Financial Report
I. Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB1. Consolidated Balance SheetPrepared by Wuxi Little Swan Company Limited
Unit: RMB
| Item | 30 June 2018 | 31 December 2017 |
| Current assets: | ||
| Monetary assets | 1,704,230,864.24 | 1,588,264,516.05 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Financial assets at fair value through profit or loss | 5,270,238.03 | |
| Derivative financial assets | ||
| Notes receivable | 1,176,200,901.21 | 1,283,192,684.28 |
| Accounts receivable | 1,977,970,373.74 | 1,736,724,496.10 |
| Prepayments | 152,336,504.11 | 84,346,792.38 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Interest receivable | 179,688,607.69 | 60,943,907.98 |
| Dividends receivable | ||
| Other receivables | 34,741,255.89 | 47,224,454.09 |
| Financial assets purchased under resale agreements | ||
| Inventories | 586,403,967.09 | 1,980,766,196.14 |
| Assets classified as held for sale |
| Current portion of non-current assets | ||
| Other current assets | 11,926,962,399.50 | 12,778,240,745.22 |
| Total current assets | 17,738,534,873.47 | 19,564,974,030.27 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Available-for-sale financial assets | 200,000.00 | 200,000.00 |
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | ||
| Investment property | 59,769,771.00 | 61,695,825.00 |
| Fixed assets | 1,064,376,016.22 | 1,029,668,355.84 |
| Construction in progress | 39,728,931.02 | 37,972,252.60 |
| Engineering materials | ||
| Proceeds from disposal of fixed assets | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Intangible assets | 184,434,179.99 | 187,045,347.27 |
| R&D expense | ||
| Goodwill | ||
| Long-term prepaid expense | 26,391,575.09 | 22,382,020.52 |
| Deferred income tax assets | 380,061,339.65 | 407,151,474.64 |
| Other non-current assets | 56,029,381.55 | 27,331,937.53 |
| Total non-current assets | 1,810,991,194.52 | 1,773,447,213.40 |
| Total assets | 19,549,526,067.99 | 21,338,421,243.67 |
| Current liabilities: | ||
| Short-term borrowings | 81,393,672.34 | |
| Borrowings from central bank | ||
| Customer deposits and deposits from banks and other financial institutions | ||
| Interbank loans obtained | ||
| Financial liabilities at fair value through profit or loss | 4,800,613.47 | |
| Derivative financial liabilities | ||
| Notes payable | 3,915,720,273.53 | 2,805,804,600.41 |
| Accounts payable | 2,809,609,738.57 | 3,827,025,700.10 |
| Advances from customers | 828,133,123.71 | 3,065,815,801.93 |
| Financial assets sold under repurchase agreements | ||
| Handling charges and commissions payable | ||
| Payroll payable | 257,127,334.88 | 349,483,844.76 |
| Taxes payable | 426,592,631.50 | 638,017,523.31 |
| Interest payable | ||
| Dividends payable | 9,049,503.92 | 6,996,784.06 |
| Other payables | 185,057,430.91 | 221,120,863.48 |
| Reinsurance payables | ||
| Insurance contract reserve | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 2,476,199,672.19 | 2,107,700,604.61 |
| Total current liabilities | 10,912,290,322.68 | 13,103,359,395.00 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Long-term payables | ||
| Long-term payroll payable | 10,291,652.87 | 12,021,620.17 |
| Specific payables | ||
| Provisions | 2,157,992.76 | 2,253,082.25 |
| Deferred income | 2,262,533.19 | 2,489,133.21 |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 14,712,178.82 | 16,763,835.63 |
| Total liabilities | 10,927,002,501.50 | 13,120,123,230.63 |
| Owners’ equity: | ||
| Share capital | 632,487,764.00 | 632,487,764.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds |
| Capital reserves | 1,296,794,069.01 | 1,252,947,546.80 |
| Less: Treasury shares | ||
| Other comprehensive income | 28,544,268.12 | 40,496,366.85 |
| Specific reserve | ||
| Surplus reserves | 332,594,722.29 | 332,594,722.29 |
| General reserve | ||
| Retained profits | 5,058,123,683.45 | 4,788,564,401.03 |
| Total equity attributable to owners of the Company as the parent | 7,348,544,506.87 | 7,047,090,800.97 |
| Non-controlling interests | 1,273,979,059.62 | 1,171,207,212.07 |
| Total owners’ equity | 8,622,523,566.49 | 8,218,298,013.04 |
| Total liabilities and owners’ equity | 19,549,526,067.99 | 21,338,421,243.67 |
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 30 June 2018 | 31 December 2017 |
| Current assets: | ||
| Monetary assets | 642,107,101.53 | 1,030,061,384.78 |
| Financial assets at fair value through profit or loss | 3,724,810.47 | |
| Derivative financial assets | ||
| Notes receivable | 730,830,976.20 | 938,342,347.95 |
| Accounts receivable | 1,806,817,821.81 | 2,805,194,600.27 |
| Prepayments | 106,050,805.01 | 67,278,861.92 |
| Interest receivable | 117,300,028.26 | 32,913,208.23 |
| Dividends receivable | ||
| Other receivables | 21,922,908.39 | 28,973,048.36 |
| Inventories | 365,685,219.33 | 1,206,334,183.68 |
| Assets classified as held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 7,821,975,278.04 | 7,259,605,039.27 |
| Total current assets | 11,612,690,138.57 | 13,372,427,484.93 |
| Non-current assets: | ||
| Available-for-sale financial assets | 150,000.00 | 150,000.00 |
| Held-to-maturity investments | ||
| Long-term receivables |
| Long-term equity investments | 958,235,041.57 | 958,235,041.57 |
| Investment property | 7,703,668.04 | 7,882,440.32 |
| Fixed assets | 559,225,207.15 | 532,803,209.18 |
| Construction in progress | 39,078,412.10 | 37,321,733.68 |
| Engineering materials | ||
| Proceeds from disposal of fixed assets | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Intangible assets | 88,555,717.18 | 89,900,867.32 |
| R&D expense | ||
| Goodwill | ||
| Long-term prepaid expense | 8,692,674.82 | 5,905,684.35 |
| Deferred income tax assets | 242,914,956.98 | 225,186,332.58 |
| Other non-current assets | 29,776,415.75 | 17,138,349.61 |
| Total non-current assets | 1,934,332,093.59 | 1,874,523,658.61 |
| Total assets | 13,547,022,232.16 | 15,246,951,143.54 |
| Current liabilities: | ||
| Short-term borrowings | 16,806,882.34 | |
| Financial liabilities at fair value through profit or loss | 2,287,302.98 | |
| Derivative financial liabilities | ||
| Notes payable | 2,388,399,378.38 | 1,678,546,630.26 |
| Accounts payable | 3,561,506,900.23 | 4,395,361,312.16 |
| Advances from customers | 453,158,337.38 | 1,862,974,982.38 |
| Payroll payable | 192,419,861.91 | 268,065,495.23 |
| Taxes payable | 267,379,270.73 | 353,920,883.93 |
| Interest payable | ||
| Dividends payable | 9,049,503.92 | 6,996,784.06 |
| Other payables | 117,503,996.19 | 146,982,721.63 |
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 1,459,958,436.52 | 1,336,384,942.60 |
| Total current liabilities | 8,451,662,988.24 | 10,066,040,634.59 |
| Non-current liabilities: | ||
| Long-term borrowings |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Long-term payables | ||
| Long-term payroll payable | ||
| Specific payables | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | ||
| Total liabilities | 8,451,662,988.24 | 10,066,040,634.59 |
| Owners’ equity: | ||
| Share capital | 632,487,764.00 | 632,487,764.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,444,087,483.55 | 1,405,575,239.68 |
| Less: Treasury shares | ||
| Other comprehensive income | 17,203,068.47 | 27,970,054.39 |
| Specific reserve | ||
| Surplus reserves | 319,944,578.39 | 319,944,578.39 |
| Retained profits | 2,681,636,349.51 | 2,794,932,872.49 |
| Total owners’ equity | 5,095,359,243.92 | 5,180,910,508.95 |
| Total liabilities and owners’ equity | 13,547,022,232.16 | 15,246,951,143.54 |
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Revenue | 12,056,938,286.05 | 10,568,060,854.21 |
| Including: Operating revenue | 12,056,938,286.05 | 10,568,060,854.21 |
| Interest income | ||
| Premium income | ||
| Handling charge and commission income |
| 2. Operating costs and expenses | 10,930,076,719.93 | 9,801,989,312.87 |
| Including: Cost of sales | 8,849,801,833.02 | 7,861,371,811.78 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surtaxes | 66,817,703.11 | 64,532,273.74 |
| Selling expense | 1,769,706,658.94 | 1,533,889,871.40 |
| Administrative expense | 451,163,055.68 | 328,163,105.40 |
| Finance costs | -231,352,118.98 | -23,523,197.84 |
| Asset impairment loss | 23,939,588.16 | 37,555,448.39 |
| Add: Gain on changes in fair value (“-” for loss) | -10,070,851.50 | 4,917,873.13 |
| Investment income (“-” for loss) | 76,902,741.54 | 181,665,882.11 |
| Including: Share of profit or loss of joint ventures and associates | ||
| Foreign exchange gain (“-” for loss) | ||
| Asset disposal income (“-” for loss) | 634,455.90 | |
| Other income | 27,971,652.00 | 15,806,553.77 |
| 3. Operating profit (“-” for loss) | 1,222,299,564.06 | 968,461,850.35 |
| Add: Non-operating income | 7,366,461.87 | 15,623,753.30 |
| Less: Non-operating expense | 790,740.84 | 3,079,657.86 |
| 4. Profit before taxation (“-” for loss) | 1,228,875,285.09 | 981,005,945.79 |
| Less: Income tax expense | 225,410,775.48 | 148,245,695.78 |
| 5. Net profit (“-” for net loss) | 1,003,464,509.61 | 832,760,250.01 |
| 5.1 Net profit from continuing operations (“-” for net loss) | 1,003,464,509.61 | 832,760,250.01 |
| 5.2 Net profit from discontinued operations (“-” for net loss) | ||
| Net profit attributable to owners of the Company as the parent | 902,047,046.42 | 731,540,502.47 |
| Net profit attributable to non-controlling interests | 101,417,463.19 | 101,219,747.54 |
| 6. Other comprehensive income, net of tax | -12,473,938.60 | -32,416,277.72 |
| Attributable to owners of the Company as the parent | -11,952,098.73 | -27,421,035.91 |
| 6.1 Items that will not be reclassified to profit or loss | ||
| 6.1.1 Changes in net liabilities or assets caused by remeasurements on defined benefit pension schemes |
| 6.1.2 Share of other comprehensive income of investees that will not be reclassified to profit or loss under equity method | ||
| 6.2 Items that may subsequently be reclassified to profit or loss | -11,952,098.73 | -27,421,035.91 |
| 6.2.1 Share of other comprehensive income of investees that will be reclassified to profit or loss under equity method | ||
| 6.2.2 Gain/Loss on changes in fair value of available-for-sale financial assets | -11,954,415.00 | -27,414,609.36 |
| 6.2.3 Gain/Loss arising from reclassification of held-to-maturity investments to available-for-sale financial assets | ||
| 6.2.4 Effective gain/loss on cash flow hedges | ||
| 6.2.5 Differences arising from translation of foreign currency-denominated financial statements | 2,316.27 | -6,426.55 |
| 6.2.6 Other | ||
| Attributable to non-controlling interests | -521,839.87 | -4,995,241.81 |
| 7. Total comprehensive income | 990,990,571.01 | 800,343,972.29 |
| Attributable to owners of the Company as the parent | 890,094,947.69 | 704,119,466.56 |
| Attributable to non-controlling interests | 100,895,623.32 | 96,224,505.73 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 1.43 | 1.16 |
| 8.2 Diluted earnings per share | 1.43 | 1.16 |
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Operating revenue | 8,455,200,768.71 | 7,759,223,092.31 |
| Less: Cost of sales | 6,418,259,181.32 | 5,996,000,032.58 |
| Taxes and surtaxes | 41,081,819.40 | 44,435,454.94 |
| Selling expense | 1,201,302,691.12 | 1,018,772,573.33 |
| Administrative expense | 363,636,150.54 | 270,135,520.31 |
| Finance costs | -140,156,569.84 | -28,038,916.25 |
| Asset impairment loss | 4,306,909.22 | 15,145,318.12 |
| Add: Gain on changes in fair value (“-” for loss) | -6,012,113.45 | 4,277,601.99 |
| Investment income (“-” for loss) | 47,856,987.09 | 93,359,516.82 |
| Including: Share of profit or loss of joint ventures and associates | ||
| Asset disposal income (“-” for loss) | -423,677.25 | |
| Other income | 2,828,142.34 |
| 2. Operating profit (“-” for loss) | 611,019,925.69 | 540,410,228.09 |
| Add: Non-operating income | 6,052,314.08 | 8,461,114.95 |
| Less: Non-operating expense | 662,692.00 | 1,598,940.52 |
| 3. Profit before taxation (“-” for loss) | 616,409,547.77 | 547,272,402.52 |
| Less: Income tax expense | 97,218,306.75 | 85,606,709.99 |
| 4. Net profit (“-” for net loss) | 519,191,241.02 | 461,665,692.53 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 519,191,241.02 | 461,665,692.53 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -10,766,985.93 | -15,363,138.05 |
| 5.1 Items that will not be reclassified to profit or loss | ||
| 5.1.1 Changes in net liabilities or assets caused by remeasurements on defined benefit pension schemes | ||
| 5.1.2 Share of other comprehensive income of investees that will not be reclassified into profit or loss under equity method | ||
| 5.2 Items that may subsequently be reclassified to profit or loss | -10,766,985.93 | -15,363,138.05 |
| 5.2.1 Share of other comprehensive income of investees that will be reclassified into profit or loss under equity method | ||
| 5.2.2 Gain/Loss on changes in fair value of available-for-sale financial assets | -10,766,985.93 | -15,363,138.05 |
| 5.2.3 Gain/Loss arising from reclassification of held-to-maturity investments to available-for-sale financial assets | ||
| 5.2.4 Effective gain/loss on cash flow hedges | ||
| 5.2.5 Differences arising from translation of foreign currency-denominated financial statements | ||
| 5.2.6 Other | ||
| 6. Total comprehensive income | 508,424,255.09 | 446,302,554.48 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 7,969,115,684.30 | 6,722,546,282.77 |
| Net increase in customer deposits and deposits from banks and other financial institutions |
| Net increase in loans from central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Net increase in proceeds from disposal of financial assets at fair value through profit or loss | ||
| Interest, handling charges and commissions received | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Tax rebates | 18,677,078.35 | 35,550,472.93 |
| Cash generated from other operating activities | 65,692,959.29 | 46,492,111.69 |
| Subtotal of cash generated from operating activities | 8,053,485,721.94 | 6,804,588,867.39 |
| Payments for commodities and services | 6,150,288,344.76 | 4,509,538,095.07 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and for employees | 782,742,734.50 | 620,865,515.47 |
| Taxes paid | 676,009,928.86 | 472,145,836.29 |
| Cash used in other operating activities | 271,215,691.41 | 1,344,450,112.80 |
| Subtotal of cash used in operating activities | 7,880,256,699.53 | 6,946,999,559.63 |
| Net cash generated from/used in operating activities | 173,229,022.41 | -142,410,692.24 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestments | 7,685,000,000.00 | 2,895,000,000.00 |
| Investment income | 76,902,741.54 | 181,837,920.52 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-lived assets | 1,793,467.10 | 723,271.02 |
| Net proceeds from disposal of subsidiaries or other business units | 2,415,000.00 | |
| Cash generated from other investing activities | 111,282,573.06 | 16,802,196.35 |
| Subtotal of cash generated from investing activities | 7,874,978,781.70 | 3,096,778,387.89 |
| Payments for acquisition of fixed assets, intangible assets and other long-lived assets | 190,893,692.74 | 79,751,100.92 |
| Payments for investments | 7,050,000,000.00 | 3,465,000,000.00 |
| Net increase in pledged loans granted | ||
| Net payments for acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 7,240,893,692.74 | 3,544,751,100.92 |
| Net cash generated from/used in investing activities | 634,085,088.96 | -447,972,713.03 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Increase in borrowings obtained | 170,000,000.00 | |
| Net proceeds from issuance of bonds | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 170,000,000.00 | |
| Repayment of borrowings | 81,393,672.34 | 183,813,064.12 |
| Payments for interest and dividends | 644,659,161.07 | 470,510,888.90 |
| Including: Dividends paid by subsidiaries to non-controlling interests | ||
| Cash used in other financing activities | ||
| Subtotal of cash used in financing activities | 726,052,833.41 | 654,323,953.02 |
| Net cash generated from/used in financing activities | -726,052,833.41 | -484,323,953.02 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -2,843,992.20 | |
| 5. Net increase in cash and cash equivalents | 78,417,285.76 | -1,074,707,358.29 |
| Add: Cash and cash equivalents, beginning of the period | 1,417,489,071.71 | 4,171,689,917.21 |
| 6. Cash and cash equivalents, end of the period | 1,495,906,357.47 | 3,096,982,558.92 |
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 6,468,247,142.50 | 5,000,964,767.84 |
| Tax rebates | ||
| Cash generated from other operating activities | 17,928,127.28 | 20,559,743.51 |
| Subtotal of cash generated from operating activities | 6,486,175,269.78 | 5,021,524,511.35 |
| Payments for commodities and services | 4,428,038,167.84 | 3,201,385,866.98 |
| Cash paid to and for employees | 558,115,177.17 | 439,863,524.85 |
| Taxes paid | 358,960,977.35 | 284,758,489.88 |
| Cash used in other operating activities | 214,338,314.97 | 905,013,311.49 |
| Subtotal of cash used in operating activities | 5,559,452,637.33 | 4,831,021,193.20 |
| Net cash generated from/used in operating activities | 926,722,632.45 | 190,503,318.15 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestments | 3,935,000,000.00 | 1,625,000,000.00 |
| Investment income | 47,856,987.09 | 92,023,835.23 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-lived assets | 269,811.40 | 192,710.01 |
| Net proceeds from disposal of subsidiaries or other business units | 2,415,000.00 | |
| Cash generated from other investing activities | 55,212,504.56 | 13,702,196.35 |
| Subtotal of cash generated from investing activities | 4,038,339,303.05 | 1,733,333,741.59 |
| Payments for acquisition of fixed assets, intangible assets and other long-lived assets | 129,504,678.24 | 31,162,375.53 |
| Payments for investments | 4,600,000,000.00 | 1,895,000,000.00 |
| Net payments for acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 4,729,504,678.24 | 1,926,162,375.53 |
| Net cash generated from/used in investing activities | -691,165,375.19 | -192,828,633.94 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Increase in borrowings obtained | 135,000,000.00 | |
| Net proceeds from issuance of bonds | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 135,000,000.00 | |
| Repayment of borrowings | 16,806,882.34 | 123,943,093.80 |
| Payments for interest and dividends | 641,299,593.52 | 470,510,888.90 |
| Cash used in other financing activities | ||
| Sub-total of cash used in financing activities | 658,106,475.86 | 594,453,982.70 |
| Net cash generated from/used in financing activities | -658,106,475.86 | -459,453,982.70 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -2,384,725.50 | |
| 5. Net increase in cash and cash equivalents | -424,933,944.10 | -461,779,298.49 |
| Add: Cash and cash equivalents, beginning of the period | 945,759,061.62 | 2,353,708,554.75 |
| 6. Cash and cash equivalents, end of the period | 520,825,117.52 | 1,891,929,256.26 |
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
| Item | H1 2018 | ||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained profits | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||
| 1. Balances as of end of prior year | 632,487,764.00 | 1,252,947,546.80 | 40,496,366.85 | 332,594,722.29 | 4,788,564,401.03 | 1,171,207,212.07 | 8,218,298,013.04 | ||||||
