Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2021
August 2021
Chapter 1 Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, as well as the directors, supervisors andsenior management of Hangzhou Robam Appliances Co., Ltd. (the Company) hereby guarantee thatthere are no false representations, misleading statements, or material omissions in this Semi-AnnualReport (“the Report”), and are severally and jointly liable for the authenticity, accuracy andcompleteness of the information contained herein.Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’saccounting, and Zhang Guofu, the head of the accounting department (the accountant in charge)hereby declare and warrant that the financial report contained in the Report is authentic, accurate,and complete.
All the directors attended a board meeting, during which they reviewed the Report.
The Company does not plan to distribute cash dividends or bonus shares, or convert capitalreserve into capital stock.
Contents
Chapter 1 Important Notes, Contents and Interpretations ...... 1
Chapter 2 Company Profile and Major Financial Indicators ...... 5
Chapter 3 Management Discussion and Analysis ...... 8
Chapter 4 Corporate Governance ...... 16
Chapter 5 Environmental and Social Responsibilities ...... 18
Chapter 6 Significant Matters ...... 19
Chapter 7 Changes in Shares and Shareholders ...... 25
Chapter 8 Preferred Shares ...... 30
Chapter 9 Bonds ...... 31
Chapter 10 Financial Report ...... 32
Documents available for reference
I. Financial statement signed by the legal representative, the person in charge of accountingand the accounting firm principal and affixed with seal.II. Original copies of documents and announcements of the Company published in thenewspaper designated by China Securities Regulatory Commission during the ReportingPeriod.III. The Semi-Annual Report 2021 signed by the legal representative.IV. Other information.
Interpretations
Item | refer(s) to | Contents |
The Company, Company, Robam Appliances | refer to | Hangzhou Robam Appliances Co., Ltd. |
MingQi | refers to | Hangzhou MingQi Electric Co., Ltd. |
The Group | refers to | Robam Appliances, MingQi, Beijing Robam Appliances Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd., Kinde Intelligent |
Robam Group | refers to | Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company |
The reporting period | refers to | The first half of 2021 |
Kinde | refers to | Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. |
AVC | refers to | Beijing All View Cloud Data Technology Co., Ltd. |
Chapter 2 Company Profile and Major Financial Indicators
I. Company Profile
Stock abbreviation | Robam | Stock code | 002508 |
Stocks traded on | Shenzhen Stock Exchange | ||
Chinese name of the Company | 杭州老板电器股份有限公司 | ||
Short Chinese name of the Company (if any) | 老板电器 | ||
Legal representative of the Company | Ren Jianhua |
II. Contact Person and Contact Information
Secretary of the Board of Directors | Representative of securities affairs | |
Name | Wang Gang | Jiang Yu |
Contact address | No. 592, Linping Avenue, Yuhang Economic Development Zone, Hangzhou, Zhejiang Province | No. 592, Linping Avenue, Yuhang Economic Development Zone, Hangzhou, Zhejiang Province |
Telephone | 0571-86187810 | 0571-86187810 |
Fax | 0571-86187769 | 0571-86187769 |
wg@robam.com | jy@robam.com |
III. Other Information
1. Contact information
Whether the registered address, office address and zip code as well as the website and email addressof the Company changed during the reporting period?
□ Applicable √ Not Applicable
There are no changes in the registered address, office address and zip code as well as the websiteand email address of the Company during the reporting period. For details, please refer to theAnnual Report 2020.
2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□ Applicable √ Not Applicable
The location for filing the semi-annual report of the Company. For details, please refer to theAnnual Report 2020.
IV. Key Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of previous years?
□ Yes √ No
The reporting period | The same period last year | YoY change | |
Operating Income (RMB) | 4,326,082,031.62 | 3,211,172,335.79 | 34.72% |
Net profit attributable to shareholders of the listed company (RMB) | 790,388,759.79 | 612,317,249.29 | 29.08% |
Net profit attributable to shareholders of the listed company after deducting non-recurring gains/losses (RMB) | 746,385,371.21 | 551,320,432.05 | 35.38% |
Net cash flow from operating activities (RMB) | 530,226,316.50 | 407,687,133.56 | 30.06% |
Basic earnings per share (EPS) (RMB/share) | 0.83 | 0.65 | 27.69% |
Diluted EPS (RMB/share) | 0.83 | 0.65 | 27.69% |
Weighted average return on net assets | 9.49% | 8.64% | An increase of 0.85% |
End of the reporting period | End of last year | Change | |
Total assets (RMB) | 13,072,209,609.54 | 12,457,568,276.25 | 4.93% |
Net assets attributable to shareholders of the listed company (RMB) | 8,146,337,365.16 | 8,050,626,815.35 | 1.19% |
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Whether there are differences in the net profit and net asset disclosed in the FinancialReport under International Accounting Standards (IAS) and China’s accounting standards?
□ Applicable √ Not Applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under IAS andChina’s accounting standards during the reporting period.
2. Whether there are differences in the net profit and net asset disclosed in the FinancialReport under foreign accounting standards and China’s accounting standards during?
□ Applicable √ Not Applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under foreignaccounting standards and China’s accounting standards during the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not Applicable
In RMB
Item | Amount | Description |
Gains and losses on disposal of non-current assets (including the part written-off with provision for asset impairment accrued) | -2,037,766.59 |
Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s business and enjoyed by quota or ration in accordance with the unified national standard) | 55,099,765.01 | |
Other gain/loss items conforming to the definition of non-recurring gains/losses | -393,630.96 | |
Less: Affected amount of income tax | 8,184,399.67 | |
Affected amount of minority shareholders’ equity (after tax) | 480,579.21 | |
Total | 44,003,388.58 | -- |
Chapter 3 Management Discussion and Analysis
I. Main Businesses during the Reporting PeriodIn the first half year of 2021, the kitchen appliances industry continued its recovery, with rapidgrowth in all channels. In terms of the retail channel, the offline consuming willingness of theconsumers increased significantly. As shown in AVC monthly data report based on offline retailmonitoring (“AVC Offline Report”), the year-on-year (YoY) growths of the retail sales of the maincategories of kitchen appliances, i.e. range hoods and gas stoves, registered 19.4% and 12.2%respectively, reversing the trend of sharp decline in three consecutive years and achieving double-digit growth. In terms of the e-commerce channels, online consumption habits continue, drivinghigh growth in online consumption. As shown in AVC monthly data report based on online retailmonitoring (“AVC Online Report”), the year-on-year (YoY) growth of the retail sales of the kitchenappliances package registered 24.3%. In terms of the engineering channel, as shown in AVC 2021H1 China Range Hood and Stove Market Summary Report (“AVC Fine Decoration Report”), fromJanuary to June 2021, the ratio of finely decorated houses was 32%, and the matching rate of rangehood and stove was 97.3% and 95.9% respectively. The matching rate of built-in combi-steam ovenand built-in dishwasher was 2.5% and 17.6%, with YoY growth of 1.7% and 8.1% respectively.The popularity rate and package rate of fine decoration continued to rise with huge room for futureimprovements.
As a leader in the industry, the Company closely adhered to the annual operation philosophy of"building dreams and moving forward amidst difficulties", firmly seized the opportunity given byindustry concentration, steadily increased its share in the industry of traditional kitchen appliancesand made rapid breakthroughs in new kitchen categories. In the first half year of 2021, theCompany achieved operating revenue of RMB 4.326 billion, with a YoY increase of 34.72%, andnet profit attributable to shareholders of the listed company was RMB 790 million, with a YoYincrease of 29.08%, which were both significantly higher than the industry average level. As ofJune 30, 2021, according to AVC Offline Report, the market shares and market rankings of theCompany’s main product categories in terms of offline retail sales are shown in the following table:
Range hoods | Gas stove | Disinfection cabinet | Built-in combi-steam oven | Built-in electric steam oven | Built-in electric oven | Built-in dishwasher |
30.50% | 29.50% | 22.10% | 34.00% | 21.60% | 39.80% | 18.10% |
1 | 1 | 2 | 1 | 2 | 2 | 2 |
As of June 30, 2021, according to AVC Online Report, the market shares and market rankings ofthe Company’s main product categories in terms of online retail sales are shown in the followingtable:
Kitchen appliance package | 2-piece package of range hood and stove | Range hoods | Gas stove | Built-in combi-steam oven | Built-in electric steam oven | Built-in dishwasher |
28.50% | 30.00% | 17.10% | 9.8% | 13.50% | 22.5% | 6.3% |
1 | 1 | 1 | 3 | 3 | 2 | 5 |
As of May 31, 2021, according to AVC Fine Decoration Report, the market share of Robam rangehoods in the fine decoration channel was 36.5%, ranking No.1 in the industry.
In the first half year of 2021, the Company continued to increase its investment in technologyresearch and development. The performance and appearance of products in each category group
continued to be upgraded, and the "Creating New Chinese Kitchen" program was fully implemented.The Company released the standards for the 5
thgeneration of large suction hood, carried outcomprehensive upgrade of hoods in terms of smart judgment, double collection, direct suction,frequency conversion and wash-free, launched Robam dual-chamber large suction hood series, andofficially introduced the 5
thgeneration of large suction hood to Chinese kitchen. The Companyreleased the quality flame industry standard of gas stove, adopted innovative bi-directional anddouble internal flame combustion structure as well as double fixed temperature plate, and launchedRobam purple flame great fire gas stove 9B515. The Company introduced new upgraded built-incombi-steam oven series and Robam frying-steaming-baking ovenCQ926, integrating frying,steaming and baking, equipped with Pengpai Great Steam System and realizing multi-stagecombined cooking of steaming and baking. In addition, the Company released the Chinese KitchenDishwasher Technical Specifications and launched Robam Power Washing Dishwasher WB755,which is more suitable for Chinese cabinet and Chinese tableware placement and applies the four-layers three-way spraying technology to overcome the difficulty of washing and cleaning heavy oiland heavy dirt and realize washing, disinfection, drying and storage in one step. In the first half yearof 2021, the Company applied for 287 patents, including 48 invention patents, and 254 patents weregranted, including 6 invention patents. In addition, the Company led the development of fourstandards such as the Noise and Quality Evaluation Grade of Range Hoods and the Combi-steamOven; The Company participated in the development of 11 standards such as the Range Hoods andthe Technical Requirements and the Test Methods of Antibacterial and Degerming Function forDishwashers. The Company won the first prize of Science and Technology Progress of ChinaNational Light Industry Council, the second prize of Award for Scientific and TechnologicalAdvancement of Zhejiang Province, the second prize of Quality Technology Award of ChinaAssociation for Quality and other awards.In the first half year of 2021, in terms of the marketing, Robam deepened the high-endpositioning of the brand, relied on a rich product matrix and took advantage of multiple channels toprovide consumers with professional kitchen appliances solutions. In terms of the retail channel, theCompany strengthened the "Robam Four-piece" package sales strategy, focused on improving thescale and share of range hoods, and empowered its products of the second and third categories; theCompany strengthened the flat construction of KA and specialty store system, and implementeddigital reform of marketing to improve efficiency. In terms of the e-commerce channels, theCompany consolidated the advantages as one of the mainstream e-commerce platforms throughcontinuous update and iteration of new products; the Company exploited new media platforms andcarried out content-based marketing to strengthen the viscosity of brand with customers Robamcombined marketing with services, and grabbed the share in the stock market. In terms of theengineering channel, the Company continued to optimize the customer and product structure,promoted the kitchen appliances package solutions for refine decoration, and further popularizedthe application of central range hoods. As regards the innovation channel, the Company workedmore closely with leading whole house customization companies and home decoration companies,expanded the scale of long-tail customers, seized the front-end traffic entrance, andcomprehensively improved the conversion rate and matching rate. For the overseas channel, theCompany strengthened its global layout, actively responded to the risk of overseas outbreak andsteadily promoted the internationalization of the brand.
In the first half year of 2021, in terms of the production, the Company was committed toexploring a new pathway for the transformation and upgrading of Chinese high-end kitchenappliances manufacturing and creating one of the most competitive manufacturing benchmarks forthe comprehensive competitiveness of Chinese manufacturing industry. The data-driven RobamJiutian Central Digital Platform closely connected manufacturing with users and realized theintegration of industrial internet and consumer internet systems. Robam digital cooking chaincentered on Chinese cooking curve, collected cooking scenarios and user data to achieve zerodistance between R&D and users and zero distance between manufacturing and users. With the
vision of "zero emission, zero inventory and zero distance", Robam Lingdian ManufacturingSystem took data as the core to drive people and equipment and achieve the ultimate optimizationof resource allocation efficiency. Robam Future Factory is the first intelligent unmanned factory inChinese kitchen appliances industry, and the project is one of the first "future factories" in ZhejiangProvince. In addition, the building of Maoshan Intelligent Manufacturing Park Project is wellunderway. After completion, it will promote the iteration and upgrading of products and theupgrading of intelligent manufacturing, laying a solid foundation for the long-term development ofthe Company.In the first half year of 2021, in terms of the brand, Robam insisted on the concept of “CreatingNew Chinese Kitchen” to develop into the No. 1 brand in the market of Chinese high-end kitchenappliances. At for the hardware, the Company reinforced the standard solution of "New ChineseKitchen, Robam 4-piece", and continuously carried out the iteration and upgrading of its productmatrix of range hoods, gas stove, combi-steam oven and dishwasher, etc. In terms of the software,Robam established the world’s largest research library of Chinese AI cooking curves, and set up ajoint laboratory of cooking digitization together with China Household Electric Appliance ResearchInstitute to create, share, record and restore the taste of Chinese kitchens with digitization andenhance the soft power of kitchen appliances. As for activities, the Company successfully heldAWE brand exhibition as well as China Dishwasher Festival and held the news conference of NewChinese Kitchen Plan. The Company hired Xu Kai as its new kitchen spokesman, invited CCTV,academicians and experts to learn more about the brand of Robam, carried out many campaignssuch as Chinese Trendy Dinner, Creative Peach Banquet and AI Feast through multiple channels,and deepened Robam family banquet, Longing for Kitchen Festival and other thematic activities IP.In addition, Robam was the exclusive title sponsor of the reality show “It Sounds Incredible” andserved as the delicious food creativity officer of the TV shows of “The Pursuit of Happiness” togive an in-depth interpretation of the brand value of culinary creativity. It became the exclusivehousehold kitchen appliance supplier for 2022 Asian Games held in Hangzhou to facilitate thedevelopment of urban Asian Games and brand Asian Games, and help promote the Chineseculinary culture.
In the first half year of 2021, MingQi actively explored the new retail model for integratedcategories and integrated kitchens, and strived to achieve online and offline empowerment andcreate a new retail operation position. Kinde focused on product innovation and released the dualchamber integrated stove series to meet more cooking needs. Upon completion, the industrializationproject of the intelligent integrated kitchen ecology will further improve the R&D and productioncapabilities of integrated kitchen appliances.
In the first half year of 2021, the Company continued to be recognized by the capital market interms of corporate governance, internal management, shareholder returns, etc. It won a largenumber of awards, such as the "Best Board of Directors Award of Mainboard", "Best InvestorRelations Award of Mainboard" and "Best Board Secretary Award of Mainboard" at the “TianmaAward - The 12th Chinese Listed Company Investor Relations Selection” of Securities Times, toname just a few. In addition, the Company received an A grade (excellent) again in the annualinformation disclosure assessment of 2020, and has received the highest rating from ShenzhenStock Exchange for information disclosure assessment for eight consecutive years. The Companyhas been adhering to the standard operation, and will continue to make efforts in the kitchen fieldand facilitate value investment.
II. Analysis of Core Competitiveness
There is NO material change in the Company’s core competitiveness during the reportingperiod. The Company’s core competitiveness is mainly reflected in its high-end brand positioning,R&D capability for continuous innovation, comprehensive and efficient operation capability, as
shown in the Annual Report 2020.
III. Analysis of Main BusinessYear-on-year changes in key financial data
In RMB
The reporting period | The same period last year | YOY change | Reason for change | |
Operating income | 4,326,082,031.62 | 3,211,172,335.79 | 34.72% | During the reporting period, the Company’s operations at multiple categories and channels had improved significantly compared with the same period last year, and the operating costs, sale expenses and administrative expenses had increased compared with the same period last year. |
Operating costs | 1,887,148,054.31 | 1,450,728,576.58 | 30.08% | |
Sale expenses | 1,270,526,179.87 | 892,679,297.76 | 42.33% | |
Administrative expenses | 149,993,109.17 | 116,085,321.98 | 29.21% | |
Financial expense | -47,926,579.43 | -47,782,493.84 | 0.30% | |
Income tax expense | 143,489,604.07 | 111,490,061.67 | 28.70% | |
R&D input | 143,433,206.12 | 117,824,032.62 | 21.74% | |
Net cash flow from operating activities | 530,226,316.50 | 407,687,133.56 | 30.06% | During the reporting period, the company’s operating conditions improved substantially compared with the same period last year, and the operating cash flow increased. |
Net cash flow from investment activities | 214,520,601.79 | 352,943,572.24 | -39.22% | Mainly due to the increase in the amount of bank financial products purchased during the reporting period. |
Net cash flow from financing activities | -489,082,997.19 | -474,512,025.00 | 3.07% | |
Net increase in cash and cash equivalents | 255,399,364.87 | 286,659,233.75 | -10.90% |
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not Applicable
No major changes on profit composition or profit resources occurred in reporting periodComposition of operating income
In RMB
The reporting period | The same period last year | YOY change | |||
Amount | % of operating | Amount | % of operating |
income | income | ||||
Total operating income | 4,326,082,031.62 | 100% | 3,211,172,335.79 | 100% | 34.72% |
By industry | |||||
Kitchen and bathroom appliances | 4,225,828,188.22 | 97.68% | 3,146,865,561.70 | 98.00% | 34.29% |
Other operating income | 100,253,843.40 | 2.32% | 64,306,774.09 | 2.00% | 55.90% |
By product | |||||
Category 1 | |||||
Incl: Range hood | 2,091,007,767.04 | 48.35% | 1,650,449,733.67 | 51.40% | 26.69% |
Gas stove | 1,045,144,595.58 | 24.16% | 758,465,499.75 | 23.62% | 37.80% |
Disinfection cabinet | 239,178,201.99 | 5.53% | 228,310,465.33 | 7.11% | 4.76% |
Category 2 | |||||
Incl: All-purpose oven | 262,228,450.48 | 6.06% | 133,537,304.02 | 4.16% | 96.37% |
Steam oven | 80,562,429.90 | 1.86% | 85,061,189.53 | 2.65% | -5.29% |
Baking oven | 67,544,092.31 | 1.56% | 46,615,942.85 | 1.45% | 44.89% |
Category 3 | |||||
Incl: Dishwasher | 170,976,797.67 | 3.95% | 68,865,113.63 | 2.14% | 148.28% |
Water purifier | 24,371,501.10 | 0.56% | 24,211,752.65 | 0.75% | 0.66% |
Water heater | 48,894,607.25 | 1.13% | 19,183,739.79 | 0.60% | 154.88% |
Other | |||||
Integrated stove | 143,366,801.65 | 3.31% | 98,976,247.02 | 3.08% | 44.85% |
Other small appliances | 52,552,943.25 | 1.21% | 33,188,573.46 | 1.03% | 58.35% |
Other operating income | 100,253,843.40 | 2.32% | 64,306,774.09 | 2.00% | 55.90% |
By region | |||||
East China-Main Products | 2,054,958,956.16 | 47.50% | 1,543,503,690.71 | 48.07% | 33.14% |
East China-Others | 100,253,843.40 | 2.32% | 64,306,774.09 | 2.00% | 55.90% |
South China | 533,053,014.50 | 12.32% | 451,116,850.34 | 14.05% | 18.16% |
Central China | 390,795,590.34 | 9.03% | 301,333,669.68 | 9.38% | 29.69% |
North China | 457,558,221.06 | 10.58% | 292,319,457.85 | 9.10% | 56.53% |
Northeast China | 229,898,842.06 | 5.31% | 169,670,983.55 | 5.28% | 35.50% |
Northwest China | 218,086,613.97 | 5.04% | 135,468,027.41 | 4.22% | 60.99% |
Southwest China | 317,765,047.05 | 7.35% | 242,691,912.60 | 7.56% | 30.93% |
Overseas | 23,711,903.08 | 0.55% | 10,760,969.56 | 0.34% | 120.35% |
Industries, products and regions accounting for more than 10% of the Company’s operating incomeor profit
√ Applicable □ Not Applicable
In RMB
Operating income | Operating costs | Gross margin | YoY change in operating income | YoY change in operating costs | YoY change in the gross margin | |
By industry | ||||||
Kitchen and bathroom appliances | 4,225,828,188.22 | 1,861,343,526.44 | 55.95% | 34.29% | 30.17% | 1.39% |
By product | ||||||
Range hoods | 2,091,007,767.04 | 874,043,318.91 | 58.20% | 26.69% | 27.35% | -0.21% |
Gas stove | 1,045,144,595.58 | 411,330,038.38 | 60.64% | 37.80% | 27.33% | 3.23% |
By region | ||||||
East China | 2,054,958,956.16 | 861,626,488.59 | 58.07% | 33.14% | 25.30% | 2.62% |
South China | 533,053,014.50 | 251,004,993.05 | 52.91% | 18.16% | 17.54% | 0.25% |
North China | 457,558,221.06 | 190,253,209.81 | 58.42% | 56.53% | 48.65% | 2.20% |
IV. Analysis of Non-core Business
□ Applicable √ Not Applicable
V. Analysis of Assets and Liabilities
1. Significant changes in assets composition
In RMB
End of the reporting period | End of last year | Change in percentage | Note on significant changes | |||
Amount | % of total assets | Amount | % of total assets | |||
Cash and cash equivalents | 4,190,050,005.34 | 32.05% | 3,921,052,700.31 | 31.48% | 0.57% | |
Accounts receivable | 988,037,922.96 | 7.56% | 1,008,235,946.40 | 8.09% | -0.53% | |
Inventory | 1,578,814,810.48 | 12.08% | 1,386,089,344.84 | 11.13% | 0.95% | |
Investment real estate | 18,576,015.36 | 0.14% | 2,591,001.84 | 0.02% | 0.12% | |
Long-term equity investment | 2,012,699.52 | 0.02% | 3,452,769.59 | 0.03% | -0.01% | |
Fixed assets | 922,791,998.04 | 7.06% | 824,978,354.71 | 6.62% | 0.44% | |
Construction in process | 515,737,483.33 | 3.95% | 463,424,647.46 | 3.72% | 0.23% | |
Right of use assets | 20,079,054.20 | 0.15% | 0.00 | 0.00% | 0.15% | |
Short-term borrowings | 11,913,223.08 | 0.09% | 6,076,177.30 | 0.05% | 0.04% | |
Contract liabilities | 1,032,445,046.81 | 7.90% | 949,591,228.35 | 7.62% | 0.28% | |
Lease liabilities | 18,756,723.23 | 0.14% | 0.00 | 0.00% | 0.14% |
2. Main overseas assets
□ Applicable √ Not Applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not Applicable
4. Restricted asset rights by the end of the reporting periodN/A
VI. Analysis of Investment
1. Overview
□ Applicable √ Not Applicable
2. Major equity investments obtained during the reporting period
□ Applicable √ Not Applicable
3. Major ongoing non-equity investments during the reporting period
□ Applicable √ Not Applicable
4. Financial asset investment
(1) Securities investment
□ Applicable √ Not Applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□ Applicable √ Not Applicable
The Company had no derivatives investment during the reporting period.
VII. Sale of Major Assets and Equities
1. Sale of major assets
□ Applicable √ Not Applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□ Applicable √ Not Applicable
VIII. Analysis of Main Holding and Joint-stock Companies
□ Applicable √ Not Applicable
The Company has no information on main holding and joint-stock companies that should bedisclosed during the reporting period.
IX. Structured Entities Controlled by the Company
□ Applicable √ Not Applicable
X. Risks facing and countermeasures taken by the Company
(1) Risk of fluctuations in the real estate market
The Company is long engaged in the kitchen business, offering integrated solutions for built-inkitchen appliances, such as range hoods, gas stoves, disinfection cabinets, combi-steam oven, steamovens, baking ovens, dishwashers, water purifiers, integrated stoves, purified sinks, etc. Thedemands for kitchen appliances are generated in the kitchen renovation after the purchase of thehouse, with certain "decoration" and "furniture" attributes. At present, consumers are still mainlybuying new kitchen appliances rather than renewing their existing kitchen appliances at home, sotheir demand is affected by the fluctuation of the real estate market. The Company has certain anti-fluctuation ability by virtue of its market leadership, although fluctuations in the real estate marketwill still have an impact on the Company’s operating results.
(2) Risk of price fluctuation of raw materials
The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet,copper and glass, etc., whose price fluctuations will directly affect the cost of the Company’sproducts and in turn have an impact on its profitability. From the fourth quarter of 2020 to the firsthalf of 2021, the prices of major raw materials have increased significantly, affecting theCompany’s operating results. If the prices of major raw materials continue to be high or continue torise in the second half of 2021, it will have a greater impact on the Company’s operating results.
(3) Risk of intensified market competition
In recent years, due to the recession in demand caused by real estate regulation, the entry ofcomprehensive home appliance brands, Internet brands and other companies, the marketcompetition in the kitchen appliances industry has become increasingly fierce, and theintensification of market competition will have a certain impact on the Company’s operating results.
Chapter 4 Corporate Governance
I. Annual General Meeting of Shareholders and Extraordinary General Meeting ofShareholders during the Reporting Period
1. Shareholders’ meeting during the reporting period
Session of meeting | Type of meeting | Proportion of attending investors | Date of meeting | Date of disclosure | Resolutions |
2020 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 65.90% | May 19, 2021 | May 20, 2021 | For details, please refer to the relevant formulation disclosure media and the Announcement of Resolutions of the 2020 Extraordinary General Meeting of Shareholders of Robam Appliances (Announcement No. 2021-037) published on www.cninfo.com.cn. |
The first extraordinary general meeting of shareholders in 2021 | Extraordinary general meeting of shareholders | 54.62% | April 30, 2021 | May 6, 2021 | For details, please refer to the relevant formulation disclosure media and the Announcement of Resolutions of the 1st Extraordinary General Meeting of Shareholders of Robam Appliances in 2021 (Announcement No. 2021-031) published on www.cninfo.com.cn. |
2. Preferred shareholders with voting rights recovered requested to convene anextraordinary general meeting of shareholders
□ Applicable √ Not Applicable
II. Changes in Directors, Supervisors and Senior Management
□ Applicable √ Not Applicable
There was no change in directors, supervisors, and senior management of the Company during thereporting period. For details, please refer to the Annual Report 2020.
III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during theReporting Period
□ Applicable √ Not Applicable
The Company has no plans of distributing cash dividends or bonus shares, or converting capitalreserve into capital stock for the first half of 2021.
IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or otherEmployee Incentives
√ Applicable □ Not Applicable
1. On April 14, 2021, the Company held the Fourth Meeting of the Fifth Session of theBoard of Directors, during which the Proposal on 2021 Stock Option Incentive Plan (Draft) of theCompany and Its Summary and its Summary and other related proposals were deliberated andapproved, and the independent directors expressed their independent opinions on and approved thematters related to the Company’s stock option incentive plan. The Fourth Meeting of the FifthSession of the Board of Supervisors of the Company deliberated and approved the above-mentionedproposal and expressed its concurring opinion. The Company disclosed the above matters on April15, 2021.
2. From April 15, 2021 to April 24, 2021, the Company internally disclosed the names andtitles of the incentive targets of the stock option incentive plan. On April 27, 2021, the Company’sBoard of Supervisors published the Review Opinions of the Board of Supervisors on the List ofIncentive Targets of the Stock Option Incentive Plan in 2021 and Explanation on the Publicity. Onthe same day, the Company disclosed the Self-inspection Report on the Purchase and Sale of theCompany’s Shares by Insiders and Incentive Targets of the Stock Option Incentive Plan in 2021.
3. On April 30, 2021, the Company held the first extraordinary general meeting ofshareholders in 2021, and deliberated and adopted the Proposal on 2021 Stock Option IncentivePlan (Draft) of the Company and Its Summary and its Summary and other related proposals. Theplan was approved by the first extraordinary general meeting of shareholders in 2021, and the Boardof Directors was authorized to determine the stock option grant date when stock option will begranted to the incentive targets when they are eligible and all matters relevant to the grant of stockoption shall be handled.
4. On May 10, 2021, the Sixth Meeting of the Fifth Session of the Board of Directors and theSixth Meeting of the Fifth Session of the Board of Supervisors of the Company deliberated andapproved the Proposal on the Granting Stock Options to Incentive Targets. The Board ofSupervisors verified the list of incentive targets again and expressed its agreement, and theindependent directors of the Company expressed their independent opinion on it.
5. On June 9, 2021, the Company completed the registration of stock option grant under theStock Option Incentive Plan in 2021. Please refer to the Announcement of Completion ofRegistration of Stock Option Grant under the Stock Option Incentive Plan in 2021 (AnnouncementNo.: 2021-041) for details.
Chapter 5 Environmental and Social Responsibilities
I. Major Environmental IssuesWhether the listed company and its subsidiaries are the key pollution-discharging units announcedby the environmental protection authorities.
□ Yes √ No
II. Social ResponsibilityThe Company actively responds to the national goal of achieving a moderately prosperoussociety by 2020, as well as the call to achieve rural revitalization and win the anti-poverty war, andstrives to optimize and integrate resources and create the greatest synergy to achieve targetedpoverty alleviation. In the first half of 2021, Robam Charity Foundation carried out projects such asserious illness assistance, hardship assistance, poverty alleviation in Ningxian County and DiebuCounty in Gansu Province, poverty relief in Tianjin Jinnan District and charity assistance in poorvillages in Badong County, with donations totaling more than RMB 500,000. In addition, on everyMarch 5th Lei Feng Remembrance Day, Children’s Day, Double Ninth Festival and other holidays,Robam also actively organizes public welfare activities to send warmth and care to the generalpublic, children and elderly people of no family, taking practical action to repay society and being awell-respected enterprise.
