Financial Report
I. Auditor’s Report
Whether the semi-annual report has been audited?
□Yes √ No
The semi-annual report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Wuxi Little Swan Company Limited
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 3,424,099,307.77 4,272,077,211.11
Settlement reserve
Interbank lendings
Financial assets at fair value through profit/loss 4,917,873.13
Derivative financial assets
Notes receivable 1,878,193,045.31 1,297,609,202.29
Accounts receivable 1,622,290,121.44 1,465,654,497.90
Accounts paid in advance 122,004,474.40 131,513,792.18
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserve
Interest receivable 55,176,400.57 26,755,807.07
Dividends receivable
Other accounts receivable 9,542,347.96 23,693,886.54
Financial assets purchased under agreements to resell
Inventories 1,084,450,981.78 1,724,837,944.69
Assets held for sale
1
Non-current assets due within one year
Other current assets 8,804,584,056.35 8,385,724,282.16
Total current assets 17,005,258,608.71 17,327,866,623.94
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 200,000.00 200,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments
Investment property 62,928,849.25 64,854,903.25
Fixed assets 978,083,778.86 970,859,291.03
Construction in progress 176,579.99
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 189,664,416.73 192,283,486.15
R&D expenses
Goodwill
Long-term deferred expense 5,100,503.15 4,387,728.14
Deferred income tax assets 349,220,299.11 299,879,029.23
Other non-current assets 64,654,141.02 25,655,775.90
Total non-current assets 1,650,028,568.11 1,558,120,213.70
Total assets 18,655,287,176.82 18,885,986,837.64
Current liabilities:
Short-term borrowings 170,000,000.00 183,813,064.12
Borrowings from the Central Bank
Money deposits accepted and inter-bank deposits
Interbank borrowings
Financial liabilities at fair value through profit/loss
Derivative financial liabilities
Notes payable 3,014,675,255.37 2,620,549,815.47
Accounts payable 3,447,470,692.87 3,335,089,672.06
Accounts received in advance 1,673,007,411.95 3,014,347,762.24
2
Financial assets sold for repurchase
Fees and commissions payable
Payroll payable 236,575,040.77 288,592,163.29
Taxes payable 368,178,286.60 412,238,029.96
Interest payable
Dividends payable 9,338,224.06 7,150,684.06
Other accounts payable 224,691,641.72 199,926,402.04
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of securities
Payables for acting underwriting of securities
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities 2,183,815,015.64 1,844,413,154.26
Total current liabilities 11,327,751,568.98 11,906,120,747.50
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable 13,693,727.01 16,101,348.60
Special payables
Provisions 1,675,596.14 1,727,340.89
Deferred income 2,715,733.23 2,942,333.25
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 18,085,056.38 20,771,022.74
Total liabilities 11,345,836,625.36 11,926,891,770.24
Owners’ equity:
Share capital 632,487,764.00 632,487,764.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
3
Capital reserve 1,214,971,453.88 1,191,490,133.01
Less: Treasury shares
Other comprehensive income 43,336,488.70 70,757,524.61
Special reserve
Surplus reserve 332,594,722.29 332,594,722.29
Provisions for general risks
Retained earnings 4,013,692,398.30 3,756,517,718.81
Equity attributable to owners of the Company 6,237,082,827.17 5,983,847,862.72
Minority interests 1,072,367,724.29 975,247,204.68
Total owners’ equity 7,309,450,551.46 6,959,095,067.40
Total liabilities and owners’ equity 18,655,287,176.82 18,885,986,837.64
2. Balance Sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 2,095,263,449.08 2,397,428,457.92
Financial assets at fair value through profit/loss 4,277,601.99
Derivative financial assets
Notes receivable 1,314,372,888.10 1,088,559,252.21
Accounts receivable 2,843,496,812.50 2,310,254,576.98
Accounts paid in advance 72,598,507.64 89,477,823.29
Interest receivable 41,684,674.93 18,798,031.69
Dividends receivable
Other accounts receivable 6,350,918.21 16,176,106.89
Inventories 685,777,572.43 1,068,494,123.28
Assets held for sale
Non-current assets due within one year
Other current assets 5,180,109,851.94 4,965,682,855.69
Total current assets 12,243,932,276.82 11,954,871,227.95
Non-current assets:
Available-for-sale financial assets 150,000.00 150,000.00
Held-to-maturity investments
Long-term accounts receivable
4
Long-term equity investments 1,375,785,041.57 1,375,785,041.57
Investment property 7,368,182.88 7,546,955.16
Fixed assets 502,850,610.11 490,047,802.72
Construction in progress 176,579.99
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 91,246,017.50 92,591,167.64
R&D expenses
Goodwill
Long-term deferred expense 3,059,475.11 1,817,228.83
Deferred income tax assets 222,157,842.72 197,091,251.29
Other non-current assets 28,445,385.12 18,313,858.80
Total non-current assets 2,231,239,135.00 2,183,343,306.01
Total assets 14,475,171,411.82 14,138,214,533.96
Current liabilities:
Short-term borrowings 135,000,000.00 123,943,093.80
Financial liabilities at fair value through profit/loss
Derivative financial liabilities
Notes payable 2,199,096,804.05 1,508,017,904.49
Accounts payable 4,321,712,882.98 3,913,090,507.89
Accounts received in advance 991,692,723.35 1,854,711,663.46
Payroll payable 179,768,059.61 216,530,836.37
Taxes payable 228,249,835.40 249,034,768.38
Interest payable
Dividends payable 9,338,224.06 7,150,684.06
Other accounts payable 132,595,634.97 143,124,857.82
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities 1,335,662,223.09 1,173,641,937.69
Total current liabilities 9,533,116,387.51 9,189,246,253.96
Non-current liabilities:
Long-term borrowings
5
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Special payables
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 9,533,116,387.51 9,189,246,253.96
Owners’ equity:
Share capital 632,487,764.00 632,487,764.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 1,371,806,544.46 1,350,656,531.65
Less: Treasury shares
Other comprehensive income 22,152,205.79 37,515,343.84
Special reserve
Surplus reserve 319,944,578.39 319,944,578.39
Retained earnings 2,595,663,931.67 2,608,364,062.12
Total owners’ equity 4,942,055,024.31 4,948,968,280.00
Total liabilities and owners’ equity 14,475,171,411.82 14,138,214,533.96
3. Consolidated Income Statement
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 10,568,060,854.21 7,984,787,194.92
Including: Sales income 10,568,060,854.21 7,984,787,194.92
Interest income
Premium income
Fee and commission income
6
2. Operating costs 9,801,989,312.87 7,279,128,086.90
Including: Cost of sales 7,861,371,811.78 5,812,591,773.67
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surtaxes 64,532,273.74 44,723,877.46
Selling expenses 1,533,889,871.40 1,191,332,056.12
Administrative expenses 328,163,105.40 265,946,054.68
Finance costs -23,523,197.84 -63,399,464.47
Asset impairment loss 37,555,448.39 27,933,789.44
Add: Profit on fair value changes (“-” means loss) 4,917,873.13
Investment income (“-” means loss) 181,665,882.11 67,315,479.04
Including: Share of profit/loss of associates and joint ventures
Exchange gains (“-” means loss)
Other gains 15,806,553.77
3. Operating profit (“-” means loss) 968,461,850.35 772,974,587.06
Add: Non-operating income 15,623,753.30 21,485,985.76
Including: Profit on disposal of non-current assets 4,578,714.70 116,837.67
Less: Non-operating expense 3,079,657.86 2,234,905.37
Including: Loss on disposal of non-current assets 2,254,629.17 238,583.97
4. Total profit (“-” means loss) 981,005,945.79 792,225,667.45
Less: Corporate income tax 148,245,695.78 127,302,391.75
5. Net profit (“-” means loss) 832,760,250.01 664,923,275.70
Net profit attributable to owners of the Company 731,540,502.47 580,826,562.58
Minority interests’ income 101,219,747.54 84,096,713.12
6. Other comprehensive income net of tax -32,416,277.72 36,264,775.36
Other comprehensive income net of tax attributable to owners of the
-27,421,035.91 32,936,889.93
Company
6.1 Other comprehensive income that will not be reclassified into
profit/loss
6.1.1 Changes in net liabilities or assets with a defined benefit
7
plan upon re-measurement
6.1.2 Share of other comprehensive income of investees that
cannot be reclassified into profit/loss under the equity method
6.2 Other comprehensive income to be subsequently reclassified
-27,421,035.91 32,936,889.93
into profit/loss
6.2.1 Share of other comprehensive income of investees that will
be reclassified into profit/loss under the equity method
6.2.2 Profit/loss on fair value changes of available-for-sale
-27,414,609.36 32,930,096.23
financial assets
6.2.3 Profit/loss on reclassifying held-to-maturity investments
into available-for-sale financial assets
6.2.4 Effective profit/loss on cash flow hedges
6.2.5 Currency translation differences -6,426.55 6,793.70
6.2.6 Other
Other comprehensive income net of tax attributable to minority
-4,995,241.81 3,327,885.43
interests
7. Total comprehensive income 800,343,972.29 701,188,051.06
Attributable to owners of the Company 704,119,466.56 613,763,452.51
Attributable to minority interests 96,224,505.73 87,424,598.55
8. Earnings per share
8.1 Basic earnings per share 1.16 0.92
8.2 Diluted earnings per share 1.16 0.92
4. Income Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 7,759,223,092.31 6,045,821,092.06
Less: Operating costs 5,996,000,032.58 4,524,954,975.35
Taxes and surtaxes 44,435,454.94 33,236,303.28
Selling expenses 1,018,772,573.33 895,080,287.51
Administrative expenses 270,135,520.31 209,223,619.71
Finance costs -28,038,916.25 -45,716,922.45
Asset impairment loss 15,145,318.12 21,496,002.51
Add: profit on fair value changes (“-” means loss) 4,277,601.99
Investment income (“-” means loss) 93,359,516.82 17,306,094.37
Including: Share of profit/loss of associates and joint ventures
Other gains
8
2. Operating profit (“-” means loss) 540,410,228.09 424,852,920.52
Add: Non-operating income 8,461,114.95 2,783,345.24
Including: Profit on disposal of non-current assets 99,572.65 99,572.65
Less: Non-operating expense 1,598,940.52 434,564.65
Including: Loss on disposal of non-current assets 234,891.28 234,891.28
3. Total profit (“-” means loss) 547,272,402.52 427,201,701.11
Less: Corporate income tax 85,606,709.99 70,735,081.19
4. Net profit (“-” means loss) 461,665,692.53 356,466,619.92
5. Other comprehensive income net of tax -15,363,138.05 25,339,813.73
5.1 Other comprehensive income that will not be reclassified into profit
and loss
5.1.1 Changes in net liabilities or assets with a defined benefit plan
upon re-measurement
5.1.2 Share of other comprehensive income of investees that cannot be
reclassified into profit/loss under the equity method
5.2 Other comprehensive income to be subsequently reclassified into
-15,363,138.05 25,339,813.73
profit/loss
5.2.1 Share of other comprehensive income of investees that will be
reclassified into profit/loss under the equity method
5.2.2 Profit/loss on fair value changes of available-for-sale financial
-15,363,138.05 25,339,813.73
assets
5.2.3 Profit/loss on reclassifying held-to-maturity investments into
available-for-sale financial assets
5.2.4 Effective profit/loss on cash flow hedges
5.2.5 Currency translation differences
5.2.6 Other
6. Total comprehensive income 446,302,554.48 381,806,433.65
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item January-June 2017 January-June 2016
1. Cash flows associated with operating activities:
Cash received from sale of commodities and rendering of service 6,722,546,282.77 7,270,388,782.83
Net increase in money deposits from customers and interbank
9
placements
Net increase in loans from the Central Bank
Net increase in funds borrowed from other financial institutions
Cash received from premium of original insurance contracts
Net cash received from reinsurance business
Net increase in deposits of policy holders and investment fund
Net increase in disposal of financial assets at fair value through
profit/loss
Interest, fees and commissions received
Net increase in interbank borrowings
Net increase in funds in repurchase business
Tax refunds received 35,550,472.93 22,502,456.41
Cash generated by other operating activities 46,492,111.69 45,513,803.23
Subtotal of cash generated by operating activities 6,804,588,867.39 7,338,405,042.47
Cash paid for goods and services 4,509,538,095.07 3,658,677,508.75
Net increase in loans and advances to customers
Net increase in funds deposited in the Central Bank and interbank
placements
Cash paid for claims of original insurance contracts
Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 620,865,515.47 524,746,031.23
Taxes paid 472,145,836.29 509,900,003.41
Cash used in other operating activities 1,344,450,112.80 1,037,984,106.20
Subtotal of cash used in operating activities 6,946,999,559.63 5,731,307,649.59
Net cash generated by operating activities -142,410,692.24 1,607,097,392.88
2. Cash flows associated with investing activities:
Cash received from retraction of investments 2,895,000,000.00 3,310,000,000.00
Cash received as investment income 181,837,920.52 67,315,479.04
Net cash received from disposal of fixed assets, intangible assets and
723,271.02 708,034.20
other long-term assets
Net cash received from disposal of subsidiaries or other business units 2,415,000.00
Cash generated by other investing activities 16,802,196.35 34,473,639.38
Subtotal of cash generated by investing activities 3,096,778,387.89 3,412,497,152.62
Cash paid to acquire fixed assets, intangible assets and other long-term
79,751,100.92 10,938,428.51
assets
10
Cash paid for investment 3,465,000,000.00 5,506,000,000.00
Net increase in pledged loans
Net cash paid to acquire subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities 3,544,751,100.92 5,516,938,428.51
Net cash generated by investing activities -447,972,713.03 -2,104,441,275.89
3. Cash flows associated with financing activities:
Cash received from capital contributions
Including: Cash received from minority shareholder investments by
subsidiaries
Cash received as borrowings 170,000,000.00
Cash received from issuance of bonds
Cash generated by other financing activities
Subtotal of cash generated by financing activities 170,000,000.00
Repayment of borrowings 183,813,064.12
Cash paid for interest expenses and distribution of dividends or profit 470,510,888.90 376,001,781.77
Including: dividends or profit paid by subsidiaries to minority interests
Cash used in other financing activities
Sub-total of cash used in financing activities 654,323,953.02 376,001,781.77
Net cash generated by financing activities -484,323,953.02 -376,001,781.77
4. Effect of foreign exchange rate changes on cash and cash equivalents
5. Net increase in cash and cash equivalents -1,074,707,358.29 -873,345,664.78
Add: Opening balance of cash and cash equivalents 4,171,689,917.21 2,792,685,328.69
6. Closing balance of cash and cash equivalents 3,096,982,558.92 1,919,339,663.91
6. Cash Flow Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Cash flows associated with operating activities:
Cash received from sale of commodities and rendering of service 5,000,964,767.84 4,472,927,007.09
Tax refunds received
Cash generated by other operating activities 20,559,743.51 27,847,107.11
Subtotal of cash generated by operating activities 5,021,524,511.35 4,500,774,114.20
Cash paid for goods and services 3,201,385,866.98 2,689,346,047.46
11
Cash paid to and for employees 439,863,524.85 371,117,437.36
Taxes paid 284,758,489.88 389,325,858.67
Cash used in other operating activities 905,013,311.49 741,951,997.54
Subtotal of cash used in operating activities 4,831,021,193.20 4,191,741,341.03
Net cash generated by operating activities 190,503,318.15 309,032,773.17
2. Cash flows associated with investing activities:
Cash received from retraction of investments 1,625,000,000.00 1,915,000,000.00
Cash received as investment income 92,023,835.23 17,306,094.37
Net cash received from disposal of fixed assets, intangible assets and
192,710.01 699,422.23
other long-term assets
Net cash received from disposal of subsidiaries or other business units 2,415,000.00
Cash generated by other investing activities 13,702,196.35 27,275,633.98
Subtotal of cash generated by investing activities 1,733,333,741.59 1,960,281,150.58
Cash paid to acquire fixed assets, intangible assets and other long-term
31,162,375.53 4,139,931.83
assets
Cash paid for investment 1,895,000,000.00 2,826,000,000.00
Net cash paid to acquire subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities 1,926,162,375.53 2,830,139,931.83
Net cash generated by investing activities -192,828,633.94 -869,858,781.25
3. Cash flows associated with financing activities:
Cash received from capital contributions
Cash received as borrowings 135,000,000.00
Cash received from issuance of bonds
Cash generated by other financing activities
Subtotal of cash generated by financing activities 135,000,000.00
Repayment of borrowings 123,943,093.80
Cash paid for interest expenses and distribution of dividends or profit 470,510,888.90 376,001,781.77
Cash used in other financing activities
Sub-total of cash used in financing activities 594,453,982.70 376,001,781.77
Net cash generated by financing activities -459,453,982.70 -376,001,781.77
4. Effect of foreign exchange rate changes on cash and cash equivalents
5. Net increase in cash and cash equivalents -461,779,298.49 -936,827,789.85
Add: Opening balance of cash and cash equivalents 2,353,708,554.75 1,866,443,114.64