| Add: Adjustments for changed accounting policies | |||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||
| Adjustments for business combinations involving enterprises under common control | |||||||||||||
| Other adjustments | |||||||||||||
| 2. Balances as of beginning of the year | 632,487,764.00 | 1,252,947,546.80 | 40,496,366.85 | 332,594,722.29 | 4,788,564,401.03 | 1,171,207,212.07 | 8,218,298,013.04 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 43,846,522.21 | -11,952,098.73 | 269,559,282.42 | 102,771,847.55 | 404,225,553.45 | ||||||||
| 3.1 Total comprehensive income | -11,952,098.73 | 902,047,046.42 | 100,895,623.32 | 990,990,571.02 | |||||||||
| 3.2 Capital increased and reduced by owners | 43,846,522.21 | 1,876,224.23 | 45,722,746.43 | ||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | 43,846,522.21 | 1,876,224.23 | 45,722,746.43 | ||||||||||
| 3.2.4 Other | |||||||||||||
| 3.3 Profit distribution | -632,487,764.00 | -632,487,764.00 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -632,487,764.00 | -632,487,764.00 | |||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Carryforwards within owners’ equity | |||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||
| 3.4.2 Increase in capital (or share |
| capital) from surplus reserves | |||||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Specific reserve | |||||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||||
| 3.5.2 Used during the period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balances as of end of the period | 632,487,764.00 | 1,296,794,069.01 | 28,544,268.12 | 332,594,722.29 | 5,058,123,683.45 | 1,273,979,059.62 | 8,622,523,566.49 |
H1 2017
Unit: RMB
| Item | H1 2017 | ||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained profits | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||
| 1. Balances as of end of prior year | 632,487,764.00 | 1,191,490,133.01 | 70,757,524.61 | 332,594,722.29 | 3,756,517,718.81 | 975,247,204.68 | 6,959,095,067.40 | ||||||
| Add: Adjustments for changed accounting policies | |||||||||||||
| Adjustments for corrections of | |||||||||||||
| previous errors | |||||||||||||
| Adjustments for business combinations involving enterprises under common control | |||||||||||||
| Other adjustments | |||||||||||||
| 2. Balances as of beginning of the year | 632,487,764.00 | 1,191,490,133.01 | 70,757,524.61 | 332,594,722.29 | 3,756,517,718.81 | 975,247,204.68 | 6,959,095,067.40 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 61,457,413.79 | -30,261,157.76 | 1,032,046,682.22 | 195,960,007.39 | 1,259,202,945.64 | ||||||||
| 3.1 Total comprehensive income | -30,261,157.76 | 1,506,412,505.22 | 192,923,009.68 | 1,669,074,357.14 | |||||||||
| 3.2 Capital increased and reduced by owners | 61,457,413.79 | 3,036,997.71 | 64,494,411.50 | ||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | 61,953,091.84 | 2,541,319.66 | 64,494,411.50 | ||||||||||
| 3.2.4 Other | -495,678.05 | 495,678.05 | |||||||||||
| 3.3 Profit distribution | -474,365,823.00 | -474,365,823.00 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||
| 3.3.3 Appropriation to owners | -474,365,823.00 | -474,365,823.00 |
| (or shareholders) | |||||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Carryforwards within owners’ equity | |||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Specific reserve | |||||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||||
| 3.5.2 Used during the period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balances as of end of the period | 632,487,764.00 | 1,252,947,546.80 | 40,496,366.85 | 332,594,722.29 | 4,788,564,401.03 | 1,171,207,212.07 | 8,218,298,013.04 |
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
| Item | H1 2018 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained profits | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | |||||||||
| 1. Balances as of end of prior year | 632,487,764.00 | 1,405,575,239.68 | 27,970,054.39 | 319,944,578.39 | 2,794,932,872.49 | 5,180,910,508.95 | |||||
| Add: Adjustments for changed accounting policies | |||||||||||
| Adjustments for corrections of previous errors | |||||||||||
| Other adjustments | |||||||||||
| 2. Balances as of beginning of the year | 632,487,764.00 | 1,405,575,239.68 | 27,970,054.39 | 319,944,578.39 | 2,794,932,872.49 | 5,180,910,508.95 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 38,512,243.87 | -10,766,985.92 | -113,296,522.98 | -85,551,265.03 | |||||||
| 3.1 Total comprehensive income | -10,766,985.92 | 519,191,241.02 | 508,424,255.10 | ||||||||
| 3.2 Capital increased and reduced by owners | 38,512,243.87 | 38,512,243.87 | |||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||
| 3.2.3 Share-based payments included in owners’ equity | 38,512,243.87 | 38,512,243.87 | |||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | -632,487,764.00 | -632,487,764.00 | |||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -632,487,764.00 | -632,487,764.00 | |||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Carryforwards within owners’ equity | |||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Specific reserve | |||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||
| 3.5.2 Used during the period | |||||||||||
| 3.6 Other | |||||||||||
| 4. Balances as of end of the period | 632,487,764.00 | 1,444,087,483.55 | 17,203,068.47 | 319,944,578.39 | 2,681,636,349.51 | 5,095,359,243.92 |
H1 2017
Unit: RMB
| Item | H1 2017 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained profits | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | |||||||||
| 1. Balances as of end of prior year | 632,487,764.00 | 1,350,656,531.65 | 37,515,343.84 | 319,944,578.39 | 2,608,364,062.12 | 4,948,968,280.00 | |||||
| Add: Adjustments for changed accounting policies | |||||||||||
| Adjustments for corrections of previous errors | |||||||||||
| Other adjustments | |||||||||||
| 2. Balances as of beginning of the year | 632,487,764.00 | 1,350,656,531.65 | 37,515,343.84 | 319,944,578.39 | 2,608,364,062.12 | 4,948,968,280.00 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 54,918,708.03 | -9,545,289.45 | 186,568,810.37 | 231,942,228.95 | |||||||
| 3.1 Total comprehensive income | -9,545,289.45 | 660,934,633.37 | 651,389,343.92 | ||||||||
| 3.2 Capital increased and reduced by owners | 54,918,708.03 | 54,918,708.03 | |||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||
| 3.2.3 Share-based payments included in owners’ equity | 54,918,708.03 | 54,918,708.03 | |||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | -474,365,823.00 | -474,365,823.00 | |||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -474,365,823.00 | -474,365,823.00 | |||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Carryforwards within owners’ equity | |||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Specific reserve | |||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||
| 3.5.2 Used during the period | |||||||||||
| 3.6 Other | |||||||||||
| 4. Balances as of end of the period | 632,487,764.00 | 1,405,575,239.68 | 27,970,054.39 | 319,944,578.39 | 2,794,932,872.49 | 5,180,910,508.95 |
III. Company Profile
Wuxi Little Swan Company Ltd. (“the Company”) was incorporated as an oriented-collection company limited
with the approval of Su-Ti-Gai-Sheng (1993) No. 253 document from Economic Reform Commission of JiangsuProvince on 29 November 1993. Then the Company domestically and publicly issued 70,000,000 shares of
B-share and transformed to a state-collectively–owned enterprise with the approval of (1996) No. 52 documentfrom Jiangsu Province of the People’s Republic of China (the “PRC”), Zheng-Wei-Fa (1996) No. 14 document
from China Securities Regulatory Commission of the State Council and Shen-Zheng-Ban-Han (1996) No. 4 fromShenzhen Municipal Securities Regulatory Office on July 1996, which amounted to RMB310 million of the share
capital of the Company after the issuance.
In March 1997, the Company domestically and publicly issued 60,000,000 shares of RMB ordinary share(including 9,000,000 shares of staff-share) with the approval of Zheng-Jian-Fa-Zi (1997) No. 55 from CSRC. Andthe total raised fund from this issuance of A-share totaled RMB720.83 million, and the Company was formallylisted in Shenzhen Stock Exchange in March 1997 with the short form of stock as Little Swan A and stock code as000418.On 20 July 2006, the proposal on the equity division reform of the Company reviewed and approved by therelevant shareholders meeting with the consideration of the non-circulating shareholders paid for the circulatingstock shareholders of the Company for acquiring the circulation right for the non-circulating shares held by them:
regarded 4 August 2006 as the shares alternation registration date as well as executed the consideration proposalby paying 2.5 shares of every 10 shares for the A shares circulating stock shareholders on 7 August 2006 and theshares with consideration listed and circulated on that date. After the execution of the above consideration of thebonus, the total amount of the shares of the Company remains the same, while the shares structurecorrespondingly changed.On 9 May 2008, the 2007 Annual General Meeting reviewed and approved the 2007 Dividend Plan: adding fiveshares to every ten shares basing on the total share capital of 365,103,840 shares at the end of 2007, transferringthe public reserves to 182,551,920 shares with par value of RMB1 per share, thus the added share capital totaledRMB182,551,920 and after which, the total share capital turned from 365,103,840 shares to 547,655,760 shares ofthe Company.According to the resolutions of the 4
th
Meeting of the 6
th
Board of Directors and The 1
st
Extraordinary GeneralMeeting of 2010, having approved by China Securities Regulatory Commission of the Reply to the Approval of
the Significant Assets Reorganization and the Purchase of the Assets of GD Midea Holding by Wuxi Little SwanCo., Ltd. (ZJXK [2010] 1577) on 9 November 2010, the company launched directional add-issuance of84,832,000.00 A shares to buy 69.47% of the shares of Hefei Midea Washing Machine Co., Ltd.(original name:
Hefei Rongshida Washing Equipment Manufacturing Co., Ltd) from its shareholder GD Midea Holding Co., Ltd..This add-issuance increased the share capital by RMB84,832,000.00After approved by CSRC through the Reply of the Approval of the Merger of GD Midea Holding by MideaGroup Co., Ltd. (ZJXK [2013] 1014 document) that issued on 29 July 2013, Midea Group had split off as well asconsolidated and combined the original controller GD Midea Holding on 18 September 2013. After theconsolidation and combination, Midea Group inherited and undertook the whole rights and obligations of thewhole assets and liabilities etc of GD Midea Holding as the reminder enterprise and had finished the relevantregistration procedures of shares transfer on 31 December 2013, and after which, Midea Group changed to be thefirst largest shareholder of the Company.By 30 June 2018, the total amount of the outstanding common shares of the company were 632,487,764 shares,among which the restricted exchange-traded A shares are 2,087,745 shares, accounting for 0.33% of the wholeshares; the unrestricted exchange-traded A shares are 439,364,147 shares, accounting for 69.47%; and theunrestricted exchange-traded B shares are 191,035,872 shares, account for 30.20% of the whole shares.Registered address of the Company and the headquarters office address is No. 18 of Changjiang South Road,
National High-tech Industrial Development Zone, Wuxi City, Jiangsu Province.
The Company and its subsidiaries belong to household appliances so the main business scope is as follows:
manufacture and sales as well as after-sale service of household appliances, industrial ceramics, environmentaldry-cleaning equipment, cleaning mechanical equipment, subsequent finishing equipment and accessory; cleaning
service; machinery processing; import and export business of “Little Swan” or agent products and technologies
(excluding the products or technology restricted to operate, export or import in China); technical service forhousehold appliances; contracting foreign engineering in international bidding (operate with effective certificate);
used self-owned funds to investment in financial industry.
The financial statements were approved and authorized for issue by the Board of Directors on the date of 6 August2018.For the major subsidiaries that included in the consolidated scope of the Reporting Period, please refer to the
Notes IX.
IV. Basis for the Preparation of Financial Statements
1. Preparation BasisThe financial report compiled according to the ASBE-Basic Criterion issued by Ministry of Finance on 15
February 2006 and the follow-up periods, each specific accounting criterions as well as the relevant regulations
(hereinafter referred to as a whole of “ASBE) and the Compilation Rules for Information Disclosure byCompanies Offering Securities to the Public No. 15 – General Provisions on Financial Reports (2014 Revision)
issued by the China Securities Regulatory Commission (CSRC).2. ContinuationThe financial report compiled based on the continuation.
V. Important Accounting Policies and Estimations
1. Statement of Compliance with Enterprise Accounting StandardsThe 2018 interim financial statements of the Company comply with the requirements of Accounting Standards
with the merger on 30 June 2018 and the Company’s financial conditions as well as the relevant information of the
semi-annual merger of Y2018 and the operation results and the cash flow of the Company are truly andcompletely disclosed in the financial statements.
2. Accounting Period
The Company’s accounting year is from January 1st to December 31st for each calendar year.
3. Fiscal PeriodThe fiscal periods of an enterprise includes fiscal years and fiscal periods shorter than a complete fiscal year. The
fiscal period of the Company is 12 months.4. Recording CurrencyThe recording currency of the Company is RMB. Subsidiaries of the Company confirmed the recording currencyaccording to their primary economic environment, among which the recording currency of the subsidiary of LittleSwan International (Singapore) Company Limited is USD. The financial statement is presented and listed byRMB.
5. Accounting Processing Method of Business Combination Under the Same Control and not Under theSame Control
(a) The Business Combinations which are Under the Same ControlCombination consideration paid by the combining party and net assets acquired shall all be measured based ontheir book value, but if the combined party was acquired by the final controlling party from the third party inprevious years, then they are based on the book value of assets and liabilities of the combined party (including thegoodwill formed from the acquisition of the combined party by the final controlling party) in the consolidatedfinancial statements of the final controlling party. Corresponding capital reserve (capital stock premium) shall beadjusted according to the difference between the book value of such net assets and that of the combinationconsideration; when such capital reserve (capital stock premium) cannot write them down, retained earnings shallbe adjusted. Meanwhile, relevant direct expenses resulting from such business combination shall be included inthe profit and loss for the period, and all transaction expenses resulting from issuing equity securities or debtsecurities for such business combination shall be included in the initial recognition amount of such equity securityor debt security.
(b) Business Combination not Under the Same ControlCombination costs occurred to purchaser and obtained net identifiable assets shall be calculated based on the fair
value in the purchasing date. If combination costs are greater than the seller’s balance obtained from the fair value
of net identifiable assets in the purchasing date, such surplus shall be confirmed as Goodwill; if less, such balanceshall be included in current profit and loss. Meanwhile, relevant direct expenses resulting from such businesscombination shall be included in the profit and loss for the period, and all transaction expenses resulting fromissuing equity securities or debt securities for such business combination shall be included in the initialrecognition amount of such equity security or debt security.
6. Consolidated Financial Statement Compilation MethodThe consolidation scope of financial statement shall include the company and all subsidiaries.
From the day when the company obtained the actual control of its subsidiaries, the company could initiatecorresponding consolidation which shall be ended up to the day of losing such actual control. Subsidiariesobtained through business combination under the same control shall be incorporated into the consideration scope
from the day when they’re put under the control of the final controlling party, and the net profit realized before the
combination day shall be individually reflected in the consolidated income statement.
When consolidated financial statement is being formulated, the company’s accounting policy and accountingperiod shall be regarded as final and binding to adjust the subsidiary’s financial statement if the subsidiary’s
accounting policy is not consistent with that of the company. For the subsidiary acquired through businesscombination not under the same control, its financial statement shall be adjusted based on the fair value of the netidentifiable assets in the day of purchase.All of the major incoming and outgoing balances of the Company and its subsidiaries, transactions and unrealized
profit shall be set off during the compilation of the consolidated financial statement. The subsidiary’s shareholder
equity, net profit and loss for the period and the part of comprehensive income not belonging to the company shall
be individually indicated and shown in the consolidated financial statement under shareholder’s equity, net profit
and total comprehensive income respectively as minority equity, minority interest income and total comprehensiveincome attributed to minority shareholders. All unrealized internal transaction profit and loss resulting from the
company’s sales of assets to the subsidiary shall be applied to set off the net profit attributed to the parentcompany’s shareholders; all unrealized internal transaction profit and loss resulting from the subsidiary’s sales ofassets to the parent company shall be set off accordingly by the net profit attributed the parent company’s
shareholders and minority interest income based on corresponding distribution ratio (the company to thesubsidiary). All unrealized internal transaction profit and loss resulting from assets sales among subsidiaries shall
be set off accordingly by the net profit attributed the parent company’s shareholders and minority interest incomebased on corresponding distribution ratio (the company to the seller’s subsidiary).
If any discrepancy exists between the recognition by regarding the company and its subsidiaries as the accountingsubject and the recognition by regarding the company or its subsidiary as the accounting subject in terms of thesame transaction, this transaction shall be adjusted from the perspective of combination.
