Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2023
August 2023
Chapter 1 Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, as well as the directors, supervisors and senior management of HangzhouRobam Appliances Co., Ltd. (the Company) hereby guarantee that there are no false representations, misleading statements, ormaterial omissions in this Semi-Annual Report (“the Report”), and are severally and jointly liable for the authenticity, accuracyand completeness of the information contained herein.Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’s accounting, and Zhang Guofu,the head of the accounting department (the accountant in charge) hereby declare and warrant that the financial report contained inthe Report is authentic, accurate, and complete.
All the directors attended a Board meeting during which they reviewed the Report.
The Company is exposed to risks such as fluctuations in the real estate market policies, fluctuations in raw material prices andintensified market competition. Investors are advised to be aware of the investment risks.
The Company does not plan to distribute cash dividends or bonus shares, or convert capital reserve into capital stock.
Contents
Chapter 1 Important Notes, Contents and Interpretations ...... 1
Chapter 2 Company Profile and Major Financial Indicators ...... 3
Chapter 3 Management Discussion and Analysis ...... 6
Chapter 4 Corporate Governance ...... 15
Chapter 5 Environmental and Social Responsibilities ...... 18
Chapter 6 Significant Matters ...... 19
Chapter 7 Changes in Shares and Shareholders ...... 23
Chapter 8 Preferred Shares ...... 28
Chapter 9 Bonds ...... 29
Chapter 10 Financial Report ...... 30
Documents Available for ReferenceI. Financial statement signed by the legal representative, the person in charge of accounting and the head of the accountingdepartment and affixed with seal.II. Original copies of documents and announcements of the Company published in the newspaper designated by ChinaSecurities Regulatory Commission during the reporting period.III. The Semi-Annual Report 2023 signed by the legal representativeIV. Other information.
Interpretations
| Item | refer(s) to | Contents |
| The Company, Company, Robam Appliances | refer to | Hangzhou Robam Appliances Co., Ltd. |
| MingQi | refers to | Hangzhou MingQi Electric Co., Ltd. |
| Kinde Subsidiary | refers to | Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. |
| Robam Group | refers to | Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company |
| The reporting period | refers to | The first half of 2023 |
| AVC | refers to | Beijing All View Cloud Data Technology Co., Ltd. |
Chapter 2 Company Profile and Major Financial IndicatorsI. Company Profile
| Stock abbreviation | Robam | Stock code | 002508 |
| Stocks traded on | Shenzhen Stock Exchange | ||
| Chinese name of the Company | Hangzhou Robam Appliances Co., Ltd. | ||
| Short Chinese name of the Company (if any) | Robam | ||
| Short English name of the Company (if any) | ROBAM | ||
| Legal representative of the Company | Ren Jianhua | ||
II. Contact Person and Contact Information
| Secretary of the Board of Directors | Representative of securities affairs | |
| Name | Wang Gang | Jiang Yu |
| Contact address | No. 592, Linping Avenue, Linping District, Hangzhou City, Zhejiang Province | No. 592, Linping Avenue, Linping District, Hangzhou City, Zhejiang Province |
| Telephone | 0571--86187810 | 0571--86187810 |
| Fax | 0571--86187769 | 0571--86187769 |
| wg@robam.com | jy@robam.com |
III. Other Information
1. Contact information
Whether the registered address, office address and zip code as well as the website and email address of the Company changedduring the reporting period?
□Applicable ?Not applicable
There were no changes in the registered address, office address and zip code as well as the website and email address of theCompany during the reporting period. For details, please refer to the Annual Report 2022.
2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□Applicable ? Not applicable
During the reporting period, there were no changes in the website of stock exchange and name and website of media designatedfor information disclosure of the semi-annual report and the location for filing the semi-annual report of the Company. For details,please refer to the Annual Report 2022.
3.Other information
Whether other relevant information changed during the reporting period?
□Applicable ? Not applicable
IV. Key Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of previous years?
□ Yes? No
| The reporting period | The same period last year | YoY change | |
| Operating Income (RMB) | 4,934,869,800.15 | 4,444,310,099.69 | 11.04% |
| Net profit attributable to shareholders of the listed company (RMB) | 829,718,350.69 | 723,549,381.25 | 14.67% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses (RMB) | 746,691,977.38 | 635,845,084.07 | 17.43% |
| Net cash flow from operating activities (RMB) | 959,732,853.23 | 322,855,122.33 | 197.26% |
| Basic earnings per share (EPS) (RMB/share) | 0.87 | 0.76 | 14.47% |
| Diluted EPS (RMB/share) | 0.87 | 0.76 | 14.47% |
| Weighted average return on net assets | 8.24% | 8.05% | An increase of 0.19% |
| End of the reporting period | End of last year | Change | |
| Total assets (RMB) | 15,376,337,927.71 | 15,039,825,287.53 | 2.24% |
| Net assets attributable to shareholders of the listed company (RMB) | 10,093,608,301.19 | 9,732,463,766.91 | 3.71% |
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Whether there are differences in the net profit and net asset disclosed in the Financial Report underInternational Accounting Standards (IAS) and China’s accounting standards?
□Applicable ?Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standardsduring the reporting period.
2. Whether there are differences in the net profit and net asset disclosed in the Financial Report underforeign accounting standards and China’s accounting standards during?
□Applicable ?Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards andChina’s accounting standards during the reporting period.VI. Items and Amounts of Non-recurring Gains and Losses
?Applicable □Not applicable
In RMB
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) | -576,982.36 | |
| Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) | 60,521,206.11 | |
| Reversal of impairment provision for accounts receivable tested for impairment separately | 38,556,641.14 | |
| Other non-operating revenues and expenses except the above items | 1,354,348.96 | |
| Less: Affected amount of income tax | 15,524,210.60 | |
| Affected amount of minority shareholders’ equity (after tax) | 1,304,629.94 | |
| Total | 83,026,373.31 |
Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Profits and Losses (referred toas “Announcement No.1”) are defined as recurring profits and losses?Applicable ?Not applicable
| Item | Amount | Reasons |
| VAT exemption, reduction or refund | 9,453,997.74 | National tax policy, regular business |
| Refund of individual income tax handling fee | 684,354.91 | National tax policy, regular business |
| Total | 10,138,352.65 | — |
Chapter 3 Management Discussion and AnalysisI. Main Businesses during the Reporting PeriodIn the first half of 2023, with the gradual implementation of national macroeconomic policies, the real estateindustry has shown a gradual recovery in prosperity, and the kitchen appliance industry has experienced a moderaterebound overall. In terms of the retail channel, as shown in AVC monthly data report based on offline retail marketmonitoring (“AVC Offline Report”), the year-on-year (YoY) growth of the retail sales of the main categories of kitchenappliances, i.e. range hoods and gas stoves, registered 7.6% and 2.2% respectively. In terms of the e-commerce channel,as shown in AVC monthly data report based on online retail market monitoring (“AVC Online Report”), the YoYgrowth of the retail sales of the kitchen appliances package registered 14.6%. In terms of the engineering channel, asshown in the AVC Real Estate Big Data (“AVC Real Estate Report”), due to the sluggish sales of new houses, therewere 375,800 sets of newly launched houses with fine decoration in the first half of the year, a YoY decrease of 45.1%;the penetration rate of fine decoration projects was 37.7%, a decrease of 2.4 percentage points compared to that in theprevious year. The installation rates of range hoods and gas stoves were 96.4% and 96.3% respectively, which remainbasically unchanged compared to the same period last year; the penetration rate of dishwashers was 38.5%, an increaseof 7.1 percentage points compared to the same period last year. In the first half of 2023, thanks to the implementation ofthe “ensuring timely delivery of presold homes” policy, the area of completed commercial residential buildings reached
246.036 million square meters, a YoY growth of 18.5%. It is expected that 2023 will become a significant year ofhousing delivery in the market.The Company has a solid leading position in the industry. According to the AVC Offline Report, the retail salesand its market share of Robam range hood were 31.0% and 25.8% respectively, while the retail sales and its marketshare of Robam gas stove were 30.4% and 23.1% respectively. As shown in the AVC Online Report, the retail sales andits market share of Robam kitchen appliance package were 32.0% and 24.6% respectively, all the above indexesranking first in the industry. In the first half of 2023, closely focusing on the annual business philosophy of “Creating aDream for Long Journey, Winning through Innovation - Creating a New Future for Digital Kitchen Appliances”, theCompany achieved a revenue of RMB 4.935 billion, a YoY growth of 11.04%, and a net profit attributable to theowners of the listed company of RMB 830 million, a YoY growth of 14.67%, both exceeding the industry average level.As of June 30, 2023, according to AVC Offline Report, the market shares and market rankings of the Company’smain product categories in terms of offline retail sales are shown in the following table:
| Range hoods | Gas stove | Disinfection cabinet | Built-in combi-steam oven | Built-in electric steam oven | Built-in electric oven | Built-in dishwasher |
| 31.0% | 30.4% | 20.3% | 30.3% | 25.3% | 23.0% | 15.7% |
| 1 | 1 | 2 | 1 | 2 | 2 | 3 |
As of June 30, 2023, according to AVC Online Report, the market shares and market rankings of the Company’smain product categories in terms of online retail sales are shown in the following table:
| Kitchen appliance package | 2-piece package of range hood and stove | Range hoods | Gas stove | Built-in combi-steam oven | Built-in electric steam oven | Built-in dishwasher |
| 32.0% | 33.4% | 17.5% | 11.6% | 11.3% | 17.7% | 7.5% |
| 1 | 1 | 1 | 4 | 3 | 3 | 4 |
As of June 30, 2023, according to AVC Real Estate Report, the market share of Robam range hoods in the finedecoration channel was 34.8%, ranking No.1 in the industry.
In the first half of 2023, for the technology sector, the Company continued to lead industry innovation and driveculinary transformation. The release of Creator i7 – the AI-powered new flagship product in digital kitchen applianceshas comprehensively improved the functions such as gas stove compatible automatic cooking, user interaction andautomation experience, and the Company published the Digital Cooking Standard for Healthy Home jointly with theChina Household Electric Appliance Research Institute, further promoting the healthy and orderly development ofdigital kitchen appliances. As of June 30, 2023, a total of 3,858 patents have been granted to the Company, including119 invention patents; the Company has participated in the formulation of a total of 136 standards, and the Companytook the lead in developing 35 of them. In addition, the Company’s technological innovation capabilities have beencontinuously recognized by the industry, and it won the first and second prizes of the Science and Technology ProgressAward of the China National Light Industry Council in 2023. The range hood (CG51X2) also won the China ExcellentDesign Patent Award.
In the first half of 2023, as for the marketing, the Company adhered to its high-end brand positioning, and met themulti-dimensional needs of customers by centering on customers, with multiple brands and channels empowering eachother for synergetic development. In terms of the retail channel, with traditional retail flow rebounding, exclusive shopsystem developed steadily, expanding channels grew rapidly, and innovative channels are poised for development; fromthe user side, the Company plans to promote worry-free kitchen renovation service and upgrade service experience. Interms of the E-commerce channel, the Company deeply tapped into user value, fully utilized flow resources, andenhanced channel efficiency through multi-category synergy. In terms of the engineering channel, in the context of the“ensuring timely delivery of presold homes” policy driving real estate market growth, the Company strictly controlledchannel risks and optimized customer structure, significantly improving cash flow. For the overseas channel, the
Company steadily promoted its global layout and the internationalization of the brand. In addition, the Robam brand hascomprehensively supported MingQi brand by upgrading its organizational resources, brand potential, productinnovation and channel expansion, and exploring the new retail development path of MingQi brands. It has alsocollaborated with sub-brands such as Kinde, DACHOO and ROKI Digital Kitchen Appliances to build a new brandmatrix, achieving diversity integration for creating a joint development path.
In the first half of 2023, as for production, with the core of “refining and leading innovation”, the Companyfocuses on refining and enhancing aspects related to product category, suppliers, manufacturing processes, and marketpresence, striving to become one of the strongest manufacturing benchmarks in China’s manufacturing industry. It wasawarded the “2022 National Quality Benchmark” by the China Association for Quality. To better serve users, theCompany built differentiated manufacturing and supply capabilities and enhanced quality control and product deliverycapabilities; to better make use of resources, the Company promoted whole-process inventory management andestablished a cost control system with comprehensive competitive advantages; through evolution and innovation, theCompany aimed to construct an integrated supply chain and a digitalized transparent future factory. The MaoshanIntelligent Manufacturing Park Project has been officially put into use, further achieving cost reduction and efficiencyimprovement and realizing continuous improvement of production efficiency and production benefits.
In the first half of 2023, as for brand, the Company continued to build the brand image as the premier Chinesehigh-end kitchen appliance brand that best understands Chinese cooking. It also held the “Feeling Free to Cook and theDigital Kitchen Appliance Technology New Product Release Conference”. Multiple products such as the Lingxi fullyautomatic range hood and stove, Guangyan integrated washing and disinfection machine, Digital Kitchen ApplianceCreator series and high-performance integrated stove appeared at the 2023 China Appliance & Electronics World Expo(AWE). Dishwasher S1 plus, combi-steam oven CQ928, and Digital Kitchen Appliance Creator i1 won the ExcellentProduct Prize, Design Prize, and Smart Technology Prize of AWE Award respectively. In addition, the Company held aseries of activities such as the Chinese Culinary Banquet, the First Chinese Cooking Competition and the ThirdDishwasher Festival; Robam also sponsored the reality show “It Sounds Incredible”, appeared on “CCTV Finance andEconomics” Channel and joined hands with Wang Yibo to launch the theme activity of “Pampering Your Hands”,helping the dishwasher category to be accepted by more circles of people and accelerating its popularization. All theseactivities contributed to the ongoing exposure and influence of the brand. As the exclusive supplier of householdkitchen appliances for the 19th Asian Games Hangzhou 2022, the Company empowered the Asian Games withinnovative technology which further supported the promotion of the 19th Asian Games Hangzhou 2022, contributed tothe ecological construction of the 19th Asian Games Hangzhou 2022, and made its efforts in creating this sports and
cultural event with “Chinese style, Zhejiang characteristics, Hangzhou charm, and shared development”.
In the first half of 2023, the Company continued to gain recognition from the capital market in terms of corporategovernance, information disclosure and shareholder returns. It has been rated as A level (excellent) in the informationdisclosure assessment on listed companies by the Shenzhen Stock Exchange for nine consecutive years. Meanwhile,based on improvement and excellent performance in corporate governance and employee welfare programs, its MSCIESG has been rated as A level and ranks among the top in the global peer (household durable goods) companies. Inorder to implement common prosperity and establish a normalized incentive mechanism, the Company has launchedthe 2023 Stock Option Incentive Plan to provide stock option incentives for the Company’s middle-level key businessand technical backbone staff, thereby consolidating the long-term development foundation of the Company. 2023 isthe starting year of the Company’s new three-year strategy. The Company will continue to focus on cooking andbuild a new core competitiveness based on “technology + humanity” to achieve long-term stable and high-qualitydevelopment.II. Analysis of Core Competitiveness
There is NO material change in the Company’s core competitiveness during the reporting period. The Company’s corecompetitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation, comprehensiveand efficient operation capability, as shown in the Annual Report 2022.III. Analysis of Main Business
OverviewSee the relevant content in the “I. Main Businesses during the Reporting Period”.Year-on-year changes in key financial data
In RMB
| The reporting period | The same period last year | YOY change | Reason for change | |
| Operating income | 4,934,869,800.15 | 4,444,310,099.69 | 11.04% | |
| Operating costs | 2,372,095,971.50 | 2,240,019,882.53 | 5.90% | |
| Sale expenses | 1,360,821,373.41 | 1,184,704,589.52 | 14.87% | |
| Administrative expenses | 203,425,816.25 | 183,583,864.57 | 10.81% | |
| Financial expense | -68,958,985.09 | -62,275,458.91 | Not Applicable | |
| Income tax expense | 151,830,927.51 | 131,172,418.86 | 15.75% | |
| Net cash flow from operating activities | 959,732,853.23 | 322,855,122.33 | 197.26% | Due to the increase in sales outstanding for this period. |
| Net cash flow from investment activities | 63,023,246.17 | -275,734,087.51 | Not Applicable | |
| Net cash flow from financing activities | -443,777,479.65 | -443,071,536.06 | Not Applicable | |
| Net increase in cash and cash equivalents | 581,455,567.34 | -392,838,975.59 | Not Applicable | Due to the increase in sales outstanding for this period. |
Major changes on profit composition or profit resources in reporting period
□Applicable ?Not applicable
No major changes on profit composition or profit resources occurred in reporting periodComposition of operating income
In RMB
| The reporting period | The same period last year | YOY change | |||
| Amount | % of operating income | Amount | % of operating income | ||
| Total operating income | 4,934,869,800.15 | 100% | 4,444,310,099.69 | 100% | 11.04% |
| By industry | |||||
| Kitchen and bathroom appliances | 4,793,316,106.76 | 97.13% | 4,317,490,105.88 | 97.15% | 11.02% |
| Other operating income | 141,553,693.39 | 2.87% | 126,819,993.81 | 2.85% | 11.62% |
| By product category | |||||
| Category 1 | |||||
| Incl: Range hood | 2,324,953,220.91 | 47.10% | 2,074,153,523.02 | 46.68% | 12.09% |
| Gas stove | 1,183,171,484.38 | 23.98% | 1,057,307,687.10 | 23.79% | 11.90% |
| Disinfection cabinet | 208,586,939.17 | 4.23% | 197,092,502.71 | 4.43% | 5.83% |
| Category 2 | |||||
| Incl: All-purpose oven | 317,829,778.22 | 6.44% | 358,429,402.29 | 8.06% | -11.33% |
| Steam oven | 33,863,980.47 | 0.69% | 47,657,561.06 | 1.07% | -28.94% |
| Baking oven | 33,333,913.56 | 0.68% | 39,476,578.27 | 0.89% | -15.56% |
| Category 3 | |||||
| Incl: Dishwasher | 331,655,582.50 | 6.72% | 246,993,832.57 | 5.56% | 34.28% |
| Water purifier | 19,178,086.59 | 0.39% | 27,217,675.16 | 0.61% | -29.54% |
| Water heater | 96,459,546.77 | 1.95% | 85,479,990.00 | 1.92% | 12.84% |
| Integrated stove | 204,932,714.33 | 4.15% | 145,144,422.16 | 3.27% | 41.19% |
| Other small appliances | 39,350,859.86 | 0.80% | 38,536,931.54 | 0.87% | 2.11% |
| Other operating income | 141,553,693.39 | 2.87% | 126,819,993.81 | 2.85% | 11.62% |
| By region | |||||
| East China-Main Products | 2,465,263,265.33 | 49.96% | 2,188,169,639.99 | 49.24% | 12.66% |
| East China-Others | 141,553,693.39 | 2.87% | 126,819,993.81 | 2.85% | 11.62% |
| South China | 505,445,895.60 | 10.24% | 540,221,730.07 | 12.16% | -6.44% |
| Central China | 414,023,176.19 | 8.39% | 400,497,450.21 | 9.01% | 3.38% |
| North China | 519,977,554.25 | 10.54% | 454,151,283.49 | 10.22% | 14.49% |
| Northeast China | 264,181,426.54 | 5.35% | 195,279,872.46 | 4.39% | 35.28% |
| Northwest China | 268,067,121.49 | 5.43% | 221,418,193.90 | 4.98% | 21.07% |
| Southwest China | 328,679,596.66 | 6.66% | 290,681,625.76 | 6.54% | 13.07% |
| Overseas | 27,678,070.70 | 0.56% | 27,070,310.00 | 0.61% | 2.25% |
Industries, products and regions accounting for more than 10% of the Company’s operating income or profit?Applicable □Not applicable
In RMB
| Operating income | Operating costs | Gross margin | YoY change in operating income | YoY change in operating costs | YoY change in the gross margin | |
| By industry | ||||||
| Kitchen and bathroom appliances | 4,793,316,106.76 | 2,305,082,060.11 | 51.91% | 11.02% | 4.53% | 2.98% |
| By product category | ||||||
| Range hoods | 2,324,953,220.91 | 1,043,996,959.67 | 55.10% | 12.09% | 1.91% | 4.49% |
| Gas stove | 1,183,171,484.38 | 514,362,626.90 | 56.53% | 11.90% | 6.68% | 2.13% |
| By region | ||||||
| East China | 2,465,263,265.33 | 1,121,781,782.29 | 54.50% | 12.66% | 3.82% | 3.88% |
| South China | 505,445,895.60 | 261,724,564.74 | 48.22% | -6.44% | -10.73% | 2.49% |
| North China | 519,977,554.25 | 232,661,198.60 | 55.26% | 14.49% | 6.55% | 3.33% |
Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of thereporting period is applied in case that the statistical caliber of such data is adjusted during the reporting period
□Applicable ?Not applicable
IV. Analysis of Non-core Business
□Applicable ? Not applicable
V. Analysis of Assets and Liabilities
1. Significant changes in assets composition
In RMB
| End of the reporting period | End of last year | Change in percentage | Note on significant changes | |||
| Amount | % of total assets | Amount | % of total assets | |||
| Cash and cash equivalents | 5,878,791,380.06 | 38.23% | 5,292,762,670.94 | 35.19% | 3.04% | |
| Accounts receivable | 1,781,653,759.34 | 11.59% | 1,689,606,828.94 | 11.23% | 0.36% | |
| Inventory | 1,532,632,739.87 | 9.97% | 1,610,110,798.10 | 10.71% | -0.74% | |
| Investment real estate | 94,803,614.18 | 0.62% | 55,887,198.54 | 0.37% | 0.25% | |
| Long-term equity investment | 7,455,321.57 | 0.05% | 8,718,505.62 | 0.06% | -0.01% | |
| Fixed assets | 1,585,824,017.21 | 10.31% | 1,622,235,227.74 | 10.79% | -0.48% | |
| Construction in process | 463,232,352.92 | 3.01% | 406,258,146.69 | 2.70% | 0.31% | |
| Right of use assets | 16,540,637.28 | 0.11% | 22,220,144.13 | 0.15% | -0.04% | |
| Short-term borrowings | 82,865,891.92 | 0.54% | 51,723,429.99 | 0.34% | 0.20% | |
| Contract liabilities | 941,928,841.93 | 6.13% | 959,915,567.03 | 6.38% | -0.25% | |
| Lease liabilities | 14,115,619.44 | 0.09% | 18,588,966.67 | 0.12% | -0.03% |
2. Major overseas assets
□Applicable ?Not applicable
3.Assets and liabilities measured at fair value
□Applicable ?Not applicable
4.Restricted asset rights by the end of the reporting period
| Item | Ending book value | Reasons for limit |
| Cash and cash equivalents | 100,908,470.98 | Letters of guarantee and bill acceptance margin |
| Cash and cash equivalents | 13,000.00 | ETC security deposits |
| Investment real estate | 6,120,022.18 | Collateral for bank loans |
| Fixed assets | 95,880,347.37 | Collateral for bank loans |
| Total | 202,921,840.53 | — |
VI. Analysis of Investment
1. Overview
□Applicable ?Not applicable
2. Major equity investments obtained during the reporting period
□Applicable ?Not applicable
3. Major ongoing non-equity investments during the reporting period
□Applicable ?Not applicable
4. Financial asset investment
(1) Securities investment
□Applicable ?Not applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□Applicable ?Not applicable
The Company had no derivatives investment during the reporting period.
5. Use of the raised funds
□Applicable ?Not applicable
The Company did not use the raised funds during the reporting period.VII. Sale of Major Assets and Equities
1. Sale of major assets
□Applicable ?Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□Applicable ?Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies?Applicable □Not applicableMain subsidiaries and joint-stock companies affecting more than 10% of the Company’s net profit
In RMB
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Beijing Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5,000,000 | 83,686,746.37 | 41,316,274.79 | 124,448,419.33 | 914,059.98 | 204,752.21 |
| Shanghai Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5,000,000 | 107,238,646.69 | -8,321,381.44 | 210,721,410.31 | -10,612,385.56 | -10,833,514.39 |
| Hangzhou MingQi Electric Co., Ltd. | Subsidiary | Sales of kitchen appliances | 50,000,000 | 179,359,426.10 | 50,484,973.40 | 162,787,949.64 | 466,736.71 | 281,710.98 |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | Subsidiary | Sales of kitchen appliances | 32,653,061 | 454,076,336.98 | 241,351,314.26 | 67,284,556.69 | -11,053,509.60 | -10,892,781.85 |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | Subsidiary | Sales of kitchen appliances | 10,000,000 | 206,425,581.84 | 17,246,551.33 | 229,711,484.23 | 6,840,175.58 | 5,129,567.07 |
Acquisition and disposal of subsidiaries during the reporting period
□Applicable ?Not applicable
Description of main holding and joint-stock companies
IX. Structured Entities Controlled by the Company
□Applicable ? Not applicable
X. Risks faced and countermeasures taken by the Company
(1) Risk of fluctuations in the real estate market
The Company is long engaged in the kitchen business, offering various kitchen appliances, such as range hoods, gas stoves,dishwashers, combi-steam oven, disinfection cabinets, integrated stoves, etc. The demands for kitchen appliances are closelyrelated to the kitchen decoration, with certain "decoration" and "furniture" attributes. At present, the demand for our main productsis still closely related to the real estate market. The Company has certain anti-fluctuation ability by virtue of its market leadership,although fluctuations in the real estate market will still have an impact on the Company’s operating results.
(2) Risk of price fluctuation of raw materials
The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet, copper and glass, etc., whose pricefluctuations will directly affect the cost of the Company’s products and in turn have an impact on its profitability.
(3) Risk of intensified market competition
In recent years, due to the tightening macro environment of the kitchen appliance industry, the continuous increase inindustry concentration, the comprehensive brands' increasing investment in the kitchen appliance market and the entry of Internetbrands, the market competition in the kitchen appliances industry has become increasingly fierce, and the intensification of marketcompetition will have a certain impact on the Company’s operating results.
Chapter 4 Corporate Governance
I. Annual General Meeting of Shareholders and Extraordinary General Meeting ofShareholders during the Reporting Period
1. General Meeting of Shareholders during the reporting period
| Session of meeting | Type of meeting | Proportion of attending investors | Date of meeting | Date of disclosure | Resolutions |
| 2022 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 61.55% | May 18, 2023 | May 19, 2023 | The Announcement of Resolutions of the 2022 Annual General Meeting of Shareholders of Robam Appliances (Announcement No. 2023-025) |
2. Preferred shareholders with voting rights recovered requested to convene an extraordinary generalmeeting of shareholders
□Applicable ?Not applicable
II. Changes in Directors, Supervisors and Senior Management
□Applicable ?Not applicable
There was no change in directors, supervisors, and senior management of the Company during the reporting period. For details,please refer to the Annual Report 2022.III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during theReporting Period
□Applicable ?Not applicable
The Company has no plans of distributing cash dividends or bonus shares, or converting capital reserve into capital stock for thefirst half of 2023.IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or otherEmployee Incentives?Applicable □Not applicable
1. Equity incentive
2021 Stock Option Incentive Plan:
1. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors onApril 25, 2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2021 StockOption Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions duringthe Second Exercise Period of the 2021 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it andexpressed its agreement, and the independent directors of the Company expressed their independent opinion on it.
2. On May 9, 2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 945,000 stock options has been completed. The Company cancelled atotal of 945,000 stock options, accounting for 0.10% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., and theprovisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and the cancellationwill not have any impact on the Company's capital stock. The capital stock structure remains unchanged.
2022 Stock Option Incentive Plan:
1. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors onApril 25, 2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2022 StockOption Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions duringthe Second Exercise Period of the 2022 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it andexpressed its agreement, and the independent directors of the Company expressed their independent opinion on it.
2. On May 9, 2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 1,609,000 stock options has been completed. The Company cancelleda total of 1,609,000 stock options, accounting for 0.17% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., and theprovisions of the Incentive Plan (Draft), etc. The stock options to be cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital stock structure remains unchanged.
2023 Stock Option Incentive Plan:
1.On April 25, 2023, the Company held the 14th meeting of the 5th Board of Directors, deliberating and adopting the Proposal on2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals, and the independentdirectors expressed their independent opinions on and approved the matters related to the Company’s 2023 Stock Option IncentivePlan. The 14th meeting of the 5th Board of Supervisors of the Company deliberated and adopted the above-mentioned proposalsand expressed its concurring opinion. The Company disclosed the above matters on April 26, 2023.
2. From April 26, 2023 to May 8, 2023, the Company internally disclosed the names and titles of the incentive targets of the stockoption incentive plan. On May 9, 2023, the Company’s Board of Supervisors published the Review Opinions of the Board ofSupervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2023 and Explanation on the Publicity. On thesame day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders andIncentive Targets of the Stock Option Incentive Plan in 2023.
3. On May 18, 2023, the Company held the 2022 Annual General Meeting of Shareholders, and deliberated and adopted theProposal on 2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals. The Plan was
approved by the Company's 2022 Annual General Meeting of Shareholders and the Board of Directors was authorized todetermine the stock option grant date on which stock option will be granted to the incentive targets when they are eligible and allmatters relevant to the grant of stock option shall be handled.
4. On June 20, 2023, the 15th meeting of the 5th Board of Directors and the 15th meeting of the 5th Board of Supervisors of theCompany deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of Supervisorsverified the list of incentive targets again and expressed its agreement, and the independent directors of the Company expressedtheir independent opinion on it.
5. On July 4, 2023, the Company completed the registration of the stock option plan granting. The actual number of incentivetargets for this stock option incentive plan was 325, and the total number of stock options granted was 5.52 million, accounting forapproximately 0.58% of the current total capital stock of the Company.
2. Implementation of the employee stock ownership plan
□Applicable ?Not applicable
3. Other employee incentive plans
□Applicable ?Not applicable
Chapter 5 Environmental and Social ResponsibilitiesI. Major Environmental IssuesWhether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental protectionauthorities.