6. Closing balance of cash and cash equivalents 1,891,929,256.26 929,615,324.79
12
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2017
Unit: RMB
January-June 2017
Equity attributable to owners of the Company
Other equity Gene
Less: Speci
Item instruments Other ral Total owners’
Treasu al Minority interests
Share capital Prefer Perpetu Capital reserve comprehensive Surplus reserve risk Retained earnings equity
Othe ry reser
ence al income reser
r shares ve
shares bonds ve
1. Balance at the end of the prior year 632,487,764.00 1,191,490,133.01 70,757,524.61 332,594,722.29 3,756,517,718.81 975,247,204.68 6,959,095,067.40
Add: Changes in accounting policies
Correction of errors in prior periods
Business mergers under the same
control
Other
2. Balance at the beginning of the year 632,487,764.00 1,191,490,133.01 70,757,524.61 332,594,722.29 3,756,517,718.81 975,247,204.68 6,959,095,067.40
3. Increase/ decrease in the period (“-”
23,481,320.87 -27,421,035.91 257,174,679.49 97,120,519.61 350,355,484.06
means decrease)
3.1 Total comprehensive income -27,421,035.91 731,540,502.47 101,219,747.54 805,339,214.09
3.2 Capital increased and reduced by 23,481,320.87 -4,099,227.93 19,382,092.95
owners
3.2.1 Ordinary shares increased by
shareholders
13
3.2.2 Capital increased by holders
of other equity instruments
3.2.3 Amounts of share-based 23,481,320.87 -4,099,227.93 19,382,092.95
payments charged to owners’ equity
3.2.4 Other
3.3 Profit distribution -474,365,822.98 -474,365,822.98
3.3.1 Appropriation to surplus
reserve
3.3.2 Appropriation to general risk
provisions
3.3.3 Appropriation to owners (or -474,365,822.98 -474,365,822.98
shareholders)
3.3.4 Other
3.4 Internal carry-forward of owners’
equity
3.4.1 New increase of capital (or
share capital) from capital reserve
3.4.2 New increase of capital (or
share capital) from surplus reserve
3.4.3 Surplus reserve for making up
loss
3.4.4 Other
3.5 Special reserve
3.5.1 Withdrawn for the period
3.5.2 Used in the period
3.6 Other
4. Closing balance 632,487,764.00 1,214,971,453.88 43,336,488.70 332,594,722.29 4,013,692,398.30 1,072,367,724.29 7,309,450,551.46
14
January-June 2016
Unit: RMB
January-June 2016
Equity attributable to owners of the Company
Other equity Gen
Item Less: Spec
instruments Other eral Minority Total owners’
Treasu ial
Share capital Prefer Perpet Capital reserve comprehensiv Surplus reserve risk Retained earnings interests equity
Othe ry reser
ence ual e income reser
r shares ve
shares bonds ve
1. Balance at the end of the prior year 632,487,764.00 1,164,014,947.85 34,813,284.64 332,594,722.29 2,960,955,454.36 862,860,913.96 5,987,727,087.10
Add: Changes in accounting policies
Correction of errors in prior periods
Business mergers under the same
control
Other
2. Balance at the beginning of the year 632,487,764.00 1,164,014,947.85 34,813,284.64 332,594,722.29 2,960,955,454.36 862,860,913.96 5,987,727,087.10
3. Increase/ decrease in the period (“-”
27,475,185.16 35,944,239.97 795,562,264.45 112,386,290.72 971,367,980.30
means decrease)
3.1 Total comprehensive income 35,944,239.97 1,175,054,922.85 172,992,887.66 1,383,992,050.48
3.2 Capital increased and reduced by 27,475,185.16 -60,606,596.94 -33,131,411.78
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders of
other equity instruments
15
3.2.3 Amounts of share-based 34,772,462.28 1,558,125.94 36,330,588.22
payments charged to owners’ equity
3.2.4 Other -7,297,277.12 -62,164,722.88 -69,462,000.00
3.3 Profit distribution -379,492,658.40 -379,492,658.40
3.3.1 Appropriation to surplus
reserve
3.3.2 Appropriation to general risk
provisions
3.3.3 Appropriation to owners (or -379,492,658.40 -379,492,658.40
shareholders)
3.3.4 Other
3.4 Internal carry-forward of owners’
equity
3.4.1 New increase of capital (or
share capital) from capital reserve
3.4.2 New increase of capital (or
share capital) from surplus reserve
3.4.3 Surplus reserve for making up
loss
3.4.4 Other
3.5 Special reserve
3.5.1 Withdrawn for the period
3.5.2 Used in the period
3.6 Other
4. Closing balance 632,487,764.00 1,191,490,133.01 70,757,524.61 332,594,722.29 3,756,517,718.81 975,247,204.68 6,959,095,067.40
16
8. Statement of Changes in Owners’ Equity of the Company
January-June 2017
Unit: RMB
January-June 2017
Other equity instruments Less: Other
Item Special Total owners’
Share capital Preference Perpetua Capital reserve Treasury comprehensive Surplus reserve Retained earnings
Other reserve equity
shares l bonds shares income
1. Balance at the end of the prior year 632,487,764.00 1,350,656,531.65 37,515,343.84 319,944,578.39 2,608,364,062.12 4,948,968,280.00
Add: Changes in accounting policies
Correction of errors in prior periods
Other
2. Balance at the beginning of the year 632,487,764.00 1,350,656,531.65 37,515,343.84 319,944,578.39 2,608,364,062.12 4,948,968,280.00
3. Increase/ decrease in the period (“-”
21,150,012.81 -15,363,138.05 -12,700,130.45 -6,913,255.69
means decrease)
3.1 Total comprehensive income -15,363,138.05 461,665,692.53 446,302,554.48
3.2 Capital increased and reduced by 21,150,012.81 21,150,012.81
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders of
other equity instruments
3.2.3 Amounts of share-based 21,150,012.81 21,150,012.81
payments charged to owners’ equity
17
3.2.4 Other
3.3 Profit distribution -474,365,822.98 -474,365,822.98
3.3.1 Appropriation to surplus
reserve
3.3.2 Appropriation to owners (or -474,365,822.98 -474,365,822.98
shareholders)
3.3.3 Other
3.4 Internal carry-forward of owners’
equity
3.4.1 New increase of capital (or
share capital) from capital reserve
3.4.2 New increase of capital (or
share capital) from surplus reserve
3.4.3 Surplus reserve for making up
loss
3.4.4 Other
3.5 Special reserve
3.5.1 Withdrawn for the period
3.5.2 Used in the period
3.6 Other
4. Closing balance 632,487,764.00 1,371,806,544.46 22,152,205.79 319,944,578.39 2,595,663,931.67 4,942,055,024.31
18
January-June 2016
Unit: RMB
January-June 2016
Other equity instruments Less: Other
Item Special Total owners’
Share capital Preference Perpetua Capital reserve Treasury comprehensive Surplus reserve Retained earnings
Other reserve equity
shares l bonds shares income
1. Balance at the end of the prior year 632,487,764.00 1,319,496,538.02 13,608,826.40 319,944,578.39 2,224,114,783.65 4,509,652,490.46
Add: Changes in accounting policies
Correction of errors in prior periods
Other
2. Balance at the beginning of the year 632,487,764.00 1,319,496,538.02 13,608,826.40 319,944,578.39 2,224,114,783.65 4,509,652,490.46
3. Increase/ decrease in the period (“-”
31,159,993.63 23,906,517.44 384,249,278.47 439,315,789.54
means decrease)
3.1 Total comprehensive income 23,906,517.44 763,741,936.87 787,648,454.31
3.2 Capital increased and reduced by 31,159,993.63 31,159,993.63
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders of
other equity instruments
3.2.3 Amounts of share-based 31,159,993.63 31,159,993.63
payments charged to owners’ equity
3.2.4 Other
3.3 Profit distribution -379,492,658.40 -379,492,658.40
19
3.3.1 Appropriation to surplus
reserve
3.3.2 Appropriation to owners (or -379,492,658.40 -379,492,658.40
shareholders)
3.3.3 Other
3.4 Internal carry-forward of owners’
equity
3.4.1 New increase of capital (or
share capital) from capital reserve
3.4.2 New increase of capital (or
share capital) from surplus reserve
3.4.3 Surplus reserve for making up
loss
3.4.4 Other
3.5 Special reserve
3.5.1 Withdrawn for the period
3.5.2 Used in the period
3.6 Other
4. Closing balance 632,487,764.00 1,350,656,531.65 37,515,343.84 319,944,578.39 2,608,364,062.12 4,948,968,280.00
20
III. Company profile
Wuxi Little Swan Company Ltd. was incorporated as an oriented-collection company limited with the approval of
Su-Ti-Gai-Sheng (1993) No. 253 document from Economic Reform Commission of Jiangsu Province on
November 29, 1993. Then the Company domestically and publicly issued 70,000,000 shares of B-share and
transformed to a state-collectively–owned enterprise with the approval of (1996) No. 52 document from Jiangsu
Province of the People’s Republic of China (the “PRC”), Zheng-Wei-Fa (1996) No. 14 document from China
Securities Regulatory Commission of the State Council and Shen-Zheng-Ban-Han (1996) No. 4 from Shenzhen
Municipal Securities Regulatory Office on July 1996, which amounted to RMB310 million of the share capital of
the Company after the issuance.
In March 1997, the Company domestically and publicly issued 60,000,000 shares of RMB ordinary share
(including 9,000,000 shares of staff-share) with the approval of Zheng-Jian-Fa-Zi (1997) No. 55 from CSRC. And
the total raised fund from this issuance of A-share totaled RMB720.83 million, and the Company was formally
listed in Shenzhen Stock Exchange in March 1997 with the short form of stock as Little Swan A and stock code as
000418.
On July 20, 2006, the proposal on the equity division reform of the Company reviewed and approved by the
relevant shareholders meeting with the consideration of the non-circulating shareholders paid for the circulating
stock shareholders of the Company for acquiring the circulation right for the non-circulating shares held by them:
regarded August 4, 2006 as the shares alternation registration date as well as executed the consideration proposal
by paying 2.5 shares of every 10 shares for the A shares circulating stock shareholders on August 7, 2006 and the
shares with consideration listed and circulated on that date. After the execution of the above consideration of the
bonus, the total amount of the shares of the Company remains the same, while the shares structure
correspondingly changed.
On May 9, 2008, the 2007 Annual General Meeting reviewed and approved the capital accumulation fund turn add
equity schemes: adding five shares to every ten shares basing on the total share capital of 365,103,840 shares at
the end of 2007, transferring the public reserves to 182,551,920 shares with par value of RMB1 per share, thus the
added share capital totaled RMB182,551,920 and after which, the total share capital turned from 365,103,840
shares to 547,655,760 shares of the Company.
According to the resolutions of the 4th Session of the 6th Board of Directors and the 1st Provisional Shareholders
General Meeting in 2010, having approved by China Securities Regulatory Commission of the Reply to the
Approval of the Significant Assets Reorganization and the Purchase of the Assets of GD Midea Holding by Wuxi
Little Swan Co., Ltd. (ZJXK [2010] 1577) on November 9, 2010, the company launched directional add-issuance
of 84,832,000.00 A shares to buy 69.47% of the shares of Hefei Midea Washing Machine Co., Ltd.(original name:
Hefei Rongshida Washing Equipment Manufacturing Co., Ltd) from its shareholder GD Midea Holding Co.,
Ltd.( “Midea Appliance”). This add-issuance increased the share capital by RMB84,832,000.00
After approved by CSRC through the Reply of the Approval of the Merger of GD Midea Holding by Midea
Group Co., Ltd.(“Midea Group”) (ZJXK [2013] 1014 document) that issued on July 29, 2013, Midea Group had
split off as well as consolidated and combined the original controller GD Midea Holding on September 18, 2013.
After the consolidation and combination, Midea Group inherited and undertook the whole rights and obligations
of the whole assets and liabilities etc of GD Midea Holding as the reminder enterprise and had finished the
relevant registration procedures of shares transfer on December 31, 2013, and after which, Midea Group changed
to be the first largest shareholder of the Company.
By June 30, 2017, the total amount of the outstanding common shares of the company were 632,487,764 shares,
among which the restricted exchange-traded A shares are 2,951,745 shares, accounting for 0.47% of the whole
shares; the unrestricted exchange-traded A shares are 438,500,147 shares, accounting for 69.33%; and the
21
unrestricted exchange-traded B shares are 191,035,872 shares, account for 30.20% of the whole shares.
Registered address of the Company is as same as the headquarters office address. That is No. 18 of Changjiang
South Road, National High-tech Industrial Development Zone, Wuxi City, Jiangsu Province.
The Company belongs to household appliances so the main business scope is as follows: manufacture and sales as
well as after-sale service of household appliances, industrial ceramics, environmental dry-cleaning equipment,
cleaning mechanical equipment, subsequent finishing equipment and accessory; cleaning service; machinery
processing; import and export business of “Little Swan” or agent products and technologies (excluding the
products or technology restricted to operate, export or import in China); technical service for household
appliances; contracting foreign engineering in international bidding (operate with effective certificate); used
self-owned funds to investment in financial industry.
The financial statements were approved and authorized for issue by the Board of Directors on the date of August 3,
2017.
For the major subsidiaries that included in the consolidated scope of the Reporting Period, please refer to the
Notes VIII.
IV. Basis for the preparation of financial statements
1. Preparation basis
The financial report compiled according to the ASBE-Basic Criterion issued by Ministry of Finance on February
15, 2006 and the follow-up periods, each specific accounting criterions as well as the relevant regulations
(hereinafter referred to as a whole of “ASBE) and the Compilation Rules for Information Disclosure by
Companies Offering Securities to the Public No. 15 – General Provisions on Financial Reports (2014 Revision)
issued by the China Securities Regulatory Commission (CSRC).
The financial report compiled based on the continuation.
V. Important accounting policies and estimations
1. Statement of compliance with Enterprise accounting standards
The 2017 semi-annual financial statements of the Company comply with the requirements of Accounting
Standards with the merger on June 30, 2017 and the Company’s financial conditions as well as the relevant
information of the semi-annual merger of Y2017 and the operation results and the cash flow of the Company are
truly and completely disclosed in the financial statements.
2. Accounting period
The company’s accounting year is from 1st January to 31st December for each calendar year.
3. Fiscal period
The fiscal periods of an enterprise includes fiscal years and fiscal periods shorter than a complete fiscal year. The
fiscal period of the Company is 12 months.
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4. Recording currency
The recording currency of the Company is RMB.
5. Accounting processing method of business combination under the same control and not under the same
control
(a) The business combinations which are under the same control
Combination consideration paid by the combining party and net assets acquired shall all be measured based on
their book value. Corresponding capital reserve (capital stock premium) shall be adjusted according to the
difference between the book value of such net assets and that of the combination consideration; when such capital
reserve (capital stock premium) cannot write them down, retained earnings shall be adjusted. Meanwhile, relevant
direct expenses resulting from such business combination shall be included in the profit and loss for the period,
and all transaction expenses resulting from issuing equity securities or debt securities for such business
combination shall be included in the initial recognition amount of such equity security or debt security.
(b) Business combination not under the same control
Combination costs occurred to purchaser and obtained net identifiable assets shall be calculated based on the fair
value in the purchasing date. If combination costs are greater than the seller’s balance obtained from the fair value
of net identifiable assets in the purchasing date, such surplus shall be confirmed as Goodwill; if less, such balance
shall be included in current profit and loss. Meanwhile, relevant direct expenses resulting from such business
combination shall be included in the profit and loss for the period, and all transaction expenses resulting from
issuing equity securities or debt securities for such business combination shall be included in the initial
recognition amount of such equity security or debt security.
6. Consolidated financial statement compilation method
The consolidation scope of financial statement shall include the company and all subsidiaries.
From the day when the company obtained the actual control of its subsidiaries, the company could initiate
corresponding consolidation which shall be ended up to the day of losing such actual control. Subsidiaries
obtained through business combination under the same control shall be incorporated into the consideration scope
from the day when they’re put under the control of the final controlling party, and the net profit realized before the
combination day shall be individually reflected in the consolidated income statement.
When consolidated financial statement is being formulated, the company’s accounting policy and accounting
period shall be regarded as final and binding to adjust the subsidiary’s financial statement if the subsidiary’s
accounting policy is not consistent with that of the company. For the subsidiary acquired through business
combination not under the same control, its financial statement shall be adjusted based on the fair value of the net
identifiable assets in the day of purchase.