7. Cash and Cash Equivalent Recognition Standard
The company’s cash and cash equivalent shall include cash in treasury, deposit that can be applied for any
payment at any time, cashes featuring short time limit, strong flowability and convenience in conversion intoknown amount and investment of low risk in value variations.
8. Foreign Currency Transaction and Foreign Currency Statement Translation(a) Foreign Currency Transaction
Foreign currency transaction shall be recorded in an account based on recording currency (through applying thespot rate in the day of transaction).On balance sheet day, foreign currency monetary items shall be converted into recording currency based on thespot rate of exchange. The exchange difference resulting from the specific foreign currency borrowings in order topurchase and construct the assets in conformity with corresponding capitalization conditions shall be capitalizedduring the process of capitalization, and other exchange differences shall be directly included in profit and loss forthe period. Foreign currency non-monetary items measured at historical cost shall be converted based on the spotrate of exchange on balance sheet day. The amount of cash subject to the change in exchange rate shall beindividually indicated and shown in cash flow statement.
(b) Foreign Currency Statement TranslationAssets and liabilities stated in balance sheet statement (overseas operation) shall be converted based on the spot
rate of exchange on balance sheet day; in terms of shareholder’s equity, except undistributed profit, other items
shall be converted based on the spot rate of exchange. Income and cost items stated in balance sheet statement(overseas operation) shall be converted based on the spot rate of exchange in the day of purchase. Correspondingforeign currency statement translation differences mentioned above shall be included in other comprehensiveincomes. Cash flow items (overseas operation) shall be converted based on the spot rate of exchange in the day ofcash flow. Meanwhile, the amount of cash subject to the change in exchange rate shall be individually indicatedand shown in cash flow statement.
9. Financial Instruments(a) Financial Assets
(i) Classification of Financial Assets
Upon initial recognition, financial assets shall be classified into financial assets at fair value through profit or loss,account receivable, available-for-sale financial assets. However, the classification of financial assets depends on
the Company and its subsidiaries’ intention and capacity of holding such financial assets.
Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for the purpose of sale in a shorttime.Account receivable
Account receivable refers to non-derivative financial assets with fixed or recognized recovery cost and no quotedprice in the active market.Available-for-sale financial assetsAvailable-for-sale financial assets include available-for-sale non-derivative financial assets designated upon theinitial recognition and financial assets not classified into others. Within 12 months after balance sheet day, (sold)available-for-sale financial assets shall be shown in balance sheet statement as other current assets.(ii) Recognition and MeasurementWhen the Company and its subsidiaries becomes one party for the financial instrument contract, financial assetsshall be recognized based on its fair value in balance sheet statement. Transaction expenses resulting fromfinancial assets measured based on its fair value and its variations included in profit and loss for the period shallbe included in profit and loss for the period; other transaction expenses related to such financial assets shall beincluded in the amount after initial recognition.Follow-up measurement shall be conducted for financial assets at fair value through profit or loss andavailable-for-sale financial assets based on their fair value while equity instrument investment that cannot bereliably measured without any quoted price in the active market shall be measured based on costs; receivables andheld-to-maturity investment shall be measured based on amortized cost by means of effective interest method.The fair value change of financial assets at fair value through profit or loss shall be included into the current profit
and loss as the fair value change’s profit and loss; interests or cash dividends from assets in holding period and the
disposal profit and loss when disposed shall be included into the current profit and loss.Except depreciation loss and corresponding exchange profit and loss resulting from foreign currency monetaryfinancial assets, variations of the fair value of available-for-sale financial assets shall be directly included in
shareholder’s equity. When such financial asset is derecognized, total variation previously included in equity shall
be directly transferred to profit and loss for the period. Interests from investment into available-for-sale debtinstruments calculated by effective interest method in the holding period and cash dividends (related toavailable-for-sale equity instrument investment) declared for distribution by the invested unit shall be included inprofit and loss for the period as income from investment.(iii) Financial Assets DepreciationExcept the financial assets at fair value through profit or loss, the Company and its subsidiaries shall check thebook value of corresponding financial assets on balance sheet day; if any objective evidence proves the
depreciation of certain financial assets, corresponding depreciation reserve shall be calculated and withdrawn.Such objective evidence refers to any matter actually happened that will influence the future cash flow predictionof such financial assets after the initial recognition, and the company is able to reliably measure such matter.Objective evidences indicating the depreciation of available-for-sale equity instrument investment include anysharp or permanent drop of corresponding fair value of such equity instrument investment. The Company and itssubsidiaries shall respective check various available-for-sale equity instrument investments on balance sheet day.If such the fair value of such equity instrument investment on balance sheet day is less than its initial investmentcost (such difference exceeding 50%) or such duration exceeds 1 year (including 1 year), it shall be the sign ofdepreciation; if such difference reaches 20% (including 20%) to 50%, the company shall completely take relevantfactors into consideration including price fluctuation so as to judge whether such equity instrument investment isdepreciated. The company shall apply weighted mean method to calculate the initial investment cost of suchavailable-for-sale equity instrument investment.When financial assets measured based on amortized cost is depreciated, corresponding depreciation reserve shallbe calculated and withdrawn based on the difference resulting from the current value of expected future cash flow(excluding future credit loss not occurred) less than its book value. If any objective evidence proves the recovery
of such financial assets and it’s related to the matter after the recognition of such loss, depreciation loss originally
recognized shall be restituted and included in profit and loss for the period.When available-for-sale financial assets measured based on fair value is depreciated, the total loss previously
included in shareholder’s equity resulting from the decrease in fair value shall be restituted and included in
depreciation loss. For available-for-sale debt instrument investment whose depreciation loss is recognized,depreciation loss previously recognized shall be restituted and included in profit and loss for the period when it isrelated to the matter happened after original depreciation loss is recognized and such value increases. Foravailable-for-sale equity instrument investment whose depreciation loss is recognized, the increase of fair value
shall be directly included in shareholder’s equity.
When available-for-sale financial assets measured based on cost is depreciated, the difference between its bookvalue and its current value recognized from its future cash flow based on its market return shall be recognized asdepreciation loss and included in profit and loss for the period. Such resulting depreciation loss shall not berestituted any longer.(iv) Derecognition of Financial Assets
Corresponding financial assets shall be derecognized when any of the following conditions is met: (1) thecontractual right to collect the cash flow of such financial assets is terminated; (2) such financial assets istransferred, and the Company and its subsidiaries have transferred all risks and rewards related to its ownership tothe party accepting such financial assets; or (3) such financial assets is transferred. Although the Company and itssubsidiaries do not transfer and retain all risks and rewards related to its ownership, it gives up its control of suchfinancial assets.When such financial assets is derecognized, the difference between its book value and the sum of received
consideration and the total variation of fair value in shareholder’s equity shall be included in profit and loss for the
period.(b) Financial LiabilitiesUpon initial recognition, financial liabilities shall be classified into financial assets measured based on its fairvalue and its variations included in profit and loss for the period and other financial liabilities. However, the
Company and its subsidiaries’ financial liabilities are mainly other financial liabilities, including short-term
borrowing, notes payable, accounts payable, dividends payable, and other accounts payable, as well as othercurrent liabilities, which shall be initially measured based on fair value. Meanwhile, follow-up measurement shallalso be conducted by means of effective interest method based on amortized cost.Borrowings shall be initially measured based on fair value and the amount deducting relevant transactionexpenses. Meanwhile, follow-up measurement shall also be conducted by means of effective interest methodbased on amortized cost.Other financial liabilities with the time limit less than 1 year (including 1 year) shall be indicated and shown ascurrent liabilities; if such time limit exceeds 1 year, but such financial liability will be due within (including) 1year as of balance sheet day, such financial liability shall be indicated and shown as non-current liabilities duewithin one year. Others shall be reported as non-current liabilities.
When corresponding financial liability’s current obligation is fully or partially relieved, the relieved part shall be
derecognized. The difference between the book value of the derecognized part and the consideration shall beincluded in profit and loss for the period.(c) Recognition of Fair Value of Financial InstrumentThe fair value of financial instrument existing in the active market shall be recognized based on its quoted price inthe active market. The fair value of financial instrument not existing in the active market shall be recognized by
means of corresponding valuation technology. During the valuation process, the Company and its subsidiariesshall apply appropriate valuation technology with strong support from adequate usable data and other informationand select the input value consistent with relevant assets or liabilities features considered by market participants in
conducting relevant transactions. Meanwhile, corresponding observable input value shall be first choice. When it’s
impossible or not feasible to obtain such observable input value, unobservable input value shall be put intoservice.
10. Receivables(a) Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made
Individually
| Definition or amount criteria for an account receivable with a significant single amount | The single amount of the accounts receivable accounts for more than or equal to 10% of the total accounts receivable, or the single amount is more than or equal to RMB10,000,000; the single amount of the other accounts receivable at the period-end accounts for more than or equal to 10% of the total other accounts receivable, or the single amount is more than or equal to RMB5,000,000. |
| Making individual bad-debt provisions for accounts receivable with a significant single amount | Executes the withdrawal according to the difference that the current value of the expected future cash flow lowers than its book value of the accounts receivable. |
(b) Accounts Receivable which the Bad Debt Provision is Withdrawn by Credit Risk Characteristics
| Name of portfolios | Bad debt provision method |
| Aging group | Aging analysis |
In the groups, those adopting aging analysis method to withdraw bad debt provision:
| Aging | Provision rate for Accounts Receivable | Provision rate for Other Receivables |
| Within 1 year (including 1 year) | 5.00% | 5.00% |
| 1-2 years | 10.00% | 10.00% |
| 2-3 years | 30.00% | 30.00% |
| 3-4 years | 50.00% | 50.00% |
| 4-5 years | 50.00% | 50.00% |
| Over 5 years | 100.00% | 100.00% |
In the groups, those adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is Made
Independently
| Reason for bad debt provision | There is objective evidence indicate that the Company and its subsidiaries couldn’t withdraw the accounts according to the original articles of the accounts receivable. |
| Withdrawal method | Executes the withdrawal according to the difference that the current value of the expected future cash flow lowers than its book value of the accounts receivable. |
11. Inventory(a) Category
Inventory includes raw materials, products in process, stock merchandises and revolving materials that measuredaccording to the lower one between the cost and the net realizable value.(b) Pricing method for distributed inventoriesInventories are measured at weighted average method when procured, while the cost of the stock merchandisesand the products in process includes the raw materials, direct labor and manufacturing expenses assignedaccording to the system under the normal capacity.(c) Recognition basis of net realizable value of inventories and withdrawal method for impairment provision ofinventoriesWhen the net realizable value is lower than the cost, provisions for impairment of inventories shall be drawn. Thenet realizable value is confirmed according to the amount after the estimated sales price of the inventory minus theamount of the estimated cost occur when the work finished and the estimated sales expenses as well as therelevant taxes among the daily activities.(d) The inventory system of the Company and its subsidiaries are perpetual inventory system.(e) The method of amortization of the low priced and easily worn articles and the wrappagesThe revolving materials include the low priced and easily worn articles and the wrappages and so on, while theyboth are amortized by one time write-off method.
12. Long-term Equity Investment
Long-term equity investments include the company’s long-term equity investment made to the subsidiary.The subsidiary refers to the invested unit under the Company’s controlThe investment to the subsidiary shall be shown in the company’s financial statement based on the amount
recognized through cost method, and consolidated after corresponding adjustment according to equity law when
the consolidated financial statement is being formulated.(a) Investment Cost RecognitionLong-term equity investment resulting from business combination: for long-term equity investment resulting frombusiness combination under the same control, corresponding investment cost shall be determined based on the
share of book value of the owner’s equity of the combined party in the final controlling party’s consolidated
financial statements in the day of combination; for long-term equity investment resulting from businesscombination not under the same control, corresponding investment cost shall be determined based oncorresponding combination cost.Long-term equity investment obtained by other means except business combination: for long-term equityinvestment obtained by paying cash, its initial investment cost shall be the actual purchasing payment; forlong-term equity investment obtained by issuing equity securities, the fair value of such equity security shall be itsinitial investment cost.(b) Follow-up Measurement and Profit and Loss Recognition MethodLong-term equity investment calculated by using cost method shall be measured based on its initial investmentcost; cash dividends or profits declared by the invested unit for distribution shall be recognized as investmentrevenue and included in profit and loss for the period.For long-term equity investment calculated by using equity method, if initial investment cost is more than the
share of fair value of the invested unit’s net identifiable assets, such initial investment cost shall be the long-termequity investment cost; if such initial investment cost is less than the share of fair value of the invested unit’s net
identifiable assets, such resulting difference shall be included in profit and loss for the period and the long-termequity investment cost shall be accordingly adjusted and increased.For long-term equity investment calculated by using equity method, the company shall recognize correspondingprofit and loss for the period according to the share of net profit and loss obtained or held from the invested unit.
In terms of the recognition of the invested unit’s net loss, the long-term equity investment’s book value and other
long-term equities constituting the net investment made to the invested unit in reality shall be written down toZero, but when the company is obliged to burden corresponding extra loss and relevant expected liabilityrecognition conditions are met, corresponding investment loss shall still be recognized and calculated as expected
liability. As for other changes in owner’s equity of the invested unit except net profit and loss, other
comprehensive revenue and profit distribution, the book value of long-term equity investment shall be adjusted
and included in capital reserve. Accordingly, the book value of long-term equity investment shall be reducedbased on the part attributed to the company when the profit or cash dividend is declared and distributed by theinvested unit. Meanwhile, the unrealized internal transaction profit and loss between the company and theinvested company shall be applied to determine and set off the part attributed to the company based oncorresponding shareholding ratio, on which basis, corresponding investment profit and loss shall be recognized. Interms of the internal transaction loss resulted from the company and the invested unit, the part belonging to assetsimpairment loss and corresponding unrealized loss shall not be set off.(c) Basis for Confirming Joint Control and Important Influence on the Invested PartyControl means that the company has the right to control the invested party and enjoy variable returns throughparticipating in relevant activities of the invested party. In addition, the company is also able to make use of itscontrol right to influence such variable return.Joint control refers to jointly control an arrangement as agreed by both parties, and activities related to thearrangement can only be conducted with the consent from all parties involved in such joint control.
Important influence refers to the possession of the right to make decisions about the company’s financial and
business operation policies, but the establishment of these policies cannot be controlled or jointly controlled with
other parties.
(d) Long-term Equity Investment DepreciationFor long-term equity investments attributed to the subsidiary, when their recoverable amount is less than theirbook value, such book value shall be written down to corresponding recoverable amount (Notes V (17)).13. Investment propertyDepreciation or amortization methodsAn investment property includes the use rights of leased land and buildings for rental purposes, and is initiallyrecorded at cost. Subsequent expenditures related to an investment property shall be included into the cost underconditions that relevant economic benefits are likely to flow in the company and the cost can be measured reliably.Otherwise, they should be recorded into current profits and losses when incurred.The Company and its subsidiaries conduct subsequent measurement of all investment properties in the model ofcost, and the depreciation of investment properties is withdrawn according to the difference of entry value minusthe net residual within the estimated useful life by the straight-line method. The estimated useful life, net residualvalue and annual depreciation (amortization) rate are as follows:
| Items | Estimate Useful Life | Net Residual Rate | Annual Depreciation Rate |
| Buildings | 20-35 years | 5.00% | 2.71%-4.75% |
| Land Use Rights | 50 years | - | 2.00% |
Investment properties should be transferred to fixed assets or intangible assets since the date of their beingchanged for self-use. As the purposes of self-use properties are changed for generating rents or capitalappreciation, the fixed assets or intangible assets shall be transferred to investment properties from the date ofchange. In time of change, the book value before transfer should be used as the recorded value after transfer.Reviews and appropriate adjustments shall be made annually to the estimated useful life, estimated net residualrate and depreciation (amortization) methods of the investment properties.When an investment property is disposed or permanently out of use with the estimation that no further economicbenefits could be obtained from its proposal, it should be derecognized. The disposal revenue of an investmentproperty for sale, transfer, retirement or damage should be recorded into current profits and losses after deductingbook value and relevant taxes.As the recoverable amount of an investment property is lower than its book value, its book value should be written
down as the recoverable amount (Note V (17)).
14. Fixed Assets(a) Recognition MethodThe fixed assets include the buildings, machineries and equipments, transportation tools, as well as office and
electronic equipment and so on, which are confirmed when the related economic benefits probably flow into theCompany and its subsidiaries with the cost could be reliable measured. The purchased and the newly built fixedassets should be executed the initially measurement according to the cost when acquired. And the follow-upexpenses related to the fixed assets should be included in the fixed assets cost when the economic benefits relatedto the former that probably flow into the Company and its subsidiaries with the cost could be reliable measured; asfor the part be replaced, should derecognize its book value; all of the other follow-up expenses should be included
in the current gains and losses when occur.(b) Depreciation Method
| Categories | Depreciation method | Estimated useful life | Residual value | Annual depreciation rate |
| Houses & buildings | Average method of useful life | 20-35 years | 5.00% | 2.71%-4.75% |
| Machineries | Average method of useful life | 10-15 years | 5.00% | 6.33%-9.50% |
| Transport machine | Average method of useful life | 5 years | 5.00% | 19.00% |
| Office and electronic equipments | Average method of useful life | 3-5 years | 5.00% | 19.00%-31.67% |
Fixed assets are depreciated using the straight-line method based on their costs less estimated residual values overtheir estimated useful lives. For a fixed asset whose provision for depreciation has been made, the depreciable
amount is confirmed by book value after deducting impairment provision and its service life in future period.When the recoverable amount of the fixed assets lower than the book value, should reduce the amount of the
book value and include in the recoverable amount (Note V (17)).
Disposal of the fixed assets
When the fixed assets be disposed, or expected not to produce any economic benefits through usage or disposal,should derecognize the fixed assets. The amount of the disposal revenues of the sales, transfer, scrap or damage
that deducted the book value as well as the relevant taxes should be included in the current gains and losses.