□Yes ?No
Administrative penalties due to environmental issues during the reporting period.
| Name of company or subsidiary | Reasons for penalties | Violations | Penalties | Impact on the production and operation of the listed company | The Company's rectification measures |
| None | None | None | None | None | None |
Refer to other environmental information disclosed by key pollutant discharging units.NoneMeasures taken to reduce carbon emissions during the reporting period and their effects
□Applicable ?Not applicable
Reasons for not disclosing other environmental informationNoneII. Social ResponsibilityThe Company discloses its annual CSR Report or ESG Report, as detailed in the Robam Appliances 2022 ESG Report disclosedon www.cninfo.com.cn.
Chapter 6 Significant Matters
I. Commitments made by the Company’s actual controllers, shareholders, affiliates,purchasers and the Company itself and other relevant parties already fulfilled during thereporting period and not yet fulfilled at the end of the reporting period
□Applicable ?Not applicable
I. There were no commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Companyitself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting periodII. Non-operating Occupation of Funds of the Listed Company by the ControllingShareholder and Other Affiliated Parties
□Applicable ?Not applicable
There was no non-operating occupation of funds of the listed company by the controlling shareholder and other affiliated partiesduring the reporting period.III. Illegal External Guarantee
□Applicable ?Not applicable
There was no illegal external guarantee during the reporting period.IV. Appointment and Dismissal of Accounting FirmWhether the semi-annual financial report has been audited
□Yes ?No
The semi-annual financial report of the Company has not been audited.V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standardAudit Report” Issued by the Accounting Firm for the Reporting Period
□Applicable ?Not applicable
VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the LastYear
□Applicable ?Not applicable
VII. Matters Related to Bankruptcy Reorganization
□Applicable ?Not applicable
The Company did not have any matters related to bankruptcy reorganization during the reporting period.
VIII. Litigation MattersMaterial litigation and arbitration
□Applicable ?Not applicable
The Company had no major litigation and arbitration during the reporting period.Other litigation matters
□Applicable ?Not applicable
IX. Punishment and Rectification
□Applicable ?Not applicable
X. Integrity Conditions of the Company and its Controlling Shareholders
□Applicable ?Not applicable
XI. Major Connected Transactions
1. Connected transactions concerning daily operations
□Applicable ?Not applicable
The Company had no connected transactions concerning daily operations during the reporting period.
2. Connected transactions related to the acquisition or sales of assets or equity
□Applicable ?Not applicable
The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period.
3. Connected transactions related to joint outward investment
□Applicable ?Not applicable
The Company had no connected transactions related to joint outward investment during the reporting period.
4. Connected transactions on credit and debt
□Applicable ?Not applicable
The Company had no connected transactions on credit and debt during the reporting period.
5.Transactions with connected finance companies
□Applicable ?Not applicable
There were no deposits, loans, credits or other financial operations between the Company and connected finance companies andaffiliates.
6.Transactions between finance companies controlled by the Company and affiliates
□Applicable ?Not applicable
There were no deposits, loans, credits or other financial operations between finance companies controlled by the Company andaffiliates.
7. Other major connected transactions
□Applicable ?Not applicable
There were no other major connected transactions during the reporting period.XII. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□Applicable ?Not applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□Applicable ?Not applicable
There was no contracting during the reporting period.
(3) Leasing
□Applicable ?Not applicable
There was no leasing during the reporting period.
2. Material guarantee
□Applicable ?Not applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
?Applicable □Not applicable
Unit: RMB 10,000
| Specific type | Fund source of financial management entrusting | Incurred amount of financial management entrusting | Unexpired balance | Overdue amount not recovered | Impairment amount accrued of overdue but not recovered financial management products |
| Bank financial products | Own funds | 66,000 | 231,560.66 | 0 | 0 |
| Total | 66,000 | 231,560.66 | 0 | 0 | |
The specific situation of high-risk entrusted financial management with large single-item amount or low safety and poor liquidity
□Applicable ?Not applicable
Entrusted financial management is expected to be unable to recover the principal or there are other circumstances that may result
in impairment
□Applicable ?Not applicable
4. Other material contracts
□Applicable ?Not applicable
The Company had no other material contracts during the reporting period.
XIII. Explanation of Other Significant Matters
□Applicable ?Not applicable
The Company had no other significant matters that need to be explained during the reporting period.XIV. Significant Matters of Subsidiaries of the Company
□Applicable ?Not applicable
Chapter 7 Changes in Shares and ShareholdersI. Changes in Shares
1. Changes in shares
Unit: share
| Before change | Change (+. -) | After change | |||||||
| Quantity | Percentage (%) | Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | Quantity | Percentage (%) | |
| I. Shares subject to sales restrictions | 12,053,269 | 1.27% | 12,053,269 | 1.27% | |||||
| 1. Shares held by the state | |||||||||
| 2. Shares held by the state-owned legal persons | |||||||||
| 3. Shares held by other domestic investors | 12,053,269 | 1.27% | 12,053,269 | 1.27% | |||||
| Including: shares held by domestic legal persons | |||||||||
| Including: shares held by domestic natural persons | 12,053,269 | 1.27% | 12,053,269 | 1.27% | |||||
| 4. Shares held by overseas investors | |||||||||
| Including: shares held by overseas legal persons | |||||||||
| Shares held by overseas natural persons | |||||||||
| II. Shares without sales restrictions | 936,970,781 | 98.73% | 936,970,781 | 98.73% | |||||
| 1. RMB ordinary shares | 936,970,781 | 98.73% | 936,970,781 | 98.73% | |||||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total shares | 949,024,050 | 100.00% | 949,024,050 | 100.00% | |||||
Reason for share changes
□Applicable ?Not applicable
Approval of changes in shares
□Applicable ?Not applicable
Transfer of ownership of changes in shares
□Applicable ?Not applicable
Progress in the implementation of shares repurchase
□Applicable ?Not applicable
Progress of transferring repurchased shares by means of centralized bidding
□Applicable ?Not applicable
The impact of changes in shareholding on the financial indicators such as basic earnings per share (EPS), diluted EPS, and netassets per share attributable to common shareholders for the latest year and the latest period.
□Applicable ?Not applicable
Other information deemed necessary by the Company or required to be disclosed by securities regulatory authorities.
□Applicable ?Not applicable
2. Changes in shares subject to sales restrictions
□Applicable ?Not applicable
II. Securities Issuance and Listing
□Applicable ?Not applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: share
| Total number of common shareholders at the end of the reporting period | 61,265 | Total number of preferred shareholders with the voting rights recovered at the end of reporting period | 0 | |||||
| Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of common shares held at the end of the reporting period | Change during the reporting period | Number of shares subject to sales restrictions | Number of shares without sales restrictions | Pledged, marked or frozen shares | |
| Status | Quantity | |||||||
| Hangzhou Robam Industrial Group Co., Ltd. | Domestic non-state-owned corporation | 49.68% | 471,510,000 | 0 | 471,510,000 | |||
| Hong Kong Securities Clearing Company Limited | Overseas corporation | 6.89% | 65,370,004 | -23,726,527 | 65,370,004 | |||
| TEMASEK FULLERTON ALPHA PTE LTD | Overseas corporation | 1.86% | 17,616,539 | 886,478 | 17,616,539 | |||
| Shen Guoying | Domestic natural person | 1.29% | 12,240,000 | 0 | 12,240,000 | |||
| 413 Portfolio of National Social Security Fund | Others | 0.76% | 7,236,200 | 7,236,200 | 7,236,200 | |||
| 418 Portfolio of National Social Security Fund | Others | 0.72% | 6,822,706 | 0 | 6,822,706 | |||
| CITIC Securities Co., Ltd. - Social Security Fund 1106 Portfolio | Others | 0.71% | 6,699,366 | -329,700 | 6,699,366 | |||
| Hangzhou Jinchuang Investment Co., Ltd. | Domestic non-state-owned corporation | 0.70% | 6,640,085 | 0 | 6,640,085 | |||
| Hangzhou Yinchuang Investment Co., Ltd. | Domestic non-state-owned corporation | 0.67% | 6,318,000 | 0 | 6,318,000 | |||
| Ren Jianhua | Domestic natural person | 0.62% | 5,923,150 | 0 | 4,442,362 | 1,480,788 | ||
| Strategic investor or general legal person who becomes one of the top 10 common shareholders due to rights issue (if any) | None | |||||||
| Description of the associated relationship or consistent actions of the above shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | |||||||
| Statements of the above shareholders on proxy/trustee voting rights and abstention from voting rights | None | |||||||
| Special note on the presence of repurchase accounts among the top 10 shareholders | None | |||||||
| Shareholdings of the top 10 common shareholders not subject to sales restrictions | ||||||||
| Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of share | ||||||
| Type of share | Quantity | |||||||
| Hangzhou Robam Industrial | 471,510,000 | RMB | 471,510,000 | |||||
| Group Co., Ltd. | ordinary shares | ||
| Hong Kong Securities Clearing Company Limited | 65,370,004 | RMB ordinary shares | 65,370,004 |
| TEMASEK FULLERTON ALPHA PTE LTD | 17,616,539 | RMB ordinary shares | 17,616,539 |
| Shen Guoying | 12,240,000 | RMB ordinary shares | 12,240,000 |
| 413 Portfolio of National Social Security Fund | 7,236,200 | RMB ordinary shares | 7,236,200 |
| 418 Portfolio of National Social Security Fund | 6,822,706 | RMB ordinary shares | 6,822,706 |
| CITIC Securities Co., Ltd. - Social Security Fund 1106 Portfolio | 6,699,366 | RMB ordinary shares | 6,699,366 |
| Hangzhou Jinchuang Investment Co., Ltd. | 6,640,085 | RMB ordinary shares | 6,640,085 |
| Hangzhou Yinchuang Investment Co., Ltd. | 6,318,000 | RMB ordinary shares | 6,318,000 |
| Industrial and Commercial Bank of China Limited - Penghua Quality Selection Mixed Securities Investment Fund | 5,787,141 | RMB ordinary shares | 5,787,141 |
| Description on associated relationship or consistent actions among the top 10 common shareholders not subject to sales restrictions and between the top 10 common shareholders not subject to sales restrictions and the top 10 common shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company- Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | ||
Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Companyhave any agreed repurchase trading during the reporting period?
□Yes ?No
There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subjectto sales restrictions of the Company during the reporting period.
IV. Changes in Shares Held by Directors, Supervisors, and Senior Management
□Applicable ?Not applicable
There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reportingperiod. For details, please refer to the Annual Report 2022.V. Changes in the Controlling Shareholder and the Actual ControllerChanges in the controlling shareholder during the reporting period
□Applicable ?Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.Changes in the actual controller during the reporting period
□Applicable ?Not applicable
There was no change in the actual controller of the Company during the reporting period.
Chapter 8 Preferred Shares
□Applicable ?Not applicable
The Company had no preferred shares during the reporting period.
Chapter 9 Bonds
□Applicable ?Not applicable
Chapter 10 Financial Report
I. Audit ReportWhether the semi-annual report has been audited
□Yes ?No
The semi-annual financial report of the Company has not been audited.
II. Financial StatementsThe financial statement notes are represented in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Robam Appliances Co., Ltd.
June 30, 2023
In RMB
| Item | June 30, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and cash equivalents | 5,878,791,380.06 | 5,292,762,670.94 |
| Deposit reservation for balance | ||
| Lendings to banks and other financial institutions | ||
| Financial assets held for trading | 2,315,606,606.83 | 2,511,844,508.00 |
| Derivative financial assets | ||
| Notes receivable | 697,840,910.95 | 881,773,341.71 |
| Accounts receivable | 1,781,653,759.34 | 1,689,606,828.94 |
| Accounts receivable financing | ||
| Prepayments | 184,837,219.74 | 177,500,353.37 |
| Receivable premium | ||
| Reinsurance accounts receivable | ||
| Provision of cession receivable | ||
| Other receivables | 104,345,008.35 | 80,429,057.84 |
| Inc: Interests receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventory | 1,532,632,739.87 | 1,610,110,798.10 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 3,657,388.32 | 334,348.76 |
| Total current assets | 12,499,365,013.46 | 12,244,361,907.66 |
| Non-current assets: |
| Loans and advances | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 7,455,321.57 | 8,718,505.62 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | ||
| Investment real estate | 94,803,614.18 | 55,887,198.54 |
| Fixed assets | 1,585,824,017.21 | 1,622,235,227.74 |
| Construction in process | 463,232,352.92 | 406,258,146.69 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | 16,540,637.28 | 22,220,144.13 |
| Intangible assets | 216,629,731.28 | 221,356,558.38 |
| Development expenses | ||
| Goodwill | 60,573,832.56 | 60,573,832.56 |
| Long-term prepaid expenses | 5,150,512.22 | 5,852,899.90 |
| Deferred income tax assets | 375,644,313.06 | 340,811,345.96 |
| Other non-current assets | 49,002,558.75 | 49,433,497.13 |
| Total non-current assets | 2,876,972,914.25 | 2,795,463,379.87 |
| Total assets | 15,376,337,927.71 | 15,039,825,287.53 |
| Current liabilities: | ||
| Short-term borrowings | 82,865,891.92 | 51,723,429.99 |
| Borrowings from the central bank | ||
| Borrowings from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payables | 795,406,054.79 | 872,550,306.86 |
| Accounts payable | 2,500,293,860.74 | 2,418,755,167.31 |
| Advance receipts | ||
| Contract liabilities | 941,928,841.93 | 959,915,567.03 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receivings from vicariously traded securities | ||
| Receivings from vicariously sold securities | ||
| Payroll payable | 69,065,454.11 | 153,942,329.88 |
| Taxes payable | 221,499,567.82 | 152,351,620.58 |
| Other payables | 281,333,439.52 | 281,878,208.25 |
| Inc: Interests payable |
| Dividends payable | ||
| Fees and commissions payable | ||
| Dividends payable for reinsurance | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 3,970,613.16 | 5,720,175.21 |
| Other current liabilities | 112,459,867.60 | 120,126,501.73 |
| Total current liabilities | 5,008,823,591.59 | 5,016,963,306.84 |
| Non-current liabilities: | ||
| Reserves for insurance contracts | ||
| Long-term loans | ||
| Bonds payable | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 14,115,619.44 | 18,588,966.67 |
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 118,988,342.88 | 123,912,110.43 |
| Deferred income tax liabilities | 21,488,962.55 | 22,107,934.58 |
| Other non-current liabilities | ||
| Total non-current liabilities | 154,592,924.87 | 164,609,011.68 |
| Total liabilities | 5,163,416,516.46 | 5,181,572,318.52 |
| Owner’s equity: | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 413,471,307.17 | 409,997,665.58 |
| Less: treasury share | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,157,634.16 | -100,157,634.16 |
| Special reserves | ||
| Surplus reserves | 474,516,412.50 | 474,516,412.50 |
| General risk reserves | ||
| Undistributed profits | 8,556,749,908.27 | 8,199,079,015.58 |
| Total owners’ equity attributable to the parent company | 10,093,608,301.19 | 9,732,463,766.91 |
| Minority equity | 119,313,110.06 | 125,789,202.10 |
| Total owner's equity | 10,212,921,411.25 | 9,858,252,969.01 |
| Total liabilities and owner’s equity | 15,376,337,927.71 | 15,039,825,287.53 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu
2. Balance Sheet of the Parent Company
In RMB
| Item | June 30, 2023 | January 1, 2023 |
| Current assets: |
| Cash and cash equivalents | 5,642,420,668.83 | 5,054,810,287.04 |
| Financial assets held for trading | 2,310,000,000.00 | 2,500,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 615,413,345.80 | 879,223,549.33 |
| Accounts receivable | 1,766,241,334.83 | 1,620,543,528.97 |
| Accounts receivable financing | ||
| Prepayments | 154,560,624.23 | 167,724,048.79 |
| Other accounts receivable | 94,065,660.85 | 83,900,676.77 |
| Inc: Interests receivable | ||
| Dividends receivable | 10,200,000.00 | |
| Inventory | 1,417,140,842.22 | 1,499,780,747.70 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | ||
| Total current assets | 11,999,842,476.76 | 11,805,982,838.60 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 250,822,992.88 | 251,769,849.44 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | ||
| Investment real estate | 8,005,690.67 | 4,426,211.90 |
| Fixed assets | 1,388,761,454.25 | 1,396,227,874.68 |
| Construction in process | 463,232,352.92 | 406,258,146.69 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 147,633,971.24 | 149,864,689.61 |
| Development expenses | ||
| Goodwill | ||
| Long-term prepaid expenses | 1,336,731.94 | 1,486,622.90 |
| Deferred income tax assets | 360,600,644.53 | 323,776,879.25 |
| Other non-current assets | 49,002,558.75 | 49,433,497.13 |
| Total non-current assets | 2,671,512,420.40 | 2,585,359,794.82 |
| Total assets | 14,671,354,897.16 | 14,391,342,633.42 |
| Current liabilities: | ||
| Short-term borrowings | 6,715,891.92 | 573,429.99 |
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payables | 747,796,646.86 | 810,820,603.91 |
| Accounts payable | 2,294,413,665.55 | 2,282,866,624.07 |
| Advance receipts | ||
| Contract liabilities | 852,939,142.65 | 890,640,445.28 |
| Payroll payable | 48,172,777.49 | 121,417,848.03 |
| Taxes payable | 209,660,558.55 | 130,548,651.54 |
| Other payables | 258,096,331.10 | 254,460,632.28 |
| Inc: Interests payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | 100,679,763.62 | 109,801,716.95 |
| Total current liabilities | 4,518,474,777.74 | 4,601,129,952.05 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 82,961,858.88 | 86,923,728.32 |
| Deferred income tax liabilities | 13,387,819.60 | 13,804,141.19 |
| Other non-current liabilities | ||
| Total non-current liabilities | 96,349,678.48 | 100,727,869.51 |
| Total liabilities | 4,614,824,456.22 | 4,701,857,821.56 |
| Owner’s equity: | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Inc: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 413,082,217.21 | 409,608,575.62 |
| Less: treasury share | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,157,634.16 | -100,157,634.16 |
| Special reserves | ||
| Surplus reserves | 474,516,412.50 | 474,516,412.50 |
| Undistributed profits | 8,520,061,137.98 | 8,156,489,150.49 |
| Total owner's equity | 10,056,530,440.94 | 9,689,484,811.86 |
| Total liabilities and owner’s equity | 14,671,354,897.16 | 14,391,342,633.42 |
3. Consolidated Income Statement
In RMB
| Item | Semi-annual 2023 | Semi-annual 2022 |
| I. Total operating income | 4,934,869,800.15 | 4,444,310,099.69 |
| Inc: Operating income | 4,934,869,800.15 | 4,444,310,099.69 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income | ||
| II. Total operating costs | 4,072,326,288.42 | 3,739,161,547.48 |
| Inc: Operating costs | 2,372,095,971.50 | 2,240,019,882.53 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net allotment of reserves for insurance liabilities | ||
| Policy dividend expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 32,207,971.20 | 23,760,024.24 |
| Sale expenses | 1,360,821,373.41 | 1,184,704,589.52 |
| Administrative expenses | 203,425,816.25 | 183,583,864.57 |
| R&D expenses | 172,734,141.15 | 169,368,645.53 |
| Financial expense | -68,958,985.09 | -62,275,458.91 |
| Including: Interest expenses | 2,707,272.10 | 1,018,439.59 |
| Interest income | 69,274,034.42 | 60,042,815.83 |
| Add: other income | 70,659,558.76 | 94,070,746.70 |
| Investment income (“-” for losses) | 21,723,618.81 | 19,168,941.11 |
| Including: Income from investment in joint ventures and affiliated enterprises | -1,263,184.05 | -2,947,887.32 |
| Gains on derecognition of financial assets measured at amortized cost | ||
| Exchange gains (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value (“-” for losses) | ||
| Losses from credit impairment (“-” for losses) | 23,290,586.40 | 9,024,313.93 |
| Losses from asset impairment (“-” for losses) | -3,921,456.14 | 24,056,013.60 |
| Gains on disposal of assets (“-” for losses) | -576,718.41 | 37,838.75 |
| III. Operating profits (“-” for losses) | 973,719,101.15 | 851,506,406.30 |
| Add: non-operating income | 2,803,959.50 | 2,696,007.72 |
| Less: non-operating expenditure | 1,449,874.49 | 1,558,155.13 |
| IV. Total profits (“-” for total losses) | 975,073,186.16 | 852,644,258.89 |
| Less: income tax expenses | 151,830,927.51 | 131,172,418.86 |
| V. Net profits (“-” for losses) | 823,242,258.65 | 721,471,840.03 |
| (I) By operational sustainability | ||
| 1. Net profits from continuing operations (“-” for net losses) | 823,242,258.65 | 721,471,840.03 |
| 2. Net profits from discontinued operations (“-” for net losses) | ||
| (II) By ownership | ||
| 1. Net profit attributable to shareholders of the parent | 829,718,350.69 | 723,549,381.25 |
| company (“-” for net losses) | ||
| 2. Minority shareholders’ gains and losses (“-” for net losses) | -6,476,092.04 | -2,077,541.22 |
| VI. After-tax net amount of other comprehensive income | ||
| After-tax net amount of other comprehensive income attributable to the owners of parent company | ||
| (I) Other comprehensive income that cannot be reclassified into gains and losses | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | ||
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | ||
| 7. Others | ||
| After-tax net amount of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 823,242,258.65 | 721,471,840.03 |
| Total comprehensive income attributable to owners of the parent company | 829,718,350.69 | 723,549,381.25 |
| Total comprehensive income attributable to minority shareholders | -6,476,092.04 | -2,077,541.22 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.87 | 0.76 |
| (II) Diluted EPS | 0.87 | 0.76 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu
4. Income Statement of the Parent Company
In RMB
| Item | The first half of 2023 | The first half of 2022 |
| I. Operating income | 4,490,148,776.21 | 4,159,599,550.58 |
| Less: Operating costs | 2,272,924,581.00 | 2,146,921,987.07 |
| Taxes and surcharges | 26,445,659.50 | 21,169,789.36 |
| Sale expenses | 1,071,915,930.73 | 1,053,210,272.02 |
| Administrative expenses | 139,991,185.53 | 130,121,271.69 |
| R&D expenses | 167,969,738.37 | 161,720,456.56 |
| Financial expense | -69,761,406.60 | -61,053,558.14 |
| Including: Interest expenses | 646,283.95 | 714,893.28 |
| Interest income | 67,688,700.69 | 58,189,221.15 |
| Add: other income | 61,866,650.16 | 86,160,552.68 |
| Investment income (“-” for losses) | 21,795,614.09 | 17,639,080.72 |
| Including: Income from investment in joint ventures and affiliated enterprises | -1,019,723.65 | -2,947,887.32 |
| Gains on derecognition of financial assets measured at amortized cost (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value (“-” for losses) | ||
| Losses from credit impairment (“-” for losses) | 22,393,985.99 | 11,220,864.57 |
| Losses from asset impairment (“-” for losses) | -3,921,456.14 | 24,056,013.60 |
| Gains on disposal of assets (“-” for losses) | -607,881.96 | -134,264.41 |
| II. Operating profits (“-” for losses) | 982,189,999.82 | 846,451,579.18 |
| Add: non-operating income | 2,738,086.37 | 2,622,330.74 |
| Less: non-operating expenditure | 1,067,871.65 | 1,188,024.98 |
| III. Total profits (“-” for total losses) | 983,860,214.54 | 847,885,884.94 |
| Less: income tax expenses | 148,240,769.05 | 127,513,732.18 |
| IV. Net profits (“-” for net losses) | 835,619,445.49 | 720,372,152.76 |
| (I) Net profits from going concern (“-” for net losses) | ||
| (II) Net profits from discontinued operations (“-” for net losses) | ||
| V. After-tax net amount of other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into gains and losses | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | ||
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 835,619,445.49 | 720,372,152.76 |
| VII. EPS: | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated Cash Flow Statement
In RMB
| Item | The first half of 2023 | The first half of 2022 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 5,549,357,254.19 | 4,817,937,199.39 |
| Net increase in clients’ deposits and deposits from banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in borrowings from other financial institutions | ||
| Cash received from receiving insurance premium of the original insurance contract | ||
| Net cash from receiving reinsurance premium | ||
| Net increase in deposits and investment of insured persons | ||
| Cash received from interests, fees and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in repurchase business funds | ||
| Net cash received from vicariously traded securities | ||
| Refunds of taxes | 9,479,183.31 | 29,520,918.02 |
| Other cash received related to operating activities | 162,988,244.01 | 177,926,833.07 |
| Subtotal of cash inflow from operating activities | 5,721,824,681.51 | 5,025,384,950.48 |
| Cash paid for purchased products and received services | 2,509,505,444.23 | 2,583,318,265.69 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with the central bank and other financial institutions | ||
| Cash paid for claims of original insurance contract | ||
| Net increase in lending funds | ||
| Cash paid for interests, fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 531,293,363.95 | 509,673,044.55 |
| Cash paid for taxes | 432,835,037.24 | 408,649,175.45 |
| Cash paid related to other operating activities | 1,288,457,982.86 | 1,200,889,342.46 |
| Subtotal of cash outflow from operating | 4,762,091,828.28 | 4,702,529,828.15 |
| activities | ||
| Net cash flow from operating activities | 959,732,853.23 | 322,855,122.33 |
| II. Cash flow from investment activities: | ||
| Cash received from return of investments | 856,237,901.17 | 892,912,500.00 |
| Cash received from return on investments | 23,031,053.03 | 23,238,518.93 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 156,960.00 | 1,030,970.40 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cash received related to other investment activities | ||
| Subtotal of cash inflow from investment activities | 879,425,914.20 | 917,181,989.33 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 156,402,668.03 | 269,416,076.84 |
| Cash paid to investments | 660,000,000.00 | 923,500,000.00 |
| Net increase in pledged loans | ||
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | ||
| Subtotal of cash outflow from investment activities | 816,402,668.03 | 1,192,916,076.84 |
| Net cash flow from investment activities | 63,023,246.17 | -275,734,087.51 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | 25,000,000.00 | |
| Including: Cash received by subsidiaries from investments of minority shareholders | 11,000,000.00 | |
| Cash from acquiring debts | 38,500,000.00 | 17,000,000.00 |
| Other cashes received in relation to financing activities | 6,482,178.88 | 1,012,732.06 |
| Subtotal of cash inflow from financing activities | 44,982,178.88 | 43,012,732.06 |
| Cash paid for repayments of debts | 13,500,000.00 | 3,500,000.00 |
| Cash paid for distribution of dividends, profits or interest expenses | 472,047,458.00 | 476,047,458.00 |
| Including: Dividends or profits paid by subsidiaries to minority shareholders | 4,000,000.00 | |
| Other cash paid in relation to financing activities | 3,212,200.53 | 6,536,810.12 |
| Subtotal of cash outflow from financing activities | 488,759,658.53 | 486,084,268.12 |
| Net cash flow from financing activities | -443,777,479.65 | -443,071,536.06 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 2,476,947.59 | 3,111,525.65 |
| V. Net increase in cash and cash equivalents | 581,455,567.34 | -392,838,975.59 |
| Add: Opening balance of cash and cash equivalents | 5,196,414,341.74 | 3,719,988,820.35 |
| VI. Ending balance of cash and cash equivalents | 5,777,869,909.08 | 3,327,149,844.76 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | Semi-annual 2023 | Semi-annual 2022 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 5,061,947,996.39 | 4,510,190,738.71 |
| Refunds of taxes | 9,453,997.74 | 23,286,694.84 |
| Cash received related to other operating activities | 127,408,820.55 | 130,386,047.45 |
| Subtotal of cash inflow from operating activities | 5,198,810,814.68 | 4,663,863,481.00 |
| Cash paid for purchased products and received services | 2,388,027,327.89 | 2,444,657,366.67 |
| Cash paid to and on behalf of employees | 388,171,541.48 | 388,860,388.83 |
| Cash paid for taxes | 376,468,624.51 | 377,718,507.95 |
| Cash paid related to other operating activities | 1,093,033,326.17 | 1,074,310,127.24 |
| Subtotal of cash outflow from operating activities | 4,245,700,820.05 | 4,285,546,390.69 |
| Net cash flow from operating activities | 953,109,994.63 | 378,317,090.31 |
| II. Cash flow from investment activities: | ||
| Cash received from return of investments | 850,000,000.00 | 800,000,000.00 |
| Cash received from return on investments | 33,049,300.00 | 21,676,168.09 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 117,000.00 | 509,970.40 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cash received related to other investment activities | ||
| Subtotal of cash inflow from investment activities | 883,166,300.00 | 822,186,138.49 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 133,509,231.58 | 227,459,776.46 |
| Cash paid to investments | 660,000,000.00 | 850,000,000.00 |
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | ||
| Subtotal of cash outflow from investment activities | 793,509,231.58 | 1,077,459,776.46 |
| Net cash flow from investment activities | 89,657,068.42 | -255,273,637.97 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | ||
| Cash from acquiring debts | ||
| Other cashes received in relation to financing activities | 6,482,178.88 | 1,012,732.06 |
| Subtotal of cash inflow from financing activities | 6,482,178.88 | 1,012,732.06 |
| Cash paid for repayments of debts | ||
| Cash paid for distribution of dividends, profits or interest expenses | 472,047,458.00 | 472,047,458.00 |
| Other cash paid in relation to financing activities | 3,516,183.32 | |
| Subtotal of cash outflow from financing activities | 472,047,458.00 | 475,563,641.32 |
| Net cash flow from financing activities | -465,565,279.12 | -474,550,909.26 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 2,476,788.62 | 3,111,599.62 |
| V. Net increase in cash and cash equivalents | 579,678,572.55 | -348,395,857.30 |
| Add: Opening balance of cash and cash equivalents | 4,978,704,981.15 | 3,504,333,910.43 |
| VI. Ending balance of cash and cash equivalents | 5,558,383,553.70 | 3,155,938,053.13 |
7. Consolidated Statement of Changes in Owners’ Equity
Current amount
In RMB
| Item | The first half of 2023 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 409,997,665.58 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,199,079,015.58 | 9,732,463,766.91 | 125,789,202.10 | 9,858,252,969.01 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 409,997,665.58 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,199,079,015.58 | 9,732,463,766.91 | 125,789,202.10 | 9,858,252,969.01 | ||||||
| III. Changes in current period (“-” for | 3,473,641.59 | 357,670,892.69 | 361,144,534.28 | -6,476,092.04 | 354,668,442.24 | ||||||||||
| decrease) | |||||||||||||||
| (I) Total comprehensive income | 829,718,350.69 | 829,718,350.69 | -6,476,092.04 | 823,242,258.65 | |||||||||||
| (II) Capital invested and decreased by the owners | 3,473,641.59 | 3,473,641.59 | 3,473,641.59 | ||||||||||||
| 1. Common shares invested by the owners | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3． Amount of share-based payments recognized in owners’ equity | 3,473,641.59 | 3,473,641.59 | 3,473,641.59 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3． Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 4. Others |
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
| 3． Surplus reserves making up for losses | |||||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period |
| 2. 2. Used in current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 413,471,307.17 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,556,749,908.27 | 10,093,608,301.19 | 119,313,110.06 | 10,212,921,411.25 |
Amount of last year
In RMB
| Item | The first half of 2022 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 404,918,098.15 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,098,721,555.37 | 8,627,026,739.27 | 139,031,776.96 | 8,766,058,516.23 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Other | |||||||||||||||
| s | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 404,918,098.15 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,098,721,555.37 | 8,627,026,739.27 | 139,031,776.96 | 8,766,058,516.23 | ||||||
| III. Changes in current period (“-” for decrease) | 3,998,366.27 | 251,501,923.25 | 255,500,289.52 | 4,922,458.78 | 260,422,748.30 | ||||||||||
| (I) Total comprehensive income | 723,549,381.25 | 723,549,381.25 | -2,077,541.22 | 721,471,840.03 | |||||||||||
| (II) Capital invested and decreased by the owners | 3,998,366.27 | 3,998,366.27 | 11,000,000.00 | 14,998,366.27 | |||||||||||
| 1. Common shares invested by the owners | 11,000,000.00 | 11,000,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3． Amount of share-based payments recognized in owners’ equity | 3,998,366.27 | 3,998,366.27 | 3,998,366.27 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | -4,000,000.00 | -476,047,458.00 | |||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. |
| Appropriation of general risk reserve | |||||||||||||||
| 3． Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | -4,000,000.00 | -476,047,458.00 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
| 3． Surplus reserves making up for losses | |||||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained |
| earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period | |||||||||||||||
| 2. Used in current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 408,916,464.42 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,350,223,478.62 | 8,882,527,028.79 | 143,954,235.74 | 9,026,481,264.53 |
8. Statement of Changes in Owners’ Equity of the Parent Company
Current amount
In RMB
| Item | The first half of 2023 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 409,608,575.62 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,156,489,150.49 | 9,689,484,811.86 | |||||
| Add: Changes in accounting policies | ||||||||||||
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this | 949,024,050.00 | 409,608,575.62 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,156,489,150.49 | 9,689,484,811.86 | |||||
| year | ||||||||||||
| III. Changes in current period (“-” for decrease) | 3,473,641.59 | 363,571,987.49 | 367,045,629.08 | |||||||||
| (I) Total comprehensive income | 835,619,445.49 | 835,619,445.49 | ||||||||||
| (II) Capital invested and decreased by the owners | 3,473,641.59 | 3,473,641.59 | ||||||||||
| 1. Common shares invested by the owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3． Amount of share-based payments recognized in owners’ equity | 3,473,641.59 | 3,473,641.59 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 3． Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3． Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings |
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawn in current period | ||||||||||||
| 2. Used in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 413,082,217.21 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,520,061,137.98 | 10,056,530,440.94 |
Amount of last year
In RMB
| Item | The first half of 2022 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 404,873,115.14 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 6,971,309,836.02 | 8,499,570,036.91 | |||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this | 949,024,050.00 | 404,873,115.14 | 199,995,742.59 | - | 474,516,412.50 | 6,971,309,836.02 | 8,499,570,036.91 | |||||
| year | 100,157,634.16 | |||||||||||
| III. Change in current period (“-” for decrease) | 3,998,366.27 | 248,324,694.76 | 252,323,061.03 | |||||||||
| (I) Total comprehensive income | 720,372,152.76 | 720,372,152.76 | ||||||||||
| (II) Capital invested and decreased by the owners | 3,998,366.27 | 3,998,366.27 | ||||||||||
| 1. Common shares invested by the owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3． Amount of share-based payments recognized in owners’ equity | 3,998,366.27 | 3,998,366.27 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 3． Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3． Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings |
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawn in current period | ||||||||||||
| 2. Used in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 408,871,481.41 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 7,219,634,530.78 | 8,751,893,097.94 |
III. Basic Information of the CompanyHangzhou Robam Appliances Co., Ltd. (hereinafter referred to as ROBAM or the Company) is anincorporated company established by overall changing Hangzhou Robam Home Appliances Co., Ltd. onNovember 7, 2000. Approved by China Securities Regulatory Commission (ZJXK [2010] No.1512) in 2010, theCompany for the first time offered 40 million ordinary shares in RMB to the public on November 23, 2010 (stockcode: 002508), with the par value per share of RMB 1 and the issue price per share of RMB 24.00.As of June 30, 2023, the total capital stocks of the Company reached 949,024,050 shares, with a registeredcapital of RMB 949,024,050. The Company’s unified social credit code is 91330000725252053F; the legalrepresentative is Ren Jianhua; the registration address is No. 592, Linping Avenue, Yuhang EconomicDevelopment Area, Yuhang District, Hangzhou; and the Headquarters office address is No. 592, Linping Avenue,Yuhang Economic Development Area, Yuhang District, Hangzhou.The main business scope is: manufacturing of household appliances; research and development ofkitchenware, sanitary ware and daily necessities; wholesale of kitchenware, sanitary ware and daily necessities;sales of daily glass products; sales of household appliances; installation services for household appliances;research and development of household appliances; sales of household products; sales of daily necessities;manufacturing of wooden daily products; retail of daily household appliances; repair of daily electrical appliances;sales of electric heating food processing equipment; wholesale of daily necessities; technical services, technicaldevelopment, technical consulting, technical exchange, technology transfer, technology promotion; sales of non-electric household appliances; manufacturing of non-electric household appliances; production of gas appliances;sales of refrigeration and air conditioning equipment; manufacturing of refrigeration and air conditioningequipment; development of basic artificial intelligence software; manufacturing of smart household consumptiondevices; sales of artificial intelligence hardware; manufacturing of commercial, catering, and service-specificequipment; sales of commercial, catering, and service-specific equipment; import and export of goods;manufacturing of environmental protection-specific equipment; sales of environmental protection-specificequipment (except for items that require approval according to law, the Company is authorized to carry outbusiness activities independently with the business license). Manufacturing of disinfection devices; manufacturingof electric heating food processing equipment (items that require approval according to law can only be operatedafter approval by relevant departments, and the specific business items shall be subject to the approval results).
