Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022
Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2022
August 2022
Chapter 1 Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, as well as the directors, supervisors and senior
management of Hangzhou Robam Appliances Co., Ltd. (the Company) hereby guarantee that there are
no false representations, misleading statements, or material omissions in this Semi-Annual Report (“the
Report”), and are severally and jointly liable for the authenticity, accuracy and completeness of the
information contained herein.Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’s
accounting, and Zhang Guofu, the head of the accounting department (the accountant in charge) hereby
declare and warrant that the financial report contained in the Report is authentic, accurate, and
complete.All the directors attended a board meeting, during which they reviewed the Report. The Company
is exposed to risks such as fluctuations in the real estate market, price fluctuations of raw materials and
intensified market competition, so investors shall pay attention to
investment risks.
The Company does not plan to distribute cash dividends or bonus shares, or convert capital reserve
into capital stock.
Contents
Chapter 1 Important Notes, Contents and Interpretations ...... 1
Chapter 2 Company Profile and Major Financial Indicators ...... 5
Chapter 3 Management Discussion and Analysis ...... 8
Chapter 4 Corporate Governance ...... 17
Chapter 5 Environmental and Social Responsibilities ...... 20
Chapter 6 Significant Matters ...... 21
Chapter 7 Changes in Shares and Shareholders ...... 25
Chapter 8 Preferred Shares ...... 31
Chapter 9 Bonds ...... 32
Chapter 10 Financial Report ...... 33
Documents available for reference
I. Financial statement signed by the legal representative, the person in charge of accounting and the head of the
accounting department and affixed with seal.
II. Original copies of documents and announcements of the Company published in the newspaper designated by
China Securities Regulatory Commission during the Reporting Period.
III. The Semi-Annual Report 2022 signed by the legal representative.
IV. Other information.
Interpretations
- 4 -
Item
| Item | refer(s) to | Contents |
| The Company, Company, Robam Appliances | refer to | Hangzhou Robam Appliances Co., Ltd. |
| MingQi | refers to | Hangzhou MingQi Electric Co., Ltd. |
| Kinde Subsidiary | refers to | Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. |
| Robam Group | refers to | Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company |
| The reporting period | refers to | The first half of 2022 |
| AVC | refers to | Beijing All View Cloud Data Technology Co., Ltd. |
Chapter 2 Company Profile and Major Financial Indicators
I. Company Profile
- 5 -Stock abbreviation
| Stock abbreviation | Robam | Stock code | 002508 |
| Stocks traded on | Shenzhen Stock Exchange | ||
| Chinese name of the Company | Hangzhou Robam Appliances Co., Ltd. | ||
| Short Chinese name of the Company (if any) | Robam | ||
| Legal representative of the Company | Ren Jianhua | ||
II. Contact Person and Contact Information
| Secretary of the Board of Directors | Representative of securities affairs | |
| Name | Wang Gang | Jiang Yu |
| Contact address | No. 592, Linping Avenue, Linping District, Hangzhou, Zhejiang Province | No. 592, Linping Avenue, Linping District, Hangzhou, Zhejiang Province |
| Telephone | 0571--86187810 | 0571--86187810 |
| Fax | 0571--86187769 | 0571--86187769 |
| wg@robam.com | jy@robam.com |
III. Other Information
1. Contact information
Whether the registered address, office address and zip code as well as the website and email address of the Company changed
during the reporting period?
□Applicable √ Not applicable
There are no changes in the registered address, office address and zip code as well as the website and email address of the Company
during the reporting period. For details, please refer to the Annual Report 2021.
2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□Applicable √ Not applicable
During the reporting period, there were no changes in the newspapers designated by the Company for information disclosure, the
website designated by China Securities Regulatory Commission (CSRC) for publishing the semi-annual report, and the location for
filing the semi-annual report of the Company. For details, please refer to the Annual Report 2021.
IV. Other information
Whether other relevant information changed during the reporting period?
□Applicable √ Not applicable
IV. Key Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years?
□ Yes √ No
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Whether there are differences in the net profit and net asset disclosed in the Financial Report under
International Accounting Standards (IAS) and China’s accounting standards?
□Applicable √Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standards
during the reporting period.
2. Whether there are differences in the net profit and net asset disclosed in the Financial Report under
foreign accounting standards and China’s accounting standards during?
□Applicable √Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and
China’s accounting standards during the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses
√Applicable □Not applicable
In RMB
- 6 -Item
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) | -34,179.72 | |
| Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) | 70,291,099.51 | |
| Reversal of provision for impairment of receivables separately tested for impairment | 35,248,286.47 | |
| Other non-operating revenues and expenses except the above items | 1,209,871.06 | |
| Less: Affected amount of income tax | 16,069,241.63 | |
| Affected amount of minority shareholders’ equity (after tax) | 2,941,538.51 | |
| Total | 87,704,297.18 |
Other items of gains and losses meeting the definition of non-recurring gains and losses: □Applicable √ Not applicable
The Company does not have other items of gains and losses meeting the definition of non-recurring gains and losses.
| The reporting period | The same period last year | YoY change | |
| Operating Income (RMB) | 4,444,310,099.69 | 4,326,082,031.62 | 2.73% |
| Net profit attributable to shareholders of the listed company (RMB) | 723,549,381.25 | 790,388,759.79 | -8.46% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains/losses (RMB) | 635,845,084.07 | 746,385,371.21 | -14.81% |
| Net cash flow from operating activities (RMB) | 322,855,122.33 | 730,222,059.09 | -55.79% |
| Basic earnings per share (EPS) (RMB/share) | 0.76 | 0.83 | -8.43% |
| Diluted EPS (RMB/share) | 0.76 | 0.83 | -8.43% |
| Weighted average return on net assets | 8.05% | 9.49% | -1.44% |
| End of the reporting period | End of last year | Change | |
| Total assets (RMB) | 13,982,964,746.92 | 13,906,035,181.12 | 0.55% |
| Net assets attributable to shareholders of the listed company (RMB) | 8,882,527,028.79 | 8,627,026,739.27 | 2.96% |
Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred to
as “Announcement No.1”) are defined as recurring gains and losses
□Applicable √ Not applicable
There is no circumstance where the items of non-recurring gains and losses enumerated in accordance with the Announcement
No.1 are defined as recurring gains and losses.
Chapter 3 Management Discussion and Analysis
I. Main Businesses during the Reporting Period
In the first half of 2022, the kitchen appliance industry as a whole was in sluggish growth in the face of major
unfavorable factors such as the recurrence of the COVID-19 epidemic, the sharp downturn in the real estate industry and
the rise in comprehensive costs of the Company, but the industry concentration continued to rise. In terms of the retail
channel, as shown in AVC monthly data report based on offline retail monitoring (“AVC Offline Report”), the retail sales
of the main categories of kitchen appliances, i.e., range hoods and gas stoves, fell by 23.5% and 18.5% respectively,
compared to that of the last year. In terms of the e-commerce channel, as shown in AVC monthly data report based on
online retail monitoring (“AVC Online Report”), the year-on-year (YoY) growth of the retail sales of the kitchen
appliances package registered 1.1%. In terms of the engineering channel, as shown in the AVC Real Estate Big Data
(“AVC Real Estate Report”), the rate of equipping standard range hoods and stoves remained more than 95%, the rate of
equipping disinfection cabinets continued to decline as it lost part of the market as a result of the disinfection function of
dishwashers, and the rate of equipping dishwashers and combi-steam ovens as new categories of kitchen appliances
gradually increased; the rate of equipping dishwashers from January to May 2022 was 26.5%, a YoY growth of 9.6%, and
that of combi-steam ovens was 2.8%, a YoY growth of 0.7%. As the epidemic has been basically under control since June
and a series of national incentive policies have been released, coupled with kitchen appliances having the attribute of
durable household appliances, the demand for kitchen appliances will remain despite of the epidemic disturbance, which is
expected to be unleashed gradually in the second half of the year.
As a leading company in the industry, the Company has tightly focused on the annual management concept of “Ride
the momentum, build dreams, and lead the development of the industry”, and has taken innovation in the kitchen appliance
category as the driving force, realizing a significant increase in market share in all categories. According to the AVC
Offline Report, the retail sales and retail market share of the Robam range hoods were 31.7% and 25.6%, respectively, a
YoY growth of 1.1% and 1.5%. According to the AVC Online Report, the retail sales and retail market share of the
Robam kitchen appliances package were 31.7% and 25.1%, respectively, a YoY growth of 3.1% and 3.8%. The retail sales
and retail market share of the built-in dishwashers increased significantly to 12.8% from 6.8% in the same period last year.
In the face of many unfavorable factors in the first half of the year, the Company achieved operating income of RMB
4.444 billion, a YoY growth of 2.73%, which was significantly higher than the industry average level.
As of June 30, 2022, according to AVC Offline Report, the market shares and market rankings of the Company’s main
product categories in terms of offline retail sales are shown in the following:
Table:
As of June 30, 2022, according to AVC Online Report, the market shares and market rankings of the Company’s
main product categories in terms of online retail sales are shown in the following:
Table:
- 9 -
Kitchenappliancepackage
| Kitchen appliance package | 2-piece package of range hood and stove | Range hoods | Gas stove | Built-in combi-steam oven | Built-in electric steam oven | Built-in dishwasher |
| 31.7% | 33.9% | 15.0% | 8.8% | 16.0% | 27.3% | 12.8% |
| 1 | 1 | 1 | 5 | 3 | 1 | 2 |
As of June 30, 2022, according to AVC Real Estate Report, the market share of Robam range hoods in the finedecoration channel was 29.2%, ranking No.2 in the industry. In the first half of 2022, in terms of the technology, theCompany insisted on the product innovation, combining science and technology with kitchen appliances and continuingto promote cooking reform from product hardware innovation to the construction of digital cooking ecosystem. In termsof the hardware, kitchen appliances technology was iteratively upgraded to lead the development of the industry in an all-round way. “Ultra-slim technology” opens up a new form in the field of range hood and achieves a technologicalbreakthrough in ultra-slim air duct and super wind pressure; “hybrid technology” breaks the boundary of steaming andbaking and realizes the combination of multi-stage cooking steps of steaming, baking and frying; “Guangyan technology”breaks down functional barriers and realizes the function integration in terms of “washing, disinfection, drying andstorage” of dishwashers; “integrated technology” takes the integrated stove as the starting point and it marks the first stepinto the field of integrated kitchen; “cold cooking technology” launches cold cooking refrigerator and achieves the fulllayout of kitchen appliances. In terms of the software, Robam established the world’s largest research library of ChineseAI cooking curves to restore the taste of Chinese kitchens with technology and enhance the soft power of kitchenappliances. In the first half year of 2022, the Company applied for 754 patents, including 223 invention patents, andparticipated in the formulation of 12 standards, 5 of which were led by the Company. As of June 30, 2022, a total of2,658 patents were granted, including 78 invention patents; the Company participated in the formulation of 108international, national, industry and group standards, 28 of which were led by the Company. The technologicalinnovation capability has been continuously recognized by the industry, and the project of “Research and Developmentand industrialization of the Technology Reducing the Noise of and Improving the Sound Quality of Range Hood” wonthe first prize of Science and Technology Progress Award of China National Light Industry Council in 2021.In the first half of 2022, in terms of the marketing, the Company continued to strengthen the high-end brand
| Range hoods | Gas stove | Disinfection cabinet | Built-in combi-steam oven | Built-in electric steam oven | Built-in electric oven | Built-in dishwasher |
| 31.7% | 30.1% | 22.5% | 35.7% | 23.9% | 36.6% | 17.4% |
| 1 | 1 | 2 | 1 | 2 | 2 | 2 |
positioning, superimpose the advantages of new and old product categories of kitchen appliances and stimulate the vitality
of multiple channels, so as to provide comprehensive and customer-centered solutions for kitchen appliances. For the retail
channel, with high-end positioning as the advantage, products as the carrier and service as the guarantee, the Company
promoted the marketing digitalization, accelerated the establishment of channels in lower-tier cities, and optimized channel
efficiency. For the e-commerce channel, relying on the new and old media matrix and mutual empowerment between high-
quality products and flow resources, the Company strengthened the brand position and improved channel efficiency. For the
innovation, the Company accurately positioned and deeply sought the existing market resources, and cooperated with
leading whole house customization companies and home decoration companies, to obtain the front-end flow and enrich the
consumption scenarios. For the engineering channel, the Company improved the awareness of risk control, optimized the
customer structure, and made use of the advantages of old product categories to drive the continuous improvement of the
permeability of new product categories, so as to provide kitchen appliance product package solutions for fine decoration
houses. For the overseas channel, the Company steadily promoted the global layout and brand internationalization.In the first half of 2022, in terms of the production, the Company focused on the theme of “strengthening organization,
seeking development and promoting reform”, and comprehensively implemented the three core strategies of “precise
delivery, high-quality manufacturing and data-driven approach”, to constantly develop into one of the most competitive
benchmarking enterprises in China's manufacturing industry. Through the digital construction of the whole industrial chain,
the Company achieved scientific and accurate product demand forecast, and successfully completed the reform of direct
distribution and delivery in more than 10 regions across the country, with the order satisfaction of users continuously
improved. Meanwhile, the Company constantly improved the supply chain management system, implemented meticulous
production management, and applied innovative processes and technologies, so as to ensure the high-quality delivery of new
and old product categories of kitchen appliances. As the first intelligent manufacturing base in China's kitchen appliance
industry, the Robam digital intelligent manufacturing base takes the lead in the overall digitalization upgrading of the
industry, which has been selected as one of the first batch of “future factories” in Zhejiang Province. In addition, the
Maoshan Intelligent Manufacturing Park Project has been gradually put into use, and the upgrading of intelligent
manufacturing will further improve production efficiency and lay a solid foundation for the long-term development of the
Company.
In the first half of 2022, in terms of the brand, the Company insisted on the brand marketing theme of “holding on to
high-end brand, building consumer-based cooking brand equity, and competing for users' likes” to develop into the No. 1
brand in the market of Chinese high-end kitchen appliances. Themed by “Higher Starting Point of High-tech Kitchen”, the
2022 New Chinese Kitchen - New Product Launch Conference was held, formally releasing a number of new products
such as Robam ultra-slim near-suction range hood Huancai series, large-capacity combi-steam oven, Guangyan dishwasher
series, new generation of high-performance integrated stove, Creator series and refrigerator. These new products, covering
all aspects of cooking, are designed to enhance the starting point of the high-tech kitchen. The Company hold a series of
activities, such as the National Tide Family Banquet, the First China Cooking Competition, the Second China Dishwasher
Festival; meanwhile, the brand was exposed in the “Focus Report”, showed as the title sponsor of the show “It Sounds
Incredible 2”, and carried out cross-border cooperation with the variety show "Treasured Voice 3", to actively broaden the
target audience range and set up a new brand image. In addition, as an official exclusive supplier of household kitchen
appliances for the 2022 Hangzhou Asian Games, the Company helped to spread Chinese culinary culture and contributed to
the construction of the Asian Games city.
In the first half of 2022, MingQi promoted the integration of multiple channels and transformed into a one-stop,
complete kitchen appliance provider. Kinde launched the dual chamber integrated stove series and integrated sink series,
which are professional products specially designed for customers. Besides, the industrialization project of the intelligent
integrated kitchen ecology, upon completion, will further improve the R&D and production capabilities of integrated
kitchen appliances.In the first half of 2022, the Company continued to be recognized by the capital market in terms of corporate
governance, internal management, shareholder return, etc. The Company has become the Council Member of China
Association for Public Companies. Besides, it was awarded class A (excellent) in the 2021 Information Disclosure
Assessment on Companies Listed on the Shenzhen Stock Exchange, and has won this award for nine consecutive years. In
the field of investor relations, at the event of the 13th Tianma Award for Investor Relations of Chinese Listed Companies
sponsored by Securities Times, the Company won the “Best Investor Relations Award of Chinese Listed Companies” and
the “Best Board of Directors Award for Investor Relations of Chinese Listed Companies”, and the Secretary of the Board
of Directors of the Company was awarded the “Best Board Secretary for Investor Relations of Listed Companies on the
Mainboard”. Besides, the Company also won the honor of “Top 100 Listed Companies on China's Mainboard” at the event
of the 15th Value Appraisal of Chinese Listed Companies.In order to practice common prosperity and build a regular incentive mechanism, the Company launched the 2022
Stock Option Incentive Plan to provide stock option incentive for the Company's middle-level personnel in core business
and technical experts, so as to consolidate the Company's long-term development foundation. The Company has been
adhering to standard operation, and will continue to make efforts in the kitchen field and facilitate value investment to
promote its high-quality development.
II. Analysis of Core Competitiveness
There is NO material change in the Company’s core competitiveness during the reporting period. The Company’s
core competitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation,
comprehensive and efficient operation capability, as shown in the Annual Report 2021.
III. Analysis of Main Business
Overview
Please refer to the relevant content of “I. Main Businesses during the Reporting Period”.
Year-on-year changes in key financial data
In RMB
No major changes on profit composition or profit resources occurred in reporting period
Composition of operating income
In RMB
- 12 -
| The reporting period | The same period last year | YOY change | Reason for change | |
| Operating income | 4,444,310,099.69 | 4,326,082,031.62 | 2.73% | |
| Operating costs | 2,240,019,882.53 | 1,993,891,622.30 | 12.34% | |
| Sale expenses | 1,184,704,589.52 | 1,163,782,611.88 | 1.80% | |
| Administrative expenses | 183,583,864.57 | 149,993,109.17 | 22.39% | |
| Financial expense | -62,275,458.91 | -47,926,579.43 | 29.94% | |
| Income tax expense | 131,172,418.86 | 143,489,604.07 | -8.58% | |
| R&D input | 169,368,645.53 | 143,433,206.12 | 18.08% | |
| Net cash flow from operating activities | 322,855,122.33 | 730,222,059.09 | -55.79% | It is mainly due to the procurement of raw materials and the increase in various expenses. |
| Net cash flow from investing activities | -275,734,087.51 | 214,520,601.79 | -228.54% | It is mainly due to the decrease in the amount of maturing bank financial products and the increase in the Company's infrastructure expenditure. |
| Net cash flow from financing activities | -443,071,536.06 | -689,078,739.78 | -35.70% | It is mainly due to the share repurchase in the previous period. |
| Net increase in cash and cash equivalents | -392,838,975.59 | 255,399,364.87 | -253.81% | It is mainly due to the increase in the procurement of raw materials and various expenses, as well as the increase in the Company's infrastructure expenditure. |
| The reporting period | The same period last year | YOY change | |||
| Amount | % of operating income | Amount | % of operating income | ||
| Total operating income | 4,444,310,099.69 | 100% | 4,326,082,031.62 | 100% | 2.73% |
| By industry | |||||
| Kitchen and bathroom appliances | 4,317,490,105.88 | 97.15% | 4,225,828,188.22 | 97.68% | 2.17% |
| Other operating income | 126,819,993.81 | 2.85% | 100,253,843.40 | 2.32% | 26.50% |
| By product category | |||||
| Category 1 | |||||
| Incl: Range hood | 2,074,153,523.02 | 46.68% | 2,091,007,767.04 | 48.35% | -0.81% |
| Gas stove | 1,057,307,687.10 | 23.79% | 1,045,144,595.58 | 24.16% | 1.16% |
Industries, products and regions accounting for more than 10% of the Company’s operating income or profit
√Applicable □Not applicable
In RMB
- 13 -
| Operating income | Operating costs | Gross margin | YoY change in operating income | YoY change in operating costs | YoY change in the gross margin | |
| By industry | ||||||
| Kitchen and bathroom appliances | 4,317,490,105.88 | 2,205,131,842.03 | 48.93% | 2.17% | 18.47% | -7.03% |
| By product category | ||||||
| Range hoods | 2,074,153,523.02 | 1,024,406,260.72 | 50.61% | -0.81% | 17.20% | -7.59% |
| Gas stove | 1,057,307,687.10 | 482,143,255.55 | 54.40% | 1.16% | 17.22% | -6.24% |
| By region | ||||||
| East China | 2,188,169,639.99 | 1,080,516,672.65 | 50.62% | 6.48% | 25.40% | -7.45% |
| South China | 540,221,730.07 | 293,169,584.70 | 45.73% | 1.34% | 16.80% | -7.18% |
| North China | 454,151,283.49 | 218,350,221.53 | 51.92% | -0.74% | 14.77% | -6.50% |
Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of the reporting
period is applied in case that the statistical caliber of such data is adjusted during the reporting period
□Applicable √ Not applicable
Description of reasons for relevant data increasing/decreasing by more than 30% year-on-year
□Applicable √ Not applicable
IV. Analysis of Non-core Business
□Applicable √ Not applicable
V. Analysis of Assets and Liabilities
1. Significant changes in assets composition
| Disinfection cabinet | 197,092,502.71 | 4.43% | 239,178,201.99 | 5.53% | -17.60% |
| Category 2 | |||||
| Incl: All-purpose oven | 358,429,402.29 | 8.06% | 262,228,450.48 | 6.06% | 36.69% |
| Steam oven | 47,657,561.06 | 1.07% | 80,562,429.90 | 1.86% | -40.84% |
| Baking oven | 39,476,578.27 | 0.89% | 67,544,092.31 | 1.56% | -41.55% |
| Category 3 | |||||
| Incl: Dishwasher | 246,993,832.57 | 5.56% | 170,976,797.67 | 3.95% | 44.46% |
| Water purifier | 27,217,675.16 | 0.61% | 24,371,501.10 | 0.56% | 11.68% |
| Water heater | 85,479,990.00 | 1.92% | 48,894,607.25 | 1.13% | 74.82% |
| Integrated stove | 145,144,422.16 | 3.27% | 143,366,801.65 | 3.31% | 1.24% |
| Other small appliances | 38,536,931.54 | 0.87% | 52,552,943.25 | 1.21% | -26.67% |
| Other operating income | 126,819,993.81 | 2.85% | 100,253,843.40 | 2.32% | 26.50% |
| By region | |||||
| East China-Main Products | 2,188,169,639.99 | 49.24% | 2,054,958,956.16 | 47.50% | 6.48% |
| East China-Others | 126,819,993.81 | 2.85% | 100,253,843.40 | 2.32% | 26.50% |
| South China | 540,221,730.07 | 12.16% | 533,053,014.50 | 12.32% | 1.34% |
| Central China | 400,497,450.21 | 9.01% | 390,795,590.34 | 9.03% | 2.48% |
| North China | 454,151,283.49 | 10.22% | 457,558,221.06 | 10.58% | -0.74% |
| Northeast China | 195,279,872.46 | 4.39% | 229,898,842.06 | 5.31% | -15.06% |
| Northwest China | 221,418,193.90 | 4.98% | 218,086,613.97 | 5.04% | 1.53% |
| Southwest China | 290,681,625.76 | 6.54% | 317,765,047.05 | 7.35% | -8.52% |
| Overseas | 27,070,310.00 | 0.61% | 23,711,903.08 | 0.55% | 14.16% |
In RMB
- 14 -
| End of the reporting period | End of last year | Change in percentage | Note on significant changes | |||
| Amount | % of total assets | Amount | % of total assets | |||
| Cash and cash equivalents | 3,400,788,038.91 | 24.32% | 3,802,201,346.55 | 27.34% | -3.02% | |
| Accounts receivable | 1,640,360,454.56 | 11.73% | 1,597,692,860.90 | 11.49% | 0.24% | |
| Inventory | 1,825,088,381.03 | 13.05% | 1,772,231,632.25 | 12.74% | 0.31% | |
| Investment real estate | 4,286,705.36 | 0.03% | 11,085,896.07 | 0.08% | -0.05% | |
| Long-term equity investment | 6,597,242.59 | 0.05% | 5,405,129.91 | 0.04% | 0.01% | |
| Fixed assets | 1,168,388,890.69 | 8.36% | 1,179,306,020.01 | 8.48% | -0.12% | |
| Construction in process | 699,981,173.60 | 5.01% | 454,643,364.82 | 3.27% | 1.74% | |
| Right-of-use assets | 22,021,250.61 | 0.16% | 29,902,954.22 | 0.22% | -0.06% | |
| Short-term borrowings | 39,657,061.74 | 0.28% | 29,616,655.41 | 0.21% | 0.07% | |
| Contract liabilities | 979,436,556.29 | 7.00% | 1,026,782,402.35 | 7.38% | -0.38% | |
| Lease liabilities | 18,575,629.84 | 0.13% | 26,177,034.29 | 0.19% | -0.06% | |
2. Major overseas assets
□Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□Applicable √ Not applicable
4. Restricted asset rights by the end of the reporting period
Restricted cash and cash equivalents
In RMB
| Item | Ending balance | Beginning balance |
| Letter of guarantee and margin for acceptance of bill | 73,638,194.15 | 82,212,526.20 |
| Total | 73,638,194.15 | 82,212,526.20 |
VI. Analysis of Investment
1. Overview
√Applicable Not applicable
Hangzhou Jinhe Electric Appliances Co., Ltd., a newly established wholly-owned subsidiary, with a registered capital of RMB 10 million,
will complete the industrial and commercial registration procedures on June 22, 2022.
2. Major equity investments obtained during the reporting period
□Applicable √ Not applicable
3. Major ongoing non-equity investments during the reporting period
□Applicable √ Not applicable
4. Financial asset investment
(1) Securities investment
□Applicable √ Not applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□Applicable √ Not applicable
The Company had no derivatives investment during the reporting period.
5. Use of the raised funds
□Applicable √ Not applicable
The Company did not use the raised funds during the reporting period.
VII. Sale of Major Assets and Equities
1. Sale of major assets
□Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□Applicable √ Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies
√Applicable Not applicable
In RMB
- 15 -
Companyname
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Shanghai Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5000000 | 103,023,097.72 | 22,524,912.62 | 141,581,849.64 | 7,070,742.40 | 5,548,189.87 |
| Beijing Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5000000 | 83,825,514.16 | 48,634,155.24 | 300,321,514.13 | -1,449,802.68 | -2,119,608.45 |
| Hangzhou MingQi Electric Co., Ltd. | Subsidiary | Sales of kitchen appliances | 50000000 | 191,246,312.60 | 70,678,739.83 | 151,908,412.43 | -72,923.94 | 235,001.79 |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | Subsidiary | Production and sales of kitchen appliances | 32653061 | 502,228,995.00 | 283,501,335.13 | 77,502,270.79 | -466,108.04 | -2,848,019.82 |
IX. Structured Entities Controlled by the Company
□Applicable √ Not applicable
X. Risks faced and countermeasures taken by the Company
(1) Risk of fluctuations in the real estate market
The Company has been long engaged in the kitchen business, offering kitchen appliances such as range hoods, gas stoves, combi-steam ovens, dishwashers and integrated stoves. Its demand is closely related to
the kitchen decoration, with certain "decoration" and "furniture" attributes. At present, the main market demand for kitchen appliances ismainly from the new house buyers, the proportion of renewal demand is gradually increasing, and the demand for products is greatlyaffected by the fluctuation of the real estate market. The Company has certain anti-fluctuation ability by virtue of its market leadership,although fluctuations in the real estate market will still have an impact on the Company’s operating results. In addition, some privatereal estate enterprises defaulted on commercial paper debt due to liquidity problems, which may lead to the failure to recover theCompany's engineering business receivables.
(2) Risk of price fluctuations of raw materials
The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet, copper and glass, etc., whose pricefluctuations will directly affect the cost of the Company’s products and in turn have an impact on its profitability.
(3) Risk of intensified market competition
In recent years, due to the tightening of the overall macro environment of the kitchen appliance industry, the continuousimprovement of industry concentration and the entry of and increased investment of comprehensive brands and Internet brands in thekitchen appliance market, the market competition in the kitchen appliances industry has become increasingly fierce, and theintensification of market competition will have a certain impact on the Company’s operating results.
Chapter 4 Corporate GovernanceI. Annual General Meeting of Shareholders and Extraordinary General Meeting ofShareholders during the Reporting Period
1. Shareholders’ meeting during the reporting period
- 17 -
Session of meeting
| Session of meeting | Type of meeting | Proportion of attending investors | Date of meeting | Date of disclosure | Resolutions |
| The first extraordinary general meeting of shareholders in 2022 | Extraordinary general meeting of shareholders | 62.89% | April 21, 2022 | April 22, 2022 | Announcement of Resolutions of the First Extraordinary General Meeting of Shareholders of Robam Appliances in 2022 (Announcement No. 2022-027) |
| 2021 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 63.52% | June 6, 2022 | June 7, 2022 | Announcement of Resolutions of the 2021 Annual General Meeting of Shareholders of Robam Appliances (Announcement No. 2022-038) |
2. Preferred shareholders with voting rights recovered requested to convene an extraordinary general
meeting of shareholders
□Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management
√Applicable □Not applicable
| Name | Position held | Type | Date | Reasons |
| Zhou Haixin | Deputy General Manager | Appointment | May 11, 2022 | Company appointment |
III. Profit Distribution and Conversion of Capital Reserve into Capital Stock duringthe Reporting Period
□Applicable √ Not applicable
The Company has no plans of distributing cash dividends or bonus shares, or converting capital reserve into capital stock for thefirst half of 2022.
IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Planor other Employee Incentives
√Applicable □Not applicable
1. Equity incentive
2021 Stock Option Incentive Plan:
1. On April 19, 2022, the Tenth Meeting of the Fifth Session of the Board of Directors and the Tenth Meeting of the Fifth
Session of the Board of Supervisors were held, deliberating and adopting the Proposal on Cancellation of Partial Stock Options inthe 2021 Stock Option Incentive Plan and the Proposal on Cancellation of Stock Options of the 2021 Stock Option Incentive Planin the Case Where the Vesting Conditions Are Not Met in the First Exercise Period.
According to the relevant laws and regulations and the provisions of the Company's 2021 Stock Option Incentive Plan(Draft), the Company would cancel a total of 80,000 stock options that have been granted but not yet exercised by the fourincentive targets who have left their jobs and thus no longer meet the incentive conditions; the Company would cancel the 1.184million stock options held by the incentive targets that have been granted but not qualified for exercise in the first exercise periodof 2021 Stock Option Incentive Plan because the vesting conditions are not met.
2. On April 26, 2022, it was examined and confirmed by Shenzhen Branch of China Securities Depository and Clearing Co.,
Ltd., that the cancellation of the above 1.264 million stock options had been completed. The Company cancelled a total of 1.264million stock options mentioned above, accounting for 0.13% of the Company's current total capital stock. The cancellation ofstock options conforms to the relevant laws and regulations, the Articles of Association and the 2021 Stock Option Incentive Plan(Draft) and other relevant provisions. The cancelled stock options have not been exercised yet, and it will not affect the Company'scapital stock after cancellation, with the stock structure unchanged.
2022 Stock Option Incentive Plan:
1. On March 31, 2022, the Company held the Ninth Meeting of the Fifth Session of the Board of Directors, during which the
Proposal on 2022 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals weredeliberated and approved, and the independent directors expressed their independent opinions on and approved the matters relatedto the Company’s stock option incentive plan. The Ninth Meeting of the Fifth Session of the Board of Supervisors of the Companydeliberated and approved the above-mentioned proposal and expressed its concurring opinion. The Company disclosed the abovematters on April 1, 2022.
