Full Text of Robam Appliances’ Semi-Annual Report 2020
Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2020
August 2020
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Full Text of Robam Appliances’ Semi-Annual Report 2020
Chapter 1 Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, as well as the directors, supervisors and senior
management of Hangzhou Robam Appliances Co., Ltd. (the Company) hereby guarantee that there are no
false representations, misleading statements, or material omissions in this Semi-Annual Report (“the
Report”), and are severally and jointly liable for the authenticity, accuracy and completeness of the
information contained herein.
Ren Jianhua, the head of the Company, Zhang Guofu, the person in charge of the Company’s accounting,
and Zhang Guofu, the head of the accounting department (the accountant in charge) hereby declare and
warrant that the financial report contained in the Report is authentic, accurate, and complete.
All the directors attended a board meeting during which they reviewed the Report.
The Company does not plan to distribute cash dividends or bonus shares, or convert capital reserve into
capital stock.
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Contents
Semi-Annual Report 2020 ................................................................................................................. 2
Chapter 1 Important Notes, Contents and Interpretations ........................................................... 5
Chapter 2 Company Profile and Major Financial Indicators........................................................ 8
Chapter 3 Overview of the Company’s Business ............................................................................ 9
Chapter 4 Discussion and Analysis of Operations ........................................................................ 19
Chapter 5 Significant Matters ........................................................................................................ 26
Chapter 6 Changes in Shares and Shareholders ........................................................................... 30
Chapter 7 Preferred Stocks ............................................................................................................. 30
Chapter 8 Convertible Bonds.......................................................................................................... 30
Chapter 9 Directors, Supervisors and Senior Management ........................................................ 30
Chapter 10 Corporate Bonds .......................................................................................................... 30
Chapter 11 Financial Report ........................................................................................................... 31
Chapter 12 Documents Available for Future Inspection ............................................................ 141
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Full Text of Robam Appliances’ Semi-Annual Report 2020
Interpretations
Item refer(s) to Contents
The Company, Company, Robam
refer to Hangzhou Robam Appliances Co., Ltd.
Appliances
MingQi refers to Hangzhou MingQi Electric Co., Ltd.
Robam Appliances, MingQi, Beijing Robam Appliances Sales Co.
The Group refers to
Ltd., Shanghai Robam Appliances Sales Co. Ltd., Kinde Intelligent
Hangzhou Robam Industrial Group Co., Ltd., controlling
Robam Group refers to
shareholder of the Company
The reporting period refers to the first half of 2020
Kinde refers to Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.
AVC refers to Beijing All View Cloud Data Technology Co., Ltd.
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Chapter 2 Company Profile and Major Financial Indicators
I. Company Profile
Stock abbreviation Robam Stock code 002508
Stocks traded on Shenzhen Stock Exchange
Chinese name of the Company 杭州老板电器股份有限公司
Short Chinese name of the
老板电器
Company (if any)
English name of the Company (if
HANGZHOU ROBAM APPLIANCES CO., LTD.
any)
Short English name of the
ROBAM
Company (if any)
Legal representative of the
Ren Jianhua
Company
II. Contact Person and Contact Information
Secretary of the Board of Directors Representative of securities affairs
Name Wang Gang Jiang Yu
No. 592, Linping Avenue, Yuhang No. 592, Linping Avenue, Yuhang
Contact address Economic Development Zone, Economic Development Zone,
Hangzhou, Zhejiang Province Hangzhou, Zhejiang Province
Telephone 0571-86187810 0571-86187810
Fax 0571-86187769 0571-86187769
E-mail wg@robam.com jy@robam.com
III. Other Information
1. Contact information
Whether the registered address, office address and zip code as well as the website and email address of the Company changed during
the reporting period?
□ Applicable √ Not Applicable
There are no changes in the registered address, office address and zip code as well as the website and email address of the Company
during the reporting period. For details, please refer to the Annual Report 2019.
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2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□ Applicable √ Not Applicable
During the reporting period, there were no changes in the newspapers designated by the Company for information disclosure, the
website designated by China Securities Regulatory Commission (CSRC) for publishing the semi-annual report, and the location for
filing the semi-annual report of the Company. For details, please refer to the Annual Report 2019.
IV. Key Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years?
□ Yes √ No
The reporting period The same period last year YoY change
Operating Income (RMB) 3,211,172,335.79 3,527,413,882.96 -8.97%
Net profit attributable to shareholders of
612,317,249.29 670,403,994.20 -8.66%
the listed company (RMB)
Net profit attributable to shareholders of
the listed company after deducting 551,320,432.05 622,539,579.01 -11.44%
non-recurring gains/losses (RMB)
Net cash flow from operating activities
407,687,133.56 658,691,084.58 -38.11%
(RMB)
Basic earnings per share (EPS)
0.65 0.71 -8.45%
(RMB/share)
Diluted EPS (RMB/share) 0.65 0.71 -8.45%
Weighted average return on net assets 8.64% 10.51% -1.87%
End of the reporting
End of last year Change
period
Total assets (RMB) 10,753,455,626.61 10,651,922,572.87 0.95%
Net assets attributable to shareholders of
7,002,194,105.75 6,864,388,881.46 2.01%
the listed company (RMB)
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Whether there are differences in the net profit and net asset disclosed in the Financial Report under
International Accounting Standards (IAS) and China’s accounting standards?
□ Applicable √ Not Applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standards
during the reporting period.
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2. Whether there are differences in the net profit and net asset disclosed in the Financial Report under
foreign accounting standards and China’s accounting standards during?
□ Applicable √ Not Applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards and China’s
accounting standards during the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not Applicable
In RMB
Item Amount Description
Gains and losses on disposal of non-current assets (including the
11,388.98
part written-off with provision for asset impairment accrued)
Government subsidy included in current gains and losses (except
the government subsidy closely related to the Company’s business
73,756,234.28
and enjoyed by quota or ration in accordance with the unified
national standard)
Gains and losses from entrusting others with investment or asset
0.00
management
Other non-operating revenues and expenses except the above items -1,138,951.47
Less: Affected amount of income tax 11,320,206.38
Affected amount of minority shareholders’ equity (after tax) 311,648.17
Total 60,996,817.24 --
During the reporting period, there is no circumstance that the items of non-recurring gains and losses defined and enumerated in
accordance with the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public - Non-current Gains and Losses are defined as recurring gains and losses.
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Chapter 3 Overview of the Company’s Business
I. Main Businesses during the Reporting Period
Dedicated to creating higher-quality kitchens for families, the Company focuses on the research and development (R&D),
production, sales and comprehensive services of kitchen appliances, including range hoods, gas stoves, disinfection cabinets, steam
ovens, baking ovens, steaming-baking ovens, dishwashers, water purifiers, water heaters, microwaves and integrated stoves. After 41
years of development and growth, ROBAM has become a leading company in the Chinese kitchen appliance industry, with the
longest history, the highest market share and the largest production capacity.
II. Significant Changes in Major Assets
1. Significant changes in major assets
Major assets Notes on significant changes
Equity assets No significant change in the Company’s equity assets during the reporting period
Fixed assets No significant change in the Company’s fixed assets during the reporting period
Intangible assets No significant change in the Company’s intangible assets during the reporting period
No significant change in the Company’s projects under construction during the
Projects under construction
reporting period
2. Major overseas assets
□ Applicable √ Not Applicable
III. Analysis of Core Competitiveness
There is no significant change in the Company’s core competitiveness during the reporting period. The Company’s
core competitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation,
comprehensive and efficient operation capability, as shown in the Annual Report 2019.
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Chapter 4 Discussion and Analysis of Operations
I. Overview
In the first half of 2020, the COVID-19 caused serious impact on the production and operation of enterprises and
residents’ consumption, and the kitchen appliance industry was heavily hit, with an overall significant decline. In terms
of the retail channel, as shown in AVC monthly data report based on offline retail monitoring (“AVC Offline Report”),
the year-on-year (YoY) growths of the retail sales of the main categories of kitchen appliances, i.e. range hoods, gas
stoves and disinfection cabinets, registered -28.0%, -27.1% and -31.1% respectively, a sharp decline due to the
epidemic. In terms of the online channel, as shown in AVC monthly data report based on online retail monitoring
(“AVC Online Report”), the retail sales of the kitchen appliance packages, range hoods and gas stoves increased by
-6.0%, 7.2% and 11.4% respectively as compared with those of the same period last year, a slight impact of the
epidemic due to the online transaction mode. In terms of the engineering channel, as shown in AVC half-year
monitoring data analysis report of finely decorated commercial housing market (“AVC Fine Decoration Report”), the
size of the supporting facilities of range hoods decreased by 33.4% year on year, a sharp decline due to the fact that it
was impossible to carry out the construction during the epidemic.
The epidemic also caused severe impact and challenges to the Company. As a leader in the industry, the Company
took strict measures for epidemic prevention and control, and actively promoted the efficient resumption of work and
production, implementing the annual business concept of “improving strength cross fiscal periods and making steady
growth”–, in an effort to enhance our products and seizing more market share. As a result, the performance across all
channels improved greatly year-on-year from the second quarter onwards, with the operating income reaching RMB
3,211,172,335.79 in the first half of 2020, down 8.97% YoY; and the net profits for shareholders of the listed company
of RMB 612,317,249.29, down 8.66% YoY, significantly higher than the average level of the industry.
As of June 30, 2020, according to AVC Offline Report, the market shares and market rankings of the Company’s main
product categories in terms of offline retail sales are shown in the following table:
Range hood Gas stove Disinfection Built-in electric Built-in Built-in Built-in electric Built-in
cabinet steam oven microwave oven all-purpose oven oven dishwasher
28.30% 25.60% 20.60% 33.70% 38.40% 31.30% 27.60% 9.50%
1 1 2 1 1 2 2 4
As of June 30, 2020, according to AVC Online Report, the market shares and market rankings of the Company’s main
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product categories in terms of online retail sales are shown in the following table:
Kitchen appliance 2-piece package Range hood Gas stove Built-in electric Built-in Built-in Built-in
package of range hood and steam oven all-purpose oven disinfection dishwasher
stove cabinet
26.40% 27.0% 15.70% 6.6% 24.0% 8.20% 8.30% 8.1%
1 1 2 4 2 3 3 4
As of June 30, 2020, according to AVC Fine Decoration Report, the market share of Robam appliances in the fine
decoration channel was 34.8%, ranking No.1 in the industry.
In the first half of 2020, as for the marketing, the Company deepened its high-end brand positioning by centering
on customers and products, and adopting the market-oriented strategy, with all channels empowering each other for
synergetic development. For the retail channel, the Company continued to mainly promote the brand among key
accounts, and improve the product system; enhanced direct sales in franchise stores and the building of the flat
operating system to increase the operation efficiency; and strengthened new marketing capabilities to build the
management system of community-based operation and stock operation, further tapping market potentials. For the
e-commerce channel, the Company continued to improve operation efficiency based on the concept of “deepening the
operation by category, restructuring user values, and enhancing brand building”. The structure of Category 1 has been
optimized and supporting products of Category 2 and 3 have been increased. In addition, the Company focused on the
experience of old and new customers to discover customer values, and improved the brand’s natural search results to
strengthen brand positioning. For the engineering channel, the Company cooperated with leading real estate companies,
and constantly optimized product and customer structures, to gradually increase the penetration rates of all categories
and further promote the Center Clean System (CCS). As regards the innovation channel, the Company fully cooperated
with leading whole house customization companies and home decoration companies, seized traffic-based platforms, and
cooperated with designer teams to seek channel dividends and the market share of the existing stock by relying on
products, contents and activities. For the overseas channel, the Company, in response to the enormous challenges posed
by the epidemic, enhanced its positioning of “a global leader of high-end kitchen appliances”, and steadily promoted the
internationalization of the brand, gradually expanding its global presence.
In the first half of 2020, in terms of the technology, the Company applied the spirit of workmanship in innovation,
and made remarkable achievements in fields such as new product development, talent training, technology patents, and
standard development. The Company independently developed several new products, including the 3-direction
high-suction range hood 5915S and the dual chamber range hood 60X2, the steaming-baking oven CQ975 with a
capacity of 40 liters and 50 automatic recipes, and dishwashers 775A and 776X more suitable for washing dishes for
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Chinese cuisines. These products enriched the Company’s product categories, and their appearance design, performance
indicators and user experience have been optimized. The integrated range hood 5908S+90B8Z, the dual chamber oven
RQ035 and the dishwasher W735 won AWE 2020 Excellent Product Awards. In addition, the Company continuously
introduced high level technical experts, speeded up internal team building, and improved the building of different levels
of technical talents. It also placed high importance on R&D quality and efficiency, consistently optimized the product
development cycle and increased successful product launch, and accumulated intelligent and integrated technologies. In
the first half of 2020, it applied for 397 patents, including 122 invention patents, and obtained 157 patent licenses,
including 8 invention patents. Meanwhile, the Company led the development of the Technical specification for
green-design product assessment - household dishwashers. It also participated in the development of 2 national
standards, i.e. Range hood and General safety technique conditions of gas burning appliances; 6 group standards, e.g.
Smart Kitchen and Assessment requirements for forerunner standard －Domestic gas instantaneous water heater; and
the standard of Range hood for products made in Zhejiang. The Company was awarded “Model Enterprise for
Intellectual Property Rights” and the 2nd Prize of Science and Technology Progress assessed by China National Light
Industry Council.
In the first half of 2020, with regard to the production, the Company focused on improving the manufacturing
capacity of multiple categories of kitchen appliances, particularly the 3 core business concepts of “Quality
Manufacturing, Precise Delivery, and Data-driven Development”. Firstly, it continued to promote technology-driven
intelligent manufacturing based on automated production and information, and balance production capacity structure to
steadily expand the capacity of all categories, thereby flexibly meeting the diversified demands of the market. Secondly,
it established the cost control mechanism with comprehensive competitive advantages, and continuously refined the
production modules, in an effort to achieve zero defects in quality, increase the process quality, and reduce the
manufacturing cost. It integrated supply chain resources to build the supply chain ecology, which decreased the
purchase costs and expanded the purchase scale. Besides, the Company built an agile supply chain management system
and a data-driven lean operation system, and continuously enhanced the integration of automated production and
information, thus realizing the online information interaction of projects, purchasers, and suppliers, and optimizing the
mechanism of resource allocation. The Maoshan Intelligent Manufacturing Park Project and the Unmanned Dark
Workshop Transformation Project are under smooth construction. After completion, they will promote the iteration and
upgrading of products and the upgrading of intelligent manufacturing, laying a solid foundation for the long-term
development of the Company.
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In the first half of 2020, in terms of the brand, Robam comprehensively upgraded the concept of “creating new
Chinese kitchen” to develop into the No. 1 brand in the market of Chinese high-end kitchen appliances. The Company
built the brand system in a multi-dimensional manner, covering products, channels, culture, and events, to define
Chinese new kitchen with the 4-piece package of “range hood, stove, steam oven and dishwasher”, and promote the
changes in Chinese cuisines via multiple online and offline channels. It upgraded the brand image system of channels,
increased the coverage of new visual image of terminal stores, and upgraded the version 2.0 of the visual and electronic
scenarios handbook of e-commerce shops. The Company inaugurated the Chinese Culinary College and invited Song
Weilong as the spokesperson, and designed the Family Banquet, Longing for Kitchen Festival, Kitchen Carnival,
Comprehensive Culinary Day and other theme activities, to create Robam’s Chinese culinary curves. It incorporated the
classic recipes in the recipes of its products through collaboration with culinary masters of the 8 major Chinese cuisines,
restaurants in cities, and other parties. The Company also continued the interaction with consumers, established the 4
satisfaction systems with full user contact points, and prepared the specific user research report. Robam served as the
delicious food creativity officer of the TV shows of “Back to the Goode Life Season 4” and “Chinese Restaurant Season
4” to interpret Chinese cuisines and create Chinese tastes. It became the exclusive household kitchen appliance supplier
for 2022 Asian Games held in Hangzhou to support the promotion and brand building of the Games.
In the first half of 2020, MingQi enhanced its transformation and upgrading, implemented the classified
management of offline channels, optimized the driving efficiency, and expanded online channels to enrich the
approaches to channel marketing and the promotion of product categories. Kinde maintained its high-end brand image,
focused on channel building, shop operation and ability improvement, and smoothly pushed forward with the
industrialization of the intelligent integrated kitchen ecology, which will further improve the R&D and production
capabilities for integrated products.
In the first half of 2020, the Company continued to be recognized by the capital market in terms of corporate
governance, internal management, and shareholder returns, among others, and won the awards of “Best Board of
Directors of SME Board”, “Best New Media Operator of SME Board”, “Best Company for Investor Relations” and
“Best Board Secretary of SME Board” at the event of the 11th Chinese Listed Company Investor Relations Tianma
Award held by Securities Times. It also won awards such as “Top 50 Most Valuable Listed Companies of SME Board”,
“Top 10 Management Teams of SME Board”, and “Outstanding Board Secretary for Information Disclosure of Listed
Companies” at the event of the 14th Value Appraisal of Chinese Listed Companies. The Company will continue to make
efforts in the kitchen field and facilitate long-term value investment.
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II. Analysis of Main Business
Please refer to the above section of “Overview” in this chapter for the overview of main business.
Year-on-year changes in key financial data
In RMB
The same period last
The reporting period YOY change Reason for change
year
Operating income 3,211,172,335.79 3,527,413,882.96 -8.97%
Operating costs 1,450,728,576.58 1,599,401,962.81 -9.30%
Sale expenses 892,679,297.76 990,044,906.61 -9.83%
Overhead cost 116,085,321.98 116,171,528.77 -0.07%
Financial expense -47,782,493.84 -29,604,970.87 N/A
Income tax expense 111,490,061.67 123,074,038.15 -9.41%
R&D input 117,824,032.62 107,629,786.13 9.47%
Due to the decrease in payment
Net cash flow from
407,687,133.56 658,691,084.58 -38.11% collection in the first quarter as a
operating activities
result of the epidemic
Net cash flow from
352,943,572.24 482,830,282.28 -26.90%
investment activities
Net cash flow from
-474,512,025.00 -759,219,240.00 N/A
financing activities
Net increase in cash
286,659,233.75 382,418,542.61 -25.04%
and cash equivalents
Composition of operating income
In RMB
The reporting period The same period last year
% of operating % of operating YOY change
Value Value
income income
Total operating
3,211,172,335.79 100% 3,527,413,882.96 100% -8.97%
income
By industry
Kitchen and
bathroom 3,146,865,561.70 98.00% 3,452,212,044.04 97.87% -8.84%
appliances
Other operating
64,306,774.09 2.00% 75,201,838.92 2.13% -14.49%
income
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By product category
Category 1 2,637,225,698.75 82.13% 2,980,329,193.52 84.49% -11.51%
Incl: Range hood 1,650,449,733.67 51.40% 1,883,974,091.22 53.41% -12.40%
Gas stove 758,465,499.75 23.62% 850,003,518.67 24.10% -10.77%
Disinfection cabinet 228,310,465.33 7.11% 246,351,583.63 6.98% -7.32%
Category 2 265,214,436.40 8.26% 217,644,531.41 6.17% 21.86%
Incl: All-purpose
133,537,304.02 4.16% 27,487,524.98 0.78% 385.81%
oven
Steam oven 85,061,189.53 2.65% 116,909,353.95 3.31% -27.24%
Baking oven 46,615,942.85 1.45% 73,247,652.48 2.08% -36.36%
Category 3 112,260,606.07 3.49% 112,059,992.91 3.18% 0.18%
Including:
68,865,113.63 2.14% 61,326,597.24 1.74% 12.29%
Dishwasher
Water purifier 24,211,752.65 0.75% 40,407,985.49 1.15% -40.08%
Water heater 19,183,739.79 0.60% 10,325,410.18 0.29% 85.79%
Integrated stove 98,976,247.02 3.08% 80,702,117.50 2.29% 22.64%
Other small
33,188,573.46 1.04% 61,476,208.70 1.74% -46.01%
appliances
Other operating
64,306,774.09 2.00% 75,201,838.92 2.13% -14.49%
income
By region
East China 1,543,503,690.71 48.07% 1,546,877,053.21 43.85% -0.22%
South China 451,116,850.34 14.05% 435,621,166.26 12.35% 3.56%
North China 292,319,457.85 9.10% 428,733,427.16 12.15% -31.82%
Central China 301,333,669.68 9.38% 348,689,600.83 9.89% -13.58%
Southwest China 242,691,912.60 7.56% 286,581,351.82 8.12% -15.31%
Northeast China 169,670,983.55 5.28% 207,137,172.65 5.87% -18.09%
Northwest China 135,468,027.41 4.22% 178,363,060.47 5.06% -24.05%
East China-Others 64,306,774.09 2.00% 75,201,838.92 2.13% -14.49%
Overseas 10,760,969.56 0.34% 20,209,211.64 0.57% -46.75%
Industries, products and regions accounting for more than 10% of the Company’s operating income or profit
In RMB
YoY change in YoY change in
Gross YoY change in
Operating income Operating costs operating the gross
margin operating costs
income margin
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By industry
Kitchen and
bathroom 3,146,865,561.70 1,429,892,268.93 54.56% -8.84% -8.99% 0.07%
appliances
By product
Range hood 1,650,449,733.66 686,351,807.72 58.41% -12.40% -12.13% -0.12%
Gas stove 758,465,499.75 323,033,918.27 57.41% -10.77% -13.87% 1.53%
By region
East China 1,543,503,690.71 687,677,137.40 55.45% -0.22% -2.09% 0.85%
South China 451,116,850.34 213,545,524.30 52.66% 3.56% 4.74% -0.53%
Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of the reporting
period is applied in case that the statistical caliber of such data is adjusted during the reporting period
□ Applicable √ Not Applicable
Description of reasons for relevant data increasing/decreasing by more than 30% year-on-year
□ Applicable √ Not Applicable
III. Analysis of Non-core Business
□ Applicable √ Not Applicable
IV. Analysis of Assets and Liabilities
1. Significant changes in assets composition
In RMB
End of the reporting period End of the same period last year Note on
Change in
% of total % of total significant
Value Value percentage
assets assets changes
Monetary capital 4,351,296,343.79 40.46% 2,578,726,413.49 27.28% 13.18% -
Accounts receivable 772,891,855.63 7.19% 490,952,083.71 5.19% 2.00% -
Inventory 1,269,882,745.35 11.81% 1,216,207,972.47 12.87% -1.06% -
Investment real
108,094.94 0.00% 117,081.74 0.00% 0.00% -
estate
Long-term equity
1,929,118.33 0.02% 2,687,049.11 0.03% -0.01% -
investment
Fixed assets 799,578,416.63 7.44% 839,262,550.21 8.88% -1.44% -
Projects under
333,519,454.24 3.10% 236,345,778.78 2.50% 0.60% -
construction
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2. Assets and liabilities measured at fair value
□ Applicable √ Not Applicable
3. Restricted asset rights by the end of the reporting period
N/A
V. Analysis of Investment
1. Overview
□ Applicable √ Not Applicable
2. Major equity investments obtained during the reporting period
□ Applicable √ Not Applicable
3. Major ongoing non-equity investments during the reporting period
□ Applicable √ Not Applicable
4. Financial assets measured at fair value
□ Applicable √ Not Applicable
5. Financial asset investment
(1) Securities investment
□ Applicable √ Not Applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□ Applicable √ Not Applicable
The Company had no derivatives investment during the reporting period.
6. Use of the raised funds
□ Applicable √ Not Applicable
The Company did not use the raised funds during the reporting period.
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7. Investment in important projects with non-raised funds
□ Applicable √ Not Applicable
During the reporting period, the Company did not invest in any important projects with non-raised funds.
VI. Sale of Major Assets and Equities
1. Sale of major assets
□ Applicable √ Not Applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□ Applicable √ Not Applicable
VII. Analysis of Main Holding and Joint-stock Companies
√ Applicable □ Not Applicable
Main subsidiaries and joint-stock companies affecting more than 10% of the Company’s net profit
In RMB
Company Company Main Registered Operating Operating
Total assets Net assets Net profit
name type business capital income profit
Production
and sales
MingQi Subsidiary 50,000,000.00 154,722,926.83 82,946,462.33 79,810,938.58 -1,905,697.52 -1,784,367.54
of kitchen
appliances
Sales of
Shanghai
Subsidiary kitchen 5,000,000.00 74,048,737.32 5,783,316.27 127,822,862.68 -3,617,043.40 -4,382,622.73
Robam
appliances
Sales of
Beijing
Subsidiary kitchen 5,000,000.00 62,654,721.76 40,704,303.78 58,348,724.71 -834,028.26 -740,150.84
Robam
appliances
Production
and sales
Kinde Subsidiary of 32,653,061.00 369,925,785.39 253,242,216.70 92,100,731.82 25,710,966.98 22,165,638.90
integrated
stoves
Acquisition and disposal of subsidiaries during the reporting period
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□ Applicable √ Not Applicable
Description of main holding and joint-stock companies
VIII. Structured Entities Controlled by the Company
□ Applicable √ Not Applicable
IX. Prediction of Operating Results in January to September 2020
□ Applicable √ Not Applicable
X. Risks and Responses
N/A
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Chapter 5 Significant Matters
I. Annual General Meeting of Shareholders and Extraordinary General Meeting of
Shareholders during the Reporting Period
1. Shareholders’ meeting during the reporting period
Proportion
Session of Type of of
Date of meeting Date of disclosure Disclosure index
meeting meeting attending
investors
2019 Annual Annual Announcement of Resolutions of the
General General 2019 Annual General Meeting of
65.33% May 19, 2020 May 20, 2020
Meeting of Meeting of Shareholders (Announcement
Shareholders Shareholders No.2020-015) (www.cninfo.com.cn)
2. Preferred shareholders with voting rights recovered requested to convene an extraordinary general
meeting of shareholders
□ Applicable √ Not Applicable
II. Profit Distribution and Conversion of Capital Reserve into Capital Stock During the
Reporting Period
□ Applicable √ Not Applicable
The Company has no plans of distributing cash dividends or bonus shares, or converting capital reserve into capital stock for the first
half of 2020.
