WUXI LITTLE SWAN COMPANY LIMITED
INTERIM REPORT 2010
26 August 2010Wuxi Little Swan Company Limited
Interim Report 2010
Contents
Section I Impor tant Not i ce……………………………………………………………2
Section I I Company Prof i le……………………………………………………….…..2
Section III Changes in Share Capital and Shares Held by Principal Shareholders…...4
Section IV Particulars about Directors, Supervisors and Senior Executives………….6
Senior V Report of the Board of Directors……………………………………………6
Section VI S i g n i f i cant Events………………………………………………………..9
Section VII F inancial Report……………………………………………………...….13
Section VIII Documents Available for Reference……………………………......….13
Attachment F inancial Report………………………………………….………….….14Section I Important Notice
The Board of Directors, the Supervisory Committee as well as directors, supervisors
and senior executives of Wuxi Little Swan Company Limited (hereinafter referred to
as the Company) warrant that this report does not contain any false or misleading
statements or omit any material facts and collectively and individually accept the
responsibilities for the truthfulness, accuracy and completeness of the whole
contents.Chairman of the Board Mr. Fang Hongbo, General Manager Mr. Chai Xinjian
and CFO Ms. Ma Junxia hereby confirm that the financial report enclosed in the
interim report is true and complete.
The interim financial report of the Company has not been audited.
Section II Company Profile
I. Basic information
1. Legal Name of the Company in Chinese 无锡小天鹅股份有限公司
Legal Name of the Company in English Wuxi Little Swan Company Limited
2. Legal Representative: Mr. Fang Hongbo
3. Secretary of the Board of Directors Ms. Zhou Sixiu
Contact Address No. 67, Huiqian Road, Wuxi, Jiangsu
Post Code: 214035
Tel: 0510‐81082320
Fax: 0510‐83720879
E‐mail: IR_littleswan@littleswan.com.cn
Securities Affairs Representative: Mr. Yao Yanfeng
Contact Address: No. 67, Huiqian Road, Wuxi, Jiangsu
Post Code: 214035
Tel: 0510‐81082280
Fax: 0510‐83720879
E‐mail: yaoyf@littleswan.com.cn
4. Registered Address: No. 1 Hanjiang Road, National
High‐Tech Industrial Zone, Wuxi
Post Code: 214028
Office Address: No.18 Yangtze River Road, National
High‐Tech Industrial Zone, Jiangsu
Post Code: 214035
International Website of the Company: http://www.littleswan.com
E‐mail of the Company: IR_littleswan@littleswan.com.cn
5. Designated Newspaper for Information
Disclosure of the Company:
Securities Times and Hong Kong Ta
Kung Pao
Internet Website for publishing the
Interim Report Designated by CSRC:
http://www.cninfo.com.cn
Place Where the Interim Report is
Prepared and Placed: Securities Department
Securities Dept. of the Companyof the Company
6. Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: Little swan A, Little swan B
Stock Code: 000418, 200418
7. Other Relevant Information
Registration date after change: December 23, 2008
Registration place after change: Jiangsu Wuxi Administrative Bureau
for Industry and Commerce
Registration code of enterprise corporate
Business license:
320200000014723
Registration code of taxation (State Tax
Bureau):
320200704046760
Registered code of taxation (Local Tax
Bureau):
320200704046760
II. Main accounting data and financial indices
Unit: RMB Yuan
At the end of report
period
At the end of last
year
Increase/decrease of the
period‐end compared with the
period‐end of last year (%)
Total assets 5,620,319,448.05 3,878,629,773.92 44.90%
Owners’ equity attributable to
shareholders of the listed company
2,026,162,967.27 1,854,911,284.10 9.23%
Share capital 547,655,760.00 547,655,760.00 0.00%
Net assets per share attributable to
shareholders of the listed company
(Yuan/share)
3.70 3.39 9.14%
The report period (Jan.
‐Jun.)
The same period of
last year
Increase/decrease year‐on‐year
(%)
Total operating income 3,634,134,845.06 1,902,488,624.24 91.02%
Operating profit 218,854,918.52 59,481,300.05 267.94%
Total profit 218,126,690.47 71,662,982.38 204.38%
Net profit attributable to shareholders of
the listed company
168,364,330.94 67,392,307.11 149.83%
Net profit attributable to shareholders of
the listed company after deducting
non‐recurring gains and losses
169,263,710.54 55,821,900.00 203.22%
Basic EPS (Yuan/share) 0.31 0.12 149.83%
Diluted EPS (Yuan/share) 0.31 0.12 149.83%
ROE (%) 8.68% 4.11% 4.57%
Net cash flows from operating activities 502,850,482.82 103,869,295.30 384.12%
Net cash flows per share from operating
activities (Yuan/share)
0.92 0.19 384.21%Items of non‐recurring gains and losses
Unit: RMB Yuan
Item Amount Notes (if applicable)
Gains and losses from non‐current asset disposal ‐2,131,225.10
Government subsidies recognized into current gains and losses,
excluding those subsidies which are closely related to normal
operation of the Company and are enjoyed at fixed amounts or
proportions according to certain state standards
5,045,748.88
Other non‐operating incomes and expenses besides the items
above
‐3,642,751.83
Effect on income tax 232,985.58
Effect on minority interests ‐404,137.13
Total ‐899,379.60 ‐
Differences between PRC GAAP and IFRS
Unit: RMB Yuan
Net profit attributable to shareholders of the
listed company
Owners’ equity attributable to shareholders of
the listed company
Current period Previous period Closing amount Opening amount
Under IFRS 168,364,330.94 67,392,307.11 2,026,162,967.27 1,854,911,284.10
Under PRC GAAP 168,364,330.94 67,392,307.11 2,026,162,967.27 1,854,911,284.10
Items and totals adjusted according to IFRS:
Total difference between
PRC GAAP and IFRS
0.00 0.00 0.00 0.00
Explanation on difference
between PRC GAAP and
IFRS
No difference
Supplemental income statement calculated in accordance with Editing and Reporting
Rules Regarding Information Disclosure for Companies Publicly Issuing Securities (No.
9) promulgated by CSRC:
ROE (%) EPS (RMB Yuan/share)
Profit for the report period
Weighted average Basic EPS Diluted EPS
Net profit attributable to shareholders holding
ordinary shares of the Company 8.68 0.31 0.31
Net profit attributable to shareholders holding
ordinary shares of the Company after deducting
non‐recurring gains and losses
8.72 0.31 0.31Section III Changes in Share Capital and Shares Held by Principal
Shareholders
I. Statement on changes in shares
Before the change Increase/decrease during the change (+/‐) After the change
Amount
Proportio
n
Issuanc
e of
new
shares
Bonus
share
s
Capitalization
of public
reserve
Others Subtotal Amount
Proportio
n
I. Shares subject to
moratorium
8,489,520 1.55% 8,489,520 1.55%
1. Shares held by state
2. Shares held by
state‐owned corporation
3. Shares held by other
domestic investors
8,489,520 1.55% 8,489,520 1.55%
Including: shares held by
domestic non
stated‐owned corporation
8,296,978 1.51% 8,296,978 1.51%
Shared held by domestic
natural person 192,542
0.04%
192,542
0.04%
4. Shares held by overseas
investors
Including: shares held by
overseas corporation
Shares held by overseas
natural person
5. Shares held by senior
executives
II. Shares not subject to
moratorium
539,166,24
0
98.45%
539,166,2
40
98.45%
1. RMB ordinary shares
348,130,36
8
63.57%
348,130,3
68
63.57%
2. Domestically listed
overseas shares
191,035,87
2
34.88%
191,035,8
72
34.88%
3. Overseas listed foreign
shares
4. Others
III. Total shares
547,655,76
0
100.00%
547,655,7
60
100.00%II. Particulars about shares held by the top ten shareholders and the top ten
shareholders holding shares not subject to trading moratorium
Unit: Share
Total number of shareholders 26,765
Particulars about shares held by the top ten shareholders
Name of shareholders
Nature of
shareholders
Shareholding
proportion
Total number of
shares held
Number of shares
subject to moratorium
Number of shares
pledged or frozen
Guangdong Midea Electric
Appliances Co., Ltd.
Domestic
non‐state‐owned
corporation
24.01% 131,510,011
GAOLING FUND,L.P.
Foreign
corporation
7.60% 41,602,180
TITONI INVESTMENTS
DEVELOPMENT LTD.
Foreign
corporation
5.63% 30,851,714
Wuxi Finance Bureau
State‐owned
corporation
4.03% 22,057,657
BOCI SECURITIES LIMITED
Foreign
corporation
3.84% 21,005,286
ICBC‐Penghua High Quality
Governance Securities
Investment Fund (LOF)
Domestic
non‐state‐owned
corporation
3.12% 17,077,396
Agricultural Bank of
China—Bank of
Communications Schroders
Pioneer Stock Securities
Investment Fund
Domestic
non‐state‐owned
corporation
1.73% 9,481,400
Agricultural Bank of
China—Bank of
Communications Schroders
Selected Stock Securities
Investment Fund
Domestic
non‐state‐owned
corporation
1.39% 7,638,094
National Social Security 604
Portfolio
Domestic
non‐state‐owned
corporation
1.14% 6,239,192
China Construction
Bank—Yinhua Wealth Theme
Stock Securities Investment
Fund
Domestic
non‐state‐owned
corporation
1.13% 6,210,891
Particulars about the top ten shareholders holding shares not subject to moratorium
Name of shareholders
Number of shares not subject to
moratorium
Type of shares
Guangdong Midea Electric Appliances Co., Ltd. 131,510,011 RMB ordinary share
GAOLING FUND,L.P. 41,602,180 Domestically listed foreign shares
TITONI INVESTMENTS DEVELOPMENT LTD. 30,851,714 Domestically listed foreign sharesWuxi Finance Bureau 22,057,657 RMB ordinary share
BOCI SECURITIES LIMITED 21,005,286 Domestically listed foreign shares
ICBC‐Penghua High Quality Governance
Securities Investment Fund (LOF)
17,077,396 RMB ordinary share
Agricultural Bank of China—Bank of
Communications Schroders Pioneer Stock
Securities Investment Fund
9,481,400 RMB ordinary share
Agricultural Bank of China—Bank of
Communications Schroders Selected Stock
Securities Investment Fund
7,638,094 RMB ordinary share
National Social Security 604 Portfolio 6,239,192 RMB ordinary share
China Construction Bank—Yinhua Wealth Theme
Stock Securities Investment Fund
6,210,891 RMB ordinary share
Explanation on associated
relationship among the above
shareholders or
acting‐in‐concert
Guangdong Midea Electric Appliances Co., Ltd. indirectly holds 100% equities of TITONI INVESTMENTS
DEVELOPMENT LTD., which makes them parties acting in concert.
III. Number of shares held by the top ten shareholders subject to moratorium and
trading moratorium
Unit: Share
No. Name of shareholders
Number of shares
held subject to
moratorium
Date of listing for trade
Additional shares
could list for trade
Trading
moratorium
1
China Technology International Trust
Investment Ltd.
1,080,000
7 Aug. 2007
1,080,000 Note 1
2 Jiangyin Sanjin Computer Co., Ltd. 864,000 7 Aug. 2007 864,000 Note 1
3 FUSHUN SPECIAL STEEL (GROUP) CO., LTD. 864,000 7 Aug. 2007 864,000 Note 1
4 Jiangyin Shengang Hardware Casting Plant 756,000 7 Aug. 2007 756,000 Note 1
5
Yangjiang Huayang Construction Development
Co., Ltd.
648,000 7 Aug. 2007 648,000 Note 1
6
Wuxi Yuandong Cold Rolling Metal Band
Cooperation Company
540,000 7 Aug. 2007 540,000 Note 1
7
Shenzhen Shencai Securities Business
Department
345,600 7 Aug. 2007 345,600 Note 1
8
China Southern Securities Co., Ltd Nanjing
Branch
324,000 7 Aug. 2007 324,000 Note 1
9 Shenzhen Zhongxie Investment Co., Ltd. 307,440 7 Aug. 2007 307,440 Note 1
10 Shenzhen Shuangxin Investment Co., Ltd. 270,000 7 Aug. 2007 270,000 Note 1
Note 1: This company should ask for the approval of non‐tradable shareholders
paying consideration in advance on behalf of it (consideration in advance would be
repay by the relevant non‐tradable shareholders) before the Board of Directors of the
Company put the listing and trading appliance of the said shares to Shenzhen StockExchange.Section IV Particulars about Directors, Supervisors and Senior Executives
I. In the report period, there was no change on shares held by directors, supervisors
and senior executives of the Company.
II. Particulars about engagement and dismissal of directors, supervisors and senior
executives
Directors, supervisors and senior executives remained unchanged in the report
period.Section V Report of the Board of Directors
I. Discussion and analysis on operation
( ) Discussion and analysis on the overall operation Ⅰ of the Company in the report
period
In the first half of 2010, based on the main business of washing machines, the
Company strengthened and expanded the full‐automatic wave‐wheel washing
machine business and at the same time continued to expand the tumbling‐box
washing machine business. In the report period, the Company introduced into
market the three major high‐end tumbling‐box new products—the “ZEN Chunzhen”
series, the frequency‐conversion washing‐drying integration series and the intelligent
dropping series, marking its full‐scale entry into the market of high‐end tumbling‐box
washing machines.
During the report period, after a series of operational reforms, the Company’s
advantage of channel integration became increasingly noticeable, the technology
advantage played a more important role and the scale advantage started to take
shape. In addition, thanks to the recovery in the sector as a whole and the
government policies of “promoting household appliance consumption in rural areas”
and “replacing old appliances with new ones”, the Company’s washing machine
business grew significantly in the first half of 2010, generating a sales income
reaching RMB 3,276,000,000, up by 106.63% year on year. For the report period, the
Company achieved a total operating income amounting to RMB 3,634,000,000 and a
net profit attributable to shareholders of the parent company reaching RMB
168,364,300.
In order to avoid horizontal competition with the controlling shareholder and expand
its production capacity, the Company launched significant asset reorganization in Oct.
2009. The Company is planning to issue A‐shares to Midea Electric Appliances to
acquire 69.47% equities of Hefei Royalstar Washing Equipment Manufacturing Co.,
Ltd. valuing USD 94,145,000 held by Midea Electric Appliances. This project has been
approved by the Board of Directors and the Shareholders’ General Meeting on
relevant meetings. At present, it has been conditionally approved by CSRC and will be
implemented upon the arrival of the final reply from CSRC.
In the coming months, the Company will, according to the development strategy of
“insisting on the main business of washing machines and growing bigger and
stronger in this business”, continue to promote integration of a professional platform
and resources, allocate internal operating responsibilities to specific entities, fully
decentralize power and fully vitalize the main operation body. And it will also work
on the third and fourth markets in a deeper manner, actively expand the overseas
market and increase the proportion of export sales. Meanwhile, the Company will
further reinforce investment to increase the production capacity so as to ensure a
steady growth in its sales income and profit.
Main items of accounting statements and financial indices:
Item Current period Amount at year‐begin Rate of change
Monetary funds 129,584.63 85,244.90 52%Notes receivable 193,260.58 60,449.97 220%
Prepayment 17,210.83 6,624.33 160%
Long‐term deferred expenses 2,786.75 1,677.37 66%
Short‐term borrowings ‐ 100.00 ‐100%
Notes payable 83,912.37 1,400.00 5894%
Accounts payable 224,580.95 155,244.31 45%
Estimated liabilities 1,804.01 1,121.35 61%
Other non‐current liabilities 517.63 367.90 41%
Item Current period
Same period of last
year
Rate of change
Total operating income 363,413.48 190,248.86 91%
Operating cost 306,351.89 149,654.86 105%
Administrative expenses 12,356.32 6,768.18 83%
Financial expenses 1,122.15 221.28 407%
Asset impairment loss ‐402.98 467.21 ‐186%
Investment income 43.76 ‐2,287.16 ‐102%
Non‐operating income 1,048.63 1,942.82 ‐46%
Non‐operating expenses 1,121.45 724.65 55%
Income tax expenses 3,658.60 895.47 309%
Minority shareholder income and
loss
1,317.63 ‐468.40 ‐381%
Net cash flows from operating
activities
50,285.05 10,386.93 384%
Net cash flows from investing
activities
‐5,741.74 3,487.09 ‐265%
Net cash flows from financing
activities
‐203.58 ‐801.01 ‐75%
Analysis to reasons for changes of the items above:
(1) Monetary funds increased because some notes receivable were discounted for
cash to accelerate the flow of funds and reduce financing cost in the report period.
(2) Notes receivable increased due to a significant growth of the domestic sales
income.
(3) Prepayment increased because the construction was not finished and
prepayments to relevant construction suppliers were not written off.
(4) Long‐term deferred expenses increased because the Company strengthened new
product development in the report period and the relevant expenses on modules
were up.
(5) Short‐term borrowings decreased because borrowings were paid off in the report
period to reduce the financing cost.
(6) Notes payable increased because notes payable in the report period werebanker’s acceptance bills drawn by the Company.
(7) Accounts payable increased because purchases increased due to sales growth.
(8) Estimated liabilities increased because the product quality deposits were
estimated, upon measurement, to increase in the report period as compared with
the previous period.
(9) Other non‐current liabilities increased due to government subsidies for the
Company’s technological remolding project.
(10) Total operating income increased because the distribution network constantly
promoted by the Company produced a good result and the channel network grew
mature quickly.
(11) Operating cost increased due to the income growth.
(12) Administrative expenses increased because the income grew and the
administrative cost and scope expanded.
(13) Financial expenses increased because some notes receivable were discounted
for cash in the report period and exchange rates fluctuated.
(14) Asset impairment loss decreased because accounts receivable were collected in
time at the year‐begin and accounts receivable within one year decreased as
compared with the year‐begin.
(15) Investment income decreased because at the same period of last year, a great
loss came from subsidiary disposal and there were no such events in the current
period.
(16) Non‐operating income decreased because at the same period of last year, a
great income was obtained from fixed asset disposal.
(17) Non‐operating expenses increased because old equipments were renewed to
improve the production efficiency and expenses increased for scrap materials.
(18) Income tax expenses increased due to a considerable profit growth.
(19) Minority shareholder income and loss decreased because subsidiaries achieved
profits in the current period.
(20) Net cash flows from operating activities increased because some notes
receivable were discounted in the report period, which generated inflow of more
goods payments.
(21) Net cash flows from investing activities decreased because the invested
companies did not distribute profit in the report period and investment into fixed
assets grew as compared with the same period of last year.
(22) Net cash flows from financing activities decreased because original borrowings
were repaid and no new loans were borrowed in the report period.