15. Construction in ProgressConstruction in progress shall be measured at actual cost. The actual cost comprises construction cost, installation
cost, borrowing costs eligible for capitalization, and other expenditures necessary for the construction in progressto reach the intended use. Construction in progress is transferred to fixed assets when the assets are ready for theirintended use, and depreciation begins from the following month. As the recoverable amount of the construction in
progress is lower than the book value, its book value should be written down as the recoverable amount。
16. Intangible Assets(a) Evaluation Methods, Useful Life, Impairment TestIntangible assets comprise land use rights, and non-patented technology and software etc, which are measured atcost.(i) Land Use RightsThe land use right allocated by the nation is zero-cost, and there is no specific use term in the land use rightcertificate, which should not be amortized. The other land use rights should be averagely amortized based in useterm of 50 years. Charges of lands and buildings purchasing which could not be reasonably allocated betweenland use rights and buildings should be used as fixed assets.(ii) Non-patented TechnologyNon-patented technology should be averagely amortized based on whichever is shorter among contract period,profits period and legally regulated period.
(iii) SoftwareSoftware should be recorded based on the actual payment, and averagely amortized according to an estimateduseful life of 3 to 5 years.(iv) Regular Review of Useful Life and Amortization MethodThe estimated useful life and amortization methods of intangible assets with limited service life should be
reviewed and appropriately adjusted at the end of each year.
(b) Research and DevelopmentInternal research and development project expenditure could be divided into research expenditures anddevelopment expenditures based on their nature and whether the intangible assets created by the R&D activitieshave high level of uncertainty.Expenditures of planned surveys, assessment and selections for the purpose of researching production process areresearch expenditures and are recorded in current profits and losses in occurrence; expenditures of relevantdesigns and tests in production process before mass production are development expenditures, and can be
capitalized if they meet all of the following conditions:
? The development of production process has been fully verified by technology team;? The management has approved the budget of production process development;? Studies and analyses of pre-market researches show that the products produced based on production
process have marketing abilities.
? There are sufficient technology and funds support to conduct development of production process and
follow-up large scale production;
? Expenditures of production process development could be reliably merged.
Development expenditures failing to meet the above conditions would be recorded into current profits and losses.Previously recorded development expenditures would not be reaffirmed as assets in subsequent periods.Capitalized expenditures in development phase should be listed as development expenditures on balance sheet,
and would be transferred to intangible assets since the date of the project achieving its intended use.
(c) Impairment of Intangible AssetsAs the recoverable amount of the intangible assets is lower than the book value, its book value should be written
down as the recoverable amount (Note V (17)).
17. Impairment of Long-term AssetsFixed assets, intangible assets with limited life, investment properties measured at cost, and long-term
unamortized expenses, other non-current assets, and long-term equity investment in subsidiaries should gothrough impairment test as there are signs of impairment on balance sheet; intangible assets not reaching usefulstatus should go through impairment tests at least annually whether there is sign of impairment or not. As theimpairment test results show that the recoverable amount of assets is lower than the book value, provision forimpairment based on the difference would be prepared and included in impairment losses. The fair value of assetsdeducted by the higher one between the net value after disposal and the present value of the expected future cashflow is the recoverable amount. Assets impairment preparation should be calculated and confirmed based onsingle assets, and the assets group where the assets belong should confirm its recoverable amount in case that therecoverable amount of single assets is hard to estimate. Assets group is the minimum assets unit to produce cash
flow independently.
Intangible assets with uncertain useful life and development expenditures of capitalization should go throughimpairment tests at least annually whether there is sign of impairment or not. The above assets impairment losses
cannot be recovered in subsequent period once confirmed.
18. Long-term Unamortized ExpensesLong-term unamortized expenses include operating rented fixed assets and other expenses which already happen
and should be amortized over a year and undertaken by current and subsequent phases, and they would beaveragely amortized according to benefit period and listed in the net amount of actual expenses deducted by
accumulated amortization.
19. Employee Remuneration(a) Accounting Treatment of Short-term Remuneration
Short-term remuneration includes salary, bonus, allowance and subsidy, welfare, medical insurance, industrialinjury insurance, maternity insurance, housing funds, labor union and education funding. In the accounting periodof employees providing service, the Company and its subsidiaries recognizes the actual short-term remuneration
as reliabilities and records it in current profits and losses and relevant asset cost.
(b) Accounting Treatment of Post-employment BenefitsThe post-employment benefits of the Company and its subsidiaries are divided into defined contribution plan anddefined benefit plan. Defined contribution plan refers to the post-employment welfare plan that the Company andits subsidiaries does not undertake further liabilities after depositing fixed expenses in an independent fund;
Defined benefit plan refers to the post-employment welfare plan excluding defined construction plan. Within theperiod of this report, the post-employment welfare plan of the Company and its subsidiaries refer to the basicold-age pension insurance and unemployment insurance deposit for employees, both of which belong to the
defined contribution plan.Basic old-age pension insurance
Employees of the Company and its subsidiaries have joined the social basic old-age pension insurance organizedand implemented by local labor and social security departments. The Company and its subsidiaries pay old-agepension insurance premiums monthly to local social basic old-age pension insurance agencies according to localsocial basic old-age pension insurance contribution base and proportion. After employees retire, local labor andsocial security departments are responsible for payment of basic old-age pension to employees. In the accountingperiod of employees providing service, the Company and its subsidiaries recognize the payable amount regulated
by social security departments as reliabilities and records it in current profits and losses and relevant asset cost.
(c) Accounting Treatment of Termination BenefitsAs the Company and its subsidiaries terminate labor contract with employees before the expiration date, orencourages employees to accept layoff voluntarily by providing certain compensation, liabilities caused by thecompensation to employees for terminating labor contract with them would be confirmed on whichever is earlierbetween that the Company and its subsidiaries could not withdraw the labor relationship or layoff suggestionsunilaterally and costs related to paying termination benefits are confirmed, and should be recorded in currentprofits and losses.(d) Accounting Treatment of Other Long-term Employees Benefits
(i) Early retirement welfare
Subsidiaries of the Company provide early retirement welfare for employees accepting early retirementarrangement. Early retirement welfare refer to salary and social insurance premiums paid to employees who
haven’t reached the retirement age regulated by the country and have stepped down their posts voluntarily after
being approved by the management of the Company and the subsidiary they belong to. The subsidiaries shouldpay early retirement welfare to these early retired employees from the first date of early retirement till theirnormal retirement age. As for early retirement welfare, subsidiaries should conduct accounting treatment. As theconditions of early retirement welfare are confirmed, the to-be-paid salary and social insurance premiums foremployees from the date when employees stop providing service till the date when they reach legal retirementdate should be confirmed as reliabilities and recorded into current profits and losses at one time. Difference
caused by changes in actuarial assumptions and adjustments of welfare standards for early retirement welfare
should be recorded into current profits and losses.
The estimated termination benefits within a year since the date of balance sheet date should be listed as flowing
liabilities.
20. Estimated liabilitiesCurrent obligations in the form of product quality guarantee and onerous contract should be confirmed as
anticipation liabilities as fulfilling these obligations may lead to flowing out of economic benefits and the amountscould be measured reliably.The anticipated liabilities should be initially measured according to the best estimate of fulfilling related currentobligations, and comprehensive considerations should be taken in relevant risks, uncertainty and time value ofmoney etc. If the time value of money has significant impacts, relevant future cash flow could be discounted toconfirm the best estimate; the increased amount to the book value of anticipated liabilities caused by discountreduction along with time would be confirmed as interest expenses. On balance sheet date, the book value ofanticipated liabilities should be reviewed and appropriately adjusted to reflect the best current estimates.The estimated liabilities that need to pay within one year from the balance sheet date are listed as currentliabilities.
21. Share-based Payment
(a) Categories of Share-based Payment
The term "share-based payment" refers to a transaction in which an enterprise grants equity instruments orundertakes equity-instrument-based liabilities in return for services from employees. The equity instrumentsinclude the equity instruments of the Company itself, the Company as the parent or other accounting entity in thesame group. The share-based payments shall consist of equity-settled share-based payments and cash-settledshare-based payments.Equity-settled share-based payments
The equity-settled share-based payment in return for employee services of the Company and its subsidiaries’ stock
option plan and restricted stock incentive plan shall be measured at the fair value of the equity instruments grantedto the employees. As for an equity-settled share-based payment in return for employee services, the right cannotbe exercised until the vesting period comes to an end or until the prescribed performance conditions are met.
Within the vesting period, the services obtained in the current period shall, based on the best estimate of thenumber of vested equity instruments, be included in the relevant costs or expenses at the fair value of the equitiesinstruments on the date of the grant, and the capital reserves shall be increased accordingly. If the subsequentinformation indicates that the number of vested equity instruments is different from the previous estimate, anadjustment shall be made and on the vesting date, the estimate shall be adjusted to equal the number of theactually vested equity instruments. On the vesting date, an enterprise shall, based on the number of the equityinstruments of which the right is actually exercised, calculate and confirm the amount of the capital stock to betransferred in, and transfer it in the stock capital.
(b) Recognition Method of Fair Value of Equity Instruments
The Company and its subsidiaries confirm the fair value of stock option by adopting options pricing model, and
confirm the fair value of stock appreciation right by adopting options pricing model of Black Scholes.(c) Recognition Basis of the Best Estimate of the Vested Equity Instruments
On every balance sheet date in the waiting period, the Company and its subsidiaries shall reason out the bestcourse to estimate according to the newly information of the vested employee variation and revise the amounts ofexpected vested equity instruments. On the vesting date, final estimated number of vested equity instruments is
same as the actual number of vested equity instruments.
(d) Relevant Accounting Treatment of Executing, Revising and Terminating the Share-based PaymentPlansOn the vesting date of stock option, the Company and its subsidiaries confirmed the share capital and stockpremium, and carry forward the recognized capital reserves within the vesting period according to the vesting
conditions.
22. RevenueRevenue amount should be confirmed by the fair value of received and receivable contracts or agreements as the
Company and its subsidiaries sells goods and provides services in daily operation activities. Revenue is shown asthe net amount after deducting sales discount and returns.As economic benefits related to transactions could flow into the Company and its subsidiaries, and relevantrevenue could be measured reliably and also meet the standards for various operation activities as listed below,relevant revenue is confirmed:
(a) Sales of Goods
The company manufactures and sells washing machines. As the products are delivered, main risks andremuneration of the ownership of the goods would be transferred to the purchaser, and the Company would notconduct continuing management and control over the products. The sales revenue is realized as related income orprice credential has been obtained, and relevant cost could be calculated reliably. The Company and its
subsidiaries’ main sales are realized from dealers, large-scale chain home appliance retailers and e-commerce
platforms as well as export. Sales revenue obtained from dealers, large-scale chain home appliance retailers andnon-proprietary e-commerce platforms should be confirmed as products have been delivered to them and acceptedby them. After accepting the products by dealers, large-scale chain home appliance retailers and non-proprietarye-commerce platforms, they need to undertake the risk of possible damage and price fluctuation of the products,and also have the right to sell the products by themselves. Sales revenue obtained from proprietary e-commerceplatform should be confirmed as the products have been delivered to and accepted by end users. Sales revenue
obtained from export should be confirmed as the products have been declared to customs, crossed the ship’ s sideat designated loading port and got the bill of landing according to the contract agreement.
The Company sells materials. As the products are delivered, main risks and remuneration of the ownership of thegoods would be transferred to the purchaser, and the Company would not conduct continuing management andcontrol over the products. The sales revenue is realized as related income or price credential has been obtained,
and relevant cost could be calculated reliably.
(b) Transfer of Assets Use RightsInterest income would be confirmed by actual interest rate in accordance with the time of other parties usingmonetary fund of the company.
Operating lease income would be confirmed within the lease period on straight-line basis.
23. Government SubsidyA government subsidy means the monetary or non-monetary assets obtained free by the Company and its
subsidiaries from the government, including tax refund and fiscal subsidies, and etc.
No government subsidy may be recognized unless the attached conditions are met and the subsidy can be obtainedby the Company and its subsidiaries. If a government subsidy is a monetary asset, it shall be measured in the lightof the received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at itsfair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount.(a) Judgment Basis and Account Treatment Methods of Assets Related Government Subsidy
Assets related government subsidy refers to government support acquired by the company to be used inpurchasing and building or forming long-term assets in other ways. Benefits related government subsidy refer to
the government support except for assets relate government subsidy.
Assets related government subsidy would be confirmed as deferred benefits, averagely allocated within the usefullife of relevant assets, and recorded in current profits and losses. Government subsidy measured at nominal
amount would be recorded to current profits and losses directly.
(b) Judgment Basis and Account Treatment Methods of Benefits Related Government SubsidyBenefits related government subsidy, used to compensate expenses and losses of subsequent periods, would beconfirmed as deferred benefits, and recorded into current profits and losses during the period of establishingrelevant costs; those used to compensate relevant expenses and losses that already happened would be recorded
directly to current profits and losses.
24. Deferred Income Tax Assets/ Deferred Income Tax LiabilitiesDeferred income tax assets and deferred income tax liabilities should be confirmed based on the difference
(temporary difference) between tax basis of assets and liabilities and their book values. Corresponding deferredincome tax income assets should be confirmed in accordance with the tax provisions for deductible losses whichcould deduct the taxable income in subsequent years. The temporary difference caused by initial confirmation ofgoodwill could not confirm the deferred income tax liabilities. Temporary differences formed by initialconfirmation of assets and liabilities generated from non-corporate merging transactions having no influences onaccounting profits or taxable income (deductible losses) could not confirm corresponding deferred income taxassets and deferred income tax liabilities. In the balance sheet date, deferred income tax assets and deferredincome tax liabilities should be measured based on the appropriate tax rate in the period of expected recovery ofthe assets or settlement of the liabilities.Deferred income tax assets should be confirmed by the possible taxable income used to deduct temporary
difference, deductible losses and tax deduction.
The taxable temporary difference related to investment of subsidiaries could confirm the deferred income taxliabilities, unless the Company could control the time of reverse of temporary difference or the temporarydifference would not reverse in the foreseeable future. The deductible temporary difference related to investmentof subsidiaries could confirm the deferred income tax assets, as the temporary difference could possibly reverse inforeseeable future and obtain taxable income which could be used to deduct deductible temporary difference.
Deferred income tax assets and deferred income tax liabilities meeting all of the following conditions could belisted as the net amount after deduction:
? Deferred income tax assets and deferred income tax liabilities are related to the income tax collected by
the same tax bureau from the same taxpayer of the company.
? The taxpayer of the company owns the legal rights of settle the current income tax assets and income tax
liabilities in net amount.
25. LeaseFinancing lease is the lease that virtually transfers all risks and remuneration related to assets ownership other
leases are operating leases.The rent income of operating lease during the lease period should be confirmed on a straight-line basis.
The rent payment of operating lease during the lease period should be recorded in related asset cost or current
profits and losses on a straight-line basis.
26. Segment InformationThe Company and its subsidiaries confirm the operating segment according to internal organizational structure,
management requirement, and internal reporting system, which is the base to confirm reportable segment and
disclose the segment information.
Operating segment refers to the component that the Company and its subsidiaries both can meet followingconditions simultaneously:
(a) The component can give rise to income and expenditure on daily activities.(b) Management can assess the operating results of this component regularly to decide to allocate resources to it
and value its performance.(c) Related accounting information, such as financial status, operating results, and cash flow of this component
can be obtained. Two or more operating segments that have similar economic characteristics and can meetcertain conditions can be combined into one operating segment.
27. Other Critical Accounting Policies and Accounting EstimatesBased on historical experience and other factors, including reasonable expectations of future events, the Company
and its subsidiaries conduct continuous evaluation of critical accounting estimates and key judgments adopted.
The following critical accounting estimates and key assumptions will lead to important risks of significantadjustment in the book value of assets and liabilities of next fiscal year:
(a) Provision of Sales RebatesThe Company and its subsidiaries apply sales rebates policy to their clients of sales. The Company and itssubsidiaries conduct regular estimates and withdraw sales rebates in advance in accordance with regulations ofsales agreement, review of specific transactions, market conditions and level of channel inventories historicalexperience, and by reference of the completion status of agreed assessment indicators of sales clients. In case ofsignificant changes of previous estimates, the above difference would have impacts on sales rebates during theperiod of estimates changes.(b) Income TaxesThe Company and its subsidiaries pay corporate income taxes in multiple jurisdictions. In normal operations,uncertainty exists in the final tax treatment of some transactions and events. Significant judgments are requiredfrom the Company and its subsidiaries in the provision of income taxes in each jurisdiction. If the final identifiedoutcome of these tax matters differs from the initially recorded amount, the difference would have impacts on the
income taxes and deferred income taxed during the period of making the above mentioned identification.
28. Changes in Critical Accounting Policies and Accounting Estimates(1) Changes in Critical Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Critical Accounting Estimates
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
| Category of taxes | Tax basis | Tax rate |
| VAT | Taxable added value (tax amount payable should be measured according to the balance after the taxable sales multiply the applicable tax rate then deduct the input tax which allowed to be deduct at the Reporting Period) | 16% or 10% or 5% |
| Urban maintenance and construction tax | Paid VAT | 7% or 5% |
| Enterprise income tax | Payable income tax amount | 15% or 17% or 25% |
2. Tax Preference
Based on the relevant regulations of the No. 28 articles of the Enterprise Income Law of the People’s Republic of
China, the payment of the corporate income tax of the Company, Wuxi Little Swan GE Co., Ltd. and Wuxi FilinElectronics Co. Ltd. should be measured according to the 15% of the tax rate.In July 2015, the Company got the High Technology Enterprises Certificate (certificate No.: GR201532000606)issued by Jiangsu Science and Technology Development, Department of Finance of Jiangsu Province, JiangsuProvincial Office, SAT and Jiangsu Local Taxation Bureau after the re-examination with the period of validityfrom 2015 to 2018 lasting for 3 years.In July 2015, the subsidiary Wuxi Little Swan GE Co., Ltd. got the High Technology Enterprises Certificate(certificate No.: GR201532000557) issued by Jiangsu Science and Technology Development, Department ofFinance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after the
re-examination with the period of validity from 2015 to 2018 lasting for 3 years.
In July 2015, the subsidiary Wuxi Filin Electronics Co., Ltd. got the High Technology Enterprises Certificate(certificate No.: GR201532000917) issued by Jiangsu Science and Technology Development, Department ofFinance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after there-examination with the period of validity from 2015 to 2018 lasting for 3 years.The applicable Singapore corporate income tax rate of the subsidiary Little Swan International (Singapore) Co.,Ltd is 17%.