Chapter 6 Significant Matters
I. Commitments made by the Company’s actual controllers, shareholders, affiliates,purchasers and the Company itself and other relevant parties already fulfilled during thereporting period and not yet fulfilled at the end of the reporting period
√ Applicable □ Not Applicable
Commitment | Committing Party | Commitment Type | Content of Commitment | Time of Commitment | Term of Commitment | Performance |
Commitment made during initial public offering or re-financing | Directors, supervisors and senior management directly and indirectly holding shares of the Company | Commitment on restriction for sales of shares | Upon the expiration of the above 36-month restricted sales period, the shares transferred by any of them each year shall not exceed 25% of the total shares of the Company held directly or indirectly by him/her; and shall not transfer the shares of the Company held directly or indirectly by him/her within half year after leaving the Company | November 23, 2010 | Long-term commitment | Strict performance |
Hangzhou Robam Industrial Group Co., Ltd.: Ren Jianhua | Commitment on avoiding horizontal competition | 1. The Company/I and other companies under the Company’s/my control do not and will not, directly or indirectly engage in any activities which are in horizontal competition with existing and future businesses of ROBAM and its holding subsidiaries; 2. If any business opportunities obtained from any third party by the Company/I and the Company/other companies under | November 23, 2010 | Long-term commitment | Strict performance |
my control constitute or may constitute substantial competition with the businesses of ROBAM, the Company/I will immediately notify ROBAM and transfer such opportunities to ROBAM; 3. The Company/I and the Company/other companies under my control promise not to provide any technical information, process flow, sales channel and other trade secrets to any other company, enterprise, organization or individual whose business is in competition with those of ROBAM. | ||||||
Other commitments made to small and medium shareholders of the Company | Company | Dividend | The total distributed profits for three (3) consecutive years shall be no less than 40% of the yearly average attributable profits achieved by the Company in such three (3) years. | April 10, 2018 | Three years | Strict performance |
Whether the commitments are performed on time | Yes |
II. Non-operating Occupation of Funds of the Listed Company by the ControllingShareholder and Other Affiliated Parties
□ Applicable √ Not Applicable
There was no non-operating occupation of funds of the listed company by the controllingshareholder and other affiliated parties during the reporting period.
III. Illegal External Guarantee
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.
IV. Appointment and Dismissal of Accounting FirmWhether the semi-annual financial report has been audited
□ Yes √ No
The semi-annual financial report of the Company has not been audited.
V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standardAudit Report” Issued by the Accounting Firm for the Reporting Period
□ Applicable √ Not Applicable
VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the LastYear
□ Applicable √ Not Applicable
VII. Matters Related to Bankruptcy Reorganization
□ Applicable √ Not Applicable
The Company did not have any matters related to bankruptcy reorganization during the reportingperiod.
VIII. Litigation MattersMaterial litigation and arbitration
□ Applicable √ Not Applicable
The Company had no major litigation and arbitration during the reporting period.Other litigation matters
□ Applicable √ Not Applicable
IX. Punishment and Rectification
□ Applicable √ Not Applicable
There was no punishment or rectification during the reporting period.
X. Integrity Conditions of the Company and its Controlling Shareholders
□ Applicable √ Not Applicable
XI. Major Connected Transactions
1. Connected transactions concerning daily operations
□ Applicable √ Not Applicable
The Company had no connected transactions concerning daily operations during the reportingperiod.
2. Connected transactions related to the acquisition or sales of assets or equity
□ Applicable √ Not Applicable
The Company had no connected transactions related to the acquisition or sales of assets or equityduring the reporting period.
3. Connected transactions related to joint outward investment
□ Applicable √ Not Applicable
The Company had no connected transactions related to joint outward investment during thereporting period.
4. Connected transactions on credit and debt
□ Applicable √ Not Applicable
The Company had no connected transactions on credit and debt during the reporting period.
5. Transactions with connected finance companies and finance companies controlled by theCompany
□ Applicable √ Not Applicable
There are no deposits, loans, credits or other financial operations between the Company andconnected finance companies, finance companies controlled by the Company and affiliates.
6. Other major connected transactions
□ Applicable √ Not Applicable
There were no other major connected transactions during the reporting period.
XII. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √ Not Applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There was no contracting during the reporting period.
(3) Lease
□ Applicable √ Not Applicable
There was no leasing during the reporting period.
2. Material guarantee
□ Applicable √ Not Applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
√ Applicable □ Not Applicable
(Unit: RMB 10,000)
Specific type | Sources of financial management entrusting | Incurred amount of financial management entrusting | Unexpired balance | Amount overdue but not recovered | Impairment amount accrued of overdue but not recovered financial management |
Bank financial products | Own funds | 90,000 | 201,900 | 0 | 0 |
The specific situation of high-risk entrusted financial management with large single-item amount orlow safety, poor liquidity and no break-even
□ Applicable √ Not Applicable
Entrusted financial management is expected to be unable to recover the principal or where there areother circumstances that may result in impairment
□ Applicable √ Not Applicable
4. Material contracts for daily operation
□ Applicable √ Not Applicable
5. Other material contracts
□ Applicable √ Not Applicable
The Company had no other material contracts during the reporting period.
XIII. Explanation of Other Significant Matters
□ Applicable √ Not Applicable
The Company had no other significant matters that need to be explained during the reporting period.
XIV. Significant Matters of Subsidiaries of the Company
□ Applicable √ Not Applicable
Chapter 7 Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before change | Change (+. -) | After change | |||||||
Quantity | Percentage (%) | Issue of new shares | Bonus shares | Shares converted from capital reserve | Other | Subtotal | Quantity | Percentage (%) | |
I. Shares subject to sales restrictions | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
Shares held by other domestic investors | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
Of which: shares held by domestic natural persons | 14,123,269 | 1.49% | 14,123,269 | 1.49% | |||||
II. Shares without sales restrictions | 934,900,781 | 98.51% | 934,900,781 | 98.51% | |||||
RMB ordinary shares | 934,900,781 | 98.51% | 934,900,781 | 98.51% | |||||
III. Total shares | 949,024,050 | 100.00% | 949,024,050 | 100.00% |
Share repurchase by the Company
1. On May 11, 2021, the Company repurchased the Company’s shares for the first timethrough a special securities account for repurchase by means of centralized bidding. The number ofrepurchased shares was 1,707,934, accounting for 0.1800% of the total number of shares of theCompany, with a highest closing cost of RMB 37.60 per share and a lowest closing cost of RMB
35.89 per share, and the total amount paid for the repurchase was RMB 63,433,861.04. For details,please refer to the Announcement on the Repurchase of Public Shares for the First Time(Announcement No.: 2021-036) disclosed on www.cninfo.com.cn and the Company’s designatedinformation disclosure newspapers.
2. In accordance with the Measures on Administration of Listed Companies’ Repurchasingthe Public Shares (Trial), the Supplementary Provisions on Repurchase of Shares by ListedCompanies by Means of Centralized Bidding, the Rules of Shenzhen Stock Exchange forImplementation of Repurchase of Shares by Listed Companies and other relevant provisions, theCompany shall disclose the progress of the repurchase as of the end of the previous month withinthe first three trading days of each month. For details, please refer to the Announcement on theProgress of the Repurchase of Public Shares (Announcement No.: 2021-040) disclosed onwww.cninfo.com.cn and the Company’s designated information disclosure newspapers.
3. The Company repurchased a total of 4,929,134 shares through a special securities accountfor repurchase by means of centralized bidding, accounting for 0.5194% of the total number ofshares of the Company, at a highest closing cost of RMB 44.40 per share and a lowest closing costof RMB 35.89 per share, and the total closing price was RMB 199,991,892.40. For details, pleaserefer to the Announcement on the Completion of the Repurchase of Public Shares (AnnouncementNo.: 2021-044) disclosed on www.cninfo.com.cn and the Company’s designated informationdisclosure newspapers.
2. Changes in shares subject to sales restrictions
□ Applicable √ Not Applicable
II. Securities Issuance and Listing
□ Applicable √ Not Applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: share
Total number of common shareholders at the end of the reporting period | 39,493 | Total number of preference shareholders with voting rights recovered at the end of the reporting period (if any) (see Note 8) | 0 | |||||||
Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders | ||||||||||
Name of shareholder | Nature of shareholder | Shareholding ratio | Number of common shares held at the end of the reporting period | Change during the reporting period | Number of shares subject to sales restrictions | Number of shares without sales restrictions | Pledged, marked or frozen shares | |||
Status | Quantity | |||||||||
Hangzhou Robam Industrial Group Co., Ltd. | Domestic non-state-owned corporation | 49.68% | 471,510,000 | 471,510,000 | ||||||
Hong Kong Securities Clearing Company Limited | Overseas corporation | 11.13% | 105,614,710 | -18,614,801 | 105,614,710 | |||||
Shen Guoying | Domestic natural person | 1.29% | 12,240,000 | 12,240,000 | ||||||
PICC Life Insurance Company Limited - traditional - | Other | 1.00% | 9,499,622 | 9,499,622 | 9,499,622 |
ordinary insurance product | ||||||||||
Industrial Bank Co., Ltd. - ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | Other | 0.98% | 9,338,619 | 9,338,619 | 9,338,619 | |||||
TEMASEK FULLERTON ALPHA PTE LTD | Overseas corporation | 0.89% | 8,400,379 | -2,061,167 | 8,400,379 | |||||
Hangzhou Jinchuang Investment Co., Ltd. | Domestic non-state-owned corporation | 0.70% | 6,640,085 | -2,811,900 | 6,640,085 | |||||
People’s Insurance Company of China - traditional - ordinary insurance product | Other | 0.69% | 6,525,176 | 6,525,176 | 6,525,176 | |||||
Hangzhou Yinchuang Investment Co., Ltd. | Domestic non-state-owned corporation | 0.67% | 6,318,000 | 6,318,000 | ||||||
Ren Jianhua | Domestic natural person | 0.62% | 5,923,150 | 4,442,362 | 1,480,788 | |||||
Description of the associated relationship or consistent actions of the above shareholders | Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of Hangzhou Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | |||||||||
Statements of the above shareholders on proxy/trustee voting rights and abstention from voting rights | None | |||||||||
Shareholdings of the top 10 common shareholders not subject to sales restrictions | ||||||||||
Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of share | ||||||||
Type of share | Quantity | |||||||||
Hangzhou Robam Industrial Group Co., Ltd. | 471,510,000 | RMB ordinary shares | 471,510,000 | |||||||
Hong Kong Securities | 105,614,710 | RMB | 105,614,710 |
Clearing Company Limited | ordinary shares | ||
Shen Guoying | 12,240,000 | RMB ordinary shares | 12,240,000 |
PICC Life Insurance Company Limited - traditional - ordinary insurance product | 9,499,622 | RMB ordinary shares | 9,499,622 |
Industrial Bank Co., Ltd. - ICBC Credit Suisse Culture & Sports Industry Stock Securities Investment Fund | 9,338,619 | RMB ordinary shares | 9,338,619 |
TEMASEK FULLERTON ALPHA PTE LTD | 8,400,379 | RMB ordinary shares | 8,400,379 |
Hangzhou Jinchuang Investment Co., Ltd. | 6,640,085 | RMB ordinary shares | 6,640,085 |
People’s Insurance Company of China - traditional - ordinary insurance product | 6,525,176 | RMB ordinary shares | 6,525,176 |
Hangzhou Yinchuang Investment Co., Ltd. | 6,318,000 | RMB ordinary shares | 6,318,000 |
China Merchants Bank Co., Ltd. - ICBC Credit Suisse Yuanxing Hybrid Securities Investment Fund | 5,769,700 | RMB ordinary shares | 5,769,700 |
Description on associated relationship or consistent actions among the top 10 common shareholders not subject to sales restrictions and between the top 10 common shareholders not subject to sales restrictions and the top 10 common shareholders | Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of Hangzhou Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. |
Did any of the top 10 common shareholders and the top 10 common shareholders not subject tosales restrictions of the Company have any agreed repurchase trading during the reporting period??□ Yes √ NoThere was no agreed repurchase trading between the top 10 common shareholders and the top 10common shareholders not subject to sales restrictions of the Company during the reporting period.
IV. Changes in Shares Held by Directors, Supervisors, and Senior Management
√ Applicable ?Not Applicable
Name | Title | State of title | Number of shares at the beginning of | Number of shares increased in | Number of shares decreased in the current period | Number of shares held at the end of the |
the period (share) | the current period (shares) | (shares) | period (shares) | |||
Ren Fujia | Vice Chairman, General Manager | In office | 2,800,075 | / | 700,000 | 2,100,075 |
Ren Luozhong | Director | In office | 1,690,062 | / | 422,500 | 1,267,562 |
Zhao Jihong | Director | In office | 1,690,065 | / | 422,500 | 1,267,565 |
Shen Guoliang | Director | In office | 1,524,264 | / | 381,000 | 1,143,264 |
Zhang Linyong | Supervisor | In office | 1,112,315 | / | 278,000 | 834,315 |
Zhang Songnian | Supervisor | In office | 1,112,312 | / | 278,000 | 834,312 |
Tang Genquan | Supervisor | In office | 1,112,312 | / | 278,000 | 834,312 |
Total | -- | -- | 11,041,405 | / | 2,760,000 | 8,281,405 |
V. Changes in the Controlling Shareholder and the Actual ControllerChanges in the controlling shareholder during the reporting period?Applicable √ Not ApplicableThere was no change in the controlling shareholder of the Company during the reporting period.
Changes in the actual controller during the reporting period?Applicable √ Not ApplicableThere was no change in the actual controller of the Company during the reporting period.
Chapter 8 Preferred Shares
?Applicable √ Not ApplicableThe Company had no preferred shares during the reporting period.
Chapter 9 Bonds
?Applicable √ Not Applicable
Chapter 10 Financial ReportI. Audit ReportWhether the semi-annual report has been audited
□ Yes √ No
The semi-annual financial report of the Company has not been audited.
II. Financial StatementsThe financial statement notes are represented in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Robam Appliances Co., Ltd.
June 30, 2021
In RMB
Item | June 30, 2021 | December 31, 2020 |
Current assets: | ||
Cash and cash equivalents | 4,190,050,005.34 | 3,921,052,700.31 |
Deposit reservation for balance | ||
Lendings to banks and other financial institutions | ||
Financial assets held for trading | 2,019,000,000.00 | 2,352,000,000.00 |
Derivative financial assets | ||
Notes receivable | 1,942,517,288.74 | 1,832,701,443.08 |
Accounts receivable | 988,037,922.96 | 1,008,235,946.40 |
Accounts receivable financing | ||
Prepayments | 161,216,428.52 | 69,889,399.47 |
Receivable premium | ||
Reinsurance accounts receivable | ||
Reinsurance contract reserves receivable | ||
Other receivables | 93,254,368.24 | 56,589,791.38 |
Inc: Interests receivable | ||
Dividends receivable | ||
Redemptory monetary capital for sale | ||
Inventory | 1,578,814,810.48 | 1,386,089,344.84 |
Contract assets | ||
Assets held for sale |
Non-current assets due within one year | ||
Other current assets | 59,794.96 | 667,378.56 |
Total current assets | 10,972,950,619.24 | 10,627,226,004.04 |
Non-current assets: | ||
Loans and advances | ||
Creditors investment | ||
Other debt investment | ||
Long-term receivables | ||
Long-term equity investment | 2,012,699.52 | 3,452,769.59 |
Investment in other equity instruments | 102,116,023.22 | 102,116,023.22 |
Other non-current financial assets | ||
Investment properties | 18,576,015.36 | 2,591,001.84 |
Fixed assets | 922,791,998.04 | 824,978,354.71 |
Construction in process | 515,737,483.33 | 463,424,647.46 |
Biological assets for production | ||
Oil & gas assets | ||
Right of use assets | 20,079,054.20 | |
Intangible assets | 228,847,740.27 | 235,217,240.32 |
Development expenditure | ||
Goodwill | 80,589,565.84 | 80,589,565.84 |
Long-term prepaid expenses | 3,793,662.64 | 1,798,358.85 |
Deferred tax assets: | 190,215,852.52 | 112,492,030.71 |
Other non-current assets | 14,498,895.36 | 3,682,279.67 |
Total non-current assets | 2,099,258,990.30 | 1,830,342,272.21 |
Total assets | 13,072,209,609.54 | 12,457,568,276.25 |
Current liabilities: | ||
Short-term borrowings | 11,913,223.08 | 6,076,177.30 |
Borrowings from the central bank | ||
Borrowings from banks and other financial institutions | ||
Financial liabilities held for trading | ||
Derivative financial liabilities | ||
Notes payables | 697,267,275.89 | 751,802,498.92 |
Accounts payable | 2,122,755,661.60 | 1,723,832,208.09 |
Advance receipts | ||
Contract liabilities | 1,032,445,046.81 | 949,591,228.35 |
Financial assets sold for repurchase |
Deposits from customers and interbank | ||
Receivings from vicariously traded securities | ||
Receivings from vicariously traded securities | ||
Payroll payable | 32,973,810.40 | 126,130,391.24 |
Taxes payable | 315,550,444.85 | 181,887,237.51 |
Other payables | 255,046,157.84 | 242,559,615.30 |
Inc: Interests payable | ||
Dividends payable | ||
Fees and commissions payable | ||
Dividends payable for reinsurance | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | 2,217,436.33 | |
Other current liabilities | 137,774,706.49 | 126,535,407.26 |
Total current liabilities | 4,607,943,763.29 | 4,108,414,763.97 |
Non-current liabilities: | ||
Reserves for insurance contracts | ||
Long-term loans | ||
Bonds payable | ||
Inc: Preferred shares | ||
Perpetual bonds | ||
Lease liabilities | 18,756,723.23 | |
Long-term accounts payable | ||
Long-term payroll payable | ||
Estimated liabilities | ||
Deferred income | 140,955,451.16 | 150,163,523.90 |
Deferred income tax liabilities | 4,956,977.89 | 5,210,759.74 |
Other non-current liabilities | ||
Total non-current liabilities | 164,669,152.28 | 155,374,283.64 |
Total liabilities | 4,772,612,915.57 | 4,263,789,047.61 |
Owner’s equity: | ||
Capital stock | 949,024,050.00 | 949,024,050.00 |
Other equity instruments | ||
Inc: Preferred shares | ||
Perpetual bonds | ||
Capital reserve | 402,602,023.28 | 401,799,332.67 |
Less: treasury share | 199,995,742.59 | |
Other comprehensive income | -15,157,634.16 | -15,157,634.16 |
Special reserves | ||||
Surplus reserves | 474,516,412.50 | 474,516,412.50 | ||
General risk reserves | ||||
Undistributed profits | 6,535,348,256.13 | 6,240,444,654.34 | ||
Total owners’ equity attributable to the parent company | 8,146,337,365.16 | 8,050,626,815.35 | ||
Minority interests | 153,259,328.81 | 143,152,413.29 | ||
Total owner’s equity | 8,299,596,693.97 | 8,193,779,228.64 | ||
Total liabilities and owner’s equity | 13,072,209,609.54 | 12,457,568,276.25 | ||
Legal representative: Ren Jianhua | Person in charge of accounting: Zhang Guofu | Head of the accounting department: Zhang Guofu |
2. Balance Sheet of the Parent Company
In RMB
Item | June 30, 2021 | December 31, 2020 |
Current assets: | ||
Cash and cash equivalents | 4,008,212,230.41 | 3,660,573,828.66 |
Financial assets held for trading | 1,900,000,000.00 | 2,260,000,000.00 |
Derivative financial assets | ||
Notes receivable | 1,931,059,123.12 | 1,826,318,388.55 |
Accounts receivable | 933,624,686.74 | 933,609,909.29 |
Accounts receivable financing | ||
Prepayments | 145,852,138.58 | 54,046,490.84 |
Other receivables | 80,511,071.80 | 49,092,820.31 |
Inc: Interests receivable | ||
Dividends receivable | ||
Inventory | 1,490,270,132.49 | 1,310,365,800.56 |
Contract assets | ||
Assets held for sale | ||
Non-current assets due within one year | ||
Other current assets | ||
Total current assets | 10,489,529,383.14 | 10,094,007,238.21 |
Non-current assets: | ||
Creditors investment | ||
Other debt investment | ||
Long-term receivables | ||
Long-term equity investment | 238,550,318.40 | 229,958,703.32 |
Investment in other equity instruments | 102,116,023.22 | 102,116,023.22 |
Other non-current financial |
assets | ||
Investment properties | 18,863,580.98 | 2,890,836.38 |
Fixed assets | 896,601,464.89 | 798,041,764.29 |
Construction in process | 376,938,399.94 | 388,628,789.02 |
Biological assets for production | ||
Oil & gas assets | ||
Right of use assets | ||
Intangible assets | 149,666,719.60 | 153,598,124.59 |
Development expenditure | ||
Goodwill | ||
Long-term prepaid expenses | 1,367,040.07 | 1,626,828.83 |
Deferred tax assets: | 188,814,668.77 | 110,283,291.78 |
Other non-current assets | 7,482,799.36 | 3,005,279.67 |
Total non-current assets | 1,980,401,015.23 | 1,790,149,641.10 |
Total assets | 12,469,930,398.37 | 11,884,156,879.31 |
Current liabilities: | ||
Short-term borrowings | 11,913,223.08 | 6,076,177.30 |
Financial liabilities held for trading | ||
Derivative financial liabilities | ||
Notes payables | 651,648,401.71 | 706,096,531.24 |
Accounts payable | 1,973,906,127.28 | 1,643,087,806.83 |
Advance receipts | ||
Contract liabilities | 966,646,621.85 | 863,047,926.93 |
Payroll payable | 23,529,799.23 | 102,753,699.88 |
Taxes payable | 308,750,096.63 | 170,747,570.08 |
Other payables | 235,809,677.45 | 225,015,032.38 |
Inc: Interests payable | ||
Dividends payable | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | 128,752,608.42 | 115,284,778.08 |
Total current liabilities | 4,300,956,555.65 | 3,832,109,522.72 |
Non-current liabilities: | ||
Long-term loans | ||
Bonds payable | ||
Inc: Preferred shares | ||
Perpetual bonds | ||
Lease liabilities | ||
Long-term accounts payable |
Long-term payroll payable | ||
Estimated liabilities | ||
Deferred income | 112,098,466.16 | 121,306,538.90 |
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 112,098,466.16 | 121,306,538.90 |
Total liabilities | 4,413,055,021.81 | 3,953,416,061.62 |
Owner’s equity: | ||
Capital stock | 949,024,050.00 | 949,024,050.00 |
Other equity instruments | ||
Inc: Preferred shares | ||
Perpetual bonds | ||
Capital reserve | 402,557,040.27 | 401,754,349.66 |
Less: treasury share | 199,995,742.59 | |
Other comprehensive income | -15,157,634.16 | -15,157,634.16 |
Special reserves | ||
Surplus reserves | 474,516,412.50 | 474,516,412.50 |
Undistributed profits | 6,445,931,250.54 | 6,120,603,639.69 |
Total owner’s equity | 8,056,875,376.56 | 7,930,740,817.69 |
Total liabilities and owner’s equity | 12,469,930,398.37 | 11,884,156,879.31 |
3. Consolidated Income Statement
In RMB
Item | The first half of 2021 | Semi-annual 2020 |
I. Total operating income | 4,326,082,031.62 | 3,211,172,335.79 |
Inc: Operating income | 4,326,082,031.62 | 3,211,172,335.79 |
Interest income | ||
Earned premium | ||
Fee and commission income | ||
II. Total operating costs | 3,435,552,198.16 | 2,554,722,969.33 |
Inc: Operating costs | 1,887,148,054.31 | 1,450,728,576.58 |
Interest expenses | ||
Fee and commission expenses | ||
Surrender value | ||
Net payments for insurance claims | ||
Net allotment of reserves for insurance liabilities | ||
Policy dividend expenditures | ||
Reinsurance expenses | ||
Taxes and surcharges | 32,378,228.12 | 25,188,234.23 |
Sale expenses | 1,270,526,179.87 | 892,679,297.76 |
Administrative expenses | 149,993,109.17 | 116,085,321.98 |
R&D expenses | 143,433,206.12 | 117,824,032.62 |
Financial expense | -47,926,579.43 | -47,782,493.84 |
Inc: Interest expenses | 1,228,635.41 | 139,284.26 |
Interest income | 50,677,538.57 | 47,604,818.42 |
Add: other income | 55,086,765.01 | 73,726,234.28 |
Investment income (“-” for losses) | 31,429,517.67 | 24,102,232.36 |
Inc: Income from investment in joint ventures and affiliated enterprises | -1,440,070.07 | -2,239,220.46 |
Gains on derecognition of financial assets measured at amortized cost | ||
Exchange gains (“-” for losses) | ||
Net exposure hedging gains (“-” for losses) | ||
Gains from changes in fair value (“-” for losses) | ||
Losses from credit impairment (“-” for losses) | -31,492,439.21 | -18,511,769.59 |
Losses from asset impairment (“-” for losses) | ||
Gains on disposal of assets (“-” for losses) | -2,035,843.51 | 11,388.98 |
III. Operating profits (“-” for losses) | 943,517,833.42 | 735,777,452.49 |
Add: non-operating income | 1,195,370.24 | 586,353.17 |
Less: non-operating expenditure | 1,577,924.28 | 1,695,304.64 |
IV. Total profits (“-” for total losses) | 943,135,279.38 | 734,668,501.02 |
Less: income tax expenses | 143,489,604.07 | 111,490,061.67 |
V. Net profits (“-” for losses) | 799,645,675.31 | 623,178,439.35 |
(I) By operational sustainability | ||
1. Net profits from continuing operations (“-” for net losses) | 799,645,675.31 | 623,178,439.35 |
2. Net profits from discontinued operations (“-” for net losses) | 799,645,675.31 | 623,178,439.35 |
(II) By ownership | ||
1. Net profits attributable to owners of the parent company | 790,388,759.79 | 612,317,249.29 |
2. Minority shareholders’ gains and losses | 9,256,915.52 | 10,861,190.06 |
VI. After-tax net amount of other comprehensive income | ||
After-tax net amount of other comprehensive income attributable to owners of the parent company | ||
(I) Other comprehensive income that cannot be reclassified into gains and losses | ||
1. Changes in re-measured and defined benefit plans | ||
2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
3. Changes in fair value of the investment in other equity instruments | ||
4. Changes in fair value of the credit risk of the Company | ||
5. Others |
(II) Other comprehensive income which will be reclassified into gains and losses | ||
1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
2. Changes in fair value of other debt investments | ||
3. Amount of financial assets reclassified into other comprehensive income | ||
4. Provision for credit impairment of other debt investments | ||
5. Cashflow hedge reserve | ||
6. Converted difference in foreign currency statements | ||
7. Others | ||
After-tax net amount of other comprehensive income attributable to minority shareholders | ||
VII. Total comprehensive income | 799,645,675.31 | 623,178,439.35 |
Total comprehensive income attributable to owners of the parent company | 790,388,759.79 | 612,317,249.29 |
Total comprehensive income attributable to minority shareholders | 9,256,915.52 | 10,861,190.06 |
VIII. Earnings per share (EPS): | ||
(I) Basic EPS | 0.83 | 0.65 |
(II) Diluted EPS | 0.83 | 0.65 |
As for business combination under common control in the current period, net profit of the combined party prior tocombination is: RMB, while the net profit of the combined party in the prior period was: RMB.
