长虹美菱股份有限公司
CHANGHONG MEILING CO., LTD.
二〇一九年年度报告
Annual Report 2019
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Changhong
Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious
statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities,
individual and/or joint, for the reality, accuracy and completion of the whole contents.
Mr. Wu Dinggang, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work and Mr.
Yang Jun, person in charge of accounting organ (accountant in charge) hereby confirm that the Financial Report of
2019 Annual Report is authentic, accurate and complete.
The Company did not have directors, supervisors and senior executives of the Company could not guarantee
the reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Report on site and by communication.
Modified audit opinions notes
□ Applicable √ Not applicable
Shine Wing Certified Public Accountants Co., Ltd. (LLP) issued standard unqualified Auditors‘ Report for
the Company‘s Financial Report of 2019.
Major defects in internal control
□ Applicable √Not applicable
The Company had no major defects in internal control in the reporting period.
Risk warning of concerning the forward-looking statements with future planning involved in annual report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they do not
constitute a substantial commitment for investors, investors and the person concerned should maintain adequate
risk awareness, furthermore, differences between the plans, forecast and commitments should be comprehended.
Investors are advised to exercise caution of investment risks.
Investors are advised to read the full text of annual report, and pay particular attention to the following risk
factors:
More details about the possible risks and countermeasures in the operation of the Company are described in
the report ―IX. Prospects for the future development of the company‖ of ―Section IV. Analysis and discussion of
the operation‖, investors are advised to read the relevant content.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure for year of 2020 that appointed by the Company.
All public information under the name of the Company disclosed on the above said media and website shall
prevail, and investors are advised to exercise caution.
Does the Company need to comply with disclosure requirements of the special industry: no
Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in the
reporting period
√ Applicable □ Not applicable
Whether has capitalizing of common reserves carried out
□Yes √ No
The profit distribution plan for year of 2019, that deliberated and approved by 36th session of the 9th BOD
was: take total shares of 1,044,597,881 shares as base dated 31 December 2019, distributed 0.50 Yuan (tax
included) bonus in cash for every 10-share hold by all shareholders, no share bonus issued and no capitalizing of
common reserves carried out.
Directors, supervisors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2019 Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2019 Annual Report.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Contents
Section I. Important Notice, Contents and Interpretation ............................................................. 1
Section II Company Profile and Main Financial Indexes .............................................................. 5
Section III. Summary of Company Business ................................................................................. 11
Section IV. Discussion and Analysis of the Operation .................................................................. 19
Section V. Important Events............................................................................................................ 60
Section VI. Changes in shares and particular about shareholders............................................ 141
Section VII. Preferred Stock ......................................................................................................... 149
Section VIII. Convertible Bonds ................................................................................................... 150
Section IX. Particular about Directors, Supervisors, Senior Executives and Employees ....... 151
Section X. Corporate Governance ................................................................................................ 165
Section XI. Corporate Bond .......................................................................................................... 181
Section XII. Financial Report ....................................................................................................... 182
Section XIII. Documents available for Reference ....................................................................... 350
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Interpretation
Items Refers to Contents
Company, The Company, Changhong Meiling
Refers to CHANGHONG MEILING CO.,LTD.
or Meiling Electric
Sichuan Changhong or controlling shareholder Refers to Sichuan Changhong Electric Co., Ltd.
Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED
Meiling Group Refers to Hefei Meiling Group Holdings Limited
Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd.
Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)
Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd.
Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd.
Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co., Ltd.
Changhong Ridian Refers to Guangdong Changhong Ridian Technology Co., Ltd.
Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., Ltd.
Changmei Technology Refers to Changmei Technology Co., Ltd.
Changhong Huayi Refers to Changhong Huayi Compressor Co., Ltd.
Meiling CANDY Refers to Meiling CANDY Washing Machine Co., Ltd.
Zhiyijia Company Refers to Sichuan Zhiyijia Network Technology Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
China Securities Regulatory Commission, Anhui Province Securities
Anhui Securities Bureau Refers to
Regulatory Bureau
SSE Refers to Shenzhen Stock Exchange
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section II Company Profile and Main Financial Indexes
I. Company profile
Changhong Meiling, Hongmeiling
Short form of the stock Stock code 000521, 200521
B
Short form of the Stock after
N/A
changed (if applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in Chinese) 长虹美菱股份有限公司
Short form of the Company (in
长虹美菱
Chinese)
Foreign name of the Company (if
CHANGHONG MEILING CO.,LTD.
applicable)
Abbr. of English name of the
CHML
Company (if applicable)
Legal representative Wu Dinggang
Registrations add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Code for registrations add 230601
Offices add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Codes for office add. 230601
Website http://www.meiling.com
E-mail info@meiling.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Xia Zhu Wenjie
No. 2163, Lianhua Road, Economic and Technology No. 2163, Lianhua Road, Economic and
Contact add.
Development Zone, Hefei Technology Development Zone, Hefei
Tel. 0551-62219021 0551-62219021
Fax. 0551-62219021 0551-62219021
e-mail lixia@meiling.com wenjie.zhu@meiling.com
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times, China Securities Journal, Hong Kong Commercial Daily
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Website for annual report publish appointed by CSRC Juchao website: http://www.cninfo.com.cn
Room of secretary of the Board, 2/F , administrative center, Office
Preparation place for annual report
building of the Company
IV. Registration changes of the Company
Organization code Uniform social credit code: 9134000014918555XK
Changes of main business
No changes
since listing (if applicable)
1. In October 1993, after initial listing, controlling shareholder of the Company-- Hefei Meiling
Industrial Corp. (renamed as Hefei Meiling Group Co., dated 23 May 1994), executing controlling rights
of the Company and management right of the state-owned assets on behalf of Hefei State-owned Assets
Management Office, named at that time;
2. From November 1997 to May 2003, controlling shareholder of the Company was Hefei Meiling
Group Holding Co., Ltd. (established base on former Meiling Group Co.,, ―Meiling Group‖ for short), an
enterprise solely owned by the State; mainly operating the state-owned capital in authorized from
State-owned Assets Management Commission of Hefei City, ensuring the maintenance and appreciation
of state-owned assets;
3. On 29 May 2003, Meiling Group entered into ―Equity Transfer Agreement‖ with Shunde GreenKel
Enterprise Development Co., ltd. (―GreenKel‖), the 82,852,683 state-owned shares held by the Company
was transfer to GreenKel. After transferring, GreenKel comes to the first largest shareholder of the
Company.
4. According to the spirit of ―Bulletin of Treatment Opinions on GreenKel Company purchasing
State-owned Assets Shares of Listed Company‖ (GZFCQ[2006] No.: 44) jointly issued from SASAC and
Ministry of Finance in April 2006, Meiling Group took back the Meiling Electric 82,852,683 shares from
Previous changes for
GreenKel by procedures, which has been transferred. In September 2006, relevant equity transfer
controlling shareholders (if
agreement signed between the Meiling Group and GreenKel is invalid, which was confirmed by the
applicable)
―Award‖ ((2006) HZZ No.: 104) issued from arbitration commission of Hefei; the state-owned legal
person‘s 82,852,683 shares, held by GreenKel, should return to Meiling Electric, and relevant equity
consideration will pay to GreenKel by Meiling Group . On 29 December 2006, the 82,852,683 shares of
Meiling Electric were transfer to Meiling Group by GreenKel, and Meiling Group becomes the
controlling shareholder of Meiling Electric again.
5. On 18 May 2006 and 11 January 2007, Meiling Group entered into ―Equity Transfer Agreement of
Meiling Electric‖ and ―Supplementary Agreement of Equity Transfer of Meiling Electric‖ respectively
with Sichuan Changhong and Changhong Group, among the 123,396,375 shares held by Meiling Group,
82,852,683 shares were transferred respectively to Sichuan Changhong and Changhong Group according
to the transfer way regulated in agreement; of this transferring, 45,000,000 shares (10.88% of total share
capital of the Company) were transferred to Sichuan Changhong, the first largest shareholder of the
Company while 37,852,683 shares (9.15% of total share capital of the Company) were transferred to
Changhong Group, the third largest shareholder of the Company.
6. On 29 October 2008, Changhong Group and Sichuan Changhong entered into ―Equity Transfer
Agreement of Hefei Meiling Co., Ltd.‖, the 32,078,846 restricted circulations A shares of Meiling
Electric held by Changhong Group were transferred by agreement to Sichuan Changhong. On 23
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
December 2008, the aforesaid equity transfer was approved by ―Reply on Matters of Equity held by
State-owned Shareholders of Hefei Meiling Co., Ltd.‖ (GZCQ(2008) No.: 1413) from SASAC; on 21
January 2009, the aforesaid transfer was registered for ownership transfer in Shenzhen Branch of China
Securities Depository and Clearing Corporation Limited. With this, the first majority shareholder of the
Company comes to Sichuan Changhong.
7. From 12 November 2018 to 25 February 2019, Sichuan Changhong and its concerted action Hong
Kong Changhong totally buys 16,231,024 shares of the Company through the secondary market by
bidding (including A-stock of 13,751,756 shares and B-stock of 2,479,268 shares), a 1.55% in total share
capital of the Company. After stake enlarge, Sichuan Changhong and its concerted action Hong
Kong Changhong holds 281,832,434 shares of the Company in total, a 26.98% of the total share capital
of the Company; of which, Sichuan Changhong directly holds 248,457,724 A-share of the
Company, a 23.79% in total share capital of the Company while Hong Kong Changhong holds
circulation B-share of the Company amounting as 33,374,710 shares, a 3.19% in total share capital of the
Company.
8. Ended as 31 December 2019, Sichuan Changhong and its concerted action Hong Kong Changhong
totally holds 281,832,434 shares of the Company, a 26.98% in total share capital of the Company;
Sichuan Changhong directly holds 248,457,724 A-share of the Company, a 23.79% in total share capital
of the Company while Hong Kong Changhong holds circulation B-share of the Company amounting as
33,374,710 shares, a 3.19% in total share capital of the Company.
V. Other relevant information
(I) CPA engaged by the Company
Name of CPA Shine Wing Certified Public Accountants (LLP)
8/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Cheng District, Beijing,
Offices add. for CPA
P.R.C
Signing Accountants Li Xifu, Xia Cuiqiong
(II) Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
(III) Financial consultant engaged by the Company for performing continuous supervision duties in
reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
2019 2018 Changes over last year 2017
Operating income (RMB) 16,553,252,894.93 17,490,174,950.01 -5.36% 16,797,436,757.36
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Net profit attributable to
shareholders of the listed company 56,441,479.14 38,658,256.97 46.00% 32,473,204.92
(RMB)
Net profit attributable to
shareholders of the listed company
after deducting non-recurring gains -50,454,661.39 -3,142,791.01 -1505.41% -97,705,959.02
and losses (RMB)
Net cash flow arising from
operating activities (RMB) 1,285,003,985.04 -220,560,615.36 682.61% -551,501,994.74
Basic earnings per share
(RMB/Share) 0.0540 0.0370 45.95% 0.0311
Diluted earnings per share
(RMB/Share) 0.0540 0.0370 45.95% 0.0311
0.36 percentage points
Weighted average ROE 1.13% 0.77% 0.64%
up
Changes over end of
Year end of 2019 Year end of 2018 Year end of 2017
last year
Total assets (RMB) 14,202,233,615.47 15,561,810,184.54 -8.74% 15,961,511,966.81
Net assets attributable to
shareholder of listed company 5,004,947,673.36 5,015,730,486.57 -0.21% 5,051,066,095.31
(RMB)
The cause of the accounting policy change and accounting error correction
□ Applicable √ Not applicable
Whether have corporate bonds or not
□Yes √ No
VII. Accounting data difference under domestic and foreign accounting standards
(I) Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting
period.
(II) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules
and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □ Not applicable
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
In RMB
Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed
company company
Amount at
Amount in this period Amount in last period Amount at period-end
period-begin
Chinese GAAP 56,441,479.14 38,658,256.97 5,004,947,673.36 5,011,972,907.54
Items and amount adjusted by foreign accounting rules
Foreign accounting rules 56,441,479.14 38,658,256.97 5,004,947,673.36 5,011,972,907.54
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign
accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
(III) Reasons for the differences of accounting data under accounting rules in and out of China
√ Applicable □ Not applicable
The ―Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares Offering‖ was issued
from CSRC dated 12 September 2007, since the day issuing, cancel the previous ―dual audit‖ requirement for
companies who offering domestically listed foreign shares (B-share enterprise) while engaging securities practice
qualification CPA for auditing. The Company did not compile financial report under foreign accounting rules
since 2007, the financial report of the Company is complying on the ―Accounting Standard for Business
Enterprise‖ in China, and therefore, there are no differences of accounting data under accounting rules in and out
of China at period-end.
VIII. Quarterly main financial index
In RMB
Q1 Q2 Q3 Q4
Operating income 4,222,693,607.41 4,910,469,073.53 3,907,875,881.65 3,512,214,332.34
Net profit attributable to shareholders
60,526,575.53 -6,192,552.96 26,417,996.84 -24,310,540.27
of the listed company
Net profit attributable to shareholders
of the listed company after deducting 36,385,461.05 -31,910,064.20 8,955,796.33 -63,885,854.57
non-recurring gains and losses
Net cash flow arising from operating
-921,543,887.11 1,295,027,887.30 -172,257,908.29 1,083,777,893.14
activities
Whether there are significant differences between the above-mentioned financial index or its total number and the
relevant financial index disclosed in the company‘s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of non-recurring profit (gains)/losses
√ Applicable □ Not applicable
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
In RMB
Item 2019 2018 2017 Note
Gains/losses from the disposal of non-current asset
Found more in ―Income
(including the write-off that accrued for impairment -9,537,945.52 787,721.32 -8,203,782.90
from assets disposal‖
of assets)
Governmental subsidy reckoned into current
‖Found more in ―Other
gains/losses (not including the subsidy enjoyed in
103,813,820.02 90,401,997.63 68,403,702.36 income‖, ―Non-operation
quota or ration according to national standards,
income‖
which are closely relevant to enterprise‘s business)
‖Found more in
Gains and losses arising from contingent proceedings
-13,050,649.33 ―Non-operation
irrelevant to normal operation of the Company
expenditure‖
Losses/gains from changes of fair values occurred in
holding trading financial assets, derivative financial
assets, trading financial liabilities and derivative
financial liabilities, and investment income obtaining Found more in ―Income
from the disposal of trading financial assets, 27,685,917.00 -18,928,688.87 92,846,391.02 of fair value changes‖,
derivative financial assets, trading financial liability, ―Investment income‖
derivative financial liability and other debt
investment, excluded effective hedging business
relevant with normal operations of the Company
Reversal of the account receivable and contract assets Found more in ―Account
depreciation reserves subject to separate impairment 1,936,952.67 2,543,553.45 receivable/other account
test receivable‖
Found more in
Other non-operating income and expenditure except
1,070,165.28 -2,614,761.68 2,680,908.22 ―Non-operation income
for the aforementioned ones
& expenditure‖
Less: impact on income tax 15,170,286.77 16,236,806.66 24,087,520.95 --
Impact on minority shareholders‘ equity
2,902,482.15 1,101,317.88 1,460,533.81 --
(post-tax)
Total 106,896,140.53 41,801,047.98 130,179,163.94 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
The Company has no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A
Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, in
the period.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
(i) Main businesses of the Company
The Company is one of China's major electric appliance manufacturers, possesses four major domestic
manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas manufacturing bases in
Indonesia and Pakistan. Currently, we have completed the industry layout of white electricity basically, covering
the full product line including refrigerator, washing machine, air conditioner, kitchen and bath, small household
appliances and others, at the same time, the Company enters the new industrial fields as bio-medical and with
certain achievements made.
Over the past 30 years, the Company has always been adhering to the "independent innovation, created in
China", and always focus on refrigeration industry without stop, elaborately building the core competitiveness of
enterprises by technological innovation and product innovation. The company has set up the first RoHS public
testing center in Anhui Province, the state-level enterprise technology center and the top-end R & D team, so that
Meiling can continue to achieve breakthrough results in the variable frequency, intelligence, refreshment,
thin-wall, energy-saving, forced air cooling, deep cooling and other fields. In recent years, the Company has
successively awarded many honors such as the ―Smart Refrigerator Intelligent Manufacturing Pilot Demonstration
Project‖, the ―National Green Factory‖, the ―National Industrial Design Center‖, the ―Green Pioneer Enterprise
for year of 2019‖ and ―Leading Brand of Preservation Technology in China‘s Refrigeration Industry for year of
2019‖. Meanwhile, in 2019, the company‘s M Fresh full-thin series products performed well, three M Fresh
full-thin refrigerators (BCD-482WQ3M, BCD-681WQ3S, BCD-686WQ3M) won the Reddot Design Award. The
full-thin 656WQ3M refrigerator won the 2019 AWE Award, and the full thin BCD-501WQ3S refrigerator won the
―Jiadian‖ logo of China Household Electrical Appliances Research Institute. In addition, M-fresh full thin series
refrigerators set three world records of the World Record Association, i.e. ―the domestic refrigerators with
minimum embedded distance in the world‖, ―the domestic refrigerators with maximum volume ratio in the world‖,
and ―the domestic refrigerators with widest storage temperature range in the world‖, which demonstrated
Meiling's strong brand strength and innovation ability once again.
In recent years, driven by the industry transformation and upgrades and consumption upgrades, the Company
has adhered to the strategy of smart and variable frequency products, promoted the Company‘s products to
transform and upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness of
products in the industry by grasping the opportunities of ―refreshment‖, ―thin-wall‖, air cooling and energy
efficiency upgrades and effectively resolving the pain points of customers. Under the guidance of the ―intelligent‖
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
strategy, since 2014, the Company has released and listed a number of CHiQ series of smart refrigerators and
air-conditioning products, and continue to promote intellectualized and high-end products. Especially the ―M
Fresh Life‖ series of refrigerators equipped with water molecule activation and preservation technology launched
in 2017, and the Company has released the M Fresh Life high-end new products ―comprehensive thin‖ series
refrigerators with thin body, thin box and thin door in 2019, solve the pain points of users effectively. At the same
time, in order to seize the opportunity of energy efficiency upgrade and consumption upgrade, the Company's
frequency conversion products accounted for an increasing proportion with the advantage of frequency conversion
technology application.
Facing the future, the Company will further improve the home internet layout, accelerate the
intelligentization of home appliances, form a dual-growth engine of ―hardware + services‖, drive the
transformation and upgrading of the Company‘s profitability model, investigate the new value-added service
models for home appliance enterprises, meet new competition pattern in the industry, and achieve its own
sustainable and stable development under the guidance of the core values of ―professionalism and shared
development‖. Meanwhile, based on the ―Smart Home Eco-system Project‖ and the existing products, the
company will enhance the R&D, manufacturing, sales and cooperative capabilities of integrated white goods so as
to provide users with a complete set of smart white goods system solutions.
In reporting period, main income of the Company coming from refrigerator (freezer), air conditioner,
washing machine, kitchen & toilet and small home appliances products, total amounting to 15,241.6670
million Yuan, a 92.08% of the operating income.
(ii) Conditions of the industry the company involved
In 2019, the international trade situation was complex and changeable, competition in the domestic market
was further intensified, home appliance companies were gradually slowing down the pace of external expansion,
and the endogenous growth momentum was significantly enhanced. At the same time, affected by factors such as
the structural upgrade of home appliances, diversified integration of channels, brand transformation, asset
restructuring, and cross-border entry, China's home appliance industry has been struggling to overcome internal
and external problems, and the industry's overall operation has remained stable.
1.refrigerator industry
In 2019, the high pressure of the upstream raw materials in the refrigerator industry came to an end
temporarily, the production pressure and profit pressure on the enterprise side have been alleviated significantly,
and the refrigerator industry departing from the high pressure of the cost entered a new development cycle. In the
new cycle, the market maintained a demand structure that focused on renewed demand and supplemented by new
demand. The average market price declined significantly, and the overall market showed a slight increase in
demand, and going down in retail sales. According to the All View Cloud (AVC) omnichannel data, the China‘s
retail volume of refrigerator market in 2019 was 32.78 million units, an increase of 0.2% on a year-on-year basis,
retail sales amounted as 91.2 billion Yuan, decreased 4.8% from a year earlier, the refrigerator industry entered the
new development cycle of product price decline.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
2. Air conditioning industry
Under the influence of economic downturn, poor real estate performance, and increasing rural market
holdings, the air-conditioning industry encountered a ―cold year‖ in 2019. From the perspective of the demand
side, the real estate market was sluggish, and the demand for the third- and fourth-tier markets was insufficient.
From the perspective of the supply side, the continuous increasing brands in the air-conditioning market, the
excess production capacity of the industry, the leading companies‘ continuous expansion of their production
capacity, and the demand for performance growth resulted in oversupply in the industry, and constituted the
inevitable background for the price war to return to the market. In addition, in the traditional sales season of the
air-conditioning industry in May and June, the enthusiasm of the market was relatively low, leading to increased
market competition. In order to cope with market pressure, big brands made price-off promotions to drive the
market demand, and the production space of small and medium-sized brands was squeezed.
3. Washing machine industry
Despite that the macroeconomic situation in 2019 was severe and China‘s home appliance industry faced
three dilemmas, i.e. insufficient growth momentum, high operating costs, and decentralized user traffic, the
washing machine industry has performed steadily under such circumstances, and the retail market has grown
beyond expectations. The washing machine market benefited from significant product upgrades and achieved a
small increase. Front-loading washing machines with dryer were well received by consumers; clothes dryer
products attracted consumer attention, and the market size expanded rapidly, increasing by nearly 50%. According
to the All View Cloud (AVC) omnichannel data, the retail volume of washing machine market in 2019 was 38.31
million units, retail sales amounted as 76.4 billion Yuan, an increase of 3.9% and 2.5% respectively on a y-o-y
basis.
On the whole, in the context of the complex and changeable international trade situation and the new normal
of China's economic development, the market competition in home appliance industry was intensifying. At the
same time, in the context of continued lack of stimulus in the real estate market, no obvious positives in macro
economy, and the awakening of consumers‘ autonomous consumption consciousness, the emerging categories of
products in the home appliance market became bright spots, consumer demand for home appliances entered a
period of renewal, and online and offline sales channels tended to balanced and stable development. In the
medium and long term, as domestic residents' income continued to grow steadily, national policies guided
industrial development to green and intelligent acceleration, the revision of mandatory standards forced the
industry upgrading and accelerated the elimination of outdated production capacity, home appliance enterprises
with core competitiveness would comprehensively promote the high-quality development.
II. Major changes in main assets
(i) Major changes in main assets
Major assets Note of major changes
Equity assets Invested more capital for joint ventures in the period
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Fixed assets Transfer-in from construction in progress increased in the period
Intangible assets Land use right increased in the period from subsidiary Changhong Air-conditioner
Construction in progress Construction in progress transfer-in fixed assets in the period
(ii) Main overseas assets
√ Applicable □ Not applicable
Reaso Whether
Foreign assets
n for Operat exist
Control measure to ensure the security accounted for
Content of assets the Asset size Location ion Income (RMB) significant
of assets net assets of
format mode impairment
the Company
ion risk (Y/N)
Details of risks control measures have
been disclosed by the Company by way
Invest of announcement on appointed media
60% equity of ment (No. 2011-028, No. 2011-032, No.
US$ 7.803
Changhong Ruba establi Pakistan Sales 2014-023, No. 2014-026, No. 2016-027, -12,768,353.62 0.25% N
million
Trading Company shmen No. 2016-032, No. 2017-053 and No.
t 2017-059) on 28 May 2011, 19 April
2014, 25 March 2016 and 10 August
2017
Details of risks control measures have
40% equity of Invest been disclosed by the Company by way
Changhong Ruba ment of announcement on appointed media
US$ 6.9761 Manuf
Electric establi Pakistan (No. 2011-028, No. 2011-032, No. -9,015,854.36 0.00% N
million acture
Company(Private)Lt shmen 2014-023, No. 2014-026, No. 2017-053
d. t and No. 2017-059) on 28 May 2011, 19
April 2014 and 10 August 2017
100% equity of Invest Details of risks control measures have
KELAPA
CHANGHONG ment been disclosed by the Company by way
US$ 6 GADING,
MEILING establi Sales of announcement on appointed media -1,369,150.34 0.48% N
million JKT,
ELECTRIC shmen (No. 2016-027 and No. 2016-033) on 25
Indonesia
INDONESIA. PT t March 2016
Other notes N/A
III. Core Competitiveness Analysis
(1) Brand capacity
The Company is one of the famous home appliances manufacturers in China, owns several product lines such
as refrigerator, freezing box, air conditioner, washing machine and small household appliances. ―Meiling‖ brand is
listed as one of the most valuable brands in China. In recent years, the Company has create the competitiveness of
the brand by continuously reshaping its brand image, innovating core technology and developing high-end
14
CHANGHONG MEILING CO.,LTD. Annual Report 2019
intelligent products.
In terms of reshaping brand image, in order to enhance the brand image and further expand the market
influence, the Company reposition the brand by implanting the corporate culture into the brand construction.
In October 2015, the Company hold a press conference of "New LOGO release and offline of the 10th million
set of frequency conversion products" for renewing LOGO and launching the new brand
proposition of ―Meiling, let the good comes‖. Along with the release of new LOGO, Meiling will also implement
a brand strategy of "Good Trilogy", including the direct sensory experience of ―experience the good", the spirit
soul enjoyment of ―enjoy the good‖, and the lifestyle faith of ―believe in the good‖.
In terms of continuous innovation of core technologies, on the one hand, the company continuously
promoted the innovation of intelligent and frequency conversion technologies to maintain the leading position in
the industry in order to meet the needs of industry and market development; on the other hand, in the boosting of
consumption upgrades, in order to meet consumers‘ individualized, differentiated and diversified needs, the
company returned to the fresh-keeping nature of refrigerator through the application of ―water molecule-activated
fresh-keeping technology‖, created the first ―1 cm free-embedded refrigerator‖ through research and development
of full-thin GLS integration technology, achieved thin body and thin cabinet and thin door. The continuous
innovation of the company's key core technologies highlighted Meiling‘s professional capabilities.
In terms of high-end intelligent product development, the company promoted product innovation through
continuous technological innovation. Since 2014, the company has successively released CHiQ intelligent series
products, ―M Fresh‖ refrigerators, and ―M Fresh‖ full-thin series products, and created three brand business cards,
i.e. ―Meiling Fresh‖ and ―Meiling Thin‖, and ―Meiling Embedding‖ through the introduction of the
aforementioned high-end intelligent products, which not only met market demand in a timely manner, but also
enriched and enhanced the brand image.
Reshaping brand ability through continuous upgrading of products, Meiling will realize a young,
international and professional brand image. Through gradual construction of the ideas of Wonderful Start Point,
Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a people-oriented artist specializing in
white appliances, a smarter scientific expert and a more reliable house keeper.
(2) Product capacity
In more than 30 years, the Company always focus on the refrigeration industry, has developed a variety of
different types of refrigerator products, including three serial produces as ―MELNG 美菱, CHiQ and Athena‖.
Mainly included ―M Fresh‖ full-thin series fresh-keeping refrigerators equipped with water molecule-activated
fresh-keeping technology, such as BCD-656WQ3M, BCD-681WQ3S, etc., full-thin wall double curved embedded
series refrigerators such as BCD-482W, CHiQ series high-end intelligent refrigerators and air conditioners,
air-cooling cross-shaped side-by-side door series refrigerators such as BCD-501WPUCX and BCD-432WPU9CX,
15
CHANGHONG MEILING CO.,LTD. Annual Report 2019
air-cooling side-by-side door series refrigerators such as BCD-566WUPC, BD-380W air-cooling series products
exporting to Europe, BC / BD-106DTEB, 156DTEB, 211DTEB and dual-temperature BCD-212DTEB 2.0th
generation thin door series freezer, and YCD-EL / FL289 medical refrigerator freezer combo, etc.
In terms of air-conditioning products, the company adhered to focusing on the core strategy of intelligence
and frequency conversion, and emphasized on the research of new frequency conversion control technologies,
among them, the technological achievements of the ―research and application of high-efficiency operation and
security control technology of inverter air conditioners based on motor winding temperature measurement
methods‖ has reached international advanced levels, this technology is of great significance to the reliability of
refrigeration compressors and the safe application of flammable and environmentally-friendly refrigerants in
refrigeration systems in the future; the frequency conversion solutions based on single-chip dual-drive on-board
reactor have been applied to new energy efficiency standard products, and the new energy efficiency product
platform development for new energy of air conditioner from1HP to3HP in 2020 has been completed, and the
product has been launched in batches. Focused on carrying out the inverter core control technology research and
development and product application such as PMV control technology for infrared temperature measurement and
winding temperature measurement, and vigorously promoted the competitive low-cost frequency conversion
hardware solutions and the research and development of new structural products to cope with competition in the
air-conditioning market.
The Company owned advanced development and quality assurance systems, passed management system
certification of ISO9001, ISO14001 and ISO45001. Product quality has been quality assurance and product
performance is reliable. At the same time, the company has authoritative certifications including ―national-level
technology center‖, ‖national-level industrial design center‖, ―national-level intellectual property demonstration
enterprise‖ as strong guarantees. In terms of technical research, it is committed to applying basic technology
research and industrialization transfer, and has established a technical strategic plan with ―intelligence, frequency
conversion, simulation‖ as core technologies, and ―energy saving, fresh keeping, and new materials‖ as key
technologies, annual technical research project achievements conversion rate reached 85% above. In terms of
product development, based on the technological research results and consumption upgrade requirements, updated
the annual product planning and development outline, increasingly upgraded the product structure, continued to
increase the development of mid-to-high-end products such as thin-wall, air-cooling, large-volume, frequency
conversion, and intelligence, and developed competitive core products. At the strategic level of the company,
continued to adhere to the core idea of ―intelligent strategy, productism‖, and promoted the company's product
transformation, technological innovation, and industry leadership by advancing the subsequent research and
development, promotion and technical update of intelligent and frequency conversion products. In addition, the
company shall continue to improve the home appliance product line, lay out multiple product businesses such as
washing machines, kitchen and bath, small appliances, biomedical, and built a comprehensive home appliance
business.
In terms of washing machine products, the company actively developed the core technology of Meiling
16
CHANGHONG MEILING CO.,LTD. Annual Report 2019
washing machines, upgraded its product lineup, and enhanced its competitiveness. The company has successively
developed and launched front-loading products with light luxury appearance, large volume, washing and dryer,
and a number of patented pulsator products, among them, the ―One-Key Smart Wash‖ series large-volume
top-loading products represented by B120M500GX realized one-button start and one-button dehydration through
intelligent system, which is convenient and practical. The ―Tianpu‖ series inverter products represented by
MB90-660BILG applied the industry-leading DD inverter direct drive and Tianpu washing technology to reduce
residual washing liquid and rinse cleaner and take good care of clothes.
In terms of kitchen and bathroom products, the company adhered to the leading of ―building a smart kitchen
and becoming a leading brand of smart kitchen and bathroom products‖, established a smart kitchen voice
interaction system with large-screen range hoods as its core, and completed the intelligentization layout of all
categories of ―Smart Kitchen‖ to achieve product interconnectivity and human-machine interaction; meanwhile, in
combination with its own research and development technology advantages, deepened the productization of
inverter technology in range hoods and gas water heaters, and accelerated the research of zero-cold water gas
water heaters, condensing wall-hung boiler products, and water purification exclusive filter technology, and
applied for 4 invention patents and 4 utility model patents.
In the field of small home appliances, the company was committed to creating an influential brand of ―water
ecological household appliances‖ by the operating strategies of ―grasping key categories for scale, strengthening
core categories for influence establishment, and selecting and cultivating categories for ecology layout‖, launched
a number of intelligent ―water ecological home appliances‖ products, and has gained high recognition in the
market, and the humidifier and water dispenser products ranked in the top five of online industry. At the same
time, the company has continuously increased the investment in research and development of related products,
aiming to increase the competitiveness of its products in terms of intelligence, health, and fashion.
In terms of cryogenic products, the company continued to increase investment in research and development
and promoted the upgrade of technology, products and serve. The Company‘s existing ultra low freezer, plasma
blaster freezer, blood bank refrigerator, medical refrigerator, combined refrigerator & freezer and medical freezer
and other biomedical products and biological and medical integration solutions are have been widely used in
medical and health, disease control and epidemic prevention, blood systems, research institutes,
bio-pharmaceutical, genetic engineering and life sciences and other fields. Especially in ultra low products, the
Company has the -40 °C ~ -164 °C ultra-low freezer storage tank with the largest volume, the widest temperature
zone, and mute design in the world.
(3) Operation capacity
The Company continues to conducted benchmark management to improve its basic management level.
Meanwhile, constantly improve the internal management ability by continuously improve the upgrading in aspect
17
CHANGHONG MEILING CO.,LTD. Annual Report 2019
of efficiency of personnel, money and materials. A performance review and sharing system has been established
with clear target and quantity index based on performance and layered incentive sharing system, thus to inspire
the internal production capacity. Under the mainline of value chain management, the Company continued to carry
out value creation and improve its competitiveness. Its ability to prevent risks has been also strengthened through
continuous improvement of internal control system.
(4) Marketing ability
The company has established a relatively complete sales network and service system to accelerate marketing
transformation and achieve the marketing transformation from product line-oriented sales management to
channel- and user-oriented business services, from single-category marketing to full-category marketing. During
the reporting period, the company worked on organizations, systems, institutions, procedures, account sets, etc.,
and used smart trading platforms to effectively improve operating efficiency, reduce costs, and accumulate
strength for subsequent development. In overseas markets, the company increased the investments in overseas
marketing agencies, research and development bases, production bases, etc., cooperated with internationally
renowned household appliance brands and distributors, continued to optimize the customer structure and enhance
the product structure, actively explored overseas markets, and exported products to more than 130 countries and
regions.
18
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section IV. Discussion and Analysis of the Operation
I. Introduction
In 2019, China's economic operation as a whole remained within the target range, but under the influence of a
significant slowdown in global economic growth, repeated Sino-US trade frictions, and domestic economic
structural adjustment, the pressure on economic growth increased. Under the influence of many unfavorable
factors, China's home appliance industry was facing an unprecedented difficult situation. According to data from
the National Appliances Information Center, the scale of retail sales of domestic appliances in 2019 was 803.2
billion yuan, with a year-on-year decrease of 2.2%. Affected by the macro environment and its own development
cycle, coupled with multiple unfavorable factors such as the sluggish real estate, the iterative upgrade of
consumption structure, insufficient demand, and rising supply chain costs, the overall performance of the home
appliance industry in 2019 was unsatisfactory, and the growth rate slowed. In this context, actively embracing the
changing era, accelerating the brand internationalization construction, increasing the development in overseas
markets, and promoting the product structural transformation and upgrading have become the starting points for
competition in home appliance enterprises.
II. Main Business Analysis
(i) Overview
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
In 2019, refrigerator and freezer business achieved revenue of approximately RMB 7.905 billion, 3.22%
decreased on a y-o-y basis; air-conditioning business achieved revenue of approximately RMB 5.909 billion,
12.81% down y-o-y; washing machine business achieve revenue around RMB 0.434 billion, with year-on-year
decline of 15.53 %; other business of kitchen & toilet products, small home appliance and refrigeration
accessories have revenue approximately as RMB 1.195 billion with 19.47% up y-o-y. At the same time, revenue
from foreign business gains RMB 3.908 billion, a y-o-y increase of 5.34%.
2. Progress of the company's development strategy and business plan during the reporting period
During the reporting period, in accordance with the development strategy and operating principles of
―product leading, marketing transformation, efficiency enhancement and team activation‖ in 2019, the company
has deployed the annual business plan, arranged the production and management, and carried out the following
activities:
19
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(1) Product leading
During the reporting period, the company continued to carry out product upgrades around two major product
strategies of intelligence and frequency conversion, took fresh keeping, thin-wall, and energy efficiency upgrades
as breakthroughs, thereby comprehensively improved the competitiveness of its products; insisted on user needs
as its starting point, carefully built the core competitiveness of enterprise with technological innovation and
product innovation, and accelerated product upgrades.
The company was characterized by ―Meiling Fresh, Meiling Thin, and Meiling Embedding‖, continued to
create product feature cards, and further promoted the company's refrigerator (freezer) product upgrades and has a
good market performance. The ―M Fresh‖ full-thin series refrigerators released in February 2019 developed the
full-thin GLS integrated technology (integrating thin body, thin cabinet and thin door) based on the upgrade of
water molecule-activated fresh-keeping technology, and comprehensively upgraded product technology, quality,
and performance, the products attracted widespread attention from the industry and the media after release and
launch, both the IFA red dot award and the special report of CCTV News gave the company high evaluation of the
full thin refrigerator. The increase in sales of full thin products in 2019 drove the promotion of Meiling‘s share of
high-end refrigerators. According to data from CMM, the product share of Meiling refrigerators with prices of
more than 11,000 yuan was 3.3%, a year-on-year increase of 1.9%.
(2) Marketing transformation
In the domestic market, after the company increased its investment in Zhiyijia Company, it thoroughly
utilized its intelligent trading platform to conduct marketing collaboration, improved operational efficiency and
reduced costs. Through a series of specific marketing transformation measures, realized the transformation from
product line-oriented sales management to channel and user experience services, took the ―online and offline
integration‖ as the main line, promoted omni-channel transformation and upgrade and model change, transformed
from ―low value, low efficiency, high cost‖ to ―high value, high efficiency, low cost‖. According to the data of
CMM, the average price of the company‘s refrigerator products in the online market in 2019 increased by 25.2%,
and the retail sales increased by 0.6%; the average price of the refrigerator offline market increased by 6.5%, and
the retail sales were basically flat. At the same time, the company‘s air-conditioning products seized the
opportunity of strategic ODM brand cooperation, and ODM business grew rapidly. In the overseas market,
through the transformation from the pursuit of scale to the pursuit of both scale and profit, we have achieved
continuous improvement in the product structure, for example, the proportion of air-cooling refrigerator products
has exceeded 20%, and the operating quality of overseas refrigerator freezer has continued to improve. The
overseas air-conditioning business has been actively adjusted, benign changes have been made, and operations
continued to be improved.
(3) Efficiency promotion:
Focus on efficiency improvement and promote efficiency improvement. During the reporting period, the
Company carried out special work on capital pressure control, the net cash in-flow from operation, inventory
turnover and receivable turnover are increase substantially; continued to promote the ―five -ization and three
20
CHANGHONG MEILING CO.,LTD. Annual Report 2019
easy‖ work at the development end, exceed the annual target in aspect of platform reduction, box reduction and
model reduction, and the research and development efficiency increased by more than 20% from a year earlier; in
the production side, organized and carried out the work on reducing staff while improving efficiency in the
product structure optimization, process optimization and one-piece flow, and so on, and the manufacturing
efficiency was promoted by more than 20%.
(4) Team activation
Expand the career path of employees through the implementation of the normalized competing mechanism
for cadres to be prepared for both promotion and demotion and the establishment of exit paths for key positions,
continue to deepen the performance management mechanism, implement the overall process performance
appraisal for all employees, and realize PDCA cycle for performance management through information integration,
reconstruct the incentive mechanism, establish a three-tier incentive system, namely, incentives for business
results, incentives for value lines, and incentives for special events, to encourage value creation for all employees.
(ii) Revenue and cost
1. Constitute of operation revenue
In RMB
2019 2018
Increase/decrea
Ratio in operation Ratio in operation
Amount Amount se y-o-y
revenue revenue
Total operation
16,553,252,894.93 100% 17,490,174,950.01 100% -5.36%
revenue
According to industries
Manufacture of
household 15,442,277,862.82 93.29% 16,458,650,756.15 94.10% -6.18%
appliances
Other business 1,110,975,032.11 6.71% 1,031,524,193.86 5.90% 7.70%
According to products
Refrigerator, freezer 7,904,855,681.11 47.76% 8,167,773,533.33 46.70% -3.22%
Air-conditioning 5,908,762,786.45 35.70% 6,777,093,389.43 38.75% -12.81%
Washing machine 434,111,186.88 2.62% 513,917,450.54 2.94% -15.53%
Small appliance and
993,937,389.59 6.00% 689,072,966.20 3.94% 44.24%
kitchen & toilet
Other products 200,610,818.79 1.21% 310,793,416.65 1.77% -35.45%
Other business 1,110,975,032.11 6.71% 1,031,524,193.86 5.90% 7.70%
According to region
Domestic 12,638,965,715.02 76.35% 13,768,743,643.18 78.72% -8.21%
21
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Foreign 3,914,287,179.91 23.65% 3,721,431,306.83 21.28% 5.18%
2. About the industries, products, or regions accounting for over 10% of the company’s operating income or
operating profit
√ Applicable □ Not applicable
In RMB
Increase/decrea
Increase/decrease Increase/decrease
Gross se of gross
Operating revenue Operating cost of operating of operating cost
profit ratio profit ratio
revenue y-o-y y-o-y
y-o-y
According to industries
Manufacture of
household 15,442,277,862.82 12,416,146,774.23 19.60% -6.18% -6.46% 0.25%
appliances
According to products
Refrigerator,
7,904,855,681.11 6,064,938,890.53 23.28% -3.22% -5.10% 1.53%
freezer
Air-conditioning 5,908,762,786.45 4,996,871,222.18 15.43% -12.81% -11.35% -1.40%
Small appliance
and kitchen & 993,937,389.59 835,102,165.41 15.98% 44.24% 43.17% 0.63%
toilet
According to region
Domestic 11,534,341,837.69 9,040,203,991.36 21.62% -9.53% -9.50% -0.03%
Foreign 3,907,936,025.13 3,375,942,782.87 13.61% 5.34% 2.78% 2.15%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest one year‘s scope of period-end
□ Applicable √ Not applicable
3. Income from physical sales larger than income from labors
√ Yes □ No
Increase/decrease
Industries Item Unit 2019 2018
y-o-y
Manufacture of 10 thousand
Sales volume 1,778.48 1,606.40 10.71%
household pieces/set
appliances industry Production 10 thousand 1,747.30 1,581.94 10.45%
22
CHANGHONG MEILING CO.,LTD. Annual Report 2019
pieces/set
10 thousand
Inventory 114.21 145.39 -21.45%
pieces/set
Reasons for y-o-y relevant data with over 30% changes
□ Applicable √ Not applicable
4. Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
5. Constitute of operation cost
Industry classification
In RMB
2019 2018
Ratio in Increase/decrease
Industries Item Ratio in
Amount Amount operation y-o-y
operation cost
cost
Manufacture of
household Raw material 11,370,677,092.45 91.58% 12,224,876,343.70 92.10% -0.52%
appliances
Note: nil
6. Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―VIII. Interests in other
entities‖ of ―Section XII Financial Report‖
7. Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
8. Major sales and main suppliers
(1) Major sales client of the Company
Total top five clients in sales (RMB) 6,099,260,682.93
Proportion in total annual sales volume for top five clients 36.85%
Proportion of the related parties‘ sales in total annual sales volume for top
20.08%
five clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
23
CHANGHONG MEILING CO.,LTD. Annual Report 2019
1 Client I 2,955,074,284.86 17.85%
2 Client II 1,194,810,509.75 7.22%
3 Client III 1,088,958,743.00 6.58%
4 Client IV 491,287,888.59 2.97%
5 Client V 369,129,256.73 2.23%
Total -- 6,099,260,682.93 36.85%
Other situation of main clients
□ Applicable √ Not applicable
(2) Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 2,432,644,865.67
Proportion in total annual purchase amount for top five suppliers 20.28%
Proportion of related party‘s purchase in total annual purchase amount for
12.09%
top five suppliers
Information of top five suppliers of the Company
Serial Name Sales (RMB) Proportion in total annual purchase
1 Supplier I 630,001,756.38 5.25%
2 Supplier II 504,780,768.62 4.21%
3 Supplier III 477,640,350.95 3.98%
4 Supplier IV 437,841,044.49 3.65%
5 Supplier V 382,380,945.23 3.19%
Total -- 2,432,644,865.67 20.28%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
(iii) Expenses
In RMB
Increase/decre
2019 2018 Note of major changes
ase y-o-y
Sales expense 2,320,362,519.95 2,576,277,169.86 -9.93% -
Administrative expense 330,687,143.82 317,917,548.03 4.02% -
Financial expense -14,216,050.60 -39,305,608.74 63.83% Exchange gains increased in the period
R&D expense 334,218,689.69 235,299,398.06 42.04% More investment in R&D in the period
24
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(iv) Investment in R&D
√ Applicable □ Not applicable
In 2019, the Company continues to insisted on the upgrade of fundamental research on core technology in
technical research, maintained its technological advantages, expanded the innovation and upgrade in the
technological field, made breakthroughs in differentiation, continued to promote product upgrades, and led the
development orientation in the industry.
In terms of the refrigerator, the Company focused on its technology planning and core technology for technology
development, and carried out the research on human-computer interaction techniques, food refreshment
technology, energy saving and mute technology, wide rotation speed variable frequency technology, air duct
design technology, and vacuum insulation technology, etc. Among them, the launch of the ―full thin‖ series
refrigerators once again led the refrigerator to the ―large volume ratio, embedded‖ development direction, greatly
reduced the occupation space and use space of the refrigerator through ―thin body, thin cabinet, and thin door‖; the
launch of thin door series freezers completed a comprehensive upgrade of household freezer; ―M Fresh‖ series
refrigerators equipped with ―water molecule activated fresh keeping technology‖ continued to expand the product
lineup, greatly increasing the company's market share of high-end products, brand influence and reputation. In
addition, the company achieved high-end transformation, technological innovation and industry leadership and
continued to increase the proportion of intelligent and inverter refrigerators by advancing the continuous research
and development, promotion and technological update of intelligent and inverter products; accelerated the
promotion of 0.1℃ inverter and air-cooling technology and products in overseas markets, and the proportion of
inverter and air-cooling refrigerators in the export markets accelerated. The ―retro‖ series and ―micro-frost‖ series
refrigerators have been developed to meet the differentiated and personalized needs of overseas markets.
In air conditioning, according to the strategic planning of holistic intelligent air ecosystem, the Company core
with the technical strategic as intelligence and frequency conversion, carrying out variable frequency control in
depth, CFD&CAE simulation, intelligent voice, and basic core ability construction as recognition and interaction
etc. In the field of frequency conversion control technology, the technological achievements of the ―research and
application of high-efficiency operation and security control technology of inverter air conditioners based on
motor winding temperature measurement methods‖ has reached international advanced levels, this technology is
of great significance to the reliability of refrigeration compressors and the safe application of flammable and
environmentally-friendly refrigerants in refrigeration systems in the future; the frequency conversion solutions
based on single-chip dual-drive on-board reactor have been applied to new energy efficiency standard products,
and the new energy efficiency product platform development for new energy of air conditioner from1HP to3HP in
2020 has been completed, and the product has been launched in batches. The intelligent Q5D freezer adopting
voiceprint recognition technology has been launched, leading the personalized service era in the air-conditioning
industry, and greatly improving the brand image. The new energy efficiency first-level inverter series produced for
25
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Xiaomi have begun mass production and launched to the market.
In terms of biomedical, Zhongke Meiling, a new three board listed subsidiary of the company, continuously
increased its R&D investment. During the reporting period, the various R & D and innovation work of Zhongke
Meiling proceeded smoothly as planned. New dual-system dual-compressor 289 series refrigerator-freezer
products and 270 series low-temperature series products were developed and marketed. Intelligent wireless
monitoring and Android screen control systems equipped with ultra-low temperature and medical refrigerators and
other storage equipment to achieve product-end cloud integration; ultra-low temperature energy-saving noise
reduction technology has been upgraded, and won the UL‘s ―energy efficiency star‖ certification; other home
health products were developed and marketed, Meiling biomedical products gradually realized the ecological
layout. During the whole year of 2019, Zhongke Meiling completed a total of 64 patent applications, including 14
invention patents, 21 utility model patents, 21 design patents, and 8 software work patents; and obtained 27 new
domestic patent licensing.
R&D investment of the Company
2019 2018 Change ratio
Number of R&D (people) 1,529 1,649 -7.28%
Ratio of number of R&D 16.62% 15.52% 1.10 points up
R&D investment (Yuan) 782,372,129.86 821,742,728.27 -4.79%
R&D investment accounted for
4.73 % 4.70% 0.03 points up
R&D income
R&D investment capitalization
128,970,096.82 152,448,558.04 -15.40%
(Yuan)
Capitalization R&D investment
16.48% 18.55% 2.07 points down
accounted for R&D investment
The reason of great changes in the proportion of total R&D investment accounted for operation income than last
year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
(v) Cash flow
In RMB
Item 2019 2018 Increase/decrease y-o-y
26
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Subtotal of cash in-flow from operation
17,770,961,164.50 16,778,361,372.57 5.92%
activity
Subtotal of cash out-flow from operation
16,485,957,179.46 16,998,921,987.93 -3.02%
activity
Net cash flow from operation activity 1,285,003,985.04 -220,560,615.36 682.61%
Subtotal of cash in-flow from investment
3,292,055,574.16 3,668,508,401.66 -10.26%
activity
Subtotal of cash out-flow from investment
2,415,012,035.85 4,623,429,604.21 -47.77%
activity
Net cash flow from investment activity 877,043,538.31 -954,921,202.55 191.84%
Subtotal of cash in-flow from financing
1,731,668,612.80 3,213,434,868.63 -46.11%
activity
Subtotal of cash out-flow from financing
3,001,416,948.24 2,646,463,305.11 13.41%
activity
Net cash flow from financing activity -1,269,748,335.44 566,971,563.52 -323.95%
Net increased amount of cash and cash
901,164,287.58 -605,122,582.46 248.92%
equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
In 2019, the net cash flow from operation activity amounted as 1285 million Yuan, increased 1506 million Yuan
from a year earlier with 682.61% up, mainly because the cash received from good sales and offering labor service
in the period increased from a year earlier;
Net cash flow from investment activity has major changes mainly because the entrusted financing expenditure in
the period declined on a y-o-y basis;
Net cash flow from financing activity has major changes mainly because the cash received from loans in the
period declined over that of last year;
Reasons of major difference between the cash flow of operation activity in report period and net profit of the
Company
√Applicable □ Not applicable
Mainly because at end of the period, the inventory and operating receivables decreased over that of year-begin.
III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB
27
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Whether be
Ratio in total
Amount Note sustainable
profit
(Y/N)
Loss on delivery of the forward foreign exchange
Investment income -32,695,507.49 -46.86% contracts in the period N
Gains/losses from Mainly due to the assessment income of current
52,993,630.16 75.95% forward foreign exchange contract N
fair value changes
Provision for inventory depreciation increased in
Asset impairment -30,409,004.57 -43.58% the period N
Non-operation
6,479,922.98 9.29% -- N
income
Non-operation
5,409,757.70 7.75% -- N
expenditure
Credit impairment 4,633,296.89 6.64% -- N
IV. Assets and liability
(i) Major changes of assets composition
In RMB
Year-end of 2019 Year-begin of 2019
Ratio
Ratio in Ratio in Note of major changes
Amount Amount changes
total assets total assets
Collection of the entrust
Monetary fund 5,499,601,030.64 38.72% 4,596,077,557.40 29.55% 9.17% financing in the period
Turn over of the account
Account
receivable 1,387,961,981.66 9.77% 1,673,362,136.29 10.76% -0.99% receivable speed up in the
period
Turn over of the inventory
Inventory 1,460,910,189.06 10.29% 2,174,436,573.67 13.98% -3.69% speed up in the period
Investment real estate from
Investment real
estate 96,343,760.13 0.68% 46,846,507.41 0.30% 0.38% subsidiary increased in the
period
Long-term equity Invested more capital for
investment 88,556,511.70 0.62% 67,552,541.78 0.43% 0.19% joint venture in the period
Transfer-in from construction
Fix assets 2,180,572,946.87 15.35% 1,733,957,012.14 11.15% 4.20% in progress increased in the
period
The construction in progress
Construction in
progress 252,494,792.31 1.78% 464,558,352.60 2.99% -1.21% transfer to fixed assets in the
period
Short-term loans are paid in
Short-term loans 1,103,991,045.96 7.77% 2,336,373,929.62 15.02% -7.25% the period
28
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Long-term loans increased
Long-term loans 401,280,000.00 2.83% 1,920,000.00 0.01% 2.82% from parent company in the
period
(ii) Assets and liability measured by fair value
√Applicable □ Not applicable
In RMB
Devaluat
Accumulative
ion of Amount of
Changes of fair changes of fair Amount of
Amount at the withdra purchase Other Amount at end
Items value gains/losses value sale in the
beginning period wing in in the changes of the period
in this period reckoned into period
the period
equity
period
Financial
assets
1.Trading
financial
assets
(derivative 9,253,635.59 -1,523,366.67 7,730,268.92
financial
assets
excluded)
Subtotal of
financial 9,253,635.59 -1,523,366.67 7,730,268.92
assets
Above total 9,253,635.59 -1,523,366.67 7,730,268.92
Financial
liabilities 55,586,666.70 -54,516,996.83 11,865.06 1,081,534.93
Other changes:
The exchange difference of the assessment on forward foreign exchange contract of Indonesia Changhong -
subsidiary of the Company
Whether there have major changes on measurement attributes for main assets of the Company in report period or
not
□Yes √ No
(iii) Assets right restricted ended as reporting period
Ended as the reporting period, the Company has no major assets been closed down, detain, freeze or pledge and
guarantee. Other information of the assets right restricted found more in relevant content of ―54. Assets with
ownership or the right to use restricted‖ under VI. Notes to the major items in the consolidated financial
29
CHANGHONG MEILING CO.,LTD. Annual Report 2019
statements carry in Section XII. Financial Report
V. Investment
(i) Overall situation
√Applicable □ Not applicable
Investment in the same period of last year
Investment in the reporting (RMB) Changes
( RMB)
37,591,140.00 46,004,000.00 -18.29%
(ii) The major equity investment obtained in the reporting period
√Applicable □ Not applicable
30
CHANGHONG MEILING CO.,LTD. Annual Report 2019
In RMB
Wheth
Metho Capita Term Type Date of
Status as of Expect er Index of disclosure
Name of d of Amount of Shareh l of of Current investment disclosure (if
Principal business Partners the balance ed litigati (if applicable
invested invest investment olding source invest produc profit and loss applicable
sheet date return on )
ment s ment ts )
(Y/N)
IoT home system and new intelligent
hardware design, research and development,
integration, sales and technical services;
design, research and development, and sales
of home appliance controller software and
hardware and IoT software and hardware;
design , research and development,
manufacturing, sales and technical services of
household appliances, commercial appliances,
Hefei Meiling Not Juchao Website:
car appliances, and daily necessities products; Newly Softwa Invested 6
Wulian Own 20-yea app http://www.cninfo.c
information consulting, technology transfer, establi 10,000,000 100% N/A re million Yuan 5,323,042.82 N 2018-12-11
Technology fund r lica om.cn (Notice No.:
technical service and operation management shed service in the Period
Co., Ltd. ble 2018-071)
in the field of Internet of Things and Internet
technology; Internet data services;
development, maintenance and sales of
e-commerce software; import and export
business of self-operated and agent goods and
technologies (except for goods and
technologies that are restricted for business
operation or prohibited from importing and
exporting by the state).
Changhong Capita RubaGe Increased Not Juchao Website:
Be engaged in the import, export, distribution $ 7.8030 60% Own Long-t N/A -12,768,353.62 N 2017-8-10
Ruba Trading l neral 2.5041 million app http://www.cninfo.c
31
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Company(Priv and sale of household appliances. increas million fund Trading erm Yuan lica om.cn (Notice No.:
ate) Limited e FZE ($363,000) in ble 2017-053 and
the period 2017-059)
Technology research and development,
technical consulting, technical services,
Anhui
processing, sales, design, installation, Business Not Juchao Website:
Tuoxing Newly
maintenance of refrigeration equipment; 66.870 Own Long-t registration app http://www.cninfo.c
Science and establi 10,000,000 N/A N/A -- N 2019-4-20
mechanical and electrical equipment 3% fund erm completed in lica om.cn (Notice No.:
Technology shed
installation; warehousing services (except the Period ble 2019-025)
Co., Ltd.
dangerous goods); processing and sales of
metal products.
Development and sales of computer
software and hardware and undertake
computer network engineering, import & Increase
export of goods and technologies (except the capital of
items prohibited by laws and regulations, 29.08704
restricted items operating with license), million Yuan
Sichuan design and production of advertising, design, in the period
Sichuan )Juchao Website:
Zhiyijia manufacturing and sales of the model, Capita (of which: 20 Not
Changho http://www.cninfo.c
Network selling general merchandise, clothing, l Own 20-yea million Yuan app 2019-8-31,
35,000,000 50% ng N/A 6,854,999.85 N om.cn (Notice No.:
Technology leather ware, shoes & hats, detergents, increas fund r contributed for lica 2019-09-27
Electric 2019-058 and
Co., Ltd. cosmetics, photographic apparatus, toys, e registered ble
Co., Ltd. 2019-067)
(Note 1) audio equipment & apparatus, household capital and
appliances, electronics, communication 9,087,040
equipment, communication device, Yuan reckoned
instruments & apparatus, lamps, in capital
electro-mechanical & components, reserve)
mechanical equipment & accessories,
prepackaged food, office supplies, sporting
32
CHANGHONG MEILING CO.,LTD. Annual Report 2019
goods, hotel facilities, tourism cultural
goods, gold-silver jewelry and value-added
telecom service (entrusted operation),
chemical raw materials & products
(hazardous chemicals excluded), solar
energy equipment and class-I medical
devices through the internet.
