shares or any circumstances that may
affect the offer or settlement of the Transaction. 2. The company has full rights to participate
in the Transaction and has the right to accept the Offer in connection with the Transaction
HCH (HK)and to sign and perform all agreements and documents involved in the Transaction. 3. The

29 July 2020,

Company intends to participate in the Transaction as a shareholder under the scheme oftermination ofarrangement. 4.Unless the privatisation of Haier Electronics is completed or Haier Smart

privatization / sixHome announces the termination of privatisation, except for the transactions with Haiermonths after H

Smart Home and its designated entities, the Company will not sell the Subject Shares, reach

Share listing

INVESTME
NT
OthersMANAGEM
ENT CO.,
LIMITEDany disposal arrangements with any third party regarding the Subject Shares or their rights
and interests, and set any rights restrictions such as pledge on the Subject Shares from thedate of issuance of this confirmation letter. 5. Unless the privatisation of Haier Electronics iscompleted or Haier Smart Home announces the termination of privatization, except for

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Yes

Yes

Haier Smart Home Co., Ltd. 2021 Annual Report

participating in and promoting the Transaction, the company will not increase its
shareholding in Haier Electronics, reach any arrangements with other shareholders of Haier
Electronics regarding the disposal of the Subject Shares or their rights and interests, or set
any rights restrictions such as pledge on Haier Electronics shares held by other shareholders
of Haier Electronics. 6. The company will abide by the relevant restrictions on the sale ofHaier Smart Home Shares in Rule 10.07 of the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited, which has been revised from time to time:within six months from the date of disclosure of our shareholding in Haier Smart Home H
shares listed in the Transaction to the date of trading of Haier Smart Home H shares on the
Hong Kong Stock Exchange, the company will not sell Haier Smart Home H shares acquiredby the company through the Transaction, or enter into any agreement to sell such shares, orcreate any options, rights, interests or encumbrances in respect of such shares; In addition,
the sale of the Haier Smart Home H Shares, the entering into of any agreement to sell suchshares, or the exercise or enforcement of such options, rights, benefits or encumbrances inrespect of such shares by the company during the six months following the expiry of theaforesaid six-month period shall not result in Haier Group Companies and parties acting inconcert with it losing their status as controlling shareholders of Haier Smart Home.
1. The Transaction constitutes a connected transaction and the connected transaction
HCH (HK)
Address

procedures performed under the Transaction are in compliance with the relevant regulations.
INVESTME

connected

29 July 2020,
The pricing of the connected transaction is fair and there are no circumstances under whichNTtransactions

Yes
long-term

the interests of the listed company and the non-connected shareholders are prejudiced. 2.
MANAGEM
Upon completion of the Transaction, the company and other enterprises on which the

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Yes

Haier Smart Home Co., Ltd. 2021 Annual Report

ENT CO.,

company exercises control will take lawful and effective measures to minimize and regulate

LIMITEDthe connected transactions with the listed company, take the initiative to safeguard theinterests of the listed company and all shareholders, and refrain from taking advantages ofconnected transactions for improper benefits. 3. Provided that there is no conflict with laws
and regulations, if connected transactions between the company and other enterprises on
which the company exercise control and the listed company occur or exist which cannot be
avoided or for which there are reasonable reasons, the company and other enterprises on
which the company exercises control will legally enter into a transaction agreement with thelisted company to ensure strict compliance with the procedures of connected transactions
required by the laws, regulations, regulatory documents and the articles of association of thecompany, conduct transactions in accordance with the principles of marketability and fair
prices, and refrain from taking advantages of such connected transactions to engage in any
acts that are detrimental to the interests of the listed company or its minority shareholders,and at the same time, comply with the information disclosure obligations in accordance with
relevant regulations. 4. Any covenants and arrangements between the company and otherenterprises on which the company exercise control and the listed company in relation toconnected transactions shall not prevent the other party from conducting business or dealing
with any third party for its own benefit and on equal competitive terms in the market.

Undertaking

Eliminate theHaier Group Corporation undertakes that it will assure Haier Smart Home and its subsidiaries
Haier Grouprelated toright defects

24 Decemberof the constant, stable and unobstructed use of the leased property. In the event that Haier

Corporate
refinancing

in landYes
2013, long-term

Smart Home or any of its subsidiaries suffers any economic loss due to the fact that leased

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Yes

Haier Smart Home Co., Ltd. 2021 Annual Report

property andproperty has no relevant ownership certificate, Haier Group Corporation will makeetc.

compensation to impaired party in a timely and sufficient way and take all reasonable andpracticable measures to support the impaired party to recover to normal operation before theoccurrence of loss. Upon the expiration of relevant leasing period, Haier Group Corporation
will grant or take practicable measures to assure Haier Smart Home and its subsidiaries ofpriority to continue to lease the property at a price not higher than the rent in comparable
market at that time. Haier Group Corporation will assure Haier Smart Home and its
subsidiaries of the constant, stable, free and unobstructed use of self-built property and landof the Group. In the event that Haier Smart Home or any of its subsidiaries fails to continue
to use self-built property according to its own will or in original way due to the fact that selfbuilt property has no relevant ownership certificate, Haier Group Corporation will take allreasonable and practicable measures to eliminate obstruction and impact, or will support
Haier Smart Home or its affected subsidiary to obtain alternative property as soon as possible,
if Haier Group Corporation anticipates it is unable to cope with or eliminate the external
obstruction and impact with its reasonable effort. For details, please refer to theAnnouncement of Qingdao Haier Co., Ltd. on the Formation, Current Situation of the
Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of
Ownership, Solution for the Defect and Guarantee Measures (L2014-005) published by theCompany on the four major securities newspapers and the website of Shanghai Stock
Exchange on 29 March 2014.

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Haier Smart Home Co., Ltd. 2021 Annual Report

The Company undertakes that it will eliminate the property defects of the Company and main
subsidiaries within five years with reasonable business effort since 24 December 2013, toachieve the legality and compliance of the Company and main subsidiaries in terms of landand property. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on
the Formation, Current Situation of the Defective Property, the Influence on Operation ofIssuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures(L2014-005) published by the Company on the four major securities newspapers and the
Eliminate theHaier Smartwebsite of Shanghai Stock Exchange on 29 March 2014. As at the end of 2018, the Company

Home Co.,

has resolved the property defects of itself and its eight major subsidiaries and is in the processright defects

24 December

in land

Yes

Yes

Yes

Yes

2013, eight years
Ltd.

of resolving the property defects of the remaining five major subsidiaries. After the approvalproperty etc.
of the board meeting held by the Company on 5 November 2018 and the general meeting
held on 21 December 2018, the term of the above undertakings was extended for three years
based on the original deadline. At present, the property defects of the five major subsidiaries
have been properly resolved by applying for property ownership certificates, relocating thedefective properties and categorizing them as reserve alongside the lands, divesting thedefective properties with the equity of the subsidiaries and other means. The Company has
fulfilled this undertaking.
15 September
Undertakings
Haier Smart

The Company will not provide loans or any other forms of financial assistance, including

2021, theHome Co.,guaranteeing their loans, to any incentive recipient for acquiring relevant stock options undercompletion ofLtd.

this incentive plan.

equity incentive

related to
OthersEquityincentive
implementation

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Haier Smart Home Co., Ltd. 2021 Annual Report

Inject the assets of Haier Photoelectric to the Company or dispose such assets through otherways according to the requirements of the domestic supervision before June 2025. For more
Asset

Haier Group

December 2015
details, please refer to the Announcement of Haier Smart Home Co., Ltd. on the Changes of

injection

Corporation

Yes

Yes

Yes

Yes

to June 2025
Some Commitments on Asset Injection (L2020- 024) published on the four major securities
newspapers and the website of Shanghai Stock Exchange on 30 April 2020.
In August 2018, Guanmei (Shanghai) Enterprise Management Company Limited (贯美(上海 ) 企业管理有限公司 ) (hereinafter referred to as “Guanmei”), an indirect holding
subsidiary of the Company replaced the 55% equity interests of Bingji (Shanghai) Enterprise冰戟(上海)企业管理有限公司) held by it with the 51%

Management Company Limited (Haierequity interests of Qingdao HSW Water Appliance Co., Ltd. (hereinafter referred to as
COSMO Co.,

Other

“Water Equipment”) held by Haier Electric Appliances International Co., Ltd. (hereinafterLtd.

undertakings

referred to as “Haier International”). In this regard, Haier International promises that the(formerly
Profitcumulative actual net profit recorded by the Water Equipment in the three accounting years
known asforecast andAs of 30 April
during the profit compensation period shall not be less than its cumulative forecasted net“Haiercompensation

2021
profit in the corresponding year, otherwise Haier International shall compensate Guanmei’s

Electric
results according to the Assets Replacement Agreement. Details are set out in the
Appliances
Announcement on the Equity Replacement and Related Party Transactions to Be ConductedInternationalby the Holding Subsidiary of Qingdao Haier Co., Ltd. and Haier Electronics International
Co., Ltd.”)Co., Ltd. (L2018-047) published by the Company on the four major securities newspapers
and the website of Shanghai Stock Exchange on 31 August 2018. Since the Water Equipment
achieved the cumulative net profit in the three accounting years during the profit
compensation period, Haier International shall not compensate the results. Details are set out

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Haier Smart Home Co., Ltd. 2021 Annual Reportin the Special Audit Report on the Satisfaction of Performance Commitment of Haier Smart
Home Co., Ltd. (Report No.: He Xin Zhuan Zi (2021) No.000101) disclosed by the Company
on 31 March 2021.

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Haier Smart Home Co., Ltd. 2021 Annual Report(II)

The Company’s explanation on whether the earnings forecast on assets or projects was
met and its reasons in the situation that earnings in the Company’s assets or projects
have a forecast, and the period of which includes the reporting period.
□ Reached □ Not Reached √Not Applicable(III)

Completion of performance commitments and their impact on the impairment test of
goodwill□ Applicable √ Not ApplicableII.

NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLINGSHAREHOLDERS AND OTHER RELATED PARTIES DURING THE REPORTING
PERIOD□Applicable √Not Applicable

III.

INFORMATION ON NON-COMPLIANCE GUARANTEES□Applicable √Not ApplicableIV.

EXPLANATION OF THE BOARD OF THE COMPANY ON THE ‘NON-STANDARD
AUDIT REPORT’ ISSUED BY THE ACCOUNTING FIRM
□Applicable √Not ApplicableV.

EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS AND EFFECTS
OF CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OR
CORRECTION OF SIGNIFICANT ACCOUNTING ERRORS(I)Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates□Applicable √Not Applicable(II)

Explanation of the Company’s analysis on reasons and effects of correction of significant
accounting errors□Applicable √Not Applicable(III) Communication with former accounting firm□Applicable √Not Applicable(IV)

Other explanations□Applicable √Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual ReportVI.

APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM

Unit and Currency: RMB million
Current appointment
Name of domestic accounting firm

Hexin Certified Public Accountants LLP

Remuneration of domestic accounting firm

7.15

Audit period of domestic accounting firm

9 years

Name of overseas accounting firm

HLB Hodgson Impey Cheng Limited

Remuneration of overseas accounting firm

3.89

Audit period of overseas accounting firm

2 years

Name

Remuneration

Accounting firm for Internal control audit

Hexin Certified Public Accountants LLP

Financial advisor

Zheshang Securities Co., Ltd.

Explanation of appointment and dismissal of accounting firm
□ Applicable √Not Applicable

Explanation of change of accounting firm during the auditing period□ Applicable √Not Applicable

VII.

POSSIBILITY OF DELISTING(I)

Reasons of warning for delisting risks□ Applicable √ Not Applicable(II)

Response measures to be taken by the Company□ Applicable √ Not Applicable(III)

Circumstances and reasons for termination of listing□ Applicable √ Not Applicable

VIII.

MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING□ Applicable √ Not Applicable

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2.85
0Haier Smart Home Co., Ltd. 2021 Annual Report

IX.

MATERIAL LITIGATION AND ARBITRATION MATTERS□ Material litigation and arbitration matters during the year
√ No material litigation and arbitration matters during the year

X.

PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLINGSHAREHOLDERS AND ULTIMATE CONTROLLERS DUE TO SUSPECT OF LAWVIOLATIONS AND THE ISSUE OF RECTIFICATION□ Applicable √ Not applicable

XI.

EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND ITSCONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER DURING
THE REPORTING PERIOD□ Applicable √ Not applicable

XII.

SIGNIFICANT RELATED-PARTY TRANSACTIONS(I)

Related-party transactions from daily operation

1. Matters that have been disclosed in temporary announcements and with no subsequent
progress or change□ Applicable √Not applicable
2.Matters that have been disclosed in temporary announcements and with subsequent progressor change√Applicable □Not applicablePursuant to the " Resolution on Proposal to the General Meeting to Authorize the Board of Directors
and its Authorized Persons to Sign the Framework Agreement on Connected Transactions for 20202022" (《关于提请股东大会授权董事会及其授权人士签署 2020-2022 年关联交易框架协定的议案》) considered and approved at the 10th meeting of the 10th session of the Board of Directors and theSecond Extraordinary General Meeting of 2020, the " Resolution on Signing the Framework Agreement《关于签署关联交易框架协定的议案》) considered and approved at theon Connected Transactions" (14th meeting of the 10th session of the Board of Directors, and the " Resolution of Haier Smart Home
Co., Ltd. on Renewing the Framework Agreement on Financial Services with Haier Group Corporationand Estimated Amount of Connected Transactions" (《海尔智家股份有限公司关于与海尔集团公司续签暨预计关联交易额度的议案》) considered and approved at the 18th meeting of the 10th sessionof the Board of Directors and the 2020 Annual General Meeting, the Company has made estimation on
the connected transactions for the next three years, as detailed in the aforesaid announcements regarding
the resolutions of the meetings.

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Haier Smart Home Co., Ltd. 2021 Annual Report

For the actual performance of the Company's connected transactions in the year of 2021, pleaserefer to "XII. Related parties and related-party transactions " under Section X — Financial andAccounting Report set out in this regular report.

3.Matters not disclosed in temporary announcements□ Applicable √ Not applicable(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matter disclosed in temporary announcements and with no subsequent progress or change√ Applicable □ Not Applicable
Summary of matters

Query index

Related-party transactions involved in the

For details, please refer to the Announcement ofacquisition of minority interests: please refer toHaier Smart Home Co., Ltd. on the Acquisition(V) Analysis of status of investment in Section III

of Equity Interests in Subsidiaries held by Haier

Discussion and Analysis of Operation of thisGroup

report.

Transactions disclosed on 30 October 2021 andCorporation

andRelated-Party

relevant announcements disclosed on the sameday.

2. Matters that have been disclosed in temporary announcements and with subsequent progress orchange□ Applicable √ Not applicable
3.

Matters not disclosed in temporary announcements□ Applicable √ Not applicable4.

If performance agreement is involved, the performance achieved during the reporting period
shall be disclosed□ Applicable √ Not applicable(III)

Significant related-party transactions of joint external investment

1. Matters that have been disclosed in temporary announcements and with no subsequent progressor change□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent progress orchange□ Applicable √ Not applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

3. Matters not disclosed in temporary announcements□ Applicable √ Not applicable(IV)

Amounts due to or from related parties

1. Matters that have been disclosed in temporary announcements and with no subsequent progressor change□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcement and with subsequent progress orchange□ Applicable √ Not applicable
3. Matters that haven’t been disclosed in temporary announcements□ Applicable √ Not applicable(V)

Financial business between the Company and the finance company with which it has arelated relationship, or it is the company's controlling finance company and relatedparties√ Applicable □Not applicable1.

Deposit business√ Applicable □Not applicable
Unit and Currency: RMB
Changes of the period
Range
Maximum

RelatedBalance as at theofRelationshipdaily deposit

party

Total amountdepositlimit

Balance as at the end

Total amount
beginning of theof the period

deposited during theperiodwithdrawn during theinterest

periodperiodHaier

Subsidiary

Financeof Haier

Co., Ltd.

Group

Total

/

0.385%
29 billion

24,964,098,241.74

410,845,216,685.05

407,177,168,007.49

28,632,146,919.30

24,964,098,241.74

410,845,216,685.05

407,177,168,007.49

28,632,146,919.30

3.25%

/

2.

to

/

Lending business√ Applicable □Not applicable
Unit and Currency: RMB

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Haier Smart Home Co., Ltd. 2021 Annual Report

Changes of the period
RelatedRange of

Balance as at the

loan

beginning of theinterest

periodLoan
Relationshipparty

Balance as at the

Total loan

limit

Total repayment
end of the periodamount for theamount for theperiodperiodHaier
FinanceCo., Ltd.

Total

Subsidiary of

5

1.52%toHaier Groupbillion

3.08%

/

/

/

3.

454,470,450.05

19,359,969.00

137,322,759.93

336,507,659.12

454,470,450.05

19,359,969.00

137,322,759.93

336,507,659.12

Credit business or other finance businesses√ Applicable □Not applicable
Unit and Currency: RMB

Related party

Relationship

Haier Finance Co., Ltd.

Subsidiary of Haier Group

Haier Finance Co., Ltd.

Subsidiary of Haier Group

4.

Type of business
Foreign exchange derivatives
products
Service charge

Total amount

Actual amount of
occurrence

5.5 billion

2,611,999,252.69

80 million

23,493,333.12

Other explanations□Applicable √ Not applicable(VI)

Others□ Applicable √ Not applicable

XIII.

SIGNIFICANT CONTRACTS AND THEIR EXECUTION(I)

Trusteeship, contracting and leasing

1. Trusteeship□ Applicable √ Not applicable
During the reporting period, the Company had no material escrow matters. Up to now, the following
entrusted assets that have been approved by the Company's shareholders' meeting are still in effect:
According to Haier Group's commitment in 2011 on further supporting the development of Qingdao
Haier and resolving interbank competition to reduce connected transactions, based on the fact that136/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier Optoelectronics Co., Ltd. (青岛海尔光电有限公司) and its subsidiaries, the main bodyof Haier Group engaging in the color television business, are still in a period of transformation andintegration, and their financial performance has not yet met the Company's expectations, Haier Group isunable to complete the transfer before the aforesaid commitment period. Haier Group intends to entrust
the Company with the operation and management of the escrow assets and pay the Company an annual
escrow fee of RMB1 million during the escrow period.

2. Contracting□ Applicable √ Not applicable

3. Leasing□ Applicable √ Not applicable

137/366

Haier Smart Home Co., Ltd. 2021 Annual Report(II)

Guarantee√ Applicable □ Not applicable
Unit and Currency: RMB0’000

External guarantees provided by the Company (excluding guarantees for subsidiaries)

Guarantor

Relationshipbetween theguarantor and thelisted company

Securedparty

Date of
Whether
occurrence
Whether Overdue
Expiration
theAmount of of theamount of Whether there is a
Type ofCommencement
Collateralthedate ofguarantee
guarantee (if any)guarantee guarantee
date of guarantee
guarantee thecounter-guarantee
guarantee
has been(date ofis overdue guarantee
fulfilledagreement)

Whether
Related-party
guarantee ornot

RelationshipTotal amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries)

0

Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries)

0

Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries occurred during the reporting period

3,111,075

Total balance of guarantees for subsidiaries at the end of the reporting period (B)1,135,728

Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total amount of guarantee (A + B)

1,135,728

Ratio of total amount of guarantees to net assets of the Company (%)

14.28

Including:Amount of guarantees for shareholders, ultimate controllers and their related parties(C)0Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio
exceeding 70% (D)The amount of total amount of guarantee in excess of 50% of net assets (E)252,863

Total amount of the above three guarantees (C + D + E)

252,863

0
NilExplanation of possibly bearing related discharge duty for premature guarantees
Explanation of guarantee statusNil

138/366

Haier Smart Home Co., Ltd. 2021 Annual Report

(III)
1.

Entrusted others to manage cash assets
Entrusted wealth management(1) Overall of entrusted wealth management√ Applicable □ Not applicable
Unit and Currency: RMB
Type

Sources of funds

AmountPremature

Past due uncollectedbalanceamountPrincipal-guaranteed
wealthmanagement

Self-owned

andfunds, CB

2,472,550,008
products

2,472,550,008

0structured deposit

Others√ Applicable □ Not applicable

By the end of the reporting period, the balance of the Company’s entrusted wealthmanagement amounted to RMB2.473 billion, including two parts:①temporarily-idle fundraising

wealth management: at the end of December 2018, the Company’s proceeds for the issuance of
convertible corporate bonds were fully landed. In order to improve the yield of temporarily-idle
funds, the Company intended to carry out cash management with the amounts not exceeding
RMB0.5 billion after approved by the Board of Directors. By the end of the reporting period, thebalance of the entrusted wealth management amounted to RMB315 million;②Temporary-idle

funds wealth management by certain subsidiaries of the Company: Under the premise of
ensuring sufficient capital required by the principal operating activities and daily operations, somesubsidiaries of the company purchased some short-term principal-guaranteed wealth management
products and structured deposits from major commercial banks to improve the yield of temporarilyidle funds and the return for shareholders within the authority of the general manager’s officemeeting and under the condition of ensuring fund safety. By the end of the reporting period, thebalance of the entrusted wealth management amounted to RMB2.158 billion.

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Haier Smart Home Co., Ltd. 2021 Annual Report(2) Individual entrusted wealth management√ Applicable □ Not applicable
Unit and Currency: RMB

Type ofCommencement

Expiration dateAmount ofentrusted
Trustee

Actualdate of entrustedof entrusted

Sources of

entrusted wealthwealthDetermination

Annualized

Expected

Investment
wealthwealthfunds

of returnyield

management

Collectio

return (if any)

plan forprovision for

entrusted

impairment

wealth(if any)

approved bynlossesmanagement

Amount of

Whethergains ormanagement

Any future

due process

management

managementHaier Road
sub-branch of

WealthSelf-owned
240,000,000.00

Construction

2021/10/27

Not

2022/1/27

management

3.40%

2,056,767

funds

expired

YES

YES

YES

YES

YES

YES

Bank
Haier Road
sub-branch of

WealthSelf-owned
300,000,000.00

Construction

2021/11/24

Not

2022/5/24

management

3.50%

5,206,849

funds

expiredBank
Qingdao branchof Bank of

WealthSelf-owned
878,000,000.00

Communication

management

2021/10/27

Not

2022/1/26

3.35%
funds

7,333,104
expireds

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Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao branchof Shanghai

WealthNot
Self-owned

Pudongmanagement

290,000,000.00

2021/11/3

2022/1/29

3.20%

2,211,945

3.20%

2,221,896

expired

YES

YES

funds
Development
Bank
Qingdao branchof Shanghai
Pudong

WealthSelf-owned
278,500,000.00

Development

2021/11/22

Not

2022/2/21

management

funds

expired

YES

YES

Bank

Qingdao branchof Bank of

WealthSelf-owned
62,000,000.00

Communication

2021/9/17

Not

2022/1/18

management

3.30%

689,474

funds

expired

YES

YES

YES

YES

YES

YES

s
Haier Road
sub-branch of

Self-owned

Wealth100,000,000.00

Construction

2021/12/22

Not

2022/3/22

3.40%

838,356

funds

management

expiredBank
Haier Road

Linkedsub-branch of

structured

ChinadepositNot
65,000,000

2021/11/29

2022/5/29

CB

3.50%

141/366

1,128,151

expiredHaier Smart Home Co., Ltd. 2021 Annual Report

Construction
Bank
Corporation

Haier Road

Linkedsub-branch of

structured

Chinadeposit

Construction

Not
125,000,000

2021/12/27

2022/6/26

CB

3.50%

2,169,521

expired

YES

YES

125,000,000

2021/9/2

2022/2/15

CB

3.50%

1,989,726

Not

YES

YES

YES

YES

Bank
Corporation

Haier Road

Linkedsub-branch of

structured

Chinadeposit

ConstructionBank

expiredCorporation

Asset

Short-term

management

wealthSelf-owned

Not

9,050,008
funds

account of

expiredmanagement

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Haier Smart Home Co., Ltd. 2021 Annual ReportIndustrial Bank
CO., LTD.

Others□ Applicable √Not applicable(3) Provisions for impairment of entrusted wealth management□ Applicable √Not applicable2.

Entrusted loans(1) Overall entrusted loans□ Applicable √ Not applicable

Others□ Applicable √ Not Applicable(2) Individual entrusted loans□ Applicable √ Not applicable

Others□ Applicable √ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report(3) Provisions for impairment of entrusted loans□ Applicable √ Not Applicable

3.

Others√ Applicable□ Not Applicable
RMB0’000

AmountInitial investment
Operator name ofType

Amount soldof

Openingpurchasedamount ofderivatives

derivatives

Closingduring theStarting dateEnding dateinvestment

during thederivatives
investment

Proportion of closing
Provision for
impairment

investment

reportinginvestment

amountreportinginvestment

Actual profit orinvestment amountloss for theover net assets at end(if any)

amountperiodreporting periodof reporting period

periodForwardforeignBank

1,250,593

1 Jan 2021

31 Dec 2021

1,250,593

1,247,880

20,489230,366

1 Jan 2021

31 Dec 2021

230,366

209,737-2,596exchange
contract
Interest
Bankrate/exchange
rate swap

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Haier Smart Home Co., Ltd. 2021 Annual Report

Own funds of the Company
Funding sources of derivatives investments
Changes in market prices or fair value of products,

1.

The profit or loss of the foreign exchange forward contracts amounted to RMB204.89 million during the reporting period;

For changes in the market price or fair value of the invested
derivatives products during the reporting period, the2. The profit and loss arising from the interest rate/exchange rate swap was –RMB25.96 million during the reporting period.

specific methodology used and the settings of relevant
assumptions and parameters should be disclosed in the fair

The specific methodology used and the related assumptions and parameter settings are according to the forward quotations of foreign exchange and interest rate

value analysis of the derivatives.

swaps of the financial institutions(IV)

Other Major Contracts□ Applicable √ Not Applicable

XIV.

EXPLANATION OF OTHER SIGNIFICANT MATTERS THAT HAVE A SIGNIFICANT IMPACT ON THE VALUE JUDGMENTS ANDINVESTMENT DECISIONS OF INVESTORS□ Applicable √ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

Section VII Changes in Shares and Information about Shareholders

I. CHANGES IN SHARE CAPITAL(I) Table of Changes in shares
1. Table of Changes in shares

Prior to the change

Number

Percentage(%)

Increase and decrease of the change (New shares

Bonusissuedshares

Unit: share＋,-)

After the change

Sharesconvertedfrom reserve

I. Shares with selling
restrictions
1. Shares held by the state
2. Shares held by thestate-owned legal entities
3. Shares held by otherdomestic investors
Including: shares held byDomestic non-stateowned
legal entities

146/366

OthersSubtotal

Number

Percentage(%)

Haier Smart Home Co., Ltd. 2021 Annual Report

Shares held by domestic
individuals
4. Shares held by foreign
investors
Including: shares held byforeign legal
entities
Shares held by foreign
individuals
II. Tradable shares
without selling restrictions
1. RMB ordinary shares

9,027,846,441

100.00403,210,889-32,352,800

6,308,552,654

69.88

2,719,293,787

30.12

403,210,889-32,352,800

9,027,846,441

100.00403,210,889-32,352,800

370,858,089

9,398,704,530

100.006,308,552,654

67.12

370,858,089

3,090,151,876

32.88

370,858,089

9,398,704,530

100.002. Domestic listed foreign
shares
3. Overseas listed foreign
shares
4. Others
III. Total shares

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Haier Smart Home Co., Ltd. 2021 Annual Report

2. Statement on the changes in shares√ Applicable □ Not Applicable(1) H-share convertible bonds: On 27 October 2020, the China Securities Regulatory Commission
issued the Reply to the Approval of Issuance of Overseas Listed Foreign Shares and Convertible Corporate
Bonds by Haier Smart Home Co., Ltd. () (Zheng Jian Xu Ke [2020] No. 2768), which approved that: (1) the Company issued no
more than 2,856,526,138 overseas listed foreign shares (including additional shares issued by holders ofconvertible corporate bonds not exceeding HK$8.0 billion or equivalent in foreign currencies upon the exerciseof the convertible rights), with a par value of RMB1 each, all of which are ordinary shares. After the completionof this issuance, the Company can be listed on the main board of the Stock Exchange of Hong Kong Limited(hereinafter referred to as the “Hong Kong Stock Exchange”) ; (2) the issuance of corporate bonds not exceeding
HK$8.0 billion or equivalent in foreign currencies that can be converted into the Company’s overseas listed
foreign shares by the overseas wholly-owned subsidiaries guaranteed by the Company. On 23 December 2020,
2,448,279,814 H shares of the Company, issued for the privatisation of Haier Electronics Group Co., Ltd. (aHong Kong listed company), were listed and traded on the Main Board of the Hong Kong Stock Exchange andthe related convertible bonds under the H share convertible bonds scheme became valid and in effectimmediately after the listing amounting to HK$7,993,000,000. During the reporting period, HK$7,594,000,000of the convertible bonds were converted into a total of 403,210,889 H shares of the Company and theoutstanding amount was HK$399,000,000.

《关于核准海尔智家股份有限公司发行境外上市外资股及可转换公司债券的批复》(2) Cancellation of H share repurchase: On 5 March 2021, the First Extraordinary General Meeting of2021 and the First Class Meeting of 2021 for A shares/D shares/H shares of the Company considered andapproved the "Resolution on the Introduction of General Mandate for Repurchase of H Shares upon Completionof Listing", in which the Company intends to repurchase H shares and cancel them within the agreed period.
During the reporting period, the Company repurchased a total of 32,352,800 H shares and all such shares havebeen cancelled.
Based on the above, during the reporting period, the share capital of the Company was changed from
9,027,846,441 shares at the beginning of the reporting period to 9,398,704,530 shares.

3. Effect of changes in shares on the financial indicators such as earnings per share and net assets per
share (if any) over the last year and the last reporting period√ Applicable □ Not Applicable
In 2021, the Company achieved net profit attributable to shareholders of the Parent Company of
RMB13,067,038,271.85, equity attributable to owners of the Parent Company of RMB79,810,927,325.55, interms of total share capital of 9,027,846,441 shares at the beginning of the period, profit per share was RMB1.45
and net asset was RMB8.84 per share accordingly; in terms of total share capital of 9,398,704,530 shares at theend of the period, profit per share was RMB1.39 and net asset was RMB8.49 per share accordingly.
4. Other disclosure deemed necessary by the Company or required by securities
regulatory authorities□Applicable √Not Applicable(II) Changes in shares with selling restriction□Applicable √Not Applicable
II. ISSUANCE AND LISTING OF SECURITIES(I) Issuance of securities as of the reporting period√Applicable □Not Applicable
Unit: share Currency: RMB
Type of shares and

Date

of

Issuing price

Number of

148/366

Date of listing

Number of

Date ofHaier Smart Home Co., Ltd. 2021 Annual Report

its derivative securities

issue(or interests
rate)

issuance

Convertible corporation bonds, convertible bonds with warrants
Corporate bonds convertible 23/
into H-shares
December
7,993,000,000
2020

23 December
2020

shares underlisting
approvaltermination

7,993,000,000

21 November 2022

Details of issuance of securities as of the reporting period (please specify separately for bonds with different
interest rates within the duration):√ Applicable □ Not ApplicableOn 27 October 2020, China Securities Regulatory Commission (CSRC) issued the Reply on Approval of
the Foreign Public Issuance of Convertible Bonds by Qingdao Haier Co., Ltd.” (Zheng Jian Xu Ke [2020] No.
2768, hereinafter referred to as “CSRC Reply”), which approved: (1) Haier Smart Home shall issue not morethan 2,856,526,138 overseas listed foreign capital shares (including not more than HK$8 billion or theequivalent in foreign currencies of shares issued for the holders of convertible corporate bonds upon the exerciseof conversion rights), with a par value of RMB1 each and all of which are ordinary shares. Upon the completionof this issue, Haier Smart Home can be listed on the Main Board of The Stock Exchange of Hong Kong Limited;(2) the overseas wholly-owned subsidiary guaranteed by Haier Smart Home can issue corporate bonds of notexceeding HK$8 billion or equivalent in foreign currencies that can be converted into overseas listed foreign
capital shares of the issuer. Pursuant to which and with the approval of the relevant parties, the Company andHarvest International Company, a wholly- owned subsidiary of the Company, issued 2,448,279,814 H-sharesand convertible bonds respectively on Hong Kong Stock Exchange on 23 December 2020 (the ex-changeablebonds of HK$8 billion issued in November 2017 were converted into convertible bonds, and the convertible
bonds in effect amounted to HK$7,993 million, which can be converted into H-shares of the Company). For
details, please refer to the prospectus and other relevant documents disclosed in Hong Kong market during thereporting period of the Company and the Report on the Implementation of Material Asset Purchase and Related
Party Transactions and other relevant documents disclosed on 26 December 2020.
(II) Changes in total shares and shareholder structure as well as assets and liabilities structure of theCompany√ Applicable □ Not Applicable
For the total number of ordinary shares of the Company and changes in shareholder structure, please referto the relevant explanations in ‘I. Changes in share capital’ and ‘III. Information on shareholder and ultimate
controllers’ in this section. For the impact of the aforesaid changes on ‘Paid-in capital (or share capital)’ in the
Company’s balance sheet and other items, please refer to the relevant content in ‘Section X Financial Report’of this report.

(III) Information on existing shares specifically issued for staff□ Applicable √ Not Applicable

III. INFORMATION ON SHAREHOLDERS AND ULTIMATE CONTROLLERS(I) Total number of shareholders
Total number of ordinary shareholders up to the end of the reporting period
Total number of ordinary shareholders as at the end of the last month prior to
the disclosure day of the annual report

149/366

156,482

170,068

Haier Smart Home Co., Ltd. 2021 Annual Report(II) Table of top ten shareholders, top ten common shareholders (or the shareholders not subject to selling restrictions) by the end of the reporting period
Unit: share
Shareholdings of top ten shareholders

Number ofsharesheld
withselling
restrictions

Status of shares
pledged, marked orfrozenNumber ofshares held at
the end of theperiodPercentage(%)

HKSCC NOMINEES LIMITED
Haier COSMO Co., Ltd. ()

1,820,935,022

19.37

Unknown

1,258,684,824

13.39

None

Haier Group Corporation

1,072,610,764

11.41

None

Increase/decreaseduring the reporting
periodName of shareholder(full name)海尔卡奥斯股份有限公司HCH (HK) INVESTMENT
538,560,000
5.73
MANAGEMENT CO., LIMITED
Hong Kong Securities Clearing Co.,682,954,688
7.27
Ltd.
China Securities Finance Corporation
182,592,654
1.94
LimitedQingdao Haier Venture & Investment
Information Co., Ltd. (172,252,560
1.83)
Qingdao Haichuangzhi Management
Consulting
103,210,216
1.10Enterprise (Limited Partnership) ()
ALIBABAINVESTMENT
83,823,993
0.89
LIMITED
China Merchant Bank Co., Ltd. –Xingquan Herun mixed securities
71,302,442
0.76
investment fund
Shareholdings of top ten shareholders not subject to selling restrictions
Number of tradable shares without
Name of shareholder
selling restrictions

投资咨询有限公司

青岛海尔创业青岛海创智管理咨询企业（有限合伙）

150/366

StatusNature of shareholder

NumberForeign legal entity
Domestic non-state-owned
legal entity
Domestic non-state-owned
legal entity

None

Foreign legal entity

None

Unknown

None

Unknown

None

Domestic non-state-owned
legal entity

None

Domestic non-state-owned
legal entity

None

Unknown

None

Unknown

Class and number of shares
Class
NumberHaier Smart Home Co., Ltd. 2021 Annual Report

HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED

538,560,000

Haier Group Corporation
China Securities Finance Corporation Limited
Qingdao Haier Venture & Investment Information Co., Ltd.
()
Qingdao Haichuangzhi Management Consulting Enterprise(Limited Partnership) ()

682,954,688
182,592,654

Overseas listed
foreign shares
RMB ordinary
RMB ordinary
Overseas listed
foreign shares
RMB ordinary
RMB ordinary

172,252,560

RMB ordinary

172,252,560

103,210,216

RMB ordinary

103,210,216

ALIBABA INVESTMENT LIMITED

83,823,993

Overseas listed
foreign shares

83,823,993

71,302,442

RMB ordinary

71,302,442

HKSCC NOMINEES LIMITED

1,820,935,022

Haier COSMO Co., Ltd. (Haier Group Corporation

1,258,684,824
1,072,610,764

海尔卡奥斯股份有限公司)

青岛海尔创业投资咨询有限公司
青岛海创智管理咨询企业（有限合伙）China Merchant Bank Co., Ltd. – Xingquan Herun mixed
securities investment fundExplanation on repurchase accountof top ten shareholders
Explanation on delegated voting rights, entrusted voting
rights, abstained voting rights of the aforesaid shareholders

Related parties or parties acting in concert among the
aforesaid shareholders

1,820,935,022
1,258,684,824
1,072,610,764
538,560,000
682,954,688
182,592,654

Not applicableNot applicable海尔卡奥斯股份有限公司
青岛海尔创业投资咨询有限公司
青岛海创智管理咨询企业（有限(1) Haier COSMO Co., Ltd. () is a holding subsidiary of HaierGroup Corporation. Haier Group Corporation holds 51.20% of its equity. Each of Qingdao), HCHHaier Venture & Investment Information Co., Ltd.((HK) INVESTMENT MANAGEMENT CO., LIMITED and Qingdao Haichuangzhi
Management Consulting Enterprise (Limited Partnership) () is a party acting in concert with Haier Group Corporation;合伙）(2) The Company is not aware of the existence of any connections of other shareholders.

Explanation of preferential shareholders withrestoration of voting rights and their shareholdings

Not applicable

Note: (1) HKSCC NOMINEES LIMITED is the Banking Collection Account for the shareholders of the Company’s H-shares, which is the original data provided by China Hong
Kong securities registration agency to the Company after the merger according to local market practices and technical settings, not representing the ultimate shareholder. (2) As at theend of the reporting period, Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) engaged in refinancing and securities lending business, involving a totalof 1,700,000 shares, whilst the ownership of which had not been transferred. The actual number of shares held by it totaled 104,910,216 shares.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Number of shares held by top ten shareholders with selling restrictions and the selling
restrictions□ Applicable √ Not Applicable(III) Strategic investors or general legal persons who became the top ten shareholders due toplacing of new shares□ Applicable √ Not Applicable

IV. CONTROLLING SHAREHOLDER AND THE ULTIMATE CONTROLLER(I) Status of controlling shareholder

1 Legal person√ Applicable □ Not Applicable

Name

Haier COSMO Co., Ltd. (Person in charge of the Company or Zhou Yunjie (周云杰)海尔卡奥斯股份有限公司)

legal representative
Establishment date

1988–06–30

Principal businessInformation technology integration and Internet of Things technology services:
industrial automation technology research and development, technicalconsulting; research and development and manufacturing of electrical appliances,electronic products, mechanical products, communication equipment and related
accessories, industrial automation control equipment, computer hardware andsoftware and auxiliary equipment; import and export business (operated within
the scope approved by MOFCOM); wholesale and retail: domestic commerce(except for merchandises prohibited by the state); investment in medical industry;
investment advisory services; enterprise management consulting. (For projects
subject to approval, business activities can only be carried out after the approval
by relevant departments)

Shareholding of other controlling andparticipating domestic and overseas listedcompanies in the reporting period

Indirect controlling/participating Company: ‘Qingdao Haier Biomedical Co.,（青岛海尔生物医疗股份有限公司）(stock name: ‘Haier Biomedical’,stock code: 688139), Yingkang Life Technology Co., Ltd. (盈康生命科技股份有限公司)(stock name: ‘Yingkang Life’, stock code: 300143), ‘Qingdao Bank
Co., Ltd.’（青岛银行股份有限公司）(stock name: ‘Bank of Qingdao’ , stockLtd.’

code: 002948 and 3866.HK), ‘China International Capital Corporation Limited’(stock name: ‘CICC’, stock code: 601995 and 3908.HK) etc.
Other explanation

Nil

152/366

Haier Smart Home Co., Ltd. 2021 Annual Report

2 Natural person□ Applicable √ Not Applicable

3 Explanation on the absence of controlling shareholders of the Company□ Applicable √ Not Applicable

4 Explanation on the change in controlling shareholders during the reporting period□ Applicable √ Not Applicable

5 Framework of the ownership and controlling relationship between the Company and its
controlling shareholder√ Applicable □ Not Applicable(II) Status of the ultimate controller

1 Legal person√ Applicable □ Not Applicable

Name

Haier Group Corporation

Person in charge of the Company or

Zhou Yunjie (周云杰)legal representative
Establishment date

1980–03–24

Principal businessTechnology development, technology consultation, technology transfer andtechnology services (including industrial Internet, etc.); data processing; digitaltechnology, intelligent technology, software technology; research and development,
sales and after-sales service of robots and automation equipment products; logistics
information service; research and development and sales of software technology forsmart home products and solutions systems; manufacturing of household appliances,153/366

Haier Smart Home Co., Ltd. 2021 Annual Reportelectronic products, communication equipment, electronic computers andaccessories, general machinery, kitchen utensils, industrial robots; wholesale andretail of domestic commerce (except for the national dangerous prohibition franchiseexclusive control merchandises); import and export business (see the foreign tradeenterprise finalized certification for details); economic and technologicalconsultation; research and development and transfer of technological achievements;
rental of owned properties. (For projects subject to approval, business activities canonly be carried out after the approval by relevant departments)
Shareholding of other controllingand participating domestic andoverseas listed companies in thereporting period

Indirect controlling/participating Company: ‘Qingdao Haier Biomedical Co., Ltd.’（青岛海尔生物医疗股份有限公司） (stock name: ‘Haier Biomedical’, stock
code: 688139), Yingkang Life Technology Co., Ltd. (盈康生命科技股份有限公司)(stock name: ‘Yingkang Life’, stock code: 300143), ‘Qingdao Bank Co., Ltd.’（青岛银行股份有限公司）(stock name: ‘Bank of Qingdao’, stock code: 002948 and
3866.HK), China International Capital Corporation Limited’ (stock name: ‘CICC’,stock code: 601995 and 3908.HK)

Other explanation

Nil

2 Natural person□ Applicable √ Not Applicable

3 Explanation on the absence of ultimate controller of the Company□ Applicable √ Not Applicable

4 Explanation on the change in control over the Company during the reporting period□ Applicable √ Not Applicable

5 Framework of ownership and controlling relationship between the Company and the ultimate
controllers√ Applicable □ Not Applicable

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6 The ultimate controller controls the Company by way of Trust or other assets management□ Applicable √ Not Applicable(III) Introduction of controlling shareholders and ultimate controllers√ Applicable □ Not Applicable

Haier Group Company is registered as a joint-stock enterprise. According to the statement issued
by the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believed that theenterprise nature of Haier Group Company is a collective owned enterprise.

V.

THE PROPORTION OF THE ACCUMULATED NUMBER OF SHARES PLEDGED BY
THE CONTROLLING SHAREHOLDERS OR THE LARGEST SHAREHOLDER OF
THE COMPANY, TOGETHER WITH THE PARTIES ACTING IN CONCERT WITH
THEM TO THE NUMBER OF SHARES OF THE COMPANY HELD BY THEM
AMOUNTS TO MORE THAN 80%□ Applicable √ Not Applicable

VI.

OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDINGPERCENTAGE OVER 10%□ Applicable √ Not ApplicableVII. EXPLANATION OF REDUCTION OF SHARE RESTRICTIONS□ Applicable √ Not Applicable

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VIII. SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE
REPORTING PERIOD√ Applicable □ Not Applicable

Unit and Currency: RMB
Name of share repurchase plan

Haier Smart Home Co., Ltd.’s public share proposal in relation to thepartial repurchase of A Shares

Date of disclosure of the share repurchase plan

6 March 2021

Number of shares proposed to repurchased and its

86,960,000 shares, 0.94

percentage to the total share capital (%)

Proposed amount of repurchase

RMB 2 -4 billion

Proposed period of repurchase

6 March 2021 – 16 November 2021

Purpose of repurchase

Used in entirety to implement the Company’s equity incentive
scheme and/or employee share ownership plans

Amount repurchased (share)
Repurchased amount as a percentage to the underlying
shares covered by the equity incentive scheme (%) (if any)
Progress of the Company’s reduction of its holdings of
repurchased shares by way of centralised bidding

79,492,366//

Note: During the reporting period, the Company also implemented the H-share repurchase scheme. For
details, please refer to "2. Statement on the changes in shares" under "Section VII Changes in Sharesand Information about Shareholders " of this report and the Announcement on the Changes in Shares ofOverseas Listed Foreign Shares (H Shares) of Haier Smart Home Co., Ltd. (《海尔智家股份有限公司

关于境外上市外资股（H 股）股份变动情况的公告》) (No.: Lin 2021-049) disclosed by theCompany on 1 July 2021.

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Section VIII Relevant Information of Preferred Shares□ Applicable √ Not Applicable

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Section IX Relevant Information of Bonds

I.