Legal representative: Ren Jianhua | Person in charge of accounting: Zhang Guofu | Head of the accounting department: Zhang Guofu |
4. Income Statement of the Parent Company
In RMB
Item | The first half of 2021 | Semi-annual 2020 |
I. Operating income | 3,957,294,958.01 | 2,980,914,680.77 |
Less: Operating costs | 1,773,395,471.27 | 1,349,585,204.35 |
Taxes and surcharges | 29,052,610.83 | 22,974,970.25 |
Sales expenses | 1,089,455,480.72 | 812,123,731.90 |
Administrative expenses | 107,028,148.18 | 82,217,605.50 |
R&D expenses | 136,896,643.39 | 112,943,235.17 |
Financial expenses | -46,049,005.34 | -47,002,146.56 |
Including: Interest expenses | 1,228,635.41 | 139,284.26 |
Interest income | 47,935,867.95 | 46,641,570.65 |
Add: other income | 51,032,167.31 | 68,634,379.72 |
Investment income (“-” for losses) | 52,446,657.81 | 18,620,433.19 |
Including: Income from investment in joint ventures and affiliated enterprises | -1,440,070.07 | -2,239,220.46 | ||
Gains on derecognition of financial assets measured at amortized cost (“-” for losses) | ||||
Net exposure hedging gains (“-” for losses) | ||||
Gains from changes in fair value (“-” for losses) | ||||
Losses from credit impairment (“-” for losses) | -32,279,529.57 | -16,715,314.38 | ||
Losses from asset impairment (“-” for losses) | ||||
Gains on disposal of assets (“-” for losses) | -2,072,673.59 | -3,117.74 | ||
II. Operating profits (“-” for losses) | 936,642,230.92 | 718,608,460.95 | ||
Add: non-operating income | 917,022.51 | 547,098.05 | ||
Less: non-operating expenditure | 1,203,445.87 | 1,556,999.22 | ||
III. Total profits (“-” for total losses) | 936,355,807.56 | 717,598,559.78 | ||
Less: income tax expenses | 137,593,038.71 | 108,263,459.97 | ||
IV. Net profits (“-” for net losses) | 798,762,768.85 | 609,335,099.81 | ||
(I) Net profits from going concern (“-” for net losses) | ||||
(II) Net profits from discontinued operations (“-” for net losses) | ||||
V. After-tax net amount of other comprehensive income | ||||
(I) Other comprehensive income that cannot be reclassified into gains and losses | ||||
1. Changes in re-measured and defined benefit plans | ||||
2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||||
3. Changes in fair value of the investment in other equity instruments | ||||
4. Changes in fair value of the credit risk of the Company | ||||
5. Others | ||||
(II) Other comprehensive income which will be reclassified into gains and losses | ||||
1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||||
2. Changes in fair value of other debt investments | ||||
3. Amount of financial assets reclassified into other comprehensive income | ||||
4. Provision for credit impairment of other debt investments | ||||
5. Cashflow hedge reserve | ||||
6. Converted difference in foreign currency statements | ||||
7. Others | ||||
VI. Total comprehensive income | 798,762,768.85 | 609,335,099.81 | ||
VII. EPS: | ||||
(I) Basic EPS | ||||
(II) Diluted EPS |
5. Consolidated Cash Flow Statement
In RMB
Item | The first half of 2021 | Semi-annual 2020 |
I. Cash flow from operating activities: | ||
Cash received for the sale of goods and rendering of services | 4,738,990,263.73 | 3,214,555,668.77 |
Net increase in clients’ deposits and deposits from banks and other financial institutions | ||
Net increase in borrowings from the central bank | ||
Net increase in borrowings from other financial institutions | ||
Cash received from receiving insurance premium of the original insurance contract | ||
Net cash from receiving reinsurance premium | ||
Net increase in deposits and investment of insured persons | ||
Cash received from interests, fees and commissions | ||
Net increase in borrowed funds | ||
Net increase in repurchase business funds | ||
Net cash received from vicariously traded securities | ||
Refunds of taxes | 7,323,753.03 | |
Cash received relating to other operating activities | 118,704,652.16 | 143,788,116.65 |
Subtotal of cash inflow from operating activities | 4,865,018,668.92 | 3,358,343,785.42 |
Cash paid for purchased products and received services | 2,252,759,526.62 | 1,594,931,903.80 |
Net increase in loans and advances to customers | ||
Net increase in deposits with the central bank and other financial institutions | ||
Cash paid for claims of original insurance contract | ||
Net increase in lending funds | ||
Cash paid for interests, fees and commissions | ||
Cash paid for policy dividends | ||
Cash paid to and on behalf of employees | 637,119,817.59 | 363,952,500.04 |
Cash paid for taxes | 369,427,461.40 | 277,030,839.79 |
Cash paid related to other operating activities | 1,075,485,546.81 | 714,741,408.23 |
Subtotal of cash outflow from operating activities | 4,334,792,352.42 | 2,950,656,651.86 |
Net cash flow from operating activities | 530,226,316.50 | 407,687,133.56 |
II. Cash flow from investing activities: | ||
Cash received from return of investments | 1,234,000,000.00 | 1,140,000,000.00 |
Cash received from return on investments | 33,853,727.02 | 42,018,525.66 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,206,278.90 | 35,000.00 |
Net cash received from disposal of subsidiaries and other business entities | ||
Cash received related to other investment activities | ||
Subtotal of cash inflow from investment activities | 1,270,060,005.92 | 1,182,053,525.66 |
Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 154,539,404.13 | 124,109,953.42 |
Cash paid to investments | 901,000,000.00 | 705,000,000.00 |
Net increase in pledged loans | ||
Net cash from subsidiaries and other operating entities | ||
Cash paid related to other investment activities | ||
Subtotal of cash outflow from investment activities | 1,055,539,404.13 | 829,109,953.42 |
Net cash flow from investment activities | 214,520,601.79 | 352,943,572.24 |
III. Cash flow from financing activities: | ||
Cash from acquiring investments | 850,000.00 | |
Including: Cash received by subsidiaries from investments of minority shareholders | 850,000.00 | |
Cash from acquiring debts | ||
Other cashes received in relation to financing activities | 5,552,160.81 | |
Subtotal of cash inflow from financing activities | 6,402,160.81 | |
Cash repayments of debts | ||
Cash paid for distribution of dividends, profits or interest expenses | 495,485,158.00 | 474,512,025.00 |
Including: Dividends and profits paid by the subsidiaries to minority shareholders | ||
Other cashes paid in relation to financing activities | ||
Subtotal of cash outflow from financing activities | 495,485,158.00 | 474,512,025.00 |
Net cash flow from financing activities | -489,082,997.19 | -474,512,025.00 |
IV. Effect of change in exchange rate on cash and cash equivalents | -264,556.23 | 540,552.95 |
V. Net increase in cash and cash equivalents | 255,399,364.87 | 286,659,233.75 |
Plus: Opening balance of cash and cash equivalents | 3,886,096,513.56 | 4,029,296,265.50 |
VI. Closing balance of cash and cash equivalents | 4,141,495,878.43 | 4,315,955,499.25 |
6. Cash Flow Statement of the Parent Company
In RMB
Item | The first half of 2021 | Semi-annual 2020 |
I. Cash flow from operating activities: | ||
Cash received for the sale of goods and rendering of services | 4,346,968,618.40 | 3,026,131,726.09 |
Refunds of taxes | 7,323,753.03 | |
Cash received relating to other operating activities | 99,542,054.03 | 109,796,058.70 |
Subtotal of cash inflow from operating activities | 4,453,834,425.46 | 3,135,927,784.79 |
Cash paid for purchased products and received services | 2,138,946,028.17 | 1,530,403,008.52 |
Cash paid to and on behalf of employees | 540,731,054.64 | 293,387,839.45 |
Cash paid for taxes | 330,152,814.67 | 253,274,191.18 |
Cash paid related to other operating activities | 932,462,696.53 | 634,242,077.40 |
Subtotal of cash outflow from operating activities | 3,942,292,594.01 | 2,711,307,116.55 |
Net cash flow from operating activities | 511,541,831.45 | 424,620,668.24 |
II. Cash flow from investing activities: | ||
Cash received from return of investments | 960,000,000.00 | 900,000,000.00 |
Cash received from return on investments | 54,819,617.81 | 36,406,272.24 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,156,298.90 | 10,000.00 |
Net cash received from disposal of subsidiaries and other business entities | ||
Cash received related to other investment activities | ||
Subtotal of cash inflow from investment activities | 1,016,975,916.71 | 936,416,272.24 |
Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 112,968,774.96 | 97,961,767.61 |
Cash paid to investments | 610,000,000.00 | 500,000,000.00 |
Net cash from subsidiaries and other operating entities | ||
Cash paid related to other investment activities | ||
Subtotal of cash outflow from investment activities | 722,968,774.96 | 597,961,767.61 |
Net cash flow from investment activities | 294,007,141.75 | 338,454,504.63 |
III. Cash flow from financing activities: | ||
Cash from acquiring investments | ||
Cash from acquiring debts | ||
Other cashes received in relation to financing activities | 5,552,160.81 | |
Subtotal of cash inflow from financing activities | 5,552,160.81 | |
Cash repayments of debts | ||
Cash paid for distribution of dividends, profits or interest expenses | 473,435,158.00 | 474,512,025.00 |
Other cashes paid in relation to |
financing activities | ||
Subtotal of cash outflow from financing activities | 473,435,158.00 | 474,512,025.00 |
Net cash flow from financing activities | -467,882,997.19 | -474,512,025.00 |
IV. Effect of change in exchange rate on cash and cash equivalents | -264,437.65 | 540,502.02 |
V. Net increase in cash and cash equivalents | 337,401,538.36 | 289,103,649.89 |
Plus: Opening balance of cash and cash equivalents | 3,627,178,859.95 | 3,951,074,513.16 |
VI. Closing balance of cash and cash equivalents | 3,964,580,398.31 | 4,240,178,163.05 |
7. Consolidated Statement of Changes in Owners’ Equity
Current amount
In RMB
Item | The first half of 2021 | ||||||||||||||
Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
Capital stock | Other equity instruments | capital reserve | Less: treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Other | Subtotal | |||||
Preferred shares | Perpetual bonds | Other | |||||||||||||
I. Closing balance of last year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
Plus: Changes in accounting policies | |||||||||||||||
Correction of errors of the previous period | |||||||||||||||
Businesses combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Opening balance of this year | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 6,240,444,654.34 | 8,050,626,815.35 | 143,152,413.29 | 8,193,779,228.64 | |||||||
III. Change in current period (“-” for decrease) | 802,690.61 | 199,995,742.59 | 294,903,601.79 | 95,710,549.81 | 10,106,915.52 | 105,817,465.33 | |||||||||
(I) Total comprehensive income | 790,388,759.79 | 790,388,759.79 | 9,256,915.52 | 799,645,675.31 | |||||||||||
(II) Capital invested and decreased by the owners | 802,690.61 | 802,690.61 | 850,000.00 | 1,652,690.61 | |||||||||||
1. Common shares invested by the owners | 850,000.00 | 850,000.00 | |||||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||||
3. Amount of share-based payments recognized in owners’ equity | 802,690.61 | 802,690.61 | |||||||||||||
4. Others | |||||||||||||||
(III) Profit distribution | -495,485,158.00 | -495,485,158.00 | -495,485,158.00 | ||||||||||||
1. Withdrawal of surplus reserve | |||||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Distribution to owners (or shareholders) | -495,485,158.00 | -495,485,158.00 | -495,485,158.00 | ||||||||||||
4. Others | |||||||||||||||
(IV) Internal carry-forward of owners’ equity |
1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
3. Surplus reserves making up for losses | |||||||||||||||
4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
6. Others | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Withdrawn in current period | |||||||||||||||
2. Used in current period | |||||||||||||||
(VI) Others | 199,995,742.59 | -199,995,742.59 | -199,995,742.59 | ||||||||||||
IV. Closing balance of current period | 949,024,050.00 | 402,602,023.28 | 199,995,742.59 | -15,157,634.16 | 474,516,412.50 | 6,535,348,256.13 | 8,146,337,365.16 | 153,259,328.81 | 8,299,596,693.97 |
Amount of the previous period
In RMB
Item | Semi-annual 2020 | ||||||||||||||
Owners’ equity attributable to the parent company | Minority interests | Total owner’s equity | |||||||||||||
Capital stock | Other equity instruments | capital reserve | Less: treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Undistributed profits | Other | Subtotal | |||||
Preferred shares | Perpetual bonds | Other | |||||||||||||
I. Closing balance of last 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 | |||||||||||||||
Correction of errors of the previous period | |||||||||||||||
Businesses combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Opening balance of this 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. Change in current period ( “-” for decrease) | 137,805,224.29 | 137,805,224.29 | 10,861,190.06 | 148,666,414.35 | |||||||||||
(I) Total comprehensive income | 612,317,249.29 | 612,317,249.29 | 10,861,190.06 | 623,178,439.35 |
(II) Capital invested and decreased by the owners | |||||||||||||||
1. Common shares invested by the owners | |||||||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||||
3. Amount of share-based payments recognized in owners’ equity | |||||||||||||||
4. Others | |||||||||||||||
(III) Profit distribution | -474,512,025.00 | -474,512,025.00 | -474,512,025.00 | ||||||||||||
1. Withdrawal of surplus reserve | |||||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Distribution to owners (or shareholders) | -474,512,025.00 | -474,512,025.00 | -474,512,025.00 | ||||||||||||
4. Others | |||||||||||||||
(IV) Internal carry-forward of owners’ equity | |||||||||||||||
1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
3. Surplus reserves making up for losses | |||||||||||||||
4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
6. Others | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Withdrawn in current period | |||||||||||||||
2. Used in current period | |||||||||||||||
(VI) Others | |||||||||||||||
IV. Closing balance of current period | 949,024,050.00 | 401,799,332.67 | -15,157,634.16 | 474,516,412.50 | 5,192,011,944.74 | 7,002,194,105.75 | 120,755,658.30 | 7,122,949,764.05 |
8. Statement of Changes in Owners’ Equity of the Parent CompanyCurrent amount
In RMB
Item | The first half of 2021 |
Capital stock | Other equity instruments | capital reserve | Less: treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Other | Total owner’s equity | |||
Preferred shares | Perpetual bonds | Other | ||||||||||
I. Closing balance of last year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
Plus: Changes in accounting policies | ||||||||||||
Correction of errors of the previous period | ||||||||||||
Other | ||||||||||||
II. Opening balance of this year | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 6,120,603,639.69 | 7,930,740,817.69 | ||||||
III. Change in current period (“-” for decrease) | 802,690.61 | 199,995,742.59 | 325,327,610.85 | 126,134,558.87 | ||||||||
(I) Total comprehensive income | 798,762,768.85 | 798,762,768.85 | ||||||||||
(II) Capital invested and decreased by the owners | 802,690.61 | 802,690.61 | ||||||||||
1. Common shares invested by the owners | ||||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount of share-based payments recognized in owners’ equity | 802,690.61 | 802,690.61 | ||||||||||
4. Others | ||||||||||||
(III) Profit distribution | -473,435,158.00 | -473,435,158.00 | ||||||||||
1. Withdrawal of surplus reserve | ||||||||||||
2. Distribution to owners (or shareholders) | -473,435,158.00 | -473,435,158.00 | ||||||||||
3. Others | ||||||||||||
(IV) Internal carry-forward of owners’ equity | ||||||||||||
1. Capital reserve converted into capital (or capital stock) | ||||||||||||
2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
3. Surplus reserves making up for losses | ||||||||||||
4. Changes of defined benefit plans carried forward to retained |
earnings | ||||||||||||
5. Other comprehensive income carried forward to retained earnings | ||||||||||||
6. Others | ||||||||||||
(V) Special reserve | ||||||||||||
1. Withdrawn in current period | ||||||||||||
2. Used in current period | ||||||||||||
(VI) Others | 199,995,742.59 | -199,995,742.59 | ||||||||||
IV. Closing balance of current period | 949,024,050.00 | 402,557,040.27 | 199,995,742.59 | -15,157,634.16 | 474,516,412.50 | 6,445,931,250.54 | 8,056,875,376.56 |
Amount of the previous period
In RMB
Item | Semi-annual 2020 | |||||||||||
Capital stock | Other equity instruments | capital reserve | Less: treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Other | Total owner’s equity | |||
Preferred shares | Perpetual bonds | Other | ||||||||||
I. Closing balance of last 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 | ||||||||||||
Correction of errors of the previous period | ||||||||||||
Other | ||||||||||||
II. Opening balance of this 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. Change in current period ( “-” for decrease) | 134,823,074.81 | 134,823,074.81 | ||||||||||
(I) Total comprehensive income | 609,335,099.81 | 609,335,099.81 | ||||||||||
(II) Capital invested and decreased by the owners | ||||||||||||
1. Common shares invested by the owners | ||||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount of share-based payments recognized in owners’ equity | ||||||||||||
4. Others | ||||||||||||
(III) Profit distribution | -474,512,025.00 | -474,512,025.00 | ||||||||||
1. Withdrawal of surplus reserve | ||||||||||||
2. Distribution to owners (or shareholders) | -474,512,025.00 | -474,512,025.00 | ||||||||||
3. Others |
(IV) Internal carry-forward of owners’ equity | ||||||||||||
1. Capital reserve converted into capital (or capital stock) | ||||||||||||
2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
3. Surplus reserves making up for losses | ||||||||||||
4. Changes of defined benefit plans carried forward to retained earnings | ||||||||||||
5. Other comprehensive income carried forward to retained earnings | ||||||||||||
6. Others | ||||||||||||
(V) Special reserve | ||||||||||||
1. Withdrawn in current period | ||||||||||||
2. Used in current period | ||||||||||||
(VI) Others | ||||||||||||
IV. Closing balance of current period | 949,024,050.00 | 401,754,349.66 | -15,157,634.16 | 474,516,412.50 | 5,089,932,097.67 | 6,900,069,275.67 |
III. Basic Information of the CompanyHangzhou Robam Appliances Co., Ltd. (hereinafter referred to as ROBAM or the Company) isan incorporated company established by overall changing Hangzhou Robam Home Appliances Co.,Ltd. on November 7, 2000. Approved by China Securities Regulatory Commission (ZJXK [2010]No.1,512) in 2010, the Company offered 40 million ordinary shares in RMB to the public for thefirst time on November 23, 2010 (stock code: 002,508), with the par value of RMB 1 per share andthe issue price of RMB 24.00 per share.As of June 30, 2021, the total capital stocks of the Company reached RMB 949,024,050 afterseveral equity changes. The Company’s unified social credit code is 91330000725252053F; thelegal representative is Ren Jianhua; and the address is No.592, Linping Avenue, Yuhang EconomicDevelopment Area, Yuhang District, Hangzhou.
The Company is a manufacturing company, with major businesses covering research &development, production, sales and comprehensive services of kitchen appliances. Its main productsinclude range hoods, gas stoves, disinfection cabinets, steam ovens, baking ovens, dishwashers,water purifiers, microwave ovens, integrated stoves, and purification tanks.Its business mainly covers the manufacturing, processing and sales of range hoods, gas stoves,disinfection cabinets, baking ovens, steam ovens, microwave ovens, dishwashers, water purifiers,multi-purpose tanks, kitchen supplies and other kitchen appliances, as well as import and exportbusiness and technical service for household appliances. (For business subject to approvalaccording to law, relevant operating activities may not be carried out until they are approved byrelevant authorities).The consolidated financial statements of the Company cover seven companies, includingBeijing Robam Electric Appliance Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd.,Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances Trading (Shanghai) Co.,Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.(hereinafter referred to asShengzhou Kinde), Hangzhou Robam Fuchuang Investment Management Co., Ltd. and ZhejiangCookingfuture Technology Co., Ltd. (hereinafter referred to as Cookingfuture).For details, see relevant contents in the section of "VII. Interests in Other Entities" herein.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going concern basis, and in light of theCompany’s actual transactions and events, in accordance with the Accounting Standards forBusiness Enterprises promulgated by the Ministry of Finance of China and relevant provisions, aswell as the accounting policies and estimates stated in the section of "Significant AccountingPolicies and Estimates" herein.
2. Going concern
After taking into account of factors such as macro policy risks, market management risks, and thecurrent and long-term profitability, solvency, and financial flexibility of the Company, as well asthe intention of the management to change the operation policies, the management of the Companybelieves that there are no matters affecting the Company’s going concern within 12 months fromthe end of the reporting period onwards.
V. Significant Accounting Policies and EstimatesThe specific accounting policies and estimates prepared by the Company according to its actual
production and operation include the operating cycle, the recognition and measurement ofreceivables and bad debts, measurement of inventory delivered, fixed assets classification as well asdepreciation methods, invisible asset amortization, conditions for the capitalization of R&Dexpenses, and revenue recognition and measurement.
1. Statement on compliance with Accounting Standards for Business EnterprisesThe financial statements prepared by the Company comply with the requirements of the AccountingStandards for Business Enterprises, and truthfully and completely reflect financial position,business results, cash flow and other relevant information of the Company.
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregoriancalendar.
3. Operating cycle
The normal operating cycle of the Company shall be one year (12 months).
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Accounting approaches to business combinations under or not under common controlThe assets and liabilities acquired by the Company as the combining party in a businesscombination under common control shall be measured at the book value of the combined party inthe final controller’s consolidated statements on the combination date. The capital reserve shall beadjusted against the difference between the book value of the net assets acquired by the combiningparty and the book value of the combination consideration paid by it. If the capital reserve isinsufficient to offset the difference, the retained earnings shall be adjusted.The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in abusiness combination not under common control shall be measured at fair value on the acquisitiondate. The combination cost is the sum of fair values of cash or non-cash assets paid, liabilitiesissued or undertaken, equity securities issued, etc. by the Company for the purpose of taking controlover the acquired party on the acquisition date and all directly related expenses incurred during thebusiness combination (in case of business combination accomplished through multiple transactionsstep by step, the combination cost is the sum of the cost of every single transaction). If thecombination cost is greater than the fair value share of the acquiree’s identifiable net assets acquiredfrom the acquiree in the combination, the case is recognized as goodwill. Where the combinationcost is less than the fair value share of the identifiable net assets acquired from the acquiree, the fairvalues of the identifiable assets, debts and contingent liabilities acquired in the combination andthose of non-cash assets subject to combination consideration or issued equity securities shall berechecked first, and then in case the combination cost is less than the fair value shares of theidentifiable net assets acquired from the acquiree, the difference shall be included in the non-operating income in the period of the combination.
6. Methods of preparing consolidated financial statementsAll subsidiaries under the control of the Company are included into the consolidated financialstatements.
The financial statements of subsidiaries are adjusted in accordance with the accounting policiesand accounting period of the Company when preparing the consolidated financial statements, wherethe accounting policies and accounting periods are inconsistent between the Company and itssubsidiaries.
All major internal transactions, inter-company balances, and unrealized profits with the scope
of consolidation shall be offset when preparing consolidated financial statements. The portion ofowner’s equity of subsidiaries not held by the parent company and net current profit & loss, othercomprehensive incomes and the portion of total comprehensive incomes belonging to minorityequity are presented under "minority equity, minority interest income, other comprehensiveincomes belonging to minority shareholders and total comprehensive incomes belonging tominority shareholders, respectively."For a subsidiary acquired from a business combination under common control, its operatingresults and cash flows are included into the consolidated financial statements since the beginning ofthe consolidation year. When the comparable consolidated financial statements are being prepared,relevant items in the financial statements of the last year are adjusted with the stated party formedafter merging deemed to exist from the time of the ultimate controlling party starting to control.For a subsidiary acquired through business combination not under the same control, itsoperating results and cash flows shall be included into the consolidated financial statement since thedate when the Company obtains control. When preparing the consolidated financial statements, thesubsidiary’s financial statements shall be adjusted on basis of the fair value of all identifiable assets,liabilities and contingent liabilities ascertained on the purchasing date.For equity interests in an investee not under common control realized by two or moretransactions, which finally bring about the business combination, equity interests in the investeebefore the acquisition date shall be re-measured at fair value on the acquisition date and the balancebetween the fair value and the book value shall be included in the investment gains for the currentperiod when preparing the consolidated statements. If the related acquiree’s equity held before theacquiring date contains other comprehensive income and the other changes of owner’s equityexcept for net profits and losses, other comprehensive income and profit distributions, it shall betransferred to investment gains or losses on the date of acquisition, excluding the othercomprehensive income derived from changes of net liabilities or net assets due to re-measurementon defined benefit plan by the investee.Without losing any control rights, the Company has partially disposed the long-term equityinvestment in the subsidiary. In the consolidated financial statement, according to the differencebetween the disposal prices of part of the equity investment in the subsidiary and net assets of thesubsidiary attributed to the Company as a result of disposal of long-term equity investmentcontinuously calculated from the purchase date or consolidation date in the subsidiary, capitalpremium or stock premium is adjusted, where the capital reserve is not sufficient to be offset, theyare adjusted to the retained earnings.Where the Company loses the controlling right of the invested party for such reason asdisposing partial equity investment, the remaining equity is re-measured as per the fair value ofsuch equity on the day of losing controlling rights when preparing the consolidated financialstatements. The balance from the sum of the consideration obtained upon the disposal of equity andthe fair value of the remaining equity less the appropriable share of the net asset of the formersubsidiaries, calculated as per the former shareholding proportion from the purchase day or mergingday, is included in the investment income for the period when the right of control is lost and thegoodwill is deducted. Other comprehensive incomes related to former equity investment insubsidiaries shall be recognized as current investment profits & losses upon losing of controls.
7. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Company includes the joint venture. The Company, serving asone part of the joint venture, shall, in accordance with the provisions of the Accounting Standardsfor Business Enterprises No. 2 - Long-term Equity Investments, conduct accounting treatment of theinvestment of the joint venture.
8. Recognition standard of cash and cash equivalents
Cash presented in the Company’s cash flow statement refers to cash on hand and deposits thatare available for payment at any time. Cash equivalents presented in the cash flow statement refer toshort-term investments (not exceeding three months) with high liquidity and that are readilyconvertible to known amounts of cash and subject to an insignificant risk of changes in value.
9. Foreign currency business and conversion of foreign currency statementForeign currency transactions
The Company translates the foreign-currency amount of foreign-currency transactions into anRMB amount based on the spot exchange rate applicable on the transaction date. On the balancesheet date, the monetary items in foreign currencies shall be converted at the spot rate on the saidbalance sheet date. The conversion differences arising therefrom, with the exception of theexchange balance arising from the foreign currency borrowings special for acquisition or productionof qualifying assets which shall be processed according to the capitalization principle, shall bedirectly included in the current profit or loss. The foreign currency non-monetary items measured atfair value shall be converted according to the spot rate on the date when the fair value is confirmed.If the difference between the converted bookkeeping base currency amount and the originalbooking base currency amount belongs to the salable financial asset, such difference shall beincluded in the capital reserve. If such a difference belongs to the foreign currency non-monetaryitem, which is measured at fair value and whose change is included in the profits and losses of thecurrent period, it shall be included in current profits and losses. The foreign currency non-monetaryitems measured by historical cost shall still be translated according to the spot rate on thetransaction date, while RMB amount remains unchanged.Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of foreign operations are translated into RMBusing the spot exchange rate at the balance sheet date, while the shareholders’ equity items, exceptfor the "undistributed profit items," are translated into RMB using the spot exchange rate at the dateof transaction. The income and expense items in the income statements of overseas operations aretranslated at the exchange rate approximate to the spot rate at the date of transaction. The differencearising from the above translation is presented separately under other comprehensive income. Formonetary items denominated in foreign currencies that materially constitute overseas net investmentin overseas operations, exchange differences arising from changes in exchange rates, whenpreparing the consolidated financial statements, are also separately presented under theShareholders’ equity as foreign currency translation differences. In case of disposal of an overseasoperation, foreign currency translation differences relating to the overseas operation areproportionately transferred to the profits or losses of the period when the disposal was transacted.During the disposal of an overseas operation, other comprehensive incomes related to the overseasoperation are transferred in proportion into the disposal of current profits and losses.
The foreign currency cash flow and the cash flow of overseas subsidiaries shall be convertedusing the exchange rate approximate to the spot rate of the transaction date of the cash flow. Theeffect of exchange rate changes on cash is presented separately in the cash flow statement.
10. Financial instruments
The Company shall recognize a financial asset or a financial liability when it becomes a partyto a financial instrument contract.
Financial assets
The Company translates the foreign-currency amount of the foreign-currency transactions intothe RMB amount using the spot exchange rate applicable at the transaction date.
Based on the business model for management of financial assets and the contractual cash flow
characteristics of financial assets, the Company classifies the financial assets into three types: 1) thefinancial asset measured at amortized cost; 2) the financial asset measured at the fair value with itschanges included into other comprehensive incomes; and 3) and the financial asset measured at thefair value with its changes included into current profits or losses.The financial assets meeting all of the following conditions can be classified as those measuredat amortized cost by the Company: ① the Company adopts the business management mode offinancial assets for the purpose of collecting contractual cash flow. ② In accordance with thecontract terms of the financial assets, the cash flow generated at the specific date is only thepayment of the principal and the interest on the basis of the outstanding principal amount. Suchfinancial assets are initially measured at their fair values, with related transaction costs included intothe amount of initial recognition, and subsequent measurement conducted with the amortized cost.Apart from those designated as hedged items, the difference between the initial amount amortizedwith the effective interest method and the amount due, profits or losses incurred upon amortization,impairment, exchange profits and losses and derecognition shall be included into current profits andlosses.Where the following conditions are reached at the same time, the financial assets can beclassified by the Company as those measured at fair value with the changes included into othercomprehensive income: ① the Company adopts the business management mode of the financialassets for the purpose of collecting contractual cash flow and selling the financial assets. ② Inaccordance with the contract terms of the financial assets, the cash flow generated at the specificdate is only the payment of the principal and the interest on the basis of the outstanding principalamount. Such financial assets are initially measured at their fair values, with related transactioncosts included into the amount of initial recognition. Apart from those designated as the hedgeditems, profits or losses incurred by such financial assets shall be included into the comprehensiveincomes, except for credit impairment losses or gains, exchange profits and losses, and the interestscalculated as per the actual interest rate for such financial assets. Upon derecognition of thefinancial asset, the accumulated gains or losses previously recorded in other comprehensiveincomes shall be transferred out of such other comprehensive incomes and included into the currentprofits and losses.
The interest income is recognized by the Company using the effective interest method. Theinterest income is determined by multiplying the book balance of financial assets by the effectiveinterest rate, except for under the following conditions: ① For the financial assets purchased by ororiginating from the Company with credit impairment, from the initial confirmation, the interestincome shall be determined as per the amortized cost of the financial asset and the effect interestrate subject to credit adjustment. ② The financial assets purchased by or originating from theCompany with no credit impairment but having credit impairment during the follow-up period shallbe subject to interest income calculation by the Company based on the amortized cost and actualinterest rate of the financial assets during the follow-up period.The non-trading equity instrument is designated by the Company as the financial asset which ismeasured at its fair value with changes included into current profits and losses. The designationshall not be canceled once it is made. The non-trading equity instrument investment, designed bythe Company to be measured at the fair value with their changes included into other comprehensiveincomes, is initially measured at fair value, with related transaction cost included into the amount ofinitial confirmation. Except for the obtained dividends (excluding those of the recovered investmentcost), which are included into current profits and losses, other related profits and losses (includingexchange profits and losses) are completely included into the other comprehensive incomes and willnot then be converted into current profits and losses. Upon derecognition, the accumulated gains orlosses previously included into other comprehensive incomes are transferred from othercomprehensive incomes and included into retained earnings.
Except for the financial assets classified to be measured by the amortized cost and thosemeasured at fair value through other comprehensive income, other financial assets are classified bythe Company as those measured at fair value through current profits and losses. Such financialassets are initially measured at their fair values, with related transaction costs directly included intothe current profits and losses. Profits or losses of such financial assets shall be included in thecurrent profits and losses.The financial asset formed by the contingent consideration confirmed during businesscombination not under the same control are classified as those measured by its fair value by theCompany, with changes included into current profits and losses.
Recognition basis and measurement method for transfer of financial assets
Financial assets meeting one of the following conditions shall be derecognized by theCompany: ① the contractual right to collect the cash flow of the financial asset is terminated. ②The financial assets have been transferred by the Company, and almost all risks and returnsassociated with the ownership of the financial asset are transferred. ③ The financial assets havebeen transferred, and the Company had neither transferred nor retained almost all risks and rewardsin the ownership of the financial assets, but given up the control over the financial assets.