The Company is a manufacturing company, with major businesses covering research & development,production, sales and comprehensive services of kitchen appliances. Its main products include range hoods, gasstoves, disinfection cabinets, steam ovens, baking ovens, dishwashers, water purifiers, microwave ovens,integrated stoves, and purification tanks.
The consolidated financial statements of the Company cover ten subsidiaries, including Beijing Robam ElectricAppliance Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd., Hangzhou MingQi Electric Co., Ltd., DeDietrich Household Appliances Trading (Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen AppliancesCo., Ltd., Hangzhou Robam Fuchuang Investment Management Co., Ltd., Zhejiang Cookingfuture Technology
Co., Ltd., Hangzhou Jinhe Electric Appliances Co., Ltd., Robam Appliances Holding (HK) Co., Ltd. and RobamInternational (HK) Trading Co., Ltd. Compared to the previous year, Robam Appliances Holding (HK) Co., Ltd.and Robam International (HK) Trading Co., Ltd. were newly established within the scope of consolidation of theCompany during the current period.IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going concern basis, and in light of theCompany’s actual transactions and events, in accordance with the Accounting Standards for Business Enterprisespromulgated by the Ministry of Finance of China and relevant provisions, as well as the accounting policies andestimates stated in the section of "Significant Accounting Policies and Estimates" herein.
2.Going concern
After taking into account of factors such as macro policy risks, market management risks, and the current andlong-term profitability, solvency, and financial flexibility of the Company, as well as the intention of themanagement to change the operation policies, the management of the Company believes that there are no mattersaffecting the Company’s going concern within 12 months from the end of the reporting period onwards.V. Significant Accounting Policies and EstimatesSpecific accounting policies and estimates:
The specific accounting policies and estimates prepared by the Company according to its actual productionand operation include the operating cycle, the recognition and measurement of accounts receivable and bad debts,measurement of inventory delivered, fixed assets classification as well as depreciation methods, invisible assetamortization, conditions for the capitalization of R&D expenses, and revenue recognition and measurement.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of the AccountingStandards for Business Enterprises, and truthfully and completely reflect the financial status, business results,cash flow and other relevant information of the Company.
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian calendar.
3. Operating cycle
The normal operating cycle of the Company shall be one year (12 months).
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Accounting approaches to business combinations under or not under common control
The assets and liabilities acquired by the Company as the combining party in a business combination undercommon control shall be measured at the book value of the combined party in the final controller’s consolidatedstatements on the combination date. The capital reserve shall be adjusted against the difference between the bookvalue of the net assets acquired by the combining party and the book value of the combination consideration paidby it. If the capital reserve is insufficient to offset the difference, the retained earnings shall be adjusted.The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a businesscombination not under common control shall be measured at fair value on the acquisition date. The combinationcost is the sum of the fair values of cash or non-cash assets paid, liabilities issued or undertaken, equity securitiesissued, among others, by the Company for the purpose of taking control over the acquiree on the acquisition dateand all directly related expenses incurred during the business combination (in case of business combinationaccomplished through multiple transactions step by step, the combination cost is the sum of the cost of everysingle transaction). If the combination cost is greater than the fair value share of the acquiree’s identifiable netassets acquired from the acquiree in the combination, the case is recognized as goodwill. Where the combinationcost is less than the fair value share of the identifiable net assets acquired from the acquiree, the fair values of theidentifiable assets, debts and contingent liabilities acquired in the combination and those of non-cash assetssubject to combination consideration or issued equity securities shall be rechecked first, and then in case thecombination cost is less than the fair value shares of the identifiable net assets acquired from the acquiree, thedifference shall be included in the non-operating income in the period of the combination.
6. Methods of preparing consolidated financial statements
All subsidiaries under the control of the Company are included into the consolidated financial statements.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies andaccounting period of the Company when preparing the consolidated financial statements, where the accountingpolicies and accounting periods are inconsistent between the Company and its subsidiaries.
All major internal transactions, inter-company balances, and unrealized profits with the scope ofconsolidation shall be offset when preparing consolidated financial statements. The portion of owner’s equity ofsubsidiaries not held by the parent company and net current profit & loss, other comprehensive incomes and theportion of total comprehensive incomes belonging to minority equity are presented under “minority equity,minority interest income, other comprehensive incomes attributable to minority shareholders and totalcomprehensive incomes attributable to minority shareholders, respectively”.
For a subsidiary acquired from a business combination under common control, its operating results and cashflows are included into the consolidated financial statements since the beginning of the consolidation year. When
the comparable consolidated financial statements are being prepared, relevant items in the financial statements ofthe last year are adjusted with the stated party formed after merging deemed to exist from the time of the ultimatecontrolling party starting to control.
For a subsidiary acquired through business combinations not under the same control, its operating results andcash flows shall be included into the consolidated financial statement since the date when the Company obtainscontrol. When preparing the consolidated financial statements, the subsidiary's financial statements shall beadjusted on basis of the fair value of all identifiable assets, liabilities and contingent liabilities ascertained on thepurchasing date.For equity interests in an investee not under common control realized by two or more transactions, whichfinally bring about the business combination, equity interests in the investee before the acquisition date shall bere-measured at fair value on the acquisition date and the balance between the fair value and the book value shallbe included in the investment gains for the current period when the consolidated statements are prepared. If therelated acquiree’s equity held before the acquiring date contains other comprehensive income and the otherchanges of owner’s equity except for net profits and losses, other comprehensive income and profit distributions,it shall be transferred to investment gains or losses on the date of acquisition, excluding the other comprehensiveincome derived from changes of net liabilities or net assets due to re-measurement on defined benefit plan by theinvestee.Without losing any control right, the Company has partially disposed the long-term equity investment in thesubsidiary. In the consolidated financial statement, according to the difference between the disposal prices of partof the equity investment in the subsidiary and net assets of the subsidiary attributed to the Company as a result ofdisposal of long-term equity investment continuously calculated from the purchase date or consolidation date inthe subsidiary, capital premium or stock premium is adjusted, where the capital surplus is not sufficient to beoffset, they are adjusted to the retained earnings.Where the Company loses the controlling right of the invested party for such reason as disposing partialequity investment, the remaining equity is re-measured as per the fair value of such equity on the day of losingcontrolling right when preparing the consolidated financial statements. The balance from the sum of theconsideration obtained upon the disposal of equity and the fair value of the remaining equity less the appropriableshare of the net asset of the former subsidiaries calculated as per the former shareholding proportion from thepurchase day or merging day is included in the investment income for the period when the right of control is lostand the goodwill is deducted. Other comprehensive incomes related to former equity investment in subsidiariesshall be recognized as current investment profits & losses upon losing controls.
7. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Company includes the joint venture.
The Company, serving as one part of the joint venture, shall, in accordance with the provisions of theAccounting Standards for Business Enterprises No. 2 Long-term Equity Investments, conduct accountingtreatment of the investment of the joint venture.
8. Recognition standard of cash and cash equivalents
Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that are availablefor payment at any time. Cash equivalents presented in the cash flow statement refer to short-term investments(no more than three months) with high liquidity and that are readily convertible to known amounts of cash andsubject to an insignificant risk of changes in value.
9. Foreign currency business and conversion of foreign currency statement
? Foreign currency transactions
The Company translates the foreign-currency amount of foreign-currency transactions into an RMB amountbased on the spot exchange rate applicable on the transaction date. On the balance sheet date, the monetary itemsin foreign currencies shall be converted at the spot rate on the said balance sheet date. The conversion differencesarising therefrom, except the exchange balance arising from the foreign currency borrowings special foracquisition or production of qualifying assets which shall be processed according to the capitalization principle,shall be directly included in the current profit or loss. The foreign currency non-monetary items measured at fairvalue shall be converted according to the spot rate of the date when the fair value is confirmed. If the differencebetween the converted amount of booking base currency and the original amount of booking base currencybelongs to the foreign currency non-monetary item available for sale of financial assets, such difference shall beincluded in the capital reserve. If such difference belongs to the foreign currency non-monetary item which ismeasured at fair value and whose change is included into the current profits and losses, it shall be included intocurrent profits and losses. The foreign currency non-monetary items measured by historical cost shall be stilltranslated according to the spot rate on the transaction date, while RMB amount remains unchanged.
? Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of foreign operations are translated into RMB using the spotexchange rate at the balance sheet date, while the shareholders’ equity items, except for the "undistributed profititems," are translated into RMB using the spot exchange rate at the date of transaction. The income and expenseitems in the income statements of overseas operations are translated at the exchange rate approximate to the spotrate at the date of transaction. The difference arising from the above translation is presented separately underother comprehensive income. For foreign currency monetary items that materially constitute overseas netinvestment in overseas operations, exchange differences arising from changes in exchange rates, when theconsolidated financial statements are prepared, are also separately presented as other comprehensive income
During the disposal of an overseas operation, other comprehensive incomes related to the overseas operation aretransferred in proportion into the disposal of current profits and losses.The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted using the exchangerate approximate to the spot rate of the transaction date of the cash flow. The effect of exchange rate changes oncash is presented separately in the cash flow statement.
10. Financial instruments
The Company shall recognize a financial asset or a financial liability when it becomes a party to a financialinstrument contract.
? Financial assets
Classification, recognition basis and measurement method of financial assets
Based on the business model for management of financial assets and the contractual cash flow characteristicsof financial assets, the Company classifies the financial assets into three types: 1) the financial asset measured atamortized cost; 2) the financial asset measured at the fair value with its changes included into othercomprehensive incomes; and 3) and the financial asset measured at the fair value with its changes included intocurrent profits or losses.
The financial assets meeting all of the following conditions can be classified as those measured at amortizedcost by the Company: ① the Company adopts the business management mode of financial assets for the purposeof collecting contractual cash flow. ② In accordance with the contract terms of the financial assets, the cash flowgenerated at the specific date is only the payment of the principal and the interest on the basis of the outstandingprincipal amount. Such financial assets are initially measured at their fair values, with related transaction costsincluded into the amount of initial recognition, and subsequent measurement conducted with the amortized cost.Apart from those designated as hedged items, the difference between the initial amount amortized with theeffective interest method and the amount due, profits or losses incurred upon amortization, impairment, exchangeprofits and losses and derecognition shall be included into current profits and losses.
Where the following conditions are reached at the same time, the financial assets can be classified by theCompany as those measured at fair value with the changes included into other comprehensive income: ① theCompany adopts the business management mode of the financial assets for the purpose of collecting contractualcash flow and selling the financial assets. ② In accordance with the contract terms of the financial assets, thecash flow generated at the specific date is only the payment of the principal and the interest on the basis of theoutstanding principal amount. Such financial assets are initially measured at their fair values, with relatedtransaction costs included into the amount of initial recognition. Apart from those designated as the hedged items,profits or losses incurred by such financial assets shall be included into the comprehensive incomes, except forcredit impairment losses or gains, exchange profits and losses and the interests calculated as per the actual interestrate for such financial assets. Upon derecognition of the financial assets, the accumulated gains or losses
previously recorded in other comprehensive incomes shall be transferred out of such other comprehensiveincomes and included into the current profits and losses.The interest income is recognized by the Company using the effective interest method. The interest incomeis determined by multiplying the book balance of financial assets by the effective interest rate, except forconditions below: ① For the financial assets purchased by or originating from the Company with creditimpairment, since initial confirmation, the interest income shall be determined as per the amortized cost of thefinancial asset and the effect interest rate subject to credit adjustment. ② The financial assets purchased by ororiginating from the Company with no credit impairment but having credit impairment during the follow-upperiod shall be subject to interest income calculation based on the amortized cost and actual interest rate of thefinancial assets during the follow-up period by the Company.
The non-trading equity instrument is designated by the Company as the financial asset which is measured atits fair value with changes included into current profits and losses. The designation shall not be canceled once it ismade. The non-trading equity instrument investment, designed by the Company to be measured at the fair valuewith their changes included into other comprehensive incomes, is initially measured at fair value, with relatedtransaction cost included into the amount of initial confirmation. Except for the obtained dividends (excludingthose of the recovered investment cost), which are included into current profits and losses, other related profitsand losses (including exchange profits and losses) are completely included into other comprehensive incomes andwill not then be converted into current profits and losses. Upon derecognition, the accumulated gains or lossespreviously included into other comprehensive incomes are transferred from other comprehensive incomes andincluded into retained earnings.Financial assets other than those measured at amortized cost and those measured at fair value with changesrecognized in other comprehensive income. Such financial assets are initially measured at their fair values, withrelated transaction costs directly included into the current profits and losses. Such financial assets are initiallymeasured at their fair values, with related transaction costs directly included into the current profits and losses.Profits or losses of such financial assets shall be included in the current profits and losses.The financial asset formed by the contingent consideration confirmed during business combination not underthe same control are classified as those measured by its fair value by the Company, with changes included intocurrent profits and losses.Recognition basis and measurement method for transfer of financial assetsFinancial assets meeting one of the following conditions shall be derecognized by the Company: ① thecontractual right to collect the cash flow of the financial asset is terminated. ② The financial assets have beentransferred by the Company, and almost all risks and rewards associated with the ownership of the financial assetare transferred. ③ The financial assets have been transferred, and the Company had neither transferred norretained almost all risks and rewards associated with the ownership of the financial assets, but given up thecontrol over the financial assets.
For financial asset that is entirely transferred and meets the conditions of de-recognition, the differencebetween the book value of financial asset transferred and the sum of consideration received from such transfer andthe accumulated changes in fair value, directly included into other comprehensive income and corresponding tothe derecognized amount (in accordance with the contract terms of the financial assets involved in such transfer,the cash flow generated at the specific date is only the payment of the principal and the interest on the basis of theoutstanding principal amount), is included into the current profits and losses.For financial asset that is partially transferred and meets the conditions of derecognition, the overall bookvalue of transferred financial asset is split according to their relative fair value between the part derecognized andthe part not derecognized, and the difference between the following two amounts is recognized in current profitsand losses: the sum of consideration received due to transfer and the amount amortized to the derecognized partand corresponding to the accumulative change of fair value which is firstly included into the other comprehensiveincome (in accordance with the contract terms of the financial assets, the cash flow generated at the specific dateis only the payment of the principal and the interest on the basis of the outstanding principal amount), and theoverall book value of aforesaid financial assets.
? Financial liabilitiesClassification, recognition basis and measurement method of financial liabilities
The Company’s financial liabilities are grouped, upon initial recognition, into financial liabilities measuredat fair value, with the changes included in the current profit or loss and other financial liabilities.
Financial liabilities measured at fair value with changes included into the current profits and losses includetrading financial liabilities and financial liabilities designated to be measured as at fair value with changesincluded into the current profits and losses upon initial recognition. The net gain or loss arising from changes infair value, dividends and interest paid related to such financial liabilities are included into current profits andlosses in which they are incurred.
Other financial liabilities are measured subsequently at the amortized cost by adopting the effective interestmethod. Apart from the following items, the Company will classify the financial liabilities as those measured atamortized cost: ① the financial liabilities measured at fair value with changes included into current profits andlosses include financial liabilities held for trading (including derivatives that are financial liabilities) and financialliabilities designated to be measured at fair value with changes included into current profits and losses. ② Thefinancial liabilities formed by transferring the financial assets failed to meet the conditions for derecognition orformed by continuous involvement of transferred financial assets. ③ The financial guarantee contracts that do notfall under above ① and ② as well as loan commitments at a rate below the market rate of interest that do not fallunder above ①.
Where a contingent consideration is recognized by the Company as a financial liability in businesscombination not under common control, such financial liability shall be measured at fair value with changesincluded into the current profits and losses during accounting treatment.Derecognition conditions for financial liabilities
When the current obligation of the financial liabilities has been relieved in whole or part, the part of thefinancial liabilities or obligations that have been relieved upon confirmation is terminated. If the Companyreaches an agreement with the creditor to replace the existing financial liabilities by undertaking new financialliabilities and the contract terms of the existing and new liabilities are different in substance, the existing financialliabilities shall be derecognized while the new liabilities shall be recognized. Where all or part of the contractterms of the existing financial liabilities are subject to material modification, the Company shall derecognize allor part of the existing financial liabilities while recognizing the financial liabilities with modified terms as newfinancial liabilities. The difference between the book value of the terminated part upon confirmation and theconsiderations paid is included in the current profit and loss.Method for determining the fair value of financial assets and financial liabilities
The Company measures the fair value of financial assets and financial liabilities in the main market. If thereis no major market, the Company measures the fair value of financial assets and financial liabilities with mostbeneficial price for the market and adopts evaluation techniques with much available data and other informationsupport that is applicable at that time. Input data for determining fair values has three levels, wherein the firstlevel is the unadjusted price available for the same asset or liability on the date of evaluation in an active market;the second level is directly or indirectly observable input data of relevant assets or liabilities apart from input dataof the first level; the third level is unobservable input data of relevant assets or liabilities. The Company givespriority of using the first-level inputs and takes the third-level inputs as the last. The lowest layer that hassignificant impact on the overall fair value evaluation determines which level this fair value evaluation result shallbelong to.
Investments in equity instruments of the Company are measured at fair value. However, under certaincircumstances, if recent information needed to determine the fair value is insufficient, or if the estimated amountof the fair value features an extensive distribution scope and the cost represents the best estimate of the fair valuein that distribution scope, the cost may represent the appropriate estimate on the fair value within that distributionscope.
? Offsetting financial assets and financial liabilities
Financial assets and liabilities of the Company are presented separately in the balance sheet withoutoffsetting. However, the net amount resulting from the offsetting between financial assets and financial liabilitiesshall be presented in the balance sheet only if all of the following criteria are met: (1) The Company has the
statutory right to set off recognized amounts which is currently enforceable. (2) The Company intends either tosettle on a net basis, or to realize the financial assets and pay off the financial liabilities simultaneously.
? Distinction and relevant treatment methods of financial liabilities and equity instrumentsThe Company distinguishes between financial liabilities and equity instruments according to the followingprinciples: (1) Where the Company cannot unconditionally avoid fulfilling certain contractual obligation bydelivering cash or other financial assets, then such contractual obligation is in line with the definition of thefinancial liability. Although certain financial instruments do not expressly contain terms and conditions for thecontractual obligation to deliver cash or other financial instruments, the contractual obligation may be indirectlyformed according to other terms and conditions. (2) Where a financial instrument must or is able to be settled bythe Company’s own equity instrument, the Company shall consider whether the Company’s own equityinstrument as the settlement instrument is a substitute of cash or other financial assets, or the residual interest inthe assets of an entity after deducting all of its liabilities. If it is the first case, the instrument shall be the financialliability of the issuer. If it is the latter case, the instrument shall be the equity instrument of the issuer. Undersome circumstances, the contract of a financial instrument may require that the financial instrument must or isable to be settled by the Company’s own equity instrument. The amount of contractual right or contractualobligation equals to the amount of its own equity instrument receivable or payable multiplied by its fair value atthe time of settlement. Whether the amount of such contractual right or obligation is fixed, or varies, wholly orpartially, based on variables other than the market value of the Company’s own equity instrument (such as interestrates, the price of a commodity or the price of a financial instrument), such contract is classified as financialliability.
In classifying financial instruments (or components) in the consolidated statements, the Company shall takeinto account all the terms and conditions agreed between members of the Company and holders of the financialinstruments. If the Company, as a whole, undertakes the obligation to deliver cash, other financial assets or settlein other ways that cause the financial instrument to become a financial liability, the instrument shall be classifiedas financial liability.If a financial instrument or any of its components is a financial liability, the relevant interests, dividends,gains or losses, and gains or losses from redemption or re-financing and so on are included in the current profitsand losses of the Company.If a financial instrument or its component belongs to an equity instrument, for its issue (including re-financing), repurchase, sale or cancellation, the Company will treat it as a change in equity and will not recognizethe change in fair value of equity instruments.
? Impairment of financial instruments
The Company, based on expected credit losses, performed impairment accounting and recognized creditimpairment losses on financial assets measured at amortized cost, financial assets classified to be measured at thefair value with the changes included into other comprehensive incomes as well as financial guarantee contracts.
The expected credit loss is a weighted average of credit losses on financial instruments weighted at the riskof default. Credit loss refers to the difference between all contractual cash flows discounted as per the originaleffective interest rate and receivable from the contract and all cash flows expected to be received by the Company,namely, the present value of a shortage of cash. Among them, financial assets purchased or underlying with creditimpairment of the Company shall be discounted at the financial assets’ effective interest rate after creditadjustment.
For accounts receivable arising from transactions scoped in ASBE on Revenue not containing significantfinancing components, the Company takes the simplified measurement method to measure its loss provisionsbased on the amount of expected credit losses during the entire duration.
For financial assets purchased or underlying with credit impairment, the cumulative change in expectedcredit loss during the entire duration since the date of balance sheet date after initial recognition will berecognized as provision for loss. On each date of balance sheet, the amount of change in expected credit lossduring the entire duration is included into current profits and losses as impairment losses or gains. Even if theexpected credit loss within the entire duration determined on the date of balance sheet is less than the amount ofexpected credit loss reflected by estimated cash flow upon initial recognition, any favorable change in expectedcredit loss will be recognized as impairment gains.
In addition to other financial assets adopting the aforesaid simplified measurement method or financialassets purchased or underlying with credit impairment, the Company shall assess whether the credit risk ofrelevant financial instruments has increased significantly since the initial recognition on each balance sheet date,and shall respectively accrue their provision for loss and recognize the expected credit loss and its change:
1. In the event that the credit risk has not increased significantly since the initial recognition and it is inStage I, the Company shall measure its loss provisions based on the amount of expected credit losses forthe coming 12 months of such financial instrument and calculate the interest on the basis of book balanceand effective interest rate.
2. In the event that the credit risk of the financial instrument has increased significantly since the initialrecognition but with no credit impairment and it is in Stage II, the Company shall measure its lossprovisions based on the amount of the expected credit loss of the financial instrument during the entireduration and calculate the interest on the basis of book balance and effective interest rate.
3. In case that credit impairment of the financial instrument has incurred since the initial recognition and it
is in Stage III, the Company shall measure the loss provisions of the financial instrument based on theamount of expected credit losses during the entire duration, and calculate the interest at amortized costand effective interest rate.
Increases or reversals of the provisions for credit losses of the financial instrument are recorded in thecurrent profits and losses as impairment losses or gains. Except for financial assets classified to be measured atfair value through other comprehensive income, the book balance of financial assets is deducted with provisionfor credit losses. For financial assets classified to be measured at fair value, with the change included in othercomprehensive incomes, the Company shall recognize the provision for credit loss in other comprehensiveincomes, and shall not decrease the book value of such financial assets listed in the balance sheet.Where the Company has measured the provisions for losses based on the amount of the expected credit lossover the entire duration of such financial instruments in the prior accounting period, but on the current balancesheet date, such financial instruments no longer fall into the scope of significantly increased credit risk sinceinitial recognition, the Company measures the provisions for the losses of such financial instruments based on theamount equivalent to the expected credit losses over the coming 12 months on the current balance sheet date, withresulting carrybacks of provisions for losses included into the current profits and losses as impairment gains.
① Significant increase in credit risk
The Company determines if there is a significant increase in credit risk of financial instruments since initialrecognition by comparing the risks of default of financial instruments on the balance sheet date and the date ofinitial recognition based on reasonable and well-grounded forward-looking information available. For thefinancial guarantee contract, when the Company applies the regulations on impairment of financial instruments,the date when the Company becomes the party which makes the irrevocable undertaking is regarded as the date ofinitial recognition. The Company will take into account the following factors when it assesses whether the creditrisk is significantly increased: whether the operating results of the debtor has actually changed or is expected tosignificantly change or not; whether the regulatory, economic or technical environment where the debtor islocated has significantly and adversely changed or not; whether the value of the collateral as the debt pledge orthe guarantee provided by the third party or credit enhancement quality has significantly changed or not, as thesechanges are expected to reduce the economic motives of the debtor to make repayments within the time limitsprescribed in the Contract or to impact the default probability; whether the expected performance or repaymentbehavior of the debtor has significantly changed or not; whether the Company has changed its managementmethod for financial instrument credit or not, etc.