Enterprise bond, corporate bond, and non-financial corporate debt financing instruments√Applicable □Not Applicable(1) Enterprise bond□Applicable √Not Applicable(2) Corporate bond□Applicable √Not Applicable(3) Non-financial corporate debt financing instruments in interbank bond market√Applicable □Not Applicable

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1. General information on non-financial corporate debt financing
Unit and Currency: RMB100 million

Bond Name

Haier Smart
Home Co., Ltd.
2020 firsttranche of ultrashort-term
financing bondHaier Smart
Home Co., Ltd.
2020 second
tranche of ultrashort-term
financing bond

Code

Date
of
issue

Value
date

20 Haier
Smart
Home
SCP001012002518

17 July
2020

17 July2020

20 Haier
Smart
Home
SCP002012003094

Short
Name

28
August2020

28
August2020

Expirydate

13January2021

24
February2021

Bondbalance

Interest
Rate
(%)

30

1.45

25

1.71

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Payment
methodofprincipal
andinterest

One-off
Principal
andinterest
payment
uponmaturity

Tradingvenue

Arrangementof investor
suitability (ifany)

Tradingmechanism

Whetherrisk ofdelistingexists

None

/

No

None

/

No

InterbankbondmarketHaier Smart Home Co., Ltd. 2021 Annual Report

Response measure in respect of risk of delisting of bonds□Applicable √Not Applicable

Outstanding bonds past due□Applicable √Not Applicable

Interest payment of bonds during the reporting period√Applicable □Not Applicable

Bond Name

Explanation on interest payment

Haier Smart Home Co., Ltd. 2020 first tranche

the principal and interest have been settled inof ultra-short-term financing bondfull as agreed

Haier Smart Home Co., Ltd. 2020 second

the principal and interest have been settled intranche of ultra-short-term financing bondfull as agreed

2. Trigger and implementation of issuer or investor option terms and investor protection terms√Applicable □Not Applicable

For the above two tranches of ultra-short-term financing bond, there were trigger mechanisms ofinvestor protection emergency response in place in case of extraordinary events to protect the interestsof the investors and minimize the adverse impact to the bond market. For details of the investor protection
mechanism, please refer to relevant documents, such as the prospectus of ultra-short-term financing
bonds, published by the Company on public document disclosure platforms for debt financing
instruments, including Chinamoney.com.cn.

During the valid period of the above-mentioned financing bonds, the Company did not experience any
relevant event triggering the investor protection mechanism.

3. Utilization of funds raised as at the end of the reporting period□Applicable √Not Applicable

Progress of utilizing funds raised in construction projects and its operational efficiency□Applicable √Not Applicable

Explanation on change in use of funds raised from bonds during the reporting period□Applicable √Not Applicable

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Oher explanations□Applicable √Not Applicable

4. Adjustment to credibility assessment results□Applicable √Not ApplicableOher explanations□Applicable √Not Applicable

5. Guarantee, repayment schedule and implementation and change of other repayment guarantee
measures during the reporting period and their impact□Applicable √Not Applicable

The above two tranches of ultra-short-term financing bond were not guaranteed and the repayment
was primarily funded by monetary assets of the Company. The Company devised prudent and detailed
financial arrangements and plans and delegated the task of repayment of debt financing instruments tothe financial department of the Company to obtain funding for timely repayment, ensure capital to be
deployed as planned and confirm the timely and full settlement of principal and interests of the debt
financing instruments, thereby properly safeguarding the interests of bondholders.

6. Explanation on other information on non-financial corporate debt financing instruments□Applicable √Not Applicable(IV) Losses exceeding 10% of net assets as at the end of previous year in the scope of combined
statements during the reporting period□Applicable √Not Applicable(V) Overdue interest-bearing liabilities other than bonds as at the end of the reporting period□Applicable √Not Applicable(VI) The impacts of breaching the requirements under laws and regulations, our articles ofassociation, our administrative system for information disclosure and agreements or undertakingsin the prospectuses of bonds on the interests of bond investors during the reporting period□Applicable √Not Applicable(VII) Accounting data and financial indicators for the last 2 years as of the end of the reporting
period√Applicable □Not Applicable

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Unit and Currency: RMB

Key indicators
Net profit after deduction of non-

2021

2020

Yoy change (%)

11,831,272,558.29

6,457,813,335.37

83.21

Liquidity ratio

0.99

1.04

-4.81

Quick ratio

0.67

0.78

-14.10Debt to assets ratio (%)

63

67

-5.97

Total liabilities ratio of EBITDA

38

32

18.75

Interest coverage ratio

23.34

11.22

108.02

Cash interest coverage ratio

32.47

13.27

144.69

EBITDA interest coverage ratio

30.44

15.06

102.12recurring profit or loss

II. Convertible corporate bond√Applicable □Not Applicable(I) Convertible bond issue√Applicable □Not ApplicableOn 27 October 2020, the CSRC issued “reply to the approval for the issue of overseas listed foreign
shares and convertible corporate bonds by Haier Smart Home Co., Ltd.” (《关于核准海尔智家股份有限公司发行境外上市外资股及可转换公司债券的批复》) (Zheng Jian Xu Ke [2020] No. 2768)(hereafter, the “CSRC Reply”) to approve: (1) Haier Smart Home to issue not more than 2,856,526,138
overseas listed foreign Shares (including Shares to be issued pursuant to the exercise of conversion rights
by the holders of convertible corporate bonds with an amount of not more than HK$8 billion or equivalent
in any foreign currency) with a par value of RMB1, all registered as ordinary shares. Upon the completionof the issue, Haier Smart Home may be listed on the main board of the Hong Kong Stock Exchange; (2)With the guarantee of Haier Smart Home, its wholly-owned foreign subsidiary issued overseas corporate
bonds with an amount of not more than HK$8 billion or equivalent in any foreign currency, convertible
into overseas listed foreign shares of the issuer. Pursuant to this and approval from relevant parties,
2,448,279,814 H Shares and convertible bonds were issued by the Company and Harvest International
Company, a wholly-owned subsidiary of the Company in the Hong Kong Stock Exchange on 23

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December 2020, respectively (exchangeable bonds of HK$8 billion issued in November 2017 wereconverted into convertible bonds, resulting in valid convertible bonds of HK$7.993 billion, which wereconvertible into H Shares of the Company).

Please refer to the prospectus and other relevant documents

disclosed by the Company in the Hong Kong market during the reporting period and the Report on
Implementation of Significant Asset Acquisition and Connected Transactions (《重大资产购买暨关联交易实施情况报告书》) disclosed by the Company on 26 December 2020 for details.

For the above-mentioned bonds, 105.11% of the remaining par value of the bonds were repaid ina one-off repayment of principal and interest upon maturity.

(II) Convertible bond holders and guarantors for the reporting period√Applicable □Not Applicable

HarvestInternational

Company

HK$8,000,000,000 Zero Coupon Guaranteed

Name of convertible corporate bond

Convertible Bonds due 2022 (hereafter, “H Share
Convertible Bonds”)

Number of convertible bond holders as at the end

1of the period
Guarantor of the Company’s convertible bonds

Haier Smart Home Co., Ltd.

Top 10 holders of convertible bonds are as follows:
Name of holder of corporate

Holdings as at the end of theconvertible bonds

period ($)

HSBC Nominees (Hong Kong)
Limited

Holding percentage (%)

399,000,000

100

Note: (1) the aforementioned bonds as at the end of the period are denominated in Hong Kong Dollar;(2) H Share Convertible Bonds of the Company are held on behalf by HSBC Nominees (Hong Kong)
Limited as the sole legal holder, who is not the ultimate holder. Information on the ultimate holders of
the bonds is only stored in the clearing system and, without the authorization from the ultimate holder,
the clearing system shall not directly provide the detailed list of ultimate bond holders to any cooperating
party.

(III) Conversion of convertible bonds for the reporting period√Applicable □Not Applicable

Unit and Currency: HKD
Number of convertible

Before theIncrease/decrease for the conversion

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After the conversion

Haier Smart Home Co., Ltd. 2021 Annual Report

corporate bondconversion

Conversion

H Share Convertible Bonds

7,993,000,000

7,594,000,000

Redemption

Resale399,000,000

Cumulative conversion of convertible bond for the reporting period√Applicable □Not Applicable
Currency: HKD
Name of convertible corporate bond H Share Convertible Bonds

H Share Convertible Bonds

Amount of conversion for the Reporting

7,594,000,000

Period ($)
Number of conversion for the Reporting

403,210,889

Period (Share)
Cumulative number of conversion

403,210,889(Share)Percentage of cumulative number ofconversion to total issued Shares of the

4.47

Company prior to the conversion (%)
Outstanding amount ($)

399,000,000

Percentage of outstanding amount tototal amount of convertible bonds issued

4.99

(%)

(IV) Historical adjustment of conversion price√Applicable □Not Applicable

Unit and Currency: HKD
Name of convertible corporate bondDate of adjustment toconversion priceconversion price(adjusted)

23 August 2021

18.58

H Share Convertible Bonds
Date of disclosure

2 September 2021

Media for

Explanation on adjustment

disclosure

to conversion priceHong Kong

The implementation of the

Stock

Company’s 2020 equity

Exchange, etc.

distribution plan

Latest conversion price as of the end of the reporting

18.58

period(V) Liabilities, change in credit and cash arrangements of repayment in the coming year of theCompany√Applicable □Not Applicable

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As at the end of the reporting period, liabilities of the Company amounted to RMB136,376.5328
million, in which current liabilities amounted to RMB124,796.9546 million and non-current liabilities
amounted to RMB11,579.5782 million.

The Company remains stable in every operating condition with reasonable asset structure and good
credibility and is capable of providing stable and sufficient working capital for the interests of convertible
corporate bonds and repayment of the bonds in the coming year.

(VI) Other information on convertible bonds√Applicable □Not ApplicableOn 23 November 2017, the first 2017 Extraordinary General Meeting of the Company adopted the
Resolution of Qingdao Haier Co., Ltd. on the Scheme for Public Offering of Convertible Corporate
Bonds (the “A-share Convertible Bonds”) upon consideration. Pursuant to the resolution at this general
meeting and the approval documents of the China Securities Regulatory Commission and others, theCompany completed the issue of convertible corporate bonds in December 2018, with a total issue
amount of RMB3,007.49 million. The bonds were listed on 18 January 2019, which is referred to as“Haier Convertible Bonds” and its bond code is 110049. For details, please refer to the Prospectus for
the Public Offering of A-share Convertible Corporate Bonds by Qingdao Haier Co., Ltd. as disclosed on
14 December 2018, and the Announcement on the Listing of Convertible Corporate Bonds by Qingdao
Haier Co., Ltd. as disclosed on 16 January 2019 and other relevant documents. As the convertible bonds
in 2019 met the redemption conditions and the Board of Directors of the Company decided to exercise
the redemption right after consideration and approval, the Company redeemed the balance of theconvertible bonds in full up to the registered amount on redemption registration date. After theredemption, the convertible bonds of the Company were delisted on 17 December 2019. At present, theA-share convertible bonds have ceased to be in existence, but the funds raised from the issuance of thebonds have not been fully utilized. As of 31 December 2021, RMB2,681.48 million of the funds raised
from A-share convertible bonds have been utilized, with a balance of RMB369.1982 million (the accountbalance includes the income generated from the purchase of wealth management products, interest on
demand deposits, foreign exchange gains and losses and the not-yet-invested capital raised). For detailsof the use of funds, please refer to the Special Audit Report of Haier Smart Home Co., Ltd. on the Deposit
and Actual Utilization of Funds Raised in 2021, which was disclosed on the same date as this report.

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Section X Financial ReportI.

AUDIT REPORT√

Applicable□

Not Applicable
Audit Report
He Xin Shen Zi. (2022) No.000358

To all shareholders of Haier Smart Home Co., Ltd.:I. AUDIT OPINION
We have audited the financial statements of Haier Smart Home Co., Ltd. (hereinafter referred toas the ‘Haier Smart Home Co.’), which comprise the Consolidated and the Company’s Balance Sheet as
at 31 December 2021, the Consolidated and the Company’s Income Statement, the Consolidated and theCompany’s Cash Flow Statement, the Consolidated and the Company’s Statement of Changes inShareholders’ Equity for the year 2021, and notes related to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, theConsolidated and the Company’s financial position of the Haier Smart Home Co as at 31 December 2021,
and the Consolidated and the Company’s financial performance and cash flow for the year 2021 inaccordance with the requirements of Accounting Standards for Business Enterprises.

II. BASIS OF OUR AUDIT OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities
under those standards are further described in Auditor’s responsibilities for the Audit of Financial
Statements section of the report. We are independent of Haier Smart Home Co in accordance with the
CICPA’s Code of Ethics for Professional Accountants (the Code), and we have fulfilled our other ethicalresponsibilities in accordance with the Code. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the financial statements for the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We identify the following matters as the key audit mattersthat need to be communicated in the audit report:

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Key Audit Matters(I)

Audit Response

Provision for impairment of goodwill and intangible assets with indefinite useful lives

Relevant disclosures are included in Note V. 28 Other significant
We mainly implemented the following audit procedures on theaccounting policies and accounting estimates and Note V.19
provisions for the impairment of goodwill and intangible assets
Impairment of long-term assets to the financial statements.
with indefinite useful life:
As of 31 December 2021, the book value of goodwill was(1) Compared the actual operating results of the related assets
RMB21.827 billion, and the book value of intangible assets withgroup with previous year’s forecasted figures, to assess theindefinite useful lives was RMB2.476 billion, without any provision
reliability of the management forecast on cash flow;
for asset impairment. Whether the provision for impairment of longterm assets was sufficient had great influence to the financial(2) Compared the input of cash flow forecast with historical data,statements.
approved budget and business plan;Significant management judgments are involved in calculation of(3) Tested the calculation accuracy of the discounted cash flow
asset group’s recoverable amount, such as revenue growth rate, grossmodel;
margin, discount rate, etc.
(4) Assessed the appropriateness of parameters in the cash flow
Provision for impairment of goodwill and intangible assets withconversion model, such as the discount rate and the perpetualindefinite useful lives is considered as the key audit matter due to thegrowth rate. The assessment is based our understanding of thesignificant amount and management judgement involved inCompany’s businesses and the industry.
calculation.

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Haier Smart Home Co., Ltd. 2021 Annual Report(II) Provision for impairment of inventory
Relevant disclosures are included in Note VII.8 Inventory to thefinancial statements.
We mainly implemented the following audit procedures on theprovision for impairment of inventories:
The Company’s inventories are measured at the lower of cost and net
realizable value. As of 31 December 2021, the inventory balance was(1) Obtained the calculation table for provision for impairment of
RMB41.229 billion, and the provision for impairment of inventory
inventory of the Company, and reviewed the conditions andwas RMB1.366 billion and the book value was RMB39.863 billion.
aging of the products models stated in the table to see whether
Whether the provision for the impairment of inventories wasthey are consistent with the information obtained throughsufficient and accurate had great influence to the financial statements.
physical inventory on a sample basis;
The Company determines the net realizable value of inventory based(2) Compared the major parameters estimated by managementon the estimated selling price minus the estimated selling expenses
with historical data, and assessed the appropriateness;and related taxes.
(3) Assessed the selling price estimated by the management, andManagement estimates the selling price based on the status ofchecked the inventory against the actual selling price after theinventory. The estimation process involves significant managementbalance sheet date on a sample basis;
judgments such as inventory status, repair rate, discount rate, etc.
(4) Assessed selling expenses and related tax estimated by
Provision for inventories is considered as the key audit matter due tomanagement and compared with actual amounts incurred.
the significant amount and management judgement involved in
calculation.
(III) Product warranty
Relevant disclosures are included in Note VII. 32 Non-current
liabilities due within one year and Note VII. 39 Estimated liabilities

We mainly implemented the following audit procedures on theto the financial statements.

estimated liabilities:

Estimated liabilities of the Company are mainly accrued due to(1) Obtained the calculation table on provisions of thecurrent obligations arising from product warranty. As of 31

management;

December 2021, the balance of the estimated liabilities and noncurrent liabilities due within one year related to product warranty was(2) Compared the main parameters estimated by management

RMB3.681 billion, and whether the provision for warranty waswith historical data;

sufficient and accurate had great influence to the financial statements.
(3) Tested the accuracy of the calculation on estimated liabilities;
Estimated liabilities for product warranty of the Company were
measured in accordance with the best estimate of the cost to fulfill(4) Compared and analyzed the calculation results of thethe relevant current obligations.

estimated liabilities and the Company’s actual operation;

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Calculation of the product warranty involves management’s
significant judgments based on historical experience, such as:
replacement rate, repair rate, and loss due to disassemble product.

Estimated liabilities are considered as the key audit matters due to thesignificant amount and management judgement involved in
calculation.

IV. OTHER INFORMATION
The management of Haier Smart Home Co (hereinafter referred to as the “Management”) is
responsible for other information. Other information includes the information covered in the 2021 annual
report of Haier Smart Home Co, but does not include the financial statements and our audit reports.

Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management is responsible for the preparation of the financial statements that give a true andfair view in accordance with the requirements as set out in the Accounting Standards for BusinessEnterprises, and for such internal control as necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management are responsible for assessing the ability ofHaier Smart Home Co to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the management either intends toliquidate Haier Smart Home Co or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the financial reporting process ofHaier Smart Home Co.

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VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an audit report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with auditing standards, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also perform the following tasks:(I)

Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsible to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

(II)

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.

(III)

Evaluate the appropriateness of accounting policies used by the Management and thereasonableness of accounting estimates and related disclosures made by the Management.

(IV)

Conclude on the appropriateness of the Management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cause significant doubt on the ability of Haier Smart
Home Co to continue as a going concern. If we conclude that a material uncertainty exists, weare required by the auditing standards to draw attention in our audit report to the related
disclosures in the financial statements or; if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit
report. However, future events or conditions may cause Haier Smart Home Co to cease tocontinue as a going concern.

(V)

Evaluate the overall presentation, structure and content of the financial statements, and whether
the financial statements represent the underlying transactions and events in a manner that

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(VI)

Obtain sufficient and appropriate audit evidence regarding the financial information of theentities or business activities within Haier Smart Home Co to express an opinion on the financial
statements. We are responsible for the direction, supervision and performance of the group audit,
and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with governance, we determine those mattersthat are of most significance in the audit of the financial statements of the current period and therefore
constitute the key audit matters. We describe these matters in our audit report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our audit report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.

Hexin Certified Public Accountants LLP
Certified Public Accountant: Zhaobo (Engagement Partner)
Certified Public Accountant: Wang Lin
Jinan, China
30 March 2022

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Haier Smart Home Co., Ltd. 2021 Annual ReportII.

FINANCIAL STATEMENTS
Consolidated Balance Sheet
31 December 2021

Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items

Notes

31 December 2021

31 December 2020

Current assets:
Monetary funds

VII.1

45,857,170,275.40

46,467,732,459.51

Financial assets held for trading

VII.2

2,786,075,529.09

2,165,192,497.83

Derivative financial assets

VII.3

79,819,974.01

77,839,006.63

Bills receivable

VII.4

13,354,791,068.29

14,136,349,754.34

Accounts receivable

VII.5

14,631,018,397.43

15,930,024,286.67

VII.6

857,233,123.00

765,822,151.70

VII.7

1,955,082,163.25

1,717,691,799.32

294,379,438.82

322,473,254.91

Provision of settlement fundFunds lent

Financing receivables
Prepayments
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables
Including: Interest receivables
Dividends receivables

4,915,409.42

Financial assets purchased under resaleagreements
Inventories

VII.8

39,863,171,040.31

29,446,973,404.75

Contract assets

VII.9

304,434,294.70

263,412,927.58

VII.103,918,981,117.19

3,284,857,281.38

123,607,776,982.67

114,255,895,569.71

308,998,755.30

330,588,978.97

Assets held for saleNon-current assets due in one year
Other current assets
Total current assets
Non-current assets:
Loans and advances granted
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments

VII.11

23,232,200,859.25

21,567,658,450.89

Investments in other equity instruments

VII.12

4,848,709,438.96

2,659,025,265.54

172/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Other non-current financial assets
Investment properties

VII.1324,964,888.48

28,387,002.81

Fixed assets

VII.1422,307,089,801.15

20,911,790,241.39

Construction in progress

VII.154,183,263,398.79

3,610,195,094.37

Right-of-use assets

VII.16

2,734,016,745.17

2,839,858,259.27

Intangible assets

VII.179,549,607,918.13

10,018,145,894.06

Development cost

VII.18227,892,229.13

167,746,724.13

Goodwill

VII.1921,827,103,060.76

22,518,460,337.64

Long-term prepaid expenses

VII.20588,676,388.91

456,354,639.51

Deferred income tax assets

VII.21

1,854,809,732.90

2,208,301,258.25

Other non-current assets

VII.22

2,164,384,013.14

1,925,761,560.17

Total non-current assets

93,851,717,230.07

89,242,273,707.00

Total assets

217,459,494,212.74

203,498,169,276.71

VII.23

11,226,212,134.39

7,687,908,165.88

Financial liabilities held for trading

VII.24

6,294,014.40

26,952,508.66

Derivative financial liabilities

VII.2580,212,433.24

239,582,532.90

Bills payable

VII.2625,023,238,406.72

21,236,057,053.67

Accounts payables

VII.2742,344,857,144.49

36,309,048,800.85

VII.2810,016,870,340.44

6,269,584,417.32

Payables for staff’s remuneration

VII.294,113,881,586.96

3,763,036,123.19

Taxes payable

VII.302,603,683,461.84

2,401,122,732.07

Other payables

VII.31

17,524,160,065.70

17,063,294,004.33

Biological assets for production
Oil and gas assets

Current liabilities:
Short-term borrowings
Borrowings from central bankFunds borrowed

Receipts in advanceContract liabilities
Disposal of repurchased financial assets
Absorbing deposit and deposit in inter-bankmarketCustomer deposits for trading in securities
Amounts due to issuer for securities
underwriting

Including: Interest payables
Dividends payables

10,639,313.22

Fees and commissions payable

173/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Reinsurance Accounts payables
Liabilities held for saleNon-current liabilities due within one year

VII.32

9,623,014,847.76

7,522,724,913.40

Other current liabilities

VII.33

2,234,530,124.82

6,891,109,386.79

124,796,954,560.76

109,410,420,639.06

Total current liabilities
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings

VII.34

3,038,573,824.53

11,821,416,259.81

Bonds payable

VII.35

334,730,048.82

6,713,501,050.27

Lease liabilities

VII.36

1,960,894,981.47

2,072,702,352.68

Long-term payables

VII.37

99,602,707.76

98,203,261.27

Long-term payables for staff’s remuneration

VII.381,173,151,761.64

1,245,775,024.35

Estimated liabilities

VII.391,948,565,477.11

1,442,844,036.73

Deferred income

VII.40852,794,567.20

633,761,669.48

Deferred income tax liabilities

VII.212,121,803,173.83

1,900,401,265.97

Other non-current liabilities

49,461,683.90

27,033,458.13

Total non-current liabilities

11,579,578,226.26

25,955,638,378.69

Total liabilities

136,376,532,787.02

135,366,059,017.75

Including: Preference shares
Perpetual bonds

Owners’ equity (or shareholders’ equity):
Paid-in capital (or share capital)

VII.41

9,398,704,530.00

9,027,846,441.00

Other equity instruments

VII.42

118,017,507.59

2,364,195,333.79

VII.4322,549,345,568.94

15,007,475,607.40

2,424,038,819.70

28,896,550.65

VII.44-1,176,851,699.92-1,046,216,729.06

VII.453,438,615,909.84

3,045,334,539.60

VII.4647,907,134,328.80

38,467,787,059.79

79,810,927,325.55

66,837,525,701.87

1,272,034,100.17

1,294,584,557.09

81,082,961,425.72

68,132,110,258.96

Including: Preference shares
Perpetual bonds
Capital reserve
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve
General risk provisions
Undistributed profits
Total equity attributable to owners (orshareholders) of the Parent Company
Minority shareholders’ interests
Total owners’ equity (or shareholders’equity)174/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Total liabilities and owners’ equity (or217,459,494,212.74

203,498,169,276.71

shareholders’ equity)

Person in charge of the Company: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Balance Sheet of the Parent Company
31 December 2021
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items

Notes

31 December 2021

31 December 2020

4,043,535,735.48

8,286,549,909.64

546,532,442.90

5,491,536,070.42

275,052,864.92

295,050,991.15

16,245,280,168.41

3,906,373,387.61

51,632,471.99

38,582,434.11

Current Assets:
Monetary funds
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable

XVIII.1

Financing receivables
Prepayments
Other receivables

XVIII.2

Including: Interest receivables
Dividends receivables

3,615,840,000.00

Inventories

1,139,135.32

73,974,562.87

Other current assets

337,476,209.01

459,309,301.58

Total current assets

21,449,016,556.04

18,512,794,223.27

52,513,760,277.77

52,290,227,070.21

1,615,450,032.92

804,334,894.58

Contract assets
Assets held for saleNon-current assets due within one year

Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments

XVIII.3

Investments in other equity instruments
Other non-current financial assets

175/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Investment properties
Fixed assets

179,789,817.34

196,529,502.16

Construction in progress

17,569,516.17

8,319,418.36

Right-of-use assets

1,217,186.49

2,076,376.95

Intangible assets

55,171,485.39

62,103,457.66

Long-term prepaid expenses

3,781,398.54

4,208,602.97

Deferred income tax assets

159,338,211.77

154,335,216.49

Other non-current assets

803,323,404.28

26,894,836.99

Total non-current assets

55,349,401,330.67

53,549,029,376.37

Total assets

76,798,417,886.71

72,061,823,599.64

183,690,889.86

248,172,640.78

Contract liabilities

12,605,139.93

8,716,599.17

Payables for staff’s remuneration

12,323,670.21

86,872,482.44

Taxes payable

1,747,023.87

55,756,358.98

Other payables

34,484,355,762.60

29,642,219,320.03

877,995.65

20,840,106.80

Other current liabilities

5,420,156.55

5,538,254,928.01

Total current liabilities

34,701,020,638.67

35,600,832,436.21

Biological assets for production
Oil and gas assets

Development cost
Goodwill

Current liabilities:
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables
Receipts in advance

Including: Interest payable
Dividends payable
Liabilities held for saleNon-current liabilities due within one
year

Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds

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Haier Smart Home Co., Ltd. 2021 Annual Report

Lease liabilities

877,995.63

Long-term payable
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income

19,270,000.00

24,250,000.00

Deferred income tax liabilities

448,965,654.25

219,544,771.62

468,235,654.25

244,672,767.25

35,169,256,292.92

35,845,505,203.46

9,398,704,530.00

9,027,846,441.00

Capital reserve

25,802,279,483.13

20,408,352,380.95

Less: treasury stock

1,495,170,675.08

Other non-current liabilities
Total non-current liabilities
Total liabilities
Owners’ equity (or Shareholders’ equity):
Paid-in capital (or share capital)
Other equity instruments
Including: Preference shares
Perpetual bonds

Other comprehensive income

621,302,944.83-10,030,704.15

Surplus reserve

2,833,469,684.39

2,440,188,314.15

Undistributed profits

4,468,575,626.52

4,349,961,964.23

41,629,161,593.79

36,216,318,396.18

76,798,417,886.71

72,061,823,599.64

Special reserve

Total owners’ equity (or shareholders’equity)Total liabilities and owners’ equity (orshareholders’ equity)

Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong
WeiPerson in charge of accounting department: Ying Ke

Consolidated Profit Statement
January-December 2021
Unit and Currency: RMB
Items

Notes

I. Total operating revenue
Including: Operating revenue

VII.47

Interest income
Insurance premiums earned

177/366

2021

2020

227,556,143,618.17

209,723,430,081.03

227,556,143,618.17

209,723,430,081.03

Haier Smart Home Co., Ltd. 2021 Annual Report

Fee and commission income
II. Total cost of operations

213,331,476,543.09

199,875,942,230.54

VII.47

156,482,657,366.94

147,471,922,284.89

Taxes and surcharges

VII.48806,978,590.56

660,602,624.67

Selling expenses

VII.4936,553,667,004.06

33,641,711,147.72

Administrative expenses

VII.5010,444,475,658.24

10,052,645,415.72

VII.51

8,357,332,946.25

6,852,861,422.32

VII.52686,364,977.04

1,196,199,335.22

712,448,120.18

1,327,091,393.08

564,584,788.99

486,204,314.18

VII.53

957,500,458.03

1,150,848,182.38

VII.542,403,102,640.29

4,060,104,212.78

VII.55

119,277,623.85

62,629,747.80

VII.56-520,299,915.42-166,380,605.76

VII.57-1,418,753,618.82-1,335,630,451.94

VII.58110,983,720.04-12,807,590.96

15,876,477,983.05

13,606,251,344.79

Including: Operating cost
Interest expenses
Fee and commission expenses
Insurance withdrawal payment
Net payment from indemnity
Net provisions withdrew for insurance
contract liability
Insurance policy dividend paid
Reinsurance cost

R&D expenses
Financial expenses
Including: Interest expenses
Interest income
Add: Other income
Investment income (losses are represented by‘-’)
Including:investment income of associates andjoint ventures
Income generated from the derecognition offinancial assets measured at amortized cost
Exchange gain (losses are represented by ‘-’)Gains on net exposure hedges (losses are
represented by ‘-’)Income from change in fair value (losses
are represented by ‘-’)Loss on credit impairment (losses are
represented by ‘-’)Loss on assets impairment (losses are
represented by ‘-’)Gain from disposal of assets (losses are
represented by ‘-’)III. Operating profit (losses are represented by ‘-’)178/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Add: non-operating income

VII.59198,793,345.45

197,945,472.39

Less: non-operating expenses

VII.60159,240,779.44

241,918,187.91

15,916,030,549.06

13,562,278,629.27

2,698,963,370.55

2,233,126,505.02

13,217,067,178.51

11,329,152,124.25

13,217,067,178.51

11,329,152,124.25

13,067,038,271.85

8,883,129,055.16

150,028,906.66

2,446,023,069.09-148,110,004.96-2,576,197,838.54-132,249,780.03-2,537,334,822.50

1,201,363,091.13-73,070,215.55

36,214,421.81-23,030,495.09

1,165,148,669.32-50,039,720.46-1,333,612,871.16-2,464,264,606.95-50,414,905.68-368,885,317.13

IV. Total profit (total losses are represented by ‘-’)Less: income tax expense

VII.61

V. Net profit (net losses are represented by ‘-’)(1) Classification by continuous operation
1.

Net profit from continuous operation(net losses are represented by ‘-’)2.

Net profit from discontinued
operation (net losses are represented by‘-’)(2) Classification by ownership of the equity
1.

Net profit attributable to shareholdersof the Parent Company (net losses are
represented by ‘-’)2.

Profit or loss attributable to minority
shareholders (net losses are representedby ‘-’)

VI. Other comprehensive income, net of tax(I)

VII.62Other comprehensive income attributable toowners of the Parent Company, net of tax
1.

Other comprehensive income that cannot bereclassified into the profit or loss
(1)

Changes arising from re-measurementof defined benefit plans(2)

Other comprehensive income thatcannot be transferred into profit or loss
under equity method(3)

Changes in fair value of investments inother equity instruments(4)

Changes in fair value of credit risks ofthe enterprise

2. Other comprehensive income to be reclassified
into the profit or loss
(1)

Other comprehensive income that can betransferred into profit or loss under equity
method179/366

Haier Smart Home Co., Ltd. 2021 Annual Report(2)

Changes in fair value of other debt
Investments(3)

Reclassified financial assets that are credited
to other comprehensive income(4)

Credit impairment provision for other debt
investments(5) Reserve for cash flow hedging(6)102,858,281.74-104,122,543.00-1,386,056,247.22-1,991,256,746.82-15,860,224.93-38,863,016.04

13,068,957,173.55

8,752,954,285.71

12,934,788,491.82

6,345,794,232.66

134,168,681.73

2,407,160,053.05

Exchange differences on translation offinancial statements denominated inforeign currencies(7) Others(II)

Other comprehensive income attributable tominority shareholders, net of tax
VII. Total comprehensive income(I)

Total comprehensive income attributable tothe owners of Parent Company(II)

Total comprehensive income attributable to theminority shareholders
VIII. Earnings per share:(I) Basic earnings per share (RMB/share)

XVIII.1

1.41

1.34

(II) Diluted earnings per share (RMB/share)

XVIII.1

1.40

1.31

Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Profit Statement of the Parent Company
January-December 2021
Unit and Currency: RMB
Items

Notes

I. Operating income

2021

2020

XVIII.4

353,798,248.52

7,367,641,013.39

XVIII.4

315,357,106.14

6,067,653,816.35

Taxes and surcharges

1,315,011.31

25,848,932.07

Selling expenses

8,325,070.07

395,396,033.18

126,563,950.19

308,014,697.80

29,294,763.78

301,514,824.27-41,920,112.37

40,412,640.04

7,328,997.57

96,677,861.04

56,558,735.54

60,291,871.74

Less: operating cost

Administration expenses
R&D expenses
Financial expenses
Including: interest expenses
Interest income

180/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Add: other income
Investment income (losses are represented by ‘-’)XVIII.5

45,491,181.80

57,446,351.54

3,918,401,070.56

4,283,510,237.79

187,273.03

363,022.59

Including: investment income of associates andjoint ventures
Derecognition income on financial assets measured
at amortized cost
Gains on net exposure hedges (losses are
represented by ‘-’)Income from change in fair value (losses are
represented by ‘-’)Loss on credit impairment (losses are representedby ‘-’)
Loss on assets impairment (losses are represented-41,019,305.94
by ‘-’)
Gain from disposal of assets (losses are represented
40,509,776.77
by ‘-’)II. Operating profit (losses are represented by ‘-’)3,919,451,761.56

4,529,100,375.66

Add: non-operating income

855,197.78

816,497.38

Less: non-operating expenses

53,850.65

1,544,188.81

3,920,253,108.69

4,528,372,684.23-12,560,593.69

628,301,342.84

3,932,813,702.38

3,900,071,341.39

3,932,813,702.38

3,900,071,341.39

631,333,648.98-21,108,181.60

608,336,353.75-954,819.46

608,336,353.75-954,819.46

III. Total profit (total losses are represented by ‘-’)Less: income tax expenses
IV. Net profit (net losses are represented by ‘-’)(I)

Net profit from continuous operations (netlosses are represented by ‘-’)(II)

Net profit from discontinued operations(net losses are represented by ‘-’)V. Other comprehensive income, net of tax(I)

Other comprehensive income that cannot

be reclassified into the profit or loss
1.

Changes arising from re-measurementof defined benefit plans
2.

Other comprehensive income thatcannot be transferred into profit or loss under equity
method3.

Changes in fair value of investments inother equity instruments
4.

Changes in fair value of credit risks ofthe enterprise

181/366

Haier Smart Home Co., Ltd. 2021 Annual Report(II)

Other comprehensive income to be
22,997,295.23-20,153,362.14

22,997,295.23-20,153,362.14

4,564,147,351.36

3,878,963,159.79

reclassified into the profit or loss
1.

Other comprehensive income that canbe transferred into profit or loss under equity
method2.

Changes in fair value of other debt

investments
3.

Reclassified financial assets that are

credited to other comprehensive income
4.

Credit impairment provision for otherdebt investments
5.

Reserve for cash flow hedging

6.

Exchange differences on translation offinancial statements denominated in foreign
currencies
7. Others
VI. Total comprehensive income
VII. Earnings per share:(I) Basic earnings per share (RMB/share)(II) Diluted earnings per share (RMB/share)

Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Consolidated Cash Flow Statement
January-December 2021
Unit and Currency: RMB
Items

Notes

2021

2020

259,627,755,397.89

207,932,234,800.67

I. Cash flow from operating activities:
Cash received from the sale of goods andrendering services
Net increase in distributor and inter-bank deposits
Net increase in borrowing from the central bank
Net cash increase in borrowing from otherfinancial institutes

182/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Cash received from premiums under original
insurance contract
Net cash received from reinsurance business
Net increase in deposits of policy holders andinvestment
Cash received from interest, fee and commissions
Net increase in cash borrowed
Net increase in cash received from repurchase
operation
Net cash received from customer deposits for
trading in securities
Refunds of taxes

1,759,232,414.94

1,028,615,379.56

1,881,414,522.08

1,538,619,649.49

263,268,402,334.91

210,499,469,829.72

180,877,179,178.59

141,661,861,466.13

Cash paid to and on behalf of employees

24,366,034,563.46

22,098,193,430.86

Cash paid for all types of taxes

10,068,357,244.98

8,022,305,290.30

24,827,190,930.16

21,107,595,810.79

240,138,761,917.19

192,889,955,998.08

23,129,640,417.72

17,609,513,831.64

Cash received from recovery of investments

6,687,038,126.49

7,645,625,690.38

Cash received from return on investments

699,858,754.46

616,767,534.63

289,831,105.17

324,276,028.59

Cash received from other related operating
VII.63
activities
Sub-total of cash inflows from operating
activities
Cash paid on purchase of goods and services
Net increase in loans and advances of distributors
Net increase in deposits in the PBOC and interbankCash paid for compensation payments under
original insurance contact
Net increase in cash lent
Cash paid for interest, bank charges andcommissions
Cash paid for insurance policy dividend

Cash paid to other operation related activities

VII.64Sub-total of cash outflows from operating
activities
Net cash flow from operating activities

VII.68

II. Cash flow from investing activities:

Net cash received from the disposal of fixed
assets, intangible assets and other long-term assets

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Haier Smart Home Co., Ltd. 2021 Annual Report

Net cash received from disposal of subsidiaries
861,212,858.63
and other operating entities
Other cash received from investment activities

187,717,849.30

Sub-total of cash inflows from investing
7,676,727,986.12

9,635,599,961.53

7,372,428,832.38

7,783,249,528.98

8,151,830,046.62

6,816,360,337.69

activities
Cash paid on purchase of fixed assets, intangible
assets and other long-term assets
Cash paid for investments
Net increase in secured loans
Net cash paid on acquisition of subsidiaries and309,348,956.95
other operating entities
Other cash paid on investment activities

VII.65219,292,645.55

317,462.62

15,743,551,524.55

14,909,276,286.24-8,066,823,538.43-5,273,676,324.71

41,513,900.00

1,331,296,569.70

12,051,534,836.66

28,732,212,245.36

1,091,077.43

14,082,437.17

12,094,139,814.09

30,077,591,252.23

19,550,437,489.34

23,508,653,041.48

4,017,661,595.21

4,290,278,773.42

4,167,468,873.11

3,304,582,534.88

27,735,567,957.66

31,103,514,349.78-15,641,428,143.57-1,025,923,097.55-105,423,623.70-636,852,569.96-684,034,887.98

10,673,061,839.42

45,641,535,671.08

34,968,473,831.66

Sub-total of cash outflows from investing
activities
Net cash flow from investing activities
III. Cash flow from financing activities:
Cash received from capital contributions
Including:cash received from capital

contributions by minority shareholders ofsubsidiaries
Cash received from borrowings
Other cash received from financing activities

VII.66Sub-total of cash inflows from financing
activities
Cash paid on repayment of loans
Cash paid on distribution of dividends, profits or
repayment of interest expenses
Including:

dividend and profit paid to minority

shareholders by subsidiaries
Other cash paid to financing activities

VII.67

Sub-total of cash outflows from financing
activities
Net cash flow from financing activities
IV. Effect of fluctuations in exchange rates on cash
and cash equivalents
V. Net increase in cash and cash equivalents
Add: balance of cash and cash equivalents at theVII.69beginning of the period

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Haier Smart Home Co., Ltd. 2021 Annual Report

VI. Balance of cash and cash equivalents at the end
VII.6944,957,500,783.10

45,641,535,671.08

of the period

Person in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Cash Flow Statement of the Parent Company
January-December 2021
Unit and Currency: RMB
Items

2021

2020

5,372,947,747.51

3,603,881,541.71

Refunds of taxes

21,335,747.71

24,537,663.34

Other cash received from operating activities

68,763,057.13

75,205,449.89

5,463,046,552.35

3,703,624,654.94

Cash paid on purchase of goods and services

129,965,401.55

10,101,283,560.88

Cash paid to and on behalf of employees

111,120,434.68

515,906,240.68

Cash paid for all types of taxes

45,674,576.87

235,780,589.82

Other cash paid to operation activities

63,480,813.55

141,423,832.28

350,241,226.65

10,994,394,223.66

5,112,805,325.70-7,290,769,568.72

Cash received from recovery of investments

660,600,000.00

4,234,131,825.64

Cash received from return on investments

251,846,511.15

4,203,101,788.48

Notes

I. Cash flow from operating activities:
Cash received from the sale of goods and rendering ofservices

Sub-total of cash inflows from operating activities

Sub-total of cash outflows from operating activities
Net cash flow from operating activities
II. Cash flow from investing activities:

Net cash received from the disposal of fixed assets,
40,244,472.35
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and otheroperating entities
Other cash received from investment activities
Sub-total of cash inflows from investing activities

952,690,983.50

8,437,233,614.12

39,508,054.66

107,123,777.09

710,121,200.00

2,159,770,900.00

155,218,996.43

217,500,000.00

Cash paid on purchase of fixed assets, intangible assets
and other long-term assets
Cash paid for investments
Net cash paid on acquisition of subsidiaries and otheroperating entities
Other cash paid on investment activities

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Haier Smart Home Co., Ltd. 2021 Annual Report

Sub-total of cash outflows from investing activities
Net cash flow from investing activities

904,848,251.09

2,484,394,677.09

47,842,732.41

5,952,838,937.03

III. Cash flow from financing activities:
Cash received from capital injections
Cash received from borrowings

10,000,000,000.00

Other cash received from financing activities
Sub-total of cash inflows from financing activities
Cash paid on repayment of borrowings

2,877,023,451.15

1,071,070,663.49

2,877,023,451.15

11,071,070,663.49

5,520,000,000.00

4,500,000,000.00

3,463,452,916.42

2,528,459,679.57

3,296,944,621.19

42,665,759.89

12,280,397,537.61

7,071,125,439.46-9,403,374,086.46

3,999,945,224.03-288,145.81

128,500.51-4,243,014,174.16

2,662,143,092.85

8,286,549,909.64

5,624,406,816.79

4,043,535,735.48

8,286,549,909.64

Cash paid on distribution of dividends, profits or
repayment of interest expenses
Other cash paid on financing activities
Sub-total of cash outflows from financing activities
Net cash flow from financing activities
IV. Effect of fluctuations in exchange rates on cash and cash
equivalents
V. Net increase in cash and cash equivalents
Add: balance of cash and cash equivalents at the
beginning of the period
VI. Balance of cash and cash equivalents at the end of theperiodPerson in charge of the Company: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

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Haier Smart Home Co., Ltd. 2021 Annual Report

Consolidated Statement of Changes in Owner’s Equity
January-December 2021
Unit and Currency: RMB
2021

Equity attributable to owners of the Parent Company

Items
Paid-in

Other equity instruments
OthersCapitalreserveLess:
treasury
stock

Other
comprehensive
incomeSurplusreserve

2,364,195,333.79

15,009,027,407.40

28,896,550.65-1,046,216,729.06

3,045,334,539.60

capital (orsharecapital)Preference
sharesPerpetual
bonds

Minority

Total

Generalrisk
provision

shareholders’owners’Undistributed
profits

interests

equity-38,445,132,172.47

1,294,584,557.09

68,111,007,171.64

I. Closingbalance for the

9,027,846,441.00

previous year
Add: changes inaccounting
policies
Error
correction forprior periodBusiness
combination-1,551,800.00

22,654,887.32

under common
control
Others187/366

21,103,087.32

Haier Smart Home Co., Ltd. 2021 Annual Report

II. Opening
balance for the

9,027,846,441.00

2,364,195,333.79

15,007,475,607.40

28,896,550.65-1,046,216,729.06

3,045,334,539.60

38,467,787,059.79

1,294,584,557.09

68,132,110,258.96

370,858,089.00-2,246,177,826.20

7,541,869,961.54

2,395,142,269.05-130,634,970.86

393,281,370.24

9,439,347,269.01-22,550,456.92

12,950,851,166.76

13,067,038,271.85

134,168,681.73

13,068,957,173.55--93,710,059.35

3,177,862,638.28-93,710,059.35-230,127,281.71

current year
III.
Increase/decrease
for the current
period (decrease
is represented by‘-’)(I) Total
comprehensive-132,249,780.03

income(II) Capital
injection and
370,858,089.00-2,246,177,826.20

7,542,034,703.88

2,395,142,269.05

reduction by
owners
1. Ordinary
shares invested-136,417,222.36

by owners
2. Capital
contribution by

403,210,889.00-2,246,177,826.20

8,211,218,327.05

6,368,251,389.85

holders of other188/366

Haier Smart Home Co., Ltd. 2021 Annual Reportequityinstruments
3. Share-based
payment
261,635,166.10

261,635,166.10

included inowners’ equity
4. Others-32,352,800.00-794,401,566.91

2,395,142,269.05-3,221,896,635.96(III) Profit-

393,281,370.24-3,804,025,640.63

393,281,370.24-393,281,370.24-63,252,252.15-3,473,996,522.54

distribution
1. Withdrawal of-

surplus reserves
2. Withdrawal ofgeneral risk-

provision
3. Distribution toowners (or-3,410,744,270.39

shareholders)
4. Others(IV) Internaltransfer ofowner’s equity

189/366-63,252,252.15-3,473,996,522.54

Haier Smart Home Co., Ltd. 2021 Annual Report

1. Transfer ofcapital reserves
into capital (orshare capital)
2. Transfer ofsurplus reserves
into capital (orshare capital)
3. Surplus
reserves used for-

remedying loss
4. Changes indefined benefit
plans carriedforward toretained earnings

5. Othercomprehensive
income carriedforward toretained earnings

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Haier Smart Home Co., Ltd. 2021 Annual Report

6. Others(V) Special
reserve
1. Withdrawal
for the period
2. Utilization forthe period(VI) Others-164,742.34

1,614,809.17

176,334,637.79

243,172.85

178,027,877.47

47,907,134,328.80

1,272,034,100.17

81,082,961,425.72

IV. Closingbalance for the

9,398,704,530.00--

118,017,507.59

22,549,345,568.94

2,424,038,819.70-1,176,851,699.92

3,438,615,909.84-

period2020

Equity attributable to owners of the Parent Company
Minority
Items

Paid-in
capital (orshare capital)

Total owners’

Other equity instruments
Preference
sharesCapitalPerpetual
Othersreserve

431,424,524.07

4,435,890,845.47

bonds

Less:

Other

treasurycomprehensivestock

incomeSurplusreserveshareholders’

