Key Audit Matter	How our audit addressed the Key Audit Matter
We checked the mathematical accuracy of the future
cash flow forecast and the ‘value-in-use’ calculations.
We checked the mathematical accuracy of the
management’s sensitivity calculations for analysing the
impact on the ‘value-in-use’ of the Minjiang Snow CGU
from using different sales growth rates, igross profit margn
and discount rates (as these key assumptions are
considered as most sensitive) which management has
assessed as the possible ranges of deviations. We
discussed the context of the level of headroom indicated
in the sensitivity analysis with management and evaluated
the adequacy of the disclosures made regarding the
assumptions.
Impairment assessment on the investment in an
associate
Refer to Note 4 (Critical accounting estimates and
judgements) and Note 10(b) to the consolidated financial
statements.
We focused on this area due to the associate, Jiangxi
Zhengge Investment Stock Co., Ltd. (“Jiangxi Zhengge”)
(an associate as acquired by the Group in December
2014), was continuously loss-making which constitutes
as an impairment indicator, the size of the investment
balance in Jiangxi Zhengge (RMB73,174,000 (including
the goodwill on acquisition of approximately
RMB8,593,000) at 31 December 2016) and also because
the management’s assessment of the ‘value-in-use’ of the
related cash generating unit (the “Jiangxi Zhengge CGU”)
involves judgement and estimates about the future
business results of the Jiangxi Zhengge CGU and the
discount rates alipes to the future cash flow fporecast.
The management’s assessment reveals that there is no
impairment on the investment.	The procedures which we have performed to address this
key audit matter are same as those procedures as we
have conducted for addressing the key audit matter
‘Goodwill impairment assessment’ as set out above.
We found that management had followed their clearly
documented process for drawing up future cash flow
forecasts, which was subject to timely oversihgt and
consistent with the budgets as approved by the Board of
Jiangxi Zhengge.
We found that the key assumptions (i.e. the sales growth
rate, gross profit marin, lgong-term growth rate and
discount rate) as adopted by management in the future
cash flow forecast for the Jiangxi Zhengge CGU are to be
in acceptable ranges.

# OTHER INFORMATION

The directors of the Company are responsible for the other information. The other information comprises all of the information included in the annual report other than the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.