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Haier Electronics Group Co., Ltd.
海爾電器集團有限公司
*
󱱛for identification purpose only 僅供識別
海爾電器集團有限公司
年 報
Stock Code
股份代號󱱫󱱑
01169

Table of contents

  • Page 1
    Haier Electronics Group Co., Ltd. Stock Code 01169 * for identification purpose only åƒ...供識別

  • Page 2

  • Page 3
    ... Business Structure Corporate Information Chairman's Letter Directors and Senior Management Business Review Financial Review Corporate Governance Report Report of the Directors Independent Auditors' Report 2 Audited Financial Statements Consolidated: 綜合 Income Statement æ"¶ç›Šè¡¨ 67...

  • Page 4
    ... and sale of washing machines and water heaters in the PRC under the brand name of "Haier". The Group also began engaging in the integrated channel services business for other home appliance products such as refrigerators, televisions and air-conditioners, of both "Haier" and "non-Haier" brands...

  • Page 5
    HAIER ELECTRONICS GROUP CO., LTD SIMPLIFIED BUSINESS STRUCTURE Haier Electronics Group Co., Ltd. Washing Machine Business Water Heater Business Integrated Channel Services Business Distribution Business (Goodaymart ) Logistics Business Annual Report 2010 3

  • Page 6
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE INFORMATION å...¬å¸è³‡æ-™ Board of Directors Executive Directors Ms. YANG Mian Mian (Chairman) Mr. ZHOU Yun Jie Mr. LI Hua Gang Mr. SUN Jing Yan Non-executive Directors Mr. WU Ke Song (Deputy Chairman) Mr. LIANG Hai Shan Independent Non-executive ...

  • Page 7
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE INFORMATION Legal Advisors As to Hong Kong Law DLA Piper Hong Kong As to Bermuda Law Conyers Dill & Pearman 香港法律 Principal Banker in Hong Kong Industrial and Commercial Bank of China (Asia) Limited Principal Banker in the PRC ...

  • Page 8
    ... Office in Hong Kong Tricor Tengis Limited 26/F., Tesbury Centure 28 Queen's Road East Hong Kong 28號 匯中 26æ¨" Telephone Number +852 2169 0000 +852 2169 0000 Fax Number +852 2169 0880 +852 2169 0880 Stock Code The Stock Exchange of Hong Kong Limited: 01169 01169 6 Annual Report 2010

  • Page 9
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE INFORMATION Website www.haier-elec.com.hk www.haier-elec.com.hk Investor Relations Contact Elite Investor Relations Limited Telephone Number : (852) 3183 0225 Fax Number E-mail Address : (852) 2155 9165 : [email protected] 852) 3183 0225 ：...

  • Page 10
    INCORPORATED THE ENERGY-SAVING TREND TO APPLIED THE GREEN STRATEGY

  • Page 11
    ... developed our integrated channel services business in 3rd and 4th tier markets. We have developed from being solely a manufacturer of washing machines and water heaters to an influential integrated channel service provider in the home electrical appliance industry in China Annual Report 2010...

  • Page 12
    ... acquired the logistics assets from our parent company, further invested in the distribution network, and also set up distribution platforms with venture partners. The combined performance of the Group's manufacturing business and the integrated channel services business for year 2010 was remarkable...

  • Page 13
    ... that we can assure the growth in profitability. Along with the increasing wages and the upgrade of the industrial structure, we observed the rising importance of the domestic markets of China which is attributable to the gradual development of the inland cities as well as the urbanisation of the...

  • Page 14
    ...all home appliance distributors. As we believe the above trends will affect the home appliance industry and create winners and losers, we have explored a new drive for the Company i.e. the integrated channel services business in the 3rd and 4th tiers cities as we described in the 2010 interim report...

  • Page 15
    ..." targeting value-conscious customers in the 3rd and 4th tier markets, by offering simple function products with good quality and reliable service Extend our distribution system to Non-Haier brand and Non-White Goods products The goal of the integrated channel services...

  • Page 16
    ... our efficient logistics system, customers-centered product development process and strong services network. We will consider to integrate the Internet based home appliances sale platform acquired from our parent company, providing our customers with enriched product information and allowing them to...

  • Page 17
    ... and delegate the authority. Thirdly, we strive to develop our company into an organisation with compatibility to make use of the external resources including through acquisitions and strategical alliances. During the year, we formed joint ventures with home appliance distributors in Shandong to...

  • Page 18
    ... our enterprise will move ahead to a promising future and deliver a superior long-term shareholders' value. （續） By Order of the Board of Haier Electronics Group Co., Ltd. Yang Mian Mian Chairman Hong Kong, 29 March 2011 承è'£äº‹æœƒ 主席 16 Annual Report 2010

  • Page 19
    ... of Haier Group Corporation ("Haier Corp") and the chairman of Qingdao Haier Co., Ltd. (a company listed on the Shanghai Stock Exchange (the "A-Share Company")). Ms. Yang is also a director of the following Group's subsidiaries: Beijing Haier Logistics Co., Ltd., Chongqing Haier Washing Machine Co...

  • Page 20
    ... 2010. Mr. Li, graduated from the Huazhong University of Science and Technology, the PRC in 1991 with a Bachelor's degree in Economics. He joined the Haier Group in 1991 and has since held a number of senior positions in the sales and marketing functions with his expertise in the sales management...

  • Page 21
    ...function and white goods business. He is also a Senior Vice President of Haier Corp, the Vice Chairman of A-Share Company and a director of the following Group's subsidiaries: Beijing Haier Logistics Co., Ltd.; Qingdao Economy and Technology Development Zone Haier Water Heater Co., Ltd., and Qingdao...

  • Page 22
    ... corporate finance. Mr. Yu is the Vice Chairman of MCL Partners Limited, a Hong Kong based financial advisory and investment firm. He serves as an independent non-executive director of several other companies listed on the Stock Exchange, namely China Datang Corporation Renewable Power Co., Limited...