All of the company’s major incoming and outgoing balances, transactions and unrealized profit shall be set off
during the compilation of the consolidated financial statement. The subsidiary’s shareholder equity, net profit and
loss for the period and the part of comprehensive income not belonging to the company shall be individually
23
indicated and shown in the consolidated financial statement under shareholder’s equity, net profit and total
comprehensive income respectively as minority equity, minority interest income and total comprehensive income
attributed to minority shareholders. All unrealized internal transaction profit and loss resulting from the
company’s sales of assets to the subsidiary shall be applied to set off the net profit attributed to the parent
company’s shareholders; all unrealized internal transaction profit and loss resulting from the subsidiary’s sales of
assets to the parent company shall be set off accordingly by the net profit attributed the parent company’s
shareholders and minority interest income based on corresponding distribution ratio (the company to the
subsidiary). All unrealized internal transaction profit and loss resulting from assets sales among subsidiaries shall
be set off accordingly by the net profit attributed the parent company’s shareholders and minority interest income
based on corresponding distribution ratio (the company to the seller’s subsidiary).
If any discrepancy exists between the recognition by regarding the company and its subsidiaries as the accounting
subject and the recognition by regarding the company or its subsidiary as the accounting subject in terms of the
same transaction, this transaction shall be adjusted from the perspective of combination.
7. Cash and cash equivalent recognition standard
The company’s cash and cash equivalent shall include cash in treasury, deposit that can be applied for any
payment at any time, cashes featuring short time limit, strong flowability and convenience in conversion into
known amount and investment of low risk in value variations.
8. Foreign currency transaction and foreign currency statement translation
(a) Foreign currency transaction
Foreign currency transaction shall be recorded in an account based on RMB (through applying the spot rate in the
day of transaction).
On balance sheet day, foreign currency monetary items shall be converted into RMB based on the spot rate of
exchange. The exchange difference resulting from the specific foreign currency borrowings in order to purchase
and construct the assets in conformity with corresponding capitalization conditions shall be capitalized during the
process of capitalization, and other exchange differences shall be directly included in profit and loss for the period.
Foreign currency non-monetary items measured at historical cost shall be converted based on the spot rate of
exchange on balance sheet day. The amount of cash subject to the change in exchange rate shall be individually
indicated and shown in cash flow statement.
(b) Foreign currency statement translation
Assets and liabilities stated in balance sheet statement (overseas operation) shall be converted based on the spot
rate of exchange on balance sheet day; in terms of shareholder’s equity, except undistributed profit, other items
shall be converted based on the spot rate of exchange. Income and cost items stated in balance sheet statement
(overseas operation) shall be converted based on the spot rate of exchange in the day of purchase. Corresponding
foreign currency statement translation differences mentioned above shall be included in other comprehensive
incomes. Cash flow items (overseas operation) shall be converted based on the spot rate of exchange in the day of
cash flow. Meanwhile, the amount of cash subject to the change in exchange rate shall be individually indicated
and shown in cash flow statement.
24
9. Financial instruments
(a) Financial assets
(i) Classification of financial assets
Upon initial recognition, financial assets shall be classified into financial assets measured based on its fair value
and its variations included in profit and loss for the period, account receivable, available-for-sale financial assets
and held-to-maturity investment. However, the classification of financial assets depends on the company’s
intention on and capacity of holding such financial assets.
Loan and account receivable
Account receivable refers to non-derivative financial assets with fixed or recognized recovery cost and no quoted
price in the active market.
Available-for-sale financial assets
Available-for-sale financial assets include available-for-sale non-derivative financial assets designated upon the
initial recognition and financial assets not classified into others. Within 12 months after balance sheet day, (sold)
available-for-sale financial assets shall be shown in balance sheet statement as other current assets.
(ii) Recognition and measurement
When the company becomes one party for the financial instrument contract, financial assets shall be recognized
based on its fair value in balance sheet statement. Transaction expenses resulting form financial assets measured
based on its fair value and its variations included in profit and loss for the period shall be included in profit and
loss for the period; other transaction expenses related to such financial assets shall be included in the amount after
initial recognition.
Follow-up measurement shall be conducted for available-for-sale financial assets based on their fair value while
equity instrument investment that cannot be reliably measured without any quoted price in the active market shall
be measured based on costs; receivables and held-to-maturity investment shall be measured based on amortized
cost by means of effective interest method.
Except depreciation loss and corresponding exchange profit and loss resulting from foreign currency monetary
financial assets, variations of the fair value of available-for-sale financial assets shall be directly included in
shareholder’s equity. When such financial asset is derecognized, total variation previously included in equity shall
be directly transferred to profit and loss for the period. Cash dividends (related to available-for-sale equity
instrument investment) declared for distribution by the invested unit shall be included in profit and loss for the
period as income from investment.
(iii) Financial assets depreciation
The company shall check the book value of corresponding financial assets on balance sheet day; if any objective
evidence proves the depreciation of certain financial assets, corresponding depreciation reserve shall be calculated
and withdrawn.
Such objective evidence refers to any matter actually happened that will influence the future cash flow prediction
of such financial assets after the initial recognition, and the company is able to reliably measure such matter.
Objective evidences indicating the depreciation of available-for-sale equity instrument investment include any
sharp or permanent drop of corresponding fair value of such equity instrument investment. The company shall
25
respective check various available-for-sale equity instrument investments on balance sheet day. If such the fair
value of such equity instrument investment on balance sheet day is less than its initial investment cost (such
difference exceeding 50%) or such duration exceeds 1 year (including 1 year), it shall be the sign of depreciation;
if such difference reaches 20% (including 20%) to 50%, the company shall completely take relevant factors into
consideration including price fluctuation so as to judge whether such equity instrument investment is depreciated.
The company shall apply weighted mean method to calculate the initial investment cost of such available-for-sale
equity instrument investment.
When financial assets measured based on amortized cost is depreciated, corresponding depreciation reserve shall
be calculated and withdrawn based on the difference resulting from the current value of expected future cash flow
(excluding future credit loss not occurred) less than its book value. If any objective evidence proves the recovery
of such financial assets and it’s related to the matter after the recognition of such loss, depreciation loss originally
recognized shall be restituted and included in profit and loss for the period.
When available-for-sale financial assets measured based on fair value is depreciated, the total loss previously
included in shareholder’s equity resulting from the decrease in fair value shall be restituted and included in
depreciation loss. For available-for-sale debt instrument investment whose depreciation loss is recognized,
depreciation loss previously recognized shall be restituted and included in profit and loss for the period when it is
related to the matter happened after original depreciation loss is recognized and such value increases. For
available-for-sale equity instrument investment whose depreciation loss is recognized, the increase of fair value
shall be directly included in shareholder’s equity.
When available-for-sale financial assets measured based on cost is depreciated, the difference between its book
value and its current value recognized from its future cash flow based on its market return shall be recognized as
depreciation loss and included in profit and loss for the period. Such resulting depreciation loss shall not be
restituted any longer.
(iv) Derecognition of financial assets
Corresponding financial assets shall be derecognized when any of the following conditions is met: (1) the
contractual right to collect the cash flow of such financial assets is terminated; (2) such financial assets is
transferred, and the company has transferred all risks and rewards related to its ownership to the party accepting
such financial assets; or (3) such financial assets is transferred. Although the company does not transfer and retain
all risks and rewards related to its ownership, it gives up its control of such financial assets.
When such financial assets is derecognized, the difference between its book value and the sum of received
consideration and the total variation of fair value in shareholder’s equity shall be included in profit and loss for the
period.
(b) Financial liabilities
Upon initial recognition, financial liabilities shall be classified into financial assets measured based on its fair
value and its variations included in profit and loss for the period and other financial liabilities. However, the
company’ s financial liabilities are mainly other financial liabilities, including short-term borrowing, notes
payable, accounts payable, dividends payable, and other accounts payable, as well as other current liabilities,
which shall be initially measured based on fair value. Meanwhile, follow-up measurement shall also be conducted
by means of effective interest method based on amortized cost.
Borrowings shall be initially measured based on fair value and the amount deducting relevant transaction
expenses. Meanwhile, follow-up measurement shall also be conducted by means of effective interest method
26
based on amortized cost.
Other financial liabilities with the time limit less than 1 year (including 1 year) shall be indicated and shown as
current liabilities; if such time limit exceeds 1 year, but such financial liability will be due within (including) 1
year as of balance sheet day, such financial liability shall be indicated and shown as non-current liabilities due
within one year. Others shall be reported as non-current liabilities.
When corresponding financial liability’s current obligation is fully or partially relieved, the relieved part shall be
derecognized. The difference between the book value of the derecognized part and the consideration shall be
included in profit and loss for the period.
(c) Recognition of fair value of financial instrument
The fair value of financial instrument existing in the active market shall be recognized based on its quoted price in
the active market. The fair value of financial instrument not existing in the active market shall be recognized by
means of corresponding valuation technology. During the valuation process, the company shall apply appropriate
valuation technology with strong support from adequate usable data and other information and select the input
value consistent with relevant assets or liabilities features considered by market participants in conducting
relevant transactions. Meanwhile, corresponding observable input value shall be first choice. When it’s impossible
or not feasible to obtain such observable input value, unobservable input value shall be put into service.
10. Receivables
Receivables include notes receivable, accounts receivable, interest receivable, and other accounts receivable. The
accounts receivable caused from selling commodities or offering labor service by the Company and its subsidies
regard the fair value of the contract or agreed price which should be accepted by buyer or labor service accepter
as the amount of initial recognition.
(1) Accounts receivable with significant single amount for which the bad debt provision is made
individually
The single amount of the accounts receivable accounts for more than or equal to
10% of the total accounts receivable, or the single amount is more than or equal
Definition or amount criteria for an account
to RMB10,000,000; the single amount of the other accounts receivable at the
receivable with a significant single amount
period-end accounts for more than or equal to 10% of the total other accounts
receivable, or the single amount is more than or equal to RMB5,000,000.
Making individual bad-debt provisions for
Executes the withdrawal according to the difference that the current value of the
accounts receivable with a significant single
expected future cash flow lowers than its book value of the accounts receivable.
amount
(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
Name of portfolios Bad debt provision method
Aging group Aging analysis
In the groups, those adopting aging analysis method to withdraw bad debt provision:
27
√ Applicable □ Not applicable
Aging Provision rate for Accounts Receivable Provision rate for Other Receivables
Within 1 year (including 1 year) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
3-4 years 50.00% 50.00%
4-5 years 50.00% 50.00%
Over 5 years 100.00% 100.00%
In the groups, those adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
independently
There is objective evidence indicate that the Company couldn’t withdraw the accounts
Reason for bad debt provision
according to the original articles of the accounts receivable.
Executes the withdrawal according to the difference that the current value of the
Withdrawal method
expected future cash flow lowers than its book value of the accounts receivable.
The Company transfer the accounts receivables to financial institutions by right of no recourse, the difference
between the book value that the transaction amount deduct the written off accounts receivables and related taxes
should be recorded into current profit or loss
11. Inventory
(a) Category
Inventory includes raw materials, products in process, stock merchandises and revolving materials that measured
according to the lower one between the cost and the net realizable value.
(b) Pricing method for distributed inventories
Inventories are measured at weighted average method when procured, while the cost of the stock merchandises
and the products in process includes the raw materials, direct labor and manufacturing expenses assigned
according to the system under the normal capacity.
(c) Recognition basis of net realizable value of inventories and withdrawal method for impairment provision of
inventories
When the net realizable value is lower than the cost, provisions for impairment of inventories shall be drawn. The
net realizable value is confirmed according to the amount after the estimated sales price of the inventory minus the
amount of the estimated cost occur when the work finished and the estimated sales expenses as well as the
relevant taxes among the daily activities.
28
(d) The inventory system of the Company is perpetual inventory system.
(e) The method of amortization of the low priced and easily worn articles and the wrappages
The revolving materials include the low priced and easily worn articles and the wrappages and so on, while they
both are amortized by one time write-off method.
12. Long-term equity investment
Long-term equity investments include the company’s long-term equity investment made to the subsidiary.
The subsidiary refers to the invested unit under the company’s control
The investment to the subsidiary shall be shown in the company’s financial statement based on the amount
recognized through cost method, and consolidated after corresponding adjustment according to equity law when
the consolidated financial statement is being formulated.
(a) Investment cost recognition
Long-term equity investment resulting from business combination: for long-term equity investment resulting from
business combination under the same control, corresponding investment cost shall be determined based on the
share of book value of the owner’s equity of the combined party in the day of combination; for long-term equity
investment resulting from business combination not under the same control, corresponding investment cost shall
be determined based on corresponding combination cost.
Long-term equity investment obtained by other means except business combination: for long-term equity
investment obtained by paying cash, its initial investment cost shall be the actual purchasing payment; for
long-term equity investment obtained by issuing equity securities, the fair value of such equity security shall be its
initial investment cost.
(b) Follow-up measurement and profit and loss recognition method
Long-term equity investment calculated by using cost method shall be measured based on its initial investment
cost; cash dividends or profits declared by the invested unit for distribution shall be recognized as investment
revenue and included in profit and loss for the period.
For long-term equity investment calculated by using equity method, if initial investment cost is more than the
share of fair value of the invested unit’s net identifiable assets, such initial investment cost shall be the long-term
equity investment cost; if such initial investment cost is less than the share of fair value of the invested unit’s net
identifiable assets, such resulting difference shall be included in profit and loss for the period and the long-term
equity investment cost shall be accordingly adjusted and increased.
For long-term equity investment calculated by using equity method, the company shall recognize corresponding
profit and loss for the period according to the share of net profit and loss obtained or held from the invested unit.
In terms of the recognition of the invested unit’s net loss, the long-term equity investment’s book value and other
long-term equities constituting the net investment made to the invested unit in reality shall be written down to
Zero, but when the company is obliged to burden corresponding extra loss and relevant expected liability
recognition conditions stated in contingency standard are met, corresponding investment loss shall still be
recognized and calculated as expected liability. As for other changes in owner’s equity of the invested unit except
net profit and loss, other comprehensive revenue and profit distribution, the book value of long-tern equity
investment shall be adjusted and included in capital reserve. Accordingly, the book value of long-term equity
29
investment shall be reduced based on the part attributed to the company when the profit or cash dividend is
declared and distributed by the invested unit. Meanwhile, the unrealized internal transaction profit and loss
between the company and the invested company shall be applied to determine and set off the part attributed to the
company based on corresponding shareholding ratio, on which basis, corresponding investment profit and loss
shall be recognized. In terms of the internal transaction loss resulted from the company and the invested unit, the
part belonging to assets impairment loss and corresponding unrealized loss shall not be set off.
(c) Basis for confirming joint control and important influence on the invested party
Control means that the company has the right to control the invested party and enjoy variable returns through
participating in relevant activities of the invested party. In addition, the company is also able to make use of its
control right to influence such variable return.
Joint control refers to jointly control an arrangement as agreed by both parties, and activities related to the
arrangement can only be conducted with the consent from all parties involved in such joint control.
Important influence refers to the possession of the right to make decisions about the company’s financial and
business operation policies, but the establishment of these policies cannot be controlled or jointly controlled with
other parties.
(d) Long-term equity investment depreciation
For long-term equity investments attributed to the subsidiary, when their recoverable amount is less than their
book value, such book value shall be written down to corresponding recoverable amount (Notes V (16)).
13. Investment property
Depreciation or amortization methods
An investment property includes the use rights of leased land and buildings for rental purposes, and is initially
recorded at cost. Subsequent expenditures related to an investment property shall be included into the cost under
conditions that relevant economic benefits are likely to flow in the company and the cost can be measured reliably.
Otherwise, they should be recorded into current profits and losses when incurred.
The company conducts subsequent measurement of all investment properties in the model of cost, and depreciates
or amortizes the buildings and land use rights according to their estimated useful life and net residual value. The
estimated useful life, net residual value and annual depreciation (amortization) rate are as follows:
Items Estimate Useful Life Net Residual Rate Annual Depreciation Rate
Buildings 20-35 years 5.00% 2.71%-4.75%
Land Use Rights 50 years 2.00%
Investment properties should be transferred to fixed assets or intangible assets since the date of their being
changed for self-use. As the purposes of self-use properties are changed for generating rents or capital
appreciation, the fixed assets or intangible assets shall be transferred to investment properties from the date of
change. In time of change, the book value before transfer should be used as the recorded value after transfer.
Reviews and appropriate adjustments shall be made annually to the estimated useful life, estimated net residual
rate and depreciation (amortization) methods of the investment properties.
