Financial Report
I. Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Wuxi Little Swan Company Limited
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 1,704,230,864.24 1,588,264,516.05
Settlement reserve
Interbank loans granted
Financial assets at fair value through profit or loss 5,270,238.03
Derivative financial assets
Notes receivable 1,176,200,901.21 1,283,192,684.28
Accounts receivable 1,977,970,373.74 1,736,724,496.10
Prepayments 152,336,504.11 84,346,792.38
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Interest receivable 179,688,607.69 60,943,907.98
Dividends receivable
Other receivables 34,741,255.89 47,224,454.09
Financial assets purchased under resale agreements
Inventories 586,403,967.09 1,980,766,196.14
Assets classified as held for sale
1
Current portion of non-current assets
Other current assets 11,926,962,399.50 12,778,240,745.22
Total current assets 17,738,534,873.47 19,564,974,030.27
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 200,000.00 200,000.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment property 59,769,771.00 61,695,825.00
Fixed assets 1,064,376,016.22 1,029,668,355.84
Construction in progress 39,728,931.02 37,972,252.60
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 184,434,179.99 187,045,347.27
R&D expense
Goodwill
Long-term prepaid expense 26,391,575.09 22,382,020.52
Deferred income tax assets 380,061,339.65 407,151,474.64
Other non-current assets 56,029,381.55 27,331,937.53
Total non-current assets 1,810,991,194.52 1,773,447,213.40
Total assets 19,549,526,067.99 21,338,421,243.67
Current liabilities:
Short-term borrowings 81,393,672.34
Borrowings from central bank
Customer deposits and deposits from banks and other financial institutions
Interbank loans obtained
Financial liabilities at fair value through profit or loss 4,800,613.47
Derivative financial liabilities
Notes payable 3,915,720,273.53 2,805,804,600.41
Accounts payable 2,809,609,738.57 3,827,025,700.10
Advances from customers 828,133,123.71 3,065,815,801.93
2
Financial assets sold under repurchase agreements
Handling charges and commissions payable
Payroll payable 257,127,334.88 349,483,844.76
Taxes payable 426,592,631.50 638,017,523.31
Interest payable
Dividends payable 9,049,503.92 6,996,784.06
Other payables 185,057,430.91 221,120,863.48
Reinsurance payables
Insurance contract reserve
Payables for acting trading of securities
Payables for underwriting of securities
Liabilities directly associated with assets classified as held for sale
Current portion of non-current liabilities
Other current liabilities 2,476,199,672.19 2,107,700,604.61
Total current liabilities 10,912,290,322.68 13,103,359,395.00
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable 10,291,652.87 12,021,620.17
Specific payables
Provisions 2,157,992.76 2,253,082.25
Deferred income 2,262,533.19 2,489,133.21
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 14,712,178.82 16,763,835.63
Total liabilities 10,927,002,501.50 13,120,123,230.63
Owners’ equity:
Share capital 632,487,764.00 632,487,764.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
3
Capital reserves 1,296,794,069.01 1,252,947,546.80
Less: Treasury shares
Other comprehensive income 28,544,268.12 40,496,366.85
Specific reserve
Surplus reserves 332,594,722.29 332,594,722.29
General reserve
Retained profits 5,058,123,683.45 4,788,564,401.03
Total equity attributable to owners of the Company as the parent 7,348,544,506.87 7,047,090,800.97
Non-controlling interests 1,273,979,059.62 1,171,207,212.07
Total owners’ equity 8,622,523,566.49 8,218,298,013.04
Total liabilities and owners’ equity 19,549,526,067.99 21,338,421,243.67
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 642,107,101.53 1,030,061,384.78
Financial assets at fair value through profit or loss 3,724,810.47
Derivative financial assets
Notes receivable 730,830,976.20 938,342,347.95
Accounts receivable 1,806,817,821.81 2,805,194,600.27
Prepayments 106,050,805.01 67,278,861.92
Interest receivable 117,300,028.26 32,913,208.23
Dividends receivable
Other receivables 21,922,908.39 28,973,048.36
Inventories 365,685,219.33 1,206,334,183.68
Assets classified as held for sale
Current portion of non-current assets
Other current assets 7,821,975,278.04 7,259,605,039.27
Total current assets 11,612,690,138.57 13,372,427,484.93
Non-current assets:
Available-for-sale financial assets 150,000.00 150,000.00
Held-to-maturity investments
Long-term receivables
4
Long-term equity investments 958,235,041.57 958,235,041.57
Investment property 7,703,668.04 7,882,440.32
Fixed assets 559,225,207.15 532,803,209.18
Construction in progress 39,078,412.10 37,321,733.68
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 88,555,717.18 89,900,867.32
R&D expense
Goodwill
Long-term prepaid expense 8,692,674.82 5,905,684.35
Deferred income tax assets 242,914,956.98 225,186,332.58
Other non-current assets 29,776,415.75 17,138,349.61
Total non-current assets 1,934,332,093.59 1,874,523,658.61
Total assets 13,547,022,232.16 15,246,951,143.54
Current liabilities:
Short-term borrowings 16,806,882.34
Financial liabilities at fair value through profit or loss 2,287,302.98
Derivative financial liabilities
Notes payable 2,388,399,378.38 1,678,546,630.26
Accounts payable 3,561,506,900.23 4,395,361,312.16
Advances from customers 453,158,337.38 1,862,974,982.38
Payroll payable 192,419,861.91 268,065,495.23
Taxes payable 267,379,270.73 353,920,883.93
Interest payable
Dividends payable 9,049,503.92 6,996,784.06
Other payables 117,503,996.19 146,982,721.63
Liabilities directly associated with assets classified as held for sale
Current portion of non-current liabilities
Other current liabilities 1,459,958,436.52 1,336,384,942.60
Total current liabilities 8,451,662,988.24 10,066,040,634.59
Non-current liabilities:
Long-term borrowings
5
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 8,451,662,988.24 10,066,040,634.59
Owners’ equity:
Share capital 632,487,764.00 632,487,764.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 1,444,087,483.55 1,405,575,239.68
Less: Treasury shares
Other comprehensive income 17,203,068.47 27,970,054.39
Specific reserve
Surplus reserves 319,944,578.39 319,944,578.39
Retained profits 2,681,636,349.51 2,794,932,872.49
Total owners’ equity 5,095,359,243.92 5,180,910,508.95
Total liabilities and owners’ equity 13,547,022,232.16 15,246,951,143.54
3. Consolidated Income Statement
Unit: RMB
Item H1 2018 H1 2017
1. Revenue 12,056,938,286.05 10,568,060,854.21
Including: Operating revenue 12,056,938,286.05 10,568,060,854.21
Interest income
Premium income
Handling charge and commission income
6
2. Operating costs and expenses 10,930,076,719.93 9,801,989,312.87
Including: Cost of sales 8,849,801,833.02 7,861,371,811.78
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surtaxes 66,817,703.11 64,532,273.74
Selling expense 1,769,706,658.94 1,533,889,871.40
Administrative expense 451,163,055.68 328,163,105.40
Finance costs -231,352,118.98 -23,523,197.84
Asset impairment loss 23,939,588.16 37,555,448.39
Add: Gain on changes in fair value (“-” for loss) -10,070,851.50 4,917,873.13
Investment income (“-” for loss) 76,902,741.54 181,665,882.11
Including: Share of profit or loss of joint ventures and associates
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss) 634,455.90
Other income 27,971,652.00 15,806,553.77
3. Operating profit (“-” for loss) 1,222,299,564.06 968,461,850.35
Add: Non-operating income 7,366,461.87 15,623,753.30
Less: Non-operating expense 790,740.84 3,079,657.86
4. Profit before taxation (“-” for loss) 1,228,875,285.09 981,005,945.79
Less: Income tax expense 225,410,775.48 148,245,695.78
5. Net profit (“-” for net loss) 1,003,464,509.61 832,760,250.01
5.1 Net profit from continuing operations (“-” for net loss) 1,003,464,509.61 832,760,250.01
5.2 Net profit from discontinued operations (“-” for net loss)
Net profit attributable to owners of the Company as the parent 902,047,046.42 731,540,502.47
Net profit attributable to non-controlling interests 101,417,463.19 101,219,747.54
6. Other comprehensive income, net of tax -12,473,938.60 -32,416,277.72
Attributable to owners of the Company as the parent -11,952,098.73 -27,421,035.91
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes in net liabilities or assets caused by remeasurements on
defined benefit pension schemes
7
6.1.2 Share of other comprehensive income of investees that will not be
reclassified to profit or loss under equity method
6.2 Items that may subsequently be reclassified to profit or loss -11,952,098.73 -27,421,035.91
6.2.1 Share of other comprehensive income of investees that will be
reclassified to profit or loss under equity method
6.2.2 Gain/Loss on changes in fair value of available-for-sale financial
-11,954,415.00 -27,414,609.36
assets
6.2.3 Gain/Loss arising from reclassification of held-to-maturity
investments to available-for-sale financial assets
6.2.4 Effective gain/loss on cash flow hedges
6.2.5 Differences arising from translation of foreign
2,316.27 -6,426.55
currency-denominated financial statements
6.2.6 Other
Attributable to non-controlling interests -521,839.87 -4,995,241.81
7. Total comprehensive income 990,990,571.01 800,343,972.29
Attributable to owners of the Company as the parent 890,094,947.69 704,119,466.56
Attributable to non-controlling interests 100,895,623.32 96,224,505.73
8. Earnings per share
8.1 Basic earnings per share 1.43 1.16
8.2 Diluted earnings per share 1.43 1.16
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Operating revenue 8,455,200,768.71 7,759,223,092.31
Less: Cost of sales 6,418,259,181.32 5,996,000,032.58
Taxes and surtaxes 41,081,819.40 44,435,454.94
Selling expense 1,201,302,691.12 1,018,772,573.33
Administrative expense 363,636,150.54 270,135,520.31
Finance costs -140,156,569.84 -28,038,916.25
Asset impairment loss 4,306,909.22 15,145,318.12
Add: Gain on changes in fair value (“-” for loss) -6,012,113.45 4,277,601.99
Investment income (“-” for loss) 47,856,987.09 93,359,516.82
Including: Share of profit or loss of joint ventures and associates
Asset disposal income (“-” for loss) -423,677.25
Other income 2,828,142.34
8
2. Operating profit (“-” for loss) 611,019,925.69 540,410,228.09
Add: Non-operating income 6,052,314.08 8,461,114.95
Less: Non-operating expense 662,692.00 1,598,940.52
3. Profit before taxation (“-” for loss) 616,409,547.77 547,272,402.52
Less: Income tax expense 97,218,306.75 85,606,709.99
4. Net profit (“-” for net loss) 519,191,241.02 461,665,692.53
4.1 Net profit from continuing operations (“-” for net loss) 519,191,241.02 461,665,692.53
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax -10,766,985.93 -15,363,138.05
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes in net liabilities or assets caused by remeasurements on
defined benefit pension schemes
5.1.2 Share of other comprehensive income of investees that will not be
reclassified into profit or loss under equity method
5.2 Items that may subsequently be reclassified to profit or loss -10,766,985.93 -15,363,138.05
5.2.1 Share of other comprehensive income of investees that will be
reclassified into profit or loss under equity method
5.2.2 Gain/Loss on changes in fair value of available-for-sale financial
-10,766,985.93 -15,363,138.05
assets
5.2.3 Gain/Loss arising from reclassification of held-to-maturity investments
to available-for-sale financial assets
5.2.4 Effective gain/loss on cash flow hedges
5.2.5 Differences arising from translation of foreign currency-denominated
financial statements
5.2.6 Other
6. Total comprehensive income 508,424,255.09 446,302,554.48
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 7,969,115,684.30 6,722,546,282.77
Net increase in customer deposits and deposits from banks and other financial
institutions
9
Net increase in loans from central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Net increase in proceeds from disposal of financial assets at fair value through
profit or loss
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Tax rebates 18,677,078.35 35,550,472.93
Cash generated from other operating activities 65,692,959.29 46,492,111.69
Subtotal of cash generated from operating activities 8,053,485,721.94 6,804,588,867.39
Payments for commodities and services 6,150,288,344.76 4,509,538,095.07
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank loans granted
Payments for claims on original insurance contracts
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 782,742,734.50 620,865,515.47
Taxes paid 676,009,928.86 472,145,836.29
Cash used in other operating activities 271,215,691.41 1,344,450,112.80
Subtotal of cash used in operating activities 7,880,256,699.53 6,946,999,559.63
Net cash generated from/used in operating activities 173,229,022.41 -142,410,692.24
2. Cash flows from investing activities:
Proceeds from disinvestments 7,685,000,000.00 2,895,000,000.00
Investment income 76,902,741.54 181,837,920.52
Net proceeds from disposal of fixed assets, intangible assets and other
1,793,467.10 723,271.02
long-lived assets
Net proceeds from disposal of subsidiaries or other business units 2,415,000.00
Cash generated from other investing activities 111,282,573.06 16,802,196.35
Subtotal of cash generated from investing activities 7,874,978,781.70 3,096,778,387.89
Payments for acquisition of fixed assets, intangible assets and other long-lived
190,893,692.74 79,751,100.92
assets
Payments for investments 7,050,000,000.00 3,465,000,000.00
10
Net increase in pledged loans granted
Net payments for acquisition of subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities 7,240,893,692.74 3,544,751,100.92
Net cash generated from/used in investing activities 634,085,088.96 -447,972,713.03
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests to subsidiaries
Increase in borrowings obtained 170,000,000.00
Net proceeds from issuance of bonds
Cash generated from other financing activities
Subtotal of cash generated from financing activities 170,000,000.00
Repayment of borrowings 81,393,672.34 183,813,064.12
Payments for interest and dividends 644,659,161.07 470,510,888.90
Including: Dividends paid by subsidiaries to non-controlling interests
Cash used in other financing activities
Subtotal of cash used in financing activities 726,052,833.41 654,323,953.02
Net cash generated from/used in financing activities -726,052,833.41 -484,323,953.02
4. Effect of foreign exchange rate changes on cash and cash equivalents -2,843,992.20
5. Net increase in cash and cash equivalents 78,417,285.76 -1,074,707,358.29
Add: Cash and cash equivalents, beginning of the period 1,417,489,071.71 4,171,689,917.21
6. Cash and cash equivalents, end of the period 1,495,906,357.47 3,096,982,558.92
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 6,468,247,142.50 5,000,964,767.84
Tax rebates
Cash generated from other operating activities 17,928,127.28 20,559,743.51
Subtotal of cash generated from operating activities 6,486,175,269.78 5,021,524,511.35
Payments for commodities and services 4,428,038,167.84 3,201,385,866.98
Cash paid to and for employees 558,115,177.17 439,863,524.85
Taxes paid 358,960,977.35 284,758,489.88
11
Cash used in other operating activities 214,338,314.97 905,013,311.49
Subtotal of cash used in operating activities 5,559,452,637.33 4,831,021,193.20
Net cash generated from/used in operating activities 926,722,632.45 190,503,318.15
2. Cash flows from investing activities:
Proceeds from disinvestments 3,935,000,000.00 1,625,000,000.00
Investment income 47,856,987.09 92,023,835.23
Net proceeds from disposal of fixed assets, intangible assets and other
269,811.40 192,710.01
long-lived assets
Net proceeds from disposal of subsidiaries or other business units 2,415,000.00
Cash generated from other investing activities 55,212,504.56 13,702,196.35
Subtotal of cash generated from investing activities 4,038,339,303.05 1,733,333,741.59
Payments for acquisition of fixed assets, intangible assets and other long-lived
129,504,678.24 31,162,375.53
assets
Payments for investments 4,600,000,000.00 1,895,000,000.00
Net payments for acquisition of subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities 4,729,504,678.24 1,926,162,375.53
Net cash generated from/used in investing activities -691,165,375.19 -192,828,633.94
3. Cash flows from financing activities:
Capital contributions received
Increase in borrowings obtained 135,000,000.00
Net proceeds from issuance of bonds
Cash generated from other financing activities
Subtotal of cash generated from financing activities 135,000,000.00
Repayment of borrowings 16,806,882.34 123,943,093.80
Payments for interest and dividends 641,299,593.52 470,510,888.90
Cash used in other financing activities
Sub-total of cash used in financing activities 658,106,475.86 594,453,982.70
Net cash generated from/used in financing activities -658,106,475.86 -459,453,982.70
4. Effect of foreign exchange rate changes on cash and cash equivalents -2,384,725.50
5. Net increase in cash and cash equivalents -424,933,944.10 -461,779,298.49
Add: Cash and cash equivalents, beginning of the period 945,759,061.62 2,353,708,554.75
6. Cash and cash equivalents, end of the period 520,825,117.52 1,891,929,256.26
12
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent
Other equity
instruments
Item Less: Spec Gen
Other Non-controlling Total owners’
Pref
Perp Treasu ific eral
Share capital Capital reserves comprehensive Surplus reserves Retained profits interests equity
erre
etual Othe ry reser reser
d income
bond r shares ve ve
shar
s
es
1. Balances as of end of prior year 632,487,764.00 1,252,947,546.80 40,496,366.85 332,594,722.29 4,788,564,401.03 1,171,207,212.07 8,218,298,013.04
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Adjustments for business
combinations involving enterprises
under common control
Other adjustments
2. Balances as of beginning of the
632,487,764.00 1,252,947,546.80 40,496,366.85 332,594,722.29 4,788,564,401.03 1,171,207,212.07 8,218,298,013.04
year
13
3. Increase/ decrease in the period (“-”
43,846,522.21 -11,952,098.73 269,559,282.42 102,771,847.55 404,225,553.45
for decrease)
3.1 Total comprehensive income -11,952,098.73 902,047,046.42 100,895,623.32 990,990,571.02
3.2 Capital increased and reduced