2. From April 1 to April 10, 2022, the Company internally disclosed the names and titles of the incentive targets of the stock
option incentive plan. On April 13, 2022, the Company’s Board of Supervisors published the Review Opinions of the Board ofSupervisors on the List of Incentive Targets of the 2022 Stock Option Incentive Plan and Explanation on the Publicity. On the sameday, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders andIncentive Targets of the 2022 Stock Option Incentive Plan.
3. On April 21, 2022, the Company held the first extraordinary general meeting of shareholders in 2022, and deliberated and
adopted the Proposal on 2022 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals.The plan was approved by the first extraordinary general meeting of shareholders in 2022, and the Board of Directors wasauthorized to determine the stock option grant date; the stock option will be granted to the incentive targets and all matters relevantto the grant of stock option shall be handled when they are eligible.
4. On May 10, 2022, the 11th Meeting of the Fifth Session of the Board of Directors and the 11th Meeting of the Fifth Session
of the Board of Supervisors of the Company deliberated and approved the Proposal on the Granting Stock Options to IncentiveTargets. The Board of Supervisors verified the list of incentive targets again and expressed its agreement, and the independentdirectors of the Company expressed their independent agreement on it.
5. On May 26, 2022, the Company completed the registration of the grant of the options. As the departed employees did not
have the qualification of incentive targets, the number of incentive targets actually granted under this Stock Option Incentive Planwas adjusted from 285 to 282, and the total number of stock options actually granted was adjusted from 4.81 million to 4.78million, accounting for 0.50% of the current total capital stock of the Company.
2. Implementation of Employee Stock Ownership Plan
□Applicable √ Not applicable
3. Other employee incentive measures
□Applicable √ Not applicable
Chapter 5 Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental
protection authorities.
□Yes √ No
Administrative penalties imposed on the Company for environmental issues during the reporting period
- 20 -
Name of theCompany or its
subsidiary
| Name of the Company or its subsidiary | Reasons for penalties | Violations | Penalties | Impact on the production and operation of the listed company | The Company's rectification measures |
| None | None | None | None | None | None |
Other environmental information disclosed with reference to key emission units: NoneMeasures taken to reduce the Company's carbon emissions during the reporting period and their effects
□Applicable √ Not applicable
Reasons for not disclosing other environmental information: None.
II. Social Responsibility
The Company regularly publishes the CSR Report or the ESG Report every year. For details, please refer to the RobamAppliances 2021 ESG Report disclosed on www.cninfo.com.cn.
Chapter 6 Significant Matters
I. Commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers
and the Company itself and other relevant parties already fulfilled during the reporting period
and not yet fulfilled at the end of the reporting period
□Applicable √ Not applicable
There were no commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Company itself and
other relevant parties that was already fulfilled during the reporting period and was not yet fulfilled at the end of the reporting period
II. Non-operating Occupation of Funds of the Listed Company by the Controlling Shareholder
and Other Affiliated Parties
□Applicable √Not applicable
There was no non-operating occupation of funds of the listed company by the controlling shareholder and other affiliates during the
reporting period.
III. Illegal External Guarantee
□Applicable √Not applicable
There was no illegal external guarantee during the reporting period.
IV. Appointment and Dismissal of Accounting Firm
Whether the semi-annual financial report has been audited
□Yes √No
The semi-annual financial report of the Company was not audited.
V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standard
Audit Report” Issued by the Accounting Firm for the Reporting Period
□Applicable √Not applicable
VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the Last
Year
□Applicable √Not applicable
VII. Matters Related to Bankruptcy Reorganization
□Applicable √Not applicable
The Company did not have any matters related to bankruptcy reorganization during the reporting period.
VIII. Litigation Matters
Material litigation and arbitration
□Applicable √Not applicable
The Company had no major litigation and arbitration during the reporting period.
Other litigation matters
□Applicable √Not applicable
IX. Punishment and Rectification
□Applicable √Not applicable
X. Integrity Conditions of the Company and its Controlling Shareholders
□Applicable √Not applicable
XI. Major Connected Transactions
1. Connected transactions concerning daily operations
□Applicable √Not applicable
The Company had no connected transactions concerning daily operations during the reporting period.
2. Connected transactions related to the acquisition or sales of assets or equity
□Applicable √Not applicable
The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period.
3. Connected transactions related to joint outward investment
□Applicable √Not applicable
The Company had no connected transactions related to joint outward investment during the reporting period.
4. Connected transactions on credit and debt
□Applicable √Not applicable
The Company had no connected transactions on credit and debt during the reporting period.
5. Transactions with connected finance companies
□Applicable √Not applicable
There were no deposits, loans, credits or other financial operations between the Company and connected finance companies and
affiliates.
6. Transactions between the finance companies controlled by the Company and the affiliates
□Applicable √Not applicable
There were no deposits, loans, credits or other financial operations between the finance companies controlled by the Company and
the affiliates.
7. Other major connected transactions
□Applicable √Not applicable
There were no other major connected transactions during the reporting period.
XII. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□Applicable √Not applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□Applicable √Not applicable
The Company had no contracting during the reporting period.
(3) Leasing
□Applicable √Not applicable
The Company had no leasing during the reporting period.
2. Material guarantee
□Applicable √Not applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
√Applicable □Not applicable
Unit: RMB 10,000
- 23 -Specific type
| Specific type | Sources of financial management entrusting | Incurred amount of financial management entrusting | Unexpired balance | Amount overdue but not recovered | Impairment amount accrued of overdue but not recovered financial management |
| Bank financial products | Own funds | 92,350 | 288,476 | 0 | 0 |
| Total | 92,350 | 288,476 | 0 | 0 | |
The specific situation of high-risk entrusted financial management with large single-item amount or low safety, poor liquidity and no
break-even
□Applicable √Not applicable
Entrusted financial management is expected to be unable to recover the principal or where there are other circumstances that may
result in impairment
□Applicable √Not applicable
4. Other material contracts
□Applicable √Not applicable
The Company had no other material contracts during the reporting period.
XIII. Explanation of Other Significant Matters
□Applicable √Not applicable
The Company had no other significant matters that need to be explained during the reporting period.
XIV. Significant Matters of Subsidiaries of the Company
□Applicable √Not applicable
Chapter 7 Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
- 25 -
| Before change | Change (+. -) | After change | |||||||
| Quantity | Percentage (%) | Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | Quantity | Percentage (%) | |
| I. Shares subject to sales restrictions | 14,123,269 | 1.49% | -2,070,000 | -2,070,000 | 12,053,269 | 1.27% | |||
| 1. Shares held by the state | |||||||||
| 2. Shares held by the state-owned legal persons | |||||||||
| 3. Shares held by other domestic investors | 14,123,269 | 1.49% | -2,070,000 | -2,070,000 | 12,053,269 | 1.27% | |||
| Including: shares held by domestic legal persons | |||||||||
| Including: shares held by domestic natural persons | 14,123,269 | 1.49% | -2,070,000 | -2,070,000 | 12,053,269 | 1.27% | |||
| 4. Shares held by overseas investors | |||||||||
| Including: shares held by overseas legal persons | |||||||||
| Shares held by overseas natural persons | |||||||||
| II. Shares without sales restrictions | 934,900,781 | 98.51% | 2,070,000 | 2,070,000 | 936,970,781 | 98.73% | |||
| 1. RMB ordinary shares | 934,900,781 | 98.51% | 2,070,000 | 2,070,000 | 936,970,781 | 98.73% | |||
| 2. Foreign shares listed in China | |||||||||
| 3. Foreign shares listed abroad | |||||||||
| 4. Others | |||||||||
| III. Total shares | 949,024,050 | 100.00% | 0 | 0 | 949,024,050 | 100.00 % | |||
Reason for share changes
√Applicable Not applicable
The directors, supervisors and senior management of the Company shall unlock 25% of the Company's shares registered in their names
on the last trading day of the previous year.
2. Changes in restricted shares
√Applicable □Not applicable
- 26 -Shareholdername
| Shareholder name | Number of restricted shares at the beginning of the period | Number of shares whose sales restrictions have been lifted in the current period | Number of restricted shares increased in the current period | Number of restricted shares at the end of the period | The reasons for sales restrictions | Date of lifting sales restrictions |
| Zhao Jihong | 1,267,549 | 316,875 | 950,674 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Zhang Songnian | 834,234 | 208,500 | 625,734 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Zhang Linyong | 834,236 | 208,500 | 625,736 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Zhang Guofu | 308,962 | 0 | 308,962 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Xia Zhiming | 308,962 | 0 | 308,962 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Wang Gang | 432,562 | 0 | 432,562 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Tang Genquan | 834,234 | 208,500 | 625,734 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Shen Guoliang | 1,143,198 | 285,750 | 857,448 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Ren Luozhong | 1,267,546 | 316,875 | 950,671 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year |
- 27 -
Ren Jianhua
| Ren Jianhua | 4,442,362 | 0 | 4,442,362 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Ren Fujia | 2,100,056 | 525,000 | 1,575,056 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| He Yadong | 308,962 | 0 | 308,962 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Shen Yueming | 40,406 | 0 | 40,406 | Locked shares of directors, supervisors and senior management | Unlock 25% of the Company's shares registered in their names on the last trading day of the previous year | |
| Total | 14,123,269 | 2,070,000 | 0 | 12,053,269 | -- | -- |
II. Securities Issuance and Listing
□Applicable √Not applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: share
| Total number of common shareholders at the end of the reporting period | 52,457 | Total number of preferred shareholders with the voting rights recovered at the end of reporting period | 0 | |||||
| Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of common shares held at the end of the reporting period | Change during the reporting period | Number of shares subject to sales restrictions | Number of shares without sales restrictions | Pledged, marked or frozen shares | |
| Status of shares | Quantity | |||||||
| Hangzhou Robam Industrial Group Co., Ltd. | Domestic non-state-owned legal person | 49.68% | 471,510,000 | 0 | 471,510,000 | |||
| Hong Kong Securities Clearing Company Limited | Overseas corporation | 8.90% | 84,446,021 | -10,883,905 | 84,446,021 | |||
| TEMASEK FULLERTON ALPHA PTE LTD | Overseas corporation | 1.65% | 15,690,099 | 10,345,244 | 15,690,099 | |||
- 28 -
Shen Guoying
| Shen Guoying | Domestic natural person | 1.29% | 12,240,000 | 0 | 12,240,000 | |||
| Norges Bank- equity fund | Overseas corporation | 0.81% | 7,680,141 | 1,969,886 | 7,680,141 | |||
| Hangzhou Jinchuang Investment Co., Ltd. | Domestic non-state-owned legal person | 0.70% | 6,640,085 | 0 | 6,640,085 | |||
| Industrial Bank Co., Ltd. ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | Others | 0.68% | 6,436,819 | -911,700 | 6,436,819 | |||
| Hangzhou Yinchuang Investment Co., Ltd. | Domestic non-state-owned legal person | 0.67% | 6,318,000 | 0 | 6,318,000 | |||
| Qian Hai Life Insurance Co., Ltd. -participating insurance products | Others | 0.65% | 6,199,919 | 6,199,919 | 6,199,919 | |||
| PICC Life Insurance Company Limited-dividends-individual insurance dividends | Others | 0.64% | 6,037,014 | 2,327,714 | 6,037,014 | |||
| Strategic investor or general legal person who becomes one of the top 10 common shareholders due to rights issue | None | |||||||
| Description of the associated relationship or consistent actions of the above shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | |||||||
| Statements of the above shareholders on proxy/trustee voting rights and abstention from voting rights | None | |||||||
| Special note on the existence of special repurchase accounts among the top 10 shareholders | None | |||||||
| Shareholdings of the top 10 common shareholders not subject to sales restrictions | ||||||||
| Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of shares | ||||||
| Type of shares | Quantity | |||||||
| Hangzhou Robam Industrial Group Co., Ltd. | 471,510,000 | RMB ordinary shares | 471,510,000 | |||||
| Hong Kong Securities Clearing Company Limited | 84,446,021 | RMB ordinary shares | 84,446,021 | |||||
| TEMASEK FULLERTON ALPHA PTE LTD | 15,690,099 | RMB ordinary shares | 15,690,099 | |||||
- 29 -
Shen Guoying
| Shen Guoying | 12,240,000 | RMB ordinary shares | 12,240,000 |
| Norges Bank-equity fund | 7,680,141 | RMB ordinary shares | 7,680,141 |
| Hangzhou Jinchuang Investment Co., Ltd. | 6,640,085 | RMB ordinary shares | 6,640,085 |
| Industrial Bank Co., Ltd. ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | 6,436,819 | RMB ordinary shares | 6,436,819 |
| Hangzhou Yinchuang Investment Co., Ltd. | 6,318,000 | RMB ordinary shares | 6,318,000 |
| Qian Hai Life Insurance Co., Ltd. -participating policy products | 6,199,919 | RMB ordinary shares | 6,199,919 |
| PICC Life Insurance Company Limited -dividends-individual insurance dividends | 6,037,014 | RMB ordinary shares | 6,037,014 |
| Description on associated relationship or concerted actions among the top 10 common shareholders not subject to sales restrictions and between the top 10 common shareholders not subject to sales restrictions and the top 10 common shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | ||
| Description of the top 10 common shareholders engaging in securities margin trading | None | ||
Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company have
any agreed repurchase trading during the reporting period?
□Yes √No
There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subject to
sales restrictions of the Company during the reporting period.
IV. Changes in Shares Held by Directors, Supervisors, and Senior
Management
□Applicable √Not applicable
There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reporting
period. For details, please refer to the Annual Report 2021.
V. Changes in the Controlling Shareholder and the Actual Controller
Changes in the controlling shareholder during the reporting period
□Applicable √Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.
Changes in the actual controller during the reporting period
□Applicable √Not applicable
There was no change in the actual controller of the Company during the reporting period.
Chapter 8 Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares during the reporting period.
Chapter 9 Bonds
□Applicable √Not applicable
Chapter 10 Financial Report
I. Audit Report
Whether the semi-annual report has been audited
□Yes √No
The semi-annual financial report of the Company was not audited.
II. Financial Statements
The financial statement notes are represented in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Robam Appliances
Co., Ltd.
June 30, 2022
In RMB
- 32 -
Item
| Item | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and cash equivalents | 3,400,788,038.91 | 3,802,201,346.55 |
| Deposit reservation for balance | ||
| Lendings to banks and other financial institutions | ||
| Financial assets held for trading | 2,884,760,000.00 | 2,872,312,500.00 |
| Derivative financial assets | ||
| Notes receivable | 1,308,046,816.29 | 1,330,193,894.82 |
| Accounts receivable | 1,640,360,454.56 | 1,597,692,860.90 |
| Accounts receivable financing | ||
| Prepayments | 186,696,023.47 | 131,162,030.95 |
| Receivable premium | ||
| Reinsurance accounts receivable | ||
| Provision of cession receivable | ||
| Other receivables | 105,383,151.12 | 73,487,381.46 |
| Inc: Interests receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventory | 1,825,088,381.03 | 1,772,231,632.25 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 105,891.12 | 4,110,429.16 |
| Total current assets | 11,351,228,756.50 | 11,583,392,076.09 |
| Non-current assets: |
- 33 -Loans and advances
| Loans and advances | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 6,597,242.59 | 5,405,129.91 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | ||
| Investment real estate | 4,286,705.36 | 11,085,896.07 |
| Fixed assets | 1,168,388,890.69 | 1,179,306,020.01 |
| Construction in process | 699,981,173.60 | 454,643,364.82 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | 22,021,250.61 | 29,902,954.22 |
| Intangible assets | 225,772,221.34 | 229,391,803.26 |
| Development expenditure | ||
| Goodwill | 80,589,565.84 | 80,589,565.84 |
| Long-term prepaid expenses | 3,589,385.75 | 5,385,436.20 |
| Deferred income tax assets | 340,774,443.43 | 286,348,037.04 |
| Other non-current assets | 77,619,087.99 | 38,468,874.44 |
| Total non-current assets | 2,631,735,990.42 | 2,322,643,105.03 |
| Total assets | 13,982,964,746.92 | 13,906,035,181.12 |
| Current liabilities: | ||
| Short-term borrowings | 39,657,061.74 | 29,616,655.41 |
| Borrowings from the central bank | ||
| Borrowings from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payables | 809,469,587.67 | 962,665,463.99 |
| Accounts payable | 2,303,202,819.34 | 2,181,900,261.00 |
| Advance receipts | ||
| Contract liabilities | 979,436,556.29 | 1,026,782,402.35 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receivings from vicariously traded securities | ||
| Receivings from vicariously sold securities | ||
| Payroll payable | 53,282,842.44 | 165,177,425.08 |
| Taxes payable | 230,030,822.59 | 212,202,393.54 |
| Other payables | 269,409,072.30 | 267,781,215.06 |
| Inc: Interests payable | ||
| Dividends payable | ||
| Fees and commissions payable | ||
| Dividends payable for reinsurance |
- 34 -
Liabilities held for sale
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 5,414,420.90 | 5,387,591.43 |
| Other current liabilities | 115,300,198.58 | 124,284,081.56 |
| Total current liabilities | 4,805,203,381.85 | 4,975,797,489.42 |
| Non-current liabilities: | ||
| Reserves for insurance contracts | ||
| Long-term loans | ||
| Bonds payable | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 18,575,629.84 | 26,177,034.29 |
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 124,643,232.96 | 131,747,378.42 |
| Deferred income tax liabilities | 8,061,237.74 | 6,254,762.76 |
| Other non-current liabilities | ||
| Total non-current liabilities | 151,280,100.54 | 164,179,175.47 |
| Total liabilities | 4,956,483,482.39 | 5,139,976,664.89 |
| Owner’s equity: | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 408,916,464.42 | 404,918,098.15 |
| Less: Treasury share | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,157,634.16 | -100,157,634.16 |
| Special reserves | ||
| Surplus reserves | 474,516,412.50 | 474,516,412.50 |
| General risk reserves | ||
| Undistributed profits | 7,350,223,478.62 | 7,098,721,555.37 |
| Total owners’ equity attributable to the parent company | 8,882,527,028.79 | 8,627,026,739.27 |
| Minority interests | 143,954,235.74 | 139,031,776.96 |
| Total owner’s equity | 9,026,481,264.53 | 8,766,058,516.23 |
| Total liabilities and owner’s equity | 13,982,964,746.92 | 13,906,035,181.12 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang
Guofu
2. Balance Sheet of the Parent Company
In RMB
| Item | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and cash equivalents | 3,213,633,336.04 | 3,554,239,202.02 |
| Financial assets held for trading | 2,850,000,000.00 | 2,800,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 1,308,046,816.29 | 1,327,893,894.82 |
- 35 -
Accounts receivable
| Accounts receivable | 1,567,703,600.71 | 1,496,691,827.59 |
| Accounts receivable financing | ||
| Prepayments | 162,530,740.38 | 108,926,615.26 |
| Other receivables | 92,064,235.68 | 66,149,239.78 |
| Inc: Interests receivable | ||
| Dividends receivable | ||
| Inventory | 1,705,978,027.59 | 1,674,764,364.28 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | ||
| Total current assets | 10,899,956,756.69 | 11,028,665,143.75 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 239,273,010.65 | 242,037,500.08 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | ||
| Investment real estate | 4,549,733.16 | 11,361,192.77 |
| Fixed assets | 1,104,047,903.97 | 1,114,958,987.32 |
| Construction in process | 490,566,391.05 | 280,105,490.57 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 151,047,407.97 | 152,123,403.04 |
| Development expenditure | ||
| Goodwill | ||
| Long-term prepaid expenses | 1,533,100.35 | 1,653,433.47 |
| Deferred income tax assets | 339,011,895.46 | 285,017,337.53 |
| Other non-current assets | 76,677,276.82 | 36,602,077.16 |
| Total non-current assets | 2,408,822,742.65 | 2,125,975,445.16 |
| Total assets | 13,308,779,499.34 | 13,154,640,588.91 |
| Current liabilities: | ||
| Short-term borrowings | 26,157,061.74 | 29,616,655.41 |
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payables | 734,514,108.17 | 869,702,988.97 |
| Accounts payable | 2,188,681,498.77 | 2,051,194,342.69 |
| Advance receipts | ||
| Contract liabilities | 896,481,698.25 | 923,802,307.69 |
| Payroll payable | 42,165,488.89 | 129,893,906.19 |
- 36 -
Taxes payable
| Taxes payable | 221,371,522.40 | 196,058,797.24 |
| Other payables | 247,212,708.19 | 240,983,242.45 |
| Inc: Interests payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | 104,516,067.03 | 110,927,917.94 |
| Total current liabilities | 4,461,100,153.44 | 4,552,180,158.58 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 95,786,247.96 | 102,890,393.42 |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 95,786,247.96 | 102,890,393.42 |
| Total liabilities | 4,556,886,401.40 | 4,655,070,552.00 |
| Owner’s equity: | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 408,871,481.41 | 404,873,115.14 |
| Less: Treasury share | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,157,634.16 | -100,157,634.16 |
| Special reserves | ||
| Surplus reserves | 474,516,412.50 | 474,516,412.50 |
| Undistributed profits | 7,219,634,530.78 | 6,971,309,836.02 |
| Total owner’s equity | 8,751,893,097.94 | 8,499,570,036.91 |
| Total liabilities and owner’s equity | 13,308,779,499.34 | 13,154,640,588.91 |
3. Consolidated Income Statement
In RMB
| Item | The first half of 2022 | The first half of 2021 |
| I. Total operating income | 4,444,310,099.69 | 4,326,082,031.62 |
| Inc: Operating income | 4,444,310,099.69 | 4,326,082,031.62 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income |
- 37 -
II. Total operating costs
| II. Total operating costs | 3,739,161,547.48 | 3,435,552,198.16 |
| Inc: Operating costs | 2,240,019,882.53 | 1,993,891,622.30 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net allotment of reserves for insurance liabilities | ||
| Policy dividend expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 23,760,024.24 | 32,378,228.12 |
| Sale expenses | 1,184,704,589.52 | 1,163,782,611.88 |
| Administrative expenses | 183,583,864.57 | 149,993,109.17 |
| R&D expenses | 169,368,645.53 | 143,433,206.12 |
| Financial expenses | -62,275,458.91 | -47,926,579.43 |
| Inc: Interest expenses | 1,018,439.59 | 1,228,635.41 |
| Interest income | 60,042,815.83 | 50,677,538.57 |
| Add: other income | 94,070,746.70 | 55,086,765.01 |
| Investment income (“-” for losses) | 19,168,941.11 | 31,429,517.67 |
| Inc: Income from investment in joint ventures and associated companies | -2,947,887.32 | -1,440,070.07 |
| Gains on derecognition of financial assets measured at amortized cost | ||
| Exchange gains (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value (“-” for losses) | ||
| Losses from credit impairment (“-” for losses) | 9,024,313.93 | -31,492,439.21 |
| Losses from asset impairment (“-” for losses) | 24,056,013.60 | |
| Gains on disposal of assets (“-” for losses) | 37,838.75 | -2,035,843.51 |
| III. Operating profits (“-” for losses) | 851,506,406.30 | 943,517,833.42 |
| Add: non-operating income | 2,696,007.72 | 1,195,370.24 |
| Less: non-operating expenditure | 1,558,155.13 | 1,577,924.28 |
| IV. Total profits (“-” for total losses) | 852,644,258.89 | 943,135,279.38 |
| Less: income tax expenses | 131,172,418.86 | 143,489,604.07 |
| V. Net profits (“-” for losses) | 721,471,840.03 | 799,645,675.31 |
| (I) By operational sustainability | ||
| 1. Net profits from continuing operations (“-” for net losses) | 721,471,840.03 | 799,645,675.31 |
| 2. Net profits from discontinued operations (“-” for net losses) | ||
| (II) By ownership | ||
| 1. Net profits attributable to owners of the parent company | 723,549,381.25 | 790,388,759.79 |
- 38 -
2. Minority shareholders’ gains and losses
| 2. Minority shareholders’ gains and losses | -2,077,541.22 | 9,256,915.52 |
| VI. After-tax net amount of other comprehensive income | ||
| After-tax net amount of other comprehensive income attributable to the owners of parent company | ||
| (I) Other comprehensive incomes that cannot be reclassified into profit or loss | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | ||
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | ||
| 7. Others | ||
| After-tax net amount of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 721,471,840.03 | 799,645,675.31 |
| Total comprehensive income attributable to owners of the parent company | 723,549,381.25 | 790,388,759.79 |
| Total comprehensive income attributable to minority shareholders | -2,077,541.22 | 9,256,915.52 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.76 | 0.83 |
| (II) Diluted EPS | 0.76 | 0.83 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu
4. Income Statement of the Parent Company
In RMB
| Item | The first half of 2022 | The first half of 2021 |
| I. Operating income | 4,159,599,550.58 | 3,957,294,958.01 |
| Less: Operating costs | 2,146,921,987.07 | 1,867,434,874.51 |
| Taxes and surcharges | 21,169,789.36 | 29,052,610.83 |
| Sale expenses | 1,053,210,272.02 | 995,416,077.48 |
| Administrative expenses | 130,121,271.69 | 107,028,148.18 |
| R&D expenses | 161,720,456.56 | 136,896,643.39 |
| Financial expenses | -61,053,558.14 | -46,049,005.34 |
| Inc: Interest expenses | 714,893.28 | 1,228,635.41 |
- 39 -
Interest income
| Interest income | 58,189,221.15 | 47,935,867.95 |
| Add: other income | 86,160,552.68 | 51,032,167.31 |
| Investment income (“-” for losses) | 17,639,080.72 | 52,446,657.81 |
| Inc: Income from investment in joint ventures and associated companies | -2,947,887.32 | -1,440,070.07 |
| Gains on derecognition of financial assets measured at amortized cost (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value (“-” for losses) | ||
| Losses from credit impairment (“-” for losses) | 11,220,864.57 | -32,279,529.57 |
| Losses from asset impairment (“-” for losses) | 24,056,013.60 | |
| Gains on disposal of assets (“-” for losses) | -134,264.41 | -2,072,673.59 |
| II. Operating profits (“-” for losses) | 846,451,579.18 | 936,642,230.92 |
| Add: non-operating income | 2,622,330.74 | 917,022.51 |
| Less: non-operating expenditure | 1,188,024.98 | 1,203,445.87 |
| III. Total profits (“-” for total losses) | 847,885,884.94 | 936,355,807.56 |
| Less: Income tax expenses | 127,513,732.18 | 137,593,038.71 |
| IV. Net profits (“-” for net losses) | 720,372,152.76 | 798,762,768.85 |
| (I) Net profits from going concern (“-” for net losses) | 720,372,152.76 | 798,762,768.85 |
| (II) Net profits from discontinued operations (“-” for net losses) | ||
| V. After-tax net amount of other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into gains and losses | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | ||
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 720,372,152.76 | 798,762,768.85 |
| VII. EPS: | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated Cash Flow Statement
In RMB
- 40 -Item
| Item | The first half of 2022 | The first half of 2021 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 4,817,937,199.39 | 4,738,990,263.73 |
| Net increase in clients’ deposits and deposits from banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in borrowings from other financial institutions | ||
| Cash received from receiving insurance premium of the original insurance contract | ||
| Net cash from receiving reinsurance premium | ||
| Net increase in deposits and investment of insured persons | ||
| Cash received from interests, fees and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in repurchase business funds | ||
| Net cash received from vicariously traded securities | ||
| Refunds of taxes | 29,520,918.02 | 7,323,753.03 |
| Cash received relating to other operating activities | 177,926,833.07 | 118,704,652.16 |
| Subtotal of cash inflow from operating activities | 5,025,384,950.48 | 4,865,018,668.92 |
| Cash paid for purchased products and received services | 2,583,318,265.69 | 2,252,759,526.62 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with the central bank and other financial institutions | ||
| Cash paid for claims of original insurance contract | ||
| Net increase in lending funds | ||
| Cash paid for interests, fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 509,673,044.55 | 437,124,075.00 |
| Cash paid for taxes | 408,649,175.45 | 369,427,461.40 |
| Cash paid related to other operating activities | 1,200,889,342.46 | 1,075,485,546.81 |
| Subtotal of cash outflow from operating activities | 4,702,529,828.15 | 4,134,796,609.83 |
| Net cash flow from operating activities | 322,855,122.33 | 730,222,059.09 |
| II. Cash flow from investing activities: | ||
| Cash received from return of investments | 892,912,500.00 | 1,234,000,000.00 |
| Cash received from return on investments | 23,238,518.93 | 33,853,727.02 |
- 41 -
Net cash received from disposal offixed assets, intangible assets and otherlong-term assets
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,030,970.40 | 2,206,278.90 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cashes received related to other investment activities | ||
| Subtotal of cash inflow from investment activities | 917,181,989.33 | 1,270,060,005.92 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 269,416,076.84 | 154,539,404.13 |
| Cash paid to investments | 923,500,000.00 | 901,000,000.00 |
| Net increase in pledged loans | ||
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | ||
| Subtotal of cash outflow from investment activities | 1,192,916,076.84 | 1,055,539,404.13 |
| Net cash flow from investment activities | -275,734,087.51 | 214,520,601.79 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | 25,000,000.00 | 850,000.00 |
| Including: Cash received by subsidiaries from investments of minority shareholders | 11,000,000.00 | 850,000.00 |
| Cash from acquiring debts | 17,000,000.00 | |
| Other cashes received in relation to financing activities | 1,012,732.06 | 5,552,160.81 |
| Subtotal of cash inflow from financing activities | 43,012,732.06 | 6,402,160.81 |
| Cash paid for repayments of debts | 3,500,000.00 | |
| Cash paid for distribution of dividends, profits or interest expenses | 476,047,458.00 | 495,485,158.00 |
| Inc: Dividends or profits paid by subsidiaries to minority shareholders | 4,000,000.00 | 22,950,000.00 |
| Other cashes paid in relation to financing activities | 6,536,810.12 | 199,995,742.59 |
| Subtotal of cash outflow from financing activities | 486,084,268.12 | 695,480,900.59 |
| Net cash flow from financing activities | -443,071,536.06 | -689,078,739.78 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 3,111,525.65 | -264,556.23 |
| V. Net increase in cash and cash equivalents | -392,838,975.59 | 255,399,364.87 |
| Plus: Opening balance of cash and cash equivalents | 3,719,988,820.35 | 3,886,096,513.56 |
| VI. Closing balance of cash and cash equivalents | 3,327,149,844.76 | 4,141,495,878.43 |
6. Cash Flow Statement of the Parent Company
In RMB
- 42 -Item
| Item | The first half of 2022 | The first half of 2021 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 4,510,190,738.71 | 4,346,968,618.40 |
| Refunds of taxes | 23,286,694.84 | 7,323,753.03 |
| Cash received relating to other operating activities | 130,386,047.45 | 99,542,054.03 |
| Subtotal of cash inflow from operating activities | 4,663,863,481.00 | 4,453,834,425.46 |
| Cash paid for purchased products and received services | 2,444,657,366.67 | 2,138,946,028.17 |
| Cash paid to and on behalf of employees | 388,860,388.83 | 340,735,312.05 |
| Cash paid for taxes | 377,718,507.95 | 330,152,814.67 |
| Cash paid related to other operating activities | 1,074,310,127.24 | 932,462,696.53 |
| Subtotal of cash outflow from operating activities | 4,285,546,390.69 | 3,742,296,851.42 |
| Net cash flow from operating activities | 378,317,090.31 | 711,537,574.04 |
| II. Cash flow from investing activities: | ||
| Cash received from return of investments | 800,000,000.00 | 960,000,000.00 |
| Cash received from return on investments | 21,676,168.09 | 54,819,617.81 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 509,970.40 | 2,156,298.90 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cashes received related to other investment activities | ||
| Subtotal of cash inflow from investment activities | 822,186,138.49 | 1,016,975,916.71 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 227,459,776.46 | 112,968,774.96 |
| Cash paid to investments | 850,000,000.00 | 610,000,000.00 |
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | ||
| Subtotal of cash outflow from investment activities | 1,077,459,776.46 | 722,968,774.96 |
| Net cash flow from investment activities | -255,273,637.97 | 294,007,141.75 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | ||
| Cash from acquiring debts | ||
| Other cashes received in relation to financing activities | 1,012,732.06 | 5,552,160.81 |
| Subtotal of cash inflow from financing activities | 1,012,732.06 | 5,552,160.81 |
| Cash paid for repayments of debts | ||
| Cash paid for distribution of dividends, profits or interest expenses | 472,047,458.00 | 473,435,158.00 |
| Other cashes paid in relation to financing activities | 3,516,183.32 | 199,995,742.59 |
- 43 -Subtotal of cash outflow from financingactivities
| Subtotal of cash outflow from financing activities | 475,563,641.32 | 673,430,900.59 |
| Net cash flow from financing activities | -474,550,909.26 | -667,878,739.78 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 3,111,599.62 | -264,437.65 |
| V. Net increase in cash and cash equivalents | -348,395,857.30 | 337,401,538.36 |
| Plus: Opening balance of cash and cash equivalents | 3,504,333,910.43 | 3,627,178,859.95 |
| VI. Closing balance of cash and cash equivalents | 3,155,938,053.13 | 3,964,580,398.31 |
7. Consolidated Statement of Changes in Owners’ Equity
Current amount In RMB
- 44 -
Item
| Item | The first half of 2022 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 404,918,098.15 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,098,721,555.37 | 8,627,026,739.27 | 139,031,776.96 | 8,766,058,516.23 | ||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 404,918,098.15 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,098,721,555.37 | 8,627,026,739.27 | 139,031,776.96 | 8,766,058,516.23 | ||||||
| III. Change in current period (“-” for decrease) | 3,998,366.27 | - | - | 251,501,923.25 | 255,500,289.52 | 4,922,458.78 | 260,422,748.30 | ||||||||
| (I) Total comprehensive income | 723,549,381.25 | 723,549,381.25 | -2,077,541.22 | 721,471,840.03 | |||||||||||
| (II) Capital invested and decreased by the owners | 3,998,366.27 | - | 3,998,366.27 | 11,000,000.00 | 14,998,366.27 | ||||||||||
- 45 -
1. Common shares
invested by theowners
| 1. Common shares invested by the owners | - | 11,000,000.00 | 11,000,000.00 | ||||||||||||
| 2. Other equity instruments Capital invested by holders | - | - | |||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 3,998,366.27 | 3,998,366.27 | 3,998,366.27 | ||||||||||||
| 4. Others | - | ||||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | -4,000,000.00 | -476,047,458.00 | |||||||||||
| 1. Withdrawal of surplus reserve | - | ||||||||||||||
| 2. Appropriation of general risk reserve | - | ||||||||||||||
| 3． Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | -4,000,000.00 | -476,047,458.00 | |||||||||||
| 4. Others | - | ||||||||||||||
| (IV) Internal carry-forward of owners’ equity | - | ||||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | - | ||||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | - | ||||||||||||||
| 3. Surplus reserves making up for losses |
- 46 -
4. Changes of
defined benefitplans carriedforward to retainedearnings
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period | |||||||||||||||
| 2. Used in current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 408,916,464.42 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,350,223,478.62 | 8,882,527,028.79 | 143,954,235.74 | 9,026,481,264.53 |
Amount of last year
In RMB
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Item
| Item | The first half of 2021 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 401,799,332.67 | - 15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 401,799,332.67 | - 15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
| III. Change in current period (“-” for decrease) | 802,690.61 | 199,995,742.59 | 294,903,601.79 | 95,710,549.81 | 10,106,915.52 | 105,817,465.33 | |||||||||
| (I) Total comprehensive income | 790,388,759.79 | 790,388,759.79 | 9,256,915.52 | 799,645,675.31 | |||||||||||
| (II) Capital invested and decreased by the owners | 802,690.61 | 802,690.61 | 850,000.00 | 1,652,690.61 | |||||||||||
| 1. Common shares invested by the owners | 850,000.00 | 850,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 802,690.61 | 802,690.61 | 802,690.61 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -495,485,158.00 | -495,485,158.00 | -495,485,158.00 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
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3． Distribution to owners (orshareholders)
| 3． Distribution to owners (or shareholders) | -495,485,158.00 | -495,485,158.00 | -495,485,158.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
| 3． Surplus reserves making up for losses | |||||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period | |||||||||||||||
| 2. Used in current period | |||||||||||||||
| (VI) Others | 199,995,742.59 | -199,995,742.59 | -199,995,742.59 | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 402,602,023.28 | 199,995,742.59 | - 15,157,634.16 | 474,516,412.50 | 6,535,348,256.13 | 8,146,337,365.16 | 153,259,328.81 | 8,299,596,693.97 |
8. Statement of Changes in Owners’ Equity of the Parent Company
Current amount
In RMB
| Item | The first half of 2022 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 404,873,115.14 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 6,971,309,836.02 | 8,499,570,036.91 | |||||
| Plus: Changes in accounting policies | ||||||||||||
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Correction of errors of the previous period
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 404,873,115.14 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 6,971,309,836.02 | 8,499,570,036.91 | |||||
| III. Change in current period (“-” for decrease) | 3,998,366.27 | 248,324,694.76 | 252,323,061.03 | |||||||||
| (I) Total comprehensive income | 720,372,152.76 | 720,372,152.76 | ||||||||||
| (II) Capital invested and decreased by the owners | 3,998,366.27 | 3,998,366.27 | ||||||||||
| 1. Common shares invested by the owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 3,998,366.27 | 3,998,366.27 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3. Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawn in current period | ||||||||||||
| 2. Used in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 408,871,481.41 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,219,634,530.78 | 8,751,893,097.94 |
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Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022
Amount of last year
In RMB
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022
Item
| Item | The first half of 2021 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
| III. Change in current period (“-” for decrease) | 802,690.61 | 199,995,742.59 | 325,327,610.85 | 126,134,558.87 | ||||||||
| (I) Total comprehensive income | 798,762,768.85 | 798,762,768.85 | ||||||||||
| (II) Capital invested and decreased by the owners | 802,690.61 | 802,690.61 | ||||||||||
| 1. Common shares invested by the owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 802,690.61 | 802,690.61 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -473,435,158.00 | -473,435,158.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -473,435,158.00 | -473,435,158.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3. Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
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Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022
| Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022 | ||||||||||||||
| 6. Others | ||||||||||||||
| (V) Special reserve | ||||||||||||||
| 1. Withdrawn in current period | ||||||||||||||
| 2. Used in current period | ||||||||||||||
| (VI) Others | 199,995,742.59 | -199,995,742.59 | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 402,557,040.27 | 199,995,742.59 | -15,157,634.16 | 474,516,412.50 | 6,445,931,250.54 | 8,056,875,376.56 | |||||||
III. Basic Information of the Company
Hangzhou Robam Appliances Co., Ltd. (hereinafter referred to as Robam or the Company) is an incorporated companyestablished by overall changing Hangzhou Robam Home Appliances Co., Ltd. on November 7, 2000. Approved by China SecuritiesRegulatory Commission (Approval document No.: ZJXK [2010] No. 1512), the Company offered 40 million ordinary shares in RMB tothe public for the first time on November 23, 2010 (stock code: 002508), with the par value of RMB 1 per share and the issue price ofRMB 24.00 per share.