Total -- -- -- -- -- -- -- -- -- - -590,310.95 -- -- --
Note 1: On 16 December 2014, the Company entered into a joint venture agreement with controlling shareholder Sichuan Changhong Electric Co., Ltd., established the Sichuan Zhiyijia
Network Technology Co., Ltd. Jointly. On 5 Jan. 2015, Sichuan Zhiyijia Network Technology Co., Ltd established officially with registered capital of 50 million Yuan, of which, 15 million Yuan
contributed by the Company, 30% hold of share-holding ratio, the Sichuan Changhong Electric Co., Ltd. contributed 35 million Yuan with 70% ratio takes. In 2019, the Company increase
capital of 29,087,040.00 Yuan (of which: 20 million Yuan contributed for registered capital and 9,087,040 Yuan reckoned in capital reserve)to Zhiyijia Company, the ratio of shareholding up to
50% after increase.
(iii) The material non-equity investment in the reporting period
√Applicable □ Not applicable
In RMB
Industry Accrued Actual Accrued Reasons for not
Invested
Invest involved Investment Investment Realized Reaching the
with
ment in Amount in Amount up to Capital Anticipated Income up to Planned Disclosed Disclosed Index (if
Project Name fixed Project Schedule
Metho Investm this Reporting the End of Source Income the End of Schedule and Date (if any) any)
assets
d ent Period Reporting Reporting Anticipated
(Y/N)
Projects Period Period Income
Manufac Currently, phase I of the The production Project is www.cninfo.com.cn
2 million automatic ture of washing machine project capacity of 2 under 2017-3-30, (Announcement(201
washing machines Self-b househol Own fund, (the production line of ful million sets of construction in 2017-4-14, 7-010, 2017-024,
Y 71,232,933.99 269,806,804.13 Not applicable
production base uilt d fund-raising l-automatic wave wheel w automatic washing the period 2019-7-9, 2019-040,
project(Note 1) applianc ashing machine with capa machine shall be without 2019-7-26 2019-041,
es city of one million sets a formed after this income 2019-042, 2019-043
33
CHANGHONG MEILING CO.,LTD. Annual Report 2019
industry nnually in double shifts) h project being put occurred and 2019-047)
as constructed and put int into operation temporary
o operation. The phase II
(roller production line) w
ill invest with the fund-rai
sing and still in constructi
on, most of the infrastruct
ure transformation and eq
uipment installation have
been completed and expec
ted to be put into operati
on in June 2020.
Total -- -- -- 71,232,933.99 269,806,804.13 -- -- - - -- -- --
Note 1: According to the Company's strategic development plan, combined with the Company's business needs, and in order to make up for the insufficient research and manufacturing capacity
of washing machine industry so as to meet the market demands, the 29th session of the 8th Board of Directors approved and agreed to invest no more than 371,210,000 Yuan in the construction
of the 2 million automatic washing machines production base project. Up to end of the February 2019, phase I (full-automatic wave wheel washing machine with capacity of one million sets
annually in double shifts) of the ―production line of annual capacity with 2 million automatic washing machines ‖ project has put into normal operation. In combination with the company's
strategic development planning and operational needs, and in order to further improve the service efficiency of the company's raised funds, after careful study and argumentation, the 24th session
of the 9th BOD, the 13th session of the Supervisory Committee, and the second extraordinary general meeting of shareholders in 2019 passed the resolution and agreed to invest 120 million Yuan
of the unused raised funds of the sub-project ―Freezer Intelligent Construction Project‖ of the ―Intelligent Manufacturing Construction Project‖ into the ―production base project (Phase II ) for
annual production capacity of 2 million washing machines‖.
Found more on Securities Times, China Securities Journal, Hong Kong Commercial Daily and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2017-010, No. 2017-024, No. 2019-040, No. 2019-041, No. 2019-042, No. 2019-043, No. 2019-047) on March 30, 2017, April 14, 2017, July 9, 2019 and July 26, 2019 respectively. Currently,
the phase II (roller production line) still in construction, most of the infrastructure transformation and equipment installation have been completed and expected to be put into operation in June
2020.
34
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(iv) Financial assets investment
1. Securities investment
□Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
√Applicable □ Not applicable
35
CHANGHONG MEILING CO.,LTD. Annual Report 2019
In 10 thousand Yuan
Ratio of
Amount of investment
Relate Whether
Investment Amount Amount sales in reserve for Investment amount at Actual
d related Initial
Operator Type Start date End date amount at purchased in the the reporting devaluation of amount at period-end in net gains/losses in
relatio trade or investment
period-begin reporting period period withdrawing (if period-end assets of the period
nship not
applicable) Company at
period-end
Forward
Financial foreign
N/A No 200,656.30 2017-9-29 2020-8-26 149,739.86 212,962.52 297,358.41 - 73,225.52 14.63% -7,881.56
institution exchange
contract
Total 200,656.30 -- -- 149,739.86 212,962.52 297,358.41 - 73,225.52 14.63% -7,881.56
Capital resource Own fund
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the Board
2019-3-29
for investment of derivatives (if applicable)
Disclosure date for approval from board of
shareholders for investment of derivatives (if 2019-5-22
applicable)
Risk analysis:
Risk analysis and controlling measures for
1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are under certain market
derivatives holdings in the Period (including
risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices, exchange rate fluctuations. The
but not limited to market risk, liquidity risk,
Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying on the research of the foreign currency exchange rates,
credit risks, operation risk and law risks etc.)
combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange
36
CHANGHONG MEILING CO.,LTD. Annual Report 2019
contracts, and make dynamic management to the business, to ensure reasonable profit level.
2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements of the trade authenticity.
In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds.
3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange contracts with contract price,
which leads the risk of income uncertainty. So the Company chose five state-owned banks, the Chinese-funded banks in shareholding enterprise as Everbright Bank, Industrial
Bank and the foreign-funded banks as UOB, OCBC, BEA etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose
failure and the risk of loss may bring to the Company is very low.
4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated related
management system which defines the operation process and responsibility to prevent and control risks.
5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are processing. The
Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control.
Invested derivative products have changes in The Company determines fair value in accordance with the Chapter VII ―Determination of Fair Value‖ carried in the Accounting Standards for Business Enterprises No.22 -
market price or fair value in the Period, as for Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services. While fair-value of
analysis of the fair value of derivatives, derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts signed during the reporting period
disclosed specific applied methods and with bank. The differences are identified as trading financial assets and liabilities. During the reporting period, forward foreign exchange contracts and losses of the Company is
correlation assumption and parameter setting (78,815,600) Yuan.
Specific principle of the accounting policy and
calculation for derivatives in the Period
Not applicable
compared with last period in aspect of major
changes
Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals in strict
compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock Exchange, the Articles of Association,
Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these deals were conducted
Special opinion on derivative investment and within the authorization scope under general meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the
risk control by independent directors forward foreign exchange transactions are operates based on normal operating and production, which is relying on specific business operations with purpose of avoiding the
preventing the risks in exchange rate. The forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export
business and thus met its requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and relevant business was
conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority shareholders, were not prejudiced.
37
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(v) Application of raised proceeds
√Applicable □ Not applicable
1. Overall application of raised proceeds
√Applicable □ Not applicable
In 10 thousand Yuan
Total raised Cumulative Ratio of
Total Total
Total raised capital has raised capitals cumulative Raised capitals
Raising Total raised accumulative accumulative Usage of the retained raised capitals and what is
Way capital used purpose of uses has purpose of raised capitals idle for more
year capitals raised capitals raised capitals expected to invested with those capitals
in Period changed in uses changed in has purpose of than two years
used unused
Period total uses changed
The raised funds that the Company has not run out
will continue to complete the corresponding
investment as planned. At the same time, according to
the planning for equity investment projects, it‘s
agreed the Company to use the idle raised funds of no
more than 199 million Yuan (The amount can be
Non-public
rolled over) to invest in the principal-protected
2016 offering of 154,073.272276 26,960.225284 98,111.611149 47,246.035127 47,246.035127 30.66% 37,320.244079 --
financial products after being approved by the
A-shares
Company‘s board of directors, board of supervisors,
and the resolutions of shareholders‘ meeting, and after
the independent directors issuing agreed independent
opinions and sponsor agencies issuing unanimous
verification opinions. The remaining funds are
deposited in the designated raised capital account.
Total -- 154,073.272276 26,960.225284 98,111.611149 47,246.035127 47,246.035127 30.66% 37,320.244079 --
Explanation on General usage of raised capital
38
CHANGHONG MEILING CO.,LTD. Annual Report 2019
st th th
Being deliberated and approved by 1 extraordinary shareholders meeting of 2016 and 17 session of 8 BOD, and verified by the Reply on Private Placement of Changhong Meiling Co., Ltd. (CSRC XK [2016]
No.1396) issued from CSRC, the Company successfully offering 280,858,676 shares (A-stock) to 7 qualified investors, including Sichuan Changhong Electric Co., Ltd. (hereinafter referred as to Sichuan Changhong),
with price of 5.59 Yuan/Share and face value of 1.00 Yuan. According to the Verification Report XYZH/2016CDA40272 issued by Shine Wing Certified Public Accountants (LLP), total raised fund amounting to
1,569,999,998.84 Yuan, less vary issuance changes (tax included) 29,267,276.08 Yuan, raised fund amounts to 1,540,732,722.76 Yuan.
Ended as 31 December 2019, actually fund of raised used accumulative amounted as 981,116,111.49 Yuan in total, balance of the account for fund raised counted as 373,202,440.79 Yuan (including interest income
accumulative amounted as 7,725,012.59 Yuan and income from financial product at expiration 80,711,875.92 Yuan)
The Company accumulative used the fund raised amounted as 981,116,111.49 Yuan, the use of purpose including: intelligent construction has 282,924,440.00 Yuan in used; R&D ability for intelligence and new
products for intelligent household appliance has 382,310,007.72 Yuan in used; smart life project totally used 45,001,600.00 Yuan; used in current fund supplementary counted as 270,880,063.77 Yuan (including saving
interest of 147,341.01 Yuan)
2. Situation of committed project of raised proceed
√Applicable □ Not applicable
In 10 thousand Yuan
Change the Cumulative Investment Achieved
Committed investment Total Benefit Major changes of
project (Y/N) Investment after Invested in the investment progress till end Date of reach a predetermined state expected
projects and over-raised raised-fund achieved in project feasibility
(including adjustment (1) period amount till end of of period-end of use benefits
fund investment commitment the Period (Y/N)
partially changed) Period-end (2) (3)＝(2)/(1) (Y/N)
Committed investment project
Intelligent manufacturing (Hefei)
project: end of December of 2021;
Construction of intelligent Not
Partial change 39,100.00 39,100.00 15,986.723636 28,292.444000 72.36% Production line for the annual -- N
manufacturing project applicable
capacity of 2 million washing
machines(Phase II): June 2020
Construction of intelligent
Partial change, the
R&D capability and new
procedures for The project reach the intended Not
products development of 55,900.00 48,188.658476 10,973.461648 38,231.000772 79.34% -- N
final approval usable state at end of the 2019 applicable
the intelligent appliance
completed
technology
39
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Not
Intelligent life project Change completed 32,000.00 4,500.16 0.0400 4,500.16 100% -- -- Y
applicable
Supplementary the Not
No changes 27,073.272276 27,073.272276 0 27,088.006377 100.05% -- -- N
floating capital applicable
Subtotal of committed
-- 154,073.272276 118,862.090752 26,960.225284 98,111.611149 -- -- -- -- --
investment project
Investment of the over-raised fund
No over-raised fund in the Period
Payment of bank loans (if
-- -- -- -- --
applicable)
Supplementary the
floating capital (if -- -- -- -- --
applicable)
Subtotal of over-raised
-- -- -- -- -- --
fund investment
Total -- 154,073.272276 118,862.090752 26,960.225284 98,111.611149 -- -- -- -- --
Conditions and reasons of failure to meet schedule or predicted income (by specific projects) Found in Note 1
Description of major changes in project feasibility Found in Note 1
Amount, use of purpose and usage progress of the excessive raised fund Not applicable
Change of the implementation location of project with investment of raised fund Not applicable
Adjustment of the implementation ways of project with investment of raised fund Found in Note 1
Early investment and replacement with the raised fund Found in Note 2
Temporary replacement of the working capital with idle raised funds Not applicable
Amount and reasons of cash surplus in raised funds during implementing the project Found in Note 1
Use purpose and destination of the raised funds un-used Found in Note 3
Relevant information with raised funds concerned are disclosed in a timely, true, accurate and complete manner, there is no
Problems or other circumstances in the use of raised funds and its disclosure
violation in the deposit, use, management and disclosure of the raised funds.
40
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Note 1:
1.“Construction of intelligent manufacturing project ”:
(1) the original planning construction period of ―construction of intelligent manufacturing project‖ is 3-year, and with purpose
of regulating the use of raised funds, the resolution of the 20th session of the 9th BOD and the 11th session of the 9th Supervisory
Committee of the Company passed and agreed to postpone the date that the project achieves the scheduled serviceable condition to
the end of December 2021. Currently, the project is in continuous progress.
(2) The original planning construction period of ―newly increasing 600,000 sets of medium and large-capacity environmental
protection and energy-saving freezer intelligent production line construction project‖ (hereinafter, the ―freezer intelligent construction
project‖) is one year. Being deliberated and approved by the resolution of 14th session of 9th BOD, 6th session of 9th Supervisory
Committee, the 20th session of 9th BOD and 11th session of 9th Supervisory Committee, the Company agreed to postpone the date that
the project achieves the scheduled serviceable condition to the end of December 2021. However, the project has not been
implemented because the construction site of the project has been temporarily occupied and the demand for freezers is uncertain due
to the change of market environment.
During the period, the company optimized the layout of the freezer‘s production capacity through intelligent upgrading and
rebuilding, improved the freezer‘s production capacity and efficiency, and the freezer‘s production capacity has been able to meet the
market demand. The project had not been implemented, and the feasibility of the project had undergone major changes, if the
company continued to implement the ―freezer intelligent construction project‖, it would not be able to achieve the expected economic
benefits and would face market and investment risks, therefore, in order to further improve the use efficiency of the funds raised by
the company, the resolutions of the 24th meeting of the ninth board of directors, the 13th meeting of the ninth board of supervisors,
and the 2nd extraordinary shareholders meeting in 2019 agreed the company to change the unused raised funds of 120 million yuan
for the ―intelligent production line construction projects for annual increase of 600,000 sets of medium- and large-volume
environmentally-friendly and energy-saving freezers‖ and invest in the ―production base project for annual production of 2 million
sets of washing machines (Phase II)‖.
At the end of the reporting period, ―production base project for annual production of 2 million sets of washing machines (Phase
II)‖ were progressing smoothly. In terms of infrastructure construction, indoor fire protection systems and building renovations were
completed, outdoor steel structures were completed, plant equipment foundations, steel platforms, and the secondary piping
construction except for the injection molding machine were completed. In terms of equipment, the main assembly of the roller final
assembly line was completed, the trial operation has started and the third batch of prototypes were trial-produced, the debugging of
the cabinet riveting wiring program was completed, and the injection molding machine and supporting equipment could be installed
and debugged after being delivered by the suppliers, and the paint spraying line was in the process of environmental impact
assessment.
2.“Construction of intelligent R&D capability and new products development of the intelligent appliance technology ”
(1) the original planning construction period of ―Construction of intelligent R&D capability and new products development of
the intelligent appliance technology‖ (hereinafter, the ―intelligent R&D project‖) is 3-year, and with purpose of regulating the use of
raised funds, being deliberated and approved by the resolution of the Board and Supervisory Committee, the Company agreed to
postpone the date that the project achieves the scheduled serviceable condition to the end of December 2021.
41
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(2) In order to accelerate the implementation of the company‘s ―intelligent research and development projects‖, ensure the
independence of intelligent research and development technology, shorten the development cycle of intelligent products, improve the
company's research and development capabilities, and reduce the repeated investments in resources, the resolutions of the 31st
meeting of the ninth board of directors, the 16th meeting of the ninth board of supervisors, and the 4th extraordinary shareholders‘
meeting in 2019 passed and agreed the company to change the use and investment of some of the funds raised in the ―intelligent
research and development project‖, and use them to purchase intelligent infrastructure platform construction and software R & D
platforms and other R & D assets from Sichuan Changhong Electric Co., Ltd. and its subsidiaries. The pricing of the related
transactions was subject to the appraised value of the underlying asset as of September 30, 2019, and the transaction price was
determined to be 46,617,300 yuan.
(3) As the construction of the ―intelligent research and development project‖ was completed and reached its intended use, in
order to improve the use efficiency of the raised funds, reduce the company's financial expenses, improve the company's liquidity
situation, and ensure the interests of shareholders, the resolutions of the 33rd meeting of the ninth board of directors of the company,
the 17th meeting of the ninth board of supervisors, and the 1st extraordinary shareholders‘ meeting in 2020 passed and agreed the
company to close the ―intelligent research and development project‖ and use the project‘s surplus raised funds of 125,084,220.44
yuan (including interest income of 47,970,805.20 yuan from wealth management and deposits) as of November 30, 2019 and the
interest settled in the future to permanently supplement the company‘s working capital, and the specific amount was subject to the
actual balance of the special account after deducting the balance of reserved contract and the guarantee deposit on the day the funds
were transferred out. At the same time, a total of 114,368,326.60 yuan, including the balance of the contract to be paid and the
guarantee deposit would be reserved in the fund raising account and paid in accordance with the contract agreement.
(4) On January 15, 2020, the company withdrew the remaining raised funds, wealth management and interest income totaling
126,766,362.64 yuan after deducting the balance of the contract to be paid and the guarantee deposit from the ―intelligent research
and development project‖ account for permanent supplements of the company‘s working capital. After the withdrawal, the remaining
funds of the special account of the raised funds amounted to 99,576,577.04 yuan, which would continue to be used to pay the
contract balance and guarantee deposit.
3.“Intelligent life project”
As the main body of the company‘s ―Intelligent life project‖, Changmei Technology used its own refrigeration equipment
manufacturing advantages to look for new paths for enterprise development. However, due to the heavy asset burden, low turnover
rate, high operation and maintenance and property costs, it sustained losses. After careful research, the company considered that the
original business model of the smart life project was no longer competitive, if the company continued to implement the investment
project with the raised funds, it would be difficult to achieve the expected investment income and may even generate greater losses.
In order to improve the use efficiency of raised funds, avoid further investment losses, focus on the main business, continue to
promote the intelligent and high-end transformation and upgrade of major products, and safeguard the interests of shareholders, the
resolutions of the 24th meeting of the ninth board of directors of the company, the 13th meeting of the ninth board of supervisors, and
the 2nd extraordinary shareholders‘ meeting in 2019 passed and approved the company to terminate the implementation of the
―Intelligent life project‖ and use the remaining raised funds and financial management interest of the project to permanently
supplement the working capital. During the reporting period, the company has withdrawn the remaining funds raised and interest
42
CHANGHONG MEILING CO.,LTD. Annual Report 2019
income from this account, a total of 305,843,051.27 yuan, to permanently supplement the company‘s working capital. After the
withdrawal, the remaining funds of the special account for the raised funds were 0 yuan, and the account was cancelled.
At the same time, the company implemented the liquidation and cancellation of Changmei Technology Co., Ltd., the main body
of the project, and is currently working on the liquidation and cancellation.
4. As of the end of the period, the investment progress of the ―Supplementary Liquidity Project‖ exceeded 100%, mainly due to the
use of raised funds including interest on deposits of raised funds.
Note 2: Early investment and replacement with the raised fund
Ended as 31 October 2016, the Company contributed self-raised fund 63,984,738.91 Yuan for the raised-fund investment project,
the money has replaced as 63,984,738.91Yuan. Shine Wing CPA (LLP) made a special audit for pre-investment and carried out an
Assurance Report on Invested Self-raised fund to the Raised-fund Investment Before Hand (XYZH/2016CD40285) (hereinafter
referred as to Assurance Report). Replacement are as:
In 10 thousand Yuan
Commitment capital Investment of self-raised fund
Raised-fund investment
Total investment for raised-fund invested till end of 31 October Amount replaced
project
project 2016
Construction of intelligent
39,870.65 39,100.00 2,545.41 2,545.41
manufacturing project
Construction of intelligent
R&D capability and new
products development of the 55,900.00 55,900.00 2,053.06 2,053.06
intelligent appliance
technology
Intelligent life project 32,076.00 32,000.00 1,800.00 1,800.00
Total 127,846.65 127,000.00 6,398.47 6,398.47
The replacement has been deliberated and approved by the 27th session of 8th BOD and 14th session of 8th supervisory committee,
independent directors are proposed an agreeable independent opinion, and sponsor institution carried out a verification opinion
without objection.
Note 3: Use purpose and destination of the raised funds un-used
The raised-fund have not been used will continues to completed the corresponding investment according to the project
implementation plan. Meanwhile, according to the raised-fund investment plan, and been deliberated and approved by the Board, the
Board of supervisors and shareholder general meeting at beginning of 2020, agreeable independent opinion from independent
directors and with the verification opinion without objection issued by sponsor institution, it‘s agreed the Company to use the idle
raised fund of no more than 199 million Yuan (the amount can be rolled over) to invest in principal-protected financial products, the
remaining funds are deposit in the designated raised capital account.
Use purpose of the raised-fund has no changes till recently.
43
CHANGHONG MEILING CO.,LTD. Annual Report 2019
3.Change of the raised funds
√Applicable □ Not applicable
In 10 thousand Yuan
Cumulative Investment Achieve Major changes
Corresponding Date of reach Benefit
Total raised funds Amount actually investment progress till d of project
Project after original a achieved
plans to invest invested in the amount actually end of expected feasibility
changed commitment predetermined in the
after change (1) period till end of period-end benefits after changed
item state of use Period
Period-end (2) (3)＝(2)/(1) (Y/N) (Y/N)
Production line for
freezer
the annual
intelligent
capacity of 2 12,000 3,418.446292 3,418.446292 28.49% June 2020 -- -- N
construction
million washing
project
machines(Phase II)
Supplementary the
Intelligent life
floating capital 30,584.305127 30,584.305127 30,584.305127 100% -- -- Y N
project
permanently
Purchase part of Self-built part
the assets of of the assets of
4,661.73 0 0 0% -- -- Y N
intelligent R&D intelligent
project R&D project
Supplemented the
working capital Constructed an
permanently with intelligent 15 Jan. 2020
12,676.636264 0 0 0% -- Y N
the surplus raised R&D project
funds of intelligent (completed)
R&D project
Total -- 59,922.671391 34,002.751419 34,002.751419 -- -- -- -- --
1. The company optimized the layout of the freezer‘s production capacity through intelligent upgrading and rebuilding,
improved the freezer‘s production capacity and efficiency, and the freezer‘s production capacity has been able to meet the
market demand. The project had not been implemented, and the feasibility of the project had undergone major changes, if
the company continued to implement the ―freezer intelligent construction project‖, it would not be able to achieve the
expected economic benefits and would face market and investment risks. Approved by the resolutions of the 24th meeting
Reasons for changes, of the ninth board of directors, the 13th meeting of the ninth board of supervisors, and the 2 nd extraordinary shareholders
decision-making procedures and meeting in 2019 agreed the company to change the unused raised funds of 120 million yuan for the ―intelligent
information disclosure (explain by construction of freezer‖ invest in the ―production base project for annual production of 2 million sets of washing machines
specific project) (Phase II)‖. Found more on relevant announcement (Notice No.: 2019-040, 2019-041, 2019-042 and 2019-047) released
on 9 July 2019 and on 26 July respectively.
2. As the main body of the company‘s ―Intelligent life project‖, Changmei Technology used its own refrigeration
equipment manufacturing advantages to look for new paths for enterprise development. However, due to the heavy asset
burden, low turnover rate, high operation and maintenance and property costs, it sustained losses. After careful research,
the company considered that the original business model of the smart life project was no longer competitive, if the
44
CHANGHONG MEILING CO.,LTD. Annual Report 2019
company continued to implement the investment project with the raised funds, it would be difficult to achieve the
expected investment income and may even generate greater losses. The resolutions of the 24th meeting of the ninth board
of directors of the company, the 13th meeting of the ninth board of supervisors, and the 2 nd extraordinary shareholders‘
meeting in 2019 passed and approved the company to terminate the implementation of the ―Intelligent life project‖ and
use the remaining raised funds and financial management interest of the project to permanently supplement the working
capital. Found more on relevant announcement (Notice No.: 2019-040, 2019-041, 2019-043 and 2019-047) released on 9
July 2019 and on 26 July respectively.
3. In order to accelerate the implementation of the company‘s ―intelligent research and development projects‖, ensure the
independence of intelligent research and development technology, shorten the development cycle of intelligent products,
improve the company's research and development capabilities, and reduce the repeated investments in resources, the
resolutions of the 31st meeting of the ninth board of directors, the 16th meeting of the ninth board of supervisors, and the
4th extraordinary shareholders‘ meeting in 2019 passed and agreed the company to change the use and investment of some
of the funds raised in the intelligent R&D ability construction and Development on new products of Household
Technology (hereinafter, the ―intelligent research and development project‖), and use them to purchase intelligent
infrastructure platform construction and software R & D platforms and other R & D assets from Sichuan Changhong
Electric Co., Ltd. and its subsidiaries. The pricing of the related transactions was subject to the appraised value of the
underlying asset as of September 30, 2019, and the transaction price was determined to be 46,617,300 yuan. Found more
on relevant announcement (Notice No.: 2019-077, 2019-078, 2019-079 and 2019-087) released on 30 October 2019 and
on 28 December respectively.
4. As the construction of the ―intelligent research and development project‖ was completed and reached its intended use,
the resolutions of the 33rd meeting of the ninth board of directors of the company, the 17th meeting of the ninth board of
supervisors, and the 1st extraordinary shareholders‘ meeting in 2020 passed and agreed the company to close the
―intelligent research and development project‖ and use the project‘s surplus raised funds of 125,084,220.44 yuan
(including interest income of 47,970,805.20 yuan from wealth management and deposits) as of November 30, 2019 and
the interest settled in the future to permanently supplement the company‘s working capital, and the specific amount was
subject to the actual balance of the special account after deducting the balance of reserved contract and the guarantee
deposit on the day the funds were transferred out. At the same time, a total of 114,368,326.60 yuan, including the balance
of the contract to be paid and the guarantee deposit would be reserved in the fund raising account and paid in accordance
with the contract agreement. Found more on relevant announcement (Notice No.: 2019-088, 2019-089, 2019-091 and
2020-002) released on 26 December 2019 and on 11 Jan. 2020 respectively.
On January 15, 2020, the company withdrew the remaining raised funds, wealth management and interest income totaling
126,766,362.64 yuan after deducting the balance of the contract to be paid and the guarantee deposit from the ―intelligent
research and development project‖ account for permanent supplements of the company‘s working capital. After the
withdrawal, the remaining funds of the special account of the raised funds amounted to 99,576,577.04 yuan, which would
continue to be used to pay the contract balance and guarantee deposit.
Conditions and reasons of failure
to meet schedule or predicted Not applicable
income (by specific projects)
Presentation on the major changes
N/A
in project feasibility after changed
45
CHANGHONG MEILING CO.,LTD. Annual Report 2019
VI. Sales of major assets and equity
(i) Sales of major assets
□Applicable √ Not applicable
No major assets are sold in the period
(ii) Sales of major equity
□Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
(i) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Register
Company name Type Main business Total assets Net assets Operating revenue Operating profit Net profit
capital
Research and development,
Zhongke Meiling Cryogenic
Subsidiary manufacturing and sales of ultra-low 68,640,300 309,500,258.51 154,359,114.08 222,867,915.68 18,925,495.41 16,517,245.60
Technology Co., Ltd.
temperature freezer
Jiangxi Meiling Electric Manufacturing of refrigeration and
Subsidiary 50,000,000 278,394,484.83 103,784,889.48 964,046,994.20 10,899,467.16 10,899,867.16
Appliance Co., Ltd. freezer
Mianyang Meiling Refrigeration Manufacturing of refrigeration and
Subsidiary 100,000,000 131,681,596.40 119,443,440.13 294,954,937.05 2,408,485.89 2,438,371.51
Co., Ltd. freezer
Sichuan Changhong R&D, manufacturing and domestic sales
Subsidiary 850,000,000 2,877,152,635.65 1,289,120,047.03 4,433,502,406.44 -74,204,533.09 -85,189,135.69
Air-conditioner Co., Ltd. of air-conditioning
Zhongshan Changhong Electric R&D, manufacturing and foreign sales of
Subsidiary 184,000,000 911,234,316.54 -10,199,534.15 1,988,177,094.35 -37,301,441.28 -47,929,658.88
Co., Ltd. air-conditioning
46
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Hefei Meiling Group Holdings
Subsidiary Sales of white goods 80,000,000 1,358,945,884.47 -88,824,059.00 4,470,160,912.06 26,425,053.68 26,607,807.69
Limited
R&D, manufacturing and sales of kitchen
Guangdong Changhong Ridian
Subsidiary and toilet products, small home 83,000,000 524,315,275.74 155,582,873.62 629,710,961.93 21,745,971.94 19,614,873.59
Technology Co., Ltd.
appliances and water purifier
47
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(ii) Subsidiary obtained and disposed in the period
√Applicable □ Not applicable
The method of obtaining and
Company name disposing subsidiaries during The influence to the whole production and performance
the report period
The company's wholly-owned subsidiary is invested by the
Company with a capital investment of 10 million yuan. This
company's establishment aims to further enhance the products‘
Hefei Meiling Wulian Technology technology research and development capabilities in intelligence,
Investment and Establishment
Co., Ltd. frequency conversion, fresh-keeping, etc., while providing a
platform for the incubation of the company's internal new
technology. It has little impact on the company's overall
production operations and performance.
Controlling subsidiary of the Company and established with 10
million Yuan contributed from subsidiary of the Company
Anhui Tuoxing Science and Zhongke Meiling. The enterprise established aims to expand the
Investment and Establishment
Technology Co., Ltd. business of Zhongke Meiling in field of biological medical
treatment. It has little impact on the company's overall production
operations and performance.
Nanchang Xiangyou Electronic Minor effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd performance of the company
Changsha Meizlai Electronic Minor effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd performance of the company
Minor effect on the overall production and operation and
Zhongshan Hongling Trading Co., Ltd Clearing off
performance of the company
(iii) Description of the holding company and stock-jointly companies
The Company has no major holding and stock-jointly enterprise should be disclosed in the period
VIII. Structured entity controlled by the Company
□Applicable √ Not applicable
IX. Future Development Prospects
(i) Competition pattern and development trend
In 2019, affected by the investment increase of real estate and the slowdown in the growth of sales of commercial
housing, consumers have gradually slowed the growth of new demand for traditional household appliances, and
the performance of the Chinese home appliance market has been flat. At the same time, 2020 is an important time
point for China‘s economy to shift to focusing on development quality and the continuous advancement of
―supply-side structural reforms‖, the continued novel coronavirus pneumonia epidemic has delayed the
resumption of work and production of home appliance companies, and the company will face the risks of weak
48
CHANGHONG MEILING CO.,LTD. Annual Report 2019
macroeconomic growth, gradual weakening of the industry‘s traditional growth momentum, labor shortage, rising
raw material prices, substantial increase in transportation costs and human resource costs, and cross-border
competition among internet enterprises.
With the gradual increase in the holdings of traditional home appliances, the proportion of renewal demand in
total demand has increased significantly, which is the main driving force for market growth at the current stage. At
the same time, differentiated products and products touching the consumers‘ pain points and emerging home
appliances that can further improve the life experience of residents will become another momentum of market
growth.
1. Macro environment analysis
(1) economic environment
After two years of steady expansion of the global economy, the downside risks have increased significantly,
and most countries‘ economic growth tends to weaken. Major financial institutions and organizations have
lowered their forecasts for global economic growth in 2020. Although China's economy as a whole was operating
steadily and staying within the target range in 2019, the trend of unilateral trade protectionism dominated by the
United States has swept the globe, Sino-U.S. trade frictions have been temporarily suspended, and geopolitics and
public opinion games will continue, Brexit and other factors have led to instability in Europe, and there are still
many factors of global economic instability.
In addition, affected by the domestic and global novel coronavirus pneumonia epidemics, according to
CMM‘s forecast, the growth of the domestic appliance market in 2020 is ―negative‖, and the decline in export
business will be further expanded.
(2) Market potential
After the rapid growth period, the popularity rate of home appliance products is relatively high, and the
market has shifted from an incremental market to a stock market. The market for the home appliance industry has
seen a significant downward trend, the industry is facing insufficient demand, and the performance growth of
home appliance companies has been in a trough period. The increase in e-commerce penetration, and changes in
the industry‘s promotional nodes, and the impact of the novel coronavirus pneumonia epidemic have made the
peak season for home appliance sales two months after the Spring Festival in recent years no longer exist. China‘s
economy has entered an important time point for continued reform; the real estate investment, the growth of
commercial housing sales, and the slowdown in new consumer demand for household appliances have gradually
weakened the growth capacity of the home appliance industry. In addition, in the context of the novel coronavirus
pneumonia epidemic, based on changes in consumer demand, health and intelligence will become one of the
major consumer pain points in the market. In recent years, home appliance products have a lot of room for
improvement in these two aspects, the advantages of healthy, intelligent and functional products have gradually
emerged, which has become the trend of home appliance industry transformation and consumption upgrade.
2. Refrigerator (freezer) industry
49
CHANGHONG MEILING CO.,LTD. Annual Report 2019
The inconvenience of road traffic caused by the spread of the novel coronavirus pneumonia epidemic in early
2020 has stimulated the consumer‘s ―stock up‖ thought, the consumers‘ demand for refrigerator (freezer) capacity
shall expand to a certain extent, the proportion of French, and side-by-side door will continue to increase.
Secondly, the long-term storage of fruits and vegetables also reflects the advantages of fresh keeping products,
and consumer acceptance of fresh keeping products will further increase. Finally, after the epidemic, consumers‘
health and hygiene awareness will also enhance, and the importance of the internal storage environment of
refrigerators will rise to the next level, the sterilizing and odor removing refrigerator products will also become a
new choice.
3. Air-conditioning industry
Affected by the continued sluggish market, the air-conditioning industry has been dragged into the quagmire
of ―price war‖, leading brands significantly has reduced their prices, the brand concentration has further increased,
the industry competition has intensified, and the second and third tier brands are facing greater pressure. From the
perspective of market channels, the online e-commerce platform market continues to grow significantly, and the
offline market is shrinking further. At the same time, the industry is gradually adapting to the impact of the sinking
of e-commerce channels and the network batch mode, and has strengthened the online and offline integrated
operations one after another. Facing the sluggish market, major brands in the industry are constantly seeking new
growth points through multi-brand development and product innovation. On the one hand, under the general trend
of consumer classification, more and more brands adopt separate development strategies for high-end and low-end
brands to meet the needs of different consumers. On the other hand, high-end brands and products continue to
innovate, as industry hotspots such as self-cleaning, comfortable air, and intelligence continue to grow, and new
industry hotspots such as fresh air conditioning have appeared.
In 2020, the overall air-conditioning market will continue its adjustment trend in 2019, the market continues
to be sluggish. With the impact of the novel coronavirus pneumonia epidemic and the implementation of new
energy efficiency policies, the industry‘s uncertainty is further intensified, the competition is extremely fierce, but
the industry‘s tendency to change becomes more obvious, and new channels and industrial structure upgrades
usher in new development opportunities. Consumer health awareness will be further enhanced, and attention to
fresh air will be further enhanced. In addition, the heat of health air-conditioning products with functions such as
purification of PM2.5, sterilization, dust removal, humidification, and increase of oxygen content will increase.
The penetration rate of cleaning air-conditioning market will also further increase; the comfort-type
air-conditioning products to solve direct wind are also selling points to consumers; stimulated by the new energy
efficiency policy, the proportion of sales of energy-saving products will continue to increase, and the price war
will continue.
4. Washing machine industry
After the ―Home Appliances Going to the Countryside‖ policy exited, the holding quantity of 100 households
of washing machine products reached a high level, the industry entered the inventory cycle, and demand tightened.
In the context of weak market demand becoming a normal, the main characteristics of the washing machine
50
CHANGHONG MEILING CO.,LTD. Annual Report 2019
industry at this stage are consumption upgrades, the market is transforming and upgrading to quality, and products
continue to be iteratively updated. From the perspective of product types, washing machine upgrades are mainly
concentrated in the washing and drying machine market, while from the perspective of washing capacity, they are
affected by demand factors such as the placing space and the rising proportion of small residential households, the
upgrade trend is mainly concentrated at 10KG, from the perspective of market segment, the washing machine
market presents new trends of the health represented by sterilization function, the specialization directed by
washing and care, and the sceneization represented by ultra-thin.
In 2020, the washing machine market will still be based on steady development. With the rapid
popularization of mobile communication equipment in recent low-line areas and the decline of online traffic
dividends, the washing machine market still maintains a structural traffic dividend, and consumer willingness and
consumption potentiality in rural areas become stronger. At the same time, under the effect of the epidemic,
residents‘ awareness of health protection will rapidly increase, drum washing machines with high-temperature
washing programs and pulsator washing machines with heating washing will become hot products in the market.
After the epidemic is over, market education will deepen, and people will pay more attention to healthy washing.
Under the concept of health, traditional high-temperature sterilization products, other products with multiple
sterilization methods, classified washing products, and mini washing machine products will gain development
opportunities.
In general, the home appliance industry has entered a consolidation phase, and the demand for refrigerator
and washing machine is almost saturated, there is still some room for popularization of air conditioners in the
rural market. From the demand side, the need for new replacements is less urgent than the popularization needs
and is easily affected and suppressed by the epidemic, the total data of AVC predicts that the omni-channel retail
sales of refrigerators, washing machines and air conditioners in 2020 will be -7.6%, -7.1% and -7.3% respectively
on a year-on-year basis.
(ii) Development strategy
1. Vision
Be a leading brand in China, World Class and respectable household appliance enterprise.
2.Strategy direction
Focus on ―products leadership, efficiency breakthrough, intelligent IoT, open cooperation‖, become a creator
who makes people‘s lives become healthier and better, and realize the ―Meiling Dream‖ of becoming a China
leading, world-class and respectable home appliance company China‘s leading, world-class and respected home
appliance company.
(iii) Business policy
51
CHANGHONG MEILING CO.,LTD. Annual Report 2019
The company‘s operation policy in 2020 is ―product leadership, marketing transformation, efficiency
breakthrough, and team activation‖, creates hard-core technology in products, advance faster in the market than its
competitors, have sustainable hematopoietic functions in operations, and establish incentive mechanism of
―striving hard without lifting your own whip‖.
Product leadership: continue to adhere to ―productism‖, attach importance to product development,
increase investment in research and development, increase the success rate of new products to market, and
continue to create value. With product planning as the traction, energize the sales through technology, R & D, and
manufacturing, and energize for efficiency improvement, and continuously improve product market performance
and competitiveness.
The company builds ―first-class manufacturing‖ through ―improvement of quality, taste and brand‖, ―five-ization
and two easy‖, and digital transformation; focuses on product quality details, and implementing quality is
designed and manufactured, every detail link must be implemented, the market is a measurement of whether our
quality is in place, we has to focus on the key issues reflected by the market to ensure that the product is of high
quality.
In 2020, the company will continue to adhere to the two core strategies of intelligence and frequency
conversion, take the M-fresh series and thin-walled series products as starting point to create Meiling‘s core
competitiveness of ―fresh, thin, embedding‖, continue to promote the development of large-volume refrigerator &
freezer, M-fresh refrigerator & freezer, thin-walled products, intelligent and inverter products, focus on boutique
and hot products, mainly promote the second-generation products of M Fresh and thin-walled series. From the
refrigerator fresh keeping and heat transfer mechanism, white goods intelligent fault diagnosis algorithm, air
conditioning human comfort mechanism research and lean R & D innovation platform, select hard-core
technology projects that have great value for users, continue to tackle key issues, and strive to solve consumer
pain points, build the industry‘s leading and best products in the world, realize the transformation and upgrading
of product structure, and support the implementation of serving the country through industry. At the same time,
washing machine products strive to shape the ―ultra-thin, zero-displacement‖ and ―one-button smart washing‖
product labels; kitchen and bathroom appliances, and small appliances respectively take the directions of ―smart
kitchens‖ and ―water ecological appliances‖ to continuously increase the industry‘s influence.
Marketing transformation:
Continue to promote the digital transformation of marketing business, reconstructing three systems with
digitization as the core, namely, establishing a marketing management system with terminal retail as the core,
establishing a value management system with retail price as the core, and establishing an operation management
system with customer‘s business inventory as the core, actively explore intelligent trading mode. In the domestic
market, refrigerator and freezer products focus on trendy and hoarding users, strive to create ―boutique‖ + ―hot‖
products, continue to lead in ―thin‖ ―fresh‖ ―embedding‖ technologies; air-conditioning products focus on early
52
CHANGHONG MEILING CO.,LTD. Annual Report 2019
adopters and practical users, concentrate on the ―boutique‖ + ―hot‖ products strategy, create brand name cards for
―good air‖ and ―good sleep‖ of air conditioning; washing machines focus on ―consolidating basic channels,
developing O2O, breaking through TOP customers, starting export sales and OEM / ODM business‖ to carry out
work; kitchens and bathrooms, and small home appliances are working around the strategies of ―strengthening
new retail and system integration‖ and ―fine products, live channels‖. In terms of overseas markets, the company
continues to pursue the transformation from pursuing scale to pursuing both scale and profit, continues to improve
the product structure and consolidate the transformation results, at the same time, based on the balance of quantity
and profit, we will rely on OEM as a scale support to further improve profitability.
Efficiency breakthrough:
Keep up with the industry benchmark, continuously deepen in practice, emphasize that efficiency
improvement cannot be limited to comparison with oneself, implement ―efficiency is life‖, and achieve
breakthroughs in four aspects including capital efficiency, per capita output, single product output, and cost
reduction to drive the overall efficiency of the company.
Team activation:
Formulate strategic planning and implement the ―Yongquan Plan‖, the company has formulated the 14th
Five-Year Plan for Human Development, which provides strategic guidance for human resource transformation,
talent organization development, and talent incentives. Through the implementation of the ―Yongquan Plan‖,
establish a key talent selection mechanism, continue to complete the selection and training of management talents,
strengthen the construction of professional and technical talent teams, and improve the company‘s talent reserve
construction.
Establish the mechanism of ―tapping full potential of talents‖: adhere to the management cadre competition
mechanism, promote the ―two dares‖, that is, dare to make an exception for selecting high-potential talents, dare
to eliminate inefficient cadres, and stimulate the team‘s wolf spirit; establish an interchange and dual-channel
talent development mechanism that integrates management lines and professional lines, break the ceiling for talent
development; innovate the credit system to quantify the evaluation criteria and value contribution of R & D
technicians, and stimulate the innovation and initiative of R & D technicians.
Establish an incentive mechanism of ―striving hard without lifting your own whip‖: incentives can be
expected, contracting can be implemented, and guarantees for ―brave‖, ―morality‖, and ―intelligence‖ can be
provided; ―four-wheel drive‖ (career, authorization, income, equity) system manages the backbone and activates
the end, thereby effectively motivating strugglers and entrepreneurs; reduce internal transaction costs, gradually
weaken KPIs, and actively challenge high goals and achieve high growth matching with high incentives.
3. Market strategy
(1) Refrigerator (freezer)
Continue to adhere to the intelligence and frequency two core product strategy; speed up the development
53
CHANGHONG MEILING CO.,LTD. Annual Report 2019
and upgrading of a new generation of intelligent product, implement the Company's intelligent strategy, and
enhance the proportion of high-end products. Vigorously invest in basic technology research and product
upgrading, continue to carry out intelligence, frequency, forced air cooling, refreshment, thin-wall and other
technical researches, maintain technology-leading in the industry, promote the Company's product structure to
upgrade to high end and intelligence, and drive the Company's industrial transformation and upgrading. By giving
great impetus to ―enhancing the three-qualities‖, ―five -ization and three easy‖ and ―first-class manufacturing‖,
comprehensively improve the efficiency and quality, reduce the product costs and enhance the comprehensive
competitiveness of products .
In the domestic market, in the context of consumer grading, we adhere to the strategy of ―boutique‖ + ―hot‖
products. On the one hand, start from satisfying high-value users pursuing quality of life, adhere to the boutique
strategy, and continue to build Meiling‘s core competitiveness of ―fresh, thin, embedding‖ through strategies such
as fresh keeping leadership, embedding enhancement, appearance upgrade, and taste improvement, and strengthen
its own profitability; on the other hand, start from satisfying low-income users pursuing high performance-to-price
ratio, adhere to the ―hot‖ products strategy, and continue to improve the extreme performance-to-price ratio of hot
products through strategies such as cost reduction and efficiency improvement, and quality improvement, and
promote stable growth in scale.
In the overseas markets, quickly expand the scale on the premise of reasonable profits, continue to do a good
job in ―focusing on products, focusing on markets, focusing on customers‖, and improve product competitiveness
through continuous promotion of air cooling, inverter, and large volume products; constantly increase market
share by focusing on strategic markets, key markets, and potential markets, and constantly increase market share;
focus on strategic customers and key customers, develop potential customers, and focus and increase customer
concentration.
(2) Air-conditioning
In the domestic market, take the user as the center, seize the opportunities of the company reform and
strategic customer development, implement the ―boutique + hot prodcuts‖ strategy, adhere to the dual brand
operation of ―CHiQ‖ and ―Changhong‖ to create ―good air‖ + ―good sleep‖ products; focus on strong areas to
create base markets, innovate marketing mode and focus on channels in weak areas; deepen channel
transformation on channels, actively embrace new channels, integrate online and offline operations, focus on
e-commerce, own channels, and O2O. Adhere to the goal-oriented and striver-oriented, establish value-creation
sharing mechanism, strengthen the core technology capacity building such as frequency conversion, intelligence
and simulation, consolidate the foundation, force management, shorten the gap with competing products in cost,
delivery time, appearance, quality and service, and continue to create greater value for customers.
In the overseas markets, work on ―improving efficiency, adjusting structure, promoting transformation, and
54
CHANGHONG MEILING CO.,LTD. Annual Report 2019
controlling risks‖, continuously improve product definition and service capabilities, promote the transformation
from foreign trade thinking into marketing thinking, focus on core customers in key markets, and pay close
attention to the development of blank markets.
(3) Washing machine
Carry out marketing work around ―consolidating basic channels, developing O2O, breaking through TOP
customers, starting export sales and OEM / ODM business‖, according to the strategic choice of ―excellent quality
and product differentiation‖, take ―quality first‖ and ―follow + innovation‖ as the product quality control strategy
and product development strategy, shape the ―ultra-thin, zero-displacement‖ and ―one-button smart washing‖
product labels, and build the core competitiveness of the product.
(4) Kitchen and bath, small household appliances
Continue to deepen the ―smart kitchen‖ concept, complete the smart kitchen product array and system
solutions with ―voice‖ as the entrance, attach importance to usability and practicality, and enhance the smart
kitchen operation and scene-based experience. At the same time, focus on the ―water ecological home appliances‖
product line, focus on core strengths to create advantageous core product lines, and continuously improve the
industry influence.
(5) Bio-medical care
Unswervingly implement the strategy based on the related diversification in the bio-medical field, center on
the business framework layout of life science, smart cold chain, and family health, promote the product upgrade
and service improvement of life science module. Based on cold storage business, rely on life sciences channel
system and steadily expand the smart cold chain module, at the same time, promote the listing of household health
products such as atomizers and oxygen generators, quickly open the market, and promote the company‘s rapid
growth.
The above business plan and business objectives do not represent the listed Company‘s profit forecast of
2020, whether it can be achieved depends on the changes in market condition, the efforts of management team and
other factors, there are a lot of uncertainties, investors should pay special attention to it.
(iv) Possible risks and countermeasures
In the face of the home appliances market competition is more intense and other objective factors,the
survival environment of enterprise will be even worse. In 2020, the Company will face risks as weak
macroeconomic growth, severe industry situation, spreading COVID-19 worldwide ,intensified competition and
rising costs,Sino-US trade war, new business models and impact of the internet era.
1. Macroeconomic downside risks
After years of rapid growth after the reform and opening up, China's economy has entered a ―new normal‖ of
declining year by year. The products produced and sold by the company are consumer electrical products, and the
market demand is usually affected by the macroeconomic and consumer consumption levels. Affected by the
55
CHANGHONG MEILING CO.,LTD. Annual Report 2019
novel coronavirus pneumonia epidemic, China‘s economy faces greater pressure in the first quarter of 2020,
which has a certain impact on consumers‘ income, purchasing power and willingness to buy. In addition, the
uncertainty of the future development of real estate will also affect the needs of residents to purchase consumer
appliances to a certain extent. If the future economic growth continues to slow down or decline, the demand and
gross profit margin of the home appliance industry may be lower, which will adversely affect the company‘s
profitability.
2. Risk of spreading COVID-19 worldwide impacting the global economic growth
Since beginning of 2020, the COVID-19 epidemic has a strong impact on economic development in and out
of China, home appliance in domestic market presents a ―negative growth‖ trend. Meanwhile, with the expansion
and spreading of the epidemic in the world, the adverse impact on home appliances industry aboard is gradually
increasing. In view of the unpredictable trend and impact of the global epidemic, if the spread of the epidemic is
not effectively contained in global scope for a long time, export business of the Company will suffer declines,
which may bring greater market risk to the Company‘s production and operation.
3. Severe industry situation and tough competition
China's home appliance industry is a complete competing industry, there are many domestic and
foreign-funded household appliances manufacturers providing products with a higher degree of homogenization
and fierce competition. With the withdrawal of national preferential policy, the industry broader market continues
to decline, the industry enters into aggressive growth from large-scale growth, the industry brand concentration
further strengthens, and the competition among the brands shows a new situation of oligarchy and giant
competition. In recent years, the transformation and upgrading of the industry have been speeding up, and the
competition for new energy efficiency in the industry has been normalized. Whoever can faster and more
accurately grasp the opportunity of new energy efficiency switching will be able to enhance the competitiveness
of products to a greater extent. If you can't accurately judge and follow the market dynamics of the industry, you
may be eliminated.
4. Impact of cross-border Internet industry and challenges of new business model
With the arrival of Internet era and artificial intelligence era, the Internet enterprises continue to cross
boarder and swarm into intelligent home fields, which intensifies competition in the industry, subversive changes
may occur at any time, and traditional household appliance enterprises are facing serious challenges. At the same
time, under the impact of Internet economy and new business model, the home appliance manufacturers are
actively promoting the transformation, new business model and new products emerge one after another in the
home appliance industry, the development of intelligent home appliances changes quickly, if unable to make rapid
response or catch up with the development trend, it may be easily replaced or even completely subverted. New
rules of the game bring strong sense of crisis and sense of urgency to the enterprises.
5. Human resources risk
Household appliance industry is an industry with relatively intensive capital, technology, and labor. With the
56
CHANGHONG MEILING CO.,LTD. Annual Report 2019
gradual expansion of the company's business scope and scale, and the arrival of intelligent home appliances and
the impact of Internet, the company will greatly increase the demands for high-level management personnel,
technical personnel, and innovative talents, talent introduction becomes one of the key points for human resources
management, if it cannot effectively enhance the company's attraction to high-quality talents from various aspects,
the company's future development will be subject to constraints. At the same time, in its intelligent manufacturing
transformation period, the company needs higher requirements to the technical capacity and professional quality
of workers at the production line, the improvement for the company's product quality will be influenced if the
comprehensive quality of workers at the production line can not be enhanced. In addition, with the increase in
orders, the demand for workers at the production line is increasing, but affected by the supply and demand in labor
market and the continuous rising labor costs, the company's cost pressure will be further enlarged.
In view of the above risks, and combined with industry trend of 2020 and the insufficient in 2019, the
company will continue to adhere to the business policy of ―product leadership, marketing transformation,
efficiency breakthroughs, and team activation‖ in 2020, strengthen benchmarking, and quickly improve, and make
advance arrangements in products, technologies, and markets so as to realize the high-end and intelligent
transformation of the company‘s products, while enriching product lines and creating a comprehensive appliance
company. The company will carry out the following specific key work:
1. Technology and quality
Continue to carry out technical research on intelligence, frequency conversion, air cooling, fresh keeping,
and thin wall, and attach great importance to product technology and quality. Aim at the focus issue of user
experience, implement it to the responsible person and to the specific solutions, and promote the solution of
problem to maintain the company‘s industry- leading position in technology and quality and continue to improve
product quality.
2. Improve efficiency and reduce costs
Continue to promote the company‘s work to increase revenue and reduce costs. On the one hand, the
company‘s marketing end focuses on e-commerce, basic channels, TOP channels, and 2B business, and
continuously increases the market share of product; on the other hand, all business units focus on various expenses,
sort them out item by item, rigidly control various expense budgets, and put them into practice. At the same time,
improve the organizational and personnel efficiency of the company‘s various product units, and from marketing
headquarters to branches.
3.Supply chain and manufacturing
Pay attention to the fluctuation of bulk materials, continue to promote the cost reduction of procurement and
increase the material return; pay attention to fund operation efficiency, improve the turnover rate of receivables
and inventory; continue to implement ―first-class manufacturing‖, ―less people engineering‖, ―smart production‖
and ―intelligent manufacturing‖ etc. to comprehensively improve efficiency and quality, reduce product costs and
enhance the company‘s product competitiveness.
57
CHANGHONG MEILING CO.,LTD. Annual Report 2019
4. Sales
Accelerating marketing transformation and unifying marketing service platforms to better adapt to major
changes in market competition and consumer consumption behavior; accelerating brand and product collaboration,
business and management integration to achieve overall efficiency improvement and cost reductions; actively
exploring interactive new marketing model under epidemic conditions to improve e-commerce organization, and
focus on continuously strengthening e-commerce products, prices, product rendering, product placeholder, online
retail, and spot rate. Seize the market opportunity for home appliance demand after the novel coronavirus
epidemic is over, and formulate corresponding sales strategies based on different markets.
5. Talent mechanism guarantees
Accelerate the implementation of the ―Yongquan Plan‖, and realize ―tapping full potential of talents‖ through
the incentive mechanism of ―striving hard without lifting your own whip‖. Install a four-wheel drive system
(career, authorization, income, and equity) for Meiling strugglers who are willing to struggle; effectively promote
the ―two dares‖, i.e. dare to make an exception for promoting high-potential talents, dare to eliminate inefficient
cadres, and stimulate the team‘s wolf spirit; at the same time, promote dual channels for core talents, and provide
talents with more adequate development paths from management lines and professional lines.
X. Reception of research, communication and interview
(i) In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
https://view.officeapps.live.com/op/view.as
px?src=http%3A%2F%2Fstatic.cninfo.com.
26 Feb. 2019 Field research Institute
cn%2Ffinalpage%2F2019-02-27%2F12058
54486.doc
https://view.officeapps.live.com/op/view.as
px?src=http%3A%2F%2Fstatic.cninfo.com.
2 Jul. 2019 Field research Institute
cn%2Ffinalpage%2F2019-07-03%2F12064
25298.doc
https://view.officeapps.live.com/op/view.as
px?src=http%3A%2F%2Fstatic.cninfo.com.
27 Nov. 2019 Field research Institute
cn%2Ffinalpage%2F2019-11-28%2F12071
21910.doc
https://view.officeapps.live.com/op/view.as
px?src=http%3A%2F%2Fstatic.cninfo.com.
18 Dec. 2019 Field research Institute
cn%2Ffinalpage%2F2019-12-19%2F12071
79544.doc
Reception (times) 4
58
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Number of hospitality 20
Number of individual reception 0
Number of other reception N/A
Whether to disclose, release or divulge material
N
information that is not publicly available (Y/N)
59
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
(i) Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially
Cash Dividend policy during the Reporting Period
√Applicable □ Not applicable
During the reporting period, the company has strictly executed the profit distribution policy in accordance with
the "Articles of Association", the formulation and implementation of the company's cash dividend policy are in
line with the provisions of "Articles of Association" and the requirements of the resolutions of shareholders'
meeting, the dividends standards and proportion have been definite and clear, relevant decision-making
procedures and mechanisms have been complete, the responsibilities of independent directors have been clear and
have played its due role, minority shareholders have had the opportunities to fully express their views and
aspirations, and the legitimate interests of minority shareholders have been maintained. In addition, the
―2018-2020 Shareholder Return Plan‖ approved by the company's board of directors and the resolutions of
shareholders‘ general meeting has made clear plans for the form and priority of profit distribution, the interval of
profit distribution, the specific conditions and proportions of cash dividends, and the specific conditions for
issuing stock dividend.