III. Commitments made by the Company’s actual controllers, shareholders, affiliates,
purchasers and the Company itself and other relevant parties already fulfilled during the
reporting period and not yet fulfilled at the end of the reporting period
√ Applicable □ Not Applicable
Date of
Commitm Committing Commitme Commitment
Contents of commitment commitme Performance
ent party nt type duration
nt
Commitm Directors, Commitme Upon the expiration of the above
Long-term
ent made supervisors nt on 36-month restricted sales period, the November Strict
commitment
during and senior restriction shares transferred by any of them 23, 2010 performance
initial management for sales of each year shall not exceed 25% of
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public directly and shares the total shares of the Company held
offering indirectly directly or indirectly by him/her;
or holding and shall not transfer the shares of
re-financi shares of the the Company held directly or
ng Company indirectly by him/her within half
year after leaving the Company
1. The Company/I and other
companies under the Company’s
/my control do not and will not,
directly or indirectly engage in any
activities which are in horizontal
competition with existing and future
businesses of ROBAM and its
holding subsidiaries; 2. If any
business opportunities obtained
from any third party by the
Company/I and other companies
Hangzhou Commitme under the Company’s /my control
Robam nt on constitute or may constitute
Industrial avoiding substantial competition with the November Long-term Strict
Group Co., horizontal businesses of ROBAM, the 23, 2010 commitments performance
Ltd.; Ren competitio Company/I will immediately notify
Jianhua n ROBAM and transfer such
opportunities to ROBAM; 3. The
Company/I and other companies
under the Company’s /my control
promise not to provide any
technology information,
technological process, sales channel
and other commercial secrets for
any other companies, enterprises,
organizations or individuals whose
businesses is in competition with
those of ROBAM.
Other
commitm
ents made The total distributed profits for three
to small (3) consecutive years shall be no
April 10, Strict
and Company Dividend less than 40% of the yearly average Three years
2018 performance
medium attributable profits achieved by the
sharehold Company in such three (3) years.
ers of the
Company
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Whether
the
commitm
Yes
ents are
performed
on time
IV. Appointment and Dismissal of Accounting Firm
Whether the semi-annual financial report has been audited
□ Yes √ No
The semi-annual financial report of the Company has not been audited.
V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standard
Audit Report” Issued by the Accounting Firm for the Reporting Period
□ Applicable √ Not Applicable
VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the Last
Year
□ Applicable √ Not Applicable
VII. Matters Related to Bankruptcy Reorganization
□ Applicable √ Not Applicable
The Company did not have any matters related to bankruptcy reorganization during the reporting period.
VIII. Litigation Matters
Material litigation and arbitration
□ Applicable √ Not Applicable
The Company had no major litigation and arbitration during the reporting period.
Other litigation matters
□ Applicable √ Not Applicable
IX. Questions Raised by the Media
□ Applicable √ Not Applicable
No general question was raised by the media against the Company during the reporting period.
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X. Punishment and Rectification
□ Applicable √ Not Applicable
There was no punishment or rectification during the reporting period.
XI. Integrity Conditions of the Company and its Controlling Shareholders
□ Applicable √ Not Applicable
XII. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or other
Employee Incentives
√ Applicable □ Not Applicable
1. Implementation of the Initial Restrictive Equity Incentive Plan
(1) On January 13, 2015, the Company reviewed and approved the Proposal on the Initial Restrictive Equity Incentive Plan
(Draft) and its Summary of Hangzhou Robam Appliances Co., Ltd. and the Proposal on Requesting the General Meeting of
Shareholders of Hangzhou Robam Appliances Co., Ltd. to Authorize the Board of Directors to Handle Matters Related to the
Restrictive Equity Incentive Plan at the first Extraordinary General Meeting of Shareholders for 2015 of the Company.
(2) On January 21, 2015, the Company reviewed and approved the Proposal on Awarding Restrictive Stocks to Incentive
Objects at the fifth meeting of the third Board of Directors and the fourth meeting of the third Board of Supervisors.
(3) On February 13, 2015, the Company completed the registration for the first grant of restrictive stocks involved in the Initial
Restrictive Equity Incentive Plan (Draft) of Hangzhou Robam Appliances Co., Ltd.
(4) On January 4, 2016, the Company reviewed and approved the Proposal on Adjustment to Number of Reserved Restrictive
Stocks and the Proposal on Matters Concerning the Grant of Reserved Restrictive Stocks to Incentive Objects at the twelfth meeting
of the third Board of Directors and the tenth meeting of the third Board of Supervisors.
(5) On January 22, 2016, the Company reviewed and approved the Proposal on Releasing the First Unlock Period for the
Initial Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan at the thirteenth meeting of the third Board of Directors
and the eleventh meeting of the third Board of Supervisors.
(6) On February 5, 2016, the Company completed the registration for the grant of reserved restrictive stocks involved in the
Initial Restrictive Equity Incentive Plan (Draft) of Hangzhou Robam Appliances Co., Ltd.
(7) On April 7, 2016, the Company reviewed and approved the Proposal on the Repurchase and Cancellation of Some Incentive
Shares under the Initial Restrictive Equity Incentive Plan at the fourteenth meeting of the third Board of Directors and the twelfth
meeting of the third Board of Supervisors.
(8) On January 23, 2017, the Company reviewed and approved the Proposal on the Repurchase and Cancellation of Some
Incentive Stocks under the Initial Restrictive Equity Incentive Plan, the Proposal on Releasing the Second Unlock Period for the
Initial Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan and the Proposal on Releasing the First Unlock Period
for the Reserved Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan at the nineteenth meeting of the third Board
of Directors and the sixteenth meeting of the third Board of Supervisors.
(9) On February 6, 2018, the Company reviewed and approved the Proposal on Releasing the Third Unlock Period for the
Initial Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan and the Proposal on Releasing the Second Unlock
Period for the Reserved Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan at the fourth meeting of the fourth
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Board of Directors and the fourth meeting of the fourth Board of Supervisors.
(10) On January 21, 2019, the Company reviewed and approved the Proposal on Releasing the Third Unlock Period for the
Reserved Grant of Restrictive Stocks under the Restrictive Equity Incentive Plan at the ninth meeting of the fourth Board of Directors
and the ninth meeting of the fourth Board of Supervisors
2. Implementation of 2018 Employee Stock Ownership Plan
(1) On January 11, 2018, the Company reviewed and approved the Proposal on 2018 Employee Stock Ownership Plan of the
Company (Draft) and its Summary and the Proposal on Authorizing the Board of Directors to Handle Matters Concerning the
Employee Stock Ownership Plan at the third meeting of the fourth Board of Directors. On the same day, the Company reviewed and
approved the Proposal on 2018 Employee Stock Ownership Plan of the Company (Draft) and its Summary at the third meeting of the
fourth Board of Supervisors.
(2) On February 2, 2018, the Company reviewed and approved the Proposal on 2018 Employee Stock Ownership Plan of the
Company (Draft) and its Summary and the Proposal on Authorizing the Board of Directors to Handle Matters Concerning the
Employee Stock Ownership Plan at the first Extraordinary General Meeting of Shareholders of 2018.
(3) On May 4, 2018, the Company completed the 2018 employee stock ownership plan (ESOP) at the purchase price of RMB
35.94/share, with 5,443,300 shares, accounting for 0.57% of the Company’s total shares.
(4) On July 22, 2020, the Company completed the ESOP. See details in the Announcement on the Completion of the Employee
Stock Ownership Plan (Announcement No. 2020-018).
XIII. Major Connected Transactions
1. Connected transactions concerning daily operations
□ Applicable √ Not Applicable
The Company had no connected transactions concerning daily operations during the reporting period.
2. Connected transactions related to the acquisition or sales of assets or equity
□ Applicable √ Not Applicable
The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period.
3. Connected transactions related to joint outward investment
□ Applicable √ Not Applicable
The Company had no connected transactions related to joint outward investment during the reporting period.
4. Connected transactions on credit and debt
□ Applicable √ Not Applicable
The Company had no connected transactions on credit and debt during the reporting period.
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5. Other major connected transactions
□ Applicable √ Not Applicable
There were no other major connected transactions during the reporting period.
XIV. Non-operating Occupation of Funds of the Listed Company by the Controlling
Shareholder and its Affiliated Parties
□ Applicable √ Not Applicable
There was no non-operating occupation of funds of the listed company by the controlling shareholder and its affiliated parties during
the reporting period.
XV. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √ Not Applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There was no contracting during the reporting period.
(3) Lease
□ Applicable √ Not Applicable
There was no leasing during the reporting period.
2. Material guarantee
□ Applicable √ Not Applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
□ Applicable √ Not Applicable
There was no financial management entrusting during the reporting period.
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4. Other material contracts
□ Applicable √ Not Applicable
The Company had no other material contracts during the reporting period.
XVI. Social Responsibility
Whether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental protection
authorities.
Not Applicable.
XVII. Explanation of Other Significant Matters
□ Applicable √ Not Applicable
The Company had no other significant matters that need to be explained during the reporting period.
XVIII. Significant Matters of Subsidiaries of the Company
□ Applicable √ Not Applicable
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Chapter 6 Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before change Change (+. -) After change
Shares
Issue
converted
Percentage of Bonus Percentage
Number from Others Sub-total Number
(%) new shares (%)
capital
shares
reserve
I. Shares subject to
14,123,269 1.48% 14,123,269 1.48%
sales restrictions
Shares held by other
14,123,269 1.48% 14,123,269 1.48%
domestic investors
Of which: shares
held by domestic 14,123,269 1.48% 14,123,269 1.48%
natural persons
II. Shares without
934,900,781 98.52% 934,900,781 98.52%
sales restrictions
RMB ordinary
934,900,781 98.52% 934,900,781 98.52%
shares
III. Total shares 949,024,050 100.00% 949,024,050 100.00%
2. Changes in shares subject to sales restrictions
□ Applicable √ Not Applicable
II. Securities Issuance and Listing
□ Applicable √ Not Applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: share
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Total number of preference
Total number of common shareholders with voting rights
shareholders at the end of 53,846 recovered at the end of the 0
the reporting period reporting period (if any) (see Note
8)
Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders
Number of Pledged or
Number of
common Change Number of frozen shares
Shareho shares
Nature of shares held during the shares without
Name of shareholder lding subject to
shareholder at the end of reporting sales Num
ratio sales Status
the reporting period restrictions ber
restrictions
period
Domestic 49.68%
Hangzhou Robam Industrial
non-state-own 471,510,000 471,510,000
Group Co., Ltd.
ed corporation
Hong Kong Securities Overseas 14.35%
136,218,189 1,142,792 136,218,189
Clearing Company Limited corporation
Domestic 1.29%
Shen Guoying 12,240,000 12,240,000
natural person
Domestic 1.00%
Hangzhou Jinchuang
non-state-own 9,451,985 9,451,985
Investment Co., Ltd.
ed corporation
Shenzhen Nuts Asset 0.88%
Management Company -
Nuts Asset - Structured
Other 8,311,165 8,311,165
Private Equity Fund (Phase
II) Held by Agents of
ROBAM
China Construction Bank 0.82%
Corporation – Essence Fund
Other 7,754,042 -3,293,277 7,754,042
Selected Equity Securities
Investment Fund
Domestic 0.67%
Hangzhou Yinchuang
non-state-own 6,318,000 6,318,000
Investment Co., Ltd.
ed corporation
Aberdeen Standard 0.65%
Investments (Asia) Limited -
Other 6,152,817 -2,416,633 6,152,817
Aberdeen Standard - China
A-share Equity Fund
Ren Jianhua Domestic 0.62% 5,923,150 4,442,362 1,480,788
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natural person
Central Huijin Investment State-owned 0.60%
5,685,810 5,685,810
Limited corporation
Strategic investor or general legal person
who becomes one of the top 10 common
shareholders due to rights issue (if any)
(see Note 3)
Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of Hangzhou
Description of the associated relationship
Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou Jinchuang
or consistent actions of the above
Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife.
shareholders
Therefore, there is a possibility that these shareholders will act in concert.
Shareholdings of top 10 common shareholders not subject to sales restrictions
Number of shares without sales restrictions Type of share
Name of shareholder
held at the end of the reporting period Type of share Number of shares
Hangzhou Robam Industrial Group Co., RMB ordinary
471,510,000 471,510,000
Ltd. shares
Hong Kong Securities Clearing Company RMB ordinary
136,218,189 136,218,189
Limited shares
RMB ordinary
Shen Guoying 12,240,000 12,240,000
shares
RMB ordinary
Hangzhou Jinchuang Investment Co., Ltd. 9,451,985 9,451,985
shares
Shenzhen Nuts Asset Management
Company - Nuts Asset - Structured RMB ordinary
8,311,165 8,311,165
Private Equity Fund (Phase II) Held by shares
Agents of ROBAM
China Construction Bank Corporation –
RMB ordinary
Essence Fund Selected Equity Securities 7,754,042 7,754,042
shares
Investment Fund
Hangzhou Yinchuang Investment Co., RMB ordinary
6,318,000 6,318,000
Ltd. shares
Aberdeen Standard Investments (Asia)
RMB ordinary
Limited - Aberdeen Standard - China 6,152,817 6,152,817
shares
A-share Equity Fund
RMB ordinary
Central Huijin Investment Limited 5,685,810 5,685,810
shares
Shenzhen Nuts Asset Management
RMB ordinary
Company - Nuts Asset - ROBAM 5,443,324 5,443,324
shares
Win-win No. 1 Private Investment Fund
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Description on associated relationship or
consistent actions among the top 10
Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of Hangzhou
common shareholders not subject to sales
Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou Jinchuang
restrictions and between the top 10
Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife.
common shareholders not subject to sales
Therefore, there is a possibility that these shareholders will act in concert.
restrictions and the top 10 common
shareholders
Description on the top 10 common
shareholders engaging in securities
margin trading (if any) (see Note 4)
Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Company
have any agreed repurchase trading during the reporting period?
□ Yes √ No
There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subject to
sales restrictions of the Company during the reporting period.
IV. Changes in the Controlling Shareholder and the Actual Controller
Changes in the controlling shareholder during the reporting period
□ Applicable √ Not Applicable
There was no change in the controlling shareholder of the Company during the reporting period.
Changes in the actual controller during the reporting period
□ Applicable √ Not Applicable
There was no change in the actual controller of the Company during the reporting period.
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Chapter 7 Preferred Shares
□ Applicable √ Not Applicable
The Company had no preferred shares during the reporting period.
Chapter 8 Convertible Bonds
□ Applicable √ Not Applicable
The Company had no convertible bond during the reporting period.
Chapter 9 Directors, Supervisors and Senior Management
I. Changes in the Shareholdings of Directors, Supervisors, and Senior Management
□ Applicable √ Not Applicable
There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reporting
period. For details, please refer to the Annual Report 2019.
II. Changes in Directors, Supervisors, and Senior Management
□ Applicable √ Not Applicable
There was no change in directors, supervisors, and senior management of the Company during the reporting period. For details,
please refer to the Annual Report 2019.
Note: On August 18, 2020, the Company held the first 2020 Extraordinary General Meeting of Shareholders, the first meeting of the
fifth Board of Directors and the first meeting of the fifth Board of Supervisors, during which matters concerning the change in the
term of office of the Board of Directors, Board of Supervisors and senior management were reviewed and approved. For details,
please refer to the Announcement on Resolutions of the First Meeting of the Fifth Board of Directors (Announcement No. 2020-024),
the Announcement on Resolutions of the First Meeting of the Fifth Board of Supervisors (Announcement No. 2020-025), and the
Announcement on Resolutions of the First Extraordinary General Meeting of Shareholders for 2020 (Announcement No. 2020-026).
Chapter 10 Corporate Bonds
Whether the Company has publicly issued corporate bonds that are listed on the stock exchange and have not matured or expired on
the date of approval of the semi-annual report but unpaid in full
No
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Chapter 11 Financial Report
I. Audit Report
Whether the semi-annual report has been audited
□ Yes √ No
The semi-annual financial report of the Company has not been audited.
II. Financial Statements
The financial statement notes are represented in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Robam Appliances Co., Ltd.
June 30, 2020
In RMB
Item June 30, 2020 December 31, 2019
Current assets:
Monetary capital 4,351,296,343.79 4,054,121,726.23
Deposit reservation for balance
Lendings to banks and other
financial institutions
Financial assets held for trading 925,000,000.00 1,360,000,000.00
Derivative financial assets
Notes receivable 1,571,911,271.01 986,693,149.40
Accounts receivable 772,891,855.63 725,630,901.28
Accounts receivable financing 408,972,104.07
Prepayments 81,421,913.85 50,113,549.84
Receivable premium
Reinsurance accounts receivable
Provision of cession receivable
Other receivables 62,642,970.58 110,899,448.65
Including: Interests receivable
Dividends receivable 14,295,039.38
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Redemptory monetary capital
for sale
Inventory 1,269,882,745.35 1,339,176,925.20
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 2,339,831.76 16,189,237.81
Total current assets 9,037,386,931.97 9,051,797,042.48
Non-current assets:
Loans and advances
Debt investment 0.00 0.00
Other debt investments
Long-term accounts receivable
Long-term equity investment 1,929,118.33 4,168,338.79
Investment in other equity
102,116,023.22 102,116,023.22
instruments
Other non-current financial
assets
Investment real estate 108,094.94 112,588.34
Fixed assets 799,578,416.63 826,234,929.97
Projects under construction 333,519,454.24 272,211,720.62
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 237,055,359.56 219,733,270.51
Development expenses
Goodwill 80,589,565.84 80,589,565.84
Long-term deferred expenses 392,702.34 523,195.74
Deferred income tax assets 131,970,751.28 70,877,116.09
Other non-current assets 28,809,208.26 23,558,781.27
Total non-current assets 1,716,068,694.64 1,600,125,530.39
Total assets 10,753,455,626.61 10,651,922,572.87
Current liabilities:
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Short-term loans
Borrowings from the central
bank
Borrowings from banks and
other financial institutions
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable 554,767,283.02 603,308,648.96
Accounts payable 1,453,658,478.04 1,395,061,285.28
Advance receipts 1,092,261,332.25
Contract liabilities 989,070,578.98
Financial assets sold for
repurchase
Deposits from customers and
interbank
Receivings from vicariously
traded securities
Receivings from vicariously sold
securities
Payroll payable 33,283,722.07 122,070,325.03
Taxes payable 224,129,654.69 102,726,655.21
Other payables 246,029,775.35 241,641,864.89
Including: Interests payable
Dividends payable
Fees and commissions payable
Dividends payable for
reinsurance
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities
Total current liabilities 3,500,939,492.15 3,557,070,111.62
Non-current liabilities:
Reserves for insurance contracts
Long-term loans
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Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term accounts payable
Long-term payroll payable
Estimated liabilities
Deferred income 124,111,240.24 114,851,263.30
Deferred income tax liabilities 5,455,130.17 5,717,848.25
Other non-current liabilities
Total non-current liabilities 129,566,370.41 120,569,111.55
Total liabilities 3,630,505,862.56 3,677,639,223.17
Owner’s equity
Capital stock 949,024,050.00 949,024,050.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 401,799,332.67 401,799,332.67
Less: treasury share
Other comprehensive income -15,157,634.16 -15,157,634.16
Special reserves
Surplus reserves 474,516,412.50 474,516,412.50
General risk reserves
Undistributed profits 5,192,011,944.74 5,054,206,720.45
Total owners’ equity attributable to
7,002,194,105.75 6,864,388,881.46
the parent company
Minority interests 120,755,658.30 109,894,468.24
Total owner’s equity 7,122,949,764.05 6,974,283,349.70
Total liabilities and owner’s equity 10,753,455,626.61 10,651,922,572.87
Legal representative: Ren Jianhua
Person in charge of accounting: Zhang Guofu
Head of the accounting department: Zhang Guofu
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2. Balance Sheet of the Parent Company
In RMB
Item June 30, 2020 December 31, 2019
Current assets:
Monetary capital 4,271,222,549.03 3,974,490,043.89
Financial assets held for trading 700,000,000.00 1,100,000,000.00
Derivative financial assets
Notes receivable 1,571,911,271.01 974,185,844.67
Accounts receivable 741,102,670.94 704,246,884.81
Accounts receivable financing 408,605,906.50
Prepayments 56,568,629.78 41,005,526.82
Other receivables 51,740,494.70 105,766,154.95
Including: Interests receivable
Dividends receivable 14,295,039.38
Inventory 1,205,514,806.83 1,268,289,683.46
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 12,064,254.50
Total current assets 8,598,060,422.29 8,588,654,299.60
Non-current assets:
Debt investment
Other debt investments
Long-term accounts receivable
Long-term equity investment 228,435,052.06 230,674,272.52
Investment in other equity
102,116,023.22 102,116,023.22
instruments
Other non-current financial
assets
Investment real estate 420,198.40 436,960.72
Fixed assets 773,355,978.92 798,954,901.11
Projects under construction 324,159,531.39 271,619,361.89
Productive biological assets
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Oil and gas assets
Right-of-use assets
Intangible assets 152,997,182.46 157,002,023.43
Development expenses
Goodwill
Long-term deferred expenses 306,077.98 383,195.74
Deferred income tax assets 130,349,913.48 70,173,783.09
Other non-current assets 28,809,208.26 23,558,781.27
Total non-current assets 1,740,949,166.17 1,654,919,302.99
Total assets 10,339,009,588.46 10,243,573,602.59
Current liabilities:
Short-term loans
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable 534,559,168.76 601,960,648.96
Accounts payable 1,391,003,055.69 1,358,297,550.30
Advance receipts 983,128,543.51
Contract liabilities 935,858,021.08
Payroll payable 23,212,760.47 97,599,336.20
Taxes payable 218,793,099.39 96,425,637.42
Other payables 228,644,387.16 226,064,422.04
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities
Total current liabilities 3,332,070,492.55 3,363,476,138.43
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred shares
Perpetual bonds
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Lease liabilities
Long-term accounts payable
Long-term payroll payable
Estimated liabilities
Deferred income 106,869,820.24 114,851,263.30
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 106,869,820.24 114,851,263.30
Total liabilities 3,438,940,312.79 3,478,327,401.73
Owner’s equity
Capital stock 949,024,050.00 949,024,050.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 401,754,349.66 401,754,349.66
Less: treasury share
Other comprehensive income -15,157,634.16 -15,157,634.16
Special reserves
Surplus reserves 474,516,412.50 474,516,412.50
Undistributed profits 5,089,932,097.67 4,955,109,022.86
Total owner’s equity 6,900,069,275.67 6,765,246,200.86
Total liabilities and owner’s equity 10,339,009,588.46 10,243,573,602.59
3. Consolidated Income Statement
In RMB
Item Semi-annual 2020 Semi-annual 2019
I. Total operating income 3,211,172,335.79 3,527,413,882.96
Including: Operating income 3,211,172,335.79 3,527,413,882.96
Interest income
Earned premium
Fee and commission income
II. Total operating costs 2,554,722,969.33 2,813,102,211.83
Including: Operating costs 1,450,728,576.58 1,599,401,962.81
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Interest expenses
Fee and commission expenses
Surrender value
Net payments for insurance claims
Net allotment of reserves for insurance
liabilities
Policy dividend expenditures
Reinsurance expenses
Taxes and surcharges 25,188,234.23 29,458,998.38
Selling expenses 892,679,297.76 990,044,906.61
Overhead costs 116,085,321.98 116,171,528.77
R&D expenses 117,824,032.62 107,629,786.13
Financial expenses -47,782,493.84 -29,604,970.87
Including: Interest expenses 139,284.26 201,831.98
Interest income 47,604,818.42 30,307,927.32
Add: other income 73,726,234.28 56,839,181.84
Investment income (“-” for losses) 24,102,232.36 39,858,974.49
Including: Income from investment in joint
-2,239,220.46 69,197.95
ventures and affiliated enterprises
Gains on derecognition of financial assets
measured at amortized cost
Exchange gains (“-” for losses)
Net exposure hedging gains (“-” for losses)
Gains from changes in fair value (“-” for losses)
Losses from credit impairment (“-” for losses) -18,511,769.59 -8,952,029.23
Losses from asset impairment (“-” for losses)
Gains on disposal of assets (“-” for losses) 11,388.98 -296,672.23
III. Operating profits (“-” for losses) 735,777,452.49 801,761,126.00
Add: non-operating income 586,353.17 1,611,946.09
Less: non-operating expenditure 1,695,304.64 2,882,444.05
IV. Total profits (“-” for total losses) 734,668,501.02 800,490,628.04
Less: income tax expenses 111,490,061.67 123,074,038.15
V. Net profits (“-” for losses) 623,178,439.35 677,416,589.89
(I) By operational sustainability
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1. Net profits from continuing operations (“-” for net
623,178,439.35 677,416,589.89
losses)
2. Net profits from discontinued operations (“-” for
net losses)
(II) By ownership
1. Net profits attributable to owners of the parent
612,317,249.29 670,403,994.20
company
2. Minority shareholders’ gains and losses 10,861,190.06 7,012,595.69
VI. After-tax net amount of other comprehensive income
After-tax net amount of other comprehensive income
attributable to owners of the parent company
(I) Other comprehensive income that cannot be
reclassified into gains and losses
1. Changes in re-measured and defined benefit
plans
2. Other comprehensive income which cannot
be transferred to gains or losses under the equity method
3. Changes in fair value of the investment in
other equity instruments
4. Changes in fair value of the credit risk of
the Company
5. Others
(II) Other comprehensive income which will be
reclassified into gains and losses
1. Other comprehensive income which can be
transferred into gains and losses under the equity method
2. Changes in fair value of other debt
investments
3. Amount of financial assets reclassified into
other comprehensive income
4. Provision for credit impairment of other
debt investments
5. Cash flow hedge reserve
6. Converted difference in foreign currency
statements
7. Others
After-tax net amount of other comprehensive income
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attributable to minority shareholders
VII. Total comprehensive income 623,178,439.35 677,416,589.89
Total comprehensive income attributable to owners of
612,317,249.29 670,403,994.20
the parent company
Total comprehensive income attributable to minority
