Full Text of Semi-Annual Report 2021 of Hangzhou Robam Appliances Co., Ltd.
Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2021
August 2021
Full Text of Semi-Annual Report 2021 of Hangzhou Robam Appliances Co., Ltd.
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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Full Text of Semi-Annual Report 2021 of Hangzhou Robam Appliances Co., Ltd.
Contents
Chapter 1 Important Notes, Contents and Interpretations ..........................................................................................1
Chapter 2 Company Profile and Major Financial Indicators......................................................................................5
Chapter 3 Management Discussion and Analysis ..........................................................................................................8
Chapter 4 Corporate Governance ................................................................................................................................. 16
Chapter 5 Environmental and Social Responsibilities ............................................................................................... 18
Chapter 6 Significant Matters ........................................................................................................................................ 19
Chapter 7 Changes in Shares and Shareholders ......................................................................................................... 25
Chapter 8 Preferred Shares ............................................................................................................................................ 30
Chapter 9 Bonds ............................................................................................................................................................... 31
Chapter 10 Financial Report ........................................................................................................................................... 32
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Full Text of Semi-Annual Report 2021 of Hangzhou Robam Appliances Co., Ltd.
Documents available for reference
I. Financial statement signed by the legal representative, the person in charge of accounting
and the accounting firm principal and affixed with seal.
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 2021 signed by the legal representative.
IV. Other information.
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Interpretations
Item refer(s) to Contents
The Company, Company, Robam Appliances refer to Hangzhou Robam Appliances Co., Ltd.
MingQi refers to Hangzhou MingQi Electric Co., Ltd.
Robam Appliances, MingQi, Beijing Robam
The Group refers to Appliances Sales Co., Ltd., Shanghai Robam
Appliances Sales Co., Ltd., Kinde Intelligent
refers to Hangzhou Robam Industrial Group Co., Ltd.,
Robam Group
controlling shareholder of the Company
The reporting period refers to The first half of 2021
Shengzhou Kinde Intelligent Kitchen Appliances
Kinde refers to
Co., Ltd.
AVC refers to Beijing All View Cloud Data Technology Co., Ltd.
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Full Text of Semi-Annual Report 2021 of Hangzhou Robam Appliances Co., Ltd.
Chapter 2 Company Profile and Major Financial Indicators
I. Company Profile
Stock abbreviation Robam Stock code 002508
Stocks traded on Shenzhen Stock Exchange
Chinese name of the Company 杭州老板电器股份有限公司
Short Chinese name of the Company 老板电器
(if any)
Legal representative of the Company Ren Jianhua
II. Contact Person and Contact Information
Secretary of the Board of Directors Representative of securities affairs
Name Wang Gang Jiang Yu
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 2020.
2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□ Applicable √ Not Applicable
The location for filing the semi-annual report of the Company. For details, please refer to the
Annual Report 2020.
IV. Key Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years?
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□ Yes √ No
The reporting period The same period last year YoY change
Operating Income (RMB) 4,326,082,031.62 3,211,172,335.79 34.72%
Net profit attributable to shareholders 790,388,759.79 612,317,249.29 29.08%
of the listed company (RMB)
Net profit attributable to shareholders 746,385,371.21 551,320,432.05 35.38%
of the listed company after deducting
non-recurring gains/losses (RMB)
Net cash flow from operating 530,226,316.50 407,687,133.56 30.06%
activities (RMB)
Basic earnings per share (EPS) 0.83 0.65 27.69%
(RMB/share)
Diluted EPS (RMB/share) 0.83 0.65 27.69%
Weighted average return on net assets 9.49% 8.64% An increase of
0.85%
End of the reporting period End of last year Change
Total assets (RMB) 13,072,209,609.54 12,457,568,276.25 4.93%
Net assets attributable to shareholders 8,146,337,365.16 8,050,626,815.35 1.19%
of 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.
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
-2,037,766.59
part written-off with provision for asset impairment accrued)
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Government subsidy included in current gains and losses (except
the government subsidy closely related to the Company’s
55,099,765.01
business and enjoyed by quota or ration in accordance with the
unified national standard)
Other gain/loss items conforming to the definition of non-
-393,630.96
recurring gains/losses
Less: Affected amount of income tax 8,184,399.67
Affected amount of minority shareholders’ equity (after tax) 480,579.21
Total 44,003,388.58 --
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Chapter 3 Management Discussion and Analysis
I. Main Businesses during the Reporting Period
In the first half year of 2021, the kitchen appliances industry continued its recovery, with rapid
growth in all channels. In terms of the retail channel, the offline consuming willingness of the
consumers increased significantly. 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 and gas stoves, registered 19.4% and 12.2%
respectively, reversing the trend of sharp decline in three consecutive years and achieving double -
digit growth. In terms of the e-commerce channels, online consumption habits continue, driving
high growth in online consumption. As shown in AVC monthly data report based on online retail
monitoring (“AVC Online Report”), the year-on-year (YoY) growth of the retail sales of the kitchen
appliances package registered 24.3%. In terms of the engineering channel, as shown in AVC 2021
H1 China Range Hood and Stove Market Summary Report (“AVC Fine Decoration Report”), from
January to June 2021, the ratio of finely decorated houses was 32%, and the matching rate of range
hood and stove was 97.3% and 95.9% respectively. The matching rate of built-in combi-steam oven
and built-in dishwasher was 2.5% and 17.6%, with YoY growth of 1.7% and 8.1% respectively.
The popularity rate and package rate of fine decoration continued to rise with huge room for future
improvements.
As a leader in the industry, the Company closely adhered to the annual operation philosophy of
"building dreams and moving forward amidst difficulties", firmly seized the opportunity given by
industry concentration, steadily increased its share in the industry of traditional kitchen appliances
and made rapid breakthroughs in new kitchen categories. In the first half year of 2021, the
Company achieved operating revenue of RMB 4.326 billion, with a YoY increase of 34.72%, and
net profit attributable to shareholders of the listed company was RMB 790 million, with a YoY
increase of 29.08%, which were both significantly higher than the industry average level. As of
June 30, 2021, 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 Gas Disinfection Built-in combi- Built-in electric Built-in Built-in
hoods stove cabinet steam oven steam oven electric oven dishwasher
30.50% 29.50% 22.10% 34.00% 21.60% 39.80% 18.10%
1 1 2 1 2 2 2
As of June 30, 2021, according to AVC Online Report, the market shares and market rankings of
the Company’s main product categories in terms of online retail sales are shown in the following
table:
Kitchen 2-piece package
Range Gas Built-in combi- Built-in electric Built-in
appliance of range hood and
hoods stove steam oven steam oven dishwasher
package stove
28.50% 30.00% 17.10% 9.8% 13.50% 22.5% 6.3%
1 1 1 3 3 2 5
As of May 31, 2021, according to AVC Fine Decoration Report, the market share of Robam range
hoods in the fine decoration channel was 36.5%, ranking No.1 in the industry.
In the first half year of 2021, the Company continued to increase its investment in technology
research and development. The performance and appearance of products in each category group
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continued to be upgraded, and the "Creating New Chinese Kitchen" program was fully implemented.
The Company released the standards for the 5 th generation of large suction hood, carried out
comprehensive upgrade of hoods in terms of smart judgment, double collection, direct suction,
frequency conversion and wash-free, launched Robam dual-chamber large suction hood series, and
officially introduced the 5th generation of large suction hood to Chinese kitchen. The Company
released the quality flame industry standard of gas stove, adopted innovative bi-directional and
double internal flame combustion structure as well as double fixed temperature plate, and launched
Robam purple flame great fire gas stove 9B515. The Company introduced new upgraded built-in
combi-steam oven series and Robam frying-steaming-baking ovenCQ926, integrating frying,
steaming and baking, equipped with Pengpai Great Steam System and realizing multi -stage
combined cooking of steaming and baking. In addition, the Company released the Chinese Kitchen
Dishwasher Technical Specifications and launched Robam Power Washing Dishwasher WB755,
which is more suitable for Chinese cabinet and Chinese tableware placement and applies the four -
layers three-way spraying technology to overcome the difficulty of washing and cleaning heavy oil
and heavy dirt and realize washing, disinfection, drying and storage in one step. In the first half year
of 2021, the Company applied for 287 patents, including 48 invention patents, and 254 patents were
granted, including 6 invention patents. In addition, the Company led the development of four
standards such as the Noise and Quality Evaluation Grade of Range Hoods and the Combi-steam
Oven; The Company participated in the development of 11 standards such as the Range Hoods and
the Technical Requirements and the Test Methods of Antibacterial and Degerming Function for
Dishwashers. The Company won the first prize of Science and Technology Progress of China
National Light Industry Council, the second prize of Award for Scientific and Technological
Advancement of Zhejiang Province, the second prize of Quality Technology Award of China
Association for Quality and other awards.
In the first half year of 2021, in terms of the marketing, Robam deepened the high-end
positioning of the brand, relied on a rich product matrix and took advantage of multiple channels to
provide consumers with professional kitchen appliances solutions. In terms of the retail channel, the
Company strengthened the "Robam Four-piece" package sales strategy, focused on improving the
scale and share of range hoods, and empowered its products of the second and third categories; the
Company strengthened the flat construction of KA and specialty store system, and implemented
digital reform of marketing to improve efficiency. In terms of the e-commerce channels, the
Company consolidated the advantages as one of the mainstream e-commerce platforms through
continuous update and iteration of new products; the Company exploited new media platforms and
carried out content-based marketing to strengthen the viscosity of brand with customers Robam
combined marketing with services, and grabbed the share in the stock market. In terms of the
engineering channel, the Company continued to optimize the customer and product structure,
promoted the kitchen appliances package solutions for refine decoration, and further popularized
the application of central range hoods. As regards the innovation channel, the Company worked
more closely with leading whole house customization companies and home decoration companies,
expanded the scale of long-tail customers, seized the front-end traffic entrance, and
comprehensively improved the conversion rate and matching rate. For the overseas channel, the
Company strengthened its global layout, actively responded to the risk of overseas outbreak and
steadily promoted the internationalization of the brand.
In the first half year of 2021, in terms of the production, the Company was committed to
exploring a new pathway for the transformation and upgrading of Chinese high-end kitchen
appliances manufacturing and creating one of the most competitive manufacturing benchmarks for
the comprehensive competitiveness of Chinese manufacturing industry. The data-driven Robam
Jiutian Central Digital Platform closely connected manufacturing with users and realized the
integration of industrial internet and consumer internet systems. Robam digital cooking chain
centered on Chinese cooking curve, collected cooking scenarios and user data to achieve zero
distance between R&D and users and zero distance between manufacturing and users. Wit h the
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vision of "zero emission, zero inventory and zero distance", Robam Lingdian Manufacturing
System took data as the core to drive people and equipment and achieve the ultimate optimization
of resource allocation efficiency. Robam Future Factory is the first intelligent unmanned factory in
Chinese kitchen appliances industry, and the project is one of the first "future factories" in Zhejiang
Province. In addition, the building of Maoshan Intelligent Manufacturing Park Project is well
underway. After completion, it 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.
In the first half year of 2021, in terms of the brand, Robam insisted on the concept of “Creating
New Chinese Kitchen” to develop into the No. 1 brand in the market of Chinese high-end kitchen
appliances. At for the hardware, the Company reinforced the standard solution of "New Chinese
Kitchen, Robam 4-piece", and continuously carried out the iteration and upgrading of its product
matrix of range hoods, gas stove, combi-steam oven and dishwasher, etc. In terms of the software,
Robam established the world’s largest research library of Chinese AI cooking curves, and set up a
joint laboratory of cooking digitization together with China Household Electric Appliance Research
Institute to create, share, record and restore the taste of Chinese kitchens with digitization and
enhance the soft power of kitchen appliances. As for activities, the Company successfully held
AWE brand exhibition as well as China Dishwasher Festival and held the news conference of New
Chinese Kitchen Plan. The Company hired Xu Kai as its new kitchen spokesman, invited CCTV,
academicians and experts to learn more about the brand of Robam, carried out many campaigns
such as Chinese Trendy Dinner, Creative Peach Banquet and AI Feast through multiple channels,
and deepened Robam family banquet, Longing for Kitchen Festival and other thematic activities IP.
In addition, Robam was the exclusive title sponsor of the reality show “It Sounds Incredible” and
served as the delicious food creativity officer of the TV shows of “The Pursuit of Happiness” to
give an in-depth interpretation of the brand value of culinary creativity. It became the exclusive
household kitchen appliance supplier for 2022 Asian Games held in Hangzhou to facilitate the
development of urban Asian Games and brand Asian Games, and help promote the Chinese
culinary culture.
In the first half year of 2021, MingQi actively explored the new retail model for integrated
categories and integrated kitchens, and strived to achieve online and offline empowerment and
create a new retail operation position. Kinde focused on product innovation and released the dual
chamber integrated stove series to meet more cooking needs. Upon completion, the industrialization
project of the intelligent integrated kitchen ecology will further improve the R&D and production
capabilities of integrated kitchen appliances.
In the first half year of 2021, the Company continued to be recognized by the capital market in
terms of corporate governance, internal management, shareholder returns, etc. It won a large
number of awards, such as the "Best Board of Directors Award of Mainboard", "Best Investor
Relations Award of Mainboard" and "Best Board Secretary Award of Mainboard" at the “Tianma
Award - The 12th Chinese Listed Company Investor Relations Selection” of Securities Times, to
name just a few. In addition, the Company received an A grade (excellent) again in the annual
information disclosure assessment of 2020, and has received the highest rating from Shenzhen
Stock Exchange for information disclosure assessment for eight consecutive years. The Company
has been adhering to the standard operation, and will continue to make efforts in the kitchen field
and facilitate value investment.
II. Analysis of Core Competitiveness
There is NO material 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
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shown in the Annual Report 2020.
III. Analysis of Main Business
Year-on-year changes in key financial data
In RMB
The same period YOY
The reporting period Reason for change
last year change
Operating income 4,326,082,031.62 3,211,172,335.79 34.72% During the reporting period,
Operating costs 1,887,148,054.31 1,450,728,576.58 30.08% the Company’s operations
at multiple categories and
Sale expenses 1,270,526,179.87 892,679,297.76 42.33% channels had improved
significantly compared with
the same period last year,
and the operating costs, sale
Administrative
149,993,109.17 116,085,321.98 29.21% expenses and administrative
expenses expenses had increased
compared with the same
period last year.
Financial expense -47,926,579.43 -47,782,493.84 0.30%
Income tax expense 143,489,604.07 111,490,061.67 28.70%
R&D input 143,433,206.12 117,824,032.62 21.74%
During the reporting period,
the company’s operating
conditions improved
Net cash flow from
530,226,316.50 407,687,133.56 30.06% substantially compared with
operating activities
the same period last year,
and the operating cash flow
increased.
Mainly due to the increase
in the amount of bank
Net cash flow from
214,520,601.79 352,943,572.24 -39.22% financial products
investment activities
purchased during the
reporting period.
Net cash flow from
-489,082,997.19 -474,512,025.00 3.07%
financing activities
Net increase in cash
255,399,364.87 286,659,233.75 -10.90%
and cash equivalents
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not Applicable
No major changes on profit composition or profit resources occurred in reporting period
Composition of operating income
In RMB
The reporting period The same period last year
% of % of YOY change
Amount Amount
operating operating
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income income
Total operating income 4,326,082,031.62 100% 3,211,172,335.79 100% 34.72%
By industry
Kitchen and bathroom
4,225,828,188.22 97.68% 3,146,865,561.70 98.00% 34.29%
appliances
Other operating income 100,253,843.40 2.32% 64,306,774.09 2.00% 55.90%
By product
Category 1
Incl: Range hood 2,091,007,767.04 48.35% 1,650,449,733.67 51.40% 26.69%
Gas stove 1,045,144,595.58 24.16% 758,465,499.75 23.62% 37.80%
Disinfection
239,178,201.99 5.53% 228,310,465.33 7.11% 4.76%
cabinet
Category 2
Incl: All-purpose oven 262,228,450.48 6.06% 133,537,304.02 4.16% 96.37%
Steam oven 80,562,429.90 1.86% 85,061,189.53 2.65% -5.29%
Baking oven 67,544,092.31 1.56% 46,615,942.85 1.45% 44.89%
Category 3
Incl: Dishwasher 170,976,797.67 3.95% 68,865,113.63 2.14% 148.28%
Water purifier 24,371,501.10 0.56% 24,211,752.65 0.75% 0.66%
Water heater 48,894,607.25 1.13% 19,183,739.79 0.60% 154.88%
Other
Integrated stove 143,366,801.65 3.31% 98,976,247.02 3.08% 44.85%
Other small
52,552,943.25 1.21% 33,188,573.46 1.03% 58.35%
appliances
Other operating
100,253,843.40 2.32% 64,306,774.09 2.00% 55.90%
income
By region
East China-Main
2,054,958,956.16 47.50% 1,543,503,690.71 48.07% 33.14%
Products
East China-Others 100,253,843.40 2.32% 64,306,774.09 2.00% 55.90%
South China 533,053,014.50 12.32% 451,116,850.34 14.05% 18.16%
Central China 390,795,590.34 9.03% 301,333,669.68 9.38% 29.69%
North China 457,558,221.06 10.58% 292,319,457.85 9.10% 56.53%
Northeast China 229,898,842.06 5.31% 169,670,983.55 5.28% 35.50%
Northwest China 218,086,613.97 5.04% 135,468,027.41 4.22% 60.99%
Southwest China 317,765,047.05 7.35% 242,691,912.60 7.56% 30.93%
Overseas 23,711,903.08 0.55% 10,760,969.56 0.34% 120.35%
Industries, products and regions accounting for more than 10% of the Company’s operating income
or profit
√ Applicable □ Not Applicable
In RMB
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YoY change
Gross YoY change in YoY change in
Operating income Operating costs in the gross
margin operating income operating costs
margin
By industry
Kitchen and
bathroom 4,225,828,188.22 1,861,343,526.44 55.95% 34.29% 30.17% 1.39%
appliances
By product
Range
2,091,007,767.04 874,043,318.91 58.20% 26.69% 27.35% -0.21%
hoods
Gas stove 1,045,144,595.58 411,330,038.38 60.64% 37.80% 27.33% 3.23%
By region
East China 2,054,958,956.16 861,626,488.59 58.07% 33.14% 25.30% 2.62%
South China 533,053,014.50 251,004,993.05 52.91% 18.16% 17.54% 0.25%
North China 457,558,221.06 190,253,209.81 58.42% 56.53% 48.65% 2.20%
IV. Analysis of Non-core Business
□ Applicable √ Not Applicable
V. Analysis of Assets and Liabilities
1. Significant changes in assets composition
In RMB
End of the reporting period End of last year Note on
Change in
% of total % of total significant
Amount Amount percentage
assets assets changes
Cash and cash
4,190,050,005.34 32.05% 3,921,052,700.31 31.48% 0.57%
equivalents
Accounts
988,037,922.96 7.56% 1,008,235,946.40 8.09% -0.53%
receivable
Inventory 1,578,814,810.48 12.08% 1,386,089,344.84 11.13% 0.95%
Investment real
18,576,015.36 0.14% 2,591,001.84 0.02% 0.12%
estate
Long-term equity
2,012,699.52 0.02% 3,452,769.59 0.03% -0.01%
investment
Fixed assets 922,791,998.04 7.06% 824,978,354.71 6.62% 0.44%
Construction in 515,737,483.33 3.95% 463,424,647.46 3.72% 0.23%
process
Right of use assets 20,079,054.20 0.15% 0.00 0.00% 0.15%
Short-term 11,913,223.08 0.09% 6,076,177.30 0.05% 0.04%
borrowings
Contract liabilities 1,032,445,046.81 7.90% 949,591,228.35 7.62% 0.28%
Lease liabilities 18,756,723.23 0.14% 0.00 0.00% 0.14%
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2. Main overseas assets
□ Applicable √ Not Applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not Applicable
4. Restricted asset rights by the end of the reporting period
N/A
VI. Analysis of Investment
1. Overview
□ Applicable √ Not Applicable
2. Major equity investments obtained during the reporting period
□ Applicable √ Not Applicable
3. Major ongoing non-equity investments during the reporting period
□ Applicable √ Not Applicable
4. Financial asset investment
(1) Securities investment
□ Applicable √ Not Applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□ Applicable √ Not Applicable
The Company had no derivatives investment during the reporting period.
VII. Sale of Major Assets and Equities
1. Sale of major assets
□ Applicable √ Not Applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
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□ Applicable √ Not Applicable
VIII. Analysis of Main Holding and Joint-stock Companies
□ Applicable √ Not Applicable
The Company has no information on main holding and joint-stock companies that should be
disclosed during the reporting period.
IX. Structured Entities Controlled by the Company
□ Applicable √ Not Applicable
X. Risks facing and countermeasures taken by the Company
(1) Risk of fluctuations in the real estate market
The Company is long engaged in the kitchen business, offering integrated solutions for built-in
kitchen appliances, such as range hoods, gas stoves, disinfection cabinets, combi-steam oven, steam
ovens, baking ovens, dishwashers, water purifiers, integrated stoves, purified sinks, etc. The
demands for kitchen appliances are generated in the kitchen renovation after the purchase of the
house, with certain "decoration" and "furniture" attributes. At present, consumers are still mainly
buying new kitchen appliances rather than renewing their existing kitchen appliances at home, so
their demand is affected by the fluctuation of the real estate market. The Company has certain anti-
fluctuation ability by virtue of its market leadership, although fluctuations in the real estate market
will still have an impact on the Company’s operating results.
(2) Risk of price fluctuation of raw materials
The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet,
copper and glass, etc., whose price fluctuations will directly affect the cost of the Company’s
products and in turn have an impact on its profitability. From the fourth quarter of 2020 to the first
half of 2021, the prices of major raw materials have increased significantly, affecting the
Company’s operating results. If the prices of major raw materials continue to be high or continue to
rise in the second half of 2021, it will have a greater impact on the Company’s operating results.