(Ⅱ) Main business scope and operation status
1. Main businesses classified according to industries or products
Unit: RMB Ten thousand
Main businesses classified according to industries
Industries/ products
Operation
income
Operation cost
Gross profit rate
(%)
Increase/
decrease of
operation
Increase/
decrease of
operation cost
Increase/
decrease of gross
profit rate overincome over
same period of
last year (%)
over same
period of last
year (%)）
same period of
last year (%)
Household appliances 357,869.80 301,361.91 15.79% 95.30% 109.70% ‐5.78%
Other industries 5,543.69 4,989.98 9.99% ‐20.90% ‐16.07% ‐5.18%
Main businesses classified according to products
Washing machines 327,616.01 272,608.30 16.79% 106.63% 128.92% ‐8.10%
Electric machines and
computer boards
4,442.49 4,336.40 2.39% ‐20.43% ‐14.09% ‐7.20%
Others 31,354.98 29,407.19 6.21% 275.54% 283.21% 1.88%
2. Main businesses classified according to regions
Unit: RMB Ten thousand
Regions Operation income
Increase/ decrease over same period
of last year (%)
Domestic 284,977.00 107.66%
Overseas 78,436.49 47.94%
III. Actual progress and profits of investments in report period
1. In the report period, the Company did not raise funds for use, nor there occurred
such funds carried down from previous periods to the report period.
2. Use of non‐raised funds
Up until now, the accumulative input into the new industrial park project stands at
about RMB 454,390,000. And the total actual investment for the project is RMB
543,690,000.
Section VI Significant Events
I. Corporate governance
The Company operated strictly in line with regulation relating to modern enterprise
system, and there was no difference between actuality of corporate governance and
document of relevant requirements from CSRC.
II. The Company did not distribute profits or turn public reserves to share capital for
the interim period of 2010.
III. In the report period, the Company was not involved in any significant lawsuits or
arbitrations, nor there existed such lawsuits or arbitrations carried down from
previous periods to the report period.
At present, the Company is in progress of assets reorganization: the Company issued
A share to GD Midea Holding Co., Ltd to acquire 69.47% equity of Hefei Rongshida
Washing Equipment Manufacturing Co., Ltd with consideration of USD 94,145,000,
which was approved by the board meeting and the shareholder’s general meeting.
The acquisition has been checked and approved by CSRC with condition and will
execute with financial approval from CSRC.V. Significant related transactions in report period
1. The Proposal on Routine Related Transactions for 2010 was reviewed and
approved at the 5th Meeting of the 6th Board of Directors held in Wuxi on 4 Mar. 2010.
According to the said proposal, the Company was estimated to purchase goods
valued at RMB 1,816 million from and sell goods equal to RMB 1,238 million to its
related parties, and receive logistic transport service totaled RMB 40 million in the
year 2010.
2. The Proposal on New Routine Related Transactions in 2010 and the Proposal on a
Related Transaction Concerning Trademark License were reviewed and approved at
the 8th Meeting of the 6th Board of Directors held in Wuxi on 24 Aug. 2010. A related
transaction involving RMB 21 million was expected to occur between the Company
and Hefei Midea Materials Supplying Co., Ltd, related transaction with overseas
branch companies totaled EUD 4,200,000. And the Trademark License Contract was
signed between the Company and Little Swan (Jinzhou) Electric Appliance Co., Ltd.,
authorizing the latter to use the Company’s trademark on its refrigerators and
freezers.
For more details of the aforesaid related transactions, please refer to the public
notices on related transactions of the Company published on Securities Times and
Hong Kong Ta Kung Pao.
3. Please refer to the financial report for other related transactions.
VI. Significant contracts and their implementation:
1. In the report period, the Company did not hold in trust, contract or lease assets of
other companies, or vice versa.
2. Provisions of guarantees in report period
Unit: RMB’0000 Yuan
Guarantees provided for external parties (excluding guarantees provided for subsidiaries)
Name of the
guaranteed
Date and No.
of Relevant
public notice
Guarant
ee line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementa
tion
accomplishe
d or not
Guarantee for
related parties
or not
Total external guarantees lines
examined and approved in the
reporting period (A1)
0.00
Total external guarantees
occurred in the reporting period
(A2)
0.00
Total external guarantee lines
examined and approved at the
period end (A3)
0.00
Balance of actual guarantees at
the period end (A4)
0.00
Guarantees provided for subsidiary companies
Name of the
guaranteed
Date and No.
of Relevant
public notice
Guarant
ee line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementa
tion
accomplishe
d or not
Guarantee for
related parties
or notWuxi Little Swan
General Electrical
Appliance Co., Ltd.
Mar. 2010
No. 2010‐09
3,600.00 8 Mar. 2010 588.20
Credit
guarantee
30 Apr. 2011
No No
Total guarantees lines for
subsidiaries examined and
approved in the reporting period
(B1)
7,600.00
Total guarantees for subsidiaries
occurred in the reporting period
(B2)
588.20
Total guarantee lines for
subsidiaries examined and
approved at the period end (B3)
7,600.00
Balance of actual guarantees at
the period end (B4)
588.20
Total guarantees of the Company (Total of the two above)
Total guarantees lines examined
and approved in the reporting
period (A1+B1)
7,600.00
Total guarantees occurred in the
reporting period (A2+B2)
588.20
Total guarantees lines examined
and approved at the report period
(A3+B3)
7,600.00
Total balance of actual
guarantees at the period end
(A4+B4)
588.20
Proportion of total actual guarantee amount (A4+B4) in net assets
of the Company
0.29%
Among which:
Amount of guarantees provided for shareholders, actual controller
and other related parties (C)
0.00
Amount of debt guarantees provided directly or indirectly for
parties with asset‐liability ratio exceeding 70% (D)
0.00
Proportion of total guarantee amount exceeding 50% of the
Company’s net assets (E)
0.00
Total amount of the above three guarantees (C+D+E) 0.00
Explanation on possibility of taking several and joint liability
involving immature guarantees
Naught
VII. In the report period, Guangdong Midea Electric Appliances Co., Ltd. (herein after
refer to as “Midea Electric Appliance”) committed that it would not sell over 5% of
the Company’s shares via Shenzhen Stock Exchange within six months since the
cancellation of trading moratorium on relevant shares; where Midea decreased 5% or
over 5% shares of the Company held by it within six months since the first reduction
of holdings, Midea would disclose the suggestive public notice on selling shares
subject to trading moratorium through the Company two trading days before its first
reduction of holdings.
Commitments made in the purchase report or the report on equity changes: Midea
Electric Appliance and actual controller will not use the control power to Wuxi Little
Swan Co., Ltd. to carry out operating activities with harm to rights and interests of
the Company and its other shareholders, and adopt appropriate ways to settle such
problem as horizontal competition among Midea Electric Appliance, the actual
controller and the Company within three years after finishing the said transaction.Commitment made in significant assets reorganization: 1) Commitment on avoid of
horizontal competition. Midea Electric Appliance and Mr. He Xiangjian promised and
ensured that: (1) Up to date of signature of commitment letter, Midea Electric
Appliance, Mr. He Xiangjian and his other holding subsidiaries company didn’t
directly or indirectly engage producing or operating activities which was the same or
similar to current main business of Little Swan and composed material horizontal
competition excluding Hefei Rongshida Washing Equipment Manufacturing Co., Ltd &
its subsidiary company and Little Swan & its subsidiary company. (2) After this
transaction, when shareholders and actual controller remained unchanged, Midea
Electric Appliance, Mr. He Xiangjian and other subsidiary companies under his control
excluding the Company and the Company’s subordinate company will not increase
business or establish new subsidiary company engaged in business same, similar of
composing material horizontal competition to the Company. (3) In case that Midea
Electric Appliance and other enterprise controlled by Mr. He Xiangjian excluding the
Company and its subsidiary company acted against the above commitment, profit
from relevant business will contribute to the Company.
2) Commitment on standardize related transaction. Midea Electric Appliance and Mr.
He Xiangjian promise that when there will be inevitable related transactions or with
reasonable reason after the completion of the transaction, they will follow principal
of fair, reasonable and marketization to confirm and sign relevant agreement on
relating transaction and ensure interest of the Company and other shareholders. In
case that Midea Electric Appliance and Mr. He Xiangjian act against the above
promise or ensure, damaging interest of the Company and other shareholders, they
will bear relevant responsibility according to relevant provisions.
3) Commitment on share lock. Midea Electric Appliance committed that they will not
transfer any shares of the Company held within 36 months since the end of
non‐public offering shares of the Company.
4) Commitment on attribution of gains and losses from underlying assets in transition
period. Midea Electric Appliance committed that profit from underlying assets and
relevant business would attribute to the Company while loss would bear by Midea
Electric Appliance from benchmark day to the date of completion of transfer of
underlying assets.
VIII. In the report period, the Company, the Board of Directors and the directors
received no investigations, administrative punishment and criticism by circular from
CSRC, and no punishment from other administrative authorities or open criticism
from the stock exchange.
IX. Special explanation and independent opinions of independent directors on
related parties’ fund occupation and external guarantees provided by the Company
According to the Circular of CSRC on Certain Issues Concerning Regulating Capital
Flows between Listed Companies and Their Related Parties and Provision of External
Guarantees by Listed Companies (ZJF Zi [2003] No.56) and the Circular on Further
Regulating Capital Flows between Listed Companies and Principal Shareholders andOther Related Parties ((SZJGS Zi [2008] No.325), the independent directors
conducted careful examination on the related parties’ capital occupation of the
Company and provision of external guarantees by the Company, and issued their
relevant special explanation and independent opinions as follows:
1. In the report period, there existed no capital occupation by the principal
shareholder and other related parties of the Company; there existed no such capital
flows or occupation as undisclosed by the Company; nor there occurred such capital
flows or occupation in disguised form.
2. As of 30 Jun. 2010, the Company didn’t provide guarantees for controlling
shareholders or related parties.
3. As of 30 Jun. 2010, the Company didn’t provided the debt guarantees directly or
indirectly for parties with asset‐liability ratio over 70%.
X. Equity of other listed companies held by the Company
Unit: (RMB) Yuan
Stock
Code
Short form of
stock
Amount of initial
investment
Proportion in
equity of the
held party
Book value
at
period‐end
Profits or
losses
in report
period
Changes of
owners’
equity in
report
period
Subject of
accounting
Source
400038 Huaxin Gaoke 100,300.00 0.01% 315,168.00 0.00 1,999.20
Financial
assets
available for
sale
Non‐public
issue
Total 100,300.00 ‐ 315,168.00 0.00 1,999.20 ‐ ‐
XI. Researches, interviews and visits received in report period
Reception
time
Reception place Reception way Visitor
Main discussion and materials
provided by the Company
9 Mar. 2010
Meeting Room of
the Company
Field research
Ping An Securities, Penghua Fund
Management Co., Ltd., Bosera
Funds and Shanghai Securities
Overall operation of the
Company
10 Mar. 2010
Meeting Room of
the Company
Field research
Fullgoal Fund Management Co.,
Ltd, Xiangcai Securities, Guosen
Securities and China Southern
Fund
Overall operation of the
Company
10 Mar. 2010
Meeting Room of
the Company
Field research Caitong Securities
Overall operation of the
Company
11 Mar. 2010
Meeting Room of
the Company
Field research
Morgan Stanley, Everbright
Securities and Haitong Securities
Overall operation of the
Company
11 Mar. 2010
Meeting Room of
the Company
Field research
Guodu Securities, Northeast
Securities and Guoyuan
Securities
Overall operation of the
Company
16 Mar. 2010 Meeting Room of Field research Mitsubishi UFJ Securities Co., Ltd Overall operation of thethe Company and Haitong Securities Company
17 Mar. 2010 By telephone
Telephone
communication
Nezu Fund and Morgan Stanley
Overall operation of the
Company
18 Mar. 2010
Meeting Room of
the Company
Field research Invesco and Invesco Greatwall
Overall operation of the
Company
26 Mar. 2010
Meeting Room of
the Company
Field research
Bank of Communications
Schroder, CICC, Western
Securities, Cinda Securities and
Shanghai Congrong Investment
Overall operation of the
Company
2 Apr. 2010
Meeting Room of
the Company
Field research China Merchants Securities
Overall operation of the
Company
19 Apr. 2010 Other site Field research Och‐Ziff Capital
Overall operation of the
Company
16 Apr. 2010
Meeting Room of
the Company
Field research Sinolink Securities
Overall operation of the
Company
28 Apr. 2010
Meeting Room of
the Company
Field research
Donghai Securities and Oriental
Securities
Overall operation of the
Company
30 Apr. 2010
Meeting Room of
the Company
Field research Zeal Asset Management
Overall operation of the
Company
17 May 2010
Meeting Room of
the Company
Field research
Bank of Communications
Schroders
Overall operation of the
Company
24 May 2010
Meeting Room of
the Company
Field research
Tocqueville Asset Management
L.P.
Overall operation of the
Company
1 Jun. 2010
Meeting Room of
the Company
Field research Zheshang Securities
Overall operation of the
Company
8 Jun. 2010
Meeting Room of
the Company
Field research
ICBC Credit Suisse Assets
Management Co., Ltd
Overall operation of the
Company
XII. Information disclosed by the Company in report period
No. Contents of public notice
Date of
disclosure
Newspapers for disclosure
2010‐01 Public Notice on Earnings Estimate 5 Jan. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐02
Suggestive Public Notice on the 1st Provisional
Shareholders’ General Meeting 2010
6 Jan. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐03
Public Notice on Resolutions of the 1st Provisional
Shareholders’ General Meeting
6 Jan. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐04 Public Notice on Resignation of Supervisor 10 Feb. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐05 Public Notice on Electing Staff Representative Supervisor 10 Feb. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐06
Public Notice on Application on Issuing Shares to Purchase
Assets Being Accepted by CSRC
10 Feb. 2010
Securities Times and Hong Kong Ta
Kung Pao2010‐07
Public Notice on Application from GD Midea Holding Co.,
Ltd on Postponing Submitting Acquisition Report and
Supplementary and Correction Materials for Exemption of
Obligation of Tender Offer
3 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐08
Public Notice on Resolutions of the 5th Meeting of the 6th
Board of Director
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐09
Public Notice on Accumulative Amount of Guarantees
Provided for Holding Subsidiaries
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐10 Public Notice on Routine Related Transaction in 2010 8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐11
Public Notice on Withdrawal of Provisions for Assets
Impairment
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐12
Summary of 2009 Annual Report of Wuxi Little Swan Co.,
Ltd.
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐13
Notice on Holding the Annual Shareholders’ General
Meeting 2009
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐14
Public Notice on Resolutions of the 4th Meeting of the 6th
Supervisory Committee
8 Mar. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐15
Public Notice on Resolutions of the Annual Shareholders’
General Meeting 2009
6 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐16
Public Notice on Resolutions of the 6th Meeting of the 6th
Board of Directors
13 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐17
Public Notice on Transferring Shares of Wuxi Little Swan
Huayin Electrical Appliance Co., Ltd & Related Transaction
13 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐18
Public Notice on Resolutions of the 7th Meeting of the 6th
Board of Directors
23 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐19 The 1st Quarterly Report 2009 23 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
201020
Public Notice on Terminating transfer of Equity of Wuxi
Little Swan Huayin Electrical Appliance Co., Ltd & Progress
in Related Transaction
23 Apr. 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐21
Public Notice on Trading Suspension for Examination and
Check of Significant Assets Reorganization by CSRC Merger
and Reorganization Commission.
19 May 2010
Securities Times and Hong Kong Ta
Kung Pao
2010‐22
Public Notice on Significant Assets Reorganization Being
Approved by CSRC Merger and Reorganization
Commission with Condition
24 May 2010
Securities Times and Hong Kong Ta
Kung Pao
All the above public notices can be found at the website designated by CSRC
(http://www.cninfo.com.cn).
Section VII Financial Report
Please see the attachments.Sectoin VIII Documents Available for Reference
I. Text of Interim Report 2010 with signature of Chairman of the Board of Directors.
II. Accounting statements with signatures and seals of legal representative, chief
financial officer and principal of accounting institute.
III. Originals of all documents and public notices of the Company ever disclosed on
Securities Times and Hong Kong Ta Kung Pao in report period.
Wuxi Little Swan Co., Ltd.
