WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
WUXI LITTLE SWAN COMPANY LIMITED
INTERIM REPORT 2011
25 August 2011
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Contents
Section I Important Notice .......................................................................................................... 3
Section II Company Profile ......................................................................................................... 3
Section III Changes In Share Capital And Shares Held By Principal Shareholders ............. 6
Section IV Particulars About Directors, Supervisors And Senior Executives ........................ 9
Senior V Report Of The Board Of Directors ........................................................................... 10
Section VI Significant Events .................................................................................................... 13
Section VII Financial Report ..................................................................................................... 22
Section VIII Documents Available For Reference ................................................................... 23
Attachment Interim Financial Report Of 2011 (Non-Audited) .............................................. 24
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Section 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, CFO
Ms. Xiao Li and Person in Charge of Accounting Mr. Zeng Ruixian 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 by a CPA firm.
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.18 South Changjiang Road, High-tech
Industrial Zone, Wuxi, China
Post Code: 214028
Tel: 0510-81082320
Fax: 0510-83720879
E-mail: IR_littleswan@littleswan.com.cn
Securities Affairs Representative: Mr. Yao Yanfeng
Contact Address: No.18 South Changjiang Road, High-tech
Industrial Zone, Wuxi, China
Post Code: 214028
Tel: 0510-81082280
Fax: 0510-83720879
E-mail: yaoyf@littleswan.com.cn
4. Registered Address: No.18 South Changjiang Road, High-tech
Industrial Zone, Wuxi, China
Post Code: 214028
Office Address:： No.18 South Changjiang Road, High-tech
Industrial Zone, Wuxi, China
Post Code: 214028
International Website of the Company: http://www.littleswan.com
E-mail of the Company: IR_littleswan@littleswan.com.cn
5. Designated Newspaper for Information
Securities Times and Hong Kong Ta Kung Pao
Disclosure of the Company:：
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Internet Website for publishing the Interim http://www.cninfo.com.cn
Report Designated by CSRC:
Place Where the Interim Report is Prepared
Securities Dept. of the Company
and Placed:
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: 25 Mar. 2011
Registration place after change: Jiangsu Wuxi Administrative Bureau for
Industry and Commerce
Registration code of enterprise corporate 320200000014723
Business license:
Registration code of taxation: 320200704046760
II. Main accounting data and financial indices
Unit: RMB Yuan
Increase/decrease
of the period-end
At the end of
At the end of last year compared with the
reporting period
period-end of last
year (%)
Prior to Subsequent to Subsequent to
adjustment adjustment adjustment
Total assets 10,185,044,344.71 8,001,576,321.32 8,001,576,321.32 27.29%
Owners’ equity attributable to shareholders
3,272,824,293.65 3,056,480,975.76 3,056,480,975.76 7.08%
of the listed company
Share capital (share) 632,487,764.00 632,487,764.00 632,487,764.00 0.00%
Net assets per share attributable to
shareholders of the listed company 5.17 4.83 4.83 7.08%
(Yuan/share)
The reporting period Increase/decrease
The same period of last year
(Jan. -Jun.) year-on-year (%)
Prior to Subsequent to Subsequent to
adjustment adjustment adjustment
Total operating income 6,747,514,122.53 3,634,134,845.06 5,510,571,940.52 22.45%
Operating profit 390,459,337.37 218,854,918.52 348,041,857.76 12.19%
Total profit 417,740,185.30 218,126,690.47 356,299,600.09 17.24%
Net profit attributable to shareholders of the
280,338,482.78 168,364,330.94 248,754,461.98 12.70%
listed company
Net profit attributable to shareholders of the
listed company after deducting non-recurring 256,408,437.20 169,263,710.54 170,449,292.60 50.43%
gains and losses
Basic EPS (Yuan/share) 0.44 0.31 0.39 12.82%
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Diluted EPS (Yuan/share) 0.44 0.31 0.39 12.82%
ROE (%) 8.77% 8.68% 9.31% -0.54%
ROE excluding non-current gains and losses
8.02% 8.72% 8.61% -0.59%
(%)
Net cash flows from operating activities -509,000,827.63 502,850,482.82 538,324,427.97 -194.55%
Net cash flows per share from operating
-0.80 0.92 0.85 -194.55%
activities (Yuan/share)
Items of non-recurring gains and losses
Unit: RMB Yuan
Item Amount Notes (if applicable)
Gains and losses from non-current asset disposal 13,723,704.63
Government subsidies recognized into current gains and losses,
excluding those subsidies which are closely related to normal operation
16,731,627.64
of the Company and are enjoyed at fixed amounts or proportions
according to certain state standards
Other non-operating incomes and expenses besides the items above 1,473,547.45
Effect on income tax -4,103,121.84
Effect on minority interests -3,895,712.30
Total 23,930,045.58 -
Differences between PRC GAAP and IFRS
Unit: RMB Yuan
Net profit attributable to shareholders of the Owners’ equity attributable to shareholders
Company of the Company
Current period Previous period Closing amount Opening amount
Under IFRS 280,338,482.78 248,754,461.98 3,272,824,293.65 3,056,480,975.76
Under PRC GAAP 280,338,482.78 248,754,461.98 3,272,824,293.65 3,056,480,975.76
Items and totals adjusted according to IFRS:
Total difference between PRC
0.00 0.00 0.00 0.00
GAAP and IFRS
Explanation on difference
No difference
between PRC GAAP and IFRS
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 reporting period
Weighted average Basic EPS Diluted EPS
Net profit attributable to shareholders holding ordinary
8.77% 0.44 0.44
shares of the Company
Net profit attributable to shareholders holding ordinary
shares of the Company after deducting non-recurring 8.02% 0.41 0.41
gains and losses
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Section III Changes in Share Capital and Shares Held by Principal
Shareholders
I. Statement on changes in shares
Before the change Increase/decrease in this time (Note) After the change
Capitalization
Type of share Number of Issuance of Bonus Number of
Proportion of capital Other Subtotal Proportion
shares new shares shares shares
reserve
I. Shares subject to
254,873,249 40.30% 254,873,249 40.30%
moratorium
1. Shares held by state
2. Shares held by
state-owned corporation
3. Shares held by
domestic common 223,636,451 35.36% 223,636,451 35.36%
corporations
4. Shares held by
385,084 0.06% 385,084 0.06%
domestic natural persons
5. Shares held by foreign
30,851,714 4.88% 30,851,714 4.88%
corporations
6. Shares held by foreign
natural persons
7. Shares held by
employees
8. Shares held by senior
executives
9. Shares allotted to
institutional investors
II. Shares not subject to
377,614,515 59.70% 377,614,515 59.70%
moratorium
1. RMB ordinary shares 217,430,357 34.38% 217,430,357 34.38%
2. Domestically listed
160,184,158 25.33% 160,184,158 25.33%
overseas shares
3. Overseas listed
foreign shares
4. Others
III. Total shares 632,487,764 100.00% 632,487,764 100.00%
Note: On 12 Jul. 2011, a total of 1,576,800 shares held by five shareholders that
subject to trading moratorium was released for trading. Please refer to Suggestive
Announcement on Shares Releasing for Trading of Wuxi Little Swan Company
Limited with an announcement number of 2011-25 which published on Security
Times, Hongkong Ta Kung Pao and http://www.cninfo.com.cn dated 7 Jul. 2011.
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
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 23,192
Particulars about shares held by the top ten shareholders
Number of Number of
Nature of Shareholding Total number of
Name of shareholders shares subject to shares pledged
shareholders proportion shares held
moratorium or frozen
GD MIDEA HOLDING CO., LTD. Domestic
non-state-owned 34.20% 216,342,015 216,342,015 Naught
corporation
GAOLING FUND,L.P. Foreign
7.89% 49,897,109 Naught Naught
corporation
TITONI INVESTMENTS Foreign
4.88% 30,851,714 30,851,714 Naught
DEVELOPMENT LTD. corporation
On behalf of the
WUXI FINANCE BUREAU 3.49% 22,057,657 Naught Naught
state
BOCI SECURITIES LIMITED Foreign
3.33% 21,036,736 Naught Naught
corporation
ICBC-PENGHUA HIGH QUALITY Domestic
GOVERNANCE SECURITIES non-state-owned 3.04% 19,218,646 Naught Naught
INVESTMENT FUND (LOF) corporation
CHINA CONSTRUCTION
Domestic
BANK—YINHUA WEALTH THEME
non-state-owned 2.01% 12,739,575 Naught Naught
STOCK SECURITIES INVESTMENT
corporation
FUND
AGRICULTURAL BANK OF CHINA－ Domestic
PENGHUA MOTIVITY GROWTH non-state-owned 1.81% 11,472,655 Naught Naught
MIXED FUND corporation
GUOTAI JUNAN Foreign
1.67% 10,545,801 Naught Naught
SECURITIES(HONGKONG) LIMITED corporation
AGRICULTURAL BANK OF
CHINA—BANK OF Domestic
COMMUNICATIONS SCHRODERS non-state-owned 1.58% 10,015,215 Naught Naught
SELECTED STOCK SECURITIES corporation
INVESTMENT FUND
Particulars about the top ten shareholders holding shares not subject to moratorium
Number of shares not subject to
Name of shareholders Type of shares
moratorium
Domestically listed foreign
GAOLING FUND,L.P. 49,897,109
shares
Wuxi Finance Bureau 22,057,657 RMB ordinary share
BOCI SECURITIES LIMITED 21,036,736 Domestically listed foreign
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
shares
ICBC-PENGHUA HIGH QUALITY GOVERNANCE
19,218,646 RMB ordinary share
SECURITIES INVESTMENT FUND (LOF)
CHINA CONSTRUCTION BANK—YINHUA WEALTH
12,739,575 RMB ordinary share
THEME STOCK SECURITIES INVESTMENT FUND
AGRICULTURAL BANK OF CHINA － PENGHUA
11,472,655 RMB ordinary share
MOTIVITY GROWTH MIXED FUND
Domestically listed foreign
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 10,545,801
shares
AGRICULTURAL BANK OF CHINA—BANK OF
COMMUNICATIONS SCHRODERS SELECTED STOCK 10,015,215 RMB ordinary share
SECURITIES INVESTMENT FUND
BANK OF COMMUNICATIONS－PENGHUA CHINA 50
9,700,000 RMB ordinary share
FUND
ICBC-INVESCO GREAT WALL SELECTED BLUE CHIP
8,974,051 RMB ordinary share
SECURITIES INVESTMENT FUND
Explanation on associated relationship
GD Midea Holding Co., Ltd. indirectly holds 100% of TITONI INVESTMENTS
among the above shareholders or
DEVELOPMENT LTD. which makes them parties acting in concert.
acting-in-concert
III. Number of shares held by the top ten shareholders subject to moratorium and
trading moratorium
Unit: Share
Number of shares held Additional shares Trading
No. Name of shareholders Date of listing for trade
subject to moratorium could list for trade moratorium
1 GD MIDEA HOLDING CO., LTD. 216,342,015 19 Nov. 2013 216,342,015 Note 1
TITONI INVESTMENTS
2 30,851,714 19 Nov. 2013 30,851,714 Note 1
DEVELOPMENT LTD.
CHINA TECHNOLOGY
3 INTERNATIONAL TRUST 962,712 7 Aug. 2007 962,712 Note2, Note 3
INVESTMENT LTD.
JIANGYIN SANJIN COMPUTER
4 864,000 7 Aug. 2007 864,000 Note 2
CO., LTD.
FUSHUN SPECIAL STEEL
5 864,000 7 Aug. 2007 864,000 Note 2
(GROUP) CO., LTD.
JIANGYIN SHENGANG
6 756,000 7 Aug. 2007 756,000 Note 2
HARDWARE CASTING PLANT
YANGJIANG HUAYANG
7 CONSTRUCTION 648,000 7 Aug. 2007 648,000 Note 2
DEVELOPMENT CO., LTD.
WUXI DOUSHAN
8 COMPREHENSIVE 540,000 7 Aug. 2007 540,000 Note 2
DEVELOPMENT CO., LTD.
9 SHENZHEN SHENCAI 345,600 7 Aug. 2007 345,600 Note 2
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
SECURITIES BUSINESS
DEPARTMENT
SHENZHEN ZHONGXIE
10 307,440 7 Aug. 2007 307,440 Note 2
INVESTMENT CO., LTD.
Note1: Commitment made when significant assets reorganization occurred: GD
Midea Holding Co., Ltd. (hereinafter referred to as ―Midea Holding‖) assured that,
Midea Holding shall not transfer all holding shares of Little Swan in 36 months since
the date Little Swan finished this privately issuance of shares.
Note2: The application for shares releasing for trading shall be submitted to Stock
Exchange by the Board of the Company only when: 1. China Technology
International Trust Investment Ltd. received an approval from non-current shares’
shareholders which will pay for advance consideration and 2. The consideration shall
be paid by relevant non-current shares’ shareholders.
Note 3: On 12 Jul. 2011, shares held by China Technology International Trust
Investment Ltd. became tradable.
Section IV Particulars about Directors, Supervisors and Senior
Executives
I. Particulars about changes on shares held by directors, supervisors and senior
executives of the Company.
Director Mr. Li Mingde held 100 shares of the Company at period-begin, while he
sold out them on 11 Mar. 2011. His above said act is in violation of relevant rules and
regulations of listed companies and constituted a short term trading that Mr. Li
Mingde has already returned all gains to the Company and apologized to investors of
the Company. (Please refer to announcement No. 2011-06 of the Company dated 15
Mar. 2011.)
In the reporting period, other directors, supervisors and senior executives remained
unchanged.
II. Particulars about engagement and dismissal of directors, supervisors and senior
executives
(I) Change in directors
On 7 Jan. 2011, the Company convened the 1st Provisional Shareholders’ General
Meeting of 2011, of which reviewed and approved Proposal on Engaging New
Director for the Company. The Company decided to elect Mr. Liu Jufeng as director
of the Sixth Board of Directors, and his work term is from the effective date of the
resolution to the expiration of this Board of Directors.
(II) Change in supervisors
On 9 Mar. 2011, staff representative of the Company Mr. Xiao Bing submitted
resignation report to the Company due to work change. He resigned from post of
director of the Company and other post he took in Supervisory Committee.
On 9 Mar. 2011, with review from meeting jointed by chief (leader) of the 4th Session
of the 5th Worker Delegation and chief of specific team, approval of electing Mr. Li
Mingde as supervisor of staff representative of the Six Session of the 5th Supervisory
Committee.
On 14 Mar. 2011, Mr. Le Xiang’an resigned from post of director of the Company and
relevant post in Supervisory Committee due to work change.
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
On 15 Apr. 2011, the Company convened Shareholders’ General Meeting of 2010, of
which Proposal on Engaging New Supervisor of the Company was reviewed and
approved. The Company decided to elected Mr. Zhang Zhaofeng as director of the
Sixth Supervisory Committee, and his work term is from the effective date of this
Shareholders’ General Meeting to the expiration of this Supervisory Committee.
On 15 Apr. 2011, the Company convened the 9th Session of the Sixth Supervisory
Committee, of which Mr. Zhang Zhaofeng was elected as chairman of the Sixth
Supervisory Committee.
(III) Change in senior executives
On 15 Apr. 2011, deputy general manager of the Company Mr. Li Hong submitted
written resignation to the Company due to personal affairs. He resigned from post of
deputy general manager of the Company.
On 23 Aug. 2011, deputy general manager of the Company Ms. Xu Li submitted
written resignation to the Company due to personal affairs. She resigned from post of
deputy general manager of the Company.
Section V Report of the Board of Directors
I. Business review for the reporting period
In the first half of 2011, the washing machine industry as a whole grew at a lower
pace due to tightening macro-control over the domestic real estate sector, weakening
pulling effect by policies such as ―to bring household appliances to the countryside‖,
rising inflation, overseas economic fluctuations and other factors. According to
statistics from ChinaIOL, a total of 26,439,000 units of washers were sold in the
period from Jan. 2011 to Jun. 2011, up 15.2% from a year earlier, a lower growth rate
as compared with the same period of last year.
In face of a changeable market environment in the reporting period, the Company
kept to the development strategy of ―to expand and enhance the core business of
washers‖, kept deepening the organizational reform, perfected the corporate operation
mechanism on products and stimulated business vitality. It continued to expand
marketing channels, set up new terminal shops and improve its exclusive shops. By
carrying out the diversification strategy on its brand and products, the Company
authorized the use of the ―Little Swan‖ brand on air conditioners and refrigerators,
with the purpose of promoting its brand image and overall influence. Meanwhile, the
Company advertised much more in high-end media to increase the brand
competitiveness. It also input more for R&D to increase its product competitiveness.
For the reporting period, the Company achieved operating revenues of RMB 6.748
billion, up 22.45% from a year earlier; and net profit attributable to shareholders of
the Company of RMB 0.28 billion, up 12.70% from a year earlier. In particular, the
washer business generated sales of RMB 5.889 billion, representing a 19.64%
increase as compared with the same period of last year.
In the reporting period, the Company’s lab was UL (a famous safety certification
mark in North America) certified, making it the first lab in the domestic washer sector
to pass the certification. Before that, the lab had been VDE (Germany) certified. The
fact that the Company’s lab passed the on-site checks on safety measures and energy
efficiency by the two most authoritative certification institutions in the world
provided the Company’s washers quick access to the global market.
In the coming six months, in order to cope with changes in the economic situation and
policies, the Company will, according to changes of the market competition picture,
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
take the initiative to adjust its operating strategy. Under the guidance of the policy of
―adjusting the structure and keeping profits‖, the Company will transform its
operating mode to one featuring ―efficiency-driven and technology-driven‖. It will
also adjust its investment strategy, optimize its product mix, increase its product
competitiveness, enhance risk prevention and improve its organizing ability and
operating efficiency.
II. Analysis to business results for the reporting period
(I) Main items in the accounting statements and movements thereof:
Unit: RMB Ten thousand
30 Jun. Increase/
Item 31 Dec. 2010 Reasons for movement
2011 decrease
Transactional Increase of forward exchange contracts signed with
1,494.58 777.86 92%
financial assets banks
Notes receivable 422,399.79 156,250.32 170% Sales increase
Value decrease of production moulds due to
Other current assets 8,534.02 12,955.61 -34%
amortization
Construction in Input for the production capacity expansion
12,832.11 2,600.57 393%
process projects in bases in Jingzhou and Hefei
Short-term
3,960.99 903.94 338% Increase of trade financing
borrowings
Self-issued banker’s acceptance bills were adopted
Notes payable 229,336.57 80,459.79 185%
as a new way of payment.
Accounts received Influence of the financial environment and the
11,598.05 46,716.84 -75%
in advance sales cycle
Taxes and fares
1,629.73 -2,394.70 168% Influence of the production and sales cycle
payable
Deferred income tax Increase of transactional financial assets and fair
227.52 119.87 90%
liabilities value increase of available-for-sale financial assets
Foreign exchange
-169.23 -93.79 -80% Movements of exchange rates
difference
Jan.-Jun. Jan.-Jun. Increase/
Item Reasons for movement
2011 2010 decrease
Business taxes and The turnover tax increased due to the influence of
1,580.84 996.01 59%
surcharges the production and sales cycle.
Selling expense 52,412.16 35,479.93 48% Sales increase
Administrative Administrative costs increased and the range
23,998.21 15,822.38 52%
expense expanded as income grew.
Financial expense 111.18 1,973.77 -94% Increase of interest income from deposits
Bigger increase of accounts receivable due within
Asset impairment
553.20 156.30 254% one year as compared with the same period of last
loss
year
Earnings from fair Earnings from fair value changes of forward
1,168.91 -
value changes exchange contracts
Investment income 2,961.19 43.76 6,667% Gains on due forward exchange contracts and
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
subsidiary disposal
Non-operating
3,581.38 1,992.50 80% Increase of earnings from fixed asset disposal
income
Income tax 8,443.54 5,956.08 42% Profit growth
Net cash flows from
-50,900.08 53,832.44 -195% Increase of cash paid to acquire goods and services
operating activities
Net cash flows from Increase of cash paid to expand the Company’s
-12,377.52 -7,035.45 -76%
investing activities production capacity and acquire fixed assets
Net cash flows from
-4,606.72 -203.58 -2,163% Increase of cash dividends paid
financing activities
(II) Main business scope and business performance
1. Main businesses classified according to industries or products
Unit: RMB Ten thousand
Main businesses classified according to industries
Increase/ decrease Increase/
of operation decrease of
Increase/ decrease
income over same gross profit
Gross profit rate of operation cost
Industries/ products Operation income Operation cost period of last year rate over
(%) over same period
(%) same period
of last year (%)
of last year
(%)
Household
588,859.63 481,121.80 18.30% 19.64% 18.62% 0.70%
appliances
Other industries 85,891.78 80,058.19 6.79% 45.86% 42.26% 2.36%
Main businesses classified according to products
Washing machines 588,859.63 481,121.80 18.30% 19.64% 18.62% 0.70%
Sale of materials 83,916.24 78,907.47 5.97% 55.68% 52.23% 2.14%
2. Main businesses classified according to regions
Unit: RMB Ten thousand
Increase/ decrease over same period of
Regions Operation income
last year (%)
Domestic 568,088.75 30.00%
Overseas 106,662.66 -7.00%
III. Investments made in the reporting period
1. In the reporting period, the Company did not raise any funds for use, nor there were
such funds carried down from previous periods to the reporting period.