10,861,190.06 7,012,595.69
shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS 0.65 0.71
(II) Diluted EPS 0.65 0.71
Legal representative: Ren Jianhua
Person in charge of accounting: Zhang Guofu
Head of the accounting department: Zhang Guofu
4. Income Statement of the Parent Company
In RMB
Item Semi-annual 2020 Semi-annual 2019
I. Operating income 2,980,914,680.77 3,259,793,326.67
Less: operating costs 1,349,585,204.35 1,507,498,151.92
Taxes and surcharges 22,974,970.25 26,332,164.95
Selling expenses 812,123,731.90 867,885,223.87
Administrative expenses 82,217,605.50 81,117,115.96
R&D expenses 112,943,235.17 103,711,169.47
Financial expenses -47,002,146.56 -27,805,458.39
Including: Interest expenses 139,284.26 201,831.98
Interest income 46,641,570.65 28,247,326.34
Add: other income 68,634,379.72 51,909,682.29
Investment income (“-” for losses) 18,620,433.19 36,964,336.66
Including: Income from investment in joint
-2,239,220.46 69,197.95
ventures and affiliated enterprises
Gains on derecognition of financial assets
measured at amortized cost (“-” for losses)
Net exposure hedging gains (“-” for losses)
Gains from changes in fair value (“-” for losses)
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Losses from credit impairment (“-” for losses) -16,715,314.38 -9,148,426.64
Losses from asset impairment (“-” for losses)
Gains on disposal of assets (“-” for losses) -3,117.74 -296,672.23
II. Operating profits (“-” for losses) 718,608,460.95 780,483,878.97
Add: non-operating income 547,098.05 1,525,524.06
Less: non-operating expenses 1,556,999.22 1,093,261.57
III. Total profits (“-” for total losses) 717,598,559.78 780,916,141.46
Less: income tax expenses 108,263,459.97 117,441,547.87
IV. Net profits (“-” for net losses) 609,335,099.81 663,474,593.59
(I) Net profits from going concern (“-” for net losses) 609,335,099.81 663,474,593.59
(II) Net profits from discontinued operations (“-” for
net losses)
V. After-tax net amount of other comprehensive income
(I) Other comprehensive income that cannot be
reclassified into gains and losses
1. Changes in re-measured and defined benefit
plans
2. Other comprehensive income which cannot
be transferred into gains or losses under the equity method
3. Changes in fair value of the investment in
other equity instruments
4. Changes in fair value of the credit risk of
the Company
5. Others
(II) Other comprehensive income which will be
reclassified into gains and losses
1. Other comprehensive income which can be
transferred into gains and losses under the equity method
2. Changes in fair value of other debt
investments
3. Amount of financial assets reclassified into
other comprehensive income
4. Provision for credit impairment of other
debt investments
5. Cash flow hedge reserve
6. Converted difference in foreign currency
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statements
7. Others
VI. Total comprehensive income 609,335,099.81 663,474,593.59
VII. EPS:
(I) Basic EPS
(II) Diluted EPS
5. Consolidated Cash Flow Statement
In RMB
Item Semi-annual 2020 Semi-annual 2019
I. Cash flow from operating activities:
Cash received for the sale of goods and rendering of services 3,214,555,668.77 3,607,783,677.83
Net increase in clients’ deposits and deposits from banks and
other financial institutions
Net increase in borrowings from the central bank
Net increase in borrowings from other financial institutions
Cash received from receiving insurance premium of the
original insurance contract
Net cash from receiving reinsurance premium
Net increase in deposits and investment of insured persons
Cash received from interests, fees and commissions
Net increase in borrowed funds
Net increase in repurchase business funds
Net cash received from vicariously traded securities
Refunds of taxes 533,442.61
Cash received relating to other operating activities 143,788,116.65 95,145,745.57
Subtotal of cash inflow from operating activities 3,358,343,785.42 3,703,462,866.01
Cash paid for purchased products and received services 1,594,931,903.80 1,516,314,982.52
Net increase in loans and advances to customers
Net increase in deposits with the central bank and other
financial institutions
Cash paid for claims of original insurance contract
Net increase in lending funds
Cash paid for interests, fees and commissions
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Cash paid for policy dividends
Cash paid to and on behalf of employees 363,952,500.04 354,764,621.08
Cash paid for taxes 277,030,839.79 402,678,055.37
Cash paid related to other operating activities 714,741,408.23 771,014,122.46
Subtotal of cash outflow from operating activities 2,950,656,651.86 3,044,771,781.43
Net cash flow from operating activities 407,687,133.56 658,691,084.58
II. Cash flow from investing activities:
Cash received from sales of investments 1,140,000,000.00 1,718,000,000.00
Cash received from return on investments 42,018,525.66 47,573,034.00
Net cash received from disposal of fixed assets, intangible
35,000.00 171,800.00
assets and other long-term assets=
Net cash received from disposal of subsidiaries and other
business entities
Cash received related to other investment activities
Subtotal of cash inflow from investment activities 1,182,053,525.66 1,765,744,834.00
Cash paid for purchase and construction of fixed assets,
124,109,953.42 151,414,551.72
intangible assets and other long-term assets
Cash paid to investments 705,000,000.00 1,126,500,000.00
Net increase in pledged loans
Net cash from subsidiaries and other operating entities
Cash paid related to other investment activities 5,000,000.00
Subtotal of cash outflow from investment activities 829,109,953.42 1,282,914,551.72
Net cash flow from investment activities 352,943,572.24 482,830,282.28
III. Cash flow from financing activities:
Cash from acquiring investments
Including: Cash received by subsidiaries from investments of
minority shareholders
Cash from acquiring debts
Other cashes received in relation to financing activities
Subtotal of cash inflow from financing activities
Cash repayments of debts
Cash paid for distribution of dividends, profits or interest
474,512,025.00 759,219,240.00
expenses
Including: Dividends and profits paid by the subsidiaries to
minority shareholders
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Other cashes paid in relation to financing activities
Subtotal of cash outflow from financing activities 474,512,025.00 759,219,240.00
Net cash flow from financing activities -474,512,025.00 -759,219,240.00
IV. Effect of change in exchange rate on cash and cash equivalents 540,552.95 116,415.75
V. Net increase in cash and cash equivalents 286,659,233.75 382,418,542.61
Plus: Opening balance of cash and cash equivalents 4,029,296,265.50 2,177,219,858.85
VI. Closing balance of cash and cash equivalents 4,315,955,499.25 2,559,638,401.46
6. Cash Flow Statement of the Parent Company
In RMB
Item Semi-annual 2020 Semi-annual 2019
I. Cash flow from operating activities:
Cash received for the sale of goods and rendering of services 3,026,131,726.09 3,369,769,326.89
Refunds of taxes
Cash received relating to other operating activities 109,796,058.70 80,284,290.10
Subtotal for cash inflow from operating activities 3,135,927,784.79 3,450,053,616.99
Cash paid for purchased products and received services 1,530,403,008.52 1,472,285,266.95
Cash paid to and on behalf of employees 293,387,839.45 278,362,198.01
Cash paid for taxes 253,274,191.18 361,186,090.14
Cash paid related to other operating activities 634,242,077.40 670,991,974.83
Subtotal of cash outflow from operating activities 2,711,307,116.55 2,782,825,529.93
Net cash flow from operating activities 424,620,668.24 667,228,087.06
II. Cash flow from investment activities:
Cash received from sales of investments 900,000,000.00 1,500,000,000.00
Cash received from return on investments 36,406,272.24 44,678,396.17
Net cash received from disposal of fixed assets, intangible
10,000.00 171,800.00
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business entities
Cash received related to other investment activities
Subtotal of cash inflow from investment activities 936,416,272.24 1,544,850,196.17
Cash paid for purchase and construction of fixed assets,
97,961,767.61 136,533,684.66
intangible assets and other long-term assets
Cash paid to investments 500,000,000.00 909,500,000.00
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Net cash from subsidiaries and other operating entities
Cash paid related to other investment activities
Subtotal of cash outflow from investment activities 597,961,767.61 1,046,033,684.66
Net cash flow from investment activities 338,454,504.63 498,816,511.51
III. Cash flow from financing activities:
Cash from acquiring investments
Cash from acquiring debts
Other cashes received in relation to financing activities
Subtotal of cash inflow from financing activities
Cash repayments of debts
Cash paid for distribution of dividends, profits or interest
474,512,025.00 759,219,240.00
expenses
Other cashes paid in relation to financing activities
Subtotal of cash outflow from financing activities 474,512,025.00 759,219,240.00
Net cash flow from financing activities -474,512,025.00 -759,219,240.00
IV. Effect of change in exchange rate on cash and cash equivalents 540,502.02 116,426.36
V. Net increase in cash and cash equivalents 289,103,649.89 406,941,784.93
Plus: Opening balance of cashes and cash equivalents 3,951,074,513.16 2,000,183,395.66
VI. Closing balance of cash and cash equivalents 4,240,178,163.05 2,407,125,180.59
7. Consolidated Statement of Changes in Owners’ Equity
Current amount
In RMB
Semi-annual 2020
Owners’ equity attributable to the parent company
Other equity Ge
Le
instruments Other Sp ner
ss: Minor
Capita compr eci Surplu al Total
Item tre Undistr Ot ity
Pre Per owners
Capita l ehensi al s ris Sub-tot
asu ibuted he interes
ferr pet Ot ’ equity
l stock reserv ve res reserv k al
ry profits rs ts
ed ual he
e incom erv e res
sha bon rs sto
e e erv
res ds ck
e
I. 949,02 401,79 -15,15 474,51 5,054,2 6,864,3 109,89 6,974,2
Closin 4,050. 9,332. 7,634. 6,412. 06,720. 88,881. 4,468. 83,349.
g 00 67 16 50 45 46 24 70
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balanc
e of
last
year
Plus:
Chang
es in
accou
nting
polici
es
Corre
ction
of
errors
of the
previo
us
period
Busin
esses
combi
nation
under
comm
on
contro
l
Others
II.
Openi
ng 949,02 401,79 -15,15 474,51 5,054,2 6,864,3 109,89 6,974,2
balanc 4,050. 9,332. 7,634. 6,412. 06,720. 88,881. 4,468. 83,349.
e of 00 67 16 50 45 46 24 70
this
year
III. 137,80 137,80 10,861 148,66
Chang 5,224.2 5,224.2 ,190.0 6,414.3
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e in 9 9 6 5
curren
t
period
( “-”
for
decrea
se)
(I)
Total
compr 612,31 612,31 10,861 623,17
ehensi 7,249.2 7,249.2 ,190.0 8,439.3
ve 9 9 6 5
incom
e
(II)
Capita
l
invest
ed and
decrea
sed by
the
owner
s
1.
Com
mon
shares
invest
ed by
the
owner
s
2.
Capita
l
invest
ed by
holder
s of
other
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equity
instru
ments
3.
Amou
nt of
share-
based
payme
nts
recog
nized
in
owner
s’
equity
4.
Others
(III)
-474,51 -474,51 -474,51
Profit
2,025.0 2,025.0 2,025.0
distrib
0 0 0
ution
1.
Withd
rawal
of
surplu
s
reserv
e
2.
Appro
priatio
n of
genera
l risk
reserv
e
3.
-474,51 -474,51 -474,51
Distri
2,025.0 2,025.0 2,025.0
bution
0 0 0
to
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owner
s (or
shareh
olders
)
4.
Others
(IV)
Intern
al
carry-
forwar
d of
owner
s’
equity
1.
Capita
l
reserv
e
conve
rted
into
capital
(or
capital
stock)
2.
Surplu
s
reserv
e
conve
rted
into
capital
(or
capital
stock)
3.
Surplu
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s
reserv
es
makin
g up
for
losses
4.
Chang
es of
define
d
benefi
t plans
carrie
d
forwar
d to
retain
ed
earnin
gs
5.
Other
compr
ehensi
ve
incom
e
carrie
d
forwar
d to
retain
ed
earnin
gs
6.
Others
(V)
Specia
l
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reserv
e
1.
Withd
rawn
in
curren
t
period
2.
Used
in
curren
t
period
(VI)
Others
IV.
Closin
g
949,02 401,79 -15,15 474,51 5,192,0 7,002,1 120,75 7,122,9
balanc
4,050. 9,332. 7,634. 6,412. 11,944. 94,105. 5,658. 49,764.
e of
00 67 16 50 74 75 30 05
curren
t
period
Amount of the previous period
In RMB
Semi-annual 2019
Owners’ equity attributable to the parent company
Other equity
Othe
instruments
Less r Total
Ca Gen Undi Mino
Pr Pe owne
Item Capi : com Spec Surp
pita eral strib rity
efe rpe rs’
tal treas preh ial lus Othe Sub-
l risk uted intere
rre tua equit
Oth reser ury ensi reser reser rs total
sto reser profi sts
d l y
ers ve stoc ve ve ve
ck sh bo ve ts
k inco
are nd
me
s s
I. Closing 949 401, 3,45 474, 4,22 6,04 85,46 6,130
balance of ,02 689, 6,98 516, 3,61 5,38 3,961 ,848,
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last year 4,0 801. 9.00 412. 1,11 4,38 .41 348.9
50. 42 50 2.65 7.57 8
00
Plus:
Changes in
accounting
policies
Correction of
errors of the
previous
period
Businesses
combination
under
common
control
Others
949
401, 474, 4,22 6,04 6,130
II. Opening ,02 3,45 85,46
689, 516, 3,61 5,38 ,848,
balance of 4,0 6,98 3,961
801. 412. 1,11 4,38 348.9
this year 50. 9.00 .41
42 50 2.65 7.57 8
00
III. Change -3,4 -88, -85,
109, 7,012 -78,2
in current 56,9 815, 248,
531. ,595. 36,12
period (“-” 89.0 245. 725.
25 69 9.86
for decrease) 0 80 55
670, 670,
(I) Total 7,012 677,4
403, 403,
comprehensi ,595. 16,58
994. 994.
ve income 69 9.89
20 20
(II) Capital -3,4
109, 3,56 3,566
invested and 56,9
531. 6,52 ,520.
decreased by 89.0
25 0.25 25
the owners 0
1. Common
shares
invested by
the owners
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2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based -3,4
109, 3,56 3,566
payments 56,9
531. 6,52 ,520.
recognized in 89.0
25 0.25 25
owners’ 0
equity
4. Others
-759 -759
-759,
(III) Profit ,219, ,219
219,2
distribution 240. ,240
40.00
00 .00
1.
Withdrawal
of surplus
reserve
2.
Appropriatio
n of general
risk reserve
3. -759 -759
-759,
Distribution ,219, ,219
219,2
to owners (or 240. ,240
40.00
shareholders) 00 .00
4. Others
(IV) Internal
carry-forwar
d of owners’
equity
1. Capital
reserve
converted
into capital
(or capital
stock)
2. Surplus
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reserve
converted
into capital
(or capital
stock)
3. Surplus
reserves
making up
for losses
4. Changes of
defined
benefit plans
carried
forward to
retained
earnings
5. Other
comprehensi
ve income
carried
forward to
retained
earnings
6. Others
(V) Special
reserve
1. Withdrawn
in current
period
2. Used in
current
period
(VI) Others
949
IV. Closing 401, 474, 4,13 5,96 6,052
,02 92,47
balance of 799, 516, 4,79 0,13 ,612,
4,0 6,557
current 332. 412. 5,86 5,66 219.1
50. .10
period 67 50 6.85 2.02 2
00
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8. Statement of Changes in Owners’ Equity of the Parent Company
Current amount
In RMB
Semi-annual 2020
Other equity Other
Undi
instruments Capita Less: compr Specia Surplu
Capit strib Total
Item Prefe Perp l treasur ehensi l s
al uted Others owners’
rred etual Othe reserv y ve reserv reserv
stock profi equity
share bond rs e stock incom e e
ts
s s e
4,95
I. Closing 949,0 401,75 -15,15 474,51
5,10 6,765,24
balance of last 24,05 4,349. 7,634. 6,412.
9,02 6,200.86
year 0.00 66 16 50
2.86
Plus:
Changes in
accounting
policies
Correction of
errors of the
previous
period
Others
4,95
II. Opening 949,0 401,75 -15,15 474,51
5,10 6,765,24
balance of this 24,05 4,349. 7,634. 6,412.
9,02 6,200.86
year 0.00 66 16 50
2.86
III. Change in 134,
current period 823, 134,823,
(“-” for 074. 074.81
decrease) 81
609,
(I) Total
335, 609,335,
comprehensive
099. 099.81
income
81
(II) Capital
invested and
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decreased by
the owners
1. Common
shares
invested by the
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payments
recognized in
owners’ equity
4. Others
-474,
(III) Profit 512, -474,512
distribution 025. ,025.00
00
1. Withdrawal
of surplus
reserve
-474,
2. Distribution
512, -474,512
to owners (or
025. ,025.00
shareholders)
00
3. Others
(IV) Internal
carry-forward
of owners’
equity
1. Capital
reserve
converted into
capital (or
capital stock)
2. Surplus
reserve
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converted into
capital (or
capital stock)
3. Surplus
reserves
making up for
losses
4. Changes of
defined benefit
plans carried
forward to
retained
earnings
5. Other
comprehensive
income carried
forward to
retained
earnings
6. Others
(V) Special
reserve
1. Withdrawn
in current
period
2. Used in
current period
(VI) Others
5,08
IV. Closing 949,0 401,75 -15,15 474,51
9,93 6,900,06
balance of 24,05 4,349. 7,634. 6,412.
2,09 9,275.67
current period 0.00 66 16 50
7.67
Amount of the previous period
In RMB
Semi-annual 2019
Other equity Other
Capi Capit Less: Surpl
instruments compr Undistr Total
Item tal al treasu Special us
ehensi ibuted Others owners’
stoc Pref Perp Othe reserv ry reserve reserv
ve profits equity
k erre etual rs e stock e
incom
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d bon e
shar ds
es
949,
I. Closing 401,6 3,456, 474,5 4,160,5
024, 5,982,31
balance of 44,81 989.0 16,41 87,339.
050. 5,631.44
last year 8.41 0 2.50 53
00
Plus:
Changes in
accounting
policies
Correction of
errors of the
previous
period
Others
949,
II. Opening 401,6 3,456, 474,5 4,160,5
024, 5,982,31
balance of 44,81 989.0 16,41 87,339.
050. 5,631.44
this year 8.41 0 2.50 53
00
III. Change in
-3,456
current period 109,5 -95,744 -92,178,1
,989.0
(“-” for 31.25 ,646.41 26.16
0
decrease)
(I) Total 663,47
663,474,
comprehensiv 4,593.5
593.59
e income 9
(II) Capital
-3,456
invested and 109,5 3,566,52
,989.0
decreased by 31.25 0.25
0
the owners
1. Common
shares
invested by
the owners
2. Capital
invested by
holders of
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other equity
instruments
3. Amount of
share-based
-3,456
payments 109,5 3,566,52
,989.0
recognized in 31.25 0.25
0
owners’
equity
4. Others
-759,21
(III) Profit -759,219,
9,240.0
distribution 240.00
0
1.
Withdrawal
of surplus
reserve
2.
-759,21
Distribution -759,219,
9,240.0
to owners (or 240.00
0
shareholders)
3. Others
(IV) Internal
carry-forward
of owners’
equity
1. Capital
reserve
converted
into capital
(or capital
stock)
2. Surplus
reserve
converted
into capital
(or capital
stock)
3. Surplus
reserves
making up
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for losses
4. Changes of
defined
benefit plans
carried
forward to
retained
earnings
5. Other
comprehensiv
e income
carried
forward to
retained
earnings
6. Others
(V) Special
reserve
1. Withdrawn
in current
period
2. Used in
current period
(VI) Others
949,
IV. Closing 401,7 474,5 4,064,8
024, 5,890,13
balance of 54,34 16,41 42,693.
050. 7,505.28
current period 9.66 2.50 12
00
III. Basic Information of the Company
Hangzhou Robam Appliances Co., Ltd. (hereinafter referred to as ROBAM or the Company) is an incorporated company
established by overall changing Hangzhou Robam Home Appliances Co., Ltd. on November 7, 2000. Approved by China Securities
Regulatory Commission (ZJXK [2010] No.1512) in 2010, the Company for the first time offered 40 million ordinary shares in RMB
to the public on November 23, 2010 (stock code: 002508), with the par value per share of RMB 1 and the issue price per share of
RMB 24.00.
As of June 30, 2020, the total capital stocks of the Company reached RMB 949,024,050 after several equity changes. The
unified social credit code of the Company is 91330000725252053F; the legal representative is Ren Jianhua; and the address is
No.592, Linping Avenue, Yuhang Economic Development Zone, Yuhang District, Hangzhou.
The Company is a manufacturing company, with major businesses covering research & development, production, sales and
comprehensive services of kitchen appliances. Its main products include range hoods, gas stoves, disinfection cabinets, steam ovens,
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baking ovens, dishwashers, water purifiers, microwave ovens, integrated stoves, and purification tanks.
Its business mainly covers the manufacturing, processing and sales of range hoods, gas stoves, disinfection cabinets, baking
ovens, steam ovens, microwave ovens, dishwashers, water purifiers, multi-purpose tanks, kitchen supplies and other kitchen
appliances, as well as import and export business and technical service for household appliances. (For business subject to approval
according to law, relevant operating activities may not be carried out until they are approved by relevant authorities).
The consolidated financial statements of the Company cover 6 companies, including Beijing ROBAM Appliances Sales Co.,
Ltd., Shanghai ROBAM Appliances Sales Co., Ltd., Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances
Trading (Shanghai) Co., Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd., and Hangzhou ROBAM Fuchuang
Investment Management Co., Ltd.
For details, see relevant contents in the section of “Interests in Other Entities” herein.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going concern basis, and in light of the Company’s
actual transactions and events, in accordance with the Accounting Standards for Business Enterprises promulgated by
the Ministry of Finance of China and relevant provisions, as well as the accounting policies and estimates stated in the
section of “Significant Accounting Policies and Estimates” herein.
2. Going concern
After taking into account of factors such as macro policy risks, market management risks, and the current and
long-term profitability, solvency, and financial flexibility of the Company, as well as the intention of the management to
change the operation policies, the management of the Company believes that there are no matters affecting the
Company’s going concern within 12 months from the end of the reporting period onwards.
V. Significant Accounting Policies and Estimates
The specific accounting policies and estimates prepared by the Company according to its actual production and
operation include the operating cycle, the recognition and measurement of receivables and bad debts, measurement of
inventory delivered, fixed assets classification as well as depreciation methods, invisible asset amortization, conditions
for the capitalization of R&D expenses, and revenue recognition and measurement.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of the Accounting Standards for
Business Enterprises, and truthfully and completely reflect the financial status, business results, cash flow and other
relevant information of the Company.
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2. Accounting period
The Company’s accounting period is divided into annual and interim periods. An interim period refers to a
reporting period shorter than a full accounting year. The accounting year of the Company starts on January 1 and ends
on December 31 on the Gregorian calendar.
3. Operating cycle
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian calendar.
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Accounting approaches to business combinations under or not under common control
The assets and liabilities acquired by the Company as the combining party in a business combination under
common control shall be measured at the book value of the combined party in the final controller’s consolidated
statements on the combination date. The capital reserve shall be adjusted against the difference between the book value
of the net assets acquired by the combining party and the book value of the combination consideration paid by it. If the
capital reserve is insufficient to offset the difference, the retained earnings shall be adjusted.
The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a business combination
not under common control shall be measured at fair value on the acquisition date. The combination cost is the sum of
the fair values of cash or non-cash assets paid, liabilities issued or undertaken, equity securities issued, among others,
by the Company for the purpose of taking control over the acquiree on the acquisition date and all directly related
expenses incurred during the business combination (in case of business combination accomplished through multiple
transactions step by step, the combination cost is the sum of the cost of every single transaction). If the combination
cost is greater than the fair value share of the acquiree’s identifiable net assets acquired from the acquiree in the
combination, the case is recognized as goodwill. Where the combination cost is less than the fair value share of the
identifiable net assets acquired from the acquiree, the fair values of the identifiable assets, debts and contingent
liabilities acquired in the combination and those of non-cash assets subject to combination consideration or issued
equity securities shall be rechecked first, and then in case the combination cost is less than the fair value shares of the
identifiable net assets acquired from the acquiree, the difference shall be included in the non-operating income in the
period of the combination.
6. Methods of preparing consolidated financial statements
All subsidiaries under the control of the Company are included into the consolidated financial statements.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting
period of the Company when preparing the consolidated financial statements, where the accounting policies and
accounting periods are inconsistent between the Company and its subsidiaries.
All major internal transactions, inter-company balances, and unrealized profits with the scope of consolidation
shall be offset when preparing consolidated financial statements. The portion of owner’s equity of subsidiaries not held
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by the parent company and net current profit & loss, other comprehensive incomes and the portion of total
comprehensive incomes belonging to minority equity are presented under “minority equity, minority interest income,
other comprehensive incomes belonging to minority shareholders and total comprehensive incomes belonging to
minority shareholders, respectively”.
For a subsidiary acquired from business combinations under the same control, its operating results and cash flows
are included into the consolidated financial statements since the beginning of the consolidation year. When the
comparable consolidated financial statements are being prepared, relevant items in the financial statements of the last
year are adjusted with the stated party formed after merging deemed to exist from the time of the ultimate controlling
party starting to control.
For a subsidiary acquired through business combinations not under the same control, its operating results and cash
flows shall be included into the consolidated financial statement since the date when the Company obtains control.
When preparing the consolidated financial statements, the subsidiary's financial statements shall be adjusted on basis of
the fair value of all identifiable assets, liabilities and contingent liabilities ascertained on the purchasing date.
For equity interests in an investee not under common control realized by two or more transactions, which finally
bring about the business combination, equity interests in the investee before the acquisition date shall be re-measured at
fair value on the acquisition date and the balance between the fair value and the book value shall be included in the
investment gains for the current period when preparing the consolidated statements. If the related acquiree's equity held
before the acquiring date contains other comprehensive income and the other changes of owner's equity except for net
profits and losses, other comprehensive income and profit distributions, it shall be transferred to investment gains or
losses on the date of acquisition, excluding the other comprehensive income derived from changes of net liabilities or
net assets due to re-measurement on defined benefit plan by the investee.
Without losing any control right, the Company has partially disposed the long-term equity investment in the
subsidiary. In the consolidated financial statement, according to the difference between the disposal prices of part of the
equity investment in the subsidiary and net assets of the subsidiary attributed to the Company as a result of disposal of
long-term equity investment continuously calculated from the purchase date or consolidation date in the subsidiary,
capital premium or stock premium is adjusted, where the capital surplus is not sufficient to be offset, they are adjusted
to the retained earnings.
Where the Company loses the controlling right of the invested party for such reason as disposing partial equity
investment, the remaining equity is re-measured as per the fair value of such equity on the day of losing controlling
right when preparing the consolidated financial statements. The balance from the sum of the consideration obtained
upon the disposal of equity and the fair value of the remaining equity less the appropriable share of the net asset of the
former subsidiaries calculated as per the former shareholding proportion from the purchase day or merging day is
included in the investment income for the period when the right of control is lost and the goodwill is deducted. Other
comprehensive incomes related to former equity investment in subsidiaries shall be recognized as current investment
profits & losses upon losing controls.
7. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Company includes the joint venture.