For a financial asset that is entirely transferred and meets the conditions of derecognition, thedifference is calculated between the book value of the transferred financial asset and the sum ofconsideration received from such transfer and the accumulated changes in fair value, which isdirectly included into other comprehensive income and corresponds to the derecognized amount (inaccordance with the contract terms of the financial assets involved in such transfer, the cash flowgenerated at the specific date is only the payment of the principal and the interest on the basis of theoutstanding principal amount). This difference is included into the current profits and losses.
For a financial asset that is partially transferred and meets the conditions of derecognition, theoverall book value of the transferred financial asset is split according to the relative fair valuebetween the part derecognized and the part not derecognized, and the difference between thefollowing two amounts is recognized in current profits and losses: the sum of consideration receiveddue to transfer and the amount amortized to the derecognized part and corresponding to theaccumulative change of fair value which is firstly included into the other comprehensive income (inaccordance with the contract terms of the financial assets, the cash flow generated at the specificdate is only the payment of the principal and the interest on the basis of the outstanding principalamount), and the overall book value of aforesaid financial assets.
Financial liabilities
Classification, recognition and measurement of financial liability
The Company’s financial liabilities are grouped, upon initial recognition, into financialliabilities measured at fair value, with the changes included in the current profit or loss and otherfinancial liabilities.
Financial liabilities measured at fair value with changes included in the current profits andlosses include trading financial liabilities and financial liabilities designated to be measured as atfair value with changes included in the current profits and losses upon initial recognition. The netgain or loss arising from changes in fair value, dividends and interest paid related to such financialliabilities are recorded in profits and losses for the period in which they are incurred.
Other financial liabilities are measured subsequently at the amortized cost by adopting theeffective interest method. Apart from the following items, the Company will classify the financialliabilities as those measured at amortized cost: ① the financial liabilities measured at fair valuewith changes included into current profits and losses include financial liabilities held for trading(including derivatives that are financial liabilities) and financial liabilities designated to be
measured at fair value with changes included into current profits and losses. ② The financialliabilities formed by transferring of the financial assets failed to meet the conditions forderecognition or formed by continuous involvement of transferred financial assets. ③ The financialguarantee contracts that do not fall under the above ① and ② as well as loan commitments at arate below the market rate of interest that do not fall under the above ①.Where a contingent consideration is recognized by the Company as a financial liability in abusiness combination not under common control, such financial liability shall be measured at fairvalue with changes included into the current profits and losses during accounting treatment.Derecognition conditions for financial liabilitiesWhen the current obligation of the financial liabilities has been relieved in whole or part, thepart of the financial liabilities or obligations that have been relieved upon confirmation isterminated. If the Company reaches an agreement with the creditor to replace the existing financialliabilities by undertaking new financial liabilities and the contract terms of the existing and newliabilities are different in substance, the existing financial liabilities shall be derecognized while thenew liabilities shall be recognized. Where all or part of the contract terms of the existing financialliabilities are subject to material modification, the Company shall derecognize all or part of theexisting financial liabilities while recognizing the financial liabilities with modified terms as newfinancial liabilities. The difference between the book value of the terminated part upon confirmationand the considerations paid is included in the current profit and loss.
Method for determining the fair value of financial assets and financial liabilitiesThe Company measures the fair value of financial assets and financial liabilities in the mainmarket. If there is no major market, the Company measures the fair value of financial assets andfinancial liabilities with most beneficial price for the market and adopts evaluation techniques withmuch available data and other information support that is applicable at that time. Input data fordetermining fair values has three levels, wherein the first level is the unadjusted price available forthe same asset or liability on the date of evaluation in an active market. The second level inputs aredirectly or indirectly observable inputs of relevant assets or liabilities apart from inputs of the firstlevel. The inputs of the third level are unobservable inputs of relevant assets or liabilities. TheCompany gives priority to using the first-level inputs and takes the third-level inputs as the last. Thelowest layer that has significant impact on the overall fair value evaluation determines which layerthis fair value evaluation result shall belong to.Investments in equity instruments of the Company are measured at fair value. However, undercertain circumstances, if recent information needed to determine the fair value is insufficient, or ifthe estimated amount of the fair value features an extensive distribution scope and the costrepresents the best estimate of the fair value in that distribution scope, the cost may represent theappropriate estimate on the fair value within that distribution scope.
Offsetting financial assets and financial liabilitiesFinancial assets and liabilities of the Company are presented separately in the balance sheetwithout offsetting. However, the net amount resulting from the offsetting between financial assetsand financial liabilities shall be presented in the balance sheet only if all of the following criteria aremet: (1) The Company has the statutory right to set off recognized amounts which is currentlyenforceable. (2) The Company intends either to settle on a net basis, or to realize the financial assetsand pay off the financial liabilities simultaneously.
Distinction and relevant treatment methods of financial liabilities and equity instrumentsThe Company distinguishes between financial liabilities and equity instruments according tothe following principles: (1) Where the Company cannot unconditionally avoid fulfilling certaincontractual obligation by delivering cash or other financial assets, then such contractual obligation
is in line with the definition of the financial liability. Although certain financial instruments do notexpressly contain terms and conditions for the contractual obligation to deliver cash or otherfinancial instruments, the contractual obligation may be indirectly formed according to other termsand conditions. (2) Where a financial instrument must or is able to be settled by the Company’s ownequity instrument, the Company shall consider whether the Company’s own equity instrument asthe settlement instrument is a substitute of cash or other financial assets, or the residual interest inthe assets of an entity after deducting all of its liabilities. If it is the first case, the instrument shall bethe financial liability of the issuer. If it is the latter case, the instrument shall be the equityinstrument of the issuer. Under some circumstances, the contract of a financial instrument mayrequire that the financial instrument must or is able to be settled by the Company’s own equityinstrument. The amount of contractual right or contractual obligation equals to the amount of itsown equity instrument receivable or payable multiplied by its fair value at the time of settlement.Whether the amount of such contractual right or obligation is fixed, or varies, wholly or partially,based on variables other than the market value of the Company’s own equity instrument (such asinterest rates, the price of a commodity or the price of a financial instrument), such contract isclassified as financial liability.
In classifying financial instruments (or components) in the consolidated statements, theCompany shall take into account all the terms and conditions agreed between members of theCompany and holders of the financial instruments. If the Company, as a whole, undertakes theobligation to deliver cash, other financial assets or settle in other ways that cause the financialinstrument to become a financial liability, the instrument shall be classified as a financial liability.If a financial instrument or any of its components is a financial liability, the relevant interests,dividends, gains or losses, and gains or losses from redemption or re-financing and so on areincluded in the current profits & losses of the Company.If a financial instrument or its component belongs to an equity instrument, for its issue(including re-financing), repurchase, sale or cancellation, the Company will treat it as a change inequity and will not recognize the change in fair value of equity instruments.
Impairment of financial instruments
The Company, based on expected credit losses, performed impairment accounting andrecognized credit impairment losses on financial assets measured at amortized cost, financial assetsclassified to be measured at the fair value with the changes included into other comprehensiveincomes as well as financial guarantee contracts.
The expected credit loss is a weighted average of credit losses on financial instrumentsweighted at the risk of default. Credit loss refers to the difference between all contractual cash flowsdiscounted as per the original effective interest rate and receivable from the contract and all cashflows expected to be received by the Company, namely, the present value of a shortage of cash.Among them, financial assets purchased or underlying with credit impairment of the Company shallbe discounted at the financial assets’ effective interest rate after credit adjustment.
For account receivables arising from transactions scoped in ASBE on Revenue not containingsignificant financing components, the Company takes the simplified measurement method tomeasure its loss provisions based on the amount of expected credit losses during the entire duration.
For financial assets purchased or underlying with credit impairment, the cumulative change inexpected credit loss during the entire duration since the date of balance sheet date after initialrecognition will be recognized as provision for loss. On each date of balance sheet, the amount ofchange in expected credit loss during the entire duration is included into current profits and lossesas impairment losses or gains. Even if the expected credit loss within the entire duration determinedon the date of balance sheet is less than the amount of expected credit loss reflected by estimatedcash flow upon initial recognition, any favorable change in expected credit loss will be recognized
as impairment gains.
In addition to other financial assets adopting the aforesaid simplified measurement method orfinancial assets purchased or underlying with credit impairment, the Company shall assess whetherthe credit risk of relevant financial instruments has increased significantly since the initialrecognition on each balance sheet date, and shall respectively accrue their provision for loss andrecognize the expected credit loss and its change:
In the event that the credit risk has not increased significantly since the initial recognition andit is in Stage I, the Company shall measure its loss provisions based on the amount of expectedcredit losses for the coming 12 months of such financial instrument and calculate the interest on thebasis of book balance and effective interest rate.
In the event that the credit risk of the financial instrument has increased significantly since theinitial recognition but with no credit impairment and it is in Stage II, the Company shall measure itsloss provisions based on the amount of the expected credit loss of the financial instrument duringthe entire duration and calculate the interest on the basis of book balance and effective interest rate.
In case that credit impairment of the financial instrument has incurred since the initialrecognition and it is in Stage III, the Company shall measure the loss provisions of the financialinstrument based on the amount of expected credit losses during the entire duration, and calculatethe interest at amortized cost and effective interest rate.
Increases or reversals of the provisions for credit losses of the financial instrument arerecorded in the current profits and losses as impairment losses or gains. Except for financial assetsclassified to be measured at fair value through other comprehensive income, the book balance offinancial assets is deducted with provision for credit losses. For financial assets classified to bemeasured at fair value, with the change included in other comprehensive incomes, the Companyshall recognize the provision for credit loss in other comprehensive incomes, and shall not decreasethe book value of such financial assets listed in the balance sheet.
Where the Company has measured the provisions for losses based on the amount of theexpected credit loss over the entire duration of such financial instruments in the prior accountingperiod, but on the current balance sheet date, such financial instruments no longer fall into the scopeof significantly increased credit risk since initial recognition, the Company measures the provisionsfor the losses of such financial instruments based on the amount equivalent to the expected creditlosses over the coming 12 months on the current balance sheet date, with resulting carrybacks ofprovisions for losses recorded in the current profits and losses as impairment gains.
① Significant increase in credit risk
The Company determines if there is a significant increase in credit risk of financial instrumentssince initial recognition by comparing the risks of default of financial instruments on the balancesheet date and the date of initial recognition based on reasonable and well-grounded forward-looking information available. For the financial guarantee contract, when the Company applies theregulations on impairment of financial instruments, the date when the Company becomes the partywhich makes the irrevocable undertaking is regarded as the date of initial recognition. TheCompany will take into account the following factors when it assesses whether the credit risk issignificantly increased: whether the operating results of the debtor has actually changed or isexpected to significantly change or not; whether the regulatory, economic or technical environmentwhere the debtor is located has significantly and adversely changed or not; whether the value of thecollateral as the debt pledge or the guarantee provided by the third party or credit enhancementquality has significantly changed or not, as these changes are expected to reduce the economicmotives of the debtor to make repayments within the time limits prescribed in the Contract or toimpact the default probability; whether the expected performance or repayment behavior of thedebtor has significantly changed or not; whether the Company has changed its management method
for financial instrument credit or not, etc.On the balance sheet date, if the Company determines that the financial instrument only carrieslow credit risks, then the Company will assume that the credit risks of the financial instrument havenot increased significantly since the initial recognition. If the risk of default on financial instrumentsis low, the borrower is highly capable of performing its contractual cash flow obligations in theshort term, and even if the economic situation and operating environment are adversely changedover a long period of time but not necessarily reducing the borrower’s performance of itscontractual cash obligations, then the financial instrument is considered as having a lower creditrisk.
② Credit-impaired financial assets
In case of one or more events adversely affecting the estimated future cash flows of a financialasset, the financial asset becomes a financial asset to which a credit impairment has occurred.Evidence of a credit impairment on a financial asset includes the following information: seriousfinancial difficulties of the debtor; a breach of contract by the debtor, such as a default or overduepayment of interest or principle; the creditor, for economic or contractual considerations relating tofinancial difficulties of the debtor, offers the debtor concessions that are impossible in any othercircumstances; it is probable that the debtor will enter bankruptcy or other financial reorganization;the disappearance of an active market for that financial asset because of financial difficulties of theissuer or the debtor; the purchase or origination of a financial asset at a deep discount that reflectsthe incurred credit losses.The credit impairment of financial assets may be caused by the joint effect of the abovemultiple events, and may not be caused by individually identifiable events.
③ Determination of expected credit losses
In assessing the expected credit loss, the Company takes reasonable and well-foundedinformation into consideration about past events, current condition and predictions of futureeconomic status based on the expected credit loss of single and combined financial evaluationinstruments.
The Company divides the financial instruments into different portfolios based on the commoncredit risk characteristics. See accounting policies of relevant financial instruments for singleevaluation standards and combined credit risk characteristics.
The Company determines the expected credit losses of financial instruments under thefollowing methods:
For financial assets, the credit loss is calculated as the present value of the difference betweenthe contractual cash flows to be collected by the Company and cash flows that are expected to becollected.
For the financial guarantee contract, the credit loss is the expected payment made to thecontract holder by the Company to reimburse the contract holder against the credit losses incurredby the contract holder, deducted by the present value of the differences between the amountsexpected to be received by the Company from the contract holder, debtor or any other party.
For financial assets which have been credit-impaired on the balance sheet date but are notpurchased or underlying with credit impairment, the credit loss is calculated as the differencebetween the book balance of such financial assets and present value of anticipated future cash flowsdiscounted at the original effective interest rate.
11. Notes receivable
The Company, based on the acceptor credit risk of the notes receivable as common riskcharacteristics, divides the notes receivable into different combinations and determines the
accounting estimation policy of expected credit loss.
Classification of combination | Basis for determining combination | Provision method |
Combination of bank acceptance | The acceptor is a banking financial institution. | The Company believed that there was no significant credit risk in the bank’s acceptance held by the Company and there will be no significant loss due to the default of the bank. |
Combination of trade acceptance | The acceptor is a non-bank financial institution or enterprise like a finance company. | The company shall measure the bad-debt provision of receivable trade acceptance based on the expected credit loss during the entire duration. |
12. Account receivable
For the receivables arising from transactions regulated by the Accounting Standards forBusiness Enterprises No. 14 - Revenue Standards (whether or not containing significant financingcomponents) and the lease receivables regulated by the Accounting Standards for BusinessEnterprises No. 21 - Leasing, the Company takes the simplified measurement method to measure itsloss provisions based on the amount of expected credit losses during the entire duration.For accounts receivable, the Company assesses whether the credit risk increases significantlyon the basis of a single financial instrument or a combination of financial instruments. TheCompany singly evaluates the credit risk of receivables with significantly different credit risks andthe following characteristics: receivables in dispute with the other party or involved in litigation andarbitration; accounts receivable that there are obvious indications showing that the debtor is likelyto be unable to fulfill the repayment obligation. The Company is unable to obtain sufficientevidence of significant increase in credit risk at the level of single financial instrument at reasonablecost, but it is feasible to assess whether the credit risk increases significantly on the basis of thecombination of financial instruments. When the assessment is performed on the combination offinancial instruments, the Company can classify the financial instruments based on the commoncredit risk characteristics.The Company classifies the accounts receivable into the following combinations based on theircredit risk characteristics:
Classification of combination | Basis for determining combination | Provision method |
Credit loss that accrues accounts receivable by aging analysis method | Accounts receivable with the same aging have similar credit Risk characteristics | Expected rates of credit loss |
Related parties within the consolidation scope | Funds of subsidiaries within the consolidation scope of controlling shareholders | No expected credit loss under normal circumstances |
If there is objective evidence showing that the credit impairment of certain account receivablehas incurred, the Company shall singly withdraw the bad debt reserve of accounts receivable andconfirm the expected credit loss.
For accounts receivable with credit loss accrued from receivables by aging analysis method,based on the actual credit loss of previous years and considering the forward-looking information ofthe current period, the accounting estimate policies of the Company for measuring the expectedcredit loss are as follows:
Age | Expected rates of credit loss |
With 1 year | 5.00% |
1-2 years | 10.00% |
2-3 years | 20.00% |
3-4 years | 50.00% |
4-5 years | 80.00% |
More than 5 years | 100.00% |
The Company calculates the expected credit loss of receivables on the balance sheet date. Ifthe expected credit loss is greater than the carrying amount of the current receivables impairmentprovision, the Company will recognize the difference as impairment loss of receivables, debit"credit impairment loss" and credit "bad debt provision". Otherwise, the Company will recognizethe difference as impairment gains and make opposite accounting records.For the actual credit losses of the Company, if the relevant receivables are determined to beunrecoverable and are approved to be written off, the Company shall debit "bad debt provision" andcredit "accounts receivable" according to the approved write-off amount. If the write-off amount isgreater than the accrued loss provisions, the "credit impairment loss" will be debited according tothe difference.
13. Receivables financing
Where the following conditions are reached at the same time, the financial assets can beclassified as those measured at fair value and its change and included into other comprehensiveincome: the Company adopts the business management mode of the financial assets for the purposeof collecting contractual cash flow and selling the financial assets. As stipulated in contract terms ofthe financial assets, the cash flows generated on special dates are solely the payments to principalsand interests on the principal amount outstanding.
The Company transfers the accounts receivable held in the form of discount or endorsement,and such business is more frequent and involves a large amount of money. Its business managementmodel is, in essence, to collect and sell contract cash flow. According to the relevant provisions offinancial instrument standards, the accounts receivable is classified into financial assets withchanges measured at fair value and included in other comprehensive income.
14. Other receivables
The Company divides the process of credit impairment of other receivables into three stagesand adopts different accounting treatment methods for the impairment of other receivables indifferent stages:
Credit risk has not increased significantly since initial recognition (Stage I)
For the financial instruments in this stage, the Company shall measure the loss provisionsbased on the expected credit loss in the next 12 months.
The Company classifies other receivables based on aging as a credit risk characteristic andmeasure them on the basis of combination, which is equivalent to the expected credit loss in thenext 12 months.
Credit risk has increased significantly since initial recognition but has not been impaired(Stage II)
For the financial instruments in this stage, the Company shall measure the loss provisionsbased on the expected credit loss during the entire duration.
Credit impairment after initial recognition (Stage III)
For the financial instruments in this stage, the Company shall measure the loss provisionsbased on the expected credit loss during the entire duration.
15. Inventories
Inventories of the Company mainly include low-value consumables, raw materials, goods in-process, merchandise inventory and goods shipped in transit.The inventories are managed based on perpetual inventory system, and valued at actual cost onacquisition. Actual cost is calculated using weighted average method when the inventories areissued or consumed. Low-value consumables and packaging materials are amortized using one-offamortization method.At the end of accounting period, inventory is valuated at cost or net realizable value,whichever is lower; provision for inventory depreciation reserves is made for the part of the costuncollectible of inventory due to damage, fully or partially out of date or selling price lower thanthe cost, etc. Inventory revaluation reserves of merchandise inventories and raw materials aregenerally accrued as the excess of the higher cost of individual inventory over its net realizablevalue. For raw and auxiliary materials of larger amount and lower unit price, inventory revaluationreserves shall be accrued based on the category.Net realizable value of stock goods, work in progress, or held-for-sale materials are determinedby their estimated selling price deducted by estimated selling expenses and related taxes. Netrealizable value for material held for production are determined by the estimated selling price offinished goods deducted by the estimated cost to completion, selling expenses and the related taxes.
16. Contract assets
Recognition method and standard of contract asset
Contract asset refers to the rights of the Company to receive consideration for goodstransferred to the customer, which depend on other factors except for the lapse of time. Where theCompany sells two clearly distinguished commodities to the customer and has the right to collectthe payment because one commodity is delivered and the payment relies on the delivery of the othercommodity, the Company will treat the collection rights as the contract assets.
Determination and accounting method for expected credit loss of contract assets
For the determination method for expected credit loss of contract assets, please refer torelevant contents in 10. Financial asset and liabilities; 11. Notes receivable and 12. Accountreceivable.
The Company calculates the expected credit loss of contract assets on the balance sheet date. Ifthe expected credit loss is greater than the carrying amount of the current impairment provision ofcontract assets, the Company will recognize the difference as impairment loss, debit "assetimpairment loss" and credit "contract asset impairment provision". Otherwise, the Company willrecognize the difference as impairment gains and make opposite accounting records.
For the actual credit losses of the Company, if the relevant contract assets are determined to beunrecoverable and are approved to be written off, the Company shall debit "contract assetimpairment provision" and credit "contract assets" according to the approved write-off amount. Ifthe write-off amount is greater than the accrued loss provisions, the "asset impairment loss" will bedebited according to the difference.
17. Contract costs
Method for determining asset amount related to contract cost
The Company’s assets related to the contract cost comprise the contract performance cost andthe contract acquisition cost.
The contract performance cost is the cost incurred to perform the contract by the Company.The contract performance cost, not covered by other accounting standards for business enterprises,
shall be deemed as one asset if it meets the conditions below: the cost is directly related to oneexisting contract or one contract expected to be acquired and covers direct labor cost, direct materialcost, manufacturing cost (or similar cost), the cost clearly specified to be borne by the customer andother costs incurred by the contract only. The cost increases the resources available to the Companyto fulfill performance duties in the future. The cost is expected to be recovered.
The contract acquisition cost refers to the incremental cost incurred by the Company for thepurpose of securing a contract, which will be recognized in the form of contract acquisition cost asan asset if it is expected to be recovered. If the amortization period of the assets does not exceed oneyear, such cost shall be included as current profit or loss. Incremental cost refers to the cost whichwill not incur unless a contract is secured by the Company (e.g. sales commission, etc.). Other costs(such as the travel expense, whether or not the contract will be acquired, except the incremental costwhich can be recovered as expected) incurred the Company for purpose of acquiring the contractshall be included in the current profit or loss at the time of occurrence, unless those clearly specifiedto be borne by the customer.Asset amortization related to contract costThe Company’s assets related to contract costs are amortized on the same basis as revenuerecognition of goods related to the asset and recorded in the current profits or losses.Asset impairment related to contract costWhen the Company recognizes the impairment loss related to contract cost, the Company shallfirstly recognize the impairment loss of other assets which are recognized as per other accountstandards for business enterprises and are related to the contract. Then, if the book value is higherthan the difference between the remaining consideration expected to be received for the transfer ofthe commodity associated with the asset and the estimated costs to be incurred for the relevantcommodity, impairment provision will be made for the excess portion and recognized it as assetimpairment loss.
If the factors causing the impairment of prior period change and make the previous differencebetween the above-mentioned items higher than the book value of the asset, the withdrew assetimpairment provision shall be reversed and recorded in the current profits or losses, although thebook value of asset after reversion shall not exceed the book value of the asset at the reversion dateunder the condition of not withdrawing the impairment provision.
18. Long-term equity investment
Long-term equity investment of the Company mainly includes the investment to thesubsidiaries, associated enterprises and joint ventures.
The Company follows the basis to judge the joint control: all the participants or group ofparticipants collectively control the arrangements, and the policies for activities related to sucharrangement must be agreed by all such participants.
In general, it constitutes significant influence on an investee if the Company directly orindirectly through a subsidiary controls 20% (inclusive) or more (less than 50%) voting shares ofthe investee. Where the Company controls less than 20% voting shares of the investee directly orindirectly through a subsidiary, significant effects on the investee shall be judged based on the factsand circumstances in the case that appoint representative to the board of directors or similarauthority under the investee, participate the development of financial and operating policies of theinvestee, conduct important trading with the investee, dispatch management personnel to theinvestee, or provide key technical data to the investee.
The one forming control over the investee is the subsidiary of the Company. For the long-termequity investment acquired through business combination under the same control, the share of thecombined party in the book value of net assets presented in consolidated financial statements of
ultimate controlling party acquired at the date of combination is recognized as initial investmentcost of long-term equity investment. The book value of net assets for the combined party is negativeon the combining date, and the long-term equity investment cost is determined as zero.
In case the equity of the investee under the same control is obtained through multiple dealsstep by step to finally form business combination, for package deals, the Company shall accounteach deal as a deal to obtain the control. If it is not a package deal, the share of the book value ofcombined party’s net assets presented in consolidated financial statements of ultimate controllingparty acquired at the date of combination is recognized as initial investment cost of long-termequity investment. The difference between initial investment cost and the sum of the book value oflong-term equity investment before the combination is realized and the book value of considerationadditionally paid to further acquire shares on the date of combination is adjusted against the capitalsurplus; if the capital reserve is not sufficient to be offset, the remaining balance is adjusted againstretained earnings.For long-term equity investments acquired through business combinations not under commoncontrol, the combined cost is used as the initial investment cost.In case the equity of the investee not under the same control is obtained through multiple dealsstep by step to finally form business combination, for package deals, the Company shall accounteach deal as a deal to obtain the control. If it is not a package deal, initial investment cost accountedusing cost method will be the sum of the book value of original equity investment and newinvestment cost. For equity investments held before the date of acquisition where equity method isadopted, relevant other comprehensive income accounted originally by equity method shall not beadjusted for the time being, accounting treatment should be applied to the investment on the samebasis as those adopted by the invested entity for direct disposal of related assets or liabilities. Forequity held before the date of acquisition and accounted at fair value in the available-for-salefinancial assets, the accumulated change in fair value which is originally included in othercomprehensive income shall be transferred to the investment profit or loss for the current period onthe combining date.Apart from the long-term equity investments acquired through business combinationmentioned above, the long-term equity investments acquired by cash payment is used as the cost ofinvestment based on the purchase price actually paid. For long-term equity investments obtained byissuing equity securities, the fair value of the equity securities issued is recorded as the initialinvestment cost. For long-term equity investments obtained by exchange of non-monetary assets,the initial investment cost shall be determined in accordance with relevant provisions in theAccounting Standards for Business Enterprises No. 7 - Exchange of Non-Monetary Assets. Theinitial investment cost shall be determined in accordance with the relevant provisions of theAccounting Standards for Business Enterprises No. 12 - Debt Restructuring by the long-term equityinvestment of debt restructuring.Investment in subsidiaries by the Company shall be calculated by cost method, whileinvestment in joint ventures and associates by the Company shall be calculated by equity method.For long-term equity investment calculated by cost method, the cost of long-term equityinvestment shall be adjusted when the investment is added or recovered. The cash dividends orprofits declared to be distributed by the investee shall be recognized as the current investmentincome.For long-term equity investment calculated by equity method in subsequent measurement, thebook value of the long-term equity investment shall be increased or decreased accordingly with thechanges in owner’s equity of the investee. The shares of the net profits & losses of the investeeattributable to the Company shall be recognized based on the fair value of all identifiable net assetsof the investee upon acquisition of the investment in accordance with the accounting policies andaccounting period of the Company, after deducting the parts of the profits & losses arising from
internal transactions between the associates and joint ventures attributable to the Companycalculated on the basis of shareholding ratio and adjusting the net profits of the investee.When disposing the long-term equity investment, the balance between the book value and theacquired price actually shall be included in the current profit and loss. As for long-term equityinvestments calculated by the equity method, when other changes in owners’ equity other than netgain or loss of the investee are recorded in owners’ equity, the amount initially recorded in owners’equity is proportionally transferred into current investment income.
If all transactions from step-by-step disposal of equity to loss of controlling interest do notbelong to package transaction, the Company will conduct accounting treatment for each transaction.In case of package transaction, all transactions shall be calculated as one transaction of disposingsubsidiaries and losing control power for accounting treatment. However, the difference betweendisposal cost of each transaction and book value of long-term equity investment corresponding toequity disposed before losing control power shall be recognized as other comprehensive income andthen shall be transferred into current profits and losses of losing control power upon such loss.
19. Investment real estate
The investment real estates of the Company are depreciated or amortized by the composite lifemethod. The estimated service life, net residual value ratio and annual depreciation (amortization)rate of the investment real estate are as follows:
Type | Depreciation period (year) | Estimated residual value ratio (%) | Annual depreciation rate (%) |
Houses and buildings | 20 years | 5.00% | 4.75% |
20. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year, which areheld for producing goods, rendering labor services, lease (exclusive of leased houses and buildings)or operation and management.
Fixed assets are recognized when the economic benefits related thereto are likely to flow intothe Company and their costs can be measured reliably. Fixed assets include houses and buildings,machine and equipment, transportation equipment and other equipment, and the actual cost at thetime of acquisition is taken as the entry value. Among them, the cost of purchased fixed assetsincludes the purchase price, import duties and other related taxes, as well as other expenditures thatcan be directly attributed to the fixed assets before the fixed assets reach the predeterminedserviceable state; the cost of the self-constructed fixed assets consists of necessary expensesincurred before the constructed assets are ready for the intended use; the fixed assets invested byinvestors shall be accounted for at the value agreed in the investment contract or agreement, or atthe fair value if the value agreed in the investment contract or agreement is unfair.
(2) Depreciation method
Type | Depreciation method | Depreciation method | Residual value rate | Annual depreciation rate |
Houses and buildings | Straight-line method | 20 years | 5.00% | 4.75% |
Machine and equipment | Straight-line method | 10 years | 5.00% | 9.50% |
Transportation equipment | Straight-line method | 5 years | 5.00% | 19.00% |
Other equipment | Straight-line method | 5 years | 5.00% | 19.00% |
(3) Recognition basis, valuation and depreciation method of fixed assets under financingleaseThe fixed assets rented in by way of financial lease shall be accounted for at the fair value. Forfixed assets obtained by financing lease, the lower of the fair value of rented assets and the presentvalue of the minimum lease payment on the lease start date shall be recorded as the entry value.
21. Construction in progress
Construction in progress is measured at the actual cost. The self-operating works is measuredaccording to the direct material, direct wage, direct construction cost, etc.; the outsourced works ismeasured according to the project price payable; the project cost of the equipment installationworks is determined according to the value of installed equipment, installation cost, commissioningcost and other expenditures incurred. The cost of construction in process shall also includeborrowing costs that should be capitalized.The fixed assets constructed by the Company shall be transferred into fixed assets at theestimated value based on project budget, construction cost and actual project cost from the datewhen fixed assets get ready for intended use and depreciation of such assets will be accrued in nextmonth. Upon completion of the final accounts formalities, the original value difference of the fixedassets will be adjusted.