In the reporting period, the Company implemented Profit distribution plan for year of 2018, that is, distribute 0.6
Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total share
capital 1,044,597,881 shares dated 31 December 2018 (including 881,733,881 shares of A-share and 162,864,000
shares of B-share), cash dividend of 62,675,872.86 Yuan was distributed in total.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article
Y
of Association (Y/N):
Well-defined and clearly dividend standards and proportion
Y
(Y/N):
Completed relevant decision-making process and mechanism
Y
(Y/N):
Independent directors perform duties completely and play a
Y
proper role (Y/N):
Minority shareholders have opportunity to express opinions and
Y
demands totally and their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while
Y
the cash bonus policy adjusted or changed (Y/N):
(ii) Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan)
in latest three years (including the reporting period)
60
CHANGHONG MEILING CO.,LTD. Annual Report 2019
1. Profit distribution plan for year of 2017
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2017, cash dividend of 62,675,872.86 Yuan was
distributed in total.
2. Profit distribution plan for year of 2018
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2018, cash dividend of 62,675,872.86 Yuan was
distributed in total.
3. Profit distribution plan for year of 2019
Distribute 0.5 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2019, cash dividend of 52,229,894.05 Yuan was
distributed in total.
The pre-plan had been deliberated and approved by the board of directors, and it need to be submitted the annual
shareholders‘ general meeting of 2019 for its consideration.
(iii) Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Ratio of the total
Ratio of the cash
Ratio of the cash cash bonus (other
Net profit bonus by other
bonus in net profit Proportion ways included) in
attributable to ways in net profit
attributable to for cash net profit
common stock attributable to
Year for common stock bonus by Total cash bonus attributable to
Amount for cash shareholders of common stock
bonus shareholders of other (including other common stock
bonus (tax included) listed company in shareholders of
shares listed company ways(i.e. ways) shareholders of
consolidation listed company
contained in share listed company
statement for bonus contained in
consolidation buy-backs) contained in
year consolidation
statement consolidation
statement
statement
2019 52,229,894.05 56,441,479.14 92.54% - - 52,229,894.05 92.54%
2018 62,675,872.86 38,658,256.97 162.13% - - 62,675,872.86 162.13%
2017 62,675,872.86 32,473,204.92 193.01% - - 62,675,872.86 193.01%
(iv) The Company gains profits in reporting period and the retained profit of common stock shareholders
provided by parent company is positive but no plan of cash dividend proposed of common stock
□Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □ Not applicable
61
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax included) 0.5
Shares added for every 10-share base (Share) 0
Equity base of distribution plan (Share) 1,044,597,881
Total cash dividend (RMB) (Tax included) 52,229,894.05
Cash dividend for other ways (i.e. repurchased) (RMB) 0
Total cash dividend (including other way) (RMB) 52,229,894.05
Profits available for distribution (RMB) 884,127,743.42
Ratio of cash dividend (including other way) in total profit
distribution 100%
Cash dividend
Distribute 0.5 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total share capital
1,044,597,881 shares dated 31 December 2019, cash dividend of 52,229,894.05 Yuan was distributed in total.
Detail explanation on profit distribution or capitalization from capital public reserve
For year of 2019, the individual statement of the parent company show net profit of 111,361,168.18 Yuan, according to the auditing
from Shine Wing Certified Public Accountants (LLP). In accordance with relevant regulations, the retained profit at beginning of
Current Year amounted as 908,358,682.91 Yuan, deducted the 2018 profit distributed 62,675,872.86 Yuan and after extract for
statutory surplus reserve 11,136,116.82 Yuan, the retained profit in individual statement of the parent company cumulative counted
as 945,907,861.41 Yuan at end of 2019. In addition, for year of 2019, the net profit attributable to owners of parent company
amounted as 56,441,479.14 Yuan, accumulated retained profit according to the consolidated statement at the end of 2019 counted as
884,127,743.42 Yuan.
Pursuit to relevant rules and regulation of Article of Association, and considering the interest of shareholders and long-term
development needs of the Company, Board of Directors agrees that, based on total share capital 1,044,597,881 of the Company
dated 31 December 2019, distributed 0.5 Yuan (tax included) in cash for every 10 shares held by shareholders, totally
52,229,894.05 Yuan distributed in total(tax included). Total share capital of the Company has no changes after distribution, the
retained profit of the parent company amounted as 893,677,967.36 Yuan, rests of the retained profit will carry-over for distribute in
later years.
This plan has been considered and passed by the board of directors, and needs to be submitted to 2019 annual general meeting of
the company for deliberation.
III. Implementation of commitment
1.Commitments that the actual controller, shareholders, related party, the buyer and the company have
fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable □ Not applicable
62
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Commitment Implement
Commitment Type/content Date Term
party ation
1. The acquirer shall not engage in refrigerator business or activity
Strictly
which competes or will compete with business of Hefei Meiling Co.,
Valid for long term implemente
Ltd. (hereinafter referred to as the ―Meiling Electric ‖),or that which
d
has interest conflict with Meiling Electrical Appliances.
About committed and 2. The acquirer promises to apply shareholders‘ right on a legal and Strictly
Sichuan
Commitments promised in order to reasonable manner and shall not take any action to limit or affect the Valid for long term implemente
Changhong
made in prevent horizontal normal operation of Meiling Electric. d
Electric Co.,
acquisition competition in the
Ltd.(hereinafter, 3. For any opportunity to engage in competing business, the acquirer 12 Jun. 2007
report or equity Acquisition Report of
the ―Sichuan will advise Meiling Electric in written for engaging such business or
change report Hefei Meiling Co., Ltd.
Changhong‖) not. If Meiling Electrical Appliances gives no clear written reply as to
Strictly
whether engaging the competing business or not within 20 days after
Valid for long term implemente
receipt of the aforesaid letter, it shall be deemed that it will not engage
d
in such business. The acquirer will only engage in non-competing
business provided that Meiling Electric confirms not to or is deemed to
not engage in such non-competing business.
1. It will not engage in such business or activity that competes with or
has interest conflict with that of Meiling Electric except for the action
taken for sake of Meiling Electric as required by Meiling Electrical
Commitment Commitment regarding to Appliances.
Strictly
made during the Sichuan reducing and preventing
2. The Company promises to apply shareholders‘ right on a legal and 24 Jun. 2010 Valid for long term implemente
non-public offer Changhong competition with Meiling
reasonable manner and shall not take any action to limit or affect the d
of 2010 Electric
normal operation of Meiling Electric
3. In case that Meiling Electric expects, on the basis of its existing
business, to expand its operation scope into the business which the
63
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Company has already operated, the Company agrees to grant priority
acquisition right to Meiling Electric regarding such business if the same
conditions are met, provided that the Company is still the controlling
shareholder or actual controller of Meiling Electric
1. Measures will be adopted to prevent continued related transaction
with Meiling Electric: as to the related transaction that can not be
prevented, it will sign related transaction agreement with Meiling
Electric under the market principles of ―equally paid and mutual
Commitment regarding to benefit‖, and fairly determined the transaction price according to the
reducing and market prevailing standards. Strictly
standardizing related 24 Jun. 2010 Valid for long term implemente
2. Perform the necessary obligations to make related directors and
transaction with Meiling d
related shareholder abstain from voting according to relevant
Electric
regulation, and observe legal procedure for approving related
transaction and information disclosure obligations.
3. Promise not to hurt legal interests of Meiling Electric and other
shareholders through related transaction.
Commit to authorized Changhong Air-conditioner and Zhongshan Air-conditioner Electric Co., Strictly
Ltd. (hereinafter referred to as the ―Zhongshan Changhong ‖) to use ―Changhong‖ trademark and 6 Nov. 2010 Valid for long term implemente
relevant patents for free. d
1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and prompt manner, to
disclose all the information that have important influences over investors, to accept supervision
under the CSRC and Shenzhen Stock Exchange.
Strictly
2. Commit to make public clarification in respect of such information that is released from any
The Company 7 Jan. 2011 Valid for long term implemente
public media and may result in misleading influences on stock price once the Company is aware of
d
such information.
3. The directors, supervisors, senior management and core technicians of the Company will accept
opinions and criticism from the social public, and they will not trade the Company‘s securities,
64
CHANGHONG MEILING CO.,LTD. Annual Report 2019
directly or indirectly, with any inside information and other illegal methods. The Company
promises that the documents submitted to Shenzhen Stock Exchange exist no false statement or
material omission, and no relevant information will be disclosed during the application for listing
without prior content from Shenzhen Stock Exchange.
1. Since the property transfer didn‘t involve the buildings and land currently used by Changhong Strictly
Air-conditioner, Sichuan Changhong commits, upon the completion of equity transfer, to continue Valid for long term implemente
to lease such assets to Changhong Air-conditioner at market price. d
Commitment
2. After completion of this property transfer, Sichuan Changhong commits to manage to prevent
made in transfer
Sichuan new related transaction with Meiling Electric. For those which can not be prevented, Sichuan
of air 10 Dec. 2009
Changhong Changhong commits to determine the transaction price based on market accepted methods, so as to Strictly
conditioning
ensure fairness of related transaction and protection of the interest of Meiling Electric Valid for long term implemente
assets property
3. Sichuan Changhong commits that it will not engage in air conditioning and refrigerator business d
or activity which competes or will compete with business of Meiling Electric, or that which has
interest conflict with Meiling Electric
1. Make promise not to reduce the shares of Meiling bought in every year during implementation
Three years after
Commitments of the performance incentive fund via any market ways in the later first year, which was allowed to Implementi
20 Jun. 2017 current shares
by Annual be reduced by 50% according to the laws and regulations in the second year, and the remaining ng
purchased
performance 50% was allowed to be reduced in the third year in accordance with the laws and regulations.
Some of the
incentive fund, From the date when
Directors,
incentive 2. The directors, supervisors and senior management promised to manage in accordance with the annual incentive
supervisors and
objects while relevant management approaches in accordance with the "Company Law", "Securities Law" and fund plan
senior executives
purchasing "The Company‘s shares held by the directors, supervisors and senior management of the listed 15 Aug. 2013; deliberated and
of the Company as Strictly
stock of the company and its change management rules", as objects of annual performance incentive fund of 3 Jul. 2014; approved by general
well as other implemente
Company with Meiling, including but not limited to: during his tenure, the shares transferred each year shall not 21 Jul. 2015; meeting to 6 moths
incentive objects d
performance exceed 25% of the total number of shares held of the Company; shall not sell the shares of the 20 Jun. 2017 after director,
incentive funds Company within six months after bought it or purchase again six months after sold it; shall not supervisor and
and owned fund transfer the shares held within six months after Dismission. senior executives
resigned
65
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Sichuan 1. Based on market conditions and as allowed by laws and rules, multiple measures were adopted
Changhong adequately to increase shareholding of Meiling Electric, so as to demonstrate its firm confidence on
Commitments Electric Co., the PRC economy and Meiling Electric with its actual actions, maintain sound development of
Strictly
of not to Ltd.and persons capital market and promote recovery of healthy market
9 Jul. 2015 Valid for long term implemente
reducing the acting in concert
d
shares CHANGHONG 2. Continued to support operation and development of listed company as always and promoted the
(HK) TRADING achievement of Meiling Electric. It is committed to bringing steady and real return to investors.
LIMITED
Sichuan 14 Oct. 2016 - 14
Shares are not transfer within thirty-six (36) months since end of the private placement 6 Mar. 2016 Completed
Changhong Oct. 2019
1. I hereby undertake not to deliver interests to other entities or
individuals without consideration or at unfair conditions, nor to
prejudice the Company‘s interests by other means.
2. I hereby undertake to restrain my role related consumption
Commitment
behaviors.
made during the Commitment on Till the completion
3. I hereby undertake not to conduct any investment and consumption
non-public offer compensation of of projects invested
Directors and which is not related to performance of duties with utilization of any
in 2016 immediate dilution of with the proceeds Implementi
senior executives company assets. 23 Feb. 2016
return arising from from this ng
of the Company
non-public issuance of 4. I hereby undertake that the remuneration system determined by the non-public issuance
shares board of directors or the remuneration and examination committee be of shares
linked to implementation of the compensation of return measures.
5. In case that the Company adopts share based incentive plan in future,
I hereby undertake that the exercise conditions of the incentive plan to
be announced by the Company be linked to implementation of the
compensation of return measures.
66
CHANGHONG MEILING CO.,LTD. Annual Report 2019
6. For the period from the date of this commitment to the date of
completion of this non-public issuance of shares, if the CSRC makes
other new regulatory requirements on compensation of return measures
and the commitment thereof, and in case that the above commitments
cannot satisfy these new requirements from the CSRC, I hereby
undertake to issue supplementary commitment in compliance with the
latest CSRC requirements.
As one of the principals responsible for compensation of return
measures, I, in case of break of the above commitments or refuse to
perform the above commitments, agree to receive relevant punishment
or to adopt relevant administration measures according to the systems,
rules and regulations of the CSRC and Shenzhen Stock Exchange.
1. Promise to truly, accurately, completely, fairly and timely publish periodic reports, disclose all
information that has significant impacts on the investors, and accept the supervision and
management of China Securities Regulatory Commission and the Shenzhen Stock Exchange.
2. Make commitments that the Company will publicly clarify in time after knowing any Strictly
The Company information on any public communications media that may cause misleading influence on the 12 Oct. 2016 Valid for long term implemente
stock price d
3. The Company‘s directors, supervisors and senior executives will listen carefully to the opinions
and criticisms of the public and never use any acquired inside information and other improper
means to directly or indirectly engage in the trading activities of the Company's stock.
Perform the commitment promptly or not √ Yes □ No
If the commitment is overdue and has not been fulfilled,
the specific reasons for incomplete performance and the Not applicable
work plan for next step shall be explained in detail
Note: for the commitments completed and exemption for implementing in above mentioned table, the Company will not disclose in next ordinary report
67
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(ii) Concerning assets or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
Disclosure date for specific approval opinion on fund occupation from CPA: 28 March 2020
Disclosure index for specific approval opinion on fund occupation from CPA: Juchao website:
www.cninfo.com.cn-- Specific Explanation on Non-operational fund occupation and its related capital
transactions for year of 2019 of Changhong Meiling Co., Ltd.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors (if applicable)
for “Qualified Opinion” that issued by CPA
□Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation method
compared with the financial report of last year
√Applicable □ Not applicable
Found more details in 34. Change of major accounting policy and estimation under IV. Major accounting policy
and estimation carried in the Section XII. Financial Report
VII. Major accounting errors within reporting period that needs retrospective restatement
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the
period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s scope
√Applicable □ Not applicable
In the reporting period, the consolidated financial statements of the Company cover 38 subsidiaries, including
Sichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. And Zhongke Meiling
Cryogenic Technology Co., Ltd. etc. Compared with the previous year, during the reporting period two enterprises
are included in the consolidate scope, that is Hefei Meiling Wulian Technology Co., Ltd and Anhui Tuoxing
Science and Technology Co., Ltd. And the subsidiary Nanchang Xiangyou Electronic Appliance Marketing Co.,
Ltd, Changsha Meizlai Electronic Appliance Marketing Co., Ltd and Zhongshan Hongling Trading Co., Ltd are
reduced for clearing off.
More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―XIII. Equity in other
entities‖ of ―Section XII Financial Report‖
IX. Appointment and non-reappointment (dismissal) of CPA
68
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(i) Accounting firm appointed
Name of domestic accounting firm Shine Wing Certified Public Accountants (LLP)
Remuneration for domestic accounting firm (in 10 thousand
125
Yuan)
Continuous life of auditing service for domestic accounting firm 11-year
Name of domestic CPA Li Xifu, Xia Cuiqiong
Continuous life of auditing service for domestic CPA Li Xifu (3 years), Xia Cuiqiong (5 years)
Name of foreign accounting firm (if applicable) N/A
Remuneration for foreign accounting firm (10 thousand Yuan) (if
N/A
applicable)
Continuous life of auditing service for foreign accounting firm (if
N/A
applicable)
Name of foreign CPA (if applicable) N/A
Continuous life of auditing service for foreign CPA (if
-
applicable)
(ii) Re-appointed accounting firms in this period
□Yes √ No
(iii) Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
In reporting period, Shine Wing Certified Public Accountants (LLP) was appointed as audit institute of internal
control for the Company, auditing charge for internal control amounting as 250,000 Yuan.
X. Particular about suspension and termination of listing after annual report disclosed
□Applicable √ Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization occurred in reporting period
XII. Material lawsuits and arbitration of the Company
□Applicable √ Not applicable
(i) No significant lawsuits or arbitration occurred in the reporting period.
(ii) Some other significant lawsuits and arbitration in the reporting period.
To maintain the independence and integrity of "Meiling" trademark and trade name, the Company carried out
serials of lawsuits, attribution and administration suits with ―Meiling‖ trademark and corporate name concerned,
69
CHANGHONG MEILING CO.,LTD. Annual Report 2019
please found more in 2014 first quarter report, 2014 semi-annual report, the 2014 annual report disclosed
respectively on April 19, 2014, August 12, 2014, and March 26, 2014 for the relevant progress. Up to now, the
company has stopped the infringement enterprises using ―Meiling‖ trade name, i.e. the infringement of company
name and unfair competition behavior, through litigation and administrative complaints.
During the reporting period, the Company sued Hefei Meiling Electrical Appliances Co., Ltd. (hereinafter referred
to as ―Meiling Electrical Appliances‖) for trademark infringement and unfair competition, Shanghai Intellectual
Property Court has concluded the final judgment of second instance, the Company won the case, the court ordered
Meiling Electrical Appliances to immediately stop the relevant infringement to the Company, compensate for the
infringement losses and change its company name, and the changed company name shall not contain the word
―Meiling‖. That is, any product marked with ―Meiling Electrical Appliances‖ after the expiration of the judgment
execution period shall be regarded as an infringing and counterfeit product, once found, the Company will
resolutely crack down according to law.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household electrical appliances
manufactured and sold by the Company and its wholly-owned subsidiary - Hefei Meiling Group Holdings Limited
and Guangdong Changhong Ridian Technology Co., Ltd. are the company's regular products, any other small
household appliances using same or similar trademark as our company or using the trade name similar to the
Company‘s name are the Company‘s products. In view of the infringement to the Company‘s trademark and trade
name, false propaganda and unfair competition in the market, the Company has carried out many ways including
administrative reports, criminal investigation and civil litigation to fight against infringement and counterfeiting
behavior in the whole country.
XIII. Penalty and rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual controllers have had
good reputation, and there is no large amount due unliquidated debt sentenced by the court.
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or other
employee incentives
√Applicable □ Not applicable
Implementation for annual performance incentive fund
On August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei Meiling annual
70
CHANGHONG MEILING CO.,LTD. Annual Report 2019
performance incentive fund implementation plan" (hereinafter referred to as "" incentive "") on the 16th meeting of
the 7th board of directors and the 2012-second provisional shareholders meeting. Details were disclosed on
information disclosure media appointed by the Company as "Securities Times", "Chinese Securities Daily",
"Hong Kong Commercial Daily" and the Juchao network (www.cninfo.com.cn) on August 10, 2012 and August
29 in the form of announcement (No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013, 2014 and 2016 performance incentive fund provision and distribution
plan
See details in "Implementation of the company's annual incentive fund" in "XI Implementation of the company's
stock incentive plan, employee stock ownership plan, or other employee incentive measures" in "Section V
Important Events" of the company's "2019 Semi-Annual Report" disclosed on 16 August 2019.
Up to the end of this reporting period, the company's stock purchased by some 2012 annual performance incentive
objects (non-directors, supervisors and senior management), 2013 annual performance incentive objects
(non-directors, supervisors and senior management), the 2014 annual performance incentive objects
(non-directors, supervisors and senior management) with their granted 2012 annual performance incentive funds
and own funds and 2013 & 2014 annual performance incentive funds and own funds have been fully released for
trading; the stock purchased by some 2016 annual performance incentive objects (non-directors, supervisors and
senior management), with their granted 2016 annual performance incentive funds and own funds are expired for
two years, 50% of the stock shall be released for trading, details of the share reduction for the above mentioned
objects see below. In the Period, except for the director and deputy president Mr. Zhong Ming, the Company‘s
shares purchased by the current directors, supervisors and senior executives among the performance incentive
targets due to the implementation of the 2012, 2013, 2014 and 2016 annual performance incentive plans have not
reduced the shareholdings. On 22 August 2019, Mr. Zhong Ming reduced 78,725 stocks of holds through
centralized bidding, found more on announcement (Notice No.: 2019-055) released on appointed media China
Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Website dated 22 August 2019.
2. Shareholding and reducing of performance incentive objects of the Company
Ended as 31 December 2019, shares hold by all incentive objects amounting to 11,200,217 shares, a 1.0722 % in
total share capital of the Company, including 9,510,324 A-share, a 0.9104% in total share capital and 1,689,893
B-share, a 0.1618% in total share capital of the Company. Other grantees of the 2012, 2013, 2014 and 2016
incentive plan (including incumbent directors, supervisors and senior management) have reduced holding of
5,313,598 in aggregate, accounting for about 0.5087% of the total share capital and 597,213 shares are reduced in
total during the reporting period.
XVI. Major related party transaction
(i) Related party transaction with routine operation concerned
√Applicable □ Not applicable
1. Related party transaction with routine operation concerned
71
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Trading
Trading Trading Propo Whether Availab
limit Clearin
Content rtion
Type of price (in amount (in over the g form le
Ser of related in approve Date of
related Pricing for
Related party Relationship party 10 10 similar approved similar Index of disclosure
ial party principle d (in 10 related disclosure
transactio transa
transaction thousand thousand limited or transact market
n ctions thousan ion
Yuan) Yuan) (%) not (Y/N) price
d Yuan)
Plastic
particles, Juchao
Spot 11 Dec. and
Sichuan Controlling integrated Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong shareholder Commodity circuit, Marketing Notice No.: 2018-071,
1 33,598.70 33,598.70 2.80% 60,000 N e, Bank - 31 Aug., 27
Electric Co., and ultimate purchased steel plate price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Ltd. controller & plastic 2019-058, 2019-067, 2019-069
ce Nov. 2019
parts and and 2019-072
TV etc.
Juchao
Sichuan 11 Dec. and
Controlling Website(www.cninfo.com.cn)
Changhong TV, Cash 28 Dec. 2018;
shareholder Commodity Marketing Notice No.: 2018-071,
2 Electronics Air-condit 9.11 9.11 0.00% 155,000 N settleme - 31 Aug., 27
and ultimate purchased price 2018-075, 2018-079, 2019-057,
Holding Group ioning nt Sept. and 18
controller 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and 2019-072
Other
enterprise Juchao
Spot 11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Huayi the same Commodity Compress Marketing Notice No.: 2018-071,
3 38,238.09 38,238.09 3.19% 72,000 N e, Bank - 31 Aug., 27
Compressor controlling purchased or etc. price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate and 2019-072
controller
72
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
Spot 11 Dec. and
Sichuan control under Plastic Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong the same Commodity products Marketing Notice No.: 2018-071,
4 63,000.18 63,000.18 5.25% 140,000 N e, Bank - 31 Aug., 27
Mold Plastic controlling purchased and molds price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Tech. Co., Ltd. shareholder etc. 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate and 2019-072
controller
Other
Door
enterprise Juchao
shell, Spot 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
baseboard, exchang 28 Dec. 2018;
Changhong the same Commodity Marketing Notice No.: 2018-071,
5 holder, 24,924.66 24,924.66 2.08% 55,000 N e, Bank - 31 Aug., 27
Jijia Fine Co., controlling purchased price 2018-075, 2018-079, 2019-057,
Sheet acceptan Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
metal ce Nov. 2019
and ultimate and 2019-072
parts
controller
Other
enterprise Plastic Juchao
Sichuan Spot 11 Dec. and
control under box, fixed Website(www.cninfo.com.cn)
Changhong exchang 28 Dec. 2018;
the same Commodity support Marketing Notice No.: 2018-071,
6 Package 8,304.76 8,304.76 0.69% 20,000 N e, Bank - 31 Aug., 27
controlling purchased block, price 2018-075, 2018-079, 2019-057,
Printing Co., acceptan Sept. and 18
shareholder foam and 2019-058, 2019-067, 2019-069
Ltd. ce Nov. 2019
and ultimate carton etc. and 2019-072
controller
Sichuan Other Printed Spot 11 Dec. and Juchao
Changhong enterprise boards exchang 28 Dec. 2018; Website(www.cninfo.com.cn)
Commodity Marketing
7 Precision control under and 1,270.34 1,270.34 0.11% 10,000 N e, Bank - 31 Aug., 27 Notice No.: 2018-071,
purchased price
Electronics the same assemblie acceptan Sept. and 18 2018-075, 2018-079, 2019-057,
Tech. Co., Ltd. controlling s etc. ce Nov. 2019 2019-058, 2019-067, 2019-069
73
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
8 New Energy Battery 2.18 2.18 0.00% 155,000 N settleme - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Spot 11 Dec. and
control under Website(www.cninfo.com.cn)
Power exchang 28 Dec. 2018;
081 Electronic the same Commodity Marketing Notice No.: 2018-071,
9 transform 49.47 49.47 0.00% 5,000 N e, Bank - 31 Aug., 27
Group controlling purchased price 2018-075, 2018-079, 2019-057,
er acceptan Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Spot 11 Dec. and
Guangdong control under Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong the same Commodity Foam Marketing Notice No.: 2018-071,
10 233.81 233.81 0.02% 5,000 N e, Bank - 31 Aug., 27
Electronics controlling purchased pieces etc. price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate and 2019-072
controller
74
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
Frequency
enterprise Juchao
Sichuan conversio Spot 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong n exchang 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
11 Intelligent integrate 99.30 99.30 0.01% 155,000 N e, Bank - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
Manufacturing d board acceptan Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. shell, ce Nov. 2019
and ultimate and 2019-072
particle
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Panovasic Co., the same Commodity Central Marketing Notice No.: 2018-071,
12 426.64 426.64 0.04% 5,000 N settleme - 31 Aug., 27
Ltd. controlling purchased controller price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Mid-autu 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
mn Cash 28 Dec. 2018;
Changhong the same Commodity Marketing Notice No.: 2018-071,
13 festival 18.86 18.86 0.00% 155,000 N settleme - 31 Aug., 27
International controlling purchased price 2018-075, 2018-079, 2019-057,
consolati nt Sept. and 18
Hotel Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
on Nov. 2019
and ultimate and 2019-072
controller
Sichuan Other 11 Dec. and Juchao
Zhiyijia enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Commodity Electronic Marketing
14 Network control under 96.01 96.01 0.01% 5,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
purchased products price
Technology the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd. controlling Nov. 2019 2019-058, 2019-067, 2019-069
75
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Commodity Marketing Notice No.: 2018-071,
15 Battery 0.30 0.30 0.00% 5,000 N settleme - 31 Aug., 27
Power Source controlling purchased price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Changhong 11 Dec. and
control under Website(www.cninfo.com.cn)
International Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
16 Holdings Television 39.47 39.47 0.00% 5,000 N settleme 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
(Hong Kong) nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other Voice
enterprise componen Juchao
Sichuan Spot 11 Dec. and
control under ts, remote Website(www.cninfo.com.cn)
Changhong exchang 28 Dec. 2018;
the same Commodity control Marketing Notice No.: 2018-071,
17 Electronic 2,401.66 2,401.66 0.20% 6,000 N e, Bank - 31 Aug., 27
controlling purchased and price 2018-075, 2018-079, 2019-057,
Products Co., acceptan Sept. and 18
shareholder electrical 2019-058, 2019-067, 2019-069
Ltd. ce Nov. 2019
and ultimate componen and 2019-072
controller ts etc.
76
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Hongxin the same Commodity Informatio Marketing Notice No.: 2018-071,
18 16.98 16.98 0.00% 5,000 N settleme - 31 Aug., 27
Software Co., controlling purchased n system price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Exit Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
19 Property card/perm 0.03 0.03 0.00% 155,000 N settleme - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
Service Co., it nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other Internet
enterprise module, Juchao
Spot 11 Dec. and
Sichuan Ailian control under drawer Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Science & the same Commodity guide rail Marketing Notice No.: 2018-071,
20 2,073.65 2,073.65 0.17% 155,000 N e, Bank - 31 Aug., 27
Technology controlling purchased and price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Co., Ltd. shareholder temperatu 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate re sensor and 2019-072
controller etc.
Other Integrated Spot 11 Dec. and Juchao
Sichuan
enterprise frequency exchang 28 Dec. 2018; Website(www.cninfo.com.cn)
Aichuang Commodity Marketing
21 control under conversio 9,800.56 9,800.56 0.82% 20,000 N e, Bank - 31 Aug., 27 Notice No.: 2018-071,
Technology purchased price
the same n board, acceptan Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd.
controlling fixed ce Nov. 2019 2019-058, 2019-067, 2019-069
77
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder support and 2019-072
and ultimate board and
controller connectin
g pipe etc.
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong LED Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
22 Electronic display 4.74 4.74 0.00% 5,000 N settleme - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
System Co., system nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Hunan 11 Dec. and
control under Website(www.cninfo.com.cn)
Grand-Pro Intelligent 28 Dec. 2018;
the same Commodity Marketing Bank 承 Notice No.: 2018-071,
23 Intelligent vacuum 777.09 777.09 0.06% 1,000 N - 31 Aug., 27
controlling purchased price 兑结算 2018-075, 2018-079, 2019-057,
Tech. cleaner Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Company Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Video Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
24 Network conferenc 9.30 9.30 0.00% 5,000 N settleme - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
Technology e terminal nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
78
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
Mid-autu 11 Dec. and
control under Website(www.cninfo.com.cn)
Lejiayi Chain mn Cash 28 Dec. 2018;
the same Commodity Marketing Notice No.: 2018-071,
25 Management festival 5.96 5.96 0.00% 5,000 N settleme - 31 Aug., 27
controlling purchased price 2018-075, 2018-079, 2019-057,
Co., Ltd. consolatio nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
n Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
GuangYuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Commodity Water Marketing Notice No.: 2018-071,
26 Electronic 37.66 37.66 0.00% 5,000 N settleme - 31 Aug., 27
controlling purchased dispenser price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Shuttle
bus fee,
Juchao
Sichuan staff 11 Dec. and
Controlling Website(www.cninfo.com.cn)
Changhong Receiving physical Cash 28 Dec. 2018;
shareholder Marketing Notice No.: 2018-071,
27 Electronics labor examinati 68.31 68.31 0.04% 155,000 N settleme - 31 Aug., 27
and ultimate price 2018-075, 2018-079, 2019-057,
Holding Group services on fee, nt Sept. and 18
controller 2019-058, 2019-067, 2019-069
Co., Ltd. inspection Nov. 2019
and 2019-072
and test
fee
Sichuan Controlling Software 11 Dec. and Juchao
Receiving Cash
Changhong shareholder usage fee, Marketing 28 Dec. 2018; Website(www.cninfo.com.cn)
28 labor 1,569.80 1,569.80 0.95% 5,500 N settleme -
Electric Co., and ultimate Informatio price 31 Aug., 27 Notice No.: 2018-071,
services nt
Ltd. controller n system Sept. and 18 2018-075, 2018-079, 2019-057,
79
CHANGHONG MEILING CO.,LTD. Annual Report 2019
service Nov. 2019 2019-058, 2019-067, 2019-069
fee, and 2019-072
inspection
and
certificati
on fee etc.
Other
enterprise Transport Juchao
Sichuan 11 Dec. and
control under ation, Website(www.cninfo.com.cn)
Changhong Receiving Cash 28 Dec. 2018;
the same storage, Marketing 26.48 Notice No.: 2018-071,
29 Minsheng labor 43,784.10 43,784.10 60,000 N settleme - 31 Aug., 27
controlling loading price % 2018-075, 2018-079, 2019-057,
Logistics Co., services nt Sept. and 18
shareholder and 2019-058, 2019-067, 2019-069
LTD Nov. 2019
and ultimate unloading and 2019-072
controller
Other
Conferenc
enterprise Juchao
e 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Receiving organizati Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
30 labor on fee, 10.84 10.84 0.01% 5,500 N settleme - 31 Aug., 27
Mold Plastic controlling price 2018-075, 2018-079, 2019-057,
services market nt Sept. and 18
Tech. Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
support Nov. 2019
and ultimate and 2019-072
fee etc.
controller
Other After
Juchao
Sichuan enterprise sales, 11 Dec. and
Website(www.cninfo.com.cn)
Service Exp. control under Receiving installatio Cash 28 Dec. 2018;
Marketing 14.50 Notice No.: 2018-071,
31 Appliance the same labor n and 23,979.17 23,979.17 35,000 N settleme - 31 Aug., 27
price % 2018-075, 2018-079, 2019-057,
Service Chain controlling services maintenan nt Sept. and 18
2019-058, 2019-067, 2019-069
Co., Ltd. shareholder ce costs Nov. 2019
and 2019-072
and ultimate etc.
80
CHANGHONG MEILING CO.,LTD. Annual Report 2019
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Receiving Cash 28 Dec. 2018;
Hongxin the same Software Marketing Notice No.: 2018-071,
32 labor 34.43 34.43 0.02% 5,500 N settleme - 31 Aug., 27
Software Co., controlling usage fee price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other Network
enterprise service Juchao
11 Dec. and
Guangdong control under fee, Website(www.cninfo.com.cn)
Receiving Cash 28 Dec. 2018;
Changhong the same informatio Marketing Notice No.: 2018-071,
33 labor 47.89 47.89 0.03% 5,500 N settleme - 31 Aug., 27
Electronics controlling n price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Co., Ltd. shareholder consultati 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate on fee, and 2019-072
controller etc.
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Receiving Business Cash 28 Dec. 2018;
Jiahong the same Marketing Notice No.: 2018-071,
34 labor activity 7.08 7.08 0.00% 155,000 N settleme - 31 Aug., 27
Industrial Co., controlling price 2018-075, 2018-079, 2019-057,
services fee nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
81
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Receiving Business Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
35 labor activity 14.62 14.62 0.01% 155,000 N settleme - 31 Aug., 27
International controlling price 2018-075, 2018-079, 2019-057,
services fee nt Sept. and 18
Hotel Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Receiving Cash 28 Dec. 2018;
the same Ticketing Marketing Notice No.: 2018-071,
36 International labor 53.61 53.61 0.03% 155,000 N settleme - 31 Aug., 27
controlling fee price 2018-075, 2018-079, 2019-057,
Travel Service services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan Property 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Receiving managem Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
37 Property labor ent fee, 408.71 408.71 0.25% 155,000 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Service Co., services maintenan nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. ce fee, etc Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Experime
enterprise Receiving Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Panovasic Co., ntal Marketing
38 control under labor 37.22 37.22 0.02% 5,500 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Ltd. technical price
the same services nt Sept. and 18 2018-075, 2018-079, 2019-057,
service fee
controlling Nov. 2019 2019-058, 2019-067, 2019-069
82
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Zhiyijia Receiving Cash 28 Dec. 2018;
the same Platform Marketing Notice No.: 2018-071,
39 Network labor 296.10 296.10 0.18% 300 N settleme - 31 Aug., 27
controlling usage fee price 2018-075, 2018-079, 2019-057,
Technology services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Receiving Cash 28 Dec. 2018;
the same Communi Marketing Notice No.: 2018-071,
40 Network labor 4.57 4.57 0.00% 5,500 N settleme - 31 Aug., 27
controlling cation fee price 2018-075, 2018-079, 2019-057,
Technology services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Equipmen Juchao
Sichuan 11 Dec. and
control under t repair Website(www.cninfo.com.cn)
Changhong Receiving Cash 28 Dec. 2018;
the same cost, Marketing Notice No.: 2018-071,
41 Intelligent labor 230.57 230.57 0.14% 155,000 N settleme - 31 Aug., 27
controlling relocation price 2018-075, 2018-079, 2019-057,
Manufacturing services nt Sept. and 18
shareholder labor cost, 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. Nov. 2019
and ultimate etc. and 2019-072
controller
83
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Receiving Equipmen Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
42 labor t repair 3.81 3.81 0.00% 5,500 N settleme - 31 Aug., 27
Jijia Fine Co., controlling price 2018-075, 2018-079, 2019-057,
services cost nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Receiving Human Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
43 Electronic labor resources 45.05 45.05 0.03% 5,500 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Products Co., services services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Receiving Labor cost 28 Dec. 2018;
081 Electronic the same Marketing Bank 承 Notice No.: 2018-071,
44 labor for 42 42 0.03% 5,500 N - 31 Aug., 27
Group controlling price 兑结算 2018-075, 2018-079, 2019-057,
services relocation Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Sichuan Ailian
enterprise Receiving Equipmen Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Science & Marketing
45 control under labor t repair 2.63 2.63 0.00% 155,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Technology price
the same services cost nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd.
controlling Nov. 2019 2019-058, 2019-067, 2019-069
84
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Juchao
11 Dec. and
Sichuan Controlling Website(www.cninfo.com.cn)
Purchase Water, Cash 28 Dec. 2018;
Changhong shareholder Marketing Notice No.: 2018-071,
46 fuel and electricity, 1,795.67 1,795.67 0.15% 60,000 N settleme - 31 Aug., 27
Electric Co., and ultimate price 2018-075, 2018-079, 2019-057,
power gas etc. nt Sept. and 18
Ltd. controller 2019-058, 2019-067, 2019-069
Nov. 2019
and 2019-072
Other
enterprise Juchao
11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
Purchase Cash 28 Dec. 2018;
Huayi the same Marketing Notice No.: 2018-071,
47 fuel and Steam 82.59 82.59 0.01% 130 N settleme - 31 Aug., 27
Compressor controlling price 2018-075, 2018-079, 2019-057,
power nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Guangdong control under Website(www.cninfo.com.cn)
Purchase Water, Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
48 fuel and electricity 142.93 142.93 0.01% 5,000 N settleme - 31 Aug., 27
Electronics controlling price 2018-075, 2018-079, 2019-057,
power etc. nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Hefei Other 11 Dec. and Juchao
Purchase Cash
Changhong enterprise Electricity Marketing 28 Dec. 2018; Website(www.cninfo.com.cn)
49 fuel and 36.88 36.88 0.00% 5,000 N settleme -
New Energy control under fee price 31 Aug., 27 Notice No.: 2018-071,
power nt
Science & the same Sept. and 18 2018-075, 2018-079, 2019-057,
85
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Technology controlling Nov. 2019 2019-058, 2019-067, 2019-069
Co., Ltd. shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Purchase Cash 28 Dec. 2018;
the same Electricity Marketing Notice No.: 2018-071,
50 Property fuel and 2.19 2.19 0.00% 155,000 N settleme - 31 Aug., 27
controlling fee price 2018-075, 2018-079, 2019-057,
Service Co., power nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Plastic
cement,
Air-condit Juchao
Spot 11 Dec. and
Sichuan Controlling ioning, Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong shareholder Sale of waste Marketing Notice No.: 2018-071,
51 2,277.33 2,277.33 0.15% 8,000 N e, Bank - 31 Aug., 27
Electric Co., and ultimate goods materials, price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Ltd. controller small 2019-058, 2019-067, 2019-069
ce Nov. 2019
household and 2019-072
appliances
etc.
Juchao
Sichuan 11 Dec. and
Controlling Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
shareholder Sale of Marketing Notice No.: 2018-071,
52 Electronics Fresh 31.91 31.91 0.00% 3,000 N settleme - 31 Aug., 27
and ultimate goods price 2018-075, 2018-079, 2019-057,
Holding Group nt Sept. and 18
controller 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and 2019-072
86
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Door Juchao
Spot 11 Dec. and
Sichuan control under shell, Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong the same Sale of color plate Marketing Notice No.: 2018-071,
53 4,482.46 4,482.46 0.29% 10,000 N e, Bank - 31 Aug., 27
Jijia Fine Co., controlling goods and other price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Ltd. shareholder componen 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate ts and 2019-072
controller
Other
enterprise Color Juchao
Spot 11 Dec. and
Sichuan control under masterbat Website(www.cninfo.com.cn)
exchang 28 Dec. 2018;
Changhong the same Sale of ch, plastic Marketing Notice No.: 2018-071,
54 20,777.22 20,777.22 1.35% 35,000 N e, Bank - 31 Aug., 27
Mold Plastic controlling goods particle, price 2018-075, 2018-079, 2019-057,
acceptan Sept. and 18
Tech. Co., Ltd. shareholder Air-condit 2019-058, 2019-067, 2019-069
ce Nov. 2019
and ultimate ioning and 2019-072
controller
Refrigerat
or,
Other
freezer,
enterprise Juchao
Air-condit Spot 11 Dec. and
control under Website(www.cninfo.com.cn)
Lejiayi Chain ioning, exchang 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
55 Management Washing 6,254.86 6,254.86 0.41% 7,200 N e, Bank - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Co., Ltd. machine, acceptan Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
small ce Nov. 2019
and ultimate and 2019-072
household
controller
appliances
etc.
87
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
PT.CHANGH control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
ONGELECTR the same Sale of Refrigerat Marketing Notice No.: 2018-071,
56 1,024.84 1,024.84 0.07% 12,000 N settleme - 31 Aug., 27
ICINDONESI controlling goods or, freezer price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
A shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
CHANGHON Cash 28 Dec. 2018;
the same Sale of Air-condit Marketing Notice No.: 2018-071,
57 G(HK)TRADI 36,912.93 36,912.93 2.39% 100,000 N settleme - 31 Aug., 27
controlling goods ioning price 2018-075, 2018-079, 2019-057,
NGLIMITED nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
CHANGHON Cash 28 Dec. 2018;
the same Sale of Refrigerat Marketing Notice No.: 2018-071,
58 GELECTRIC( 6,629.12 6,629.12 0.43% 12,000 N settleme - 31 Aug., 27
controlling goods or, freezer price 2018-075, 2018-079, 2019-057,
AUSTRALIA) nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Panovasic Co., Sale of Marketing
59 control under Fresh 0.76 0.76 0.00% 12,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Ltd. goods price
the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
controlling Nov. 2019 2019-058, 2019-067, 2019-069
88
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Air-condit Marketing Notice No.: 2018-071,
60 8.14 8.14 0.00% 12,000 N settleme - 31 Aug., 27
Device Tech. controlling goods ioning price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
Refrigerat
enterprise Juchao
Sichuan or, 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong freezer, Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
61 Minsheng small 167.50 167.50 0.01% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Logistics Co., household nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
LTD appliances Nov. 2019
and ultimate and 2019-072
etc.
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Service Exp. Maintenan Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
62 Appliance ce parts 599.76 599.76 0.04% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Service Chain etc. nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
89
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
Sichuan enterprise Juchao
11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Gerun the same Sale of Waste Marketing Notice No.: 2018-071,
63 743.53 743.53 0.05% 3,000 N settleme - 31 Aug., 27
Environmental controlling goods materials price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Protection shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
Tech. Co., Ltd. and ultimate and 2019-072
controller
Other
enterprise Air-condit Juchao
11 Dec. and
Hefei control under ioning, Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Washing Marketing Notice No.: 2018-071,
64 111.05 111.05 0.01% 12,000 N settleme - 31 Aug., 27
Industrial Co., controlling goods machine, price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. shareholder refrigerati 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate on etc. and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Sichuan Air-condit Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
65 Huafeng Corp. ioning, 12.81 12.81 0.00% 3,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Group Fresh nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Sichuan Other Refrigerat Spot 11 Dec. and Juchao
Zhiyijia enterprise or, exchang 28 Dec. 2018; Website(www.cninfo.com.cn)
Sale of Marketing 295,507.4 19.14
66 Network control under freezer, 295,507.43 480,000 N e, Bank - 31 Aug., 27 Notice No.: 2018-071,
goods price 3 %
Technology the same Washing acceptan Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd. controlling machine, ce Nov. 2019 2019-058, 2019-067, 2019-069
90
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder Air-condit and 2019-072
and ultimate ioning,
controller small
household
appliances
etc.
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Air-condit Marketing Notice No.: 2018-071,
67 95.07 95.07 0.01% 12,000 N settleme - 31 Aug., 27
Property Co., controlling goods ioning price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
68 Network Fresh 0.10 0.10 0.00% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
Juchao
Sichuan enterprise 11 Dec. and
Website(www.cninfo.com.cn)
Changhong control under Cash 28 Dec. 2018;
Sale of Marketing Notice No.: 2018-071,
69 Wisdom the same Fresh 0.44 0.44 0.00% 12,000 N settleme - 31 Aug., 27
goods price 2018-075, 2018-079, 2019-057,
Health Tech. controlling nt Sept. and 18
2019-058, 2019-067, 2019-069
Co., Ltd. shareholder Nov. 2019
and 2019-072
and ultimate
91
CHANGHONG MEILING CO.,LTD. Annual Report 2019
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Air-condit Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
70 Property ioning, 6.60 6.60 0.00% 3,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Service Co., Fresh nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Air-condit 11 Dec. and
Guangdong control under Website(www.cninfo.com.cn)
ioning, Cash 28 Dec. 2018;
Changhong the same Sale of Marketing Notice No.: 2018-071,
71 water 61.73 61.73 0.00% 12,000 N settleme - 31 Aug., 27
Electronics controlling goods price 2018-075, 2018-079, 2019-057,
purifier nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
etc. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Electroma Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
72 Intelligent gnetic 3.34 3.34 0.00% 3,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Manufacturing furnace nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
92
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
BVCH control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Optronics the same Sale of Marketing Notice No.: 2018-071,
73 Fresh 0.68 0.68 0.00% 12,000 N settleme - 31 Aug., 27
(Sichuan) Co., controlling goods price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
74 Electronic Fresh 8.22 8.22 0.00% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Products Co., nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Marketing Notice No.: 2018-071,
75 Fresh 1.84 1.84 0.00% 3,000 N settleme - 31 Aug., 27
Group Finance controlling goods price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Changhong
enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Huayi Sale of Waste Marketing
76 control under 0.11 0.11 0.00% 12,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Compressor goods foam price
the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd.
controlling Nov. 2019 2019-058, 2019-067, 2019-069
93
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
77 Package Fresh 0.35 0.35 0.00% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Printing Co., nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Air-condit Marketing Notice No.: 2018-071,
78 8.44 8.44 0.00% 12,000 N settleme - 31 Aug., 27
Power Source controlling goods ioning price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Air-condit Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
79 Education ioning, 1,194.40 1,194.40 0.08% 3,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Technology health pot nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
94
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Compress Cash 28 Dec. 2018;
081 Electronic the same Sale of Marketing Notice No.: 2018-071,
80 or, AC 1.72 1.72 0.00% 12,000 N settleme - 31 Aug., 27
Group controlling goods price 2018-075, 2018-079, 2019-057,
contactor nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
Refrigerat
enterprise Juchao
GuangYuan or, 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong freezer, Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
81 Electronic Air-condit 112.06 112.06 0.01% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Technology ioning, nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Washing Nov. 2019
and ultimate and 2019-072
machine
controller
Other
enterprise Juchao
11 Dec. and
Sichuan Ailian control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Science & the same Sale of Air-condit Marketing Notice No.: 2018-071,
82 2.09 2.09 0.00% 3,000 N settleme - 31 Aug., 27
Technology controlling goods ioning price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Sichuan
enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Jiahong Sale of Marketing
83 control under Fresh 13.87 13.87 0.00% 3,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Industrial Co., goods price
the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
Ltd.
controlling Nov. 2019 2019-058, 2019-067, 2019-069
95
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
the same Sale of Air-condit Marketing Notice No.: 2018-071,
84 New Energy 8.94 8.94 0.00% 3,000 N settleme - 31 Aug., 27
controlling goods ioning price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Marketing Notice No.: 2018-071,
85 Fresh 3.62 3.62 0.00% 3,000 N settleme - 31 Aug., 27
International controlling goods price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Hotel Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Logic Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
86 Precision integrated 0.09 0.09 0.00% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Electronics circuit nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
96
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Orion.PDP.Co. the same Sale of Refrigerat Marketing Notice No.: 2018-071,
87 3,473.67 3,473.67 0.22% 4,200 N settleme - 31 Aug., 27
,ltd controlling goods or price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Changhong 11 Dec. and
control under Website(www.cninfo.com.cn)
International Cash 28 Dec. 2018;
the same Sale of Air-condit Marketing Notice No.: 2018-071,
88 Holdings 164.88 164.88 0.01% 100 N settleme - 31 Aug., 27
controlling goods ioning price 2018-075, 2018-079, 2019-057,
(Hong Kong) nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
ChanghongEur Cash 28 Dec. 2018;
the same Sale of Refrigerat Marketing Notice No.: 2018-071,
89 opeElectrics.r. 166.90 166.90 0.01% 12,000 N settleme - 31 Aug., 27
controlling goods or price 2018-075, 2018-079, 2019-057,
o nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
CHANGHON Refrigerat
enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
GELECTRIC Sale of or, Marketing
90 control under 1,285.90 1,285.90 0.08% 12,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
MIDDLEEAS goods Air-condit price
the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
TFZCO ioning
controlling Nov. 2019 2019-058, 2019-067, 2019-069
97
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Small Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Aichuang the same Sale of home Marketing Notice No.: 2018-071,
91 47.86 47.86 0.00% 3,000 N settleme - 31 Aug., 27
Technology controlling goods appliance, price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder Fresh etc. 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Mianyang 11 Dec. and
control under Website(www.cninfo.com.cn)
Huafeng Cash 28 Dec. 2018;
the same Sale of Air-condit Marketing Notice No.: 2018-071,
92 Interconnectio 844.98 844.98 0.05% 3,000 N settleme - 31 Aug., 27
controlling goods ioning price 2018-075, 2018-079, 2019-057,
n Tech. Co., nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Hunan 11 Dec. and
control under Website(www.cninfo.com.cn)
Grand-Pro Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
93 Intelligent Label 0.29 0.29 0.00% 12,000 N settleme - 31 Aug., 27
controlling goods price 2018-075, 2018-079, 2019-057,
Tech. nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Company Nov. 2019
and ultimate and 2019-072
controller
98
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Provide Cash 28 Dec. 2018;
Changhong the same Service Marketing Notice No.: 2018-071,
94 labor 7.04 7.04 0.21% 5,500 N settleme - 31 Aug., 27
Mold Plastic controlling charge price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Tech. Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Provide Cash 28 Dec. 2018;
Changhong the same Technical Marketing Notice No.: 2018-071,
95 labor 51.08 51.08 1.55% 5,500 N settleme - 31 Aug., 27
Device Tech. controlling service fee price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Provide Cash 28 Dec. 2018;
Changhong the same Installatio Marketing Notice No.: 2018-071,
96 labor 64.15 64.15 1.94% 5,500 N settleme - 31 Aug., 27
Property Co., controlling n service price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Changhong
enterprise Provide Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Huayi Technical Marketing
97 control under labor 37.74 37.74 1.14% 5,500 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Compressor service fee price
the same services nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd.
controlling Nov. 2019 2019-058, 2019-067, 2019-069
99
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Technical Website(www.cninfo.com.cn)
Provide Cash 28 Dec. 2018;
Aichuang the same service Marketing Notice No.: 2018-071,
98 labor 62.03 62.03 1.88% 3,000 N settleme - 31 Aug., 27
Technology controlling fee, labor price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Co., Ltd. shareholder processing 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Provide Cash 28 Dec. 2018;
the same Service Marketing Notice No.: 2018-071,
99 New Energy labor 3.07 3.07 0.09% 3,000 N settleme - 31 Aug., 27
controlling charge price 2018-075, 2018-079, 2019-057,
Technology services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Provide Cash 28 Dec. 2018;
the same Maintenan Marketing Notice No.: 2018-071,
100 Minsheng labor 0.96 0.96 0.03% 5,500 N settleme - 31 Aug., 27
controlling ce cost price 2018-075, 2018-079, 2019-057,
Logistics Co., services nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
LTD Nov. 2019
and ultimate and 2019-072
controller
100
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Provide Cash 28 Dec. 2018;
Changhong the same Service Marketing Notice No.: 2018-071,
101 labor 4.40 4.40 0.13% 5,500 N settleme - 31 Aug., 27
Jijia Fine Co., controlling charge price 2018-075, 2018-079, 2019-057,
services nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Juchao
11 Dec. and
Sichuan Controlling Website(www.cninfo.com.cn)
Water, Cash 28 Dec. 2018;
Changhong shareholder Provide fuel Marketing Notice No.: 2018-071,
102 Electricity 1.35 1.35 0.00% 12,000 N settleme - 31 Aug., 27
Electric Co., and ultimate power price 2018-075, 2018-079, 2019-057,
fee nt Sept. and 18
Ltd. controller 2019-058, 2019-067, 2019-069
Nov. 2019
and 2019-072
Other
enterprise Juchao
11 Dec. and
Guangdong control under Water, Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Provide fuel electricity Marketing Notice No.: 2018-071,
103 65.17 65.17 0.00% 12,000 N settleme - 31 Aug., 27
Electronics controlling power and gas price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder charges 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
Juchao
Sichuan enterprise 11 Dec. and
Website(www.cninfo.com.cn)
Changhong control under Water, Cash 28 Dec. 2018;
Provide fuel Marketing Notice No.: 2018-071,
104 Minsheng the same Electricity 7.33 7.33 0.00% 12,000 N settleme - 31 Aug., 27
power price 2018-075, 2018-079, 2019-057,
Logistics Co., controlling fee nt Sept. and 18
2019-058, 2019-067, 2019-069
LTD shareholder Nov. 2019
and 2019-072
and ultimate
101
CHANGHONG MEILING CO.,LTD. Annual Report 2019
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Water, Cash 28 Dec. 2018;
Changhong the same Provide fuel Marketing Notice No.: 2018-071,
105 Electricity 13.83 13.83 0.00% 12,000 N settleme - 31 Aug., 27
Jijia Fine Co., controlling power price 2018-075, 2018-079, 2019-057,
fee nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Water, Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Provide fuel electricity Marketing Notice No.: 2018-071,
106 757.35 757.35 0.05% 12,000 N settleme - 31 Aug., 27
Mold Plastic controlling power and gas price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Tech. Co., Ltd. shareholder charges 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Water, Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Panovasic Co., the same Provide fuel electricity Marketing Notice No.: 2018-071,
107 0.37 0.37 0.00% 12,000 N settleme - 31 Aug., 27
Ltd. controlling power and gas price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
shareholder charges 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
102
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Water, Cash 28 Dec. 2018;
the same Provide fuel Marketing Notice No.: 2018-071,
108 Precision Electricity 1.54 1.54 0.00% 12,000 N settleme - 31 Aug., 27
controlling power price 2018-075, 2018-079, 2019-057,
Electronics fee nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Water, Cash 28 Dec. 2018;
Changhong the same Provide fuel Marketing Notice No.: 2018-071,
109 Electricity 117.63 117.63 0.01% 12,000 N settleme - 31 Aug., 27
Device Tech. controlling power price 2018-075, 2018-079, 2019-057,
fee nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Service Exp. Water, Cash 28 Dec. 2018;
the same Provide fuel Marketing Notice No.: 2018-071,
110 Appliance Electricity 0.95 0.95 0.00% 12,000 N settleme - 31 Aug., 27
controlling power price 2018-075, 2018-079, 2019-057,
Service Chain fee nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
Guangdong
enterprise Rent to Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Changhong Office Marketing
111 control under related 19.75 19.75 0.11% 5,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Electronics building price
the same parties nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd.
controlling Nov. 2019 2019-058, 2019-067, 2019-069
103
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
11 Dec. and
Hefei control under Website(www.cninfo.com.cn)
Rent to Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
112 related Apartment 25.73 25.73 0.14% 5,000 N settleme - 31 Aug., 27
Industrial Co., controlling price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Rent to Cash 28 Dec. 2018;
Aichuang the same Warehous Marketing Notice No.: 2018-071,
113 related 4.19 4.19 0.02% 3,000 N settleme - 31 Aug., 27
Technology controlling e, forklift price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan Ailian control under Website(www.cninfo.com.cn)
Rent to Cash 28 Dec. 2018;
Science & the same Warehous Marketing Notice No.: 2018-071,
114 related 0.27 0.27 0.00% 3,000 N settleme - 31 Aug., 27
Technology controlling e price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
104
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Rent to 2# living Cash 28 Dec. 2018;
Panovasic Co., the same Marketing Notice No.: 2018-071,
115 related area, 4.53 4.53 0.02% 5,000 N settleme - 31 Aug., 27
Ltd. controlling price 2018-075, 2018-079, 2019-057,
parties workshop nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Sichuan Rent to Cash 28 Dec. 2018;
the same Conferenc Marketing Notice No.: 2018-071,
116 Huafeng Corp. related 0.37 0.37 0.00% 3,000 N settleme - 31 Aug., 27
controlling e room price 2018-075, 2018-079, 2019-057,
Group parties nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Office, Website(www.cninfo.com.cn)
Service Exp. Rent to Cash 28 Dec. 2018;
the same workshop, Marketing Notice No.: 2018-071,
117 Appliance related 31.83 31.83 0.17% 5,000 N settleme - 31 Aug., 27
controlling forklift price 2018-075, 2018-079, 2019-057,
Service Chain parties nt Sept. and 18
shareholder truck etc. 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
11 Dec. and Juchao
Sichuan Controlling
Rent to Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Changhong shareholder Apartment Marketing
118 related 217.20 217.20 1.18% 5,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Electric Co., and ultimate equipment price
parties nt Sept. and 18 2018-075, 2018-079, 2019-057,
Ltd. controller
Nov. 2019 2019-058, 2019-067, 2019-069
105
CHANGHONG MEILING CO.,LTD. Annual Report 2019
and 2019-072
Other
enterprise Juchao
Forklift 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Rent to truck, Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
119 related workshop, 76.86 76.86 0.42% 5,000 N settleme - 31 Aug., 27
Jijia Fine Co., controlling price 2018-075, 2018-079, 2019-057,
parties Warehous nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
e etc. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Rent to Apartment Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
120 Precision related , 2# living 12.05 12.05 0.07% 5,000 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Electronics parties area nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan Rent parts 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong Rent to of the Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
121 Minsheng related office 307.18 307.18 1.67% 5,000 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Logistics Co., parties building, nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
LTD workshop Nov. 2019
and ultimate and 2019-072
controller
106
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under 2# living Website(www.cninfo.com.cn)
Rent to Cash 28 Dec. 2018;
Changhong the same area, Marketing Notice No.: 2018-071,
122 related 731.56 731.56 3.98% 5,000 N settleme - 31 Aug., 27
Mold Plastic controlling Warehous price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Tech. Co., Ltd. shareholder e etc. 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Warehous 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Rent to e,worksh Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
123 related op, 147.58 147.58 0.80% 5,000 N settleme - 31 Aug., 27
Device Tech. controlling price 2018-075, 2018-079, 2019-057,
parties Apartme nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
nt etc. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
Rent to Cash 28 Dec. 2018;
Huayi the same Warehous Marketing Notice No.: 2018-071,
124 related 1.07 1.07 0.01% 5,000 N settleme - 31 Aug., 27
Compressor controlling e price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Changhong Other 11 Dec. and Juchao
International enterprise Rent to Office, Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Marketing
125 Holdings control under related automobil 12.63 12.63 0.07% 5,000 N settleme - 31 Aug., 27 Notice No.: 2018-071,
price
(Hong Kong) the same parties e nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd. controlling Nov. 2019 2019-058, 2019-067, 2019-069
107
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Juchao
11 Dec. and
Sichuan Controlling Website(www.cninfo.com.cn)
To lease Cash 28 Dec. 2018;
Changhong shareholder workshop, Marketing Notice No.: 2018-071,
126 from related 362.61 362.61 1.97% 5,000 N settleme - 31 Aug., 27
Electric Co., and ultimate Office price 2018-075, 2018-079, 2019-057,
parties nt Sept. and 18
Ltd. controller 2019-058, 2019-067, 2019-069
Nov. 2019
and 2019-072
Other
enterprise Juchao
Chengdu 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong To lease Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
127 Electronic from related Office 45.45 45.45 0.25% 5,000 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Technology parties nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Guangdong control under Website(www.cninfo.com.cn)
To lease Staff Cash 28 Dec. 2018;
Changhong the same Marketing Notice No.: 2018-071,
128 from related dormitory, 26.22 26.22 0.14% 5,000 N settleme - 31 Aug., 27
Electronics controlling price 2018-075, 2018-079, 2019-057,
parties workshop nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Sichuan Controlling 11 Dec. and Juchao
To lease Cash
Changhong shareholder Staff Marketing 28 Dec. 2018; Website(www.cninfo.com.cn)
129 from related 4.28 4.28 0.02% 155,000 N settleme -
Electronics and ultimate dormitory price 31 Aug., 27 Notice No.: 2018-071,
parties nt
Holding Group controller Sept. and 18 2018-075, 2018-079, 2019-057,
108
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Co., Ltd. Nov. 2019 2019-058, 2019-067, 2019-069
and 2019-072
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong To lease Cash 28 Dec. 2018;
the same workshop, Marketing Notice No.: 2018-071,
130 Property from related 0.85 0.85 0.00% 155,000 N settleme - 31 Aug., 27
controlling Office price 2018-075, 2018-079, 2019-057,
Service Co., parties nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
control under Website(www.cninfo.com.cn)
Beijing To lease Cash 28 Dec. 2018;
the same Marketing Notice No.: 2018-071,
131 Changhong from related Office 7.89 7.89 0.04% 5,000 N settleme - 31 Aug., 27
controlling price 2018-075, 2018-079, 2019-057,
Tech. Co. Ltd, parties nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan Spot 11 Dec. and
control under Productio Website(www.cninfo.com.cn)
Changhong exchang 28 Dec. 2018;
the same Purchasing n line Marketing Notice No.: 2018-071,
132 Intelligent 3,679.69 3,679.69 4.96% 7,300 N e, Bank - 31 Aug., 27
controlling fixed assets transform price 2018-075, 2018-079, 2019-057,
Manufacturing acceptan Sept. and 18
shareholder ation etc. 2019-058, 2019-067, 2019-069
Tech. Co., Ltd. ce Nov. 2019
and ultimate and 2019-072
controller
109
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
11 Dec. and
Sichuan control under Productio Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Hongcheng the same Purchasing n line Marketing Notice No.: 2018-071,
133 5.66 5.66 0.01% 155,000 N settleme - 31 Aug., 27
Real Estate controlling fixed assets transform price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder ation etc. 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Productio
n Juchao
11 Dec. and
Sichuan Controlling Purchasing equipment Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong shareholder fixed assets, , patent Marketing Notice No.: 2018-071,
134 4,919.78 4,919.78 6.63% 7,100 N settleme - 31 Aug., 27
Electric Co., and ultimate intangible right, price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. controller assets Informatio 2019-058, 2019-067, 2019-069
Nov. 2019
n system and 2019-072
etc.