On the balance sheet date, if the Company determines that the financial instrument only carries low creditrisks, then the Company will assume that the credit risks of the financial instrument have not increasedsignificantly since the initial recognition. If the risk of default on financial instruments is low, the borrower ishighly capable of performing its contractual cash flow obligations in the short term, and even if the economicsituation and operating environment are adversely changed over a long period of time but not necessarily reducingthe borrower’s performance of its contractual cash obligations, then the financial instrument is considered ashaving a lower credit risk.
② Credit-impaired financial assets
In case of one or more events adversely affecting the estimated future cash flows of a financial asset, thefinancial asset becomes a financial asset to which a credit impairment has occurred. Evidence of a creditimpairment on a financial asset includes the following information: serious financial difficulties of the debtor; abreach of contract by the debtor, such as a default or overdue payment of interest or principle; the creditor, foreconomic or contractual considerations related to financial difficulties of the debtor, offers the debtor concessionsthat are impossible in any other circumstances; it is probable that the debtor will enter bankruptcy or otherfinancial reorganization; the disappearance of an active market for that financial asset because of financialdifficulties of the issuer or the debtor; the purchase or origination of a financial asset at a deep discount thatreflects the incurred credit losses.The credit impairment of financial assets may be caused by the joint effect of the above multiple events, andmay not be caused by individually identifiable events.
③ Determination of expected credit losses
In assessing the expected credit loss, the Company takes reasonable and well-founded information intoconsideration about past events, current condition and predictions of future economic status based on the expectedcredit loss of single and combined financial evaluation instruments.
The Company divides the financial instruments into different portfolios based on the common credit riskcharacteristics. See accounting policies of relevant financial instruments for single evaluation standards andcombined credit risk characteristics.
The Company determines the expected credit losses of financial instruments under the following methods:
For financial assets, the credit loss is calculated as the present value of the difference between thecontractual cash flows to be collected by the Company and cash flows that are expected to be collected.
For the financial guarantee contract, the credit loss is the expected payment made to the contract holder bythe Company to reimburse the contract holder against the credit losses incurred by the contract holder, deductedby the present value of the differences between the amounts expected to be received by the Company from thecontract holder, debtor or any other party.
For financial assets which have been credit-impaired on the balance sheet date but are not purchased orunderlying with credit impairment, the credit loss is calculated as the difference between the book balance of suchfinancial assets and present value of anticipated future cash flows discounted at the original effective interest rate.
11. Notes receivable
The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics,divides the notes receivable into different combinations and determines the accounting estimation policy ofexpected credit loss.
| Classification of combination | Basis for determining combination | Provision method |
| Banker’s acceptances combined | The acceptor is a banking financial institution. | The Company believed that there was no significant credit risk in the bank acceptance held by the Company and there will be no significant loss due to the default of the bank. |
| Trade acceptances combined | The acceptor is a non-bank financial institution or enterprise like a finance company. |
The company shall measure the bad-debt provision of receivabletrade acceptance based on the expected credit loss during the entireduration.
12. Accounts receivable
For the accounts receivable arising from transactions regulated by the Accounting Standards for BusinessEnterprises No. 14 Revenue Standards (whether or not containing significant financing components) and the leaseaccounts receivable regulated by the Accounting Standards for Business Enterprises No. 21 Leasing, the Companytakes the simplified measurement method to measure its loss provisions based on the amount of expected creditlosses during the entire duration.For accounts receivable, the Company assesses whether the credit risk increases significantly on the basis ofa single financial instrument or a combination of financial instruments. The Company singly evaluates the creditrisk of accounts receivable with significantly different credit risks and the following characteristics: accountsreceivable in dispute with the other party or involved in litigation and arbitration; accounts receivable that thereare obvious indications showing that the debtor is likely to be unable to fulfill the repayment obligation. TheCompany cannot obtain sufficient evidence of significant increase in credit risk at the level of single financialinstrument at reasonable cost, but it is feasible to assess whether the credit risk increases significantly on the basisof the combination of financial instruments. When the assessment is performed on the combination of financialinstruments, the Company can classify the financial instruments based on the common credit risk characteristics.The Company classifies the accounts receivable into the following combinations based on their credit riskcharacteristics:
| Classification of combination | Basis for determining combination | Provision method |
| Credit loss that accrues accounts receivable by aging analysis method | Accounts receivable with the same aging have similar credit risk characteristics | Expected rates of credit loss |
| Related parties within the consolidation scope | Funds of subsidiaries within the consolidation scope of controlling shareholders | No expected credit loss under normal circumstances |
If there is objective evidence showing that the credit impairment of certain account receivable has incurred,the Company shall singly withdraw the bad debt reserve of accounts receivable and confirm the expected creditloss.
For accounts receivable with credit loss accrued from accounts receivable by aging analysis method, basedon the actual credit loss of previous years and considering the forward-looking information of the current period,the accounting estimate policies of the Company for measuring the expected credit loss are as follows:
| Aging | Expected rates of credit loss |
| Within 1 year | 5.00% |
| 1-2 years | 10.00% |
| 2-3 years | 20.00% |
| 3-4 years | 50.00% |
| 4-5 years | 80.00% |
| More than 5 years | 100.00% |
The Company calculates the expected credit loss of accounts receivable on the balance sheet date. If theexpected credit loss is greater than the carrying amount of the current accounts receivables impairment provision,the Company will recognize the difference as impairment loss of accounts receivable, debit “credit impairmentloss” and credit “bad debt provision”. Otherwise, the Company will recognize the difference as impairment gainsand make opposite accounting records.For the actual credit losses of the Company, if the relevant accounts receivables are determined to beunrecoverable and are approved to be written off, the Company shall debit “bad debt provision” and credit“accounts receivable” according to the approved write-off amount. If the write-off amount is greater than theaccrued loss provisions, the “credit impairment loss” will be debited according to the difference.
13. Accounts receivable financing
Where the following conditions are reached at the same time, the financial assets can be classified as thosemeasured at fair value and its change and included into other comprehensive income: the Company adopts thebusiness management mode of the financial assets for the purpose of collecting contractual cash flow and sellingthe financial assets. In accordance with the contract terms of the financial assets, the cash flow generated at thespecific date is only the payment of the principal and the interest on the basis of the outstanding principal amount.
The Company transfers the accounts receivable held in the form of discount or endorsement, and suchbusiness is more frequent and involves a large amount of money. Its business management model is, in essence, tocollect and sell contract cash flow. According to the relevant provisions of financial instrument standards, theaccounts receivable is classified into financial assets with changes measured at fair value and included in othercomprehensive income.
14. Other accounts receivable
Determination and accounting method for expected credit loss of other accounts receivable
The Company divides the process of credit impairment of other accounts receivable into three stages andadopts different accounting treatment methods for the impairment of other accounts receivable in different stages:
? Credit risk has not increased significantly since initial recognition (Stage I)
For the financial instruments in this stage, the Company shall measure the loss provisions based on theexpected credit loss in the next 12 months.
The Company classifies other accounts receivable based on aging as a credit risk characteristic and measurethem on the basis of combination, which is equivalent to the expected credit loss in the next 12 months.? Credit risk has increased significantly since initial recognition but has not been impaired (Stage II)For the financial instruments in this stage, the Company shall measure the loss provisions based on theexpected credit loss during the entire duration.? Credit impairment after initial recognition (Stage III)For the financial instruments in this stage, the Company shall measure the loss provisions based on the expectedcredit loss during the entire duration.
15. Inventories
Inventories of the Company mainly include low-value consumables, raw materials, goods in-process,merchandise inventory and goods shipped in transit.
The inventories are managed based on perpetual inventory system, and valued at actual cost on acquisition.Low-value consumables and packaging materials are amortized using one-off amortization method.
Low-value consumables and packaging materials are amortized using one-off amortization method.Inventory revaluation reserves of merchandise inventories and raw materials are generally accrued as the excessof the higher cost of individual inventory over its net realizable value. For raw and auxiliary materials of largeramount and lower unit price, inventory revaluation reserves shall be accrued based on the category.
Net realizable value of stock goods, work in progress, or held-for-sale materials are determined by theirestimated selling price deducted by estimated selling expenses and related taxes. Net realizable value for materialheld for production are determined by the estimated selling price of finished goods deducted by the estimated costto completion, selling expenses and the related taxes.
16. Contract assets
? Recognition method and standard of contract asset
Contract asset refers to the rights of the Company to receive consideration for goods transferred to thecustomer, which depend on other factors except for the lapse of time. Where the Company sells two clearlydistinguished commodities to the customer and has the right to collect the payment because one commodity isdelivered and the payment relies on the delivery of the other commodity, the Company will treat the collectionrights as the contract assets.
? Determination and accounting method for expected credit loss of contract assets
For the determination method for expected credit loss of contract assets, please refer to relevant contents in
10. Financial asset and liabilities; 11. Notes receivable and 12. Account receivable.The Company calculates the expected credit loss of contract assets on the balance sheet date. If the expectedcredit loss is greater than the carrying amount of the current impairment provision of contract assets, theCompany will recognize the difference as impairment loss, debit "asset impairment loss" and credit "contractasset impairment provision". Otherwise, the Company will recognize the difference as impairment gains and makeopposite accounting records.For the actual credit losses of the Company, if the relevant contract assets are determined to beunrecoverable and are approved to be written off, the Company shall debit "contract asset impairment provision"and credit "contract assets" according to the approved write-off amount. If the write-off amount is greater than theaccrued loss provisions, the "asset impairment loss" will be debited according to the difference.
17. Contract costs
? Method for determining asset amount related to contract costThe Company’s assets related to the contract cost comprise the contract performance cost and the contractacquisition cost.The contract performance cost, which is the cost incurred to perform the contract by the Company, notcovered by the accounting standards for business enterprises of other companies, shall be deemed as one asset if itmeets the conditions below: the cost is directly related to one existing contract or one contract expected to beacquired and covers direct labor cost, direct material cost, manufacturing cost (or similar cost), the cost clearlyspecified to be borne by the customer and other costs incurred by the contract only; the cost increases theresources available to the Company to fulfill performance duties in the future; the cost is expected to be recovered.The contract acquisition cost refers to the incremental cost incurred by the Company for the purpose ofsecuring a contract, which will be recognized in the form of contract acquisition cost as an asset if it is expectedto be recovered. If the amortization period of the assets does not exceed one year, such cost shall be included ascurrent profit or loss. Incremental cost refers to the cost which will not incur unless a contract is secured by theCompany (e.g. sales commission, etc.). Other costs (such as the travel expense, whether or not the contract will beacquired, except the incremental cost which can be recovered as expected) incurred the Company for purpose ofacquiring the contract shall be included in the current profit or loss at the time of occurrence, unless those clearlyspecified to be borne by the customer.
? Asset amortization related to contract costThe Company’s assets related to contract costs are amortized on the same basis as revenue recognition ofgoods related to the asset and included into the current profits or losses.
? Asset impairment related to contract costWhen the Company recognizes the impairment loss related to contract cost, the Company shall firstlyrecognize the impairment loss of other assets which are recognized as per other account standards for businessenterprises and are related to the contract. Then, if the book value is higher than the difference between theremaining consideration expected to be received for the transfer of the commodity associated with the asset andthe estimated costs to be incurred for the relevant commodity, impairment provision will be made for the excessportion and recognized as asset impairment loss.If the factors causing the impairment of prior period change and make the previous differencebetween the above-mentioned items higher than the book value of the asset, the withdrew assetimpairment provision shall be reversed and included into the current profits or losses, although the bookvalue of asset after reversion shall not exceed the book value of the asset at the reversion date under thecondition of not withdrawing the impairment provision.
18. Long-term equity investment
Long-term equity investment of the Company mainly includes the investment to the subsidiaries, associatedenterprises and joint ventures.The Company follows the basis to judge the joint control: all the participants or group of participantscollectively control the arrangements, and the policies for activities related to such arrangement must be agreedby all such participants.Generally, it constitutes significant influence on an investee if the Company controls 20% (inclusive) ormore (less than 50%) voting shares of the investee directly or indirectly through a subsidiary. Where the Companycontrols less than 20% voting shares of the investee directly or indirectly through a subsidiary, significant effectson the investee shall be judged based on the facts and circumstances in the case that appoint representative to theboard of directors or similar organ of power under the investee, participate the development of financial andoperating policies of the investee, conduct important trading with the investee, dispatch management personnel tothe investee, or provide key technical data to the investee.The one forming control over the investee is the subsidiary of the Company. For the long-term equityinvestment acquired through business combination under the same control, the share of the combined party in thebook value of net assets presented in consolidated financial statements of ultimate controlling party acquired atthe date of combination is recognized as initial investment cost of long-term equity investment. The book value ofnet assets for the combined party is negative on the combining date, and the long-term equity investment cost isdetermined as zero.In case that equity of the investee under the same control is obtained through multiple deals step by step tofinally form business combination, for package deals, the Company shall account each deal as a deal to obtain thecontrol. If it is not a package deal, the share of the book value of combined party's net assets presented in
consolidated financial statements of ultimate controlling party acquired at the date of combination is recognizedas initial investment cost of long-term equity investment. The difference between initial investment cost and thesum of the book value of long-term equity investment before the combination is realized and the book value ofconsideration additionally paid to further acquire shares on the date of combination is adjusted against the capitalsurplus; if the capital surplus is not sufficient to be offset, the remaining balance is adjusted against retainedearnings.
For long-term equity investments acquired through business combinations not under common control, thecombined cost is used as the initial investment cost.In case the equity of the investee not under the same control is obtained through multiple deals step by stepto finally form business combination, for package deals, the Company shall account each deal as a deal to obtainthe control. If it is not a package deal, initial investment cost accounted using cost method will be the sum of thebook value of original equity investment and new investment cost. For equity held before the date of acquisitionand accounted with equity method, other related comprehensive income using equity method for accounting shallnot be adjusted, and accounting treatment should be applied to these investments on the same basis as thoseadopted by the investee for direct disposal of related assets or liabilities. For equity held before the date ofacquisition and accounted at fair value in the available-for-sale financial assets, the accumulated change in fairvalue which is originally included in other comprehensive income shall be transferred to the investment profit orloss for the current period on the combining date.Apart from the long-term equity investments acquired through business combination mentioned above, thelong-term equity investments acquired by cash payment is used as the cost of investment based on the purchaseprice actually paid. For long-term equity investments obtained by issuing equity securities, the fair value of theequity securities issued is recorded as the initial investment cost. For long-term equity investments obtained byexchange of non-monetary assets, the initial investment cost shall be determined in accordance with relevantprovisions in the Accounting Standards for Business Enterprises No. 7 Exchange of Non-Monetary Assets; theinitial investment cost shall be determined in accordance with the relevant provisions of the Accounting Standardsfor Business Enterprises No. 12 Debt Restructuring by the long-term equity investment of debt restructuring.
Investment in subsidiaries by the Company shall be calculated by cost method, while investment in jointventures and associates by the Company shall be calculated by equity method.
For long-term equity investment calculated by cost method, the cost of long-term equity investment shall beadjusted when the investment is added or recovered. The cash dividends or profits declared to be distributed bythe investee shall be recognized as the current investment income.
For long-term equity investment calculated by equity method in subsequent measurement, the book value ofthe long-term equity investment shall be increased or decreased accordingly with the changes in owner’s equity ofthe investee. The shares of the net profits and losses of the investee attributable to the Company shall berecognized based on the fair value of all identifiable net assets of the investee upon acquisition of the investmentin accordance with the accounting policies and accounting period of the Company, after deducting the parts of the
profits and losses arising from internal transactions between the associates and joint ventures attributable to theCompany calculated on the basis of shareholding ratio and adjusting the net profits of the investee.
When disposing the long-term equity investment, the balance between the book value and the acquired priceactually shall be included in the current profit and loss. As for long-term equity investments calculated by theequity method, when other changes in owners’ equity other than net gain or loss of the investee are recorded inowners’ equity, the amount initially recorded in owners’ equity is proportionally transferred into currentinvestment income.If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong topackage transaction, the Company will conduct accounting treatment for each transaction. In case of packagetransaction, all transactions shall be calculated as one transaction of disposing subsidiaries and losing controlpower for accounting treatment. However, the difference between disposal cost of each transaction and bookvalue of long-term equity investment corresponding to equity disposed before losing control power shall berecognized as other comprehensive income and then shall be transferred into current profits and losses of losingcontrol power upon such loss.
19. Investment real estate
Measurement model of investment real estateMeasurement by cost methodDepreciation or amortization methods
Leased houses and buildings are included into the investment real estates of the Company. Measurement iscarried out by cost model.
The investment real estates of the Company are depreciated or amortized by the composite life method. Theestimated service life, net residual value ratio and annual depreciation (amortization) rate of the investment realestate are as follows:
| Type | Depreciation period (year) | Estimated residual value ratio (%) | Annual depreciation rate (%) |
| Houses and buildings | 20 years | 5.00 | 4.75 |
20. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year, which are held for producing goods,rendering labor services, lease (exclusive of leased houses and buildings) or operation and management.
Fixed assets are recognized when the economic benefits related thereto are likely to flow into the Company and theircosts can be measured reliably. Fixed assets include houses and buildings, machine and equipment, transportation equipmentand other equipment, and the actual cost at the time of acquisition is taken as the entry value. Among them, the cost ofpurchased fixed assets includes the purchase price, import duties and other related taxes, as well as other expenditures that
can be directly attributed to the fixed assets before the fixed assets reach the predetermined serviceable state; the cost of theself-constructed fixed assets consists of necessary expenses incurred before the constructed assets are ready for the intendeduse; the fixed assets invested by investors shall be accounted for at the value agreed in the investment contract or agreement,or at the fair value if the value agreed in the investment contract or agreement is unfair; the fixed assets rented in by way offinancial lease shall be accounted for at the fair value. For fixed assets obtained by financing lease, the lower of the fair valueof rented assets and the present value of the minimum lease payment on the lease start date shall be recorded as the entryvalue.
(2) Depreciation method
| Type | Depreciation method | Depreciation period | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 20 years | 5.00% | 4.75% |
| Machine and equipment | Straight-line method | 10 years | 5.00% | 9.50% |
| Transportation equipment | Straight-line method | 5 years | 5.00% | 19.00% |
| Other equipment | Straight-line method | 5 years | 5.00% | 19.00% |
Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assets mainlyincludes renovation/modification expenditure, repair expenditure, etc. When the relevant economic benefits arelikely to flow in and the costs can be measured in a reliable manner, they shall be included into the cost of fixedassets. For the replaced part, the book value shall be derecognized. All the other subsequent expenditures arerecognized in profit or loss for the current period in which they are incurred.The Company will recheck the estimated service life, the estimated net residual value and the depreciationmethod of the fixed assets on each balance sheet date.
Changes, if any, are regarded as the accounting estimate changes. A fixed asset is derecognized when it isdisposed of or no economic benefit is expected from the use or disposal of the asset. The amount of proceeds onsale and transfer of a fixed asset as well as disposal of a scrapped or damaged fixed asset less its carrying amountand related taxes, is recognized in profit and loss for the current period.
21. Construction in progress
Construction in progress is measured at its actual cost. The self-operating works is measured according tothe direct material, direct wage, direct construction cost, etc.; the outsourced works is measured according to theproject price payable; the project cost of the equipment installation works is determined according to the value ofinstalled equipment, installation cost, commissioning cost and other expenditures incurred. The cost ofconstruction in process shall also include borrowing costs that should be capitalized.
The fixed assets constructed by the Company shall be transferred into fixed assets at the estimated valuebased on project budget, construction cost and actual project cost from the date when fixed assets get ready forintended use and depreciation of such assets will be accrued in next month. Upon completion of the final accountsformalities, the original value difference of the fixed assets will be adjusted.
22. Borrowing costs
Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the Company thatcan be directly attributable to the acquisition and construction or production of qualifying assets will becapitalized and incurred in the relevant asset cost. Other borrowing costs are recognized as expenses based on theamount incurred, and included in the current profit and loss. Qualifying assets are defined as assets that require asubstantial amount of time (usually more than one year) for construction or production activities before the assetis ready for its intended use or sale. These include fixed assets, intangible assets and inventory.
Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costs relatedto the qualifying assets when the asset expenditure has been incurred, the borrowing costs have been incurred, andthe acquisition, construction or production activities necessary to prepare assets for their intended use or sale arein progress. Where the acquisition or production of a qualifying asset are interrupted abnormally and theinterruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended.Capitalization of borrowing costs shall cease once the acquisition, construction or production necessary to preparethe qualifying asset for its intended use or sale are complete.
Method for calculating the amount of borrowing costs to capitalize: If borrowing funds specifically foracquiring, constructing or producing qualifying assets, the amount of interest eligible for capitalization by theCompany will be the actual interest costs incurred during the specific borrowing period minus the interest incomeobtained by depositing or temporarily investing unspent borrowed funds. Where a general borrowing is used forthe acquisition, construction or production of a qualifying asset, the Company shall calculate and determine itsamount of interest to be capitalized by taking the weighted average of the accumulative asset expenditure minusthe asset expenditure of the specific borrowing, multiplied by the weighted average interest rate of the generalborrowing used.
23. Right-of-use assets
The right-of-use asset refers to the right of the Company to use the leased assets as a lessee during the lease
term.
(1) Initial measurement
On the commencement date of the lease term, the Company carries out initial measurement to the right-of-use asset. The cost comprises the following four items: ① initial measurement amount of lease liabilities; ② theamount of lease payment made on or before commencement date of lease term, net of relevant amount of usedlease incentives (if any); ③ the initial direct cost incurred (i.e., the incremental cost incurred by reaching the
lease agreement); ④ costs expected to be incurred to disassemble and remove the leased assets, restore the sitewhere the leased assets are located or restore the leased assets to the conditions as agreed under the terms of thelease, excluding costs incurred to produce the inventory.
(2) Subsequent measurement
On the commencement date of the lease term, the Company carries out subsequent measurement to the right-of-use assets in the cost mode, that is, measuring the right-of-use assets by deducting the accrued depreciationamount and accrued impairment loss from the cost. Where the Company remeasures the lease liabilities accordingto relevant provisions of the lease criterion, the book value of the use-of-right asset shall be adjustedcorrespondingly.Depreciation of right-of-use assetsOn the commencement date of the lease term, the provision for depreciation shall be made by the Companyto the right-of-use assets. Generally, the depreciation amount of the use-of-right assets is accrued from the monthwhen the lease term starts. The accrued depreciation amount shall be recognized as the cost of relevant assets orcurrent profit or loss according to the purpose of the right-of-use assets.When determining the depreciation method of right-of-use asset, the Company shall make decisionsaccording to the expected consumption method of the economic benefits related to the right-of-use asset andaccrue depreciation to the right-of-use asset with the linear method.When determining the depreciation years of the right-of-use asset, the Company shall follow the principlesbelow: If the Company can reasonably determine that the ownership of the leased asset is acquired at theexpiration of the lease term, depreciation shall be accrued within the remaining service life of the leased asset.Where it is not reasonably certain that the ownership of the lease assets can be obtained upon expiry of lease term,the lease assets shall be depreciated over the shorter of the lease term and the remaining service life of the leaseassets.
Impairment of right-of-use assets
In case of impairment of right-of-use asset, the Company shall make subsequent depreciation as per the bookvalue of right-of-use asset after the impairment loss is deducted.
24. Intangible assets
(1) Valuation method, service life and impairment test
The intangible assets of the Company mainly include land use rights, software, trademarks and patents. Asfor intangible assets that are purchased, the actual cost is composed of the actual price paid and other relevantexpenditures. For the intangible assets that are invested by investors, the actual cost is determined by the agreedvalue in the investment contract or agreement, but if the agreed value is not fair, the fair value will be taken as the
actual cost. Intangible assets are amortized using the composite life method, and the classifications andamortization periods of the Company’s intangible assets are as follows:
| Type | Amortization year |
| Land use right | 50 years |
| Patents | 10 years |
| Software | 3-5 years |
| Trademark or domain name | 10 years |
The Company’s land use rights are amortized evenly according to the lease term, starting from the date oftransfer. The Company’s patent rights, non-patented technologies, special software use rights and other intangiblesoftware amortized evenly by stages according to whichever period is the shortest: the asset’s estimated useful life,the beneficial period stipulated in the contract, or the period of legal validity. The amount of amortization isincluded into the current profits and losses or included into the relevant asset cost according to the beneficiaries.
At the end of each year, the Company shall review, and adjust in case of changes, the estimated useful livesand amortization methods used for intangible assets with limited useful lives; in each accounting period, theCompany carries out reviews of the estimated useful life of intangible assets whose useful life is uncertain. Wherethere is evidence showing that the useful life of these intangible assets is limited, the Company will estimate theuseful life thereof and amortize these intangible assets during the estimated useful life remaining.
The internal R&D expenditures of the Company can be divided into expenditures made at the research stageand those made at the development stage, depending on the nature of the expenditure and the extent of uncertaintyon whether the R&D activities will finally form intangible assets.
For internally-generated intangible assets, expenditures at the research stage are included into the currentprofits and losses when incurred; expenditures at the development stage are recognized as an asset, when thefollowing conditions are met:
? It is technically feasible to complete the intangible assets so that they can be used or sold.? There is an intention to complete and use or sell the intangible assets.? There is a potential market for the products manufactured by applying the intangible assets orthere is a potential market for the intangible assets themselves.? There is sufficient support in terms of technological, financial and other resources in order tocomplete the development of the intangible assets, and there is the capability to use or sell theintangible asset;? The expenditures made on the intangible assets during the development stage can be measuredreliably.
Expenditures made in the development stage that fail to meet the above conditions shall be included in thecurrent profits and losses when incurred. The development expenditures previously included in the profit and lossstatement will not be recognized as assets in subsequent periods. The expenditures incurred and capitalized at the
development stage are recorded as development expenditures on the balance sheet and will be carried over as theintangible asset on the date when the project is ready for its intended use.
If the expenditures made at the research and development stages cannot be distinguished, all the R&Dexpenditures incurred will be fully included in the current profits and losses. The costs of the intangible assetsgenerated by internal development activities only include the total expenditures incurred from the time when thecapitalization conditions are met to the point when the intangible assets are used for their intended purposes; forexpenditures that are already recorded as such in the profit and loss statement before the capitalization conditionsare met during development of the same intangible asset, no adjustments will be made.
25. Long-term deferred expenses
On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures andassociates, including long-term equity investments, fixed assets, projects under construction, and intangible assetswith finite useful lives. If any of the signs listed below are identified, this is an indication that the asset may beimpaired and the Company will conduct an impairment test. Impairment test is carried out on the intangible assetswith uncertain goodwill and beneficial period at the end of each period, irrespective of whether there is anyindication that the assets may be impaired. If there is difficulty in testing the recoverable amount of a single asset,a test shall be conducted on the asset group which the asset belongs to, or on a combination of asset groups.
After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference shallbe recognized as an impairment loss. Once such an impairment loss has been confirmed, it shall not be reversed inthe subsequent accounting period. The recoverable amount of an asset is the greater of its fair value less the netvalue of asset disposal and present value of expected future cash flow.
The following signs may indicate asset impairment:
?
? Current market price of the asset drops substantially, with the drop in price being notably higher
than the expected drop over time or due to the asset’s normal use.? Significant changes occur in the current period, or are predicted to occur in the near future, with
regard to the economic, technological or legal environment in which the enterprise conducts its
business operations, or in the asset market, and these changes have or will have negative impacts
on the enterprise;? The market interest rate or other market investment return rates have risen in the current period,
affecting the enterprise’s discount rate for calculating the asset’s present value of expected future
cash flow, and leading to a substantial decrease in recoverable amounts of the assets;? There is any amount of evidence to prove the asset has been out of date or the physical asset has
been damaged.? The asset has been or will be left unused, terminated for use or disposed of ahead of schedule.? There is evidence from the enterprise’s internal reports proving that the economic performance
of the asset has been lower or will be lower than expected. For example, the net cash flow
generated by the assets or operating profits (or losses) realized is much lower (or higher) than theexpected amounts;? Other signs indicating that the asset may have been impaired.
26. Contract liabilities
Contract liabilities reflect the obligations of the Company to transfer goods to the client for whichconsideration is received or receivable from the client. Before the Company transfers goods to the client, and theclient has paid the consideration in the contract or the Company has obtained the right of unconditionallycollecting the consideration, the contract liabilities are recognized according to the received or receivable amounteither at the time of actual payment by the client or when the payment is due―whichever is earlier.
27. Employee remuneration
(1) Accounting treatment method of short-term remuneration
Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employee welfare,housing provident funds, labor union funds, employee education funds, medical insurance premiums, industrialinjury insurance premiums, and maternity insurance premiums. In the accounting period during which theemployee has rendered service, the actual short-term remuneration incurred is recognized as a liability andincluded into the current profits and losses or related asset costs based on the beneficiary.
(2) Accounting treatment method of post-employment benefits
The post-employment benefits mainly consist of basic endowment insurance, unemployment insurance,enterprise and annuity payments, which are classified into defined contribution plans according to the risks andobligations undertaken by the Company. Moreover, the contributions paid into a separate entity in exchange forthe employee’s services during the accounting periods at the balance sheet date are recognized as a liability, andrecorded in current profits and losses or relevant asset costs based on the beneficiary.
(3) Accounting treatment method of dismissal benefits
Dismissal benefits are required in instances when the Company terminates labor relationships with a certainemployee prior to the maturity of their labor contract. The Company shall recognize the employee remunerationliabilities incurred from termination benefits and include them into the current profits and losses. This occurseither when the Company cannot unilaterally withdraw the termination benefits provided by the plan on thetermination of the labor relationship or dismissal proposal, or when the Company recognizes the costs or expensesrelated to restructuring the payment of termination benefits―whichever occurs earlier. The compensations paidexceeding one year will be discounted then included in the current profits or losses.