(3) Risk of intensified market competition
In recent years, due to the recession in demand caused by real estate regulation, the entry of
comprehensive home appliance brands, Internet brands and other companies, the market
competition in the kitchen appliances industry has become increasingly fierce, and the
intensification of market competition will have a certain impact on the Company’s operating results.
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Chapter 4 Corporate Governance
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 Date of Date of
of attending Resolutions
meeting meeting meeting disclosure
investors
For details, please refer to the
relevant formulation disclosure
media and the Announcement of
2020 Annual Annual General
May 19, May 20, Resolutions of the 2020
General Meeting Meeting of 65.90%
2021 2021 Extraordinary General Meeting of
of Shareholders Shareholders
Shareholders of Robam Appliances
(Announcement No. 2021-037)
published on www.cninfo.com.cn.
For details, please refer to the
relevant formulation disclosure
The first
media and the Announcement of
extraordinary Extraordinary April
May 6, Resolutions of the 1st Extraordinary
general meeting general meeting 54.62% 30,
2021 General Meeting of Shareholders of
of shareholders of shareholders 2021
Robam Appliances in 2021
in 2021
(Announcement No. 2021-031)
published on www.cninfo.com.cn.
2. Preferred shareholders with voting rights recovered requested to convene an
extraordinary general meeting of shareholders
□ Applicable √ Not Applicable
II. Changes in Directors, Supervisors and Senior Manage ment
□ 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 2020.
III. 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 2021.
IV. Imple mentation of the Equity Incentive Plan, Employee Stock Ownership Plan or other
Employee Incentives
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√ Applicable □ Not Applicable
1. On April 14, 2021, the Company held the Fourth Meeting of the Fifth Session of the
Board of Directors, during which the Proposal on 2021 Stock Option Incentive Plan (Draft) of the
Company and Its Summary and its Summary and other related proposals were deliberated and
approved, and the independent directors expressed their independent opinions on and approved the
matters related to the Company’s stock option incentive plan. The Fourth Meeting of the Fifth
Session of the Board of Supervisors of the Company deliberated and approved the above-mentioned
proposal and expressed its concurring opinion. The Company disclosed the above matters on April
15, 2021.
2. From April 15, 2021 to April 24, 2021, the Company internally disclosed the names and
titles of the incentive targets of the stock option incentive plan. On April 27, 2021, the Company’s
Board of Supervisors published the Review Opinions of the Board of Supervisors on the List of
Incentive Targets of the Stock Option Incentive Plan in 2021 and Explanation on the Publicity. On
the same day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the
Company’s Shares by Insiders and Incentive Targets of the Stock Option Incentive Plan in 2021.
3. On April 30, 2021, the Company held the first extraordinary general meeting of
shareholders in 2021, and deliberated and adopted the Proposal on 2021 Stock Option Incentive
Plan (Draft) of the Company and Its Summary and its Summary and other related proposals. The
plan was approved by the first extraordinary general meeting of shareholders in 2021, and the Board
of Directors was authorized to determine the stock option grant date when stock option will be
granted to the incentive targets when they are eligible and all matters relevant to the grant of stock
option shall be handled.
4. On May 10, 2021, the Sixth Meeting of the Fifth Session of the Board of Directors and the
Sixth Meeting of the Fifth Session of the Board of Supervisors of the Company deliberated and
approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of
Supervisors verified the list of incentive targets again and expressed its agreement, and the
independent directors of the Company expressed their independent opinion on it.
5. On June 9, 2021, the Company completed the registration of stock option grant under the
Stock Option Incentive Plan in 2021. Please refer to the Announcement of Completion of
Registration of Stock Option Grant under the Stock Option Incentive Plan in 2021 (Announcement
No.: 2021-041) for details.
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Chapter 5 Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries are the key pollution-discharging units announced
by the environmental protection authorities.
□ Yes √ No
II. Social Responsibility
The Company actively responds to the national goal of achieving a moderately prosperous
society by 2020, as well as the call to achieve rural revitalization and win the anti -poverty war, and
strives to optimize and integrate resources and create the greatest synergy to achieve targeted
poverty alleviation. In the first half of 2021, Robam Charity Foundation carried out projects such as
serious illness assistance, hardship assistance, poverty alleviation in Ningxian County and Diebu
County in Gansu Province, poverty relief in Tianjin Jinnan District and charity assistance in poor
villages in Badong County, with donations totaling more than RMB 500,000. In addition, on every
March 5th Lei Feng Remembrance Day, Children’s Day, Double Ninth Festival and other holidays,
Robam also actively organizes public welfare activities to send warmth and care to the general
public, children and elderly people of no family, taking practical action to repay society and being a
well-respected enterprise.
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Chapter 6 Significant Matters
I. Commitme nts 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
Committing Commitment Content of Time of Term of
Commitment Performance
Party Type Commitment Commitment Commitment
Upon the
expiration of the
above 36-month
restricted sales
period, the shares
transferred by any
of them each year
Directors,
shall not exceed
supervisors
25% of the total
and senior Commitment
shares of the
management on
Company held November Long-term Strict
directly and restriction
directly or 23, 2010 commitment performance
indirectly for sales of
indirectly by
holding shares
him/her; and shall
shares of the
not transfer the
Company
shares of the
Company held
directly or
indirectly by
him/her within half
Commitment year after leaving
made during the Company
initial public 1. The Company/I
offering or and other
re-financing companies under
the Company’s/my
control do not and
will not, directly or
indirectly engage
in any activities
Hangzhou which are in
Robam Commitment horizontal
Industrial on avoiding competition with November Long-term Strict
Group Co., horizontal existing and future 23, 2010 commitment performance
Ltd.: Ren competition businesses of
Jianhua ROBAM and its
holding
subsidiaries; 2. If
any business
opportunities
obtained from any
third party by the
Company/I and the
Company/other
companies under
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my control
constitute or may
constitute
substantial
competition with
the businesses of
ROBAM, the
Company/I will
immediately notify
ROBAM and
transfer such
opportunities to
ROBAM; 3. The
Company/I and the
Company/other
companies under
my control
promise not to
provide any
technical
information,
process flow, sales
channel and other
trade secrets to any
other company,
enterprise,
organization or
individual whose
business is in
competition with
those of ROBAM.
The total
distributed profits
Other
for three (3)
commitments
consecutive years
made to
shall be no less
small and April 10, Strict
Company Dividend than 40% of the Three years
medium 2018 performance
yearly average
shareholders
attributable profits
of the
achieved by the
Company
Company in such
three (3) years.
Whether the
commitments
are Yes
performed on
time
II. Non-operating Occupation of Funds of the Listed Company by the Controlling
Shareholder and Other Affiliated Parties
□ Applicable √ Not Applicable
There was no non-operating occupation of funds of the listed company by the controlling
shareholder and other affiliated parties during the reporting period.
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III. Illegal External Guarantee
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.
IV. Appointme nt 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. Punishme nt and Rectification
□ Applicable √ Not Applicable
There was no punishment or rectification during the reporting period.
X. Integrity Conditions of the Company and its Controlling Shareholders
□ Applicable √ Not Applicable
XI. Major Connected Transactions
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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.
5. Transactions with connected finance companies and finance companies controlled by the
Company
□ Applicable √ Not Applicable
There are no deposits, loans, credits or other financial operations between the Company and
connected finance companies, finance companies controlled by the Company and affiliates.
6. Other major connected transactions
□ Applicable √ Not Applicable
There were no other major connected transactions during the reporting period.
XII. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √ Not Applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
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There was no contracting during the reporting period.
(3) Lease
□ Applicable √ Not Applicable
There was no leasing during the reporting period.
2. Material guarantee
□ Applicable √ Not Applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
√ Applicable □ Not Applicable
(Unit: RMB 10,000)
Impairment
Sources of Incurred amount amount accrued
Amount
financial of financial Unexpired of overdue but
Specific type overdue but not
management management balance not recovered
recovered
entrusting entrusting financial
management
Bank financial
Own funds 90,000 201,900 0 0
products
The specific situation of high-risk entrusted financial management with large single-item amount or
low safety, poor liquidity and no break-even
□ Applicable √ Not Applicable
Entrusted financial management is expected to be unable to recover the principal or where there are
other circumstances that may result in impairment
□ Applicable √ Not Applicable
4. Material contracts for daily operation
□ Applicable √ Not Applicable
5. Other material contracts
□ Applicable √ Not Applicable
The Company had no other material contracts during the reporting period.
XIII. Explanation of Other Significant Matters
□ Applicable √ Not Applicable
The Company had no other significant matters that need to be explained during the reporting period.
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XIV. Significant Matters of Subsidiaries of the Company
□ Applicable √ Not Applicable
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Chapter 7 Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before change Change (+. -) After change
Issue Shares
Percentage of Bonus converted Percentage
Quantity Other Subtotal Quantity
(%) new shares from capital (%)
shares reserve
I. Shares subject
14,123,26
to sales 14,123,269 1.49% 1.49%
9
restrictions
Shares held by
14,123,26
other domestic 14,123,269 1.49% 1.49%
9
investors
Of which:
shares held by 14,123,26
14,123,269 1.49% 1.49%
domestic natural 9
persons
II. Shares
934,900,7
without sales 934,900,781 98.51% 98.51%
81
restrictions
RMB ordinary 934,900,7
934,900,781 98.51% 98.51%
shares 81
949,024,0
III. Total shares 949,024,050 100.00% 100.00%
50
Share repurchase by the Company
1. On May 11, 2021, the Company repurchased the Company’s shares for the first time
through a special securities account for repurchase by means of centralized bidding. The number of
repurchased shares was 1,707,934, accounting for 0.1800% of the total number of shares of the
Company, with a highest closing cost of RMB 37.60 per share and a lowest closing cost of RMB
35.89 per share, and the total amount paid for the repurchase was RMB 63,433,861.04. For details,
please refer to the Announcement on the Repurchase of Public Shares for the First Time
(Announcement No.: 2021-036) disclosed on www.cninfo.com.cn and the Company’s designated
information disclosure newspapers.
2. In accordance with the Measures on Administration of Listed Companies’ Repurchasing
the Public Shares (Trial), the Supplementary Provisions on Repurchase of Shares by Listed
Companies by Means of Centralized Bidding, the Rules of Shenzhen Stock Exchange for
Implementation of Repurchase of Shares by Listed Companies and other relevant provisions, the
Company shall disclose the progress of the repurchase as of the end of the previous month within
the first three trading days of each month. For details, please refer to the Announcement on the
Progress of the Repurchase of Public Shares (Announcement No.: 2021-040) disclosed on
www.cninfo.com.cn and the Company’s designated information disclosure newspapers.
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3. The Company repurchased a total of 4,929,134 shares through a special securities account
for repurchase by means of centralized bidding, accounting for 0.5194% of the total number of
shares of the Company, at a highest closing cost of RMB 44.40 per share and a lowest closing cost
of RMB 35.89 per share, and the total closing price was RMB 199,991,892.40. For details, please
refer to the Announcement on the Completion of the Repurchase of Public Shares (Announcement
No.: 2021-044) disclosed on www.cninfo.com.cn and the Company’s designated information
disclosure newspapers.
2. Changes in shares subject to sales restrictions
□ Applicable √ Not Applicable
II. Securities Issuance and Listing
□ Applicable √ Not Applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: share
Total number of preference
Total number of common shareholders with voting rights
shareholders at the end of the 39,493 recovered at the end of the 0
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 Pledged, marked
of or frozen shares
common Change Number of
Number of
shares during shares
Name of Nature of Shareholdin shares
held at the subject to
shareholder shareholder g ratio without sales
the end reporting sales Status Quantity
restrictions
of the period restrictions
reporting
period
Hangzhou
Domestic
Robam
non-state- 471,510,
Industrial 49.68% 471,510,000
owned 000
Group Co.,
corporation
Ltd.
Hong Kong
Securities -
Overseas 105,614,
Clearing 11.13% 18,614,8 105,614,710
corporation 710
Company 01
Limited
Domestic
Shen 12,240,0
natural 1.29% 12,240,000
Guoying 00
person
PICC Life
Insurance 9,499,62 9,499,62
Company Other 1.00% 9,499,622
2 2
Limited -
traditional -
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ordinary
insurance
product
Industrial
Bank Co.,
Ltd. - ICBC
Credit Suisse
Culture &
9,338,61 9,338,61
Sports Other 0.98% 9,338,619
9 9
Industry
Stock
Securities
Investment
Fund
TEMASEK
-
FULLERTO Overseas 8,400,37
0.89% 2,061,16 8,400,379
N ALPHA corporation 9
7
PTE LTD
Hangzhou Domestic
-
Jinchuang non-state- 6,640,08
0.70% 2,811,90 6,640,085
Investment owned 5
0
Co., Ltd. corporation
People’s
Insurance
Company of
China - 6,525,17 6,525,17
Other 0.69% 6,525,176
traditional - 6 6
ordinary
insurance
product
Hangzhou Domestic
Yinchuang non-state- 6,318,00
0.67% 6,318,000
Investment owned 0
Co., Ltd. corporation
Domestic
5,923,15
Ren Jianhua natural 0.62% 4,442,362 1,480,788
0
person
Description of the associated Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of
relationship or consistent Hangzhou Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou
actions of the above Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is
shareholders his wife. Therefore, there is a possibility that these shareholders will act in concert.
Statements of the above
shareholders on proxy/trustee
None
voting rights and abstention
from voting rights
Shareholdings of the top 10 common shareholders not subject to sales restrictions
Type of share
Number of shares without sales restrictions held at
Name of shareholder Type of
the end of the reporting period Quantity
share
RMB
Hangzhou Robam Industrial
471,510,000 ordinary 471,510,000
Group Co., Ltd.
shares
Hong Kong Securities 105,614,710 RMB 105,614,710
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Clearing Company Limited ordinary
shares
RMB
Shen Guoying 12,240,000 ordinary 12,240,000
shares
PICC Life Insurance Company RMB
Limited - traditional - ordinary 9,499,622 ordinary 9,499,622
insurance product shares
Industrial Bank Co., Ltd. -
RMB
ICBC Credit Suisse Culture &
9,338,619 ordinary 9,338,619
Sports Industry Stock
shares
Securities Investment Fund
RMB
TEMASEK FULLERTON
8,400,379 ordinary 8,400,379
ALPHA PTE LTD
shares
RMB
Hangzhou Jinchuang
6,640,085 ordinary 6,640,085
Investment Co., Ltd.
shares
People’s Insurance Company RMB
of China - traditional - 6,525,176 ordinary 6,525,176
ordinary insurance product shares
RMB
Hangzhou Yinchuang
6,318,000 ordinary 6,318,000
Investment Co., Ltd.
shares
China Merchants Bank Co.,
RMB
Ltd. - ICBC Credit Suisse
5,769,700 ordinary 5,769,700
Yuanxing Hybrid Securities
shares
Investment Fund
Description on associated
relationship or consistent
actions among the top 10
Mr. Ren Jianhua is the controlling shareholder of the Company, shareholder of
common shareholders not
Hangzhou Robam Industrial Group Co., Ltd., and the actual controller of Hangzhou
subject to sales restrictions and
Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is
between the top 10 common
his wife. Therefore, there is a possibility that these shareholders will act in concert.
shareholders not subject to
sales restrictions and the top
10 common shareholders
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 Shares Held by Directors, Supervisors, and Senior Management
√ Applicable Not Applicable
State of Number of Number of Number of shares Number of
Name Title shares at the shares decreased in the shares held at
title
beginning of increased in current period the end of the
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the period the current (shares) period
(share) period (shares)
(shares)
Vice
Chairman,
Ren Fujia In office 2,800,075 / 700,000 2,100,075
General
Manager
Ren
Director In office 1,690,062 / 422,500 1,267,562
Luozhong
Zhao Jihong Director In office 1,690,065 / 422,500 1,267,565
Shen
Director In office 1,524,264 / 381,000 1,143,264
Guoliang
Zhang
Supervisor In office 1,112,315 / 278,000 834,315
Linyong
Zhang
Supervisor In office 1,112,312 / 278,000 834,312
Songnian
Tang
Supervisor In office 1,112,312 / 278,000 834,312
Genquan
Total -- -- 11,041,405 / 2,760,000 8,281,405
V. 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 8 Preferred Shares
Applicable √ Not Applicable
The Company had no preferred shares during the reporting period.
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Chapter 9 Bonds
Applicable √ Not Applicable
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Chapter 10 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, 2021
In RMB
Item June 30, 2021 December 31, 2020
Current assets:
Cash and cash equivalents 4,190,050,005.34 3,921,052,700.31
Deposit reservation for balance
Lendings to banks and other
financial institutions
Financial assets held for trading 2,019,000,000.00 2,352,000,000.00
Derivative financial assets
Notes receivable 1,942,517,288.74 1,832,701,443.08
Accounts receivable 988,037,922.96 1,008,235,946.40
Accounts receivable financing
Prepayments 161,216,428.52 69,889,399.47
Receivable premium
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables 93,254,368.24 56,589,791.38
Inc: Interests receivable
Dividends receivable
Redemptory monetary capital
for sale
Inventory 1,578,814,810.48 1,386,089,344.84
Contract assets
Assets held for sale
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Non-current assets due within
one year
Other current assets 59,794.96 667,378.56
Total current assets 10,972,950,619.24 10,627,226,004.04
Non-current assets:
Loans and advances
Creditors investment
Other debt investment
Long-term receivables
Long-term equity investment 2,012,699.52 3,452,769.59
Investment in other equity 102,116,023.22 102,116,023.22
instruments
Other non-current financial
assets
Investment properties 18,576,015.36 2,591,001.84
Fixed assets 922,791,998.04 824,978,354.71
Construction in process 515,737,483.33 463,424,647.46
Biological assets for production
Oil & gas assets
Right of use assets 20,079,054.20
Intangible assets 228,847,740.27 235,217,240.32
Development expenditure
Goodwill 80,589,565.84 80,589,565.84
Long-term prepaid expenses 3,793,662.64 1,798,358.85
Deferred tax assets: 190,215,852.52 112,492,030.71
Other non-current assets 14,498,895.36 3,682,279.67
Total non-current assets 2,099,258,990.30 1,830,342,272.21
Total assets 13,072,209,609.54 12,457,568,276.25
Current liabilities:
Short-term borrowings 11,913,223.08 6,076,177.30
Borrowings from the central
bank
Borrowings from banks and
other financial institutions
Financial liabilities held for
trading
Derivative financial liabilities
Notes payables 697,267,275.89 751,802,498.92
Accounts payable 2,122,755,661.60 1,723,832,208.09
Advance receipts
Contract liabilities 1,032,445,046.81 949,591,228.35
Financial assets sold for
repurchase
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Deposits from customers and
interbank
Receivings from vicariously
traded securities
Receivings from vicariously
traded securities
Payroll payable 32,973,810.40 126,130,391.24
Taxes payable 315,550,444.85 181,887,237.51
Other payables 255,046,157.84 242,559,615.30
Inc: Interests payable
Dividends payable
Fees and commissions payable
Dividends payable for
reinsurance
Liabilities held for sale
Non-current liabilities due 2,217,436.33
within one year
Other current liabilities 137,774,706.49 126,535,407.26
Total current liabilities 4,607,943,763.29 4,108,414,763.97
Non-current liabilities:
Reserves for insurance contracts
Long-term loans
Bonds payable
Inc: Preferred shares
Perpetual bonds
Lease liabilities 18,756,723.23
Long-term accounts payable
Long-term payroll payable
Estimated liabilities
Deferred income 140,955,451.16 150,163,523.90
Deferred income tax liabilities 4,956,977.89 5,210,759.74
Other non-current liabilities
Total non-current liabilities 164,669,152.28 155,374,283.64
Total liabilities 4,772,612,915.57 4,263,789,047.61
Owner’s equity:
Capital stock 949,024,050.00 949,024,050.00
Other equity instruments
Inc: Preferred shares
Perpetual bonds
Capital reserve 402,602,023.28 401,799,332.67
Less: treasury share 199,995,742.59
Other comprehensive income -15,157,634.16 -15,157,634.16
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Special reserves
Surplus reserves 474,516,412.50 474,516,412.50
General risk reserves
Undistributed profits 6,535,348,256.13 6,240,444,654.34
Total owners’ equity attributable 8,146,337,365.16 8,050,626,815.35
to the parent company
Minority interests 153,259,328.81 143,152,413.29
Total owner’s equity 8,299,596,693.97 8,193,779,228.64
Total liabilities and owner’s equity 13,072,209,609.54 12,457,568,276.25
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Head of the accounting department:
Guofu Zhang Guofu
2. Balance Sheet of the Parent Company
In RMB
Item June 30, 2021 December 31, 2020
Current assets:
Cash and cash equivalents 4,008,212,230.41 3,660,573,828.66
Financial assets held for
1,900,000,000.00 2,260,000,000.00
trading
Derivative financial assets
Notes receivable 1,931,059,123.12 1,826,318,388.55
Accounts receivable 933,624,686.74 933,609,909.29
Accounts receivable financing
Prepayments 145,852,138.58 54,046,490.84
Other receivables 80,511,071.80 49,092,820.31
Inc: Interests receivable
Dividends receivable
Inventory 1,490,270,132.49 1,310,365,800.56
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets
Total current assets 10,489,529,383.14 10,094,007,238.21
Non-current assets:
Creditors investment
Other debt investment
Long-term receivables
Long-term equity investment 238,550,318.40 229,958,703.32
Investment in other equity 102,116,023.22 102,116,023.22
instruments
Other non-current financial
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assets
Investment properties 18,863,580.98 2,890,836.38
Fixed assets 896,601,464.89 798,041,764.29
Construction in process 376,938,399.94 388,628,789.02
Biological assets for
production
Oil & gas assets
Right of use assets
Intangible assets 149,666,719.60 153,598,124.59
Development expenditure
Goodwill
Long-term prepaid expenses 1,367,040.07 1,626,828.83
Deferred tax assets: 188,814,668.77 110,283,291.78
Other non-current assets 7,482,799.36 3,005,279.67
Total non-current assets 1,980,401,015.23 1,790,149,641.10
Total assets 12,469,930,398.37 11,884,156,879.31
Current liabilities:
Short-term borrowings 11,913,223.08 6,076,177.30
Financial liabilities held for
trading
Derivative financial liabilities
Notes payables 651,648,401.71 706,096,531.24
Accounts payable 1,973,906,127.28 1,643,087,806.83
Advance receipts
Contract liabilities 966,646,621.85 863,047,926.93
Payroll payable 23,529,799.23 102,753,699.88
Taxes payable 308,750,096.63 170,747,570.08
Other payables 235,809,677.45 225,015,032.38
Inc: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 128,752,608.42 115,284,778.08
Total current liabilities 4,300,956,555.65 3,832,109,522.72
Non-current liabilities:
Long-term loans
Bonds payable
Inc: Preferred shares
Perpetual bonds
Lease liabilities
Long-term accounts payable
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Long-term payroll payable
Estimated liabilities
Deferred income 112,098,466.16 121,306,538.90
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 112,098,466.16 121,306,538.90
Total liabilities 4,413,055,021.81 3,953,416,061.62
Owner’s equity:
Capital stock 949,024,050.00 949,024,050.00
Other equity instruments
Inc: Preferred shares
Perpetual bonds
Capital reserve 402,557,040.27 401,754,349.66
Less: treasury share 199,995,742.59
Other comprehensive income -15,157,634.16 -15,157,634.16
Special reserves
Surplus reserves 474,516,412.50 474,516,412.50
Undistributed profits 6,445,931,250.54 6,120,603,639.69
Total owner’s equity 8,056,875,376.56 7,930,740,817.69
Total liabilities and owner’s 12,469,930,398.37 11,884,156,879.31
equity
3. Consolidated Income Statement
In RMB
Item The first half of 2021 Semi-annual 2020
I. Total operating income 4,326,082,031.62 3,211,172,335.79
Inc: Operating income 4,326,082,031.62 3,211,172,335.79
Interest income
Earned premium
Fee and commission income
II. Total operating costs 3,435,552,198.16 2,554,722,969.33
Inc: Operating costs 1,887,148,054.31 1,450,728,576.58
Interest expenses
Fee and commission expenses
Surrender value
Net payments for insurance claims
Net allotment of reserves for insurance liabilities
Policy dividend expenditures
Reinsurance expenses
Taxes and surcharges 32,378,228.12 25,188,234.23
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Sale expenses 1,270,526,179.87 892,679,297.76
Administrative expenses 149,993,109.17 116,085,321.98
R&D expenses 143,433,206.12 117,824,032.62
Financial expense -47,926,579.43 -47,782,493.84
Inc: Interest expenses 1,228,635.41 139,284.26
Interest income 50,677,538.57 47,604,818.42
Add: other income 55,086,765.01 73,726,234.28
Investment income (“-” for losses) 31,429,517.67 24,102,232.36
Inc: Income from investment in joint ventures and
-1,440,070.07 -2,239,220.46
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) -31,492,439.21 -18,511,769.59
Losses from asset impairment (“-” for losses)
Gains on disposal of assets (“-” for losses) -2,035,843.51 11,388.98
III. Operating profits (“-” for losses) 943,517,833.42 735,777,452.49
Add: non-operating income 1,195,370.24 586,353.17
Less: non-operating expenditure 1,577,924.28 1,695,304.64
IV. Total profits (“-” for total losses) 943,135,279.38 734,668,501.02
Less: income tax expenses 143,489,604.07 111,490,061.67
V. Net profits (“-” for losses) 799,645,675.31 623,178,439.35
(I) By operational sustainability
1. Net profits from continuing operations (“-” for net losses) 799,645,675.31 623,178,439.35
2. Net profits from discontinued operations (“-” for net
799,645,675.31 623,178,439.35
losses)
(II) By ownership
1. Net profits attributable to owners of the parent company 790,388,759.79 612,317,249.29
2. Minority shareholders’ gains and losses 9,256,915.52 10,861,190.06
VI. After-tax net amount of other comprehensive income
After-tax net amount of other comprehensive income
attributable to owners of the parent company
(I) Other comprehensive income that cannot be reclassified
into gains and losses
1. Changes in re-measured and defined benefit plans
2. Other comprehensive income which cannot be
transferred to gains or losses under the equity method
3. Changes in fair value of the investment in other equity
instruments
4. Changes in fair value of the credit risk of the Company
5. Others
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(II) Other comprehensive income which will be reclassified
into gains and losses
1. Other comprehensive income which can be transferred
into gains and losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of financial assets reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Cashflow hedge reserve
6. Converted difference in foreign currency statements
7. Others
After-tax net amount of other comprehensive income
attributable to minority shareholders
VII. Total comprehensive income 799,645,675.31 623,178,439.35
Total comprehensive income attributable to owners of the
790,388,759.79 612,317,249.29
parent company
Total comprehensive income attributable to minority
9,256,915.52 10,861,190.06
shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS 0.83 0.65
(II) Diluted EPS 0.83 0.65
As for business combination under common control in the current period, net profit of the combined party prior to
combination is: RMB, while the net profit of the combined party in the prior period was: RMB.