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Informatio Cash 28 Dec. 2018;
Hongxin the same Purchasing Marketing Notice No.: 2018-071,
135 n system 327.97 327.97 0.44% 7,100 N settleme - 31 Aug., 27
Software Co., controlling fixed assets price 2018-075, 2018-079, 2019-057,
etc. nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Sichuan Other Communi 11 Dec. and Juchao
Changhong enterprise cation Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Purchasing Marketing
136 Network control under network 109.84 109.84 0.15% 7,100 N settleme - 31 Aug., 27 Notice No.: 2018-071,
fixed assets price
Technology the same infrastruct nt Sept. and 18 2018-075, 2018-079, 2019-057,
Co., Ltd. controlling ure of the Nov. 2019 2019-058, 2019-067, 2019-069
110
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder new plant and 2019-072
and ultimate
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Changhong LED Cash 28 Dec. 2018;
the same Purchasing Marketing Notice No.: 2018-071,
137 Electronic display 12.61 12.61 0.02% 7,100 N settleme - 31 Aug., 27
controlling fixed assets price 2018-075, 2018-079, 2019-057,
System Co., system nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Sichuan 11 Dec. and
control under Website(www.cninfo.com.cn)
Zhiyijia Cash 28 Dec. 2018;
the same Purchasing Projector, Marketing Notice No.: 2018-071,
138 Network 10.47 10.47 0.01% 7,100 N settleme - 31 Aug., 27
controlling fixed assets Television price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Workshop Cash 28 Dec. 2018;
Huanyu the same Purchasing Marketing Notice No.: 2018-071,
139 constructi 1,989.73 1,989.73 2.68% 155,000 N settleme - 31 Aug., 27
Industrial Co. controlling fixed assets price 2018-075, 2018-079, 2019-057,
on nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
111
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Other
enterprise Juchao
Infrastruct 11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
ure of the Cash 28 Dec. 2018;
Jiahong the same Purchasing Marketing Notice No.: 2018-071,
140 greening 134.75 134.75 0.18% 155,000 N settleme - 31 Aug., 27
Industrial Co., controlling fixed assets price 2018-075, 2018-079, 2019-057,
for new nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
plant etc. Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
11 Dec. and
Guangdong control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Purchasing Marketing Notice No.: 2018-071,
141 Television 1.27 1.27 0.00% 7,100 N settleme 31 Aug., 27
Electronics controlling fixed assets price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Co., Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Other
enterprise Juchao
Mianyang 11 Dec. and
control under Security Website(www.cninfo.com.cn)
Technology Cash 28 Dec. 2018;
the same Purchasing engineerin Marketing Notice No.: 2018-071,
142 Town Big Data 111.28 111.28 0.15% 7,100 N settleme - 31 Aug., 27
controlling fixed assets g of the price 2018-075, 2018-079, 2019-057,
Technology nt Sept. and 18
shareholder new plant 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and ultimate and 2019-072
controller
Other 11 Dec. and Juchao
enterprise Cash 28 Dec. 2018; Website(www.cninfo.com.cn)
Panovasic Co., Purchasing Electronic Marketing
143 control under 0.09 0.09 0.00% 7,100 N settleme - 31 Aug., 27 Notice No.: 2018-071,
Ltd. fixed assets load price
the same nt Sept. and 18 2018-075, 2018-079, 2019-057,
controlling Nov. 2019 2019-058, 2019-067, 2019-069
112
CHANGHONG MEILING CO.,LTD. Annual Report 2019
shareholder and 2019-072
and ultimate
controller
Other
Sichuan enterprise Juchao
11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
Street Cash 28 Dec. 2018;
Energy the same Purchasing Marketing Notice No.: 2018-071,
144 lamp -2.33 -2.33 0.00% 7,100 N settleme - 31 Aug., 27
Sunshine controlling fixed assets price 2018-075, 2018-079, 2019-057,
return nt Sept. and 18
Technology shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
Co., Ltd. and ultimate and 2019-072
controller
Other
Sichuan enterprise Juchao
11 Dec. and
Changhong control under Website(www.cninfo.com.cn)
Computer, Cash 28 Dec. 2018;
Gerun the same Sale of Marketing Notice No.: 2018-071,
145 Air-condit 0.46 0.46 0.02% 3,000 N settleme - 31 Aug., 27
Environmental controlling fixed assets price 2018-075, 2018-079, 2019-057,
ioning etc. nt Sept. and 18
Protection shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
Tech. Co., Ltd. and ultimate and 2019-072
controller
Juchao
Sichuan 11 Dec. and
Controlling Bookcase, Website(www.cninfo.com.cn)
Changhong Cash 28 Dec. 2018;
shareholder Sale of office Marketing Notice No.: 2018-071,
146 Electronics 1.74 1.74 0.06% 3,000 N settleme - 31 Aug., 27
and ultimate fixed assets furniture price 2018-075, 2018-079, 2019-057,
Holding Group nt Sept. and 18
controller etc. 2019-058, 2019-067, 2019-069
Co., Ltd. Nov. 2019
and 2019-072
Sichuan Other 11 Dec. and Juchao
Office Cash
Jiahong enterprise Sale of Marketing 28 Dec. 2018; Website(www.cninfo.com.cn)
147 furniture, 0.48 0.48 0.02% 3,000 N settleme -
Industrial Co., control under fixed assets price 31 Aug., 27 Notice No.: 2018-071,
freezer nt
Ltd. the same Sept. and 18 2018-075, 2018-079, 2019-057,
113
CHANGHONG MEILING CO.,LTD. Annual Report 2019
controlling Nov. 2019 2019-058, 2019-067, 2019-069
shareholder and 2019-072
and ultimate
controller
Other
enterprise Juchao
Changhong Computer, 11 Dec. and
control under Website(www.cninfo.com.cn)
Shundatong office Cash 28 Dec. 2018;
the same Sale of Marketing Notice No.: 2018-071,
148 Tech. furniture , 12.82 12.82 0.46% 7,100 N settleme - 31 Aug., 27
controlling fixed assets price 2018-075, 2018-079, 2019-057,
Development freezer nt Sept. and 18
shareholder 2019-058, 2019-067, 2019-069
Co., Ltd. etc. Nov. 2019
and ultimate and 2019-072
controller
Juchao
11 Dec. and
Sichuan Controlling Laborator Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong shareholder Sale of y, Marketing Notice No.: 2018-071,
149 102.88 102.88 3.67% 7,100 N settleme - 31 Aug., 27
Electric Co., and ultimate fixed assets instrument price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. controller etc. 2019-058, 2019-067, 2019-069
Nov. 2019
and 2019-072
Other
enterprise Juchao
11 Dec. and
Sichuan control under Website(www.cninfo.com.cn)
Cash 28 Dec. 2018;
Changhong the same Sale of Marketing Notice No.: 2018-071,
150 Crane 1.00 1.00 0.04% 7,100 N settleme - 31 Aug., 27
Jijia Fine Co., controlling fixed assets price 2018-075, 2018-079, 2019-057,
nt Sept. and 18
Ltd. shareholder 2019-058, 2019-067, 2019-069
Nov. 2019
and ultimate and 2019-072
controller
Yuanxin Other Financial Financial Cash 11 Dec. and Juchao
Marketing
151 Financial enterprise leasing, leasing, 391.67 391.67 -- 1,500 N settleme - 28 Dec. 2018; Website(www.cninfo.com.cn)
price
Lease Co., Ltd. control under factoring factoring nt 31 Aug., 27 Notice No.: 2018-071,
114
CHANGHONG MEILING CO.,LTD. Annual Report 2019
the same and and Sept. and 18 2018-075, 2018-079, 2019-057,
controlling financing financing Nov. 2019 2019-058, 2019-067, 2019-069
shareholder etc. and 2019-072
and ultimate
controller
Total -- -- 656,238.07 -- -- -- -- -- -- --
Detail of sales return with major amount involved Not applicable
1. It is estimated that the related party transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and purchasing
fuel and power from Sichuan Changhong and its subsidiary by the Company for year of 2019 was 2960 million Yuan at most (tax-excluded), actually
1,363,961,200 Yuan occurred in reporting period
2. It is estimated that the related party transaction amount resulted by purchasing goods (including compressor purchased, robot cleaner etc.) from
Changhong Huayi and its subsidiary by the Company for year of 2019 was 730 million Yuan at most (tax-excluded), actually 390,151,800 Yuan
occurred in reporting period
3. It is estimated that the related party transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and
molds etc. from Sichuan Changhong and its subsidiary by the Company for year of 2019 was 71 million Yuan at most (tax-excluded), actually
56,076,800 Yuan occurred in reporting period
4. It is estimated that the related party transaction amount resulted by selling goods to and providing fuel and power to Sichuan Changhong and its
Report the actual implementation of the daily related transactions
subsidiary by the Company for year of 2019 was 6523 million Yuan at most (tax-included), actually 3,776,259,000 Yuan occurred in reporting period
which were projected about their total amount by types during the
5. It is estimated that the related party transaction amount resulted by accepting energy, power and service etc. from Huayi Compressor and its
reporting period (if applicable)
subsidiary for year of 2019 was 1.3 million Yuan at most (tax-included), actually 825,900 Yuan occurred in reporting period
6. It is estimated that the related party transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for
year of 2019 was 50 million Yuan at most (tax-excluded), actually 20,301,400 Yuan occurred in reporting period
7. It is estimated that the related party transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng
Logistic Co., Ltd. by the Company for year of 2019 was 600 million Yuan at most (tax-excluded), actually 437,841,000 Yuan occurred in reporting
period
8. It is estimated that the related party transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance
Service Chain Co., Ltd. by the Company for year of 2019 was 350 million Yuan at most, actually 239,791,700 Yuan occurred in reporting period.
9. It is estimated that the related party transaction amount resulted by accepting other service and labor service etc. or providing other service and labor
115
CHANGHONG MEILING CO.,LTD. Annual Report 2019
service etc. to Sichuan Changhong and its subsidiary by the Company for year of 2019 was 58 million Yuan at most (tax-excluded), actually
30,124,800 Yuan occurred in reporting period
10. It is estimated that the related party transaction amount resulted by selling goods from Sichuan Changhong Electronics Holding Group Co., Ltd and
its subsidiary by the Company for year of 2019 was 102 million Yuan at most (tax-excluded), actually 64,620,700 Yuan occurred in reporting period.
11. It is estimated that the related party transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and
purchasing equipment etc. from Sichuan Changhong Electronics Holding Group Co., Ltd and its subsidiary by the Company for year of 2019 was 1823
million Yuan at most (tax-excluded), actually 186,063,700 Yuan occurred in reporting period.
12. It is estimated that the related party transaction amount resulted by accepting the financial leasing and factoring and financing etc. from Yuanxin
Financial Lease Co., Ltd. by the Company was 15 million Yuan at most, actually 3,916,700 Yuan occurred in reporting period.
Reasons of major difference between the trading price and market
Not applicable
price
Note: In accordance with relevant regulation of Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and Authorization Management System of the Company, the related party
transaction with the related party in less than 3 million Yuan (3 million Yuan included) will implement after the approval by the President. Therefor, although the related party transaction with
Changhong International Holdings (Hong Kong) Co., Ltd exceeds the estimated annual amount, the amount exceeded is within 3 million Yuan, and has being approved by the President of the
Company.
116
CHANGHONG MEILING CO.,LTD. Annual Report 2019
2. Related party transactions with Changhong Finance Company
The resolution of the 34th session of the 8th board of directors on August 9, 2017 and the second extraordinary
general meeting of 2017 on September 12, 2017 approved and agreed the company to continue carry out the
financial service cooperation with Sichuan Changhong Group Finance Co., Ltd. (hereinafter referred to as
―Changhong Finance Company‖) and sign a triennial Financial Service Agreement, It is agreed that the maximum
deposit balance (including accrued interest and handling fees) and the highest principal and interest of outstanding
loan the Company in any finance company within the three-year validity period from the effective date of the new
agreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement, Changhong
Finance Company shall provide a series of financial services such as deposit and loan in its business scope
according to the requirements of the Company and its subsidiaries. The related transactions between the company
and its subsidiaries and Changhong Finance Company from the beginning of Current Year to the end of the
reporting period are as follows:
Up to 31 December 2019, the Company and its subsidiaries have opened financial business as savings, note
drawing and notes discounted with Changhong Finance Company. The Company and its subordinate company
owns 3,702,382,630.38 Yuan savings in Changhong Finance Company, takes 24.63% of the deposit taking
balance in Changhong Finance Company without 30% occupied, balance of notes drawing at period-end was
999,585,345.49 Yuan and balance of notes discounted outstanding as 638,333,179.10 Yuan. More details are:
In RMB/CNY
Interest and
Balance at Increased in Current Decreased in Current commission
Item Balance at year-end
year-begin Year Year charge received
or paid
I. Savings in
Changhong Group 3,119,117,207.91 37,090,880,528.48 36,507,615,106.01 3,702,382,630.38 105,577,099.81
Finance Company
II. Borrowings
from Changhong
Group Finance
Company
1.Short-term loans
2.Long-term loans
III. Other financial
business
1.notes drawing 819,806,514.07 2,158,744,838.85 1,978,966,007.43 999,585,345.49 887,859.77
2.notes discounted 772,233,395.98 1,593,136,528.75 1,727,036,745.63 638,333,179.10 30,768,183.16
According to the regulation of Information Disclosure Business Memorandum No. 2 - Transactions and Related Transactions of the
Shenzhen Stock Exchange, the company issued the Risk Continuous Assessment Report About Sichuan Changhong Group Finance
Co., Ltd. for the deposit, loan and other financial services that the company carried out with Changhong Finance Company during the
117
CHANGHONG MEILING CO.,LTD. Annual Report 2019
reporting period, and disclosed at www.cninfo.com.cn on 28 March 2020
(ii) Related transactions by assets acquisition and sold
□Applicable √ Not applicable
There are no related transactions by assets acquisition and sold in the period
(iii) Related party transaction of joint foreign investment
√Applicable □ Not applicable
Total assets of Net assets of Net profit of
Associati Registered
the invested the invested the invested
on Invested capital of
Co-investor Main business of the invested enterprise enterprise (10 enterprise (10 enterprise (10
relationsh enterprise the invested
thousand thousand thousand
ip enterprise
Yuan) Yuan) Yuan)
Development and sales of computer software and
hardware and undertake computer network
engineering, import & export of goods and
technologies (except the items prohibited by laws
and regulations, restricted items operating with
license), design and production of advertising,
design, manufacturing and sales of the model,
selling general merchandise, clothing, leather ware,
shoes & hats, detergents, cosmetics, photographic
50 million
apparatus, toys, audio equipment & apparatus,
Yuan (before
Sichuan household appliances, electronics, communication
Sichuan Controlli capital
Zhiyijia equipment, communication device, instruments &
Changhong ng increased);
Network apparatus, lamps, electro-mechanical &
Electric Co., sharehold 70 million 336,679.26 9,401.92 375.54
Technolog components, mechanical equipment & accessories,
Ltd. er Yuan (after
y Co., Ltd. prepackaged food, office supplies, sporting goods,
capital
hotel facilities, tourism cultural goods, gold-silver
increased)
jewelry and value-added telecom service (entrusted
operation), chemical raw materials & products
(hazardous chemicals excluded), solar energy
equipment and class-I medical devices through the
internet. Domestic road freight transportation,
freight transport agency, manual freight service,
warehouse service (hazardous chemicals
excluded); installation service of household
appliances.
Progress of major projects under
construction of the invested N/A
enterprise (if applicable)
After deliberated and approved by the 26th session of 9th BOD and 3rd extraordinary shareholders general meeting of 2019 held on 30
118
CHANGHONG MEILING CO.,LTD. Annual Report 2019
August 2019 and 26 September, the Company agreed to increase capital for Sichuan Zhiyijia Network Technology Co., Ltd.
(hereinafter, the ―Zhiyijia Company‖) with own fund amounted as 29.08704 million Yuan (of which: 20 million Yuan reckoned in
registered capital and 9.08704 million Yuan reckoned in capital reserves), another shareholder Sichuan Changhong increase zero in
this time. After capital increased, registered capital of Zhiyijia Company up to 70 million Yuan from 50 million Yuan, the Company
and Sichuan Changhong holds 50% equity of the Zhiyijia Company respectively. The investment capital for Zhiyijia amounted as
44.08704 million Yuan in total after increasing the capital, of which, 35 million Yuan reckoned in registered capital and 9.08704
million Yuan reckoned in capital reserves. The capital increase for Zhiyijia Company completed in the reporting period. Found more
on announcement (Notice No.: 2019-057, 2019-058, 2019-063 and 2019-067) released on appointed media China Securities Journal,
Securities Times, Hong Kong Commercial Daily and Juchao Website dated 31 August 2019, 10 September and 27 September
respectively.
(iv) Connect of related liability and debt
√Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□Yes √ No
No non-operational contact of related liability or debts in Period
(v) Other related party transactions
√Applicable □ Not applicable
1. On August 30 and September 26, 2019, the resolutions of the 26th meeting of the company‘s ninth board of
directors and the 3rd extraordinary shareholders‘ meeting in 2019 passed and agreed to increase the estimated
related transactions amount occurred among the company and its holding subsidiaries with Zhiyijia Company in
2019 totaling RMB 803 million, such as sales of goods, accepting services, etc.
2. On September 9 and September 26, 2019, the resolutions of the 27th meeting of the ninth board of directors of
the company and the 3rd extraordinary shareholders‘ meeting in 2019 passed and agreed the company to use its
own funds, together with Changhong Huayi Compressor Co., Ltd., and respectively increase capital of 500 million
yuan to Changhong Finance Company, with a total capital increase of RMB 1 billion. The capital increase was
determined based on the 100% equity evaluation value of 2,342,273,700 yuan of Changhong Finance Company as
of March 31, 2019, of which 402,998,300 yuan of the Company‘s capital increase of 500 million yuan in
Changhong Finance Company was included in its registration capital, and 97,001,700 yuan was included in its
capital reserve, while Changhong Finance Company‘s former shareholders, Changhong Group and Sichuan
Changhong, gave up their rights to subscribe for capital contributions this time and did not increase capital. The
related transaction was conducted in accordance with the principles of openness, impartiality, fairness and
reasonableness, and there was no situation that damaged the interests of the company and shareholders, especially
the small and medium shareholders.
3. On October 17, 2019, the resolution of the 28th meeting of the ninth board of directors of the company passed
and agreed the company to increase the estimated daily related transactions amount occurred among the company
and its holding subsidiaries with Sichuan Changhong Electric Co., Ltd. and its subsidiaries, and with Sichuan
Changhong Electronics Holding Group Co., Ltd. and its holding subsidiaries in 2019 totaling no more than 118
million yuan (excluding tax), such as purchase or sales of equipment, sales of goods, etc.
119
CHANGHONG MEILING CO.,LTD. Annual Report 2019
4. On October 28, 2019, the resolution of the 29th meeting of the ninth board of directors of the company passed
and agreed the company‘s subsidiary Sichuan Changhong Air-conditioner Co., Ltd. to purchase the land use rights
of four parcels of land (Four parcels of land with an area of 249,830.10 square meters, a total of 374.74 acres, the
warrants are MCGY 2012 No. 00251, MCGY 2012 No. 00254, Chuan 2018 MY Real Estate Property No.
0002704, Chuan 2019 MY Real Estate Property No. 0027783). The pricing of this related transaction was subject
to the appraised value of the underlying land as of August 10, 2019, and the transaction price was determined to
be 112,635,100 yuan. The pricing of related transaction was fair and in line with the principles of openness,
fairness and impartiality.
5. On November 29 and December 17, 2019, the resolutions of the 31st meeting of the ninth board of directors of
the company, the 16th meeting of the ninth board of supervisors, and the 4th extraordinary shareholders‘ meeting of
2019 passed and approved the company to change the use and investment of part of the funds raised in the
―Intelligent R & D Project‖ and use them to purchase R & D assets such as intelligent infrastructure platform
construction and software R & D platforms from Sichuan Changhong and its subsidiaries. The pricing of the
related transaction was subject to the appraised value of the underlying asset as of September 30, 2019, and the
transaction price was determined to be 46,617,300 yuan.
6. On November 29 and December 17, 2019, the resolutions of the 31st meeting of the ninth board of directors of
the company, the 16th meeting of the ninth board of supervisors, and the 4th extraordinary shareholders‘ meeting of
2019 passed and approved the estimated daily related transactions amount occurred among the company and its
holding subsidiaries with the related parties in 2020 totaling no more than 16,536,500,000 yuan (excluding tax),
and agreed that the company and Sichuan Changhong Group Finance Co., Ltd. should continue to carry out the
financial service related transactions such as loans and deposits in 2020.
Related searches for disclosure website of interim report with major related transaction concerned
Interim report Disclosure date Website for disclosure
Resolution of the 26th session of 9th BOD (2019-057) 31 Aug. 2019, Juchao Website:
rd
Resolution of 3 extraordinary shareholders general meeting of 2019(2019-067) 27 Sept.2019 http://www.cninfo.com.cn
Resolution of the 27th session of 9th BOD (2019-060)
Capital Increased for Sichuan Changhong Group Finance Co., Ltd and Related Party 10 Sept. 2019, Juchao Website:
Transaction (2019-061) 27 Sept. 2019 http://www.cninfo.com.cn
rd
Resolution of 3 extraordinary shareholders general meeting of 2019(2019-067)
Resolution of the 28th session of 9th BOD (2019-069)
Juchao Website:
Increase the forecast announcement of daily related party transactions for year of 18 Oct. 2019
http://www.cninfo.com.cn
2019 (2019-072)
Resolution of the 29th session of 9th BOD (2019-073)
Juchao Website:
Purchasing Land Use Right by Subsidiary Sichuan Changhong Air-conditioner Co., 29 Oct. 2019
http://www.cninfo.com.cn
Ltd. and Related Party Transaction(2019-074)
120
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Resolution of the 31st session of 9th BOD (2019-077)
Resolution of the 16th session of 9th Supervisory Committee(2019-078)
30 Nov. 2019, Juchao Website:
Change Part of the Usage Direction for Raised Fund and Related Party
18 Dec. 2019 http://www.cninfo.com.cn
Transaction(2019-079)
Resolution of 4th extraordinary shareholders general meeting of 2019(2019-087)
Resolution of the 31st session of 9th BOD(2019-077)
Resolution of the 16th session of 9th Supervisory Committee(2019-078)
Forecast Announcement of Daily Related Party
30 Nov. 2019, Juchao Website:
Transactions for year of 2020 (2019-080)
18 Dec. 2019 http://www.cninfo.com.cn
Forecast of the Related Party Transaction Continuously With Sichuan Changhong
Group Finance Co., Ltd. for year of 2020 (2019-081)
Resolution of 4th extraordinary shareholders general meeting of 2019(2019-087)
XVII. Significant contract and implementations
(i) Entrust, contract and leasing
1. Entrust
□Applicable √ Not applicable
No entrust in Period.
2. Contract
□Applicable √ Not applicable
No contract in Period.
3. Leasing
□Applicable √ Not applicable
No leasing in the period
(ii) Major guarantee
√Applicable □ Not applicable
1. Guarantee
The guarantees provided by the company to the wholly-owned and holding subsidiaries are guarantees for
supporting bank credits generated by its production and operation. The guaranty style is the guarantee. The
company and its subsidiaries did not provide guarantees to subjects outside the scope of consolidated statements.
The company and its holding subsidiaries had no overdue external guarantees, no external guarantees involving
litigation, and no losses due to the award of the guarantee. Up to 31 December 2019, the external guarantees of
the Company and subsidiaries are as follows:
121
CHANGHONG MEILING CO.,LTD. Annual Report 2019
In 10 thousand Yuan
Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries)
Complete
Related Actual Guarantee
Name of the Company Guarant impleme
Announcement Guarantee limit Actual date of happening guarantee Guarantee type for related
guaranteed ee term ntation or
disclosure date limit party
not
- - - - - - - - -
Total actual occurred external guarantee in report
Total approving external guarantee in report period (A1) 0 0
period (A2)
Total approved external guarantee at the end of report period Total actual balance of external guarantee at the
0 0
( A3) end of report period (A4)
Guarantee between the Company and the subsidiaries
Complet
Name of the Related Actual date of Actual e Guarantee
Guarantee Guarantee
Company Announcement happening (Date of guarantee Guarantee type impleme for related
limit term
guaranteed disclosure date signing agreement) limit ntation party
or not
30 Mar. 2018 10,000 Joint liability guaranty One year Y N
11 Apr. 2018 6,000 Joint liability guaranty One year Y N
Notice No.: 2018-005, 12 Apr. 2018 5,000 Joint liability guaranty One year Y N
2018-009 and
18 Apr. 2018 5,500 Joint liability guaranty One year Y N
2018-029 released on 70,000
21 Aug. 2018 5,000 Joint liability guaranty One year Y N
30 March, 11 May
2018 respectively 11 Sept. 2018 10,000 Joint liability guaranty One year N N
11 Oct. 2018 5,000 Joint liability guaranty One year N N
Zhongshan
25 Oct. 2018 10,000 Joint liability guaranty One year Y N
Changhong
22 Jan. 2019 10,000 Joint liability guaranty One year N N
Electric Co., Ltd.
4 Apr. 2019 5,500 Joint liability guaranty One year N N
Notice No.: 2019-004, 30 Apr. 2019 10,000 Joint liability guaranty One year N N
2019-006 and
31 May 2019 5,000 Joint liability guaranty One year N N
2019-012 released on 130,000
3 Jul. 2019 5,000 Joint liability guaranty 4-month N N
30 Jan., 23 Feb. 2019
respectively 23 Jul. 2019 15,000 Joint liability guaranty One year N N
21 Aug. 2019 2,000 Joint liability guaranty One year N N
19 Sept. 2019 10,000 Joint liability guaranty One year N N
Notice No.: 2018-005, 31 Aug. 2018 4,000 Joint liability guaranty 7-month Y N
2018-009 and
Guangdong
Changhong 2018-029 released on 25,500
22 Sept. 2018 4,500 Joint liability guaranty One year Y N
Ridian 30 March, 11 May
Technology Co., 2018 respectively
Ltd. Notice No.: 2019-004, 22 Jan. 2019 2,500 Joint liability guaranty One year N N
26,000
2019-006 and 30 Apr. 2019 4,000 Joint liability guaranty One year N N
122
CHANGHONG MEILING CO.,LTD. Annual Report 2019
2019-012 released on
30 Jan., 23 Feb. 2019 4 Sept. 2019 6,500 Joint liability guaranty One year N N
respectively
Notice No.: 2018-005,
2018-009, 2018-056 29 Jun. 2018 1,000 Joint liability guaranty One year Y N
and 2018-059 released
on 30 March, 11 May 9,000
and 18 Oct. 2018
Zhongke 20 Jul. 2018 2,000 Joint liability guaranty 10-month Y N
respectively
Meiling
Cryogenic
Technology Co., 17 Jul. 2019 3,000 Joint liability guaranty One year N N
Notice No.: 2019-004,
Ltd.
23 Aug. 2019 2,000 Joint liability guaranty One year N N
2019-006 and
2019-012 released on 14,000 24 Sept. 2019 920 Joint liability guaranty One year N N
30 Jan., 23 Feb. 2019
22 Oct. 2019 3,000 Joint liability guaranty One year N N
respectively
30 Dec. 2019 2,000 Joint liability guaranty 11-month N N
Notice No.: 2019-004,
Sichuan
2019-006 and
Changhong
2019-012 released on 100,000 30 Jul. 2019 20,000 Joint liability guaranty 8-month N N
Air-conditioner
30 Jan., 23 Feb. 2019
Co., Ltd.
respectively
Notice No.:2018-061 10 Jan. 2019 2,062.41 Joint liability guaranty One year N N
and No.: 2018-063
6,264 Joint liability guaranty
released on 9 Nov.
10 Jan. 2019 1,888.08 10.5-month Y N
Changhong 2018
RUBA Trade Notice No.: 2019-083,
Company 2019-084 and
2019-087 released on 6,345 23 Dec. 2019 2,103.51 Joint liability guaranty One year N N
7 Dec., 18 Dec. 2019
respectively
Notice No.: 2019-004,
Jiangxi Meiling 10 Jan. 2019 5,000 Joint liability guaranty One year N N
2019-006 and
Electric
2019-012 released on 25,000
Appliance Co.,
30 Jan., 23 Feb. 2019 21 Mar. 2019 10,000 Joint liability guaranty One year N N
Ltd.
respectively
Notice No.: 2019-004,
Hefei Meiling
2019-006 and
Nonferrous
2019-012 released on 3,000 19 Jun. 2019 500 Joint liability guaranty 6-month Y N
Metal Products
30 Jan., 23 Feb. 2019
Co., Ltd
respectively
123
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Total amount of approving guarantee for Total amount of actual occurred guarantee
304,345 195,974.00
subsidiaries in report period (B1) for subsidiaries in report period (B2)
Total amount of approved guarantee for Total balance of actual guarantee for
subsidiaries at the end of reporting 304,345 subsidiaries at the end of reporting period 135,585.92
period (B3) (B4)
Guarantee of the subsidiaries for the subsidiaries
Comple
Name of the Actual te Guarantee
Related Announcement Guarant
Company Guarantee limit Actual date of happening guarantee Guarantee type implem for related
disclosure date ee term
guaranteed limit entatio party
n or not
- - - - - - - - -
Total amount of approving guarantee for subsidiaries in report Total amount of actual occurred guarantee for
0 0
period (C1) subsidiaries in report period (C2)
Total amount of approved guarantee for subsidiaries at the end Total balance of actual guarantee for subsidiaries
0 0
of reporting period (C3) at the end of reporting period (C4)
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of actual
Total amount of approving guarantee in report period
304,345 occurred guarantee in report 195,974.00
(A1+B1+C1)
period (A2+B2+C2)
Total balance of actual
Total amount of approved guarantee at the end of report period
304,345 guarantee at the end of report 135,585.92
(A3+B3+C3)
period (A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the Company 27.09%
Including:
Amount of guarantee for shareholders, actual controller and its related parties (D) 0
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio
89,665.92
exceed 70% directly or indirectly (E)
Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) 0
Total amount of the aforesaid three guarantees (D+E+F) 89,665.92
Explanations on possibly bearing joint and several liquidating responsibilities for undue
N/A
guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if applicable) N/A
The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company, and these wholly-owned
and holding subsidiaries are in normal production and operation, there are no overdue loans, and the guarantee risks are controllable.
During the reporting period, the highest level of security the Company provided amounted to 3043.45 million Yuan by the approval,
the actual amount of guarantee is 1959.74 million Yuan. At the end of the reporting period, the practical guarantee balance amounted
to 1,355,859,200 Yuan, accounting for the Company‘s latest net assets ratio of 27.09%.
Explanation on guarantee with composite way: N/A
2. Guarantee outside against the regulation
124
CHANGHONG MEILING CO.,LTD. Annual Report 2019
□Applicable √ Not applicable
No guarantee outside against the regulation in Period.
(iii) Entrust others to cash asset management
1. Trust financing
√Applicable □ Not applicable
Trust financing in the period
In 10 thousand Yuan
Type Capital resources Amount for entrust Undue balance Overdue amount
Bank financing product Idle raised funds 90,400 0 0
s Own fund 30,000 0 0
Broker financing
Own fund 20,000 0 0
products
Total 140,400 0 0
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and
non-guaranteed:
√Applicable □ Not applicable
125
CHANGHONG MEILING CO.,LTD. Annual Report 2019
In 10 thousand Yuan
Amount
of reserve
Whether
Anticipate for Whether
Trustee Referenc Actual Actual approve Summary of the
Source Criteria for d income devaluati has entrust
institution Truste Start Expiry e annual gains/los collected d by items and related
Product type Amount of Capital investment purpose fixing (if on of finance
(or name of e type date date rate of ses in gains/losse legal query index (if
funds reward applicable withdrawi plan in the
trustee) return period s in period procedur applicable)
) ng (if future
e (Y/N)
applicable
)
Juchao
It has been
8.50%( Website(www.cni
recovered
The asset is planned to invest in the manage nfo.com.cn)
in advance,
Jinshiqi Phase II debt financing plan ment (Notice No.:
Soochow Asset Recovered and
Own 12 Apr. of 2018 issued by Jinshiqi rate and Not 2018-014,
Securities Broker management 20,000 in determined - 2,269.50 2,269.50 N/A Y
fund 2018 International Holdings Co., Ltd. at custody applicable 2018-015,
Co., Ltd. plan advance by the
the Beijing Financial Assets rate 2019-025,
actual
Exchange. excluded 2019-060,
holding
) 2019-076 and
period
2019-094)
Juchao
Chengdu Principal-gu The structured deposit product, the
Idle Annualized Website(www.cni
Branch of aranteed 21 Dec. 10 Jun. structural derivatives tied with the Not
Bank 48,000 raised returns: 4.20% 944.48 944.48 944.48 N/A Y nfo.com.cn)
Bohai Bank with floating 2018 2019 3-month interbank lending rate in applicable
funds 4.20% (Notice No.:
Co., Ltd income London (Libor)
2018-078)
Hefei Branch Principal-gu Idle 26 Dec. 30 Jan. Investment of the central bank bill in Annualized Not Juchao
Bank 23,000 3.95% 87.12 85.80 85.80 N/A Y
of Shanghai aranteed & raised 2018 2019 bank market, treasury bond, returns: applicable Website(www.cni
126
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Pudong income-guar funds corporate bonds, short-term 3.95% nfo.com.cn)
Developmen anteed financing, medium-term bills, (Notice No.:
t Bank inter-bank borrowing, inter-bank 2018-080)
deposits, bills or bill repurchase
etc.
The principal of funds raised by this
structured deposit is included in the
unified operations management of
the funds of China Guangfa Bank.
The proportion of investment in
money market instruments
(including but not limited to bank
deposits, inter-bank lending,
Hefei Branch Principal-gu buy-back, etc.) ranges from 20% to Juchao
Idle Annualized
of China aranteed 27 Dec. 28 Jan. 100%, and the proportion of bonds Not Website(www.cni
Bank 10,000 raised returns: 3.90% 34.19 34.19 34.19 N/A Y
Guangfa with floating 2018 2019 (including but not limited to national applicable nfo.com.cn)(Noti
funds 3.90%
Bank income debt, central bank bills, financial ce No.: 2018-080)
bonds, short-term financing bonds,
enterprise bonds, medium-term
notes, corporate bonds) and other
financial assets ranges from 0% to
80%, and the income is invested in
the financial derivatives linking to
the exchange rate of the US dollar
against the Hong Kong dollar.
Mianyang Principal-gu The product is mainly composed of Juchao
Idle Annualized
Branch of aranteed & 28 Dec. 28 Jan. risk-free assets investment and Not Website(www.cni
Bank 10,000 raised returns: 3.75% 31.85 31.25 31.25 N/A Y
China income-guar 2018 2019 option trading. The product principal applicable nfo.com.cn)(Noti
funds 3.75%
Everbright anteed is invested in bank fixed time ce No.: 2018-081)
127
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Bank deposits, and the corresponding
application of funds is based on the
bank deposits, and the income is
linked to the bank‘s comprehensive
liability cost.
Take the funds collected by the
structured deposit sales as the
Anhui
Principal-gu nominal principal, and trade the Juchao
Branch of Idle Annualized
aranteed 31 Jan. 2 May capital cost of the nominal principal Not Website(www.cni
Bank of Bank 22,400 raised returns: 4.25% 237.35 242.57 242.57 N/A Y
with floating 2019 2019 as investment income and financial applicable nfo.com.cn)(Noti
Communicat funds 4.25%
income derivatives transactions related to ce No.: 2019-009)
ions
comparison value of 3MShibor with
the counter party.
Investment of the central bank bill in
Hefei Branch bank market, treasury bond,
Principal-gu Juchao
of Shanghai Idle corporate bonds, short-term Annualized
aranteed & 30 Jan. 2 May Not Website(www.cni
Pudong Bank 10,000 raised financing, medium-term bills, returns: 4.20% 105.86 110.83 110.83 N/A Y
income-guar 2019 2019 applicable nfo.com.cn)(Noti
Developmen funds inter-bank borrowing, inter-bank 4.20%
anteed ce No.: 2019-009)
t Bank deposits, bills or bill repurchase
etc.
The principal of funds raised by this
structured deposit is included in the
unified operations management of
Hefei Branch Principal-gu Juchao
Idle the funds of China Guangfa Bank. Annualized
of China aranteed 30 Jan. 2 May Not Website(www.cni
Bank 10,000 raised The proportion of investment in returns: 4.25% 107.12 107.12 107.12 N/A Y
Guangfa with floating 2019 2019 applicable nfo.com.cn)(Noti
funds money market instruments 4.25%
Bank income ce No.: 2019-009)
(including but not limited to bank
deposits, inter-bank lending,
buy-back, etc.) ranges from 20% to
128
CHANGHONG MEILING CO.,LTD. Annual Report 2019
100%, and the proportion of bonds
(including but not limited to national
debt, central bank bills, financial
bonds, short-term financing bonds,
enterprise bonds, medium-term
notes, corporate bonds) and other
financial assets ranges from 0% to
80%, and the income is invested in
the financial derivatives linking to
the exchange rate of the US dollar
against the Hong Kong dollar.
Anhui
Principal-gu The structured deposits of Bank of Juchao
Branch of Idle Annualized
aranteed 17 May 16 Jul. Communication - win to fortune, and Not Website(www.cni
Bank of Bank 17,000 raised returns: 4.10% 114.58 114.58 114.58 N/A Y
with floating 2019 2019 linked to the 3-month Shanghai applicable nfo.com.cn)(Noti
Communicat funds 4.10%
income interbank offered rate (3MShibor) ce No.: 2019-033)
ions
This product is a corporate finance
structured deposit from Industrial
Chengdu
Principal-gu Bank, the annual interest rate its Juchao
Branch of Idle Annualized
aranteed 17 May 19 Aug. fixed income is 2.01%, and the Not Website(www.cni
Industrial Bank 20,000 raised returns: 3.80% 195.73 195.73 195.73 N/A Y
with floating 2019 2019 floating income is linked to the applicable nfo.com.cn)(Noti
Bank Co., funds 3.80%
income fluctuations of the Shanghai Gold ce No.: 2019-34)
Ltd.
AM base price of the underlying
Shanghai Gold Exchange.
Chengdu Principal-gu The structured deposit product, the Juchao
Idle Annualized
Branch of aranteed 20 Jun. 22 Jul. structural derivatives tied with the Not Website(www.cni
Bank 20,000 raised returns: 3.55% 62.25 62.25 62.25 N/A Y
Bohai Bank with floating 2019 2019 3-month interbank lending rate in applicable nfo.com.cn)(Noti
funds 3.55%
Co., Ltd income London (Libor) ce No.: 2019-038)
Chengdu Bank Principal-gu 26,000 Idle 20 Jun. 18 Dec. The structured deposit product, the Annualized 3.85% 496.38 496.39 496.39 N/A Y Not Juchao
129
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Branch of aranteed raised 2019 2019 structural derivatives tied with the returns: applicable Website(www.cni
Bohai Bank with floating funds 3-month interbank lending rate in 3.85% nfo.com.cn)(Noti
Co., Ltd income London (Libor) ce No.: 2019-038)
Huaining
Road Branch
of Hefei Principal-gu Juchao
Idle The structured deposit product, Annualized
Science & aranteed 17 Jul. 17 Sept. Not Website(www.cni
Bank 5,000 raised contract code of the investment in returns: 3.80% 32.27 32.27 32.27 N/A Y
Technology with floating 2019 2019 applicable nfo.com.cn)(Noti
funds gold futures: au1912 3.80%
Rural income ce No.: 2019-046)
Commercial
Bank
The structured deposit product,
investment of the central bank bill in
Hefei Branch bank market, treasury bond,
Principal-gu Juchao
of Shanghai Idle corporate bonds, short-term Annualized
aranteed 18 Jul. 24 Sept. Not Website(www.cni
Pudong Bank 5,000 raised financing, medium-term bills, returns: 3.80% 35.39 34.83 34.83 N/A Y
with floating 2019 2019 applicable nfo.com.cn)(Noti
Developmen funds inter-bank borrowing, inter-bank 3.80%
income ce No.: 2019-046)
t Bank deposits, bills or bill repurchase
etc., and option products with
interest rate linked
Principal-gu The structured deposit product, all or Juchao
Hefei Branch Idle Annualized
aranteed 19 Jul. 19 Sept. part of the interest generated by the Not Website(www.cni
of Huaxia Bank 7,000 raised returns: 3.90% 46.37 46.37 46.37 N/A Y
with floating 2019 2019 deposit is linked to the gold futures applicable nfo.com.cn)(Noti
Bank funds 3.90%
income price ce No.: 2019-046)
Chengdu The structured deposit product. A
Principal-gu Juchao
Branch of Idle structured deposit refers to the Annualized
aranteed 23 Aug. 25 Nov. Not Website(www.cni
Industrial Bank 8,700 raised business product that enables the returns: 3.80% 85.14 85.14 85.14 N/A Y
with floating 2019 2019 applicable nfo.com.cn)(Noti
Bank Co., funds depositor to obtain higher returns on 3.80%
income ce No.: 2019-054)
Ltd. the basis of taking certain risks by
130
CHANGHONG MEILING CO.,LTD. Annual Report 2019
being linked to the fluctuation of
interest rate, exchange rate and index
etc., or the credit status of an entity.
Chengdu
Principal-gu Juchao
Wuyang The structured deposit product, Annualized
aranteed Own 26 Aug. 25 Nov. Not Website(www.cni
Ave. Branch Bank 30,000 which is invested through structural returns: 3.90% 291.69 291.69 291.69 N/A Y
with floating fund 2019 2019 applicable nfo.com.cn)(Noti
of China interest rate swap etc. 3.90%
income ce No.: 2019-056)
CITIC Bank
Chengdu Principal-gu The structured deposit product, the Juchao
Idle Annualized
Branch of aranteed 23 Sept. 23 Dec. structural derivatives tied with the Not Website(www.cni
Bank 12,000 raised returns: 3.95% 118.75 118.18 118.18 N/A Y
Bohai Bank with floating 2019 2019 3-month interbank lending rate in applicable nfo.com.cn)(Noti
funds 3.95%
Co., Ltd income London (Libor) ce No.: 2019-065)
Chengdu Principal-gu The structured deposit product, the Juchao
Idle Annualized
Branch of aranteed 26 Sept. 23 Dec. structural derivatives tied with the Not Website(www.cni
Bank 5,000 raised returns: 3.95% 47.61 47.61 47.61 N/A Y
Bohai Bank with floating 2019 2019 3-month interbank lending rate in applicable nfo.com.cn)(Noti
funds 3.95%
Co., Ltd income London (Libor) ce No.: 2019-066)
Total 309,100 -- -- -- -- -- -- 3,074.13 5,350.78 -- -- -- -- --
131
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□Applicable √ Not applicable
2. Entrust loans
□Applicable √ Not applicable
No entrust loans in the period.
(iv) Other material contracts
□Applicable √ Not applicable
No other material contracts in the period
XVIII. Social responsibility
(i) Performance of social responsibility: Not applicable
(ii) Fulfill the precise social responsibility for poverty alleviation
The Company has no precise social responsibility for poverty alleviation in the period and has no follow-up plan
either.
(iii) Environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental
protection department: √ Yes □ No
numbe
Distributio Total Discharg
Name of Major pollutants r of Total
Way of n of concentration of Pollutants discharge standards discharge e beyond
company or and name of discha discharge
discharge discharge discharge enacted volume the
subsidiary typical pollutants rge volume
outlets certified standards
outlets
Exhaust Concentration of The Emission Limits for Air
High
constitutes the One for Pollutants (DB44/27—2001)
altitude particulates discharge＜
major pollutants, 1#Worksh applies to exhaust emission.
Zhongshan emissions Satisfy the Not
and the typical op and 20mg/m Concentration of particulates 208,800,000
Changhong after standards for beyond
pollutants 4 2#Worksh Concentration of discharge:120mg/ m standard
Electric Co., meeting total volume the
comprise of op each; NMHC Concentration of NMHC cubic meters
Ltd. the control standards
particulates, 3# emission:4.87mg/ m emission:120mg/ m
treatment
NMHC and odor workshop Concentration of stink: Concentration of stink: 2000
standards
concentration. has 2 724 non-dimensional. non-dimensional.
Note: Sichuan Changhong Air Conditioner Co., Ltd. (hereinafter referred to as ―Changhong Air-conditioner‖), a wholly-owned
subsidiary of the company, is operates located in Mianyang City, Sichuan Province. In 2018, Changhong Air-conditioner was
included in the list of key pollutant discharge units in the atmosphere for 2018. However, through active implementation of corporate
social responsibility and social obligations in daily environmental protection and its pollutant control work, Changhong Air
132
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Conditioning was no longer listed as a key pollutant discharge unit by Mianyang City Environmental Protection Department in 2019.
1.Construction and operation of pollution prevention facilities
The Company and its subsidiaries actively respond to the national ecological civilization construction plan, and
actively participate in national environmental protection works in line with the purpose of actively fulfilling its
corporate social responsibility. In recent years, The Company and its subsidiaries have actively explored the
introduction of advanced management concepts and methods, and invested a large amount of money in the
purchase of pollution control equipment and facilities. And realized emission reduction by scientific technical
methods by the investment in installation of activated carbon adsorption treatment equipment, welding dust
purifier facilities etc. At the same time, in order to ensure the effective operation of the management equipment
and facilities, the Company and its subsidiaries have adopted such management measures as setting up special
personnel to manage and maintain the operation of the equipment and facilities, formulating proper rules for
operation and maintenance of the equipment and facilities, emergency disposal regulations, supervision and
assessment mechanism, allocating special maintenance funds and so on, so as to ensure the effective operation of
the governing facilities in a full round, delivering its best to protect and improve the ecological environment
around the enterprise.
2. Environment impact assessment and other required environment protection administrative license for
construction projects
The Company and its subsidiaries earnestly implement the Environmental Protection Law, the Environmental
Impact Assessment Law and the Regulations on Environmental Protection Management of Construction Projects,
consciously abide by environmental protection laws and regulations, industry requirements and government
regulations. For new, renovated and expanded projects, the Company and its subsidiaries adhere to the project
environmental impact assessment and "three simultaneous" system, fully implement environmental protection
measures, act well in environment protection management in respect of project planning, design, construction and
operation, make full use of advanced crafts and technological means to reduce environmental pollution.
Environmental impact assessment is carried out synchronously while making the feasibility study for a
construction project. Third-party professional parties are engaged to analyze the industrial policy, land use
planning, environmental impact and the feasibility of environmental protection measures of the project.
Construction will be started only after approved by the competent environmental protection authorities. During
the construction, environmental protection requirements are earnestly implemented, environmental protection
facilities are built synchronously, environmental protection acceptance of the project is arranged in time upon
completion of the project to ensure that the project meets the acceptance criteria and could be put into official
operation with all the environmental impact assessment requirements met. During the operation period, the
Company conducts pollution prevention to ensure the normal operation of environmental protection facilities in
strict compliance with the relevant environmental impact assessment documents and the reply requirements of the
competent environmental protection authorities.
3. Emergency plan for environmental emergencies
The Company and its subsidiaries have set up related emergency plans for environmental emergencies. The
133
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Company and its subsidiaries have determined classified warning based on the different extent and severity of
environmental impacts that may be caused by the material environmental factors, defined the responsibilities for
emergency response, regulated emergency handling procedures, established special team to handle emergencies
and organized regular rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness of
these plans, improve their capability of emergency handling and take precautions against contingent emergencies.
4. Independent plan to monitor environment
The Company and its subsidiaries have established regular monitoring plan for environmental pollutants, set up
special funds for pollutants monitoring, and engaged third-party authoritative to regularly monitor the operation of
major pollution-production links and environmental protection treatment facilities in connection with the major
pollutants produced by the Company and its subsidiaries, to make sure that the Company and its subsidiaries
could achieve emission standards in a full round.
5. Other environment information that should be disclosed
According to the Environmental Information Disclosure Measures of Enterprises and Institutions, the Company
and its subsidiaries have realized the disclosure of information relating to environmental impact assessment,
project acceptance, pollutants production and discharge, solid waste management, important environmental
factors, environmental objectives and performance of construction projects.
6. Other environment related information
In order to further realize the scientific and systematic environmental protection work of the Company and its
subsidiaries, the Company and its subsidiaries have established an environmental management system in
accordance with ISO14001 standards, set up an environmental protection organization, acquired environmental
protection resources, regularly identified, updated and appraised environmental factors, compliance obligations,
environmental risks and opportunities, and regularly determined environmental objectives and management
programs. Through the implementation of management programs and continuous normal improvement, the
environmental performance of the Company and its subsidiaries has been continuously improved. Through regular
internal audit and management review, as well as the verification and examination of the third parties, the
environmental management system of the Company and its subsidiaries has been effectively controlled and fully
meets the system management standards and relevant regulations.
XIX. Explanation on other significant events
√Applicable □ Not applicable
(1) In January 2019, Mr. Wu Dinggang, the former president of the company, applied for resignation as the
president of the company due to changes in his personal work, but he continues to serve as the vice-president of
the company, a member of the strategy committee of the board of directors, and a member of the remuneration and
appraisal committee. At the same time, after the resolution of the 18th meeting of the ninth board of directors of
the company, it‘s agreed to authorize Mr. Kou Huameng, the director and vice president of the company, to act on
the president‘s behalf, the term is from the effective date of the board resolution, i.e. January 11, 2019, to the date
on which the board of directors engages a new president. Found more on appointed media ―Securities Times‖,
―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed
134
CHANGHONG MEILING CO.,LTD. Annual Report 2019
in the form of announcement (Announcement No. 2019-001 and No.2019-002) on 12 Jan. 2019.
(2) In 2019, former chairman of the Company Mr. Li Wei, applied for resign the followed positions for work
causes under the name of the Company, including chairman of 9th BOD, Director, chief members of the strategy
committee member of the nomination committee. At the same time, the resolutions of the 22th meeting of the ninth
board of directors of the company passed and agreed to engage Mr. Wu Dinggang as the company‘s chairman of
the ninth board of directors for a term of office consistent with the term of the current board of directors. Found
more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-029 and
No.2019-030) on 27 April 2019.
(3) On January 14, 2019, the company received a Notification Letter of Caitong Fund Management Co., Ltd.
About the Progress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from Caitong Fund
Management Co., Ltd. (hereinafter referred to as ―Caitong Fund‖) that held more than 5% of the company‘s shares,
Caitong Fund reduced its holdings of the company‘s shares of 12,160,298 shares in total by centralized bidding
transactions or block trading from October 18, 2018 to January 13, 2019, accounting for 1.1641% of the
company's total share capital.
On February 13, 2019, the company received the ―Short Form Report on Changes in Equity of Changhong
Meiling Co., Ltd.‖ from Caitong Fund, Caitong Fund reduced its holdings of the shares of Changhong Meiling of
2,600,729 shares in total by centralized bidding transactions from January 14, 2019 to February 12, 2019,
accounting for 0.25% of the company's total share capital. After this equity change, Caitong Fund holds
52,229,844 shares of Changhong Meiling, accounting for 4.999995% of Changhong Meiling's total share capital,
which is no longer a shareholder holding more than 5% of the company's shares.
On April 15, 2019, the company received a Notification Letter of Caitong Fund Management Co., Ltd. About the
Progress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from Caitong Fund. Caitong Fund
reduced holding of 7,430,612 shares in The Company via collective bidding trading during the period from 13 Feb.
2019 to 13 April 2019, accounting for 0.7113% of the total share capital of the Company. After the reduction,
Caitong Fund still holds 44,799,232 shares of the company, accounting for 4.2887% of the company's total equity.
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-003,
No.2019-011 and No.2019-024) on 15 Jan. 2019, 14 Feb. 2019 and 16 April 2019.
(4)The resolutions of the 19th meeting of the Ninth Board of Directors, the 10th meeting of the Ninth Board of
Supervisors, and the 1st Extraordinary General Meeting of 2019 passed and agreed the company to provide credit
guarantees of 2980 million yuan in total for its wholly-owned and controlled subsidiaries in 2019, the guarantee
period is one year for the newly increased guarantee amount for the current year and the amount of renewal
insurance during Current Year.
