Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Hangzhou ROBAM Appliances Co., Ltd.
2021 Full Annual Report
April 2022
Create China’s new kitchen
Leading global sales for
7 consecutive years
Leading global sales for
7 consecutive yearsCreate China’s new kitchen
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 1 Important Notes, Contents and DefinitionsThe board of directors, the board of supervisors and directors, supervisors and senior management of theCompany hereby guarantee that no false or misleading statement or major omission was made to thematerials in this report and that they will assume all the responsibility, individually and jointly, for theauthenticity, accuracy and completeness of the contents of the annual report.Ren Jianhua, the head of the Company, Zhang Guofu, the head of accounting work, and Zhang Guofu, thehead of accounting body (accountant in charge), guarantee the authenticity, accuracy and completeness ofthe financial report in this annual report.All directors of the Company personally attended the board meeting for reviewing this report.The Company has risks such as policy fluctuations in the real estate market, price fluctuations of rawmaterials and intensifying market competition. Please pay attention to the investment risks.The preplanned profit distribution deliberated and approved by the board of directors is as follows: taking944,094,916 shares as the radix (the existing total capital stock of 949,024,050 shares, excluding 4,929,134shares repurchased), the Company will send cash dividends of 5 yuan (tax included) and 0 bonus share (taxincluded) to all shareholders for every 10 shares, and instead of converting capital reserve into sharecapital.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Table of Contents
Section 1 Important Notes, Contents and Definitions ...... 1
Section 2 Company Profile and Major Financial Indicators ...... 5
Section 3 Management Discussion and Analysis ...... 10
Section 4 Corporate Governance ...... 29
Section 5 Environmental and social responsibility ...... 50
Section 6 Important Matters ...... 51
Section 7 Changes in Shares and Shareholders ...... 58
Section 8 Preferred Shares ...... 66
Section 9 Corporate Bonds ...... 67
Section 10 Financial Report ...... 68
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Directory of documents available for inspection
I. Financial statements containing signatures of the legal representative, the head of accounting work, and the head of accounting
body with seals.II. Original audit report stamped by ShineWing Certified Public Accountants (Special general partnership) and signed and stamped
with the certified public accountants.III. Original copies of the documents and announcement of the company published on the newspaper designated by the CSRC in
the reporting period.IV. 2021 annual report of the Company signed by the legal representative.V. Other relevant information.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Definitions
Create China’s new kitchenTerms
Terms | Refers to | Definition |
The Company, company, ROBAM Appliances | Refers to | Hangzhou ROBAM Appliances Co., Ltd. |
Mingqi | Refers to | Hangzhou Mingqi Electric Co., Ltd. |
Kinde Intelligent | Refers to | Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. |
ROBAM Group | Refers to | Hangzhou ROBAM Industrial Group Co., Ltd., controlling shareholder of the Company |
Reporting period | Refers to | Year 2021 |
AVC | Refers to | Beijing All View Cloud Data Technology Co., Ltd. |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Section 2 Company Profile and Major Financial IndicatorsI. Company Information
Create China’s new kitchenStock abbreviation
Stock abbreviation | ROBAM | Stock code | 002508 |
Stock exchange for stock listing | Shenzhen Stock Exchange | ||
Company name in Chinese | 杭州老板电器股份有限公司 | ||
Company short name in Chinese | ROBAM | ||
Company name in English (if any) | HANGZHOU ROBAM APPLIANCES CO.,LTD. | ||
Company short name in English (if any) | ROBAM | ||
Legal representative of the Company | Ren Jianhua | ||
Registered address | No. 592 Linping Av., Yuhang Economic Development Zone, Hangzhou, China | ||
Postal code of the registered address | 311100 | ||
Historical changes of the Company's registered address | N/A | ||
Office address | No. 592 Linping Av., Yuhang Economic Development Zone, Hangzhou, China | ||
Postal code of the office address | 311100 | ||
Company website | http://www.robam.com/ | ||
robam@robam.com |
II. Contact Person and Contact Information
Secretary to the board of directors | Securities affairs representative | |
Name | Wang Gang | Jiang Yu |
Contact address: | No. 592 Linping Av., Yuhang Economic Development Zone, Hangzhou, China | No. 592 Linping Av., Yuhang Economic Development Zone, Hangzhou, China |
Tel | 0571-86187810 | 0571-86187810 |
Fax | 0571-86187769 | 0571-86187769 |
wg@robam.com | jy@robam.com |
III. Information Disclosure and Keeping Place
The website(s) of the stock exchange where the Company discloses the annual report | Securities Times, China Securities Journal, Securities Daily, Shanghai Securities News |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenThe name and website of the media where theCompany discloses the annual report
The name and website of the media where the Company discloses the annual report | http://www.cninfo.com.cn |
Place of preparation of the Company’s annual report | Board office |
IV. Registration Changes
Organization code | 725252053 |
Changes in main business since the Company's listing (if any) | No changes |
Changes of controlling shareholders (if any) | No changes |
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm | Shinewing Certified Public Accountants (special general partnership) |
Office address of the accounting firm | 9/F, Block A, Fuhua Mansion, No.8 Chaoyangmen North Street, Dongcheng District, Beijing |
Name of signatory accountant | Lei Yongxin, Wang Qing |
The sponsor institution engaged by the Company to perform the continuous supervision responsibility during the reporting period
□ Applicable √ Not applicable
The financial advisor engaged by the Company to perform the continuous supervision responsibility during the reporting period
□ Applicable √ Not applicable
VI. Major Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of the previous years
□ Yes √ No
2021 | 2020 | Increase / decrease this year compared to the previous year | 2019 | |
Operating income (yuan) | 10,147,706,035.35 | 8,128,620,799.31 | 24.84% | 7,760,581,855.53 |
Net profits attributable to shareholders of listed companies (yuan) | 1,331,712,059.03 | 1,660,749,958.89 | -19.81% | 1,589,814,847.80 |
Net profits attributable to | 1,276,853,316.64 | 1,584,584,566.83 | -19.42% | 1,516,979,830.78 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenshareholders of the listed companyafter deduction of non-recurringprofits and losses (yuan)
shareholders of the listed company after deduction of non-recurring profits and losses (yuan) | ||||
Net cash flow from operating activities (yuan) | 1,365,377,219.33 | 1,537,299,958.71 | -11.18% | 1,555,220,926.90 |
Basic EPS (yuan/share) | 1.41 | 1.75 | -19.43% | 1.68 |
Diluted EPS (yuan/share) | 1.41 | 1.75 | -19.43% | 1.68 |
Weighted average return on net assets | 15.78% | 22.39% | -6.61% | 25.10% |
End of 2021 | End of 2020 | Increase / decrease at the end of this year compared to the end of the previous year | End of 2019 | |
Total assets (yuan) | 13,906,035,181.12 | 12,457,568,276.25 | 11.63% | 10,651,922,572.87 |
Net assets attributable to shareholders of listed companies (yuan) | 8,627,026,739.27 | 8,050,626,815.35 | 7.16% | 6,864,388,881.46 |
The lower net profit of the Company before and after deducting non-recurring profit and loss in the last three fiscal years is negative,and the audit report of the latest year shows that the Company's ability to continue as a going concern is uncertain
□ Yes √ No
The lower net profit before and after deducting non-recurring profit and loss is negative
□ Yes √ No
VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences between net profits and net assets in financial statements disclosed according to theInternational Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the International Accounting Standards(IAS) and Chinese Accounting Standards during the reporting period.
2. Differences between net profits and net assets in financial statements disclosed according to theOverseas Accounting Standards and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the Overseas Accounting Standardsand Chinese Accounting Standards during the reporting period.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
VIII. Key Quarterly Financial Indicators
Unit: yuan
Create China’s new kitchen
Q1 | Q2 | Q3 | Q4 | |
Operating income | 1,908,332,042.49 | 2,417,749,989.13 | 2,744,769,787.56 | 3,076,854,216.17 |
Net profits attributable to shareholders of listed companies | 358,828,585.88 | 431,560,173.91 | 552,072,334.14 | -10,749,034.90 |
Net profits attributable to shareholders of the listed company after deduction of non-recurring profits and losses | 321,817,120.06 | 424,568,251.15 | 544,600,920.87 | -14,132,975.44 |
Net cash flow from operating activities | 145,798,650.84 | 384,427,665.66 | 471,702,438.11 | 365,651,230.72 |
Whether there is significant difference between the above financial indicators or the total sum of them and the financial indicatorsrelated to the quarterly report and semiannual report disclosed by the Company
□ Yes √ No
IX. Non-recurring Profit and Loss Items and Amount
√ Applicable □ Not applicable
Unit: yuan
Item | Amount in 2021 | Amount in 2020 | Amount in 2019 | Description |
Profits and losses on the disposal of non-current assets (including the write-off part of the provision for asset impairment) | -2,290,187.24 | -422,706.54 | -158,607.19 | |
Government subsidies included into the current profits and losses (except those government subsidies, which are closely related to the normal business of the Company, comply with national policies and regulations and continuously enjoyed in accordance with a certain standard quota or quantity) | 65,893,969.94 | 91,184,657.20 | 88,113,806.09 | |
Reversal of impairment provision for receivables subject to separate impairment test | 1,034,992.00 | |||
Income and expenditure other than those mentioned above | -2,306,626.52 | -2,965,479.76 | -1,884,306.56 | |
Less: Amount affected by income tax | 6,738,387.65 | 11,202,215.16 | 13,290,725.11 | |
Amount of minority shareholders' equity affected (after tax) | 735,018.14 | 428,863.68 | -54,849.79 | |
Total | 54,858,742.39 | 76,165,392.06 | 72,835,017.02 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
The Company does not have any other profit and loss items that meet the definition of non-recurring profit and loss.Description of defining the non-recurring profit and loss items enumerated in the “Interpretative Announcement No. 1 on InformationDisclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as recurrent profit and loss items
□ Applicable √ Not applicable
The Company does not have any non-recurrent profit and loss items enumerated in the “Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as recurrent profit and loss items.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 3 Management Discussion and Analysis
I. Industry Situation that the Company was in During the Reporting Period
According to the “National Economic and Social Development Statistics Bulletin 2021” issued by the National Bureau of statistics,at the end of 2021, the urbanization rate of the country's permanent population was 64.72%, 0.83 percentage points higher than that atthe end of the previous year. China is at the mid-term level of urbanization development. Compared with the average level of 80%urbanization rate in developed countries, China's urbanization rate will still have a large room for growth in the long term. Thanks tothe continuous improvement of urbanization rate and urbanization development quality stage, the development of kitchen applianceindustry has been sound for a long time, and the expansion and upgrading trend of kitchen category in China is significant. Comparedwith the gradual slowdown of incremental market of kitchen appliances brought by the real estate industry in the past two decades,the stock market dominated by renewal demand is gradually opening up, and the new market and stock market will jointly supportthe future development space of kitchen appliance industry.Due to the timing differences between Chinese traditional kitchen appliances and emerging kitchen appliances, the currentdevelopment shows different characteristics.Traditional kitchen appliances: 1) in terms of product scale, the retail sales declined slightly, and the retail sales still increased.According to the total data pushed by All View Cloud (AVC), in 2021, the overall scale of range hoods was 21.5 million units andRMB 33.3 billion, with a year-on-year decline of 6% in retail volume and a year-on-year increase of 4% in retail sales. In 2021, theoverall scale of gas hobs was 25.43 million units and RMB 19.1 billion, with a year-on-year decline of 9% in retail volume and ayear-on-year increase of 2% in retail sales. 2) In terms of average price, the upgrading of product structure drives the average pricegrowth. In 2021, the average online price of range hood was RMB 1,550, a year-on-year increase of RMB 156, and the averageoffline price was RMB 3,733, a year-on-year increase of RMB 313. 3) In terms of consumption scenarios, the trend of product setsales is obvious. The high-end and intelligent development of home appliance manufacturers is trending. 4) In terms of competitionpattern, the market share of online and offline leading enterprises has increased. In 2021, the market share of online market ROBAM/ FOTILE's sales was + 1.5pct / + 1.51pct respectively year-on-year; The market share of offline market ROBAM / FOTILE's saleswas + 2.71pct / + 2.26pct respectively year-on-year.Emerging kitchen appliances: dishwashers and built-in steam oven products drive the growth of kitchen appliance market. Accordingto the total data pushed by All View Cloud (AVC), 1) in terms of product scale, the total retail sales increased. In 2021, the retail sales
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
of dishwasher market was RMB 9.96 billion, with a year-on-year increase of 14.4%, and the retail volume was 1.952 million units,with a year-on-year increase of 1.7%. In 2021, the overall scale of built-in steam oven-oven was 950 thousand units and RMB 5.6billion, with a year-on-year increase of 22% in retail volume and a year-on-year increase of 26% in retail sales. Compared with 2019,the retail volume increased by 98% and the retail sales increased by 104% year-on-year. 2) In terms of product types, productfunctions tend to be integrated and high-end. The innovation of new and old kitchen appliances continues, and the product iterationspeeds up. 3) In terms of channel structure, the market share of new categories in hardbound housing and front decoration continuesto increase. The growth momentum of emerging kitchen appliances is strong, and Chinese kitchens have entered a new era ofcategory expansion.II. Main Business of the Company during Reporting Period
Dedicated to creating a new quality kitchen for millions of families, the Company takes foot in the kitchen field and focuses on thedevelopment, production, sales and comprehensive services of kitchen appliances, including range hoods, gas hobs, steam oven-oven,dishwashers and integrated hobs, and it is committed to creating a more “convenient, healthy and interesting” kitchen life forthousands of families. After more than 40 years of development and growth, the Company has become the manufacturer with thelongest history, the highest market share and the largest production capacity in the Chinese kitchen appliance industry. The Companyhas achieved the best sales of range hoods in China for 24 years and the world for seven consecutive years.According to the product attributes and cooking methods, the Company's products are mainly divided into three categories andintegrated categories. The first category refers to the product group represented by range hoods. The second category refers to theelectrified cooking product group represented by steam oven-oven, steamer and oven. The third category refers to the water kitchenappliance product group represented by dishwashers, gas water heater and water purifier. In addition, there are integrated productgroups represented by integrated hobs and integrated range hoods.The channel layout of the Company is complete, forming three major channels focusing on offline retail, online e-commerce andrefined decoration engineering, as well as overseas channels.
1) Offline retail channels: mainly based on the national agent model of ROBAM, the main channels are divided into exclusive stores(agent exclusive stores, Red Star Macalline, Easyhome, etc.), KA (GOME, Suning, 5 Star and local chain channels), innovationchannels (whole house customization companies, home decoration companies and gas companies), sinking channels (JDexclusive store, Tmall Youpin, Suning Retail Cloud, GOME New Retail, 5 Star Wanzhentong, etc.) and local department stores,etc.
2) Online e-commerce channels: mainly directly operated by the Company's e-commerce department. The main channels include
Leading global salesfor 7 consecutive
years
Create China’s new kitchen
online platforms such as JD, Tmall and Suning, as well as other media platforms (new media social networking, official website,private domain, TV shopping, etc.)
3) Refined decoration engineering channels: strategic engineering customers (leading real estate enterprises) and regional
engineering customers.
4) Overseas channels: North America, Australia, Malaysia, Cambodia and other Southeast Asian regions.
III. Analysis of Core CompetitivenessNo significant change in the Company's core competitiveness during the reporting period: The Company's core competitiveness ismainly reflected in the high-end positioned the brand capacity, continuous innovative research and development capacity,comprehensive and efficient operation capacity.
1. Brand capability of high-end positioning
ROBAM, founded in 1988, has established a significant brand advantage in the kitchen appliance industry. Since 1991, ROBAMrange hood has won the only "Quality Silver Award of the People's Republic of China", "China Famous-brand Product", "NationalInspection-free Product" in the kitchen appliance industry; ROBAM has been recognized as "China Famous Brand"; ROBAM haswon "Most Influential Brand in China's Kitchen Appliance Industry" and "China's 500 Most Valuable Brands". In addition, ROBAMhas been shortlisted as "Brandz Top 100 Most Valuable Chinese Brands" for 7 consecutive years and awarded "Top 500 Asia Brand"for 15 consecutive years. After more than 40 years of efforts, it continues to deepen the positioning of "big suction" and createhigh-end brand experience. "Big suction" has become the synonym of "high-end range hood", and the ROBAM has become one ofthe most famous and favorite professional high-end kitchen appliance brands in China. In 2015, ROBAM represented China'shigh-end manufacturing and landed at Milan Expo, and in 2016, it landed at IFA exhibition in Germany, which improved theROBAM's high-end image and international influence. In 2018, ROBAM Appliances put forward a new brand concept, that is, to"Creating China’s new kitchen." According to the survey data released by Euromonitor International, the world's authoritative marketresearch organization, ROBAM Appliances’ range hood won the first market share of global range hood private brand market forseven consecutive years from 2015 to 2021.
2. R & D capability of continuous innovation
The mission of the Company is to render happiness of kitchen life for more families, by improving the existing cooking environmentbased on continuous research on technology to bring healthy and relaxed cooking life to users with cooking fun. For this reason, theCompany adheres to the principle of "product leading" and constantly pursues "technology leading". The Company now has anational technology center, a national laboratory, a national industrial design center, California institute of innovation, Shenzhen
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
innovation research institute and academician workstation of Tsinghua University. It introduces high-level technical talents,implements fine management, and improves the construction of technical talent echelon. It also pays attention to the quality andefficiency of R & D, continuously optimizes the product development cycle, improves the success rate of product launch, andreserves intelligent and integrated core technologies. On the hardware side, the Company adheres to the craftsman spirit of excellence,promotes the all-round and multi-dimensional improvement of the first, second and third product category groups; On the softwareside, it explores the development of AI-IoT intelligent IOT platform, focuses on the application of AI intelligent cooking curve, andimproves the soft power of kitchen appliance products.
3. Comprehensive and efficient operation capability
The Company has the leading marketing capability in the industry: the Company adopts the only agency marketing mode in theindustry, and creates the most comprehensive, efficient and responsive marketing system in the industry through strong managementand control, equity incentive and the de facto business partner system. It deepens intelligent manufacturing, lean operation andtechnology driven, and comprehensively builds the industry's first supply chain system. Looking at global manufacturing, thenine-day central digital platform with data-driven business has been officially put into use, striving to become a first-classmanufacturing benchmark in China. In addition, the Company accelerates the integration of digitization and informatization, focuseson the interactive innovation and continuous optimization of data, technology, business process and organizational structure,constantly creates new capabilities in the informatization environment, and improves the sustainable competitiveness in the domesticand foreign markets.IV. Main Business Analysis
1. Overview
In 2021, in the face of adverse factors such as the tightening of national macro policies on real estate and the rising costs of rawmaterials and labor, the overall competition in the kitchen appliance industry is more intense and the industry concentration continuesto increase. In terms of retail channel, according to the monthly data report of offline retail market monitoring of All View(hereinafter referred to as "All View offline report"), the retail sales of main categories of kitchen appliances, such as range hoodsand gas hobs, decreased by 0.05% and 1.9% respectively compared with the same period of last year. In terms of e-commercechannel, according to the monthly data report of online retail market monitoring of All View (hereinafter referred to as "All Viewonline report"), the retail sales of kitchen appliance packages increased by 5.4% compared with the same period of last year. In termsof engineering channel, according to the report "2021 China Real Estate Fine Decoration Market Summary of All View", there were
Leading global salesfor 7 consecutive
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3,378 new projects of kitchen appliances in the fine decoration market, decreased by 7.5% year-on-year, and the scale of kitchenappliances was 2,788,500, decreased by 12.2% year-on-year.As the leading company in the industry, the Company closely focuses on the annual business philosophy of "journey with dream,torrent with bravery", firmly grasps the dividend of increasing industry concentration, and makes joint efforts in new and old kitchenappliance products. With all channels being significantly better than the industry level, it realizes the operating income of RMB
10.148 billion, with a year-on-year increase of 24.84%, and the income breaks through RMB 10 billion for the first time, which is animportant milestone in the development history of the Company.As of December 31, 2021, according to the All View offline report, the market share and market position of the offline retail sales ofCompany's major product categories are shown in the following table:
Create China’s new kitchen
Range hood
Range hood | Gas hobs | Sterilizer cabinet | Built-in steam oven-oven | Built-in electrical steam oven | Built-in electric oven | Built-in dishwasher |
30.5%
30.5% | 29.3% | 22.4% | 34.8% | 22.8% | 39.6% | 17.5% |
1 | 1 | 2 | 1 | 2 | 2 | 2 |
As of December 31, 2021, according to the All View online report, the market share and market position of the online retailsales of Company's major product categories are shown in the following table:
Kitchen appliance packages | Range hood and gas hobs | Range hood | Gas hobs | Built-in steam oven-oven | Built-in electrical steam oven | Built-in dishwasher |
30.4%
30.4% | 24.2% | 16.9% | 9.9% | 14.5% | 25.8% | 8.2% |
1 | 1 | 1 | 3 | 3 | 1 | 4 |
As of December 31, 2021, according to the All View refined decoration report, the market share of “ROBAM” range hood in refineddecoration channel is 36.2%, ranking first in the industry.In 2021, in the technology sector, it takes products as the core, talents as the cornerstone and innovation as the driving force topromote product upgrading and lead the development of the industry. It pays attention to the training of R & D talents, improve theconstruction of R & D system, increase cooperation with colleges and universities, and deepen the integration of the industry,universities and research institutes. Adhering to the spirit of craftsmanship and management innovation, it accelerates the iterationand upgrading of software and hardware of various categories, and improves the user experience. The range hood 8235S won theAWE2021 "AWE Gold Award" and the German IF Design Award 2021, the range hood CG68A0 won the German Red Dot Award2021: Product Design, and ROBAM Creator series won the "2021 Red-top Award for China's High-end Household Appliances andConsumer Electronics". This year, 1093 patents were applied for, including 274 invention patents; By the end of 2021, a total of 2010patents had been granted, including 65 invention patents. In addition, in 2021, the Company took the lead in formulating 9 standards,including 1 industry standard, 6 group standards and 2 Zhejiang manufacturing standards; Participated in the formulation of 21
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
standards, including 9 national standards, 3 industrial standards and 9 group standards. The Company’s technological innovationability has been continuously recognized by the industry and won the second prize of Zhejiang Science and Technology ProgressAward and the second prize of China Quality Association Quality Technology Award.In 2021, the marketing sector deepened the high-end positioning of the brand, made joint efforts in new and old categories,coordinated development of multiple channels, and mutual empowerment of categories and channels to provide consumers withhigh-quality comprehensive solutions for kitchen appliances. In terms of retail channels, it leads the development trend of series andhigh-end of the industry, creates a consumption scene of "China's new kitchen" with "ROBAM four-piece set" as the starting point;promotes marketing flat construction, implements marketing digital reform, and optimizes channel efficiency. In terms of innovativechannels, it in-depth cooperates with whole house customization companies and leading enterprises of home decoration companies,seizes the front-end flow entrance, actively explores the stock market resources, and quickly improves the matching rate of secondand third categories. In terms of e-commerce channels, it has the new and old media platforms under mutual drainage, contentmarketing digging new and old user value; accelerates the iteration and upgrading of various categories, shares product advantageswithin the channels, and improves channel efficiency. In terms of project channels, it adjusts the customer structure, upgrades theproduct structure, improves the penetration of new products, promotes the series solution of refined decoration residential kitchenappliance products, and further popularizes the central range hoods. In terms of overseas channels, it continuously optimizes theglobal layout and steadily promotes the process of brand internationalization.In 2021, the production sector is committed to opening up a new path for the transformation and upgrading of China's high-endkitchen appliance manufacturing, focusing on the three core strategies of "accurate delivery, high-quality manufacturing anddata-driven", and building one of the manufacturing benchmarks with the strongest comprehensive competitiveness of China'smanufacturing industry with the four business priorities of "strengthening supply, promoting transformation, developing newproducts and refining business". Through refined cost control, process innovation, new technology application and scientific andefficient quality management, the Company can ensure the delivery capacity of new and old kitchen appliances, continuously reducethe cost of procurement and improve the production efficiency and scale effect. It strengthens the headquarters demand forecastingfunction, uses inventory model and scientific replenishment, successfully realizing the direct distribution reform in more than 10regions across the country. The satisfaction degree of customer orders reaches more than 97%. ROBAM Future Factory is the firstintelligent unmanned factory in China's kitchen appliance industry. The project is one of the first batch of "future factories" inZhejiang Province. In addition, Maoshan Intelligent Manufacturing Science and Innovation Park project has been put into use, whichwill promote product iteration, upgrade manufacturing intelligence capability and consolidate the foundation of the Company'slong-term development.
Leading global salesfor 7 consecutive
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In 2021, the brand sector is committed to building the first brand of high-end kitchen appliances in China that knows Chinesecooking best, and continues to promote the implementation of the "China's new kitchen" plan. AWE successfully held a brandexhibition with the theme of technology inspiring culinary creativity in 2021, and launched ROBAM Creator series products at theimmersive press conference "Hello Creator" to strengthen the brand height. CCTV, academicians, talents are invited into ROBAM,making the whole network witness the Company's product update and iteration. The Company held the China Dishwasher Festivaland jointly issued the “White Paper on Dishwashers Suitable for Chinese Kitchens” with the China Household Electric AppliancesResearch Institute to enhance the brand potential. Xu Kai was hired as the spokesperson for ROBAM new kitchen. Various channelscarried out activities such as China-fashion banquet, peach blossom banquet and “Yearning for Kitchen” Festival. The Company wasthe exclusive title sponsor of "Heard it's delicious" and served as the food creation officer of "The Pursuit of Happiness" to interpretthe brand value. In addition, as the exclusive supplier of official household kitchen appliances for the 2022 Hangzhou Asian Games,it will help to spread Chinese cooking culture and boost the construction of Asian Games cities.In 2021, Mingqi focused on the upgrading of integrated categories, explored the development direction of integrated kitchen, andworked together with online and offline channels to create a new retail model and move towards a new development. Kinde enrichedthe product matrix of integrated stoves and guarded the brand position. After the completion of the intelligent integrated kitchenecological industrialization project, the R & D and manufacturing capacity of integrated kitchen appliance products will be furtherimproved.In 2021, the Company continued to be recognized by the capital market in terms of corporate governance, internal management andshareholder return. In the information disclosure assessment of Listed Companies in Shenzhen Stock Exchange in 2020, theCompany was rated as a (excellent) level, and it has won this honor for eight consecutive years; In the field of investor relations, theCompany won the best board of directors award of the 12
th
Tianma Award for Investor Relations of Listed Companies on the MainBoard of China, the 12
th
Best Investor Relations Award of China’s Listed Companies, the Top 100 Value Listed Companies on theMain Board and other awards of the Securities Times; The secretary of the board of directors of the Company won the 12
th
BestDirector Secretary of Investor Relations of Listed Companies on the Main Board of China and other awards. The Company hasalways adhered to standard operation, deeply explored the kitchen field and helped value investment.In 2021, as part of the Company's common prosperity plan, and in order to further establish and improve the Company's long-termeffective incentive mechanism and fully mobilize the enthusiasm of the Company's middle and senior core forces, the Companysuccessively launched the “Business Partner Shareholding Plan” and the “2021 Stock Option Incentive Plan” to providedifferentiated incentives for the Company's senior management team, middle-level core business and technical backbone, so as toconsolidate the Company's long-term development foundation, promote the high-quality development of the Company.
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
2. Revenue and Costs
(1) Operating income composition
Unit: yuan
Create China’s new kitchen
2021 | 2020 | Year-on-year increase / decrease | |||
Amount | Proportion in operating income | Amount | Proportion in operating income | ||
Total operating income | 10,147,706,035.35 | 100% | 8,128,620,799.31 | 100% | 24.84% |
By industry | |||||
Home and kitchen & bath appliances | 9,878,609,034.58 | 97.35% | 7,950,757,663.78 | 97.81% | 24.25% |
Other | 269,097,000.77 | 2.65% | 177,863,135.53 | 2.19% | 51.29% |
By product | |||||
First category group | |||||
Range hood | 4,879,636,891.65 | 48.09% | 4,109,720,518.81 | 50.56% | 18.73% |
Gas hobs | 2,439,639,215.87 | 24.04% | 1,917,138,716.95 | 23.59% | 27.25% |
Sterilizer cabinet | 544,149,587.07 | 5.36% | 558,934,801.48 | 6.88% | -2.65% |
Second category group | |||||
Steam oven-oven | 647,136,752.08 | 6.38% | 377,875,190.46 | 4.65% | 71.26% |
Steamer | 150,479,922.38 | 1.48% | 188,586,242.66 | 2.32% | -20.21% |
Steamer | 132,013,212.98 | 1.30% | 118,200,187.42 | 1.45% | 11.69% |
Third category group | |||||
Dish-washing machine | 450,505,656.90 | 4.44% | 223,781,076.46 | 2.75% | 101.32% |
Water purifier | 59,858,528.51 | 0.59% | 61,458,853.99 | 0.76% | -2.60% |
Water heaters | 155,054,325.57 | 1.53% | 56,885,678.02 | 0.70% | 172.57% |
Integrated hob | 326,347,237.29 | 3.22% | 259,062,761.51 | 3.19% | 25.97% |
Other small home appliances | 93,787,704.28 | 0.92% | 79,113,636.02 | 0.97% | 18.55% |
Other business income | 269,097,000.77 | 2.65% | 177,863,135.53 | 2.19% | 51.29% |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenBy region
By region | |||||||
East China - main products | 4,699,565,607.49 | 46.33% | 3,660,037,066.87 | 45.03% | 28.40% | ||
East China - other | 269,097,000.77 | 2.65% | 177,863,135.53 | 2.19% | 51.29% | ||
South China | 1,313,350,785.57 | 12.94% | 1,166,738,209.66 | 14.35% | 12.57% | ||
Central China | 890,428,360.89 | 8.77% | 798,608,093.61 | 9.82% | 11.50% | ||
North China | 1,242,294,816.78 | 12.24% | 859,966,194.92 | 10.58% | 44.46% | ||
Northeast China | 512,607,935.65 | 5.05% | 417,632,137.86 | 5.14% | 22.74% | ||
Northwest China | 509,788,589.04 | 5.02% | 366,186,500.24 | 4.50% | 39.22% | ||
Southeast China | 647,294,350.69 | 6.38% | 644,756,608.57 | 7.93% | 0.39% | ||
Overseas regions | 63,278,588.47 | 0.62% | 36,832,852.05 | 0.45% | 71.80% | ||
Distribution model | |||||||
Sales by proxy | 3,070,367,965.64 | 30.25% | 2,575,251,701.43 | 31.69% | 19.23% | ||
Sales by dealers | 380,213,068.56 | 3.75% | 346,131,673.27 | 4.26% | 9.85% | ||
Direct sales | 4,647,292,563.60 | 45.80% | 3,340,258,926.10 | 41.09% | 39.13% | ||
Engineering | 1,976,492,346.14 | 19.48% | 1,847,977,080.91 | 22.73% | 6.95% | ||
Other | 73,340,091.41 | 0.72% | 19,001,417.60 | 0.23% | 285.97% |
(2) Industries, products, regions and sales models that account for more than 10% of the Company's
operating income or profit
√ Applicable □ Not applicable
Unit: yuan
Operating income | Operating cost | Gross margin ratio | Year-on-year increase / decrease of operating income | Year-on-year increase / decrease of operating cost | Year-on-year increase / decrease of gross margin ratio | |
By industry | ||||||
Home and kitchen & bath appliances | 10,147,706,035.35 | 4,835,053,404.37 | 52.35% | 24.84% | 35.69% | -3.81% |
By product | ||||||
Range hood | 4,879,636,891.65 | 2,261,658,764.86 | 53.65% | 18.73% | 36.19% | -5.94% |
Gas hobs | 2,439,639,215.87 | 1,048,989,508.38 | 57.00% | 27.25% | 33.91% | -2.14% |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenBy region
By region | ||||||
East China | 4,699,565,607.49 | 2,153,822,471.06 | 54.17% | 28.40% | 39.05% | -3.51% |
South China | 1,313,350,785.57 | 683,419,773.36 | 47.96% | 12.57% | 25.01% | -5.18% |
North China | 1,242,294,816.78 | 577,901,469.75 | 53.48% | 44.46% | 64.94% | -5.78% |
Distribution model | ||||||
Sales by proxy | 3,070,367,965.64 | 1,596,428,723.00 | 48.01% | 19.23% | 36.71% | -6.65% |
Direct sales | 4,647,292,563.60 | 1,515,713,730.29 | 67.39% | 39.13% | 20.23% | 5.13% |
Engineering | 1,976,492,346.14 | 1,050,923,152.77 | 46.83% | 6.95% | 14.01% | -3.29% |
In the case that the statistical standards for main business data of the Company are adjusted during the reporting period, the mainbusiness data of the Company in recent 1 year are subject to those after the adjustment of the statistical standards at the end of thereporting period
□ Applicable √ Not applicable
(3) Whether the Company's physical sales revenue is greater than the service revenue
√ Yes □ No
Industry category | Item | Unit | 2021 | 2020 | Year-on-year increase / decrease |
Home and kitchen & bath appliances | Sales quantity | Unit | 8,026,289 | 6,952,763 | 15.44% |
Production output | Unit | 8,079,472 | 7,056,783 | 14.49% | |
Inventory | Unit | 2,275,238 | 2,222,055 | 2.39% |
Reasons for more than 30% year-on-year changes in the relevant data
□ Applicable √ Not applicable
(4) Performance of major sales contracts and major purchase contracts signed by the Company up to the
reporting period
□ Applicable √ Not applicable
(5) Composition of operating cost
Industry and product categories
Unit: yuan
Industry category | Item | 2021 | 2020 | Year-on-year increase / decrease | ||
Amount | Proportion in operating cost | Amount | Proportion in operating cost |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Home andkitchen &bathappliances
Home and kitchen & bath appliances | Manufacturing costs | 375,524,089.21 | 7.77% | 231,680,866.15 | 6.50% | 62.09% |
Raw materials | 4,240,067,637.57 | 87.69% | 3,112,334,458.17 | 87.35% | 36.23% | |
Labor | 219,461,677.59 | 4.54% | 219,191,606.55 | 6.15% | 0.12% |
Unit: yuan
Product Classification | Item | 2021 | 2020 | Year-on-year increase / decrease | ||
Amount | Proportion in operating cost | Amount | Proportion in operating cost | |||
Range hood | Manufacturing costs | 213,123,127.91 | 4.41% | 134,505,424.42 | 3.77% | 58.45% |
Raw materials | 1,929,019,611.59 | 39.90% | 1,407,036,579.61 | 39.49% | 37.10% | |
Labor | 119,516,025.36 | 2.47% | 119,122,390.95 | 3.34% | 0.33% | |
Gas hobs | Manufacturing costs | 37,797,820.14 | 0.78% | 23,134,151.04 | 0.65% | 63.39% |
Raw materials | 982,173,775.43 | 20.31% | 730,332,351.14 | 20.50% | 34.48% | |
Labor | 29,017,912.81 | 0.60% | 29,873,559.60 | 0.84% | -2.86% | |
Sterilizer cabinet | Manufacturing costs | 32,815,880.40 | 0.68% | 28,084,404.21 | 0.79% | 16.85% |
Raw materials | 336,463,954.86 | 6.96% | 286,265,054.99 | 8.03% | 17.54% | |
Labor | 24,559,377.53 | 0.51% | 25,979,428.66 | 0.73% | -5.47% | |
Other | Manufacturing costs | 91,787,260.76 | 1.90% | 45,956,886.49 | 1.29% | 99.72% |
Raw materials | 992,410,295.69 | 20.53% | 688,700,472.43 | 19.33% | 44.10% | |
Labor | 46,368,361.89 | 0.96% | 44,216,227.34 | 1.24% | 4.87% |
(6) Whether the consolidation scope changes in the reporting period
□ Yes √ No
(7) Major changes or adjustments of business, products or services of the Company during the reporting
period
□ Applicable √ Not applicable
(8) Major sales customers and major suppliers
Major sales customers of the Company
Leading global salesfor 7 consecutive
years
Create China’s new kitchen
Create China’s new kitchenTotal sales amount of top five customers (yuan)
Total sales amount of top five customers (yuan) | 3,281,950,225.24 |
Proportion of total sales amount of top five customers in total annual sales | 32.34% |
Among the sales amount of top five customers, proportion of sales amount of related parties in total annual sales | 0.00% |
Top 5 customers of the Company
No. | Customer name | Sales Amount (yuan) | Proportion in total annual sales |
1 | Unit 1 | 1,599,097,679.27 | 15.76% |
2 | Unit 2 | 885,343,504.05 | 8.72% |
3 | Unit 3 | 312,719,970.80 | 3.08% |
4 | Unit 4 | 298,965,812.27 | 2.95% |
5 | Unit 5 | 185,823,258.85 | 1.83% |
Total | -- | 3,281,950,225.24 | 32.34% |
Other information of major customers
□ Applicable √ Not applicable
Major suppliers of the Company
Total purchase amount of top five suppliers (yuan) | 1,118,557,326.48 |
Proportion of total purchase amount of top five suppliers in total annual purchase amount | 22.72% |
Among the purchase amount of top five suppliers, proportion of purchase amount of related parties in total annual purchase amount | 0.00% |
Top 5 suppliers of the Company
No. | Supplier name | Purchase amount (yuan) | Proportion in total annual purchase amount |
1 | Unit 1 | 263,084,773.79 | 5.34% |
2 | Unit 2 | 253,409,671.61 | 5.15% |
3 | Unit 3 | 234,233,755.68 | 4.76% |
4 | Unit 4 | 220,243,579.77 | 4.47% |
5 | Unit 5 | 147,585,545.63 | 3.00% |
Total | -- | 1,118,557,326.48 | 22.72% |
Other information of major suppliers
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
3. Cost
Unit: yuan
Create China’s new kitchen
2021 | 2020 | Year-on-year increase / decrease | Description of major changes | |
Selling expenses | 2,454,418,039.92 | 2,146,965,048.87 | 14.32% | N/A |
Management costs | 363,762,372.63 | 296,985,763.24 | 22.48% | N/A |
Financial expenses | -139,673,507.87 | -150,148,186.75 | -6.98% | N/A |
Research and development expenses | 366,026,666.34 | 303,347,555.81 | 20.66% | N/A |
4. R & D investment
R & D personnel of the Company
2021 | 2020 | Proportion of change | |
Number of R & D personnel (person) | 876 | 742 | 18.06% |
Proportion of R & D personnel | 17.95% | 16.09% | 1.86% |
Educational structure of R & D personnel | —— | —— | —— |
Bachelor | 652 | 542 | 20.30% |
Master | 130 | 106 | 22.64% |
Age composition of R & D personnel | —— | —— | —— |
Under 30 years old | 261 | 216 | 20.83% |
30~40 years old | 463 | 380 | 21.84% |
R & D investment of the Company
2021 | 2020 | Proportion of change | |
R & D investment amount (yuan) | 366,026,666.34 | 303,347,555.81 | 20.66% |
Proportion of R & D investment in operating revenue | 3.61% | 3.73% | -0.12% |
Capitalized amount of R & D investment (yuan) | 0.00 | 0.00 | 0.00% |
Proportion of capitalized R & D investment in R & D investment | 0.00% | 0.00% | 0.00% |
Reasons and effects of major changes in the composition of R & D personnel of the Company
□ Applicable √ Not applicable
Reasons for significant changes in the proportion of total R & D investment amount in operating revenue compared with the previousyear
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
□ Applicable √ Not applicable
Reasons for the great changes of R & D investment capitalization rate and description of its rationality
□ Applicable √ Not applicable
5. Cash flow
Unit: yuan
Create China’s new kitchen
Item
Item | 2021 | 2020 | Year-on-year increase / decrease |
Subtotal cash inflows from operating activities | 10,571,104,254.72 | 8,399,284,005.14 | 25.86% |
Subtotal cash outflows from operating activities | 9,205,727,035.39 | 6,861,984,046.43 | 34.16% |
Net cash flow from operating activities | 1,365,377,219.33 | 1,537,299,958.71 | -11.18% |
Subtotal cash inflows from investment activities | 2,774,993,853.52 | 1,649,618,287.44 | 68.22% |
Subtotal cash outflows from investment activities | 3,635,682,805.12 | 2,867,289,864.56 | 26.80% |
Net cash flow from investment activities | -860,688,951.60 | -1,217,671,577.12 | / |
Subtotal cash inflows from financing activities | 31,544,588.74 | 12,726,177.30 | 147.87% |
Subtotal cash outflows from financing activities | 701,527,338.97 | 474,512,025.00 | 47.84% |
Net cash flow from financing activities | -669,982,750.23 | -461,785,847.70 | / |
Net increase of cash and cash equivalents | -166,107,693.21 | -143,199,751.94 | / |
Description of main influencing factors of significant changes in relevant data on a year-on-year basis
√ Applicable □ Not applicable
1) Cash inflow from operating activities increased by 25.86% on a year-on-year basis, mainly due to the increase in the Company'sincome scale during the reporting period.
2) Cash outflow from operating activities increased by 34.16% on a year-on-year basis, mainly due to the increase in the cost ofpurchasing raw materials during the reporting period.
3) Cash inflows from investment activities increased by 68.22% on a year-on-year basis, mainly due to the increase in the amount of
financial products purchased during the reporting period.
4) Cash outflows from investment activities increased by 26.80% on a year-on-year basis, mainly due to the increase in constructionexpenses of Maoshan base, ROBAM Building and other projects during the reporting period.