(4) Accounting treatment method of other long-term employee benefits
Other long-term benefits mainly include long-term incentive plans and long-term benefits. The Companyconducts accounting treatment according to relevant provisions of the defined contribution plans.
28. Lease liabilities
(1) Initial measurement
The Company shall initially measure the lease liabilities according to the present value of the lease payment
unpaid on the commencement date of the lease term.
1) Lease payment
The lease payment refers to the payment made by the Company to the leaser as for the right of use the leasedassets during the lease term, including: ① fixed payment and practical fixed payment, with relevant leaseincentive (if any) deducted; ② variable lease payments that are based on an index or rate, which shall bedetermined at the time of initial measurement based on the index or rate on the commencement date of the leaseterm; ③ the exercise price of a purchase option if the Company is reasonably certain to exercise that option; ④the amount payable for exercising the option to terminate the lease if the Company intends to exercise the optionto terminate the lease during the lease term; ⑤ expected payable amount based on secured residual valueprovided by the Company.
2) Discount rate
In calculating the present value of the lease payments, the Company adopts the interest rate embedded in thelease as the discount rate. The rate is the interest rate that equates the sum of present value of the lessor's leasereceipts and the present value of the unsecured residual value to the sum of the fair value of the leased asset andthe lessor's initial direct costs. If the Company is unable to determine the interest rate embedded in the lease, itwill adopt the incremental borrowing rate as the discount rate. The incremental loan interest rate is defined as theinterest rate that the Company would have to pay to borrow, for a term similar to the duration of the lease andwith similar security, the funds necessary to obtain an asset of similar value to the asset by right of use in asimilar economic environment. The interest rate is related to the following items: ① The Company's ownsituation, including the debt repayment ability and credit status of the Group; ② the term of the "loan", i.e. thelease term; ③ the amount of "borrowed" funds, i.e. the amount of lease liabilities; ④ the "mortgage conditions",i.e. the nature and quality of the underlying assets; ⑤ the economic environment, including the jurisdiction wherethe lessee is located, the valuation currency, and the contract signing time. The incremental borrowing rate isdetermined by considering the above factors and adjusting the bank loan interest rate which is as a basis.
(2) Subsequent measurement
When the lease term commences, the Company shall make subsequent measurement for the lease liabilitieson the basis of principles below: ① the carrying account of increased lease liabilities when the interests of leaseliabilities are recognized; ② the carrying account of decreased lease liabilities when the lease payment is made;
③ the book value of remeasured lease liabilities when the lease payment is changed due to revaluation, leasechange or other reasons.
The interest expenses of lease liabilities in each period of the lease term are calculated in accordance withthe fixed periodic interest rate, and are included in the current profit or loss, unless capitalization is required. Theperiodic interest rate refers to the discount rate taken by the Company for initial measurement or the reviseddiscount rate taken by the Company when it is necessary to remeasure the lease liabilities as per the reviseddiscount rate due to lease payment change or lease change.
(3) Re-measurement
After the commencement date of the lease term, the Company remeasures the lease liabilities at the presentvalue of the revised lease payments and adjusts the book value of the right-of-use asset accordingly, if any of thefollowing occurs. If the book value of the right-to-use assets has been reduced to zero, but the lease liabilities stillneed to be further reduced, the Company shall include the remaining amount in the profits and losses of thecurrent period. ① Substantial fixed payment amount changes (in this case, the original discount rate is used fordiscounting); ② changes in the estimated payable amount of the secured residual value (in this case, the originaldiscount rate is used for discounting); ③ changes in the index or ratio used to determine lease payments (in thiscase, the revised discount rate is used for discounting); ④ changes in the evaluation results of purchase option (inthis case, the revised discount rate is used for discounting); ⑤ changes in the evaluation results or actual exerciseof renewal option or option to terminate the lease (in this case, the revised discount rate is used for discounting).
29. Provisions
When a obligation related to contingencies such as external guarantee, pending litigation or arbitration,product quality assurance, layoff plans, loss contracts, restructuring obligations, environmental pollution control,commitments, and disposal obligation of fixed assets also meet the following conditions, the Company recognizesit as a liability: the obligation is currently being undertaken by the Company; there is a high possibility that thefulfillment of the obligation will result in the outflow of economic benefits from the enterprise; and the amount ofthe obligation can be reliably measured.
Provisions are initially measured according to the best estimate of the expenditure required to settle thepresent obligation, taking into account factors related to contingencies such as risks, uncertainties and the timevalue of money. Where the time value of money has a significant impact, the best estimate shall be ascertainedafter discounting the future relevant cash outflow. The book value of provisions is reviewed at the balance sheetdate and adjusted to reflect the current best estimate if there is any change.
For possible obligations arising from past transactions or events whose existence depends on whether one ormore uncertain future events occur; or for present obligations formed by past transactions or events, where thefulfillment of the obligation is not likely to cause an outflow of economic benefits from the Company, or theamount of the obligation cannot be reliably measured, the Company will disclose these possible or presentobligations as contingent liabilities.
30. Share-based payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities are incurredbased on equity instruments in order to obtain services provided by the employees or other parties. Share-basedpayments are divided into equity-settled and cash-settled share-based payments.
Equity-settled share-based payments made in exchange for the service of employees are measured at the fairvalue on the date at which the equity instrument is granted to employees. Where the right may only be exercised ifthe service is completed within the waiting period, or if specified performance conditions are met, the fair valueshall be included in relevant costs or expenses using the straight-line method and capital surplus shall beincreased accordingly, based on the best estimate of the number of vested equity instruments within the waitingperiod.
Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized on thebasis of share options or other equity instruments undertaken by the Company. If excisable immediately after thegrant, the fair value of the liabilities assumed shall be included in the relevant costs or expenses on the grantingdate, and the liabilities shall be increased accordingly. If it is necessary to complete the services in the waitingperiod or achieve the specified performance conditions before the right is excisable, on each balance sheet date ofthe waiting period, the services acquired in the current period shall be included in the cost or expense based on thebest estimation of the excisable right, and the liabilities shall be adjusted accordingly according to the fair valuesof the liabilities assumed by the Company.
On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fair value ofthe liabilities will be re-measured, with any changes recorded in the profits and losses at the current period.
31. Revenue
Accounting policies used for the recognition and measurement of income
Operating revenues of the Company are mainly from sales of goods, rendering labor service and transferringright to use assets.
? Revenue recognition principle
The Company recognizes the revenue upon fulfillment of its performance obligations within the contract,that is, when the client obtains control of the relevant goods or services. Acquisition of control over relevant
goods or services means the ability to manage the use of such goods or the provision of services and to receivealmost all economic benefits therefrom.The Company assesses the contract from the commencement date of the contract and recognizes eachindividual performance obligation included by the contract, and determines if each individual performanceobligation will be fulfilled during a certain period or at a certain time point.
The performance obligations are to be fulfilled within a specified period once the Company meets one of thefollowing conditions; otherwise, the Company is to fulfill the performance obligations at a specified time point:
1) The client obtains and consumes the economic benefits while the Company fulfills the performanceobligations.
2) The client can control goods or services still under construction while the Company is still in the processof fulfilling the performance obligations.
3) The goods generated while the Company is in the process of performing the contract are indispensable,and the Company has the right to collect partial payments for the cumulative performance obligations that havebeen fulfilled so far within the contract period.
If the performance obligations are performed within the specified period, the Company will recognize therevenue within this period in accordance with the progress of the contract’s performance. If the performanceprogress cannot be reasonably determined and the costs incurred by the Company are expected to be compensated,the revenue will be ascertained according to the costs incurred, until the performance progress can be reasonablydetermined.
If the performance obligations are performed at the specified time point, the Company will recognize therevenue at the time when the client obtains control over the relevant goods or services. In judging whether theclient has obtained control over goods or services, the Company shall consider the following signs:
1) The Company has the current right to collect payment for the goods or services.
2) The Company has transferred the legal ownership of the goods to the client.
3) The Company has transferred physical possession of the goods to the client.
4) The Company has transferred the main risks and rewards of ownership of the goods to the client.
5) The customer has accepted the goods or services, etc.
The Company lists the right to receive considerations for transfer of goods or services to the customer as acontract asset, for which the impairment will be withdrawn on the basis of expected credit loss. The right of theCompany to unconditionally receive considerations from the customer is listed as receivables. The Companypresents the obligation to transfer goods or services to the customer for considerations received or receivable fromthe customer as a contract liability.
? Revenue measurement principle
1) If there are two or more performance obligations in the contract, the Company will apportion thetransaction price to each single performance obligation according to the relative proportion of the separate sellingprice of the goods or services promised by the single performance obligation at the beginning of the contract, andthe revenue shall be measured according to the transaction price apportioned to each single performanceobligation.
2) The transaction price refers to the amount of consideration that the Company expects to collect due to thetransfer of goods or services to the client, excluding the amount collected by third parties. The transaction pricerefers to the amount of consideration that the Company expects to collect for transfer of goods or services to theclient, excluding the amount collected by third parties. The expected amount to be returned to the client will belisted as a liability and not be included into the transaction price.
3) If there is significant financing in the contract, the Company shall determine the transaction priceaccording to the amount payable in cash when the client obtains control of the goods or services. The differencebetween the transaction price and the contract consideration shall be amortized by the effective interest methodduring the contract period. On the contract start date, if the Company estimates that the time between the client'sacquisition of control over goods or services and the payment of the price by the client will not exceed one year,the significant financing in the contract shall not be considered.
? Specific method for revenue recognitionRevenue recognized by time point
Selling electric appliances, fittings and materials by the Company is the performance obligation at a timepoint.Revenue recognition conditions for domestic sales commodity: The Company has delivered the product tothe customer according to the contract terms and the customer has received the product; the payment has beencollected or the receipt voucher has been provided and relevant economic profits might flow into the Company;main risks and remuneration as for the ownership of the commodity have been transferred; and legal ownershipand control right of the commodity have been transferred.
Revenue recognition conditions for exported commodity: The Company has declared the product to thecustoms and the product has been delivered according to the contract terms; the bill of lading has been obtained,the payment has been collected or the receipt voucher has been provided and relevant economic profits might flowinto the Company; main risks and remuneration as for the ownership of the commodity have been transferred; andlegal ownership and control right of the commodity have been transferred.Revenue recognized by performance progress
The technical service revenue of the Company and the business contract between the operating lease and thecustomer are the performance obligations to be performed within a period, for which the revenue shall berecognized according to the performance progress.Differences in accounting policies for revenue recognition due to different operating models for the sametype of business
32. Government grants
The government grants of the Company include fiscal appropriation. Asset-related government grants referto government grants obtained by the Company for purchasing and acquiring long-term assets or forming long-term assets by other ways. Income-related government grants refer to those other than asset-related governmentgrants. In case the purpose of a grant is not expressly stipulated in the government document, the Company willcategorize the grant according to these above principles. If it is difficult to categorize the grant, it will becategorized as the income-related government grant.
If a government grant is a monetary asset, it will be measured at the amount received; for the grantappropriated according to the fixed quota or for the grant where there is concrete evidence showing that theCompany is qualified to receive governmental financial support and will be able to receive the support by the endof the period, the grant will be measured at the receivable; if the government grant is a non-monetary asset, it willbe measured at the fair value, or measured at its nominal amount (RMB 1) if the fair value cannot be obtainedreliably.
If a government grant related to assets is recognized as deferred income, such grant is recognized in thecurrent profit or loss based on equal division within the service life of the relevant asset.
If the relevant asset has been sold, transferred, retired or damaged before the end of the service life, thebalance of the relevant deferred income that has not been allocated will be transferred into the current profit andloss of asset disposal.
Government grants related to income that compensate future costs, expenses or losses are recognized asdeferred income, and recognized in profit or loss in reporting the related costs, expenses or losses. Thegovernment grants relating to the ordinary activities are included in other income or deducted against relevantcosts and expenses according to the nature of the accounting event, otherwise, they are included in non-operatingincome. Government grants unrelated to daily activities will be included in non-operating income.
If the Company obtains the subsidized loan as a result of preferential financial policy, there will be twosituations: the Ministry of Finance appropriates the interest subsidy to the lending bank, or the Ministry ofFinance directly appropriates the subsidy to the Company, and the accounting treatment for each of thesesituations is as follows:
? Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank
provides the Company with the loan at a discounted interest rate, the Company will use the
actual amount of loan received as the book value of the loan, and calculate the relevantborrowing costs based on the principal of the loan and the interest rate.? Where the Ministry of Finance directly appropriate the interest subsidy to the Company, the
Company will deduct the corresponding interest subsidy against the borrowing costs.Where the governmental grants recognized by the Company need to be returned, the accounting treatmentwill be done as follows in the period they are returned:
1) Where the book value of relevant assets is deducted at the time of the initial recognition, the book valueof assets will be adjusted.
2) Where there is any deferred income concerned, the book balance of the deferred income will be deducted,but the excessive part will be included in the current profit or loss.
3) For other circumstances, the government grants will be directly included in the current profit or loss.
33. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities of the Company are calculated and recognizedbased on the differences (temporary differences) between the tax base and the book value of the assets orliabilities. For the deductible loss and tax credits that can be deducted annually in the subsequent years accordingto tax laws, the corresponding deferred income tax assets are recognized. Where the temporary differences arisefrom the initial recognition of goodwill, the corresponding deferred income tax liabilities are not recognized. Nodeferred income tax asset or deferred income tax liability is recognized where the temporary differences arisingfrom the initial recognition of assets or liabilities in a transaction that is not a business combination affect neitheraccounting profit nor taxable profit (or deductible loss). On the balance sheet date, the deferred income tax assetand liability are measured at the applicable tax rates during the period when the asset is realized or the liability issettled as expected.
The Company recognizes the deferred income tax asset to the extent that it is probable that the taxableincome will be available against which the deductible temporary differences, deductible losses and tax credits canbe deducted.
34. Lease
(1) Accounting method for operating lease
(1) Identification of lease
Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain period to obtainconsideration contracts. On the commencement date of the contract, the Company assesses whether the contractserves as the lease or includes the lease. If one party to the contract transfers the right to control one or moreidentified assets during a certain period in exchange for consideration, such contract is or includes lease. To
determine whether the contract has transferred the right to control the use of the identified assets in a certainperiod of time, the Company assesses whether the customer in the contract is entitled to receive almost all theeconomic benefits arising from the use of the identified assets during the use period and is entitled to manage theuse of the identified assets during the use period.If a number of separate leases are contained in one contract, the Company will split the contract and adoptaccounting methods to each lease on an individual basis. If a contract includes both lease and non-leasecomponents, the Company will separate the lease from the non-lease component before accounting treatment.
(2) The Company serves as the lessee
1） Lease confirmationAt the commencement of the lease term, the right-of-use assets and lease liabilities shall be recognized forthe lease by the Company. Refer to note on right-of-use assets and lease liabilities for details on the recognitionand measurement of right-of-use assets and lease liabilities.
2) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond the terms of theoriginal contract, including increasing or terminating the right to use one or more leased assets, extending orshortening the lease term stipulated in the contract, etc. The effective date of lease change refers to the date whenthe Parties reach the agreement on lease change.When a change happens to the lease and meets the following conditions, the Company will treat it as aseparate lease: ① the change expands the lease scope or extends lease term by increasing the right to use one ormore leased assets; ② the increased consideration is equivalent to the single price for the expanded portion oflease scope or the extended portion of lease term adjusted according to contract circumstances.In case where accounting treatment is not made for lease change as a single lease, on the effective date oflease change, the Company will appropriate the consideration of the changed contract according to the relevantprovisions of the lease criteria and redefine the updated lease term. In addition, the Company will discount thechanged lease payment according to the revised discount rate, so as to remeasure the lease liabilities. Incalculating the present value of the lease payment after the change, the Company uses the interest rate implicit inlease for the remaining lease term as the discount rate. if the interest rate implicit in lease for the remaining leaseterm cannot be determined, the incremental borrowing interest rate of the lessee on the effective date of leasechange shall be used as the discount rate by the Company. With regard to the impact of the above adjustment oflease liabilities, the Company adopts accounting methods in the following situations: ① In the event that thelease scope is narrowed down or the lease term is shortened as a result of the lease change, the lessee shall reducethe book value of the right-of-use assets, and the relevant gains or losses from the partial or complete terminationof the lease shall be included into the current loss and profit. ② For the lease liabilities remeasured due to otherlease changes, the lessee shall adjust the book value of the right-of-use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases at a low valuewhen individual leased assets are brand new, the Company chooses not to recognize the right-of-use assets andlease liabilities. Lease payments under short-term leases and leases of low-value assets are recognized by theCompany on a straight-line basis or other systematic and reasonable basis over the lease term, and included intothe cost of the related assets or current profits or losses.
(3) The Company serves as the lessor
On the basis of the contract is evaluated as a lease or including a lease in (1), the Company, as the lessor,divides the lease into financial lease and operating lease at the commencement of the lease.
A lease that transfers in substance almost all the risks and rewards incident to ownership of a leased asset isclassified as a financial lease by the lessor. A lease other than the financial lease is an operating lease.
The Company usually classifies a lease as a financial lease if one or more of the following situations exist:
① the ownership of the leased asset is transferred to the lessee at the expiration of the lease term; ② the lesseehas the right to choose to purchase the leased asset; the established purchase price is expected to be much lowerthan the fair value of the leased asset when the right of choice is exercised, and hence it can be reasonablydetermined that the lessee will exercise this right of choice on the inception of lease; ③ the lease term accountsfor a substantial proportion (no less than 75%) of the service life of the leased asset, notwithstanding that theownership of the asset will not be transferred; and ④ on the inception of lease, the present value of the leasereceipts is almost equal to the fair value of the leased asset (no less than 90% of the fair value of the leased asset.).and ⑤ the leased assets are of a specialized nature that only the lessee can use them without making majormodifications. The Company may also classify a lease as a financial lease if one or more of the following signsexist: ① if the lessee cancels the lease, the resulting loss to the lessor shall be borne by the lessee; ② the gain orloss arising from the fluctuation in the fair value of the residual value of the asset shall be attributable to thelessee; and ③ the lessee is able to continue the lease to the next period at a rent much lower than the market level.
1) Accounting treatment of financial lease
Initial measurement
On the commencement date of lease term, the Company recognizes financial lease receivables for financiallease and derecognizes financial lease assets. Upon initial measurement of financial lease accounts receivable, theCompany takes net investment in lease as entry value of financial lease accounts receivable.
Net investment in lease is the sum of unsecured residual value and the present value of outstanding leasereceipts discounted on interest rate implicit in lease on the commencement date of the lease term. Lease receiptsrefer to the amount that the lessor shall collect from the lessee for transferring the right to use the leased assetsduring the lease term, including: ① the amount of fixed payment and substantial fixed payment to be paid by thelessee, net of relevant amount of lease incentives if any; ② variable lease payments that are based on an index or
rate, which shall be determined at the time of initial measurement based on the index or rate on thecommencement date of the lease term; ③ exercise price of call option, given that the lessee will reasonablyexercise such option; ④ amount payable by the lessee for exercising the option to terminate the lease, if it isindicated during the lease term that the lessee will exercise the option to terminate the lease; ⑤ the residual valueof the guarantee provided to the lessor by the lessee, a party related to the lessee and an independent third partywith the financial ability to meet the guarantee obligation.Subsequent measurementThe Company calculates and recognizes the interest income in each period of the lease term according to thefixed periodic rate. Such periodic rate refers to the implicit discount rate used to determine the net investment inthe lease (in case of sublease, the discount rate of the original lease is adopted if the interest rate implicit in leaseof the sublease cannot be determined (adjustments are made based on the initial direct costs associated withsublease)), or the revised discount rate determined according to the relevant provisions when the change of thefinancial lease has not been treated as a separate lease for accounting, and it is satisfied that the lease will beclassified as the financial lease if the change takes effect at the beginning of the lease.
Accounting treatment of lease changeWhen a change happens to the financial lease and meets the following conditions, the Company will treat itas a separate lease: ① the change expands the lease scope by increasing the right to use one or more leased assets;
② the increased consideration is equivalent to the single price for the expanded portion of lease scope adjustedaccording to contract circumstances.
If such a change to the financial lease is not accounted for as a separate lease and the condition is satisfiedthat if the change becomes effective on the commencement date of the lease, the lease is classified as an operatinglease, the Company will account for it as a new lease from the effective date of the lease change and regard thenet lease investment prior to the effective date of the lease change as the book value of the leased asset.
2) Accounting treatment of operating leases
Treatment of rent
The Company adopts the straight-line method or other systematic and reasonable methods to recognize thelease receipts from operating leases as rental income during all periods within the lease term.
Incentive measures provided
If a rent-free period is provided, total rent shall be amortized by adopting the straight-line method or othersystematic and reasonable methods within the lease term not excluding the rent-free period, and the rental incomeshall be recognized in the rent-free period. Certain costs incurred by the lessee, if undertaken by the Company,shall be excluded from total rental income and the balance of rental income after deducting these costs shall beamortized within the lease term.
Initial direct costs
The initial direct costs incurred by the Company related to the operating lease shall be capitalized to the costof leased underlying asset and shall be included into current profits and losses on the same basis as recognition ofrental income during the lease term.
Depreciation
For fixed assets included in assets under operating leases, accrual depreciation shall base on the depreciationpolicy adopted by the Company for similar assets. Other assets under operating leases shall be amortized in asystematic and reasonable manner.
Variable lease payments
Variable lease payments acquired by the Company in connection with operating leases that are not includedin the lease receipts are included into the current profits and losses when actually incurred.
Change of operating lease
In case of changes in the operating lease, the Company will treat it as a new lease as of the effective date ofthe change, and the lease advance or accounts receivable related to the lease before the change will be regarded asthe amount received from the new lease.
35. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
?Applicable □Not applicable
| Contents and reasons for accounting policies changes | Approval procedure | Remarks |
| On December 13, 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises (CK [2022] No. 31). The Company has implemented the Interpretation No. 16 of the ASBE since January 1, 2023. | The 2nd meeting of the 6th Board of Directors |
On December 13, 2022, the Ministry of Finance issued the Interpretation No. 16 of the AccountingStandards for Business Enterprises (CK [2022] No. 31), wherein the accounting treatment for deferred income taxrelated to assets and liabilities arising from single transaction not eligible for initial recognition exemption iseffective from January 1, 2023, without requiring retrospective adjustments.
For single transaction subject to this regulation that occurred between the beginning of the earliest reportingperiod for which this regulation is first applied and the implementation date, as well as temporary differences anddeductible temporary differences arising from the recognition of right-of-use assets and lease liabilities at thebeginning of the earliest reporting period due to the application of this regulation, adjustments shall be made in
accordance with this regulation. The implementation of this regulation has not had a significant impact on thefinancial condition and operating results of the Company.
(2) Significant accounting estimate changes
□Applicable ?Not applicable
(3) Relevant financial statement items at the beginning of 2023 when the adjustments stipulated in the new accountingstandards apply for the first time
□Applicable ?Not applicable
VI. Taxation
1. Main tax categories and tax rates
| Category | Tax base | Tax rate |
| VAT | Income from sales of goods | 13% |
| VAT | Income from provision of technical services | 6% |
| VAT | Rental income | 5%, 9% |
| City maintenance and construction tax | Turnover tax payable | 7% |
| Education surcharge | Turnover tax payable | 3% |
| Local education surcharge | Turnover tax payable | 2% |
| House tax | 70% of the original value of the house | 1.2% |
| House tax | Rental income | 12% |
| Land use tax | Total land area | RMB 5-10/m2 |
| Corporate income tax | Taxable income | 8.25%, 15%, 16.5%, 20%, 25% |
Disclosure of taxpayers with different corporate income tax rates
| Name of taxpayer | Income tax rate |
| Hangzhou Robam Appliances Co., Ltd. | 15% |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 15% |
| Zhejiang Cookingfuture Technology Co., Ltd. | 25% |
| Beijing Robam Appliances Sales Co., Ltd. | 25% |
| Shanghai Robam Appliances Sales Co., Ltd. | 25% |
| Hangzhou MingQi Electric Co., Ltd. | 25% |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 25% |
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 20% |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | 25% |
| Robam Appliances Holding (HK) Co., Ltd. (Note 1) | The tax rate for profits less than 2 million Hong Kong Dollars under the second-tier tax system is 8.25%, and for the excess portion equal to or greater than 2 million Hong Kong Dollars, it is 16.5%. |
| Robam International (HK) Trading Co., Ltd. (Note 1) | The tax rate for profits less than 2 million Hong Kong Dollars under the second-tier tax system is 8.25%, and for the excess portion equal to or greater than 2 million Hong Kong Dollars, it is 16.5%. |
2. Preferential tax policy
The Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR202033007142)jointly issued by Department of Science and Technology of Zhejiang Province, Zhejiang ProvincialDepartment of Finance, Zhejiang Provincial Tax Service, State Taxation Administration, and LocalTaxation Bureau of Zhejiang Province on December 1, 2020. The certificate is valid for 3 years.According to the relevant provisions, after being identified as a high-tech enterprise, the Company willenjoy the relevant preferential policies of the state on high-tech enterprises for three consecutive years(i.e., the Company is entitled to the preferential income tax policy from January 1, 2020 to December 31,2022), and the corporate income tax shall be levied at the rate of 15%.According to the Announcement of the State Taxation Administration on the Implementation ofPreferential Income Tax Policy for Hi-tech Enterprises (Announcement 2017 No. 24 of the StateTaxation Administration), an enterprise shall prepay the income tax temporarily at the rate of 15% beforepassing the re-certification in the year when the enterprise's Certificate of High-Tech Enterprise expires,and if it still fails to obtain the qualification as a high-tech enterprise before the end of the year, it shallmake up for the taxes of the corresponding period in accordance with the regulations The Company hasreapplied for the qualification of high-tech enterprise. Before the recognition is approved, the corporateincome tax will be temporarily prepaid at a tax rate of 15% in 2023The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.(hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise (CertificateNo.: GR202233010421) jointly issued by Department of Science and Technology of Zhejiang Province,Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State TaxationAdministration on December 24, 2022. After the recognition, it will enjoy the preferential tax policy ofthe state on high-tech enterprises for three consecutive years (i.e., it is entitled to the preferential incometax policy from January 1, 2022 to December 31, 2024), and its corporate income tax shall be levied atthe tax rate of 15%.According to the Announcement [2023] No. 6 of the State Taxation Administration), HangzhouRobam Fuchuang Investment Management Co., Ltd., a subsidiary of the Company, will include 25% ofthe portion of annual taxable income not exceeding RMB 1 million of small and micro-profit enterprisesinto the taxable income, and pay corporate income tax at a rate of 20%.Preferential VAT policyAccording to the Notice on Value-Added Tax Policies for Software Products Issued by the Ministryof Finance and the State Taxation Administration (CS [2011] No. 100), the Company's sales of embeddedsoftware products are eligible for immediate VAT refund after collection.Preferential land use tax policy
According to Article 7 of the Decision of the State Council on Amending the Interim Regulations of thePeople's Republic of China on Urban Land Use Tax (State Council Order No. 483 of the People'sRepublic of China), the Company enjoys preferential policies of exemption from land use tax.VII. Notes to items in the consolidated financial statements
1. Cash and cash equivalents
In RMB
| Item | Ending balance | Beginning balance |
| Cash in hand | 182,584.13 | 85,806.05 |
| Deposit in bank | 5,776,710,554.59 | 5,194,887,841.18 |
| Other cash and cash equivalents | 101,898,241.34 | 97,789,023.71 |
| Total | 5,878,791,380.06 | 5,292,762,670.94 |
Other descriptionNote: The other cash and cash equivalents are RMB 101,898,241.34, including the L/G margin of RMB84,024,115.13, the bill acceptance margin of RMB 16,884,355.85 and the ETC margin of RMB 13,000.00, the useof which are limited; and the Alipay and WeChat wallet balance is RMB 976,770.36, which can be withdrawnwithout any limit at any time.Use of restricted cash and cash equivalents
| Item | Ending balance | Beginning balance |
| Letter of guarantee and margin for acceptance of bill | 100,908,470.98 | 96,335,329.20 |
| ETC margin | 13,000.00 | 13,000.00 |
| Total | 100,921,470.98 | 96,348,329.20 |
2. Financial assets held for trading
In RMB
| Item | Ending balance | Beginning balance |
| Financial assets measured at fair value with changes included into current profit or loss | 2,315,606,606.83 | 2,511,844,508.00 |
| Including: | ||
| financial products | 2,315,606,606.83 | 2,511,844,508.00 |
| Total | 2,315,606,606.83 | 2,511,844,508.00 |
3. Notes receivable
(1) Classified presentation of notes receivable
In RMB
| Item | Ending balance | Beginning balance |
| Banker’s acceptance | 578,318,951.21 | 609,791,571.72 |
| Trade acceptance | 119,521,959.74 | 271,981,769.99 |
| Total | 697,840,910.95 | 881,773,341.71 |
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Notes receivable with an individual bad debt provision | 12,553,205.80 | 1.39% | 6,659,943.22 | 53.05% | 5,893,262.58 | |||||
| Including: | ||||||||||
| Bad debt provisions by individual item | 12,553,205.80 | 1.39% | 6,659,943.22 | 53.05% | 5,893,262.58 | |||||
| Notes receivable with a collective bad debt | 704,131,540.67 | 100.00% | 6,290,629.72 | 0.89% | 697,840,910.95 | 889,884,737.69 | 98.61% | 14,004,658.56 | 1.57% | 875,880,079.13 |
| Including: | ||||||||||
| Including: Banker’s acceptance | 578,318,951.21 | 82.13% | 578,318,951.21 | 609,791,571.72 | 67.57% | 609,791,571.72 | ||||
| Trade acceptance | 125,812,589.46 | 17.87% | 6,290,629.72 | 5.00% | 119,521,959.74 | 280,093,165.97 | 31.04% | 14,004,658.56 | 5.00% | 266,088,507.41 |
| Total | 704,131,540.67 | 100.00% | 6,290,629.72 | 0.89% | 697,840,910.95 | 902,437,943.49 | 100.00% | 20,664,601.78 | 2.29% | 881,773,341.71 |
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Banker’s acceptances combined | 578,318,951.21 | 0.00 | 0.00% |
| Trade acceptances combined | 125,812,589.46 | 6,290,629.72 | 5.00% |
| Total | 704,131,540.67 | 6,290,629.72 |
(2) Bad debt provision, and its recovery or reversal in the current periodBad debt provision in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Trade acceptance | 20,664,601.78 | -14,373,972.06 | 6,290,629.72 | |||
| Total | 20,664,601.78 | -14,373,972.06 | 6,290,629.72 | |||
Significant recoveries or reversals of provisions for bad debts during the reporting period:
□Applicable ?Not applicable
(3) Notes transferred to accounts receivable by the Company due to drawer’s non-performance at the end ofthe period
In RMB
| Item | Amount of accounts receivable transferred at the end of the period |
| Trade acceptance | 388,054,304.18 |
| Total | 388,054,304.18 |
5. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 1,579,340,304.84 | 54.96% | 1,007,919,074.13 | 63.82% | 571,421,230.71 | 1,639,679,315.79 | 58.71% | 1,030,780,696.17 | 62.86% | 608,898,619.62 |
| Including: | ||||||||||
| Bad debt provisions by individual item | 1,579,340,304.84 | 54.96% | 1,007,919,074.13 | 63.82% | 571,421,230.71 | 1,639,679,315.79 | 58.71% | 1,030,780,696.17 | 62.86% | 608,898,619.62 |
| Accounts receivable with a collective bad debt provision | 1,294,467,156.01 | 45.04% | 84,234,627.38 | 6.51% | 1,210,232,528.63 | 1,153,269,565.99 | 41.29% | 72,561,356.67 | 6.29% | 1,080,708,209.32 |
| Including: | ||||||||||
| Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision | 1,294,467,156.01 | 45.04% | 84,234,627.38 | 6.51% | 1,210,232,528.63 | 1,153,269,565.99 | 41.29% | 72,561,356.67 | 6.29% | 1,080,708,209.32 |
| Total | 2,873,807,460.85 | 100.00% | 1,092,153,701.51 | 38.00% | 1,781,653,759.34 | 2,792,948,881.78 | 100.00% | 1,103,342,052.84 | 39.50% | 1,689,606,828.94 |
Bad debt provisions by individual item:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
| Unit 1 | 657,106,467.98 | 657,106,467.98 | 100.00% | Debt default |
| Unit 2 | 541,917,836.68 | 162,577,431.46 | 30.00% | Overdue debt |
| Unit 3 | 116,422,160.38 | 47,034,405.36 | 40.40% | Overdue debt |
| Unit 4 | 78,095,830.77 | 54,667,081.53 | 70.00% | Debt default |
| Unit 5 | 31,086,961.45 | 6,217,392.29 | 20.00% | Overdue debt |
| Unit 6 | 28,139,039.02 | 19,225,685.81 | 68.32% | Overdue debt |
| Unit 7 | 24,428,569.14 | 6,195,424.47 | 25.36% | Overdue debt |
| Unit 8 | 22,763,973.13 | 15,934,781.19 | 70.00% | Debt default |
| Unit 9 | 14,080,420.74 | 8,587,655.52 | 60.99% | Overdue debt |
| Unit 10 | 13,773,333.34 | 3,646,561.03 | 26.48% | Overdue debt |
| Unit 11 | 13,671,133.59 | 6,306,115.04 | 46.13% | Overdue debt |
| Unit 12 | 8,644,489.50 | 6,051,142.65 | 70.00% | Debt default |
| Unit 13 | 8,009,318.82 | 2,345,903.11 | 29.29% | Overdue debt |
| Unit 14 | 4,204,830.93 | 2,943,381.65 | 70.00% | Debt default |
| Unit 15 | 3,660,575.03 | 1,415,427.52 | 38.67% | Overdue debt |
| Unit 16 | 13,335,364.34 | 7,664,217.52 | 57.47% | Expected to be exposed to recovery risk |
| Total | 1,579,340,304.84 | 1,007,919,074.13 |
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| With 1 year | 1,104,644,435.40 | 55,232,221.79 | 5.00% |
| 1-2 years | 142,429,477.11 | 14,242,947.71 | 10.00% |
| 2-3 years | 36,173,783.46 | 7,234,756.69 | 20.00% |
| 3-4 years | 6,221,442.98 | 3,110,721.49 | 50.00% |
| 4-5 years | 2,920,186.80 | 2,336,149.44 | 80.00% |
| More than 5 years | 2,077,830.26 | 2,077,830.26 | 100.00% |
| Total | 1,294,467,156.01 | 84,234,627.38 | |
Description on basis for determining combination：
If the bad debt provisions for accounts receivable is recognized in accordance with the expected general credit loss model,please disclose the relevant information of the bad debt provisions in the same manner as the disclosure of other accountsreceivable.