VII. Notes on Major items in Consolidated Financial Statements of the Company
1. Monetary Funds
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank deposits | 1,495,906,357.47 | 1,417,489,071.71 |
| Other monetary funds | 208,324,506.77 | 170,775,444.34 |
| Total | 1,704,230,864.24 | 1,588,264,516.05 |
| Of which: total amount of the accounts deposited abroad | 495,192.03 | 503,115.69 |
On 30 June 2018, other monetary funds included RMB195,786,014.31 of deposit for bank acceptance bills,RMB1,862,014.85 of deposit for forward foreign exchange contracts and RMB10,676477.61 of deposit for lettersof credit. (On 31 December 2017, other monetary funds included RMB166,791,807.67 of deposit for bank
acceptance bills and RMB3,983,636.67 of deposit for letters of credit.)2. Financial Assets Measured by Fair Value with its Changes Recorded into Current Profit or Loss.
Unit: RMB
| Item | Ending balance | Beginning balance |
| Derivative financial assets | 5,270,238.03 | |
| Total | 5,270,238.03 |
3. Notes Receivable(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 1,176,200,901.21 | 1,283,192,684.28 |
| Total | 1,176,200,901.21 | 1,283,192,684.28 |
(2) Notes Receivable which Had Endorsed by the Company or Had Discounted and not Due on the BalanceSheet Date at the Period-end
Unit: RMB
| Item | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
| Bank acceptance bill | 1,176,200,901.21 | |
| Total | 1,176,200,901.21 |
4. Accounts Receivable(1) Accounts Receivable Disclosed by Category
Unit: RMB’0,000
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable | 208,207.41 | 100.00% | 10,410.37 | 5.00% | 197,797.04 | 182,813.10 | 100.00% | 9,140.66 | 5.00% | 173,672.45 |
| withdrawn bad debt provision according to credit risks characteristics | ||||||||||
| Total | 208,207.41 | 100.00% | 10,410.37 | 5.00% | 197,797.04 | 182,813.10 | 100.00% | 9,140.66 | 5.00% | 173,672.45 |
Accounts receivable with significant single amount for which bad debt provision separately accrued at theperiod-end
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
Unit: RMB
| Aging | Ending balance | ||
| Accounts receivable | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 2,082,074,077.64 | 104,103,703.90 | 5.00% |
| Total | 2,082,074,077.64 | 104,103,703.90 | 5.00% |
Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
(2) Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the reporting period was of RMB12,697,151.58；the
amount of the reversed or collected part during the reporting period was of RMB 0.00.(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Item | Balance | Balance of the bad debt provision | Proportion to the total balance of the accounts receivable |
| Total amount of balance of the top 5 accounts receivable | 1,341,328,505.12 | 67,066,425.26 | 64.42% |
5. Prepayment(1) List by Aging Analysis
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 147,898,021.12 | 97.08% | 79,671,655.89 | 94.46% |
| 1 to 2 years | 2,586,749.99 | 1.70% | 4,675,136.49 | 5.54% |
| 2 to 3 years | 1,851,733.00 | 1.22% | ||
| Total | 152,336,504.11 | -- | 84,346,792.38 | -- |
The reason why the prepayments with significant amount and aging over one year had not settled in time:
As of 30 June 2018, the prepayments aging over one year were RMB4,438,482.99, which were mainly theunsettled prepayments not reaching conditions stipulated in contracts.
(2) Top 5 Prepayments in Ending Balance Collected according to the Prepayment Target
Unit: RMB
| Item | Balance | Proportion to the total amount of the prepayments |
| Total amount of the top 5 of the balance of the prepayments | 51,322,929.69 | 33.69% |
6. Interest Receivable(1) Category of Interest Receivable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Structured deposits | 179,050,047.95 | 60,096,246.58 |
| Bank deposits | 638,559.74 | 847,661.40 |
| Total | 179,688,607.69 | 60,943,907.98 |
7. Other Accounts Receivable(1) Other Accounts Receivable Disclosed by Category
Unit: RMB’0,000
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Other accounts | 3,745.66 | 100.00% | 271.53 | 7.25% | 3,474.13 | 5,057.52 | 100.00% | 335.07 | 6.63% | 4,722.45 |
| receivable withdrawn bad debt provision according to credit risks characteristics | ||||||||||
| Total | 3,745.66 | 100.00% | 271.53 | 7.25% | 3,474.13 | 5,057.52 | 100.00% | 335.07 | 6.63% | 4,722.45 |
Other accounts receivable at the period-end that is individually significant and provisions for bad debtsindividually.
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
Unit: RMB
| Aging | Ending balance | ||
| Other accounts receivable | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 34,926,315.62 | 1,746,315.79 | 5.00% |
| 1 to 2 years | 985,908.00 | 98,590.80 | 10.00% |
| 2 to 3 years | 621,400.00 | 186,420.00 | 30.00% |
| Over 3 years | 922,930.77 | 683,971.90 | 74.11% |
| Total | 37,456,554.39 | 2,715,298.50 | 7.20% |
Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2) Other Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00；the amount of the
reversed or collected part during the Reporting Period was of RMB635,414.59.(3) Other Accounts Receivable Classified by the Nature of Accounts
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Funds in third parties’ accounts | 29,328,243.46 | 44,740,888.28 |
| Borrowings by employees | 4,376,288.38 | 2,875,802.98 |
| Margin &cash pledge | 3,267,721.48 | 2,515,443.83 |
| Other | 484,301.07 | 443,032.08 |
| Total | 37,456,554.39 | 50,575,167.17 |
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Name of units | Nature | Ending balance | Aging | Proportion to total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Alipay (China) Network Technology Co., Ltd. | Deposits in the third-party payment platform | 19,920,884.60 | Within one year | 53.18% | 996,044.23 |
| Shenzhen Midea Payment Technology Co., Ltd. | Deposits in the third-party payment platform | 6,706,867.80 | Within one year | 17.91% | 335,343.39 |
| Chinabank Payments | Deposits in the third-party payment platform | 1,668,076.64 | Within one year | 4.45% | 83,403.83 |
| Nanjing Suning Yifubao Network Technology Co., Ltd. | Deposits in the third-party payment platform | 1,032,414.42 | Within one year | 2.76% | 51,620.72 |
| Wuxi China Resources Gas Co., Ltd. | Margin &cash pledge | 820,800.00 | 1 to 2 years | 2.19% | 82,080.00 |
| Total | -- | 30,149,043.46 | -- | 80.49% | 1,548,492.17 |
8. Inventory(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves | Carrying value | Carrying amount | Falling price reserves | Carrying value | |
| Raw materials | 24,203,708.86 | 570,442.41 | 23,633,266.45 | 35,127,847.81 | 570,442.41 | 34,557,405.40 |
| Goods in process | 15,014,293.01 | 15,014,293.01 | 14,237,995.55 | 14,237,995.55 | ||
| Inventory goods | 577,520,400.93 | 29,763,993.30 | 547,756,407.63 | 1,995,530,607.75 | 63,559,812.56 | 1,931,970,795.19 |
| Total | 616,738,402.80 | 30,334,435.71 | 586,403,967.09 | 2,044,896,451.11 | 64,130,254.97 | 1,980,766,196.14 |
(2) Falling Price Reserves of Inventory
Unit: RMB
| Item | Beginning balance | Increased amount | Decreased amount | Ending balance |
| Withdrawal | Other | Reverse or write-off | Other | |||
| Raw materials | 570,442.41 | 570,442.41 | ||||
| Inventory goods | 63,559,812.56 | 11,877,851.17 | 45,673,670.43 | 29,763,993.30 | ||
| Total | 64,130,254.97 | 11,877,851.17 | 45,673,670.43 | 30,334,435.71 |
9. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Financial products | 1,093,193,150.68 | 3,792,871,097.59 |
| Structured deposits | 10,700,000,000.00 | 8,650,000,000.00 |
| Input tax to be deducted and certified | 88,353,636.04 | 283,158,673.31 |
| Other | 45,415,612.78 | 52,210,974.32 |
| Total | 11,926,962,399.50 | 12,778,240,745.22 |
10. Available-for-sale Financial Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Available-for-sale equity instruments: | 300,300.00 | 100,300.00 | 200,000.00 | 300,300.00 | 100,300.00 | 200,000.00 |
| Measured at cost | 300,300.00 | 100,300.00 | 200,000.00 | 300,300.00 | 100,300.00 | 200,000.00 |
| Total | 300,300.00 | 100,300.00 | 200,000.00 | 300,300.00 | 100,300.00 | 200,000.00 |
11. Investment Property(1) Investment Property Adopted the Cost Measurement Mode
Unit: RMB
| Item | Houses and buildings | Land use right | Construction in progress | Total |
| I. Original carrying value | ||||
| 1. Beginning balance | 88,189,256.96 | 22,949,959.07 | 111,139,216.03 | |
| 2. Increased amount of the period | ||||
| (1) Outsourcing | ||||
| (2) Transfer from inventory\fixed |
| assets\construction in progress | ||||
| (3) Enterprise combination increase | ||||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other | ||||
| 4. Ending balance | 88,189,256.96 | 22,949,959.07 | 111,139,216.03 | |
| II. Accumulative depreciation and accumulative amortization | ||||
| 1. Beginning balance | 29,852,095.86 | 7,015,229.88 | 36,867,325.74 | |
| 2. Increased amount of the period | 1,650,141.54 | 275,912.46 | 1,926,054.00 | |
| (1) Withdrawal or amortization | 1,650,141.54 | 275,912.46 | 1,926,054.00 | |
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other | ||||
| 4. Ending balance | 31,502,237.40 | 7,291,142.34 | 38,793,379.74 | |
| III. Depreciation reserves | ||||
| 1. Beginning balance | 12,576,065.29 | 12,576,065.29 | ||
| 2. Increased amount of the period | ||||
| (1) Withdrawal | ||||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other | ||||
| 4. Ending balance | 12,576,065.29 | 12,576,065.29 | ||
| IV. Carrying value | ||||
| 1. Ending book value | 44,110,954.27 | 15,658,816.73 | 59,769,771.00 | |
| 2. Beginning book value | 45,761,095.81 | 15,934,729.19 | 61,695,825.00 |
12. Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Office & Electronic equipment | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 735,906,249.69 | 1,053,086,342.85 | 28,536,914.16 | 139,927,818.59 | 1,957,457,325.29 |
| 2. Increased amount of the period | 52,764,489.72 | 3,538,087.27 | 54,112,985.37 | 110,415,562.36 | |
| (1) Purchase | 37,437,395.70 | 3,538,087.27 | 54,112,985.37 | 95,088,468.34 |
| (2) Transfer from construction in progress | 15,327,094.02 | 15,327,094.02 | |||
| (3) Enterprise combination increase | |||||
| 3. Decreased amount of the period | 18,196,176.73 | 337,264.94 | 2,445,391.05 | 20,978,832.72 | |
| (1) Disposal or Scrap | 18,196,176.73 | 337,264.94 | 2,445,391.05 | 20,978,832.72 | |
| 4. Ending balance | 735,906,249.69 | 1,087,654,655.84 | 31,737,736.49 | 191,595,412.91 | 2,046,894,054.93 |
| II. Accumulative depreciation | |||||
| 1. Beginning balance | 227,391,811.31 | 556,756,002.40 | 23,111,726.15 | 99,321,819.31 | 906,581,359.17 |
| 2. Increased amount of the period | 15,624,330.54 | 45,341,385.52 | 608,730.53 | 11,795,470.17 | 73,369,916.76 |
| (1) Withdrawal | 15,624,330.54 | 45,341,385.52 | 608,730.53 | 11,795,470.17 | 73,369,916.76 |
| 3. Decreased amount of the period | 12,804,858.29 | 302,089.08 | 1,170,190.22 | 14,277,137.59 | |
| (1) Disposal or Scrap | 12,804,858.29 | 302,089.08 | 1,170,190.22 | 14,277,137.59 | |
| 4. Ending balance | 243,016,141.85 | 589,292,529.63 | 23,418,367.60 | 109,947,099.26 | 965,674,138.34 |
| III. Depreciation reserves | |||||
| 1. Beginning balance | 3,918,452.47 | 17,168,643.32 | 30,622.40 | 89,892.09 | 21,207,610.28 |
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | 4,318,221.04 | 19,389.79 | 26,099.07 | 4,363,709.90 | |
| (1) Disposal or Scrap | 4,318,221.04 | 19,389.79 | 26,099.07 | 4,363,709.90 | |
| 4. Ending balance | 3,918,452.47 | 12,850,422.28 | 11,232.61 | 63,793.02 | 16,843,900.38 |
| IV. Carrying value | |||||
| 1. Ending carrying value | 488,971,655.37 | 485,511,703.94 | 8,308,136.28 | 81,584,520.63 | 1,064,376,016.22 |
| 2. Beginning carrying value | 504,595,985.91 | 479,161,697.13 | 5,394,565.61 | 40,516,107.19 | 1,029,668,355.84 |
13. Construction in Progress(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Automatic stamping riveting | 39,078,412.10 | 39,078,412.10 | 37,167,679.63 | 37,167,679.63 | ||
| line of roller cabinet | ||||||
| Other | 650,518.92 | 650,518.92 | 804,572.97 | 804,572.97 | ||
| Total | 39,728,931.02 | 39,728,931.02 | 37,972,252.60 | 37,972,252.60 |
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB’0,000
| Item | Budget | Beginning balance | Increased amount | Transferred in fixed assets | Other decreased amount | Ending balance | Proportion of accumulated investment in constructions to budget | Job schedule | Accumulated amount of interest capitalization | Of which: amount of capitalized interests for the Reporting Period | Capitalization rate of interests for the Reporting Period | Capital resources |
| Automatic stamping riveting line of roller cabinet | 5,902.00 | 3,716.77 | 191.07 | 3,907.84 | 98.00% | 98.00% | Other | |||||
| Other | 2,436.30 | 80.46 | 1,517.30 | 1,532.71 | 65.05 | 65.58% | 65.58% | Other | ||||
| Total | 8,338.29 | 3,797.23 | 1,708.38 | 1,532.71 | 0 | 3,972.89 | -- | -- | -- |
14. Intangible Assets
Unit: RMB
| Item | Land use right | Patent right | Non-patents | Others | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 242,666,890.39 | 1,395,014.56 | 244,061,904.95 | ||
| 2. Increased amount of the period | 7,947.17 | 7,947.17 | |||
| (1) Purchase | 7,947.17 | 7,947.17 | |||
| (2) Internal R&D | |||||
| (3) Business combination increase | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 242,674,837.56 | 1,395,014.56 | 244,069,852.12 | ||
| II. Accumulated amortization | |||||
| 1. Beginning balance | 55,621,543.12 | 1,395,014.56 | 57,016,557.68 |
| 2. Increased amount of the period | 2,619,114.45 | 2,619,114.45 | |||
| (1) Withdrawal | 2,619,114.45 | 2,619,114.45 | |||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 58,240,657.57 | 1,395,014.56 | 59,635,672.13 | ||
| III. Depreciation reserves | |||||
| 1. Beginning balance | |||||
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Carrying value | |||||
| 1. Ending carrying value | 184,434,179.99 | 184,434,179.99 | |||
| 2. Beginning carrying value | 187,045,347.27 | 187,045,347.27 |
15. Long-term Prepaid Expense
Unit: RMB
| Item | Beginning balance | Increased amount | Amortization amount of the period | Other decreased amount | Ending balance |
| Fixed assets improvement | 21,318,606.65 | 8,819,217.24 | 4,685,773.66 | 25,452,050.23 | |
| Other | 1,063,413.87 | 126,572.19 | 250,461.20 | 939,524.86 | |
| Total | 22,382,020.52 | 8,945,789.43 | 4,936,234.86 | 26,391,575.09 |
16. Deferred Income Tax Assets/Deferred Income Tax Liabilities(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 145,786,037.32 | 21,824,399.10 | 171,883,829.48 | 25,782,574.43 |
| Internal unrealized profit | 29,913,702.45 | 4,487,055.37 | 107,345,624.86 | 16,101,843.73 |
| Remuneration and dismissal expense | 11,520,236.25 | 1,728,035.44 | 13,089,160.95 | 1,963,374.14 |
| Other current liabilities | 2,476,196,552.18 | 355,800,208.12 | 2,107,686,604.61 | 370,746,106.98 |
| Provisions | 2,157,992.76 | 323,698.90 | 2,253,082.26 | 337,962.34 |
| Deferred income | 2,262,533.19 | 339,379.98 | 2,489,133.21 | 373,369.98 |
| Investment differences | 8,782,955.88 | 1,317,443.38 | 8,782,955.88 | 1,317,443.38 |
| Changes in fair value-trading financial assets | 4,800,613.47 | 720,092.02 | ||
| Total | 2,681,420,623.50 | 386,540,312.31 | 2,413,530,391.25 | 416,622,674.98 |
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax liabilities | Deductible temporary difference | Deferred income tax liabilities | |
| Changes in fair value of available-for-sale financial assets | 43,193,150.68 | 6,478,972.60 | 57,871,097.59 | 8,680,664.64 |
| Changes in fair value of financial assets at fair value through profit or loss | 5,270,238.03 | 790,535.70 | ||
| Total | 43,193,150.68 | 6,478,972.60 | 63,141,335.62 | 9,471,200.34 |
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
| Item | Mutual set-off amount of deferred income tax assets and liabilities at the period-end | Ending balance of deferred income tax assets or liabilities after off-set | Mutual set-off amount of deferred income tax assets and liabilities at the period-begin | Beginning balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax assets | 6,478,972.60 | 380,061,339.65 | 9,471,200.34 | 407,151,474.64 |
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Deductible temporary difference | 27,199,560.02 | 27,153,908.99 |