2. Use of non-raised funds
The 11th Session of the Sixth Board of Directors was held on 10 Mar. 2011, approving
the Proposal on the Investment Plan for 2011. According to the plan, the Company
and its subsidiaries were expected to make a total investment of RMB 0.65 billion for
2011. The investment project was being carried out on schedule.
The 12th Session of the Sixth Board of Directors was held on 25 Apr. 2011, approving
the Proposal on Adjusting an Investment Project in 2010. According to the resolution,
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
the Nansha Industrial Park project was shut down to build a new base in Tianjing,
with the total investment estimated at RMB 0.85 billion. The said project was in the
preparation phase in the reporting period.
Section VI Significant Events
I. Corporate governance
The Company operated in strict compliance with regulations relating to the modern
enterprise system, and there was no difference between the actual situation of the
Company’s corporate governance and relevant CSRC documents.
On 25 Apr. 2011, the 12th Session of the Sixth Board of Directors was held, approving
the Management Rules for Company Directors, Supervisors and Senior Executives
Holding and Trading Company Shares, the Management Rules for Investor
Relationship, and the Management Rules for Related-party Transactions. Those rules
further improved the Company’s management system.
In early 2011, according to the Notice on Doing a Good Job in Implementation and
Pilot Implementation of Internal Control Regulations for Listed Companies in Jiangsu
in 2011 issued by the Jiangsu CSRC, the Company was named as a pilot enterprise for
the implementation of internal control regulations in the province. In order to fully
implement relevant regulations such as the Basic Norms for Enterprise Internal
Control, the Supporting Guideline for Enterprise Internal Control and the Notice on
Doing a Good Job in Pilot Implementation of Internal Control Regulations for Listed
Companies, the Company, combining needs to increase the production and operation
efficiency, to rationally safeguard asset safety and ensure compliance with regulations
in the operation, to unify the internal control structure and culture and to further
ensure the factuality and completeness, reviewed and approved the Work Plan for
Implementing Internal Control Regulations at the 11th Session of the Sixth Board of
Directors. Now, the agency hired by the Company for checking its compliance with
internal control regulations has started their work in the Company.
On 21 Apr. 2011, the Proposal on Hiring an Internal Control Auditor was reviewed
and approved at the 12th Session of the Sixth Board of Directors. Jiangsu Gongzheng
Tianye Certified Public Accountants Co., Ltd. was hired as the Company’s internal
control auditor.
II. Profit distribution
The profit distribution plan for 2010 was reviewed and approved at the 2010 Annual
Shareholders’ General Meeting held on 15 Apr. 2011. Based on the total 632,487,764
shares as at 31 Dec. 2010, a cash dividend of RMB 1.00 (tax included) was distributed
for every 10 shares. The Board of Directors disclosed the Announcement of Wuxi
Little Swan Co., Ltd. on Implementation of Profit Distribution for 2010
(Announcement No. 2011-24) on 26 May 2011. For A-share holders, the date of
record was 31 May 2011 and the ex-dividend date was 1 Jun. 2011; for B-share
holders, the lasting trading date was 31 May 2011, the ex-dividend date was 1 Jun.
2011 and the date of record was 3 Jun. 2011. The profit distribution plan for 2010 was
accomplished during the reporting period.
For the middle of 2011, the Company will not conduct profit distribution or turn
capital reserves into share capital.
III. In the reporting period, the Company was not involved in any significant lawsuits
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
or arbitrations, nor there existed such lawsuits or arbitrations carried down from
previous periods to the reporting period.
IV. The Company did not acquire any significant asset during the reporting period.
V. Significant related-party transactions in the reporting period
1. The Company convened the 10th Session of the Sixth Board of Directors on 14
Dec. 2010 and the 1st Special Shareholder’s General Meeting 2011 on 7 Jan. 2011,
which reviewed and approved the Proposal on Related Transaction on Trademark
Licensing. The Company permitted GD Midea Holding Co., Ltd and its controlled
subsidiaries to use trademark of ―小天鹅 LITTLE SWAN and picture‖ in air
conditioner commodities, with trademark license fees estimated as no more than
RMB 20,000,000. GD Midea Holding Co., Ltd permitted the Company and
subsidiaries of the Company to use trademark of ―Midea‖ in production, sales and ad
advertising of washing machines and dryers, with trademark license fees estimated
as no more than RMB 20,000,000. The aforesaid licensing contracts were all
contracted with 0.3% charges of net sales revenue of products with the authorized
trademark as trademark license fees, and the licensing period ranged from 1 Jan.
2011 to 31 Dec. 2013. At the same time, the Company will renew and sign the
Contract on Trademark Licensing with Little Swan (Jingzhou) Electric Appliances
Co., Ltd. As negotiated by both parties, the ending date of the licensing period
extended from 19 Jun. 2011 to 31 Dec. 2013.
2. The Proposal on Routine Related-party Transactions for 2011 was reviewed and
approved at the First Special Shareholders’ General Meeting for 2011 on 7 Jan. 2011.
The Proposal on Change Subjects of Routine Related-party Transactions and the
Proposal on New Routine Related-party Transactions of Subsidiaries for 2011 were
reviewed and approved at the 12th Session of the Sixth Board of Directors on 25 Apr.
2011.
3. The Proposal on Subjects of New Routine Related-party Transactions for 2011 was
reviewed and approved at the 13th Session of the Sixth Board of Directors held on 23
Aug. 2011.
Please refer to the Note 6 to the financial statements for details of the routine
related-party transactions.
VI. Significant contracts and their implementation:
1. In the reporting period, the Company did not hold in trust, contract or lease assets
of other companies, or vice versa.
2. Provision of guarantees in the reporting period
Unit: RMB Ten thousand
Guarantees provided for external parties (excluding guarantees provided for subsidiaries)
Disclosure
date and No.
Impleme
of the Date of
Actual ntation Guarantee
Name of the announceme Guarantee occurrence Type of Term of
amount of accompl for related
guaranteed party nt specifying line (Date of signing guarantee guarantee
guarantee ished or parties or not
the agreement)
not
guarantee
line
14
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Total external guarantees lines Total external guarantees
examined and approved in the 0.00 occurred in the reporting 0.00
reporting period (A1) period (A2)
Total external guarantee lines
Balance of actual guarantees at
examined and approved at the 0.00 0.00
the period end (A4)
period end (A3)
Guarantees provided for subsidiary companies
Disclosure
date and No.
Impleme
of the Date of
Actual ntation Guarantee
Name of the announceme Guarantee occurrence Type of Term of
amount of accompl for related
guaranteed party nt specifying line (Date of signing guarantee guarantee
guarantee ished or parties or not
the agreement)
not
guarantee
line
Hefei Royalstar
Washing
2010-12-16, Pledge 2011-5-25 to
Equipment 73,000 2011-5-25 8,000 No No
2010-45 guarantee 2012-5-25
Manufacturing
Co., Ltd.
Hefei Royalstar
Washing
2010-12-16, Pledge 2011-5-25 to
Equipment 73,000 2011-5-25 10,000 No No
2010-45 guarantee 2012-5-25
Manufacturing
Co., Ltd.
Total guarantees lines for
Total guarantees for
subsidiaries examined and
0 subsidiaries occurred in the 18,000
approved in the reporting
reporting period (B2)
period (B1)
Total guarantee lines for
subsidiaries examined and Balance of actual guarantees at
83,000 18,000
approved at the period end the period end (B4)
(B3)
Total guarantees of the Company (Total of the two above)
Total guarantees lines
Total guarantees occurred in
examined and approved in the 0 18,000
the reporting period (A2+B2)
reporting period (A1+B1)
Total guarantees lines Total balance of actual
examined and approved at the 83,000 guarantees at the period end 18,000
reporting period (A3+B3) (A4+B4)
Proportion of total actual guarantee amount (A4+B4) in net assets
5.50%
of the Company
Among which:
Amount of guarantees provided for shareholders, actual controller 0.00
15
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
and other related parties (C)
Amount of debt guarantees provided directly or indirectly for
0.00
parties with asset-liability ratio exceeding 70% (D)
Proportion of total guarantee amount exceeding 50% of the
0.00
Company’s net assets (E)
Total amount of the above three guarantees (C+D+E) 0.00
Explanation on possibility of taking several and joint liability
N/A
involving immature guarantees
VII. Commitments made by the controlling shareholder and actual controller
Commitment
Commitment Contents of commitment Implementation
maker
Where the controlling shareholder GD Midea Holding Co., Ltd. (Midea Holding)
plans to sell the Company’s shares released from trading moratorium held by it via
Commitment on
Controlling the bid trading system of the Shenzhen Stock Exchange, and Midea Holding In the process of
share trading
shareholder decreases over 5% shares within six months since the first reduction of holdings, implementation
moratorium
Midea Holding will disclose the suggestive announcement on share selling through
the Company two trading days before its first reduction of holdings.
1. As for Midea Holding’s commitment on share lock-up, it has committed that it
will not transfer Little Swan shares held by it within 36 months since the date when
the private share offering deal is closed.
2. As for the commitment of avoiding horizontal competition, Midea Holding
(the controlling shareholder) and Mr. He Xiangjian (the actual controller) has
promised that, for the period after the said transaction when the Company’s
controlling shareholder and actual controller remain unchanged, Midea Holding,
Mr. He Xiangjian and other subsidiary companies under their control excluding the
Company and the Company’s subordinate companies will not increase business or
establish new subsidiary companies engaged in business which is the same with or
similar to the Company’s main business or forms substantial horizontal competition
Commitment Controlling with the Company. If they act against the commitment above, profits thus generated
made in the shareholder will be attributable to the Company. In the process of
significant asset and actual 3. As for the commitment for regulating related-party transactions, GD implementation
reorganization controller Midea Holding (the controlling shareholder) and Mr. He Xiangjian (the actual
controller) have promised that when there are inevitable related-party transactions
or such transaction incurred with rational reasons after the completion of the
transaction, they will follow the fair, reasonable and market principles in
formulating and signing relevant agreements on such related-party transactions and
ensure that no harm will be done to interests of the Company and other
shareholders. Where GD Midea Holding and Mr. He Xiangjian act against the
promise above and damage interests of the Company and other shareholders, they
will assume liabilities for compensation according to relevant provisions.
4. As for the commitment on independence, GD Midea Holding has promised to
protect Little Swan’s independence in terms of assets, staff, finance, organization
and business.
16
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
5. As for the commitment on related-party deposits and borrowings, up to 8
Apr. 2010, the Financial Settlement Center of GD Midea Holding had settled all
internal deposits and borrowings with Hefei Royalstar Washing Equipment
Manufacturing Co., Ltd.; and GD Midea Holding has promised that there will be no
more deposits, borrowings or other funds flows incurred between the Financial
Settlement Center and Hefei Royalstar Washing Equipment Manufacturing Co.,
Ltd..
6. The commitment by GD Midea Holding on housing properties with no
ownership certificates of the target company for sale is detailed as follows. Two
pieces of the buildings of Royalstar Washing Equipment assessed and sold to the
Company are of no ownership certificates—the warehouse for half-finished
products (176 square meters) and the workshop for injection molding (834 square
meters), both located in the old factory of Royalstar Washing Equipment, Hewa
Road, Hefei. GD Midea Holding has promised that if loss occurs due to the said
two buildings without ownership certificates in the asset disposal process in the
future, it will assume the loss thus caused and make compensation to the Company.
7. The commitment by GD Midea Holding on trademarks is detailed as
follows. (1) Concerning the ―Midea‖ trademark: Upon approval and
implementation of the equity transfer transaction, GD Midea Holding has promised
that it will make sure that Royalstar Washing Equipment uses the ―Midea‖
trademark in a proper manner. Royalstar Washing Equipment will be allowed to use
the ―Midea‖ trademark with a trademark use fee not more than that paid by Midea
Group (the controlling shareholder of GD Midea Holding) and its subsidiaries
(currently 3‰ of the annual sales income generated by products using the ―Midea‖
trademark), and upon negotiation and signing of the ―Agreement for Trademark
Use‖. The related-party transactions incurred due to the said use of the ―Midea‖
trademark will be submitted to the decision-making organ of the Company for
approval according to the stipulated procedure. As such, interests of the Company
and its minority shareholders will be safeguarded. (2) Concerning the ―Royalstar‖
trademark: GD Midea Holding has signed the ―Contract for Trademark Use‖ with
Royalstar Group and obtained the ordinary use rights of the ―Royalstar‖ (or ―荣事
达‖) trademark. As the transferor in the transfer transaction of equity interests of
Royalstar Washing Equipment, GD Midea Holding has promised that within the
scope as agreed in the ―Contract for Trademark Use‖, if any dispute arises between
Royalstar Washing Equipment and Royalstar Group over the former’s execution of
the ―Contract for Trademark Use‖, Little Swan will not be involved. If Royalstar
Washing Equipment and Little Swan have to assume any responsibility or loss due
to the aforesaid dispute, GD Midea Holding is willing to take on the responsibility
instead and make compensations to Royalstar Washing Equipment and Little Swan
at full amount.
8. The commitment by GD Midea Holding on social security payment and tax
risks is detailed as follows. GD Midea Holding has promised that upon the
completion of the said equity transfer deal, if Royalstar Washing Equipment is
obliged to take on any responsibility or pay relevant fares as required by relevant
17
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
government authorities due to its social security payment before the said deal, GD
Midea Holding is willing to pay relevant fares for Royalstar Washing Equipment to
relevant government authorities in a timely manner and assume any other liability.
If any loss thus occurs to Royalstar Washing Equipment or Little Swan, GD Midea
Holding is willing to assume relevant responsibilities for compensation. Upon the
completion of the said equity transfer deal, if income tax evasion or any other tax
risk is found in Royalstar Washing Equipment, GD Midea Holding is willing to
assume relevant legal responsibilities and risks and pay relevant taxes in a timely
manner to relevant government authorities; and if any loss thus occurs to Little
Swan, GD Midea Holding will assume the corresponding responsibility for
compensation.
9. The agreement on compensations in relation to earning estimates is detailed
as follows. As recognized both by Little Swan and GD Midea Holding, net profits
achieved by Royalstar Washing Equipment for 2009, 2010 and 2011 as estimated in
the ―Asset Evaluation Report‖ by adopting the income present value method are
RMB 65.32 million, 81.52 million and 91.53 million respectively. As such,
estimated net profits for 2009, 2010 and 2011 attributable to the holder of the
69.47% equity interests of Royalstar Washing Equipment are RMB 45,377,800,
RMB 56,631,900 and RMB 63,585,900 respectively. If Royalstar Washing
Equipment achieves actual annual profits less than net annual profits as estimated in
the ―Asset Evaluation Report‖ by adopting the income present value method in any
year of 2009, 2010 and 2011, the difference thereof will be paid, at the ratio of
69.47% (the ratio of equity interests of Royalstar Washing Equipment sold by GD
Midea Holding to Little Swan), by GD Midea Holding to Little Swan in cash. And
the corresponding difference will be paid to the bank account designated by Little
Swan within 10 working days since the date when the corresponding annual report
of Little Swan is disclosed.
VIII. 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 and
Other 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 reporting 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 any disguised form.
2. Up to 30 Jun. 2011, the Company didn’t provide guarantees for the controlling
shareholder or its related parties.
3. Up to 30 Jun. 2011, the Company didn’t provide debt guarantees directly or
indirectly for parties with an asset-liability ratio over 70%.
18
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
IX. Securities investments made in the reporting period
1. Equity of other listed companies held by the Company
Unit: RMB Yuan
Profits or Changes of
Amount of Shareholding Book value losses owners’
Short form of Accounting Source of
Stock Code initial ratio in the at in the equity in the
stock title stock
investment investee period-end reporting reporting
period period
Financial
Huaxin assets Private
400038 100,300.00 0.00% 322,224.00 0.00 7,796.80
Gaoke available for issue
sale
Total 100,300.00 - 322,224.00 0.00 7,796.80 - -
2. Equity of non-listed financial enterprises held by the Company
Unit: RMB Yuan
Profits or Changes of
Name of the Amount of Shareholding losses owners’ equity
Book value at Accounting Source
financial initial ratio in the in the in the
period-end title of stock
enterprise investment investee reporting reporting
period period
Long-term
Private
Bank of Jiangsu 1,210,000.00 0.00% 1,210,000.00 0.00 0.00 equity
issue
investment
Total 1,210,000.00 0.00% 1,210,000.00 0.00 0.00 - -
3. Derivative investments made in the reporting period
Unit: RMB Yuan
Gains/losses for Proportion of the closing
Opening Closing contractual
Type of contract the reporting contractual amount in the
contractual amount amount
period Company’s closing net assets
Forward
exchange 414,713,090.00 866,209,135.00 23,838,144.08 23%
contracts
X. Researches, interviews and visits received in the reporting period
Main discussion and
Time Place Way of reception Visitor materials provided by the
Company
Meeting Room of the Discussion: overall
26 Jan. 2011 Field research Beijing Gao Hua Securities
Company performance of the
Meeting Room of the Company; overall
29 Mar. 2011 Field research China Merchants Securities
Company situation of the washer
30 Mar. 2011 Meeting Room of the Field research Pingan Asset Management Co., Ltd. industry and its future
19
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Company development
Meeting Room of the Materials provided by the
30 Mar. 2011 Field research E Fund Management
Company Company:
Taiwan-based Fubon Securities, Announcements of the
Reliance Securities Investment Trust, Company
SinoPac SITC, Fubon Securities
Investment Trust, Fuh Hwa Securities
13 Apr. 2011 Teleconference Teleconference
Investment Trust, Capital Investment
Trust, Cathay Securities Investment
Trust, President Investment Trust, KGI
Securities Investment Trust
Meeting Room of the China Jianyin Investment Securities,
14 Apr. 2011 Field research
Company Invesco Great Wall
Meeting Room of the Guolian Securities, CITIC-Prudential
14 Apr. 2011 Field research
Company Fund Management
Meeting Room of the SinoPac Securities,Taishin Securities
18 Apr. 2011 Field research
Company Investment Trust
Meeting Room of the
20 Apr. 2011 Field research Emerging Markets Management
Company
3 May 2011 Teleconference Teleconference Target Asset Management
Meeting Room of the
10 May 2011 Field research Changjiang Securities
Company
Meeting Room of the
12 May 2011 Field research Bosera Funds
Company
Meeting Room of the
16 May 2011 Field research Minsheng Securities
Company
Meeting Room of the Colonial First State Global Asset
25 May 2011 Field research
Company Management
Meeting Room of the
2 Jun. 2011 Field research Penghua Fund Management
Company
Strategy Conference
One-to-one Bank of China Investment
10 Jun. 2011 held by Guosen
meeting Management
Securities
Meeting Room of the
17 Jun. 2011 Field research Industrial Securities
Company
Meeting Room of the
28 Jun. 2011 Field research Morgan Stanley
Company
XI. Information disclosed by the Company in the reporting period
Announceme Newspaper for
Contents of the announcement Date of disclosure
nt No. disclosure
Suggestive Announcement of Wuxi Little Swan Co., Ltd. on Securities Times and
2011-01 Convening the First Special Shareholders’ General Meeting for 2011.01.04 Hong Kong Ta Kung
2011 Pao
20
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Announcement of Wuxi Little Swan Co., Ltd. on Business
2011-02 2011.01.06
Performance Forecast for 2010
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-03 2011.01.10
at the First Special Shareholders’ General Meeting for 2011
Announcement of Wuxi Little Swan Co., Ltd. on Supervision
2011-04 2011.03.11
Resignation
Announcement of Wuxi Little Swan Co., Ltd. on Electing the
2011-05 2011.03.11
Employee-Representative Supervisor
Announcement of Wuxi Little Swan Co., Ltd. on Stock Trading
2011-06 2011.03.15
Particulars of the Employee-Representative Supervisor
Announcement of Wuxi Little Swan Co., Ltd. on Supervisor
2011-07 2011.03.16
Resignation
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-08 2011.03.16
at the 11th Session of the Sixth Board of Directors
2011-09 Abstract of the 2010 Annual Report of Wuxi Little Swan Co., Ltd. 2011.03.16
Notice of Wuxi Little Swan Co., Ltd. on Convening the 2010
2011-10 2011.03.16
Annual Shareholders’ General Meeting
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-11 2011.03.16
at the Eighth Session of the Sixth Supervisory Committee
Announcement of Wuxi Little Swan Co., Ltd. on the Investment
2011-12 2011.03.18
Plan for 2011
Announcement of Wuxi Little Swan Co., Ltd. on Business
2011-13 2011.04.15
Performance Forecast for the First Quarter of 2011
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-14 2011.04.18
at the 2010 Annual Shareholders’ General Meeting
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-15 2011.04.18
at the Ninth Session of the Sixth Supervisory Committee
Announcement of Wuxi Little Swan Co., Ltd. on Senior Executive
2011-16 2011.04.18
Resignation
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-17 2011.04.26
at the 12th Session of the Sixth Board of Directors
Announcement of Wuxi Little Swan Co., Ltd. on the Abstract of
2011-18 2011.04.26
the Report for the First Quarter of 2011
Announcement of Wuxi Little Swan Co., Ltd. on Adjusting an
2011-19 2011.04.26
Investment Project in 2010
Announcement of Wuxi Little Swan Co., Ltd. on Writing off Asset
2011-20 2011.04.26
Impairment Provisions
Announcement of Wuxi Little Swan Co., Ltd. on Changing
2011-21 2011.04.26
Subjects for Routine Related-party Transactions
Announcement of Wuxi Little Swan Co., Ltd. on New Routine
2011-22 2011.04.26
Related-party Transactions of Subsidiaries for 2011
Announcement of Wuxi Little Swan Co., Ltd. on Resolutions Made
2011-23 2011.04.26
at the 10th Session of the Sixth Supervisory Committee
21
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Announcement of Wuxi Little Swan Co., Ltd. on the
2011-24 2011.05.26
Implementation of Profit Distribution for 2010
All the announcements above can be found at the website designated by CSRC
(http://www.cninfo.com.cn).