□Applicable ?Not applicable
Disclosed based on the aging
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,379,014,659.28 |
| Within 1 year (including 1 year) | 1,379,014,659.28 |
| 1-2 years | 1,100,579,786.95 |
| 2-3 years | 352,124,136.31 |
| More than 3 years | 42,088,878.31 |
| 3-4 years | 7,614,738.77 |
| 4-5 years | 26,807,322.13 |
| More than 5 years | 7,666,817.41 |
| Total | 2,873,807,460.85 |
(2) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt reserves for accounts receivable | 1,103,342,052.84 | 27,424,660.76 | 38,556,641.14 | 56,370.95 | 1,092,153,701.51 | |
| Total | 1,103,342,052.84 | 27,424,660.76 | 38,556,641.14 | 56,370.95 | 1,092,153,701.51 | |
(3) Accounts receivable actually written off in the current period
In RMB
| Item | Amounts written off |
| Accounts receivable actually written off | 56,370.95 |
(4) Top five debtors with the largest ending balances of accounts receivable
In RMB
| Unit | Ending balance of accounts receivable | Proportion in the total ending balance of accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | 541,936,354.72 | 18.86% | 160,861,018.17 |
| Unit 2 | 452,376,997.98 | 15.74% | 452,376,997.98 |
| Unit 3 | 215,712,302.12 | 7.51% | 10,805,775.09 |
| Unit 4 | 95,125,955.20 | 3.31% | 95,125,955.20 |
| Unit 5 | 83,171,694.86 | 2.89% | 4,158,584.74 |
| Total | 1,388,323,304.88 | 48.31% |
(5) Accounts receivable whose recognition is terminated due to transferal of financial assets
? Amount of assets and liabilities arising from the transfer of accounts receivable and continuedinvolvement
| Asset item | Ending balance | Liability item | Ending balance |
| Accounts receivable with recourse factoring | 6,715,891.92 | Short-term borrowings | 6,715,891.92 |
6. Advance payments
(1) Advance payments presented by age
In RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| With 1 year | 183,566,440.82 | 99.32% | 176,828,710.59 | 99.62% |
| 1-2 years | 1,134,681.12 | 0.61% | 331,685.80 | 0.19% |
| 2-3 years | 81,569.77 | 0.04% | 309,887.50 | 0.17% |
| More than 3 years | 54,528.03 | 0.03% | 30,069.48 | 0.02% |
| Total | 184,837,219.74 | 177,500,353.37 | ||
Explanation on the reasons for no timely settlement of advance payments with an account age of over 1 year and significantamount:
(2) Top five payers with the largest ending balances of advance payments
The ending balances of advance payments of the top five payers by the end of the current period totaledRMB 65,777,907.89, accounting for 35.59% of the total.
Other description:
7. Other accounts receivable
In RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 104,345,008.35 | 80,429,057.84 |
| Total | 104,345,008.35 | 80,429,057.84 |
Other accounts receivable
1) Classification of other accounts receivable by nature
In RMB
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Security/guarantee deposits | 41,749,526.32 | 38,184,552.92 |
| Collections by a third party | 66,011,015.04 | 50,695,825.81 |
| Cash reserve | 7,456,903.93 | 2,601,040.33 |
| Withholdings | 6,654,501.04 | 4,898,268.76 |
| Others | 1,158,091.06 | 519,033.02 |
| Total | 123,030,037.39 | 96,898,720.84 |
2) Bad debt provision
In RMB
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
| Balance as of January 1, 2023 | 16,469,663.00 | 16,469,663.00 | ||
| Balance on January 1, 2023 in the current period | ||||
| Provision in the current period | 2,215,366.04 | 2,215,366.04 | ||
| Balance as of June 30, 2023 | 18,685,029.04 | 18,685,029.04 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable ?Not applicable
Disclosed based on the aging
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 94,698,406.83 |
| Within 1 year (including 1 year) | 94,698,406.83 |
| 1-2 years | 8,273,716.75 |
| 2-3 years | 6,735,204.93 |
| More than 3 years | 13,322,708.88 |
| 3-4 years | 2,402,760.48 |
| 4-5 years | 1,714,913.00 |
| More than 5 years | 9,205,035.40 |
| Total | 123,030,037.39 |
3) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt provision for other receivables | 16,469,663.00 | 2,215,366.04 | 18,685,029.04 | |||
| Total | 16,469,663.00 | 2,215,366.04 | 18,685,029.04 | |||
4) Top five debtors with the largest ending balances of other accounts receivable
In RMB
| Unit | Nature of receivable | Ending balance | Aging | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | Collections by a third party and unit deposits | 42,366,468.93 | 0-5 years and above | 34.44% | 2,247,773.50 |
| Unit 2 | Collections by a third party and unit deposits | 6,168,313.58 | 0-5 years | 5.01% | 363,415.70 |
| Unit 3 | Collections by a third party and unit deposits | 5,858,119.76 | 0-3 years | 4.76% | 372,256.20 |
| Unit 4 | Collections by a third party and unit deposits | 5,797,765.08 | 0-5 years and above | 4.71% | 339,888.30 |
| Unit 5 | Unit deposits | 5,500,000.00 | With 1 year | 4.47% | 275,000.00 |
| Total | 65,690,667.35 | 53.39% | 3,598,333.70 |
8. Inventories
(1) Classification of inventories
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | |
| Delivered goods | 894,301,401.87 | 31,897,303.28 | 862,404,098.59 | 946,934,786.68 | 34,166,612.43 | 912,768,174.25 |
| Merchandise inventory | 448,216,935.22 | 35,057,065.80 | 413,159,869.42 | 433,960,199.87 | 38,422,564.56 | 395,537,635.31 |
| Raw materials | 89,091,388.40 | 89,091,388.40 | 124,228,344.80 | 124,228,344.80 | ||
| Low-cost consumables and packing materials | 25,474,820.36 | 25,474,820.36 | 22,715,660.50 | 22,715,660.50 | ||
| Products in process | 108,746,110.84 | 108,746,110.84 | 110,725,274.36 | 110,725,274.36 | ||
| Contract performance costs | 33,756,452.26 | 33,756,452.26 | 44,135,708.88 | 44,135,708.88 | ||
| Total | 1,599,587,108.95 | 66,954,369.08 | 1,532,632,739.87 | 1,682,699,975.09 | 72,589,176.99 | 1,610,110,798.10 |
(2) Provision for obsolete inventory or for impairment of the cost of contract performance
In RMB
| Item | Beginning balance | Increased amount in the current period | Decreased amount in the current period | Ending balance | ||
| Provision | Others | Reversals or write-off | Others | |||
| Delivered goods | 34,166,612.43 | -2,269,309.15 | 31,897,303.28 | |||
| Merchandise inventory | 38,422,564.56 | -3,365,498.76 | 35,057,065.80 | |||
| Total | 72,589,176.99 | -5,634,807.91 | 66,954,369.08 | |||
10. Long-term equity investment
In RMB
| Investee | Beginning balance（book value) | Increase/decrease in the current period | Ending balance（book value) | Ending balance of impairment provisio | |||||||
| Additional investment | Negative investment | Investment profit or loss recogniz | Adjustment of other comprehensive | Other changes in equity | Cash dividends or profits declared | Impairment provision | Others | ||||
| ed using the equity method | incomes | and distributed | n | ||||||||
| I. Joint venture | |||||||||||
| De Dietrich Trade (Shanghai) Co., Ltd. | 3,824,460.03 | -551,583.95 | 3,272,876.08 | ||||||||
| Subtotal | 3,824,460.03 | -551,583.95 | 3,272,876.08 | ||||||||
| II. Associated enterprises | |||||||||||
| Zhejiang Tingshuo Brand Operation Management Co., Ltd. | 1,065,993.31 | -468,139.70 | 597,853.61 | ||||||||
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | 3,828,052.28 | -243,460.40 | 3,584,591.88 | ||||||||
| Subtotal | 4,894,045.59 | -711,600.10 | 4,182,445.49 | ||||||||
| Total | 8,718,505.62 | -1,263,184.05 | 7,455,321.57 | ||||||||
11. Other equity instrument investments
In RMB
| Item | Ending balance | Beginning balance |
| Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | 2,116,023.22 |
| Total | 2,116,023.22 | 2,116,023.22 |
Disclosure of non-tradable equity instrument investment by item in the current period
In RMB
| Name of item | Recognized dividends | Accumulated gains | Accumulated losses | Amount transferred | Reason for being | Reason for the transfer |
| income | from other comprehensive incomes to retained earnings | designated to be measured by fair value and the change being recorded in other comprehensive income | of other comprehensive incomes to retained earnings | |||
| Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | 100,000,000.00 | Held not for the purpose of trading | ||||
| Shanghai MXCHIP Information Technology Co., Ltd. | 17,832,510.78 | Held not for the purpose of trading |
12. Investment real estate
(1) Investment real estate under the cost measurement mode
?Applicable □Not applicable
In RMB
| Item | Buildings | Land use right | Total |
| I. Original book value | |||
| 1. Beginning balance | 61,641,757.01 | 1,062,744.00 | 62,704,501.01 |
| 2. Increased amount in the current period | 41,366,660.67 | 41,366,660.67 | |
| (1) Outsourcing | 3,808,528.00 | 3,808,528.00 | |
| (2) Transfer from inventories/fixed assets/construction in progress | 37,558,132.67 | 37,558,132.67 | |
| (3) Increased amount in business combination | |||
| 3. Decreased amount in the current period | |||
| (1) Disposal | |||
| (2) Other transfer-out | |||
| 4. Ending balance | 103,008,417.68 | 1,062,744.00 | 104,071,161.68 |
| II. Accumulated depreciation and amortization |
| 1. Beginning balance | 6,480,766.87 | 336,535.60 | 6,817,302.47 |
| 2. Increased amount in the current period | 2,439,617.59 | 10,627.44 | 2,450,245.03 |
| (1) Accrual or amortization | 2,439,617.59 | 10,627.44 | 2,450,245.03 |
| 3. Decreased amount in the current period | |||
| (1) Disposal | |||
| (2) Other transfer-out | |||
| 4. Ending balance | 8,920,384.46 | 347,163.04 | 9,267,547.50 |
| III. Impairment provision | |||
| 1. Beginning balance | |||
| 2. Increased amount in the current period | |||
| (1) Provision | |||
| 3. Decreased amount in the current period | |||
| (1) Disposal | |||
| (2) Other transfer-out | |||
| 4. Ending balance | |||
| IV. Book value | |||
| 1. Ending book value | 94,088,033.22 | 715,580.96 | 94,803,614.18 |
| 2. Beginning book value | 55,160,990.14 | 726,208.40 | 55,887,198.54 |
13. Fixed assets
In RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 1,585,809,148.56 | 1,622,235,227.74 |
| Disposal of fixed assets | 14,868.65 | |
| Total | 1,585,824,017.21 | 1,622,235,227.74 |
(1) Fixed assets
In RMB
| Item | Houses and buildings | Machine and equipment | Transportation equipment | Other equipment | Total |
| I. Original book value: | |||||
| 1. Beginning balance | 1,523,220,278.27 | 772,545,629.62 | 22,374,395.72 | 100,291,571.58 | 2,418,431,875.19 |
| 2. Increased amount in the current period | 20,459,727.29 | 47,079,335.37 | 411,327.43 | 9,696,218.33 | 77,646,608.42 |
| (1) Purchase | 977,189.88 | 2,828,491.16 | 411,327.43 | 578,489.30 | 4,795,497.77 |
| (2) Transfer from construction in progress | 19,482,537.41 | 44,250,844.21 | 9,117,729.03 | 72,851,110.65 | |
| 3. Decreased amount in the current period | 37,558,132.67 | 2,971,354.22 | 1,168,153.67 | 420,470.46 | 42,118,111.02 |
| (1) Disposal or retirement | 2,971,354.22 | 1,168,153.67 | 420,470.46 | 4,559,978.35 | |
| (2) Other decreases | 37,558,132.67 | 37,558,132.67 | |||
| 4. Ending balance | 1,506,121,872.89 | 816,653,610.77 | 21,617,569.48 | 109,567,319.45 | 2,453,960,372.59 |
| II. Accumulated depreciation | |||||
| 1. Beginning balance | 321,138,425.43 | 395,184,441.84 | 14,716,378.28 | 65,157,401.90 | 796,196,647.45 |
| 2. Increased amount in the current period | 35,424,531.71 | 30,617,780.33 | 921,753.56 | 6,860,725.84 | 73,824,791.44 |
| (1) Provision | 35,424,531.71 | 30,617,780.33 | 921,753.56 | 6,860,725.84 | 73,824,791.44 |
| 3. Decreased amount in the current period | 398,543.79 | 897,570.06 | 574,101.01 | 1,870,214.86 | |
| (1) Disposal or retirement | 398,543.79 | 897,570.06 | 574,101.01 | 1,870,214.86 | |
| 4. Ending balance | 356,562,957.14 | 425,403,678.38 | 14,740,561.78 | 71,444,026.73 | 868,151,224.03 |
| III. Impairment provision | |||||
| 1. Beginning balance | |||||
| 2. Increased amount in the current period | |||||
| 3. Decreased amount in the current period | |||||
| 4. Ending balance |
| IV. Book value | |||||
| 1. Ending book value | 1,149,558,915.75 | 391,249,932.39 | 6,877,007.70 | 38,123,292.72 | 1,585,809,148.56 |
| 2. Beginning book value | 1,202,081,852.84 | 377,361,187.78 | 7,658,017.44 | 35,134,169.68 | 1,622,235,227.74 |
(2) Fixed asset without certificate of title
In RMB
| Item | Book value | Reasons for failure to obtain the property right certificate |
| Houses and buildings | 695,125,331.52 | The formalities for newly built houses are being processed |
(3) Disposal of fixed assets
In RMB
| Item | Ending balance | Beginning balance |
| Disposal of fixed assets | 14,868.65 | 0,00 |
| Total | 14,868.65 |
14. Construction in progress
In RMB
| Item | Ending balance | Beginning balance |
| Construction in process | 463,232,352.92 | 406,258,146.69 |
| Total | 463,232,352.92 | 406,258,146.69 |
(1) Construction in progress
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Construction of Maoshan Intelligent Manufacturing Base infrastructure | 199,024,556.32 | 199,024,556.32 | 192,769,369.56 | 192,769,369.56 | ||
| Robam Mansion project | 254,045,734.41 | 254,045,734.41 | 192,286,508.04 | 192,286,508.04 | ||
| Project of the First Production Department | 663,716.80 | 663,716.80 | 5,941,592.92 | 5,941,592.92 | ||
| Customized management software | 4,922,885.32 | 4,922,885.32 | 5,505,845.75 | 5,505,845.75 | ||
| Project of the Third Production Department | 747,113.74 | 747,113.74 | 3,855,078.16 | 3,855,078.16 | ||
| Project of the Second Production Department | 1,387,610.64 | 1,387,610.64 | 1,387,610.64 | 1,387,610.64 | ||
| Other smaller projects | 2,440,735.69 | 2,440,735.69 | 4,512,141.62 | 4,512,141.62 | ||
| Total | 463,232,352.92 | 463,232,352.92 | 406,258,146.69 | 406,258,146.69 |
(2) Current changes in major projects under construction
In RMB
| Name of item | Budget | Beginning balance | Increased amount in the current period | Amount transferred into fixed assets in the current period | Other decreases in the current period | Ending balance | Proportion of accumulative construction investment in the budget | Project progress | Accumulated amount of capitalized interest | Including: capitalized interests in the current period | Interest capitalization rate in the current period | Funding source |
| Construction of Maoshan Intelligent Manufacturing Base infrastructure | 954,238,416.50 | 192,769,369.56 | 50,254,074.86 | 43,998,888.10 | 199,024,556.32 | 86.27% | 86.27 | Others | ||||
| Robam Mansion project | 724,750,000.00 | 192,286,508.04 | 61,759,226.37 | 254,045,734.41 | 35.05% | 35.05 | Others | |||||
| Total | 1,678,988,416.50 | 385,055,877.60 | 112,013,301.23 | 43,998,888.10 | 453,070,290.73 |
14. Right-of-use assets
In RMB
| Item | Houses and buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 33,078,049.02 | 33,078,049.02 |
| 2. Increased amount in the current period | ||
| 3. Decreased amount in the current period | 3,146,563.11 | 3,146,563.11 |
| (1) Disposal | 3,146,563.11 | 3,146,563.11 |
| 4. Ending balance | 29,931,485.91 | 29,931,485.91 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 10,857,904.89 | 10,857,904.89 |
| 2. Increased amount in the current period | 2,662,033.50 | 2,662,033.50 |
| (1) Provision | 2,662,033.50 | 2,662,033.50 |
| 3. Decreased amount in the current period | 129,089.76 | 129,089.76 |
| (1) Disposal | 129,089.76 | 129,089.76 |
| 4. Ending balance | 13,390,848.63 | 13,390,848.63 |
| III. Impairment provision | ||
| 1. Beginning balance | ||
| 2. Increased amount in the current period | ||
| (1) Provision | ||
| 3. Decreased amount in the current period | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 16,540,637.28 | 16,540,637.28 |
| 2. Beginning book value | 22,220,144.13 | 22,220,144.13 |
Other description:
15. Intangible assets
(1) Intangible assets
In RMB
| Item | Land use right | 3. Patent right | Software | Trademark | Total |
| I. Original book value | |||||
| 1. Beginning balance | 224,593,935.95 | 7,300,000.00 | 66,054,963.42 | 24,624,622.64 | 322,573,522.01 |
| 2. Increased amount in the current period | 2,043,855.39 | 2,043,855.39 | |||
| (1) Purchase | 766,037.73 | 766,037.73 | |||
| (2) Internal research and development | |||||
| (3) Increased amount in business combination | |||||
| (4) Transfer from construction in progress | 1,277,817.66 | 1,277,817.66 | |||
| 3. Decreased amount in the current period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 224,593,935.95 | 7,300,000.00 | 68,098,818.81 | 24,624,622.64 | 324,617,377.40 |
| II. Accumulated amortization | |||||
| 1. Beginning balance | 34,355,786.06 | 5,053,846.15 | 50,741,829.14 | 11,065,502.28 | 101,216,963.63 |
| 2. Increased amount in the current period | 2,248,848.08 | 561,538.46 | 2,729,064.83 | 1,231,231.12 | 6,770,682.49 |
| (1) Provision | 2,248,848.08 | 561,538.46 | 2,729,064.83 | 1,231,231.12 | 6,770,682.49 |
| 3. Decreased amount in the current period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 36,604,634.14 | 5,615,384.61 | 53,470,893.97 | 12,296,733.40 | 107,987,646.12 |
| III. Impairment provision | |||||
| 1. Beginning balance | |||||
| 2. Increased amount in the current period | |||||
| 3. Decreased amount in the current period |
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 187,989,301.81 | 1,684,615.39 | 14,627,924.84 | 12,327,889.24 | 216,629,731.28 |
| 2. Beginning book value | 190,238,149.89 | 2,246,153.85 | 15,313,134.28 | 13,559,120.36 | 221,356,558.38 |
16. Goodwill
(1) Original book value of goodwill
In RMB
| Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Generated by business combination | Disposal | |||||
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 80,589,565.84 | 80,589,565.84 | ||||
| Total | 80,589,565.84 | 80,589,565.84 | ||||
(2) Goodwill impairment provision
In RMB
| Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Provision | Disposal | |||||
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 20,015,733.28 | 20,015,733.28 | ||||
| Total | 20,015,733.28 | 20,015,733.28 | ||||
17. Long-term deferred expenses
In RMB
| Item | Beginning balance | Increased amount in the current period | Amount of amortization in the current period | Other decreases | Ending balance |
| Office decoration expenses | 4,975,535.19 | 943,396.23 | 1,764,259.99 | 4,154,671.43 | |
| Service fee | 568,331.27 | 422,287.67 | 181,450.61 | 809,168.33 | |
| Brand endorsement cost | 184,204.48 | 78,449.44 | 105,755.04 | ||
| Consulting fee | 78,916.67 | 11,567.53 | 32,711.45 | 57,772.75 | |
| Environmental protection costs | 45,912.29 | 22,767.62 | 23,144.67 |
| Total | 5,852,899.90 | 1,377,251.43 | 2,079,639.11 | 5,150,512.22 |
18. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Credit impairment provision | 1,117,119,566.34 | 174,412,881.20 | 1,140,080,421.22 | 177,937,345.82 |
| Deferred income tax assets before offset recognized based on the provisional estimated expenses | 1,039,899,206.63 | 155,984,881.00 | 775,373,813.20 | 116,306,071.98 |
| Changes in the fair value of other equity instrument investments | 117,832,510.78 | 17,674,876.62 | 117,832,510.80 | 17,674,876.62 |
| Deferred income tax assets before offset recognized based on the deferred income | 82,961,858.88 | 12,444,278.83 | 86,923,728.33 | 13,038,559.25 |
| Asset impairment provision | 79,826,380.45 | 11,973,957.07 | 75,904,924.33 | 11,385,738.65 |
| Unrealized profits of internal transactions | 4,303,976.68 | 1,075,994.17 | 9,265,235.74 | 2,316,308.94 |
| Deferred income tax assets before offset recognized due to equity incentive | 11,327,867.57 | 1,743,813.08 | 7,950,207.60 | 1,239,475.54 |
| Unrecognized financial expenses | 1,334,524.36 | 333,631.09 | 3,651,876.63 | 912,969.16 |
| Total | 2,454,605,891.69 | 375,644,313.06 | 2,216,982,717.85 | 340,811,345.96 |
(2) Deferred income tax liabilities before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Asset appraisal appreciation arising from business combination where the acquired company is not controlled by the same party after the combination | 19,530,747.80 | 2,929,612.17 | 21,533,616.61 | 3,230,042.49 |
| Temporary taxable difference incurred from pre-tax deduction of fixed assets | 123,729,002.53 | 18,559,350.38 | 125,852,613.90 | 18,877,892.09 |
| Total | 143,259,750.33 | 21,488,962.55 | 147,386,230.51 | 22,107,934.58 |
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
| Item | Amount of deferred income tax assets offset against deferred income tax liabilities at the end of the period | Ending balance of deferred income tax assets or liabilities after offset | Initial amount of deferred income tax assets offset against deferred income tax liabilities | Beginning balance of deferred income tax assets or liabilities after offset |
| Deferred income tax assets | 375,644,313.06 | 340,811,345.96 | ||
| Deferred income tax liabilities | 21,488,962.55 | 22,107,934.58 |
(4) Presentation of unrecognized deferred income tax assets
In RMB
| Item | Ending balance | Beginning balance |
| Deductible tax losses | 62,061,288.62 | 44,298,409.84 |
| Total | 62,061,288.62 | 44,298,409.84 |
(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years
In RMB
| Year | Ending amount | Beginning amount | Remarks |
| 2023 | 6,714.34 | 6,714.34 | |
| 2024 | 5,602.28 | 5,602.28 | |
| 2025 | 9,556,499.12 | 9,556,499.12 | |
| 2026 | 10,380,561.57 | 10,380,561.57 | |
| 2027 | 24,349,032.53 | 24,349,032.53 | |
| 2028 | 17,762,878.78 | ||
| Total | 62,061,288.62 | 44,298,409.84 |
19 Other non-current assets
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment | Book value | Book balance | Impairment | Book value | |
| provision | provision | |||||
| Prepayments for equipment purchase | 2,123,363.72 | 2,123,363.72 | 4,082,671.76 | 4,082,671.76 | ||
| Engineering mortgage housing*1 | 59,751,206.40 | 12,872,011.37 | 46,879,195.03 | 48,666,572.69 | 3,315,747.32 | 45,350,825.37 |
| Total | 61,874,570.12 | 12,872,011.37 | 49,002,558.75 | 52,749,244.45 | 3,315,747.32 | 49,433,497.13 |
Other description:
*1. It refers to the engineering mortgage housing and parking space that the Company has signed a debtrestructuring agreement at the end of the period and completed the procedures for purchasing houses throughonline signing, with a total value of RMB 59,751,200 and a provision for impairment of RMB 12,872,000 Pleaserefer to the relevant description in 2. The Company's debt restructuring matters of Section XV Other ImportantMatters of this report.
20.Short-term borrowings
(I)Short-term borrowing classification
In RMB
| Item | Ending balance | Beginning balance |
| Credit borrowings*1 | 62,650,000,00 | 51,150,000,00 |
| Mortgaged borrowings*2 | 13,500,000,00 | |
| Accounts receivable factoring | 6,715,891,92 | 573,429,99 |
| Total | 82,865,891,92 | 51,723,429,99 |
Description on the classification of short-term borrowings:
*1: Shengzhou Kinde, a subsidiary of the Company, has obtained a working capital credit loan fromShaoxing Shengzhou Branch of Bank of Communications and Shaoxing Shengzhou Branch of China ConstructionBank. The loan has a term of 1 year and an interest rate range of 3.40% - 3.70%.
*2: Shengzhou Kinde, a subsidiary of the Company, has mortgaged a portion of its new factory building toShaoxing Shengzhou Guangtong Branch of Bank of Communications for a working capital loan. The loan has aterm of 1 year and an interest rate of 3.35%.