Chairman of the Board: Fang Hongbo
26 Aug. 2010
Attachment: Semi‐annual Financial report of 2010 (Unaudited)Balance sheet
Prepared by Wuxi Little Swan Co., Ltd. 30 Jun. 2010 Unit: RMB Yuan
Balance at the period‐end Balance at the year‐begin
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 1,295,846,260.40 1,133,368,149.44 852,448,970.81 743,637,877.78
Settlement fund reserve
Dismantle fund
Transaction financial asset
Notes receivable 1,932,605,807.32 1,827,894,059.72 604,499,731.15 571,266,822.03
Account receivable 798,101,743.23 564,107,359.98 874,635,649.01 748,060,219.84
Account paid in advance 172,108,348.25 161,580,745.13 66,243,273.07 60,519,177.91
Premium receivables
Receivables from reinsurers
Reinsurance contract reserve receivables
Interest receivable
Dividend receivable
Other accounts receivable 18,670,194.95 15,142,437.67 25,361,277.23 17,978,669.16
Financial assets purchased under agreements to
resell
Inventories 338,413,144.22 254,760,225.24 440,416,228.67 326,373,717.04
Non‐current assets due within 1 year
Other current assets 21,855,233.97 21,234,853.58 17,326,441.89 17,326,441.89
Total current assets 4,577,600,732.34 3,978,087,830.76 2,880,931,571.83 2,485,162,925.65
Non‐current assets:
Loans and advance
Available for sale financial assets 315,168.00 315,168.00 312,816.00 312,816.00
Held to maturity investments
Long‐term account receivable
Long‐term equity investment 144,462,637.56 791,955,594.28 144,060,027.63 780,102,984.35
Investing property
Fixed asset 608,502,384.62 511,499,009.30 591,877,098.11 492,656,905.52
Project in construction 26,697,578.91 22,398,224.53 23,101,817.68 23,101,817.68
Engineering material
Fixed asset disposal
Bearer biological asset
Oil assets
Intangible assets 139,472,385.86 113,987,089.43 141,527,568.63 115,411,645.61
Development expense
Goodwill
Long‐term deferred expense 27,867,467.64 20,027,385.97 16,773,746.67 7,062,716.07
Deferred tax assets 95,401,093.12 98,127,519.28 80,045,127.37 82,168,839.89
Other non‐current assetsTotal of non‐current assets 1,042,718,715.71 1,558,309,990.79 997,698,202.09 1,500,817,725.12
Total assets 5,620,319,448.05 5,536,397,821.55 3,878,629,773.92 3,985,980,650.77
Current liabilities:
Short‐term borrowings 1,000,000.00
Borrowing from Central Bank
Deposits and due to banks and other financial
institutions
Borrowed inter‐bank funds
Transaction financial liabilities
Notes payable 839,123,651.32 839,123,651.32 14,000,000.00
Account payable 2,245,809,458.82 1,838,832,017.71 1,552,443,101.69 1,293,432,088.39
Account received in advance 170,850,155.45 130,594,596.71 135,076,044.68 107,001,841.73
Financial assets sold under agreements to
repurchase
Handling charges and commission payable
Employees’ compensation payable 67,353,736.34 38,237,866.97 66,748,481.77 39,463,034.59
Tax payable 118,089,421.65 107,390,823.96 116,221,316.66 111,804,042.76
Interest payable
Dividend payable 2,669,154.60 2,669,154.60 2,967,922.95 2,917,374.60
Other account payable 68,376,834.68 50,341,921.24 60,542,744.72 36,210,266.59
Due to reinsurers
Insurance contract reserve
Amount for acting trading securities
Amount payables under security underwriting
Non‐current liabilities due within 1 year
Other current liabilities
Total current liabilities 3,512,272,412.86 3,007,190,032.51 1,948,999,612.47 1,590,828,648.66
Non‐current liabilities:
Long‐term borrowings
Debentures payable
Long‐term payables
Specific purpose account payables
Provisions for contingent liabilities 18,040,050.02 11,213,500.02
Deferred tax liabilities 32,230.20 32,230.20 31,877.40 31,877.40
Other non‐current liabilities 5,176,300.00 2,100,000.00 3,679,000.00 2,400,000.00
Total non‐current liabilities 23,248,580.22 2,132,230.20 14,924,377.42 2,431,877.40
Total liabilities 3,535,520,993.08 3,009,322,262.71 1,963,923,989.89 1,593,260,526.06
Owner’s equity (or shareholder’s equity)
Paid‐in capital (or share capital) 547,655,760.00 547,655,760.00 547,655,760.00 547,655,760.00
Capital surplus 510,420,142.97 512,105,116.47 507,532,790.74 512,103,117.27
Less: Treasury Stock
Specific reserves
Reserved fund 177,769,733.30 175,549,178.65 177,769,733.30 175,549,178.65General risk provision
Retained earnings 790,317,331.00 1,291,765,503.72 621,953,000.06 1,157,412,068.79
Foreign exchange difference
Total equity attributable to owners of parent
company
2,026,162,967.27 2,527,075,558.84 1,854,911,284.10 2,392,720,124.71
Minority interest 58,635,487.70 59,794,499.93
Total owner’s equity 2,084,798,454.97 2,527,075,558.84 1,914,705,784.03 2,392,720,124.71
Total liabilities and owner’s equity 5,620,319,448.05 5,536,397,821.55 3,878,629,773.92 3,985,980,650.77
Legal representative: Fang Hongbo
Person in charge of accounting work: Ma Junxia
Person in charge of accounting firm: Zeng Rui
Income statement
Prepared by Wuxi Little Swan Co., Ltd. Jan.‐Jun. 2010 Unit: RMB Yuan
In current period The same period of last year
Items
Consolidation Parent company Consolidation Parent company
I. Total operation income 3,634,134,845.06 3,157,205,366.22 1,902,488,624.24 1,242,491,343.55
Including: Sales income 3,634,134,845.06 3,157,205,366.22 1,902,488,624.24 1,242,491,343.55
Interest income
Premium income
Handling charges and commission
income
II. Total operation cost 3,415,717,536.47 2,998,549,208.98 1,820,135,703.64 1,137,157,451.27
Including: Cost of sales 3,063,518,891.21 2,702,724,369.61 1,496,548,611.22 906,621,109.85
Interest expenses
Handling charges and commission
expenses
Surrender value
Net amount of claims
Net amount of insurance contract
reserve withdrawn
Expenditure on policy dividends
Reinsurance premium expenses
Taxes and associate charges 9,954,984.40 8,880,004.63 10,960,213.77 9,559,200.41
Selling expenses 211,488,684.04 192,933,881.48 238,060,212.18 199,659,857.85
Administrative expenses 123,563,218.78 90,795,587.14 67,681,769.63 42,513,239.53
Financial expenses 11,221,531.82 13,078,376.23 2,212,812.20 ‐1,291,036.86
Impairment loss ‐4,029,773.78 ‐9,863,010.11 4,672,084.64 ‐19,904,919.51
Add: gain from change in fair value (“‐” means
loss)
Gain from investment (“‐” means loss) 437,609.93 437,609.93 ‐22,871,620.55 ‐77,397,983.10
Including: income form investment in
affiliated enterprise and joint venturesForeign exchange difference (“‐” means loss)
III. Operation profit (“‐” means loss) 218,854,918.52 159,093,767.17 59,481,300.05 27,935,909.18
Add: non‐operation income 10,486,261.86 6,528,126.00 19,428,152.67 18,012,106.23
Less: non‐business expense 11,214,489.91 7,559,028.55 7,246,470.34 5,751,425.97
Including: loss from non‐current asset disposal
IV. Total profit (“‐” means loss) 218,126,690.47 158,062,864.62 71,662,982.38 40,196,589.44
Less: income tax expense 36,586,018.72 23,709,429.69 8,954,660.96 6,029,488.42
V. Net profit (“‐” means loss) 181,540,671.75 134,353,434.93 62,708,321.42 34,167,101.02
Attributable to owners of parent company 168,364,330.94 134,353,434.93 67,392,307.11 34,167,101.02
Minority interest 13,176,340.81 ‐4,683,985.69
VI. Earnings per share
(I) Basic earnings per share 0.31 0.12
(II) Diluted earnings per share 0.31 0.12
VII. Other composite income 1,999.20 1,999.20 4,771,758.72 4,771,758.73
VIII. Total composite income 181,542,670.95 134,355,434.13 67,480,080.14 38,938,859.75
Attributable to owners of parent company 168,366,330.14 134,355,434.13 72,164,065.83 38,938,859.75
Minority interest 13,176,340.81 ‐4,683,985.69
Legal representative: Fang Hongbo
Person in charge of accounting work: Ma Junxia
Person in charge of accounting firm: Zeng Rui
Cash flow statement
Prepared by Wuxi Little Swan Co., Ltd. Jan.‐Jun. 2010 Unit: RMB Yuan
In current period The same period of last year
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities
and rendering of service
2,073,590,067.81 1,790,512,564.15 1,208,263,335.79 734,688,522.07
Net increase of deposits from customers
and due from banks
Net increase of loans from the central bank
Net increase of funds borrowed from other
financial institutions
Cash received from premium of original
insurance contracts
Net cash received from reinsurance
business
Net increase of savings of policy holders
and investment fund
Net increase of disposal of tradable
financial assets
Cash received from interest, handling
charges and commissionsNet increase of borrowed inter‐bank funds
Net increase of buy‐back funds
Tax refunds received 37,151,515.19 24,608,080.19 16,708,784.57 213,871.82
Other cash received relating to operating
activities
14,335,417.56 7,814,217.65 34,550,122.14 20,038,257.70
Subtotal of cash inflows from operating
activities
2,125,077,000.56 1,822,934,861.99 1,259,522,242.50 754,940,651.59
Cash paid for purchase of commodities and
reception of service
1,090,436,431.55 971,095,390.82 744,274,270.56 326,371,287.06
Net increase of customer lending and
advance
Net increase of funds deposited in the
central bank and amount due from banks
Cash for paying claims of the original
insurance contract
Cash for paying interest, handling charges
and commissions
Cash for paying policy dividends
Cash paid to and for employees 153,173,392.03 110,386,480.30 100,359,470.65 62,974,956.82
Various taxes paid 178,235,319.71 149,035,934.96 140,562,476.56 117,053,274.00
Other cash paid relating to operating
activities
200,381,374.45 159,037,223.17 170,456,729.43 131,302,125.86
Subtotal of cash outflows from operating
activities
1,622,226,517.74 1,389,555,029.25 1,155,652,947.20 637,701,643.74
Net cash flows from operating activities 502,850,482.82 433,379,832.74 103,869,295.30 117,239,007.85
II. Cash Flows from investment activities:
Cash received from disposal of investments
Cash received from investment income 35,000.00 35,000.00 43,134,015.29 43,134,015.29
Net cash received from disposal of fixed
assets, intangible assets and other long‐term
assets
14,480,508.13 14,116,630.95 751,780.00 335,290.00
Net cash received from disposal of
subsidiary or other business units
9,321,975.82 47,740,028.84
Other cash received relating to
investment activities
Subtotal of cash inflows from
investment activities
14,515,508.13 14,151,630.95 53,207,771.11 91,209,334.13
Cash paid to acquire fixed assets, intangible
assets and other long‐term assets
60,482,869.95 46,102,972.03 18,336,868.12 13,182,142.16
Cash paid for investment
Net increase of pledged loans
Net cash paid to acquire subsidiaries and
other business units
11,450,000.00 11,450,000.00Other cash paid relating to investment
activities
Subtotal of cash outflows from investment
activities
71,932,869.95 57,552,972.03 18,336,868.12 13,182,142.16
Net cash flows from investment activities ‐57,417,361.82 ‐43,401,341.08 34,870,902.99 78,027,191.97
III. Cash flows from financing activities:
Cash received from absorbing investment
Including: Cash received by subsidiaries
from investment of minority interest
Cash received from borrowings 23,900,000.00
Cash received from issuance of bonds
Other cash received relating to financing
activities
Subtotal of cash inflows from financing
activities
23,900,000.00
Cash paid to repay loans 1,000,000.00 28,910,000.00
Cash paid for interest expenses and
distribution of dividends or profit
1,035,831.41 248,220.00 3,000,106.17
Including: dividends or profit paid to
minority shareholders by subsidiaries
Other cash payments relating to
financing activities
Sub‐total of cash outflows from financing
activities
2,035,831.41 248,220.00 31,910,106.17
Net cash flows from financing activities ‐2,035,831.41 ‐248,220.00 ‐8,010,106.17
IV. Effect of foreign exchange rate changes on
cash and cash equivalents
V. Net increase in cash and cash equivalents 443,397,289.59 389,730,271.66 130,730,092.12 195,266,199.82
Add: beginning balance of cash and cash
equivalents
852,448,970.81 743,637,877.78 617,998,210.34 408,475,277.00
VI. Closing balance of cash and cash
equivalents
1,295,846,260.40 1,133,368,149.44 748,728,302.46 603,741,476.82
Legal representative: Fang Hongbo
Person in charge of accounting work: Ma Junxia
Person in charge of accounting firm: Zeng RuiConsolidated statement of change in owners’ equity
Prepared by Wuxi Little Swan Co., Ltd. For the first half year of 2010 Unit: RMB Yuan
Amount for the current period
Owners’ equity attributable to parent company
Items Paid‐in capital
(or share
capital)
Capital reserve
Less:
treasur
y stock
Specific
reserves
Surplus public
reserve
Genera
l risk
reserve
Retained profits Others
Minority
interest
Total owners’
equity
I. Balance at the end of last year 547,655,760.00 507,532,790.74 177,769,733.30 621,953,000.06 59,794,499.93 1,914,705,784.03
Add: change of accounting policy
Correction of errors in previous period
Other
II. Balance at the beginning of this year 547,655,760.00 507,532,790.74 177,769,733.30 621,953,000.06 59,794,499.93 1,914,705,784.03
III. Increase/ decrease of amount in this
year (“‐” means decrease)
2,887,352.23 168,364,330.94 ‐1,159,012.23 170,092,670.94
(I) Net profit 168,364,330.94 13,176,340.81 181,540,671.75
(II) Other composite income 1,999.20 1,999.20
Subtotal of (I) and (II) 1,999.20 168,364,330.94 13,176,340.81 181,542,670.95
(III) Capital input and reduction by owners 2,885,353.03 ‐14,335,353.04 ‐11,450,000.01
1. Capital input of owners 2,885,353.03 ‐14,335,353.04 ‐11,450,000.01
2. Amount of stock payment included in
owners’ equity
3. Others
(IV) Profit distribution
1. Withdrawing surplus public reserve
2. Withdrawing general risk reserve
3. Distribution to owners (or shareholders)
4. Others
(V) Internal carrying forward of owners’
equity
1. New increase of capital (or share capital)
from capital reserves
2. Converting surplus reserves to capital (or
share capital)
3. Surplus reserves make up losses
4. Others(VI) Specific reserves
1. Appropriated in current period
2. Used in current period
IV. Balance at the end of this period 547,655,760.00 510,420,142.97 177,769,733.30 790,317,331.00 58,635,487.70 2,084,798,454.97
Consolidated statement of change in owners’ equity (continued)
Amount of last year
Owners’ equity attributable to parent company
Items Paid‐in capital
(or share
capital)
Capital reserve
Less:
treasury
stock
Specific
reserves
Surplus public
reserve
General
risk
reserve
Retained profits Others
Minority
interest
Total owners’
equity
I. Balance at the end of last year 547,655,760.00 480,464,703.04 153,321,373.03 426,704,375.03 ‐1,829,651.98 89,480,681.83 1,695,797,240.95
Add: change of accounting policy
Correction of errors in previous period
Other
II. Balance at the beginning of this year 547,655,760.00 480,464,703.04 153,321,373.03 426,704,375.03 ‐1,829,651.98 89,480,681.83 1,695,797,240.95
III. Increase/ decrease of amount in this
year (“‐” means decrease)
41,106,823.80 ‐2,487,569.73 67,392,307.11 1,829,651.98 ‐33,883,885.08 73,957,328.08
(I) Net profit 67,392,307.11 ‐4,683,985.69 62,708,321.42
(II) Other composite income 41,106,823.80 ‐2,487,569.73 1,829,651.98 40,448,906.05
Subtotal of (I) and (II) 41,106,823.80 ‐2,487,569.73 67,392,307.11 1,829,651.98 ‐4,683,985.69 103,157,227.47
(III) Capital input and reduction by owners ‐29,199,899.39 ‐29,199,899.39
1. Capital input of owners
2. Amount of stock payment included in
owners’ equity
3. Others ‐29,199,899.39 ‐29,199,899.39
(IV) Profit distribution
1. Withdrawing surplus public reserve
2. Withdrawing general risk reserve
3. Distribution to owners (or
shareholders)
4. Others
(V) Internal carrying forward of owners’
equity
1. New increase of capital (or sharecapital) from capital reserves
2. Converting surplus reserves to capital
(or share capital)
3. Surplus reserves make up losses
4. Others
(VI) Specific reserves
1. Appropriated in current period
2. Used in current period
IV. Balance at the end of this period 547,655,760.00 521,571,526.84 150,833,803.30 494,096,682.14 55,596,796.75 1,769,754,569.03
Legal representative: Fang Hongbo Person in charge of accounting work: Ma Junxia Person in charge of accounting firm: Zeng Rui
Statement on change in owners’ equity of parent company
Prepared by Wuxi Little Swan Co., Ltd. For the first half year of 2010 Unit: RMB Yuan
Amount for the current period
Items Paid‐in capital (or
share capital)
Capital reserve
Less: treasury
stock
Specific
reserve
s
Surplus public
reserve
General risk
reserve
Retained profit
Total owners’
equity
I. Balance at the end of last year 547,655,760.00 512,103,117.27 175,549,178.65 1,157,412,068.79 2,392,720,124.71
Add: change of accounting policy
Correction of errors in previous periods
Others
II. Balance at the beginning of this year 547,655,760.00 512,103,117.27 175,549,178.65 1,157,412,068.79 2,392,720,124.71
III. Increase/ decrease of amount in this year (“‐” means
decrease)
1,999.20 134,353,434.93 134,355,434.13
(I) Net profit 134,353,434.93 134,353,434.93
(II) Other composite income 1,999.20 1,999.20
Subtotal of (I) and (II) 1,999.20 134,353,434.93 134,355,434.13
(III) Capital input and reduction by owners
1. Capital input of owners
2. Amount of stock payment included in owners’ equity
3. Others
(IV) Profit distribution
1. Withdrawing surplus public reserve
2. Withdrawing general risk reserve3. Distribution to owners (shareholders)
4．Others
(V) Internal carrying forward of owners’ equity
1. New increase of capital (or share capital) from capital
reserves
2. Converting surplus reserves to capital (or share capital)
3. Surplus reserves make up losses
4. Others
(VI) Specific reserves
1. Appropriated in current period
2. Used in current period
IV. Balance at the end of this period 547,655,760.00 512,105,116.47 175,549,178.65 1,291,765,503.72 2,527,075,558.84
Statement on change in owners’ equity of parent company (continued)
Amount of last year
Items Paid‐in capital (or
share capital)
Capital reserve
Less: treasury
stock
Specific
reserves
Surplus public
reserve
General risk
reserve
Retained profit
Total owners’
equity
I. Balance at the end of last year 547,655,760.00 483,969,863.67 148,613,248.65 914,988,698.82 2,095,227,571.14
Add: change of accounting policy
Correction of errors in previous periods
Others
II. Balance at the beginning of this year 547,655,760.00 483,969,863.67 148,613,248.65 914,988,698.82 2,095,227,571.14
III. Increase/ decrease of amount in this year (“‐” means
decrease)
36,856,094.70 34,167,101.03 71,023,195.73
(I) Net profit 34,167,101.03 34,167,101.03
(II) Other composite income 36,856,094.70 36,856,094.70
Subtotal of (I) and (II) 36,856,094.70 34,167,101.03 71,023,195.73
(III) Capital input and reduction by owners
1. Capital input of owners
2. Amount of stock payment included in owners’ equity
3. Others
(IV) Profit distribution
1. Withdrawing surplus public reserve
2. Withdrawing general risk reserve
3. Distribution to owners (shareholders)4．Others
(V) Internal carrying forward of owners’ equity
1. New increase of capital (or share capital) from capital
reserves
2. Converting surplus reserves to capital (or share
capital)
3. Surplus reserves make up losses
4. Others
(VI) Specific reserves
1. Appropriated in current period
2. Used in current period
IV. Balance at the end of this period 547,655,760.00 520,825,958.37 148,613,248.65 949,155,799.85 2,166,250,766.87
Legal representative: Fang Hongbo Person in charge of accounting work: Ma Junxia Person in charge of accounting firm: Zeng RuiNOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
As of 30 June 2010
Note I Corporate information
Wuxi Little Swan Ltd. (hereinafter referred to as “the Company”) was formerly a
state‐collectively–owned enterprises founded in 1958 in Jiangsu Province of the People’s Republic
of China (the “PRC”). It was reorganized into a joint stock limited company in 1993 and registered
in Wuxi, Jiangsu. The company and its subsidiaries are collectively referred to as the Group.
1. Company profile
Registered Address: No. 1 Hanjiang Road, National High‐tech Industrial Development Zone,
Wuxi
Office Address: No. 18, Changjiang South Road, Wuxi, Jiangsu Province
Structure of the company: Share‐holding Company
2. Operations and business scope of the Company
Business scope: manufacture and sales of household appliances and accessories and fittings and
industrial ceramic. Export business of “Little Swan” products and technologies; import and export
business of raw and accessory materials, mechanical equipments and technologies necessary for
operation and production; development of foreign joint venture and cooperative production and
business that “process raw materials on clients’ demands, assemble parts for the clients and
process according to the clients’ samples; or engages in compensation trade”. Technical service
for household appliances; contracting foreign engineering in mechanical industry and domestic
engineering in international bidding; export of equipments and materials necessary for the said
foreign engineering; dispatching the labors necessary for the said foreign engineering to
overseas.
3. Name of the parent company
Parent company: GUANGDONG MIDEA ELECTRIC APPLIANCES CO., LTD.