Section VII Financial Report
Please see the attachments.
Section VIII Documents Available for Reference
I. Text of the Interim Report 2011 with the signature of the Chairman of the Board of
Directors.
II. Accounting statements with signatures and seals of the legal representative, the
chief financial officer and the head of accounting.
III. Originals of all documents and announcements of the Company ever disclosed on
Securities Times and Hong Kong Ta Kung Pao in the reporting period.
Wuxi Little Swan Co., Ltd.
Chairman of the Board: Fang Hongbo
25 August 2011
22
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Balance Sheet
30 Jun. 2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Closing balance Opening balance
Items
Consolidation Parent company Consolidation Parent company
Current assets：
Monetary funds 1,684,374,158.61 1,217,388,454.69 2,215,812,460.40 1,569,023,753.38
Transaction financial asset 14,945,797.68 8,843,355.56 7,778,633.32
Notes receivable 4,223,997,921.50 2,772,420,685.07 1,562,503,246.83 1,185,633,571.38
Account receivable 946,023,736.52 734,325,716.03 905,872,836.47 588,100,719.26
Account paid in advance 386,530,086.44 156,614,276.50 357,089,867.91 132,440,302.69
Interest receivable
Dividend receivable
Other account receivable 11,610,066.28 8,130,340.67 13,559,014.95 10,953,922.66
Inventories 923,715,591.12 459,484,889.46 1,050,674,093.84 491,235,367.91
Non-current assets due
-
within 1 year
Other current assets 85,340,194.63 46,664,051.15 129,556,121.17 58,455,392.54
Total current assets 8,276,537,552.78 5,403,871,769.13 6,242,846,274.89 4,035,843,029.82
Non-current assets:
Available for sale financial
322,224.00 322,224.00 312,816.00 312,816.00
assets
Held to maturity investments
Long-term account
receivable
Long-term equity investment 108,269,047.88 1,772,013,126.95 109,347,118.51 1,621,854,827.58
Investing property
Fixed asset 1,231,089,205.72 632,453,571.55 1,196,176,706.65 596,576,900.61
Project in construction 128,321,081.51 6,667,851.89 26,005,677.68 5,624,583.36
Engineering material
Fixed asset disposal
Intangible assets 237,146,005.28 111,137,977.05 240,226,821.62 112,562,533.23
Development expense
Goodwill
Long-term expense to be
61,812,067.11 53,112,815.72 63,595,950.35 42,367,001.54
apportioned
Deferred tax assets 141,547,160.43 98,609,712.88 123,064,955.62 74,350,415.21
Other non-current assets
Total of non-current assets 1,908,506,791.93 2,674,317,280.04 1,758,730,046.43 2,453,649,077.53
Total assets 10,185,044,344.71 8,078,189,049.17 8,001,576,321.32 6,489,492,107.35
Legal representative: Head of the accounting work:
Head of the accounting department:
23
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Balance Sheet （Con.）
30 Jun. 2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Closing balance Opening balance
Items
Consolidation Parent company Consolidation Parent company
Current liabilities:
Short-term borrowings 39,609,864.44 39,609,864.44 9,039,354.88 9,039,354.88
Transaction financial
liabilities
Notes payable 2,293,365,692.20 1,762,447,007.11 804,597,930.44 689,495,306.02
Account payable 3,695,767,260.88 2,313,667,991.15 2,972,319,633.40 2,000,850,684.30
Account received in advance 115,980,512.18 37,270,739.23 467,168,360.41 238,691,673.79
Employee’s compensation
132,875,213.50 47,378,668.08 146,946,246.73 43,287,248.99
payable
Tax payable 16,297,283.11 39,448,768.08 -23,947,043.15 1,410,002.45
Interest payable - -
Dividend payable 3,426,410.31 3,426,410.31 2,719,702.95 2,669,154.60
Other account payable 93,605,875.33 223,787,941.63 84,178,532.28 31,631,524.42
Non-current liabilities due
within 1 year
Other current liabilities
Total current liabilities 6,390,928,111.95 4,467,037,390.03 4,463,022,717.94 3,017,074,949.45
Non-current liabilities:
Long-term borrowings
Debentures payable
Long-term payables - -
Specific purpose account
- -
payables
Estimated liabilities 19,373,414.96 18,487,799.18
Deferred tax liabilities 2,275,158.25 1,359,791.93 1,198,672.40 31,877.40
Other non-current liabilities 8,029,750.00 1,800,000.00 8,024,850.00 1,800,000.00
Total non-current liabilities 29,678,323.21 3,159,791.93 27,711,321.58 1,831,877.40
Total liabilities 6,420,606,435.16 4,470,197,181.96 4,490,734,039.52 3,018,906,826.85
Shareholders’ equity
Share capital 632,487,764.00 632,487,764.00 632,487,764.00 632,487,764.00
Capital surplus 1,099,973,923.90 1,258,241,356.94 1,099,965,927.10 1,258,233,360.14
Less: Treasury Stock
Special reserve
Surplus reserve 212,889,613.44 200,239,469.54 212,889,613.44 200,239,469.54
Retained earnings 1,329,165,326.59 1,517,023,276.73 1,112,075,620.21 1,379,624,686.82
Foreign exchange difference -1,692,334.28 - -937,948.99
Total owners' equity
3,272,824,293.65 3,607,991,867.21 3,056,480,975.76 3,470,585,280.50
attributable to parent company
Minority interest 491,613,615.90 - 454,361,306.04
Total owner’s equity 3,764,437,909.55 3,607,991,867.21 3,510,842,281.80 3,470,585,280.50
Total liabilities and owner’s
10,185,044,344.71 8,078,189,049.17 8,001,576,321.32 6,489,492,107.35
equity
Legal representative: Head of the accounting work:
Head of the accounting department:
24
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Income Statement
Jan.-Jun. 2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Jan.-Jun. 2011 Jan.-Jun. 2010
Items
Consolidation Parent company Consolidation Parent company
I. Total operating revenues 6,747,514,122.53 4,503,507,595.18 5,510,571,940.52 3,157,205,366.22
Including: Sales income 6,747,514,122.53 4,503,507,595.18 5,510,571,940.52 3,157,205,366.22
II. Total operating cost 6,398,355,750.97 4,351,260,566.76 5,162,967,692.69 2,998,549,208.98
Including: Cost of sales 5,611,799,841.30 3,859,258,085.70 4,618,683,813.38 2,702,724,369.61
Taxes and associate charges 15,808,434.08 7,417,194.31 9,960,084.40 8,880,004.63
Sales expense 524,121,604.12 318,150,362.73 354,799,289.04 192,933,881.48
Administrative expenses 239,982,133.45 153,475,177.10 158,223,791.37 90,795,587.14
Financial expenses 1,111,770.69 753,612.67 19,737,720.17 13,078,376.23
Asset impairment loss 5,531,967.33 12,206,134.25 1,562,994.33 -9,863,010.11
Add: Gain/(loss) from change in fair value (―-‖ means loss) 11,689,065.84 8,843,355.56 -
Investment income 29,611,899.97 72,317,097.26 437,609.92 437,609.93
Including: income from investment on associated enterprises and joint ventures -1,078,070.63 402,609.93 402,609.93
III. Business profit 390,459,337.37 233,407,481.24 348,041,857.76 159,093,767.17
Add: non-operating income 35,813,800.82 17,807,847.27 19,925,033.10 6,528,126.00
Less: non-operating expense 8,532,952.89 6,674,075.60 11,667,290.77 7,559,028.55
Including: loss from non-current asset disposal 2,017,512.26 1,545,566.09 7,560,393.90 5,586,344.99
IV. Total profit 417,740,185.30 244,541,252.91 356,299,600.09 158,062,864.62
Less: Income tax expense 84,435,392.66 43,893,886.62 59,560,761.38 23,709,429.69
V. Net profit 333,304,792.64 200,647,366.29 296,738,838.71 134,353,434.93
Net profit attributable to shareholders of parent company 280,338,482.78 200,647,366.29 248,754,461.98 134,353,434.93
Gains and losses of minority shareholders 52,966,309.86 - 47,984,376.73
Including: net profit of the merged party before combination 114,012,593.90
VI. Earnings per share
(I) basic earnings per share 0.44 0.39
(II) diluted earnings per share 0.44 0.39
VII. Other comprehensive income -746,388.49 7,996.80 1,999.20 1,999.20
VIII. Total comprehensive income 332,558,404.15 200,655,363.09 296,740,837.91 134,355,434.13
Total comprehensive income attributable to owners of parent company 200,655,363.09 248,756,461.18 134,355,434.13
Total comprehensive income attributable to minority shareholders 52,966,309.86 - 47,984,376.73 -
There's enterprise merger under the same control in the reporting period, and net profit of the merged party before combination amounted to RMB 114,012,593.9.
Legal representative: Head of the accounting work:
Head of the accounting department:
25
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Cash Flow Statement
Jan.-Jun.2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Jan.-Jun. 2011 Jan.-Jun. 2010
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows for operating activities:
Cash received from sales of goods or rending of
3,434,839,906.65 2,148,607,456.50 2,668,783,035.21 1,790,512,564.15
services
Refund of tax and fare received 99,468,275.47 34,686,957.95 57,924,129.47 24,608,080.19
Other cash received relating to operating activities 22,789,774.26 12,645,168.45 47,820,309.11 7,814,217.65
Sub-total of cash inflows 3,557,097,956.38 2,195,939,582.90 2,774,527,473.79 1,822,934,861.99
Cash paid for goods and services 2,993,839,332.97 2,121,912,978.38 1,399,249,688.13 971,095,390.82
Cash paid to and on behalf of employees 292,624,388.63 156,651,462.53 210,424,927.73 110,386,480.30
Tax and fare paid 228,116,211.42 120,478,532.57 292,468,786.99 149,035,934.96
Other cash paid relating to operating activities 551,518,850.99 331,378,118.59 334,059,642.97 159,037,223.17
Sub-total of cash outflows 4,066,098,784.01 2,730,421,092.07 2,236,203,045.82 1,389,555,029.25
Net cash flow from operating activities -509,000,827.63 -534,481,509.17 538,324,427.97 433,379,832.74
II. Cash Flows from Investment Activities:
Cash received from return of investments - - - -
Cash received from investment income 12,179,078.24 46,179,183.00 35,000.00 35,000.00
Net cash received from disposal of fixed assets,
18,117,988.90 16,635,964.50 14,641,508.13 14,116,630.95
intangible assets and other long-term assets
Proceeds from sale of subsidiaries and other
-3,027,789.49 37,500,000.00 - -
operating units
Other cash received relating to investment
- - - -
activities
Sub-total of cash inflows 27,269,277.65 100,315,147.50 14,676,508.13 14,151,630.95
Cash paid for acquiring fixed assets, intangible
151,044,435.96 33,198,788.79 73,581,015.82 46,102,972.03
assets and other long-term assets
Cash paid for acquiring investments - - - -
Net cash used in acquiring subsidiaries and other
- 200,000.00 11,450,000.00 11,450,000.00
operating units
Other cash paid relating to investment activities - - - -
Sub-total of cash outflows 151,044,435.96 33,398,788.79 85,031,015.82 57,552,972.03
Net cash flow from investing activities -123,775,158.31 66,916,358.71 -70,354,507.69 -43,401,341.08
III. Cash Flows from Financing Activities:
Cash received from absorbing investment - - - -
Including: Cash received from increase in
- - - -
minority interest
Cash received from borrowings 76,635,770.48 76,635,770.48 - -
Other proceeds relating to financing activities - - - -
Sub-total of cash inflows from financing activities 76,635,770.48 76,635,770.48 - -
Cash paid for settling debt 46,065,260.92 - 1,000,000.00 -
Cash paid for distribution of dividends or profit or
76,637,741.32 60,923,741.32 1,035,831.41 248,220.00
reimbursing interest
Including: dividends or profit paid to minority
15,714,000.00 - - -
shareholders
Other cash payments relating to financing
- - - -
activities
Sub-total of cash outflows 122,703,002.24 60,923,741.32 2,035,831.41 248,220.00
Net cash flow from financing activities -46,067,231.76 15,712,029.16 -2,035,831.41 -248,220.00
IV. Effect of foreign exchange rate changes on
-
cash and cash equivalents
V. Net increase in cash and cash equivalents -678,843,217.70 -451,853,121.30 465,934,088.87 389,730,271.66
Add : Cash and cash equivalents at period-begin 2,119,023,194.93 1,492,995,931.54 1,553,899,535.65 743,637,877.78
VI. Cash and cash equivalents at the end of the
1,440,179,977.23 1,041,142,810.24 2,019,833,624.52 1,133,368,149.44
period
Legal representative: Head of the accounting work:
Head of the accounting department:
26
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Consolidated Statement of change in owners’ equity
Jan.-Jun.2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Amount of this period
Owners’ equity attributable to parent company
Items Less:
Special Minority interest Total shareholders' equity
Share capital Capital reserve treasury Surplus reserve Retained earnings Others
reserve
stock
I. Balance at the end of last 632,487,764.00 1,099,965,927.10 - - 212,889,613.44 1,112,075,620.21 -937,948.99 454,361,306.04 3,510,842,281.80
Add: change of accounting - - - - - - - - -
Correction of errors in - - - - - - - - -
Others - - - - - - - - -
II. Balance at the beginning of 632,487,764.00 1,099,965,927.10 - - 212,889,613.44 1,112,075,620.21 -937,948.99 454,361,306.04 3,510,842,281.80
III. Increase/ decrease of - 7,996.80 - - - 217,089,706.38 -754,385.29 37,252,309.86 253,595,627.75
(I) Net profit 280,338,482.78 52,966,309.86 333,304,792.64
(II) Other comprehensive - 7,996.80 - - - - -754,385.29 - -746,388.49
Subtotal of (I)and (II) - 7,996.80 - - - 280,338,482.78 -754,385.29 52,966,309.86 332,558,404.15
(III) Input an reduced capital of - - - - - - - - -
1. Input capital of shareholders - - - - - - -
2. Amount of shares included in - - - - - - - - -
3. Others - - - - - - - -
(IV) Profit distribution - - - - - -63,248,776.40 - -15,714,000.00 -78,962,776.40
1．Withdrawing surplus - - - - - - - - -
2. Withdrawing general risk -
3．Distribution to shareholders - - - - - -63,248,776.40 - -15,714,000.00 -78,962,776.40
4. Others - - - - - - - - -
(V)Internal carrying forward of - - - - - - - - -
1. New increase of capital - - - - - - - - -
2. Convert surplus reserves to - - - - - - - - -
3. Surplus reserves make up - - - - - - - - -
4. Others - - - - - - - - -
(VI)Internal carrying forward of - - - - - - - - -
1. Special reserve - - - - - - - - -
2. Fund used in this period - - - - - - - - -
IV. Closing balance of this 632,487,764.00 1,099,973,923.90 - - 212,889,613.44 1,329,165,326.59 -1,692,334.28 491,613,615.90 3,764,437,909.55
Legal representative: Head of the accounting work: Head of the accounting department:
27
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Consolidated Statement of change in owners’ equity (Con.)
Jan.-Jun.2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Amount of last period
Owners’ equity attributable to parent company
Items Less:
Special Minority interest Total shareholders' equity
Share capital Capital reserve treasury Surplus reserve Retained earnings Others
reserve
stock
I. Balance at the end of last 547,655,760.00 1,181,301,233.97 - - 188,199,322.55 629,848,832.97 366,487,072.33 2,913,492,221.82
Add: change of accounting - - - - - - - - -
Correction of errors in - - - - - - - - -
Others - - - - - - - - -
II. Balance at the beginning of 547,655,760.00 1,181,301,233.97 - - 188,199,322.55 629,848,832.97 - 366,487,072.33 2,913,492,221.82
III. Increase/ decrease of 84,832,004.00 -81,335,306.87 - - 24,690,290.89 482,226,787.24 -937,948.99 87,874,233.71 597,350,059.98
(I) Net profit - - - 506,917,078.13 - 102,820,936.32 609,738,014.45
(II) Other comprehensive - - - - - -937,948.99 - -937,948.99
Subtotal of (I)and (II) - - - - - 506,917,078.13 -937,948.99 102,820,936.32 608,800,065.46
(III) Input an reduced capital of 84,832,004.00 -81,335,306.87 - - - - - -14,946,702.61 -11,450,005.48
1. Input capital of shareholders 84,832,004.00 -84,832,009.48 - - - - - -5.48
2. Amount of shares included in - - - - - - - - -
3. Others - 3,496,702.61 - - - - - -14,946,702.61 -11,450,000.00
(IV) Profit distribution - - - - 24,690,290.89 -24,690,290.89 - - -
1．Withdrawing surplus - - - - 24,690,290.89 -24,690,290.89 - - -
2. Withdrawing general risk - - - - - - - - -
3．Distribution to shareholders - - - - - - - - -
4. Others - - - - - - - - -
(V)Internal carrying forward of - - - - - - - - -
1. New increase of capital - - - - - - -
2. Convert surplus reserves to - - - - - - - - -
3. Surplus reserves make up - - - - - - - - -
4. Others - - - - - - - - -
(VI)Internal carrying forward of - - - - - - - - -
1. Several reserve - - - - - - - - -
2. Fund used in this period - - - - - - - - -
IV. Closing balance of this 632,487,764.00 1,099,965,927.10 - - 212,889,613.44 1,112,075,620.21 -937,948.99 454,361,306.04 3,510,842,281.80
Legal representative: Head of the accounting work: Head of the accounting department:
28
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Statement of change in owners’ equity of Parent Company
Jan.-Jun.2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Amount of this period
Owners’ equity attributable to parent company
Items Less:
Special Minority interest Total shareholders' equity
Share capital Capital reserve treasury Surplus reserve Retained earnings Others
reserve
stock
I. Balance at the end of last year 632,487,764.00 1,258,233,360.14 - - 200,239,469.54 1,379,624,686.82 - - 3,470,585,280.50
Add: change of accounting policy - - - - - - - - -
Correction of errors in previous - - - - - - - - -
Others - - - - - - - - -
II. Balance at the beginning of 632,487,764.00 1,258,233,360.14 - - 200,239,469.54 1,379,624,686.82 - - 3,470,585,280.50
III. Increase/ decrease of amount - 7,996.80 - - - 137,398,589.91 - - 137,406,586.71
(I) Net profit - - - 200,647,366.29 - 200,647,366.29
(II) Other comprehensive income - 7,996.80 - - - - - - 7,996.80
Subtotal of (I)and (II) - 7,996.80 - - - 200,647,366.29 - - 200,655,363.09
(III) Input an reduced capital of - - - - - - - - -
1. Input capital of shareholders - - - - - - - - -
2. Amount of shares included in - - - - - - - - -
3. Others - - - - - - - - -
(IV) Profit distribution - - - - - -63,248,776.38 - - -63,248,776.38
1．Withdrawing surplus reserve - - - - - - - - -
2. Withdrawing general risk -
3．Distribution to shareholders - - - -63,248,776.40 - - -63,248,776.40
4. Others - - - - - 0.02 - - 0.02
(V)Internal carrying forward of - - - - - - - - -
1. New increase of capital (share - - - - - - - - -
2. Convert surplus reserves to - - - - - - - - -
3. Surplus reserves make up - - - - - - - - -
4. Others - - - - - - - - -
(VI)Internal carrying forward of - - - - - - - - -
1. Special reserve - - - - - - - - -
2. Fund used in this period - - - - - - - - -
IV. Closing balance of this period 632,487,764.00 1,258,241,356.94 - - 200,239,469.54 1,517,023,276.73 - - 3,607,991,867.21
Legal representative: Head of the accounting work: Head of the accounting department:
29
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Statement of change in owners’ equity of Parent Company (Con.)