The resolutions passed at the 32nd meeting of the company‘s ninth board of directors and the 4th extraordinary
shareholders‘ meeting in 2019 agreed that the company would continue to provide domestic guarantees for RUBA
135
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Trading Company‘s application for loans from local banks, the total guarantee amount did not exceed $ 9 million
with guarantee period of one year, which was used for operating capital turnover of RUBA Trading Company.
The resolutions of the 33rd meeting of the Ninth Board of Directors, the 17th meeting of the Ninth Board of
Supervisors, and the 1st Extraordinary General Meeting of 2020 passed and agreed the company to provide credit
guarantees of 3670 million yuan in total for its wholly-owned and controlled subsidiaries in 2020, the guarantee
period is one year for the newly increased guarantee amount for the current year and the amount of renewal
insurance during Current Year.
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-004,
No.2019-005, No.2019-006, No.2019-008, No.2019-010, No.2019-012, No.2019-083, No.2019-084,
No.2019-085, No.2019-087, No.2019-088, No.2019-089, No.2019-090 and No.2020-002) on 30 Jan., 14 Feb., 23
Feb., 7 Dec., 18 Dec., 26 Dec. 2019 and 11 Jan. 2020 respectively.
(5) The resolution of the 19th meeting of the Ninth Board of Directors of the Company passed and agreed the
company to apply for a special credit line of up to 300 million yuan in the bank notes pool to Hefei Branch of
China Everbright Bank; and being deliberated and approved by the resolution of 29th session of 9th BOD and 4th
extraordinary shareholders general meeting of 2019, the Company and its subsidiary are agreed to apply for a
special credit line of up to 600 million Yuan, 500 million Yuan, one billion Yuan, 300 million Yuan and 500
million Yuan in the bank notes pool to Hefei Branch of Hangzhou Bank, Hefei Branch of Huaxia Bank, Anhui
Branch of Bank of Communications, Hefei Branch of Industrial Bank and Hefei Branch of China Zheshang Bank
respectivey, with a credit period of one year, the credit varieties are mainly used for special business of bill pool
and bill pledge is adopted. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖,
―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2019-004, No.2019-007, No.2019-073, No.2019-075 and No. 2019-087) on
30 Jan. and 29 Oct. 2019 respectively.
(6) On February 25, 2019, the company received the Notice of Sichuan Changhong Electric Co., Ltd. and its
Concerted Action Person CHANGHONG (HK) TRADING LIMITED, Ltd. to Increase the Shareholding of
Changhong Meiling Co., Ltd. and the Equity Changes (hereinafter referred to as ―Notice‖). Sichuan Changhong
and its concerted action person CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as ―HK
Changhong‖ or ―concerted action person‖) bought 16,231,024 shares of Changhong Meiling (including
13,751,756 shares of Changhong Meiling A shares and 2,479,268 shares of Changhong Meiling B shares) by
bidding transaction method through the secondary market from November 12, 2018 to February 25, 2019,
accounting for 1.55% of Changhong Meiling‘s total share capital, consequently, the equity ratio of Changhong
Meiling held by Sichuan Changhong and concerted action person cumulative increased by 5% from September
2009 to February 2019.
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-003
136
CHANGHONG MEILING CO.,LTD. Annual Report 2019
and detailed statement of changes in interests) on 26 Feb. 2019 and 28 Feb. 2019.
(7) In late March 2019, the Company received the "Notice of Civil Penalty" issued by U.SDepartmentofEnergy
("DOE", i.e. the US Department of Energy) and accepted the settlement proposal proposed by the DOE. As of the
end of the reporting period, the company has paid a fine of US$1,901,540 to the US Department of Energy. Found
more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-014) on
26 March 2019.
(8) The resolutions of the 20th meeting of the Ninth Board of Directors, the 11th meeting of the Ninth Board of
Supervisors, and the 2018 Annual General Meeting of Shareholders passed and agreed the company to change the
corresponding accounting policies according to the relevant regulations and requirements of the Ministry of
Finance so as to apply to the new regulations. Found more on appointed media ―Securities Times‖, ―China
Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the
form of announcement (Announcement No. 2019-015, No.2019-016, No.2019-018, and No.2019-035) on 29
March 2019, and 22 May 2019
(9) The resolutions of the 20th meeting of the Ninth Board of Directors and the 2018 Annual General Meeting of
Shareholders passed and agreed the company and its subsidiaries to carry out forward foreign exchange fund
trading business from July 1, 2019 to June 30, 2020, the balance of the business transaction does not exceed
US$650 million (mainly including US dollar, Australian dollar, Euro, and other foreign exchanges are all
converted into US dollars), and the maximum single-business delivery period is no more than one year. Found
more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,
No.2019-020, and No.2019-035) on 29 March 2019, and 22 May 2019
(10) In accordance with the resolutions of the 20th meeting of the Ninth Board of Directors and the 2018 Annual
General Meeting of Shareholders, in order to safeguard the company's value and the shareholders' rights, and in
light of the company's actual situation and business development needs, it‘s agreed to revise the relevant
provisions of the repurchase of shares and the business scope of the company in the "Articles of Association",
"Rules of Procedure of the General Meeting of Shareholders", and ―Rules of Procedure of the Board of Directors".
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,
No.2019-022, and No.2019-035) on 29 March 2019, and 22 May 2019
(11) The resolutions of the 21st meeting of the Ninth Board of Directors, the 12th meeting of the Ninth Board of
Supervisors passed and agreed the company to implement the new financial instrument standards and change the
relevant accounting policies in accordance with the relevant regulations and requirements of the Ministry of
Finance. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong
Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2019-025, No.2019-026, and No.2019-028) on 20 April 2019
137
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(12) The resolutions of the 22nd meeting of the Ninth Board of Directors and the 2018 Annual General Meeting of
Shareholders of the company passed and agreed the by-election of Mr. Zhong Ming as a non-independent director
of the Ninth Board of Directors of the Company, and his term of office is the same as that of the Ninth Board of
Directors. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong
Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2019-030, and No.2019-035) on 27 April 2019 and 22 May 2019
(13) In reporting period, the Company and its subordinate controlling subsidiary, have accumulated received
various kinds of government subsidies as 101,096,075.33 Yuan. Found more on appointed media ―Securities
Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company
disclosed in the form of announcement (Announcement No. 2019-036, No. 2019-048 and No. 2019-093) on 12
June, 13 August and 31 December 2019 respectively.
(14) The resolutions of the 20th meeting of the Ninth Board of Directors, the 11th meeting of the Ninth Board of
Supervisors, and the 2018 Annual General Meeting of Shareholders passed the ―Plan for Profit Distribution of the
Company in 2018‖, and the independent directors of the company made independent approval opinions, taking
into account the interests of shareholders and the long-term development needs of the company, agreed the
company to use the total share capital of 1,044,597,881 shares on December 31, 2018 as the base, and distribute a
cash dividend of 0.6 yuan (including tax) per every 10 shares to all shareholders, who distributed cash dividends
of 62,675,872.86 yuan (including tax) in total. After this allocation, the company's total share capital remains
unchanged, and the remaining undistributed profit of the parent company is 854,892,061.08 yuan, and the
remaining undistributed profits shall be distributed after being carried forward in the subsequent years.
On 18 June 2019, the Company released the profit distribution plan for year of 2018 and implemented the plan.
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,
No.2019-016, No.2019-035, and No.2019-037) on 29 March 2019, 22 May 2019 and 18 June 2019.
(15) On June 28, 2019, the company received the ―Shareholding Reduction Plan‖ from Mr. Zhong Ming, the
company's director and vice president, Mr. Zhong Ming planned to reduce his holdings of the Company‘s shares
of no more than 78,725 shares (not exceeding 0.0075% of the company's total share capital) by centralized
bidding transactions of the stock exchanges within six months after 15 trading days from the date of the
announcement of the shareholding reduction plan due to his own capital arrangements. On 23 August 2019, the
―Notification letter on Completion of Shareholding Reduction plan‖ was received by the Company from Mr.
Zhong Ming, the 78,725 shares, above mentioned, are reduced by centralized bidding transactions of the stock
exchanges was completed as of 22 August 2019. Found more on appointed media ―Securities Times‖, ―China
Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the
form of announcement (Announcement No. 2019-039 and No. 2019-055) on 29 June 2019.
(16) Approved by the resolution of 25th session of 9th BOD, the Company and its subsidiary are agreed to write off
138
CHANGHONG MEILING CO.,LTD. Annual Report 2019
the bad debt of receivables, that irrecoverable- 12,604,521.25 Yuan in total. Found more on appointed media
―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the
Company disclosed in the form of announcement (Announcement No. 2019-039 and No. 2019-052) on 16 August
2019.
(17) Approved by the resolution of 26th session of 9th BOD, the subordinate controlling subsidiary- Meiling
CANDY Washing Machine Co., Ltd is agreed to clearing off. Found more on appointed media ―Securities Times‖,
―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed
in the form of announcement (Announcement No. 2019-057) on 31 August 2019.
(18) Approved by the 24th session of 9th BOD, 13th session of 9th Supervisory Committee and 2nd extraordinary
shareholders general meeting of 2019, the implementing body - Changmei Technology of the ―Intelligent life
project‖ is agreed to clearing off as an enterprise. Found more on appointed media ―Securities Times‖, ―China
Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the
form of announcement (Announcement No. 2019-040, No. 2019-041, No. 2019-043 and No. 2019-047) on 9 July,
26 July 2019 respectively.
(19) Approved by the resolution of 27th session of 9th BOD, the controlling subsidiary - Zhongke Meiling is agreed
to implementing the first share issuance plan for year of 2019. The issuing object subscribes in cash and agreed
that the Company waives the right to subscribe for the shares on the same terms. Found more on appointed media
―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the
Company disclosed in the form of announcement (Announcement No. 2019-060 and No. 2019-062) on 10
September 2019.
XX. Major event of the subsidiary
√Applicable □ Not applicable
(1)The resolution of the 20th meeting of the Ninth Board of Directors of the company passed and agreed the
company's subsidiaries, Zhongshan Changhong Electric Appliance Co., Ltd., Guangdong Changhong Technology
Co., Ltd. and Hongyuan Geothermal Heat Pump Technology (Zhongshan) Co., Ltd. to donate a total of 130,000
yuan to Nantou Town People's Government of Zhongshan City to expand the Nantou Town Central Primary
School. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong
Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2019-015 and No.2019-023) on 29 March 2019.
(2)The resolution of the 21st meeting of the Ninth Board of Directors of the company passed and agreed Zhongke
Meiling Cryogenic Technology Co., Ltd (hereinafter referred to as ―Zhongke Meiling‖), a holding subsidiary of
the company, to invest 10 million yuan to set up a wholly-owned subsidiary to engage in refrigeration engineering
equipment sales, design and other services. Found more on appointed media ―Securities Times‖, ―China Securities
Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2019-025) on 20 April 2019.
139
长虹美菱股份有限公司 2019 年年度报告
(3) The resolution passed at the 32nd meeting of the ninth board of directors of the company agreed the company
and five natural persons to jointly invest US$ one million in the Philippines to establish a new trade-type joint
venture subsidiary, CH-Meiling International (Philippines) Inc. (the company name is subject to the final approval
of local authorities), to work on the import and wholesale sales of all household appliances and other products.
Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-083)
on 7 December 2019.
(4) Approved by resolution of 33rd session of 9th BOD, subordinate subsidiary - Sichuan Changhong
Air-conditioner Co., Ltd is agreed to invested approximately 39843000 Yuan for capacity expansion and technical
transformation to improve the production capacity and technical standards. Found more on appointed media
―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the
Company disclosed in the form of announcement (Announcement No. 2019-088) on 26 December 2019.
140
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section VI. Changes in shares and particular about shareholders
I. Changes in shares
(i) Changes in shares
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Bon Capitaliz
New
Proporti us ation of Proporti
Amount shares Others Subtotal Amount
on shar public on
issued
es reserve
I. Restricted shares 80,431,408 7.70% 0 0 0 -69,877,638 -69,877,638 10,553,770 1.01%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0
2. State-owned legal person‘s
shares 70,793,625 6.78% 0 0 0 -69,877,638 -69,877,638 915,987 0.09%
3. Other domestic shares 8,370,363 0.80% 0 0 0 0 0 8,370,363 0.80%
Including: Domestic legal
person‘s shares 4,716,077 0.45% 0 0 0 0 0 4,716,077 0.45%
Domestic natural person‘s
shares 3,654,286 0.35% 0 0 0 0 0 3,654,286 0.35%
4. Foreign shares 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
Including: Foreign legal
person‘s shares 0 0.00% 0 0 0 0 0 0 0.00%
Foreign natural person‘s shares 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
II. Unrestricted shares 964,166,473 92.30% 0 0 0 69,877,638 69,877,638 1,034,044,111 98.99%
1. RMB ordinary shares 802,569,893 76.83% 0 0 0 69,877,638 69,877,638 872,447,531 83.52%
2. Domestically listed foreign
shares 161,596,580 15.47% 0 0 0 0 0 161,596,580 15.47%
3. Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 1,044,597,881 100.00% 0 0 0 0 0 1,044,597,881 100.00%
1. Reasons for share changed
√ Applicable □ Not applicable
During the reporting period, the 69,877,638 RMB common shares (A-stock), non-publicly offering by the
Company, subscribed by the controlling shareholder- Sichuan Changhong Electric Co., Ltd on 14 Oct. 2016 are
released for trading dated 15 Oct. 2019. Details can be found in the announcement (No.: 2019-068) released on
141
CHANGHONG MEILING CO.,LTD. Annual Report 2019
appointed media Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) dated 11 October 2019.
2. Approval of share changed
□ Applicable √ Not applicable
3. Ownership transfer of share changed
□ Applicable √ Not applicable
4. Progress of shares buy-back
□ Applicable √ Not applicable
5. Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
6. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable
to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
7. Other information necessary to disclose for the Company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
(ii) Changes of restricted shares
√ Applicable □ Not applicable
In Share
Restricted
Shares
Opening Shares Ending
Shareholde Increased Restricted
shares released in shares Date for released
rs In reasons
restricted Period restricted
the
Period
On 25 April 2019, Mr. Li Wei resigned from chairman of the
ninth board of director for work remove, the original office
term would have expired on 12 September 2020. According to
Share
the relevant requirements of the Implementation Rules on
lockup in
Li Wei 1,071,355 357,118 357,118 1,071,355 Shareholding Reduction by Shareholders, Directors,
senior
Supervisors and Senior Management of Listed Companies
executives
Issued by Shenzhen Stock Exchange, where a director,
supervisor or senior management resigns prior to expiration
of his term, shares transferred each year during the term as
142
CHANGHONG MEILING CO.,LTD. Annual Report 2019
determined when he takes the position and the six months
upon expiration of his term shall not exceed 25% of the total
shares held by him in The Company, and he is not allowed to
transfer the shares held by him in The Company within six
months after his resignation. Therefore, the lifting of
restrictions on the sales of Company‘s shares should follow
the above provisions
Non-publicl
Sichuan
y placement
Changhong
69,877,638 69,877,638 0 0 with 2019-10-15
Electric
restriction in
Co., Ltd.
trading
Total 70,948,993 70,234,756 357,118 1,071,355 -- --
II. Security offering and listing
(i) Security offering in reporting period (Not including preferred stock)
□ Applicable √ Not applicable
(ii) Explanation on changes of total shares, shareholders structure and assets & liability structures
□ Applicable √ Not applicable
(iii) Current shares held by internal staffs
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
(i) Amount of shareholders of the Company and particulars about shares holding
In Share
Total preference Total preference shareholders
Total common
shareholders with voting with voting rights recovered at
Total shareholders at end of shareholders at end of
61,760 60,596 rights recovered at end of 0 end of last month before 0
the Period last month before
reporting period (if annual report disclosed (if
annual report disclosed
applicable) applicable)
Particulars about shares held above 5% by shareholders or top 10 shares holding
Number of share
Total Amount of
Amount of pledged/frozen
Proportion shareholders at Changes in restricted
Full name of Shareholders Nature of shareholder of shares un-restricted State
held the end of report report period shares
shares held of Amount
period held
share
Sichuan Changhong Electric Co., Ltd. State-owned legal person 23.79% 248,457,724 2,156,200 0 248,457,724 - -
Hefei Industry Investment Holding State-owned legal person 4.58% 47,823,401 - 0 47,823,401 - -
143
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(Group) Co., Ltd.
CHANGHONG (HK) TRADING
Foreign legal person 2.59% 27,077,797 - 0 27,077,797 - -
LIMITED
CAO SHENGCHUN Foreign natural person 1.41% 14,766,086 525,107 0 14,766,086 - -
Caitong Fund- Ningbo Bank-Haitong Domestic
Xingtai (Anhui) Emerging Industry non-state-owned legal 1.03% 10,733,452 - 0 10,733,452 - -
Investment Fund (Limited Partnership) person
Ma Guobin Domestic nature person 0.95% 9,872,934 9,872,934 0 9,872,934 - -
China Construction Bank - Huaxia
China Securities Sichuan State-owned Domestic general legal
0.68% 7,128,900 7,128,900 0 7,128,900 - -
enterprise reform exchange traded person
index securities investment fund
Philip Securities (H.K.) Co., Ltd. Foreign legal person 0.60% 6,296,913 434,230 0 6,296,913 - -
Zheng Huiru Domestic nature person 0.59% 6,173,700 3,372,400 0 6,173,700 - -
Zheng Shumin Domestic nature person 0.55% 5,700,000 5,700,000 0 5,700,000 - -
Strategy investors or general legal
person becomes top 10 shareholders Not applicable
due to rights issued (if applicable)
Among the above shareholders, CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as Hong
Kong Changhong) is the wholly-owned subsidiary of Sichuan Changhong Electric Co., Ltd.; except the shares of
the Company directly held by Hong Kong Changhong, 6,296,913 shares of B-stock are also held through Phillip
Securities (Hong Kong) Co., Ltd., the foregoing shareholders constitute persons of uniform action. There existed
no associated relationship or belong to the concerted actors as specified in the Measures for the Administration of
Explanation on associated relationship Information Disclosure of Shareholder Equity Changes of Listed Companies among Sichuan Changhong, Hong
among the aforesaid shareholders Kong Changhong and other top 7 shareholders（Philip Securities (H.K.) Co., Ltd. excluded.）; ―Caitong Fund-
Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership) ‖ refers to the
products of Caitong Fund Management Company subscribe for privately placement of 2016; The company neither
knows whether there is any association among other shareholders, nor knows whether other shareholders belong
to the persons acting in concert that is stipulated in the ―Administrative Measures on Information Disclosure of
Changes in Shareholding of Listed Companies‖.
Particular about top ten shareholders with un-restrict shares held
Amount of unrestricted Type of shares
Shareholders‘ name
shares held at end of Period Type Amount
Sichuan Changhong Electric Co., Ltd. 248,457,724 RMB ordinary shares 248,457,724
Hefei Industry Investment Holding (Group) Co., Ltd. 47,823,401 RMB ordinary shares 47,823,401
CHANGHONG (HK) TRADING LIMITED 27,077,797 Domestically listed foreign shares 27,077,797
CAO SHENGCHUN 14,766,086 Domestically listed foreign shares 14,766,086
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging
10,733,452 RMB ordinary shares 10,733,452
Industry Investment Fund (Limited Partnership)
144
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Ma Guobin 9,872,934 RMB ordinary shares 9,872,934
China Construction Bank - Huaxia China Securities Sichuan
State-owned enterprise reform exchange traded index securities 7,128,900 RMB ordinary shares 7,128,900
investment fund
Philip Securities (H.K.) Co., Ltd. 6,296,913 Domestically listed foreign shares 6,296,913
Zheng Huiru 6,173,700 RMB ordinary shares 6,173,700
Zheng Shumin 5,700,000 RMB ordinary shares 5,700,000
Expiation on associated relationship or
consistent actors within the top 10 un-restrict
Found more in ―Particulars about shares held above 5% by shareholders or top 10 shares holding‖
shareholders and between top 10 un-restrict
shareholders and top 10 shareholders
As of 30 December 2019, among the top 10 common shareholders, Ma Guobin holds 9,859,334 shares of
the Company through customer credit trading secured account of Founder Securities Co., Ltd., and 13,600
Explanation on top ten common shareholders shares hold through common securities account, thus 9,872,934 shares of the Company are held in total.
involving margin business (if applicable) Zheng Shumin holds 2,500,000 shares of the Company through customer credit trading secured account of
China Galaxy Securities Co., Ltd., and 3,200,000 shares hold through common securities account, thus
5,700,000 shares of the Company are held in total.
Note 1: At end of the reporting period, the person acting in concert with controlling shareholder Sichuan
Changhong-- CHANGHONG (HK) TRADING LIMITED, holds B-stock of the Company as 33,374,710 shares,
among which, 6,296,913 shares are held through Philip Securities (H.K.) Co., Ltd. by CHANGHONG (HK)
TRADING LIMITED
Note 2: In the above table, "Particulars about shares held above 5% by shareholders or top 10 shares holding" is
subject to the data on stock transfer books provided by China Securities Depository and Clearing Corporation
Limited Shenzhen Branch
Whether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted
conditions have made the repurchase transactions as agreed during the reporting period.
□Yes √ No
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted conditions
have not made the repurchase transactions as agreed during the reporting period.
(ii) Controlling shareholder of the Company
1. Nature of controlling shareholders: local state-owned holding
2. Type of controlling shareholders: legal person
Controlling Legal
Dated Organizati
shareholders‘ rep./person in Main business
founded on code
name charge of unit
Sichuan 91510700 Manufactures, sales and maintenance of household appliance, automotive electrical appliance,
Changhong Zhao Yong 1993-4-8 20541230 Electronic products and spare parts, communications equipment, lighting equipment, household
Electric Co., 8D products, computer and other Electronic equipment, specialized equipment of Electronic and
145
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Ltd. Electronic, Electronic machinery and equipment, series products of batteries, Electronic medicine
products, Electronic equipment, mechanical equipment , Refrigeration equipment and accessories
digital monitoring products, metal products, apparatus and instruments, culture and office
machines, culture and education and sports products, kitchen cabinet and gas appliance; house
and equipment rental; packing products and technical services; road transportation; storage and
discharging convey; R&D, sales and services of integrated circuit and software; consultancy and
services of enterprise management; hi-tech project investment and other state-permitted business;
development and operation of property; engineering construction for house and buildings;
callback and disposal of obsolete appliance and Electronic products; services of Information
Technology; consultancy and services of finance; sales, relevant import and export business of
Chemical raw materials and products(Not contain dangerous chemicals), building materials,
non-ferrous metal, Steel, plastics, packing material, mechanical and electrical
equipment, Precious metals, Automotive components, Electronic components, Value added
telecommunication service, agent service of telecommunication; designing, manufacturing,
releasing and agency for the advertisement; R&D and design of the drone and unmanned aerial
vehicle system as well as the promotion of drone technology; transfer and technical consulting
service, production and sales of drone (any projects that needs permission by the law should
subject to the approval by relevant authority )
1. Ended as 31 December 2019, 30.60 percent equity of Changhong Huayi Compressor Co., Ltd. (stock code: 000404),
Equity controlling and jointly
the listed company in main board of SSE, were directly hold by Sichuan Changhong.
of other foreign/domestic listed
2. Up to 31 December 2019, 1,008,368,000 common shares of the Changhong IT (Stock code: 08016), the listed
company by controlling
company in GEM of Hong Kong Stock Exchange, were held by Sichuan Changhong and its persons acting in concert,
shareholder in reporting period
representing 69.3202 percent in total issued common shares of Changhong IT
3. Controlling shareholder changes in reporting period
□ Applicable √ Not applicable
Controlling shareholder stays the same in Period.
4. Other notes
On February 25, 2019, the company received the Notice of Sichuan Changhong Electric Co., Ltd. and its
Concerted Action Person Changhong (Hong Kong) Trading LIMITED. to Increase the Shareholding of
Changhong Meiling Co., Ltd. and the Equity Changes (hereinafter referred to as ―Notice‖). Sichuan Changhong
and its concerted action person Changhong (Hong Kong) Trading Co., Ltd. (hereinafter referred to as ―HK
Changhong‖ or ―concerted action person‖) bought 16,231,024 shares of Changhong Meiling (including
13,751,756 shares of Changhong Meiling A shares and 2,479,268 shares of Changhong Meiling B shares) by
bidding transaction method through the secondary market from November 12, 2018 to February 25, 2019,
accounting for 1.55% of Changhong Meiling‘s total share capital, consequently, the equity ratio of Changhong
Meiling held by Sichuan Changhong and concerted action person accumulatively increased by 5% from
September 2009 to February 2019. Found more on appointed media Securities Times, China Securities Journal,
Hong Kong Commercial Daily and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2019-013) on 26 Feb. 2019
146
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(iii) Actual controller of the Company and its person acting in concert
1. Nature of actual controller: local state-owned assets management
2. Type of actual controller: legal person
Legal
Organizati
Actual controller rep./person in Dated founded Main business
on code
charge of unit
State-owned Assets Supervision & Administration
Commission of Mianyang Municipality is entrusted by
State-owned Assets Supervision & the same level government, together performs
Administration Commission of -- -- -- decision-making and management of state-owned asset
Mianyang Municipality owners, and is one organization which executes
comprehensive management and supervision on its
belonged state-owned assets.
Equity controlling of other
foreign/domestic listed company by Not applicable
actual controller in reporting period
3. Changes of actual controller in Period
□ Applicable √ Not applicable
Actual controller stays the same in Period
4. Property rights and the block diagram of the control relationship between the Company and the actual control
(ended as 31st December 2019)
State-owned Assets Supervision & Administration Commission of Mianyang Municipality
100%
Sichuan Changhong Electronics %Holding Group Co.,
Ltd.
23.22%
%
Sichuan Changhong Electric Co., Ltd.
100%
四川省绵 23.79%
CHANGHONG (HK) TRADING LIMITED
四川省绵
科技有限
3.19% 阳市虹欢
责任公司
科技有限
%
Changhong Meiling Co., Ltd. 责任公司
%
%
5. Actual controller controlling the Company by means of entrust or other assets management
147
CHANGHONG MEILING CO.,LTD. Annual Report 2019
□ Applicable √ Not applicable
(iv) Other legal person’s shareholders with over ten percent shares held
□ Applicable √ Not applicable
(v) Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
148
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
149
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
150
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section IX. Particular about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executive
Amount of
Amount of
Shares held shares Other
Office dated shares Shares held
Office dated at increase in
Name Title Post status Sex Age decreased in changes at period-end
from ended period-begin( this
this period (Share)
Share) period(Share (share)
(Share)
)
Li Wei Former Chairman Office leaving M 47 2011-6-20 2020-9-12 1,428,473 0 0 0 1,428,473
Wu
Chairman Currently in office M 47 2014-7-3 2020-9-12 570,500 0 0 0 570,500
Dinggang
Kou Director, Deputy
Currently in office M 50 2014-7-3 2020-9-12 0 0 0 0 0
Huameng president
Shi Qiang Director Currently in office M 51 2017-9-12 2020-9-12 0 0 0 0 0
Yong
Director Currently in office M 51 2017-9-12 2020-9-12 0 0 0 0 0
Fengshan
Director, Deputy
Zhong Ming Currently in office M 47 2013-12-30 2020-9-12 314,900 0 78,725 0 236,175
president
Director, Deputy
Hu Zhaogui Currently in office M 46 2018-6-21 2020-9-12 178,050 0 0 0 178,050
president
Gan Independent
Currently in office M 53 2014-7-3 2020-9-12 0 0 0 0 0
Shengdao director
Independent
Ren Jia Currently in office M 56 2014-7-3 2020-9-12 0 0 0 0 0
director
Independent
Lu Yingjin Currently in office M 55 2014-7-3 2020-9-12 0 0 0 0 0
director
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Chairman of
Shao Min Currently in office M 37 2017-9-12 2020-9-12 0 0 0 0 0
Supervisory
Huang
Supervisor Currently in office F 49 2017-9-12 2020-9-12 0 0 0 0 0
Hong
He Xintan Supervisor Currently in office M 39 2017-9-12 2020-9-12 0 0 0 0 0
Ji Ge Staff supervisor Currently in office F 38 2017-12-25 2020-9-12 0 0 0 0 0
Zhu Wenjie Staff supervisor Currently in office M 32 2015-4-8 2020-9-12 0 0 0 0 0
Liu Executive deputy
Currently in office M 56 2011-6-20 2020-9-12 1,689,893 0 0 0 1,689,893
Hongwei president
Huang
Deputy president Currently in office M 50 2017-9-12 2020-9-12 356,450 0 0 0 356,450
Danian
CFO (person in
Pang Haitao Currently in office M 44 2017-10-25 2020-9-12 0 0 0 0 0
charge of finance)
Secretary of the
Li Xia Currently in office F 39 2009-5-22 2020-9-12 552,800 0 0 0 552,800
Board
Total -- -- -- -- -- -- 5,091,066 0 78,725 0 5,012,341
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Resigned his post as chairman of the Company due to
Li Wei Chairman Office leaving 2019-4-25
personal reasons
Resigned as President of the Company for personal
President Office leaving 2019-1-12
reasons
Wu Dinggang Being approved by the 22th session of 9th BOD, Mr. Wu
th
Chairman Election 2019-4-26 Dinggang was elected as the chairman of the 9 BOD
with service term same as the 9th BOD
Approved by 18th session of 9th BOD, Mr. Kou Huameng,
Acting president
Kou Huameng Appointment 2019-1-11 the director and vice president of the Company, is
works
authorized to act as the President
Being approved by the shareholders general meeting of
2018, Mr. Zhong Ming was elected as the
Zhong Ming Director Election 2019-5-21
non-independent director of the 9th BOD with service
term same as the 9th BOD
III. Post-holding
(i) Professional background, major working experience and present main responsibilities in Company of
directors, supervisors and senior executive at the present
1. Li Wei, male, the Han nationality from Tongliang, Chongqing, was born in February 1973, Member of CPC,
Assistant Economist with Master degree, he is reading EMBA in USTC. He ever took the post of General
Manager of Xi‘an Sales Branch of Sichuan Changhong Electronic Co., Ltd., General Manger of Southeast
Operation Management Center of Changhong Electronic (China) Marketing Co., Ltd., GM of Sichuan Changhong
Air-conditioner Co., Ltd., chairman of Zhongshan Changhong Electric Co., Ltd., and deputy president, president
and deputy chairman of the Company. Now he serves as Director and GM of Sichuan Changhong Electric Co.,
Ltd.
2. Wu Dinggang, male, the Han nationality from Suining, Sichuan Province, was born in March 1973, Member of
CPC, owns bachelor degree, graduate from Tianjin University of Commerce China (Tianjin University of
Commerce now), major in refrigeration equipment and cryogenic technique. He served successively as GM of
Suining Sale Branch and Chengdu Sales Branch of Sichuan Changhong Electric Co., LTD, director of Sichuan
and Chongqing Marketing Management Department of Sichuan Changhong Electric Co., LTD, deputy GM of
Changhong Electronics (China) Marketing Co., GM of market planning center of Changhong Multimedia Industry,
director and GM of Le-Jia-Yi Chain Management Co., Ltd., Zhongke Meiling Cryogenic Technology Co., Ltd.
director and GM of Sichuan Changong Air Conditioner Co., Ltd and deputy president, president and deputy
chairman of the Company. Currently he serves as vice GM of Sichuan Changhong Electric Co., Ltd., party
secretary, chairman of the Company; Chairman of Zhongshan Changhong Electric Co., LTD; Chairman of
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Sichuan Changhong Air-conditioner Co., Ltd. and Chairman of Zhongke Meiling Cryogenic Technology Co., Ltd.
3. Kou Huameng, male, the Han nationality from Yanting, Sichuan Province, was born in February 1970, Member
of CPC, master degree candidate, EMBA graduate from UESTC. He served successively as deputy director of
production office of Sichuan Changhong Electric Co., LTD, director of Guangxi Marketing management
Committee, director of Fujian-Jiangxi Marketing Management and director and GM of Guangdong Changhong
Digital Technology Co., Ltd.; Sichuan Changhong Electric Co., Ltd, director of development management
department of Sichuan Changhong Electric Co., Ltd.; now he serves as director and deputy president of the
Company (acting president/conducting works), and director of Changhong Huayi Compressor Co., Ltd.,
4. Shi Qiang, male, Han nationality, was born in July 1968, a member of the Communist Party of China, earned a
bachelor‘s degree in underwater sound electronic engineering from Southeast University, and is an engineer. He
successively served as the office secretary of Changhong Company, director of quality management division, the
director of goods and material department, liaison office of overseas marketing, the director of asset management
department, deputy minister, minister, director of the office of the board of directors; Director of Sichuan
Changhong New Energy Technology Co., Ltd.; Director of Sichuan Changhong Power Source Co., Ltd. Currently
he serves as deputy party secretary, discipline inspection commission, director, secretary of Changhong Huayi
Compressor Co., Ltd.; Director of Jiaxipera Compressor Co., Ltd., and director of Changhong Grand-Pro Tech.
Co., Ltd. and director of the Company
5. Yong Fengshan, male, Han nationality, was born in Dingyuan, Anhui in June 1968, a member of the Communist
Party of China, a senior accountant, and a master degree holder. He ever took the posts of the director of finance
department of Hefei Cable Factory, the director of finance division and the deputy chief accountant of Hefei
Meiling Co., Ltd., the director of Hefei Department Store Co., Ltd., the deputy general manager and chief
accountant of Hefei Meiling Group Holding Co., Ltd., the secretary of the party committee and the president of
Hefei Industrial Investment Holdings Co., Ltd., the president of CAS (Hefei) Institute of Technology Innovation
Co., Ltd., the vice president of Whirlpool (China) Co., Ltd., the president of Hefei Venture Capital Guidance Fund
Co., Ltd. , and the director of the Company.
6. Zhong Ming, male, the Han nationality from Meishan, Sichuan Province, was born in November 1972, member
of CPC, a senior engineer, EMBA master and a PhD major in engineering thermophysics. He successively served
as deputy director of research institution of Sichuan Changhong Air-conditioner Co., Ltd., deputy GM of Sichuan
Changhong Air-conditioner Co., Ltd. and technical director of household appliance group of Sichuan Changhong
Electric Co., LTD. He serves as director and deputy president of the Company currently and director of Zhongke
Meiling Cryogenic Technology Co., Ltd.
7. Hu Zhaogui, male, the Han nationality, born in Feixi Hefei in October 1974, a member of the Communist Party
of China, holds a master‘s degree, graduated from Chongqing University as a master of business administration.
He has served successively as the head of marketing and sales department stationed abroad of Hefei Meiling Co.,
Ltd., assistant president and general manager of the freezer and washing machine business division, and general
manager of the domestic marketing division. He is currently the director and vice president of the Company and
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
the general manager of Sichuan Changhong Air Conditioner Co., Ltd., a subsidiary of the Company.
8. Gan Shengdao, male, the Han nationality from Tianchang, Anhui Province, was born in March 1967, member
of China Democratic National Construction Association, a doctoral candidate and Doctor of Economic. He served
successively as teaching assistant, lecturer and associate professor in Department of National Economic
Management of Sichuan University, the associate professor and professor in Department of Business
Administration of Sichuan University. An independent director of Liangshan Rural Commercial Bank Co., Ltd.,
and an independent director of Chengdu Rainbow Electric (Group) Co., Ltd. Currently serves as a professor and
doctoral supervisor at Business School of Sichuan University, deputy director of the Financial Research Institute
of Sichuan University, an independent director of Sinoseal Holding Co.Ltd., an independent director of Sichuan
Yahua Industrial Group Co., Ltd., an independent director of Yibin Wuliangye Co., Ltd., and an external director
of Sichuan Huashi Group Co., Ltd., Independent director of Chengdu GIMI Technology Co., Ltd., and an
independent director of the Company.
9. Ren Jia, male, Han nationality, was born in Nantong, Jiangsu in July 1963, a master degree holder, and
graduated from the Department of Materials Science and Engineering of Tsinghua University. He ever took the
posts of the assistant general manager of Beijing Building Materials Imp. & Exp. Co., Ltd., the department deputy
manager of Jiangsu Overseas Group Co., Ltd., the department deputy manager and assistant general manager of
Jiangsu Economic and Trade Corporation, the general manager of Import and Export Company of Zhejiang
Xiangyang Group, the director and general manager of Nanjing Shenlu Textile & Apparel Co., Ltd., the deputy
general manager of Guangzhou Anyka Microelectronics Co., Ltd., the deputy general manager of Shanghai
Multimedia Valley Investment Co., Ltd., independent director of Kingnet Co., Ltd., the partner of Shanghai Heda
Enterprise Management Partnership (limited partnership), and vice president of SIMIC Group Co., Ltd. He
currently serves as chairman and general manager of SIMIC Technology Development Co., Ltd., the president of
Shanghai Zhongke Xinwei Information Technology Park Co., Ltd., an independent director of InHand Networks,
Executive partner of Shanghai Zhihe Technology Partnership，and an independent director of the Company.
10. Lu Yingjin, male, the Han nationality, was born in October 1964, Member of CPC, a doctoral candidate,
Doctor of Management Science and Engineering of the UESTC. He served successively as Assistant Engineer of
Shenli Field Drilling Technical Company and lecturer of Staff Education and Training Center of South-West
Petroleum Bureau, and he teaches in UESTC since 2002.And he has been a visiting scholar in the department of
computer science at the University of Kentucky in the United States. Now he serves as associate professor in
Economics and Management School of UESTC and Independent Director of the Company.
11. Shao Min, male, Han nationality, was born in Linyi, Shandong in March 1983, and earned a bachelor‘s degree
in accounting major from Xi‘an Jiaotong University. He joined in work in July 2004, and ever served as the
finance manager of the branch office of Sichuan Changhong Electric Co., Ltd., the financial director of finance
department, the project manager of asset management department, the director of asset management department,
and the director of asset operation department of Sichuan Changhong Electric Co., Ltd. He currently serves as the
deputy director of asset management department of Sichuan Changhong Electric Co., Ltd., and the chairman of
the Board of Supervisors of the Company.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
12. Huang Hong, female, Han nationality, was born in Shehong, Sichuan in June 1970, a member of the
Communist Party of China, a master degree holder, and graduated from the University of Glasgow as a MBA. She
joined in work in July 1992, and ever served as the financial director of finance department, the audit manager,
marketing audit director, and audit chief of auditing department of Sichuan Changhong Electric Co., Ltd. He
currently serves as the deputy director of auditing department and the deputy director of labor union audit
committee of Sichuan Changhong Electric Co., Ltd., and a supervisor of the Company.
13. He Xintan, male, Han nationality, was born in Xiayi, Henan in April 1980, a member of the Communist Party
of China, an economist, and earned a master‘s degree in management science and engineering from Xi‘an
Jiaotong University. He joined in work in July 2002, and successively took the posts of the operations
management director of operation management department and the manager of general management office of
Sichuan Changhong Electric Co., Ltd. Currently he serves as the deputy director of development and management
department of Sichuan Changhong Electric Co., Ltd., and a director of Changhong Huayi Compressor Co., Ltd.,
and a supervisor of the Company.
14. Ji Ge, female, Han nationality, was born in Nanyang, Henan Province in January 1982, a member of the
Communist Party of China, and earned a bachelor‘s degree in law from Hunan University and a master‘s degree
from Anhui University. She joined Hefei Meiling Co., Ltd. in July 2005 and once served as the legal specialist of
legal department, the sponsor of legal affairs, and the intellectual property director of the legal department of the
Company. She currently serves as staff supervisor of the Company, the director of the legal department of the
Company, director of office of Party Committee, member of commission for Discipline Inspection, and director of
Discipline Inspection office
15. Zhu Wenjie, male, the Han nationality from Hefei, Anhui Province, member of Communist Party of China,
born in January 1988, a master degree，graduated from University of science and technology of China as a MBA.
He started to work in Hefei Meiling Co., Ltd. in July 2010 after graduation, served as an accountant for big
customer accounting in financial management department of Hefei Meiling Co., Ltd., securities affairs assistant at
the office of secretary of the board, and director of securities affairs, and currently serves as the representative of
the Company's securities affairs, director of securities affairs at the office of secretary of the board, and staff
supervisor of the Company.
16. Liu Hongwei, Male, Chinese American, bored in May 1963, Doctor of Applied Mechanics from Lehigh
University, graduate from department of mechanical engineering, Tsinghua University. He served successively in
Kulicke and Soffa Industries, Pennsylvania; Tessera Technology Corporation, Califonia; serves technical and
management post in Intel Corporation in Silicon Velleg. He joints the Hefei Meiling Co., Ltd. in 2007, now he
serves as executive deputy president of the Company.
17. Huang Danian, male, Han nationality, was born in Huaining, Anhui in November 1969, a member of the
Communist Party of China, an engineer, and a master degree holder. He once served as the logistics director and
the deputy general manager, the director of the human resources department, the director of the comprehensive
planning department, the director of the enterprise management department, and the assistant to the general
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
manager of Sales Company of Hefei Meiling Co., Ltd. He is now the vice president of Hefei Meiling Co., Ltd.
18. Pang Haitao, male, Han nationality, was born in Qionghai, Hainan in May 1975, a member of the Communist
Party of China, a senior accountant, a senior political engineer, and a bachelor degree holder, and earned the
EMBA degree from Jiangxi University of Finance and Economics. He used to be a member of the finance
department, the director of related transactions and the director of capital operations of Sichuan Changhong
Electric Co., Ltd., the chief of finance office of Guangdong Changhong Electronics Co., Ltd., the director of
general ledger, the head of general management office, and the head of general ledger management office of the
finance department of Sichuan Changhong Electric Co., Ltd., the deputy general manager and chief financial
officer of Sichuan Changhong Development Co., Ltd., the deputy general manager and chief accountant of Huayi
Compressor Co., Ltd. Currently he is the chief financial officer (person in charge of finance) of the Company.
19. Li Xia, female, the Han nationality from Qionglai, Sichuan Province, was born in October 1980, Member of
CPC and Intermediate Accountant with Master Degree. She graduated from Accounting Department of Sichuan
University Business and Management School. She ever was Project Manager in Financing & Acquisition Office
of Asset Management Department and Business Executive in Board Office of Sichuan Changhong Electronic Co.,
Ltd. she took the posts of Deputy GM and Financial Supervisor of Sichuan Changhong Innovation Investment Co.,
Ltd., and chairman of supervisory committee of Zhongke Meiling Cryogenic Technology Co., Ltd.She is the
Secretary of the Board, deputy secretary of the Party and secretary of discipline inspection commission of the
Company recently.
(ii) Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Drawing remuneration
Start date of End date of
Name Title and allowance from
Shareholder‘s unit office term office term
shareholder‘s unit (Y/N)
Yes, drawing
Sichuan Changhong Electric Co.,
Wu Dinggang Deputy GM 2019.01.12 2020.08.28 remuneration since work
Ltd.
in the unit
Hefei Industry Investment Holding
Yong Fengshan Party Secretary, Chairman 2015.02.13 - Y
(Group) Co., Ltd.
Sichuan Changhong Electric Co., Deputy director of assets
Shao Min 2019.02.01 - Y
Ltd. management department
Sichuan Changhong Electronics Deputy Chief of auditing
Huang Hong 2011.09.16 - Y
Holding Group Co., Ltd. department
Deputy Chief of
Sichuan Changhong Electric Co.,
He Xintan development and 2019.02.01 - Y
Ltd.
management department
Post-holding in
N/A
shareholder‘s unit
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
(iii) Post-holding in other unit
√ Applicable □ Not applicable
Drawing
Start date of End date of remuneration and
Name Title
Other unit office term office term allowance from
other unit (Y/N)
Director 2015-05.18 N
Whirlpoor (China) Co., Ltd. Deputy 2019.06.15
2015.07.10 N
Chairman
Hefei Venture Capital Guidance Fund Co., Ltd. Chairman 2015.04.17 - N
CAS (Hefei) Technical Innovation Engineering
Chairman 2015.04.17 - N
Institute Co., Ltd.
Hefei State-owned Assets Holding Co., Ltd. Chairman 2015.04 - N
Yong
Fengshan Hefei Industry Investment Holding Co., Ltd. Chairman, GM 2014.09 - N
Anhui Integrated Circuit Industry Capital Co.,
Chairman 2017.05 - N
Ltd.
Anhui IT Industry Investment Holdings Co., Ltd. Director 2014.01 - N
Jianghuai Automobile Co., Ltd. Director 2018.07.21 2021.07.20 N
Industrial Investment (HK) Ltd Director 2017.04 - N
Hefei Smart Energy Innovation Platform Co., Ltd. Director 2017.06 - N
Wu
Sichuan Zhiyijia Network Technology Co., Ltd. Director 2015.01 - N
Dinggang
Director 2017.05.03 N
Shi Qiang Changhong Huayi Compressor Co., Ltd. Secretary of the 2021.05.17
2018.03.05 Y
Board
Kou
Changhong Huayi Compressor Co., Ltd. Director 2015.04.16 2021.05.17 N
Huameng
Professor,
doctoral
supervisor,
deputy director
Gan Business School of Sichuan University of the Financial 1990.07 - Y
Shengdao Research
Institute of
Sichuan
University
Sinoseal Holding Co.Ltd. Independent 2011.06.21 2021.02.11 Y
158
CHANGHONG MEILING CO.,LTD. Annual Report 2019
director
Independent
Sichuan Yahua Industrial Group Co., Ltd 2015.06.09 2021.06.25 Y
director
Outside
Sichuan Huashi Group Co., Ltd. 2015.08.10 - Y
Director
Independent
Yibing Wuliangye Co., Ltd. 2016.11.18 - Y
director
Deputy
SIMIC Holdings Co., Ltd. 2013.01 2019.12.31 Y
president
SIMIC Development Co., Ltd. Chairman/GM 2014.07 - N
Shanghai Hefa Enterprise Management Partner / legal
2016.05 2019.04.19 N
Partnership (Limited Partnership) representative
Shanghai Zhongke Xinwei IT Park Co., Ltd. Chairman 2018.01 - N
Independent
Ren Jia Beijing Inhand Networks Co., Ltd 2017.12.06 - Y
director
Independent
Kingnet Co., Ltd. 2018.05.12 2019.03.18 Y
director
Legal
Shanghai Zhizhe Technology Co., Ltd. 2019.03.19 - N
representative
Executive
Shanghai Zhihe Technology Partnership 2019.4.12 - N
partner
Lu School of Management and Economics of Associate
2001.12.30 - Y
Yingjin UESTC professor
He
Changhong Huayi Compressor Co., Ltd. Director 2018.01.05 2021.05.17 N
Xintan
Deputy
Hongyuan Ground Energy Heat Tech. Co., Ltd. 2017.12 - N
Chairman
Hu
Sichuan Tianyou Guigu Technology Co., Ltd. Director 2018.01 - N
Zhaogui
Chengdu Guigu Environmental Tech. Co., Ltd. Director 2018.06 - N
Sichuan Zhiyijia Network Technology Co., Ltd. Director 2018.01 - N
Pang
Hefei Xingmei Asset Management Co., Ltd. Director 2018.02 - N
Haitao
Post-holding in other unit N/A
(iv) Punishment of securities regulatory authority in recent three years to the company’s current and
outgoing directors, supervisors and senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior executives
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
(i) Decision-making, determine basis and actually payment of remuneration for directors, supervisors and
senior executives
1. Procedure for deciding remunerations of directors, supervisors and senior management
Implemented in line with laws, regulations and relevant rules of ―Company Law‖, ―Article of Association‖ and
―Enforcement Regulation of Remuneration and Evaluation Committee of the Board‖, including:
(1) Allowance plan of independent directors are implemented after deliberated in the Board and approved in
Shareholders‘ General Meeting. Other directors and non-staff supervisors except independent directors are
received no remuneration from the Company.
(2) Remuneration of senior executives are deliberated and approved by the Board according to remuneration
evaluation plan together with opinions of Remuneration and Evaluation Committee.
The remuneration appraisal and payment for directors and senior executive of the Company for Current Year will
disclose in the Annual Report after review without objection from Remuneration & Appraisal Committee of the
Board and submit to the BOD for Current Year.
2. Bases on which remunerations of directors, supervisors and senior management are decided
The Company conducted the performance examination on the task of directors, supervisors and senior executives
according to the HR management policy, wages of directors, supervisors and senior executives are decided by
their performance and evaluations check by the Company. All wages are performing by the evaluation results
according to the only evaluation standard that carried by the Company.
3. Actual payment of remunerations of directors, supervisors and senior management
Allowance of the independent directors are paid by the standards approved in Annual Shareholders‘ General
Meeting, other director, who serves as senior executive at the same time, and non-staff supervisors except
independent directors did not received remuneration from the Company; remunerations for senior executives of
the Company are paid strictly by the unify remuneration valuation mechanism of the Company.
Directors, supervisors and senior executives of the Company has 18 in total up to 31 December 2019, actually 12
person receiving remuneration from the Company, 2 staff supervisors are received their remuneration by actual
positions (non-supervisor post); furthermore, 3 independent directors are received the allowance monthly from the
Company; the Company will pay remuneration to senior executives in line with the performance appraisal by
monthly, quarterly and annual.
During the reporting period, the Company has established the executive compensation and performance
management program for the senior management of 2019 in accordance with the main scope, the responsibilities,
the importance of the management positions of the senior management, and the compensation level of other
relevant company and position, the program includes but not limited to the company's key performance indicator
(KPI) and performance evaluation criteria, procedures and major evaluation system; the major programs and
systems of the reward and punishment; review the performance of duties of the company's senior management and
conduct the annual performance appraisal.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
At the end of Current Year, the Remuneration and Appraisal Committee combined the work report and
self-evaluation of the senior management in 2019, followed the performance evaluation criteria and procedures,
and evaluated the Key Performance Indicator (KPI) of the senior management in 2019; and other relevant
indicators of performance evaluation; proposed the remuneration amount and performance appraisal approach of
the senior management based on the job performance evaluation results and the remuneration policy, and reported
to the Board for approval.
(ii) Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Name Title Sex Age Post status obtained from the obtained from
Company (before related party of
taxes) the Company
Li Wei Former chairman M 47 Office leaving 0 Yes
Wu Dinggang Present chairman M 47 Currently in office 0 Yes
Kou Huameng Director, Deputy president M 50 Currently in office 41.96 No
Shi Qiang Director M 51 Currently in office 0 Yes
Yong Fengshan Director M 51 Currently in office 0 Yes
Zhong Ming Director, Deputy president M 47 Currently in office 32.35 No
Hu Zhaogui Director, Deputy president M 46 Currently in office 38.87 No
Gan Shengdao Independent director M 53 Currently in office 11.90 No
Ren Jia Independent director M 56 Currently in office 11.90 No
Lu Yingjin Independent director M 55 Currently in office 11.90 No
Shao Min Chairman of Supervisory M 37 Currently in office 0 Yes
Huang Hong Supervisor F 49 Currently in office 0 Yes
He Xintan Supervisor M 39 Currently in office 0 Yes
Ji Ge Staff supervisor F 38 Currently in office 23.50 No
Zhu Wenjie Staff supervisor M 32 Currently in office 18.53 No
Liu Hongwei Executive deputy president M 56 Currently in office 49.04 No
Huang Danian Deputy president M 50 Currently in office 32.32 No
CFO (person in charge of
Pang Haitao M 44 Currently in office 32.08 No
finance)
Li Xia Secretary of the Board F 39 Currently in office 28.89 No
Total -- -- -- -- 333.24 --
(iii) Equity incentive authorized for director, supervisor and senior executive in reporting period
161
CHANGHONG MEILING CO.,LTD. Annual Report 2019
□ Applicable √ Not applicable
V. Staff of the Company
Changhong Meiling Co., Ltd. and its controlling subsidiaries owned on-job employees of 14,017 people in total.
There are 58 people in retired are enjoying expenses paid by the Company.
(i) Numbers, professional structure and education background
On-job employee in parent company (people) 3,995
On-job employee in main subsidiary (people) 10,022
Total on-job employees (people) 14,017
Current total payroll(people) 14,017
Number of retired employees with expenses paid by the parent
58
company and main subsidiary (people)
Professional structure
Types of professional category Numbers of professional category (people)
Production staff 8,319
Salesman 2,831
Technician 2,243
Financial staff 235
Administration staff 389
Total 14,017
Education background
Type of education background Numbers (people)
High school and below 9,214
Junior college 2,111
Undergraduate 2,533
Master and above 159
Total 14,017
(ii) Remuneration policy
The Company formulated human resources and compensation policy conducive to sustainable development of
enterprise according to the provisions of relevant laws and policies promulgated by the state and to the Company's
actual situation.
In order to implement the core values of co-creation and sharing, especially to mobilize the work initiative and
enthusiasm of grass-roots employees, the company had a comprehensive review on the incentive plan in 2019,
based on authority with corresponding responsibility, further delegated powers to lower levels, made frontline
decision-making, optimized and established a three-tiered incentive system, i.e. business performance incentives,
value mainline incentives, and event incentive, to improve the business unit‘s operating efficiency and vitality;
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
promoted the development and application of the entire process performance management system, encouraged
employees to develop together with the company, and established a direct link between management and business
performance; supervisor-level KPIs were linked with performance pay; implemented mandatory performance
rankings for professional positions, and guided managers and employees to make performance contributions to the
company‘s development.
The company established and optimized a unified evaluation mechanism for job promotion, set up position
systems and promotion channels, implemented the point system evaluation criteria and internal job competition
mechanism, and incorporated annual evaluation and competition into the normalization, and gradually formed the
employment mechanism of ―those who want to do a job have a chance, those who can do a job have a platform,
and those who get things done have a status‖. At the same time, the company shaped the corporate culture by
providing various holidays, allowances, condolences, and organizing a variety of leisure activities, sports culture
festival, carnivals, etc. so as to improve the employee satisfaction.
(iii) Training plans
Training plan: The Company has established the Human Resources Strategic Layout, Staff Training Management
Program, Credit Management Method, Annual Talent Development & Training Plan and other systems and
standard work flows, set up the staff capacity model, built the knowledge assets management system of
Changhong Meiling and gradually established the growth mechanism by combining the training with the
individual employee development, and combining the qualification promotion with the career development.
1. The mechanism for the selection, education and use of reserve talents gradually presented. In 2019, the
Company established a clear evaluation model for talent standards, promote the construction of talent standards
for management, supervisor level, general manager of domestic sales, and overseas regional managers; focused on
advancing the project for talent construction, and optimized the high-level talent development echelons such as
reserve leaders, reserve cadres, reserve leaders, and outstanding university students, and so on; establish
succession maps for each sequence of talents, and clarify the ability status of existing talent teams and future
talent succession systems.
2. Talent cultivation is more effective in supporting the development of the company. In order to effectively
support the company‘s business policy of ―product leadership, marketing transformation, efficiency improvement,
team activation‖, the company released the Human Resources Strategic Plan of Changhong Meiling, on the one
hand, improve the training enthusiasm and development capabilities of R & D personnel through the project
points-based system, industry exchanges and other activities, on the other hand, aim at the shortcomings of team
and personal ability, and promote accurate training programs, focus on actual working scenes, targeted at the core
talent-oriented push courses, and the training effect gradually appears and the number of talents gradually
increases.
3.The company coordinated the construction of an internal knowledge asset management system, including the
two major contents, i.e. the establishment of ―Meiling School‖ and the bench-marking post knowledge extraction.
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On the one hand, constructed the online knowledge asset management system ―Meiling School‖ for the first time,
comprehensively started and advanced the talent knowledge asset bank of ―Technical School, Management School,
Manufacturing School, and Quality School‖; on the other hand, sorted out, extracted, and internalized and
integrated the experience of internal posts into a standardized talent knowledge base for inheritance and influence
by combining the restructuring of ―internal trainer certification system‖ and the introduction of ―bench-marking
post knowledge extraction project‖.
(iv) Labor outsourcing
□ Applicable √ Not applicable
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Section X. Corporate Governance
I. Corporate governance of the Company
(i) Overview of the corporate governance
In strict compliance with the Company Law, Securities Law, Governance Principles of Listed Company issued by
the CSRC, and the Rules Governing the Listing of Securities on Shenzhen Stock Exchange (amended in 2018),
the Company continued to construct and perfect its governance structure, thereby forming its decision-making,
supervision and operation management organization with general meeting, the board of directors, the board of
supervisors and operation management as the major structure. The general meeting, board of directors, board of
supervisors and operation management of the Company has definite terms of reference, which can ensure an
effective balance, scientific decision-making process and coordinative operation, laying firm foundation for
making decisions relating to the Company‘s continuous, steady and healthy development.
During the reporting period, the actual situation of corporate governance has been in line with the requirements of
relevant state laws and regulations, and regulatory documents relevant to governance of listed companies issued
by China Securities Regulatory Commission and Shenzhen Stock Exchange.
1. Shareholders and general meeting
The Company standardized the procedures concerning convening, holding and voting of general meeting in strict
compliance with the Articles of Association and Rules of Procedure of General Meeting. All shareholders,
especially the minority shareholders, were equally treated to ensure all shareholders shall rank equal status and
can fully exercise their right. During the reporting period, the Company convened shareholders general meetings.