As of June 30, 2022, the total capital stocks of the Company reached RMB 949,024,050 after several equity changes. TheCompany’s unified social credit code is 91330000725252053F; the legal representative is Ren Jianhua; the address is No.592, LinpingAvenue, Yuhang Economic Development Area, Yuhang District, Hangzhou.
The Company is a manufacturing company, with major businesses covering research & development, production, sales andcomprehensive services of kitchen appliances. Its main products include range hoods, gas stoves, disinfection cabinets, steam ovens,baking ovens, dishwashers, water purifiers, microwave ovens, integrated stoves, and purification tanks.
The main business scope is: business items licensed in Article 13: production of disinfection device; production of electrothermalfood processing equipment (For business subject to approval according to law, relevant operating activities may not be carried out untilthey are approved by relevant authorities, and the specific business items shall be subject to the results of examination and approval).General business: research and development of kitchen utensils, sanitary ware and daily sundries; wholesale of kitchen utensils, sanitaryware and daily sundries; sales of daily glass products; sales of household appliances; installation services for household appliances;research and development of household appliances; sales of household products; sales of daily necessities; manufacturing of dailywood products; retail of household appliances; repair of household appliances; manufacturing of household appliances; sales ofelectrothermal food processing equipment; wholesale of daily necessities; technical services, technology development, technicalconsultation, technology exchange, technology transfer and technology promotion; sales of non-electric household appliances;manufacturing of non-electric household appliances; production of gas appliances; sales of refrigeration and air-conditioning equipment;manufacturing of refrigeration and air-conditioning equipment; basic artificial intelligence software development; manufacturing ofintelligent household consumption equipment; sales of artificial intelligence hardware; manufacturing of special equipment forcommerce, catering and service; sales of special equipment for commerce, catering and service; import and export of goods;manufacturing of special equipment for environmental protection; sales of special equipment for environmental protection (except forbusiness subject to approval according to law, operating activities shall be independently carried out as described in business licenseaccording to law).
The consolidated financial statements of the Company cover eight companies, including Beijing Robam Appliances Sales Co.,Ltd., Shanghai Robam Appliances Sales Co., Ltd., Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances Trading(Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd., Hangzhou Robam Fuchuang Investment ManagementCo., Ltd. Zhejiang Cookingfuture Technology Co., Ltd. and Hangzhou Jinhe Electric Appliances Co., Ltd. Compared to the last period,the Company added one subsidiary in this period as the Hangzhou Jinhe Electric Appliances Co., Ltd. was newly established. Fordetails, please see relevant contents in the section of "IX. Interests in Other Entities" herein.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going concern basis, and in light of the Company’s actual transactionsand events, in accordance with the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance of China and
relevant provisions, as well as the accounting policies and estimates stated in the section of "Significant Accounting Policies andEstimates" herein.
2. Going concern
After taking into account of factors such as macro policy risks, market management risks, and the current and long-termprofitability, solvency, and financial flexibility of the Company, as well as the intention of the management to change the operationpolicies, the management of the Company believes that there are no matters affecting the Company’s going concern within 12 monthsfrom the end of the reporting period onwards.
V. Significant Accounting Policies and Estimates
Specific accounting policies and estimates:
The specific accounting policies and estimates prepared by the Company according to its actual production and operationinclude the operating cycle, the recognition and measurement of receivables and bad debts, measurement of inventory delivered, fixedassets classification as well as depreciation methods, invisible asset amortization, conditions for the capitalization of R&D expenses,and revenue recognition and measurement.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of the Accounting Standards for BusinessEnterprises, and truthfully and completely reflect financial position, business results, cash flow and other relevant information of theCompany.
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian calendar.
3. Operating cycle
The normal operating cycle of the Company shall be one year (12 months).
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Accounting approaches to business combinations under or not under common control
The assets and liabilities acquired by the Company as the combining party in a business combination under common controlshall be measured at the book value of the combined party in the final controller’s consolidated statements on the combination date.The capital reserve shall be adjusted against the difference between the book value of the net assets acquired by the combining partyand the book value of the combination consideration paid by it. If the capital reserve is insufficient to offset the difference, theretained earnings shall be adjusted.
The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a business combination not undercommon control shall be measured at fair value on the acquisition date. The combination cost is the sum of fair values of cash or non-cash assets paid, liabilities issued or undertaken, equity securities issued, etc. by the Company for the purpose of taking control overthe acquired party on the acquisition date and all directly related expenses incurred during the business combination (in case ofbusiness combination accomplished through multiple transactions step by step, the combination cost is the sum of the cost of everysingle transaction). If the combination cost is greater than the fair value share of the acquiree’s identifiable net assets acquired fromthe acquiree in the combination, the case is recognized as goodwill. Where the combination cost is less than the fair value share of theidentifiable net assets acquired from the acquiree, the fair values of the identifiable assets, debts and contingent liabilities acquired inthe combination and those of non-cash assets subject to combination consideration or issued equity securities shall be rechecked first,
and then in case the combination cost is less than the fair value shares of the identifiable net assets acquired from the acquiree, thedifference shall be included in the non-operating income in the period of the combination.
6. Methods of preparing consolidated financial statements
All subsidiaries under the control of the Company are included into the consolidated financial statements.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of theCompany when preparing the consolidated financial statements, where the accounting policies and accounting periods are inconsistentbetween the Company and its subsidiaries.
All major internal transactions, inter-company balances, and unrealized profits with the scope of consolidation shall be offsetwhen preparing consolidated financial statements. The portion of owner’s equity of subsidiaries not held by the parent company andnet current profit & loss, other comprehensive incomes and the portion of total comprehensive incomes belonging to minority equityare presented under "minority equity, minority interest income, other comprehensive incomes belonging to minority shareholders andtotal comprehensive incomes belonging to minority shareholders, respectively."
For a subsidiary acquired from a business combination under common control, its operating results and cash flows are includedin the consolidated financial statements since the beginning of the consolidation year. When the comparable consolidated financialstatements are being prepared, relevant items in the financial statements of the last year are adjusted with the stated party formed aftermerging deemed to exist from the time of the ultimate controlling party starting to control.
For a subsidiary acquired through business combinations not under the same control, its operating results and cash flows shallbe included into the consolidated financial statement since the date when the Company obtains control. When preparing theconsolidated financial statements, the subsidiary’s financial statements shall be adjusted on basis of the fair value of all identifiableassets, liabilities and contingent liabilities ascertained on the purchasing date.
For equity interests in an investee not under common control realized by two or more transactions, which finally bring about thebusiness combination, equity interests in the investee before the acquisition date shall be re-measured at fair value on the acquisitiondate and the balance between the fair value and the book value shall be included in the investment gains for the current period whenpreparing the consolidated statements. If the related acquiree’s equity held before the acquiring date contains other comprehensiveincome and the other changes of owner’s equity except for net profits and losses, other comprehensive income and profit distributions,it shall be transferred to investment gains or losses on the date of acquisition, excluding the other comprehensive income derived fromchanges of net liabilities or net assets due to re-measurement on defined benefit plan by the investee.
Without losing any control right, the Company has partially disposed the long-term equity investment in the subsidiary. In theconsolidated financial statement, according to the difference between the disposal prices of part of the equity investment in thesubsidiary and net assets of the subsidiary attributed to the Company as a result of disposal of long-term equity investmentcontinuously calculated from the purchase date or consolidation date in the subsidiary, capital premium or stock premium is adjusted,where the capital surplus is not sufficient to be offset, they are adjusted to the retained earnings.
Where the Company loses the controlling right of the invested party for such reason as disposing partial equity investment, theremaining equity is re-measured as per the fair value of such equity on the day of losing controlling rights when preparing theconsolidated financial statements. The balance from the sum of the consideration obtained upon the disposal of equity and the fairvalue of the remaining equity less the appropriable share of the net asset of the former subsidiaries, calculated as per the formershareholding proportion from the purchase day or merging day, is included in the investment income for the period when the right ofcontrol is lost and the goodwill is deducted. Other comprehensive incomes related to former equity investment in subsidiaries shall berecognized as current investment profits & losses upon losing controls.
7. Classification of joint venture arrangement and accounting methods for joint operation
The joint arrangement of the Company includes the joint venture.
The Company, serving as one part of the joint venture, shall, in accordance with the provisions of the Accounting Standards forBusiness Enterprises No. 2 Long-term Equity Investments, conduct accounting treatment of the investment of the joint venture.
8. Recognition standard of cash and cash equivalents
Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that are available for payment at anytime. Cash equivalents presented in the cash flow statement refer to short-term investments (not exceeding three months) with highliquidity and that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
9. Foreign currency business and conversion of foreign currency statement
Foreign currency transactions
The Company translates the foreign-currency amount of foreign-currency transactions into an RMB amount based on the spotexchange rate applicable on the transaction date. On the balance sheet date, the monetary items in foreign currencies shall be convertedat the spot rate on the said balance sheet date. The conversion differences arising therefrom, except the exchange balance arising fromthe foreign currency borrowings special for acquisition or production of qualifying assets which shall be processed according to thecapitalization principle, shall be directly included in the current profit or loss. The foreign currency non-monetary items measured atfair value shall be converted according to the spot rate of the date when the fair value is confirmed. If the difference between theconverted amount of booking base currency and the original amount of booking base currency belongs to the salable financial asset,such difference shall be included in the capital reserve; if such difference belongs to the foreign currency non-monetary item which ismeasured at fair value and whose change is included in the profits and losses of the current period, it shall be included in current profitsand losses. The foreign currency non-monetary items measured by historical cost shall still be translated according to the spot rate onthe transaction date, while RMB amount remains unchanged.
Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of foreign operations are translated into RMB using the spot exchange rate at thebalance sheet date, while the shareholders’ equity items, except for the "undistributed profit", are translated into RMB using the spotexchange rate at the date of transaction. The income and expense items in the income statements of overseas operations are translated atthe exchange rate approximate to the spot rate at the date of transaction. The difference arising from the above translation is presentedseparately under other comprehensive income. For monetary items denominated in foreign currencies that materially constitute overseasnet investment in overseas operations, exchange differences arising from changes in exchange rates, when preparing the consolidatedfinancial statements, are also separately presented under the Shareholders’ equity as foreign currency translation differences. In case ofdisposal of an overseas operation, foreign currency translation differences relating to the overseas operation are proportionatelytransferred to the profits or losses of the period when the disposal was transacted. During the disposal of an overseas operation, othercomprehensive incomes related to the overseas operation are transferred in proportion into the disposal of current profits and losses.
The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted using the exchange rate approximateto the spot rate of the transaction date of the cash flow. The effect of exchange rate changes on cash is presented separately in the cashflow statement.
10. Financial instruments
The Company shall recognize a financial asset or a financial liability when it becomes a party to a financial instrument contract.
Financial assets
Classification, recognition basis and measurement method of financial assets
Based on the business model for management of financial assets and the contractual cash flow characteristics of financial assets,the Company classifies the financial assets into three types: 1) the financial asset measured at amortized cost; 2) the financial assetmeasured at the fair value with its changes included into other comprehensive incomes; and 3) and the financial asset measured at thefair value with its changes included into current profits or losses.
The financial assets meeting all of the following conditions can be classified as those measured at amortized cost by the Company:
① the Company adopts the business management mode of financial assets for the purpose of collecting contractual cash flow. ② In
accordance with the contract terms of the financial assets, the cash flow generated at the specific date is only the payment of theprincipal and the interest on the basis of the outstanding principal amount. Such financial assets are initially measured at their fairvalues, with related transaction costs included into the amount of initial recognition, and subsequent measurement conducted with theamortized cost. Apart from those designated as hedged items, the difference between the initial amount amortized with the effectiveinterest method and the amount due, profits or losses incurred upon amortization, impairment, exchange profits and losses andderecognition shall be included into current profits and losses.
Where the following conditions are reached at the same time, the financial assets can be classified by the Company as thosemeasured at fair value with the changes included into other comprehensive income: ① the Company adopts the business managementmode of the financial assets for the purpose of collecting contractual cash flow and selling the financial assets. ② In accordance withthe contract terms of the financial assets, the cash flow generated at the specific date is only the payment of the principal and the intereston the basis of the outstanding principal amount. Such financial assets are initially measured at their fair values, with related transactioncosts included into the amount of initial recognition. Apart from those designated as the hedged items, profits or losses incurred by suchfinancial assets shall be included into the comprehensive incomes, except for credit impairment losses or gains, exchange profits andlosses and the interests calculated as per the actual interest rate for such financial assets. Upon derecognition of the financial assets, theaccumulated gains or losses previously recorded in other comprehensive incomes shall be transferred out of such other comprehensiveincomes and included into the current profits and losses.
The interest income is recognized by the Company using the effective interest method. The interest income is determined bymultiplying the book balance of financial assets by the effective interest rate, except for conditions below:
① For the financial assets purchased by or originating from the Company with credit impairment, from the initial confirmation, the
interest income shall be determined as per the amortized cost of the financial asset and the effect interest rate subject to creditadjustment. ② The financial assets purchased by or originating from the Company with no credit impairment but having creditimpairment during the follow-up period shall be subject to interest income calculation by the Company based on the amortized cost andactual interest rate of the financial assets during the follow-up period.
The non-trading equity instrument is designated by the Company as the financial asset which is measured at its fair value withchanges included into current profits and losses. The designation shall not be canceled once it is made. The non-trading equityinstrument investment, designed by the Company to be measured at the fair value with their changes included in other comprehensiveincomes, is initially measured at fair value, with related transaction cost included in the amount of initial confirmation. Except for theobtained dividends (excluding those of the recovered investment cost), which are included in current profits and losses, other relatedprofits and losses (including exchange profits and losses) are completely included in the other comprehensive incomes and will not thenbe converted into current profits and losses. Upon derecognition, the accumulated gains or losses previously included into othercomprehensive incomes are transferred from other comprehensive incomes and included into retained earnings.
Except for the financial assets classified to be measured by the amortized cost and those measured at fair value through othercomprehensive income, other financial assets are classified by the Company as those measured at fair value through current profits andlosses. Such financial assets are initially measured at their fair values, with related transaction costs directly included into the current
profits and losses. Such financial assets are initially measured at their fair values, with related transaction costs directly included into thecurrent profits and losses. Profits or losses of such financial assets shall be included in the current profits and losses.
The financial asset formed by the contingent consideration confirmed during business combination not under the same controlare classified as those measured by its fair value by the Company, with changes included into current profits and losses.
Recognition basis and measurement method for transfer of financial assets
Financial assets meeting one of the following conditions shall be derecognized by the Company: ① the contractual right tocollect the cash flow of the financial asset is terminated; ② The financial assets have been transferred by the Company, and almost allrisks and returns associated with the ownership of the financial asset are transferred; ③ The financial assets have been transferred, andthe Company had neither transferred nor retained almost all risks and rewards in the ownership of the financial assets, but given up thecontrol over the financial assets.
For a financial asset that is entirely transferred and meets the conditions of derecognition, the difference is calculated between thebook value of the transferred financial asset and the sum of consideration received from such transfer and the accumulated changes infair value, which is directly included into other comprehensive income and corresponds to the derecognized amount (in accordance withthe contract terms of the financial assets involved in such transfer, the cash flow generated at the specific date is only the payment of theprincipal and the interest on the basis of the outstanding principal amount). This difference is included into the current profits and losses.
For a financial asset that is partially transferred and meets the conditions of derecognition, the overall book value of thetransferred financial asset is split according to the relative fair value between the part derecognized and the part not derecognized, andthe difference between the following two amounts is recognized in current profits and losses: the sum of consideration received due totransfer and the amount amortized to the derecognized part and corresponding to the accumulative change of fair value which is firstlyincluded into the other comprehensive income (in accordance with the contract terms of the financial assets, the cash flow generated atthe specific date is only the payment of the principal and the interest on the basis of the outstanding principal amount), and the overallbook value of aforesaid financial assets.
Financial liabilities
1) Classification, recognition basis and measurement method of financial liabilities
The Company’s financial liabilities are grouped, upon initial recognition, into financial liabilities measured at fair value, with thechanges included in the current profit or loss and other financial liabilities.
Financial liabilities measured at fair value with changes included in the current profits and losses include trading financialliabilities and financial liabilities designated to be measured as at fair value with changes included in the current profits and losses uponinitial recognition. The net gain or loss arising from changes in fair value, dividends and interest paid related to such financial liabilitiesare recorded in profits and losses for the period in which they are incurred.
Other financial liabilities are measured subsequently at the amortized cost by adopting the effective interest method. Apart fromthe following items, the Company will classify the financial liabilities as those measured at amortized cost: ① the financial liabilitiesmeasured at fair value with changes included into current profits and losses include financial liabilities held for trading (includingderivatives that are financial liabilities) and financial liabilities designated to be measured at fair value with changes included intocurrent profits and losses. ② The financial liabilities formed by transferring of the financial assets failed to meet the conditions forderecognition or formed by continuous involvement of transferred financial assets. ③ The financial guarantee contracts that do not fallunder the above ① and ② as well as loan commitments at a rate below the market rate of interest that do not fall under the above ①.
Where a contingent consideration is recognized by the Company as a financial liability in a business combination not undercommon control, such financial liability shall be measured at fair value with changes included into the current profits and losses during
accounting treatment.
2) Derecognition conditions for financial liabilities
When the current obligation of the financial liabilities has been relieved in whole or part, the part of the financial liabilities orobligations that have been relieved upon confirmation is terminated. If the Company reaches an agreement with the creditor to replacethe existing financial liabilities by undertaking new financial liabilities and the contract terms of the existing and new liabilities aredifferent in substance, the existing financial liabilities shall be derecognized while the new liabilities shall be recognized. Where all orpart of the contract terms of the existing financial liabilities are subject to material modification, the Company shall derecognize all orpart of the existing financial liabilities while recognizing the financial liabilities with modified terms as new financial liabilities. Thedifference between the book value of the terminated part upon confirmation and the considerations paid is included in the currentprofit and loss.
3) Method for determining the fair value of financial assets and financial liabilities
The Company measures the fair value of financial assets and financial liabilities in the main market. If there is no major market,the Company measures the fair value of financial assets and financial liabilities with most beneficial price for the market and adoptsevaluation techniques with much available data and other information support that is applicable at that time. Input data fordetermining fair values has three levels, wherein the input data of the first level is the unadjusted price available for the same asset orliability on the date of evaluation in an active market; the input data of the second level are directly or indirectly observable value ofrelevant assets or liabilities apart from input data of the first level; the input data of the third level are unobservable value of relevantassets or liabilities. The Company gives priority of using the first-level inputs and takes the third-level inputs as the last. The lowestlayer that has significant impact on the overall fair value evaluation determines which layer this fair value evaluation result shallbelong to.
Investments in equity instruments of the Company are measured at fair value. However, under certain circumstances, if recentinformation needed to determine the fair value is insufficient, or if the estimated amount of the fair value features an extensivedistribution scope and the cost represents the best estimate of the fair value in that distribution scope, the cost may represent theappropriate estimate on the fair value within that distribution scope.
Offsetting financial assets and financial liabilities
Financial assets and liabilities of the Company are presented separately in the balance sheet without offsetting. However, the netamount resulting from the offsetting between financial assets and financial liabilities shall be presented in the balance sheet only if allof the following criteria are met: (1) The Company has the statutory right to set off recognized amounts which is currently enforceable.
(2) The Company intends either to settle on a net basis, or to realize the financial assets and pay off the financial liabilities
simultaneously.
Distinction and relevant treatment methods of financial liabilities and equity instruments
The Company distinguishes between financial liabilities and equity instruments according to the following principles: (1) Wherethe Company cannot unconditionally avoid fulfilling certain contractual obligation by delivering cash or other financial assets, thensuch contractual obligation is in line with the definition of the financial liabilities. Although certain financial instruments do notexpressly contain terms and conditions for the contractual obligation to deliver cash or other financial instruments, the contractualobligation may be indirectly formed according to other terms and conditions. (2) Where a financial instrument must or is able to besettled by the Company’s own equity instrument, the Company shall consider whether the Company’s own equity instrument as thesettlement instrument is a substitute of cash or other financial assets, or the residual interest in the assets of an entity after deductingall of its liabilities. If it is the first case, the instrument shall be the financial liability of the issuer; if it is the second case, theinstrument shall be the equity instrument of the issuer. Under some circumstances, the contract of a financial instrument may require
that the financial instrument must or is able to be settled by the Company’s own equity instrument. The amount of contractual right orcontractual obligation equals to the amount of its own equity instrument receivable or payable multiplied by its fair value at the timeof settlement. Whether the amount of such contractual right or obligation is fixed, or varies, wholly or partially, based on variablesother than the market value of the Company’s own equity instrument (such as interest rates, the price of a commodity or the price of afinancial instrument), such contract is classified as financial liability.
In classifying financial instruments (or components) in the consolidated statements, the Company shall take into account all theterms and conditions agreed between members of the Company and holders of the financial instruments. If the Company, as a whole,undertakes the obligation to deliver cash, other financial assets or settle in other ways that cause the financial instrument to become afinancial liability, the instrument shall be classified as a financial liability.
If a financial instrument or any of its components is a financial liability, the relevant interests, dividends, gains or losses, andgains or losses from redemption or re-financing and so on are included in the current profits & losses of the Company.
If a financial instrument or its component belongs to an equity instrument, for its issue (including re-financing), repurchase, saleor cancellation, the Company will treat it as a change in equity and will not recognize the change in fair value of equity instruments.
Impairment of financial instruments
The Company, based on expected credit losses, performed impairment accounting and recognized credit impairment losses onfinancial assets measured at amortized cost, financial assets classified to be measured at the fair value with the changes included intoother comprehensive incomes as well as financial guarantee contracts.
The expected credit loss is a weighted average of credit losses on financial instruments weighted at the risk of default. Creditloss refers to the difference between all contractual cash flows discounted as per the original effective interest rate and receivable fromthe contract and all cash flows expected to be received by the Company, namely, the present value of a shortage of cash. Among them,financial assets purchased or underlying with credit impairment of the Company shall be discounted at the financial assets’ effectiveinterest rate after credit adjustment.
For account receivables arising from transactions scoped in ASBE on Revenue not containing significant financing components,the Company takes the simplified measurement method to measure its loss provisions based on the amount of expected credit lossesduring the entire duration.
For financial assets purchased or underlying with credit impairment, the cumulative change in expected credit loss during theentire duration since the date of balance sheet date after initial recognition will be recognized as provision for loss. On each date ofbalance sheet, the amount of change in expected credit loss during the entire duration is included into current profits and losses asimpairment losses or gains. Even if the expected credit loss within the entire duration determined on the date of balance sheet is lessthan the amount of expected credit loss reflected by estimated cash flow upon initial recognition, any favorable change in expectedcredit loss will be recognized as impairment gains.
In addition to other financial assets adopting the aforesaid simplified measurement method or financial assets purchased orunderlying with credit impairment, the Company shall assess whether the credit risk of relevant financial instruments has increasedsignificantly since the initial recognition on each balance sheet date, and shall respectively accrue their provision for loss andrecognize the expected credit loss and its change:
1) In the event that the credit risk has not increased significantly since the initial recognition and it is in Stage I, the Company
shall measure its loss provisions based on the amount of expected credit losses for the coming 12 months of such financial instrumentand calculate the interest on the basis of book balance and effective interest rate.
2) In the event that the credit risk of the financial instrument has increased significantly since the initial recognition but with no
credit impairment and it is in Stage II, the Company shall measure its loss provisions based on the amount of the expected credit lossof the financial instrument during the entire duration and calculate the interest on the basis of book balance and effective interest rate.