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
5) Cash outflows from financing activities increased by 47.84% on a year-on-year basis, mainly due to the increase in theCompany's share repurchase expenditure during the reporting period.Reasons for significant difference between the net cash flow from operating activities of the Company and the net profit of thecurrent year in the reporting period
□ Applicable √ Not applicable
V. Non-main Business Analysis
□ Applicable √ Not applicable
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: yuan
Create China’s new kitchen
End of 2021 | Beginning of 2021 | Proportion change | |||
Amount | Proportion in total assets | Amount | Proportion in total assets | ||
Monetary capital | 3,802,201,346.55 | 27.34% | 3,921,052,700.31 | 31.48% | -4.14% |
Accounts receivable | 1,597,692,860.90 | 11.49% | 1,008,235,946.40 | 8.09% | 3.40% |
Inventory | 1,772,231,632.25 | 12.74% | 1,386,089,344.84 | 11.13% | 1.61% |
Investment properties | 11,085,896.07 | 0.08% | 2,591,001.84 | 0.02% | 0.06% |
Long-term equity investment | 5,405,129.91 | 0.04% | 3,452,769.59 | 0.03% | 0.01% |
Fixed assets | 1,179,306,020.01 | 8.48% | 824,978,354.71 | 6.62% | 1.86% |
Construction in progress | 454,643,364.82 | 3.27% | 463,424,647.46 | 3.72% | -0.45% |
Right-of-use assets | 29,902,954.22 | 0.22% | 15,374,577.46 | 0.12% | 0.10% |
Short-term borrowing | 29,616,655.41 | 0.21% | 6,076,177.30 | 0.05% | 0.16% |
Contract liabilities | 1,026,782,402.35 | 7.38% | 949,591,228.35 | 7.62% | -0.24% |
Lease liabilities | 26,177,034.29 | 0.19% | 14,705,038.35 | 0.12% | 0.07% |
The proportion of overseas assets is relatively high
□ Applicable √ Not applicable
2. Assets and liabilities measured with fair value
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
3. Limitation on the assets and rights as of the end of the reporting period
Use of restricted monetary funds
Create China’s new kitchenItem
Item | Year-end balance | Year-beginning balance |
Bill acceptance security deposit | 82,212,526.20 | 34,956,186.75 |
Total
Total | 82,212,526.20 | 34,956,186.75 |
VII. Analysis of Investment
1. Overall situation
□ Applicable √ Not applicable
2. Significant equity investments acquired during the reporting period
□ Applicable √ Not applicable
3. Significant ongoing non-equity investments during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Securities investments
□ Applicable √ Not applicable
The company had no securities investments in the reporting period.
(2) Derivatives investment
□ Applicable √ Not applicable
The company had no derivatives investments in the reporting period.
5. Use of funds raised
□ Applicable √ Not applicable
No funds raised are used in the reporting period.VIII. Sales of Major Assets and Equities
1. Sales of major assets
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
The company did not sell major assets in the reporting period.
2. Sales of major equities
□ Applicable √ Not applicable
IX. Analysis of Main Holding and Joint-stock Companies
□ Applicable √ Not applicable
During the reporting period, the Company has no information of important holding and joint-stock companies that should bedisclosed.X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
XI. Prospect of the Company's Future Development
1. Company development strategy (2020-2022)
Focus on cooking, focus on range hoods, expand the first category advantages, lead the second category, and steadily promote thethird category. Adhere to the spirit of hard-working vise entrepreneurship, take products and users as the core, create a competitiveadvantage of the enterprise. Continue to create a more "convenient, healthy and interesting" kitchen life for users, build a globalbrand and a century-old enterprise.I. Overall goal: build a global brand and a century-old enterprise.To be a world-class century-old leader of cooking innovation.II. Business goal:focus on cooking, focus on range hoods, expand the first category advantages, lead the second category, andsteadily promote the third category.The first category refers to the product group represented by range hoods. The second category refers to the electrified cookingproduct group represented by steam oven-oven. The third category refers to the water kitchen appliance product group represented bydishwashers.III. Core work: take products and users as the core, create a competitive advantage of the enterprise, and continue to create a more"convenient, healthy and interesting" kitchen life for users.The core of products focus on the leading product technology; users refer to the consumers who purchase and use kitchen products.At present, the kitchen appliance industry has gradually entered the era of stock game. With the acceleration of industry integration,products and user experience will become more and more important. Through technological innovation, expand the competitiveadvantages of products, increase the market share driven by products, pay attention to the user's cooking process and cookingenvironment, take improving the user's cooking experience as the starting point, make the products and user experience theCompany's competitive advantage, and continue to create a more "convenient, healthy and interesting" kitchen life for users.
2. Mission, vision and values of the Company
Mission: To render happiness of kitchen life for more families.Vision: To be a world-class century-old leader of cooking innovation.Values: Hard-working vise entrepreneurship.
3. In 2022, the Company's work policy is to "journey with dream, ride the momentum", consolidate the leading position of
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
traditional categories, achieve a comprehensive breakthrough in the second and third categories, accelerate the layout of newcategories and comprehensively lead the development of the industry.
4. Risk Factors
(1) Risk of real estate market fluctuation
The Company takes root in the kitchen, providing kitchen appliances including range hood, gas hob, steam oven-oven, dishwasher,integrated hob and other kitchen appliances categories. Its demand is closely related to kitchen decoration and has certain attributesof "decoration" and "furniture". At present, the main market is dominated by the demand for new houses, the proportion of renewaldemand is gradually increasing, and the product demand is greatly affected by the fluctuation of the real estate market. The Companyhas a strong ability to resist fluctuations by virtue of its market leadership, the fluctuation of the real estate market will still have acertain impact on the Company's operating performance. In addition, some private real estate enterprises have debt default oncommercial bills due to liquidity problems, which may lead to the uncollectible receivables of the Company's engineering business.
(2) Risk of raw material price fluctuation
The Company's main raw materials are stainless steel, cold-rolled sheet, copper, glass, etc. whose price fluctuation will directly affectthe Company's product costs, thus affecting the Company's profitability. The price of main raw materials rose sharply in 2021,bringing some pressure on the Company's operating performance.
(3) Risk of intensified market competition
In recent years, due to the tightening of the overall macro environment of the kitchen appliance industry, the continuous improvementof industry concentration, the increasing investment of comprehensive brands in the kitchen appliance market and the participation ofInternet brands, there is a risk of intensified market competition in the kitchen appliance industry, which will have a certain impact onthe Company's business performance.XII. Reception, Research, Communication, Interview and Other Activities During theReporting Period
√ Applicable □ Not applicable
Create China’s new kitchenReception time
Reception time | Reception place | Reception way | Type of received object | Basic information index of the survey |
January 6, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on January 6, 2021” in cninfo for received object and main communication content |
January 12, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on January 12-15, 2021” in cninfo for received object and main communication content |
March 04, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on March 4-5, 2021” in cninfo for received object and main communication content |
May 07, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on May 7, 2021” in cninfo for received object and main communication content |
May 19, 2021 | Multi-functional | Field survey | Organization | See the “Record Chart of Investor Relation Activities on |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenhall, Building 1 ofthe Company
hall, Building 1 of the Company | May 19, 2021” in cninfo for received object and main communication content | |||
June 29, 2021 | Conference room 2, Building 1 of the Company | Field survey | Organization | See the “Record Chart of Investor Relation Activities on June 29, 2021” in cninfo for received object and main communication content |
August 19, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on August 19, 2021” in cninfo for received object and main communication content |
August 24, 2021 | Company conference room | Field survey | Organization | See the “Record Chart of Investor Relation Activities on August 24, 2021” in cninfo for received object and main communication content |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 4 Corporate Governance
I. Basic State of Corporate GovernanceIn the reporting period, the Company constantly improved the corporate governance structure, established and improved internalmanagement and control systems, and continued to carry out in-depth corporate governance activities in strict accordance with theCompany law, Securities Law, Governance Guidelines for Listed Companies, Rules for Stock Listing of Shenzhen Stock Exchangeand relevant laws and regulations of China Securities Regulatory Commission to further regulate the Company operation andimprove the corporate government level. By the end of the reporting period, the actual situation of corporate governance conformedto the normative documents on listed corporate governance issued by China Securities Regulatory Commission.During the reporting period, the Company operated in strict accordance with national laws and regulations, Rules for Stock Listing ofShenzhen Stock Exchange and Guidelines on the Standardized Operation of Listed Companies on the Main Board, and performed itsobligations of information disclosure in a timely, complete, true, accurate and fair manner. The Company has not received therelevant documents of administrative supervision measures taken by the regulatory authorities.
(1) Shareholders and shareholders’ meeting
In strict accordance with the Rules of the Shareholders’ Meeting of Listed Companies and the Rules of Procedure of the Shareholders'Meeting, the Company shall convene the shareholders’ meeting to ensure that all shareholders, especially minority shareholders,enjoy equal status and fully exercise their rights.
(2) Company and controlling shareholders
The Company has independent business and operational independence and is independent from the controlling shareholders inbusiness, personnel, assets, institutions and finance. The Company's board of directors, the board of supervisors and internal organizeoperate independently. The controlling shareholders of the Company can strictly regulate their own behaviors, without directly orindirectly intervening in the Company's decision-making and business activities beyond the shareholders’ meeting.
(3) Directors and board of directors
The Company elects its directors in strict accordance with the recruiting procedures stipulated in the “Articles of Association”; all thedirectors of the Company can carry out their work in accordance with the “Rules of Procedure of the Board of Directors” and“Guidelines on the Behaviors of Directors of Listed Companies”, attend the board of directors and shareholders' meetings earnestly,actively participate in the training of relevant knowledge, and be familiar with relevant laws and regulations.
(4) Supervisors and Board of Supervisors
The Company shall appoint supervisors in strict accordance with the relevant provisions of the Company Law and Articles ofAssociation, and the number and composition of the board of supervisors shall meet the requirements of laws and regulations. Inaccordance with the requirements of the Rules of Procedure of the Board of Supervisors, the Company's supervisors can earnestlyperform their duties, effectively supervise the Company's major issues, related party transactions, financial condition, and the
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
performance of directors and managers, and express independent opinions.
(5) Performance Evaluation and Incentive and Restraint Mechanisms
The Company is gradually establishing a fair and transparent performance evaluation standard and incentive and restraint mechanismfor directors, supervisors and managers. The appointment of the Company's managers is open and transparent and conforms to theprovisions of laws and regulations.
(6) Information Disclosure and Transparency
The Company carries out information disclosure and investor relations management under the board secretary responsibility system;the Company performs the information disclosure procedure in strict accordance with the Measures for the Administration ofInformation Disclosure and discloses the information on the designated information disclosure media such as Securities Times, ChinaSecurities Journal, Securities Daily, Shanghai Securities News and cninfo in a true, accurate, complete and timely manner accordingto law; meanwhile, according to the requirements of the Measures for the Investor Relations Management, the Company standardizesinvestor reception procedures, receives visits and inquiries from shareholders, and ensures that all shareholders have equal access tothe Company information.
(7) Stakeholder
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the coordination andbalance of interests of the society, shareholders, the Company and employees, and jointly promotes the sustainable and steadydevelopment of the Company.
(8) Internal Audit System
The Company has established an internal audit system and set up an internal audit department. The board of directors has appointedthe person in charge of internal audit to effectively control the Company's daily operation and management, internal control systemand major issues of the Company. There is no significant difference between the actual situation of corporate governance and thenormative documentThere is no significant difference between the actual situation of corporate governance and the normative documents on listedcorporate governance issued by China Securities Regulatory Commission. There is no significant difference between the actualsituation of corporate governance and the laws, administrative regulations and the provisions on the listed corporate governanceissued by China Securities Regulatory Commission.
II. Independence of the Company Relative to the Controlling Shareholders and ActualControllers in Ensuring the Company's Assets, Personnel, Finance, Organization, Business,etc.The Company operates in strict accordance with the Company Law and Articles of Association, establishes and improves thecorporate governance structure, is completely separated from the controlling shareholders in terms of business, personnel, assets,institutions and finance, and has independent and complete business and independent operation capability.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
III. Horizontal Competition
□ Applicable √ Not applicable
IV. Information About the Annual General Meeting of Shareholders and ExtraordinaryGeneral Meeting of Shareholders Held During the Reporting Period
1. General meeting of shareholders during the reporting period
Create China’s new kitchenMeeting session
Meeting session | Meeting type | Investor participation proportion | Convening date | Date of disclosure | Meeting resolution |
First extraordinary general meeting of shareholders in 2021 | Extraordinary general meeting of shareholders | 65.72% | April 30, 2021 | May 6, 2021 | cninfo: The 1st Extraordinary General Meeting of Shareholders in 2021 |
Annual general meeting of shareholders in 2020 | Annual general meeting of shareholders | 65.90% | May 19, 2021 | May 20, 2021 | cninfo: The announcement of resolutions of annual general meeting of shareholders in 2020 |
The 2nd Extraordinary General Meeting of Shareholders in 2021 | Extraordinary general meeting of shareholders | 65.83% | August 23, 2021 | August 24, 2021 | cninfo: The 2nd Extraordinary General Meeting of Shareholders in 2021 |
2. The preferred shareholders with voting rights restored request an extraordinary general meeting of
shareholders
□ Applicable √ Not applicable
V. Directors, Supervisors and Senior Management
1. Basic information
Name | Position | Status of service | Gender | Age | Start date of tenure | End date of tenure | Number of shares held at the beginning of the period (shares) | Number of shares increased in current period (shares) | Number of shares decreased in current period (shares) | Number of shares held at the end of the period (shares) |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchen
RenJianhua
Ren Jianhua | Chairman | Incumbent | Male | 65 | August 18, 2020 | August 17, 2023 | 5,923,150 | 0 | 0 | 5,923,150 |
Ren Fujia | Deputy chairman, general manager | Incumbent | Male | 38 | August 18, 2020 | August 17, 2023 | 2,800,075 | 0 | 700,000 | 2,100,075 |
Zhao Jihong | Director | Incumbent | Male | 59 | August 18, 2020 | August 17, 2023 | 1,690,065 | 0 | 422,500 | 1,267,565 |
Ren Luozhong | Director | Incumbent | Male | 59 | August 18, 2020 | August 17, 2023 | 1,690,062 | 0 | 422,500 | 1,267,562 |
Wang Gang | Director, deputy general manager, secretary to the board of directors | Incumbent | Male | 46 | August 18, 2020 | August 17, 2023 | 576,750 | 0 | 0 | 576,750 |
Shen Guoliang | Director | Incumbent | Male | 56 | August 18, 2020 | August 17, 2023 | 1,524,264 | 0 | 381,000 | 1,143,264 |
Ma Guoxin | Independent director | Incumbent | Male | 68 | August 18, 2020 | August 17, 2022 | 0 | 0 | 0 | 0 |
He Yuanfu | Independent director | Incumbent | Male | 66 | August 18, 2020 | August 17, 2023 | 0 | 0 | 0 | 0 |
Chen Yuanzhi | Independent director | Incumbent | Male | 44 | August 18, 2020 | August 17, 2023 | 0 | 0 | 0 | 0 |
Zhang Linyong | Chairman of the board of supervisors | Incumbent | Male | 56 | August 18, 2020 | August 17, 2023 | 1,112,315 | 0 | 278,000 | 834,315 |
Tang Genquan | Employee supervisor | Incumbent | Male | 61 | August 18, 2020 | August 17, 2023 | 1,112,312 | 0 | 278,000 | 834,312 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchenZhangSongnian
Zhang Songnian | Supervisor | Incumbent | Male | 55 | August 18, 2020 | August 17, 2023 | 1,112,312 | 0 | 278,000 | 834,312 |
Zhang Huifen | Employee supervisor | Incumbent | Female | 43 | August 18, 2020 | August 17, 2023 | 0 | 0 | 0 | 0 |
Shen Yueming | Supervisor | Incumbent | Male | 62 | August 18, 2020 | August 17, 2023 | 53,875 | 0 | 0 | 53,875 |
Xia Zhiming | Deputy general manager | Incumbent | Male | 46 | August 18, 2020 | August 17, 2023 | 411,950 | 0 | 0 | 411,950 |
He Yadong | Deputy general manager | Incumbent | Male | 47 | August 18, 2020 | August 17, 2023 | 411,950 | 0 | 0 | 411,950 |
Zhang Guofu | Chief financial officer | Incumbent | Male | 52 | August 18, 2020 | August 17, 2023 | 411,950 | 0 | 0 | 411,950 |
Total | -- | -- | -- | -- | -- | -- | 18,831,030 | 0 | 2,760,000 | 16,071,030 |
During the reporting period, whether there was any resignation of directors and supervisors and dismissal of senior managers duringtheir term of office
□ Yes √ No
Change of directors, supervisors and senior management
□ Applicable √ Not applicable
2. Service status
Professional background, main work experience and main responsibilities currently in the Company of current directors, supervisorsand senior management of the Company
1. Resume of current directors
Mr. Ren Jianhua, Han nationality, born in August 1956, Chinese, without permanent residency abroad; junior high school education,member of Communist Party of China, economist. He began to work in 1978 and successively served as the supply and marketingsection chief and factory director of Yuhang Hongxing Hardware Factory, the chairman, general manager and Secretary of the Partybranch of Hangzhou ROBAM Industrial Group Co., Ltd., and the chairman and general manager of Hangzhou ROBAM HomeAppliances & Kitchen Sanitary Co., Ltd. He has won the titles of national model worker and outstanding member of CommunistParty of Zhejiang Province, and was elected as the deputy to the 8
th and 10thNational People's Congress of Zhejiang Province, deputyto the 11
th National People's Congress of Hangzhou City, the Party representative, deputy to the 12
thNational People's Congress ofHangzhou City, and the 12
thFengyun Zhejiang Merchants. At present, he is the chairman of Hangzhou ROBAM Appliances Co., Ltd.,ROBAM Industrial Group Co., Ltd., Hangzhou Nbond Nonwoven Co., Ltd., Hangzhou Guoguang Touring Commodity Co., Ltd.,Hangzhou Amblem Kitchenware Co., Ltd., the executive director and general manager of Hangzhou Mingqi Electric Co., Ltd., the
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
executive director and general manager of Hangzhou ROBAM Fuchuang Investment Management Co., Ltd., the deputy chairman ofGarden Hotel Hangzhou, the director of Zhejiang Hangzhou Yuhang Rural Commercial Bank Company Limited, HangzhouDongming Forest Park Co., Ltd., Zhejiang CFMOTO Power Co., Ltd, the executive director of Hangzhou Bonyee Daily NecessityTechnology Co., Ltd., the executive director and general manager of Hangzhou Jinchuang Investment Co., Ltd., the executive partnerof Hangzhou Jinnuochang Investment Management Partnership (Limited Partnership), deputy to the 13
thHangzhou MunicipalPeople's Congress.Mr. Ren Fujia, Han nationality, born in January 1983, Chinese, without permanent residency abroad; bachelor degree. He used to bethe product manager of marketing department and the deputy general manager of R & D center of Hangzhou ROBAM IndustrialGroup Co., Ltd., the deputy general manager of Hangzhou ROBAM Home Appliances & Kitchen Sanitary Co., Ltd.; now he is thedirector of Hangzhou Nbond Nonwoven Co., Ltd., the deputy chairman and general manager of Hangzhou ROBAM Appliances Co.,Ltd., the director of Hangzhou Amblem Kitchenware Co., Ltd., the director of De Dietrich Household Appliances Trading (Shanghai)Co., Ltd., and the deputy chairman of De Dietrich Trade (Shanghai) Co., Ltd.Mr. Zhao Jihong, Han nationality, born in December 1962, Chinese, without permanent residency abroad; master degree, senioreconomist; successively served as the chairman and general manager of Hubei Huangshi Jinye Group Co., Ltd, the deputy generalmanager and general manager of the marketing center of ROBAM Group, the deputy general manager and general manager of themarketing center of ROBAM Home Appliances, and the deputy general manager of the Company. He has successively won the titlesof national outstanding entrepreneur, outstanding Hangzhou merchant in the World, "Top 10 influential figures in China's kitchen andbathroom industry", "Top 10 personalities in China's home appliance industry", and twice won the Mondale · world economic manachievement award and was selected into the dictionary of Chinese experts and celebrities. At present, he is the director of theCompany, the director of uTransHub Technologies Co., Ltd., the director of De Dietrich Household Appliances Trading (Shanghai)Co., Ltd.; the director and general manager of Hangzhou ROBAM Appliances Co., Ltd., the director of Shengzhou Kinde IntelligentKitchen Electric Co., Ltd., and the chairman of Zhejiang Cooking Future Technology Co., Ltd.Mr. Ren Luozhong, Han nationality, born in August 1962, Chinese, without permanent residency abroad; EMBA, assistant economist.He began to work in 1982 and successively served as the operation director of Yuhang Hongxing Hardware Factory, the deputygeneral manager, general manager of the marketing center, general manager of the technology center and director of the firstproduction department of ROBAM Group, the director and deputy general manager of ROBAM Home Appliances, and the deputygeneral manager of the Company. At present, he is the director of the Company, the director of Hangzhou ROBAM Industrial GroupCo., Ltd., the president of Hangzhou Yuhang District ROBAM Charity Foundation.Mr. Wang Gang, Han nationality, born in October 1975, Chinese, without permanent residency abroad; master degree, EMBA ofChina Europe International Business School, member of Communist Party of China, certified public accountant, senior economist.He began to work in 1997 and successively served as an inspector of Haining Local Taxation Bureau of Zhejiang Province, the R &D director of Shanghai Realize Investment Consulting Co., Ltd., the secretary of the board of directors, director of human resources,general manager assistant of Shanghai Hailong Software Co., Ltd, and the secretary of the board of directors of Hangzhou ROBAMHome Appliances & Kitchen Sanitary Co., Ltd. At present, he is the director, secretary of the board of directors, deputy generalmanager of the Company, the director of Hangzhou Nbond Nonwoven Co., Ltd., the director of Shengzhou Kinde Intelligent KitchenElectric Co., Ltd., the director of De Dietrich Household Appliances Trading (Shanghai) Co., Ltd., the director of De Dietrich Trade(Shanghai) Co., Ltd., the supervisor of Hangzhou ROBAM Fuchuang Investment Management Co., Ltd., the director of HangzhouGuoguang Touring Commodity Co., Ltd., the director of Hangzhou Zhu Bingren Culture and Art Co., Ltd., the director of HangzhouFortune Gas Cryogenic Group Co., Ltd., the director of Versolsolar Hangzhou Co., Ltd., the director of Hangzhou Wheeler GeneralMachinery Co., Ltd., the independent director of Hangzhou Great Star Industrial Co., Ltd., the independent director of HangzhouXiaodian Technology Co., Ltd., and the supervisor of Shanghai MXCHIP Information Technology Co., Ltd.Mr. Shen Guoliang, Han nationality, born in November 1965, Chinese, without permanent residency abroad; high school education.He began to work in 1982 and successively served as the chief of the transportation section of Yuhang Hongxing Hardware Factory,
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
the director, chief financial officer and the deputy general manager of the marketing center of ROBAM Group, the director ofROBAM Home Appliances, and the chairman of the board of supervisors of the Company. At present, he is the director of theCompany, the deputy chairman of Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd., the director of Zhejiang Cooking FutureTechnology Co., Ltd., the supervisor of Hangzhou Amblem Kitchenware Co., Ltd., and the supervisor of Beijing ROBAM ElectricAppliance Sales Co., Ltd.Mr. Ma Guoxin, Han nationality, born in September 1953, Chinese, without permanent residency abroad; member of CommunistParty of China, bachelor degree. He began to work in 1970 and successively served as the office director of the Company (Partycommittee), deputy manager (and secretary) of the sales company of Hangzhou Medical Equipment Factory (later changed intoHangzhou Refrigerator General Factory, Hangzhou Xiling Electrical Appliance Group Co., Ltd.), the director of household applianceindustry management department and deputy secretary general of Zhejiang Household Appliance Association. At present, he is thesecretary general and vice president of Zhejiang Household Appliance Association; the independent director of AUPU Home StyleCorporation Limited and the Company.Mr. He Yuanfu, Han nationality, born in March 1955, bachelor degree, Chinese, without permanent residency abroad; professor-levelsenior accountant, certified public accountant, retired in January 2012. At present, he is the independent director of the Company, theindependent director of Zhejiang Yilida Ventilator Co., Ltd., the independent director of Sichuan Langsha Holding Ltd., theindependent director of CertusNet Information Co., Ltd., and the independent director of Zhejiang Ruirentang Pharmaceutical ChainCo., Ltd. He used to be the chief member of the accounting management office of Zhejiang Provincial Department of Finance, theSecretary General of Zhejiang Institute of Certified Public Accountants, the director of Zhejiang Financial Cadre Education Center,and the vice president of Zhejiang Zhonghua Accounting Correspondence School.Mr. Chen Yuanzhi, Han nationality, born in November 1977, Chinese, member of Communist Party of China, doctor degree inmanagement, is now the independent director of the Company, a professor of China Executive Leadership Academy Pudong, anadjunct professor of East China Normal University, a part-time researcher at the Research Center of Technological Innovation,Tsinghua University, the executive director of China Soft Science Research Society, a member of the Chinese Institute of BusinessAdministration (Special Committee for Future Analysis and Management of Emerging Technologies), and an expert of ShanghaiScience and Technology Expert Database.
2. Resume of current supervisors
Mr. Zhang Linyong, Han nationality, born in August 1965, Chinese, without permanent residency abroad; high school education,member of Communist Party of China, assistant economist. He began to work in 1984 and successively served as the office directorof Yuhang Hongxing Hardware Factory, the general manager of Hangzhou Huafa Electric Appliance Co., Ltd., the director anddirector of the engineering department of ROBAM Group, and the director of ROBAM Home Appliances. At present, he is thechairman of the board of supervisors of the Company, the director of Hangzhou ROBAM Industrial Group Co., Ltd.Mr. Tang Genquan, Han nationality, born in October 1960, Chinese, without permanent residency abroad; college degree, engineer.He began to work in 1979 and successively served as the mould workshop director and technical director of Yuhang HongxingHardware Factory, the deputy general manager of technology, general manager of production quality and director of the thirdproduction department of ROBAM Group, the director of ROBAM Home Appliances. In 1993-1994 and 2005-2006, he was awardedas the outstanding scientific and technological worker of Hangzhou. In 2004, he was selected into the "new century talent project 139youth talent cultivation candidate list", applied for 1 national invention patent, 7 utility model patents and 10 design patents. He hasbeen employed as a member of China daily hardware industry expert committee since 1996 and the deputy secretary general of fifthChina daily hardware industry expert committee since 2006. At present, he is the employee representative supervisor of the Company,the director of Hangzhou ROBAM Industrial Group Co., Ltd., the supervisor of Hangzhou Yuhang ROBAM Gas Station Co., Ltd.,and the secretary general of Hangzhou Yuhang District ROBAM Charity Foundation.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Mr. Zhang Songnian, Han nationality, born in September 1966, Chinese, without permanent residency abroad; high school education.He began to work in 1983 and successively served as the production section chief of Yuhang Hongxing Hardware Factory, the deputygeneral manager of Hangzhou Huafa Electric Appliance Co., Ltd., the director, deputy director of production department, director ofthe second production department and general manager of product R & D center of ROBAM Group, and the supervisor of ROBAMHome Appliances. At present, he is the supervisor of the Company, the director of Hangzhou ROBAM Industrial Group Co., Ltd.Ms. Zhang Huifen, Han nationality, born in October 1977, Chinese, without permanent residency abroad; college degree, junioreconomist, junior accountant. She began to work in 1997 and successively served as the employee of Hangzhou Gaobo ElectronicCo., Ltd., the employee of punching machine third workshop, member of audit department of marketing center and office clerk offinancial center of ROBAM Group. At present, he is the employee representative supervisor of the Company.Mr. Shen Yueming, Han nationality, born in November 1959, Chinese, without permanent residency abroad; high school education.He began to work in 1978 and successively served as the factory director of Tingzhi Food Factory of Yuhang Supply and MarketingCooperative, the production section director of Hangzhou Huafa Electric Appliance Co., Ltd., and the general manager of BeijingROBAM Electric Appliance Sales Co., Ltd. At present, he is the supervisor of the Company.
3. Resume of current senior management
Mr. Ren Fujia is the general manager of the Company; Mr. Wang Gang is the deputy general manager of the Company. Please refer tothe resume of the directors of the Company for the introduction.Mr. Xia Zhiming, Han nationality, born in May 1975, Chinese, without permanent residency abroad; college degree. He began towork in 1996 and successively served as the production section chief of Qiaori Electric Products Factory, the manufacturing directorof Foxconn Technology Co., Ltd. and the production director of the Company's production center. At present, he is the deputy generalmanager of the Company.Mr. He Yadong, Han nationality, born in August 1974, Chinese, without permanent residency abroad; bachelor degree, senioreconomist. He began to work in 2000 and successively served as the marketing section chief, director of marketing department anddeputy general manager of marketing center of ROBAM Group, the assistant to general manager of ROBAM Home Appliances, anddirector of the Company. At present, he is the deputy general manager of the Company.Mr. Zhang Guofu, Han nationality, born in December 1969, Chinese, without permanent residency abroad; bachelor degree. Hebegan to work in 1990 and successively served as the capital section chief, director of financial center of Hangzhou ROBAMIndustrial Group Co., Ltd., and financial chief of Hangzhou ROBAM Home Appliances & Kitchen Sanitary Co., Ltd. At present, heis the Chief financial officer of the Company, the chairman of the board of supervisors of Hangzhou Nbond Nonwoven Co., Ltd., thesupervisor of Hangzhou Mingqi Electric Co., Ltd., the supervisor of De Dietrich Household Appliances Trading (Shanghai) Co., Ltd.,the director of Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd., and the director of De Dietrich Trade (Shanghai) Co., Ltd.Service status in the shareholder unit
√ Applicable □ Not applicable
Create China’s new kitchenName of staff
Name of staff | Shareholder unit name | Position held in shareholder unit | Whether to receive remuneration or allowance in the shareholder unit |
Ren Jianhua | Hangzhou ROBAM Industrial Group Co., Ltd. | Chairman | No |
Hangzhou Jinchuang Investment Co., Ltd. | Executive director | No |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenRen Luozhong
Ren Luozhong | Hangzhou ROBAM Industrial Group Co., Ltd. | Deputy chairman | No |
Zhao Jihong | Hangzhou ROBAM Industrial Group Co., Ltd. | Director, general manager | No |
Shen Guoliang | Hangzhou ROBAM Industrial Group Co., Ltd. | Director | No |
Zhang Linyong | Hangzhou ROBAM Industrial Group Co., Ltd. | Director | No |
Tang Genquan | Hangzhou ROBAM Industrial Group Co., Ltd. | Director | No |
Zhang Songnian | Hangzhou ROBAM Industrial Group Co., Ltd. | Director | No |
Description of service status in the shareholder unit | N/A |
Service status in other unit
√ Applicable □ Not applicable
Name of staff | Other unit name | Position held in other unit | Whether to receive remuneration or allowance in other unit |
Ren Jianhua | Hangzhou Amblem Kitchenware Co., Ltd. | Chairman | No |
Garden Hotel Hangzhou | Deputy chairman | No | |
Hangzhou Dongming Forest Park Co., Ltd. | Director | No | |
Hangzhou Nbond Nonwoven Co., Ltd. | Chairman | No | |
Zhejiang Hangzhou Yuhang Rural Commercial Bank Company Limited | Director | No | |
Hangzhou Yuhang ROBAM Gas Station Co., Ltd. | Chairman | No | |
Hangzhou Jinnuochang Investment Management Partnership (Limited Partnership) | Executive partner | No | |
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Executive director | No | |
Zhejiang CFMOTO Power Co., Ltd | Director | No | |
Hangzhou Mingqi Electric Co., Ltd. | Executive director and general manager | No | |
Ren Fujia | De Dietrich Trade (Shanghai) Co., Ltd. | Deputy chairman | No |
Hangzhou Amblem Kitchenware Co., Ltd. | Director | No | |
Hangzhou Nbond Nonwoven Co., Ltd. | Director | No | |
Zhao Jihong | Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | Chairman | No |
uTransHub Technologies Co., Ltd. | Director | No |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenDe Dietrich Household Appliances Trading (Shanghai) Co.,Ltd.
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Director | No | |
Zhejiang Cooking Future Technology Co., Ltd. | Chairman | No | |
Ren Luozhong | Hangzhou Amblem Kitchenware Co., Ltd. | Director | No |
Shen Guoliang | Hangzhou Amblem Kitchenware Co., Ltd. | Supervisor | No |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | Director | No | |
Beijing ROBAM Electric Appliance Sales Co., Ltd. | Supervisor | No | |
Zhejiang Cooking Future Technology Co., Ltd. | Director | No | |
Ma Guoxin | Zhejiang Household Appliances Association | Secretary general, vice president | Yes |
AUPU Home Style Corporation Limited | Independent director | Yes | |
He Yuanfu | Sichuan Langsha Holding Ltd. | Independent director | Yes |
CertusNet Information Co., Ltd. | Independent director | Yes | |
Zhejiang Ruirentang Pharmaceutical Chain Co., Ltd. | Independent director | Yes | |
Zhejiang Yilida Ventilator Co., Ltd. | Independent director | Yes | |
Chen Yuanzhi | China Executive Leadership Academy Pudong | Professor | Yes |
Research Center of Technological Innovation, Tsinghua University | Researcher | No | |
Wang Gang | Hangzhou Zhu Bingren Culture and Art Co., Ltd. | Director | No |
Hangzhou ROBAM Fuchuang Investment Management Co., Ltd. | Supervisor | No | |
Shanghai MXCHIP Information Technology Co., Ltd. | Supervisor | No | |
Hangzhou Great Star Industrial Co., Ltd. | Independent director | Yes | |
Hangzhou Xiaodian Technology Co., Ltd. | Independent director | Yes | |
Hangzhou Fortune Gas Cryogenic Group Co., Ltd. | Director | No | |
Versolsolar Hangzhou Co., Ltd. | Director | No | |
Hangzhou Nbond Nonwoven Co., Ltd. | Director | No | |
De Dietrich Trade (Shanghai) Co., Ltd. | Director | No | |
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Director | No | |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | Director | No | |
Hangzhou Wheeler General Machinery Co., Ltd. | Director | No | |
Hangzhou Guoguang Touring Commodity Co., Ltd. | Director | No | |
Zhang Guofu | De Dietrich Trade (Shanghai) Co., Ltd. | Director | No |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenDe Dietrich Household Appliances Trading (Shanghai) Co.,Ltd.
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Supervisor | No |
Hangzhou Mingqi Electric Co., Ltd. | Supervisor | No |
Hangzhou Nbond Nonwoven Co., Ltd. | Chairman of the board of supervisors | No |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | Director | No |
Punishment of current directors, supervisors and senior management of the Company and those who left during the reporting periodby securities regulators in recent three years
□ Applicable √ Not applicable
4. Remuneration of Directors, Supervisors and Senior Management
Decision making procedures, determination basis and actual payment of remuneration of directors, supervisors and seniormanagementThe Company has established a sound performance appraisal system and salary system for senior management, whose workperformance is directly linked to their income. The remuneration and appraisal committee of the board of directors is responsible forthe year-end assessment of the working ability, performance of duties, completion of responsibility objectives, etc. of the seniormanagement, and preparing the remuneration plan and submitting it to the board of directors of the Company for approval. Theremuneration of directors, supervisors and senior management shall be paid on time.Remuneration of directors, supervisors and senior management during the reporting period
Unit: yuan
Name | Position | Gender | Age | Status of service | Total pretax remuneration received from the Company | Whether to get remuneration from related parties of the Company |
Ren Jianhua | Chairman | Male | 65 | Incumbent | 876,643.59 | No |
Ren Fujia | Deputy chairman, general manager | Male | 38 | Incumbent | 1,063,534.1 | No |
Ren Luozhong | Director | Male | 59 | Incumbent | 820,152.95 | No |
Zhao Jihong | Director | Male | 59 | Incumbent | 848,398.27 | No |
Wang Gang | Director, secretary and deputy general manager | Male | 46 | Incumbent | 888,338.11 | No |
Shen Guoliang | Director | Male | 56 | Incumbent | 735,416.99 | No |
Ma Guoxin | Independent director | Male | 68 | Incumbent | 95,238 | No |
He Yuanfu | Independent director | Male | 66 | Incumbent | 95,238 | No |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenChen Yuanzhi
Chen Yuanzhi | Independent director | Male | 44 | Incumbent | 95,238 | No |
Zhang Linyong | Chairman of the board of supervisors | Male | 56 | Incumbent | 678,926.35 | No |
Tang Genquan | Supervisor | Male | 61 | Incumbent | 832,000.53 | No |
Zhang Songnian | Supervisor | Male | 55 | Incumbent | 678,926.35 | No |
Zhang Huifen | Supervisor | Male | 43 | Incumbent | 140,770.33 | No |
Shen Yueming | Supervisor | Male | 62 | Incumbent | 285,698.1 | No |
He Yadong | Deputy general manager | Male | 47 | Incumbent | 1,322,446.46 | No |
Xia Zhiming | Deputy general manager | Male | 46 | Incumbent | 988,200.06 | No |
Zhang Guofu | Chief financial officer | Male | 52 | Incumbent | 905,452.14 | No |
Total | -- | -- | -- | -- | 11,350,618.33 | -- |
VI. Performance of Duties by Directors During the Reporting Period
1. Board of Directors during this reporting period
Meeting session | Convening date | Date of disclosure | Meeting resolution |
The 4th Meeting of the Fifth Board of Directors | April 14, 2021 | April 15, 2021 | cninfo: The announcement of resolutions of the 4th Meeting of the Fifth Board of Directors |
The 5th Meeting of the Fifth Board of Directors | April 27, 2021 | April 28, 2021 | cninfo: The announcement of resolutions of the 5th Meeting of the Fifth Board of Directors |
The 6th Meeting of the Fifth Board of Directors | May 10, 2021 | May 11, 2021 | cninfo: The announcement of resolutions of the 6th Meeting of the Fifth Board of Directors |
The 7th Meeting of the Fifth Board of Directors | August 3, 2021 | August 4, 2021 | cninfo: The announcement of resolutions of the 7th Meeting of the Fifth Board of Directors |
The 8th Meeting of the Fifth Board of Directors | October 19, 2021 | October 20, 2021 | cninfo: The announcement of resolutions of the 8th Meeting of the Fifth Board of Directors |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
2. Attendance of directors at the board meetings and the general meeting of shareholders
Create China’s new kitchenAttendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders | |||||||
Name of director | Number of board meetings to be attended during this reporting period | Number of board meetings attended on site | Number of board meetings attended by correspondence | Number of board meetings delegated to attend | Number of board meetings absent | Whether not to personally attend the board meeting for two consecutive times | Number of shareholders' meetings attended |
Ren Jianhua | 5 | 4 | 1 | 0 | 0 | No | 3 |
Ren Fujia | 5 | 4 | 1 | 0 | 0 | No | 3 |
Ren Luozhong | 5 | 4 | 1 | 0 | 0 | No | 3 |
Zhao Jihong | 5 | 4 | 1 | 0 | 0 | No | 1 |
Wang Gang | 5 | 4 | 1 | 0 | 0 | No | 3 |
Shen Guoliang | 5 | 4 | 1 | 0 | 0 | No | 3 |
Ma Guoxin | 5 | 4 | 1 | 0 | 0 | No | 3 |
He Yuanfu | 5 | 3 | 2 | 0 | 0 | No | 3 |
Chen Yuanzhi | 5 | 2 | 3 | 0 | 0 | No | 3 |
Description on failure to personally attend the board meeting for two consecutive times
3. Objections made by directors on relevant matters
Whether the director raises any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other description on the performance of duties by the directors
Whether the relevant suggestions of the director to the Company have been adopted
□ Yes √ No
Explanation of the relevant suggestions of the director to the Company have or have not been adoptedN/AVII. Special Committees under the Board of Directors During the Reporting Period
Name of committee | Member | Number of | Convening date | Meeting content |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenmeetings
held
meetings held | ||||
Audit committee | He Yuanfu, Chen Yuanzhi, Ren Luozhong | 4 | January 8, 2021 | 1. Review the “2020 Audit Work Plan of the Company” |
April 27, 2021 | 1. Review the “2020 Audit Report of the Company” 2. Review the “2020 Internal Control Self-evaluation Report of the Company” 3. Review of the “First Quarter Report of the Company in 2021” 4. Proposal on Further Appointment of the Company's Audit Institution in 2021” | |||
August 3, 2021 | 1. Review the “2021 Semiannual Report of the Company” | |||
October 19, 2021 | 1. Review the “Third Quarter Report of the Company in 2021” | |||
Remuneration and assessment committee | Ren Fujia, Ma Guoxin, Chen Yuanzhi | 2 | January 20, 2021 | 1. “Proposal on Performance Appraisal of Senior Managers in 2020” |
April 14, 2021 | 1. “2021 Stock Option Incentive Plan (Draft) of the Company” and its Abstract; 2. “Management Measures for Implementation and Assessment of 2021 Stock Option Incentive Plan (Draft) of the Company”; 3. “Shareholding Plan of Business Partners of the Company (Draft)” and its Abstract; 4. “Management Measures for Implementation and Assessment of Shareholding Plan of Business Partners of the Company” |
VIII. Work of Board of SupervisorsWhether the board of supervisors find any risk of the Company in the supervision activities during the reporting period
□ Yes √ No
The board of supervisors has no objection to the supervisory matters during the reporting period.IX. Company Employees
1. Number of employees, professional composition and education background
Number of employees in the parent company at the end of the reporting period (person) | 3,009 |
Number of employees in major subsidiaries at the end of the reporting period (person) | 1,870 |
Total number of employees at the end of the reporting period (person) | 4,879 |
Total number of employees receiving salary in the current period (person) | 4,944 |
Number of retired employees whose expenses need to be borne by the parent company and major subsidiaries (person) | 65 |
Professional composition | |
Professional composition categories | Number of professionals (person) |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenProduction personnel
Production personnel | 1,323 |
Sales personnel | 1,768 |
Technical personnel | 876 |
Financial personnel | 173 |
Administrative personnel | 759 |
Total | 4,879 |
Education background | |
Education background categories | Number (person) |
Doctor | 8 |
Master | 155 |
Bachelor | 1,310 |
College | 1,039 |
Other | 2,367 |
Total | 4,879 |
2. Pay policy
The company has formulated "Salary Management Standards" and "Performance Management Standards", and established a salarymanagement system based on the post value and centered on the competency and performance evaluation of employees, according tothe salary status of the regional market and industry.