Jan.-Jun.2011
Prepared by Wuxi Little Swan Company Limited Unit: RMB Yuan
Amount of last period
Owners’ equity attributable to parent company
Items Less:
Special Minority interest Total shareholders' equity
Share capital Capital reserve treasury Surplus reserve Retained earnings Others
reserve
stock
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 - - - - - - - - -
Others - - - - - - - - -
II. Balance at the beginning of 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 84,832,004.00 746,130,242.87 - - 24,690,290.89 222,212,618.03 - - 1,077,865,155.79
(I) Net profit 246,902,908.92 246,902,908.92
(II) Other comprehensive income - - - - - - - -
Subtotal of (I)and (II) - - - - - 246,902,908.92 - - 246,902,908.92
(III) Input an reduced capital of 84,832,004.00 746,130,242.87 - - - - - - 830,962,246.87
1. Input capital of shareholders 84,832,004.00 746,130,242.87 - - - - - - 830,962,246.87
2. Amount of shares included in - - - - - - - - -
3. Others - - - - - - - - -
(IV) Profit distribution - - - - 24,690,290.89 -24,690,290.89 - - -
1．Withdrawing surplus reserve - - - - 24,690,290.89 -24,690,290.89 - - -
2. Withdrawing general risk - - - - - - - - -
3．Distribution to shareholders - - - - - - -
4. Others - - - - - - - - -
(V)Internal carrying forward of - - - - - - - - -
1. New increase of capital (share - - - - - - - - -
2. Convert surplus reserves to - - - - - - - - -
3. Surplus reserves make up - - - - - - - - -
4. Others - - - - - - - - -
(VI)Internal carrying forward of - - - - - - - - -
1. Special reserve - - - - - - - - -
2. Fund used in this period - - - - - - - - -
IV. Closing balance of this period 632,487,764.00 1,258,233,360.14 - - 200,239,469.54 1,379,624,686.82 - - 3,470,585,280.50
Legal representative: Head of the accounting work: Head of the accounting department:
30
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
For the Six Months Ended 30 Jun. 2011
Note I Corporate information
Wuxi Little Swan Company Ltd. (hereinafter referred to as ―the Company‖) was founded as a
oriented-collection company limited with the approval of Su-Ti-Gai-Sheng (1993) No. 253
document from Economic Reform Commission of Jiangsu Province. Then the Company issued
70,000,000 shares of B-share and transformed to a state-collectively–owned enterprise with the
approval of (1996) No. 52 document from Jiangsu Jiangsu Province of the People’s Republic of
China (the ―PRC‖), Zheng-Wei-Fa (1996) No. 14 document from China Securities Regulatory
Commission of the State Council and Shen-Zheng-Ban-Han (1996) No. 4 from Shenzhen
Municipal Securities Regulatory Office. And the total raised fund from this issuance of B-share
totaled RMB 310 million, and the Company was formally listed in Shenzhen Stock Exchange on
Jul. 1996 with the short form of stock as Little Swan B and stock code as 200418.
In Mar. 1997, the Company publicly issued 60,000,000 shares of renminbi ordinary share
(including 9,000,000 shares of staff-share) by adopting the way of internet pricing with the
approval of Zheng-Jian-Fa-Zi (1997) No. 55 from CSRC. And the total raised fund from this
issuance of A-share totaled RMB 720.83 million, and the Company was formally listed in
Shenzhen Stock Exchange in Mar. 1997 with the short form of stock as Little Swan A and stock
code as 000418.
The Company finished the Equity Division Reform Plan on 7 Aug. 2006: the Company’s A-share
holders registered on the changing date of equity ownership gained 2.5 shares of consideration
share from un-tradable shareholders with their every ten shares of tradable A-share. All
un-tradable shareholders paid for shares consideration of shares totaling 18 million, of which
they acquired shares’ rights for trading.
The Company’s resolutions of Shareholders’ General Meeting for Y2007: the newly added
registered capital was RMB 182,551,920, adding five shares to every ten shares basing on the
total share capital of 365,103,840 shares at the end of 2007, transferring the public reserves to
182,551,920 shares with par value of RMB 1 per share, thus the added share capital totaled RMB
182,551,920.
According to the resolutions of the 4th Session of the Sixth Board of Directors and the 1st
Provisional Shareholders General Meeting in 2010, having approved by China Securities
Regulatory Commission (SFC license [2010] 1577), the company launched directional
add-issuance of 84,832,004 A shares to buy 69.47% of the shares of Hefei Royalstar Washing
Machine Manufacture Co., Ltd from its shareholder Midea Electric Appliances Co., Ltd. Par
value per share is RMB 1, and the issue price is RMB8.63 per share. This add-issuance increased
the share capital by RMB 84,832,004. As of 31 Dec. 2010, registered capital of the company is
RMB 632,487,764, among which the restricted exchange-traded A shares are 92,511,524 shares,
accounting for 14.63% of the whole shares; the unrestricted exchange-traded A shares are
348,940,368 shares, accounting for 55.17%; and the unrestricted exchange-traded B shares are
191,035,872 shares, account for 30.20% of the whole shares.
1. Company profile
Registered Address: No. 18, Changjiang South 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
The Company belongs to household appliances so the main business scope is as follows:
31
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
manufacture and sales as well as after-sale service of household appliances, industrial ceramics,
environmental dry-cleaning equipment, cleaning mechanical equipment, subsequent finishing
equipment and accessory; cleaning service; machinery processing; import and export business of
―Little Swan‖ or agent products and technologies (excluding the products or technology
restricted to operate, export or import in China); technical service for household appliances;
contracting foreign engineering in international bidding (operate with effective certificate)
3. Name of the parent company
Parent company: GD MIDEA HOLDING 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 the
date of 25 Aug. 2011.
Note II Summary of Main Accounting Policies, Accounting Estimate and Prior Errors
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 the 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,
32
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
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; All
direct expenses related to the combination paid by the acquirer, including the auditor fee,
evaluation expense, legal service expense, etc will be recorded into the profit and loss
of the current period.
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 actual control.
The consolidated financial statements will be subject to the No. 33 Enterprise Accounting
Standards –Consolidated Financial Statement. In preparing the consolidated financial statements,
all key accounts and transactions between the company and subsidiaries, subsidiaries and
subsidiaries will be offset. The net assets of merged subsidiaries 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 subsidiaries differ from those of parent
company, the financial statements of subsidiaries will be adjusted.
For those subsidiary acquired not under the same control, the Company has made relevant
adjustment in the subsidiary’ financial statement according to the fair value of identifiable net
assets; for those subsidiary acquired under the same control, when preparing the consolidated
financial statements, the reporting subject after combination is considered to operate since the
ultimate controller carried out control, and adjusted the opening balance of consolidated balance
sheet as well as the relevant items in the consolidated statements.
7. Recognition criterion of 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 spot
exchange rate issued by The People’s Bank of China on the transaction date. The foreign currency
conversions and any transactions involved foreign currency conversions have been translated in to
RMB at the actually used exchange rate during the transaction process.
On the balance sheet date, the company treats the foreign currency monetary items and foreign
currency non-monetary items according to the following provisions:
(1)The foreign currency monetary assets and liabilities items have been translated at the spot
exchange rate issued by The People’s Bank of China on the balance sheet date. The exchange
33
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
difference arising from the difference between the spot exchange rate on the balance sheet date
and the spot exchange rate at the time of initial recognition shall be recorded in the exchange
difference in the current period. Of which, the exchange difference arising from those foreign
currency borrowings specifically for the construction of fixed assets shall be treated by the
principle for capitalization of borrowing cost; and the exchange difference happened during the
handling period shall be recorded as handling charges; other cost shall be recorded as current
financial expenses.
(2)A foreign currency non-monetary item measured at the historical costs shall still be translated at
the spot exchange rate by The People’s Bank of China on the transaction date, of which the
amount of functional currency shall not be changed; the foreign currency non-monetary items
measured at their fair values have been translated at the spot exchange rate issued by The People’s
Bank of China on the recognition date for the fair value, the exchange difference thereupon shall
be considered as changes in fair value, and recorded into gains and losses of the current period.
The asset and liability items in the balance sheet about the overseas businesses of the company
have been translated at the spot exchange rate on the balance sheet date. Among the owner’s
equity items, except for the items as ―undistributed profits‖, other items have been translated at the
spot exchange rate at the time when they are incurred. The income and expense items in the profit
statement have been translated at an exchange rate which is approximate to the spot exchange rate
of the transaction date. The differences arising from the translation of foreign currency financial
statements in compliance with the aforesaid items have been presented separately under the
owner’s equities of the balance sheets. Foreign currency cash flows and the cash flows of foreign
subsidiaries have been translated at an exchange rate which is approximate to the spot exchange
rate at the time when the cash flows incurred. The differences arising from fluctuations in
exchange have been presented separately in the statement of cash flows.
9. Financial instruments
(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) transactional financial assets, which are measured at fair value with variations of fair value
accounted into current income account;
b) financial assets available for sale, which are measured at fair value with the variations
accounted into shareholders' equity;
c) account receivables measured at the post-amortization costs; and
d) held-to-maturity investments, which are also measured at the post-amortization costs.
The company has divided its financial liabilities into one category measured at fair value with
variations accounted into current profit and loss and another category measured at the
post-amortization costs.
(2) Recognition of the fair value of financial assets and liabilities.
When there is an active market for the financial instrument, the quoted prices for the financial
assets the company holds or the financial liabilities plans to bear, as well as the financial assets
plans to acquire or financial liabilities born shall be the present actual offer, while the quoted
prices for the financial assets the company plans to acquire or the financial liabilities it has
assumed shall be the available charge. But if there is no actual offer or available charge, the
Company shall adopted the quoted price at recent transaction or the adjusted quoted price at recent
transaction, except for any evidence showing that the quoted price is not 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
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
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) Recognition and measurement of finance asset transferring
The term "transfer of a financial asset" refers to the company’s (the transferor's) transferring or
delivering a financial asset to a party other than the issuer of the financial asset (the transferee).
Transfer of a financial asset could be the whole asset or part of it. It includes the following two
cases:
① The Company transfers the right to another party for receiving the cash flow of the financial
asset; and;
② The Company transfers the financial asset to another party, but maintains the right to receive
the cash flow of the financial asset and undertakes the obligation to pay the cash flow it receives to
the final recipient.
Where the Company has transferred nearly all of the risks and rewards related to the ownership of
the financial asset or part of this asset to the transferee, it shall stop recognizing the financial asset
or part of this asset. The difference arising from the sum of consideration received from the
transfer and the book value of this asset should be accounted into the profit and loss. If it retained
nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop
recognizing all or part of the financial asset, and the consideration received shall be recorded as
the financial liability.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the
ownership of a financial asset, but it does not give up its control over the financial asset, it shall,
according to the extent of its continuous involvement in the transferred financial asset, recognize
the related financial asset and recognize the relevant liability accordingly.
(4) Termination of recognition for financial assets and liabilities
Where a financial asset satisfies any of the following requirements, the recognition of it shall be
terminated:
Where the contractual rights for collecting the cash flow of the said financial asset are terminated;
or
Where the said financial asset has been transferred and meets the conditions for recognizing the
termination of financial assets as provided for in Accounting Standards for Enterprises No. 23 -
Transfer of Financial Assets.
Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly.
(5) Impairment of financial assets
The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of
the financial assets other than transactional financial assets. Where there is any objective evidence
proving that such financial asset has been impaired, an impairment provision shall be made. An
impairment test shall be made on the financial assets with significant single amounts. If any
objective evidence shows that it has been impaired, the impairment-related losses shall be
recognized and shall be recorded into the profits and losses of the current period. With regard to
the financial assets with insignificant single amounts, an independent impairment test may be
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
carried out, or they may be included in a combination of financial assets with similar credit risk
features so as to carry out an impairment-related test.
The expression "objective evidence proving that the financial asset has been impaired" refers to
the actually incurred events which, after the financial asset is initially recognized, have an impact
on the predicted future cash flow of the said financial asset that can be reliably measured by the
enterprise.
The objective evidences that can prove the impairment of a financial asset shall include:
① A serious financial difficulty occurs to the issuer or debtor;
② The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;
③ The creditor makes any concession to the debtor which is in financial difficulties due to
economic or legal factors, etc.;
④ The debtor will probably become bankrupt or carry out other financial reorganizations;
⑤ The financial asset can no longer continue to be traded in the active market due to serious
financial difficulties of the issuer;
⑥ It is impossible to identify whether the cash flow of a certain asset within a certain combination
of financial assets has decreased or not. But after making an overall appraisal according to the
public data available, it is found that the predicted future cash flow of the said combination of
financial assets has indeed decreased since it was initially recognized and such decrease can be
measured, for example, the ability of the debtor of the said combination of financial assets
worsens gradually, the unemployment rate of the country or region where the debtor is situated
increases, the prices of the region where the guaranty is situated are obviously dropping, or the
industrial sector concerned is in slump, etc.;
⑦ Any seriously disadvantageous change has occurred to technical, market, economic or legal
environment, etc. wherein the debtor operates its business, which makes the investor of an equity
instrument unable to take back its investment;
⑧ Where the fair value of the equity instrument investment drops significantly or not
contemporarily;
⑨ Other objective evidences showing the impairment of the financial asset.
Where a financial asset measured on the basis of post-amortization costs is impaired, the
impairment losses shall be the balance between the carrying amount of the said financial asset and
the current value of the predicted future cash flow discounted at the original actual rate.
Where any financial asset measured on the basis of post-amortization costs is recognized as
having suffered from any impairment loss, if there is any objective evidence proving that the value
of the said financial asset has been restored, and it is objectively related to the events that occur
after such loss is recognized, the impairment-related losses as originally recognized shall be
reversed and be recorded into the profits and losses of the current period. However, the reversed
carrying amount shall not be any more than the post-amortization costs of the said financial asset
on the day of reverse under the assumption that no provision is made for the impairment.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the
decrease of the fair value of the owner’s equity which was directly included shall be transferred
out and recorded into the profits and losses of the current period.
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
10. Accounts Receivable
(1) Withdrawal method of bad debt provision on the individually significant receivables
① Recognition criterion 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 10 millions (and including 10 millions); 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).
② Withdrawal method of the individually significant accounts receivable
For the individually significant receivables, the impairment test is carried on individually; the
Company withdraws 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) Withdrawal method of bad debt provisions on the receivables which are not individually
significant, but are assessed at high risk level through credit risk combination.
① Recognition basis of credit risk characteristics combination for accounts receivable:
The receivables with credit risk characteristics combination are involved in pending lawsuits or
dissolution of the debtor company, and the receivables with the age of over 3 years (excluding the
individually significant receivables).
② Withdrawal method of accounts receivable by adopting credit risk characteristics combination
For the individually significant receivables, the impairment test is carried on individually; the
Company withdraws 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, and recognizes the impairment loss by certain proportion of the closing
balance of these accounts receivable combination as, and also withdraws the bad debt provision.
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:
Provision rate for Accounts Provision rate for Other Receivables
Aging
Receivable（%） （%）
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
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
combination scope. When the subsidiaries suffer excess loss, impairment tests are carried on and
impairment 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
raw materials, low-value consumables, products in process, 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 net 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 realizable value. At overall verification of inventories at the end of year, when the
net realizable 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 realizable value. Including: for inventories such
as finished products, goods 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. On 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 realizable values of those items may
be determined on an aggregate basis. For large quantity and low value items of inventories, cost
and net realizable value are determined based on categories of inventories.
(4) Inventory system
The Company uses perpetual inventory system. Inventories are checked periodically and the gains
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
The initial cost of the long-term equity investment formed in the merger of an enterprise shall be
recognized in accordance with the ways of gaining:
① For the merger of enterprises under the same control, it shall, on the date of merger, regard the
share of the book value of the owner's equity of the merged enterprise as the initial investment cost
of the long-term equity investment; the difference between the acquisition cost and the initial
investment cost of the long-term equity investment shall offset against the capital reserve. If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
② For the merger of enterprises not under the same control, the initial cost of long-term equity
investment is the fair value of assets paid, equity bonds issued, or liabilities undertaken by the
Company. The identifiable assets and liabilities undertaken (including contingent liabilities) of
merged party shall be measured by the fair value without considering the amount attributable to
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
minority interest.
Where the cost of a business combination exceeds the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference shall be recognized as goodwill. Where the cost of
combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, after reassessment, the difference shall be recognized in consolidated income statement.
③ The initial cost of a long-term equity investment obtained by other ways
A. The initial cost of a long-term equity investment obtained by making payment in cash shall be
the purchase cost which is actually paid.
B. The initial cost of a long-term equity investment obtained on the basis of issuing equity
securities shall be the fair value of the equity securities issued.
C. The initial cost of a long-term equity investment of an investor shall be the value stipulated in
the investment contract or agreement except the unfair value stipulated in the contract or
agreement.
D. Long-term equity investment is acquired by exchange of non-monetary assets, if this
transaction has commercial substance, the fair values of these swap-out assets will be deemed as
the initial investment cost of swap-in long-term equity investment; if the non-currency asset
exchange does not have commercial substance, the carrying amount of these swap-out assets will
be deemed as the initial investment cost of swap-in long-term equity investment.
E. The initial cost of a long-term equity investment obtained by recombination of liabilities shall
be recognized as the fair value of the long-tern equity investment.
(2) Subsequent measurement and recognition of gain/loss
① Adopting cost method for investment in subsidiaries
The subsidiary is the equity investment held by the Company, on which the Company can carry
out control. If the Company holds more than 50% equity of an entity, or the Company holds less
than 50% equity but has actual control on such entity, then the entity can be considered as the
subsidiary of the Company.
② Adopting equity method for investment on joint ventures or associated enterprises
Joint venture is the equity investment held by the Company, which can carry out joint control over
an invested entity with other joint ventures; associated enterprise is the equity investment held by
the Company, which can have significant influence over an invested entity. If the Company held
20% to 50% equity of an entity, and have not actual control on such entity, or the Company holds
less than 20% equity of the entity but have not significant influence on such entity, then the entity
will be the Company’s joint venture or associated enterprise.
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits
and losses of the invested entity after it adjusts the net profits of the invested entity.
If the accounting policies and accounting periods adopted by the invested entity are different from
those adopted by the investing enterprise, an adjustment shall be made to the financial statements
of the invested entity in accordance with the accounting policies and accounting periods of the
Company and recognize the investment profits or losses.
Where any change is made to the owner's equity other than the net profits and losses of the
invested entity, the book value of the long-term equity investment shall be adjusted and be
included in the owner's equity.
③ The long-term equity investment existing no control, joint control or significant influence by
the Company
The long-term equity investment without quotation in the active market and its fair value can’t be
reliably measured, which shall be measured by cost method.
The long-term equity investment with quotation in the active market or its fair value can be
reliably measured, which is listed under the item of available-for-sale financial assets and
measured by fair value, whose change in fair value shall be recorded into owners’ equity.
(3) Basis of recognizing common control and significant influence on investee
Common 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.
Significant influences mean an entity has the power to participate in the decision making of
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
another, but cannot dominate individually or jointly with other parties.