3) In case that credit impairment of the financial instrument has incurred since the initial recognition and it is in Stage III, the
Company shall measure the loss provisions of the financial instrument based on the amount of expected credit losses during the entireduration, and calculate the interest at amortized cost and effective interest rate.
Increases or reversals of the provisions for credit losses of the financial instrument are recorded in the current profits and lossesas impairment losses or gains. Except for financial assets classified to be measured at fair value through other comprehensive income,the book balance of financial assets is deducted with provision for credit losses. For financial assets classified to be measured at fairvalue, with the change included in other comprehensive incomes, the Company shall recognize the provision for credit loss in othercomprehensive incomes, and shall not decrease the book value of such financial assets listed in the balance sheet.
Where the Company has measured the provisions for losses based on the amount of the expected credit loss over the entireduration of such financial instruments in the prior accounting period, but on the current balance sheet date, such financial instrumentsno longer fall into the scope of significantly increased credit risk since initial recognition, the Company measures the provisions forthe losses of such financial instruments based on the amount equivalent to the expected credit losses over the coming 12 months onthe current balance sheet date, with resulting carrybacks of provisions for losses recorded in the current profits and losses asimpairment gains.
① Significant increase in credit risk
The Company determines if there is a significant increase in credit risk of financial instruments since initial recognition bycomparing the risks of default of financial instruments on the balance sheet date and the date of initial recognition based on reasonableand well-grounded forward-looking information available. For the financial guarantee contract, when the Company applies theregulations on impairment of financial instruments, the date when the Company becomes the party which makes the irrevocableundertaking is regarded as the date of initial recognition. The Company will take into account the following factors when it assesseswhether the credit risk is significantly increased: the operating results of the debtor have actually changed or are expected tosignificantly change or not; whether the regulatory, economic or technical environment where the debtor is located has significantlyand adversely changed or not; whether the value of the collateral as the debt pledge or the guarantee provided by the third party orcredit enhancement quality has significantly changed or not, as these changes are expected to reduce the economic motives of thedebtor to make repayments within the time limits prescribed in the Contract or to impact the default probability; whether the expectedperformance or repayment behavior of the debtor has significantly changed or not; whether the Company has changed its managementmethod for financial instrument credit or not, etc.
On the balance sheet date, if the Company determines that the financial instrument only carries low credit risks, then theCompany will assume that the credit risks of the financial instrument have not increased significantly since the initial recognition. Ifthe risk of default on financial instruments is low, the borrower is highly capable of performing its contractual cash flow obligationsin the short term, and even if the economic situation and operating environment are adversely changed over a long period of time butnot necessarily reducing the borrower’s performance of its contractual cash obligations, then the financial instrument is considered ashaving a lower credit risk.
② Credit-impaired financial assets
In case of one or more events adversely affecting the estimated future cash flows of a financial asset, the financial assetbecomes a financial asset to which a credit impairment has occurred. Evidence of a credit impairment on a financial asset includes thefollowing information: serious financial difficulties of the debtor; a breach of contract by the debtor, such as a default or overduepayment of interest or principle; the creditor, for economic or contractual considerations relating to financial difficulties of the debtor,offers the debtor concessions that are impossible in any other circumstances; it is probable that the debtor will enter bankruptcy or
other financial reorganization; the disappearance of an active market for that financial asset because of financial difficulties of theissuer or the debtor; the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.
The credit impairment of financial assets may be caused by the joint effect of the above multiple events, and may not be caused byindividually identifiable events.
③ Determination of expected credit losses
In assessing the expected credit loss, the Company takes reasonable and well-founded information into consideration about pastevents, current condition and predictions of future economic status based on the expected credit loss of single and combined financialevaluation instruments.
The Company divides the financial instruments into different portfolios based on the common credit risk characteristics. Seeaccounting policies of relevant financial instruments for single evaluation standards and combined credit risk characteristics.
The Company determines the expected credit losses of financial instruments under the following methods: For financial assets, thecredit loss is calculated as the present value of the difference between the contractual cash flows to be collected by the Company andcash flows that are expected to be collected.
For the financial guarantee contract, the credit loss is the expected payment made to the contract holder by the Company toreimburse the contract holder against the credit losses incurred by the contract holder, deducted by the present value of the differencesbetween the amounts expected to be received by the Company from the contract holder, debtor or any other party.
For financial assets which have been credit-impaired on the balance sheet date but are not purchased or underlying with creditimpairment, the credit loss is calculated as the difference between the book balance of such financial assets and present value ofanticipated future cash flows discounted at the original effective interest rate.
11. Notes receivable
The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics, divides the notesreceivable into different combinations and determines the accounting estimation policy of expected credit loss.
- 61 -Classification of combination
| Classification of combination | Basis for determining combination | Provision method |
| Banker’s acceptances combined | The acceptor is a banking financial institution. | The Company believed that there was no significant credit risk in the bank’s acceptance held by the Company and there will be no significant loss due to the default of the bank. |
| Trade acceptances combined | The acceptor is a non-bank financial institution or enterprise like a finance company. |
The Company shall measure the bad-debt provision ofreceivable trade acceptance based on the expected credit lossduring the entire duration.
12. Accounts receivable
For the receivables arising from transactions regulated by the Accounting Standards for Business Enterprises No. 14 RevenueStandards (whether or not containing significant financing components) and the lease receivables regulated by the AccountingStandards for Business Enterprises No. 21 Leasing, the Company takes the simplified measurement method to measure its lossprovisions based on the amount of expected credit losses during the entire duration.
For accounts receivable, the Company assesses whether the credit risk increases significantly on the basis of a single financial
instrument or a combination of financial instruments. The Company singly evaluates the credit risk of receivables with significantlydifferent credit risks and the following characteristics: receivables in dispute with the other party or involved in litigation andarbitration; accounts receivable that there are obvious indications showing that the debtor is likely to be unable to fulfill therepayment obligation. The Company is unable to obtain sufficient evidence of significant increase in credit risk at the level of singlefinancial instrument at reasonable cost, but it is feasible to assess whether the credit risk increases significantly on the basis of thecombination of financial instruments. When the assessment is performed on the combination of financial instruments, the Companycan classify the financial instruments based on the common credit risk characteristics.
The Company classifies the accounts receivable into the following combinations based on their credit risk characteristics:
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Classification of combination
| Classification of combination | Basis for determining combination | Provision method |
| Credit loss that accrues accounts receivable by aging analysis method | Accounts receivable with the same aging have similar credit risk characteristics | Expected rates of credit loss |
| Related parties within the consolidation scope | Funds of subsidiaries within the consolidation scope of controlling shareholders | No expected credit loss under normal circumstances |
If there is objective evidence showing that the credit impairment of certain account receivable has incurred, the Company shallsingly withdraw the bad debt reserve of accounts receivable and confirm the expected credit loss.
For accounts receivable with credit loss accrued from receivables by aging analysis method, based on the actual credit loss ofprevious years and considering the forward-looking information of this year, the accounting estimate policies of the Company formeasuring the expected credit loss are as follows:
| Aging | Expected rates of credit loss |
| Within 1 year | 5.00% |
| 1-2 years | 10.00% |
| 2-3 years | 20.00% |
| 3-4 years | 50.00% |
| 4-5 years | 80.00% |
| More than 5 years | 100.00% |
The Company calculates the expected credit loss of receivables on the balance sheet date. If the expected credit loss is greaterthan the carrying amount of the current receivables impairment provision, the Company will recognize the difference as impairmentloss of receivables, debit "credit impairment loss" and credit "bad debt provision". Otherwise, the Company will recognize thedifference as impairment gains and make opposite accounting records.
For the actual credit losses of the Company, if the relevant receivables are determined to be unrecoverable and are approved to bewritten off, the Company shall debit "bad debt provision" and credit "accounts receivable" according to the approved write-off amount.If the write-off amount is greater than the accrued loss provisions, the "credit impairment loss" will be debited according to thedifference.
13. Receivables financing
Where the following conditions are reached at the same time, the financial assets can be classified as those measured at fair valueand its change and included in other comprehensive income: the Company adopts the business management mode of the financial assetsfor the purpose of collecting contractual cash flow and selling the financial assets; as stipulated in contract terms of the financial assets,the cash flows generated on special dates are solely the payments to principals and interests on the principal amount outstanding.
In the case where the Company transfers the receivables held in the form of discount or endorsement and such business is morefrequent and involves a large amount of money, its business management model is, in essence, to collect and sell contract cash flow,and according to the relevant provisions of financial instrument standards, the receivables are classified into financial assets withchanges measured at fair value and included in other comprehensive income.
14. Other receivables
Determination and accounting method for expected credit loss of other receivables
The Company divides the process of credit impairment of other receivables into three stages and adopts different accountingtreatment methods for the impairment of other receivables in different stages:
Credit risk has not increased significantly since initial recognition (Stage I)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit loss in thenext 12 months.
The Company classifies other receivables based on aging as a credit risk characteristic and measure them on the basis ofcombination, which is equivalent to the expected credit loss in the next 12 months.
Credit risk has increased significantly since initial recognition but has not been impaired (Stage II)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit lossduring the entire duration.
Credit impairment after initial recognition (Stage III)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected credit lossduring the entire duration.
15. Inventories
Inventories of the Company mainly include low-value consumables, raw materials, goods in-process, merchandise inventory andgoods shipped in transit.The inventories are managed based on perpetual inventory system, and valued at actual cost on acquisition. Low-valueconsumables and packaging materials are amortized using one-off amortization method.
At the end of accounting period, inventory is valuated at cost or net realizable value, whichever is lower; provision forinventory depreciation reserves is made for the part of the cost uncollectible of inventory due to damage, fully or partially out ofdate or selling price lower than the cost, etc. Inventory revaluation reserves of merchandise inventories and raw materials aregenerally accrued as the excess of the higher cost of individual inventory over its net realizable value. For raw and auxiliarymaterials of larger amount and lower unit price, inventory revaluation reserves shall be accrued based on the category.
Net realizable value of merchandise inventories, goods in-process or held-for-sale materials is determined by their estimatedselling price deducted by estimated selling expenses and related taxes; net realizable value for materials held for production isdetermined by the estimated selling price of finished goods deducted by the estimated cost to completion, estimated selling expensesand the related taxes.
16. Contract assets
Recognition method and standard of contract asset
Contract asset refers to the rights of the Company to receive consideration for goods transferred to the customer, which depend onother factors except for the lapse of time. For example, where the Company sells two clearly distinguished commodities to the customerand has the right to collect the payment because one commodity is delivered but the payment relies on the delivery of the other
commodity, the Company will treat the collection rights as the contract assets.
Determination and accounting method for expected credit loss of contract assets
For the determination method for expected credit loss of contract assets, please refer to relevant contents in 10. Financial asset andliabilities; 11. Notes receivable and 12. Receivables.
The Company calculates the expected credit loss of contract assets on the balance sheet date. If the expected credit loss is greaterthan the carrying amount of the current impairment provision of contract assets, the Company will recognize the difference asimpairment loss, debit "asset impairment loss" and credit "contract asset impairment provision". Otherwise, the Company will recognizethe difference as impairment gains and make opposite accounting records.
For the actual credit losses of the Company, if the relevant contract assets are determined to be unrecoverable and areapproved to be written off, the Company shall debit "contract asset impairment provision" and credit "contract assets" according tothe approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the "asset impairment loss" willbe debited according to the difference.
17. Contract costs
Method for determining amount of assets related to contract costs
The Company’s assets related to the contract costs comprise the contract performance cost and the contract acquisition cost.
The contract performance cost, namely the cost incurred to perform the contract by the Company, not covered by otheraccounting standards for business enterprises, shall be deemed as one asset if it meets the conditions below: the cost is directlyrelated to one existing contract or one contract expected to be acquired and covers direct labor cost, direct material cost,manufacturing cost (or similar cost), the cost clearly specified to be borne by the customer and other costs incurred by the contractonly; the cost increases the resources available to the Company to fulfill performance duties in the future; the cost is expected to berecovered.
The contract acquisition cost refers to the incremental cost incurred by the Company for the purpose of securing a contract,which will be recognized in the form of contract acquisition cost as an asset if it is expected to be recovered; if the amortizationperiod of the assets does not exceed one year, such cost shall be included in current profit or loss. Incremental cost refers to the costwhich will not incur unless a contract is secured by the Company (e.g., sales commission, etc.). Other costs (such as the travelexpense, whether or not the contract will be acquired, except the incremental cost which can be recovered as expected) incurred theCompany for purpose of acquiring the contract shall be included in the current profit or loss at the time of occurrence, unless thoseclearly specified to be borne by the customer.
Asset amortization related to contract costsThe Company’s assets related to contract costs are amortized on the same basis as revenue recognition of goods related to the asset andincluded in the current profits or losses.
Asset impairment related to contract cost
When the Company recognizes the impairment loss related to contract costs, the Company shall firstly recognize theimpairment loss of other assets which are recognized as per other account standards for business enterprises and are related to thecontract. Then, if the book value is higher than the difference between the remaining consideration expected to be received for thetransfer of the commodity associated with the asset and the estimated costs to be incurred for the transfer of relevant commodity,impairment provision will be made for the excess portion and recognized as asset impairment loss.
If the factors causing the impairment of prior period change and make the previous difference between the above-mentioneditems higher than the book value of the asset, the withdrew asset impairment provision shall be reversed and recorded in the currentprofits or losses, although the book value of asset after reversion shall not exceed the book value of the asset at the reversion dateunder the condition of not withdrawing the impairment provision.
18. Assets held for sales
None
19. Debt investment
None
20. Other debt investment
None
21. Long-term receivables
None
22. Long-term equity investment
Long-term equity investment of the Company mainly includes the investment to the subsidiaries, associated enterprises and jointventures. The Company follows the basis to judge the joint control: all the participants or group of participants collectively control thearrangements, and the policies for activities related to such arrangement must be agreed by all such participants.
In general, it constitutes significant influence on an investee if the Company directly or indirectly, through a subsidiary, controls20% (inclusive) or more (less than 50%) of voting shares of the investee. Where the Company controls less than 20% voting shares ofthe investee directly or indirectly through a subsidiary, significant effects on the investee shall be judged based on the facts andcircumstances where the Company appoints representative to the board of directors or similar authority of the investee, participatesthe development of financial and operating policies of the investee, conducts important trading with the investee, dispatchesmanagement personnel to the investee or provides key technical data to the investee.
The one forming control over the investee is the subsidiary of the Company. For the long-term equity investment acquiredthrough business combination under the same control, the share of the combined party in the book value of net assets presented inconsolidated financial statements of ultimate controlling party acquired at the date of combination is recognized as initial investmentcost of long-term equity investment. The book value of net assets for the combined party is negative on the combining date, and thelong-term equity investment cost is determined as zero.
In case the equity of the investee under the same control is obtained through multiple deals step by step to finally form businesscombination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, theshare of the book value of combined party’s net assets presented in consolidated financial statements of ultimate controlling partyacquired at the date of combination is recognized as initial investment cost of long-term equity investment. The difference betweeninitial investment cost and the sum of the book value of long-term equity investment before the combination is realized and the bookvalue of consideration additionally paid to further acquire shares on the date of combination is adjusted against the capital surplus; ifthe capital reserve is not sufficient to be offset, the remaining balance is adjusted against retained earnings.
For long-term equity investments acquired through business combinations not under common control, the combined cost is usedas the initial investment cost.
In case the equity of the investee under the same control is obtained through multiple deals step by step to finally form businesscombination, for package deals, the Company shall account each deal as a deal to obtain the control. If it is not a package deal, initial
investment cost accounted using cost method will be the sum of the book value of original equity investment and new investment cost.For equity investments held before the date of acquisition where equity method is adopted, relevant other comprehensive incomeaccounted originally by equity method shall not be adjusted for the time being, accounting treatment should be applied to theinvestment on the same basis as those adopted by the invested entity for direct disposal of related assets or liabilities. For equity heldbefore the date of acquisition and accounted at fair value in the available-for-sale financial assets, the accumulated change in fairvalue which is originally included in other comprehensive income shall be transferred to the investment profit or loss for the currentperiod on the combining date.
Apart from the long-term equity investments acquired through business combination mentioned above, the long-term equityinvestments acquired by cash payment is recorded as the cost of investment based on the purchase price actually paid. For long-termequity investments obtained by issuing equity securities, the fair value of the equity securities issued is recorded as the investmentcost. For long-term equity investments obtained by exchange of non-monetary assets, the initial investment cost shall be determined inaccordance with relevant provisions in the Accounting Standards for Business Enterprises No. 7 Exchange of Non-Monetary Assets.
For long-term equity investments obtained by debt restructuring, the initial investment cost shall be determined in accordance withthe relevant provisions of the Accounting Standards for Business Enterprises No. 12 Debt Restructuring. Investment in subsidiaries bythe Company shall be calculated by cost method, while investment in joint ventures and associates by the Company shall be calculatedby equity method.
For long-term equity investment calculated by cost method, the cost of long-term equity investment shall be adjusted when theinvestment is added or recovered. The cash dividends or profits declared to be distributed by the investee shall be recognized as thecurrent investment income.
For long-term equity investment calculated by equity method in subsequent measurement, the book value of the long-termequity investment shall be increased or decreased accordingly with the changes in owner’s equity of the investee. The shares of thenet profits & losses of the investee attributable to the Company shall be recognized based on the fair value of all identifiable net assetsof the investee upon acquisition of the investment in accordance with the accounting policies and accounting period of the Company,after deducting the parts of the profits & losses arising from internal transactions between the associates and joint ventures attributableto the Company calculated on the basis of shareholding ratio and adjusting the net profits of the investee.
When disposing the long-term equity investment, the balance between the book value and the acquired price actually shall beincluded in the current profit and loss. As for long-term equity investments calculated by the equity method, when other changes inowners’ equity other than net gain or loss of the investee are recorded in owners’ equity, the amount initially recorded in owners’equity is proportionally transferred into current investment income.
If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong to package transaction, theCompany will conduct accounting treatment for each transaction. In case of package transaction, all transactions shall be calculated asone transaction of disposing subsidiaries and losing control power for accounting treatment. However, the difference between disposalcost of each transaction and book value of long-term equity investment corresponding to equity disposed before losing control powershall be recognized as other comprehensive income and then shall be transferred into current profits and losses of losing controlpower upon such loss.
23. Investment real estate
Leased houses and buildings are included into the investment real estates of the Company. Measurement is carried out by cost model.The investment real estates of the Company are depreciated or amortized by the composite life method. The estimated service life, netresidual value ratio and annual depreciation (amortization) rate of the investment real estate are as follows:
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Type
| Type | Depreciation period (year) | Estimated residual value ratio (%) | Annual depreciation rate (%) |
| Houses and buildings | 20 years | 5.00 | 4.75 |
24. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year, which are held for producing goods,rendering labor services, lease (exclusive of leased houses and buildings) or operation and management.
Fixed assets are recognized when the economic benefits related thereto are likely to flow into the Company and their costs can bemeasured reliably. Fixed assets include houses and buildings, machine and equipment, transportation equipment and other equipment,and the actual cost at the time of acquisition is taken as the entry value. Among them, the cost of purchased fixed assets includes thepurchase price, import duties and other related taxes, as well as other expenditures that can be directly attributed to the fixed assetsbefore the fixed assets reach the predetermined serviceable state; the cost of the self-constructed fixed assets consists of necessaryexpenses incurred before the constructed assets are ready for the intended use; the fixed assets invested by investors shall be accountedfor at the value agreed in the investment contract or agreement, or at the fair value if the value agreed in the investment contract oragreement is unfair; for fixed assets obtained by financing lease, the lower of the fair value of rented assets and the present value ofthe minimum lease payment on the lease start date shall be recorded as the entry value.
(2) Depreciation method
| Type | Depreciation method | Depreciation period | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 20 years | 5.00% | 4.75% |
| Machine and equipment | Straight-line method | 10 years | 5.00% | 9.50% |
| Transportation equipment | Straight-line method | 5 years | 5.00% | 19.00% |
| Other equipment | Straight-line method | 5 years | 5.00% | 19.00% |
Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assets mainly includesrenovation/modification expenditure and repair expenditure. When the relevant economic benefits are likely to flow in and thecosts can be measured in a reliable manner, they shall be included in the cost of fixed assets. For the replaced part, the book valueshall be derecognized. All the other subsequent expenditures are recognized in profit or loss for the current period in which theyare incurred.
The Company will recheck the estimated service life, the estimated net residual value and the depreciation method of thefixed assets on each balance sheet date.
Changes, if any, are regarded as the accounting estimate changes. A fixed asset is derecognized when it is disposed of or noeconomic benefit is expected from the use or disposal of the asset. The amount of proceeds on sale and transfer of a fixed asset aswell as disposal of a scrapped or damaged fixed asset less its carrying amount and related taxes, is recognized in profit and loss forthe current period.
25. Construction in process
Construction in progress is measured at the actual cost. The self-operating works are measured according to the directmaterial, direct wage, direct construction cost, etc.; the outsourced works are measured according to the project price payable; theproject cost of the equipment installation works is determined according to the value of installed equipment, installation cost,commissioning cost and other expenditures incurred. The cost of construction in process shall also include borrowing costs thatshould be capitalized.The fixed assets constructed by the Company shall be transferred into fixed assets at the estimated value based on projectbudget, construction cost and actual project cost from the date when fixed assets get ready for intended use and depreciation of
such assets will be accrued in next month. Upon completion of the final accounts formalities, the original value difference of thefixed assets will be adjusted.
26. Borrowing costs
Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the Company that can be directlyattributable to the acquisition and construction or production of qualifying assets, will be capitalized and included in the relevant assetcost. Other borrowing costs are recognized as expenses based on the amount incurred and included in the current profit and loss.Qualifying assets are defined as assets that require a substantial amount of time (usually more than one year) for construction orproduction activities before the asset is ready for its intended use or sale. These include fixed assets, intangible assets and inventory.
Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costs related to the qualifying assetswhen the asset expenditure has been incurred, the borrowing costs have been incurred, and the acquisition, construction or productionactivities necessary to prepare assets for their intended use or sale are in progress. Where the acquisition, construction or production of aqualifying asset are interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowingcosts shall be suspended. Capitalization of borrowing costs shall cease once the acquisition, construction or production necessary toprepare the qualifying asset for its intended use or sale are complete.
Method for calculating the amount of borrowing costs to capitalize: If borrowing funds are used specifically for acquiring,constructing or producing qualifying assets, the amount of interest eligible for capitalization by the Company will be the actual interestcosts incurred during the specific borrowing period minus the interest income obtained by depositing or temporarily investing unspentborrowed funds. Where a general borrowing is used for the acquisition and construction or production of qualifying assets, theCompany shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weightedaverage of the accumulative asset expenditure minus the asset expenditure of the specific borrowing by the weighted average interestrate of the general borrowing used.
27. Biological assets: none
28. Oil & gas assets: none
29. Right-of-use assets
The right-of-use asset refers to the right of the Company to use the leased assets as a lessee during the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company carries out initial measurement to the use-of-right asset. The costcomprises the following four items: ① initial measurement amount of lease liabilities; ② the amount of lease payment made on orbefore commencement date of lease term, net of relevant amount of used lease incentives (if any); ③ the initial direct cost incurred (i.e.,the incremental cost incurred by reaching the lease agreement); ④ costs expected to be incurred to disassemble and remove the leasedassets, restore the site where the leased assets are located or restore the leased assets to the conditions as agreed under the terms of thelease, excluding costs incurred to produce the inventory.
(2) Subsequent measurement
On the commencement date of the lease term, the Company carries out subsequent measurement to the use-of-right assets in thecost mode, that is, measuring the use-of-right assets by deducting the accrued depreciation amount and accrued impairment loss fromthe cost. Where the Company remeasures the lease liabilities according to relevant provisions of the lease criterion, the book value ofthe use-of-right assets shall be adjusted correspondingly.
Depreciation of right-of-use assets
On the commencement date of the lease term, the provision for depreciation shall be made by the Company to the right-of-useassets. Generally, the depreciation amount of the use-of-right assets is accrued from the month when the lease term starts. Theaccrued depreciation amount shall be recognized as the cost of relevant assets or current profit or loss according to the purpose ofthe right-of-use assets.
When determining the depreciation method of right-of-use asset, the Company shall make decisions according to theexpected consumption method of the economic benefits related to the right-of-use asset and accrue depreciation to the right-of-useasset with the linear method.
When determining the depreciation years of the right-of-use assets, the Company shall follow the principles below: If theCompany can reasonably determine that the ownership of the leased assets is acquired at the expiration of the lease term,depreciation shall be accrued within the remaining service life of the leased assets; if it is not reasonably certain that the ownershipof the leased assets can be acquired at the expiration of the lease term, the leased assets shall be depreciated over the shorter of thelease term and the remaining service life of the leased assets.
Impairment of right-of-use assets
In case of impairment of use-of-right assets, the Company shall make subsequent depreciation as per the book value of use-of-right assets after the impairment loss is deducted.
30. Intangible assets
(1) Valuation method, service life and impairment test
The intangible assets of the Company mainly include land use rights, software, trademarks and patents. As for intangibleassets that are purchased, the actual cost is composed of the actual price paid and other relevant expenditures. For the intangibleassets that are invested by investors, the actual cost is determined by the agreed value in the investment contract or agreement, butif the agreed value is not fair, the fair value will be taken as the actual cost. Intangible assets are amortized using the composite lifemethod, and the classifications and amortization periods of the Company’s intangible assets are as follows:
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Type
| Type | Amortization year |
| Land use right | 50 years |
| Patents | 10 years |
| Software | 3--5 years |
| Trademark or domain name | 10 years |
The Company’s land use rights are amortized evenly according to the lease term, starting from the date of transfer. TheCompany’s patent rights, non-patented technologies, special software use rights and other intangible assets are amortized evenlyby stages according to whichever period is the shortest: the asset’s estimated service life, the beneficial period stipulated in thecontract, or the period of legal validity. The amount of amortization is included into the current profits and losses or included intothe relevant asset cost according to the beneficiaries.
At the end of each year, the Company shall review, and adjust in case of changes, the estimated service life and amortizationmethods used for intangible assets with limited service life; in each accounting period, the Company shall review the estimatedservice life of intangible assets whose service life is uncertain. Where there is evidence showing that the service life of theseintangible assets is limited, the Company shall estimate the service life thereof and amortize these intangible assets during theestimated service life.
(2) Accounting policies for internal R&D expenditures
The internal R&D expenditures of the Company can be divided into expenditures made at the research stage and those madeat the development stage, depending on the nature of the expenditure and the extent of uncertainty on whether the R&D activitieswill finally form intangible assets.
For internally-generated intangible assets, expenditures at the research stage are included in the current profits and losses, andexpenditures at the development stage are recognized as asset when the following conditions are met:
? It is technically feasible to complete the intangible assets so that they can be used or sold.? There is an intention to complete and use or sell the intangible assets.? There is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assetsthemselves.? There is sufficient support in terms of technological, financial and other resources in order to complete the development of the intangible assets, andthere is the capability to use or sell the intangible asset.? The expenditures made on the intangible assets during the development stage can be measured reliably.
Expenditures made in the development stage that fail to meet the above conditions shall be included in the current profits andlosses when incurred. The development expenditures previously included in the profit and loss statement will not be recognized asassets in subsequent periods. The expenditures incurred and capitalized at the development stage are recorded as developmentexpenditures on the balance sheet and will be carried over as the intangible asset on the date when the project is ready for its intendeduse.
If the expenditures made at the research and development stages cannot be distinguished, all the R&D expenditures incurred willbe fully included in the current profits and losses. The costs of the intangible assets generated by internal development activities onlyinclude the total expenditures incurred from the time when the capitalization conditions are met to the point when the intangible assetsare used for their intended purposes; for expenditures that are already recorded as such in the profit and loss statement before thecapitalization conditions are met during development of the same intangible asset, no adjustments will be made.
31. Impairment of long-term assets
On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures and associated companies,including long-term equity investments, fixed assets, projects under construction, and intangible assets with finite service life. If anyof the signs listed below are identified, this is an indication that the asset may be impaired and the Company shall conduct animpairment test. Impairment tests are carried out on goodwill and intangible assets with uncertain service life at the end of each period,irrespective of whether there is any indication that the assets may be impaired. If there is difficulty in testing the recoverable amountof a single asset, a test shall be conducted on the asset group which the asset belongs to, or on a combination of asset groups.
After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference shall be recognized as animpairment loss. Once such an impairment loss has been confirmed, it shall not be reversed in the subsequent accounting period. Therecoverable amount of an asset is the greater of its fair value less the net value of asset disposal and present value of expected futurecash flow.
The following signs may indicate asset impairment:
? Current market price of the asset drops substantially, with the drop in price being notably higher than the expected drop over timeor due to the asset’s normal use.? Significant changes occur in the current period or will occur in the recent future in terms of the economic, technical or legal
environment of the operation of an enterprise, and the asset market which have or will have negative impacts on the enterprise.? The market interest rate or other market investment return rates have risen in the current period, affecting the enterprise’s
discount rate for calculating the asset’s present value of expected future cash flow, and leading to a substantial decrease in
recoverable amounts of the assets.? There is any amount of evidence to prove the asset has been out of date or the physical asset has been damaged.? The asset has been or will be left unused, terminated for use or disposed of ahead of schedule.? There is evidence from the enterprise’s internal reports proving that the economic performance of the asset has been lower or
will be lower than expected. For example, the net cash flow generated by the assets or operating profits (or losses) realized is
much lower (or higher) than the expected amounts;
Other signs indicating that the asset may have been impaired.
32. Long-term deferred expenses
The long-term deferred expenses of the Company refer to the expenses that have been paid, but shall be borne in the currentand future periods with an amortization period of more than one year. Moreover, such expenses shall be subject to averageamortization within the benefit period. If long-term deferred expense items cannot benefit the future accounting periods, theamortized value of such items yet to be amortized shall be fully transferred into the current profits and losses.
33. Contract liabilities
Contract liabilities reflect the obligations of the Company to transfer goods to the client for which consideration is received orreceivable from the client. Before the Company transfers goods to the client, and the client has paid the consideration in the contractor the Company has obtained the right of unconditionally collecting the consideration, the contract liabilities are recognizedaccording to the received or receivable amount either at the time of actual payment by the client or when the payment isdue―whichever is earlier.
34. Employee remuneration
(1) Accounting treatment method of short-term remuneration
Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employee welfare, housing funds, laborunion funds, employee education funds, medical insurance premiums, industrial injury insurance premiums, and maternity insurancepremiums. In the accounting period during which the employee has rendered service, the actual short-term remuneration incurred isrecognized as a liability and recorded in the current profits and losses or related asset costs based on the beneficiary.
(2) Accounting treatment method of post-employment benefits
The post-employment benefits mainly consist of basic endowment insurance, unemployment insurance, enterprise and annuitypayments, which are classified into defined contribution plans according to the risks and obligations undertaken by the Company.Moreover, the contributions paid into a separate entity in exchange for the employee’s services during the accounting periods at thebalance sheet date are recognized as a liability, and recorded in current profits and losses or relevant asset costs based on thebeneficiary.
(3) Accounting treatment method of dismissal benefits
Dismissal benefits are required in instances when the Company terminates labor relationships with a certain employee prior tothe maturity of their labor contract. The Company shall recognize the employee remuneration liabilities incurred from terminationbenefits and include them into the current profits and losses. This occurs either when the Company cannot unilaterally withdraw thetermination benefits provided by the plan on the termination of the labor relationship or dismissal proposal, or when the Companyrecognizes the costs or expenses related to restructuring the payment of termination benefits-whichever occurs earlier. Thecompensations paid exceeding one year will be discounted then included in the current profits or losses.
