Financial Report
I.Auditor’s Report
Whether the semi-annual report has been audited?
□Yes√ No
The semi-annual 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|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|3,424,099,307.77|4,272,077,211.11|
|Settlement reserve|||
|Interbank lendings|||
|Financial assets at fair value through profit/loss|4,917,873.13||
|Derivative financial assets|||
|Notes receivable|1,878,193,045.31|1,297,609,202.29|
|Accounts receivable|1,622,290,121.44|1,465,654,497.90|
|Accounts paid in advance|122,004,474.40|131,513,792.18|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract reserve|||
|Interest receivable|55,176,400.57|26,755,807.07|
|Dividends receivable|||
|Other accounts receivable|9,542,347.96|23,693,886.54|
|Financial assets purchased under agreements to resell|||
|Inventories|1,084,450,981.78|1,724,837,944.69|
|Assets held for sale|||

||||
|-|-|-|
|Non-current assets due within one year|||
|Other current assets|8,804,584,056.35|8,385,724,282.16|
|Total current assets|17,005,258,608.71|17,327,866,623.94|
|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 accounts receivable|||
|Long-term equity investments|||
|Investment property|62,928,849.25|64,854,903.25|
|Fixed assets|978,083,778.86|970,859,291.03|
|Construction in progress|176,579.99||
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|189,664,416.73|192,283,486.15|
|R&D expenses|||
|Goodwill|||
|Long-term deferred expense|5,100,503.15|4,387,728.14|
|Deferred income tax assets|349,220,299.11|299,879,029.23|
|Other non-current assets|64,654,141.02|25,655,775.90|
|Total non-current assets|1,650,028,568.11|1,558,120,213.70|
|Total assets|18,655,287,176.82|18,885,986,837.64|
|Current liabilities:|||
|Short-term borrowings|170,000,000.00|183,813,064.12|
|Borrowings from the Central Bank|||
|Money deposits accepted and inter-bank deposits|||
|Interbank borrowings|||
|Financial liabilities at fair value through profit/loss|||
|Derivative financial liabilities|||
|Notes payable|3,014,675,255.37|2,620,549,815.47|
|Accounts payable|3,447,470,692.87|3,335,089,672.06|
|Accounts received in advance|1,673,007,411.95|3,014,347,762.24|

||||
|-|-|-|
|Financial assets sold for repurchase|||
|Fees and commissions payable|||
|Payroll payable|236,575,040.77|288,592,163.29|
|Taxes payable|368,178,286.60|412,238,029.96|
|Interest payable|||
|Dividends payable|9,338,224.06|7,150,684.06|
|Other accounts payable|224,691,641.72|199,926,402.04|
|Reinsurance premiums payable|||
|Insurance contract reserve|||
|Payables for acting trading of securities|||
|Payables for acting underwriting of securities|||
|Liabilities held for sale|||
|Non-current liabilities due within one year|||
|Other current liabilities|2,183,815,015.64|1,844,413,154.26|
|Total current liabilities|11,327,751,568.98|11,906,120,747.50|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Long-term accounts payable|||
|Long-term payroll payable|13,693,727.01|16,101,348.60|
|Special payables|||
|Provisions|1,675,596.14|1,727,340.89|
|Deferred income|2,715,733.23|2,942,333.25|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|18,085,056.38|20,771,022.74|
|Total liabilities|11,345,836,625.36|11,926,891,770.24|
|Owners’ equity:|||
|Share capital|632,487,764.00|632,487,764.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||

||||
|-|-|-|
|Capital reserve|1,214,971,453.88|1,191,490,133.01|
|Less: Treasury shares|||
|Other comprehensive income|43,336,488.70|70,757,524.61|
|Special reserve|||
|Surplus reserve|332,594,722.29|332,594,722.29|
|Provisions for general risks|||
|Retained earnings|4,013,692,398.30|3,756,517,718.81|
|Equity attributable to owners of the Company|6,237,082,827.17|5,983,847,862.72|
|Minority interests|1,072,367,724.29|975,247,204.68|
|Total owners’ equity|7,309,450,551.46|6,959,095,067.40|
|Total liabilities and owners’ equity|18,655,287,176.82|18,885,986,837.64|

 2. Balance Sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|2,095,263,449.08|2,397,428,457.92|
|Financial assets at fair value through profit/loss|4,277,601.99||
|Derivative financial assets|||
|Notes receivable|1,314,372,888.10|1,088,559,252.21|
|Accounts receivable|2,843,496,812.50|2,310,254,576.98|
|Accounts paid in advance|72,598,507.64|89,477,823.29|
|Interest receivable|41,684,674.93|18,798,031.69|
|Dividends receivable|||
|Other accounts receivable|6,350,918.21|16,176,106.89|
|Inventories|685,777,572.43|1,068,494,123.28|
|Assets held for sale|||
|Non-current assets due within one year|||
|Other current assets|5,180,109,851.94|4,965,682,855.69|
|Total current assets|12,243,932,276.82|11,954,871,227.95|
|Non-current assets:|||
|Available-for-sale financial assets|150,000.00|150,000.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||

||||
|-|-|-|
|Long-term equity investments|1,375,785,041.57|1,375,785,041.57|
|Investment property|7,368,182.88|7,546,955.16|
|Fixed assets|502,850,610.11|490,047,802.72|
|Construction in progress|176,579.99||
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|91,246,017.50|92,591,167.64|
|R&D expenses|||
|Goodwill|||
|Long-term deferred expense|3,059,475.11|1,817,228.83|
|Deferred income tax assets|222,157,842.72|197,091,251.29|
|Other non-current assets|28,445,385.12|18,313,858.80|
|Total non-current assets|2,231,239,135.00|2,183,343,306.01|
|Total assets|14,475,171,411.82|14,138,214,533.96|
|Current liabilities:|||
|Short-term borrowings|135,000,000.00|123,943,093.80|
|Financial liabilities at fair value through profit/loss|||
|Derivative financial liabilities|||
|Notes payable|2,199,096,804.05|1,508,017,904.49|
|Accounts payable|4,321,712,882.98|3,913,090,507.89|
|Accounts received in advance|991,692,723.35|1,854,711,663.46|
|Payroll payable|179,768,059.61|216,530,836.37|
|Taxes payable|228,249,835.40|249,034,768.38|
|Interest payable|||
|Dividends payable|9,338,224.06|7,150,684.06|
|Other accounts payable|132,595,634.97|143,124,857.82|
|Liabilities held for sale|||
|Non-current liabilities due within one year|||
|Other current liabilities|1,335,662,223.09|1,173,641,937.69|
|Total current liabilities|9,533,116,387.51|9,189,246,253.96|
|Non-current liabilities:|||
|Long-term borrowings|||

||||
|-|-|-|
|Bonds payable|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|||
|Special payables|||
|Provisions|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|9,533,116,387.51|9,189,246,253.96|
|Owners’ equity:|||
|Share capital|632,487,764.00|632,487,764.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Capital reserve|1,371,806,544.46|1,350,656,531.65|
|Less: Treasury shares|||
|Other comprehensive income|22,152,205.79|37,515,343.84|
|Special reserve|||
|Surplus reserve|319,944,578.39|319,944,578.39|
|Retained earnings|2,595,663,931.67|2,608,364,062.12|
|Total owners’ equity|4,942,055,024.31|4,948,968,280.00|
|Total liabilities and owners’ equity|14,475,171,411.82|14,138,214,533.96|

 3. Consolidated Income Statement
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Operating revenues|10,568,060,854.21|7,984,787,194.92|
|Including: Sales income|10,568,060,854.21|7,984,787,194.92|
|Interest income|||
|Premium income|||
|Fee and commission income|||

||||
|-|-|-|
|2. Operating costs|9,801,989,312.87|7,279,128,086.90|
|Including: Cost of sales|7,861,371,811.78|5,812,591,773.67|
|Interest expenses|||
|Fee and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount provided as insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and surtaxes|64,532,273.74|44,723,877.46|
|Selling expenses|1,533,889,871.40|1,191,332,056.12|
|Administrative expenses|328,163,105.40|265,946,054.68|
|Finance costs|-23,523,197.84|-63,399,464.47|
|Asset impairment loss|37,555,448.39|27,933,789.44|
|Add: Profit on fair value changes (“-” means loss)|4,917,873.13||
|Investment income (“-” means loss)|181,665,882.11|67,315,479.04|
|Including: Share of profit/loss of associates and joint ventures|||
|Exchange gains (“-” means loss)|||
|Other gains|15,806,553.77||
|3. Operating profit (“-” means loss)|968,461,850.35|772,974,587.06|
|Add: Non-operating income|15,623,753.30|21,485,985.76|
|Including: Profit on disposal of non-current assets|4,578,714.70|116,837.67|
|Less: Non-operating expense|3,079,657.86|2,234,905.37|
|Including: Loss on disposal of non-current assets|2,254,629.17|238,583.97|
|4. Total profit (“-” means loss)|981,005,945.79|792,225,667.45|
|Less: Corporate income tax|148,245,695.78|127,302,391.75|
|5. Net profit (“-” means loss)|832,760,250.01|664,923,275.70|
|Net profit attributable to owners of the Company|731,540,502.47|580,826,562.58|
|Minority interests’ income|101,219,747.54|84,096,713.12|
|6. Other comprehensive income net of tax|-32,416,277.72|36,264,775.36|
|Other comprehensive income net of tax attributable to owners of the|||
||-27,421,035.91|32,936,889.93|
|Company|||
|6.1 Other comprehensive income that will not be reclassified into|||
|profit/loss|||
|6.1.1 Changes in net liabilities or assets with a defined benefit|||

||||
|-|-|-|
|plan upon re-measurement|||
|6.1.2 Share of other comprehensive income of investees that|||
|cannot be reclassified into profit/loss under the equity method|||
|6.2 Other comprehensive income to be subsequently reclassified|||
||-27,421,035.91|32,936,889.93|
|into profit/loss|||
|6.2.1 Share of other comprehensive income of investees that will|||
|be reclassified into profit/loss under the equity method|||
|6.2.2 Profit/loss on fair value changes of available-for-sale|||
||-27,414,609.36|32,930,096.23|
|financial assets|||
|6.2.3 Profit/loss on reclassifying held-to-maturity investments|||
|into available-for-sale financial assets|||
|6.2.4 Effective profit/loss on cash flow hedges|||
|6.2.5 Currency translation differences|-6,426.55|6,793.70|
|6.2.6 Other|||
|Other comprehensive income net of tax attributable to minority|||
||-4,995,241.81|3,327,885.43|
|interests|||
|7. Total comprehensive income|800,343,972.29|701,188,051.06|
|Attributable to owners of the Company|704,119,466.56|613,763,452.51|
|Attributable to minority interests|96,224,505.73|87,424,598.55|
|8. Earnings per share|||
|8.1 Basic earnings per share|1.16|0.92|
|8.2 Diluted earnings per share|1.16|0.92|

 4. Income Statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Operating revenues|7,759,223,092.31|6,045,821,092.06|
|Less: Operating costs|5,996,000,032.58|4,524,954,975.35|
|Taxes and surtaxes|44,435,454.94|33,236,303.28|
|Selling expenses|1,018,772,573.33|895,080,287.51|
|Administrative expenses|270,135,520.31|209,223,619.71|
|Finance costs|-28,038,916.25|-45,716,922.45|
|Asset impairment loss|15,145,318.12|21,496,002.51|
|Add: profit on fair value changes (“-” means loss)|4,277,601.99||
|Investment income (“-” means loss)|93,359,516.82|17,306,094.37|
|Including: Share of profit/loss of associates and joint ventures|||
|Other gains|||

||||
|-|-|-|
|2. Operating profit (“-” means loss)|540,410,228.09|424,852,920.52|
|Add: Non-operating income|8,461,114.95|2,783,345.24|
|Including: Profit on disposal of non-current assets|99,572.65|99,572.65|
|Less: Non-operating expense|1,598,940.52|434,564.65|
|Including: Loss on disposal of non-current assets|234,891.28|234,891.28|
|3. Total profit (“-” means loss)|547,272,402.52|427,201,701.11|
|Less: Corporate income tax|85,606,709.99|70,735,081.19|
|4. Net profit (“-” means loss)|461,665,692.53|356,466,619.92|
|5. Other comprehensive income net of tax|-15,363,138.05|25,339,813.73|
|5.1 Other comprehensive income that will not be reclassified into profit|||
|and loss|||
|5.1.1 Changes in net liabilities or assets with a defined benefit plan|||
|upon re-measurement|||
|5.1.2 Share of other comprehensive income of investees that cannot be|||
|reclassified into profit/loss under the equity method|||
|5.2 Other comprehensive income to be subsequently reclassified into|||
||-15,363,138.05|25,339,813.73|
|profit/loss|||
|5.2.1 Share of other comprehensive income of investees that will be|||
|reclassified into profit/loss under the equity method|||
|5.2.2 Profit/loss on fair value changes of available-for-sale financial|||
||-15,363,138.05|25,339,813.73|
|assets|||
|5.2.3 Profit/loss on reclassifying held-to-maturity investments into|||
|available-for-sale financial assets|||
|5.2.4 Effective profit/loss on cash flow hedges|||
|5.2.5 Currency translation differences|||
|5.2.6 Other|||
|6. Total comprehensive income|446,302,554.48|381,806,433.65|
|7. Earnings per share|||
|7.1 Basic earnings per share|||
|7.2 Diluted earnings per share|||