| Deductible losses | 81,634,128.03 | 81,636,690.06 |
| Total | 108,833,688.05 | 108,790,599.05 |
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
| Years | Ending amount | Beginning amount | Notes |
| Y2018 | 16,300,604.68 | 57,917.22 | |
| Y2019 | 49,620,940.42 | 16,303,166.71 | |
| Y2020 | 9,576,983.63 | 49,620,940.42 | |
| Y2021 | 5,618,761.45 | 9,576,983.63 | |
| Y2022 | 516,837.85 | 5,618,761.45 | |
| Total | 81,634,128.03 | 81,177,769.43 | -- |
17. Other Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Prepayment for equipment | 56,029,381.55 | 27,331,937.53 |
| Total | 56,029,381.55 | 27,331,937.53 |
18. Provision for Impairment of Assets
Unit: RMB
| Item | 31 December 2017 | Increase | Decrease | 30 June 2018 | |
| Reverse | Write-off | ||||
| Bad debt provision | 94,757,265.40 | 12,061,736.99 | - | - | 106,819,002.39 |
| Of which: bad debt provision for accounts receivable | 91,406,552.32 | 12,697,151.58 | 104,103,703.90 | ||
| Bad debt provision for other accounts receivable | 3,350,713.08 | -635,414.59 | 2,715,298.49 | ||
| Inventory falling price reserves | 64,130,254.97 | 11,877,851.17 | 45,673,670.43 | 30,334,435.71 | |
| Provision for impairment of available-for-sale financial assets | 100,300.00 | 100,300.00 | |||
| Provision for impairment of investment property | 12,576,065.29 | 12,576,065.29 | |||
| Provision for impairment of fixed assets | 21,207,610.28 | 4,363,709.90 | 16,843,900.38 | ||
| Total | 192,771,495.94 | 23,939,588.16 | - | 50,037,380.33 | 166,673,703.77 |
19. Short-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Discount financing of notes receivable | 81,393,672.34 | |
| Total | 81,393,672.34 |
20. Financial Liabilities at Fair Value through Profit or Loss
Unit: RMB
| Item | Ending balance | Beginning balance |
| Trading financial liabilities | 4,800,613.47 | |
| Derivative financial liabilities | 4,800,613.47 | |
| Total | 4,800,613.47 |
21. Notes Payable
Unit: RMB
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 3,915,720,273.53 | 2,805,804,600.41 |
| Total | 3,915,720,273.53 | 2,805,804,600.41 |
22. Accounts Payable(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Material | 2,778,165,944.92 | 3,803,318,504.56 |
| Other | 31,443,793.65 | 23,707,195.54 |
| Total | 2,809,609,738.57 | 3,827,025,700.10 |
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
| Item | Ending balance | Unpaid/ Un-carry-over reason |
| Material | 54,501,046.83 | Unsettled due to the agreement of contract |
| Total | 54,501,046.83 | -- |
23. Advances from Customers(1) List of Advances from Customers
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances from customers | 828,133,123.71 | 3,065,815,801.93 |
| Total | 828,133,123.71 | 3,065,815,801.93 |
(2) Significant Advances from Customers Aging over One Year
Unit: RMB
| Item | Ending balance | Unpaid/ Un-carry-over reason |
| Advance from goods | 42,618,060.31 | Unsettled advance from goods |
| Total | 42,618,060.31 | -- |
24. Payroll Payable(1) List of Payroll Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 320,914,272.91 | 619,671,080.97 | 697,918,140.10 | 242,667,213.78 |
| II. Post-employment benefit-defined contribution plans | 25,775,609.10 | 66,505,577.92 | 80,486,126.29 | 11,795,060.73 |
| III. Termination benefits | 2,793,962.75 | 4,209,565.73 | 4,338,468.11 | 2,665,060.37 |
| Total | 349,483,844.76 | 690,386,224.62 | 782,742,734.50 | 257,127,334.88 |
(2) List of Short-term salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 282,471,135.34 | 508,925,266.35 | 583,695,741.92 | 207,700,659.77 |
| 2. Employee welfare | 8,331,772.70 | 40,159,306.08 | 36,854,249.27 | 11,636,829.51 |
| 3. Social insurance | 12,297,766.43 | 34,607,681.11 | 41,028,639.38 | 5,876,808.16 |
| Of which: Medical insurance premiums | 9,960,643.80 | 27,659,647.95 | 32,851,023.62 | 4,769,268.13 |
| Work-related injury insurance | 1,540,246.23 | 4,553,613.97 | 5,363,858.42 | 730,001.78 |
| Maternity insurance | 796,876.40 | 2,394,419.19 | 2,813,757.34 | 377,538.25 |
| 4. Housing fund | 8,897,498.05 | 25,356,868.92 | 25,532,130.72 | 8,722,236.25 |
| 5. Labor union budget and employee education budget | 8,916,100.39 | 10,621,958.51 | 10,807,378.81 | 8,730,680.09 |
| Total | 320,914,272.91 | 619,671,080.97 | 697,918,140.10 | 242,667,213.78 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 24,835,787.74 | 64,937,837.37 | 78,368,996.77 | 11,404,628.34 |
| 2. Unemployment insurance | 939,821.36 | 1,567,740.55 | 2,117,129.52 | 390,432.39 |
| Total | 25,775,609.10 | 66,505,577.92 | 80,486,126.29 | 11,795,060.73 |
25. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Corporate income tax | 367,523,892.84 | 538,655,891.42 |
| Urban maintenance and construction tax | 4,962,554.32 | 10,431,895.61 |
| VAT | 14,469,621.44 | 43,514,198.41 |
| House appliance recycling funds | 25,064,569.00 | 24,202,458.00 |
| Education Surcharge | 3,425,481.66 | 7,895,593.79 |
| Other | 11,146,512.24 | 13,317,486.08 |
| Total | 426,592,631.50 | 638,017,523.31 |
26. Dividends Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Ordinary share dividends | 9,049,503.92 | 6,996,784.06 |
| Total | 9,049,503.92 | 6,996,784.06 |
27. Other Accounts Payable(1) Other Accounts Payable Listed by Nature of Account
Unit: RMB
| Item | Ending balance | Beginning balance |
| Payment for equipment | 86,017,107.85 | 119,000,776.50 |
| Payment for mold | 59,934,550.67 | 66,898,435.10 |
| Margin & cash pledged | 11,821,035.99 | 3,027,766.49 |
| Payment made on behalf | 8,979,515.65 | 3,831,550.67 |
| Third party payment | 8,690,052.55 | 5,278,489.39 |
| Energy-saving subsidy | 6,140,000.00 | |
| Other | 9,615,168.20 | 16,943,845.33 |
| Total | 185,057,430.91 | 221,120,863.48 |
(2) Significant Other Accounts Payable Aging over One Year
Unit: RMB
| Item | Ending balance | Unpaid/Un-carry-over reason |
| Payment for mold | 32,314,272.98 | unsettled due to the agreement of contract |
| Payment for equipment | 17,822,442.22 | unsettled due to the agreement of contract |
| Total | 50,136,715.20 | -- |
28. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Accrued expenses-sale rebate | 1,134,694,687.20 | 1,190,189,575.45 |
| Accrued expenses-sales promotional expense | 535,362,600.86 | 276,458,030.09 |
| Accrued expenses-shipping and handling charges | 224,935,439.82 | 169,965,392.33 |
| Accrued expenses-maintenance and installation charges | 392,472,038.07 | 312,536,901.29 |
| Accrued expenses-brand royalty | 7,921,114.16 | |
| Accrued expenses-waste household appliance maintenance funds | 15,637,977.00 | |
| Accrued expenses-other | 180,813,792.08 | 142,912,728.45 |
| Total | 2,476,199,672.19 | 2,107,700,604.61 |
29. Long-term Payroll Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Termination benefits | 10,291,652.87 | 12,021,620.17 |
| Total | 10,291,652.87 | 12,021,620.17 |
30. Provisions
Unit: RMB
| Item | Ending balance | Beginning balance | Formed reason |
| Product quality assurance | 2,157,992.76 | 2,253,082.25 | |
| Total | 2,157,992.76 | 2,253,082.25 | -- |
31. Share Capital
Unit: RMB
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
| The sum of shares | 632,487,764.00 | 632,487,764.00 | |||||
32. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 1,055,182,718.57 | 1,055,182,718.57 | ||
| Other capital reserves | 197,764,828.23 | 43,846,522.21 | 241,611,350.44 | |
| Of which: equity incentive | 163,325,332.37 | 43,846,522.21 | 207,171,854.58 | |
| Other | 34,439,495.86 | |||
| Total | 1,252,947,546.80 | 43,846,522.21 | 1,296,794,069.01 |
33. Other Comprehensive Income
Unit: RMB
| Item | Beginning balance | Reporting Period | Ending balance | ||||
| Income before taxation in the Current Period | Less: recorded in other comprehensive income in prior period and transferred in profit or loss in the Current Period | Less: Income tax expense | Attributable to owners of the Company as the parent after tax | Attributable to non-controlling interests after tax | |||
| I. Other | 40,496,366.85 | 43,195,466.96 | 57,871,097.59 | -2,201,692.03 | -11,952,098.73 | -521,839.87 | 28,544,268.12 |
| comprehensive income that may subsequently be reclassified to profit or loss | |||||||
| Gain/Loss on changes in fair value of available-for-sale financial assets | 42,711,851.32 | 43,193,150.68 | 57,871,097.59 | -2,201,692.03 | -11,954,415.00 | -521,839.87 | 28,544,268.12 |
| Differences arising from translation of foreign currency-denominated financial statements | -2,215,484.47 | 2,316.27 | 2,316.27 | -2,213,168.20 | |||
| Total of other comprehensive income | 40,496,366.85 | 43,195,466.96 | 57,871,097.59 | -2,201,692.03 | -11,952,098.73 | -521,839.87 | 28,544,268.12 |
34. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 332,594,722.29 | 332,594,722.29 | ||
| Total | 332,594,722.29 | 332,594,722.29 |
35. Retained Profits
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained profits before adjustments | 4,788,564,401.03 | 3,756,517,718.81 |
| Beginning balance of retained profits after adjustments | 4,788,564,401.03 | 3,756,517,718.81 |
| Add: Net profit attributable to owners of the Company as the parent | 902,047,046.42 | 731,540,502.47 |
| Less: dividend of ordinary shares payable | 632,487,764.00 | 474,365,822.97 |
| Ending retained profits | 5,058,123,683.45 | 4,013,692,398.30 |
36. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same Period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 11,213,772,811.33 | 8,049,680,720.75 | 9,694,560,835.56 | 7,052,479,498.41 |
| Other operations | 843,165,474.72 | 800,121,112.27 | 873,500,018.65 | 808,892,313.37 |
| Total | 12,056,938,286.05 | 8,849,801,833.02 | 10,568,060,854.21 | 7,861,371,811.78 |
37. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Urban maintenance and construction tax | 30,884,900.17 | 29,091,665.44 |
| Education Surcharge | 24,140,924.03 | 22,058,158.72 |
| Other | 11,791,878.91 | 13,382,449.58 |
| Total | 66,817,703.11 | 64,532,273.74 |
38. Selling Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Selling expense | 1,769,706,658.94 | 1,533,889,871.40 |
| Total | 1,769,706,658.94 | 1,533,889,871.40 |
39. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Administrative expense | 451,163,055.68 | 328,163,105.40 |
| Total | 451,163,055.68 | 328,163,105.40 |
40. Finance Costs
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Interest expense | 31,353,226.28 | 5,897,953.01 |
| Interest income | -246,342,976.78 | -63,840,314.80 |
| Foreign exchange gains or losses | -18,665,871.63 | 30,775,819.93 |
| Other | 2,303,503.16 | 3,643,344.03 |
| Total | -231,352,118.98 | -23,523,197.84 |
41. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| I. Bad debt loss | 12,061,736.99 | 7,560,737.61 |
| II. Inventory falling price loss | 11,877,851.17 | 26,185,813.40 |
| III. Fixed assets impairment losses | 3,808,897.38 | |
| Total | 23,939,588.16 | 37,555,448.39 |
42. Gain on Changes in Fair Value
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Financial assets at fair value through profit or loss | 4,917,873.13 | |
| Financial liabilities at fair value through profit or loss | -10,070,851.50 | |
| Total | -10,070,851.50 | 4,917,873.13 |
43. Investment Income
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Investment income from disposal of financial assets at fair value through profit or loss | 8,050,775.00 | 2,654,220.00 |
| Investment income from available-for-sale financial assets | 68,851,966.54 | 179,011,662.11 |
| Total | 76,902,741.54 | 181,665,882.11 |
44. Asset Disposal Income
Unit: RMB
| Sources | Reporting Period | Same Period of last year |
| Fixed assets disposal income | 634,455.90 |
45. Other Income
Unit: RMB
| Sources | Reporting Period | Same Period of last year |
| Specialized return | 18,631,803.79 | 15,806,553.77 |
| Other subsidies | 9,339,848.21 | |
| Total | 28,308,152.00 | 15,806,553.77 |
46. Income Tax Expense(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Current income tax expense | 196,118,948.51 | 191,867,580.15 |
| Deferred income tax expense | 29,291,826.97 | -43,621,884.37 |
| Total | 225,410,775.48 | 148,245,695.78 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 1,228,875,285.09 |
| Current income tax expense accounted at statutory/applicable tax rate | 215,323,762.35 |
| Influence of income tax before adjustment | 2,283,020.72 |
| Influence of not deductable costs, expenses and losses | 7,275,617.33 |
| Influence of deductable loss of unrecognized deferred income tax assets in prior period | 528,375.08 |
| Income tax expense | 225,410,775.48 |
47. Other Comprehensive IncomeRefer to Note 33 for details.48. Cash Flow Statement(1) Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Interest income | 19,741,871.26 | 18,617,988.30 |
| Specialized subsidies | 10,686,348.21 | 8,072,556.77 |
| Claim & fine income | 1,872,681.61 | 1,264,590.80 |
| Other | 33,392,058.21 | 18,536,975.82 |
| Total | 65,692,959.29 | 46,492,111.69 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Cash for payments | 261,375,812.90 | 1,343,311,634.84 |
| Other | 9,839,878.51 | 1,138,477.96 |
| Total | 271,215,691.41 | 1,344,450,112.80 |
(3) Cash Generated from Other Investing Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Interest income from structured deposits | 111,282,573.06 | 16,802,196.35 |
| Total | 111,282,573.06 | 16,802,196.35 |
49. Supplemental Information for Cash Flow Statement(1) Supplemental Information for Cash Flow Statement
Unit: RMB
| Supplemental information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities | -- | -- |
| Net profit | 1,003,464,509.61 | 832,760,250.01 |
| Add: Provision for impairment of assets | 23,939,588.16 | 37,555,448.39 |
| Depreciation of fixed assets, oil-gas assets, and productive living assets | 75,295,970.76 | 64,952,458.10 |
| Amortization of intangible assets | 2,619,114.45 | 2,619,069.42 |
| Amortization of long-term prepaid expenses | 4,936,234.86 | 1,681,848.52 |
| Losses on disposal of fixed assets, intangible assets and other long-lived assets (gains: negative) | -634,455.90 | -2,324,085.53 |
| Losses from variation of fair value (gains: negative) | 10,070,851.50 | -4,917,873.13 |
| Finance costs (gains: negative) | -227,392,382.23 | -10,904,243.34 |
| Investment loss (gains: negative) | -76,902,741.54 | -181,665,882.11 |
| Decrease in deferred income tax assets (gains: negative) | 30,082,362.69 | -44,359,565.36 |
| Increase in deferred income tax liabilities | -790,535.70 | 737,680.97 |
| (“-” means decrease) | ||
| Decrease in inventory (gains: negative) | 1,428,158,048.36 | 614,201,149.52 |
| Decrease in accounts receivable generated from operating activities (gains: negative) | -229,740,644.12 | -728,452,220.93 |
| Increase in accounts payable used in operating activities (decrease: negative) | -1,915,599,644.90 | -748,672,061.46 |
| Others | 45,722,746.41 | 24,377,334.69 |
| Net cash generated from/used in operating activities | 173,229,022.41 | -142,410,692.24 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments | -- | -- |
| 3. Net increase/decrease of cash and cash equivalent: | -- | -- |
| Ending balance of cash | 1,495,906,357.47 | 3,096,982,558.92 |
| Less: beginning balance of cash | 1,417,489,071.71 | 4,171,689,917.21 |
| Net increase in cash and cash equivalents | 78,417,285.76 | -1,074,707,358.29 |
(2) Cash and Cash Equivalent
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 1,495,906,357.47 | 1,417,489,071.71 |
| Of which: bank deposits on demand | 1,495,906,357.47 | 1,417,489,071.71 |
| II. Ending balance of cash and cash equivalents | 1,495,906,357.47 | 1,417,489,071.71 |
50. Foreign Currency Monetary Items
Unit: RMB
| Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
| Monetary capital | |||
| Including: USD | 8,666,576.26 | 6.6166 | 57,343,268.48 |
| EUR | 1,151,914.59 | 7.6515 | 8,813,874.49 |
| Accounts receivable | |||
| Including: USD | 164,135,696.04 | 6.6166 | 1,086,020,246.42 |
| EUR | 9,094,964.00 | 7.6515 | 69,590,117.05 |
| JPY | 378,500.00 | 0.05991 | 22,677.45 |
| Accounts payable | |||
| Including: USD | 386,975.97 | 6.6166 | 2,560,465.20 |
| EUR | 61,072.31 | 7.6515 | 467,294.78 |
| JPY | 5,236,912.00 | 0.05991 | 313,764.35 |
VIII. Changes of Consolidation Scope
No such case in Reporting Period.