3. Training plan
In 2021, the Company carried out various trainings, including Lemon, Blue Whale, Sunflower, Ivy League and other projects as wellas the Elite Plan; As the Company's own mobile learning online platform, Chestnut School played an important role in theachievement transformation of the development course of internal trainer, and the Company's employees' participation in learning hasbeen greatly improved. A series of activities such as the vice platform and super open class enrich the vision of employees andimproves their abilities.
4. Labor outsourcing
√ Applicable □ Not applicable
Total hours of labor outsourcing (hours) | 2,811,411 |
Total remuneration paid for labor outsourcing (yuan) | 110,198,689.54 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
X. Profit Distribution and Share Capital Increase from Capital Surplus
Profit distribution policy during the reporting period, especially the formulation, implementation or adjustment of cash dividendpolicy
√ Applicable □ Not applicable
Create China’s new kitchenDescription for cash dividend policy
Description for cash dividend policy | |
Does it meet the requirements of the Company’s articles of association and of the resolutions of shareholders’ meeting? | Yes |
Is the dividend distribution standard and proportion specific and clear? | Yes |
Are relevant decision-making procedures and mechanisms complete? | Yes |
Have the independent directors performed their duties and fulfilled their due roles? | Yes |
Do the minor shareholders have the chance to fully express their opinions and demands, and are their legal rights and interests fully protected? | Yes |
Are the conditions and procedures normative and transparent in case of adjustments or changes of the cash dividend policy? | Yes |
The Company made profits during the reporting period and the profits available for distribution to shareholders of the parentcompany were positive, but no proposal for the distribution of cash dividend was put forward
□ Applicable √ Not applicable
Profit distribution and share capital increase from capital surplus during the reporting period
√ Applicable □ Not applicable
Amount of cash dividend in other forms (e.g. share repurchase) (yuan) | 0.00 |
Amount of cash dividend (including other forms) (yuan) | 472,047,458.00 |
Ratio of total amount of cash dividend (including other forms) to total amount of distributable profit | 100% |
Cash dividend distribution in this period | |
Should the Company be in a growing stage and have major capital expenditure arrangements, the cash dividend should account for a minimum of 20% of the profit distribution when the profit is distributed. | |
Description for details of profit distribution or share capital increase from capital surplus plan | |
According to the standard unqualified audit report issued by ShineWing Certified Public Accountants, the Company’s net profit attributable to the parent company owner in 2021 was RMB 1,324,141,354.33 yuan (number of parent company), plus the undistributed profit of RMB 6,120,603,639.69 yuan at the beginning of the year, minus the cash dividend of profit distribution of 2020, i.e., RMB 473,435,158.00 yuan, the Company's profit available to shareholders at the end of 2021 was RMB 6,971,309,836.02 yuan. Taking 944,094,916 shares as the radix (the existing total capital stock of 949,024,050 shares, excluding 4,929,134 shares repurchased), the Company distributed cash dividends of 5 yuan (tax inclusive) for every 10 shares to all shareholders, |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
amounting up to a total of RMB 472,047,458.00 yuan.In case of any change due to the listing of new shares, the exercising of equity incentive, the conversion of convertible bonds intoshares, share repurchase, etc. during the period from the disclosure of the distribution plan to the equity registration date whenthe profit distribution is implemented, the distribution proportion will be adjusted accordingly according to the principle that thetotal amount of cash dividends will remain unchanged.
XI. Implementation of the Company's Equity Incentive Plan, Employee Stock OwnershipPlan or Other Employee Incentive Measures
√ Applicable □ Not applicable
1. Equity incentive
I. 2021 stock option incentive plan
1. On April 14, 2021, the Company held the 4
thmeeting of the fifth board of directors, deliberated and adopted the “Proposal on2021 Stock Option Incentive Plan (Draft) of the Company and its Abstract” and other relevant proposals, and the independentdirectors expressed their agreed independent opinions on the matters related to the Company's stock option incentive plan. The
thmeeting of the fifth board of supervisors of the Company deliberated and adopted the above-mentioned relevant proposalsand expressed their consent. The Company disclosed the above matters on April 15, 2021.
2. From April 15, 2021 to April 24, 2021, the Company publicized the names and positions of the incentive objects of the stockoption incentive plan through internal posting. On April 27, 2021, the board of supervisors of the Company issued the “ReviewOpinions and Announcement of the Board of Supervisors on the List of Incentive Objects of the 2021 Stock Option IncentivePlan”. On the same day, the Company disclosed the “Self-inspection Report on Insiders’ and Incentive Objects’ Trading ofCompany Stock with Inside Information of 2021 Restricted Stock Incentive Plan”.
3. On April 30, 2021, the Company held the first extraordinary general meeting of shareholders in 2021, deliberated and adopted
the “Proposal on 2021 Stock Option Incentive Plan (Draft) of the Company and its Abstract” and other relevant proposals. Theplan was approved by the first extraordinary general meeting of shareholders in 2021, and the board of directors was authorizedto determine the grant date of stock option, grant stock option to incentive objects when they meet the conditions and handle allmatters necessary for granting equity.
4. On May 10, 2021, the Company’s 6
th meeting of the fifth Board of Directors and the 6
th
meeting of the fifth Board ofSupervisors reviewed and adopted the “Proposal on Granting Stock Options to Incentive Objects”. The board of supervisorsonce again verified the list of incentive objects granted and expressed their consent. The independent directors of the Companyexpressed their independent opinions on this.II. Business Partner Shareholding PlanOn April 14, 2021, the Company held the 4
th meeting of the fifth board of directors and the 4
th
meeting of the fifth board ofsupervisors, and deliberated and adopted the “Business Partner Shareholding Plan of Hangzhou ROBAM Appliances Co.,Ltd.(Draft).”Evaluation mechanism and incentive of senior managersplease refer to relevant chapters of the “Business Partner Shareholding Plan of Hangzhou ROBAM Appliances Co., Ltd.(Draft)” fordetails.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
2. Implementation of the employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentives
□ Applicable √ Not applicable
XII. Construction and Implementation of Internal Control System During the ReportingPeriod
1. Construction and implementation of internal control
See the “2021 Internal Control Self-evaluation Report” disclosed by the Company on the designated information disclosure websitehttp://www.cninfo.com.cn for details.
2. Details of significant internal control defects discovered during the reporting period
□ Yes √ No
XIII. Management and Control of Subsidiaries During the Reporting Period
Appoint directors or senior managers to hold regular business and financial meetings every month according to the Company'sdevelopment and business objectives specified in the annual budget planning meeting, and timely review and follow up theimplementation of the subsidiaries’ business plans and the completion of various performance evaluation indicators. According to therequirements of the Company's “Information Disclosure Management System”, each subsidiary shall timely report relevantinformation on major business / financial matters to the headquarters of the listed company, give timely feedback on the progress orchanges of major matters, and perform the approval procedures of the board of directors and the general meeting of shareholderswhen necessary.XIV. Internal Control Self-evaluation Report or Internal Control Audit Report
1. Internal control self-evaluation report
Create China’s new kitchen
Full disclosure date of internal controlself-evaluation report
Full disclosure date of internal control self-evaluation report | April 20, 2022 |
Index of full disclosure of internal control evaluation report | cninfo: Full text of internal control evaluation report of ROBAM |
Proportion of the total assets of the unit included in the evaluation scope to the total assets of the consolidated financial statement of the Company | 100.00% |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchenProportion of operating income of theunit included in the evaluation scope tothe operating income of the consolidatedfinancial statement of the Company
Proportion of operating income of the unit included in the evaluation scope to the operating income of the consolidated financial statement of the Company | 100.00% | |
Defect identification standard | ||
Category | Financial report | Non-financial report |
Qualitative standard | Signs of major defects in the financial report include: 1) Corrupt practice of directors, supervisors and senior management; 2) Misstatement correction of material errors in financial reports that have been announced by the Company; 3) Material misstatement in the current financial report, which is not found by the internal control in the process of operation; 4) Ineffective control and supervision of the Company’s external and internal financial reports by the audit committee and audit department. Signs of important defects in the financial report include: 1) Failure to select and apply accounting policies in accordance with generally accepted accounting principles; 2) No anti-fraud procedures and control measures have been established; 3) There is no corresponding control mechanism established or no implementation of and no corresponding compensatory control for the accounting treatment of non-routine or special transactions; 4) One or more defects in the control of the final financial reporting process and no reasonable assurance that the financial statements will achieve the objective of authenticity and completeness. Common defects refer | 1) The defects in non-financial reports are mainly determined according to the influence of the defects on the business process effectiveness and the possibility of occurrence; 2) The defects with low possibility that will reduce the work efficiency or effect, or increase the uncertainty of the effect, or make it deviate from the expected goal are common defects; 3) The defects with high possibility that will significantly reduce the work efficiency or effect, or significantly increase the uncertainty of the effect, or make it significantly deviate from the expected goal are important defects; 4) The defects with high possibility that will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal are major defects. |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchento control defects other than themajor defects and important defectsmentioned above.
to control defects other than the major defects and important defects mentioned above. | ||
Quantitation standard | The quantitative standard takes the operating income and the total assets as the measurement index. 1) The internal control defects that may cause losses or whose losses are related to the income statement are measured on the basis of operating income: Common defect: misstatement amount < 1% of operating income; Important defect: 1% of operating income < misstatement amount < 2% of operating income; Major defect: misstatement amount > 2% of operating income 2) The internal control defects that may cause losses or whose losses are related to the assets management are measured on the basis of total assets: Common defect: misstatement amount < 0.5% of total assets; Important defect: 0.5% of total assets < misstatement amount < 1% of total assets; Major defect: misstatement amount >1% of total assets | Common defect: direct property loss < RMB 5 million; Important defect: RMB 5 million < direct property loss < RMB 20 million; Major defect: direct property loss >RMB 20 million. |
Number of major defects in financial reports | 0 | |
Number of major defects in non-financial reports | 0 | |
Number of important defects in financial reports | 0 | |
Number of important defects in non-financial reports | 0 |
2. Internal control audit report
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
XV. Rectification of Problems in Self-inspection of Special Actions for Governance of ListedCompaniesAccording to the requirements of the regulatory authorities, the Company has carried out a four-month special self-inspection on thegovernance of listed companies since December 17, 2020. This special self-inspection has comprehensively reviewed the corporategovernance in seven aspects: the basic situation of listed companies, the operation and decision-making of organizations, thecontrolling shareholders, actual controllers and related parties, the construction of internal control standard system, informationdisclosure and transparency, and institutions / foreign investors; find problems and deficiencies according to the regulatory rules, theArticles of Association and other normative documents, take the special self-inspection activity as an opportunity to improve thegovernance level and safeguard the interests of investors. Through such self-inspection, the Company does not violate the provisionsof the state and the CSRC. The corporate governance level meets the requirements of laws and regulations such as the Company Law,the Securities Law, the Guidelines for Standard Operation of Listed Companies of Shenzhen Stock Exchange and the Guidelines forArticles of Association of Listed Companies, and the Company’s governance structure is relatively perfect and its operation isstandardized. The Company will continue to sort out and update the issued internal control system of the Company in a timelymanner in accordance with the existing laws and regulations, and constantly establish and improve the internal control system of theCompany to make it play a real and effective role.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 5 Environmental and Social Responsibility
I. Major Environmental Issues
Whether the listed company and its subsidiaries are key pollutant discharging units announced by environmental protectionauthorities
□ Yes √ No
Measures taken to reduce carbon emissions during the reporting period and relevant effects
□ Applicable √ Not applicable
Reasons for non-disclosure of other environmental informationN/A
II. Social ResponsibilitySee the “2021 Environmental, Social and Corporate Governance Report” disclosed by the Company on the designated informationdisclosure media http://www.cninfo.com.cn for details.
III. Consolidate and Expand the Achievements of Poverty Alleviation and RuralRevitalizationN/A
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Section 6 Important MattersI. Performance in Fulfilling Commitments
1. Commitments fulfilled within and not fulfilled by the end of the reporting period by the Company’s
actual controller, shareholders, related parties, acquirer and other commitment parties
√ Applicable □ Not applicable
Create China’s new kitchenCommitme
nt reason
Commitment reason | Commitment party | Commitment type | Commitment content | Commitment time | Time limit for acceptance | Degree of performance |
Commitment made at the time of IPO or refinancing | Directors, supervisors and senior management directly or indirectly holding shares of the Company | Commitment to restriction on sales of shares | After the expiry of the 36-month sales restriction period, the shares transferred each year during his/her tenure shall not exceed 25% of the total number of shares held directly or indirectly in the Company; the Company shares directly or indirectly held shall not be transferred within six months after the resignation | November 23, 2010 | Long-term | Strict performance |
Hangzhou ROBAM Industrial Group Co., Ltd.; Ren Jianhua | Commitment on avoiding horizontal competition | 1. The Company/I and other enterprises under the control of the Company/me do not, and will not, directly or indirectly, engage in any activities that constitute horizontal competition with the existing and future business of ROBAM and its holding subsidiaries; 2. If any business opportunity obtained the Company/I and other enterprises under the control of the Company/me from any third party constitutes or may constitute substantial competition with the business of ROBAM, the Company/I will immediately notify ROBAM and transfer such business opportunity to ROBAM; 3. The Company/I and other enterprises under the control of the Company/me commit not to provide technical information, process flow, marketing channels or other trade secrets to other companies, enterprises, organizations or individuals whose | November 23, 2010 | Long-term | Strict performance |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenbusiness constitutes competition with the business ofROBAM.
business constitutes competition with the business of ROBAM. | ||||||
Other commitments made to minor shareholders of the Company | Company | Dividend | The cumulative profits distributed in cash for three consecutive years shall not be less than 40% of the annual average distributable profits realized in the three years. | April 10, 2018 | Three years | Strict performance |
Whether the commitment is fulfilled on time | Yes |
2. In case the Company’s asset or project saw earning expectation, and the reporting period is stillcovered by the term of the earning expectation, the Company shall make a statement about the asset orproject fulfilling the original expectation and the reasons thereof.
□ Applicable √ Not applicable
II. Non-operating occupation of Funds of Listed Companies by Controlling Shareholdersand Other Related Parties
□ Applicable √ Not applicable
No non-operating occupation of funds of listed companies by controlling shareholders and other related parties during the reportingperiod.
III. Illegal External Guarantee
□ Applicable √ Not applicable
No illegal external guarantee of the Company during the reporting period.IV. Statement of the Board of Directors on the Latest "Non-standard Audit Report"
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
V. Statement of the Board of Directors, the Board of Supervisors and Independent Directors(if any) on the "Non-standard Audit Report" of the Accounting Firm During the ReportingPeriod
□ Applicable √ Not applicable
VI. Explanation of Changes in Accounting Policy and Accounting Estimates or SignificantAccounting Error Correction When Compared to the Financial Statements of the PreviousYear
√ Applicable □ Not applicable
Changes in significant accounting policies
Create China’s new kitchenContent and reasons of changes in accounting policies
Content and reasons of changes in accounting policies | Approval procedures |
On December 7, 2018, the Ministry of Finance issued the “Notice on Revising and Issuing Accounting Standards for Enterprises No. 21 - Leases” (C.K. [2018] No. 35) (hereinafter referred to as the “new lease standards”). The Company has implemented the new lease standards since January 1, 2021. | Resolution of the 5th Meeting of the Fifth Board of Directors |
Adjustment of relevant items in financial statements at the beginning of the implementation year as a result of first implementation ofnew lease standards from 2021The Company has implemented the new lease standards since January 1, 2021. The retained earnings and other relevant items in thefinancial statements at the beginning of the year in which the standards are first implemented shall be adjusted according to thecumulative influence number during the first implementation of the standards, and the information of comparable periods shall not beadjusted. For the operating lease before the first implementation date, the Company measures the lease liabilities at the present valuediscounted by the lessee's incremental borrowing rate on the first implementation date according to the remaining lease payment onthe first implementation date, and makes necessary adjustments according to the amount equal to the lease liabilities and prepaid rentfor each lease. The affected report items and amounts are as follows:
Consolidated Balance Sheet
Item | December 31, 2020 | January 1, 2021 | Adjusted figure |
Right-of-use assets | 15,374,577.46 | 15,374,577.46 | |
Lease liabilities | 14,705,038.35 | 14,705,038.35 | |
Non-current liabilities due within a year | 684,535.10 | 684,535.10 |
Notes to the adjustment of the consolidated balance sheet: the consolidated balance sheet increases the right-of-use assets by RMB15,374,577.4, the lease liabilities by RMB 14,705,038.35 and the non-current liabilities due within a year by RMB 684,535.10.Balance sheet of parent companyThe implementation of the new lease standards has no impact on the parent company’s financial statements on January 1, 2021
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
VII. Explanation of Changes in the Scope of Combined Financial Statements WhenCompared with Financial Statements of the Previous Fiscal Year
□ Applicable √ Not applicable
No changes in the scope of combined financial statements in the reporting period.
VIII. Appointment of and Dismissal of Accounting FirmsAccounting firm currently appointed
Create China’s new kitchenName of Chinese accounting firm
Name of Chinese accounting firm | Shinewing Certified Public Accountants (special general partnership) |
Remuneration (10,000 yuan) | 115 |
Term of audit services | 3 |
CPAs | Lei Yongxin, Wang Qing |
Term of auditing services of CPAs | 3 |
Has the accounting firm been changed within the reporting period?
□ Yes √ No
Employment of internal control audit accounting firm, financial advisor or sponsor
□ Applicable √ Not applicable
IX. Delisting Confronted upon Disclosure of the Annual Report
□ Applicable √ Not applicable
X. Bankruptcy Reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization of the Company during the reporting period.XI. Major Litigation, Arbitration Matters
□ Applicable √ Not applicable
No major litigation or arbitration matters of the Company during the reporting period.XII. Punishment and Rectification
□ Applicable √ Not applicable
No punishment or rectification of the Company during the reporting period.
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
XIII. Credit Conditions of the company, Its Controlling Shareholders and ActualControllers
□ Applicable √ Not applicable
XIV. Major Related Transactions
1. Related transactions related to daily operation
□ Applicable √ Not applicable
No related transactions related to daily operation of the Company during the reporting period.
2. Related transactions arising from the acquisition or sale of assets or equity
□ Applicable √ Not applicable
No Related transactions arising from the acquisition or sale of assets or equity of the Company during the reporting period.
3. Related transactions of joint foreign investment
□ Applicable √ Not applicable
No related transactions of joint foreign investment of the Company during the reporting period.
4. Related claims and debts
□ Applicable √ Not applicable
No related claims and debts of the Company during the reporting period.
5. Transactions with related financial companies
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the Company and the related financial companies and the relatedparties.
6. Transactions between the financial companies controlled by the Company and related parties
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the financial companies controlled by the Company and therelated parties.
7. Other major related transactions
□ Applicable √ Not applicable
No other major related transactions of the Company during the reporting period.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
XV. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship of the Company during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No contracting of the Company during the reporting period.
(3) Lease
□ Applicable √ Not applicable
No lease of the Company during the reporting period.
2. Major guarantee
□ Applicable √ Not applicable
No major guarantee of the Company during the reporting period.
3. Entrusted cash asset management
(1) Entrusted financing
√ Applicable □ Not applicable
Entrusted financing during the reporting period
Unit: 10,000 yuan
Create China’s new kitchenSpecific type
Specific type | Source of funds for entrusted financing | Amount incurred in entrusted financing | Outstanding balance | Overdue amount not recovered | Overdue amount of impairment accrued for financial management not recovered |
Bank financial products | Owned fund | 320,081.25 | 287,231.25 | 0 | 0 |
Total | 320,081.25 | 287,231.25 | 0 | 0 |
Specific circumstance of high-risk entrusted financing with significant single amount or with low security and poor liquidity
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
□ Applicable √ Not applicable
The entrusted financing is expected not to recover the principal or has other circumstances that may cause impairment
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
No entrusted loans of the Company during the reporting period.
4. Other major contracts
□ Applicable √ Not applicable
No other major contracts of the Company during the reporting period.
XVI. Description of Other Important Events
□ Applicable √ Not applicable
No other important events to be described during the reporting period.XVII. Major Events of Subsidiaries
□ Applicable √ Not applicable
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Section 7 Changes in Shares and ShareholdersI. Change in Shares
1. Change in shares
Unit: share
Create China’s new kitchen
Before this change | Increase / decrease (+, -) | After this change | |||||||
Quantity | Proportion | New issue of shares | Share donation | Share capital increase from reserved funds | Other | Subtotal | Quantity | Proportion | |
I. Restricted shares | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
1. State shareholding | |||||||||
2. State legal person shareholding | |||||||||
3. Other domestic shareholding | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
Wherein: domestic legal person shareholding | |||||||||
Domestic natural person shareholding | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
4. Foreign shareholding | |||||||||
Wherein: foreign legal person shareholding | |||||||||
Foreign natural person shareholding | |||||||||
II. Unrestricted shares | 934,900,781 | 98.51% | 934,900,781 | 98.51% | |||||
1. RMB common share | 934,900,781 | 98.51% | 934,900,781 | 98.51% | |||||
2. Foreign shares listed in China | |||||||||
3. Foreign shares listed abroad | |||||||||
4. Other | |||||||||
III. Total amount of shares | 949,024,050 | 100.00% | 949,024,050 | 100.00% |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Causes for change in shares
□ Applicable √ Not applicable
Approval of changes in shares
□ Applicable √ Not applicable
Transfer of share changes
□ Applicable √ Not applicable
Influence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Companyand other financial indexes in the most recent year and the most recent period
□ Applicable √ Not applicable
Other information the Company deems necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
□ Applicable √ Not applicable
II. Securities Issuance and Listing
1. Securities issuance (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
2. Description of changes in the total number of shares, shareholder structure, asset and liability structure
of the company
□ Applicable √ Not applicable
3. Existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controllers
1. Number and shareholding of the company's shareholders
Unit: share
Create China’s new kitchen
Total number ofcommonshareholders atthe end of thereporting period
Total number of common shareholders at the end of the reporting period | 67,367 | Total number of common shareholders at the end of the previous month before the | 66,641 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see Note 8) | 0 | Total number of preferred shareholders with voting rights restored at the end of the previous | 0 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
disclosure date ofthe annual report
disclosure date of the annual report | month before the disclosure date of the annual report (if any) (see Note 8) | ||||||||||
Shareholders holding more than 5% shares or top 10 shareholders | |||||||||||
Shareholder's name | Shareholder nature | Shareholding ratio | Number of shares held at the end of the reporting period | Increase or decrease during the reporting period | Number of shares held with limited sales conditions | Number of shares held with unlimited sales conditions | Pledge, mark or freeze | ||||
Status of shares | Quantity | ||||||||||
Hangzhou ROBAM Industrial Group Co., Ltd. | Domestic non-state legal person | 49.68% | 471,510,000 | 471,510,000 | |||||||
Hong Kong Securities Clearing Company Limited | Overseas legal person | 10.05% | 95,329,926 | -28,899,585 | 95,329,926 | ||||||
Shen Guoying | Domestic natural person | 1.29% | 12,240,000 | 12,240,000 | |||||||
Industrial Bank Co., Ltd.- ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | Other | 0.77% | 7,348,519 | 7,348,519 | 7,348,519 | ||||||
Hangzhou Jinchuang Investment Co., Ltd. | Domestic non-state legal person | 0.70% | 6,640,085 | -2,811,900 | 6,640,085 | ||||||
Hangzhou Yinchuang Investment Co., Ltd. | Domestic non-state legal person | 0.67% | 6,318,000 | 6,318,000 | |||||||
Ren Jianhua | Domestic natural person | 0.62% | 5,923,150 | 4,442,362 | 1,480,788 | ||||||
Noregs Bank - | Overseas | 0.60% | 5,710,255 | -3,729,960 | 5,710,255 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenOwned fund
Owned fund | legal person | |||||||
Industrial and Commercial Bank of China Limited-Penghua selects hybrid securities investment funds with ingenuity | Other | 0.59% | 5,618,541 | 5,618,541 | 5,618,541 | |||
TEMASEK FULLERTON ALPHA PTE LTD | Overseas legal person | 0.56% | 5,344,855 | -5,116,691 | 5,344,855 | |||
Description of the above-mentioned shareholder association or concerted action | The actual controller of the Company’s controlling shareholder Hangzhou ROBAM Industrial Group Co., Ltd. and the shareholder Hangzhou Jinchuang Investment Co., Ltd. is Mr. Ren Jianhua, and the natural person shareholder Shen Guoying is the wife of Ren Jianhua. The above shareholders have the possibility of acting in unison. | |||||||
Description of the above shareholders involved in entrusting / entrusted voting right and waiver of voting right | N/A | |||||||
Shareholding of top 10 shareholders with unlimited sales conditions | ||||||||
Shareholder's name | Number of shares with unlimited sales conditions held at the end of the reporting period | Share type | ||||||
Share type | Quantity | |||||||
Hangzhou ROBAM Industrial Group Co., Ltd. | 471,510,000 | RMB common share | 471,510,000 | |||||
Hong Kong Securities Clearing Company Limited | 95,329,926 | RMB common share | 95,329,926 | |||||
Shen Guoying | 12,240,000 | RMB common share | 12,240,000 | |||||
Industrial Bank Co., Ltd.- ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | 7,348,519 | RMB common share | 7,348,519 | |||||
Hangzhou Jinchuang Investment Co., Ltd. | 6,640,085 | RMB common share | 6,640,085 | |||||
Hangzhou Yinchuang Investment Co., Ltd. | 6,318,000 | RMB common share | 6,318,000 | |||||
Noregs Bank - Owned fund | 5,710,255 | RMB common share | 5,710,255 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenIndustrial and Commercial Bank ofChina Limited-Penghua selectshybrid securities investment fundswith ingenuity
Industrial and Commercial Bank of China Limited-Penghua selects hybrid securities investment funds with ingenuity | 5,618,541 | RMB common share | 5,618,541 |
TEMASEK FULLERTON ALPHA PTE LTD | 5,344,855 | RMB common share | 5,344,855 |
China Merchants Bank Co. Ltd.-ICBC Credit Suisse Yuanxing Hybrid Securities Investment Fund | 5,000,000 | RMB common share | 5,000,000 |
Description of the association or concerted action between top 10 public shareholders with unlimited sales conditions, and between top 10 public shareholders with unlimited sales conditions and top 10 shareholders | The actual controller of the Company’s controlling shareholder Hangzhou ROBAM Industrial Group Co., Ltd. and the shareholder Hangzhou Jinchuang Investment Co., Ltd. is Mr. Ren Jianhua, and the natural person shareholder Shen Guoying is the wife of Ren Jianhua. The above shareholders have the possibility of acting in unison. | ||
Securities margin trading business attended by top 10 ordinary shareholders (if any) (see note 4) | N/A |
Whether the Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions agreed on arepurchase transaction during the reporting period
□ Yes √ No
The Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions did not agree on arepurchase transaction during the reporting period
2. Controlling shareholders of the company
Nature of controlling shareholder: natural person holdingType of controlling shareholder: legal person
Controlling shareholder's name | Legal Representative / Head of Unit | Date of establishment | Organization code | Main business |
Hangzhou ROBAM Industrial Group Co., Ltd. | Ren Jianhua | March 22, 1995 | 14384025-0 | Industrial investment, import and export of goods |
Equity of other domestic and foreign listed companies controlled and participated by controlling | Directly holding 55.76% of the equity of Hangzhou Nbond Nonwoven Co., Ltd. (603238), it is its controlling shareholder. |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenshareholders during thereporting period
Change of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No change in controlling shareholders during the reporting period.
3. Actual controller of the company and person acting in concert
Nature of actual controller: domestic natural personType of actual controller: natural person
shareholders during thereporting period
Actual controller’s name
Actual controller’s name | Relationship with actual controller | Nationality | Whether to obtain the right of residence in other countries or regions |
Ren Jianhua | Self | Chinese | No |
Main occupations and positions | Chairman and secretary of the party committee of ROBAM Group, chairman of ROBAM Appliances, chairman of Hangzhou Nbond Nonwoven Co., Ltd., and chairman of Hangzhou Amblem Kitchenware Co., Ltd. | ||
Domestic and foreign listed companies that have held shares in the past 10 years | Actual controllers of ROBAM 002508 and Nbond 603238 |
Changes in actual controller during the reporting period
□ Applicable √ Not applicable
No change in actual controller during the reporting period.Block diagram of property right and control relationship between the Company and actual controller
The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
Ren JianhuaROBAM Group
ROBAM Group | Jinchuang Investment |
Hangzhou ROBAM Appliances Co., Ltd.
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
4. The cumulative number of pledged shares of the Company's controlling shareholder or the largestshareholder and its persons acting in concert accounts for 80% of the Company's shares held by them
□ Applicable √ Not applicable
5. Other legal person shareholders holding more than 10%
□ Applicable √ Not applicable
6. Restricted share reduction of controlling shareholders, actual controller, reorganizers and othercommitment subjects
□ Applicable √ Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting PeriodImplementation progress of share repurchase
√ Applicable □ Not applicable
Create China’s new kitchen
Proposal
disclosure
time
Proposal disclosure time | Number of shares to be repurchased | Proportion in total share capital | Proposed repurchase amount | Proposed repurchase period | Repurchase purpose | Number of shares repurchased (share) | Proportion of number of shares repurchased in the underlying shares involved in the equity incentive plan (if any) |
April 15, 2021 | 3 - 4 million shares | About 0.3161% - 0.4215% | RMB 150 million - 200 million | Within 12 months from the date when the general meeting of shareholders deliberates and adopts the share repurchase plan | To implement the Company’s equity incentive plan | 4,929,134 |
Implementation progress of reducing repurchased shares by centralized competitive bidding
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 8 Preferred Shares
□ Applicable √ Not applicable
No preferred shares of the Company during the reporting period.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 9 Corporate Bonds
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Section 10 Financial Report
I. Audit Report
Create China’s new kitchenType of audit opinion
Type of audit opinion | Standard unqualified opinion |
Date of signing of audit report | April 19, 2022 |
Name of audit institution | Shinewing Certified Public Accountants (special general partnership) |
Audit Report No. | XYZH/2022BJAA100465 |
Name of Certified Public Accountant | Lei Yongxin, Wang Qing |
Main body of audit report
I. Audit opinionWe have audited the accompanying financial statements of Hangzhou ROBAM Appliances Co., Ltd. (hereinafter referred to asRobam), including the consolidated balance sheet and the balance sheet of parent company as of December 31, 2021, consolidatedincome statement and income statement of parent company, consolidated cash flow statement and cash flow statement of parentcompany, consolidated statement of change in equity and statement of change in equity of parent company for the year 2021 andnotes to relevant financial statements.In our opinion, the attached financial statements of your company have been prepared in accordance with the provisions of theAccounting Standards for Business Enterprises and give a true and fair view of the consolidated financial position and financialposition of parent company of ROBAM as of December 31, 2021 and of the financial performance and cash flows for the year 2021in all significant terms.II. Basis for audit opinionWe conducted our audit in accordance with the Standards on Auditing for Certified Public Accountants. The “responsibility ofcertified public accountants for audit of financial statements” in the audit report further expounds our responsibilities under suchstandards. We were independent of ROBAM and fulfill other responsibilities in terms of professional ethics according to the code ofprofessional ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.III. Key audit itemsThe key audit items are those that we consider most important to audit the financial statements of the current period in our
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
professional judgment. The response to these items is based on the audit of the financial statements as a whole and the formation ofan audit opinion. We do not comment on these items separately. We have identified the following items as key audit items to becommunicated in the audit report.
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Create China’s new kitchen
1. Revenue recognition - agency model and engineering channels
1. Revenue recognition - agency model and engineering channels | |
Key audit items | Response in audit |
Refer to Notes to financial statements IV. 33 and VI. 37 Operating income and operating cost. In 2021, the operating income of ROBAM was 10,147,706,000 yuan, an increase of 2,019,085,200 yuan compared with that in 2020, including the agency mode income of 3,070,368,000 yuan and the engineering channel income of 1,976,492,300 yuan, accounting for 49.73% of revenue of the period. Since the agency mode income and engineering channel income account for large proportion in the operating income and are one of the key performance indicators of ROBAM, there may be an inherent risk that the management may recognize the income in the wrong way to reach the specific goal or expected goal. Therefore, we regard income recognition as a key audit issue. | For the income recognition of the agency mode and engineering channels, the audit procedures we implemented mainly include: 1. Understand key internal controls related to income recognition, evaluate and test the effectiveness of internal control design and implementation; 2. Check the information of the shareholders and main personnel of the agency company and evaluate whether there is any correlation; 3. Evaluate whether the income recognition method and recognition time point comply with the relevant provisions of the Accounting Standards for Business Enterprises in combination with the contract terms and business nature and the terms related to the time point of commodity control transfer; 4. Carry out substantive analysis procedures on operating income and gross margin ratio by channels, customers, products, etc., identify whether there are significant or abnormal fluctuations, and analyze the causes of fluctuations; 5. Check the original documents of the income recognition for major customers according to the income recognition policy and settlement process and evaluate the authenticity and accuracy of operating income recognition; 6. Confirm current sales to main customers by sampling combined with the confirmation of accounts receivable; 7. Carry out the cut-off test procedure of income, check the supporting documents such as outbound delivery order and acceptance certificate for the operating income recognized before and after the balance sheet date, and evaluate whether the operating income is recognized within an appropriate period; 8. Check whether the information relating to operating income has been properly presented and disclosed in the financial statements. |
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2. Impairment of notes receivable and accounts receivable
2. Impairment of notes receivable and accounts receivable | |
Key audit items | Response in audit |
Refer to Notes to financial statements IV. 11.12, VI. 3 Notes receivable and VI. 4 Accounts receivable. As of December 31, 2021, the balance of notes receivable of ROBAM was 1,576,482,600 yuan and the provision for bad debt was 246,288,700 yuan; the balance of accounts receivable was 2,247,422,200 yuan, and the provision for bad debt was 649,729,300 yuan. Due to the large amount of notes receivable and accounts receivable at the end of the period, the management needs to use material accounting estimate and judgment when determining the recoverable amount, so we regard the impairment of notes receivable and accounts receivable as the key audit items. | For the impairment of notes receivable and accounts receivable, the audit procedures we implemented mainly include: 1. Understand key internal controls for notes receivable and accounts receivable of ROBAM, evaluate and test the effectiveness of internal control design and implementation; 2. Check the contracts of main customers according to the income status, understand the settlement terms, pay attention to the customers who have not made payment after the settlement credit period or acceptance period, and analyze the reasons. Judge the solvency of customers by understanding their operating and financial conditions; 3. Analyze the implementation of the new financial instrument standards for receivables, including the rationality of determination and estimation of the expected credit loss model for the receivables of ROBAM, calculate the expected credit loss amount on the balance sheet date, and analyze whether the credit loss is fully accounted for in the receivables period; 4. Verify the rationality of expected credit loss of receivables combined with the receivables confirmation procedure and post-dated collection by analyzing the aging of accounts receivable; 5. Carry out supervision procedures, check the balance of notes receivable at the end of the period, and check the current endorsement and discount status to check whether they conform to the derecognition conditions; 6. Check the post-dated acceptance status of notes receivable from main customers, record the amount of notes receivable collected after the post-dated period, and check the supporting documents, such as bank receipt and other vouchers, for those with large amounts of notes receivable; 7. Check whether the information relating to notes receivable and accounts receivable has been properly presented and disclosed in the financial statements. |
IV. Other informationThe management of ROBAM (hereinafter referred to as the management) is responsible for other information, including theinformation covered in ROBAM annual report for 2021, but excluding the financial statements and our audit report.
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Our audit opinion on the financial statements does not cover other information and we does not express any form of verificationconclusions on other information.Combined with our audit of the financial statements, it’s our responsibility to read other information. In this process, we shallconsider whether material inconsistency or material misstatement of other information with the financial statements or the situationunderstood by us in the audit process.Based on the work that has been executed by us, we should report the fact of material misstatement confirmed in other information.We have nothing to report in this regard.V. Responsibility of management and government for the financial statementsThe management is responsible for preparing the financial statements in accordance with the provisions of the Accounting Standardsfor Business Enterprises and giving a true and fair view; designing, implementing and maintaining necessary internal control, so thatthe financial statements are free from material misstatement, whether due to fraud or error.When preparing the financial statements, the management is responsible for evaluating the going-concern ability of ROBAM,disclosing the matters related to the going-concern (if applicable) and using the going-concern assumption, unless the managementplans to liquidate ROBAM or stop operation or no other realistic options.The government is responsible for supervising the financial reporting process of ROBAM.VI. Responsibility of certified public accountants for audit of financial statementsOur goal is to obtain reasonable guarantee on inexistence of the material misstatement of the financial statements whether due tofraud or error and to issue an audit report including audit opinion. Reasonable guarantee is high level guarantee, but it cannotguarantee that a material misstatement of the audit executed according to the auditing standards will always be found. Misstatementmay be caused by fraud or error. If the reasonable expected misstatements may affect the economic decision made by the financialstatement user according to the financial statements, whether individually or collectively, the misstatement is generally believedmaterial.We made professional judgment and maintained professional skepticism in the audit process according to the auditing standards. Wealso performed the following:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andimplement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as the basis for audit opinion.Since the fraud may involve collusion, forge, intentional omission, false statement or above internal control, the risk of materialmisstatement caused by fraud is higher than that caused by error.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(2) Understand internal control related to the audit in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relevantdisclosure.
(4) Draw a conclusion about the appropriateness of the going-concern assumption used by the management. Meanwhile, draw aconclusion about the major uncertainty of the matters or circumstances possibly resulting in major concerns about the going-concernability of ROBAM according to the audit evidence obtained. If we draw a conclusion that major uncertainty exists, the auditingstandards require us to request the statement user to notice relevant disclosure in the financial statements in the audit report; in caseof insufficient disclosure, we should issue a modified audit report. Our conclusion is made on the basis of the information availableas of the audit report date. However, the future matters or circumstances may result in going concern failure of ROBAM.
(5) Evaluate the overall presentation, structure and content of the financial statements and evaluate whether the financialstatements give a true and fair view of relevant transactions and matters.