When an investment property is disposed or permanently out of use with the estimation that no further economic
benefits could be obtained from its proposal, it should be derecognized. The disposal revenue of an investment
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property for sale, transfer, retirement or damage should be recorded into current profits and losses after deducting
book value and relevant taxes.
As the recoverable amount of an investment property is lower than its book value, its book value should be written
down as the recoverable amount (Note V (16)).
14. Fixed assets
(a) Recognition method
The fixed assets include the buildings, machineries and equipments, transportation tools, as well as office and
electronic equipment and so on, which are confirmed when the related economic benefits probably flow into the
Company with the cost could be reliable measured. The purchased and the newly built fixed assets should be
executed the initially measurement according to the cost when acquired. And the follow-up expenses related to the
fixed assets should be included in the fixed assets cost when the economic benefits related to the former that
probably flow into the Company with the cost could be reliable measured; as for the part be replaced, should
derecognize its book value; all of the other follow-up expenses should be included in the current gains and losses
when occur.
(b) Depreciation method
Fixed assets are depreciated using the straight-line method based on their costs less estimated residual values over
their estimated useful lives. For a fixed asset whose provision for depreciation has been made, the depreciable
amount is confirmed by book value after deducting impairment provision and its service life in future period.
The estimated useful life, residual value, and annual depreciation rate of fixed assets are as follows:
Categories Depreciation method Estimated useful life Residual value Annual depreciation rate
Houses & buildings Average method of useful life 20-35 years 5.00% 2.71%-4.75%
Machineries Average method of useful life 10-15 years 5.00% 6.33%-9.50%
Vehicles Average method of useful life 5 years 5.00% 19%
Office and electronic
Average method of useful life 3-5 years 5.00% 19%-31.67%
equipments
(c) When the recoverable amount of the fixed assets lower than the book value, should reduce the amount
of the book value and include in the recoverable amount (Note V (16)).
(d) Disposal of the fixed assets
When the fixed assets be disposed, or expected not to produce any economic benefits through usage or disposal,
should derecognize the fixed assets. The amount of the disposal revenues of the sales, transfer, scrap or damage
that deducted the book value as well as the relevant taxes should be included in the current gains and losses.
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15. Intangible assets
(1) Evaluation methods, useful life, impairment test
Intangible assets comprise land use rights, and non-patented technology and software etc, which are measured at
cost.
(a) Land use rights
The land use right allocated by the nation is zero-cost, and there is no specific use term in the land use right
certificate, which should not be amortized. The other land use rights should be averagely amortized based in use
term of 50 years. Charges of lands and buildings purchasing which could not be reasonably allocated between
land use rights and buildings should be used as fixed assets.
(b) Non-patented technology
Non-patented technology should be averagely amortized based on whichever is shorter among contract period,
profits period and legally regulated period.
(c) Software
Software should be recorded based on the actual payment, and averagely amortized according to an estimated
useful life of 3 to 5 years.
(d) Regular review of useful life and amortization method
The estimated useful life and amortization methods of intangible assets with limited service life should be
reviewed and appropriately adjusted at the end of each year.
e) Research and development
Internal research and development project expenditure could be divided into research expenditures and
development expenditures based on their nature and whether the intangible assets created by the R&D activities
have high level of uncertainty.
Expenditures of planned surveys, assessment and selections for the purpose of researching production process are
research expenditures and are recorded in current profits and losses in occurrence; expenditures of relevant
designs and tests in production process before mass production are development expenditures, and can be
capitalized if they meet all of the following conditions:
The development of production process has been fully verified by technology team;
The management has approved the budget of production process development;
Studies and analyses of pre-market researches show that the products produced based on production
process have marketing abilities.
There are sufficient technology and funds support to conduct development of production process and
follow-up large scale production;
Expenditures of production process development could be reliably merged.
Development expenditures failing to meet the above conditions would be recorded into current profits and losses.
Previously recorded development expenditures would not be reaffirmed as assets in subsequent periods.
Capitalized expenditures in development phase should be listed as development expenditures on balance sheet,
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and would be transferred to intangible assets since the date of the project achieving its intended use.
(f) Impairment of intangible assets
As the recoverable amount of the intangible assets is lower than the book value, its book value should be written
down as the recoverable amount (Note V (16)).
16. Impairment of long-term assets
Fixed assets, intangible assets with limited life, investment properties measured at cost, and long-term
unamortized expenses, other non-current assets, and long-term equity investment in subsidiaries should go
through impairment test as there are signs of impairment on balance sheet; intangible assets not reaching useful
status should go through impairment tests at least annually whether there is sign of impairment or not. As the
impairment test results show that the recoverable amount of assets is lower than the book value, provision for
impairment based on the difference would be prepared and included in impairment losses. The fair value of assets
deducted by the higher one between the net value after disposal and the present value of the expected future cash
flow is the recoverable amount. Assets impairment preparation should be calculated and confirmed based on
single assets, and the assets group where the assets belong should confirm its recoverable amount in case that the
recoverable amount of single assets is hard to estimate. Assets group is the minimum assets unit to produce cash
flow independently.
Intangible assets with uncertain useful life and development expenditures of capitalization should go through
impairment tests at least annually whether there is sign of impairment or not. The above assets impairment losses
cannot be recovered in subsequent period once confirmed.
17. Long-term unamortized expenses
Long-term unamortized expenses include operating rented fixed assets and other expenses which already happen
and should be amortized over a year and undertaken by current and subsequent phases, and they would be
averagely amortized according to benefit period and listed in the net amount of actual expenses deducted by
accumulated amortization.
18. Employee salary
(a) Accounting treatment of short-term remuneration
Short-term remuneration includes salary, bonus, allowance and subsidy, welfare, medical insurance, industrial
injury insurance, maternity insurance, housing funds, labor union and education funding. In the accounting period
of employees providing service, the company recognizes the actual short-term remuneration as reliabilities and
records it in current profits and losses and relevant asset cost.
(b) Accounting treatment of post-employment benefits
The post-employment benefits of the company and its subsidiaries are divided into defined contribution plan and
defined benefit plan. Defined contribution plan refers to the post-employment welfare plan that the company and
its subsidiaries does not undertake further liabilities after depositing fixed expenses in an independent fund;
Defined benefit plan refers to the post-employment welfare plan excluding defined construction plan. Within the
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period of this report, the post-employment welfare plan of the company and its subsidiaries refer to the basic
old-age pension insurance and unemployment insurance deposit for employees, both of which belong to the
defined contribution plan.
Basic old-age pension insurance
Employees of the company and its subsidiaries have joined the social basic old-age pension insurance organized
and implemented by local labor and social security departments. The company and its subsidiaries pay old-age
pension insurance premiums monthly to local social basic old-age pension insurance agencies according to local
social basic old-age pension insurance contribution base and proportion. After employees retire, local labor and
social security departments are responsible for payment of basic old-age pension to employees. In the accounting
period of employees providing service, the company and its subsidiaries recognize the payable amount regulated
by social security departments as reliabilities and records it in current profits and losses and relevant asset cost.
(c) Accounting treatment of termination benefits
As the company and its subsidiaries terminate labor contract with employees before the expiration date, or
encourages employees to accept layoff voluntarily by providing certain compensation, liabilities caused by the
compensation to employees for terminating labor contract with them would be confirmed on whichever is earlier
between that the company and its subsidiaries could not withdraw the labor relationship or layoff suggestions
unilaterally and costs related to paying termination benefits are confirmed, and should be recorded in current
profits and losses.
Early retirement welfare
Subsidiaries of the company provide early retirement welfare for employees accepting early retirement
arrangement. Early retirement welfare refer to salary and social insurance premiums paid to employees who
haven’t reached the retirement age regulated by the country and have stepped down their posts voluntarily after
being approved by the management of the company and the subsidiary they belong to. The subsidiaries should pay
early retirement welfare to these early retired employees from the first date of early retirement till their normal
retirement age. As for early retirement welfare, subsidiaries should conduct accounting treatment. As the
conditions of early retirement welfare are confirmed, the to-be-paid salary and social insurance premiums for
employees from the date when employees stop providing service till the date when they reach legal retirement
date should be confirmed as reliabilities and recorded into current profits and losses at one time. Difference
caused by changes in actuarial assumptions and adjustments of welfare standards for early retirement welfare
should be recorded into current profits and losses.
The estimated termination benefits within a year since the date of balance sheet date should be listed as flowing
liabilities.
19. Dividends distribution
Cash dividend is confirmed as liability when it is approved by General Meeting of Shareholders.
20. Estimated liabilities
Current obligations in the form of product quality guarantee and onerous contract should be confirmed as
anticipation liabilities as fulfilling these obligations may lead to flowing out of economic benefits and the amounts
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could be measured reliably.
The anticipated liabilities should be initially measured according to the best estimate of fulfilling related current
obligations, and comprehensive considerations should be taken in relevant risks, uncertainty and time value of
money etc. If the time value of money has significant impacts, relevant future cash flow could be discounted to
confirm the best estimate; the increased amount to the book value of anticipated liabilities caused by discount
reduction along with time would be confirmed as interest expenses. On balance sheet date, the book value of
anticipated liabilities should be reviewed and appropriately adjusted to reflect the best current estimates.
The estimated liabilities that need to pay within one year from the balance sheet date are listed as current
liabilities.
21. Share-based payment
(a) Categories of share-based payment
The term "share-based payment" refers to a transaction in which an enterprise grants equity instruments or
undertakes equity-instrument-based liabilities in return for services from employees. The equity instruments
include the equity instruments of the enterprise's own, the parent company or other accounting entity in the same
group. The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
Equity-settled share-based payments
The equity-settled share-based payment in return for employee services of the Company and its subsidiaries’ stock
option plan shall be measured at the fair value of the equity instruments granted to the employees. As for a
equity-settled share-based payment in return for employee services, the right cannot be exercised until the vesting
period comes to an end or until the prescribed performance conditions are met. Within the vesting period, the
services obtained in the current period shall, based on the best estimate of the number of vested equity instruments,
be included in the relevant costs or expenses at the fair value of the equities instruments on the date of the grant,
and the capital reserves shall be increased accordingly. If the subsequent information indicates that the number of
vested equity instruments is different from the previous estimate, an adjustment shall be made and on the vesting
date, the estimate shall be adjusted to equal the number of the actually vested equity instruments. On the vesting
date, an enterprise shall, based on the number of the equity instruments of which the right is actually exercised,
calculate and confirm the amount of the capital stock to be transferred in, and transfer it in the stock capital.
(b) Recognition method of fair value of equity instruments
The Company and its subsidiaries confirm the fair value of stock option by adopting options pricing model, and
confirm the fair value of stock appreciation right by adopting options pricing model of Black Scholes.
(c) Recognition basis of the best estimate of the vested equity instruments
On every balance sheet date in the waiting period, the company shall reason out the best course to estimate
according to the newly information of the vested employee variation and revise the amounts of expected vested
equity instruments. On the vesting date, final estimated number of vested equity instruments is same as the actual
number of vested equity instruments.
(d) Relevant accounting treatment of executing, revising and terminating the share-based payment plans
On the vesting date of stock option, the Company and its subsidiaries confirmed the share capital and stock
35
premium, and carry forward the recognized capital reserves within the vesting period according to the vesting
conditions.
22. Revenue
Revenue amount should be confirmed by the fair value of received and receivable contracts or agreements as the
company sells goods and provides services in daily operation activities. Revenue is shown as the net amount after
deducting sales discount and returns.
As economic benefits related to transactions could flow into the company, and relevant revenue could be
measured reliably and also meet the standards for various operation activities as listed below, relevant revenue is
confirmed:
(a) Sales of goods
The company manufactures and sells washing machines. As the products are delivered, main risks and
remuneration of the ownership of the goods would be transferred to the purchaser, and the company would not
conduct continuing management and control over the products. The sales revenue is realized as related income or
price credential has been obtained, and relevant cost could be calculated reliably. The company and its
subsidiaries’ main sales are realized from dealers, large-scale chain home appliance retailers and e-commerce
platforms as well as export. Sales revenue obtained from dealers, large-scale chain home appliance retailers and
non-proprietary e-commerce platforms should be confirmed as products have been delivered to them and accepted
by them. After accepting the products by dealers, large-scale chain home appliance retailers and non-proprietary
e-commerce platforms, they need to undertake the risk of possible damage and price fluctuation of the products,
and also have the right to sell the products by themselves. Sales revenue obtained from proprietary e-commerce
platform should be confirmed as the products have been delivered to and accepted by end users. Sales revenue
obtained from export should be confirmed as the products have been declared to customs, crossed the ship’ s side
at designated loading port and got the bill of landing according to the contract agreement.
The company sells materials. As the products are delivered, main risks and remuneration of the ownership of the
goods would be transferred to the purchaser, and the company would not conduct continuing management and
control over the products. The sales revenue is realized as related income or price credential has been obtained,
and relevant cost could be calculated reliably.
(b) Transfer of assets use rights
Interest income would be confirmed by actual interest rate in accordance with the time of other parties using
monetary fund of the company.
Operating lease income would be confirmed within the lease period on straight-line basis.
23. Government subsidy
A government subsidy means the monetary or non-monetary assets obtained free by the Company and its
subsidiaries from the government, including tax refund and fiscal subsidies, and etc.
No government subsidy may be recognized unless the attached conditions are met and the subsidy can be obtained
by the Company and its subsidiaries. If a government subsidy is a monetary asset, it shall be measured in the light
of the received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its
36
fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount.
(a) Judgment basis and account treatment methods of assets related government subsidy
Assets related government subsidy refers to government support acquired by the company to be used in
purchasing and building or forming long-term assets in other ways. Benefits related government subsidy refer to
the government support except for assets relate government subsidy.
Assets related government subsidy would be confirmed as deferred benefits, averagely allocated within the useful
life of relevant assets, and recorded in current profits and losses. Government subsidy measured at nominal
amount would be recorded to current profits and losses directly.
(b) Judgment basis and account treatment methods of benefits related government subsidy
Benefits related government subsidy, used to compensate expenses and losses of subsequent periods, would be
confirmed as deferred benefits, and recorded into current profits and losses during the period of establishing
relevant costs; those used to compensate relevant expenses and losses that already happened would be recorded
directly to current profits and losses.
24. Deferred income tax assets/ deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities should be confirmed based on the difference
(temporary difference) between tax basis of assets and liabilities and their book values. Corresponding deferred
income tax income assets should be confirmed in accordance with the tax provisions for deductible losses which
could deduct the taxable income in subsequent years. The temporary difference caused by initial confirmation of
goodwill could not confirm the deferred income tax liabilities. Temporary differences formed by initial
confirmation of assets and liabilities generated from non-corporate merging transactions having no influences on
accounting profits or taxable income (deductible losses) could not confirm corresponding deferred income tax
assets and deferred income tax liabilities. In the balance sheet date, deferred income tax assets and deferred
income tax liabilities should be measured based on the appropriate tax rate in the period of expected recovery of
the assets or settlement of the liabilities.
Deferred income tax assets should be confirmed by the possible taxable income used to deduct temporary
difference, deductible losses and tax deduction.
The taxable temporary difference related to investment of subsidiaries could confirm the deferred income tax
liabilities, unless the company could control the time of reverse of temporary difference or the temporary
difference would not reverse in the foreseeable future. The deductible temporary difference related to investment
of subsidiaries could confirm the deferred income tax assets, as the temporary difference could possibly reverse in
foreseeable future and obtain taxable income which could be used to deduct deductible temporary difference.
Deferred income tax assets and deferred income tax liabilities meeting all of the following conditions could be
listed as the net amount after deduction:
Deferred income tax assets and deferred income tax liabilities are related to the income tax collected by
the same tax bureau from the same taxpayer of the company.
The taxpayer of the company owns the legal rights of settle the current income tax assets and income tax
liabilities in net amount.
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25. Lease
Financing lease is the lease that virtually transfers all risks and remuneration related to assets ownership other
leases are operating leases.
The rent income of operating lease during the lease period should be confirmed on a straight-line basis.
The rent payment of operating lease during the lease period should be recorded in related asset cost or current
profits and losses on a straight-line basis.
26. Segment information
The Company and its subsidiaries confirm the operating segment according to internal organizational structure,
management requirement, and internal reporting system, which is the base to confirm reportable segment and
disclose the segment information.
Operating segment refers to the component that the Company and its subsidiaries both can meet following
conditions simultaneously:
(a) The component can give rise to income and expenditure on daily activities.
(b) Management can assess the operating results of this component regularly to decide to allocate resources to it
and value its performance.
(c) Related accounting information, such as financial status, operating results, and cash flow of this component
can be obtained. Two or more operating segments that have similar economic characteristics and can meet
certain conditions can be combined into one operating segment.