General

Undistributed

risk
provision

equityprofits

interests

32,468,121,744.26

17,101,540,502.01

I. Closingbalance for the

6,579,566,627.00

1,317,988,619.66

previous year

191/366

2,655,327,405.46-

64,989,860,267.93

Haier Smart Home Co., Ltd. 2021 Annual Report

Add: changes inaccounting
policies
Error
correction forprior periodBusiness
combination-1,551,800.00

16,119,040.35

14,567,240.35

under common
control
Others-II. Opening
balance for the

6,579,566,627.00

431,424,524.07

4,434,339,045.47

2,448,279,814.00

1,932,770,809.72

10,573,136,561.93

1,317,988,619.66

2,655,327,405.46-

32,484,240,784.61

17,101,540,502.01

65,004,427,508.28-2,364,205,348.72

390,007,134.14-

5,983,546,275.18-15,806,955,944.92

3,127,682,750.68

current year
III.
Increase/decrease
for the current
28,896,550.65

period (decrease
is represented by‘-’)

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Haier Smart Home Co., Ltd. 2021 Annual Report(I) Total
comprehensive-2,537,334,822.50

8,883,129,055.16

2,407,160,053.05

8,752,954,285.71-17,488,531,204.72-2,390,111,095.94-17,488,531,204.72-2,373,144,660.28

income(II) Capital
injection and
2,448,279,814.00

1,932,770,809.72

10,732,277,435.61

28,896,550.65

12,696,003,281.09

28,896,550.65

13,988,600.10

reduction by
owners
1. Ordinary
shares invested

2,448,279,814.00

by owners
2. Capital
contribution byholders of other

1,932,770,809.72-1,936,586,159.16-3,815,349.44

equityinstruments
3. Share-based
payment
included inowners’ equity
4. Others-27,139,686.32

13,988,600.10-13,151,086.22(III) Profit
390,007,134.14

distribution

193/366-2,857,344,619.27-725,584,793.25-3,192,922,278.38

Haier Smart Home Co., Ltd. 2021 Annual Report

1. Withdrawal of
390,007,134.14-390,007,134.14

surplus reserves
2. Withdrawal ofgeneral risk
provision
3. Distribution toowners (or-2,467,337,485.13

shareholders)
4. Others(IV) Internaltransfer of-owner’s equity
1. Transfer ofcapital reserves
into capital (orshare capital)
2. Transfer ofsurplus reserves
into capital (orshare capital)

194/366-725,584,793.25-3,192,922,278.38

Haier Smart Home Co., Ltd. 2021 Annual Report

3. Surplus
reserves used for
remedying loss
4. Changes indefined benefit
plans carriedforward toretained earnings
5. Othercomprehensive
income carriedforward toretained earnings
6. Others(V) Special
reserve
1. Withdrawal
for the period
2. Utilization forthe period(VI) Others-159,140,873.68

159,140,873.68

195/366-42,238,160.71-42,238,160.71

Haier Smart Home Co., Ltd. 2021 Annual Report

IV. Closingbalance for the

9,027,846,441.00

2,364,195,333.79

15,007,475,607.40

28,896,550.65-1,046,216,729.06

3,045,334,539.60-

38,467,787,059.79

1,294,584,557.09

68,132,110,258.96

periodLegal representative of the Company:LiangHaishan

Person in charge of accounting function:Gong Wei

Person in charge of accounting department:YingKe

Statement of Changes in Owners’ Equity of the Parent Company
January-December 2021
Unit and Currency: RMB
2021

Other equity instruments
Items

I. Closing balance for the previous year

Paid-in
capital (orshare capital)

Preference
sharesPerpetual
bonds

Other
OthersCapitalreserveLess:
treasurystockcomprehens

Specialreserve

Surplusreserve

Undistributed
profits

Total owners’
equityive income

9,027,846,441.00

20,408,352,380.95-10,030,704.15

2,440,188,314.15

4,349,961,964.23

36,216,318,396.18

9,027,846,441.00

20,408,352,380.95-10,030,704.15

2,440,188,314.15

4,349,961,964.23

36,216,318,396.18

370,858,089.00

5,393,927,102.18

631,333,648.98

393,281,370.24

118,613,662.29

5,412,843,197.61

3,932,813,702.38

4,564,147,351.36

Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period (decrease
1,495,170,675.08

is represented by ‘-’)(I) Total comprehensive income(II) Capital injection and reduction by owners
1. Ordinary shares invested by owners

631,333,648.98
370,858,089.00

5,393,927,102.18-17,642,864.51

196/366

1,495,170,675.08

4,269,614,516.10-17,642,864.51

Haier Smart Home Co., Ltd. 2021 Annual Report

2. Capital contribution by holders of other equity
403,210,889.00

5,965,040,500.85

6,368,251,389.85

245,199,533.31

245,199,533.31

instruments
3. Share-based payment included in owners’ equity
4. Others-32,352,800.00-798,670,067.47

1,495,170,675.08--2,326,193,542.55(III) Profit distribution

393,281,370.24-3,814,200,040.09-3,420,918,669.85

1. Withdrawal of surplus reserves

393,281,370.24-393,281,370.24--3,420,918,669.85-3,420,918,669.85

2. Distribution to owners (or shareholders)
3. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or sharecapital)2. Transfer of surplus reserves into capital (or sharecapital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward toretained earnings
5. Other comprehensive income carried forward toretained earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period

197/366

Haier Smart Home Co., Ltd. 2021 Annual Report(VI) Others
IV. Closing balance for the period

9,398,704,530.00

25,802,279,483.13

1,495,170,675.08

621,302,944.83-

2,833,469,684.39

4,468,575,626.52

41,629,161,593.79

2020

Other equity instruments

Items

Paid-in
capital (orsharecapital)Preference
sharesPerpetual
bonds

Other

OthersCapitalreserveLess:
treasurystockcomprehensiveSpecialreserve

Surplusreserve

Undistributed
profits

Total owners’ equity

incomeI. Closing balance for the previous year

6,579,566,627.00

7,036,531,178.83

11,077,477.45

2,050,181,180.01

3,307,235,242.11

18,984,591,705.40

6,579,566,627.00

7,036,531,178.83

11,077,477.45

2,050,181,180.01

3,307,235,242.11

18,984,591,705.40

2,448,279,814.00

13,371,821,202.12-21,108,181.60

390,007,134.14

1,042,726,722.12

17,231,726,690.78

3,900,071,341.39

3,878,963,159.79

Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period(decrease is represented by ‘-’)(I) Total comprehensive income-21,108,181.60(II) Capital injection and reduction by owners

2,448,279,814.00

13,371,821,202.12

15,820,101,016.12

1. Ordinary shares invested by owners

2,448,279,814.00

13,371,821,202.12

15,820,101,016.12

2. Capital contribution by holders of other equity
instruments
3. Share-based payment included in owners’ equity

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Haier Smart Home Co., Ltd. 2021 Annual Report

4. Others(III) Profit distribution

390,007,134.14-2,857,344,619.27

1. Withdrawal of surplus reserves

390,007,134.14-390,007,134.14

2. Distribution to owners (or shareholders)-2,467,337,485.13-2,467,337,485.13-2,467,337,485.13

4,349,961,964.23

36,216,318,396.18

3. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or sharecapital)2. Transfer of surplus reserves into capital (or sharecapital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward toretained earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period(VI) Others
IV. Closing balance for the period

9,027,846,441.00

Legal representative of the Company:LiangHaishan

20,408,352,380.95

Person in charge of accounting function:Gong Wei

199/366-10,030,704.15

2,440,188,314.15

Person in charge of accounting department:YingKe

Haier Smart Home Co., Ltd. 2021 Annual Report

III.
1.

GENERAL INFORMATION OF THE COMPANY
Overview of the Company√Applicable□Not Applicable

The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by People’s
Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing Ti Gai [1989]
No. 3 issued on 24 March 1989, based on the reconstruction of the original Qingdao Refrigerator
Factory, a limited company was set up by directional fund raising of RMB150 million. In Marchand September 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2 and No. 9
issued by the pilot leading team of Qingdao joint stock company, the Company was converted froma directional offering company to a public subscription company and issued additional 50 million
shares to the public and listed with trading on Shanghai Stock Exchange in November 1993. In
October 2018, D-shares in issue of the Company were listed on the China Europe International
Exchange AG. In December 2020, H-shares in issue of the Company were listed on the Stock
Exchange of Hong Kong Limited by way of introduction.

The Company’s registered office is located at the Haier Industrial Park of Laoshan District,
Qingdao, Shandong Province, and the headquarters is located at the Haier Industrial Park of
Laoshan District, Qingdao, Shandong Province.

The Company is mainly engaged in research and development, manufacturing and sales of home
appliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliances
and water appliances, and other smart home business, as well as providing smart home packaged
solutions.
The ultimate controlling parent company of the Company is Haier Group Corporation.

These financial statements have been approved for publication by the Board of the Company on
30 March 2022.

2.

Scope of consolidated financial statements√Applicable□Not Applicable

For details of changes in the scope of consolidated financial statements for the current period,
please refer to ‘VIII. Changes in Consolidation Scope’ and ‘IX. Interest in Other Entities’ of thisnote.

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Haier Smart Home Co., Ltd. 2021 Annual Report

IV.
1.

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
Basis of preparation
The financial statements of the Company were prepared on the going concern basis according to
the transactions and matters actually occurred, in accordance with the Accounting Standards forEnterprises — Basic Standards published by the Ministry of Finance, specific accounting standards,
and guidance on application of accounting standards for enterprises, interpretations to accounting
standards for enterprises and other relevant requirements (hereinafter collectively referred to as the‘Accounting Standards for Enterprises’) which issued subsequently, and in combination with thedisclosure provisions of the Rules for the Information Disclosure and Compilation of Companies
Publicly Issuing Securities No. 15: General Provisions for Financial Report (Revised in 2014) of
CSRC as well as the following significant accounting policies and accounting estimation.

The Company has ability to continue its operation for at least 12 months since the end of the reporting
period and there are no significant events affecting its ability to continue as a going concern.

V.

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

Specific accounting policies and accounting estimates:√Applicable□Not Applicable

According to the characteristics of its production and operation, the Company formulated a seriesof specific accounting policies and accounting estimates, including the provisions for impairment
for accounts receivable (Note V.10); the measurement of inventories (Note V.11); the depreciation
and amortization of the investment properties (NoteV.13); the depreciation of fixed assets (NoteV.14), the amortization of intangible assets (Note V.18), the criterion for determining of long-term
assets impairment (Note V.19); and the date of revenue recognition (Note V.25), etc.

1.

Statement of compliance with Accounting Standards for Enterprises
The financial statements prepared by the Company meet the requirements of the AccountingStandards for Enterprises, which accurately and completely reflected information relating to the financial
position, results of operations and changes in shareholders' equity and cash flows of the Company.

2.

Accounting period
The accounting year of the Company is from 1 January each year to 31 December of the same year

in solar calendar.

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Haier Smart Home Co., Ltd. 2021 Annual Report3.

Operating period√Applicable□Not Applicable

The Company takes 12 months as an operating period, which is also the classification basis for theliquidity of its assets and liabilities.

4.

Recording currency

Renminbi is the recording currency of the Company

5.

Accounting methods of business combinations under common control and not under common
control√Applicable□Not Applicable
A business combination is a transaction or event that brings together two or more separate

entities into one reporting entity. Business combinations are classified into businesscombinations under common control and business combinations not under common control.

(1) Business combinations under common control
A business combination under common control is a business combination in which allof the combining entities are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory. For businesscombination under common control, the party that obtains the control over the otherparties on the combination date is the acquirer, and other parties involving in the businesscombination are the transferors. The combination date is the date on which the acquiring
party effectively obtains the control over the party being acquired.

In case the consideration for long-term equity investments formed in businesscombination under common control is paid by ways of cash, transfer of non-cash assets
or assumption of debts, the Company will regard the share of carrying amounts of the net
assets of the transferor in the ultimate controller’s consolidated financial statements
obtained as the initial investment cost of long-term equity investments as at the date ofcombination. For carrying value of net assets of the transferor is negative as at the dateof combination, investment cost of long-term equity investment is calculated as zero. Incase the transferor is controlled by the ultimate controller by the business combination
under non-common control before combination, the initial investment cost of the longterm equity investment of the acquirer includes relevant goodwill. The Company should
adjust the capital reserve (capital premium or share premium) in accordance with thedifferences between initial investment cost of the long-term equity investment and the
cash paid, the non-cash assets transferred and the carrying value of liability assumed; in

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Haier Smart Home Co., Ltd. 2021 Annual Reportcase the balance of the capital reserve (capital premium or share premium) is insufficientfor the elimination, the surplus reserves and undistributed profits shall be used to dilute
such expenses in order. In case the consideration for the combination is paid by issuanceof equity instruments, the aggregate nominal value of shares issued will be deemed as
the share capital. The difference between the initial investment cost of long-term equity
investments and aggregate nominal value of shares issued shall be adjusted to capitalreserve (capital premium or share premium), in case the capital reserve (capital premiumor share premium) is insufficient for the elimination, the surplus reserves andundistributed profits shall be used to dilute such expenses in order.

Intermediary fees (such as audit, legal services and valuation consultancy) and otherrelevant management fees incurred in the business combination by the acquirer are
credited in profit or loss in the period when they occurred. Trading expenses in direct
relation to the issuance of equity instrument as the consideration for the combination is
written down to the capital reserve (share premium), where the capital reserve (sharepremium) is insufficient, and to surplus reserves and undistributed profits in order.
Trading expenses in direct relation to the issuance of debt instrument as the consideration
for the combination is included in the initial recognition amount of the debt instrument.

For business combination under common control realized through several transactions
step by step, in case of a package transaction, all the transactions are accounted as one
transaction that has acquired the control; in case of not a package transaction, in thefinancial statement of parent company the capital reserve (share premium) is adjusted by
the difference between the initial investment cost and the sum of the carrying value ofthe original long-term equity investment and the book value of the new payment
consideration for further acquisition of shares with the share of acquirer’s owner’s equity
on the date of combination in case calculated on the proportion of shareholding on thedate of combination as its initial investment cost; where the capital reserve is insufficient,
the retained earnings will be used to offset such expenses.

In the consolidated financial statements, the long-term equity investment held by the
combining party before the date of acquiring control of the combined parties, and the
profit and loss, the other comprehensive income and changes in the other owners’ equity
recognized during the period between the later of the date of acquisition and the datewhen the combining and the combined parties are under the common control of the same
party and the date of combination, are written down to the retained earnings or profit orloss at the beginning of the comparative reporting period, respectively.

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Haier Smart Home Co., Ltd. 2021 Annual Report(2) Business combinations involving entities not under common control
A business combination not under common control is a business combination in which
all of the combining entities are not ultimately controlled by the same party or parties
both before and after the combination. For business combination not under common
control, the party that obtains the control of the other parties at the combination date is
the acquirer; other parties involving in the business combination are the transferors. The
combination date is the date on which the acquirer effectively obtains control of thetransferors.

In business combination involving entities not under common control, the cost of
combination shall be the sum of the assets paid, obligations incurred or assumed and thefair value of the equity securities issued by the acquirer for obtaining control of thetransferor at the date of acquisition. Intermediary fees (such as audit, legal services andvaluation consultancy) and other relevant management fees incurred by the acquirer forthe purpose of business combination are credited in profit or loss in the period when theyoccurred. Transaction fees for the equity instruments or debt instruments issued by theacquirer as combination consideration is included in the initial recognition amount ofsuch equity instruments or debt instruments. Contingent consideration involved shall berecorded as the combination cost based on its fair value on the acquisition date. Should
any new or further evidence arise within 12 months after the acquisition date and makes
it necessary to adjust the contingent consideration on the acquisition date, the goodwill
arising from the business combination shall be amended accordingly.

The cost of combination and identifiable net assets obtained by the acquirer in abusiness combination are measured at fair value on the acquisition date. Where the costof the combination exceeds the acquirer’s interest in the fair value of the transferor’s
identifiable net assets, the difference is recognized as goodwill; where the cost of
combination is lower than the acquirer’s interest in the fair value of the transferor’s
identifiable net assets, the difference is initially recognized in profit or loss for the current
year after a review of computation for the identifiable assets, liabilities or fair value ofcontingent liabilities and combination cost, and where the combination cost is still lower
than the fair value of the identifiable net assets of the transferor obtained during thecourse of combination, then the difference is recorded in the profit and loss.

In business combination involving entities not under common control that is realizedin phases through multiple exchange transactions, in the Company individual financial
statements, the sum of the book value of the equity investment of the transferor held

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before the date of acquisition and the cost of new investment on the date of acquisition
are recognized as the initial investment cost of such investment.

In the consolidated financial statement, the equity of the transferor held before the dateof acquisition is re-measured at the fair value on the date of acquisition, and the difference
between the fair value and book value is included in current investment income; where
the equity of the transferor held before the date of acquisition involves the othercomprehensive income, such equity and relevant other comprehensive income aretransferred to current investment income on the date of acquisition, other than the othercomprehensive income that cannot be reclassified in the profit or loss.

The fair value on the acquisition date of equity interest in the transferor prior to theacquisition date and the fair value of the considerations paid for the acquisition of the
new equity on the acquisition date are regarded as the combination costs of the Company,
comparing with acquirer’s share of the fair value on the acquisition date of thetransferor’s net identifiable assets on the proportion of the shareholding on the acquisition
date to confirm the goodwill that required to be recognized on the acquisition date or theamount that shall be included in the profit or loss.

6.

Preparation method of consolidated financial statements√Applicable□Not Applicable(1) Scope of consolidated financial statements
The Company incorporated all of its subsidiaries (including the separate entities
controlled by the Company) into the scope of consolidation financial statements,
including the enterprises under the Company’s control, divisible part in the investees andstructured entities.
(2) To unify the accounting policies, balance sheets date and accounting periods of theCompany and subsidiaries
When preparing consolidated financial statements, adjustments are made if
subsidiaries’ accounting policies or accounting periods are different from that of theCompany, in accordance with the Company’s accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balance
sheets of the Company and subsidiaries, which offset the internal transactions incurred
between the Company and subsidiaries and among subsidiaries. The owner’s equity of

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the subsidiaries not attributable to the Company shall be presented as ‘minority equity’
under the owner’s equity item in the consolidated balance sheet.

The long-term equity investment of the Company held by the subsidiaries, deemed astreasury stock of the corporate group as well as the reduction of owners’ equity, shall bepresented as ‘Less: Treasury stock’ under the owner’s equity item in the consolidatedbalance sheet.

(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control, the assets,
liabilities, operating results and cash flow of the subsidiaries are included in the consolidated
financial statements from the beginning of the period in which the combination took place,as if the combination has taken since the ultimate controller began its control. When
preparing the consolidated financial statements, for the subsidiaries acquired from businesscombination under non-common control, separate financial statement will be adjusted on thebasis of their fair values of the identifiable net assets on the date of acquisition.

7.

Classification of joint arrangement and accounting methods of joint operations√Applicable□Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In

accordance with the Company’s rights and obligations under a joint arrangement, theCompany classifies joint arrangements into joint operations and joint ventures.

Joint operations refer to a joint arrangement in which the Company is a party and is entitled
to relevant assets and obligations of this arrangement. The Company recognizes the following
items in relation to its interest in a joint operation, and accounts the same in accordance with
relevant accounting standards for business enterprises:(1) recognize the assets held solely by the Company, and recognize assets held jointly by theCompany in appropriation to the share of the Company;(2) recognize the obligations assumed
solely by the Company, and recognize obligations assumed jointly by the Company inappropriation to the share of the Company;(3) recognize revenue from disposal of joint
operations in appropriation to the share of the Company; (4) recognize revenue from disposalof joint operations in appropriation to the share of the Company; (5) recognize fees solely
occurred by the Company and recognize fees from joint operations in appropriation to theshare of the Company.

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When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets
do not constitute a business, the same below) from joint operations, the Company shall only
recognize the part of profit or lost from this transaction attributable to other parties of joint
operations before these assets are sold to a third party. In case of an impairment loss incurredon these assets which meets the requirements as set out in Accounting Standards for BusinessEnterprises No. 8 — Asset Impairment, the Company shall full recognize the amount of thisloss in relation to its investment in or sale of assets to joint operations or recognize the loss
according to the Company’s share of commitment in relation to the its purchase of assets fromjoint operations.

Joint ventures refer to a joint arrangement during which the Company only is entitled to net
assets of this arrangement. Investment in joint venture is accounted for using the equity method
according to the accounting policies referred to under ‘12 Long-term equity investment’ ofNote V.

8.

Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available
for payment of the Company at any time.

Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and which
are subject to an insignificant risk on change in value.

9.

Foreign currency businesses and translation of foreign currency statements√Applicable□Not Applicable(1) Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functional
currency by applying the spot exchange rate at the transaction date.

Monetary items denominated in foreign currencies are translated into functional currencies
at the rates of exchange ruling at the balance sheet date. All foreign exchange difference arecredited in the profit or loss, except① those arising from the funds denominated in foreign

currency specially borrowed for the establishment of the qualifying assets are treated based on
the principal of capitalization of borrowing costs;② those arising from the other changes inthe balance other than amortized cost of available-for-sale monetary items denominated inforeign currency are recognized in the other comprehensive income.

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Haier Smart Home Co., Ltd. 2021 Annual ReportNon-monetary items in foreign currency measured at historical cost are translated using the
spot exchange rate prevailing on the date when transaction occurred and its functional currency
shall remain unchanged. Non-monetary items denominated in foreign currencies that aremeasured at fair value are translated using the foreign exchange rate at the date
the fair value is determined; the exchange differences between the translated and originalamounts of functional currencies are recognized in the statement of profit or loss or othercomprehensive income as changes in fair value (including changes in exchange rate).

(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint
ventures and associates under the control of the Company are different from that of theCompany, their financial statements denominated in foreign currencies shall be translated toperform accounting and prepare the consolidated financial statements.

The assets and liabilities of the balance sheet are translated using the spot exchange rate at
the balance sheet date; all items except for ‘undistributed profits’ of the owner’s equity aretranslated at the spot exchange rate on the transaction date. The revenue and expenses in theincome statement are translated using the approximate rate of the spot exchange rate on thetransaction date. Exchange differences on translation of financial statements denominated inforeign currencies are presented as the ‘other comprehensive income’ in the owner’s equity ofthe balance sheet.

Foreign currency cash flow is translated using the approximate rate of the spot exchange
rate on the transaction date. The impact of exchange rate changes on cash amount is reflected
separately in the cash flow.

When disposing overseas operations, the translation difference related to the overseas
operation shall be transferred together or as the percentage of disposing the overseas operation
to profit or loss in the current period of disposal.

10. Financial instruments√Applicable□Not Applicable

A financial instrument refers to any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or financial liability isrecognized when the Company becomes a party to the contract of a financial instrument.
(1) Financial assets① Classification and measurement
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According to the business model for managing financial assets and the contractual cash flow
characteristics of financial assets, the Company classifies financial assets into: (1) Financial assets
measured at amortized cost; (2) financial assets measured at fair value through othercomprehensive income; (3) financial assets measured at fair value through profit or loss of thecurrent period.

Financial assets are measured at fair value upon initial recognition. For financial assets
measured at fair value through profit and loss of the current period, related transaction costs are
directly included in profit and loss of the current period; for other types of financial assets, relatedtransaction costs are included in their initial recognized amounts. For the accounts receivable orbills receivable arising from the sale of products or the provision of labor services that do notcontain or consider the significant financing components, the Company shall take the consideration
amount entitled to be received as the initial recognized amount.

a. Debt instrument
The debt instruments held by the Company refer to the tools that are in conformity
with the definition of financial liability from the perspective of the issuing party, which aremeasured in the following three ways, respectively:(a) Measured at amortized cost:
The Company’s business model for managing such financial assets is: With theaim of obtaining contractual cash flow, the contractual cash flow characteristics of suchfinancial assets shall be consistent with the basic lending arrangements, that is, the cash
flow generated on a specific date is only the payment for the principal and the interest
based on the outstanding principal amount. For such financial assets, the Company
recognizes the interest income in accordance with the effective interest method. Suchfinancial assets mainly include cash and cash equivalents, bills receivable and accounts
receivable, other receivables, creditor’s right investment and long-term receivables.
The Company lists the creditor’s rights investments and long-term receivables matured
within one year (including one year) from the balance sheet date as non-current assets
matured within one year; the creditor’s rights investments matured within one year(including one year) when being obtained are listed as other current assets.

(b) Measured at fair value through other comprehensive income:
The Company’s business mode for managing such financial assets is: With theaim of obtaining contractual cash flow and selling the financial assets, the contractual
cash flow characteristics of such financial assets shall be consistent with the basic
lending arrangements. Such financial assets are measured at fair value through other

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Haier Smart Home Co., Ltd. 2021 Annual Reportcomprehensive income, but impairment gains and losses, exchange gains and losses,
and interest income calculated by the effective interest method are included in profit
and loss of the current period. Such financial assets are listed as other creditor’s rights
investments. Other creditor’s rights investments matured within one year (including
one year) from the balance sheet date are listed as non-current assets matured within
one year; other creditor’s rights investments matured within one year (including oneyear) when being obtained are listed as other current assets.

(c) Measured at fair value through profit or loss of the current period:
The Company lists its held debt instruments that are neither measured at amortizedcost nor at fair value through other comprehensive income as financial assets held for
trading measured at fair value through profit or loss of the current period. At the time ofinitial recognition, in order to eliminate or significantly reduce accounting mismatch, theCompany designated some financial assets as financial assets measured at fair value
through profit or loss of the current period. Investments that are matured more than one
year and are expected to be held for more than one year from the balance sheet date arelisted as other non-current financial assets.

b. Equity instruments
The Company lists equity instrument investments that have no control, joint control andsignificant influence on itself as financial assets held for trading measured at fair value throughprofit or loss of the current period; investments that are expected to be held for more than one year
from the balance sheet date are listed as other non-current financial assets.

In addition, the Company designated some non-trading equity instrument investments asfinancial assets measured at fair value through other comprehensive income, which are listed asother equity instrument investments. The relevant dividends and interest income of such financial
assets are included in profit and loss of the current period.

②Impairment
For financial assets measured at amortized cost and debt instrument investments measured atfair value through other comprehensive income, contract assets and financial guarantee contracts,
the Company recognizes the loss provision based on the expected credit losses.

The Company considers reasonable and reliable information about past events, current
conditions and forecasts of future economic conditions, and takes the risk of default as a weight,
and calculates the probability-weighted amount of the present value of the difference between the

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cash flow receivable and the cash flow expected to be received of the contract to confirm theexpected credit losses.

On each balance sheet date, the Company measures the expected credit losses of financial
instruments in different phases. If the credit risk has not increased significantly since the initialrecognition, the financial instruments are in the first phase. The Company measures the loss
provision according to the expected credit losses in the next 12 months; if credit risk has increased
significantly but credit impairment has not yet occurred since the initial recognition, the financial
instruments are in the second phase. The Company measures the loss provision according to the
expected credit losses of the instruments during the entire duration; if credit impairment has
occurred since the initial recognition, the financial instruments are in the third phase. The Company
measures the loss provision according to the expected credit losses of the instruments during theentire duration.

For financial instruments with lower credit risk on the balance sheet date, the Company measuresthe loss provision according to the expected credit losses in the next 12 months, assuming that its
credit risk has not increased significantly since the initial recognition.

For financial instruments in the first phase and second phase and financial instruments withrelatively lower credit risk, the Company calculates interest income based on their book balance
before the deduction of provisions and effective interest rate. For financial instruments in the third
phase, the Company calculates interest income based on their amortized cost after the impairment
provision has been deducted from the book balance and effective interest rate.

For bills receivable, accounts receivable and contractual assets, whether there exist significant
financing components, the Company measures loss provision based on expected credit loss overthe entire duration.

The Company classifies accounts receivable into groups on the basis of shared credit risk
characteristics, and calculates the expected credit losses on groups, the bases of group
determination are as follows:

For each group of bills receivable, the Company applies exposure at default and expected credit
losses rate over the entire duration to calculate the expected credit losses by taking into account thehistorical credit losses experience, the existing conditions and forecast of future economic
conditions.

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For each group of accounts receivable, the Company makes the comparison of expectedcredit losses rates of accounts receivable in overdue days and over the entire duration to calculate
the expected credit losses by taking into account the historical credit losses experience, the existing
conditions and forecast of future economic conditions.

For each group of other accounts receivable, the Company applies exposure at default andexpected credit losses rate within the next 12 months or over the entire duration to calculate theexpected credit losses by taking into account the historical credit losses experience, the existing
conditions and forecast of future economic conditions.

The Company recognizes the loss impairment provision or reversed in profit or loss of thecurrent period. For held debt instruments at fair value through other comprehensive income, theCompany recognizes loss/gain on impairment in profit or loss of the current period, and adjustsother comprehensive income at the same time.

③Derecognition
A financial asset is derecognized when any of the below criteria is met: a. the contractual
rights to receive the cash flow from the financial asset have been transferred; b. the financial asset
has been transferred and the Company transfers substantially all the risks and rewards of ownershipof the financial asset to the transferee; c. the financial asset has been transferred and the Company
has not retained control of the financial asset, although the Company neither transfers nor retains
substantially all the risks and rewards of ownership of the financial asset.

On de-recognition of other equity instruments investment, the difference between the bookbalance and the sum of the consideration received and any cumulative profit or loss of fair valuethat had been recognized in other comprehensive income is recognized in the retained earnings.
On de-recognition of other financial assets, the difference between the book balance and the sumof the consideration received and any cumulative profit or loss of fair value that had beenrecognized in other comprehensive income is recognized in the profit and loss of the current period.

(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at amortized cost andfinancial liabilities at fair value through profit and loss of the current period at initial recognition.

The financial liabilities of the Company are financial liabilities measured at amortized cost,
including bills payable, accounts payable, other payables, borrowings, bonds payable, etc. Suchfinancial liabilities are recognized initially at fair value less transaction costs and subsequently
measured using the effective interest method. Financial liabilities with a maturity of less than one

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year (including one year) are listed as current liabilities: those with maturity of more than one year
but are mature within one year from the balance sheet date (including one year) are listed as noncurrent liabilities due within one year; the rest are presented as non-current liabilities.

When all or partial current obligations of financial liabilities have been discharged, suchfinancial liabilities or the part with obligations discharged are derecognized by the Company. The
difference between the carrying amount of a financial liability de-recognized and the consideration
paid is recognized in the profit and loss of the current period.

(3) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at thequoted price in the active market. The fair value of a financial instrument that is not traded in an
active market is determined by using a valuation technique. During the valuation, the Company
adopts an applicable valuation technique under current conditions and there are enough available
data and other information to support. Those inputs should be consistent with the inputs a market
participant would use when pricing the asset or liability, and the Company should maximize theuse of relevant observable inputs. When related observable inputs can’t be acquired or are notfeasible to be acquired, then use unobservable inputs.

(4) Significant accounting estimates and judgment① Significant accounting estimates and underlying key assumptions
Measurement of expected credit loss (“ECL”)
The Company measures ECL through default risk exposure and the ECL rate, which isdetermined based on the default probability rate and default loss rate. In determining the ECL
rate, the Company uses data such as internal historic credit loss experience and adjusts thehistoric data taking into consideration current conditions and prospective information. Whenconsidering prospective information, indicators adopted by the Company include the risk of
economic downside, expected growth in unemployment rate, and changes in external market
conditions, technical conditions and customer conditions. The Company monitors and reviews
the assumptions relating to ECL computation on a regular basis. There was no significant
change to aforesaid estimation technique and key assumptions during the year.

②Key judgment made in the adoption of accounting policies
a. Classification of financial assets
The determination of the classification of financial assets involves significant judgment,
including analysis of the business model and characteristics of contract cash flow.

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The Company determines the business model for managing financial assets at the level offinancial asset groups. Factors considered include the methods by which the performance offinancial assets are assessed and reported to key management members, risks affecting theperformance of financial assets and how such risks are managed and the method in which related
business management personnel are remunerated.

In assessing whether the contract cash flow of financial assets is consistent with the basic
loan arrangement, the Company exercises the following principal judgments: whether the time
distribution or amount of principal during the period could change as a result of early repayment
or other reasons; whether interest include only the time value of the currency, cost of credit risk
and other basic risk and consideration for profit. For example, whether the early repayment amountreflects only the outstanding principal amount and interests accrued thereon, and reasonable
compensation paid for premature termination of contract.

b. Judgment of significant increase in credit risk
The Company’s principal criteria for the judgment that credit risk has significantly increased isan overdue for more than 30 days, or significant change in one or more of the following indicators:
significant change in the business environment in which the debtor operates, its internal andexternal credit ratings, and its actual or expected operating results, and significant decrease in thevalue of collaterals or the credit rating of the guarantor, among others.

The Company’s principal criteria for the judgment that a credit impairment has occurred is an
overdue for more than 90 days (namely, default has occurred), or fulfillment of one or more of thefollowing conditions: the debtor experiences significant financial difficulties, is undergoing otherdebt restructuring or is likely to go into bankruptcy.

11. Inventory√Applicable□Not Applicable(1) Classification of inventory
Inventory refers to finished products and commodities held by the Company in daily activities for
sale, products in progress, materials and supplies consumed in the process of production or provision oflabour services, including mainly raw materials, turnover materials, materials for commissioned
processing work, packaging materials, products in progress, semi-finished products through in-housemanufacturing, finished products (products in stock) and project construction, among others.
(2) Pricing of dispatch of inventory
An inventory item is accounted for using the weighted average method upon dispatch.
(3) Impairment provision for inventory

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At the balance sheet date, inventory is measured at the lower of cost and net realisable value.
The net realisable value of inventories that can be directly put to sale, including finished products,
commodities and materials for sale is determined as the estimated selling price of such inventory lessestimated selling expenses and related tax expenses; the net realisable value of or inventories held for
production, is determined as the estimated selling price of finished products manufactured less estimatedcost incurred upon completion, estimated selling expenses and related tax expenses; the net realisablevalue of inventory held for the execution of sales contract or labour contract is computed on the basis of
the contract price. If the quantity of inventories held by a company is more than the quantity ordered
under a sales contract, the net realisable value of the inventories in excess is computed on the basis of
the general selling price.
Inventory impairment provision is made on the basis of individual inventory items, provided that
if certain inventories are related to a series of products manufactured and sold in the same region withidentical or similar end uses or purposes and are difficult to measure separately with other items, theircost and net realisable value may be measured on an aggregate basis. Inventories The cost and net
realizable value of inventories in large quantity with low unit prices are measured according to inventory
types.
At the balance sheet date, if the cost of inventory is higher than its net realisable value, impairment
provision is made and charged to current profit or loss. If the factor causing the write-down of inventory
value has been removed, the amount of write-down should be reversed and transferred out of the previous
inventory impairment provision amount. The reversed amount is included in current profit or loss.
(4) Inventory system
The Company adopts the perpetual inventory system.
(5) Amortisation of low-value consumables and packaging materials
The Company adopts one-off amortisation of its low-value consumables and packaging materials.

12. Long-term equity investments√Applicable□Not Applicable

Long-term equity investments hereunder refer long-term equity investments in which the Company
exercises control, joint control or significant influence over the investee. Long-term equity investments
in which the Company does not exercises control, joint control or significant influence over the investee
are classified as other equity instruments investments.

(1)Determination of initial investment cost

① The initial cost of long-term equity investments acquired through business combination

involving parties under common control should be recognised as the share of the carrying valueof the owner’s equity of the acquired party; the initial cost of long-term equity investments

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Haier Smart Home Co., Ltd. 2021 Annual Reportacquired through business combination involving parties not under common control should berecognised as the combination costs determined at the date of acquisition;② For equity investment other than long-term equity investments acquired through businesscombination, the initial investment cost of long-term equity investments acquired with cash payment is
the acquisition price actually paid; the initial investment cost of long-term equity investments acquiredwith the issuance of equity- based securities is represented by the fair value of equity-based securities;
the initial investment cost of long-term equity investments acquired through debt restructuring should bedetermined in accordance with relevant provisions under “Accounting Standards for Business Enterprises
No.12 — Debt Restructuring”; the initial investment cost of long-term equity investment acquired in
exchange for non-monetary assets shall be determined in accordance with relevant provisions of thestandard.

(2) Subsequent measurement and recognition of profit or loss

① Cost method

Long-term equity investments in which the investor is able to exercise control over the investee isaccounted for using the cost method. Under the cost method, the carrying value of long-term equity
investments, other than additional investment or recouped investment, shall remain constant. When profit
distribution or cash dividend is declared, the portion of entitlement is recognised as investment income.

② Equity method
The equity method is used to account for long-term equity investments in associates and joint
ventures. If a part of the equity investment in an associate is held indirectly through risk investment
institutions, mutual funds, trust companies or similar principals (including investment-cum-insurance
funds), the investor may elect to measure such indirectly held investment at fair value through profit orloss and measure the remaining portions using the equity method, in accordance with relevant provisionsof “Accounting Standards for Business Enterprises No.22- Recognition and Measurement of Financial
Instruments”, whether or the aforesaid principals are exercising significant influence over this part of theinvestment.

Under the equity method, the initial investment cost is not adjusted for any excess of the initialinvestment cost over the share of the net fair value of the investee’s identifiable assets. When the initialinvestment cost is less than the share of the fair value of the investment’s identifiable net assets, thedifference is recognised in current profit or loss and the cost of long-term equity investment is adjusted
accordingly.

Under the equity method, share of net profit or losses and other comprehensive income of theinvestee are recognised as investment income and other comprehensive income, respectively, and the216/366

Haier Smart Home Co., Ltd. 2021 Annual Reportcarrying amount of the long-term equity investment is adjusted accordingly. Share of profit or cash
dividend declared by the investee is charged against the carrying value of the long-term equity investment;changes in owners’ equity of the investee other than net profit or loss, other comprehensive income andprofit distribution are adjusted against the carrying value of long-term equity investment and included incapital reserve. Share of net profit or loss of the investee is recognised on the basis of the fair value ofthe identifiable assets of the investee when the investment is acquired and adjusted against the net profitof the investee. If the accounting policy and accounting period of the investee are inconsistent with thoseof the Company, the financial statements of the investee is adjusted to align with the accounting policy
and accounting period of the Company, and investment income and other comprehensive income isrecognised accordingly.

Net losses of the investee is recognised by deducting the carrying value of the long- term equity
investment together with long-term equity that in substance forms part of the net investment in theinvestee until it reaches zero. Moreover, if the Company has incurred obligations to assume additional
losses of the investee, estimated liabilities are recognised according to the obligation expected to be
assumed and charged to current investment loss. If the investee records net profit in future periods, theCompany shall recognise its share of gains after applying such share of gains to make up for theunrecognised share of loss.

(3) Change of accounting method for long-term equity investment① Change from fair value measurement to the equity method: If an equity investment in the investee
not previously affording control, joint control or significant influence and accounted for in accordancewith the standard for recognition and measurement of financial instruments becomes capable of affording
joint control or significant influence over the investee as a result of increased shareholding following
additional investment, the accounting method should be changed to the equity method, and the fair valueof the original equity investment determined according to the standard for recognition and measurementof financial instruments plus the fair value of consideration paid for the acquisition of the new investment
shall be changed the initial investment cost under the equity method.

② Change from fair value measurement or equity method to cost method: if an equity investment
previously held in the investee not previously affording control, joint control or significant influence andaccounted for in accordance with the standard for recognition and measurement of financial instruments,
or a long- term equity investment previously held in associates or joint ventures becomes capable ofaffording control over the investee, it is accounted for long-term equity investment formed throughbusiness combination.

③ Change from equity method to fair value measurement: if a long-term equity investment previously
held in the investee affording joint control or significant influence ceases to afford joint control or

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Haier Smart Home Co., Ltd. 2021 Annual Reportsignificant influence as a result of decrease in shareholding percentage following partial disposal, theremaining equity investment is recognised in accordance with the standard for recognition andmeasurement of financial instruments, and the difference between the fair value at the date of loss ofjoint control or significant influence and the carrying value is included in current profit or loss.

④ Change from cost method to equity method or fair value measurement: when preparing separate
financial statements, if the Company losses control over an investee due to disposal of some equity-based
investment and other reasons, the Company accounts for the remaining equity affording joint control orsignificant influence over an investee as a result of disposal based on the equity method, and theremaining equity will be adjusted as if it is accounted for using the equity method from the date ofacquisition; for the remaining equity not affording joint control or significant influence over an investee
as a result of disposal, it is accounted for in accordance with relevant requirements of AccountingStandards for Business Enterprises No. 22— Recognition and measurement of financial assets, and thedifferences between the fair value and book value on the date when control is lost are included in profit
or loss. When preparing consolidated financial statements, it shall be accounted for in accordance with
relevant requirements of Accounting Standards for Business Enterprises No.33— Consolidated financial
statements.

(4) Bases for determining joint control or significant influence over an investee① Basis for determining joint control over an investee: decisions on activities having a significant
impact on the reward of a certain arrangement must be made with unanimous approval of parties sharing
the joint control, such as the sale and purchase of commodities or labour services, management offinancial assets, asset acquisition and disposal, R&D activities and financing activities.

② Basis for determining significant influence over an investee: holding of capital with more than 20
and up to 50 voting rights is deemed to be having significant influence. Or even though it is less than 20,
fulfillment of one of the following conditions is also deemed as having significant influence:

1) Representation at the board or similar authority of the investee;2) Participation in the decision-making process of the investee;3) Posting of management personnel at the investee;4) Dependence of the investee on the investing party’s technology and technical data;

5) Having important transactions with the investee.

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Haier Smart Home Co., Ltd. 2021 Annual Report(5) Methods for impairment test and impairment provision
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of a long-term equity investment. If there are indications of impairment, an impairment test
should be performed to ascertain its recoverable amount, and an impairment provision equivalent to themargin by which the recoverable amount is lower than the carrying value should be made. Once
recognised, impairment loss will not be reversed in subsequent accounting periods.

The recoverable amount is determined as the higher of net fair value of the long-term equity
investment on disposal and present value of estimated future cash flow.

(6) Disposal of long-term equity investments
Upon disposal of long-term equity investments, the difference between the carrying value andconsideration actually acquired is included in current profit or loss. Upon disposal of long-term equity
investment, the portion previously included in other comprehensive income is accounted for according
to the relevant percentage on the same basis adopted in the direct disposal of the relevant assets or
liabilities by the investee.

13. Investment properties
The Company’s investment properties included leased land-use rights and leased buildings.

The Company’s investment properties is initially measured at cost and subsequently on a cost basis.

Among the Company’s investment properties, leased buildings are subject to depreciation on astraight-line basis in accordance with accounting policies identical with accounting policies for fixed
assets. Leased land-use rights and land-use rights held for disposal after appreciation land- use rights ininvestment properties are amortised using the straight-line method in accordance with accounting
policies identical with fixed asset accounting policies for intangible assets.

At the balance sheet date, the Company inspects whether there are indications of possible
impairment of an investment property. If there are indications of impairment, an impairment test shouldbe performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin
by which the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.

14. Fixed assets(1) Recognition criteria√Applicable□Not Applicable

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Fixed assets refer to tangible assets held for the production of commodities, provision of labour
services, lease or operational management with a useful life of more than one accounting year. Fixed
assets are recognised if all of the following conditions are met:

① Economic benefits relating to such fixed assets are likely to flow into the enterprise;② The cost of the fixed assets can be reliably measured.
(2) Classification and depreciation of fixed assets
The Company’s fixed assets are mainly classified into: buildings, production equipment,
transportation equipment and office equipment; depreciation is conducted on a straight-line basis. The
useful life and estimated net residual value of fixed assets are determined based on the nature and use of
the fixed assets. At the end of the year, the useful life and estimated residual value of and depreciation
method for fixed assets are reviewed, and adjustment is made for any difference with the original
estimated amount. Other than fully depreciated fixed assets which remain in use, the Company measuresdepreciation for all fixed assets.
Type of fixed assets

Useful life

Estimated

Land ownership--

Buildings

8-40 years

0%-5%Machinery equipment

4-20 years

0%-5%Transportation equipment

5-10 years

0%-5%

Office equipment and others

3-10 years

0%-5%

residual(3) Methods for impairment test and impairment provision for fixed assets

At the balance sheet date, the Company inspects whether there are indications of possible
impairment of fixed assets. If there are indications of impairment, an impairment test should be
performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin bywhich the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.

(4) Disposal of fixed assets

Fixed assets are derecognised upon disposal, or when no economic benefits are expected from use
or disposal. The difference between gains on disposal, transfer, retirement or damage of fixed assets, netof their book value and related taxes, are included in profit and loss.

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15. Construction in progress√Applicable□Not Applicable(1) Measurement of construction in progress
The cost of the Company’s construction in progress is recognised at actual construction expenses,
including all necessary construction expenses incurred during the construction, and borrowing costs
capitalized before the work reaches the expected conditions for use and other related costs.

(2) Criteria for and timing of the transfer of construction in progress to fixed assets
The Company’s construction in progress is transferred to fixed assets when the work is completed
and reaches the expected conditions for use. The criteria for judgement of expected conditions for use
should meet one of the following:① The physical construction (including installation) of fixed assets has been completed in full or
substantially completed in full;② Trial production or operation has commenced and the result indicates that the asset can operate
normally or can manufacture compliant products in a consistent manner, or the trial operation indicatesthat it can operate or conduct business normally;③ The amount of fixed asset expenditure of the construction is minimal or almost certain not be further
incurred;④ Fixed assets acquired have reached design or contractual requirements, or are essentially consistent
with design and contractual requirements.

(3) Methods for impairment test and impairment provision for construction in progress
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of construction in progress. If there are indications of impairment, an impairment test shouldbe performed to ascertain its recoverable amount, and an impairment provision equivalent to the margin
by which the recoverable amount is lower than the carrying value should be made. Once recognised,
impairment loss will not be reversed in subsequent accounting periods.

The recoverable amount is determined as the higher of net fair value of the asset less disposal cost
and the present value of estimated future cash flow.