Legal representative: Ren Person in charge of accounting: Zhang Head of the accounting department:
Jianhua Guofu Zhang Guofu
4. Income Statement of the Parent Company
In RMB
Item The first half of Semi-annual
2021 2020
I. Operating income 3,957,294,958.01 2,980,914,680.77
Less: Operating costs 1,773,395,471.27 1,349,585,204.35
Taxes and surcharges 29,052,610.83 22,974,970.25
Sales expenses 1,089,455,480.72 812,123,731.90
Administrative expenses 107,028,148.18 82,217,605.50
R&D expenses 136,896,643.39 112,943,235.17
Financial expenses -46,049,005.34 -47,002,146.56
Including: Interest expenses 1,228,635.41 139,284.26
Interest income 47,935,867.95 46,641,570.65
Add: other income 51,032,167.31 68,634,379.72
Investment income (“-” for losses) 52,446,657.81 18,620,433.19
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Including: Income from investment in joint ventures and affiliated
-1,440,070.07 -2,239,220.46
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)
Losses from credit impairment (“-” for losses) -32,279,529.57 -16,715,314.38
Losses from asset impairment (“-” for losses)
Gains on disposal of assets (“-” for losses) -2,072,673.59 -3,117.74
II. Operating profits (“-” for losses) 936,642,230.92 718,608,460.95
Add: non-operating income 917,022.51 547,098.05
Less: non-operating expenditure 1,203,445.87 1,556,999.22
III. Total profits (“-” for total losses) 936,355,807.56 717,598,559.78
Less: income tax expenses 137,593,038.71 108,263,459.97
IV. Net profits (“-” for net losses) 798,762,768.85 609,335,099.81
(I) Net profits from going concern (“-” for net losses)
(II) Net profits from discontinued operations (“-” for net losses)
V. After-tax net amount of other comprehensive income
(I) Other comprehensive income that cannot be reclassified into gains and
losses
1. Changes in re-measured and defined benefit plans
2. Other comprehensive income which cannot be transferred to gains or
losses under the equity method
3. Changes in fair value of the investment in other equity instruments
4. Changes in fair value of the credit risk of the Company
5. Others
(II) Other comprehensive income which will be reclassified into gains and
losses
1. Other comprehensive income which can be transferred into gains and
losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of financial assets reclassified into other comprehensive
income
4. Provision for credit impairment of other debt investments
5. Cashflow hedge reserve
6. Converted difference in foreign currency statements
7. Others
VI. Total comprehensive income 798,762,768.85 609,335,099.81
VII. EPS:
(I) Basic EPS
(II) Diluted EPS
5. Consolidated Cash Flow Statement
In RMB
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Item The first half of Semi-annual 2020
2021
I. Cash flow from operating activities:
Cash received for the sale of goods and rendering of services 4,738,990,263.73 3,214,555,668.77
Net increase in clients’ deposits and deposits from banks and other
financial institutions
Net increase in borrowings from the central bank
Net increase in borrowings from other financial institutions
Cash received from receiving insurance premium of the original
insurance contract
Net cash from receiving reinsurance premium
Net increase in deposits and investment of insured persons
Cash received from interests, fees and commissions
Net increase in borrowed funds
Net increase in repurchase business funds
Net cash received from vicariously traded securities
Refunds of taxes 7,323,753.03
Cash received relating to other operating activities 118,704,652.16 143,788,116.65
Subtotal of cash inflow from operating activities 4,865,018,668.92 3,358,343,785.42
Cash paid for purchased products and received services 2,252,759,526.62 1,594,931,903.80
Net increase in loans and advances to customers
Net increase in deposits with the central bank and other financial
institutions
Cash paid for claims of original insurance contract
Net increase in lending funds
Cash paid for interests, fees and commissions
Cash paid for policy dividends
Cash paid to and on behalf of employees 637,119,817.59 363,952,500.04
Cash paid for taxes 369,427,461.40 277,030,839.79
Cash paid related to other operating activities 1,075,485,546.81 714,741,408.23
Subtotal of cash outflow from operating activities 4,334,792,352.42 2,950,656,651.86
Net cash flow from operating activities 530,226,316.50 407,687,133.56
II. Cash flow from investing activities:
Cash received from return of investments 1,234,000,000.00 1,140,000,000.00
Cash received from return on investments 33,853,727.02 42,018,525.66
Net cash received from disposal of fixed assets, intangible assets
2,206,278.90 35,000.00
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 1,270,060,005.92 1,182,053,525.66
Cash paid for purchase and construction of fixed assets, intangible
154,539,404.13 124,109,953.42
assets and other long-term assets
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Cash paid to investments 901,000,000.00 705,000,000.00
Net increase in pledged loans
Net cash from subsidiaries and other operating entities
Cash paid related to other investment activities
Subtotal of cash outflow from investment activities 1,055,539,404.13 829,109,953.42
Net cash flow from investment activities 214,520,601.79 352,943,572.24
III. Cash flow from financing activities:
Cash from acquiring investments 850,000.00
Including: Cash received by subsidiaries from investments of
850,000.00
minority shareholders
Cash from acquiring debts
Other cashes received in relation to financing activities 5,552,160.81
Subtotal of cash inflow from financing activities 6,402,160.81
Cash repayments of debts
Cash paid for distribution of dividends, profits or interest expenses 495,485,158.00 474,512,025.00
Including: Dividends and profits paid by the subsidiaries to
minority shareholders
Other cashes paid in relation to financing activities
Subtotal of cash outflow from financing activities 495,485,158.00 474,512,025.00
Net cash flow from financing activities -489,082,997.19 -474,512,025.00
IV. Effect of change in exchange rate on cash and cash equivalents -264,556.23 540,552.95
V. Net increase in cash and cash equivalents 255,399,364.87 286,659,233.75
Plus: Opening balance of cash and cash equivalents 3,886,096,513.56 4,029,296,265.50
VI. Closing balance of cash and cash equivalents 4,141,495,878.43 4,315,955,499.25
6. Cash Flow Statement of the Parent Company
In RMB
Item The first half of 2021 Semi-annual 2020
I. Cash flow from operating
activities:
Cash received for the sale of goods
4,346,968,618.40 3,026,131,726.09
and rendering of services
Refunds of taxes 7,323,753.03
Cash received relating to other
99,542,054.03 109,796,058.70
operating activities
Subtotal of cash inflow from
4,453,834,425.46 3,135,927,784.79
operating activities
Cash paid for purchased products
2,138,946,028.17 1,530,403,008.52
and received services
Cash paid to and on behalf of
540,731,054.64 293,387,839.45
employees
Cash paid for taxes 330,152,814.67 253,274,191.18
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Cash paid related to other operating
932,462,696.53 634,242,077.40
activities
Subtotal of cash outflow from
3,942,292,594.01 2,711,307,116.55
operating activities
Net cash flow from operating
511,541,831.45 424,620,668.24
activities
II. Cash flow from investing
activities:
Cash received from return of
960,000,000.00 900,000,000.00
investments
Cash received from return on
54,819,617.81 36,406,272.24
investments
Net cash received from disposal of
fixed assets, intangible assets and 2,156,298.90 10,000.00
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
1,016,975,916.71 936,416,272.24
investment activities
Cash paid for purchase and
construction of fixed assets,
112,968,774.96 97,961,767.61
intangible assets and other long-term
assets
Cash paid to investments 610,000,000.00 500,000,000.00
Net cash from subsidiaries and other
operating entities
Cash paid related to other
investment activities
Subtotal of cash outflow from
722,968,774.96 597,961,767.61
investment activities
Net cash flow from investment
294,007,141.75 338,454,504.63
activities
III. Cash flow from financing
activities:
Cash from acquiring investments
Cash from acquiring debts
Other cashes received in relation to
financing activities 5,552,160.81
Subtotal of cash inflow from
5,552,160.81
financing activities
Cash repayments of debts
Cash paid for distribution of
dividends, profits or interest 473,435,158.00 474,512,025.00
expenses
Other cashes paid in relation to
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financing activities
Subtotal of cash outflow from
473,435,158.00 474,512,025.00
financing activities
Net cash flow from financing
-467,882,997.19 -474,512,025.00
activities
IV. Effect of change in exchange
-264,437.65 540,502.02
rate on cash and cash equivalents
V. Net increase in cash and cash
337,401,538.36 289,103,649.89
equivalents
Plus: Opening balance of cash and
3,627,178,859.95 3,951,074,513.16
cash equivalents
VI. Closing balance of cash and cash
3,964,580,398.31 4,240,178,163.05
equivalents
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7. Consolidated Statement of Changes in Owners’ Equity
Current amount
In RMB
The first half of 2021
Owners’ equity attributable to the parent company
Item Other equity instruments Other General Minority Total owner’s
Less: treasury Special Surplus Undistributed interests equity
Capital stock Preferred Perpetual capital reserve comprehensive risk Other Subtotal
Other share reserves reserves profits
shares bonds income reserves
I. Closing balance of -
949,024,050.00 401,799,332.67 474,516,412.50 6,240,444,654.34 8,050,626,815.35 143,152,413.29 8,193,779,228.64
last year 15,157,634.16
Plus: Changes in
accounting policies
Correction of errors of
the previous period
Businesses combination
under common control
Other
II. Opening balance of -
949,024,050.00 401,799,332.67 474,516,412.50 6,240,444,654.34 8,050,626,815.35 143,152,413.29 8,193,779,228.64
this year 15,157,634.16
III. Change in current
802,690.61 199,995,742.59 294,903,601.79 95,710,549.81 10,106,915.52 105,817,465.33
period (“-” for decrease)
(I) Total comprehensive
790,388,759.79 790,388,759.79 9,256,915.52 799,645,675.31
income
(II) Capital invested and
802,690.61 802,690.61 850,000.00 1,652,690.61
decreased by the owners
1. Common shares
850,000.00 850,000.00
invested by the owners
2. Capital invested by
holders of other equity
instruments
3. Amount of share-
based payments
802,690.61 802,690.61
recognized in owners’
equity
4. Others
(III) Profit distribution -495,485,158.00 -495,485,158.00 -495,485,158.00
1. Withdrawal of
surplus reserve
2. Appropriation of
general risk reserve
3. Distribution to
owners (or -495,485,158.00 -495,485,158.00 -495,485,158.00
shareholders)
4. Others
(IV) Internal carry-
forward of owners’
equity
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1. Capital reserve
converted into capital
(or capital stock)
2. Surplus reserve
converted into capital
(or capital stock)
3. Surplus reserves
making up for losses
4. Changes of defined
benefit plans carried
forward to retained
earnings
5. Other comprehensive
income carried forward
to retained earnings
6. Others
(V) Special reserve
1. Withdrawn in current
period
2. Used in current
period
(VI) Others 199,995,742.59 -199,995,742.59 -199,995,742.59
IV. Closing balance of -
949,024,050.00 402,602,023.28 199,995,742.59 474,516,412.50 6,535,348,256.13 8,146,337,365.16 153,259,328.81 8,299,596,693.97
current period 15,157,634.16
Amount of the previous period
In RMB
Semi-annual 2020
Owners’ equity attributable to the parent company
Item Other equity instruments Minority Total owner’s
Less: Other General
Special Surplus Undistributed interests equity
Capital stock Preferred Perpetual capital reserve treasury comprehensive risk Other Subtotal
Other reserves reserves profits
shares bonds share income reserves
I. Closing balance of last year 949,024,050.00 401,799,332.67 -15,157,634.16 474,516,412.50 5,054,206,720.45 6,864,388,881.46 109,894,468.24 6,974,283,349.70
Plus: Changes in accounting
policies
Correction of errors of the
previous period
Businesses combination under
common control
Other
II. Opening balance of this
949,024,050.00 401,799,332.67 -15,157,634.16 474,516,412.50 5,054,206,720.45 6,864,388,881.46 109,894,468.24 6,974,283,349.70
year
III. Change in current period
137,805,224.29 137,805,224.29 10,861,190.06 148,666,414.35
( “-” for decrease)
(I) Total comprehensive
612,317,249.29 612,317,249.29 10,861,190.06 623,178,439.35
income
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(II) Capital invested and
decreased by the owners
1. Common shares invested
by the owners
2. Capital invested by holders
of other equity instruments
3. Amount of share-based
payments recognized in
owners’ equity
4. Others
(III) Profit distribution -474,512,025.00 -474,512,025.00 -474,512,025.00
1. Withdrawal of surplus
reserve
2. Appropriation of general
risk reserve
3. Distribution to owners (or
-474,512,025.00 -474,512,025.00 -474,512,025.00
shareholders)
4. Others
(IV) Internal carry-forward of
owners’ equity
1. Capital reserve converted
into capital (or capital stock)
2. Surplus reserve converted
into capital (or capital stock)
3. Surplus reserves making up
for losses
4. Changes of defined benefit
plans carried forward to
retained earnings
5. Other comprehensive
income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Withdrawn in current
period
2. Used in current period
(VI) Others
IV. Closing balance of current
949,024,050.00 401,799,332.67 -15,157,634.16 474,516,412.50 5,192,011,944.74 7,002,194,105.75 120,755,658.30 7,122,949,764.05
period
8. Statement of Changes in Owners’ Equity of the Parent Company
Current amount
In RMB
Item The first half of 2021
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Other equity instruments Other
Special
Capital stock Preferred Perpetual capital reserve Less: treasury share comprehensive Surplus reserves Undistributed profits Other Total owner’s equity
Other reserves
shares bonds income
I. Closing balance of
949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 6,120,603,639.69 7,930,740,817.69
last year
Plus: Changes in
accounting policies
Correction of errors of
the previous period
Other
II. Opening balance of
949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 6,120,603,639.69 7,930,740,817.69
this year
III. Change in current
802,690.61 199,995,742.59 325,327,610.85 126,134,558.87
period (“-” for decrease)
(I) Total comprehensive
798,762,768.85 798,762,768.85
income
(II) Capital invested and
802,690.61 802,690.61
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
802,690.61 802,690.61
recognized in owners’
equity
4. Others
(III) Profit distribution -473,435,158.00 -473,435,158.00
1. Withdrawal of
surplus reserve
2. Distribution to
owners (or -473,435,158.00 -473,435,158.00
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 for losses
4. Changes of defined
benefit plans carried
forward to retained
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earnings
5. Other comprehensive
income carried forward
to retained earnings
6. Others
(V) Special reserve
1. Withdrawn in current
period
2. Used in current
period
(VI) Others 199,995,742.59 -199,995,742.59
IV. Closing balance of
949,024,050.00 402,557,040.27 199,995,742.59 -15,157,634.16 474,516,412.50 6,445,931,250.54 8,056,875,376.56
current period
Amount of the previous period
In RMB
Semi-annual 2020
Other equity instruments Less:
Item Other comprehensive Special
Capital stock Preferred Perpetual capital reserve treasury Surplus reserves Undistributed profits Other Total owner’s equity
Other income reserves
shares bonds share
I. Closing balance of last year 949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 4,955,109,022.86 6,765,246,200.86
Plus: Changes in accounting
policies
Correction of errors of the
previous period
Other
II. Opening balance of this year 949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 4,955,109,022.86 6,765,246,200.86
III. Change in current period ( “-” for 134,823,074.81 134,823,074.81
decrease)
(I) Total comprehensive income 609,335,099.81 609,335,099.81
(II) Capital invested and decreased by
the owners
1. Common shares invested by the
owners
2. Capital invested by holders of other
equity instruments
3. Amount of share-based payments
recognized in owners’ equity
4. Others
(III) Profit distribution -474,512,025.00 -474,512,025.00
1. Withdrawal of surplus reserve
2. Distribution to owners (or -474,512,025.00 -474,512,025.00
shareholders)
3. Others
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(IV) Internal carry-forward of owners’
equity
1. Capital reserve converted into capital
(or capital stock)
2. Surplus reserve converted into capital
(or capital stock)
3. Surplus reserves making up for losses
4. Changes of defined benefit plans
carried forward to retained earnings
5. Other comprehensive income carried
forward to retained earnings
6. Others
(V) Special reserve
1. Withdrawn in current period
2. Used in current period
(VI) Others
IV. Closing balance of current period 949,024,050.00 401,754,349.66 -15,157,634.16 474,516,412.50 5,089,932,097.67 6,900,069,275.67
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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.1,512) in 2010, the Company offered 40 million ordinary shares in RMB to the public for the
first time on November 23, 2010 (stock code: 002,508), with the par value of RMB 1 per share and
the issue price of RMB 24.00 per share.
As of June 30, 2021, the total capital stocks of the Company reached RMB 949,024,050 after
several equity changes. The Company’s unified social credit code is 91330000725252053F; the
legal representative is Ren Jianhua; and the address is No.592, Linping Avenue, Yuhang Economic
Development Area, Yuhang District, Hangzhou.
The Company is a manufacturing company, with major businesses covering research &
development, production, sales and comprehensive services of kitchen appliances. Its main products
include range hoods, gas stoves, disinfection cabinets, steam ovens, baking ovens, dishwashers,
water purifiers, microwave ovens, integrated stoves, and purification tanks.