5. Consolidated Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Cash flows associated with operating activities:|||
|Cash received from sale of commodities and rendering of service|6,722,546,282.77|7,270,388,782.83|
|Net increase in money deposits from customers and interbank|||

||||
|-|-|-|
|placements|||
|Net increase in loans from the Central Bank|||
|Net increase in funds borrowed from other financial institutions|||
|Cash received from premium of original insurance contracts|||
|Net cash received from reinsurance business|||
|Net increase in deposits of policy holders and investment fund|||
|Net increase in disposal of financial assets at fair value through|||
|profit/loss|||
|Interest, fees and commissions received|||
|Net increase in interbank borrowings|||
|Net increase in funds in repurchase business|||
|Tax refunds received|35,550,472.93|22,502,456.41|
|Cash generated by other operating activities|46,492,111.69|45,513,803.23|
|Subtotal of cash generated by operating activities|6,804,588,867.39|7,338,405,042.47|
|Cash paid for goods and services|4,509,538,095.07|3,658,677,508.75|
|Net increase in loans and advances to customers|||
|Net increase in funds deposited in the Central Bank and interbank|||
|placements|||
|Cash paid for claims of original insurance contracts|||
|Interest, fees and commissions paid|||
|Cash paid as policy dividends|||
|Cash paid to and for employees|620,865,515.47|524,746,031.23|
|Taxes paid|472,145,836.29|509,900,003.41|
|Cash used in other operating activities|1,344,450,112.80|1,037,984,106.20|
|Subtotal of cash used in operating activities|6,946,999,559.63|5,731,307,649.59|
|Net cash generated by operating activities|-142,410,692.24|1,607,097,392.88|
|2. Cash flows associated with investing activities:|||
|Cash received from retraction of investments|2,895,000,000.00|3,310,000,000.00|
|Cash received as investment income|181,837,920.52|67,315,479.04|
|Net cash received from disposal of fixed assets, intangible assets and|||
||723,271.02|708,034.20|
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other business units|2,415,000.00||
|Cash generated by other investing activities|16,802,196.35|34,473,639.38|
|Subtotal of cash generated by investing activities|3,096,778,387.89|3,412,497,152.62|
|Cash paid to acquire fixed assets, intangible assets and other long-term|||
||79,751,100.92|10,938,428.51|
|assets|||

||||
|-|-|-|
|Cash paid for investment|3,465,000,000.00|5,506,000,000.00|
|Net increase in pledged loans|||
|Net cash paid to acquire subsidiaries and other business units|||
|Cash used in other investing activities|||
|Subtotal of cash used in investing activities|3,544,751,100.92|5,516,938,428.51|
|Net cash generated by investing activities|-447,972,713.03|-2,104,441,275.89|
|3. Cash flows associated with financing activities:|||
|Cash received from capital contributions|||
|Including: Cash received from minority shareholder investments by|||
|subsidiaries|||
|Cash received as borrowings|170,000,000.00||
|Cash received from issuance of bonds|||
|Cash generated by other financing activities|||
|Subtotal of cash generated by financing activities|170,000,000.00||
|Repayment of borrowings|183,813,064.12||
|Cash paid for interest expenses and distribution of dividends or profit|470,510,888.90|376,001,781.77|
|Including: dividends or profit paid by subsidiaries to minority interests|||
|Cash used in other financing activities|||
|Sub-total of cash used in financing activities|654,323,953.02|376,001,781.77|
|Net cash generated by financing activities|-484,323,953.02|-376,001,781.77|
|4. Effect of foreign exchange rate changes on cash and cash equivalents|||
|5. Net increase in cash and cash equivalents|-1,074,707,358.29|-873,345,664.78|
|Add: Opening balance of cash and cash equivalents|4,171,689,917.21|2,792,685,328.69|
|6. Closing balance of cash and cash equivalents|3,096,982,558.92|1,919,339,663.91|

 6. Cash Flow Statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Cash flows associated with operating activities:|||
|Cash received from sale of commodities and rendering of service|5,000,964,767.84|4,472,927,007.09|
|Tax refunds received|||
|Cash generated by other operating activities|20,559,743.51|27,847,107.11|
|Subtotal of cash generated by operating activities|5,021,524,511.35|4,500,774,114.20|
|Cash paid for goods and services|3,201,385,866.98|2,689,346,047.46|

||||
|-|-|-|
|Cash paid to and for employees|439,863,524.85|371,117,437.36|
|Taxes paid|284,758,489.88|389,325,858.67|
|Cash used in other operating activities|905,013,311.49|741,951,997.54|
|Subtotal of cash used in operating activities|4,831,021,193.20|4,191,741,341.03|
|Net cash generated by operating activities|190,503,318.15|309,032,773.17|
|2. Cash flows associated with investing activities:|||
|Cash received from retraction of investments|1,625,000,000.00|1,915,000,000.00|
|Cash received as investment income|92,023,835.23|17,306,094.37|
|Net cash received from disposal of fixed assets, intangible assets and|||
||192,710.01|699,422.23|
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other business units|2,415,000.00||
|Cash generated by other investing activities|13,702,196.35|27,275,633.98|
|Subtotal of cash generated by investing activities|1,733,333,741.59|1,960,281,150.58|
|Cash paid to acquire fixed assets, intangible assets and other long-term|||
||31,162,375.53|4,139,931.83|
|assets|||
|Cash paid for investment|1,895,000,000.00|2,826,000,000.00|
|Net cash paid to acquire subsidiaries and other business units|||
|Cash used in other investing activities|||
|Subtotal of cash used in investing activities|1,926,162,375.53|2,830,139,931.83|
|Net cash generated by investing activities|-192,828,633.94|-869,858,781.25|
|3. Cash flows associated with financing activities:|||
|Cash received from capital contributions|||
|Cash received as borrowings|135,000,000.00||
|Cash received from issuance of bonds|||
|Cash generated by other financing activities|||
|Subtotal of cash generated by financing activities|135,000,000.00||
|Repayment of borrowings|123,943,093.80||
|Cash paid for interest expenses and distribution of dividends or profit|470,510,888.90|376,001,781.77|
|Cash used in other financing activities|||
|Sub-total of cash used in financing activities|594,453,982.70|376,001,781.77|
|Net cash generated by financing activities|-459,453,982.70|-376,001,781.77|
|4. Effect of foreign exchange rate changes on cash and cash equivalents|||
|5. Net increase in cash and cash equivalents|-461,779,298.49|-936,827,789.85|
|Add: Opening balance of cash and cash equivalents|2,353,708,554.75|1,866,443,114.64|
|6. Closing balance of cash and cash equivalents|1,891,929,256.26|929,615,324.79|

7. Consolidated Statement of Changes inOwners’ Equity
January-June 2017
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2017|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||Gene||||
|||||||Less:||Speci||||||
|Item||||||||||||||
|||instruments|||||Other|||ral|||Total owners’|
|||||||Treasu||al||||Minority interests||
||Share capital|Prefer|Perpetu||Capital reserve||comprehensive||Surplus reserve|risk|Retained earnings||equity|
|||||Othe||ry||reser||||||
|||ence|al||||income|||reser||||
|||||r||shares||ve||||||
|||shares|bonds|||||||ve||||
|1. Balance at the end of the 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: Changes in accounting policies||||||||||||||
|Correction of errors in prior periods||||||||||||||
|Business mergers under the same||||||||||||||
|controlOther||||||||||||||
|2. Balance at the beginning of the 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|
|3. Increase/ decrease in the period (“-”||||||||||||||
||||||23,481,320.87||-27,421,035.91||||257,174,679.49|97,120,519.61|350,355,484.06|
|means decrease)||||||||||||||
|3.1 Total comprehensive income|||||||-27,421,035.91||||731,540,502.47|101,219,747.54|805,339,214.09|
|3.2 Capital increased and reduced by|||||23,481,320.87|||||||-4,099,227.93|19,382,092.95|
|owners3.2.1 Ordinary shares increased by||||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|3.2.2 Capital increased by holders||||||||
|of other equity instruments3.2.3 Amounts of share-based||23,481,320.87||||-4,099,227.93|19,382,092.95|
|payments charged to owners’ equity3.2.4 Other||||||||
|3.3 Profit distribution|||||-474,365,822.98||-474,365,822.98|
|3.3.1 Appropriation to surplus||||||||
|reserve3.3.2 Appropriation to general risk||||||||
|provisions3.3.3 Appropriation to owners (or|||||-474,365,822.98||-474,365,822.98|
|shareholders)3.3.4 Other||||||||
|3.4 Internal carry-forward of owners’||||||||
|equity3.4.1 New increase of capital (or||||||||
|share capital) from capital reserve3.4.2 New increase of capital (or||||||||
|share capital) from surplus reserve3.4.3 Surplus reserve for making up||||||||
|loss3.4.4 Other||||||||
|3.5 Special reserve||||||||
|3.5.1 Withdrawn for the period||||||||
|3.5.2 Used in the period||||||||
|3.6 Other||||||||
|4. Closing balance|632,487,764.00|1,214,971,453.88|43,336,488.70|332,594,722.29|4,013,692,398.30|1,072,367,724.29|7,309,450,551.46|

January-June 2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2016|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||Gen||||
|Item||||||Less:||Spec||||||
|||instruments|||||Other|||eral||Minority|Total owners’|
|||||||Treasu||ial||||||
||Share capital|Prefer|Perpet||Capital reserve||comprehensiv||Surplus reserve|risk|Retained earnings|interests|equity|
|||||Othe||ry||reser||||||
|||ence|ual||||e income|||reser||||
|||||r||shares||ve||||||
|||shares|bonds|||||||ve||||
|1. Balance at the end of the prior year|632,487,764.00||||1,164,014,947.85||34,813,284.64||332,594,722.29||2,960,955,454.36|862,860,913.96|5,987,727,087.10|
|Add: Changes in accounting policies||||||||||||||
|Correction of errors in prior periods||||||||||||||
|Business mergers under the same||||||||||||||
|controlOther||||||||||||||
|2. Balance at the beginning of the year|632,487,764.00||||1,164,014,947.85||34,813,284.64||332,594,722.29||2,960,955,454.36|862,860,913.96|5,987,727,087.10|
|3. Increase/ decrease in the period (“-”||||||||||||||
||||||27,475,185.16||35,944,239.97||||795,562,264.45|112,386,290.72|971,367,980.30|
|means decrease)||||||||||||||
|3.1 Total comprehensive income|||||||35,944,239.97||||1,175,054,922.85|172,992,887.66|1,383,992,050.48|
|3.2 Capital increased and reduced by|||||27,475,185.16|||||||-60,606,596.94|-33,131,411.78|
|owners3.2.1 Ordinary shares increased by||||||||||||||
|shareholders3.2.2 Capital increased by holders of||||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|3.2.3 Amounts of share-based||34,772,462.28||||1,558,125.94|36,330,588.22|
|payments charged to owners’ equity3.2.4 Other||-7,297,277.12||||-62,164,722.88|-69,462,000.00|
|3.3 Profit distribution|||||-379,492,658.40||-379,492,658.40|
|3.3.1 Appropriation to surplus||||||||
|reserve3.3.2 Appropriation to general risk||||||||
|provisions3.3.3 Appropriation to owners (or|||||-379,492,658.40||-379,492,658.40|
|shareholders)3.3.4 Other||||||||
|3.4 Internal carry-forward of owners’||||||||
|equity3.4.1 New increase of capital (or||||||||
|share capital) from capital reserve3.4.2 New increase of capital (or||||||||
|share capital) from surplus reserve3.4.3 Surplus reserve for making up||||||||
|loss3.4.4 Other||||||||
|3.5 Special reserve||||||||
|3.5.1 Withdrawn for the period||||||||
|3.5.2 Used in the period||||||||
|3.6 Other||||||||
|4. Closing balance|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|

8. Statement of Changes inOwners’ Equity of the Company
January-June 2017
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2017|||||||||||
|||Other equity instruments||||Less:|Other|||||
|Item||||||||||||
|||||||||Special|||Total owners’|
||Share capital|Preference|Perpetua||Capital reserve|Treasury|comprehensive||Surplus reserve|Retained earnings||
|||||Other||||reserve|||equity|
|||shares|l bonds|||shares|income|||||
|1. Balance at the end of the 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: Changes in accounting policies||||||||||||
|Correction of errors in prior periods||||||||||||
|Other||||||||||||
|2. Balance at the 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 (“-”||||||||||||
||||||21,150,012.81||-15,363,138.05|||-12,700,130.45|-6,913,255.69|
|means decrease)||||||||||||
|3.1 Total comprehensive income|||||||-15,363,138.05|||461,665,692.53|446,302,554.48|
|3.2 Capital increased and reduced by|||||21,150,012.81||||||21,150,012.81|
|owners3.2.1 Ordinary shares increased by||||||||||||
|shareholders3.2.2 Capital increased by holders of||||||||||||
|other equity instruments3.2.3 Amounts of share-based|||||21,150,012.81||||||21,150,012.81|

||||||||
|-|-|-|-|-|-|-|
|3.2.4 Other|||||||
|3.3 Profit distribution|||||-474,365,822.98|-474,365,822.98|
|3.3.1 Appropriation to surplus|||||||
|reserve3.3.2 Appropriation to owners (or|||||-474,365,822.98|-474,365,822.98|
|shareholders)3.3.3 Other|||||||
|3.4 Internal carry-forward of owners’|||||||
|equity3.4.1 New increase of capital (or|||||||
|share capital) from capital reserve3.4.2 New increase of capital (or|||||||
|share capital) from surplus reserve3.4.3 Surplus reserve for making up|||||||
|loss3.4.4 Other|||||||
|3.5 Special reserve|||||||
|3.5.1 Withdrawn for the period|||||||
|3.5.2 Used in the period|||||||
|3.6 Other|||||||
|4. Closing balance|632,487,764.00|1,371,806,544.46|22,152,205.79|319,944,578.39|2,595,663,931.67|4,942,055,024.31|