IX. Equity in Other Entities
1. Equity in Subsidiary(1) Subsidiaries
| Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Way of gaining | |
| Directly | Indirectly | |||||
| Wuxi Little Swan General Electric Appliances Co. , Ltd. | Wuxi | Wuxi | Production | 100.00% | Setting-up | |
| Wuxi Filin Electronics Co. , Ltd. | Wuxi | Wuxi | Production | 73.00% | Setting-up | |
| Jiangsu Little Swan Marketing and Sales Co. , Ltd. | Wuxi | Wuxi | Trading | 99.54% | 0.09% | Setting-up |
| Wuxi Little Swan Import & Export Co. , Ltd. | Wuxi | Wuxi | Import & Export | 88.46% | Setting-up | |
| Little Swan International (Singapore) Co., Ltd. | Singapore | Singapore | Investment | 100.00% | Setting-up | |
| Little Swan (Jingzhou) Electronic Appliances Co., Ltd. | Jingzhou | Jingzhou | Production | 100.00% | Business combination under same control | |
| Hefei Midea Washing Machine Co., Ltd. | Hefei | Hefei | Production | 69.47% | Business combination under same control | |
(2) Significant Not Wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to non-controlling interests | Declaring dividends distributed to non-controlling interests | Ending balance of non-controlling interests |
| Wuxi Filin Electronics Co. , Ltd. | 27.00% | 31,561,769.44 | 304,090,289.33 | |
| Hefei Midea Washing Machine Co., Ltd. | 30.53% | 69,855,693.75 | 969,888,770.32 |
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB’0,000
| Name | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Wuxi Filin Electronics Co. , Ltd. | 160,369.02 | 6,783.01 | 167,152.03 | 54,515.58 | 10.42 | 54,526.00 | 159,685.46 | 6,493.23 | 166,178.69 | 65,449.77 | 15.58 | 65,465.35 |
| Hefei Midea Washing Machine Co., Ltd. | 661,267.77 | 73,451.72 | 734,719.49 | 415,538.14 | 1,497.51 | 417,035.65 | 785,372.27 | 67,388.46 | 852,760.73 | 556,889.47 | 1,314.69 | 558,204.16 |
Unit: RMB’0,000
| Name | Reporting Period | Same period of last year | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Wuxi Filin Electronics Co. , Ltd. | 49,822.87 | 11,689.54 | 11,689.54 | -1,525.98 | 45,315.85 | 11,171.12 | 11,171.12 | -7,281.50 |
| Hefei Midea Washing Machine Co., Ltd. | 537,543.71 | 22,881.00 | 22,710.07 | -72,991.19 | 446,674.46 | 23,274.72 | 21,638.55 | -35,564.58 |
X. Segment Information
Since the Company’s operating revenue, cost of sales, assets and liabilities are mainly related to the manufacturing
and sales of washing machines and relevant products, after considering some factors such as the internalorganizational structure, management requirements and internal report systems, the management holds the opinion
that various companies’ business has obvious similarity within the scope of consolidation. Thus, the segment
report is not prepared.The total income of the Company and its subsidiaries from external transactions in domestic and other countriesor regions, the total non-current assets excluding financial assets and deferred income tax assets in domestic andother countries or regions are listed as follows:
(1) Income from External Transactions
Unit: RMB
| Region | Reporting Period | Same period of last year |
| China | 9,593,374,628.71 | 8,375,128,927.45 |
| Other countries | 2,463,563,657.34 | 2,192,931,926.76 |
| Total | 12,056,938,286.05 | 10,568,060,854.21 |
(2) Total Non-current Assets
Unit: RMB
| Region | 30 June 2018 | 30 June 2017 |
| China | 1,430,729,854.87 | 1,366,095,738.76 |
| Other countries | ||
| Total | 1,430,729,854.87 | 1,366,095,738.76 |
XI. The Risk Related to Financial Instruments
The financial risks the Company faced during operation are: credit risk, market risk (mainly exchange risk andinterest rate risk) and liquidity risk. The overall risk management plan of the Company and its subsidiaries,considering the unpredictability of financial market, aims to reduce the potential negative influence to thefinancial results of the Company and its subsidiaries.
(1) Market Risk(a) Foreign Exchange Risk
The main operation of the Company and its subsidiaries was within the state, which settled by RMB. The foreignassets, liabilities and foreign trade in future (the foreign assets, liabilities and foreign trade in future mainly settledby USD) the Company and its subsidiaries had recognized existed foreign exchange risk. The financial
department of the Company’s headquarter supervised the scope of foreign assets, liabilities and foreign trade in
future of the Company and its subsidiaries to maximally reduce foreign exchange risk , thus the Company and itssubsidiaries might avoid foreign exchange rate in a way of signing forward foreign exchange contracts or currencyexchange contracts.On 30 June 2018 and 31 December 2017, the list of foreign financial assets and foreign financial liabilitiesconverted into RMB held by the Company and its subsidiaries taking RMB as the recording currency waspresented as follows:
Unit: RMB
| Item | Ending balance | ||
| USD | Other foreign curency | Total | |
| Foreign financial assets | |||
| Monetary capital | 57,343,268.48 | 8,813,874.49 | 66,157,142.97 |
| Accounts receivable | 1,086,020,246.42 | 69,612,794.50 | 1,155,633,040.92 |
| Total | 1,143,363,514.90 | 78,426,668.98 | 1,221,790,183.88 |
| Foreign financial liabilities |
| Accounts payable | 2,560,465.20 | 781,059.13 | 3,341,524.33 |
| Total | 2,560,465.20 | 781,059.13 | 3,341,524.33 |
| Item | Beginning balance | ||
| USD | Other foreign curency | Total | |
| Foreign financial assets | |||
| Monetary capital | 191,071,173.12 | 14,916,914.11 | 205,988,087.23 |
| Accounts receivable | 531,578,236.13 | 76,367,051.71 | 607,945,287.84 |
| Total | 722,649,409.25 | 91,283,965.82 | 813,933,375.07 |
| Foreign financial liabilities | 0.00 | ||
| Accounts payable | 36,668,878.79 | 6,033,971.28 | 42,702,850.07 |
| Other accounts payable | 37,060,925.00 | 37,060,925.00 |
| Total | 36,668,878.79 | 43,094,896.28 | 79,763,775.07 |
On June 30, 2018, when RMB appreciates or depreciates by 6% without any changes in other factors, for all kindsof US financial assets and liabilities, there will be an decrease or increase in net profit of about RMB58,180,955(about RMB34,980,000 on 31 December 2017) for the Company.(b) Interest Rate RiskOn 30 June 2018 and 31 December 2017, there were no short-term and long-term interest-bearing debt contractswith floating interest rates in the Company and its subsidiaries, thus the management believed that there was notexisting significant interest rate risk.(2) Credit RiskThe Company and its subsidiaries adopt group classification to manage the credit risk. Credit risk mainly incurredin bank deposit, accounts receivable, other accounts receivable, notes receivable, structured deposits, and financialproducts recorded into other current assets, etc.The bank deposits and structured deposits of the Company and its subsidiaries were deposited in the state-ownedbanks and other large and medium-sized commercial banks, the Company believed that there was not existingsignificant credit risk, and won't lead to any significant losses due to break a contract to the entity.The Company and its subsidiaries entrust commercial bank, trust company, assets management company andother financial institutions to conduct short term low risk finance investment, participate in bank financialproducts, trust plan of trust company, assets management plan of assets management company, the maininvestment direction was financial instrument with the high credit rating, better fluidity, trust products and assetsmanagement plan with prospective earnings, and conducting commercial bank guaranteed finance business withlow risk, stable interest and no more than 1 year investment period in our inter-bank market. The idle fund of theCompany and its subsidiaries used for trust investment was not used to invest in stock and its derivative product,security investment fund and trust investment for security investment purpose and investment relevant to othersecurities.Besides, as for accounts receivable, other accounts receivable and notes receivable, the Company and itssubsidiaries set relevant policy to control credit risk exposure. The Company and its subsidiaries , based on thefinancial situation of the clients, possibility of obtaining guarantee from third party, credit record, and other factorssuch as the recent market situation etc. to evaluate the credit qualification of client and set relevant credit period.The Company and its subsidiaries regularly supervise the credit record of client, as for the client with bad creditrecords, the Company and its subsidiaries will adopt reminder letters, shorten the credit period or cancel creditperiod etc. to ensure the overall credit risk of the Company within control. On 30 June 2018n and 31 December2017, there were no significant overdue accounts receivable.
(3) Liquidity RiskThe Company and its subsidiaries were responsible for their respective cash flow prediction. The head financial
department continuously supervised short-term and long-term capital demands at combination level based on
collecting cash flow prediction of all subsidiaries to ensure to maintain plenty of cash reserve and securitiesavailable for realization at any time.On balance sheet date, each financial liabilities listed by un-discounted contract cash flow according to the duedate were demonstrated as follows:
Unit: RMB
| Item | 30 June 2018 | ||||
| Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total | |
| Notes payable | 3,915,720,273.53 | 3,915,720,273.53 | |||
| Accounts payable | 2,809,609,738.57 | 2,809,609,738.57 | |||
| Dividends payable | 9,049,503.92 | 9,049,503.92 | |||
| Other current-liabilities | 2,476,199,672.19 | 2,476,199,672.19 | |||
| Other accounts payable | 185,057,430.91 | 185,057,430.91 | |||
| Provisions | 2,157,992.76 | 2,157,992.76 | |||
| Total | 9,397,794,611.88 | 9,397,794,611.88 |
| Item | 31 December 2017 | ||||
| Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total | |
| Short-term borrowings | 81,393,672.34 | 81,393,672.34 | |||
| Notes payable | 2,805,804,600.41 | 2,805,804,600.41 | |||
| Accounts payable | 3,827,025,700.10 | 3,827,025,700.10 | |||
| Dividends payable | 6,996,784.06 | 6,996,784.06 |
| Other current-liabilities | 2,107,700,604.61 | 2,107,700,604.61 | |||
| Other accounts payable | 221,120,863.48 | 221,120,863.48 | |||
| Provisions | 2,253,082.25 | 2,253,082.25 |
| Total | 9,052,295,307.25 | 9,052,295,307.25 |
XII. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | -- | -- | -- | -- |
| Other | 1,093,193,150.68 | 1,093,193,150.68 | ||
| Derivative financial liabilities | 4,800,613.47 | 4,800,613.47 | ||
| II. Inconsistent fair value measurement | -- | -- | -- | -- |
2. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 2
On 30 June 2018, financial liabilities with fair value measurement items at level 2 were all forward foreignexchange contracts whose fair value were determined based on the current market prices.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 3
On 30 June 2018 and 31 December 2017, financial assets with fair value measurement items at level 3 were all thebreak-even floating income financial product investment, whose fair values were recognized through valuationtechnique.
4. Explain the Reason for Conversion and the Policy Governing when the Conversion Happens ifConversion Happens among Consistent Fair Value Measurement Items at Different Levels
The incurred date leading to events of conversion between different levels was recognized as the time-point ofconversion between different levels. There was no conversion between level 1 and level 2 in the Current Period.
5. Change in Financial Assets at Level 3
Unit: RMB
| Item | Financial product investment |
| 1 January 2018 | 3,792,871,097.59 |
| Purchase | - |
| Sale | -2,685,000,000.00 |
| Total current gains | -14,677,946.91 |
| -gains recorded into profit or loss | -57,871,097.59 |
| -gains recorded into other comprehensive income | 43,193,150.68 |
| 30 June 2018 | 1,093,193,150.68 |
| Changes in unrealized gains or losses arising from the recording of assets still held on 30 June 2018 in profit or loss of 2017 | - |
| Gain on changes in fair value | - |
| Item | Financial product investment |
| 1 January 2017 | 5,994,142,671.24 |
| Purchase | 4,745,000,000.00 |
| Sale | -6,900,000,000.00 |
| Total current gains | -46,271,573.65 |
| -gains recorded into profit or loss | -104,142,671.24 |
| -gains recorded into other comprehensive income | 57,871,097.59 |
| 31 December 2017 | 3,792,871,097.59 |
| Changes in unrealized gains or losses arising from the recording of assets still held on 31 December 2017 in profit or loss of 2016 | - |
| Gain on changes in fair value | - |
Relevant information on fair value measurement at level 3
Unit: RMB
| Item | Fair value on 30 June 2018 | Valuation technique | Unobservable input value | Scope | Relationship with fair value | Observable/unobservable |
| Available-for-sale financial assets | ||||||
| Financial products | 1,093,193,150.68 | Discounted cash flow | Expected annual yield | 4.7%-5% | Positive | Unobservable |
| Item | Fair value on 31 December 2017 | Valuation technique | Unobservable input value | Scope | Relationship with fair value | Observable/unobservable |
| Available-for-sale financial assets | ||||||
| Financial products | 3,792,871,097.59 | Discounted cash flow | Expected annual yield | 4.2%-5.25% | Positive | Unobservable |
6. Fair Value of Financial Assets and Liabilities Not Measured at Fair ValueFinancial assets and liabilities of the Company and its subsidiaries measured at amortized cost mainly include:
notes receivable, accounts receivable, other current assets-structured deposits, other accounts receivable, notespayable, accounts payable, other accounts payable and other current liabilities.Available-for-sale financial assets measured at cost was the unlisted share investment with no offer in activemarket and larger variation range of its reasonable valuation and each fair value probability cannot be reasonablyrecognized, thus, the fair value cannot be reliably measured.There is no significant variance between the carrying value and fair value of financial assets and liabilities for theCompany and its subsidiaries on 30 June 2018 and 31 December 2017. .
XIII. Capital Management
The objective of the capital management policy of the Company and its subsidiaries is to guarantee continuingoperation of the Company and its subsidiaries, and then to offer returns to shareholders and benefit otherstakeholders when maintaining the optimized capital structure to reduce the capital cost.To maintain or adjust the capital structure, the Company and its subsidiaries may adjust the amount of dividendspaid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce liabilities.The Company and its subsidiaries, not subject to external compulsory capital requirement, supervised the capitalvia the asset-liabilities ratio (ratio of total liabilities and total assets).
| Item | 30 June 2018 | 31 December 2017 |
| Asset-liability ratio | 55.89% | 61.49% |
XIV. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
| Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company (%) | Proportion of voting rights owned by the Company as the parent against the Company (%) |
| MIDEA GROUP CO., LTD. | Foshan Guangdong | Operating consumer appliances, HVAC, robots and automatic system, intelligent supply chain etc. | 6,628,613,347.00 | 52.67% | 52.67% |
Notes of the Company as the parent of the Company:
The ultimate controller of the Company is He Xiangjian.