Ultimate controller: Mr. He Xiangjian
4. Authorization and date of issuing the financial statements
The financial statements were approved and authorized for issue by the board of directors on
26th August 2010.Note II Summary of Main Accounting Policies and Accounting Estimate
1. Preparation basis of the financial statements
The company recognizes and measures transactions occurred according to Chinese Accounting
Standards – Basic standard and other related accounting standards, prepares the financial
statements based on accrual accounting and the underlying assumption of going concern.
2. Statement of compliance with Enterprise accounting standards
The financial statements of the company comply with the requirements of Accounting Standards;
the company's financial position, operating results, cash flows and other relevant information are
truly and completely disclosed in financial statements.
3. Accounting period
The Company's accounting year is from 1st January to 31st December for each calendar year.
4. Recording currency
The recording currency of the company is Renminbi
5. Accounting Processing method of business combination under the same control and not
under the same control
(1) The business combinations which are under the same control
The assets and liabilities that the combining party obtains in a business combination shall be
measured on the basis of their carrying amount in the combined party on the combining date. As
for the balance between the carrying amount of the net assets obtained by the combining party
and the carrying amount of the consideration paid by it (or the total par value of the shares
issued), the additional paid‐in capital shall be adjusted. If the additional paid‐in capital is not
sufficient to be offset, the retained earnings shall be adjusted.
(2) The business combinations which are not under the same control
The acquirer shall recognize the initial cost of combination under the following principles:
a) When business combination is achieved through a single exchange transaction, the cost of a
business combination is the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquiree;
b) For the business combination involved more than one exchange transaction, the cost of the
combination is the aggregate cost of the individual transactions;c) The costs directly attributed to business combination are included in the cost of combination;
The acquirer shall recognize the difference that the combination costs are over the fair value of
the identifiable net assets obtained from acquiree as goodwill; if the combination costs are less
than the fair value of the identifiable net assets obtained from acquiree, the acquirer shall
reexamine the measurement of the fair values of the identifiable assets, liabilities and contingent
liabilities obtained from the acquiree as well as the combination costs; and then after the
reexamination, the result is still the same, the difference shall be recorded in the profit and loss
of the current period.
6. Preparation method of consolidated financial statements
(1) Determination of consolidation scope
The combination scope of the consolidated financial statement will be determined on the basis
of the control.
The consolidated financial statements will be subject to the No. 33 Enterprise Accounting
Standards –Consolidated Financial Statement that was issued in February 2006. In preparing
the consolidated financial statements, all key accounts and transactions between the company
and subcompanies, subcompanies and subcompanies will be offset. The net assets of merged
subcompanies that are attributable to the minority of shareholder equities will be separately
listed in the shareholder equities of consolidated financial statements
In case the accounting policies and accounting periods of subcompanies differ from those of
parent company, the financial statements of subcompanies will be adjusted.
(2) Disposal of purchasing or selling the shares of subcompanies. The company confirms the date
when the risks and rewards related to the purchase or sales of company shares actually transfer
as the purchase date and selling date.
7. Cash and cash equivalent
For the purposes of the cash flow statement, cash refers to all cash in hand and all deposits
which are readily available for payment. Cash equivalents refer to short‐term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
8. Foreign currency transactions and translations
All foreign currency transactions during the period have been translated in to RMB at the
exchange rates stipulated by the People’s Bank of China on the first day of the month. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet date are translated
into RMB at the stipulated exchange rates at the balance sheet date.
The asset and liability items in the balance sheet will be converted at the spot exchange rate on
the preparation date of balance sheet. The resulting exchange differences arising from thesetranslations are expensed, except for those attributable to foreign currency borrowings that have
been taken out specifically for the construction of fixed assets, which are capitalized as part of
fixed assets' costs.
9. Recognition and measurement of financial instrument
(1) Classification and measurement of financial assets and financial liabilities
Based on the investment purpose and economic essence, the Company classifies the financial
assets into the following four categories:
a) financial assets at fair value through profit or loss, which refer to financial assets measured at
fair value with variations accounted into current income account.
b) sellable financial assets, which are measured on fair values at the balance sheet date, and the
variations of fair values are accounted into “Capital reserves–other capital reserves”.
c) loans and receivables; and
d) held‐to‐maturity investments.
(2) Recognition of financial instrument fair values
When there is an active market for the financial instrument, the value quoted at the active
market is adopted by the Company as the fair value.
When there isn’t any active market, fair value will be recognized by evaluation techniques.
Evaluation techniques include referencing to the prices adopted in latest voluntary transaction
between parties with full understanding of the situation, referencing to the current fair value of
other substantially similar financial instruments and other evaluation techniques.
(3) Basis of recognition and accounting of finance asset transferring
Transferring of financial assets by the Company includes the following two cases:
a) Transfer the rights of collecting the cash flow attached to the financial asset to another party;
b) Transfer the financial asset to another party, but reserve the rights to collect cash flow related
to such financial asset, and is responsible to pass the cash flow over to the final beneficiary.
(4) Impairment testing on financial assets, providing of impairment provision
At balance sheet date, the Company performs testing on the book value of financial assets other
than those measured by fair value and changes accounted into current income account.
10. Accounts Receivable
(1) Recognition and providing of bad debt provision on the individually significant receivables
Standards of the individually significant accounts receivable: the accounts receivable whose
individual amount accounts for over 10% (including 10%) of accounts receivable balance at the
end of this period or amount of the individual account receivable which is greater than RMB 10millions (and including 10 millions);
Standards of the individually significant other receivable: the other receivable whose individual
amount accounts for over 10% (including 10%) of other receivables balance at the end of this
period or amount of the individual other receivable which is greater than RMB 5 millions (and
including 5 millions).
For the individually significant receivables, the impairment test is carried on individually; the
Company provides provision for impairment loss for the amount which is measured as the
difference between the asset's carrying amount and the present value of estimated future cash
flows.
(2) Recognition and providing of bad debt provisions on the receivables which are not
individually significant, but are assessed at high risk level through credit risk combination.
Confirmation of credit risk characteristics’ combination: the receivables which are involved in
pending lawsuits or dissolution of the debtor company, and the receivables with the age of over
3years (excluding the individually significant receivables).
For the receivables which are not individually significant, but which are assessed at high risk level
through credit risk combination, the impairment test is carried on individually; the Company
provides provision for impairment loss for the amount which is measured as the difference
between the asset's carrying amount and the present value of estimated future cash flows.
(3) For the receivables which are not individually significant, as well as the individually tested
receivables which the test has not recognize any impairment loss, the company categorizes them
according to their age. On the basis of the actual loss rate of receivable account age package in
the previous year, the company will consider the current situation to determine the percentage
of providing the bad debt reserve for the following receivable account package at the end of this
period:
Aging
Provision rate for Accounts
Receivable（%）
Provision rate for Other
Receivables（%）
Within 1 year 5 5
From 1‐2 years 10 10
From 2‐3 years 20 20
From 3‐5 years 60 60
Over 5 years 100 100
(4) The company does not provide bad debt provision for receivables of subsidiaries in the
combination scope. When the subsidiaries suffer excess loss, impairment tests are carried on andimpairment provisions are provided individually.
(5) No provision of bad debts shall be accrued for no‐risky receivables, such as export tax rebate
receivable.
11. Inventories
(1) Categorizing of inventories
Inventories are those under the Company’s possession for the purpose of selling, in the process
of production, or materials and goods used in production process or providing of services,
including materials purchased, raw materials, low‐value consumables, products in process,
semi‐finished goods, stock merchandises (finished goods) and consigned goods.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured, including purchase cost, processing cost, and
other costs. Actual costs are recognized at weight average when delivered.
(3) Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the
cost and the net realisable value. At overall verification of inventories at the end of year, when
the net realisable value is lower than the cost, provisions for impairment of inventories shall be
drawn. Provisions for impairment of inventories shall be accounted according to the difference
between the cost of individual inventory items and the net realisable value. Including: for
inventories such as finished products or materials which will be directly sold, in the normal
operation, the realizable net value will be the balance of estimated selling price less sales
expenses and relative taxations; For those inventories need further processing, in the normal
operation, the realizable net value will be the balance of estimated sales price less costs to make
it finished, less estimated sales expenses, and less relative taxation. At the balance sheet day,
inventories with contract prices will be determined for realizable value separately from those
without contract prices.
Where certain items of inventory have similar purposes or end uses and relate to the same
product line produced and marketed in the same geographical area, and therefore cannot be
practicably evaluated separately from other items in that product line, costs and net realisable
values of those items may be determined on an aggregate basis. For large quantity and low value
items of inventories, cost and net realisable value are determined based on categories of
inventories.
(4) Inventory system
The Company uses perpetual inventory system. Inventories are checked periodically and thegains and losses from inventory checking are accounted into current gain/loss account.
(5) Amortizing of low‐value consumables and packaging materials
Low‐value consumables and packaging materials are amortized on on‐off amortization basis at
using.
12. Long-term share equity investment
（1）Recognition of initial investment costs
Investments of the Company in subsidiaries are valued at investment costs. For long‐term share
equity investment formed by shareholding and merger please see Note II(V). Retrospective or
retrieved investments are adjusted to the cost of long term equity investment.
For long‐term equity investment of the Company with or without common control or major
influence on the investee, and there is no quotation in an active market, and the fair value is not
reliably measured, values are on initial investment costs.
（2）Subsequent measurement and recognition of gain/loss
The Company uses cost basis in subsequent measurement of investment in subsidiaries, and
adjusted on equity basis when preparing the consolidated financial statement. Except for the
announced cash dividend or profit included in the practical cost or price when the investment
was made, the investment gains are recognized at the announced cash dividend or profit
distribution.
Subsequent measurement of long‐term equity investment in investees under common control or
significant influence is on equity basis. When the initial investment cost is larger than the share
of fair value of net asset, the initial cost of long‐term equity investment shall not be adjusted.
When the initial investment cost is lower than the share of fair value of net asset, the balance
share be accounted into current gain/loss, and the long‐term investment cost shall be adjusted
meanwhile.
After obtaining of the long‐term equity investment, the investment gain/loss is recognized
according to the share of the net gain/loss realized by the invested company, and the book value
of the long‐term equity investment shall be adjusted accordingly. The share of profit distributions
or cash dividends announced by the invested company is used to reduce the book value of the
long‐term equity investment.
If the Company has no common control or significant influence on the investee, and there is no
quotation in an active market, the fair value of the long‐term investment is not able to be reliably
measured; the subsequent measurement shall on cost basis.
（3）Basis of recognizing common control and significant influenceCommon control is the mutual control of investors over an economic action basing on a contract,
only effective when it is agreed by all of the investors who have the share of control on the
financial and business control power. When the investors hold common control over the investee,
the investee is regarded as their affiliate.
Significant influences mean an entity has the power to participate in the decision making of
another, but cannot dominate individually or jointly with other parties. When the investor may
significantly influence the investee, the investee is regarded as the affiliate.
（4） Impairment examination and providing of impairment provision
At the balance sheet day, if evidence showing that impairment occurred on the long‐term equity
investment, the recoverable amount shall be decided by the higher one of net amount of fair
value less disposal fees and the current value of predicted future cash flow. When the
recoverable amount of the long‐term equity investment is lower than the book value, the book
value will be reduced down to the recoverable amount, the reduced amount is recognized as
asset impairment loss and counted into current gain/loss account, asset impairment provision
shall be provided accordingly.
Once the long‐term equity investment impairment loss is recognized, it will not be written back
in following fiscal terms, excluding sellable financial assets, whose impairment provision can be
written back through equity accounts.
13. Investment properties
Investment real estate is measured according to the initial cost. Cost of real estate purchased
from outside includes purchasing price, tax, and other expenses directly related to the real estate;
cost of real estate constructed by the Company itself is constructed by the essential costs to
make the real estate usable. Investment properties invested by investors are booked at the value
according to the investment contract, whereas when the contract value is not fairly acceptable, it
will be booked at the fair value.
The company employs the cost mode to calculate the investment properties, and withdraws the
depreciation or amortization in accordance with the same depreciation or amortization policies
of fixed assets and intangible assets in the company.
14. Fixed assets
(1) Conditions for fixed asset recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods,
providing services, lease or for operation & management, and have more than one year of
service life.
Other than fixed assets which have already been provided depreciations in full but still in use, the
Company provides depreciations upon all of the fixed assets. Straight‐line method is adopted bythe company in depreciation.
(2) Categories, useful life, predicted salvage value, and annual depreciation rate of fixed assets
are as the followings:
Categories Useful life Salvage value Annual
depreciation ratio
Plant & buildings 30‐40 years 5% 2.38‐3.17%
Machinery equipment 10‐18 years 5% 5.28‐9.00%
Electric equipment 3‐8 years 5% 11.88‐31.67%
Transportation
vehicles 4‐12 years 5% 7.92‐23.75%
Others 5‐8 years 5% 11.88‐19%
Fit up fee 3‐8 years 12.50‐33%
（3）Impairment testing and impairment provisions
At the balance sheet day, fixed assets are accounted at the lower one of book value and
retrievable value. If the retrievable value is lower than the book value, the book value will be
deducted to the retrievable value, and the deducted amount will be recorded as asset
impairment loss into current income account, and impairment provision shall be provided
accordingly. Once the impairment loss was recognized, it will not be written back in coming fiscal
terms.
It suggests that a fix asset may be impaired if there are any of the following indications and
retrievable value of this asset needs to be calculated for impairment testing:
a) during the period, a fix asset's market value has declined significantly more than it would be
expected as a result of the passage of time or normal use during the current period;
b) evidence is available of obsolescence or physical damage of an asset;
c) the asset becomes idle, or the Company plans to discontinue or to dispose of an asset before
the previously expected date;
d) significant changes with an adverse effect on the Company have taken place during the period,
or will take place in the near future, in the technological, market, economic or legal environment
in which the Company operates or in the market to which an asset is dedicated;
e) market interest rates or other market rates of return on investments have increased duringthe period, and those increases are likely to affect the discount rate used by the company in
calculating an asset's value by predicted future cash flows, and decrease the asset's recoverable
amount materially;
f) evidence is available from internal reporting that indicates that the economic performance of
an asset is, or will be, worse than expected, for example, the net cash flow generated from fixed
assets or the operating profit (or loss) realized by fixed assets is lower (higher) than the excepted
amount, etc.; and
g) Other evidence indicates that fixed assets may be impaired.
(4) Recognition and measurement of fixed assets acquired under finance lease
The Company identifies a lease of asset as finance lease when substantially all the risks and
rewards incidental to legal ownership of the asset are transferred.
A fixed asset acquired under finance lease shall be valued at the lower of the fair value of the
leased asset and the present value of the minimum lease payments at the inception of lease.
The depreciation method of fixed assets acquired under finance lease is consistent with that for
depreciable assets owned by the Company. If the Company can reasonably confirm that it will
obtain the ownership of leased asset at the end of lease term, the leased asset shall be
depreciated during the useful life of the leased asset. If the Company cannot reasonably confirm
that it will obtain the ownership of leased asset at the end of lease term, the leased asset shall be
depreciated during shorter of the useful life of the leased asset and the lease term.
15. Construction in process
Construction in process conducted by the Company itself, its actual cost consists of essential
costs of carrying on the construction till it reaches usable status.
Cost of fixed asset which has already become usable but not settled yet, is recognized according
to estimated value, and depreciations share be provided. Upon completion of settlement, the
original estimated value shall be adjusted according to the actual cost, but the depreciations
made previously shall not be adjusted.
At the balance sheet day, fixed assets which are suspended for a long time and not possibly
resumed in coming 3 years, or strong evidence of impairment exists, are accounted at the lower
one of book value and retrievable value. If the retrievable value is lower than the book value, the
book value will be deducted to the retrievable value, and the deducted amount will be recordedas asset impairment loss into current income account, and impairment provision shall be
provided accordingly. Once the impairment loss was recognized, it will not be written back in
coming fiscal terms.
16. Borrowing expenses
(1) Capitalization of borrowing costs
The costs of borrowings designated for acquisition or construction of qualifying assets should be
capitalized as part of the cost of the assets. Assets satisfying the conditions of capitalization are
referring to the fixed assets, investment properties, and inventories that need one year or more
than one year’s construction or production process to reach the usable or sellable status.
Borrowing expenses start to be capitalized when all of the followings are satisfied:
① The capital expenditures have incurred;
② The borrowing costs have incurred;
③ The acquisition and construction activities that are necessary to bring the asset to its
expected usable condition have commenced.
Other borrowing costs that do not qualify for capitalization should be expensed off during
current period.
(2)Capitalization period of borrowing costs
Capitalization of borrowing costs should be suspended during periods in which the acquisition or
construction is interrupted abnormally, and the interruption period is three months or longer.
These borrowing costs should be recognized directly in profit or loss during the current period.
Capitalization of borrowing costs ceases when the qualifying asset being acquired or constructed
is substantially ready for its intended use. Subsequent borrowing costs should be expensed off
during the period in which they are incurred.
(3) Calculation method of capitalization for borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a
qualifying asset, the amount of borrowing costs eligible for capitalization on that asset is
determined as the actual borrowing costs incurred on that borrowing during the period less any
investment income on the temporary investment of the borrowing.
To the extent that funds are borrowed generally and used for the purpose of acquiring or
constructing a qualifying asset, the amount of borrowing costs eligible for capitalization shall be
determined by applying a capitalization rate to the weighted average of excess of accumulated
expenditures on qualifying asset over that on specific purpose borrowing. The capitalization rate
is the weighted average of the borrowing costs applicable to the borrowings of the Company that
are outstanding during the period, other than borrowings made specifically for the purpose ofacquiring or constructing a qualifying asset.
17. Intangible assets
(1) Recognition of intangible assets：
The intangible assets refer to the land‐use right, patent, non‐patent technology and software.
Intangible assets are initially measured by their costs. Intangible assets purchased are booked at
the actual cost to purchase and relative expenses.
Intangible assets inputted by investors are booked at the contract or agreement price, but if the
contract or agreement price is not fairly acceptable, it will be booked at fair value.
In case the non‐currency asset exchange is characteristic of commercial substance and the fair
values of received or delivered assets can be reliably calculated, the book values of received
intangible assets in the non‐currency asset exchange will normally be determined based on the
fair values of delivered assets, except that the accurate evidences indicate that the fair values of
received assets are more reliable. In case any non‐currency asset exchange does not meet the
above conditions, the book values of delivered assets and the payable taxes will be deemed as
the costs of received intangible assets. No profit and loss will be confirmed.
In case the intangible assets are obtained by the liability restructure to write off the liabilities of
debtors, their book values will be determined based on the fair values of this intangible asset.
Expenditures incurred during the research phase of an internal project shall be recognized as
expenses in the period in which they are incurred. Expenditures incurred during the
development phase of an internal project shall be recognized as an intangible asset if, and only if,
the Company can demonstrate all of the following:
①The technical feasibility of completing the intangible asset so that it will be available for use or
sale;
②Its intention to complete the intangible asset and use or sell it;
③The method that the intangible asset will generate probable future economic benefits. Among
other things, the Company can demonstrate the existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
④The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset;
⑤ Its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
⑥The use of the intangible products cycle more than 1 year.