27. Other critical accounting policies and accounting estimates
Based on historical experience and other factors, including reasonable expectations of future events, the company
and its subsidiaries conduct continuous evaluation of critical accounting estimates and key judgments adopted.
The following critical accounting estimates and key assumptions will lead to important risks of significant
adjustment in the book value of assets and liabilities of next fiscal year:
(a) Provision of sales rebates
The company and its subsidiaries apply sales rebates policy to their clients of sales. The company and its
subsidiaries conduct regular estimates and withdraw sales rebates in advance in accordance with regulations of
sales agreement, review of specific transactions, market conditions and level of channel inventories historical
experience, and by reference of the completion status of agreed assessment indicators of sales clients. In case of
significant changes of previous estimates, the above difference would have impacts on sales rebates during the
period of estimates changes.
(b) Income taxes
The company and its subsidiaries pay corporate income taxes in multiple jurisdictions. In normal operations,
uncertainty exists in the final tax treatment of some transactions and events. Significant judgments are required
from the company and its subsidiaries in the provision of income taxes in each jurisdiction. If the final identified
outcome of these tax matters differs from the initially recorded amount, the difference would have impacts on the
38
income taxes and deferred income taxed during the period of making the above mentioned identification.
VI. Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
Taxable added value (tax amount payable should be measured according to the
VAT balance after the taxable sales multiply the applicable tax rate then deduct the 17% or 11% or 6%
input tax which allowed to be deduct at the Reporting Period)
Consumption tax Taxable turnover 5%
Urban maintenance and
Paid VAT 7% or 5%
construction tax
Enterprise income tax Payable income tax amount 15% or 25% or 17%
2. Tax preference
Based on the relevant regulations of the No. 28 articles of the Enterprise Income Law of the People’s Republic of
China, the payment of the corporate income tax of the Company, Hefei Midea Washing Machine, Wuxi Little
Swan GE Co., Ltd. and Wuxi Filin Electronics Co. Ltd. should be measured according to the 15% of the tax rate.
In July 2015, the Company got the High Technology Enterprises Certificate (certificate No.: GR201532000606)
issued by Jiangsu Science and Technology Development, Department of Finance of Jiangsu Province, Jiangsu
Provincial Office, SAT and Jiangsu Local Taxation Bureau after the re-examination with the period of validity
lasts for 3 years.
In July 2014, the subsidiary Hefei Media Washing Machine Co., Ltd. got the High Technology Enterprises
Certificate (certificate No.: GR201434000147) issued by Anhui Science and Technology Development,
Department of Finance of Anhui Province, Anhui Provincial Office, SAT and Anhui Local Taxation Bureau after
the re-examination with the period of validity lasts for 3 years. The Company applied for High Technology
Enterprises this year again, which is under the process of examination and approval. All indicators of the
Company meet the application criteria. Income tax expense was still calculated by income tax rate 15% this
period.
In July 2015, the subsidiary Wuxi Little Swan GE Co., Ltd. got the High Technology Enterprises Certificate
(certificate No.: GR201532000557) issued by Jiangsu Science and Technology Development, Department of
Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after the
re-examination with the period of validity lasts for 3 years.
In July 2015, the subsidiary Wuxi Filin Electronics Co., Ltd. got the High Technology Enterprises Certificate
(certificate No.: GR201532000917) issued by Jiangsu Science and Technology Development, Department of
Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after the
re-examination with the period of validity lasts for 3 years.
The applicable Singapore corporate income tax rate of the subsidiary Little Swan International (Singapore) Co.,
Ltd is 17%.
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VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Bank deposits 3,096,982,558.92 4,171,689,917.21
Other monetary funds 327,116,748.85 100,387,293.90
Total 3,424,099,307.77 4,272,077,211.11
Of which: total amount of the accounts deposited abroad 560,838.28 594,128.38
On June 30, 2017, the bank acceptance deposit of the other monetary funds was of RMB 318,706,368.59, and the
credit guarantee of RMB 4,266,667.92, and the forward settlement deposit was RMB 4,143,712.34.（On
December 31, 2016, the bank acceptance deposit of the other monetary funds was of RMB 93,781,938.00,and the
credit guarantee of RMB 6,605,355.90.）
2. Financial assets measured by fair value with its changes recorded into current profit or loss.
Unit: RMB
Item Closing balance Opening balance
Transactional financial assets 4,917,873.13
Derivative financial assets 4,917,873.13
Total 4,917,873.13
3. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 1,878,193,045.31 1,297,609,202.29
Total 1,878,193,045.31 1,297,609,202.29
(2) Notes receivable which had endorsed by the Company or had discounted and had not due on the
balance sheet date at the period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 2,033,415,360.22
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Total 2,033,415,360.22
4. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB’0,000
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Withdraw
Proporti wal Book value Proporti Book value
Amount Amount Amount Amount al
on proporti on
proportion
on
Accounts
receivable
withdrawn bad
debt provision 170,767.38 100.00% 8,538.37 5.00% 162,229.01 154,279.86 100.00% 7,714.41 5.00% 146,565.45
according to
credit risks
characteristics
Total 170,767.38 100.00% 8,538.37 5.00% 162,229.01 154,279.86 100.00% 7,714.41 5.00% 146,565.45
Accounts receivable with significant single amount for which bad debt provision separately accrued at the
period-end
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 1,707,673,812.08 85,383,690.63 5.00%
Total 1,707,673,812.08 85,383,690.63 5.00%
Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB 8,239,553.90；the
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amount of the reversed or collected part during the reporting period was of RMB 0.00.
(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Unit: RMB
Balance of the bad debt Proportion of the total balance of the
Item Balance
provision accounts receivable
Total amount of balance of the top
1,179,743,087.11 58,987,154.37 69.08%
5 accounts receivable
5. Prepayment
(1) List by aging analysis:
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 116,892,117.19 95.81% 131,513,792.18 100.00%
1 to 2 years 5,112,357.21 4.19%
Total 122,004,474.40 -- 131,513,792.18 --
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
Unit: RMB
Item Balance Proportion of the total amount of the prepayments
Total amount of the top 5 of the balance of the
45,710,909.66 37.47%
prepayments
6. Interests receivable
Unit: RMB
Item Closing balance Opening balance
Bank deposits 55,176,400.57 26,755,807.07
Total 55,176,400.57 26,755,807.07
7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit: RMB’0,000
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Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book
Withdrawa Withdraw
Proporti Book value
Amount Amount l value Amount Proportion Amount al
on
proportion proportion
Other accounts
receivable
withdrawn bad
debt provision 1,047.70 100.00% 93.46 8.92% 954.23 2,530.73 100.00% 161.34 6.38% 2,369.39
according to
credit risks
characteristics
Total 1,047.70 100.00% 93.46 8.92% 954.23 2,530.73 100.00% 161.34 6.38% 2,369.39
Other closing accounts receivable that is individually significant and provisions for bad debts individually.
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 8,373,021.65 418,651.08 5.00%
1 to 2 years 1,069,900.00 106,990.00 10.00%
2 to 3 years 540,200.00 162,060.00 30.00%
Over 3 years 493,854.80 246,927.40 50.00%
Total 10,476,976.45 934,628.48
Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB -678,816.30；the
amount of the reversed or collected part during the reporting period was of RMB 0.00.
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(3) Other accounts receivable classified by the nature of accounts
Unit: RMB
Nature Closing book balance Opening book balance
Margin &cash pledge 2,103,758.00 2,018,096.36
Advance money for another or provision 4,269,715.11 14,330,097.53
Employee loan 4,055,248.53 2,098,324.20
Other 48,254.80 6,860,813.23
Total 10,476,976.44 25,307,331.32
(4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party
Unit: RMB
Proportion of the total
year-end balance of Closing balance
Name of units Nature Closing balance Aging
the accounts of bad debt
receivable provision
Shenzhen Midea Payment
Provision 4,265,894.46 Within 1 year 40.72% 213,294.72
Technology Co., Ltd.
Wuxi China Resources Gas Co., Guarantee deposit &
820,800.00 Within 1 year 7.83% 41,044.00
Ltd. margin
Guarantee deposit & Within 1
Hefei Gas Group Co., Ltd. 270,000.00 2.58% 13,500.00
margin year
Wuxi Golden Sunshine Property Guarantee deposit & Within 1
50,400.00 0.48% 2,520.00
Management Co., Ltd. margin year
Alipay (China) Network Guarantee deposit & Within 1
185,000.00 1.77% 9,250.00
Technology Co., Ltd. margin year
Total -- 5,592,094.46 -- 279,608.72
8. Inventory
(1) Category of inventory
Unit: RMB
Closing balance Opening balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw materials 28,144,752.00 1,593,768.57 26,550,983.43 21,928,651.09 1,593,768.57 20,334,882.52
44
Goods in process 13,117,338.79 13,117,338.79 11,864,254.41 11,864,254.41
Inventory goods 1,096,300,872.13 51,518,212.57 1,044,782,659.56 1,768,281,418.69 75,642,610.93 1,692,638,807.76
Total 1,137,562,962.92 53,111,981.14 1,084,450,981.78 1,802,074,324.19 77,236,379.50 1,724,837,944.69
(2) Falling price reserves of inventory
Unit: RMB
Increased amount Decreased amount
Item Opening balance Reverse or Closing balance
Withdrawal Other Other
write-off
Raw materials 1,593,768.57 1,593,768.57
Inventory goods 75,642,610.93 26,185,813.40 50,310,211.76 51,518,212.57
Total 77,236,379.50 26,185,813.40 50,310,211.76 53,111,981.14
9. Other current assets
Unit: RMB
Item Closing balance Opening balance
Structured deposits 2,700,000,000.00 2,150,000,000.00
Financial products 5,976,013,434.56 5,994,142,671.24
Input tax to be deducted and certified 86,521,810.57 197,355,573.10
Other 42,048,811.22 44,226,037.82
Total 8,804,584,056.35 8,385,724,282.16
10. Available-for-sale financial assets
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity
200,000.00 200,000.00 200,000.00 200,000.00
instruments:
Measured at cost 200,000.00 200,000.00 200,000.00 200,000.00
Total 200,000.00 200,000.00 200,000.00 200,000.00
45
11. Investment property
(1) Investment property adopted the cost measurement mode
Unit: RMB
Houses and Construction in
Item Land use right Total
buildings progress
I. Original book value
1. Opening balance 88,189,256.96 22,949,959.07 111,139,216.03
2. Increased amount of the period
(1) Outsourcing
(2) Transfer of inventory\fixed
assets\project under construction
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Closing balance 88,189,256.96 22,949,959.07 111,139,216.03
II. Accumulative depreciation and
accumulative amortization
1. Opening balance 27,737,836.01 5,970,411.48 33,708,247.49
2. Increased amount of the period 1,650,141.54 275,912.46 1,926,054.00
(1) Withdrawal or amortization 1,650,141.54 275,912.46 1,926,054.00
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Closing balance 29,387,977.55 6,246,323.94 35,634,301.49
III. Depreciation reserves
1. Opening balance 12,576,065.29 12,576,065.29
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Closing balance 12,576,065.29 12,576,065.29
IV. Book value
46
1. Closing book value 46,225,214.12 16,703,635.13 62,928,849.25
2. Opening book value 47,875,355.66 16,979,547.59 64,854,903.25
12. Fixed assets
Unit: RMB
Houses and Machinery Transportation Electronic
Item Total
buildings equipment equipment equipment
I. Original book value
1. Opening balance 733,926,399.80 910,910,022.64 27,625,534.23 118,527,502.83 1,790,989,459.50
2. Increased amount of
2,152,072.08 57,733,042.27 2,165,077.78 10,537,983.62 72,588,175.75
the period
(1) Purchase 2,152,072.08 57,733,042.27 2,165,077.78 10,537,983.62 72,588,175.75
(2) Transfer from
project under construction
(3) Enterprise
combination increase
3. Decreased amount of
12,018,458.96 1,072,087.49 4,386,731.89 17,477,278.34
the period
(1) Disposal or Scrap 12,018,458.96 1,072,087.49 4,386,731.89 17,477,278.34
4. Closing balance 736,078,471.88 956,624,605.95 28,718,524.52 124,678,754.56 1,846,100,356.91
II. Accumulative
depreciation
1. Opening balance 197,526,047.87 491,410,620.88 23,497,411.01 91,329,723.22 803,763,802.98
2. Increased amount of
15,583,780.02 39,511,660.65 553,145.53 7,022,579.62 62,671,165.82
the period
(1) Withdrawal 15,583,780.02 39,511,660.65 553,145.53 7,022,579.62 62,671,165.82
3. Decreased amount of
8,831,385.59 998,870.02 4,024,385.92 13,854,641.53
the period
(1) Disposal or Scrap 8,831,385.59 998,870.02 4,024,385.92 13,854,641.53
4. Closing balance 213,109,827.89 522,090,895.94 23,051,686.52 94,327,916.92 852,580,327.27
III. Depreciation reserves
1. Opening balance 3,918,452.47 12,312,885.38 35,494.21 99,533.43 16,366,365.49
2. Increased amount of
3,143,379.56 3,808,897.38
the period
(1) Withdrawal 3,808,897.38 3,808,897.38
3. Decreased amount of 4,039,591.33 4,871.81 29,031.13 4,739,012.09
47
the period
(1) Disposal or Scrap 4,705,109.15 4,871.81 29,031.13 4,739,012.09
4. Closing balance 3,918,452.47 11,416,673.61 30,622.40 70,502.30 15,436,250.78
IV. Book value
1. Closing book value 519,050,191.52 423,117,036.40 5,636,215.60 30,280,335.34 978,083,778.86
2. Opening book value 532,481,899.46 407,186,516.38 4,092,629.01 27,098,246.18 970,859,291.03
13. Construction in progress
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Automatic stamping riveting
168,565.57 168,565.57
line of roller cabinet
Riveting machine 8,014.42 8,014.42
Total 176,579.99 176,579.99
14. Intangible assets
Unit: RMB
Item Land use right Patent right Non-patents Others Total
I. Original book value
1. Opening balance 242,666,890.39 1,992,000.00 1,395,014.56 246,053,904.95
2. Increased amount of
the period
(1) Purchase
(2) Internal R&D
(3) Enterprise
combination increase
3. Decreased amount of
1,992,000.00 1,992,000.00
the period
(1) Disposal 1,992,000.00 1,992,000.00
4. Closing balance 242,666,890.39 1,395,014.56 244,061,904.95
II. Accumulated
amortization
1. Opening balance 50,383,404.24 1,992,000.00 1,395,014.56 53,770,418.80
48
2. Increased amount of
2,619,069.42 2,619,069.42
the period
(1) Withdrawal 2,619,069.42 2,619,069.42
3. Decreased amount of
1,992,000.00 1,992,000.00
the period
(1) Disposal 1,992,000.00 1,992,000.00
4. Closing balance 53,002,473.66 1,395,014.56 54,397,488.22
III. Depreciation reserves
1. Opening balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
4. Closing balance
IV. Book value
1. Closing book value 189,664,416.73 189,664,416.73
2. Opening book value 192,283,486.15 192,283,486.15
15. Long-term unamortized expenses
Unit: RMB
Amortization
Item Opening balance Increased amount Decrease Closing balance
amount
IT consulting fee 213,527.80 867,924.46 305,763.80 775,688.46
Fixed assets reform 4,174,200.34 1,526,699.07 1,376,084.72 4,324,814.69
Total 4,387,728.14 2,394,623.53 1,681,848.52 5,100,503.15
16. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment 146,318,376.04 21,947,756.41 160,340,693.36 24,051,104.00
49
provision
Internal unrealized profit 40,295,923.45 6,044,388.52 67,442,606.20 10,116,390.93
Remuneration and
15,477,872.17 2,321,680.83 17,699,114.41 2,654,867.16
dismiss expense
Accrued expenses 2,183,800,178.16 327,570,026.72 1,844,401,155.54 276,660,173.33
Accrued liabilities 1,675,596.14 251,339.42 1,727,340.89 259,101.13
Deferred income
2,715,733.23 407,359.98 2,942,333.25 441,349.99
(government subsidy)
Investment differences 8,782,955.88 1,317,443.38 8,782,955.88 1,317,443.38
Total 2,399,066,635.07 359,859,995.26 2,103,336,199.53 315,500,429.92
(2) Deferred income tax liabilities had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Change in fair value of
available-for-sale 66,013,434.56 9,902,015.18 104,142,671.24 15,621,400.69
financial assets
Evaluation of trading
4,917,873.13 737,680.97
financial instruments
Total 70,931,307.69 10,639,696.15 104,142,671.24 15,621,400.69
(3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB
Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred
deferred income tax income tax assets or deferred income tax income tax assets or
Item
assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at
the period-end the period-end the period-begin the period-begin
Deferred income tax
349,220,299.11 299,879,029.23
assets
(4) List of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 20,862,394.55 27,153,343.58
50
Deductible losses 81,524,175.60 81,177,769.43
Total 102,386,570.15 108,331,113.01
(5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB
Years Closing amount Opening amount Notes
Y2017 57,917.22 57,917.22
Y2018 16,303,166.71 16,303,166.71
Y2019 49,620,940.42 49,620,940.42
Y2020 9,576,983.63 9,576,983.63
Y2021 5,965,167.62 5,618,761.45
Total 81,524,175.60 81,177,769.43 --
17. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Prepayment for equipment 64,654,141.02 25,655,775.90
Total 64,654,141.02 25,655,775.90
18. Short-term loans
Unit: RMB
Item Closing balance Opening balance
Trade financing 170,000,000.00 183,813,064.12
Total 170,000,000.00 183,813,064.12
19. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bill 3,014,675,255.37 2,620,549,815.47
Total 3,014,675,255.37 2,620,549,815.47
The total amount of the due but not pay notes payable at the period-end was of RMB000.