(4) Methods of impairment examination and providing of impairment provision
On the balance sheet day, if evidence showing that impairment occurred on the long-term equity
investment, the recoverable amount shall be estimated. When the recoverable amount of the
long-term equity investment is lower than the book value, asset impairment provision should be
withdrawn in accordance with the difference between the recoverable amount and the book value
is recognized.
The long-term equity investment without quotation in the active market and its fair value can’t be
reliably measured, the balance of its carrying amount lower than the current value of the future
cash flow of similar financial assets capitalized according to the returns ratio of the market at the
same time shall be recognized as impairment losses and be recorded into the profits and losses of
the current period.
Once impairment loss of the long-term equity investment, excluding available-for-sale financial
assets, is recognized, it will not be switched back in following fiscal terms, while the impairment
loss of available-for-sale financial assets can be switched back.
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 make a follow-up measurement on the investment
properties, while employs the straight method to calculate the depreciation and amortization
during the estimated useful life. And the house property is depreciated by 20 years (adopt the
lower one between the legal useful life and the predicted useful life), while the landed property is
amortized by 50 years (legal useful life).
The withdrawal method of the impairment provision for investment properties is in accordance
with the same withdrawal method of fixed assets.
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, whose relevant economic interest is likely to flow into the Company.
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 by
the 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
Houses & 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%
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
(3) Methods of impairment testing and impairment provisions for fixed assets
The Company checks the fixed asset at the period end, if it has the following situations, then the
Company shall check the recoverable amount to judge whether such asset has been impaired.
Where its recoverable amount is lower than its book value, the Company shall, basing on the
difference between the recoverable amount and the relevant book value, make the provision for
the impairment of the assets. When withdrawing the impairment provision for a single asset, and if
it is difficult to do so, it shall determine the recoverable amount of the group assets on the basis of
the asset group to which the asset belongs. Once the impairment loss was recognized, it will not be
switched back in coming fiscal terms.
① The current market price of assets falls, and its decrease is obviously higher than the expected
drop over time or due to the normal use;
② The assets have become obsolete or have been damaged substantially;
③ The expected usage mode of an asset has significant adverse change, such as the asset becomes
idle, or the Company plans to discontinue or to reorganize the business of the asset, or dispose of
an asset before the previously expected date, etc., which cause adverse impact on the Company;
④ The economic, technological or legal environment in which the enterprise operates, or the
market where the assets is situated will have any significant change in the current period or in the
near future, which will cause adverse impact on the enterprise;
⑤ The market interest rate or any other market investment return rate at the same period has risen
in the current period, and thus the discount rate of the enterprise for calculating the expected future
cash flow of the assets will be affected, which will result in great decline of the recoverable
amount of the assets;
⑥ Any evidence in the internal report of the enterprise shows that the economic performance of
the assets have been or will be lower than the expected performance, for example, the net cash
flow created by assets or the operating profit (or loss) realized is lower (higher) than the excepted
amount, etc.; and
⑦ Other evidence indicates that the impairment of assets has probably occurred.
(4) Recognition and measurement of fixed assets acquired under finance lease
Where a lease of fixed asset satisfies one or more of the following criteria, it shall be recognized
as a finance lease:
① The ownership of the leased asset is transferred to the lessee when the term of lease expires;
② The Company has the option to buy the leased asset at a price which is expected to be far lower
than the fair value of the leased asset at the date when the option becomes exercisable. Thus, on
the lease beginning date, it can be reasonably determined that the option will be exercised;
③ Even if the ownership of the asset is not transferred, the lease term covers the major part of the
use life of the leased asset;
④ In the case of the lessee, the present value of the minimum lease payments on the lease
beginning date amounts to substantially all of the fair value of the leased asset on the lease
beginning date;
⑤ The leased assets are of a specialized nature that only the Company can use them without
making major modifications. For the fixed asset leased by financial lease, on the lease beginning
date, the Company shall record the lower one of the fair value of the leased asset and the present
value of the minimum lease payments on the lease beginning date as the entering value in an
account, recognize the amount of the minimum lease payments as the entering value in an account
of long-term account payable, and treat the balance between the recorded amount of the leased
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
asset and the long-term account payable as unrecognized financing charges. The initial direct costs
such as commissions, attorney's fees and traveling expenses, stamp duties directly attributable to
the leased item incurred during the process of lease negotiating and signing the leasing agreement
shall be recorded in the asset value of the current period. The unrecognized financing charge shall
be amortized to each period during the lease term at the actual rate.
The depreciation method of fixed assets acquired under finance lease is consistent with that for the
Company’s fixed assets. 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
(1) Pricing of construction in progress
The Company measures the project cost in accordance with actual expenditures occurred. The
self-operating project is measured in accordance with the costs of direct materials, direct wages,
direct construction and etc.; and the Contracting project is measured in accordance with the project
payment, etc.; equipment installment project is measured in accordance with the value of the
installed equipment, installment expense and expense for test run of project, etc.. Besides, the cost
for construction in progress also includes the borrowing costs and profits or losses from foreign
currency exchange.
(2) The standard and time point of the construction in progress transferred to fixed assets
Construction in progress is transferred to fixed assets by project budget, construction cost or actual
project cost when the project is substantially ready for its intended use, and made provision for
depreciation from the next month. Then the Company shall adjustment on the difference caused by
the original value of fixed assets after finishing the final account.
(3) Recognition criterion and withdrawal method of impairment provision of construction in
progress:
At the end of the year, the Company shall assess the overall construction in progress, if there is
evidence providing that the value of project was impaired, the Company shall estate the
recoverable amount, and make the provision for the impairment loss in accordance with the
balance of the project’s recoverable amount lower than its book value. Once any loss of asset
impairment is recognized, it shall not be switched back in the future accounting periods.
16. Borrowing expenses
(1) Capitalization of borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums
on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. The
Company’s borrowing costs, caused by occupying the special borrowings or general borrowings to
gain the fixed assets, investment properties, and inventories that need one year or more than one
year’s acquisition or construction, shall be capitalized, and recorded in the cost of relevant assets.
Other borrowing costs shall be recognized as expense upon their occurrence, and recorded into
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
current profits and losses. The relevant 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.
(2) Capitalization period of borrowing costs
The borrowing costs caused by acquiring or constructing fixed assets, investment properties and
inventories, which meet the above capitalization conditions and happened before the assets
reaching expected useful status or available-for-sale status, shall be recorded into costs of assets;
Capitalization of borrowing costs shall 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 shall be recognized directly in profit or loss during the current period until
the acquisition or construction activities resume again; Capitalization of borrowing costs ceases
when the qualifying asset being acquired or constructed is substantially ready for its intended use.
Subsequent borrowing costs shall be directly recorded into current finance expense upon
occurrence.
(3) Calculation method of capitalization for borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring & constructing or
producing a qualifying asset, the to-be-capitalized amount of interests shall be determined in light
of the actual interests incurred of the specially borrowed loan at the present period minus the
income of interests earned on the unused borrowing loans as a deposit in the bank or as a
temporary investment.
To the extent that funds are borrowed generally and used for the purpose of acquiring &
constructing or producing a qualifying asset, the Company shall calculate and determine the
to-be-capitalized amount of interest from the general borrowing by multiplying the weighted
average asset disbursement of the part of the accumulative asset disbursements minus the general
borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be
calculated and determined in light of the weighted average interest rate of the general borrowing.
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 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.
Intangible assets is acquired by exchange of non-monetary assets, if this transaction has
commercial substance, the fair values of these swap-out assets will be deemed as the initial
investment cost of intangible assets; if the non-currency asset exchange does not have commercial
substance, the carrying amount of these swap-out assets will be deemed as the initial investment
cost of intangible assets.
Intangible asset is acquired by debt reorganization, which shall be recognized by the fair value.
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Expenditures for the self-researched and developed intangible asset incurred during its research
phase shall be recognized as current profits and losses upon its occurrence. Expenditures incurred
during the development phase shall be recognized as an intangible asset if, and only if, the
Company can demonstrate all of the following:
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ There is a potential market for the products manufactured by applying the intangible assets or
there is a potential market for the intangible assets itself
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources;
⑤ The development expenditures of the intangible assets can be reliably measured.
⑥The use of the intangible products cycle is more than 1 year.
(2) Amortization method and usage life 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 the lest number among the expected 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.
(3) Recognition criterion and withdrawal method of intangible assets：
The Company shall carry out impairment test on intangible assets without certain useful life , such
as trade mark, at year-end. And the Company shall estimate its recoverable amount and make the
provision for impairment loss of such intangible asset by the balance of the recoverable amount
lower than its book value.
The Company shall check the other intangible assets at the year-end, where there is any evidence
indicating a possible impairment of assets, the Company shall estimate the recoverable amount,
and make provision for impairment losses of such intangible asset in accordance with the balance
of the recoverable amount lower than the book value. 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 its ability to create
economic interests for the company;
② The price fell sharply in current period, and is not expected to increase in its remaining
amortization period;
③ Over the time limit of legal protection, but still has some use-value；
④ Other facts 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 (excluding one year), including expenses of molds and technical guide,
etc. The Company amortizes long-term deferred expenses using straight-line method according to
relevant beneficial periods or its usage life if there are, otherwise, amortizes in five years.
19. Estimated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following
conditions are satisfied, they are recognized as estimated liability in the balance sheet:
44
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
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.
Estimated 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 estimated liability is
revised at balance sheet day, and adjustment will be made to reflect current best estimation.
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) Rendering 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, the Company can, on the date of the balance sheet, reliably
estimate the outcome of a transaction concerning the labor services it provides, it shall recognize
the revenue from providing services employing the percentage-of-completion method. The
Company measures the completion progress (percentage of completion) in accordance with the
proportion of the costs incurred against the estimated total costs.
(3) Demising of asset using rights
Income is recognized when the financial benefit in connection with the demising of asset using
rights 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.
The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. But the government subsidies measured at their nominal amounts shall be directly included
in the current profits and losses.
22. Differed income tax assets/ differed income tax liabilities
Based on the differences between the book values of assets and liabilities and taxation basis, the
45
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
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 balance sheet date, 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 balance sheet date, 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. Hedging Accounting
The term " hedging" refers to one or more hedging instruments which are designated by the
company for avoiding the risks of foreign exchange, interest rate, commodity price, stock price,
credit and etc., and which is expected to make the changes in fair value or cash flow of hedging
instrument(s) to offset all or part of the changes in the fair value or cash flow of the hedged item.
The term "hedging instrument" shall refer to a derivative instrument which is designated by the
company for hedging and by which it is expected that changes in its fair value or cash flow can
offset the changes in fair value or cash flow of the hedged item. For a hedging of foreign
exchange risk, a non-derivative financial asset or non-derivative financial liability may be used
as a hedging instrument.
The "hedged items" refer to items which make the company faced with changes in fair value or
cash flow and are designated as the hedged objectives.
For a hedging which satisfies all the following conditions, the company will deal with it through
the hedging accounting method.
(1) At the commencement of the hedging, the company shall specify the hedging relationship
formally and prepare a formal written document on the hedging relationship, risk management
objectives and the strategies of hedging.
(2) The hedging expectation is highly efficient and meets the risk management strategy, which is
confirmed for the hedging relationship by the company at the very beginning.
(3) For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to
occur and shall make the company faced to the risk of changes in cash flow, which will
ultimately affect the profits and losses.
(4) The effectiveness of hedging can be reliably measured.
(5) The hedging is highly effective in the accounting period in which the hedging relationship is
designated.
46
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
24. Change of main accounting policies and estimations
(1) Change of accounting policies
No change of accounting policies occurred in this period.
(2) Change of accounting estimations
No change of accounting estimations occurred in this period.
25. Correction of previous accounting faults
No correction of previous accounting faults occurred in the report term.
Note Ⅲ. Taxation
1. The main type of tax and tax rate for the Company
Items Tax basis tax rate
Balance of output tax of taxation revenue after deducting
VAT 17%
input tax.
Business tax Taxation revenue 5%
Urban maintenance
Payable circulating tax amount 7%
and construction tax
Education Surcharge Payable circulating tax amount 3% or 4%
Corporate income
Payable income tax amount 25% or 15%
tax
Flood Control
Operating revenue 0.1% or 0.06%
Security Fund
Levee fee Payable circulating tax amount 2%
2. Tax preference and official documents
The Company and its subsidiary, Hefei Royalstar Water Industry Facilities Co., Ltd., and Wuxi
Little Swan GE Co., Ltd. as well as Wuxi Filin Electronics Co., Ltd. won the Hi-tech Enterprise
Certificate in Mar. 2009, Nov. 2008, Mar. 2009 and May 2009 respectively, with the certificate no.
as GR200932000077, GR200834000011, GR200932000078 and GR200932000397 respectively.
According to Circular of the State Administration of Taxation on the Issues concerning the
Administration of Enterprise Income Tax Deduction and Exemption (Guo-Shui-Fa [2008] No.
111 document) and Circular of the State Administration of Taxation on the Issues concerning
Hi-tech Enterprise Paying Corporate Income Tax in 2008 (Guo-Shui-Han [2008] No. 985), the
Company and its subsidiary, Hefei Royalstar Water Industry Facilities Co., Ltd., and Wuxi Little
Swan GE Co., Ltd. as well as Wuxi Filin Electronics Co., Ltd. were approved to enjoy income
tax rate 15%
47
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Note Ⅳ: Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) The subsidiaries obtained through establishment or investment Unit：RMB(0’000)
Balance of parent
company’s equity
The
Includ after deducting the
proport Deduct
Paid-in Other ed in difference that
Shareh ion ible
Reg. Business Registered Business Capital at essential consoli Minority loss of minority
Subsidiaries Categories olding of minorit
Add. nature capital scope period-en investment dated Interest interests exceed
ratio voting y
d to subsidies statem equity
rights interest
ents obtained by
(%)
minority
shareholders
Wuxi Little Manufact
Swan General ure of
Holding
Electric Wuxi Production 2,800.00 washing 1,960.00 70.00 70.00 Yes 4,363.29
subsidiaries
Appliances machine
Co. , Ltd. and dryers
Developm
Wuxi Little
ent &
Swan Driving
research
& Control Holding
Wuxi R&D 500 of driving 450.00 97.30 100.00 Yes 39.97
Development subsidiaries
& control
Technology
technolog
Co. , Ltd.
y
Manufact
ure of
computer
Wuxi Filin
Holding control
Electronics Wuxi Production USD362.46 1,962.00 73.00 73.00 Yes 5,290.13
subsidiaries componen
Co. , Ltd.
ts for
washing
machine
Manufact
Wuxi Little ure and
Swan Washing Holding sale of
Wuxi Production 4967.95 3,725.96 99.91 99.91 Yes - -3,793.85
Machine Co. , subsidiaries commerci
Ltd. al washing
machine ,
48
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Balance of parent
company’s equity
The
Includ after deducting the
proport Deduct
Paid-in Other ed in difference that
Shareh ion ible
Reg. Business Registered Business Capital at essential consoli Minority loss of minority
Subsidiaries Categories olding of minorit
Add. nature capital scope period-en investment dated Interest interests exceed
ratio voting y
d to subsidies statem equity
rights interest
ents obtained by
(%)
minority
shareholders
dryers and
spare parts
Wuxi Meitian
Sales of
Refrigerator Holding
Wuxi Trading USD400 refrigerato 2,484.00 75.00 75.00 Yes - -2,846.52
Market Co., subsidiaries
r
Ltd.
Jiangsu Little
Sales of
Swan
Holding household
Marketing and Wuxi Trading 41,950.00 41,755.00 99.64 99.64 Yes - -6,504.04
subsidiaries electrical
Sales Co. ,
appliances
Ltd.
Import &
Wuxi Little
export of
Swan Import Holding Import &
Wuxi 6,500.00 electric 5,750.00 88.46 88.46 Yes - -127.16
& Export Co. , subsidiaries Export
machine
Ltd
products
Manufact
ure of
P.T. Little Wholly-own washing
Mala
Swan Prima ed Trading USD100 machine 422.47 51.00 51.00 No
ysia
Industries subsidiary and air
conditione
rs
Little Swan
Wholly-own
International Singa Investmen Investmen
ed USD500 USD500 100 100 Yes
(Singapore) pore t t
subsidiary
Co., Ltd.
49
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Balance of parent
company’s equity
The
Includ after deducting the
proport Deduct
Paid-in Other ed in difference that
Shareh ion ible
Reg. Business Registered Business Capital at essential consoli Minority loss of minority
Subsidiaries Categories olding of minorit
Add. nature capital scope period-en investment dated Interest interests exceed
ratio voting y
d to subsidies statem equity
rights interest
ents obtained by
(%)
minority
shareholders
Manufact
Wholly-own
Tianjin Little Tianji ure of
ed Production 20,000.00 20,000.00 100 100 Yes
Swan Co., Ltd. n washing
subsidiary
machine
(2) The subsidiaries obtained through business combination under the common control
Balance of
parent
company’s
equity after
deducting
The the
Other
Paid-in proportio Included in Deductibl difference
essential Minorit
Subsidiarie Reg. Business Registere Business Capital at Shareholdin n consolidate e that loss of
Categories investmen y
s Add. nature d capital scope period-en g ratio of voting d minority minority
t to Interest
d rights statements interest interests
subsidies
(%) exceed
equity
obtained by
minority
shareholder
s
Little Swan
(Jing Manufactur
Wholly-owne
Zhou) Jingzho Productio e and sale
d 1,107.02 1,186.94 100.00 100.00 Yes - - -
Electronic u n of washing
subsidiary
Appliances machines
Co., Ltd.
50
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Hefei
Royalstar
Manufacture
Washing
Holding Hefei Production USD13,552 of washing 83,096.23 69.47 69.47 Yes 40,908.92 - -
Machine
subsidiaries machines
Manufacture
Co., Ltd.
Hefei Midea
Washing Manufacture
Holding
Machine Hefei Production 2,000.00 of washing 2,000.00 62.523 90.00 Yes 204.35
subsidiaries
Manufacture machines
Co., Ltd.
51
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
2. Changing of consolidation scope
a. 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;
b. On Jan. 2011, the Company has sold out Wuxi Huayin Electric Appliances Co., Ltd., and the
company no longer included in the consolidated scope since the date of the trade.
c. On Mar. 2011, the Company established wholly-owned subsidy Tianjin Little Swan Co., Ltd., and
it was included in the consolidated scope since the date of the establishment.
3. Business combination under common control occurred in the current period
None
4. The companies which are excluded from consolidation scope of the current period
Wuxi Huayin Electric Appliances Co., Ltd.