Usage life and amortization of intangible assets：
The land‐use rights is amortized straightly to the useful life, from the starting date, when accept
the land‐use rights,
The patent, non‐patent technology and other intangible assets are amortized straightly to theless number among the useful life, contract years and the effective year of the law.
The amortization assigned to the related assets and current profit and loss.
For the intangible assets with the uncertain usage life, such as trade mark, no amortization will
be made.
(2) Depreciation of intangible assets：
Intangible assets without certain useful life are not amortized. They will be reconsidered in each
accounting period, if strong evidence showing that the useful life became limited, then it will be
estimated, and amortized on straight basis. On the balance sheet date, the Company measures
intangible assets according to the lower of book value and retrievable value, intangible asset
impairment provisions shall be provided at the difference of retrievable value lower than the
book value, and the corresponding impairment loss shall be recorded to current income account.
Once intangible asset impairment losses are recognized, they will not be written back in
successive fiscal periods.
① It has been replaced by other new technologies, and significantly decreased the economic
interests of the Company's ability;
② The price fell sharply in the current market, and the price is not expected to resume in the
remaining period;
③ Over the period of legal protection, but still has some value；
④ Other things that prove the assets actually impaired.
18. Long-term deferred expenses
The Company recognizes all expenses which have occurred during the period but shall be
amortized beyond one year, such as improvement expenditures of operating leased fixed assets,
as long‐term deferred expenses. The Company amortizes long‐term deferred expenses using
straight‐line method according to relevant beneficial periods or its usage life in five years if can’t
estimate the periods.
19. Expected liabilities
When responsibilities occurred in connection to contingent issues, and all of the following
conditions are satisfied, they are recognized as expected liability in the balance sheet:
① This responsibility is a current responsibility undertaken by the Company;
② Execution of this responsibility may cause financial benefit outflow from the Company;
③ Amount of the liability can be reliably measured.
Expected liabilities are initially measured at the best estimation on the expenses to exercise the
current responsibility, and with considerations to the relative risks, uncertainty, and periodic
value of currency. When the periodic value of currency is with major influence, then the best
estimation will be determined at the discount of future cash outflow. The book value of expectedliability is revised at balance sheet day, and adjustment will be made to reflect current best
estimation. Increasing of book value over time will be recognized as interest expenses
20. Revenue recognition
(1) Sales of goods
When all of the following conditions are satisfied, the sales of goods are recognized as sales
income according to the contract amount received or receivable from the buyer:
① Main risks and rewards attached to the ownership of the goods have been transferred
to the buyer;
② No succeeding power of administration or effective control is reserved which are
usually attached to ownership;
③ Amount received can be reliably measured;
④ Related financial benefit may inflow to the Company;
⑤ Relative costs, occurred or will occur, can be reliably measured;
⑥ When collection of contract payment is by differed way, and practically with financing
characters, sales income shall be recognized at the fair value of the receivable contract
amount.
(2) Providing of labor service
Labor service started and completed in a same fiscal year is recognized as income at completion.
If they are not in the same year, then use the estimation on percentage basis when it is possible.
When the labor cost occurred is expectable to be covered, the labor service income is recognized
at the cost already occurred, and recorded to labor cost as well. When the labor cost occurred is
not expectable to be covered, the cost will be recorded to current gain/loss account without
recognizing as labor service income.
(3) Demising of asset using rights
Income is recognized when the financial benefit in connection with the demising of asset using
right was received and the amount can be reliably measured.
21. Government grant
The income approach for government grants, to retrieve expense or loss of the Company in
further period, the government grants are recognized as deferred income, and shall be recorded
in profit and loss when that expense or loss occurred. To retrieve expense or loss of the Company
in current period, the government grants shall be recorded directly in current profit and loss. If
related assets were disposed before using period ended, undistributed deferred income shall be
shift to current profit and loss at once.
The Capital approach for government grants, the grant is recognized as deferred income when it
is acquired. Since the related assets achieve its intended using status, the deferred income is
amortized and recognized in profit and loss during asset’s using period.22. Differed income tax assets/ differed income tax liabilities
Based on the differences between the book values of assets and liabilities and taxation basis (for
the items that have not been confirmed as the assets and liabilities, if their taxation basis may be
determined in accordance with the taxation provisions, the difference between such taxation
basis and their book values will be applied), the deferred income tax assets or deferred income
tax liabilities will be confirmed at the applicable tax rate during the expected periods of returning
such assets or settling such liabilities.
The company will confirm the deferred income tax assets generated by the deductible temporary
difference within the limit of taxable income amount that may be obtained and used to deduct
such difference. On the preparation date of balance sheet, if enough evidences prove that the
taxable income amounts that maybe probably obtained in the future periods may be used to
deduct the deductible temporary differences, they will be confirmed as the deferred income tax
assets that have not been confirmed in the previous accounting periods.
On the preparation date of balance sheet, the company will recheck the book values of deferred
income tax assets. If the taxable income amounts cannot be obtained in the future periods to be
used to deduct the benefits of deferred income tax assets, the company will reduce the book
values of deferred income tax assets. If there is great possibility to obtain enough taxable income
amounts, the reduced amounts may be reversed.
23. Change of main accounting policies and estimations
(1) Change of accounting policies
No change of accounting policies occurred in the year.
(2) Change of accounting estimations
No change of accounting estimations occurred in the year.
24. Correction of previous accounting faults
No correction of previous accounting faults occurred in the report term.
NoteⅢ. Taxation
1. Operation tax and rate
Items Tax basis tax rate
VAT deducting value added input tax. 17%
Business tax operating revenue 5%Urban
maintenance and
construction
Payable circulating tax amount 7%
Educational fee Payable circulating tax amount 1% or 4%
Corporate income
tax Payable income tax amount 25% or 15%
Flood Control
Security Fund operating revenue 0.1%
Levee fee Payable circulating tax amount 2%
2. Notes
During the march of 2009, the company and Wuxi Little Swan GE Co., Ltd were filed as the high
technology qualification, and the qualification number is GR200932000077 and
GR200932000078.
During may of 2009, Wuxi Filin Electronics Co., Ltd was filed the high technology qualification,
and the qualification number is GR200932000397.
According to document guoshuifa 〔2008 〕111 issued by National Tax Bureau, and
guoshuihan[2008]985, the company and two subsidiaries ,Wuxi Little Swan GE Co. , Ltd and Wuxi
Filin Electronics Co., Ltd, was approved to enjoy income tax rate 15%.NOTE IV：Business combination and consolidated financial statements
1. Subsidiaries
(1) The subsidiaries obtained through the establishment or investment Unit：RMB(0’000)
Subsidiaries Categories
Reg.
Add.
Business
nature
Registered
capital
Business
scope
Paid‐in
capital
Other
essential
investment
The
proportion
of holding
shares (%)
The
proportion
of voting
rights (%)
Included in
consolidated
statements
Minority
Interest
Deductible
minority
interest
Balance of parent
company’s equity
after deducting
the difference
that loss of
minority interests
exceed equity
obtained by
minority
shareholders
Wuxi Little
Swan
General
Electric
Appliances
Co. , Ltd.
Holding
subsidiaries
Wuxi Production 2,800.00
Manufacture
and sale of
washing
machine and
dryers
1,960.00
70.00
70.00 Yes
3,470.64
Wuxi Little
Swan Driving
& Control
Development
Technology
Co. , Ltd.
Holding
subsidiaries
Wuxi R&D 500
Development
& research of
driving &
Control
450.00
100.00
100.00 Yes
9.52
Wuxi Filin
Electronics
Co. , Ltd.
Holding
subsidiaries
Wuxi Production USD
362.46
Manufacture
and sales of
computer
control
components
for washing
machine
1,962.00
73.00
73.00 Yes
2,383.39
Wuxi Huayin
Electric
Holding
subsidiaries
Wuxi Production USD 600 Manufacture
and sale of
4,876.36
100.00
100.00 Yes -Subsidiaries Categories
Reg.
Add.
Business
nature
Registered
capital
Business
scope
Paid‐in
capital
Other
essential
investment
The
proportion
of holding
shares (%)
The
proportion
of voting
rights (%)
Included in
consolidated
statements
Minority
Interest
Deductible
minority
interest
Balance of parent
company’s equity
after deducting
the difference
that loss of
minority interests
exceed equity
obtained by
minority
shareholders
Appliances
Co. , Ltd.
electric
engines for
household
appliances
and digital
engines
Wuxi Little
Swan
Washing
Machine
Co. , Ltd.
Holding
subsidiaries
Wuxi Production 4967.95
Manufacture
and sale of
commercial
washing
machine ,
dryers and
spare parts
3,725.96
75.00
75.00 Yes
- 0.00
Wuxi Meitian
Refrigerator
Market
Co., Ltd.
Holding
subsidiaries
Wuxi Marketing USD 400 Sales of
refrigerator
2,484.00
99.91
99.91 Yes
- -0.02
Jiangsu Little
Swan
Marketing
Co. , Ltd.
Holding
subsidiaries
Wuxi Marketing 41,950.00
Sales of
electrical
appliances
41,755.00
99.64
99.64 Yes
- -0.25
Wuxi Little
Swan Import
& Export
Co. , Ltd
Holding
subsidiaries
Wuxi
Import &
Export 6,500.00
Import &
export of
electric
machine
products
5,750.00
88.46
88.46 Yes
- -32.74Subsidiaries Categories
Reg.
Add.
Business
nature
Registered
capital
Business
scope
Paid‐in
capital
Other
essential
investment
The
proportion
of holding
shares (%)
The
proportion
of voting
rights (%)
Included in
consolidated
statements
Minority
Interest
Deductible
minority
interest
Balance of parent
company’s equity
after deducting
the difference
that loss of
minority interests
exceed equity
obtained by
minority
shareholders
Midaqi Little
Swan
Industry Co.,
Ltd.
Wholly‐owned
subsidiary
Malaysia Marketing USD 100
Manufacture
of washing
machine and
air
conditioners
422.47
51.00
51.00 No
(2) The subsidiaries obtained through business combination under the common control
Subsidiaries Categories
Reg.
Add.
Business
nature
Registered
capital
Business
scope
Paid‐in
capital
Other
essential
investment
The
proportion
of holding
shares (%)
The
proportion
of voting
rights (%)
Included in
consolidated
statements
Minority
Interest
Deductible
minority
interest
Balance of parent
company’s equity
after deducting the
difference that loss
of minority
interests exceed
equity
obtained by
minority
shareholders
Little Swan
(Jinzhou)
Sanjin
Electric
Appliance
Co., Ltd
Wholly‐owned
subsidiary
Jingzhou Production 1,107.02
Manufacturing
of washing
machine
1,186.94
100.00
100.00 Yes
- -2. Changing of Consolidation Scope
L.S.M. Corporation (M) SDN BHD has been stopped operation for years; the full impairment of
provisions for the company has been accrued and it has been excluded in the consolidated scope for
years.
3. The companies which are excluded from consolidation scope
No change.
4. Minority interests purchased in the reporting period
During the reporting period, the Company purchased all minority interests of Wuxi Little Swan
Huayin Electric Appliances Co., Ltd. with total payment of the price amounting to RMB 11,450,000,Note V：Notes to the consolidated financial statements (Unit: RMB yuan)
1. Monetary fund
Original currency Exchange
rate Translated to RMB Original currency Exchange
rate Translated to RMB
Cash RMB 3 20,820.66 1.00 320,820.66 2 99,347.70 1.00 2 99,347.70
USD - 6.82 - 2,549.00 6.83 1 7,405.08
JPY 8 60.78 0.08 6 6.01 4 0,885.99 0.07 3 ,016.65
Sub-total 3 20,886.67 3 19,769.43
Bank savings RMB 3 77,711,103.71 1.00 3 77,711,103.71 2 05,382,647.88 1.00 2 05,382,647.88
USD 16,521,064.62 6.82 1 12,593,592.74 1 2,337,795.05 6.83 8 4,244,932.16
GBP - 1 4.09 10.98 1 54.68
EUR 1 2.64 8.29 1 04.83 1 2.63 9.80 1 23.74
Sub-total 4 90,304,801.28 2 89,627,858.46
Other monetary
capital RMB 8 05,000,000.00 1.00 8 05,000,000.00 5 61,619,249.35 1.00 5 61,619,249.35
USD 3 2,365.00 6.82 2 20,572.45 1 29,183.91 6.83 8 82,093.57
Sub-total 8 05,220,572.45 5 62,501,342.92
Total 1 ,295,846,260.40 8 52,448,970.81
Items
30 June 2010 31 December 2009
2. Notes receivable
Categories 30 June 2010 31 December 2009
Bank acceptance 1,932,605,807.32 6 04,499,731.15
3. Account receivable
(1) Account receivable is categorized as:
Amount (%) Amount (%)
Individually significant accounts
receivable 630,978,715.12 75.09% 3 1,548,935.75 74.75% 599,429,779.37
Accounts receivable which are not
individually significant, but are
assessed at high risk level through
credit risk combination
53,644.68 0.01% 3 2,186.81 0.08% 2 1,457.87
Other non-material receivables 209,277,458.22 24.90% 1 0,626,952.23 25.18% 198,650,505.99
Total 840,309,818.02 100.00% 4 2,208,074.79 100.00% 798,101,743.23
30 June 2010
Items
book value
Book balance Provision for bad debtAmount (%) Amount (%)
Individually significant accounts
receivable 950,308,642.23 81.55% 1 23,089,717.71 42.35% 827,218,924.52
Accounts receivable which are not
individually significant, but are
assessed at high risk level through
credit risk combination
158,298,434.02 13.58% 1 58,298,199.62 54.47% 2 34.40
Other non-material receivables 56,657,946.10 4.86% 9 ,241,456.01 3.18% 4 7,416,490.09
Total 1,165,265,022.35 100.00% 2 90,629,373.34 100.00% 874,635,649.01
31 December 2009
Items Book balance Provision for bad debt
book value
(2) Aging analysis：
Book balance % provision for bad debts Book value
Within 1 year 838,884,614.78 99.83% 4 1,944,230.74 7 96,940,384.03
1-2 years 899,051.66 0.11% 8 9,905.17 8 09,146.49
2-3 years 472,506.90 0.06% 1 41,752.07 3 30,754.83
3-5 years 53,644.68 0.01% 3 2,186.81 2 1,457.87
Over 5 - 0.00% - -
Total 840,309,818.02 100.00% 42,208,074.79 798,101,743.23
Aging
30 June 2010
Book balance % provision for bad debts Book value
Within 1 year 919,108,641.37 78.88% 4 6,538,757.11 8 72,569,884.26
1-2 years 30,247,357.50 2.60% 2 8,609,418.05 1 ,637,939.45
2-3 years 40,287,639.16 3.46% 3 9,878,446.43 4 09,192.73
3-5 years 22,905,700.37 1.97% 2 2,887,067.80 1 8,632.57
Over 5 152,715,683.95 13.11% 1 52,715,683.95 -
Total 1,165,265,022.35 100.00% 290,629,373.34 874,635,649.01
Aging
31 December 2009
(3) Foreign currencies are:
Original currency Exchange
rate Translated to RMB Original currency Exchange
rate Translated to RMB
USD 55,152,138.60 6 .82 3 75,870,294.96 37,053,560.88 6.83 2 53,009,124.40
EUR 5,003,988.60 8.29 41,500,642.80 1,444,323.99 9.80 1 4,150,186.56
Total 417,370,937.76 267,159,310.96
30 June 2010 31 December 2009
Items
(4) There was no accounts receivable due from shareholders with more than 5% (including 5%) of
the voting shares of the Company. For details of accounts receivable due from related parties,
please see Note VI: Related parties and related parties transaction.(5) Accounts receivable written-off actually in the reporting period
Client Number Amount % Reason
Zhejiang Hangzhou Little
Swan Business
Department
1 40,914,407.37 16.74% The company has gone
into liquidation
RUSSIA EVGO CORP. 1 40,247,490.68 16.47% Bankrupt
Shanghai Little Swan
Marketing Service Center 1 28,624,001.32 11.71% The company has gone
into liquidation
Sichuan Chengdu Little
Swan Business
Department
1 15,112,714.24 6.18% The company has gone
into liquidation
MALAYSIA MITACHI
CORP. 1 11,917,418.07 4.88% The company has gone
into liquidation
Other 1159 107,578,363.60 44.02% Confirmed to be
definitely uncollectible
Total 1164 244,394,395.28 100.00%
(6) The information list for the top 5 customers:
Book balance Aging %
GEA PRODUCTS Non-related party 167,558,758.64 Within 1 year 19.94%
Hefei Rongshida Washing Machine
Equipment Manufacturing Co.,Ltd. Related party 123,437,289.27 Within 1 year 14.69%
Belgium Electrolux Home Produc Non-related party 103,662,351.57 Within 1 year 12.34%
Suning Appliance Co.,Ltd., Nanjing
Purchasing Station Non-related party 73,441,241.79 Within 1 year 8.74%
Shanghai Midea Refrigeration Product
Marketing Co., Ltd. Non-related party 32,261,674.37 Within 1 year 3.84%
Total 500,361,315.64 59.54%
Clients
Relationship with the 30 June 2010
Company
4. Advances to the supplier
(1) Aging analysis：
Aging 30 June 2010 % 31 December 2009 %
Within 1 year 171,852,024.40 99.85% 65,696,005.50 99.17%
1-2 years 256,323.85 0.15% 497,676.87 0.75%
2-3 years - 0.00% 11,469.00 0.02%
3-5 years - 0.00% 36,121.70 0.05%
Over 5 years - 0.00% 2 ,000.00 0.00%
Total 172,108,348.25 100.00% 66,243,273.07 100.00%(2) The information list for the top 5 suppliers
Book balance Aging % Reason for carrying
down
Jiangsu Chengda Construction Co Ltd Non-related party 43,940,219.23 Within 1 year 25.53% The project failed to be
finished
Beijing ZhongTian Riyue Advertising Co.,Ltd Non-related party 38,226,342.71 Within 1 year 22.21%
The business failed to be
finished
Shanghai United Structures Co., Ltd. Non-related party 25,884,000.00 Within 1 year 15.04% The project failed to be
finished
Jiangsu Jinsha Construction Group Ltd. Non-related party 20,523,200.00 Within 1 year 11.92% The project failed to be
finished
Jiangsu Suyang Construction Co., Ltd. Non-related party 9,296,320.00 Within 1 year 5.40% The project failed to be
finished
Total 137,870,081.94 80.11%
Clients Relationship with the
Company
2010-06-30
(3) There were no advances to the supplier due from shareholders with more than 5% (including 5%)
of the voting shares of the Company. For details of advances to the supplier due from related
parties, please see Note VI: Related parties and related parties transaction.