51
20. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Material 3,399,811,330.44 3,301,435,137.79
Other 47,659,362.43 33,654,534.27
Total 3,447,470,692.87 3,335,089,672.06
(2) Notes of the accounts payable aging over one year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Unsettled due to the agreement of
Material 55,267,497.97
contract
Total 55,267,497.97 --
21. Advance from customers
(1) List of advance from customers
Unit: RMB
Item Closing balance Opening balance
Advance from goods 1,673,007,411.95 3,014,347,762.24
Total 1,673,007,411.95 3,014,347,762.24
(2) Significant advance from customers aging over one year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Advance from goods 30,387,187.91 Unsettled advance from goods
Total 30,387,187.91 --
22. Payroll payable
(1) List of Payroll payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance
52
I. Short-term salary 262,689,682.47 526,908,328.33 564,801,061.29 224,796,949.51
II. Post-employment
benefit-defined contribution 21,767,369.86 35,378,872.35 49,281,788.29 7,864,453.92
plans
III. Termination benefits 4,135,110.96 4,153,570.68 4,375,044.30 3,913,637.34
Total 288,592,163.29 566,440,771.36 618,457,893.88 236,575,040.77
(2) List of Short-term salary
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus, allowance,
239,077,184.04 443,711,216.41 490,074,351.27 192,714,049.18
subsidy
2. Employee welfare 4,873,935.81 37,897,571.75 29,031,331.91 13,740,175.65
3. Social insurance 6,169,696.09 20,459,370.44 22,914,420.36 3,714,646.17
Of which: Medical
5,179,907.00 16,407,140.37 18,483,109.65 3,103,937.72
insurance premiums
Work-related injury
728,121.47 2,805,994.11 3,085,812.41 448,303.17
insurance
Maternity insurance 261,667.62 1,246,235.96 1,345,498.30 162,405.28
4. Housing fund 7,166,552.24 15,181,948.56 15,185,970.92 7,162,529.88
5. Labor union budget and
5,402,314.29 9,658,221.17 7,594,986.83 7,465,548.63
employee education budget
Total 262,689,682.47 526,908,328.33 564,801,061.29 224,796,949.51
(3) List of drawing scheme
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 21,014,944.34 33,200,098.02 46,778,566.84 7,436,475.52
2. Unemployment
752,425.52 2,178,774.33 2,503,221.45 427,978.40
insurance
Total 21,767,369.86 35,378,872.35 49,281,788.29 7,864,453.92
23. Taxes payable
Unit: RMB
Item Closing balance Opening balance
53
VAT 7,335,659.81 43,959,339.80
Corporate income tax 318,457,471.59 317,599,561.26
Urban maintenance and construction tax 3,833,088.85 9,810,227.91
House appliance recycling funds 23,973,012.00 22,600,123.00
Education Surcharge 2,323,444.93 7,604,254.32
Other 12,255,609.42 10,664,523.67
Total 368,178,286.60 412,238,029.96
24. Dividends payable
Unit: RMB
Item Closing balance Opening balance
Common stock dividends 9,338,224.06 7,150,684.06
Total 9,338,224.06 7,150,684.06
25. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
Item Closing balance Opening balance
Payment for equipment 58,036,255.38 65,358,163.79
Payment for mold 89,418,261.55 84,354,267.87
Subsidy of energy saving & benefit the
6,140,000.00 6,140,000.00
people
Payment made on behalf 28,565,146.16 7,782,998.86
Margin & cash pledged 18,326,206.88 20,631,583.91
Third party payment 4,730,592.00 5,410,822.47
Others 19,475,179.75 10,248,565.14
Total 224,691,641.72 199,926,402.04
(2) Other significant accounts payable with aging over one year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Payment of mold 67,237,965.46 unsettled due to the agreement of contract
Payment of equipment 32,040,012.94 unsettled due to the agreement of contract
54
Total 99,277,978.40 --
26. Other current-liabilities
Unit: RMB
Item Closing balance Opening balance
Accrued expenses-sale rebate 1,190,023,904.88 1,095,875,998.29
Accrued expenses-sales promotional expense 404,629,336.46 223,209,831.40
Accrued expenses-shipping and handling charges 152,520,431.73 139,146,303.25
Accrued expenses-maintenance and installation charges 286,555,569.65 248,172,966.72
Accrued expenses-brand royalty 7,041,545.66 14,192,875.86
Accrued expenses-waste household appliance
7,268,238.00 15,830,282.99
maintenance funds
Accrued expenses-other 135,775,989.26 107,984,895.75
Total 2,183,815,015.64 1,844,413,154.26
27. Long-term payroll payable
Unit: RMB
Item Closing balance Opening balance
Termination benefits 13,693,727.01 16,101,348.60
Total 13,693,727.01 16,101,348.60
28. Estimated liabilities
Unit: RMB
Item Closing balance Opening balance Formed reason
Product quality assurance 1,675,596.14 1,727,340.89
Total 1,675,596.14 1,727,340.89 --
29. Deferred revenue
Unit: RMB
Item Opening balance Increase Decrease Closing balance Formed reason
Government Government
2,942,333.25 226,600.02 2,715,733.23
subsidies subsidies
Total 2,942,333.25 226,600.02 2,715,733.23 --
Item involving government subsidies:
55
Unit: RMB
Amount
recorded into
Amount of Related to
non-operating Other Closing
Item Opening balance newly assets/related
income in changes balance
subsidy income
Reporting
Period
Hefei Midea Washing Machine
Related to
Automation promotion & technological 2,683,333.25 175,000.02 2,508,333.23
assets
upgrading projects
Related to
Subsidies of substation reformation 132,800.00 25,200.00 107,600.00
assets
Special guide subsidies of modern Related to
126,200.00 26,400.00 99,800.00
service industry development assets
Total 2,942,333.25 226,600.02 2,715,733.23 --
30. Share capital
Unit: RMB
Increase/decrease (+/-)
Opening Capitalized Closing
New shares
balance Bonus shares Capital Others Subtotal balance
issued
reserves
The sum of
632,487,764.00 632,487,764.00
shares
31. Capital surplus
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Capital premium
1,055,182,718.57 1,055,182,718.57
(premium on stock)
Other capital reserves 136,307,414.44 23,481,320.87 159,293,057.25
Total 1,191,490,133.01 23,481,320.87 1,214,971,453.88
32. Other comprehensive income
Unit: RMB
Opening Reporting Period Closing
Item
balance Amount Less: recorded Less: Income Attributable to Attributable to balance
56
before income in other tax expense owners of the minority
tax in current comprehensive Company after shareholders
period income in prior tax after tax
period and
transferred to
profit or loss in
current period
I. Other
comprehensive
70,757,524.61 66,007,008.01 104,142,671.23 -5,719,385.50 -27,421,035.91 -4,995,241.81 43,336,488.70
reclassified into
profits or losses
Of which:
profits or losses
of change in fair
72,957,918.08 66,013,434.56 104,142,671.23 -5,719,385.50 -27,414,609.36 -4,995,241.81 45,543,308.72
value of
available-for-sal
e financial assets
Converted
difference of the
foreign currency -2,200,393.47 -6,426.55 -6,426.55 -2,206,820.02
financial
statement
Total 70,757,524.61 66,007,008.01 104,142,671.23 -5,719,385.50 -27,421,035.91 -4,995,241.81 43,336,488.70
33. Surplus reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 332,594,722.29 332,594,722.29
Total 332,594,722.29 332,594,722.29
34. Retained profits
Unit: RMB
Item Reporting Period Last period
Opening balance of retained profits before adjustments 3,756,517,718.81 2,960,955,454.36
Opening balance of retained profits after adjustments 3,756,517,718.81 2,960,955,454.36
Add: Net profit attributable to owners of the Company 731,539,923.36 580,826,562.58
Less: dividend of common stock payable 474,365,822.97 379,492,658.40
Closing retained profits 4,013,692,398.30 3,162,289,358.54
57
List of adjustment of opening retained profits:
(1) RMB0.00 opening retained profits was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 opening retained profits was affected by changes on accounting policies.
(3) RMB0.00 opening retained profits was affected by correction of significant accounting errors.
(4) RMB0.00 opening retained profits was affected by changes in combination scope arising from same control.
(5) RMB0.00 opening retained profits was affected totally by other adjustments.
35. Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 9,694,560,835.56 7,052,479,498.41 7,327,207,677.60 5,281,634,736.14
Other operations 873,500,018.65 808,892,313.37 657,579,517.32 530,957,037.53
Total 10,568,060,854.21 7,861,371,811.78 7,984,787,194.92 5,812,591,773.67
36. Business tax and surcharges
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and construction tax 29,091,665.44 25,211,378.27
Education Surcharge 22,058,158.72 19,309,415.68
Real estate tax 4,873,849.64
Land use tax 3,677,575.99
Vehicle and vessel use tax 75,448.42
Stamp duty 4,755,575.53
Business tax 203,083.51
Total 64,532,273.74 44,723,877.46
37. Sales expenses
Unit: RMB
Item Reporting Period Same period of last year
Sales expenses 1,533,889,871.40 1,191,332,056.12
Total 1,533,889,871.40 1,191,332,056.12
58
38. Administrative expenses
Unit: RMB
Item Reporting Period Same period of last year
Administrative expenses 328,163,105.40 265,946,054.68
Total 328,163,105.40 265,946,054.68
39. Financial expenses
Unit: RMB
Item Reporting Period Same period of last year
Interest expenses 5,897,953.01 7,327,975.82
Less: Interest income 63,840,314.80 65,265,736.10
Add: exchange loss 30,775,819.93 -11,313,331.62
Others 3,643,344.03 5,851,627.44
Total -23,523,197.84 -63,399,464.47
40. Asset impairment loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss 7,560,737.61 11,954,355.73
II. Inventory falling price loss 26,185,813.40 13,631,207.32
III. Fixed assets impairment losses 3,808,897.38 2,348,226.39
Total 37,555,448.39 27,933,789.44
41. Gains on the changes in the fair value
Unit: RMB
Sources Reporting Period Same period of last year
Financial assets measured by fair value and the changes be
4,917,873.13
included in the current profits and losses
Of which, gains on the changes in the fair value of derivative
4,917,873.13
financial instruments
Total 4,917,873.13
42. Investment income
59
Unit: RMB
Item Reporting Period Same period of last year
Investment income received from disposal of financial assets
measured by fair value and the changes be included in the current 2,654,220.00
profits and losses during holding period
Investment income received from available-for-sale financial
90,043,497.77
assets during the holding period
Investment income received from disposal of available-for-sale
88,968,164.34 67,315,479.04
financial assets
Total 181,665,882.11 67,315,479.04
43. Other income
Unit: RMB
Item Reporting Period same period of last year
VAT refund upon collection 15,806,553.77
44. Non-operating gains
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Total gains from disposal of
4,578,714.70 116,837.67 4,578,714.70
non-current assets
Including: Gains from disposal
4,578,714.70 116,837.67 4,578,714.70
of fixed assets
Government subsidies 8,072,556.77 19,387,917.07 8,072,556.77
Claims and fine 2,564,637.29 1,925,692.15 2,564,637.29
Others 407,844.54 55,538.87 407,844.54
Total 15,623,753.30 21,485,985.76 15,623,753.30
Government subsidies recorded into current profits and losses
Unit: RMB
Whether
subsidies
Special Related to
Distribution Distribution influence the Reporting Last
Item Nature subsidy assets/related
entity reason current period period
or not income
profits and
losses or not
VAT Wuxi New Subsidy Due to engaged No No 11,946,875.24 Related to the
60
refund District Tax in special income
upon Sub Bureau industry that the
collection state encouraged
and supported,
Foreign gained subsidy
trade and (obtaining in
Finance Bureau Related to the
economic Subsidy line with the law No No 926,486.68 3,938,000.00
of Hefei income
support and the
fund regulations of
national policy)
Economic and
Information Related to the
Other Award No No 7,146,070.09 3,503,041.83
Commission of income
Wuxi
Total -- -- -- -- -- 8,072,556.77 19,387,917.07 --
45. Non-operating expenses
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Loss on disposal of non-current
2,254,629.17 238,583.97 2,254,629.17
assets
Including: Loss on disposal of
2,254,629.17 238,583.97 2,254,629.17
fixed assets
Penalty 20,163.73 20,163.73
Others 804,864.96 199,673.37 804,864.96
Local fees (flood prevention
1,796,648.03
and security funds etc.)
Total 3,079,657.86 2,234,905.37 3,079,657.86
46. Income tax expense
(1) Lists of income tax expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 191,867,580.16 170,528,669.56
Deferred income tax expense -43,621,884.38 -43,226,277.81
Total 148,245,695.78 127,302,391.75
61
(2) Adjustment process of accounting profit and income tax expense:
Unit: RMB
Item Reporting Period
Total profits 981,005,945.79
Current income tax expense accounted by tax and relevant
147,150,891.87
regulations
Influence of income tax before adjustment -2,543,012.82
Influence of not deductable costs, expenses and losses 3,637,816.73
Income tax expense 148,245,695.78
47. Other comprehensive income
Refer to the Note. 32.
48. Cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Interest income 18,617,988.30 30,792,096.72
Government subsidy 8,072,556.77 7,441,041.83
Claim & fine income 1,264,590.80 619,052.46
Others 18,536,975.82 6,661,612.22
Total 46,492,111.69 45,513,803.23
(2) Other cash paid relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Cash for payment of expenses 1,343,311,634.84 1,028,841,247.41
Others 1,138,477.96 9,142,858.79
Total 1,344,450,112.80 1,037,984,106.20
(3) Other cash received relevant to investment activities
Unit: RMB
Item Reporting Period Same period of last year
62
Income from structured deposits interest 16,802,196.35 34,473,639.38
Total 16,802,196.35 34,473,639.38
49. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash flows generated from
-- --
operating activities
Net profit 832,760,250.01 664,923,275.70
Add: Provision for impairment of assets 37,555,448.39 27,933,789.44
Depreciation of fixed assets, of oil-gas assets, of productive
64,952,458.10 63,102,659.92
biological assets
Amortization of intangible assets 2,619,069.42 2,619,069.42
Long-term unamortized expenses 1,681,848.52 1,469,902.32
Losses on disposal of fixed assets, intangible assets and other
-2,324,085.53 121,746.30
long-term assets (gains: negative)
Losses from variation of fair value (gains: negative) -4,917,873.13
Financial cost (gains: negative) -10,904,243.34 -34,473,639.38
Investment loss (gains: negative) -181,665,882.11 -67,315,479.04
Decrease in deferred income tax assets (gains: negative) -44,359,565.36 -36,827,810.46
Increase in deferred income tax liabilities
737,680.97
(“-” means decrease)
Decrease in inventory (gains: negative) 614,201,149.52 134,845,643.10
Decrease in accounts receivable from operating activities (gains:
-728,452,220.93 47,112,616.96
negative)
Increase in payables from operating activities (decrease: negative) -748,672,061.46 789,234,275.49
Others 24,377,334.69 14,351,343.11
Net cash flows generated from operating activities -142,410,692.24 1,607,097,392.88
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of cash 3,096,982,558.92 1,919,339,663.91
Less: Opening balance of cash 4,171,689,917.21 2,792,685,328.69
Net increase in cash and cash equivalents -1,074,707,358.29 -873,345,664.78
63
(2) Net cash received from the disposal of subsidiaries in Reporting Period
Unit: RMB
Amount
Cash or cash equivalents received currently from the disposal of
2,415,000.00
subsidiaries in Reporting Period
Net cash received from the disposal of subsidiaries 2,415,000.00
(3) Cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 3,096,982,558.92 4,171,689,917.21
Of which: bank deposit on demand 3,096,982,558.91 4,171,689,917.21
II. Closing balance of cash and cash
3,096,982,558.92 4,171,689,917.21
equivalents
50. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Monetary capital
Including: USD 90,007,743.84 6.7744 609,748,459.88
EUR 5,709,052.52 7.7496 44,242,873.41
JPY 15.00 0.0605 0.91
Account receivable
Including: USD 23,512,644.42 6.7744 159,284,058.36
EUR 383,583.55 7.7496 2,972,619.08
(2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place,
recording currency and selection basis, if there are changes into recording currency, shall also disclose the
reason.