(6) Obtain adequate and appropriate audit evidence for the financial information of ROBAM entity or business activities to expressan opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit and take fullresponsibility for the audit opinions.We communicate with the governance on the planned audit scope, time arrangement and major audit findings, including the internalcontrol defects identified by us in the audit and worthing attention.We also provide the governance with a statement of compliance with the ethical requirements relating to our independence andcommunicate with the governance with respect to all relations and other matters that may reasonably be considered to affect ourindependence and the relevant precautions (if applicable).From the items communicated with the governance, we determine which items are most important to the audit of current financialstatements and thus constitute the key audit items. We describe these items in our audit report, unless the disclosure of these mattersis prohibited by law or regulation, or, in rare circumstances, we determine that we should not communicate the items in our auditreport if it is reasonably expected that the negative consequences of communicating an item outweigh the benefits in the publicinterest.II. Financial StatementsUnit of statements in financial notes: CNY
1. Consolidated balance sheet
Unit: Hangzhou ROBAM Appliances Co., Ltd.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
December 31, 2021
Unit: yuan
Create China’s new kitchenItem
Item | December 31, 2021 | December 31, 2020 |
Current assets: | ||
Monetary capital | 3,802,201,346.55 | 3,921,052,700.31 |
Deposit reservation for balance | ||
Lending funds | ||
Trading financial assets | 2,872,312,500.00 | 2,352,000,000.00 |
Derivative financial assets | ||
Notes receivable | 1,330,193,894.82 | 1,832,701,443.08 |
Accounts receivable | 1,597,692,860.90 | 1,008,235,946.40 |
Receivables financing | ||
Advances to suppliers | 131,162,030.95 | 69,889,399.47 |
Premiums receivables | ||
Reinsurance accounts receivable | ||
Provision of cession receivable | ||
Other receivables | 73,487,381.46 | 56,589,791.38 |
Including: Interest receivable | ||
Dividends receivable | ||
Redemptory monetary capital for sale | ||
Inventory | 1,772,231,632.25 | 1,386,089,344.84 |
Contract assets | ||
Assets held for sales | ||
Non-current assets due within a year | ||
Other current assets | 4,110,429.16 | 667,378.56 |
Total current assets | 11,583,392,076.09 | 10,627,226,004.04 |
Non-current assets: | ||
Loans and advances | ||
Debt investment | ||
Other debt investments | ||
Long-term receivables | ||
Long-term equity investment | 5,405,129.91 | 3,452,769.59 |
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yearsCreate China’s new kitchen
Create China’s new kitchenOther equity instrumentinvestments
Other equity instrument investments | 2,116,023.22 | 102,116,023.22 |
Other non-current financial assets | ||
Investment properties | 11,085,896.07 | 2,591,001.84 |
Fixed assets | 1,179,306,020.01 | 824,978,354.71 |
Construction in progress | 454,643,364.82 | 463,424,647.46 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use assets | 29,902,954.22 | |
Intangible assets | 229,391,803.26 | 235,217,240.32 |
Development expenditure | ||
Goodwill | 80,589,565.84 | 80,589,565.84 |
Long-term unamortized expenses | 5,385,436.20 | 1,798,358.85 |
Deferred income tax assets | 286,348,037.04 | 112,492,030.71 |
Other non-current assets | 38,468,874.44 | 3,682,279.67 |
Total non-current assets | 2,322,643,105.03 | 1,830,342,272.21 |
Total assets | 13,906,035,181.12 | 12,457,568,276.25 |
Current liabilities: | ||
Short-term borrowing | 29,616,655.41 | 6,076,177.30 |
Borrowings from central bank | ||
Borrowing funds | ||
Trading financial liabilities | ||
Derivative financial liabilities | ||
Notes payable | 962,665,463.99 | 751,802,498.92 |
Accounts payable | 2,181,900,261.00 | 1,723,832,208.09 |
Advance from customers | ||
Contract liabilities | 1,026,782,402.35 | 949,591,228.35 |
Financial assets sold for repurchase | ||
Deposits from customers and interbank | ||
Acting trading securities | ||
Acting underwriting securities | ||
Payroll payable | 165,177,425.08 | 126,130,391.24 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenTax payable
Tax payable | 212,202,393.54 | 181,887,237.51 |
Other payables | 267,781,215.06 | 242,559,615.30 |
Including: Interest payable | ||
Dividends payable | ||
Fees and commissions payable | ||
Dividend payable for reinsurance | ||
Liabilities held for sales | ||
Non-current liabilities due within a year | 5,387,591.43 | |
Other current liabilities | 124,284,081.56 | 126,535,407.26 |
Total current liabilities | 4,975,797,489.42 | 4,108,414,763.97 |
Non-current liabilities: | ||
Reserve fund for insurance contracts | ||
Long-term borrowing | ||
Bonds payable | ||
Including: preferred stock | ||
Perpetual bond | ||
Lease liabilities | 26,177,034.29 | |
Long-term payable | ||
Long-term payroll payable | ||
Estimated liabilities | ||
Deferred income | 131,747,378.42 | 150,163,523.90 |
Deferred income tax liabilities | 6,254,762.76 | 5,210,759.74 |
Other non-current liabilities | ||
Total non-current liabilities | 164,179,175.47 | 155,374,283.64 |
Total liabilities | 5,139,976,664.89 | 4,263,789,047.61 |
Owner's equity: | ||
Capital stock | 949,024,050.00 | 949,024,050.00 |
Other equity instruments | ||
Including: preferred stock | ||
Perpetual bond | ||
Capital reserve | 404,918,098.15 | 401,799,332.67 |
Minus: treasury stock | 199,995,742.59 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenOther comprehensive income
Other comprehensive income | -100,157,634.16 | -15,157,634.16 |
Special reserve | ||
Surplus reserves | 474,516,412.50 | 474,516,412.50 |
General risk preparation | ||
Undistributed profit | 7,098,721,555.37 | 6,240,444,654.34 |
Total owners' equities attributable to the owners of parent company | 8,627,026,739.27 | 8,050,626,815.35 |
Minority equity | 139,031,776.96 | 143,152,413.29 |
Total owners' equities | 8,766,058,516.23 | 8,193,779,228.64 |
Total liabilities and owners' equities | 13,906,035,181.12 | 12,457,568,276.25 |
Legal representative: Ren Jianhua Head of accounting work: Zhang Guofu Head ofaccounting body: Zhang Guofu
2. Balance sheet of parent company
Unit: yuan
Item | December 31, 2021 | December 31, 2020 |
Current assets: | ||
Monetary capital | 3,554,239,202.02 | 3,660,573,828.66 |
Trading financial assets | 2,800,000,000.00 | 2,260,000,000.00 |
Derivative financial assets | ||
Notes receivable | 1,327,893,894.82 | 1,826,318,388.55 |
Accounts receivable | 1,496,691,827.59 | 933,609,909.29 |
Receivables financing | ||
Advances to suppliers | 108,926,615.26 | 54,046,490.84 |
Other receivables | 66,149,239.78 | 49,092,820.31 |
Including: Interest receivable | ||
Dividends receivable | ||
Inventory | 1,674,764,364.28 | 1,310,365,800.56 |
Contract assets | ||
Assets held for sales | ||
Non-current assets due within a year |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenOther current assets
Other current assets | ||
Total current assets | 11,028,665,143.75 | 10,094,007,238.21 |
Non-current assets: | ||
Debt investment | ||
Other debt investments | ||
Long-term receivables | ||
Long-term equity investment | 242,037,500.08 | 229,958,703.32 |
Other equity instrument investments | 2,116,023.22 | 102,116,023.22 |
Other non-current financial assets | ||
Investment properties | 11,361,192.77 | 2,890,836.38 |
Fixed assets | 1,114,958,987.32 | 798,041,764.29 |
Construction in progress | 280,105,490.57 | 388,628,789.02 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use assets | ||
Intangible assets | 152,123,403.04 | 153,598,124.59 |
Development expenditure | ||
Goodwill | ||
Long-term unamortized expenses | 1,653,433.47 | 1,626,828.83 |
Deferred income tax assets | 285,017,337.53 | 110,283,291.78 |
Other non-current assets | 36,602,077.16 | 3,005,279.67 |
Total non-current assets | 2,125,975,445.16 | 1,790,149,641.10 |
Total assets | 13,154,640,588.91 | 11,884,156,879.31 |
Current liabilities: | ||
Short-term borrowing | 29,616,655.41 | 6,076,177.30 |
Trading financial liabilities | ||
Derivative financial liabilities | ||
Notes payable | 869,702,988.97 | 706,096,531.24 |
Accounts payable | 2,051,194,342.69 | 1,643,087,806.83 |
Advance from customers | ||
Contract liabilities | 923,802,307.69 | 863,047,926.93 |
Payroll payable | 129,893,906.19 | 102,753,699.88 |
Tax payable | 196,058,797.24 | 170,747,570.08 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenOther payables
Other payables | 240,983,242.45 | 225,015,032.38 |
Including: Interest payable | ||
Dividends payable | ||
Liabilities held for sales | ||
Non-current liabilities due within a year | ||
Other current liabilities | 110,927,917.94 | 115,284,778.08 |
Total current liabilities | 4,552,180,158.58 | 3,832,109,522.72 |
Non-current liabilities: | ||
Long-term borrowing | ||
Bonds payable | ||
Including: preferred stock | ||
Perpetual bond | ||
Lease liabilities | ||
Long-term payable | ||
Long-term payroll payable | ||
Estimated liabilities | ||
Deferred income | 102,890,393.42 | 121,306,538.90 |
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 102,890,393.42 | 121,306,538.90 |
Total liabilities | 4,655,070,552.00 | 3,953,416,061.62 |
Owner's equity: | ||
Capital stock | 949,024,050.00 | 949,024,050.00 |
Other equity instruments | ||
Including: preferred stock | ||
Perpetual bond | ||
Capital reserve | 404,873,115.14 | 401,754,349.66 |
Minus: treasury stock | 199,995,742.59 | |
Other comprehensive income | -100,157,634.16 | -15,157,634.16 |
Special reserve | ||
Surplus reserves | 474,516,412.50 | 474,516,412.50 |
Undistributed profit | 6,971,309,836.02 | 6,120,603,639.69 |
Total owners' equities | 8,499,570,036.91 | 7,930,740,817.69 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenTotal liabilities and owners' equities
Total liabilities and owners' equities | 13,154,640,588.91 | 11,884,156,879.31 |
3. Consolidated Statement of Income
Unit: yuan
Item | Year 2021 | Year 2020 |
I. Total operating income | 10,147,706,035.35 | 8,128,620,799.31 |
Including: Operating income | 10,147,706,035.35 | 8,128,620,799.31 |
Interest revenue | ||
Premium earned | ||
Fee and commission income | ||
II. Total operating costs | 7,960,178,225.56 | 6,222,313,742.92 |
Including: Operating costs | 4,835,053,404.37 | 3,563,206,930.87 |
Interest expenditure | ||
Fee and commission expense | ||
Surrender value | ||
Net payments for insurance claims | ||
Net reserve fund extracted for insurance contracts | ||
Bond insurance expense | ||
Reinsurance costs | ||
Taxes and surcharges | 80,591,250.17 | 61,956,630.88 |
Selling expenses | 2,454,418,039.92 | 2,146,965,048.87 |
Management costs | 363,762,372.63 | 296,985,763.24 |
Research and development expenses | 366,026,666.34 | 303,347,555.81 |
Financial expenses | -139,673,507.87 | -150,148,186.75 |
Including: interest expenditure | 9,638,311.28 | 6,721,543.47 |
Interest revenue | 152,136,833.79 | 160,282,611.34 |
Plus: other incomes | 77,424,555.44 | 92,182,244.92 |
Income from investment (loss expressed with “-”) | 90,502,532.06 | 39,488,969.96 |
Including: Income from investment of joint venture and cooperative enterprise | -47,639.68 | -715,569.20 |
Income from derecognition of financial assets measured at |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenamortized cost
amortized cost | ||
Exchange gain (loss expressed with “-”) | ||
Net exposure hedging gain (loss expressed with “-”) | ||
Income from fair value changes (loss expressed with “-”) | ||
Credit impairment losses (loss expressed with “-”) | -765,499,437.07 | -64,138,118.53 |
Assets impairment losses (loss expressed with “-”) | -52,632,725.80 | -21,977,893.76 |
Income from disposal of assets (loss expressed with “-”) | -2,122,173.87 | -387,844.96 |
III. Operating profits (loss expressed with “-”) | 1,535,200,560.55 | 1,951,474,414.02 |
Plus: Non-operating income | 1,779,825.86 | 1,084,379.00 |
Less: non-operating expenditure | 4,211,465.75 | 3,953,245.34 |
IV. Total profits (total loss expressed with “-”) | 1,532,768,920.66 | 1,948,605,547.68 |
Less: Income tax expenses | 183,977,497.96 | 261,247,643.74 |
V. Net profits (net loss expressed with “-”) | 1,348,791,422.70 | 1,687,357,903.94 |
(I) Classified by business continuity | ||
1. Net profits from going concern (net loss expressed with “-”) | 1,348,791,422.70 | 1,687,357,903.94 |
2. Net profits from discontinuing operation (net loss expressed with “-”) | ||
(II) Classified by ownership | ||
1. Net profits attributable to shareholders of parent company | 1,331,712,059.03 | 1,660,749,958.89 |
2. * Minority interest income | 17,079,363.67 | 26,607,945.05 |
VI. Net of tax of other comprehensive income | -85,000,000.00 | |
Net amount of other comprehensive income after tax attributed to parent company owners | -85,000,000.00 | |
(I) Other comprehensive income that can't be reclassified into profit and loss | -85,000,000.00 | |
1. Remeasure the variation of net indebtedness or net asset of defined benefit plan | ||
2. Other comprehensive income that can't be reclassified into profit and |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
loss in the invested enterpriseunder equity method
loss in the invested enterprise under equity method | ||
3. Fair value change of other equity instrument investments | -85,000,000.00 | |
4. Fair value change of enterprise credit risks | ||
5. Other | ||
(II) Other comprehensive income that will be reclassified into profit and loss | ||
1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method | ||
2. Fair value change 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 hedging reserve | ||
6. Balance arising from the translation of foreign currency financial statements | ||
7. Other | ||
Net amount of other comprehensive income after tax attributed to minority shareholders | ||
VII. Total comprehensive income | 1,263,791,422.70 | 1,687,357,903.94 |
Total comprehensive income attributed to parent company owners | 1,246,712,059.03 | 1,660,749,958.89 |
Total comprehensive income belonging to minority shareholders | 17,079,363.67 | 26,607,945.05 |
VIII. Earnings per share: | ||
(I) Basic EPS | 1.41 | 1.75 |
(II) Diluted EPS | 1.41 | 1.75 |
Legal representative: Ren Jianhua
Legal representative: Ren Jianhua | Head of accounting work: Zhang Guofu | Head of accounting body: Zhang Guofu |
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4. Income statement of parent company
Unit: yuan
Create China’s new kitchenItem
Item | Year 2021 | Year 2020 |
I. Operating income | 9,284,231,145.49 | 7,530,428,964.96 |
Subtract: Operating costs | 4,557,542,158.07 | 3,375,484,733.03 |
Taxes and surcharges | 73,299,717.92 | 56,158,201.66 |
Selling expenses | 2,044,292,085.93 | 1,883,064,814.48 |
Management costs | 261,914,391.23 | 216,279,202.32 |
Research and development expenses | 349,772,824.04 | 290,347,551.69 |
Financial expenses | -137,078,786.08 | -146,412,372.62 |
Including: interest expenditure | 7,860,839.16 | 6,721,543.47 |
Interest revenue | 146,898,250.58 | 155,949,366.04 |
Plus: other incomes | 71,947,430.91 | 85,947,189.06 |
Income from investment (loss expressed with “-”) | 109,604,014.60 | 32,129,921.37 |
Including: Income from investment of joint venture and cooperative enterprise | -47,639.68 | -715,569.20 |
Income from derecognition of financial assets measured at amortized cost (loss expressed with “-”) | ||
Net exposure hedging gain (loss expressed with “-”) | ||
Income from fair value changes (loss expressed with “-”) | ||
Credit impairment losses (loss expressed with “-”) | -765,307,835.18 | -58,992,629.71 |
Assets impairment losses (loss expressed with “-”) | -52,632,725.80 | -21,977,893.76 |
Income from disposal of assets (loss expressed with “-”) | -2,281,424.63 | -585,889.07 |
II. Operating profits (loss expressed with “-”) | 1,495,818,214.28 | 1,892,027,532.29 |
Plus: Non-operating income | 1,323,613.73 | 858,846.38 |
Less: non-operating expenditure | 2,551,970.49 | 2,997,945.29 |
III. Total profits (total loss expressed with “-”) | 1,494,589,857.52 | 1,889,888,433.38 |
Less: Income tax expenses | 170,448,503.19 | 249,881,791.55 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenIV. Net profits (net loss expressed with “-”)
IV. Net profits (net loss expressed with “-”) | 1,324,141,354.33 | 1,640,006,641.83 |
(I) Net profits from going concern (net loss expressed with “-”) | 1,324,141,354.33 | 1,640,006,641.83 |
(II) Net profits from discontinuing operation (net loss expressed with “-”) | ||
V. Net of tax of other comprehensive income | -85,000,000.00 | |
(I) Other comprehensive income that can't be reclassified into profit and loss | -85,000,000.00 | |
1. Remeasure the variation of net indebtedness or net asset of defined benefit plan | ||
2. Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method | ||
3. Fair value change of other equity instrument investments | -85,000,000.00 | |
4. Fair value change of enterprise credit risks | ||
5. Other | ||
(II) Other comprehensive income that will be reclassified into profit and loss | ||
1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method | ||
2. Fair value change 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 hedging reserve | ||
6. Balance arising from the translation of foreign currency financial statements | ||
7. Other |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenVI. Total comprehensive income
VI. Total comprehensive income | 1,239,141,354.33 | 1,640,006,641.83 |
VII. Earnings per share: | ||
(I) Basic EPS | ||
(II) Diluted EPS |
5. Consolidated statement of cash flow
Unit: yuan
Item | Year 2021 | Year 2020 |
I. Cash flow from operating activities: | ||
Cash from selling commodities or offering labor | 10,288,453,339.62 | 8,100,485,159.16 |
Net increase of customer deposit and deposit from other banks | ||
Net increase of borrowings from central bank | ||
Net increase of borrowing funds from other financial institutions | ||
Cash from obtaining original insurance contract premium | ||
Cash received from insurance premium of original insurance contract | ||
Net increase of deposit and investment of insured | ||
Cash from interest, handling charges and commissions | ||
Net increase of borrowing funds | ||
Net increase of repurchase of business funds | ||
Net cash from acting trading securities | ||
Refund of tax and levies | 10,979,888.36 | |
Other cash received related to operating activities | 271,671,026.74 | 298,798,845.98 |
Subtotal cash inflows from operating activities | 10,571,104,254.72 | 8,399,284,005.14 |
Cash paid for selling commodities or offering labor | 5,176,102,168.67 | 3,532,083,383.04 |
Net increase of customer loans and advances | ||
Net increase of amount due from central bank and interbank |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenCash paid for original insurance contract claimspayment
Cash paid for original insurance contract claims payment | ||
Net increase of lending funds | ||
Cash paid for interest, handling charges and commissions | ||
Cash paid for policy dividend | ||
Cash paid to and for employees | 916,057,162.36 | 802,932,443.05 |
Taxes and fees paid | 931,911,190.31 | 781,667,958.02 |
Other cash paid related to operating activities | 2,181,656,514.05 | 1,745,300,262.32 |
Subtotal cash outflows from operating activities | 9,205,727,035.39 | 6,861,984,046.43 |
Net cash flow from operating activities | 1,365,377,219.33 | 1,537,299,958.71 |
II. Cash flow from investment activities: | ||
Cash from investment withdrawal | 2,680,500,000.00 | 1,593,000,000.00 |
Cash from investment income | 91,763,782.62 | 55,973,702.31 |
Net cash from disposal of fixed assets, intangible assets and other long-term assets | 2,730,070.90 | 644,585.13 |
Net cash received from the disposal of subsidiaries and other business entities | ||
Other cash received related to investment activities | ||
Subtotal cash inflows from investment activities | 2,774,993,853.52 | 1,649,618,287.44 |
Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 432,870,305.12 | 282,289,864.56 |
Cash paid for investment | 3,202,812,500.00 | 2,585,000,000.00 |
Net cash received from reinsurance business | ||
Net cash paid for obtaining subsidiaries and other business units | ||
Other cash paid related to investment activities | ||
Subtotal cash outflows from investment activities | 3,635,682,805.12 | 2,867,289,864.56 |
Net cash flow from investment activities | -860,688,951.60 | -1,217,671,577.12 |
III. Cash flow from financing activities: | ||
Receipts from equity securities | 850,000.00 | 6,650,000.00 |
Including: Cash received from subsidies’ absorption of minority shareholders’ investment | 850,000.00 | 6,650,000.00 |
Cash received from borrowings |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Other cash received related to financingactivities
Other cash received related to financing activities | 30,694,588.74 | 6,076,177.30 |
Subtotal cash inflows from financing activities | 31,544,588.74 | 12,726,177.30 |
Cash repayments of amounts borrowed | ||
Cash paid for distribution of dividends or profits and for interest expenses | 495,485,158.00 | 474,512,025.00 |
Including: Dividends and profits paid by subsidiaries to minority shareholders | 22,050,000.00 | |
Other cash paid related to financing activities | 206,042,180.97 | |
Subtotal cash outflows from financing activities | 701,527,338.97 | 474,512,025.00 |
Net cash flow from financing activities | -669,982,750.23 | -461,785,847.70 |
IV. Impact of exchange rate movements on cash and cash equivalents | -813,210.71 | -1,042,285.83 |
V. Net increase of cash and cash equivalents | -166,107,693.21 | -143,199,751.94 |
Plus: Balance of cash and cash equivalents at the beginning of the period | 3,886,096,513.56 | 4,029,296,265.50 |
VI. Balance of cash and cash equivalents at the beginning of the period | 3,719,988,820.35 | 3,886,096,513.56 |
6. Cash flow statement of parent company
Unit: yuan
Item | Year 2021 | Year 2020 |
I. Cash flow from operating activities: | ||
Cash from selling commodities or offering labor | 9,400,393,477.64 | 7,509,377,698.55 |
Refund of tax and levies | 10,979,888.36 | |
Other cash received related to operating activities | 230,569,238.02 | 251,289,264.69 |
Subtotal cash inflows from operating activities | 9,641,942,604.02 | 7,760,666,963.24 |
Cash paid for selling commodities or offering labor | 4,977,299,230.52 | 3,394,399,263.08 |
Cash paid to and for employees | 674,644,809.06 | 610,750,252.22 |
Taxes and fees paid | 863,049,900.49 | 727,573,489.15 |
Other cash paid related to operating activities | 1,854,214,173.41 | 1,565,516,700.37 |
Subtotal cash outflows from operating activities | 8,369,208,113.48 | 6,298,239,704.82 |
Net cash flow from operating activities | 1,272,734,490.54 | 1,462,427,258.42 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenII. Cash flow from investment activities:
II. Cash flow from investment activities: | ||
Cash from investment withdrawal | 2,260,000,000.00 | 1,100,000,000.00 |
Cash from investment income | 110,584,544.21 | 48,392,109.16 |
Net cash from disposal of fixed assets, intangible assets and other long-term assets | 2,295,850.90 | 208,339.13 |
Net cash received from the disposal of subsidiaries and other business entities | ||
Other cash received related to investment activities | ||
Subtotal cash inflows from investment activities | 2,372,880,395.11 | 1,148,600,448.29 |
Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 312,910,594.46 | 205,445,153.06 |
Cash paid for investment | 2,812,000,000.00 | 2,260,000,000.00 |
Net cash paid for obtaining subsidiaries and other business units | ||
Other cash paid related to investment activities | ||
Subtotal cash outflows from investment activities | 3,124,910,594.46 | 2,465,445,153.06 |
Net cash flow from investment activities | -752,030,199.35 | -1,316,844,704.77 |
III. Cash flow from financing activities: | ||
Receipts from equity securities | ||
Cash received from borrowings | ||
Other cash received related to financing activities | 30,694,588.74 | 6,076,177.30 |
Subtotal cash inflows from financing activities | 30,694,588.74 | 6,076,177.30 |
Cash repayments of amounts borrowed | ||
Cash paid for distribution of dividends or profits and for interest expenses | 473,435,158.00 | 474,512,025.00 |
Other cash paid related to financing activities | 199,995,742.59 | |
Subtotal cash outflows from financing activities | 673,430,900.59 | 474,512,025.00 |
Net cash flow from financing activities | -642,736,311.85 | -468,435,847.70 |
IV. Impact of exchange rate movements on cash and cash equivalents | -812,928.86 | -1,042,359.16 |
V. Net increase of cash and cash equivalents | -122,844,949.52 | -323,895,653.21 |
Plus: Balance of cash and cash equivalents at the beginning of the period | 3,627,178,859.95 | 3,951,074,513.16 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenVI. Balance of cash and cash equivalents at the
beginning of the period
VI. Balance of cash and cash equivalents at the beginning of the period | 3,504,333,910.43 | 3,627,178,859.95 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
7. Consolidated statement of change in equity
Current amount
Create China’s new kitchen
Item
Item | Year 2021 | ||||||||||||||
Owners' equities attributable to the owners of parent company | Minority equity | Total owners' equities | |||||||||||||
Capital stock | Other equity instruments | Capital reserve | Minus: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General risk preparation | Undistributed profit | Other | Subtotal | |||||
Preferred stock | Perpetual bond | Other | |||||||||||||
I. Ending balance in previous year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
Plus: Changes in accounting policies | |||||||||||||||
Prior period error correction | |||||||||||||||
Business combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Beginning balance in current year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
III. Increase/decrease in the current period (less to be filled out with the minus sign "-") | 3,118,765.48 | 199,995,742.59 | -85,000,000.00 | 858,276,901.03 | 576,399,923.92 | -4,120,636.33 | 572,279,287.59 | ||||||||
(I) Total comprehensive income | -85,000,000.00 | 1,331,712,059.03 | 1,246,712,059.03 | 17,079,363.67 | 1,263,791,422.70 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen(II) Owner’s invested anddecreased capital
(II) Owner’s invested and decreased capital | 3,118,765.48 | 199,995,742.59 | -196,876,977.11 | 850,000.00 | -196,026,977.11 | ||||||||||
1. Common stock invested by the owner | 850,000.00 | 850,000.00 | |||||||||||||
2. Capital invested by other equity instrument holders | |||||||||||||||
3. Amount of share-based payment included in the owner’s equity | 3,118,765.48 | 199,995,742.59 | -196,876,977.11 | -196,876,977.11 | |||||||||||
4. Other | |||||||||||||||
(III) Profit distribution | -473,435,158.00 | -473,435,158.00 | -22,050,000.00 | -495,485,158.00 | |||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk preparation | |||||||||||||||
3. Distribution of owners (or shareholders) | -473,435,158.00 | -473,435,158.00 | -22,050,000.00 | -495,485,158.00 | |||||||||||
4. Other | |||||||||||||||
(IV) Internal transfer of owner’s equity | |||||||||||||||
1. Capital surplus transfer to paid-in capital (or capital stock) | |||||||||||||||
2. Earned surplus transfer to paid-in capital (or capital |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Unit: yuanLast term amount
Unit: yuan
Create China’s new kitchenItem
Item | 2020 | ||||||||||||||
Owners' equities attributable to the owners of parent company | Minority equity | Total owners' equities | |||||||||||||
Capital stock | Other equity instruments | Capital reserve | Minus: treasury stock | Other comprehensive income | Special reserv | Surplus reserves | General risk preparatio | Undistributed profit | Other | Subtotal | |||||
Preferred stock | Perpetual bond | Other |
stock)
stock) | |||||||||||||||
3. Earned surplus covering the deficit | |||||||||||||||
4. Carryforward retained earnings in variation of defined benefit plan | |||||||||||||||
5. Carryforward retained earnings of other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Draw in this current | |||||||||||||||
2. Use in this current | |||||||||||||||
(VI) Other | |||||||||||||||
IV. Balance at the end of current period | 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 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchene
e | n | ||||||||||||||
I. Ending balance in previous year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 5,054,206,720.45 | 6,864,388,881.46 | 109,894,468.24 | 6,974,283,349.70 | |||||||
Plus: Changes in accounting policies | |||||||||||||||
Prior period error correction | |||||||||||||||
Business combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Beginning balance in current year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 5,054,206,720.45 | 6,864,388,881.46 | 109,894,468.24 | 6,974,283,349.70 | |||||||
III. Increase/decrease in the current period (less to be filled out with the minus sign "-") | 1,186,237,933.89 | 1,186,237,933.89 | 33,257,945.05 | 1,219,495,878.94 | |||||||||||
(I) Total comprehensive income | 1,660,749,958.89 | 1,660,749,958.89 | 26,607,945.05 | 1,687,357,903.94 | |||||||||||
(II) Owner’s invested and | 6,650,000.00 | 6,650,000.00 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchendecreased capital
decreased capital | |||||||||||||||
1. Common stock invested by the owner | 6,650,000.00 | 6,650,000.00 | |||||||||||||
2. Capital invested by other equity instrument holders | |||||||||||||||
3. Amount of share-based payment included in the owner’s equity | |||||||||||||||
4. Other | |||||||||||||||
(III) Profit distribution | -474,512,025.00 | -474,512,025.00 | -474,512,025.00 | ||||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk preparation | |||||||||||||||
3. Distribution of owners (or shareholders) | |||||||||||||||
4. Other | |||||||||||||||
(IV) Internal transfer |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenof owner’sequity
of owner’s equity | |||||||||||||||
1. Capital surplus transfer to paid-in capital (or capital stock) | |||||||||||||||
2. Earned surplus transfer to paid-in capital (or capital stock) | |||||||||||||||
3. Earned surplus covering the deficit | |||||||||||||||
4. Carryforward retained earnings in variation of defined benefit plan | |||||||||||||||
5. Carryforward retained earnings of other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Draw in this current |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
2. Use in this current
2. Use in this current | |||||||||||||||
(VI) Other | |||||||||||||||
IV. Balance at the end of current period | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
8. Statement of change in equity of parent company
Current amount
Unit: yuan
Create China’s new kitchen
Item
Item | Year 2021 | |||||||||||
Capital stock | Other equity instruments | Capital reserve | Minus: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Other | Total owners' equities | |||
Preferred stock | Perpetual bond | Other | ||||||||||
I. Ending balance in previous year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
Plus: Changes in accounting policies | ||||||||||||
Prior period error correction | ||||||||||||
Other | ||||||||||||
II. Beginning balance in current year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
III. Increase/decrease in the current period (less to be filled out with the minus sign "-") | 3,118,765.48 | 199,995,742.59 | -85,000,000.00 | 850,706,196.33 | 568,829,219.22 | |||||||
(I) Total comprehensive income | -85,000,000.00 | 1,324,141,354.33 | 1,239,141,354.33 | |||||||||
(II) Owner’s invested and decreased capital | 3,118,765.48 | 199,995,742.59 | -196,876,977.11 | |||||||||
1. Common stock invested by the owner | ||||||||||||
2. Capital invested by other equity instrument holders | ||||||||||||
3. Amount of share-based payment included in the owner’s equity | 3,118,765.48 | 199,995,742.59 | -196,876,977.11 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
4. Other
4. Other | ||||||||||||
(III) Profit distribution | -473,435,158.00 | -473,435,158.00 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution of owners (or shareholders) | -473,435,158.00 | -473,435,158.00 | ||||||||||
3. Other | ||||||||||||
(IV) Internal transfer of owner’s equity | ||||||||||||
1. Capital surplus transfer to paid-in capital (or capital stock) | ||||||||||||
2. Earned surplus transfer to paid-in capital (or capital stock) | ||||||||||||
3. Earned surplus covering the deficit | ||||||||||||
4. Carryforward retained earnings in variation of defined benefit plan | ||||||||||||
5. Carryforward retained earnings of other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Special reserve | ||||||||||||
1. Draw in this current | ||||||||||||
2. Use in this current | ||||||||||||
(VI) Other | ||||||||||||
IV. Balance at the end of current period | 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 |
Last term amount
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Item
Item | 2020 | |||||||||||
Capital stock | Other equity instruments | Capital reserve | Minus: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Other | Total owners' equities | |||
Preferred stock | Perpetual bond | Other | ||||||||||
I. Ending balance in previous year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 4,955,109,022.86 | 6,765,246,200.86 | ||||||
Plus: Changes in accounting policies | ||||||||||||
Prior period error correction | ||||||||||||
Other | ||||||||||||
II. Beginning balance in current year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 4,955,109,022.86 | 6,765,246,200.86 | ||||||
III. Increase/decrease in the current period (less to be filled out with the minus sign "-") | 1,165,494,616.83 | 1,165,494,616.83 | ||||||||||
(I) Total comprehensive income | 1,640,006,641.83 | 1,640,006,641.83 | ||||||||||
(II) Owner’s invested and decreased capital | ||||||||||||
1. Common stock invested by the owner | ||||||||||||
2. Capital invested by other |
Leading global salesfor 7 consecutive
years
Create China’s new kitchen
Create China’s new kitchenequity instrument holders
equity instrument holders | ||||||||||||
3. Amount of share-based payment included in the owner’s equity | ||||||||||||
4. Other | ||||||||||||
(III) Profit distribution | -474,512,025.00 | -474,512,025.00 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution of owners (or shareholders) | ||||||||||||
3. Other | ||||||||||||
(IV) Internal transfer of owner’s equity | ||||||||||||
1. Capital surplus transfer to paid-in capital (or capital stock) | ||||||||||||
2. Earned surplus transfer to paid-in capital (or capital stock) | ||||||||||||
3. Earned surplus covering the deficit | ||||||||||||
4. Carryforward retained earnings in variation of defined benefit plan |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
5. Carryforward retained
earnings of othercomprehensive income
5. Carryforward retained earnings of other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Special reserve | ||||||||||||
1. Draw in this current | ||||||||||||
2. Use in this current | ||||||||||||
(VI) Other | ||||||||||||
IV. Balance at the end of current period | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
III. Basic Status of the Company
Hangzhou ROBAM Appliances Co., Ltd. (ROBAM or the Company) is a limited liability company established by HangzhouROBAM Home Appliances & Kitchen Sanitary Co., Ltd. by means of overall change on November 7, 2000. Approved by ChinaSecurities Regulatory Commission (ZJXK [2010] No.1512) in 2010, the Company issued 40 million ordinary shares to the public forthe first time on November 23, 2010, with a par value of RMB 1 per share and an issue price of RMB 24.00 and the stock code of002508.As of December 31, 2021, the capital stock of the Company after several equity changes was 949,024,050 yuan. Unified social creditcode: 91330000725252053F, legal representative: Ren Jianhua; address: No.592, Linping Av., Yuhang Economic Development Zone,Hangzhou, China.The Company is mainly engaged in the development, production, sales and comprehensive services of kitchen appliances in themanufacturing industry. Its main products include range hood, gas hob, sterilizer, steamer, oven, dishwasher, water purifier,microwave, integrated stove and purification tank.The main business scope is manufacture, processing, sales, export and import business of range hood, gas stove, sterilized cupboard,oven, steam oven, microwave oven, dishwasher, water purifier, multifunctional tank, kitchenware and other kitchen appliances, aswell as the technical services of home appliances. (Any project that needs to be approved by law can only be carried out after gettingapproval by relevant authorities.)The scope of the Company's consolidated financial statements includes seven subsidiaries: Beijing ROBAM Electric Appliance SalesCo., Ltd., Shanghai ROBAM Electric Appliance Sales Co., Ltd., Hangzhou Mingqi Electric Co., Ltd., De Dietrich HouseholdAppliances Trading (Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd., Hangzhou ROBAM FuchuangInvestment Management Co., Ltd. and Zhejiang Cooking Future Technology Co., Ltd. Compared with the previous year, theconsolidation scope of the Company has not changed this year.IV. Preparation Basis of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on the basis of the going-concern and the accounting policy and accountingestimate in “IV. Significant accounting policy and accounting estimate” according to the actual transactions and items, theAccounting Standards for Business Enterprises promulgated by the Ministry of Finance and relevant provisions.
2. Going concern
After comprehensive consideration to the macro policy risks, market operation risks, Company’s current and long-term profitability,solvency, financial flexibility, intention of the management to change its business policy and other factors, the Company'smanagement believes that the Company has no issue affecting the Company's going-concern ability within 12 months from the endof the report.V. Significant Accounting Policy and Accounting Estimate
The specific accounting policies and accounting estimates formulated by the Company according to the actual production andoperation characteristics include the operating cycle, the recognition and measurement of bad debt provision of receivables, the
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Create China’s new kitchen
measurement of issued inventory, the classification and depreciation of fixed assets, the amortization of intangible assets, thecapitalization conditions of R&D expenses, the income recognition and measurement, etc.1. Statement on complying with corporate accounting standardsThe Company’s financial statements comply with the requirements of the ASBE and truly and completely reflect the Company'sfinancial position, business performance, cash flows and other relevant information.2. Accounting periodThe fiscal year of the Company runs from January 1 to December 31 of each calendar year.3. Operating cycleThe Company’s normal operating cycle is one year (12 months).4. Accounting standard moneyThe bookkeeping currency of the Company is RMB.5. Accounting process method of business combination involving enterprises under and not under common controlThe assets and liabilities acquired by the Company as the combining party through business combination under common control aremeasured on the combination date according to the book value of the combined party in the consolidated statements of the finalcontrolling party. The difference between the book value of the net assets obtained and the consideration paid for the combination isadjusted against capital reserve; if the capital reserve is not sufficient to absorb the difference, the retained earnings shall be adjusted.The acquiree's identifiable assets, liabilities and contingent liabilities acquired through business combination not under commoncontrol are measured at fair value on the acquisition date. The combined cost is the fair value of the cash or non-cash assets paid,liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring date for acquisition of the control right ofthe acquiree, as well as the sum of direct costs for the business combination (for the business combination realized by steps throughseveral times, the combined cost is the sum of the costs of each transaction). Where the combined cost exceeds the acquirer’s interestin the fair value of the acquiree’s net identifiable assets, the difference is recognized as goodwill; where the combined cost is lessthan the acquirer’s interest in the fair value of the acquiree’s net identifiable assets, the acquirer first reassesses the fair values of theacquiree's identifiable assets, liabilities and contingent liabilities in combination and the fair values of non-cash assets or equitysecurities issued for consolidation consideration. If after reassessment, the combined cost is still less than the acquirer's interest in thefair value of the acquiree’s net identifiable assets, the difference is included in the current non-operating income.6. Methods for preparing consolidated financial statementsThe Company includes all subsidiaries under its control in the consolidated financial statements.In preparing the consolidated financial statements, where the accounting policies and the accounting periods of the Company andsubsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies andthe accounting period of the Company.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
All significant internal transactions, current balances and unrealized profits in the consolidation scope shall be set off when theconsolidated statements are prepared. The share of the owner's equity of the subsidiaries not attributable to the parent company andcurrent net profits and losses, other comprehensive income, and the share of other comprehensive income attributable to the minorityinterests shall be presented in the consolidated financial statements under “minority equity, minority interest income, othercomprehensive income attributed to minority shareholders and total comprehensive income attributed to minority shareholders”.For a subsidiary in the business combination under common control, its business performance and cash flows have been consolidatedsince the beginning of the consolidation year into the consolidated financial statements. When preparing and comparing theconsolidated financial statements, the Company shall adjust the relevant items of the previous year's financial statements, which shallbe regarded as the subject of the consolidated report that has been in existence since the beginning of the control by the finalcontrolling party.For a subsidiary in the business combination not under common control, its business performance and cash flows shall beincorporated into the consolidated financial statements from the date of the Company's acquisition of control. In preparing theconsolidated financial statements, the financial statements of the subsidiary shall be adjusted on the basis of the fair values of theidentifiable assets, liabilities and contingent liabilities as determined on the acquiring date.If the Company acquires the equity of the acquiree by steps through several deals and finally forms business combination not undercommon control, in the compilation of the consolidated statements, as for the equity interests held in the acquiree before theacquiring date, they shall be re-measured according to their fair values at the acquiring date; the difference between their fair valuesand book value shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensivegains in relation to the equity interests held in the acquiree under the equity accounting before the acquiring date, and the changes inowners’ equity other than net profit and loss, other comprehensive income and profit distribution shall be carried forward into profitand loss on investments in the period of the acquiring date, except for other comprehensive income from the change caused by theremeasurement of the net liabilities or net assets of the defined benefit plan by the investee.In consolidated financial statements, when the Company disposes of part of long-term equity investment in the subsidiary beforelosing control rights, the difference between the disposal price and the long-term equity investment disposed of relative to the shareof the net assets to be enjoyed and continuously calculated from the acquiring date or combination date is adjusted against capitalpremium or capital stock premium; if the capital reserve is not sufficient to absorb the difference, the retained earnings shall beadjusted.When the Company loses the control right over the investee due to disposal of part of the equity investment or other reasons, theresidual equity shall be re-measured at its fair value on the date of losing the control right in preparing the consolidated financialstatements. The difference between the sum of the consideration acquired by disposal of the equity and the fair value of the residualequity, and the share of the net assets of the original subsidiary continuously calculated from the acquiring day or combination dateaccording to the original shareholding ratio, shall be included in the profit and loss on investments in the period of lose of the controlright and written down against the goodwill. Other comprehensive income related to the equity investment of the original subsidiaryis transferred into the current profit and loss on investments in the period of loss of control right.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
7. Joint venture arrangements classification and Co-operation accounting treatmentThe Company’s joint venture arrangements include cooperative enterprise.The investment in the cooperative enterprise is subject to the accounting treatment by the Company as the joint venture partyaccording to the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investments.8. Cash and cash equivalentsThe cash in the cash flow statement of the Company refers to the cash on hand and deposits readily available for payment. The cashequivalents represent the short-term (no more than three months) and highly liquid investments that are readily convertible intoknown amounts of cash and that are subject to an insignificant risk of change in value.9. Foreign currency transaction and foreign currency financial statement translation
(1) Foreign currency transaction
The foreign currency transaction of the Company is converted to Renminbi at the spot rate on the transaction date. The foreigncurrency project, on the balance sheet date, is converted to Renminbi at the spot rate. The resulting converted difference is includedin current profit and loss except the balance of exchange of special foreign currency loan related to acquisition or construction ofassets meeting the capitalization conditions. Non-monetary items in foreign currency measured at fair value are converted by the spotrate on the recognition date of the fair value. The difference between the bookkeeping currency amount after conversion and theoriginal bookkeeping currency amount is recorded into the capital reserve if belonging to non-monetary items in foreign currency ofavailable-for-sale financial assets, or recorded into current profit and loss if belonging to non-monetary items in foreign currencymeasured at fair value and with the changes included in current profit and loss. Non-monetary items in foreign currency measured bythe historical cost are still converted by the spot rate on the transaction date without changing the RMB amount.
(2) Conversion of financial statements denominated in foreign currencies
The assets and liabilities in the balance sheet of a foreign operation are converted at the spot rate on the balance sheet date; all itemsof owner’s equity, except the "undistributed profit", are converted at the spot rate at the time of occurrence. The income and expenseitems in the income statement of a foreign operation are converted at the approximate exchange rate of the spot rate on the date oftransaction. The converted difference of the foreign currency financial statements generated according to the above translation shallbe presented in other comprehensive income. For a foreign currency monetary item which constitutes a net investment in overseasoperations, the exchange difference resulting from the change of exchange rate shall be presented as other comprehensive income inthe compilation of the consolidated financial statements. Upon disposal of an overseas operation, other comprehensive incomerelated to the overseas operation shall be transferred to the current profit and loss according to the proportion.The approximate exchange rate of the spot exchange rate on the date of the cash flows shall be based on for the translation of cashflows in a foreign currency and in an overseas subsidiary. The effect of a change in exchange rate on cash shall be separatelypresented in the cash flow statement.
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10. Financial assets and financial liabilitiesThe Company recognizes a financial asset or financial liability when becoming a party of the financial instrument contract.
(1) Financial assets
1) Classification, recognition basis and measurement method for financial assetsAccording to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, thefinancial assets of the Company are classified into: financial assets measured at the amortized cost; financial assets measured at fairvalue of which changes are recorded into other comprehensive income; financial assets at fair value through profit or loss(“FVTPL”).The financial asset of the Company that meets the following conditions simultaneously is classified as financial asset measured at theamortized cost: ① The business model for managing the financial asset is to collect contractual cash flows. ② According to thecontract terms of the financial asset, the cash flow generated on a specific date is only for the payment of the principal and theinterest based on the outstanding principal amount. Such financial asset is initially measured at the fair value and the relevanttransaction costs are charged to initially recognized amount; further measurement is made at the amortized cost. With the exceptionof the hedged item designated as such, the difference between the initial amount and the amount due shall be amortized in accordancewith the effective interest method, and the gains and losses arising from the amortization, impairment, exchange gains and losses andthe derecognition shall be recorded into the current profit and loss.The financial asset of the Company that meets the following conditions simultaneously is classified as the financial asset measured atfair value of which changes are recorded into other comprehensive income: ① The business model for managing such financialassets is to collect contractual cash flows and to sell the financial asset. ② According to the contract terms of the financial asset, thecash flow generated on a specific date is only for the payment of the principal and the interest based on the outstanding principalamount. Such financial asset is initially measured at the fair value and the relevant transaction costs are charged to initiallyrecognized amount. With the exception of the hedged item designated as such, the other gains or losses incurred from such financialasset, except for credit impairment losses or gains, exchange gains and losses and interest on the financial asset calculated byeffective interest method, shall be included in other comprehensive income; when the financial asset is derecognized, theaccumulated gains or losses previously recorded in other comprehensive income should be transferred from other comprehensiveincome in current profit and loss.The Company recognizes interest income by effective interest method. The interest income is determined by multiplying the bookbalance of a financial asset by the effective interest rate, except as follows: ① For an acquired or originated financial asset withcredit impairment, the interest income shall be determined according to the amortized cost of the financial asset and the effectiveinterest rate adjusted by credit from the initial recognition. ② For an acquired or originated financial asset with credit impairment,but which has credit impairment in the subsequent period, the interest income of the financial asset shall be determined according tothe amortized cost and the effective interest rate of the financial asset in the subsequent period.The Company designates the non-transactional equity instruments as the financial assets measured at fair value of which changes arerecorded into other comprehensive income. Such designation, once made, shall not be revoked. The non-transactional equity
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instruments measured at fair value of which changes are recorded into other comprehensive income are initially measured at the fairvalue and the relevant transaction costs are charged to initially recognized amount; except for the dividends (excluding the part ofinvestment cost recovery) recorded into the current profit and loss, other related gains and losses (including exchange gains andlosses) are recorded into other comprehensive income and shall not be transferred into the current profit and loss subsequently. Uponderecognition, the accumulated gains or losses previously recorded in other comprehensive income should be transferred from othercomprehensive income to the retained earnings.The above financial assets measured at the amortized cost and the financial assets measured at fair value of which changes arerecorded into other comprehensive income are classified as financial assets at fair value through profit or loss (“FVTPL”). Suchfinancial asset is initially measured at the fair value and the relevant transaction costs are directly charged to the current profit andloss. Gains or losses on such financial assets are charged to the current profit and loss.The financial assets recognized by the Company through business combination not under common control or constituted bycontingent consideration are classified as financial assets at fair value through profit or loss (“FVTPL”).