22. Borrowing costs
Recognition principle of borrowing cost capitalization: The borrowing costs incurred by theCompany that can be directly attributable to the acquisition and construction or production ofqualifying assets, will be capitalized and incurred in the relevant asset cost. Other borrowing costsare recognized as expenses based on the amount incurred and included in the current profit and loss.Qualifying assets are defined as assets that require a substantial amount of time (usually more thanone year) for construction or production activities before the asset is ready for its intended use orsale. These include fixed assets, intangible assets and inventory.
Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowingcosts related to the qualifying assets when the asset expenditure has been incurred, the borrowingcosts have been incurred, and the acquisition, construction or production activities necessary toprepare assets for their intended use or sale are in progress. Where the acquisition or production of aqualifying asset are interrupted abnormally and the interruption period lasts for more than 3 months,the capitalization of the borrowing costs shall be suspended. Capitalization of borrowing costs shallcease once the acquisition, construction or production necessary to prepare the qualifying asset forits intended use or sale are complete.
Method for calculating the amount of borrowing costs to capitalize: If borrowing funds areused specifically for acquiring, constructing or producing qualifying assets, the amount of interesteligible for capitalization by the Company will be the actual interest costs incurred during thespecific borrowing period minus the interest income obtained by depositing or temporarily investingunspent borrowed funds. Where a general borrowing is used for the acquisition and construction orproduction of qualifying assets, the Company shall calculate and determine the to-be-capitalizedamount of interests on the general borrowing by multiplying the weighted average of theaccumulative asset expenditure minus the asset expenditure of the specific borrowing by theweighted average interest rate of the general borrowing used.
23. Right-of-use assets
The right-of-use asset refers to the right of the Company to use the leased assets as a lesseeduring the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company carries out initial measurement tothe use-of-right asset. The cost comprises the following four items: ① initial measurement amountof lease liabilities; ② the amount of lease payment made on or before commencement date of leaseterm, net of relevant amount of used lease incentives (if any); ③ the initial direct cost incurred (i.e.,the incremental cost incurred by reaching the lease agreement); ④ costs expected to be incurred todisassemble and remove the leased assets, restore the site where the leased assets are located orrestore the leased assets to the conditions as agreed under the terms of the lease, excluding costsincurred to produce the inventory.
(2) Subsequent measurement
On the commencement date of the lease term, the Company carries out subsequentmeasurement to the use-of-right assets in the cost mode, that is, measuring the use-of-right assets bydeducting the accrued depreciation amount and accrued impairment loss from the cost.
Where the Company remeasures the lease liabilities according to relevant provisions of thelease criterion, the book value of the use-of-right asset shall be adjusted correspondingly.
(3) Depreciation of right-of-use assets
On the commencement date of the lease term, the provision for depreciation shall be made bythe Company to the right-of-use assets. Generally, the depreciation amount of the use-of-right assetsis accrued from the month when the lease term starts. The accrued depreciation amount shall berecognized as the cost of relevant assets or current profit or loss according to the purpose of theright-of-use assets.
When determining the depreciation method of right-of-use asset, the Company shall makedecisions according to the expected consumption method of the economic benefits related to theright-of-use asset and accrue depreciation to the right-of-use asset with the linear method.
When determining the depreciation years of the right-of-use asset, the Company shall followthe principles below: If the Company can reasonably determine that the ownership of the leasedasset is acquired at the expiration of the lease term, depreciation shall be accrued within theremaining service life of the leased asset. Where it is not reasonably certain that the ownership ofthe lease assets can be obtained upon expiry of lease term, the lease assets shall be depreciated overthe shorter of the lease term and the remaining service life of the lease assets.
In case of impairment of use-of-right asset, the Company shall make subsequent depreciationas per the book value of use-of-right asset after the impairment loss is deducted.
24. Intangible assets
(1) Valuation method, service life and impairment test
The intangible assets of the Company mainly include land use rights, software, trademarks andpatents. As for intangible assets that are purchased, the actual cost is composed of the actual pricepaid and other relevant expenditures. For the intangible assets invested by investors, the actual costis determined by the agreed value in the investment contract or agreement. However, if the agreedvalue is not fair, the fair value will be taken as the actual cost. Intangible assets are amortized usingthe composite life method, and the classifications and amortization periods of the Company’sintangible assets are as follows:
Type | Amortization year |
Land use right | 50 years |
30 patents | 10 years |
Software | 3-5 years |
Trademark or domain name | 10 years |
The Company’s land use rights are amortized evenly according to the lease term, starting fromthe date of transfer. The Company’s patent rights, non-patented technologies, special software userights and other intangible assets are amortized evenly by stages according to whichever period isthe shortest: the asset’s estimated useful life, the beneficial period stipulated in the contract, or theperiod of legal validity. The amount of amortization is included into the current profits and losses orincluded into the relevant asset cost according to the beneficiaries.At the end of each year, the Company shall review, and adjust in case of changes, theestimated useful lives and amortization methods used for intangible assets with limited useful lives;in each accounting period, the Company carries out reviews of the estimated useful life ofintangible assets whose useful life is uncertain. Where there is evidence showing that the useful lifeof these intangible assets is limited, the Company will estimate the useful life thereof and amortizethese intangible assets during the estimated useful life remaining.
(2) Accounting policies for internal R&D expenditures
The internal R&D expenditures of the Company can be divided into expenditures made at theresearch stage and those made at the development stage, depending on the nature of the expenditureand the extent of uncertainty on whether the R&D activities will finally form intangible assets.
For internally-generated intangible assets, expenditures at the research stage are included in thecurrent profits and losses when incurred expenditures at the development stage are recognized as anasset, when the following conditions are met:
It is technically feasible to complete the intangible assets so that they can be used or sold.
There is an intention to complete and use or sell the intangible assets.
There is a potential market for the products manufactured by applying the intangible assets orthere is a potential market for the intangible assets themselves.
There is sufficient support in terms of technological, financial and other resources in order tocomplete the development of the intangible assets, and there is the capability to use or sell theintangible asset.
The expenditures made on the intangible assets during the development stage can be measuredreliably.
Expenditures made in the development stage that fail to meet the above conditions shall beincluded in the current profits and losses when incurred. The development expenditures previouslyincluded in the profit and loss statement will not be recognized as assets in subsequent periods. Theexpenditures incurred and capitalized at the development stage are recorded as developmentexpenditures on the balance sheet and will be carried over as the intangible asset on the date whenthe project is ready for its intended use.
If the expenditures made at the research and development stages cannot be distinguished, allthe R&D expenditures incurred will be fully included in the current profits and losses. The costs ofthe intangible assets generated by internal development activities only include the total expendituresincurred from the time when the capitalization conditions are met to the point when the intangibleassets are used for their intended purposes; for expenditures that are already recorded as such in theprofit and loss statement before the capitalization conditions are met during development of thesame intangible asset, no adjustments will be made.
25. Impairment of long-term assets
On each balance sheet date, the Company shall audit the projects of its subsidiaries, jointventures and associates, including long-term equity investments, fixed assets, projects underconstruction, and intangible assets with finite useful lives. If any of the signs listed below areidentified, this is an indication that the asset may be impaired and the Company will conduct animpairment test. Impairment test is carried out on the intangible assets with uncertain goodwill andbeneficial period at the end of each period, irrespective of whether there is any indication that theassets may be impaired. If there is difficulty in testing the recoverable amount of a single asset, atest shall be conducted on the asset group which the asset belongs to, or on a combination of assetgroups.After the impairment test, if the book value of the asset exceeds its recoverable amount, thedifference shall be recognized as an impairment loss. Once such an impairment loss has beenconfirmed, it shall not be reversed in the subsequent accounting period. The recoverable amount ofan asset is the greater of its fair value less the net value of asset disposal and present value ofexpected future cash flow.The following signs may indicate asset impairment:
Current market price of the asset drops substantially, with the drop in price being notablyhigher than the expected drop over time or due to the asset’s normal use.
Significant changes occur in the current period or will occur in the recent future in terms of theeconomic, technical or legal environment of the operation of an enterprise, and the asset marketwhich have or will have negative impacts on the enterprise.
The market interest rate or other market investment return rates have risen in the current period,affecting the enterprise’s discount rate for calculating the asset’s present value of expected futurecash flow, and leading to a substantial decrease in recoverable amounts of the assets.
There is any amount of evidence to prove the asset has been out of date or the physical assethas been damaged.
The asset has been or will be left unused, terminated for use or disposed of ahead of schedule.
There is evidence from the enterprise’s internal reports proving that the economic performanceof the asset has been lower or will be lower than expected. For example, the net cash flow generatedby the assets or operating profits (or losses) realized is much lower (or higher) than the expectedamounts.
Other signs indicating that the asset may have been impaired.
26. Long-term unamortized expenses
The long-term deferred expenses of the Company refer to the expenses that have been paid, butshall be borne in the current and future periods with an amortization period of more than one year.Moreover, such expenses shall be subject to average amortization within the benefit period. If long-term deferred expense items cannot benefit the future accounting periods, the amortized value ofsuch items yet to be amortized shall be fully transferred into the current profits and losses.
27. Employee remuneration
(1) Accounting treatment method of short-term remuneration
Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employeewelfare, housing funds, labor union funds, employee education funds, medical insurance premiums,industrial injury insurance premiums, and maternity insurance premiums. In the accounting periodduring which the employee has rendered service, the actual short-term remuneration incurred isrecognized as a liability and recorded in the current profits and losses or related asset costs based onthe beneficiary.
(2) Accounting treatment method of post-employment benefitsThe post-employment benefits mainly consist of basic endowment insurance, unemploymentinsurance, enterprise and annuity payments, which are classified into defined contribution plansaccording to the risks and obligations undertaken by the Company. Moreover, the contributionspaid into a separate entity in exchange for the employee’s services during the accounting periods atthe balance sheet date are recognized as a liability, and recorded in current profits and losses orrelevant asset costs based on the beneficiary.
(3) Accounting treatment method of dismissal benefits
Dismissal benefits are required in instances when the Company terminates labor relationshipswith a certain employee prior to the maturity of their labor contract. The Company shall recognizethe employee remuneration liabilities incurred from termination benefits and include them into thecurrent profits and losses. This occurs either when the Company cannot unilaterally withdraw thetermination benefits provided by the plan on the termination of the labor relationship or dismissalproposal, or when the Company recognizes the costs or expenses related to restructuring thepayment of termination benefits-whichever occurs earlier. The compensations paid exceeding oneyear will be discounted then included in the current profits or losses.
(4) Accounting treatment method of other long-term employee benefits
Other long-term benefits mainly include long-term incentive plans and long-term benefits. TheCompany conducts accounting treatment according to relevant provisions of the definedcontribution plans.
28. Lease liabilities
(1) Initial measurement
The Company shall initially measure the lease liabilities according to the present value of thelease payment unpaid on the commencement date of the lease term.
1) Lease payment
The lease payment refers to the payment made by the Company to the leaser as for the right ofuse the leased assets during the lease term, including: ① fixed payment and practical fixed payment,with relevant lease incentive (if any) deducted; ② variable lease payments that are based on anindex or rate, which shall be determined at the time of initial measurement based on the index orrate on the commencement date of the lease term; ③ the exercise price of a purchase option if theCompany is reasonably certain to exercise that option; ④the amount payable for exercising theoption to terminate the lease if the Company intends to exercise the option to terminate the leaseduring the lease term; ⑤ expected payable amount based on secured residual value provided by theCompany.
2) Discount rate
In calculating the present value of the lease payments, the Company adopts the interest rateembedded in the lease as the discount rate. If the Company is unable to determine the interest rateembedded in the lease, it will adopt the incremental borrowing rate as the discount rate. Theincremental loan interest rate is defined as the interest rate that the Company would have to pay toborrow, for a term similar to the duration of the lease and with similar security, the funds necessaryto obtain an asset of similar value to the asset by right of use in a similar economic environment.
(2) Subsequent measurement
When the lease term commences, the Company shall make subsequent measurement for thelease liabilities on the basis of principles below: ① the carrying account of increased lease liabilitieswhen the interests of lease liabilities are recognized; ② the carrying account of decreased lease
liabilities when the lease payment is made; ③ the book value of remeasured lease liabilities whenthe lease payment is changed due to revaluation, lease change or other reasons.The interest expenses of lease liabilities in each period of the lease term are calculated inaccordance with the fixed periodic interest rate, and are included to the current profit or loss, unlesscapitalization is required. The periodic interest rate refers to the discount rate taken by the Companyfor initial measurement or the revised discount rate taken by the Company when it is necessary toremeasure the lease liabilities as per the revised discount rate due to lease payment change or leasechange.
(3) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond theterms of the original contract, including increasing or terminating the right to use one or moreleased assets, extending or shortening the lease term stipulated in the contract, etc. The effectivedate of lease change refers to the date when the Parties reach the agreement on lease change.When the lease changes and meets the following conditions, the Company will treat it as aseparate lease: ① the lease change expands the lease scope by adding one or more right-of-useleased assets; ② the increased consideration is equivalent to the single price of the expanded leasescope adjusted according to the contract.In case where accounting treatment is not made for lease change as a single lease, on theeffective date of lease change, the Company will appropriate the consideration of the changedcontract according to the relevant provisions of the lease criteria and redefine the updated lease term.In addition, the Company will discount the changed lease payment according to the revised discountrate, so as to remeasure the lease liabilities. In calculating the present value of the lease paymentafter the change, the Company uses the interest rate implicit in lease for the remaining lease term asthe discount rate. If the interest rate implicit in lease for the remaining lease term cannot bedetermined, the incremental borrowing interest rate of the lessee on the effective date of leasechange shall be used as the discount rate by the Company. With regard to the impact of the aboveadjustment of lease liabilities, the Company adopts accounting methods in the following situations:
① In the event that the lease scope is narrowed down or the lease term is shortened as a result of thelease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gainsor losses from the partial or complete termination of the lease shall be included into the current lossand profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjustthe book value of the right-of-use assets accordingly.
29. Provisions
When obligations relating to contingencies such as external guarantee, pending litigation orarbitration, product quality assurance, layoff plans, loss contracts, restructuring obligations,environmental pollution control, commitments, and disposal obligation of fixed assets also meet thefollowing conditions, the company recognizes it as a liability: the obligation is currently beingundertaken by the company; there is a high possibility that the fulfillment of the obligation willresult in the outflow of economic benefits from the enterprise; and the amount of the obligation canbe reliably measured.
Provisions are initially measured according to the best estimate of the expenditure required tosettle the present obligation, taking into account factors relating to contingencies such as risks,uncertainties and the time value of money. Where the time value of money has a significant impact,the best estimate shall be ascertained after discounting the future relevant cash outflow. The bookvalue of provisions is reviewed at the balance sheet date and adjusted to reflect the current bestestimate if there is any change.
For possible obligations arising from past transactions or events whose existence depends onwhether one or more uncertain future events occur; or for present obligations formed by pasttransactions or events, where the fulfillment of the obligation is not likely to cause an outflow ofeconomic benefits from the Company, or the amount of the obligation cannot be reliably measured,the Company will disclose these possible or present obligations as contingent liabilities.
30. Share-based payment
Share-based payment refers to transactions in which equity instruments are granted orliabilities are incurred based on equity instruments in order to obtain services provided by theemployees or other parties. Share-based payments are divided into equity-settled and cash-settledshare-based payments.
Equity-settled share-based payments made in exchange for the service of employees aremeasured at the fair value on the date at which the equity instrument is granted to employees.Where the right may only be exercised if the service is completed within the waiting period, or ifspecified performance conditions are met, the fair value shall be included in relevant costs orexpenses using the straight-line method and capital reserve shall be increased accordingly, based onthe best estimate of the number of vested equity instruments within the waiting period.
Cash-settled share-based payments shall be measured at the fair value of liabilities, andrecognized on the basis of share options or other equity instruments undertaken by the Company. Ifexcisable immediately after the grant, the fair value of the liabilities assumed shall be included inthe relevant costs or expenses on the granting date, and the liabilities shall be increased accordingly.If it is necessary to complete the services in the waiting period or achieve the specified performanceconditions before the right is excisable, on each balance sheet date of the waiting period, theservices acquired in the current period shall be included in the cost or expense based on the bestestimation of the excisable right, and the liabilities shall be adjusted accordingly according to thefair values of the liabilities assumed by the Company.
On each balance sheet date and settlement date prior to the settlement of relevant liabilities, thefair value of the liabilities will be re-measured, with any changes recorded in the profits and lossesat the current period.
31. Revenue
Operating revenues of the company are mainly from sales of goods, rendering labor serviceand transferring right to use assets.
Revenue recognition principle
The Company recognizes the revenue upon fulfillment of its performance obligations withinthe contract, that is, when the client obtains control of the relevant goods or services. Acquisition ofcontrol over relevant goods or services means the ability to manage the use of such goods or theprovision of services and to receive almost all economic benefits therefrom.
The Company assesses the contract from the commencement date of the contract andrecognizes each individual performance obligation included by the contract, and determines if eachindividual performance obligation will be fulfilled during a certain period or at a certain time point.
The performance obligations are fulfilled within a certain period once the Company meets oneof the following conditions. Otherwise, the Company is to fulfill the performance obligations at aspecified time point:
1) The client obtains and consumes the economic benefits while the Company fulfills theperformance obligations.
2) The client can control goods or services still under construction while the Company is stillin the process of fulfilling the performance obligations.
3) The goods generated while the Company is in the process of performing the contract areindispensable, and the Company has the right to collect partial payments for the cumulativeperformance obligations that have been fulfilled so far within the contract period.If the performance obligations are performed within the specified period, the Company willrecognize the revenue within this period in accordance with the progress of the contract’sperformance. If the performance progress cannot be reasonably determined and the costs incurredby the Company are expected to be compensated, the revenue will be ascertained according to thecosts incurred, until the performance progress can be reasonably determined.If the performance obligations are performed at the specified time point, the Company willrecognize the revenue at the time when the client obtains control over the relevant goods or services.In judging whether the client has obtained control over goods or services, the Company shallconsider the following signs:
1) The Company has the current right to collect payment for the goods or services.
2) The Company has transferred the legal ownership of the goods to the client.
3) The Company has transferred physical possession of the goods to the client.
4) The Company has transferred the main risks and rewards of ownership of the goods to theclient.
5) The customer has accepted the goods or services, etc.
The Company lists the right to receive considerations for transfer of goods or services to thecustomer as a contract asset, for which the impairment will be withdrawn on the basis of expectedcredit loss. The right of the Company to unconditionally receive considerations from the customeris listed as receivables. The Company presents the obligation to transfer goods or services to thecustomer for considerations received or receivable from the customer as a contract liability.
Revenue measurement principle
1) If there are two or more performance obligations in the contract, the Company willapportion the transaction price to each single performance obligation according to the relativeproportion of the separate selling price of the goods or services promised by the single performanceobligation at the beginning of the contract, and the revenue shall be measured according to thetransaction price apportioned to each single performance obligation.
2) The transaction price refers to the amount of consideration that the Company expects tocollect due to the transfer of goods or services to the client, excluding the amount collected by thirdparties. The transaction price recognized by the Company shall not exceed the amount of therecognized accumulative revenue which is not likely to significantly turn back when relevantuncertainty is eliminated. The expected amount to be returned to the client will be listed as aliability and not be included into the transaction price.
3) If there is significant financing in the contract, the Company shall determine the transactionprice according to the amount payable in cash when the client obtains control of the goods orservices. The difference between the transaction price and the contract consideration shall beamortized by the effective interest method during the contract period. On the contractcommencement date, if the Company estimates that the time between the client’s acquisition ofcontrol over goods or services and the payment of the price by the client will not exceed one year,the significant financing in the contract shall not be considered.Specific method for revenue recognition
Revenue recognized by time point
Selling electric appliances, fittings and materials by the Company is the performance
obligation at a time point.Revenue recognition conditions for domestic sales commodity: The Company has deliveredthe product to the customer according to the contract terms and the customer has received theproduct; the payment has been collected or the receipt voucher has been provided and relevanteconomic profits might flow into the Company; main risks and remuneration as for the ownershipof the commodity have been transferred; and legal ownership and control right of the commodityhave been transferred.
Revenue recognition conditions for exported commodity: The Company has declared theproduct to the customs and the product has been delivered according to the contract terms; the billof lading has been obtained, the payment has been collected or the receipt voucher has beenprovided and relevant economic profits might flow into the Company; main risks and remunerationas for the ownership of the commodity have been transferred; and legal ownership and control rightof the commodity have been transferred.Revenue recognized by performance progressThe technical service revenue of the Company and the business contract between the operatinglease and the customer are the performance obligations to be performed within a period, for whichthe revenue shall be recognized according to the performance progress.
32. Government grants
The government grants of the Company include fiscal appropriation. Government grantsrelating to assets refer to government grants obtained by the Company for purchasing and acquiringlong-term assets or forming long-term assets by other ways. The income-related government grantsrefer to those other than asset-related grants. In case the purpose of a grant is not expresslystipulated in the government document, the Company will categorize the grant according to theseabove principles. If it is difficult to categorize the grant, it will be categorized as the income-relatedgovernment grant.
If a government grant is a monetary asset, it will be measured at the amount received; for thegrant appropriated according to the fixed quota or for the grant where there is concrete evidenceshowing that the Company is qualified to receive governmental financial support and will be able toreceive the support by the end of the accounting period, the grant will be measured at the receivable;if the government grant is a non-monetary asset, it will be measured at the fair value, or measured atits nominal amount (RMB 1) if the fair value cannot be obtained reliably.
The government grants relating to assets are recognized as deferred income, and thegovernment subsidies relating to assets recognized as deferred income are included into the currentlosses and profits according to the average distribution method within relevant asset service life.
If the relevant asset has been sold, transferred, retired or damaged before the end of the servicelife, the balance of the relevant deferred income that has not been allocated will be transferred intothe current profit and loss of asset disposal.
Government grants relating to income that compensate future costs, expenses or losses arerecognized as deferred income, and recognized in profit or loss in reporting the related costs,expenses or losses. The government grants relating to the ordinary activities are included in otherincome or deducted against relevant costs and expenses according to the nature of the accountingevent, otherwise, they are included in non-operating income. Government grants unrelated to dailyactivities will be included in non-operating income.
If the Company obtains the subsidized loan as a result of preferential financial policy, therewill be two situations: the Ministry of Finance appropriates the interest subsidy to the lending bank,or the Ministry of Finance directly appropriates the subsidy to the Company, and the accountingtreatment for each of these situations is as follows:
Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank provides
the Company with the loan at a discounted interest rate, the Company will use the actualamount of loan received as the book value of the loan, and calculate the relevant borrowingcosts based on the principal of the loan and the interest rate.Where the Ministry of Finance directly appropriate the interest subsidy to the Company, theCompany will deduct the corresponding interest subsidy against the borrowing costs.Where the governmental grants recognized by the Company need to be returned, theaccounting treatment will be done as follows in the period they are returned:
1) Where the book value of relevant assets is deducted at the time of the initial recognition, thebook value of assets will be adjusted.
2) Where there is any deferred income concerned, the book balance of the deferred income willbe deducted, but the excessive part will be included in the current profit or loss.
3) For other circumstances, the government grants will be directly included in the currentprofit or loss.
33. Deferred income tax assets/liabilities
Deferred income tax asset and deferred tax liability of the Company are calculated andrecognized based on the differences (temporary differences) between the tax base and the bookvalue of an asset or liability. For the deductible loss and tax credits that can be deducted annually inthe subsequent years according to tax laws, the corresponding deferred income tax assets arerecognized. Where the temporary differences arise from the initial recognition of goodwill, thecorresponding deferred income tax liabilities are not recognized. No deferred tax asset or deferredtax liability is recognized where the temporary differences arising from the initial recognition ofassets or liabilities in a transaction that is not a business combination affect neither accountingprofit nor taxable profit (or deductible loss). On the balance sheet date, the deferred income taxasset and liability are measured at the applicable tax rates during the period when the asset isrealized or the liability is settled as expected.
The Company recognizes the deferred income tax asset to the extent that it is probable that thetaxable income will be available against which the deductible temporary differences, deductiblelosses and tax credits can be deducted.
34. Lease
(1) Accounting method for operating lease
(1) Identification of lease
Lease refers to that the leaser transfers the right to use the asset to the lessee within a certainperiod to obtain consideration contracts. On the commencement date of the contract, the Companyassesses whether the contract serves as the lease or includes the lease. If one party to the contracttransfers the right to control one or more identified assets during a certain period in exchange forconsideration, such contract is or includes lease. To determine whether the contract has transferredthe right to control the use of the identified assets in a certain period of time, the Company assesseswhether the customer in the contract is entitled to receive almost all the economic benefits arisingfrom the use of the identified assets during the use period and is entitled to manage the use of theidentified assets during the use period.
If a number of separate leases are contained in one contract, the Company will split thecontract and adopt accounting methods to each lease on an individual basis. If a contract includesboth lease and non-lease components, the Company will separate the lease from the non-leasecomponent before accounting treatment.
(2) The Company serves as the lessee
At the commencement of the lease term, the right-of-use assets and lease liabilities shall berecognized for the lease by the Company. The right-of-use assets are initially measured by cost,including initial measurement amount of the lease liabilities, lease payment (deducting the amountrelated to the lease incentives) paid on or before the first day of the lease term, initial direct costsincurred and costs predicted to dismantle and remove leased assets, restore the location of the leasedassets or restore the leased assets to the state as agreed in the lease terms.The right-of-use assets and lease liabilities shall be recognized for the lease by the Company asthe lessee.
2) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond theterms of the original contract, including increasing or terminating the right to use one or moreleased assets, extending or shortening the lease term stipulated in the contract, etc. The effectivedate of lease change refers to the date when the Parties reach the agreement on lease change.
When the lease changes and meets the following conditions, the Company will treat it as aseparate lease: ① the lease change expands the lease scope by adding one or more right-of-useleased assets; ② the increased consideration is equivalent to the single price of the expanded leasescope adjusted according to the contract.
In case where accounting treatment is not made for lease change as a single lease, on theeffective date of lease change, the Company will appropriate the consideration of the changedcontract according to the relevant provisions of the lease criteria and redefine the updated lease term.In addition, the Company will discount the changed lease payment according to the revised discountrate, so as to remeasure the lease liabilities. In calculating the present value of the lease paymentafter the change, the Company uses the interest rate implicit in lease for the remaining lease term asthe discount rate. if the interest rate implicit in lease for the remaining lease term cannot bedetermined, the incremental borrowing interest rate of the lessee on the effective date of leasechange shall be used as the discount rate by the Company. With regard to the impact of the aboveadjustment of lease liabilities, the Company adopts accounting methods in the following situations:
① In the event that the lease scope is narrowed down or the lease term is shortened as a result of thelease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gainsor losses from the partial or complete termination of the lease shall be included into the current lossand profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjustthe book value of the right-of-use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leasesat a low value when individual leased assets are brand new, the Company chooses not to recognizethe right-of-use assets and lease liabilities. Lease payments under short-term leases and leases oflow-value assets are recognized by the Company on a straight-line basis over the lease term, andeither included in the cost of the related asset or charged to profit or loss for the period.
(3) The Company serves as the lessor
On the basis of the contract is evaluated as a lease or including a lease in (1), the Company, asthe lessor, divides the lease into financial lease and operating lease at the commencement of thelease.
A lease that transfers in substance almost all the risks and rewards incident to ownership of aleased asset is classified as a financial lease by the lessor. A lease other than the financial lease is anoperating lease.
The Company usually classifies a lease as a financial lease if one or more of the followingsituations exist: ① the ownership of the leased asset is transferred to the lessee at the expiration ofthe lease term; ② the lessee has the right to choose to purchase the leased asset; the establishedpurchase price is expected to be much lower than the fair value of the leased asset when exercisingthe right of choice, and hence it can be reasonably determined that the lessee will exercise this rightof choice on the inception of lease; ③ the lease term accounts for a substantial proportion (not lessthan 75%) of the service life of the leased asset, notwithstanding that the ownership of the asset willnot be transferred; ④ on the inception of lease, the present value of the lease receipts is almostequal to the fair value of the leased asset (not less than 90% of the fair value of the leased asset.);and ⑤ the leased assets are of a specialized nature that only the lessee can use them without makingmajor modifications. The Company may also classify a lease as a financial lease if one or more ofthe following signs exist: ① if the lessee cancels the lease, the resulting loss to the lessor shall beborne by the lessee; ② the gain or loss arising from the fluctuation in the fair value of the residualvalue of the asset shall be attributable to the lessee; and ③ the lessee is able to continue the lease tothe next period at a rent much lower than the market level.
2) Accounting treatment of operating leases
Treatment of rent
The Company adopts the straight-line method to recognize the lease receipts from operatingleases as rental income during all periods within the lease term.
Incentive measures provided
If a rent-free period is provided, total rent shall be amortized by adopting the straight-linemethod within the lease term not excluding the rent-free period, and the rental income shall berecognized in the rent-free period. Certain costs incurred by the lessee, if undertaken by theCompany, shall be excluded from total rental income and the balance of rental income afterdeducting these costs shall be amortized within the lease term.
Initial direct costs
The initial direct costs incurred by the Company related to the operating lease shall becapitalized to the cost of leased underlying asset and shall be included in current profits and losseson the same basis as recognition of rental income during the lease term.
Depreciation
For fixed assets included in assets under operating leases, accrual depreciation shall base onthe depreciation policy adopted by the Company for similar assets. Other assets under operatingleases shall be amortized in a systematic and reasonable manner.
Variable lease payments
Variable lease payments acquired by the Company in connection with operating leases that arenot included in the lease receipts are recognized in the current profits and losses when actuallyincurred.
Change of operating lease
In case of changes in the operating lease, the Company will treat it as a new lease as of theeffective date of the change, and the lease advance or receivables related to the lease before thechange will be regarded as the amount received from the new lease.