The Company, serving as one part of the joint venture, shall, in accordance with the provisions of the Accounting
Standards for Business Enterprises No. 2 – Long-term Equity Investments, conduct accounting treatment of the
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investment of the joint venture.
8. Recognition standard of cash and cash equivalents
Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that are
available for payment at any time. Cash equivalents presented in the cash flow statement refer to short-term
investments (no more than three months) with high liquidity and that are readily convertible to known
amounts of cash and subject to an insignificant risk of changes in value.
9. Foreign currency business and conversion of foreign currency statement
1 Foreign currency transactions
The Company translates the foreign-currency amount of the foreign-currency transactions into RMB amount
based on spot exchange rate applicable on the transaction date. On the balance sheet date, the monetary items in
foreign currencies shall be converted at the spot rate on the said balance sheet date. The conversion differences
arising therefrom, except the exchange balance arising from the foreign currency borrowings special for acquisition
or production of qualifying assets which shall be processed according to the capitalization principle, shall be
directly included in the current profit or loss. The foreign currency non-monetary items measured at fair value shall
be converted according to the spot rate of the date when the fair value is confirmed. If the difference between the
converted amount of booking base currency and the original amount of booking base currency belongs to the
salable financial asset, such difference shall be included in the capital reserve. If such difference belongs to the
foreign currency non-monetary item which is measured at fair value and whose change is included in the profits
and losses of the current period, it shall be included into current profits and losses. The foreign currency
non-monetary items measured by historical cost shall be still translated according to the spot rate on the transaction
date, while RMB amount remains unchanged.
2 Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of the foreign operations are translated into RMB using the
spot exchange rate at the balance sheet date, while the shareholders’ equity items, except for the "undistributed
profit items", are translated into RMB using the spot exchange rate at the date of transaction. The income and
expense items in the income statements of overseas operations are translated at the exchange rate approximate to
the spot rate at the date of transaction. The difference arisen from the above translation's are presented separately
under other comprehensive income. For monetary items denominated in foreign currencies that materially
constitute overseas net investment in overseas operations, exchange differences arising from changes in exchange
rates, when preparing the consolidated financial statements, are also separately presented under the Shareholders’
equity as foreign currency translation differences. In case of disposal of an overseas operation, foreign currency
translation differences relating to the overseas operation are proportionately transferred to profits or losses of the
period when the disposal was transacted. During the disposal of overseas operation, other comprehensive incomes
related to the overseas operation are transferred in proportion into the disposal of current profits and losses.
The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted using the
exchange rate approximate to the spot rate of the transaction date of the cash flow. The effect of exchange rate
changes on cash is presented separately in the cash flow statement.
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10. Financial instruments
The Company shall recognize a financial asset or a financial liability when it becomes a party to a financial
instrument contract.
Financial asset
The Company translates the foreign-currency amount of the foreign-currency transactions into RMB
amount
using spot exchange rate applicable at the transaction date.
Based on the business model for management of financial assets and the contractual cash flow characteristics
of financial assets, the Company classifies the financial assets into three types: 1) the financial asset measured at
amortized cost,; 2) the financial asset measured at the fair value with its changes included into other comprehensive
incomes; and 3) and the financial asset measured at the fair value with its changes included into current profits or
losses.
The financial assets meeting all of the following conditions can be classified as those measured at amortized
cost by the Company: ① the Company adopts the business management mode of financial assets for the purpose
of collecting contractual cash flow. ② In accordance with the contract terms of the financial assets, the cash flow
generated at the specific date is only the payment of the principal and the interest on the basis of the outstanding
principal amount. Such financial assets are initially measured at their fair values, with related transaction costs
included into the amount of initial recognition, and subsequent measurement conducted with the amortized cost.
Apart from those designated as hedged items, the difference between the initial amount amortized with the effective
interest method and the amount due, profits or losses incurred upon amortization, impairment, exchange profits and
losses and derecognition shall be included into current profits and losses.
Where the following conditions are reached at the same time, the financial assets can be classified by the
Company as those measured at fair value with the changes included into other comprehensive income: ① the
Company adopts the business management mode of the financial assets for the purpose of collecting contractual
cash flow and selling the financial assets. ② In accordance with the contract terms of the financial assets, the cash
flow generated at the specific date is only the payment of the principal and the interest on the basis of the
outstanding principal amount. Such financial assets are initially measured at their fair values, with related
transaction costs included into the amount of initial recognition. Apart from those designated as the hedged items,
profits or losses incurred by such financial assets shall be included into the comprehensive incomes, except for
credit impairment losses or gains, exchange profits and losses and the interests calculated as per the actual interest
rate for such financial assets. Upon derecognition of the financial assets, the accumulated gains or losses previously
recorded in other comprehensive incomes shall be transferred out of such other comprehensive incomes and
included into the current profits and losses.
The interest income is recognized by the Company using the effective interest method. The interest income is
determined by multiplying the book balance of financial assets by the effective interest rate, except for conditions
below: ① For the financial assets purchased by or originating from the Company with credit impairment, since
initial confirmation, the interest income shall be determined as per the amortized cost of the financial asset and the
effect interest rate subject to credit adjustment. ② The financial assets purchased by or originating from the
Company with no credit impairment but having credit impairment during the follow-up period shall be subject to
interest income calculation based on the amortized cost and actual interest rate of the financial assets during the
follow-up period by the Company.
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The non-trading equity instrument is designated by the Company as the financial asset which is measured at
its fair value with changes included into current profits and losses. The designation shall not be canceled once it is
made. The non-trading equity instrument investment, designed by the Company to be measured at the fair value
with their changes included into other comprehensive incomes, is initially measured at fair value, with related
transaction cost included into the amount of initial confirmation. Except that the obtained dividends (except those
of the recovered investment cost) are included into current profits and losses, other related profits and losses
(including exchange profits and losses) are completely included into the other comprehensive incomes and will not
be converted into current profits and losses subsequently. Upon derecognition, the accumulated gains or losses
previously included into other comprehensive incomes are transferred from other comprehensive incomes and
included into retained earnings.
Except for the financial assets classified to be measured by the amortized cost and those measured at fair
value through other comprehensive income, other financial assets are classified by the Company as those measured
at fair value through current profits and losses. Such financial assets are initially measured at their fair values, with
related transaction costs directly included into the current profits and losses. Profits or losses of such financial
assets shall be included in the current profits and losses.
The financial asset formed by the contingent consideration confirmed during business combination not under
the same control are classified as those measured by its fair value by the Company, with changes included into
current profits and losses.
Recognition basis and measurement method for transfer of financial assets
Financial assets meeting one of the following conditions shall be derecognized by the Company: ① the
contractual right to collect the cash flow of the financial asset is terminated; ② The financial assets have been
transferred by the Company, and almost all risks and returns associated with the ownership of the financial asset are
transferred. ③ The financial assets have been transferred, and the Company had neither transferred nor retained
almost all risks and rewards in the ownership of the financial assets, but given up the control over the financial
assets.
For financial asset that is entirely transferred and meets the conditions of de-recognition, the difference
between the book value of financial asset transferred and the sum of consideration received from such transfer and
the accumulated changes in fair value, directly included into other comprehensive income and corresponding to the
derecognized amount (in accordance with the contract terms of the financial assets involved in such transfer, the
cash flow generated at the specific date is only the payment of the principal and the interest on the basis of the
outstanding principal amount), is included into the current profits and losses.
For financial asset that is partially transferred and meets the conditions of derecognition, the overall book
value of transferred financial asset is split according to their relative fair value between the part derecognized and
the part not derecognized, and the difference between the following two amounts is recognized in current profits
and losses: the sum of consideration received due to transfer and the amount amortized to the derecognized part and
corresponding to the accumulative change of fair value which is firstly included into the other comprehensive
income (in accordance with the contract terms of the financial assets, the cash flow generated at the specific date is
only the payment of the principal and the interest on the basis of the outstanding principal amount), and the overall
book value of aforesaid financial assets.
Financial liabilities
Classification, recognition and measurement of financial liability
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The Company’s financial liabilities are grouped, upon initial recognition, into financial liabilities measured at
fair value, with the changes included in the current profit or loss and other financial liabilities.
Financial liabilities measured at fair value with changes included in the current profits and losses include
trading financial liabilities and financial liabilities designated to be measured as at fair value with changes included
in the current profits and losses upon initial recognition. The net gain or loss arising from changes in fair value,
dividends and interest paid related to such financial liabilities are recorded in profits and losses for the period in
which they are incurred.
Other financial liabilities are measured subsequently at the amortized cost by adopting the effective interest
method. Apart from the following items, the Company will classify the financial liabilities as those measured at
amortized cost: ① the financial liabilities measured at fair value with changes included into current profits and
losses include financial liabilities held for trading (including derivatives that are financial liabilities) and financial
liabilities designated to be measured at fair value with changes included into current profits and losses. ② The
financial liabilities formed by transferring of the financial assets failed to meet the conditions for derecognition or
formed by continuous involvement of transferred financial assets. ③ The financial guarantee contracts that do not
fall under above ① and ② as well as loan commitments at a rate below the market rate of interest that do not fall
under above ①.
Where a contingent consideration is recognized by the Company as a financial liability in business
combination not under common control, such financial liability shall be measured at fair value with changes
included into the current profits and losses during accounting treatment.
Derecognition of financial liabilities
When the current obligation of the financial liabilities has been relieved in whole or part, the part of the
financial liabilities or obligations that have been relieved upon confirmation is terminated. If the Company reaches
an agreement with the creditor to replace the existing financial liabilities by undertaking new financial liabilities
and the contract terms of the existing and new liabilities are different in substance, the existing financial liabilities
shall be derecognized while the new liabilities shall be recognized. Where all or part of the contract terms of the
existing financial liabilities are subject to material modification, the Company shall derecognize all or part of the
existing financial liabilities while recognizing the financial liabilities with modified terms as new financial
liabilities. The difference between the book value of the terminated part upon confirmation and the considerations
paid is included in the current profit and loss.
Method for determining the fair value of financial assets and financial liabilities
The Company measures the fair value of financial assets and financial liabilities in the main market. If there is
no major market, the Company measures the fair value of financial assets and financial liabilities with most
beneficial price for the market and adopts evaluation techniques with much available data and other information
support that is applicable at that time. Input data for determining fair values has three levels. The first level is the
unadjusted price available for the same asset or liability on the date of evaluation in an active market. The second
level inputs are directly or indirectly observable inputs of relevant assets or liabilities apart from inputs of the first
level. The inputs of the third level are unobservable inputs of relevant assets or liabilities. The Company gives
priority of using the first-level inputs and takes the third-level inputs as the last. The lowest layer that has
significant impact on the overall fair value evaluation determines which level this fair value evaluation result shall
belong to.
Investments in equity instruments of the Company are measured at fair value. However, under certain
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circumstances, if recent information needed to determine the fair value is insufficient, or if the estimated amount of
the fair value features an extensive distribution scope and the cost represents the best estimate of the fair value in
that distribution scope, the cost may represent the appropriate estimate on the fair value within that distribution
scope.
Offsetting financial assets and financial liabilities
Financial assets and liabilities of the Company are presented separately in the balance sheet without offsetting.
However, the net amount resulting from the offsetting between financial assets and financial liabilities shall be
presented in the balance sheet only if all of the following criteria are met: (1) The Company has the statutory right
to set off recognized amounts which is currently enforceable; (2) The Company intends either to settle on a net
basis, or to realize the financial assets and pay off the financial liabilities simultaneously.
Distinction and relevant treatment methods of financial liabilities and equity instruments
The Company distinguishes between financial liabilities and equity instruments according to the following
principles: (1) Where the Company cannot unconditionally avoid fulfilling certain contractual obligation by
delivering cash or other financial assets, then such contractual obligation is in line with the definition of the
financial liability. Although certain financial instruments do not expressly contain terms and conditions for the
contractual obligation to deliver cash or other financial instruments, the contractual obligation may be indirectly
formed according to other terms and conditions. (2) Where a financial instrument must or is able to be settled by
the Company’s own equity instrument, the Company shall consider whether the Company’s own equity instrument
as the settlement instrument is a substitute of cash or other financial assets, or the residual interest in the assets of
an entity after deducting all of its liabilities. If it is the former case, the instrument is the issuer’s financial liability.
If it is the latter case, the instrument shall be the equity instrument of the issuer. Under some circumstances, the
contract of a financial instrument may require that the financial instrument must or is able to be settled by the
Company’s own equity instrument. The amount of contractual right or contractual obligation equals to the amount
of its own equity instrument receivable or payable multiplied by its fair value at the time of settlement. Whether the
amount of such contractual right or obligation is fixed, or varies, wholly or partially, based on variables other than
the market value of the Company’s own equity instrument (such as interest rates, the price of a commodity or the
price of a financial instrument), such contract is classified as financial liability.
In classifying financial instruments (or components) in the consolidated statements, the Company shall take
into account all the terms and conditions agreed between members of the Company and holders of the financial
instruments. If the Company, as a whole, undertakes the obligation to deliver cash, other financial assets or settle in
other ways that cause the financial instrument to become a financial liability, the instrument shall be classified as a
financial liability.
If a financial instrument or any of its components is a financial liability, the relevant interests, dividends,
gains or losses, and gains or losses from redemption or re-financing and so on are included in the current profits &
losses of the Company.
If a financial instrument or its component belongs to an equity instrument, for its issue (including
re-financing), repurchase, sale or cancellation, the Company will treat it as a change in equity and will not
recognize the change in fair value of equity instruments.
Impairment of financial instruments
The Company, based on expected credit losses, performed impairment accounting and recognized credit
impairment losses on financial assets measured at amortized cost, financial assets classified to be measured at the fair
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value with the changes included into other comprehensive incomes as well as financial guarantee contracts.
The expected credit loss is a weighted average of credit losses on financial instruments weighted at the risk of
default. Credit loss refers to the difference between all contractual cash flows discounted as per the original effective
interest rate and receivable from the contract and all cash flows expected to be received by the Company, namely, the
present value of a shortage of cash. Among them, financial assets purchased or underlying with credit impairment of the
Company shall be discounted at the financial assets’ effective interest rate after credit adjustment.
For account receivables arising from transactions scoped in ASBE on Revenue not containing significant financing
components, the Company takes the simplified measurement method to measure its loss provisions based on the amount
of expected credit losses during the entire duration.
For financial assets purchased or underlying with credit impairment, the cumulative change in expected credit loss
during the entire duration since the date of balance sheet date after initial recognition will be recognized as provision for
loss. On each date of balance sheet, the amount of change in expected credit loss during the entire duration is included
into current profits and losses as impairment losses or gains. Even if the expected credit loss within the entire duration
determined on the date of balance sheet is less than the amount of expected credit loss reflected by estimated cash flow
upon initial recognition, any favorable change in expected credit loss will be recognized as impairment gains.
In addition to other financial assets adopting the aforesaid simplified measurement method or financial assets
purchased or underlying with credit impairment, the Company shall assess whether the credit risk of relevant financial
instruments has increased significantly since the initial recognition on each balance sheet date, and shall respectively
accrue their provision for loss and recognize the expected credit loss and its change:
In the event that the credit risk has not increased significantly since the initial recognition and it is in Stage I, the
Company shall measure its loss provisions based on the amount of expected credit losses for the coming 12 months of
such financial instrument and calculate the interest on the basis of book balance and effective interest rate.
In the event that the credit risk of the financial instrument has increased significantly since the initial recognition
but with no credit impairment and it is in Stage II, the Company shall measure its loss provisions based on the amount
of the expected credit loss of the financial instrument during the entire duration and calculate the interest on the basis
of book balance and effective interest rate.
In case that credit impairment of the financial instrument has incurred since the initial recognition and it is in
Stage III, the Company shall measure the loss provisions of the financial instrument based on the amount of expected
credit losses during the entire duration, and calculate the interest at amortized cost and effective interest rate.
Increases or reversals of the provisions for credit losses of the financial instrument are recorded in the current
profits and losses as impairment losses or gains. Except for financial assets classified to be measured at fair value
through other comprehensive income, the book balance of financial assets is deducted with provision for credit losses.
For financial assets classified to be measured at fair value, with the change included in other comprehensive incomes,
the Company shall recognize the provision for credit loss in other comprehensive incomes, and shall not decrease the
book value of such financial assets listed in the balance sheet.
Where the Company has measured the provisions for losses based on the amount of the expected credit loss over
the entire duration of such financial instruments in the prior accounting period, but on the current balance sheet date,
such financial instruments no longer fall into the scope of significantly increased credit risk since initial recognition, the
Company measures the provisions for the losses of such financial instruments based on the amount equivalent to the
expected credit losses over the coming 12 months on the current balance sheet date, with resulting carrybacks of
provisions for losses recorded in the current profits and losses as impairment gains.
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① Significant increase in credit risk
The Company determines if there is a significant increase in credit risk of financial instruments since initial
recognition by comparing the risks of default of financial instruments on the balance sheet date and the date of initial
recognition based on reasonable and well-grounded forward-looking information available. For the financial guarantee
contract, when the Company applies the regulations on impairment of financial instruments, the date when the
Company becomes the party which makes the irrevocable undertaking is regarded as the date of initial recognition. The
Company will take into account the following factors when it assesses whether the credit risk is significantly increased:
the operating results of the debtor have actually changed or are expected to significantly change or not; whether the
regulatory, economic or technical environment where the debtor is located has significantly and adversely changed or
not; whether the value of the collateral as the debt pledge or the guarantee provided by the third party or credit
enhancement quality has significantly changed or not, as these changes are expected to reduce the economic motives of
the debtor to make repayments within the time limits prescribed in the Contract or to impact the default probability;
whether the expected performance or repayment behavior of the debtor has significantly changed or not; whether the
Company has changed its management method for financial instrument credit or not, etc.
On the balance sheet date, if the Company determines that the financial instrument only carries low credit risks,
then the Company will assume that the credit risks of the financial instrument have not increased significantly since the
initial recognition. If the risk of default on financial instruments is low, the borrower is highly capable of performing its
contractual cash flow obligations in the short term, and even if the economic situation and operating environment are
adversely changed over a long period of time but not necessarily reducing the borrower’s performance of its contractual
cash obligations, then the financial instrument is considered as having a lower credit risk.
② Credit-impaired financial assets
In case of one or more events adversely affecting the estimated future cash flows of a financial asset, the financial
asset becomes a financial asset to which a credit impairment has happened. Evidence of a credit impairment on a
financial asset includes the following information: serious financial difficulties of the debtor; a breach of contract by the
debtor, such as a default or overdue payment of interest or principle; the creditor, for economic or contractual
considerations relating to financial difficulties of the debtor, offers the debtor concessions that are impossible in any
other circumstances; it is probable that the debtor will enter bankruptcy or other financial restructuring; the
disappearance of an active market for that financial asset due to financial difficulties of the issuer or the debtor; the
purchase or origination of a financial asset at a large discount that reflects the incurred credit losses.
The credit impairment of financial assets may be caused by the joint effect of the above multiple events, and may
not be caused by individually identifiable events.
③ Determination of expected credit losses
In assessing the expected credit loss, the Company takes reasonable and well-founded information about past
event, current condition and future economic status predictions into consideration based on the expected credit loss of
single and combined financial evaluation instruments.
The Company divides the financial instruments into different portfolios based on the common credit risk
characteristics. See accounting policies of relevant financial instruments for single evaluation standards and combined
credit risk characteristics.
The Company determines the expected credit losses of financial instruments under the following methods:
For financial assets, the credit loss is calculated as the present value of the difference between the contractual cash
flows to be collected by the Company and cash flows expected to be collected.
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For the financial guarantee contract, the credit loss is the expected payment made to the contract holder by the
Company for reimbursing the contract holder against the credit losses incurred by the contract holder, deducted by the
present value of the differences between the amounts expected to be received by the Company from the contract holder,
debtor or any other party.
For financial assets which have been credit-impaired on the balance sheet date but are not purchased or underlying
with credit impairment, the credit loss is calculated as the difference between the book balance of such financial assets
and present value of anticipated future cash flows discounted at the original effective interest rate.
11. Notes receivable
The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics, divides the
notes receivable into different combinations and determines the accounting estimation policy of expected credit loss.
Combination Basis for determining Provision method
classification combination
Combination of bank The acceptor is a banking The Company believed that there was no significant
acceptance financial institution. credit risk in the bank acceptance held by the
Company and there will be no significant loss due to
the default of the bank.
Combination of trade The acceptor is a non-bank The company shall measure the bad-debt provision of
acceptance financial institution or receivable trade acceptance based on the expected
enterprise like a finance credit loss during the entire duration.
company.
12. Accounts receivable
For the receivables arising from transactions regulated by the Accounting Standards for Business Enterprises No.
14 - Revenue Standards (whether or not containing significant financing components) and the lease receivables
regulated by the Accounting Standards for Business Enterprises No. 21 - Leasing, the Company takes the simplified
measurement method to measure its loss provisions based on the amount of expected credit losses during the entire
duration.
For accounts receivable, the Company assesses whether the credit risk increases significantly on the basis of a
single financial instrument or a combination of financial instruments. The Company singly evaluates the credit risk of
receivables with significantly different credit risks and the following characteristics: receivables in dispute with the
other party or involved in litigation and arbitration; accounts receivable that there are obvious indications showing that
the debtor is likely to be unable to fulfill the repayment obligation. The Company cannot obtain sufficient evidence of
significant increase in credit risk at the level of single financial instrument at reasonable cost, but it is feasible to assess
whether the credit risk increases significantly on the basis of the combination of financial instruments. When the
assessment is performed on the combination of financial instruments, the Company can classify the financial
instruments based on the common credit risk characteristics.
The Company classifies the accounts receivable into the following combinations based on their credit risk
characteristics:
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Combination classification Basis for determining combination Provision method
Credit loss that accrues accounts Accounts receivable with the same aging Expected rates of credit loss
receivable by aging analysis have similar credit risk characteristics
method
Related parties within the Funds of subsidiaries within the No expected credit loss under
consolidation scope consolidation scope of controlling normal circumstances
shareholders
If there is objective evidence showing that the credit impairment of certain account receivable has incurred, the
Company shall singly withdraw the bad debt reserve of accounts receivable and confirm the expected credit loss.
For accounts receivable with credit loss accrued from receivables by aging analysis method, based on the actual
credit loss of previous years and considering the forward-looking information of the current period, the accounting
estimate policies of the Company for measuring the expected credit loss are as follows:
Age Expected rates of credit loss
Within 1 year 5.00%
1-2 years 10.00%
2-3 years 20.00%
3-4 years 50.00%
4-5 years 80.00%
Over 5 years 100.00%
The Company calculates the expected credit loss of receivables on the balance sheet date. If the expected credit
loss is greater than the carrying amount of the current receivables impairment provision, the Company will recognize
the difference as impairment loss of receivables, debit "credit impairment loss" and credit "bad debt provision".
Otherwise, the Company will recognize the difference as impairment gains and make opposite accounting records.
For the actual credit losses of the Company, if the relevant receivables are determined to be unrecoverable and are
approved to be written off, the Company shall debit "bad debt provision" and credit "accounts receivable" according to
the approved write-off amount. If the write-off amount is greater than the accrued loss provisions, the "credit
impairment loss" will be debited according to the difference.
13. Receivables financing
Where the following conditions are reached at the same time, the financial assets can be classified as those
measured at fair value with the changes included into other comprehensive income: the Company adopts the business
management mode of the financial assets for the purpose of collecting contractual cash flow and selling the financial
assets. As stipulated in contract terms of the financial assets, the cash flows generated on special dates are solely the
payments to principals and interests on the principal amount outstanding.
The Company transfers the accounts receivable held in the form of discount or endorsement, and such business is
more frequent and involves a large amount of money. Its business management model, in essence, is to collect and sell
contract cash flow. According to the relevant provisions of financial instrument standards, the accounts receivable is
classified into financial assets with changes measured at fair value and included in other comprehensive income.
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14. Other receivables
The Company divides the process of credit impairment of other receivables into three stages and adopts different
accounting treatment methods for the impairment of other receivables in different stages:
Credit risk has not increased significantly since initial recognition (Stage I)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected
credit loss in the next 12 months. The Company classifies other receivables based on aging as a credit risk characteristic
and measure them on the basis of combination, which is equivalent to the expected credit loss in the next 12 months.
Credit risk has increased significantly since initial recognition but has not been impaired (Stage II)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the expected
credit loss during the entire duration.
Credit impairment after initial recognition (Stage III)
For the financial instruments in this stage, the Company shall measure the loss provisions based on the
expected credit loss during the entire duration.
15. Inventories
Inventories of the Company mainly include low-value consumables, raw materials, goods in-process, merchandise
inventory and goods shipped in transit.
The inventories are managed based on perpetual inventory system, and valued at actual cost on acquisition. Actual
cost is calculated using weighted average method when the inventories are issued or consumed. Low-value
consumables and packaging materials are amortized using one-off amortization method.
At the end of accounting period, inventory is valuated at cost or net realizable value, whichever is lower; provision
for inventory depreciation reserves is made for the part of the cost uncollectible of inventory due to damage, fully or
partially out of date or selling price lower than the cost, etc. Inventory revaluation reserves of merchandise inventories
and raw materials are generally accrued as the excess of the higher cost of individual inventory over its net realizable
value. For raw and auxiliary materials of larger amount and lower unit price, inventory revaluation reserves shall be
accrued based on the category.
Net realizable values of stock goods, work in progress, or held-for-sale materials are determined by their estimated
selling price deducted by estimated selling expenses and related taxes. Net realizable values for material held for
production are determined by the estimated selling price of finished goods deducted by the estimated cost to completion,
selling expenses and the related taxes.
16. Long-term equity investments
Long-term equity investment of the Company mainly includes the investment to the subsidiaries, associated
enterprises and joint ventures.
The Company follows the basis to judge the joint control: all the participants or group of participants collectively
control the arrangements, and the policies for activities related to such arrangement must be agreed by all such
participants.
Generally, it constitutes significant influence on an investee if the Company controls 20% (inclusive) or more (less
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than 50%) voting shares of the investee directly or indirectly through a subsidiary. Where the Company controls less
than 20% voting shares of the investee directly or indirectly through a subsidiary, significant effects on the investee
shall be judged based on the facts and circumstances in the case that appoint representative to the board of directors or
similar organ of power under the investee, participate the development of financial and operating policies of the
investee, conduct important trading with the investee, dispatch management personnel to the investee, or provide key
technical data to the investee.