2) Recognition basis and measurement method for transfer of financial assets
The financial asset is derecognized when meeting any of the following conditions: ① The contract right to charge the cash flow ofthe financial asset is terminated; ② The financial asset has been transferred and almost all risks and remuneration of the financialasset ownership are transferred; ③ The financial asset has been transferred and the Company does neither transfer nor retain almostall risks and remuneration of the financial asset ownership but gives up the control over the financial asset.If the overall transfer of the financial asset meets the derecognition conditions, the difference of the book value of the transferredfinancial asset from the sum of the consideration received and the derecognized amount in the cumulative amount of the fair valuechanges originally included in other comprehensive income (according to the contract terms of the financial asset transferred, thecash flow generated on a specific date is only for the payment of the principal and the interest based on the outstanding principalamount) is charged to the current profit and loss.If the partial transfer of the financial asset meets the derecognition conditions, the overall book value of the transferred financial asset,between the derecognized part and non-derecognized part, is allocated according to the respective relative fair value. The differenceof the sum of the consideration received from transfer and the derecognized amount in the cumulative amount of the fair valuechanges in the derecognized part originally included in other comprehensive income (according to the contract terms of the financialasset transferred, the cash flow generated on a specific date is only for the payment of the principal and the interest based on theoutstanding principal amount) from the overall book value of the above-mentioned financial asset allocated is charged to currentprofit and loss.
(2) Financial liabilities
1) Classification, recognition basis and measurement method for financial liabilitiesFinancial liabilities, upon initial recognition, are divided into those measured with fair value and with the changes included in currentprofit and loss and other financial liabilities.
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Financial liabilities measured with fair value and with the changes included in current profit and loss, including the trading financialliabilities and the financial liabilities measured with fair value and with the changes included in current profit and loss upon initialrecognition. The financial liability is subsequently measured with the fair value. The gain or loss formed from the changes in the fairvalue as well as the dividends and interest expenditure related to the financial liability is charged to current profit and loss.The other financial liabilities are subsequently measured with the amortized cost by means of effective interest method. Except forthe following items, the financial assets are classified as the financial liabilities measured at amortized cost: ① Financial liabilitiesmeasured with fair value and with the changes included in current profit and loss, including the trading financial liabilities (includingderivative instruments belonging to financial liabilities) and the financial liabilities measured with fair value and with the changesincluded in current profit and loss. ② Financial liabilities formed by the transfer of financial assets not conforming to thederecognition conditions or by continuing to involve in the transferred financial assets. ③ Financial guarantee contracts that do notfall under the above ① or ② circumstances, and loan commitments to lend at a below-market rate that do not fall under the above
① circumstance.
The financial liabilities recognized by the Company as the acquirer through business combination not under common control orformed by contingent consideration are classified as financial liabilities at fair value through profit or loss for accounting.
2) Derecognition of financial liabilities
The Company derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged.An agreement between the Company and a creditor to replace the existing financial liability with a new one with substantiallydifferent terms is accounted for as the derecognition of the existing financial liability and the recognition of a new financial liability.When the Company makes material alteration to the contract terms of the existing financial liability (or part of it), it derecognizes theexisting financial liability (or part of it) and recognizes a new one according to the altered terms. The difference between the bookvalue of the derecognized part and the consideration paid is charged to current profit and loss.
3) Fair value determination method of financial assets and financial liabilities
The fair value of the financial assets and financial liabilities is measured by the Company at the prices in the principal market. If noprincipal market exists, the fair value is measured at the most favorable market price by valuation techniques that are applicable atthe time and are supported by sufficient data and other information available. The input value used in the fair value measurement isdivided into three levels. That is, the input value of the first level is the unadjusted quotation of the same assets or liabilities on theactive market that can be obtained on the measurement day. The input value of the second level is the direct or indirect observableinput value of related assets or liabilities other than the input value of the first level. The input value of the third level is thenon-observable input value of the relevant assets or liabilities. The Company prefers the input value of the first level and finally theinput value of the third level. The level of the measurement results of the fair value is determined by the lowest level of the inputvalue that is of great significance to the measurement of fair value as a whole.The Company measures the equity instrument investment at fair value. However, in limited cases, if the recent information used todetermine the fair value is insufficient, or the possible estimated amount of the fair value is widely distributed, and the cost representsthe best estimate of the fair value within the range, the cost may represent the appropriate estimate of the fair value within the range.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(3) Offset of financial assets and financial liabilities
The financial assets and financial liabilities of the Company are listed respectively in the balance sheet and no mutually offset.However, when the following conditions are met at the same time, they are listed as net amount after offset in the balance sheet: (1)the Company has the legal right to offset the recognized amount and may execute the legal right currently; (2) the Company plans tosettle with net amount or realize the financial asset and pay off the financial liability simultaneously.
(4) Distinction between financial liabilities and equity instruments and relevant treatment methodThe Company distinguishes between a financial liability and an equity instrument in accordance with the following principles :(1) Ifthe Company cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets, thecontractual obligation is defined as a financial liability. Although some financial instruments do not explicitly contain terms andconditions for the obligation to deliver cash or other financial assets, they may indirectly form contractual obligations through otherterms and conditions. (2) If a financial instrument is to be settled by or with the Company's equity instrument, it is necessary toconsider whether the Company's equity instrument used to settle the financial instrument is to be used as a substitute for cash or otherfinancial assets or to give the holder of the instrument a residual equity in the assets of the issuer after deducting all liabilities. In theformer case, the financial instrument is a financial liability of the issuer; in the latter case, the instrument is the issuer’s equityinstrument. If it is stipulated in a financial instrument contract that the Company shall or may settle the financial instrument by itsown equity instruments in some cases, in which, the amount of the contractual rights or contractual obligations is equal to the numberof its equity instruments available or to be delivered multiplied by its fair value at the time of settlement, the contract is classified as afinancial liability, whether the amount of the contractual rights or obligations is fixed or whether it is based in whole or in part onchanges in variables (such as the interest rate, the price of a commodity or the price of a financial instrument) other than the marketprice of the Company's equity instruments.In classifying a financial instrument (or its components) in the consolidated statements, the Company takes into account all terms andconditions agreed between the members of the Company and the financial instrument holder. The instrument shall be classified as afinancial liability if the Company as a whole is obligated to deliver cash, other financial assets, or settle accounts in other ways thatcause the instrument to become a financial liability as a result of the instrument.The interest, dividends, profits or losses related to a financial instrument or its components classified as a financial liability, as well asgains or losses from redemption or refinancing, shall be recorded into the Company's current profit and loss.The issuance (including refinancing), repurchase, sales or cancellation of financial instrument or its components classified as equityinstruments is handled as the equity changes, and the fair value change of the equity instruments is not recognized.
(5) Impairment of financial instruments
The Company withdraws the provision for impairment for the financial assets measured at the amortized cost, financial assetsmeasured at fair value of which changes are recorded into other comprehensive income, and financial guarantee contracts based onthe expected credit loss, and recognizes the credit impairment loss.The expected credit loss refers to the weighted average credit loss of financial instruments weighted by the risk of default. Credit lossrefers to the difference between all contract cash flows discounted by the Company at the original effective interest rate and
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receivable according to the contract and all expected cash flows received, that is, the present value of all cash shortage. The financialassets purchased or originated that have suffered from credit impairment shall be discounted at the effective interest rate of thefinancial assets through credit adjustment.The provision for loss on the accounts receivable from standard transactions in the income guidelines and not containing materialfinancing elements shall be measured by the Company by simplified measurement according to the amount equivalent to theexpected credit loss in the whole duration.For the financial assets purchased or originated that have suffered from credit impairment, only the cumulative changes of theexpected credit loss in the whole duration upon initial recognition are recognized as provision for loss on the balance sheet date. Oneach balance sheet date, the amount of change in the expected credit loss over the entire duration is recorded as an impairment loss orgain in the current period. Favorable changes in the expected credit loss are recognized as impairment gains even if the expectedcredit loss for the entire duration recognized on the balance sheet date is less than the amount of overdue credit loss reflected in theestimated cash flow upon initial recognition.For the financial assets other than those purchased or originated that have suffered from credit impairment by simplifiedmeasurement, the Company shall evaluate whether the credit risk of relevant financial instrument has increased significantly uponinitial recognition on each balance sheet date and measure its provision for loss and recognize the expected credit losses and changesrespectively in the following cases:
1) If the credit risk of the financial instrument has not increased significantly upon initial recognition and is in the first stage, itsprovision for loss is measured according to the amount equivalent to the expected credit loss of the financial instrument in the next 12months, and the interest income is calculated according to the book balance and the effective interest rate.
2) If the credit risk of the financial instrument has significantly increased without credit impairment upon initial recognition and isin the second stage, its provision for loss is measured according to the amount equivalent to the expected credit loss of the financialinstrument in the whole duration, and the interest income is calculated according to the book balance and the effective interest rate.
3) If the financial instrument has suffered from credit impairment upon initial recognition and is in the third stage, its provision forloss is measured according to the amount equivalent to the expected credit loss of the financial instrument in the whole duration, andthe interest income is calculated according to the amortized cost and the effective interest rate.The amount increased or written back of the provision for credit loss of the financial instrument is recorded as an impairment loss orgain in the current period. Except for financial assets measured at fair value of which changes are recorded into other comprehensiveincome, the book balance of financial assets is offset by the provision for credit losses. For financial assets measured at fair value ofwhich changes are recorded into other comprehensive income, the Company recognizes its provision for credit losses in othercomprehensive income and does not reduce the book value of the financial assets on the balance sheet.If the Company has measured the provision for loss in the previous accounting period according to the amount equivalent to theexpected credit loss of the financial instrument in the whole duration but the credit risk of the financial instrument has no longer beenincreased significantly upon initial recognition on the current balance sheet date, the Company shall measure the provision for loss onthe financial instrument on the current balance sheet date according to the amount equivalent to the expected credit loss in the next 12
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months and the resulting amount written back from the provision for loss is recorded as an impairment gain in the current period.
① Significant increase in credit risk
By means of the reasonable and valid forward-looking information available, the Company determines whether the credit risks offinancial instruments have increased significantly upon initial recognition by comparing the default risk of the financial instrumentson the balance sheet date with the default risk on the initial recognition date. For financial guarantee contracts, when the Companyapplies the impairment provisions on financial instruments, the date on which the Company becomes a party to make an irrevocablecommitment shall be the initial recognition date. The Company will consider the following factors when assessing whether the creditrisk has increased significantly: whether there are significant changes in the actual or overdue operating results of the debtor; whetherthere has been a significant adverse change in the regulatory, economic or technical environment in which the debtor resides; whetherthere are significant changes in the value of collateral as collateral for debt or in the quality of guarantees or credit enhancementsprovided by third parties, as well as the probability that these changes are expected to reduce the financial incentive for the debtor torepay on the terms specified in the contract or affect the breach of contract; whether there has been a significant change in theexpected performance and repayment behavior of the debtor; whether the Company's credit management methods for financialinstruments have changed.For a financial instrument with low credit risk on the balance sheet date, the Company assumes that the credit risk has not increasedsignificantly upon the initial recognition. The financial instrument is considered to have a low credit risk if the financial instrumenthas relatively low default risk, and the borrower has a strong ability to fulfill its contractual cash flow obligations in a short term,which will not necessarily reduced even if there are adverse changes in the economic situation and operating environment in a longterm.
② Financial assets that have suffered from credit impairment
When one or more events occur that adversely affect the expected future cash flow of a financial asset, the financial asset becomes afinancial asset with credit impairment. The evidence for credit impairment of financial assets includes: the debtor has incurred majorfinancial difficulties; the debtor breaches a contract, such as by default or exceeding payment of default or late payment of interest orprincipal; the creditor gives the debtor concessions that he would not make under any circumstances for economic or contractualreasons related to the debtor's financial difficulties; the debtor is likely to go bankrupt or undergo other financial restructuring; thefinancial difficulties of the issuer or debtor cause the active market for the financial asset to disappear; a substantial discount at whicha financial asset is purchased or originated reflects the fact of credit loss.The credit impairment of the financial asset may be caused by the joint action of the above events, and may not necessarily be causedby the events that can be identified separately.
③ Determination of expected credit loss
The Company evaluates the expected credit losses of financial instruments on the basis of individual and combined instruments, andin assessing the expected credit losses, takes into account reasonable and valid information about past events, current conditions andprojections of future economic conditions.
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Based on the characteristics of common credit risks, the Company divides financial instruments into different combinations. Theindividual assessment standards and the characteristics of the combination credit risks of relevant financial instruments are detailed inthe accounting policies of relevant financial instruments.The Company shall determine the expected credit losses of the relevant financial instruments in the following ways:
In the case of a financial asset, the credit loss is the present value of the difference between the contract cash flow receivable by theCompany and the expected cash flow receivable;In the case of a financial guarantee contract, the credit loss is the present value of the difference between the estimated amount ofpayment to be made by the Company in respect of any credit loss incurred under the contract, and the amount that the Companyexpects to receive from the contract holder, debtor or anywhere else;In the case of a financial asset with credit impairment on the balance sheet date but not purchased or originated with creditimpairment, the credit loss is the difference between the book balance of the financial asset and the present value of the estimatedfuture cash flow discounted at the original effective interest rate.11. Notes receivableBased on the acceptor credit risk of notes receivable as a common risk feature, the Company divides the notes receivable intodifferent combinations and determines the expected credit loss accounting estimation policy:
Create China’s new kitchenCombinationclassification
Combination classification | Basis for recognition of combination | Accrual method |
Banker's acceptance bill combination | The acceptor is a banking financial institution | The Company believes that the banker's acceptance bill held does not have significant credit risk and will not cause major losses due to bank default. |
Commercial acceptance bill combination | The acceptor is a financial company or other non-bank financial institution or enterprise unit | The Company measures the provision for bad debt of commercial acceptance bills receivable according to the expected credit loss of the entire duration |
12. Accounts receivableThe provision for loss on the accounts receivable (whether or containing material financing elements) from standard transactions inthe Accounting Standards for Enterprises No.14 - Revenues and on the lease receivables regulated in the Accounting Standards forEnterprises No. 21 - Lease shall be measured by the Company by simplified measurement according to the amount equivalent to theexpected credit loss in the whole duration.The Company shall evaluate whether the credit risks of accounts receivable have increased significantly on the basis of a singlefinancial instrument or a financial instrument combination. The Company makes single assessment of the credit risks for the accountsreceivable with significantly different credit risks and the following features: accounts receivable in dispute with the other party orinvolving litigation or arbitration; accounts receivable with obvious signs that the debtor is likely to be unable to perform therepayment obligations. It is feasible for the Company to evaluate whether the credit risks increase significantly on the basis offinancial instrument combination if it is unable to obtain sufficient evidence for significant increase in credit risks at reasonable cost
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
at the level of single financial instrument. The Company can classify financial instruments based on the characteristics of commoncredit risk in assessment based on the financial instrument combination.The Company divides the accounts receivable into the following combinations based on their credit risk characteristics:
Create China’s new kitchenCombination classification
Combination classification | Basis for recognition of combination | Accrual method |
Credit loss withdrawn on accounts receivable by aging analysis method | The receivables with the same aging have similar credit risk characteristics | Expected credit loss rate |
Related parties in the consolidation scope | Funds of subsidiaries in the consolidation scope of controlling shareholders | Generally no expected credit loss |
If there is objective evidence that a credit impairment has occurred in an account receivable, the Company shall withdraw theprovision for bad debts for that account receivable and recognize the expected credit loss.For the accounts receivable with the credit loss drawn by aging analysis method, based on the actual credit losses of the previous yearand taking into account the forward-looking information of the current year, the Company's accounting estimation policy formeasuring expected credit losses is as follows:
Aging | Expected credit loss rate |
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 shall calculate the expected credit loss of the accounts receivable on the balance sheet date. If the expected credit lossis greater than the book amount of the provision for impairment of current accounts receivable, the Company recognizes thedifference as the provision for impairment of accounts receivable, debits the "credit impairment loss" and credits the "provision forbad debt". On the contrary, the Company recognizes the difference as an impairment gain and records the opposite.Where the Company has actually incurred a credit loss and the relevant accounts receivable are determined to be irrecoverable, andthe write-off is approved, the "provision for bad debt" shall be debited and the "accounts receivable" shall be credited according tothe approved write-off amount. If the write-off amount is greater than the provision for loss which has been calculated, the "creditimpairment loss" shall be debited according to the difference.13. Receivables financingThe financial asset of the Company that meets the following conditions simultaneously is classified as the financial asset measured atfair value of which changes are recorded into other comprehensive income: the business model for managing such financial assets isto collect contractual cash flows and to sell the financial asset; according to the contract terms of the financial asset, the cash flowgenerated on a specific date is only for the payment of the principal and the interest based on the outstanding principal amount.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
The Company transfers the accounts receivable held in the form of discount or endorsement. Such accounts receivable with frequentbusiness and large amount involved are measured at fair value and their changes are recorded into other comprehensive incomeaccording to relevant regulations in the financial instrument standards if the management business model is to collect and sellcontractual cash flows.14. Other receivablesThe Company divides the process of credit impairment of other receivables into three stages, and has different accounting treatmentmethods for other receivables impairment in different stages:
(1) the credit risks has not increased significantly upon initial recognition (first stage).For the financial instruments in this stage, the Company should measure the provision for loss according to the expected credit lossover the next 12 months.The Company takes aging as the credit risk characteristic to group other receivables and measures them on the basis of combination,which is equivalent to the expected credit loss in the next 12 months.
(2) The credit risk has significantly increased without credit impairment upon initial recognition (second stage).For the financial instruments in this stage, the Company should measure the provision for loss according to the expected credit loss inthe whole duration.
(3) Credit impairment upon initial recognition (third stage)
For the financial instruments in this stage, the Company should measure the provision for loss according to the expected credit loss inthe whole duration.15. InventoryThe Company's inventory mainly includes low priced and easily worn articles, raw materials, work in process, merchandiseinventory and goods shipped in transit, etc.The perpetual inventory system is adopted for the inventories and the inventories are price according to the actual cost when obtained;the cost of the inventories is recognized by the weighted average method when received or issued. The low priced and easily wornarticles and packages are amortized by one-time writing-off method.The year-end inventory is priced according to the cost of inventories or net realizable value, whichever is lower. In case of inventorydamage, full or partial obsolescence or selling price below the cost, the non-recoverable part of its cost is expected and the inventoryfalling price reserves are withdrawn. The inventory falling price reserves of the merchandise inventory and raw materials arewithdrawn according to the difference between the cost of a single inventory item and its net realizable value; for the inventories withlarge quantity and low unit price, the inventory falling price reserves are withdrawn according to the inventory category.For the merchandise inventory, work in process, materials for sale and other merchandise inventories directly used for sale, the netrealizable value is recognized by the amount of the estimated sale price of the inventories subtracted by the estimated selling
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expenses and related taxes; for the material inventory possessed for production, the net realizable value is recognized by the amountof the estimated sale price of the finished products subtracted by the estimated cost about to occur in completion, estimated sellingexpenses and related taxes.16. Contract assets
(1) Methods and standards for the recognition of contract assets
Contract assets refer to the Company's rights to receive consideration for the transfer of goods to the customer, and such rights aresubject to factors other than the passage of time. If the Company sells two clearly distinguishable commodities to customers, and ithas the right to receive payment due to the delivery of one of the commodities, but the receipt of such payment also depends on thedelivery of another commodity, the Company regards the right to receive payment as a contract asset.
(2) Recognition method and accounting treatment method of the expected credit loss of contract assetsFor the recognition method of expected credit loss of contract assets, refer to the above 10. Financial assets and financial liabilities,
11. Notes receivable and 12. Accounts receivable.
The Company shall calculate the expected credit loss of the contract assets on the balance sheet date. If the expected credit loss isgreater than the book amount of the provision for impairment of current contract assets, the Company recognizes the difference as theprovision for impairment, debits the "assets impairment loss" and credits the "provision for impairment of contract assets". On thecontrary, the Company recognizes the difference as an impairment gain and records the opposite.Where the Company has actually incurred a credit loss and the relevant contract assets are determined to be irrecoverable, and thewrite-off is approved, the "provision for impairment of contract assets" shall be debited and the "contract assets" shall be creditedaccording to the approved write-off amount. If the write-off amount is greater than the provision for loss which has been calculated,the "assets impairment loss" shall be debited according to the difference.17. Contract cost
(1) Recognition method of asset amount related to contract cost
The Company's assets related to contract cost include the contract performance cost and the contract acquisition cost.The contract performance cost, that is, the cost incurred by the Company for the performance of the contract, which is not within thescope of other accounting standards for business enterprises and meets the following conditions at the same time, is recognized as anasset as the contract performance cost: such cost is directly related to a current or prospective contract, including direct labor, directmaterials, manufacturing expenses (or similar expenses), costs clearly borne by the customer and other costs incurred solely as aresult of the contract; Such cost increases the resources used by the Company to fulfill its performance obligations in the future; Andsuch cost is expected to be recovered.The contract acquisition cost, that is, the incremental cost incurred by the Company to acquire the contract, which is expected to berecovered, is recognized as an asset as the contract acquisition cost; If the amortization period of such asset does not exceed one year,it shall be recorded into the current profit and loss when it occurs. Incremental cost refers to the cost that will not occur if the
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Company does not acquire the contract (such as sales commission, etc.). Other expenses incurred by the Company to acquire thecontract other than the expected recoverable incremental costs (such as travel expenses incurred regardless of whether the contract isacquired or not) shall be recorded into the current profit and loss when it occurs, except those clearly borne by the customer.
(2) Amortization of assets related to contract cost
Assets related to contract costs are amortized on the same basis as income recognition of goods related to the asset, and are recordedinto the current profit and loss when it occurs.
(3) Impairment of assets related to contract cost
When determining the impairment loss of assets related to the contract cost, the Company first determines the impairment loss ofother assets related to the contract recognized in accordance with other relevant accounting standards for business enterprises; Then,if the book value is higher than the difference between the residual consideration expected to be obtained by the Company due to thetransfer of goods related to the asset and the estimated cost to be incurred for the transfer of relevant goods, the excess part shall beaccrued for impairment provision and recognized as asset impairment loss.If the factors of impairment in the previous period change so that the difference above is higher than the book value of the asset, theCompany shall reverse the withdrawn asset impairment provision and include it into the current profit and loss, but the book value ofthe reversed asset shall not exceed the book value of such asset on the reversal date if the impairment provision is not withdrawn.18. Long-term equity investmentThe Company's long-term equity investment mainly consists of investment in subsidiaries, joint ventures and cooperative enterprises.The Company's judgment on common control is based on the collective control of the arrangement by all participants or acombination of participants, and the policy on the activities related to the arrangement must be agreed upon by all participants in thecollective control of the arrangement.When the Company directly or indirectly owns more than 20% (including) but less than 50% voting rights of the investee through itssubsidiaries, it is generally considered to have a significant impact on the investee. When the Company owns less than 20% votingrights of the investee, it shall be judged to have a significant impact on the investee with comprehensive consideration to dispatchingrepresentatives in the board of directors of the investee or similar authority, participating in the formulation process of the financialand business policy of the investee, conducting important transactions with the investee, dispatching management to the investee orproviding key technical data for the investee.The company that forms control over the investee shall be a subsidiary of the Company. For the long-term equity investmentacquired through business combination under common control, the share of the book value of the net assets of the combined party inthe consolidated statements of the final controlling party, on the combination date, is regarded as the initial cost of the long-termequity investment. If the book value of the net assets of the combined party on the combination date is negative, the long-term equityinvestment cost shall be determined as zero.If the Company acquires the equity of the investee under common control by steps through several deals, finally forms businesscombination and such deals belong to package deal, the deals shall be subject to accounting treatment as a deal to obtain the control
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right. If the deals do not belong to the package deal, the share of the book value of the net assets of the combined party in theconsolidated financial statements of the final controlling party, on the combination date, is regarded as the initial cost of thelong-term equity investment. The difference between the initial cost of the long-term equity investment and the sum of the bookvalue of the long-term equity investment before the combination plus the book value of the new consideration for shares on thecombination date is adjusted against capital reserve; if the capital reserve is not sufficient to absorb the difference, the retainedearnings shall be written down.For the long-term equity investment acquired through business combination not under common control, the combined cost is theinitial investment cost.If the Company acquires the equity of the investee not under common control by steps through several deals, finally forms businesscombination and such deals belong to package deal, the deals shall be subject to accounting treatment as a deal to obtain the controlright. If the deals do not belong to the package deal, the sum of the book value of the equity investment originally held and newlyincreased investment cost shall be considered as initial cost of the investment that calculates according to cost method. If the equityheld before the acquiring date is calculated by the equity method, other comprehensive income calculated by the equity method is notadjusted and shall be subject to accounting treatment when disposing of the investment through adopting the basis for the directdisposal of relevant assets or liabilities of the investee. If the original equity held before the acquiring date is calculated at fair valuein the available-for-sale financial assets, the change in the cumulative fair value originally included in other comprehensive income istransferred to the current investment profit and loss on the combination date.Except for the long-term equity investment acquired through business combination, for the long-term equity investment made bypaying cash, the investment cost shall be the purchase price actually paid; for the long-term equity investment acquired by issuingequity securities, the investment cost shall be the fair value of the equity securities issued; for the long-term equity investmentacquired through the exchange of non-monetary assets, the initial investment cost shall be recognized in accordance with the relevantprovisions of the Accounting Standards for Business Enterprises No.7 - Exchange of Non-monetary Assets; for the long-term equityinvestment acquired by debt restructuring, the initial investment cost shall be recognized in accordance with the relevant provisionsof the Accounting Standards for Business Enterprises No.12 - Debt Restructuring.The investment in subsidiaries is measured by the cost method and the investment in joint ventures and cooperative enterprises ismeasured by equity method.For the long-term equity investment calculated by cost method subsequently, the long-term equity investment cost is adjusted whenthe investment is added or recovered. The cash dividends or profits declared to be distributed by the investee should be recognized ascurrent investment income.The book value of the long-term equity investment measured subsequently by equity method shall be increased or decreased with thechange in the owner’s equity of the investee. The share of the net profits and losses of the investee to be enjoyed shall be recognizedafter offsetting of the part of the internal deal profits and losses attributable to the Company between the joint venture andcooperative enterprise according to the shareholding ratio and after adjustment of the new profits of the investee on the basis of thefair value of the identifiable assets of the investee when the investment is obtained and according to the Company’s accounting policyand accounting period.
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In disposal of the long-term equity investment, the balance between the book value and the actual price obtained is charged to currentinvestment income. If a long-term equity investment calculated by the equity method is included in the owner's equity due to changesin the owner's equity other than the net profit and loss of the investee, the part originally included in the owner's equity in the disposalof the investment shall be transferred to the current investment profit and loss by the corresponding proportion.If the deals for disposal of the equity by steps until the loss of the control right do not belong to the package deal, each deal shall besubject to accounting treatment respectively. If they belong to a package deal, the deals shall be subject to accounting treatment as adeal for disposal of subsidiary and loss of the control right; however, the difference between each disposal price and the book valueof the long-term equity investment corresponding to the equity disposed of before the loss of control right is recognized as othercomprehensive income and then transferred into the current profit and loss in the period of loss of control right.19. Investment propertiesThe Company’s investment properties include the leased buildings which are measured by cost model.The Company's investment properties are depreciated or amortized by the straight-line depreciation method. The estimated servicelife, net residual rate and yearly depreciation (amortization) ratio of all types of investment properties are as follows:
Create China’s new kitchenCategory
Category | Depreciation life (year) | Expected residual rate (%) | Yearly depreciation (%) |
Houses and buildings | 20 | 5.00 | 4.75 |
20. Fixed assetsThe Company’s fixed assets refer to the tangible assets with the following features which are held for production of goods, provisionof labor, lease (excluding lease of buildings) or operating management and whose service life exceeds year.The fixed assets can be recognized when the economic benefits related to the fixed assets are likely to flow to the Company andwhen the cost of the fixed assets can be reliably measured. The fixed assets, including buildings, machinery equipment,transportation equipment and other equipment, are entered into the account by actual cost when obtained, in which, the cost ofpurchased fixed assets includes buying price, import tariff and other relevant taxes, as well as other expenses incurred before thefixed assets reach the extended usable status and directly attributable to the assets; cost of self-constructed fixed assets, consisting ofnecessary expenses incurred from construction of the asset to the intended serviceable conditions; the cost invested by the investorsin the fixed assets is determined according to the value stipulated in the investment contracts or agreements, except the valuestipulated in the contracts or agreements is not fair; the fixed assets under financing lease shall be recorded in the accounts accordingto the lower present value between the fair value of the leased asset on the lease commencement date and the minimum leasepayment.Except the fixed assets withdrawn with depreciation and remaining use, the Company withdraws depreciation of all fixed assets bythe straight-line depreciation method. According to the category of fixed assets, estimated economic life and expected net residualrate, the depreciation is determined as follows:
Category | Depreciation life | Residual rate | Yearly depreciation |
Houses and buildings | 20 | 5.00% | 4.75% |
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Create China’s new kitchen
Create China’s new kitchenMachinery equipment
Machinery equipment | 10 | 5.00% | 9.50% |
Transportation equipment | 5 | 5.00% | 19.00% |
Other equipment | 5 | 5.00% | 19.00% |
Accounting treatment of subsequent expenditure of fixed assets: subsequent expenditure of fixed assets mainly includes thetransformation and renovation expenses and repair expenses. If the economic benefits related may flow in and the cost can be reliablymeasured, the subsequent expenditure is included in the fixed asset cost and the book value of the replaced part is derecognized. Theother subsequent expenditure is charged to current profit and loss upon occurrence.The Company shall review the service life, estimated residual value and depreciation method of the fixed assets on each balancesheet date and handle any change as the accounting estimate change.When the fixed assets are disposed of or cannot generate economic benefits through expected use or disposal, the fixed assets arederecognized. The income from sale, transfer, scrap or damage disposal of fixed assets is included in current profits and losses afterdeducting the book value and related taxes.21. Construction in progressThe construction in progress is measured according to the actual cost. The self-run construction shall be measured by direct materials,direct wages and direct construction costs; the outsourced construction shall be measured according to the paid project cost; theequipment installation project cost shall be determined according to the value, installation cost and test run expenses of theequipment installed. The cost of the construction in progress should also include the capitalized borrowing costs.The fixed assets of the construction shall be carried forward to the fixed assets by the estimated value according to the constructionbudget, cost or actual construction cost from the date when they reach the intended usable state, and the depreciation shall becalculated and withdrawn from the following month. The original value difference of the fixed assets is adjusted after the completionsettlement procedures.22. Borrowing costsRecognition principle of capitalization of borrowing costs: the construction or production borrowing costs incurred and directlyattributable to the assets meeting the capitalization conditions are capitalized and charged to relevant asset costs; other borrowingcosts shall be recognized as costs according to the amount incurred when they occur and shall be included in the current profit andloss. Assets meeting the capitalization conditions refer to the fixed assets, intangible assets, inventories and other assets which canreach the intended usable or marketable status only after quite a long time (generally more than 1 year) of construction or productionactivities.Capitalization period of borrowing costs: the borrowing costs related to the assets that meet the capitalization conditions start to becapitalized when the expenditure to acquire and the borrowing costs have occurred and the construction or production activitiesrequired to make the assets reach the usable or marketable status have started. In case of abnormal interrupt of the assets meeting thecapitalization conditions for more than 3 consecutive months in the construction or production process, the capitalization of theborrowing costs is suspended; the borrowing costs stop capitalization when the construction or production assets meeting thecapitalization conditions reach the usable or marketable status.
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Calculation method for capitalized amount of borrowing costs: when special borrowings are borrowed for construction or productionof the assets meeting the capitalization conditions, the difference between the interest incurred in the period of special borrowingsand the interest income from the unused borrowing fund in the bank or the investment income of temporary investment is deemed asthe capitalized amount of the interest on the special borrowings. When general borrowings are occupied for construction orproduction of assets meeting the capitalized conditions, the weighted average of the expenditure to acquire exceeding the specialborrowings in the cumulative expenditure to acquire is multiplied by the weighted average interest rate of the general borrowingsoccupied to calculate and determine the amount of interest to be capitalized on the general borrowings.23. Right-of-use assetsThe right-of-use assets refers to the right of the Company, as the lessee, to use the leased assets during the lease term.
(1) Initial measurement
On the beginning date of the lease term, the Company make the initial measurement of the right-of-use assets according to the cost.The cost includes the following four items: ① the initial measurement amount of lease liabilities; ② the amount of lease paymentpaid on or before the beginning of the lease term. If there is lease incentive, the amount of lease incentive already enjoyed will bededucted from it; ③ The initial direct expenses incurred are the incremental costs incurred in reaching the lease; ④ The costsexpected to occur for dismantling and removing the leased assets, restoring the site where the leased assets are located or restoringthe leased assets to the state agreed in the lease terms, except those incurred for the production inventory.
(2) Subsequent measurement
After the beginning date of the lease term, the Company adopts the cost model for subsequent measurement of the right-of-use assets,that is, the right-of-use assets are measured at cost less accumulated depreciation and accumulated impairment losses. If theCompany re-measures the lease liabilities in accordance with the relevant provisions of the lease standards, the book value of theright-of-use assets shall be adjusted accordingly.Depreciation of right-of-use assetsFrom the beginning date of the lease term, the Company makes the depreciation of the right-of-use assets. The right-of-use assets areusually depreciated from the month when the lease term begins. The amount of depreciation accrued shall be included in the cost ofrelevant assets or current profit and loss according to the purpose of the right-of-use assets.When determining the depreciation method of the right-of-use assets, the Company makes a decision according to the expectedconsumption mode of the economic benefits related to the right-of-use assets, and depreciates the right-of-use assets by using thestraight-line method.The Company follows the following principles when determining the depreciation life of the right-of-use assets: Where it can bereasonably determined that the ownership of the leased assets can be acquired upon the expiration of the lease term, depreciationshall be calculated and withdrawn during the remaining service life of the leased assets; where it is impossible to reasonablydetermine that the ownership of the leased assets can be acquired upon the expiration of the lease term, the depreciation shall becalculated and withdrawn within a shorter period of the lease term and the remaining service life of the leased assets.Impairment of right-of-use assetsIn case of impairment of the right-of-use assets, the Company will conduct subsequent depreciation according to the book value ofthe right-of-use assets after deducting the impairment loss.
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24. Intangible assetsThe Company's intangible assets mainly include land use rights, software, trademarks, patents, etc. The actual cost of the purchasedintangible assets shall be the actual cost and other relevant expenses. The actual cost of the intangible assets invested by the investorsis determined according to the value stipulated in the investment contracts or agreements. If the value stipulated in the contracts oragreements is not fair, the actual cost is determined according to the fair value. The intangible assets are amortized by thestraight-line method. The classification and amortization period of the Company's intangible assets are as follows:
Create China’s new kitchenCategory
Category | Amortization period |
Land use right | 50 |
Patent | 10 |
Software | 3~5 years |
Trademark and domain name | 10 |
The Company’s land use right is amortized averagely according to the transfer life from the date of transfer; the Company's patentright, non-patented technology, the right to use the special software and other intangible assets are amortized averagely by theshortest of the estimated service life, the beneficial life stipulated in the contract and the effective life stipulated by law. Theamortization amount shall be recorded into the current profit and loss or the cost of related assets according to its beneficiary object.The expected useful life and amortization methods of the intangible assets with limited useful life are reviewed at the end of eachyear and adjusted accordingly in case of change; the expected useful life of the intangible assets with uncertain useful life arereviewed in each accounting period. If there is evidence that the service life of intangible assets is limited, the service life shall beestimated and amortized within the expected useful life.The expenditure of the Company's internal R&D projects is classified into the expenditure at the research stage and the expenditureat the development stage according to its nature and great uncertainty of the intangible assets eventually formed by R&D activities.For intangible assets developed independently, the expenditure in the research stage shall be included in the current profit and losswhen it occurs; The expenditures in the development stage shall be recognized as assets if they meet the following conditions at thesame time:
(1) Technically feasible to complete the intangible assets, so that they can be used or sold;
(2) It is intended to finish and use or sell the intangible assets;
(3) The products generated by the intangible assets can be sold or the intangible assets themselves can be sold;
(4) It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources; and
(5) The development expenditures of the intangible assets can be reliably measured.The expenses at the development stage not meeting above conditions are included in current profits and losses when obtained. Thedevelopment expenses included in profits and losses in previous periods are not recognized as assets in subsequent periods. The
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capitalized expenses at the development stage are listed as development expenses in the balance sheet and transferred to intangibleassets when the project reaches the intended usable state.If the expenditure at the research stage and the expenditure at the development stage cannot be distinguished, the R&D expenditureincurred is fully charged to the current profit and loss. The cost of intangible assets formed by internal development activities consistsonly of the total expenditure incurred between the point at which the conditions for capitalization are met and the time at which theintangible assets reach their intended use. The expenditure that has been expensed and included in the profit and loss for the sameintangible asset before reaching the capitalization conditions in the development process is no longer adjusted.25. Long-term assets impairmentThe Company checks the intangible assets determined for the long-term equity investment, fixed assets, construction in progress andservice life of the subsidiaries, joint ventures and cooperative enterprises on each balance sheet date. When there are the followingsigns, indicating that the assets may be impaired, the Company will conduct impairment test; for intangible assets with uncertaingoodwill and beneficial life, impairment test shall be conducted at the end of each year whether there is any sign of impairment or not.Where it is difficult to test the recoverable amount of a single asset, the test shall be based on the asset group or the combination ofasset groups to which the asset belongs.After the impairment test, if the book value of the asset exceeds the recoverable amount, the difference is recognized as animpairment loss. Once the impairment loss of the said asset is recognized, it will not be carried back in the subsequent accountingperiod. The recoverable amount of an asset is the higher of the net amount of the assets fair value subtracted by the disposal costs andthe present value of the expected future cash flow of the assets.
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Create China’s new kitchen
Signs of impairment are as follows:
(1) The market price of assets has fallen sharply in the current period, and its decline is significantly higher than the expecteddecline due to the passage of time or normal use;
(2) The economic, technical or legal environment in which the enterprise operates and the market in which its assets are located areundergoing or will undergo significant changes in the current period or in the near future, thus adversely affecting the enterprise;
(3) The market interest rate or other market return on investment has increased in the current period, which affects the discount rateof the enterprise in calculating the present value of the expected future cash flow of assets, resulting in a significant reduction in therecoverable amount of asset;
(4) There is evidence that the assets have become obsolete or its entity has been damaged;
(5) The assets have been or will be idle, terminated or disposed of in advance;
(6) The evidence in the internal report of the enterprise indicates that the economic performance of the assets has been or will belower than the expectation, such as the net cash flow created by the assets or the realized operating profit (or loss) is far lower (orhigher) than the expected amount;
(7) Other signs indicating that the assets may have been impaired.
26. GoodwillGoodwill refers to the difference between the cost of equity investment or the cost of business combination not under the samecontrol and the fair value share of the investee or the acquiree's identifiable net assets that should be enjoyed or acquired in thebusiness combination on the acquisition date or the acquisition purchase date.Goodwill related to subsidiaries is presented separately in the consolidated financial statements, and goodwill related to joint venturesand cooperative enterprises is included in the book value of long-term equity investment.27. Long-term unamortized expensesThe long-term unamortized expenses of the Company refer to the expenses that have been paid, but should be borne in the currentperiod and subsequent periods with the amortization period of more than one year (excluding one year). Such expenses are amortizedon average in the benefit period. If a long-term unamortized expense item cannot benefit a later accounting period, the amortizedvalue of the item that has not been amortized is transferred to the current profit and loss.
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28. Contract liabilitiesContract liabilities reflect the obligations of the Company to transfer goods to customers for consideration has been received orreceivable from customers. If the customer has paid the contract consideration or the Company has obtained the right to receive thecontract consideration unconditionally before the Company transfers the goods to the customer, the contract liabilities shall berecognized according to the amount received or receivable at the earlier of the actual payment made by the customer and the duepayment.29. Employee compensationThe Company’s employee compensation includes short-term compensation, welfare after dismission, dismission welfare and otherlong-term employee services and benefits.The short-term compensation mainly includes salary, bonus, allowances and subsidies, employee services and benefits, housing fund,labor union expenditure and personnel education fund, medical insurance premiums, industrial injury insurance premium, birthinsurance premium and other social insurance premiums. The short-term compensation actually happened during the accountingperiod when the staff offering the service for the Company shall be recognized as liabilities and included in the current gains andlosses or relevant assets cost by the beneficiary object.Post-employment benefits mainly include basic endowment insurance, unemployment insurance and enterprise annuity payment andare classified as defined contribution plans according to the risks and obligations undertaken by the Company. The sinking fundsmade to a separate entity on the balance sheet date in exchange for services rendered by the employee during the accounting periodshall be recognized as liabilities and included in the current gains and losses or relevant assets cost by the beneficiary object.The Company puts forward compensation for an employee to terminate the labor relationship with the employee before expiry of theemployee labor contract. When failing to unilaterally withdraw the dismission welfare due to termination of labor relation plan ordownsizing suggestions, or when recognizing the costs related to restructuring involving payment of dimission welfare (whichevercomes first), the Company recognizes the employee compensation liabilities from the dismission welfare and includes in currentprofit and loss. The compensation that is paid beyond a year is included in current profit and loss after discount.Other long-term employee benefits mainly include the long-term incentive plan and long-term benefits and shall be subject to theaccounting treatment according to relevant provisions in the defined contribution plans.30. Lease liabilities
(1) Initial measurement
The Company initially measures the lease liabilities according to the present value of the unpaid lease payments at the beginning dateof the lease term.