  • Page 23
    ... of China. He joined the Haier Group in 2000 and has since held a number of senior financial positions in Haier Group finance department, Haier Australia trading company and washing machine business of the Group. Mr. SHU Hai, aged 44, has served as the General Manager of washing machine product...

  • Page 24
    HAIER ELECTRONICS GROUP CO., LTD æµ· 爾 é›» 器 集 團 有 限 å...¬ 司 22 Annual Report 2010 二 零 一 零 å¹´ å¹´ å ±

  • Page 25

  • Page 26
    ... 4th tier markets in China. The Group has three major segments: washing machines business, water heater business and the integrated channel services business. Currently, the Group's white goods manufacturing business is operated under the Haier brand while the integrated channel services business is...

  • Page 27
    ... GROUP CO., LTD BUSINESS REVIEW The segment revenue and results for 2010 were as follows: Segment revenues Integrated channel services 66% Washing machine Washing machine 27% Segment results Integrated channel services 30% Washing machine 52% Water heater 7% Water heater 7% Water heater...

  • Page 28
    ... China Market Monitor Co. Ltd., the Group's washing machines enjoyed a domestic market share of 26.9% in term of sales volume for 2010, continuing to rank No. 1 in the domestic market. By optimising product mix, aggressively developing premium and high value-added products, the gross profit margins...

  • Page 29
    ... 19.3% market share in the water heater business in term of sales volume. In 2010, leveraging on its existing advantage in channel resources, the Group upgraded its products including electric water heaters, gas water heaters and solar water heaters as well as its services. While promoting safety...

  • Page 30
    ...,000,000 in 2010 and gross profit margin of 3.1%. Currently, most of the acquired goods through the integrated channel services, including refrigerators, air conditioners, televisions and computers are originated from the Company's parent company, Haier Group. In the year 2010, through the adoption...

  • Page 31
    ...will invest more in the development of integrated channel services business and spare no effort to build our core competitive advantage, i.e, integrating sales network, logistics network and after-sale service network, so as to share further the benefits arising from the growth of the home appliance...

  • Page 32
    HAIER ELECTRONICS GROUP CO., LTD FINANCIAL REVIEW 財務回顧 1. Analysis of Revenue and Profit Items 1. 2010 2009 Restated RMB'000 RMB'000 Revenue Washing machine business Water heater business Integrated channel services business Inter-segment elimination 11,519,008 3,126,182 28,227,...

  • Page 33
    ... profit margins for the washing machine business and water heater business were 28.1% and 42.5%, respectively, representing an increase of 1.0% and 1.5% as compared to 2009. Despite the price fluctuation of raw materials, the Group actively improved its product mix, promoted the sales of high-end...

  • Page 34
    ... after-sale expenses through product quality control. The ratio of selling and distribution costs of the Group's washing machine and water heater businesses to revenue decreased from 19.9% in 2009 to 18.7% in 2010. The ratio of selling and distribution costs to revenue for integrated channel service...

  • Page 35
    ... of operating cash flow, in particular, mainly from the increase in the profits from the washing machine and water heater businesses. On the other hand, the integrated channel services business newly developed by the Group also made positive contribution to cash flow 1,448,000,000å...ƒ 上 升86...

  • Page 36
    ... inventory turnover days for washing machines and water heaters decreased from 18 days at the end of 2009 to 11 days at the end of 2010, representing a significant improvement in the performance of asset turnover ratio. In 2010, inventory turnover days of the Group's integrated distribution services...

  • Page 37
    ... FINANCIAL REVIEW Working capital (Cont'd) Payables turnover days Payables turnover days of the Group's washing machine and water heater business decreased from 41 days at the end of 2009 to 22 days at the end of 2010. Payables turnover days of the Group's integrated channel services business...

  • Page 38
    ... investments in the washing machine, water heater and integrated channel services business. The size of working expenditure is subject to various factors including the needs to construct new workshops, upgrade of machinery and equipment and investment in establishing strategic alliances. The Group...

  • Page 39
    HAIER ELECTRONICS GROUP CO., LTD FINANCIAL REVIEW Treasury Policies The Group adopts a prudent approach for its cash management and risk control. Most of the Group's revenues and expenses are denominated in Renminbi and Hong Kong dollars. Cash is generally placed in the short term deposits ...

  • Page 40
    ... and finance, business management and industry knowledge and the Board as a whole has achieved an appropriate balance of skills and experience. The Directors' biographical details are set out on pages 17 to 20 of this annual report. To the best of the Company's knowledge, there is no financial or...

  • Page 41
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE GOVERNANCE REPORT Board of Directors (Cont'd) Under the Code Provision A.4.1, non-executive directors should be appointed for specific terms, subject to re-election. Currently, all nonexecutive directors of the Company are not appointed for a specific...

  • Page 42
    ...Bye-laws"), the Listing Rules and/or the Hong Kong Codes on Takeovers and Mergers and Share Repurchases; 2. formulating and implementing policies for business activities, internal controls and administration of the Company; 3. planning and deciding the Company's strategies on its business activities...

  • Page 43
    ... the Listing Rules, applicable legal and regulatory requirements. In order to ensure that their duties can be properly discharged, the Directors are entitled to seek advice from independent professional advisers whenever deemed necessary by them at the Company's expense Annual Report 2010 41

  • Page 44
    ..., the 2009 annual results and 2010 interim results, discloseable and connected transactions and continuing connected transactions of the Group. The Company's board meetings (the "Board Meeting(s)") are permitted to be held by means of telephone or other means of electronic communication under the...

  • Page 45
    ... No. of the scheduled Board Meetings attended/held Executive Directors: Ms. Yang Mian Mian (Chairman) Mr. Cui Shao Hua (resigned on 19 April 2010) Mr. Zhou Yun Jie Mr. Li Hua Gang (appointed on 19 April 2010) Mr. Sun Jing Yan Non-Executive Directors: Mr. Wu Ke Song (Deputy Chairman) Mr. Liang...