21. Notes payable
In RMB
| Type | Ending balance | Beginning balance |
| Banker’s acceptance | 795,406,054.79 | 872,550,306.86 |
| Total | 795,406,054.79 | 872,550,306.86 |
22. Accounts payable
(1) Presentation of accounts payable
In RMB
| Item | Ending balance | Beginning balance |
| Payment for materials | 1,059,832,651.57 | 1,179,804,339.04 |
| Payment for expenses | 1,217,692,019.85 | 1,004,448,565.06 |
| Payment for construction | 194,896,770.92 | 202,679,315.68 |
| Payment for equipment | 27,872,418.40 | 31,822,947.53 |
| Total | 2,500,293,860.74 | 2,418,755,167.31 |
Note: As of June 30, 2023, the balance of important accounts payable with an age of more than one yeartotaled RMB 54,451,132.43, mainly involving the unsettled project payments and expenses.
23. Contract liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Advances on sales | 941,928,841.93 | 959,915,567.03 |
| Total | 941,928,841.93 | 959,915,567.03 |
24. Employee compensation payable
(1) Presentation of employee compensation payable
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| I. Short-term remuneration | 150,070,271.37 | 417,416,219.82 | 500,581,551.15 | 66,904,940.04 |
| II. Post-employment benefits-defined contribution plan | 3,696,456.80 | 31,866,055.19 | 33,632,928.80 | 1,929,583.19 |
| III. Termination benefits | 175,601.71 | 572,112.46 | 516,783.29 | 230,930.88 |
| Total | 153,942,329.88 | 449,854,387.47 | 534,731,263.24 | 69,065,454.11 |
(2) Presentation of short-term employee compensation
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Salaries, bonuses, subsidies and allowances | 144,681,781.61 | 357,827,466.15 | 439,929,384.28 | 62,579,863.48 |
| 2. Employee welfare | 12,582,379.11 | 12,582,379.11 | ||
| 3. Social insurance | 4,319,168.44 | 21,129,684.11 | 24,244,215.05 | 1,204,637.50 |
| Including: medical | 4,212,988.20 | 20,091,043.23 | 23,144,243.38 | 1,159,788.05 |
| insurance | ||||
| Work-related injury insurance | 106,180.24 | 1,038,640.88 | 1,099,971.67 | 44,849.45 |
| 4. Housing funds | 664,905.00 | 18,782,832.78 | 19,170,734.78 | 277,003.00 |
| 5. Labor union and staff education expenses | 404,416.32 | 7,093,857.67 | 4,654,837.93 | 2,843,436.06 |
| Total | 150,070,271.37 | 417,416,219.82 | 500,581,551.15 | 66,904,940.04 |
(3) Presentation of the defined contribution plans
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Basic pensions | 3,571,259.19 | 30,813,899.92 | 32,515,092.45 | 1,870,066.66 |
| 2. Unemployment insurance | 125,197.61 | 1,052,155.27 | 1,117,836.35 | 59,516.53 |
| Total | 3,696,456.80 | 31,866,055.19 | 33,632,928.80 | 1,929,583.19 |
25. Taxes payable
In RMB
| Item | Ending balance | Beginning balance |
| Corporate income tax | 120,316,589.51 | 70,376,526.39 |
| VAT | 88,178,502.55 | 56,957,133.24 |
| House tax | 10,992.77 | 10,345,173.49 |
| Land use tax | 4,382,947.50 | |
| City maintenance and construction tax | 6,212,384.11 | 3,805,759.15 |
| Individual income tax | 2,128,408.21 | 2,226,988.94 |
| Education surcharge | 2,662,450.29 | 1,631,039.59 |
| Stamp tax | 215,273.42 | 1,538,692.42 |
| Local education surcharge | 1,774,966.96 | 1,087,359.86 |
| Total | 221,499,567.82 | 152,351,620.58 |
26. Other amounts payable
In RMB
| Item | Ending balance | Beginning balance |
| Other payables | 281,333,439.52 | 281,878,208.25 |
| Total | 281,333,439.52 | 281,878,208.25 |
(1) Other amounts payable presented by nature
In RMB
| Item | Ending balance | Beginning balance |
| Security deposits payable | 268,251,005.52 | 265,582,978.77 |
| Collections by a third party | 3,509,947.18 | 7,285,543.45 |
| Guarantee deposits payable | 5,425,488.88 | 6,122,832.30 |
| Others | 4,146,997.94 | 2,886,853.73 |
| Total | 281,333,439.52 | 281,878,208.25 |
Note: As of June 30, 2023, the important other accounts payable with an age of more than one year totaledRMB 246,327,416.93, mainly involving the sales deposits.
27. Non-current liabilities due within one year
In RMB
| Item | Ending balance | Beginning balance |
| Lease liabilities due within one year | 3,970,613.16 | 5,720,175.21 |
| Total | 3,970,613.16 | 5,720,175.21 |
28. Other current liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Output VAT to be carried forward | 112,459,867.60 | 120,126,501.73 |
| Total | 112,459,867.60 | 120,126,501.73 |
29. Lease liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Lease payment amount | 20,814,370.46 | 28,173,738.18 |
| Unrecognized financial expenses | -2,728,137.86 | -3,864,596.28 |
| Non-current liabilities due within one year after reclassification | -3,970,613.16 | -5,720,175.23 |
| Total | 14,115,619.44 | 18,588,966.67 |
30. Deferred income
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
| Government grants | 123,912,110.43 | 4,900,000.00 | 9,823,767.55 | 118,988,342.88 | |
| Total | 123,912,110.43 | 4,900,000.00 | 9,823,767.55 | 118,988,342.88 |
Items with government grants:
In RMB
| Liability item | Beginning balance | Added subsidy amount in the current period | Amount included in non-operating income in the current period | Amount included in other income in the current period | Amount of cost deduction in current period | Other changes | Ending balance | Related to assets/incomes |
| Subsidies for factory buildings, infrastructure construction, equipment, etc. in new Chengnan District | 36,988,382.11 | 961,898.11 | 36,026,484.00 | Related to assets | ||||
| Funds for intelligent manufacturing, integrated standard and new model application program | 29,705,342.50 | 4,269,752.82 | 25,435,589.68 | Related to assets | ||||
| Construction of production line with an annual output of 2.25 million sets of kitchen appliances | 19,757,289.36 | 1,288,947.10 | 18,468,342.26 | Related to assets | ||||
| Intelligent unmanned factory project based on 5G and cloud technology | 15,669,066.25 | 1,039,424.10 | 14,629,642.15 | Related to assets | ||||
| Technological upgrading for manufacturing enterprises | 8,300,000.00 | 4,900,000.00 | 711,713.40 | 12,488,286.60 | Related to assets | |||
| Construction project of kitchen appliance R&D, design and testing center | 5,769,425.16 | 712,343.86 | 5,057,081.30 | Related to assets | ||||
| Construction of production line with an annual output of 1.08 million sets of built-in kitchen appliances | 3,569,352.75 | 341,245.58 | 3,228,107.17 | Related to assets | ||||
| Technological | 1,842,576.75 | 181,798.36 | 1,660,778.39 | Related to |
| upgrading project with an annual output of 500,000 | assets | |||||||
| Robam Future Factory Project | 1,118,255.66 | 87,829.56 | 1,030,426.10 | Related to assets | ||||
| Construction of digital intelligent workshop for smart home appliances | 375,935.50 | 56,521.62 | 319,413.88 | Related to assets | ||||
| Development of new generation of environmentally-friendly energy-saving kitchen appliances and their production line | 340,374.47 | 95,325.46 | 245,049.01 | Related to assets | ||||
| Recycling-centered renewal project | 268,856.49 | 45,794.94 | 223,061.55 | Related to assets | ||||
| Academician & expert work station | 166,251.24 | 21,860.04 | 144,391.20 | Related to assets | ||||
| Kitchen appliance R&D, design and testing center | 27,322.00 | 3,812.40 | 23,509.60 | Related to assets | ||||
| Construction of the digital workshop with an annual output of 2.25 million sets of kitchen appliances | 13,680.19 | 5,500.20 | 8,179.99 | Related to assets |
31. Capital stock
In RMB
| Beginning balance | Increase and decrease of this change (+, -) | Ending balance | |||||
| Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | |||
| Total number of shares | 949,024,050.00 | 949,024,050.00 | |||||
32. Capital reserve
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Capital (stock) premium | 401,799,332.67 | 401,799,332.67 | ||
| Other capital reserves | 8,198,332.91 | 3,473,641.59 | 11,671,974.50 | |
| Total | 409,997,665.58 | 3,473,641.59 | 413,471,307.17 |
33. Treasury shares
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Share repurchase | 199,995,742.59 | 199,995,742.59 | ||
| Total | 199,995,742.59 | 199,995,742.59 |
34. Other comprehensive incomes
In RMB
| Item | Beginning balance | Amount of the current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Less: amount included in other comprehensive incomes previously and then transferred into the current profit or loss | Less: amount included in other comprehensive incomes previously and then transferred into current retained earnings | Less: income tax expenses | Amount after tax attributable to the parent company | Amount after tax attributable to minority shareholders | |||
| I. Other comprehensive incomes that cannot be reclassified into profit or loss | -100,157,634.16 | -100,157,634.16 | ||||||
| Changes in the fair value of other equity instrument investments | -100,157,634.16 | -100,157,634.16 | ||||||
| Total other comprehensive incomes | -100,157,634.16 | -100,157,634.16 | ||||||
35. Surplus reserve
In RMB
| Item | Beginning balance | Increase in the current | Decrease in the | Ending balance |
| period | current period | |||
| Statutory surplus reserve | 474,516,412.50 | 474,516,412.50 | ||
| Total | 474,516,412.50 | 474,516,412.50 |
36. Undistributed profit
In RMB
| Item | Current period | Previous period |
| Undistributed profit at the end of previous period before adjustment | 8,199,079,015.58 | 7,098,721,555.37 |
| Undistributed profit at the beginning of the period after adjustment | 8,199,079,015.58 | 7,098,721,555.37 |
| Add: Net profits attributable to owners of the parent company in the current period | 829,718,350.69 | 1,572,404,918.21 |
| Ordinary share dividend transferred to capital stock | 472,047,458.00 | 472,047,458.00 |
| Undistributed profit at the end of the period | 8,556,749,908.27 | 8,199,079,015.58 |
37. Operating income and operating cost
In RMB
| Item | Amount of the current period | Amount of the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,793,316,106.76 | 2,305,082,060.11 | 4,317,490,105.88 | 2,205,131,842.03 |
| Other businesses | 141,553,693.39 | 67,013,911.39 | 126,819,993.81 | 34,888,040.50 |
| Total | 4,934,869,800.15 | 2,372,095,971.50 | 4,444,310,099.69 | 2,240,019,882.53 |
38. Taxes and surcharges
In RMB
| Item | Amount of the current period | Amount of the previous period |
| City maintenance and construction tax | 19,865,052.45 | 15,541,302.70 |
| Education surcharge | 14,189,320.42 | 11,100,930.49 |
| House tax | 1,211,155.82 | 309,227.61 |
| Stamp tax | 1,306,922.24 | 1,176,949.93 |
| Vehicle and vessel usage tax | 5,139.84 | 9,939.84 |
| Land use tax | -4,374,871.70 | -4,382,947.50 |
| Others | 5,252.13 | 4,621.17 |
| Total | 32,207,971.20 | 23,760,024.24 |
39. Sales expense
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Marketing service expenses | 650,120,122.89 | 631,391,446.17 |
| Advertisement expenses | 356,749,434.59 | 259,175,406.07 |
| Employee compensation | 166,363,948.22 | 139,790,625.89 |
| Booth decoration expenses | 60,230,248.91 | 59,578,022.62 |
| Promotional activity expenses | 33,830,183.32 | 18,422,096.45 |
| Material consumption | 38,389,111.98 | 33,049,395.80 |
| Travel expenses | 11,697,748.47 | 6,801,054.02 |
| Intermediary service fees | 10,695,310.63 | 7,477,610.64 |
| Rental fees | 7,933,192.97 | 8,555,672.36 |
| Business hospitality cost | 9,309,526.51 | 7,472,828.11 |
| Office expenses | 7,850,063.78 | 4,560,789.33 |
| Others | 7,652,481.14 | 8,429,642.06 |
| Total | 1,360,821,373.41 | 1,184,704,589.52 |
40. Administrative expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Employee remuneration | 109,523,028.03 | 91,121,750.84 |
| Depreciation and amortization | 31,430,035.98 | 25,271,929.68 |
| Consulting service fees | 13,684,786.20 | 12,229,974.53 |
| Maintenance expenses | 2,281,377.24 | 10,083,182.01 |
| Office expenses | 6,714,440.34 | 6,639,136.07 |
| Rental and property fees | 4,762,887.30 | 5,712,938.91 |
| Business hospitality cost | 4,660,750.07 | 4,374,301.07 |
| Travel expenses | 4,142,395.01 | 3,083,013.05 |
| Communication expense | 3,460,975.01 | 2,918,739.13 |
| Costs of equity incentive | 3,473,641.59 | 3,998,366.27 |
| Travel expenses | 2,465,253.34 | 2,285,073.79 |
| Material consumption | 4,742,269.13 | 4,431,994.70 |
| Others | 12,083,977.01 | 11,433,464.52 |
| Total | 203,425,816.25 | 183,583,864.57 |
41. R&D expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Employee remuneration | 88,567,764.03 | 78,436,915.06 |
| Direct input | 65,160,510.13 | 73,217,115.42 |
| Depreciation and amortization | 7,419,085.38 | 7,636,633.77 |
| Design fees | 2,146,030.75 | 2,899,636.01 |
| Other expenses | 9,440,750.86 | 7,178,345.27 |
| Total | 172,734,141.15 | 169,368,645.53 |
42. Financial expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Interest expenses | 2,707,272.10 | 1,018,439.59 |
| Less: Interest income | 69,274,034.42 | 60,042,815.83 |
| Add: foreign exchange gain/loss | -3,213,064.29 | -3,940,324.55 |
| Add: other expenses | 820,841.52 | 689,241.88 |
| Total | -68,958,985.09 | -62,275,458.91 |
43. Other incomes
In RMB
| Sources generating other incomes | Amount of the current period | Amount of the previous period |
| Financial support fund to boost the corporate development | 44,730,000.00 | 49,775,390.00 |
| Amortization of deferred income | 9,823,767.55 | 8,354,145.46 |
| Embedded software tax refund | 9,453,997.74 | 23,286,694.84 |
| Special funds for industrial development | 3,289,700.00 | 9,608,719.00 |
| VAT exemption or reduction | 922,350.00 | 10,643.41 |
| Post allowance and social insurance allowance | 723,791.56 | 1,372,323.40 |
| Handling fee refund | 684,354.91 | 482,308.94 |
| R&D input grants | 382,847.00 | |
| Patent awards | 1,175,521.65 | |
| Other grants | 648,750.00 | 5,000.00 |
| Total | 70,659,558.76 | 94,070,746.70 |
44. Investment income
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from long-term equity investments accounted for using the equity method | -1,263,184.05 | -2,947,887.32 |
| Investment income during holding of financial assets for trading | 22,986,802.86 | 22,116,828.43 |
| Total | 21,723,618.81 | 19,168,941.11 |
45. Loss from credit impairment
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Bad debt losses on notes receivable | 14,373,972.06 | 163,813,946.01 |
| Bad debt losses from accounts receivable | 11,131,980.38 | -158,819,085.15 |
| Bad debt losses of other receivables | -2,215,366.04 | 4,029,453.07 |
| Total | 23,290,586.40 | 9,024,313.93 |
46. Loss from asset impairment
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Loss from obsolete inventory and from impairment of the cost of contract performance | 5,634,807.91 | 24,056,013.60 |
| Loss from non-current asset impairment | -9,556,264.05 | |
| Total | -3,921,456.14 | 24,056,013.60 |
47. Asset disposal income
In RMB
| Sources of asset disposal income | Amount of the current period | Amount of the previous period |
| Non-current asset disposal income | -711,723.90 | 37,838.75 |
| Including: income from disposal of fixed assets | -711,723.90 | 37,838.75 |
| Right-of-use asset disposal income | 135,005.49 |
48. Non-operating revenue
In RMB
| Item | Amount of the current period | Amount of the previous period | Amount included in the current non-recurring profit or loss |
| Liquidated damages and fines | 13,200.00 | ||
| Non-current asset scrapping income | 410.00 | 410.00 | |
| Others | 2,803,549.50 | 2,682,807.72 | 2,803,549.50 |
| Total | 2,803,959.50 | 2,696,007.72 | 2,803,959.50 |
49. Non-operating expenditures
In RMB
| Item | Amount of the current period | Amount of the previous period | Amount included in the current non-recurring profit or loss |
| External donations | 1,120,457.50 | 1,000,077.70 | 1,120,457.50 |
| Amercement outlay | 14,450.00 | 56,677.00 | 14,450.00 |
| Losses from non-current asset damage or retirement | 673.95 | 72,018.47 | 673.95 |
| Others | 314,293.04 | 429,381.96 | 314,293.04 |
| Total | 1,449,874.49 | 1,558,155.13 | 1,449,874.49 |
50. Income tax expenses
(1) Presentation of income tax expenses
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Current income tax expenses | 187,282,866.64 | 183,792,350.28 |
| Deferred income tax expenses | -35,451,939.13 | -52,619,931.42 |
| Total | 151,830,927.51 | 131,172,418.86 |
(2) Adjustment of accounting profit and income tax expense
In RMB
| Item | Amount of the current period |
| Total profit | 975,073,186.16 |
| Income tax expense calculated based on statutory/applicable tax rate | 146,260,977.93 |
| Effects of the subsidiaries’ application of different tax rates | -820,020.02 |
| Effects of the adjustment of income tax in previous period | 25,904.18 |
| Effects of the non-deductible costs, expenses and losses | 1,548,109.31 |
| Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 4,626,478.50 |
| Profit and loss of joint ventures and associated companies accounted for by equity method | 189,477.61 |
| Income tax expense | 151,830,927.51 |
51. Cash flow statement items
(1) Other cash received in relation to operating activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Interest revenue on deposits | 69,274,034.42 | 60,042,815.83 |
| Government grants | 56,322,854.76 | 63,679,906.40 |
| Guarantee and security deposits | 14,303,618.62 | 14,850,829.06 |
| Letter of credit and acceptance bill margin | 9,984,355.85 | 30,104,468.61 |
| Revenue collected and payment made on behalf of other agencies | 5,493,388.35 | 5,123,692.97 |
| Cash reserve | 1,343,606.65 | 1,233,346.31 |
| Other payments | 6,266,385.36 | 2,891,773.89 |
| Total | 162,988,244.01 | 177,926,833.07 |
(2) Other cash paid related to operating activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Period expenses | 1,243,206,922.01 | 1,141,993,734.77 |
| Letter of credit and acceptance bill margin | 21,285,415.74 | 21,530,136.56 |
| Revenue collected and payment made on behalf of other agencies | 10,398,113.72 | 9,787,117.46 |
| Guarantee and security deposits | 8,133,397.66 | 13,629,302.87 |
| Cash reserve | 4,097,943.96 | 8,383,255.70 |
| Others | 1,336,189.77 | 5,565,795.10 |
| Total | 1,288,457,982.86 | 1,200,889,342.46 |
(3) Other cash received in relation to financing activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from accounts receivable factoring | 6,482,178.88 | 1,012,732.06 |
| Total | 6,482,178.88 | 1,012,732.06 |
(4) Other cash paid in relation to financing activities
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Attached refund of recourse factoring | 3,516,183.32 | |
| Rental | 3,212,200.53 | 3,020,626.80 |
| Total | 3,212,200.53 | 6,536,810.12 |
52. Supplementary information of Cash Flow Statement
(1) Supplementary information of Cash Flow Statement
In RMB
| Supplementary information | Current amount | Amount of the previous period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 823,242,258.65 | 721,471,840.03 |
| Add: Asset impairment provision | 3,921,456.14 | -24,056,013.60 |
| Loss from credit impairment | -23,290,586.40 | -9,024,313.93 |
| Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets | 76,275,036.48 | 60,134,937.59 |
| Depreciation of right-of-use assets | 2,662,033.50 | 2,735,187.20 |
| Amortization of intangible assets | 6,770,682.50 | 6,787,723.52 |
| Amortization of long-term deferred expenses | 2,079,639.11 | 2,454,162.19 |
| Losses arising from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") | 576,718.41 | -37,838.75 |
| Losses on disposal of fixed assets (gains indicated with "-") | 673.95 | 72,018.47 |
| Losses from fair value change (gains expressed with “-”) | ||
| Financial expenses (profit shall be indicated with"-") | -1,152,076.14 | -2,921,884.96 |
| Investment losses (gains expressed with “-”) | -21,723,618.81 | -19,168,941.11 |
| Decrease in deferred income tax assets (increase shall be indicated with “-”) | -34,832,967.10 | -54,426,406.39 |
| Increase in deferred income tax liabilities (decrease shall be indicated with “-”) | -618,972.03 | 1,806,474.98 |
| Decrease in inventories (increase shall be indicated with “-”) | 83,112,866.12 | -28,800,735.18 |
| Decrease in operating receivables (increase shall be indicated with “-”) | 80,656,601.27 | -137,525,667.47 |
| Increase in operating payables (decrease expressed with "-") | -37,946,892.42 | -196,645,420.26 |
| Net cash flow from operating activities | 959,732,853.23 | 322,855,122.33 |
| 2. Non-cash flow-involved major investing and financing activities: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under financing leases | ||
| 3． Net increase/decrease in cash and cash equivalents: | ||
| Ending balance of cash | 5,777,869,909.08 | 3,327,149,844.76 |
| Less: cash beginning balance | 5,196,414,341.74 | 3,719,988,820.35 |
| Add: ending balance of cash equivalents | ||
| Less: cash equivalents at the beginning of the period | ||
| Net increase in cash and cash equivalents | 581,455,567.34 | -392,838,975.59 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Ending balance | Beginning balance |
| I.Cash | 5,777,869,909.08 | 5,196,414,341.74 |
| Including: cash on hand | 182,584.13 | 85,806.05 |
| deposits available for payment at any time | 5,776,710,554.59 | 5,194,874,841.18 |
| Other cash and cash equivalents available for payment at any time | 976,770.36 | 1,453,694.51 |
| III.Balance of cash and cash equivalents at the end of the period | 5,777,869,909.08 | 5,196,414,341.74 |
53. Assets with limited ownership or right to use
In RMB
| Item | Ending book value | Reasons for limit |
| Cash and cash equivalents | 100,908,470.98 | Letters of guarantee and bill acceptance margin |
| Cash and cash equivalents | 13,000.00 | ETC margin |
| Investment real estate | 6,120,022.18 | Collateral for bank loans |
| Fixed assets | 95,880,347.37 | Collateral for bank loans |
| Total | 202,921,840.53 |
54. Foreign currency monetary item
(1) Foreign currency monetary item
In RMB
| Item | Ending balance in foreign currency | Exchange rate for conversion | Ending balance in RMB |
| Cash and cash equivalents | |||
| Including: USD | 9,596,961.05 | 7.2258 | 69,345,721.16 |
| Euro | 11.92 | 7.8775 | 93.90 |
| Australian Dollar | 858.77 | 4.7992 | 4,121.41 |
| Accounts receivable | |||
| Including: USD | 3,338,013.85 | 7.2258 | 24,119,820.48 |
| AUD | 30.00 | 4.7992 | 143.98 |
| Accounts received in advance | |||
| Including: US Dollar | 493,687.67 | 7.2258 | 3,567,288.37 |
| Australian dollar | 179,904.81 | 4.7992 | 863,399.16 |
55. Government grants
(1) Basic information of government grants
In RMB
| Type | Amount | Items | Amounts included in current profits and losses |
| Financial support fund to boost the corporate development | 44,730,000.00 | Other income | 44,730,000.00 |
| Embedded software tax refund | 9,453,997.74 | Other income | 9,453,997.74 |
| Technological upgrading for manufacturing enterprises | 4,900,000.00 | Deferred income | |
| Special funds for industrial development | 3,289,700.00 | Other income | 3,289,700.00 |
| VAT exemption or reduction | 922,350.00 | Other income | 922,350.00 |
| Post allowance and social insurance allowance | 723,791.56 | Other income | 723,791.56 |
| Refund of individual income tax handling fee | 684,354.91 | Other income | 684,354.91 |
| R&D input grants | 382,847.00 | Other income | 382,847.00 |
| Other grants | 648,750.00 | Other income | 648,750.00 |
VIII. Changes in the scope of consolidated financial statements
1. Changes in the scope of consolidated financial statements due to other reasonsExplanation on changes in the scope of consolidated financial statements due to other reasons (such as the establishment orliquidation of subsidiary companies, etc.) and relevant circumstances:
On May 29, 2023, the Company invested in and established Robam Appliances Holding (HK) Co., Ltd., with a registeredcapital of USD 500,000 and a shareholding ratio of 100%, which mainly operates investment business in Hong Kong. On June7, 2023, Robam Appliances Holding (HK) Co., Ltd. invested in and established Robam International (HK) Trading Co., Ltd.,with a registered capital of USD 500,000 and a shareholding ratio of 100%, which mainly operates the sales of kitchenappliances in overseas markets. Currently, both companies have completed the registration with the Hong Kong government,but the registered capital has not been in place and they have not been put into operation.IX. Interests in Other Entities
1. Equity in subsidiaries
(1) Composition of the Robam Group
| Subsidiary | Principal place of business | Registration place | Nature of business | Shareholding ratio | Acquisition method | |
| Direct | Indirect | |||||
| Beijing Robam Appliances Sales Co., Ltd. | Beijing | Beijing | Sales of kitchen appliances | 100.00% | Businesses combination under common control | |
| Shanghai Robam Appliances Sales Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 100.00% | Businesses combination under common control | |
| Hangzhou MingQi Electric Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Acquired through investment | |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | Shengzhou | Shengzhou | Production and sales of kitchen appliances | 51.00% | Business combination not under common control | |
| Hangzhou Robam Fuchuang | Hangzhou | Hangzhou | Asset, investment management, | 100.00% | Acquisition upon its establishment | |
| Investment Management Co., Ltd. | etc. | |||||
| Zhejiang Cookingfuture Technology Co., Ltd. | Shengzhou | Shengzhou | Smart kitchen design | 32.13% | Acquisition upon its establishment | |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| Robam International (HK) Trading Co., Ltd. | Hong Kong | Hong Kong | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| Robam Appliances Holding (HK) Co., Ltd. | Hong Kong | Hong Kong | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment |
Explanation on the shareholding ratio in subsidiaries that differs from the voting right ratio in subsidiaries:
Note: The Company holds 50% or less voting rights in Zhejiang Cookingfuture Technology Co., Ltd., but still maintainscontrol over it. This is based on the fact that the Company has a controlling relationship with Shengzhou Kinde, so theCompany has a controlling relationship with its holding subsidiary Zhejiang Cookingfuture Technology Co., Ltd.
(2) Major non-wholly owned subsidiaries
In RMB
| Subsidiary | Proportion of shares held by minority shareholders | Gains/losses attributable to minority shareholders in the current period | Dividend declared and distributed to minority shareholders in the current period | Ending balance of minority equity |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 49.00% | -4,243,411.45 | 114,049,873.06 | |
| Zhejiang Cookingfuture Technology Co., Ltd. | 37.00% | -2,232,758.49 | 8,596,471.29 |
(3) Main financial information of important partially-owned subsidiaries
In RMB
| Subsidiary | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Shengzhou Kinde | 120,294,987.90 | 353,312,096.86 | 473,607,084.76 | 188,128,143.55 | 44,127,626.95 | 232,255,770.50 | 152,256,797.00 | 348,855,702.41 | 501,112,499.41 | 203,576,227.80 | 45,292,175.50 | 248,868,403.30 |
| Intelligent Kitchen Appliances Co., Ltd. | ||||||||||||
| Zhejiang Cookingfuture Technology Co., Ltd. | 18,369,746.77 | 8,339,535.88 | 26,709,282.65 | 3,475,576.46 | 3,475,576.46 | 25,723,850.48 | 6,669,996.33 | 32,393,846.81 | 3,125,658.21 | 3,125,658.21 |
In RMB
| Subsidiary | Amount incurred in the current period | Amount of the previous period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 67,284,556.69 | -10,892,781.85 | -10,892,781.85 | -37,399,921.57 | 77,502,270.79 | -2,848,019.82 | -2,848,019.82 | -21,169,064.76 |
| Zhejiang Cookingfuture Technology Co., Ltd. | 1,510,766.45 | -6,034,482.41 | -6,034,482.41 | -8,517,161.83 | 593,200.02 | -3,614,071.30 | -3,614,071.30 | -10,664,349.92 |
3. Equity in joint ventures or associates
(1) Important joint ventures or associates
| Name of joint ventures or associates | Principal place of business | Registration place | Nature of business | Shareholding ratio | Accounting treatment for investment in joint ventures or associates | |
| Direct | Indirect | |||||
| De Dietrich Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Equity method | |
| Zhejiang Tingshuo Brand Operation Management | Hangzhou | Hangzhou | Retail | 40.00% | Equity method | |
| Co., Ltd. | ||||||
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Shaoxing | Shaoxing | Kitchen appliance manufacturing | 40.00% | Equity method |
(2) Summary of the financial information of minor joint ventures and associates
In RMB
| Ending balance/amount incurred in current period | Beginning balance/amount of the previous period | |
| Joint venture: | ||
| Total book value of investment | 3,272,876.08 | 3,824,460.03 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -551,583.95 | 162,760.00 |
| -Total comprehensive income | -551,583.95 | 162,760.00 |
| Associated company: | ||
| Total book value of investment | 4,182,445.49 | 4,894,045.59 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -711,600.10 | -989,384.29 |
| -Total comprehensive income | -711,600.10 | -989,384.29 |
X. Risks Related to Financial Instruments
Major financial instruments of the Company include accounts receivable, accounts payable, etc. See Note fordetailed description of these financial instruments. Risks related to these financial instruments and riskmanagement policies adopted by the Company to reduce such risks are outlined as follows. The management ofthe Company manages and monitors such risk exposures to ensure to keep the risks above within limited scope.