1) Lease payments
Lease payments refer to the amounts paid by the Company to the lessor related to the right to use the leased assets during the leaseterm, including: ① fixed payment and substantial fixed payment. If there is lease incentive, the amount related to lease incentive
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shall be deducted from it; ② The amount of variable lease payments depending on the index or ratio, which is determined at theinitial measurement according to the index or ratio on the beginning date of the lease term; ③ The Company reasonably determinesthe exercise price of the call option when it will exercise the call option; ④ The amount to be paid for exercising the option toterminate the lease when the lease term reflects that the Company will exercise the option to terminate the lease; ⑤ The amountexpected to be paid according to the guarantee residual value provided by the Company.
2) Discount rate
When calculating the present value of lease payments, the Company adopts the interest rate implicit in lease as the discount rate,which refers to the interest rate that makes the sum of the present value of the lessor's lease receipts and the present value of theunguaranteed residual value equal to the sum of the fair value of the leased asset and the lessor's initial direct expenses. If theCompany is unable to determine the interest rate implicit in lease, the incremental loan interest rate shall be used as the discount rate.The incremental loan interest rate refers to the interest rate that the Company must pay to borrow funds with similar mortgageconditions during similar periods in order to obtain assets of similar value to the right-of-use assets under similar economicenvironment. The interest rate is related to the following matters: ① the Company's own situation, that is, the group's solvency andcredit status; ② The term of the "loan", i.e. the lease term; ③ The amount of "borrowed" funds, i.e. the amount of lease liabilities;
④ "Mortgage conditions", that is, the nature and quality of the underlying assets; ⑤ Economic environment, including thejurisdiction of the lessee, money of account, contract signing time, etc. Based on the bank loan interest rate, the Company obtains theincremental loan interest rate by adjusting the above factors.
(2) Subsequent measurement
After the beginning date of the lease term, the Company makes subsequent measurement of the lease liabilities according to thefollowing principles: ① when confirming the interest of the lease liabilities, increase the book amount of the lease liabilities; ②When paying the lease payment, reduce the book amount of the lease liabilities; ③ When the lease payment changes due torevaluation or lease change, the book value of the lease liabilities shall be re-measured.The Company calculates the interest expense of the lease liabilities in each period of the lease term according to the fixed periodicinterest rate and records it into the current profit and loss, except those that should be capitalized. Periodic interest rate refers to thediscount rate adopted by the Company for the initial measurement of lease liabilities, or the revised discount rate adopted by theCompany when the lease liabilities need to be remeasured according to the revised discount rate due to the change of lease paymentor lease change.
(3) Remeasurement
After the beginning date of the lease term, in case of the following circumstances, the Company shall re-measure the lease liabilitiesaccording to the present value of the lease payment after the change, and adjust the book value of the right-of-use assets accordingly.If the book value of the right-of-use assets has been reduced to zero, but the lease liabilities still needs to be further reduced, theCompany will record the remaining amount into the current profit and loss. ① Substantial fixed payment amount changes (in thiscase, the original discount rate is adopted); ② The expected payable amount of the guaranteed residual value changes (in this case,the original discount rate is adopted); ③ The index or rate used to determine the amount of lease payment changes (in this case, the
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revised discount rate is adopted); ④ The evaluation result of the call option changes (in this case, the revised discount rate isadopted); ⑤ The evaluation result or actual exercise of the renewal option or termination option changes (in this case, the reviseddiscount rate is adopted).31. Estimated liabilitiesAny business related to contingencies such as external guarantee, pending litigation or arbitration, product quality assurance, staffreduction plan, loss contract, restructuring obligation, environmental pollution remediation, commitment and fixed asset disposalobligation, if meeting all of the following conditions, is recognized as a liability: the obligation is the current obligation undertakenby the Company; performance of the obligation is likely to lead to the outflow of economic benefits; the amount of the obligation canbe reliably measured.The estimated liabilities are initially recognized according to the best estimate number of the expenditure required to performrelevant current obligations with consideration to the contingency related risks, uncertainty, time value of money and other factors. Ifthe time value of money has significant impact, the best estimate number is determined after discount of the future cash flow. Thebook value of the estimated liabilities is reviewed on the balance sheet date and adjusted to reflect the current best estimate number ifthere is any change.The existence of a potential obligation for past transactions or events shall be substantiated by the occurrence or non-occurrence offuture uncertainties; the Company will disclose the potential or current obligation a as contingent liability if the performance of suchobligation is not likely to result in the outflow of economic benefits from the Company or if the amount of such obligation cannot bereliably measured.32. Share-based paymentThe term share-based payment refers to a transaction in which the Company grants equity instruments or undertakesequity-instrument-based liabilities in return for services from employee or other parties. The share-based payments shall consist ofequity-settled share-based payments and cash-settled share-based payments.The equity-settled share-based payment in return for employee services is measured at the fair value of the equity instrumentsgranted to the employees. The amount of such fair value, under the situation that the rights can only be exercised after the service isfinished and the set performance is achieved within the waiting period, and basing on the optimum estimation for the number ofequity instrument which exercise rights within the waiting period, will be measured according to straight-line method and countedinto relevant costs and expenses. The capital reserve will be increased correspondingly.The share-based payment settled by cash will be measured according to the fair value of the liability confirmed basing on the sharesborne by the Company and other equity instruments. If the rights can be exercised immediately after being granted, the payment willbe counted into relevant costs or expenses at the fair value of the liabilities assumed and the liability will be increasedcorrespondingly. If the rights can only be exercised after the situation that service within the waiting period is completed and setperformance is achieved, the service obtained at the current period, according to the fair value amount of the liability borne by theCompany, and basing on the optimum estimation for the condition of exercising rights, will be counted into costs or expenses on eachand every balance sheet date during the waiting period, and the liability will be increased correspondingly.
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Create China’s new kitchen
Each and every balance sheet date and settlement before relevant liability settlement, the fair value of liability will be remeasured, ofwhich changes occurred will be counted into the current period.33. Income recognition principle and measurement methodThe Company’s operating income mainly includes income from selling commodities, income from offering labor and transfer ofasset use right.
(1) Income recognition principle
The Company has fulfilled its contractual obligation to recognize income when the customer acquires control of the relevant goods orservices. Obtaining control of the relevant goods or services is the ability to dominate the use of the goods or provision of servicesand gain almost all economic benefits from them.The Company evaluates the contract on the contract commencement date, identifies each individual performance obligationcontained in the contract, and determines whether each individual performance obligation is performed within a certain period oftime or at a certain point in time.If one of the following conditions is satisfied, the Company shall be deemed to have performed its performance obligation within acertain period of time; otherwise, it shall be deemed to have performed its performance obligation at a certain time point:
1) The customer obtains and consumes the economic benefits arising from the Company’s performance at the same time of theCompany’s performance.
2) The customer can control the goods under construction during the Company’s performance.
3) The goods produced by the Company during the performance are of irreplaceable use, and the Company shall be entitled toreceive payment for the accumulated part of the performance completed so far during the whole contract period.For the performance obligations performed within a certain period of time, the Company shall recognize the income in accordancewith the performance progress during that period. If the performance schedule cannot be reasonably determined and the cost alreadyincurred by the Company is expected to be compensated, the Company shall recognize the income according to the cost alreadyincurred until the performance schedule can be reasonably determined.For performance obligations performed at a certain time point, the Company recognizes income at the time point when the customeracquires control of the relevant goods or services. In determining whether the customer has acquired control of goods or services, theCompany considers the following indications:
1) The Company has the current collection right for the goods or services.
2) The Company has transferred legal ownership to the goods to the customer.
3) The Company has transferred the goods in kind to the customer.
4) The Company has transferred the main risks and rewards on the property in the goods to the customer;
5) The customer has accepted the goods or services, etc.
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The Company's right to receive consideration for the transfer of goods or services to the customer is listed as the contract assets, andthe contract assets are depreciated on the basis of expected credit losses. The rights that the Company owns and unconditionally tocollect consideration from the customer are listed as receivables. The obligations of the Company to transfer goods or services tocustomers for which consideration has been received or receivable are listed as contractual liabilities.
(2) Income measurement principle
1) If the contract contains two or more performance obligations, the Company shall, at the beginning of the contract, apportion the
transaction price to each individual performance obligation according to the relative proportion of the individual selling price ofthe goods or services committed by each individual performance obligation, and measure the income according to thetransaction price apportioned to each single performance obligation.
2) The transaction price means the amount of consideration that the Company is expected to be entitled to collect for the transferof goods or services to the customer, excluding payments collected on behalf of third parties. The transaction price recognizedby the Company does not exceed the amount of accumulated recognized income which is highly unlikely to be materiallyreversed when the relevant uncertainty is eliminated. The amount expected to be returned to the customer is not included in thetransaction price as a liability.
3) If there is a material financing component in the contract, the Company shall determine the transaction price based on theamount payable in cash when the customer acquires control of the goods or services. The difference between the transactionprice and the contract consideration shall be amortized by the effective interest method during the contract period. On thecommencement date of the contract, if the Company expects that the interval between the customer's acquisition of control ofthe goods or services and the customer's payment of the price will not exceed one year, the material financing elements in thecontract will not be considered.
(3) Specific methods of revenue recognition
1) Revenue recognized on time
The Company's sales of electrical products, accessories and materials belong to the performance obligation to be performed at acertain point in time.Recognition conditions of income from domestic goods: the Company has delivered the products to the customers according to thecontract, the customers have received the goods, the payment for goods has been recovered or the receipt voucher has been obtained,and the relevant economic benefits are likely to flow into the Company, the main risks and rewards of the ownership of the goodshave been transferred, and the legal ownership and control of the goods have been transferred.Recognition conditions of income from export goods: the Company has declared the products to leave the port according to thecontract, obtained the bill of lading, recovered the payment for goods or obtained the receipt voucher, and the relevant economicbenefits are likely to flow into the Company, the main risks and rewards of the ownership of the goods have been transferred, and thelegal ownership and control of the goods have been transferred.
2) Revenue recognized according to performance progress
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Create China’s new kitchen
The Company's technical service income and business contracts between operating leases and customers belong to the performanceobligations performed within a certain period of time, and the income shall be recognized according to the performance progress.34. Government subsidiesThe Company's government subsidies include financial allocations. The asset related government subsidies refer to the governmentsubsidies obtained by the Company and used for acquisition or construction or for formation of long-term assets in other ways; theincome related government subsidies refer to the government subsidies other than the asset related government subsidies. Thegovernment subsidies without subsidy objects specified in government documents shall be judged by the Company according to theabove principle, or classified into income related government subsidies as a whole if it is difficult to judge.The government subsidies as the monetary assets are measured according to the amount received. For subsidies allocated inaccordance with fixed quota standards, or if there is evidence at the end of year that the Company can meet relevant conditionsstipulated in the financial support policy and can be expected to receive the financial support fund, the government subsidies aremeasured according to receivables. The government subsidies not as the monetary assets are measured according to the fair value, ormeasured according to the nominal amount (RMB 1 yuan) if the fair value cannot be obtained reliably.The government subsidies related to assets are recognized as deferred income and equally distributed and charged to the currentprofit and loss in the service life of relevant assets.If the related asset is sold, transferred, scrapped or damaged before the end of the useful life, the deferred income balance not yetdistributed is transferred in the profits and losses in the period of assets disposal.The income related government subsidies, if used to compensate for related costs or losses in subsequent periods, are recognized asthe deferred income and charged to the current profit and loss when related costs or losses are recognized. The government subsidiespertinent to the daily activities of the Company shall be included in other income or used to offset relevant costs and expensesaccording to the substance of the economic business. The government subsidies irrelevant with the daily activities of the Companyshall be included in non-operating revenues and expenditures.Where the Company has obtained discount interest on preferential loans, it shall distinguish between the two situations in which thefinancial department allocates discount interest funds to the lending bank and the financial department directly allocates discountinterest funds to the Company, and conduct accounting treatment according to the following principles:
(1) Where the financial department allocates the discount interest funds to the lending bank, and the lending bank provides the loanto the Company at the preferential policy interest rate, the Company shall take the actual amount of the loan received as the entryvalue of the loan, and calculate the relevant borrowing costs according to the loan principal and the preferential policy interest rate.
(2) Where the financial department directly allocates discount interest funds to the Company, the Company will write down thecorresponding discount interest against the relevant borrowing costs.If the government subsidy confirmed by the Company needs to be returned, the accounting treatment shall be carried out inaccordance with the following provisions in the current situation of the return:
1) The book value of related assets is adjusted if it is offset upon initial recognition.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
2) For those with related deferred income, the book balance of related deferred income is written down and the excess is
accounted into the current profits and losses.
3) In the other cases, they are directly accounted into the current profits and losses.35. Deferred income tax assets and deferred income tax liabilitiesThe Company’s deferred income tax assets and deferred income tax liabilities are calculated and recognized according to thedifference (temporary difference) between the tax base and book value of the assets and liabilities. For the deductible loss that can becarried forward to the subsequent year according to the tax law, the corresponding deferred income tax assets are recognized. For thedeductible temporary differences related to the initial recognition of the goodwill, the corresponding deferred income tax liabilitiesare not recognized. For the temporary differences related to the initial recognition of the assets or liabilities incurred in thetransaction not for business combination that will not affect the accounting profits and income tax payable (or deductible loss), thecorresponding deferred income tax assets and liabilities are not recognized. The deferred income tax assets and deferred income taxliabilities are measured on the balance sheet date according to the applicable tax rate in the period of expected recovery of relevantassets of liquidation of relevant liabilities.The Company recognizes the deferred income tax assets by deductible temporary differences, within the limit of the income taxpayable that may be obtained in the future and used to offset the deductible temporary differences, the deductible loss and taxdeduction.36. Lease
(1) Identification of lease
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration within a certain period oftime. On the commencement date of the contract, the Company evaluates whether the contract is a lease or includes a lease. If a partyto the contract assigns the right to control the use of one or more identified assets within a certain period of time in exchange forconsideration, the contract is a lease or includes a lease. In order to determine whether the contract assigns the right to control the useof the identified assets within a certain period of time, the Company evaluates whether the customers in the contract is entitled toobtain almost all the economic benefits arising from the use of the identified assets during the use period, and to dominate the use ofthe identified assets during the use period.If the contract contains multiple separate leases at the same time, the Company will split the contract and conduct accountingtreatment for each separate lease. If the contract contains both leased and non-leased parts, the Company will split the leased andnon-leased parts for accounting treatment.
(2) The Company as the lessee
1) Lease recognition
On the beginning date of the lease term, the Company recognizes the right-of-use assets and lease liabilities. See Note IV "23.Right-of-use assets" and "30. Lease liabilities" for the recognition and measurement of right-of-use assets and lease liabilities.
Leading global salesfor 7 consecutive
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2) Lease change
Lease change refers to the change of lease scope, lease consideration and lease term beyond the terms of the original contract,including adding or terminating the right to use one or more leased assets, extending or shortening the lease term specified in thecontract, etc. The effective date of the lease change refers to the date when both parties reach an agreement on the lease change.If the lease changes and meets the following conditions, the Company will treat the lease change as a separate lease for accounting:
① the lease change expands the lease scope or extends the lease term by adding the right to use one or more leased assets; ② Theincreased consideration is equivalent to the amount of the separate price of the extended part of the lease scope or the extended partof the lease term as adjusted according to the conditions of the contract.If the lease change is not treated as a separate lease, on the effective date of the lease change, the Company will apportion theconsideration of the changed contract in accordance with the relevant provisions of the lease standards and re-determine the leaseterm after the change; The revised discount rate is adopted to discount the changed lease payment to re-measure the lease liabilities.When calculating the present value of the lease payment after the change, the Company adopts the interest rate implicit in leaseduring the remaining lease period as the discount rate; If the interest rate implicit in lease cannot be determined for the remaininglease period, the Company will adopt the lessee's incremental loan interest rate on the effective date of the lease change as thediscount rate. With regard to the impact of the above adjustment of lease liabilities, the Company shall distinguish the followingcircumstances for accounting treatment: ① if the lease scope is reduced or the lease term is shortened due to the lease change, thelessee shall reduce the book value of the right-of-use assets, and include the relevant gain or loss of lease under partial or completetermination into the current profit and loss. ② If the lease liabilities are re-measured due to other lease changes, the lessee shalladjust the book value of the right-of-use assets accordingly.
3) Short-term lease and low-value asset lease
The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term lease with a lease term of no morethan 12 months and low-value asset lease with a lower value when the single leased asset is a brand-new asset. The Company willrecord the lease payment of short-term lease and low-value asset lease into the relevant asset cost or current profit and loss accordingto the straight-line method or other systematic and reasonable methods during each period of the lease term.
(3) The Company as the lessor
On the basis that (1) the evaluated contract is a lease or includes a lease, the Company, as the lessor, divides the lease into financiallease and operating lease on the commencement date of the lease.If a lease substantially transfers almost all the risks and rewards related to the ownership of the leased assets, the lessor classifiessuch lease as a financial lease, and other leases other than financial leases are classified as operating leases.If a lease is under one or more of the following circumstances, the Company usually classifies it as a financial lease: ① when thelease term expires, the ownership of the leased asset is transferred to the lessee; ② The lessee has the option to purchase the leasedasset, and the purchase price is low enough compared with the fair value of the leased asset when the option is expected to beexercised, so it can be reasonably determined that the lessee will exercise the option on the commencement date of the lease; ③Although the ownership of the asset is not transferred, the lease term accounts for most of the service life of the leased asset (no less
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
than 75% of the service life of the leased asset); ④ On the commencement date of the lease, the present value of the lease receipts isalmost equal to the fair value of the leased asset (no less than 90% of the fair value of the leased asset) ; ⑤ The property of theleased asset is special. If no major transformation is made, only the lessee can use it. If one or more of the following signs exist in alease, the Company may also classify it as a financial lease: ① if the lessee cancels the lease, the loss to the lessor caused by thecancellation of the lease shall be borne by the lessee; ② The gains or losses arising from the fluctuation of the fair value of theresidual value of assets belong to the lessee; ③ The lessee has the ability to continue the lease for the next period at a rent far belowthe market level.
1) Lease accounting treatment
Initial measurementOn the beginning date of the lease term, the Company recognizes the financial lease receivables for the financial lease and terminatesthe recognition of the financial lease assets. When the Company initially measures the finance lease receivables, the net amount ofthe lease investment is taken as the entry value of the finance lease receivables.The net amount of the lease investment is the sum of the unguaranteed residual value and the present value of the lease receipts notreceived on the beginning date of the lease term discounted at the interest rate implicit in lease. Lease receipts refer to the amountthat the lessor should collect from the lessee due to the assignment of the right to use the leased assets during the lease term,including: ① fixed payment and substantial fixed payment to be paid by the lessee. If there is lease incentive, the amount related tolease incentive shall be deducted from it; ② The amount of variable lease payments depending on the index or ratio, which isdetermined at the initial measurement according to the index or ratio on the beginning date of the lease term; ③ The exercise priceof the call option, provided that it is reasonably determined that the lessee will exercise the option; ④ The amount to be paid by thelessee to exercise the option to terminate the lease, provided that the lease term reflects that the lessee will exercise the terminationoption; ⑤ The guaranteed residual value provided by the lessee, the party related to the lessee and an independent third party withthe financial ability to perform the guarantee obligation to the lessor.Subsequent measurementThe Company calculates and recognizes the interest income of each period within the lease term according to the fixed periodicinterest rate. The periodic interest rate refers to the implicit discount rate used to determine the net investment of the lease (in the caseof sublease, if the interest rate implicit in lease of the sublease cannot be determined, the discount rate of the original lease shall beadopted (adjusted according to the initial direct expenses related to the sublease)), or the change of the financial lease is notaccounted for as a separate lease, and if the change takes effect on the commencement date of the lease, the revised discount rate asdetermined according to relevant regulations is adopted when the lease will be classified as financial lease conditions.Accounting treatment of lease changeIf the financial lease changes and meets the following conditions, the Company will treat the change as a separate lease foraccounting: ① the change expands the lease scope by adding the right to use one or more leased assets; ② The increasedconsideration is equivalent to the amount of the separate price of the extended part of the lease scope as adjusted according to theconditions of the contract.
Leading global salesfor 7 consecutive
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If the change of a financial lease is not accounted for as a separate lease and meets the conditions that if the change takes effect onthe commencement date of the lease and the lease will be classified as an operating lease, the Company will account for it as a newlease from the effective date of the lease change, and take the net investment of the lease before the effective date of the lease changeas the book value of the leased asset.
2) Accounting treatment of lease
Treatment of rentDuring each period of the lease term, the Company adopts the straight-line method / other systematic and reasonable methods torecognize the lease receipts of operating lease as rental income.Incentives providedIf the rent-free period is provided, the Company will apportion the total rent according to the straight-line method / other reasonablemethods in the whole lease period without deducting the rent-free period, and the rent income shall be recognized during the rent-freeperiod. If the Company bears some expenses of the lessee, the expenses shall be deducted from the total rental income andapportioned within the lease term according to the balance of rental income after deduction.Initial direct costsThe initial direct expenses incurred by the Company in connection with the operating lease shall be capitalized to the cost of theunderlying assets of the lease and included in the current profit and loss by stages on the same recognition basis as the rental incomeduring the lease term.DepreciationFor the fixed assets in the operating leased assets, the Company adopts the depreciation policy of similar assets for depreciation;Other operating leased assets are amortized in systematic and reasonable methods.Variable lease paymentsThe variable lease payments obtained by the Company related to operating lease that are not included in the lease receipts areincluded in the current profit and loss when actually incurred.Change of operating leaseIf the operating lease is changed, the Company will treat it as a new lease for accounting since the effective date of the change. Theamount of advance receipts or lease receivables related to the lease before the change is regarded as the amount of new lease receipts.37. Other significant accounting policy and accounting estimateWhen preparing the financial statements, the management of the Company is required to use estimates and assumptions, which willhave an impact on the application of accounting policies and the amount of assets, liabilities, income and expenses. The actualsituation may differ from these estimates. The management of the Company continuously evaluates the judgment of key assumptionsand uncertainties involved in the estimates. The impact of changes in accounting estimates shall be recognized in the current and
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
future periods of the changes.The following accounting estimates and key assumptions have significant risks that will lead to major adjustments to the book valueof assets and liabilities in the future periods:
(1) Financial assets impairment
The expected credit loss model is adopted to evaluate the impairment of financial instruments in the financial assets impairment,which requires major judgment and estimates and requires considering all reasonable and substantiated information, includingforward-looking information. In making such judgments and estimates, the Company deduces the expected changes of the debtor'scredit risks based on historical data combined with economic policies, macroeconomic indicators, industrial risks, external marketenvironment, technical environment, changes in customer conditions and other factors.
(2) Provision for inventory impairment
Basis for determining the net realizable value of inventories: the net realizable value of merchandise inventory, materials for sale andother merchandise inventories directly used for sale is recognized by the amount of the estimated sale price of the inventoriessubtracted by the estimated selling expenses and related taxes; For the inventories held to perform the sales contract or labor contract,the net realizable value is calculated on the basis of contract price; If the number of the inventories held by the enterprise is greaterthan the quantity ordered in the sales contract, the net realizable value of the excessive inventories is calculated on the basis ofgeneral sale price.The method for inventory falling price reserves: it is priced according to the lower of the year-end inventory and the net realizablevalue. At the end of the period, on the basis of a comprehensive inventory of the inventories, the inventory falling price reserves arewithdrawn for the part of its cost is expected to be non-recoverable due to the inventory damage, full or partial obsolescence orselling price below the cost.If the influence factors writing down the inventory value before have disappeared, resulting in the net realizable value of theinventories higher than the book value, the amount written down shall be restored and reversed within the originally withdrawnamount of inventory falling price reserves and the amount reversed is included in current profit and loss.
(3) Accounting estimates of provision for impairment of goodwill
The Company conducts impairment test on goodwill every year. The recoverable amount of asset group or the combination of assetgroups containing goodwill is the present value of its estimated future cash flows, which need to be calculated using accountingestimates.If the management revises the gross margin ratio used in the calculation of future cash flows of asset group and the combination ofasset groups, and the revised gross margin ratio is lower than the current gross margin ratio, the Company needs to withdrawimpairment provision for the increase of goodwill.If the management revises the pre-tax discount rate used for cash flow discount, and the revised gross margin ratio is higher than thecurrent gross margin ratio, the Company needs to withdraw impairment provision for the increase of goodwill.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
If the actual gross margin ratio or pre-tax discount rate is higher or lower than the management's estimates, the Company cannotreverse the originally accrued goodwill impairment loss.
(4) Accounting estimates of impairment provisions for fixed assets
The Company conducts impairment test on fixed assets such as houses, buildings, machinery and equipment with signs ofimpairment on the balance sheet date. The recoverable amount of fixed assets is the higher of the present value of its estimated futurecash flows and the net value of the fair value of the assets minus the disposal expense, which need to be calculated using accountingestimates.If the management revises the gross margin ratio used in the calculation of future cash flows of asset group and the combination ofasset groups, and the revised gross margin ratio is lower than the current gross margin ratio, the Company needs to withdrawimpairment provision for the increase of fixed assets.If the management revises the pre-tax discount rate used for cash flow discount, and the revised gross margin ratio is higher than thecurrent gross margin ratio, the Company needs to withdraw impairment provision for the increase of fixed assets.If the actual gross margin ratio or pre-tax discount rate is higher or lower than the management's estimates, the Company cannotreverse the originally accrued impairment provisions for fixed assets.
(5) Accounting estimates for deferred income tax asset recognition
The estimation of deferred income tax assets requires an estimate of the taxable income and applicable tax rate of each year in thefuture. The realization of deferred income tax assets depends on whether the Group is likely to obtain sufficient taxable income in thefuture. Changes in future tax rates and the reversal time of temporary differences may also affect income tax expenses (income) andthe balance of deferred income tax. Changes in the above estimates may result in significant adjustments to deferred income tax.
(6) Useful life of fixed assets and intangible assets
The Company shall review the expected service life of fixed assets and intangible assets at least at the end of each year. Theestimated service life is determined by the management based on the historical experience of similar assets, with reference to theestimates commonly used in the same industry and in combination with the expected technical updates. When there are significantchanges in previous estimates, the depreciation expenses and amortization expenses for the future period shall be adjustedaccordingly.38. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
Create China’s new kitchenContent and reasons of changes in accounting policies
Content and reasons of changes in accounting policies | Approval procedures |
On December 7, 2018, the Ministry of Finance issued the “Notice on Revising and Issuing Accounting Standards for Enterprises No. 21 - Leases” (C.K. [2018] No. 35) (hereinafter referred to as the “new lease standards”). The Company has implemented the new lease standards since January 1, 2021. | Resolution of the 5th Meeting of the Fifth Board of Directors |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(2) Significant accounting estimate change
The Company has no significant accounting estimate change in the current year.
(3) Adjustment of relevant items in financial statements at the beginning of the implementation year as a result of first
implementation of new lease standards from 2021The Company has implemented the new lease standards since January 1, 2021. The retained earnings and other relevant items in thefinancial statements at the beginning of the year in which the standards are first implemented shall be adjusted according to thecumulative influence number during the first implementation of the standards, and the information of comparable periods shall not beadjusted. For the operating lease before the first implementation date, the Company measures the lease liabilities at the present valuediscounted by the lessee's incremental borrowing rate on the first implementation date according to the remaining lease payment onthe first implementation date, and makes necessary adjustments according to the amount equal to the lease liabilities and prepaid rentfor each lease. The affected report items and amounts are as follows:
1) Consolidated Balance Sheet
Create China’s new kitchenItem
Item | December 31, 2020 | January 1, 2021 | Adjusted figure |
Right-of-use assets | 15,374,577.46 | 15,374,577.46 | |
Lease liabilities | 14,705,038.35 | 14,705,038.35 | |
Non-current liabilities due within a year | 684,535.10 | 684,535.10 |
Notes to the adjustment of the consolidated balance sheet: the consolidated balance sheet increases the right-of-use assets by
RMB 15,374,577.46, the lease liabilities by RMB 14,705,038.35 and the non-current liabilities due within a year by RMB
684,535.10.
2) Balance sheet of parent company
The implementation of the new lease standards has no impact on the parent company’s financial statements on January 1, 2021
VI. Tax
1. Main tax categories and tax rates
Tax category | Taxation basis | Tax rate |
Added value tax | Income from selling commodities | 13% |
Technical service income | 6% | |
Income from house lease | 5% | |
Urban maintenance and construction tax | Turnover tax payable | 7% |
Education surcharge | Turnover tax payable | 3% |
Surcharge for local education | Turnover tax payable | 2% |
Housing property tax | 70% of original value of the property | 1.2% |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenRental income
Rental income | 12% | |
Land use tax | Total land area | 5-10 yuan/m2 |
Corporate income tax | Income tax payable | 15%, 5%, 20% |
If there are taxpayers with different enterprise income tax rates, the disclosure statement shall present
Name of taxpayer | Income tax rate |
Hangzhou ROBAM Appliances Co., Ltd. | 15% |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 15% |
Zhejiang Cooking Future Technology Co., Ltd. | 25% |
Beijing ROBAM Electric Appliance Sales Co., Ltd. | 25% |
Shanghai ROBAM Electric Appliance 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% |
2. Tax preference
(1) Preferential policies for income tax
On December 1, 2020, the Science Technology Department of Zhejiang Province, Zhejiang Provincial Department of Finance,Zhejiang Provincial Tax Service of State Taxation Administration and Zhejiang Local Taxation Bureau jointly issued a high-techenterprise certificate (No. GR202033007142) and the Company passed the high-tech enterprise identification for 3 years. Accordingto relevant regulations, after passing the high-tech enterprise identification, the Company can enjoy the relevant preferential policiesof the state on high-tech enterprises for three consecutive years (i.e., the income tax preference period from January 1, 2020 toDecember 31, 2022), and the enterprise income tax shall be levied at the rate of 15%.Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. (Hereinafter referred to as Shengzhou Kinde), a subsidiary of the Company,obtained the high-tech enterprise certificate (No. GR201933002261) jointly issued by the Science Technology Department ofZhejiang Province, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service of State Taxation Administrationon December 4, 2019 and passed the high-tech enterprise identification. The Company can enjoy the relevant preferential policies ofthe state on high-tech enterprises for three consecutive years (i.e., the income tax preference period from January 1, 2019 toDecember 31, 2021), and the enterprise income tax shall be levied at the rate of 15%.According to the Announcement [2021] No. 8 of the State Taxation Administration, Hangzhou ROBAM Fuchuang InvestmentManagement Co., Ltd., a subsidiary of the Company, includes the part of the annual taxable income tax of small meager-profitenterprises that does not exceed 1 million yuan into the taxable income at a reduced rate of 12.5%, and the enterprise income taxshall be paid at the rate of 20%.
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
(2) Preferential policies for added-value tax
According to the Notice of the State Taxation Administration of the Ministry of Finance on the Value-added Tax Policy for SoftwareProducts (C.S. [2011] No. 100), the Company's embedded software sales products enjoy the value-added tax refunded as soon as theyare collected.VII. Notes to Items in Consolidated Financial Statements
1. Monetary capital
Unit: yuan
Create China’s new kitchenItem
Item | Ending balance | Beginning balance |
Cash on hand | 80,944.99 | 110,770.11 |
Bank deposit | 3,718,304,060.33 | 3,885,907,031.42 |
Other monetary capital | 83,816,341.23 | 35,034,898.78 |
Total | 3,802,201,346.55 | 3,921,052,700.31 |
Other descriptionNote: Other monetary capital at the year end is 83,816,341.23 yuan, of which the L/C deposit of 49,905,291.59 yuan, bill acceptancedeposit of 32,307,234.61 are limited funds, Alipay balance of 1,577,495.89 yuan and Wechat balance of 26,319.14 yuan arenon-limited funds that can be withdrawn at any time. Use of restricted monetary funds
Item | Year-end balance | Year-beginning balance |
Letter of guarantee and bill acceptance security deposit | 82,212,526.20 | 34,956,186.75 |
Total | 82,212,526.20 | 34,956,186.75 |
2. Trading financial assets
Unit: yuan
Item | Ending balance | Beginning balance |
Financial assets measured with fair value and with the changes included in current profit and loss | 2,872,312,500.00 | 2,352,000,000.00 |
Where: | ||
Including: Bank financial products | 2,872,312,500.00 | 2,352,000,000.00 |
Where: | ||
Total | 2,872,312,500.00 | 2,352,000,000.00 |
3. Derivative financial assets
N/A
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: yuan
Create China’s new kitchenItem
Item | Ending balance | Beginning balance |
Bank acceptance bill | 862,581,158.56 | 850,950,227.31 |
Trade acceptance | 467,612,736.26 | 981,751,215.77 |
Total | 1,330,193,894.82 | 1,832,701,443.08 |
Unit: yuan
Category | Ending balance | Beginning balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Notes receivable of provision for bad debt by single item | 269,463,729.35 | 17.09% | 224,066,803.50 | 83.15% | 45,396,925.85 | 11,176,846.26 | 0.59% | 7,823,792.38 | 70.00% | 3,353,053.88 |
Where: | ||||||||||
Notes receivable of provision for bad debt by combination | 1,307,018,853.73 | 82.91% | 22,221,884.76 | 1.70% | 1,284,796,968.97 | 1,887,831,706.05 | 99.41% | 58,483,316.85 | 3.10% | 1,829,348,389.20 |
Where: | ||||||||||
Including: banker's acceptance bill | 862,581,158.56 | 54.72% | 862,581,158.56 | 850,950,227.31 | 44.81% | 850,950,227.31 | ||||
Commercial acceptance bill | 444,437,695.17 | 28.19% | 22,221,884.76 | 5.00% | 422,215,810.41 | 1,036,881,478.74 | 54.60% | 58,483,316.85 | 5.64% | 978,398,161.89 |
Total | 1,576,482,583.08 | 100.00% | 246,288,688.26 | 15.62% | 1,330,193,894.82 | 1,899,008,552.31 | 100.00% | 66,307,109.23 | 3.49% | 1,832,701,443.08 |
Provision for bad debt by single item:
Unit: yuan
Name | Ending balance | |||
Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Group 1 | 189,868,003.32 | 189,868,003.32 | 100.00% | Debt default |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenGroup 2
Group 2 | 43,036,416.09 | 8,607,283.21 | 20.00% | Debt extension |
Group 3 | 18,363,143.49 | 12,854,200.48 | 70.00% | It is not expected to recover it all |
Group 4 | 5,547,669.08 | 3,883,368.36 | 70.00% | It is not expected to recover it all |
Group 5 | 5,274,139.91 | 3,691,897.95 | 70.00% | It is not expected to recover it all |
Group 6 | 3,135,636.10 | 2,194,945.28 | 70.00% | It is not expected to recover it all |
Group 7 | 2,888,253.86 | 2,021,777.71 | 70.00% | It is not expected to recover it all |
Group 8 | 1,350,467.50 | 945,327.19 | 70.00% | It is not expected to recover it all |
Total | 269,463,729.35 | 224,066,803.50 | -- | -- |
Provision for bad debt by single item:
Unit: yuan
Name | Ending balance | |||
Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Banker's acceptance bill combination | 862,581,158.56 | |||
Commercial acceptance bill combination | 444,437,695.17 | 22,221,884.76 | 5.00% | |
Total | 1,307,018,853.73 | 22,221,884.76 | -- | -- |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Category | Beginning balance | Changes in amount in current period | Ending balance | |||
Provision | Recovered or reversed | Canceled after verification | Other | |||
Commercial acceptance bill | 66,307,109.23 | 179,981,579.03 | 246,288,688.26 | |||
Total | 66,307,109.23 | 179,981,579.03 | 246,288,688.26 |
Where the amount of bad debt provision recovered or transferred back is important:
□ Applicable √ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(3) Notes receivable endorsed or discounted by the Company at the end of the period and not expired yet
on the balance sheet date
Unit: yuan
Create China’s new kitchen
Item
Item | Amount with recognition terminated at the end of the period | Amount with recognition not terminated at the end of the period |
Bank acceptance bill | 24,500,000.00 | |
Trade acceptance | 2,628,497.99 | |
Total | 24,500,000.00 | 2,628,497.99 |
(4) Notes transferred to accounts receivable by the Company at the end of the period due to failure of thedrawer to perform
Unit: yuan
Item | Amount transferred to accounts receivable at the end of the period |
Trade acceptance | 969,264,960.11 |
Total | 969,264,960.11 |
5. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
Category | Ending balance | Beginning balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Accounts receivable of provision for bad debt by single item | 630,075,052.06 | 28.04% | 553,584,090.07 | 87.86% | 76,490,961.99 | 15,164,080.60 | 1.40% | 12,320,940.24 | 81.25% | 2,843,140.36 |
Accounts receivable of provision for bad debt by combination | 1,617,347,143.15 | 71.96% | 96,145,244.24 | 5.94% | 1,521,201,898.91 | 1,065,680,355.15 | 98.60% | 60,287,549.11 | 5.66% | 1,005,392,806.04 |
Accounts receivable of provision for bad debt by expected credit loss combination based on | 1,617,347,143.15 | 71.96% | 96,145,244.24 | 5.94% | 1,521,201,898.91 | 1,065,680,355.15 | 98.60% | 60,287,549.11 | 5.66% | 1,005,392,806.04 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenaging features
aging features | ||||||||||
Total | 2,247,422,195.21 | 100.00% | 649,729,334.31 | 28.91% | 1,597,692,860.90 | 1,080,844,435.75 | 100.00% | 72,608,489.35 | 6.72% | 1,008,235,946.40 |
Provision for bad debt by single item:
Unit: yuan
Name | Ending balance | |||
Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Group 1 | 470,382,848.12 | 470,382,848.12 | 100.00 | Debt default |
Group 2 | 59,399,471.06 | 11,879,894.24 | 20.00 | Debt extension |
Group 3 | 28,751,367.91 | 20,125,957.56 | 70.00 | It is not expected to recover it all |
Group 4 | 1,088,119.72 | 761,683.82 | 70.00 | It is not expected to recover it all |
Group 5 | 15,877,599.20 | 11,114,319.42 | 70.00 | It is not expected to recover it all |
Group 6 | 5,149,548.81 | 3,604,684.17 | 70.00 | It is not expected to recover it all |
Group 7 | 6,093,423.82 | 4,265,396.62 | 70.00 | It is not expected to recover it all |
Group 8 | 2,341,043.43 | 1,638,730.40 | 70.00 | It is not expected to recover it all |
Group 9 | 25,413,389.42 | 17,789,372.60 | 70.00 | It is not expected to recover it all |
Group 10 | 11,010,781.52 | 7,707,547.07 | 70.00 | It is not expected to recover it all |
Group 11 | 1,773,645.05 | 1,773,645.05 | 100.00 | Debt default |
Summary of other companies | 2,793,814.00 | 2,540,011.00 | 90.92 | It is expected that there is recovery risk |
Total | 630,075,052.06 | 553,584,090.07 | -- | -- |
Provision for bad debt by combination: accounts receivable of provision for bad debt by expected credit loss combination based onaging features
Unit: yuan
Name | Ending balance | ||
Book balance | Provision for bad debt | Accruing proportion | |
Within 1 year | 1,402,316,357.02 | 70,115,084.26 | 5.00% |
1~2 years | 195,407,077.04 | 19,540,707.71 | 10.00% |
2~3 years | 14,099,627.70 | 2,819,925.54 | 20.00% |
3~4 years | 3,389,682.32 | 1,694,841.17 | 50.00% |
4~5 years | 798,567.54 | 638,854.03 | 80.00% |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchenMore than 5 years
More than 5 years | 1,335,831.53 | 1,335,831.53 | 100.00% |
Total | 1,617,347,143.15 | 96,145,244.24 | -- |
Disclosure by aging
Unit: yuan
Aging | Book balance |
Within 1 year (including 1 year) | 2,014,007,288.17 |
Within 1 year (including 1 year) | 2,014,007,288.17 |
1~2 years | 208,993,312.07 |
2~3 years | 14,581,303.06 |
More than 3 years | 9,840,291.91 |
3~4 years | 5,529,931.39 |
4~5 years | 823,283.54 |
More than 5 years | 3,487,076.98 |
Total | 2,247,422,195.21 |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Category | Beginning balance | Changes in amount in current period | Ending balance | |||
Provision | Recovered or reversed | Canceled after verification | Other | |||
Provision for bad debt of accounts receivable | 72,608,489.35 | 579,457,824.76 | 1,034,992.00 | 1,301,987.80 | 649,729,334.31 | |
Total | 72,608,489.35 | 579,457,824.76 | 1,034,992.00 | 1,301,987.80 | 649,729,334.31 |
(3) Accounts receivable actually written off at the current period
Unit: yuan
Item | Write-off amount |
Provision for bad debt of accounts receivable | 1,301,987.80 |
(4) Receivables with top 5 ending balances by debtor
Unit: yuan
Unit name | Ending balance of | Proportion in total ending balance of | Ending balance of |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenaccounts receivable
accounts receivable | accounts receivable | bad debt provision | |
Unit 1 | 654,095,507.84 | 29.10% | 40,066,197.26 |
Unit 2 | 299,560,496.54 | 13.33% | 299,560,496.54 |
Unit 3 | 95,125,955.20 | 4.23% | 95,125,955.20 |
Unit 4 | 87,226,120.73 | 3.88% | 4,361,306.04 |
Unit 5 | 92,557,284.90 | 4.12% | 4,627,864.25 |
Total | 1,228,565,365.21 | 54.66% |
6. Receivables financing
N/A
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: yuan
Aging | Ending balance | Beginning balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 129,823,235.88 | 98.98% | 68,516,272.50 | 98.04% |
1~2 years | 1,308,725.59 | 1.00% | 1,373,126.97 | 1.96% |
2~3 years | 30,069.48 | 0.02% | ||
Total | 131,162,030.95 | -- | 69,889,399.47 | -- |
The total amount of advances to suppliers with top 5 ending balances by prepayment object in the current year was 80,310,932.31yuan, accounting for 61.23% of total number of ending balance of advances to suppliers.