  • Page 46
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE GOVERNANCE REPORT Board of Directors (Cont'd) Model Code for Securities Transactions by Directors The Company has adopted a Model Code for Securities Transactions by Directors (the "Haier Electronics Model Code") on no less exacting terms than the ...

  • Page 47
    ... to ensure the objectivity and credibility of financial reporting, to make recommendation to the Board on the appointment, reappointment and removal of the Group's external auditors and review of the Company's financial controls, internal control and risk management systems. Each member of the Audit...

  • Page 48
    ...Mr. Zhou Yun Jie (appointed as member on 19 April 2010 when Mr. Cui Shao Hua resigned on the same day), one non-executive director namely, Mr. Wu Ke Song and all three INEDs. The Remuneration Committee is chaired by Mr. Wu Yinong, an INED. The primary duties of the Remuneration Committee are to make...

  • Page 49
    HAIER ELECTRONICS GROUP CO., LTD CORPORATE GOVERNANCE REPORT Board of Directors (Cont'd) Board Committees (Cont'd) (3) Nomination Committee The Nomination Committee was formed on 19 September 2008 and currently comprises four members including one executive Director, namely, Mr. Zhou Yun Jie (...

  • Page 50
    ... the financial statements on a going concern basis. The Board aims to present a comprehensive, balanced and understandable assessment of the Group's development and prospects in all corporate communications, including but not limited to annual and interim reports, any price sensitive announcements...

  • Page 51
    ... as risk management procedures. The Board is also responsible for ensuring that the management has discharged its duty to have an effective internal control system including the adequacy of resources, qualification and experience of staff of the Company's accounting and financial reporting function...

  • Page 52
    ... to as "Qingdao Haier Logistics Group"), which are principally engaged in the provision of logistics services, and commenced the business of distributing home appliance and other products (collectively referred to as the "integrated channel services" in note 4 to the financial statements) during the...

  • Page 53
    ... REPORT OF THE DIRECTORS PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES Details of movements in the property, plant and equipment, and investment properties of the Group during the year are set out in notes 15 and 16 to the financial statements, respectively 15及16ã€, SHARE CAPITAL...

  • Page 54
    ...knowledge of the directors, owns more than 5% of the Company's issued share capital) had any beneficial interest in the Group's five largest customers or suppliers. (續) 5 DIRECTORS The directors of the Company during the year were: Executive directors: Ms. Yang Mian Mian Mr. Zhou Yun Jie...

  • Page 55
    ...INFORMATION OF DIRECTORS Below are the changes of directors' information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules since the interim report: During the year, Mr. Zhou Yun Jie, the executive director of the Company was appointed as a director of the Group's subsidiaries...

  • Page 56
    ... Code for Securities Transactions by Directors of Listed Issuers, were as follows: Long positions in share options of the Company XV 352 Approximate % of issued shares upon Number of options directly Name of director beneficially owned exercise of share options Mr. Wu Ke Song Mr. Zhou Yun Jie...

  • Page 57
    ... Name of associated Name of director corporation Relationship with the Company (續) Number of Number of shares held share options held Capacity and nature of interest Ms. Yang Mian Mian Qingdao Haier Co., Ltd. ("Qingdao Haier Company's shareholder 286,336 2,025,000 (note Directly...

  • Page 58
    ...year At 31 December 2010 33ã€, Exercise price of share options (note 2) Exercise period per share of share options HK$ 2 1 Name or category of participant Date of grant of share options (note 1) Executive directors Mr. Zhou Yun Jie 7,900,000 - - - - 7,900,000 18/09/2009 Mr. Li Hua...

  • Page 59
    ... minor children, or were any such rights exercised by them; or was the Company, its holding company, or any of its subsidiaries or fellow subsidiaries a party to any arrangement to enable the directors to acquire such rights in any other body corporate. 43,380,000 Annual Report 2010 57

  • Page 60
    ... percentage Number of Shares Name of shareholder Notes interested of the Company's issued share capital Qingdao Haier Collective Asset Management Association ("Haier Collective Asset Management") Haier Corp Haier Investment Qingdao Haier Haier Shareholdings (Hong Kong) Limited ("Hong Kong Haier...

  • Page 61
    ... Shares held by Haier Investment as at 31 December 2010. Ms. Yang Mian Mian and Mr. Zhou Yun Jie, executive directors of the Company, and Mr. Wu Ke Song and Mr. Liang Hai Shan, nonexecutive directors of the Company, are also the members of the management committee of Haier Corp. 3. Haier Investment...

  • Page 62
    ... material transactions with Haier Corp, Haier Investment, their subsidiaries and associates (collectively referred to as "Haier Affiliates 2010 Notes 附註 Export sale of washing machines and water heaters Domestic sale of washing machines and water heaters Purchase of finished goods Purchase of...

  • Page 63
    ...domestic sales of washing machines and water heaters of the Group. The other service fee expenses include advertising fee, research and development fee, property rental and management fee, software fee, legal consulting service fee, catering and travel agency service fee, human resources service fee...

  • Page 64
    ... (xvii) The purchase of production and experimental equipment was charged at prices no less favourable than those offered by independent third parties. Upon the Group's completion of the acquisition of Qingdao Haier Logistics Group on 20 December 2010, Qingdao Haier Logistics Group had the following...

  • Page 65
    ... third parties. The interest income was determined with reference to the standard rates published by the People's Bank of China i) (續) （續） (ii) (ii) (iii) (iii) (iv) (iv) (v) (v) (vi) (vi) The independent non-executive directors of the Company have reviewed the...

  • Page 66
    HAIER ELECTRONICS GROUP CO., LTD REPORT OF THE DIRECTORS SUFFICIENCY OF PUBLIC FLOAT Based on information that is publicly available to the Company and within the knowledge of the directors, at least 25% of the Company's total issued share capital was held by the public as at the date of this ...

  • Page 67
    ... financial statements that give a true and fair view in accordance with International Financial Reporting Standards promulgated by the International Accounting Standards Board and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors...