5. Other receivables
(1) category analysis:
Amount % Amount %
Individually significant accounts receivable 15,859,950.16 57.85% 8,151,176.07 93.21% 7 ,708,774.09
Accounts receivable which are not
individually significant, but are assessed at
high risk level through credit risk
combination
28,810.00 0.11% 17,286.00 0.20% 1 1,524.00
Other non-material receivables 11,526,207.22 42.04% 576,310.36 6.59% 10,949,896.86
Total 27,414,967.38 100.00% 8,744,772.43 100.00% 18,670,194.95
Items
30 June 2010
Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts receivable 39,987,246.38 33.11% 33,235,039.06 34.83% 6 ,752,207.32
Accounts receivable which are not
individually significant, but are assessed at
high risk level through credit risk
combination
59,930,748.05 49.62% 58,315,136.45 61.11% 1 ,615,611.60
Other non-material receivables 20,868,853.33 17.28% 3,875,395.02 4.06% 16,993,458.31
Total 120,786,847.76 100.00% 95,425,570.53 100.00% 25,361,277.23
Items
31 December 2009
Book balance Provision for bad debt
Book value(2) aging analysis:
Book balance % Provision for bad debt Book value
Within 1 year 9,496,735.98 34.64% 474,836.80 9 ,021,899.18
1-2 years 6,929,418.56 25.28% 692,941.85 6 ,236,476.71
2-3 years 2,197,293.26 8.01% 439,458.65 1 ,757,834.61
3-5 years 4,134,961.12 15.08% 2,480,976.67 1 ,653,984.45
Over 5 4,656,558.46 16.99% 4,656,558.46 -
Total 27,414,967.38 100.00% 8,744,772.43 1 8,670,194.95
Aging
30 June 2010
Book balance % Provision for bad debt Book value
Within 1 year 11,891,854.42 9.85% 602,070.90 1 1,289,783.52
1-2 years 17,740,983.67 14.69% 10,740,363.73 7 ,000,619.94
2-3 years 9,694,301.01 8.03% 5,845,558.22 3 ,848,742.79
3-5 years 30,967,277.74 25.64% 29,315,171.98 1 ,652,105.76
Over 5 50,492,430.92 41.80% 48,922,405.70 1 ,570,025.22
Total 120,786,847.76 100.00% 9 5,425,570.53 2 5,361,277.23
Aging
31 December 2009
(3) There was no other receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company. For details of other receivable due from related parties, please
see Note VI: Related parties and related parties transaction
(4) The information list for the top 5 customers:
Book balance Aging %
Wuxi Little Swan Ceramic Co., Ltd. Non-related party 8,396,444.38 Within 1 year 30.63%
BSW Household Appliances Co., Ltd. Related party 4,566,705.78 Over 5 years 16.66%
Jiangsu Little Swan Sanjiang Electric Appliance
Manufacturing Co., Ltd Non-related party 2,896,800.00 Within 1 year 10.57%
Industrial and Commercial Bank of China Limited,
Beijing Branch Assets Custody Account Non-related party 900,000.00 Within 1 year 3.28%
Wuxi China Resources Natural Gas Co., Ltd. Non-related party 893,728.33 Within 1 year 3.26%
Total 17,653,678.49 64.39%
Clients Relationship with
the Company
30 June 2010(5) Other receivable written-off actually in the reporting period
Client Number Amount % Reason
Wuhan Washing Machine
Factory 1 21,707,997.30 25.04% The company has gone into
liquidation
Changchun Luolan Electric
Appliances Corp. 1 13,235,685.32 15.27% The company has gone into
liquidation
Wuxi Lianye Digital
Technology Co., Ltd. 1 8,270,171.26 9.54% The company has gone into
liquidation
Chen Yang (H.K.) Ltd. 1 3,554,634.15 4.10% The company has gone into
liquidation
Shannxi Machine Tool Works 1 3,000,000.00 3.46% Bankrupt
Other 431 36,909,439.56 42.58% Confirmed to be definitely
uncollectible
Total 436 86,677,927.59 100.00%
6. Inventory
(1) Category
Book balance Province for bad debt Book value Book balance Province for bad debt Book value
Raw materials 112,394,296.40 10,861,354.75 101,532,941.65 101,385,347.94 13,387,393.90 87,997,954.04
OEM materials 1,639,427.85 - 1,639,427.85 896,432.94 896,432.94
Low price
consumables 141,949.93 815,486.54 -673,536.61 1,822,359.00 815,486.54 1,006,872.46
Product in process 18,223,245.50 72,500.00 18,150,745.50 16,227,836.04 72,500.00 16,155,336.04
Finished goods in
stock 241,731,756.01 23,968,190.18 217,763,565.83 358,327,823.37 23,968,190.18 334,359,633.19
Total 374,130,675.69 35,717,531.47 338,413,144.22 478,659,799.29 38,243,570.62 440,416,228.67
30 June 2010
Items
31 December 2009
(2) Change of inventory impairment provisions
31 December 2009 30 June 2010
Book balance written back written off Book balance
Raw materials 13,387,393.90 - 2,526,039.15 10,861,354.75
OEM materials - -
Low price consumables 815,486.54 - 815,486.54
Product in process 72,500.00 - 72,500.00
Finished goods in stock 23,968,190.18 - 23,968,190.18
Total 38,243,570.62 - - 2,526,039.15 35,717,531.47
Items Provided in current
period
Decrease in current period7. Other current asset
Items 30 June 2010 31 December 2009
Deferred expenses 21,855,233.97 17,326,441.89
8. Sellable financial assets
30 June 2010 31 December 2009
Fair value Fair value
1) Equity instrument available for sale 315,168.00 3 12,816.00
Wuhan Huaxin Hi-Tech Co., Ltd.（400038） 315,168.00 3 12,816.00
Total 315,168.00 3 12,816.00
Items
9. Co‐operative & Joint‐operative subsidiaries investments
BSW Household Appliances
Co., Ltd. limited liability Wuxi
WINFRIED EDUARD
SEITZ
Production of
washing-machines and
kitchen appliances
USD 2927.5 40
Wuxi Indesit Home Appliances
Co. , Ltd. limited liability Wuxi GIUSEPPE
GIACALONE
Production of
dishwashers USD 1360 30
Guangzhou Antaida Logistical
Co., Ltd. limited liability Wuxi Ye Weilong Logistics service USD 1000 20
Invested entities Type Reg. Add. Legal representative Shareholding
proportion（%）
Business scope Registered capital
(RMB0'000)
Total assets Total liabilities Total net assets Operation revenue Net profit
BSW Household Appliances
Co., Ltd. 40 499,373,777.09 192,122,306.98 307,251,470.11 398,121,536.29 11,948,744.80
Wuxi Indesit Home Appliances
Co. , Ltd. 30 57,644,545.80 5,808,320.95 51,836,224.85 -200,180.67 -14,356,753.35
Guangzhou Antaida Logistical
Co., Ltd. 20 38,404,046.25 19,848,135.95 18,555,910.30 11,822,221.86 -349,309.94
Invested entities Voting rights
(%)
30 June 2010 Jan.-Jun. 2010
According to the eleventh board of directors’ resolution of Wuxi Indesit Home Appliances Co., Ltd.,
the joint venture contract was terminated at the end of year 2009, then dissolution and liquidation
proceedings of the company commenced.10. Long‐term equity investment
BSW Household Appliances Co., Ltd. Equity method 97,482,661.00 118,121,090.12 4,779,497.92 122,900,588.04
Wuxi Indesit Home Appliances Co. , Ltd. Equity method 33,768,120.00 19,857,893.46 -4,307,026.01 15,550,867.46
Guangzhou Antaida Logistical Co., Ltd. Equity method 2,000,000.00 3,781,044.05 -69,861.99 3,711,182.06
Hengtai Insurance Brokers Co., Ltd. Cost method 1,000,000.00 1,000,000.00 1,000,000.00
Suzhou Renmin Department Store Co., Ltd. Cost method 150,000.00 150,000.00 150,000.00
Bank of Jiangsu Cost method 1,100,000.00 1,100,000.00 1,100,000.00
Inner Mongolia Baotou Department Store Co., Ltd. Cost method 50,000.00 50,000.00 50,000.00
(Malaysia) Midaqi Little Swan Industry Co., Ltd. Cost method 4,224,744.00 - -
Total 139,775,525.00 144,060,027.63 402,609.93 144,462,637.56
Invested entities Method Amount of Initial 31 Dec. 2009 Increase/decrease 30 Jun. 2010
investment
Accurred impairment
provision Cash dividends
BSW Household Appliances Co., Ltd. 40.00 40.00 -
Wuxi Indesit Home Appliances Co., Ltd. 30.00 30.00
Guangzhou Antaida Logistical Co., Ltd. 20.00 20.00
Hengtai Insurance Brokers Co., Ltd. 3.33 3.33 10,000.00
Suzhou Renmin Department Store Co., Ltd. - - 25,000.00
Bank of Jiangsu - -
Inner Mongolia Baotou Department Store Co., Ltd. - -
(Malaysia) Midaqi Little Swan Industry Co., Ltd. 51.00 51.00 4,224,744.00
Total 4,224,744.00 - 35,000.00
Jan.-Jun. 2010
Invested entities Proportions of
shareholding (%)
Proportion of voting
rights (%) Impairment provision11. Fixed assets
(1) Details:
Items 31 Dec. 2009 Increased this period Decreased this period 30 Jun. 2010
Cost of the fixed assets 773,271,787.40 65,281,782.59 59,612,871.54 791,180,636.04
Property and buildings 420,343,766.30 10,614,277.94 20,423,852.25 410,534,191.99
Machineries 252,100,920.62 48,448,374.99 22,974,657.85 277,574,637.76
Vehicles 14,736,000.85 1,703,494.24 2,748,506.08 13,690,989.01
Electronic and other
equipment 86,091,099.63 4,515,635.42 13,465,855.36 77,140,879.69
Decoration 12,239,937.59 12,239,937.59
Accumulated
depreciation 166,667,340.88 21,235,648.12 20,511,330.14 167,957,177.33
Property and buildings 27,306,222.56 5,761,093.58 2,435,818.54 30,631,497.60
Machineries 99,341,427.56 13,647,058.99 15,430,186.48 97,558,300.07
Vehicles 5,942,945.93 674,299.28 2,257,186.44 4,360,058.77
Electronic and other
equipment 34,076,744.83 1,153,196.27 388,138.68 34,841,802.42
Decoration 565,518.47 565,518.47
The net book value 606,604,446.52 55,720,553.59 39,101,541.40 623,223,458.71
Property and buildings 393,037,543.74 4,853,184.36 17,988,033.71 379,902,694.39
Machineries 152,759,493.06 34,801,316.00 7,544,471.37 180,016,337.69
Vehicles 8,793,054.92 1,029,194.96 491,319.64 9,330,930.24
Electronic and other
equipment 52,014,354.80 3,362,439.15 13,077,716.68 42,299,077.27
Decoration - 11,674,419.12 - 11,674,419.12
Provision for
impairment loss 14,727,348.41 - 6,274.32 14,721,074.09
Property and buildings 12,576,065.29 12,576,065.29
Machineries 2,114,112.60 2,114,112.60
Vehicles 2,240.00 2,240.00
Electronic and other
equipment 34,930.52 6,274.32 28,656.20
Decoration
Carrying amount： 591,877,098.11 55,720,553.59 39,095,267.08 608,502,384.62
Property and buildings 380,461,478.45 4,853,184.36 17,988,033.71 367,326,629.10
Machineries 150,645,380.46 34,801,316.00 7,544,471.37 177,902,225.09
Vehicles 8,790,814.92 1,029,194.96 491,319.64 9,328,690.24
Electronic and other
equipment 51,979,424.28 3,362,439.15 13,071,442.36 42,270,421.07
Decoration - 11,674,419.12
(2) Details of temporarily idle fixed assets are as follows:Items Cost Accumulated depreciation Impairment loss Carrying amount
Property and buildings 18,278,815.09 5,383,708.70 12,576,065.29 3 19,041.10
Machineries 3,544,245.33 909,582.69 2,114,112.60 5 20,550.04
Vehicles 54,800.00 52,060.00 2,240.00 5 00.00
Electronic and other
equipment 287,524.00 273,147.80 12,107.20 2 ,269.00
Decoration -
Total 2 2,165,384.42 6 ,618,499.19 1 4,704,525.09 8 42,360.14
12. Construction in progress
(1) Construction in process:
Book balance Provision for
impairment Net book value Book balance Provision for
impairment Net book value
Little Swan
Industrial Park 22,398,224.53 22,398,224.53 23,101,817.68 2 3,101,817.68
Other 4,299,354.38 4,299,354.38 -
Total 26,697,578.91 - 2 6,697,578.91 2 3,101,817.68 - 23,101,817.68
Items
30 Jun. 2010 31 Dec. 2009
(2) Profiles of main construction in process and changes:
Transferred to fixed
assets this period Other
Little Swan
Industrial Park 0.5 billion 23,101,817.68 1 4,213,788.21 14,827,381.36 9 0,000.00 2 2,398,224.53
Total - 23,101,817.68 1 4,213,788.21 14,827,381.36 9 0,000.00 22,398,224.53
Items Budget 31 Dec. 2009 Increase this period 30 Jun. 2010
Decrease this period
Little Swan
Industrial Park Self-raised
Total
Items Capital source
- -
Interest capitalization
Interest capitalization
Jan.-Jun. 2010
13. Intangible assetsItems 31 Dec. 2009 Increase this period Decrease this period 30 Jun. 2010
Cost of the intangible
assets: 165,572,075.40 256,913.48 676,229.09 165,152,759.79
Land use right 151,428,657.35 - - 151,428,657.35
Know how 11,928,000.00 256,913.48 676,229.09 11,508,684.39
Software 2,215,418.05 2,215,418.05
Accumulative
amortization: 24,044,506.77 2,283,869.59 648,002.43 25,680,373.93
Land use right 11,661,924.51 1,702,304.39 - 13,364,228.90
Know how 11,380,200.00 581,565.20 648,002.43 11,313,762.77
Software 1,002,382.26 1,002,382.26
Provision for impairment
loss：
- - - -
Land use right - -
Know how - -
Software - -
Carrying amount： 141,527,568.63 -2,026,956.11 28,226.66 139,472,385.86
Land use right 139,766,732.84 -1,702,304.39 - 138,064,428.45
Know how 547,800.00 -324,651.72 28,226.66 194,921.62
Software 1,213,035.79 - - 1,213,035.79
14. Long‐term deferred expenses
Amortization Other
Moldings 9 ,384,948.38 19,402,240.82 7,253,214.92 2 1,533,974.29
IT consulting fee 1 ,856,480.84 162,667.95 241,231.41 1 ,777,917.38
Expenditure on
leasehold
improvements
5 ,532,317.45 - 976,741.48 4 ,555,575.97
Total 16,773,746.67 1 9,564,908.77 8,471,187.81 - 2 7,867,467.64
Items 31 Dec. 2009 Increase this period 30 Jun. 2010
Decrease this period
15. Deferred tax assets/deferred tax liabilities
Items 30 Jun. 2010 31 Dec. 2009
Deferred income tax assets
Asset impairment provision 1 3,394,270.58 4 0,611,352.14
Payroll and dismissal expenses 5 ,735,680.05 5 ,864,987.65
Accrued expenses 7 0,917,109.07 2 9,510,843.54
Internal unrealized profits 7 75,012.53 6 26,625.66
Provisions for foreseeable liabilities 2 ,706,007.50 1 ,682,025.00
Deferred revenue (government subsidies) 5 55,570.00 4 31,850.00
Investment differences 1 ,317,443.38 1 ,317,443.38
Total 95,401,093.12 8 0,045,127.37
Items 30 Jun. 2010 31 Dec. 2009
Deferred income tax liabilities
Change of fair value 3 2,230.20 3 1,877.40
Total 32,230.20 31,877.40
16. Provisions for impairment lossDecrease this period
Reversal Written off
Provision for bad debts 386,054,943.87 10,736,423.61 14,766,197.38 331,072,322.87 50,952,847.23
Provision for
impairment of
inventories
38,243,570.62 - 2,526,039.15 35,717,531.47
Provision for
impairment of long-term
equity investments
4,224,744.00 4,224,744.00
Provision for
impairment of fixed
assets
14,727,348.41 6,274.32 14,721,074.09
Total 443,250,606.90 10,736,423.61 14,766,197.38 333,604,636.34 105,616,196.79
Items 31 Dec. 2009 Accured this period 30 Jun. 2010
17. Short‐term loans
(1) Categories of Short-term loans：
Items 30 Jun. 2010 31 Dec. 2009
Mortgaged loan
Mortgage
Guaranteed loan 1 ,000,000.00
Credit loan
Total - 1 ,000,000.00
18. Notes payable
Items 30 Jun. 2010 31 Dec. 2009
Bank acceptance bill 8 39,123,651.32 1 4,000,000.00
Notes payable of RMB 15,833.68 was due between January and March, and RMB 68,078.69 was due
between April and June.
19. Accounts payable
(1) Details of accounts payable
Items 30 Jun. 2010 31 Dec. 2009
Accounts payable 2,245,809,458.82 1 ,552,443,101.69
(2) For details of accounts payable due to shareholders with more than 5% (including 5%) of the
voting shares of the Company and related parties, please see Note VI: Related parties and related
parties transaction.
20. Advance from customers
(1) Advance from customers
Items 30 Jun. 2010 31 Dec. 2009
Advance from customers 1 70,850,155.45 135,076,044.68(2) There was no advance from customers due from shareholders with more than 5% (including 5%)
of the voting shares of the Company. For details of advance from customers due from related
parties, please see Note VI. Related parties and related parties transaction.
21. Employees’ wage payable
Items 31 Dec. 2009 Increase this period Decrease this period 30 Jun. 2010
Wage, bonus, allowance and
subsidies 40,341,271.93 118,241,948.03 121,611,032.26 36,972,187.70
Employee welfare 7,596,162.69 5,491,004.07 4,046,971.99 9,040,194.77
Social insurance 3,128,978.05 21,219,140.58 18,955,522.35 5,392,596.28
Housing fund 4,608,451.64 7,066,665.03 6,275,752.83 5,399,363.84
Non-monetary welfare -
Trade union and education
allowance 4,360,561.81 1,084,237.13 1,071,389.00 4,373,409.94
Compensations for disengagement
other than dismissing policy 6,713,055.65 6,000.00 591,932.00 6,127,123.65
Others - 669,651.76 620,791.60 48,860.16
Total 66,748,481.77 153,778,646.60 153,173,392.03 67,353,736.34
22. Tax payable
Items 30 Jun. 2010 31 Dec. 2009
VAT 44,283,286.69 31,968,476.77
Business tax 1,862,515.01 2,140,214.68
Enterprise income tax 62,404,123.96 71,149,430.87
Personal income tax 248,298.29 835,933.67
Property tax 842,029.56 1,712,100.16
Land using tax 1,241,512.53 541,103.54
Stamp tax 249,980.66 564,185.09
Urban maintenance and construction tax 2,691,478.42 2,391,172.40
Education surtax 961,693.58 1,684,869.10
Other 3,304,502.95 3,233,830.38
Total 118,089,421.65 116,221,316.66
23. Dividend payable
Items 30 Jun. 2010 31 Dec. 2009 Reason
Little Swan shares of restricted
sale of corporate 2,669,154.60 2,917,374.60 unable to pay
Shareholders of Huayin - 50,548.35
Total 2,669,154.60 2,967,922.95
24. Other payablesItems 30 Jun. 2010 31 Dec. 2009
Other payables 68,376,834.68 60,542,744.72
(1) There was no amount due to shareholders with more than 5% (including 5%) of the voting
shares of the Company in other payables. For details of other payables due to related parties,
please see Note VI. Related parties and related parties transaction.