Its business mainly covers the manufacturing, processing and sales of range hoods, gas stoves,
disinfection cabinets, baking ovens, steam ovens, microwave ovens, dishwashers, water purifiers,
multi-purpose tanks, kitchen supplies and other kitchen appliances, as well as import and 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 seven companies, including
Beijing Robam Electric Appliance Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd.,
Hangzhou MingQi Electric Co., Ltd., De Dietrich Household Appliances Trading (Shanghai) Co.,
Ltd., Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.(hereinafter referred to as
Shengzhou Kinde), Hangzhou Robam Fuchuang Investment Management Co., Ltd. and Zhejiang
Cookingfuture Technology Co., Ltd. (hereinafter referred to as Cookingfuture).
For details, see relevant contents in the section of "VII. Interests in Other Entities" herein.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going concern basis, and in light of 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
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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 on compliance with 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 financial position,
business results, cash flow and other relevant information of the Company.
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregorian
calendar.
3. Operating cycle
The normal operating cycle of the Company shall be one year (12 months).
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Accounting approaches to business combinations under or not under common 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 fair values of cash or non-cash assets paid, liabilities
issued or undertaken, equity securities issued, etc. by the Company for the purpose of taking control
over the acquired party 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
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of consolidation shall be offset when preparing consolidated financial statements. The portion of
owner’s equity of subsidiaries not held 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 a business combination under common 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 combination 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 rights, 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 reserve is not suffici ent 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 rights 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 t he 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 of controls.
7. Classification of joint arrange ment 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
investment of the joint venture.
8. Recognition standard of cash and cash equivalents
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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 (not exceeding 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
Foreign currency transactions
The Company translates the foreign-currency amount of foreign-currency transactions into an
RMB amount based on the 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, with the exception of 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 o n the date when the fair value is confirmed.
If the difference between the converted bookkeeping base currency amount and the original
booking base currency amount belongs to the salable financial asset, such difference shall be
included in the capital reserve. If such a 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 in current profits and losses. The foreign currency non-monetary
items measured by historical cost shall still be translated according to the spot rate on the
transaction date, while RMB amount remains unchanged.
Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of foreign operations are translated into 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
arising from the above translation is presented separately under other comprehensive income. For
monetary items denominated in foreign currencies that materially constitute overseas net invest ment
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 the profits or losses of the period when the disposal was transacted.
During the disposal of an overseas operation, other comprehensive incomes related to the 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.
10. Financial instrume nts
The Company shall recognize a financial asset or a financial liability when it becomes a party
to a financial instrument contract.
Financial assets
The Company translates the foreign-currency amount of the foreign-currency transactions into
the RMB amount using the spot exchange rate applicable at the transaction date.
Based on the business model for management of financial assets and the contractual cash flow
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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 asset, 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 under the following conditions: ① For the financial assets purchased by or
originating from the Company with credit impairment, from the 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 by the Company based on the amortized cost and actual
interest rate of the financial assets during the follow-up period.
The non-trading equity instrument is designated by the Company as the financial asset which 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 for the obtained dividends (excluding those of the recovered investment
cost), which 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 then be converted into current profits and losses. Upon derecognition, the accumulated gains or
losses previously included into other comprehensive incomes are transferred from other
comprehensive incomes and included into retained earnings.
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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 a financial asset that is entirely transferred and meets the conditions of derecognition, the
difference is calculated between the book value of the transferred financial asset and the sum of
consideration received from such transfer and the accumulated changes in fair value, which is
directly included into other comprehensive income and corresponds 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). This difference is included into the current profits and losses.
For a financial asset that is partially transferred and meets the conditions of derecognition, the
overall book value of the transferred financial asset is split according to the 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
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
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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 the above ① and ② as well as loan commitments at a
rate below the market rate of interest that do not fall under the above ①.
Where a contingent consideration is recognized by the Company as a financial liability in a
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 conditions for 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 exi sting 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 fina ncial 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, wherein the first level is the unadjusted price available fo r
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 to 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 l ayer
this fair value evaluation result shall belong to.
Investments in equity instruments of the Company are measured at fair value. However, under
certain 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
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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 first case, the instrument shall be
the financial liability of the issuer. 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 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
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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 i nstrument 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.
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: whether the operating results of the debtor has actually changed or is
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
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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 occurred.
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 reorganization;
the disappearance of an active market for that financial asset because of financial difficulties of the
issuer or the debtor; the purchase or origination of a financial asset at a deep 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 into consideration about past events, current condition and predictions of future
economic status 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 that are expected to be
collected.
For the financial guarantee contract, the credit loss is the expected payment made to the
contract holder by the Company to reimburse 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
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accounting estimation policy of expected credit loss.
Classification of Basis for determining
Provision method
combination 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’s 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. Account 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 is unable to 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:
Classification of combination 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
method Risk characteristics
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
With 1 year 5.00%
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1-2 years 10.00%
2-3 years 20.00%
3-4 years 50.00%
4-5 years 80.00%
More than 5 years 100.00%
The Company calculates the expected credit loss of receivables on the balance sheet date. If
the expected credit loss is greater than the carrying amount of the current receivables impairment
provision, the Company will recognize the difference as impairme nt 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 and its change and 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 is, in essence, 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.
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.
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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 val ue,
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 value 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 value 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. Contract assets
Recognition method and standard of contract asset
Contract asset refers to the rights of the Company to receive consideration for goods
transferred to the customer, which depend on other factors except for the lapse of time. Where the
Company sells two clearly distinguished commodities to the customer and has the ri ght to collect
the payment because one commodity is delivered and the payment relies on the delivery of the other
commodity, the Company will treat the collection rights as the contract assets.
Determination and accounting method for expected credit loss of contract assets
For the determination method for expected credit loss of contract assets, please refer to
relevant contents in 10. Financial asset and liabilities; 11. Notes receivable and 12. Account
receivable.
The Company calculates the expected credit loss of contract assets on the balance sheet date. If
the expected credit loss is greater than the carrying amount of the current impairment provision of
contract assets, the Company will recognize the difference as impairment loss, debit "asset
impairment loss" and credit "contract asset impairment 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 contract assets are determined to be
unrecoverable and are approved to be written off, the Company shall debit "contract asset
impairment provision" and credit "contract assets" according to the approved write-off amount. If
the write-off amount is greater than the accrued loss provisions, the "asset impairment loss" will be
debited according to the difference.
17. Contract costs
Method for determining asset amount related to contract cost
The Company’s assets related to the contract cost comprise the contract performance cost and
the contract acquisition cost.
The contract performance cost is the cost incurred to perform the contract by the Company.
The contract performance cost, not covered by other accounting standards for business enterprises,
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shall be deemed as one asset if it meets the conditions below: the cost is directly related to one
existing contract or one contract expected to be acquired and covers direct labor cost, direct material
cost, manufacturing cost (or similar cost), the cost clearly specified to be borne by the customer and
other costs incurred by the contract only. The cost increases the resources available to the Company
to fulfill performance duties in the future. The cost is expected to be recovered.
The contract acquisition cost refers to the incremental cost incurred by the Company for the
purpose of securing a contract, which will be recognized in the form of contract acquisition cost as
an asset if it is expected to be recovered. If the amortization period of the assets does not exceed one
year, such cost shall be included as current profit or loss. Incremental cost refers to the cost which
will not incur unless a contract is secured by the Company (e.g. sales commission, etc.). Other costs
(such as the travel expense, whether or not the contract will be acquired, except the incremental cost
which can be recovered as expected) incurred the Company for purpose of acquiring the contract
shall be included in the current profit or loss at the time of occurrence, unless those clearly specified
to be borne by the customer.
Asset amortization related to contract cost
The Company’s assets related to contract costs are amortized on the same basis as revenue
recognition of goods related to the asset and recorded in the current profits or losses.
Asset impairment related to contract cost
When the Company recognizes the impairment loss related to contract cost, the Company shall
firstly recognize the impairment loss of other assets which are recognized as per other account
standards for business enterprises and are related to the contract. Then, if the book value is higher
than the difference between the remaining consideration expected to be received for the transfer of
the commodity associated with the asset and the estimated costs to be incurred for the relevant
commodity, impairment provision will be made for the excess portion and recognized it as asset
impairment loss.
If the factors causing the impairment of prior period change and make the previous difference
between the above-mentioned items higher than the book value of the asset, the withdrew asset
impairment provision shall be reversed and recorded in the current profits or losses, although the
book value of asset after reversion shall not exceed the book value of the asset at the reversion date
under the condition of not withdrawing the impairment provision.
18. Long-term equity investment
Long-term equity investment of the Company mainly includes the investment to 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.
In general, it constitutes significant influence on an investee if the Company directly or
indirectly through a subsidiary controls 20% (inclusive) or more (less than 50%) voting shares of
the investee. 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
authority 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
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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 the 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 reserve 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 investme nt cost.
In case the 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 investments held before the date of acquisition where equity method is
adopted, relevant other comprehensive income accounted originally by equity method shall not be
adjusted for the time being, accounting treatment should be applied to the investment on the same
basis as those adopted by the invested entity 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 is 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 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
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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 co ntrol power upon such loss.
19. Investment real estate
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 Annual
Depreciation period Estimated residual value
depreciation rate
(year) ratio (%)
(%)
Houses and buildings 20 years 5.00% 4.75%
20. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year, which are
held for producing goods, rendering labor services, lease (exclusive of leased houses and buildings)
or operation and management.
Fixed assets are recognized w hen the economic benefits related thereto are likely to flow into
the Company and their costs can be measured reliably. Fixed assets include houses and buildings,
machine and equipment, transportation equipment and other equipment, and the actual cost at t he
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.
(2) Depreciation method
Type Depreciation Depreciation Residual value rate Annual depreciation
method method rate
Houses and Straight-line method 20 years 5.00% 4.75%
buildings
Machine and Straight-line method 10 years 5.00% 9.50%
equipment
Transportation Straight-line method 5 years 5.00% 19.00%
equipment
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Other equipment Straight-line method 5 years 5.00% 19.00%
(3) Recognition basis, valuation and depreciation method of fixed assets under financing
lease
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.
21. Construction in progress
Construction in progress is measured at the 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.
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.
22. Borrowing costs
Recognition principle of borrowing cost capitalization: The borrowing costs incurred by the
Company that can be directly attributable to the acquisition and 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 or production of a
qualifying asset are interrupted abnormally and the interruption period lasts for more than 3 months,
the capitalization of the borrowing costs shall be suspended. Capitalization of borrowing costs 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 are
used 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 and construction or
production of qualifying assets, the Company shall calculate and determine the to-be-capitalized
amount of interests on the general borrowing by multiplying the weighted average of the
accumulative asset expenditure minus the asset expenditure of the specific borrowing by the
weighted average interest rate of the general borrowing used.
23. Right-of-use assets
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The right-of-use asset refers to the right of the Company to use the leased assets as a lessee
during the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company carries out initial measurement to
the use-of-right asset. The cost comprises the following four items: ① initial measurement amount
of lease liabilities; ② the amount of lease payment made on or before commencement date of lease
term, net of relevant amount of used lease incentives (if any); ③ the initial direct cost incurred (i.e.,
the incremental cost incurred by reaching the lease agreement); ④ costs expected to be incurred to
disassemble and remove the leased assets, restore the site where the leased assets are located or
restore the leased assets to the conditions as agreed under the terms of the lease, excluding costs
incurred to produce the inventory.
(2) Subsequent measurement
On the commencement date of the lease term, the Company carries out subsequent
measurement to the use-of-right assets in the cost mode, that is, measuring the use-of-right assets by
deducting the accrued depreciation amount and accrued impairment loss from the cost.
Where the Company remeasures the lease liabilities according to relevant provisions of the
lease criterion, the book value of the use-of-right asset shall be adjusted correspondingly.
(3) Depreciation of right-of-use assets
On the commencement date of the lease term, the provision for depreciation shall be made by
the Company to the right-of-use assets. Generally, the depreciation amount of the use-of-right assets
is accrued from the month when the lease term starts. The accrued depreciation amount shall be
recognized as the cost of relevant assets or current profit or loss according to the purpose of the
right-of-use assets.
When determining the depreciation method of right-of-use asset, the Company shall make
decisions according to the expected consumption method of the economic benefits related to the
right-of-use asset and accrue depreciation to the right-of-use asset with the linear method.
When determining the depreciation years of the right-of-use asset, the Company shall follow
the principles below: If the Company can reasonably determine that the ownership of the leased
asset is acquired at the expiration of the lease term, depreciation shall be accrued within the
remaining service life of the leased asset. Where it is not reasonably certain that the ownership of
the lease assets can be obtained upon expiry of lease term, the lease assets shall be depreciated over
the shorter of the lease term and the remaining service life of the lease assets.
In case of impairment of use-of-right asset, the Company shall make subsequent depreciation
as per the book value of use-of-right asset after the impairment loss is deducted.
24. Intangible assets
(1) Valuation method, service life and impairme nt 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 invested by investors, the actual cost
is determined by the agreed value in the investment contract or agreement. However, 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 year
Land use right 50 years
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30 patents 10 years
Software 3-5 years
Trademark or domain name 10 years
The Company’s land use rights are amortized evenly according to the lease term, starting 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 by applying 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.
25. Impairme nt of long-term assets
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On each balance sheet date, the Company shall audit the projects of its 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 test is carried out on the intangible assets with uncertain goodwill and
beneficial period at the end of each period, irrespective of whether there is any indication that the
assets may be impaired. If there is difficulty in 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 co mbination 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 will occur in the recent future in terms of the
economic, technical or legal environment of the operation of an enterprise, and the asset market
which 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.
26. Long-term unamortized 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.
27. Employee remuneration
(1) Accounting treatment method of short-term re muneration
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.
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(2) Accounting treatment method of post-employment benefits
The post-employment benefits mainly consist of 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 e mployee 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.
28. Lease liabilities
(1) Initial measurement
The Company shall initially measure the lease liabilities according to the present value of the
lease payment unpaid on the commencement date of the lease term.
1) Lease payment
The lease payment refers to the payment made by the Company to the leaser as for the right of
use the leased assets during the lease term, including: ① fixed payment and practical fixed payment,
with relevant lease incentive (if any) deducted; ② variable lease payments that are based on an
index or rate, which shall be determined at the time of initial measurement based on the index or
rate on the commencement date of the lease term; ③ the exercise price of a purchase option if the
Company is reasonably certain to exercise that option; ④the amount payable for exercising the
option to terminate the lease if the Company intends to exercise the option to terminate the lease
during the lease term; ⑤ expected payable amount based on secured residual value provided by the
Company.
2) Discount rate
In calculating the present value of the lease payments, the Company adopts the interest rate
embedded in the lease as the discount rate. If the Company is unable to determine the interest rate
embedded in the lease, it will adopt the incremental borrowing rate as the discount rate. The
incremental loan interest rate is defined as the interest rate that the Company would have to pay to
borrow, for a term similar to the duration of the lease and with similar security, the funds necessary
to obtain an asset of similar value to the asset by right of use in a similar economic environment.
(2) Subsequent measurement
When the lease term commences, the Company shall make subsequent measurement for the
lease liabilities on the basis of principles below: ① the carrying account of increased lease liabilities
when the interests of lease liabilities are recognized; ② the carrying account of decreased lease
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liabilities when the lease payment is made; ③ the book value of remeasured lease liabilities when
the lease payment is changed due to revaluation, lease change or other reasons.
The interest expenses of lease liabilities in each period of the lease term are calculated in
accordance with the fixed periodic interest rate, and are included to the current profit or loss, unless
capitalization is required. The periodic interest rate refers to the discount rate taken by the Company
for initial measurement or the revised discount rate taken by the Company when it is necessary to
remeasure the lease liabilities as per the revised discount rate due to lease payment change or lease
change.
(3) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond the
terms of the original contract, including increasing or terminating the right to use one or more
leased assets, extending or shortening the lease term stipulated in the contract, etc. The effective
date of lease change refers to the date when the Parties reach the agreement on lease change.
When the lease changes and meets the following conditions, the Company will treat it as a
separate lease: ① the lease change expands the lease scope by adding one or more right-of-use
leased assets; ② the increased consideration is equivalent to the single price of the expanded lease
scope adjusted according to the contract.
In case where accounting treatment is not made for lease change as a single lease, on the
effective date of lease change, the Company will appropriate the consideration of the changed
contract according to the relevant provisions of the lease criteria and redefine the updated lease term.
In addition, the Company will discount the changed lease payment according to the revised discount
rate, so as to remeasure the lease liabilities. In calculating the present value of the lease payment
after the change, the Company uses the interest rate implicit in lease for the remaining lease term as
the discount rate. If the interest rate implicit in lease for the remaining lease term cannot be
determined, the incremental borrowing interest rate of the lessee on the effective date of lease
change shall be used as the discount rate by the Company. With regard to the impact of the above
adjustment of lease liabilities, the Company adopts accounting methods in the following situations:
① In the event that the lease scope is narrowed down or the lease term is shortened as a result of the
lease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gains
or losses from the partial or complete termination of the lease shall be included into the current loss
and profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjust
the book value of the right-of-use assets accordingly.
29. 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 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; and 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.
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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.
30. 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 reserve 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 granting date, and the liabilities shall be increased accordingly.
If it is necessary to complete the services in the waiting period or achieve the specified 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 cost or expense based on the best
estimation of the excisable right, and the liabilities shall be adjusted accordingly according to 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.
31. Revenue
Operating revenues of the company are mainly from sales of goods, rendering labor service
and transferring right to use assets.
Revenue recognition principle
The Company recognizes the revenue upon fulfillment of its performance obligations within
the contract, that is, when the client obtains control of the relevant goods or services. Acquisition of
control over relevant goods or services means the ability to manage the use of such goods or the
provision of services and to receive almost all economic benefits therefrom.
The Company assesses the contract from the commencement date of the contract and
recognizes each individual performance obligation included by the contract, and determines if each
individual performance obligation will be fulfilled during a certain period or at a certain time point.
The performance obligations are fulfilled within a certain period once the Company meets one
of the following conditions. Otherwise, the Company is to fulfill the performance obligations at a
specified time point:
1) The client obtains and consumes the economic benefits while the Company fulfills the
performance obligations.
2) The client can control goods or services still under construction while the Company is still
in the process of fulfilling the performance obligations.
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3) 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 revenue 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 revenue at the time when the client obtains control over the relevant goods or services.
In judging whether the client has obtained control over goods or services, the Company shall
consider the following signs:
1) The Company has the current right to collect payment for the goods or services.
2) The Company has transferred the legal ownership of the goods to the client.
3) The Company has transferred physical possession of the goods to the client.
4) The Company has transferred the main risks and rewards of ownership of the goods to the
client.
5) The customer has accepted the goods or services, etc.
The Company lists the right to receive considerations for transfer of goods or services to the
customer as a contract asset, for which the impairment will be withdrawn on the basis of expected
credit loss. The right of the Company to unconditionally receive considerations from the customer
is listed as receivables. The Company presents the obligation to transfer goods or services to the
customer for considerations received or receivable from the customer as a contract liability.
Revenue measurement principle
1) If there are two or more performance obligations in the contract, the Company will
apportion the transaction price to each single performance obligation according to the relative
proportion of the separate selling price of the goods or services promised by the single performance
obligation at the beginning of the contract, and the revenue shall be measured according to the
transaction price apportioned to each single performance obligation.
2) The transaction price refers to the amount of consideration that the Company expects to
collect due to the 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 the
recognized accumulative revenue which is not likely to significantly turn back when relevant
uncertainty is eliminated. The expected amount to be returned to the client will be listed as a
liability and not be included into the transaction price.
3) 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
commencement 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.
Specific method for revenue recognition
Revenue recognized by time point
Selling electric appliances, fittings and materials by the Company is the performance
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obligation at a time point.
Revenue recognition conditions for domestic sales commodity: The Company has delivered
the product to the customer according to the contract terms and the customer has received the
product; the payment has been collected or the receipt voucher has been provided and relevant
economic profits might flow into the Company; main risks and remuneration as for the ownership
of the commodity have been transferred; and legal ownership and control right of the commodity
have been transferred.
Revenue recognition conditions for exported commodity: The Company has declared the
product to the customs and the product has been delivered according to the contract terms; the bill
of lading has been obtained, the payment has been collected or the receipt voucher has been
provided and relevant economic profits might flow into the Company; main risks and remuneration
as for the ownership of the commodity have been transferred; and legal ownership and control right
of the commodity have been transferred.
Revenue recognized by performance progress
The technical service revenue of the Company and the business contract between the operating
lease and the customer are the performance obligations to be performed within a period, for which
the revenue shall be recognized according to the performance progress.
32. Governme nt grants
The government grants of the Company include fiscal appropriation. Government grants
relating to assets refer to government grants obtained by the Company for purchasing and acquiring
long-term assets or forming long-term assets by other ways. The 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.
The government grants relating to assets are recognized as deferred income, and the
government subsidies relating to assets recognized as deferred income are included into the current
losses and profits according to the average distribution method within relevant asset service life.
If the relevant asset has been sold, transferred, retired or damaged before the end of the 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 are
recognized 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. Government grants unrelated to daily
activities will be 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:
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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.
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:
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.
33. Deferred income tax assets/liabilities
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 book
value of an asset or liability. For the deductible loss and tax credits that can be deducted a nnually 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.
34. Lease
(1) Accounting method for operating lease
(1) Identification of lease
Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain
period to obtain consideration contracts. On the commencement date of the contract, the Company
assesses whether the contract serves as the lease or includes the lease. If one party to the contract
transfers the right to control one or more identified assets during a certain period in exchange for
consideration, such contract is or includes lease. To determine whether the contract has transferred
the right to control the use of the identified assets in a certain period of time, the Company assesses
whether the customer in the contract is entitled to receive almost all the economic benefits arising
from the use of the identified assets during the use period and is entitled to manage the use of the
identified assets during the use period.
If a number of separate leases are contained in one contract, the Company will split the
contract and adopt accounting methods to each lease on an individual basis. If a contract includes
both lease and non-lease components, the Company will separate the lease from the non-lease
component before accounting treatment.
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(2) The Company serves as the lessee
At the commencement of the lease term, the right-of-use assets and lease liabilities shall be
recognized for the lease by the Company. The right-of-use assets are initially measured by cost,
including initial measurement amount of the lease liabilities, lease payment (deducting the amount
related to the lease incentives) paid on or before the first day of the lease term, initial direct costs
incurred and costs predicted to dismantle and remove leased assets, restore the location of the leased
assets or restore the leased assets to the state as agreed in the lease terms.