  • Page 68
    ... In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2010, and of the Group's profit and cash flows for the year then ended in accordance with International Financial Reporting Standards and have...

  • Page 69
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED INCOME STATEMENT Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated REVENUE Cost of sales 5 35,806,672 (31,033,259) 12,877,993 (9,654,109 ) Gross profit Other income and gains Selling and distribution costs ...

  • Page 70
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Exchange differences on translation of foreign operations 1,007,487 499,295 ...

  • Page 71
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December 2010 31 December 2010 31 December 2009 1 January 2009 RMB'000 Restated Notes 附註 RMB'000 RMB'000 Restated NON-CURRENT ASSETS Property, plant and equipment Investment properties ...

  • Page 72
    ... 32 34(a) 2,248,843 303,688 1,527,611 91,297 1,485,859 (359,990 2,552,531 Non-controlling interests 191,343 1,618,908 131,728 1,125,869 95,673 Total equity 權益總值 2,743,874 1,750,636 1,221,542 Yang Mian Mian Chairman Zhou Yun Jie Director 主席 70 Annual Report 2010 è'£äº‹

  • Page 73
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2009 Attributable to the owners of the Company Equity component of convertible notes RMB'000 Notes 附註 Issued equity RMB'000 Capital reduction reserve RMB'000 Capital reserve...

  • Page 74
    ... GROUP CO., LTD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2010 Attributable to the owners of the Company Issued equity Capital reduction reserve Capital reserve Merger reserve Share option reserve Capital Reserve redemption funds reserve Retained profits...

  • Page 75
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Finance costs Share of profits and losses of jointly-controlled ...

  • Page 76
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated 1,562,769 766,830 Increase in inventories Increase in trade and bills receivables Increase in prepayments, deposits and other receivables...

  • Page 77
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated CASH FLOWS FROM INVESTING ACTIVITIES Dividend received from availablefor-sale investments Purchases of items of property, plant and ...

  • Page 78
    ... STATEMENT OF CASH FLOWS Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Share issue expenses Proceeds from issue of convertible bonds Capital contributions from non-controlling shareholders...

  • Page 79
    HAIER ELECTRONICS GROUP CO., LTD CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2010 2010 Notes 附註 RMB'000 2009 RMB'000 Restated ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Non-pledged cash and bank balances Time deposits with original maturity of less than ...

  • Page 80
    HAIER ELECTRONICS GROUP CO., LTD STATEMENT OF FINANCIAL POSITION 31 December 2010 2010 Notes 附註 NON-CURRENT ASSETS Investments in subsidiaries Due from subsidiaries RMB'000 2009... 1,603,356 1,815,565 Yang Mian Mian Zhou Yun Jie Chairman 主席 78 Annual Report 2010 Director è'£äº‹

  • Page 81
    ... FINANCIAL STATEMENTS 31 December 2010 1. CORPORATE INFORMATION Haier Electronics Group Co., Ltd. is a limited liability company incorporated in Bermuda. The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. In the opinion of the directors...

  • Page 82
    ... LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 1. CORPORATE INFORMATION (Cont'd) On 20 December 2010, Qingdao New Goodaymart Logistics Service Company Limited ("Qingdao NG"), a wholly-owned subsidiary of the Company, entered into an equity transfer agreement with Haier Corp pursuant to...

  • Page 83
    ... statements of changes in equity and consolidated statements of cash flows of the Group for the years ended 31 December 2010 and 2009 include the results, changes in equity and cash flows of all companies then comprising the Group and the Acquired Entities, as if the corporate structure of the Group...

  • Page 84
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.1 BASIS OF PREPARATION (Cont'd) Merger accounting for business combinations under common control (Cont'd) The financial positions previously reported by the Group at 31 December 2009 and 1 January 2009 have ...

  • Page 85
    ... these. Losses prior to 1 January 2010 were not reallocated between non-controlling interest and the parent shareholders. • Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value at the date control was lost. The carrying amount of such...

  • Page 86
    ... STATEMENTS 31 December 2010 2.2 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES The Group has adopted the following new and revised IFRSs for the first time for the current year's financial statements. IFRS 1 (Revised) IFRS 1 Amendments First-time Adoption of International Financial Reporting...

  • Page 87
    ...loss of control of a subsidiary. Consequential amendments were made to various standards, including, but not limited to IAS 7 Statement of Cash Flows, IAS 12 Income Taxes, IAS 21 The Effects of Changes in Foreign Exchange Rates, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures...

  • Page 88
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.2 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES (Cont'd) (b) Improvements to IFRSs 2009 issued in April 2009 sets out amendments to a number of IFRSs. There are separate transitional provisions for each ...

  • Page 89
    ... GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.3 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS (Cont'd) IFRS 9 IAS 12 Amendments Financial Instruments6 Amendments to IAS 12 Income Tax - Deferred Tax: Recovery of Underlying Assets5 Related Party...

  • Page 90
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.3 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS (Cont'd) In November 2010, the IASB issued additions to IFRS 9 to address financial liabilities (the "Additions") and incorporated in ...

  • Page 91
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.3 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS (Cont'd) (a) IFRS 3 Business Combinations: Clarifies that the amendments to IFRS 7, IAS 32 and IAS 39 that eliminate the exemption for...

  • Page 92
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Subsidiaries A subsidiary is an entity whose financial and operating policies the Company controls, directly or indirectly, so as to obtain benefits from its ...

  • Page 93
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Jointly-controlled entities A jointly-controlled entity is a joint venture that is subject to joint control, resulting in none of the participating parties...

  • Page 94
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Associates (Cont'd) The Group's investments in associates are stated in the consolidated statement of financial position at the Group's share of net assets...

  • Page 95
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Business combinations and goodwill (Cont'd) Business combinations not under common control from 1 January 2010 Under the acquisition method of accounting, ...

  • Page 96
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Business combinations and goodwill (Cont'd) Business combinations not under common control from 1 January 2010 (Cont'd) After initial recognition, goodwill...