43,846,522.21 1,876,224.23 45,722,746.43
by owners
3.2.1 Ordinary shares increased
by shareholders
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
43,846,522.21 1,876,224.23 45,722,746.43
included in owners’ equity
3.2.4 Other
3.3 Profit distribution -632,487,764.00 -632,487,764.00
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to general
reserve
3.3.3 Appropriation to owners
-632,487,764.00 -632,487,764.00
(or shareholders)
3.3.4 Other
3.4 Carryforwards within owners’
equity
3.4.1 Increase in capital (or share
capital) from capital reserves
3.4.2 Increase in capital (or share
14
capital) from surplus reserves
3.4.3 Surplus reserves used to
make up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
3.5.2 Used during the period
3.6 Other
4. Balances as of end of the period 632,487,764.00 1,296,794,069.01 28,544,268.12 332,594,722.29 5,058,123,683.45 1,273,979,059.62 8,622,523,566.49
H1 2017
Unit: RMB
H1 2017
Equity attributable to owners of the Company as the parent
Other equity Less
Item instruments : Spec Gener
Other Non-controlling Total owners’
Perp Trea ific al
Share capital Capital reserves comprehensive Surplus reserves Retained profits interests equity
Preferr
etual Othe sury reser reserv
ed income
bond r shar ve e
shares
s es
1. Balances as of end of prior year 632,487,764.00 1,191,490,133.01 70,757,524.61 332,594,722.29 3,756,517,718.81 975,247,204.68 6,959,095,067.40
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
15
previous errors
Adjustments for business
combinations involving enterprises
under common control
Other adjustments
2. Balances as of beginning of the
632,487,764.00 1,191,490,133.01 70,757,524.61 332,594,722.29 3,756,517,718.81 975,247,204.68 6,959,095,067.40
year
3. Increase/ decrease in the period (“-”
61,457,413.79 -30,261,157.76 1,032,046,682.22 195,960,007.39 1,259,202,945.64
for decrease)
3.1 Total comprehensive income -30,261,157.76 1,506,412,505.22 192,923,009.68 1,669,074,357.14
3.2 Capital increased and reduced
61,457,413.79 3,036,997.71 64,494,411.50
by owners
3.2.1 Ordinary shares increased
by shareholders
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
61,953,091.84 2,541,319.66 64,494,411.50
included in owners’ equity
3.2.4 Other -495,678.05 495,678.05
3.3 Profit distribution -474,365,823.00 -474,365,823.00
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to general
reserve
3.3.3 Appropriation to owners -474,365,823.00 -474,365,823.00
16
(or shareholders)
3.3.4 Other
3.4 Carryforwards within owners’
equity
3.4.1 Increase in capital (or share
capital) from capital reserves
3.4.2 Increase in capital (or share
capital) from surplus reserves
3.4.3 Surplus reserves used to
make up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
3.5.2 Used during the period
3.6 Other
4. Balances as of end of the period 632,487,764.00 1,252,947,546.80 40,496,366.85 332,594,722.29 4,788,564,401.03 1,171,207,212.07 8,218,298,013.04
17
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
H1 2018
Other equity instruments Less: Other
Item Specific
Share capital Preferred Perpetua Capital reserves Treasury comprehensive Surplus reserves Retained profits Total owners’ equity
Other reserve
shares l bonds shares income
1. Balances as of end of prior year 632,487,764.00 1,405,575,239.68 27,970,054.39 319,944,578.39 2,794,932,872.49 5,180,910,508.95
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Other adjustments
2. Balances as of beginning of the
632,487,764.00 1,405,575,239.68 27,970,054.39 319,944,578.39 2,794,932,872.49 5,180,910,508.95
year
3. Increase/ decrease in the period (“-”
38,512,243.87 -10,766,985.92 -113,296,522.98 -85,551,265.03
for decrease)
3.1 Total comprehensive income -10,766,985.92 519,191,241.02 508,424,255.10
3.2 Capital increased and reduced
38,512,243.87 38,512,243.87
by owners
3.2.1 Ordinary shares increased
by shareholders
3.2.2 Capital increased by
holders of other equity instruments
18
3.2.3 Share-based payments
38,512,243.87 38,512,243.87
included in owners’ equity
3.2.4 Other
3.3 Profit distribution -632,487,764.00 -632,487,764.00
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners
-632,487,764.00 -632,487,764.00
(or shareholders)
3.3.3 Other
3.4 Carryforwards within owners’
equity
3.4.1 Increase in capital (or share
capital) from capital reserves
3.4.2 Increase in capital (or share
capital) from surplus reserves
3.4.3 Surplus reserves used to
make up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
3.5.2 Used during the period
3.6 Other
4. Balances as of end of the period 632,487,764.00 1,444,087,483.55 17,203,068.47 319,944,578.39 2,681,636,349.51 5,095,359,243.92
19
H1 2017
Unit: RMB
H1 2017
Other equity instruments Less: Other
Item Specific
Share capital Preferred Perpetua Capital reserves Treasury comprehensive Surplus reserves Retained profits Total owners’ equity
Other reserve
shares l bonds shares income
1. Balances as of end of prior year 632,487,764.00 1,350,656,531.65 37,515,343.84 319,944,578.39 2,608,364,062.12 4,948,968,280.00
Add: Adjustments for changed accounting
policies
Adjustments for corrections of previous
errors
Other adjustments
2. Balances as of beginning of the year 632,487,764.00 1,350,656,531.65 37,515,343.84 319,944,578.39 2,608,364,062.12 4,948,968,280.00
3. Increase/ decrease in the period (“-” for
54,918,708.03 -9,545,289.45 186,568,810.37 231,942,228.95
decrease)
3.1 Total comprehensive income -9,545,289.45 660,934,633.37 651,389,343.92
3.2 Capital increased and reduced by
54,918,708.03 54,918,708.03
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders of
other equity instruments
3.2.3 Share-based payments included
54,918,708.03 54,918,708.03
in owners’ equity
20
3.2.4 Other
3.3 Profit distribution -474,365,823.00 -474,365,823.00
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners (or
-474,365,823.00 -474,365,823.00
shareholders)
3.3.3 Other
3.4 Carryforwards within owners’
equity
3.4.1 Increase in capital (or share
capital) from capital reserves
3.4.2 Increase in capital (or share
capital) from surplus reserves
3.4.3 Surplus reserves used to make
up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
3.5.2 Used during the period
3.6 Other
4. Balances as of end of the period 632,487,764.00 1,405,575,239.68 27,970,054.39 319,944,578.39 2,794,932,872.49 5,180,910,508.95
21
III. Company Profile
Wuxi Little Swan Company Ltd. (“the Company”) was incorporated as an oriented-collection company limited
with the approval of Su-Ti-Gai-Sheng (1993) No. 253 document from Economic Reform Commission of Jiangsu
Province on 29 November 1993. Then the Company domestically and publicly issued 70,000,000 shares of
B-share and transformed to a state-collectively–owned enterprise with the approval of (1996) No. 52 document
from Jiangsu Province of the People’s Republic of China (the “PRC”), Zheng-Wei-Fa (1996) No. 14 document
from China Securities Regulatory Commission of the State Council and Shen-Zheng-Ban-Han (1996) No. 4 from
Shenzhen Municipal Securities Regulatory Office on July 1996, which amounted to RMB310 million of the share
capital of the Company after the issuance.
In March 1997, the Company domestically and publicly issued 60,000,000 shares of RMB ordinary share
(including 9,000,000 shares of staff-share) with the approval of Zheng-Jian-Fa-Zi (1997) No. 55 from CSRC. And
the total raised fund from this issuance of A-share totaled RMB720.83 million, and the Company was formally
listed in Shenzhen Stock Exchange in March 1997 with the short form of stock as Little Swan A and stock code as
000418.
On 20 July 2006, the proposal on the equity division reform of the Company reviewed and approved by the
relevant shareholders meeting with the consideration of the non-circulating shareholders paid for the circulating
stock shareholders of the Company for acquiring the circulation right for the non-circulating shares held by them:
regarded 4 August 2006 as the shares alternation registration date as well as executed the consideration proposal
by paying 2.5 shares of every 10 shares for the A shares circulating stock shareholders on 7 August 2006 and the
shares with consideration listed and circulated on that date. After the execution of the above consideration of the
bonus, the total amount of the shares of the Company remains the same, while the shares structure
correspondingly changed.
On 9 May 2008, the 2007 Annual General Meeting reviewed and approved the 2007 Dividend Plan: adding five
shares to every ten shares basing on the total share capital of 365,103,840 shares at the end of 2007, transferring
the public reserves to 182,551,920 shares with par value of RMB1 per share, thus the added share capital totaled
RMB182,551,920 and after which, the total share capital turned from 365,103,840 shares to 547,655,760 shares of
the Company.
According to the resolutions of the 4th Meeting of the 6th Board of Directors and The 1st Extraordinary General
Meeting of 2010, having approved by China Securities Regulatory Commission of the Reply to the Approval of
22
the Significant Assets Reorganization and the Purchase of the Assets of GD Midea Holding by Wuxi Little Swan
Co., Ltd. (ZJXK [2010] 1577) on 9 November 2010, the company launched directional add-issuance of
84,832,000.00 A shares to buy 69.47% of the shares of Hefei Midea Washing Machine Co., Ltd.(original name:
Hefei Rongshida Washing Equipment Manufacturing Co., Ltd) from its shareholder GD Midea Holding Co., Ltd..
This add-issuance increased the share capital by RMB84,832,000.00
After approved by CSRC through the Reply of the Approval of the Merger of GD Midea Holding by Midea
Group Co., Ltd. (ZJXK [2013] 1014 document) that issued on 29 July 2013, Midea Group had split off as well as
consolidated and combined the original controller GD Midea Holding on 18 September 2013. After the
consolidation and combination, Midea Group inherited and undertook the whole rights and obligations of the
whole assets and liabilities etc of GD Midea Holding as the reminder enterprise and had finished the relevant
registration procedures of shares transfer on 31 December 2013, and after which, Midea Group changed to be the
first largest shareholder of the Company.
By 30 June 2018, the total amount of the outstanding common shares of the company were 632,487,764 shares,
among which the restricted exchange-traded A shares are 2,087,745 shares, accounting for 0.33% of the whole
shares; the unrestricted exchange-traded A shares are 439,364,147 shares, accounting for 69.47%; and the
unrestricted exchange-traded B shares are 191,035,872 shares, account for 30.20% of the whole shares.
Registered address of the Company and the headquarters office address is No. 18 of Changjiang South Road,
National High-tech Industrial Development Zone, Wuxi City, Jiangsu Province.
The Company and its subsidiaries belong to household appliances so the main business scope is as follows:
manufacture and sales as well as after-sale service of household appliances, industrial ceramics, environmental
dry-cleaning equipment, cleaning mechanical equipment, subsequent finishing equipment and accessory; cleaning
service; machinery processing; import and export business of “Little Swan” or agent products and technologies
(excluding the products or technology restricted to operate, export or import in China); technical service for
household appliances; contracting foreign engineering in international bidding (operate with effective certificate);
used self-owned funds to investment in financial industry.
The financial statements were approved and authorized for issue by the Board of Directors on the date of 6 August
2018.
For the major subsidiaries that included in the consolidated scope of the Reporting Period, please refer to the
Notes IX.
23
IV. Basis for the Preparation of Financial Statements
1. Preparation Basis
The financial report compiled according to the ASBE-Basic Criterion issued by Ministry of Finance on 15
February 2006 and the follow-up periods, each specific accounting criterions as well as the relevant regulations
(hereinafter referred to as a whole of “ASBE) and the Compilation Rules for Information Disclosure by
Companies Offering Securities to the Public No. 15 – General Provisions on Financial Reports (2014 Revision)
issued by the China Securities Regulatory Commission (CSRC).
2. Continuation
The financial report compiled based on the continuation.
V. Important Accounting Policies and Estimations
1. Statement of Compliance with Enterprise Accounting Standards
The 2018 interim financial statements of the Company comply with the requirements of Accounting Standards
with the merger on 30 June 2018 and the Company’s financial conditions as well as the relevant information of the
semi-annual merger of Y2018 and the operation results and the cash flow of the Company are truly and
completely disclosed in the financial statements.
2. Accounting Period
The Company’s accounting year is from January 1st to December 31st for each calendar year.
3. Fiscal Period
The fiscal periods of an enterprise includes fiscal years and fiscal periods shorter than a complete fiscal year. The
fiscal period of the Company is 12 months.
4. Recording Currency
The recording currency of the Company is RMB. Subsidiaries of the Company confirmed the recording currency
according to their primary economic environment, among which the recording currency of the subsidiary of Little
Swan International (Singapore) Company Limited is USD. The financial statement is presented and listed by
RMB.
24
5. Accounting Processing Method of Business Combination Under the Same Control and not Under the
Same Control
(a) The Business Combinations which are Under the Same Control
Combination consideration paid by the combining party and net assets acquired shall all be measured based on
their book value, but if the combined party was acquired by the final controlling party from the third party in
previous years, then they are based on the book value of assets and liabilities of the combined party (including the
goodwill formed from the acquisition of the combined party by the final controlling party) in the consolidated
financial statements of the final controlling party. Corresponding capital reserve (capital stock premium) shall be
adjusted according to the difference between the book value of such net assets and that of the combination
consideration; when such capital reserve (capital stock premium) cannot write them down, retained earnings shall
be adjusted. Meanwhile, relevant direct expenses resulting from such business combination shall be included in
the profit and loss for the period, and all transaction expenses resulting from issuing equity securities or debt
securities for such business combination shall be included in the initial recognition amount of such equity security
or debt security.
(b) Business Combination not Under the Same Control
Combination costs occurred to purchaser and obtained net identifiable assets shall be calculated based on the fair
value in the purchasing date. If combination costs are greater than the seller’s balance obtained from the fair value
of net identifiable assets in the purchasing date, such surplus shall be confirmed as Goodwill; if less, such balance
shall be included in current profit and loss. Meanwhile, relevant direct expenses resulting from such business
combination shall be included in the profit and loss for the period, and all transaction expenses resulting from
issuing equity securities or debt securities for such business combination shall be included in the initial
recognition amount of such equity security or debt security.
6. Consolidated Financial Statement Compilation Method
The consolidation scope of financial statement shall include the company and all subsidiaries.
From the day when the company obtained the actual control of its subsidiaries, the company could initiate
corresponding consolidation which shall be ended up to the day of losing such actual control. Subsidiaries
obtained through business combination under the same control shall be incorporated into the consideration scope
from the day when they’re put under the control of the final controlling party, and the net profit realized before the
25
combination day shall be individually reflected in the consolidated income statement.
When consolidated financial statement is being formulated, the company’s accounting policy and accounting
period shall be regarded as final and binding to adjust the subsidiary’s financial statement if the subsidiary’s
accounting policy is not consistent with that of the company. For the subsidiary acquired through business
combination not under the same control, its financial statement shall be adjusted based on the fair value of the net
identifiable assets in the day of purchase.
All of the major incoming and outgoing balances of the Company and its subsidiaries, transactions and unrealized
profit shall be set off during the compilation of the consolidated financial statement. The subsidiary’s shareholder
equity, net profit and loss for the period and the part of comprehensive income not belonging to the company shall
be individually indicated and shown in the consolidated financial statement under shareholder’s equity, net profit
and total comprehensive income respectively as minority equity, minority interest income and total comprehensive
income attributed to minority shareholders. All unrealized internal transaction profit and loss resulting from the
company’s sales of assets to the subsidiary shall be applied to set off the net profit attributed to the parent
company’s shareholders; all unrealized internal transaction profit and loss resulting from the subsidiary’s sales of
assets to the parent company shall be set off accordingly by the net profit attributed the parent company’s
shareholders and minority interest income based on corresponding distribution ratio (the company to the
subsidiary). All unrealized internal transaction profit and loss resulting from assets sales among subsidiaries shall
be set off accordingly by the net profit attributed the parent company’s shareholders and minority interest income
based on corresponding distribution ratio (the company to the seller’s subsidiary).