The one forming control over the investee is the subsidiary of the Company. For the long-term equity investment
acquired through business combination under the same control, the share of the combined party in the book value of net
assets presented in consolidated financial statements of ultimate controlling party acquired at the date of combination is
recognized as initial investment cost of long-term equity investment. The book value of net assets for the combined
party is negative on the combining date, and the long-term equity investment cost is determined as zero.
In case that equity of the investee under the same control is obtained through multiple deals step by step to finally
form business combination, for package deals, the Company shall account each deal as a deal to obtain the control. If it
is not a package deal, the share of the book value of combined party's net assets presented in consolidated financial
statements of ultimate controlling party acquired at the date of combination is recognized as initial investment cost of
long-term equity investment. The difference between initial investment cost and the sum of the book value of long-term
equity investment before the combination is realized and the book value of consideration additionally paid to further
acquire shares on the date of combination is adjusted against the capital surplus; if the capital surplus is not sufficient to
be offset, the remaining balance is adjusted against retained earnings.
For long-term equity investments acquired through business combinations not under common control, the
combined cost is used as the initial investment cost.
In case that equity of the investee not under the same control is obtained through multiple deals step by step to
finally form business combination, for package deals, the Company shall account each deal as a deal to obtain the
control. If it is not a package deal, initial investment cost accounted using cost method will be the sum of the book value
of original equity investment and new investment cost. For equity held before the date of acquisition and accounted
with equity method, other related comprehensive income using equity method for accounting shall not be adjusted, and
accounting treatment should be applied to these investments on the same basis as those adopted by the investee for
direct disposal of related assets or liabilities. For equity held before the date of acquisition and accounted at fair value in
the available-for-sale financial assets, the accumulated change in fair value which is originally included in other
comprehensive income shall be transferred to the investment profit or loss for the current period on the combining date.
Apart from the long-term equity investments acquired through business combination mentioned above, the
long-term equity investments acquired by cash payment are used as the cost of investment based on the purchase price
actually paid. For long-term equity investments obtained by issuing equity securities, the fair value of the equity
securities issued is recorded as the initial investment cost; for long-term equity investments obtained by exchange of
non-monetary assets, the initial investment cost shall be determined in accordance with relevant provisions in the
Accounting Standards for Business Enterprises No. 7 - Exchange of Non-Monetary Assets; the initial investment cost
shall be determined in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No.
12 - Debt Restructuring by the long-term equity investment of debt restructuring.
Investment in subsidiaries by the Company shall be calculated by cost method, while investment in joint ventures
and associates by the Company shall be calculated by equity method.
For long-term equity investment calculated by cost method, the cost of long-term equity investment shall be
adjusted when the investment is added or recovered. The cash dividends or profits declared to be distributed by the
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investee shall be recognized as the current investment income.
For long-term equity investment calculated by equity method in subsequent measurement, the book value of the
long-term equity investment shall be increased or decreased accordingly with the changes in owner’s equity of the
investee. The shares of the net profits & losses of the investee attributable to the Company shall be recognized based on
the fair value of all identifiable net assets of the investee upon acquisition of the investment in accordance with the
accounting policies and accounting period of the Company, after deducting the parts of the profits & losses arising from
internal transactions between the associates and joint ventures attributable to the Company calculated on the basis of
shareholding ratio and adjusting the net profits of the investee.
When disposing the long-term equity investment, the balance between the book value and the acquired price
actually shall be included in the current profit and loss. As for long-term equity investments calculated by the equity
method, when other changes in owners’ equity other than net gain or loss of the investee are recorded in owners’ equity,
the amount initially recorded in owners’ equity is proportionally transferred into current investment income.
If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong to package
transaction, the Company will conduct accounting treatment for each transaction. In case of package transaction, all
transactions shall be calculated as one transaction of disposing subsidiaries and losing control power for accounting
treatment. However, the difference between disposal cost of each transaction and book value of long-term equity
investment corresponding to equity disposed before losing control power shall be recognized as other comprehensive
income and then shall be transferred into current profits and losses of losing control power upon such loss.
17. Investment real estates
Measurement model of investment real estate - measurement by cost method
Depreciation or amortization methods
Leased houses and buildings are included into the investment real estates of the Company. Measurement is carried
out by cost model.
The investment real estates of the Company are depreciated or amortized by the composite life method. The
estimated service life, net residual value ratio and annual depreciation (amortization) rate of the investment real estate
are as follows:
Type Depreciation period (year) Estimated residual value ratio Annual depreciation rate
(%) (%)
Houses and buildings 20 years 5.00% 4.75%
18. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year, which are held for producing
goods, rendering labor services, lease (exclusive of leased houses and buildings) or operation and management.
Fixed assets are recognized when the economic benefits related thereto are likely to flow into the Company and their
costs can be measured in a reliable manner. Fixed assets include houses and buildings, machine and equipment,
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transportation equipment and other equipment, and the actual cost at the time of acquisition is taken as the entry value.
Among them, the cost of purchased fixed assets includes the purchase price, import duties and other related taxes, as
well as other expenditures that can be directly attributed to the fixed assets before the fixed assets reach the
predetermined serviceable state; the cost of the self-constructed fixed assets consists of necessary expenses incurred
before the constructed assets are ready for the intended use; the fixed assets invested by investors shall be accounted for
at the value agreed in the investment contract or agreement, or at the fair value if the value agreed in the investment
contract or agreement is unfair; the fixed assets rented in by way of financial lease shall be accounted for at the fair
value. For fixed assets obtained by financing lease, the lower of the fair value of rented assets and the present value of
the minimum lease payment on the lease start date shall be recorded as the entry value.
Except for the fixed assets for which depreciation has been calculated in full amount and which are still being used,
the Company will calculate and withdraw the depreciation for all fixed assets. The fixed assets are depreciated by the
composite life method.
Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assets mainly includes
renovation/modification expenditure, repair expenditure, etc. When the relevant economic benefits are likely to flow in
and the costs can be measured in a reliable manner, they shall be included into the cost of fixed assets. For the replaced
part, the book value shall be derecognized. All the other subsequent expenditures are recognized in profit or loss for the
current period in which they are incurred.
The Company will recheck the estimated service life, the estimated net residual value and the depreciation method
of the fixed assets on each balance sheet date. Changes, if any, are regarded as the accounting estimate changes.
A fixed asset is derecognized when it is disposed of or no economic benefit is expected from the use or disposal of the
asset. The amount of proceeds on sale and transfer of a fixed asset as well as disposal of a scrapped or damaged fixed
asset less its carrying amount and related taxes, is recognized in profit and loss for the current period.
(2) Depreciation method
Annual depreciation
Type Depreciation method Depreciation period Residual value rate
rate
Houses and buildings Composite life method 20 years 5.00% 4.75%
Machine and
Composite life method 10 years 5.00% 9.50%
equipment
Transportation
Composite life method 5 years 5.00% 19.00%
equipment
Other equipment Composite life method 5 years 5.00% 19.00%
19. Construction in progress
Construction in progress is measured at its actual cost. The self-operating works is measured according to the
direct material, direct wage, direct construction cost, etc.; the outsourced works is measured according to the project
price payable; the project cost of the equipment installation works is determined according to the value of installed
equipment, installation cost, commissioning cost and other expenditures incurred. The cost of construction in process
shall also include borrowing costs that should be capitalized.
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The fixed assets constructed by the Company shall be transferred into fixed assets at the estimated value based on
project budget, construction cost and actual project cost from the date when fixed assets get ready for intended use and
depreciation of such assets will be accrued in next month. Upon completion of the final accounts formalities, the
original value difference of the fixed assets will be adjusted.
20. Borrowing costs
Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the Company that can be
directly attributable to the acquisition, construction or production of qualifying assets, will be capitalized and incurred
in the relevant asset cost; other borrowing costs are recognized as expenses based on the amount incurred, and included
in the current profit and loss. Qualifying assets are defined as assets that require a substantial amount of time (usually
more than one year) for construction or production activities before the asset is ready for its intended use or sale. These
include fixed assets, intangible assets and inventory.
Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costs related to the
qualifying assets when the asset expenditure has been incurred, the borrowing costs have been incurred, and the
acquisition, construction or production activities necessary to prepare assets for their intended use or sale are in progress.
Where the acquisition, construction or production of a qualifying asset are interrupted abnormally for a period lasting
more than 3 months, the capitalization of borrowing costs shall be suspended. Capitalization of borrowing costs shall
cease once the acquisition, construction or production necessary to prepare the qualifying asset for its intended use or
sale are complete.
Method for calculating the amount of borrowing costs to capitalize: If borrowing funds specifically for acquiring,
constructing or producing qualifying assets, the amount of interest eligible for capitalization by the Company will be the
actual interest costs incurred during the specific borrowing period minus the interest income obtained by depositing or
temporarily investing unspent borrowed funds. Where a general borrowing is used for the acquisition, construction or
production of a qualifying asset, the Company shall calculate and determine its amount of interest to be capitalized by
taking the weighted average of the accumulative asset expenditure minus the asset expenditure of the specific
borrowing, multiplied by the weighted average interest rate of the general borrowing used.
21. Intangible assets
(1) Valuation method, service life and impairment test
The intangible assets of the Company mainly include land use rights, software, trademarks and patents. As for
intangible assets that are purchased, the actual cost is composed of the actual price paid and other relevant expenditures.
For the intangible assets that are invested by investors, the actual cost is determined by the agreed value in the
investment contract or agreement, but if the agreed value is not fair, the fair value will be taken as the actual cost.
Intangible assets are amortized using the composite life method, and the classifications and amortization periods of the
Company’s intangible assets are as follows:
Type Amortization period
Land use right 50 years
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Patent 10 years
Software 3-5 years
Trademark or domain name 10 years
The Company’s land use rights are amortized evenly according to the lease term, starting from the date of transfer.
The Company’s patent rights, non-patented technologies, special software use rights and other intangible assets are
amortized evenly by stages according to whichever period is the shortest: the asset’s estimated useful life, the beneficial
period stipulated in the contract, or the period of legal validity. The amount of amortization is included into the current
profits and losses or included into the relevant asset cost according to the beneficiaries.
At the end of each year, the Company shall review, and adjust in case of changes, the estimated useful lives and
amortization methods used for intangible assets with limited useful lives; in each accounting period, the Company
carries out reviews of the estimated useful life of intangible assets whose useful life is uncertain. Where there is
evidence showing that the useful life of these intangible assets is limited, the Company will estimate the useful life
thereof and amortize these intangible assets during the estimated useful life remaining.
(2) Accounting policies for internal R&D expenditures
The internal R&D expenditures of the Company can be divided into expenditures made at the research stage and
those made at the development stage, depending on the nature of the expenditure and the extent of uncertainty on
whether the R&D activities will finally form intangible assets.
For internally-generated intangible assets, expenditures at the research stage are included in the current profits and
losses when incurred; expenditures at the development stage are recognized as an asset, when the following conditions
are met:
It is technically feasible to complete the intangible assets so that they can be used or sold;
There is an intention to complete and use or sell the intangible assets;
There is a potential market for the products manufactured via the application of the intangible assets, or there is a
potential market for the intangible assets themselves;
There is sufficient support in terms of technological, financial and other resources in order to complete the
development of the intangible assets, and there is the capability to use or sell the intangible asset;
The expenditures made on the intangible assets during the development stage can be measured reliably.
Expenditures made in the development stage that fail to meet the above conditions shall be included in the current
profits and losses when incurred. The development expenditures previously included in the profit and loss statement
will not be recognized as assets in subsequent periods. The expenditures incurred and capitalized at the development
stage are recorded as development expenditures on the balance sheet and will be carried over as the intangible asset on
the date when the project is ready for its intended use.
If the expenditures made at the research and development stages cannot be distinguished, all the R&D
expenditures incurred will be fully included in the current profits and losses. The costs of the intangible assets generated
by internal development activities only include the total expenditures incurred from the time when the capitalization
conditions are met to the point when the intangible assets are used for their intended purposes; for expenditures that are
already recorded as such in the profit and loss statement before the capitalization conditions are met during
development of the same intangible asset, no adjustments will be made.
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22. Impairment of long-term assets
On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures and associates,
including long-term equity investments, fixed assets, projects under construction, and intangible assets with finite useful
lives. If any of the signs listed below are identified, this is an indication that the asset may be impaired and the
Company will conduct an impairment test. Impairment tests are carried out on goodwill and intangible assets with
uncertain useful lives at the end of each period, irrespective of whether there is any indication that the assets may be
impaired. If there is difficulty testing the recoverable amount of a single asset, a test shall be conducted on the asset
group which the asset belongs to, or on a combination of asset groups.
After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference shall be
recognized as an impairment loss. Once such an impairment loss has been confirmed, it shall not be reversed in the
subsequent accounting period. The recoverable amount of an asset is the greater of its fair value less the net value of
asset disposal and present value of expected future cash flow.
The following signs may indicate asset impairment:
Current market price of the asset drops substantially, with the drop in price being notably higher than the expected
drop over time or due to the asset’s normal use;
Significant changes occur in the current period, or are predicted to occur in the near future, with regard to the
economic, technological or legal environment in which the enterprise conducts its business operations, or in the
asset market, and these changes have or will have negative impacts on the enterprise;
The market interest rate or other market investment return rates have risen in the current period, affecting the
enterprise’s discount rate for calculating the asset’s present value of expected future cash flow, and leading to a
substantial decrease in recoverable amounts of the assets;
There is any amount of evidence to prove the asset has been out of date or the physical asset has been damaged;
The asset has been or will be left unused, terminated for use or disposed of ahead of schedule;
There is evidence from the enterprise’s internal reports proving that the economic performance of the asset has
been lower or will be lower than expected. For example, the net cash flow generated by the assets or operating
profits (or losses) realized is much lower (or higher) than the expected amounts;
Other signs indicating that the asset may have been impaired.
23. Long-term deferred expenses
The long-term deferred expenses of the Company refer to the expenses that have been paid, but shall be borne in
the current and future periods with an amortization period of more than one year. Moreover, such expenses shall be
subject to average amortization within the benefit period. If long-term deferred expense items cannot benefit the future
accounting periods, the amortized value of such items yet to be amortized shall be fully transferred into the current
profits and losses.
24. Contract liabilities
Contract liabilities reflect the obligations of the Company to transfer goods to the client for which consideration is
received or receivable from the client. Before the Company transfers goods to the client, and the client has paid the
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consideration in the contract or the Company has obtained the right of unconditionally collecting the consideration, the
contract liabilities are recognized according to the received or receivable amount either at the time of actual payment by
the client or when the payment is due―whichever is earlier.
25. Employee remuneration
(1) Accounting treatment method of short-term remuneration
Employee remuneration of the Company includes short-term remuneration, post-employment benefits, termination
benefits and other long-term benefits.
Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employee welfare, housing
funds, labor union funds, employee education funds, medical insurance premiums, industrial injury insurance premiums,
and maternity insurance premiums. In the accounting period during which the employee has rendered service, the actual
short-term remuneration incurred is recognized as a liability and recorded in the current profits and losses or related
asset costs based on the beneficiary.
(2) Accounting treatment method of post-employment benefits
The post-employment benefits mainly include basic endowment insurance, unemployment insurance, enterprise
and annuity payments, which are classified into defined contribution plans according to the risks and obligations
undertaken by the Company. Moreover, the contributions paid into a separate entity in exchange for the employee’s
services during the accounting periods at the balance sheet date are recognized as a liability, and recorded in current
profits and losses or relevant asset costs based on the beneficiary.
(3) Accounting treatment method of dismissal benefits
Dismissal benefits are required in instances when the Company terminates labor relationships with a certain
employee prior to the maturity of their labor contract. The Company shall recognize the employee remuneration
liabilities incurred from termination benefits and include them into the current profits and losses. This occurs either
when the Company cannot unilaterally withdraw the termination benefits provided by the plan on the termination of the
labor relationship or dismissal proposal, or when the Company recognizes the costs or expenses related to restructuring
the payment of termination benefits―whichever occurs earlier. The compensations paid exceeding one year will be
discounted then included in the current profits or losses.
(4) Accounting treatment method of other long-term employee benefits
Other long-term benefits mainly include long-term incentive plans and long-term benefits. The Company conducts
accounting treatment according to relevant provisions of the defined contribution plans.
25. Provisions
When obligations relating to contingencies such as external guarantee, pending litigation or arbitration, product
quality assurance, layoff plans, loss contracts, restructuring obligations, environmental pollution control, commitments,
and disposal obligation of fixed assets also meet the following conditions, the company recognizes it as a liability: the
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obligation is currently being undertaken by the company; there is a high possibility that the fulfillment of the obligation
will result in the outflow of economic benefits from the enterprise; the amount of the obligation can be reliably
measured.
Provisions are initially measured according to the best estimate of the expenditure required to settle the present
obligation, taking into account factors relating to contingencies such as risks, uncertainties and the time value of money.
Where the time value of money has a significant impact, the best estimate shall be ascertained after discounting the
future relevant cash outflow. The book value of provisions is reviewed at the balance sheet date and adjusted to reflect
the current best estimate if there is any change.
For possible obligations arising from past transactions or events whose existence depends on whether one or more
uncertain future events occur; or for present obligations formed by past transactions or events, where the fulfillment of
the obligation is not likely to cause an outflow of economic benefits from the Company, or the amount of the obligation
cannot be reliably measured, the Company will disclose these possible or present obligations as contingent liabilities.
26. Share-based payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities are incurred based
on equity instruments in order to obtain services provided by the employees or other parties. Share-based payments are
divided into equity-settled and cash-settled share-based payments.
Equity-settled share-based payments made in exchange for the service of employees are measured at the fair value
on the date at which the equity instrument is granted to employees. Where the right may only be exercised if the service
is completed within the waiting period, or if specified performance conditions are met, the fair value shall be included
in relevant costs or expenses using the straight-line method and capital surplus shall be increased accordingly, based on
the best estimate of the number of vested equity instruments within the waiting period.
Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized on the basis of
share options or other equity instruments undertaken by the Company. If excisable immediately after the grant, the fair
value of the liabilities assumed shall be included in the relevant costs or expenses on the grant date, and the liabilities
shall be increased accordingly. If it is necessary to complete the services within the waiting period or meet the specified
performance conditions before the right is excisable, on each balance sheet date of the waiting period, the services
acquired in the current period shall be included in the costs or expenses based on the best estimation of the excisable
right, and the liabilities shall be adjusted accordingly based on the fair values of the liabilities assumed by the Company.
On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fair value of the
liabilities will be re-measured, with any changes recorded in the profits and losses at the current period.
27. Income
Accounting policies used for the recognition and measurement of income
The operating income of the Company is mainly the income generated from the sale of goods.
The Company recognizes the income upon fulfillment of its performance obligations within the contract, that is,
when the client obtains control of the relevant goods or services.
If there are two or more performance obligations in the contract, at the beginning of the contract the Company will
allocate the transaction price to each separate performance obligation according to the relative proportion of the
stand-alone selling price of the goods or services promised by each performance obligation. The income shall be
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measured according to the transaction price allocated to each separate performance obligation.
The transaction price refers to the amount of consideration that the Company expects to collect for transfer of
goods or services to the client, excluding the amount collected by third parties. The transaction price recognized by the
Company shall not exceed the amount of recognized accumulated income, which is not likely to be significantly
reversed once the relevant uncertainty is eliminated. The expected amount to be returned to the client will not be
included into the transaction price as a liability. If there is significant financing in the contract, the Company shall
determine the transaction price according to the amount payable in cash when the client obtains control of the goods or
services. The difference between the transaction price and the contract consideration shall be amortized by the effective
interest method during the contract period. On the contract start date, if the Company estimates that the time between
the client's acquisition of control over goods or services and the payment of the price by the client will not exceed one
year, the significant financing in the contract shall not be considered.
The performance obligations are to be fulfilled within a specified period once the Company meets one of the
following conditions; otherwise, the Company is to fulfill the performance obligations at a specified time point:
The client obtains and consumes the economic benefits while the Company is fulfilling the performance
obligations;
The client can control goods or services still under construction while the Company is still in the process of
fulfilling the performance obligations.
The goods generated while the Company is in the process of performing the contract are indispensable, and the
Company has the right to collect partial payments for the cumulative performance obligations that have been
fulfilled so far within the contract period.
If the performance obligations are performed within the specified period, the Company will recognize the income
within this period in accordance with the progress of the contract’s performance. If the performance progress cannot be
reasonably determined and the costs incurred by the Company are expected to be compensated, the revenue will be
ascertained according to the costs incurred, until the performance progress can be reasonably determined.
If the performance obligations are performed at the specified time point, the Company will recognize the income
at the time when the client obtains control over the relevant goods or services. In judging whether the client has
obtained control over goods or services, the Company shall consider the following signs:
The Company has the current right to collect payment for the goods or services.
The Company has transferred legal ownership of the goods to the client.
The Company has transferred physical possession of the goods to the client.
The Company has transferred the main risks and rewards of ownership of the goods to the client.
The client has accepted the goods or services.
The Company’s income recognition methods:
The agency company method: According to the Sales Commission Contract signed between the Company and the
regional agency company, the Company recognizes the income after receiving the commission sales list or summary of
sales lists from the commission sales company;
E-commerce: After the client places an order, the Company will deliver the goods and collect the payment for
goods. The Company will recognize the income according to the time when the client confirms the receipt and the order
is completed (when the client confirms the receipt on the online platform or automatically confirms the receipt after 7
days); b. The platform is responsible for the delivery and collection of payment, and the Company settles and
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recognizes the income according to the sales list provided by the platform;
TV shopping: The company is informed to deliver goods according to the client's order, and the Company
recognizes the income according to the sales list provided by the TV shopping platform;
Project type: Delivery is executed in accordance with the client's order, and the Company recognizes the income
according to the receipt after the client receives the goods;
Export income from customs declaration: The income is recognized according to the export date of the customs
declaration
28. Government grants
Government grants of the Company include fiscal appropriation. Government grants relating to assets refer to
government grants obtained by the Company for the purpose of purchase, construction of long-term assets or the
purpose of forming the assets in other ways; income-related government grants refer to those other than asset-related
grants. In case the purpose of a grant is not expressly stipulated in the government document, the Company will
categorize the grant according to these above principles. If it is difficult to categorize the grant, it will be categorized as
the income-related government grant.
If a government grant is a monetary asset, it will be measured at the amount received; for the grant appropriated
according to the fixed quota or for the grant where there is concrete evidence showing that the Company is qualified to
receive governmental financial support and will be able to receive the support by the end of the accounting period, the
grant will be measured at the receivable; if the government grant is a non-monetary asset, it will be measured at the fair
value, or measured at its nominal amount (RMB 1) if the fair value cannot be obtained reliably.
If a government grant relating to assets is recognized as deferred income, such grant is recognized in the current
profit or loss based on equal division within the service life of the relevant asset.
If the relevant asset has been sold, transferred, retired or damaged before the end of the service life, the balance of
the relevant deferred income that has not been allocated will be transferred into the current profit and loss of asset
disposal.
Government grants relating to income that compensate future costs, expenses or losses arerecognized as deferred
income, and recognized in profit or loss in reporting the related costs, expenses or losses. The government grants
relating to the ordinary activities are included in other income or deducted against relevant costs and expenses
according to the nature of the accounting event, otherwise, they are included in non-operating income.
If the Company obtains the subsidized loan as a result of preferential financial policy, there will be two situations:
the Ministry of Finance appropriates the interest subsidy to the lending bank, or the Ministry of Finance directly
appropriates the subsidy to the Company, and the accounting treatment for each of these situations is as follows:
(1) Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bank provides the
Company with the loan at a discounted interest rate, the Company will use the actual amount of loan received as the
book value of the loan, and calculate the relevant borrowing costs based on the principal of the loan and the interest
rate.
(2) Where the Ministry of Finance directly appropriate the interest subsidy to the Company, the Company will
deduct the corresponding interest subsidy against the borrowing costs.
Where the governmental grants recognized by the Company need to be returned, the accounting treatment will be
done as follows in the period they are returned:
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1) Where the book value of relevant assets is deducted at the time of the initial recognition, the book value of assets
will be adjusted.
2) Where there is any deferred income concerned, the book balance of the deferred income will be deducted, but the
excessive part will be included in the current profit or loss.
3) For other circumstances, the government grants will be directly included in the current profit or loss.
29. Deferred income tax asset/deferred income tax liability
Deferred income tax asset and deferred tax liability of the Company are calculated and recognized based on the
differences (temporary differences) between the tax base and the carrying amount of an asset or liability. For the
deductible loss and tax credits that can be deducted annually in the subsequent years according to tax laws, the
corresponding deferred income tax assets are recognized. Where the temporary differences arise from the initial
recognition of goodwill, the corresponding deferred income tax liabilities are not recognized. No deferred tax asset or
deferred tax liability is recognized where the temporary differences arising from the initial recognition of assets or
liabilities in a transaction that is not a business combination affect neither accounting profit nor taxable profit (or
deductible loss). On the balance sheet date, the deferred income tax asset and liability are measured at the applicable tax
rates during the period when the asset is realized or the liability is settled as expected.
The Company recognizes the deferred income tax asset to the extent that it is probable that the taxable income will
be available against which the deductible temporary differences, deductible losses and tax credits can be deducted.
30. Lease
A lease that transfers in substance all the risks and rewards incident to ownership of an asset is classified as a
finance lease by the Company. A lease other than financial lease is an operating lease. The leases of the Company are
mainly operating leases.
Lease payments and income under an operating lease are recognized on a straight-line basis over the lease term,
and either included in the cost of the related asset or charged to profit or loss for the period.
31. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
√ Applicable □ Not Applicable
Contents and reasons for accounting policies changes Approval procedure Remarks
The Ministry of Finance issued the revised Chinese Accounting Standards No. 14-
Revenue (CK[2017] No. 22) (hereinafter referred to as CAS 14) on July 5, 2017, requiring
Approved at the 2nd
enterprises listed at home and abroad at the same time and enterprises listed abroad that See Notes
meeting of the 5th
prepare financial statements according to the international financial reporting standards or for details
Board of Directors
CAS to implement CAS 14 as of January 1, 2018, and other enterprises listed at home to
implement CAS 14 as of January 1, 2020.
Note:
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According to the requirement relating to the transition from the old to the new CAS 14, the Company has
implemented the new standards from January 1, 2020. The new standards stipulate that the unearned revenue related to
the performance obligation will be reclassified as the contract liability after the first application of the new CAS 14, and
the comparatives will not be adjusted. See Notes to the Financial Statements or the comparatives presented pursuant to
the CAS 14 at the beginning of the period;
(2) Significant accounting estimate changes
□ Applicable √ Not Applicable
(3) Relevant financial statement items at the beginning of 2020 when the new CAS 14 and the adjustments
stipulated in the new CAS 21-Lease apply for the first time
Applicable
Should the balance sheet items be adjusted at the beginning of the year?