  • Page 97
    ... prior to 1 January 2010: Business combinations were accounted for using the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest was measured at the proportionate share of the acquiree's identifiable...

  • Page 98
    ... is an associate; the party is a jointly-controlled entity; the party is a member of the key management personnel of the Group or its parent; (e) the party is a close member of the family of any individual referred to in (a) or (d); (e) (a)æˆ-(d b) (c) (d a i ii iii 96 Annual Report 2010

  • Page 99
    ... ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Related parties (Cont'd) (f) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power...

  • Page 100
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Property, plant and equipment and depreciation (Cont'd) Where parts of an item of property, plant and equipment have different useful lives, the cost of ...

  • Page 101
    ... method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangible assets are not amortised. The...

  • Page 102
    ... convention in the marketplace. The Group's financial assets include cash and bank balances, trade and other receivables and available-for-sale investments. Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows 39 100 Annual Report 2010

  • Page 103
    ..." below. The Group evaluates its financial assets at fair value through profit or loss (held for trading) to assess whether the intent to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management's intent to sell...

  • Page 104
    ... investments Available-for-sale financial investments are non-derivative financial assets in listed and unlisted equity and debt securities. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated at fair value through profit...

  • Page 105
    ... at cost less any impairment losses. The Group evaluates its available-for-sale financial assets to assess whether the ability and intention to sell them in the near term are still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management's intent...

  • Page 106
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is ...

  • Page 107
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Impairment of financial assets The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a ...

  • Page 108
    ... the current market rate of return for a similar financial asset. Impairment losses on these assets are not reversed. Available-for-sale financial investments For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that...

  • Page 109
    ... GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Impairment of financial assets (Cont'd) Available-for-sale financial investments (Cont'd) In the case of equity investments classified as available for sale, objective...

  • Page 110
    ... at fair value and in the case of loans and borrowings, plus directly attributable transaction costs. The Group's financial liabilities include trade and other payables and interest-bearing borrowings. Subsequent measurement The measurement of financial liabilities depends on their classification as...

  • Page 111
    ... ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Financial liabilities (Cont'd) Loans and borrowings After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost...

  • Page 112
    ...and form an integral part of the Group's cash management. For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use 110 Annual Report 2010

  • Page 113
    ... associated with investments in subsidiaries and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. 2.4 （續） Annual Report 2010 111

  • Page 114
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING ...accounting profit nor taxable profit or loss; and • in respect of deductible temporary differences associated with investments in subsidiaries and joint ventures, deferred...

  • Page 115
    ... is included in finance costs in the income statement. Provisions for installation services and product warranties granted by the Group on certain products are recognised based on sales volume and past experience of the level of installation services rendered, repairs or returns, discounted to their...

  • Page 116
    ... of the Group's operations. Employees (including directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ("equity-settled transactions"). The cost of equity-settled transactions with...

  • Page 117
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Share-based payment transactions (Cont'd) The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the...

  • Page 118
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Other employee benefits Pension schemes The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the "MPF Scheme") ...

  • Page 119
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Dividends Final dividends proposed by the directors are classified as a separate allocation of retained profits within the equity section of the statement ...

  • Page 120
    ... property leases on its property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases 118 Annual Report 2010

  • Page 121
    ... sell is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. When value in use calculations are undertaken, management must estimate the expected future cash flows from...

  • Page 122
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Cont'd) Estimation uncertainty (Cont'd) Useful lives of items of property, plant and equipment Management determines the estimated useful lives and related ...

  • Page 123
    ...461,000 (as restated); 1 January 2009: RMB270,711,000 (as restated)). Product warranty and installation provisions Product warranty and installation provisions are made based on sales volume and past experience of the level of installation services rendered, repairs or returns. The assessment of the...

  • Page 124
    ...(c) the integrated channel services segment provides logistics services as well as sells and distributes home appliance and other products procured from Haier Affiliates and other external parties. Management monitors the results of the Group's operating segments separately for the purpose of making...

  • Page 125
    ... FINANCIAL STATEMENTS 31 December 2010 4. OPERATING SEGMENT INFORMATION (Cont'd) Washing machine business 2009 RMB'000 RMB'000 2010 4. （續） Integrated channel services 2009 RMB'000 RMB'000 Restated 2010 Consolidated 2009 RMB'000 RMB'000 Restated 2010 Water heater business 2009...

  • Page 126
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 4. OPERATING SEGMENT INFORMATION (Cont'd) Washing machine business business 4 Integrated channel services Consolidated Water heater 31 December 2010 31 December 2009 RMB'000 1 January 2009... Corporate and...

  • Page 127
    ...'d) Washing machine business 2009 RMB'000 RMB'000 2010 4 Integrated channel services 2009 RMB'000 RMB'000 Restated 2010 Consolidated 2009 RMB'000 RMB'000 Restated 2010 Water heater business 2009 RMB'000 RMB'000 2010 Other segment information Share of profits and losses of jointly...

  • Page 128
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 4. OPERATING SEGMENT INFORMATION (Cont'd) Geographical information Over 90% of the Group's revenue is derived from customers in Mainland China and over 90% of the Group's non-current assets, other than financial...

  • Page 129
    ...NOTES TO FINANCIAL STATEMENTS 31 December 2010 5. REVENUE, OTHER INCOME AND GAINS Revenue, which is also the Group's turnover, represents the net invoiced value of goods sold, net of value-added tax and after allowances for returns and trade discounts; and the value of services rendered during...

  • Page 130
    ... TO FINANCIAL STATEMENTS 31 December 2010 6. PROFIT BEFORE TAX The Group's profit before tax is arrived at after charging: 6. 2010 Notes 附註 RMB'000 2009 RMB'000 Restated 8,404,008 1,231,600 87,384 1,076 2,473 915 81,190 5,100 Cost of inventories sold Cost of services provided...