In addition to convening general meeting in forms of site conference, the Company offered convenience for
shareholders to present general meeting via network voting which was safe, economic and convenient. At the
same time, all the matters submitted to the Company‘s general meeting of shareholders should count the votes of
the small and medium investors separately, and the results of the vote count should be disclosed timely so as to
effectively protect the rights and interests of small and medium investors and ensure that all shareholders,
especially the small and medium shareholders, fully exercise their rights.
2. The Company and controlling shareholders:
The Company has independent business and independent management capability. The Company and its
controlling shareholders owe independent business, personnel, assets, organs and finance. During the period,
controlling shareholder abide by requirement of Article of Association and Management System of Related
Transactions, strictly regulate their behaviors, and no controlling shareholder has directly or indirectly intervened
in the Company‘s policy-making and business activities beyond the general meeting of stockholders, no capital or
assets of the Company occupied by controlling shareholder and its affiliates either.
3. The directors and board of directors
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Board Meeting are revoke and open in line with the regulation of Company Law and Article of Association
strictly, voting and information disclosure procedures appliance with relevant rules. All directors of the Company
carry out work according to ―Rules of Procedure of the Board‖ and ―Independent Director System‖, seriously
attend the board of directors and shareholders‘ meeting, exercise obligations by the law and faithfully perform
their duties vigorously, positively participate in trainings of related knowledge open by Shenzhen Stock Exchange
and Securities Bureau, and get familiar with related laws and regulations. Independent directors follow close to
the line of Instruction of Setting Up Independent Directors System in Listed Companies and Independent Director
System, take an active part in decision-making of the Company and present a prior approval and independent
opinions for related transactions and major events, bring out the functions of independent directors.
In the Period, Board of the Company setting up four special committees including strategy, remuneration and
appraisal, audit and nomination, each special committee respectively undertakes the functions of discussion,
policy making, supervision and assessment according to the relevant working instruction, and plays important role
in improving the scientific decision-making, decision-making efficiency and quality for the Board.
4. Supervisors and board of supervisors
The Company convened and held meeting of supervisors in strict compliance with the Company Law and Articles
of Association, and the voting and information disclosure procedures of supervisors‘ meeting complied with
relevant requirements. The 9th session of board of supervisors consisted or five supervisors, two of whom are staff
supervisor, the number and constitution of which met applicable laws and regulations. Our supervisors can
carefully performed their duties including presenting at general meeting and meeting of the board of directors in
accordance to the Rules of Procedures of Board of Supervisors, to exercise supervision over the board of
directors‘ decision-making procedures, subjects to be proposed and our operation in law, to review the periodic
reports prepared by the Board and form written audit opinion in respect thereof and to make effective supervision
over our material transactions, connected transaction, financial position as well as the legality and compliance of
the performance by directors and senior management and issue independent opinions in respect thereof.
5. The performance appraisal and incentive and constraint mechanism
The Company owes and continues to improve fair-ness and transparency performance appraisal standards and
incentive and constraint mechanism for directors, supervisors and senior management, the engagement of
managers of the Company is open and transparent and meets the provisions of laws and regulations.
6. The stakeholders
The Company fully respects and maintains the legitimate rights and interests of stakeholders; strengthen
communication and negotiation with each other, realizes the coordination and balance of interests for all parties
including society, shareholders, company and staff, pushes forward the sustainable, steady and harmonious
development of the Company together.
7. The information disclosure and transparency
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During the Period, the Company strengthens management of information disclosure, performs the duty of
information disclosure in strict accordance with the rules of related laws and regulations, Rules Governing the
stock listed on Shenzhen Stock Exchange (2018 Reversion) and ―Management System of Information Disclosure‖,
and appoints Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) for information disclosure medial; as for the major un-disclosed inside information,
exercise strictly confidential procedures and controlling persons with inside information kowned. The Company
perform duty in aspect of truthfully, accurately, timely and completely discloses information, ensures all investors
obtain the Company‘s information equally and other legal interest.
8. Investor relations management
The Company has seriously done the job of the investor relations management in accordance with the
requirements of the "Investor Relations Management System" and "Reception and Promotion system" during the
Period. Received the consultation and research of the professional institutional investors to the company, checking
records for visitors and signing letter of commitment, disclosed the "investor relations activities record" timely.
At the same time, communicated with the investors through the "interact easily" platform of Shenzhen Stock
Exchange Investor Relations; seriously received the suggestion and opinions from investors, protect interest of the
minority investors, earnestly accepted and replied the calls, faxes, and emails from the investors; cautiously dealt
with the media coverage.
(ii) Is there any difference between the actual condition of corporate governance and relevant regulations
about corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC.
II. Independent of the Company relative to controlling shareholders’ in aspect of businesses, personnel,
assets, organization and finance
The Company totally separated in business, personnel, assets, institutions and financial aspects from Sichuan
Changhong (controlling shareholder), with independent business accounting, responsibility and risk and
independent business operation capability.
1. The business: the Company has an independent and complete business as well as operation ability, with
specialized procurement, production, technology, marketing, management, human resources and other
departments. We autonomously manage and operate business on our own. While the management staff are
independent from controlling shareholders and their subordinate enterprises. The Company is free from
interference by controlling shareholders and other affiliates, and there is no dependence on controlling
shareholders and other affiliates.
2. The personnel: personnel, labor, personnel and salary of the Company are completely independent. President,
vice president, person in charge of finance, Secretary of the board of directors and other senior management
personnel are working in the Company and receive salary, not receiving any remuneration and holding position of
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any except directors, supervisors in the controlling shareholder and its subordinate enterprises.
3. Assets: the Company owns places of production and management independent from its controlling shareholder,
owns complete assets structure, independent production system, auxiliary production systems and supporting
facilities, land use rights, ownership of houses and other assets, and independent purchase and sales system. No
assets occupied by controlling shareholders and other affiliates.
4. Institutions: the Company established organization completely independent from controlling shareholders; the
general meeting, board of directors, board of supervisors and the internal organization are capable of taking
independent action, with no controlling shareholder intervention of corporation's decision-making behavior. The
Company strengthen the power restriction system via general meeting, the Board, supervisory committee,
independent directors and vary committees, formulated an effective structure for corporate governance.
5. Financial aspects: the Company set up independent financial management, and independent accounting system
and financial management system, independently setting up banking account and tax declaration.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and extraordinary
shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Ratio of
Date of
Session of meeting Type investor Date Index of disclosure
disclosure
participation
First Extraordinary Juchao Website—(http://www.cninfo.com.cn)
Extraordinary
General Meeting of 32.2110% 2019-2-22 2019-2-23 ―Resolution Notice of First extraordinary
General Meeting
2019 general meeting of 2019‖ No.: 2019-012
Juchao Website—(http://www.cninfo.com.cn)
AGM of 2018 AGM 32.4336% 2019-5-21 2019-5-22 ―Resolution Notice of Annual General
Meeting of 2018‖ No.: 2019-035
Second
Juchao Website—(http://www.cninfo.com.cn)
Extraordinary Extraordinary
33.06% 2019-7-25 2019-7-26 ―Resolution Notice of Second extraordinary
General Meeting of General Meeting
general meeting of 2019‖ No.: 2019-047
2019
Third Extraordinary Juchao Website—(http://www.cninfo.com.cn)
Extraordinary
General Meeting of 35.44% 2019-9-26 2019-9-27 ―Resolution Notice of Third extraordinary
General Meeting
2019 general meeting of 2019‖ No.: 2018-067
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Fourth Extraordinary Juchao Website—(http://www.cninfo.com.cn)
Extraordinary
General Meeting of 33.1795% 2019-12-17 2019-12-18 ―Resolution Notice of Fourth extraordinary
General Meeting
2019 general meeting of 2019‖ No.: 2019-087
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
(i)The attending of independent directors to Board meetings and general meeting
The attending of independent directors
Times of Absent the Times of
Times of
Board meeting Times of Times of Meeting for attending the
Independent attending by Times of
supposed to present in entrusted the second shareholder
director communicatio Absence
attend in the person presence time in a row general
n
report period (Y/N) meeting
Gan Shengdao 17 1 16 0 0 N 1
Ren Jia 17 1 16 0 0 N 2
Lu Yingjin 17 1 16 0 0 N 2
Explanation of absent the Board Meeting for the second time in a row:
No independent directors absent the Board Meeting for the second time in a row.
(ii) Objection for relevant events from independent directors
Whether independent directors come up with objection about company‘s relevant matters or not
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
(iii) Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√ Yes □ No
Explanation on recommendations adopted or un-adopted:
During the report period, the independent directors of the 8th session of the Board, Mr. Gan Shengdao, Mr. Ren Jia
and Mr. Lu Yingjin, faithfully performed their duties, and prudently, earnestly and diligently exercised their rights
as independent directors in strict accordance with ―Corporation Law‖, ―Securities Law‖, ―Guidance on the
Establishment of Independent Director System in Listed Companies‖ of China Securities Regulatory Commission,
―Stock listing Rules‖(Revised in 2018) of Shenzhen Stock Exchange, ―Articles of Association‖, ―Independent
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Director System‖, ―Annual Report Working System of Independent Director‖, and rules of related laws and
regulations, not influenced by the major shareholders, actual controllers, or other units and individuals having a
stake in the Company, actively attended the general meeting of shareholders and board meeting, made
independent opinions on related matters, gave reasonable suggestions to the production and management and the
business development of the Company, gave full play to the role as independent directors, and maintained the
legitimate rights and interests of shareholders of the Company, especially the medium and small shareholders.
In reporting period, independent directors propose opinions on the Board, and details of suggestions as:
Dated Items Agree/against Disclosure index
Independent opinion on Resignation of President and
the Authorization of Mr. Kou Huameng (Director and Juchao
2019-01-11 Agreed
deputy President of the Company) to Perform the Website(www.cninfo.com.cn)
Duties of the President
Independent opinion on relevant proposal of the 19th Juchao
2019-01-29 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 20th Juchao
2019-03-27 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 21st Juchao
2019-04-19 Agreed
session of 9th BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 22nd Juchao
2019-04-26 Agreed
session of 9th BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 24th Juchao
2019-07-08 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 25th Juchao
2019-08-15 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on Capital Increase for Sichuan
Zhiyijia Network Technology Co., Ltd. and Increase Juchao
2019-08-30 Agreed
Daily Related Party Transaction with Zhiyijia Website(www.cninfo.com.cn)
Network Technology
Independent opinion on relevant proposal of the 27th Juchao
2019-09-09 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 28th Juchao
2019-10-17 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 29th Juchao
2019-10-28 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
Independent opinion on relevant proposal of the 31st Juchao
2019-11-29 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
2019-12-06 Independent opinion on Providing Internal Guarantee Agreed Juchao
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
and External Loan to the Overseas Controlling Website(www.cninfo.com.cn)
Subsidiary
Independent opinion on relevant proposal of the 33rd Juchao
2019-12-25 th
Agreed
session of 9 BOD Website(www.cninfo.com.cn)
VI. Responsibility performance of subordinate special committee of the Board in report period
(i) Responsibility performance for strategy committee of the Board
In accordance with the requirements of the relevant laws and regulations of the Company Law and the Listing
Rules of the Shenzhen Stock Exchange and the relevant requirements of the CSRC and the Shenzhen Stock
Exchange, the Strategic Committee under the Board of Directors of the company has strictly followed the
provisions of the Articles of Association and the Working Rules of the Strategic Committee of the Board of
Directors, strictly performed their duties, and offered proposals and carried out positive guides for the company's
strategic development and foreign investments, the specific situation is as follows:
1. On 17 March 2019, the Strategic Committee convened the 5th meeting of the Strategy Committee of the 9th
Board of Directors, deliberated and approved the one proposal as development plans for year of 2019.
According to the Company‘s medium and long term development strategy, the committee members combined
with the macroeconomic situation and industry status and summarized the annual work situation in 2018,
discussed and established the Company‘s business thoughts and business plans in 2019, and further ensured the
realization of the Company‘s medium and long term development strategic targets.
2. On August 28, 2019, the Strategy Committee held the 6th meeting of the Ninth Board Strategy Committee and
reviewed and approved two proposals, i.e. ―Proposal on Increasing Capital in Sichuan Zhiyijia Network
Technology Co., Ltd. and Increasing Daily Related Transactions with it‖ and ―Proposal on Liquidation and
Cancellation of the Subsidiary Meiling Candy Washing Machine Co., Ltd.‖.
(1) Under the industry background of complete set of consumption, scenario-based marketing, and intelligent
home in home appliance market, in order to further utilize Zhiyijia‘s mature smart trading platform, reduce the
company‘s repeated investment in such platform construction, and use the advantages of smart trading platform to
give full play to the synergy advantages of the Company and its controlling shareholder Sichuan Changhong in the
marketing of home appliances, so as to better adapt to market competition and consumer consumption behavior.
The company submitted to the board of directors for approval of the company to increase capital of RMB
29,087,040 yuan (of which 20 million yuan is included in the registered capital and 9,087,040 yuan is included in
the capital reserve) in Zhiyijia Company with its funds, while the other shareholder Sichuan Changhong didn‘t
increase capital this time. At the same time, the company submitted to the board of directors for approval of
increasing the estimated amount totaling 803 million yuan for the related transactions occurred among the
company and its holding subsidiaries with Zhiyijia Company in 2019, such as sales of goods and accepting
services, and increasing the estimated amount totaling 8,526 million yuan for the related transactions occurred
among the company and its holding subsidiaries with Zhiyijia Company in 2020, such as sales of goods and
accepting services. It‘s agreed to submit the proposal to the company‘s board of directors for review.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
(2) In view of the change of the actual controller of Italy Candy Hoover Group S.r.l. (hereinafter referred to as
―Candy Group‖), another shareholder of the company‘s holding subsidiary Meiling Candy Washing Machine Co.,
Ltd. (hereinafter referred to as ―Meiling Candy‖ or ―joint venture‖), due to this change, Meiling Candy suffered
losses. In order to ensure the interests and future development of Meiling Candy and its shareholders, after
friendly negotiations with Candy Group, the company submitted to the board of directors for approval of
liquidating and cancelling Meiling Candy. It‘s agreed to submit the proposal to the company‘s board of directors
for review.
3. On 6 September 2019, the strategy committee held the 7th meeting of the strategy committee of the 9th board of
directors, and reviewed and approved the one proposal as Capital Increase for Sichuan Changhong Group
Finance Co., Ltd and Related Party Transaction.
In view of the fact that Changhong Finance Company has provided high-quality financial services such as
deposits and loans to the company and its holding subsidiaries for many years, in order to further enhance the
company‘s financial business level, increase the company‘s investment and financing ability in the financial
market, expand the company‘s financing scale, and obtain stable financial investment returns, the company
submitted to the board of directors for approval of using its own funds together with Changhong Huayi to
respectively increase capital of 500 million yuan to Changhong Finance Company, with a total capital increase of
one billion yuan, of which 402,998,300 yuan of the Company‘s capital increase of 500 million yuan in Changhong
Finance Company was included in its registration capital, and 97,001,700 yuan was included in its capital reserve,
while Changhong Finance Company‘s former shareholders, Changhong Group and Sichuan Changhong, gave up
their rights to subscribe for capital contributions this time and did not increase capital. It agreed to submit the
matter to the board of directors for consideration.
4. On October 25, 2019, the Strategy Committee held the 8th meeting of the Ninth Board Strategy Committee,
which considered and approved the ―Proposal on Establishing a Sales Branch of the Subsidiary Sichuan
Changhong Air-conditioner Co., Ltd.‖.
According to the business needs of Changhong Air Conditioning, a subsidiary of the company, it‘s recommended
to agree Changhong Air-conditioner to set up ―Sichuan Changhong Air Conditioning Co., Ltd. Baoding Qingyuan
Branch‖ in Qingyuan District, Baoding City, Hebei Province (tentative name, subject to industrial and commercial
registration), and use this branch as the main body of Changhong Air-conditioner‘s local electricity replacing coal
project and ground source heat pump reconstruction project to promote business development. It‘s agreed to
submit the proposal to the company‘s board of directors for review.
5. On December 4, 2019, the Strategy Committee convened the 9th meeting of the Ninth Board Strategy
Committee, which considered and approved the ―Proposal on Investment and Establishment of a Philippine
Subsidiary‖.
According to the company‘s overseas development strategy, in order to further increase the brand awareness of the
company‘s products in Southeast Asian countries and expand the company‘s overseas sales volume of home
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
appliances, it was agreed that the company and five natural persons jointly invest $ 1 million in the Philippines to
establish a new trade-type joint venture subsidiary, CH-Meiling International (Philippines) Inc. (Changhong
Meiling International (Philippines) Co., Ltd., the company name shall be subject to the final approval of the local
competent authority), to engage in the import, wholesale and sales of household appliances and other products.
Among them, the company invested US $ 999,500 with its own funds, accounting for 99.95% of the registered
capital, and the other five natural persons contributed US $ 500 with its own funds, accounting for 0.05% of the
registered capital. It‘s agreed to submit the proposal to the company‘s board of directors for review.
6. On March 16, 2020, the Strategy Committee held the 10th meeting of the Ninth Board Strategy Committee,
which reviewed and approved the Proposal on the Company‘s Development Plan in 2020 and the Proposal on
Capital Increase in Zhongshan Changhong Electric Co., Ltd.
(1) According to the company‘s medium and long-term development strategy, combined with the company‘s
macro environment and industry situation, after analyzing the overall situation of the company‘s work in 2019, it
discussed and established the company‘s 2020 business ideas and plans, and strive to achieve the annual business
goals of 2020.
(2) According to the company‘s overseas development strategy and the business development needs of Zhongshan
Changhong, a wholly-owned subsidiary, in order to supplement the liquidity of Zhongshan Changhong and
quickly reduce the asset-liability ratio, it agreed the company and its wholly-owned subsidiary Changhong
Air-conditioner to increase capital of RMB 150 million to Zhongshan Changhong with its own funds by the
existing shareholding ratio, of which the Company‘s capital increase was 135 million yuan and Changhong
Air-conditioner‘s capital increase was 15 million yuan. After the completion of the capital increase, the registered
capital of Zhongshan Changhong increased to 334 million yuan, and the shareholding ratios of the company and
Changhong Air-conditioner in Zhongshan Changhong remained unchanged, which were 90% and 10%. It‘s agreed
to submit the proposal to the company‘s board of directors for review.
(ii) Responsibility performance for audit committee of the Board
Audit committee of the Board performed its functions of supervision and examination to maintain the
independence of audition in auditing for year of 2019 according to the requirements of related laws and
regulations such as Company Law and Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and
related requirements of Securities Regulatory Commission and Shenzhen Stock Exchange by abiding of Articles
of Incorporation, Implementing Regulations of Audit Committee of Board of the Directors, and Annual Work
Rules of Audit Committee, the details are as follows:
1. On 24 January 2019, the ―Financial Statement Report for year of 2018 and Arrangement of Internal Control
Auditing‖ and ―Un-audited Financial Accounting Statement for year of 2018‖ were deliberated and approved in
8th session of 9th audit committee of the Board. Found more details in ―(II) Responsibility performance for audit
committee of the Board‖ of ―VI. Responsibility performance of subordinate special committee of the Board in
report period‖ carried in ―Section IX. Corporate Governance‖ disclosed in Annual Report 2018, released on
Juchao Website (www.cninfo.com.cn) dated 29 March 2019.
2. On 9 March 2019, the 9th session of 9th audit committee of the Board deliberated the first draft of Annual
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Report 2018, after a preliminary audit opinion issued from Shine Wing CPA (LLP). Found more details in ―(II)
Responsibility performance for audit committee of the Board‖ of ―VI. Responsibility performance of subordinate
special committee of the Board in report period‖ carried in ―Section IX. Corporate Governance‖ disclosed in
Annual Report 2018, released on Juchao Website (www.cninfo.com.cn) dated 29 March 2019.
3. On 17 March 2019, the audit committee held the 10th session of the 9th audit committee of the board o which
reviewed and approved six proposals as "The Company's 2018 Annual Audited Financial Reports", "2018 Internal
Control Audit Report", "Summary report about the company's 2018 annual audit work taken up by Shine Wing
Certified Public Accountants", "Motion on reappointment of the audit institution for 2019 annual financial report
and internal controls and its payment", "Motion on the company to carry out forward foreign exchange transaction
business" and ―Change of the Accounting Standards‖, and agreed to submit the above motions to the board of
directors for consideration.
4. On 17 April 2019, the ―Financial Statement of 1Q of 2019‖ was deliberated and approved in 11th session of 9th
audit committee of the Board, the financial statement present a real, accurate and completed financial status and
operation results of the Company for 1Q of 2019. The financial statements of 1Q of 2019 agree to submit for
approval in the Board.
5. On 5 August 2019, the ―Financial Statement of Semi-annual 2019‖ was deliberated and approved in 12th session
of 9th audit committee of the Board, the financial statement present a real, accurate and completed financial status
and operation results of the Company for semi-annual of 2019. The company's semi-annual financial report for
2019 was not audited. The financial statements of semi-annual 2019 agree to submit for approval in the Board.
6. On 15 October 2019, the ―Financial Statement of 3Q 2019‖ was deliberated and approved in 13th session of 9th
audit committee of the Board, the financial statement present a real, accurate and completed financial status and
operation results of the Company for 3Q of 2019. The financial statement of 3Q 2019 agree to submit for approval
in the Board.
7. On 20 January 2020, the ―Financial Statement Report for year of 2019 and Arrangement of Internal Control
Auditing‖ and ―Un-audited Financial Accounting Statement for year of 2019‖ were deliberated and approved in
14th session of 9th audit committee of the Board, the un-audited financial statement presented an objectified
financial status and operation results for year of 2019 basically.
8. On 9 March 2020, the audit committee held the 15th session of the 9th audit committee after the Shine Wing
Certified Public Account (LLP) issued preliminary audit opinion. Reviewed the auditing draft of financial report
for year of 2019, proposed specific opinions; members of audit committee communicated with certified public
accountant who was responsible for audition of the company, the certified public accountant who was be
responsible for annual audition of the company reported related matters and adjusted matters during the audition
to the audit committee, and matters of the company needs to be adjusted have been adjusted according to
adjustment opinions of the certified public accountant who was responsible for annual audition. The audit
committee read the first draft of audited financial accounting statements for 2019 of the company according to
audition condition known from certified public accountant who was responsible for annual audition and
production operation condition and financial performances reported by management level of the company,
considered that the annual financing accounting statements for 2019 audited preliminarily by the Shine Wing
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Certified Public Account can truly, correctly and completely reflect the operation condition of the company, and
confirmed the preliminary audit opinions of financing accounting statements of the company issued by the Shine
Wing Certified Public Account.
9. On 16 March 2020, the 16th session of the 9th audit committee of the Board deliberated and approved the
followed five proposals as‖ Audited Financial Statement Report of 2019‖, ―Auditing Report of Internal Control
for year of 2019‖, Summary Report on Auditing Works for year of 2019 from Shine Wing Certified Public
Account‖, ―Auditing Institution for Financial Report of 2020 and Internal Control Auditing Re-engagement and
Remuneration Paid‖, and ―Opening Business of Forward Exchange‖, and agreed to submit these auditing
institutions to board of the directors of the Company for deliberation.
(iii) Responsibility performance for nominations committee of the Board
The nominations committee under the board of directors practically performed their duties on the basis of
requirements of laws and regulations of ―Company Law‖ and ―Rules Governing the Listing of Stocks on Shenzhen
Stock Exchange‖ and related requirements of China Securities Regulatory Commission and Shenzhen Stock
Exchange, and in strict accordance with ―Articles of Association‖, ―Implementation Rules of Nominations
Committee of the Board‖, in the reporting period, the nominations committee reviewed and made
recommendations to the engaged senior management that needed to be submitted to the board for consideration
and nomination.
1. On 9 Jan. 2019, the nomination committee held its 6th meeting of the nomination committee of the 9th board of
directors, deliberated and approved proposal of acting as the chairman by the director and deputy president Mr.
Kou Huameng. In view of the resignation of president - Mr. Wu Dinggang, the Company agreed to authorized
director and deputy president Mr. Kou Huameng acting as the Chairman of the Company;duration of the acting
period will end till the new president appointed since 11 Jan. 2019, and submitted to the board of directors for
deliberation.
2. On 24 April 2019, the nomination committee held its 7th meeting of the nomination committee of the 9th board
of directors, deliberated and approved two proposal of qualification auditing for the chairman elected as 9th BOD
and qualification auditing for the non-independent director elected as 9th BOD.
In view of the resignation of former president Mr. Li Wei due to work causes, he has resigned the post as president
and director etc. of the 9th BOD of the Company. In line with the needs of operation management, and complete
the by-election work for vacancy of president as soon as possible, after reviewed by the nomination committee of
the Board, Mr. Wu Dinggang was suggested to serves as the president of 9th BOD of the Company by election,
office term same as the 9th BOD‘s. Meanwhile, in view of the Mr. Zhong Ming, recommend by the controlling
shareholder - Sichuan Changhong, as a candidate of non-independent director of 9th BOD, after approval, Mr.
Zhong Ming was agreed to nominated as the non-independent director of 9th BOD of the Company by nomination
committee, office term same as the 9th BOD‘s.
(iv) Responsibility performance for remuneration and appraisal committee of the board
In line with relevant laws and regulation of Company Law and ―Rules Governing the Listing of Stocks on
Shenzhen Stock Exchange‖ as well as requirement from CSRC and Shenzhen Stock Exchange, remuneration and
appraisal committee of the Board, strictly follow rules of ―Article of Association‖ and ―Implementation Rules of
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
remuneration and appraisal committee of the Board‖, in the reporting period, the committee proposed suggestions
on the performance evaluation standards and incentive & restraint mechanism for directors, supervisors and senior
executives, and review the appraisal and remuneration of directors, supervisors and senior executives, accrual and
distribution for performance incentive fund included. More details are as:
1. On 19 March 2019, the 2nd meeting of the Remuneration and Appraisal Committee of the 9th Board of Directors
was convened. The meeting reviewed and approved the "Appraisal and Payment of Remuneration of Directors
and Senior Executives in Current Year 2018", and carried out follow opinions:
The committee assessed and reviewed the remunerations and payment status of the Company‘s directors and
senior executives in 2018, and considered that the allowances received by the independent directors of the
Company should be paid at the allowance rate approved by the general meeting of shareholders; the
remunerations received by the Company‘s senior executives from the Company should be strictly based on the
Company‘s remuneration and assessment system, the remuneration information disclosed by the Company was
truthful, accurate, and complete and conformed to requirements of ―Content and Format Norm for Information
Disclosure of Companies Publicly Issuing Securities No. 2 - Content and Format of Annual Report (Revised in
2017)‖ of China Securities Regulatory Commission
The Board of Directors of the Company reviewed and passed the remuneration assessment and payment matters
of the directors and senior executives in the Company‘s 2018 annual report based on the remuneration assessment
status of senior executives of the Company and the opinions of the remuneration and appraisal committee.
2. On 16 March 2020, the remuneration and appraisal committee of the 9th Session of Board of Directors
convened the 3rd meeting which reviewed and approved the ―Remuneration Assessment and Payment of Directors
and Senior Executives of the Company in 2019‖ and issued the following review opinions:
The committee assessed and reviewed the remunerations and payment status of the Company‘s directors and
senior executives in 2019, and considered that the allowances received by the independent directors of the
Company should be paid at the allowance rate approved by the general meeting of shareholders; the
remunerations received by the Company‘s senior executives from the Company should be strictly based on the
Company‘s remuneration and assessment system, the remuneration information disclosed by the Company was
truthful, accurate, and complete and conformed to requirements of ―Content and Format Norm for Information
Disclosure of Companies Publicly Issuing Securities No. 2 - Content and Format of Annual Report (Revised in
2017)‖ of China Securities Regulatory Commission
The Board of Directors of the Company reviewed and passed the remuneration assessment and payment matters
of the directors and senior executives in the Company‘s 2019 annual report based on the remuneration assessment
status of senior executives of the Company and the opinions of the remuneration and appraisal committee.
VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory
committee
□Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Appraisal and incentive to senior management
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
(i) Evaluation mechanism for senior executives of the Company
The Company formulated ―Implementation Rules of Remuneration and Appraisal Committee of the Board‖, the
remuneration and appraisal committee established 2019 annual compensation and performance management plan
for the senior management of the Company in accordance with the main scope, responsibilities, importance of
their management positions and the remuneration level of other relevant enterprises and positions; the plan
included but not limited to key performance indicator (KPI), performance appraisal standards, procedures and
major programs and systems of main appraisal system, reward and punishment; investigated the execution of duty
of the senior management and implemented annual performance appraisal to them. After reviewed by the
committee, submit to the Board for approval.
At the end of Current Year, combined with the senior management‘s working reports and self-evaluation of 2019,
and according to the performance evaluation criteria and procedures, the Compensation and Appraisal Committee
has carried out performance appraisal to the senior management‘s key performance indication (KPI) in 2019 and
other related indicators; proposed the remuneration amount and performance assessment methods for senior
management according to the job performance evaluation results and remuneration distribution policy, and
reported to the Board of Directors for approval.
(ii) Establishment and implementation of performance incentive mechanism
The Company formulated a mid-long term incentive and restraint mechanism, that is ―Implementation Plan of
Annual Performance Incentive Fund‖ in 2012, on 9 August 2012 and 28 August 2012, the Plan was deliberated
and approved in 16th meeting of 7th session of the Board and 2nd extraordinary general meeting 2012. Details of
the aforesaid event can be found in the announcement (No.: 2012-028 and No.: 2012-035) released on appointed
media Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) dated 10 August 2012 and 29 August 2012. Up November 2017, the annual performance
incentive plan was completed, and we will continue to disclose the follow-up treatment on shares held by
incentive objects; implementation of the annual performance incentive fund found more in ― Implementation of
Annual Performance Incentive Fund‖ of ―XV Implementation of the company‘s stock incentive plan, employee
stock ownership plan or other employee incentives‖ in ―Section V. Important Event‖ carried in the Report.
IX. Internal Control
(i) Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
(ii) Appraisal Report of Internal Control
Date of evaluation report of internal control disclosed (Full-text) 2020-3-28
Index of evaluation report of internal control disclosed (Full-text) Juchao Website (www.cninfo.com.cn)
The ratio of the total assets of units included in the scope of
evaluation accounting for the total assets on the company's 99.21%
consolidated financial statements
The ratio of the operating income of units included in the scope
of evaluation accounting for the operating income on the 99.16%
company's consolidated financial statements
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
1. Material defect: severally or jointly with other defects, will lead to
material wrong reporting in financial reports being not able to prevented or
found or rectified in a timely manner. Occurrence of the followings will be
deemed as material defect:
1. inefficiency of environment control;
2. fraud of directors, supervisors and senior management;
3. The external auditor finds material wrong reporting in current financial
statement, while the Company has not found such reporting during its
operation;
4. The material defect identified and reported to the management fails to be
rectified in a reasonable time period; Occurrence of the followings shall be
5. The audit committee and audit department of the Company exercise deemed as material defect, otherwise as
invalid supervision upon internal control; major defect or general defect subject to
6. Other defects which may affect financial statement users to make correct the level of influence.
judgment. 1. breach of national laws, regulations or
2. Major defect: severally or jointly with other defects, will lead to wrong regulatory documents;
reporting in financial reports being not able to prevented or found or rectified 2. procedure for making significant
in a timely manner which still needs attention from the management though it decisions is not scientific;
Qualitative criteria doesn‘t reach or exceed material defect as described above. Occurrence of the 3. absence of system may lead to invalid
followings will be deemed as major defect: system;
4. Material or major defects are not likely
(1) Financial losses caused by guaranteeing and investing in securities and
to rectify;
financial derivatives transactions and disposing property right and stock right
5. Large negative effects on the company
without authorization;
and disclosed in the form of
(2) The company's financial staff or other relevant business personnel have
announcement;
unclear powers and responsibilities or job chaos, or are suspected of being
6. Other issues that materially affect the
involved in economic or job-related crimes and have been transferred to the
Company.
judiciary;
(3) Punishment or severely negative impacts on the company's image due to
the bias implementation of the policy or accounting errors, etc.;
(4) Financial losses caused by destroying, concealing, or altering the
important original evidences at will, such as invoices and checks, etc.
(5) Cash income is not entered into the account book, or public funds are
deposited in private account or "private coffer" is established by breaking the
rules.
3. General defect: other internal control related defects that do not constitute
material defects or major defect.
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
1. Proportion of direct property loss in
total operating income: Material defect:
wrong reporting ≧0.1%; Major defect:
0.05% ≤ wrong reporting＜0.1%; General
1. Proportion of potential wrong reporting in total operating income:
defect: wrong reporting＜0.05%.
Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong
2. Proportion of direct property loss in
reporting＜0.5%; General defect: wrong reporting＜0.1%.
total profit: Material defect: wrong
2. Proportion of potential wrong reporting in total profit: Material defect: reporting ≧10%; Major defect: 5% ≤
wrong reporting ≧10%; Major defect: 5% ≤ wrong reporting＜10%; General wrong reporting＜10%; General defect:
defect: wrong reporting＜5%. wrong reporting＜5%.
Quantitative standard
3. Proportion of potential wrong reporting in total assets: Material defect: 3. Proportion of direct property loss in
total assets: Material defect: wrong
wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong reporting＜0.5%;
reporting ≧0.2%; Major defect: 0.1% ≤
General defect: wrong reporting＜0.1%. wrong reporting＜0.2%; General defect:
4. Proportion of potential wrong reporting in total owners’ equity:
wrong reporting＜0.1%.
Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong
4. Proportion of direct property loss in
reporting＜0.5%; General defect: wrong reporting＜0.1%.
total owners’ equity: Material defect:
wrong reporting ≧0.2%; Major defect:
0.1% ≤ wrong reporting＜0.2%; General
defect: wrong reporting＜0.1%.
Amount of significant defects in financial reports 0
Amount of significant defects in non-financial reports 0
Amount of important defects in financial reports 0
Amount of important defects in non-financial reports 0
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberation section of auditing report of IC
We consider that: in all major aspects, Changhong Meiling Co., Ltd. has efficiency in financial report of internal control dated 31
December 2019 according to Basic Standards of Internal Control for Enterprise and relevant regulations.
Disclosure details of audit report of internal control Disclosed
Disclosure date of audit report of internal control (full-text) 2020-3-28
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Index of audit report of internal control (full-text) Juchao Website (www.cninfo.com.cn)
Opinion type of auditing report of IC Standard unqualified
whether the non-financial report had major defects No
Whether CPA carries out qualified opinion for audit report of internal control or not
□Yes √ No
Whether the opinions are consistent in audit report of internal control carrying out by CPA and the self-evaluation
report of the Board or not
√ Yes □ No
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section XI. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without
due on the date when annual report approved for released or fail to cash in full on due
□Yes √No
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Section XII. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Date for signing the report 2020-3-26
Name of audit institute Shine Wing Certified Public Accountants (LLP)
Serial of Auditing Report XYZH/2020CDA40020
Name of CPA Li Xifu, Xia Cuiqiong
Auditor’s Report
XYZH/2020CDA40020
To Shareholders of Changhong Meiling Co., Ltd.:
I. Auditor’s opinion
We, as the auditors, audited the financial statements of Changhong Meiling Co., Ltd. (the ―Company‖), which
included the consolidated balance sheet as of 31 December 2019, the consolidated statement of income, the
consolidated statement of cash flow and the consolidated statement of changes in equity of the Company for
Current Year ended 31 December 2019, together with the relevant notes thereto.
We are the view that the attached financial statements are prepared in accordance with the Business Accounting
Standards in all material aspects, which reflect fairly the consolidated financial position of the Company as of 31
December 2019 and the operating results and cash flow of the Company for Current Year of 2019.
II. Basis for audit opinions
We conducted this audit under the requirements of the Auditing Standards of the Certified Public Accountant of
the PRC. The section headed ―Certified Public Accountant‘s responsibility for audit of financial statement‖ in the
audit report has further clarified our responsibilities under these standards. Pursuant to the code of professional
conduct as certified public accountant in the PRC, we are independent of the Company and have performed other
responsibility as required by our professional ethics. We believe that the audit evidence obtained by us is
sufficient and adequate, which provides foundation for us to issue audit opinion.
III. Key audit issues
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. The key audit matter we identified is as follows:
1.Recognition of revenue
Please refer to note (iv) 24 and note (vi) 37.
Key audit matters Audit address
Main auditing procedures for revenue recognition are including:
1) know and test the cycle internal control of sales and collection,
to assess the design and effectiveness of the internal control;
2) understand the business substance, inspect significant sales
contract and the corresponding sales invoice, on a random basis,
receipt of notes, delivery information confirmed through systems,
Sales revenue of the Company was mainly verify that whether revenue was recognized upon satisfaction of
sourced from sales of refrigerator, air required conditions and whether the revenue recognition was made
conditioner, small household appliances and in right timing, and verify that whether profit was adjusted through
kitchen and washing machines to both aggressive sales policy;
domestic and overseas customers. As indicated
3) Carry out supervision and other procedures to the important
in note (vi) 37 of the financial statement -
inventory at end of the period, well-known the progress of the
Operating income and cost, the operating
contracts and follow up the abnormal situations found in
income was RMB 16,553,252,894.93 in 2019.
Since the truthfulness and completeness of inspection;
revenue recognition has material impact on 4) Conduct inquiry through issue of letters, and carry out
operating results, Therefore, the recognition of additional audit procedures for the items for which reply was
operating income will consider as the key audit abnormal;
matters.
5) review collection of trade receivables, confirm the conformity
between the entities owing receivables and name of customers to
verify whether there was collection of receivables from third
parties, to review the truthfulness of the collection and revenue;
6) review collection of receivables in subsequent period;
7) make cut-off test and analysis re-review on revenue.
2.Capitalization of development expense
Please refer to note (iv) 18 and note (vi) 15
Key audit matters Audit address
The development expense occurred for 1) Understand the key control of capitalization of development
expenditures, implement internal control audit procedures,
research and development of non-patent
understand the scope and accounting methods of development
technology in 2019 was RMB 128,970,096.82,
expenditures, understand and make research and development on
which was capitalized and accounted for as
related control systems and processes, and test the effectiveness of
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
development expense in the consolidated relevant internal control design and operation;
financial statement. Development expense 2) Implementation: compare the developed projects in intangible
could only be capitalized upon satisfaction of assets with machinery models for external sales, and re-verify the
truthfulness of capitalization of completely developed projects
all the capitalization conditions set out in note
3) Dual purpose testing: inspect the project reports and inspection
(iv) 18 to the financial statement. Since to
and acceptance reports formed during the research and
confirm whether all the capitalization
development and commercialization of developed products, and
conditions are met requires the management to
judge the sufficiency of basis for accounting of development
make significant judgment and estimate, we expense
deem this matter important in the context of
our audit. Therefore, the capitalization of
development expenditure will consider as the
key audit matters.
IV. Other information
The management of Changhong Meiling Co., Ltd. (the ―Management‖) is responsible for other information which
includes the information covered in the Company‘s 2019 annual report excluding the financial statement and our
audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do not
issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in other
information. In t his regards, we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company‘s ability to
continue as a going concern, disclosing matters related to going concern and using the going concern assumption
unless the management either intends to liquidate the Company or to cease operations, or has no realistic
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
alternative but to do so.
Those charged with governance are responsible for overseeing the Company‘s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management‘s use of the going concern assumption and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company‘s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by the CAS to draw users‘ attention in audit report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor‘s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in the auditor‘s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Chinese CPA: (engagement partner): Li xifu
Shine Wing Certified Public Accountants
(LLP)
Chinese CPA: Xia cuiqiong
Beijing China 26 March 2020
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by Changhong Meiling Co., Ltd.
In RMB
Item 2019-12-31 2018-12-31
Current assets:
Monetary funds 5,499,601,030.64 4,596,077,557.40
Settlement provisions
Capital lent
Tradable financial assets 7,730,268.92
Financial assets measured at fair value and whose
9,253,635.59
changes are included in current gains/losses
Derivative financial assets
Note receivable 1,865,165,499.50 2,387,830,887.74
Account receivable 1,387,961,981.66 1,670,988,644.76
Receivable financing
Accounts paid in advance 25,270,406.37 86,180,459.26
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 97,241,894.80 62,129,574.17
Including: Interest receivable 9,510,208.63 2,653,712.36
Dividend receivable 661,434.48
Buying back the sale of financial assets
Inventories 1,460,910,189.06 2,174,436,573.67
Contractual assets
Assets held for sale
Non-current asset due within one year
Other current assets 63,604,031.96 1,184,686,956.96
Total current assets 10,407,485,302.91 12,171,584,289.55
Non-current assets:
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Loans and payments on behalf
Debt investment
Finance asset available for sales 45,000,000.00
Other debt investment
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 88,556,511.70 61,869,440.55
Investment in other equity instrument
Other non-current financial assets 45,000,000.00
Investment real estate 96,343,760.13 46,846,507.41
Fixed assets 2,180,572,946.87 1,733,957,012.14
Construction in progress 252,494,792.31 464,558,352.60
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 933,248,463.84 817,579,958.94
Expense on Research and Development 101,078,659.57 108,210,966.60
Goodwill
Long-term expenses to be apportioned
Deferred income tax asset 97,453,178.14 112,203,656.75
Other non-current asset
Total non-current asset 3,794,748,312.56 3,390,225,894.99
Total assets 14,202,233,615.47 15,561,810,184.54
Current liabilities:
Short-term loans 1,103,991,045.96 2,336,373,929.62
Loan from central bank
Capital borrowed
Trading financial liability 1,081,534.93
Financial liabilities measured at fair value and whose
55,586,666.70
changes are included in current gains/losses
Derivative financial liability
Note payable 3,490,271,482.40 3,727,754,399.60
Account payable 2,343,116,374.58 2,282,174,981.38
Accounts received in advance 425,149,194.97 354,551,354.80
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Contractual liability
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable 196,507,174.68 163,638,627.79
Taxes payable 68,558,391.66 109,753,432.17
Other account payable 689,477,603.21 660,320,360.26
Including: Interest payable 12,340,385.61 7,519,756.26
Dividend payable 3,579,491.94 17,317,286.45
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 1,708,193.90 273,682,737.85
Other current liabilities
Total current liabilities 8,319,860,996.29 9,963,836,490.17
Non-current liabilities:
Insurance contract reserve
Long-term loans 401,280,000.00 1,920,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable 3,016,921.44 5,017,208.00
Long-term wages payable 13,774,110.61 19,073,101.29
Accrual liability 166,099,143.97 273,063,677.21
Deferred income 179,970,971.92 160,250,963.60
Deferred income tax liabilities 6,256,759.14 3,098,699.11
Other non-current liabilities
Total non-current liabilities 770,397,907.08 462,423,649.21
Total liabilities 9,090,258,903.37 10,426,260,139.38
Owner‘s equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Including: Preferred stock
Perpetual capital securities
Capital public reserve 2,684,366,619.10 2,684,369,598.46
Less: Inventory shares
Other comprehensive income -18,931,430.36 -18,143,569.26
Reasonable reserve
Surplus public reserve 410,786,860.20 400,673,993.50
Provision of general risk
Retained profit 884,127,743.42 904,232,582.87
Total owner‘ s equity attributable to parent company 5,004,947,673.36 5,015,730,486.57
Minority interests 107,027,038.74 119,819,558.59
Total owner‘ s equity 5,111,974,712.10 5,135,550,045.16
Total liabilities and owner‘ s equity 14,202,233,615.47 15,561,810,184.54
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
2. Balance Sheet of Parent Company
In RMB
Item 2019-12-31 2018-12-31
Current assets:
Monetary funds 4,040,632,437.18 2,897,004,041.87
Trading financial assets 5,967,556.00
Financial assets measured at fair value and whose
9,253,635.59
changes are included in current gains/losses
Derivative financial assets
Note receivable 1,722,707,248.74 2,433,243,946.64
Account receivable 1,158,563,389.33 1,050,282,023.37
Receivable financing
Accounts paid in advance 34,374,932.07 58,710,427.38
Other account receivable 41,964,639.42 182,744,033.52
Including: Interest receivable 7,880,186.85 2,653,712.36
Dividend receivable 661,434.48
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CHANGHONG MEILING CO.,LTD. Annual Report 2019
Inventories 339,728,296.66 911,130,106.30
Contractual assets
Assets held for sale
Non-current assets maturing within one year
Other current assets 11,930,690.86 1,113,987,528.70
Total current assets 7,355,869,190.26 8,656,355,743.37
Non-current assets:
Debt investment
Available-for-sale financial assets 45,000,000.00
Other debt investment
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,698,744,114.99 1,731,109,903.70
Investment in other equity instrument
Other non-current financial assets 45,000,000.00
Investment real estate 7,314,721.80 7,618,550.16
Fixed assets 1,138,092,635.67 1,082,915,540.08
Construction in progress 106,575,581.28 125,064,106.10
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 483,887,751.05 462,425,105.64
Research and development costs 56,295,271.74 57,383,653.72
Goodwill
Long-term deferred expenses
Deferred income tax assets 77,849,317.77 78,357,299.17
Other non-current assets
Total non-current assets 3,613,759,394.30 3,589,874,158.57
Total assets 10,969,628,584.56 12,246,229,901.94
Current liabilities
Short-term borrowings 1,009,757,944.82 1,911,719,726.13
Trading financial liability 1,016,052.00
Financial liabilities measured at fair value and whose
19,893,875.00
changes are included in current gains/losses
191
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Derivative financial liability
Notes payable 1,936,867,907.42 2,001,442,110.63
Account payable 1,497,704,307.48 2,011,821,519.82
Accounts received in advance 147,365,864.56 105,815,140.88
Contractual liability
Wage payable 39,633,867.87 31,271,182.48
Taxes payable 20,427,731.13 21,992,129.58
Other accounts payable 520,559,494.30 427,293,961.56
Including: Interest payable 13,175,235.76 5,801,215.14
Dividend payable 3,579,491.94 17,317,286.45
Liability held for sale
Non-current liabilities due within one year 258,588,504.48
Other current liabilities
Total current liabilities 5,173,333,169.58 6,789,838,150.56
Non-current liabilities:
Long-term loans 401,280,000.00 1,920,000.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable 13,774,110.61 19,073,101.29
Accrued liabilities 158,742,319.21 266,641,323.73
Deferred income 67,664,815.53 53,118,676.50
Deferred income tax liabilities 742,725.60
Other non-current liabilities
Total non-current liabilities 642,203,970.95 340,753,101.52
Total liabilities 5,815,537,140.53 7,130,591,252.08
Owners‘ equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 2,753,017,007.10 2,753,017,007.10
192
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 410,568,694.52 400,455,827.82
Retained profit 945,907,861.41 917,567,933.94
Total owner‘s equity 5,154,091,444.03 5,115,638,649.86
Total liabilities and owner‘s equity 10,969,628,584.56 12,246,229,901.94
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
3. Consolidated Profit Statement
In RMB
Item 2019 2018
I. Total operating income 16,553,252,894.93 17,490,174,950.01
Including: Operating income 16,553,252,894.93 17,490,174,950.01
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 16,579,810,406.62 17,455,505,586.22
Including: Operating cost 13,455,692,376.85 14,226,402,020.40
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract
reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 153,065,726.91 138,915,058.61
Sales expense 2,320,362,519.95 2,576,277,169.86
Administrative expense 330,687,143.82 317,917,548.03
R&D expense 334,218,689.69 235,299,398.06
193
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Financial expense -14,216,050.60 -39,305,608.74
Including: Interest expenses 93,523,492.74 101,451,047.10
Interest income 133,568,862.29 127,986,419.36
Add: other income 110,281,102.69 94,938,682.39
Investment income (Loss is listed with ―-‖) -32,695,507.49 3,931,358.68
Including: Investment income on affiliated
-8,049,228.81 -23,357,648.90
company and joint venture
The termination of income recognition for
financial assets measured by amortized cost(Loss is listed
with ―-‖)
Exchange income (Loss is listed with ―-‖)
Net exposure hedging income (Loss is listed with
―-‖)
Income from change of fair value (Loss is listed
52,993,630.16 -45,949,257.12
with ―-‖)
Loss of credit impairment (Loss is listed with ―-‖) 4,633,296.89
Losses of devaluation of asset (Loss is listed with
-30,409,004.57 -39,253,891.46
―-‖)
Income from assets disposal (Loss is listed with
-9,537,945.52 787,721.32
―-‖)
III. Operating profit (Loss is listed with ―-‖) 68,708,060.47 49,123,977.60
Add: Non-operating income 6,479,922.98 6,486,445.70
Less: Non-operating expense 5,409,757.70 21,268,525.58
IV. Total profit (Loss is listed with ―-‖) 69,778,225.75 34,341,897.72
Less: Income tax expense 26,266,024.94 -533,886.62
V. Net profit (Net loss is listed with ―-‖) 43,512,200.81 34,875,784.34
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with
43,512,200.81 34,875,784.34
-‖)
2.termination of net profit (net loss listed with -‖)
(ii) Classify by ownership
1.Net profit attributable to owner‘s of parent company 56,441,479.14 38,658,256.97
2.Minority shareholders‘ gains and losses -12,929,278.33 -3,782,472.63
VI. Net after-tax of other comprehensive income -2,068,017.04 -15,324,313.47
Net after-tax of other comprehensive income attributable
-787,861.10 -10,881,247.24
to owners of parent company
194
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(I) Other comprehensive income items which will not
be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that
re-measured
2.Other comprehensive income under equity
method that cannot be transfer to gain/loss
3.Change of fair value of investment in other
equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be
-787,861.10 -10,881,247.24
reclassified subsequently to profit or loss
1.Other comprehensive income under equity
method that can transfer to gain/loss
2.Change of fair value of other debt investment
3.gain/loss of fair value changes for
available-for-sale financial assets
4.Amount of financial assets re-classify to
other comprehensive income
5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset
6.Credit impairment provision for other debt
investment
7.Cash flow hedging reserve
8.Translation differences arising on translation
-787,861.10 -10,881,247.24
of foreign currency financial statements
9.Other
Net after-tax of other comprehensive income attributable
-1,280,155.94 -4,443,066.23
to minority shareholders
VII. Total comprehensive income 41,444,183.77 19,551,470.87
Total comprehensive income attributable to owners
55,653,618.04 27,777,009.73
of parent Company
Total comprehensive income attributable to minority
-14,209,434.27 -8,225,538.86
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0540 0.0370
(ii) Diluted earnings per share 0.0540 0.0370
195
CHANGHONG MEILING CO.,LTD. Annual Report 2019
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before
combination while 0 Yuan achieved last period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
4. Profit Statement of Parent Company
In RMB
Item 2019 2018
I. Operating income 9,296,448,243.29 9,527,195,962.62
Less: Operating cost 8,437,561,503.10 8,403,695,872.50
Taxes and surcharge 76,143,013.23 60,224,004.51
Sales expenses 519,213,849.71 795,840,509.28
Administration expenses 135,073,396.64 139,521,280.49
R&D expenses 124,622,622.12 100,055,433.15
Financial expenses 3,761,368.95 3,339,104.39
Including: interest expenses 75,661,399.93 78,111,310.86
Interest income 96,733,624.71 78,419,587.54
Add: other income 71,320,375.50 59,460,881.42
Investment income (Loss is listed with ―-‖) 33,377,287.02 45,078,361.41
Including: Investment income on affiliated
74,962.32 -4,601,912.14
Company and joint venture
The termination of income recognition for
financial assets measured by amortized cost (Loss is listed
with ―-‖)
Net exposure hedging income (Loss is listed with
―-‖)
Changing income of fair value (Loss is listed
15,591,743.41 -8,683,770.89
with ―-‖)
Loss of credit impairment (Loss is listed with ―-‖) 9,455,668.24
Losses of devaluation of asset (Loss is listed with
-17,125,818.42 -13,569,683.39
―-‖)
Income on disposal of assets (Loss is listed with
-736,644.05 -3,459,155.14
―-‖)
II. Operating profit (Loss is listed with ―-‖) 111,955,101.24 103,346,391.71
196
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Add: Non-operating income 907,600.61 3,972,014.46
Less: Non-operating expense 250,826.67 13,050,649.33
III. Total Profit (Loss is listed with ―-‖) 112,611,875.18 94,267,756.84
Less: Income tax 1,250,707.00 -2,177,974.85
IV. Net profit (Net loss is listed with ―-‖) 111,361,168.18 96,445,731.69
(i)continuous operating net profit (net loss listed with
111,361,168.18 96,445,731.69
-‖)
(ii) termination of net profit (net loss listed with -‖)
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not
be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that
re-measured
2.Other comprehensive income under equity
method that cannot be transfer to gain/loss
3.Change of fair value of investment in other
equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(II) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1.Other comprehensive income under equity
method that can transfer to gain/loss
2.Change of fair value of other debt investment
3.gain/loss of fair value changes for
available-for-sale financial assets
4.Amount of financial assets re-classify to
other comprehensive income
5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset
6.Credit impairment provision for other debt
investment
7.Cash flow hedging reserve
8.Translation differences arising on translation
of foreign currency financial statements
9.Other
VI. Total comprehensive income 111,361,168.18 96,445,731.69
197
CHANGHONG MEILING CO.,LTD. Annual Report 2019
VII. Earnings per share:
(i) Basic earnings per share 0.1066 0.0923
(ii) Diluted earnings per share 0.1066 0.0923
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
5. Consolidated Cash Flow Statement
In RMB
Item 2019 2018
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
17,222,030,229.17 15,976,109,415.91
labor services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of
securities
Write-back of tax received 376,209,568.82 513,524,044.20
Other cash received concerning operating activities 172,721,366.51 288,727,912.46
Subtotal of cash inflow arising from operating activities 17,770,961,164.50 16,778,361,372.57
Cash paid for purchasing commodities and receiving
13,458,134,618.83 14,150,885,874.62
labor service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
198
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Cash paid for original insurance contract
compensation
Net increase of capital lent
Cash paid for interest, commission charge and
commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 1,513,839,139.23 1,593,886,073.87
Taxes paid 526,773,134.14 354,788,287.80
Other cash paid concerning operating activities 987,210,287.26 899,361,751.64
Subtotal of cash outflow arising from operating activities 16,485,957,179.46 16,998,921,987.93
Net cash flows arising from operating activities 1,285,003,985.04 -220,560,615.36
II. Cash flows arising from investing activities:
Cash received from recovering investment 3,091,000,000.00 3,440,000,000.00
Cash received from investment income 53,507,866.92 78,170,149.44
Net cash received from disposal of fixed, intangible
20,786,170.96 18,142,337.83
and other long-term assets
Net cash received from disposal of subsidiaries and
other units
Other cash received concerning investing activities 126,761,536.28 132,195,914.39
Subtotal of cash inflow from investing activities 3,292,055,574.16 3,668,508,401.66
Cash paid for purchasing fixed, intangible and other
326,109,415.77 632,592,327.39
long-term assets
Cash paid for investment 2,010,087,040.00 3,944,000,001.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
obtained
Other cash paid concerning investing activities 78,815,580.08 46,837,275.82
Subtotal of cash outflow from investing activities 2,415,012,035.85 4,623,429,604.21
Net cash flows arising from investing activities 877,043,538.31 -954,921,202.55
III. Cash flows arising from financing activities
Cash received from absorbing investment 8,441,064.00 24,865,000.00
Including: Cash received from absorbing minority
8,441,064.00 24,865,000.00
shareholders‘ investment by subsidiaries
Cash received from loans 1,723,227,548.80 3,144,071,966.63
Other cash received concerning financing activities 44,497,902.00
Subtotal of cash inflow from financing activities 1,731,668,612.80 3,213,434,868.63
199
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Cash paid for settling debts 2,820,687,076.56 2,514,013,375.52
Cash paid for dividend and profit distributing or
148,244,143.81 129,757,442.60
interest paying
Including: Dividend and profit of minority shareholder
2,274,030.00 1,364,418.00
paid by subsidiaries
Other cash paid concerning financing activities 32,485,727.87 2,692,486.99
Subtotal of cash outflow from financing activities 3,001,416,948.24 2,646,463,305.11
Net cash flows arising from financing activities -1,269,748,335.44 566,971,563.52
IV. Influence on cash and cash equivalents due to
8,865,099.67 3,387,671.93
fluctuation in exchange rate
V. Net increase of cash and cash equivalents 901,164,287.58 -605,122,582.46
Add: Balance of cash and cash equivalents at the
4,484,643,187.93 5,089,765,770.39
period -begin
VI. Balance of cash and cash equivalents at the period -end 5,385,807,475.51 4,484,643,187.93
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
6. Cash Flow Statement of Parent Company
In RMB
Item 2019 2018
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
8,627,727,420.59 7,727,625,739.70
labor services
Write-back of tax received 197,261,437.46 252,804,115.39
Other cash received concerning operating activities 89,705,595.42 69,407,867.46
Subtotal of cash inflow arising from operating activities 8,914,694,453.47 8,049,837,722.55
Cash paid for purchasing commodities and receiving
7,246,530,970.04 6,922,851,690.83
labor service
Cash paid to/for staff and workers 411,671,230.56 503,716,419.03
Taxes paid 169,363,775.87 70,693,096.67
Other cash paid concerning operating activities 415,890,005.54 375,443,290.96
Subtotal of cash outflow arising from operating activities 8,243,455,982.01 7,872,704,497.49
Net cash flows arising from operating activities 671,238,471.46 177,133,225.06
II. Cash flows arising from investing activities:
200
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Cash received from recovering investment 3,091,000,000.00 3,400,000,000.00
Cash received from investment income 58,097,866.92 79,368,449.44
Net cash received from disposal of fixed, intangible
12,166,744.58 1,977,299.42
and other long-term assets
Net cash received from disposal of subsidiaries and
other units
Other cash received concerning investing activities 383,604,810.26 159,661,646.80
Subtotal of cash inflow from investing activities 3,544,869,421.76 3,641,007,395.66
Cash paid for purchasing fixed, intangible and other
172,239,570.50 230,279,910.34
long-term assets
Cash paid for investment 2,016,087,040.00 3,954,704,000.00
Net cash received from subsidiaries and other units
obtained
Other cash paid concerning investing activities 75,496,976.70 295,811,872.57
Subtotal of cash outflow from investing activities 2,263,823,587.20 4,480,795,782.91
Net cash flows arising from investing activities 1,281,045,834.56 -839,788,387.25
III. Cash flows arising from financing activities
Cash received from absorbing investment
Cash received from loans 1,480,244,977.59 2,292,940,156.01
Other cash received concerning financing activities 184,297,930.63 29,222,628.76
Subtotal of cash inflow from financing activities 1,664,542,908.22 2,322,162,784.77
Cash paid for settling debts 2,249,508,734.86 1,590,083,600.00
Cash paid for dividend and profit distributing or
133,129,179.81 114,844,654.18
interest paying
Other cash paid concerning financing activities 117,503,039.34 472,573,573.53
Subtotal of cash outflow from financing activities 2,500,140,954.01 2,177,501,827.71
Net cash flows arising from financing activities -835,598,045.79 144,660,957.06
IV. Influence on cash and cash equivalents due to
6,329,365.90 2,349,591.64
fluctuation in exchange rate
V. Net increase of cash and cash equivalents 1,123,015,626.13 -515,644,613.49
Add: Balance of cash and cash equivalents at the
2,894,384,811.05 3,410,029,424.54
period -begin
VI. Balance of cash and cash equivalents at the period -end 4,017,400,437.18 2,894,384,811.05
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
201
CHANGHONG MEILING CO.,LTD. Annual Report 2019
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
2019
Owners‘ equity attributable to the parent Company
Other
equity Less
instrument : Reas
Item Provisi Minority Total owners‘
Perp Inve Other onab Ot
on of interests equity
Share capital Pref etual Capital reserve ntor comprehensive le Surplus reserve Retained profit he Subtotal
genera
erred capit Othe y income reser r
l risk
stoc al r shar ve
k secu es
rities
I. Balance at the end of
1,044,597,881.00 2,684,369,598.46 -18,143,569.26 400,673,993.50 904,232,582.87 5,015,730,486.57 119,819,558.59 5,135,550,045.16
the last year
Add: Changes of
-1,023,250.12 -2,734,328.91 -3,757,579.03 -4,385,295.55 -8,142,874.58
accounting policy
Error correction
of the last period
Enterprise
combine under the same
control
Other
II. Balance at the
1,044,597,881.00 2,684,369,598.46 -18,143,569.26 399,650,743.38 901,498,253.96 5,011,972,907.54 115,434,263.04 5,127,407,170.58
beginning of this year
III. Increase/ Decrease in
this year (Decrease is -2,979.36 -787,861.10 11,136,116.82 -17,370,510.54 -7,025,234.18 -8,407,224.30 -15,432,458.48
listed with ―-‖)
202
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(i) Total comprehensive
-787,861.10 56,441,479.14 55,653,618.04 -14,209,434.27 41,444,183.77
income
(ii) Owners‘ devoted and
-2,979.36 -2,979.36 8,143,349.03 8,140,369.67
decreased capital
1.Common shares
8,140,369.67 8,140,369.67
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other -2,979.36 -2,979.36 2,979.36
(III) Profit distribution 11,136,116.82 -73,811,989.68 -62,675,872.86 -2,341,139.06 -65,017,011.92
1. Withdrawal of surplus
11,136,116.82 -11,136,116.82
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
-62,675,872.86 -62,675,872.86 -2,341,139.06 -65,017,011.92
(or shareholders)
4. Other
(IV) Carrying forward
internal owners‘ equity
1. Capital reserves
conversed to capital (share
capital)
2. Surplus reserves
conversed to capital (share
capital)
3. Remedying loss with
surplus reserve
203
CHANGHONG MEILING CO.,LTD. Annual Report 2019
4．Carry-over retained
earnings from the
defined benefit plans
5．Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the
report period
2. Usage in the report
period
(VI)Others
IV. Balance at the end of
1,044,597,881.00 2,684,366,619.10 -18,931,430.36 410,786,860.20 884,127,743.42 5,004,947,673.36 107,027,038.74 5,111,974,712.10
the report period
Last Period
In RMB
2018
Owners‘ equity attributable to the parent Company
Other
equity Less
instrument : Reas
Item Provisi Minority Total owners‘
Perp Inve Other onab Ot
on of interests equity
Share capital Pref etual Capital reserve ntor comprehensive le Surplus reserve Retained profit he Subtotal
genera
erred capit Othe y income reser r
l risk
stoc al r shar ve
k secu es
rities
I. Balance at the end of
1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
the last year
204
CHANGHONG MEILING CO.,LTD. Annual Report 2019
Add: Changes of
accounting policy
Error correction
of the last period
Enterprise
combine under the same
control
Other
II. Balance at the
1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
beginning of this year
III. Increase/ Decrease in
this year (Decrease is -436,745.61 -10,881,247.24 9,644,573.17 -33,662,189.06 -35,335,608.74 13,709,072.79 -21,626,535.95
listed with ―-‖)
(i) Total comprehensive
-10,881,247.24 38,658,256.97 27,777,009.73 -8,225,538.86 19,551,470.87
income
(ii) Owners‘ devoted and
-436,745.61 -436,745.61 23,299,029.65 22,862,284.04
decreased capital
1.Common shares
24,865,000.00 24,865,000.00
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other -436,745.61 -436,745.61 -1,565,970.35 -2,002,715.96
(III) Profit distribution 9,644,573.17 -72,320,446.03 -62,675,872.86 -1,364,418.00 -64,040,290.86
1. Withdrawal of surplus
9,644,573.17 -9,644,573.17
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
-62,675,872.86 -62,675,872.86 -1,364,418.00 -64,040,290.86
(or shareholders)
205
CHANGHONG MEILING CO.,LTD. Annual Report 2019
4. Other
(IV) Carrying forward
internal owners‘ equity
1. Capital reserves
conversed to capital (share
capital)
2. Surplus reserves
conversed to capital (share
capital)
3. Remedying loss with
surplus reserve
4．Carry-over retained
earnings from the
defined benefit plans
5．Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the
report period
2. Usage in the report
period
(VI)Others
IV. Balance at the end of
1,044,597,881.00 2,684,369,598.46 -18,143,569.26 400,673,993.50 904,232,582.87 5,015,730,486.57 119,819,558.59 5,135,550,045.16
the report period
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
206
CHANGHONG MEILING CO.,LTD. Annual Report 2019
8. Statement of Changes in Owners’ Equity (Parent Company)
This Period
In RMB
2019
Other equity
instrument
Item Perpet Less: Other
Capital public Reasonabl
Share capital Preferr ual Inventor comprehensiv Surplus reserve Retained profit Other Total owners‘ equity
reserve e reserve
ed capital Other y shares e income
stock securit
ies
I. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 400,455,827.82 917,567,933.94 5,115,638,649.86
last year
Add: Changes of
-1,023,250.12 -9,209,251.03 -10,232,501.15
accounting policy
Error correction of
the last period
Other
II. Balance at the beginning
1,044,597,881.00 2,753,017,007.10 399,432,577.70 908,358,682.91 5,105,406,148.71
of this year
III. Increase/ Decrease in
this year (Decrease is listed 11,136,116.82 37,549,178.50 48,685,295.32
with ―-‖)
(i) Total comprehensive
111,361,168.18 111,361,168.18
income
(ii) Owners‘ devoted and
decreased capital
1.Common shares invested
by shareholders
2. Capital invested by
holders of other equity
instruments
207
CHANGHONG MEILING CO.,LTD. Annual Report 2019
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution 11,136,116.82 -73,811,989.68 -62,675,872.86
1. Withdrawal of surplus
11,136,116.82 -11,136,116.82
reserves
2. Distribution for owners
-62,675,872.86 -62,675,872.86
(or shareholders)
3. Other
(IV) Carrying forward
internal owners‘ equity
1. Capital reserves
conversed to capital (share
capital)
2. Surplus reserves
conversed to capital (share
capital)
3. Remedying loss with
surplus reserve
4．Carry-over retained
earnings from the defined
benefit plans
5．Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
208
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(VI)Others
IV. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 410,568,694.52 945,907,861.41 5,154,091,444.03
report period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
Last period
In RMB
2018
Other equity
instrument
Item Perpet Less: Other Reasona
Capital public
Share capital Preferr ual Inventor comprehensive ble Surplus reserve Retained profit Other Total owners‘ equity
reserve
ed capital Other y shares income reserve
stock securit
ies
I. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
last year
Add: Changes of
accounting policy
Error correction
of the last period
Other
II. Balance at the beginning
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
of this year
III. Increase/ Decrease in
this year (Decrease is listed 9,644,573.17 24,125,285.66 33,769,858.83
with ―-‖)
209
CHANGHONG MEILING CO.,LTD. Annual Report 2019
(i) Total comprehensive
96,445,731.69 96,445,731.69
income
(ii) Owners‘ devoted and
decreased capital
1.Common shares invested
by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution 9,644,573.17 -72,320,446.03 -62,675,872.86
1. Withdrawal of surplus
9,644,573.17 -9,644,573.17
reserves
2. Distribution for owners
-62,675,872.86 -62,675,872.86
(or shareholders)
3. Other
(IV) Carrying forward
internal owners‘ equity
1. Capital reserves
conversed to capital (share
capital)
2. Surplus reserves
conversed to capital (share
capital)
3. Remedying loss with
surplus reserve
4．Carry-over retained
earnings from the defined
benefit plans
210
CHANGHONG MEILING CO.,LTD. Annual Report 2019
5．Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report
period
(VI)Others
IV. Balance at the end of
1,044,597,881.00 2,753,017,007.10 400,455,827.82 917,567,933.94 5,115,638,649.86
the report period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Yang Jun
211
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
I. Company profile
Changhong Meiling Co., Ltd (hereinafter referred to as ―the Company‖) ，originally named as Hefei Meiling
Co., Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator General
Factory and approved on June 12th 1992 through [WanTiGaiHanZi (1992) No.039] issued by original
Mechanism Reform Committee of Anhui Province. On August 30th 1993, through Anhui Provincial
Government [Wanzhenmin (1993) No.166] and re-examination of China Securities Regulatory Commission,
the Company made first public issue for 30 million A shares and the Company was listed on Oct. 18th, 1993
in Shenzhen Stock Exchange. On August 13th, 1996, the Company was approved to issue 100 million B
shares to investors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory
Commission. The Company went public in Shenzhen Stock Exchange on August 28th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such transfers
with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group Holdings
Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group Holdings Company
Limited (hereinafter abbreviated as Meiling Group) transferred its holding 37,852,683 shares in 82,852,683
state-owned shares of the Company to Sichuan Changhong Electronic Group Co., Ltd (hereinafter
abbreviated as Changhong Group), other 45,000,000 shares to Sichuan Changhong Electric Co. Ltd
(hereinafter abbreviated as Sichuan Changhong). On Aug 15, 2007, the above ownership was transferred and
Cleaning Corporation Limited.