25. Estimated liabilities
Items 30 Jun. 2010 31 Dec. 2009
Quality guarantee payable 18,040,050.02 11,213,500.02
The washing machine, produced by Wuxi Little Swan General Electric Co., Ltd., owned by the
company, has some risks especially sold to the United States and other foreign markets. In the
washing machine where quality problems occur, the insurance company paid less than risks, as well
as General Electric Company agreed in the contract of more than FCR (failure rate) in compensation
risk. As of June 30, 2010 the company expected that for the sold products, the FCR payables and the
amount of loss which exceeded insurance limit was 18.04 million yuan.
26. Other non‐current liabilities
Items 30 Jun. 2010 31 Dec. 2009
Deferred revenue 5,176,300.00 3,679,000.00
27. Share capital
Capitalization of
share capital
Termination of
restrictive Other
A shares–restrictive 8,489,520.00 8,489,520.00
A shares–common 348,130,368.00 348,130,368.00
B shares 191,035,872.00 191,035,872.00
Total 547,655,760.00 547,655,760.00
Item
Increase/Decrease (+/-)
31 Dec. 2009 30 Jun. 2010
28. Capital surplus
Items 31 Dec. 2009 Increase this period Decrease this period 30 Jun. 2010
Share premium 466,534,204.40 2,885,353.03 469,419,557.43
Capital surplus transferred in 39,179,385.00 39,179,385.00
Loss/profit from fair value 180,638.60 1,999.20 182,637.80
Provision of equity investment 1,638,562.74 1,638,562.74
Total 507,532,790.74 2,887,352.23 - 510,420,142.9729. Surplus reserves
Items 31 Dec. 2009 Increase this
period Decrease this period 30 Jun. 2010
Statutory reserve 177,769,733.30 177,769,733.30
30. Retained earnings
Items 30 Jun. 2010 Proportion of withdrawing or
distribution
Retained profit at the end of previous year before adjustment 621,953,000.06
Adjusting: Total retained profit at the beginning of the year
Retained profit at the beginning of the year after adjustment 621,953,000.06
Plus: Net profit attributable to owners of parent company in the
reporting period 168,364,330.94
Less: Appropriating statutory reserve 10%
Appropriating discretionary reserve
Appropriating general risk provisions
Dividend of common shares payable
Dividend of common shares transferred to share capital
Retained profit at the end of the period 790,317,331.00
31. Operational turnover and costs
(1) Details of business turnover and costs:
Revenue Cost Revenue Cost
Main business
Washing machines 3,276,160,133.43 2,726,083,000.31 1,585,532,471.28 1,190,849,657.63
Refrigerator 177,632,340.06 178,482,187.27
Others 44,424,921.84 43,363,954.77 55,831,127.69 50,478,235.32
Subtotal 3,320,585,055.27 2,769,446,955.08 1,818,995,939.03 1,419,810,080.22
Other business
Sales materials 308,146,606.69 293,034,869.76 79,246,724.32 73,867,427.83
Rent 447,962.40
Other 4,955,220.70 1,037,066.37 4,245,960.89 2,871,103.17
Subtotal 313,549,789.79 294,071,936.13 83,492,685.21 76,738,531.00
Total 3,634,134,845.06 3,063,518,891.21 1,902,488,624.24 1,496,548,611.22
Jan.-Jun. 2010 Jan.-Jun. 2009
Items
(2) Turnover from top 5 clients:Operation revenue Proportion in total revenue
No. 1 302,182,380.47 8.32%
No. 2 322,977,012.56 8.89%
No.3 125,789,632.27 3.46%
No.4 97,377,087.18 2.68%
No.5 89,102,289.79 2.45%
Total 937,428,402.28 25.80%
Name of clients
Jan.-Jun. 2010
32. Business tax and surcharge
Items Jan.-Jun. 2010 Jan.-Jun. 2009
City maintenance and construction tax 6,685,633.19 6,731,662.70
Education surtax 3,006,321.63 3,768,928.19
Business tax 34,215.34 102,334.33
Other 228,814.24 357,288.55
Total 9,954,984.40 10,960,213.77
33. Financial expenses
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Interest expenses 8,301,932.98 3,821,070.93
Less: Interest income 6,578,590.80 3,292,046.69
Plus: Exchange losses 7,976,976.35 658,396.50
Plus: Other 1,521,213.29 1,025,391.46
Total 11,221,531.82 2,212,812.20
34. Impairment provisions of assets
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Bad debt losses -4,029,773.78 4,672,084.64
Inventory impairment losses
Fixed assets impairment losses
Total - 4,029,773.78 4,672,084.64
35. Investment incomeItems Jan.-Jun. 2010 Jan.-Jun. 2009
Long-term equity investment income at cost method-cash
dividend from non-subsidiaries 35,000.00 25,000.00
Long-term equity investment income at equity method 402,609.93 6,567,743.43
Gains from disposal of long-term equity investment -30,639,756.48
Investment gains from disposal of financial assets available for
sales 1,175,392.50
Investment gains during holding financial assets available for
sales
Total 437,609.93 -22,871,620.55
36. Non‐operating income
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Gains from disposal of fixed assets 5,029,001.68 1 4,568,429.91
Gains from debt reorganization
Gains from governmental subsidy 5,045,748.88 3,010,000.00
Penalty income 235,859.78 883,046.55
Other 175,651.52 966,676.21
Total 10,486,261.86 19,428,152.67
Details of gains from government subsidies:
Items Occurred this period Occurred last period
Rewards from the foreign trade and economic development
project funds 458,500.00 126,400.00
Subsidies for technological upgrading of enterprises 1,155,000.00
National New Product subsidies 400,000.00
National Enterprise Technology Center innovation project
grants 300,000.00
Support for general trade export 163,000.00 1,008,500.00
Incubation enterprise subsidies 25,200.00
VAT refund upon collection 2,944,048.88 1,330,100.00
Other 145,000.00
Total 5,045,748.88 3,010,000.00
37. Non‐operating expensesItems Jan.-Jun. 2010 Jan.-Jun. 2009
Loss on disposal of fixed assets 7,160,226.78 5,569,535.94
Loss on disposal of intangible assets
Reduction of fixed asset 2,299.23
Penalties paid 93,884.64 70,264.92
Compensation expenses
Donations expenses 401,332.00 250,000.00
Losses on re-organization of debts
Local fees 1,515,413.37 712,837.75
Other 2,043,633.12 641,532.50
Total 11,214,489.91 7,246,470.34
38. Income tax expenses
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Income tax expense of current period 51,941,984.48 11,061,130.54
Deferred income tax expense - 15,355,965.75 - 2,106,469.59
Total 36,586,018.73 8,954,660.96
39. Calculation formula of basic earnings per share and diluted earnings per share
(1) Calculation outcome
Net profit attributable to common
shareholders of the Company（Ⅰ）
0.31 0.31 8.68% 0.12 0.12 4.11%
Net profit attributable to common share
holders of the Company after deducting
of non-recurring gain/loss（Ⅱ）
0.31 0.31 8.72% 0.10 0.10 3.40%
Profit of the report period
Jan.-Jun. 2010
Weighted
Average
ROE
Jan.-Jun. 2009
Basic EPS Diluted EPS Basic EPS Diluted EPS
Weighted
Average
ROENo.
1
2
3=1-2
4
5
6
7
8
9
10
11
12=4+5+6×7÷
11-8×9÷11-10
13
14=1÷12
15=3÷13
16
17
18
19
20=[1+(16-18)
×(1-17)]÷
(12+19)
21=[3+(16-18)
×(1-17)]÷
(13+19)
547,655,760.00
547,655,760.00
0.31 0.12
15% 15%
- -
- -
0.12
0.31 0.10
- -
0.31
547,655,760.00
-
-
-
6.00 6.00
547,655,760.00
-
-
Jan.-Jun. 2010
169,263,710.54 55,821,900.00
547,655,760.00 547,655,760.00
Jan.-Jun. 2009
Amount of shares increased by capitalizing of common
reserves or share dividend
Amount of shares increased by issuing of new shares or
transforming of debt to shares
Items
Net profit attributable to common shareholders of the
Company
Non-recurring gain/loss attributable to the net profit of
common shareholders of the parent company after deducting
of income tax influences
Net profit attributable to common share holders of the
Company after deducting of non-recurring gain/loss
168,364,330.94
Total of shares at beginning of year
-899,379.60
67,392,307.11
11,570,407.11
Number of months from the next month of new share
issuing or converting of debt to shares to the end of report
term
Amount of shares decreased by repurchasing of shares in the
report term
Number of months from the next month of share decreasing
to the end of report term
Amount of shares reduced
0.10
Weighted average of common shares issued outside adjusted
for merger under common control (II)
Basic earnings per share (I)
Basic earnings per share (II)
Diluting potential common share interests recognized as
expenses
Income tax rate
Transformation fees
Number of months in the report term
Weighted average of common shares issued outside (I)
Amount of shares increased by transforming or exercising of
company bond, subscription certificate, or share option
Diluted earnings per share (I)
Diluted earnings per share (II) 0.31
40. Other misc. incomesItems Jan.-Jun. 2010 Jan.-Jun. 2009
1. Gains (losses) from sellable financial assets 2,352.00 6,996,648.50
Less: Income tax influence of sellable financial assets 352.80 1,049,497.28
Net amount written into other gains and transferred into
gain/loss in previous terms 1,175,392.50
Sub-total 1,999.20 4,771,758.73
2. Shares in other gains of investees on equity basis
Less: Income tax influence of shares in other gains of investees
on equity basis
Net amount written into other gains and transferred into
gain/loss in previous terms
Sub-total - -
3. Amount of gains (or losses) from cash flow hedge instrument
Less: Income tax influence of cash flow hedge instruments
Net amount written into other gains and transferred into
gain/loss in previous terms
Adjusted amount transferred to initial amount of the target
project
Subtotal - -
4. Difference from translating of foreign currency financial
statements
Less: Net amount of disposing overseas business and
transferred to current gain/loss
Sub-total - -
5. Others
Less: Income tax influence by other accounted into other misc.
incomes
Net amount accounted into other misc. income and transferred
into current gain/loss in previous terms
Sub-total - -
Total 1,999.20 4,771,758.73
41. Notes to the Cash Flow Statement
(1) Other cash inflow related to operation
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Revenue from fines 235,859.78 -
Subsidies 5,045,748.88 3,010,000.00
Penalty 883,046.55
Revenues from insurance claim of current assets -
Interest income 6,578,590.80 3,017,930.53
Other non-operating-related cash income 2,027,255.70 27,639,145.06
The rentals from Operating lease 447,962.40 -
Total 14,335,417.56 34,550,122.14
(2) Other cash paid related to operationItems Jan.-Jun. 2010 Jan.-Jun. 2009
Sales expense 1 24,813,451.08 1 47,949,873.09
Administrative expense 56,277,212.91 19,701,002.57
The amount of fee expenditures in financial expenses 1,521,213.29 1,128,919.37
Others 17,769,497.17 1,676,934.40
Total 200,381,374.45 170,456,729.43
42. Appendix of Cash Flow Statement
Items Jan.-Jun. 2010 Jan.-Jun. 2009
1.Net profit adjusted to cash flow of operation:
Net profit 1 81,540,671.74 6 2,708,321.42
Plus: Asset impairment provision -4,029,773.78 4 ,672,084.64
Fixed asset depreciation, gas and petrol depreciation, production
goods depreciation 2 1,235,648.12 2 3,978,072.55
Amortizing of intangible assets 2 ,283,869.59 2 ,476,700.53
Amortizing of long-term expenses 8 ,471,187.81 2 ,141,547.99
Loss from disposal of fixed assets, intangible assets, and other longterm
assets 2 ,131,225.10 5 ,569,535.94
Loss from fixed asset discard - -
Loss from fluctuation of fair value - -
Financial expenses 7 87,611.41 3 ,000,106.17
Investment loss -437,609.93 2 2,871,620.55
Decrease of deferred income tax asset -15,355,965.75 - 2,048,718.64
Increase of deferred income tax liabilities - -
Decrease of inventory 1 04,529,123.59 204,220,280.68
Decrease of operational receivable items -1,324,130,685.90 -202,496,061.92
Increase of operational payable items 1 ,525,825,180.82 -23,224,194.61
Others - -
Net cash flow generated by business operation 5 02,850,482.82 103,869,295.30
2. Investment and financing activities not involving in cash flow
Liabilities converted to capital
Convertible bond expire within 1 year
Fixed assets acquired under finance leases
3. Change of cash and cash equivalents
Balance of cash at end of year
Less: Balance of cash at beginning of year
Plus: Balance of cash equivalents at end of term 1 ,295,846,260.40 748,728,302.46
Less: Balance of cash equivalents at beginning of term 8 52,448,970.81 617,998,210.34
Net increase of cash and cash equivalents 4 43,397,289.59 130,730,092.12
NOTE VI：Relationship and Related party transactions
1. Details of the parent party:
Name of the parent
company Relationship Enterprise Nature Registered place Legal representative Business Nature
Guangdong Midea Electric
Appliances Co., Ltd. Parent Company Joint stock company Foshan,Guangdong Fang Hongbo
Manufacture and sales of commercial air
conditioners、refrigerators、washingmachines
and compressors, after-sale
service of productionsName of the parent
company Registered Capital
Proportions of parent
company’s
shareholding to the
company (%)
Proportions of parent
company’s voting
right to the company
(%)
Ultimate controller of
the company Organization Code
Guangdong Midea Electric
Appliances Co., Ltd. 3,120,270,000 29.64 29.64 He Xiangjian 19033709-2
2. Related parties
Fo Shan Midea Materials Supply Co., Ltd.
He Fei Midea Materials Supply Co., Ltd.
Fo Shan Wei Ling Washing Motor Co., Ltd. Under control of controlling shareholder of the Company's parent company
Under control of controlling shareholder of the Company's parent company
Under control of the company’s ultimate controlling shareholder’s direct relative
Jiangsu Midea Chunhua Electrical Appliance Co., Ltd. Under control of controlling shareholder of the Company's parent company
Wuhu Andde Logistical Co., Ltd.
Hefei Century Molding Development Co., Ltd.
He Fei Hua Ling Share Holding Co. , Ltd.
He Fei Rongshida Washing Equipment Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Under control of controlling shareholder of the Company
Under control of controlling shareholder of the Company
Under control of controlling shareholder of the Company
Guangzhou Antaida Material Distribution Co. , Ltd.
Wuxi Indesit Home Appliances Co. , Ltd.
Joint – operative
Joint – operative
Name of the parties Relationship
BSW Household Appliances Co. , Ltd. Joint – operative
3. Related Party Transactions
(1) Buying and selling goods, providing and receiving services among the related-party
Amount (RMB'0000) % Amount (RMB'0000) %
Wuhu Andde Logistical Co., Ltd. 1,552.90 0.53% 648.20 0.43% Market price
He Fei Rongshida Washing Equipment
Manufacturing Co., Ltd. 27,709.70 9.43% 15,007.54 9.92% Market price
Fo Shan Wei Ling Washing Motor Co., Ltd. 15,590.42 5.31% 1,547.97 1.02% Market price
Fo Shan Midea Materials Supply Co., Ltd. 12.96 0.00% 1,248.46 0.83% Market price
He Fei Midea Materials Supply Co., Ltd. 665.26 0.23% Market price
Hefei Century Molding Development Co.,
Ltd. 876.45 0.30% 56.44 0.04% Market price
Guangdong Midea Electric Appliances Co.,
Ltd. 4,879.97 1.66% Market price
Hefei Midea Royalstar Refrigerator Co., Ltd. 0.00% 2,220.85 1.47% Market price
Total 51,287.66 17.46% 20,729.46 13.71%
Pricing policy
Jan.-Jun. 2009
Name of related parties
Jan.-Jun. 2010Amount (RMB'0000) % Amount (RMB'0000) %
Hefei Century Molding Development Co.,
Ltd. 608.76 0.17% 57.21 0.03% Market price
He Fei Rongshida Washing Equipment
Manufacturing Co., Ltd. 36,988.71 10.18% 2,045.27 1.08% Market price
Hefei Midea Royalstar Refrigerator Co., Ltd. 16,116.13 8.47% Market price
Hefei Rongshida Midea Electrical Appliance
Sales Co., Ltd. 108.77 0.06% Market price
He Fei Hua Ling Share Holding Co. , Ltd. 1,037.36 0.35% 5.79 0.00% Market price
Jiangsu Midea Chunhua Electrical Appliance
Co., Ltd. 61.37 0.02% Market price
Total 38,696.20 10.72% 18,333.16 9.64%
Name of related parties
Jan.-Jun. 2010 Jan.-Jun. 2009
Pricing policy
Pricing policy
Amount (RMB'0000) % Amount (RMB'0000) %
Guangdong Midea Electric Appliances Co.,
Ltd. 121.02 121.02 Market price
Name of related parties
Jan.-Jun. 2010 Jan.-Jun. 2009
(2) Guarantees among the related parties
As at 30 June 2010, the Company did not provide security of guaranty for the subsidiaries’ bank loan
and bank acceptance bill.
As at 30 June 2010, the Company provided the guarantee for the Letter of Credit of subsidiary
(Wuxi Little Swan General electrical Appliance Co., Ltd.). The details are USD 863,072.24.
(3) Details of Property Transfer and Debt Restructuring between related parties.
Ongoing significant asset reorganization project: the Company purchased the equity of USD
94,145,000.00 of He Fei Rongshida Washing Machinery Co., Ltd from the parent company
Guangdong Midea Electric Appliances Co., Ltd. by issuing A‐shares to the parent company. At
present, relevant matters have been approved by the Board of Directors and the Shareholders’
General Meeting, and obtained conditional approval from CSRC. The said asset reorganization shall
be implemented after obtaining official reply from CSRC.