The right-of-use assets and lease liabilities shall be recognized for the lease by the Company as
the lessee.
2) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond the
terms of the original contract, including increasing or terminating the right to use one or more
leased assets, extending or shortening the lease term stipulated in the contract, etc. The effective
date of lease change refers to the date when the Parties reach the agreement on lease change.
When the lease changes and meets the following conditions, the Company will treat it as a
separate lease: ① the lease change expands the lease scope by adding one or more right-of-use
leased assets; ② the increased consideration is equivalent to the single price of the expanded lease
scope adjusted according to the contract.
In case where accounting treatment is not made for lease change as a single lease, on the
effective date of lease change, the Company will appropriate the consideration of the changed
contract according to the relevant provisions of the lease criteria and redefine the updated lease term.
In addition, the Company will discount the changed lease payment according to the revised discount
rate, so as to remeasure the lease liabilities. In calculating the present value of the lease payment
after the change, the Company uses the interest rate implicit in lease for the remaining lease term as
the discount rate. if the interest rate implicit in lease for the remaining lease term cannot be
determined, the incremental borrowing interest rate of the lessee on the effective date of lease
change shall be used as the discount rate by the Company. With regard to the impact of the above
adjustment of lease liabilities, the Company adopts accounting methods in the following situations:
① In the event that the lease scope is narrowed down or the lease term is shortened as a result of the
lease change, the lessee shall reduce the book value of the right-of-use assets, and the relevant gains
or losses from the partial or complete termination of the lease shall be included into the current loss
and profit. ② For the lease liabilities remeasured due to other lease changes, the lessee shall adjust
the book value of the right-of-use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases
at a low value when individual leased assets are brand new, the Company chooses not to recognize
the right-of-use assets and lease liabilities. Lease payments under short-term leases and leases of
low-value assets are recognized by the Company 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.
(3) The Company serves as the lessor
On the basis of the contract is evaluated as a lease or including a lease in (1), the Company, as
the lessor, divides the lease into financial lease and operating lease at the commencement of the
lease.
A lease that transfers in substance almost all the risks and rewards incident to ownership of a
leased asset is classified as a financial lease by the lessor. A lease other than the financial lease is an
operating lease.
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The Company usually classifies a lease as a financial lease if one or more of the following
situations exist: ① the ownership of the leased asset is transferred to the lessee at the expiration of
the lease term; ② the lessee has the right to choose to purchase the leased asset; the established
purchase price is expected to be much lower than the fair value of the leased asset when exercising
the right of choice, and hence it can be reasonably determined that the lessee will exercise this right
of choice on the inception of lease; ③ the lease term accounts for a substantial proportion (not less
than 75%) of the service life of the leased asset, notwithstanding that the ownership of the asset will
not be transferred; ④ on the inception of lease, the present value of the lease receipts is almost
equal to the fair value of the leased asset (not less than 90% of the fair value of the leased asset.);
and ⑤ the leased assets are of a specialized nature that only the lessee can use them without making
major modifications. The Company may also classify a lease as a financial lease if one or more of
the following signs exist: ① if the lessee cancels the lease, the resulting loss to the lessor shall be
borne by the lessee; ② the gain or loss arising from the fluctuation in the fair value of the residual
value of the asset shall be attributable to the lessee; and ③ the lessee is able to continue the lease to
the next period at a rent much lower than the market level.
2) Accounting treatment of operating leases
Treatment of rent
The Company adopts the straight-line method to recognize the lease receipts from operating
leases as rental income during all periods within the lease term.
Incentive measures provided
If a rent-free period is provided, total rent shall be amortized by adopting the straight-line
method within the lease term not excluding the rent-free period, and the rental income shall be
recognized in the rent-free period. Certain costs incurred by the lessee, if undertaken by the
Company, shall be excluded from total rental income and the balance of rental income after
deducting these costs shall be amortized within the lease term.
Initial direct costs
The initial direct costs incurred by the Company related to the operating lease shall be
capitalized to the cost of leased underlying asset and shall be included in current profits and losses
on the same basis as recognition of rental income during the lease term.
Depreciation
For fixed assets included in assets under operating leases, accrual depreciation shall base on
the depreciation policy adopted by the Company for similar assets. Other assets under operating
leases shall be amortized in a systematic and reasonable manner.
Variable lease payments
Variable lease payments acquired by the Company in connection with operating leases that are
not included in the lease receipts are recognized in the current profits and losses when actually
incurred.
Change of operating lease
In case of changes in the operating lease, the Company will treat it as a new lease as of the
effective date of the change, and the lease advance or receivables related to the lease before the
change will be regarded as the amount received from the new lease.
(2) Accounting methods of financial lease
Initial measurement
On the commencement date of lease term, the Company recognizes financial lease receivables
for financial lease and derecognizes financial lease assets. Upon initial measurement of financial
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lease receivables, the Company takes net investment in lease as entry value of financial lease
receivables.
Net investment in lease is the sum of unsecured residual value and the present value of
outstanding lease receipts discounted on interest rate implicit in lease on the commencement date of
the lease term. Lease receipts refer to the amount that the lessor shall collect from the lessee for
transferring the right to use the leased assets during the lease term, including: ① the amount of
fixed payment and substantial fixed payment to be paid by the lessee, net of relevant amount of
lease incentives if any; ② variable lease payments that are based on an index or rate, which shall be
determined at the time of initial measurement based on the index or rate on the commencement date
of the lease term; ③ exercise price of call option, given that the lessee will reasonably exercise such
option; ④ amount payable by the lessee for exercising the option to terminate the lease, if it is
indicated during the lease term that the lessee will exercise the option to terminate the lease; ⑤ The
residual value of the guarantee provided to the lessor by the lessee, a party related to the lessee and
an independent third party with the financial ability to meet the guarantee obligation.
Subsequent measurement
The Company calculates and recognizes the interest income in each period of the lease term
according to the fixed periodic rate. Such periodic rate refers to the implicit discount rate used to
determine the net investment in the lease (in case of sublease, the discount rate of the original lease
is adopted, if the interest rate implicit in lease of the sublease cannot be determined), or the revised
discount rate determined according to the relevant provisions when the change of the financial lease
has not been treated as a separate lease for accounting, and it is satisfied that the lease will be
classified as the financial lease, if the change takes effect at the beginning of the lease.
Accounting treatment of lease change
When a change happens to the financial lease and meets the following conditions, the
Company will treat it as a separate lease: ① the change expands the lease scope by increasing the
right to use one or more leased assets; ② the increased consideration is equivalent to the single
price for the expanded portion of lease scope adjusted according to contract circumstances.
If such a change to the financial lease is not accounted for as a separate lease and the condition
is satisfied that if the change becomes effective on the commencement date of the lease, the lease is
classified as an operating lease, the Company will account for it as a new lease from the effective
date of the lease change and regard the net lease investment prior to the effective date of t he lease
change as the book value of the leased asset.
35. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
On December 7, 2018, the Ministry of Finance revised and issued the Chinese Accounting
Standards No. 21-Lease (hereinafter referred to as the CAS 21). The Company began to carry out
accounting treatment in accordance with the newly revised standards as mentioned above from
January 1, 2021.
(2) Significant accounting estimate changes
□ Applicable √ Not Applicable
(3) Relevant financial statement ite ms at the beginning of 2021 when the adjustme nts
stipulated in the new CAS 21-Lease apply for the first time
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Should the balance sheet items be adjusted at the beginning of the year?
Yes No
(4) Notes to comparative data at the early stage of retroactive adjustment stipulated in the
new CAS 21-Lease apply from 2021 for the first time
□ Applicable √ Not Applicable
VI. Taxation
1. Main tax categories and tax rates
Category Tax base Tax rate
Income from sales of goods 13%
Added-value tax Income from provision of technical services 6%
Rental income 5%, 9%
City maintenance and construction tax Turnover tax paid actually 7%
Education surcharge Turnover tax paid actually 3%
Local education surcharge Turnover tax paid actually 2%
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%
Disclosure of taxpayers with different corporate income tax rates
Name of taxpayer Income tax rate
Hangzhou Robam Appliances Co., Ltd. 15%
Shengzhou Kinde Intelligent Kitchen Appliances Co.,
15%
Ltd.
Zhejiang Cookingfuture Technology Co., Ltd. 25%
Beijing Robam Appliances Sales Co., Ltd. 25%
Shanghai Robam Appliances Sales Co., Ltd. 25%
Hangzhou MingQi Electric Co., Ltd. 25%
De Dietrich Household Appliances Trading (Shanghai)
25%
Co., Ltd.
Hangzhou Robam Fuchuang Investment Management
25%
Co., Ltd.
2. Preferential tax policy
Preferential income tax policy
The Company obtained the Certificate of High-Tech Enterprise (Certificate No.:
GR202,033,007,142) jointly issued by Zhejiang Provincial Department of Science and Technology,
Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, State Taxation
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Administration, and Local Taxation Bureau of Zhejiang Province on December 1, 2020. 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, 2020 to December 31, 2022), and the income tax shall be levied at the rate of
15%.
The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.
(hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise
(Certificate No.: GR201,933,002,261) jointly issued by Zhejiang Provincial Department of Science
and Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service
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
Cash in hand 193,275.57 110,770.11
Deposit in bank 4,141,172,524.88 3,885,907,031.42
Other cash and cash equivalents 48,684,204.89 35,034,898.78
Total 4,190,050,005.34 3,921,052,700.31
Note: The other cash and cash equivalents at the end of the accounting period are RMB
48,684,204.89, including the L/C margin of RMB 43,631,832.10, and the bill acceptance margin of
RMB 4,922,294.81, the use of which are limited; and the Alipay balance is RMB 130,077.98, which
can be withdrawn without any limit at any time.
2. Financial assets held for trading
In RMB
Item Ending balance Beginning balance
Financial assets measured at fair
2,019,000,000.00 2,352,000,000.00
value through profit or loss
Including:
financial products 2,019,000,000.00 2,352,000,000.00
Including:
Total 2,019,000,000.00 2,352,000,000.00
3. Notes receivable
(1) Classified presentation of notes receivable
In RMB
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Item Ending balance Beginning balance
Banker’s acceptance 516,224,844.51 850,950,227.31
Trade acceptance 1,426,292,444.23 981,751,215.77
Total 1,942,517,288.74 1,832,701,443.08
In RMB
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type Book Book
Percentage Percentage value Percentage Percentage value
Amount Amount Amount Amount
(%) of provision (%) of provision
Notes
receivable
with an 13,766,80 9,636,76 4,130, 11,176,8 7,823,79 3,353,
0.68% 70.00% 0.59% 70.00%
individual 0.14 0.10 040.04 46.26 2.38 053.88
bad debt
provision
Including:
Notes
receivable
1,938, 1,829,
with a 2,018,738 80,351,2 1,887,83 58,483,3
99.32% 3.98% 387,24 99.41% 3.10% 348,38
collective ,466.57 17.87 1,706.05 16.85
8.70 9.20
bad debt
provision
Including:
516,22 850,95
Banker’s 516,224,8 850,950,
25.40% 4,844. 44.81% 0,227.
acceptance 44.51 227.31
51 31
1,422, 978,39
Trade 1,502,513 80,351,2 1,036,88 58,483,3
73.92% 5.35% 162,40 54.60% 5.64% 8,161.
acceptance ,622.06 17.87 1,478.74 16.85
4.19 89
1,942, 1,832,
2,032,505 89,987,9 1,899,00 66,307,1
Total 100.00% 4.43% 517,28 100.00% 3.49% 701,44
,266.71 77.97 8,552.31 09.23
8.74 3.08
Individual bad debt provision:
In RMB
Ending balance
Name Percentage of Reasons for
Book balance Bad debt reserve
provision provision
Trade acceptance
with an individual 13,766,800.14 9,636,760.10 70.00%
bad debt provision
Individual bad debt provision:
In RMB
Ending balance
Name
Book balance Bad debt reserve Percentage of provision
Banker’s
acceptances 516,224,844.51 /
combined
Trade acceptances
1,502,513,622.06 80,351,217.87 5.35%
combined
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Total 2,018,738,466.57 80,351,217.87 -- --
(2) Bad de bt 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 Write Ending balance
balance Provision Other
reversal -off
Trade
66,307,109.23 23,680,868.74 89,987,977.97
acceptance
Total 66,307,109.23 23,680,868.74 89,987,977.97
(3) Notes receivable that has been endorsed or discounted by the Company and not due on
the balance sheet date at the end of the period
In RMB
Item Ending amount derecognized Ending amount not derecognized
Trade acceptance 10,000,000.00
Total 10,000,000.00
(4) Notes transferred to accounts receivable by the Company due to drawer’s non-
performance at the end of the period
In RMB
Amount of accounts receivable transferred at the end of
Item
the period
Trade acceptance 85,226,731.74
Total 85,226,731.74
4. Accounts receivable
(1) Classified disclosure of accounts receivable
In RMB
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type
Book Book
Percentage
Percentage value Percentage Percentage value
Amount Amount of Amount Amount
(%) (%) of provision
provision
Accounts
receivable
2,209
with 12,010,02 9,800,30 15,164,0 12,320,9 2,843,14
1.13% 81.60% ,719. 1.40% 81.25%
individual 4.39 5.29 80.60 40.24 0.36
10
bad debt
provisions
Including:
Accounts 1,048,911, 98.87% 63,083,7 6.01% 985,8 1,065,68 98.60% 60,287,5 5.66% 1,005,39
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receivable 956.85 52.99 28,20 0,355.15 49.11 2,806.04
with a 3.86
collective
bad debt
provision
Including:
988,0
1,060,921, 72,884,0 1,080,84 72,608,4 1,008,23
Total 100.00% 6.87% 37,92 100.00% 6.72%
981.24 58.28 4,435.75 89.35 5,946.40
2.96
Individual bad debt provision:
In RMB
Ending balance
Name Percentage of Reasons for
Book balance Bad debt reserve
provision provision
Accounts receivable
with insignificant
Expected to be
single amount and 4,644,294.05 4,644,294.05 100.00%
irrecoverable
individual provision
for bad debt
Accounts receivable
with insignificant Expected to be
single amount and 7,365,730.34 5,156,011.24 70.00% exposed to recovery
individual provision risk
for bad debt
Total 12,010,024.39 9,800,305.29 -- --
In RMB
Ending balance
Name
Book balance Bad debt reserve Percentage of provision
Within 1 year 929,679,608.70 46,483,980.43 5.00%
1-2 years 102,491,487.55 10,249,148.75 10.00%
2-3 years 10,312,493.21 2,062,498.64 20.00%
3-4 years 3,961,386.81 1,980,693.40 50.00%
4-5 years 797,744.02 638,195.21 80.00%
More than 5 years 1,669,236.56 1,669,236.56 100.00%
Total 1,048,911,956.85 63,083,752.99 --
Disclosed based on the aging of accounts receivable
In RMB
Aging Ending balance
Within 1 year (including 1 year) 936,666,379.48
1-2 years 104,644,092.16
2-3 years 10,312,493.21
More than 3 years 9,299,016.39
3-4 years 3,961,386.81
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4-5 years 797,744.02
More than 5 years 4,539,885.56
Total 1,060,921,981.24
(2) Bad de bt 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 Ending
Type Recovery or
balance Provision Write-off Other balance
reversal
Bad debt reserves
72,884,058.
for accounts 72,608,489.35 4,852,436.13 4,576,867.20
28
receivable
72,884,058.
Total 72,608,489.35 4,852,436.13 4,576,867.20
28
(3) Top five debtors with the biggest ending balances of accounts receivable
In RMB
Proportion in the total
Ending balance of accounts Ending balance of bad debt
Unit ending balance of accounts
receivable reserves
receivable
Unit 1 181,717,542.00 17.13% 9,085,877.10
Unit 2 82,536,456.34 7.78% 4,126,822.82
Unit 3 60,191,842.27 5.67% 6,019,184.23
Unit 4 29,324,596.32 2.76% 1,466,229.82
Unit 5 24,904,134.49 2.35% 1,245,206.72
Total 378,674,571.42 35.69%
5. Advance payments
In RMB
Ending balance Beginning balance
Aging Percentage
Amount Percentage (%) Amount
(%)
Within 1 year 160,166,532.70 99.35% 68,516,272.50 98.04%
1-2 years 1,049,895.82 0.65% 1,373,126.97 1.96%
Total 161,216,428.52 -- 69,889,399.47 --
The advance payments balance of the top five payers by the end of the current period totaled
RMB 108,733,276.25, accounting for 67.45% of the total.
6. Other receivables
In RMB
Item Ending balance Beginning balance
Other receivables 93,254,368.24 56,589,791.38
Total 93,254,368.24 56,589,791.38
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1) Classification of other receivables by nature
In RMB
Initial book balance at the
Nature of receivable Book balance at the end of the period
beginning of the period
Security/guarantee deposits 43,231,981.28 39,954,577.27
Collections by a third party 48,933,751.24 20,064,674.31
Cash reserve 14,429,760.30 4,326,156.43
Withholdings 4,908,658.12 2,740,994.81
Other 3,089,259.44 3,306,429.16
Total 114,593,410.38 70,392,831.98
2) Bad de bt provision
In RMB
Phase I Phase II Phase III
Expected credit loss
Bad debt provision Expected credit Expected credit loss over Total
over the entire duration
loss over the the entire duration (with
(without credit
next 12 months credit impairment)
impairment)
Balance on January
13,803,040.60 13,803,040.60
1, 2021
Balance on January
1, 2021 in the —— —— —— ——
current period
Provision in the
7,536,001.54 7,536,001.54
current period
Balance on June 30,
21,339,042.14 21,339,042.14
2021
Changes in the book balance with significant change in amount of the loss provision in the current
period
□ Applicable √ Not applicable
Disclosed based on the aging of accounts receivable
In RMB
Aging Ending balance
Within 1 year (including 1 year) 85,635,997.90
1-2 years 5,324,973.46
2-3 years 3,992,295.51
More than 3 years 19,640,143.51
3-4 years 1,938,641.17
4-5 years 15,660,400.00
More than 5 years 2,041,102.34
Total 114,593,410.38
3) Bad de bt provision, and its recovery or reversal in the current period
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Provision for bad debts in the current period:
In RMB
Amount of change in the current period
Beginning
Type Recovery Ending balance
balance Provision Write-off Other
or reversal
Bad debt reserve
for other 13,803,040.60 7,536,001.54 21,339,042.14
receivables
Total 13,803,040.60 7,536,001.54 21,339,042.14
4) Top five debtors with the biggest ending balances of other receivables
In RMB
Proportion in the
total ending Ending balance
Nature of
Unit Ending balance Aging balance of other of bad debt
receivable
accounts provision
receivable
Collections by a
Unit 1 48,933,751.24 Within 1 year 42.70% 2,446,687.56
third party
Security/guarant
Unit 2 14,778,000.00 4-5 years 12.90% 11,822,400.00
ee deposits
Unit 3 Cash reserve 2,957,384.30 Within 1 year 2.58% 147,869.22
Security/guarant
Unit 4 2,400,000.00 Within 1 year 2.09% 120,000.00
ee deposits
Collections by a
Unit 5 2,288,880.00 Within 1 year 2.00% 114,444.00
third party
Total -- 71,358,015.54 -- 62.27% 14,651,400.78
7. Inventory
(1) Classification of inventories
In RMB
Ending balance Beginning balance
Provision for
Provision for obsolete
obsolete inventory or for
Item inventory or for impairment of
Book Book
impairment of Book value the cost of Book value
balance balance
the cost of contract
contract performance
performance
119,026,786 119,026,786 90,099,485. 90,099,485.
Raw materials
.89 .89 06 06
Products in 96,486,420. 96,486,420. 56,669,379. 56,669,379.
process 19 19 52 52
Merchandise 377,957,760 346,657,903 356,798,655 325,498,798
31,299,857.11 31,299,857.11
inventory .48 .37 .96 .85
Goods 994,360,949 994,360,949 895,794,857 895,794,857
shipped in .65 .65 .43 .43
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transit
Low-cost
consumables 22,282,750. 22,282,750. 18,026,823. 18,026,823.
and packing 38 38 98 98
materials
1,610,114,6 1,578,814,8 1,417,389,2 1,386,089,3
Total 31,299,857.11 31,299,857.11
67.59 10.48 01.95 44.84
(2) Provision for obsolete inventory or for impairment of the cost of contract performance
In RMB
Increased amount
Decreased amount in the
in the current
current period
Item Beginning balance period Ending balance
Reversals or
Provision Other Other
write-off
Merchandise
31,299,857.11 31,299,857.11
inventory
Total 31,299,857.11 31,299,857.11
8. Other current assets
In RMB
Item Ending balance Beginning balance
Input tax to be deducted 59,794.96 667,378.56
Total 59,794.96 667,378.56
9. Long-term equity investment
In RMB
Increase/decrease in the current period
Cash
Adju
divi
stme
dend
nt of Othe
Addi s or Ending
Beginning Neg Investment othe r
tiona profi Provis Ending balance balance of
Investee balance (book ative profit or loss r chan
l ts ion for Othe (book value) impairment
value) inve recognized using com ges
inve decl impair r provision
stme the equity preh in
stme ared ment
nt method ensi equit
nt and
ve y
distr
inco
ibute
me
d
I. Joint venture
De Dietrich
Trade
3,452,769.59 -1,440,070.07 2,012,699.52
(Shanghai)
Co., Ltd.
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Subtotal 3,452,769.59 -1,440,070.07 2,012,699.52
II. Associated enterprises
Total 3,452,769.59 -1,440,070.07 2,012,699.52
10. Other equity instrume nt 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
2,116,023.22 2,116,023.22
Technology Co., Ltd.