If any discrepancy exists between the recognition by regarding the company and its subsidiaries as the accounting
subject and the recognition by regarding the company or its subsidiary as the accounting subject in terms of the
same transaction, this transaction shall be adjusted from the perspective of combination.
7. Cash and Cash Equivalent Recognition Standard
The company’s cash and cash equivalent shall include cash in treasury, deposit that can be applied for any
payment at any time, cashes featuring short time limit, strong flowability and convenience in conversion into
known amount and investment of low risk in value variations.
8. Foreign Currency Transaction and Foreign Currency Statement Translation
(a) Foreign Currency Transaction
26
Foreign currency transaction shall be recorded in an account based on recording currency (through applying the
spot rate in the day of transaction).
On balance sheet day, foreign currency monetary items shall be converted into recording currency based on the
spot rate of exchange. The exchange difference resulting from the specific foreign currency borrowings in order to
purchase and construct the assets in conformity with corresponding capitalization conditions shall be capitalized
during the process of capitalization, and other exchange differences shall be directly included in profit and loss for
the period. Foreign currency non-monetary items measured at historical cost shall be converted based on the spot
rate of exchange on balance sheet day. The amount of cash subject to the change in exchange rate shall be
individually indicated and shown in cash flow statement.
(b) Foreign Currency Statement Translation
Assets and liabilities stated in balance sheet statement (overseas operation) shall be converted based on the spot
rate of exchange on balance sheet day; in terms of shareholder’s equity, except undistributed profit, other items
shall be converted based on the spot rate of exchange. Income and cost items stated in balance sheet statement
(overseas operation) shall be converted based on the spot rate of exchange in the day of purchase. Corresponding
foreign currency statement translation differences mentioned above shall be included in other comprehensive
incomes. Cash flow items (overseas operation) shall be converted based on the spot rate of exchange in the day of
cash flow. Meanwhile, the amount of cash subject to the change in exchange rate shall be individually indicated
and shown in cash flow statement.
9. Financial Instruments
(a) Financial Assets
(i) Classification of Financial Assets
Upon initial recognition, financial assets shall be classified into financial assets at fair value through profit or loss,
account receivable, available-for-sale financial assets. However, the classification of financial assets depends on
the Company and its subsidiaries’ intention and capacity of holding such financial assets.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of sale in a short
time.
Account receivable
27
Account receivable refers to non-derivative financial assets with fixed or recognized recovery cost and no quoted
price in the active market.
Available-for-sale financial assets
Available-for-sale financial assets include available-for-sale non-derivative financial assets designated upon the
initial recognition and financial assets not classified into others. Within 12 months after balance sheet day, (sold)
available-for-sale financial assets shall be shown in balance sheet statement as other current assets.
(ii) Recognition and Measurement
When the Company and its subsidiaries becomes one party for the financial instrument contract, financial assets
shall be recognized based on its fair value in balance sheet statement. Transaction expenses resulting from
financial assets measured based on its fair value and its variations included in profit and loss for the period shall
be included in profit and loss for the period; other transaction expenses related to such financial assets shall be
included in the amount after initial recognition.
Follow-up measurement shall be conducted for financial assets at fair value through profit or loss and
available-for-sale financial assets based on their fair value while equity instrument investment that cannot be
reliably measured without any quoted price in the active market shall be measured based on costs; receivables and
held-to-maturity investment shall be measured based on amortized cost by means of effective interest method.
The fair value change of financial assets at fair value through profit or loss shall be included into the current profit
and loss as the fair value change’s profit and loss; interests or cash dividends from assets in holding period and the
disposal profit and loss when disposed shall be included into the current profit and loss.
Except depreciation loss and corresponding exchange profit and loss resulting from foreign currency monetary
financial assets, variations of the fair value of available-for-sale financial assets shall be directly included in
shareholder’s equity. When such financial asset is derecognized, total variation previously included in equity shall
be directly transferred to profit and loss for the period. Interests from investment into available-for-sale debt
instruments calculated by effective interest method in the holding period and cash dividends (related to
available-for-sale equity instrument investment) declared for distribution by the invested unit shall be included in
profit and loss for the period as income from investment.
(iii) Financial Assets Depreciation
Except the financial assets at fair value through profit or loss, the Company and its subsidiaries shall check the
book value of corresponding financial assets on balance sheet day; if any objective evidence proves the
28
depreciation of certain financial assets, corresponding depreciation reserve shall be calculated and withdrawn.
Such objective evidence refers to any matter actually happened that will influence the future cash flow prediction
of such financial assets after the initial recognition, and the company is able to reliably measure such matter.
Objective evidences indicating the depreciation of available-for-sale equity instrument investment include any
sharp or permanent drop of corresponding fair value of such equity instrument investment. The Company and its
subsidiaries shall respective check various available-for-sale equity instrument investments on balance sheet day.
If such the fair value of such equity instrument investment on balance sheet day is less than its initial investment
cost (such difference exceeding 50%) or such duration exceeds 1 year (including 1 year), it shall be the sign of
depreciation; if such difference reaches 20% (including 20%) to 50%, the company shall completely take relevant
factors into consideration including price fluctuation so as to judge whether such equity instrument investment is
depreciated. The company shall apply weighted mean method to calculate the initial investment cost of such
available-for-sale equity instrument investment.
When financial assets measured based on amortized cost is depreciated, corresponding depreciation reserve shall
be calculated and withdrawn based on the difference resulting from the current value of expected future cash flow
(excluding future credit loss not occurred) less than its book value. If any objective evidence proves the recovery
of such financial assets and it’s related to the matter after the recognition of such loss, depreciation loss originally
recognized shall be restituted and included in profit and loss for the period.
When available-for-sale financial assets measured based on fair value is depreciated, the total loss previously
included in shareholder’s equity resulting from the decrease in fair value shall be restituted and included in
depreciation loss. For available-for-sale debt instrument investment whose depreciation loss is recognized,
depreciation loss previously recognized shall be restituted and included in profit and loss for the period when it is
related to the matter happened after original depreciation loss is recognized and such value increases. For
available-for-sale equity instrument investment whose depreciation loss is recognized, the increase of fair value
shall be directly included in shareholder’s equity.
When available-for-sale financial assets measured based on cost is depreciated, the difference between its book
value and its current value recognized from its future cash flow based on its market return shall be recognized as
depreciation loss and included in profit and loss for the period. Such resulting depreciation loss shall not be
restituted any longer.
(iv) Derecognition of Financial Assets
29
Corresponding financial assets shall be derecognized when any of the following conditions is met: (1) the
contractual right to collect the cash flow of such financial assets is terminated; (2) such financial assets is
transferred, and the Company and its subsidiaries have transferred all risks and rewards related to its ownership to
the party accepting such financial assets; or (3) such financial assets is transferred. Although the Company and its
subsidiaries do not transfer and retain all risks and rewards related to its ownership, it gives up its control of such
financial assets.
When such financial assets is derecognized, the difference between its book value and the sum of received
consideration and the total variation of fair value in shareholder’s equity shall be included in profit and loss for the
period.
(b) Financial Liabilities
Upon initial recognition, financial liabilities shall be classified into financial assets measured based on its fair
value and its variations included in profit and loss for the period and other financial liabilities. However, the
Company and its subsidiaries’ financial liabilities are mainly other financial liabilities, including short-term
borrowing, notes payable, accounts payable, dividends payable, and other accounts payable, as well as other
current liabilities, which shall be initially measured based on fair value. Meanwhile, follow-up measurement shall
also be conducted by means of effective interest method based on amortized cost.
Borrowings shall be initially measured based on fair value and the amount deducting relevant transaction
expenses. Meanwhile, follow-up measurement shall also be conducted by means of effective interest method
based on amortized cost.
Other financial liabilities with the time limit less than 1 year (including 1 year) shall be indicated and shown as
current liabilities; if such time limit exceeds 1 year, but such financial liability will be due within (including) 1
year as of balance sheet day, such financial liability shall be indicated and shown as non-current liabilities due
within one year. Others shall be reported as non-current liabilities.
When corresponding financial liability’s current obligation is fully or partially relieved, the relieved part shall be
derecognized. The difference between the book value of the derecognized part and the consideration shall be
included in profit and loss for the period.
(c) Recognition of Fair Value of Financial Instrument
The fair value of financial instrument existing in the active market shall be recognized based on its quoted price in
the active market. The fair value of financial instrument not existing in the active market shall be recognized by
30
means of corresponding valuation technology. During the valuation process, the Company and its subsidiaries
shall apply appropriate valuation technology with strong support from adequate usable data and other information
and select the input value consistent with relevant assets or liabilities features considered by market participants in
conducting relevant transactions. Meanwhile, corresponding observable input value shall be first choice. When it’s
impossible or not feasible to obtain such observable input value, unobservable input value shall be put into
service.
10. Receivables
(a) Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made
Individually
The single amount of the accounts receivable accounts for more than or equal to 10% of
Definition or amount criteria for an the total accounts receivable, or the single amount is more than or equal to
account receivable with a significant RMB10,000,000; the single amount of the other accounts receivable at the period-end
single amount accounts for more than or equal to 10% of the total other accounts receivable, or the
single amount is more than or equal to RMB5,000,000.
Making individual bad-debt provisions for
Executes the withdrawal according to the difference that the current value of the
accounts receivable with a significant
expected future cash flow lowers than its book value of the accounts receivable.
single amount
(b) Accounts Receivable which the Bad Debt Provision is Withdrawn by Credit Risk Characteristics
Name of portfolios Bad debt provision method
Aging group Aging analysis
In the groups, those adopting aging analysis method to withdraw bad debt provision:
Aging Provision rate for Accounts Receivable Provision rate for Other Receivables
Within 1 year (including 1 year) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
3-4 years 50.00% 50.00%
4-5 years 50.00% 50.00%
Over 5 years 100.00% 100.00%
In the groups, those adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
31
(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is Made
Independently
There is objective evidence indicate that the Company and its subsidiaries couldn’t
Reason for bad debt provision
withdraw the accounts according to the original articles of the accounts receivable.
Withdrawal method Executes the withdrawal according to the difference that the current value of the
expected future cash flow lowers than its book value of the accounts receivable.
11. Inventory
(a) Category
Inventory includes raw materials, products in process, stock merchandises and revolving materials that measured
according to the lower one between the cost and the net realizable value.
(b) Pricing method for distributed inventories
Inventories are measured at weighted average method when procured, while the cost of the stock merchandises
and the products in process includes the raw materials, direct labor and manufacturing expenses assigned
according to the system under the normal capacity.
(c) Recognition basis of net realizable value of inventories and withdrawal method for impairment provision of
inventories
When the net realizable value is lower than the cost, provisions for impairment of inventories shall be drawn. The
net realizable value is confirmed according to the amount after the estimated sales price of the inventory minus the
amount of the estimated cost occur when the work finished and the estimated sales expenses as well as the
relevant taxes among the daily activities.
(d) The inventory system of the Company and its subsidiaries are perpetual inventory system.
(e) The method of amortization of the low priced and easily worn articles and the wrappages
The revolving materials include the low priced and easily worn articles and the wrappages and so on, while they
both are amortized by one time write-off method.
12. Long-term Equity Investment
Long-term equity investments include the company’s long-term equity investment made to the subsidiary.
The subsidiary refers to the invested unit under the Company’s control
The investment to the subsidiary shall be shown in the company’s financial statement based on the amount
recognized through cost method, and consolidated after corresponding adjustment according to equity law when
32
the consolidated financial statement is being formulated.
(a) Investment Cost Recognition
Long-term equity investment resulting from business combination: for long-term equity investment resulting from
business combination under the same control, corresponding investment cost shall be determined based on the
share of book value of the owner’s equity of the combined party in the final controlling party’s consolidated
financial statements in the day of combination; for long-term equity investment resulting from business
combination not under the same control, corresponding investment cost shall be determined based on
corresponding combination cost.
Long-term equity investment obtained by other means except business combination: for long-term equity
investment obtained by paying cash, its initial investment cost shall be the actual purchasing payment; for
long-term equity investment obtained by issuing equity securities, the fair value of such equity security shall be its
initial investment cost.
(b) Follow-up Measurement and Profit and Loss Recognition Method
Long-term equity investment calculated by using cost method shall be measured based on its initial investment
cost; cash dividends or profits declared by the invested unit for distribution shall be recognized as investment
revenue and included in profit and loss for the period.
For long-term equity investment calculated by using equity method, if initial investment cost is more than the
share of fair value of the invested unit’s net identifiable assets, such initial investment cost shall be the long-term
equity investment cost; if such initial investment cost is less than the share of fair value of the invested unit’s net
identifiable assets, such resulting difference shall be included in profit and loss for the period and the long-term
equity investment cost shall be accordingly adjusted and increased.
For long-term equity investment calculated by using equity method, the company shall recognize corresponding
profit and loss for the period according to the share of net profit and loss obtained or held from the invested unit.
In terms of the recognition of the invested unit’s net loss, the long-term equity investment’s book value and other
long-term equities constituting the net investment made to the invested unit in reality shall be written down to
Zero, but when the company is obliged to burden corresponding extra loss and relevant expected liability
recognition conditions are met, corresponding investment loss shall still be recognized and calculated as expected
liability. As for other changes in owner’s equity of the invested unit except net profit and loss, other
comprehensive revenue and profit distribution, the book value of long-term equity investment shall be adjusted
33
and included in capital reserve. Accordingly, the book value of long-term equity investment shall be reduced
based on the part attributed to the company when the profit or cash dividend is declared and distributed by the
invested unit. Meanwhile, the unrealized internal transaction profit and loss between the company and the
invested company shall be applied to determine and set off the part attributed to the company based on
corresponding shareholding ratio, on which basis, corresponding investment profit and loss shall be recognized. In
terms of the internal transaction loss resulted from the company and the invested unit, the part belonging to assets
impairment loss and corresponding unrealized loss shall not be set off.
(c) Basis for Confirming Joint Control and Important Influence on the Invested Party
Control means that the company has the right to control the invested party and enjoy variable returns through
participating in relevant activities of the invested party. In addition, the company is also able to make use of its
control right to influence such variable return.
Joint control refers to jointly control an arrangement as agreed by both parties, and activities related to the
arrangement can only be conducted with the consent from all parties involved in such joint control.
Important influence refers to the possession of the right to make decisions about the company’s financial and
business operation policies, but the establishment of these policies cannot be controlled or jointly controlled with
other parties.
(d) Long-term Equity Investment Depreciation
For long-term equity investments attributed to the subsidiary, when their recoverable amount is less than their
book value, such book value shall be written down to corresponding recoverable amount (Notes V (17)).
13. Investment property
Depreciation or amortization methods
An investment property includes the use rights of leased land and buildings for rental purposes, and is initially
recorded at cost. Subsequent expenditures related to an investment property shall be included into the cost under
conditions that relevant economic benefits are likely to flow in the company and the cost can be measured reliably.
Otherwise, they should be recorded into current profits and losses when incurred.
The Company and its subsidiaries conduct subsequent measurement of all investment properties in the model of
cost, and the depreciation of investment properties is withdrawn according to the difference of entry value minus
the net residual within the estimated useful life by the straight-line method. The estimated useful life, net residual
value and annual depreciation (amortization) rate are as follows:
34
Items Estimate Useful Life Net Residual Rate Annual Depreciation Rate
Buildings 20-35 years 5.00% 2.71%-4.75%
Land Use Rights 50 years - 2.00%
Investment properties should be transferred to fixed assets or intangible assets since the date of their being
changed for self-use. As the purposes of self-use properties are changed for generating rents or capital
appreciation, the fixed assets or intangible assets shall be transferred to investment properties from the date of
change. In time of change, the book value before transfer should be used as the recorded value after transfer.
Reviews and appropriate adjustments shall be made annually to the estimated useful life, estimated net residual
rate and depreciation (amortization) methods of the investment properties.
When an investment property is disposed or permanently out of use with the estimation that no further economic
benefits could be obtained from its proposal, it should be derecognized. The disposal revenue of an investment
property for sale, transfer, retirement or damage should be recorded into current profits and losses after deducting
book value and relevant taxes.
As the recoverable amount of an investment property is lower than its book value, its book value should be written
down as the recoverable amount (Note V (17)).
14. Fixed Assets
(a) Recognition Method
The fixed assets include the buildings, machineries and equipments, transportation tools, as well as office and
electronic equipment and so on, which are confirmed when the related economic benefits probably flow into the
Company and its subsidiaries with the cost could be reliable measured. The purchased and the newly built fixed
assets should be executed the initially measurement according to the cost when acquired. And the follow-up
expenses related to the fixed assets should be included in the fixed assets cost when the economic benefits related
to the former that probably flow into the Company and its subsidiaries with the cost could be reliable measured; as
for the part be replaced, should derecognize its book value; all of the other follow-up expenses should be included
in the current gains and losses when occur.