√ Yes □ No
Consolidated Balance Sheet
In RMB
Item December 31, 2019 January 1, 2020 Adjusted figure
Current assets:
Unearned revenue 1,092,261,332.25 0.00 -1,092,261,332.25
Contract liabilities 1,092,261,332.25 1,092,261,332.25
Notes to adjustment
Balance Sheet of the Parent Company
In RMB
Item December 31, 2019 January 1, 2020 Adjusted figure
Unearned revenue 983,128,543.51 -983,128,543.51
Contract liabilities 983,128,543.51 983,128,543.51
VI. Taxation
1. Main tax categories and tax rates
Category Tax base Tax rate
Income from sales of goods 13%
Income from provision of technical
Added-value tax 6%
services
Rental income 5%
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City maintenance and construction tax Turnover tax paid actually 7%
Education surcharge Turnover tax paid actually 3%
Local education surcharge Turnover tax paid actually 2%
70% of the original value of the house 1.2%
House tax
Rental income 12%
Land use tax Total land area RMB 5~10/m2
Corporate income tax Taxable income 15%、25%
2. Preferential tax policy
The Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR201733000884) jointly issued
by Zhejiang Provincial Department of Science and Technology, Zhejiang Provincial Department of Finance, Zhejiang
Provincial Tax Service, State Taxation Administration, and Local Taxation Bureau of Zhejiang Province on November
13, 2017. The certificate is valid for 3 years. According to the relevant provisions, after being identified as a high-tech
enterprise, the Company will enjoy the relevant preferential policies of the state on high-tech enterprises for three
consecutive years (i.e., the Company is entitled to the preferential income tax policy from January 1, 2017 to December
31, 2019), and the income tax shall be levied at the rate of 15%.
According to the Notice on Managing the Application for the Hi-tech Enterprise Certification in 2020 issued by
the Leading Group on Hi-Tech Enterprise Accreditation in Zhejiang Province, the Company will take the application
seriously in 2020; according to the Announcement of the State Taxation Administration on the Implementation of
Preferential Income Tax Policy for Hi-tech Enterprises (Announcement 2017 No. 24 of the State Taxation
Administration), before the recognition, the Company shall pay the income tax at the rate of 15% in 2020, when the
Certificate will expire.
The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd., obtained the Certificate
of High-tech Enterprise (Certificate No.: GR201933002261) jointly issued by Zhejiang Provincial Department of
Science and Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State
Taxation Administration on December 4, 2019. After the recognition, it will enjoy the preferential tax policy of the state
on high-tech enterprises for three consecutive years (i.e., it is entitled to the preferential income tax policy from January
1, 2019 to December 31, 2021), and its income tax shall be levied at the tax rate of 15%.
VII. Notes to items in the consolidated financial statements
1. Cash and cash equivalents
In RMB
Item Ending balance Beginning balance
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Cash in hand 353,643.65 218,775.77
Deposit in bank 4,315,601,855.60 4,029,077,489.73
Other cash and cash equivalents 35,340,844.54 24,825,460.73
Total 4,351,296,343.79 4,054,121,726.23
Note: The other cash and cash equivalents at the end of the accounting period are RMB 35,340,844.54, including
the L/C margin of RMB 33,090,374.38, and the banker’s acceptance margin of RMB 2,250,470.16, the use of which are
both limited.
2. Financial assets held for trading
In RMB
Item Ending balance Beginning balance
Financial assets measured at fair value
925,000,000.00 1,360,000,000.00
through profit or loss
Including: financial products 925,000,000.00 1,360,000,000.00
Total 925,000,000.00 1,360,000,000.00
3. Notes receivable
(1) Classified presentation of notes receivable
In RMB
Item Ending balance Beginning balance
Banker’s acceptance 725,726,566.09 359,876,143.64
Trade acceptance 846,184,704.92 626,817,005.76
Total 1,571,911,271.01 986,693,149.40
In RMB
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type Percent Percent Percenta Percenta
Book Book
age of age of ge of ge of
Amount Amount value Amount Amount value
provisio provisio provisio provisio
n (%) n n (%) n
Including:
Notes receivable
1,616,447,30 100.00 44,536, 1,571,91 1,019,68 32,990,36 986,693,
with a collective 2.76% 100.00% 3.24%
8.11 % 037.10 1,271.01 3,518.12 8.72 149.40
bad debt
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provision
Including:
Banker’s 725,726,566. 725,726, 359,876, 359,876,
44.90% 0.00 0.00% 35.29% 0.00 0.00%
acceptance 09 566.09 143.64 143.64
Trade 890,720,742. 44,536, 846,184, 659,807, 32,990,36 626,817,
55.10% 5.00% 64.71% 5.00%
acceptance 02 037.10 704.92 374.48 8.72 005.76
1,616,447,30 100.00 44,536, 1,571,91 1,019,68 32,990,36 986,693,
Total 2.76% 100.00% 3.24%
8.11 % 037.10 1,271.01 3,518.12 8.72 149.40
Collective bad debt provision:
In RMB
Ending balance
Name
Book balance Bad debt provision Percentage of provision
A group of trade acceptances 890,720,742.02 44,536,037.10 5.00%
Total 890,720,742.02 44,536,037.10 --
(2) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
Amount of change in the current period
Beginning
Type Recovery or Ending balance
balance Provision Write-off Others
reversal
Trade
32,990,368.72 11,545,668.38 0.00 0.00 44,536,037.10
acceptance
Total 32,990,368.72 11,545,668.38 0.00 0.00 44,536,037.10
In RMB
4. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
Ending balance Beginning balance
Bad debt
Book balance Book balance Bad debt provision
provision
Type Book Book
Percent Percent value Percent Percent value
Amoun Amoun Amoun Amoun
age of age of age of age of
t t t t
provisi provisi provisi provisi
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on (%) on on (%) on
Accounts
receivable with 4,216,3 4,216,3 100.00 4,216,3 4,216,3 100.00
0.51% 0.00 0.55% 0.00
individual bad debt 29.97 29.97 % 29.97 29.97 %
provisions
Including:
Accounts
819,17 772,89 768,56
receivable with a 99.49 46,281, 42,930, 725,630,
3,671.6 5.65% 1,855.6 1,756.1 99.45% 5.59%
collective bad debt % 815.98 854.84 901.28
1 3 2
provision
Including:
823,39 772,89 772,77
100.00 50,498, 100.00 47,147, 725,630,
Total 0,001.5 1,855.6 8,086.0
% 145.95 % 184.81 901.28
8 3 9
Individual bad debt provision: for each of the accounts receivable with significant credit risks, their bad debts are provided for
individually.
In RMB
Ending balance
Name Percentage of
Book balance Bad debt provision Reason for provision
provision
Accounts receivable
that are small
Expected to be
respectively whose bad 4,216,329.97 4,216,329.97 100.00%
irrecoverable
debts are provided for
individually
Total 4,216,329.97 4,216,329.97 -- --
Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics,
their bad debts are provided for collectively.
In RMB
Ending balance
Name
Book balance Bad debt provision Percentage of provision
Within 1 year 778,613,188.30 38,930,659.41 5.00%
1-2 years 30,833,566.51 3,083,356.65 10.00%
2-3 years 5,761,492.27 1,152,298.46 20.00%
3-4 years 1,316,179.41 658,089.71 50.00%
4-5 years 959,166.80 767,333.43 80.00%
Over 5 years 1,690,078.32 1,690,078.32 100.00%
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Total 819,173,671.61 46,281,815.98 --
Disclosed based on the age of accounts receivable
In RMB
Age Ending balance
Within 1 year (including 1 year) 778,613,188.30
1-2 years 30,833,566.51
2-3 years 5,761,492.27
More than 3 years 8,181,754.50
3-4 years 1,316,179.41
4-5 years 959,166.80
More than 5 years 5,906,408.29
Total 823,390,001.58
(2) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
Amount of change in the current period
Beginning
Type Recovery or Ending balance
balance Provision Write-off Others
reversal
Bad debt
provision for
47,147,184.81 3,367,587.99 0.00 16,626.85 50,498,145.95
accounts
receivable
Total 47,147,184.81 3,367,587.99 0.00 16,626.85 50,498,145.95
(3) Accounts receivable actually written off in the current period
In RMB
Item Written-off amount
Accounts receivable 16,626.85
(4) Top five debtors with the biggest ending balances of accounts receivable:
In RMB
Ending balance of accounts Proportion in the total ending Ending balance of bad debt
Unit
receivable balance of accounts receivable provision
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Unit 1 119,348,868.75 14.49% 5,967,443.44
Unit 2 99,552,093.92 12.09% 4,977,604.70
Unit 3 25,018,729.83 3.04% 1,250,936.49
Unit 4 19,014,384.28 2.31% 950,719.21
Unit 5 16,460,299.51 2.00% 823,014.98
Total 279,394,376.29 33.93%
5. Accounts receivable financing
In RMB
Item Ending balance Beginning balance
Banker’s acceptance 0.00 408,972,104.07
Total 408,972,104.07
Note: The Company discounts and endorses the banker’s acceptance according to its daily operation and
management needs. Based on the purpose of the acceptance of bill (including for obtaining of contract cash flow and
sale), its management presents the balance of the above acceptance as an item of accounts receivable financing.
6. Advance payments
(1) Advance payments presented by age
In RMB
Ending balance Beginning balance
Age
Amount Percentage (%) Amount Percentage (%)
Within 1 year 81,003,754.36 99.49% 50,109,021.83 99.99%
1-2 years 418,159.49 0.51% 4,528.01 0.01%
2-3 years 0.00 0.00% 0.00 0.00%
Total 81,421,913.85 -- 50,113,549.84 --
(2) Top five payers with the biggest ending balances of advance payments
The advance payments balances of the top five payers by the end of the current period totaled RMB 48,272,364.08,
accounting for 59.29% of the total.
7. Other receivables
In RMB
Item Ending balance Beginning balance
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Dividend receivable 14,295,039.38
Other receivables 62,642,970.58 96,604,409.27
Total 62,642,970.58 110,899,448.65
(1) Classification of dividends receivable
In RMB
Project (or investee) Ending balance Beginning balance
Suzhou Industrial Park Ruican Investment Enterprise
0.00 14,295,039.38
(Limited Partnership)
Total 14,295,039.38
(2) Other receivables
1) Classification of other receivables by nature
In RMB
Initial book balance at the beginning of
Nature of receivable Book balance at the end of the period
the period
Collections by a third party 19,688,144.55 63,604,415.88
Security/guarantee deposits 39,360,440.06 37,167,812.49
Petty cash 10,158,865.54 3,137,976.93
Withholdings 4,507,395.40 2,502,348.12
Others 2,847,681.34 512,898.94
Total 76,562,526.89 106,925,452.36
2) Bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit loss over
Expected credit Expected credit loss over
Bad debt provision the entire duration Total
loss over the next the entire duration (with
(without credit
12 months credit impairment)
impairment)
Balance on January 1,
10,321,043.09 10,321,043.09
2020
Balance on January 1,
—— —— —— ——
2020 in the current
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period
Provision in the current
3,598,513.22 3,598,513.22
period
Balance on June 30,
13,919,556.31 13,919,556.31
2020
Disclosed based on the age of accounts receivable
In RMB
Age Ending balance
Within 1 year (including 1 year) 45,591,840.60
1-2 years 9,333,044.59
2-3 years 3,591,580.66
More than 3 years 18,046,061.04
3-4 years 15,832,946.70
4-5 years 691,219.96
More than 5 years 1,521,894.38
Total 76,562,526.89
3) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
Amount of change in the current period
Beginning
Type Recovery or Ending balance
balance Provision Write-off Others
reversal
Bad debt
provision for
10,321,043.09 3,598,513.22 13,919,556.31
other
receivables
Total 10,321,043.09 3,598,513.22 13,919,556.31
4) Top five debtors with the biggest ending balances of other receivables
In RMB
Proportion in the
total ending
Nature of Ending balance of
Unit Ending balance Age balance of other
receivable bad debt provision
accounts
receivable
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Security/guarantee
Unit 1 14,778,000.00 3-4 years 19.30% 7,389,000.00
deposits
Collections by a
Unit 2 10,028,874.85 Within 1 year 13.10% 501,443.74
third party
Collections by a
Unit 3 3,674,304.44 Within 1 year 4.80% 183,715.22
third party
Security/guarantee
Unit 4 3,000,000.00 1-2 years 3.92% 300,000.00
deposits
Unit 5 Withholdings 2,079,271.91 Within 1 year 2.72% 103,963.60
Total -- 33,560,451.20 -- 43.84% 8,478,122.56
8. Inventory
(1) Classification of inventories
In RMB
Ending balance Beginning balance
Provision for Provision for
obsolete obsolete
inventory or for inventory or for
Item
Book balance impairment of Book value Book balance impairment of Book value
the cost of the cost of
contract contract
performance performance
Raw materials 74,858,348.71 0.00 74,858,348.71 65,865,050.18 0.00 65,865,050.18
Products in
49,896,392.26 0.00 49,896,392.26 48,635,094.61 0.00 48,635,094.61
process
Merchandise
346,108,628.31 9,321,963.35 336,786,664.96 333,027,454.91 9,321,963.35 323,705,491.56
inventory
Goods shipped
791,777,487.97 0.00 791,777,487.97 882,209,547.51 0.00 882,209,547.51
in transit
Low cost
consumables
16,563,851.45 0.00 16,563,851.45 18,761,741.34 0.00 18,761,741.34
and packing
materials
1,279,204,708. 1,269,882,745. 1,348,498,888. 1,339,176,925.
Total 9,321,963.35 9,321,963.35
70 35 55 20
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(2) Provision for obsolete inventory or for impairment of the cost of contract performance
In RMB
Increased amount in the current Decreased amount in the current
Beginning period period
Item Ending balance
balance Reversals or
Provision Others Others
write-off
Merchandise
9,321,963.35 9,321,963.35
inventory
Total 9,321,963.35 9,321,963.35
9. Other current assets
In RMB
Item Ending balance Beginning balance
Prepaid tax 1,854,399.98 13,802,530.76
Input tax to be deducted 485,431.78 2,386,707.05
Total 2,339,831.76 16,189,237.81
10. Long-term equity investment
In RMB
Increase/decrease in the current period
Investm
ent Cash Ending
Beginni profit Adjust dividen balance
Ending
ng Additio Negativ or loss ment of Other ds or Provisi of
Investe balance
balance nal e recogni other changes profits on for impair
e Others (book
(book investm investm zed compre in declare impair ment
value)
value) ent ent using hensive equity d and ment provisi
the income distribu on
equity ted
method
I. Joint venture
De
Dietric
h Trade 4,168,3 -2,239, 1,929,1 1,929,1
0.00 0.00 0.00 0.00 0.00 0.00
(Shang 38.79 220.46 18.33 18.33
hai)
Co.,
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Ltd.
Sub-tot 4,168,3 -2,239, 1,929,1 1,929,1
0.00 0.00 0.00 0.00 0.00 0.00
al 38.79 220.46 18.33 18.33
II. Associated companies
4,168,3 -2,239, 1,929,1 1,929,1
Total 0.00 0.00 0.00 0.00 0.00 0.00
38.79 220.46 18.33 18.33
11. Other equity instrument investments
In RMB
Item Ending balance Beginning balance
Suzhou Industrial Park Ruican Investment
100,000,000.00 100,000,000.00
Enterprise (Limited Partnership)
Shanghai MXCHIP Information Technology
2,116,023.22 2,116,023.22
Co., Ltd.
Total 102,116,023.22 102,116,023.22
12. Investment real estate
(1) Investment real estate under the cost measurement mode
√ Applicable □ Not Applicable
In RMB
Item Buildings Total
I. Original book value
1. Beginning balance 189,197.82 189,197.82
2. Increased amount in the current period 0.00
3. Decreased amount in the current period 0.00
4. Ending balance 189,197.82 189,197.82
II Accumulated depreciation and amortization
1. Beginning balance 76,609.48 76,609.48
2. Increased amount in the current period 4,493.40 4,493.40
(1) Accrual or amortization 4,493.40 4,493.40
3. Decreased amount in the current period
4. Ending balance 81,102.88 81,102.88
III. Impairment provision
IV. Book value
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1. Ending book value 108,094.94 108,094.94
2. Beginning book value 112,588.34 112,588.34
13. Fixed assets
In RMB
Item Ending balance Beginning balance
Fixed assets 799,578,416.63 826,234,929.97
Total 799,578,416.63 826,234,929.97
(1) Fixed assets
In RMB
Houses and Machine and Transportation Other
Item Total
buildings equipment equipment equipment
I. Original book value
1. Beginning balance 680,992,814.23 558,412,953.51 19,702,302.79 72,532,134.33 1,331,640,204.86
2. Increased amount in the
585,076.69 19,053,959.69 215,716.81 1,798,349.28 21,653,102.47
current period
(1) Purchase 585,076.69 13,812,471.96 0.00 1,372,546.62 15,770,095.27
(2) Transfer from
0.00 5,241,487.73 215,716.81 425,802.66 5,883,007.20
construction in progress
3. Decreased amount in the
0.00 765,795.60 239,346.00 20,239.05 1,025,380.65
current period
(1) Disposal or
0.00 0.00 239,346.00 20,239.05 259,585.05
retirement
4. Ending balance 681,577,890.92 576,701,117.60 19,678,673.60 74,310,244.56 1,352,267,926.68
II. Accumulated depreciation
1. Beginning balance 209,315,097.57 239,808,508.76 11,262,138.92 45,019,529.64 505,405,274.89
2. Increased amount in the
15,703,959.67 26,369,625.24 1,426,868.64 4,037,412.32 47,537,865.87
current period
(1) Provision 15,703,959.67 26,369,625.24 1,426,868.64 4,037,412.32 47,537,865.87
3. Decreased amount in the
0.00 0.00 237,430.16 16,200.55 253,630.71
current period
(1) Disposal or
0.00 0.00 237,430.16 16,200.55 253,630.71
retirement
4. Ending balance 225,019,057.24 266,178,134.00 12,451,577.40 49,040,741.41 552,689,510.05
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III. Impairment provision
1. Beginning balance 0.00 0.00 0.00 0.00 0.00
2. Increased amount in the
0.00 0.00 0.00 0.00 0.00
current period
3. Decreased amount in the
0.00 0.00 0.00 0.00 0.00
current period
4. Ending balance 0.00 0.00 0.00 0.00 0.00
IV. Book value
1. Ending book value 456,558,833.68 310,522,983.60 7,227,096.20 25,269,503.15 799,578,416.63
2. Beginning book value 471,677,716.66 318,604,444.75 8,440,163.87 27,512,604.69 826,234,929.97
14. Construction in process
In RMB
Item Ending balance Beginning balance
Construction in progress 333,519,454.24 272,211,720.62
Total 333,519,454.24 272,211,720.62
(1) Construction in progress
In RMB
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Construction of
Maoshan
Intelligent
317,050,589.91 317,050,589.91 259,945,664.42 0.00 259,945,664.42
Manufacturing
Base
infrastructure
Construction of
the intelligent
integrated
9,359,922.85 9,359,922.85 592,358.73 0.00 592,358.73
kitchen
industrializatio
n base
Management
3,574,118.78 3,574,118.78 3,574,118.78 0.00 3,574,118.78
software
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Project of the
Third
0.00 0.00 2,015,449.74 0.00 2,015,449.74
Production
Department
Cutting
1,435,896.56 1,435,896.56 1,435,896.56 0.00 1,435,896.56
machine
Project of the
Second
0.00 0.00 1,206,896.55 0.00 1,206,896.55
Production
Department
Glue dispenser 713,675.21 713,675.21 713,675.21 0.00 713,675.21
Other smaller
1,385,250.93 1,385,250.93 2,727,660.63 0.00 2,727,660.63
projects
Total 333,519,454.24 333,519,454.24 272,211,720.62 272,211,720.62
(2) Current changes in major projects under construction
In RMB
Amou Propor Includi
nt tion of Accum ng: Interes
Increas transfe Other accum ulated amoun t
Beginn ed rred decrea ulative amoun t of capital Source
Ending Project
ing amoun into ses in constr t of capital ization s of
Project Budget balanc progre
balanc t in the fixed the uction capital ized rate in fundin
e ss
e current assets current invest ized interes the g
period in the period ment interes t in the current
current in the t current period
period budget period
Constr
uction
of
Maosh
an
549,55 259,94 57,104 317,05
Intelli 57.69
0,000. 5,664. ,925.4 0.00 0.00 0,589. 57.69 0.00 0.00 0.00% Other
gent %
00 42 9 91
Manuf
acturin
g Base
infrast
ructure
Constr 180,00 592,35 8,767, 0.00 0.00 9,359, 5.20% 5.20 0.00 0.00 0.00% Other
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uction 0,000. 8.73 564.12 922.85
of an 00
intellig
ent
integra
ted
kitche
n
industr
ializati
on
base
Manag
ement 3,574, 3,574,
0.00 0.00 0.00
softwa 118.78 118.78
re
Project
of the
Third
Prod
2,015, 2,015,
uctio 0.00 0.00 0.00
449.74 449.74
n
Depa
rtmen
t
Cuttin
g 1,435, 1,435,
0.00 0.00 0.00
machi 896.56 896.56
ne
Project
of the
Secon
d 1,206, 1,206,
0.00 0.00 0.00
Produc 896.55 896.55
tion
Depart
ment
Glue
713,67 713,67
dispen 0.00 0.00 0.00
5.21 5.21
ser
Other
2,727, 1,532, 2,660, 214,15 1,385,
smalle
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r 660.63 410.49 660.91 9.28 250.93
project
s
729,55 272,21 67,404 333,51
5,883, 214,15
Total 0,000. 1,720. ,900.1 9,454. -- -- --
007.20 9.28
00 62 0 24
15. Intangible assets
(1) Intangible assets
In RMB
Item Land use right Software Trademark Patent Total
I. Original book value
1. Beginning balance 202,418,904.95 46,474,694.36 24,624,622.64 7,300,000.00 280,818,221.95
2.Increased amount in the
23,237,775.00 867,928.69 0.00 0.00 24,105,703.69
current period
(1) Purchase 23,237,775.00 867,928.69 0.00 0.00 24,105,703.69
3. Decreased amount in the
current period
4. Ending balance 225,656,679.95 47,342,623.05 24,624,622.64 7,300,000.00 304,923,925.64
II. Accumulated amortization
1. Beginning balance 21,274,593.91 34,447,626.59 3,678,115.56 1,684,615.38 61,084,951.44
2.Increased amount in the
2,099,004.82 2,891,840.23 1,231,231.12 561,538.47 6,783,614.64
current period
(1) Provision 2,099,004.82 2,891,840.23 1,231,231.12 561,538.47 6,783,614.64
3. Decreased amount in the
0.00
current period
4. Ending balance 23,373,598.73 37,339,466.82 4,909,346.68 2,246,153.85 67,868,566.08
III. Impairment provision
IV. Book value
1. Ending book value 202,283,081.22 10,003,156.23 19,715,275.96 5,053,846.15 237,055,359.56
2. Beginning book value 181,144,311.04 12,027,067.77 20,946,507.08 5,615,384.62 219,733,270.51
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16. Goodwill
(1) Original book value of goodwill
In RMB
Decrease in
Increase in the current period the current
Name of investee or item that generates Beginning period
Ending balance
goodwill balance Generated by
business Disposal
combination
Shengzhou Kinde Intelligent Kitchen
80,589,565.84 0.00 0.00 80,589,565.84
Appliance Co., Ltd.
Total 80,589,565.84 80,589,565.84
Shares of RMB 50 million of the original shareholders of Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd.
(hereinafter referred to as "Shengzhou Kinde") were transferred to the Company in 2018, which completed a business
combination (where the acquired company is not controlled by the same party after the combination) through a capital
increase of RMB 112.32 million, so as to obtain 51.00% of Shengzhou Kinde's equity. China Alliance Appraisal Co., Ltd.
appraised the fair value of Shengzhou Kinde's various identifiable assets and liabilities on June 30, 2018, and issued the
ZTHPBZ (2018) No. 020645 Valuation Report. The consideration of this business combination was RMB 162,320,000.00.
The fair value of Shengzhou Kinde's net identifiable assets was RMB 160,255,753.26, 51 % of which is owned by the
Company. The goodwill value recognized was RMB 80,589,565.84.
Procedures and parameters of goodwill impairment test and methods to recognize goodwill impairment loss
The recoverable amount of the group of assets was determined based on the estimated 5-year future cash flow
approved by the management. The cash flow beyond the five-year period was estimated according to a specific
long-term average growth rate and calculated based on the present value of the future cash flow.
Shengzhou Kinde operates independently as the subsidiary owned by the Company after the acquisition and was
considered as a combination of groups of assets. The Company engaged Zhonghe Assets Appraisal Co., Ltd. to valuate
the recoverable amounts of Shengzhou Kinde’s groups of assets as of December 31, 2019. In accordance with the Report
of the Valuation of Items of Recoverable Amounts of Groups of Assets of Shengzhou Kinde Intelligent Kitchen Appliance
Co., Ltd. Involved in the Goodwill Impairment Test to be Conducted by Hangzhou Robam Appliances Co., Ltd. (Report
No.: ZHZBZ (2019) No. BJU3021) issued by Zhonghe Assets Appraisal Co., Ltd., the recoverable amount of Shengzhou
Kinde’s groups of assets was valuated at RMB 224.43 million and the combination of groups of assets (including the
goodwill) was valuated at RMB 216.4267 million by taking December 31, 2019 as the base date of the assets valuation
according to the present value of the estimated future cash flow.
The pre-tax discount rate was used for the 2019 impairment test, and was calculated using the post-tax discount rate.
The weighted average cost of capital (WACC) model was applied for the selection of the post-tax discount rate. The
estimated discount rate of the goodwill impairment test was determined to be 16.49% according to the market condition.
The gross margin relating to the 2019 impairment test was determined by the average gross margin achieved in the
year immediately before the budget year, and the average gross margin was properly improved based on the expected
efficiency improvement.
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Effects of the goodwill impairment test
Shengzhou Kinde, as a combination of groups of assets, has a recoverable amount larger than its book value
containing the goodwill, therefore, no goodwill impairment exists and there is no need for the goodwill impairment
provision.