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16. Borrowing costs√Applicable□Not Applicable(1) Principle for recognition of capitalisation of borrowing cost
Borrowing costs incurred by the Company that can be directly attributed to the acquisition or
production of assets qualified for capitalisation are capitalised and included in relevant asset costs; otherborrowing costs are recognised as cost at the amount incurred at the time of incurrence and charged tocurrent profit or loss. Assets qualified for capitalisation refer to fixed assets, investment properties andinventory that require a considerably long period of acquisition or production activities to reach the
expected conditions for use or sale.

(2) Computation of capitalised amounts
Capitalisation period: from the point of time at which the capitalisation of borrowing costs begins
to the point of time at which capitalisation ceases. The period of suspension of capitalisation of borrowing
costs is not included.

Period of suspension of capitalisation: In case of abnormal disruption during the acquisition or
production process for a consecutive period of more than 3 months, the capitalisation period forborrowing costs should be suspended.

Computation of capitalised amount:① For specific borrowings, the amount is determined asinterest expense incurred for the period in respect of the specific borrowing less interest income received
through the deposit of unutilised borrowed funds or investment gains received through provisional
investments;② For general borrowings utilised, the amount is determined as the weighted averageamount of the portion of cumulative asset expenses in excess of the asset expense of specific borrowings
multiplied by the capitalisation rate for the general borrowings utilised, where the capitalisation rate is
the weighted average interest rate of general borrowings;③ where there is a discount or premium inthe borrowings, the amortisation of such discount or premium for each accounting period is determinedaccording to the effective interest rate and the interest amount for each period is adjusted accordingly.

17. Right-of-use assets√Applicable□Not Applicable

Right-of-use assets are the rights of the Company as lessee to use leased assets during the lease
period. At the inception date of the lease, the Company as lessee should recognise right- of-use assets
and lease liabilities in respect of the lease, other than short-term leases and leases of low-value assets

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Haier Smart Home Co., Ltd. 2021 Annual Reportwhich are subject to simplified treatment. The inception date of the lease means the date on which theprovision of the leased asset by the lessor for use by the lessee is started.

The Company’s right-of-use assets are initially measured at cost, which includes:(1) The amount of lease liability under initial measurement;(2) The lease payment made on or before the inception date of the lease term, less the relevant amountof lease incentive received if such incentive is available;(3) The initial direct cost of the Company as lessee;(4) Estimated cost to be incurred for the demolishing and removal of leased assets, restoration of venues
where the leased assets are located or restoration of the leased assets to the conditions agreed under thelease terms.

The Company charges depreciation in respect of right-of-use assets in accordance with
“Accounting Standards for Business Enterprises No. 4 — Fixed Assets”. Where the acquisition ofownership of the leased asset at the end of the lease period can be reasonably ascertained by the Company,
depreciation is charged over the remaining useful life of the leased assets. If the acquisition of ownershipof the leased asset at the end of the lease period cannot be reasonably ascertained, depreciation is charged
during the lease term or the remaining useful life of the leased assets, whichever is shorter.

The Company shall determine whether impairment of right-of-use assets has occurred and accountfor impairment loss which has been identified in accordance with the provisions of “AccountingStandards for Business Enterprises No. 8 — Asset Impairment”.

When the Company remeasures lease liabilities in accordance with the accounting standard, thecarrying value of the right-of-use assets is adjusted accordingly. If the carrying value of the right- of-use
assets is reduced to zero but the lease liabilities still require further adjustment, the remaining amount ischarged to current profit or loss.

Where lease modification results in a reduced scope of lease or shortened lease term, the carrying
value of the right-of-use assets is reduced accordingly, and the relevant gain or loss resulting from thepartial or full termination of the lease is included in current profit or loss. For other lease modifications
resulting in the remeasurement of lease liabilities, the carrying value of the right-of-use assets is adjusted
accordingly.

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18. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical form and are possessedor controlled by the Company.

(1) Measurement of intangible assets

Intangible assets of the Company are initially recognized at costs. The actual costs of purchased
intangible assets include the consideration and relevant expenses actually paid. For intangible assets
contributed by investors, relevant actual costs are determined based on the value agreed in the investment
contract or agreement. But if the value agreed in the investment contract or agreement is not a fair value,
the actual costs should be determined based on the fair value. The cost of a self-developed intangible
asset is the total expenditure incurred in bringing the asset to its intended use.

Subsequent measurement of intangible assets of the Company:①Intangible assets with finite

useful lives are amortized on a straight-line basis; their useful lives and amortization methods arereviewed at the end of each year, and adjusted accordingly if there is any variance with the previous
estimates;②Intangible assets with indefinite useful lives are not amortized and their useful lives arereviewed at the end of each year. If there is an objective evidence that the useful life of an intangible
asset is finite, an estimation should be made on the useful life and the intangible asset should be amortizedusing the straight- line method.

(2) Criterion of determining indefinite useful life

The useful life of an intangible asset is indefinite if the period in which the asset brings economic
benefits for the Company is unforeseeable, or the useful life could not be ascertained.

Criterion of determining indefinite useful lives:① the period is derived from contractual rights

or other legal rights and there are no explicit years of use stipulated in the contract or laws and regulations;② the period in which the intangible assets generate benefits for the Company still could not be
estimated after considering the industrial practice or relevant expert opinions.

At the end of each year, the useful lives of the intangible assets with indefinite useful lives arereviewed. The assessment is primarily reviewed by relevant departments that use the intangible assets,using the down-to-top approach, to determine if there are changes to the determination basis of indefinite
useful lives.

(3) Methods of test and provision for impairment of intangible assets

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At the balance sheet date, the Company reviews intangible assets to check whether there is any
sign of impairment. If yes, the recoverable amount is recognized through an impairment test andprovision for impairment is made based on the difference between the carrying value and the recoverable
amount.

Impairment loss will not be reversed in subsequent accounting periods once provision is made forit. The recoverable amount of intangible assets should be based on the higher of the net fair value of theassets less the disposal expense and the present value of estimated future cash flow of the assets.

(4) Basis for research and development phases for internal research and development project and basis
for capitalization of expenditure incurred in development stage

As for an internal research and development project, expenditure incurred in the research stage isrecognized in the profit or loss as incurred. Expenses incurred in the development stage are recognized①the technical feasibility of completing
the intangible assets so that they will be available for use or for sale; ②the intention to complete theintangible assets for use or for sale; ③ how the intangible assets will generate economic benefits,
as intangible assets if all of the following conditions are met:

including there is evidence that the products produced by the intangible assets has a market or theintangible assets themselves have a market; if the intangible assets are for internal use, there is evidence④ the availability of adequate technical, financial andother resources to complete the development and gain the ability to use or sell the intangible assets; ⑤that there exists usage for the intangible assets;

the capability to reliably measure the expenditures attributable to the development stage of the intangible
assets.

Specific standards for distinguishing research stage and development stage of an internal researchand development project: research stage refers to the stage of planned investigation and search for
obtaining new technology and knowledge, which features planning and exploration; before commercial
production or other uses, the stage of applying the research achievements and other knowledge in a planor design to produce new or substantially improved materials, equipment and products is regarded as
development stage, which features pertinence and is very likely to form results.

All the expenditures incurred on research and development which cannot be distinguished between
research stage and development stage are recognized in the profit or loss.

19. Impairment of long-term assets√Applicable □Not Applicable

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Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment if there is
any sign of impairment at the balance sheet date. If the result of the impairment test indicates that therecoverable amount of the assets is less than the carrying amount, a provision for impairment will bemade based on the difference and will be recorded in impairment loss. The recoverable amount is thehigher of the net fair value of the assets less the disposal expense and the present value of estimatedfuture cash flow of the assets. Provision for asset impairment is calculated and recognized on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of the asset group to which the asset belongs is determined. An asset group is thesmallest asset portfolio that can generate cash inflows independently.

Goodwill is tested for impairment at least at the end of each year.

In terms of impairment test of the goodwill of the Company, the carrying amount of the goodwill,arising from business combination, shall be allocated to the related asset groups on reasonable basis since
the acquisition date, or to the related asset group portfolios if it is difficult to be allocated to the related
asset groups. When the carrying amount of the goodwill is allocated to the related asset groups or asset
group portfolios, it shall be allocated in the proportion of the fair value of each asset group or asset group
portfolio against the total fair value of related asset groups or asset group portfolios. If it is difficult tomeasure the fair value reliably, it shall be allocated in the proportion of the carrying amount of each asset
group or asset group portfolio against the total carrying amount of related asset groups or asset group
portfolios. When impairment test is made to the related asset groups or asset group portfolios including
goodwill, if there is a sign that the related asset groups or asset group portfolios are prone to impair, theCompany shall first conduct impairment test on the asset groups or asset group portfolios excluding
goodwill, calculate the recoverable amount and recognize the corresponding impairment loss bycomparing with its carrying amount. The Company shall then conduct impairment test on the asset groups
or asset group portfolios including goodwill and compare the carrying amount (including the carrying
amount of allocated goodwill) of related asset groups or asset group portfolios with the recoverable
amount thereof. Impairment loss on goodwill shall be recognized when the recoverable amount of therelated asset groups or asset group portfolios is lower than the carrying amount thereof.

Once the above impairment loss on assets is recognized, it shall not be reversed in any subsequentaccounting period.

20. Long-term prepaid expense√Applicable□Not Applicable

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Long-term prepaid expenses of the Company are expenditures which have incurred but the benefit
period of which is more than one year (exclusive). They are amortized by installments over the benefit
period based on each item under the expenses. If items under the long-term pre-paid expenses are nolonger beneficial to the subsequent accounting periods, the amortized value of such unamortized items
is then fully transferred to the profit or loss.

21. Staff’s remuneration

Staff’s remunerations are all forms of compensation and other relevant expenditure given by theCompany in exchange for services rendered by employees, including short-term remunerations, postemployment benefits, termination benefits and other long-term benefits.

Short-term remunerations include short-term salaries, bonus, allowance, subsidies, employee
welfare, housing provident fund, labor union fee and education fee, medical insurance premiums, workrelated injury insurance premiums, maternity insurance premiums, short-term compensated leave, shortterm profit-sharing plans, etc. During the accounting period when employees render services, short-term
remunerations that actually incurred shall be recognized as liabilities and credited into the current profit
or loss or the cost of relevant assets on an accrual basis by the benefit objects.

Post-employment benefits mainly include the basic pension insurance, enterprise annuity, etc., In
accordance with the risks and obligations undertaken by the Company, the post- employment benefits
are classified as defined contribution plans and defined benefit plans. Defined contribution plans: theCompany shall recognize the sinking funds paid on the balance sheet date to individual entities inexchange for services from employees in the accounting period as liabilities, and shall credit such funds
into the profit or loss or the cost of relevant assets in accordance with the benefit objects. Defined benefit
plans: the cost for providing benefits is determined using the expected cumulative welfare unit method,with actuarial valuations being carried out by independent actuary at the interim and annual balance sheet
date. The costs for staff’s remunerations incurred by the defined benefit plans of the Group are
categorized as follows: (1) service cost, including current period service cost, past service cost andsettlement profit or loss. Specifically, current period service cost means the increase of the present valueof defined benefit obligations resulted from the current period services offered by employees. Past service
cost means the increase or decrease of the present value of defined benefit obligations resulted from therevision of the defined benefit plans related to the prior period services offered by employees; (2) interest
expenses of defined benefit plans; (3) changes caused by the remeasurement of liabilities for defined
benefit plans. Unless other accounting standards require or permit the credit of the costs for employee
welfare into the cost of assets, the Company will credit (1) and (2) above into the profit or loss; andrecognize (3) above as other comprehensive income and will not transfer it back to the profit or loss insubsequent accounting periods.

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Termination benefits: The indemnity proposal provided by the Company for employees for the
purpose of terminating labor relations with employees before expiry of the labor contracts or encouraging
employees to accept downsizing voluntarily. When the following conditions are met, the Company willrecognize and credit into the profit or loss the accrued liabilities arising from the indemnity as a result ofterminating labor relations with the employees: the Company has made a formal plan for termination oflabor relations or has made an offer for voluntary redundancy which will be implemented immediately;
and the Company could not unilaterally withdraw the plan for termination of labor relations or the
redundancy offer. Early retirement plans for employees will be handled in the principle the same as thetermination benefits above. The Company will credit the salaries and social insurance premiums to be
paid to the early retirees during the period from the date of early retirement to the normal retirement dateto the profit or loss when recognition conditions for estimated liabilities are met.

22. Lease liabilities√Applicable □Not Applicable

On the commencement date of the lease term, the Company as the lessee shall recognize the rightof-use assets and lease liabilities for the lease. The Company’s lease liabilities are initially measured at
the present value of the lease payment that has not been paid on the commencement date of the lease
term.

When calculating the present value of the lease payment, the Company adopts interest rate implicit
in lease as discount rate; if it is impossible to determine the interest rate implicit in lease, the incremental
borrowing rate of the Company (i.e. lessee) shall be adopted as the discount rate.

The interest rate implicit in lease refers to the interest rate that makes the sum of the present valueof the lessor’s lease receivable amount and the present value of the unguaranteed residual value equal to
the sum of the fair value of the leased asset and the initial direct cost of the lessor. The lessee’s
incremental borrowing rate refers to the interest rate that the lessee is required to pay for borrowing funds
under similar mortgage conditions in a similar economic environment in order to obtain assets close to
the value of the right-of-use assets during a similar period.

The Company shall calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate, and include it into current profit or loss or assets cost.

After the commencement date of the lease term, where the assessment results of the renewal of theoption, the termination of the lease option and the purchase option have changed, the Company re-228/366

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determines the lease payment and re-measures the lease liabilities in accordance with the present valueof the lease payment after changes and the revised discount rate. After the commencement date of thelease term, in the event that the future lease payment changes due to a change in expected payment undera guaranteed remaining value or changes in an index or rate used in determining the lease payments, theCompany shall re-measure lease liabilities based on present value of the lease payment after changes. In
such cases, the discount rate adopted by the Company shall remain unchanged; however, if the change
in lease payment results from a change in floating interest rates, the Company shall use a revised discountrate.

23. Estimated liability√Applicable □Not Applicable(1) Criterion for determining of estimated liability

If an obligation in relation to contingencies such as external guarantees, discounting of commercial
acceptance bills, pending litigation or arbitration and product quality assurance is the present obligationof the Company and the performance of such obligation is likely to lead to an outflow of economic
interests and its amount can be reliably measured, such obligation shall be recognized as an estimatedliability.

(2) Measurement of estimated liability

The estimated liability shall be initially measured according to the best estimate of the necessary
expenses for the performance of the present obligation. If there is a continuous range for the necessary
expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be
determined according to the middle estimate within the range.; if there are two or more items involved,
the best estimate should be determined according to all possible outcomes and relevant probabilities.

At the balance sheet date, the carrying value of estimated liabilities should be reviewed. If there is
objective evidence that the carrying value could not reflect in the current best estimate, the carrying value
shall be adjusted to reflect the current best estimate.

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For equity-settled share-based payment transaction in return for services from employees, it shallbe measured at the fair value of equity instruments granted to the employees at the grant date. For thepayment of such fair value that may only be exercised if services are fulfilled during the vesting period
or the specified performance condition is achieved, the amount of such fair value shall, based on the best
estimate of the number of exercisable equity instruments during the vesting period, be recognized in
relevant costs or expenses in straight-line method with the increase in the capital reserve accordingly.

The cash-settled share-based payment shall be measured at the fair value of liability assumed by
the Company, which is determined based on the shares or other equity instruments. For the cash-settled
share-based payment that may be exercised immediately after the grant, the fair value of the liability
assumed by the Company shall, on the date of the grant, be recognized in relevant costs or expenses andthe liabilities shall be increased accordingly. For cash-settled share-based payment that may be exercised
if services are fulfilled during the vesting period or the specified performance condition is achieved, oneach balance sheet date within the vesting period, the services acquired in the current period shall, basedon the best estimate of exercise, be recognized in relevant costs or expenses at the fair value of the liability
assumed by the Company, and the liabilities shall be adjusted correspondingly.

At each balanced sheet date and the settlement date prior to the settlement of liabilities, the fair value ofthe liability is re-measured with its change consolidated in profit/loss.

When there is changes to the Company’s share-based payment plans, if the modification increases
the fair value of the equity instruments granted, corresponding recognition of service increase inaccordance with the increase in the fair value of the equity instruments; if the modification increases thenumber of equity instruments granted, the increase in fair value of the equity instruments is recognized
as a corresponding increase in service achieved. Increase in the fair value of equity instruments refer tothe difference between the fair values of the equity instrument on the modified date before or after themodification. If the Company modifies the vesting conditions in such manner conductive to theemployees, including the shortening of the vesting period, change or cancellation of the performance
conditions (rather than market conditions), the Company shall consider the modified vesting conditions
upon the disposal of vesting conditions. If the modification reduces the total fair value of shares paid or
the Company uses other methods not conductive to employees to modify the terms and conditions ofshare- based payment plans, it will continue to be accounted for the services obtained in the accounting
treatment, as if the change had not occurred, unless the Company cancelled some or all of the equity
instruments granted.

During the vesting period, if the Company cancel equity instruments granted which will be treatedas accelerating the exercise of rights and any amount to be charged over the remaining vesting period
should be recognized immediately in the profit or loss, while at the same time recognize the capital

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met in the vesting period, the Company will treat it as cancellation of equity instruments granted.

25. Revenue√Applicable □Not Applicable

Revenue is the total inflow of economic benefits formed by the Company and its subsidiaries
during day-to-day operations which might lead to increase of shareholders’ equity and be irrelevant tocapital invested by shareholders.

The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,
recognized revenue when the client obtains the control right of relevant goods or services.

Where the contract includes two or more performance obligations, during the starting date of thecontract, the Company and its subsidiaries allocate transaction price to various single performanceobligation in accordance with the relevant proportion of separate selling price of goods or services
promised by various single performance obligation, and measure revenue in accordance with transaction
price allocated to various single performance obligation.

Transaction price is the amount of consideration that the Company and its subsidiaries are expected
to be entitled to collect due to transfer of goods and services transferred to the client, excluding theamount collected for any third party. The transaction price recognized by the Company and its
subsidiaries does not exceed the amount of recognized revenue when relevant uncertainties are
eliminated and might not incur material carrying back. The amount that is expected to be returned to theclient is taken as liability of returned goods and is not recorded in transaction price.

When one of the following conditions is met, the Company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfilling performanceobligations at a certain time point:① The client simultaneously obtains and consumes economic benefits as the Company and its
subsidiaries perform the contract;② The client is able to control goods under construction during the process of performance of theCompany and its subsidiaries;

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Haier Smart Home Co., Ltd. 2021 Annual Report③ Goods produced by the Company and its subsidiaries during the process of performance have noalternative use, and the Company and its subsidiaries are entitled to collect the amount for the cumulativecompleted and performed portion to date during the entire contractual period.

For the performance obligations performed during a certain time horizon, the Company and its
subsidiaries recognize revenue in accordance with the schedule of performance during such time horizon.
When the schedule of performance can’t be reasonably recognized, where the costs that have been
incurred by the Company and its subsidiaries are estimated to be compensated, revenue shall berecognized in accordance with the amount of costs that has been incurred until the schedule ofperformance can be reasonably confirmed.

For performance obligations performed at a certain time point, the Company and its subsidiaries
recognize revenue at the time point when the client obtains the control right of relevant goods or services.
When judging whether the client has obtained control right over goods or services, the Company and its
subsidiaries will consider the following signs:① The Company and its subsidiaries enjoy the right of instant collection over such goods and services;② The Company and its subsidiaries have transferred the material objects of such goods to the client;③ The Company and its subsidiaries have transferred statutory ownership right of the goods or majorrisks and rewards of the ownership to the client;⑤ The client has accepted such goods or service.
The right that the Company and its subsidiaries are entitled to collect the consideration for havingtransferred goods or services to the client (and such right depends on other factors other than time lapse)
is presented as contractual asset, and contractual asset is provisioned impairment on the basis of expectedcredit losses. The right owned by and unconditionally collected from the client by the Company and its
subsidiaries (only depend on time lapse) shall be presented as accounts receivable. Obligations that theCompany and its subsidiaries have collected or shall collect consideration from the client and shalltransfer goods or services to the client are presented as contractual obligations.

Specific accounting policies relating to major activities that the Company and its subsidiaries
obtain revenue are described as follows:(1) Sale of goods

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Generally, contracts for sale of goods between the Company and its clients only include
performance obligation of transferring the whole machine of home appliance. Generally, on the basis oftaking into account the following factors comprehensively, the Company recognizes the revenue at thetime point of transfer of control right of goods: the right of instant collection for obtaining goods, transfer
of major risks and rewards on ownership of goods, transfer of statutory ownership of goods, transfer ofassets of material objects of goods, the client’s acceptance of such goods.

(2) Construction contract income

Construction contract between the Company and the client generally includes performanceobligations of construction and installation of commercial air-conditioner and smart home, because theclient is able to control goods under construction during the Company’s performance process, theCompany takes them as performance obligations performed during a certain time horizon, and recognizes
revenue in accordance with the schedule of performance, and it is an exemption when the schedule ofperformance can’t be reasonably confirmed. The Company confirms the schedule of performance ofservices provided in accordance with the input method. When the schedule of performance can’t bereasonably confirmed, where the costs that have been incurred by the Company are estimated to becompensated, the revenue will be recognized in accordance with the amount of costs that has been
incurred until the schedule of performance can be reasonably confirmed.

(3) Warranty obligations

According to contractual agreement and regulations of laws, the Company provides quality
assurance for goods sold and project constructed. For guarantee-type quality assurance in order to ensure
the client that goods sold comply with existing standards, the Company conducts accounting treatment
in accordance with estimated liabilities. For service-type quality assurance in order to ensure the clientthat we also provide a separate service other than that the goods sold comply with existing standards, theCompany takes it as a separate performance obligation, and allocates partial transaction price to servicetype quality assurance in accordance with the relevant proportion of separate selling price of goods andservice-type quality assurance, and recognizes revenue when the client obtains control right over services.
When assessing whether quality assurance provides a separate service other than ensuring the client thatthe goods sold comply with existing standards, the Company shall consider factors such as whether such

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Haier Smart Home Co., Ltd. 2021 Annual Reportquality assurance is under statutory requirements or industrial practices, the term of quality assurance
and the nature of the Company’s commitment to perform the tasks.

26. Government grants√Applicable □Not Applicable(1) Types of government grants

Government grants refer to the gratuitous monetary assets or non-monetary assets obtained by theCompany from the government, excluding the capital invested by the government as an owner. The
government grants are mainly divided into asset-related government grants and revenue-related
government grants.

(2) Accounting treatment of government grants

Asset-related government grants shall be recognized as deferred income in current profit or loss onan even basis over the useful life of relevant assets; government grants measured at nominal amount shallbe recognized directly in current profit or loss. Revenue-related government grants shall be treated asfollows:①those used to compensate relevant expenses or losses to be incurred by the enterprise in

subsequent periods are recognized as deferred income and recorded in current profit or loss when such
expenses are recognized;②those used to compensate relevant expenses or losses that have been incurredby the enterprise are recorded directly in current profit or loss.

(3) Basis for determination of asset-related government grant and revenue-related government grant

If the government grant received by the Company is used for purchase, construction or other projectthat forms a long-term asset, it is recognized as asset-related government grant.

If the government grant received by the Company is not asset-related, it is recognized as revenuerelated government grant.

Government grant received without clear objective shall be classified as asset-related government
grant or revenue-related government grant by:

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Haier Smart Home Co., Ltd. 2021 Annual Report① Government grant subject to a certain project shall be separated according to the proportion of
expenditure budget and capitalization budget, and the proportion shall be reviewed and modified if
necessary on each balance sheet date;② Government grant shall be categorized as revenue-related if its usage is described in general statement
and no specific project is specified in the relevant government document.

(4) Amortization method and determination of amortization period of deferred revenue related togovernment grants

Asset-related government grant received by the Company is recognized as deferred revenue and isevenly amortized to the profit or loss in the current period over the estimated useful life of the relevant
asset starting from the date when the asset is available for use.

(5) Recognition of government grants

Government grant measured at the amounts receivable is recognized at the end of the period when
there is clear evidence that the relevant conditions set out in the financial subsidy policies and regulations
are fulfilled and the receipt of such financial subsidy is assured.

Other government grants other than those measured at the account receivable is recognized upon
actual receipt of such subsidies.

27. Deferred tax assets/deferred tax liabilities√Applicable □Not Applicable

Deferred income tax assets and deferred income tax liabilities of the Company are recognized:(1) Based on the difference between the carrying amount and the tax base amount of an asset or a liability(items not recognized as assets and liabilities but their tax base is ascertained by the tax laws andregulations, the tax base is the difference), deferred income tax asset or deferred income tax liability is

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Haier Smart Home Co., Ltd. 2021 Annual Report

calculated using the applicable tax rate prevailing at the expected time of recovering the asset ordischarging the liability.

(2) Deferred income tax asset is recognized to the extent that there is enough taxable income for the
deduction of the deductible temporary difference. At the balance sheet date, if there is sufficient evidence
that there will be enough taxable income in the future for the deduction of the deductible temporary
difference, the deferred income tax asset not recognized in previous accounting period is recognized. If
there is no sufficient evidence that there will be enough taxable income in the future for the deduction of
the deferred income tax asset, the carrying value of the deferred income tax asset is reduced.

(3) Deferred income tax liability is recognized for taxable temporary difference arising from investments
in subsidiaries and associated companies, unless the Company could control the time of reversal of thetemporary differences and the temporary differences would not be probably reversed in the foreseeable
future. For deductible temporary differences arising from investments in subsidiaries and associatedcompanies, deferred income tax asset is recognized if the temporary difference will be very probably
reversed in the foreseeable future and it is highly probable that taxable income will be available in the
future to deduct the deductible temporary difference.

(4) No deferred income tax liability is recognized for a temporary difference arising from the initialrecognition of goodwill. No deferred income tax asset or deferred income tax liability is recognized forthe temporary differences resulting from the initial recognition of assets or liabilities due to a transaction
other than a business combination, which affects neither accounting profit nor taxable income (ordeductible loss). At the balance sheet date, deferred income tax assets and deferred income tax liabilities
are measured at the tax rates that apply to the period when the asset is expected to be recovered or theliability is expected to be settled.

28. Other significant accounting policies and accounting estimates√Applicable □Not Applicable(1) Asset securitisation

The Company has securitised certain receivables to entrust the assets to specific-purpose entities
which would issue such securities to investors. As asset service provider, the Company is responsible for236/366

Haier Smart Home Co., Ltd. 2021 Annual Report

the provision of maintenance and daily management of the assets, formulation of annual asset disposalplans, formulation and implementation of asset disposal plan, signing of relevant asset disposal
agreements and preparation asset service reports on a regular basis.

In applying the accounting policy for the securitisation of financial assets, the Company has
considered the extent to which the risk and reward of the assets have been transferred to other entities,
and the extent to which the Company exercises control over the entity:① When the Company has transferred substantially all risk and reward relating to the ownership of afinancial asset, such financial asset is derecognised;② When the Company retains substantially all risk and reward relating to the ownership of a financial
asset, the Company continues to recognise such financial asset;③ If the Company neither transfers nor retains substantially all risk and reward relating to the ownershipof a financial asset, the Company considers whether it has control over the financial asset. If the Company
does not retain control, the financial asset is derecognised, and the rights and obligations arising from orretained the transfer are recognised as assets and liabilities, respectively. If the Company retains control,
the financial asset is recognised according to the extent of continued involvement in the financial assets.

(2) Hedge accounting

Hedge refers, in respect of the risk exposure arising from the company’s management of specificrisks such as foreign exchange risks, interest rate risks, price risks and credit risks, to risk management
activity of designating financial instruments as hedging instruments such that the change in the fair value
or cash flow of the hedging instruments can be expected to set off the change in the fair value or cash
flow of the hedged item.

The hedged item refers to an item designated for hedge against the risk of change in fair value orcash flow that can be reliably measured.

Hedging instruments are financial instruments designated for hedge, the change in fair value orcash flow of which is expected to set off the change in the fair value or cash flow of the hedged item.

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Haier Smart Home Co., Ltd. 2021 Annual Report

The Company assesses whether the hedge relationship fulfills the requirement for hedge
effectiveness at the inception date of the hedge and continuously in subsequent periods. The effectivenessof hedge refers to the extent to which the change in the fair value or cash flow of the hedging instruments
can offset the change in the fair value or cash flow of the hedged item caused by the risk against which
the hedge is made. The change in the fair value or cash flow of a hedging instrument in excess or shortfallof the change in the fair value or cash flow of the hedging instruments can offset the change in the fairvalue or cash flow of the hedged item represents the ineffective portion of the hedge.

(3) Significant accounting estimates

In the course of applying accounting policies, the Company is required to make judgements,
estimations and assumptions on the carrying values of statement items that cannot be accurately measured
owing to uncertainties to which operating activities are subject. Such judgements, estimations andassumptions are made based on the past experience of the management and taking into consideration ofother relevant factors. Such judgements, estimations and assumptions affect the reported amounts ofincome, expenses, assets and liabilities and the disclosure of contingent liabilities as at the balance sheet
date. However, the actual outcome resulting from the uncertainty of such estimates could be different
from the current estimates of the management, thereby resulting in significant adjustments to the carrying
value of the future assets or liabilities affected. The Company regularly reviews such judgements,
estimations and assumptions on a going concern basis. If the change in accounting estimates affects only
the current period in which the change occurs, the affected amount is recognized for the period in which
the change occurs; if both the current period and future periods are affected, the affected amount isrecognised for the current period and the future periods.

At the balance sheet date, important aspects in which the Company is required to make judgements,
estimations and assumptions on the amount of items on the financial statements are as follows:① Estimated liabilities
The Company estimates and makes provision for product warranty and estimated contract loss
according to contract terms, existing knowledge and historical experience. When such contingencies
have given rise to a present obligation, and the performance of such present obligation is likely to result

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Haier Smart Home Co., Ltd. 2021 Annual Reportin the outflow of economic benefit from the Company, the Company recognises estimated liabilities forthe contingencies based on the best estimates of expenses required for the performance of relevant present
obligations. The recognition and measurement of estimated liabilities is dependent to a large extent on
management judgement. In the course of judgement, the Company is required to assess factors such as
risks, uncertainties and the time value of currency relating to such contingencies. In particular, theCompany recognises estimated liabilities in respect of after-sales undertaking to customers for return andreplacement, maintenance and installation of goods sold. The recognition of estimated liabilities hastaken into account the maintenance experience and data of the Company for recent years, although pastexperience in maintenance may not reflect maintenance in the future. Any increase or decrease in thisprovision might affect the profit or loss of future years.

② Provision for ECL
The Company measures ECL through default risk exposure and the ECL rate, which is determinedbased on the default probability rate and default loss rate. In determining the ECL rate, the Company
uses data such as internal historic credit loss experience and adjusts the historic data taking into
consideration current conditions and prospective information. When considering prospective information,
indicators adopted by the Company include the risk of economic downside, expected growth inunemployment rate, and changes in external market conditions, technical conditions and customer
conditions. The Company monitors and reviews the assumptions relating to ECL computation on aregular basis. There was no significant change to aforesaid estimation technique and key assumptions
during the year.

③ Impairment provisions for inventory
The Company makes impairment provisions for inventory of which cost is higher than net
realisable value and obsolete and slow-moving inventory based on the lower of cost and net realisablevalue according to its inventory accounting policy. The impairment of inventory to its net realisable value
is based on assessment of the sellability of inventory and its net realisable value. The authentication of
inventory impairment requires the management to obtain conclusive evidence and make judgment andestimates taking into consideration factors such as the purpose of inventory and post-balance sheet date
events. Any difference between the actual outcome and the previous estimate will affect the carrying

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Haier Smart Home Co., Ltd. 2021 Annual Reportvalue of inventory and the charge or reversal of impairment provisions for inventory during the period
in which the estimates are modified.

④ Fair value of financial instruments
For financial instruments without an active trading market, the Company determines its fair value
using valuation techniques. Such valuation techniques include discounted cash flow model analysis andothers. During the assessment, the Company is required to make estimates on future cashflow, credit risk,
market volatility rate and relevance and select an appropriate discount rate. Such relevant assumptions
are subject to uncertainty, and any change will affect the fair value of financial instruments.

⑤ Impairment of other equity instrument investments
The Company’s determination of impairment for other equity instrument investments is largely
dependent on the management’s judgment and assumptions to determine whether impairment should berecognised. In the course of making judgments and assumptions, the Company is required to assess theextent and duration of the fair value of the investment being lower than cost, as well as the financial
conditions and short-term business prospects of the investee, including industry conditions, technologicalrevolution, credit rating, default rate and counterparty risks.

⑥ Impairment provision for long-term assets
At the balance sheet date, the Company assesses whether there are indications of possible
impairment of non-current assets other than financial assets. In addition to the annual impairment test,
intangible assets with indefinite useful life are also tested for impairment when there are indications of
the same. Impairment tests on non- current assets other than financial assets are conducted when there
are indications that its carrying value may not be recoverable. An impairment has occurred when the
carrying value of an asset or asset group is higher than the recoverable amount (the higher of net fairvalue less disposal cost and the present value of estimated future cash flow). The net fair value lessdisposal cost is determined with reference to the agreed selling price of similar assets in a fair transaction
or observable market prices less incremental costs attributable directly to the disposal of such asset. In
estimating the present value of future cashflow, significant judgement is required to be made in respectof the production volume and selling price of the asset or (asset group), relevant operating cost and240/366

Haier Smart Home Co., Ltd. 2021 Annual Reportdiscount rate for the computation of present value. The Company takes into consideration all available
relevant information when making estimates on the recoverable amount, including forecasts on
production volume, selling price and relevant operating costs based on reasonable and justifiableassumptions. The Company conducts goodwill impairment tests at least annually. This requires estimateson the present value of future cashflow of asset group or portfolio of asset groups to which goodwill has
been allocated. When making estimates on the present value of future cashflow, the Company is required
to make estimates on cashflow generated from future asset group or portfolio of asset groups, and at thesame time select an appropriate discount rate to determine the present value of future cashflow.

⑦ Depreciation and amortisation
Depreciation and amortisation of investment properties, fixed assets and intangible assets is
charged on a straight-line basis over their useful life after taking their residual values into account. The
Company reviews the useful life on a regular basis to determine the amount of depreciation andamortisation charge to be allocated to each reporting period. The useful life is determined based on pastexperience relating to similar assets taking into consideration expected technological upgrades. If there
are significant changes in previous estimates, the depreciation and amortisation charge for future periods
will be adjusted.

⑧ Deferred income tax assets
The Company recognises deferred income tax assets in respect of all unutilised tax losses, to theextent that it is probable that sufficient taxable profit will be available to offset the loss. This requires theexercise of significant judgement by the Company’s management to estimate the timing and amount of
future taxable profit, taking into account its tax planning strategy, to determine the amount of deferredincome tax assets to be recognised.

⑨ Income tax
In the Company’s usual operating activities, the final tax treatment and computation of certaintransactions are subject to uncertainty. Whether certain items can be presented on a pretax basis is subject
to approval of the competent taxation authority. If the final confirmed outcome of such taxation matters241/366

Haier Smart Home Co., Ltd. 2021 Annual Report

is different from the amount of the initial estimates, such difference will affect the current income tax
and deferred income tax for the period of final confirmation.

⑩ Provision for sales rebate
The Company and its subsidiaries adopt a sales rebate policy for sales agent customers. Based on
relevant provisions of the sales agreements, vetting of specific transactions, market conditions, channel
inventory level and past experience with reference to the status of completion of agreed appraisal
indicators by sales agent customers, the Company and its subsidiaries makes estimates on and provision
for sales rebate on a regular basis. The provision of sales rebate involves judgment and estimation by the
management. In the event of any material change in previous estimates, the aforesaid difference willaffect the sales rebate for the period for which the estimates are changed.

29. Changes in significant accounting policies and accounting estimates(1) Changes in significant accounting policies□Applicable√Not Applicable(2) Changes in significant accounting estimates□Applicable√Not Applicable

VI. TAXATION
1.

Main tax categories and rates
Tax types

Basis of taxation

Tax rate

Taxable revenue from sales of goods andValue-added tax

6%, 9%, 13%rendering services

City maintenance andCirculation tax payable

7%

Circulation tax payable

1%, 2%, 3%

construction tax(Local) education
surcharge

EIT

Statutory tax rate or preferential rates as

Taxable income

follows2.

Preferential tax√Applicable □Not Applicable242/366

Haier Smart Home Co., Ltd. 2021 Annual ReportCompanies subjected to preferential tax and preferential tax rate:

243/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Tax
Company

rate
Preferential tax(%)
entitled to the preferential taxation policies
Qingdao Haier Refrigerator Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Special Refrigerator Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Dishwasher Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Special Freezer Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Intelligent Home Appliance Technology Co., Ltd. 15.00

as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Electronics Holding Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Wuhan Haier Freezer Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Hefei Haier Refrigerator Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Hefei Haier Air-conditioning Co., Limited

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Zhengzhou Haier Air-conditioning Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Shenyang Haier Refrigerator Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Air-Conditioner Electronics Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Meier Plastic Powder Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Hai Gao Design and Manufacture Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Hairi High Tech Model Co., Ltd

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited

15.00
as a hi-tech enterprise244/366

Haier Smart Home Co., Ltd. 2021 Annual Report

entitled to the preferential taxation policies
15.00

Qingdao Haier Intelligent Technology Development Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Foshan Haier Freezer Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Central Air Conditioning Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Air Conditioner Gen Corp., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Haier U+smart Intelligent Technology (Beijing) Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Beijing Zero Micro Technology Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Hefei Haier Washing Machine Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Washing Machine Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Jiaonan Haier Washing Machine Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Foshan Shunde Haier Electric Co., Ltd.

as a hi-tech enterprise

天津海

Tianjin Haier Cleaning Electrical Appliances Co., Ltd. (尔洗涤电器有限公司)

entitled to the preferential taxation policies
15.00
as a hi-tech enterprise

Qingdao Economic and Technological Development Zone Haier

entitled to the preferential taxation policies
15.00
as a hi-tech enterprise

Water Heater Co., Ltd.

entitled to the preferential taxation policies
15.00

Wuhan Haier Water Heater Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Foshan Drum Washing Machine Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Strauss Water Equipment Co., Ltd.

as a hi-tech enterprise青岛乐

Qingdao Lejia Haier Smart Living Appliances Co., Ltd. (家海尔智慧生活电器有限公司)

entitled to the preferential taxation policies
15.00
as a hi-tech enterprise245/366

Haier Smart Home Co., Ltd. 2021 Annual Report

entitled to the preferential taxation policies
15.00

Qingdao Haier New Energy Electric Appliance Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Washing Appliance Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Ririshun Lexin Cloud Technology Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Hefei Haier Drum Washing Machine Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Electronic Plastic Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Wei Xi Intelligent Technology Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Special Refrigerating Appliance Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Haier Smart Kitchen Appliance Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Hefei Haier Air Conditioning Electronics Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Beijing Lingli Technology Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Hairuijiejing Electronics Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Shanghai Haier Medical Technology Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Qingdao Yunshang Yuyi IOT Technology Co., Ltd.

as a hi-tech enterpriseHaier (Shanghai) Home Appliance Research and Development

entitled to the preferential taxation policies
15.00
as a hi-tech enterpriseCenter Co., Ltd.

entitled to the preferential taxation policies
Haier (Shenzhen) R&D Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Ririshun Lejia IOT Technology Co., Ltd.

15.00
as a hi-tech enterprise
entitled to the preferential taxation policies

Qingdao Haier Smart Electrical Equipment Limited

15.00
as a hi-tech enterprise

246/366

Haier Smart Home Co., Ltd. 2021 Annual Report

entitled to the preferential taxation policies
15.00

Laiyang Haier Smart Kitchen Appliance Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Guangdong Heilong Intelligent Technology Co. Ltd]

as a hi-tech enterprise
entitled to the preferential taxation policies
15.00

Dalian Haier Refrigerator Co., Ltd.

as a hi-tech enterprise
entitled to the preferential taxation policies

Chongqing Haier Electronics Sales Co., Ltd. and some Western

15.00
companies

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Xin Ririshun Electric Sales Co., Ltd. and some

15.00
Western companies

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Air-conditioning Co., Ltd.

15.00

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Refrigeration Appliance Co., Ltd.

15.00

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Guizhou Haier Electronics Co., Ltd.

15.00

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Washing Machine Co., Ltd

15.00

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Water Heater Co., Ltd

15.00

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Drum Washing Machine Co., Ltd

15.00

under the Western Development initiative of
the PRC
entitled to the preferential policies as a

Haier Smart Home (Qingdao) Network Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

Haier Smart Home (Qingdao) Network Operations Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

Qingdao Haixiangxue Human Resources Co., Ltd.

2.50
small/micro enterprise247/366

Haier Smart Home Co., Ltd. 2021 Annual Report

entitled to the preferential policies as a
2.50

Qingdao Three-Winged Bird Technology Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a
2.50

Haier Smart Home Technology (Hebei Xiong’an) Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a
2.50

Qingdao Haier Quality Testing Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a
2.50

Qingdao Haiyongcheng Certification Service Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a
2.50

Qingdao Haishuzhi Enterprise Consultancy Service Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a
2.50

Qingdao Haier Innovative Technology Co., Ltd.

small/micro enterprise
entitled to the preferential policies as a

Qingdao Ririshun Lexin Information Technology Service Co.,

20.00
small/micro enterpriseLtd.

entitled to the preferential policies as a
Dalian Free Trade Zone Haier Refrigerator Trading Co., Ltd.

5.00
small/micro enterprise
entitled to the preferential policies as a

Qingdao Haimeihui Management Consulting Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

GE Appliance (Shanghai) Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

Shanghai Haier Zhongzhi Fang Chuang Ke Management Co., Ltd. 2.50

small/micro enterprise
entitled to the preferential policies as a
Tianjin Internet of Clothing Ecosystem Technology Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

Dalian Haier Precise Manufacturing Co,. Ltd.

5.00
small/micro enterprise
entitled to the preferential policies as a

Qingdao Haizhi Yunlan Technology Co., Ltd.

2.50
small/micro enterprise
entitled to the preferential policies as a

Qingdao Haixianghui Technology Co., Ltd.

2.50
small/micro enterprise
entitled to half deduction the preferential

Qingdao Haier Technology Co., Ltd.

10.00
taxation policies as a key software enterprise248/366

Haier Smart Home Co., Ltd. 2021 Annual ReportVII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIAL
STATEMENTS
Unless otherwise specified, the following closing balances represent the amount as at 31 December
2021 and opening balances represent the amount as at 31 December 2020; amount for the period
represents the amount from 1 January to 31 December 2021 and amount for the previous period
represents the amount from 1 January to 31 December 2020.

1. Monetary funds√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Cash on hand

3,085,964.28

2,257,666.98

Cash in bank

44,771,536,799.60

45,312,481,450.19

Other cash balances

1,082,547,511.52

1,152,993,342.34

Total

45,857,170,275.40

46,467,732,459.51

8,966,246,518.74

10,409,047,820.91

Include: —total amount of overseas
deposits
Other explanation

The investment fund in the closing balance of other monetary funds was RMB51,432,853.25, depositon third party payment platforms was RMB131,445,165.97 and the security deposit was
RMB755,120,965.62, the frozen fund was RMB7,619,238.06, and other restricted fund was
RMB136,929,288.62.

2.

Financial assets held for trading
Items

Closing balance

Opening balance

Short-term wealth management
2,168,622,090.00

1,862,036,322.21

330,557,610.82

83,949,637.05

Investment funds

150,516,274.37

113,759,845.57

Forward foreign exchange contracts

136,379,553.90

105,446,693.00

2,786,075,529.09

2,165,192,497.83

products
Investments in other equity
instruments

Total

3.

Derivative financial assets

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Haier Smart Home Co., Ltd. 2021 Annual Report

Items

Closing balance

Opening balance

Forward foreign exchange contracts

72,822,190.59

52,194,232.55

Forward commodity contracts

6,997,783.42

25,644,774.08

79,819,974.01

77,839,006.63

Total

4.

Bills receivable(1) Bills receivable presented by types
Items

Closing balanceBank acceptance notes

13,053,809,505.49

3,091,631,183.91

368,076,810.80

11,056,075,267.03

13,421,886,316.29

14,147,706,450.94

67,095,248.00

11,356,696.60

13,354,791,068.29

14,136,349,754.34

Commercially acceptance notes
Balance of bills receivable
Allowance for bad debts
Bills receivable, net

Opening balance(2) Changes in allowance for bad debts of bills receivable in the current period:□Applicable √Not Applicable

Increase for the

Decrease for thecurrent period

current period
Write-

Opening

Provision forbalancethe current

Other

periodmovement

Items

off/
Reversal

Closing balance

other
move
ment

Allowance for bad debts

11,356,696.60

61,256,000.00

5,517,448.60

67,095,248.00

Total

11,356,696.60

61,256,000.00

5,517,448.60

67,095,248.00

The bills receivable pledged by the Company at the end of the period was RMB12,526,757,275.50.

5.