  • Page 131
    ... Stock Exchange of Hong Kong Limited (the "Listing Rules") and Section 161 of the Hong Kong Companies Ordinance, is as follows: Group 8. 161 2010 RMB'000 2009 RMB'000 Fees Other emoluments: Salaries, allowances and benefits in kind Performance related bonuses Equity-settled share option...

  • Page 132
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 8. DIRECTORS' REMUNERATION (Cont'd) In the prior year, certain directors were granted share options, in respect of their services to the Group, under the share option scheme of the Company, further details of ...

  • Page 133
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 8. DIRECTORS' REMUNERATION (Cont'd) (b) Executive directors and non-executive directors Salaries, allowances and benefits in kind 8. (b) （續） Performance related bonuses Equity-settled share option ...

  • Page 134
    ... paid employee for the year are as follows: Group 9. 8 2010 RMB'000 2009 RMB'000 Salaries, allowances and benefits in kind Performance related bonuses Equity-settled share option expense Pension scheme contributions 639 330 11 100 18 - 1,004 - 980 1,122 132 Annual Report 2010

  • Page 135
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 9. FIVE HIGHEST PAID EMPLOYEES (Cont'd) The number of non-director, highest paid employees whose remuneration fell within the following bands is as follows: 9. （續） Number of employees 2010 2009...

  • Page 136
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 10. INCOME TAX (Cont'd) Group 10. （續） 2010 RMB'000 2009 RMB'000 Restated Current - Mainland China Underprovision in prior years Deferred (note 31) 31 624,546 3,249 (199,852) 137,466 1,070 ...

  • Page 137
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 10. INCOME TAX (Cont'd) Group - 2009 10. （續） Hong Kong RMB'000 Mainland China % RMB'000 Restated RMB'000 Restated) Total % % （重åˆ-） Profit/(loss) before tax (24,422 ) 669,014 ...

  • Page 138
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 13. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY The calculation of the basic earnings per share amount is based on the profit for the year attributable to ordinary equity holders of...

  • Page 139
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 13. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY (Cont'd) 13. （續） Number of shares 2010 2009 Shares Weighted average number of ordinary shares in issue during the year ...

  • Page 140
    ...in these financial statements, the Group had the following material transactions with Haier Affiliates during the year: 14. (a 2010 RMB'000 2009 RMB'000 Restated Export sale of washing machines and water heaters Domestic sale of washing machines and water heaters Purchase of finished goods...

  • Page 141
    ...) Limited ("Hong Kong Haier"), a wholly-owned subsidiary of Qingdao Haier. The convertible bonds were non-interest-bearing and were fully converted into 138,000,000 ordinary shares of the Company during the year. Further details of the transactions are included in note 29 to the financial statements...

  • Page 142
    ...NOTES TO FINANCIAL STATEMENTS 31 December 2010 14. RELATED PARTY TRANSACTIONS (Cont'd) (c) Compensation of key management personnel of the Group: 14. (c) （續） 2010 RMB'000 2009 RMB'000 Restated Short term employee benefits Post-employment benefits Equity-settled share option...

  • Page 143
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 15. PROPERTY, PLANT AND EQUIPMENT Group 15. Tools, furniture Plant and Buildings machinery and fixtures Motor... Cost at 1 January 2010, net of accumulated depreciation (as restated) Additions Disposals/write-...

  • Page 144
    ...NOTES TO FINANCIAL STATEMENTS 31 December 2010 15. PROPERTY, PLANT AND EQUIPMENT (Cont'd) Group (Cont'd) 15. （續） Tools, furniture Plant and and fixtures RMB'000 （續） Motor Construction vehicles 汽車 RMB'000 in progress RMB'000 Total 總計 RMB'000 Buildings machinery RMB...

  • Page 145
    ... GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 15. PROPERTY, PLANT AND EQUIPMENT (Cont'd) All buildings of the Group are erected on land in Mainland China held under medium term leases. As at 31 December 2010, certain of the Group's buildings with an aggregate net book...

  • Page 146
    ... building ownership certificates registered under the names of the respective subsidiaries of the Company. The Group obtained an undertaking from Haier Corp in relation to such defective property title issue, details of which are set out in note 15 to the financial statements. 144 Annual Report 2010...

  • Page 147
    ... Company, all of which were indemnified by Haier Corp as at 31 December 2010. Details of the undertakings granted by Haier Corp to the Company in relation to such title issue are set out in note 15 to the financial statements. 66,916,000 19,638,000 20,443,000 15ã€, Annual Report 2010 145

  • Page 148
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 18. INTANGIBLE ASSETS Group 18. Software RMB'000 Patents and licences RMB'000 Total RMB'000 31 December 2010 At 1 January 2010 (as restated): Cost Accumulated amortisation Net carrying amount Cost at 1 ...

  • Page 149
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 19. INVESTMENTS IN SUBSIDIARIES Company 19. 2010 RMB'000 2009 RMB'000 Unlisted investments, at cost Impairment (note) 1,685,012 (2,003) 1,745,393 (2,075 ) 1,683,009 1,743,318 Note: An impairment ...

  • Page 150
    ... and sales of washing machines 20,000 25 74.02 Manufacture and sales of accessories for electrical appliances Qingdao New Goodaymart Logistics Service Co., Ltd Previously known as Haier Indesit (Qingdao) Washing Machine Co., Ltd 148 Annual Report 2010 PRC/ Mainland China USD24...

  • Page 151
    ... Company Principal activities RMB'000 Direct Indirect Qingdao Haier Electronics Sales Co., Ltd PRC/ Mainland China 5,000 50 50 Sales of washing machines and water heaters Qingdao Haier Drum Washing Machine Co., Ltd Qingdao Economy and Technology Development Zone Haier Water Heater...

  • Page 152
    ...-foreign equity joint venture enterprise under PRC law ** Registered as a limited liability company under PRC law *** Registered as a wholly-foreign-owned enterprise under PRC law * The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally...