(b) Depreciation Method
Categories Depreciation method Estimated useful life Residual value Annual depreciation rate
Houses & buildings Average method of useful life 20-35 years 5.00% 2.71%-4.75%
Machineries Average method of useful life 10-15 years 5.00% 6.33%-9.50%
35
Transport machine Average method of useful life 5 years 5.00% 19.00%
Office and electronic
Average method of useful life 3-5 years 5.00% 19.00%-31.67%
equipments
Fixed assets are depreciated using the straight-line method based on their costs less estimated residual values over
their estimated useful lives. For a fixed asset whose provision for depreciation has been made, the depreciable
amount is confirmed by book value after deducting impairment provision and its service life in future period.
When the recoverable amount of the fixed assets lower than the book value, should reduce the amount of the
book value and include in the recoverable amount (Note V (17)).
Disposal of the fixed assets
When the fixed assets be disposed, or expected not to produce any economic benefits through usage or disposal,
should derecognize the fixed assets. The amount of the disposal revenues of the sales, transfer, scrap or damage
that deducted the book value as well as the relevant taxes should be included in the current gains and losses.
15. Construction in Progress
Construction in progress shall be measured at actual cost. The actual cost comprises construction cost, installation
cost, borrowing costs eligible for capitalization, and other expenditures necessary for the construction in progress
to reach the intended use. Construction in progress is transferred to fixed assets when the assets are ready for their
intended use, and depreciation begins from the following month. As the recoverable amount of the construction in
progress is lower than the book value, its book value should be written down as the recoverable amount。
16. Intangible Assets
(a) Evaluation Methods, Useful Life, Impairment Test
Intangible assets comprise land use rights, and non-patented technology and software etc, which are measured at
cost.
(i) Land Use Rights
The land use right allocated by the nation is zero-cost, and there is no specific use term in the land use right
certificate, which should not be amortized. The other land use rights should be averagely amortized based in use
term of 50 years. Charges of lands and buildings purchasing which could not be reasonably allocated between
land use rights and buildings should be used as fixed assets.
(ii) Non-patented Technology
Non-patented technology should be averagely amortized based on whichever is shorter among contract period,
profits period and legally regulated period.
36
(iii) Software
Software should be recorded based on the actual payment, and averagely amortized according to an estimated
useful life of 3 to 5 years.
(iv) Regular Review of Useful Life and Amortization Method
The estimated useful life and amortization methods of intangible assets with limited service life should be
reviewed and appropriately adjusted at the end of each year.
(b) Research and Development
Internal research and development project expenditure could be divided into research expenditures and
development expenditures based on their nature and whether the intangible assets created by the R&D activities
have high level of uncertainty.
Expenditures of planned surveys, assessment and selections for the purpose of researching production process are
research expenditures and are recorded in current profits and losses in occurrence; expenditures of relevant
designs and tests in production process before mass production are development expenditures, and can be
capitalized if they meet all of the following conditions:
The development of production process has been fully verified by technology team;
The management has approved the budget of production process development;
Studies and analyses of pre-market researches show that the products produced based on production
process have marketing abilities.
There are sufficient technology and funds support to conduct development of production process and
follow-up large scale production;
Expenditures of production process development could be reliably merged.
Development expenditures failing to meet the above conditions would be recorded into current profits and losses.
Previously recorded development expenditures would not be reaffirmed as assets in subsequent periods.
Capitalized expenditures in development phase should be listed as development expenditures on balance sheet,
and would be transferred to intangible assets since the date of the project achieving its intended use.
(c) Impairment of Intangible Assets
As the recoverable amount of the intangible assets is lower than the book value, its book value should be written
down as the recoverable amount (Note V (17)).
17. Impairment of Long-term Assets
Fixed assets, intangible assets with limited life, investment properties measured at cost, and long-term
37
unamortized expenses, other non-current assets, and long-term equity investment in subsidiaries should go
through impairment test as there are signs of impairment on balance sheet; intangible assets not reaching useful
status should go through impairment tests at least annually whether there is sign of impairment or not. As the
impairment test results show that the recoverable amount of assets is lower than the book value, provision for
impairment based on the difference would be prepared and included in impairment losses. The fair value of assets
deducted by the higher one between the net value after disposal and the present value of the expected future cash
flow is the recoverable amount. Assets impairment preparation should be calculated and confirmed based on
single assets, and the assets group where the assets belong should confirm its recoverable amount in case that the
recoverable amount of single assets is hard to estimate. Assets group is the minimum assets unit to produce cash
flow independently.
Intangible assets with uncertain useful life and development expenditures of capitalization should go through
impairment tests at least annually whether there is sign of impairment or not. The above assets impairment losses
cannot be recovered in subsequent period once confirmed.
18. Long-term Unamortized Expenses
Long-term unamortized expenses include operating rented fixed assets and other expenses which already happen
and should be amortized over a year and undertaken by current and subsequent phases, and they would be
averagely amortized according to benefit period and listed in the net amount of actual expenses deducted by
accumulated amortization.
19. Employee Remuneration
(a) Accounting Treatment of Short-term Remuneration
Short-term remuneration includes salary, bonus, allowance and subsidy, welfare, medical insurance, industrial
injury insurance, maternity insurance, housing funds, labor union and education funding. In the accounting period
of employees providing service, the Company and its subsidiaries recognizes the actual short-term remuneration
as reliabilities and records it in current profits and losses and relevant asset cost.
(b) Accounting Treatment of Post-employment Benefits
The post-employment benefits of the Company and its subsidiaries are divided into defined contribution plan and
defined benefit plan. Defined contribution plan refers to the post-employment welfare plan that the Company and
its subsidiaries does not undertake further liabilities after depositing fixed expenses in an independent fund;
38
Defined benefit plan refers to the post-employment welfare plan excluding defined construction plan. Within the
period of this report, the post-employment welfare plan of the Company and its subsidiaries refer to the basic
old-age pension insurance and unemployment insurance deposit for employees, both of which belong to the
defined contribution plan.
Basic old-age pension insurance
Employees of the Company and its subsidiaries have joined the social basic old-age pension insurance organized
and implemented by local labor and social security departments. The Company and its subsidiaries pay old-age
pension insurance premiums monthly to local social basic old-age pension insurance agencies according to local
social basic old-age pension insurance contribution base and proportion. After employees retire, local labor and
social security departments are responsible for payment of basic old-age pension to employees. In the accounting
period of employees providing service, the Company and its subsidiaries recognize the payable amount regulated
by social security departments as reliabilities and records it in current profits and losses and relevant asset cost.
(c) Accounting Treatment of Termination Benefits
As the Company and its subsidiaries terminate labor contract with employees before the expiration date, or
encourages employees to accept layoff voluntarily by providing certain compensation, liabilities caused by the
compensation to employees for terminating labor contract with them would be confirmed on whichever is earlier
between that the Company and its subsidiaries could not withdraw the labor relationship or layoff suggestions
unilaterally and costs related to paying termination benefits are confirmed, and should be recorded in current
profits and losses.
(d) Accounting Treatment of Other Long-term Employees Benefits
(i) Early retirement welfare
Subsidiaries of the Company provide early retirement welfare for employees accepting early retirement
arrangement. Early retirement welfare refer to salary and social insurance premiums paid to employees who
haven’t reached the retirement age regulated by the country and have stepped down their posts voluntarily after
being approved by the management of the Company and the subsidiary they belong to. The subsidiaries should
pay early retirement welfare to these early retired employees from the first date of early retirement till their
normal retirement age. As for early retirement welfare, subsidiaries should conduct accounting treatment. As the
conditions of early retirement welfare are confirmed, the to-be-paid salary and social insurance premiums for
employees from the date when employees stop providing service till the date when they reach legal retirement
date should be confirmed as reliabilities and recorded into current profits and losses at one time. Difference
39
caused by changes in actuarial assumptions and adjustments of welfare standards for early retirement welfare
should be recorded into current profits and losses.
The estimated termination benefits within a year since the date of balance sheet date should be listed as flowing
liabilities.
20. Estimated liabilities
Current obligations in the form of product quality guarantee and onerous contract should be confirmed as
anticipation liabilities as fulfilling these obligations may lead to flowing out of economic benefits and the amounts
could be measured reliably.
The anticipated liabilities should be initially measured according to the best estimate of fulfilling related current
obligations, and comprehensive considerations should be taken in relevant risks, uncertainty and time value of
money etc. If the time value of money has significant impacts, relevant future cash flow could be discounted to
confirm the best estimate; the increased amount to the book value of anticipated liabilities caused by discount
reduction along with time would be confirmed as interest expenses. On balance sheet date, the book value of
anticipated liabilities should be reviewed and appropriately adjusted to reflect the best current estimates.
The estimated liabilities that need to pay within one year from the balance sheet date are listed as current
liabilities.
21. Share-based Payment
(a) Categories of Share-based Payment
The term "share-based payment" refers to a transaction in which an enterprise grants equity instruments or
undertakes equity-instrument-based liabilities in return for services from employees. The equity instruments
include the equity instruments of the Company itself, the Company as the parent or other accounting entity in the
same group. The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
Equity-settled share-based payments
The equity-settled share-based payment in return for employee services of the Company and its subsidiaries’ stock
option plan and restricted stock incentive plan shall be measured at the fair value of the equity instruments granted
to the employees. As for an equity-settled share-based payment in return for employee services, the right cannot
be exercised until the vesting period comes to an end or until the prescribed performance conditions are met.
40
Within the vesting period, the services obtained in the current period shall, based on the best estimate of the
number of vested equity instruments, be included in the relevant costs or expenses at the fair value of the equities
instruments on the date of the grant, and the capital reserves shall be increased accordingly. If the subsequent
information indicates that the number of vested equity instruments is different from the previous estimate, an
adjustment shall be made and on the vesting date, the estimate shall be adjusted to equal the number of the
actually vested equity instruments. On the vesting date, an enterprise shall, based on the number of the equity
instruments of which the right is actually exercised, calculate and confirm the amount of the capital stock to be
transferred in, and transfer it in the stock capital.
(b) Recognition Method of Fair Value of Equity Instruments
The Company and its subsidiaries confirm the fair value of stock option by adopting options pricing model, and
confirm the fair value of stock appreciation right by adopting options pricing model of Black Scholes.
(c) Recognition Basis of the Best Estimate of the Vested Equity Instruments
On every balance sheet date in the waiting period, the Company and its subsidiaries shall reason out the best
course to estimate according to the newly information of the vested employee variation and revise the amounts of
expected vested equity instruments. On the vesting date, final estimated number of vested equity instruments is
same as the actual number of vested equity instruments.
(d) Relevant Accounting Treatment of Executing, Revising and Terminating the Share-based Payment
Plans
On the vesting date of stock option, the Company and its subsidiaries confirmed the share capital and stock
premium, and carry forward the recognized capital reserves within the vesting period according to the vesting
conditions.
22. Revenue
Revenue amount should be confirmed by the fair value of received and receivable contracts or agreements as the
Company and its subsidiaries sells goods and provides services in daily operation activities. Revenue is shown as
the net amount after deducting sales discount and returns.
As economic benefits related to transactions could flow into the Company and its subsidiaries, and relevant
revenue could be measured reliably and also meet the standards for various operation activities as listed below,
relevant revenue is confirmed:
(a) Sales of Goods
41
The company manufactures and sells washing machines. As the products are delivered, main risks and
remuneration of the ownership of the goods would be transferred to the purchaser, and the Company would not
conduct continuing management and control over the products. The sales revenue is realized as related income or
price credential has been obtained, and relevant cost could be calculated reliably. The Company and its
subsidiaries’ main sales are realized from dealers, large-scale chain home appliance retailers and e-commerce
platforms as well as export. Sales revenue obtained from dealers, large-scale chain home appliance retailers and
non-proprietary e-commerce platforms should be confirmed as products have been delivered to them and accepted
by them. After accepting the products by dealers, large-scale chain home appliance retailers and non-proprietary
e-commerce platforms, they need to undertake the risk of possible damage and price fluctuation of the products,
and also have the right to sell the products by themselves. Sales revenue obtained from proprietary e-commerce
platform should be confirmed as the products have been delivered to and accepted by end users. Sales revenue
obtained from export should be confirmed as the products have been declared to customs, crossed the ship’ s side
at designated loading port and got the bill of landing according to the contract agreement.
The Company sells materials. As the products are delivered, main risks and remuneration of the ownership of the
goods would be transferred to the purchaser, and the Company would not conduct continuing management and
control over the products. The sales revenue is realized as related income or price credential has been obtained,
and relevant cost could be calculated reliably.
(b) Transfer of Assets Use Rights
Interest income would be confirmed by actual interest rate in accordance with the time of other parties using
monetary fund of the company.
Operating lease income would be confirmed within the lease period on straight-line basis.
23. Government Subsidy
A government subsidy means the monetary or non-monetary assets obtained free by the Company and its
subsidiaries from the government, including tax refund and fiscal subsidies, and etc.
No government subsidy may be recognized unless the attached conditions are met and the subsidy can be obtained
by the Company and its subsidiaries. If a government subsidy is a monetary asset, it shall be measured in the light
of the received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its
fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount.
(a) Judgment Basis and Account Treatment Methods of Assets Related Government Subsidy
42
Assets related government subsidy refers to government support acquired by the company to be used in
purchasing and building or forming long-term assets in other ways. Benefits related government subsidy refer to
the government support except for assets relate government subsidy.
Assets related government subsidy would be confirmed as deferred benefits, averagely allocated within the useful
life of relevant assets, and recorded in current profits and losses. Government subsidy measured at nominal
amount would be recorded to current profits and losses directly.
(b) Judgment Basis and Account Treatment Methods of Benefits Related Government Subsidy
Benefits related government subsidy, used to compensate expenses and losses of subsequent periods, would be
confirmed as deferred benefits, and recorded into current profits and losses during the period of establishing
relevant costs; those used to compensate relevant expenses and losses that already happened would be recorded
directly to current profits and losses.
24. Deferred Income Tax Assets/ Deferred Income Tax Liabilities
Deferred income tax assets and deferred income tax liabilities should be confirmed based on the difference
(temporary difference) between tax basis of assets and liabilities and their book values. Corresponding deferred
income tax income assets should be confirmed in accordance with the tax provisions for deductible losses which
could deduct the taxable income in subsequent years. The temporary difference caused by initial confirmation of
goodwill could not confirm the deferred income tax liabilities. Temporary differences formed by initial
confirmation of assets and liabilities generated from non-corporate merging transactions having no influences on
accounting profits or taxable income (deductible losses) could not confirm corresponding deferred income tax
assets and deferred income tax liabilities. In the balance sheet date, deferred income tax assets and deferred
income tax liabilities should be measured based on the appropriate tax rate in the period of expected recovery of
the assets or settlement of the liabilities.
Deferred income tax assets should be confirmed by the possible taxable income used to deduct temporary
difference, deductible losses and tax deduction.
The taxable temporary difference related to investment of subsidiaries could confirm the deferred income tax
liabilities, unless the Company could control the time of reverse of temporary difference or the temporary
difference would not reverse in the foreseeable future. The deductible temporary difference related to investment
of subsidiaries could confirm the deferred income tax assets, as the temporary difference could possibly reverse in
foreseeable future and obtain taxable income which could be used to deduct deductible temporary difference.
43
Deferred income tax assets and deferred income tax liabilities meeting all of the following conditions could be
listed as the net amount after deduction:
Deferred income tax assets and deferred income tax liabilities are related to the income tax collected by
the same tax bureau from the same taxpayer of the company.
The taxpayer of the company owns the legal rights of settle the current income tax assets and income tax
liabilities in net amount.
25. Lease
Financing lease is the lease that virtually transfers all risks and remuneration related to assets ownership other
leases are operating leases.
The rent income of operating lease during the lease period should be confirmed on a straight-line basis.
The rent payment of operating lease during the lease period should be recorded in related asset cost or current
profits and losses on a straight-line basis.
26. Segment Information
The Company and its subsidiaries confirm the operating segment according to internal organizational structure,
management requirement, and internal reporting system, which is the base to confirm reportable segment and
disclose the segment information.
Operating segment refers to the component that the Company and its subsidiaries both can meet following
conditions simultaneously:
(a) The component can give rise to income and expenditure on daily activities.
(b) Management can assess the operating results of this component regularly to decide to allocate resources to it
and value its performance.
(c) Related accounting information, such as financial status, operating results, and cash flow of this component
can be obtained. Two or more operating segments that have similar economic characteristics and can meet
certain conditions can be combined into one operating segment.