5. The minority shareholders’ interests bought in current period
None
Note V: Notes to the items of consolidated financial statements (Uint: RMB Yuan)
1. Monetary fund
Closing balance Opening balance
Items Exchange Exchange
Original currency Translated to RMB Original currency Translated to RMB
rate rate
Cash RMB 252,859.04 1.0000 252,859.04 203,697.44 1.0000 203,697.44
Sub-total 252,859.04 203,697.44
Bank savings RMB 375,557,143.44 1.0000 375,557,143.44 924,842,665.81 1.0000 924,842,665.81
USD 14,766,691.88 6.4716 95,564,123.18 13,859,763.12 6.6227 91,789,053.21
EUR 3,361,077.46 9.3612 31,463,718.35 1,494,145.06 8.8065 13,158,188.47
Sub-total 502,584,984.97 1,029,789,907.49
Other
RMB 1,181,536,314.60 1,185,818,855.47
monetary
Sub-total 1,181,536,314.60 1,185,818,855.47
Total 1,684,374,158.61 2,215,812,460.40
Closing balance Opening balance
Items
Amount in RMB Amount in RMB
Security deposit 244,194,181.38 96,789,265.47
Fixed deposits 937,342,133.22 1,089,029,590.00
Sub-total 1,181,536,314.60 1,185,818,855.47
2. Trading financial asset
Items Closing balance Opening balance
Derivative financial assets-forward exchange contracts 14,945,797.68 7,778,633.32
3. Notes receivable
Items Closing balance Opening balance
Bank acceptance bills 4,223,997,921.50 1,562,503,246.83
4. Accounts receivable
(1) Category analysis:
52
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Closing balance
Items Book balance Provision for bad debt
Book value
Amount Proportion Amount Proportion
Individually significant accounts
669,863,471.65 66.86% 39,247,437.03 70.16% 630,616,034.62
receivable
Accounts receivable which are not
individually significant, but are
91,688.78 0.01% 91,688.78 0.16% -
assessed at high risk level through
credit risk combination
Other non-material receivables 332,008,107.27 33.14% 16,600,405.37 29.68% 315,407,701.90
Total 1,001,963,267.70 100.00% 55,939,531.18 100.00% 946,023,736.52
Opening balance
Items Book balance Provision for bad debt
Book value
Amount Proportion Amount Proportion
Individually significant accounts
648,152,653.82 67.84% 33,797,775.19 68.23% 614,354,878.63
receivable
Accounts receivable which are not
individually significant, but are
397,507.96 0.04% 397,507.96 0.80% -
assessed at high risk level through
credit risk combination
Other non-material receivables 306,861,008.25 32.12% 15,343,050.41 30.97% 291,517,957.84
Total 955,411,170.03 100.00% 49,538,333.56 100.00% 905,872,836.47
(2) Aging analysis:
Closing balance
Aging
Book balance Proportion Provision for bad debts Book value
Within 1 year 995,265,797.95 99.33% 54,578,598.58 940,687,199.37
1-2 years 2,887,992.83 0.29% 306,969.80 2,581,023.03
2-3 years 3,717,788.14 0.37% 962,274.03 2,755,514.11
3-5 years 15,433.23 0.00% 15,433.23 -
Over 5 years 76,255.55 0.01% 76,255.55 -
Total 1,001,963,267.70 100.00% 55,939,531.18 946,023,736.52
Opening balance
Aging
Book balance Proportion Provision for bad debts Book value
Within 1 year 950,292,650.28 99.46% 48,457,848.10 901,834,802.18
1-2 years 4,054,707.35 0.42% 459,833.31 3,594,874.04
2-3 years 655,070.19 0.07% 216,440.04 438,630.15
3-5 years 289,366.23 0.03% 284,836.13 4,530.10
Over 5 years 119,375.98 0.01% 119,375.98 -
Total 955,411,170.03 100.00% 49,538,333.56 905,872,836.47
(3) Foreign currencies are:
Closing balance Opening balance
Items Exchange Exchange
Original currency Translated to RMB Original currency Translated to RMB
rate rate
USD 56,183,031.38 6.4716 363,594,105.87 93,265,781.61 6.6227 617,671,291.87
EUR 4,228,235.16 9.3612 39,581,354.98 8,030,133.04 8.8065 70,717,366.62
Total 403,175,460.85 688,388,658.49
(4) Particulars about accounts receivable due from shareholders with more than 5% (including 5%)
of the voting shares of the Company.
53
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
There was no accounts receivable due from shareholders’ entities.
Please refer to Note Ⅵ. ―Related Parties and Related Transaction‖ for accounts receivable from
related parties.
(5) Particulars about the top five customers of accounts receivable
Closing balance
Client Relation with the Company
Book balance Aging %
GEA PRODUCTS Non-related party 62,618,496.85 Within 1 year 6.25%
Belgium Electrolux Home Produc Non-related party 57,318,028.12 Within 1 year 5.72%
Midea Singapore Trading Co., Ltd. Related party 69,168,325.85 Within 1 year 6.90%
Guangzhou Midea Refrigeration
Non-related party 32,969,544.69 Within 1 year 3.29%
Product Marketing Co., Ltd.
Wuxi Midea Refrigeration Product
Non-related party 28,607,695.63 Within 1 year 2.86%
Marketing Co., Ltd.
Total 250,682,091.14 25.02%
5. Advances to the supplier
(1) Aging analysis
Aging Closing balance % Opening balance %
Within 1 year 385,492,014.89 99.73% 347,859,376.50 97.42%
1-2 years 832,916.72 0.22% 9,017,440.06 2.53%
2-3 years 46,645.33 0.01% 206,251.35 0.06%
3-5 years 158,509.50 0.04% - 0.00%
Over 5 years 0.00% 6,800.00 0.00%
Total 386,530,086.44 100.00% 357,089,867.91 100.00%
(2) Particulars about the top 5 suppliers of advance to the supplier:
Closing balance
Relationship with
Client
the Company Book balance Aging % Reason for unsettlement
Management Committee of Jinzhou Economic Development
Non-related party 74,258,965.00 Within 1 year 19.21% Prepayment for land
Zone
Chemical Sales Branch (East China) of China National
Non-related party 67,424,946.50 Within 1 year 17.44% Prepayment for materials
Petrolum Corporation
Yanshan Business Department of Chemical Sales Branch
Non-related party 18,005,987.48 Within 1 year 4.66% Prepayment for materials
(North China) of China National Petrolum Corporation
Jiangsu Chengda Construction Co Ltd Non-related party 16,534,289.00 Within 1 year 4.28% Final accounts of the project were not settled.
Beijing ZhongTian Riyue Advertising Co.,Ltd Non-related party 11,760,857.28 Within 1 year 3.04% Labor service was not provided.
Total 187,985,045.26 48.63%
(3) Particulars about shareholders’ entities and related parties who holding 5% or over 5% of voting
shares of the Company at period-end:
1) Advance from shareholders’ entity at period-end
Item Closing balance Opening balance
GD Media Holding Co., Ltd. 293,385.75 1,194,000.00
2) Please refer to Note Ⅵ. ―Relationship and Related Party Transactions‖ for advance from related
54
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
parties.
6. Other receivables
(1) Category analysis
Closing balance
Items Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts receivable 0.00% 0.00% -
Accounts receivable which are not
individually significant, but are assessed at
6,319,944.38 45.39% 1,764,411.89 76.31% 4,555,532.49
high risk level through credit risk
combination
Other non-material receivables 7,602,194.56 54.61% 547,660.77 23.69% 7,054,533.79
Total 13,922,138.94 100.00% 2,312,072.66 100.00% 11,610,066.28
Opening balance
Items Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts receivable - 0.00% 0.00% -
Accounts receivable which are not
individually significant, but are assessed at
6,338,699.04 30.75% 5,629,901.74 79.83% 708,797.30
high risk level through credit risk
combination
Other non-material receivables 14,273,019.05 69.25% 1,422,801.40 20.17% 12,850,217.65
Total 20,611,718.09 100.00% 7,052,703.14 100.00% 13,559,014.95
(2) Aging analysis:
Closing balance
Aging
Book balance % Provision for bad debt Book value
Within 1 year 7,479,507.44 53.72% 385,150.34 7,094,357.10
1-2 years 704,013.00 5.06% 70,401.30 633,611.70
2-3 years 3,966,625.24 28.49% 793,325.05 3,173,300.19
3-5 years 1,771,993.26 12.73% 1,063,195.96 708,797.30
Over 5 years 0.00% 0.00 -0.00
Total 13,922,138.94 100.00% 2,312,072.66 11,610,066.28
Opening balance
Aging
Book balance % Provision for bad debt Book value
Within 1 year 8,224,886.18 39.90% 408,885.59 7,816,000.59
1-2 years 1,957,107.63 9.50% 195,710.76 1,761,396.87
2-3 years 4,091,025.24 19.85% 818,205.05 3,272,820.19
3-5 years 1,771,993.26 8.60% 1,063,195.96 708,797.30
Over 5 years 4,566,705.78 22.16% 4,566,705.78 -
Total 20,611,718.09 100.00% 7,052,703.14 13,559,014.95
(3) There was no other receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company.
There was no amount due from shareholders’ entities of the Company at the period end.
Please refer to NOTE Ⅵ. Relationship and Related Party Transactions for other receivables from
related parties.
(4) Particulars about the top 5 customers of other receivables:
55
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Relationship
Closing balance
Client with the
Book balance Aging % Content
Company
Non-related Within 1
Wuxi Little Swan Ceramic Co., Ltd. 4,790,444.38 34.41% Payment for equity transfer
party year
Industrial and Commercial Bank of China Limited, Beijing Non-related Within 1
900,000.00 6.46% Security deposit
Branch Assets Custody Account party year
Non-related Within 1
Wuxi China Resources Natural Gas Co., Ltd. 542,755.70 3.90% Gas deposit
party year
Non-related Within 1
Wuxi Water Supply General Company 186,867.00 1.34% Deposit for water charges
party year
Non-related Within 1
Hu Qingjiu 164,000.00 1.18% Personal loan
party year
Total 6,584,067.08 47.29%
(5) Other receivables written off in the current period:
Amount of
Reason for
Client cancelled Cancelled amount Withdrawal basis
cancellation
companies
BSW Household Unrecoverable after
1.00 4,566,705.78 Over 5 years
Appliances Co., Ltd. arbitration
7. Inventory
(1) Category
Closing balance Opening balance
Items Reserve for inventory Reserve for inventory
Book balance Book value Book balance Book value
depreciation depreciation
Raw materials 146,236,302.78 1,697,331.28 144,538,971.50 94,252,521.54 3,895,468.21 90,357,053.33
OEM materials 2,143,718.69 2,143,718.69 3,584,342.90 3,584,342.90
Low price
63,247.86 63,247.86 63,247.86 63,247.86
consumables
Product in
37,633,261.43 244,436.61 37,388,824.82 22,362,520.85 532,792.35 21,829,728.50
process
Finished goods
760,727,905.10 21,147,076.86 739,580,828.24 959,250,481.28 24,410,760.03 934,839,721.25
in stock
Total 946,804,435.87 23,088,844.75 923,715,591.12 1,079,513,114.43 28,839,020.59 1,050,674,093.84
(2) Inventory impairment provisions
Opening balance Provided in current Decrease in current period Closing balance
Items
Book balance period written back written off Book balance
Raw materials 3,895,468.21 2,198,136.93 1,697,331.28
OEM materials -
Low price consumables -
Product in process 532,792.35 288,355.74 244,436.61
Finished goods in stock 24,410,760.03 612,399.87 2,651,283.30 21,147,076.86
Total 28,839,020.59 - 900,755.61 4,849,420.23 23,088,844.75
56
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
8. Other current asset
Items Closing balance Opening balance
Deferred expense-moulds 85,340,194.63 129,431,121.17
Others 125,000.00
Total 85,340,194.63 129,556,121.17
9. Available-for-sale financial assets
Closing balance Opening balance
Items
Fair value Fair value
Equity instrument available for sale
Wuhan Huaxin Hi-Tech Co., Ltd.（400038） 322,224.00 312,816.00
Total 322,224.00 312,816.00
10. Co-operative & Joint-operative subsidiaries investments
Registered capital Shareholding
Invested entities Type Reg. Add. Legal representative Business nature
(RMB0'000) proportion（%）
Production of
BSW Household Appliances Limited WINFRIED washing-machines
Wuxi USD 2927.5 40
Co., Ltd. liability EDUARD SEITZ and kitchen
appliances
Guangzhou Antaida Limited
Wuxi Ye Weilong Logistics service USD 1000 20
Logistical Co., Ltd. liability
Voting Closing balance Amount of this period
Invested entities rights
Total assets Total liabilities Total net assets Operation revenue Net profit
(%)
BSW Household Appliances
40 531,942,990.05 276,217,493.70 255,725,496.35 426,615,723.16 -2,297,835.48
Co., Ltd.
Guangzhou Antaida
20 28,794,530.60 10,950,283.89 17,844,246.71 7,550,635.75 -794,682.18
Logistical Co., Ltd.
11. Long-term equity investment
Invested entities Measurement method Initial investment cost 2010-12-31 Increase/decrease 2011-06-30
BSW Household Appliances Co., Ltd. Equity method 97,482,661.00 103,209,332.73 -919,134.19 102,290,198.54
Guangzhou Antaida Logistical Co., Ltd. Equity method 2,000,000.00 3,727,785.78 -158,936.44 3,568,849.34
Hengtai Insurance Brokers Co., Ltd. Cost method 1,000,000.00 1,000,000.00 1,000,000.00
Suzhou People's Shopping Mall Cost method 150,000.00 150,000.00 150,000.00
Bank of Jiangsu Cost method 1,100,000.00 1,210,000.00 1,210,000.00
Inner Mongolia Baotou Department Store
Cost method 50,000.00 50,000.00 50,000.00
Co., Ltd.
(Malaysia) Midaqi Little Swan Industry
Cost method 4,224,744.00 - -
Co., Ltd.
Total 106,007,405.00 109,347,118.51 -1,078,070.63 108,269,047.88
Jan.-Jun. 2011
Proportions of Proportion of voting rights
Invested entities Impairment provision
shareholding (%) (%) Impairment provision Cash dividends
BSW Household Appliances Co., Ltd. 40.00 40.00
Guangzhou Antaida Logistical Co., Ltd. 20.00 20.00
Hengtai Insurance Brokers Co., Ltd. 3.33 3.33
Suzhou People's Shopping Mall（150,000
- - 30,000.00
shares）
Bank of Jiangsu（2,092,564 shares） - -
Inner Mongolia Baotou Department Store
- -
Co., Ltd.
(Malaysia) Midaqi Little Swan Industry
51.00 51.00 4,224,744.00
Co., Ltd.
Total 4,224,744.00 - 30,000.00
57
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
12. Fixed assets
(1) Details:
Items Opening balance Increased of this period Decrease of this period Closing balance
Original value of
1,574,576,206.71 101,510,703.66 48,499,419.05 1,627,587,491.32
fixed assets:
Property and buildings 721,223,111.70 25,294,572.08 7,392,961.36 739,124,722.42
Machineries 738,160,283.23 58,638,118.46 34,110,681.87 762,687,719.82
Vehicles 21,583,208.64 2,123,427.65 1,492,143.08 22,214,493.21
Electronic and other
93,609,603.14 15,454,585.47 5,503,632.74 103,560,555.87
equipment
Accumulated
359,887,152.12 49,139,540.41 31,024,205.87 378,002,486.66
depreciation:
Property and buildings 58,682,939.80 15,851,356.14 1,167,955.22 73,366,340.72
Machineries 258,211,615.23 25,818,534.31 27,083,993.42 256,946,156.12
Vehicles 6,469,337.60 1,318,457.78 1,076,048.93 6,711,746.45
Electronic and other
36,523,259.49 6,151,192.18 1,696,208.30 40,978,243.37
equipment
Net value of fixed
1,214,689,054.59 52,371,163.25 17,475,213.18 1,249,585,004.66
assets:
Property and buildings 662,540,171.90 9,443,215.94 6,225,006.14 665,758,381.70
Machineries 479,948,668.00 32,819,584.15 7,026,688.45 505,741,563.70
Vehicles 15,113,871.04 804,969.87 416,094.15 15,502,746.76
Electronic and other
57,086,343.65 9,303,393.29 3,807,424.44 62,582,312.50
equipment
Impairment provision
18,512,347.94 - 16,549.00 18,495,798.94
of fixed assets:
Property and buildings 15,098,707.55 15,098,707.55
Machineries 2,357,106.32 2,357,106.32
Vehicles 24,351.50 24,351.50
Electronic and other
1,032,182.57 16,549.00 1,015,633.57
equipment
Net amount of fixed
1,196,176,706.65 52,371,163.25 17,458,664.18 1,231,089,205.72
assets:
Property and buildings 647,441,464.35 9,443,215.94 6,225,006.14 650,659,674.15
Machineries 477,591,561.68 32,819,584.15 7,026,688.45 503,384,457.38
Vehicles 15,089,519.54 804,969.87 416,094.15 15,478,395.26
Electronic and other
56,054,161.08 9,303,393.29 3,790,875.44 61,566,678.93
equipment
58
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
13. Construction in progress
(1) Particulars about construction in progress:
Closing balance Opening balance
Items Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Little Swan Industrial Park 6,667,851.89 6,667,851.89 5,624,583.36 5,624,583.36
Building for shift workers in
36,123,214.25 36,123,214.25 17,004,603.60 17,004,603.60
Royalstar Company
35KV Electric power
11,073,292.60 11,073,292.60 2,545,498.72 2,545,498.72
substation
Capacity enlargement of
32,651,697.18 32,651,697.18
Jingzhou Base
Capacity enlargement of
41,805,025.59 41,805,025.59
Royalstar Company
Others - 830,992.00 830,992.00
Total 128,321,081.51 - 128,321,081.51 26,005,677.68 - 26,005,677.68
(2) Changes of main construction in process:
Decrease of this period
Items Budget Opening balance Increase in this period Transferred to Closing balance
fixed assets this Other
period
Capacity
enlargement of 150 million - 32,651,697.18 32,651,697.18
Jingzhou Base
Capacity
enlargement of 115 million - 41,805,025.59 41,805,025.59
Royalstar Company
Building for shift
workers in 60 million 17,004,603.60 19,118,610.65 36,123,214.25
Royalstar Company
Total - 17,004,603.60 41,805,025.59 - - 77,928,239.84
Amount of this period
Items Accumulative amount of interest capitalization Capital source
Amount of interest capitalization
Capacity
enlargement of Self-raised
Jingzhou Base
Capacity
enlargement of Self-raised
Royalstar Company
Building for shift
workers in Self-raised
Royalstar Company
Total - -
59
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
14. Intangible assets
Items Opening balance Increase in this period Decrease in this period Closing balance
Original value of intangible
264,013,849.80 - - 264,013,849.80
assets:
Land use right 260,306,528.19 260,306,528.19
Nonpatented technology 1,992,000.00 - - 1,992,000.00
Software, etc. 1,715,321.61 1,715,321.61
Accumulative amortization: 23,787,028.18 3,080,816.34 - 26,867,844.52
Land use right 21,369,441.66 2,792,729.76 24,162,171.42
Nonpatented technology 1,643,400.00 159,055.49 1,802,455.49
Software, etc. 774,186.52 129,031.09 903,217.61
Impairment provision of
- - - -
intangible assets:
Land use right -
Nonpatented technology -
Software, etc. -
Net amount of intangible assets: 240,226,821.62 -3,080,816.34 - 237,146,005.28
Land use right 238,937,086.53 -2,792,729.76 - 236,144,356.77
Nonpatented technology 348,600.00 -159,055.49 - 189,544.51
Software, etc. 941,135.09 -129,031.09 - 812,104.00
15. Long-term deferred expenses
Decrease of this period
Increase/decrease of
Items Opening balance Amortization in this Closing balance
this period Others
period
Moldings 59,798,327.43 19,191,809.53 20,630,944.40 58,359,192.56
IT consulting fee 1,872,505.23 1,591,100.42 964,861.05 2,498,744.60
Expenditure on
1,925,117.69 - 970,987.74 954,129.95
leasehold
Total 63,595,950.35 20,782,909.95 22,566,793.19 - 61,812,067.11
16. Deferred tax assets/deferred tax liabilities
Closing balance Opening balance
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Deferred income tax assets
Asset impairment provision 88,498,428.20 13,522,381.14 92,564,693.66 13,782,634.28
Payroll and dismissal expenses 96,393,589.39 14,459,038.41 77,123,669.53 11,568,550.43
Accrued expenses 699,359,195.87 104,903,879.38 609,484,663.57 91,422,699.53
Internal unrealized profits 25,392,297.21 3,935,395.88 12,441,120.83 1,866,168.12
Estimated liabilities 19,373,414.96 2,906,012.24 18,487,799.18 2,773,169.88
Deferred revenue (government
3,353,400.00 503,010.00 2,228,600.00 334,290.00
subsidies)
Investment differences 8,782,955.88 1,317,443.38 8,782,955.88 1,317,443.38
Total 941,153,281.51 141,547,160.43 821,113,502.65 123,064,955.62
60
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Closing balance Opening balance
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Deferred income tax liabilities
Changes in fair value-Tradable
15,158,313.69 2,273,747.05 7,991,149.32 1,198,672.40
financial assets
Changes in fair value - Available-for-
9,408.00 1,411.20
sale financial assets
Total 15,167,721.69 2,275,158.25 7,991,149.32 1,198,672.40
17. Particulars about provisions for impairment loss
Provision of this Decrease in this period
Item Opening balance Closing balance
period Reversal Written off
Provision for bad debts 56,591,036.70 6,432,722.94 4,772,155.80 58,251,603.84
Provision for impairment of
28,839,020.59 900,755.61 4,849,420.23 23,088,844.75
inventories
Provision for impairment of
4,224,744.00 4,224,744.00
long-term equity investments
Provision for impairment of
18,512,347.94 16,549.00 18,495,798.94
fixed assets
Total 108,167,149.23 6,432,722.94 900,755.61 9,638,125.03 104,060,991.53
18. Short-term loans
(1) Categories of short-term loans
Closing balance Opening balance
Items
Mortgaged loan 9,039,354.88
Guaranteed loan
Trade financing 39,609,864.44
Total 39,609,864.44 9,039,354.88
19. Notes payable
Items Closing balance Opening balance
Bank acceptance bill 2,293,365,692.20 804,597,930.44
Within Notes payable, an amount of RMB 779,042,200 will be matured in 1 to 3 months, and an
amount of RMB 1,514,323,500 will be matured in 4 to 6 months.