17. Long-term deferred expenses
In RMB
Increased amount Amount of
Item Beginning balance in the current amortization in the Other decreases Ending balance
period current period
Service fee 234,663.25 67,726.11 90,117.79 0.00 212,271.57
Consulting fee 187,169.81 24,109.59 100,545.45 0.00 110,733.95
Member training
101,362.68 0.00 44,710.02 0.00 56,652.66
fee
Advertising
0.00 13,044.16 0.00 0.00 13,044.16
expenses
Total 523,195.74 104,879.86 235,373.26 392,702.34
18. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets before offset
In RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income Deductible temporary Deferred income
differences tax assets differences tax assets
Deferred income tax assets before
offset recognized based on the 612,644,677.05 91,896,701.55 215,006,417.88 32,250,962.68
provisional estimated expenses
Deferred income tax assets before
offset recognized based on the 106,869,820.24 16,030,473.04 114,851,263.30 17,227,689.50
deferred income
Asset impairment provision 118,466,718.02 18,877,884.45 99,780,559.97 15,877,475.81
Change of the fair value of other
17,832,510.78 2,674,876.62 17,832,510.78 2,674,876.62
equity instrument investments
Unrealized profits of internal
9,963,262.47 2,490,815.62 8,075,375.65 2,018,843.91
transactions
Accrued and unpaid salaries 0.00 0.00 5,388,241.47 827,267.57
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Total 865,776,988.56 131,970,751.28 460,934,369.05 70,877,116.09
(2) Deferred income tax liabilities before offset
In RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Asset appraisal appreciation arising from
business combination where the acquired
31,955,478.40 4,793,321.76 33,942,653.74 5,091,398.06
company is not controlled by the same party
after the combination
Temporary taxable difference incurred from
4,412,056.07 661,808.41 4,176,334.57 626,450.19
pre-tax deduction of fixed assets
Total 36,367,534.47 5,455,130.17 38,118,988.31 5,717,848.25
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
Amount of deferred Initial amount of
Ending balance of Beginning balance of
income tax assets deferred income tax
deferred income tax deferred income tax
Item offset against deferred assets offset against
assets or liabilities assets or liabilities
income tax liabilities at deferred income tax
after offset after offset
the end of the period liabilities
Deferred income tax
131,970,751.28 70,877,116.09
assets
Deferred income tax
5,455,130.17 5,717,848.25
liabilities
(4) Presentation of unrecognized deferred income tax assets
In RMB
Item Ending balance Beginning balance
Deductible temporary differences 0.00 0.00
Deductible losses 91,709.58 6,459,439.41
Total 91,709.58 6,459,439.41
(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years
In RMB
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Amount at the end of the Amount at the beginning of
Year Remarks
period the period
2020 0.00 6,367,784.94
2021 39,785.54 39,785.54
2022 39,552.31 39,552.31
2023 6,714.34 6,714.34
2024 5,602.28 5,602.28
2025 55.11 0.00
Total 91,709.58 6,459,439.41 --
Other remarks:
Note: The relevant deferred income tax assets are unrecognized due to the fact that the pre-tax recovery of the loss
De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. (a subsidiary of the Company) in the following years is
extremely uncertain.
19 Other non-current assets
In RMB
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayments for
equipment purchase and 28,809,208.26 28,809,208.26 23,558,781.27 23,558,781.27
other items
Total 28,809,208.26 28,809,208.26 23,558,781.27 23,558,781.27
20. Notes payable
In RMB
Type Ending balance Beginning balance
Banker's acceptance 554,767,283.02 603,308,648.96
Total 554,767,283.02 603,308,648.96
21. Accounts payable
(1) Presentation of accounts payable
In RMB
Item Ending balance Beginning balance
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Payment for materials 730,641,561.95 880,995,549.70
Payment for expenses 684,882,250.27 465,097,084.50
Payment for construction 25,079,714.24 33,887,108.65
Payment for equipment 13,054,951.58 15,081,542.43
Total 1,453,658,478.04 1,395,061,285.28
Note: As of June 30, 2020, the important accounts payable with an age of more than one year totaled RMB 88,985,765.46, mainly
involving the outstanding payment for expenses.
22. Contract liabilities
In RMB
Item Ending balance Beginning balance
Advances on sales 989,070,578.98 1,092,261,332.25
Total 989,070,578.98 1,092,261,332.25
23. Employee benefits payable
(1) Presentation of employee benefits
In RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
I. Short-term benefits 116,643,991.68 268,390,483.49 352,109,533.57 32,924,941.60
II. Post employment
benefits - defined 5,426,333.35 10,130,180.01 15,197,732.89 358,780.47
contribution plan
III. Termination
0.00 480,580.86 480,580.86 0.00
benefits
Total 122,070,325.03 279,001,244.36 367,787,847.32 33,283,722.07
(2) Presentation of short-term benefits
In RMB
Increase in the Decrease in the
Item Beginning balance Ending balance
current period current period
1. Salaries, bonuses, subsidies and
112,088,149.01 227,361,141.17 308,231,142.81 31,218,147.37
allowances
2. Employee welfare 0.00 11,308,734.93 11,308,734.93 0.00
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3. Social insurance 3,930,546.68 11,576,114.16 14,412,187.07 1,094,473.77
Including: medical insurance 3,388,855.20 11,106,325.45 13,507,370.33 987,810.32
work-related injury
172,761.56 304,395.47 467,065.74 10,091.29
insurance
maternity insurance fee 368,929.92 165,393.24 437,751.00 96,572.16
4. Housing funds 272,101.00 12,686,112.28 12,771,033.28 187,180.00
5. Labor union and staff education
353,194.99 5,458,380.95 5,386,435.48 425,140.46
expenses
Total 116,643,991.68 268,390,483.49 352,109,533.57 32,924,941.60
(3) Presentation of defined contribution plans
In RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
1. Basic pensions 5,228,962.74 9,768,102.39 14,663,706.24 333,358.89
2. Unemployment
197,370.61 362,077.62 534,026.65 25,421.58
insurance
Total 5,426,333.35 10,130,180.01 15,197,732.89 358,780.47
24. Taxes payable
In RMB
Item Ending balance Beginning balance
Business income tax 144,032,493.04 89,992,149.62
VAT 69,627,258.47 9,811,740.89
Individual income tax 1,653,849.00 1,190,263.26
City maintenance and construction tax 5,028,571.03 769,259.08
Education surcharges 3,591,836.53 549,470.80
Stamp tax 193,715.30 238,931.49
Employment security fund for the
1,931.32 174,840.07
disabled
Total 224,129,654.69 102,726,655.21
25. Other payables
In RMB
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Item Ending balance Beginning balance
Other payables 246,029,775.35 241,641,864.89
Total 246,029,775.35 241,641,864.89
(1) Other payables
1) Other payables presented by nature
In RMB
Item Ending balance Beginning balance
Security deposits payable 236,990,060.35 233,004,717.16
Guarantee deposits payable 5,138,257.48 4,995,172.30
Collections by a third party 3,395,178.94 1,486,383.22
Others 506,278.58 2,155,592.21
Total 246,029,775.35 241,641,864.89
Note: As of June 30, 2020, the important accounts payable with an age of more than one year totaled RMB
208,530,921.03, mainly involving the sales deposits.
26. Deferred income
In RMB
Increase in the Decrease in the Cause of
Item Beginning balance Ending balance
current period current period formation
Government
114,851,263.30 17,241,420.00 7,981,443.06 124,111,240.24
grants
Total 114,851,263.30 17,241,420.00 7,981,443.06 124,111,240.24 --
Projects with government grants:
In RMB
Amount
Related to
included in other Ending
Liability Beginning balance assets /
income in the balance
income
current period
Construction of the kitchen appliances R&D, design Related to
11,774,935.49 1,182,583.62 10,592,351.87
and testing center assets
Related to
A kitchen appliances R&D, design and testing center 50,196.40 3,812.40 46,384.00
assets
Construction of production line with an annual output Related to
3,426,625.04 571,891.98 2,854,733.06
of 1 million sets of kitchen appliances assets
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Subsidy for an investment in a production line with an Related to
147,871.71 29,441.40 118,430.31
annual output of 150,000 kitchen ventilators assets
Construction of production line with an annual output Related to
27,478,633.08 1,286,890.62 26,191,742.46
of 2.25 million sets of kitchen appliances assets
Construction of the digital workshop with an annual Related to
232,092.73 51,853.02 180,239.71
output of 2.25 million sets of kitchen appliances assets
Development of new generation of
Related to
environmentally-friendly energy-saving kitchen 912,326.99 95,325.42 817,001.57
assets
appliances and their production line
Related to
Recycling-centered renewal project 543,686.97 45,805.08 497,881.89
assets
Related to
Academician (expert) workstation 303,134.00 23,127.84 280,006.16
assets
Construction of digital intelligent workshop for smart Related to
741,075.72 79,713.36 661,362.36
home appliances assets
Application of intelligent manufacturing, Related to
55,323,859.42 4,269,752.82 51,054,106.60
comprehensive standardization and new modes assets
Construction of production line with an annual output Related to
5,616,825.75 341,245.50 5,275,580.25
of 1.08 million sets of built-in kitchen appliances assets
Technological upgrading for manufacturing Related to
8,300,000.00 0.00 8,300,000.00
enterprises assets
Construction of an intelligent integrated kitchen Related to
0.00 0.00 17,241,420.00
industrialization base assets
27. Capital stock
In RMB
Increase and decrease of this change (+, -)
Shares converted
Beginning balance New shares Bonus Ending balance
from capital Others Sub-total
issued shares
reserve
Total number
949,024,050.00 949,024,050.00
of shares
In RMB
28. Capital reserve
In RMB
Item Beginning balance Increase in the current Decrease in the current Ending balance
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period period
Capital (stock)
401,799,332.67 0.00 0.00 401,799,332.67
premium
Total 401,799,332.67 401,799,332.67
29. Other comprehensive incomes
In RMB
Amount incurred in the current period
Minus: Minus:
Amoun amount amount
t included in included in
Net
incurre other other Net income
Minus: income
d comprehensi comprehensi after tax
Beginning income after tax Ending
Item before ve incomes ve incomes attributable
balance tax attributabl balance
income previously previously to minority
expense e to the
tax in and then and then shareholder
s parent
the transferred transferred s
company
current into the into current
period current profit retained
or loss earnings
I. Other
comprehensi
ve incomes
that cannot -15,157,634.1 -15,157,634.1
be 6 6
reclassified
into profit or
loss
Changes in
the fair value
-15,157,634.1 -15,157,634.1
of other
6 6
equity
instrument
investments
Total of other
-15,157,634.1 -15,157,634.1
comprehensi 0.00 0.00 0.00 0.00 0.00
6 6
ve incomes
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30. Surplus reserve
In RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
Statutory surplus
474,516,412.50 0.00 0.00 474,516,412.50
reserve
Total 474,516,412.50 0.00 0.00 474,516,412.50
31. Undistributed profit
In RMB
Item Current period Previous period
Undistributed profit at the end of previous
5,054,206,720.45 4,223,611,112.65
period before adjustment
Undistributed profit at the beginning of the
5,054,206,720.45 4,223,611,112.65
period after adjustment
Add: net profit attributable to the owner of the
612,317,249.29 1,589,814,847.80
parent company in the current period
Dividends payable for ordinary shares 474,512,025.00 759,219,240.00
Undistributed profit at the end of the period 5,192,011,944.74 5,054,206,720.45
32. Operating income and operating cost
In RMB
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 3,146,865,561.70 1,429,892,268.93 3,452,212,044.04 1,571,078,316.27
Other businesses 64,306,774.09 20,836,307.65 75,201,838.92 28,323,646.54
Total 3,211,172,335.79 1,450,728,576.58 3,527,413,882.96 1,599,401,962.81
33. Taxes and surcharges
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
City maintenance and construction tax 14,140,538.08 16,545,646.34
Education surcharges 10,100,384.36 11,747,151.84
House tax 0.00 6,285.71
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Vehicle and vessel usage tax 5,530.80 9,593.34
Stamp tax 918,951.81 1,150,321.15
Environmental protection tax 22,829.18 0.00
Total 25,188,234.23 29,458,998.38
34. Sales expense
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Marketing service expenses 466,038,121.92 489,722,443.97
Advertisement expenses 143,181,868.92 165,539,234.97
Employees' benefits 85,640,734.54 94,393,030.18
Freight charges 73,404,730.65 79,208,767.96
Promotional activity expenses 32,884,532.32 29,940,447.26
Booth decoration expenses 40,103,399.65 61,152,015.64
Material consumption 28,609,979.15 33,420,048.82
Intermediary service charges 6,366,462.19 5,316,968.69
Entertainment expenses 5,123,361.43 7,209,763.53
Rental fees 4,526,440.07 9,631,385.03
Travel expenses 3,277,056.81 7,082,298.54
Office expenses 2,139,466.85 6,152,737.46
Others 1,383,143.26 1,275,764.56
Total 892,679,297.76 990,044,906.61
35. Administrative expenses
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Employee benefits 63,047,359.21 54,695,776.71
Depreciation and amortization 19,591,719.73 19,729,326.75
Others 7,142,962.53 9,191,649.58
Consulting service fees 5,259,193.86 4,649,488.06
Office expenses 4,832,241.98 3,368,742.06
Rental fees 3,620,561.19 3,845,066.25
Maintenance expenses 2,753,334.17 6,479,908.47
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Intermediary service charges 2,179,344.35 2,025,361.28
Material consumption 2,017,310.49 4,574,832.36
Entertainment expenses 1,799,214.29 2,309,515.17
Travel expenses 1,589,147.21 2,981,161.71
Freight charges 1,266,512.10 969,812.74
Transportation expenses 986,420.87 1,241,356.38
Stock ownership incentive expenses 0.00 109,531.25
Total 116,085,321.98 116,171,528.77
36. R&D expenses
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Employee benefits 51,250,613.00 43,596,381.82
Direct input 52,263,866.12 49,233,260.11
Depreciation and amortization 7,361,111.08 7,682,242.02
Design fees 1,288,405.08 3,116,230.90
Other expenses 5,660,037.34 4,001,671.28
Total 117,824,032.62 107,629,786.13
37. Financial expenses
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 139,284.26 201,831.98
Minus: interest income 47,604,818.42 30,307,927.32
Add: exchange gain/loss -758,363.69 35,598.30
Add: other expenses 441,404.01 465,526.17
Total -47,782,493.84 -29,604,970.87
38. Other incomes
In RMB
Amount incurred in the Amount incurred in the
Sources generating other incomes
current period previous period
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Financial support fund to boost the corporate development 53,859,120.00 45,262,300.00
Application of intelligent manufacturing, comprehensive standardization
4,269,752.82 1,982,257.55
and new modes
Performance reward offered by the Finance Bureau of Hongkou District 3,400,000.00 4,090,000.00
Post-specific allowance and social insurance allowance 3,226,432.26 229,477.50
Reward for obtaining large scale revenue of "Kunpeng Plan" of the
2,000,000.00 0.00
manufacturing industry
Construction of the production line with an annual output of 2.25 million
1,286,890.62 1,286,890.62
sets of kitchen appliances
Construction of the kitchen appliances R&D, design and testing center 1,182,583.62 1,182,583.62
Refund of individual income tax handling fee 1,092,154.23 76,579.44
Financial incentive for patent licensing 572,000.00 0.00
Construction of the production line with an annual output of 1 million sets
571,891.98 571,891.98
of kitchen appliances
Reward for the development of high technologies 500,000.00 0.00
Reward for standardization, quality and branding-related projects 458,000.00 0.00
Construction of the production line with an annual output of 1.08 million
341,245.50 0.00
sets of built-in kitchen appliances
Return of social insurance premium 236,660.73 533,442.61
Subsidy for the accounting center expenses 200,000.00 0.00
Subsidy for creating industry standards 121,244.00 0.00
Development of new generation of environmentally-friendly energy-saving
95,325.42 95,325.42
kitchen appliances and their production line
Construction of digital intelligent workshop for smart home appliances 79,713.36 79,713.36
Reward for key enterprises in Hongkou District, Shanghai 60,000.00 0.00
Construction of the digital workshop with an annual output of 2.25 million
51,853.02 51,853.02
sets of kitchen appliances
Recycling-centered renewal project 45,805.08 45,805.08
Subsidy for an investment in a production line with an annual output of
29,441.40 29,441.40
150,000 kitchen ventilators
Academician (expert) workstation 23,127.84 23,127.84
VAT exemption or reduction 9,000.00 0.00
Recruitment subsidy 6,000.00 0.00
Patent-related allowance 4,180.00 4,180.00
Construction of the kitchen appliances R&D, design and testing center 3,812.40 3,812.40
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Subsidy for industrial chain upgrading included in the special funds offered
0.00 958,500.00
by the Industry and Information Technology Department
Subsidy for model enterprises migrated to the Cloud 0.00 300,000.00
Subsidy for intelligent power utilization 0.00 32,000.00
39. Investment income
In RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Income from wealth management products 26,341,452.82 39,789,776.54
Dividend income obtained during other equity instrument investments 0.00 0.00
Income from long-term equity investment measured by the equity method -2,239,220.46 69,197.95
Total 24,102,232.36 39,858,974.49
40. Loss from credit impairment
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Notes receivable -11,545,668.38 -5,510,787.60
Accounts receivable -3,367,587.99 -2,026,738.41
Other receivables -3,598,513.22 -1,414,503.22
Total -18,511,769.59 -8,952,029.23
41. Asset disposal income
In RMB
Sources of asset disposal income Amount incurred in the current period Amount incurred in the previous period
Gains from disposal of non-current
11,388.98 -296,672.23
assets
Including: gains from disposal of fixed
11,388.98 -296,672.23
assets
Total 11,388.98 -296,672.23
42. Non-operating revenue
In RMB
Item Amount incurred in the Amount incurred in the Amount included in the
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current period previous period current non-recurring profit
or loss
Government grants 30,000.00 1,230,000.00 30,000.00
Others 556,353.17 381,946.09 556,353.17
Total 586,353.17 1,611,946.09 586,353.17
Government grants included in the current profit or loss:
In RMB
Amount
Related to
incurred in Amount incurred in Source of the grants and basis of the
Item assets /
the current the previous period grant issuance
income
period
Outstanding corporate culture 30,000.00 0.00 The YWMB (2019) No. 18 document Related to
club income
Subsidy for the construction 0.00 1,000,000.00 The YJX (2019) No. 16 document Related to
of the platform for Innovation income
and Entrepreneurship in 2018
Subsidy for municipal-level 0.00 100,000.00 The YSJ (2019) No. 18 document Related to
technological standardization income
efforts in 2018
Subsidy for cultivation of 0.00 70,000.00 List of the fifth group of Related to
skilled personnel Highly-skilled Personnel Studios income
in Yuhang District; The YKG
(2018) No. 31 document
Reward for key enterprises 0.00 60,000.00 Commendation and rewards for Related to
key enterprises offered by the income
Investment Promotion Office of
Hongkou District, Shanghai
Total 30,000.00 1,230,000.00 — —
43. Non-operating expenditures
In RMB
Amount included in the
Amount incurred in the Amount incurred in the
Item current non-recurring profit
current period previous period
or loss
Losses from non-current asset
0.00 1,171,725.00 0.00
damage or retirement
External donations 1,000,000.00 1,000,000.00 1,000,000.00
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Others 695,304.64 710,719.05 695,304.64
Total 1,695,304.64 2,882,444.05 1,695,304.64
44. Income tax expenses
(1) Presentation of income tax expenses
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Current income tax expense 172,846,414.95 181,475,283.87
Deferred income tax expense -61,356,353.28 -58,401,245.72
Total 111,490,061.67 123,074,038.15
(2) Adjustment of accounting profit and income tax expense
In RMB
Item Amount incurred in the current period
Total profit 734,668,501.02
Income tax expense calculated based on statutory/applicable
110,200,275.15
tax rate
Effects of the subsidiaries’ application of different tax rates -648,657.89
Effects of the adjustment of income tax in previous period 0.00
Effects of the non-taxable income 335,883.18
Effects of the non-deductible costs, expenses and losses 1,676,591.80
Effects of using deductible losses of unrecognized deferred
0.00
income taxes in the previous period
Effects of the deductible temporary difference or deductible
losses of unrecognized deferred income tax assets in the 475,057.13
current period
Income tax expenses 111,490,061.67
45. Other comprehensive incomes
See Note "VII. Other Comprehensive Incomes".
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46. Cash flow statement items
(1) Other cashes received in relation to operating activities
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Government grants 83,007,211.22 52,163,036.94
Interest income 47,289,176.66 30,307,927.32
Security/guarantee deposits 3,445,820.00 3,811,603.20
Petty cash 2,060,756.89 0.00
Collection and payment agency services 6,405,232.50 0.00
Other payments 1,579,919.38 8,863,178.11
Total 143,788,116.65 95,145,745.57
(2) Other cashes paid relating to operating activities
In RMB
Item Amount incurred in the current period Amount incurred in the previous period
Period expense 681,737,610.63 689,332,020.79
Security/guarantee deposits 9,872,837.56 0.00
Petty cash 8,607,467.00 0.00
Payments or collections by another party 5,850,848.09 0.00
L/C margin 7,628,855.25 0.00
Others 1,043,789.70 81,682,101.67
Total 714,741,408.23 771,014,122.46
47. Supplementary information of Cash Flow Statement
(1) Supplementary information of Cash Flow Statement
In RMB
Amount in the current Amount in the previous
Supplementary information
period period
1. Reconciliation of net profit to cash flow from operating activities: -- --
Net profit 623,178,439.35 677,416,589.89
Add: asset impairment provision 18,511,769.59 8,952,029.23
Depreciation of fixed assets, depreciation of oil and gas 47,537,865.87 45,201,367.93
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assets, and depreciation of productive biological assets
Amortization of intangible assets 6,783,614.63 6,418,112.43
Amortization of long-term deferred expenses 235,373.08 3,582,462.16
Loss from disposal of fixed assets, intangible assets and other
-11,388.98 1,468,397.23
long-term assets (profit shall be indicated with"-")
Financial expenses (profit shall be indicated with"-") -540,552.95 -116,415.75
Loss from investment (profit shall be indicated with"-") -24,102,232.36 -39,858,974.49
Decrease in deferred income tax assets (increase shall be
-61,093,635.20 -57,830,565.29
indicated with “-”)
Increase in deferred income tax liabilities (decrease shall be
-262,718.08 -570,680.43
indicated with “-”)
Decrease in inventories (increase shall be indicated with “-”) 69,294,179.87 130,904,758.56
Decrease in operating receivables (increase shall be indicated
-218,336,278.24 -298,690,566.84
with"-")
Increase in operating payables (decrease shall be indicated
-62,765,374.17 187,057,740.99
with"-")
Others 9,258,071.15 -5,243,171.04
Loss from credit assets impairment
Net cash flow from operating activities 407,687,133.56 658,691,084.58
2. Non-cash flow-involved major investing and financing activities: -- --
Conversion of debt into capital 0.00 0.00
Convertible bonds due within one year 0.00 0.00
Fixed assets acquired under financing leases 0.00 0.00
3. Net increase/decrease in cash and cash equivalents: -- --
Ending balance of cash 4,315,955,499.25 2,559,638,401.46
Minus: cash beginning balance 4,029,296,265.50 2,177,219,858.85
Add: ending balance of cash equivalents 0.00 0.00
Minus: beginning balance of cash equivalents 0.00 0.00
Net increase in cash and cash equivalents 286,659,233.75 382,418,542.61
(2) Composition of cash and cash equivalents
In RMB
Item Ending balance Beginning balance
I. Cash 4,315,955,499.25 4,029,296,265.50
Including: cash on hand 353,643.65 218,775.77
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deposits available for payment at
4,315,601,855.60 4,029,077,489.73
any time
other monetary capital available for
0.00 0.00
payment at any time
II. Cash equivalent 0.00 0.00
III. Balance of cash and cash equivalents
4,315,955,499.25 4,029,296,265.50
at the end of the period
48. Note to items in the Statement of Changes in Owner’s Equity
Name of the item under "Others" whose previous ending balance was adjusted, the adjusted amount and other matters: NA
49. Assets with limited ownership and right to use
In RMB
Item Ending book value Reason for the limitation
Monetary capital 35,340,844.54 Guarantee deposit
Total 35,340,844.54 --
50. Monetary items in foreign currency
(1) Monetary items in foreign currency
In RMB
Ending balance in foreign
Item Exchange rate Ending balance in RMB
currency
Monetary capital -- --
Including: capital in USD 1,955,343.36 7.0795 13,842,853.32
capital in EURO 350.00 7.9610 2,786.35
capital in AUD 3.29 4.8657 16.01
Accounts receivable -- --
Including: receivables in USD 2,461,764.35 7.0795 17,428,060.72
receivables in EURO 289.60 7.9610 2,305.51
receivables in AUD 30.00 4.8657 145.97
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(2) Description for overseas operating entities, including the disclosure of the main business location
overseas, bookkeeping base currency and selection basis for the important business entity overseas as well
as the reason for the change of bookkeeping base currency (if any).
□ Applicable √ Not Applicable
51. Government grants
(1) Basics of government grants
In RMB
Amounts included
Type Amount Items in current profits
and losses
Financial support fund to boost the corporate development 53,859,120.00 Other income 53,859,120.00
Construction of the intelligent integrated kitchen Deferred
17,241,420.00 0.00
industrialization base income
Application of intelligent manufacturing, comprehensive
4,269,752.82 Other income 4,269,752.82
standardization and new modes
Performance reward offered by the Finance Bureau of Hongkou
3,400,000.00 Other income 3,400,000.00
District
Post-specific allowance and social insurance allowance 3,226,432.26 Other income 3,226,432.26
Reward for obtaining large scale revenue of "Kunpeng Plan" of
2,000,000.00 Other income 2,000,000.00
the manufacturing industry
Construction of the production line with an annual output of
1,286,890.62 Other income 1,286,890.62
2.25 million sets of kitchen appliances
Construction Program of Construction of the kitchen appliances Deferred
1,182,583.62 1,182,583.62
R&D, design and testing center income
Refund of individual tax handling fee 1,092,154.23 Other income 1,092,154.23
Financial incentive for patent licensing 572,000.00 Other income 572,000.00
Construction of the production line with an annual output of 1
571,891.98 Other income 571,891.98
million sets of kitchen appliances
Reward for the development of high technologies 500,000.00 Other income 500,000.00
Reward for standardization, quality and branding-related
458,000.00 Other income 458,000.00
projects
Construction of production line with an annual output of 1.08 Deferred
341,245.50 341,245.50
million sets of built-in kitchen appliances income
Return of social insurance taxes and dues 236,660.73 Other income 236,660.73
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Subsidy for accounting center expenses 200,000.00 Other income 200,000.00
Subsidy for creating industry standards 121,244.00 Other income 121,244.00
Development of new generation of environmentally-friendly Deferred
95,325.42 95,325.42
energy-saving kitchen appliances and their production line income
Construction of digital intelligent workshop for smart home Deferred
79,713.36 79,713.36
appliances income
Reward for key enterprises in Hongkou District, Shanghai 60,000.00 Other income 60,000.00
Construction of the digital workshop with an annual output of
51,853.02 Other income 51,853.02
2.25 million sets of kitchen appliances
Recycling-centered renewal project 45,805.08 Other income 45,805.08
Non-operation
Outstanding corporate culture club 30,000.00 30,000.00
al income
Subsidy for an investment in a production line with an annual
29,441.40 Other income 29,441.40
output of 150,000 kitchen ventilators
Deferred
Academician (expert) workstation 23,127.84 23,127.84
income
VAT exemption or reduction 9,000.00 Other income 9,000.00
Recruitment subsidy 6,000.00 Other income 6,000.00
Patent-related allowance 4,180.00 Other income 4,180.00
Construction of the kitchen appliances R&D, design and testing Deferred
3,812.40 3,812.40
center income
(2) Return of government grants
□ Applicable √ Not Applicable
VIII. Changes in the scope of consolidated financial statements
There is no change in the scope of consolidated financial statements of the Company during the reporting period.