January-June 2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2016|||||||||||
|||Other equity instruments||||Less:|Other|||||
|Item||||||||||||
|||||||||Special|||Total owners’|
||Share capital|Preference|Perpetua||Capital reserve|Treasury|comprehensive||Surplus reserve|Retained earnings||
|||||Other||||reserve|||equity|
|||shares|l bonds|||shares|income|||||
|1. Balance at the end of the prior year|632,487,764.00||||1,319,496,538.02||13,608,826.40||319,944,578.39|2,224,114,783.65|4,509,652,490.46|
|Add: Changes in accounting policies||||||||||||
|Correction of errors in prior periods||||||||||||
|Other||||||||||||
|2. Balance at the beginning of the year|632,487,764.00||||1,319,496,538.02||13,608,826.40||319,944,578.39|2,224,114,783.65|4,509,652,490.46|
|3. Increase/ decrease in the period (“-”||||||||||||
||||||31,159,993.63||23,906,517.44|||384,249,278.47|439,315,789.54|
|means decrease)||||||||||||
|3.1 Total comprehensive income|||||||23,906,517.44|||763,741,936.87|787,648,454.31|
|3.2 Capital increased and reduced by|||||31,159,993.63||||||31,159,993.63|
|owners3.2.1 Ordinary shares increased by||||||||||||
|shareholders3.2.2 Capital increased by holders of||||||||||||
|other equity instruments3.2.3 Amounts of share-based|||||31,159,993.63||||||31,159,993.63|
|payments charged to owners’ equity3.2.4 Other||||||||||||
|3.3 Profit distribution||||||||||-379,492,658.40|-379,492,658.40|

||||||||
|-|-|-|-|-|-|-|
|3.3.1 Appropriation to surplus|||||||
|reserve3.3.2 Appropriation to owners (or|||||-379,492,658.40|-379,492,658.40|
|shareholders)3.3.3 Other|||||||
|3.4 Internal carry-forward of owners’|||||||
|equity3.4.1 New increase of capital (or|||||||
|share capital) from capital reserve3.4.2 New increase of capital (or|||||||
|share capital) from surplus reserve3.4.3 Surplus reserve for making up|||||||
|loss3.4.4 Other|||||||
|3.5 Special reserve|||||||
|3.5.1 Withdrawn for the period|||||||
|3.5.2 Used in the period|||||||
|3.6 Other|||||||
|4. Closing balance|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|

III. Company profile
Wuxi Little Swan Company Ltd. 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 November 29, 1993. Then the Company domestically and publicly issued 70,000,000 shares of B-share and transformed to astate-collectively–owned enterprise with the approval of (1996) No. 52 document from Jiangsu Province of thePeople’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 July 20, 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 August 4, 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 August 7, 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 May 9, 2008, the 2007 Annual General Meeting reviewed and approved the capital accumulation fund turn add equity schemes: 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
Session of the
6th
Board of Directors and the
1st
Provisional Shareholders General Meeting in 2010, having approved by China Securities Regulatory Commission of the Reply to the Approval of the Significant Assets Reorganization and the Purchase of the Assets of GD Midea Holding by Wuxi Little Swan Co., Ltd. (ZJXK[2010] 1577) on November 9, 2010, the company launched directional add-issuance of 84,832,000.00 A shares to buy69.47% 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.( “Midea Appliance”). 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.(“Midea Group”) (ZJXK[2013] 1014 document) that issued on July 29, 2013, Midea Group had split off as well as consolidated and combined the original controller GD Midea Holding on September 18, 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 December 31, 2013, and after which, Midea Group changed to be the first largest shareholder of the Company.
By June 30, 2017, 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 2,951,745 shares, accounting for0.47% of the whole shares; the unrestricted exchange-traded A shares are 438,500,147 shares, accounting for69.33%; and the
unrestricted exchange-traded B shares are 191,035,872 shares, account for30.20% of the whole shares.
Registered address of the Company is as same as the headquarters office address. That is No. 18 of Changjiang South Road, National High-tech Industrial Development Zone, Wuxi City, Jiangsu Province.
The Company belongs 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 August 3, 2017.
For the major subsidiaries that included in the consolidated scope of the Reporting Period, please refer to the Notes VIII.
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 February 15, 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).
The financial report compiled based on the continuation.
V. Important accounting policies and estimations
1. Statement of compliance with Enterprise accounting standards
The 2017 semi-annual financial statements of the Company comply with the requirements of Accounting Standards with the merger on June 30, 2017 and theCompany’s financial conditions as well as the relevant information of the semi-annual merger of Y2017 and the operation results and the cash flow of the Company are truly and completely disclosed in the financial statements.
2. Accounting period
Thecompany’s accounting year is from
1st
January to
31st
December 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.
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. 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 theseller’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 whenthey’re put under the control of the final controlling party, and the net profit realized before the combination day shall be individually reflected in the consolidated income statement.
When consolidated financial statement is being formulated, thecompany’s accounting policy and accounting period shall be regarded as final and binding to adjust thesubsidiary’s financial statement if thesubsidiary’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 thecompany’s major incoming and outgoing balances, transactions and unrealized profit shall be set off during the compilation of the consolidated financial statement. Thesubsidiary’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 undershareholder’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 thecompany’s sales of assets to the subsidiary shall be applied to set off the net profit attributed to the parentcompany’s shareholders; all unrealized internal transaction profit and loss resulting from thesubsidiary’s sales of assets to the parent company shall be set off accordingly by the net profit attributed the parentcompany’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 parentcompany’s shareholders and minority interest income based on corresponding distribution ratio (the company to theseller’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
Thecompany’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
Foreign currency transaction shall be recorded in an account based on RMB (through applying the spot rate in the day of transaction).
On balance sheet day, foreign currency monetary items shall be converted into RMB 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 ofshareholder’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 measured based on its fair value and its variations included in profit and loss for the period, account receivable, available-for-sale financial assets and held-to-maturity investment. However, the classification of financial assets depends on thecompany’s intention on and capacity of holding such financial assets.
Loan and account receivable
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 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 form 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 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.
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 inshareholder’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. 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
The company shall check the book value of corresponding financial assets on balance sheet day; if any objective evidence proves the 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 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 exceeding50%) or such duration exceeds 1 year (including 1 year), it shall be the sign of depreciation; if such difference reaches20% (including20%) to50%, 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 andit’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 inshareholder’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 inshareholder’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
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 has 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 does 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 inshareholder’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, thecompany’ s 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 financialliability’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 means of corresponding valuation technology. During the valuation process, the company 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. Whenit’s impossible or not feasible to obtain such observable input value, unobservable input value shall be put into service.
10. Receivables
Receivables include notes receivable, accounts receivable, interest receivable, and other accounts receivable. The accounts receivable caused from selling commodities or offering labor service by the Company and its subsidies regard the fair value of the contract or agreed price which should be accepted by buyer or labor service accepter as the amount of initial recognition.
(1) 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 the total accounts receivable, or the single amount is more than or equal|
|Definition or amount criteria for an account||
||to RMB10,000,000; the single amount of the other accounts receivable at the|
|receivable with a significant single amount||
||period-end 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 single||
||expected future cash flow lowers than its book value of the accounts receivable.|
|amount||

(2) 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:
√ Applicable□ Not applicable
||||
|-|-|-|
|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
(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 couldn’t withdraw the accountsaccording to the original articles of the accounts receivable.|
|Reason for bad debt provision||
||Executes the withdrawal according to the difference that the current value of theexpected future cash flow lowers than its book value of the accounts receivable.|
|Withdrawal method||

 The Company transfer the accounts receivables to financial institutions by right of no recourse, the difference between the book value that the transaction amount deduct the written off accounts receivables and related taxes should be recorded into current profit or loss
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 is 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 thecompany’s long-term equity investment made to the subsidiary. The subsidiary refers to the invested unit under thecompany’s control
The investment to the subsidiary shall be shown in thecompany’s financial statement based on the amount recognized through cost method, and consolidated after corresponding adjustment according to equity law when 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 theowner’s equity of the combined party 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 investedunit’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 investedunit’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 investedunit’s net loss, the long-term equityinvestment’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 stated in contingency standard are met, corresponding investment loss shall still be recognized and calculated as expected liability. As for other changes inowner’s equity of the invested unit except net profit and loss, other comprehensive revenue and profit distribution, the book value of long-tern equity investment shall be adjusted 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 thecompany’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 (16)).
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 conducts subsequent measurement of all investment properties in the model of cost, and depreciates or amortizes the buildings and land use rights according to their estimated useful life and net residual value. The estimated useful life, net residual value and annual depreciation (amortization) rate are as follows:
|||||
|-|-|-|-|
|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 (16)).
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 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 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
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. The estimated useful life, residual value, and annual depreciation rate of fixed assets are as follows:
||||||
|-|-|-|-|-|
|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%|
|Vehicles|Average method of useful life|5 years|5.00%|19%|
|Office and electronic|||||
||Average method of useful life|3-5 years|5.00%|19%-31.67%|
|equipments|||||

(c) 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 (16)).
(d) 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. Intangible assets
(1) Evaluation methods, useful life, impairment test
Intangible assets comprise land use rights, and non-patented technology and software etc, which are measured at cost.
(a) 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.
(b) Non-patented technology
Non-patented technology should be averagely amortized based on whichever is shorter among contract period, profits period and legally regulated period.
(c) Software
Software should be recorded based on the actual payment, and averagely amortized according to an estimated useful life of 3 to 5 years.
(d) 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.
e) 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 theR&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.
(f) 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 (16)).
16. Impairment of long-term assets
Fixed assets, intangible assets with limited life, investment properties measured at cost, and long-term 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.
17. 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.
18. Employee salary
(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 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;
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.
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 whohaven’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 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.
19. Dividends distribution
Cash dividend is confirmed as liability when it is approved by General Meeting of Shareholders.
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 enterprise's own, the parent company 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 itssubsidiaries’ stock option plan shall be measured at the fair value of the equity instruments granted to the employees. As for a 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. 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 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 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 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
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 itssubsidiaries’ 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 theship’ 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
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. 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. 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.
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 the||
|VAT|balance after the taxable sales multiply the applicable tax rate then deduct the|17% or 11% or 6%|
||input tax which allowed to be deduct at the Reporting Period)||
|Consumption tax|Taxable turnover|5%|
|Urban maintenance and|||
||Paid VAT|7% or 5%|
|construction tax|||
|Enterprise income tax|Payable income tax amount|15% or 25% or 17%|

 2. Tax preference
Based on the relevant regulations of the No. 28 articles of the Enterprise Income Law of thePeople’s Republic of China, the payment of the corporate income tax of the Company, Hefei Midea Washing Machine, Wuxi Little Swan GE Co., Ltd. and Wuxi Filin Electronics Co. Ltd. should be measured according to the15% 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 lasts for 3 years.
In July 2014, the subsidiary Hefei Media Washing Machine Co., Ltd. got the High Technology Enterprises Certificate (certificate No.: GR201434000147) issued by Anhui Science and Technology Development, Department of Finance of Anhui Province, Anhui Provincial Office, SAT and Anhui Local Taxation Bureau after the re-examination with the period of validity lasts for 3 years. The Company applied for High Technology Enterprises this year again, which is under the process of examination and approval. All indicators of the Company meet the application criteria. Income tax expense was still calculated by income tax rate15% this period.
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 lasts 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 lasts for 3 years.
The applicable Singapore corporate income tax rate of the subsidiary Little Swan International (Singapore) Co.,
Ltd is17%.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank deposits|3,096,982,558.92|4,171,689,917.21|
|Other monetary funds|327,116,748.85|100,387,293.90|
|Total|3,424,099,307.77|4,272,077,211.11|
|Of which: total amount of the accounts deposited abroad|560,838.28|594,128.38|

 On June 30, 2017, the bank acceptance deposit of the other monetary funds was of RMB 318,706,368.59, and the credit guarantee of RMB 4,266,667.92, and the forward settlement deposit was RMB4,143,712.34.（On December 31, 2016, the bank acceptance deposit of the other monetary funds was of RMB 93,781,938.00,and the credit guarantee of RMB6,605,355.90.）
2. Financial assets measured by fair value with its changes recorded into current profit or loss.
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Transactional financial assets|4,917,873.13||
|Derivative financial assets|4,917,873.13||
|Total|4,917,873.13||

3. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|1,878,193,045.31|1,297,609,202.29|
|Total|1,878,193,045.31|1,297,609,202.29|