Accounts receivable①Accounts receivable are disclosed by aging as follow:

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Haier Smart Home Co., Ltd. 2021 Annual Report

Aging

Closing balanceWithin one year

Opening balance

14,782,898,997.57

15,866,291,515.38

1–2 years

375,662,087.58

229,618,450.58

2–3 years

78,861,353.76

91,669,887.74

Over 3 years

135,768,657.33

184,125,877.54

15,373,191,096.24

16,371,705,731.24

742,172,698.81

441,681,444.57

14,631,018,397.43

15,930,024,286.67

Balance of accounts receivable
Allowance for bad debts
Accounts receivable, net② By method of provision of allowance for bad debts
Closing balance
Percentage
Categories

Allowance forofbad debts

provision

Book balance

Carrying value(%)

Account receivables subject toprovision for bad debts on a

381,406,983.17

320,303,932.13

83.98

61,103,051.04

14,991,784,113.07

421,868,766.68

2.81

14,569,915,346.39

15,373,191,096.24

742,172,698.81

4.83

14,631,018,397.43

separate basis
Account receivables subject toprovision for bad debts on acollective basis
Total

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Haier Smart Home Co., Ltd. 2021 Annual Report(continued)
Opening balance
Categories

Allowance for bad

Percentage ofdebts

provision (%)

Book balance

Carrying value

Account receivables subject toprovision for bad debts on a

1,737,051.69

1,737,051.69

100.0016,369,968,679.55

439,944,392.88

2.69

15,930,024,286.67

16,371,705,731.24

441,681,444.57

2.70

15,930,024,286.67

separate basis
Account receivables subject toprovision for bad debts on acollective basis
Total③Account receivables subject to provision for bad debts on a collective basis as at the end of theperiod√Applicable □Not Applicable

Percentage ofAllowance for bad
Items

Book balance

provision
debts
(%)

14,560,959,317.86

312,565,470.27

2.15

1-2 years

223,861,765.61

9,396,866.15

4.20

2-3 years

75,991,817.89

23,388,497.43

30.78

Over 3 years

130,971,211.71

76,517,932.83

58.42

14,991,784,113.07

421,868,766.68

2.81

Within 1 year

Total

④Changes in allowance for bad debts of accounts receivable in the current period:
Items

Opening balance

Increase for the

Decrease for thecurrent period

current period
Closing balance

Provision for the
Othercurrent period

Write-off/ other
Reversal

movement

movement

Allowance
for baddebts

441,681,444.57

408,834,958.95

46,625,275.84

61,718,428.87

742,172,698.81⑤ The aggregate amount of the top 5 account receivables as at the end of the period was
RMB3,856,035,612.12, accounting for 25.08% of the book balance of account receivables.

⑥ Actual write-off of accounts receivable in the current period

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Haier Smart Home Co., Ltd. 2021 Annual Report

The amount of accounts receivable actually written off in the current period is RMB32,949,945.78
and there is no important bad debt write-off of accounts receivable.

⑦ The company’s accounts receivable that were terminated due to the transfer of financial

assets in the current period
In the current period, the amount of accounts receivable that the company terminated due to thetransfer of financial assets was RMB4,127,671,197.04 and the transfer method was outright sale
factoring/asset securitization.

⑧ Restricted accounts receivable in the current period

The amount of accounts receivable restricted at the end of the period is RMB1,913,582,226.30.

6. Prepayments(1) Prepayments are presented by aging:
Aging

Closing balance

Opening balanceWithin one year

816,905,110.58

698,370,175.05

1–2 years

22,367,994.84

30,590,250.54

2–3 years

9,728,842.63

4,580,733.23

Over 3 years

8,231,174.95

32,280,992.88

857,233,123.00

765,822,151.70

Total(2) The total amount of the top 5 in the prepayments at the end of the period is
RMB174,076,576.41, which accounts for 20.31% of the prepayment balance.

7.

Other receivables

Presented by item:√Applicable □Not Applicable
Unit and Currency: RMB
Items
Interest receivable

Closing balance
294,379,438.82

Dividend receivable

Opening balance
322,473,254.91
4,915,409.42

Other receivables

1,660,702,724.43

1,390,303,134.99

Total

1,955,082,163.25

1,717,691,799.32

Interest receivable√Applicable □Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

Unit and Currency: RMB
ItemClosing balance

Opening balanceWithin one year

231,011,687.28

230,234,039.92

1–2 years

47,983,727.86

82,575,210.18

2–3 years

15,384,023.68

8,925,141.80

Over 3 years

738,863.01
Total

294,379,438.82

322,473,254.91

Dividend receivable√Applicable□Not Applicable
Unit and Currency: RMB

Item (or investee)

Closing balanceWithin one year

Opening balance
4,915,409.42

1–2 years
2–3 years
Over 3 years
Total

4,915,409.42

Other receivables①Other receivables are disclosed by aging as follows:
Aging

Within one year

Closing balance

Opening balance

1,273,332,768.49

931,793,427.44

1–2 years

109,677,138.52

417,514,929.49

2–3 years

355,219,038.13

61,251,809.96

Over 3 years

113,113,998.61

75,401,513.32

1,851,342,943.75

1,485,961,680.21

190,640,219.32

95,658,545.22

1,660,702,724.43

1,390,303,134.99

Balance of other receivables
Allowance for bad debts
Other receivables, net

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Haier Smart Home Co., Ltd. 2021 Annual Report② The total amount of the top 5 other receivables at the end of the period is
RMB588,207,363.50, which accounts for 31.77% of the book balance of other receivables.

③Provision of allowance for bad debts
Stage 1

Stage 2

Stage 3

Expected credit losses forLifetime expected

Lifetime expected credit

the coming 12 months

credit losses (notlosses (credit-impaired)

Total

Allowance for bad debts
credit-impaired)
31 December 2020

12,652,199.27

83,006,345.95

95,658,545.22

Provision for the current period

106,691,852.67

Reversal for the current period

751,371.76

3,588,800.00

4,340,171.76

6,570,006.81

800,000.00

7,370,006.81

112,022,673.37

78,617,545.95

190,640,219.32

106,691,852.67

Write-off and others for thecurrent period
31 December 2021

④ Changes in allowance for bad debt provision of other receivables in the current period
Increase for the

Decrease for thecurrent period

current period

Opening
Items

Closing balance

Provision for thebalanceOthercurrent period

Write-off/ other
Reversal

movement

movement

Allowance for
95,658,545.22
bad debts

106,691,852.67

4,340,171.76

7,370,006.81

190,640,219.32⑤ Other receivables written off during the period
The amount of other receivables actually written off in the current period is RMB5,202,064.68 andno significant other receivables are written off for bad debts.

⑥ Other receivables mainly include deposits, quality guarantees, employee loans, tax refunds,

and advance payments, etc.
8. Inventories(1) Category of inventories
Closing Balance
Items

Book value

Opening Balance

Impairment

Impairment
Book value balancebalance

Provision
117,428,681.85

Provision

Raw materials

5,160,836,755.15

2,785,611,125.08

115,958,355.70

Work in progress

115,676,026.77

Finished goods

35,952,553,480.95

1,248,466,540.71

27,613,569,305.90

1,173,115,549.14

Total

41,229,066,262.87

1,365,895,222.56

30,736,047,309.59

1,289,073,904.84

336,866,878.61

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Haier Smart Home Co., Ltd. 2021 Annual Report(2) Impairment provision of inventories
Increase for the

Decrease for thecurrent period

current period

Opening

Provision forbalancethe current

Items

Other

Write-off/movemeReversal

Closing balance

otherperiodnt
Raw materials

movement

115,958,355.70

26,258,008.75

7,348,287.53

17,439,395.07

117,428,681.85

1,173,115,549.14

1,044,919,101.14

6,170,082.33

963,398,027.24

1,248,466,540.71

1,289,073,904.84

1,071,177,109.89

13,518,369.86

980,837,422.31

1,365,895,222.56

Work in progress
Finished goods
Total

9. Contractual assets(1) Details
Closing Balance
Items

Opening Balance

Impairment

Impairment

Book value balanceBook value balance
Provision

Relating to construction service contract
Total

Provision

304,434,294.70

263,412,927.58

304,434,294.70

263,412,927.58

10. Other current assets(1) Details
Closing Balance
Items

Opening Balance

Impairment

Impairment

Book value balanceBook value balance
Provision

Bank deposit for wealth management products
Deductible taxes

316,590,333.42

554,131,037.76

3,273,993,417.28

2,439,951,209.94

2,907,303.98

418,107,603.27

242,502,616.01

Returns cost receivables

585,140,752.69

Others

71,809,601.50
4,247,534,104.89

Total

Provision

328,552,987.70

118,077,350.40
328,552,987.70

3,530,267,201.37

245,409,919.99(2) Impairment Provision

Items

Increase for the

Decrease for the

Closing

current period

current periodbalance

Opening balance

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Haier Smart Home Co., Ltd. 2021 Annual Report

Provision for the

Write-off/Othercurrent period

Reversalothermovement
movement
Deductible input tax
Returns cost receivables
Total

2,907,303.98

2,905,520.72

242,502,616.01

328,552,987.70

245,409,919.99

328,552,987.70

2,905,520.72

1,783.26
242,502,616.01

328,552,987.70

242,504,399.27

328,552,987.70

11. Long-term equity investments√Applicable □Not Applicable
Increase/decrease for the current period

Adjustment in
Investees

Opening balance

Investment profit
Investment

Declaration ofother

Other changes

comprehensive

in equity

recognized underincreasecash dividends orequity method

profits
incomeAssociate：

Haier Group Finance Co., Ltd.

6,526,237,270.67

631,292,558.96-16,151,956.03-218,400,000.00

Bank of Qingdao Co., Ltd.

2,463,096,567.92

199,119,144.81

58,051,969.41-66,019,246.02

Wolong Electric (Jinan) Motor Co., Ltd.

143,847,870.70

23,879,508.29

297,154,935.85

20,073,071.70

385,797,036.73

90,366,894.80-82,565,558.94

654,581,961.84

94,920,014.89-66,600,000.00

415,298,165.93

18,829,952.52-25,074,310.40

Qingdao Haier Multimedia Co., Ltd

328,987,205.07-51,884,641.19

Qingdao Haier Moulds Co., Ltd.

259,696,084.44

9,462,450.10

1,491,024.72-1,225,918.45-15,890,000.00

Qingdao Hegang New Material-4,734,751.34

Technology Co., Ltd.
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited
Partnership)
Mitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration
Equipment Co., Ltd.

Hefei Feier Smart Technology Co.,Ltd.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Anhui Kunhe Smart Technology Co.,
3,000,000.00-1,122,425.86

84,150,000.00-2,051,152.25

Ltd.
Zhejiang Futeng Fluid Technology
Co., Ltd.
Beijing Mr. Hi Network Technology
7,507,759.75
Company Limited
Beijing Xiaobei Technology Co., Ltd.

2,687,341.82

Beijing ASU Tech Co., Ltd.

32,365,969.45-21,104,770.00

Shenzhen Genyuan Environmental
6,914,487.73
Protection Technology Co., Ltd.
Qingdao Haimu Investment Management

2,349,240.51

116,059.19

47,870,696.66

11,553,965.78

Co., Ltd.
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership)
Guangzhou Heying Investment
288,209,197.58-2,650,839.24

235,219.53

Partnership (Limited Partnership)
Qingdao Home Wow Cloud Network
2,629,009.63-28,959.13

33,010,000.00-1,693,481.32

928,444,178.47

43,756,309.41

1,687,262,142.67

79,556,926.19

RRS (Shanghai) Investment Co., Ltd.

3,066,931,168.49

144,648,956.72

Haier Best Water Technology Co., Ltd.

33,455,159.59

Technology Co., Ltd.
Qingdao Ririshun Service Co., Ltd.
Bingji (Shanghai) Corporate Management
Co., Ltd.
Youjin (Shanghai) Corporate
Management Co., Ltd.

52,627,176.00-6,296,778.20

Huizhixiangshun Equity Investment Fund

(Qingdao) Partnership (Limited

120,000,000.00-991,032.97

2,100,000.00-16,517.22

Partnership)
Qingdao Ririshun Huizhi Investment Co.,Ltd.

258/366

4,268,500.56

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Xinshenghui Technology
10,000,000.00-35,226.48

Co., Ltd.
Meiling Candy Washing Machine Co.,
22,558,307.10

193,924.97

Ltd.
EuropaltersItaliaS.r.l.

9,361,965.48

Konan Electronic Co., Ltd.

77,561,552.87

1,597,435.48-9,620,675.74

HNR Company (Private) Limited

92,141,887.27

31,133,180.32-9,219,748.62

HPZ LIMITED

66,827,745.66

9,235,751.42-4,794,448.11

HaierRayaElectricS.A.E

10,741,234.10

1,257,900.00-264,600.00-1,430,626.70

CONTROLADORAMABES.A.deC.V
3,667,310,241.31

590,464,695.25-66,623,131.23

19,002,595.66-6,770,031.76-1,913,665.77

1,905,784,458.80-50,271,656.09

15,816,589.94-74,984,722.17

15,350,339.16-549,798,437.53.
MiddleEast Air conditioning
Company,Limited
Total

21,694,068,040.19

157,746,202.24

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Haier Smart Home Co., Ltd. 2021 Annual Report(Continued)
Increase/decrease for the
Impairment
current period
Provision
Investees

The disposal

Closing balance
ClosingOtherof theBalancemovement
investment
Associate：

Haier Group Finance Co., Ltd.

185,731,501.78

Bank of Qingdao Co., Ltd.

7,108,709,375.38
2,654,248,436.12

Wolong Electric (Jinan) Motor Co., Ltd.

151,837,378.99

Qingdao Hegang New Material Technology Co., Ltd.

312,493,256.21

Qingdao Haier SAIF Smart Home Industry Investment
393,598,372.59
Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Air682,901,976.73
conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration Equipment Co., Ltd.

409,053,808.05-21,000,000.00

Qingdao Haier Multimedia Co., Ltd

277,102,563.88-88,300,000.00

Qingdao Haier Moulds Co., Ltd.

269,158,534.54

Hefei Feier Smart Technology Co., Ltd.

265,106.27

Anhui Kunhe Smart Technology Co., Ltd.

1,877,574.14

Zhejiang Futeng Fluid Technology Co., Ltd.

82,098,847.75

Beijing Mr. Hi Network Technology Company Limited

7,507,759.75-7,507,759.75

Beijing Xiaobei Technology Co., Ltd.

2,687,341.82-2,687,341.82

Beijing ASU Tech Co., Ltd.

15,529,700.01

Shenzhen Genyuan Environmental Protection Technology
6,914,487.73
Co., Ltd.
Qingdao Haimu Investment Management Co., Ltd.

2,465,299.70

Qingdao Haimu Smart Home Investment Partnership (Limited
59,424,662.44
Partnership)
Guangzhou Heying Investment Partnership (Limited

285,793,577.87

260/366-6,914,487.73

Haier Smart Home Co., Ltd. 2021 Annual Report

Partnership)
Qingdao Home Wow Cloud Network Technology Co., Ltd.

2,600,050.50

Qingdao Ririshun Service Co., Ltd.

31,316,518.68

Bingji (Shanghai) Corporate Management Co., Ltd.

972,200,487.88

Youjin (Shanghai) Corporate Management Co., Ltd.

1,766,819,068.86

RRS (Shanghai) Investment Co., Ltd.

3,211,580,125.21

Haier Best Water Technology Co., Ltd.

79,785,557.39

Huizhixiangshun Equity Investment Fund (Qingdao)
119,008,967.03
Partnership (Limited Partnership)
Qingdao Ririshun Huizhi Investment Co., Ltd.

2,083,482.78

Qingdao Xinshenghui Technology Co., Ltd.

9,964,773.52

Meiling Candy Washing Machine Co., Ltd.

22,752,232.07

EuropaltersItaliaS.r.l.

9,361,965.48

Konan Electronic Co., Ltd.

69,273,712.61

HNR Company (Private) Limited

114,055,318.97

HPZ LIMITED

71,269,048.97

HaierRayaElectricS.A.E

10,568,507.40

CONTROLADORAMABES.A.deC.V.

4,131,983,673.10

MiddleEast Air conditioning Company,Limited
Total

10,318,898.13
185,731,501.78

261/366

23,358,610,448.55-126,409,589.30

Haier Smart Home Co., Ltd. 2021 Annual Report

12.

Investments in other equity instruments(1) Details of investments in other equity instruments√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

SINOPEC Fuel Oil Sales Corporation Limited

1,290,487,901.40

1,117,637,000.00

Haier COSMO IOT Ecosystem Technology Co., Ltd.

2,812,000,000.00

1,396,555,521.94

Other746,221,537.56

144,832,743.60

Total

4,848,709,438.96

2,659,025,265.54(2) Dividends from investment in other equity instruments during the current period:
Items

Amount for the current period

SINOPEC Fuel Oil Sales Corporation
57,678,519.95
LimitedOther

880,275.10
Total

58,558,795.05

13. Investment properties(1) The changes in investment properties measured at cost this year are as follows:
Items

Houses and buildings

Land use rights

Total

I. Original book value
1. Opening balance

46,978,578.83

2,128,550.51

49,107,129.34

2. Increase for the period(1) External acquisition(2) Inventories/fixed assets/construction in progresstransferred in(3) Increase in business combinations
3. Decrease for the period(1) Disposal

11,716,051.65

262/366

11,716,051.65

Haier Smart Home Co., Ltd. 2021 Annual Report(2) Disposal of subsidiaries(3) Other transferring out
4. Translation difference of foreign currency statement-1,239,815.68

5. Closing balance

34,022,711.50

2,128,550.51

36,151,262.01

20,129,742.37

590,384.16

20,720,126.53

1,296,955.14

40,236.22

1,337,191.36

II.

Accumulated

depreciation

and-1,239,815.68

accumulated

amortization
1. Opening balance
2. Increase for the period(1) Provision or amortization
3. Decrease for the period(1) Disposal

10,722,484.32

10,722,484.32-148,460.04-148,460.04(2) Disposal of subsidiaries(3) Other transferring out
4. Translation difference of foreign currency statement
5. Closing balance

10,555,753.15

630,620.38

11,186,373.53

23,466,958.35

1,497,930.13

24,964,888.48

III. Provision for impairment
1. Opening balance
2. Increase for the period(1) Provision
3. Decrease for the period(1) Disposal(2) Disposal of subsidiaries(3) Other transferring out
4. Translation difference of foreign currency statement
5. Closing balance
IV. Book value
1. Closing book value

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Haier Smart Home Co., Ltd. 2021 Annual Report

26,848,836.46

2. Opening book value

1,538,166.35

28,387,002.81(2) The depreciation and amortization amount charge for the period is RMB1,337,191.36.
(3) The recoverable amount of the investment real estate of the Company at the end of the period
is not less than its book value, so no provision for impairment is made.

14.

Fixed assets

Presented by item
√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Fixed assets

22,302,546,431.63

20,894,802,468.57

4,543,369.52

16,987,772.82

22,307,089,801.15

20,911,790,241.39

Disposals of fixed assets
Total

Opening balance（1） Fixed assets:
Transportation
Items

Houses and buildings

Production equipment
equipment

I. Original book value:
1. Opening balance

10,162,375,605.28

24,419,389,978.14

169,128,209.23

90,801,047.72

1,006,202,589.34

5,104,975.09

1,412,983,726.05

2,381,586,393.12

17,694,321.22

55,567,496.52

871,744,635.26

11,723,854.89

2. Increase for the period(1) Acquisition(2) Construction in progresstransferred in(3) Increase in businesscombinations
3. Decrease for the period(1) Disposal or write-off(2) Disposal of subsidiaries

6,926,964.50(3) Transfer to hold for sale
4. Translation difference of foreign-256,723,859.20-375,264,070.37-1,119,962.72

11,353,869,023.33

26,553,243,290.47

179,083,687.93

3,513,815,327.49

11,613,034,474.08

99,044,833.13

492,924,941.20

2,309,299,744.13

18,925,788.82

currency statements
5. Closing balance
II. Accumulated depreciation
1. Opening balance
2. Increase for the period(1) Provision

264/366

Haier Smart Home Co., Ltd. 2021 Annual Report(2) Increase in businesscombinations
3. Decrease for the period(1) Disposal or write-off

26,407,163.11(2) Disposal of subsidiaries

628,235,406.18

9,785,922.11

6,383,333.90(3) Transfer to hold for sale
4. Translation difference of foreign-57,880,698.45-79,705,314.18-234,440.54

3,922,452,407.13

13,208,010,163.95

107,950,259.30

33,638,997.63

39,684,984.39

185,490.35

4,234,330.15

948.59currency statements
5. Closing balance
III. Provision for impairment
1. Opening balance
2. Increase for the period(1) Provision(2) Increase in businesscombinations
3. Decrease for the period(1) Disposal or write-off

19,989,491.58(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Translation difference of foreign-4,139,559.42-2,282,260.87-12,953.81

29,499,438.21

21,647,562.09

173,485.13

1. Closing book value

7,401,917,177.99

13,323,585,564.43

70,959,943.50

2. Opening book value

6,614,921,280.16

12,766,670,519.67

69,897,885.75

currency statements
5. Closing balance
IV. Book value

Fixed assets (continued)
Items

Office furniture

Other

Total

I. Original book value:
1. Opening balance

953,174,443.16

2,313,836,002.70

38,017,904,238.51

11,926,966.11

103,267,926.65

1,217,303,504.91

186,749,076.20

269,993,951.27

4,269,007,467.86

2. Increase for the period(1) Acquisition(2) Construction in progresstransferred in(3) Increase in businesscombinations
3. Decrease for the period

265/366

Haier Smart Home Co., Ltd. 2021 Annual Report(1) Disposal or write-off

97,545,918.17(2) Disposal of subsidiary

172,000.00

102,341,010.65

1,138,922,915.49
7,098,964.50(3) Transfer to hold for sale
4. Translation difference of foreign-23,368,552.40-120,369,213.64-776,845,658.33

1,030,764,014.90

2,464,387,656.33

41,581,347,672.96

484,523,249.85

1,333,389,832.83

17,043,807,717.38

156,708,729.58

234,997,884.46

3,212,857,088.19(1) Disposal or write-off

70,524,439.03

77,143,107.86

812,096,038.29(2) Disposal of subsidiary

163,400.00

currency statements
5. Closing balance
II. Accumulated depreciation
1. Opening Balance
2. Increase for the period(1) Provision(2) Increase in businesscombinations
3. Decrease for the period

6,546,733.90(3) Transfer to hold for sale
4. Translation difference of foreign-5,339,893.54-72,757,899.31-215,918,246.02

565,204,246.86

1,418,486,710.12

19,222,103,787.36

367,009.63

5,417,570.56

79,294,052.56

42,859.26

346,792.91

4,624,930.91

24,657.37

260,018.77

20,274,167.72-126,683.44-385,904.24-6,947,361.78

258,528.08

5,118,440.46

56,697,453.97

1. Closing book value465,301,239.96

1,040,782,505.75

22,302,546,431.63

2. Opening book value

468,284,183.68

975,028,599.31

20,894,802,468.57

currency statements
5. Closing Balance
III. Provision for impairment
1. Opening balance
2. Increase for the period(1) Provision(2) Increase in businesscombinations
3. Decrease for the period(1) Disposal or write-off(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book value

266/366

Haier Smart Home Co., Ltd. 2021 Annual Report(2) In the current period, the balance of the construction in progress transferred to the original value ofthe fixed assets in a total of RMB4,269,007,467.86.
(3) There was no mortgage secured by the fixed assets mortgage at the end of the period.
(4) Disposals of fixed assets

Reason for
Items

Closing Balance

Opening Balancetransferring todisposal

Relocation of Qingdao
4,543,369.52

12,964,689.10

Demolition

4,023,083.72

Scrap cleanup

Industrial Park
Other
Total

15.

4,543,369.52

16,987,772.82

Construction in progress

Presented by item
√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing Balance

Construction in progressOpening Balance

4,183,263,398.79

3,610,195,094.37

4,183,263,398.79

3,610,195,094.37

Construction materials
Total

CONSTRUCTION IN PROGRESS（1）Balance of construction in progress√Applicable□Not Applicable
Unit and Currency: RMB
Closing Balance

Projects

Book balance

Impairment

Opening BalanceBook ValueBook balance

Provision
America GEA Project

Impairment

Book Value

provision

722,008,600.99

722,008,600.99

518,260,493.01

518,260,493.01

598,122,551.15

598,122,551.15

291,584,097.58

291,584,097.58

Foshan freezer Project

199,726,996.70

199,726,996.70

89,437,456.94

89,437,456.94

Hefei Refrigerator Project

208,080,465.14

208,080,465.14

87,566,220.44

87,566,220.44

Special freezer Project

220,203,225.72

220,203,225.72

26,181,149.22

26,181,149.22

Smart home appliancetechnology project267/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Closing Balance
Projects

Book balance

Impairment

Opening BalanceBook ValueBook balance

Provision

Impairment

Book Value

provision

Haier Russian Project

182,497,069.58

182,497,069.58

76,966,572.40

76,966,572.40

Haier Indian Project

179,479,688.03

179,479,688.03

400,955,285.59

400,955,285.59

Europe Candy Project

153,117,404.68

153,117,404.68

611,529,115.13

611,529,115.13

139,065,246.00

139,065,246.00

107,072,469.09

107,072,469.09

125,734,579.67

125,734,579.67

134,884,592.49

134,884,592.49

111,516,266.46

111,516,266.46

96,050,392.73

96,050,392.73

103,052,450.36

103,052,450.36

29,444,043.15

29,444,043.15

91,964,708.57

91,964,708.57

25,231,410.35

25,231,410.35

87,901,666.83

87,901,666.83

11,010,911.27

11,010,911.27

59,409,379.45

59,409,379.45

28,524,965.12

28,524,965.12

58,589,285.46

58,589,285.46

57,933,662.48

57,933,662.48

56,560,330.52

56,560,330.52

55,838,238.24

55,838,238.24

28,379,142.82

28,379,142.82

54,949,612.93

54,949,612.93

21,461,405.85

21,461,405.85

49,077,644.27

49,077,644.27

29,138,857.36

29,138,857.36

47,486,780.72

47,486,780.72

48,681,689.86

48,681,689.86

678,712,857.08 1,204,981.72

677,507,875.36

892,112,229.30

Qingdao Haier Washing
Machine Project
Zhengzhou New Energy
Project
New Zealand FPA Project
Wuhan Haier freezer
Project
Haier Dishwasher ProjectBeijing Haixianghui
Project
Tianjin Haier Washing
Appliance Project
Hailvyuan Recycling
Technology Project
Haier Air Conditioning
Electronics
Project
Special Refrigerator
Project
Hefei Haier Drum
Washing
Machine Project
Chongqing Haier Drum
Washing
Machine Project
Jiaonan Washing Machine

Project
OthersTotal

4,184,468,380.51 1,204,981.72 4,183,263,398.79 3,611,032,830.22

837,735.85

837,735.85 3,610,195,094.37（2）Details of significant changes of construction in progress for the period
268/366

891,274,493.45

Haier Smart Home Co., Ltd. 2021 Annual Report

Increase forOpening
Project name

Transfer to

Other

Exchange

Closing

Source of

fixed assets

decreasedifferencesbalancefund-14,474,773.03

722,008,600.99

the current
balanceperiodAmerica GEA Project

460,892,584.42

Self-funding

518,260,493.01

679,115,465.43

291,584,097.58

306,538,453.57

89,437,456.94

324,364,137.25

214,074,597.49

199,726,996.70

87,566,220.44

264,844,650.10

144,330,405.40

208,080,465.14

Special freezer Project

26,181,149.22

220,770,669.22

26,748,592.72

220,203,225.72

Self-funding

Haier Russian Project

76,966,572.40

358,283,591.35

248,927,128.96-3,825,965.21

182,497,069.58

Self-funding

Haier Indian Project

400,955,285.59

522,285,330.49

732,409,681.02-11,351,247.03

179,479,688.03

Smart home applianceSelf-funding
598,122,551.15

technology project
Foshan freezer ProjectHefei Refrigerator

Self-funding
Self-funding

Project

Self-funding/fund raising
Europe Candy Project

611,529,115.13

304,791,921.03

637,122,648.23-126,080,983.25

153,117,404.68

Qingdao Haier
Washing Machine

Self-funding
Self-funding

107,072,469.09

31,992,776.91

139,065,246.00

Project
Zhengzhou New
EnergySelf-funding
134,884,592.49

119,251,117.02

128,401,129.84

125,734,579.67

96,050,392.73

142,298,231.49

119,808,789.54

29,444,043.15

82,772,652.72

9,164,245.51

103,052,450.36

25,231,410.35

159,346,735.80

92,613,437.58

91,964,708.57

11,010,911.27

132,587,372.62

55,696,617.06

87,901,666.83

28,524,965.12

59,601,486.19

28,717,071.86

59,409,379.45

Project
New Zealand FPA

Self-funding-7,023,568.22

111,516,266.46

Project
Wuhan Haier freezer

Self-funding

Project
Haier Dishwasher

Self-funding

Project
Beijing Haixianghui

Self-funding

Project
Tianjin Haier WashingSelf-funding

Appliance Project
Hailvyuan

Self-funding

Recycling Technology

58,589,285.46

58,589,285.46

Project
Haier Air

Self-funding

Conditioning
56,560,330.52

31,788,177.06

30,414,845.10

Electronics
Project

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57,933,662.48

Haier Smart Home Co., Ltd. 2021 Annual Report

Special Refrigerator

Self-funding
28,379,142.82

64,543,973.25

37,084,877.83

55,838,238.24

Project
Hefei Haier Drum
Washing

Self-funding

Machine21,461,405.85

44,908,605.51

11,420,398.43

54,949,612.93

Project
Chongqing Haier

Self-funding

Drum Washing

29,138,857.36

52,427,535.19

32,488,748.28

49,077,644.27

48,681,689.86

58,666,753.38

59,861,662.52

47,486,780.72

892,112,229.30

994,366,893.44

1,198,830,006.07

Machine Project
Jiaonan WashingSelf-funding

Machine Project
Self-funding
Others-8,936,259.59

678,712,857.08/fund raisingTotal

3,611,032,830.22

5,014,135,814.48

4,269,007,467.86-171,692,796.33

4,184,468,380.51（3）Impairment provision of construction in progress
Increase forOpening
Project name

Transfer to fixed

Other

Exchange

Closing

assetsdecreasedifferencesbalancethe current
balanceperiodLejia IOT Project

837,735.85

OthersTotal

16.

837,735.85

837,735.85
372,747.55-5,501.68

367,245.87

372,747.55-5,501.68

1,204,981.72

Right-of-use assets
Transportation
Items

Houses and buildings

Production equipment
equipment

I. Original book value:
1. Opening balance

3,363,666,439.28

39,645,820.91

194,507,833.03

590,379,460.52

6,330,101.00

57,543,799.23

250,622,974.89

226,268.14

23,908,878.73-140,113,129.94-2,607,473.37-23,137,512.47

3,563,309,794.97

43,142,180.40

205,005,241.06

885,680,688.93

12,842,957.01

89,243,999.98

2. Increase for the current period(1) Increase
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
II. Accumulated depreciation
1. Opening balance

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Haier Smart Home Co., Ltd. 2021 Annual Report

2. Increase for the current period(1) Provision532,226,885.47

12,630,223.08

53,395,839.74

187,866,877.23

226,268.14

23,849,617.69-44,598,513.32-6,708,374.15-13,962,599.81

1,185,442,183.85

18,538,537.80

104,827,622.22

1. Closing book balance

2,377,867,611.12

24,603,642.60

100,177,618.84

2. Opening book balance

2,477,985,750.35

26,802,863.90

105,263,833.05

Other

Total

48,709,675.83

355,706,633.95

4,002,236,403.00

18,479,561.69

77,418,603.09

750,151,525.53

2,873,441.85

32,226,895.74

309,858,459.35-7,430,164.08-8,669,580.22-181,957,860.08

56,885,631.59

392,228,761.08

4,260,571,609.10

14,096,013.92

160,514,483.89

1,162,378,143.73

3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value

Right-of-use assets (continued)
Items

Office furniture

I. Original book value:
1. Opening balance
2. Increase for the current period(1) Increase
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
II. Accumulated depreciation
1. Opening balance

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Haier Smart Home Co., Ltd. 2021 Annual Report

2. Increase for the current period(1) Provision

9,913,547.88

75,492,399.87

683,658,896.04

2,873,441.85

32,052,592.44

246,868,797.35-3,154,691.04-4,189,200.17-72,613,378.49

17,981,428.91

199,765,091.15

1,526,554,863.93

1. Closing book balance

38,904,202.68

192,463,669.93

2,734,016,745.17

2. Opening book balance

34,613,661.91

195,192,150.06

2,839,858,259.27

Proprietary technology

Licenses and franchises

1,842,005,662.53

4,010,777,802.58

1,200,138,465.93

170,453,877.93

110,696,693.03

3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value

17.

Intangible assets
Items

Land use rights

I. Original book value
1.Opening balance
2.Increase for the current period(1) Purchase(2) Internal research and137,493,871.57
development(3) Increase in businesscombination
3. Decrease for the current period(1) Disposal

26,777,550.69(2) Disposal of subsidiary(3) Transfer to hold for sale272/366

38,133,428.22

Haier Smart Home Co., Ltd. 2021 Annual Report

4. Translation difference of foreign-100,044,350.84

60,451,857.10-6,255,398.64

1,852,677,632.57

4,241,683,537.61

1,266,446,332.10

871,204,292.17

564,045,820.06

139,165,642.83

152,156,601.55

123,653,462.19

76,470,555.49-50,287,715.47

135,286,362.99-335,926.52

946,309,396.14

822,985,645.24

215,300,271.80

1. Closing book balance

906,368,236.43

3,418,697,892.37

1,051,146,060.30

2. Opening book balance

970,801,370.36

3,446,731,982.52

1,060,972,823.10

currency statements
5. Closing balance
II. Accumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase in businesscombination
3. Decrease for the current period(1) Disposal

26,763,782.11(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase in businesscombination
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
IV. Book Value

Intangible assets (continued)
Application
Items

Trademark rights

Total
management273/366

Haier Smart Home Co., Ltd. 2021 Annual Report

software and others
I. Original book value
1. Opening balance

2,713,444,699.59

3,828,496,475.88

13,594,863,106.51

105,569,123.12

386,719,694.08

405,327,526.09

542,821,397.66

33,427,012.30

77,637,764.05

175,975,755.26-204,300,544.66-67,013,460.78-317,161,897.82

2,475,717,142.63

4,194,741,900.26

14,031,266,545.17

1,946,261,208.96

3,520,676,964.02

553,646,765.63

905,927,384.86

47,488,233.09

74,252,015.20-11,286,960.87

73,375,760.13

2,441,132,780.63

4,425,728,093.81

56,040,248.43

56,040,248.43

2. Increase for the current period(1) Purchase(2) Internal research anddevelopment(3) Increase in businesscombination
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
II. Accumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase in businesscombination
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign
currency statements
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision

29,631,196.82

29,631,196.82(2) Increase in businesscombination
3. Decrease for the current period(1) Disposal

29,631,196.82

274/366

102,076.80

29,733,273.62

Haier Smart Home Co., Ltd. 2021 Annual Report(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Translation difference of foreign-7,638.40-7,638.40

55,930,533.23

55,930,533.23

currency statements
5. Closing balance
IV. Book Value
1. Closing book balance

2,475,717,142.63

1,697,678,586.40

9,549,607,918.13

2. Opening book balance

2,713,444,699.59

1,826,195,018.49

10,018,145,894.06

At the end of the period, the intangible assets developed through the Company accounted for the
17.06% of the original value at the end of the period.
18. Development cost
Decrease for the current period
Increase forOpeningdifference of
Recognized as

Items

intangible

Closing

Included in

the current
balance

Translation

Disposal offoreignsubsidiarycurrencybalancecurrent profit

periodasset

and lossstatements

91ABD. ERP
97,893,800.99

74,915,278.41

129,278,261.16-1,584,565.77

41,946,252.47

IT Program

IOT Project
OthersTotal

110,027,251.84

110,027,251.84

69,852,923.14

634,136,234.69

413,543,136.50

209,806,757.83-4,720,538.68

75,918,724.82

167,746,724.13

819,078,764.94

542,821,397.66

209,806,757.83-6,305,104.45

227,892,229.13

19. Goodwill
Effect of fluctuations
Items

Increase for the

Decrease for thecurrent period

current period

Opening balancein exchange rates for

Closing balance

the current period

GEA

19,382,602,366.26-444,138,636.83

18,938,463,729.43

Candy

2,086,499,983.95-209,377,998.39

1,877,121,985.56

Others1,049,357,987.43-37,840,641.66

1,011,517,345.77

22,518,460,337.64-691,357,276.88

21,827,103,060.76

Total

In the case of a goodwill impairment test, the Company compares the carrying amount of the relevant
asset group or asset group combination (including goodwill) with its recoverable amount. If therecoverable amount is less than the book value, corresponding difference will be recognized in profit orloss.

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Haier Smart Home Co., Ltd. 2021 Annual Report

The recoverable amount of the asset group (including goodwill) is calculated with discounted
estimated future cash flow method based on a management-approved 5-15 years budget. Future cash
flows beyond the budget period are estimated using the estimated perpetual annual growth rate. The
perpetual annual growth rate (mainly 2%) adopted by the management is consistent with industry forecast
data and does not exceed the long-term average growth rate of each product. The management determines
the compound income growth rate (mainly 3%- 15.54%) and the EBITDA profit margin (mainly 3%14%) based on historical experience and market development forecasts, and adopts the pre-tax interest
rate that can reflect the specific risks of the relevant asset group as the discount rate (mainly 9.42%17.85%). The management analyzes the recoverable amount of each asset group based on theseassumptions and believes that there is no need to make provision for goodwill.

20. Long-term amortized expenses
Translationdifference of
Items

Increase for the

Amortization for

Othercurrent period

the current period

decrease

Opening balance

foreign

Closing balancecurrency
statements
Renovation

169,271,684.58

365,418,857.03

193,374,991.17-34,833.08

341,280,717.36

170,612,483.47

11,540,486.75

26,650,376.39-1,673,364.70

153,829,229.13

116,470,471.46

15,890,708.64

37,491,766.35-1,302,971.33

93,566,442.42

456,354,639.51

392,850,052.42

257,517,133.91-3,011,169.11

588,676,388.91

Improvement
on leased
property
OthersTotal

21. Deferred income tax assets / deferred income tax liabilities（1）Deferred income tax assets before elimination
Items

Closing balance

Provision for assets impairment

Opening balance

354,806,051.43

374,373,978.37

1,402,480,307.20

1,745,260,196.51

619,291,715.60

668,981,845.53

Government grants

163,806,221.87

124,822,115.15

Uncovered losses

817,306,157.01

806,710,012.75

Others286,586,600.19

237,331,301.90

3,644,277,053.30

3,957,479,450.21

Liabilities
Internal unrealized earnings eliminated
due to combination

Total（2）Deferred income tax liabilities before elimination
276/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Closing balance

Items
Asset amortisation

Opening balance

2,318,829,386.48

2,371,032,689.77

878,623,804.46

878,623,804.46

292,476,080.49

6,593,323.58

421,341,222.80

393,329,640.12

3,911,270,494.23

3,649,579,457.93

Remeasurement of fair value of thereaming equity on the day when thecontrol right was lost
Changes in fair value of investments inother equity instruments
Others
Total（3）The deferred income tax assets and the deferred income tax liabilities eliminated at the endof the period was RMB1,789,467,320.40.

22. Other non-current assets
Items
Prepayments for equipment and land

Closing balance
1,859,693,694.07

1,403,997,069.15

304,690,319.07

521,764,491.02

2,164,384,013.14

1,925,761,560.17

Others
Total

Opening balance

23. Short-term borrowings(1) Category of short-term borrowings√Applicable□Not Applicable
Unit and Currency: RMB
ItemClosing balance

Opening balance

Borrowings — secured by pledge

255,103,925.36

472,098,030.36

Borrowings — secured by credit

10,661,927,352.96

7,200,328,217.00

Borrowings — secured by guarantee

304,896,830.40

Interest payable for short-term borrowings
Total

4,284,025.67

15,481,918.52

11,226,212,134.39

7,687,908,165.88

24. Financial liabilities held for trading
Items

Closing balance

Forward foreign exchange contracts
Total

25. Derivative financial liabilities√Applicable□Not Applicable

277/366

Opening balance

6,294,014.40

26,952,508.66

6,294,014.40

26,952,508.66

Haier Smart Home Co., Ltd. 2021 Annual Report

Unit and Currency: RMB
Items

Closing balance

Opening balance

Forward foreign exchange contracts

60,527,532.76

188,695,788.30

Interest rate swap agreement

19,684,900.48

50,886,744.60

Total

80,212,433.24

239,582,532.90

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Haier Smart Home Co., Ltd. 2021 Annual Report

26. Bills payable√Applicable□Not Applicable
Unit and Currency: RMB
Category

Closing balance

Opening balance

3,022,602,833.31

2,710,903,499.32

Bank acceptance notes

22,000,635,573.41

18,525,153,554.35

Total

25,023,238,406.72

21,236,057,053.67

Commercial acceptance notes

27. Accounts payables√Applicable□Not Applicable
Unit and Currency: RMB
Items

Accounts payables
Total

Closing balance

Opening balance

42,344,857,144.49

36,309,048,800.85

42,344,857,144.49

36,309,048,800.85

The book balance at the end of the period was mainly the unpaid expenditures on material andlabour.
28. Contractual liabilities√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balanceContractual liabilities

10,016,870,340.44

6,269,584,417.32

Total

10,016,870,340.44

6,269,584,417.32

The book balance at the end of the period is mainly the receipt in advance.
29. Payables for staff remuneration(1) Payables for staff remuneration√Applicable□Not Applicable
Unit and Currency: RMB

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Items

Increase for the

Decrease for thecurrent period

current period

3,626,057,331.52

23,693,152,376.11

23,335,695,144.59

3,983,514,563.04

21,043,040.29

1,224,424,105.01

1,226,517,443.13

18,949,702.17

9,818,188.41

1,956,763.54

1,956,763.54

9,818,188.41

106,117,562.97

115,774,332.29

120,292,761.92

101,599,133.34

3,763,036,123.19

25,035,307,576.95

24,684,462,113.18

4,113,881,586.96

Opening balanceI.

Short-term remuneration

II.

Post-employment
benefits defined

Closing balance

contribution planIII.

Termination benefits

IV.

Other benefits due within
one year
Total(2) Short-term remuneration√Applicable□Not Applicable
Unit and Currency: RMB

Items

I.

Increase for the

Decrease for thecurrent period

current period

2,525,846,505.03

17,512,726,575.91

17,194,737,310.61

2,843,835,770.33

Opening balance

Salaries, bonus,

Closing balance

allowances and benefit

II.

Employee welfare

320,384,691.00

973,611,847.84

971,999,744.62

321,996,794.22

III.

Social benefit

183,954,347.24

1,575,512,243.06

1,587,820,756.64

171,645,833.66

IV.

Housing fund5,093,655.54

421,467,144.94

415,423,178.97

11,137,621.51

V.

Labor union fee and1,323,116.90

117,422,341.74

115,233,417.25

3,512,041.39

276,729,127.32

420,876,453.84

429,392,416.31

268,213,164.85

312,725,888.49

2,671,535,768.78

2,621,088,320.19

363,173,337.08

3,626,057,331.52

23,693,152,376.11

23,335,695,144.59

3,983,514,563.04

education fundVI.

Short-term compensated
leave

VII.

OthersTotal(3) Defined contribution plan
√Applicable□Not Applicable
Unit and Currency: RMB

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Items

Increase for the

Decrease for thecurrent period

current period

Opening balance

Closing balance

1. Basic pension insurance

20,356,802.61

1,144,702,494.45

1,146,662,819.95

18,396,477.11

2.Unemployment insurance

170,304.70

28,705,475.59

28,743,362.94

132,417.35

3.Enterprise annuity payment

515,932.98

51,016,134.97

51,111,260.24

420,807.71

Total

21,043,040.29

1,224,424,105.01

1,226,517,443.13

18,949,702.17(4) Termination benefits
Items

Closing balance

Termination compensation
Total

Opening balance

9,818,188.41

9,818,188.41

9,818,188.41

9,818,188.41

30. Taxes payable√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

961,177,432.37

645,186,165.21

Corporate income tax

1,305,299,090.59

1,372,787,595.03

Individual income tax

94,858,745.38

144,339,932.23

City maintenance and construction tax

40,370,470.67

14,014,839.95

Education surcharge

16,171,169.64

5,970,374.68

95,522,090.50

88,989,555.00

90,284,462.69

129,834,269.97

2,603,683,461.84

2,401,122,732.07

Value-added tax

The electrical and electronic products waste
treatment fund
Other taxes
Total

31. Other payables
Presented by item:√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Interest payable

10,639,313.22

Dividends payable
Other payables

17,513,520,752.48

17,063,294,004.33

Total

17,524,160,065.70

17,063,294,004.33

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Name of unit

Closing balance

Opening balance

Qingdao Ruidecheng Information Management
Consulting Enterprise (Limited Partnership)

1,191,000.00

Others9,448,313.22
Total

10,639,313.22（2）Other payables:
Items

Closing balance

Other payables
Total

Opening balance

17,513,520,752.48

17,063,294,004.33

17,513,520,752.48

17,063,294,004.33

The closing balance mainly included the incurred but unpaid costs.