8. Other receivables
Unit: yuan
Item | Ending balance | Beginning balance |
Other receivables | 73,487,381.46 | 56,589,791.38 |
Total | 73,487,381.46 | 56,589,791.38 |
1) Other receivables classified by nature
Unit: yuan
Nature of payment | Ending book balance | Beginning book balance |
Deposit and margin | 48,646,642.67 | 39,954,577.27 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenCollection by third party
Collection by third party | 39,389,486.99 | 20,064,674.31 |
Imprest | 2,785,329.49 | 4,326,156.43 |
Withheld amount | 3,224,265.49 | 2,740,994.81 |
Other | 57,881.26 | 3,306,429.16 |
Total | 94,103,605.90 | 70,392,831.98 |
2) Provision for bad debt
Unit: yuan
Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance on January 01, 2021 | 13,803,040.60 | 13,803,040.60 | ||
Balance on January 1, 2021 in current period | —— | —— | —— | —— |
Withdrawn in current period | 7,095,025.28 | 7,095,025.28 | ||
Canceled after verification in current period | 281,841.44 | 281,841.44 | ||
Balance on December 31, 2021 | 20,616,224.44 | 20,616,224.44 |
Large book balance change in the current period of provision for loss
□ Applicable √ Not applicable
Disclosure by aging
Unit: yuan
Aging | Book balance |
Within 1 year (including 1 year) | 62,712,060.79 |
Within 1 year (including 1 year) | 62,712,060.79 |
1~2 years | 6,095,331.29 |
2~3 years | 4,185,028.62 |
More than 3 years | 21,111,185.20 |
3~4 years | 3,802,805.30 |
4~5 years | 15,878,500.00 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenMore than 5 years
More than 5 years | 1,429,879.90 |
Total | 94,103,605.90 |
3) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
Category | Beginning balance | Changes in amount in current period | Ending balance | |||
Provision | Recovered or reversed | Canceled after verification | Other | |||
Provision for bad debt of other receivables | 13,803,040.60 | 7,095,025.28 | 281,841.44 | 20,616,224.44 | ||
Total | 13,803,040.60 | 7,095,025.28 | 281,841.44 | 20,616,224.44 |
4) Other receivables with top 5 ending balances by debtor
Unit: yuan
Unit name | Nature of payment | Ending balance | Aging | Proportion in total other ending balance receivable | Ending balance of bad debt provision |
Unit 1 | Collection by third party, unit security deposit | 17,510,849.30 | 0~5 years | 18.61% | 943,042.47 |
Unit 2 | Unit security deposit | 14,778,000.00 | 4~5 years | 15.70% | 11,822,400.00 |
Unit 3 | Collection by third party | 9,647,377.56 | Within 1 year | 10.25% | 482,368.88 |
Unit 4 | Collection by third party, unit security deposit | 7,733,207.76 | 0~2 years | 8.22% | 414,160.39 |
Unit 5 | Withheld amount | 2,643,369.63 | Within 1 year | 2.81% | 132,168.48 |
Total | -- | 52,312,804.25 | -- | 55.59% | 13,794,140.22 |
9. Inventory
Does the Company need to follow the disclosure requirements of real estate industryNo
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(1) Inventory classification
Unit: yuan
Create China’s new kitchen
Item
Item | Ending balance | Beginning balance | ||||
Book balance | Inventory falling price reserves or provision for impairment of contract performance costs | Book value | Book balance | Inventory falling price reserves or provision for impairment of contract performance costs | Book value | |
Raw materials | 161,795,174.65 | 161,795,174.65 | 90,099,485.06 | 90,099,485.06 | ||
Work in process | 116,573,107.77 | 116,573,107.77 | 56,669,379.52 | 56,669,379.52 | ||
Merchandise inventory | 529,957,331.64 | 28,819,579.60 | 501,137,752.04 | 356,798,655.96 | 31,299,857.11 | 325,498,798.85 |
Consumptive biological assets | 23,495,275.67 | 23,495,275.67 | 18,026,823.98 | 18,026,823.98 | ||
Contract performance cost | 48,844,764.12 | 48,844,764.12 | ||||
Semi-finished products shipped in transit | 971,605,585.98 | 51,220,027.98 | 920,385,558.00 | 895,794,857.43 | 895,794,857.43 | |
Total | 1,852,271,239.83 | 80,039,607.58 | 1,772,231,632.25 | 1,417,389,201.95 | 31,299,857.11 | 1,386,089,344.84 |
(2) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: yuan
Item | Beginning balance | Amount increased in current period | Amount decreased in current period | Ending balance | ||
Provision | Other | Reversed or written off | Other | |||
Merchandise inventory | 31,299,857.11 | 1,412,697.82 | 3,892,975.33 | 28,819,579.60 | ||
Semi-finished products shipped in transit | 51,220,027.98 | 51,220,027.98 | ||||
Total | 31,299,857.11 | 52,632,725.80 | 3,892,975.33 | 80,039,607.58 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
10. Other current assets
Unit: yuan
Create China’s new kitchenItem
Item | Ending balance | Beginning balance |
Pending deduct VAT on purchase | 3,442,185.74 | 667,378.56 |
Prepaid tax | 668,243.42 | |
Total | 4,110,429.16 | 667,378.56 |
11. Long-term equity investment
Unit: yuan
Invested unit | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the end of period | |||||||
Further investment | Capital reduction | Investment gains and losses recognized by the equity method | Adjustment of other comprehensive income | Changes in other equity | Declared payment of cash dividends or profits | Provision for impairment | Other | ||||
I. Cooperative enterprise | |||||||||||
De Dietrich Trade (Shanghai) Co., Ltd. | 3,452,769.59 | 208,930.44 | 3,661,700.03 | ||||||||
Subtotal | 3,452,769.59 | 208,930.44 | 3,661,700.03 | ||||||||
II. Joint venture | |||||||||||
Zhejiang Tingshuo Brand Operation Management Co., Ltd. | 2,000,000.00 | -256,570.12 | 1,743,429.88 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenSubtotal
Subtotal | 2,000,000.00 | -256,570.12 | 1,743,429.88 | ||||||||
Total | 3,452,769.59 | 2,000,000.00 | -47,639.68 | 5,405,129.91 |
12. Other equity instrument investments
Unit: yuan
Item | Ending balance | Beginning balance |
Suzhou Industrial Park Ruican Investment Enterprise (limited partnership) | 100,000,000.00 | |
Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | 2,116,023.22 |
Total | 2,116,023.22 | 102,116,023.22 |
Separate disclosure of the current period of non-transactional equity instruments
Unit: yuan
Item name | Recognized dividend income | Aggregate gains | Aggregate losses | Amount of other comprehensive income transferred to retained earnings | Cause for designation to measure at fair value of which changes are recorded into other comprehensive income | Causes for carryforward retained earnings of other comprehensive income |
Suzhou Industrial Park Ruican Investment Enterprise (limited partnership) | 100,000,000.00 | Held for non-trading purposes | — | |||
Shanghai MXCHIP Information Technology Co., Ltd. | 17,832,510.78 | Held for non-trading purposes | — |
13. Investment properties
(1) Investment properties using cost measurement mode
√ Applicable □ Not applicable
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Unit: yuan
Create China’s new kitchen
Item
Item | Houses and buildings | Land use right | Construction in progress | Total |
I. Original book value | ||||
1. Beginning balance | 2,686,483.26 | 2,686,483.26 | ||
2. Amount increased in current period | 18,304,840.14 | 18,304,840.14 | ||
(1) Purchased | ||||
(2) Transfer from inventory/fixed assets/construction in progress | 18,304,840.14 | 18,304,840.14 | ||
(3) Increase by business combination | ||||
3. Amount decreased in current period | 9,314,612.72 | 9,314,612.72 | ||
(1) Disposal | ||||
(2) Other transfer-out | 9,314,612.72 | 9,314,612.72 | ||
4. Ending balance | 11,676,710.68 | 11,676,710.68 | ||
II. Accumulated depreciation and amortization | ||||
1. Beginning balance | 95,481.42 | 95,481.42 | ||
2. Amount increased in current period | 864,036.59 | 864,036.59 | ||
(1) Accrual or amortization | 864,036.59 | 864,036.59 | ||
3. Amount decreased in current period | 368,703.40 | 368,703.40 | ||
(1) Disposal | 368,703.40 | 368,703.40 | ||
(2) Other transfer-out | ||||
4. Ending balance | 590,814.61 | 590,814.61 | ||
III. Provision for impairment | ||||
1. Beginning balance | ||||
2. Amount increased in current period | ||||
(1) Provision | ||||
3. Amount decreased in current period | ||||
(1) Disposal | ||||
(2) Other transfer-out |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchen
4. Ending balance | ||||
IV. Book value | ||||
1. Ending book value | 11,085,896.07 | 11,085,896.07 | ||
2. Beginning book value | 2,591,001.84 | 2,591,001.84 |
14. Fixed assets
Unit: yuan
Item | Ending balance | Beginning balance |
Fixed assets | 1,179,306,020.01 | 824,978,354.71 |
Total | 1,179,306,020.01 | 824,978,354.71 |
(1) Fixed assets
Unit: yuan
Item | Houses and building | Machinery equipment | Transportation equipment | Other equipment | Total |
I. Original book value: | |||||
1. Beginning balance | 701,928,665.91 | 617,955,333.33 | 18,885,826.18 | 78,572,369.24 | 1,417,342,194.66 |
2. Amount increased in current period | 400,651,311.17 | 68,680,891.69 | 4,085,159.49 | 9,145,740.77 | 482,563,103.12 |
(1) Purchase | 6,628,955.63 | 4,085,159.49 | 6,241,525.64 | 16,955,640.76 | |
(2) Transfer from construction in progress | 391,336,698.45 | 62,051,936.06 | 2,904,215.13 | 456,292,849.64 | |
(3) Increase by business combination | |||||
(4) Other increase | 9,314,612.72 | 9,314,612.72 | |||
3. Amount decreased in current period | 30,454,417.23 | 7,466,338.30 | 1,176,561.36 | 3,699,402.49 | 42,796,719.38 |
(1) Disposal or scrap | 30,454,417.23 | 7,466,338.30 | 1,176,561.36 | 3,699,402.49 | 42,796,719.38 |
4. Ending balance | 1,072,125,559.85 | 679,169,886.72 | 21,794,424.31 | 84,018,707.52 | 1,857,108,578.40 |
II. Accumulated |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchendepreciation
depreciation | |||||
1. Beginning balance | 240,819,699.50 | 289,865,433.64 | 11,571,868.20 | 50,106,838.61 | 592,363,839.95 |
2. Amount increased in current period | 36,800,217.67 | 56,458,688.18 | 2,291,136.46 | 9,611,071.47 | 105,161,113.78 |
(1) Provision | 36,800,217.67 | 56,458,688.18 | 2,291,136.46 | 9,611,071.47 | 105,161,113.78 |
3. Amount decreased in current period | 10,091,718.33 | 5,166,445.65 | 1,115,168.29 | 3,349,063.07 | 19,722,395.34 |
(1) Disposal or scrap | 10,091,718.33 | 5,166,445.65 | 1,115,168.29 | 3,349,063.07 | 19,722,395.34 |
4. Ending balance | 267,528,198.84 | 341,157,676.17 | 12,747,836.37 | 56,368,847.01 | 677,802,558.39 |
III. Provision for impairment | |||||
1. Beginning balance | |||||
2. Amount increased in current period | |||||
(1) Provision | |||||
3. Amount decreased in current period | |||||
(1) Disposal or scrap | |||||
4. Ending balance | |||||
IV. Book value | |||||
1. Ending book value | 804,597,361.01 | 338,012,210.55 | 9,046,587.94 | 27,649,860.51 | 1,179,306,020.01 |
2. Beginning book value | 461,108,966.41 | 328,089,899.69 | 7,313,957.98 | 28,465,530.63 | 824,978,354.71 |
(2) Fixed assets without certificate of title
Unit: yuan
Item | Book value | Reasons for not obtaining the certificate |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenof title
of title | ||
Houses and buildings | 335,356,590.18 | The newly built plant is being handled |
15. Construction in progress
Unit: yuan
Item | Ending balance | Beginning balance |
Construction in progress | 454,643,364.82 | 463,424,647.46 |
Total | 454,643,364.82 | 463,424,647.46 |
(1) Construction in progress
Unit: yuan
Item | Ending balance | Beginning balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Maoshan intelligent manufacturing base infrastructure project | 194,423,004.31 | 194,423,004.31 | 358,241,059.59 | 358,241,059.59 | ||
Shengzhou Chengnan project | 174,099,821.16 | 174,099,821.16 | 73,511,454.76 | 73,511,454.76 | ||
ROBAM Building project | 59,931,795.23 | 59,931,795.23 | 2,219,316.28 | 2,219,316.28 | ||
Project of production department 1 | 10,336,283.17 | 10,336,283.17 | ||||
Integrated range hood project | 3,256,637.20 | 3,256,637.20 | ||||
Customized management software | 3,223,516.47 | 3,223,516.47 | 3,770,316.32 | 3,770,316.32 | ||
Project of production department 3 | 2,779,911.26 | 2,779,911.26 | ||||
Project of production department 2 | 1,185,840.80 | 1,185,840.80 | 1,530,973.46 | 1,530,973.46 | ||
Black light workshop project | 14,096,794.95 | 14,096,794.95 | ||||
Riveting equipment project | 4,568,965.52 | 4,568,965.52 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchenAir line project
Air line project | 1,663,716.90 | 1,663,716.90 | ||||
Other sporadic projects | 5,406,555.22 | 5,406,555.22 | 3,822,049.68 | 3,822,049.68 | ||
Total | 454,643,364.82 | 454,643,364.82 | 463,424,647.46 | 463,424,647.46 |
(2) Current changes in major projects under construction
Unit: yuan
Item name | Budget number | Beginning balance | Amount increased in current period | Amount carried forward to fixed assets in current period | Other decreases in current period | Ending balance | Proportion of total project input to the budget | Progress of works | Source of funds |
Maoshan intelligent manufacturing base infrastructure project | 899,280,000.00 | 358,241,059.59 | 229,650,073.92 | 393,468,129.20 | 194,423,004.31 | 65.37% | 65.37% | Other | |
Shengzhou Chengnan project | 240,960,000.00 | 73,511,454.76 | 135,105,069.03 | 34,209,021.20 | 307,681.43 | 174,099,821.16 | 72.25% | 72.25% | Other |
ROBAM Building project | 708,250,000.00 | 2,219,316.28 | 57,712,478.95 | 59,931,795.23 | 8.46% | 8.46% | Other | ||
Total | 1,848,490,000.00 | 433,971,830.63 | 422,467,621.90 | 427,677,150.40 | 307,681.43 | 428,454,620.70 | -- | -- | -- |
16. Right-of-use assets
Unit: yuan
Item | Houses and buildings | Total |
I. Original book value: | ||
1. Beginning balance | 15,768,797.39 | 15,768,797.39 |
2. Amount increased in current period | 19,851,959.93 | 19,851,959.93 |
3. Amount decreased in current period | ||
4. Ending balance | 35,620,757.32 | 35,620,757.32 |
II. Accumulated depreciation | ||
1. Beginning balance | 394,219.93 | 394,219.93 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
2. Amount increased in current period
2. Amount increased in current period | 5,323,583.17 | 5,323,583.17 |
(1) Provision | 5,323,583.17 | 5,323,583.17 |
3. Amount decreased in current period | ||
(1) Disposal | ||
4. Ending balance | 5,717,803.10 | 5,717,803.10 |
III. Provision for impairment | ||
1. Beginning balance | ||
2. Amount increased in current period | ||
(1) Provision | ||
3. Amount decreased in current period | ||
(1) Disposal | ||
4. Ending balance | ||
IV. Book value | ||
1. Ending book value | 29,902,954.22 | 29,902,954.22 |
2. Beginning book value | 15,374,577.46 | 15,374,577.46 |
17. Intangible assets
(1) Intangible assets
Unit: yuan
Item | Land use right | Software | Trademark | Patent | Total |
I. Original book value | |||||
1. Beginning balance | 225,656,679.95 | 52,340,766.57 | 24,624,622.64 | 7,300,000.00 | 309,922,069.16 |
2. Amount increased in current period | 7,522,919.18 | 7,522,919.18 | |||
(1) Purchase | 7,522,919.18 | 7,522,919.18 | |||
(2) Internal R&D | |||||
(3) Increase by business combination |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
3. Amount decreased in current period | |||||
(1) Disposal | |||||
4. Ending balance | 225,656,679.95 | 59,863,685.75 | 24,624,622.64 | 7,300,000.00 | 317,444,988.34 |
II. Accumulated amortization | |||||
1. Beginning balance | 25,628,097.71 | 40,125,345.47 | 6,143,693.36 | 2,807,692.30 | 74,704,828.84 |
2. Amount increased in current period | 4,508,422.28 | 5,254,394.80 | 2,462,462.24 | 1,123,076.92 | 13,348,356.24 |
(1) Provision | 4,508,422.28 | 5,254,394.80 | 2,462,462.24 | 1,123,076.92 | 13,348,356.24 |
3. Amount decreased in current period | |||||
(1) Disposal | |||||
4. Ending balance | 30,136,519.99 | 45,379,740.27 | 8,606,155.60 | 3,930,769.22 | 88,053,185.08 |
III. Provision for impairment | |||||
1. Beginning balance | |||||
2. Amount increased in current period | |||||
(1) Provision | |||||
3. Amount decreased in current period | |||||
(1) Disposal | |||||
4. Ending balance | |||||
IV. Book value | |||||
1. Ending book value | 195,520,159.96 | 14,483,945.48 | 16,018,467.04 | 3,369,230.78 | 229,391,803.26 |
2. Beginning book value | 200,028,582.24 | 12,215,421.10 | 18,480,929.28 | 4,492,307.70 | 235,217,240.32 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
18. Goodwill
(1) Original book value of goodwill
Unit: yuan
Create China’s new kitchenInvestee name or goodwill forming matter
Investee name or goodwill forming matter | Beginning balance | Increase in current period | Decrease in current period | Ending balance | ||
By business combination | Disposal | |||||
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 80,589,565.84 | 80,589,565.84 | ||||
Total | 80,589,565.84 | 80,589,565.84 |
(2) Provision for impairment of goodwill
The Company recognizes Shengzhou Kinde as an asset group, and the asset group of goodwill at the end of the year is consistentwith the asset group recognized in the goodwill impairment test on the purchase date and previous years.Goodwill impairment test process and recognition method of key parameters (forecast period growth rate when estimating the presentvalue of future cash flow, stable period growth rate, profit rate, discount rate and forecast period) and goodwill impairment loss:
The Company entrusts Zhonghe Asset Appraisal Co., Ltd. (hereinafter referred to as Zhonghe Asset) to evaluate Shengzhou Kindeasset group to determine whether the goodwill is impaired. According to the Z.H.Z.B.Zi (2022) No.BJU3002 Valuation Report for thepurpose of goodwill impairment test issued by Zhonghe Asset, Zhonghe Asset are determined according to the five-year cash flowforecast approved by the management, and the cash flow after the five-year forecast period is calculated at a specific long-termaverage growth rate, which is calculated by using the present value model of future cash flow and based on the assumption of goingconcern, the higher of the net amount of the fair value of the asset minus the disposal expenses and the present value of the expectedfuture cash flow of the asset is used for the impairment test of goodwill. According to the test, the recoverable amount of ShengzhouKinde asset group is higher than the book value of the asset group including goodwill, and no impairment of goodwill is found.
19. Long-term unamortized expenses
Unit: yuan
Item | Beginning balance | Amount increased in current period | Amortization amount in current period | Other decreases | Ending balance |
Service charge | 317,094.77 | 771,465.52 | 170,531.21 | 918,029.08 | |
Consulting fee | 241,087.85 | 121,512.86 | 191,400.56 | 171,200.15 | |
Training membership fee | 37,665.20 | 37,665.20 | |||
Brand | 1,202,511.03 | 1,588,599.43 | 1,218,234.25 | 1,572,876.21 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenendorsement fee
endorsement fee | |||||
Office decoration fee | 3,636,099.11 | 942,907.49 | 2,693,191.62 | ||
Environmental protection fee | 30,139.14 | 30,139.14 | |||
Total | 1,798,358.85 | 6,147,816.06 | 2,560,738.71 | 5,385,436.20 |
20. Deferred income tax assets and deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: yuan
Item | Ending balance | Beginning balance | ||
Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
Provision for credit impairment | 917,479,025.92 | 138,811,114.82 | 152,718,639.18 | 24,152,559.74 |
Recognition for provisional estimate cost | 656,596,891.65 | 98,489,533.76 | 399,311,723.24 | 59,896,758.48 |
Fair value change of other equity instrument investments | 117,832,510.78 | 17,674,876.62 | 17,832,510.78 | 2,674,876.62 |
Recognition for deferred income | 102,890,393.42 | 15,433,559.00 | 121,306,538.90 | 18,195,980.84 |
Provision for impairment of assets | 80,039,607.58 | 12,005,941.14 | 31,299,857.11 | 4,694,978.56 |
Payroll payable withdrawn but not issued | 9,848,248.72 | 1,477,237.31 | 863,548.19 | 129,532.23 |
Unrealized profit of internal transaction | 6,550,213.16 | 1,637,825.81 | 10,991,208.96 | 2,747,344.24 |
Recognition for equity incentive | 3,118,765.48 | 480,458.47 | ||
Unrecognized financing expenses | 1,349,960.44 | 337,490.11 | ||
Total | 1,895,705,617.15 | 286,348,037.04 | 734,324,026.36 | 112,492,030.71 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(2) Unoffset deferred income tax liabilities
Unit: yuan
Create China’s new kitchen
Item
Item | Ending balance | Beginning balance | ||
Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
Appreciation of assets appraisal for business combination not under common control | 25,908,559.83 | 3,886,283.97 | 30,040,521.60 | 4,506,078.24 |
Taxable temporary differences due to the pretax deduction of fixed assets | 15,789,858.60 | 2,368,478.79 | 4,697,876.68 | 704,681.50 |
Total | 41,698,418.43 | 6,254,762.76 | 34,738,398.28 | 5,210,759.74 |
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: yuan
Item | Ending offset amount of deferred income tax assets and liabilities | Ending balance of deferred income tax assets and liabilities after offset | Beginning offset amount of deferred income tax assets and liabilities | Beginning balance of deferred income tax assets and liabilities after offset |
Deferred income tax assets | 286,348,037.04 | 112,492,030.71 | ||
Deferred income tax liabilities | 6,254,762.76 | 5,210,759.74 |
(4) Details of unrecognized deferred income tax assets
Unit: yuan
Item | Ending balance | Beginning balance |
Deductible loss | 18,037,908.58 | 9,798,260.49 |
Total | 18,037,908.58 | 9,798,260.49 |
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
Year | Ending amount | Beginning amount | Remark |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen2021
2021 | 39,785.54 | ||
2022 | 39,552.31 | 39,552.31 | |
2023 | 6,714.34 | 6,714.34 | |
2024 | 5,602.28 | 5,602.28 | |
2025 | 9,556,499.12 | 9,706,606.02 | |
2026 | 8,429,540.53 | ||
Total | 18,037,908.58 | 9,798,260.49 | -- |
21. Other non-current assets
Unit: yuan
Item | Ending balance | Beginning balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Advance payment for equipment | 33,649,858.27 | 33,649,858.27 | 3,624,837.56 | 3,624,837.56 | ||
Advance payment for house purchase | 3,129,005.00 | 3,129,005.00 | ||||
Advance payment for engineering | 1,690,011.17 | 1,690,011.17 | ||||
Advance payment for software | 57,442.11 | 57,442.11 | ||||
Total | 38,468,874.44 | 38,468,874.44 | 3,682,279.67 | 3,682,279.67 |
22. Short-term borrowing
(1) Classification of short-term borrowing
Unit: yuan
Item | Ending balance | Beginning balance |
Credit loan | 29,616,655.41 | 6,076,177.30 |
Total | 29,616,655.41 | 6,076,177.30 |
Description of classification of short-term borrowing
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Note: The balance of short-term borrowing is the factoring of bank accounts receivable with recourse not derecognized by theCompany.
23. Notes payable
Unit: yuan
Create China’s new kitchenType
Type | Ending balance | Beginning balance |
Banker's acceptance bill | 962,665,463.99 | 751,802,498.92 |
Total | 962,665,463.99 | 751,802,498.92 |
24. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
Item | Ending balance | Beginning balance |
Payment for materials | 1,087,160,715.37 | 950,631,079.92 |
Costs | 923,334,216.09 | 709,723,793.53 |
Project payment | 152,898,742.07 | 48,606,778.41 |
Payment for equipment | 18,506,587.47 | 14,870,556.23 |
Total | 2,181,900,261.00 | 1,723,832,208.09 |
(2) Important accounts payable with the aging more than 1 year
As of December 31, 2021, the Company's important accounts payable with an age of more than one year were 10,535,032.25 yuan,mainly for fees not yet settled.
25. Contract liabilities
Unit: yuan
Item | Ending balance | Beginning balance |
Advances from customers | 1,026,782,402.35 | 949,591,228.35 |
Total | 1,026,782,402.35 | 949,591,228.35 |
26. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Item
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
I. Short-term compensation | 123,492,155.96 | 888,568,555.09 | 852,352,778.61 | 159,707,932.44 |
II. Welfare after dismission - defined contribution plan | 2,638,235.28 | 64,090,669.18 | 61,259,411.82 | 5,469,492.64 |
Total | 126,130,391.24 | 952,659,224.27 | 913,612,190.43 | 165,177,425.08 |
(2) Presentation of short-term compensation
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
1. Wages, bonuses, allowances and subsidies | 118,930,729.93 | 763,310,743.88 | 727,095,397.98 | 155,146,075.83 |
2. Employee welfare expenses | 32,392,354.95 | 32,392,274.95 | 80.00 | |
3. Social insurance premium | 3,928,826.98 | 44,247,955.36 | 44,407,680.69 | 3,769,101.65 |
Including: medical insurance premium | 3,847,685.58 | 42,495,622.75 | 42,723,960.08 | 3,619,348.25 |
Industrial injury insurance premium | 81,141.40 | 1,752,332.61 | 1,683,720.61 | 149,753.40 |
4. Housing fund | 282,148.00 | 34,910,135.36 | 34,817,348.96 | 374,934.40 |
5. Labor union expenditure and personnel education fund | 350,451.05 | 13,707,365.54 | 13,640,076.03 | 417,740.56 |
Total | 123,492,155.96 | 888,568,555.09 | 852,352,778.61 | 159,707,932.44 |
(3) Presentation of defined contribution plans
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
1. Basic endowment insurance | 2,542,370.21 | 61,903,705.37 | 59,164,011.86 | 5,282,063.72 |
2. Unemployment insurance premium | 95,865.07 | 2,186,963.81 | 2,095,399.96 | 187,428.92 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchenTotal
Total | 2,638,235.28 | 64,090,669.18 | 61,259,411.82 | 5,469,492.64 |
27. Tax payable
Unit: yuan
Item | Ending balance | Beginning balance |
Corporate income tax | 137,979,203.70 | 111,445,197.66 |
Added value tax | 53,911,099.54 | 61,150,126.40 |
Urban maintenance and construction tax | 2,141,479.84 | 3,937,862.94 |
Individual income tax | 3,868,615.91 | 1,526,364.72 |
Education surcharge | 1,657,978.22 | 1,687,655.54 |
Surcharge for local education | 1,105,318.89 | 1,125,103.76 |
Stamp duty | 600,407.34 | 507,609.14 |
Land use tax | 4,382,947.50 | 340,344.00 |
Housing property tax | 6,555,342.60 | 166,973.35 |
Total | 212,202,393.54 | 181,887,237.51 |
28. Other payables
Unit: yuan
Item | Ending balance | Beginning balance |
Other payables | 267,781,215.06 | 242,559,615.30 |
Total | 267,781,215.06 | 242,559,615.30 |
(1) Other payables
1) Other payables listed by nature
Unit: yuan
Item | Ending balance | Beginning balance |
Margin payable | 252,335,944.60 | 234,180,292.44 |
Collections for others | 6,179,088.18 | 2,616,338.90 |
Deposit payable | 5,104,062.30 | 4,539,028.30 |
Related party transactions | 2,700,000.00 | |
Other | 1,462,119.98 | 1,223,955.66 |
Total | 267,781,215.06 | 242,559,615.30 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
2) Important other payable with the aging more than 1 year
As of December 31, 2021, the Company's important other payables with an age of more than one year were 202,878,637.95 yuan,mainly for sales deposit.
29. Non-current liabilities due within a year
Unit: yuan
Create China’s new kitchenItem
Item | Ending balance | Beginning balance |
Lease liabilities due within one year | 5,387,591.43 | 684,535.10 |
Total | 5,387,591.43 | 684,535.10 |
30. Other current liabilities
Unit: yuan
Item | Ending balance | Beginning balance |
Output tax to be carried forward | 124,284,081.56 | 116,535,407.26 |
Notes receivable not derecognized | 10,000,000.00 | |
Total | 124,284,081.56 | 126,535,407.26 |
31. Lease liabilities
Unit: yuan
Item | Ending balance | Beginning balance |
Lease payments | 37,325,149.01 | 19,997,500.29 |
Unrecognized financing expenses | -5,760,523.29 | -4,607,926.84 |
Non-current liabilities reclassified to due within a year | -5,387,591.43 | -684,535.10 |
Total | 26,177,034.29 | 14,705,038.35 |
32. Deferred income
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance | Causes |
Government subsidies | 150,163,523.90 | 18,416,145.48 | 131,747,378.42 | ||
Total | 150,163,523.90 | 18,416,145.48 | 131,747,378.42 | -- |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Projects involving government subsidies:
Unit: yuan
Create China’s new kitchenGovernment subsidy project
Government subsidy project | Year-beginning balance | Amount of additional subsidy in current year | Amount recorded in current profit and loss in current year | Year-end balance | Asset/income related |
Intelligent manufacturing, integrated standardization and new mode application project | 46,784,353.78 | 8,539,505.64 | 38,244,848.14 | Asset related | |
Production and construction project of annual production of 2.25 million kitchen appliances | 24,904,851.84 | 2,573,781.24 | 22,331,070.60 | Asset related | |
Construction project of kitchen appliance R&D, design and test center | 9,409,768.25 | 2,365,167.24 | 7,044,601.01 | Asset related | |
Subsidy for the production and construction project of annual production of 1 million kitchen appliances | 2,282,841.08 | 1,143,783.96 | 1,139,057.12 | Asset related | |
Project of annual 108 embedded kitchen electric appliance products | 4,934,334.75 | 682,491.00 | 4,251,843.75 | Asset related | |
New-generation environmentally friendly and energy-saving kitchen appliances and production line | 721,676.15 | 190,650.84 | 531,025.31 | Asset related | |
Digital intelligent manufacturing workshop of intelligent household appliances | 581,649.00 | 159,426.72 | 422,222.28 | Asset related | |
Project of annual production of 2.25 million digital workshops | 128,386.69 | 103,706.04 | 24,680.65 | Asset related | |
Recycling transformation project | 452,076.81 | 91,610.16 | 360,466.65 | Asset related | |
Subsidies for investment project of annual production of 150,000 range hoods | 88,988.91 | 58,882.80 | 30,106.11 | Asset related | |
Academician expert workstation | 256,878.32 | 46,255.68 | 210,622.64 | Asset related | |
Kitchen appliance R&D, design and test center | 42,571.60 | 7,624.80 | 34,946.80 | Asset related | |
Technological upgrading project of manufacturing enterprises | 8,300,000.00 | 8,300,000.00 | Asset related | ||
Technical transformation project with an annual output of 500,000 units | 2,591,399.07 | 374,411.16 | 2,216,987.91 | Asset related | |
Intelligent unmanned factory based on 5G and cloud technology | 19,826,762.65 | 2,078,848.20 | 17,747,914.45 | Asset related | |
Subsidy for No.M2020-09 Land, Chengnan New Area | 28,856,985.00 | 28,856,985.00 | Asset related | ||
Total | 150,163,523.90 | 18,416,145.48 | 131,747,378.42 | — |
33. Capital stock
Unit: yuan
Beginning balance | Increase/decrease (+, -) | Ending balance |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenNew issue ofshares
New issue of shares | Share donation | Share capital increase from reserved funds | Other | Subtotal | |||
Total amount of shares | 949,024,050.00 | 949,024,050.00 |
34. Capital reserve
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
Capital premium (capital stock premium) | 401,799,332.67 | 401,799,332.67 | ||
Other capital surplus | 3,118,765.48 | 3,118,765.48 | ||
Total | 401,799,332.67 | 3,118,765.48 | 404,918,098.15 |
35. Treasury stock
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
Share repurchase | 199,995,742.59 | 199,995,742.59 | ||
Total | 199,995,742.59 | 199,995,742.59 |
The increase in current year is the share repurchase plan of the Company from the secondary market for employee equity incentive.
36. Other comprehensive income
Unit: yuan
Item | Beginning balance | Amount incurred in current period | Ending balance | |||||
Amount before current income tax | Less: amount included in other comprehensive income in previous period and included in profit and loss in | Less: amount included in other comprehensive income in previous period and | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
currentperiod
current period | included in carryforward retained earnings in current period | |||||||
I. Other comprehensive income that can't be reclassified into profit and loss | -15,157,634.16 | -100,000,000.00 | -15,000,000.00 | -85,000,000.00 | -100,157,634.16 | |||
Fair value change of other equity instrument investments | -15,157,634.16 | -100,000,000.00 | -15,000,000.00 | -85,000,000.00 | -100,157,634.16 | |||
Total other comprehensive income | -15,157,634.16 | -100,000,000.00 | -15,000,000.00 | -85,000,000.00 | -100,157,634.16 |
37. Surplus reserves
Unit: yuan
Item | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
Statutory surplus reserves | 474,516,412.50 | 474,516,412.50 | ||
Total | 474,516,412.50 | 474,516,412.50 |
38. Undistributed profit
Unit: yuan
Item | Current period | Prior period |
Undistributed profit at the end of previous period before adjustment | 6,240,444,654.34 | 5,054,206,720.45 |
Undistributed profits at the beginning of the period after adjustment | 6,240,444,654.34 | 5,054,206,720.45 |
Plus: Net profits attributable to the owners of parent company in the current period | 1,331,712,059.03 | 1,660,749,958.89 |
Common stock dividends payable | 473,435,158.00 | 474,512,025.00 |
Undistributed profits at the end of the period | 7,098,721,555.37 | 6,240,444,654.34 |
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
39. Operating income and operating cost
Unit: yuan
Create China’s new kitchen
Item
Item | Amount incurred in current period | Amount incurred in previous period | ||
Income | Cost | Income | Cost | |
Main business | 9,878,609,034.58 | 4,780,326,936.38 | 7,950,757,663.78 | 3,506,245,981.19 |
Other businesses | 269,097,000.77 | 54,726,467.99 | 177,863,135.53 | 56,960,949.68 |
Total | 10,147,706,035.35 | 4,835,053,404.37 | 8,128,620,799.31 | 3,563,206,930.87 |
40. Taxes and surcharges
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Urban maintenance and construction tax | 38,432,112.18 | 34,478,037.91 |
Education surcharge | 27,451,508.66 | 24,627,169.96 |
Stamp duty | 3,168,252.51 | 2,261,813.76 |
Land use tax | 4,444,471.50 | 340,344.00 |
Housing property tax | 7,059,080.25 | 194,014.14 |
Vehicle and vessel use tax | 8,219.19 | 24,962.74 |
Other | 27,605.88 | 30,288.37 |
Total | 80,591,250.17 | 61,956,630.88 |
41. Selling expenses
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Sales and service fees | 888,105,322.12 | 717,952,394.72 |
Advertising and promotion expenses | 688,276,034.18 | 511,075,473.36 |
Employee compensation | 335,997,909.99 | 242,145,914.14 |
Booth decoration fee | 234,356,309.98 | 135,635,749.35 |
Promotion fees | 120,917,154.89 | 154,130,738.31 |
Material consumption | 70,585,682.15 | 64,982,374.37 |
Transportation expenses | 258,544,222.83 | |
Business entertainment expenses | 17,321,525.30 | 13,609,905.26 |
Traveling expense | 36,526,754.00 | 10,818,904.86 |
Rental fees | 16,683,897.40 | 13,434,292.19 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenIntermediary service charge
Intermediary service charge | 18,942,729.75 | 10,691,046.91 |
Office allowance | 12,091,581.39 | 6,327,286.95 |
Other | 14,613,138.77 | 7,616,745.62 |
Total | 2,454,418,039.92 | 2,146,965,048.87 |
42. Management costs
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation | 196,152,990.40 | 156,332,380.80 |
Depreciation and amortization | 49,553,437.40 | 44,483,666.82 |
Consulting service charge | 27,970,501.93 | 29,904,258.97 |
Maintenance expense | 18,523,798.07 | 12,833,205.67 |
Office allowance | 15,140,294.06 | 11,475,519.47 |
Rental fees | 10,256,242.02 | 7,249,751.59 |
Traveling expense | 8,295,851.23 | 6,210,428.73 |
Business entertainment expenses | 7,427,987.83 | 5,061,075.24 |
Communication expense | 5,536,487.28 | 4,880,481.20 |
Car fare | 4,010,092.59 | 3,787,560.02 |
Equity incentive fee | 3,118,765.48 | |
Material consumption | 2,410,539.20 | 3,471,188.77 |
Other | 15,365,385.14 | 11,296,245.96 |
Total | 363,762,372.63 | 296,985,763.24 |
43. Research and development expenses
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation | 178,520,125.46 | 139,169,323.42 |
Direct investment | 151,535,589.24 | 128,816,650.57 |
Depreciation and amortization | 15,344,134.84 | 15,654,469.61 |
Design fee | 7,421,984.65 | 7,071,597.30 |
Other expenses | 13,204,832.15 | 12,635,514.91 |
Total | 366,026,666.34 | 303,347,555.81 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
44. Financial expenses
Unit: yuan
Create China’s new kitchenItem
Item | Amount incurred in current period | Amount incurred in previous period |
Interest expenditure | 9,638,311.28 | 6,721,543.47 |
Less: Interest revenue | 152,136,833.79 | 160,282,611.34 |
Plus: Exchange gain or loss | 1,087,864.00 | 2,177,052.47 |
Plus: other expenses | 1,737,150.64 | 1,235,828.65 |
Total | -139,673,507.87 | -150,148,186.75 |
45. Other income
Unit: yuan
Other sources of income | Amount incurred in current period | Amount incurred in previous period |
Financial support funds for enterprise cultivation | 33,070,000.00 | 54,039,120.00 |
Amortization of deferred income | 18,416,145.48 | 16,167,324.40 |
Embedded software tax rebate | 10,979,888.36 | |
Special fund for industrial development | 7,967,840.13 | 2,749,907.00 |
Patent reward fund | 4,352,000.00 | 7,509,809.00 |
Job subsidies and social insurance subsidies | 1,038,232.33 | 4,685,321.80 |
Special financial funds | 976,752.00 | 5,650,000.00 |
Individual income tax service charge refund | 575,697.14 | 1,111,062.72 |
VAT exemption or reduction | 18,000.00 | 18,000.00 |
Other subsidies | 30,000.00 | 251,700.00 |
46. Investment income
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
long-term equity investment gains measured by employing the equity method | -47,639.68 | -715,569.20 |
Investment income from trading financial assets during the holding period | 90,550,171.74 | 28,218,702.24 |
Dividend income from other equity instrument investments in the holding | 11,985,836.92 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenperiod
period | ||
Total | 90,502,532.06 | 39,488,969.96 |
47. Credit impairment loss
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Loss on bad debts of other receivables | -7,095,025.28 | -3,511,997.51 |
Loss on bad debts of notes receivable | -179,981,579.03 | -33,316,740.51 |
Loss on bad debts of accounts receivable | -578,422,832.76 | -27,309,380.51 |
Total | -765,499,437.07 | -64,138,118.53 |
48. Assets impairment losses
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
II. Inventory falling price loss and impairment loss of contract performance costs | -52,632,725.80 | -21,977,893.76 |
Total | -52,632,725.80 | -21,977,893.76 |
49. Income from disposal of assets
Unit: yuan
Source of income from disposal of assets | Amount incurred in current period | Amount incurred in previous period |
Income from disposal of non-current assets | -2,122,173.87 | -387,844.96 |
Including: income from disposal of fixed assets | -2,122,173.87 | -387,844.96 |
Total | -2,122,173.87 | -387,844.96 |
50. Non-operating income
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period | Amounts recorded in the non-recurring gains and losses of the current period |
Government subsidies | 43,000.00 | 131,475.00 | 43,000.00 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenIncome from fines
Income from fines | 15,853.31 | 15,853.31 | |
Other | 1,720,972.55 | 952,904.00 | 1,720,972.55 |
Total | 1,779,825.86 | 1,084,379.00 |
Government subsidies included in current profit and loss:
Unit: yuan
Subsidized project | Whether the subsidy affects the profit and loss of current year | Special subsidy or not | Amount incurred in current period | Amount incurred in previous period | Asset/income related |
Subsidies for early scrapping of diesel vehicles under China III vehicle emission standards | 13,000.00 | 77,000.00 | Income related | ||
Corporate Culture Club awards and subsidies | 30,000.00 | 30,000.00 | Income related | ||
Subsidy for replacing training with work | 8,500.00 | Income related | |||
Other | 15,975.00 | Income related |
51. Non-operating expenditure
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period | Amounts recorded in the non-recurring gains and losses of the current period |
External donations | 2,000,000.00 | 2,090,000.00 | 2,000,000.00 |
Abnormal loss | 350,752.22 | 350,752.22 | |
Penalty expenditure | 178,475.20 | 178,475.20 | |
Loss on damage and scrap of non-current assets | 168,013.37 | 34,861.58 | 168,013.37 |
Other | 1,514,224.96 | 1,828,383.76 | 1,514,224.96 |
Total | 4,211,465.75 | 3,953,245.34 | 4,211,465.75 |
52. Income tax expenses
(1) Income tax expenses
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenItem
Item | Amount incurred in current period | Amount incurred in previous period |
Current income tax expenses | 341,789,501.27 | 303,369,646.88 |
Deferred income tax expenses | -157,812,003.31 | -42,122,003.14 |
Total | 183,977,497.96 | 261,247,643.74 |
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
Item | Amount incurred in current period |
Total profit | 1,532,768,920.66 |
Income tax expenses calculated at the appropriate/applicable tax rate | 229,915,338.10 |
Impact of different tax rates applied on subsidiaries | 816,537.14 |
Impact of income tax before adjustment | -4,259,934.76 |
Impact of non-deductible costs, expenses and losses | 4,970,781.68 |
Impact of deductible losses on the use of deferred income tax assets not previously recognized | -37,526.73 |
Impact of temporary difference or deductible losses on unrecognized deferred income tax assets in the current period | 2,222,067.42 |
Profits and losses of cooperative enterprise or joint venture accounted by equity method | 7,145.95 |
Tax impact of additional deduction for research and development expenses (express with "-") | -49,656,610.83 |
Income tax expenses | 183,977,497.96 |
53. Other comprehensive income
See the notes for details.