 (2) Notes receivable which had endorsed by the Company or had discounted and had 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|2,033,415,360.22||

|||
|-|-|
|Total|2,033,415,360.22|

4. Accounts receivable
(1) Accounts receivable disclosed by category
Unit:RMB’0,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||||||||
||||||||||Withdraw||
|||Proporti||wal|Book value||Proportion|||Book value|
||Amount||Amount|||Amount||Amount|al||
|||on||proporti|||||||
||||||||||proportion||
|||||on|||||||
|Accounts|||||||||||
|receivable|||||||||||
|withdrawn bad|||||||||||
|debt provision|170,767.38|100.00%|8,538.37|5.00%|162,229.01|154,279.86|100.00%|7,714.41|5.00%|146,565.45|
|according to|||||||||||
|credit risks|||||||||||
|characteristics|||||||||||
|Total|170,767.38|100.00%|8,538.37|5.00%|162,229.01|154,279.86|100.00%|7,714.41|5.00%|146,565.45|

 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:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Within 1 year|1,707,673,812.08|85,383,690.63|5.00%|
|Total|1,707,673,812.08|85,383,690.63|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
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB8,239,553.90；the
amount of the reversed or collected part during the reporting period was of RMB 0.00.
(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Unit: RMB
|||||
|-|-|-|-|
|||Balance of the bad debt|Proportion of the total balance of the|
|Item|Balance|||
|||provision|accounts receivable|
|Total amount of balance of the top||||
||1,179,743,087.11|58,987,154.37|69.08%|
|5 accounts receivable||||

5. Prepayment
(1) List by aging analysis:
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|116,892,117.19|95.81%|131,513,792.18|100.00%|
|1 to 2 years|5,112,357.21|4.19%|||
|Total|122,004,474.40|--|131,513,792.18|--|

(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
Unit: RMB
||||
|-|-|-|
|Item|Balance|Proportion of the total amount of the prepayments|
|Total amount of the top 5 of the balance of the|||
||45,710,909.66|37.47%|
|prepayments|||

6. Interests receivable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank deposits|55,176,400.57|26,755,807.07|
|Total|55,176,400.57|26,755,807.07|

 7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit:RMB’0,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category||||Withdrawa|Book||||Withdraw||
|||Proporti||||||||Book value|
||Amount||Amount|l|value|Amount|Proportion|Amount|al||
|||on|||||||||
|||||proportion|||||proportion||
|Other accounts|||||||||||
|receivable|||||||||||
|withdrawn bad|||||||||||
|debt provision|1,047.70|100.00%|93.46|8.92%|954.23|2,530.73|100.00%|161.34|6.38%|2,369.39|
|according to|||||||||||
|credit risks|||||||||||
|characteristics|||||||||||
|Total|1,047.70|100.00%|93.46|8.92%|954.23|2,530.73|100.00%|161.34|6.38%|2,369.39|

 Other closing accounts receivable 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:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Within 1 year|8,373,021.65|418,651.08|5.00%|
|1 to 2 years|1,069,900.00|106,990.00|10.00%|
|2 to 3 years|540,200.00|162,060.00|30.00%|
|Over 3 years|493,854.80|246,927.40|50.00%|
|Total|10,476,976.45|934,628.48||

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) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB-678,816.30；the
amount of the reversed or collected part during the reporting period was of RMB 0.00.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin &cash pledge|2,103,758.00|2,018,096.36|
|Advance money for another or provision|4,269,715.11|14,330,097.53|
|Employee loan|4,055,248.53|2,098,324.20|
|Other|48,254.80|6,860,813.23|
|Total|10,476,976.44|25,307,331.32|

 (4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the total||
|||||year-end balance of|Closing balance|
|Name of units|Nature|Closing balance|Aging|||
|||||the accounts|of bad debt|
|||||receivable|provision|
|Shenzhen Midea Payment||||||
||Provision|4,265,894.46|Within 1 year|40.72%|213,294.72|
|Technology Co., Ltd.||||||
|Wuxi China Resources Gas Co.,|Guarantee deposit &|||||
|||820,800.00|Within 1 year|7.83%|41,044.00|
|Ltd.|margin|||||
||Guarantee deposit &||Within 1|||
|Hefei Gas Group Co., Ltd.||270,000.00||2.58%|13,500.00|
||margin||year|||
|Wuxi Golden Sunshine Property|Guarantee deposit &||Within 1|||
|||50,400.00||0.48%|2,520.00|
|Management Co., Ltd.|margin||year|||
|Alipay (China) Network|Guarantee deposit &||Within 1|||
|||185,000.00||1.77%|9,250.00|
|Technology Co., Ltd.|margin||year|||
|Total|--|5,592,094.46|--||279,608.72|

 8. Inventory
(1) Category of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw materials|28,144,752.00|1,593,768.57|26,550,983.43|21,928,651.09|1,593,768.57|20,334,882.52|

||||||||
|-|-|-|-|-|-|-|
|Goods in process|13,117,338.79||13,117,338.79|11,864,254.41||11,864,254.41|
|Inventory goods|1,096,300,872.13|51,518,212.57|1,044,782,659.56|1,768,281,418.69|75,642,610.93|1,692,638,807.76|
|Total|1,137,562,962.92|53,111,981.14|1,084,450,981.78|1,802,074,324.19|77,236,379.50|1,724,837,944.69|

 (2) Falling price reserves of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||Increased amount||Decreased amount|||
|Item|Opening balance|||Reverse or||Closing balance|
|||Withdrawal|Other||Other||
|||||write-off|||
|Raw materials|1,593,768.57|||||1,593,768.57|
|Inventory goods|75,642,610.93|26,185,813.40||50,310,211.76||51,518,212.57|
|Total|77,236,379.50|26,185,813.40||50,310,211.76||53,111,981.14|

 9. Other current assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Structured deposits|2,700,000,000.00|2,150,000,000.00|
|Financial products|5,976,013,434.56|5,994,142,671.24|
|Input tax to be deducted and certified|86,521,810.57|197,355,573.10|
|Other|42,048,811.22|44,226,037.82|
|Total|8,804,584,056.35|8,385,724,282.16|

 10. Available-for-sale financial assets
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Available-for-sale equity|||||||
||200,000.00||200,000.00|200,000.00||200,000.00|
|instruments:|||||||
|Measured at cost|200,000.00||200,000.00|200,000.00||200,000.00|
|Total|200,000.00||200,000.00|200,000.00||200,000.00|

11. Investment property
(1) Investment property adopted the cost measurement mode
Unit: RMB
||||||
|-|-|-|-|-|
||Houses and||Construction in||
|Item||Land use right||Total|
||buildings||progress||
|I. Original book value|||||
|1. Opening balance|88,189,256.96|22,949,959.07||111,139,216.03|
|2. Increased amount of the period|||||
|(1) Outsourcing|||||
|(2) Transfer of inventory\fixed|||||
|assets\project under construction|||||
|(3) Enterprise combination increase|||||
|3. Decreased amount of the period|||||
|(1) Disposal|||||
|(2) Other|||||
|4. Closing balance|88,189,256.96|22,949,959.07||111,139,216.03|
|II. Accumulative depreciation and|||||
|accumulative amortization|||||
|1. Opening balance|27,737,836.01|5,970,411.48||33,708,247.49|
|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. Closing balance|29,387,977.55|6,246,323.94||35,634,301.49|
|III. Depreciation reserves|||||
|1. Opening 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. Closing balance|12,576,065.29|||12,576,065.29|
|IV. Book value|||||

|||||
|-|-|-|-|
|1. Closing book value|46,225,214.12|16,703,635.13|62,928,849.25|
|2. Opening book value|47,875,355.66|16,979,547.59|64,854,903.25|

 12. Fixed assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic||
|Item|||||Total|
||buildings|equipment|equipment|equipment||
|I. Original book value||||||
|1. Opening balance|733,926,399.80|910,910,022.64|27,625,534.23|118,527,502.83|1,790,989,459.50|
|2. Increased amount of||||||
||2,152,072.08|57,733,042.27|2,165,077.78|10,537,983.62|72,588,175.75|
|the period||||||
|(1) Purchase|2,152,072.08|57,733,042.27|2,165,077.78|10,537,983.62|72,588,175.75|
|(2) Transfer from||||||
|project under construction||||||
|(3) Enterprise||||||
|combination increase||||||
|3. Decreased amount of||||||
|||12,018,458.96|1,072,087.49|4,386,731.89|17,477,278.34|
|the period||||||
|(1) Disposal or Scrap||12,018,458.96|1,072,087.49|4,386,731.89|17,477,278.34|
|4. Closing balance|736,078,471.88|956,624,605.95|28,718,524.52|124,678,754.56|1,846,100,356.91|
|II. Accumulative||||||
|depreciation||||||
|1. Opening balance|197,526,047.87|491,410,620.88|23,497,411.01|91,329,723.22|803,763,802.98|
|2. Increased amount of||||||
||15,583,780.02|39,511,660.65|553,145.53|7,022,579.62|62,671,165.82|
|the period||||||
|(1) Withdrawal|15,583,780.02|39,511,660.65|553,145.53|7,022,579.62|62,671,165.82|
|3. Decreased amount of||||||
|||8,831,385.59|998,870.02|4,024,385.92|13,854,641.53|
|the period||||||
|(1) Disposal or Scrap||8,831,385.59|998,870.02|4,024,385.92|13,854,641.53|
|4. Closing balance|213,109,827.89|522,090,895.94|23,051,686.52|94,327,916.92|852,580,327.27|
|III. Depreciation reserves||||||
|1. Opening balance|3,918,452.47|12,312,885.38|35,494.21|99,533.43|16,366,365.49|
|2. Increased amount of||||||
|||3,143,379.56|||3,808,897.38|
|the period||||||
|(1) Withdrawal||3,808,897.38|||3,808,897.38|
|3. Decreased amount of||4,039,591.33|4,871.81|29,031.13|4,739,012.09|

|||||||
|-|-|-|-|-|-|
|the period||||||
|(1) Disposal or Scrap||4,705,109.15|4,871.81|29,031.13|4,739,012.09|
|4. Closing balance|3,918,452.47|11,416,673.61|30,622.40|70,502.30|15,436,250.78|
|IV. Book value||||||
|1. Closing book value|519,050,191.52|423,117,036.40|5,636,215.60|30,280,335.34|978,083,778.86|
|2. Opening book value|532,481,899.46|407,186,516.38|4,092,629.01|27,098,246.18|970,859,291.03|

 13. Construction in progress
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Automatic stamping riveting|||||||
||168,565.57||168,565.57||||
|line of roller cabinet|||||||
|Riveting machine|8,014.42||8,014.42||||
|Total|176,579.99||176,579.99||||

14. Intangible assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patents|Others|Total|
|I. Original book value||||||
|1. Opening balance|242,666,890.39||1,992,000.00|1,395,014.56|246,053,904.95|
|2. Increased amount of||||||
|the period||||||
|(1) Purchase||||||
|(2) Internal R&D||||||
|(3) Enterprise||||||
|combination increase||||||
|3. Decreased amount of||||||
||||1,992,000.00||1,992,000.00|
|the period||||||
|(1) Disposal|||1,992,000.00||1,992,000.00|
|4. Closing balance|242,666,890.39|||1,395,014.56|244,061,904.95|
|II. Accumulated||||||
|amortization||||||
|1. Opening balance|50,383,404.24||1,992,000.00|1,395,014.56|53,770,418.80|

||||||
|-|-|-|-|-|
|2. Increased amount of|||||
||2,619,069.42|||2,619,069.42|
|the period|||||
|(1) Withdrawal|2,619,069.42|||2,619,069.42|
|3. Decreased amount of|||||
|||1,992,000.00||1,992,000.00|
|the period|||||
|(1) Disposal||1,992,000.00||1,992,000.00|
|4. Closing balance|53,002,473.66||1,395,014.56|54,397,488.22|
|III. Depreciation reserves|||||
|1. Opening balance|||||
|2. Increased amount of|||||
|the period|||||
|(1) Withdrawal|||||
|3. Decreased amount of|||||
|the period|||||
|(1) Disposal|||||
|4. Closing balance|||||
|IV. Book value|||||
|1. Closing book value|189,664,416.73|||189,664,416.73|
|2. Opening book value|192,283,486.15|||192,283,486.15|

 15. Long-term unamortized expenses
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||Amortization|||
|Item|Opening balance|Increased amount||Decrease|Closing balance|
||||amount|||
|IT consulting fee|213,527.80|867,924.46|305,763.80||775,688.46|
|Fixed assets reform|4,174,200.34|1,526,699.07|1,376,084.72||4,324,814.69|
|Total|4,387,728.14|2,394,623.53|1,681,848.52||5,100,503.15|

 16. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|146,318,376.04|21,947,756.41|160,340,693.36|24,051,104.00|

||||||
|-|-|-|-|-|
|provision|||||
|Internal unrealized profit|40,295,923.45|6,044,388.52|67,442,606.20|10,116,390.93|
|Remuneration and|||||
||15,477,872.17|2,321,680.83|17,699,114.41|2,654,867.16|
|dismiss expense|||||
|Accrued expenses|2,183,800,178.16|327,570,026.72|1,844,401,155.54|276,660,173.33|
|Accrued liabilities|1,675,596.14|251,339.42|1,727,340.89|259,101.13|
|Deferred income|||||
||2,715,733.23|407,359.98|2,942,333.25|441,349.99|
|(government subsidy)|||||
|Investment differences|8,782,955.88|1,317,443.38|8,782,955.88|1,317,443.38|
|Total|2,399,066,635.07|359,859,995.26|2,103,336,199.53|315,500,429.92|