27. Other Critical Accounting Policies and Accounting Estimates
Based on historical experience and other factors, including reasonable expectations of future events, the Company
and its subsidiaries conduct continuous evaluation of critical accounting estimates and key judgments adopted.
44
The following critical accounting estimates and key assumptions will lead to important risks of significant
adjustment in the book value of assets and liabilities of next fiscal year:
(a) Provision of Sales Rebates
The Company and its subsidiaries apply sales rebates policy to their clients of sales. The Company and its
subsidiaries conduct regular estimates and withdraw sales rebates in advance in accordance with regulations of
sales agreement, review of specific transactions, market conditions and level of channel inventories historical
experience, and by reference of the completion status of agreed assessment indicators of sales clients. In case of
significant changes of previous estimates, the above difference would have impacts on sales rebates during the
period of estimates changes.
(b) Income Taxes
The Company and its subsidiaries pay corporate income taxes in multiple jurisdictions. In normal operations,
uncertainty exists in the final tax treatment of some transactions and events. Significant judgments are required
from the Company and its subsidiaries in the provision of income taxes in each jurisdiction. If the final identified
outcome of these tax matters differs from the initially recorded amount, the difference would have impacts on the
income taxes and deferred income taxed during the period of making the above mentioned identification.
28. Changes in Critical Accounting Policies and Accounting Estimates
(1) Changes in Critical Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Critical Accounting Estimates
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
Taxable added value (tax amount payable should be measured according to
VAT the balance after the taxable sales multiply the applicable tax rate then deduct 16% or 10% or 5%
the input tax which allowed to be deduct at the Reporting Period)
Urban maintenance and
Paid VAT 7% or 5%
construction tax
Enterprise income tax Payable income tax amount 15% or 17% or 25%
45
2. Tax Preference
Based on the relevant regulations of the No. 28 articles of the Enterprise Income Law of the People’s Republic of
China, the payment of the corporate income tax of the Company, Wuxi Little Swan GE Co., Ltd. and Wuxi Filin
Electronics Co. Ltd. should be measured according to the 15% of the tax rate.
In July 2015, the Company got the High Technology Enterprises Certificate (certificate No.: GR201532000606)
issued by Jiangsu Science and Technology Development, Department of Finance of Jiangsu Province, Jiangsu
Provincial Office, SAT and Jiangsu Local Taxation Bureau after the re-examination with the period of validity
from 2015 to 2018 lasting for 3 years.
In July 2015, the subsidiary Wuxi Little Swan GE Co., Ltd. got the High Technology Enterprises Certificate
(certificate No.: GR201532000557) issued by Jiangsu Science and Technology Development, Department of
Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after the
re-examination with the period of validity from 2015 to 2018 lasting for 3 years.
In July 2015, the subsidiary Wuxi Filin Electronics Co., Ltd. got the High Technology Enterprises Certificate
(certificate No.: GR201532000917) issued by Jiangsu Science and Technology Development, Department of
Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau after the
re-examination with the period of validity from 2015 to 2018 lasting for 3 years.
The applicable Singapore corporate income tax rate of the subsidiary Little Swan International (Singapore) Co.,
Ltd is 17%.
VII. Notes on Major items in Consolidated Financial Statements of the Company
1. Monetary Funds
Unit: RMB
Item Ending balance Beginning balance
Bank deposits 1,495,906,357.47 1,417,489,071.71
Other monetary funds 208,324,506.77 170,775,444.34
Total 1,704,230,864.24 1,588,264,516.05
Of which: total amount of the accounts deposited abroad 495,192.03 503,115.69
On 30 June 2018, other monetary funds included RMB195,786,014.31 of deposit for bank acceptance bills,
RMB1,862,014.85 of deposit for forward foreign exchange contracts and RMB10,676477.61 of deposit for letters
of credit. (On 31 December 2017, other monetary funds included RMB166,791,807.67 of deposit for bank
46
acceptance bills and RMB3,983,636.67 of deposit for letters of credit.)
2. Financial Assets Measured by Fair Value with its Changes Recorded into Current Profit or Loss.
Unit: RMB
Item Ending balance Beginning balance
Derivative financial assets 5,270,238.03
Total 5,270,238.03
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 1,176,200,901.21 1,283,192,684.28
Total 1,176,200,901.21 1,283,192,684.28
(2) Notes Receivable which Had Endorsed by the Company or Had Discounted and not Due on the Balance
Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 1,176,200,901.21
Total 1,176,200,901.21
4. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB’0,000
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra
Carrying Carrying
Proporti wal Proporti Withdrawal
Amount Amount value Amount Amount value
on proporti on proportion
on
Accounts
208,207.41 100.00% 10,410.37 5.00% 197,797.04 182,813.10 100.00% 9,140.66 5.00% 173,672.45
receivable
47
withdrawn bad
debt provision
according to
credit risks
characteristics
Total 208,207.41 100.00% 10,410.37 5.00% 197,797.04 182,813.10 100.00% 9,140.66 5.00% 173,672.45
Accounts receivable with significant single amount for which bad debt provision separately accrued at the
period-end
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
Unit: RMB
Ending balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 2,082,074,077.64 104,103,703.90 5.00%
Total 2,082,074,077.64 104,103,703.90 5.00%
Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
(2) Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the reporting period was of RMB12,697,151.58；the
amount of the reversed or collected part during the reporting period was of RMB 0.00.
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Balance of the bad debt Proportion to the total balance of
Item Balance
provision the accounts receivable
Total amount of balance of the top 5
1,341,328,505.12 67,066,425.26 64.42%
accounts receivable
5. Prepayment
(1) List by Aging Analysis
Unit: RMB
48
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 147,898,021.12 97.08% 79,671,655.89 94.46%
1 to 2 years 2,586,749.99 1.70% 4,675,136.49 5.54%
2 to 3 years 1,851,733.00 1.22%
Total 152,336,504.11 -- 84,346,792.38 --
The reason why the prepayments with significant amount and aging over one year had not settled in time:
As of 30 June 2018, the prepayments aging over one year were RMB4,438,482.99, which were mainly the
unsettled prepayments not reaching conditions stipulated in contracts.
(2) Top 5 Prepayments in Ending Balance Collected according to the Prepayment Target
Unit: RMB
Item Balance Proportion to the total amount of the prepayments
Total amount of the top 5 of the balance
51,322,929.69 33.69%
of the prepayments
6. Interest Receivable
(1) Category of Interest Receivable
Unit: RMB
Item Ending balance Beginning balance
Structured deposits 179,050,047.95 60,096,246.58
Bank deposits 638,559.74 847,661.40
Total 179,688,607.69 60,943,907.98
7. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB’0,000
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Carrying Withdrawa Carrying
Proportio Withdrawal Proporti
Amount Amount value Amount Amount l value
n proportion on
proportion
Other accounts 3,745.66 100.00% 271.53 7.25% 3,474.13 5,057.52 100.00% 335.07 6.63% 4,722.45
49
receivable withdrawn
bad debt provision
according to credit
risks characteristics
Total 3,745.66 100.00% 271.53 7.25% 3,474.13 5,057.52 100.00% 335.07 6.63% 4,722.45
Other accounts receivable at the period-end that is individually significant and provisions for bad debts
individually.
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
Unit: RMB
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 34,926,315.62 1,746,315.79 5.00%
1 to 2 years 985,908.00 98,590.80 10.00%
2 to 3 years 621,400.00 186,420.00 30.00%
Over 3 years 922,930.77 683,971.90 74.11%
Total 37,456,554.39 2,715,298.50 7.20%
Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2) Other Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00；the amount of the
reversed or collected part during the Reporting Period was of RMB635,414.59.
(3) Other Accounts Receivable Classified by the Nature of Accounts
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Funds in third parties’ accounts 29,328,243.46 44,740,888.28
Borrowings by employees 4,376,288.38 2,875,802.98
50
Margin &cash pledge 3,267,721.48 2,515,443.83
Other 484,301.07 443,032.08
Total 37,456,554.39 50,575,167.17
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to total Ending
Ending ending balance of balance of
Name of units Nature Aging
balance other accounts bad debt
receivable provision
Alipay (China) Network Technology Deposits in the third-party Within one
19,920,884.60 53.18% 996,044.23
Co., Ltd. payment platform year
Shenzhen Midea Payment Technology Deposits in the third-party Within one
6,706,867.80 17.91% 335,343.39
Co., Ltd. payment platform year
Deposits in the third-party Within one
Chinabank Payments 1,668,076.64 4.45% 83,403.83
payment platform year
Nanjing Suning Yifubao Network Deposits in the third-party Within one
1,032,414.42 2.76% 51,620.72
Technology Co., Ltd. payment platform year
Wuxi China Resources Gas Co., Ltd. Margin &cash pledge 820,800.00 1 to 2 years 2.19% 82,080.00
Total -- 30,149,043.46 -- 80.49% 1,548,492.17
8. Inventory
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Falling price Falling price
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Raw materials 24,203,708.86 570,442.41 23,633,266.45 35,127,847.81 570,442.41 34,557,405.40
Goods in process 15,014,293.01 15,014,293.01 14,237,995.55 14,237,995.55
Inventory goods 577,520,400.93 29,763,993.30 547,756,407.63 1,995,530,607.75 63,559,812.56 1,931,970,795.19
Total 616,738,402.80 30,334,435.71 586,403,967.09 2,044,896,451.11 64,130,254.97 1,980,766,196.14
(2) Falling Price Reserves of Inventory
Unit: RMB
Item Beginning balance Increased amount Decreased amount Ending balance
51
Withdrawal Other Reverse or write-off Other
Raw materials 570,442.41 570,442.41
Inventory goods 63,559,812.56 11,877,851.17 45,673,670.43 29,763,993.30
Total 64,130,254.97 11,877,851.17 45,673,670.43 30,334,435.71
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
Financial products 1,093,193,150.68 3,792,871,097.59
Structured deposits 10,700,000,000.00 8,650,000,000.00
Input tax to be deducted and certified 88,353,636.04 283,158,673.31
Other 45,415,612.78 52,210,974.32
Total 11,926,962,399.50 12,778,240,745.22
10. Available-for-sale Financial Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserves amount reserves
Available-for-sale equity
300,300.00 100,300.00 200,000.00 300,300.00 100,300.00 200,000.00
instruments:
Measured at cost 300,300.00 100,300.00 200,000.00 300,300.00 100,300.00 200,000.00
Total 300,300.00 100,300.00 200,000.00 300,300.00 100,300.00 200,000.00
11. Investment Property
(1) Investment Property Adopted the Cost Measurement Mode
Unit: RMB
Construction in
Item Houses and buildings Land use right Total
progress
I. Original carrying value
1. Beginning balance 88,189,256.96 22,949,959.07 111,139,216.03
2. Increased amount of the period
(1) Outsourcing
(2) Transfer from inventory\fixed
52
assets\construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Ending balance 88,189,256.96 22,949,959.07 111,139,216.03
II. Accumulative depreciation and accumulative
amortization
1. Beginning balance 29,852,095.86 7,015,229.88 36,867,325.74
2. Increased amount of the period 1,650,141.54 275,912.46 1,926,054.00
(1) Withdrawal or amortization 1,650,141.54 275,912.46 1,926,054.00
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Ending balance 31,502,237.40 7,291,142.34 38,793,379.74
III. Depreciation reserves
1. Beginning balance 12,576,065.29 12,576,065.29
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other
4. Ending balance 12,576,065.29 12,576,065.29
IV. Carrying value
1. Ending book value 44,110,954.27 15,658,816.73 59,769,771.00
2. Beginning book value 45,761,095.81 15,934,729.19 61,695,825.00
12. Fixed Assets
Unit: RMB
Houses and Machinery Transportation Office & Electronic
Item Total
buildings equipment equipment equipment
I. Original carrying value
1. Beginning balance 735,906,249.69 1,053,086,342.85 28,536,914.16 139,927,818.59 1,957,457,325.29
2. Increased amount of the period 52,764,489.72 3,538,087.27 54,112,985.37 110,415,562.36
(1) Purchase 37,437,395.70 3,538,087.27 54,112,985.37 95,088,468.34
53
(2) Transfer from construction
15,327,094.02 15,327,094.02
in progress
(3) Enterprise combination
increase
3. Decreased amount of the
18,196,176.73 337,264.94 2,445,391.05 20,978,832.72
period
(1) Disposal or Scrap 18,196,176.73 337,264.94 2,445,391.05 20,978,832.72
4. Ending balance 735,906,249.69 1,087,654,655.84 31,737,736.49 191,595,412.91 2,046,894,054.93
II. Accumulative depreciation
1. Beginning balance 227,391,811.31 556,756,002.40 23,111,726.15 99,321,819.31 906,581,359.17
2. Increased amount of the period 15,624,330.54 45,341,385.52 608,730.53 11,795,470.17 73,369,916.76
(1) Withdrawal 15,624,330.54 45,341,385.52 608,730.53 11,795,470.17 73,369,916.76
3. Decreased amount of the
12,804,858.29 302,089.08 1,170,190.22 14,277,137.59
period
(1) Disposal or Scrap 12,804,858.29 302,089.08 1,170,190.22 14,277,137.59
4. Ending balance 243,016,141.85 589,292,529.63 23,418,367.60 109,947,099.26 965,674,138.34
III. Depreciation reserves
1. Beginning balance 3,918,452.47 17,168,643.32 30,622.40 89,892.09 21,207,610.28
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the
4,318,221.04 19,389.79 26,099.07 4,363,709.90
period
(1) Disposal or Scrap 4,318,221.04 19,389.79 26,099.07 4,363,709.90
4. Ending balance 3,918,452.47 12,850,422.28 11,232.61 63,793.02 16,843,900.38
IV. Carrying value
1. Ending carrying value 488,971,655.37 485,511,703.94 8,308,136.28 81,584,520.63 1,064,376,016.22
2. Beginning carrying value 504,595,985.91 479,161,697.13 5,394,565.61 40,516,107.19 1,029,668,355.84
13. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserves amount reserves
Automatic stamping riveting 39,078,412.10 39,078,412.10 37,167,679.63 37,167,679.63
54
line of roller cabinet
Other 650,518.92 650,518.92 804,572.97 804,572.97
Total 39,728,931.02 39,728,931.02 37,972,252.60 37,972,252.60
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB’0,000
Proportion Of which: Capitaliz
Other of Accumulat amount of ation
Transfer Capit
Beginnin decrea accumulated ed amount capitalized rate of
Increased red in Ending Job al
Item Budget g sed investment of interest interests interests
amount fixed balance schedule resou
balance amoun in capitalizati for the for the
assets rces
t construction on Reporting Reportin
s to budget Period g Period
Automat
ic
stamping
riveting 5,902.00 3,716.77 191.07 3,907.84 98.00% 98.00% Other
line of
roller
cabinet
Other 2,436.30 80.46 1,517.30 1,532.71 65.05 65.58% 65.58% Other
Total 8,338.29 3,797.23 1,708.38 1,532.71 0 3,972.89 -- -- --
14. Intangible Assets
Unit: RMB
Item Land use right Patent right Non-patents Others Total
I. Original carrying value
1. Beginning balance 242,666,890.39 1,395,014.56 244,061,904.95
2. Increased amount of the period 7,947.17 7,947.17
(1) Purchase 7,947.17 7,947.17
(2) Internal R&D
(3) Business combination increase
3. Decreased amount of the period
(1) Disposal
4. Ending balance 242,674,837.56 1,395,014.56 244,069,852.12
II. Accumulated amortization
1. Beginning balance 55,621,543.12 1,395,014.56 57,016,557.68
55
2. Increased amount of the period 2,619,114.45 2,619,114.45
(1) Withdrawal 2,619,114.45 2,619,114.45
3. Decreased amount of the period
(1) Disposal
4. Ending balance 58,240,657.57 1,395,014.56 59,635,672.13
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying value 184,434,179.99 184,434,179.99
2. Beginning carrying value 187,045,347.27 187,045,347.27
15. Long-term Prepaid Expense
Unit: RMB
Amortization Other decreased
Item Beginning balance Increased amount Ending balance
amount of the period amount
Fixed assets
21,318,606.65 8,819,217.24 4,685,773.66 25,452,050.23
improvement
Other 1,063,413.87 126,572.19 250,461.20 939,524.86
Total 22,382,020.52 8,945,789.43 4,936,234.86 26,391,575.09
16. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
difference assets difference tax assets
