2014 Annual Report of Wuxi Little Swan Company Limited
Wuxi Little Swan Company Limited
2014 Annual Report
March 2015
2014 Annual Report of Wuxi Little Swan Company Limited
Section I. Important Reminders, Catalogue & Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of Wuxi Little Swan Company Limited (hereinafter referred to as ―the Company‖)
warrant that this report is factual, accurate and complete without any false record, misleading
statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company‘s profit distribution preplan upon review and approval of this board session: Based
on the total shares of the Company as at 31 Dec. 2014, a cash dividend of RMB 4.50 (tax included)
will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no
capital reserve will be turned into share capital.
Mr. Fang Hongbo, chairman of the board, Mr. Sun Yunan, CFO, and Mr. Zhong Fangliu, chief of
the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in
this report is factual, accurate and complete.
This report involves futures plans and some other forward-looking statements, which shall not be
considered as virtual promises to investors. Investors are kindly reminded to pay attention to
possible risks.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
2014 Annual Report of Wuxi Little Swan Company Limited
Catalogue
Section I. Important Reminders, Catalogue & Explanation .......................................................... 2
Section II. Company Profile .............................................................................................................. 5
Section III. Accounting & Business Highlights ............................................................................... 7
Section IV. Report of the Board of Directors ................................................................................... 9
Section V. Significant Events ........................................................................................................... 29
Section VI. Change in Shares & Shareholders .............................................................................. 39
Section VII. Directors, Supervisors, Senior Management Staff & Employees ........................... 46
Section VIII. Corporate Governance ............................................................................................. 54
Section IX. Internal Control ........................................................................................................... 58
Section X. Financial Report ............................................................................................................ 60
XI. Documents Available for Reference ....................................................................................... 178
2014 Annual Report of Wuxi Little Swan Company Limited
Explanation
Term Refers to Contents
Company, the Company or Little Swan Refers to Wuxi Little Swan Company Limited
Midea Group Refers to Midea Group Co., Ltd.
TITONI Refers to TITONI INVESTMENTS DEVELOPMENT LTD.
Midea Group Finance Refers to Midea Group Finance Co., Ltd.
Midea Holding Refers to GD Midea Holding Co., Ltd.
Hefei Midea Washing Machine Refers to Hefei Midea Washing Machine Co., Ltd.
Wuxi Little Swan General Appliance Refers to Wuxi Little Swan General Appliance Co., Ltd.
Wuxi FILIN Electronics Refers to Wuxi FILIN Electronics Co., Ltd.
Guangzhou Hualing Air Conditioner Refers to Guangzhou Hualing Air Conditioner Equipment Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
Reporting period Refers to 1 Jan. 2014-31 Dec. 2014
2014 Annual Report of Wuxi Little Swan Company Limited
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation XTEA, XTEB Stock code 000418, 200418
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 无锡小天鹅股份有限公司
Abbr. of the Chinese name of the Company 小天鹅
English name of the Company (if any) Wuxi Little Swan Company Limited
Legal representative of the Company Mr. Fang Hongbo
No. 18, Changjiang Road S., National Hi-tech Development Zone, Wuxi, Jiangsu
Registered address
Province
Postal code for the registered address 214028
No. 18, Changjiang Road S., National Hi-tech Development Zone, Wuxi, Jiangsu
Office address
Province
Postal code for the office address
Internet website of the Company http://www.littleswan.com
Email address IR_littleswan@littleswan.com.cn
II. For Contact
Company Secretary Securities Affairs Representative
Name Ms. Zhou Sixiu Mr. Zhao Yulin
No. 18, Changjiang Road S., National No. 18, Changjiang Road S., National
Contact address
Hi-tech Development Zone, Wuxi Hi-tech Development Zone, Wuxi
Tel. 0510-81082320 0510-81082377
Fax 0510-83720879 0510-83720879
E-mail IR_littleswan@littleswan.com.cn IR_littleswan@littleswan.com.cn
III. About information disclosure and where this report is placed
Newspapers designated by the Company for information disclosure Securities Times, Ta Kung Pao (HK)
Internet website designated by CSRC for disclosing this report http://www.cninfo.com.cn
Where this report is placed Securities Department of the Company
2014 Annual Report of Wuxi Little Swan Company Limited
IV. Changes in the registered information
Registration code Organizational
Registration date Registration place Business license No.
of taxation code
Industrial and Commercial
Initial registration 29 November 1993 Administration Bureau of 13590586-X-1 320200704046760 70404676-0
Wuxi, Jiangsu
Industrial and Commercial
At the end of the
25 March 2011 Administration Bureau of 320200000014723 320200704046760 70404676-0
reporting period
Wuxi, Jiangsu
Changes of the main business since listing
Unchanged
(if any)
Changes of the controlling shareholder (if
Unchanged
any)
V. Other information
The CPAs firm hired by the Company:
Name Jiangsu Gongzheng Tianye Certified Public Accountants LLP
Office address No. 28, Liangxi Road, Wuxi
Signing accountants Xia Zhengshu, Yu Zhiqiang
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Inapplicable
Name Office address Sponsor representative Consistent supervision period
From 4 Aug. 2006 to the date when all non-tradable
25/F, CTS Tower, No. 4011
Huatai United share holders pay off the considerations that have been
Shennan Road, Shenzhen, Bian Jianguang
Securities Co., Ltd. paid in advance for them and the non-tradable shares
Guangdong
are unlocked.
Financial consultant engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Inapplicable
2014 Annual Report of Wuxi Little Swan Company Limited
Section III. Accounting & Business Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the
accounting policy or correction of any accounting error?