 (2) Deferred income tax liabilities had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Change in fair value of|||||
|available-for-sale|66,013,434.56|9,902,015.18|104,142,671.24|15,621,400.69|
|financial assets|||||
|Evaluation of trading|||||
||4,917,873.13|737,680.97|||
|financial instruments|||||
|Total|70,931,307.69|10,639,696.15|104,142,671.24|15,621,400.69|

 (3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred|Mutual set-off amount of|Amount of deferred|
||deferred income tax|income tax assets or|deferred income tax|income tax assets or|
|Item|||||
||assets and liabilities at|liabilities after off-set at|assets and liabilities at|liabilities after off-set at|
||the period-end|the period-end|the period-begin|the period-begin|
|Deferred income tax||349,220,299.11||299,879,029.23|
|assets|||||

(4) List of unrecognized deferred income tax assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary difference|20,862,394.55|27,153,343.58|

||||
|-|-|-|
|Deductible losses|81,524,175.60|81,177,769.43|
|Total|102,386,570.15|108,331,113.01|

 (5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB
|||||
|-|-|-|-|
|Years|Closing amount|Opening amount|Notes|
|Y2017|57,917.22|57,917.22||
|Y2018|16,303,166.71|16,303,166.71||
|Y2019|49,620,940.42|49,620,940.42||
|Y2020|9,576,983.63|9,576,983.63||
|Y2021|5,965,167.62|5,618,761.45||
|Total|81,524,175.60|81,177,769.43|--|

17. Other non-current assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepayment for equipment|64,654,141.02|25,655,775.90|
|Total|64,654,141.02|25,655,775.90|

 18. Short-term loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Trade financing|170,000,000.00|183,813,064.12|
|Total|170,000,000.00|183,813,064.12|

 19. Notes payable
Unit: RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance bill|3,014,675,255.37|2,620,549,815.47|
|Total|3,014,675,255.37|2,620,549,815.47|

 The total amount of the due but not pay notes payable at the period-end was of RMB000.
20. Accounts payable
(1) List of accounts payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Material|3,399,811,330.44|3,301,435,137.79|
|Other|47,659,362.43|33,654,534.27|
|Total|3,447,470,692.87|3,335,089,672.06|

 (2) Notes of the accounts payable aging over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|||Unsettled due to the agreement of|
|Material|55,267,497.97||
|||contract|
|Total|55,267,497.97|--|

21. Advance from customers
(1) List of advance from customers
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Advance from goods|1,673,007,411.95|3,014,347,762.24|
|Total|1,673,007,411.95|3,014,347,762.24|

 (2) Significant advance from customers aging over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Advance from goods|30,387,187.91|Unsettled advance from goods|
|Total|30,387,187.91|--|

22. Payroll payable
(1) List of Payroll payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

||||||
|-|-|-|-|-|
|I. Short-term salary|262,689,682.47|526,908,328.33|564,801,061.29|224,796,949.51|
|II. Post-employment|||||
|benefit-defined contribution|21,767,369.86|35,378,872.35|49,281,788.29|7,864,453.92|
|plans|||||
|III. Termination benefits|4,135,110.96|4,153,570.68|4,375,044.30|3,913,637.34|
|Total|288,592,163.29|566,440,771.36|618,457,893.88|236,575,040.77|

 (2) List of Short-term salary
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus, allowance,|||||
||239,077,184.04|443,711,216.41|490,074,351.27|192,714,049.18|
|subsidy|||||
|2. Employee welfare|4,873,935.81|37,897,571.75|29,031,331.91|13,740,175.65|
|3. Social insurance|6,169,696.09|20,459,370.44|22,914,420.36|3,714,646.17|
|Of which: Medical|||||
||5,179,907.00|16,407,140.37|18,483,109.65|3,103,937.72|
|insurance premiums|||||
|Work-related injury|||||
||728,121.47|2,805,994.11|3,085,812.41|448,303.17|
|insurance|||||
|Maternity insurance|261,667.62|1,246,235.96|1,345,498.30|162,405.28|
|4. Housing fund|7,166,552.24|15,181,948.56|15,185,970.92|7,162,529.88|
|5. Labor union budget and|||||
||5,402,314.29|9,658,221.17|7,594,986.83|7,465,548.63|
|employee education budget|||||
|Total|262,689,682.47|526,908,328.33|564,801,061.29|224,796,949.51|

 (3) List of drawing scheme
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Basic pension benefits|21,014,944.34|33,200,098.02|46,778,566.84|7,436,475.52|
|2. Unemployment|||||
||752,425.52|2,178,774.33|2,503,221.45|427,978.40|
|insurance|||||
|Total|21,767,369.86|35,378,872.35|49,281,788.29|7,864,453.92|

 23. Taxes payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

||||
|-|-|-|
|VAT|7,335,659.81|43,959,339.80|
|Corporate income tax|318,457,471.59|317,599,561.26|
|Urban maintenance and construction tax|3,833,088.85|9,810,227.91|
|House appliance recycling funds|23,973,012.00|22,600,123.00|
|Education Surcharge|2,323,444.93|7,604,254.32|
|Other|12,255,609.42|10,664,523.67|
|Total|368,178,286.60|412,238,029.96|

 24. Dividends payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Common stock dividends|9,338,224.06|7,150,684.06|
|Total|9,338,224.06|7,150,684.06|

 25. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Payment for equipment|58,036,255.38|65,358,163.79|
|Payment for mold|89,418,261.55|84,354,267.87|
|Subsidy of energy saving & benefit the|||
||6,140,000.00|6,140,000.00|
|people|||
|Payment made on behalf|28,565,146.16|7,782,998.86|
|Margin & cash pledged|18,326,206.88|20,631,583.91|
|Third party payment|4,730,592.00|5,410,822.47|
|Others|19,475,179.75|10,248,565.14|
|Total|224,691,641.72|199,926,402.04|

 (2) Other significant accounts payable with aging over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Payment of mold|67,237,965.46|unsettled due to the agreement of contract|
|Payment of equipment|32,040,012.94|unsettled due to the agreement of contract|

||||
|-|-|-|
|Total|99,277,978.40|--|

26. Other current-liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Accrued expenses-sale rebate|1,190,023,904.88|1,095,875,998.29|
|Accrued expenses-sales promotional expense|404,629,336.46|223,209,831.40|
|Accrued expenses-shipping and handling charges|152,520,431.73|139,146,303.25|
|Accrued expenses-maintenance and installation charges|286,555,569.65|248,172,966.72|
|Accrued expenses-brand royalty|7,041,545.66|14,192,875.86|
|Accrued expenses-waste household appliance|||
||7,268,238.00|15,830,282.99|
|maintenance funds|||
|Accrued expenses-other|135,775,989.26|107,984,895.75|
|Total|2,183,815,015.64|1,844,413,154.26|

 27. Long-term payroll payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Termination benefits|13,693,727.01|16,101,348.60|
|Total|13,693,727.01|16,101,348.60|

 28. Estimated liabilities
Unit: RMB
|||||
|-|-|-|-|
|Item|Closing balance|Opening balance|Formed reason|
|Product quality assurance|1,675,596.14|1,727,340.89||
|Total|1,675,596.14|1,727,340.89|--|

29. Deferred revenue
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formed reason|
|Government|||||Government|
||2,942,333.25||226,600.02|2,715,733.23||
|subsidies|||||subsidies|
|Total|2,942,333.25||226,600.02|2,715,733.23|--|

Item involving government subsidies:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount||||
||||recorded into||||
|||Amount of||||Related to|
||||non-operating|Other|Closing||
|Item|Opening balance|newly||||assets/related|
||||income in|changes|balance||
|||subsidy||||income|
||||Reporting||||
||||Period||||
|Hefei Midea Washing Machine|||||||
|||||||Related to|
|Automation promotion & technological|2,683,333.25||175,000.02||2,508,333.23||
|||||||assets|
|upgrading projects|||||||
|||||||Related to|
|Subsidies of substation reformation|132,800.00||25,200.00||107,600.00||
|||||||assets|
|Special guide subsidies of modern||||||Related to|
||126,200.00||26,400.00||99,800.00||
|service industry development||||||assets|
|Total|2,942,333.25||226,600.02||2,715,733.23|--|

 30. Share capital
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Opening|||Capitalized|||Closing|
|||New shares||||||
||balance||Bonus shares|Capital|Others|Subtotal|balance|
|||issued||||||
|||||reserves||||
|The sum ofshares|632,487,764.00||||||632,487,764.00|

31. Capital surplus
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Capital premium|||||
||1,055,182,718.57|||1,055,182,718.57|
|(premium on stock)|||||
|Other capital reserves|136,307,414.44|23,481,320.87||159,293,057.25|
|Total|1,191,490,133.01|23,481,320.87||1,214,971,453.88|

 32. Other comprehensive income
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Openingbalance|Reporting Period|||||Closing|
|Item||||||||
|||Amount|Less: recorded|Less: Income|Attributable to|Attributable to|balance|

|||||||||
|-|-|-|-|-|-|-|-|
|||before income|in other|tax expense|owners of the|minority||
|||tax in current|comprehensive||Company after|shareholders||
|||period|income in prior||tax|after tax||
||||period and|||||
||||transferred to|||||
||||profit or loss in|||||
||||current period|||||
|I. Other|||||-27,421,035.91|||
|comprehensive||||||||
||70,757,524.61|66,007,008.01|104,142,671.23|-5,719,385.50||-4,995,241.81|43,336,488.70|
|reclassified into||||||||
|profits or losses||||||||
|Of which:|||||-27,414,609.36|||
|profits or losses||||||||
|of change in fair||||||||
||72,957,918.08|66,013,434.56|104,142,671.23|-5,719,385.50||-4,995,241.81|45,543,308.72|
|value of||||||||
|available-for-sal||||||||
|e financial assets||||||||
|Converted|||||-6,426.55|||
|difference of the||||||||
|foreign currency|-2,200,393.47|-6,426.55|||||-2,206,820.02|
|financial||||||||
|statement||||||||
|Total|70,757,524.61|66,007,008.01|104,142,671.23|-5,719,385.50|-27,421,035.91|-4,995,241.81|43,336,488.70|

 33. Surplus reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus reserves|332,594,722.29|||332,594,722.29|
|Total|332,594,722.29|||332,594,722.29|

 34. Retained profits
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Last period|
|Opening balance of retained profits before adjustments|3,756,517,718.81|2,960,955,454.36|
|Opening balance of retained profits after adjustments|3,756,517,718.81|2,960,955,454.36|
|Add: Net profit attributable to owners of the Company|731,539,923.36|580,826,562.58|
|Less: dividend of common stock payable|474,365,822.97|379,492,658.40|
|Closing retained profits|4,013,692,398.30|3,162,289,358.54|

List of adjustment of opening retained profits:
(1) RMB0.00 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 opening retained profits was affected by changes on accounting policies.
(3) RMB0.00 opening retained profits was affected by correction of significant accounting errors.
(4) RMB0.00 opening retained profits was affected by changes in combination scope arising from same control. (5) RMB0.00 opening retained profits was affected totally by other adjustments.
35. Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|9,694,560,835.56|7,052,479,498.41|7,327,207,677.60|5,281,634,736.14|
|Other operations|873,500,018.65|808,892,313.37|657,579,517.32|530,957,037.53|
|Total|10,568,060,854.21|7,861,371,811.78|7,984,787,194.92|5,812,591,773.67|

 36. Business tax and surcharges
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Urban maintenance and construction tax|29,091,665.44|25,211,378.27|
|Education Surcharge|22,058,158.72|19,309,415.68|
|Real estate tax|4,873,849.64||
|Land use tax|3,677,575.99||
|Vehicle and vessel use tax|75,448.42||
|Stamp duty|4,755,575.53||
|Business tax||203,083.51|
|Total|64,532,273.74|44,723,877.46|

 37. Sales expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Sales expenses|1,533,889,871.40|1,191,332,056.12|
|Total|1,533,889,871.40|1,191,332,056.12|

38. Administrative expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Administrative expenses|328,163,105.40|265,946,054.68|
|Total|328,163,105.40|265,946,054.68|

 39. Financial expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest expenses|5,897,953.01|7,327,975.82|
|Less: Interest income|63,840,314.80|65,265,736.10|
|Add: exchange loss|30,775,819.93|-11,313,331.62|
|Others|3,643,344.03|5,851,627.44|
|Total|-23,523,197.84|-63,399,464.47|

 40. Asset impairment loss
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|I. Bad debt loss|7,560,737.61|11,954,355.73|
|II. Inventory falling price loss|26,185,813.40|13,631,207.32|
|III. Fixed assets impairment losses|3,808,897.38|2,348,226.39|
|Total|37,555,448.39|27,933,789.44|

 41. Gains on the changes in the fair value
Unit: RMB
||||
|-|-|-|
|Sources|Reporting Period|Same period of last year|
|Financial assets measured by fair value and the changes be|||
||4,917,873.13||
|included in the current profits and losses|||
|Of which, gains on the changes in the fair value of derivative|||
||4,917,873.13||
|financial instruments|||
|Total|4,917,873.13||

42. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Investment income received from disposal of financial assets|||
|measured by fair value and the changes be included in the current|2,654,220.00||
|profits and losses during holding period|||
|Investment income received from available-for-sale financial|||
||90,043,497.77||
|assets during the holding period|||
|Investment income received from disposal of available-for-sale|||
||88,968,164.34|67,315,479.04|
|financial assets|||
|Total|181,665,882.11|67,315,479.04|