32.Non-current liabilities due within one year
√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Long-term borrowings due within one year

Closing balance
6,745,950,334.20

Opening balance
4,950,555,670.08
20,000,000.00

Long-term payables due within one year

686,666,860.72

670,863,763.75

Anticipated liabilities due within one year

2,190,397,652.84

1,881,305,479.57

Total

9,623,014,847.76

7,522,724,913.40

Lease liabilities due within one year

33. Other current liabilities
Status of other current liabilities√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Closing balance
655,801,519.33

540,552,003.81

1,565,649,557.85

799,241,847.23

Payable refund
Tax amount to be transferred to output tax

5,535,262,500.00

Ultra-short-term payable bonds

13,079,047.64

16,053,035.75

2,234,530,124.82

6,891,109,386.79

OthersTotal

34. Long-term borrowings√Applicable

Opening balance□ Not Applicable282/366

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Unit and Currency: RMB
Items
Borrowings — unsecured by credit
Total

Closing balance

Opening balance

3,038,573,824.53

11,821,416,259.81

3,038,573,824.53

11,821,416,259.81

The interest rates of the Company’s long-term borrowings: 0.80%-7.50%.
35. Bonds payable
In November 2017, Harvest International Company, the Company’s wholly-owned subsidiary,
issued HK$8 billion five-year exchangeable corporate bonds, with a coupon rate of zero and a rate
on investment of 1%. In September 2020, the Company considered and approved the scheme toconvert the exchangeable bonds into convertible bonds. The underlying shares of the originalexchangeable bonds were changed from the shares of Haier Electronic to newly issued H-shares ofHaier Smart Home (referred to as EB to CB Scheme). On 23 December 2020, H-shares of Haier
Smart Home were listed and traded, and the EB-to-CB Scheme took effect. The outstanding principle
amount of the original exchangeable bonds was HK$7.993 billion. The maturity date, coupon rate
and yield rate of the bond remain unchanged. The liability component and equity component of
convertible bonds at the initial recognition:

Convertible corporate bonds on 23 December 2020

Items

9,105,660,619.93

Initial recognition:
Including：
Equities of the convertible bond

2,364,195,333.79

Liabilities of the convertible bond

6,741,465,286.14

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Changes in the liability portion of corporate bonds in the current period:

Items

Opening balance

Increase for

Accrued bondthe current

Interest for theperiodLess: bond

Redemption

interest paid forin theShares converted in

the current

current

the current period

periodperiodExchange rate impact

Closing balancecurrent period

Convertible
corporate

6,713,501,050.27

49,610,212.45

6,368,251,389.85-60,129,824.05

334,730,048.82

6,713,501,050.27

49,610,212.45

6,368,251,389.85-60,129,824.05

334,730,048.82

bonds (CB)Total

36. Lease liabilities
Items

Closing balance

Opening balance

2,647,561,842.19

2,743,566,116.43

Less: lease liabilities due within one year

686,666,860.72

670,863,763.75

Total

1,960,894,981.47

2,072,702,352.68

Lease liabilities

37. Long-term payables
Items

Closing balance

Opening balance

Investment from CDB development fund

36,500,000.00

56,500,000.00

Others63,102,707.76

61,703,261.27

Less: long-term payables due within one

20,000,000.00
year

99,602,707.76

Total

98,203,261.27

Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou)
Air-conditioning Co., Limited together with China Development Fund Co. Ltd. in 2015 and 2016,
China Development Fund Co. Ltd. invested RMB73 million in Qingdao Haier (Jiaozhou) Airconditioning Co., Limited. China Development Fund Co. Ltd. obtained an annual return of 1.2% bymeans of dividends or buyback premium for the above investments. As of 31 December 2021, thesubsidiaries of the Company made buyback in amount of RMB36.5 million. From 2022 to 2025,
the Company and its subsidiaries will repurchase the investments made by China Development Fund
Co. Ltd. to the subsidiaries of the Company.

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38. Long-term employee benefits payable√Applicable □ Not Applicable(1) Presented by Long-term employee benefits payable√Applicable □ Not Applicable
Unit and Currency: RMB
Items

I.

Post-employment

Closing balance

benefits:

Opening balancenet
517,077,143.43

602,802,957.77

453,425,129.57

429,651,733.32

202,649,488.64

213,320,333.26

1,173,151,761.64

1,245,775,024.35

liability of defined benefit plan
II. Termination benefits
III. Other long-term benefits
IV. Provision for work-related injury
compensation
Total(2) Defined benefits plan
Some subsidiaries of the Company have set several defined benefit plans for the qualified
staff. Under these plans, the employees are entitled to the retirement benefits agreed in suchdefined benefit plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiaryand other risks.
The recent actuarial evaluation of the assets and the present value of defined benefit
obligations under such plans are determined by using the projected unit credit method.

① The defined benefit plan of Haier Asia Co., Ltd., a subsidiary of the Company
Actuarial assumptions used to defined benefit plans

Items

Rate

Discount rate

0.50%

Expected rate of return

2.00%

Present value of defined benefit obligations

Items

AmountI. Opening balance

324,375,540.91

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II. Defined benefit cost recognized in current profit or loss

10,011,449.19

1. Current service cost

8,502,422.76

2. Past service cost
3. Settlement gains (loss indicated in ‘－ ’)

4. Interest cost

1,509,026.43

III. Defined benefit cost recognized in other comprehensive-73,957.13

income1. Actuarial loss (gain indicated in ‘

－ ’)

-73,957.13

IV. Other changes-55,160,610.85

1. The consideration paid at the time of settlement
2. Benefit paid

-15,357,112.08

3. Exchange differences-39,803,498.77

V. Closing balance

279,152,422.12

Fair value of plan assets

Items

AmountI. Opening balance

371,501,327.98

II. Defined benefit cost recognized in current profit and loss

6,747,900.43

1. Interest income

6,747,900.43

III. Defined benefit cost recognized in other comprehensive
11,440,127.15

income1. Return on plan assets (except those included in net
11,440,127.15

interests)
2. Changes in impact of asset cap (except those included in net
interests)
IV. Other changes-52,607,670.32

1. Employer contributions

2,770,993.80

2. Benefit paid

-8,719,907.93

3. Exchange differences-46,658,756.19

V. Closing balance

337,081,685.24

Neither the Company’s ordinary shares or bonds, nor the properties occupied by the Company areincluded in the plan assets.
Net liability (net asset) of defined benefit plan

Items

Amount286/366

Haier Smart Home Co., Ltd. 2021 Annual Report

I. Opening balance-47,125,787.08

II. Defined benefit cost recognized in current profit or loss

3,263,548.76

III. Defined benefit cost recognized in other-11,514,084.28

comprehensive income
IV. Other changes-2,552,940.52

V. Closing balance-57,929,263.12

The average term for the defined benefit obligation is 11.73 years at the balance sheet date.

② The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has provided post-employment defined benefit
plan of health care benefits to eligible employees.
Actuarial assumptions used in defined benefit plans

Items

Rate

Discount rate

2.91%

Present value of defined benefit obligations

Items

AmountI. Opening balance

151,567,760.38

II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

10,034,855.69

1. Current service cost

6,640,419.89

2. Past service cost
3. Settlement gains (loss indicated in ‘－ ’)

4. Interest cost
IV.

Defined3,394,435.80
benefitcost

recognizedcomprehensive incomes
1. Actuarial loss (gain indicated in ‘

in

other

－ ’)

-12,591,840.29-12,591,840.29

V. Other changes-20,031,091.61

1. The consideration paid at the time of settlement
2. Benefit paid

-8,640,362.09

3. Exchange differences-11,390,729.52

VI. Closing balance

128,979,684.17

Net liability (net asset) of defined benefit plan

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Items

AmountI. Opening balance

151,567,760.38

II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
IV.

Definedbenefitcost

recognizedin

10,034,855.69

other-12,591,840.29

comprehensive incomes
V. Other changes-20,031,091.61

VI. Closing balance

128,979,684.17

The average term for the defined benefit obligation is 10.68 years at the balance sheet date.

③ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided post-retirement
defined benefit plan of health care benefits for the eligible employees.

Actuarial assumptions used in defined benefit plans
Items

Rate

Discount rate

2.62%

Present value of defined benefit obligations

Items

AmountI. Opening balance

293,063,281.71

II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

4,996,390.09

1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘－ ’)

4. Interest cost
IV.

Defined

4,996,390.09
benefitcost

recognizedcomprehensive incomes
1. Actuarial loss (gain indicated in ‘

in

other

－ ’)

-29,917,008.35-29,917,008.35

V. Other changes-46,540,207.93

1. The consideration paid at the time of settlement
2. Benefit paid

-24,853,891.14

3. Exchange differences-21,686,316.79

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VI. Closing balance

221,602,455.52

Net liability (net asset) of defined benefit plan
Items

AmountI. Opening balance

293,063,281.71

II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

4,996,390.09

IV. Defined benefit cost recognized in other-29,917,008.35

comprehensive incomes
V. Other changes-46,540,207.93

VI. Closing balance

221,602,455.52④ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company

Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
defined benefit plan of pension for the eligible employees.

Actuarial assumptions used in defined benefit plans
Items

Rate

Discount rate

2.61%

Present value of defined benefit obligations

Items

AmountI. Opening balance

224,286,521.09

II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

3,928,310.86

1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘－ ’)

4. Interest cost
IV.

Defined

3,928,310.86
benefitcost

recognizedcomprehensive incomes
1. Actuarial loss (gain indicated in ‘

in

other

－ ’)

-7,089,253.36-7,089,253.36

V. Other changes-54,615,138.72

1. The consideration paid at the time of settlement
2. Benefit paid

-38,055,774.79

3. Exchange differences-16,559,363.93

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VI. Closing balance

166,510,439.87

Fair value of plan assets
Items

AmountI. Opening balance

160,409,027.51

II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in other

1,407,910.01

comprehensive incomes
1. Return on plan assets (except those included in

1,407,910.01

net interests)
2. Changes in impact of asset cap (except those included in
net interests)
IV. Other changes-35,796,859.67

1. Employer contributions

14,186,495.90

2. Benefits paid out-38,055,774.79

3. Exchange differences-11,927,580.78

V. Closing balance

126,020,077.85

Net liability (net asset) of defined benefit plan
Items

AmountI. Opening balance

63,877,493.58

II. Business combination not under common control
III. Defined benefit cost recognized in current profit orloss
IV. Defined benefit cost recognized in other

3,928,310.86-8,497,163.37

comprehensive income
V. Other changes-18,818,279.05

VI. Closing balance

40,490,362.02(3) Provision for work-related injury compensation
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, made a provision forwork-related injury claims for the staff injured during the production accidents from 1
January 1991, which was used to pay for the claim made by the injured staff. The provision
was calculated by Beechercarlson Insurance Services, LLC., based on actuarial method anda discount rate of 3.72%.

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Items

AmountI. Opening balance

213,320,333.26

II. Business combination not under common control
III. Compensation recognized in current profit and loss

81,545,079.75

IV. Actual compensation paid

-67,284,048.24

V. Other changes-24,931,876.13

VI. Closing balance

202,649,488.64

Classification of the balance of defined benefit plan
Items

Closing balance

Opening balance

Short-term Benefit

32,502,729.33

38,202,187.93

Long-term Benefit

517,077,143.43

602,802,957.77

549,579,872.76

641,005,145.70

Total
39. Estimated liabilities√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Opening balance

Closing balance

Active litigation

21,550,139.03

29,259,869.48

Others

238,570,708.44

252,996,489.56

1,182,723,189.26

1,666,309,118.07

1,442,844,036.73

1,948,565,477.11

Projection of warranty expenses andinstallation fees
Total

Significant assumption and estimation relating to estimation of warranty expenses and installation fees :the Company reasonably estimated the warranty expenses and installation fees

rate based on its actual

expenses on the warranty expenses and installation fees as well as sales data in the past. The Company
estimated the warranty expenses and installation fees that are likely to be incurred in the future according
to its policies on the warranty expenses and installation fees, as well as the actual sales data.
40. Deferred income√Applicable□ Not Applicable
Unit and Currency: RMB

Items
Government
grantsIncrease for the

Decrease for thecurrent period

current period

Opening balance

633,761,669.48

Closing balance

317,666,578.97

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98,633,681.25

852,794,567.20

Haier Smart Home Co., Ltd. 2021 Annual Report

Total

633,761,669.48

317,666,578.97

98,633,681.25

852,794,567.20

41. Share capital
Increase for

Decrease forthe current

the current

periodperiod403,210,889

32,352,800

Opening
Share category

Closingbalancebalance

I. Restricted shares
1.

State-owned
shares

2. Shares held bydomestic non-stateowned legal entities
3. Shares held bydomestic individuals
4. Shares held byoffshore non-stateowned legal entities
II. Non-restricted

9,027,846,441

shares
1. Ordinary shares in

6,308,552,654

RMB

9,398,704,530

6,308,552,654

2. Domestic listed
foreign Shares
3. Offshore listed
foreign Shares

2,719,293,787

403,210,889

32,352,800

3,090,151,876

9,027,846,441

403,210,889

32,352,800

9,398,704,530

4. Others
III. Total shares
42. Other equity instruments
Increase for the Decrease for the
Items

Opening balance

Closing balancecurrent period

Equity portion of
convertible bondTotalcurrent period

2,364,195,333.79

2,246,177,826.20 118,017,507.59

2,364,195,333.79

2,246,177,826.20 118,017,507.59

43. Capital reserve√Applicable□ Not Applicable
Unit and Currency: RMB

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Haier Smart Home Co., Ltd. 2021 Annual Report

Items

Increase for the

Decrease for thecurrent period

current period

14,193,795,340.17

8,254,921,278.43

974,220,232.21

21,474,496,386.39

813,680,267.23

265,903,666.66

4,734,751.34

1,074,849,182.55

15,007,475,607.40

8,520,824,945.09

978,954,983.55

22,549,345,568.94

Opening balance

Closing balance

Capitalpremium (Sharepremium)
Others capitalreserve
Total

The main reasons for the change in capital premium: The conversion of convertible bonds (CB)resulted in the increase in capital premium of RMB8,211,218,327.05; the cancellation of treasury stock
resulted in the decrease in capital premium of RMB793,935,316.13.

The main reasons for the change in other capital reserves: share-based payment resulted in theincrease in capital reserves of RMB 261,635,166.10.
44. Other comprehensive income

Amounts for the current period

Items

Attributable toOpening balance

Deduction of

Closing balance

Attributable to theAmount before

minority
Impact on income

parent company

current income tax

Othersshareholders

tax

after tax
after taxa-292,647,416.24-50,271,656.09

0.68-50,414,905.68

143,250.27

b-101,239,895.27

143,932,964.92-42,933,731.28

102,858,281.74-1,859,048.10c-530,525,234.75-1,400,161,188.22-1,386,056,247.22-14,104,941.00-32,973.82-1,916,614,455.79

d-159,428,469.24

1,472,225,880.04-307,119,421.90

1,165,148,669.32-42,211.18

56,149.52

1,005,776,349.60

e37,624,286.44

50,627,475.68-14,410,328.79

36,214,421.81

2,725.08-1,046,216,729.06

216,353,476.33-364,463,481.29-132,249,780.03-15,860,224.93

Total

1,591,633.47

1,618,386.47

73,838,708.25
1,614,809.17

Notes:(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details
are as follows:

Item a represents other comprehensive income classified to profit and loss under the equity method.

Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).

293/366-341,470,688.45-1,176,851,699.92

Haier Smart Home Co., Ltd. 2021 Annual Report

Item c represents exchange differences on translation of financial statements denominated in foreign
currencies.

(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details
are as follows:

Item d represents the change in fair value of investments in other equity instruments.

Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.

45. Surplus reserve√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Increase for the

Decrease for thecurrent period

current period

Opening balance

Statutory surplus

Closing balance

2,997,677,738.01

393,281,370.24

3,390,959,108.25

reserve
Discretionary

26,042,290.48

26,042,290.48

11,322,880.64

11,322,880.64

10,291,630.47

10,291,630.47

surplus reserve
Reserve fundEnterprise
expansion fundTotal

3,045,334,539.60

393,281,370.24

3,438,615,909.84

Pursuant to the Company Law of the People’s Republic of China and the Articles of Association, theCompany is required to appropriate the statutory surplus reserve at 10% of its net profit.
46. Undistributed profits√Applicable□ Not Applicable
Items

Amounts

Undistributed profits at the end of previous year

38,445,132,172.47

Change in accounting policy
Combination under common control

22,654,887.32

Undistributed profits at the beginning of the year

38,467,787,059.79

Add: net profit attributable to owners of the parent company

13,067,038,271.85

Other transfer in-7,703,624.31

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Haier Smart Home Co., Ltd. 2021 Annual Report

Adjustment due to implementation of enterprise accounting
184,038,262.10

standard①
Profit available for appropriation for the year

51,711,159,969.43

Less: appropriation of statutory surplus reserve393,281,370.24

Appropriation of staff incentive and welfare fund
Dividend payable for ordinary shares

3,410,744,270.39

Undistributed profits at the end of period

47,907,134,328.80①

The amount is the result of the adjustment to the opening amount for the implementation of
the new financial instruments standard for financial enterprises accounted for by the equity
method of the Company.

47. Operating income and operating cost（1）Operating income
Items

Amount for the current period

Amount for the previous period

226,577,061,321.69

208,590,878,160.05

979,082,296.48

1,132,551,920.98

227,556,143,618.17

209,723,430,081.03

Primary business
Other Business
Total（2）Primary business income and primary business cost by product category
Amount for the current period
Categories

Amount for the previous period

Primary businessPrimary businessPrimary businessPrimary businessincomecost

incomecost

Air conditioner

37,531,431,456.40

27,048,946,901.15

29,998,860,385.28

21,775,814,158.53

Refrigerator

71,569,789,213.81

48,835,867,469.21

61,538,038,448.75

41,567,754,922.29

Kitchen appliance

35,244,040,315.09

23,735,209,066.45

31,361,319,774.44

21,420,569,709.06

Water appliance

12,470,593,776.21

6,760,377,744.75

9,856,730,639.50

5,349,058,135.46

Washing machine

54,758,839,273.57

36,334,162,716.43

48,452,426,668.33

32,402,560,443.74

15,002,367,286.61

13,523,061,580.33

27,383,502,243.75

24,610,805,601.74

226,577,061,321.69

156,237,625,478.32

208,590,878,160.05

147,126,562,970.82

Equipment productandintegrated

channel services
Total

48. Taxes and surcharge√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

302,029,468.26

City maintenance and construction tax

295/366

Amount for the previous period

222,160,876.09

Haier Smart Home Co., Ltd. 2021 Annual Report

Education surcharge

216,731,035.53

158,108,924.81

Property tax

58,844,071.60

56,952,660.77

Land use tax

16,126,888.33

16,516,606.32

Stamp duty

176,130,521.55

159,658,266.08

Others37,116,605.29

47,205,290.60

806,978,590.56

660,602,624.67

Total

49. Selling expenses√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

Selling expenses
Total

Amount for the previous period

36,553,667,004.06

33,641,711,147.72

36,553,667,004.06

33,641,711,147.72

The Company’s selling expenses are mainly salary expenses, transportation and storage fees,
advertising and promotion fees, and after-sales expenses.
50. Administrative expenses√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

Administrative expenses
Total

Amount for the previous period

10,444,475,658.24

10,052,645,415.72

10,444,475,658.24

10,052,645,415.72

The Company’s administrative expenses are mainly salary expenses, office fees, depreciation andamortization of assets fees, etc.
51. R&D expenses√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Amount for the current period

R&D expenses
Total

Amount for the previous period

8,357,332,946.25

6,852,861,422.32

8,357,332,946.25

6,852,861,422.32

The Company's R&D expenses are mainly salary expenses, R&D equipment expenses,
inspection and testing fees.
52. Financial expenses

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Haier Smart Home Co., Ltd. 2021 Annual Report

Items

Amount for the current period

Amount for the previous period

Interest expense

712,448,120.18

1,327,091,393.08

Less: interest income

564,584,788.99

486,204,314.18

Less: cash discount

163,118,260.27

143,826,274.59

Exchange gains and losses

577,459,958.22

385,010,384.45

Others124,159,947.90

114,128,146.46

686,364,977.04

1,196,199,335.22

Total

Interest expenditure in lease liabilities in the current period is RMB113,089,361.42.
53. Other income√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

Amount for the previous period

Government grants related to revenue

874,974,469.27

1,081,735,842.10

Government grants related to assets

82,525,988.76

69,112,340.28

Total

957,500,458.03

1,150,848,182.38

54. Investment income (losses are represented by ‘-’)Items

Amount for the current period

Amount for the previous period

Long-term equity investments income calculated by the equity

1,886,217,552.85

1,619,755,825.37

5,189,653.78

2,261,114,345.13

58,558,795.05

21,366,723.72

60,011,933.94

88,139,276.75

393,124,704.67

69,728,041.81

2,403,102,640.29

4,060,104,212.78

methodInvestment income from disposal of long-term equity
investments
Investment income from other equity instrument investments
during holding period
Income from wealth management products
Investment income from disposal of financial assets measured
at fair value with changes included in current profit and loss
Total

55. Gains on changes in fair value (losses are represented by ‘-’)297/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Items

Amount for the current period

Amount for the previous period

Change in fair value of forward foreign exchange contracts

53,963,469.20

40,882,087.10

Change in fair value of equity instrument investments

46,729,587.36

3,507,512.50

Others

18,584,567.29

18,240,148.20

119,277,623.85

62,629,747.80

Total

56. Credit impairment loss
√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

Amount for the previous period

Bad debts losses on bills receivable-55,738,551.40

3,700,000.00

Bad debts losses on accounts receivable-464,561,364.02-170,080,605.76-520,299,915.42-166,380,605.76

Total

57. Impairment loss on assets (losses are represented by ‘-’)Amount for the previous
Items

Amount for the current period
periodImpairment losses on inventory-1,057,658,740.03-1,014,527,325.32-325,647,466.98-230,024,566.63-4,624,930.91-413,079.67-372,747.55-837,735.85-29,631,196.82-46,077,744.47-818,536.53-43,750,000.00-1,418,753,618.82-1,335,630,451.94

Impairment losses on other current assets
Impairment losses on fixed assets
Impairment losses on construction in progress
Impairment losses on intangible assets
Impairment losses on long-term equity investment
Total

58. Gains on disposal of assets (losses are represented by ‘-’)Items

Amount for the current period

Amount for the previous period

Gains on disposal of non-current assets

127,727,521.31

33,997,251.62

Less: losses on disposal of non-current assets

16,743,801.27

46,804,842.58

110,983,720.04-12,807,590.96

Total

59. Non-operating income√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period

298/366

Amount for the previous period

Haier Smart Home Co., Ltd. 2021 Annual Report

Total gains on disposal of non-current assets

1,546,396.81

13,544,653.33

Quality claims and fines

37,375,030.81

43,211,550.06

Others159,871,917.83

141,189,269.00

198,793,345.45

197,945,472.39

Total

60. Non-operating expenses√Applicable□ Not Applicable
Unit and Currency: RMB
Amount for the previous

Items

Amount for the current period
periodTotal losses on disposal of non-current assets

22,276,231.85

112,009,363.05

Others136,964,547.59

129,908,824.86

159,240,779.44

241,918,187.91

Total

61. Income tax expenses（1）Statement of income tax expenses
Items

Amount for the current period

Amount for the previous period

Current income tax expense

2,500,983,850.06

2,116,781,342.14

Deferred income tax expense

197,979,520.49

116,345,162.88

Total

2,698,963,370.55

2,233,126,505.02（2）Reconciliation between accounting profit and income tax expenses for the current period
Items

Amounts

Total accounting profit

15,916,030,549.06

Income tax expense calculated pursuant to statutory tax rate

3,979,007,637.26

Impact from different tax rates applicable to subsidiaries-494,977,318.87

Impact from adjustment to income tax in prior periods-354,744,458.06

Impact from non-taxable income-534,225,422.28

Impact from non-deductible cost, expense and loss

270,381,075.17

Impact from deductible provisional differences or deductible losses of unrecognized deferred tax-166,478,142.67

Total income tax expense

2,698,963,370.55

62. Other comprehensive income√Applicable□ Not Applicable

Please refer to notes VII.44 for details.
63. Other cash received from operating activities

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Haier Smart Home Co., Ltd. 2021 Annual Report√Applicable□ Not Applicable
Unit and Currency: RMB

Amount for the current period

Items

Deposits and securities

185,423,029.27

Government grants

964,636,149.19

Non-operating income excluding government
96,076,482.19

grantsInterest income

566,384,075.56

Others

68,894,785.87

Total

1,881,414,522.08

64. Other cash paid to operating activities√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Amount for the current period

Cash paid on selling expenses

17,323,147,912.48

Cash paid on administrative and R&D expenses

7,305,126,302.31

Cash paid on financial expenses

135,730,144.52

Non-operating expenses

43,959,971.99

Others

19,226,598.86
24,827,190,930.16

Total

65. Other cash paid to investing activities√Applicable□ Not Applicable
Unit and Currency: RMB

Amount for the current period

Items

Disposal of subsidiary

219,042,645.55

Others250,000.00

Total

219,292,645.55

66. Other cash received from financing activities√Applicable□ Not Applicable
Unit and Currency: RMB

Amount for the current period

Items

Others

1,091,077.43

Total

1,091,077.43

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Haier Smart Home Co., Ltd. 2021 Annual Report

67. Other cash paid to financing activities√Applicable□ Not Applicable
Unit and Currency: RMB
Items

Amount for the current period

Cash paid to lease

769,383,299.55

Repurchase of shares

3,221,079,401.36

Expenses from issuance of H-shares

176,588,472.20

Others417,700.00

Total

4,167,468,873.11

68. Net profit adjusted to cash flow of operating activities
Net profit adjusted to cash flow of operating

Amount for the previous
Amount for the current period

activities

period

1. Net profit

13,217,067,178.51

11,329,152,124.25

Add: impairment provision for assets

1,939,053,534.24

1,502,011,057.70

Depreciation of fixed assets

3,897,853,175.59

3,954,878,769.18

Amortization of intangible assets

905,927,384.86

950,566,688.96

Amortization of long-term prepaid expenses

257,517,133.91

189,323,872.70-90,253,885.00

111,272,300.68-119,277,623.85-62,629,747.80

Financial expenses (‘-’ represents ‘gains’)

1,289,908,078.40

1,712,106,376.89

Loss on investments (‘-’ represents ‘gains’)-2,403,102,640.29-4,060,104,212.78

115,721,268.20-495,054,794.76

82,258,252.29

611,399,957.64-11,473,856,375.59-3,118,305,579.15

5,027,066,051.66-5,382,355,896.89

10,123,490,037.44

9,956,434,869.15

360,268,847.35

410,818,045.87

23,129,640,417.72

17,609,513,831.64

Losses on disposal of fixed assets, intangible assets andother long-term assets (‘-’ represents ‘gains’)
Loss and gains on change of fair value (‘-’ represents‘gains’)Decrease in deferred income tax assets (‘-’ represents‘increase’)Increase of deferred income tax liabilities (‘-’
represents ‘decrease’)Decrease in inventories (‘-’ represents ‘increase’)Decrease of operational account receivables (‘-’
represents ‘increase’)Increase of operational account payables (‘-’ represents‘decrease’)
OthersNet cash flow generated from operational activities

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Haier Smart Home Co., Ltd. 2021 Annual Report

2. Significant investment and financing activities not
involving cash inflows and outflows:
Capital transferred from debts

6,368,251,389.85

Convertible corporate bonds due within one year
Fixed assets under finance lease
3. Net changes of cash and cash equivalents:
Cash balance at the end of the period

44,957,500,783.10

45,641,535,671.08

Less: cash balance at the beginning of the period

45,641,535,671.08

34,968,473,831.66-684,034,887.98

10,673,061,839.42

Add: cash equivalents balance at the end of the period
Less: cash equivalents balance at the beginning of theperiodNet increase of cash and cash equivalents

69. Cash and cash equivalents
Items

Closing balance

I. Cash

44,957,500,783.10

45,641,535,671.08

3,085,964.28

2,257,666.98

44,771,536,799.60

45,312,481,450.19

182,878,019.22

326,796,553.91

44,957,500,783.10

45,641,535,671.08

Including: Cash on handBank deposits always available for payment

Opening balance

Other monetary funds always available for payment
II. Cash equivalents
Including: bond investments due within three months
III. Closing balance of cash and cash equivalents

70. Monetary items in foreign currency
Closing balance

Opening balance
Balance in

Items

Balance in

Exchange

Exchange
Balance in RMB

foreign currency

foreignrate

Balance in RMB
rate

currency

Monetary funds
USD

850,630,647.69

6.3757

5,423,365,820.48

924,028,432.95

6.52496,029,193,122.15

EUR

149,225,110.60

7.2197

1,077,360,530.99

196,320,365.21

8.02501,575,470,930.80

JPY

10,520,503,841.74

0.055415

582,993,720.39

6,477,692,063.70

0.063236

409,623,335.34

HKD

483,444,582.35

0.8176395,264,290.53

834,174,659.07

0.8416702,041,393.07

Others2,955,290,563.22

3,237,415,723.48

Subtotal

10,434,274,925.61

11,953,744,504.84

Accounts receivables

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Haier Smart Home Co., Ltd. 2021 Annual Report

USD

721,343,093.77

6.37574,599,067,162.94

670,644,124.35

6.52494,375,885,846.99

EUR

413,528,990.85

7.21972,985,555,255.25

416,947,689.18

8.02503,346,005,205.68

JPY

4,064,574,659.93

0.055415

225,238,404.78

2,804,117,973.94

0.063236

177,321,204.20

Others3,668,237,038.46

3,303,192,557.86

Subtotal

11,478,097,861.43

11,202,404,814.73

Short-term borrowings
USD

347,844,969.69

6.37572,217,755,173.25

338,394,354.56

6.52492,207,989,324.04

EUR

883,863,602.21

7.2197

6,381,230,048.85

365,208,045.49

8.02502,930,794,565.08

JPY

623,360,869.80

0.055415

34,543,542.60

559,047,191.47

0.063236

35,351,908.20

HKD

2,600,000,000.00

0.81762,125,760,000.00

2,601,626,661.87

0.84162,189,528,998.63

Others328,850,057.11

17,716,918.41

Subtotal

11,088,138,821.81

7,381,381,714.36

Accounts payables
USD

2,033,952,669.54

6.3757

12,967,872,035.21

1,686,174,380.87

6.524911,002,119,217.74

EUR

640,851,532.98

7.2197

4,626,755,812.65

509,699,528.76

8.02504,090,338,718.32

JPY

8,161,874,338.90

0.055415

452,290,266.49

5,948,544,811.66

0.063236

376,162,179.71

NZD

151,371,298.46

4.3553659,267,416.20

184,521,657.35

4.7050868,174,397.82

Others3,268,885,987.84

2,331,300,734.45

Subtotal

21,975,071,518.39

18,668,095,248.04

Non-current liabilities due in one year
USD

757,148,488.12

6.3757

4,827,351,615.72

460,056,675.99

6.52493,001,823,805.15

EUR

214,053,730.55

7.2197

1,545,403,718.47

362,785,908.96

8.02502,911,356,919.41

JPY

3,705,244,389.61

0.055415

205,326,117.85

409,229,611.46

0.063236

25,878,043.71

RUB

651,073,870.06

0.085555,666,815.89

172,776,559.98

0.087700

15,152,504.31

Others1,589,397,292.33

347,591,362.24

Subtotal

8,223,145,560.26

6,301,802,634.82

Long-term borrowings
USD

403,838,717.50

6.37572,574,754,511.17

1,338,974,588.19

6.52498,736,675,290.47

EUR

37,498,911.17

7.2197

270,730,888.98

143,342,874.40

8.02501,150,326,567.02

RUB

186,061,000.00

0.0855

15,908,215.50

500,000,000.00

0.087700

43,850,000.00

319,947,612.96

4.70501,505,353,518.98

5,861,628,375.61

0.063236

370,665,931.96

NZD
JPY

3,197,333,012.36

0.055415

177,180,208.88

OthersSubtotal

14,544,951.38
3,038,573,824.53

303/366

11,821,416,259.81

Haier Smart Home Co., Ltd. 2021 Annual Report

VIII. CHANGES OF CONSOLIDATION SCOPE
1. Business combination not under common control□ Application√

Not application

2. Business combination under common control√Applicable□ Not Applicable（1）Business combination under common control occurring in the current period
The

The basis for the

proportion oftransaction ofequityconstituting

Combinati

acquired inbusinesson datethe businesscombination under

combinationcommon control

Recognition
Name of thebasis ofacquireecombination date

Qingdao

Haier

Subject

Controlled by Haier

Quality青岛 100.00%
海尔质量检测有限公司)
Inspection Co., Ltd. (Group

Corporation

beforeandafter

related2021.12equityrightandobligationtransferred to the

combination

Company(Continued)

Name of the acquiree

QingdaoHaier

The income of the

Net profit of the

The income of

Net profit ofacquiree from theacquiree from thethe acquiree

the acquiree

beginning of the

beginning of theduring theduring thecurrent period tocurrent period tocomparison

comparison

combination datecombination dateperiodperiod84,673,565.56-1,015,618.64

76,623,721.00

6,535,846.97

Quality青岛海尔质量检测有限公司)（2）Combination cost
Inspection Co., Ltd. (Combination cost------Cash------Equity

Qingdao Haier Quality Inspection
Co., Ltd. (青岛海尔质量检测有限公 36,300,000.00

司)（3）Acquiree’s assets and liabilities

304/366

N/A

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier Quality Inspection Co., Ltd. (质量检测有限公司)

Items

Combination date青岛海尔End of the previous
periodMonetary funds

9,910,049.02

Accounts receivables

6,403,032.60
3,861,071.67

Other current assets

715,080.00

968,380.80

Fixed assets

15,433,189.54

16,285,519.18

Construction in progress

10,288,776.92

13,292,647.30

Intangible assets

1,976,261.74

278,248.13

335,191.20

612,135.38

Less: Accounts payables-14,422,407.78-16,144,531.42

Payables for staff’s remuneration-3,921,004.81-2,936,144.37-127,667.15-1,417,271.95

20,187,468.68

21,203,087.32

Long-term amortized expenses

Taxes payable
Net assets
3.Disposal of subsidiary

Whether single disposal of investment in subsidiary will result in losing control power:
Wuhan Haier Energy and Power Co.,
Items
Ltd. (

武汉海尔能源动力有限公司)

Equity disposal price

15,315,825.00

Proportion of equity disposal

75%

Method of equity disposal

DisposalTime of loss-of-control

2021.12Basis for determination the time of lossof- control

Transfer

Difference between consideration and its
share of net assets of the subsidiary as
respect to the disposal in the consolidated

2,195,693.03

level
4. Changes of consolidation scope due to other reasons(1) Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary Tianjin Yilian Ecological Technology Co., Ltd. for the current period.

(2) Shanghai Haier Medical Technology Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary Jiangxi Haier Medical Technology Co., Ltd. for the current period.

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Haier Smart Home Co., Ltd. 2021 Annual Report(3) Qingdao Haier Intelligent Home Appliance Technology Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary Qingdao Haizhi Shenlan Technology Co., Ltd. for the current
period.

(4) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary Qingdao Haishengze Technology Co., Ltd. for the current period.

(5) Qingdao Haizhi Investment Management Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary Qingdao Hailvyuan Recycling Technology Co., Ltd. for the current period.

(6) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Qingdao Haier HVAC Equipment Co., Ltd. (公司) for the period.

青岛海尔暖通空调设备有限(7) Qingdao Weixi Smart Technology Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary, Zhejiang Weixi IoT Technology Co., Ltd. (浙江卫玺物联科技有限公司)forthe period.

(8) Qingdao Haier Air Conditioner General Corp., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Qingdao Haixianghui Technology Co., Ltd. (青岛海享汇科技有限公司)forthe period.

(9) Chongqing Haier Electronics Sales Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary, Haier Smart Home (Xiongan, Hebei) Technology Co., Ltd. (（河北雄安）有限公司) for the period.

海尔智家科技(10) The Company established a wholly-owned subsidiary, Qingdao Ruibo Ecological
Environmental Technology Co., Ltd. (青岛瑞博生态环保科技有限公司)for the period.

(11) Haier Smart Home Experience Cloud Ecological Technology Co., Ltd., a subsidiary of theCompany, established a wholly-owned subsidiary, Qingdao Sanyiniao Technology Co., Ltd. (鸟科技有限公司) for the period.

(12) Qingdao Ruibo Ecological Environmental Technology Co., Ltd. (青岛三翼青岛瑞博生态环保科技有限公司), a subsidiary of the Company, established a wholly-owned subsidiary, Qingdao Jingzhi Recycle
Environmental Technology Co., Ltd. (青岛鲸智再生环保科技有限公司) for the period.

306/366

Haier Smart Home Co., Ltd. 2021 Annual Report(13) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Qingdao Yunshang Jieshen Yilian Technology Co., Ltd. (联科技有限公司) for the period.

青岛云裳洁神衣(14) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Shanghai Yunshang Yuyi IoT Technology Co., Ltd. (技有限公司) for the period.

上海云裳羽衣物联科

(15) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Shijiazhuang Yunshang Yilian Technology Co., Ltd. (技有限公司) for the period.

石家庄云裳衣联科(16) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Nanjing Yunshang Yilian Technology Co., Ltd. (公司) for the period.

南京云裳衣联科技有限(17) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Yunshang Zhonglian Technology (Shanghai) Co., Ltd. (海）有限公司) for the period.

云裳众联科技（上(18) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Shanxi Yunshang Yilian Technology Co., Ltd. (司) for the period.

山西云裳衣联科技有限公(19) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Tianjin Yunshang Yilian Technology Co., Ltd. (公司) for the period.

天津云裳衣联网科技有限(20) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Chongqing Yunshang Haihong Yilian Technology Co., Ltd. (宏衣联科技有限公司) for the period.

重庆云裳海(21) Qingdao Haier Air Conditioner General Corp., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Qingdao Haixiangmian Technology Co., Ltd. (for the period.

307/366

青岛海享眠科技有限公司)

Haier Smart Home Co., Ltd. 2021 Annual Report(22) Qingdao Haier Smart Kitchen Appliance Co., Ltd., a subsidiary of the Company, establisheda wholly-owned subsidiary, Qingdao Haier Kitchen IoT Technology Co., Ltd. (技有限公司) for the period.

青岛海尔厨联网物联科(23) Shanghai Haier Medical Technology Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary, Tibet Haifeng Intelligent Innovation Technology Co., Ltd. (新科技有限公司) for the period.

西藏海峰智能创(24) The Company established a wholly-owned subsidiary Qingdao Haier Home AI Industry
Innovation Center Co., Ltd. (青岛海尔家庭人工智能产业创新中心有限公司) for the period.

(25) Haier America Company, LLC, a subsidiary of the Company was deregistered for the period.

IX.

INTERESTS IN OTHER ENTITIES

1.

Interests in subsidiaries(1) Composition of the Group

Name of subsidiary

Principal

Place ofplace ofregistratio

Shareholding (%)
Nature of businessvotingDirectbusiness% ofnMethodIndirectright (%)

Group company,
which mainly
engage ininvestment holding,Mainland
Flourishing Reach Limited

Establishm
Bermudathe production and

100.00100.00of Chinaent
sale of washingmachines and water
heaters, distribution
service
Group company,

MainlandHaier Electronics Group

which mainlyof China

engage in
BermudaCo., Ltd.

Establishm
100.00and Hong

investment holding,Kong

the production andsale of water

308/366

100.00ent

Haier Smart Home Co., Ltd. 2021 Annual Reportequipment,
distribution service
Group company,
which mainly
Haier U.S. Appliance

the United

the Unitedengage in home

Establishm
100.00

Solutions, Inc.

StatesStates100.00appliancesent

production anddistribution businessSingapore

Group company,

Businesswhich mainly

combinati

Haier Singapore
and other
Investment Holding Co.,

engage in homeon underSingapore

100.00100.00overseasappliances

commonareas

production andcontrolLtd.
distribution business
New

New

Group company,

Business

Zealand

Zealandwhich mainly

combinati

Haier New Zealandengage in homeon underInvestment Holding

100.00100.00appliances

commonproduction andcontrolCompany Limited
distribution businessGroup company,

Businesswhich mainly

combinati

engage in home
Candy S.p.A

Europeon notItaly

100.00100.00appliances

under

production andcommondistribution business

control

Qingdao

QingdaoBusiness

High-tech

High-tech

Manufacture and

Zone

Zone

sale of household

Qingdao Haier Air
combinati

Conditioner Gen Corp.,
100.00100.00on underLtd.
air-conditioners

commoncontrol

Guizhou Haier Electronics

Huichuan

HuichuanDistrict,

District,

Business
combinati
Manufacture andCo., Ltd.

Zunyi City,

Zunyi City,

59.00

59.00

on undersale of refrigerator
Guizhou

Guizhou

commonProvince

Province

control

309/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Hefei Haier

Hefei Haier

Industrial

Industrial

Park

Park

Business
Manufacture andcombinati

Hefei Haier Airsale of air-

99.22

99.22

on underconditioning Co., Limited
conditioners

commoncontrolWuhan Haier Electronics
Holding Co., Ltd.

Wuhan

Wuhan

Business

Haier

Haier

Industrial

Industrial

sale of air-

Park

Park

conditioners

Manufacture andcombinati
60.00

60.00

on undercommoncontrol

Qingdao

QingdaoDevelopme

Developme

nt Zonent ZoneBusiness

Qingdao Haier AirManufacture andcombinati

Conditioner Electronics
sale of air-100.00100.00on underCo., Ltd.
conditioners

commoncontrol

Qingdao

QingdaoHigh-tech

High-techBusiness

Qingdao Haier
Information Plastic

combinati
Manufacturing of

Zone

Zone

Development Co., Ltd.

100.00100.00on underplastic products
commoncontrol

Dalian Haier Precision
Products Co., Ltd.

DalianDalianBusiness

ExportExportManufacture andExpressing

Expressing

sale of precise

Zone

Zone

combinati
90.00

90.00

plastics

on undercommoncontrolHefei Haier Plastic Co.,

Hefei

Hefei

Business

Economic

Economic

combinati&&

on underManufacture andLtd.

Technologi

Technologi

77.36

4.83

82.19

commonsale of plastic parts

Qingdao Meier Plastic
Powder Co., Ltd.

cal

cal

control

Developme

Developme

nt Areant Area

Qingdao

Qingdao

Manufacture ofBusiness

Developme

Developme

plastic powder,

combinati

nt Zonent Zoneplastic sheet and

40.00

60.00

100.00on underhigh-performancecommoncoatings

control

310/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Jiangbei

JiangbeiBusiness
Plastic products,

Chongqing Haier Precision

District,

District,

combinatio
sheet metal work,

Plastic Co., Ltd.

Chongqing

Chongqing

90.00

10.00

100.00n under

electronics and
City

City

commonhardwarecontrol

Qingdao

Qingdao

Manufacture andHigh-tech

High-techproduction of

Qingdao Haier Refrigerator
Co., Ltd.

Establishm
100.00

Zone

Zone

100.00fluorine-freeentrefrigerators
PingduPingduDevelopme

Developme

Qingdao Haier Refrigerator
Manufacture of(International) Co., Ltd.

Qingdao Household
Appliance Technology andEstablishm
100.00nt Zone,nt Zone,Qingdao

Qingdao

Qingdao

Qingdao

Research andHigh-tech

High-techdevelopment of

Zone

Zone

home appliances

100.00refrigerators

ent

Establishm
ent
100.00Equipment Researchmold andInstitutetechnological

100.00equipment
Qingdao

Qingdao

Research,

High-tech

High-techdevelopment and

Zone

Zone

sales of health-

Qingdao Haier Whole Set
Establishm

Home Appliance Service
98.33

98.33

ent

100.00100.00Establishm

Co., Ltd.
related small home
appliance
Qingdao Haier Special

Qingdao

Qingdao

Manufacture andRefrigerator Co., Ltd.

Developme

Developme

sales of fluorine-freent Zonent Zonerefrigerators

Qingdao Haier Dishwasher

Qingdao

Qingdao

Manufacture of dishCo., Ltd.

Developme

Developme

washing machine

nt Zonent Zoneand gas stove

Qingdao

Qingdao

Research,

Developme

Developme

manufacture andnt Zonent Zonesales of freezer and

Qingdao Haier Special
Freezer Co., Ltd.

ent

100.00100.00Establishm
ent

Establishm
100.00100.00

ent

90.00

90.00

Establishm

other refrigeration
products
Dalian Haier Air-

DalianDalianAir conditioner

conditioning Co., Ltd.

ExportExportprocessing andmanufacturing311/366

entHaier Smart Home Co., Ltd. 2021 Annual Report

Expressing

Expressing

Zone

Zone

DalianDalianExportExportDalian Haier Refrigerator

Refrigerator

Co., Ltd.

Establishm
processing andExpressing

100.00100.00

Expressing

ent
manufacturing

Qingdao Haier Electronic
Plastic Co., Ltd.

Zone

Zone

Qingdao

QingdaoDevelopment,

Developme

Developme

assembling and sales

nt Zonent Zoneof plastics,

Establishm
100.00100.00ent

electronics andproducts
Wuhan

Wuhan

Economic

Economic&&

Establishm
ent
Research,

Technologi

Technologi

cal

cal

Developme

Developme

nt Zonent ZoneHigh-tech

High-tech

Industrial

Industrial

Park

Park

Qingdao Haidarui

Qingdao

QingdaoDevelop, purchase

Procurement Service Co.,

High-tech

High-techand sell electricalmanufacture andWuhan Haier Freezer Co.,

sales of freezer and
Ltd

95.00

5.00

100.00

98.00

2.00

100.00other refrigeration
products

Ltd.

Zone

Zone

Establishm

products andent

components
Qingdao

QingdaoDevelopment andHigh-tech

High-techapplication of home

Establishm

Zone

Zone

appliances,ent

Qingdao Haier Intelligent
Home Appliancecommunication,

98.91

1.09

100.00

76.92

23.08

100.00Technology Co., Ltd.
electronics andnetwork engineering
technology
Jiangbei

JiangbeiDistrict,

District,

Manufacture andChongqing Haier Air-

Establishm
sales of air

conditioning Co., Ltd.

Chongqing

Chongqingent
conditioners

City

City

312/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qianwang

Qianwang

Development andang Road,

ang Road,manufacture of

JiaonanJiaonanprecise plastic, metal

Establishm

Qingdao Haier Precision
ent

Products Co., Ltd.
City

City

70.00

70.00

100.00100.00plate, mold andelectronic products
for home appliances

Qingdao Haier Air

JiaonanJiaonanConditioning Equipment

City,

City,

Manufacture of
Establishm
home appliances andCo., Ltd.

Qingdao

Qingdaoent
electronics

Dalian Free Trade Zone

DalianDalianHaier Air-conditioning

ExportExportEstablishm
Domestic trade

Trading Co., Ltd.