Total 102,116,023.22 102,116,023.22
Disclosure of non-tradable equity instrument investment by item in the current period
In RMB
Reason for being
Amount designated to be
Reason for the
transferred from measured by fair
Recognized transfer of other
Accumulated Accumulated other value and the
Name of item dividends comprehensive
gains losses comprehensive change being
income incomes to
incomes to recorded in other
retained earnings
retained earnings comprehensive
income
Suzhou
Industrial Park
Ruican Held not for the
Investment purpose of
Enterprise trading
(Limited
Partnership)
Shanghai
MXCHIP Held not for the
Information 17,832,510.78 purpose of
Technology Co., trading
Ltd.
11. Investment real estate
(1) Investment real estate under the cost measure ment mode
In RMB
Item Buildings Total
I. Original book value
1. Beginning balance 2,686,483.26 2,686,483.26
2. Increased amount in the current period 16,307,011.82 16,307,011.82
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Transfers from inventories/fixed assets/construction
16,307,011.82 16,307,011.82
in progress
3. Decreased amount in the current period
4. Ending balance 18,993,495.08 18,993,495.08
II. Accumulated depreciation and amortization
1. Beginning balance 95,481.42 95,481.42
2. Increased amount in the current period 321,998.30 321,998.30
(1) Accrual or amortization 321,998.30 321,998.30
3. Decreased amount in the current period
4. Ending balance 417,479.72 417,479.72
III. Impairment provision
IV. Book value
1. Ending book value 18,576,015.36 18,576,015.36
2. Beginning book value 2,591,001.84 2,591,001.84
12. Fixed assets
In RMB
Item Ending balance Beginning balance
Fixed assets 922,789,184.72 824,978,354.71
Disposal of fixed assets 2,813.32
Total 922,791,998.04 824,978,354.71
(1) Fixed assets
In RMB
Houses and Machine and Transportatio Other
Item Total
buildings equipment n equipment equipment
I. Original book value:
78,572,369 1,417,342,194.6
1. Beginning balance 701,928,665.91 617,955,333.33 18,885,826.18
.24 6
2. Increased amount in 1,448,998.
142,616,945.45 24,200,850.62 365,424.79 168,632,219.51
the current period 65
1,448,998.
(1) Purchase 24,200,850.62 365,424.79 26,015,274.06
65
(2) Transfer from
construction in 142,616,945.45 142,616,945.45
progress
3. Decreased amount in
28,456,588.91 5,814,878.76 282,915.30 561,282.70 35,115,665.67
the current period
(1) Disposal or
12,149,577.09 5,814,878.76 282,915.30 561,282.70 18,808,653.85
retirement
(2) Other decreases 16,307,011.82 16,307,011.82
79,460,085 1,550,858,748.5
4. Ending balance 816,089,022.45 636,341,305.19 18,968,335.67
.19 0
II. Accumulated
depreciation
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50,106,838
1. Beginning balance 240,819,699.50 289,865,433.64 11,571,868.20 592,363,839.95
.61
2. Increased amount in 4,142,224.
17,027,411.30 28,508,814.35 1,124,712.23 50,803,162.80
the current period 92
4,142,224.
(1) Provision 17,027,411.30 28,508,814.35 1,124,712.23 50,803,162.80
92
3. Decreased amount in
9,537,411.12 4,774,457.02 268,769.54 516,801.29 15,097,438.97
the current period
(1) Disposal or
9,537,411.12 4,774,457.02 268,769.54 516,801.29 15,097,438.97
retirement
53,732,262
4. Ending balance 248,309,699.68 313,599,790.97 12,427,810.89 628,069,563.78
.24
III. Impairment provision
IV. Book value
25,727,822
1. Ending book value 567,779,322.77 322,741,514.22 6,540,524.78 922,789,184.72
.95
2. Beginning book 28,465,530
461,108,966.41 328,089,899.69 7,313,957.98 824,978,354.71
value .63
13. Construction in process
In RMB
Item Ending balance Beginning balance
Construction in process 515,737,483.33 463,424,647.46
Total 515,737,483.33 463,424,647.46
(1) Construction in progress
In RMB
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Construction of Maoshan
358,193,690. 358,241,059
Intelligent Manufacturing 358,193,690.32 358,241,059.59
32 .59
Base infrastructure
Shengzhou Chengnan 138,799,083. 73,511,454.
138,799,083.39 73,511,454.76
project 39 76
14,096,794.
Dark Factory project 2,592,369.95 2,592,369.95 14,096,794.95
95
Riveting equipment 4,568,965.5
4,568,965.52
project 2
Customized management 3,770,316.3
6,056,606.19 6,056,606.19 3,770,316.32
software 2
2,219,316.2
Robam Mansion project 4,210,939.68 4,210,939.68 2,219,316.28
8
1,663,716.9
Air lines project 1,663,716.90
0
Project of the Second 1,530,973.4
1,185,840.71 1,185,840.71 1,530,973.46
Production Department 6
Other smaller projects 4,698,953.09 4,698,953.09 3,822,049.68 3,822,049.6
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8
515,737,483. 463,424,647
Total 515,737,483.33 463,424,647.46
33 .46
(2) Current changes in major projects under construction
In RMB
(1) Changes in major projects under construction
Decrease in current Period
Beginning Increase in the
Name of project Transfer-in fixed Other Ending balance
balance current period
assets decreases
Construction of
Maoshan Intelligent
358,241,059.59 142,569,576.18 142,616,945.45 358,193,690.32
Manufacturing Base
infrastructure
Shengzhou
73,511,454.76 65,287,628.63 138,799,083.39
Chengnan project
Robam Mansion
2,219,316.28 1,991,623.40 4,210,939.68
project
Total 433,971,830.63 209,848,828.21 142,616,945.45 501,203,713.39
(Cont.)
Proportion of Including:
Accumulated Interest
accumulated Project capitalized
amount of capitalization Funding
Name of project Budget project progress interests for
interest rate in the source
investment in (%) current
capitalization current period
the budget (%) period
Construction of
Maoshan Intelligent
633,650,000.00 83.77 83.77 Self-financing
Manufacturing Base
infrastructure
Shengzhou
240,960,000.00 67.25 67.25 Self-financing
Chengnan project
Robam Mansion
546,000,000.00 0.77 0.77 Self-financing
project
Total 1,420,610,000.00 — — —
14. Right-of-use assets
In RMB
Item Rented properties Total
2. Increased amount in the current
20,916,979.79 20,916,979.79
period
4. Ending balance 20,916,979.79 20,916,979.79
2. Increased amount in the current
837,925.59 837,925.59
period
(1) Provision 837,925.59 837,925.59
4. Ending balance 837,925.59 837,925.59
1. Ending book value 20,079,054.20 20,079,054.20
15. Intangible assets
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(1) Intangible assets
In RMB
Item Land use right Software Trademark Patents Total
I. Original book
value
1. Beginning
225,656,679.95 52,340,766.57 24,624,622.64 7,300,000.00 309,922,069.16
balance
2. Increased
amount in the 105,929.21 105,929.21
current period
(1) Purchase 105,929.21 105,929.21
4. Ending
225,656,679.95 52,446,695.78 24,624,622.64 7,300,000.00 310,027,998.37
balance
II. Accumulated
amortization
1. Beginning
25,628,097.71 40,125,345.47 6,143,693.36 2,807,692.30 74,704,828.84
balance
2. Increased
amount in the 2,254,211.14 2,428,448.54 1,231,231.12 561,538.46 6,475,429.26
current period
(1) Provision 2,254,211.14 2,428,448.54 1,231,231.12 561,538.46 6,475,429.26
4. Ending
27,882,308.85 42,553,794.01 7,374,924.48 3,369,230.76 81,180,258.10
balance
III. Impairment
provision
IV. Book value
1. Ending book
197,774,371.10 9,892,901.77 17,249,698.16 3,930,769.24 228,847,740.27
value
2. Beginning
200,028,582.24 12,215,421.10 18,480,929.28 4,492,307.70 235,217,240.32
book value
16. Goodwill
(1) Original book value of goodwill
In RMB
Decrease in
Increase in the
current
current period
Name of investee or item that Beginning Period Ending
generates goodwill balance Generated by balance
business Disposal
combination
Shengzhou Kinde Intelligent Kitchen
80,589,565.84 80,589,565.84
Appliances Co., Ltd.
Total 80,589,565.84 80,589,565.84
The Company recognizes Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.
("Shengzhou Kinde") as an assets group. Goodwill at the end of this period is in the same assets
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group as recognized upon goodwill impairment test at the date of purchase and in previous year.
Procedures and parameters of goodwill impairment test and methods to recognize goodwill
impairment loss
The Company appoints Zhonghe Appraisal Co., Ltd. (Zhonghe Appraisal) to evaluate the
Shengzhou Kinde assets group, so as to determine if there is goodwill impairment. According to the
ZHZBZ (2021) No. BJU3,002 appraisal report for the purpose of goodwill impairment test issued
by Zhonghe Appraisal, Zhonghe Appraisal has determined according to the five-year cash flow
estimate approved by the management, reckoned the cash flow after the five-year forecast period
using certain long-term average growth rate, calculated using the present value model of future cash
flow, and, under the going-concern assumption, made goodwill impairment test with the higher of
the net value of assets’ fair value minus disposal expenses and the present value of estimated assets’
future cash flow. As tested, the recoverable amount of Shengzhou Kinde assets group is higher than
the book value of the assets group containing goodwill. No sign of goodwill impairment is found.
17. Long-term deferred expenses
In RMB
Amount of
Increased
Beginning amortization in
Item amount in the Other decreases Ending balance
balance the current
current period
period
Service fee 317,094.77 656,227.92 88,451.08 884,871.61
Consulting fee 241,087.85 121,512.86 195,412.82 167,187.89
Membership
37,665.20 18,677.84 18,987.36
training fee
Brand
endorsement 1,202,511.03 602,889.30 599,621.73
cost
Decoration cost 2,830,658.74 707,664.69 2,122,994.05
Total 1,798,358.85 3,608,399.52 1,613,095.73 3,793,662.64
18. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets before offset
In RMB
Ending balance Beginning balance
Item Deductible Deductible
temporary Deferred tax assets: temporary Deferred tax assets:
differences differences
Deferred income tax
assets before offset
recognized based on 899,875,322.49 134,981,298.35 399,311,723.24 59,896,758.48
the provisional
estimated expenses
Credit impairment
188,275,078.39 28,797,734.53 152,718,639.18 24,152,559.74
provision
Deferred income tax
assets before offset
112,098,466.16 16,814,769.92 121,306,538.90 18,195,980.84
recognized based on
the deferred income
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Asset impairment
31,299,857.11 4,694,978.57 31,299,857.11 4,694,978.56
provision
Change of the fair
value of other equity
17,832,510.78 2,674,876.62 17,832,510.78 2,674,876.62
instrument
investments
Unrealized profits of
8,514,431.25 2,128,622.43 10,991,208.96 2,747,344.24
internal transactions
Accrued and unpaid
863,548.19 129,532.23
salaries
Deferred income tax
assets before offset
802,690.58 123,572.10
recognized due to
equity incentive
Total 1,258,698,356.76 190,215,852.52 734,324,026.36 112,492,030.71
(2) Deferred income tax liabilities before offset
In RMB
Ending balance Beginning balance
Item Taxable Deferred Taxable Deferred
temporary income tax temporary income tax
difference liabilities difference liabilities
Asset appraisal appreciation arising
from business combination where the
27,977,403.00 4,196,610.45 30,040,521.60 4,506,078.24
acquired company is not controlled by
the same party after the combination
Temporary taxable difference incurred
5,069,116.27 760,367.44 4,697,876.68 704,681.50
from pre-tax deduction of fixed assets
Total 33,046,519.27 4,956,977.89 34,738,398.28 5,210,759.74
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
Amount of deferred
Initial amount of
income tax assets Ending balance of Beginning balance
deferred income tax
offset against deferred income tax of deferred income
Item assets offset against
deferred income tax assets or liabilities tax assets or
deferred income tax
liabilities at the end after offset liabilities after offset
liabilities
of the period
Deferred income tax
190,215,852.52 112,492,030.71
assets:
Deferred income tax
4,956,977.89 5,210,759.74
liabilities
(4) Presentation of unrecognized deferred income tax assets
In RMB
Item Ending balance Beginning balance
Deductible tax losses 12,976,605.12 9,798,260.49
Total 12,976,605.12 9,798,260.49
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(5) The deductible losses of unrecognized deferred income tax assets will be due in the
following years
In RMB
Year Ending amount Beginning amount Remarks
2021 39,785.54
2022 39,552.31 39,552.31
2023 6,714.34 6,714.34
2024 5,602.28 5,602.28
2025 9,706,606.02 9,706,606.02
2026 3,218,130.17
Total 12,976,605.12 9,798,260.49 --
19. Other non-current assets
In RMB
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayments for
14,498,895.3 3,624,837.5
equipment 14,498,895.36 3,624,837.56
6 6
purchase
Advances for
57,442.11 57,442.11
intangible assets
14,498,895.3 3,682,279.6
Total 14,498,895.36 3,682,279.67
6 7
20. Short-term borrowings
(I) Short-term borrowing classification
In RMB
Item Ending balance Beginning balance
Credit borrowings 11,913,223.08 6,076,177.30
Total 11,913,223.08 6,076,177.30
21. Notes payable
In RMB
Type Ending balance Beginning balance
Banker’s acceptance 697,267,275.89 751,802,498.92
Total 697,267,275.89 751,802,498.92
22. Accounts payable
(1) Presentation of accounts payable
In RMB
Item Ending balance Beginning balance
Payment for materials 991,886,302.77 950,631,079.92
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Payment for expenses 969,404,774.82 709,723,793.53
Payment for construction 147,363,273.71 48,606,778.41
Payment for equipment 14,101,310.30 14,870,556.23
Total 2,122,755,661.60 1,723,832,208.09
As of June 30, 2021, the important accounts payable with an age of more than one year totaled RMB
13,039,032.73, mainly involving the outstanding payment for expenses.
23. Contract liabilities
In RMB
Item Ending balance Beginning balance
Advances on sales 1,032,445,046.81 949,591,228.35
Total 1,032,445,046.81 949,591,228.35
24. Employee benefits payable
(1) Presentation of employee benefits payable
In RMB
Beginning Increase in the Decrease in the
Item Ending balance
balance current period current period
I. Short-term benefits 123,492,155.96 325,183,108.11 416,572,328.06 32,102,936.01
II. Post employment benefits -
2,638,235.28 25,555,412.06 27,322,772.95 870,874.39
defined contribution plan
III. Termination benefits 574,030.84 574,030.84
Total 126,130,391.24 351,312,551.01 444,469,131.85 32,973,810.40
(2) Presentation of short-term benefits
In RMB
Beginning Increase in the Decrease in
Item Ending balance
balance current period current Period
1. Salaries, bonuses, subsidies
118,930,729.93 273,750,529.66 361,720,765.16 30,960,494.43
and allowances
2. Employee welfare 13,011,988.18 13,010,348.18 1,640.00
3. Social insurance 3,928,826.98 17,646,477.88 21,004,042.56 571,262.30
Including: medical insurance 3,847,685.58 16,948,236.65 20,250,041.93 545,880.30
Work-related injury
81,141.40 698,241.23 754,000.63 25,382.00
insurance
4. Housing funds 282,148.00 13,667,422.48 13,761,500.48 188,070.00
5. Labor union and staff
350,451.05 6,303,999.31 6,272,981.08 381,469.28
education expenses
Equity incentive 802,690.60 802,690.60
Total 123,492,155.96 325,183,108.11 416,572,328.06 32,102,936.01
(3) Presentation of the defined contribution plans
In RMB
Item Beginning balance Increase in the Decrease in the Ending balance
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current period current period
1. Basic pensions 2,542,370.21 24,660,456.62 26,364,987.52 837,839.31
2. Unemployment
95,865.07 894,955.44 957,785.43 33,035.08
insurance
Total 2,638,235.28 25,555,412.06 27,322,772.95 870,874.39
25. Taxes payable
In RMB
Item Ending balance Beginning balance
Business income tax 199,671,229.08 111,445,197.66
VAT 101,960,486.71 61,150,126.40
City maintenance and construction
7,218,768.32 3,937,862.94
tax
Individual income tax 1,060,179.40 1,526,364.72
Education surcharge 3,093,757.85 1,687,655.54
Local education surcharge 2,062,505.31 1,125,103.76
Stamp tax 314,417.30 507,609.14
Land use tax 340,344.00
Real estate tax 169,100.88 166,973.35
Total 315,550,444.85 181,887,237.51
26. Other payables
In RMB
Item Ending balance Beginning balance
Other payables 255,046,157.84 242,559,615.30
Total 255,046,157.84 242,559,615.30
1) Other payables presented by nature
In RMB
Item Ending balance Beginning balance
Security deposits payable 245,046,047.04 234,180,292.44
Guarantee deposits payable 5,065,169.30 4,539,028.30
Collections by a third party 3,396,348.83 2,616,338.90
Other 1,538,592.67 1,223,955.66
Total 255,046,157.84 242,559,615.30
Note: As of June 30, 2021, the important other accounts payable with an age of more than one year totaled RMB
225,447,277.87, mainly involving the sales deposits.
27. Non-current liabilities due within one year
In RMB
Item Ending balance Beginning balance
Lease liabilities due within one year 2,217,436.33
Total 2,217,436.33
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28. Other current liabilities
In RMB
Item Ending balance Beginning balance
Output tax to be transferred 127,774,706.49 116,535,407.26
Endorsed trade acceptance 10,000,000.00 10,000,000.00
Total 137,774,706.49 126,535,407.26
29. Lease liabilities
In RMB
Item Ending balance Beginning balance
Lease payment amount 24,597,496.28
Less: unrecognized financial -5,840,773.05
expenses
Total 18,756,723.23
30. Deferred income
In RMB
Beginning Increase in the Decrease in the Cause of
Item Ending balance
balance current period current period formation
Government
150,163,523.90 9,208,072.74 140,955,451.16
grants
Total 150,163,523.90 9,208,072.74 140,955,451.16 --
Projects with government grants:
In RMB
Newly-added Amount
subsidy included in
Projects with government Beginning Ending Related to
amount in the the current
grants balance balance assets/income
current profits and
period losses
Intelligent manufacturing
and integrated standard and 42,514,600.9 Related to
46,784,353.78 4,269,752.82
new model application 6 assets
program
Construction of production
line with an annual output of 23,617,961.2 Related to
24,904,851.84 1,286,890.62
2.25 million sets of kitchen 2 assets
appliances
Construction project of
Related to
kitchen appliance R&D, 9,409,768.25 1,182,583.62 8,227,184.63
assets
design and testing center
Subsidy for the construction
of production line with an Related to
2,282,841.08 571,891.98 1,710,949.10
annual output of 1 million assets
sets of kitchen appliances
Construction of production Related to
line with an annual output of 4,934,334.75 341,245.50 4,593,089.25
assets
1.08 million sets of built-in
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Newly-added Amount
subsidy included in
Projects with government Beginning Ending Related to
amount in the the current
grants balance balance assets/income
current profits and
period losses
kitchen appliances
Development of new
generation of
environmentally-friendly Related to
721,676.15 95,325.42 626,350.73
energy-saving kitchen assets
appliances and their
production line
Construction of digital
Related to
intelligent workshop for 581,649.00 79,713.36 501,935.64
assets
smart home appliances
Construction of the digital
workshop with an annual Related to
128,386.69 51,853.02 76,533.67
output of 2.25 million sets of assets
kitchen appliances
Recycling-centered renewal Related to
452,076.81 45,805.08 406,271.73
project assets
Subsidy for an investment in
a production line with an Related to
88,988.91 29,441.40 59,547.51
annual output of 150,000 assets
kitchen range hoods
Academician & expert work Related to
256,878.32 23,127.84 233,750.48
station assets
Kitchen appliance R&D, Related to
42,571.60 3,812.40 38,759.20
design and testing center assets
Technological upgrading for Related to
8,300,000.00 0.00 8,300,000.00
manufacturing enterprises assets
Technological upgrading
Related to
project with an annual 2,591,399.07 187,205.58 2,404,193.49
assets
output of 500,000
Intelligent Unmanned
18,787,338.5 Related to
Factory Based on 5G and 19,826,762.65 1,039,424.10
5 assets
Cloud Technologies
Chengnan New Area No. 28,856,985.0 Related to
28,856,985.00
M2, 020-09 Land Subsidy 0 assets
140,955,451.
Total 150,163,523.90 9,208,072.74 —
16
3 Capital stock
In RMB
Increase and decrease of this change (+, -)
Shares
Beginning balance Issue of Bonus converted Ending balance
Other Subtotal
new shares shares from capital
reserve
Total 949,024,050.00 949,024,050.00
number of
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shares
32. Capital reserve
In RMB
Increase in the Decrease in current
Item Beginning balance Ending balance
current period Period
Capital (stock)
401,799,332.67 401,799,332.67
premium
Other capital
802,690.61 802,690.61
reserves
Total 401,799,332.67 802,690.61 402,602,023.28
33. Treasury shares
In RMB
Increase in the Decrease in current
Item Beginning balance Ending balance
current period Period
Repurchase
obligation
recognized on the 199,995,742.59 199,995,742.59
issuance of stock
options
Total 199,995,742.59 199,995,742.59
Other notes, including condition and causes of variation in the current period:
Note: In the first extraordinary general meeting of shareholders of 2021 held by Hangzhou
Robam Appliances Co., Ltd. on April 30, 2021, the Proposal on the Plans of Repurchasing Part of
the Public Shares was deliberated and adopted, approving that the Company may repurchase part of
its shares with its own funds by means of centralized bidding. The repurchase price shall not be
more than RMB 50/share and RMB 150-200 million is assigned for the repurchase. The repurchase
shall be carried out within 12 months from the day the share repurchase plan is adopted at the
general meeting of the shareholders. The Company has accumulatively repurchased 4,929,134
shares through its repurchase account by centralized bidding, accounting for 0.5194% of its total
shares. For details, please refer to the Announcement on the Completion of the Repurchase of Public
Shares (Announcement No.: 2021-044) disclosed on www.cninfo.com.cn and the Company’s
designated information disclosure newspapers.