 43. Other income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|same period of last year|
|VAT refund upon collection|15,806,553.77||

44. Non-operating gains
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Total gains from disposal of|4,578,714.70|116,837.67||
||||4,578,714.70|
|non-current assets||||
|Including: Gains from disposal||||
||4,578,714.70|116,837.67|4,578,714.70|
|of fixed assets||||
|Government subsidies|8,072,556.77|19,387,917.07|8,072,556.77|
|Claims and fine|2,564,637.29|1,925,692.15|2,564,637.29|
|Others|407,844.54|55,538.87|407,844.54|
|Total|15,623,753.30|21,485,985.76|15,623,753.30|

 Government subsidies recorded into current profits and losses
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||subsidies|||||
||||||Special|||Related to|
||Distribution|Distribution||influence the||Reporting|Last||
|Item|||Nature||subsidy|||assets/related|
||entity|reason||current||period|period||
||||||or not|||income|
|||||profits and|||||
|||||losses or not|||||
|VAT|Wuxi New|Subsidy|Due to engaged|No|No||11,946,875.24|Related to the|

||||||||||
|-|-|-|-|-|-|-|-|-|
|refund|District Tax||in special|||||income|
|upon|Sub Bureau||industry that the||||||
|collection|||state encouraged||||||
||||and supported,||||||
|Foreign|||gained subsidy||||||
|trade and|||(obtaining in||||||
||Finance Bureau|||||||Related to the|
|economic||Subsidy|line with the law|No|No|926,486.68|3,938,000.00||
||of Hefei|||||||income|
|support|||and the||||||
|fund|||regulations of||||||
||||national policy)||||||
||Economic and||||||||
||Information|||||||Related to the|
|Other||Award||No|No|7,146,070.09|3,503,041.83||
||Commission of|||||||income|
||Wuxi||||||||
|Total|--|--|--|--|--|8,072,556.77|19,387,917.07|--|

 45. Non-operating expenses
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Loss on disposal of non-current|2,254,629.17|238,583.97||
||||2,254,629.17|
|assets||||
|Including: Loss on disposal of||||
||2,254,629.17|238,583.97|2,254,629.17|
|fixed assets||||
|Penalty|20,163.73||20,163.73|
|Others|804,864.96|199,673.37|804,864.96|
|Local fees (flood prevention||||
|||1,796,648.03||
|and security funds etc.)||||
|Total|3,079,657.86|2,234,905.37|3,079,657.86|

 46. Income tax expense
(1) Lists of income tax expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Current income tax expense|191,867,580.16|170,528,669.56|
|Deferred income tax expense|-43,621,884.38|-43,226,277.81|
|Total|148,245,695.78|127,302,391.75|

(2) Adjustment process of accounting profit and income tax expense:
Unit: RMB
|||
|-|-|
|Item|Reporting Period|
|Total profits|981,005,945.79|
|Current income tax expense accounted by tax and relevant||
||147,150,891.87|
|regulations||
|Influence of income tax before adjustment|-2,543,012.82|
|Influence of not deductable costs, expenses and losses|3,637,816.73|
|Income tax expense|148,245,695.78|

 47. Other comprehensive income
Refer to the Note. 32.
48. Cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest income|18,617,988.30|30,792,096.72|
|Government subsidy|8,072,556.77|7,441,041.83|
|Claim & fine income|1,264,590.80|619,052.46|
|Others|18,536,975.82|6,661,612.22|
|Total|46,492,111.69|45,513,803.23|

 (2) Other cash paid relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Cash for payment of expenses|1,343,311,634.84|1,028,841,247.41|
|Others|1,138,477.96|9,142,858.79|
|Total|1,344,450,112.80|1,037,984,106.20|

 (3) Other cash received relevant to investment activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

||||
|-|-|-|
|Income from structured deposits interest|16,802,196.35|34,473,639.38|
|Total|16,802,196.35|34,473,639.38|

 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|832,760,250.01|664,923,275.70|
|Add: Provision for impairment of assets|37,555,448.39|27,933,789.44|
|Depreciation of fixed assets, of oil-gas assets, of productive|||
||64,952,458.10|63,102,659.92|
|biological assets|||
|Amortization of intangible assets|2,619,069.42|2,619,069.42|
|Long-term unamortized expenses|1,681,848.52|1,469,902.32|
|Losses on disposal of fixed assets, intangible assets and other|||
||-2,324,085.53|121,746.30|
|long-term assets (gains: negative)|||
|Losses from variation of fair value (gains: negative)|-4,917,873.13||
|Financial cost (gains: negative)|-10,904,243.34|-34,473,639.38|
|Investment loss (gains: negative)|-181,665,882.11|-67,315,479.04|
|Decrease in deferred income tax assets (gains: negative)|-44,359,565.36|-36,827,810.46|
|Increase in deferred income tax liabilities|||
||737,680.97||
|(“-” means decrease)|||
|Decrease in inventory (gains: negative)|614,201,149.52|134,845,643.10|
|Decrease in accounts receivable from operating activities (gains:|||
||-728,452,220.93|47,112,616.96|
|negative)|||
|Increase in payables from operating activities (decrease: negative)|-748,672,061.46|789,234,275.49|
|Others|24,377,334.69|14,351,343.11|
|Net cash flows generated from operating activities|-142,410,692.24|1,607,097,392.88|
|2. Significant investing and financing activities without|||
||--|--|
|involvement of cash receipts and payments|||
|3. Change of cash and cash equivalent:|--|--|
|Closing balance of cash|3,096,982,558.92|1,919,339,663.91|
|Less: Opening balance of cash|4,171,689,917.21|2,792,685,328.69|
|Net increase in cash and cash equivalents|-1,074,707,358.29|-873,345,664.78|

(2) Net cash received from the disposal of subsidiaries in Reporting Period
Unit: RMB
|||
|-|-|
||Amount|
|Cash or cash equivalents received currently from the disposal of||
||2,415,000.00|
|subsidiaries in Reporting Period||
|Net cash received from the disposal of subsidiaries|2,415,000.00|

 (3) Cash and cash equivalents
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|3,096,982,558.92|4,171,689,917.21|
|Of which: bank deposit on demand|3,096,982,558.91|4,171,689,917.21|
|II. Closing balance of cash and cash|3,096,982,558.92|4,171,689,917.21|
|equivalents|||

50. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Monetary capital||||
|Including: USD|90,007,743.84|6.7744|609,748,459.88|
|EUR|5,709,052.52|7.7496|44,242,873.41|
|JPY|15.00|0.0605|0.91|
|Account receivable||||
|Including: USD|23,512,644.42|6.7744|159,284,058.36|
|EUR|383,583.55|7.7496|2,972,619.08|

 (2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason.
□ Applicable√ Not applicable
VIII. Changes of merge scope
No such case in Reporting Period.
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main|||Holding percentage (%)|||
|||Registration|Nature of||||
|Name|operating|||||Way of gaining|
|||place|business|Directly|Indirectly||
||place||||||
|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|Singapore|Investment|100.00%||Setting-up|
|Co., Ltd.|||||||
|||||||Enterprise|
|Little Swan (Jingzhou) Electronic|||||||
||Jingzhou|Jingzhou|Production|100.00%||combination under|
|Appliances Co., Ltd.|||||||
|||||||same control|
|||||||Enterprise|
|Hefei Midea Washing Machine Co.,|||||||
||Hefei|Hefei|Production|69.47%||combination under|
|Ltd.|||||||
|||||||same control|

 (2) Significant not wholly owned subsidiary
Unit: RMB
||||||
|-|-|-|-|-|
|||The profits and losses|Declaring dividends|Balance of minority|
||Shareholding proportion||||
|Name||arbitrate to the minority|distribute to minority|shareholder at closing|
||of minority shareholder||||
|||shareholders|shareholder|period|
|Wuxi Filin Electronics Co. ,|||||
||27.00%|30,162,017.39||230,462,456.37|
|Ltd.|||||
|Hefei Midea Washing|||||
||30.53%|71,057,730.15||841,905,267.91|
|Machine Co., Ltd.|||||

(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|Name||Non-current|||Non-current|||Non-current|||Non-current||
||Current assets||Total assets|Current liabilities||Total liabilities|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||liability|||assets|||liability||
|Hefei|||||||||||||
|Midea|||||||||||||
|Washin|||||||||||||
|g|7,137,927,082.09|694,918,206.35|7,832,845,288.44|5,066,786,096.31|8,426,477.09|5,075,212,573.40|6,955,889,821.64|648,846,122.85|7,604,735,944.49|5,049,130,635.42|16,969,489.50|5,066,100,124.92|
|Machin|||||||||||||
|e Co.,|||||||||||||
|Ltd.|||||||||||||
|Wuxi|||||||||||||
|Filin|||||||||||||
|Electro|||||||||||||
||1,247,171,639.36|63,993,624.74|1,311,165,264.10|457,393,210.85|207,400.00|457,600,610.85|1,203,071,028.74|51,610,150.79|1,254,681,179.53|512,934,442.62|259,000.00|513,193,442.62|
|nics|||||||||||||
|Co. ,|||||||||||||
|Ltd.|||||||||||||

Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting Period||||Same period of last year||||
|Name|||Total comprehensive||||Total comprehensive||
||Operation revenue|Net profit||Operating cash flow|Operation revenue|Net profit||Operating cash flow|
||||income||||income||
|Hefei Midea Washing|||||||||
||4,466,744,621.89|232,747,232.72|216,385,484.40|-355,645,784.85|3,490,739,131.29|183,744,563.10|193,637,968.84|1,307,170,946.87|
|Machine Co., Ltd.|||||||||
|Wuxi Filin Electronics|||||||||
||453,158,452.21|111,711,175.53|111,711,175.53|-72,814,995.54|330,094,718.79|93,010,763.35|93,010,763.35|11,960,170.45|
|Co. , Ltd.|||||||||

X. Segment information
Since theCompany’s operating revenue, expenses, 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 variouscompanies’ 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|The first half of 2017|The first half of 2016|
|China|7,501,628,908.80|5,797,358,361.67|
|Other countries|2,192,931,926.76|1,529,849,315.93|
|Total|9,694,560,835.56|7,327,207,677.60|

 (2) Total non-current assets
Unit: RMB
||||
|-|-|-|
|Region|June 30, 2017|Dec 31, 2016|
|China|1,300,608,269.00|1,258,041,184.47|
|Other countries|||
|Total|1,300,608,269.007|1,258,041,184.47|

 XI. The risk related 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 Company and its subsidiary overall risk management plan considering the unpredictability of financial market, aim to reduce the potential negative influence to the financial results of the Company and its subsidiaries.
(1) Market risk
(a) Foreign exchange risk
The main operation of the Company and its subsidiary 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 subsidiary had recognized existing foreign exchange risk. The Company's headquarter financial department supervise the scope of foreign assets, liabilities and foreign trade in future of the Company and its subsidiary to maximally reduce foreign exchange risk , thus the Company and its subsidiary will avoid foreign exchange rate in a way of signing forward foreign exchange contract or currency exchange contract.
On 30 June 2017 and 31 December 2016, the lists of foreign financial assets and foreign financial liabilities discounted into RMB held by Company and its subsidiary were as following:
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Item||||
||Item|Other foreign currency|Total|
|Foreign financial assets||||
|Monetary capital|609,748,459.88|44,242,874.32|653,991,334.20|
|Accounts receivable|169,382,140.50|3,674,235.16|173,056,375.66|
|Total|779,130,600.38|47,917,109.48|827,047,709.86|
|Foreign financial liabilities||||
|Payable|10,098,082.14|701,616.08|10,799,698.22|
||Opening balance|||
|Item||||
||Item|Other foreign currency|Total|
|Foreign financial assets||||
|Monetary capital|857,223,958.85|40,989,790.78|898,213,749.63|
|Accounts receivable|538,217,122.83|29,781,044.92|567,998,167.75|
|Total|1,395,441,081.68|70,770,834.81|1,466,211,916.49|
|Foreign financial liabilities||||
|Payable|51,256,695.66|809,036.96|52,065,732.62|