Provision for impairment of assets 145,786,037.32 21,824,399.10 171,883,829.48 25,782,574.43
Internal unrealized profit 29,913,702.45 4,487,055.37 107,345,624.86 16,101,843.73
Remuneration and dismissal expense 11,520,236.25 1,728,035.44 13,089,160.95 1,963,374.14
56
Other current liabilities 2,476,196,552.18 355,800,208.12 2,107,686,604.61 370,746,106.98
Provisions 2,157,992.76 323,698.90 2,253,082.26 337,962.34
Deferred income 2,262,533.19 339,379.98 2,489,133.21 373,369.98
Investment differences 8,782,955.88 1,317,443.38 8,782,955.88 1,317,443.38
Changes in fair value-trading financial
4,800,613.47 720,092.02
assets
Total 2,681,420,623.50 386,540,312.31 2,413,530,391.25 416,622,674.98
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible
Item Deductible temporary Deferred income tax Deferred income
temporary
difference liabilities tax liabilities
difference
Changes in fair value of available-for-sale
43,193,150.68 6,478,972.60 57,871,097.59 8,680,664.64
financial assets
Changes in fair value of financial assets at
5,270,238.03 790,535.70
fair value through profit or loss
Total 43,193,150.68 6,478,972.60 63,141,335.62 9,471,200.34
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
Mutual set-off amount of Ending balance of Mutual set-off amount of Beginning balance of
deferred income tax deferred income tax deferred income tax deferred income tax
Item
assets and liabilities at assets or liabilities after assets and liabilities at assets or liabilities after
the period-end off-set the period-begin off-set
Deferred income tax
6,478,972.60 380,061,339.65 9,471,200.34 407,151,474.64
assets
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary difference 27,199,560.02 27,153,908.99
Deductible losses 81,634,128.03 81,636,690.06
Total 108,833,688.05 108,790,599.05
57
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending amount Beginning amount Notes
Y2018 16,300,604.68 57,917.22
Y2019 49,620,940.42 16,303,166.71
Y2020 9,576,983.63 49,620,940.42
Y2021 5,618,761.45 9,576,983.63
Y2022 516,837.85 5,618,761.45
Total 81,634,128.03 81,177,769.43 --
17. Other Non-current Assets
Unit: RMB
Item Ending balance Beginning balance
Prepayment for equipment 56,029,381.55 27,331,937.53
Total 56,029,381.55 27,331,937.53
18. Provision for Impairment of Assets
Unit: RMB
Decrease
Item 31 December 2017 Increase 30 June 2018
Reverse Write-off
Bad debt provision 94,757,265.40 12,061,736.99 - - 106,819,002.39
Of which: bad debt provision for
91,406,552.32 12,697,151.58 104,103,703.90
accounts receivable
Bad debt provision for other
3,350,713.08 -635,414.59 2,715,298.49
accounts receivable
Inventory falling price reserves 64,130,254.97 11,877,851.17 45,673,670.43 30,334,435.71
Provision for impairment of
100,300.00 100,300.00
available-for-sale financial assets
Provision for impairment of
12,576,065.29 12,576,065.29
investment property
Provision for impairment of fixed
21,207,610.28 4,363,709.90 16,843,900.38
assets
Total 192,771,495.94 23,939,588.16 - 50,037,380.33 166,673,703.77
58
19. Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Discount financing of notes receivable 81,393,672.34
Total 81,393,672.34
20. Financial Liabilities at Fair Value through Profit or Loss
Unit: RMB
Item Ending balance Beginning balance
Trading financial liabilities 4,800,613.47
Derivative financial liabilities 4,800,613.47
Total 4,800,613.47
21. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 3,915,720,273.53 2,805,804,600.41
Total 3,915,720,273.53 2,805,804,600.41
22. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Material 2,778,165,944.92 3,803,318,504.56
Other 31,443,793.65 23,707,195.54
Total 2,809,609,738.57 3,827,025,700.10
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Material 54,501,046.83 Unsettled due to the agreement of contract
Total 54,501,046.83 --
59
23. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Advances from customers 828,133,123.71 3,065,815,801.93
Total 828,133,123.71 3,065,815,801.93
(2) Significant Advances from Customers Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Advance from goods 42,618,060.31 Unsettled advance from goods
Total 42,618,060.31 --
24. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 320,914,272.91 619,671,080.97 697,918,140.10 242,667,213.78
II. Post-employment benefit-defined
25,775,609.10 66,505,577.92 80,486,126.29 11,795,060.73
contribution plans
III. Termination benefits 2,793,962.75 4,209,565.73 4,338,468.11 2,665,060.37
Total 349,483,844.76 690,386,224.62 782,742,734.50 257,127,334.88
(2) List of Short-term salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus, allowance, subsidy 282,471,135.34 508,925,266.35 583,695,741.92 207,700,659.77
2. Employee welfare 8,331,772.70 40,159,306.08 36,854,249.27 11,636,829.51
3. Social insurance 12,297,766.43 34,607,681.11 41,028,639.38 5,876,808.16
Of which: Medical insurance
9,960,643.80 27,659,647.95 32,851,023.62 4,769,268.13
premiums
Work-related injury insurance 1,540,246.23 4,553,613.97 5,363,858.42 730,001.78
Maternity insurance 796,876.40 2,394,419.19 2,813,757.34 377,538.25
60
4. Housing fund 8,897,498.05 25,356,868.92 25,532,130.72 8,722,236.25
5. Labor union budget and employee
8,916,100.39 10,621,958.51 10,807,378.81 8,730,680.09
education budget
Total 320,914,272.91 619,671,080.97 697,918,140.10 242,667,213.78
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 24,835,787.74 64,937,837.37 78,368,996.77 11,404,628.34
2. Unemployment insurance 939,821.36 1,567,740.55 2,117,129.52 390,432.39
Total 25,775,609.10 66,505,577.92 80,486,126.29 11,795,060.73
25. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
Corporate income tax 367,523,892.84 538,655,891.42
Urban maintenance and construction tax 4,962,554.32 10,431,895.61
VAT 14,469,621.44 43,514,198.41
House appliance recycling funds 25,064,569.00 24,202,458.00
Education Surcharge 3,425,481.66 7,895,593.79
Other 11,146,512.24 13,317,486.08
Total 426,592,631.50 638,017,523.31
26. Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 9,049,503.92 6,996,784.06
Total 9,049,503.92 6,996,784.06
27. Other Accounts Payable
(1) Other Accounts Payable Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Payment for equipment 86,017,107.85 119,000,776.50
61
Payment for mold 59,934,550.67 66,898,435.10
Margin & cash pledged 11,821,035.99 3,027,766.49
Payment made on behalf 8,979,515.65 3,831,550.67
Third party payment 8,690,052.55 5,278,489.39
Energy-saving subsidy 6,140,000.00
Other 9,615,168.20 16,943,845.33
Total 185,057,430.91 221,120,863.48
(2) Significant Other Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/Un-carry-over reason
Payment for mold 32,314,272.98 unsettled due to the agreement of contract
Payment for equipment 17,822,442.22 unsettled due to the agreement of contract
Total 50,136,715.20 --
28. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Accrued expenses-sale rebate 1,134,694,687.20 1,190,189,575.45
Accrued expenses-sales promotional expense 535,362,600.86 276,458,030.09
Accrued expenses-shipping and handling charges 224,935,439.82 169,965,392.33
Accrued expenses-maintenance and installation charges 392,472,038.07 312,536,901.29
Accrued expenses-brand royalty 7,921,114.16
Accrued expenses-waste household appliance
15,637,977.00
maintenance funds
Accrued expenses-other 180,813,792.08 142,912,728.45
Total 2,476,199,672.19 2,107,700,604.61
29. Long-term Payroll Payable
Unit: RMB
Item Ending balance Beginning balance
Termination benefits 10,291,652.87 12,021,620.17
Total 10,291,652.87 12,021,620.17
62
30. Provisions
Unit: RMB
Item Ending balance Beginning balance Formed reason
Product quality assurance 2,157,992.76 2,253,082.25
Total 2,157,992.76 2,253,082.25 --
31. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning balance New shares Bonus issue Ending balance
Bonus shares Other Subtotal
issued from profit
The sum of
632,487,764.00 632,487,764.00
shares
32. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium (premium on stock) 1,055,182,718.57 1,055,182,718.57
Other capital reserves 197,764,828.23 43,846,522.21 241,611,350.44
Of which: equity incentive 163,325,332.37 43,846,522.21 207,171,854.58
Other 34,439,495.86
Total 1,252,947,546.80 43,846,522.21 1,296,794,069.01
33. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: recorded
in other
comprehensive Attributable
Attributable to
Beginning Income before income in prior to
Item Less: Income owners of the Ending balance
balance taxation in the period and non-controll
tax expense Company as the
Current Period transferred in ing interests
parent after tax
profit or loss in after tax
the Current
Period
I. Other 40,496,366.85 43,195,466.96 57,871,097.59 -2,201,692.03 -11,952,098.73 -521,839.87 28,544,268.12
63
comprehensive
income that may
subsequently be
reclassified to profit
or loss
Gain/Loss on
changes in fair value
42,711,851.32 43,193,150.68 57,871,097.59 -2,201,692.03 -11,954,415.00 -521,839.87 28,544,268.12
of available-for-sale
financial assets
Differences
arising from
translation of
foreign -2,215,484.47 2,316.27 2,316.27 -2,213,168.20
currency-denominat
ed financial
statements
Total of other
comprehensive 40,496,366.85 43,195,466.96 57,871,097.59 -2,201,692.03 -11,952,098.73 -521,839.87 28,544,268.12
income
34. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
332,594,722.29 332,594,722.29
reserves
Total 332,594,722.29 332,594,722.29
35. Retained Profits
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained profits before adjustments 4,788,564,401.03 3,756,517,718.81
Beginning balance of retained profits after adjustments 4,788,564,401.03 3,756,517,718.81
Add: Net profit attributable to owners of the Company as the parent 902,047,046.42 731,540,502.47
Less: dividend of ordinary shares payable 632,487,764.00 474,365,822.97
Ending retained profits 5,058,123,683.45 4,013,692,398.30
64
36. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same Period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 11,213,772,811.33 8,049,680,720.75 9,694,560,835.56 7,052,479,498.41
Other operations 843,165,474.72 800,121,112.27 873,500,018.65 808,892,313.37
Total 12,056,938,286.05 8,849,801,833.02 10,568,060,854.21 7,861,371,811.78
37. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same Period of last year
Urban maintenance and construction tax 30,884,900.17 29,091,665.44
Education Surcharge 24,140,924.03 22,058,158.72
Other 11,791,878.91 13,382,449.58
Total 66,817,703.11 64,532,273.74
38. Selling Expense
Unit: RMB
Item Reporting Period Same Period of last year
Selling expense 1,769,706,658.94 1,533,889,871.40
Total 1,769,706,658.94 1,533,889,871.40
39. Administrative Expense
Unit: RMB
Item Reporting Period Same Period of last year
Administrative expense 451,163,055.68 328,163,105.40
Total 451,163,055.68 328,163,105.40
40. Finance Costs
Unit: RMB
Item Reporting Period Same Period of last year
Interest expense 31,353,226.28 5,897,953.01
Interest income -246,342,976.78 -63,840,314.80
65
Foreign exchange gains or losses -18,665,871.63 30,775,819.93
Other 2,303,503.16 3,643,344.03
Total -231,352,118.98 -23,523,197.84
41. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same Period of last year
I. Bad debt loss 12,061,736.99 7,560,737.61
II. Inventory falling price loss 11,877,851.17 26,185,813.40
III. Fixed assets impairment losses 3,808,897.38
Total 23,939,588.16 37,555,448.39
42. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss 4,917,873.13
Financial liabilities at fair value through profit or loss -10,070,851.50
Total -10,070,851.50 4,917,873.13
43. Investment Income
Unit: RMB
Item Reporting Period Same Period of last year
Investment income from disposal of financial assets at fair
8,050,775.00 2,654,220.00
value through profit or loss
Investment income from available-for-sale financial assets 68,851,966.54 179,011,662.11
Total 76,902,741.54 181,665,882.11
44. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same Period of last year
Fixed assets disposal income 634,455.90
45. Other Income
Unit: RMB
66
Sources Reporting Period Same Period of last year
Specialized return 18,631,803.79 15,806,553.77
Other subsidies 9,339,848.21
Total 28,308,152.00 15,806,553.77
46. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same Period of last year
Current income tax expense 196,118,948.51 191,867,580.15
Deferred income tax expense 29,291,826.97 -43,621,884.37
Total 225,410,775.48 148,245,695.78
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 1,228,875,285.09
Current income tax expense accounted at statutory/applicable tax rate 215,323,762.35
Influence of income tax before adjustment 2,283,020.72
Influence of not deductable costs, expenses and losses 7,275,617.33
Influence of deductable loss of unrecognized deferred income tax assets in prior period 528,375.08
Income tax expense 225,410,775.48
47. Other Comprehensive Income
Refer to Note 33 for details.
48. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Interest income 19,741,871.26 18,617,988.30
Specialized subsidies 10,686,348.21 8,072,556.77
Claim & fine income 1,872,681.61 1,264,590.80
67
Other 33,392,058.21 18,536,975.82
Total 65,692,959.29 46,492,111.69
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Cash for payments 261,375,812.90 1,343,311,634.84
Other 9,839,878.51 1,138,477.96
Total 271,215,691.41 1,344,450,112.80
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same Period of last year
Interest income from structured deposits 111,282,573.06 16,802,196.35
Total 111,282,573.06 16,802,196.35
49. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash flows generated from operating
-- --
activities
Net profit 1,003,464,509.61 832,760,250.01
Add: Provision for impairment of assets 23,939,588.16 37,555,448.39
Depreciation of fixed assets, oil-gas assets, and productive living assets 75,295,970.76 64,952,458.10
Amortization of intangible assets 2,619,114.45 2,619,069.42
Amortization of long-term prepaid expenses 4,936,234.86 1,681,848.52
Losses on disposal of fixed assets, intangible assets and other long-lived
-634,455.90 -2,324,085.53
assets (gains: negative)
Losses from variation of fair value (gains: negative) 10,070,851.50 -4,917,873.13
Finance costs (gains: negative) -227,392,382.23 -10,904,243.34
Investment loss (gains: negative) -76,902,741.54 -181,665,882.11
Decrease in deferred income tax assets (gains: negative) 30,082,362.69 -44,359,565.36
Increase in deferred income tax liabilities -790,535.70 737,680.97
68
(“-” means decrease)
Decrease in inventory (gains: negative) 1,428,158,048.36 614,201,149.52
Decrease in accounts receivable generated from operating activities
-229,740,644.12 -728,452,220.93
(gains: negative)
Increase in accounts payable used in operating activities (decrease:
-1,915,599,644.90 -748,672,061.46
negative)
Others 45,722,746.41 24,377,334.69
Net cash generated from/used in operating activities 173,229,022.41 -142,410,692.24
2. Significant investing and financing activities without involvement of
-- --
cash receipts and payments
3. Net increase/decrease of cash and cash equivalent: -- --
Ending balance of cash 1,495,906,357.47 3,096,982,558.92
Less: beginning balance of cash 1,417,489,071.71 4,171,689,917.21
Net increase in cash and cash equivalents 78,417,285.76 -1,074,707,358.29
(2) Cash and Cash Equivalent
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1,495,906,357.47 1,417,489,071.71
Of which: bank deposits on demand 1,495,906,357.47 1,417,489,071.71
II. Ending balance of cash and cash equivalents 1,495,906,357.47 1,417,489,071.71
50. Foreign Currency Monetary Items
Unit: RMB
Item Ending foreign currency balance Exchange rate Ending balance converted to RMB
Monetary capital
Including: USD 8,666,576.26 6.6166 57,343,268.48
EUR 1,151,914.59 7.6515 8,813,874.49
Accounts receivable
Including: USD 164,135,696.04 6.6166 1,086,020,246.42
EUR 9,094,964.00 7.6515 69,590,117.05
JPY 378,500.00 0.05991 22,677.45
Accounts payable
Including: USD 386,975.97 6.6166 2,560,465.20
EUR 61,072.31 7.6515 467,294.78
69
JPY 5,236,912.00 0.05991 313,764.35
VIII. Changes of Consolidation Scope
No such case in Reporting Period.
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main operating Registration Nature of Holding percentage (%)
Name Way of gaining
place place business Directly Indirectly
Wuxi Little Swan General Electric
Wuxi Wuxi Production 100.00% Setting-up
Appliances Co. , Ltd.
Wuxi Filin Electronics Co. , Ltd. Wuxi Wuxi Production 73.00% Setting-up
Jiangsu Little Swan Marketing and
Wuxi Wuxi Trading 99.54% 0.09% Setting-up
Sales Co. , Ltd.
Wuxi Little Swan Import & Export Import &
Wuxi Wuxi 88.46% Setting-up
Co. , Ltd. Export
Little Swan International
Singapore Singapore Investment 100.00% Setting-up
(Singapore) Co., Ltd.