IX. Interests in Other Entities
1. Equity in subsidiaries
(1) Composition of the Robam conglomerate
Principal place Registration Nature of Shareholding ratio Acquisition
Subsidiary
of business place business Direct Indirect method
Beijing Robam Beijing Beijing Sales of kitchen 100.00% 0.00% Business
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Electric appliances combination
Appliance under common
Sales Co., Ltd. control
Shanghai Business
Robam Electric Sales of kitchen combination
Shanghai Shanghai 100.00% 0.00%
Appliance appliances under common
Sales Co., Ltd. control
Hangzhou
Acquisition
MingQi Sales of kitchen
Hangzhou Hangzhou 100.00% 0.00% upon its
Electric Co., appliances
establishment
Ltd.
De Dietrich
Household
Acquired
Appliances Sales of kitchen
Shanghai Shanghai 51.00% 0.00% through
Trading appliances
investment
(Shanghai) Co.,
Ltd.
Shengzhou
Business
Kinde
Production and combination
Intelligent
Shengzhou Shengzhou sales of kitchen 51.00% 0.00% not under
Kitchen
appliances common
Appliance Co.,
control
Ltd.
Hangzhou
Robam Asset,
Acquisition
Fuchuang investment
Hangzhou Hangzhou 100.00% 0.00% upon its
Investment management,
establishment
Management etc.
Co., Ltd.
(2) Major non-wholly owned subsidiaries
In RMB
Dividend declared
Proportion of Gains/losses Balance of minority
and distributed to
shares held by attributable to shareholders’ equity
Subsidiary minority
minority minority shareholders at the end of the
shareholders in the
shareholders in the current period period
current period
Shengzhou Kinde Intelligent Kitchen
49.00% 10,861,163.06 0.00 124,088,686.19
Appliance Co., Ltd.
De Dietrich Household Appliances 49.00% 27.00 0.00 -3,333,027.89
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Trading (Shanghai) Co., Ltd.
(3) Main financial information of important partially-owned subsidiaries
In RMB
Ending balance Beginning balance
Non-cu Non-cu
Subsidi Non-cu Current Total Non-cu Current Total
Current Total rrent Current Total rrent
ary rrent liabiliti liabiliti rrent liabiliti liabiliti
assets assets liabiliti assets assets liabiliti
assets es es assets es es
es es
Shengz
hou
Kinde
Intellig 315,65
254,655 115,270 369,925 93,987, 22,696, 116,683 230,113 85,542, 78,861, 5,717,8 84,579,
ent 6,414.0
,066.10 ,719.29 ,785.39 018.52 550.17 ,568.69 ,578.72 835.32 987.98 48.25 836.23
Kitchen 4
Applian
ce Co.,
Ltd.
De
Dietric
h
Househ
old
Applian 5,657.5 3,817.3 9,474.8 6,811,5 6,811,5 5,602.4 3,817.3 9,419.7 6,811,5 6,811,5
0.00 0.00
ces 2 1 3 72.56 72.56 1 1 2 72.56 72.56
Trading
(Shang
hai)
Co.,
Ltd.
In RMB
Amount incurred in the current period Amount incurred in the previous period
Total Total
Subsidiary Operating comprehen Operating Operating comprehen Operating
Net profit Net profit
income sive cash flow income sive cash flow
income income
Shengzhou
92,100,731 22,165,638 22,165,638 27,412,195 90,517,727 14,311,880 14,311,880 26,511,914.
Kinde
.82 .90 .90 .88 .14 .56 .56 94
Intelligent
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Kitchen
Appliance
Co., Ltd.
De Dietrich
Household
Appliances
0.00 55.11 55.11 4.18 0.00 -5,718.28 -5,718.28 -345.73
Trading
(Shanghai)
Co., Ltd.
(4) Summary of the financial information of minor joint venture and associated company
In RMB
Ending balance/amount incurred in Beginning balance/ amount incurred in
current period last period
Joint venture: -- --
Total book value of investments 1,929,118.33 4,168,338.79
Totals of the following items calculated as
-- --
per respective shareholding proportion
-Net profit -4,390,628.34 1,550,487.63
-Other comprehensive incomes 0.00 0.00
-Total comprehensive income -4,390,628.34 1,550,487.63
Associated company: -- --
Totals of the following items calculated as
-- --
per respective shareholding proportion
X. Risks Relating to Financial Instruments
Major financial instruments of the Company include accounts receivable, accounts payable, etc. See Note VII for
the details of various financial instruments. Risks related to these financial instruments and risk management policies
adopted by the Company to reduce such risks are outlined as follows. The management of the Company manages and
monitors such risk exposures to ensure to keep the risks above within limited scope.
The Company's various risk management objectives and policies are outlined as follows:
Risk management conducted by the Company is to properly balance risk and income, minimize negative impacts
of the risks on the Company’s business performance and maximize benefits of the shareholders and other equity
investors. Based on the risk management objective, the Company’s basic risk management policy is to determine and
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analyze all kinds of risks faced by the Company, establish appropriate risk bottom line for risk management, and
monitor all risks promptly and reliably to keep risks within a limited range.
1. Market risk - price risk
Since the Company sells its products at market prices, it may be affected by such price fluctuations.
2. Credit risk
As of June 30, 2020, the biggest credit risk exposure that may bring financial loss to the Company mainly comes
from the Company’s financial assets loss caused by the other party’s failure to perform its obligations in the contract,
particularly including the loss in the book value of recognized financial assets in the consolidated balance sheet.
To reduce credit risk, the Company has a dedicated team responsible for determining the credit line, conducting
credit approval and implementing other monitoring procedures, to ensure that necessary measures are taken to recover
due debt. In addition, the Company reviews the recovery of each account payable on each balance sheet date, so as to
ensure sufficient bad debt provisions for unrecoverable accounts. Therefore, the management of the Company holds that
the credit risk faced by the Company has been significantly reduced.
The credit risk of the Company’s liquid capital is low since it is deposited at banks with relatively high credit
rating.
Because the risk exposures of the Company are related to multiple contracting parties and multiple clients, the
Company has no major credit risk concentration.
The Company adopts necessary policies to ensure all of the clients involved in the sales of our products have good
credit record. The Company has no major credit risk concentration.
3. Liquidity risk
Liquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due. The
Company manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoid unacceptable
losses or damages to corporate reputation. The Company periodically analyzes debt structure and term to ensure that it
has sufficient liquid capital.
4. Foreign exchange risk
The exchange rate risk borne by the Company is mainly associated with USD, Euro and HKD, etc. The foreign
exchange risk borne by the Company is mainly associated with USD (which shall be changed according to relevant
realities). The Company's main business activities priced and settled in RMB. As of June 30, 2020, the Company's
balances of assets and liabilities are in RMB (except for the balances of the assets and liabilities in foreign currency in
"VII. 50 Monetary items in foreign currency" in this Note). Exchange risk resulting from the assets and liabilities whose
balances are in foreign currency may affect the Company’s performance.
The Company pays close attention to the impact of change in exchange rate on the Company’s exchange risk. Currently,
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the Company hasn’t adopted any measures to avoid foreign exchange risk.
XI. Disclosure of Fair Value
1. Fair value at end of the period of assets and liabilities measured at fair value
In RMB
Ending fair value
Fair value Fair value Fair value
Item
measurement measurement measurement (Level Total
(Level 1) (Level 2) 3)
I. Continuous fair value measurement -- -- -- --
(I) Financial assets held for trading 0.00 0.00 925,000,000.00 925,000,000.00
1. Financial assets measured at fair
value with changes included in current 0.00 0.00 925,000,000.00 925,000,000.00
profit or loss
(III) Investment in other equity
0.00 0.00 102,116,023.22 102,116,023.22
instruments
Total assets measured continuously at
0.00 0.00 1,027,116,023.22 1,027,116,023.22
fair value
II. Non-continuous fair value
-- -- -- --
measurement
2. Valuation techniques adopted and qualitative and quantitative information on important parameters for
the items involved in Level 3 continuous and non-continuous fair value measurement
Item Fair value as of June 30, 2020 Valuation techniques Significant unobservable Relationship
value between
unobservable
value and fair
value
Financial products 925,000,000.00 Optimal fair value estimation Investment cost —
Other equity instrument 102,116,023.22 Optimal fair value estimation Investment cost —
investments
XII. Related Party and Related Party Transactions
1. The Company's parent company
Parent company Registration place Nature of business Registered capital Proportion of the Proportion of
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Company's shares voting right of the
held by the parent parent company in
company the Company
Hangzhou Robam Investment and
Hangzhou,
Industrial Group industrial RMB 60 million 49.68% 49.68%
Zhejiang
Co., Ltd. management
2. The Company's subsidiaries
See Note "VII. Composition of the Robam conglomerate” for more about the Company's subsidiaries.
3. The Company's joint ventures and associated companies
See Note “VII. Major non-wholly owned subsidiaries for more about the Company's important joint ventures or associated
companies.
4. Other related parties
Name Relation between other related parties and the Company
Name of other related parties Relationship with the Company
Hangzhou Amblem Kitchen Ware Co., Ltd. Controlled by the same parent company
Hangzhou Yuhang Robam Fuel Station Co., Ltd. Controlled by the same parent company
Hangzhou Nbond Nonwovens Co., Ltd. Controlled by the same parent company
Hangzhou Yuhang Yaguang Spray Coating Factory Controlled by the actual controller’s younger sister
Hangzhou City Garden Hotel Co., Ltd. Significantly influenced by the parent company
Hangzhou Bonyee Daily Necessity Technology Co., Ltd. Controlled by the same parent company
Shaoxing Kinde Electric Appliances Co., Ltd. Other shareholders of the subsidiaries owned by the Company
5. Related transactions
(1) Related transactions regarding purchasing and selling goods and providing and accepting labor services
Table of the purchasing of goods and receiving of labor services
In RMB
Description of Amount incurred Whether exceeds
Trading limit Amount incurred in
Related parties the related in the current the approved limited
approved the previous period
transaction period or not (Y/N)
Hangzhou
Receiving of
Yuhang Yaguang 5,127,566.52 No 5,504,169.36
labor services
Spray Coating
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Factory
Hangzhou
Bonyee Daily
Purchase of
Necessity 1,387,629.65 No 1,746,291.56
goods
Technology Co.,
Ltd.
Hangzhou
Receiving of
Amblem Kitchen 2,137,356.44 No 1,697,016.55
labor service
Ware Co., Ltd.
Hangzhou
Yuhang Robam Purchase of
270,199.44 No 565,621.34
Fuel Station Co., goods
Ltd.
Hangzhou Nbond
Purchase of
Nonwovens Co., 36,514.24 No 0.00
goods
Ltd.
Goods Sales/labor service provision
In RMB
Contents of related Amount incurred in the Amount incurred in the previous
Related parties
transaction current period period
Shaoxing Kinde Electric
Sale of goods 2,243,171.75 18,933,222.50
Appliances Co., Ltd.
Hangzhou Amblem Kitchen
Sale of goods 1,958,456.62 5,836,683.25
Ware Co., Ltd.
Hangzhou Yuhang ROBAM
Sale of goods 556,814.16 0.00
Charity Foundation
Hangzhou Nbond Nonwovens
Sale of goods 0.00 724.14
Co., Ltd.
(2) Related leasing
The Company acts as the lessor:
In RMB
Rental income recognized in Rental income recognized in
Lessee Type of leased asset
the current period the previous period
Hangzhou Robam Appliances
Housing 14,400.00 14,400.00
Co., Ltd.
The Company acts as the Lessee:
In RMB
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Rental fee recognized in the Rental fee recognized in the
Lessor Type of leased asset
current period previous period
Hangzhou Robam Industrial
Housing 275,012.28 275,012.28
Group Co., Ltd.
(3) Benefits of key management personnel
In RMB 10,000
Item Amount incurred in the current period Amount incurred in the previous period
Total benefits 302.31 323.11
6. Receivables and payables of related parties
(1) Receivables
In RMB
Ending balance Beginning balance
Item Related parties Bad debt Bad debt
Book balance Book balance
provision provision
Accounts Hangzhou Amblem Kitchen Ware Co.,
1,058,786.00 5% 0.00
receivable Ltd.
Advance Hangzhou Amblem Kitchen Ware Co.,
2,113,234.47 50,000.00
payments Ltd.
Advance Shaoxing Kinde Electric Appliances
193,636.72 580,130.26
payments Co., Ltd.
(2) Payables
In RMB
Item Related parties Ending book balance Beginning book balance
Hangzhou Yuhang Yaguang Spray
Accounts payable 3,664,899.31 4,525,094.50
Coating Factory
Hangzhou Yuhang Robam Fuel
Accounts payable 1,796,270.91 1,490,945.55
Station Co., Ltd.
Shaoxing Kinde Electric Appliances
Accounts payable 0.00 57,552.91
Co., Ltd.
Hangzhou Amblem Kitchen Ware
Accounts payable 0.00 1,841.61
Co., Ltd.
Accounts payable Hangzhou Bonyee Daily Necessity 1,343,881.12 0.00
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Technology Co., Ltd.
Hangzhou Nbond Nonwovens Co.,
Accounts payable 41,261.10 0.00
Ltd.
Hangzhou Amblem Kitchen Ware
Deposit received 0.00 139,622.44
Co., Ltd.
Other accounts Hangzhou Yuhang Yaguang Spray
200,000.00 200,000.00
payable Coating Factory
Other accounts Hangzhou Bonyee Daily Necessity
20,000.00 0.00
payable Technology Co., Ltd.
XIII. Share-based Payment
N/A
XIV. Commitments and Contingencies
1. Major commitments
As of the day of the Financial Statements submission, the Company has no other major events after the balance sheet date to disclose.
2. Contingencies
(1) Major contingencies on the balance sheet date
As of June 30, 2020, the Company has no major contingencies that need to be disclosed
(2) It's also necessary to make it clear hereby that the Company has no major contingencies that need to
be disclosed.
The Company has no major contingency that need to be disclosed.
XV. Events After the Balance Sheet Date
N/A
XVI. Other Significant Events
N/A
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XVII. Notes to Main Items of the Financial Statements of the Parent Company
1. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
Ending balance Beginning balance
Bad debt
Book balance Book balance Bad debt provision
provision
Type Book Book
Percent Percent
Percent
Amoun Amoun age of value Amoun Percent Amoun age of value
age
t t provisi t age (%) t provisi
(%)
on on
Including:
Accounts
782,92 741,10 743,80
receivable with a 100.00 41,821, 100.00 39,557, 704,246,
3,881.3 2,670.9 4,053.6
collective bad debt % 210.41 % 168.87 884.81
5 4 8
provision
Including:
Accounts
receivable grouped 27,514, 27,514, 22,246, 22,246,7
3.51% 0.00 0.00% 2.99% 0.00 0.00%
according to 867.21 867.21 710.00 10.00
related parties
Multiple accounts
receivable which
are grouped by
expected credit 755,40 713,58 721,55
96.49 41,821, 39,557, 682,000,
loss based on their 9,014.1 5.54% 7,803.7 7,343.6 97.01% 5.48%
% 210.41 168.87 174.81
age characteristics 4 3 8
and with a
collective bad debt
provision
782,92 741,10 743,80
100.00 41,821, 100.00 39,557, 704,246,
Total 3,881.3 2,670.9 4,053.6
% 210.41 % 168.87 884.81
5 4 8
Collective bad debt provision: for multiple accounts receivable grouped by expected credit loss based on their age characteristics,
their bad debts are provided for collectively.
In RMB
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Ending balance
Name
Book balance Bad debt provision Percentage of provision
Within 1 year 719,348,374.03 35,967,418.70 5.00%
1-2 years 28,060,031.49 2,806,003.15 10.00%
2-3 years 5,285,512.82 1,057,102.56 20.00%
3-4 years 1,119,460.29 559,730.15 50.00%
4-5 years 823,398.29 658,718.63 80.00%
Over 5 years 772,237.22 772,237.22 100.00%
Total 755,409,014.14 41,821,210.41 --
Collective bad debt provision: for multiple accounts receivable grouped according to related parties, their bad debts are provided for
collectively.
In RMB
Ending balance
Name
Book balance Bad debt provision Percentage of provision
Accounts receivable grouped
27,514,867.21 0.00 0.00%
according to related parties
Total 27,514,867.21 --
Disclosed based on the age of accounts receivable
In RMB
Age Ending balance
Within 1 year (including 1 year) 746,863,241.24
1-2 years 28,060,031.49
2-3 years 5,285,512.82
More than 3 years 2,715,095.80
3-4 years 1,119,460.29
4-5 years 823,398.29
More than 5 years 772,237.22
Total 782,923,881.35
(2) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
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Amount of change in the current period
Beginning
Type Recovery or Ending balance
balance Provision Write-off Others
reversal
Bad debt
provision for
39,557,168.87 2,264,041.54 0.00 0.00 41,821,210.41
accounts
receivable
2. Other receivables
In RMB
Item Ending balance Beginning balance
Dividends receivable 14,295,039.38
Other receivables 51,740,494.70 91,471,115.57
Total 51,740,494.70 105,766,154.95
(1) Classification of dividends receivable
In RMB
Project (or investee) Ending balance Beginning balance
Suzhou Industrial Park Ruican Investment
14,295,039.38
Enterprise (Limited Partnership)
Total 14,295,039.38
(2) Other receivables
1) Classification of other receivables by nature
In RMB
Initial book balance at the beginning of
Nature Book balance at the end of the period
the period
Collections by a third party 19,688,144.56 63,604,415.88
Security/guarantee deposits 33,865,499.67 32,288,103.90
Related transactions 4,064,000.00 4,064,000.00
Petty cash 2,871,267.31 1,572,298.56
Withholdings 4,197,669.32 2,174,992.54
Factoring 2,221,438.07 0.00
Others 405,680.00 457,769.11
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Total 67,313,698.93 104,161,579.99
2) Bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit loss over
Expected credit Expected credit loss over
Bad debt provision the entire duration Total
loss over the next the entire duration (with
(without credit
12 months credit impairment)
impairment)
Balance on January 1,
2020 in the current —— —— —— ——
period
Provision in the current
2,882,739.81 2,882,739.81
period
Balance on June 30,
15,573,204.23 15,573,204.23
2020
Disclosed based on the age of accounts receivable
In RMB
Age Ending balance
Within 1 year (including 1 year) 36,430,795.72
1-2 years 7,731,566.55
2-3 years 3,027,193.49
More than 3 years 20,124,143.17
3-4 years 15,384,714.77
4-5 years 293,583.46
More than 5 years 4,445,844.94
Total 67,313,698.93
3) Bad debt provision, and its recovery or reversal in the current period
Bad debt provision in the current period:
In RMB
Amount of change in the current period
Beginning
Type Recovery or Ending balance
balance Provision Write-off Others
reversal
Bad debt
12,690,464.42 2,882,739.81 0.00 0.00 15,573,204.23
provision for
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other
receivables
Total 12,690,464.42 2,882,739.81 15,573,204.23
4) Top five debtors with the biggest ending balances of other accounts receivable
In RMB
Proportion in the
total ending
Ending balance of
Unit Nature Ending balance Age balance of other
bad debt provision
accounts
receivable
Security/guarante
Unit 1 14,778,000.00 3-4 years 21.95% 7,389,000.00
e deposits
Collections by a
Unit 2 10,028,874.85 Within 1 year 14.90% 501,443.74
third party
Related
Unit 3 4,064,000.00 Over 5 years 6.04% 4,064,000.00
transactions
Collections by a
Unit 4 3,674,304.44 Within 1 year 5.46% 183,715.22
third party
Security/guarante
Unit 5 3,000,000.00 1-2 years 4.46% 300,000.00
e deposits
Total -- 35,545,179.29 -- 52.81% 12,438,158.96
3. Long-term equity investment
In RMB
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
246,905,933.73 20,400,000.00 226,505,933.73 246,905,933.73 20,400,000.00 226,505,933.73
subsidiaries
Investment in
joint ventures
1,929,118.33 0.00 1,929,118.33 4,168,338.79 0.00 4,168,338.79
and associated
companies
Total 248,835,052.06 20,400,000.00 228,435,052.06 251,074,272.52 20,400,000.00 230,674,272.52
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(1) Investment in subsidiaries
In RMB
Beginning Increase/decrease in the current period Ending balance
Ending balance
Investee balance (book Additional Negative Impairment of impairment
Others (book value)
value) investment investment provision provision
Shengzhou Kinde
Intelligent Kitchen 162,320,000.00 0.00 0.00 0.00 162,320,000.00
Appliance Co., Ltd.
Hangzhou MingQi
51,901,780.81 0.00 0.00 0.00 51,901,780.81
Electric Co., Ltd.
De Dietrich
Household
Appliances Trading 630,900.00 0.00 0.00 0.00 630,900.00 20,400,000.00
(Shanghai) Co.,
Ltd.
Shanghai Robam
Electric Appliance 5,838,272.10 0.00 0.00 0.00 5,838,272.10
Sales Co., Ltd.
Beijing Robam
Electric Appliance 5,814,980.82 0.00 0.00 0.00 5,814,980.82
Sales Co., Ltd.
Total 226,505,933.73 226,505,933.73 20,400,000.00
(2) Investment in joint ventures and associated companies
In RMB
Increase/decrease in the current period
Investm
ent Cash Ending
Adjust
Beginni profit dividen balance
ment of Provisi Ending
ng Additio Negativ or loss Other ds or of
Investo other on for balance
balance nal e recogni changes profits impair
r compre impair Others (book
(book investm investm zed in declare ment
hensive ment value)
value) ent ent using equity d and provisi
income loss
the distribu on
s
equity ted
method
I. Joint venture
De 4,168,3 0.00 0.00 -2,239, 0.00 0.00 0.00 0.00 1,929,1
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Dietric 38.79 220.46 18.33
h Trade
(Shang
hai)
Co.,
Ltd.
Sub-tot 4,168,3 -2,239, 1,929,1
0.00 0.00 0.00 0.00 0.00 0.00
al 38.79 220.46 18.33
4,168,3 2,239,2 1,929,1
Total 0.00
38.79 20.46 18.33
4. Operating income and operating cost
In RMB
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 2,922,262,959.98 1,329,831,191.10 3,187,683,518.21 1,477,699,188.18
Other businesses 58,651,720.79 19,754,013.25 72,109,808.46 29,798,963.74
Total 2,980,914,680.77 1,349,585,204.35 3,259,793,326.67 1,507,498,151.92
5. Investment income
In RMB
Amount incurred in the
Item Amount incurred in the previous period
current period
Income from long-term equity investment
-2,239,220.46 69,197.95
measured by the equity method
Income from investments in financial assets held
20,859,653.65 36,895,138.71
for trading
Dividend income obtained during other equity
0.00 0.00
instrument investments
Total 18,620,433.19 36,964,336.66
XVIII. Supplementary Information
1. Breakdown of non-recurring profits and losses in the current period
√ Applicable □ Not Applicable
In RMB
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Item Amount Description
Gains and losses from disposal of non-current assets 11,388.98
Government grants included into current profit or oss (except for the government grants closely
73,756,234.28
related to the Company's business whose amount is stipulated in state standards)
Profit and loss from entrusting others to invest or manage assets 0.00
Non-operating incomes and expenses other than the above-mentioned items -1,138,951.47
Less: Affected amount of income tax 11,320,206.38
Affected amount of minority shareholders’ equity 311,648.17
Total 60,996,817.24 --
It is necessary to explain the non-recurring gains or losses determined based on definitions in Explanatory Announcement No. 1 on
Information Disclosure for Publicly Listed Companies — Non-recurring Profit & Loss (referred to as “Announcement No.1”)and the
reason why non-recurring profits or losses listed in the Announcement No. 1 are determined as recurring profits or losses.
□ Applicable √ Not Applicable
2. Return on equity and earnings per share (EPS)
EPS
Weighted average
Profit within the Reporting Period Basic EPS Diluted EPS
return on equity
(RMB/share) (RMB/share)
Net profit attributable to common stockholders of
8.64% 0.65 0.65
the Company
Net profit attributable to common shareholders of
the Company after deducting non-recurring profits 7.78% 0.58 0.58
and losses
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profits and net assets in the Financial Report disclosed as per the IAS and CAS;
□ Applicable √ Not Applicable
(2) Differences of net profits and net assets in the Financial Report disclosed as per the foreign accounting
standard and CAS;
□ Applicable √ Not Applicable
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(3) Explanation of the reasons of accounting data differences under domestic and foreign accounting
standards shall be made, and where data audited by an overseas audit institution has been adjusted based
on the differences, the name of the overseas institution shall be indicated.
4. Others
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Chapter 12 Documents Available for Future Inspection
I. Financial statements signed and sealed by the legal representative, the person in charge of accounting of the
Company, and the person in charge of the accounting firm.
II. Original copies of documents and announcements of the Company published in the newspaper designated by
China Securities Regulatory Commission during the Reporting Period.
III. The Semi-Annual Report 2020 signed by the legal representative on behalf of the Company.
IV. Other documents.
V. The preparation location of the above-mentioned documents available for future inspection: Board Office of
the Company.
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