 On June 30, 2017, if RMB appreciates or depreciates by7% without any changes in other factors, for all kinds of US financial assets and liabilities, there will be an decrease and increase in net consolidated profits of about RMB45,757,000 (about RMB79,980,000 on Dec 31, 2016).
(b) Interest rate risk
On 30 June 2017 and 31 December 2016, there was no short term or long-term interest-bearing debt contracts of floating interest rate in the Company and its subsidiary, thus the management believe that there was not existing significant interest rate risk.
(2) Credit risk
The Company and its subsidiary adopt group classification to manage the credit risk. Credit risk mainly incurred
in bank deposit, account receivable, other account receivable, note receivable, structure deposit, and financial products recorded into other current assets, etc..
The bank deposits and structure deposit of the Company and its subsidiary were deposit in the state-owned banks and other large and medium-sized commercial banks, the Company believe 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 subsidiary entrust commercial bank, trust company, assets management company and other financial institutions to conduct short term low risk finance investment, participate in bank finance 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 subsidiary used for trust investment, not 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 account receivable, other account receivable and note receivable, the Company and its subsidiary set relevant policy to control credit risk exposure. The Company and its subsidiary, base on the financial situation of the client, 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 subsidiary regularly supervise the credit record of client, as for the client with bad credit records, the Company and its subsidiary 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 2016, there was no significant overdue account receivable
(3) Liquidity risk
The Company and its subsidiary response for its cash flow prediction The head financial department base on collecting cash flow prediction of each subsidiary, and at combination level continuously supervise short term and long term capital need to ensure maintain plenty of cash reserve and securities can be realized at any time. On balance sheet date, each financial liabilities listed by un-discounted contract cash flow according to date were as following:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||June 30, 2017|||||
|Item||||||
||Within 1 year|1-2 years|2-5 years|Over 5 years|Total|
|Notes payable|3,014,675,255.37||||3,014,675,255.37|
|Accounts payable|3,447,470,692.87||||3,447,470,692.87|
|Dividends payable|9,338,224.06||||9,338,224.06|
|Other|2,183,815,015.64||||2,183,815,015.64|
|current-liabilities||||||
|Other account|224,691,641.72||||224,691,641.72|

|||||||
|-|-|-|-|-|-|
|payable||||||
|Accrued liabilities|1,675,596.14||||1,675,596.14|
|Total|8,879,990,829.66||||8,879,990,829.66|
||Dec 31, 2016|||||
|Item||||||
||Within 1 year|1-2 years|2-5 years|Over 5 years|Total|
|Short-term loan|185,237,615.37||||185,237,615.37|
|Notes payable|2,620,549,815.47||||2,620,549,815.47|
|Accounts payable|3,335,089,672.06||||3,335,089,672.06|
|Dividends payable|7,150,684.06||||7,150,684.06|
|Other|1,844,413,154.26||||1,844,413,154.26|
|current-liabilities||||||
|Other account|199,926,400.42||||199,926,400.42|
|payable||||||
|Accrued liabilities|1,727,340.89||||1,727,340.89|
|Total|8,194,094,682.53||||8,194,094,682.53|

 XII. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB
||||||
|-|-|-|-|-|
||Closing fair value||||
||Fair value|Fair value|Fair value||
|Item|||||
||measurement items at|measurement items at|measurement items at|Total|
||level 1|level 2|level 3||
|I. Consistent fair value measurement|--|--|--|--|
|Available-for-sale financial|||||
||||5,976,013,434.56|5,976,013,434.56|
|assets-financial products|||||
|Total assets measured at fair value|||||
||||5,976,013,434.56|5,976,013,434.56|
|consistently|||||
|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 3
On 30 June 2017, financial assets with fair value measurement items at level 3 were all the break-even floating
income financial product investment, which all adopt valuation technique to recognize its fair value.
3. 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 lead to events of conversion between different levels was recognized as time-point of conversion between different levels. There was no conversion between level 1 and level 2 in the current year. 4. Change in financial assets at level 3
Unit: RMB
|||
|-|-|
|Item|Financial product investment|
|Jan 1, 2017|5,994,142,671.24|
|Purchase|2,065,000,000.00|
|Sale|-2,045,000,000.00|
|Total current gains|-38,129,236.68|
|-gains recorded into profit and loss|-104,142,671.23|
|-gains recorded into other comprehensive income|66,013,434.55|
|June 30, 2016|5,976,013,434.56|
|Changes in assets still held on June 30, 2017 and recorded in the profit and loss of 2017||
|which didn’t realize profits or losses||
|Income from change in fair value||

Relevant information on fair value measurement at level 3
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Fair value at June||Valuation||Unobservable input||||Relationship with||Observable/unob||
|Item||||||||Scope||||||
|||30, 2017||technique||value||||fair value||servable||
|Available-for-sale financial assets||||||||||||||
|||5,976,013,434.56||Discountedcash flow||Expected annualyield||3.9%-5.25%||Positive||Unobservable||
|Financial products||||||||||||||
||||Fair value at Dec||Valuation||Unobservable||||Relationship||Observable/un|
||Item||||||||Scope|||||
||||31, 2016||technique||input value||||with fair value||observable|
||Available-for-sale financial assets|||||||||||||
||Financial|5,994,142,671.23||Discountedcash flow||Expected annualyield||3.9%-5.5%||Positive||Unobservable||
||products|||||||||||||

5. 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:
account receivable, other accounts receivable, account payable and other accounts payable
Available for sale financial assets measured at cost was the unlisted share investment with no offer in active market and larger reasonable valuation change range and each fair value probability cannot reasonably recognized, thus, the fair value cannot be reliably measured.
There is no significant variance the book value and fair value of financial assets and liabilities during the Reporting Period.
XIII. Related party and related Transaction
1. Information related to parent company of the Company
|||||||
|-|-|-|-|-|-|
||||||Proportion of voting|
|||||Proportion of share||
||||||rights owned by|
|Name of parent|Registration|||held by parent||
|||Nature of business|Registered capital||parent company|
|company|place|||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
|MIDEA||Global technology group operating||||
||Foshan|||||
|GROUP CO.,||consumer appliances, HVAC,|6,519,637,198.00|52.67%|52.67%|
||Guangdong|||||
|LTD.||robots and automatic system||||

Notes of the parent company of the Company
The ultimate controller of the Company is He Xiangjian.
2. Subsidiaries of the Company
Refer to Note IX.
3. Information on other related parties of the Company
|||
|-|-|
|Name|Relationship|
|Ningbo Midea United Material Supply 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|
|Wuhu Welling Motor Marketing Co., Ltd.|Under control of controlling shareholder of the Company|
|Ningbo Annto Zhilian Technology 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|
|Annto Zhilian Technology Share Holding Co., Ltd.|Under control of controlling shareholder of the Company|
|Midea Group E-commerce Co., Ltd.|Under control of controlling shareholder of the Company|
|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|
|Foshan Shunde District Bainian Technology Development 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|
|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 Life 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|
|Guangdong Midea Household Electric Appliance manufacturing Co.,||
||Under control of controlling shareholder of the Company|
|Ltd.||
|Guangdong Midea 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|
|Foshan Midea Qinghu Water Purification Equipment 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|
|Wuhu Midea Household Electric Appliance Manufacturing 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|
|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|
|Midea Middle East|Under control of controlling shareholder of the Company|
|Foshan Shunde District Bainian Technology Development Co., Ltd.|Under control of controlling shareholder of the Company|

 4. List of related-party 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 exceed||
||||The approval trade||Same period of|
|Related party|Content|Reporting Period||trade credit or||
||||credit||last year|
|||||not||
|Wuhu Welling Motor Marketing|E lectrical|||||
|||501,214,171.41|1,360,000,000.00|No|65,594,596.51|
|Co., Ltd.|Machine|||||
|Ningbo Midea United Material||||||
||Materials|824,485,276.15|1,470,000,000.00|No|425,080,087.78|
|Supply Co., Ltd.||||||
|Ningbo Annto Zhilian Technology|Warehousing &|||||
|||366,086,063.48|||178,930,465.36|
|Co., Ltd.|logistics|||||
||||970,000,000.00|No||
|Annto Zhilian Technology Share|Warehousing &|||||
|||54,675,276.23|||68,608,403.67|
|Holding Co., Ltd.|Logistics|||||

|||||||
|-|-|-|-|-|-|
|Zhejiang Meizhi Compressor Co.||||||
||Compressor|7,043,483.25|19,000,000.00|No|3,792,306.57|
|Ltd.||||||
||Promotion &|||||
|Midea Group E-commerce Co., Ltd.||22,380,192.57|55,000,000.00|No|14,305,712.63|
||Marketing|||||
|Ningbo Midea United Material|Chip & HIFI|||||
|||33,583,425.56||||
|Supply Co., Ltd|module|||||
||||85,000,000.00|No||
|Guangdong Midea Hicks|Chip & HIFI|||||
|||513,334.92||||
|Electronics Co., Ltd.|module|||||
|Midea Group Co., Ltd.|Service charge|19,999.98|24,000,000.00|No||
|Ningbo Beautiful Homeland||||||
||After-sales service|132,504,096.51|320,000,000.00|No|170,408,807.12|
|Electric Appliance Service Co., Ltd.||||||
|Midea Smart Home Technology||||||
||Materials|144,785.68||No||
|Co., Ltd||||||
|Huai'an Welling Motor||||||
||Electrical machine|||No|345,409,520.97|
|Manufacturing Co., Ltd.||||||
|Total||1,942,650,105.74|4,303,000,000.00||1,272,129,900.61|

 Information of sales of goods and provision of labor service
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Whether||
||||The approval||Same period of|
|Related party|Content|Reporting Period||exceed trade||
||||trade credit||last year|
|||||credit or not||
||Washing|||||
|Midea Electric Trading (Singapore) Co.||||||
||machine &|1,594,543,430.93|4,025,000,000.00|No|1,118,554,710.83|
|Pte. Ltd.||||||
||Fittings|||||
||Washing|||||
|MIDEA SCOTT&ENGLISH||||||
||machine &|45,312,856.38|105,000,000.00|No|28,049,217.86|
|ELECTRONIICS SDN.BHD||||||
||Fittings|||||
||Washing|||||
|PT.Midea Planet Indonesia|machine &|15,461,735.27|70,000,000.0|No|11,061,356.49|
||Fittings|||||
||Washing|||||
|Midea Life Electric (Vietnam) Co., Ltd.|machine &|6,144,209.34|55,000,000.00|No|10,328,952.32|
||Fittings|||||
||Washing|||||
|Orient Household Appliances Ltd.|machine &|18,771,850.49|70,000,000.00|No||
||Fittings|||||
|Ningbo Beautiful Homeland Electric||||||
||Fittings|18,416,401.64|28,000,000.00|No||
|Appliance Service Co., Ltd.||||||

|||||||
|-|-|-|-|-|-|
||Washing|||||
|TOSHIBA LIFESTYLE PRODUCTS &||||||
||machine &|20,757,917.67|80,000,000.00|No||
|SERVICES CORPORATION||||||
||Fittings|||||
|Toshiba Home Appliances||||||
|Manufacturing ( South China Sea) Co.,|Parts|548,124.87||||
|Ltd.||||||
||Washing|||||
|Hefei Hua Ling Share Holding Co. , Ltd.|machine &|161,538.46||||
||Fittings|||||
||Washing|||||
|Midea Middle East|machine &|1,921,564.33||||
||Fittings|||||
|Ningbo Annto Zhilian Technology Co.,|Washing|||||
|||1,855,571.90||||
|Ltd.|machine|||||
|Total||1,723,895,201.28|4.433.000,000.00||1,167,994,237.50|

 (3) Information of related lease
The Company was lessor:
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Whether exceed||
||Category of leased|The lease income|The approval trade||The lease income|
|Name of lessee||||trade credit or||
||assets|confirmed in this year|credit||confirmed in last year|
|||||not||
|Hefei Hua Ling Share||||||
||House renting|5,641,036.82|14,150,943.40|No|2,916,884.40|
|Holding Co., Ltd.||||||
|Total||5,641,036.82|14,150,943.40||2,916,884.40|

 Notes: Of the above related transactions, in the first half of 2017, the total amount of related transactions not approved but actually incurred is RMB4,631,585.24 with0.5% less compared with the audited net assets of 2016 (RMB29,919,239.31). Thus the approval of the board of directors is not needed.
5. Receivables and payables of related parties
(1) Receivables
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Name o f||||||
||Related party||Bad debt||Bad debt|
|item||Book balance||Book balance||
||||provision||provision|
|Accounts|Midea Electric Trading (Singapore) Co.|649,905,177.27|32,495,258.86|475,357,280.44|23,767,864.02|

|||||||
|-|-|-|-|-|-|
|receivable|Pte. Ltd.|||||
|Accounts||||||
||Orient Household Appliances Ltd.|8,453,601.69|422,680.08|13,679,187.05|683,959.35|
|receivable||||||
|Accounts|MIDEA SCOTT&ENGLISH|||||
|||19,491,267.83|974,563.39|3,485,105.76|174,255.29|
|receivable|ELECTRONILCS SDN.BHD|||||
|Accounts||||||
||PT MIDEA PLANET INDONESIA|10,130,616.52|506,530.83|8,404,017.46|420,200.87|
|receivable||||||
|Accounts||||||
||Midea Life Electric (Vietnam) Co. , Ltd.|4,839,530.62|241,976.53|13,183,502.52|659,175.13|
|receivable||||||
|Accounts|Annto Zhilian Technology Share|||||
|||||43,086.00|2,154.30|
|receivable|Holding Co., Ltd.|||||
||Toshiba Home Appliances|||||
|Accounts||||||
||Manufacturing ( South China Sea) Co.,|641,306.10|32,065.31|||
|receivable||||||
||Ltd.|||||
|Accounts|TOSHIBA LIFESTYLE PRODUCTS|||||
|||3,506,178.79|175,308.94|||
|receivable|& SERVICES CORPORATION|||||
|Accounts|Ningbo Beautiful Homeland Electric|||||
|||2,808,008.89|140,400.44|||
|receivable|Appliance Service Co., Ltd.|||||
|Accounts||||||
||Midea Middle East|903,926.08|45,196.30|||
|receivable||||||
|Total||700,679,613.79|35,033,980.68|514,152,179.23|25,707,608.96|
|Other||||||
||Shenzhen Midea Payment Technology|||||
|accounts||4,265,894.46|213,294.72|10,835,423.12|541,771.16|
||Co., Ltd.|||||
|receivable||||||
|Other||||||
||Guangdong Midea Group Wuhu|||||
|accounts||||3,428,921.06|171,446.05|
||Refrigeration Equipment Co., Ltd.|||||
|receivable||||||
|Other||||||
||Hefei Hua Ling Share Holding Co. ,|||||
|accounts||||854,915.88|42,745.79|
||Ltd.|||||
|receivable||||||
|Other||||||
|accounts|Hubei Midea Refrigerator Co., Ltd.|||813,636.76|40,681.84|
|receivable||||||
|Total||4,265,894.46|213,294.72|15,932,896.82|796,644.84|
||Ningbo Midea United Material Supply|||||
|Prepayments||26,130,582.93||10,121,553.93||
||Co., Ltd|||||
|Prepayments|Midea Group E-commerce Co., Ltd.|4,620,995.71||1,549,712.32||
||Foshan Midea Qinghu Water|||||
|Prepayments||||75,816.00||
||Purification Equipment Co., Ltd.|||||

|||||
|-|-|-|-|
||Foshan Shunde District Bainian|||
|Prepayments||2,406,400.00|48,100.00|
||Technology Development Co., Ltd.|||
|Total||33,157,978.64|11,795,182.25|