(4) Accounting treatment method of other long-term employee benefits
Other long-term benefits mainly include long-term incentive plans and long-term benefits. The Company conducts accountingtreatment according to relevant provisions of the defined contribution plans.
35. Lease liabilities
(1) Initial measurement
The Company shall initially measure the lease liabilities according to the present value of the lease payment unpaid on the
commencement date of the lease term.
1) Lease payment
The lease payment refers to the payment made by the Company to the leaser as for the right of use the leased assets during thelease term, including: ① fixed payment and practical fixed payment, with relevant lease incentive (if any) deducted; ② variablelease payments that are based on an index or rate, which shall be determined at the time of initial measurement based on the index orrate on the commencement date of the lease term; ③ the exercise price of a purchase option if the Company is reasonably certain toexercise that option; ④the amount payable for exercising the option to terminate the lease if the Company intends to exercise theoption to terminate the lease during the lease term; ⑤ expected payable amount based on secured residual value provided by theCompany.
2) Discount rate
In calculating the present value of the lease payments, the Company adopts the interest rate implicit in lease as the discountrate. This interest rate is the interest rate that makes the sum of the present value of the lessor's lease income and the present valueof the unsecured residual value equal to the sum of the fair value of the leased assets and the lessor's initial direct costs. If theCompany is unable to determine the interest rate implicit in lease, it will adopt the incremental borrowing rate as the discount rate.The incremental loan interest rate is defined as the interest rate that the Company would have to pay to borrow, for a term similar tothe duration of the lease and with similar security, the funds necessary to obtain an asset of similar value to the asset by right of usein a similar economic environment. The interest rate is related to the following items: ① the Company's own conditions, namely,the solvency and credit status of the Group; ② the term of the "loan", namely, the lease term; ③ the amount of "borrowed" funds,namely, the amount of the lease liability; ④ the "mortgage condition", namely, the nature and quality of the underlying asset; and
⑤ the economic environment, including the jurisdiction of the lessee, the invoicing currency and the time of signing the contract.
On the basis of the bank loan interest rate and taking into account the above factors, the Company calculates the incrementalborrowing rate.
(2) Subsequent measurement
When the lease term commences, the Company shall make subsequent measurement for the lease liabilities on the basis ofprinciples below: ① increase the carrying account of lease liabilities when the interests of lease liabilities are recognized; ② decreasethe carrying account of lease liabilities when the lease payment is made; ③ remeasure the book value of lease liabilities when the leasepayment is changed due to revaluation, lease change or other reasons.
The interest expenses of lease liabilities in each period of the lease term are calculated in accordance with the fixed periodicinterest rate, and are included in the current profit or loss, unless capitalization is required. The periodic interest rate refers to thediscount rate taken by the Company for initial measurement or the revised discount rate taken by the Company when it is necessary toremeasure the lease liabilities as per the revised discount rate due to lease payment change or lease change.
(3) Remeasurement
When the following circumstances occur after the commencement of the lease term, the Company shall remeasure the leaseliabilities according to the present value of the changed lease payment and adjust the book value of right-to-use assets accordingly. Ifthe book value of the right-to-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the Companyshall include the remaining amount in the profits and losses of the current period. ① a change in the practical fixed payment (in thiscase, the original discount rate is adopted); ② a change in the amount expected to be payable for the residual value of the guarantee (inthis case, the original discount rate is adopted); ③ a change in the index or ratio used to determine the lease payment (in this case, therevised discount rate is adopted). ④ a change in the evaluation result of the purchase option (in this case, the revised discount rate isadopted); ⑤ a change in the evaluation results or actual exercise of the option to renew or terminate the lease (in this case, the reviseddiscount rate is adopted).
36. Provisions
When obligations relating to contingencies such as external guarantee, pending litigation or arbitration, product qualityassurance, layoff plans, loss contracts, restructuring obligations, environmental pollution control, commitments, and disposalobligation of fixed assets also meet the following conditions, the Company recognizes it as a liability: the obligation is currentlybeing undertaken by the Company; there is a high possibility that the fulfillment of the obligation will result in the outflow ofeconomic benefits from the enterprise; and the amount of the obligation can be reliably measured.
Provisions are initially measured according to the best estimate of the expenditure required to settle the present obligation,taking into account factors relating to contingencies such as risks, uncertainties and the time value of money. Where the time valueof money has a significant impact, the best estimate shall be ascertained after discounting the future relevant cash outflow. Thebook value of provisions is reviewed at the balance sheet date and adjusted to reflect the current best estimate if there is any change.
For possible obligations arising from past transactions or events whose existence depends on whether one or more uncertainfuture events occur; or for present obligations formed by past transactions or events, where the fulfillment of the obligation is notlikely to cause an outflow of economic benefits from the Company, or the amount of the obligation cannot be reliably measured,the Company will disclose these possible or present obligations as contingent liabilities.
37. Share-based payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities are incurred based on equityinstruments in order to obtain services provided by the employees or other parties. Share-based payments are divided into equity-settled and cash-settled share-based payments.
Equity-settled share-based payments made in exchange for the service of employees are measured at the fair value on the date atwhich the equity instrument is granted to employees. Where the right may only be exercised if the service is completed within thewaiting period, or if specified performance conditions are met, the fair value shall be included in relevant costs or expenses using thestraight-line method and capital reserve shall be increased accordingly, based on the best estimate of the number of vested equityinstruments within the waiting period.
Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized on the basis of share optionsor other equity instruments undertaken by the Company. If excisable immediately after the grant, the fair value of the liabilitiesassumed shall be included in the relevant costs or expenses on the grant date, and the liabilities shall be increased accordingly. If it isnecessary to complete the services in the waiting period or achieve the specified performance conditions before the right is excisable,on each balance sheet date of the waiting period, the services acquired in the current period shall be included in the cost or expensebased on the best estimation of the excisable right, and the liabilities shall be adjusted accordingly according to the fair values of theliabilities assumed by the Company.
On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fair value of the liabilities will bere-measured, with any changes recorded in the profits and losses at the current period.
38. Preferred shares, perpetual bonds and other financial instruments.
39. Income
Accounting policies used for the recognition and measurement of income
Operating revenues of the Company mainly include the income from sales of goods, rendering labor service and transferring right-of-use assets.
Revenue recognition principle
The Company recognizes the revenue upon fulfillment of its performance obligations within the contract, that is, when the clientobtains control of the relevant goods or services. Acquisition of control over relevant goods or services means the ability to managethe use of such goods or the provision of services and to receive almost all economic benefits therefrom.
The Company assesses the contract from the commencement date of the contract and recognizes each individual performanceobligation included by the contract, and determines if each individual performance obligation will be fulfilled during a certain periodor at a certain time point.
The performance obligations are to be fulfilled within a specified period once the Company meets one of the following conditions;otherwise, the Company is to fulfill the performance obligations at a specified time point:
1) The client obtains and consumes the economic benefits while the Company fulfills the performance obligations.
2) The client can control goods or services still under construction while the Company is still in the process of fulfilling the
performance obligations.
3) The goods generated while the Company is in the process of performing the contract are indispensable, and the Company
has the right to collect partial payments for the cumulative performance obligations that have been fulfilled so far within thecontract period.
If the performance obligations are performed within the specified period, the Company will recognize the revenue within thisperiod in accordance with the progress of the contract’s performance. If the performance progress cannot be reasonably determinedand the costs incurred by the Company are expected to be compensated, the revenue will be ascertained according to the costsincurred, until the performance progress can be reasonably determined.
If the performance obligations are performed at the specified time point, the Company will recognize the revenue at the time whenthe client obtains control over the relevant goods or services. In judging whether the client has obtained control over goods or services,the Company shall consider the following signs:
1) The Company has the current right to collect payment for the goods or services.
2) The Company has transferred the legal ownership of the goods to the client.
3) The Company has transferred physical possession of the goods to the client.
4) The Company has transferred the main risks and rewards of ownership of the goods to the client.
5) The customer has accepted the goods or services, etc.
The Company lists the right to receive considerations for transfer of goods or services to the customer as a contract asset, forwhich the impairment will be withdrawn on the basis of expected credit loss. The right of the Company to unconditionally receiveconsiderations from the customer is listed as receivables. The Company presents the obligation to transfer goods or services to thecustomer for considerations received or receivable from the customer as a contract liability.
Revenue measurement principle
1) If there are two or more performance obligations in the contract, the Company will apportion the transaction price to each single
performance obligation according to the relative proportion of the separate selling price of the goods or services promised by the singleperformance obligation at the beginning of the contract, and the revenue shall be measured according to the transaction priceapportioned to each single performance obligation.
2) The transaction price refers to the amount of consideration that the Company expects to collect as a result of the transfer of
goods or services to the client, excluding the amount collected by third parties. The transaction price recognized by the Company shallnot exceed the amount of the recognized accumulative revenue which is not likely to significantly turn back when relevant uncertaintyis eliminated. The expected amount to be returned to the client will be listed as a liability and not be included in the transaction price.
3) If there is significant financing in the contract, the Company shall determine the transaction price according to the amount
payable in cash when the client obtains control over the goods or services. The difference between the transaction price and the contractconsideration shall be amortized by the effective interest method during the contract period. On the contract commencement date, if theCompany estimates that the time between the client’s acquisition of control over goods or services and the payment of the price by theclient will not exceed one year, the significant financing in the contract shall not be considered.
Specific method for revenue recognition
1) Revenue recognized by time point
Selling electric appliances, fittings and materials by the Company is the performance obligation at a time point.
Revenue recognition conditions for goods made for domestic market: The Company has delivered the goods to the customeraccording to the contract terms and the customer has received the product; the payment has been collected or the receipt voucher hasbeen provided and relevant economic profits might flow into the Company; main risks and remuneration as for the ownership of thegoods have been transferred; and legal ownership and control right of the goods have been transferred.
Revenue recognition conditions for exported commodity: The Company has declared the product to the customs and the producthas been delivered according to the contract terms; the bill of lading has been obtained, the payment has been collected or the receiptvoucher has been provided and relevant economic profits might flow into the Company; main risks and remuneration as for theownership of the commodity have been transferred; and legal ownership and control right of the commodity have been transferred.
2) Revenue recognized by performance progress
The technical service revenue of the Company and the business contract between the operating lease and the customer are theperformance obligations to be performed within a period, for which the revenue shall be recognized according to the performanceprogress.
Differences in accounting policies for revenue recognition due to different operating models for the same type of business
40. Government grants
The government grants of the Company include fiscal appropriation. Government grants relating to assets refer to governmentgrants obtained by the Company for purchasing and acquiring long-term assets or forming long-term assets by other ways. Theincome-related government grants refer to those other than asset-related grants. In case the purpose of a grant is not expresslystipulated in the government document, the Company will categorize the grant according to these above principles. If it is difficultto categorize the grant, it will be categorized as the income-related government grant.
If a government grant is a monetary asset, it will be measured at the amount received; for the grant appropriated according to thefixed quota or for the grant where there is concrete evidence showing that the Company is qualified to receive governmental financialsupport and will be able to receive the support by the end of the accounting period, the grant will be measured at the receivable; if thegovernment grant is a non-monetary asset, it will be measured at the fair value, or measured at its nominal amount (RMB 1) if the fairvalue cannot be obtained reliably.
The government grants relating to assets are recognized as deferred income, and the government subsidies relating to assetsrecognized as deferred income are included into the current losses and profits according to the average distribution method withinrelevant asset service life.
If the relevant asset has been sold, transferred, retired or damaged before the end of the service life, the balance of the relevantdeferred income that has not been allocated will be transferred into the current profit and loss of asset disposal.
Government grants relating to income that compensate future costs, expenses or losses are recognized as deferred income, andrecognized in profit or loss in reporting the related costs, expenses or losses. The government grants relating to the ordinaryactivities are included in other income or deducted against relevant costs and expenses according to the nature of the accountingevent, otherwise, they are included in non-operating income. Government grants unrelated to daily activities will be included innon-operating income.
If the Company obtains the subsidized loan as a result of preferential financial policy, there will be two situations: the Ministry ofFinance appropriates the interest subsidy to the lending bank, or the Ministry of Finance directly appropriates the subsidy to theCompany, and the accounting treatment for each of these situations is as follows:
Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank provides the Company with the loan at adiscounted interest rate, the Company will use the actual amount of loan received as the book value of the loan, and calculate therelevant borrowing costs based on the principal of the loan and the interest rate.
Where the Ministry of Finance directly appropriate the interest subsidy to the Company, the Company will deduct thecorresponding interest subsidy against the borrowing costs. Where the governmental grants recognized by the Company need to bereturned, the accounting treatment will be done as follows in the period they are returned:
1) Where the book value of relevant assets is deducted at the time of the initial recognition, the book value of assets will be
adjusted.
2) Where there is any deferred income concerned, the book balance of the deferred income will be deducted, but the excessive part
will be included in the current profit or loss.
3) For other circumstances, the government grants will be directly included in the current profit or loss.
41. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities of the Company are calculated and recognized based on thedifferences (temporary differences) between the tax base and the book value of the assets or liabilities. For the deductible loss and taxcredits that can be deducted annually in the subsequent years according to tax laws, the corresponding deferred income tax assets arerecognized. Where the temporary differences arise from the initial recognition of goodwill, the corresponding deferred income taxliabilities are not recognized. No deferred tax asset or deferred tax liability is recognized where the temporary differences arising fromthe initial recognition of assets or liabilities in a transaction that is not a business combination affect neither accounting profit nortaxable profit (or deductible loss). On the balance sheet date, the deferred income tax asset and liability are measured at the applicabletax rates during the period when the asset is realized or the liability is settled as expected.
The Company recognizes the deferred income tax asset to the extent that it is probable that the taxable income will be availableagainst which the deductible temporary differences, deductible losses and tax credits can be deducted.
42. Lease
(1) Accounting method for operating lease
(1) Identification of lease
Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain period to obtain considerationcontracts. On the commencement date of the contract, the Company assesses whether the contract serves as the lease or includes thelease. If one party to the contract transfers the right to control one or more identified assets during a certain period in exchange forconsideration, such contract is or includes lease. To determine whether the contract has transferred the right to control the use of theidentified assets in a certain period of time, the Company assesses whether the customer in the contract is entitled to receive almost allthe economic benefits arising from the use of the identified assets during the use period and is entitled to manage the use of theidentified assets during the use period.
If a number of separate leases are contained in one contract, the Company will split the contract and adopt accounting methods toeach lease on an individual basis. If a contract includes both lease and non-lease components, the Company will separate the lease fromthe non-lease component before accounting treatment.
(2) The Company serves as the lessee
1) Lease recognition
At the commencement of the lease term, the right-of-use assets and lease liabilities shall be recognized for the lease by theCompany. For the recognition and measurement of right-to-use assets and lease liabilities, please refer to the items of "Right-to-useassets" and "Lease liabilities" in notes.
2) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond the terms of the original contract,including increasing or terminating the right to use one or more leased assets and extending or shortening the lease term stipulated in thecontract. The effective date of lease change refers to the date when the Parties reach the agreement on lease change.
When a change happens to the lease and meets the following conditions, the Company will treat it as a separate lease: ① the leasechange expands the lease scope or extends the lease term by increasing one or more use rights to the leased assets; ② the increasedconsideration is equivalent to the single price for the expanded portion of lease scope or extended portion of lease term adjustedaccording to the contract.
In case where accounting treatment is not made for lease change as a single lease, on the effective date of lease change, theCompany will appropriate the consideration of the changed contract according to the relevant provisions of the lease criteria andredefine the updated lease term. In addition, the Company will discount the changed lease payment according to the revised discountrate, so as to remeasure the lease liabilities. In calculating the present value of the lease payment after the change, the Company uses theinterest rate implicit in lease for the remaining lease term as the discount rate. if the interest rate implicit in lease for the remaining leaseterm cannot be determined, the incremental borrowing interest rate of the lessee on the effective date of lease change shall be used asthe discount rate by the Company. With regard to the impact of the above adjustment of lease liabilities, the Company adoptsaccounting methods in the following situations: ① In the event that the lease scope is narrowed down or the lease term is shortened as aresult of the lease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gains or losses from thepartial or complete termination of the lease shall be included into the current loss and profit. ② For the lease liabilities remeasured dueto other lease changes, the lessee shall adjust the book value of the right-of-use assets accordingly.
3)Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases at a low value when individual leasedassets are brand new, the Company chooses not to recognize the right-of-use assets and lease liabilities. Lease payments under short-term leases and leases of low-value assets are recognized by the Company on a straight-line basis or by other systematic and reasonablemethods over the lease term, and included in either the cost of the related asset or the current profit or loss.
(3) The Company serves as the lessor
On the basis that (1) the contract is assessed to be a lease or include a lease, the Company, as the lessor, divides the lease intofinancial lease and operating lease at the commencement of the lease.
A lease that transfers in substance almost all the risks and rewards incident to ownership of a leased asset is classified as a financiallease by the lessor. A lease other than the financial lease is an operating lease.
The Company usually classifies a lease as a financial lease if one or more of the following situations exist: ① the ownership of theleased asset is transferred to the lessee at the expiration of the lease term; ② the lessee has the right to choose to purchase the leasedasset; the established purchase price is expected to be much lower than the fair value of the leased asset at the time of the expected
exercise of the option, and hence it can be reasonably determined that the lessee will exercise this right of choice on the inception oflease; ③ the lease term accounts for a substantial proportion (no less than 75%) of the service life of the leased asset, notwithstandingthat the ownership of the asset will not be transferred; ④ on the inception of lease, the present value of the lease receipts is almost equalto the fair value of the leased asset (no less than 90% of the fair value of the leased asset); and ⑤ the leased assets are of a specializednature that only the lessee can use them without making major modifications. The Company may also classify a lease as a financial leaseif one or more of the following signs exist: ① if the lessee cancels the lease, the resulting loss to the lessor shall be borne by the lessee;
② the gain or loss arising from the fluctuation in the fair value of the residual value of the asset shall be attributable to the lessee; and
③ the lessee is able to continue the lease to the next period at a rent much lower than the market level.
(2) Accounting methods of financial lease
1) Accounting methods for financial lease
Initial measurement
On the commencement date of lease term, the Company recognizes financial lease receivables for financial lease and derecognizesfinancial lease assets. Upon initial measurement of financial lease receivables, the Company takes net investment in lease as entry valueof financial lease receivables.
Net investment in lease is the sum of unsecured residual value and the present value of outstanding lease receipts discounted oninterest rate implicit in lease on the commencement date of the lease term. Lease receipts refer to the amount that the lessor shall collectfrom the lessee for transferring the right to use the leased assets during the lease term, including: ① the amount of fixed payment andsubstantial fixed payment to be paid by the lessee, net of relevant amount of lease incentives if any; ② variable lease payments that arebased on an index or rate, which shall be determined at the time of initial measurement based on the index or rate on the commencementdate of the lease term; ③ exercise price of call option, given that the lessee will reasonably exercise such option; ④ amount payable bythe lessee for exercising the option to terminate the lease, if it is indicated during the lease term that the lessee will exercise the option toterminate the lease; ⑤ The residual value of the guarantee provided to the lessor by the lessee, a party related to the lessee and anindependent third party with the financial ability to meet the guarantee obligation.
Subsequent measurement
The Company calculates and recognizes the interest income in each period of the lease term according to the fixed periodic rate.Such periodic rate refers to the implicit discount rate used to determine the net investment in the lease (in case of sublease, the discountrate of the original lease is adopted if the interest rate implicit in lease of the sublease cannot be determined (adjusted according to theinitial direct cost related to sublease)), or the revised discount rate determined according to the relevant provisions when the change ofthe financial lease has not been treated as a separate lease for accounting and it is satisfied that the lease will be classified as thefinancial lease if the change takes effect at the beginning of the lease.
Accounting treatment of lease change
When a change happens to the financial lease and meets the following conditions, the Company will treat it as a separate lease: ①the change expands the lease scope by increasing one or more use rights to the leased assets; ② the increased consideration isequivalent to the single price for the expanded portion of lease scope adjusted according to the contract.
If such a change to the financial lease is not accounted for as a separate lease and the condition is satisfied that if the changebecomes effective on the commencement date of the lease, the lease is classified as an operating lease, the Company will account for itas a new lease from the effective date of the lease change and regard the net lease investment prior to the effective date of the leasechange as the book value of the leased asset.
2) Accounting methods for operating lease
Treatment of rent
The Company adopts the straight-line method/other systematic and reasonable methods to recognize the lease receipts fromoperating leases as rental income during all periods within the lease term.
Incentive measures provided
If a rent-free period is provided, total rent shall be amortized by adopting the straight-line method/other systematic and reasonablemethods within the lease term not excluding the rent-free period, and the rental income shall be recognized in the rent-free period.Certain costs incurred by the lessee, if undertaken by the Company, shall be excluded from total rental income and the balance of rentalincome after deducting these costs shall be amortized within the lease term.
Initial direct costs
The initial direct costs incurred by the Company related to the operating lease shall be capitalized to the cost of leased underlying
asset and shall be included in current profits and losses on the same basis as recognition of rental income during the lease term.
Depreciation
For fixed assets included in assets under operating leases, accrual depreciation shall base on the depreciation policy adopted by theCompany for similar assets. Other assets under operating leases shall be amortized in a systematic and reasonable manner.
Variable lease payments
Variable lease payments acquired by the Company in connection with operating leases that are not included in the lease receipts arerecognized in the current profits and losses when actually incurred. Change of operating lease
In case of changes in the operating lease, the Company will treat it as a new lease as of the effective date of the change, and thelease advance or receivables related to the lease before the change will be regarded as the amount received from the new lease.
43. Other significant accounting policies and accounting estimates
When preparing the financial statements, the management of the Company needs to use estimates and assumptions that will have animpact on the application of accounting policies and the amount of assets, liabilities, income and expenses. The actual situation may bedifferent from these estimates. The management of the Company continuously evaluates the key assumptions and uncertainties involvedin the estimates. The impact of a change in accounting estimates is recognized in the current and future periods of the change.
The following accounting estimates and key assumptions pose a risk of significant adjustment to the book value of assets andliabilities in future periods:
(1) Impairment of financial assets
The expected credit loss model is used to evaluate the impairment of financial instruments. The application of the expected creditloss model requires significant judgments and estimates, and all reasonable and well-founded information, including forward-lookinginformation, should be considered. When making such judgments and estimates, the Company deduces the expected changes in thedebtor's credit risk based on historical data combined with economic policies, macroeconomic indicators, industry risk, external marketenvironment, technical environment, changes in customer conditions and other factors.
(2) Provision for impairment of inventories
Basis for determining net realizable value of inventories: The net realizable value of merchandise inventories or held-for-salematerials are determined by their estimated selling price deducted by estimated selling expenses and related taxes. The net realizablevalue of inventories held for the execution of sales contracts or labor contracts is calculated on the basis of the contract price. If thequantity of inventories held by the Company is more than the quantity ordered in a sales contract, the net realizable value of the excessinventories is calculated on the basis of the general sales price.
Methods of provision for inventory depreciation: At the end of accounting period, inventory is valuated at cost or net realizablevalue, whichever is lower; at the end of accounting period, on the basis of a comprehensive inventory count, provision for inventorydepreciation reserves is made for the part of the cost uncollectible of inventory due to damage, fully or partially out of date or selling
price lower than the cost, etc.
If the factors affecting the write-down of inventory value in previous years have disappeared, the amount of write-down shall berestored, and reversed within the original provision for inventory depreciation, and the amount reversed shall be included in the currentprofits or losses.
(3) Accounting estimates for provision for impairment of goodwill
The Company conducts an impairment test on goodwill every year. The recoverable amount of the asset group and the asset groupcombination that include goodwill are the present values of their estimated future cash flows, the calculation of which requires the useof accounting estimates.
If the management revises the gross profit margin used in the future cash flow calculation of the asset group and the assetgroup combination and the revised gross profit margin is lower than the current one, the Company shall increase the provision forimpairment of goodwill.
If the management revises the pre-tax discount rate applied to the discounted cash flow, and the revised pre-tax discount rateis higher than the current one, the Company shall increase the provision for impairment of goodwill.
If the actual gross profit margin or pre-tax discount rate is higher or lower than the management's estimates, the Company cannotreverse the goodwill impairment loss originally accrued.
(4) Accounting estimates for provision for impairment of fixed assets
The Company conducts impairment tests on buildings, machinery and equipment and other fixed assets that show signs ofimpairment on the balance sheet date.
Recoverable amount of fixed assets
Accounting estimates shall be used for the calculation of the higher of the present value of its estimated future cash flows and thenet amount of the fair value of the assets minus the disposal expenses.
If the management revises the gross profit margin used in the future cash flow calculation of the asset group and the asset groupcombination, and the revised gross profit margin is lower than the current one, the Company shall increase the provision forimpairment of fixed assets.
If the management revises the pre-tax discount rate applied to the discounted cash flow, and the revised pre-tax discount rate ishigher than the current one, the Company shall increase the provision for impairment of fixed assets.
If the actual gross profit margin or pre-tax discount rate is higher or lower than the management estimates, the Company cannotreverse the original provision for impairment of fixed assets.
(5) Accounting estimates for the recognition of deferred income tax assets
The estimation of deferred income tax assets requires the estimates of taxable income and the applicable tax rate for each futureyear. The realization of deferred income tax assets depends on whether it is probable that sufficient taxable income will be available tothe Group in the future. Changes in future tax rates and the reversal time of temporary differences may also affect income tax expenses(income) and the balance of deferred income tax. Changes in the above estimates may lead to significant adjustments to deferredincome tax.
(6) Service life of fixed assets and intangible assets
The Company shall review the expected service life of fixed assets and intangible assets at least at the end of each year. Theexpected service life is determined by the management based on the historical experience of similar assets, referring to the estimatescommonly used in the same industry and in combination with expected technological updates. When there is a significant change inprevious estimates, depreciation expenses and amortization expenses for future periods are adjusted accordingly.
44. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
□Applicable √Not applicable
(2) Significant accounting estimate changes
□Applicable √Not applicable
45. Others
VI. Taxation
1. Main tax categories and tax rates
- 81 -
Category
| Category | Tax base | Tax rate |
| VAT | Income from sales of goods | 13% |
| VAT | Income from provision of technical services | 6% |
| VAT | Rental income | 5% |
| City maintenance and construction tax | Turnover tax payable | 7% |
| Education surcharge | Turnover tax payable | 3% |
| Local education surcharge | Turnover tax payable | 2% |
| House tax | 70% of the original value of the house | 1.2% |
| House tax | Rental income | 12% |
| Land use tax | Total land area | RMB 5-10/m2 |
| Corporate income tax | Taxable income | 15%, 25%, 20% |
Disclosure of taxpayers with different corporate income tax rates
| Name of taxpayer | Income tax rate |
| Hangzhou Robam Appliances Co., Ltd. | 15% |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 15% |
| Zhejiang Cookingfuture Technology Co., Ltd. | 25% |
| Beijing Robam Appliances Sales Co., Ltd. | 25% |
| Shanghai Robam Appliances Sales Co., Ltd. | 25% |
| Hangzhou MingQi Electric Co., Ltd. | 25% |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 25% |
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 20% |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | 20% |
2. Preferential tax policy
Preferential income tax policy
The Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR202033007142) jointly issued by ZhejiangProvincial Department of Science and Technology, Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, StateTaxation Administration, and Local Taxation Bureau of Zhejiang Province on December 1, 2020. The certificate is valid for 3 years.According to the relevant provisions, after being identified as a high-tech enterprise, the Company will enjoy the relevant preferentialpolicies of the state on high-tech enterprises for three consecutive years (i.e., the Company is entitled to the preferential corporateincome tax policy from January 1, 2020 to December 31, 2022), and the corporate income tax shall be levied at the rate of 15%.
The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. (hereinafter referred to as ShengzhouKinde), obtained the Certificate of High-tech Enterprise (Certificate No.: GR201933002261) jointly issued by Zhejiang ProvincialDepartment of Science and Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, StateTaxation Administration on December 4, 2019. After the recognition, it will enjoy the preferential tax policy of the state on high-techenterprises for three consecutive years (i.e., it is entitled to the preferential corporate income tax policy from January 1, 2019 to
December 31, 2021), and its corporate income tax shall be levied at the tax rate of 15%.
According to the Announcement ([2017] No. 24) of the State Taxation Administration: Notice of the State TaxationAdministration on Issues Related to the Implementation of Preferential Income Tax Policies for High-tech Enterprises, prior to passingthe next recognition, Shengzhou Kinde will temporarily prepay at a tax rate of 15% for corporate income tax in the year in which thequalification as a high-tech enterprise expires, i.e., 2022.
According to the Announcement ([2021] No. 8) of the State Taxation Administration, for Hangzhou Robam FuchuangInvestment Management Co., Ltd. and Hangzhou Jinhe Electric Appliances Co., Ltd., subsidiaries of the Company, the part of theannual taxable income of small low-profit enterprises not exceeding RMB 1 million shall be reduced to 12.5% to be levied at thetax rate of 20% for the corporate income tax.
Preferential VAT policy
According to the Notice of the Ministry of Finance and the State Taxation Administration on the Value-added Tax Policy forSoftware Products (CS [2011] No. 100), the Company's embedded software products are entitled to immediate VAT refund.