2. Subsidiaries of the CompanyRefer to Note IX for details.3. Information on Other Connected Parties
| Name | Relationship |
| Ningbo Midea United Material Supply Co., Ltd | Under control of controlling shareholder of the Company |
| Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Group E-commerce Co., Ltd. | Under control of controlling shareholder of the Company |
| Zhejiang Meizhi Compressor Co. Ltd. | Under control of controlling shareholder of the Company |
| Guangdong Midea Hicks Electronics Co., Ltd. | Under control of controlling shareholder of the Company |
| Guangdong Midea Precise Mould Technology Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Smart Home Technology Co., Ltd | Under control of controlling shareholder of the Company |
| Hefei Hua Ling Share Holding Co. , Ltd. | Under control of controlling shareholder of the Company |
| Wuhu Midea Household Electric Appliance Manufacturing Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Electric Trading (Singapore) Co. Pte. Ltd. | Under control of controlling shareholder of the Company |
| MIDEA SCOTT & ENGLISH ELECTRONICS SDN BHD | Under control of controlling shareholder of the Company |
| MIDEA CONSUMER ELECTRIC (VIETNAM) CO., LTD. | Under control of controlling shareholder of the Company |
| PT. MIDEA PLANET INDONESIA | Under control of controlling shareholder of the Company |
| ORIENT HOUSEHOLD APPLIANCES LTD. | Under control of controlling shareholder of the Company |
| Hefei Midea Material Supply Co., Ltd. | Under control of controlling shareholder of the Company |
| Guangdong Midea Household Electric Appliance manufacturing Co., Ltd. | Under control of controlling shareholder of the Company |
| Guangdong Midea Refrigeration Equipment Co., Ltd | Under control of controlling shareholder of the Company |
| Chongqing Midea Refrigeration Equipment Co., Ltd | Under control of controlling shareholder of the Company |
| Guangdong Midea Group Wuhu Refrigeration Equipment Co., Ltd. | Under control of controlling shareholder of the Company |
| Hubei Midea Refrigerator Co., Ltd. | Under control of controlling shareholder of the Company |
| Hefei Midea Refrigerator Co., Ltd. | Under control of controlling shareholder of the Company |
| Guangdong Midea Environmental Appliance Manufacturing Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Group Finance Co., Ltd. | Under control of controlling shareholder of the Company |
| Foshan Midea Qinghu Water Purification Equipment Co., Ltd. | Under control of controlling shareholder of the Company |
| Wuhu Welling Motor Marketing Co., Ltd. | Under control of controlling shareholder of the Company |
| Huai'an Welling Motor Manufacturing Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Welling Motor Technology (Shanghai) Co., Ltd. | Under control of controlling shareholder of the Company |
| Shenzhen Midea Payment Technology Co., Ltd. | Under control of controlling shareholder of the Company |
| Annto Zhilian Technology Co., Ltd. | Under control of controlling shareholder of the Company |
| TOSHIBA LIFESTYLE PRODUCTS&SERVICES CORPORATION | Under control of controlling shareholder of the Company |
| Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. | Under control of controlling shareholder of the Company |
| Ningbo Annto Zhilian Technology Co., Ltd. | Under control of controlling shareholder of the Company |
| Jiangxi Midea Guiya Lighting Co., Ltd. | Under control of controlling shareholder of the Company |
| Midea Group Wuhan Refrigeration Equipment Co., Ltd. | Under control of controlling shareholder of the Company |
| MIDEA MIDDLE EAST | Under control of controlling shareholder of the Company |
| Wuhu Midea Kitchen & Bathroom Appliance Manufacturing Co., Ltd. | Under control of controlling shareholder of the Company |
| Guangzhou Hualing Refrigeration Equipment Co., Ltd. | Under control of controlling shareholder of the Company |
| MIDEA AUSTRALIA PTY LTD | Under control of controlling shareholder of the Company |
| CARRIER MIDEA INDIA PRIVATE LIMITED | Under control of controlling shareholder of the Company |
| MIDEA ELECTRIC TRADING (THAILAND) CO., LTD. | Under control of controlling shareholder of the Company |
4. List of Connected Transactions(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten Thousand Yuan)Information on acquisition of goods and reception of labor service
Unit: RMB
| Connected party | Content | Reporting Period | The approval trade credit | Whether exceed trade credit or not | Same period of last year |
| Wuhu Welling Motor Marketing Co., Ltd. | Electrical Machine | 513,218,519.99 | 1,410,000,000.00 | No | 501,214,171.41 |
| Ningbo Midea United Material Supply Co., Ltd. | Materials | 982,391,580.79 | 2,900,000,000.00 | No | 824,485,276.15 |
| Ningbo Annto Zhilian Technology Co., Ltd. | Warehousing & logistics | 61,694,435.77 | 1,100,000,000.00 | No | 366,086,063.48 |
| Annto Zhilian Technology Share Holding Co., Ltd. | Warehousing & Logistics | 336,696,450.38 | 54,675,276.23 | ||
| Zhejiang Meizhi Compressor Co. Ltd. | Compressor | 9,461,525.70 | 20,000,000.00 | No | 7,043,483.25 |
| Midea Group E-commerce Co., Ltd. | Promotion & Marketing | 22,297,851.57 | 125,000,000.00 | No | 22,380,192.57 |
| Ningbo Midea United Material Supply Co., Ltd | Chip & HIFI module | 17,884,517.65 | 65,000,000.00 | No | 33,583,425.56 |
| Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. | After-sales service | 196,390,679.14 | 395,000,000.00 | No | 132,504,096.51 |
| Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. | Washing machine | 31,458,756.25 | 280,000,000.00 | No | |
| Guangdong Midea Precise Mould Technology Co., Ltd. | Mould | 9,698,119.68 | 25,000,000.00 | No | |
| Midea Smart Home Technology Co., Ltd | Service charge | 559,969.12 | 25,000,000.00 | No | 144,785.68 |
| Guangdong Midea Refrigeration Equipment Co., Ltd | Service charge | 9,854,722.96 | |||
| Shenzhen Midea Payment Technology Co., Ltd. | Service charge | 88,088.80 | |||
| Shenzhen Shuzhi Scene Position Technology Co., Ltd. | Service charge | 916,147.89 |
| Guangdong Midea Intelligent Robot Co., Ltd. | Service charge | 25,042.57 | |||
| Guangdong Midea Hicks Electronics Co., Ltd. | Chip & HIFI module | 513,334.92 | |||
| Midea Group Co., Ltd. | Service charge | 19,999.98 | |||
| Total | 2,192,636,408.26 | 1,942,650,105.74 |
Information of sales of goods and provision of labor service
Unit: RMB
| Connected party | Content | Reporting Period | The approval trade credit | Whether exceed trade credit or not | Same period of last year |
| Midea Electric Trading (Singapore) Co. Pte. Ltd. | Washing machine & Fittings | 1,727,394,796.55 | 4,250,000,000 | No | 1,594,543,430.93 |
| MIDEA SCOTT&ENGLISH ELECTRONIICS SDN.BHD | Washing machine & Fittings | 53,263,471.91 | 80,000,000 | No | 45,312,856.38 |
| PT.Midea Planet Indonesia | Washing machine & Fittings | 23,579,838.36 | 50,000,000 | No | 15,461,735.27 |
| MIDEA CONSUMER ELECTRIC (VIETNAM)COM.,LTD | Washing machine & Fittings | 16,073,292.50 | 50,000,000 | No | 6,144,209.34 |
| Orient Household Appliances Ltd. | Washing machine & Fittings | 12,206,159.82 | 40,000,000 | No | 18,771,850.49 |
| Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. | Fittings | 13,930,794.77 | 25,000,000 | No | 18,416,401.64 |
| Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. | Materials | 7,552,897.23 | 25,000,000 | 548,124.87 | |
| TOSHIBA LIFESTYLE PRODUCTS & SERVICES CORPORATION | Washing machine | 9,133,040.59 | 30,000,000 | No | 20,757,917.67 |
| Annto Zhilian Technology Co., Ltd. | Washing machine | 2,768,102.02 | |||
| Midea Group E-commerce Co., Ltd. | Washing machine | 605,688.19 | |||
| Guangdong Midea Zhilian Home Technology Co., Ltd. | Washing machine | 64,659.49 | |||
| Midea Middle East | Washing machine & Fittings | 1,921,564.33 | |||
| Ningbo Annto Zhilian Technology Co., Ltd. | Washing machine | 1,855,571.90 | |||
| Hefei Hua Ling Share Holding Co. , Ltd. | Washing machine & Fittings | 161,538.46 | |||
| Total | 1,866,572,741.43 | 1,723,895,201.28 |
(2) Information on Connected LeaseThe Company was lessor:
Unit: RMB
| Name of lessee | Category of leased assets | The lease income confirmed in the Reporting Period | The approval trade credit | Whether exceed trade credit or not | The lease income confirmed in the same period of last year |
| Hefei Hua Ling Share Holding Co., Ltd. | House renting | 6,305,409.36 | 15,000,000.00 | No | 5,641,036.82 |
5. Accounts Receivable and Payable of Connected Party(1) Accounts Receivable
Unit: RMB
| Item | Connected party | Ending balance | Beginning balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Accounts receivable | Midea Electric Trading (Singapore) Co. Pte. Ltd. | 808,990,082.77 | 40,449,504.14 | 589,756,109.51 | 29,487,805.48 |
| Accounts receivable | MIDEA SCOTT&ENGLISH ELECTRONILCS SDN.BHD | 27,689,915.81 | 1,384,495.79 | 7,962,102.83 | 398,105.14 |
| Accounts receivable | PT MIDEA PLANET INDONESIA | 19,444,985.13 | 972,249.26 | 9,792,445.24 | 489,622.26 |
| Accounts receivable | MIDEA CONSUMER ELECTRIC (VIETNAM)COM.,LTD | 16,078,525.03 | 803,926.25 | 11,868,764.19 | 593,438.21 |
| Accounts receivable | Orient Household Appliances Ltd. | 11,902,760.39 | 595,138.02 | 2,078,970.94 | 103,948.55 |
| Accounts receivable | Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. | 3,293,563.20 | 164,678.16 | 4,748,685.08 | 237,434.25 |
| Accounts receivable | Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. | 1,115,712.81 | 55,785.64 | ||
| Accounts receivable | Midea Group E-commerce Co., Ltd. | 208,234.95 | 10,411.75 | 125,900.58 | 6,295.03 |
| Accounts receivable | Annto Zhilian Technology Co., Ltd. | 1,000.00 | 50.00 | 52,895.00 | 2,644.75 |
| Accounts receivable | TOSHIBA LIFESTYLE PRODUCTS & SERVICES CORPORATION | 8,103,283.44 | 405,164.17 | ||
| Total | 888,724,780.09 | 44,436,239.00 | 634,489,156.81 | 31,724,457.84 | |
| Other accounts receivable | Shenzhen Midea Payment Technology Co., Ltd. | 6,706,867.80 | 335,343.39 | 10,520,299.96 | 526,015.00 |
| Total | 6,706,867.80 | 335,343.39 | 10,520,299.96 | 526,015.00 | |
| Prepayments | Ningbo Midea United Material Supply Co., Ltd | 26,999,276.18 | 7,407,695.59 | ||
| Prepayments | Midea Group E-commerce Co., Ltd. | 4,553,229.49 | 3,354,919.77 | ||
| Prepayments | Shenzhen Shuzhi Scene Position Technology Co., Ltd. | 1,050,000.00 | |||
| Total | 32,602,505.67 | 11,072,455.36 |
(2) Accounts Payable
Unit: RMB
| Item | Connected party | Ending carrying balance | Beginning carrying balance |
| Accounts payable | Wuhu Welling Motor Marketing Co., Ltd. | 146,638,887.47 | 146,551,812.62 |
| Accounts payable | Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. | 21,718,943.46 | 38,171,577.41 |
| Accounts payable | Guangdong Midea Precise Mould Technology Co., Ltd. | 15,315,177.94 | 5,995,300.00 |
| Accounts payable | Ningbo Midea United Material Supply Co., Ltd. | 45,879,499.32 | 7,300,152.98 |
| Accounts payable | Zhejiang Meizhi Compressor Co. Ltd. | 3,984,880.19 | 5,500,676.15 |
| Accounts payable | Annto Zhilian Technology Co., Ltd. | 174,836.38 | |
| Accounts payable | Foshan Midea Qinghu Water Purification Equipment Co., Ltd. | 88,452.00 | 88,452.00 |
| Accounts payable | Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. | 79,899.40 | 51,350.00 |
| Accounts payable | Ningbo Annto Zhilian Technology Co., Ltd. | 69,785.77 | 68.38 |
| Accounts payable | Wuhu Midea Household Electric Appliance Manufacturing Co., Ltd. | 6,800.00 | 6,800.00 |
| Accounts payable | Midea Smart Home Technology Co., Ltd. | 1,216,403.00 | |
| Accounts payable | Guangdong Midea Environmental Appliance Manufacturing Co., Ltd. | 13,951.00 | |
| Total | 233,957,161.93 | 204,896,543.54 | |
| Other accounts payable | Guangdong Midea Refrigeration Equipment Co., Ltd. | 119,866.94 | 351,404.33 |
| Other accounts payable | Midea Welling Motor Technology (Shanghai) Co., Ltd. | 840,075.83 | 90,387.26 |
| Other accounts payable | Guangdong Midea Precise Mould Technology Co., Ltd. | 100,000.00 | |
| Other accounts payable | Guangdong Midea Household Electric Appliance Manufacturing Co., Ltd. | 61,458.90 | |
| Total | 959,942.77 | 603,250.49 |
XV. Stock Payment
1. SummaryMidea Group has implemented five stock options and two restricted stock incentive plans for middle and senior
management and technical backbones of the Group and its subsidiaries. At present, three exercise period of thefirst and second period of the stock option incentive plan, the first and second exercise period of the third periodof the stock option incentive plan, the first exercise period of the fourth period of the stock option incentive planand the first lifting restriction on the first restricted stock have reached the right condition.By the end of the Reporting Period, 33 personnel from the Company and its subsidiaries participated in the firstphase of stock option incentive plan with a total of 7.47 million stock options, 38 personnel participated in thesecond phase of stock option incentive plan with a total of 5.985 million stock options, 61 personnel participatedin the third phase of stock option incentive plan with a total of 8.325 million stock options, 117 personnelparticipated in the fourth phase of stock option incentive plan with a total of 7.44 million stock options, 125personnel participated in the fifth phase of stock option incentive plan with a total of 4.84 million stock options,14 personnel participated in the first phase of restricted stock incentive plan with a total of 2.07 million restrictedstocks, and 21 personnel participated in the second phase of restricted stock incentive plan with a total of 1.34million restricted stocks.
2. Influence of Stock Payment on Financial Situation and Operating ResultAs of 30 June 2018, the total amount of expense for equity-settled stock payment was recognized as
RMB45,722,746.41 (as of 30 June 2017: RMB24,377,334.69). As of 30 June 2018, the accumulated amount ofcapital reserve used for equity-settled stock payment was RMB207,171,854.58 (31 December 2017:
RMB163,325,332.37).
XVI. Commitments and Contingency
1. Significant CommitmentsAs of 30 June 2018, there were no significant commitments to be disclosed.2. ContingencyThere was no contingency to be disclosed.
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable(1) Accounts Receivable Disclosed by Category
Unit: RMB’0,000
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable with significant single amount for which bad debt provision separately accrued | 46,907.02 | 24.99% | 46,907.02 | 143,493.46 | 49.87% | 143,493.46 | ||||
| Accounts receivable withdrawn bad debt provision according to credit risks characteristics: | 140,815.54 | 75.01% | 7,040.78 | 5.00% | 133,774.76 | 144,237.89 | 50.13% | 7,211.89 | 5.00% | 137,026.00 |
| Total | 187,722.56 | 100.00% | 7,040.78 | 5.00% | 180,681.78 | 287,731.35 | 100.00% | 7,211.89 | 2.51% | 280,519.46 |
Accounts receivable with single significant amount for which bad debt provision separately accrued at the end ofthe period
□ Applicable √ Not applicable
In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision:
Unit: RMB
| Aging | Ending balance | ||
| Accounts receivable | Bad debt provision | Withdrawal proportion | |
| Within one year | 1,408,155,396.79 | 70,407,769.85 | 5.00% |
| Total | 1,408,155,396.79 | 70,407,769.85 | 5.00% |
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodThe withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB1,711,175.28.(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Name of customer | Balance | Bad debt provision | Proportion (%) |
| Total of top 5 accounts receivable in ending balance | 1,138,136,736.87 | 56,906,836.84 | 60.63% |
2. Other Accounts Receivable(1) Other Accounts Receivable Disclosed by Category
Unit: RMB’0,000
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Other accounts receivable with significant single amount for which bad debt provision separately accrued | 7,578.75 | 76.31% | 7,545.67 | 99.56% | 33.08 | 7,627.85 | 71.55% | 7,545.57 | 98.92% | 82.28 |
| Other accounts receivable withdrawn bad debt provision according to credit risks characteristics | 2,341.88 | 23.69% | 182.68 | 7.80% | 2,159.21 | 3,032.33 | 28.45% | 217.30 | 7.17% | 2,815.03 |
| Total | 9,920.63 | 100.00% | 7,728.34 | 77.90% | 2,192.29 | 10,660.18 | 100.00% | 7,762.87 | 72.82% | 2,897.30 |
Other receivable with single significant amount for which bad debt provision separately accrued at the end of the
period：
Unit: RMB
| Other accounts receivable (unit) | Ending balance | |||
| Other accounts | Bad debt | Withdrawal | Withdrawal reason | |
| receivable | provision | proportion | ||
| Jiangsu Little Swan Marketing and Sales Co. , Ltd. | 74,295,013.55 | 74,295,013.55 | 100.00% | Irrecoverable |
| Wuxi Little Swan Import & Export Co., Ltd. | 1,161,652.95 | 1,161,652.95 | 100.00% | Irrecoverable |
| Little Swan International (Singapore) Co., Ltd. | 330,830.00 | |||
| Total | 75,787,496.50 | 75,456,666.50 | -- | -- |
In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision:
Unit: RMB
| Aging | Ending balance | ||
| Other accounts receivable | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 22,006,622.30 | 1,100,331.12 | 5.00% |
| 1 to 2 years | 426,008.00 | 42,600.80 | 10.00% |
| 2 to 3 years | 160,400.00 | 48,120.00 | 30.00% |
| Over 3 years | 825,800.00 | 635,700.00 | 76.98% |
| Total | 23,418,830.30 | 1,826,751.92 | 7.80% |
Notes:
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodThe withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB346,288.40.(3) Other Account Receivable Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Intercourse funds with subsidiaries | 75,787,496.50 | 76,278,456.92 |
| Deposits in third-party payment platforms | 16,939,293.28 | 26,047,303.64 |
| Margin & Cash pledge | 2,244,821.48 | 1,404,000.00 |
| Borrowings by employees | 4,155,862.28 | 2,439,630.53 |
| Other | 78,853.27 | 432,364.08 |
| Total | 99,206,326.81 | 106,601,755.17 |
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Jiangsu Little Swan Marketing and Sales Co. , Ltd. | Intercourse funds | 74,295,013.55 | Over five years | 74.89% | 74,295,013.55 |
| Alipay (China) Network Technology Co., Ltd. | Deposits in third-party payment platforms | 11,300,245.09 | Within one year | 11.39% | 565,012.25 |
| Shenzhen Midea Payment Technology Co., Ltd. | Deposits in third-party payment platforms | 3,891,703.86 | Within one year | 3.92% | 194,585.19 |
| Wuxi Little Swan Import & Export Co., Ltd. | Intercourse funds | 1,161,652.95 | Over five years | 1.17% | 1,161,652.95 |
| Chinabank Payments | Deposits in third-party payment platforms | 1,038,920.97 | Within one year | 1.05% | 51,946.06 |
| Total | -- | 91,687,536.42 | -- | 76,268,210.00 |
3. Long-term Equity Investment
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Investment to subsidiaries | 1,433,285,041.57 | 475,050,000.00 | 958,235,041.57 | 1,433,285,041.57 | 475,050,000.00 | 958,235,041.57 |
| Total | 1,433,285,041.57 | 475,050,000.00 | 958,235,041.57 | 1,433,285,041.57 | 475,050,000.00 | 958,235,041.57 |
Investment to subsidiaries
Unit: RMB
| Investee | Beginning balance | Increase | Decrease | Ending balance | Depreciation reserve withdrawn | Ending balance of depreciation reserve |
| Wuxi Little Swan Import & Export Co., Ltd. | 57,500,000.00 | 57,500,000.00 | 57,500,000.00 | |||
| Jiangsu Little Swan Marketing and Sales Co. , Ltd. | 417,550,000.00 | 417,550,000.00 | 417,550,000.00 | |||
| Wuxi FILIN Electronics Co., Ltd. | 25,660,308.10 | 25,660,308.10 |
| Wuxi Little Swan General Appliance Co., Ltd. | 89,062,000.00 | 89,062,000.00 | ||||
| Little Swan (Jingzhou) Sanjin Electrical Appliance Co., Ltd. | 11,869,431.12 | 11,869,431.12 | ||||
| Little Swan International (Singapore) Co., Ltd. | 681,050.00 | 681,050.00 | ||||
| Hefei Midea Washing Machine Co., Ltd. | 830,962,252.35 | 830,962,252.35 | ||||
| Total | 1,433,285,041.57 | 1,433,285,041.57 | 475,050,000.00 |
4. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 7,979,065,489.12 | 5,959,888,669.74 | 7,187,874,729.64 | 5,451,504,491.74 |
| Other operations | 476,135,279.59 | 458,370,511.58 | 571,348,362.67 | 544,495,540.84 |
| Total | 8,455,200,768.71 | 6,418,259,181.32 | 7,759,223,092.31 | 5,996,000,032.58 |
5. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Investment income generated from disposal of financial assets at fair value through profit or loss | 5,554,875.00 | 1,507,720.00 |
| Investment income generated from available-for-sale financial assets | 42,302,112.09 | 91,851,796.82 |
| Total | 47,856,987.09 | 93,359,516.82 |
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Unit: RMB
| Item | Amount | Explanation |
| Gains/losses on the disposal of non-current assets | 634,455.90 | |
| Profit/loss on fair value changes of transactional financial assets and liabilities & investment income from disposal of trading financial assets and liabilities as well as financial assets available-for-sale, except for effective | -2,020,076.50 |
| hedges related to routine operations of the Company | ||
| Other | 16,252,069.24 | |
| Less: Income tax effects | 2,956,041.69 | |
| Non-controlling interests effects | 1,654,422.90 | |
| Total | 10,255,984.05 | -- |
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition inthe Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the Company | 12.21% | 1.43 | 1.43 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit and loss | 12.07% | 1.41 | 1.41 |
Wuxi Little Swan Company Limited
8 August 2018