(2) Accounting methods of financial lease
Initial measurement
On the commencement date of lease term, the Company recognizes financial lease receivablesfor financial lease and derecognizes financial lease assets. Upon initial measurement of financial
lease receivables, the Company takes net investment in lease as entry value of financial leasereceivables.Net investment in lease is the sum of unsecured residual value and the present value ofoutstanding lease receipts discounted on interest rate implicit in lease on the commencement date ofthe lease term. Lease receipts refer to the amount that the lessor shall collect from the lessee fortransferring the right to use the leased assets during the lease term, including: ① the amount offixed payment and substantial fixed payment to be paid by the lessee, net of relevant amount oflease incentives if any; ② variable lease payments that are based on an index or rate, which shall bedetermined at the time of initial measurement based on the index or rate on the commencement dateof the lease term; ③ exercise price of call option, given that the lessee will reasonably exercise suchoption; ④ amount payable by the lessee for exercising the option to terminate the lease, if it isindicated during the lease term that the lessee will exercise the option to terminate the lease; ⑤ Theresidual value of the guarantee provided to the lessor by the lessee, a party related to the lessee andan independent third party with the financial ability to meet the guarantee obligation.
Subsequent measurementThe Company calculates and recognizes the interest income in each period of the lease termaccording to the fixed periodic rate. Such periodic rate refers to the implicit discount rate used todetermine the net investment in the lease (in case of sublease, the discount rate of the original leaseis adopted, if the interest rate implicit in lease of the sublease cannot be determined), or the reviseddiscount rate determined according to the relevant provisions when the change of the financial leasehas not been treated as a separate lease for accounting, and it is satisfied that the lease will beclassified as the financial lease, if the change takes effect at the beginning of the lease.Accounting treatment of lease changeWhen a change happens to the financial lease and meets the following conditions, theCompany will treat it as a separate lease: ① the change expands the lease scope by increasing theright to use one or more leased assets; ② the increased consideration is equivalent to the singleprice for the expanded portion of lease scope adjusted according to contract circumstances.If such a change to the financial lease is not accounted for as a separate lease and the conditionis satisfied that if the change becomes effective on the commencement date of the lease, the lease isclassified as an operating lease, the Company will account for it as a new lease from the effectivedate of the lease change and regard the net lease investment prior to the effective date of the leasechange as the book value of the leased asset.
35. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
On December 7, 2018, the Ministry of Finance revised and issued the Chinese AccountingStandards No. 21-Lease (hereinafter referred to as the CAS 21). The Company began to carry outaccounting treatment in accordance with the newly revised standards as mentioned above fromJanuary 1, 2021.
(2) Significant accounting estimate changes
□ Applicable √ Not Applicable
(3) Relevant financial statement items at the beginning of 2021 when the adjustmentsstipulated in the new CAS 21-Lease apply for the first time
Should the balance sheet items be adjusted at the beginning of the year?Yes No ?
(4) Notes to comparative data at the early stage of retroactive adjustment stipulated in thenew CAS 21-Lease apply from 2021 for the first time
□ Applicable √ Not Applicable
VI. Taxation
1. Main tax categories and tax rates
Category | Tax base | Tax rate |
Added-value tax | Income from sales of goods | 13% |
Income from provision of technical services | 6% | |
Rental income | 5%, 9% | |
City maintenance and construction tax | Turnover tax paid actually | 7% |
Education surcharge | Turnover tax paid actually | 3% |
Local education surcharge | Turnover tax paid actually | 2% |
House tax | 70% of the original value of the house | 1.2% |
Rental income | 12% | |
Land use tax | Total land area | RMB 5-10/m2 |
Corporate income tax | Taxable income | 15%, 25% |
Disclosure of taxpayers with different corporate income tax rates
Name of taxpayer | Income tax rate |
Hangzhou Robam Appliances Co., Ltd. | 15% |
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 15% |
Zhejiang Cookingfuture Technology Co., Ltd. | 25% |
Beijing Robam Appliances Sales Co., Ltd. | 25% |
Shanghai Robam Appliances Sales Co., Ltd. | 25% |
Hangzhou MingQi Electric Co., Ltd. | 25% |
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 25% |
Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 25% |
2. Preferential tax policy
Preferential income tax policy
The Company obtained the Certificate of High-Tech Enterprise (Certificate No.:
GR202,033,007,142) jointly issued by Zhejiang Provincial Department of Science and Technology,Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, State Taxation
Administration, and Local Taxation Bureau of Zhejiang Province on December 1, 2020. Thecertificate is valid for 3 years. According to the relevant provisions, after being identified as a high-tech enterprise, the Company will enjoy the relevant preferential policies of the state on high-techenterprises for three consecutive years (i.e., the Company is entitled to the preferential income taxpolicy from January 1, 2020 to December 31, 2022), and the income tax shall be levied at the rate of15%.
The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.(hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise(Certificate No.: GR201,933,002,261) jointly issued by Zhejiang Provincial Department of Scienceand Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Serviceon December 4, 2019. After the recognition, it will enjoy the preferential tax policy of the state onhigh-tech enterprises for three consecutive years (i.e., it is entitled to the preferential income taxpolicy from January 1, 2019 to December 31, 2021), and its income tax shall be levied at the taxrate of 15%.
VII. Notes to items in the consolidated financial statements
1. Cash and cash equivalents
In RMB
Item | Ending balance | Beginning balance |
Cash in hand | 193,275.57 | 110,770.11 |
Deposit in bank | 4,141,172,524.88 | 3,885,907,031.42 |
Other cash and cash equivalents | 48,684,204.89 | 35,034,898.78 |
Total | 4,190,050,005.34 | 3,921,052,700.31 |
Note: The other cash and cash equivalents at the end of the accounting period are RMB48,684,204.89, including the L/C margin of RMB 43,631,832.10, and the bill acceptance margin ofRMB 4,922,294.81, the use of which are limited; and the Alipay balance is RMB 130,077.98, whichcan be withdrawn without any limit at any time.
2. Financial assets held for trading
In RMB
Item | Ending balance | Beginning balance |
Financial assets measured at fair value through profit or loss | 2,019,000,000.00 | 2,352,000,000.00 |
Including: | ||
financial products | 2,019,000,000.00 | 2,352,000,000.00 |
Including: | ||
Total | 2,019,000,000.00 | 2,352,000,000.00 |
3. Notes receivable
(1) Classified presentation of notes receivable
In RMB
Item | Ending balance | Beginning balance |
Banker’s acceptance | 516,224,844.51 | 850,950,227.31 |
Trade acceptance | 1,426,292,444.23 | 981,751,215.77 |
Total | 1,942,517,288.74 | 1,832,701,443.08 |
In RMB
Type | Ending balance | Beginning balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
Notes receivable with an individual bad debt provision | 13,766,800.14 | 0.68% | 9,636,760.10 | 70.00% | 4,130,040.04 | 11,176,846.26 | 0.59% | 7,823,792.38 | 70.00% | 3,353,053.88 |
Including: | ||||||||||
Notes receivable with a collective bad debt provision | 2,018,738,466.57 | 99.32% | 80,351,217.87 | 3.98% | 1,938,387,248.70 | 1,887,831,706.05 | 99.41% | 58,483,316.85 | 3.10% | 1,829,348,389.20 |
Including: | ||||||||||
Banker’s acceptance | 516,224,844.51 | 25.40% | 516,224,844.51 | 850,950,227.31 | 44.81% | 850,950,227.31 | ||||
Trade acceptance | 1,502,513,622.06 | 73.92% | 80,351,217.87 | 5.35% | 1,422,162,404.19 | 1,036,881,478.74 | 54.60% | 58,483,316.85 | 5.64% | 978,398,161.89 |
Total | 2,032,505,266.71 | 100.00% | 89,987,977.97 | 4.43% | 1,942,517,288.74 | 1,899,008,552.31 | 100.00% | 66,307,109.23 | 3.49% | 1,832,701,443.08 |
Individual bad debt provision:
In RMB
Name | Ending balance | |||
Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
Trade acceptance with an individual bad debt provision | 13,766,800.14 | 9,636,760.10 | 70.00% |
Individual bad debt provision:
In RMB
Name | Ending balance | ||
Book balance | Bad debt reserve | Percentage of provision | |
Banker’s acceptances combined | 516,224,844.51 | / | |
Trade acceptances combined | 1,502,513,622.06 | 80,351,217.87 | 5.35% |
Total | 2,018,738,466.57 | 80,351,217.87 | -- | -- |
(2) Bad debt provision, and its recovery or reversal in the current periodProvision for bad debts in the current period:
In RMB
Type | Beginning balance | Amount of change in the current period | Ending balance | |||
Provision | Recovery or reversal | Write-off | Other | |||
Trade acceptance | 66,307,109.23 | 23,680,868.74 | 89,987,977.97 | |||
Total | 66,307,109.23 | 23,680,868.74 | 89,987,977.97 |
(3) Notes receivable that has been endorsed or discounted by the Company and not due onthe balance sheet date at the end of the period
In RMB
Item | Ending amount derecognized | Ending amount not derecognized |
Trade acceptance | 10,000,000.00 | |
Total | 10,000,000.00 |
(4) Notes transferred to accounts receivable by the Company due to drawer’s non-performance at the end of the period
In RMB
Item | Amount of accounts receivable transferred at the end of the period |
Trade acceptance | 85,226,731.74 |
Total | 85,226,731.74 |
4. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
Type
Ending balance | Beginning balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||||
Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision |
12,010,024.39 | 1.13% | 9,800,305.29 | 81.60% | 2,209,719.10 | 15,164,080.60 | 1.40% | 12,320,940.24 | 81.25% | 2,843,140.36 |
1,048,911, | 98.87% | 63,083,7 | 6.01% | 985,8 | 1,065,68 | 98.60% | 60,287,5 | 5.66% | 1,005,39 |
receivablewith acollectivebad debtprovision
956.85 | 52.99 | 28,203.86 | 0,355.15 | 49.11 | 2,806.04 |
1,060,921,981.24 | 100.00% | 72,884,058.28 | 6.87% | 988,037,922.96 | 1,080,844,435.75 | 100.00% | 72,608,489.35 | 6.72% | 1,008,235,946.40 |
Individual bad debt provision:
In RMB
Name | Ending balance | |||
Book balance | Bad debt reserve | Percentage of provision | Reasons for provision | |
Accounts receivable with insignificant single amount and individual provision for bad debt | 4,644,294.05 | 4,644,294.05 | 100.00% | Expected to be irrecoverable |
Accounts receivable with insignificant single amount and individual provision for bad debt | 7,365,730.34 | 5,156,011.24 | 70.00% | Expected to be exposed to recovery risk |
Total | 12,010,024.39 | 9,800,305.29 | -- | -- |
In RMB
Name | Ending balance | ||
Book balance | Bad debt reserve | Percentage of provision | |
Within 1 year | 929,679,608.70 | 46,483,980.43 | 5.00% |
1-2 years | 102,491,487.55 | 10,249,148.75 | 10.00% |
2-3 years | 10,312,493.21 | 2,062,498.64 | 20.00% |
3-4 years | 3,961,386.81 | 1,980,693.40 | 50.00% |
4-5 years | 797,744.02 | 638,195.21 | 80.00% |
More than 5 years | 1,669,236.56 | 1,669,236.56 | 100.00% |
Total | 1,048,911,956.85 | 63,083,752.99 | -- |
Disclosed based on the aging of accounts receivable
In RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 936,666,379.48 |
1-2 years | 104,644,092.16 |
2-3 years | 10,312,493.21 |
More than 3 years | 9,299,016.39 |
3-4 years | 3,961,386.81 |
4-5 years | 797,744.02 |
More than 5 years | 4,539,885.56 |
Total | 1,060,921,981.24 |
(2) Bad debt provision, and its recovery or reversal in the current periodProvision for bad debts in the current period:
In RMB
Type | Beginning balance | Amount of change in the current period | Ending balance | |||
Provision | Recovery or reversal | Write-off | Other | |||
Bad debt reserves for accounts receivable | 72,608,489.35 | 4,852,436.13 | 4,576,867.20 | 72,884,058.28 | ||
Total | 72,608,489.35 | 4,852,436.13 | 4,576,867.20 | 72,884,058.28 |
(3) Top five debtors with the biggest ending balances of accounts receivable
In RMB
Unit | Ending balance of accounts receivable | Proportion in the total ending balance of accounts receivable | Ending balance of bad debt reserves |
Unit 1 | 181,717,542.00 | 17.13% | 9,085,877.10 |
Unit 2 | 82,536,456.34 | 7.78% | 4,126,822.82 |
Unit 3 | 60,191,842.27 | 5.67% | 6,019,184.23 |
Unit 4 | 29,324,596.32 | 2.76% | 1,466,229.82 |
Unit 5 | 24,904,134.49 | 2.35% | 1,245,206.72 |
Total | 378,674,571.42 | 35.69% |
5. Advance payments
In RMB
Aging | Ending balance | Beginning balance | ||
Amount | Percentage (%) | Amount | Percentage (%) | |
Within 1 year | 160,166,532.70 | 99.35% | 68,516,272.50 | 98.04% |
1-2 years | 1,049,895.82 | 0.65% | 1,373,126.97 | 1.96% |
Total | 161,216,428.52 | -- | 69,889,399.47 | -- |
The advance payments balance of the top five payers by the end of the current period totaledRMB 108,733,276.25, accounting for 67.45% of the total.
6. Other receivables
In RMB
Item | Ending balance | Beginning balance |
Other receivables | 93,254,368.24 | 56,589,791.38 |
Total | 93,254,368.24 | 56,589,791.38 |
1) Classification of other receivables by nature
In RMB
Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
Security/guarantee deposits | 43,231,981.28 | 39,954,577.27 |
Collections by a third party | 48,933,751.24 | 20,064,674.31 |
Cash reserve | 14,429,760.30 | 4,326,156.43 |
Withholdings | 4,908,658.12 | 2,740,994.81 |
Other | 3,089,259.44 | 3,306,429.16 |
Total | 114,593,410.38 | 70,392,831.98 |
2) Bad debt provision
In RMB
Bad debt provision | Phase I | Phase II | Phase III | Total |
Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
Balance on January 1, 2021 | 13,803,040.60 | 13,803,040.60 | ||
Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Provision in the current period | 7,536,001.54 | 7,536,001.54 | ||
Balance on June 30, 2021 | 21,339,042.14 | 21,339,042.14 |
Changes in the book balance with significant change in amount of the loss provision in the currentperiod
□ Applicable √ Not applicable
Disclosed based on the aging of accounts receivable
In RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 85,635,997.90 |
1-2 years | 5,324,973.46 |
2-3 years | 3,992,295.51 |
More than 3 years | 19,640,143.51 |
3-4 years | 1,938,641.17 |
4-5 years | 15,660,400.00 |
More than 5 years | 2,041,102.34 |
Total | 114,593,410.38 |
3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
Type | Beginning balance | Amount of change in the current period | Ending balance | |||
Provision | Recovery or reversal | Write-off | Other | |||
Bad debt reserve for other receivables | 13,803,040.60 | 7,536,001.54 | 21,339,042.14 | |||
Total | 13,803,040.60 | 7,536,001.54 | 21,339,042.14 |
4) Top five debtors with the biggest ending balances of other receivables
In RMB
Unit | Nature of receivable | Ending balance | Aging | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
Unit 1 | Collections by a third party | 48,933,751.24 | Within 1 year | 42.70% | 2,446,687.56 |
Unit 2 | Security/guarantee deposits | 14,778,000.00 | 4-5 years | 12.90% | 11,822,400.00 |
Unit 3 | Cash reserve | 2,957,384.30 | Within 1 year | 2.58% | 147,869.22 |
Unit 4 | Security/guarantee deposits | 2,400,000.00 | Within 1 year | 2.09% | 120,000.00 |
Unit 5 | Collections by a third party | 2,288,880.00 | Within 1 year | 2.00% | 114,444.00 |
Total | -- | 71,358,015.54 | -- | 62.27% | 14,651,400.78 |
7. Inventory
(1) Classification of inventories
In RMB
Item | Ending balance | Beginning balance | ||||
Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | |
Raw materials | 119,026,786.89 | 119,026,786.89 | 90,099,485.06 | 90,099,485.06 | ||
Products in process | 96,486,420.19 | 96,486,420.19 | 56,669,379.52 | 56,669,379.52 | ||
Merchandise inventory | 377,957,760.48 | 31,299,857.11 | 346,657,903.37 | 356,798,655.96 | 31,299,857.11 | 325,498,798.85 |
Goods shipped in | 994,360,949.65 | 994,360,949.65 | 895,794,857.43 | 895,794,857.43 |
transit | ||||||
Low-cost consumables and packing materials | 22,282,750.38 | 22,282,750.38 | 18,026,823.98 | 18,026,823.98 | ||
Total | 1,610,114,667.59 | 31,299,857.11 | 1,578,814,810.48 | 1,417,389,201.95 | 31,299,857.11 | 1,386,089,344.84 |
(2) Provision for obsolete inventory or for impairment of the cost of contract performance
In RMB
Item | Beginning balance | Increased amount in the current period | Decreased amount in the current period | Ending balance | ||
Provision | Other | Reversals or write-off | Other | |||
Merchandise inventory | 31,299,857.11 | 31,299,857.11 | ||||
Total | 31,299,857.11 | 31,299,857.11 |
8. Other current assets
In RMB
Item | Ending balance | Beginning balance |
Input tax to be deducted | 59,794.96 | 667,378.56 |
Total | 59,794.96 | 667,378.56 |
9. Long-term equity investment
In RMB
Investee | Beginning balance (book value) | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||||||
Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive income | Other changes in equity | Cash dividends or profits declared and distributed | Provision for impairment | Other | ||||
I. Joint venture | |||||||||||
De Dietrich Trade (Shanghai) Co., Ltd. | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 |
Subtotal | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 | ||||||||
II. Associated enterprises | |||||||||||
Total | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 |
10. Other equity instrument investments
In RMB
Item | Ending balance | Beginning balance |
Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | 100,000,000.00 | 100,000,000.00 |
Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | 2,116,023.22 |
Total | 102,116,023.22 | 102,116,023.22 |
Disclosure of non-tradable equity instrument investment by item in the current period
In RMB
Name of item | Recognized dividends income | Accumulated gains | Accumulated losses | Amount transferred from other comprehensive incomes to retained earnings | Reason for being designated to be measured by fair value and the change being recorded in other comprehensive income | Reason for the transfer of other comprehensive incomes to retained earnings |
Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | Held not for the purpose of trading | |||||
Shanghai MXCHIP Information Technology Co., Ltd. | 17,832,510.78 | Held not for the purpose of trading |
11. Investment real estate
(1) Investment real estate under the cost measurement mode
In RMB
Item | Buildings | Total |
I. Original book value | ||
1. Beginning balance | 2,686,483.26 | 2,686,483.26 |
2. Increased amount in the current period | 16,307,011.82 | 16,307,011.82 |
Transfers from inventories/fixed assets/construction in progress | 16,307,011.82 | 16,307,011.82 |
3. Decreased amount in the current period | ||
4. Ending balance | 18,993,495.08 | 18,993,495.08 |
II. Accumulated depreciation and amortization | ||
1. Beginning balance | 95,481.42 | 95,481.42 |
2. Increased amount in the current period | 321,998.30 | 321,998.30 |
(1) Accrual or amortization | 321,998.30 | 321,998.30 |
3. Decreased amount in the current period | ||
4. Ending balance | 417,479.72 | 417,479.72 |
III. Impairment provision | ||
IV. Book value | ||
1. Ending book value | 18,576,015.36 | 18,576,015.36 |
2. Beginning book value | 2,591,001.84 | 2,591,001.84 |
12. Fixed assets
In RMB
Item | Ending balance | Beginning balance |
Fixed assets | 922,789,184.72 | 824,978,354.71 |
Disposal of fixed assets | 2,813.32 | |
Total | 922,791,998.04 | 824,978,354.71 |
(1) Fixed assets
In RMB
Item | Houses and buildings | Machine and 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. Increased amount in the current period | 142,616,945.45 | 24,200,850.62 | 365,424.79 | 1,448,998.65 | 168,632,219.51 |
(1) Purchase | 24,200,850.62 | 365,424.79 | 1,448,998.65 | 26,015,274.06 | |
(2) Transfer from construction in progress | 142,616,945.45 | 142,616,945.45 | |||
3. Decreased amount in the current period | 28,456,588.91 | 5,814,878.76 | 282,915.30 | 561,282.70 | 35,115,665.67 |
(1) Disposal or retirement | 12,149,577.09 | 5,814,878.76 | 282,915.30 | 561,282.70 | 18,808,653.85 |
(2) Other decreases | 16,307,011.82 | 16,307,011.82 | |||
4. Ending balance | 816,089,022.45 | 636,341,305.19 | 18,968,335.67 | 79,460,085.19 | 1,550,858,748.50 |
II. Accumulated 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. Increased amount in the current period | 17,027,411.30 | 28,508,814.35 | 1,124,712.23 | 4,142,224.92 | 50,803,162.80 |
(1) Provision | 17,027,411.30 | 28,508,814.35 | 1,124,712.23 | 4,142,224.92 | 50,803,162.80 |
3. Decreased amount in the current period | 9,537,411.12 | 4,774,457.02 | 268,769.54 | 516,801.29 | 15,097,438.97 |
(1) Disposal or retirement | 9,537,411.12 | 4,774,457.02 | 268,769.54 | 516,801.29 | 15,097,438.97 |
4. Ending balance | 248,309,699.68 | 313,599,790.97 | 12,427,810.89 | 53,732,262.24 | 628,069,563.78 |
III. Impairment provision | |||||
IV. Book value | |||||
1. Ending book value | 567,779,322.77 | 322,741,514.22 | 6,540,524.78 | 25,727,822.95 | 922,789,184.72 |
2. Beginning book value | 461,108,966.41 | 328,089,899.69 | 7,313,957.98 | 28,465,530.63 | 824,978,354.71 |
13. Construction in process
In RMB
Item | Ending balance | Beginning balance |
Construction in process | 515,737,483.33 | 463,424,647.46 |
Total | 515,737,483.33 | 463,424,647.46 |
(1) Construction in progress
In RMB
Item | Ending balance | Beginning balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Construction of Maoshan Intelligent Manufacturing Base infrastructure | 358,193,690.32 | 358,193,690.32 | 358,241,059.59 | 358,241,059.59 | ||
Shengzhou Chengnan project | 138,799,083.39 | 138,799,083.39 | 73,511,454.76 | 73,511,454.76 | ||
Dark Factory project | 2,592,369.95 | 2,592,369.95 | 14,096,794.95 | 14,096,794.95 | ||
Riveting equipment project | 4,568,965.52 | 4,568,965.52 | ||||
Customized management software | 6,056,606.19 | 6,056,606.19 | 3,770,316.32 | 3,770,316.32 | ||
Robam Mansion project | 4,210,939.68 | 4,210,939.68 | 2,219,316.28 | 2,219,316.28 | ||
Air lines project | 1,663,716.90 | 1,663,716.90 | ||||
Project of the Second Production Department | 1,185,840.71 | 1,185,840.71 | 1,530,973.46 | 1,530,973.46 | ||
Other smaller projects | 4,698,953.09 | 4,698,953.09 | 3,822,049.68 | 3,822,049.6 |
8 | ||||||
Total | 515,737,483.33 | 515,737,483.33 | 463,424,647.46 | 463,424,647.46 |
(2) Current changes in major projects under construction
In RMB
(1) Changes in major projects under construction
Name of project | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance | |
Transfer-in fixed assets | Other decreases | ||||
Construction of Maoshan Intelligent Manufacturing Base infrastructure | 358,241,059.59 | 142,569,576.18 | 142,616,945.45 | 358,193,690.32 | |
Shengzhou Chengnan project | 73,511,454.76 | 65,287,628.63 | 138,799,083.39 | ||
Robam Mansion project | 2,219,316.28 | 1,991,623.40 | 4,210,939.68 | ||
Total | 433,971,830.63 | 209,848,828.21 | 142,616,945.45 | 501,203,713.39 |
(Cont.)
Name of project | Budget | Proportion of accumulated project investment in the budget (%) | Project progress (%) | Accumulated amount of interest capitalization | Including: capitalized interests for current period | Interest capitalization rate in the current period | Funding source |
Construction of Maoshan Intelligent Manufacturing Base infrastructure | 633,650,000.00 | 83.77 | 83.77 | Self-financing | |||
Shengzhou Chengnan project | 240,960,000.00 | 67.25 | 67.25 | Self-financing | |||
Robam Mansion project | 546,000,000.00 | 0.77 | 0.77 | Self-financing | |||
Total | 1,420,610,000.00 | — | — | — | |||
14. Right-of-use assets
In RMB
Item | Rented properties | Total |
2. Increased amount in the current period | 20,916,979.79 | 20,916,979.79 |
4. Ending balance | 20,916,979.79 | 20,916,979.79 |
2. Increased amount in the current period | 837,925.59 | 837,925.59 |
(1) Provision | 837,925.59 | 837,925.59 |
4. Ending balance | 837,925.59 | 837,925.59 |
1. Ending book value | 20,079,054.20 | 20,079,054.20 |
15. Intangible assets
(1) Intangible assets
In RMB
Item | Land use right | Software | Trademark | Patents | Total |
I. Original book value | |||||
1. Beginning balance | 225,656,679.95 | 52,340,766.57 | 24,624,622.64 | 7,300,000.00 | 309,922,069.16 |
2. Increased amount in the current period | 105,929.21 | 105,929.21 | |||
(1) Purchase | 105,929.21 | 105,929.21 | |||
4. Ending balance | 225,656,679.95 | 52,446,695.78 | 24,624,622.64 | 7,300,000.00 | 310,027,998.37 |
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. Increased amount in the current period | 2,254,211.14 | 2,428,448.54 | 1,231,231.12 | 561,538.46 | 6,475,429.26 |
(1) Provision | 2,254,211.14 | 2,428,448.54 | 1,231,231.12 | 561,538.46 | 6,475,429.26 |
4. Ending balance | 27,882,308.85 | 42,553,794.01 | 7,374,924.48 | 3,369,230.76 | 81,180,258.10 |
III. Impairment provision | |||||
IV. Book value | |||||
1. Ending book value | 197,774,371.10 | 9,892,901.77 | 17,249,698.16 | 3,930,769.24 | 228,847,740.27 |
2. Beginning book value | 200,028,582.24 | 12,215,421.10 | 18,480,929.28 | 4,492,307.70 | 235,217,240.32 |
16. Goodwill
(1) Original book value of goodwill
In RMB
Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance | ||
Generated by business combination | Disposal | |||||
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 80,589,565.84 | 80,589,565.84 | ||||
Total | 80,589,565.84 | 80,589,565.84 |
The Company recognizes Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.("Shengzhou Kinde") as an assets group. Goodwill at the end of this period is in the same assets
group as recognized upon goodwill impairment test at the date of purchase and in previous year.Procedures and parameters of goodwill impairment test and methods to recognize goodwillimpairment lossThe Company appoints Zhonghe Appraisal Co., Ltd. (Zhonghe Appraisal) to evaluate theShengzhou Kinde assets group, so as to determine if there is goodwill impairment. According to theZHZBZ (2021) No. BJU3,002 appraisal report for the purpose of goodwill impairment test issuedby Zhonghe Appraisal, Zhonghe Appraisal has determined according to the five-year cash flowestimate approved by the management, reckoned the cash flow after the five-year forecast periodusing certain long-term average growth rate, calculated using the present value model of future cashflow, and, under the going-concern assumption, made goodwill impairment test with the higher ofthe net value of assets’ fair value minus disposal expenses and the present value of estimated assets’future cash flow. As tested, the recoverable amount of Shengzhou Kinde assets group is higher thanthe book value of the assets group containing goodwill. No sign of goodwill impairment is found.