Little Swan (Jingzhou) Electronic Business combination
Jingzhou Jingzhou Production 100.00%
Appliances Co., Ltd. under same control
Hefei Midea Washing Machine Co., Business combination
Hefei Hefei Production 69.47%
Ltd. under same control
(2) Significant Not Wholly-owned Subsidiary
Unit: RMB
Shareholding proportion The profit or loss Declaring dividends
Ending balance of
Name of non-controlling attributable to distributed to
non-controlling interests
interests non-controlling interests non-controlling interests
Wuxi Filin Electronics
27.00% 31,561,769.44 304,090,289.33
Co. , Ltd.
Hefei Midea Washing
30.53% 69,855,693.75 969,888,770.32
Machine Co., Ltd.
70
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB’0,000
Ending balance Beginning balance
Name
Current Non-current Current Non-current Total Current Non-current Current Non-current Total
Total assets Total assets
assets assets liabilities liability liabilities assets assets liabilities liability liabilities
Wuxi Filin Electronics
160,369.02 6,783.01 167,152.03 54,515.58 10.42 54,526.00 159,685.46 6,493.23 166,178.69 65,449.77 15.58 65,465.35
Co. , Ltd.
Hefei Midea Washing
661,267.77 73,451.72 734,719.49 415,538.14 1,497.51 417,035.65 785,372.27 67,388.46 852,760.73 556,889.47 1,314.69 558,204.16
Machine Co., Ltd.
Unit: RMB’0,000
Reporting Period Same period of last year
Name
Total comprehensive Cash flows from Total comprehensive Cash flows from
Operating revenue Net profit Operating revenue Net profit
income operating activities income operating activities
Wuxi Filin Electronics
49,822.87 11,689.54 11,689.54 -1,525.98 45,315.85 11,171.12 11,171.12 -7,281.50
Co. , Ltd.
Hefei Midea Washing
537,543.71 22,881.00 22,710.07 -72,991.19 446,674.46 23,274.72 21,638.55 -35,564.58
Machine Co., Ltd.
71
X. Segment Information
Since the Company’s operating revenue, cost of sales, assets and liabilities are mainly related to the manufacturing
and sales of washing machines and relevant products, after considering some factors such as the internal
organizational structure, management requirements and internal report systems, the management holds the opinion
that various companies’ business has obvious similarity within the scope of consolidation. Thus, the segment
report is not prepared.
The total income of the Company and its subsidiaries from external transactions in domestic and other countries
or regions, the total non-current assets excluding financial assets and deferred income tax assets in domestic and
other countries or regions are listed as follows:
(1) Income from External Transactions
Unit: RMB
Region Reporting Period Same period of last year
China 9,593,374,628.71 8,375,128,927.45
Other countries 2,463,563,657.34 2,192,931,926.76
Total 12,056,938,286.05 10,568,060,854.21
(2) Total Non-current Assets
Unit: RMB
Region 30 June 2018 30 June 2017
China 1,430,729,854.87 1,366,095,738.76
Other countries
Total 1,430,729,854.87 1,366,095,738.76
XI. The Risk Related to Financial Instruments
The financial risks the Company faced during operation are: credit risk, market risk (mainly exchange risk and
interest rate risk) and liquidity risk. The overall risk management plan of the Company and its subsidiaries,
considering the unpredictability of financial market, aims to reduce the potential negative influence to the
financial results of the Company and its subsidiaries.
72
(1) Market Risk
(a) Foreign Exchange Risk
The main operation of the Company and its subsidiaries was within the state, which settled by RMB. The foreign
assets, liabilities and foreign trade in future (the foreign assets, liabilities and foreign trade in future mainly settled
by USD) the Company and its subsidiaries had recognized existed foreign exchange risk. The financial
department of the Company’s headquarter supervised the scope of foreign assets, liabilities and foreign trade in
future of the Company and its subsidiaries to maximally reduce foreign exchange risk , thus the Company and its
subsidiaries might avoid foreign exchange rate in a way of signing forward foreign exchange contracts or currency
exchange contracts.
On 30 June 2018 and 31 December 2017, the list of foreign financial assets and foreign financial liabilities
converted into RMB held by the Company and its subsidiaries taking RMB as the recording currency was
presented as follows:
Unit: RMB
Ending balance
Item
USD Other foreign curency Total
Foreign financial assets
Monetary capital 57,343,268.48 8,813,874.49 66,157,142.97
Accounts receivable 1,086,020,246.42 69,612,794.50 1,155,633,040.92
Total 1,143,363,514.90 78,426,668.98 1,221,790,183.88
Foreign financial liabilities
Accounts payable 2,560,465.20 781,059.13 3,341,524.33
Total 2,560,465.20 781,059.13 3,341,524.33
Beginning balance
Item
USD Other foreign curency Total
Foreign financial assets
Monetary capital 191,071,173.12 14,916,914.11 205,988,087.23
Accounts receivable 531,578,236.13 76,367,051.71 607,945,287.84
Total 722,649,409.25 91,283,965.82 813,933,375.07
Foreign financial liabilities 0.00
Accounts payable 36,668,878.79 6,033,971.28 42,702,850.07
Other accounts payable 37,060,925.00 37,060,925.00
73
Total 36,668,878.79 43,094,896.28 79,763,775.07
On June 30, 2018, when RMB appreciates or depreciates by 6% without any changes in other factors, for all kinds
of US financial assets and liabilities, there will be an decrease or increase in net profit of about RMB58,180,955
(about RMB34,980,000 on 31 December 2017) for the Company.
(b) Interest Rate Risk
On 30 June 2018 and 31 December 2017, there were no short-term and long-term interest-bearing debt contracts
with floating interest rates in the Company and its subsidiaries, thus the management believed that there was not
existing significant interest rate risk.
(2) Credit Risk
The Company and its subsidiaries adopt group classification to manage the credit risk. Credit risk mainly incurred
in bank deposit, accounts receivable, other accounts receivable, notes receivable, structured deposits, and financial
products recorded into other current assets, etc.
The bank deposits and structured deposits of the Company and its subsidiaries were deposited in the state-owned
banks and other large and medium-sized commercial banks, the Company believed that there was not existing
significant credit risk, and won't lead to any significant losses due to break a contract to the entity.
The Company and its subsidiaries entrust commercial bank, trust company, assets management company and
other financial institutions to conduct short term low risk finance investment, participate in bank financial
products, trust plan of trust company, assets management plan of assets management company, the main
investment direction was financial instrument with the high credit rating, better fluidity, trust products and assets
management plan with prospective earnings, and conducting commercial bank guaranteed finance business with
low risk, stable interest and no more than 1 year investment period in our inter-bank market. The idle fund of the
Company and its subsidiaries used for trust investment was not used to invest in stock and its derivative product,
security investment fund and trust investment for security investment purpose and investment relevant to other
securities.
Besides, as for accounts receivable, other accounts receivable and notes receivable, the Company and its
subsidiaries set relevant policy to control credit risk exposure. The Company and its subsidiaries , based on the
financial situation of the clients, possibility of obtaining guarantee from third party, credit record, and other factors
such as the recent market situation etc. to evaluate the credit qualification of client and set relevant credit period.
The Company and its subsidiaries regularly supervise the credit record of client, as for the client with bad credit
records, the Company and its subsidiaries will adopt reminder letters, shorten the credit period or cancel credit
period etc. to ensure the overall credit risk of the Company within control. On 30 June 2018n and 31 December
2017, there were no significant overdue accounts receivable.
(3) Liquidity Risk
The Company and its subsidiaries were responsible for their respective cash flow prediction. The head financial
department continuously supervised short-term and long-term capital demands at combination level based on
74
collecting cash flow prediction of all subsidiaries to ensure to maintain plenty of cash reserve and securities
available for realization at any time.
On balance sheet date, each financial liabilities listed by un-discounted contract cash flow according to the due
date were demonstrated as follows:
Unit: RMB
30 June 2018
Item
Within 1 year 1-2 years 2-5 years Over 5 years Total
Notes payable 3,915,720,273.53 3,915,720,273.53
Accounts payable 2,809,609,738.57 2,809,609,738.57
Dividends payable 9,049,503.92 9,049,503.92
Other current-liabilities 2,476,199,672.19 2,476,199,672.19
Other accounts payable 185,057,430.91 185,057,430.91
Provisions 2,157,992.76 2,157,992.76
Total 9,397,794,611.88 9,397,794,611.88
31 December 2017
Item
Within 1 year 1-2 years 2-5 years Over 5 years Total
Short-term borrowings 81,393,672.34 81,393,672.34
Notes payable 2,805,804,600.41 2,805,804,600.41
Accounts payable 3,827,025,700.10 3,827,025,700.10
Dividends payable 6,996,784.06 6,996,784.06
Other current-liabilities 2,107,700,604.61 2,107,700,604.61
Other accounts payable 221,120,863.48 221,120,863.48
Provisions 2,253,082.25 2,253,082.25
Total 9,052,295,307.25 9,052,295,307.25
XII. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
75
I. Consistent fair value
-- -- -- --
measurement
Other 1,093,193,150.68 1,093,193,150.68
Derivative financial
4,800,613.47 4,800,613.47
liabilities
II. Inconsistent fair value
-- -- -- --
measurement
2. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
On 30 June 2018, financial liabilities with fair value measurement items at level 2 were all forward foreign
exchange contracts whose fair value were determined based on the current market prices.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
On 30 June 2018 and 31 December 2017, financial assets with fair value measurement items at level 3 were all the
break-even floating income financial product investment, whose fair values were recognized through valuation
technique.
4. Explain the Reason for Conversion and the Policy Governing when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
The incurred date leading to events of conversion between different levels was recognized as the time-point of
conversion between different levels. There was no conversion between level 1 and level 2 in the Current Period.
5. Change in Financial Assets at Level 3
Unit: RMB
Item Financial product investment
1 January 2018 3,792,871,097.59
Purchase -
Sale -2,685,000,000.00
Total current gains -14,677,946.91
-gains recorded into profit or loss -57,871,097.59
-gains recorded into other comprehensive income 43,193,150.68
30 June 2018 1,093,193,150.68
76
Changes in unrealized gains or losses arising from the recording of assets still held on
-
30 June 2018 in profit or loss of 2017
Gain on changes in fair value -
Item Financial product investment
1 January 2017 5,994,142,671.24
Purchase 4,745,000,000.00
Sale -6,900,000,000.00
Total current gains -46,271,573.65
-gains recorded into profit or loss -104,142,671.24
-gains recorded into other comprehensive income 57,871,097.59
31 December 2017 3,792,871,097.59
Changes in unrealized gains or losses arising from the recording of assets still held on
-
31 December 2017 in profit or loss of 2016
Gain on changes in fair value -
Relevant information on fair value measurement at level 3
Unit: RMB
Fair value on 30 Valuation Unobservable input Relationship with Observable/unob
Item Scope
June 2018 technique value fair value servable
Available-for-sale financial assets
Discounted Expected annual
Financial products 1,093,193,150.68 4.7%-5% Positive Unobservable
cash flow yield
Fair value on 31 Valuation Unobservable Relationship Observable/un
Item Scope
December 2017 technique input value with fair value observable
Available-for-sale financial assets
Financial Discounted Expected annual
3,792,871,097.59 4.2%-5.25% Positive Unobservable
products cash flow yield
6. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
Financial assets and liabilities of the Company and its subsidiaries measured at amortized cost mainly include:
notes receivable, accounts receivable, other current assets-structured deposits, other accounts receivable, notes
payable, accounts payable, other accounts payable and other current liabilities.
Available-for-sale financial assets measured at cost was the unlisted share investment with no offer in active
market and larger variation range of its reasonable valuation and each fair value probability cannot be reasonably
recognized, thus, the fair value cannot be reliably measured.
There is no significant variance between the carrying value and fair value of financial assets and liabilities for the
Company and its subsidiaries on 30 June 2018 and 31 December 2017. .
77
XIII. Capital Management
The objective of the capital management policy of the Company and its subsidiaries is to guarantee continuing
operation of the Company and its subsidiaries, and then to offer returns to shareholders and benefit other
stakeholders when maintaining the optimized capital structure to reduce the capital cost.
To maintain or adjust the capital structure, the Company and its subsidiaries may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce liabilities.
The Company and its subsidiaries, not subject to external compulsory capital requirement, supervised the capital
via the asset-liabilities ratio (ratio of total liabilities and total assets).
Item 30 June 2018 31 December 2017
Asset-liability ratio 55.89% 61.49%
XIV. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
Proportion of share Proportion of voting
held by the rights owned by the
Registration
Name Nature of business Registered capital Company as the Company as the
place
parent against the parent against the
Company (%) Company (%)
MIDEA Operating consumer appliances,
Foshan
GROUP CO., HVAC, robots and automatic 6,628,613,347.00 52.67% 52.67%
Guangdong
LTD. system, intelligent supply chain etc.
Notes of the Company as the parent of the Company:
The ultimate controller of the Company is He Xiangjian.
2. Subsidiaries of the Company
Refer to Note IX for details.
3. Information on Other Connected Parties
Name Relationship
Ningbo Midea United Material Supply Co., Ltd Under control of controlling shareholder of the Company
Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. Under control of controlling shareholder of the Company
Midea Group E-commerce Co., Ltd. Under control of controlling shareholder of the Company
78
Zhejiang Meizhi Compressor Co. Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Hicks Electronics Co., Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Precise Mould Technology Co., Ltd. Under control of controlling shareholder of the Company
Midea Smart Home Technology Co., Ltd Under control of controlling shareholder of the Company
Hefei Hua Ling Share Holding Co. , Ltd. Under control of controlling shareholder of the Company
Wuhu Midea Household Electric Appliance Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Midea Electric Trading (Singapore) Co. Pte. Ltd. Under control of controlling shareholder of the Company
MIDEA SCOTT & ENGLISH ELECTRONICS SDN BHD Under control of controlling shareholder of the Company
MIDEA CONSUMER ELECTRIC (VIETNAM) CO., LTD. Under control of controlling shareholder of the Company
PT. MIDEA PLANET INDONESIA Under control of controlling shareholder of the Company
ORIENT HOUSEHOLD APPLIANCES LTD. Under control of controlling shareholder of the Company
Hefei Midea Material Supply Co., Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Household Electric Appliance manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Refrigeration Equipment Co., Ltd Under control of controlling shareholder of the Company
Chongqing Midea Refrigeration Equipment Co., Ltd Under control of controlling shareholder of the Company
Guangdong Midea Group Wuhu Refrigeration Equipment Co., Ltd. Under control of controlling shareholder of the Company
Hubei Midea Refrigerator Co., Ltd. Under control of controlling shareholder of the Company
Hefei Midea Refrigerator Co., Ltd. Under control of controlling shareholder of the Company
Guangdong Midea Environmental Appliance Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Midea Group Finance Co., Ltd. Under control of controlling shareholder of the Company
Foshan Midea Qinghu Water Purification Equipment Co., Ltd. Under control of controlling shareholder of the Company
Wuhu Welling Motor Marketing Co., Ltd. Under control of controlling shareholder of the Company
Huai'an Welling Motor Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Midea Welling Motor Technology (Shanghai) Co., Ltd. Under control of controlling shareholder of the Company
Shenzhen Midea Payment Technology Co., Ltd. Under control of controlling shareholder of the Company
Annto Zhilian Technology Co., Ltd. Under control of controlling shareholder of the Company
TOSHIBA LIFESTYLE PRODUCTS&SERVICES CORPORATION Under control of controlling shareholder of the Company
Toshiba Home Appliances Manufacturing ( South China Sea) Co., Ltd. Under control of controlling shareholder of the Company
Ningbo Annto Zhilian Technology Co., Ltd. Under control of controlling shareholder of the Company
Jiangxi Midea Guiya Lighting Co., Ltd. Under control of controlling shareholder of the Company
Midea Group Wuhan Refrigeration Equipment Co., Ltd. Under control of controlling shareholder of the Company
MIDEA MIDDLE EAST Under control of controlling shareholder of the Company
Wuhu Midea Kitchen & Bathroom Appliance Manufacturing Co., Ltd. Under control of controlling shareholder of the Company
Guangzhou Hualing Refrigeration Equipment Co., Ltd. Under control of controlling shareholder of the Company
79
MIDEA AUSTRALIA PTY LTD Under control of controlling shareholder of the Company
CARRIER MIDEA INDIA PRIVATE LIMITED Under control of controlling shareholder of the Company
MIDEA ELECTRIC TRADING (THAILAND) CO., LTD. Under control of controlling shareholder of the Company
4. List of Connected Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten Thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
Whether
The approval trade Same period of
Connected party Content Reporting Period exceed trade
credit last year
credit or not
Electrical
Wuhu Welling Motor Marketing Co., Ltd. 513,218,519.99 1,410,000,000.00 No 501,214,171.41
Machine
Ningbo Midea United Material Supply Co.,
Materials 982,391,580.79 2,900,000,000.00 No 824,485,276.15
Ltd.