(2) Payables
Unit: RMB
|||||
|-|-|-|-|
|Name o f item|Related party|Closing book balance|Opening book balance|
|Accounts||||
||Wuhu Welling Motor Marketing Co., Ltd.|192,129,470.82|201,074,837.49|
|payable||||
|Accounts||||
||Ningbo Midea United Material Supply Co., Ltd|40,344,869.19|110,265,994.59|
|payable||||
|Accounts||||
||Zhejiang Meizhi Compressor Co. Ltd.|4,697,152.03|3,330,792.14|
|payable||||
|Accounts||||
||Guangdong Midea Hicks Electronics Co., Ltd.||1,305,066.18|
|payable||||
|Accounts|Ningbo Beautiful Homeland Electric Appliance|||
|||193,251.70|499,870.00|
|payable|Service Co., Ltd.|||
|Accounts|Huai'an Welling Motor Manufacturing Co.,|||
||||390,637.80|
|payable|Ltd.|||
|Accounts|Annto Zhilian Technology Share Holding Co.,|||
|||2,028,922.73|151,302.88|
|payable|Ltd.|||
|Accounts||||
||Midea Smart Home Technology Co., Ltd|272,903.32|52,603.40|
|payable||||
|Accounts||||
||Ningbo Annto Zhilian Technology Co., Ltd.|3,969,734.53|342,449.48|
|payable||||
|Accounts|Guangdong Midea Household Electric|||
|||107,698.41||
|payable|Appliance manufacturing Co., Ltd.|||
|Accounts|Foshan Midea Qinghu Water Purification|||
|||164,268.00||
|payable|Equipment Co., Ltd.|||
|Total||243,908,270.73|317,413,553.96|
|Other accounts|Ningbo Beautiful Homeland Electric Appliance|||
|||9,949.00|9,949.00|
|payable|Service Co., Ltd.|||
|Other accounts|Wuhu Midea Household Electric Appliance|||
||||1,288,644.49|
|payable|Manufacturing Co., Ltd.|||
|Other accounts|Guangdong Midea Refrigeration Equipment|||
|||126,964.69|283,510.28|
|payable|Co., Ltd|||
|Other accounts|Midea Welling Motor Technology (Shanghai)|||
||||275,223.94|
|payable|Co., Ltd.|||

|||||
|-|-|-|-|
|Other accounts|Guangdong Midea Household Electric|||
||||84,774.82|
|payable|Appliance manufacturing Co., Ltd.|||
|Other accounts||||
||Midea Group Co., Ltd.||43,400.00|
|payable||||
|Total||136,913.69|1,985,502.53|
|Other current||||
||Midea Group Co., Ltd.|7,041,545.66|14,192,875.85|
|liabilities||||

XIV. Stock payment
Midea Group has implemented four stock options and one restricted stock incentive plan for middle and senior management and technical backbone of the Group and its subsidiaries. At present, three exercise period of the first period of the stock option incentive plan, the first and second exercise period of the second period of the stock option incentive plan, the first exercise period of the third period of stock option incentive plan has reached the right condition.
By the end of the Reporting Period, the Company and its subsidiaries had a total of 30 participants and the stock option was 6986.25 thousand in the first phase of the stock option incentive plan. The Company and its subsidiaries had a total of 36 participants and the stock option was 6.30 million in the second phase of the stock option incentive plan. The Company and its subsidiaries had a total of 64 participants and the stock option was 8.79 million in the third phase of the stock option incentive plan. The Company and its subsidiaries had a total of 126 participants and the stock option was 7.956 million in the fourth phase of the stock option incentive plan. The Company and its subsidiaries had a total of 9 participants and the stock option was 525 thousand in the first phase of the restricted stock incentive plan.
XV. Commitments and contingency
1. Significant commitments
As of 30 June 2017, there were no significant commitments to be disclosed.
2. Contingency
(1) Significant contingency at balance sheet date
As of 30 June 2017, there were no significant contingency to be disclosed.
(2) Notes shall be given even if there is no significant contingency to disclose
There is no significant contingency to disclose for the Company.
XVI. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit:RMB’0,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||||Withdrawa|||||Withdraw||
|||Proporti|||Book value||Proporti|||Book value|
||Amount||Amount|l||Amount||Amount|al||
|||on|||||on||||
|||||proportion|||||proportion||
|Accounts|||||||||||
|receivable|||||||||||
|with|||||||||||
|significant|||||||||||
|single amount|169,455.73|58.35%|||169,455.73|126,233.17|53.37%|||126,233.17|
|for which bad|||||||||||
|debt provision|||||||||||
|separately|||||||||||
|accrued|||||||||||
|Accounts|||||||||||
|receivable|||||||||||
|withdrawal of|||||||||||
|bad debt|||||||||||
||120,941.00|41.65%|6,047.05|5.00%|114,893.95|110,307.67|46.63%|5,515.38|5.00%|104,792.29|
|provision of|||||||||||
|by credit risks|||||||||||
|characteristics|||||||||||
|:|||||||||||
|Total|290,396.73|100.00%|6,047.05|2.08%|284,349.68|236,540.84|100.00%|5,515.38|2.33%|231,025.46|

 Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable (classified by|Closing balance||||
|units)|Account receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|Hefei Midea Washing Machine Co.,|||||
||1,691,595,170.38||||
|Ltd.|||||
|Wuxi FILIN Electronics Co., Ltd.|2,962,143.24||||
|Total|1,694,557,313.62||--|--|

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Account receivable|Bad debt provision|Withdrawal proportion|
|Within 1 year|1,209,409,998.82|60,470,499.95|5.00%|
|Total|1,209,409,998.82|60,470,499.94||

Notes:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad debt provision withdrawal, reversed or recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB5,316,664.13; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Unit: RMB
|||||
|-|-|-|-|
|Name of customer|Balance|Bad debt provision|Proportion (%)|
|Total of top 5 of the closing balance of the accounts receivable|2,587,720,199.85|44,806,251.47|89.11%|

 2. Other accounts receivable
(1) Other account receivable classified by category
Unit:RMB’0,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|Amount||||Book||||Withdrawa||
|||Proportio||Withdrawal|||Proportion|||Book value|
||||Amount||value|Amount||Amount|l||
|||n||proportion|||||||
||||||||||proportion||
|Other accounts|||||||||||
|receivable with|||||||||||
|significant single|||||||||||
||7,574.74|91.89%|7,540.87|99.55%|33.87|7,575.50|81.69%|7,540.82|99.54%|34.69|
|amount for which|||||||||||
|bad debt provision|||||||||||
|separately accrued|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other accounts|||||||||||
|receivable withdrawn|||||||||||
|bad debt provision|668.90|8.11%|67.68|10.12%|601.22|1,698.20|18.31%|115.27|6.79%|1,582.93|
|according to credit|||||||||||
|risks characteristics|||||||||||
|Total|8,243.64|100.00%|7,608.55|92.30%|635.09|9,273.70|100.00%|7,656.09|82.56%|1,617.61|

 Other receivable with single significant amount and withdrawal bad debt provision separately at end ofperiod：√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||||
|Other accounts receivable (unit)|Other accounts|Bad debt|Withdrawal|Withdrawal|
||receivable|provision|proportion|reason|
|Jiangsu Little Swan Marketing and Sales Co. , Ltd.|74,297,038.55|74,297,038.55|100.00%|Irrecoverable|
|Wuxi Little Swan Import & Export Co., Ltd.|1,111,652.95|1,111,652.95|100.00%|Irrecoverable|
|Little Swan International (Singapore) Co., Ltd.|338,720.00||||
|Total|75,747,411.50|75,408,691.50|--|--|

 In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Within 1 year|5,247,313.91|262,365.70|5.00%|
|1 to 2 years|535,900.00|53,590.00|10.00%|
|2 to 3 years|460,200.00|138,060.00|30.00%|
|Over 3 years|445,600.00|222,800.00|50.00%|
|Total|6,689,013.91|676,815.70|10.12%|

 Notes:
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 withdraw bad debt provision:
□ Applicable√ Not applicable
(2) Bad debt provision withdrawal, reversed or recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB-475,418.88; the
amount of the reversed or collected part during the Reporting Period was of RMB0.00.
(3) Other account receivable classified by account nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin &cash pledge|1,512,558.00|1,477,683.35|
|Employee loan|3,550,926.53|1,719,177.08|
|Internal intercourse funds|75,747,411.50|75,755,041.50|
|Others|1,625,529.38|13,785,131.04|
|Total|82,436,425.41|92,737,032.97|

 (4) The top five other account receivable classified by debtor at period-end
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Closing|||Bad debt provision|
|Name of the entity|Nature||Aging|Proportion%||
|||balance|||Closing balance|
|Jiangsu Little Swan Marketing and||||||
||Intercourse funds|74,297,038.55|4 to 5 years|90.13%|74,297,038.55|
|Sales Co. , Ltd.||||||
|Shenzhen Midea Payment|Temporary|||||
|||1,621,708.72|Within 1 year|1.97%|81,085.44|
|Technology Co., Ltd.|payments|||||
|Wuxi Little Swan Import & Export||||||
||Intercourse funds|1,108,162.95|1 to 2 years|1.34%|1,108,162.95|
|Co., Ltd.||||||
||Margin &cash|||||
|Wuxi Huarun Gas Co., Ltd.||820,800.00|Within 1 year|1.00%|41,040.00|
||pledge|||||
|Little Swan International||||||
||Intercourse funds|338,720.00|1 to 2 years|0.41%|0.00|
|(Singapore) Co., Ltd.||||||
|Total|--|78,186,430.22|--||75,527,326.94|

 3. Long-term equity investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Investment to the|||||||
||1,433,285,041.57|57,500,000.00|1,375,785,041.57|1,433,285,041.57|57,500,000.00|1,375,785,041.57|
|subsidiary|||||||
|Total|1,433,285,041.57|57,500,000.00|1,375,785,041.57|1,433,285,041.57|57,500,000.00|1,375,785,041.57|

Investment to the subsidiary
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
||||||impairment|Closing|
||||||provision in|balance of|
|Investee|Opening balance|Increase|Decrease|Closing balance|||
||||||the|impairment|
||||||Reporting|provision|
||||||Period||
|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|||
|Sales Co. , Ltd.|||||||
|Wuxi FILIN Electronics Co., Ltd.|25,660,308.10|||25,660,308.10|||
|Wuxi Little Swan General|||||||
||89,062,000.00|||89,062,000.00|||
|Appliance Co., Ltd.|||||||
|Little Swan (Jingzhou) Sanjin|||||||
||11,869,431.12|||11,869,431.12|||
|Electrical Appliance Co., Ltd.|||||||
|Little Swan International|||||||
||681,050.00|||681,050.00|||
|(Singapore) 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||57,500,000.00|

 4. Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|7,187,874,729.64|5,451,504,491.74|5,650,983,937.54|4,194,962,471.12|
|Other operations|571,348,362.67|544,495,540.84|394,837,154.52|329,992,504.23|
|Total|7,759,223,092.31|5,996,000,032.58|6,045,821,092.06|4,524,954,975.35|

 5. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Investment income received from held-to-maturity investment|1,507,720.00||
|during the holding period|||

||||
|-|-|-|
|Investment income received from available-for-sale financial|||
||49,901,444.44|17,306,094.37|
|assets in the holding period|||
|Investment income received from disposal of available-for-sale|||
||41,950,352.38||
|financial assets|||
|Total|93,359,516.82|17,306,094.37|

 XIX. Supplementary materials
1. Items and amounts of extraordinary gains and losses
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current assets|2,324,085.53||
|Tax rebates, reductions or exemptions due to approval beyond authority or|||
||8,072,556.77||
|the lack of official approval documents|||
|Profit/loss on fair value changes of transactional financial assets and|||
|liabilities & investment income from disposal of transactional financial assets|||
||7,572,093.13||
|and liabilities as well as financial assets available for sale, except for|||
|effective hedges related to routine operations of the Company|||
|Other non-operating income and expenses other than the above|2,147,453.14||
|Less: Income tax effects|2,446,093.57||
|Minority interests effects|926,807.28||
|Total|16,743,287.72|--|

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 thePublic—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 common shareholders of the||1.16|1.16|
||11.69%|||
|Company||||
|Net profit attributable to common shareholders of the||||
||11.42%|1.14|1.14|
|Company after deduction of non-recurring profit and loss||||