□ Applicable √ Not applicable
64
VIII. Changes of merge scope
No such case in Reporting Period.
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Main Holding percentage (%)
Registration Nature of
Name operating Way of gaining
place business Directly Indirectly
place
Wuxi Little Swan General Electric
Wuxi Wuxi Production 100.00% Setting-up
Appliances Co. , Ltd.
Wuxi Filin Electronics Co. , Ltd. Wuxi Wuxi Production 73.00% Setting-up
Jiangsu Little Swan Marketing and
Wuxi Wuxi Trading 99.54% 0.09% Setting-up
Sales Co. , Ltd.
Wuxi Little Swan Import & Export Import &
Wuxi Wuxi 88.46% Setting-up
Co. , Ltd. Export
Little Swan International (Singapore)
Singapore Singapore Investment 100.00% Setting-up
Co., Ltd.
Enterprise
Little Swan (Jingzhou) Electronic
Jingzhou Jingzhou Production 100.00% combination under
Appliances Co., Ltd.
same control
Enterprise
Hefei Midea Washing Machine Co.,
Hefei Hefei Production 69.47% combination under
Ltd.
same control
(2) Significant not wholly owned subsidiary
Unit: RMB
The profits and losses Declaring dividends Balance of minority
Shareholding proportion
Name arbitrate to the minority distribute to minority shareholder at closing
of minority shareholder
shareholders shareholder period
Wuxi Filin Electronics Co. ,
27.00% 30,162,017.39 230,462,456.37
Ltd.
Hefei Midea Washing
30.53% 71,057,730.15 841,905,267.91
Machine Co., Ltd.
65
(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB
Closing balance Opening balance
Name Non-current Non-current Non-current Non-current
Current assets Total assets Current liabilities Total liabilities Current assets Total assets Current liabilities Total liabilities
assets liability assets liability
Hefei
Midea
Washin
g 7,137,927,082.09 694,918,206.35 7,832,845,288.44 5,066,786,096.31 8,426,477.09 5,075,212,573.40 6,955,889,821.64 648,846,122.85 7,604,735,944.49 5,049,130,635.42 16,969,489.50 5,066,100,124.92
Machin
e Co.,
Ltd.
Wuxi
Filin
Electro
1,247,171,639.36 63,993,624.74 1,311,165,264.10 457,393,210.85 207,400.00 457,600,610.85 1,203,071,028.74 51,610,150.79 1,254,681,179.53 512,934,442.62 259,000.00 513,193,442.62
nics
Co. ,
Ltd.
66
Unit: RMB
Reporting Period Same period of last year
Name Total comprehensive Total comprehensive
Operation revenue Net profit Operating cash flow Operation revenue Net profit Operating cash flow
income income
Hefei Midea Washing
4,466,744,621.89 232,747,232.72 216,385,484.40 -355,645,784.85 3,490,739,131.29 183,744,563.10 193,637,968.84 1,307,170,946.87
Machine Co., Ltd.
Wuxi Filin Electronics
453,158,452.21 111,711,175.53 111,711,175.53 -72,814,995.54 330,094,718.79 93,010,763.35 93,010,763.35 11,960,170.45
Co. , Ltd.
67
X. Segment information
Since the Company’s operating revenue, expenses, assets and liabilities are mainly related to the manufacturing
and sales of washing machines and relevant products, after considering some factors such as the internal
organizational structure, management requirements and internal report systems, the management holds the opinion
that various companies’ business has obvious similarity within the scope of consolidation. Thus, the segment
report is not prepared.
The total income of the Company and its subsidiaries from external transactions in domestic and other countries
or regions, the total non-current assets excluding financial assets and deferred income tax assets in domestic and
other countries or regions are listed as follows:
(1) Income from external transactions
Unit: RMB
Region The first half of 2017 The first half of 2016
China 7,501,628,908.80 5,797,358,361.67
Other countries 2,192,931,926.76 1,529,849,315.93
Total 9,694,560,835.56 7,327,207,677.60
(2) Total non-current assets
Unit: RMB
Region June 30, 2017 Dec 31, 2016
China 1,300,608,269.00 1,258,041,184.47
Other countries
Total 1,300,608,269.007 1,258,041,184.47
XI. The risk related financial instruments
The financial risks the Company faced during operation are: credit risk, market risk (mainly exchange risk and
interest rate risk) and liquidity risk. The Company and its subsidiary overall risk management plan considering the
unpredictability of financial market, aim to reduce the potential negative influence to the financial results of the
Company and its subsidiaries.
(1) Market risk
(a) Foreign exchange risk
The main operation of the Company and its subsidiary was within the state, which settled by RMB. The foreign
68
assets, liabilities and foreign trade in future (the foreign assets, liabilities and foreign trade in future mainly settled
by USD) the Company and its subsidiary had recognized existing foreign exchange risk. The Company's
headquarter financial department supervise the scope of foreign assets, liabilities and foreign trade in future of
the Company and its subsidiary to maximally reduce foreign exchange risk , thus the Company and its subsidiary
will avoid foreign exchange rate in a way of signing forward foreign exchange contract or currency exchange
contract.
On 30 June 2017 and 31 December 2016, the lists of foreign financial assets and foreign financial liabilities
discounted into RMB held by Company and its subsidiary were as following:
Unit: RMB
Closing balance
Item
Item Other foreign currency Total
Foreign financial assets
Monetary capital 609,748,459.88 44,242,874.32 653,991,334.20
Accounts receivable 169,382,140.50 3,674,235.16 173,056,375.66
Total 779,130,600.38 47,917,109.48 827,047,709.86
Foreign financial liabilities
Payable 10,098,082.14 701,616.08 10,799,698.22
Opening balance
Item
Item Other foreign currency Total
Foreign financial assets
Monetary capital 857,223,958.85 40,989,790.78 898,213,749.63
Accounts receivable 538,217,122.83 29,781,044.92 567,998,167.75
Total 1,395,441,081.68 70,770,834.81 1,466,211,916.49
Foreign financial liabilities
Payable 51,256,695.66 809,036.96 52,065,732.62
On June 30, 2017, if RMB appreciates or depreciates by 7% without any changes in other factors, for all kinds of
US financial assets and liabilities, there will be an decrease and increase in net consolidated profits of about
RMB45,757,000 (about RMB79,980,000 on Dec 31, 2016).
(b) Interest rate risk
On 30 June 2017 and 31 December 2016, there was no short term or long-term interest-bearing debt contracts of
floating interest rate in the Company and its subsidiary, thus the management believe that there was not existing
significant interest rate risk.
(2) Credit risk
The Company and its subsidiary adopt group classification to manage the credit risk. Credit risk mainly incurred
69
in bank deposit, account receivable, other account receivable, note receivable, structure deposit, and financial
products recorded into other current assets, etc..
The bank deposits and structure deposit of the Company and its subsidiary were deposit in the state-owned banks
and other large and medium-sized commercial banks, the Company believe that there was not existing significant
credit risk, and won't lead to any significant losses due to break a contract to the entity.
The Company and its subsidiary entrust commercial bank, trust company, assets management company and other
financial institutions to conduct short term low risk finance investment, participate in bank finance products, trust
plan of trust company, assets management plan of assets management company, the main investment direction
was financial instrument with the high credit rating, better fluidity, trust products and assets management plan
with prospective earnings, and conducting commercial bank guaranteed finance business with low risk, stable
interest and no more than 1 year investment period in our inter-bank market. The idle fund of the Company and its
subsidiary used for trust investment, not invest in stock and its derivative product, security investment fund and
trust investment for security investment purpose and investment relevant to other securities.
Besides, as for account receivable, other account receivable and note receivable, the Company and its subsidiary
set relevant policy to control credit risk exposure. The Company and its subsidiary, base on the financial situation
of the client, possibility of obtaining guarantee from third party, credit record, and other factors such as the recent
market situation etc. to evaluate the credit qualification of client and set relevant credit period. The Company and
its subsidiary regularly supervise the credit record of client, as for the client with bad credit records, the Company
and its subsidiary will adopt reminder letters, shorten the credit period or cancel credit period etc. to ensure the
overall credit risk of the Company within control. On 30 June 2016, there was no significant overdue account
receivable
(3) Liquidity risk
The Company and its subsidiary response for its cash flow prediction The head financial department base on
collecting cash flow prediction of each subsidiary, and at combination level continuously supervise short term and
long term capital need to ensure maintain plenty of cash reserve and securities can be realized at any time.
On balance sheet date, each financial liabilities listed by un-discounted contract cash flow according to date were
as following:
Unit: RMB
June 30, 2017
Item
Within 1 year 1-2 years 2-5 years Over 5 years Total
Notes payable 3,014,675,255.37 3,014,675,255.37
Accounts payable 3,447,470,692.87 3,447,470,692.87
Dividends payable 9,338,224.06 9,338,224.06
Other
2,183,815,015.64 2,183,815,015.64
current-liabilities
Other account 224,691,641.72 224,691,641.72
70
payable
Accrued liabilities 1,675,596.14 1,675,596.14
Total 8,879,990,829.66 8,879,990,829.66
Dec 31, 2016
Item
Within 1 year 1-2 years 2-5 years Over 5 years Total
Short-term loan 185,237,615.37 185,237,615.37
Notes payable 2,620,549,815.47 2,620,549,815.47
Accounts payable 3,335,089,672.06 3,335,089,672.06
Dividends payable 7,150,684.06 7,150,684.06
Other
1,844,413,154.26 1,844,413,154.26
current-liabilities
Other account
199,926,400.42 199,926,400.42
payable
Accrued liabilities 1,727,340.89 1,727,340.89
Total 8,194,094,682.53 8,194,094,682.53
XII. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB
Closing fair value
Fair value Fair value Fair value
Item
measurement items at measurement items at measurement items at Total
level 1 level 2 level 3
I. Consistent fair value measurement -- -- -- --
Available-for-sale financial
5,976,013,434.56 5,976,013,434.56
assets-financial products
Total assets measured at fair value
5,976,013,434.56 5,976,013,434.56
consistently
II. Inconsistent fair value
-- -- -- --
measurement
2. Valuation technique adopted and nature and amount determination of important parameters for
consistent and inconsistent fair value measurement items at level 3
On 30 June 2017, financial assets with fair value measurement items at level 3 were all the break-even floating
income financial product investment, which all adopt valuation technique to recognize its fair value.
71
3. Explain the reason for conversion and the policy governing when the conversion happens if conversion
happens among consistent fair value measurement items at different levels
The incurred date lead to events of conversion between different levels was recognized as time-point of
conversion between different levels. There was no conversion between level 1 and level 2 in the current year.
4. Change in financial assets at level 3
Unit: RMB
Item Financial product investment
Jan 1, 2017 5,994,142,671.24
Purchase 2,065,000,000.00
Sale -2,045,000,000.00
Total current gains -38,129,236.68
-gains recorded into profit and loss -104,142,671.23
-gains recorded into other comprehensive income 66,013,434.55
June 30, 2016 5,976,013,434.56
Changes in assets still held on June 30, 2017 and recorded in the profit and loss of 2017
which didn’t realize profits or losses
Income from change in fair value
Relevant information on fair value measurement at level 3
Unit: RMB
Fair value at June Valuation Unobservable input Relationship with Observable/unob
Item Scope
30, 2017 technique value fair value servable
Available-for-sale financial assets
Discounted Expected annual
Financial products 5,976,013,434.56 3.9%-5.25% Positive Unobservable
cash flow yield
Fair value at Dec Valuation Unobservable Relationship Observable/un
Item Scope
31, 2016 technique input value with fair value observable
Available-for-sale financial assets
Financial Discounted Expected annual
5,994,142,671.23 3.9%-5.5% Positive Unobservable
products cash flow yield
5. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities of the Company and its subsidiaries measured at amortized cost mainly include:
account receivable, other accounts receivable, account payable and other accounts payable
72
Available for sale financial assets measured at cost was the unlisted share investment with no offer in active
market and larger reasonable valuation change range and each fair value probability cannot reasonably recognized,
thus, the fair value cannot be reliably measured.
There is no significant variance the book value and fair value of financial assets and liabilities during the
Reporting Period.
XIII. Related party and related Transaction
1. Information related to parent company of the Company
Proportion of voting
Proportion of share
rights owned by
Name of parent Registration held by parent
Nature of business Registered capital parent company
company place company against the
against the Company
Company (%)
(%)
MIDEA Global technology group operating
Foshan
GROUP CO., consumer appliances, HVAC, 6,519,637,198.00 52.67% 52.67%
Guangdong
LTD. robots and automatic system
Notes of the parent company of the Company
The ultimate controller of the Company is He Xiangjian.
2. Subsidiaries of the Company
Refer to Note IX.
3. Information on other related parties of the Company
Name Relationship
Ningbo Midea United Material Supply Co., Ltd Under control of controlling shareholder of the Company
Huai'an Welling Motor Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Wuhu Welling Motor Marketing Co., Ltd. Under control of controlling shareholder of the Company
Ningbo Annto Zhilian Technology Co., Ltd. Under control of controlling shareholder of the Company
Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. Under control of controlling shareholder of the Company
Annto Zhilian Technology Share Holding Co., Ltd. Under control of controlling shareholder of the Company
Midea Group E-commerce Co., Ltd. Under control of controlling shareholder of the Company
Zhejiang Meizhi Compressor Co. Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Hicks Electronics Co., Ltd. Under control of controlling shareholder of the Company
Foshan Shunde District Bainian Technology Development Co., Ltd. Under control of controlling shareholder of the Company
Midea Smart Home Technology Co., Ltd Under control of controlling shareholder of the Company
73
Hefei Hua Ling Share Holding Co. , Ltd. Under control of controlling shareholder of the Company
Midea Electric Trading (Singapore) Co. Pte. Ltd. Under control of controlling shareholder of the Company
MIDEA SCOTT & ENGLISH ELECTRONICS SDN BHD Under control of controlling shareholder of the Company
Midea Life Electric (Vietnam) Co. , Ltd. Under control of controlling shareholder of the Company
PT. MIDEA PLANET INDONESIA Under control of controlling shareholder of the Company
Orient Household Appliances Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Household Electric Appliance manufacturing Co.,
Under control of controlling shareholder of the Company
Ltd.
Guangdong Midea Refrigeration Equipment Co., Ltd Under control of controlling shareholder of the Company
Hubei Midea Refrigerator Co., Ltd. Under control of controlling shareholder of the Company
Foshan Midea Qinghu Water Purification Equipment Co., Ltd. Under control of controlling shareholder of the Company
Midea Welling Motor Technology (Shanghai) Co., Ltd. Under control of controlling shareholder of the Company
Shenzhen Midea Payment Technology Co., Ltd. Under control of controlling shareholder of the Company
Wuhu Midea Household Electric Appliance Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Group Wuhu Refrigeration Equipment Co., Ltd. Under control of controlling shareholder of the Company
TOSHIBA LIFESTYLE PRODUCTS & SERVICES CORPORATION Under control of controlling shareholder of the Company
Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. Under control of controlling shareholder of the Company
Midea Middle East Under control of controlling shareholder of the Company
Foshan Shunde District Bainian Technology Development Co., Ltd. Under control of controlling shareholder of the Company
4. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
Whether exceed
The approval trade Same period of
Related party Content Reporting Period trade credit or
credit last year
not
Wuhu Welling Motor Marketing Electrical
501,214,171.41 1,360,000,000.00 No 65,594,596.51
Co., Ltd. Machine
Ningbo Midea United Material
Materials 824,485,276.15 1,470,000,000.00 No 425,080,087.78
Supply Co., Ltd.
Ningbo Annto Zhilian Technology Warehousing &
366,086,063.48 178,930,465.36
Co., Ltd. logistics
970,000,000.00 No
Annto Zhilian Technology Share Warehousing &
54,675,276.23 68,608,403.67
Holding Co., Ltd. Logistics
74
Zhejiang Meizhi Compressor Co.
Compressor 7,043,483.25 19,000,000.00 No 3,792,306.57
Ltd.