□ Yes √ No
Increase or decrease
2014 2013 of this year over last
year (%)
Operating revenue (RMB Yuan) 10,804,217,288.60 8,727,956,044.37 23.79% 6,899,863,926.81
Net profit attributable to shareholders of the
698,195,731.48 413,350,079.54 68.91% 338,387,680.99
Company (RMB Yuan)
Net profit attributable to shareholders of the
Company after extraordinary gains and 549,737,253.68 310,261,096.43 77.19% 341,978,755.36
losses (RMB Yuan)
Net cash flows from operating activities
1,657,114,317.33 904,882,101.01 83.13% 344,757,698.15
(RMB Yuan)
Basic EPS (RMB Yuan/share) 1.10 0.65 69.23% 0.54
Diluted EPS (RMB Yuan/share) 1.10 0.65 69.23% 0.54
Weighted average ROE (%) 16.73% 10.88% 5.85% 9.59%
Increase or decrease
As at 31 Dec. 2014 As at 31 Dec. 2013 of this year-end than As at 31 Dec. 2012
last year-end (%)
Total assets (RMB Yuan) 11,376,793,928.71 9,222,527,380.74 23.36% 8,403,705,443.29
Net assets attributable to shareholders of the
4,427,982,112.33 3,908,897,654.74 13.28% 3,686,210,495.87
Company (RMB Yuan)
II. Items and amounts of extraordinary gains and losses
Unit: RMB Yuan
Item 2014 2013 2012 Notes
Gain/loss on the disposal of non-current assets (including the
-3,482,781.03 -1,078,789.83 5,388,076.41
offset part of the asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at 19,316,074.38 23,748,858.49 23,335,697.60
certain quotas or amounts according to the government‘s unified
2014 Annual Report of Wuxi Little Swan Company Limited
standards
Gain/loss on debt restructuring 7,708,285.28 2,807,241.09 9,007,539.11
Impairment provision reversal of accounts receivable on which
733,146.16
the impairment test is carried out separately
Effect on current gains/losses when a one-off adjustment is made
to current gains/losses according to requirements of taxation, 7,701,506.00 308,469.59
accounting and other relevant laws and regulations
Non-operating income and expense other than the above 7,821,536.57 9,283,944.96 7,166,257.62
Other gain and loss items that meet the definition of an
162,708,030.89 97,565,087.41 -33,250,000.00
extraordinary gain/loss
Dismissal expenses -17,259,177.65 -5,944,610.29 -4,606,067.30
Less: Income tax effects 11,994,501.34 9,485,975.81 6,042,660.17
Minority interests effects (after tax) 24,060,495.30 14,848,388.66 4,589,917.64
Total 148,458,477.80 103,088,983.11 -3,591,074.37
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
2014 Annual Report of Wuxi Little Swan Company Limited
Section IV. Report of the Board of Directors
I. Overview
(I) Sum-up
Domestically, 2014 witnessed a slowdown in growth of the macro economy, a continuously sluggish real estate
market, low-running prices of raw materials and increasingly steady development of the washing machine
industry. Internationally, the export environment improved as the market was boosted by the gradual recovery of
the US economy and the growing emerging economies. According to statistics from ChinaIOL, China sold a total
of 56.3642 million units of washing machines in 2014, up 0.77% from the year earlier, of which 37.6195 million
units were sold domestically, representing a slight YoY drop, and 18.7447 million units were exported, increasing
2.75% year on year. In the year, great changes happened in the competitive landscape of the household appliance
industry. Merger among international household appliance tycoons accelerated, resulting in a reshuffle in the
global household appliance market. Thanks to development of the Internet, cloud computing and the Internet of
Things, Chinese home appliance makers entered the first year of intelligence. 2014 witnessed obvious
consumption upgrading and accelerated restructuring in the washing machine industry. The proportion of
middle-and high-end products increased, with a considerable growth in the sales volume of roller, large-capacity
and inverter washing machines. Washing machines were made more automatic and intelligent. Meanwhile,
distribution channels diversified, with a surge in online sales.
In face of the slowdown in growth of the industry and changes in the domestic and overseas environments, closely
adhering to the strategic axis of ―leading products, efficiency-driven and global operation‖, we focused on our
main business, improved products, kept pushing forward and deepening operation transformation, and improved
our operational quality in an all-round way. In 2014, we continued to optimize our product structure, improve our
product quality and steadily increase the operating efficiency, which further solidified our capability of
sustainable development. For the reporting period, the Company achieved operating revenues of RMB 10.804
billion, up 23.79% from the year earlier; net profit attributable to shareholders of the Company stood at RMB 698
million, representing a YoY growth of 68.91%; and the overall gross profit rate stood at 25.89%, increasing by
0.93 percentage points from last year.
(II) Work done in 2014
2014 Annual Report of Wuxi Little Swan Company Limited
1. Increase of both the domestic and overseas sales
In terms of domestic distribution in 2014, we continued to
tap traditional channels to increase the coverage and
effectiveness of our network, and carried out level-to-level
channel administration and petty & fast distribution and
replenishment to increase the turnover speed. Meanwhile,
we vigorously expanded online channels and continued to
enhance cooperation with all major e-commerce platforms.
As a result, online sales improved significantly, with the
sales in the shopping spree on Nov. 11th exceeding RMB
100 million. We also enhanced market promotion through
events such as the ―Little Swan I-intelligence Exhibition
Tour‖ and the ―Little Swan & Movie Lucy Joint
Promotion‖ to increase our brand recognition. In the
reporting period, we achieved a steady growth in domestic sales, with the profitability greatly improved.
As for export in 2014, we continued to enhance expansion in strategic and mature markets, proacti