20. Accounts payable
(1) Details of accounts payable
Items Closing balance Opening balance
Accounts payable 3,695,767,260.88 2,972,319,633.40
61
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
(2) Particulars about accounts payable due from shareholders’ entities and related parties with over
5% (including) voting rights of the Company:
There was no accounts payable due from shareholders’ entities at period-end.
Please refer to NOTE Ⅵ. Relationship and Related Party Transactions.
21. Advance form customers
(1) Aging analysis:
Items Closing balance Opening balance
Advance from customers 115,980,512.18 467,168,360.41
(2) Particulars about advance from customers due from shareholders’ entities or related parties
with more than 5% (including 5%) of the voting shares of the Company.
There was no advance from customers due from shareholders’ entities.
Please refer to Note Ⅵ. ―Related Parties and Related Transaction‖ for advance from customers
due from related parties.
22. Employees’ wage payable
Items Opening balance Increase of this period Decrease of this period Closing balance
Wage, bonus, allowance and
63,829,570.40 186,657,163.04 193,145,314.59 57,341,418.85
subsidies
Employee welfare 7,163,743.29 15,183,962.59 16,834,823.10 5,512,882.78
Social insurance 7,747,207.03 55,745,881.71 54,949,558.39 8,543,530.35
Housing fund 5,326,957.85 14,835,324.67 14,628,966.98 5,533,315.54
Non-monetary welfare - -
Trade union and employee
3,923,927.01 3,315,802.24 2,390,562.83 4,849,166.42
education allowance
Compensations for disengagement
58,801,147.50 164,975.12 9,442,811.01 49,523,311.61
other than dismissing policy
Others 153,693.65 2,650,246.03 1,232,351.73 1,571,587.95
Total 146,946,246.73 278,553,355.40 292,624,388.63 132,875,213.50
23. Tax payable
Items Closing balance Opening balance
VAT -113,291,512.22 -116,373,767.08
Business tax 1,930,661.36 1,930,713.14
Enterprise income tax 113,759,552.21 81,517,576.64
Personal income tax 3,622,888.63 182,554.28
Property tax 741,921.26 851,909.81
Land using tax 283,240.95 318,039.42
Stamp tax 11,732.70 1,177,899.16
Urban maintenance and construction tax 194,856.96 1,128,454.69
Education surtax 168,527.52 1,449,209.17
Other 8,875,413.73 3,870,367.63
Total 16,297,283.10 -23,947,043.14
62
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
24. Dividends payable
Items Closing balance Opening balance Reason
Other corporate shareholders They didn't cash
3,426,410.31 2,719,702.95
holding restricted shares those shares.
Total 3,426,410.31 2,719,702.95
25. Other payables
Items Closing balance Opening balance
Other payables 93,605,875.33 84,178,532.28
(1) Particulars about other payables due from shareholders’ entities or related parties with more
than 5% (including 5%) of the voting shares of the Company.
There were no other payables due from shareholders’ entities.
Please refer to Note Ⅵ. ―Related Parties and Related Transaction‖ for other payables due from
related parties.
26. Estimated liabilities
Items Closing balance Opening balance
Quality guarantee payable 19,373,414.96 18,487,799.18
The washing machines produced by subsidiary of the company, Wuxi Little Swan General Electric
Co., Ltd., are mainly sold to the United States and other foreign markets. Overseas sale of these
washing machines involves the two kinds of risks:1) The insurance company may only afford an
insufficient compensation when the quality problems take place, and 2) there is a risk of liability
for damages when the failure rate is higher than FCR stipulated in the contract with General
Electric Company. As of December 31, 2011, the company has a risk loss of RMB 19,373,400 for
the sold products.
27. Other non-current liabilities
Items Closing balance Opening balance
Deferred revenue 8,029,750.00 8,024,850.00
63
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
28. Share capital
Opening balance Increase/Decrease of this period
Items Capitalization of Termination of Closing balance
Other
share capital restrictive
Circulating A share-restrictive 224,021,535.00 224,021,535.00
Circulating A share-common 217,430,357.00 217,430,357.00
Circulating B share-restrictive 30,851,714.00 30,851,714.00
Circulating B share-common 160,184,158.00 160,184,158.00
Total 632,487,764.00 632,487,764.00
29. Capital reserve
Items Opening balance Increase in this period Decrease in this period Closing balance
Share premium 1,058,967,340.76 1,058,967,340.76
Capital surplus transferred in 39,179,385.00 39,179,385.00
Loss/profit from fair value 180,638.60 7,996.80 188,635.40
Provision of equity investment 1,638,562.74 1,638,562.74
Total 1,099,965,927.10 7,996.80 - 1,099,973,923.90
30. Surplus reserves
Increase in Decrease in this
Items Opening balance Closing balance
this period period
Statutory reserve 212,889,613.44 212,889,613.44
31. Retained earnings
Proportion of withdrawing or
Items Closing balance
distribution
Retained profit at the end of previous year before adjustment 1,112,075,620.21
Adjusting: Total retained profit at the beginning of the year
Retained profit at the beginning of the year after adjustment 1,112,075,620.21
Plus: Net profit attributable to owners of parent company in the
280,338,482.78
reporting period
Less: Appropriating statutory reserve 10%
Appropriating discretionary reserve
Appropriating general risk provisions
Dividend of common shares payable 63,248,776.40
Dividend of common shares transferred to share capital
Retained profit at the end of the period 1,329,165,326.59
64
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
32. Operational turnover and costs
(1) Particulars about Operational turnover and costs
Jan.-Jun. 2011 Jan.-Jun. 2010
Items
Revenue Cost Revenue Cost
Main business
Washing machines 5,888,596,307.24 4,811,217,980.66 4,921,725,957.55 4,055,922,109.75
Others 10,658,616.38 9,994,084.50 44,424,921.84 43,363,954.77
Subtotal 5,899,254,923.62 4,821,212,065.16 4,966,150,879.39 4,099,286,064.52
Other business
Sales materials 839,162,431.95 789,074,716.02 539,017,878.02 518,360,682.49
Rent 824,400.00 447,962.40
Other 8,272,366.96 1,513,060.11 4,955,220.70 1,037,066.37
Subtotal 848,259,198.91 790,587,776.14 544,421,061.12 519,397,748.86
Total 6,747,514,122.53 5,611,799,841.30 5,510,571,940.52 4,618,683,813.38
(2) Particulars about turnover of the top five clients:
Jan.-Jun. 2011
Name of client
Operation revenue Proportion in total revenue
Midea Electric Trading (Singapore) Co., Pte. Ltd. 368,361,923.73 5.46%
GEA PRODUCTS 179,623,907.56 2.66%
Shaanxi Midea Refrigeration Products Marketing Co.,
125,507,371.16 1.86%
Ltd.
Jiangxi Midea Refrigeration Products Marketing Co.,
124,231,306.08 1.84%
Ltd.
Chengdu (Sichuan) Midea Refrigeration Products
117,684,555.11 1.74%
Marketing Co., Ltd.
Total 915,409,063.64 13.57%
33. Business tax and surcharge
Items Jan.-Jun. 2011 Jan.-Jun. 2010
City maintenance and construction tax 9,630,579.72 6,685,633.19
Education surtax 5,923,722.68 3,006,321.63
Business tax 6,375.00 39,315.34
Other 247,756.68 228,814.24
Total 15,808,434.08 9,960,084.40
34. Financial expenses
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Interest expenses 3,151,519.08 12,622,755.65
Less: Interest income 11,998,606.48 7,978,408.46
Plus: Exchange losses 7,559,851.37 11,558,689.63
Plus: Other 2,399,006.72 3,534,683.35
Total 1,111,770.69 19,737,720.17
65
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
35. Impairment provisions of assets
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Bad debt losses 6,432,722.94 1,535,594.04
Inventory impairment losses -900,755.61 27,400.29
Fixed assets impairment losses
Total 5,531,967.33 1,562,994.33
36. Investment income
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Long-term equity investment income at cost method-cash
30,000.00 35,000.00
dividend from non-subsidiaries
Long-term equity investment income at equity method -1,078,070.63 402,609.93
Gains from disposal of long-term equity investment 18,510,892.36
Investment gains from disposal of financial assets available for
sales
Investment gains during holding financial assets available for
sales
Investment gains during holding tradable financial assets 12,149,078.24
Total 29,611,899.97 437,609.93
37. Non-operating income
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Gains from disposal of fixed assets 15,741,216.89 5,142,040.68
Gains from governmental subsidy 16,731,627.64 14,277,648.88
Penalty income 1,504,773.46 235,859.78
Other 1,836,182.83 269,483.76
Total 35,813,800.82 19,925,033.10
Details of gains from government subsidies:
66
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Rewards from the foreign trade and economic development
400,000.00 458,500.00
project funds
Subsidies for technological upgrading and construction of fixed
1,155,000.00
assets of enterprises
National Enterprise Technology Center innovation project
7,019,000.00
grants
Rewards and support for general trade export 413,000.00
Incubation enterprise subsidies 25,200.00
VAT refund upon collection 10,143,935.44 2,944,048.88
Subsidies for investment on Midea Washing Machine Industrial
5,331,500.00
Park
Rewards for municipal technology center of enterprise 200,000.00
Rewards for outstanding enterprise in high-tech industry 200,000.00
Subsidies for overseas investment 90,000.00
Subsidies for large taxpayer 40,000.00
Rewards for production expansion of foreign-trading enterprise 33,640.00
Relocation subsidies 25,200.00
Patent subsidies from Science & Technology Bureau 13,000.00
Other 254,352.20 2,262,900.00
Total 16,731,627.64 14,277,648.88
38. Non-operating expenses
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Loss on disposal of fixed assets 2,017,512.26 7,560,393.90
Shortage of fixed assets - -
Penalties paid 2,044.73 93,884.64
Compensation expenses - -
Donations expenses 50,000.00 401,332.00
Local fees (funds for flood control and security) 4,648,031.79 1,515,413.37
Other 1,815,364.11 2,096,266.86
Total 8,532,952.89 11,667,290.77
39. Income tax expenses
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Income tax expense of current period 104,460,824.48 96,959,827.15
Deferred income tax expense -20,025,431.83 -37,399,065.76
Total 84,435,392.66 59,560,761.39
67
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
40. Rate of return on common stockholders’ equity (ROE), primary earnings per share, and
diluted earnings per share
(1) Calculation outcome
Jan.-Jun. 2011 Jan.-Jun. 2010
Weighted Weighted
Profit of the report period
Basic EPS Diluted EPS Average Basic EPS Diluted EPS Average
ROE ROE
Net profit attributable to common
0.44 0.44 8.77% 0.39 0.39 9.31%
shareholders of the Company（Ⅰ）
Net profit attributable to common share
holders of the Company after deducting 0.41 0.41 8.02% 0.31 0.31 8.61%
of non-recurring gain/loss（Ⅱ）
Items No. Jan.-Jun. 2011 Jan.-Jun. 2010
Net profit attributable to common shareholders of the
1 280,338,482.78 248,754,461.97
Company gain/loss attributable to the net profit of
2 23,930,045.58 78,305,169.38
Net profitshareholders to common share holdersafter the
3=1-2 256,408,437.20 170,449,292.59
Company after deducting of non-recurring gain/loss
Total of shares at beginning of year 4 632,487,764.00 547,655,760.00
Amount of shares increased by capitalizing of common
5 - -
reserves or share dividend by issuing of new shares or
6 - -
transforming of debt to sharesnext month of new share
7 - -
issuing orofconverting of debtby repurchasing endshares report
8 - -
Number ofterm from the next month of share decreasing
9 - -
to the end of report term
Amount of shares reduced 10 - -
Number of months in the report term 11 6.00 6.00
12=4+5+6×7÷
Weighted average of common shares issued outside (I) 632,487,764.00 547,655,760.00
11-8×9÷11-10
Weighted average of common shares issued outside
13 632,487,764.00 632,487,764.00
adjusted for merger under common control (II)
Items No. Jan.-Jun. 2011 Jan.-Jun. 2010
Basic earnings per share (I) 14=1÷13 0.44 0.39
Basic earnings per share (II) 15=3÷12 0.41 0.31
Diluting potential common share interests recognized as
16 - -
expenses
Income tax rate 17 15% 15%
Transformation fees 18 - -
Amount of shares increased by transforming or exercising
19 - -
of company bond, subscription certificate, or share option
20=[1+(16-18)
Diluted earnings per share (I) ×(1-17)]÷ 0.44 0.39
(13+19)
21=[3+(16-18)
Diluted earnings per share (II) ×(1-17)]÷ 0.41 0.31
(12+19)
68
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
41. Other misc. incomes
Items Jan.-Jun.2011 Jan.-Jun.2010
1. Gains (losses) from available-for-sale financial assets 9,408.00 2,352.00
Less: Income tax influence of available-for-sale financial assets 1,411.20 352.80
Net amount written into other gains in previous periods and
transferred into gain/loss in this period
Sub-total 7,996.80 1,999.20
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 in previous periods and
transferred into gain/loss in this period
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 in previous periods and
transferred into gain/loss in this period
Adjusted amount transferred to initial amount of the target
project
Sub-total - -
4. Difference from translating of foreign currency financial
-754,385.29
statements
Less: Net amount of disposing overseas business and
transferred to current gain/loss in this period
Sub-total -754,385.29 -
5. Others
Less: Income tax influence by other incomes accounted into
other comprehensive incomes
Net amount written into other gains in previous periods and
transferred into gain/loss in this period
Sub-total - -
Total -746,388.49 1,999.20
42. Notes to the Cash Flow Statement
(1) Other cash inflow related to operation
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Revenue from fines 1,504,773.46 235,859.78
Revenue subsidies, etc. 6,587,692.20 14,277,648.88
Normal interest income from bank deposits 11,998,606.48 7,978,408.46
Rentals from operating lease 824,400.00 447,962.40
Other non-operating-related cash income 1,874,302.12 24,880,429.59
Total 22,789,774.26 47,820,309.11
(2) Other cash paid related to operation
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Sales expense paid in this period 392,816,259.51 200,690,588.43
Administration expense paid in this period 119,173,876.46 80,840,101.12
The amount of fee expenditures in financial expenses in this
2,399,006.72 1,988,316.62
period
Others 37,129,708.31 50,540,636.79
Total 551,518,850.99 334,059,642.96
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
43. Appendix of Cash Flow Statement
Items Jan.-Jun.2011 Jan.-Jun.2010
1. Adjusting net profit to cash flow of operating activities
Net profit 333,304,792.63 296,738,838.70
Add: assets impairment loss 5,531,967.33 1,562,994.33
Depreciation of fixed assets and investment real estates 49,139,540.41 33,874,448.76
Amortization of intangible assets 3,080,816.34 3,372,648.31
Amortization of long-term deferred expense 22,566,793.19 17,475,727.04
Loss on disposal of fixed assets, intangible assets, and other long-term assets -13,723,704.63 2,418,353.22
Loss on retirement of fixed assets - -
Loss on change in fair value -11,689,065.84 -
Financial expense 425,127.33 5,108,434.08
Investment loss -29,611,899.97 -437,609.93
Decrease of deferred income tax assets -18,482,204.81 -37,241,129.18
Increase of deferred income tax liabilities 1,075,074.65 -
Decrease of inventories 132,708,678.56 234,011,175.36
Decrease in receivables under operating activities -2,709,576,003.39 -1,663,765,533.01
Increase in payables under operating activities 1,726,249,260.57 1,645,206,080.29
Others - -
Net cash flow arising from operating activities -509,000,827.63 538,324,427.97
2. Significant investing and financing activities irrelevant to income and expense in cash
Transfer of liabilities to assets
Convertible bonds of the Company due within 1 year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents
Closing balance of cash 1,440,179,977.23 2,019,833,624.52
Less: opening balance of cash 2,119,023,194.93 1,553,899,535.65
Add: Closing balance of cash equivalents - -
Less: opening balance of cash equivalents - -
Net increase of cash and cash equivalents -678,843,217.70 465,934,088.87
NOTE Ⅵ. Relationship and Related Party Transactions
1. Particulars about the parent party:
Name of the parent
Relationship Enterprise Nature Registered place Legal representative Business Nature
company
Manufacture and sales of commercial air
Gd Midea Holding conditioners、refrigerators、washing-
Parent Company Joint stock company Foshan,Guangdong Fang Hongbo
Co.,Ltd machines and compressors, after-sale
service of productions
Proportions of Proportions of
Name of the parent parent company’s parent company’s Ultimate controller
Registered Capital Organization Code
company shareholding to the voting right to the of the company
company (%) company (%)
Gd Midea Holding
RMB 3120270000 34.20 39.08 He Xiangjian 19033709-2
Co.,Ltd
2. Other related parties of the Company
70
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Name of the parties Relationship
BSW Household Appliances Co. , Ltd. Joint – operative
Guangzhou Antaida Logistics Co. , Ltd. Joint – operative
Hefei Midea Royalstar Refrigerator Co., Ltd. Under control of controlling shareholder of the Company
Hefei Midea Materials Supply Co., Ltd. Under control of controlling shareholder of the Company
Midea Electrical Appliances (Singapore) Trading Co., Ltd. Under control of controlling shareholder of the Company
Hefei Hua Ling Share Holding Co. , Ltd. Under control of controlling shareholder of the Company
Foshan Midea Materials Supply Co., Ltd. Under control of controlling shareholder of the Company
GD Midea Heating & Ventilating Equipment Co., Ltd. Under control of controlling shareholder of the Company
PT.Midea Planet Indonesia Under control of controlling shareholder of the Company
MIDEA SCOTT&ENGLISH ELECTRONIICS SDN.BHD Under control of controlling shareholder of the Company
MIDEA ITALIA SRL Under control of controlling shareholder of the Company
Midea Europe GMBH Under control of controlling shareholder of the Company
Midea Electric Espana, S.L. Under control of controlling shareholder of the Company
Wuhu Annto Logistics Co., Ltd. Under control of controlling shareholder of the Company's parent company
Huai'an Welling Motor Manufacturing Co., Ltd. Under control of controlling shareholder of the Company's parent company
Foshan Welling Washer Motor Manufacturing Co., Ltd. Under control of controlling shareholder of the Company's parent company
Jiangsu Midea Chunhua Electric Appliance Co., Ltd. Under control of controlling shareholder of the Company's parent company
Hefei Bainian Molding Technology Co., Ltd. Under control of family member close to the actual controller
Hefei Huitong New Materials Co., Ltd. Under control of family member close to the actual controller
3. Related party transactions
(1) Purchase and sale of goods, services provided and received among the related-party (Unit:
RMB 0,000)
Jan.-Jun. 2011 Jan.-Jun. 2010
Pricing
Name of related parties
Amount policy
Amount (RMB'0000) % %
(RMB'0000)
Market
Wuhu Annto Logistics Co., Ltd. 0.00% 2,301.06 0.48%
price
Market
Foshan Welling Washer Motor Manufacturing Co., Ltd. 0.00% 30,130.63 6.34%
price
Market
Huai'an Welling Motor Manufacturing Co., Ltd. 0.00% 0.00%
price
Market
Foshan Midea Materials Supply Co., Ltd. 0.00% 88.04 0.02%
price
Market
Hefei Midea Materials Supply Co., Ltd. 0.00% 2,269.53 0.48%
price
Market
Gd Midea Holding Co.,Ltd 42.66 0.01% 16,874.96 3.55%
price
Market
Hefei Bainian Molding Technology Co., Ltd. 0.00% 9,984.46 2.10%
price
Market
Hefei Huitong New Materials Co., Ltd. 0.00% 0.00%
price
Total 42.66 0.01% 61,648.68 12.97%
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WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Jan.-Jun. 2011 Jan.-Jun. 2010
Pricing
Name of related parties
Amount policy
Amount (RMB'0000) % %
(RMB'0000)
Market
Hefei Bainian Molding Technology Co., Ltd. 0.00% 6,790.78 1.23%
price
Market
Hefei Midea Royalstar Refrigerator Co., Ltd. 0.00% 0.27 0.00%
price
Market
Jiangsu Midea Chunhua Electric Appliance Co., Ltd. 0.00% 61.37 0.01%
price
Market
Midea Electrical Appliances (Singapore) Trading Co., Ltd. 0.00% 0.00%
price
Market
Hefei Huitong New Materials Co., Ltd. 0.00% 0.00%
price
Market
Hefei Hua Ling Share Holding Co. , Ltd. 0.00% 1,053.55 0.19%
price
Market
GD Midea Heating & Ventilating Equipment Co., Ltd. 0.00% 0.00%
price
Market
MIDEA ITALIA SRL 374.31 0.06% 2,818.10 0.51%
price
Market
Midea Europe GMBH 881.60 0.13% 0.00%
price
Market
Midea Electric Espana, S.L. 237.12 0.04% 0.00%
price
Market
PT.Midea Planet Indonesia 590.47 0.09% 173.87 0.03%
price
MIDEA SCOTT&ENGLISH Market
236.92 0.04% 685.49 0.12%
ELECTRONIICS SDN.BHD price
Total 2,320.42 0.34% 11,583.43 2.10%
(2) Particulars about related guarantees
In accordance with capital demand for production and operation as well as business operation
development requirement of subsidies of the Company, the Company: 1. provided guarantee
amount of RMB 730 million to subsidy Hefei Royalstar Washing Machine Manufacture Co., Ltd.
for its application of bank credit amount; 2. provided guarantee amount of RMB 50 million to
subsidy Wuxi Little Swan General Electric Appliances Co. , Ltd. for its application of bank credit
amount; and 3. provided guarantee amount of RMB 50 million to subsidy Wuxi Filin Electronics
Co. , Ltd. The above guarantees of three subsidies have provided counter guarantee for the
Company with their whole assets.