Expressing

Expressing

Zone

Zone

Dalian Free Trade Zone

DalianDalianHaier Refrigerator Trading

ExportExport100.00ent

Establishm
Domestic tradeCo., Ltd.

Expressing

Expressing

Zone

Zone

Jiangbei

JiangbeiDistrict,

District,100.00100.00100.00ent

Chongqing Haier
Sales of homeElectronics Sales Co., Ltd.

Establishm
95.00

Chongqing

Chongqing

City

City

Chongqing Haier

Jiangbei

JiangbeiRefrigeration Appliance

District,

District,

5.00

100.00appliances

ent

Processing andEstablishm
manufacturing ofCo., Ltd.

Chongqing

84.95

15.05

100.00Chongqingent
refrigerator

City

City

Hefei Haier

Hefei Haier

Processing andIndustrial

Industrial

manufacturing of

Park

Park

Qingdao Haier HVAC

Qingdao

QingdaoEngineering Co., Ltd.

Developme

Developme

Haier Refrigerator Co., Ltd.
100.00100.00refrigerator

Establishm
ent

Air-conditioning
100.00100.00Establishm

engineernt Zonent ZoneChongqing Goodaymart

Jiangbei

JiangbeiElectric Appliance Sale

District,

District,ent
Sales of home
Establishm
appliances andCo., Ltd.

Chongqing

Chongqing

51.00
ent

electronics
City

51.00

City

313/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier (Jiaozhou)
Air-conditioning Co.,
LimitedJiaozhouJiaozhou

Manufacture and

City,

City,

sale of air-

Qingdao

Qingdaoconditioners

JiaozhouJiaozhou

Manufacture and

City,

City,

sales of plastic and100.00100.00Establishm
ent

Qingdao Haier Component
Establishm

Co., Ltd.

100.00
Qingdao

Qingdao100.00precise sheet metalent

products
Haier Shareholdings (Hong
Hong Kong

Hong Kong

Investment

100.00100.00EstablishmKong) Limited
ent
CaymanCaymanIslands

Islands

Harvest International
Investment

100.00100.00Establishm

Company
ent
Shenbei

Shenbei

New Area,

New Area,

Shenyang Haier
Manufacture andRefrigerator Co., Ltd.

Establishm
100.00100.00
Shenyang

Shenyang

City

City S

Foshan Haier Freezer Co.,

SanshuiSanshuiLtd.

District,

District,

sales of refrigerator

ent

Manufacture and100.00100.00Establishm

sales of refrigerator

Zhengzhou Haier Air-

Foshan City

Foshan City

Zhengzhou

Zhengzhou

Economic

Economic

and

and

ent

Establishm
ent
Manufacture andconditioning Co., Ltd.

Technologi

Technologi

100.00100.00100.00100.00sales of freezer
cal

cal

Developme

Developme

nt Zonent ZoneQingdao Haidayuan

Qingdao

QingdaoDevelop, purchase

Procurement Service Co.,

Developme

Developme

and sell electricalLtd.

nt Zonent ZoneEstablishm

products andent

components
Qingdao Haier Intelligent

Qingdao

QingdaoTechnology Development

High-tech

High-techDevelopment andEstablishm
research of homeCo., Ltd.

Zone

100.00100.00Zone

entappliance products

Qingdao Hairi Hi-Tech

Qingdao

Qingdao

Design, manufacture

Model Co., Ltd.

High-tech

High-techand sales of product

Zone

Zone

model and mould314/366

Business
100.00100.00combinatio
n underHaier Smart Home Co., Ltd. 2021 Annual Reportcommoncontrol

Qingdao Hai Gao Design

Qingdao

QingdaoHigh-tech

High-techBusiness
combinatio
Industrial design andand Manufacture Co., Ltd.

Zone

Zone

75.00

75.00

n under

prototype productioncommoncontrolBeijing

Beijing

Business

Beijing Haier Guangke

Development,

Digital Technology Co.,

promotion andLtd.

transfer of

combinatio
55.00

55.00

n undercommontechnology
control
Shanghai Haier Medical

Shanghai

Shanghai
Wholesale and retailTechnology Co., Ltd.

80.93

80.93

Establishmof medical facility
ent
Qingdao

QingdaoBusiness

Qingdao Haier Technology

Development andCo., Ltd.

sales of software andcombinatio
100.00100.00information productn undercommoncontrol

Qingdao Haier Technology

Qingdao

Qingdao

Investment Co., Ltd.

Entrepreneurshipinvestment and100.00100.00consulting
Qingdao Casarte Smart

Qingdao

Qingdao

Living Appliances Co., Ltd.

ent

Development,
production and sales

100.00100.00of appliances
Qingdao Haichuangyuan

Qingdao

Qingdao

Appliances Sales Co., Ltd.

Sales of home
100.00100.00digital products
Qingdao

Establishm
entappliances and

Qingdao

Establishm

Establishm
ent

Sales of home

Haier Overseas Electric
appliances,
Appliance Co., Ltd.

Establishm
100.00100.00international freightent

forwarding
DalianDalianSales of home

Businessappliances,combinatio

Haier Group (Dalian)
Electrical Appliancesinternational freight100.00100.00n underIndustry Co., Ltd.
forwarding

commoncontrol

315/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao

Qingdao

Production and sales

Qingdao Haier Central Airof air andEstablishm

Conditioning Co., Ltd.

100.00100.00refrigerationentequipment
Chongqing Haier Home

Hefei

Hefei

Appliance Sale Hefei Co.,

Sales of home

Establishm
100.00Ltd.

Qingdao Weixi Smart

100.00appliances

Qingdao

ent

QingdaoIntelligent sanitaryTechnology Co., Ltd.

71.43

71.43

Establishm

ware
ent
Haier U+smart Intelligent

Beijing

Beijing

Technology (Beijing) Co.,

SoftwareEstablishm
100.00Ltd.

Haier (Shanghai)

100.00development

Shanghai

ShanghaiElectronics Co., Ltd.

ent

Sales, research anddevelopment of

100.00100.00home appliances
Shanghai Haier Zhongzhi

Shanghai

Shanghai

Fang Chuang Ke

ent

Businessmanagement

Establishm
100.00Management Co., Ltd.

Establishm

100.00consulting, chuangke

entmanagement
Qingdao Haier Smart

Qingdao

Qingdao
Production and sales

Kitchen Appliance Co.,

Establishmof kitchen smart

100.00100.00Ltd.

enthome appliances

GE Appliance (Shanghai)

Shanghai

Shanghai
Sales of homeCo., Ltd.

100.00100.00Establishm

appliances
ent
Qingdao Haier Special

Qingdao

QingdaoRefrigerating Appliance

Production and sales

Establishm
100.00Co., Ltd.

Beijing Zero Micro
Technology Co., Ltd.

100.00of home appliances

Beijing

Beijingent

Promotion oftechnologicaldevelopment316/366

55.00

55.00

Establishm
entHaier Smart Home Co., Ltd. 2021 Annual Report

Laiyang Haier Smart

Laiyang

Laiyang

Kitchen Appliance Co.,

Production andsales of home

Establishm
100.00Ltd.

Hefei Haier Air

100.00appliances

Hefei

Hefei

Conditioning Electronics

ent

Production andsales of home

Establishm
100.00Co., Ltd.

100.00appliancesent

Appliance Research andResearch andEstablishm

Development Center Co.,development ofLtd.

home appliances

Haier (Shanghai) Home

Shanghai

Shenzhen

Shanghai

Shenzhen

100.00100.00ent

Development,

Haier (Shenzhen) R&D

research andCo., Ltd.

technical services ofEstablishm
100.00100.00100.00100.00ent

household andcommercial electrical
Guangdong

Guangdong

Manufacturing of

Guangzhou Haier Air
refrigeration and air
Conditioner Co., Ltd.

Establishm

conditioningent

equipment
Qingdao Yunshang Yuyi

Qingdao

Qingdao

IOT Technology Co., Ltd.

IoT technology
research and

70.00

70.00

development
Qingdao Haizhi Investment

Qingdao

Establishm
ent

Qingdao
Asset management,

Management Co., Ltd.

100.00100.00Establishm

equity investment
ent
Qingdao Jijia Cloud

Qingdao

QingdaoIntelligent Technology Co.,

R&D and sales ofEstablishm
80.00

Ltd.

Qingdao Haimeihui
Management Consulting
Co., Ltd.(青岛海美汇管理

80.00

lighting appliances

Qingdao

ent

Qingdao
Leasing and business

Establishm
100.00services咨询有限公司)317/366

100.00ent

Haier Smart Home Co., Ltd. 2021 Annual Report

Wuxi Yunshang Internet of

Wuxi

Wuxi

Clothing Technology Co.,Internet of Things

Establishm
100.00Ltd.(无锡云裳衣联网科技

100.00technology R & D

ent

有限公司)

Qingdao Guochuang

Qingdao

QingdaoIntelligent Household

Establishm
Scientific research

Appliance ResearchInstitute Co., Ltd. (青岛国

ent
37.75

37.75

52.58

52.58

and technical service

创智能家电研究院有限公司)

Hangzhou Gandao

HangzhouHangzhouIntelligent Technology Co.,

Technology

Ltd. (杭州甘道智能科技

Establishm

development, service

ent

有限公司)

Qingdao Haidacheng

Qingdao

Qingdao

Procurement Service Co.,

Develop, purchaseand sell electrical

Establishm
100.00Ltd.

100.00products andent

components
Business
Guangdong Heilong
Guangzhou

Guangzhou

Scientific researchcombinatio

Intelligent Technology Co.
and technology

Ltd (广东黑龙智能科技有76.72

service sector

限公司)

Beijing Haixianghui

76.72

n not undercommoncontrolBeijing

Beijing

Scientific research
Establishm

Technology Co., Ltd.(北京and technology

海享汇科技有限公司)

service sector

100.00100.00ent

QingdaoElectronic equipment

Business

Qingdao Hairuijiejingtechnology research,combinatio

Electronics Co., Ltd.(青岛development,

海瑞洁净电子有限公司)

transfer, consulting

commonand services

control

Qingdao

Qingdao

Qingdao

51.00

51.00

n not underTechnology

Haier Smart Home
development of

Establishm

Experience Cloudsmart homeCo., Ltd.(海尔智家体验云生态科技有限公司)

ent
100.00Ecological Technology
products, wholefurniture
customization, etc.

318/366

100.00

Haier Smart Home Co., Ltd. 2021 Annual Report

Haier Smart Home

Qingdao

Qingdao(Qingdao) Network Co.,

Technical services,development,

Establishm
100.00Ltd.(海尔智家（青岛）网

consulting, transfer,

络有限公司)

etc.
Qingdao

Qingdao100.00ent

Residential interior
decoration,

Establishm

professional

ent

Haier Smart Home
construction(Qingdao) Network
operation, special

Operation Co., Ltd.(海尔智100.00100.00equipment

家（青岛）网络运营有限installation,

公司)

upgrading and repair,etc.

Qingdao

Qingdao

Urban distribution
and transportation

Establishm

services, import and

ent

Qingdao Internet of Wine
Technology Co., Ltd. (青岛export of goods,

酒联网物联科技有限公100.00100.00technology import司)and export and foodbusiness, etc.
Qingdao

Qingdao

Manufacture and

Qingdao Linghai Air
production of air

Establishm

Conditioning Equipment
conditioner andCo., Ltd. (青岛菱海空调设

100.00100.00ent

refrigeration

备有限公司)

equipment
Chongqing

Chongqing

Food business,
commodity import

Establishm

Chongqing Yunshangand export,

ent

Yilian Technology Co.,

technology importLtd.(重庆云裳衣联科技有and export, Internet限公司)

information services,100.00100.00100.00100.00etc.

ShenzhenShenzhen

Import and export

Shenzhen Yunshang Yilian
Technology Co., Ltd. (深圳云裳衣联科技有限公司)

business, Internet,
Internet of things, bigdata, AI, AR and319/366

Establishm
entHaier Smart Home Co., Ltd. 2021 Annual Reporttechnical services
operation
Qingdao Haixiangxue

Qingdao

Qingdao
Professional

Human Resources Co., Ltd.

Establishm
intermediary(青岛海享学人力资源有

100.00100.00ent

activities限公司)

Jiangxi

Jiangxi

Wholesale and retail

Jiangxi Haier Medicalof medical

100.00100.00Establishm

Technology Co., Ltd.
equipment
Qingdao Haizhi Shenlan

Qingdao

ent

QingdaoTechnical service

Technology

100.00100.00Establishm

development
Co., Ltd.

ent
Qingdao

Qingdao

Air conditioning

Qingdao Haishengze
equipment technical100.00100.00Establishm

Technology Co., Ltd.
services
Qingdao Hailvyuan

Qingdao

QingdaoElectrical andRecycling Technology Co.,

electronic productsLtd.

waste treatment

Tianjin Internet of clothes

Tianjinent

100.00100.00Establishm
ent

TianjinIoT technology

Ecological Technology

100.00100.00Establishm

development
Co., Ltd.

ent
Qingdao

Qingdao Haier HVAC

Qingdao
Manufacture andEquipment Co., Ltd. (青岛Establishm
sale of air-100.00100.00ent

海尔暖通空调设备有限公

conditioners)

司

Qingdao Haier Home AI

Qingdao

Qingdao

Industry Innovation Center

Integrated service ofCo., Ltd. (青岛海尔家庭人

AI industry

工智能产业创新中心有限application system

Establishm
100.00100.00ent

100.00100.00Establishm)

公司

Zhejiang Weixi IoT

Zhejiang

Zhejiang
IoT application

Technology Co., Ltd. (浙江service)ent卫玺物联科技有限公司

Qingdao

QingdaoBusiness

Qingdao Haier Quality

Inspection andInspection Co., Ltd. (青岛testing of home海尔质量检测有限公司)

appliance

combinatio
100.00100.00n undercommoncontrol

320/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao

QingdaoBusiness

Qingdao Haiyongchengcombinatio
Certification Service Co.,

Product certification

Ltd.(青岛海永成认证服务service100.00100.00n undercommon有限公司)

control

Qingdao Zhonghai Borui

Qingdao

QingdaoBusiness
Home appliance

Testing Technology

combinatio
testing andService Co., Ltd.(青岛中海100.00100.00n undertechnology

博睿检测技术服务有限公commonconsulting司)

controls
Qingdao

Qingdao

Software

Qingdao Haixianghui
development andEstablishm

Technology Co., Ltd. (青岛

100.00100.00sale of daily

ent)

海享汇科技有限公司

necessities
Haier Smart Home

Qingdao

Qingdao(Xiongan, Hebei)

Promotion ofTechnology Co., Ltd. (海尔energy-saving

智家科技（河北雄安）有technology

Establishm
100.00100.00

ent

)

限公司

Qingdao Ruibo Ecological

Qingdao

Qingdao
Environmental andEnvironmental Technology

Establishm
AI technology

100.00100.00Co., Ltd. (青岛瑞博生态环

entconsulting)

保科技有限公司

Qingdao Sanyiniao

Qingdao

QingdaoTechnology Co., Ltd. (青岛and advertisement)

100.00100.00

Qingdao

Establishm
ent

design三翼鸟科技有限公司

Qingdao Jingzhi Recycle

Technology service

Qingdao

Environmental Technology

Operation of

Establishm
100.00Co., Ltd. (青岛鲸智再生环

100.00

dangerous wasteent)

保科技有限公司

Qingdao Yunshang Jieshen

Qingdao

Qingdao
Professional cleaning

Yilian Technology Co.,

Establishm
and sale of daily

51.00

51.00

Ltd. (青岛云裳洁神衣联

ent
necessities)

科技有限公司Shanghai Yunshang Yuyi

Shanghai

ShanghaiIoT technology

IoT Technology Co., Ltd.

Establishm
research and(上海云裳羽衣物联科技

51.00

51.00
ent

development)

有限公司

321/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Shijiazhuang Yunshang

Shijiazhuan

Shijiazhuan

Yilian Technology Co.,gg

Engineering
Establishm
technology research

51.00

51.00

Ltd. (石家庄云裳衣联科

entand development

)

技有限公司

Nanjing Yunshang Yilian

NanjingNanjing
Export of goods,

Technology Co., Ltd. (南京

51.00

51.00

Establishm

technology)

ent云裳衣联科技有限公司

Shanghai

Yunshang Zhonglian

ShanghaiTechnology services

Technology (Shanghai)

Establishm
in the field of science

51.00

51.00

Co., Ltd. (云裳众联科技

ent
and technology)（上海）有限公司

Shanxi Yunshang Yilian

Shanxi

ShanxiTechnology Co., Ltd. (山西in computer software

)

51.00

51.00

and hardware

云裳衣联科技有限公司

Tianjin Yunshang Yilian

Technology service

TianjinEstablishm
ent

TianjinTechnology Co., Ltd. (天津Establishm

5G communication
51.00

51.00
ent

technology service

云裳衣联网科技有限公)司Chongqing

Chongqing Yunshang

Chongqing

Haihong Yilian

Establishm
Live internet

Technology Co., Ltd. (重庆

51.00

51.00

ent

100.00100.00Establishm

technology service
云裳海宏衣联科技有限公)司

Qingdao Haixiangmian

Qingdao

Qingdao
Sale of food andTechnology Co., Ltd. (青岛daily necessities)

ent

海享眠科技有限公司

Qingdao Haier Kitchen IoT

Qingdao

QingdaoTechnology service

Technology Co., Ltd. (青岛Establishm
and sale of daily

100.00100.00ent

海尔厨联网物联科技有限necessities)

公司

Tibet Haifeng Intelligent

Tibet

Tibet

Innovation Technology

Development ofsoftware andEstablishm
100.00Co., Ltd. (西藏海峰智能创

medical)entequipment

新科技有限公司

Microenterprises such as

All over the

All over the

Qingdao Hai Heng Fengcountry

country

Electrical Appliances Sale

100.00

Sales of home

Establishm

appliancesent& Service Co., Ltd.

322/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Reasons for including subsidiaries which the Company has 50% or less of the equity into the scope of
consolidated financial statements:

At the end of the reporting period, the Company had substantial control over the finance and operationof small companies like Qingdao Hai Heng Feng Electrical Appliances Sale & Service Co., Ltd, whichwere included into the scope of consolidated financial statements.
(2) Material non-wholly owned subsidiaries
Profit or loss
Shareholding of

Balance of minority
Distribute dividends toattributable to minority
Name of subsidiaries

minorityshareholders’ equity
minority shareholders

shareholders for theshareholders

at the end of thein the current period

current period
Guizhou Haier Electronics Co., Ltd.

period41.00%

14,337,990.71

12,300,000.00

108,678,010.60

40.00%

6,000,188.28

8,000,000.00

248,923,194.12

Wuhan Haier Electronics Holding
Co., Ltd.

(3) Summarized financial information in respect of material non-wholly owned subsidiaries
Closing balance
Name of subsidiaryNon-current
Current assets

Non-current assets

Total assets

Current liabilities

Total liabilities
liabilities

Guizhou Haier
548,369,499.75

90,003,558.19

638,373,057.94

368,134,127.34

795,204,982.68

144,368,337.05

939,573,319.73

317,265,334.43

5,170,612.06

373,304,739.40

Electronics Co., Ltd.
Wuhan Haier
Electronics Holding Co.,

317,265,334.43

Ltd.

(continued)
Opening balance
Name of subsidiaryNon-current
Current assets

Non-current assets

Total assets

Current liabilities

Total liabilities
liabilities

Guizhou Haier
598,503,571.44

99,869,513.40

698,373,084.84

432,050,892.47

857,372,778.47

162,182,594.22

1,019,555,372.69

392,247,858.10

6,224,582.87

438,275,475.34

Electronics Co., Ltd.
Wuhan Haier
Electronics Holding Co.,Ltd.

Name of subsidiary

Amount for the current period323/366

392,247,858.10

Haier Smart Home Co., Ltd. 2021 Annual Report

Operating income
Guizhou Haier Electronics Co., Ltd.

Total comprehensive

Cash flow of operating

incomeactivities

Net profit

1,434,916,082.22

34,970,709.04

34,970,709.04

428,271,861.58

1,658,928,537.91

15,000,470.71

15,000,470.71

124,310,705.76

Wuhan Haier Electronics Holding Co.,Ltd.

324/366

Haier Smart Home Co., Ltd. 2021 Annual Report(continued)
Amount for the previous period
Name of subsidiary
Operating income

Guizhou Haier Electronics Co., Ltd.

Total comprehensive

Cash flow ofincomeoperating activities

Net profit

1,108,361,158.81

16,627,945.41

16,627,945.41-182,379,402.95

1,226,979,947.42-35,650,596.23-35,650,596.23-102,707,239.57

Wuhan Haier Electronics Holding
Co., Ltd.

2. Transactions leading to the change of shareholding in subsidiaries but not losing the control√Applicable□ Not Applicable(1). Description of changes in the share of owners’ equity in subsidiaries√Applicable□ Not Applicable

Capital contribution by minority shareholders of the subsidiary of the Company leads to changes
in the Company’s shareholding ratio.
(2). Impact of the transactions on minority interest and the equity attributable toshareholders of the Company:
Items

OthersTotal Consideration for acquisition/disposal

242,078,260.00

Less: share of net assets of subsidiaries in respect to the152,660,912.57

shareholding proportion acquired/disposed
Difference-89,417,347.43

Including: adjustment to increase capital reserve-89,417,347.43

3. Interests in joint ventures and associates√Applicable□ Not Applicable(1). Joint ventures and associates
Place ofPrincipal place
Name of joint venture and associates

Accounting
Nature of

Nature ofbusinessbusinessregistratioof businesstreatment ofninvestment

Haier Group Finance Co.,Ltd

Qingdao

Qingdao

Financial services

42.00%

Equity method

Bank of Qingdao Co.,Ltd

Qingdao

Qingdao

Commercial Bank

8.13%

Equity method

Wolong Electric(Jinan) Motor Co., Ltd.

Jinan

Jinan

30.00%

Equity method

23.94%

Equity method

Motor
Manufacturing
Steel plate

Qingdao Hegang New Material Technology Co.,
Ltd. (青岛河钢新材料科技股份有限公司)

Qingdao

Qingdaomanufacturing325/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier SAIF Smart Home Industry
Qingdao

Qingdao

Qingdao

Qingdao

Venture Capital

63.13%

Equity method

45.00%

Equity method

49.00%

Equity method

20.20%

Equity method

25.00%

Equity method

40.00%

Equity method

30.00%

Equity method

48.00%

Equity method

36.29%

Equity method

42.75%

Equity method36.45%

Equity method

14.70%

Equity method

49.00%

Equity method

24.00%

Equity method

49.00%

Equity method

24.93%

Equity method

40.00%

Equity method

Investment Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Air-

Manufacturing ofconditioners Co., Ltd.

home appliances

Qingdao Haier Carrier Refrigeration Equipment Co.,

Manufacturing of
Qingdao

QingdaoLtd.

home appliances
R&D and sales of

Qingdao Haier Multimedia Co., Ltd

Qingdao

Qingdaotelevision
Mold processing

Qingdao Haier Moulds Co., Ltd.

Qingdao

Qingdaoand manufacturing
Technology

Hefei Feier Smart Technology Co., Ltd.

Hefei

Hefei
development

Anhui Kunhe Intelligent Technology Co.,Electrical
Hefei

Hefei

Ltd.

equipment R&D
Gas compression
machinery

Zhejiang Futeng Fluid Technology Co., Ltd.

HuzhouHuzhoudevelopment andmanufacturing

Beijing Mr. Hi Network Technology Company

Technology
Beijing

Beijing

Limiteddevelopment
Sales of home

Beijing Xiaobei Technology Co., Ltd.

Beijing

Beijing
appliances
Technical service

Beijing ASU Tech Co., Ltd.

Beijing

Beijing

import and export
business

Shenzhen Genyuan Environmental Protection

Technical advisory
ShenzhenShenzhenTechnology Co., Ltd.

services
Investment

Qingdao Haimu Investment Management Co., Ltd.

Qingdao

Qingdaomanagement

Qingdao Haimu Smart Home Investment

Investment
Qingdao

QingdaoPartnership (Limited Partnership)

management

Guangzhou Heying Investment Partnership (Limited
Guangzhou

Guangzhou

Qingdao

Qingdao

Investment

Partnership)
Qingdao Home Wow Cloud Network Technology

Home online

Co., Ltd

service
Water equipment

Qingdao RRS Service Co., Ltd.

Qingdao

Qingdaotechnical service

326/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Investment
Bingji (Shanghai) Corporate Management Co., Ltd.

Shanghai

Shanghai

45.00%

Equity method

45.00%

Equity method

45.00%

Equity method

49.00%

Equity method

30.00%

Equity method

50.00%

Equity method

20.00%

Equity method

40.00%

Equity method

50.00%

Equity method

25.01%

Equity method

31.72%

Equity method

15.00%

Equity method

48.41%

Equity method

49.00%

Equity methodmanagement
Investment
Youjin (Shanghai) Corporate Management Co., Ltd

Shanghai

Shanghaimanagement

RRS (Shanghai) Investment Co., Ltd. (日日顺（上海）投资有限公司)

Investment
Shanghai

Shanghaimanagement
Water equipment

Haier Best Water Technology Co., Ltd. (倍世海尔饮水科技有限公司)

technology
Qingdao

Qingdaodevelopment
service

HuizhiXiangshun Equity Investment Fund

Investment
Qingdao

Qingdao(Qingdao) Partnership (Limited Partnership)

management
Investment

Qingdao RRS Huizhi Investment Co., Ltd.

Qingdao

Qingdaomanagement

Qingdao Xinshenghui Technology Co., Ltd. (青岛鑫晟汇科技有限公司)

Meiling Candy Washing Machine Co., Ltd.(美菱卡迪洗衣机有限公司)

Technology
Qingdao

Qingdao

servicedevelopment
Manufacturing of

Hefei

Hefei
home appliances
Motor

Konan Electronic Co., Ltd

Japan

Japan
Manufacturing
Manufacturing of

HPZ LIMITED

Nigeria

Nigeriahome appliance
Manufacturing of

HNR Company (Private) Limited

Pakistan

Pakistanhome appliance
Manufacturing ofHaier Raya Electric S.A.E

Egypt E

Egypt E
home appliance
Manufacturing ofControladoraMabeS.A.deC.V.

MexicoMexicohome applianceMiddle East Air conditioning Company,Limited

Saudi

Sales of home

Arabiaappliances

Saudi Arabia(2). Major financial information of important associates①The basic profile of important associates:

Haier Group Finance Co., Ltd. (hereinafter referred to as ‘Finance company’) was established by
Haier Group Corporation and its three affiliates. Registration place and principal place of business:
No.178-2 Haier Road, Laoshan District, Qingdao City. The Company’s subsidiaries hold an
aggregate of 42.00% equity interest in Finance Company.

327/366

Haier Smart Home Co., Ltd. 2021 Annual Report②Financial information of important associates:
Finance company
Items

Closing balance/ Amount forOpening balance/ Amountthe current period

for the previous period

Current assets

61,294,606,916.47

62,750,087,810.02

Non-current assets

9,404,030,263.35

12,907,238,025.07

Total assets

70,698,637,179.82

75,657,325,835.09

Current liabilities

53,403,515,414.15

59,895,340,204.39

369,623,253.07

223,325,462.63

53,773,138,667.22

60,118,665,667.02

16,925,498,512.60

15,538,660,168.07

7,108,709,375.29

6,526,237,270.60

Operating income

2,039,657,544.66

2,225,723,222.45

Net profit

1,503,077,521.32

1,550,909,520.81

Other comprehensive income-38,457,038.17-23,229,657.93

Total comprehensive income

1,464,620,483.15

1,527,679,862.88

218,400,000.00

126,000,000.00

Non-current liabilities
Total liabilities
Minority equity interests
Equity attributable to shareholders of
the parent company
Including: share of net assets calculated
per shareholding percentage

Dividend received from associates forthe year(3). Summarized financial information of insignificant joint ventures and associates
Investment in associates

Bank of Qingdao Co., Ltd.
Wolong Electric (Jinan) Motor Co., Ltd.

Closing balance/

Opening balance/

Amount for theAmount for thecurrent periodprevious period

2,654,248,436.12

2,463,096,567.92

151,837,378.99

143,847,870.70

312,493,256.21

297,154,935.85

393,598,372.59

385,797,036.73

682,901,976.73

654,581,961.84

Qingdao Hegang New Material Technology Co., Ltd.

青岛河钢新材料科技股份有限公司)(

Qingdao Haier SAIF Smart Home Industry Investment
Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao)
Airconditioners Co., Ltd.

328/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier Carrier Refrigeration Equipment Co.,
409,053,808.05

415,298,165.93

Qingdao Haier Multimedia Co., Ltd

277,102,563.88

328,987,205.07

Qingdao Haier Moulds Co., Ltd.

269,158,534.54

259,696,084.44

265,106.27

1,491,024.72

Ltd.

Hefei Feier Smart Technology Co., Ltd.
Anhui Kunhe Intelligent Technology Co., Ltd.

1,877,574.14

Zhejiang Futeng Fluid Technology Co., Ltd.

82,098,847.75

Beijing Mr. Hi Network Technology Company Limited

7,507,759.75

7,507,759.75

Beijing Xiaobei Technology Co., Ltd.

2,687,341.82

2,687,341.82

Beijing ASU Tech Co., Ltd.

15,529,700.01

32,365,969.45

6,914,487.73

6,914,487.73

2,465,299.70

2,349,240.51

59,424,662.44

47,870,696.66

285,793,577.87

288,209,197.58

2,600,050.50

2,629,009.63

Qingdao RRS Service Co., Ltd.

31,316,518.68

33,010,000.00

Bingji (Shanghai) Corporate Management Co., Ltd.

972,200,487.88

928,444,178.47

Youjin (Shanghai) Corporate Management Co., Ltd

1,766,819,068.86

1,687,262,142.67

3,211,580,125.21

3,066,931,168.49

79,785,557.39

33,455,159.59

119,008,967.03

120,000,000.00

2,083,482.78

2,100,000.00

Shenzhen Genyuan Environmental Protection
Technology Co., Ltd.
Qingdao Haimu Investment Management Co., Ltd.
Qingdao Haimu Smart Home Investment Partnership(Limited Partnership)
Guangzhou Heying Investment Partnership (Limited
Partnership)
Qingdao Home Wow Cloud Network Technology Co.,
Ltd

日日顺（上

RRS (Shanghai) Investment Co., Ltd. (海）Investment 有限公司)

倍世海尔饮水Haier Best Water Technology Co., Ltd. (科技有限公司)HuizhiXiangshun Equity Investment Fund (Qingdao)
Partnership (Limited Partnership)
Qingdao RRS Huizhi Investment Co., Ltd.

青岛鑫晟

Qingdao Xinshenghui Technology Co., Ltd.(

汇科技有限公司)美菱卡迪

9,964,773.52

Meiling Candy Washing Machine Co., Ltd.(

洗衣机有限公司)22,752,232.07

22,558,307.10

EuropaltersItaliaS.r.l.

9,361,965.48

Konan Electronic Co., Ltd

69,273,712.61

77,561,552.87

HNR Company (Private) Limited

114,055,318.97

92,141,887.27

HPZ LIMITED

71,269,048.97

66,827,745.66

329/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Haier Raya Electric S.A.E

10,568,507.40

10,741,234.10

4,131,983,673.10

3,667,310,241.31

10,318,898.13

19,002,595.66

16,249,901,073.17

15,167,830,769.52

1,274,491,899.84

984,566,512.00

Other comprehensive income-34,119,700.06-314,658,014.39

Total comprehensive income

1,240,372,199.78

669,908,497.61

ControladoraMabeS.A.deC.V.
Middle East Air conditioning Company,Limited
Total book value of investment
Total amount of the following financial data ofassociates calculated based on shareholding percentage
Net profit

X. SEGMENT REPORT(1) Basis for determining the reporting segments and accounting policy√Applicable□ Not Applicable

The Company is principally engaged in manufacture and sales of home appliances and relevant services
business, manufacture of upstream home appliances parts, distribution of products of third party, logistics
and after-sale business. The Company has three business segments: (1) China smart home businesssegment; (2) Overseas home appliance and smart home business segment; (3) Other business segments.
The management of the Company assesses operating performance of each segment and allocates
resources according to the division. Sales between segments were mainly based on market price.
(1) China smart home business segment consists of:① Internet of Food solutions: mainly engages in production and sales of refrigerator/freezers andkitchen appliances.

② Internet of Clothing solutions: mainly engages in production and sales of washing machine
products.

③ Air energy solutions: mainly engages in production and sales of air conditioners.
④ Whole house water solutions: mainly engages in production and sales of water home appliancessuch as water heaters and water purification products.
(2) Overseas home appliance and smart home business segment mainly includes overseas businesssegments such as GEA, FPA, Candy and so on.
(3) Other business segments: mainly include channel, equipment components, small home appliancebusiness and others.
Due to centralized management under the headquarters or exclusion from the assessment scope ofsegment management, the total assets of segments exclude monetary funds, financial assets held for
trading, derivative financial assets, dividends receivable, held-for-sale financial assets, other current

330/366

Haier Smart Home Co., Ltd. 2021 Annual Reportassets, other equity instruments investment, long-term accounts receivable, long-term equity investment,
goodwill and deferred income tax assets; the total liabilities of segments exclude long-term and shortterm borrowings, financial liabilities held for trading, derivative financial liabilities, taxes payable,interests payable, dividends payable, held-for-sale liabilities, bonds payable, deferred income tax
liabilities and other non-current liabilities; profits of segments exclude financial expenses, profit or loss
in fair value changes, income from investment, and income on disposal of assets, Non-value-added tax
refundable upon imposition component of other income, non-operating incomes and expenses andincome tax.

（1）Information of reportable segments
Segment information for the period
China smart home business
Internet of
Air energy
Segment

Internet of Food solutions

Whole house water
clothing

solutionssolutionssolutions W

information
Refrigerator/

KitchenWashing

Water homemachineappliances

Air conditioners

Segment revenue

freezers

appliances

41,743,157,017.74

3,495,589,873.43

32,192,834,146.73

30,658,121,874.87

12,701,189,534.01

36,854,876,837.94

3,013,351,768.25

27,412,948,533.30

25,916,495,249.83

12,478,797,708.26

4,888,280,179.80

482,238,105.18

4,779,885,613.43

4,741,626,625.04

222,391,825.75

38,754,084,806.60

3,442,698,782.42

31,944,204,039.40

27,951,528,749.31

11,242,746,656.47

2,989,072,211.14

52,891,091.01

248,630,107.33

2,706,593,125.56

1,458,442,877.54

17,849,098,835.46

2,547,615,110.79

17,958,004,697.79

20,919,506,189.82

8,406,963,618.39

42,593,142,081.38

2,371,416,306.28

15,600,383,361.76

11,249,225,999.71

7,865,505,122.98

Including:external revenue
Inter-segment
revenue
Total segment
operating cost
Segment
operating profit
Total segment
assetsTotal segment
liabilities

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Haier Smart Home Co., Ltd. 2021 Annual Report(continued)
Overseas home
Segment

Inter-segment
appliance and smart

Other businessinformation

Total
eliminations

home business
Segment revenue

113,725,197,263.88

92,166,599,326.81-99,126,545,419.30

227,556,143,618.17

113,090,283,595.32

8,789,389,925.27-

227,556,143,618.17

634,913,668.56

83,377,209,401.54-99,126,545,419.30-

107,799,170,859.34

92,379,974,264.60-99,170,658,940.10

214,343,749,218.04

5,926,026,404.54-213,374,937.79

44,113,520.80

13,212,394,400.13

57,368,272,498.73

51,069,491,924.21-63,373,327,405.31

112,745,625,469.88

33,874,070,274.78

59,664,263,444.00-63,106,428,270.31

110,111,578,320.58

Including:external revenue
Inter-segment
revenue
Total segment
operating cost
Segment operating
profitTotal segment
assetsTotal segment
liabilities

Segment information for the corresponding period of last year
China smart home business
Internet ofInternet ofclothing

clothing

solutionssolutions

Air energy
Segment

Internet of Food solutions
solutionsinformation
Refrigerator/

Water home

Kitchen
Air conditioners

Air conditioners

freezers

appliances

34,392,366,627.27

2,772,514,504.29

25,512,310,018.54

25,985,087,875.74

10,217,370,018.95

30,571,800,331.77

2,636,709,451.75

21,867,508,645.86

22,482,809,819.55

9,832,880,899.81

3,820,566,295.50

135,805,052.54

3,644,801,372.68

3,502,278,056.19

384,489,119.14

32,050,102,593.72

2,732,391,511.07

25,412,035,059.34

23,785,181,115.90

9,051,888,737.91

2,342,264,033.55

40,122,993.22

100,274,959.20

2,199,906,759.84

1,165,481,281.04

appliances

Segment
revenue
Including:external
revenue
Inter-segment
revenue
Total segment
operating cost
Segment
operating profit

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Haier Smart Home Co., Ltd. 2021 Annual Report

Total segment
11,689,348,816.41

2,532,594,848.74

20,925,304,799.58

10,136,244,423.99

4,136,849,021.24

29,205,929,335.98

1,538,646,245.07

13,440,305,435.84

8,218,924,225.44

5,108,347,965.67

assetsTotal segment
liabilities(continued)
Overseas home
Segment

appliance andInter-segment
Other businessinformation

smart homeTotaleliminations

business
Segment revenue

100,622,879,428.15

92,707,457,540.87-82,486,555,932.78

209,723,430,081.03

100,043,920,934.59

22,287,799,997.70-

209,723,430,081.03

578,958,493.56

70,419,657,543.17-82,486,555,932.78-

96,622,453,341.44

92,705,972,354.35-82,483,992,857.84

199,876,031,855.89

4,000,426,086.71

1,485,186.52-2,563,074.94

9,847,398,225.14

50,763,259,766.21

57,018,026,183.75-54,988,029,529.27

102,213,598,330.65

31,137,719,930.78

60,188,210,663.05-54,848,048,847.94

93,990,034,953.89

Including: external
revenue
Inter-segment
revenue
Total segment
operating cost
Segment operating
profitTotal segment
assetsTotal segment
liabilities(2) Geographical information‘Other countries/regions’ in this report refers to all other countries/regions (including Hong Kongand Macau Special Administration Region and Taiwan) other than the mainland China for the
purpose of information disclosure
External transaction revenue

Amount for the current

Amount for the previous

periodperiodItems

Mainland China

112,316,894,142.15

107,675,765,368.40

Other countries/regions

115,239,249,476.02

102,047,664,712.63

America

70,277,292,639.70

63,704,731,841.17

Australia

7,011,702,914.33

5,978,691,773.66

Among which:333/366

Haier Smart Home Co., Ltd. 2021 Annual Report

South Asia

7,138,132,421.70

5,471,774,634.45

Europe19,736,797,708.72

16,512,783,759.03

Southeast Asia

4,740,118,325.43

4,122,964,419.05

Middle East and Africa

1,478,785,406.72

1,205,510,726.84

Japan3,491,226,268.28

3,613,139,400.23

Others1,365,193,791.14

1,438,068,158.20

227,556,143,618.17

209,723,430,081.03

Total

Total non-current assets
Items

Closing balance

Opening balance

Mainland China

16,570,598,653.17

14,745,600,858.85

Other countries/regions

25,209,296,729.73

25,212,638,556.86

41,779,895,382.90

39,958,239,415.71

Total

Total non-current assets exclude: other equity instrument investments, long-term receivable, long-term
equity investments, goodwill, deferred income tax assets, and other non-current financial assets.
XI. DISCLOSURE OF FAIR VALUE
1.

Fair value of assets and liabilities measured at fair value
The level to which the fair value measurement result belongs is determined by the lowest level
to which the input value is significant to the fair value measurement as a whole:
Level 1: Unadjusted quotes for the same asset or liability in an active market.
Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except
for Level 1 inputs.
Level 3: Unobservable inputs of related assets or liabilities.

At the end of the period

Input used for fair value measurement
Quotes in an
Items

Important unobservable input
Important observable

active market(Level 3)

Total

input (Level 2)(Level 1)
Continuously measured atfair value
Financial assets held for

374,782,417.76

2,305,001,643.90

106,291,467.43

2,786,075,529.09

trading
Including: Bank wealth2,168,622,090.00

2,168,622,090.00

136,379,553.90

136,379,553.90

management products
Forward foreign exchange
contract334/366

Haier Smart Home Co., Ltd. 2021 Annual Report

150,516,274.37

Investment fund

150,516,274.37

Investment in equity

224,266,143.39

106,291,467.43

330,557,610.82

instruments
Derivative financial assets

79,819,974.01

79,819,974.01

72,822,190.59

72,822,190.59

6,997,783.42

6,997,783.42

Including: Forward foreignexchange contract
Forward commodity contract
Other equity instruments

21,055,159.54

Including: Equity instruments

2,812,000,000.00

2,015,654,279.42

2,812,000,000.00

2,015,654,279.42

4,848,709,438.96

measured at fair value
and changes of which

21,055,159.54

4,848,709,438.96

included in othercomprehensive
incomeOther non-current assets

46,832,494.61

46,832,494.61

46,832,494.61

46,832,494.61

Including: Other non-current
financial assets

6,294,014.40

Financial liabilities held for

6,294,014.40
trading

6,294,014.40

Including: Forward foreign

6,294,014.40
exchange contract
Derivative financial

80,212,433.24

80,212,433.24

60,527,532.76

60,527,532.76

19,684,900.48

19,684,900.48

liabilities
Including: Forward foreignexchange contract
Interest rate swap agreement

At the beginning of the period
Input used for fair value measurement
Quotes in an

Important

Importantactive market

observable input

unobservable(Level 1)(Level 2)

input (Level 3)

Items

）

Total

Continuously measured at fair value
Financial assets held for trading

113,759,845.57

1,967,483,015.21

83,949,637.05

2,165,192,497.83

Including: Bank wealth management
1,862,036,322.21

1,862,036,322.21

105,446,693.00

105,446,693.00

products
Forward foreign exchange contract
Investment fund

113,759,845.57

113,759,845.57

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Haier Smart Home Co., Ltd. 2021 Annual Report

Investment in equity instruments

83,949,637.05

Derivative financial assets

83,949,637.05

77,839,006.63

77,839,006.63

52,194,232.55

52,194,232.55

25,644,774.08

25,644,774.08

Including: Forward foreign exchange
contract
Interest rate swap agreement
Other equity instruments

19,802,461.70

2,639,222,803.84

2,659,025,265.54

19,802,461.70

2,639,222,803.84

2,659,025,265.54

Including: Equity instruments measured atfair value and changes of which
included in other comprehensive
incomeOther non-current assets

46,832,494.61

46,832,494.61

46,832,494.61

46,832,494.61

26,952,508.66

26,952,508.66

26,952,508.66

26,952,508.66

239,582,532.90

239,582,532.90

188,695,788.30

188,695,788.30

50,886,744.60

50,886,744.60

Including: Other non-current financial
assetsFinancial liabilities held for trading
Including: Forward foreign exchange
contract
Derivative financial liabilities
Including: Forward foreign exchange
contract
Interest rate swap agreement

For financial instruments traded in an active market, the Company determines its fair value basedon its quotes in an active market; for financial instruments not traded in an active market, theCompany uses valuation techniques to determine its fair value.
2. The basis for determining the fair value of the continual Level 2 fair value measurement
items
Fair value at the end of

Items

Valuation techniques
the period

Financial assets held for trading

2,168,622,090.00

Including: Bank wealth management products

136,379,553.90

Forward foreign exchange contract

Discounted cash
Discounted cash
flow

Derivative financial assets

72,822,190.59

Including: Forward foreign exchange contract

336/366

Discounted cashflow

Haier Smart Home Co., Ltd. 2021 Annual Report

6,997,783.42

Forward commodity contract

Discounted cash
flow
—

—

Other equity instruments investment
Including: equity instruments measured at fair value

2,812,000,000.00

Recent transaction
methods

through other comprehensive income
Financial liabilities held for trading

6,294,014.40

Including: Forward foreign exchange contract

Discounted cash
flow

Derivative financial liabilities

60,527,532.76

Including: Forward foreign exchange contract

Discounted cashflow

19,684,900.48

Interest rate swap agreement

Discounted cashflow

3. Continual Level 3 fair value measurement major items, the valuation techniques adopted
and information of important parameters
Significant
Fair value at the

Valuationend of the period

techniqueItems

unobservable
input

Other equity instruments

337/366

Range

Sensitivity of fair value to the input

Haier Smart Home Co., Ltd. 2021 Annual Report

1. 1% increase (decrease) in average P/E
multiple of the Comparable Companies
Including: SINOPEC

1. Average P/E

Fuel Oil Sales

multiple of peers

Corporation Limited (中Market1. 27.43

would result in increase (decrease) in fairto 29.43

value by RMB45,300,000.00.

2. Discount for

1,290,487,901.40

approach

国石化销售股份有限公2.

30.74%

2. 1% increase (decrease) in the lack oflack ofto 32.74%

司)

marketability would result in decrease

marketability(increase) in fair value by
RMB18,900,000.00.

4. Financial instruments not measured at fair value
Items

Closing book value

Bonds payable (convertible corporate

334,730,048.82

Closing fair value
567,173,133.58

bonds)
Financial assets and financial liabilities not measured at fair value include: monetary funds, bills
receivable, accounts receivable, other receivables, other current assets, long-term and short-termborrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable, etc.
Except for the difference between the book value and the fair value of bonds payable disclosed above,the difference between the book value and the fair value of financial assets and financial liabilities notmeasured at fair value at the end of the period is small.