3. Others
VII. Notes to Items in the Consolidated Financial Statements
1. Cash and cash equivalents
In RMB
- 82 -
Item
| Item | Ending balance | Beginning balance |
| Cash in hand | 122,392.82 | 80,944.99 |
| Deposit in bank | 3,326,702,947.52 | 3,718,304,060.33 |
| Other cash and cash equivalents | 73,962,698.57 | 83,816,341.23 |
| Total | 3,400,788,038.91 | 3,802,201,346.55 |
Other descriptionNote: The other cash and cash equivalents at the end of the accounting period are RMB 73,962,698.57, including the banker’s L/Gmargin of RMB 57,695,282.91, and the bill acceptance margin of RMB 15,942,911.24, the use of which are both restricted, as well asthe Alipay balance of RMB 311,187.79 and WeChat balance of RMB 13,316.63, which are unrestricted funds to be withdrawn at anytime.Restricted cash and cash equivalents
| Item | Ending balance | Beginning balance |
| Banker’s L/G margin and bill acceptance margin | 73,638,194.15 | 82,212,526.20 |
| Total | 73,638,194.15 | 82,212,526.20 |
2. Financial assets held for trading
In RMB
| Item | Ending balance | Beginning balance |
| Financial assets measured at fair value through profit or loss | 2,884,760,000.00 | 2,872,312,500.00 |
| Including: | ||
| financial products | 2,884,760,000.00 | 2,872,312,500.00 |
| Including: |
- 83 -
Total
| Total | 2,884,760,000.00 | 2,872,312,500.00 |
3. Notes receivable
(1) Classified presentation of notes receivable
In RMB
| Item | Ending balance | Beginning balance |
| Banker’s acceptance | 900,887,049.22 | 862,581,158.56 |
| Trade acceptance | 407,159,767.07 | 467,612,736.26 |
| Total | 1,308,046,816.29 | 1,330,193,894.82 |
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Notes receivable with an individual bad debt provision | 108,894 ,455.48 | 7.83% | 63,437, 739.55 | 58.26% | 45,456, 715.93 | 269,463 ,729.35 | 17.09% | 224,066 ,803.50 | 83.15% | 45,396, 925.85 |
| Including: | ||||||||||
| Provision for bad debts by individual item | 108,894 ,455.48 | 7.83% | 63,437, 739.55 | 58.26% | 45,456, 715.93 | 269,463 ,729.35 | 17.09% | 224,066 ,803.50 | 83.15% | 45,396, 925.85 |
| Notes receivable with a collective bad debt provision | 1,281,6 27,103. 06 | 92.17% | 19,037, 002.70 | 1.49% | 1,262,5 90,100. 36 | 1,307,0 18,853. 73 | 82.91% | 22,221, 884.76 | 1.70% | 1,284,7 96,968. 97 |
| Including: | ||||||||||
Provision for bad debts by individual item:
In RMB
- 84 -
Name
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
| Unit 1 | 53,694,250.56 | 10,738,850.10 | 20.00% | Debt rollover |
| Unit 2 | 46,862,486.65 | 46,862,486.65 | 100.00% | Debt default |
| Unit 3 | 5,183,343.00 | 3,628,340.10 | 70.00% | Full recovery is expected to be difficult |
| Unit 4 | 995,659.17 | 696,961.42 | 70.00% | Full recovery is expected to be difficult |
| Unit 5 | 1,459,193.10 | 1,021,435.17 | 70.00% | Full recovery is expected to be difficult |
| Unit 6 | 455,562.75 | 318,893.93 | 70.00% | Full recovery is expected to be difficult |
| Unit 7 | 243,960.25 | 170,772.18 | 70.00% | Full recovery is expected to be difficult |
| Total | 108,894,455.48 | 63,437,739.55 | ||
Collective bad debt provision: Combination of bank acceptance
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Banker’s acceptances combined | 900,887,049.22 | 0.00 | |
| Total | 900,887,049.22 | 0.00 | |
Collective bad debt provision: Combination of trade acceptance
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Trade acceptances combined | 380,740,053.84 | 19,037,002.70 | 5.00% |
| Total | 380,740,053.84 | 19,037,002.70 | |
If the provision for bad debts of notes receivable is made according to the general model of expected credit loss, please refer to thedisclosure methods of other receivables to disclose the relevant information about the provision for bad debts:
□Applicable √ Not applicable
(2) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
Banker’sacceptance
| Banker’s acceptance | 900,887 ,049.22 | 64.79% | 900,887 ,049.22 | 862,581 ,158.56 | 54.72% | 862,581 ,158.56 | ||||
| Trade acceptance | 380,740 ,053.84 | 27.38% | 19,037, 002.70 | 5.00% | 361,703 ,051.14 | 444,437 ,695.17 | 28.19% | 22,221, 884.76 | 5.00% | 422,215 ,810.41 |
| Total | 1,390,5 21,558. 54 | 100.00% | 82,474, 742.25 | 5.93% | 1,308,0 46,816. 29 | 1,576,4 82,583. 08 | 100.00% | 246,288 ,688.26 | 15.62% | 1,330,1 93,894. 82 |
- 85 -Trade acceptance
| Trade acceptance | 246,288,688. 26 | - 155,207,942. 32 | 8,606,003.69 | 82,474,742.2 5 | ||
| Total | 246,288,688. 26 | - 155,207,942. 32 | 8,606,003.69 | 82,474,742.2 5 |
Significant recoveries or reversals of provisions for bad debts during the reporting period:
□Applicable √Not applicable
(3) Notes receivable that has been endorsed or discounted by the Company and not due on the balance
sheet date at the end of the period
In RMB
| Item | Ending amount derecognized | Ending amount not derecognized |
| Trade acceptance | 0.00 | 2,651,069.04 |
| Total | 0.00 | 2,651,069.04 |
(4) Notes transferred to accounts receivable by the Company due to drawer’s non-performance at the end of
the period
In RMB
| Item | Amount of accounts receivable transferred at the end of the period |
| Trade acceptance | 193,510,242.90 |
| Total | 193,510,242.90 |
5. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 793,829 ,431.62 | 32.42% | 706,359 ,418.12 | 88.98% | 87,470, 013.50 | 630,075 ,052.06 | 28.04% | 553,584 ,090.07 | 87.86% | 76,490, 961.99 |
| Including: | ||||||||||
| Provision for bad debts by individual item | 793,829 ,431.62 | 32.42% | 706,359 ,418.12 | 88.98% | 87,470, 013.50 | 630,075 ,052.06 | 28.04% | 553,584 ,090.07 | 87.86% | 76,490, 961.99 |
| Accounts receivable with a collective bad debt provision | 1,655,0 79,442. 40 | 67.58% | 102,189 ,001.34 | 6.17% | 1,552,8 90,441. 06 | 1,617,3 47,143. 15 | 71.96% | 96,145, 244.24 | 5.94% | 1,521,2 01,898. 91 |
| Including: | ||||||||||
- 86 -
Multipleaccountsreceivablewhich aregrouped byexpectedcredit lossbased ontheir agecharacteristics andwith acollectivebad debtprovision
| Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision | 1,655,079,442.40 | 67.58% | 102,189,001.34 | 6.17% | 1,552,890,441.06 | 1,617,347,143.15 | 71.96% | 96,145, 244,24 | 5.94% | 1,521,201,898.91 |
| Total | 2,448,9 08,874. 02 | 100.00% | 808,548 ,419.46 | 33.02% | 1,640,3 60,454. 56 | 2,247,4 22,195. 21 | 100.00% | 649,729 ,334.31 | 28.91% | 1,597,6 92,860. 90 |
Provision for bad debts by individual item: Provision for bad debts of receivables by individual item
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
| Unit 1 | 613,202,711.42 | 613,202,711.42 | 100.00 | Debt default |
| Unit 2 | 68,795,196.31 | 13,759,039.26 | 20.00 | Debt rollover |
| Unit 3 | 27,760,507.34 | 19,432,355.14 | 70.00% | Full recovery is expected to be difficult |
| Unit 4 | 20,766,804.51 | 14,536,763.16 | 70.00% | Full recovery is expected to be difficult |
| Unit 5 | 19,980,052.93 | 13,986,037.05 | 70.00% | Full recovery is expected to be difficult |
| Unit 6 | 14,247,715.67 | 9,973,400.97 | 70.00% | Full recovery is expected to be difficult |
| Unit 7 | 9,243,574.60 | 6,470,502.22 | 70.00% | Full recovery is expected to be difficult |
| Unit 8 | 8,070,171.98 | 5,649,120.39 | 70.00% | Full recovery is expected to be difficult |
| Unit 9 | 3,654,431.88 | 2,558,102.32 | 70.00% | Full recovery is expected to be difficult |
| Unit 10 | 2,887,210.93 | 2,021,047.65 | 70.00% | Full recovery is expected to be difficult |
| Unit 11 | 1,773,645.05 | 1,773,645.05 | 100.00% | Debt default |
| Unit 12 | 3,447,409.00 | 2,996,693.49 | 86.93% | Expected to be exposed to recovery risk |
| Total | 793,829,431.62 | 706,359,418.12 | ||
Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics,their bad debts are provided for collectively.
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Within 1 year | 1,372,778,421.26 | 68,638,921.06 | 5.00% |
| 1-2 years | 261,066,239.87 | 26,106,623.99 | 10.00% |
| 2-3 years | 14,024,540.13 | 2,804,908.03 | 20.00% |
| 3-4 years | 4,816,068.57 | 2,408,034.30 | 50.00% |
| 4-5 years | 818,293.02 | 654,634.41 | 80.00% |
| More than 5 years | 1,575,879.55 | 1,575,879.55 | 100.00% |
| Total | 1,655,079,442.40 | 102,189,001.34 | |
If the bad debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the
disclosure methods of other receivables to disclose the relevant information about the provision for bad debts:
□Applicable √Not applicable
Disclosed based on the aging of receivables
In RMB
(2) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
- 87 -
Type
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt provision for accounts receivable | 649,729,334.31 | 185,461,367.93 | 26,642,282.78 | 808,548,419.46 | ||
| Total | 649,729,334.31 | 185,461,367.93 | 26,642,282.78 | 808,548,419.46 | ||
(3) Top five debtors with the biggest ending balances of receivables
In RMB
| Unit | Ending balance of accounts receivable | Proportion in the total ending balance of accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | 614,703,488.15 | 25.10% | 37,386,355.40 |
| Unit 2 | 422,007,941.34 | 17.23% | 422,007,941.34 |
| Unit 3 | 95,125,955.20 | 3.88% | 95,125,955.20 |
| Unit 4 | 68,013,931.65 | 2.78% | 3,400,696.58 |
| Unit 5 | 55,059,796.18 | 2.25% | 2,752,989.81 |
| Total | 1,254,911,112.52 | 51.24% |
7. Advance payments
(1) Advance payments presented by aging
In RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
Aging
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,585,366,431.89 |
| Within 1 year (including 1 year) | 1,585,366,431.89 |
| 1-2 years | 686,217,532.78 |
| 2-3 years | 165,746,625.01 |
| More than 3 years | 11,578,284.34 |
| 3-4 years | 7,090,417.37 |
| 4-5 years | 966,963.42 |
| More than 5 years | 3,520,903.55 |
| Total | 2,448,908,874.02 |
- 88 -Within 1 year
| Within 1 year | 184,421,637.20 | 98.78% | 129,823,235.88 | 98.98% |
| 1-2 years | 2,143,102.72 | 1.15% | 1,308,725.59 | 1.00% |
| 2-3 years | 56,337.70 | 0.03% | 30,069.48 | 0.02% |
| More than 3 years | 74,945.85 | 0.04% | ||
| Total | 186,696,023.47 | 131,162,030.95 |
8. Other receivables
In RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 105,383,151.12 | 73,487,381.46 |
| Total | 105,383,151.12 | 73,487,381.46 |
(1) Other receivables
1) Classification of other receivables by nature
In RMB
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Security/guarantee deposits | 37,642,042.10 | 48,646,642.67 |
| Collections by a third party | 61,097,321.97 | 39,389,486.99 |
| Cash reserve | 12,223,382.79 | 2,785,329.49 |
| Withholdings | 6,919,436.49 | 3,224,265.49 |
| Others | 4,087,739.14 | 57,881.26 |
| Total | 121,969,922.49 | 94,103,605.90 |
2) Bad debt provision
In RMB
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
| Balance on January 1, 2022 | 20,616,224.44 | 20,616,224.44 | ||
| Balance on January 1, 2022 in the current period | ||||
| Provision in the current period | -4,029,453.07 | -4,029,453.07 | ||
| Balance on June 30, 2022 | 16,586,771.37 | 16,586,771.37 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable √ Not applicable
Disclosed based on the aging of receivables
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 98,365,217.59 |
| Within 1 year (including 1 year) | 98,365,217.59 |
- 89 -
1-2 years
| 1-2 years | 8,072,690.63 |
| 2-3 years | 2,812,051.27 |
| More than 3 years | 12,719,963.00 |
| 3-4 years | 4,201,000.60 |
| 4-5 years | 1,729,913.50 |
| More than 5 years | 6,789,048.90 |
| Total | 121,969,922.49 |
3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
4) Top five debtors with the biggest ending balances of other receivables
In RMB
| Unit | Nature of receivable | Ending balance | Aging | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Unit 1 | Collections by a third party | 27,716,044.47 | Within 1 year | 22.72 | 1,385,802.22 |
| Unit 2 | Withholdings | 5,416,389.09 | Within 1 year | 4.44 | 270,819.45 |
| Unit 3 | Security/guarantee deposits | 4,928,000.00 | More than 5 years | 4.04 | 4,928,000.00 |
| Unit 4 | Security/guarantee deposits | 1,660,000.00 | Within 1 year | 1.36 | 83,000.00 |
| Unit 5 | Security/guarantee deposits | 1,175,000.00 | 0-4 years | 0.96 | 292,623.25 |
| Total | 40,895,433.56 | 33.53 | 6,960,244.92 |
9. Inventory
(1) Classification of inventories
In RMB
| Ending balance | Beginning balance |
Type
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt reserve for other receivables | 20,616,224.44 | -4,029,453.07 | 16,586,771.37 | |||
| Total | 20,616,224.44 | -4,029,453.07 | 16,586,771.37 | |||
- 90 -
Item
| Item | Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value |
| Raw materials | 134,841,725.92 | 134,841,725.92 | 161,795,174.65 | 161,795,174.65 | ||
| Products in process | 109,408,799.37 | 109,408,799.37 | 116,573,107.77 | 116,573,107.77 | ||
| Merchandise inventory | 548,931,655.53 | 19,005,263.10 | 529,926,392.43 | 529,957,331.64 | 28,819,579.6 0 | 501,137,752.04 |
| Contract performance costs | 47,737,003.06 | 47,737,003.06 | 48,844,764.12 | 48,844,764.12 | ||
| Goods shipped in transit | 1,011,705,771.92 | 36,978,330.88 | 974,727,441.04 | 971,605,585.98 | 51,220,027.9 8 | 920,385,558.00 |
| Low-cost consumables and packing materials | 28,447,019.21 | 28,447,019.21 | 23,495,275.67 | 23,495,275.67 | ||
| Total | 1,881,071,975.01 | 55,983,593.98 | 1,825,088,381.0 3 | 1,852,271,239. 83 | 80,039,607.5 8 | 1,772,231,632.2 5 |
(2) Provision for obsolete inventory or for impairment of the contract performance costs
In RMB
| Item | Beginning balance | Increased amount in the current period | Decreased amount in the current period | Ending balance | ||
| Provision | Others | Reversals or write-off | Others | |||
| Merchandise inventory | 28,819,579.60 | -9,814,316.50 | 19,005,263.10 | |||
| Goods shipped in transit | 51,220,027.98 | -14,241,697.10 | 36,978,330.88 | |||
| Total | 80,039,607.58 | -24,056,013.60 | 55,983,593.98 | |||
(3) Explanation that the ending balance of inventory includes the amount of capitalized borrowing costs
(4) Explanation on amortization amount of contract performance costs in current period
10. Other current assets
In RMB
| Item | Ending balance | Beginning balance |
| Input tax to be deducted | 105,891.12 | 3,442,185.74 |
| Prepaid tax | 668,243.42 | |
| Total | 105,891.12 | 4,110,429.16 |
11. Long-term equity investment
In RMB
- 91 -Investee
| Investee | Beginning balance (book value) | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive income | Other changes in equity | Cash dividends or profits declare d and distributed | Provision for impairment | Others | ||||
| I. Joint venture | |||||||||||
| De Dietrich Trade (Shanghai) Co., Ltd. | 3,661, 700.03 | - 2,538, 958.01 | 1,122, 742.02 | ||||||||
| Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. | 4,140, 000.00 | 4,140, 000.00 | |||||||||
| Subtotal | 3,661, 700.03 | 4,140, 000.00 | - 2,538, 958.01 | 5,262, 742.02 | |||||||
| II. Associated companies | |||||||||||
| Zhejiang Tingshuo Brand Operation and Management Co., Ltd. | 1,743, 429.88 | - 408,92 9.31 | 1,334, 500.57 | ||||||||
| Subtotal | 1,743, 429.88 | - 408,92 9.31 | 1,334, 500.57 | ||||||||
| Total | 5,405, 129.91 | 4,140, 000.00 | - 2,947, 887.32 | 6,597, 242.59 | |||||||
12. Other equity instrument investments
In RMB
- 92 -
Item
| Item | Ending balance | Beginning balance |
| Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | 2,116,023.22 |
| Total | 2,116,023.22 | 2,116,023.22 |
Disclosure of non-tradable equity instrument investment by item in the current period
In RMB
| Item | Recognized dividends income | Accumulated gains | Accumulated losses | Amount transferred from other comprehensive incomes to retained earnings | Reason for being designated to be measured by fair value and the change being recorded in other comprehensive income | Reason for the transfer of other comprehensive incomes to retained earnings |
| Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | 100,000,000.00 | Held not for the purpose of trading | ||||
| Shanghai MXCHIP Information Technology Co., Ltd. | 17,832,510.78 | Held not for the purpose of trading |
13. Investment real estate
(1) Investment real estate under the cost measurement mode
√Applicable □Not applicable
In RMB
| Item | Buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 11,676,710.68 | 11,676,710.68 |
| 2. Increased amount in the current period | ||
| 3. Decreased amount in the current period | 6,992,399.10 | 6,992,399.10 |
| (1) Other transfer-out | 6,992,399.10 | 6,992,399.10 |
| 4. Ending balance | 4,684,311.58 | 4,684,311.58 |
| II. Accumulated depreciation and amortization | ||
| 1. Beginning balance | 590,814.61 | 590,814.61 |
| 2. Increased amount in the current period | 111,252.36 | 111,252.36 |
| (1) Accrual or amortization | 111,252.36 | 111,252.36 |
| 3. Decreased amount in the current period | 304,460.75 | 304,460.75 |
| (1) Other transfer-out | 304,460.75 | 304,460.75 |
| 4. Ending balance | 397,606.22 | 397,606.22 |
| III. Impairment provision | 0 | 0 |
| IV. Book value | ||
| 1. Ending book value | 4,286,705.36 | 4,286,705.36 |
| 2. Beginning book value | 11,085,896.07 | 11,085,896.07 |
14. Fixed assets
In RMB
(1) Fixed assets
In RMB
- 93 -
Item
| Item | Houses and buildings | Machine and equipment | Transportation equipment | Other equipment | Total |
| I. Original book value: | |||||
| 1. Beginning balance | 1,072,125,559.85 | 679,169,886.72 | 21,794,424.31 | 84,018,707.52 | 1,857,108,578.40 |
| 2. Increased amount in the current period | 13,472,162.01 | 32,996,332.65 | 785,486.72 | 3,091,735.94 | 50,345,717.32 |
| (1) Purchase | 6,479,762.91 | 8,987,725.72 | 2,551,982.50 | 18,019,471.13 | |
| (2) Construction in process transfer-in | 24,008,606.93 | 785,486.72 | 539,753.44 | 25,333,847.09 | |
| (3) Other increases | 6,992,399.10 | 6,992,399.10 | |||
| 3. Decreased amount in the current period | 3,431,788.07 | 293,110.00 | 981,072.86 | 4,705,970.93 | |
| (1) Disposal or retirement waste | 3,431,788.07 | 293,110.00 | 981,072.86 | 4,705,970.93 | |
| 4. Ending balance | 1,085,597,721.86 | 708,734,431.30 | 22,286,801.03 | 86,129,370.60 | 1,902,748,324.79 |
| II. Accumulated depreciation | |||||
| 1. Beginning balance | 267,528,198.84 | 341,157,676.17 | 12,747,836.37 | 56,368,847.01 | 677,802,558.39 |
| 2. Increased amount in the current period | 26,013,144.29 | 28,293,360.58 | 1,192,980.00 | 4,828,661.11 | 60,328,145.98 |
| (1) Provision | 25,708,683.54 | 28,293,360.58 | 1,192,980.00 | 4,828,661.11 | 60,023,685.23 |
| (2) Other increases | 304,460.75 | 304,460.75 | |||
| 3. Decreased amount in the current period | 2,584,243.83 | 278,454.50 | 908,571.94 | 3,771,270.27 | |
| (1) Disposal or retirement | 2,584,243.83 | 278,454.50 | 908,571.94 | 3,771,270.27 | |
| 4. Ending balance | 293,541,343.13 | 366,866,792.92 | 13,662,361.87 | 60,288,936.18 | 734,359,434.10 |
| III. Impairment provision | |||||
| IV. Book value | |||||
| 1. Ending book value | 792,056,378.73 | 341,867,638.38 | 8,624,439.16 | 25,840,434.42 | 1,168,388,890.69 |
| 2. Beginning book value | 804,597,361.01 | 338,012,210.55 | 9,046,587.94 | 27,649,860.51 | 1,179,306,020.01 |
(2) Fixed assets without property right certificate
In RMB
| Item | Book value | Reasons for failure to obtain the property right certificate |
| Houses and buildings | 419,931,359.46 | The formalities for the newly built plant are in progress |
Item
| Item | Ending balance | Beginning balance |
| Fixed assets | 1,168,388,890.69 | 1,179,306,020.01 |
| Total | 1,168,388,890.69 | 1,179,306,020.01 |
15. Construction in process
In RMB
- 94 -
Item
| Item | Ending balance | Beginning balance |
| Construction in process | 699,981,173.60 | 454,643,364.82 |
| Total | 699,981,173.60 | 454,643,364.82 |
(1) Construction in progress
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Construction of Maoshan Intelligent Manufacturing Base infrastructure | 331,252,892.16 | 331,252,892.16 | 194,423,004.31 | 194,423,004.31 | ||
| Shengzhou Chengnan project | 209,171,419.72 | 209,171,419.72 | 174,099,821.16 | 174,099,821.16 | ||
| Robam Mansion project | 109,722,514.61 | 109,722,514.61 | 59,931,795.23 | 59,931,795.23 | ||
| Project of the First Production Department | 10,336,283.17 | 10,336,283.17 | ||||
| Integrated Range Hood Project | 3,256,637.20 | 3,256,637.20 | 3,256,637.20 | 3,256,637.20 | ||
| Customized management software | 2,110,176.00 | 2,110,176.00 | 3,223,516.47 | 3,223,516.47 | ||
| Project of the Third Production Department | 135,398.24 | 135,398.24 | 2,779,911.26 | 2,779,911.26 | ||
| Project of the Second Production Department | 424,778.76 | 424,778.76 | 1,185,840.80 | 1,185,840.80 | ||
| Project of the Fourth Production Department | 42,352,732.41 | 42,352,732.41 | ||||
| Other smaller projects | 1,554,624.50 | 1,554,624.50 | 5,406,555.22 | 5,406,555.22 | ||
| Total | 699,981,173.60 | 699,981,173.60 | 454,643,364.82 | 454,643,364.82 | ||
(2) Current changes in major projects under construction
In RMB
- 95 -
Nameof item
| Name of item | Budget | Beginning balance | Increased amount in the current period | Amount transferred into fixed assets in the current period | Other decreases in the current period | Ending balance | Proportion of accumulated project investment in the budget (%) | Project progress | Accumulated amount of interest capitalization | Including: Amount of capitalized interest in the current period | Interest capitalization rate in the current period | Funding source |
| Construction of Maoshan Intelligent Manufacturing Base infrastructure | 899,28 0,000. 00 | 194,42 3,004. 31 | 136,82 9,887. 85 | 331,25 2,892. 16 | 83.55% | 83.55% | Others | |||||
| Shengzhou Chengnan project | 240,960,000.00 | 174,099,821.16 | 35,071,598.56 | 209,171,419.72 | 86.81% | 86.81% | Others | |||||
| Robam Mansion Project | 708,250,000.00 | 59,931,795.23 | 49,790,719.38 | 109,722,514.61 | 15.49% | 15.49% | Others | |||||
| Total | 1,848,490,000,00 | 428,454,620.70 | 221,692,205.79 | 650,146,826.49 | ||||||||
16. Right-of-use assets
In RMB
| Item | Houses and buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 35,620,757.32 | 35,620,757.32 |
| 2. Increased amount in the current period |
- 96 -
3. Decreased amount in the current
period
| 3. Decreased amount in the current period | 5,542,402.33 | 5,542,402.33 |
| (1) Disposal | 5,542,402.33 | 5,542,402.33 |
| 4. Ending balance | 30,078,354.99 | 30,078,354.99 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 5,717,803.10 | 5,717,803.10 |
| 2. Increased amount in the current period | 2,735,187.20 | 2,735,187.20 |
| (1) Provision | 2,735,187.20 | 2,735,187.20 |
| 3. Decreased amount in the current period | 395,885.92 | 395,885.92 |
| (1) Disposal | 395,885.92 | 395,885.92 |
| 4. Ending balance | 8,057,104.38 | 8,057,104.38 |
| III. Impairment provision | ||
| IV. Book value | ||
| 1. Ending book value | 22,021,250.61 | 22,021,250.61 |
| 2. Beginning book value | 29,902,954.22 | 29,902,954.22 |
17. Intangible assets
(1) Intangible assets
In RMB
| Item | Land use right | Software | Trademark | Patents | Total |
| I. Original book value | |||||
| 1. Beginning balance | 225,656,679.95 | 59,863,685.75 | 24,624,622.64 | 7,300,000.00 | 317,444,988.34 |
| 2. Increased amount in the current period | 3,168,141.60 | 3,168,141.60 | |||
| (1) Purchase | 3,168,141.60 | 3,168,141.60 | |||
| 3. Decreased amount in the current period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 225,656,679.95 | 63,031,827.35 | 24,624,622.64 | 7,300,000.00 | 320,613,129.94 |
| II. Accumulated amortization | |||||
| 1. Beginning balance | 30,136,519.99 | 45,379,740.27 | 8,606,155.60 | 3,930,769.22 | 88,053,185.08 |
| 2. Increased amount in the current period | 2,296,326.15 | 2,698,627.78 | 1,231,231.12 | 561,538.47 | 6,787,723.52 |
| (1) Provision | 2,296,326.15 | 2,698,627.78 | 1,231,231.12 | 561,538.47 | 6,787,723.52 |
| 3. Decreased amount in the current period | |||||
| 4. Ending balance | 32,432,846.14 | 48,078,368.05 | 9,837,386.72 | 4,492,307.69 | 94,840,908.60 |
| III. Impairment provision | |||||
| IV. Book value | |||||
| 1. Ending book value | 193,223,833.81 | 14,953,459.30 | 14,787,235.92 | 2,807,692.31 | 225,772,221.34 |
| 2. Beginning book value | 195,520,159.96 | 14,483,945.48 | 16,018,467.04 | 3,369,230.78 | 229,391,803.26 |
18. Goodwill
(1) Original book value of goodwill
In RMB
- 97 -
Name of investee or item that generates
goodwill
| Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Generated by business combination | Disposal | |||||
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 80,589,565.84 | 80,589,565.84 | ||||
| Total | 80,589,565.84 | 80,589,565.84 | ||||
Information about the asset group or combination of asset groups to which goodwill belongsThe Company recognizes Shengzhou Kinde as an asset group. Goodwill at the end of this period is in the same asset group asrecognized upon goodwill impairment test at the date of purchase and in previous year.Procedures and parameters of goodwill impairment test and methods to recognize goodwill impairment lossThe Company appoints Zhonghe Appraisal Co., Ltd. (Zhonghe Appraisal) to evaluate the Shengzhou Kinde assets group, so as todetermine if there is goodwill impairment. According to the Appraisal Report (ZHZBZ (2022) No. BJU3002,002) for the purposeof goodwill impairment test issued by Zhonghe Appraisal, Zhonghe Appraisal has determined according to the five-year cash flowestimate approved by the management, reckoned the cash flow after the five-year forecast period using certain long-term averagegrowth rate, calculated using the present value model of future cash flow, and, under the going-concern assumption, madegoodwill impairment test with the higher of the net value of assets’ fair value minus disposal expenses and the present value ofestimated assets’ future cash flow. As tested, the recoverable amount of Shengzhou Kinde assets group is higher than the bookvalue of the assets group containing goodwill. No sign of goodwill impairment is found.
19. Long-term unamortized expenses
In RMB
| Item | Beginning balance | Increased amount in the current period | Amount of amortization in the current period | Other decreases | Ending balance |
| Service fee | 918,029.08 | 473,907.27 | 489,297.54 | 902,638.81 | |
| Consulting fee | 171,200.15 | 37,667.36 | 133,532.79 | ||
| Brand endorsement cost | 1,572,876.21 | 184,204.47 | 791,648.15 | 965,432.53 | |
| Office decoration expenses | 2,693,191.62 | 1,120,603.43 | 1,572,588.19 | ||
| Environmental protection costs | 30,139.14 | 14,945.71 | 15,193.43 | ||
| Total | 5,385,436.20 | 658,111.74 | 2,454,162.19 | 3,589,385.75 |
20. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Credit impairment provision | 907,609,933.08 | 137,464,760.94 | 917,479,025.92 | 138,811,114.82 |
| Deferred income tax assets before offset recognized based on the provisional estimated expenses | 1,064,974,915.35 | 159,746,237.30 | 656,596,891.65 | 98,489,533.76 |
- 98 -
Change of the fairvalue of other equityinstrumentinvestments
| Change of the fair value of other equity instrument investments | 117,832,510.78 | 17,674,876.62 | 117,832,510.78 | 17,674,876.62 |
| Deferred income tax assets before offset recognized based on the deferred income | 95,786,247.96 | 14,367,937.19 | 102,890,393.42 | 15,433,559.00 |
| Asset impairment provision | 55,983,593.98 | 8,397,539.10 | 80,039,607.58 | 12,005,941.14 |
| Accrued and unpaid salaries | 9,848,248.72 | 1,477,237.31 | ||
| Unrealized profits of internal transactions | 6,392,315.82 | 1,597,686.80 | 6,550,213.16 | 1,637,825.81 |
| Deferred income tax assets before offset recognized due to equity incentive | 7,117,131.75 | 1,098,553.20 | 3,118,765.48 | 480,458.47 |
| Unrecognized financial expenses | 1,707,409.13 | 426,852.28 | 1,349,960.44 | 337,490.11 |
| Total | 2,257,404,057.85 | 340,774,443.43 | 1,895,705,617.15 | 286,348,037.04 |
(2) Deferred income tax liabilities before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Asset appraisal appreciation arising from business combination where the acquired company is not controlled by the same party after the combination | 23,538,118.33 | 3,530,717.75 | 25,908,559.83 | 3,886,283.97 |
| Temporary taxable difference incurred from pre-tax deduction of fixed assets | 30,203,466.60 | 4,530,519.99 | 15,789,858.60 | 2,368,478.79 |
| Total | 53,741,584.93 | 8,061,237.74 | 41,698,418.43 | 6,254,762.76 |
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
| Item | Amount of deferred income tax assets offset against deferred income tax liabilities at the end of the period | Ending balance of deferred income tax assets or liabilities after offset | Initial amount of deferred income tax assets offset against deferred income tax liabilities | Beginning balance of deferred income tax assets or liabilities after offset |
| Deferred income tax assets | 340,774,443.43 | 286,348,037.04 |
- 99 -Deferred income taxliabilities
| Deferred income tax liabilities | 8,061,237.74 | 6,254,762.76 |
(4) Presentation of unrecognized deferred income tax assets
In RMB
| Item | Ending balance | Beginning balance |
| Deductible tax losses | 21,721,067.74 | 18,037,908.58 |
| Total | 21,721,067.74 | 18,037,908.58 |
(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years
In RMB
| Year | Ending amount | Beginning amount | Remarks |
| 2022 | 39,552.31 | 39,552.31 | |
| 2023 | 6,714.34 | 6,714.34 | |
| 2024 | 5,602.28 | 5,602.28 | |
| 2025 | 9,556,499.12 | 9,556,499.12 | |
| 2026 | 8,429,540.53 | 8,429,540.53 | |
| 2027 | 3,683,159.16 | ||
| Total | 21,721,067.74 | 18,037,908.58 |
21. Other non-current assets
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepayments for equipment purchase | 51,019,955.27 | 51,019,955.27 | 33,649,858.27 | 33,649,858.27 | ||
| Prepayments for house purchase | 25,657,321.55 | 25,657,321.55 | 3,129,005.00 | 3,129,005.00 | ||
| Prepayments for construction | 941,811.17 | 941,811.17 | 1,690,011.17 | 1,690,011.17 | ||
| Total | 77,619,087.99 | 77,619,087.99 | 38,468,874.44 | 38,468,874.44 | ||
22. Short-term borrowings
(I) Classification of short-term borrowings
In RMB
| Item | Ending balance | Beginning balance |
| Credit borrowings | 39,657,061.74 | 29,616,655.41 |
| Total | 39,657,061.74 | 29,616,655.41 |
Description on the classification of short-term borrowings:
Note: This represents the Company's failure to derecognize the bank receivables with recourse factoring of RMB 26,157,061.74 andbank credit loans of RMB 13,500,000.00.