(3) Details of property transfer and debt restructuring between related parties
None
4. Amount due to/from related parties (Unit: RMB 0,000)
72
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Closing amount Opening amount
Name of related parties
Amount Amount
(RMB'0000) (RMB'0000)
Accounts Receivable
Midea Electrical Appliances (Singapore) Trading Co., Ltd. 11,113.21
Hefei Hua Ling Share Holding Co. , Ltd. 1,033.38 33.86
Hefei Midea Royalstar Refrigerator Co., Ltd. 8.86 3.54
Wuhu Annto Logistics Co., Ltd. - 1.71
Jiangsu Midea Chunhua Electric Appliance Co., Ltd. 10.00 49.23
Huai'an Welling Motor Manufacturing Co., Ltd. 301.55
MIDEA ITALIA SRL 455.53 2,726.86
MIDEA EUROPE GMBH 132.99 3,627.35
MIDEA FRANCE CHEZ FATTON SERVICE LOGISTIQUE 0.86 139.70
Midea Electric Espana, S.L. 274.93
MIDEA SCOTT&ENGLISH ELECTRONILCS SDN.BHD 136.04 745.69
PT. Midea Planet Indonesia 1,001.95
Total 14,167.74 7,629.49
Closing amount Opening amount
Name of related parties
Amount Amount
(RMB'0000) (RMB'0000)
Other receivables
BSW Household Appliances Co. , Ltd. - 456.67
Total - 456.67
Prepayment
Gd Midea Holding Co.,Ltd 29.34 119.40
Total 29.34 119.40
Accounts payable
Huai'an Welling Motor Manufacturing Co., Ltd. 9,899.96
Foshan Welling Washer Motor Manufacturing Co., Ltd. 7,020.05
Hefei Midea Materials Supply Co., Ltd. 6,938.13 5,617.58
Hefei Bainian Molding Technology Co., Ltd. 543.27 1,713.53
Wuhu Bainian Technology Development Co., Ltd. 218.61 316.48
Hefei Huitong New Materials Co., Ltd. 1,177.88
Gd Midea Holding Co.,Ltd 16.40
Zhongshan Midea Environmental Electric Engineering Products
5.65 5.65
Installation Service Co., Ltd.
Guangdong Zhengli Precision Machinery Co., Ltd. 24.22 79.38
Total 18,807.72 14,769.07
Other payables
Wuhu Annto Logistics Co., Ltd. 68.16 720.84
Total 68.16 720.84
NOTE VII: Contingent Events
As of June 30, 2011, no significant contingent events should be disclosed.
Note VIII: Commitment issues
As of June 30, 2011, no other significant commitment issues should be disclosed.
73
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
NOTE IX: Events after balance sheet date
As of June 30, 2011, no significant events after balance sheet date.
Note X: Other significant events
As of June 20, 2011, no other significant events should be disclosed..
Note XI: Notes to the financial statements of parent Company
1. Accounts receivable
(1) Category analysis:
Closing amount
Items Book balance Provision for bad debt
Book value
Amount (%) Amount (%)
Individually significant accounts
719,324,581.41 90.81% 54,127,197.54 93.70% 665,197,383.87
receivable
Accounts receivable which are not
individually significant, but are assessed
0.00% 0.00% -
at high risk level through credit risk
combination
Other non-material receivables 72,766,665.44 9.19% 3,638,333.27 6.30% 69,128,332.17
Total 792,091,246.85 100.00% 57,765,530.82 100.00% 734,325,716.03
Opening amount
Items Book balance Provision for bad debt
Book value
Amount (%) Amount (%)
Individually significant accounts
543,962,814.56 85.99% 39,907,013.64 89.70% 504,055,800.92
receivable
Accounts receivable which are not
individually significant, but are assessed
0.00% 0.00% -
at high risk level through credit risk
combination
Other non-material receivables 88,625,808.94 14.01% 4,580,890.60 10.30% 84,044,918.34
Total 632,588,623.50 100.00% 44,487,904.24 100.00% 588,100,719.26
(2) Aging analysis:
Closing amount
Aging
Book balance % Provision for bad debts Book value
Within 1 year 786,442,041.65 99.29% 56,880,085.14 729,561,956.51
1-2 years 2,443,953.55 0.31% 244,395.35 2,199,558.19
2-3 years 3,205,251.66 0.40% 641,050.33 2,564,201.33
3-5 years 0.00% -
Over 5 years 0.00% -
Total 792,091,246.86 100.00% 57,765,530.82 734,325,716.03
74
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Opening amount
Aging
Book balance % Provision for bad debts Book value
Within 1 year 629,281,195.57 99.48% 44,127,340.53 585,153,855.04
1-2 years 3,009,218.73 0.48% 300,921.87 2,708,296.86
2-3 years 298,209.20 0.05% 59,641.84 238,567.36
3-5 years 0.00% -
Over 5 years 0.00% -
Total 632,588,623.50 100.00% 44,487,904.24 588,100,719.26
(3) Particulars about accounts receivable due from shareholders’ entities with more than 5%
(including 5%) of the voting shares of the Company.
There was no accounts receivable due from shareholders’ entities at period-end.
2. Other receivables
(1) Category analysis:
Closing amount
Items Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts receivable 65,475,857.56 92.52% 62,372,371.25 99.58% 3,103,486.31
Accounts receivable which are not
individually significant, but are assessed at
0.00% 0.00% -
high risk level through credit risk
combination
Other non-material receivables 5,291,425.64 7.48% 264,571.28 0.42% 5,026,854.36
Total 70,767,283.20 100.00% 62,636,942.53 100.00% 8,130,340.67
Opening amount
Items Book balance Provision for bad debt
Book value
Amount % Amount %
Individually significant accounts receivable 60,607,959.36 77.38% 60,607,959.36 89.96% -
Accounts receivable which are not
individually significant, but are assessed at
6,208,099.04 7.93% 5,551,541.74 8.24% 656,557.30
high risk level through credit risk
combination
Other non-material receivables 11,512,249.30 14.70% 1,214,883.94 1.80% 10,297,365.36
Total 78,328,307.70 100.00% 67,374,385.04 100.00% 10,953,922.66
(2) Aging analysis:
Closing amount
Aging
Book balance % Provision for bad debt Book value
Within 1 year 3,999,151.52 5.65% 211,769.78 3,787,381.74
1-2 years 14,007,884.78 19.79% 11,163,213.00 2,844,671.78
2-3 years 25,637,634.34 36.23% 24,139,347.19 1,498,287.15
3-5 years 17,876,511.97 25.26% 17,876,511.97 -
Over 5 years 9,246,100.59 13.07% 9,246,100.59 -
Total 70,767,283.20 100.00% 62,636,942.53 8,130,340.67
75
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Opening amount
Aging
Book balance % Provision for bad debt Book value
Within 1 year 18,528,486.04 23.65% 12,845,993.87 5,682,492.17
1-2 years 21,677,209.10 27.67% 20,335,156.10 1,342,053.00
2-3 years 18,410,186.92 23.50% 15,137,366.73 3,272,820.19
3-5 years 10,466,325.05 13.36% 9,809,767.75 656,557.30
Over 5 years 9,246,100.59 11.80% 9,246,100.59 -
Total 78,328,307.70 100.00% 67,374,385.04 10,953,922.66
(3) Particulars about accounts receivable due from shareholders’ entities with more than 5%
(including 5%) of the voting shares of the Company.
There was no accounts receivable due from shareholders’ entities at period-end.
3. Long-term equity investment
76
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Amount of Initial
Invested entities Method Opening amount Increase/decrease Closing amount
investment
BSW Household Appliances Co., Ltd. Equity method 97,482,661.00 103,209,332.73 -919,134.19 102,290,198.54
Guangzhou Antaida Logistical Co., Ltd. Equity method 2,000,000.00 3,727,785.78 -158,936.44 3,568,849.34
Wuxi Little Swan Import & Export Co. , Ltd Cost method 57,500,000.00 57,500,000.00 57,500,000.00
Wuxi Huayin Electric Machine Co. , Ltd. Cost method 37,313,630.00 48,763,630.00 -48,763,630.00 -
Wuxi Little Swan Washing Machine Co. ,
Cost method 37,259,587.50 37,259,587.50 37,259,587.50
Ltd.
Wuxi Meitian Refrigerator Marketing and
Cost method 24,840,000.00 24,840,000.00 24,840,000.00
Sale Co., Ltd.
Jiangsu Little Swan Marketing and Sales
Cost method 417,550,000.00 417,550,000.00 417,550,000.00
Co. , Ltd.
Wuxi Filin Electronics Co. , Ltd. Cost method 19,620,041.50 25,660,308.10 25,660,308.10
Wuxi Little Swan General Electric
Cost method 19,600,000.00 19,600,000.00 19,600,000.00
Appliances Co. , Ltd.
San Jin (Jing Zhou) Electrical Appliances
Cost method 11,869,431.12 11,869,431.12 11,869,431.12
Co. , Ltd.
Wuxi Little Swan Driving & Control
Cost method 4,500,000.00 4,500,000.00 4,500,000.00
Development Technology Co. , Ltd.
Little Swan International (Singapore) Co.,
Cost method 34,052,500.00 34,052,500.00 34,052,500.00
Ltd.
Hefei Royalstar Washing Machine Equipment Manufacturing Co., Ltd. 830,962,252.35 830,962,252.35 830,962,252.35
Tianjin Little Swan Washing Machine Co. ,
Cost method 200,000,000.00 200,000,000.00
Ltd.
(Malaysia) Midaqi Little Swan Industry Co.,
Cost method 4,224,744.00 -
Ltd.
Hengtai Insurance Brokers Co., Ltd. Cost method 1,000,000.00 1,000,000.00 1,000,000.00
Suzhou People's Shopping Mall（150,000 shares）Cost method 150,000.00 150,000.00 150,000.00
Bank of Jiangsu（2,202,564 shares） Cost method 1,100,000.00 1,210,000.00 1,210,000.00
Total 1,601,024,847.47 1,621,854,827.58 150,158,299.37 1,772,013,126.95
Amount of this period
Proportions of Proportion of voting
Invested entities Impairment provision Accurred impairment
shareholding (%) rights (%) Cash dividends
provision
BSW Household Appliances Co., Ltd. 40.00 40.00
Guangzhou Antaida Logistical Co., Ltd. 20.00 20.00
Wuxi Little Swan Import & Export Co. , Ltd 88.46 88.46
Wuxi Huayin Electric Machine Co. , Ltd. 75.00 75.00
Wuxi Little Swan Washing Machine Co. ,
75.00 75.00
Ltd.
Wuxi Meitian Refrigerator Marketing and
75.00 75.00
Sale Co., Ltd.
Jiangsu Little Swan Marketing and Sales
99.54 99.54
Co. , Ltd.
Wuxi Filin Electronics Co. , Ltd. 73.00 73.00
Wuxi Little Swan General Electric
70.00 70.00
Appliances Co. , Ltd.
San Jin (Jing Zhou) Electrical Appliances
100.00 100.00
Co. , Ltd.
Wuxi Little Swan Driving & Control
90.00 90.00
Development Technology Co. , Ltd.
Little Swan International (Singapore) Co.,
100.00 100.00
Ltd.
Hefei Royalstar Washing Machine Equipment Manufacturing Co., Ltd. 69.47
Tianjin Little Swan Washing Machine Co. ,
100.00 100.00
Ltd.
(Malaysia) Midaqi Little Swan Industry Co.,
51.00 51.00 4,224,744.00
Ltd.
Hengtai Insurance Brokers Co., Ltd. 3.33 3.33
Suzhou People's Shopping Mall（150,000 shares） - -
77
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
4. Operational turnover and costs
Jan.-Jun. 2011 Jan.-Jun. 2010
Items
Revenue Cost Revenue Cost
Main business
Washing machines 4,036,124,263.71 3,407,242,217.56 2,871,024,907.96 2,422,448,147.00
Subtotal 4,036,124,263.71 3,407,242,217.56 2,871,024,907.96 2,422,448,147.00
Other business
Sales of materials 464,302,908.73 450,502,808.02 284,138,937.85 279,513,021.18
Rent 824,400.00 447,962.40
Other 2,256,022.74 1,513,060.11 1,593,558.01 763,201.44
Subtotal 467,383,331.47 452,015,868.13 286,180,458.26 280,276,222.62
Total 4,503,507,595.18 3,859,258,085.70 3,157,205,366.23 2,702,724,369.61
5. Investment income
Items Jan.-Jun. 2011 Jan.-Jun. 2010
Long-term equity investment income at cost method-cash dividend
30,000.00 35,000.00
from non-subsidiaries
Long-term equity investment income at cost method-cash dividend
36,666,000.00
from subsidiaries
Long-term equity investment income at equity method -1,078,070.63 402,609.93
Gains from disposal of long-term equity investment 27,215,984.89
Investment gains from disposal of financial assets available for
sales
Investment gains during holding financial assets available for sale
Investment gains during disposal of financial assets available for
9,483,183.00
sale
Total 72,317,097.26 437,609.93
6. Appendix of Cash Flow Statement
Items Jan.-Jun.2011 Jan.-Jun.2010
1. Adjusting net profit to cash flow of operating activities
Net profit 200,647,366.30 134,353,434.93
Add: assets impairment loss 12,206,134.25 -9,863,010.11
Depreciation of fixed assets and investment real estates 27,731,719.58 18,584,463.21
Amortization of intangible assets 1,424,556.18 1,424,556.18
Amortization of long-term deferred expense 11,733,662.41 5,840,044.69
Loss on disposal of fixed assets, intangible assets, and other long-term assets -13,783,890.63 680,493.51
Loss on retirement of fixed assets - -
Loss on change in fair value -8,843,355.56 -
Financial expense 425,127.33 -
Investment loss -72,317,097.26 -437,609.93
Decrease of deferred income tax assets -24,259,297.67 -15,958,679.39
Increase of deferred income tax liabilities 1,326,503.33 -
Decrease of inventories 32,651,234.06 71,613,491.80
Decrease in receivables under operating activities -1,807,997,391.86 -1,138,590,789.54
Increase in payables under operating activities 1,104,573,220.37 1,365,733,437.39
Others - -
Net cash flow arising from operating activities -534,481,509.17 433,379,832.74
2. Significant investing and financing activities irrelevant to income and expense in cash - -
Transfer of liabilities to assets - -
Convertible bonds of the Company due within 1 year - -
Fixed assets acquired under finance leases - -
3. Net changes in cash and cash equivalents - -
Closing balance of cash 1,041,142,810.24 1,133,368,149.44
Less: opening balance of cash 1,492,995,931.54 743,637,877.78
Add: Closing balance of cash equivalents - -
Less: opening balance of cash equivalents - -
Net increase of cash and cash equivalents -451,853,121.30 389,730,271.66
78
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
NOTE XII.: Supplementary Information
(1) Details of non-recurring gain/loss of current term
Items Jan.-Jun. 2011 Jan.-Jun. 2010
1. Gain/loss from disposal of non-current capital 13,723,704.63 -2,131,225.10
2. Refunding and exemption of taxes in excess of authority or without official
approval documents
3. Government subsidies accounted into current gains/losses (except for those
government subsidies closely related to the Company’s business, and received at 16,731,627.64 5,045,748.88
national statutory standard and amount)
4. Capital adoption fee collected from non-financial organizations and accounted into
current gain/loss
5. Gain/loss from differences between the investment cost on subsidiaries, associated
enterprises, as well as joint ventures and the fair value of recognizable net asset of the
invested entities
6. Gain/loss from transaction of non-monetary assets
7. Gain/loss from commissioned investment or assets
8. Asset impairment provisions provided for force-majeure, for example, natural
disasters
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
137,145,273.14
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 financial asset and liabilities,
and investment gains from disposal of transactional financial assets and liabilities and
available-for-sale financial assets, other than valid period value instruments related to
the Company’s common businesses
15. Restoring of receivable account impairment provision tested individually
16. Gain/loss from external 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 1,473,547.45 -3,642,751.83
21. Other gain/loss items satisfying the definition of non-recurring gain/loss account
Total of non-recurring gain/loss (influence on gross profit) 31,928,879.72 136,417,045.09
Less: Influenced amount of income tax 4,103,121.84 22,899,693.66
Less: Influenced amount of minor shareholders’ equity 3,895,712.30 35,212,182.05
Influence amount of net profit attributable to common shareholders of the
23,930,045.58 78,305,169.38
Company
Net profit attributable to common share holders of the Company after deducting
256,408,437.20 170,449,292.59
of non-recurring gain/loss
(2) Explanations for abnormal changes of main accounting statements items Unit: (RMB 0’000)
Amount of this
Amount of this Amount of last
Items period minus amount Increase/decrease (%) Explanation
period period
of last period
79
WUXI LITTLE SWAN COMPANY LIMITED INTERIM REPORT 2011
Transactional financial assets 1,494.58 777.86 716.72 92% Increase of forward exchange contracts signed with banks
Notes receivable 422,399.79 156,250.32 266,149.47 170% Sales increase
Other current assets 8,534.02 12,955.61 -4,421.59 -34% Value decrease of production moulds due to amortization
Input for the production capacity expansion projects in bases
Construction in process 12,832.11 2,600.57 10,231.54 393%
in Jingzhou and
Short-term borrowings 3,960.99 903.94 3,057.05 338% Increase of trade financing
Self-issued banker’s acceptance bills were adopted as a new
Notes payable 229,336.57 80,459.79 148,876.78 185%
way of payment.
Accounts received in advance 11,598.05 46,716.84 -35,118.78 -75% Influence of the financial environment and the sales cycle
Taxes and fares payable 1,629.73 -2,394.70 4,024.43 168% Influence of the production and sales cycle
Increase of transactional financial assets and fair value
Deferred income tax liabilities 227.52 119.87 107.65 90%
increase of available-for-sale financial assets
Foreign exchange difference -169.23 -93.79 -75.44 -80% Movements of exchange rates
The turnover tax increased due to the influence of the
Business taxes and surcharges 1,580.84 996.01 584.83 59%
production and sales cycle.
Selling expense 52,412.16 35,479.93 16,932.23 48% Sales increase
Administrative costs increased and the range expanded as
Administrative expense 23,998.21 15,822.38 8,175.83 52%
income grew.
Financial expense 111.18 1,973.77 -1,862.59 -94% Increase of interest income from deposits
Bigger increase of accounts receivable due within one year as
Asset impairment loss 553.20 156.30 396.90 254%
compared with the same period of last year
Earnings from fair value changes of forward exchange
Earnings from fair value changes 1,168.91 - 1,168.91
contracts
Gains on due forward exchange contracts and subsidiary
Investment income 2,961.19 43.76 2,917.43 6667%
disposal
Non-operating income 3,581.38 1,992.50 1,588.88 80% Increase of earnings from fixed asset disposal
Income tax 8,443.54 5,956.08 2,487.46 42% Profit growth
Net cash flows from operating
-50,900.08 53,832.44 -104,732.53 -195% Increase of cash paid to acquire goods and services
activities
Net cash flows from investing Increase of cash paid to expand the Company’s production
-12,377.52 -7,035.45 -5,342.07 -76%
activities capacity and acquire fixed assets
Net cash flows from financing
-4,606.72 -203.58 -4,403.14 -2163% Increase of cash dividends paid
activities
Wuxi Little Swan Company Limited
August 2011
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