On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui Provincial
Government replied with Document [WGZCQH (2007) No.309] Reply on ―Related Matters of Share Merger
Reform of Meiling Co., Ltd.‖, agreed the Company‘s ownership split reform plan. The Company made
consideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares, and original
Meiling Group made prepayment 3,360,329 shares for some non-tradable share holders as consideration for
split reform plan.
On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other
non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group, the
―Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group‖[HGZCQ(2008) No. 59]
issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal, agrees to
transfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(―Xingtai Holding Co.,‖) for free. On
7 August 2008, the ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by
State-owned shareholders‖ [GZCQ (2007) No. 752] issued by SASAC, agrees the above said transferring.
On October 29, 2008, Changhong Group Company signed Agreement on Equity Transfer of Hefei Meiling
Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of
212
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the Company (accounting for 7.76% in total shares) held by Changhong Group Company. On 23 December
2008, ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned
shareholders‖ [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring.
On 24 December 2010, being deliberated and approved in 32nd Session of 6th BOD and 2nd Extraordinary
Shareholders‘ General Meeting of 2010 as well as approval of document [ZJXP (2010) No. 1715] from
CSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target investors with
issue price of RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after issuing expenses
RMB 22,045,500 deducted, net capital collected amounting to RMB 1,177,954,320, and paid-in capital
(share capital) increased RMB 116,731,500 with capital reserve (share premium) RMB 1,061,106,088.5
increased. The increasing capital has been verified by Capital Verification Report No.:
［XYZH2010CDA6021］issued from Shinwing CPA Co., Ltd.
On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit distribution
plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares held
by shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December
2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. The
capital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification report
WHSZDKYZ (2011) No.141.
On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distribution
and capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plus
two shares for every ten shares to all shareholders capitalized from capital reserve, based on the total share
capital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company upon
implementation of capitalization of capital reserve increased to 763,739,205 shares from 636,449,338 shares,
and was verified by Anhui Anlian Xinda Accounting Firm with the verification report WALXDYZ (2012)
No.093.
On November 18, 2015, considered and approved by the 12th Session of the 8th BOD of the company and the
first extraordinary general meeting in 2016, and approved by the document of China Securities Regulatory
Commission [CSRC License No. (2016) 1396] ―Reply to the approval of non-public offering of shares of
Hefei Meiling Co., Ltd.‖, the company has actually raised funds of 1,569,999,998.84 Yuan by non-public
offering of no more than 334,042,553 new shares at face value of 1 Yuan per share and with issue price no
less than RMB 4.70 per share, after deducting the issue costs of 29,267,276.08 Yuan , the net amount of
raised funds is 1,540,732,722.76 Yuan , the increased paid-in capital (share capital) of 280,858,676.00 Yuan ,
increased capital reserve (share premium) of 1,259,874,046.76 Yuan. This capital increase has been verified
by No.［XYZH2016CDA40272］capital verification report of Shine Wing Certified Public Accountants
(LLP).
213
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Ended as 31 December 2019, total share capital of the Company amounting to 1,044,597,881shares with
ordinary shares in full. Among which, 881,733,881 shares of A-share accounting 84.41% in total shares
while B-share with 162,864,000 shares accounting 15.59% in total shares. Detail share capital as:
Type of stock Quantity Proportion
(I)Restricted shares 10,553,770 1.01%
1. State-owned shares
2. State-owned legal person‘s shares 915,987 0.09%
3. Other domestic shares 8,370,363 0.80%
Including: Domestic legal person‘s shares 4,716,077 0.45%
Domestic natural person‘s shares 3,654,286 0.35%
4. Foreign shares 1,267,420 0.12%
Including: Overseas legal person‘s shares
Overseas natural person‘s shares 1,267,420 0.12%
(II)Unrestricted shares 1,034,044,111 98.99%
1. RMB Ordinary shares 872,447,531 83.52%
2. Domestically listed foreign shares 161,596,580 15.47%
3. Overseas listed foreign shares
4. Others
Total shares 1,044,597,881 100.00%
The Company belongs to the manufacture of light industry, and engaged in the production and sale of
refrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;
Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; Legal
Representative: Li Wei; register capital (paid-in capital): RMB 1,044,597,881; type of company: limited
liability company(joint venture and listed of Taiwan, Hong Kong and Macao) Business Scope: R&D,
manufacture and sales of cooling apparatus, air-conditioner, washing machine, water heater, kitchenware,
home decoration, bathroom, lamps & lanterns, household & similar appliance, injection plastic machine of
computer controlling, plastic products, metalwork, packaging products and decorations as well as the
installation and technical consultant services. Business of self-produced products, technology export and
import-export of the raw& auxiliary materials, machinery equipment, instrument and technology; department
sales and transportation (Excluding dangerous chemicals), computer network system integration, intelligent
product system integration, software development and technical information services, development,
production, sales and service of automation equipment and electronic products, sales services of cold chain
transport vehicles and refrigerator and freezer van, development, production, sales and service of cold chain
insulation boxes, research and development, production, sales and service of cold storage, commercial
freezer chain display cabinets, commercial cold chain products. (Projects that require approval in accordance
214
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
with the law can only be operated after approval by relevant departments)
II. Scope of consolidated financial statement
In the reporting period, the consolidated financial statements of the Company cover 38 subsidiaries,
including Sichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. And
Zhongke Meiling Cryogenic Technology Co., Ltd. etc. Compared with the previous year, during the reporting
period two enterprises are included in the consolidate scope, that is Hefei Meiling Wulian Technology Co.,
Ltd and Anhui Tuoxing Science and Technology Co., Ltd. And the subsidiary Nanchang Xiangyou Electronic
Appliance Marketing Co., Ltd, Changsha Meizlai Electronic Appliance Marketing Co., Ltd and Zhongshan
Hongling Trading Co., Ltd are out of the scope for clearing off.
Found more in ―VII. Changes in the scope of merger‖ and ―VIII. Equity in other entities‖ carry in the
Note
III. Basis for preparation of financial statement
1. Basis for preparation
The financial statements of the Company were prepared in accordance with the actual transactions and
proceedings, and relevant regulation of Accounting Standards for Enterprise released by the Ministry of
Finance, and was on the basis of sustainable operation, and the accounting policy and estimation stated in the
―IV. Significant Accounting Policy and Accounting Estimation‖
2.Continuous operation
The Company recently has a history of profitability operation and has financial resources supporting, and
prepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy and accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard for
Enterprise, and reflects the financial condition, operational achievements and cash flow of the Company
effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. Operation cycle
Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets and
liabilities.
215
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
4. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
5. Accountant arrangement method of business combination under common control and not under common
control
As acquirer, the Company measures the assets and liabilities acquired through business combination under
common control at their carrying values as reflected in the consolidated financial statement of the ultimate
controller as of the combination date. Capital reserve shall be adjusted in respect of any difference between
carrying value of the net assets acquired and carrying value of the combination consideration paid. In case
that capital reserve is insufficient to offset, the Company would adjust retained earnings.
The acquiree‘s net identifiable assets, liabilities or contingent liabilities acquired through business
combination not under common control shall be measured at fair value as of the acquisition date. The cost of
combination represents the fair value of the cash or non-cash assets paid, liabilities issued or committed and
equity securities issued by the Company as at the date of combination in consideration for acquiring the
controlling power in the acquiree, together with the sum of any directly related expenses occurred during
business combination(in case of such business combination as gradually realized through various
transactions, the combination cost refers to the sum of each cost of respective separate transaction). Where
the cost of the combination exceeds the acquirer‘s interest in the fair value of the acquirer‘s identifiable net
assets acquired, the difference is recognized as goodwill; where the cost of combination is lower than the
acquirer‘s interest in the fair value of the acquiree‘s identifiable net assets, the Company shall firstly make
further review on the fair values of the net identifiable assets, liabilities or contingent liabilities acquired as
well as the fair value of the non-cash assets portion of combination consideration or the equity securities
issued by the Company. In case that the Company finds the cost of combination is still lower than the
acquirer‘s interest in the fair value of the acquiree‘s identifiable net assets after such further review, the
difference is recognized in non-operating income for the current period when combination occurs.
6. Measures on Preparation of Consolidated Financial Statements
The Company shall put all the subsidiaries controlled and main body structured into consolidated financial
statements.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within the
combination scope are written-off when preparing consolidated financial statement. Owners‘ equity of
subsidiary not attributable to parent company and current net gains and losses, other comprehensive income
216
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
and total comprehensive income attributable to minority shareholders are recognized as non-controlling
interests, minority interests, other comprehensive income attributable to minority shareholders and total
comprehensive income attributable to minority shareholders in consolidated financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results and
cash flow will be included in consolidated financial statement since the beginning of the period when
combination occurs. When preparing comparative consolidated financial statement, the relevant items in
previous years financial statement shall be adjusted as if the reporting entity formed upon combination has
been existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee under common control acquired through various transactions
which eventually formed business combination, adjustments shall be made as if the current status had been
existing when the ultimate controller commenced control in connection of preparing consolidated financial
statement; in connection with preparing comparative statement, the Company shall consolidate the relevant
assets and liabilities of the acquiree into the Company‘s comparative consolidated financial statement to the
extent not earlier than the timing when the Company and the acquiree are all under control of the ultimate
controller, and the net assets increased due to combination shall be used to adjust relevant items under
owners‘ equity in comparative statement. In order to prevent double computation of the value of the
acquiree‘s net assets, the relevant profits and losses, other comprehensive income and change of other net
assets recognized during the period from the date when the Company acquires original equity interests and
the date when the Company and the acquiree are all under ultimate control of the same party (whichever is
later) to the date of combination in respect of the long-term equity investment held by the Company before
satisfaction of combination shall be utilized to offset the beginning retained earnings and current gains and
losses in the period as the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating results and
cash flow will be included in consolidated financial statement since the Company obtains controlling power.
When preparing consolidated financial statement, the Company shall adjust the subsidiary‘s financial
statement based on the fair value of the various identifiable assets, liabilities or contingent liabilities
recognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee not under common control acquired through various
transactions which eventually formed business combination, when preparing consolidated financial statement,
217
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the Company would re-measure the equity interests held in the acquiree before acquisition date at their fair
value as of the acquisition date, and any difference between the fair value and carrying value is included in
current investment income. in case that the equity interests in acquiree held by the Company before the
relevant acquisition date involves other comprehensive income at equity method and change of other owners‘
equity (other than net gains and losses, other comprehensive income and profit distribution), then the equity
interests would transfer to investment gains and losses for the period which the acquisition date falls upon.
The other comprehensive income arising from change of the net liabilities or net assets under established
benefit scheme as acquiree‘s re-measured such scheme is excluded.
The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary without
losing control rights over the subsidiary, the difference between the proceeds from disposal of interests and
the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In case
capital reserve is not sufficient to offset the difference, retained earnings will be adjusted.
As for disposal of part equity investment which leads to losing control over the investee, the Company would
re-measure the remaining equity interests at their fair value as of the date when the Company loses control
over the investee when preparing consolidated financial statement. The sum of consideration received from
disposal of equity interest and fair value of the remaining equity interest, less the net assets of the original
subsidiary attributable to the Company calculated based on the original shareholding proportion since the
acquisition date or the date then consolidation commences, is included in investment gains and losses for the
period when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equity
interest investment in original subsidiaries is transferred into current investment gains and losses upon lost of
control.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss of
control and is a package deal, the accounting treatment of these transactions should be dealt with as one
transaction of disposal of the subsidiary until loss of control. However, before the Company loses total
control of the subsidiary, the differences between the actual disposal price and the share of the net assets of
the subsidiary disposed of in every transaction should be recognized as other comprehensive income in the
consolidated financial statements, and transferred to profit or loss when losing control.
7. Accounting treatment for joint venture arrangement and joint controlled entity
The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As for
jointly controlled entity, the Company determines the assets held and liabilities assumed separately as a party
to the jointly controlled entity, recognizes such assets and liabilities according to its proportion, and
recognizes relevant income and expense separately under relevant agreement or according to its proportion.
As for asset transaction relating to purchase and sales with the jointly controlled entity which does not
constitute business activity, part of the gains and losses arising from such transaction attributable to other
participators of the jointly controlled entity is only recognized.
218
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
8. Cash and cash equivalents
Cash in the cash flow statement comprises the Group‘s cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group, that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value, including but not limited to the followings which meet the aforesaid conditions: debt investment
matured within three months upon the acquisition date, bank time deposit which can be early withdrew by
serving a notice and transferrable deposit receipt, etc. for time deposit which can not be used for payment at
any time, it would be note recognized as cash; while if can be used for such purpose, it would be recognized
as cash. Guarantee deposit over three months in other monetary capital shall not be recognized as cash
equivalents, and those less than three months are recognized as cash equivalents.
9. Foreign currency business and foreign currency financial statement conversion
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB amount
pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items
expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance
sheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than the
disclosure which is made according to capitalization rules for the exchange difference occurred from the
special foreign currency borrowings borrowed for constructing and producing the assets satisfying condition
of capitalization. As for the foreign currency non-monetary items measured by fair value, the amount is then
converted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the
conversion difference occurred during the procedure is recorded into prevailing gains and losses directly as
change of fair value. As for the foreign currency non-monetary items measured by historical cost, conversion
is made with the spot exchange rate as of the business day, with no change in RMB amount.
(2) Conversion of foreign currency financial statement
Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreign
currency balance sheet; as for the items in statement of owners‘ equity except for ―Retained profit‖,
conversion is made pursuant to the spot exchange rate of business day; income and expense items in income
statement then are also converted pursuant to the spot exchange rate of transaction day. Difference arising
from the aforementioned conversions shall be listed separately in items of owners‘ equity. Spot exchange rate
as of the occurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amount
of cash affected by exchange rate movement shall be listed separately in cash flow statement.
10. Financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.
The financial assets and financial liabilities are measured at fair value on initial recognition. For the financial
219
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
assets and liabilities measured by fair value and with variation reckoned into current gains/losses, the related
transaction expenses are directly included in current gains or losses; for other types of financial assets and
liabilities, the related transaction costs are included in the initial recognition amount.
(1) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring
a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an
active market, the Company uses the quoted prices in the active market to determine its fair value.
Quotations in an active market refer to prices that are readily available from exchanges, brokers, industry
associations, pricing services, etc., and represent the prices of market transactions that actually occur in an
arm's length transaction. If there is no active market for a financial instrument, the Company uses valuation
techniques to determine its fair value. Valuation techniques include reference to prices used in recent market
transactions by parties familiar with the situation and through voluntary trade, and reference to current fair
values of other financial instruments that are substantially identical, discounted cash flow methods, and
option pricing models.
(2) Category and measurement on financial assets
The group divided the financial assets as the follow while initially recognized: the financial assets measured
at amortized cost; the financial assets measured at fair value and whose changes are included in other
comprehensive income; and the financial assets measured by fair value and with variation reckoned into
current gains/losses. The classification of financial assets depends on the business model that the Group's
enterprises manage the financial assets and the cash flow characteristics of the financial assets.
1) The financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortized cost when they also meet the
following conditions: The group's business model for managing the financial assets is to collect contractual
cash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date is
only paid for the principal and interest based on the outstanding principal amount. For such financial assets,
the effective interest method is used for subsequent measurement according to the amortized cost, and the
gains or losses arising from amortization or impairment are included in current profits and losses. Such
financial assets mainly include monetary funds, notes receivable, accounts receivable, other receivables, debt
investment and long-term receivables, and so on. The Group lists the debt investment and long-term
receivables due within one year (including one year) from the balance sheet date as non-current assets due
within one year, and lists the debt investment with time limit within one year (including one year) when
acquired as other current assets.
2) Financial assets measured at fair value and whose changes are included in other comprehensive
income
220
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Financial assets are classified as financial assets measured at fair value and whose changes are included in
other comprehensive income when they also meet the following conditions: The Group's business model for
managing the financial assets is targeted at both the collection of contractual cash flows and the sale of
financial assets; the contractual terms of the financial asset stipulate that the cash flow generated on a
specific date is only the payment of the principal and the interest based on the outstanding principal amount.
For such financial assets, fair value is used for subsequent measurement. The discount or premium is
amortized by using the effective interest method and is recognized as interest income or expenses. Except the
impairment losses and the exchange differences of foreign currency monetary financial assets are recognized
as the current profits and losses, the changes in the fair value of such financial assets are recognized as other
comprehensive income until the financial assets are derecognized, the accumulated gains or losses are
transferred to the current profits and losses. Interest income related to such financial assets is included in the
current profit and loss. Such financial assets are listed as other debt investments, other debt investments due
within one year (including one year) from the balance sheet date are listed as non-current assets due within
one year; and other debt investments with time limit within one year (including one year) when acquired are
listed as other current assets.
3) Financial assets measured at fair value and whose changes are included in current gains/losses
Financial assets except for the above-mentioned financial assets measured at amortized cost and financial
assets measured at fair value and whose changes are included in other comprehensive income are classified
as financial assets measured at fair value and whose changes are included in current profits and losses, which
adopt fair value for subsequent measurement and all changes in fair value are included in current profits and
losses. The Group classifies non-trading equity instruments as financial assets measured at fair value and
whose changes are included in current profits and losses. Such financial assets are presented as trading
financial assets, and those expire after more than one year and are expected to be held for more than one year
are presented as other non-current financial assets.
(3) Devaluation of financial instrument
On the basis of expected credit losses, the Group performs impairment treatment on financial assets
measured at amortized cost and financial assets measured at fair value and whose changes are included in
other comprehensive income and recognize the provisions for loss.
Credit loss refers to the difference between all contractual cash flows that the Company discounts at the
original actual interest rate and are receivable in accordance with contract and all cash flows expected to be
received, that is, the present value of all cash shortages. Among them, for the purchase or source of financial
assets that have suffered credit impairment, the Company discounts the financial assets at the actual interest
rate adjusted by credit.
The Group considers all reasonable and evidenced information, including forward-looking information,
based on credit risk characteristics. When assessing the expected credit losses of receivables, they are
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
classified according to the specific credit risk characteristics as follows:
1) For receivables and contractual assets and lease receivables (including significant financing components
and not including significant financing components), the Group measures the provisions for loss based on the
amount of expected credit losses equivalent to the entire duration.
①Evaluate expected credit losses based on individual items: credit notes receivable (including accepted
letters of credit) of financial institutions in notes receivable and accounts receivable, and related party
payments (related parties under the same control and significant related parties); dividends receivable,
interest receivable, reserve funds, investment loans, cash deposits (including warranty), government grants
(including dismantling subsidies) in other receivables, and receivables with significant financing components
(i.e. long-term receivables);
②Evaluate expected credit losses based on customer credit characteristics and ageing combinations: in
addition to evaluating expected credit losses based on individual items, the Group evaluates the expected
credit losses of notes receivable and accounts receivable and other receivables financial instruments based on
customer credit characteristics and ageing combinations.
The Group considers all reasonable and evidenced information, including forward-looking information, when
assessing expected credit losses. When there is objective evidence that its customer credit characteristics and
ageing combination cannot reasonably reflect its expected credit loss, the current value of the expected future
cash flow is measured by a single item, and the cash flow shortage is directly written down the book balance
of the financial asset.
2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial
instruments are impaired, such as the loan commitments and financial guarantee contracts that are not
measured at fair value through profit or loss, financial assets measured at fair value and whose changes are
recognized in other comprehensive income; other financial assets measured at amortized cost (such as other
current assets, other non-current financial assets, etc.).
(4) Reorganization basis and measure method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract
rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already been
transferred, and the Company has transferred almost all risks and remunerations of financial assets ownership
to the transferee; ③The financial assets has been transferred, even though the Company has neither
transferred nor kept almost all risks and remunerations of financial assets ownership, the Company has given
up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets
ownership, nor given up controlling the financial assets, then confirm the relevant financial assets according
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
to how it continues to involve into the transferred financial assets and confirm the relevant liabilities
accordingly. The extent of continuing involvement in the transferred financial assets refers to the level of risk
arising from the changes in financial assets value faced by the enterprise.
If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance
between the book value of the transferred financial assets and the sum of consideration received from
transfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidated
income in the current profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book
value of the transferred financial assets between the derecognized parts and the parts not yet
derecognized according to each relative fair value, and reckon the balance between the sum of
consideration received from transfer and fluctuation accumulated amount of fair value formerly
reckoned in other consolidated income that should be apportioned to the derecognized parts and the
apportioned aforementioned carrying amounts in the current profits and losses.
When the Group sells financial assets adopting the mode of recourse, or endorses and transfers its financial
assets, it is necessary to ensure whether almost all the risks and rewards of ownership of the financial assets
have been transferred. If almost all the risks and rewards of ownership of the financial assets have been
transferred to the transferee, the financial assets shall be derecognized; if almost all the risks and rewards of
ownership of the financial assets are retained, the financial assets shall not be derecognized; if almost all the
risks and rewards of ownership of the financial assets are neither transferred nor retained, continue to judge
whether the company retains control over the assets, and conduct accounting treatment according to the
principles described in the preceding paragraphs.
(5) Category and measurement of financial liability
Financial liability is classified into financial liability measured by fair value and with variation reckoned
into current gains/losses and other financial liability at initially measurement. Financial liability shall be
initially recognized and measured at fair value. As for the financial liability measured by fair value and with
variation reckoned into current gains/losses, relevant trading costs are directly reckoned into current
gains/losses while other financial liability shall be reckoned into the initial amount recognized.
① the financial liability measured by fair value and with variation reckoned into current gains/losses
The conditions to be classified as trading financial liabilities and as financial liabilities designated to be
measured at fair value and whose changes are included in current profit or loss at the initial recognition are
consistent with the conditions to be classified as trading financial assets and as financial assets designated to
be measured at fair value and whose changes are included in current profit or loss at the initial recognition.
Financial liabilities measured at fair value and whose changes are included in current profit or loss are
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
subsequently measured at fair value, and the gain or loss arising from changes in fair value and the dividends
and interest expense related to these financial liabilities are included in current profit or loss.
② Other financial liability
It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link to
the equity instruments that are not quoted in an active market and whose fair value cannot be reliably
measured, and the subsequent measurement is carried out in accordance with the cost. Other financial
liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or
loss arising from derecognition or amortization is included in current profit or loss.
③Financial guarantee contract
The financial guarantee contract of a financial liability which is not designated to be measured at fair value
through profit or loss is initially recognized at fair value, and its subsequent measurement is carried out by
the higher one between the amount confirmed in accordance with the Accounting Standards for Business
Enterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulated
amortization amount determined in accordance with the principle of Accounting Standards for Business
Enterprises No. 14—Revenue from the initial recognition amount.
(6) Termination of recognition of financial liability
The financial liability or part of it can only be terminated for recognized when all or part of the current
obligation of the financial liability has been discharged. The Group (debtor) and the creditor sign an
agreement to replace the existing financial liabilities with new financial liabilities, and if the contract terms
of the new financial liabilities are substantially different from the existing financial liabilities, terminated for
recognized the existing financial liabilities and at the same time recognize the new financial liabilities. If the
financial liability is terminated for recognized in whole or in part, the difference between the carrying
amount of the part that terminated for recognized and the consideration paid (including the transferred
non-cash assets or the assumed new financial liabilities) is included in current profits and losses.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the
financial assets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet.
In addition, the financial assets and liabilities are listed in the balance sheet without being balanced out.
(8) Derivatives and embedded derivatives
Derivatives are initially measured at fair value on the signing date of the relevant contract, and are
subsequently measured at fair value. Except for derivatives that are designated as hedging instruments and
are highly effective in hedging, the gains or losses arising from changes in fair value will be determined
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
based on the nature of the hedging relationship in accordance with the requirements of the hedge accounting
and be included in the period of profit and loss, other changes in fair value of derivatives are included in
current profits and losses. For a hybrid instrument that includes an embedded derivative, if it is not
designated as a financial asset or financial liability measured at fair value and whose changes are included in
current profit or loss, the embedded derivative does not have a close relationship with the main contract in
terms of economic characteristics and risks, and as with embedded derivatives, if the tools existing separately
conform to the definition of the derivatives, the embedded derivatives are split from the hybrid instruments
and are treated as separate derivative financial instruments. If it is not possible to measure the embedded
derivative separately at the time of acquisition or subsequent balance sheet date, the whole hybrid instrument
is designated as a financial asset or financial liability measured at fair value and whose changes are included
in current profits and losses.
(9) Equity instrument
The equity instrument is the contract to prove the holding of the surplus stock of the assets with the
deduction of all liabilities in the Group. The Company issues (including refinancing), repurchases, sells or
cancels equity instruments as movement of equity. No fair value change of equity instrument would be
recognized by the Company. Transaction costs associated with equity transactions are deducted from equity.
The Group's various distributions to equity instrument holders (excluding stock dividends) reduce
shareholders' equity.
11. Inventory
Inventories of the Company principally include raw materials, stock goods; work in process, self-made
semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit, goods
in process, mould and engineering construction etc.
Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted for
raw materials, low-value consumption goods and stock goods. Switch-back cost of the current month is
adjusted by distribution price difference at the end of the month, the dispatched goods will share the cost
differences of inventory while in settlement the business income; and low-value consumption goods is
carried forward at once when being applied for use and the mould shall be amortized within one year after
receipt.
Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. The
provision for inventory depreciation shall be drawn from the difference between the book cost of a
single inventory item and its net realizable value, and the provision for inventory depreciation shall be
recorded into the current profit and loss.
12. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the initial
investment cost shall be the acquirer‘s share of the carrying amount of net assets of the acquiree as of the
combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying
amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-term
equity investment shall be zero. For long-term equity investment acquired through business combination not
under common control, the initial investment cost shall be the combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king of
long-term equity investment acquired through cash payment, for which the actual payment for the purchase
shall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair value
of issuing equity investment shall be investment cost; for Long-term equity investments which are invested
by investors, the agreed price in investment contract or agreement shall be investment cost; and for long-term
equity investment which is acquired through debt reorganization and non-monetary assets exchange,
regulations of relevant accounting standards shall be referred to for confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost, and
cost of the investment is adjusted when making additional investment or writing off investment; When
calculated by equity method, current investment gains and losses represent the proportion of the net gains
and losses realized by the invested unit in current year attributable to or undertaken by the investor. When the
Company is believed to enjoy proportion of net gains and losses of invested unit, gains and losses
attributable to the Company according to its shareholding ratio is to computer out according to the
accounting policy and accounting period of the Company, on the basis of the fair value of various
recognizable assets of the invested unit as at the date of obtaining of the investment, after offset of gains and
losses arising from internal transactions with associates and joint-ventures, and finally to make confirmation
after adjustment of net profit of the invested unit. Confirmation on gains and losses from the long-term
equity investment in associates and joint-ventures held by the Company prior to the first execution day, could
only stand up with the precedent condition that debit balance of equity investment straightly amortized
according to its original remaining term has already been deducted, if the aforementioned balance relating to
the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part equity
interest investment, the remaining equity interest shall be calculated according to Accounting Standards for
Business Enterprise No.22-Recognition and Measurement of Financial Instrument. Difference between the
fair value of the remaining equity interest as of the date when loss of joint control or significant influence and
the carrying value is included in current gains and losses. Other comprehensive income recognized in respect
226
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
of the original equity interest investment under equity method should be treated according to the same basis
which the investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equity
method calculation; and also switches to cost method for calculating the long-term equity investments which
entitles the Company to have conduct control over the invested units due to its additional investments; and
switches to equity method for calculating the long-term equity investments which entitles the Company to
conduct common control or significant influence, while no control over the invested units due to its
additional investments, or the long-term equity investments which entitles the Company with no control over
the invested units any longer while with common control or significant influence.
When disposing long-term equity investment, the balance between it carrying value and effective price for
obtaining shall be recorded into current investment income. When disposing long-term equity investment
which is calculated by equity method, the proportion originally recorded in owners‘ equity shall be
transferred to current investment income according to relevant ratio, except for that other movements of
owners‘ equity excluding net gains and losses of the invested units shall be recorded into owners‘ equity.
13. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value by
its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and
other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is
formed with all necessary expenditures occurred before construction completion of the assets arriving at the
estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided
with average service life method pursuant to the predicted service life and net rate of salvage value. The
predicted service life and net rate of salvage value and annual depreciation are listed as follows:
Predicted rate of salvage Depreciation rate per
Category Depreciation term
value annual
House and buildings 30-40 years 4%-5% 2.375%-3.20%
When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets
commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or
additional capital, the fixed assets or intangible assets shall switch to investment real estate commencing
from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as
the credit value after the switch.
When investment real estate is disposed, or out of utilization forever and no economic benefit would be
predicted to obtain through the disposal, the Company shall terminate recognition of such investment real
estate. The amount of income from disposal, transfer, discarding as scrap or damage of investment real estate
after deducting the asset‘ s carrying value and relevant taxation shall be written into current gains and losses.
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
14. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service life
exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and buildings,
machinery equipment, transportation equipment and other equipment
Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of
purchased-in fixed assets include bidding price and import duty and relevant taxes, and other expenditure
which occurs before the fixed assets arrive at the state of predicted utilization and which could be directly
attributable to the assets; while cost of self-built fixed asset is formed with all necessary expenditures
occurred before construction completion of the assets arriving at the estimated utilization state; credit value
of the fixed assets injected by investors is determined based on the agreed value of investment contracts or
agreements, while as for the agreed value of investment contracts or agreements which is not fair, it shall
take its fair value as credit value; and for fixed assets which are leased in through finance leasing, credit
value is the lower of fair value of leased assets and present value of minimized leasing payment as at the
commencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For
those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset cost;
and for the part which is replaced, recognization of its carrying value shall cease; for those not meeting
requirements for recognization of fixed assets, they shall be accounted in current gains and losses as long as
they occur. When fixed asset is disposed, or no economic benefit would be predicted to obtain through
utilization or disposal of the asset, the Company shall terminate recognization of such fixed asset. The
amount of income from disposal, transfer, discarding as scrap or damage of fixed asset after deducting the
asset‘ s carrying value and relevant taxation shall be written into current gains and losses.
The Company withdraws depreciation for all fixed assets except for those which have been fully depreciated
while continuing to use. It adopts average service life method for withdrawing depreciation which is treated
respectively as cost or current expense of relevant assets according to purpose of use. The depreciation term,
predicted rate of salvage value and depreciation rate applied to fixed assets of the Company are as follows:
Predicted rate of salvage Depreciation rate per
No. Category Depreciation term
value year
1 House and buildings 30-40 years 4%-5% 2.375%-3.20%
2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60%
3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%
4 Other equipment 8-12 years 4%-5% 7.92%-12.00%
The Company makes re-examination on predicted service life, predicted rate of salvage value and
depreciation method at each year-end. Any change will be treated as accounting estimation change.
228
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
15. Construction in progress
Construction in progress is measured with effective cost. Self-operated constructions projects are measured
with direct materials, direct salaries and direct construction expense; construction projects undertaken by
external are measured with the engineering payment payable; and engineering cost (income abatement) of
equipment-installation projects is confirmed with consideration of value of the equipment, installation fee,
and expenditure arising from trial operation of the projects. Borrowing expense and exchange gains and
losses which should be capitalized are also included in cost of construction in progress.
16. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses and
exchange difference due to borrowing in foreign currency. The borrowing expense which could be directly
attributable to purchase or production of assets satisfying capitalization condition, starts capitalization when
capital expenditure and borrowing expense occur and when necessary purchase or production conducted for
promoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shall
cease when purchased or produced assets satisfying capitalization condition have reached the predicted
available-for-use or available-for-sale state. Other borrowing expense is recognized as expense during the
occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in current
period after deduction of the interest income arising from unutilized borrowing capital which is saved in
banks or deduction of investment income obtained from temporary investment; For recognization of
capitalized amount of common borrowing, it equals to the weighted average of the assets whose accumulated
expense or capital disburse is more than common borrowing times capitalization rate of occupied common
borrowing. Capitalization rate is determined according to weighted average interest rate of common
borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and inventories
which can only arrive at predicted available-for-use and available-for-sale state after quite a long time
(generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization principle
and the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until the
purchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and non-patent
technology. Intangible assets are measured according to the effective costs paid for obtaining the assets. For
those intangible assets purchased in by the Company, their effective cost consist of actual payment and
229
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
relevant other expenditure; for the intangible assets input by investors, effective cost is determined according
to the value agreed in investment contracts and agreements, while if the agreed value is not fair, then
effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of transfer;
trademark use-rights averagely amortized by 10 years; patent technology, non-patent technology and other
intangible assets is averagely amortized according to the shortest of their predicted service life, beneficial
term concluded by contract and effective term regulated by laws. Amortization amount is recorded in assets
cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have limited
service life shall be conducted at the end of each year. If changed, it would be treated as change of
accounting estimation. Re-examination on predicted service life of intangible assets which have uncertain
service life shall be conducted. For any evidence proving that service life of intangible assets is limited, then
the service life shall be estimated and the Company shall make amortization within the predicted service life
period.
18. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on research
phase and development phase, based on nature of the expenditure and that whether the final intangible assets
formed by research & development is of great uncertainty. Expenditure arising during research should be
recorded in current gains and losses upon occurrence; expenditure arising during development is confirmed
as intangible assets when satisfying the following conditions:
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible asset or the intangible asset itself;
(4) Have sufficient technology, financial resource and other resources to support development of the intangible
assets, and have ability to apply or sell the assets;
(5) Expenditure attributable to development of the intangible assets could be reliable measured.
Expenditure arising during development not satisfying the above conditions shall be recorded in current
gains and losses upon occurrence. Development expenditure which had been recorded in gains and losses in
previous period would not be recognized as assets in later period. Expenditure arising during development
phase which has been starting capitalization is listed in balance sheet as development expenditure, and
transferred to intangible assets since the project reaches at predicted utilization state.
19. Impairment of non-financial long-term assets
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
As at each balance sheet date, the Company has inspection on long-term equity investment, fixed assets,
construction in process and intangible assets with limited service life. When the following indications appear,
assets may be impaired, and the Company would have impairment test. As for goodwill and intangible assets
which have uncertain service life, no matter there is impairment or not, impairment test shall be conducted at
the end of every year. If it is hard to make test on recoverable amount of single asset, test is expected to make
on the basis of the assets group or assets group portfolio where such asset belongs to.
After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance is
recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, it
couldn‘t be switched back in later accounting periods. Recoverable amount of assets refers to the higher of
fair value of assets net disposal expense and present value of predicted cash flow of the asset.
Indications for impairment are as follows:
(1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the predicted
drop due to move-on of times or normal utilization;
(2) Economy, technology or law environment where enterprise operates or market where asset is located will
have significant change in current or recent periods, which brings negative influence to enterprise;
(3) Market interest rate or returning rate of other market investments have risen in current period, which
brings influence in calculating discount rate of present value of predicted future cash flow of assets, which
leads to a great drop in recoverable amount of such assets;
(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;
(5) Asset has been or will be keep aside, terminating utilization or disposed advance;
(6) Internal report of enterprise shows that economic performance of asset has been or will be lower than
prediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatly
lower (or higher) than the predicted amount;
(7) Other indications showing possible impairment of assets
20. Goodwill
Goodwill represents balance between equity investment cost or business combination cost under no common
control exceeding the attributable part or fair value of recognizable net assets of party invested or purchased
(obtained through business combination) as of acquisition day or purchase day.
Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill
relating to associates and joint-ventures is included in carrying value of long-term equity investment.
231
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
21. Long-term deferred expenses
Long-term deferred expenses of the Company refer to the expense which has been paid out while should be
amortized from the current period and periods thereafter, with amortization term over one year (excluding
one year). Such expense is averagely amortized during the beneficial period. If such long-term deferred
expense could not bring benefit to following accounting periods, the unamortized value of the item shall be
fully transferred to current gains and losses.
22. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered by
employees or compensation to the termination of employment relationship such as short-term wages,
post-employment benefits, compensation for the termination of employment relationship and other long-term
employee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social
insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund,
labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing
scheme, and non-monetary benefits as well as other short-term remuneration. During the accounting period
when staff provides services, the short-term remuneration actually occurred is recognized as liabilities and
shall be included in current gains and losses or related asset costs according to the beneficial items.
Retirement benefits mainly consist of basic pension insurance, unemployment insurance and early-retirement
benefits, etc. retirement benefit scheme represents the agreement reached by the Company and its employees in
respect of retirement benefits, or the rules or regulations established by the Company for providing retirement
benefits to employees. In particular, defined contribution plan means a retirement benefit plan, pursuant to which,
the Company makes fixed contribution to independent fund, upon which, and it is not obliged to make further
payment. Defined benefit plan refers to retirement benefit scheme other than defined contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for encouraging staff
and workers to accept the reduction voluntarily. The employees make applications voluntarily, the two
parties sign the compensation agreement after approved by the Company and calculate the compensation
amount according to the compensation standard passed by the staff representative conference, and the
Company confirms it as dismiss welfare and reckons it in current profits and losses. As the Company
promises to adjust the treatment for early retiring staff and workers with the increase of social basic cost of
living allowances, the discount elements will not be considered for calculating the dismiss welfare.
23.Accrual liability
If the business in connection with such contingencies as a security involving a foreign party, commercial
acceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of the
following conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existing
obligation of the Company; performance of the obligation is likely to cause economic benefits to flow out of
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Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the enterprise; the amount of the obligation is reliably measurable.
24. Principle of recognition of revenue and measurement method
The Company‘s sales revenue is mainly comprised of revenue from sale of goods, labor providing income
and revenue from assignment of asset use rights. The principle of recognition of such revenue is as follows:
(1) Revenue from the sale of goods shall be recognized when the Company has transferred to the buyer the
significant risks and rewards of ownership of the goods; the Company retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold; the
amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow
into the Company; The export business is recognized when the packing list is received; and the associated
costs incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM will recognize revenue
while notes issued after commodity transferring to the shipping space that appointed by the client.
(2) The Company confirms the realization of service income when the gross income and total cost of labor
service cab be unfailingly calculated, the economic benefits related to labor service are likely to flow into the
Group, and the progress of labor service can be confirmed reliably. On balance sheet date, with regard to
those with results provided for labor service transactions can be estimated reliably, confirm the relevant
service income according to percentage of completion method and determine the percentage-of-completion
method by the proportion of the occurred cost in the estimated total cost; as for those with results provided
for labor service transactions can‘t be estimated reliably and with occurred labor cost predicted to be able to
get compensation, confirm to provide service income according to labor cost amount occurred and capable of
getting compensation, and carry over the occurred labor costs; for those with results provided for labor
service transactions can‘t be estimated reliably and with occurred labor cost predicted to be not able to get
compensation, reckon the occurred labor cost in the current profits and losses, but not confirm to provide
service income.
(3) The economy benefits of use-right of transfer assets probably wills inflow to the Company, if the income
can be measure accountability, than use-right income of transfer assets recognized.
25. Government subsidy
The government subsidy shall be recognized when the Company is able to meet the conditions attached and
is able to receive it. The Government subsidy, other than fiscal subsidy, received by the Company shall be
accounted on an aggregate basis. In particular, the Government subsidies relating to ordinary activities would
be included in other income; the Government subsidies not relating to ordinary activities would be included
in non-operating income.
When the Government subsidy is in the form of monetary assets, it is measured at the actual amount received.
The subsidy allocated according to fixed quota standards shall be measured by the amount receivable; When
233
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the Government subsidy is in the form of non-monetary assets, it is measured at fair value, and measured at
the nominal value of RMB 1.00 in case of failure to obtain reliable fair value.
(1) Basis of determination and accounting of Government subsidy relating to assets
Government subsidy relating to assets refers to that obtained by the Company for the purpose of acquiring or
otherwise formation of long-term assets. Government subsidy relating to assets is deemed as that relating to
ordinary activities in principle and recognized as deferred income upon receipt. The Government subsidy
shall be allocated averagely over the life of use of relevant assets and accounted in other income.
(2) Basis of determination and accounting of Government subsidy relating to income
Government subsidy relating to income refers to the Government subsidy other than that relating to assets.
Government subsidy relating to income shall be recognized as deferred income if the grant is used to
compensate the Company‘s expenses or losses for subsequent periods, and shall be accounted in profit or
loss for the period during the period in which the relevant expense is recognized. Those grants relating to our
ordinary activities are recorded in other income in the period in which the relevant expenses or losses are
recognized. Those grants not relating to our ordinary activities are recorded in non-operating income in the
period in which the relevant expenses or losses are recognized. Government subsidies used to compensate
the relevant costs or losses incurred by the Company and relating to our ordinary activities shall be accounted
in other income directly upon receipt of the grant, and accounted in non-operating income directly upon
receipt if it is not related to our ordinary activities.
With respect to Government subsidy comprising both portions relating to assets and income, it shall be
accounted separately based on different portions, and it shall be aggregated as that relating to income if it is
difficult to distinguish the two portions.
(3) The policy-related preferential loan received by the Company shall be accounted separately in the
following two manners:
In case that government‘s appropriation of interest subsidy is made to the lending bank, the Company shall
account for the relevant loan based on the actual amount of loan received by it, and calculate the borrowing
expense based on the principal of the borrowing and the policy-related preferential interest rate.
In case that government‘s appropriation of interest subsidy is made to the Company, the Company applied
the relevant interest subsidy to offset borrowing expense.
26. Deferred Income Tax Assets and Deferred Income Tax Liabilities
A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference)
between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be
recognized for the carry forward of unused deductible losses that it is probable that future taxable profits will
234
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
be available against which the deductible losses can be utilized. For temporary difference arising from initial
recognition of goodwill, no corresponding deferred income tax liabilities will be recognized. For temporary
difference arising from initial recognition of assets and liabilities occurred in the transaction related to
non-business combination which neither affect accounting profit nor taxable income (or deductible losses),
no corresponding deferred income tax assets and deferred income tax liabilities will be recognized. As of the
balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the
effective tax rate applicable to the period when recovery of assets or settlement of liabilities occur.
The Company recognizes deferred income tax assets to the extent of future taxable income tax which is
likely to be obtained to offset deductible temporary difference, deductible losses and tax credits.
27. Lease
The Company categorizes the lease into the financial leasing and the operating leasing.
The financial leasing is the lease in which all risks and returns related to the ownership of assets are
transferred in substance. The Company as a lease holder, on the date of lease, the financial lease is
recognized as the fixed asset at lower cost of fair value of the rental asset and the NPV of minimum payment
of leasing. The minimum payment of leasing is recognized as long-term payable and the difference is
accounted into unrecognized financing expense.
The operating lease is the lease apart from the financial leasing. The Company, as a lease holder, accounts the
rents into current period by straight line method during the term of the lease. The Company, as a leaser, accounts
the rental income into current period by straight line method during the term of the lease.
28. Held-for-sale
(1)The Company classifies non-current assets or disposal groups that meet all of the following conditions as
held-for-sale: 1) according to the practice of selling this type of assets or disposal groups in a similar
transaction, the non-current assets or disposal group can be sold immediately at its current condition; 2) The
sale is likely to occur, that is, the Company has made resolution on the selling plan and obtained definite
purchase commitment, the selling is estimated to be completed within one year. Those assets whose disposal
is subject to approval from relevant authority or supervisory department under relevant requirements are
subject to that approval. Prior to the preliminary classification of non-current assets or disposal group as the
category of held-for-sale, the Company measures the carrying value of the respective assets and liabilities
within the non-current assets or disposal group under relevant accounting standards. For non-current asset or
disposal group held for sale, for which it is found that the carrying value is higher than its fair value less
disposal expense during the initial measurement or re-measurement on the balance sheet date, the carrying
value shall be deducted to the net amount of fair value less disposal expense, and the reduced amount shall
be recognized as impairment loss in profit or loss for the period, and provision of impairment of assets held
for sale shall be provided for accordingly.
(2)The non-current assets or disposal group that the Company has acquired specially for resale are classified
235
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
as held for sale on the acquisition date when they meet the condition that ―the selling is estimated to be
completed within one year‖ on the acquisition date, and are likely to satisfy other conditions of being
classified as the type of held for sale in a short-term (usually being 3 months). Non-current assets or disposal
group classified as held for sale are measured at the lower of their initial measurement amount and the net
amount after their fair value less the selling expenses based on the assumption that such non-current assets or
disposal group are not classified as held for sale at the time of initial measurement. Except for the
non-current assets or disposal group acquired in a business combination, the difference arising from
considering the net amount of such non-current assets or disposal group after their fair value less the selling
expenses as the initial measurement amount is recorded in the current profit or loss.
(3)In case of loss of control over the subsidiaries due to the sales of investment in subsidiaries, no matter
whether the Company retains part of the equity investment after selling investment in subsidiaries, the
investment in subsidiaries shall be classified as held for sale on an aggregate basis in the separate financial
statements of the parent company when the investment in subsidiaries proposed to be sold satisfies the
conditions for being classified as held for sale; and all the assets and liabilities of the subsidiary shall be
classified as held for sale in the consolidated financial statements.
(4)If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance
sheet date increases, the amount previously reduced for accounting shall be recovered and reverted from the
impairment loss recognized after the asset is classified under the category of held for sale, with the amount
reverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classified
under the category of held for sale shall not be reverted.
(5)For the amount of impairment loss on assets, the carrying value of disposal group‘s goodwill shall be
offset against first, and then offset against the book value of non-current assets according to the proportion of
book value of non-current assets.
If the net amount of fair value of the disposal group held for sale on the subsequent balance sheet date less
sales expenses increases, the amount reduced for accounting in previous periods shall be restored, and shall
be reverted in the impairment loss recognized in respect of the non-current assets which are applicable to
relevant measurement provisions after classification into the category of held for sale, with the reverted
amount charged in profit or loss for the current period. The written-off carrying value of goodwill and
impairment loss of non-current assets which is recognized prior to classification into the category of held for
sale shall not be reverted.