54. Cash flow statement items
(1) Other cash received related to operating activities
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Income from deposit interest | 152,136,833.79 | 160,282,611.34 |
Government subsidies | 59,051,409.96 | 127,625,980.52 |
Agent business | 17,645,868.20 | 4,896,957.44 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchenImprest
Imprest | 5,429,032.71 | 2,627,693.78 |
Margin and deposit | 21,136,563.04 | 422,768.10 |
L/C deposit | 61,930.00 | |
Other payments | 16,271,319.04 | 2,880,904.80 |
Total | 271,671,026.74 | 298,798,845.98 |
(2) Other cash paid related to operating activities
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Period charge | 2,043,557,267.21 | 1,659,646,233.71 |
Agent business | 51,345,724.50 | 44,527,246.51 |
Margin and deposit | 11,160,267.03 | 13,012,066.02 |
Deposit for L/C and acceptance bill | 54,739,852.30 | 10,192,656.02 |
Imprest | 1,154,242.51 | 621,928.41 |
Other | 19,699,160.50 | 17,300,131.65 |
Total | 2,181,656,514.05 | 1,745,300,262.32 |
(3) Other cash received related to financing activities
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Accounts receivable factoring income | 30,694,588.74 | 6,076,177.30 |
Total | 30,694,588.74 | 6,076,177.30 |
(4) Other cash paid related to financing activities
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period |
Rent | 6,046,438.38 | |
Share repurchase | 199,995,742.59 | |
Total | 206,042,180.97 |
55. Further information on cash flow statement
(1) Further information on cash flow statement
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenFurther information
Further information | Current amount | Last term amount |
1. Reconciliation from net profits to cash flows from operating activities: | -- | -- |
Net profit | 1,348,791,422.70 | 1,687,357,903.94 |
Plus: Provision for impairment of assets | 52,632,725.80 | 21,977,893.76 |
Depreciation of fixed assets, oil and gas assets and productive biological assets | 106,025,150.37 | 95,376,728.90 |
Depreciation of Right-of-use assets | 5,717,803.10 | |
Amortization of intangible assets | 13,348,356.24 | 13,619,877.40 |
Amortization of long-term deferred expenses | 2,560,738.71 | 420,355.97 |
Loss on disposal of fixed assets, intangible assets and other long-term assets (gains expressed with “-”) | 2,122,173.87 | 387,844.96 |
Loss on retirement of fixed assets (gains expressed with “-”) | 168,013.37 | 34,861.58 |
Loss from fair value changes (gains expressed with “-”) | ||
Financial expenses (gains expressed with “-”) | 10,451,521.99 | 7,763,829.30 |
Investment losses (gains expressed with “-”) | -90,502,532.06 | -39,488,969.96 |
Decreased in deferred income tax assets (increase expressed with “-”) | -158,856,006.33 | -41,614,914.62 |
Increase in deferred income tax liabilities (decrease expressed with “-”) | 1,044,003.02 | -507,088.51 |
Decrease in inventories (increase expressed with “-”) | -434,882,037.88 | -68,890,313.40 |
Decrease in operating receivables (increase expressed with “-”) | -859,544,649.72 | -681,714,318.42 |
Increase in operating payables (decrease expressed with “-”) | 600,801,099.08 | 478,438,149.28 |
Other | 765,499,437.07 | 64,138,118.53 |
Net cash flow from operating activities | 1,365,377,219.33 | 1,537,299,958.71 |
2. Significant investment and financing activities not involving cash deposit and withdrawal: | -- | -- |
Conversion of debt into capital | ||
Convertible bonds due within one year | ||
Fixed assets under financing lease | ||
3. Net changes in cash and cash equivalents: | -- | -- |
Ending balance of cash | 3,719,988,820.35 | 3,886,096,513.56 |
Less: Beginning balance of cash | 3,886,096,513.56 | 4,029,296,265.50 |
Plus: Beginning balance of cash equivalents | ||
Less: Ending balance of cash equivalents | ||
Net increase of cash and cash equivalents | -166,107,693.21 | -143,199,751.94 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(2) Composition of cash and cash equivalents
Unit: yuan
Create China’s new kitchenItem
Item | Ending balance | Beginning balance |
I. Cash | 3,719,988,820.35 | 3,886,096,513.56 |
Including: cash on hand | 80,944.99 | 110,770.11 |
Bank deposit readily available for payment | 3,718,304,060.33 | 3,885,907,031.42 |
Other monetary capital readily available for payment | 1,603,815.03 | 78,712.03 |
III. Balance of cash and cash equivalents at end of period | 3,719,988,820.35 | 3,886,096,513.56 |
56. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: yuan
Item | Ending balance in foreign currency | Conversion exchange rate | Ending balance converted to RMB |
Monetary capital | -- | -- | |
Including: USD | 6,967,391.94 | 6.3757 | 44,422,000.73 |
Euro | 3.29 | 7.2197 | 15.21 |
Accounts receivable | -- | -- | |
Including: USD | 3,449,944.52 | 6.3757 | 21,995,808.72 |
Euro | 289.60 | 7.2197 | 2,090.83 |
Advance from customers | |||
Including: EUR | 17,468.96 | 7.2197 | 126,120.65 |
57. Government subsidies
(1) Basic information of government subsidies
Unit: yuan
Type | Amount | Presented item | Amount recorded in current profit and loss |
Financial subsidies for enterprise cultivation | 33,000,000.00 | Other income | 33,000,000.00 |
Embedded software tax rebate | 10,979,888.36 | Other income | 10,979,888.36 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Performance award of Shanghai Hongkou District FinanceBureau
Performance award of Shanghai Hongkou District Finance Bureau | 2,600,000.00 | Other income | 2,600,000.00 |
Financial incentives for green factories in 2020 | 2,000,000.00 | Other income | 2,000,000.00 |
The first batch of provincial industrial Internet platform district-level award | 1,750,000.00 | Other income | 1,750,000.00 |
DIA China Design Intelligence Award | 1,000,000.00 | Other income | 1,000,000.00 |
2020 district standardization project award | 800,000.00 | Other income | 800,000.00 |
Yuhang Management Committee energy double control subsidies | 715,502.22 | Other income | 715,502.22 |
Social security subsidies | 596,281.41 | Other income | 596,281.41 |
Individual income tax service charge refund | 575,697.14 | Other income | 575,697.14 |
2020 science and technology progress award | 500,000.00 | Other income | 500,000.00 |
Subsidies from Shengzhou Administration for Market Regulation | 500,000.00 | Other income | 500,000.00 |
2019 reward funds for increasing enterprise R & D investment and project | 429,600.00 | Other income | 429,600.00 |
Subsidy for replacing training with work | 376,600.00 | Other income | 376,600.00 |
Subsidies for talents introduced by enterprises in the fourth quarter of 2020 | 330,630.00 | Other income | 330,630.00 |
R & D subsidies for Hangzhou science and technology enterprises in 2021 | 294,000.00 | Other income | 294,000.00 |
Foreign trade and economic subsidies from Yuhang Bureau of Commerce | 288,000.00 | Other income | 288,000.00 |
2020 Zhejiang manufacturing brand certification award of Linping District | 200,000.00 | Other income | 200,000.00 |
2020 district-level cultural and creative policy incentives and subsidies | 200,000.00 | Other income | 200,000.00 |
2020 national high-tech enterprise award | 200,000.00 | Other income | 200,000.00 |
Financial subsidies from Bureau of Commerce of Linping District | 200,000.00 | Other income | 200,000.00 |
Subsidies for invention patent industrialization project in 2020 | 200,000.00 | Other income | 200,000.00 |
Subsidies for per-mu leaders in Shaoxing in 2020 | 200,000.00 | Other income | 200,000.00 |
Financial support for technological innovation in 2020-2021 | 150,000.00 | Other income | 150,000.00 |
2019 industrial economic policy funds | 150,000.00 | Other income | 150,000.00 |
China Patent Excellent Award | 100,000.00 | Other income | 100,000.00 |
Subsidies for patent protection projects of district government | 90,832.00 | Other income | 90,832.00 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenSubsidies for enterprises from Yuhang District MarketSupervision Administration
Subsidies for enterprises from Yuhang District Market Supervision Administration | 87,920.00 | Other income | 87,920.00 |
Special incentive funds for supply chain innovation and application in 2021 | 70,000.00 | Other income | 70,000.00 |
Private economic development incentives | 70,000.00 | Other income | 70,000.00 |
Corporate Culture Club awards and subsidies | 30,000.00 | Other income | 30,000.00 |
Commendation and rewards for key enterprises of Shanghai Hongkou District Investment Promotion Office | 60,000.00 | Other income | 60,000.00 |
Subsidies and rewards for 5G technology application and promotion projects in 2020 | 50,000.00 | Other income | 50,000.00 |
2019 Shengzhou industrial enterprise equipment investment subsidy funds | 38,800.00 | Other income | 38,800.00 |
Top 10 industrial enterprises in 2020 | 30,000.00 | Other income | 30,000.00 |
Special patent subsidies | 28,000.00 | Other income | 28,000.00 |
Stability maintenance subsidies | 25,220.92 | Other income | 25,220.92 |
Reduction and exemption for employing unemployed personnel for half a year | 24,050.00 | Other income | 24,050.00 |
VAT exemption or reduction | 18,000.00 | Other income | 18,000.00 |
Employment subsidies for the disabled | 16,080.00 | Other income | 16,080.00 |
Financial subsidies of Administration Committee of Yuhang Development Zone | 10,000.00 | Other income | 10,000.00 |
Special fund for open economy development of the District in 2020 | 9,000.00 | Other income | 9,000.00 |
2019 innovation voucher subsidies | 8,000.00 | Other income | 8,000.00 |
Energy double control assessment incentives | 6,307.91 | Other income | 6,307.91 |
Corporate Culture Club awards and subsidies | 30,000.00 | Non-operating income | 30,000.00 |
Subsidies for early scrapping of diesel vehicles under China III vehicle emission standards | 13,000.00 | Non-operating income | 13,000.00 |
VIII. Consolidation Scope Changes
There is no change in the scope of consolidation
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
IX. IX. Interests in Other Entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Create China’s new kitchenSubsidiary
name
Subsidiary name | Main operation site | Registration place | Business nature | Shareholding ratio | Way of obtaining | |
Direct | Indirect | |||||
Beijing ROBAM Electric Appliance Sales Co., Ltd. | Beijing | Beijing | Sales of kitchen electric appliance products | 100.00% | Business combination under common control | |
Shanghai ROBAM Electric Appliance Sales Co., Ltd. | Shanghai | Shanghai | Sales of kitchen electric appliance products | 100.00% | Business combination under common control | |
Hangzhou Mingqi Electric Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen electric appliance products | 100.00% | Acquisition by establishment | |
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen electric appliance products | 51.00% | Acquisition by investment | |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | Shengzhou | Shengzhou | Production and sales of kitchen electric appliance products | 51.00% | Business combination not under common control | |
Hangzhou ROBAM Fuchuang Investment Management Co., Ltd. | Hangzhou | Hangzhou | Assets and investment management | 100.00% | Acquisition by establishment | |
Zhejiang | Shengzhou | Shengzhou | Intelligent | 35.70% | Acquisition by |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenCooking FutureTechnologyCo., Ltd.
Cooking Future Technology Co., Ltd. | kitchen design | establishment |
Note: The basis that the Company holds half or less of the voting rights of Zhejiang Cooking Future Technology Co., Ltd., but stillcontrols Zhejiang Cooking Future Technology Co., Ltd. basis: since the Company forms a control relationship with Shengzhou Kinde,it also forms a control relationship with its holding subsidiary Zhejiang Cooking Future Technology Co., Ltd.
(2) Important non-wholly owned subsidiary
Unit: yuan
Subsidiary name | Minority shareholding ratio | Current profits and losses attributable to minority shareholders | Current dividends declared to minority shareholders | Ending balance of minority equity |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 49.00% | 19,745,641.19 | 22,050,000.00 | 134,423,431.99 |
Zhejiang Cooking Future Technology Co., Ltd. | 30.00% | -2,666,277.52 | 4,608,344.98 |
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
(1) Main financial information of important non-wholly owned subsidiaries
Create China’s new kitchenSubsidiary name
Subsidiary name | Year-end balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 215,540,936.45 | 309,621,535.16 | 525,162,471.61 | 204,306,095.17 | 35,111,747.76 | 239,417,842.93 |
Zhejiang Cooking Future Technology Co., Ltd. | 18,295,624.97 | 1,856,306.24 | 20,151,931.21 | 4,790,781.30 | 4,790,781.30 |
(Continued)
Subsidiary name | Year-beginning balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 302,562,407.94 | 177,615,050.45 | 480,177,458.39 | 153,846,712.26 | 34,067,744.74 | 187,914,457.00 |
Zhejiang Cooking Future Technology Co., Ltd. | 23,647,941.39 | 56,337.05 | 23,704,278.44 | 305,536.79 | 305,536.79 |
(Continued)
Subsidiary name | Amount incurred in current year | Amount incurred in last year | ||||||
Operating income | Net profit | Total comprehensive income | Cash flow from financing activities | Operating income | Net profit | Total comprehensive income | Cash flow from financing activities | |
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 279,090,651.50 | 37,631,627.30 | 37,631,627.30 | 50,456,257.24 | 276,441,382.99 | 54,536,423.58 | 54,536,423.58 | 125,090,042.97 |
Zhejiang Cooking Future Technology Co., Ltd. | 360,328.16 | -8,887,591.74 | -8,887,591.74 | -11,991,748.70 | -751,258.35 | -751,258.35 | -615,581.14 |
Leading global salesfor 7 consecutive
years
Create China’s new kitchen
2. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
Create China’s new kitchen
Name of cooperativeenterprise or joint venture
Name of cooperative enterprise or joint venture | Main operation site | Registration place | Business nature | Shareholding ratio | Accounting treatment method of investment in cooperative enterprises or joint ventures | |
Direct | Indirect | |||||
De Dietrich Trade (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Equity method | |
Zhejiang Tingshuo Brand Operation Management Co., Ltd. | Hangzhou | Hangzhou | Retail industry | 40.00% | Equity method |
(2) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period | |
Cooperative enterprise: | -- | -- |
Total book value of investment | 3,661,700.03 | 3,452,769.59 |
Total number of following items by shareholding ratio | -- | -- |
- Net profit | 208,930.44 | -715,569.20 |
- Total comprehensive income | 208,930.44 | -715,569.20 |
Joint venture: | -- | -- |
Total book value of investment | 1,743,429.88 | |
Total number of following items by shareholding ratio | -- | -- |
- Net profit | -256,570.12 | |
- Total comprehensive income | -256,570.12 |
X. Risks Associated with Financial Instruments
The main financial instruments of the Company include accounts receivable, accounts payable, etc. The detailed description of thefinancial instruments is shown in Note VI. The risks associated with these financial instruments and the risk management policiesadopted by the Company to mitigate these risks are described below. The management of the Company shall manage and monitor
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
these risk exposures to ensure that the above risks are controlled within the limited scope.1. The Company's various risk management objectives and policies are as follows:
The Company’s risk management is to strike an appropriate balance between risks and benefits, minimize the negative impact ofrisks on the Company's business performance and maximize the interests of shareholders and other equity investors. Based on thisrisk management objective, the basic strategy of the Company's risk management is to determine and analyze various risks faced bythe Company, establish an appropriate bottom line for risk tolerance, make risk management and timely and reliably supervisevarious risks to control the risks within the limited scope.
(1) Market risk - price risk
The Company sells the products at market prices and are therefore subject to fluctuations in these prices.
(2) Credit risk
the largest credit risk exposure that may cause financial losses of the Company on December 31, 2021 mainly comes from the loss offinancial assets of the Company caused by the failure of the other party to fulfill its obligations, including the book value of financialassets recognized in the consolidated balance sheet.In order to reduce credit risks, the Company shall assign special personnel to determine the credit limit, conduct credit examinationand approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover overdue claims.Moreover, the Company shall review the recovery of each single receivable on each balance sheet date to ensure that adequate baddebt provisions are withdrawn for unrecoverable amounts. Therefore, the Company's management believes that the Company's creditrisk has been greatly reduced.The Company's working capital is deposited in banks with high credit rating, so the credit risk of working capital is low.There is no significant credit concentration risk due to the Company's risk exposure to multiple parties and customers.The Company has adopted the necessary policies to ensure that all sales customers have good credit records. The Company has nosignificant credit concentration risk.Total amount of the top 5 accounts receivable: 1,228,565,365.21 yuan.Total amount of the top 5 other receivables: 52,312,804.25 yuan.
(3) Liquidity risk:
The risk that the Company is unable to perform its financial obligations at maturity. The Company manages its liquidity risk byensuring that it has sufficient liquidity to meet maturing obligations without causing unacceptable losses or damage to the credibilityof the business. The management of the Company has conducted a detailed inspection on the working capital of the Company andregularly analyzed the debt structure, term and bank line of credit to ensure sufficient funds. The conclusion is that the Company hassufficient funds to meet the needs of the Company's short-term debts and capital expenditures. The financial assets and financialliabilities held by the Company are analyzed as follows according to the maturity of undiscounted remaining contractual obligations:
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Amount on December 31, 2021:
Create China’s new kitchenItem
Item | Within one year | One to two years | Two to five years | More than five years | Total |
Financial assets | |||||
Monetary capital | 3,802,201,346.55 | 3,802,201,346.55 | |||
Trading financial assets | 2,872,312,500.00 | 2,872,312,500.00 | |||
Notes receivable | 1,330,193,894.82 | 1,330,193,894.82 | |||
Accounts receivable | 1,597,692,860.90 | 1,597,692,860.90 | |||
Other receivables | 73,487,381.46 | 73,487,381.46 | |||
Financial liabilities | |||||
Short-term borrowing | 29,616,655.41 | 29,616,655.41 | |||
Notes payable | 962,665,463.99 | 962,665,463.99 | |||
Accounts payable | 2,181,900,261.00 | 2,181,900,261.00 | |||
Other payables | 267,781,215.06 | 267,781,215.06 | |||
Payroll payable | 165,177,425.08 | 165,177,425.08 | |||
Other current liabilities | 124,284,081.56 | 124,284,081.56 | |||
Non-current liabilities due within a year | 5,387,591.43 | 5,387,591.43 | |||
Lease liabilities | 5,861,635.26 | 9,596,932.61 | 10,718,466.42 | 26,177,034.29 |
(4) Sensitivity analysis of foreign exchange risk
The Company's exchange rate risk is mainly related to US dollar, Euro, Hong Kong dollar and other currencies. The foreignexchange risk borne by the Company is mainly related to USD (which shall be modified according to the actual situation), and themain business activities of the Company are denominated and settled in RMB. As of December 31, 2021, the Company's assets andliabilities were RMB balance, except the foreign currency balance of the assets and liabilities in Note “VI. 54 Foreign currencymonetary items”. The foreign exchange risks arising from the assets and liabilities of such foreign currency balance may have animpact on the Company's business performance.The Company pays close attention to the exchange rate movement on its foreign exchange risks. and has not taken any measures toavoid foreign exchange risks.
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
XI. Fair Value Disclosure
1. Ending fair value of assets and liabilities measured with fair value
Unit: yuan
Create China’s new kitchen
Item
Item | Ending fair value | |||
Measurement of fair value at the first level | Measurement of fair value at the second level | Measurement of fair value at the third level | Total | |
I. Continuous fair value measurement | -- | -- | -- | -- |
(I) Trading financial assets | 2,872,312,500.00 | 2,872,312,500.00 | ||
1. Financial assets measured with fair value and with the changes included in current profit and loss | 2,872,312,500.00 | 2,872,312,500.00 | ||
(III) Other equity instrument investments | 2,116,023.22 | 2,116,023.22 | ||
Total assets continuously measured at fair value | 2,874,428,523.22 | 2,874,428,523.22 | ||
II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Continuous and non-continuous measurement items of fair value at third level, qualitative and
quantitative information on valuation techniques adopted and important parameters
Item | December 31, 2021 Fair value | Valuation technique | Significant unobservable value | Relationship between unobservable value and fair value |
Bank financial products | 2,872,312,500.00 | Best estimate of fair value | Investment cost | — |
Shanghai MXCHIPInformationTechnology Co., Ltd.
Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | Best estimate of fair value | Investment cost | — |
Due to the deterioration of the business environment, business conditions and financial conditions of the invested enterprise SuzhouIndustrial Park Ruican Investment Enterprise (limited partnership), the Company takes zero yuan as a reasonable estimate of the fairvalue for measurement.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
XII. Related Parties and Related Transactions
1. Parent company of the Company
Create China’s new kitchenParent companyname
Parent company name | Registration place | Business nature | Registered capital | Shareholding ratio of the parent company in the Company | Voting right ratio of the parent company in the Company |
Hangzhou ROBAM Industrial Group Co., Ltd. | Hangzhou, Zhejiang | Investment and industrial management | RMB 60 million | 49.68% | 49.68% |
2. Situation of other related parties
Name of other related parties | Relationship of other related parties with the Company |
Hangzhou Amblem Kitchenware Co., Ltd. | Controlled by the same final controller |
Hangzhou Yuhang ROBAM Gas Station Co., Ltd. | Controlled by the same final controller |
Hangzhou Nbond Nonwoven Co., Ltd. | Controlled by the same final controller |
Hangzhou Yuhang Matt Spray Painting Factory | Other related parties |
Garden Hotel Hangzhou | Other related parties |
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Controlled by the same final controller |
Shaoxing Kinde Electric Appliance Co., Ltd. | Other related parties |
Hangzhou Guoguang Touring Commodity Co., Ltd. | Controlled by the same final controller |
Hangzhou seazons Technology Co., Ltd. | Controlled by the same final controller |
3. Related transaction
(1) Related transaction of purchases and sales of goods, provision and acceptance of services
Purchase of goods/acceptance of services
Unit: yuan
Related party | Related transaction content | Amount incurred in current period | Whether the transaction quota is exceeded | Amount incurred in previous period |
Hangzhou Yuhang Matt Spray Painting Factory | Labor receiving | 9,560,985.98 | No | 11,303,674.25 |
Hangzhou seazons Technology Co., Ltd. | Product purchase | 6,339,452.12 | No |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenHangzhou Amblem Kitchenware Co.,Ltd.
Hangzhou Amblem Kitchenware Co., Ltd. | Product purchase | 1,846,329.38 | No | 1,814,159.29 |
Hangzhou Yuhang ROBAM Gas Station Co., Ltd. | Product purchase | 854,444.59 | No | 678,662.70 |
Garden Hotel Hangzhou | Labor receiving | 201,474.34 | No | |
Hangzhou Guoguang Touring Commodity Co., Ltd. | Product purchase | 94,897.35 | No | 857,890.96 |
Hangzhou Nbond Nonwoven Co., Ltd. | Product purchase | 86,436.20 | No | 67,343.18 |
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Product purchase | 424.78 | No | 2,019,569.34 |
Selling commodities/offering labor
Unit: yuan
Related transaction of purchases and sales of goods, provision and acceptance of services
(2) Related-party lease
The Company as the lessor:
Unit: yuan
Name of lessee | Type of leased assets | Lease income recognized in the current period | Lease income recognized in the previous period |
Hangzhou ROBAM Industrial Group Co., Ltd. | House | 28,800.00 | 28,800.00 |
The Company as the lessee:
Unit: yuan
Name of lessor | Type of leased assets | Lease fee recognized in the current period | Lease fee recognized in the previous period |
Hangzhou ROBAM Industrial Group Co., Ltd. | House | 550,024.57 | 550,024.57 |
Related party
Related party | Related transaction content | Amount incurred in current period | Amount incurred in previous period |
Hangzhou Amblem Kitchenware Co., Ltd. | Selling goods | 11,650,995.14 | 6,079,306.17 |
Shaoxing Kinde Electric Appliance Co., Ltd. | Selling goods | 1,955,652.51 | |
De Dietrich Trade (Shanghai) Co., Ltd. | Selling goods | 1,190,969.50 |
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
6. Accounts receivable and payable by related parties
(1) Payables
Unit: yuan
Create China’s new kitchenItem name
Item name | Related party | Year-end balance | Year-beginning balance |
Accounts payable | Hangzhou Yuhang Matt Spray Painting Factory | 3,543,430.78 | 3,182,779.20 |
Accounts payable | Hangzhou Yuhang ROBAM Gas Station Co., Ltd. | 1,723,356.74 | 2,257,834.37 |
Accounts payable | Hangzhou Guoguang Touring Commodity Co., Ltd. | 23,605.20 | 22,336.73 |
Other payables | Hangzhou Yuhang Matt Spray Painting Factory | 200,000.00 | 200,000.00 |
Other payables | Hangzhou Guoguang Touring Commodity Co., Ltd. | 2,000.00 | 2,000.00 |
XIII. Share-based Payment
□ Applicable √ Not applicable
XIV. Commitment and Contingencies
1. Important commitment issues
Important commitments on balance sheet dateInvestment commitments to subsidiaries and associated companiesShengzhou Kinde, a subsidiary of the Company, has committed to invest 35 million yuan in Cooking Future. At present, 17.5 millionyuan has been paid in, accounting for 70% of the equity, and 17.5 million yuan has not been paid.The Company has committed to invest 4 million yuan in Tingshuo Brand, an associated company of the Company. At present, 2million yuan has been paid in, accounting for 40% of the equity, and 2 million yuan has not been paid. Except for the abovecommitments, the Company has no other major commitments as of the date of presentation of the financial statements.XV. Contingencies
(1) Important contingencies on balance sheet date
The Company had no significant contingencies to be disclosed as of December 31, 2021.
(2) Explanation even if the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
XVI. Post-balance Sheet Events
1. Stock option incentive plan
On March 31, 2022, the 9
thmeeting of the Fifth Board of Directors of the Company deliberated and approved the Company's “2022Stock Option Incentive Plan (Draft)”. The incentive plan mainly takes the operating income from 2022 to 2024 as the performanceevaluation target, and provides stock option incentive to 285 middle management and core technology (business) backbones workingin the Company (including subsidiaries), with an exercise price of 29.27 yuan/share. The above proposals need to be submitted to thegeneral meeting of shareholders of the Company for deliberation.
2. Dividend distribution
At the Company’s 10
thmeeting of the Fifth Board of Directors on April 19, 2022, the Profit Distribution Plan for 2021 was approved.Based on the total share capital of 944,094,916 as of December 31, 2021 (the existing total share capital is 949,024,050 shares,excluding 4,929,134 shares repurchased), the Company intends to pay a cash dividend of 5.00 yuan (tax included) per 10 shares to allshareholders, for a total of 472,047,458.00 yuan. The proposal needs to be reviewed and approved by the general meeting ofshareholders.The Company had no other important matters to be disclosed as of December 31, 2021.XVII. Notes on Main Items of Parent Company's Financial Statement
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
Create China’s new kitchenCategory
Category | Ending balance | Beginning balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Accounts receivable of provision for bad debt by single item | 628,127,248.06 | 29.39% | 551,636,286.07 | 87.82% | 76,490,961.99 | 11,250,779.60 | 1.13% | 8,407,639.24 | 74.73% | 2,843,140.36 |
Where: | ||||||||||
Accounts receivable of provision for bad debt by combination | 1,509,321,539.72 | 70.61% | 89,120,674.12 | 5.90% | 1,420,200,865.60 | 984,599,159.57 | 98.87% | 53,832,390.64 | 5.47% | 930,766,768.93 |
Where: | ||||||||||
Combination of related party | 13,799,399.00 | 0.64% | 13,799,399.00 | 26,572,541.50 | 2.67% | 26,572,541.50 | ||||
Accounts receivable of provision for bad debt by expected credit loss | 1,495,522,140.72 | 69.97% | 89,120,674.12 | 5.96% | 1,406,401,466.60 | 958,026,618.07 | 96.20% | 53,832,390.64 | 5.62% | 904,194,227.43 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchencombination based onaging features
combination based on aging features | ||||||||||
Total | 2,137,448,787.78 | 100.00% | 640,756,960.19 | 29.98% | 1,496,691,827.59 | 995,849,939.17 | 100.00% | 62,240,029.88 | 6.25% | 933,609,909.29 |
Provision for bad debt by single item:
Unit: yuan
Name | Ending balance | |||
Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Group 1 | 470,382,848.12 | 470,382,848.12 | 100.00 | Debt default |
Group 2 | 59,399,471.06 | 11,879,894.24 | 20.00 | Debt extension |
Group 3 | 28,751,367.91 | 20,125,957.56 | 70.00 | It is not expected to recover it all |
Group 4 | 1,088,119.72 | 761,683.82 | 70.00 | It is not expected to recover it all |
Group 5 | 15,877,599.20 | 11,114,319.42 | 70.00 | It is not expected to recover it all |
Group 6 | 5,149,548.81 | 3,604,684.17 | 70.00 | It is not expected to recover it all |
Group 7 | 6,093,423.82 | 4,265,396.62 | 70.00 | It is not expected to recover it all |
Group 8 | 2,341,043.43 | 1,638,730.40 | 70.00 | It is not expected to recover it all |
Group 9 | 25,413,389.42 | 17,789,372.60 | 70.00 | It is not expected to recover it all |
Group 10 | 11,010,781.52 | 7,707,547.07 | 70.00 | It is not expected to recover it all |
Group 11 | 1,773,645.05 | 1,773,645.05 | 100.00 | Debt default |
Summary of other companies | 846,010.00 | 592,207.00 | 70.00 | It is not expected to recover it all |
Total | 628,127,248.06 | 551,636,286.07 | -- | -- |
Provision for bad debt by combination: accounts receivable of provision for bad debt by expected credit loss combination based onaging features
Unit: yuan
Name | Ending balance | ||
Book balance | Provision for bad debt | Accruing proportion | |
Within 1 year | 1,282,814,618.48 | 64,140,730.92 | 5.00% |
1~2 years | 194,591,192.05 | 19,459,119.21 | 10.00% |
2~3 years | 13,593,353.21 | 2,718,670.64 | 20.00% |
3~4 years | 3,164,810.08 | 1,582,405.04 | 50.00% |
4~5 years | 692,092.95 | 553,674.36 | 80.00% |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenMore than 5 years
More than 5 years | 666,073.95 | 666,073.95 | 100.00% |
Total | 1,495,522,140.72 | 89,120,674.12 | -- |
Provision for bad debt by combination: accounts receivable of provision for bad debt by combination of related parties
Unit: yuan
Name | Ending balance | ||
Book balance | Provision for bad debt | Accruing proportion | |
Combination of related party | 13,799,399.00 | ||
Total | 13,799,399.00 | -- |
Unit: yuanDisclosure by aging
Unit: yuan
Aging | Book balance |
Within 1 year (including 1 year) | 1,908,295,189.63 |
Within 1 year (including 1 year) | 1,908,295,189.63 |
1~2 years | 208,042,636.08 |
2~3 years | 14,075,028.57 |
More than 3 years | 7,035,933.50 |
3~4 years | 3,850,658.15 |
4~5 years | 716,808.95 |
More than 5 years | 2,468,466.40 |
Total | 2,137,448,787.78 |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Category | Beginning balance | Changes in amount in current period | Ending balance | |||
Provision | Recovered or reversed | Canceled after verification | Other | |||
Provision for bad debt of accounts receivable | 62,240,029.88 | 578,516,930.31 | 640,756,960.19 | |||
Total | 62,240,029.88 | 578,516,930.31 | 640,756,960.19 |
(3) Receivables with top 5 ending balances by debtor
Unit: yuan
Leading global salesfor 7 consecutiveyears
Create China’s new kitchen
Create China’s new kitchen
Unit name
Unit name | Ending balance of accounts receivable | Proportion in total ending balance of accounts receivable | Ending balance of bad debt provision |
Unit 1 | 632,520,806.39 | 29.59% | 38,978,254.25 |
Unit 2 | 299,560,496.54 | 14.01% | 299,560,496.54 |
Unit 3 | 95,125,955.20 | 4.45% | 95,125,955.20 |
Unit 4 | 87,226,120.73 | 4.08% | 4,361,306.04 |
Unit 5 | 64,153,667.97 | 3.00% | 3,207,683.40 |
Total | 1,178,587,046.83 | 55.13% | -- |
2. Other receivables
Unit: yuan
Item | Ending balance | Beginning balance |
Other receivables | 66,149,239.78 | 49,092,820.31 |
Total | 66,149,239.78 | 49,092,820.31 |
1) Other receivables classified by nature
Unit: yuan
Nature of payment | Ending book balance | Beginning book balance |
Collection by third party | 39,389,486.99 | 20,064,674.31 |
Deposit and margin | 41,547,121.13 | 33,786,199.08 |
Associated contact | 4,064,000.00 | 4,064,000.00 |
Withheld amount | 2,646,050.39 | 2,256,187.63 |
Imprest | 966,513.08 | 1,383,261.26 |
Other | 6,021.99 | 3,199,125.99 |
Total | 88,619,193.58 | 64,753,448.27 |
2) Provision for bad debt
Unit: yuan
Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance on January 1, | 15,660,627.96 | 15,660,627.96 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen2021
2021 | ||||
Balance on January 1, 2021 in current period | —— | —— | —— | —— |
Withdrawn in current period | 6,809,325.84 | 6,809,325.84 | ||
Balance on December 31, 2021 | 22,469,953.80 | 22,469,953.80 |
Disclosure by aging
Unit: yuan
Aging | Book balance |
Within 1 year (including 1 year) | 57,509,276.34 |
Within 1 year (including 1 year) | 57,509,276.34 |
1~2 years | 4,670,203.22 |
2~3 years | 3,781,771.82 |
More than 3 years | 22,657,942.20 |
3~4 years | 2,345,413.80 |
4~5 years | 15,570,600.00 |
More than 5 years | 4,741,928.40 |
Total | 88,619,193.58 |
3) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
Category | Beginning balance | Changes in amount in current period | Ending balance | |||
Provision | Recovered or reversed | Canceled after verification | Other | |||
Provision for bad debt of other receivables | 15,660,627.96 | 6,809,325.84 | 22,469,953.80 | |||
Total | 15,660,627.96 | 6,809,325.84 | 22,469,953.80 |
4) Other receivables with top 5 ending balances by debtor
Unit: yuan
Leading global salesfor 7 consecutive
yearsCreate China’s new kitchen
Create China’s new kitchen
Unit name
Unit name | Nature of payment | Ending balance | Aging | Proportion in total other ending balance receivable | Ending balance of bad debt provision |
Unit 1 | Collection by third party | 17,310,849.30 | Within 1 year | 19.53% | 865,542.47 |
Unit 2 | Unit security deposit | 14,778,000.00 | 4~5 years | 16.68% | 11,822,400.00 |
Unit 3 | Collection by third party | 9,647,377.56 | Within 1 year | 10.89% | 482,368.88 |
Unit 4 | Collection by third party | 7,533,207.76 | Within 1 year | 8.50% | 376,660.39 |
Unit 5 | Loan | 4,064,000.00 | More than 5 years | 4.59% | 4,064,000.00 |
Total | -- | 53,333,434.62 | -- | 60.19% | 17,610,971.74 |
3. Long-term equity investment
Unit: yuan
Item | Ending balance | Beginning balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Investment in subsidiaries | 257,032,370.17 | 20,400,000.00 | 236,632,370.17 | 246,905,933.73 | 20,400,000.00 | 226,505,933.73 |
Investment in associated enterprises and joint enterprises | 5,405,129.91 | 5,405,129.91 | 3,452,769.59 | 3,452,769.59 | ||
Total | 262,437,500.08 | 20,400,000.00 | 242,037,500.08 | 250,358,703.32 | 20,400,000.00 | 229,958,703.32 |
(1) Investment in subsidiaries
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
Invested unit
Invested unit | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the end of period | |||
Further investment | Capital reduction | Provision for impairment | Other | ||||
Shengzhou Kinde Intelligent Kitchen Electric Co., Ltd. | 162,320,000.00 | 162,320,000.00 | |||||
Hangzhou Mingqi Electric Co., Ltd. | 51,901,780.81 | 126,436.44 | 52,028,217.25 | ||||
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 630,900.00 | 630,900.00 | 20,400,000.00 | ||||
Shanghai ROBAM Electric Appliance Sales Co., Ltd. | 5,838,272.10 | 5,838,272.10 | |||||
Beijing ROBAM Electric Appliance Sales Co., Ltd. | 5,814,980.82 | 5,814,980.82 | |||||
Hangzhou ROBAM Fuchuang Investment Management Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
Total | 226,505,933.73 | 10,126,436.44 | 236,632,370.17 | 20,400,000.00 |
(2) Investment in associated enterprises and joint enterprises
Unit: yuan
Invested entity | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the | |||||||
Further investment | Capital reduction | Investment gains and losses | Adjustment of other comprehensive income | Changes in other equity | Declared payment of cash | Provision for impairment | Other |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchen
recogniz
ed bytheequitymethod
recognized by the equity method | dividends or profits | end of period | |||||||||
I. Cooperative enterprise | |||||||||||
De Dietrich Trade (Shanghai) Co., Ltd. | 3,452,769.59 | 208,930.44 | 3,661,700.03 | ||||||||
Subtotal | 3,452,769.59 | 208,930.44 | 3,661,700.03 | ||||||||
II. Joint venture | |||||||||||
Zhejiang Tingshuo Brand Operation Management Co., Ltd. | 2,000,000.00 | -256,570.12 | 1,743,429.88 | ||||||||
Subtotal | 2,000,000.00 | -256,570.12 | 1,743,429.88 | ||||||||
Total | 3,452,769.59 | 2,000,000.00 | -47,639.68 | 5,405,129.91 |
4. Operating income and operating cost
Unit: yuan
Item | Amount incurred in current period | Amount incurred in previous period | ||
Income | Cost | Income | Cost | |
Main business | 9,034,839,040.01 | 4,512,516,514.28 | 7,371,735,814.27 | 3,327,933,213.49 |
Other businesses | 249,392,105.48 | 45,025,643.79 | 158,693,150.69 | 47,551,519.54 |
Total | 9,284,231,145.49 | 4,557,542,158.07 | 7,530,428,964.96 | 3,375,484,733.03 |
5. Investment income
Unit: yuan
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenItem
Item | Amount incurred in current period | Amount incurred in previous period |
long-term equity investment gains measured by employing the equity method | -47,639.68 | -715,569.20 |
Investment income from trading financial assets during the holding period | 86,701,654.28 | 20,859,653.65 |
Dividend income from other equity instrument investments in the holding period | 11,985,836.92 | |
Other | 22,950,000.00 | |
Total | 109,604,014.60 | 32,129,921.37 |
XVIII. Further Information
1. Current non-recurring gain and loss statement
√ Applicable □ Not applicable
Unit: yuan
Item | Amount | Description |
Profit and loss on disposal of non-current assets | -2,290,187.24 | |
Government subsidies included into the current profits and losses (except those government subsidies, which are closely related to the normal business of the Company, comply with national policies and regulations and continuously enjoyed in accordance with a certain standard quota or quantity) | 65,893,969.94 | |
Reversal of impairment provision for receivables subject to separate impairment test | 1,034,992.00 | |
Income and expenditure other than those mentioned above | -2,306,626.52 | |
Less: Amount affected by income tax | 6,738,387.65 | |
Amount of minority shareholders' equity affected | 735,018.14 | |
Total | 54,858,742.39 | -- |
2. Return on net assets and earnings per share
Reporting profit | Weighted average return on net assets | Earnings Per Share | |
Basic EPS (yuan/share) | Diluted EPS (yuan/share) | ||
Net profit attributable to common shareholders of the Company | 15.78% | 1.41 | 1.41 |
Net profit attributable to common shareholders of the Company after deduction of non-recurring | 15.13% | 1.35 | 1.35 |
Leading global salesfor 7 consecutiveyearsCreate China’s new kitchen
Create China’s new kitchenprofits and losses
3. Differences in Accounting Data under Domestic and Foreign Accounting Standards
(1) Differences between net profits and net assets in financial statements disclosed according to theInternational Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(2) Differences between net profits and net assets in financial statements disclosed according to the
Overseas Accounting Standards and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(3) Causes for differences in accounting data under domestic and foreign accounting standards. If thedifference adjustment has been made to the data audited by the overseas audit institution, the name ofthe overseas audit institution shall be indicated
4. Other