Promotion &
Midea Group E-commerce Co., Ltd. 22,380,192.57 55,000,000.00 No 14,305,712.63
Marketing
Ningbo Midea United Material Chip & HIFI
33,583,425.56
Supply Co., Ltd module
85,000,000.00 No
Guangdong Midea Hicks Chip & HIFI
513,334.92
Electronics Co., Ltd. module
Midea Group Co., Ltd. Service charge 19,999.98 24,000,000.00 No
Ningbo Beautiful Homeland
After-sales service 132,504,096.51 320,000,000.00 No 170,408,807.12
Electric Appliance Service Co., Ltd.
Midea Smart Home Technology
Materials 144,785.68 No
Co., Ltd
Huai'an Welling Motor
Electrical machine No 345,409,520.97
Manufacturing Co., Ltd.
Total 1,942,650,105.74 4,303,000,000.00 1,272,129,900.61
Information of sales of goods and provision of labor service
Unit: RMB
Whether
The approval Same period of
Related party Content Reporting Period exceed trade
trade credit last year
credit or not
Washing
Midea Electric Trading (Singapore) Co.
machine & 1,594,543,430.93 4,025,000,000.00 No 1,118,554,710.83
Pte. Ltd.
Fittings
Washing
MIDEA SCOTT&ENGLISH
machine & 45,312,856.38 105,000,000.00 No 28,049,217.86
ELECTRONIICS SDN.BHD
Fittings
Washing
PT.Midea Planet Indonesia machine & 15,461,735.27 70,000,000.0 No 11,061,356.49
Fittings
Washing
Midea Life Electric (Vietnam) Co., Ltd. machine & 6,144,209.34 55,000,000.00 No 10,328,952.32
Fittings
Washing
Orient Household Appliances Ltd. machine & 18,771,850.49 70,000,000.00 No
Fittings
Ningbo Beautiful Homeland Electric
Fittings 18,416,401.64 28,000,000.00 No
Appliance Service Co., Ltd.
75
Washing
TOSHIBA LIFESTYLE PRODUCTS &
machine & 20,757,917.67 80,000,000.00 No
SERVICES CORPORATION
Fittings
Toshiba Home Appliances
Manufacturing ( South China Sea) Co., Parts 548,124.87
Ltd.
Washing
Hefei Hua Ling Share Holding Co. , Ltd. machine & 161,538.46
Fittings
Washing
Midea Middle East machine & 1,921,564.33
Fittings
Ningbo Annto Zhilian Technology Co., Washing
1,855,571.90
Ltd. machine
Total 1,723,895,201.28 4.433.000,000.00 1,167,994,237.50
(3) Information of related lease
The Company was lessor:
Unit: RMB
Whether exceed
Category of leased The lease income The approval trade The lease income
Name of lessee trade credit or
assets confirmed in this year credit confirmed in last year
not
Hefei Hua Ling Share
House renting 5,641,036.82 14,150,943.40 No 2,916,884.40
Holding Co., Ltd.
Total 5,641,036.82 14,150,943.40 2,916,884.40
Notes: Of the above related transactions, in the first half of 2017, the total amount of related transactions not
approved but actually incurred is RMB4,631,585.24 with 0.5% less compared with the audited net assets of 2016
(RMB29,919,239.31). Thus the approval of the board of directors is not needed.
5. Receivables and payables of related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Name o f
Related party Bad debt Bad debt
item Book balance Book balance
provision provision
Accounts Midea Electric Trading (Singapore) Co. 649,905,177.27 32,495,258.86 475,357,280.44 23,767,864.02
76
receivable Pte. Ltd.
Accounts
Orient Household Appliances Ltd. 8,453,601.69 422,680.08 13,679,187.05 683,959.35
receivable
Accounts MIDEA SCOTT&ENGLISH
19,491,267.83 974,563.39 3,485,105.76 174,255.29
receivable ELECTRONILCS SDN.BHD
Accounts
PT MIDEA PLANET INDONESIA 10,130,616.52 506,530.83 8,404,017.46 420,200.87
receivable
Accounts
Midea Life Electric (Vietnam) Co. , Ltd. 4,839,530.62 241,976.53 13,183,502.52 659,175.13
receivable
Accounts Annto Zhilian Technology Share
43,086.00 2,154.30
receivable Holding Co., Ltd.
Toshiba Home Appliances
Accounts
Manufacturing ( South China Sea) Co., 641,306.10 32,065.31
receivable
Ltd.
Accounts TOSHIBA LIFESTYLE PRODUCTS
3,506,178.79 175,308.94
receivable & SERVICES CORPORATION
Accounts Ningbo Beautiful Homeland Electric
2,808,008.89 140,400.44
receivable Appliance Service Co., Ltd.
Accounts
Midea Middle East 903,926.08 45,196.30
receivable
Total 700,679,613.79 35,033,980.68 514,152,179.23 25,707,608.96
Other
Shenzhen Midea Payment Technology
accounts 4,265,894.46 213,294.72 10,835,423.12 541,771.16
Co., Ltd.
receivable
Other
Guangdong Midea Group Wuhu
accounts 3,428,921.06 171,446.05
Refrigeration Equipment Co., Ltd.
receivable
Other
Hefei Hua Ling Share Holding Co. ,
accounts 854,915.88 42,745.79
Ltd.
receivable
Other
accounts Hubei Midea Refrigerator Co., Ltd. 813,636.76 40,681.84
receivable
Total 4,265,894.46 213,294.72 15,932,896.82 796,644.84
Ningbo Midea United Material Supply
Prepayments 26,130,582.93 10,121,553.93
Co., Ltd
Prepayments Midea Group E-commerce Co., Ltd. 4,620,995.71 1,549,712.32
Foshan Midea Qinghu Water
Prepayments 75,816.00
Purification Equipment Co., Ltd.
77
Foshan Shunde District Bainian
Prepayments 2,406,400.00 48,100.00
Technology Development Co., Ltd.
Total 33,157,978.64 11,795,182.25
(2) Payables
Unit: RMB
Name o f item Related party Closing book balance Opening book balance
Accounts
Wuhu Welling Motor Marketing Co., Ltd. 192,129,470.82 201,074,837.49
payable
Accounts
Ningbo Midea United Material Supply Co., Ltd 40,344,869.19 110,265,994.59
payable
Accounts
Zhejiang Meizhi Compressor Co. Ltd. 4,697,152.03 3,330,792.14
payable
Accounts
Guangdong Midea Hicks Electronics Co., Ltd. 1,305,066.18
payable
Accounts Ningbo Beautiful Homeland Electric Appliance
193,251.70 499,870.00
payable Service Co., Ltd.
Accounts Huai'an Welling Motor Manufacturing Co.,
390,637.80
payable Ltd.
Accounts Annto Zhilian Technology Share Holding Co.,
2,028,922.73 151,302.88
payable Ltd.
Accounts
Midea Smart Home Technology Co., Ltd 272,903.32 52,603.40
payable
Accounts
Ningbo Annto Zhilian Technology Co., Ltd. 3,969,734.53 342,449.48
payable
Accounts Guangdong Midea Household Electric
107,698.41
payable Appliance manufacturing Co., Ltd.
Accounts Foshan Midea Qinghu Water Purification
164,268.00
payable Equipment Co., Ltd.
Total 243,908,270.73 317,413,553.96
Other accounts Ningbo Beautiful Homeland Electric Appliance
9,949.00 9,949.00
payable Service Co., Ltd.
Other accounts Wuhu Midea Household Electric Appliance
1,288,644.49
payable Manufacturing Co., Ltd.
Other accounts Guangdong Midea Refrigeration Equipment
126,964.69 283,510.28
payable Co., Ltd
Other accounts Midea Welling Motor Technology (Shanghai)
275,223.94
payable Co., Ltd.
78
Other accounts Guangdong Midea Household Electric
84,774.82
payable Appliance manufacturing Co., Ltd.
Other accounts
Midea Group Co., Ltd. 43,400.00
payable
Total 136,913.69 1,985,502.53
Other current
Midea Group Co., Ltd. 7,041,545.66 14,192,875.85
liabilities
XIV. Stock payment
Midea Group has implemented four stock options and one restricted stock incentive plan for middle and senior
management and technical backbone of the Group and its subsidiaries. At present, three exercise period of the first
period of the stock option incentive plan, the first and second exercise period of the second period of the stock
option incentive plan, the first exercise period of the third period of stock option incentive plan has reached the
right condition.
By the end of the Reporting Period, the Company and its subsidiaries had a total of 30 participants and the stock
option was 6986.25 thousand in the first phase of the stock option incentive plan. The Company and its
subsidiaries had a total of 36 participants and the stock option was 6.30 million in the second phase of the stock
option incentive plan. The Company and its subsidiaries had a total of 64 participants and the stock option was
8.79 million in the third phase of the stock option incentive plan. The Company and its subsidiaries had a total of
126 participants and the stock option was 7.956 million in the fourth phase of the stock option incentive plan. The
Company and its subsidiaries had a total of 9 participants and the stock option was 525 thousand in the first phase
of the restricted stock incentive plan.
XV. Commitments and contingency
1. Significant commitments
As of 30 June 2017, there were no significant commitments to be disclosed.
2. Contingency
(1) Significant contingency at balance sheet date
As of 30 June 2017, there were no significant contingency to be disclosed.
(2) Notes shall be given even if there is no significant contingency to disclose
There is no significant contingency to disclose for the Company.
79
XVI. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB’0,000
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdrawa Withdraw
Proporti Book value Proporti Book value
Amount Amount l Amount Amount al
on on
proportion proportion
Accounts
receivable
with
significant
single amount 169,455.73 58.35% 169,455.73 126,233.17 53.37% 126,233.17
for which bad
debt provision
separately
accrued
Accounts
receivable
withdrawal of
bad debt
120,941.00 41.65% 6,047.05 5.00% 114,893.95 110,307.67 46.63% 5,515.38 5.00% 104,792.29
provision of
by credit risks
characteristics
:
Total 290,396.73 100.00% 6,047.05 2.08% 284,349.68 236,540.84 100.00% 5,515.38 2.33% 231,025.46
Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable □ Not applicable
Unit: RMB
Accounts receivable (classified by Closing balance
units) Account receivable Bad debt provision Withdrawal proportion Withdrawal reason
Hefei Midea Washing Machine Co.,
1,691,595,170.38
Ltd.
Wuxi FILIN Electronics Co., Ltd. 2,962,143.24
Total 1,694,557,313.62 -- --
80
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Within 1 year 1,209,409,998.82 60,470,499.95 5.00%
Total 1,209,409,998.82 60,470,499.94
Notes:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad debt provision withdrawal, reversed or recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB5,316,664.13; the
amount of the reversed or collected part during the Reporting Period was of RMB0.00.
(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Unit: RMB
Name of customer Balance Bad debt provision Proportion (%)
Total of top 5 of the closing balance of the accounts receivable 2,587,720,199.85 44,806,251.47 89.11%
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB’0,000
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book Withdrawa
Proportio Withdrawal Proporti Book value
Amount Amount value Amount Amount l
n proportion on
proportion
Other accounts
receivable with
significant single
7,574.74 91.89% 7,540.87 99.55% 33.87 7,575.50 81.69% 7,540.82 99.54% 34.69
amount for which
bad debt provision
separately accrued
81
Other accounts
receivable withdrawn
bad debt provision 668.90 8.11% 67.68 10.12% 601.22 1,698.20 18.31% 115.27 6.79% 1,582.93
according to credit
risks characteristics
Total 8,243.64 100.00% 7,608.55 92.30% 635.09 9,273.70 100.00% 7,656.09 82.56% 1,617.61
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period：
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal Withdrawal
receivable provision proportion reason
Jiangsu Little Swan Marketing and Sales Co. , Ltd. 74,297,038.55 74,297,038.55 100.00% Irrecoverable
Wuxi Little Swan Import & Export Co., Ltd. 1,111,652.95 1,111,652.95 100.00% Irrecoverable
Little Swan International (Singapore) Co., Ltd. 338,720.00
Total 75,747,411.50 75,408,691.50 -- --
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 5,247,313.91 262,365.70 5.00%
1 to 2 years 535,900.00 53,590.00 10.00%
2 to 3 years 460,200.00 138,060.00 30.00%
Over 3 years 445,600.00 222,800.00 50.00%
Total 6,689,013.91 676,815.70 10.12%
Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad debt provision withdrawal, reversed or recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB-475,418.88; the
82
amount of the reversed or collected part during the Reporting Period was of RMB0.00.
(3) Other account receivable classified by account nature
Unit: RMB
Nature Closing book balance Opening book balance
Margin &cash pledge 1,512,558.00 1,477,683.35
Employee loan 3,550,926.53 1,719,177.08
Internal intercourse funds 75,747,411.50 75,755,041.50
Others 1,625,529.38 13,785,131.04
Total 82,436,425.41 92,737,032.97
(4) The top five other account receivable classified by debtor at period-end
Unit: RMB
Closing Bad debt provision
Name of the entity Nature Aging Proportion%
balance Closing balance
Jiangsu Little Swan Marketing and
Intercourse funds 74,297,038.55 4 to 5 years 90.13% 74,297,038.55
Sales Co. , Ltd.
Shenzhen Midea Payment Temporary
1,621,708.72 Within 1 year 1.97% 81,085.44
Technology Co., Ltd. payments
Wuxi Little Swan Import & Export
Intercourse funds 1,108,162.95 1 to 2 years 1.34% 1,108,162.95
Co., Ltd.
Margin &cash
Wuxi Huarun Gas Co., Ltd. 820,800.00 Within 1 year 1.00% 41,040.00
pledge
Little Swan International
Intercourse funds 338,720.00 1 to 2 years 0.41% 0.00
(Singapore) Co., Ltd.
Total -- 78,186,430.22 -- 75,527,326.94
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Investment to the
1,433,285,041.57 57,500,000.00 1,375,785,041.57 1,433,285,041.57 57,500,000.00 1,375,785,041.57
subsidiary
Total 1,433,285,041.57 57,500,000.00 1,375,785,041.57 1,433,285,041.57 57,500,000.00 1,375,785,041.57
83
Investment to the subsidiary
Unit: RMB
Withdrawn
impairment Closing
provision in balance of
Investee Opening balance Increase Decrease Closing balance
the impairment
Reporting provision
Period
Wuxi Little Swan Import & Export
57,500,000.00 57,500,000.00 57,500,000.00
Co., Ltd.
Jiangsu Little Swan Marketing and
417,550,000.00 417,550,000.00
Sales Co. , Ltd.
Wuxi FILIN Electronics Co., Ltd. 25,660,308.10 25,660,308.10
Wuxi Little Swan General
89,062,000.00 89,062,000.00
Appliance Co., Ltd.
Little Swan (Jingzhou) Sanjin
11,869,431.12 11,869,431.12
Electrical Appliance Co., Ltd.
Little Swan International
681,050.00 681,050.00
(Singapore) Co., Ltd.
Hefei Midea Washing Machine Co.,
830,962,252.35 830,962,252.35
Ltd.
Total 1,433,285,041.57 1,433,285,041.57 57,500,000.00
4. Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 7,187,874,729.64 5,451,504,491.74 5,650,983,937.54 4,194,962,471.12
Other operations 571,348,362.67 544,495,540.84 394,837,154.52 329,992,504.23
Total 7,759,223,092.31 5,996,000,032.58 6,045,821,092.06 4,524,954,975.35
5. Investment income
Unit: RMB
Item Reporting Period Same period of last year
Investment income received from held-to-maturity investment
1,507,720.00
during the holding period
84
Investment income received from available-for-sale financial
49,901,444.44 17,306,094.37
assets in the holding period
Investment income received from disposal of available-for-sale
41,950,352.38
financial assets
Total 93,359,516.82 17,306,094.37
XIX. Supplementary materials
1. Items and amounts of extraordinary gains and losses
Unit: RMB
Item Amount Explanation
Gains/losses on the disposal of non-current assets 2,324,085.53
Tax rebates, reductions or exemptions due to approval beyond authority or
8,072,556.77
the lack of official approval documents
Profit/loss on fair value changes of transactional financial assets and
liabilities & investment income from disposal of transactional financial assets
7,572,093.13
and liabilities as well as financial assets available for sale, except for
effective hedges related to routine operations of the Company
Other non-operating income and expenses other than the above 2,147,453.14
Less: Income tax effects 2,446,093.57
Minority interests effects 926,807.28
Total 16,743,287.72 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Weighted average EPS (Yuan/share)
Profit as of Reporting Period
ROE (%) EPS-basic EPS-diluted
Net profit attributable to common shareholders of the
11.69% 1.16 1.16
Company
Net profit attributable to common shareholders of the
11.42% 1.14 1.14
Company after deduction of non-recurring profit and loss
85
86