34. Other comprehensive incomes
In RMB
Amount incurred in the current period
Minus: amount
Minus: amount
Amount included in other
included in other
incurred comprehensive Net income Net income
Beginning comprehensive Ending
Item before incomes Less: after tax after tax
balance incomes balance
income tax previously and income tax attributable attributable
previously and
in the then transferred expenses to the parent to minority
then transferred
current into current company shareholders
into the current
period retained
profit or loss
earnings
I. Other - -
comprehensive 15,157,63 15,157,6
incomes that 4.16 34.16
cannot be
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reclassified into
profit or loss
Changes in fair
value of the - -
investment in 15,157,63 15,157,6
other equity 4.16 34.16
instruments
Total of other - -
comprehensive 15,157,63 15,157,6
incomes 4.16 34.16
35. Surplus reserve
In RMB
Increase in the Decrease in current
Item Beginning balance Ending balance
current period Period
Statutory surplus
474,516,412.50 474,516,412.50
reserve
Total 474,516,412.50 474,516,412.50
36. Undistributed profit
In RMB
Item Current period Previous period
Undistributed profit at the end of previous
6,240,444,654.34 5,054,206,720.45
period before adjustment
Undistributed profit at the beginning of the
6,240,444,654.34 5,054,206,720.45
period after adjustment
Add: Net profits attributable to owners of
790,388,759.79 1,660,749,958.89
the parent company in the current period
Dividends payable for ordinary
495,485,158.00 474,512,025.00
shares
Undistributed profit at the end of the
6,535,348,256.13 6,240,444,654.34
period
Note: According to the 2020 Profit Distribution Plan adopted at the fifth meeting of the fifth
Board of Directors on April 27, 2021, the Company plans to distribute RMB 5 (tax-inclusive) on
every 10 shares in the 946,870,316 shares (949,024,050 shares (the existing total capital stock ) net
of repurchased 2,153,734 shares) to all the shareholders, a total of RMB 473,435,158.00. On May
19, 2021, the equity distribution plan was approved by the 2020 Annual Shareholders’ Meeting of
the Company, with equity distributed on June 1.
According to the 2020 profit distribution plan of approved by the Board of Directors of
subsidiary Shengzhou Kinde on April 30, 2021, the profit available for distribution among
shareholders of the Company at the end of 2020 was RMB 115,658,834.74, and RMB
45,000,000.00 of it was planned to be distributed among all existing shareholders of the Company
based on their contribution ratio. The distribution was made on May 12. Of it, the minority
shareholders, contributing 49%, received cash dividends of RMB 22,050,000.00.
37. Operating income and operating cost
In RMB
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
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Main business 4,225,828,188.22 1,861,343,526.44 3,146,865,561.70 1,429,892,268.93
Other businesses 100,253,843.40 25,804,527.87 64,306,774.09 20,836,307.65
Total 4,326,082,031.62 1,887,148,054.31 3,211,172,335.79 1,450,728,576.58
38. Taxes and surcharges
In RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
City maintenance and construction
18,048,209.85 14,140,538.08
tax
Education surcharge 12,771,763.53 10,100,384.36
House tax 421,529.89
Land use tax 61,524.00
Vehicle and vessel usage tax 9,895.14 5,530.80
Stamp tax 1,060,955.85 918,951.81
Environmental protection tax 4,349.86 22,829.18
Total 32,378,228.12 25,188,234.23
39. Sales expense
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Marketing service expenses 658,869,399.50 466,038,121.92
Advertisement expenses 212,712,834.57 143,181,868.92
Transportation expense 110,649,151.12 73,404,730.65
Employee remuneration 111,001,158.94 85,640,734.54
Promotional activity expenses 37,411,007.65 32,884,532.32
Booth decoration expenses 66,732,522.09 40,103,399.65
Material consumption 31,534,245.53 28,609,979.15
Business hospitality cost 7,040,351.39 5,123,361.43
Rental fees 7,880,885.39 4,526,440.07
Travel expenses 7,379,352.93 3,277,056.81
Intermediary service fees 7,606,687.09 6,366,462.19
Office expenses 7,154,345.09 2,139,466.85
Other 4,554,238.58 1,383,143.26
Total 1,270,526,179.87 892,679,297.76
40. Administrative expenses
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Employees’ benefits 75,168,362.35 63,047,359.21
Depreciation and amortization 20,340,171.28 19,591,719.73
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Item Amount incurred in the current Amount incurred in the previous
period period
Rental fees 9,087,992.71 3,620,561.19
Consulting service fees 8,560,518.67 7,438,538.21
Maintenance expenses 8,390,641.09 2,753,334.17
Office expenses 6,978,151.70 4,832,241.98
Business hospitality cost 3,159,347.68 1,799,214.29
Travel expenses 3,019,005.02 1,589,147.21
Material consumption 2,719,283.02 2,017,310.49
Communication expense 2,603,129.38
Transportation expense 1,271,551.52 1,266,512.10
Costs of equity incentive 802,690.60
Travel expenses 744,608.85 986,420.87
Other 7,147,655.30 7,142,962.53
Total 149,993,109.17 116,085,321.98
41. R&D expenses
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Employees’ benefits 63,291,760.88 51,250,613.00
Direct input 61,648,388.01 52,263,866.12
Depreciation and amortization 7,336,784.12 7,361,111.08
Design fees 4,232,409.85 1,288,405.08
Other expenses 6,923,863.26 5,660,037.34
Total 143,433,206.12 117,824,032.62
42. Financial expenses
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Interest expenses 1,228,635.41 139,284.26
Less: Interest income 50,677,538.57 47,604,818.42
Add: foreign exchange gain/loss 332,356.04 -758,363.69
Add: other expenses 1,189,967.69 441,404.01
Total -47,926,579.43 -47,782,493.84
43. Other incomes
In RMB
Sources generating other incomes Amount incurred in the current Amount incurred in the previous
period period
Financial support fund to boost the 33,000,000.00 53,859,120.00
corporate development
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Sources generating other incomes Amount incurred in the current Amount incurred in the previous
period period
Amortization of deferred income 9,208,072.74 7,981,443.06
VAT refund 7,323,753.03
Financial performance reward 2,600,000.00 3,400,000.00
Energy subsidy 715,502.22
The "946 Policy" subsidy 500,000.00
Refund of individual income tax 412,808.74 1,092,154.23
handling fee
Subsidy for enterprises’ talent 330,630.00
introduction
Foreign economic and trade subsidy 288,000.00
Subsidy for top runners by output 200,000.00
per mu in Shaoxing
Funds under industrial economic 150,000.00
policies
Post allowance and social insurance 122,278.28 3,226,432.26
allowance
Enterprise subsidy 87,920.00
Commendation and reward for key 60,000.00 60,000.00
enterprises
Subsidy for equipment investment 38,800.00
Reward for top ten industrial 30,000.00
enterprises
Financial subsidy from the 10,000.00
administration committee
VAT exemption or reduction 9,000.00 9,000.00
Manufacturing revenue scale 2,000,000.00
incentive
Patent awards 576,180.00
Incentive for high and new 500,000.00
technologies
Project awards 458,000.00
Return of social insurance premium 236,660.73
Budget subsidy for accounting 200,000.00
center
Subsidy for industry standards 121,244.00
Recruitment subsidy 6,000.00
Total 55,086,765.01 73,726,234.28
44. Investment income
In RMB
Item Amount incurred in Amount incurred in
the current period the previous period
Investment income during holding of financial assets for trading 32,869,587.74 26,341,452.82
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Item Amount incurred in Amount incurred in
the current period the previous period
Investment incomes obtained during holding of other equity
instruments
Income from long-term equity investments accounted for using -1,440,070.07 -2,239,220.46
the equity method
Total 31,429,517.67 24,102,232.36
45. Loss from credit impairment
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Bad debt losses on notes receivable -23,680,868.74 -11,545,668.38
Bad debt losses from accounts -287,302.15 -3,367,587.99
receivable
Bad debt losses of other receivables -7,524,268.32 -3,598,513.22
Total -31,492,439.21 -18,511,769.59
46. Asset disposal income
In RMB
Sources of asset disposal income Amount incurred in the current Amount incurred in the previous
period period
Non-current asset disposal income -2,035,843.51 11,388.98
Including: income from disposal of -2,035,843.51 11,388.98
fixed assets
47. Non-operating income
In RMB
Amount included in the
Amount incurred in the Amount incurred in the
Item current non-recurring
current period previous period
gains and losses
Government grants 13,000.00 30,000.00 13,000.00
Other 1,182,370.24 556,353.17 1,182,370.24
Total 1,195,370.24 586,353.17
Item Amount Amount Source and basis Related to
incurred in incurred in assets/income
the current the previous
period period
Rewards and subsidies for 30,000.00 YWMB (2,019) No.18 Related to
corporate culture club income
Subsidy for diesel vehicle 13,000.00 — Related to
scrapped in advance income
Total 13,000.00 30,000.00 — —
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48. Non-operating expenses
In RMB
Amount included in the
Amount incurred in the Amount incurred in the
Item current non-recurring
current period previous period
gains and losses
Losses from non-current
asset damage or 1,923.08 1,923.08
retirement
External donations 1,000,000.00 1,000,000.00 1,000,000.00
Other 576,001.20 695,304.64 576,001.20
Total 1,577,924.28 1,695,304.64
49. Income tax expenses
(1) Presentation of income tax expenses
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Current income tax expenses 221,466,949.04 172,846,414.95
Deferred income tax expenses -77,977,344.97 -61,356,353.28
Total 143,489,604.07 111,490,061.67
(2) Adjustment of accounting profit and income tax expense
In RMB
Item Amount incurred in the current period
Total profit 943,135,279.38
Income tax expense calculated based on
141,470,291.91
statutory/applicable tax rate
Effects of the subsidiaries’ application of different tax
-10,401.93
rates
Effects of the adjustment of income tax in previous
period
Effects of the non-taxable income
Effects of the non-deductible costs, expenses and losses 2,167,728.45
Effects of using deductible losses of unrecognized
77.20
deferred income taxes in the previous period
Effects of the deductible temporary differences or
deductible losses of unrecognized deferred income tax 716,695.80
assets in the current period
Effects of taxes deducted by research and development
-854,787.36
expense addition (indicated with "-")
Income tax expense 143,489,604.07
50. Other comprehensive incomes
Refer to notes.
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51. Cash flow statement items
(1) Other cashes received in relation to operating activities
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Interest revenue on deposits 50,677,538.57 47,289,176.66
Government grants 38,558,939.24 83,007,211.22
Revenue collected and payment 12,423,235.01 6,405,232.50
made on behalf of other agencies
Cash reserve 5,010,000.00 2,060,756.89
Guarantee and security deposits 9,382,127.28 3,445,820.00
Other payments 2,652,812.06 1,579,919.38
Total 118,704,652.16 143,788,116.65
(2) Other cashes paid relating to operating activities
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Period expenses 1,035,315,521.21 681,737,610.63
Revenue collected and payment 7,363,869.83 5,850,848.09
made on behalf of other agencies
Guarantee and security deposits 7,846,747.85 9,872,837.56
Security deposit for letter of credit 10,236,863.39 7,628,855.25
Cash reserve 13,693,388.58 8,607,467.00
Other 1,029,155.95 1,043,789.70
Total 1,075,485,546.81 714,741,408.23
(3) Other cashes received from financing activities
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Income from accounts receivable 5,552,160.81
factoring
Total 5,552,160.81
52. Supple mentary information of Cash Flow Statement
(1) Supple mentary information of Cash Flow Statement
In RMB
Supplementary information Current amount Amount of the
previous period
1. Reconciliation of net profit to cash flow from operating activities: -- --
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Net profit 799,645,675.31 623,178,439.35
Add: Asset impairment provision 31,492,439.21 18,511,769.59
Depreciation of fixed assets, depreciation of oil and gas assets,
51,125,161.10 47,537,865.87
and depreciation of productive biological assets
Depreciation of right-of-use assets
Amortization of intangible assets 6,475,429.26 6,783,614.63
Amortization of long-term deferred expenses 1,613,095.73 235,373.08
Losses arising from disposal of fixed assets, intangible assets
2,035,843.51 -11,388.98
and other long-term assets (gains expressed with "-")
Losses on disposal of fixed assets (gains indicated with "-") 1,923.08
Losses from fair value change (gains expressed with “-”)
Financial expenses (profit shall be indicated with"-") 264,556.23 -540,552.95
Investment losses (gains expressed with “-”) -31,429,517.67 -24,102,232.36
Decrease in deferred income tax assets (increase shall be
-77,723,821.81 -61,093,635.20
indicated with “-”)
Increase in deferred income tax liabilities (decrease shall be
-253,781.85 -262,718.08
indicated with “-”)
Decrease in inventories (increase shall be indicated with “-”) -192,725,465.63 69,294,179.87
Decrease in operating receivables (increase shall be indicated
-530,224,948.55 -218,336,278.24
with “-”)
Increase in operating payables (decrease expressed with "-") 478,335,110.72 -62,765,374.17
Other -8,405,382.14 9,258,071.15
Net cash flow from operating activities 530,226,316.50 407,687,133.56
2. Non-cash flow-involved major investing and financing activities: -- --
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired under financing leases
3. Net increase/decrease in cash and cash equivalents: -- --
Ending balance of cash at the beginning of the period 4,141,495,878.43 4,315,955,499.25
Less: cash beginning balance 3,886,096,513.56 4,029,296,265.50
Add: ending balance of cash equivalents
Less: cash equivalents at the beginning of the period
Net increase in cash and cash equivalents 255,399,364.87 286,659,233.75
(2) Composition of cash and cash equivalents
In RMB
Item Ending balance Beginning balance
I. Cash 4,141,495,878.43 3,886,096,513.56
Including: cash on hand 193,275.57 110,770.11
deposits available for payment at any time 4,141,172,524.88 3,885,907,031.42
other cash and cash equivalents available for 130,077.98 78,712.03
payment at any time
III. Balance of cash and cash equivalents at the end 4,141,495,878.43 3,886,096,513.56
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of the period
53. Assets with limited ownership or right to use
In RMB
Item Ending book value Reasons for limit
Cash and cash equivalents 48,554,126.91 Letters of credit and note margin
Total 48,554,126.91 --
54. Foreign currency monetary item
In RMB
Item Ending balance in Exchange rate for Ending balance in RMB
foreign currency conversion
Cash and cash equivalents -- --
Including: USD 5,117,850.59 6.4601 33,061,826.56
EUR 361.23 7.6862 2,776.49
AUD 3.29 4.8528 15.97
Accounts receivable -- --
Including: USD 2,750,906.40 6.4601 17,771,288.53
55. Governme nt grants
Basic information of governme nt grants
In RMB
Type Amount Items Amounts included in current
profits and losses
Financial support fund to boost the 33,000,000.00 Other income 33,000,000.00
corporate development
VAT refund 7,323,753.03 Other income 7,323,753.03
Financial performance reward 2,600,000.00 Other income 2,600,000.00
Energy subsidy 715,502.22 Other income 715,502.22
The "946 Policy" subsidy 500,000.00 Other income 500,000.00
Refund of individual income tax 412,808.74 Other income 412,808.74
handling fee
Subsidy for enterprises’ talent 330,630.00 Other income 330,630.00
introduction
Foreign economic and trade subsidy 288,000.00 Other income 288,000.00
Subsidy for top runners by output 200,000.00 Other income 200,000.00
per mu in Shaoxing
Funds under industrial economic 150,000.00 Other income 150,000.00
policies
Post allowance and social insurance 122,278.28 Other income 122,278.28
allowance
Enterprise subsidy 87,920.00 Other income 87,920.00
Commendation and reward for key 60,000.00 Other income 60,000.00
enterprises
Subsidy for equipment investment 38,800.00 Other income 38,800.00
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Type Amount Items Amounts included in current
profits and losses
Reward for top ten industrial 30,000.00 Other income 30,000.00
enterprises
Financial subsidy from the 10,000.00 Other income 10,000.00
administration committee
VAT exemption or reduction 9,000.00 Other income 9,000.00
Subsidy for diesel vehicle scrapped 13,000.00 Non-operating 13,000.00
in advance income
VIII. Changes in the scope of consolidated financial statements
There is no change in the scope of consolidated financial statements in the current period.
IX. Interests in other entities
1. Equity in subsidiaries
(1) Composition of the Robam Group
Principal Shareholding ratio
Registration Nature of Acquisition
Subsidiary place of
place business Direct Indirect method
business
Businesses
Sales of
Beijing Robam Appliances combination
Beijing Beijing kitchen 100.00%
Sales Co., Ltd. under common
appliances
control
Businesses
Sales of
Shanghai Robam combination
Shanghai Shanghai kitchen 100.00%
Appliances Sales Co., Ltd. under common
appliances
control
Sales of Acquisition
Hangzhou MingQi Electric
Hangzhou Hangzhou kitchen 100.00% upon its
Co., Ltd.
appliances establishment
De Dietrich Household Sales of Acquired
Appliances Trading Shanghai Shanghai kitchen 51.00% through
(Shanghai) Co., Ltd. appliances investment
Business
Production
Shengzhou Kinde combination
and sales of
Intelligent Kitchen Shengzhou Shengzhou 51.00% not under
kitchen
Appliances Co., Ltd. common
appliances
control
Asset,
Hangzhou Robam Fuchuang Acquisition
investment
Investment Management Hangzhou Hangzhou 100.00% upon its
management,
Co., Ltd. establishment
etc.
Company City
Acquisition
Zhejiang Cookingfuture Smart kitchen
Shengzhou Shengzhou 35.70% upon its
Technology Co., Ltd. design
establishment
(2) Major non-wholly owned subsidiaries
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In RMB
Gains/losses Dividend declared Balance of
Proportion of
attributable to and distributed to minority
shares held by
Subsidiary minority minority shareholders’
minority
shareholders in the shareholders in the equity at the end of
shareholders
current period current period the period
Shengzhou Kinde
Intelligent Kitchen 49.00% 10,695,441.84 22,050,000.00 131,797,823.03
Appliances Co., Ltd.
Zhejiang Cookingfuture
30.00% -965,284.66 6,309,337.84
Technology Co., Ltd.
(3) Main financial information of important partially-owned subsidiaries
In RMB
Ending balance
Subsidiary Current Non-current Current Non-current Total
Total assets
assets assets liabilities liabilities liabilities
Shengzhou Kinde
Intelligent
221,771,167. 246,463,960. 468,235,128. 165,446,016. 33,813,962. 199,259,979.
Kitchen
85 38 23 29 89 18
Appliances Co.,
Ltd.
Zhejiang
Cookingfuture 21,387,813.6 21,524,714.9
136,901.34 493,588.82 493,588.82
Technology Co., 0 4
Ltd.
(Continue d 1)
Beginning balance
Subsidiary Current Non-current Current Non-current Total
Total assets
assets assets liabilities liabilities liabilities
Shengzhou Kinde
Intelligent
302,562,407. 177,615,050. 480,177,458. 153,846,712. 34,067,744. 187,914,457.
Kitchen
94 45 39 26 74 00
Appliances Co.,
Ltd.
Zhejiang
Cookingfuture 23,647,941.3 23,704,278.4
56,337.05 305,536.79 305,536.79
Technology Co., 9 4
Ltd.
(Continued 2)
Amount incurred in the current period Amount incurred in the previous period
Cash flow Cash flow
Subsidiary Total Total
Operating fro m Operating fro m
Net profit consolidated Net profit consolidated
income operating income operating
income income
activities activities
Kinde Intelligent 124,027,172. 20,862,147. 20,862,147. 6,936,248.3 92,100,731. 22,165,638. 22,165,638. 27,412,195.
62 66 66 0 82 90 90 88
COOKINGFUTU - - -
RE 3,217,615.5 3,217,615.5 4,240,135.6
3 3 4
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3. Equity in joint ventures or associates
Summary of the financial information of minor joint venture and associates
In RMB
Ending balance/amount incurred Beginning balance/amount incurred
in current period in previous period
Joint venture: -- --
Total book value of investment 2,012,699.52 3,452,769.59
Totals of the following items -- --
calculated as per respective
shareholding proportion
Associate: -- --
Totals of the following items -- --
calculated as per respective
shareholding proportion
-- Net profit -1,440,070.07 -715,569.20
-- Total comprehensive income -1,440,070.07 -715,569.20
X. Risks Relating to Financial Instruments
Major financial instruments of the Company include accounts receivable, accounts payable, etc. See
Note VI for detailed description of these 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 analyze all kinds of risks faced by the Company,
establish appropriate risk bottom line for risk management, and monitor all risks promptly and
reliably keep risks within a limited range.
Market risk - price risk
Since the Company sells its products at market prices, it may be affected by such price fluctuations.
Credit risk:
As of June 30, 2021, the biggest credit risk exposure that may bring financial loss to the 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
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products have good credit record. The Company has no major credit risk concentration. 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
management has closely examined the liquid assets of the Company and regularly analyzed the
liability structure/term and bank lines and so on to endure fund sufficiency. It is concluded that the
Company has sufficient funds to meet the demands of short-term loans and capital expenditure of
the Company. Analysis of the financial assets and financial liabilities of the Company as per
maturity of the undiscounted contract obligations remained is made as follows:
Balance on June 30, 2021
Item Within 1 year 1-2 years 2-5 years Over 5 Total
years
Financial assets 9,232,859,585.28 9,232,859,585.28
Cash and cash 4,190,050,005.34 4,190,050,005.34
equivalents
Financial assets 2,019,000,000.00 2,019,000,000.00
held for trading
Notes receivable 1,942,517,288.74 1,942,517,288.74
Accounts 988,037,922.96 988,037,922.96
receivable
Other receivables 93,254,368.24 93,254,368.24
Financial 3,257,730,835.30 3,271,930,835.30
liabilities
Short-term 11,913,223.08 11,913,223.08
borrowings
Notes payables 697,267,275.89 697,267,275.89
Accounts payable 2,122,755,661.60 2,136,955,661.60
Other payables 255,046,157.84 255,046,157.84
Payroll payable 32,973,810.40 32,973,810.40
Other current 137,774,706.49 137,774,706.49
liabilities
Sensitivity analysis of 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, 2021, the Company’s balances of assets and liabilities are in RMB (except
for the balances of the assets and liabilities in foreign currency in "VI. 54 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, the Company hasn’t adopted any measures to avoid foreign exchange risk.