17. Long-term deferred expenses
In RMB
Item | Beginning balance | Increased amount in the current period | Amount of amortization in the current period | Other decreases | Ending balance |
Service fee | 317,094.77 | 656,227.92 | 88,451.08 | 884,871.61 | |
Consulting fee | 241,087.85 | 121,512.86 | 195,412.82 | 167,187.89 | |
Membership training fee | 37,665.20 | 18,677.84 | 18,987.36 | ||
Brand endorsement cost | 1,202,511.03 | 602,889.30 | 599,621.73 | ||
Decoration cost | 2,830,658.74 | 707,664.69 | 2,122,994.05 | ||
Total | 1,798,358.85 | 3,608,399.52 | 1,613,095.73 | 3,793,662.64 |
18. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets before offset
In RMB
Item | Ending balance | Beginning balance | ||
Deductible temporary differences | Deferred tax assets: | Deductible temporary differences | Deferred tax assets: | |
Deferred income tax assets before offset recognized based on the provisional estimated expenses | 899,875,322.49 | 134,981,298.35 | 399,311,723.24 | 59,896,758.48 |
Credit impairment provision | 188,275,078.39 | 28,797,734.53 | 152,718,639.18 | 24,152,559.74 |
Deferred income tax assets before offset recognized based on the deferred income | 112,098,466.16 | 16,814,769.92 | 121,306,538.90 | 18,195,980.84 |
Asset impairment provision | 31,299,857.11 | 4,694,978.57 | 31,299,857.11 | 4,694,978.56 |
Change of the fair value of other equity instrument investments | 17,832,510.78 | 2,674,876.62 | 17,832,510.78 | 2,674,876.62 |
Unrealized profits of internal transactions | 8,514,431.25 | 2,128,622.43 | 10,991,208.96 | 2,747,344.24 |
Accrued and unpaid salaries | 863,548.19 | 129,532.23 | ||
Deferred income tax assets before offset recognized due to equity incentive | 802,690.58 | 123,572.10 | ||
Total | 1,258,698,356.76 | 190,215,852.52 | 734,324,026.36 | 112,492,030.71 |
(2) Deferred income tax liabilities before offset
In RMB
Item | Ending balance | Beginning balance | ||
Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
Asset appraisal appreciation arising from business combination where the acquired company is not controlled by the same party after the combination | 27,977,403.00 | 4,196,610.45 | 30,040,521.60 | 4,506,078.24 |
Temporary taxable difference incurred from pre-tax deduction of fixed assets | 5,069,116.27 | 760,367.44 | 4,697,876.68 | 704,681.50 |
Total | 33,046,519.27 | 4,956,977.89 | 34,738,398.28 | 5,210,759.74 |
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
Item | Amount of deferred income tax assets offset against deferred income tax liabilities at the end of the period | Ending balance of deferred income tax assets or liabilities after offset | Initial amount of deferred income tax assets offset against deferred income tax liabilities | Beginning balance of deferred income tax assets or liabilities after offset |
Deferred income tax assets: | 190,215,852.52 | 112,492,030.71 | ||
Deferred income tax liabilities | 4,956,977.89 | 5,210,759.74 |
(4) Presentation of unrecognized deferred income tax assets
In RMB
Item | Ending balance | Beginning balance |
Deductible tax losses | 12,976,605.12 | 9,798,260.49 |
Total | 12,976,605.12 | 9,798,260.49 |
(5) The deductible losses of unrecognized deferred income tax assets will be due in thefollowing years
In RMB
Year | Ending amount | Beginning amount | Remarks |
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 | 9,706,606.02 | 9,706,606.02 | |
2026 | 3,218,130.17 | ||
Total | 12,976,605.12 | 9,798,260.49 | -- |
19. Other non-current assets
In RMB
Item | Ending balance | Beginning balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Prepayments for equipment purchase | 14,498,895.36 | 14,498,895.36 | 3,624,837.56 | 3,624,837.56 | ||
Advances for intangible assets | 57,442.11 | 57,442.11 | ||||
Total | 14,498,895.36 | 14,498,895.36 | 3,682,279.67 | 3,682,279.67 |
20. Short-term borrowings
(I) Short-term borrowing classification
In RMB
Item | Ending balance | Beginning balance |
Credit borrowings | 11,913,223.08 | 6,076,177.30 |
Total | 11,913,223.08 | 6,076,177.30 |
21. Notes payable
In RMB
Type | Ending balance | Beginning balance |
Banker’s acceptance | 697,267,275.89 | 751,802,498.92 |
Total | 697,267,275.89 | 751,802,498.92 |
22. Accounts payable
(1) Presentation of accounts payable
In RMB
Item | Ending balance | Beginning balance |
Payment for materials | 991,886,302.77 | 950,631,079.92 |
Payment for expenses | 969,404,774.82 | 709,723,793.53 |
Payment for construction | 147,363,273.71 | 48,606,778.41 |
Payment for equipment | 14,101,310.30 | 14,870,556.23 |
Total | 2,122,755,661.60 | 1,723,832,208.09 |
As of June 30, 2021, the important accounts payable with an age of more than one year totaled RMB13,039,032.73, mainly involving the outstanding payment for expenses.
23. Contract liabilities
In RMB
Item | Ending balance | Beginning balance |
Advances on sales | 1,032,445,046.81 | 949,591,228.35 |
Total | 1,032,445,046.81 | 949,591,228.35 |
24. Employee benefits payable
(1) Presentation of employee benefits payable
In RMB
Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
I. Short-term benefits | 123,492,155.96 | 325,183,108.11 | 416,572,328.06 | 32,102,936.01 |
II. Post employment benefits - defined contribution plan | 2,638,235.28 | 25,555,412.06 | 27,322,772.95 | 870,874.39 |
III. Termination benefits | 574,030.84 | 574,030.84 | ||
Total | 126,130,391.24 | 351,312,551.01 | 444,469,131.85 | 32,973,810.40 |
(2) Presentation of short-term benefits
In RMB
Item | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance |
1. Salaries, bonuses, subsidies and allowances | 118,930,729.93 | 273,750,529.66 | 361,720,765.16 | 30,960,494.43 |
2. Employee welfare | 13,011,988.18 | 13,010,348.18 | 1,640.00 | |
3. Social insurance | 3,928,826.98 | 17,646,477.88 | 21,004,042.56 | 571,262.30 |
Including: medical insurance | 3,847,685.58 | 16,948,236.65 | 20,250,041.93 | 545,880.30 |
Work-related injury insurance | 81,141.40 | 698,241.23 | 754,000.63 | 25,382.00 |
4. Housing funds | 282,148.00 | 13,667,422.48 | 13,761,500.48 | 188,070.00 |
5. Labor union and staff education expenses | 350,451.05 | 6,303,999.31 | 6,272,981.08 | 381,469.28 |
Equity incentive | 802,690.60 | 802,690.60 | ||
Total | 123,492,155.96 | 325,183,108.11 | 416,572,328.06 | 32,102,936.01 |
(3) Presentation of the defined contribution plans
In RMB
Item | Beginning balance | Increase in the | Decrease in the | Ending balance |
current period | current period | |||
1. Basic pensions | 2,542,370.21 | 24,660,456.62 | 26,364,987.52 | 837,839.31 |
2. Unemployment insurance | 95,865.07 | 894,955.44 | 957,785.43 | 33,035.08 |
Total | 2,638,235.28 | 25,555,412.06 | 27,322,772.95 | 870,874.39 |
25. Taxes payable
In RMB
Item | Ending balance | Beginning balance |
Business income tax | 199,671,229.08 | 111,445,197.66 |
VAT | 101,960,486.71 | 61,150,126.40 |
City maintenance and construction tax | 7,218,768.32 | 3,937,862.94 |
Individual income tax | 1,060,179.40 | 1,526,364.72 |
Education surcharge | 3,093,757.85 | 1,687,655.54 |
Local education surcharge | 2,062,505.31 | 1,125,103.76 |
Stamp tax | 314,417.30 | 507,609.14 |
Land use tax | 340,344.00 | |
Real estate tax | 169,100.88 | 166,973.35 |
Total | 315,550,444.85 | 181,887,237.51 |
26. Other payables
In RMB
Item | Ending balance | Beginning balance |
Other payables | 255,046,157.84 | 242,559,615.30 |
Total | 255,046,157.84 | 242,559,615.30 |
1) Other payables presented by nature
In RMB
Item | Ending balance | Beginning balance |
Security deposits payable | 245,046,047.04 | 234,180,292.44 |
Guarantee deposits payable | 5,065,169.30 | 4,539,028.30 |
Collections by a third party | 3,396,348.83 | 2,616,338.90 |
Other | 1,538,592.67 | 1,223,955.66 |
Total | 255,046,157.84 | 242,559,615.30 |
Note: As of June 30, 2021, the important other accounts payable with an age of more than one year totaled RMB225,447,277.87, mainly involving the sales deposits.
27. Non-current liabilities due within one year
In RMB
Item | Ending balance | Beginning balance |
Lease liabilities due within one year | 2,217,436.33 | |
Total | 2,217,436.33 |
28. Other current liabilities
In RMB
Item | Ending balance | Beginning balance |
Output tax to be transferred | 127,774,706.49 | 116,535,407.26 |
Endorsed trade acceptance | 10,000,000.00 | 10,000,000.00 |
Total | 137,774,706.49 | 126,535,407.26 |
29. Lease liabilities
In RMB
Item | Ending balance | Beginning balance |
Lease payment amount | 24,597,496.28 | |
Less: unrecognized financial expenses | -5,840,773.05 | |
Total | 18,756,723.23 |
30. Deferred income
In RMB
Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
Government grants | 150,163,523.90 | 9,208,072.74 | 140,955,451.16 | ||
Total | 150,163,523.90 | 9,208,072.74 | 140,955,451.16 | -- |
Projects with government grants:
In RMB
Projects with government grants | Beginning balance | Newly-added subsidy amount in the current period | Amount included in the current profits and losses | Ending balance | Related to assets/income |
Intelligent manufacturing and integrated standard and new model application program | 46,784,353.78 | 4,269,752.82 | 42,514,600.96 | Related to assets | |
Construction of production line with an annual output of 2.25 million sets of kitchen appliances | 24,904,851.84 | 1,286,890.62 | 23,617,961.22 | Related to assets | |
Construction project of kitchen appliance R&D, design and testing center | 9,409,768.25 | 1,182,583.62 | 8,227,184.63 | Related to assets | |
Subsidy for the construction of production line with an annual output of 1 million sets of kitchen appliances | 2,282,841.08 | 571,891.98 | 1,710,949.10 | Related to assets | |
Construction of production line with an annual output of 1.08 million sets of built-in | 4,934,334.75 | 341,245.50 | 4,593,089.25 | Related to assets |
Projects with government grants | Beginning balance | Newly-added subsidy amount in the current period | Amount included in the current profits and losses | Ending balance | Related to assets/income |
kitchen appliances | |||||
Development of new generation of environmentally-friendly energy-saving kitchen appliances and their production line | 721,676.15 | 95,325.42 | 626,350.73 | Related to assets | |
Construction of digital intelligent workshop for smart home appliances | 581,649.00 | 79,713.36 | 501,935.64 | Related to assets | |
Construction of the digital workshop with an annual output of 2.25 million sets of kitchen appliances | 128,386.69 | 51,853.02 | 76,533.67 | Related to assets | |
Recycling-centered renewal project | 452,076.81 | 45,805.08 | 406,271.73 | Related to assets | |
Subsidy for an investment in a production line with an annual output of 150,000 kitchen range hoods | 88,988.91 | 29,441.40 | 59,547.51 | Related to assets | |
Academician & expert work station | 256,878.32 | 23,127.84 | 233,750.48 | Related to assets | |
Kitchen appliance R&D, design and testing center | 42,571.60 | 3,812.40 | 38,759.20 | Related to assets | |
Technological upgrading for manufacturing enterprises | 8,300,000.00 | 0.00 | 8,300,000.00 | Related to assets | |
Technological upgrading project with an annual output of 500,000 | 2,591,399.07 | 187,205.58 | 2,404,193.49 | Related to assets | |
Intelligent Unmanned Factory Based on 5G and Cloud Technologies | 19,826,762.65 | 1,039,424.10 | 18,787,338.55 | Related to assets | |
Chengnan New Area No. M2, 020-09 Land Subsidy | 28,856,985.00 | 28,856,985.00 | Related to assets | ||
Total | 150,163,523.90 | 9,208,072.74 | 140,955,451.16 | — |
3·. Capital stock
In RMB
Beginning balance | Increase and decrease of this change (+, -) | Ending balance | |||||
Issue of new shares | Bonus shares | Shares converted from capital reserve | Other | Subtotal | |||
Total number of | 949,024,050.00 | 949,024,050.00 |
32. Capital reserve
In RMB
shares
Item
Item | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance |
Capital (stock) premium | 401,799,332.67 | 401,799,332.67 | ||
Other capital reserves | 802,690.61 | 802,690.61 | ||
Total | 401,799,332.67 | 802,690.61 | 402,602,023.28 |
33. Treasury shares
In RMB
Item | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance |
Repurchase obligation recognized on the issuance of stock options | 199,995,742.59 | 199,995,742.59 | ||
Total | 199,995,742.59 | 199,995,742.59 |
Other notes, including condition and causes of variation in the current period:
Note: In the first extraordinary general meeting of shareholders of 2021 held by HangzhouRobam Appliances Co., Ltd. on April 30, 2021, the Proposal on the Plans of Repurchasing Part ofthe Public Shares was deliberated and adopted, approving that the Company may repurchase part ofits shares with its own funds by means of centralized bidding. The repurchase price shall not bemore than RMB 50/share and RMB 150-200 million is assigned for the repurchase. The repurchaseshall be carried out within 12 months from the day the share repurchase plan is adopted at thegeneral meeting of the shareholders. The Company has accumulatively repurchased 4,929,134shares through its repurchase account by centralized bidding, accounting for 0.5194% of its totalshares. For details, please refer to the Announcement on the Completion of the Repurchase of PublicShares (Announcement No.: 2021-044) disclosed on www.cninfo.com.cn and the Company’sdesignated information disclosure newspapers.
34. Other comprehensive incomes
In RMB
Item | Beginning balance | Amount incurred in the current period | Ending balance | |||||
Amount incurred before income tax in the current period | Minus: amount included in other comprehensive incomes previously and then transferred into the current profit or loss | Minus: amount included in other comprehensive incomes previously and then transferred into current retained earnings | Less: income tax expenses | Net income after tax attributable to the parent company | Net income after tax attributable to minority shareholders | |||
I. Other comprehensive incomes that cannot be | -15,157,634.16 | -15,157,634.16 |
reclassified into profit or loss | ||||||||
Changes in fair value of the investment in other equity instruments | -15,157,634.16 | -15,157,634.16 | ||||||
Total of other comprehensive incomes | -15,157,634.16 | -15,157,634.16 |
35. Surplus reserve
In RMB
Item | Beginning balance | Increase in the current period | Decrease in current Period | Ending balance |
Statutory surplus reserve | 474,516,412.50 | 474,516,412.50 | ||
Total | 474,516,412.50 | 474,516,412.50 |
36. Undistributed profit
In RMB
Item | Current period | Previous period |
Undistributed profit at the end of previous period before adjustment | 6,240,444,654.34 | 5,054,206,720.45 |
Undistributed profit at the beginning of the period after adjustment | 6,240,444,654.34 | 5,054,206,720.45 |
Add: Net profits attributable to owners of the parent company in the current period | 790,388,759.79 | 1,660,749,958.89 |
Dividends payable for ordinary shares | 495,485,158.00 | 474,512,025.00 |
Undistributed profit at the end of the period | 6,535,348,256.13 | 6,240,444,654.34 |
Note: According to the 2020 Profit Distribution Plan adopted at the fifth meeting of the fifthBoard of Directors on April 27, 2021, the Company plans to distribute RMB 5 (tax-inclusive) onevery 10 shares in the 946,870,316 shares (949,024,050 shares (the existing total capital stock ) netof repurchased 2,153,734 shares) to all the shareholders, a total of RMB 473,435,158.00. On May19, 2021, the equity distribution plan was approved by the 2020 Annual Shareholders’ Meeting ofthe Company, with equity distributed on June 1.According to the 2020 profit distribution plan of approved by the Board of Directors ofsubsidiary Shengzhou Kinde on April 30, 2021, the profit available for distribution amongshareholders of the Company at the end of 2020 was RMB 115,658,834.74, and RMB45,000,000.00 of it was planned to be distributed among all existing shareholders of the Companybased on their contribution ratio. The distribution was made on May 12. Of it, the minorityshareholders, contributing 49%, received cash dividends of RMB 22,050,000.00.
37. Operating income and operating cost
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | ||
Income | Cost | Income | Cost |
Main business | 4,225,828,188.22 | 1,861,343,526.44 | 3,146,865,561.70 | 1,429,892,268.93 |
Other businesses | 100,253,843.40 | 25,804,527.87 | 64,306,774.09 | 20,836,307.65 |
Total | 4,326,082,031.62 | 1,887,148,054.31 | 3,211,172,335.79 | 1,450,728,576.58 |
38. Taxes and surcharges
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
City maintenance and construction tax | 18,048,209.85 | 14,140,538.08 |
Education surcharge | 12,771,763.53 | 10,100,384.36 |
House tax | 421,529.89 | |
Land use tax | 61,524.00 | |
Vehicle and vessel usage tax | 9,895.14 | 5,530.80 |
Stamp tax | 1,060,955.85 | 918,951.81 |
Environmental protection tax | 4,349.86 | 22,829.18 |
Total | 32,378,228.12 | 25,188,234.23 |
39. Sales expense
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Marketing service expenses | 658,869,399.50 | 466,038,121.92 |
Advertisement expenses | 212,712,834.57 | 143,181,868.92 |
Transportation expense | 110,649,151.12 | 73,404,730.65 |
Employee remuneration | 111,001,158.94 | 85,640,734.54 |
Promotional activity expenses | 37,411,007.65 | 32,884,532.32 |
Booth decoration expenses | 66,732,522.09 | 40,103,399.65 |
Material consumption | 31,534,245.53 | 28,609,979.15 |
Business hospitality cost | 7,040,351.39 | 5,123,361.43 |
Rental fees | 7,880,885.39 | 4,526,440.07 |
Travel expenses | 7,379,352.93 | 3,277,056.81 |
Intermediary service fees | 7,606,687.09 | 6,366,462.19 |
Office expenses | 7,154,345.09 | 2,139,466.85 |
Other | 4,554,238.58 | 1,383,143.26 |
Total | 1,270,526,179.87 | 892,679,297.76 |
40. Administrative expenses
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Employees’ benefits | 75,168,362.35 | 63,047,359.21 |
Depreciation and amortization | 20,340,171.28 | 19,591,719.73 |
Item | Amount incurred in the current period | Amount incurred in the previous period |
Rental fees | 9,087,992.71 | 3,620,561.19 |
Consulting service fees | 8,560,518.67 | 7,438,538.21 |
Maintenance expenses | 8,390,641.09 | 2,753,334.17 |
Office expenses | 6,978,151.70 | 4,832,241.98 |
Business hospitality cost | 3,159,347.68 | 1,799,214.29 |
Travel expenses | 3,019,005.02 | 1,589,147.21 |
Material consumption | 2,719,283.02 | 2,017,310.49 |
Communication expense | 2,603,129.38 | |
Transportation expense | 1,271,551.52 | 1,266,512.10 |
Costs of equity incentive | 802,690.60 | |
Travel expenses | 744,608.85 | 986,420.87 |
Other | 7,147,655.30 | 7,142,962.53 |
Total | 149,993,109.17 | 116,085,321.98 |
41. R&D expenses
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Employees’ benefits | 63,291,760.88 | 51,250,613.00 |
Direct input | 61,648,388.01 | 52,263,866.12 |
Depreciation and amortization | 7,336,784.12 | 7,361,111.08 |
Design fees | 4,232,409.85 | 1,288,405.08 |
Other expenses | 6,923,863.26 | 5,660,037.34 |
Total | 143,433,206.12 | 117,824,032.62 |
42. Financial expenses
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Interest expenses | 1,228,635.41 | 139,284.26 |
Less: Interest income | 50,677,538.57 | 47,604,818.42 |
Add: foreign exchange gain/loss | 332,356.04 | -758,363.69 |
Add: other expenses | 1,189,967.69 | 441,404.01 |
Total | -47,926,579.43 | -47,782,493.84 |
43. Other incomes
In RMB
Sources generating other incomes | Amount incurred in the current period | Amount incurred in the previous period |
Financial support fund to boost the corporate development | 33,000,000.00 | 53,859,120.00 |
Sources generating other incomes | Amount incurred in the current period | Amount incurred in the previous period |
Amortization of deferred income | 9,208,072.74 | 7,981,443.06 |
VAT refund | 7,323,753.03 | |
Financial performance reward | 2,600,000.00 | 3,400,000.00 |
Energy subsidy | 715,502.22 | |
The "946 Policy" subsidy | 500,000.00 | |
Refund of individual income tax handling fee | 412,808.74 | 1,092,154.23 |
Subsidy for enterprises’ talent introduction | 330,630.00 | |
Foreign economic and trade subsidy | 288,000.00 | |
Subsidy for top runners by output per mu in Shaoxing | 200,000.00 | |
Funds under industrial economic policies | 150,000.00 | |
Post allowance and social insurance allowance | 122,278.28 | 3,226,432.26 |
Enterprise subsidy | 87,920.00 | |
Commendation and reward for key enterprises | 60,000.00 | 60,000.00 |
Subsidy for equipment investment | 38,800.00 | |
Reward for top ten industrial enterprises | 30,000.00 | |
Financial subsidy from the administration committee | 10,000.00 | |
VAT exemption or reduction | 9,000.00 | 9,000.00 |
Manufacturing revenue scale incentive | 2,000,000.00 | |
Patent awards | 576,180.00 | |
Incentive for high and new technologies | 500,000.00 | |
Project awards | 458,000.00 | |
Return of social insurance premium | 236,660.73 | |
Budget subsidy for accounting center | 200,000.00 | |
Subsidy for industry standards | 121,244.00 | |
Recruitment subsidy | 6,000.00 | |
Total | 55,086,765.01 | 73,726,234.28 |
44. Investment income
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Investment income during holding of financial assets for trading | 32,869,587.74 | 26,341,452.82 |
Item | Amount incurred in the current period | Amount incurred in the previous period |
Investment incomes obtained during holding of other equity instruments | ||
Income from long-term equity investments accounted for using the equity method | -1,440,070.07 | -2,239,220.46 |
Total | 31,429,517.67 | 24,102,232.36 |
45. Loss from credit impairment
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Bad debt losses on notes receivable | -23,680,868.74 | -11,545,668.38 |
Bad debt losses from accounts receivable | -287,302.15 | -3,367,587.99 |
Bad debt losses of other receivables | -7,524,268.32 | -3,598,513.22 |
Total | -31,492,439.21 | -18,511,769.59 |
46. Asset disposal income
In RMB
Sources of asset disposal income | Amount incurred in the current period | Amount incurred in the previous period |
Non-current asset disposal income | -2,035,843.51 | 11,388.98 |
Including: income from disposal of fixed assets | -2,035,843.51 | 11,388.98 |
47. Non-operating income
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in the current non-recurring gains and losses |
Government grants | 13,000.00 | 30,000.00 | 13,000.00 |
Other | 1,182,370.24 | 556,353.17 | 1,182,370.24 |
Total | 1,195,370.24 | 586,353.17 |
Item | Amount incurred in the current period | Amount incurred in the previous period | Source and basis | Related to assets/income |
Rewards and subsidies for corporate culture club | 30,000.00 | YWMB (2,019) No.18 | Related to income | |
Subsidy for diesel vehicle scrapped in advance | 13,000.00 | — | Related to income | |
Total | 13,000.00 | 30,000.00 | — | — |
48. Non-operating expenses
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in the current non-recurring gains and losses |
Losses from non-current asset damage or retirement | 1,923.08 | 1,923.08 | |
External donations | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 |
Other | 576,001.20 | 695,304.64 | 576,001.20 |
Total | 1,577,924.28 | 1,695,304.64 |
49. Income tax expenses
(1) Presentation of income tax expenses
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Current income tax expenses | 221,466,949.04 | 172,846,414.95 |
Deferred income tax expenses | -77,977,344.97 | -61,356,353.28 |
Total | 143,489,604.07 | 111,490,061.67 |
(2) Adjustment of accounting profit and income tax expense
In RMB
Item | Amount incurred in the current period |
Total profit | 943,135,279.38 |
Income tax expense calculated based on statutory/applicable tax rate | 141,470,291.91 |
Effects of the subsidiaries’ application of different tax rates | -10,401.93 |
Effects of the adjustment of income tax in previous period | |
Effects of the non-taxable income | |
Effects of the non-deductible costs, expenses and losses | 2,167,728.45 |
Effects of using deductible losses of unrecognized deferred income taxes in the previous period | 77.20 |
Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 716,695.80 |
Effects of taxes deducted by research and development expense addition (indicated with "-") | -854,787.36 |
Income tax expense | 143,489,604.07 |
50. Other comprehensive incomes
Refer to notes.
51. Cash flow statement items
(1) Other cashes received in relation to operating activities
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Interest revenue on deposits | 50,677,538.57 | 47,289,176.66 |
Government grants | 38,558,939.24 | 83,007,211.22 |
Revenue collected and payment made on behalf of other agencies | 12,423,235.01 | 6,405,232.50 |
Cash reserve | 5,010,000.00 | 2,060,756.89 |
Guarantee and security deposits | 9,382,127.28 | 3,445,820.00 |
Other payments | 2,652,812.06 | 1,579,919.38 |
Total | 118,704,652.16 | 143,788,116.65 |
(2) Other cashes paid relating to operating activities
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Period expenses | 1,035,315,521.21 | 681,737,610.63 |
Revenue collected and payment made on behalf of other agencies | 7,363,869.83 | 5,850,848.09 |
Guarantee and security deposits | 7,846,747.85 | 9,872,837.56 |
Security deposit for letter of credit | 10,236,863.39 | 7,628,855.25 |
Cash reserve | 13,693,388.58 | 8,607,467.00 |
Other | 1,029,155.95 | 1,043,789.70 |
Total | 1,075,485,546.81 | 714,741,408.23 |
(3) Other cashes received from financing activities
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Income from accounts receivable factoring | 5,552,160.81 | |
Total | 5,552,160.81 |
52. Supplementary information of Cash Flow Statement
(1) Supplementary information of Cash Flow Statement
In RMB
Supplementary information | Current amount | Amount of the previous period |
1. Reconciliation of net profit to cash flow from operating activities: | -- | -- |
Net profit | 799,645,675.31 | 623,178,439.35 |
Add: Asset impairment provision | 31,492,439.21 | 18,511,769.59 |
Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets | 51,125,161.10 | 47,537,865.87 |
Depreciation of right-of-use assets | ||
Amortization of intangible assets | 6,475,429.26 | 6,783,614.63 |
Amortization of long-term deferred expenses | 1,613,095.73 | 235,373.08 |
Losses arising from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") | 2,035,843.51 | -11,388.98 |
Losses on disposal of fixed assets (gains indicated with "-") | 1,923.08 | |
Losses from fair value change (gains expressed with “-”) | ||
Financial expenses (profit shall be indicated with"-") | 264,556.23 | -540,552.95 |
Investment losses (gains expressed with “-”) | -31,429,517.67 | -24,102,232.36 |
Decrease in deferred income tax assets (increase shall be indicated with “-”) | -77,723,821.81 | -61,093,635.20 |
Increase in deferred income tax liabilities (decrease shall be indicated with “-”) | -253,781.85 | -262,718.08 |
Decrease in inventories (increase shall be indicated with “-”) | -192,725,465.63 | 69,294,179.87 |
Decrease in operating receivables (increase shall be indicated with “-”) | -530,224,948.55 | -218,336,278.24 |
Increase in operating payables (decrease expressed with "-") | 478,335,110.72 | -62,765,374.17 |
Other | -8,405,382.14 | 9,258,071.15 |
Net cash flow from operating activities | 530,226,316.50 | 407,687,133.56 |
2. Non-cash flow-involved major investing and financing activities: | -- | -- |
Conversion of debt into capital | ||
Convertible bonds due within one year | ||
Fixed assets acquired under financing leases | ||
3. Net increase/decrease in cash and cash equivalents: | -- | -- |
Ending balance of cash at the beginning of the period | 4,141,495,878.43 | 4,315,955,499.25 |
Less: cash beginning balance | 3,886,096,513.56 | 4,029,296,265.50 |
Add: ending balance of cash equivalents | ||
Less: cash equivalents at the beginning of the period | ||
Net increase in cash and cash equivalents | 255,399,364.87 | 286,659,233.75 |
(2) Composition of cash and cash equivalents
In RMB
Item | Ending balance | Beginning balance |
I. Cash | 4,141,495,878.43 | 3,886,096,513.56 |
Including: cash on hand | 193,275.57 | 110,770.11 |
deposits available for payment at any time | 4,141,172,524.88 | 3,885,907,031.42 |
other cash and cash equivalents available for payment at any time | 130,077.98 | 78,712.03 |
III. Balance of cash and cash equivalents at the end | 4,141,495,878.43 | 3,886,096,513.56 |
53. Assets with limited ownership or right to use
In RMB
of the periodItem
Item | Ending book value | Reasons for limit |
Cash and cash equivalents | 48,554,126.91 | Letters of credit and note margin |
Total | 48,554,126.91 | -- |
54. Foreign currency monetary item
In RMB
Item | Ending balance in foreign currency | Exchange rate for conversion | Ending balance in RMB |
Cash and cash equivalents | -- | -- | |
Including: USD | 5,117,850.59 | 6.4601 | 33,061,826.56 |
EUR | 361.23 | 7.6862 | 2,776.49 |
AUD | 3.29 | 4.8528 | 15.97 |
Accounts receivable | -- | -- | |
Including: USD | 2,750,906.40 | 6.4601 | 17,771,288.53 |
55. Government grants
Basic information of government grants
In RMB
Type | Amount | Items | Amounts included in current profits and losses |
Financial support fund to boost the corporate development | 33,000,000.00 | Other income | 33,000,000.00 |
VAT refund | 7,323,753.03 | Other income | 7,323,753.03 |
Financial performance reward | 2,600,000.00 | Other income | 2,600,000.00 |
Energy subsidy | 715,502.22 | Other income | 715,502.22 |
The "946 Policy" subsidy | 500,000.00 | Other income | 500,000.00 |
Refund of individual income tax handling fee | 412,808.74 | Other income | 412,808.74 |
Subsidy for enterprises’ talent introduction | 330,630.00 | Other income | 330,630.00 |
Foreign economic and trade subsidy | 288,000.00 | Other income | 288,000.00 |
Subsidy for top runners by output per mu in Shaoxing | 200,000.00 | Other income | 200,000.00 |
Funds under industrial economic policies | 150,000.00 | Other income | 150,000.00 |
Post allowance and social insurance allowance | 122,278.28 | Other income | 122,278.28 |
Enterprise subsidy | 87,920.00 | Other income | 87,920.00 |
Commendation and reward for key enterprises | 60,000.00 | Other income | 60,000.00 |
Subsidy for equipment investment | 38,800.00 | Other income | 38,800.00 |
Type | Amount | Items | Amounts included in current profits and losses |
Reward for top ten industrial enterprises | 30,000.00 | Other income | 30,000.00 |
Financial subsidy from the administration committee | 10,000.00 | Other income | 10,000.00 |
VAT exemption or reduction | 9,000.00 | Other income | 9,000.00 |
Subsidy for diesel vehicle scrapped in advance | 13,000.00 | Non-operating income | 13,000.00 |
VIII. Changes in the scope of consolidated financial statementsThere is no change in the scope of consolidated financial statements in the current period.