4. Amount due to/from related partiesName of entities 30 June 2010 31 December 2009
Accounts Receivable
He Fei Rongshida Washing Equipment
Manufacturing Co., Ltd. 12,343.72 5,642.13
He Fei Hua Ling Share Holding Co. , Ltd. 595.95
Jiangsu Midea Chunhua Electrical Appliance
Co., Ltd. 56.79
Total 12,996.46 5,642.13
Other Accounts Receivable
BSW Household Appliances Co. , Ltd. 456.67 516.68
Total 456.67 516.68
Prepayment
Guangdong Midea Electric Appliances Co.,
Ltd. - 121.02
Hefei Century Molding Development Co.,
Ltd. - 2.10
Total - 123.12
Accounts payable
Fo Shan Wei Ling Washing Motor Co., Ltd. 7,029.61 4,347.74
He Fei Midea Materials Supply Co., Ltd. 687.25 -
He Fei Rongshida Washing Equipment
Manufacturing Co., Ltd. 7,592.04 6,046.34
Guangdong Midea Electric Appliances Co.,
Ltd. 635.06 1,013.93
Hefei Century Molding Development Co.,
Ltd. 246.04 305.94
Total 16,190.00 11,713.95
Advances from the customers
Wuhu Andde Logistical Co., Ltd. 15.58 4.89
He Fei Rongshida Washing Equipment
Manufacturing Co., Ltd. 16.83
Total 15.58 21.72
Other payables:
Wuhu Andde Logistical Co., Ltd. 66.72 391.54
Total 66.72 391.54
Note VII：Contingent events
As of June 300, 2010, no other significant contingent events should be disclosed.
Note VIII：Commitment issues
As of June 300, 2010, no other significant commitment issues should be disclosed.
Note IX.：Events after balance sheet date
As of June 300, 2010, no other events after balance sheet date should be disclosed.
Note X: Other significant events
As of June 300, 2010, no other significant events should be disclosed.Note Ⅺ：Notes to the financial statements of parent Company
1. Accounts receivable
(1) category analysis:
Amount (%) Amount (%)
Individually significant accounts
receivable 450,343,777.48 73.15% 2 2,517,188.87 43.69% 4 27,826,588.61
Accounts receivable which are not
individually significant, but are assessed
at high risk level through credit risk
combination
9,818,239.97 1.59% 9 ,818,239.97 19.05% -
Other non-material receivables 155,479,859.02 25.25% 1 9,199,087.65 37.25% 1 36,280,771.37
Total 615,641,876.47 100.00% 5 1,534,516.49 100.00% 5 64,107,359.98
Items
30 June 2010
Book balance Provision for bad debt
book value
Amount (%) Amount (%)
Individually significant accounts
receivable 748,265,677.82 84.36% 1 29,337,709.89 93.11% 6 18,927,967.93
Accounts receivable which are not
individually significant, but are assessed
at high risk level through credit risk
combination
2,466,242.62 0.28% 2 ,466,242.62 1.78% -
Other non-material receivables 136,233,322.39 15.36% 7 ,101,070.48 5.11% 1 29,132,251.91
Total 886,965,242.83 100.00% 1 38,905,022.99 100.00% 7 48,060,219.84
Items
31 December 2009
Book balance Provision for bad debt
book value
(2) aging analysis:
Book balance % provision for bad debts Book value
Within 1 year 605,431,906.49 99.94% 4 1,677,103.52 5 63,754,802.98
1-2 years 391,730.00 0.06% 3 9,173.00 3 52,557.00
2-3 years - 0.00% - -
3-5 years - 0.00% - -
Over 5 - 0.00% - -
Total 605,823,636.49 100.00% 41,716,276.52 5 64,107,359.98
Aging
30 June 2010
Book balance % provision for bad debts Book value
Within 1 year 799,308,410.83 90.12% 5 1,703,176.06 7 47,605,234.77
1-2 years 539,466.45 0.06% 8 4,481.38 4 54,985.07
2-3 years - 0.00% -
3-5 years 2,413,477.83 0.27% 2 ,413,477.83 -
Over 5 84,703,887.72 9.55% 8 4,703,887.72 -
Total 886,965,242.83 100.00% 1 38,905,022.99 7 48,060,219.84
Aging
31 December 2009(3) There was no accounts receivable due from shareholders with more than 5% (including 5%)
of the voting shares of the Company.
2. Other receivables
(1) category analysis:
Amount % Amount %
Individually significant accounts
receivable 76,876,517.15 90.13% 6 5,201,452.23 92.95% 11,675,064.92
Accounts receivable which are not
individually significant, but are assessed at
high risk level through credit risk
combination
4,656,558.46 5.46% 4 ,656,558.46 6.64% -
Other non-material receivables 3,758,539.45 4.41% 2 91,166.70 0.42% 3,467,372.75
Total 85,291,615.06 100.00% 7 0,149,177.39 100.00% 15,142,437.67
Items
30 June 2010
Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts
receivable 92,748,647.83 58.18% 8 6,524,272.83 61.17% 6,224,375.00
Accounts receivable which are not
individually significant, but are assessed at
high risk level through credit risk
combination
51,220,980.12 32.13% 5 1,209,456.12 36.20% 11,524.00
Other non-material receivables 15,457,995.73 9.70% 3 ,715,225.57 2.63% 11,742,770.16
Total 159,427,623.68 100.00% 1 41,448,954.52 100.00% 17,978,669.16
Items
31 December 2009
Book balance Provision for bad debt
Book value
(2) aging analysis:
Book balance % Provision for bad debt Book value
Within 1 year 7,202,024.35 8.44% 3 60,101.22 6 ,841,923.13
1-2 years 26,273,864.34 30.80% 2 1,385,168.86 4 ,888,695.48
2-3 years 17,482,800.62 20.50% 1 5,724,966.01 1 ,757,834.61
3-5 years 12,959,892.91 15.19% 1 1,305,908.46 1 ,653,984.45
Over 5 21,373,032.84 25.06% 2 1,373,032.84 -
Total 85,291,615.06 100.00% 70,149,177.39 15,142,437.67
Aging
30 June 2010
Book balance % Provision for bad debt Book value
Within 1 year 8,754,928.53 5.49% 4 41,180.08 8 ,313,748.45
1-2 years 27,606,307.57 17.32% 2 1,317,264.85 6 ,289,042.72
2-3 years 19,947,014.83 12.51% 1 8,189,180.22 1 ,757,834.61
3-5 years 37,959,191.99 23.81% 3 6,341,148.61 1 ,618,043.38
Over 5 65,160,180.76 40.87% 6 5,160,180.76 -
Total 159,427,623.68 100.00% 1 41,448,954.52 17,978,669.16
Aging
31 December 2009(3) There was no other receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company.
3. Long-term equity investment
BSW Household Appliances Co., Ltd. Equity method 97,482,661.00 1 18,121,090.12 4 ,779,497.92 1 22,900,588.04
Wuxi Indesit Home Appliances Co., Ltd. Equity method 33,768,120.00 1 9,857,893.46 - 4,307,026.01 1 5,550,867.46
Guangzhou Antaida Logistical Co., Ltd. Equity method 2,000,000.00 3 ,781,044.05 - 69,861.99 3 ,711,182.06
Wuxi Little Swan Import & Export Co. , Ltd Cost method 57,500,000.00 5 7,500,000.00 5 7,500,000.00
Wuxi Huayin Electric Appliances Co. , Ltd. Cost method 3 7,313,630.00 3 7,313,630.00 1 1,450,000.00 4 8,763,630.00
Wuxi Little Swan Washing Machine Co. ,
Ltd. Cost method 37,259,587.50 3 7,259,587.50 3 7,259,587.50
Wuxi Meitian Refrigerator Marketing and
sale Co., Ltd. Cost method 24,840,000.00 2 4,840,000.00 2 4,840,000.00
Jiangsu Little Swan Marketing and Sales
Co. , Ltd. Cost method 4 17,550,000.00 4 17,550,000.00 4 17,550,000.00
Wuxi Filin Electronics Co. , Ltd. Cost method 19,620,041.50 2 5,660,308.10 2 5,660,308.10
Wuxi Little Swan General Electric
Appliances Co. , Ltd. Cost method 19,600,000.00 1 9,600,000.00 1 9,600,000.00
San Jin (Jing Zhou) Electrical Appliances
Co. , Ltd. Cost method 11,869,431.12 1 1,869,431.12 1 1,869,431.12
Wuxi Little Swan Driving & Control
Development Technology Co. , Ltd. Cost method 4,500,000.00 4 ,500,000.00 4 ,500,000.00
(Malaysia) Midaqi Little Swan Industry Co.,
Ltd. Cost method 4,224,744.00 - -
Hengtai Insurance Brokers Co., Ltd. Cost method 1,000,000.00 1 ,000,000.00 1 ,000,000.00
Suzhou Renmin Department Store Co.,
Ltd.(150,000 shares) Cost method 1 50,000.00 150,000.00 1 50,000.00
Bank of Jiangsu (2,092,564 shares) Cost method 1,100,000.00 1 ,100,000.00 1 ,100,000.00
Total 7 69,778,215.12 780,102,984.35 11,852,609.93 791,955,594.28
Amount of Initial Increase/decrease 30 Jun. 2010
Invested entities Method investment 31 Dec. 2009Accurred impairment
provision Cash dividends
BSW Household Appliances Co., Ltd. 40.00 4 0.00
Wuxi Indesit Home Appliances Co., Ltd. 30.00 3 0.00
Guangzhou Antaida Logistical Co., Ltd. 20.00 2 0.00
Wuxi Little Swan Import & Export Co. , Ltd 88.46 8 8.46
Wuxi Huayin Electric Appliances Co. , Ltd. 75.00 7 5.00
Wuxi Little Swan Washing Machine Co. ,
Ltd. 75.00 7 5.00
Wuxi Meitian Refrigerator Marketing and
sale Co., Ltd. 75.00 7 5.00
Jiangsu Little Swan Marketing and Sales
Co. , Ltd. 99.54 9 9.54
Wuxi Filin Electronics Co. , Ltd. 73.00 7 3.00
Wuxi Little Swan General Electric
Appliances Co. , Ltd. 70.00 7 0.00
San Jin (Jing Zhou) Electrical Appliances
Co. , Ltd. 1 00.00 1 00.00
Wuxi Little Swan Driving & Control
Development Technology Co. , Ltd. 90.00 9 0.00
Jan.-Jun. 2010
Proportion of voting
Invested entities Proportions of rights (%) Impairment provision
shareholding (%)
Accurred impairment
provision Cash dividends
Jan.-Jun. 2010
Proportion of voting
Invested entities Proportions of rights (%) Impairment provision
shareholding (%)
(Malaysia) Midaqi Little Swan Industry Co.,
Ltd. 51.00 5 1.00 4,224,744.00
Hengtai Insurance Brokers Co., Ltd. 3.33 3 .33 10,000.00
Suzhou Renmin Department Store Co.,
Ltd.(150,000 shares) - - 25,000.00
Bank of Jiangsu (2,092,564 shares) - -
Total 4,224,744.00 - 35,000.00
4. Operational turnover and costs
Revenue Cost Revenue Cost
Main business
Washing machines 2,871,024,907.96 2,422,448,147.00 1,120,109,866.45 783,970,165.17
Refrigerator 60,408,181.17 58,822,399.45
Others -
Subtotal 2,871,024,907.96 2,422,448,147.00 1,180,518,047.62 842,792,564.62
Other business
Sales materials 284,138,937.85 279,513,021.18 59,850,721.71 61,391,578.38
Rent 447,962.40
Other 1,593,558.01 763,201.44 2,122,574.22 2,436,966.85
Subtotal 286,180,458.26 280,276,222.62 61,973,295.93 63,828,545.23
Total 3,157,205,366.23 2,702,724,369.61 1,242,491,343.55 906,621,109.85
Items
Jan.-Jun. 2010 Jan.-Jun. 20095. Investment income
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Long-term equity investment income at cost method-cash dividend
from non-subsidiaries 35,000.00 2 5,000.00
Long-term equity investment income at cost method-cash dividend
from subsidiaries
Long-term equity investment income at equity method 402,609.93 6,567,743.43
Gains from disposal of long-term equity investment -85,166,119.03
Investment gains from disposal of financial assets available for
sales 1,175,392.50
Investment gains during holding financial assets available for sales
Total 437,609.93 - 77,397,983.10
6. Appendix of Cash Flow Statement
Items Jan.-Jun. 2010 Jan.-Jun. 2009
1.Net profit adjusted to cash flow of operation:
Net profit 134,353,434.93 34,167,101.02
Plus: Asset impairment provision - 9,863,010.11 - 19,904,919.51
Fixed asset depreciation, gas and petrol depreciation,
production goods depreciation 18,584,463.21 14,756,817.74
Amortizing of intangible assets 1,424,556.18 1,458,057.58
Amortizing of long-term expenses 5,840,044.69 2,141,547.99
Loss from disposal of fixed assets, intangible assets, and other
long-term assets 680,493.51 3,342,892.37
Loss from fixed asset discard - -
Loss from fluctuation of fair value - -
Financial expenses - -
Investment loss - 437,609.93 7 7,397,983.10
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Decrease of deferred income tax asset - 15,958,679.39 -854,771.29
Increase of deferred income tax liabilities - -
Decrease of inventory 71,613,491.80 1 22,463,926.83
Decrease of operational receivable items - 1,138,590,789.54 35,946,475.65
Increase of operational payable items 1,365,733,437.39 - 153,676,103.63
Others -
Net cash flow generated by business operation 433,379,832.74 1 17,239,007.85
2. Investment and financing activities not involving in cash flow
Liabilities converted to capital
Convertible bond expire within 1 year
Fixed assets acquired under finance leases
3. Change of cash and cash equivalents
Balance of cash at end of year
Less: Balance of cash at beginning of year
Plus: Balance of cash equivalents at end of term 1,133,368,149.44 6 03,741,476.82
Less: Balance of cash equivalents at beginning of term 743,637,877.78 4 08,475,277.00
Net increase of cash and cash equivalents 389,730,271.66 1 95,266,199.82
Note XII.：Supplementary Info.
(3) Details of non-recurring gain/loss of current termItems Jan.-Jun. 2010 Jan.-Jun. 2009
1. Gain/loss from disposal of non-working capital - 2,131,225.10 8 ,998,893.97
2. Refunding and exemption of taxes in excess of authority or without official
approval documents
3. Government subsidies accounted into current income account (except for those
government subsidies closely related to the Company’s business, and received at
national statutory standard and amount)
5,045,748.88 3,010,000.00
4. Capital adoption fee collected from non-financial organizations and accounted into
current gain/loss
5. Gain/loss from differences between the cost of enterprise merger and the fair value
of recognizable net asset of the invested entities
6. Gain/loss from non-monetary assets
7. Gain/loss from commissioned investment or assets
8. Asset impairment provisions provided for force-majeure
9. Gain/loss from debt reorganization -
10. Enterprise reorganizing expenses, such as employee placement fee and integration
fee
11. Gain/loss from trade departing from fair value
12. Current net gain/loss of subsidiaries under same control from beginning of term till
date of consolidation
13. Gain/loss generated by contingent liabilities without connection with main
businesses
14. Gain/loss from change of fair value of transactional asset and liabilities, and
investment gains from disposal of transactional financial assets and liabilities and
sellable financial assets, other than valid period value instruments related to the
Company’s common businesses
1,175,392.50
15. Restoring of receivable account impairment provision tested individually
16. Gain/loss from commissioned loans
17. Gain/loss from change of fair value of investment property measured at fair value
in follow-up measurement
18. Influence of one-time adjustment made on current gain/loss account according to
the laws and regulations regarding tax and accounting
19. Consigning fee received for consigned operation
20. Other non-business income and expenditures other than the above -3,642,751.83 1 72,788.36
21. Other gain/loss items satisfying the definition of nonrecurring gain/loss account
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Total of non-recurring gain/loss (influence on gross profit) -728,228.05 1 3,357,074.83
Less: Influenced amount of income tax -232,985.58 1 ,897,285.87
Less: Influenced amount of minor shareholders’ equity 404,137.13 - 110,618.15
Influence amount of net profit attributable to common shareholders of the
Company -899,379.60 1 1,570,407.11
Net profit attributable to common share holders of the Company after deducting
of non-recurring gain/loss 169,263,710.54 5 5,821,900.00
(4) Explanations for abnormal situations of main accounting statements items Unit:
(RMB 0’000)Monetary fund 129,584.63 8 5,244.90 4 4,339.73 52%
some notes receivable were discounted
for cash to accelerate the flow of
funds and reduce financing cost in
the report period
Note receivables 193,260.58 6 0,449.97 1 32,810.61 220% a significant growth of the domestic
sales income
Advances to suppliers 17,210.83 6,624.33 1 0,586.51 160%
the construction was not finished and
prepayments to relevant construction
suppliers were not written off
Long-term deferred expenses 2,786.75 1,677.37 1 ,109.37 66%
the Company strengthened new product
development in the report period and
the relevant expenses on modules were
up
Short-term loan - 1 00.00 - 100.00 -100%
borrowings were paid off in the
report period to reduce the financing
cost
Notes payable 83,912.37 1,400.00 8 2,512.37 5894%
notes payable in the report period
were banker’s acceptance bills drawn
by the Company
Accounts payable 224,580.95 1 55,244.31 6 9,336.64 45% purchases increased due to sales
growth
Estimated liabilities 1,804.01 1,121.35 6 82.66 61%
the product quality deposits were
estimated, upon measurement, to
increase in the report period as
compared ith the pre ious period
Other non-current liabilities 517.63 3 67.90 1 49.73 41% government subsidies for the Company
’s technological remolding project
Turnover 363,413.48 190,248.86 1 73,164.62 91%
the distribution network constantly
promoted by the Company produced a
good result and the channel network
gre mature uickl
Operation cost 306,351.89 149,654.86 1 56,697.03 105% the income growth
Administrative expense 1 2,356.32 6 ,768.18 5 ,588.14 83%
the income grew and the
administrative cost and scope
expanded
Financial expense 1 ,122.15 2 21.28 9 00.87 407%
some notes receivable were
discounted for cash in the report
period and exchange rates fluctuated
Assets impairment loss -402.98 4 67.21 - 870.19 -186%
accounts receivable were collected in
time at the year-begin and accounts
receivable within one year decreased
as compared with the year begin
Investment income 4 3.76 -2,287.16 2 ,330.92 -102%
at the same period of last year, a
great loss came from subsidiary
disposal and there were no such
e ents in the current period
Non-operation income 1 ,048.63 1 ,942.82 - 894.19 -46%
at the same period of last year, a
great income was obtained from fixed
asset disposal
Non-operation expense 1 ,121.45 7 24.65 3 96.80 55%
old equipments were renewed to
improve the production efficiency and
expenses increased for scrap
materials
Income tax expense 3 ,658.60 8 95.47 2 ,763.14 309% considerable profit growth
Items Amount this period Amount last period Note
Increase/decre
ase
%Items Amount this period Amount last period Note
Increase/decre
ase
%
Gains and losses of minority
shareholders 1 ,317.63 -468.40 1 ,786.03 -381% subsidiaries achieved profits in the
current period
Net cash flow arising from
operating activities 5 0,285.05 1 0,386.93 3 9,898.12 384%
some notes receivable were
discounted in the report period,
which generated inflow of more goods
pa ments
Net cash flow arising from
investing activities -5,741.74 3 ,487.09 - 9,228.83 -265%
the invested companies did not
distribute profit in the report
period and investment into fixed
assets gre as compared ith the same
Net cash flow arising from
financing activities -203.58 -801.01 5 97.43 -75%
original borrowings were repaid and
no new loans were borrowed in the
report period