XI. Disclosure of Fair Value
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1. Assets and liabilities measured at fair value at the end of the period
In RMB
Ending fair value
Item Fair value Fair value Fair value
measurement measurement measurement Total
(Level 1) (Level 2) (Level 3)
Continuous fair value measurement -- -- -- --
(I) Financial assets held for trading 2,019,000,000.00 2,019,000,000.00
1. Financial assets measured at fair
value with changes included in 2,019,000,000.00 2,019,000,000.00
current profit or loss
(III) Investment in other equity
102,116,023.22 102,116,023.22
instruments
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
measure ment
Item Fair value as of Valuation Significant Relationship between
June 30, 2021 techniques unobservable unobservable value and fair
value value
financial products Optimal fair value Investment cost
2,019,000,000.00 —
estimation
Investment in Optimal fair value Investment cost
other equity 102,116,023.22 estimation —
instruments
XII. Related Party and Related Party Transactions
1. The Company’s parent company
Proportion of Proportion of
the Company’s voting right of
Registration Nature of Registered
Parent company shares held by the parent
place business capital
the parent company in the
company Company
Hangzhou Investment and
Hangzhou,
Robam Industry industrial RMB 60 million 49.68% 49.68%
Zhejiang
Group Co., Ltd. management
2. The Company’s subsidiaries
See Note "Composition of the Robam Group" for more about the Company’s subsidiaries
3. The Company’s joint ventures and associated companies
See Note "Major non-wholly owned subsidiaries" for more about the Company’s important joint
ventures or associated companies.
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4. Other related parties
Name of other related parties Relation between other related parties and the
Company
Hangzhou Amblem Household Co., Ltd. Controlled by the same parent company
Hangzhou Yuhang Robam Fuel Station Co., Ltd. Controlled by the same parent company
Hangzhou Nbond Nonwovens Co., Ltd. Controlled by the same parent company
Hangzhou Yuhang Yaguang Spray Coating Factory Controlled by the actual controller’s younger sister
Hangzhou City Garden Hotel Co., Ltd. Significantly influenced by the parent company
Hangzhou Bonyee Daily Necessity Technology Co., Controlled by the same parent company
Ltd.
Shaoxing Kinde Electric Appliances Co., Ltd. Other shareholders of the subsidiaries owned by the
Company
Hangzhou Guoguang Touring Commodity Co., Ltd. Controlled by the same parent company
Hangzhou Small Planter Technology Co., Ltd. Controlled by the same parent company
5. Related transactions
(1) Related transactions regarding purchasing and selling goods and providing and
accepting labor services
Table of the purchasing of goods and receiving of labor services
In RMB
Whether
Description Amount incurred exceeds the
Amount incurred in
Related parties of the related in the current approved
the previous period
transactions period limit or not
(Y/N)
Receiving of
Hangzhou Yuhang Yaguang Spray
labor 4,188,923.61 No 5,127,566.52
Coating Factory
services
Hangzhou Small Planter Purchase of
2,277,929.75 No
Technology Co., Ltd. goods
Hangzhou Amblem Household Co., Purchase of
413,419.77 No 2,137,356.44
Ltd. goods
Hangzhou Yuhang Robam Fuel Purchase of
299,710.75 No 270,199.44
Station Co., Ltd. goods
Receiving of
Hangzhou City Garden Hotel Co.,
labor 201,474.34 No
Ltd.
services
Hangzhou Guoguang Touring Purchase of
70,568.15 No
Commodity Co., Ltd. goods
Hangzhou Bonyee Daily Necessity Purchase of
424.78 No 1,387,629.65
Technology Co., Ltd. goods
Hangzhou Nbond Nonwovens Co., Purchase of
No 36,514.24
Ltd. goods
Goods Sales/labor service provision
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In RMB
Related parties Description of the Amount incurred in the Amount incurred in the
related transactions current period previous period
Hangzhou Amblem
Sale of goods 7,335,655.75 1,958,456.62
Household Co., Ltd.
Shaoxing Kinde Electric
Sale of goods 2,243,171.75
Appliances Co., Ltd.
Hangzhou Yuhang
ROBAM Charity Sale of goods 13,100.00 556,814.16
Foundation
(2) Related leasing
The Company acts as the lessor:
In RMB
Rental income recognized Lease income recognized
Lessee Type of leased asset
in the current period in the prior period
Hangzhou Robam
Housing 14,400.00 14,400.00
Industry Group Co., Ltd.
The Company acts as the Lessee:
In RMB
Rental fee recognized in Rental fee recognized in
Lessor Type of leased asset
the current period the previous period
Hangzhou Robam
Housing 275,012.28 275,012.28
Industry Group Co., Ltd.
Benefits of key management personnel
In RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
Total remuneration 3,165,800.00 3,023,100.00
6. Receivables and payables of related parties
(1) Receivables
In RMB
Ending balance Beginning balance
Name of item Related parties Bad debt Book
Book balance Bad debt provision
provision balance
Hangzhou
Accounts Amblem
2,502,818.00 /
receivable Household Co.,
Ltd.
(2) Payables
In RMB
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Initial book balance
Book balance at the
Name of item Related parties at the beginning of
end of the period
the period
Hangzhou Yuhang Yaguang Spray Coating
Accounts payable 2,770,678.98 3,182,779.20
Factory
Hangzhou Yuhang Robam Fuel Station Co.,
Accounts payable 2,596,507.52 2,257,834.37
Ltd.
Accounts payable Hangzhou Amblem Household Co., Ltd. 2,230.09
Hangzhou Guoguang Touring Commodity
Accounts payable 22,336.73
Co., Ltd.
Hangzhou Yuhang Yaguang Spray Coating
Other payables 200,000.00 200,000.00
Factory
Hangzhou Guoguang Touring Commodity
Other payables 2,000.00 2,000.00
Co., Ltd.
7. Commitme nts of related parties
Subsidiary of the Company, Shengzhou Kinde, committed to investing RMB35 million in
Cookingfuture, of which, RMB17.5 million has been paid in, accounting for 70% of the shares. The
remaining RMB17.5 million will be paid in before December 31, 2021 in full.
XIII. Share Payment
1. Overview of share payment
√Applicable Not applicable
In RMB
Total amount of equity instruments granted by the Company in 111,172,800.00
the current period
Total amount of equity instruments exercised by the Company 0.00
in the current period
Total amount of invalid equity instruments of the Company in 0.00
the current period
The Company held the fourth session of the 5th Board of Directors on April 24, 2021 and the
first extraordinary general meeting of shareholders of 2021 on April 30, 2021, deliberating and
adopting the Proposal on 2021 Stock Option Inventive Plan (Draft) of the Company and Its
Summary. On May 10, 2021, the sixth session of the 5th Board of Directors and the sixth session of
the 5th Board of Supervisors were held, deliberating and adopting the Proposal on Granting Stock
Option to Incentive Targets. Share exercise price: RMB36.57/share.
Stock Option Distribution Among the Incentive Targets:
Number of stock Proportion in total Proportion in total capital
Title options granted stock options stock on the day of
(in 10,000 shares) granted the current Incentive Plan
Middle Management and Core
(Technical) Backbones 304 100.00% 0.32%
(138 persons)
Total 304 100.00% 0.32%
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The incentive plan shall be valid for no more than 48 months from the day of full registration
of the stock option granting to the day of full exercise/cancellation of the stock option granted to the
incentive targets. Waiting periods of the stock option under the Incentive Plan shall be 12 months,
24 months and 36 months respectively upon full granting registration of the stock option granted.
Stock option exercise period and exercising schedule of each period
Proportion
Exercise
Exercise date of
period
exercise
The first From the first trading day after 12 months as from full registration of the stock option
exercise granted to the last trading day within 24 months as from full registration of the stock 40%
period option granted.
The From the first trading day after 24 months as from full registration of the stock option
second granted to the last trading day within 36 months as from full registration of the stock
30%
exercise option granted.
period
The From the first trading day after 36 months as from full registration of the stock option
third granted to the last trading day within 48 months as from full registration of the stock
30%
exercise option granted.
period
Performance Assessment on Stock Option Exercise
(1) Performance assessment requirements at the company level
Assessment on stock option exercise under the incentive plan is to be carried out in three fiscal
years from 2021-2023 (one assessment per year). Performance assessment objectives at the
company level in each year are as follows:
Exercise
Performance assessment objectives:
period
The first Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year
exercise 2021 reaches 10% or more and the net profit to the parent company minus non-recurring profit and
period loss in 2021 shall not be less than that in 2020.
The
Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year
second
2022 reaches 10% or more and the net profit to the parent company minus non-recurring profit and
exercise
loss in 2022 shall not be less than that in 2020.
period
The third Based on the operating revenue of Year 2020, compound growth rate of the operating revenue in Year
exercise 2023 reaches 10% or more and the net profit to the parent company minus non-recurring profit and
period loss in 2023 shall not be less than that in 2020.
Remarks: The aforementioned "net profit to the parent company minus non-recurring profit and
loss" refers to the net profit to be distributed to shareholders of the listed company minus non-
recurring profit and loss.
In case the company fails to meet the said assessment objectives, stock option expected to be
excised by all the incentive targets in the corresponding assessment year shall not be exercised but
cancelled by the company.
(2) Performance assessment requirements on the incentive targets at personal level
Assessment on individual incentive targets shall be subject to relevant assessment standards set
by the company and proportion of personal exercisable option (N) is to be determined as per
personal assessment ranking of the previous year:
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C-Improvement
Assessment rankings: A-Excellent B-Good
desired
Proportion of personal exercisable option
100% 0%
(N)
In case the company meets the assessment requirements in each year, stock option to be
actually exercised by the incentive target personally in the year = stock option expected to be
exercised by the person in the year x proportion of personal exercisable option (N)
Stock option that fails to be exercised by the incentive targets in the assessment year will be
cancelled by the company.
2. Repurchase of part of the public shares
In the first extraordinary general meeting of shareholders of 2021 held by the Company on
April 30, 2021, the Proposal on the Plans of Repurchasing Part of the Public Shares was
deliberated and adopted, approving that the Company may repurchase part of its shares with its own
funds by means of centralized bidding. The repurchase price shall not be more than RMB 50/share
and RMB 150-200 million is assigned for the repurchase. The repurchase shall be carried out within
12 months from the day the share repurchase plan is adopted at the general meeting of the
shareholders. The Company published Report on Repurchasing Part of the Public Shares on May
11, 2021.
On June 25, 2021, the Company published the Announcement on Completion of Repurchasing
Part of the Public Shares, presenting that the Company accumulatively repurchased 4,929,134
shares by centralized bidding with its exclusive account for repurchase, accounting for 0.5194% of
total capital stock of the Company. The highest price is RMB 44.40/share and the lowest RMB
35.89/share. The transaction volume totals RMB 199,991,892.40. The current capital stock
repurchase plan has been accomplished. The capital stock repurchased this time is temporarily
deposited in the exclusive security account for repurchase. The said capital stock repurchased is not
entitled to profit distribution, converting provident fund to share capital, issuing additional new
stock or stock allotment, pledge or voting right in the general meeting of the shareholders and so on.
All the stock repurchased this time will be applied to the stock incentive plan of the Company
and/or business partner stock ownership plan and so on. In case the Company fails to realize the
aforesaid purposes with the stock within duly given time limit, the unused part will be cancelled
under relevant procedures.
XIV. Commitments and Contingencies
1. Major commitments
As of June 30, 2021, the Company has no major commitments to be disclosed.
2. Contingencies
(1) Major contingencies on the balance sheet date
As of June 30, 2021, the Company has no major contingencies to be disclosed.
(2) It’s also necessary to make it clear hereby that the Company has no major contingencies that
need to be disclosed.
As of June 30, 2021, the Company has no major contingency that need to be disclosed.
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XV. Events After the Balance Sheet Date
As of June 30, 2021, the Company has no events after the Balance Sheet date to be disclosed.
XVI. Notes to main items of the financial statements of the parent company
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type Book Percentage Book value
Percentage Percentage of value Percentag
Amount Amount Amount Amount of
(%) provision e (%)
provision
Accounts
receivable
with 6,929,6 2,209,7 11,250, 2,843,140.3
9,139,375.39 0.92% 75.82% 1.13% 8,407,639.24 74.73%
individual 56.29 19.10 779.60 6
bad debt
provisions
Including:
Accounts
receivable
with a 989,025,706.6 57,610, 931,414 984,599 930,766,768
99.08% 5.82% 98.87% 53,832,390.64 5.47%
collective 8 739.04 ,967.64 ,159.57 .93
bad debt
provision
Including:
Accounts
receivable
grouped 24,116, 26,572, 26,572,541.
24,116,820.28 2.42% 2.67%
according to 820.28 541.50 50
related
parties
Multiple
accounts
receivable
which are
grouped by
expected
credit loss 964,908,886.4 57,610, 907,298 958,026 904,194,227
96.67% 5.97% 96.20% 53,832,390.64 5.62%
based on 0 739.04 ,147.36 ,618.07 .43
their age
characteristi
cs and with
a collective
bad debt
provision
998,165,082.0 64,540, 933,624 995,849 933,609,909
Total 100.00% 6.47% 100.00% 62,240,029.88 6.25%
7 395.33 ,686.74 ,939.17 .29
In RMB
Individual bad debt provision:
In RMB
Ending balance
Name Percentage of Reasons for
Book balance Bad debt provision
provision provision
Provision for bad Expected to be
1,773,645.05 1,773,645.05 100.00%
debts by individual irrecoverable
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item
Provision for bad Expected to be
debts by individual 7,365,730.34 5,156,011.25 70.00% exposed to recovery
item risk
Total 9,139,375.39 6,929,656.30 -- --
In RMB
Ending balance
Name
Book balance Bad debt provision Percentage of provision
With 1 year 848,886,186.39 42,444,309.31 5.00%
1-2 years 100,975,054.01 10,097,505.40 10.00%
2-3 years 9,953,697.67 1,990,739.53 20.00%
3-4 years 3,778,538.92 1,889,269.46 50.00%
4-5 years 632,470.40 505,976.32 80.00%
More than 5 years 682,939.01 682,939.02 100.00%
Total 964,908,886.40 57,610,739.04 --
Disclosed based on the age of accounts receivable
In RMB
Age Ending balance
Within 1 year (including 1 year) 879,989,777.45
1-2 years 103,127,658.62
2-3 years 9,953,697.67
More than 3 years 5,093,948.33
3-4 years 3,778,538.92
4-5 years 632,470.40
More than 5 years 682,939.01
Total 998,165,082.07
(2) Bad de bt 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 Ending
Type Recovery or
balance Provision Write-off Other balance
reversal
Bad debt
provision for
62,240,029.88 6,877,232.65 4,576,867.20 64,540,395.33
accounts
receivable
Total 62,240,029.88 6,877,232.65 4,576,867.20 64,540,395.33
(3) Top five debtors with the biggest ending balances of accounts receivable
In RMB
Unit Proportion in the total
Ending balance of Ending balance of bad
ending balance of
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accounts receivable accounts receivable debt provision
Unit 1 181,717,542.00 18.21% 9,085,877.10
Unit 2 82,536,456.34 8.27% 4,126,822.82
Unit 3 60,191,842.27 6.03% 6,019,184.23
Unit 4 29,324,596.32 2.94% 1,466,229.82
Unit 5 24,904,134.49 2.49% 1,245,206.72
Total 378,674,571.42 37.94%
2. Other receivables
In RMB
Item Ending balance Beginning balance
Other receivables 80,511,071.80 49,092,820.31
Total 80,511,071.80 49,092,820.31
1) Classification of other receivables by nature
In RMB
Nature of receivable Book balance at the end of the Initial book balance at the
period beginning of the period
Collections by a third party 48,933,751.24 20,064,674.31
Security/guarantee deposits 36,573,061.64 33,786,199.08
Related transactions 4,064,000.00 4,064,000.00
Withholdings 4,544,818.54 2,256,187.63
Cash Reserve 5,993,517.59 1,383,261.26
Other 2,806,012.74 3,199,125.99
Total 102,915,161.75 64,753,448.27
2) Bad de bt provision
In RMB
Phase I Phase II Phase III
Expected credit loss Expected credit loss
Bad debt provision Expected credit Total
over the entire over the entire
loss over the next
duration (without duration (with credit
12 months
credit impairment) impairment)
Balance on January
15,660,627.96 15,660,627.96
1, 2021
Balance on January
1, 2021 in the —— —— —— ——
current period
Provision in the
6,743,461.99 6,743,461.99
current period
Balance on June 30,
22,404,089.95 22,404,089.95
2021
Disclosed based on the age of accounts receivable
In RMB
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Age Ending balance
Within 1 year (including 1 year) 73,763,151.36
1-2 years 4,310,496.19
2-3 years 3,527,461.80
More than 3 years 21,314,052.40
3-4 years 1,379,124.00
4-5 years 15,225,500.00
More than 5 years 4,709,428.40
Total 102,915,161.75
3) Bad de bt 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 Ending
Type Recovery or
balance Provision Write-off Other balance
reversal
Bad debt
provision for
15,660,627.96 6,743,461.99 22,404,089.95
other
receivables
Total 15,660,627.96 6,743,461.99 22,404,089.95
4) Top five debtors with the biggest ending balances of other receivables
In RMB
Proportion in
the total ending Ending balance
Nature of
Unit Ending balance Age balance of other of bad debt
receivable
accounts provision
receivable
Collections by a
Unit 1 48,933,751.24 With 1 year 47.55% 2,446,687.56
third party
Security/guarantee
Unit 2 14,778,000.00 4-5 years 14.36% 11,822,400.00
deposits
Unit 3 Cash Reserve 2,957,384.30 With 1 year 2.87% 147,869.22
Security/guarantee
Unit 4 2,400,000.00 With 1 year 2.33% 120,000.00
deposits
Collections by a
Unit 5 2,288,880.00 With 1 year 2.22% 114,444.00
third party
Total -- 71,358,015.54 -- 69.34% 14,651,400.78
3. Long-term equity investment
In RMB
Ending balance Beginning balance
Item Book Impairment Impairment
Book value Book balance Book value
balance provision provision
Investments 256,937,618 20,400,000.0 236,537,618.8 246,905,933.7 20,400,000.0 226,505,933.7
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Ending balance Beginning balance
Item Book Impairment Impairment
Book value Book balance Book value
balance provision provision
in .88 0 8 3 0 3
subsidiaries
Investments
in joint
2,012,699.5
ventures and 2,012,699.52 3,452,769.59 3,452,769.59
2
associated
companies
258,950,318 20,400,000.0 238,550,318.4 250,358,703.3 20,400,000.0 229,958,703.3
Total
.40 0 0 2 0 2
(1) Investment in subsidiaries
In RMB
Increase/decrease in the current period
Beginning Ending balance
Provision Ending balance
Investee balance (book Additional Negative of impairment
for Other (book value)
value) investment investment provision
impairment
Shengzhou
Kinde Intelligent
Kitchen 162,320,000.00 162,320,000.00
Appliances Co.,
Ltd.
Hangzhou
MingQi Electric 51,901,780.81 31,685.15 51,933,465.96
Co., Ltd.
De Dietrich
Household
Appliances
630,900.00 630,900.00 20,400,000.00
Trading
(Shanghai) Co.,
Ltd.
Shanghai Robam
Appliances Sales 5,838,272.10 5,838,272.10
Co., Ltd.
Beijing Robam
Appliances Sales 5,814,980.82 5,814,980.82
Co., Ltd.
Hangzhou
Robam
Fuchuang
10,000,000.00 10,000,000.00
Investment
Management
Co., Ltd.
Total 226,505,933.73 10,031,685.15 256,937,618.88 20,400,000.00
(2) Investment in joint ventures and associated companies
In RMB
Investor Beginning Increase/decrease in the current period Ending Ending
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balance Investment balance balance of
(book Cash (book impairment
Negative profit or loss Adjustment of Other
value) Additional dividends or Provision value) provision
investment recognized other changes
profits for Other
investment using the comprehensive in
declared and impairment
equity income equity
distributed
method
I. Joint venture
De
Dietrich -
3,452,769 2,012,6
Trade 1,440,070.0
.59 99.52
(Shanghai 7
) Co., Ltd.
Subtotal 3,452,769 - 2,012,6
.59 1,440,070.0 99.52
7
II. Associated enterprises
Total 3,452,769 - 2,012,6
.59 1,440,070.0 99.52
7
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 3,860,204,084.81 1,747,835,343.86 2,922,262,959.98 1,329,831,191.10
Other businesses 97,090,873.20 25,560,127.41 58,651,720.79 19,754,013.25
Total 3,957,294,958.01 1,773,395,471.27 2,980,914,680.77 1,349,585,204.35
5. Investment income
In RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Investment income during holding of
53,886,727.88 20,859,653.65
financial assets for trading
Investment incomes obtained during
holding of other equity instruments
Income from long-term equity
investments accounted for using the -1,440,070.07 -2,239,220.46
equity method
Total 52,446,657.81 18,620,433.19
XVIII. Supple mentary Information
1. Breakdown of non-recurring profits and losses in the current period
√Applicable Not applicable
In RMB
Item Amount Description
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Gains and losses from disposal of -2,037,766.59
non-current assets
Government subsidy included in 55,099,765.01
current gains and losses (except the
government subsidy closely related to
the Company’s business and enjoyed
by quota or ration in accordance with
the unified national standard)
Other gain/loss items conforming to -393,630.96
the definition of non-recurring
gains/losses
Less: Affected amount of income tax 8,184,399.67
Affected amount of minority 480,579.21
shareholders’ equity
Total 44,003,388.58 --
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
Profit within the Reporting Weighted average return on Basic earnings per
Period net assets Diluted EPS
share (EPS)
(RMB/share)
(RMB/share)
Net profit attributable to
common stockholders of the 9.49% 0.83 0.83
Company
Net profit attributable to
common shareholders of the
8.96% 0.79 0.58
Company after deducting non-
recurring profits 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
127