  • Page 153
    ...to the financial statements. Particulars of the jointly-controlled entities were as follows: Nominal value of registered Place of Name registration 26å...§æŠ«éœ²ã€, Percentage of Voting power Profit sharing Principal activities capital Ownership RMB'000 interest Hefei Haier Logistics Company...

  • Page 154
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 20. INTERESTS IN JOINTLY-CONTROLLED ENTITIES (Cont'd) The following table illustrates the summarised financial information of the Group's jointly-controlled entities: Share of the jointly-controlled entities' ...

  • Page 155
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 21. AVAILABLE-FOR-SALE INVESTMENTS 21. 31 December 2010 31 December 2009 RMB'000 RMB'000 Restated 1 January 2009 RMB'000 Restated Unlisted equity investments, at cost 6,000 7,670 7,670 As at 31 ...

  • Page 156
    ... limit. The Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group's trade receivables relate to a large number of diversified customers...

  • Page 157
    ... for whom there was no recent history of default. Receivables that were past due but not impaired relate to a number of customers that have a good track record with the Group. Based on past experience, the directors of the Company are of the opinion that no provision for impairment is necessary...

  • Page 158
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 23. TRADE AND BILLS RECEIVABLES (Cont'd) The Group pledged bills receivable of approximately RMB518,137,000 (2009: RMB 305,738,000 (as restated); 1 January 2009...122,725 106,324 783 804 156 Annual Report 2010

  • Page 159
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 24. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES (Cont'd) The movements in provision for impairment of other receivables are as follows: 24. （續） Group 2010 RMB'000 2009 RMB'000 Company 2010 RMB'000...

  • Page 160
    ...CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 25. CASH AND CASH EQUIVALENTS 25. Group 31 December 2010 31 December 2009 RMB'000 RMB'000 Restated RMB'000 Restated RMB'000 Company 1 January 31 December 2009 2010 31 December 2009 RMB'000 Cash and bank balances Time deposits...

  • Page 161
    ... are deposits of approximately RMB691,873,000 (2009: RMB910,663,000 (as restated); 1 January 2009: RMB542,430,000 (as restated)) placed with Haier Group Finance Co., Ltd. ("Haier Finance"), a financial institution approved by the People's Bank of China. The interest rates on these deposits ranged...

  • Page 162
    ... related parties are set out in note 14 to the financial statements. 26. 介乎30至90 （續） 590,936,000 807,756,000 785,418,000 102,715,000 123,863,000 14ã€, Certain of the Group's bills payable are secured by the pledge of the Group's bank deposits amounting to RMB391,000 (2009...

  • Page 163
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 27. OTHER PAYABLES AND ACCRUALS 27. Group 31 December 2010 31 December 2009 RMB'000 RMB'000 Restated RMB'000 Restated RMB'000 Company 1 January 31 December 2009 2010 31 December 2009 RMB'000 Other ...

  • Page 164
    ...were guaranteed by Haier Corp. Further details of the interest expenses attributable to the loans borrowed from Haier Finance are set out in note 14 to the financial statements. All borrowings bore interest at floating interest rates and were denominated in RMB. 14ã€, 162 Annual Report 2010

  • Page 165
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 29. CONVERTIBLE BONDS On 22 October 2010 and 6 December 2010, the Company issued convertible bonds in principal amounts of HK$330,000,000 (equivalent to RMB283,993,000) and HK$456,600,000 (equivalent to RMB388,...

  • Page 166
    ... on washing machines and water heaters, under which faulty products are repaired or replaced. The amount of the provision for the warranties is estimated based on sales volume and past experience of the level of installation services rendered, repairs and returns. The estimation basis is reviewed on...

  • Page 167
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 31. DEFERRED TAX The movements in deferred tax assets (mainly relating to accruals and provisions) and deferred tax liabilities (mainly relating to withholding taxes) during the year are as follows: Group 31....

  • Page 168
    ...treaty between Mainland China and the jurisdiction of the foreign investors. For the Group, the applicable rate is 10%. The Group is therefore liable to withholding taxes on dividends distributed by those subsidiaries established in Mainland China in respect of earnings generated from 1 January 2008...

  • Page 169
    ...Haier Group became the controlling shareholders of the Company through the injection of its equity interests in certain subsidiaries (the "Relevant Subsidiaries") principally engaging in the manufacture and sale of top loading washing machines and mobile phones to the Company. Accordingly, the Group...

  • Page 170
    ... of the deemed distributions) in respect of the Reorganisation (ii) the amount of share capital (including share premium) of the Company issued for the acquisition of certain subsidiaries principally engaged in the manufacture and sale of front loading washing machines and water heaters in 2006 (iii...

  • Page 171
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 32. ISSUED EQUITY (Cont'd) Company Shares 32. （續） 2010 HK$'000 2009 HK$'000 千港å...ƒ Authorised: 30,000,000,000 (2009: 30,000,000,000) shares of HK$0.1 each 法定： 30,000,000,000 30,000,000,000...

  • Page 172
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 32. ISSUED EQUITY (Cont'd) A summary of the transactions during the year involving the Company's issued share capital is as follows: 32. 下： （續） Issued Number of shares in issue share capital RMB'...

  • Page 173
    ... of the Share Option Scheme include any employee, executive or officer of the Group (including executive and non-executive directors of the Company) and any supplier, consultant, agent, adviser, shareholder, customer, partner, business associate who, in the option of the board of directors of the...

  • Page 174
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 33. SHARE OPTION SCHEME (Cont'd) The maximum number of shares in respect of which options may be granted under the Share Option Scheme is such number of shares, when aggregated with shares subject to any other ...

  • Page 175
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 33. SHARE OPTION SCHEME (Cont'd) The exercise price of the share options is determinable by the Board, but may not be less than the highest of (i) the closing price of the shares of the Company as stated in the ...

  • Page 176
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 33. SHARE OPTION SCHEME (Cont'd) The exercise prices and exercise periods of the share options outstanding as at the end of the reporting period are as follows: 2010 Exercise price HK$ per share 1.70 33. ...