1. ． The Company’s various risk management objectives and policies are outlined as follows:
Risk management conducted by the Company is to properly balance risk and income, minimize negativeimpacts of the risks on the Company’s business performance and maximize benefits of the shareholders and otherequity investors. Based on the risk management objective, the Company’s basic risk management policy is todetermine and analyze all kinds of risks faced by the Company, establish appropriate risk bottom line for riskmanagement, and monitor all risks promptly and reliably to keep risks within a limited range.? Market risk price risk
Since the Company sells its products at market prices, it may be affected by such price fluctuations.
? Credit riskAs of Friday, June 30, 2023, the biggest credit risk exposure that may bring financial loss to the Companymainly comes from the Company’s financial assets loss caused by the other party’s failure to perform itsobligations in the contract, particularly including the loss in the book value of recognized financial assets in theconsolidated balance sheet.
To reduce credit risk, the Company has a dedicated team responsible for determining the credit line,conducting credit approval and implementing other monitoring procedures, to ensure that necessary measures aretaken to recover due debt. In addition, the Company reviews the recovery of each account payable on eachbalance sheet date, so as to ensure sufficient bad debt provisions for unrecoverable accounts. Therefore, themanagement of the Company holds that the credit risk faced by the Company has been significantly reduced.The credit risk of the Company’s liquid capital is low since it is deposited at banks with relatively highcredit rating.
Because the risk exposures of the Company are related to multiple contracting parties and multiple clients,the Company has no major credit risk concentration.
The Company adopts necessary policies to ensure all of the clients involved in the sales of our products havegood credit record. The Company has no major credit risk concentration.
Total amount of the top five accounts receivable: RMB 1,388,323,304.88.
Total amount of the top five other accounts receivable: RMB 65,690,667.35? Liquidity risk
Liquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due. TheCompany manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoidunacceptable losses or damages to corporate reputation. The Company management has closely examined theliquid assets of the Company and regularly analyzed the liability structure/term and bank lines and so on to endurefund sufficiency. It is concluded that the Company has sufficient funds to meet the demands of short-term loansand capital expenditure of the Company. Analysis of the financial assets and financial liabilities of the Companyas per maturity of the undiscounted contract obligations remained is made as follows:
Balance on June 30, 2023:
| Item | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial assets | |||||
| Cash and cash equivalents | 5,878,791,380.06 | 5,878,791,380.06 | |||
| Financial assets held for trading | 2,315,606,606.83 | 2,315,606,606.83 | |||
| Notes receivable | 697,840,910.95 | 697,840,910.95 |
| Accounts receivable | 1,781,653,759.34 | 1,781,653,759.34 | |||
| Other accounts receivable | 104,345,008.35 | 104,345,008.35 | |||
| Financial liabilities | |||||
| Short-term borrowings | 82,865,891.92 | 82,865,891.92 | |||
| Notes payables | 795,406,054.79 | 795,406,054.79 | |||
| Accounts payable | 2,500,293,860.74 | 2,500,293,860.74 | |||
| Other payables | 281,333,439.52 | 281,333,439.52 | |||
| Payroll payable | 69,065,454.11 | 69,065,454.11 | |||
| Other current liabilities | 112,459,867.60 | 112,459,867.60 | |||
| Non-current liabilities due within one year | 3,970,613.16 | 3,970,613.16 | |||
| Lease liabilities | 3,760,929.49 | 5,367,442.53 | 4,987,247.42 | 14,115,619.44 |
? Sensitivity analysis of foreign exchange risk
The exchange rate risk borne by the Company is mainly associated with US Dollar, Euro, Australian Dollar,etc. The foreign exchange risk borne by the Company is mainly associated with US Dollar (which shall bechanged according to relevant realities). The Company's main business activities are priced and settled inRenminbi. As of June 30, 2023, the Company’s balances of assets and liabilities are in RMB (except for thebalance of the assets and liabilities in foreign currency in “Foreign currency monetary item" in this Note).Exchange risk resulting from the assets and liabilities whose balances are in foreign currency may affect theCompany’s performance.The Company pays close attention to the impact of change in exchange rate on the Company’s exchange risk.Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk.XI. Disclosure of Fair Value
1. Ending fair value of assets and liabilities measured at fair value
In RMB
| Item | Ending fair value | |||
| Fair value measurement (Level 1) | Fair value measurement (Level 2) | Fair value measurement (Level 3) | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Financial assets held for trading | 2,315,606,606.83 | 2,315,606,606.83 | ||
| 1. Financial assets measured at fair value | 2,315,606,606.83 | 2,315,606,606.83 | ||
| with changes included in current profit or loss | ||||
| (1) Financial products | 2,315,606,606.83 | 2,315,606,606.83 | ||
| (III) Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 | ||
| Total assets measured continuously at fair value | 2,317,722,630.05 | 2,317,722,630.05 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Adjustment information between the beginning and ending book values and sensitivity analysis ofunobservable parameters for the items involved in Level 3 continuous fair value measurement
| Item | June 30, 2023 Fair value | Valuation techniques | Significant unobservable value | Relationship between unobservable value and fair value |
| financial products | 2,315,606,606.83 | Optimal fair value estimation | Investment cost | — |
| Investment in other equity instruments | 2,116,023.22 | Optimal fair value estimation | Investment cost | — |
Note: Due to the deteriorating operating environment, operating conditions and financial status of theinvested company, Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership), the Companymeasured its fair value at zero yuan as a reasonable estimate.
XII. Related Party and Related Party Transactions
1. The Company’s parent company
| Parent company | Registration place | Nature of business | Registered capital | Proportion of the voting right of the parent company | Proportion of Company's shares held by the parent company in the Company |
| Hangzhou Robam Industrial Group Co., Ltd. | Hangzhou, Zhejiang | Investment and industrial management | RMB 60 million | 49.68% | 49.68% |
2. The Company’s subsidiaries
See Note "Composition of the Robam Group" for more about the Company’s subsidiaries
3. Other related parties
| Name of other related parties | Relation between other related parties and the Company |
| Hangzhou Amblem Household Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Nbond Nonwovens Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Yaguang Spray Coating Factory | Other related parties |
| Hangzhou City Garden Hotel Co., Ltd. | Other related parties |
| Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Controlled by the same ultimate controlling party |
| Shaoxing Kinde Electric Appliances Co., Ltd. | Other related parties |
| Hangzhou Guoguang Touring Commodity Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Xiaozhijia Health Care Product Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Linping ROBAM Charity Foundation | Other related parties |
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Other related parties |
| Hangzhou Runqun Hardware Co., Ltd. | Other related parties |
4. Related transactions
(1) Related transactions regarding purchasing and selling goods and providing and accepting laborservicesTable of the purchasing of goods and receiving of labor services
In RMB
| Related parties | Description of the connected transactions | Amount of the current period | Trading limit approved | Whether exceeds the approved limited or not (Y/N) | Amount of the previous period |
| Hangzhou Amblem Household Co., Ltd. | Purchase of goods | 845,058.44 | 845,058.44 | No | 19,517,425.33 |
| Hangzhou Yuhang Yaguang Spray Coating Factory | Receiving of labor services | 805,737.85 | 805,737.85 | No | 3,910,128.45 |
| Hangzhou Xiaozhijia Health Care Product Co., Ltd. | Purchasing of goods | 1,046,680.73 | 1,046,680.73 | No | 1,767,541.39 |
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Purchase of goods | 439,198.72 | 439,198.72 | No | 376,177.00 |
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Purchase of goods | 429,770.25 | 429,770.25 | No | 485,747.10 |
| Zhejiang Tingshuo Brand Operation Management Co., Ltd. | Receiving of labor services | 0 | 0 | No | 200,000.00 |
| Hangzhou Guoguang Touring Commodity Co., | Purchase of goods | 13,954.34 | 13,954.34 | No | 85,584.42 |
| Ltd. | |||||
| Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Purchase of goods | 4,470.08 | 4,470.08 | No | 8,344.42 |
| Hangzhou Runqun Hardware Co., Ltd. | Receiving of labor services | 3,569,947.74 | 3,569,947.74 | No | 0 |
Table of goods sales/labor service provision
In RMB
| Related parties | Description of the connected transactions | Amount of the current period | Amount of the previous period |
| Hangzhou Amblem Household Co., Ltd. | Sale of goods | 1,629,834.52 | 2,332,591.12 |
| Hangzhou linping ROBAM Charity Foundation | Sale of goods | 1,001,649.72 | 696,446.84 |
| Hangzhou Nbond Nonwovens Co., Ltd. | Sale of goods | 16,429.20 | 10,746.90 |
(2) Related lease
The Company acts as the lessor:
In RMB
| Lessee | Type of leased asset | Rental income recognized in the current period | Lease income recognized in the previous period |
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 14,400.00 | 14,400.00 |
The Company acts as the Lessee:
In RMB
| Lessor | Type of leased asset | Rental expenses for simplified short-term leases and leases of low-value assets (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rental paid | Interest expense incurred on lease liabilities | Increased right-of-use assets | |||||
| Amount incurred in the current period | Amount of the previous period | Amount incurred in the current period | Amount of the previous period | Amount incurred in the current period | Amount of the previous period | Amount incurred in the current period | Amount of the previous period | Amount incurred in the current period | Amount of the previous period | ||
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 275,012.28 | 275,012.28 | ||||||||
6. Amounts receivable and payable of related parties
(1) Accounts receivable
In RMB
| Name of item | Related parties | Ending balance | Beginning balance | ||
| Book balance | Bad debt reserve | Book balance | Bad debt reserve | ||
| Accounts receivable | Hangzhou Amblem Household Co., Ltd. | 2,043,521.00 | 1,432,274.00 | ||
| Prepayments | Hangzhou Xiaozhijia Health Care Product Co., Ltd. | 3,769.89 | |||
| Accounts receivable | Hangzhou Nbond Nonwovens Co., Ltd. | 12,000.00 | |||
| Accounts receivable | Hangzhou linping ROBAM Charity Foundation | 966,744.00 | |||
(2) Accounts payable
In RMB
| Name of item | Related parties | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Accounts payable | Hangzhou Yuhang Robam Fuel Station Co., Ltd. | 3,033,735.55 | 2,548,095.18 |
| Accounts payable | Hangzhou Runqun Hardware Co., Ltd. | 2,984,762.46 | |
| Accounts payable | Hangzhou Amblem Household Co., Ltd. | 1,344,844.58 | 4,386,391.83 |
| Accounts payable | Hangzhou Xiaozhijia Health Care Product Co., Ltd. | 481,898.83 | |
| Accounts payable | Shaoxing Shuaige Kitchen & Bathroom Technology Co., Ltd. | 95,111.00 | 298,021.70 |
| Accounts payable | Hangzhou Yuhang Yaguang Spray Coating Factory | 3,043,849.87 | |
| Accounts payable | Hangzhou Guoguang Touring Commodity Co., Ltd. | 6,963.19 | |
| Other payables | Hangzhou Yuhang Yaguang Spray Coating Factory | 200,000.00 | 200,000.00 |
| Other payables | Hangzhou Amblem Household Co., Ltd. | 5,000.00 | |
| Other payables | Hangzhou Guoguang Touring Commodity Co., Ltd. | 2,000.00 | 2,000.00 |
XIII. Share Payment
1. Overview of share payment
?Applicable □Not applicable
In RMB
| Total amount of equity instruments granted by the Company in the current period | 5,520,000.00 |
| Total amount of equity instruments exercised by the Company in the current period | 0.00 |
| Total amount of invalid equity instruments of the Company in the current period | 2,554,000.00 |
| The range of exercise price and remaining contract term of the Company's outstanding stock options at the end of the period. | The exercise price of the 2021 Stock Option Incentive Plan is RMB 36.57/share, with a remaining term of 1-2 years; the exercise price of the 2022 Stock Option Incentive Plan is RMB 29.27/share, with a remaining term of 1-3 years; the exercise price of the 2023 Stock Option Incentive Plan is RMB 22.51/share, with a remaining term of 1-3 years. |
Other description
1) 2021 Stock Option Incentive Plan
In April 2021, the Company granted stock options to 138 middle-level managers and key technical (business) backbonepersonnel, with a total of 3.04 million shares and an exercise price of RMB 36.57 /share.In April 2022, due to the failure to meet the exercise conditions of the first exercise period of the stock options underthe Company's 2021 Stock Option Incentive Plan and the departure of 4 incentive targets who no longer meet the incentiveconditions, the Company cancelled 1.264 million stock options.In May 2023, due to the failure to meet the exercise conditions of the second exercise period of the stock options underthe Company's 2021 Stock Option Incentive Plan and the departure of 13 incentive targets who no longer meet the incentiveconditions, the Company cancelled 945,000 stock options.
2) 2022 Stock Option Incentive Plan
In April 2022, the Company granted stock options to 282 middle-level managers and key technical (business) backbonepersonnel, with a total of 4.78 million shares and an exercise price of RMB 29.27 /share.
In May 2023, due to the failure to meet the exercise conditions of the first exercise period of the stock options under theCompany's 2022 Stock Option Incentive Plan and the departure of 13 incentive targets who no longer meet the incentiveconditions, the Company cancelled 1,609,000 stock options.
3) 2023 Stock Option Incentive Plan
On April 25, 2023, the Company held the 14th meeting of the 5th Board of Directors, deliberating and adopting theProposal on 2023 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals. On May18, 2023, the Proposal was approved by the 2022 Annual Shareholders’ Meeting of the Company. On June 20, 2023, the stockoptions were actually granted, with a total of 325 incentive targets, 5.52 million options granted and an exercise price of RMB
22.57 /share.
2. Equity-settled share-based payment
?Applicable □Not applicable
In RMB
| Method for determining the fair value of equity instruments | The Company evaluates the fair value of stock options |
| on the grant date | using the internationally recognized Black-Scholes option pricing model. |
| basis for determining the number of vested equity instruments | Best estimate of the number of vested equity instruments |
| Reasons for material differences between the current estimate and the previous estimate | Not Applicable |
| Cumulative amount of equity-settled share-based payments included in the capital reserve | 11,327,867.55 |
| Total expense recognized for equity-settled share-based payments in the current period | 3,473,641.59 |
XIV. Commitments and Contingencies
1. Major commitments
(1) Major commitments on the balance sheet date
The Company committed to investing RMB 4 million in Zhejiang Tingshuo Brand Operation Management Co., Ltd., ofwhich RMB 2 million has been paid in, accounting for 40% of the shares. The remaining RMB 2 million has not been paid in.
In addition to the above commitments, as of the day of submission of the Financial Statements, the Company has no other majorcommitments.XV. Events After the Balance Sheet Date: NoneXVI. Other Significant Events
1. Debt restructuring
As of June 30, 2023, the Company's situation regarding the signing of the engineering mortgage housingagreement and the completion of procedures for purchasing houses through online signing is as follows:
| Item | Amount of debt repayment agreement signed | Including: Completion of procedures for online signing and delivery of houses Amount required for the procedures | Amount required in case of unfinished procedures for online signing and delivery of houses |
| Real estate clients | 329,839,806.74 | 70,422,825.01 | 259,416,981.73 |
| Total | 329,839,806.74 | 70,422,825.01 | 259,416,981.73 |
The Company signed a engineering mortgage housing agreement with the aforementioned real estate clients, involving atotal accounts receivable balance of RMB 329,839,800. The procedures for online signing and delivery of the portion of RMB70,422,800 has been completed, and the recognition of creditor's rights on accounts receivable has been terminated. The fairvalue of the real estate used for debt repayment at the time of debt restructuring is presented in the item of other non-currentassets, with a fair value of the portion of RMB 70,422,800 confirmed through public market inquiry. The Company paid aprice difference of RMB 2,588,700 in cash. At the time of debt restructuring, there was no profit or loss from the restructuring.The procedures for online signing and filing of the houses have not yet been completed for the remaining portion of RMB
259,417,000. The Company has not terminated the recognition of the creditor's rights on accounts receivable and has made abad debt provision at an expected credit loss rate of 20%.As of June 30, 2023, the Company has no other significant events to be disclosed.
XVII. Notes to Main Items of the Financial Statements of the Parent Company
1. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 1,491,018,527.24 | 53.38% | 951,136,758.57 | 63.79% | 539,881,768.67 | 1,543,955,986.32 | 58.11% | 972,062,395.33 | 62.96% | 571,893,590.99 |
| Including: | ||||||||||
| Bad debt provisions by individual item | 1,491,018,527.24 | 53.38% | 951,136,758.57 | 63.79% | 539,881,768.67 | 1,543,955,986.32 | 58.11% | 972,062,395.33 | 62.96% | 571,893,590.99 |
| Accounts receivable with a collective bad debt provision | 1,302,130,129.47 | 46.62% | 75,770,563.31 | 5.82% | 1,226,359,566.16 | 1,112,930,148.56 | 41.89% | 64,280,210.58 | 5.78% | 1,048,649,937.98 |
| Including: | ||||||||||
| Accounts receivable grouped accordin | 139,822,432.68 | 5.01% | 139,822,432.68 | 99,792,768.36 | 3.76% | 99,792,768.36 | ||||
| g to related parties | ||||||||||
| Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision | 1,162,307,696.79 | 41.61% | 75,770,563.31 | 6.52% | 1,086,537,133.48 | 1,013,137,380.20 | 38.13% | 64,280,210.58 | 6.34% | 948,857,169.62 |
| Total | 2,793,148,656.71 | 100.00% | 1,026,907,321.88 | 36.77% | 1,766,241,334.83 | 2,656,886,134.88 | 100.00% | 1,036,342,605.91 | 39.01% | 1,620,543,528.97 |
Bad debt provisions by individual item:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
| Unit 1 | 657,106,467.98 | 657,106,467.98 | 100.00% | Debt default |
| Unit 2 | 527,846,545.67 | 158,353,963.70 | 30.00% | Overdue debt |
| Unit 3 | 116,422,160.38 | 47,034,405.36 | 40.40% | Overdue debt |
| Unit 4 | 31,086,961.45 | 6,217,392.29 | 20.00% | Overdue debt |
| Unit 5 | 28,139,039.02 | 19,225,685.81 | 68.32% | Overdue debt |
| Unit 6 | 24,428,569.14 | 6,195,424.47 | 25.36% | Overdue debt |
| Unit 7 | 22,763,973.13 | 15,934,781.19 | 70.00% | Debt default |
| Unit 8 | 14,080,420.74 | 8,587,655.52 | 60.99% | Overdue debt |
| Unit 9 | 13,773,333.34 | 3,646,561.03 | 26.48% | Overdue debt |
| Unit 10 | 13,671,133.59 | 6,306,115.04 | 46.13% | Overdue debt |
| Unit 11 | 8,644,489.50 | 6,051,142.65 | 70.00% | Debt default |
| Unit 12 | 8,009,318.82 | 2,345,903.11 | 29.29% | Overdue debt |
| Unit 13 | 5,797,448.18 | 4,058,213.73 | 70.00% | Debt default |
| Unit 14 | 4,204,830.93 | 2,943,381.65 | 70.00% | Debt default |
| Unit 15 | 3,660,575.03 | 1,415,427.52 | 38.67% | Overdue debt |
| Unit 16 | 11,383,260.34 | 5,714,237.52 | 50.20% | Expected to be exposed to recovery risk |
| Total | 1,491,018,527.24 | 951,136,758.57 | ||
Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age
characteristics, their bad debts are provided for collectively.
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| With 1 year | 985,880,622.44 | 49,294,031.12 | 5.00% |
| 1-2 years | 131,537,661.51 | 13,153,766.15 | 10.00% |
| 2-3 years | 35,221,158.95 | 7,044,231.79 | 20.00% |
| 3-4 years | 5,656,362.68 | 2,828,181.34 | 50.00% |
| 4-5 years | 2,807,691.48 | 2,246,153.18 | 80.00% |
| More than 5 years | 1,204,199.73 | 1,204,199.73 | 100.00% |
| Total | 1,162,307,696.79 | 75,770,563.31 | |
Description on basis for determining combination：
Collective bad debt provision: Accounts receivable grouped according to related parties with a collective bad debt provision
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Percentage of provision | |
| Accounts receivable grouped according to related parties | 139,822,432.68 | ||
| Total | 139,822,432.68 | ||
Description on basis for determining combination：
If the bad debt provisions for accounts receivable is recognized in accordance with the expected general credit loss model,please disclose the relevant information of the bad debt provisions in the same manner as the disclosure of other accountsreceivable.
□Applicable ?Not applicable
Disclosed based on the aging
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,399,469,771.05 |
| Within 1 year (including 1 year) | 1,399,469,771.05 |
| 1-2 years | 1,025,247,285.91 |
| 2-3 years | 350,955,036.85 |
| More than 3 years | 17,476,562.90 |
| 3-4 years | 7,049,658.47 |
| 4-5 years | 5,578,741.55 |
| More than 5 years | 4,848,162.88 |
| Total | 2,793,148,656.71 |
(2) Bad debt provision, and its recovery or reversal in the current periodBad debt provision in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or | Write-off | Others | |||
| reversal | ||||||
| Bad debt reserves for accounts receivable | 1,036,342,605.91 | 29,121,357.11 | 38,556,641.14 | 1,026,907,321.88 | ||
| Total | 1,036,342,605.91 | 29,121,357.11 | 38,556,641.14 | 1,026,907,321.88 |
(3) Top five debtors with the largest ending balances of accounts receivable
In RMB
| Unit | Ending balance of accounts receivable | Proportion in the total ending balance of accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | 527,846,545.62 | 18.90% | 158,353,963.69 |
| Unit 2 | 452,376,997.98 | 16.19% | 452,376,997.98 |
| Unit 3 | 147,390,416.19 | 5.28% | 7,369,520.81 |
| Unit 4 | 95,125,955.20 | 3.40% | 95,125,955.20 |
| Unit 5 | 83,153,664.86 | 2.98% | 4,157,683.24 |
| Total | 1,305,893,579.85 | 46.75% |
(4) Amount of assets and liabilities arising from the transfer of accounts receivable and continuedinvolvement
| Asset item | Ending balance | Liability item | Ending balance |
| Accounts receivable factoring | 6,715,891.92 | Short-term borrowings | 6,715,891.92 |
2. Other accounts receivable
In RMB
| Item | Ending balance | Beginning balance |
| Dividends receivable | 10,200,000.00 | |
| Other accounts receivable | 94,065,660.85 | 73,700,676.77 |
| Total | 94,065,660.85 | 83,900,676.77 |
(1) Dividends receivable
1) Classification of dividends receivable
In RMB
| Item (or investee) | Ending balance | Beginning balance |
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 10,200,000.00 | |
| Total | 10,200,000.00 |
(2) Other accounts receivable
1) Classification of other accounts receivable by nature
In RMB
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Collections by a third party | 66,011,015.04 | 50,695,825.81 |
| Security/guarantee deposits | 32,855,617.64 | 30,213,932.48 |
| Related transactions | 4,064,000.00 | 4,064,000.00 |
| Withholdings | 5,886,431.32 | 4,337,682.15 |
| Cash reserve | 3,227,223.76 | 1,972,794.63 |
| Others | 1,026,223.49 | 6,022.00 |
| Total | 113,070,511.25 | 91,290,257.07 |
2) Bad debt provision
In RMB
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
| Balance as of January 1, 2023 | 17,589,580.30 | 17,589,580.30 | ||
| Balance on January 1, 2023 in the current period | ||||
| Provision in the current period | 1,415,270.10 | 1,415,270.10 | ||
| Balance as of June 30, 2023 | 19,004,850.40 | 19,004,850.40 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable ?Not applicable
Disclosed based on the aging
In RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 87,477,200.35 |
| Within 1 year (including 1 year) | 87,477,200.35 |
| 1-2 years | 6,791,034.68 |
| 2-3 years | 4,704,106.97 |
| More than 3 years | 14,098,169.25 |
| 3-4 years | 1,572,867.85 |
| 4-5 years | 1,503,349.00 |
| More than 5 years | 11,021,952.40 |
| Total | 113,070,511.25 |
3) Bad debt provision, and its recovery or reversal in the current periodBad debt provision in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt provision for other receivables | 17,589,580.30 | 1,415,270.10 | 19,004,850.40 | |||
| Total | 17,589,580.30 | 1,415,270.10 | 19,004,850.40 | |||
4) Top five debtors with the largest ending balances of other accounts receivable
In RMB
| Unit | Nature of receivable | Ending balance | Aging | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt reserves |
| Unit 1 | Collections by a third party and unit deposits | 42,067,468.93 | 0-3 years | 37.21% | 2,146,623.45 |
| Unit 2 | Collections by a third party and unit deposits | 5,948,313.58 | With 1 year | 5.26% | 297,415.68 |
| Unit 3 | Collections by a third party and unit deposits | 5,747,755.08 | 0-5 years and above | 5.08% | 334,887.75 |
| Unit 4 | Collections by a third party and unit deposits | 5,512,168.68 | 0-3 years | 4.88% | 316,415.93 |
| Unit 5 | Unit deposits | 5,500,000.00 | Within 1 year | 4.86% | 275,000.00 |
| Total | 64,775,706.27 | 57.29% | 3,370,342.81 |
3. Long-term equity investment
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investments in subsidiaries | 267,352,263.19 | 20,400,000.00 | 246,952,263.19 | 267,279,396.10 | 20,400,000.00 | 246,879,396.10 |
| Investments in joint ventures and associated companies | 3,870,729.69 | 0.00 | 3,870,729.69 | 4,890,453.34 | 0.00 | 4,890,453.34 |
| Total | 271,222,992.88 | 20,400,000.00 | 250,822,992.88 | 272,169,849.44 | 20,400,000.00 | 251,769,849.44 |
(1) Investment in subsidiaries
In RMB
| Investee | Beginning balance（book value) | Increase/decrease in the current period | Ending balance（book value) | Ending balance of impairment provision | |||
| Additional investment | Negative investment | Impairment provision | Others | ||||
| Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 162,320,000.00 | 162,320,000.00 | |||||
| Hangzhou MingQi Electric Co., Ltd. | 52,275,243.18 | 72,867.09 | 52,348,110.27 | ||||
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 630,900.00 | 630,900.00 | 20,400,000.00 | ||||
| Shanghai Robam Appliances Sales Co., Ltd. | 5,838,272.10 | 5,838,272.10 | |||||
| Beijing Robam Appliances Sales Co., Ltd. | 5,814,980.82 | 5,814,980.82 | |||||
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Hangzhou Jinhe Electric Appliances Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Robam International (HK) Trading Co., Ltd. | |||||||
| Robam Appliances Holding (HK) Co., Ltd. | |||||||
| Total | 246,879,396.10 | 72,867.09 | 246,952,263.19 | 20,400,000.00 | |||
(2) Investment in joint ventures and associated companies
In RMB
| Investor | Beginning balance（book value) | Increase/decrease in the current period | Ending balance（book value) | Ending balance of impairment provision | ||||||||
| Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive incomes | Other changes in equity | Cash dividends or profits declared and distributed | Impairment provision | Others | |||||
| I. Joint venture | ||||||||||||
| De Dietrich Trade (Shanghai) Co., Ltd. | 3,824,460.03 | -551,583.95 | 3,272,876.08 | |||||||||
| Subtotal | 3,824,460.03 | -551,583.95 | 3,272,876.08 | |||||||||
| II. Associated enterprises | 二、联营企业 | |||||||||||
| Zhejiang Tingshuo Brand Operation Management Co., Ltd. | 1,065,993.31 | -468,139.70 | 597,853.61 | |||||||||
| Subtotal | 1,065,993.31 | -468,139.70 | 597,853.61 | |||||||||
| Total | 4,890,453.34 | -1,019,723.65 | 3,870,729.69 | 0.00 | ||||||||
4. Operating income and operating cost
In RMB
| Item | Amount of the current period | Amount of the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,362,487,508.28 | 2,211,299,281.37 | 4,044,712,473.72 | 2,113,758,543.93 |
| Other businesses | 127,661,267.93 | 61,625,299.63 | 114,887,076.86 | 33,163,443.14 |
| Total | 4,490,148,776.21 | 2,272,924,581.00 | 4,159,599,550.58 | 2,146,921,987.07 |
5. Investment income
In RMB
| Item | Amount of the current period | Amount of the previous period |
| Income from long-term equity investments accounted for using the equity method | -1,019,723.65 | -2,947,887.32 |
| Investment income during holding of financial assets for trading | 22,815,337.74 | 20,586,968.04 |
| Total | 21,795,614.09 | 17,639,080.72 |
XVIII. Supplementary Information
1. Breakdown of non-recurring profits and losses in the current period?Applicable □Not applicable
In RMB
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) | -576,982.36 | |
| Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s normal business, in line with national policy and enjoyed by quota or ration in accordance with the unified national standard) | 60,521,206.11 | |
| Reversal of impairment provision for accounts receivable tested for impairment separately | 38,556,641.14 | |
| Other non-operating revenues and expenses except the above items | 1,354,348.96 | |
| Less: Affected amount of income tax | 15,524,210.60 | |
| Affected amount of minority shareholders’ equity | 1,304,629.94 | |
| Total | 83,026,373.31 | -- |
Explanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory AnnouncementNo. 1 on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Profits and Losses(referred to as “Announcement No.1”) are defined as recurring profits and losses?Applicable ?Not applicable
| Item | Amount | Reasons |
| VAT exemption, reduction or refund | 9,453,997.74 | National tax policy, regular business |
| Refund of individual income tax handling fee | 684,354.91 | National tax policy, regular business |
| Total | 10,138,352.65 | — |
2. Return on net assets and earnings per share (EPS)
| Profit within the Reporting Period | Weighted average return on net assets | EPS | |
| Basic earnings per share (EPS) (RMB/share) | Diluted EPS (RMB/share) | ||
| Net profit attributable to common stockholders of the Company | 8.24% | 0.87 | 0.87 |
| Net profit attributable to common shareholders of the Company after deducting non-recurring profits and losses | 7.42% | 0.79 | 0.79 |
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profits and net assets in the Financial Report disclosed as per the IAS and CAS
□Applicable ?Not applicable
(2) Differences of net profits and net assets in the Financial Report disclosed as per the foreignaccounting standard and CAS
□Applicable ?Not applicable
(3) Explanation of the reasons of accounting data differences under domestic and foreign accountingstandards shall be made, and where data audited by an overseas audit institution has been adjustedbased on the differences, the name of the overseas institution shall be indicated.
4. Others