XII. RELATIONSHIP BETWEEN RELATED PARTIES AND THEIR TRANSACTIONS

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Haier Smart Home Co., Ltd. 2021 Annual Report(I) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party Disclosures,
parties are considered to be related if one party has the ability to control or jointly control the other party
or exercise significant influence over the other party. Parties (two or more than two) are also considered
to be related if they are subject to common control, joint control or significant influence from anotherparty.
According to Management Practices for Information Disclosure of Listed Company (China
Securities Regulatory Commission Order No. 182), related legal entity or individual will be identified as
related parties in certain occasions.
(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of the Company
Relationships
Type of
Name

Legal
Registered place

Registered capitalenterpriseInterest in the

Voting rights toCompany

the Company

11.41%

11.41%

13.39%

13.39%

5.73%

5.73%

1.83%

1.83%

1.12%

1.12%

with therepresentative
Company

Collective
Haier Group

Qingdao High-techownership

Corporation

Parent311,180,000

Zhou Yunjie
Company

Zone Haier Park
company

Haier
COSMO Co.,

Joint-stock

Qingdao High-techcompany

Zone Haier Park

Ltd. (海尔卡Subsidiary of
631,930,000

Zhou Yunjie

ParentCompany

奥斯股份有限)公司

HCH (HK)

Parties acting

Investment

in concert ofPrivate company

Hong Kong

HKD 10,000/

Management

ParentCo., Limited

Company

Qingdao Haier

Parties acting

Venture &Company with Qingdao Free Trade
Investment

in concert of923,000,000

limited liability

Zhou Yunjie
Parent

Zone

Information

CompanyCo., Ltd.
Qingdao

LimitedQingdao High-tech

Parties acting
1,616,120,000

Haichuangzhi

partnership

Zhang Ruimin
in concert ofZone Haier Park339/366

Haier Smart Home Co., Ltd. 2021 Annual ReportManagement

Parentcompany

Company

Consulting
Enterprise(Limited
Partnership)

Parties acting

Haierin concert ofInternational Private company

Hong Kong

HKD 2

/

0.62%

0.62%

ParentCo., Limited

Company

2. Subsidiaries
The details of the subsidiaries of the Company are detailed in Note IX.1.
3. Joint ventures and associates
The details of associates and joint ventures of the Company are detailed in Note VII.11 and
IX.3.
4. Connected companies with no relationship of control
Relationship with the
Name
Company
Gooday Supply Chain Technologies Co., Ltd.

Subsidiary of Haier Group

Shanghai Cotai Supply Chain Management Co., Ltd.

Subsidiary of Haier Group

Qingdao Goodaymart Supply Chains Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Industrial Intelligence Research Institute Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Robot Co., Ltd.

Subsidiary of Haier Group

Qingdao Blue Whale Technology Co., Ltd.

Subsidiary of Haier Group

Chongqing Zhonglian Energy Technology Co., Ltd.

Subsidiary of Haier Group

Dalian Haier International Trade Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Parts Procurement Co., Ltd.

Subsidiary of Haier Group

Hefei Haier Logistics Co., Limited

Subsidiary of Haier Group

Chongqing Haier Electrical Appliances Sales Co., Ltd.

Subsidiary of Haier Group

Chongqing Haier Logistics Co., Ltd.

Subsidiary of Haier Group

CosmoplatChuangzhi IOT Technology Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier International Trading Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier International Travel Agency Co., Ltd.

Subsidiary of Haier Group

Qingdao Haiyongda Property Management Co., Ltd.

Subsidiary of Haier Group

Shanghai Zhiyu Technology Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Special Plastic Development Co., Ltd.

Subsidiary of Haier Group

Qingdao Haina Cloud Intelligent System Co., Ltd.

Subsidiary of Haier Group

340/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Dingxin Electronic Technology Co., Ltd.

Subsidiary of Haier Group

Hefei Haier Smart Electronics Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Industry and City Innovation Group Co., Ltd.

Subsidiary of Haier Group

Chongqing Haier Smart Electronics Co., Ltd.

Subsidiary of Haier Group

Laiyang Haier Electrical Co. Ltd.

Subsidiary of Haier Group
Subsidiary and associate of

Qingdao Haier New Materials R & D Co., Ltd.
Haier Group
Wolong Electric (Jinan) Motor Co., Ltd.

Associate

Controladora Mabe S.A.deC.V.

Associate

HNR Company (Private) Limited

Associate

Qingdao Hegang New Material Technology Co., Ltd.

Associate

Qingdao Haier Moulds Co., Ltd.

Associate

HPZ Limited

Associate

Qingdao HBIS Composite New Material Co., Ltd.

Subsidiary of associate

Hefei Hegang New Material Technology Co., Ltd.

Subsidiary of associate(III)Related transactions
1. Details of the Company’s procurement of goods and services from related parties are as
follows:
Amount for the current

Amount for the previous

periodperiodRelated parties
Controladora Mabe S.A.deC.V.

12,314,855,657.89

11,999,474,973.38

5,274,865,476.66

3,551,418,241.21

Gooday Supply Chain Technologies Co., Ltd.

3,847,847,323.30

2,597,452,446.62

HNR Company (Private) Limited

2,733,833,669.59

2,018,249,351.88

2,121,388,092.90

555,538,358.70

1,624,701,243.17

1,716,167,555.69

1,190,287,247.15

906,960,612.06

1,031,357,405.38

241,701,291.50

1,013,817,589.80

773,829,886.35

923,986,491.86

778,581,344.26

Chongqing Haier Electrical Appliances Sales
Co., Ltd.

Cosmoplat Chuangzhi IOT Technology Co.,Ltd.
Shanghai Cotai Supply Chain Management
Co., Ltd.
Hefei Hegang New Material Technology Co.,Ltd.
Chongqing Haier Intelligent Electronics Co.,
Ltd.
Wolong Electric (Jinan) Motor Co., Ltd.
Qingdao HBIS Composite New Material Co.,Ltd.

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Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Ding Xin Electronics Technology
885,837,757.21

226,464,559.30

688,451,059.64

424,574,287.86

6,954,266,150.51

13,425,132,973.66

40,605,495,165.06

39,215,545,882.47

Co., Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd.
Other related parties
Total

2. Details of the Company’s sales of goods to related parties are as follows:
Amount for the current

Amount for the previous

periodperiodRelated parties
Controladora Mabe S.A.deC.V.

730,275,993.98

556,773,753.65

701,097,705.82

623,502,863.63

HNR Company (Private) Limited

681,960,950.97

434,316,420.93

Qingdao Haier International Trading Co., Ltd.

613,132,319.62

587,335,502.32

214,648,613.53

141,625,117.57

90,831,902.38

48,089,463.32

90,815,520.61

100,306,070.59

906,110,423.34

1,666,886,162.31

4,028,873,430.25

4,158,835,354.32

Qingdao Haier Special Plastic Development
Co., Ltd.

Qingdao Haier International Travel Agency Co.,Ltd.
HPZ Limited
Chongqing Haier Electrical Appliances Sales
Co., Ltd.
Other related parties
Total

3. Amount of unsettled items of related parties
Items and name of customers

Closing Balance

Opening BalanceBills receivable:
Qingdao Haina Cloud Intelligent System Co.,
21,511,057.07
Ltd.
Cosmoplat Chuangzhi IOT Technology Co.,
13,520,000.00
Ltd.
Qingdao Hegang New Material Technology
10,440,243.35
Co., Ltd.
Hefei Haier Smart Electronics Co., Ltd.

4,324,429.00

Other related parties

8,690,387.26

1,106,165.28

Accounts receivable:
HNR Company (Private) Limited

588,605,242.72

388,679,073.55

Controladora Mabe S.A.deC.V.

123,524,843.42

81,498,939.68

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Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier International Travel Agency
99,648,729.88

113,933,378.64

45,403,951.21

24,860,829.14

43,349,588.61

12,817,842.19

39,101,648.72

187,101,398.95

34,284,071.61

72,248,862.19

31,824,063.09

17,159,667.62

224,141,742.32

663,077,856.12

HNR Company (Private) Limited

82,148,476.31

78,420,575.44

Qingdao Haier International Trading Co., Ltd.

32,539,796.91

80,759,659.73

23,936,807.36

26,860,737.70

18,382,367.83

1,398,654.93

17,069,128.00

16,353,318.00

27,184,746.15

76,852,557.93

Gooday Supply Chain Technologies Co., Ltd.

27,180,000.00

1,405,264.35

Qingdao Haier International Trading Co., Ltd.

16,601,596.21

4,779,282.75

Controladora Mabe S.A.deC.V.

16,260,655.41

15,777,379.54

Co., Ltd.
Chongqing Zhonglian Energy Technology Co.,Ltd.
Shanghai Zhiyu Technology Co., Ltd.
Qingdao Haier Special Plastic Development
Co., Ltd.
Qingdao Haier International Trading Co., Ltd.
Qingdao Haina Cloud Intelligent System Co.,
Ltd.

Other related parties
Prepayments:

Qingdao Haier International Travel Agency
Co., Ltd.
Hefei Haier Logistics Co., Limited
Qingdao Haiyongda Property Management Co.,
Ltd.
Other related parties
Other receivables:

Qingdao Junyi Holding Group Co., Ltd.

88,640,000.00

Other related parties

93,718,348.16

164,345,066.12

Laiyang Haier Electrical Co. Ltd.

50,019,985.82

49,720,701.09

Qingdao Haier New Materials R & D Co., Ltd.

90,348,253.59

56,956,689.86

Other related parties

4,127,872.00

Bills payable:

Accounts payable:
Qingdao Haier Parts Procurement Co., Ltd.

1,985,902,077.10

1,647,724,215.65

Controladora Mabe S.A.deC.V.

941,545,815.41

316,079,431.43

Hefei Haier Logistics Co., Limited

337,481,850.21

242,590,693.06

332,415,203.41

407,357,263.21

Chongqing Haier Electrical Appliances Sales
Co., Ltd.

343/366

Haier Smart Home Co., Ltd. 2021 Annual Report

Chongqing Haier Logistics Co., Ltd.

305,338,331.45

290,743,396.11

268,605,818.56

671,426,347.70

175,739,251.85

197,461,939.55

161,242,782.98

104,132,210.10

151,305,730.27

120,733,728.22

Qingdao Haier Moulds Co., Ltd.

136,685,798.49

134,769,248.08

Other related parties

753,058,673.76

1,324,746,884.11

Cosmoplat Chuangzhi IOT Technology Co.,Ltd.
Dalian Haier International Trade Co., Ltd.
Qingdao HBIS Composite New Material Co.,
Ltd.
Hefei Hegang New Material Technology Co.,
Ltd.

Contract liabilities:
Qingdao Haier Parts Procurement Co., Ltd.

91,082,063.05

Wolong Electric (Jinan) Motor Co., Ltd.

21,373,101.27

520,294.42

17,210,554.92

17,210,554.92

24,928,637.72

19,659,969.53

687,378,382.22

790,674,332.08

154,351,301.35

183,123,979.68

72,545,343.35

77,995,078.37

30,783,024.61

25,622,538.88

Qingdao Haier Robot Co., Ltd.

28,372,133.16

49,076,364.39

Qingdao Blue Whale Technology Co., Ltd.

27,367,393.54

3,056,124.30

22,715,499.00

59,926,366.50

Dalian Haier International Trade Co., Ltd.

21,800,000.00

21,800,000.00

Qingdao Haier Moulds Co., Ltd.

21,298,170.87

73,679,757.76

Other related parties

109,983,863.60

259,025,181.20

Chongqing Zhonglian Energy Technology Co.,
Ltd.
Other related parties
Other payables:
Gooday Supply Chain Technologies Co., Ltd.
Shanghai Cotai Supply Chain Management Co.,Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd.
Qingdao Haier Industrial Intelligence ResearchInstitute Co., Ltd.

Chongqing Zhonglian Energy Technology Co.,Ltd.

4. Others√Applicable□ Not Applicable(1) On 29 April 2021, Haier Group Corporation and Haier Group Finance Co., Ltd. (hereafter, the“Finance Company”) renewed the Financial Services Framework Agreement, and the “resolution on the
renewal of the Financial Services Framework Agreement between Haier Smart Home Co., Ltd. and HaierGroup Corporation and the estimated amount of connected transaction” was considered and passed at the344/366

Haier Smart Home Co., Ltd. 2021 Annual Report2020 Annual General Meeting held on 25 June 2021. The Financial Services Framework Agreement
became effective from the passing of the resolution at the general meeting.
Various current balances of the Company and the Finance Company are as follows:
Items

Closing Balance

Opening Balance

Monetary funds deposited at the
28,632,146,919.30

24,964,098,241.74

260,262,550.46

120,777,203.01

336,507,659.12

454,470,450.05

1,813,534.66

2,808,989.55

21,697,666,574.19

18,314,739,389.38

1,577,848.15

29,804,904.63

Finance Company
Interest receivable from the
Finance Company
Loans of the Finance Company
Interest payable to the Finance
Company
Bank acceptance note issued
Foreign exchange derivatives of
the Finance Company

Various balances of the Company and the Finance Company are as follows:
Items

Amount for the current period

Amount for the previous period

Interest income of the Finance339,728,297.25

158,335,607.74

8,137,583.63

86,769,880.74

23,493,333.12

17,649,560.80

Company
Interest expense of the Finance
Company
Service fee of the Finance
Company(2) The lease expense of the Company and its subsidiaries for production and operation leased from
related parties for the current period was RMB106 million.
(3) Related information on the guarantor of the Company’s guaranteed borrowings as a related
party at the end of period:
Borrowing
Guarantor

Lenderamounts
Haier Russian Electric Co., Ltd.
Total

304,896,830.40
304,896,830.40(IV) Pricing Policy
1. Related-party Sales

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Haier Smart Home Co., Ltd. 2021 Annual Report

Some related parties purchase components through the independent procurement platform of theCompany, purchase electrical appliances for sales from the Company, and receive after-sales services,
R&D service, housing rental and other business provided by the company due to their business needs. In
November 2020, according to the implementation of connected transactions in the early stage and therelevant listing requirements in Hong Kong, the Company and Haier Group Corporation revised andsigned the Product and Materials Sales Framework Agreement, the Service Provision Framework
Agreement and the Property Leasing Framework Agreement on the basis of the original execution
contract, which agreed on the financial connected transactions. The pricing principle included that bothparties should agree on the price which is not less favourable than those provided by the Company to the
Independent Third Parties on arm’s length to ensure the fairness and reasonableness of connectedtransactions. The valid term of the agreement commenced from the listing date to 31 December 2022,
which can be renewed for another three years upon expire.

2. Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group Corporationand its subsidiaries for procurements of part of raw materials. Moreover, the Company entrusted HaierGroup Corporation and its subsidiaries to provide the Company with logistics and distribution, energy
and power, basic research and testing, equipment leasing, house leasing and maintenance, greening andcleaning, gift procurement, design, consulting, various ticket booking and other services. In November
2020, according to the implementation of connected transactions in the early stage and the relevant listing
requirements in Hong Kong, the Company and Haier Group Corporation revised and signed the Productand Materials Sales Framework Agreement, the Service Provision Framework Agreement and theProperty Leasing Framework Agreement on the basis of the original execution contract, which agreed
on the financial connected transactions. The pricing principle included that both parties should agree on
the price which is not less favourable than those provided by the Company to the Independent Third
Parties on arm’s length to ensure the fairness and reasonableness of connected transactions. The valid
term of the agreement commenced from the listing date to 31 December 2022, which can be renewed foranother three years upon expire.

3. Financial aspect
Some of the financial services such as deposit and loan service, discounting service and foreignexchange derivatives needed by the Company are provided by Haier Group Corporation, its subsidiaries

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Haier Smart Home Co., Ltd. 2021 Annual Reportand other companies. According to the Financial Service Agreement entered among the Company, HaierGroup Corporation and other parties, the price of financial services is determined by the principle of notless favourable than market value fair. The Company is entitled to decide whether to keep cooperation
relationship with them with the knowledge of the price prevailing in the market and in combination with
its own interests. While performing the agreement, the Company could also require other financial
service institutions to provide related financial services basing on actual situation. In order to meet theCompany’s demands such as the avoidance of foreign exchange fluctuation risk, the Company may
choose Haier Group Finance Co., Ltd. to provide some foreign exchange derivative business after
comparing with comparable companies. The Company will uphold the safe and sound, appropriate andreasonable principle, under which all foreign exchange capital business shall have a normal andreasonable business background to eliminate speculative operation. At the same time, the Company has
specified the examination and permission rights, management positions and responsibilities at all levels
for its foreign exchange capital business to eradicate the risks of operation by persons and improved its
response speed to risks on the premise that the risks are effectively controlled. In June 2021, the Company
and Haier Group Corporation renewed the Financial Services Framework Agreement, which agreed on
the financial connected transactions. The pricing principle included the deposit interest rate not lower
than the maximum interest rate of major banks listed and the loan interest rate not less favourable thanthe market price to ensure the fairness and reasonableness of connected transactions. The valid term of
the agreement lasts until 31 December 2023, which can be renewed for another three years upon expire.

4. Others
The Company signed the Intellectual Property Licensing Framework Agreement with Haier Group
Corporation in November 2020. According to the agreement, Haier Group has agreed to grant or procure
its subsidiaries and contact persons to grant the license to the Company at nil consideration to use all its
intellectual property rights, including but not limited to trademarks, patents, copyrights and logos for the
products, packaging, services and business introduction documents of the Company. The date of theIntellectual Property Licensing Framework Agreement shall be permanently effective from the listingdate. When such specific intellectual property rights expire and are not renewed by Haier Group, ourright to use certain intellectual property rights under the Intellectual Property Licensing Framework
Agreement will terminate.

XIII. SHARE-BASED PAYMENTS

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Haier Smart Home Co., Ltd. 2021 Annual Report(1) Employee Stock Ownership Plan
The A Share Core Employee Stock Ownership Plan (2021-2025), H Share Core Employee Stock Ownership
Plan (2021-2025) and H Share Restricted Share Unit Plan (2021-2025) were adopted at the 2020 General Meeting
held on 25 June 2021.

(a) A Share Core Employee Stock Ownership Plan (2021-2025)
According to the relevant arrangement in respect of the A Share Core Employee Stock Ownership Plan
(2021-2025) considered and passed at the 2020 General Meeting held on 25 June 2021, 25,440,807 Shares in the“securities account for repurchase of Haier Smart Home Co., Ltd.” were transferred in a non-transactional mannerto the specific account of “Haier Smart Home Co., Ltd. - A Share Core Employee Stock Ownership Plan (20212025)” on 22 July 2021. The shares purchased by the plan are subject to a lock-up period of 12 months.

(b) H Share Core Employee Stock Ownership Plan (2021-2025)
According to the relevant arrangement in respect of the H Share Core Employee Stock Ownership Plan
(2021-2025) considered and passed at the 2020 General Meeting held on 25 June 2021, the Company had engaged
an asset management company to purchase 3,757,000 H Shares in aggregate in the secondary market through theHong Kong Stock Connect. The shares purchased by the plan are subject to a lock-up period of 12 months.

(2) Share Options① According to the “resolution on the first grant of share options to the incentive target of Haier Smart

Home Co., Ltd.” passed on the 23rd meeting of the 10th session of the Board of Directors of the Company on 15
September 2021, it was agreed that on the date of the first grant on 15 September 2021, 46,000,000 share options
would be granted to 400 qualifying incentive targets at the exercise price of RMB25.63 per Share.

Number for the

Number for thecurrent periodprevious period

Share Options

At the beginning of the period
Granted during the period

46,000,000.00

Vested during the period
Lapsed during the period
At the end of the period

46,000,000.00② According to the “resolution on the grant of share options reserved for the 2021 Share Option of A
Share Incentive Plan to the incentive target of Haier Smart Home Co., Ltd.” passed on the 25rd meeting of the10th session of the Board of Directors of the Company on 15 December 2021, it was agreed that on the date of348/366

Haier Smart Home Co., Ltd. 2021 Annual Report

the grant of reserved share options on 15 December 2021, 4,525,214 share options would be granted to 18
qualifying incentive targets at the exercise price of RMB25.63 per Share.

Number for the

Number for thecurrent periodprevious period

Share Options

At the beginning of the period
Granted during the period

4,525,214.00

Vested during the period
Lapsed during the period
At the end of the period

4,525,214.00(3) Restricted Shares(a) According to the arrangement in respect of the H Share Restricted Share Unit Plan (2021-2025)
considered and passed at the 2020 General Meeting held on 25 June 2021, the number of restricted shares grantedby the Company during the period was 4,438,027 Shares. Subject to the satisfaction of the predetermined result
condition by the Company, restricted shares granted and received would be vested on the first, second and third
anniversary of 1 August 2021, respectively.

(b)Changes of restricted share for the current period
Number for the

Number for thecurrent periodprevious period

Number of restricted shares

At the beginning of the period
Granted during the period

4,438,027.00

Vested during the period
Lapsed during the period
At the end of the period

4,438,027.00(4) Method of determining the fair value of equity instrument on the date of grant:(a) The Company has adopted the B-S model to determine the fair value of the share options.

The B-S model is subject to six variables: current price of the target share (S), exercise price of theoption (K), risk-free rate (r), valid term of the option (t), expected volatility of the share price (σ),
and the dividend rate of the target share (i).
Parameters selected for the calculation of the value of the option of the Company are as follows:
The first tranche (1) share price (S): RMB26.02 per share (closing price on the date of grant on 15
September 2021). (2) exercise price (K): RMB25.63 per share. (3) risk-free rate (r): according to thematurity yield rate of the China Government Bonds from Bloomberg’s system, the risk-free rate for one

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Haier Smart Home Co., Ltd. 2021 Annual Report

year was 2.40%; 2.54% for two years; 2.59% for three years; 2.67% for four years; and 2.74% for five
years, where the risk-free rate for the fourth year was calculated as the arithmetic average of the risk-freerate of the third and fifth year. (4) lifetime of the option (t): 1 year, 2 years, 3 years, 4 years and 5 years,
respectively (from the date of grant to the deadline of the first exercisable date of each tranche). (5)historical volatility rate (σ): 0.4050 (1 year); 0.3983 (2 years); 0.3864 (3 years); 0.3784 (4 years); 0.3568(5 years). The interval adopted for the calculation of historical volatility was the continuous closing priceof the Company in the preceding five years. At the same time, the historical volatility for the preceding 1,
2, 3, 4, and 5 years was calculated, respectively, based on the differences in waiting period. (6) yield rate(i) 1.4066% based on the yield rate shown in Bloomberg’s system on the valuation date (15 September2021), dividing the dividend per share by the closing price on the date of grant. According to thecalculation under the above pricing model, the theoretical aggregate value of the 46,000,000 share options
granted under this incentive plan of the Company amounted to RMB308,000,000.
The second tranche (1) share price (S): RMB29.40 per share (closing price on the date of grant on
15 December 2021). (2) exercise price (K): RMB25.63 per share. (3) risk-free rate (r): according to thematurity yield rate of the China Government Bonds from Bloomberg’s system, the risk-free rate for one
year was 2.30%; 2.49% for two years; 2.58% for three years; 2.64% for four years; and 2.70% for five
years, where the risk-free rate for the fourth year was calculated as the arithmetic average of the risk-freerate of the third and fifth year. (4) lifetime of the option (t): 1 year, 2 years, 3 years, 4 years and 5 years,
respectively (from the date of grant to the deadline of the first exercisable date of each tranche). (5)historical volatility rate (σ): 0.4040 (1 year); 0.4098 (2 years); 0.3891 (3 years); 0.3827 (4 years); 0.3584(5 years). The interval adopted for the calculation of historical volatility was the continuous closing priceof the Company in the preceding five years. At the same time, the historical volatility for the preceding 1,
2, 3, 4, and 5 years was calculated, respectively, based on the differences in waiting period. (6) yield rate(i) 1.2449% based on the yield rate shown in Bloomberg’s system on the valuation date (15 December2021), dividing the dividend per share by the closing price on the date of grant. According to thecalculation under the above pricing model, the theoretical aggregate value of the 4,525,214 share options
granted under this incentive plan of the Company amounted to RMB41,000,000.

(b) The fair value on the date of grant was arrived at on the basis of the share price of the Company on
the date of grant, taking into account the current value of cash dividend.

(5) Based on the latest available subsequent information, such as change in number of vesting employee,
result condition of the Company and evaluation of personal performance appraisal of incentive targets,
the Company makes the best estimation of the number of vesting equity instruments, based on which,
the Company includes services received for the current period in relevant costs of expenses in accordancewith the fair value of the equity instrument on the date of grant, and accordingly included in the capitalreserve.

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Expense recognized in respect of the share-based payment incentive plan for the period:
RMB209,000,000 for the stock ownership plan; RMB36,000,000 for the share options; andRMB20,000,000 for the restricted shares.

On 31 December 2021, balance associated with the above share-based payment incentive plansprovided in the capital reserve amounted to RMB262,000,000.

XIV. CONTINGENCIES□Applicable √ Not Applicable
As of 30 March 2022, the Company has no significant contingencies that need to be disclosed.
XV. EVENTS AFTER THE BALANCE SHEET DATE
1. According to the resolution of the 27th meeting of the Tenth session of the Board of Directors of
the Company held on 30 March 2022, the profit for the year is proposed to be distributed on the basis of
the total number of shares on the record date after deducting the repurchased shares from the repurchased
account when the plan is implemented in the future, the Company will declare cash dividend of RMB4.60(including taxes) for every 10 shares to all shareholders.
2. On the 26th meeting of the 10th session of the Board of Directors of the Company on 11 January2022, the “resolution on the placing of new H Shares under the general mandate of Haier Smart Home
Co., Ltd.” was considered and passed. According to the placing agreement, the Company intended toissue 41,413,600 H Shares. As at 21 January 2022, the Company had received, in aggregate, newly
injected capital (share capital) contributed by the shareholders of RMB41,413,600.
3.

The Company has subsidiaries in Russia engaging in the production and sale of home

appliances. As of the date of this report, the Russian-Ukrainian conflict has not imposed a material impact
on the Company's production and sales in Russia. The financial impact of the incident on the Company
is uncertain, but the Company will continue to assess the effects of the incident in the future as it develops.

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Haier Smart Home Co., Ltd. 2021 Annual Report

XVI. RISKS RELATED TO FINANCIAL INSTRUMENTS√Applicable□ Not Applicable

The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
Closing Balance
Financial assets

Financial assets

measured at fairmeasured at fair
Measured at

Items

value and changes

value and changes

Total

amortized costof which included inof which included incurrent profit and

other

loss

comprehensive income

Monetary funds

45,857,170,275.40

45,857,170,275.40

Financial assets held for
2,786,075,529.09

2,786,075,529.09

trading
Derivative financial assets

79,819,974.01

79,819,974.01

Receivable

13,354,791,068.29

13,354,791,068.29

Accounts receivable

14,631,018,397.43

14,631,018,397.43

Other receivables

1,955,082,163.25

1,955,082,163.25

Other current assets

316,590,333.42

316,590,333.42

Long-term receivables

308,998,755.30

308,998,755.30

Other equity instruments
Other non-current assets

4,848,709,438.96
46,832,494.61

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4,848,709,438.96
46,832,494.61

Haier Smart Home Co., Ltd. 2021 Annual Report

Financial assets (continued)
Opening Balance
Financial assets
Financial assets

measured at fairmeasured at fairvalue andvalue and changes

Measured atchangesof which included

amortized costof which included

Items
in

in

current profit and

other

loss

comprehensive

Total

incomeMonetary funds

46,467,732,459.51

46,467,732,459.51

Financial assets held for
2,165,192,497.83

2,165,192,497.83

trading
Derivative financial
77,839,006.63

77,839,006.63

assets
Receivable

14,136,349,754.34

14,136,349,754.34

Accounts receivable

15,930,024,286.67

15,930,024,286.67

Other receivables

1,717,691,799.32

1,717,691,799.32

Other current assets

554,131,037.76

554,131,037.76

Long-term receivables

330,588,978.97

330,588,978.97

Other equity
2,659,025,265.54

2,659,025,265.54

instruments
Other non-current assets

46,832,494.61

46,832,494.61

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Financial liabilities
Closing Balance
Financial liabilities

Financial liabilities

measured atmeasured atfair value

amortised cost

Items

Short-term borrowings

11,226,212,134.39

Total

11,226,212,134.39

Financial liabilities held
6,294,014.40

6,294,014.40

80,212,433.24

80,212,433.24

for trading
Derivative financial
liabilities
Bills payable

25,023,238,406.72

25,023,238,406.72

Accounts payable

42,344,857,144.49

42,344,857,144.49

Other payables

17,524,160,065.70

17,524,160,065.70

6,745,950,334.20

6,745,950,334.20

3,038,573,824.53

3,038,573,824.53

Bonds payable

334,730,048.82

334,730,048.82

Long-term payables

99,602,707.76

99,602,707.76

Non-current liabilities

due in one year
Long-term borrowings

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Haier Smart Home Co., Ltd. 2021 Annual Report

Financial liabilities (continued)
Opening Balance
Financial liabilities

Financial liabilities

measured atmeasured atfair value

amortised cost

Items

Short-term borrowings

7,687,908,165.88

Total

7,687,908,165.88

Financial liabilities held
26,952,508.66

26,952,508.66

239,582,532.90

239,582,532.90

for trading
Derivative financial
liabilities
Bills payable

21,236,057,053.67

21,236,057,053.67

Accounts payable

36,309,048,800.85

36,309,048,800.85

Other payables

17,063,294,004.33

17,063,294,004.33

4,950,555,670.08

4,950,555,670.08

Other current liabilities

5,535,262,500.00

5,535,262,500.00

Long-term borrowings

11,821,416,259.81

11,821,416,259.81

Bonds payable

6,713,501,050.27

6,713,501,050.27

98,203,261.27

98,203,261.27

Non-current liabilities

due in one year

Long-term payables

Please refer to related items in Note VII for details on each of the financial instruments of the Company.
Risks related to these financial instruments and the risk management policies taken by the Company tomitigate these risks are summarized below. The management of the Company manages and monitorsthese risk exposures to ensure the above risks are well under control.

1. Credit risk

The credit risk of the Company mainly arises from bank deposits, bills receivable, accounts
receivable, interest receivable, other receivables and wealth management products.

(1) The Company’s bank deposits and wealth management products are mainly deposited in Haier
Finance Co., Ltd., state-owned banks and other large and medium-sized listed banks. The interest

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Haier Smart Home Co., Ltd. 2021 Annual Report

receivables are mainly the accrued interests from fixed deposits which are deposited in the above banks.
The Group does not believe there is any significant credit risk due to defaults of its counterparties which
would cause any significant loss. (2) Accounts receivable and bills receivable: The Company only tradeswith approved and reputable third parties. All customers who are traded by credit are subject to credit
assessment according to the policies of the Company, and the payment terms shall be determined on areasonable basis. The Company monitors the balances of accounts receivable on an ongoing basis andpurchases credit insurance for receivables of large-amount credit customers in order to ensure theCompany is free from material bad debts risks. (3) Other receivables of the Company mainly include
export tax refund, borrowings and contingency provision. The Company strengthened its management
and continuous monitoring in respect of these receivables and relevant economic business based on
historical data, so as to ensure that the Company’s significant risk of bad debts is controllable and will
be further reduced.

2. Liquidity risk

Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling
obligations associated with financial liabilities. To control such risk, the Company utilizes various
financing methods such as notes settlement and bank loans to strive for a balance between sustainable
and flexible financing. It also has obtained bank credit facilities from several commercial banks to satisfy
its needs for working capital and capital expenditures.

3. Exchange rate risk

The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia, South Asia,
central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and other currencies.

The Company’s overseas assets and liabilities denominated in foreign currencies as well astransactions to be settled in foreign currencies expose the Company to fluctuations in exchange rates.
The Company’s finance department is responsible for monitoring the size of transactions in foreign
currencies and assets and liabilities denominated in foreign currencies to minimize the risk of exposure
to fluctuation in exchange rate; the Company resorts the way of signing forward foreign exchange
contracts to avoid the risk of exchange fluctuation.

4. Interest rate risk

The Company’s interest rate risk arises primarily from its long- and short- term bank loans andbonds payables which are interest-bearing debts. Financial liabilities with floating interest rates expose
the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the356/366

Haier Smart Home Co., Ltd. 2021 Annual ReportCompany to fair value interest rate risk. The Group determines the relative proportion of fixed-interest
rate and floating interest rate contracts in light of the prevailing market conditions.

XVII. OTHER SIGNIFICANT EVENTSThe Company has no other significant events that need to be disclosed.

XVIII. NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE
PARENT COMPANY

1. Accounts receivable
Aging

Closing BalanceWithin one year

Opening Balance

546,532,442.90

5,491,427,973.11

1–2 years

416,430.64

2–3 years
Over 3 years
Accounts receivable balance

546,532,442.90

5,491,844,403.75

Allowance for bad debts

308,333.33

Net receivables

546,532,442.90

5,491,536,070.42

The total amount of the top 5 accounts receivable at the end of the period was
RMB546,349,942.90, accounting for 99.97% of book balance of the accounts receivable.

Provision for bad debts is made on a portfolio basis:□ Applicable √ Applicable

Decrease for the current
Increase for the current period
periodClosing

Opening
Items

Provision for
Balance

Write-offOther

the current

Reversaland otherincrease
periodmovement

Allowance
308,333.33

308,333.33

for bad debts

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BalanceHaier Smart Home Co., Ltd. 2021 Annual Report

2. Other receivables
Presented by items√Applicable□ Not Applicable
Unit and Currency: RMB

Items

Closing Balance

Opening Balance

Interest receivable

51,632,471.99

Dividend receivable

3,615,840,000.00

Other receivables

12,577,807,696.42

3,867,790,953.50

16,245,280,168.41

3,906,373,387.61

Total

38,582,434.11

Interest receivable√Applicable□ Not Applicable
Unit and Currency: RMB
ItemClosing BalanceWithin 1 year

Opening Balance

51,632,471.99

38,582,434.11

51,632,471.99

38,582,434.11

More than 1 year
Total

Dividend receivable√Applicable□ Not Applicable
Unit and Currency: RMB
Aging

Within 1 year

Closing Balance

3,615,840,000.00

More than 1 year
Total

3,615,840,000.00

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Opening BalanceHaier Smart Home Co., Ltd. 2021 Annual Report

Other receivables① The disclosure of other receivables by aging is as follows:
Aging

Closing BalanceWithin one year

12,040,141,153.64

3,501,616,045.85

537,791,379.00

366,178,683.57

12,577,932,532.64

3,867,794,729.42

124,836.22

3,775.92

12,577,807,696.42

3,867,790,953.50

More than one year
Other receivables balance
Allowance for bad debts
Net other receivables

Opening Balance② The total amount of the top 5 other receivables at the end of the period is
RMB9,951,615,765.33, accounting for 79.12% of book balance of other receivables.

③Changes in bad debt provision for other receivables in the current period:
Increase for the current period

Decrease for the current period

Opening
Provision for
Items

Write-off

Closingand other

Balance

Balancethe current

Other increase

Reversal

periodmovement

Allowance
3,775.92

121,060.30

124,836.22

for bad debts

3. Long-term equity investment√Applicable□ Not Applicable(1) Details of long-term equity investments:
Unit and Currency: RMB
Closing Balance
Items

Opening Balance

Provision forBook balance

Provision forBook balance

impairment

Investments to subsidiaries

impairment

49,377,425,428.31

7,100,000.00

49,231,447,092.82

7,100,000.00

3,252,734,849.46

109,300,000.00

3,175,179,977.39

109,300,000.00

52,630,160,277.77

116,400,000.00

52,406,627,070.21

116,400,000.00

Investments to associates and joint

venturesTotal(2) Long-term equity investments to subsidiaries

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Haier Smart Home Co., Ltd. 2021 Annual Report

Impairment
provisions
Increase/Decrease
Investee

Opening Balance

Closing Balanceat the end

for the periodof theperiodI. Subsidiaries:
Chongqing Haier Electronics Sales Co., Ltd.

9,500,000.00

9,500,000.00

34,735,489.79

34,735,489.79

Qingdao Haier Refrigerator Co., Ltd.

402,667,504.64

402,667,504.64

Qingdao Haier Special Refrigerator Co., Ltd.

329,832,047.28

329,832,047.28

102,888,407.30

102,888,407.30

Dalian Haier Precision Products Co., Ltd.

41,836,159.33

41,836,159.33

Hefei Haier Plastic Co., Ltd.

42,660,583.21

42,660,583.21

Qingdao Haier Technology Co., Ltd.

16,817,162.03

16,817,162.03

66,778,810.80

66,778,810.80

Qingdao Meier Plastic Powder Co., Ltd.

24,327,257.77

24,327,257.77

Chongqing Haier Precision Plastic Co., Ltd.

47,811,283.24

47,811,283.24

Qingdao Haier Electronic Plastic Co., Ltd.

48,000,000.00

21,200,000.00

69,200,000.00

Dalian Haier Refrigerator Co., Ltd.

99,000,000.00

39,600,000.00

138,600,000.00

Dalian Haier Air-conditioning Co., Ltd.

99,000,000.00

99,000,000.00

Guizhou Haier Electronics Co., Ltd.

96,904,371.71

96,904,371.71

Hefei Haier Air-conditioning Co., Limited

67,110,323.85

67,110,323.85

Qingdao Haier Refrigerator (International) Co., Ltd.

238,758,240.85

238,758,240.85

Qingdao Haier Air-Conditioner Electronics Co., Ltd.

1,113,433,044.51

Haier Group (Dalian) Electrical Appliances Industry
Co., Ltd

Qingdao Haier Information Plastic Development Co.,Ltd.

Qingdao Household Appliance Technology andEquipment Research Institute

Qingdao Haier Air Conditioner Gen Corp., Ltd.

220,636,306.02

Qingdao Haier Special Freezer Co., Ltd.

442,684,262.76

360/366

17,674,900.00

1,131,107,944.51
220,636,306.02

28,846,300.00

471,530,562.76

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier Dishwasher Co., Ltd.

206,594,292.82

206,594,292.82

Wuhan Haier Freezer Co., Ltd.

47,310,000.00

47,310,000.00

Wuhan Haier Electronics Holding Co., Ltd.

100,715,445.04

100,715,445.04

Chongqing Haier Air-conditioning Co., Ltd

100,000,000.00

100,000,000.00

Hefei Haier Refrigerator Co., Ltd.

49,000,000.00

49,000,000.00

118,000,000.00

118,000,000.00

91,750,000.00

91,750,000.00

2,000,000.00

2,000,000.00

100,000,000.00

100,000,000.00

26,022,782,526.24

26,022,782,526.24

Shenyang Haier Refrigerator Co., Ltd.

100,000,000.00

100,000,000.00

Foshan Haier Freezer Co., Ltd.

100,000,000.00

100,000,000.00

Zhengzhou Haier Air-conditioning Co., Ltd.

100,000,000.00

100,000,000.00

Qingdao Haidayuan Procurement Service Co., Ltd.

20,000,000.00

20,000,000.00

130,000,000.00

130,000,000.00

Qingdao Haier Technology Investment Co., Ltd.

367,505,635.00

367,505,635.00

Qingdao Casarte Smart Living Appliances Co., Ltd.

10,000,000.00

10,000,000.00

Haier Overseas Electric Appliance Co., Ltd.

500,000,000.00

500,000,000.00

Haier (Shanghai) Electronics Co., Ltd.

12,500,000.00

12,500,000.00

143,000,000.00

143,000,000.00

Qingdao Haier Whole Set Home Appliance Service
Co., Ltd.
Chongqing Haier Refrigeration Appliance Co., Ltd.
Haier Shanghai Zhongzhi Fang Chuang Ke
Management Co., Ltd.
Qingdao Haier Special Refrigerating Appliance Co.,Ltd.
Haier Shareholdings (Hong Kong) Limited

Qingdao Haier Intelligent Technology Development
Co., Ltd.

Haier U+smart Intelligent Technology (Beijing) Co.,Ltd.
Haier Electronics Group Co., Ltd.

16,730,707,938.63

Flourishing Reach Limited (SPVX)
Qingdao Haidarui Procurement Service Co., Ltd.

107,800,000.00

361/366-12,751,300,336.02

3,979,407,602.61

12,751,300,336.02

12,751,300,336.02
107,800,000.00

7,100,000.00

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier Intelligent Household Appliances Co.,
326,400,000.00

326,400,000.00

100,000,000.00

100,000,000.00

Ltd.
Qingdao Haidacheng Procurement Service Co., Ltd.
Qingdao Haier Quality Inspection Co., Ltd.

18,657,135.49

18,657,135.49

20,000,000.00

20,000,000.00

Qingdao Haier Home AI Industry Innovation Center
Co., Ltd.
Haier Zhijia Experience Cloud Ecological
100,000,000.00

100,000,000.00

Technology Co., Ltd.
Total

49,231,447,092.82

145,978,335.49

49,377,425,428.31

7,100,000.00(3) Long-term equity investments to associates
Increase/Decrease for the current period
Increased/

Investment

Openingdecreased

incomeBalanceamount forrecognized

the current

under equity

periodmethodName of investee

Impairment

OthersClosingprovisions at

Balancethe end of
the period

Wolong Electric
136,709,910.73

24,389,362.58-15,890,000.00

145,209,273.31

385,797,036.73

90,366,894.80-82,565,558.94

393,598,372.59

975,756,025.82

78,881,075.12-3,156,237.67

1,051,480,863.27

654,581,961.84

94,920,014.89-66,600,000.00

682,901,976.73

415,298,165.93

18,829,952.52-25,074,310.40

409,053,808.05(Jinan) Motor Co., Ltd.
Qingdao Haier SAIF
Smart Home Industry
Investment Center(Limited Partnership)
Bank of Qingdao Co.,Ltd.
Mitsubishi Heavy
Industries Haier(Qingdao) Airconditioners Co., Ltd.
Qingdao Haier Carrier
Refrigeration Equipment

Co., Ltd.

362/366

21,000,000.00

Haier Smart Home Co., Ltd. 2021 Annual Report

Qingdao Haier
328,987,205.06-51,884,641.19

277,102,563.87

278,049,671.28

20,073,071.70-4,734,751.34

293,387,991.64

3,175,179,977.39

275,575,730.42-198,020,858.35

3,252,734,849.46

88,300,000.00

Multimedia Co., Ltd
Hefei Hegang New
Material Technology
Co., Ltd.
Total

109,300,000.00

4. Operating revenue and operating cost
(1) Information of operating revenue and operating cost
√Applicable□ Not Applicable
Unit and Currency: RMB
Amount for the current period

Amount for the previous period

Revenue

Revenue

Cost

Items
Cost

Primary Business

208,799,283.50

197,653,713.44

7,221,635,652.63

5,941,477,236.22

Other Business

144,998,965.02

117,703,392.70

146,005,360.76

126,176,580.13

Total

353,798,248.52

315,357,106.14

7,367,641,013.39

6,067,653,816.35

5. Investment income√Applicable□ Not Applicable
Unit and Currency: RMB
Amount for the previous
Items

Amount for the current period
periodInvestment income from long-term equity
investment accounted for using cost method

3,633,540,000.00

191,366,562.3000

275,575,730.42

111,755,685.69

Long-term equity investments income
calculated by the equity method
Investment income generated from disposal
3,962,491,511.91

of long-term equity investment
Income from wealth management products

9,015,443.80

17,628,284.37

269,896.34

268,193.52

3,918,401,070.56

4,283,510,237.79

Investment income from investment in other
equity instrument during the holding period
Total

363/366

Haier Smart Home Co., Ltd. 2021 Annual Report

XIX. APPROVAL OF FINANCIAL REPORTThis financial report was approved for publication by the Directors of the Company on
30 March 2022.

XX. OTHER SUPPLEMENTARY INFORMATION
1. Basic earnings per share and diluted earnings per share
Amount for the current period

Amount for the previous period

Earnings per share

Earnings per share

Weighted

Weighted
(RMB)

Items

(RMB)

averageaverage
Basic

DilutedreturnBasic

Dilutedearnings

earnings

per shareper share

returnearnings

earnings

on net assets

on net assets
per shareper share

17.29%

1.41

1.40

17.68%

1.34

1.31

15.65%

1.27

1.27

12.85%

0.97

0.94

Net profit attributable toordinary shareholders of
the Company
Net profit attributable toordinary shareholders of
the Company after
deduction of non-recurring
profit or loss

1.Details of extraordinary profit and loss for the current period√Applicable □ Not Applicable
Unit and Currency: RMB
Items

Amounts

Profit or loss from disposal of non-current assets

95,443,538.78

Government subsidies included in current profit or loss, except for government
subsidies that are closely related to the Company's business , to be enjoyed in a

717,084,575.78

fixed amount or fixed quantity according to national unified standards
Net profit or loss of subsidiaries arising from business combinations undercommon control of the current period from the beginning of the period to the-1,015,618.64

date of consolidation
Profit or loss from fair value changes of financial assets held for trading,derivative financial assets, financial liabilities held for trading and derivative

364/366

512,402,328.52

Haier Smart Home Co., Ltd. 2021 Annual Reportfinancial liabilities, as well as investment gains arising from disposal of
financial assets held for trading, derivative financial assets, financial liabilities
held for trading and derivative financial liabilities and other debt investments,
except the effective hedging related to the normal operations of the Company
Other non-operating income and expenses except the aforementioned items

60,282,401.05

reduction: Effect of income tax

135,105,480.15

Effect of minority equity interest (After Tax)

13,326,031.78
1,235,765,713.56

Total

Chairman: Liang Haishan

Date of approval for publication by the Board:30 March 2022

Revised information□ Applicable √ Not Applicable

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Haier Smart Home Co., Ltd. 2021 Annual Report

Section XI Responsibility Statement“As the executive directors of the Board of Haier Smart Home Co., Ltd, we hereby confirm to the bestof our knowledge, and in accordance with the applicable reporting principles, that the financial
statements give a true and fair view of the assets, liabilities, financial position and profit or loss of thecompany; and the management report includes a fair review of the development and performance of thebusiness including the results and the position of the company, together with a description of the principal
opportunities and risks associated with the expected development of the company.”

Qingdao, 30 March 2022

The Board of Haier Smart Home Co., Ltd

Liang Haishan______________

Li Huagang______________

XieJuzhi______________

366/366