IX. Interests in other entities
1. Equity in subsidiaries
(1) Composition of the Robam Group
Subsidiary | Principal place of business | Registration place | Nature of business | Shareholding ratio | Acquisition method | |
Direct | Indirect | |||||
Beijing Robam Appliances Sales Co., Ltd. | Beijing | Beijing | Sales of kitchen appliances | 100.00% | Businesses combination under common control | |
Shanghai Robam Appliances Sales Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 100.00% | Businesses combination under common control | |
Hangzhou MingQi Electric Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Acquired through investment | |
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | Shengzhou | Shengzhou | Production and sales of kitchen appliances | 51.00% | Business combination not under common control | |
Hangzhou Robam Fuchuang Investment Management Co., Ltd. | Hangzhou | Hangzhou | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment | |
Company | City | |||||
Zhejiang Cookingfuture Technology Co., Ltd. | Shengzhou | Shengzhou | Smart kitchen design | 35.70% | Acquisition upon its establishment |
(2) Major non-wholly owned subsidiaries
In RMB
Subsidiary | Proportion of shares held by minority shareholders | Gains/losses attributable to minority shareholders in the current period | Dividend declared and distributed to minority shareholders in the current period | Balance of minority shareholders’ equity at the end of the period |
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 49.00% | 10,695,441.84 | 22,050,000.00 | 131,797,823.03 |
Zhejiang Cookingfuture Technology Co., Ltd. | 30.00% | -965,284.66 | 6,309,337.84 |
(3) Main financial information of important partially-owned subsidiaries
In RMB
Subsidiary | Ending balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 221,771,167.85 | 246,463,960.38 | 468,235,128.23 | 165,446,016.29 | 33,813,962.89 | 199,259,979.18 |
Zhejiang Cookingfuture Technology Co., Ltd. | 21,387,813.60 | 136,901.34 | 21,524,714.94 | 493,588.82 | 493,588.82 |
(Continued 1)
Subsidiary | Beginning balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shengzhou Kinde Intelligent Kitchen Appliances 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 Cookingfuture Technology Co., Ltd. | 23,647,941.39 | 56,337.05 | 23,704,278.44 | 305,536.79 | 305,536.79 |
(Continued 2)
Subsidiary | Amount incurred in the current period | Amount incurred in the previous period | ||||||
Operating income | Net profit | Total consolidated income | Cash flow from operating activities | Operating income | Net profit | Total consolidated income | Cash flow from operating activities | |
Kinde Intelligent | 124,027,172.62 | 20,862,147.66 | 20,862,147.66 | 6,936,248.30 | 92,100,731.82 | 22,165,638.90 | 22,165,638.90 | 27,412,195.88 |
COOKINGFUTURE | -3,217,615.53 | -3,217,615.53 | -4,240,135.64 |
3. Equity in joint ventures or associates
Summary of the financial information of minor joint venture and associates
In RMB
Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period | |
Joint venture: | -- | -- |
Total book value of investment | 2,012,699.52 | 3,452,769.59 |
Totals of the following items calculated as per respective shareholding proportion | -- | -- |
Associate: | -- | -- |
Totals of the following items calculated as per respective shareholding proportion | -- | -- |
-- Net profit | -1,440,070.07 | -715,569.20 |
-- Total comprehensive income | -1,440,070.07 | -715,569.20 |
X. Risks Relating to Financial InstrumentsMajor financial instruments of the Company include accounts receivable, accounts payable, etc. SeeNote VI for detailed description of these financial instruments. Risks related to these financialinstruments and risk management policies adopted by the Company to reduce such risks areoutlined as follows. The management of the Company manages and monitors such risk exposures toensure to keep the risks above within limited scope.The Company’s various risk management objectives and policies are outlined as follows:
Risk management conducted by the Company is to properly balance risk and income, minimizenegative impacts of the risks on the Company’s business performance and maximize benefits of theshareholders and other equity investors. Based on the risk management objective, the Company’sbasic risk management policy is to determine and analyze all kinds of risks faced by the Company,establish appropriate risk bottom line for risk management, and monitor all risks promptly andreliably keep risks within a limited range.Market risk - price riskSince the Company sells its products at market prices, it may be affected by such price fluctuations.Credit risk:
As of June 30, 2021, the biggest credit risk exposure that may bring financial loss to the Companymainly comes from the Company’s financial assets loss caused by the other party’s failure toperform its obligations in the contract, particularly including the loss in the book value ofrecognized financial assets in the consolidated balance sheet. To reduce credit risk, the Companyhas a dedicated team responsible for determining the credit line, conducting credit approval andimplementing other monitoring procedures, to ensure that necessary measures are taken to recoverdue debt. In addition, the Company reviews the recovery of each account payable on each balancesheet date, so as to ensure sufficient bad debt provisions for unrecoverable accounts. Therefore, themanagement of the Company holds that the credit risk faced by the Company has been significantlyreduced. The credit risk of the Company’s liquid capital is low since it is deposited at banks withrelatively high credit rating. Because the risk exposures of the Company are related to multiplecontracting parties and multiple clients, the Company has no major credit risk concentration.The Company adopts necessary policies to ensure all of the clients involved in the sales of our
products have good credit record. The Company has no major credit risk concentration. LiquidityriskLiquidity risk is faced by the Company where it cannot meet its financial obligations as they falldue. The Company manages the liquidity risk by ensuring capital liquidity to fulfill its dueobligations to avoid unacceptable losses or damages to corporate reputation. The Companymanagement has closely examined the liquid assets of the Company and regularly analyzed theliability structure/term and bank lines and so on to endure fund sufficiency. It is concluded that theCompany has sufficient funds to meet the demands of short-term loans and capital expenditure ofthe Company. Analysis of the financial assets and financial liabilities of the Company as permaturity of the undiscounted contract obligations remained is made as follows:
Balance on June 30, 2021
Item | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
Financial assets | 9,232,859,585.28 | 9,232,859,585.28 | |||
Cash and cash equivalents | 4,190,050,005.34 | 4,190,050,005.34 | |||
Financial assets held for trading | 2,019,000,000.00 | 2,019,000,000.00 | |||
Notes receivable | 1,942,517,288.74 | 1,942,517,288.74 | |||
Accounts receivable | 988,037,922.96 | 988,037,922.96 | |||
Other receivables | 93,254,368.24 | 93,254,368.24 | |||
Financial liabilities | 3,257,730,835.30 | 3,271,930,835.30 | |||
Short-term borrowings | 11,913,223.08 | 11,913,223.08 | |||
Notes payables | 697,267,275.89 | 697,267,275.89 | |||
Accounts payable | 2,122,755,661.60 | 2,136,955,661.60 | |||
Other payables | 255,046,157.84 | 255,046,157.84 | |||
Payroll payable | 32,973,810.40 | 32,973,810.40 | |||
Other current liabilities | 137,774,706.49 | 137,774,706.49 |
Sensitivity analysis of foreign exchange riskThe exchange rate risk borne by the Company is mainly associated with USD, Euro and HKD, etc.The foreign exchange risk borne by the Company is mainly associated with USD (which shall bechanged according to relevant realities). The Company’s main business activities priced and settledin RMB. As of June 30, 2021, the Company’s balances of assets and liabilities are in RMB (exceptfor the balances of the assets and liabilities in foreign currency in "VI. 54 Monetary items in foreigncurrency" in this Note). Exchange risk resulting from the assets and liabilities whose balances are inforeign currency may affect the Company’s performance.The Company pays close attention to the impact of change in exchange rate on the Company’sexchange risk. Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk.
XI. Disclosure of Fair Value
1. Assets and liabilities measured at fair value at the end of the period
In RMB
Item | Ending fair value | |||
Fair value measurement (Level 1) | Fair value measurement (Level 2) | Fair value measurement (Level 3) | Total | |
Continuous fair value measurement | -- | -- | -- | -- |
(I) Financial assets held for trading | 2,019,000,000.00 | 2,019,000,000.00 | ||
1. Financial assets measured at fair value with changes included in current profit or loss | 2,019,000,000.00 | 2,019,000,000.00 | ||
(III) Investment in other equity instruments | 102,116,023.22 | 102,116,023.22 | ||
II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Valuation techniques adopted and qualitative and quantitative information on importantparameters for the items involved in Level 3 continuous and non-continuous fair valuemeasurement
Item | Fair value as of June 30, 2021 | Valuation techniques | Significant unobservable value | Relationship between unobservable value and fair value |
financial products | 2,019,000,000.00 | Optimal fair value estimation | Investment cost | — |
Investment in other equity instruments | 102,116,023.22 | Optimal fair value estimation | Investment cost | — |
XII. Related Party and Related Party Transactions
1. The Company’s parent company
Parent company | Registration place | Nature of business | Registered capital | Proportion of the Company’s shares held by the parent company | Proportion of voting right of the parent company in the Company |
Hangzhou Robam Industry Group Co., Ltd. | Hangzhou, Zhejiang | Investment and industrial management | RMB 60 million | 49.68% | 49.68% |
2. The Company’s subsidiaries
See Note "Composition of the Robam Group" for more about the Company’s subsidiaries
3. The Company’s joint ventures and associated companies
See Note "Major non-wholly owned subsidiaries" for more about the Company’s important jointventures or associated companies.
4. Other related parties
Name of other related parties | Relation between other related parties and the Company |
Hangzhou Amblem Household Co., Ltd. | Controlled by the same parent company |
Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Controlled by the same parent company |
Hangzhou Nbond Nonwovens Co., Ltd. | Controlled by the same parent company |
Hangzhou Yuhang Yaguang Spray Coating Factory | Controlled by the actual controller’s younger sister |
Hangzhou City Garden Hotel Co., Ltd. | Significantly influenced by the parent company |
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Controlled by the same parent company |
Shaoxing Kinde Electric Appliances Co., Ltd. | Other shareholders of the subsidiaries owned by the Company |
Hangzhou Guoguang Touring Commodity Co., Ltd. | Controlled by the same parent company |
Hangzhou Small Planter Technology Co., Ltd. | Controlled by the same parent company |
5. Related transactions
(1) Related transactions regarding purchasing and selling goods and providing andaccepting labor servicesTable of the purchasing of goods and receiving of labor services
In RMB
Related parties | Description of the related transactions | Amount incurred in the current period | Whether exceeds the approved limit or not (Y/N) | Amount incurred in the previous period |
Hangzhou Yuhang Yaguang Spray Coating Factory | Receiving of labor services | 4,188,923.61 | No | 5,127,566.52 |
Hangzhou Small Planter Technology Co., Ltd. | Purchase of goods | 2,277,929.75 | No | |
Hangzhou Amblem Household Co., Ltd. | Purchase of goods | 413,419.77 | No | 2,137,356.44 |
Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Purchase of goods | 299,710.75 | No | 270,199.44 |
Hangzhou City Garden Hotel Co., Ltd. | Receiving of labor services | 201,474.34 | No | |
Hangzhou Guoguang Touring Commodity Co., Ltd. | Purchase of goods | 70,568.15 | No | |
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Purchase of goods | 424.78 | No | 1,387,629.65 |
Hangzhou Nbond Nonwovens Co., Ltd. | Purchase of goods | No | 36,514.24 |
Goods Sales/labor service provision
In RMB
Related parties | Description of the related transactions | Amount incurred in the current period | Amount incurred in the previous period |
Hangzhou Amblem Household Co., Ltd. | Sale of goods | 7,335,655.75 | 1,958,456.62 |
Shaoxing Kinde Electric Appliances Co., Ltd. | Sale of goods | 2,243,171.75 | |
Hangzhou Yuhang ROBAM Charity Foundation | Sale of goods | 13,100.00 | 556,814.16 |
(2) Related leasing
The Company acts as the lessor:
In RMB
Lessee | Type of leased asset | Rental income recognized in the current period | Lease income recognized in the prior period |
Hangzhou Robam Industry Group Co., Ltd. | Housing | 14,400.00 | 14,400.00 |
The Company acts as the Lessee:
In RMB
Lessor | Type of leased asset | Rental fee recognized in the current period | Rental fee recognized in the previous period |
Hangzhou Robam Industry Group Co., Ltd. | Housing | 275,012.28 | 275,012.28 |
Benefits of key management personnel
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Total remuneration | 3,165,800.00 | 3,023,100.00 |
6. Receivables and payables of related parties
(1) Receivables
In RMB
Name of item | Related parties | Ending balance | Beginning balance | ||
Book balance | Bad debt provision | Book balance | Bad debt provision | ||
Accounts receivable | Hangzhou Amblem Household Co., Ltd. | 2,502,818.00 | / |
(2) Payables
In RMB
Name of item | Related parties | Book balance at the end of the period | Initial book balance at the beginning of the period |
Accounts payable | Hangzhou Yuhang Yaguang Spray Coating Factory | 2,770,678.98 | 3,182,779.20 |
Accounts payable | Hangzhou Yuhang Robam Fuel Station Co., Ltd. | 2,596,507.52 | 2,257,834.37 |
Accounts payable | Hangzhou Amblem Household Co., Ltd. | 2,230.09 | |
Accounts payable | Hangzhou Guoguang Touring Commodity Co., Ltd. | 22,336.73 | |
Other payables | Hangzhou Yuhang Yaguang Spray Coating Factory | 200,000.00 | 200,000.00 |
Other payables | Hangzhou Guoguang Touring Commodity Co., Ltd. | 2,000.00 | 2,000.00 |
7. Commitments of related parties
Subsidiary of the Company, Shengzhou Kinde, committed to investing RMB35 million inCookingfuture, of which, RMB17.5 million has been paid in, accounting for 70% of the shares. Theremaining RMB17.5 million will be paid in before December 31, 2021 in full.
XIII. Share Payment
1. Overview of share payment
√Applicable Not applicable
In RMB
Total amount of equity instruments granted by the Company in the current period | 111,172,800.00 |
Total amount of equity instruments exercised by the Company in the current period | 0.00 |
Total amount of invalid equity instruments of the Company in the current period | 0.00 |
The Company held the fourth session of the 5th Board of Directors on April 24, 2021 and thefirst extraordinary general meeting of shareholders of 2021 on April 30, 2021, deliberating andadopting the Proposal on 2021 Stock Option Inventive Plan (Draft) of the Company and ItsSummary. On May 10, 2021, the sixth session of the 5th Board of Directors and the sixth session ofthe 5th Board of Supervisors were held, deliberating and adopting the Proposal on Granting StockOption to Incentive Targets. Share exercise price: RMB36.57/share.Stock Option Distribution Among the Incentive Targets:
Title | Number of stock options granted (in 10,000 shares) | Proportion in total stock options granted | Proportion in total capital stock on the day of the current Incentive Plan |
Middle Management and Core (Technical) Backbones (138 persons) | 304 | 100.00% | 0.32% |
Total | 304 | 100.00% | 0.32% |
The incentive plan shall be valid for no more than 48 months from the day of full registrationof the stock option granting to the day of full exercise/cancellation of the stock option granted to theincentive targets. Waiting periods of the stock option under the Incentive Plan shall be 12 months,24 months and 36 months respectively upon full granting registration of the stock option granted.Stock option exercise period and exercising schedule of each period
Exercise period | Exercise date | Proportion of exercise |
The first exercise period | From the first trading day after 12 months as from full registration of the stock option granted to the last trading day within 24 months as from full registration of the stock option granted. | 40% |
The second exercise period | From the first trading day after 24 months as from full registration of the stock option granted to the last trading day within 36 months as from full registration of the stock option granted. | 30% |
The third exercise period | From the first trading day after 36 months as from full registration of the stock option granted to the last trading day within 48 months as from full registration of the stock option granted. | 30% |
Performance Assessment on Stock Option Exercise
(1) Performance assessment requirements at the company level
Assessment on stock option exercise under the incentive plan is to be carried out in three fiscalyears from 2021-2023 (one assessment per year). Performance assessment objectives at thecompany level in each year are as follows:
Exercise period | Performance assessment objectives: |
The first exercise period | Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year 2021 reaches 10% or more and the net profit to the parent company minus non-recurring profit and loss in 2021 shall not be less than that in 2020. |
The second exercise period | Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year 2022 reaches 10% or more and the net profit to the parent company minus non-recurring profit and loss in 2022 shall not be less than that in 2020. |
The third exercise period | Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year 2023 reaches 10% or more and the net profit to the parent company minus non-recurring profit and loss in 2023 shall not be less than that in 2020. |
Remarks: The aforementioned "net profit to the parent company minus non-recurring profit andloss" refers to the net profit to be distributed to shareholders of the listed company minus non-recurring profit and loss.In case the company fails to meet the said assessment objectives, stock option expected to beexcised by all the incentive targets in the corresponding assessment year shall not be exercised butcancelled by the company.
(2) Performance assessment requirements on the incentive targets at personal levelAssessment on individual incentive targets shall be subject to relevant assessment standards setby the company and proportion of personal exercisable option (N) is to be determined as perpersonal assessment ranking of the previous year:
Assessment rankings: | A-Excellent | B-Good | C-Improvement desired |
Proportion of personal exercisable option (N) | 100% | 0% |
In case the company meets the assessment requirements in each year, stock option to beactually exercised by the incentive target personally in the year = stock option expected to beexercised by the person in the year x proportion of personal exercisable option (N)Stock option that fails to be exercised by the incentive targets in the assessment year will becancelled by the company.
2. Repurchase of part of the public shares
In the first extraordinary general meeting of shareholders of 2021 held by the Company onApril 30, 2021, the Proposal on the Plans of Repurchasing Part of the Public Shares wasdeliberated and adopted, approving that the Company may repurchase part of its shares with its ownfunds by means of centralized bidding. The repurchase price shall not be more than RMB 50/shareand RMB 150-200 million is assigned for the repurchase. The repurchase shall be carried out within12 months from the day the share repurchase plan is adopted at the general meeting of theshareholders. The Company published Report on Repurchasing Part of the Public Shares on May11, 2021.On June 25, 2021, the Company published the Announcement on Completion of RepurchasingPart of the Public Shares, presenting that the Company accumulatively repurchased 4,929,134shares by centralized bidding with its exclusive account for repurchase, accounting for 0.5194% oftotal capital stock of the Company. The highest price is RMB 44.40/share and the lowest RMB
35.89/share. The transaction volume totals RMB 199,991,892.40. The current capital stockrepurchase plan has been accomplished. The capital stock repurchased this time is temporarilydeposited in the exclusive security account for repurchase. The said capital stock repurchased is notentitled to profit distribution, converting provident fund to share capital, issuing additional newstock or stock allotment, pledge or voting right in the general meeting of the shareholders and so on.All the stock repurchased this time will be applied to the stock incentive plan of the Companyand/or business partner stock ownership plan and so on. In case the Company fails to realize theaforesaid purposes with the stock within duly given time limit, the unused part will be cancelledunder relevant procedures.
XIV. Commitments and Contingencies
1. Major commitments
As of June 30, 2021, the Company has no major commitments to be disclosed.
2. Contingencies
(1) Major contingencies on the balance sheet date
As of June 30, 2021, the Company has no major contingencies to be disclosed.
(2) It’s also necessary to make it clear hereby that the Company has no major contingencies thatneed to be disclosed.As of June 30, 2021, the Company has no major contingency that need to be disclosed.
XV. Events After the Balance Sheet DateAs of June 30, 2021, the Company has no events after the Balance Sheet date to be disclosed.
XVI. Notes to main items of the financial statements of the parent company
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Type | Ending balance | Beginning balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
Accounts receivable with individual bad debt provisions | 9,139,375.39 | 0.92% | 6,929,6 56.29 | 75.82% | 2,209,7 19.10 | 11,250, 779.60 | 1.13% | 8,407,639.24 | 74.73% | 2,843,140.36 |
Including: | ||||||||||
Accounts receivable with a collective bad debt provision | 989,025,706.68 | 99.08% | 57,610, 739.04 | 5.82% | 931,414 ,967.64 | 984,599 ,159.57 | 98.87% | 53,832,390.64 | 5.47% | 930,766,768.93 |
Including: | ||||||||||
Accounts receivable grouped according to related parties | 24,116,820.28 | 2.42% | 24,116, 820.28 | 26,572, 541.50 | 2.67% | 26,572,541.50 | ||||
Multiple accounts receivable which are grouped by expected credit loss based on their age characteristics and with a collective bad debt provision | 964,908,886.40 | 96.67% | 57,610, 739.04 | 5.97% | 907,298 ,147.36 | 958,026 ,618.07 | 96.20% | 53,832,390.64 | 5.62% | 904,194,227.43 |
Total | 998,165,082.07 | 100.00% | 64,540, 395.33 | 6.47% | 933,624 ,686.74 | 995,849 ,939.17 | 100.00% | 62,240,029.88 | 6.25% | 933,609,909.29 |
In RMBIndividual bad debt provision:
In RMB
Name | Ending balance | |||
Book balance | Bad debt provision | Percentage of provision | Reasons for provision | |
Provision for bad debts by individual | 1,773,645.05 | 1,773,645.05 | 100.00% | Expected to be irrecoverable |
item | ||||
Provision for bad debts by individual item | 7,365,730.34 | 5,156,011.25 | 70.00% | Expected to be exposed to recovery risk |
Total | 9,139,375.39 | 6,929,656.30 | -- | -- |
In RMB
Name | Ending balance | ||
Book balance | Bad debt provision | Percentage of provision | |
With 1 year | 848,886,186.39 | 42,444,309.31 | 5.00% |
1-2 years | 100,975,054.01 | 10,097,505.40 | 10.00% |
2-3 years | 9,953,697.67 | 1,990,739.53 | 20.00% |
3-4 years | 3,778,538.92 | 1,889,269.46 | 50.00% |
4-5 years | 632,470.40 | 505,976.32 | 80.00% |
More than 5 years | 682,939.01 | 682,939.02 | 100.00% |
Total | 964,908,886.40 | 57,610,739.04 | -- |
Disclosed based on the age of accounts receivable
In RMB
Age | Ending balance |
Within 1 year (including 1 year) | 879,989,777.45 |
1-2 years | 103,127,658.62 |
2-3 years | 9,953,697.67 |
More than 3 years | 5,093,948.33 |
3-4 years | 3,778,538.92 |
4-5 years | 632,470.40 |
More than 5 years | 682,939.01 |
Total | 998,165,082.07 |
(2) Bad debt provision, and its recovery or reversal in the current periodProvision for bad debts in the current period:
In RMB
Type | Beginning balance | Amount of change in the current period | Ending balance | |||
Provision | Recovery or reversal | Write-off | Other | |||
Bad debt provision for accounts receivable | 62,240,029.88 | 6,877,232.65 | 4,576,867.20 | 64,540,395.33 | ||
Total | 62,240,029.88 | 6,877,232.65 | 4,576,867.20 | 64,540,395.33 |
(3) Top five debtors with the biggest ending balances of accounts receivable
In RMB
Unit | Ending balance of | Proportion in the total ending balance of | Ending balance of bad |
accounts receivable | accounts receivable | debt provision | |
Unit 1 | 181,717,542.00 | 18.21% | 9,085,877.10 |
Unit 2 | 82,536,456.34 | 8.27% | 4,126,822.82 |
Unit 3 | 60,191,842.27 | 6.03% | 6,019,184.23 |
Unit 4 | 29,324,596.32 | 2.94% | 1,466,229.82 |
Unit 5 | 24,904,134.49 | 2.49% | 1,245,206.72 |
Total | 378,674,571.42 | 37.94% |
2. Other receivables
In RMB
Item | Ending balance | Beginning balance |
Other receivables | 80,511,071.80 | 49,092,820.31 |
Total | 80,511,071.80 | 49,092,820.31 |
1) Classification of other receivables by nature
In RMB
Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
Collections by a third party | 48,933,751.24 | 20,064,674.31 |
Security/guarantee deposits | 36,573,061.64 | 33,786,199.08 |
Related transactions | 4,064,000.00 | 4,064,000.00 |
Withholdings | 4,544,818.54 | 2,256,187.63 |
Cash Reserve | 5,993,517.59 | 1,383,261.26 |
Other | 2,806,012.74 | 3,199,125.99 |
Total | 102,915,161.75 | 64,753,448.27 |
2) Bad debt provision
In RMB
Bad debt provision | Phase I | Phase II | Phase III | Total |
Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
Balance on January 1, 2021 | 15,660,627.96 | 15,660,627.96 | ||
Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Provision in the current period | 6,743,461.99 | 6,743,461.99 | ||
Balance on June 30, 2021 | 22,404,089.95 | 22,404,089.95 |
Disclosed based on the age of accounts receivable
In RMB
Age | Ending balance |
Within 1 year (including 1 year) | 73,763,151.36 |
1-2 years | 4,310,496.19 |
2-3 years | 3,527,461.80 |
More than 3 years | 21,314,052.40 |
3-4 years | 1,379,124.00 |
4-5 years | 15,225,500.00 |
More than 5 years | 4,709,428.40 |
Total | 102,915,161.75 |
3) Bad debt provision, and its recovery or reversal in the current periodProvision for bad debts in the current period:
In RMB
Type | Beginning balance | Amount of change in the current period | Ending balance | |||
Provision | Recovery or reversal | Write-off | Other | |||
Bad debt provision for other receivables | 15,660,627.96 | 6,743,461.99 | 22,404,089.95 | |||
Total | 15,660,627.96 | 6,743,461.99 | 22,404,089.95 |
4) Top five debtors with the biggest ending balances of other receivables
In RMB
Unit | Nature of receivable | Ending balance | Age | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
Unit 1 | Collections by a third party | 48,933,751.24 | With 1 year | 47.55% | 2,446,687.56 |
Unit 2 | Security/guarantee deposits | 14,778,000.00 | 4-5 years | 14.36% | 11,822,400.00 |
Unit 3 | Cash Reserve | 2,957,384.30 | With 1 year | 2.87% | 147,869.22 |
Unit 4 | Security/guarantee deposits | 2,400,000.00 | With 1 year | 2.33% | 120,000.00 |
Unit 5 | Collections by a third party | 2,288,880.00 | With 1 year | 2.22% | 114,444.00 |
Total | -- | 71,358,015.54 | -- | 69.34% | 14,651,400.78 |
3. Long-term equity investment
In RMB
Item | Ending balance | Beginning balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Investments | 256,937,618 | 20,400,000.0 | 236,537,618.8 | 246,905,933.7 | 20,400,000.0 | 226,505,933.7 |
Item | Ending balance | Beginning balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
in subsidiaries | .88 | 0 | 8 | 3 | 0 | 3 |
Investments in joint ventures and associated companies | 2,012,699.52 | 2,012,699.52 | 3,452,769.59 | 3,452,769.59 | ||
Total | 258,950,318.40 | 20,400,000.00 | 238,550,318.40 | 250,358,703.32 | 20,400,000.00 | 229,958,703.32 |
(1) Investment in subsidiaries
In RMB
Investee | Beginning balance (book value) | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||
Additional investment | Negative investment | Provision for impairment | Other | ||||
Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd. | 162,320,000.00 | 162,320,000.00 | |||||
Hangzhou MingQi Electric Co., Ltd. | 51,901,780.81 | 31,685.15 | 51,933,465.96 | ||||
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 630,900.00 | 630,900.00 | 20,400,000.00 | ||||
Shanghai Robam Appliances Sales Co., Ltd. | 5,838,272.10 | 5,838,272.10 | |||||
Beijing Robam Appliances Sales Co., Ltd. | 5,814,980.82 | 5,814,980.82 | |||||
Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
Total | 226,505,933.73 | 10,031,685.15 | 256,937,618.88 | 20,400,000.00 |
(2) Investment in joint ventures and associated companies
In RMB
Investor | Beginning | Increase/decrease in the current period | Ending | Ending |
balance (book value) | Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive income | Other changes in equity | Cash dividends or profits declared and distributed | Provision for impairment | Other | balance (book value) | balance of impairment provision | ||
I. Joint venture | ||||||||||||
De Dietrich Trade (Shanghai) Co., Ltd. | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 | |||||||||
Subtotal | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 | |||||||||
II. Associated enterprises | ||||||||||||
Total | 3,452,769.59 | -1,440,070.07 | 2,012,699.52 |
4. Operating income and operating cost
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | ||
Income | Cost | Income | Cost | |
Main business | 3,860,204,084.81 | 1,747,835,343.86 | 2,922,262,959.98 | 1,329,831,191.10 |
Other businesses | 97,090,873.20 | 25,560,127.41 | 58,651,720.79 | 19,754,013.25 |
Total | 3,957,294,958.01 | 1,773,395,471.27 | 2,980,914,680.77 | 1,349,585,204.35 |
5. Investment income
In RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Investment income during holding of financial assets for trading | 53,886,727.88 | 20,859,653.65 |
Investment incomes obtained during holding of other equity instruments | ||
Income from long-term equity investments accounted for using the equity method | -1,440,070.07 | -2,239,220.46 |
Total | 52,446,657.81 | 18,620,433.19 |
XVIII. Supplementary Information
1. Breakdown of non-recurring profits and losses in the current period
√Applicable Not applicable
In RMB
Item | Amount | Description |
Gains and losses from disposal of non-current assets | -2,037,766.59 | |
Government subsidy included in current gains and losses (except the government subsidy closely related to the Company’s business and enjoyed by quota or ration in accordance with the unified national standard) | 55,099,765.01 | |
Other gain/loss items conforming to the definition of non-recurring gains/losses | -393,630.96 | |
Less: Affected amount of income tax | 8,184,399.67 | |
Affected amount of minority shareholders’ equity | 480,579.21 | |
Total | 44,003,388.58 | -- |
It is necessary to explain the non-recurring gains or losses determined based on definitions inExplanatory Announcement No. 1 on Information Disclosure for Publicly Listed Companies---Non-recurring Profit & Loss (Referred to as "Announcement No. 1") and the reason why non-recurringprofits or losses listed in the Announcement No.1 are determined as recurring profits or losses.Applicable √ Not applicable
2. Return on equity and earnings per share (EPS)
Profit within the Reporting Period | Weighted average return on net assets | EPS | |
Basic earnings per share (EPS) (RMB/share) | Diluted EPS (RMB/share) | ||
Net profit attributable to common stockholders of the Company | 9.49% | 0.83 | 0.83 |
Net profit attributable to common shareholders of the Company after deducting non-recurring profits and losses | 8.96% | 0.79 | 0.58 |
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profits and net assets in the Financial Report disclosed as per the IASand CAS
Applicable √ Not applicable
(2) Differences of net profits and net assets in the Financial Report disclosed as per the foreignaccounting standard and CAS
Applicable √ Not applicable