Warehousing
Ningbo Annto Zhilian Technology Co., Ltd. 61,694,435.77 366,086,063.48
& logistics
1,100,000,000.00 No
Annto Zhilian Technology Share Holding Co., Warehousing
336,696,450.38 54,675,276.23
Ltd. & Logistics
Zhejiang Meizhi Compressor Co. Ltd. Compressor 9,461,525.70 20,000,000.00 No 7,043,483.25
Promotion &
Midea Group E-commerce Co., Ltd. 22,297,851.57 125,000,000.00 No 22,380,192.57
Marketing
Ningbo Midea United Material Supply Co., Chip & HIFI
17,884,517.65 65,000,000.00 No 33,583,425.56
Ltd module
Ningbo Beautiful Homeland Electric After-sales
196,390,679.14 395,000,000.00 No 132,504,096.51
Appliance Service Co., Ltd. service
Toshiba Home Appliances Manufacturing Washing
31,458,756.25 280,000,000.00 No
( South China Sea) Co., Ltd. machine
Guangdong Midea Precise Mould Technology
Mould 9,698,119.68 25,000,000.00 No
Co., Ltd.
Midea Smart Home Technology Co., Ltd Service charge 559,969.12 144,785.68
Guangdong Midea Refrigeration Equipment
Service charge 9,854,722.96
Co., Ltd
Shenzhen Midea Payment Technology Co., 25,000,000.00 No
Service charge 88,088.80
Ltd.
Shenzhen Shuzhi Scene Position Technology
Service charge 916,147.89
Co., Ltd.
80
Guangdong Midea Intelligent Robot Co., Ltd. Service charge 25,042.57
Guangdong Midea Hicks Electronics Co., Chip & HIFI
513,334.92
Ltd. module
Midea Group Co., Ltd. Service charge 19,999.98
Total 2,192,636,408.26 1,942,650,105.74
Information of sales of goods and provision of labor service
Unit: RMB
Whether
The approval Same period of
Connected party Content Reporting Period exceed trade
trade credit last year
credit or not
Midea Electric Trading (Singapore) Co. Washing machine 1,594,543,430.93
1,727,394,796.55 4,250,000,000 No
Pte. Ltd. & Fittings
MIDEA SCOTT&ENGLISH Washing machine
53,263,471.91 80,000,000 No 45,312,856.38
ELECTRONIICS SDN.BHD & Fittings
Washing machine 15,461,735.27
PT.Midea Planet Indonesia 23,579,838.36 50,000,000 No
& Fittings
MIDEA CONSUMER ELECTRIC Washing machine
16,073,292.50 50,000,000 No 6,144,209.34
(VIETNAM)COM.,LTD & Fittings
Washing machine 18,771,850.49
Orient Household Appliances Ltd. 12,206,159.82 40,000,000 No
& Fittings
Ningbo Beautiful Homeland Electric 18,416,401.64
Fittings 13,930,794.77 25,000,000 No
Appliance Service Co., Ltd.
Toshiba Home Appliances Manufacturing 548,124.87
Materials 7,552,897.23 25,000,000
( South China Sea) Co., Ltd.
TOSHIBA LIFESTYLE PRODUCTS &
Washing machine 9,133,040.59 20,757,917.67
SERVICES CORPORATION
Annto Zhilian Technology Co., Ltd. Washing machine 2,768,102.02
30,000,000 No
Midea Group E-commerce Co., Ltd. Washing machine 605,688.19
Guangdong Midea Zhilian Home
Washing machine 64,659.49
Technology Co., Ltd.
Washing machine 1,921,564.33
Midea Middle East
& Fittings
Ningbo Annto Zhilian Technology Co., 1,855,571.90
Washing machine
Ltd.
Washing machine 161,538.46
Hefei Hua Ling Share Holding Co. , Ltd.
& Fittings
Total 1,866,572,741.43 1,723,895,201.28
81
(2) Information on Connected Lease
The Company was lessor:
Unit: RMB
The lease income Whether The lease income
Category of The approval trade
Name of lessee confirmed in the exceed trade confirmed in the same
leased assets credit
Reporting Period credit or not period of last year
Hefei Hua Ling Share 15,000,000.00
House renting 6,305,409.36 No 5,641,036.82
Holding Co., Ltd.
5. Accounts Receivable and Payable of Connected Party
(1) Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Item Connected party Bad debt Carrying Bad debt
Carrying amount
provision amount provision
Midea Electric Trading (Singapore)
Accounts receivable 808,990,082.77 40,449,504.14 589,756,109.51 29,487,805.48
Co. Pte. Ltd.
MIDEA SCOTT&ENGLISH
Accounts receivable 27,689,915.81 1,384,495.79 7,962,102.83 398,105.14
ELECTRONILCS SDN.BHD
Accounts receivable PT MIDEA PLANET INDONESIA 19,444,985.13 972,249.26 9,792,445.24 489,622.26
MIDEA CONSUMER ELECTRIC
Accounts receivable 16,078,525.03 803,926.25 11,868,764.19 593,438.21
(VIETNAM)COM.,LTD
Accounts receivable Orient Household Appliances Ltd. 11,902,760.39 595,138.02 2,078,970.94 103,948.55
Ningbo Beautiful Homeland Electric
Accounts receivable 3,293,563.20 164,678.16 4,748,685.08 237,434.25
Appliance Service Co., Ltd.
Toshiba Home Appliances
Accounts receivable Manufacturing ( South China Sea) 1,115,712.81 55,785.64
Co., Ltd.
Accounts receivable Midea Group E-commerce Co., Ltd. 208,234.95 10,411.75 125,900.58 6,295.03
Accounts receivable Annto Zhilian Technology Co., Ltd. 1,000.00 50.00 52,895.00 2,644.75
TOSHIBA LIFESTYLE PRODUCTS
Accounts receivable 8,103,283.44 405,164.17
& SERVICES CORPORATION
Total 888,724,780.09 44,436,239.00 634,489,156.81 31,724,457.84
Other accounts Shenzhen Midea Payment Technology
6,706,867.80 335,343.39 10,520,299.96 526,015.00
receivable Co., Ltd.
Total 6,706,867.80 335,343.39 10,520,299.96 526,015.00
82
Ningbo Midea United Material
Prepayments 26,999,276.18 7,407,695.59
Supply Co., Ltd
Prepayments Midea Group E-commerce Co., Ltd. 4,553,229.49 3,354,919.77
Shenzhen Shuzhi Scene Position
Prepayments 1,050,000.00
Technology Co., Ltd.
Total 32,602,505.67 11,072,455.36
(2) Accounts Payable
Unit: RMB
Ending carrying Beginning
Item Connected party
balance carrying balance
Accounts payable Wuhu Welling Motor Marketing Co., Ltd. 146,638,887.47 146,551,812.62
Toshiba Home Appliances Manufacturing ( South China Sea) Co.,
Accounts payable 21,718,943.46 38,171,577.41
Ltd.
Accounts payable Guangdong Midea Precise Mould Technology Co., Ltd. 15,315,177.94 5,995,300.00
Accounts payable Ningbo Midea United Material Supply Co., Ltd. 45,879,499.32 7,300,152.98
Accounts payable Zhejiang Meizhi Compressor Co. Ltd. 3,984,880.19 5,500,676.15
Accounts payable Annto Zhilian Technology Co., Ltd. 174,836.38
Accounts payable Foshan Midea Qinghu Water Purification Equipment Co., Ltd. 88,452.00 88,452.00
Accounts payable Ningbo Beautiful Homeland Electric Appliance Service Co., Ltd. 79,899.40 51,350.00
Accounts payable Ningbo Annto Zhilian Technology Co., Ltd. 69,785.77 68.38
Accounts payable Wuhu Midea Household Electric Appliance Manufacturing Co., Ltd. 6,800.00 6,800.00
Accounts payable Midea Smart Home Technology Co., Ltd. 1,216,403.00
Accounts payable Guangdong Midea Environmental Appliance Manufacturing Co., Ltd. 13,951.00
Total 233,957,161.93 204,896,543.54
Other accounts payable Guangdong Midea Refrigeration Equipment Co., Ltd. 119,866.94 351,404.33
Other accounts payable Midea Welling Motor Technology (Shanghai) Co., Ltd. 840,075.83 90,387.26
Other accounts payable Guangdong Midea Precise Mould Technology Co., Ltd. 100,000.00
Guangdong Midea Household Electric Appliance Manufacturing Co.,
Other accounts payable 61,458.90
Ltd.
Total 959,942.77 603,250.49
83
XV. Stock Payment
1. Summary
Midea Group has implemented five stock options and two restricted stock incentive plans for middle and senior
management and technical backbones of the Group and its subsidiaries. At present, three exercise period of the
first and second period of the stock option incentive plan, the first and second exercise period of the third period
of the stock option incentive plan, the first exercise period of the fourth period of the stock option incentive plan
and the first lifting restriction on the first restricted stock have reached the right condition.
By the end of the Reporting Period, 33 personnel from the Company and its subsidiaries participated in the first
phase of stock option incentive plan with a total of 7.47 million stock options, 38 personnel participated in the
second phase of stock option incentive plan with a total of 5.985 million stock options, 61 personnel participated
in the third phase of stock option incentive plan with a total of 8.325 million stock options, 117 personnel
participated in the fourth phase of stock option incentive plan with a total of 7.44 million stock options, 125
personnel participated in the fifth phase of stock option incentive plan with a total of 4.84 million stock options,
14 personnel participated in the first phase of restricted stock incentive plan with a total of 2.07 million restricted
stocks, and 21 personnel participated in the second phase of restricted stock incentive plan with a total of 1.34
million restricted stocks.
2. Influence of Stock Payment on Financial Situation and Operating Result
As of 30 June 2018, the total amount of expense for equity-settled stock payment was recognized as
RMB45,722,746.41 (as of 30 June 2017: RMB24,377,334.69). As of 30 June 2018, the accumulated amount of
capital reserve used for equity-settled stock payment was RMB207,171,854.58 (31 December 2017:
RMB163,325,332.37).
XVI. Commitments and Contingency
1. Significant Commitments
As of 30 June 2018, there were no significant commitments to be disclosed.
2. Contingency
There was no contingency to be disclosed.
84
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB’0,000
Ending balance Beginning balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Category Carrying Carrying
Withdr Withd
awal value Proporti rawal value
Amount Proportion Amount Amount Amount
propor on propor
tion tion
Accounts receivable
with significant
single amount for
46,907.02 24.99% 46,907.02 143,493.46 49.87% 143,493.46
which bad debt
provision separately
accrued
Accounts receivable
withdrawn bad debt
provision according 140,815.54 75.01% 7,040.78 5.00% 133,774.76 144,237.89 50.13% 7,211.89 5.00% 137,026.00
to credit risks
characteristics:
Total 187,722.56 100.00% 7,040.78 5.00% 180,681.78 287,731.35 100.00% 7,211.89 2.51% 280,519.46
Accounts receivable with single significant amount for which bad debt provision separately accrued at the end of
the period
□ Applicable √ Not applicable
In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision:
Unit: RMB
Ending balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Within one year 1,408,155,396.79 70,407,769.85 5.00%
Total 1,408,155,396.79 70,407,769.85 5.00%
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
85
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB1,711,175.28.
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Name of customer Balance Bad debt provision Proportion (%)
Total of top 5 accounts receivable in ending
1,138,136,736.87 56,906,836.84 60.63%
balance
2. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB’0,000
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Carrying Withdrawa Carrying
Proportio Withdrawal Proporti
Amount Amount value Amount Amount l value
n proportion on
proportion
Other accounts
receivable with
significant single
7,578.75 76.31% 7,545.67 99.56% 33.08 7,627.85 71.55% 7,545.57 98.92% 82.28
amount for which
bad debt provision
separately accrued
Other accounts
receivable withdrawn
bad debt provision 2,341.88 23.69% 182.68 7.80% 2,159.21 3,032.33 28.45% 217.30 7.17% 2,815.03
according to credit
risks characteristics
Total 9,920.63 100.00% 7,728.34 77.90% 2,192.29 10,660.18 100.00% 7,762.87 72.82% 2,897.30
Other receivable with single significant amount for which bad debt provision separately accrued at the end of the
period：
Unit: RMB
Ending balance
Other accounts receivable (unit)
Other accounts Bad debt Withdrawal Withdrawal reason
86
receivable provision proportion
Jiangsu Little Swan Marketing and Sales Co. ,
74,295,013.55 74,295,013.55 100.00% Irrecoverable
Ltd.
Wuxi Little Swan Import & Export Co., Ltd. 1,161,652.95 1,161,652.95 100.00% Irrecoverable
Little Swan International (Singapore) Co., Ltd. 330,830.00
Total 75,787,496.50 75,456,666.50 -- --
In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision:
Unit: RMB
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Within 1 year 22,006,622.30 1,100,331.12 5.00%
1 to 2 years 426,008.00 42,600.80 10.00%
2 to 3 years 160,400.00 48,120.00 30.00%
Over 3 years 825,800.00 635,700.00 76.98%
Total 23,418,830.30 1,826,751.92 7.80%
Notes:
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB346,288.40.
(3) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Intercourse funds with subsidiaries 75,787,496.50 76,278,456.92
Deposits in third-party payment platforms 16,939,293.28 26,047,303.64
Margin & Cash pledge 2,244,821.48 1,404,000.00
Borrowings by employees 4,155,862.28 2,439,630.53
Other 78,853.27 432,364.08
87
Total 99,206,326.81 106,601,755.17
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to total Ending balance
Name of the entity Nature Ending balance Aging ending balance of other of bad debt
accounts receivable provision
Jiangsu Little Swan
Intercourse funds 74,295,013.55 Over five years 74.89% 74,295,013.55
Marketing and Sales Co. , Ltd.
Alipay (China) Network Deposits in third-party
11,300,245.09 Within one year 11.39% 565,012.25
Technology Co., Ltd. payment platforms
Shenzhen Midea Payment Deposits in third-party
3,891,703.86 Within one year 3.92% 194,585.19
Technology Co., Ltd. payment platforms
Wuxi Little Swan Import &
Intercourse funds 1,161,652.95 Over five years 1.17% 1,161,652.95
Export Co., Ltd.
Deposits in third-party
Chinabank Payments 1,038,920.97 Within one year 1.05% 51,946.06
payment platforms
Total -- 91,687,536.42 -- 76,268,210.00
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment to
1,433,285,041.57 475,050,000.00 958,235,041.57 1,433,285,041.57 475,050,000.00 958,235,041.57
subsidiaries
Total 1,433,285,041.57 475,050,000.00 958,235,041.57 1,433,285,041.57 475,050,000.00 958,235,041.57
Investment to subsidiaries
Unit: RMB
Depreciatio Ending balance of
Investee Beginning balance Increase Decrease Ending balance n reserve depreciation
withdrawn reserve
Wuxi Little Swan Import & Export
57,500,000.00 57,500,000.00 57,500,000.00
Co., Ltd.
Jiangsu Little Swan Marketing and
417,550,000.00 417,550,000.00 417,550,000.00
Sales Co. , Ltd.
Wuxi FILIN Electronics Co., Ltd. 25,660,308.10 25,660,308.10
88
Wuxi Little Swan General Appliance
89,062,000.00 89,062,000.00
Co., Ltd.
Little Swan (Jingzhou) Sanjin
11,869,431.12 11,869,431.12
Electrical Appliance Co., Ltd.
Little Swan International (Singapore)
681,050.00 681,050.00
Co., Ltd.
Hefei Midea Washing Machine Co.,
830,962,252.35 830,962,252.35
Ltd.
Total 1,433,285,041.57 1,433,285,041.57 475,050,000.00
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 7,979,065,489.12 5,959,888,669.74 7,187,874,729.64 5,451,504,491.74
Other operations 476,135,279.59 458,370,511.58 571,348,362.67 544,495,540.84
Total 8,455,200,768.71 6,418,259,181.32 7,759,223,092.31 5,996,000,032.58
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income generated from disposal of
5,554,875.00 1,507,720.00
financial assets at fair value through profit or loss
Investment income generated from
42,302,112.09 91,851,796.82
available-for-sale financial assets
Total 47,856,987.09 93,359,516.82
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Unit: RMB
Item Amount Explanation
Gains/losses on the disposal of non-current assets 634,455.90
Profit/loss on fair value changes of transactional financial assets and
liabilities & investment income from disposal of trading financial assets and -2,020,076.50
liabilities as well as financial assets available-for-sale, except for effective
89
hedges related to routine operations of the Company
Other 16,252,069.24
Less: Income tax effects 2,956,041.69
Non-controlling interests effects 1,654,422.90
Total 10,255,984.05 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Weighted average EPS (Yuan/share)
Profit as of Reporting Period
ROE (%) EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
12.21% 1.43 1.43
Company
Net profit attributable to ordinary shareholders of the
12.07% 1.41 1.41
Company after deduction of non-recurring profit and loss
Wuxi Little Swan Company Limited
8 August 2018
90