23. Notes payable
In RMB
| Type | Ending balance | Beginning balance |
| Banker’s acceptance | 809,469,587.67 | 962,665,463.99 |
| Total | 809,469,587.67 | 962,665,463.99 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 100-
The total amount of notes payable that were due and unpaid at the end of this period was RMB 0.00.
24. Accounts payable
In RMB
- 100-
Item
| Item | Ending balance | Beginning balance |
| Payment for materials | 999,839,708.25 | 1,087,160,715.37 |
| Payment for expenses | 1,081,853,053.58 | 923,334,216.09 |
| Payment for construction | 197,017,080.54 | 152,898,742.07 |
| Payment for equipment | 24,492,976.97 | 18,506,587.47 |
| Total | 2,303,202,819.34 | 2,181,900,261.00 |
Note: As of June 30, 2022, the important accounts payable with an age of more than one year totaled RMB 13,390,151.23, mainlyinvolving the outstanding payment for expenses.
25. Contract liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Advances on sales | 979,436,556.29 | 1,026,782,402.35 |
| Total | 979,436,556.29 | 1,026,782,402.35 |
26. Employee remuneration payable
(1) Presentation of employee remuneration payable
In RMB
(2) Presentation of short-term remuneration
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Salaries, bonuses, subsidies and allowances | 155,146,075.83 | 306,920,793.36 | 412,651,592.31 | 49,415,276.88 |
| 2. Employee welfare | 80.00 | 11,590,637.58 | 11,590,717.58 | |
| 3. Social insurance | 3,769,101.65 | 20,070,961.00 | 22,645,067.06 | 1,194,995.59 |
| Including: Medical insurance | 3,619,348.25 | 19,523,501.39 | 21,980,169.99 | 1,162,679.65 |
| Occupational injury insurance | 149,753.40 | 547,459.61 | 664,897.07 | 32,315.94 |
| 4. Housing funds | 374,934.40 | 16,595,977.25 | 16,754,372.65 | 216,539.00 |
Item
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| I. Short-term remuneration | 159,707,932.44 | 362,682,903.25 | 471,190,482.93 | 51,200,352.76 |
| II. Post-employment benefits defined contribution plan | 5,469,492.64 | 30,869,390.02 | 34,637,886.83 | 1,700,995.83 |
| III. Termination benefits | 1,209,255.99 | 827,762.14 | 381,493.85 | |
| Total | 165,177,425.08 | 394,761,549.26 | 506,656,131.90 | 53,282,842.44 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 101-
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5. Labor union and
staff educationexpenses
| 5. Labor union and staff education expenses | 417,740.56 | 7,504,534.06 | 7,548,733.33 | 373,541.29 |
| Total | 159,707,932.44 | 362,682,903.25 | 471,190,482.93 | 51,200,352.76 |
(3) Presentation of the defined contribution plans
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Basic pensions | 5,282,063.72 | 29,889,193.15 | 33,527,153.25 | 1,644,103.62 |
| 2. Unemployment insurance | 187,428.92 | 980,196.87 | 1,110,733.58 | 56,892.21 |
| Total | 5,469,492.64 | 30,869,390.02 | 34,637,886.83 | 1,700,995.83 |
27. Taxes payable
In RMB
| Item | Ending balance | Beginning balance |
| Corporate income tax | 124,049,884.68 | 137,979,203.70 |
| VAT | 87,399,323.21 | 53,911,099.54 |
| City maintenance and construction tax | 6,159,411.70 | 2,141,479.84 |
| Individual income tax | 1,120,602.89 | 3,868,615.91 |
| Education surcharge | 2,639,747.85 | 1,657,978.22 |
| Local education surcharge | 1,759,832.01 | 1,105,318.89 |
| Stamp tax | 409,582.18 | 600,407.34 |
| Land use tax | 4,382,947.50 | |
| House tax | 6,492,438.07 | 6,555,342.60 |
| Total | 230,030,822.59 | 212,202,393.54 |
28. Other payables
In RMB
(1) Other payables
1) Other payables presented by nature
In RMB
| Item | Ending balance | Beginning balance |
| Security deposits payable | 257,963,026.75 | 252,335,944.60 |
| Collections by a third party | 4,491,763.37 | 6,179,088.18 |
| Guarantee deposits payable | 5,929,870.30 | 5,104,062.30 |
| Connected transactions | 2,700,000.00 | |
| Others | 1,024,411.88 | 1,462,119.98 |
| Total | 269,409,072.30 | 267,781,215.06 |
2) Other important payables with an age of more than one year
| Item | Ending balance | Beginning balance |
| Other payables | 269,409,072.30 | 267,781,215.06 |
| Total | 269,409,072.30 | 267,781,215.06 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 102-
As of June 30, 2022, the important other payables with an age of more than one year totaled RMB 231,518,785.92, mainly involvingthe sales deposits.
29. Non-current liabilities due within one year
In RMB
- 102-
Item
| Item | Ending balance | Beginning balance |
| Lease liabilities due within one year | 5,414,420.90 | 5,387,591.43 |
| Total | 5,414,420.90 | 5,387,591.43 |
30. Other current liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Output tax to be transferred | 115,300,198.58 | 124,284,081.56 |
| Total | 115,300,198.58 | 124,284,081.56 |
31. Lease liabilities
In RMB
32. Deferred income
In RMB
Projects with government grants:
In RMB
| Projects with government grants | Beginning balance | Amount of newly added government grants for this year | Amount included in the current profits and losses for this year | Ending balance | Related to assets/income |
| Project of intelligent manufacturing and integrated standard and new model application | 38,244,848.14 | 4,269,752.82 | 33,975,095.32 | Related to assets | |
| Construction of production line with an annual output of 2.25 million sets of kitchen appliances | 22,331,070.60 | 1,286,890.62 | 21,044,179.98 | Related to assets | |
| Construction of kitchen appliance R&D, design and testing center | 7,044,601.01 | 549,179.75 | 6,495,421.26 | Related to assets | |
| Subsidy for the construction of production line with an annual output of 1 million sets of kitchen appliances | 1,139,057.12 | 571,891.98 | 567,165.14 | Related to assets |
Item
| Item | Ending balance | Beginning balance |
| Lease payment amount | 27,033,092.96 | 37,325,149.01 |
| Unrecognized financial expenses | -3,043,042.22 | -5,760,523.29 |
| Non-current liabilities due within one year after reclassification | -5,414,420.90 | -5,387,591.43 |
| Total | 18,575,629.84 | 26,177,034.29 |
Item
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
| Government grants | 131,747,378.42 | 1,250,000.00 | 8,354,145.46 | 124,643,232.96 | |
| Total | 131,747,378.42 | 1,250,000.00 | 8,354,145.46 | 124,643,232.96 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 103-
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Construction of productionlinewith an annual output of 1.08million sets of built-inkitchen appliances
| Construction of production line with an annual output of 1.08 million sets of built-in kitchen appliances | 4,251,843.75 | 341,245.50 | 3,910,598.25 | Related to assets | |
| Development of new generation of environmentally-friendly energy-saving kitchen appliances and their production line | 531,025.31 | 95,325.42 | 435,699.89 | Related to assets | |
| Construction of digital intelligent workshop for smart home appliances | 422,222.28 | -9,136.48 | 431,358.76 | Related to assets | |
| Construction of the digital workshop with an annual output of 2.25 million sets of kitchen appliances | 24,680.65 | -123,825.26 | 148,505.91 | Related to assets | |
| Recycling-centered renewal project | 360,466.65 | 45,805.08 | 314,661.57 | Related to assets | |
| Subsidy for an investment in a production line with an annual output of 150,000 kitchen range hoods | 30,106.11 | 30,106.11 | - | Related to assets | |
| Academician & expert work station | 210,622.64 | 22,553.06 | 188,069.58 | Related to assets | |
| Construction of the kitchen appliance R&D, design and testing center | 34,946.80 | 3,812.40 | 31,134.40 | Related to assets | |
| Technological upgrading for manufacturing enterprises | 8,300,000.00 | - | 8,300,000.00 | Related to assets | |
| Technological upgrading project with an annual output of 500,000 | 2,216,987.91 | 187,205.58 | 2,029,782.33 | Related to assets | |
| Intelligent unmanned factory based on 5G and cloud technologies | 17,747,914.45 | 1,039,424.10 | 16,708,490.35 | Related to assets | |
| Subsidy for the No. M2020-09 Land of Chengnan New Area | 28,856,985.00 | 28,856,985.00 | Related to assets | ||
| Robam Future Factory Project | 1,250,000.00 | 43,914.78 | 1,206,085.22 | Related to assets | |
| Total | 131,747,378.42 | 1,250,000.00 | 8,354,145.46 | 124,643,232.96 | — |
33. Capital stock
In RMB
| Beginning balance | Increase and decrease of this change (+, -) | Ending balance | |||||
| Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | |||
| Total number of shares | 949,024,05 0.00 | 949,024,05 0.00 | |||||
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 104-
34. Capital reserve
In RMB
Note: for the increase in other capital reserves, please refer to the relevant explanation on equity incentives in the item of othersignificant matters in this note.
35. Treasury shares
In RMB
- 104-
Item
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Share repurchase | 199,995,742.59 | 199,995,742.59 | ||
| Total | 199,995,742.59 | 199,995,742.59 |
36. Other comprehensive incomes
In RMB
| Item | Beginning balance | Amount of the current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Less: amount included in other comprehensive incomes previously and then transferred into the current profit or loss | Less: amount included in other comprehensive incomes previously and then transferred into current retained earnings | Less: income tax expenses | Net income after tax attributable to the parent company | Net income after tax attributable to minority shareholders | |||
| I. Other comprehensive incomes that cannot be reclassified into profit or loss | - 100,157,6 34.16 | - 100,157,6 34.16 | ||||||
| Changes in fair value of the investment in other equity instruments | - 100,157,6 34.16 | - 100,157,6 34.16 | ||||||
Item
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Capital (stock) premium | 401,799,332.67 | 401,799,332.67 | ||
| Other capital reserves | 3,118,765.48 | 3,998,366.27 | 7,117,131.75 | |
| Total | 404,918,098.15 | 3,998,366.27 | 408,916,464.42 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 105-
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Total ofothercomprehensiveincomes
| Total of other comprehensive incomes | - 100,157,6 34.16 | - 100,157,6 34.16 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 106-
37. Surplus reserve
In RMB
- 106-
Item
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Statutory surplus reserve | 474,516,412.50 | 474,516,412.50 | ||
| Total | 474,516,412.50 | 474,516,412.50 |
38. Undistributed profit
In RMB
Details of adjustment of undistributed profit at the beginning of the period:
1) Undistributed profit at the beginning of the period affected due to the retroactive adjustment of the Accounting Standards for
Business Enterprises and its related new regulations (RMB).
2) Undistributed profit at the beginning of the period affected due to the change in accounting policies (RMB).
3) Undistributed profit at the beginning of the period affected due to the correction of significant accounting errors (RMB).
4) Undistributed profit at the beginning of the period affected due to the change in the scope of consolidation caused by the common
control (RMB).
5) Total undistributed profits at the beginning of the period affected due to other adjustments (RMB).
39. Operating income and operating cost
In RMB
| Item | Amount of the current period | Amount of the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,317,490,105.88 | 2,205,131,842.03 | 4,225,828,188.22 | 1,968,087,094.43 |
| Other businesses | 126,819,993.81 | 34,888,040.50 | 100,253,843.40 | 25,804,527.87 |
| Total | 4,444,310,099.69 | 2,240,019,882.53 | 4,326,082,031.62 | 1,993,891,622.30 |
40. Taxes and surcharges
In RMB
| Item | Amount of the current period | Amount of the previous period |
| City maintenance and construction tax | 15,541,302.70 | 18,048,209.85 |
| Education surcharge | 11,100,930.49 | 12,771,763.53 |
| House tax | 309,227.61 | 421,529.89 |
Item
| Item | Current period | Previous period |
| Undistributed profit at the end of previous period before adjustment | 7,098,721,555.37 | 6,240,444,654.34 |
| Undistributed profit at the beginning of the period after adjustment | 7,098,721,555.37 | 6,240,444,654.34 |
| Add: Net profits attributable to owners of the parent company in the current period | 723,549,381.25 | 1,331,712,059.03 |
| Dividends payable for ordinary shares | 472,047,458.00 | 473,435,158.00 |
| Undistributed profit at the end of the period | 7,350,223,478.62 | 7,098,721,555.37 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 107-
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Land use tax
| Land use tax | -4,382,947.50 | 61,524.00 |
| Stamp tax | 1,176,949.93 | 1,060,955.85 |
| Vehicle and vessel usage tax | 9,939.84 | 9,895.14 |
| Environmental protection tax | 4,621.17 | 4,349.86 |
| Total | 23,760,024.24 | 32,378,228.12 |
Other notes:
According to the Notice on Taxation Matters of Hangzhou Linping District Tax Service, State Taxation Administration (HLPT [2022]No. 17731), the Company was exempted from the urban land use tax for the year 2021.
41. Sales expenses
In RMB
42. Administrative expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Employee remuneration | 91,121,750.84 | 75,168,362.35 |
| Depreciation and amortization | 25,271,929.68 | 20,340,171.28 |
| Consulting service fees | 12,229,974.53 | 8,560,518.67 |
| Maintenance expenses | 10,083,182.01 | 8,390,641.09 |
| Office expenses | 6,639,136.07 | 6,978,151.70 |
| Rental fees | 5,712,938.91 | 9,087,992.71 |
| Travel expenses | 3,083,013.05 | 3,019,005.02 |
| Business hospitality cost | 4,374,301.07 | 3,159,347.68 |
| Communication expense | 2,918,739.13 | 2,603,129.38 |
| Travel expenses | 2,285,073.79 | 2,016,160.37 |
| Costs of equity incentive | 3,998,366.27 | 802,690.60 |
| Material consumption | 4,431,994.70 | 2,719,283.02 |
| Others | 11,433,464.52 | 7,147,655.30 |
| Total | 183,583,864.57 | 149,993,109.17 |
43. R&D expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Employee remuneration | 78,436,915.06 | 63,291,760.88 |
| Direct input | 73,217,115.42 | 61,648,388.01 |
Item
| Item | Amount of the current period | Amount of the previous period |
| Marketing service expenses | 631,391,446.17 | 658,869,399.50 |
| Advertisement expenses | 259,175,406.07 | 212,712,834.57 |
| Employee remuneration | 139,790,625.89 | 111,001,158.94 |
| Booth decoration expenses | 59,578,022.62 | 66,732,522.09 |
| Promotional activity expenses | 18,422,096.45 | 37,411,007.65 |
| Material consumption | 33,049,395.80 | 31,534,245.53 |
| Business hospitality cost | 7,472,828.11 | 7,040,351.39 |
| Travel expenses | 6,801,054.02 | 7,379,352.93 |
| Rental fees | 8,555,672.36 | 7,880,885.39 |
| Intermediary service fees | 7,477,610.64 | 7,606,687.09 |
| Office expenses | 4,560,789.33 | 7,154,345.09 |
| Others | 8,429,642.06 | 8,459,821.71 |
| Total | 1,184,704,589.52 | 1,163,782,611.88 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 108-
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Depreciation and amortization
| Depreciation and amortization | 7,636,633.77 | 7,336,784.12 |
| Design fees | 2,899,636.01 | 4,232,409.85 |
| Other expenses | 7,178,345.27 | 6,923,863.26 |
| Total | 169,368,645.53 | 143,433,206.12 |
44. Financial expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Interest expenses | 1,018,439.59 | 1,228,635.41 |
| Less: Interest income | 60,042,815.83 | 50,677,538.57 |
| Add: foreign exchange gain/loss | -3,940,324.55 | 332,356.04 |
| Add: other expenses | 689,241.88 | 1,189,967.69 |
| Total | -62,275,458.91 | -47,926,579.43 |
45. Other incomes
In RMB
46. Investment income
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from long-term equity investments accounted for using the equity method | -2,947,887.32 | -1,440,070.07 |
| Investment income during holding of financial assets for trading | 22,116,828.43 | 32,869,587.74 |
| Total | 19,168,941.11 | 31,429,517.67 |
47. Loss from credit impairment
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Bad debt losses of other receivables | 4,029,453.07 | -7,524,268.32 |
| Bad debt losses on notes receivable | 163,813,946.01 | -23,680,868.74 |
| Bad debt losses from accounts receivable | -158,819,085.15 | -287,302.15 |
| Total | 9,024,313.93 | -31,492,439.21 |
48. Loss from asset impairment
| Sources generating other incomes | Amount of the current period | Amount of the previous period |
| Financial support fund to boost the corporate development | 49,775,390.00 | 35,660,000.00 |
| Amortization of deferred income | 8,354,145.46 | 9,208,072.74 |
| Tax rebate for sales of embedded software | 23,286,694.84 | 7,323,753.03 |
| Special funds for industrial development | 9,608,719.00 | 2,350,852.22 |
| Patent awards | 1,175,521.65 | |
| Post allowance and social insurance allowance | 1,372,323.40 | 122,278.28 |
| Refund of individual income tax handling fee | 482,308.94 | 412,808.74 |
| VAT exemption or reduction | 10,643.41 | |
| Other subsidies | 5,000.00 | 9,000.00 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 109-
In RMB
- 109-
Item
| Item | Amount of the current period | Amount of the previous period |
| II. Loss from obsolete inventory or from impairment of the contract performance costs | 24,056,013.60 | |
| Total | 24,056,013.60 |
49. Asset disposal income
In RMB
| Sources of asset disposal income | Amount of the current period | Amount of the previous period |
| Non-current asset disposal income | 37,838.75 | -2,035,843.51 |
| Including: income from disposal of fixed assets | 37,838.75 | -2,035,843.51 |
| Total | 37,838.75 | -2,035,843.51 |
50. Non-operating revenue
In RMB
Government grants included in the current profit or loss:
| Item | Amount of the current period | Amount of the previous period | Source and basis | Related to assets/income |
| Subsidy for early scrapping of diesel vehicle of national III emission standard | 13,000.00 | Related to income | ||
| Total | 13,000.00 | — | — |
51. Non-operating expenditures
In RMB
| Item | Amount of the current period | Amount of the previous period | Amount included in the current non-recurring gains and losses |
| External donations | 1,000,077.70 | 1,000,000.00 | 1,000,077.70 |
| Amercement outlay | 56,677.00 | 56,677.00 | |
| Losses from non-current asset damage or retirement | 72,018.47 | 1,923.08 | 72,018.47 |
| Others | 429,381.96 | 576,001.20 | 429,381.96 |
| Total | 1,558,155.13 | 1,577,924.28 | 1,558,155.13 |
Item
| Item | Amount of the current period | Amount of the previous period | Amount included in the current non-recurring gains and losses |
| Government grants | 13,000.00 | ||
| Penalty income | 13,200.00 | 13,200.00 | |
| Others | 2,682,807.72 | 1,182,370.24 | 2,682,807.72 |
| Total | 2,696,007.72 | 1,195,370.24 | 2,696,007.72 |
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 110-
52. Income tax expenses
(1) Presentation of income tax expenses
In RMB
- 110-
Item
| Item | Amount of the current period | Amount of the previous period |
| Current income tax expenses | 183,792,350.28 | 221,466,949.04 |
| Deferred income tax expenses | -52,619,931.42 | -77,977,344.97 |
| Total | 131,172,418.86 | 143,489,604.07 |
(2) Adjustment of accounting profit and income tax expenses
In RMB
| Item | Amount of the current period |
| Total profit | 852,644,258.89 |
| Income tax expense calculated based on statutory/applicable tax rate | 127,896,638.88 |
| Effects of the subsidiaries’ application of different tax rates | 181,089.38 |
| Effects of the adjustment of income tax in previous period | 175,155.04 |
| Effects of the non-deductible costs, expenses and losses | 3,181,949.83 |
| Effects of using deductible losses of unrecognized deferred income taxes in the previous period | |
| Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 920,789.79 |
| Profit and loss of joint ventures and associated companies accounted for by equity method | -442,183.10 |
| Effects of taxes deducted by research and development expense addition (indicated with "-") | -741,020.96 |
| Income tax expense | 131,172,418.86 |
53. Other comprehensive incomes
See 36. Other comprehensive incomes of Note VII for details.
54. Items in cash flow statement
(1) Other cash received from operating activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Interest revenue on deposits | 60,042,815.83 | 50,677,538.57 |
| Government grants | 63,679,906.40 | 38,558,939.24 |
| Revenue collected and payment made on behalf of other agencies | 5,123,692.97 | 12,423,235.01 |
| Cash reserve | 1,233,346.31 | 5,010,000.00 |
| Guarantee and security deposits | 14,850,829.06 | 9,382,127.28 |
| L/C margin and bill acceptance margin | 30,104,468.61 | |
| Other payments | 2,891,773.89 | 2,652,812.06 |
| Total | 177,926,833.07 | 118,704,652.16 |
(2) Other cash paid in relation to operating activities
Full Text of Hangzhou Robam Appliances Co., Ltd. Semi-Annual Report 2022- 111-
In RMB
- 111-
Item
| Item | Amount of the current period | Amount of the previous period |
| Period expenses | 1,141,993,734.77 | 1,035,315,521.21 |
| Revenue collected and payment made on behalf of other agencies | 9,787,117.46 | 7,363,869.83 |
| Guarantee and security deposits | 13,629,302.87 | 7,846,747.85 |
| L/C margin and bill acceptance margin | 21,530,136.56 | 10,236,863.39 |
| Cash reserve | 8,383,255.70 | 13,693,388.58 |
| Others | 5,565,795.10 | 1,029,155.95 |
| Total | 1,200,889,342.46 | 1,075,485,546.81 |
(3) Other cash received from financing activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from accounts receivable factoring | 1,012,732.06 | 5,552,160.81 |
| Total | 1,012,732.06 | 5,552,160.81 |
(4) Other cash paid in relation to financing activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Expenditure for accounts receivable factoring | 3,516,183.32 | |
| Rental | 3,020,626.80 | |
| Share repurchase | 199,995,742.59 | |
| Total | 6,536,810.12 | 199,995,742.59 |
55. Supplementary information of Cash Flow Statement
(1) Supplementary information of Cash Flow Statement
In RMB
- 112 -
Supplementary information
| Supplementary information | Current amount | Amount of the previous period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 721,471,840.03 | 799,645,675.31 |
| Add: Asset impairment provision | -24,056,013.60 | |
| Credit impairment provision | -9,024,313.93 | 31,492,439.21 |
| Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets | 60,134,937.59 | 51,125,161.10 |
| Depreciation of right-of-use assets | 2,735,187.20 | |
| Amortization of intangible assets | 6,787,723.52 | 6,475,429.26 |
| Amortization of long-term deferred expenses | 2,454,162.19 | 1,613,095.73 |
| Losses arising from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") | -37,838.75 | 2,035,843.51 |
| Losses on disposal of fixed assets (gains indicated with "-") | 72,018.47 | 1,923.08 |
| Losses from fair value change (gains expressed with “-”) | ||
| Financial expenses (profit shall be indicated with"-") | -2,921,884.96 | 264,556.23 |
| Investment losses (gains expressed with “-”) | -19,168,941.11 | -31,429,517.67 |
| Decrease in deferred income tax assets (increase shall be indicated with “-”) | -54,426,406.39 | -77,723,821.81 |
| Increase in deferred income tax liabilities (decrease shall be indicated with “-”) | 1,806,474.98 | -253,781.85 |
| Decrease in inventories (increase shall be indicated with “-”) | -28,800,735.18 | -192,725,465.63 |
| Decrease in operating receivables (increase shall be indicated with “-”) | -137,525,667.47 | -530,224,948.55 |
| Increase in operating payables (decrease expressed with "-") | -196,645,420.26 | 678,330,853.31 |
| Others | -8,405,382.14 | |
| Net cash flow from operating activities | 322,855,122.33 | 730,222,059.09 |
| 2. Non-cash flow-involved major investing and financing activities: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under financing leases | ||
| 3． Net increase/decrease in cash and cash equivalents: | ||
| Ending balance of cash | 3,327,149,844.76 | 4,141,495,878.43 |
| Less: cash beginning balance | 3,719,988,820.35 | 3,886,096,513.56 |
| Add: ending balance of cash equivalents | ||
| Less: cash equivalents at the beginning of the period | ||
| Net increase in cash and cash equivalents | -392,838,975.59 | 255,399,364.87 |
(2) Composition of cash and cash equivalents
In RMB
56. Note to items in the Statement of Changes in Owner’s Equity
Name of the item under "Others" whose previous ending balance was adjusted, the adjusted amount and other matters: NA
57. Assets with restricted ownership and right to use
In RMB
- 113 -
Item
| Item | Ending book value | Reasons for limit |
| Cash and cash equivalents | 73,638,194.15 | L/G margin and note margin |
| Total | 73,638,194.15 |
58. Foreign currency monetary item
(1) Foreign currency monetary item
In RMB
| Item | Ending balance in foreign currency | Exchange rate for conversion | Ending balance in RMB |
| Cash and cash equivalents | |||
| Including: USD | 9,527,417.96 | 6.7114 | 63,942,312.90 |
| EUR | 101.12 | 7.0084 | 708.69 |
| AUD | 3.29 | 4.6145 | 15.18 |
| Accounts receivable | |||
| Including: USD | 3,088,568.19 | 6.7114 | 20,728,616.53 |
| EUR | 289.60 | 7.0084 | 2,029.63 |
| AUD | 30.00 | 4.6145 | 138.44 |
| Accounts received in advance | |||
| Including: AUD | 41,826.83 | 4.6145 | 193,009.90 |
| USD | 338,682.83 | 6.7114 | 2,273,035.95 |
| EUR | 17,468.96 | 7.0084 | 122,429.46 |
(2) Description for overseas operating entities, including the disclosure of the main overseas business location,
bookkeeping base currency and selection basis for the important overseas operating entities as well as thereason for the change of bookkeeping base currency (if any).
□Applicable √ Not applicable
59. Government grants
(1) Basic information about government grants
| Item | Ending balance | Beginning balance |
| I. Cash | 3,327,149,844.76 | 3,719,988,820.35 |
| Including: cash on hand | 122,392.82 | 80,944.99 |
| deposits available for payment at any time | 3,326,702,947.52 | 3,718,304,060.33 |
| Other cash and cash equivalents available for payment at any time | 324,504.42 | 1,603,815.03 |
| III. Balance of cash and cash equivalents at the end of the period | 3,327,149,844.76 | 3,719,988,820.35 |
In RMB
- 114 -
Type
| Type | Amount | Items | Amounts included in current profits and losses |
| 2020 advantage enterprise cultivation funds | 30,000,000.00 | Other income | 30,000,000.00 |
| Tax rebate for sales of embedded software | 23,286,694.84 | Other income | 23,286,694.84 |
| 2020 Yuhang District "Kunpeng" and "Quasi-Kunpeng" enterprise cultivation funds | 18,715,390.00 | Other income | 18,715,390.00 |
| Fund subsidy for equipment under industrial economic policies | 3,149,100.00 | Other income | 3,149,100.00 |
| Subsidy for project of collaborative innovation of industrial chains | 2,400,000.00 | Other income | 2,400,000.00 |
| R&D subsidy for science and technology enterprises in Hangzhou | 1,988,200.00 | Other income | 1,988,200.00 |
| Post allowance and social insurance allowance | 1,372,323.40 | Other income | 1,372,323.40 |
| Financial rewards for enterprises with annual main business income exceeding RMB 10 billion | 1,000,000.00 | Other income | 1,000,000.00 |
| Subsidy for the purchase of industrial robots in Shengzhou in 2021 | 867,900.00 | Other income | 867,900.00 |
| Standardization project subsidy | 835,120.00 | Other income | 835,120.00 |
| Refund of individual income tax handling fee | 482,308.94 | Other income | 482,308.94 |
| 2021 District Open 88 credit insurance policy subsidy | 285,040.00 | Other income | 285,040.00 |
| Special funds for the development of e-commerce industry in 2020 | 200,000.00 | Other income | 200,000.00 |
| Funds (first batch) for the science and technology policy in 2022 | 200,000.00 | Other income | 200,000.00 |
| Manufacturing industry incentive | 170,000.00 | Other income | 170,000.00 |
| Subsidy for protection of intellectual property rights | 163,635.65 | Other income | 163,635.65 |
| 2022 Hangzhou special patent subsidy (first batch) | 135,000.00 | Other income | 135,000.00 |
| 2021 Shaoxing intelligent manufacturing subsidy | 100,000.00 | Other income | 100,000.00 |
| New product project award (second batch) for the development of private economy in 2020 | 60,000.00 | Other income | 60,000.00 |
| Commendation and reward for key enterprises | 60,000.00 | Other income | 60,000.00 |
| The "795 Policy" subsidy | 50,000.00 | Other income | 50,000.00 |
| "Top ten industrial enterprises" in Shengzhou Sanjiang Sub-district | 50,000.00 | Other income | 50,000.00 |
| Subsidies for encouraging intellectual property development | 41,766.00 | Other income | 41,766.00 |
| Incentives for encouraging industrial enterprises to increase equipment investment | 30,000.00 | Other income | 30,000.00 |
| 2021 Innovation voucher subsidy funds | 28,479.00 | Other income | 28,479.00 |
| Special funds for promotion of finance of the Linping District Commerce Bureau | 20,000.00 | Other income | 20,000.00 |
| VAT exemption or reduction | 10,643.41 | Other income | 10,643.41 |
| Subsidy of the Linping District Commerce Bureau for enhancing the level of commercial and trade development | 10,000.00 | Other income | 10,000.00 |
| Talent introduction and cultivation reward | 5,000.00 | Other income | 5,000.00 |
| Future Factory subsidy | 1,250,000.00 | Deferred income | 1,250,000.00 |
(2) Return of government grants
□Applicable √ Not applicable
VIII. Changes in the scope of consolidated financial statements
After being examined and approved by the President's Office Meeting of the Company, Hangzhou Jinhe ElectricAppliances Co., Ltd., a wholly-owned subsidiary, was established with a registered capital of RMB 10 million, andits industrial and commercial registration formalities were completed on June 22, 2022.