  • Page 177
    ... model used: 33. （續） 2010 Management staff and key employees Directors and management staff 2009 External consultants Expected dividend yield (%) Expected volatility (%) Risk-free interest rate (%) Life of options (year) Weighted average share price (HK$ per share) 1.04 66.42...

  • Page 178
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 33. SHARE OPTION SCHEME (Cont'd) At the date of approval of these financial statements, the Company had 98,440,000 share options outstanding under the Share Option Scheme, which represented approximately 4.4% of...

  • Page 179
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 34. RESERVES (Cont'd) (b) Company Share account surplus 34. (b) （續） Equity Capital reserve Exchange reserve Share option reserve profits component Retained of convertible bonds Total premium ...

  • Page 180
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 34. RESERVES (Cont'd) (b) Company (Cont't) The contributed surplus of the Company represents the excess of the fair value of the shares of the subsidiaries acquired, over the nominal value of the Company's ...

  • Page 181
    ... TO FINANCIAL STATEMENTS 31 December 2010 35. ACQUISITION OF SUBSIDIARIES (Cont'd) (ii) On 20 October 2010, Qingdao Haier Logistics acquired the remaining 50% equity interest in Hefei Goodaymart Logistics Co., Ltd. ("Hefei Goodaymart Logistics") from Qingdao Haier Component Procurement Company...

  • Page 182
    ...December 2010 37. OPERATING LEASE ARRANGEMENTS (a) As lessor The Group leases its investment properties (note 16 to the financial statements) to Haier Affiliates under operating lease arrangements, with leases negotiated for a term of three years. At the end of the reporting period, the Group had...

  • Page 183
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 37. OPERATING (Cont'd) (b) As lessee LEASE ARRANGEMENTS 37. (b) （續） The Group leases certain properties under operating lease arrangements. Leases for the properties are negotiated for terms ranging ...

  • Page 184
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 38. COMMITMENTS In addition to the operating lease commitments detailed in note 37(b) above, the Group had the following commitments at the end of the reporting period: Group 38. 37(b 2010 RMB'000 2009 ...

  • Page 185
    ... LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 39. FINANCIAL INSTRUMENTS BY CATEGORY The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows: Group 39. Financial assets 31 December 2010 Loans and receivables RMB...

  • Page 186
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 39. FINANCIAL INSTRUMENTS BY CATEGORY (Cont'd) Financial assets (Cont'd) 1 January 2009 39. （續） （續） Availablefor-sale Loans and receivables RMB'000 Restated financial assets RMB'000 Restated...

  • Page 187
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 39. FINANCIAL INSTRUMENTS BY CATEGORY (Cont'd) Group 39. （續） Financial liabilities 31 December 2010 31 December 2009 Financial liabilities at amortised cost Financial liabilities at amortised cost RMB...

  • Page 188
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 39. FINANCIAL INSTRUMENTS BY CATEGORY (Cont'd) Financial liabilities (Cont'd) The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows: Company...

  • Page 189
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 40. FAIR VALUE The carrying amounts and fair values of the Group's and the Company's financial instruments are as follows: Group 40. Carrying amounts 31 December 2010 31 December 2009 RMB'000 RMB'000 ...

  • Page 190
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 40. FAIR VALUE (Cont'd) Group 40. （續） Fair values 31 December 2010 31 December 2009 RMB'000 RMB'000 Restated 1 January 2009 RMB'000 Restated Financial assets Trade and bills receivables Other ...

  • Page 191
    ...NOTES TO FINANCIAL STATEMENTS 31 December 2010 40. FAIR VALUE (Cont'd) The carrying amounts and fair values of the Group's and the Company's financial instruments are as follows: Company 40. å¦,下： （續） Carrying amounts Fair values 2010 RMB'000 2009 RMB'000 2010 RMB'000...

  • Page 192
    ...year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are foreign currency risk, credit risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and they...

  • Page 193
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) 41. （續） Increase/(decrease) Increase/(decrease) in exchange rates in profit before tax % RMB'000 31 December 2010 If RMB strengthens ...

  • Page 194
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) 41. Increase/(decrease) in exchange rates （續） Increase/(decrease) in profit before tax RMB'000 31 December 2009...192 Annual Report 2010

  • Page 195
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) Credit risk The Group trades only with recognised and creditworthy third parties. It is the Group's policy that all customers who wish to trade on ...

  • Page 196
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) Liquidity risk (Cont'd) The maturity profile of the Group's financial liabilities as at the end of the reporting period, based on the contractual ...

  • Page 197
    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) Liquidity risk (Cont'd) 1 January 2009 41. （續） （續） On demand or no fixed terms of repayment RMB'000 Restated RMB'000 Restated ...

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    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) Liquidity risk (Cont'd) 31 December 2009 41. （續） （續） On demand or no fixed terms of repayment RMB'000 RMB'000 RMB'000 RMB'000 ...

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    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont'd) Capital management (Cont'd) The Group monitors capital using a gearing ratio, which is total debt divided by total equity. The Group's policy is to ...

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    HAIER ELECTRONICS GROUP CO., LTD NOTES TO FINANCIAL STATEMENTS 31 December 2010 42. EVENTS AFTER THE REPORTING PERIOD (a) On 29 December 2010, Chongqing New Goodaymart Appliance Sales Co., Ltd. (the "Purchaser"), a wholly-owned subsidiary of the Company, entered into a sale and purchase ...

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    ... for business combinations under common control, the comparative amounts have been restated. 43. 2.1及2.4 44. APPROVAL OF THE FINANCIAL STATEMENTS The financial statements were approved and authorised for issue by the board of directors on 29 March 2011. 44. Annual Report 2010 199

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    ... RESULTS CONTINUING OPERATIONS REVENUE Cost of sales Gross profit Other income and gains Selling and distribution costs Administrative expenses Other expenses Finance costs Share of profits and losses of jointly-controlled entities PROFIT BEFORE TAX Income tax expense PROFIT FOR THE YEAR FROM...

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