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the Robam Group
- 115 -
Subsidiary
| Subsidiary | Principal place of business | Registration place | Nature of business | Shareholding ratio | Acquisition method | |
| Direct | Indirect | |||||
| Beijing Robam Appliances Sales Co., Ltd. | Beijing | Beijing | Sales of kitchen appliances | 100.00% | Business combination under common control | |
| Shanghai Robam Electric Appliance Sales Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 100.00% | Business combination under common control | |
| Hangzhou MingQi Electric Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Acquired through investment | |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | Shengzhou | Shengzhou | Production and sales of kitchen appliances | 51.00% | Business combination not under common control | |
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | Hangzhou | Hangzhou | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment | |
| Zhejiang Cookingfuture Technology Co., Ltd. | Shengzhou | Shengzhou | Smart kitchen design | 32.13% | Acquisition upon its establishment | |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00 | Acquisition upon its establishment | |
Note: The basis for the Company to hold half or less of the voting rights of Zhejiang Cookingfuture Technology Co., Ltd. but stillcontrol it: as the Company has a controlling relationship with Shengzhou Kinde, it also has a controlling relationship with its holdingsubsidiary Zhejiang Cookingfuture Technology Co., Ltd.
(2) Major partially-owned subsidiaries
In RMB
| Subsidiary | Proportion of shares held by minority shareholders | Gains/losses attributable to minority shareholders in the current period | Dividend declared and distributed to minority shareholders in the current period | Balance of minority shareholders’ equity at the end of the period |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 49.00% | -740,298.59 | 4,000,000.00 | 133,016,480.44 |
| Zhejiang Cookingfuture Technology Co., Ltd. | 37.00% | -1,337,206.38 | 11,024,123.58 |
(3) Main financial information of major partially-owned subsidiaries
In RMB
- 116 -Subsidiary
| Subsidiary | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 156,5 36,55 5.46 | 345,6 92,43 9.54 | 502,2 28,99 5.00 | 175,4 14,16 3.40 | 43,31 3,496 .47 | 218,7 27,65 9.87 | 215,5 40,93 6.45 | 309,6 21,53 5.16 | 525,1 62,47 1.61 | 204,3 06,09 5.17 | 35,11 1,747 .76 | 239,4 17,84 2.93 |
| Zhejiang Cookingfuture Technology Co., Ltd. | 35,75 4,206 .83 | 2,319 ,556. 78 | 38,07 3,763 .61 | 1,326 ,685. 00 | 1,326 ,685. 00 | 18,29 5,624 .97 | 1,856 ,306. 24 | 20,15 1,931 .21 | 4,790 ,781. 30 | 4,790 ,781. 30 | ||
In RMB
| Subsidiary | Amount of the current period | Amount of the previous period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 77,502,270.79 | - 2,848,019 .82 | - 2,848,019 .82 | - 21,169,06 4.76 | 124,027,172.62 | 20,862,147.66 | 20,862,147.66 | 6,936,248.30 |
- 117 -
ZhejiangCookingfutureTechnology Co., Ltd.
| Zhejiang Cookingfuture Technology Co., Ltd. | 593,200,0 2 | - 3,614,071 .30 | -3,614,071 .30 | - 10,664,34 9,92 | -3,217,615 .53 | -3,217,615 .53 | -4,240,135 .64 |
3. Interests in joint ventures or associated companies
(1) Minor joint ventures or associated companies
| Name of joint ventures or associated companies | Principal place of business | Registration place | Nature of business | Shareholding ratio | Accounting treatment of investment in joint ventures or associated companies | |
| Direct | Indirect | |||||
| De Dietrich Trade (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Equity method | |
| Zhejiang Tingshuo Brand Operation and Management Co., Ltd. | Hangzhou | Hangzhou | Retail | 40.00% | Equity method | |
| Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. | Shaoxing | Shaoxing | Sales of kitchen appliances | 40.00% | Equity method | |
(2) Summary of the financial information of minor joint ventures or associated companies
In RMB
| Ending balance/amount incurred in current period | Beginning balance/amount of the previous period | |
| Joint venture: | ||
| Total book value of investment | 5,262,742.02 | 3,661,700.03 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -2,538,958.01 | 208,930.44 |
| -Total comprehensive income | -2,538,958.01 | 208,930.44 |
| Associated company: | ||
| Total book value of investment | 1,334,500.57 | 1,743,429.88 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -408,929.31 | -256,570.12 |
| -Total comprehensive income | -408,929.31 | -256,570.12 |
X. Risks Related to Financial Instruments
Major financial instruments of the Company include receivables and payables. See the note for detailed description
of these financial instruments. Risks related to these financial instruments and risk management policies adopted by theCompany to reduce such risks are outlined as follows. The management of the Company manages and monitors suchrisk exposures to ensure to keep the risks above within limited scope.
1. The Company’s various risk management objectives and policies are outlined as follows:
Risk management conducted by the Company is to properly balance risk and income, minimize negative impactsof the risks on the Company’s business performance and maximize benefits of the shareholders and other equityinvestors. Based on the risk management objective, the Company’s basic risk management policy is to determine andanalyze all kinds of risks faced by the Company, establish appropriate risk bottom line for risk management, andmonitor all risks promptly and reliably keep risks within a limited range.
(1) Market risk – price risk
Since the Company sells its products at market prices, it may be affected by such price fluctuations.
(2) Credit risk
As of June 30, 2022, the largest credit risk exposure that may bring financial loss to the Company mainly comesfrom the Company’s financial assets loss caused by the other party’s failure to perform its obligations in the contract,particularly including the loss in the book value of recognized financial assets in the consolidated balance sheet.
To reduce credit risk, the Company has a dedicated team responsible for determining the credit line, conductingcredit approval and implementing other monitoring procedures, to ensure that necessary measures are taken to recoverdue debt. In addition, the Company reviews the recovery of each account payable on each balance sheet date, so as toensure sufficient bad debt provisions for unrecoverable accounts. Therefore, the management of the Company holdsthat the credit risk faced by the Company has been significantly reduced.
The credit risk of the Company’s liquid capital is low since it is deposited at banks with relatively high credit rating.Because the risk exposures of the Company are related to multiple contracting parties and multiple clients, the Companyhas no major credit risk concentration.
The Company adopts necessary policies to ensure all of the clients involved in the sales of our products have goodcredit record. The Company has no major credit risk concentration.
The receivables of the top five contracting parties totaled RMB 1,254,911,112.52.
Other receivables of the top five contracting parties totaled RMB 40,895,433.56.
(3) Liquidity risk
Liquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due. TheCompany manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoid unacceptablelosses or damage to corporate reputation. The Company management has closely examined the liquid capital of theCompany and regularly analyzed the liability structure/term, bank lines and so on to endure fund sufficiency. It isconcluded that the Company has sufficient funds to meet the demands of short-term debt and capital expenditure ofthe Company. Analysis of the financial assets and financial liabilities of the Company as per maturity of theundiscounted contract obligations remained is made as follows:
Amount on June 30, 2022
- 119 -
Item
| Item | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial assets | |||||
| Cash and cash equivalents | 3,400,788,038.91 | 3,400,788,038.91 | |||
| Financial assets held for trading | 2,884,760,000.00 | 2,884,760,000.00 | |||
| Notes receivable | 1,308,046,816.29 | 1,308,046,816.29 | |||
| Accounts receivable | 1,640,360,454.56 | 1,640,360,454.56 | |||
| Other receivables | 105,383,151.12 | 105,383,151.12 | |||
| Financial liabilities | |||||
| Short-term borrowings | 39,657,061.74 | 39,657,061.74 | |||
| Notes payables | 809,469,587.67 | 809,469,587.67 | |||
| Accounts payable | 2,303,202,819.34 | 2,303,202,819.34 | |||
| Other payables | 269,409,072.30 | 269,409,072.30 | |||
| Payroll payable | 53,282,842.44 | 53,282,842.44 | |||
| Other current liabilities | 115,300,198.58 | 115,300,198.58 | |||
| Non-current liabilities due within one year | 5,414,420.90 | 5,414,420.90 | |||
| Lease liabilities | 3,498,355.33 | 8,140,360.20 | 6,936,914.31 | 18,575,629.84 |
(4) Sensitivity analysis on foreign exchange risks
The exchange rate risk borne by the Company is mainly associated with USD, Euro and HKD, etc. The foreignexchange risk borne by the Company is mainly associated with USD (which shall be changed according to relevantrealities). As of June 30, 2022, the Company's balances of assets and liabilities are in RMB (except for the balances ofthe assets and liabilities in foreign currency in "VII. 58 Foreign currency monetary item" in this Note). Exchange riskresulting from the assets and liabilities whose balances are in foreign currency may affect the Company’s performance.
The Company pays close attention to the impact of change in exchange rate on the Company’s exchange risk.Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk.
XI. Disclosure of Fair Value
1. Assets and liabilities measured at fair value at the end of the period
In RMB
| Item | Ending fair value | |||
| Fair value measurement (Level 1) | Fair value measurement (Level 2) | Fair value measurement (Level 3) | Total | |
| Continuous fair value measurement | -- | -- | -- | -- |
| (I) Financial assets held for trading | 2,884,760,000.00 | 2,884,760,000.00 | ||
| 1. Financial assets measured at fair value with changes included in current profit or loss | 2,884,760,000.00 | 2,884,760,000.00 | ||
| (1) Financial products | 2,884,760,000.00 | 2,884,760,000.00 | ||
- 120 -
2. Financial assets
measured at fair valuewith changes includedin current profit orloss
| 2. Financial assets measured at fair value with changes included in current profit or loss | 2,116,023.22 | 2,116,023.22 | ||
| (III) Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 | ||
| Total assets measured continuously at fair value | 2,886,876,023.22 | 2,886,876,023.22 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Valuation techniques adopted and qualitative and quantitative information on important parameters for
the items involved in Level 3 continuous and non-continuous fair value measurement
| Item | June 30, 2022 Fair value | Valuation techniques | Significant unobservable value | Relationship between unobservable value and fair value |
| financial products | 2,884,760,000.00 | Optimal fair value estimation | Investment cost | — |
| Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | Optimal fair value estimation | Investment cost | — |
Due to the deterioration of the operating environment, operating conditions and financial situation ofthe invested enterprise, Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership),the Company measured it with zero as a reasonable estimate of fair value.
XII. Related Party and Related Party Transactions
1. The Company’s parent company
| Parent company | Registration place | Nature of business | Registered capital | Proportion of the Company’s shares held by the parent company | Proportion of voting right of the parent company in the Company |
| Hangzhou Robam Industrial Group Co., Ltd. | Hangzhou, Zhejiang | Investment and industrial management | RMB 60 million | 49.68% | 49.68% |
The ultimate controlling party of the Company is Ren Jianhua
2. The Company’s subsidiaries
See the Note for more about the Company’s subsidiaries.
3. The Company's joint ventures and associated companies
See the Note for more about the Company’s major joint ventures or associated companies.
4. Other related parties
| Name of other related parties | Relation between other related parties and the Company |
| Hangzhou Amblem Household Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Controlled by the same ultimate controlling party |
- 121 -Hangzhou Nbond Nonwovens Co., Ltd.
| Hangzhou Nbond Nonwovens Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Yaguang Spray Coating Factory | Other related parties |
| Hangzhou City Garden Hotel Co., Ltd. | Other related parties |
| Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Controlled by the same ultimate controlling party |
| Shaoxing Kinde Electric Appliances Co., Ltd. | Other related parties |
| Hangzhou Guoguang Touring Commodity Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Small Planter Technology Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Linping ROBAM Charity Foundation | Other related parties |
5. Connected transactions
(1) Connected transactions regarding purchasing and selling goods and providing and accepting labor
services
Table of goods purchase and labor services receiving
In RMB
| Related parties | Description of the connected transactions | Amount of the current period | Whether exceeds the approved limited or not (Y/N) | Amount of the previous period |
| Hangzhou Yuhang Yaguang Spray Coating Factory | Receiving of labor services | 3,910,128.45 | No | 4,188,923.61 |
| Hangzhou Small Planter Technology Co., Ltd. | Purchase of goods | 1,767,541.39 | No | 2,277,929.75 |
| Hangzhou Amblem Household Co., Ltd. | Purchase of goods | 19,517,425.33 | No | 413,419.77 |
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Purchase of goods | 485,747.10 | No | 299,710.75 |
| Zhejiang Tingshuo Brand Operation and Management Co., Ltd. | Receiving of labor services | 200,000.00 | No | |
| Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. | Purchase of goods | 376,177.00 | No | |
| Hangzhou City Garden Hotel Co., Ltd. | Receiving of labor services | No | 201,474.34 | |
| Hangzhou Guoguang Touring Commodity Co., Ltd. | Purchase of goods | 85,584.42 | No | 70,568.15 |
| Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Purchase of goods | 8,344.42 | No | 424.78 |
Table of goods sales and labor services provision
In RMB
| Related parties | Description of the connected transactions | Amount of the current period | Amount of the previous period |
| Hangzhou Amblem Household Co., Ltd. | Sale of goods | 2,332,591.12 | 7,335,655.75 |
| Hangzhou Nbond Nonwovens Co., Ltd. | Sale of goods | 10,746.90 | |
| Hangzhou Linping ROBAM Charity Foundation | Sale of goods | 696,446.84 | 13,100.00 |
(2) Related lease
The Company acts as the lessor:
In RMB
| Lessee | Type of leased asset | Rental income recognized in the current period | Lease income recognized in the previous period |
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 14,400.00 | 14,400.00 |
The Company acts as the Lessee:
In RMB
- 122 -
Lessor
| Lessor | Type of leased asset | Rental costs of short-term leases and low-value asset leases with simplified treatment (if applicable) | Variable lease payments not included in lease liabilities for measurement (if applicable) | Rental paid | Interest expenses on lease liabilities assumed | Increased right-of-use assets | |||||
| Amount of the current period | Amount of the previous period | Amount of the current period | Amount of the previous period | Amount of the current period | Amount of the previous period | Amount of the current period | Amount of the previous period | Amount of the current period | Amount of the previous period | ||
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 275,01 2.28 | 275,01 2.28 | ||||||||
(3) Remuneration of key management personnel
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Total remuneration | 4,198,071.27 | 3,165,800.00 |
6. Receivables and payables of related parties
(1) Receivables: None
(2) Payables
In RMB
| Name of item | Related parties | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Accounts payable | Hangzhou Yuhang Yaguang Spray Coating Factory | 2,391,109.79 | 3,543,430.78 |
| Accounts payable | Hangzhou Yuhang Robam Fuel Station Co., Ltd. | 2,272,284.87 | 1,723,356.74 |
| Accounts payable | Hangzhou Guoguang Touring Commodity Co., Ltd. | 24,000.00 | 23,605.20 |
| Accounts payable | Hangzhou Amblem Household Co., Ltd. | 873,629.56 | |
| Accounts payable | Hangzhou Small Planter Technology Co., Ltd. | 925,935.50 | |
| Accounts payable | Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. | 328,876.46 | |
| Other payables | Hangzhou Yuhang Yaguang Spray Coating Factory | 200,000.00 | 200,000.00 |
| Other payables | Hangzhou Guoguang Touring Commodity Co., Ltd. | 2,000.00 | 2,000.00 |
- 123 -
Accounts received inadvance
| Accounts received in advance | Hangzhou Linping ROBAM Charity Foundation | 380,400.00 |
XIII. Share Payment
1. Overview of share payment
□Applicable √Not applicable
2. Equity-settled share payment
□Applicable √Not applicable
3. Cash-settled share payment
□Applicable √Not applicable
4. Modification and termination of share payment
5. Others
XIV. Commitments and contingencies
1. Major commitments
Major commitments on the balance sheet dateThe Company has made a capital contribution of RMB 4.0 million to Zhejiang Tingshuo Brand Operation and Management Co., Ltd.,an associate company, and has made a paid-up capital contribution of RMB 2.0 million, representing 40% of the equity, with RMB 2.0million still outstanding. In addition to the above commitments, as of the day of submission of the Financial Statements, the Companyhas no other major commitments.
2. Contingencies
(1) Major contingencies on the balance sheet date
As of June 30, 2022, the Company has no major contingencies that need to be disclosed
(2) It is also necessary to make it clear hereby that the Company has no major contingencies that need to be
disclosed.
The Company has no major contingency that need to be disclosed.
XV. Events After the Balance Sheet Date
As of June 30, 2022, the Company has no events after the Balance Sheet date to be disclosed.
XVI. Other Significant Events
On April 14, 2021, the Company held the Fourth Meeting of the Fifth Session of the Board of Directors, and deliberated andadopted relevant proposals such as Business Partner Stock Ownership Plan (Draft) and 2021 Stock Option Incentive Plan (Draft). It wasdecided to take the operating income and net profit attributable to the mother company after deducting non-recurring gains and lossesfrom 2021 to 2023 as the main performance appraisal target, to implement the Business Partner Stock Ownership Plan for the coremanagement personnel of the Company (including subsidiaries) who play an important role in the overall performance anddevelopment of the Company, including directors (excluding independent directors), general managers, deputy general managers, seniordirectors and directors, and to provide stock option incentives for 142 middle management personnel and core technical (business)backbone of the Company.
On April 30, 2021, the first extraordinary general meeting of shareholders of the Company in 2021 deliberated and adopted theabove proposals, and determined May 10, 2021 as the first grant date of stock options under this Stock Option Incentive Plan, with
3,130,000 stock options granted and 138 persons granted in 2021.
The Company used the internationally accepted Black-Scholes Option Pricing Model to estimate the fair value of the stockoptions granted for the first time under this Plan. The amount of the services obtained in the current period included in the related costsand capital reserve was RMB 2,422,022.38.
On March 31, 2022, the Company held the Ninth Meeting of the Fifth Session of the Board of Directors, and deliberated andadopted relevant proposals such as the 2022 Stock Option Incentive Plan (Draft). It was decided to take the operating income from 2022to 2024 as the main performance appraisal target, and to provide stock option incentives for 285 middle management personnel and coretechnical (business) backbone of the Company.
On April 21, 2022, the first extraordinary general meeting of shareholders of the Company in 2022 deliberated and adopted theabove proposals, and determined May 10, 2022 as the first grant date of stock options under this Stock Option Incentive Plan, with4,810,000 stock options granted and 285 persons granted in 2022.
On May 26, 2022, the Company completed the registration of the grant of the Stock Option Incentive Plan. As the departedemployees did not have the qualification of incentive targets, the number of incentive targets actually granted under this Stock OptionIncentive Plan was adjusted from 285 to 282, and the total number of stock options actually granted was adjusted from 4.81 million to
4.78 million, accounting for 0.50% of the current total capital stock of the Company.
The Company used the internationally accepted Black-Scholes Option Pricing Model to estimate the fair value of the stockoptions granted for the first time under this Plan. The amount of the services obtained in the current period included in the related costsand capital reserve was RMB 1,576,343.89.As of June 30, 2022, the Company has no other significant events that need to be disclosed.
XVII. Notes to Main Items of the Financial Statements of the Parent Company
1. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
- 124 -Type
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 791,884 ,407.62 | 33.47% | 704,414 ,394.12 | 88.95% | 87,470, 013.50 | 628,127 ,248.06 | 29.39% | 551,636 ,286.07 | 87.82% | 76,490, 961.99 |
| Including: | ||||||||||
- 125 -
Provision byindividualitem
| Provision by individual item | 791,884 ,407.62 | 33.47% | 704,414 ,394.12 | 88.95% | 87,470, 013.50 | 628,127 ,248.06 | 29.39% | 551,636 ,286.07 | 87.82% | 76,490, 961.99 |
| Accounts receivable with a collective bad debt provision | 1,573,8 14,171. 66 | 66.53% | 93,580, 584.45 | 5.95% | 1,480,2 33,587. 21 | 1,509,3 21,539. 72 | 70.61% | 89,120, 674.12 | 5.90% | 1,420,2 00,865. 60 |
| Including: | ||||||||||
| Accounts receivable grouped according to related parties | 49,434, 128.61 | 2.09% | 0.00% | 49,434, 128.61 | 13,799, 399.00 | 0.64% | 13,799, 399.00 | |||
| Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision | 1,524,3 80,043. 05 | 64.44% | 93,580, 584.45 | 6.14% | 1,430,7 99,458. 60 | 1,495,5 22,140. 72 | 69.97% | 89,120, 674.12 | 5.96% | 1,406,4 01,466. 60 |
| Total | 2,365,6 98,579. 28 | 100.00% | 797,994 ,978.57 | 33.73% | 1,567,7 03,600. 71 | 2,137,4 48,787. 78 | 100.00% | 640,756 ,960.19 | 29.98% | 1,496,6 91,827. 59 |
Individual bad debt provision: Provision for bad debts by individual item
In RMB
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Name
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
| Unit 1 | 613,202,711.42 | 613,202,711.42 | 100.00% | Debt default |
| Unit 2 | 68,795,196.31 | 13,759,039.26 | 20.00% | Debt rollover |
| Unit 3 | 27,760,507.34 | 19,432,355.14 | 70.00% | Full recovery is expected to be difficult |
| Unit 4 | 20,766,804.51 | 14,536,763.16 | 70.00% | Full recovery is expected to be difficult |
| Unit 5 | 19,980,052.93 | 13,986,037.05 | 70.00% | Full recovery is expected to be difficult |
| Unit 6 | 14,247,715.67 | 9,973,400.97 | 70.00% | Full recovery is expected to be difficult |
| Unit 7 | 9,243,574.60 | 6,470,502.22 | 70.00% | Full recovery is expected to be difficult |
| Unit 8 | 8,070,171.98 | 5,649,120.39 | 70.00% | Full recovery is expected to be difficult |
| Unit 9 | 3,654,431.88 | 2,558,102.32 | 70.00% | Full recovery is expected to be difficult |
| Unit 10 | 2,887,210.93 | 2,021,047.65 | 70.00% | Full recovery is expected to be difficult |
| Unit 11 | 1,773,645.05 | 1,773,645.05 | 100.00% | Debt default |
| Unit 12 | 1,502,385.00 | 1,051,669.49 | 70.00% | Full recovery is expected to be difficult |
| Total | 791,884,407.62 | 704,414,394.12 | ||
Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics,their bad debts are provided for collectively.
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Within 1 year | 1,262,166,953.38 | 63,108,347.67 | 5.00% |
| 1--2 years | 243,801,231.91 | 24,380,123.19 | 10.00% |
| 2--3 years | 12,395,441.23 | 2,479,088.25 | 20.00% |
| 3--4 years | 4,531,460.52 | 2,265,730.26 | 50.00% |
| 4--5 years | 688,304.63 | 550,643.70 | 80.00% |
| More than 5 years | 796,651.38 | 796,651.38 | 100.00% |
| Total | 1,524,380,043.05 | 93,580,584.45 | |
Collective bad debt provision: Accounts receivable grouped according to related parties with a collective bad debt provision
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Accounts receivable grouped according to related parties | 49,434,128.61 | ||
| Total | 49,434,128.61 | ||
If the bad debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to thedisclosure methods of other receivables to disclose the relevant information about the provision for bad debts:
□Applicable √Not applicable
Disclosed based on the aging of receivables
In RMB
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Aging
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,524,263,631.65 |
| Within 1 year (including 1 year) | 1,524,263,631.65 |
| 1-2 years | 668,877,985.79 |
| 2-3 years | 164,117,526.11 |
| More than 3 years | 8,439,435.73 |
| 3-4 years | 6,805,809.32 |
| 4-5 years | 836,975.03 |
| More than 5 years | 796,651.38 |
| Total | 2,365,698,579.28 |
(2) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt reserves for accounts receivable | 640,756,960.19 | 183,880,301.16 | 26,642,282.78 | 797,994,978.57 | ||
| Total | 640,756,960.19 | 183,880,301.16 | 26,642,282.78 | 797,994,978.57 | ||
(3) Top five debtors with the biggest ending balances of receivables
In RMB
| Unit | Ending balance of accounts receivable | Proportion in the total ending balance of accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | 614,426,565.71 | 25.97% | 37,344,885.46 |
| Unit 2 | 422,007,941.34 | 17.84% | 422,007,941.34 |
| Unit 3 | 95,125,955.20 | 4.02% | 95,125,955.20 |
| Unit 4 | 68,013,931.65 | 2.88% | 3,400,696.58 |
| Unit 5 | 55,059,796.18 | 2.33% | 2,752,989.81 |
| Total | 1,254,634,190.08 | 53.04% |
2. Other receivables
In RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 92,064,235.68 | 66,149,239.78 |
| Total | 92,064,235.68 | 66,149,239.78 |
(1) Other receivables
1) Classification of other receivables by nature
In RMB
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Nature of receivable
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Collections by a third party | 61,100,121.97 | 39,389,486.99 |
| Security/guarantee deposits | 29,918,951.94 | 41,547,121.13 |
| Related transactions | 4,064,000.00 | 4,064,000.00 |
| Withholdings | 5,433,817.70 | 2,646,050.39 |
| Cash reserve | 5,764,647.00 | 966,513.08 |
| Others | 3,607,713.93 | 6,021.99 |
| Total | 109,889,252.54 | 88,619,193.58 |
2) Bad debt provision
In RMB
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
| Balance on January 1, 2022 | 22,469,953.80 | 22,469,953.80 | ||
| Balance on January 1, 2022 in the current period | ||||
| Provision in the current period | -4,644,936.94 | -4,644,936.94 | ||
| Balance on June 30, 2022 | 17,825,016.86 | 17,825,016.86 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable √ Not applicable
Disclosed based on the aging of receivables
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 87,599,700.03 |
| Within 1 year (including 1 year) | 87,599,700.03 |
| 1-2 years | 6,163,068.61 |
| 2-3 years | 1,935,029.70 |
| More than 3 years | 14,191,454.20 |
| 3-4 years | 3,004,501.80 |
| 4-5 years | 1,234,124.00 |
| More than 5 years | 9,952,828.40 |
| Total | 109,889,252.54 |
3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
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Bad debt provision for otherreceivables
| Bad debt provision for other receivables | 22,469,953.80 | -4,644,936.94 | 17,825,016.86 | |||
| Total | 22,469,953.80 | -4,644,936.94 | 17,825,016.86 |
4) Top five debtors with the biggest ending balances of other receivables
In RMB
| Unit | Nature of receivable | Ending balance | Aging | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Unit 1 | Collections by a third party | 27,716,044.47 | Within 1 year | 25.22% | 1,385,802.22 |
| Unit 2 | Withholdings | 5,416,389.09 | Within 1 year | 4.93% | 270,819.45 |
| Unit 3 | Security/guarantee deposits | 4,928,000.00 | More than 5 years | 4.48% | 4,928,000.00 |
| Unit 4 | Borrowings | 4,064,000.00 | More than 5 years | 3.70% | 4,064,000.00 |
| Unit 5 | Security/guarantee deposits | 1,660,000.00 | Within 1 year | 1.51% | 83,000.00 |
| Total | 43,784,433.56 | 39.84% | 10,731,621.67 |
3. Long-term equity investment
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investments in subsidiaries | 257,215,768.06 | 20,400,000.00 | 236,815,768.06 | 257,032,370.17 | 20,400,000.00 | 236,632,370.17 |
| Investments in joint ventures and associated companies | 2,457,242.59 | 0.00 | 2,457,242.59 | 5,405,129.91 | 0.00 | 5,405,129.91 |
| Total | 259,673,010.65 | 20,400,000.00 | 239,273,010.65 | 262,437,500.08 | 20,400,000.00 | 242,037,500.08 |
(1) Investment in subsidiaries
In RMB
| Investee | Beginning balance (book value) | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||
| Additional investment | Negative investment | Provision for impairment | Other | ||||
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 162,320,000.00 | 162,320,000.00 | |||||
| Hangzhou MingQi Electric Co., Ltd. | 52,028,217.25 | 183,397.89 | 52,211,615.14 | ||||
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De DietrichHouseholdAppliances Trading(Shanghai) Co.,Ltd.
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 630,900.00 | 630,900.00 | 20,400,000.00 | ||||
| Shanghai Robam Appliances Sales Co., Ltd. | 5,838,272.10 | 5,838,272.10 | |||||
| Beijing Robam Appliances Sales Co., Ltd. | 5,814,980.82 | 5,814,980.82 | |||||
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Total | 236,632,370.17 | 183,397.89 | 236,815,768.06 | 20,400,000.00 |
(2) Investment in joint ventures and associated companies
In RMB
| Investee | Beginning balance (book value) | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive income | Other changes in equity | Cash dividends or profits declare d and distributed | Provision for impairment | Other | ||||
| I. Joint venture | |||||||||||
| De Dietrich Trade (Shanghai) Co., Ltd. | 3,661,700.03 | -2,538,958.01 | 1,122,742.02 | ||||||||
| Subtotal | 3,661,700.03 | -2,538,958.01 | 1,122,742.02 | ||||||||
| II. Associated companies | |||||||||||
| Zhejiang Tingshuo Brand Operation and Management Co., Ltd. | 1,743,429.88 | -408,929.31 | 1,334,500.57 | ||||||||
| Subtotal | 1,743,429.88 | -408,929.31 | 1,334,500.57 | ||||||||
| Total | 5,405,129.91 | -2,947,887.32 | 2,457,242.59 | 0.00 | |||||||
4. Operating income and operating cost
In RMB
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Item
| Item | Amount of the current period | Amount of the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,044,712,473.72 | 2,113,758,543.93 | 3,860,204,084.81 | 1,841,874,747.10 |
| Other businesses | 114,887,076.86 | 33,163,443.14 | 97,090,873.20 | 25,560,127.41 |
| Total | 4,159,599,550.58 | 2,146,921,987.07 | 3,957,294,958.01 | 1,867,434,874.51 |
5. Investment income
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from long-term equity investments accounted for using the equity method | -2,947,887.32 | -1,440,070.07 |
| Investment income during holding of financial assets for trading | 20,586,968.04 | 53,886,727.88 |
| Total | 17,639,080.72 | 52,446,657.81 |
6. Others
XVIII. Supplementary Information
1. Breakdown of non-recurring profits and losses in the current period
√Applicable □Not applicable
In RMB
| Item | Amount | Description |
| Gains and losses from disposal of non-current assets | -34,179.72 | |
| Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) | 70,291,099.51 | |
| Reversal of provision for impairment of receivables separately tested for impairment | 35,248,286.47 | |
| Other non-operating income and expenses except the above items | 1,209,871.06 | |
| Less: Affected amount of income tax | 16,069,241.63 | |
| Affected amount of minority shareholders’ equity | 2,941,538.51 | |
| Total | 87,704,297.18 | -- |
Other items of gains and losses meeting the definition of non-recurring gains and losses:
□Applicable √Not applicable
The Company does not have other items of gains and losses meeting the definition of non-recurring gains and losses.Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred to as“Announcement No.1”) are defined as recurring gains and losses
□Applicable √Not applicable
2. Return on equity and earnings per share (EPS)
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Profit within the Reporting Period
| Profit within the Reporting Period | Weighted average return on net assets | EPS | |
| Basic earnings per share (EPS) (RMB/share) | Diluted EPS (RMB/share) | ||
| Net profit attributable to common stockholders of the Company | 8.05% | 0.76 | 0.76 |
| Net profit attributable to common shareholders of the Company after deducting non-recurring profits and losses | 9.49% | 0.83 | 0.83 |
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profits and net assets in the Financial Reports disclosed as per the IAS and CAS
□Applicable √Not applicable
(2) Differences of net profits and net assets in the Financial Reports disclosed as per the foreign accounting
standard and CAS
□Applicable √Not applicable
(3) Explanation on the reasons for accounting data differences under domestic and foreign accounting
standards shall be made, and where data audited by an overseas audit institution has been adjusted based onthe differences, the name of the overseas audit institution shall be indicated.