The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal group
held for sale will increase the book value in proportion of the book value of each non-current asset (other
than goodwill) in the disposal group.
(6) The non-current assets in the non-current assets or disposal group held for sale is not depreciated or
amortized, and the debt interests and other fees in the disposal group held for sale continue to be recognized.
236
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7)If the non-current assets or disposal group are no longer classified as held for sale since they no longer
meet the condition of being classified as held for sale or the non-current assets are removed from the disposal
group held for sale, they will be measured at the lower of the following: 1) the amount after their book value
before they are classified as held for sale is adjusted based on the depreciation, amortization or impairment
that should have been recognized given they are not classified as held for sale; 2) the recoverable amount.
(8) The unrecognized profits or loss will be recorded in the current profits or loss when derecognizing the
non-current assets or disposal group held for sale.
29. Discontinued operation
A discontinued operation is a separately identified component of the Group that either has been disposed of
or is classified as held for sale, and satisfies one of the following conditions: (1) represents a separate major
line of business or geographical area of operations; (2) is part of a single co-ordinate plan to dispose of a
separate major line of business or geographical area of operations; and (3) is a subsidiary acquired
exclusively with a view to resale.
30. Income tax accounting
The Company accounted the income tax in a method of debit in balance sheet. The income tax expenses
include income tax in the current year and deferred income tax. The income tax associated with the events
and transactions directly included in the owners‘ equity shall be included in the owners‘ equity; and the
deferred income tax derived from business combination shall be included in the carrying amount of goodwill,
except for that above, the income tax expense shall be included in the profit or loss in the current period.
The income tax expense in the current year refers to the tax payable, which is calculated according to the tax
laws on the events and transactions incurred in the current period. The deferred income tax refers to the
difference between the carrying amount and the deferred tax assets and deferred tax liabilities at Current
Year-end recognized in the method of debit in the balance sheet.
31. Segment information
Business segment was the major reporting form of the Company, which divided into five parts:
air-conditioning, refrigerator & freezer & washing machine, marketing, small home appliance and others.
The transfer price among the segments will recognize based on the market price, common costs will
allocated by income proportion between segments except for the parts that without reasonable allocation.
32. Explanation on significant accounting estimation
The management of the Company needs to apply estimation and assumption when preparing financial
statement which will affect the application of accounting policy and amounts of assets, liabilities, income and
expense. The actual condition may differ from the estimation. Constant evaluation is conducted by the
237
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
management in respect of the key assumption involved in the estimation and judgment of uncertainties.
Effect resulting from change of accounting estimation is recognized in the period the change occurs and
future periods.
The following accounting estimation and key assumption may result in material adjustment to the book value
of assets and liabilities in future period.
(1) Inventory impairment provision
The Company provides impairment provision according to the type of finished products and goods delivered
under fixed proportion, and estimates the realizable net value of inventories by reference to the projected
selling price of similar inventories less sales expenses and related taxes on a regular basis, so as to evaluate
the rationality of the provision proportion. If the actual selling price or expense differs from the previous
estimation, the management will make corresponding adjustment to the proportion. The estimation results
based on existing experiences may differ from the latter actual results, which may result in adjustment to the
book value of inventories in the balance sheet and affect over the gains and losses of the period when the
estimation changes.
(2) Accounting estimation on long-term assets impairment provision
The Company makes impairment test on fixed assets such as buildings, machine and equipment which have
impairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverable
amount of relevant assets and assets group shall be the present value of the projected future cash flow which
shall be calculated with accounting estimation.
If the management amends the gross profit margin and discount rate adopted in calculation of future cash
flow of assets and assets group and the amended gross profit margin is lower than the currently adopted one
or the amended discount rate is higher than the currently adopted one, the Company needs to increase
provision of impairment provision. If the actual gross profit margin is higher (or the discount rate is lower)
than the estimation of management, the Company can not transfer back the long term assets impairment
provision provided already.
(3) Accounting estimation on realization of deferred income tax assets
Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate for
each future year. Realization of deferred income tax assets depends on whether a company is able to obtain
sufficient taxable income in future. Change of future tax rate and switch back of temporary difference could
affect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimation
may result in material adjustment to deferred income tax.
(4) Usable term and residual value rate of fixed assets and intangible assets
The Company, at least at the end of each accounting year, reviews the projected usable life and residual value
rate of fixed assets and intangible assets. The projected usable life and residual value rate are determined by
238
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the management based on the historical experiences of similar assets by reference to the estimation generally
used by the same industry with consideration on projected technical upgrade. If material change occurs to
previous estimation, the Company shall accordingly adjust the depreciation expenses and amortization
expenses for future period.
(5) Projected liabilities arising from product quality guarantee
The Company commits to repair the major spare parts of refrigerators sold through go-to-countryside
promotion activity for free for ten years. As to the maintenance expenses that may be increased arising from
such commitment, the Company has provided projected liabilities.
Taking into account the various uncertainties during the ten years, the Company considers no discount factor
of such projected liabilities. Instead, the Company reviews the parameters (probility, proportion, maintenance
expense per single set) based on the actual occurrence of maintenance expenses as of each balance sheet date.
If obvious change is found, the Company will adjust the projected liabilities according to the latest
parameters so as to reflect the best estimation.
33. Other comprehensive income
Other comprehensive income represents various gains and losses not recognized in current gains and losses
according to other accounting rules.
Other comprehensive income items shall be reported in the following two classes under other relevant
accounting rules:
(1) Other comprehensive income items that can not be reclassified into gains and losses in future accounting
periods, mainly including changes arising from re-measurement of net liabilities or net assets under defined
benefit plan and interest in investee‘s other comprehensive income which are measured under equity method
and which can not be reclassified into gains and losses in future accounting periods;
(2) Other comprehensive income items that will be reclassified into gains and losses in future accounting
periods upon satisfaction of required conditions, mainly includes the share of other comprehensive income
that is reclassified into profit and loss when the investee‘s subsequent accounting periods are accounted for in
accordance with the equity method and meet the specified conditions, the fair value changes occurred by the
debt investment that is measured at fair value and whose changes are included in other comprehensive
income, the difference between the original book value included in other comprehensive income and the fair
value when a financial asset measured at amortized cost is reclassified as a financial asset measured at fair
value and its changes are included in other comprehensive income, the loss provisions for financial assets
measured at fair value and whose changes are included in other comprehensive income, the gains or losses
generated from cash flow hedging instruments are part of effective hedging, and the differences in
conversion of foreign currency financial statements.
239
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
34. Change of significant accounting policies and accounting estimates
(1) Change of significant accounting policy
Content and reasons Approval procedure Note
On 31 March 2017, the Ministry of Finance revised the Accounting
Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments, Accounting Standards for
Business Enterprises No. 23 - Transfer of Financial Assets,
Approved by 21st session of 9th Found below as
Accounting Standards for Business Enterprises No. 24 - Hedge BOD
details
Accounting, and the Accounting Standards for Business Enterprises
No. 37 – Financial Instruments Presentation, and implemented
since 1 Jan. 2019.
Revised the format of financial statement according to the Notice of
the Ministry of Finance on Revising and Printing the Format of Found below as
Approved by management level
Financial Statements for General Enterprises in 2019 (CK [2019]
details
No.6) issued by Ministry of Finance on 30 April 2019
New financial instrument standards are implemented by the Company and its subsidiaries for the first time in the period, and
according to the regulation of Accounting Division of the Ministry of Finance CK[2019] No.6, impacts on balance sheet at
period-begin of the consolidate and parent company from change of the above mentioned accounting policies are as:
Consolidated balance sheet Balance sheet of parent company
31 December 1 Jan. 2019 31 December 1 Jan. 2019
Item affected Amount Amount
2018 (Before (Amount 2018 (Before (Amount
adjusted adjusted
adjustment) adjusted) adjustment) adjusted)
Financial assets
measured at fair
value and whose
changes are 9,253,635.59 -9,253,635.59 9,253,635.59 -9,253,635.59
included in
current
gains/losses
Trading
9,253,635.59 9,253,635.59 9,253,635.59 9,253,635.59
financial assets
2,387,830,887.7 -17,262,634.1
Note receivable 2,370,568,253.64 2,433,243,946.64 -13,500,000.00 2,419,743,946.64
4 0
Account 1,670,988,644.7
2,373,491.53 1,673,362,136.29 1,050,282,023.37 -2,512,900.06 1,047,769,123.31
receivable 6
Other account
62,129,574.17 1,063,166.76 63,192,740.93 182,744,033.52 97,297.68 182,841,331.20
receivable
Financial assets
-45,000,000.0
available for 45,000,000.00 45,000,000.00 -45,000,000.00
0
sale
240
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Consolidated balance sheet Balance sheet of parent company
31 December 1 Jan. 2019 31 December 1 Jan. 2019
Item affected Amount Amount
2018 (Before (Amount 2018 (Before (Amount
adjusted adjusted
adjustment) adjusted) adjustment) adjusted)
Other
non-current 45,000,000.00 45,000,000.00 45,000,000.00 45,000,000.00
financial assets
Long-term
equity 61,869,440.55 5,683,101.23 67,552,541.78 1,731,109,903.70 5,683,101.23 1,736,793,004.93
investment
Financial
liabilities
measured at fair
value and whose -55,586,666.7
55,586,666.70 19,893,875.00 -19,893,875.00
changes are 0
included in
current
gains/losses
Trading
financial 55,586,666.70 55,586,666.70 19,893,875.00 19,893,875.00
liability
Surplus reserves 400,673,993.50 -1,023,250.12 399,650,743.38 400,455,827.82 -1,023,250.12 399,432,577.70
Retained profit 904,232,582.87 -2,734,328.91 901,498,253.96 917,567,933.94 -9,209,251.03 908,358,682.91
Minority's
119,819,558.59 -4,385,295.55 115,434,263.04
interest
The financial statement of 2019 was prepared according to the regulation of financial statement format CK [2019] No.6 by the
Company and its subsidiaries and the retroactive adjustment was used to change the presentation of relevant financial
statements. Impacts on balance sheet at period-begin of the consolidate and parent company from adjustment are as:
Consolidate balance sheet Balance sheet of parent company
Item 31 December 1 Jan. 2019 31 December 1 Jan. 2019
Amount Amount
affected 2018 (Before (Amount 2018 (Before (Amount
adjusted adjusted
adjustment) adjusted) adjustment) adjusted)
Account
receivable
4,043,930,389.93 -4,043,930,389.93 3,467,513,069.95 -3,467,513,069.95 -
and Note
receivable
Account
2,370,568,253.64 2,370,568,253.64 2,419,743,946.64 2,419,743,946.64
receivable
Note
1,673,362,136.29 1,673,362,136.29 1,047,769,123.31 1,047,769,123.31
receivable
241
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Account
payable
6,009,929,380.98 -6,009,929,380.98 - 4,013,263,630.45 -4,013,263,630.45 -
and note
payable
Account
3,727,754,399.60 3,727,754,399.60 2,001,442,110.63 2,001,442,110.63
payable
Note
2,282,174,981.38 2,282,174,981.38 2,011,821,519.82 2,011,821,519.82
payable
(2) Change of significant accounting estimates
The Company had no change of significant accounting estimates in Current Year.
V. Taxation
1. Major taxes (expenses) and tax rates
Tax(expenses) Tax base Tax rate
Income from sales of goods and from
VAT 16%/13%, 10%/9%, 6%, 5%
processing
Urban maintenance and
Turnover tax 5% or 7%
construction tax
Education surcharge Turnover tax 3%
Local education
Turnover tax 2%
surcharge
Corporate income tax Taxable income 15% or 25%
Original Book value of house
House Property Tax 1.2% or 12%
property×(1-30%)or annual rent income
Land use tax Actual land area used 1 Yuan/M2 to 15 Yuan /M2
2. Preferential tax and approval documents
The Company and its subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd. has passed the review for
high-tech enterprise certification on 20 July 2017, and continuous to enjoy 15% rate for the income tax for
State Hi-Tech Enterprise for three years term.
The subsidiary Zhongshan Changhong Electric Co., Ltd. has passed the review for high-tech enterprise
certification on 9 November 2017, and continuous to enjoy 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
The subsidiary Sichuan Hongmei Intelligent Technology Co., Ltd. has passed the qualification of high-tech
enterprise certification on 3 December 2018, and enjoys 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
Subsidiary Mianyang Meiling Refrigeration Co., Ltd. pass the review of Reply [Chuan JX Industrial H(2014)
No.408] from Sichuan Commission of Information on 9 May 2014, and the enterprise belongs to the
242
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
encourage industry listed in Directories of Industrial Structure Adjustment (2011) Revised (State Law
Reform Committee No. 21 Order); which enjoys the preferential tax policy of income tax for the western
development enterprise. And file in tax bureau with 15% rate for enterprise income tax since 2014 with
seven years term.
The subsidiary Guangdong Changhong Ridian Technology Co., Ltd. has passed the qualification of high-tech
enterprise certification on 2 December 2019, and enjoys 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
The subsidiary Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. has passed the
qualification of high-tech enterprise certification on 2 December 2019, and enjoys 15% rate for the income
tax for State Hi-Tech Enterprise for three years term.
The subsidiary Hefei Meiling Nonferrous Metal Products Co., Ltd. has passed the qualification of high-tech
enterprise certification on 26 October 2018, and enjoys 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
The subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. has passed the qualification of high-tech
enterprise certification on 16 September 2019, and enjoys 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
VI. Notes to the major items in the consolidated financial statements
With respect to the financial statements figures disclosed below, unless otherwise specified, ―year-beginning‖
refers to Jan. 1, 2019; ―year-end‖ refers to Dec. 31, 2019; ―Current Year‖ refers to Jan. 1 to Dec. 31, 2019;
―the last year‖ refers to Jan. 1 to Dec. 31, 2018; the currency is RMB.
1. Monetary fund
Item Balance at year-end Balance at year-begin
Cash 44,818.07 28,650.21
Bank deposit 4,771,094,609.77 4,029,892,318.85
Other Monetary fund 728,461,602.80 566,156,588.34
Total 5,499,601,030.64 4,596,077,557.40
Including: total amount deposited in overseas 25,326,137.49 13,722,335.29
Other monetary fund:
Item Amount at year-end
Cash deposit 725,366,572.06
Account of foreign currency for verification 1,691,803.84
Union Pay online 857,441.03
Taobao account 545,785.87
Total 728,461,602.80
Cash deposit which serves as non cash and cash equivalents refers to the banking acceptance draft deposit
243
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
with a term of over three months, amounting to 88,809,556.95 yuan, the amount restricted for used in
managed account was 1,501,998.18 yuan, balance of the loan guarantee for loans from overseas subsidiary
amounted as 23,232,000.00 yuan. China Union Pay, Taobao account and Ten Pay are all third party payment
platforms. Except for the deposit of 250,000.00 yuan, utilization of other balance is not subject to any
restriction.
Pars of the goods payment denominated in foreign currency should be transferred to reviewing accounts
which may not be used temporarily. Upon approval of such review, those payments may be transferred to
general accounts. Due to the relatively short time for reviewing foreign exchange, balance of the reviewing
accounts is not limited on utilization.
2. Tradable financial assets
Item Balance at year-end Balance at year-begin
Financial assets measured at fair value and whose changes are included
7,730,268.92 9,253,635.59
in current gains/losses
Including: Derivative financial assets 7,730,268.92 9,253,635.59
Tradable financial assets refers to the RMB forward exchange fund in Current Year
3. Note receivable
(1) Category of note receivable
Item Balance at year-end Balance at year-begin
Bank acceptance 1,676,718,999.50 2,143,384,546.78
Trade acceptance 190,350,000.00 244,446,340.96
Total 1,867,068,999.50 2,387,830,887.74
Less: bad debt provision 1,903,500.00 17,262,634.10
Book value 1,865,165,499.50 2,370,568,253.64
(2) Notes receivable already pledged by the Company at the end of year
Item Amount pledge at year-end
Bank acceptance 436,428,439.50
Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge parts
of the outstanding notes receivable to the bank. Pledge of the note receivable found more in 54. Assets with
ownership or the right to use restricted in VI.
(3) Notes endorsement or discount and undue on balance sheet date
Amount derecognition at Amount without
Item
year-end derecognition at year-end
244
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount derecognition at Amount without
Item
year-end derecognition at year-end
Bank acceptance 807,689,943.50
Trade acceptance 211,513,079.75
Total 1,019,203,023.25
(4) Notes transfer to account receivable due for failure implementation by drawer at year-end
(5) By accrual of bad debt provision
Amount at year-end
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
With bad debt provision
1,676,718,999.50 89.80% 1,676,718,999.50
accrual on single item
Including: bank acceptance 1,676,718,999.50 89.80% 1,676,718,999.50
with bad debt provision
190,350,000.00 10.20% 1,903,500.00 1.00% 188,446,500.00
accrual on portfolio
Including: trade acceptance 190,350,000.00 10.20% 1,903,500.00 1.00% 188,446,500.00
Total 1,867,068,999.50 100.00% 1,903,500.00 0.10% 1,865,165,499.50
(Continued)
Amount at year-begin
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
With bad debt provision
2,143,384,546.78 89.76% 2,143,384,546.78
accrual on single item
Including: bank acceptance 2,143,384,546.78 89.76% 2,143,384,546.78
with bad debt provision
244,446,340.96 10.24% 17,262,634.10 7.06% 227,183,706.86
accrual on portfolio
Including: trade acceptance 244,446,340.96 10.24% 17,262,634.10 7.06% 227,183,706.86
Total 2,387,830,887.74 100.00% 17,262,634.10 0.72% 2,370,568,253.64
1) Note receivable withdrawal bad debt provision by combination
Balance at year-end
Account age
Note receivable Bad debt provision Provision ratio
Within 3 months (3 months
190,350,000.00 1,903,500.00 1.00%
included)
(6) Provision and reversed in this year
Bad debt provision has 15,359,134.10 Yuan reversed and no collection for accounts charge off previous year
245
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No note receivable actually written off in this year.
4. Account receivable
(1) Category of account receivable
Amount at year-end
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal
746,199,837.64 51.49% 26,519,983.66 3.55% 719,679,853.98
bad debt provision by single item
Including: current payment with related
614,612,878.93 42.41% 614,612,878.93
party
Account receivable with letter of credit 52,306,821.66 3.61% 52,306,821.66
Account receivable with single minor
amount but withdrawal single item bad 79,280,137.05 5.47% 26,519,983.66 33.45% 52,760,153.39
debt provision
Account receivable withdrawal bad
703,054,274.21 48.51% 34,772,146.53 4.95% 668,282,127.68
debt provision by portfolio
Including: account receivable of
141,637,042.88 9.77% 3,940,749.05 2.78% 137,696,293.83
engineering customers
Receivables other than engineering
561,417,231.33 38.74% 30,831,397.48 5.49% 530,585,833.85
customers
Total 1,449,254,111.85 100.00% 61,292,130.19 4.23% 1,387,961,981.66
(Continued)
Amount at year-begin
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal
785,323,787.31 45.15% 22,978,942.60 2.93% 762,344,844.71
bad debt provision by single item
Including: current payment with related
693,467,089.57 39.87% 693,467,089.57
party
Account receivable with letter of credit 59,799,506.83 3.44% 59,799,506.83
Account receivable with single minor
amount but withdrawal single item bad 32,057,190.91 1.84% 22,978,942.60 71.68% 9,078,248.31
debt provision
Account receivable withdrawal bad
953,897,180.86 54.85% 42,879,889.28 4.50% 911,017,291.58
debt provision by portfolio
Including: account receivable of 108,819,204.37 6.26% 5,580,667.36 5.13% 103,238,537.01
246
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount at year-begin
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
engineering customers
Receivables other than engineering
845,077,976.49 48.59% 37,299,221.92 4.41% 807,778,754.57
customers
Total 1,739,220,968.17 100.00% 65,858,831.88 3.79% 1,673,362,136.29
1) Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minor
single receivables, and withdrawal bad debt provision by combination shows no risk characteristic of the
receivables, 111 clients involved.
2) Account receivable withdrawal bad debt provision by portfolio
A. Account receivable of engineering customers
Balance at year-end
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included) 76,229,630.55
Over 3 months and within 6 months (6 months
8,914,775.64
included)
Over 6 months and within one year (One year
38,785,066.51
included)
Over one year - within 2 years (2 years
16,376,786.83 3,275,357.37 20.00%
included)
Over 2 years - within 3 years (3 years
1,330,783.35 665,391.68 50.00%
included)
Over 3 years
Total 141,637,042.88 3,940,749.05
B. Receivables other than engineering customers
Balance at year-end
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included) 445,907,638.10 4,459,076.38 1.00%
Over 3 months and within 6 months (6
47,385,616.83 4,738,561.68 10.00%
months included)
Over 6 months and within one year (One
45,260,325.63 9,052,065.13 20.00%
year included)
Over one year - within 2 years (2 years 19,449,642.72 9,724,821.36 50.00%
247
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end
Account age
Account receivable Bad debt provision Provision ratio
included)
Over 2 years - within 3 years (3 years
2,785,675.62 2,228,540.50 80.00%
included)
Over 3 years 628,332.43 628,332.43 100.00%
Total 561,417,231.33 30,831,397.48
(2) By account age
Item Balance at year-end
Within 3 months (3 months included) 1,079,751,025.93
Over 3 months and within 6 months (6 months included) 127,558,018.61
Over 6 months and within one year (One year included) 160,010,922.40
Over one year - within 2 years (2 years included) 53,738,854.36
Over 2 years - within 3 years (3 years included) 14,995,538.09
Over 3 years 13,199,752.46
Total 1,449,254,111.85
(3) Account receivable bad debt reserves
Bad debt provision has 9,974,772.23 Yuan accrual in Current Year; bad debt provision of 1,936,952.67 Yuan
is switch-back; no trade receivables written-off in previous year was recovered this year.
(4) Account receivable actually written-off in Current Year
Item Written-off amount
Account receivable written-off 12,604,521.25
(5) Pledge of the account receivable at year-end can be found in 54. Assets with ownership or the right to use
restricted in VI.
(6) In Current Year, top five receivables collected by arrears party amounting to 641,239,275.10 yuan in total,
accounted for 44.25% of the receivables at balance of Current Year-end, the bad debt provision accrual
correspondingly amounting to 4,615,488.10 yuan at year-end balance.
(7) Account receivable terminated recognization due to the transfer of financial assets: nil
(8) No assets and liability transfer Account receivable and continues to involve at year-end.
248
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
5. Accounts paid in advance
(1) Age of account paid in advance
Amount at year-end Amount at year-begin
Item
Amount Ratio Amount Ratio
Within one year 23,665,135.72 93.65% 77,433,864.54 89.85%
1-2 years 945,375.38 3.74% 4,345,186.02 5.05%
2-3 years 331,164.45 1.31% 2,115,459.14 2.45%
Over 3 years 328,730.82 1.30% 2,285,949.56 2.65%
Total 25,270,406.37 100.00% 86,180,459.26 100.00%
(2) Top 5 of account paid in advance in balance at year-end amounting to 7,429,423.33 yuan, accounted for
29.40% of the account.
6. Other account receivable
Item Balance at year-end Balance at year-begin
Interest receivable 9,510,208.63 2,653,712.36
Dividend receivable 661,434.48
Other account receivable 87,070,251.69 60,539,028.57
Total 97,241,894.80 63,192,740.93
6.1 Interest receivable
(1) Category of interest receivable
Item Balance at year-end Balance at year-begin
Interest receivable from time deposit 9,510,208.63 1,892,948.46
Income receivable from financial products 760,763.90
Total 9,510,208.63 2,653,712.36
(2) Major overdue interest: nil
6.2 Dividend receivable
(1) Category of dividend receivable
Item Balance at year-end Balance at year-begin
Huishang Bank Corporation Limited 661,434.48
(2) Major dividends receivable with account age over 1 year: Nil
6.3 Other account receivable
249
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Category of other account receivable
Nature Bookbalance atyear-end Bookbalance atyear-begin
Export rebate 21,650,454.61 12,524,216.47
Cash deposit 49,470,316.18 32,292,605.75
Loans of employee‘s pretty cash 16,863,753.28 16,248,265.59
Related party not in consolidation statement 1,163,963.53 1,470,228.16
Advance money temporary 332,896.32 553,705.11
Other 2,645,856.29 1,278,050.57
Total 92,127,240.21 64,367,071.65
(2) Other account receivable bad debt reserves
First stage Second stage Third stage
Expected credit
Expected credit
Bad debt reserves Expected credit loss for the whole Total
loss for the whole
loss in next 12 duration (credit
duration (no credit
months impairment has
impairment)
occurred)
Balance as at 1 Jan. 2019 3,798,043.08 30,000.00 3,828,043.08
Book balance of Other account
receivable in Current Year as at — —
1 Jan. 2019
--Transfer to the second stage
-- Transfer to the third stage
-- Reversal to the second stage
-- Reversal to the first stage
Provision in Current Year 1,206,945.44 22,000.00 1,228,945.44
Reversal in Current Year
Conversion in Current Year
Write off in Current Year
Other change
Balance as at 31 Dec. 2019 5,004,988.52 52,000.00 5,056,988.52
(3) By account age
Account age Balance at year-end
Within 3 months (3 months included) 49,979,610.12
Over 3 months and within 6 months (6 months included) 6,227,315.96
Over 6 months and within one year (One year included) 13,471,367.20
250
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Account age Balance at year-end
over one year-within two years (2 years included) 14,685,221.16
Over 2 years - within 3 years (3 years included) 4,603,153.94
Over 3 years 3,160,571.83
Total 92,127,240.21
(4) No actual verification of other receivables in Current Year
(5) Top 5 other receivables collected by arrears party at balance of year-end:
Proportion in Balance at
Balance at Account total other year-end of
Name Nature
year-end age receivables at bad debt
year-end provision
SAT of Hefei Economic &
Tax rebate within 3
21,650,454.61 23.50%
Technological Development Zone months
Office of the lading group for
construction of new socialist Margin 6 months to
8,780,849.40 9.53%
1 year
countryside in Shunyi District
Development & Reform Bureau of
Margin 8,500,000.00 1-2 year 9.23% 1,700,000.00
Wangdu County
Development & Reform Bureau of 3-6 months
Margin 5,100,000.00 & 6 months 5.54%
Qingyuan District, Baoding City
to 1 year
Office of the Beijing Pinggu 6 months to
District New Socialist Countryside Margin 2,148,000.00 1 year & 2.33% 500,000.00
Construction over 3 years
Total 46,179,304.01 50.13% 2,200,000.00
(6) No other account receivable involved government subsidies at year-end.
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
7. Inventories
(1) Classification of inventories
Amount at year-end
Item
Book balance Impairment provision Book value
Raw materials 151,663,007.21 8,222,896.79 143,440,110.42
Stock commodities 1,067,657,584.34 85,915,212.96 981,742,371.38
Low value consumable articles 7,450,761.70 114,037.76 7,336,723.94
Goods in transit 215,898,485.10 4,872,592.90 211,025,892.20
Goods-in-process 10,181,803.47 10,181,803.47
251
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount at year-end
Item
Book balance Impairment provision Book value
Engineering construction 70,738,030.16 70,738,030.16
Deferred expense for mould 36,445,257.49 36,445,257.49
Total 1,560,034,929.47 99,124,740.41 1,460,910,189.06
(Continued)
Amount at year-begin
Item
Book balance Impairment provision Book value
Raw materials 143,684,247.48 12,759,205.28 130,925,042.20
Stock commodities 1,735,811,082.70 111,451,370.33 1,624,359,712.37
Low value consumable articles 9,282,634.55 300,940.36 8,981,694.19
Goods in transit 273,895,754.50 975,168.15 272,920,586.35
Goods-in-process 7,262,896.05 7,262,896.05
Engineering construction 70,933,181.87 70,933,181.87
Deferred expense for mould 59,053,460.64 59,053,460.64
Total 2,299,923,257.79 125,486,684.12 2,174,436,573.67
(2) Inventory falling price reserves
Increased in Current Year Decreased in Current Year
Amount at Switch-back or Amount at
Item
year-begin Provision Other Other year-end
conversion
Raw materials 12,759,205.28 1,225,475.31 5,761,783.80 8,222,896.79
Stock
111,451,370.33 15,592,047.64 41,128,205.01 85,915,212.96
commodities
Goods in
975,168.15 4,128,732.21 231,307.46 4,872,592.90
transit
Low value
consumable 300,940.36 186,902.60 114,037.76
articles
Total 125,486,684.12 20,946,255.16 47,308,198.87 99,124,740.41
(3) Provision for inventories
Reasons for the Switch-back
Item Specific basis for determining of net realizable value or conversion in Current
Year
Cost is higher than net realizable value (The processed products are
Raw materials
decline)
Stock Cost is higher than net realizable value (The market price at
commodities period-end fell)
Cost is higher than net realizable value (The market price at
Goods in transit
period-end fell)
Low value
consumable Cost is higher than net realizable value
articles
252
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
8. Other current assets
Item Balance at year-end Balance at year-begin
Financial products 1,110,000,000.00
Value-added tax to be deducted 43,809,823.14 62,040,151.40
Advance payment of income tax 18,010,305.85 12,057,771.72
Finance lease un-recognized 589,033.84
Pakistan local sales tax 1,337,337.27
Other unamortized expenses 446,565.70
Total 63,604,031.96 1,184,686,956.96
253
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
9. Long-term equity investment
Changes in Current Year Balance
at
Balance at Investment Other Other Provisio Balance at year-end
Invested enterprise Disin Declaration of
year-begin Additional profit and loss comprehen chang n for year-end of
vestm cash dividends Other
investment confirmed by sive income es of impair impairme
ent or profits
equity method adjustment equity ment nt
Associated companies
1.Changhong Ruba
note 1 9,049,695.63 -9,015,854.36 -33,841.27 -
Electric Company(Private)Ltd.
2.Hefei Xingmei Assets Management Co., Ltd. 9,420,099.27 -865,485.54 8,554,613.73
3.Sichuan Zhiyijia Network Technology Co.,
note 2 9,665,468.00 29,087,040.00 6,854,999.85 45,607,507.85
Ltd.
4.Hongyuan Ground Energy Heat Tech. Co.,
note 3 23,148,936.54 226,004.11 23,374,940.65
Ltd.
5.Sichuan Tianyou Guigu Technology Co.,
note 4 7,110,954.07 -4,308,730.52 2,802,223.55
Ltd.
6..Chengdu Guigu Environmental Tech. Co.,
note 5 9,157,388.27 -940,162.35 8,217,225.92
Ltd.
Total 67,552,541.78 29,087,040.00 -8,049,228.81 -33,841.27 - - - - 88,556,511.70
Note 1: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint venture agreement with RUBA Comprehensive Trading Company in 2017, pursuant to which, both parties
agreed to increase capital contribution of US$ 1,130,191.00, among which, Zhongshan Changhong subscribed to contribute US$ 452,076.00 (equivalent to 3,001,649.02 yuan on the actual contribution
date) according to the original shareholding proportion of 40% and RUBA Comprehensive Trading Company subscribed to contribute US$ 678,115.00 according to the original shareholding proportion of
60%.
Note 2: on 16 December 2014, the Company executed a joint venture agreement with its controlling shareholder Sichuan Changhong Electric Co., LTD, targeting to jointly establish Sichuan Zhiyijia
Network Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of 50 million yuan, among which, the Company made
contribution of 15 million yuan with shareholding proportion of 30% and Sichuan Changhong Electric Co., LTD made contribution of 35 million yuan with shareholding proportion of 70%. In 2019, the
254
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Company increase capital of 29,087,040.00 yuan (of which: 20 million yuan reckoned in registered capital and 9,087,040 yuan reckoned in capital reserves) to Zhiyijia with shareholding ratio up to 50%.
Note 3: subsidiary Sichuan Changhong Air Conditioner Co., Ltd (―Changhong Air Conditioner‖) and Hengyouyuan Technology Development Group Co., Ltd. (―Hengyouyuan‖) cooperated to establish
Hongyuan Ground Energy Heat Technology Co., Ltd. on 28 October 2015. The registered capital of the company is 50 million yuan, among which, Changhong Air Conditioner contributed 24.5 million
yuan, accounting for 49% of the registered capital, and Hengyouyuan contributed 25.5 million yuan, accounting for 51% of the registered capital.
Note 4: Sichuan Tianyou Guigu Technology Co., Ltd. was incorporated on 31 March 2015 with registered capital of 100 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution
of RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 20 million yuan, accounting for 20% of the
registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 20 million yuan, accounting for 20% of the registered capital. Mianyang Investment
Holding (Group) Co., Ltd made capital contribution of 5 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital
contribution of 5 million yuan, accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd made capital contribution of 10 million yuan, accounting for 10% of the registered capital.
Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 15 million yuan, accounting for 15% of the registered capital. In 2016, shareholders meeting of Sichuan Tianyou Guigu Technology Co.,
Ltd. agreed to reduce the 50 million Yuan capital, the shareholders are reducing the capital by ratio of share-holding. After capital reduction, subsidiary Changhong Air conditioner contributed 12.5 million
Yuan, representing 25% of the registered capital.
Note 5: Chengdu Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 with registered capital of 40 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution
of 10 million yuan, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 8 million yuan, accounting for 20% of the registered
capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 8 million yuan, accounting for 20% of the registered capital. Mianyang Investment Holding (Group)
Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 2
million yuan, accounting for 5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of 4 million yuan, accounting for 10% of the registered capital.
Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 6 million yuan, accounting for 15% of the registered capital.
255
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
10. Other non-current financial assets
Item Balance at year-end Balance at year-begin
Huishang Bank Corporation Limited 5,000,000.00 5,000,000.00
Hongyun Fund 40,000,000.00 40,000,000.00
Total 45,000,000.00 45,000,000.00
11. Investment real estate
(1) Investment real estate measured at costs
Item House and buildings Land use right Total
I. Original book value
1. Balance at year-begin 54,219,454.78 3,411,848.00 57,631,302.78
2. Increased in Current Year 52,865,867.91 52,865,867.91
(1) Fixed assets transfer-in 52,708,720.77 52,708,720.77
(2) Other 157,147.14 157,147.14
3. Decreased in Current Year
4. Balance at year-end 107,085,322.69 3,411,848.00 110,497,170.69
II. Accumulated depreciation and
accumulated amortization
1.Balance at year-begin 10,244,458.94 540,336.43 10,784,795.37
2. Increased in Current Year 2,928,783.72 439,831.47 3,368,615.19
(1) Provision or amortization 2,928,783.72 439,831.47 3,368,615.19
3. Decreased in Current Year
4. Balance at year-end 13,173,242.66 980,167.90 14,153,410.56
III. Impairment loss
IV. Book value
1. Ending book value 93,912,080.03 2,431,680.10 96,343,760.13
2. Opening book value 43,974,995.84 2,871,511.57 46,846,507.41
(2) No investment real estate measured by fair value at year-end.
(3) No particular about mortgage of investment property at year-end.
(4) Investment real estate without property certification held
Reasons for failing to complete
Item Original book value
property rights certificate
J04 molding workshop 31,235,715.44 Related property rights in procedure
J03 Jijia workshop 18,807,186.62 Related property rights in procedure
J20 air compressor station workshop 1,325,091.05 Related property rights in procedure
256
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Reasons for failing to complete
Item Original book value
property rights certificate
J18 opening and closing office 613,454.60 Related property rights in procedure
Total 51,981,447.71
12. Fixed assets
Item Balance at year-end Balance at year-begin
Fixed assets 2,104,697,429.76 1,658,081,495.03
Disposal of fixed assets 75,875,517.11 75,875,517.11
Total 2,180,572,946.87 1,733,957,012.14
12.1 Fixed assets
(1) Fixed assets
Machinery Transport
Item House and buildings Otherequipment Total
equipment equipment
I. Original book value
1. Balance at
1,190,214,714.89 1,267,678,633.84 31,075,507.90 193,835,760.40 2,682,804,617.03
year-begin
2. Increased in
386,624,268.28 297,725,124.94 4,491,137.03 29,057,870.84 717,898,401.09
Current Year
(1) Purchase 586,888.18 80,848,004.63 1,643,628.91 5,379,124.19 88,457,645.91
(2) Construction in progress
386,037,380.10 216,877,120.31 2,812,333.47 23,553,321.30 629,280,155.18
transfer-in
(3) Inventory transfer-in 117,007.40 117,007.40
(4) Increased for change
35,174.65 8,417.95 43,592.60
of foreign rate
3. Decreased in
52,899,287.42 61,885,481.74 2,257,130.76 43,453,744.37 160,495,644.29
Current Year
(1) Disposeor retirement 190,566.57 46,562,125.98 2,082,260.63 43,123,859.54 91,958,812.72
(2) Construction in progress
14,833,415.77 14,833,415.77
transfer-in
(3) Transfer to
52,708,720.77 52,708,720.77
investment real estate
(4) Decreased for
174,870.13 312,757.96 487,628.09
change of foreign rate
(5) Otherdecrease 0.08 489,939.99 17,126.87 507,066.94
4. Balance at year-end 1,523,939,695.75 1,503,518,277.04 33,309,514.17 179,439,886.87 3,240,207,373.83
II. Accumulated
depreciation
1. Balance at
243,448,450.52 679,782,715.32 16,638,654.43 82,743,850.92 1,022,613,671.19
year-begin
2. Increased in
44,360,216.73 128,473,045.07 2,814,053.10 15,330,732.37 190,978,047.27
Current Year
(1)Provision 44,360,216.73 128,473,045.07 2,808,515.01 15,168,783.14 190,810,559.95
257
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Machinery Transport
Item House and buildings Otherequipment Total
equipment equipment
(4) Increased for change
5,538.09 161,949.23 167,487.32
of foreign rate
3. Decreased in
79,340.23 48,112,970.83 1,944,811.14 29,676,487.81 79,813,610.01
Current Year
(1) Disposeor retirement 79,340.23 40,614,700.68 1,637,399.05 29,670,456.38 72,001,896.34
(2) Construction in progress
7,481,655.43 7,481,655.43
transfer-in
(3) Decreased for
307,412.09 307,412.09
change of foreign rate
(4) Otherdecrease 16,614.72 6,031.43 22,646.15
4. Balance at year-end 287,729,327.02 760,142,789.56 17,507,896.39 68,398,095.48 1,133,778,108.45
III. Impairment loss
1. Balance at
1,909,763.11 199,687.70 2,109,450.81
year-begin
2. Increased in
4,948.38 1,793,276.68 1,798,225.06
Current Year
3. Decreased in
330,485.35 1,845,354.90 2,175,840.25
Current Year
(1) Disposeor retirement 153,239.30 1,845,354.90 1,998,594.20
(2) Construction in progress
177,246.05 177,246.05
transfer-in
4. Balance at year-end 1,584,226.14 147,609.48 1,731,835.62
IV. Book value
1. Ending book value 1,236,210,368.73 741,791,261.34 15,801,617.78 110,894,181.91 2,104,697,429.76
2. Opening book value 946,766,264.37 585,986,155.41 14,436,853.47 110,892,221.78 1,658,081,495.03
The new fixed assets in this year mainly due to the 629,280,155.18 yuan transfer from construction in
process; decrease of the fixed assets in Current Year mainly including the investment real estate transfer-in,
renewal of the assets transfer to construction in progress and assets dispose for retirement
(2) No fixed assets temporary idle at year-end.
(3) Fixed assets for collateral at year-end
Accumulated
Item Original book value Impairment loss Net book value
depreciation
Houseandbuildings 423,761,109.88 97,457,552.80 326,303,557.08
(4) Fixed assets leased through financing lease at year-end.
Accumulated
Item Original book value Impairment loss Net book value
depreciation
Machinery equipment 2,976,714.26 761,157.79 2,215,556.47
(5) Fixed assets leased through operating lease at year-end.
258
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Accumulated
Item Original book value Impairment loss Net book value
depreciation
House and buildings 16,531,374.51 4,769,213.95 11,762,160.56
Machinery equipment 64,511,884.69 14,188,442.94 50,323,441.75
Other equipment 3,092,038.66 979,768.50 2,112,270.16
Total 84,135,297.86 19,937,425.39 64,197,872.47
(6) Fixed assets without property certificate
Item Bookvalue Reasonofnotcompletethepropertycertificate
J01workshop 30,701,587.00 Relatedpropertyrightsinprocedure
J02workshop 33,123,926.00 Relatedpropertyrightsinprocedure
J05evaporatorandcondenserworkshop 24,446,636.46 Relatedpropertyrightsinprocedure
J06centralair-conditionerworkshop 18,605,818.16 Relatedpropertyrightsinprocedure
J07electricalworkshop 36,789,666.41 Relatedpropertyrightsinprocedure
J9rawmaterialwarehouse 6,629,363.24 Relatedpropertyrightsinprocedure
J10rawmaterialwarehouse 4,908,909.14 Relatedpropertyrightsinprocedure
J52finishedproductwarehouse 9,302,752.29 Relatedpropertyrightsinprocedure
J11rawmaterialwarehouse 4,790,635.87 Relatedpropertyrightsinprocedure
J15houseofrefrigerantforklift 1,399,454.36 Relatedpropertyrightsinprocedure
J16chemicalstorage 1,256,727.47 Relatedpropertyrightsinprocedure
J17chemicalstorage 1,374,363.67 Relatedpropertyrightsinprocedure
J19mainguardroom 345,454.40 Relatedpropertyrightsinprocedure
J19Aguardroom 218,182.27 Relatedpropertyrightsinprocedure
J19Bguardroom 218,181.46 Relatedpropertyrightsinprocedure
J19Cguardroom 218,181.73 Relatedpropertyrightsinprocedure
J08packingmaterialswarehouse 4,513,761.47 Relatedpropertyrightsinprocedure
J50finishedproductwarehouse 17,374,678.90 Relatedpropertyrightsinprocedure
J51finishedproductwarehouse 16,815,963.30 Relatedpropertyrightsinprocedure
J53finishedproductwarehouse 12,923,352.99 Relatedpropertyrightsinprocedure
J54finishedproductwarehouse 12,018,679.94 Relatedpropertyrightsinprocedure
J55finishedproductwarehouse 11,009,174.31 Relatedpropertyrightsinprocedure
J56finishedproductwarehouse 11,009,174.31 Relatedpropertyrightsinprocedure
J19Dguardroom 157,798.17 Relatedpropertyrightsinprocedure
J19Eguardroom 157,798.17 Relatedpropertyrightsinprocedure
Testingandexperimentcenterbuilding 42,638,726.80 Relatedpropertyrightsinprocedure
IIsectioncanteenoflivingarea 26,029,822.03 Relatedpropertyrightsinprocedure
4#makeshiftshelter(dormitorybuildingtransfertocapital) 6,651,069.97 Relatedpropertyrightsinprocedure
Freezersubsidiarystation 4,337,337.08 Relatedpropertyrightsinprocedure
259
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Bookvalue Reasonofnotcompletethepropertycertificate
Hotwaterroomforlivingarea 2,914,385.29 Relatedpropertyrightsinprocedure
Circulatingwaterpumproom/equipmentroom 1,308,241.16 Relatedpropertyrightsinprocedure
Freezersalvagestation 349,166.88 Relatedpropertyrightsinprocedure
Freezer-7#Workshopinspectionroom 233,741.56 Relatedpropertyrightsinprocedure
Total 344,772,712.26
(7) No fixed assets held for sale at year-end
12.2 Disposal of fixed assets
Amount at Amount at Reasons for disposal
Item
year-end year-begin transferred
Relocation for land
Relevant assets disposal for reserved lands 75,875,517.11 75,875,517.11
reserve
Pursuant to the urban planning requirements of the People‘s Government of Hefei city, Hefei Land Reserve Center plans to
purchase and store the land use right of an integrated economic development zone of the Company located at Longgang of
Hefei with an area of 103,978.9 sq.m. (Approximately 155.9684 mu, Land Use Right Certificate No.: Dong Guo Yong (2004)
Zi No. 0200, the stated use of the land is for industrial purpose). The estimated consideration for purchasing and storage is
RMB74.48 million. The land is mainly used for the Company‘s warehouse, product finishing workshop and the factory of
Zhongke Meiling. Pursuant to the purchasing and storage requirements of land use right, the land will be purchased and stored
with vacant possession. In April 2013, the Company completed the relocation of occupants of the premises, and the net fixed
assets in relation to the land will transfer as disposal, accounting treatment will be conduct in line with relevant rules upon
receiving of the relocation compensation.
Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of Feidong county, the land
reserve center of Feidong county will purchase and store the land use right of an economic development zone located at
Feidong county, Hefei city, which is owned by the Company‘s subordinate companies, Equator Electric and Equator Home
Appliance, respectively, with an area of 19,245.09 sq.m. (Approximately 28.87 mu, Land Use Right Certificate No.: Dong
Guo Yong (2008) No. 0366, the stated use of the land is for industrial purpose) and an area of 46,161.9 sq.m. (Approximately
69.24 mu, Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0367, the stated use of the land is for industrial
purpose). The total consideration for purchasing and storage is approximately 36 million yuan, of which the consideration for
the land use right owned by Equator Electric and Equator Home Appliance is approximately 10.59 million yuan and 25.41
million yuan, respectively. The Company has completed the relocation of occupants of the premises, and the net fixed assets in
relation to the land will transfer as disposal, accounting treatment will be conduct in line with relevant rules upon receiving of
the relocation compensation.
No impairment of relevant assets disposal for reserved lands at year-end.
13. Construction in progress
260
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Balance at year-end Balance at year-begin
Construction in progress 252,494,792.31 464,558,352.60
13.1 Construction in progress
(1) Details of construction in progress
Balance at year-end Balance at year-begin
Imp Imp
Item airm airm
Bookbalance ent Bookvalue Bookbalance ent Bookvalue
provi prov
sion ision
Changhong Air Conditioner-
relocation of production base and 115,113,691.81 115,113,691.81 320,579,598.28 320,579,598.28
upgrading & expansion
Construction of washing machine
72,019,665.48 72,019,665.48 54,004,325.69 54,004,325.69
plant
Other petty projects 20,870,100.43 20,870,100.43 15,562,870.33 15,562,870.33
Equipment to be installed 16,790,792.47 16,790,792.47 1,416,851.00 1,416,851.00
Project of the application of MES
7,259,356.79 7,259,356.79 3,545,478.16 3,545,478.16
system during manufacturing
Capacity enlargement and
technology improvement project for 6,848,640.93 6,848,640.93 3,188,095.36 3,188,095.36
Air-conditioner Company
Construction of intelligent
4,441,461.82 4,441,461.82 31,389,804.22 31,389,804.22
manufacturing
Technical transformation project of
2,670,888.52 2,670,888.52 4,119,899.02 4,119,899.02
Zhongshan Changhong
Construction of laboratory
2,283,246.03 2,283,246.03 4,847,375.61 4,847,375.61
(inspection center)
Line modification for R290 1,769,230.77 1,769,230.77 1,769,230.77 1,769,230.77
Production efficiency improvement
project of the Line C for the overseas 1,327,155.18 1,327,155.18 2,112,500.01 2,112,500.01
Refrigerator Manufacture Company
Upgrade project for the production
line of Mianyang Meiling Intelligent 666,500.00 666,500.00 3,322,079.08 3,322,079.08
Refrigerator
Jiangxi Meiling – construction of the
production line for producing one
434,062.08 434,062.08 5,065,550.61 5,065,550.61
million energy-saving smart
refrigeration annually
Reform project of the EPS house of
2,826,825.99 2,826,825.99
the Company
Temperature control project of the
manufacturing Company of big 4,084,254.68 4,084,254.68
refrigerator
Improvement for the double-gun
2,951,970.77 2,951,970.77
injection of line J
Project of cancel spraying for the
2,021,643.02 2,021,643.02
side panel of refrigerator‘s door
Reform of the overseas air patenting
line; project of cabinet foam line for 1,750,000.00 1,750,000.00
Line D
261
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end Balance at year-begin
Imp Imp
Item airm airm
Bookbalance ent Bookvalue Bookbalance ent Bookvalue
provi prov
sion ision
Total 252,494,792.31 252,494,792.31 464,558,352.60 464,558,352.60
(1) Changes in significant construction in progress
Transfer to
Book balance Other Book
Increase in fixed assets in
Projects at balance at Source offunds
Current Year decrease
period-begin Current Year year-end
Construction of
laboratory 4,847,375.61 24,897,451.83 27,421,822.48 39,758.93 2,283,246.03 Raise
(inspection center)
Construction of
Self-raised/
washing machine 54,004,325.69 63,026,900.67 40,163,569.02 4,847,991.86 72,019,665.48
Raise
plant
Construction of
intelligent 31,389,804.22 15,926,098.17 42,137,815.26 736,625.31 4,441,461.82 Raise
manufacturing
Changhong Air
Conditioner-
relocation of
320,579,598.28 398,819,300.06 604,285,206.53 115,113,691.81 Self-raised
production base and
upgrading &
expansion
(Continued)
Interest
including:
Budget (in Proportion of Accumulated capitaliza
interest
10 project Progres amount of tion rate
Projects capitalized
thousand investment in s interest of
amount of
Yuan) budget capitalization Current
Current Year
Year
Construction of laboratory
10,748.00 79.31% 90%
(inspection center)
Construction of washing
37,121.00 77.54% 80%
machine plant
Construction of intelligent
26,128.00 73.47% 95%
manufacturing
Changhong Air Conditioner-
relocation of production base 84,791.01 84.84% 95% 2,570,143.02
and upgrading & expansion
(2) No impairment occurred for construction in progress at year-end
14. Intangible assets
(1) According to intangible assets item
262
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Trademark Non-patent
Item Land use right Other Total
special right technology
I. Original book
value
1. Balance at
750,239,779.01 283,292,439.34 391,210,232.68 5,884,724.81 1,430,627,175.84
year-begin
2. Increased in
116,070,470.55 126,039,983.32 8,814,153.52 250,924,607.39
Current Year
(1) Purchase 116,070,470.55 996,096.28 117,066,566.83
(2) Internal
126,039,983.32 7,818,057.24 133,858,040.56
research
3. Decreased in
99,611,516.26 99,611,516.26
Current Year
(1) Disposal 99,611,516.26 99,611,516.26
(2) Other
decreased
4. Balance at
866,310,249.56 283,292,439.34 417,638,699.74 14,698,878.33 1,581,940,266.97
year-end
II. Accumulated
depreciation
1. Balance at
144,782,112.28 278,725,077.89 188,556,900.90 983,125.83 613,047,216.90
year-begin
2. Increased in
16,164,616.73 3,882,886.80 94,820,627.33 1,440,043.84 116,308,174.70
Current Year
(1) Provision 16,164,616.73 3,882,886.80 94,820,627.33 1,440,043.84 116,308,174.70
3. Decreased in
400,457.33 89,078,182.89 89,478,640.22
Current Year
(1) Disposal 89,078,182.89 89,078,182.89
(2) Other
400,457.33 400,457.33
decreased
4. Balance at
160,546,271.68 282,607,964.69 194,299,345.34 2,423,169.67 639,876,751.38
year-end
III. Impairment
4,306,556.42 4,508,495.33 8,815,051.75
loss
IV. Book value
1. Ending book
705,763,977.88 684,474.65 219,032,797.98 7,767,213.33 933,248,463.84
value
2. Opening book
605,457,666.73 4,567,361.45 202,653,331.78 4,901,598.98 817,579,958.94
value
The intangible assets resulted from internal research takes 8.46% of the balance of intangible assets at
year-end
(2) No land use right without property certification done at year-end
(3) Up to end of the 2019, mortgage of intangible assets is as follows:
Name Property certificate serials Area(M2) Net book value Note
Land use right HGYJCZi No.: 0121 27,120.22 18,296,229.31
Land use right Wan(2019) Hefei Property No.: 477,550.03 246,761,869.37
263
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Name Property certificate serials Area(M2) Net book value Note
1148244/1148249/1148243/1148240/1148248/1148
246/1148241/1148238/1149101/1148242/1148245/
1148239/1148237/1148250/1148247/1149102
Wan(2019) Feixi County Property No.:
Land use right 33,383.10 13,866,880.01
0061435/0061445
Wan(2019) Feixi County Property No.:
Land use right 0061456/0061447/0061438/0061440/0061452/006 82,850.51 19,080,603.99
1450/0061430/0061657
Total 620,903.86 298,005,582.68
15. Development expense
Increased in Current
Decreased in Current Year
Year
Balance at Included in Balance at
Item Internal
year-begin Othe current Confirmed as year-end
development Other
r profits and intangible assets
expenditure
losses
Technology
development for 50,360,181.92 54,087,605.91 1,401,408.90 63,058,463.95 39,987,914.98
Air-conditioner
Technology
development for 57,383,653.72 73,438,034.63 842,954.39 68,887,989.37 61,090,744.59
refrigerator
Other
technology 467,130.96 1,444,456.28 1,911,587.24
development
Total 108,210,966.60 128,970,096.82 2,244,363.29 133,858,040.56 101,078,659.57
16. Goodwill
(1) Original value of goodwill
Increased in
Decreased in Current Year
Current Year
Balance at Formation Formation Balance at
Invested enterprise
year-begin from from year-end
Other Other
enterprise enterprise
merger merger
Hefei Meiling Group Holdings
3,553,367.77 3,553,367.77
Limited
Guangxi Huidian Home
5,313,913.50 5,313,913.50
Appliance Co., Ltd.
Total 8,867,281.27 8,867,281.27
(2) Goodwill Impairment loss
Increased in
Balance at Decreased in Current Year Balance at
Invested enterprise Current Year
year-begin year-end
Provision Other Provision Other
264
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Increased in
Balance at Decreased in Current Year Balance at
Invested enterprise Current Year
year-begin year-end
Provision Other Provision Other
Hefei Meiling Group Holdings
3,553,367.77 3,553,367.77
Limited
Guangxi Huidian Home
5,313,913.50 5,313,913.50
Appliance Co., Ltd.
Total 8,867,281.27 8,867,281.27
Note: The Company‘s goodwill has been fully accrued for impairment reserves at year-end.
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets without the offset
Balance at year-end Balance at year-begin
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized
65,074,900.25 9,761,235.04 163,800,143.96 25,443,182.41
from property depreciation preparation
Deferred income tax assets recognized
158,742,319.21 23,811,347.88 266,641,323.73 39,996,198.56
from accrual liability
Deferred income tax assets recognized
16,996,022.45 2,549,403.37 23,369,410.19 3,505,411.53
from Dismission welfare
Deferred income tax assets recognized
109,766,307.31 16,464,946.10 113,016,902.89 16,952,535.44
from deferred income
Deferred income tax assets recognized from
295,681,201.10 44,352,180.17 125,576,447.96 18,836,467.19
ir-reparable losses
Deferred income tax assets recognized from
46,033,136.96 6,904,970.53
changes in the fair value
Accrued income tax assets 3,427,103.89 514,065.58 3,765,940.62 564,891.09
Total 649,687,854.21 97,453,178.14 742,203,306.31 112,203,656.75
The Company‘s long-term equity investment impairment provisions are the investments in its subsidiaries, Changmei
Technology Co., Ltd. and Meiling Candy Washing Machine Co., Ltd., these two subsidiaries are expected to be cancelled in
2020, and the Company also confirmed deferred income tax assets while confirming the impairment provisions. The
subsidiaries have unrecovered losses, at the consolidation level, the deferred income tax assets recognized in the Company‘s
long-term equity investment impairment provisions are adjusted to be the deferred income tax assets generated from the
recoverable losses.
(2) Deferred income tax liabilities without the offset
Balance at year-end Balance at year-begin
Item Taxable Deferred Taxable Deferred
temporary income tax temporary income tax
differences liability differences liability
Recognized by fixed assets depreciation 36,760,223.60 5,514,033.54 20,657,994.05 3,098,699.11
Recognized by changes in fair value 4,951,504.00 742,725.60
265
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end Balance at year-begin
Item Taxable Deferred Taxable Deferred
temporary income tax temporary income tax
differences liability differences liability
Total 41,711,727.60 6,256,759.14 20,657,994.05 3,098,699.11
(3) Details of unrecognized deferred income tax assets
Item Balance at year-end Balance at year-begin
Deductible temporary difference 148,160,001.57 44,702,678.05
Deductible loss 721,832,411.79 487,578,430.48
Total 869,992,413.36 532,281,108.53
18. Short-term loans
(1) Category of short-term loans
Category Balance at year-end Balance at year-begin
Loan in pledge 147,438,160.00 199,260,520.00
Guaranteed loan 46,794,941.14 9,200,000.00
Loan in credit 909,757,944.82 1,876,648,262.82
Bill financing 251,265,146.80
Total 1,103,991,045.96 2,336,373,929.62
Short-term loans at Current Year-end:
1) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with one
year in term. Term of borrowing from 23 January 2019 to 23 January 2020. Fixed interest rate of 3.57%, the
loan amount is 89,000,000.00 Yuan.
2) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with 365
days in term. Term of borrowing from 8 March 2019 to 6 March 2020. Fixed interest rate of 3.50%, the loan
amount is 200,000,000.00 Yuan.
3) The Company entered into an Opening Domestic Letter of Credit Contract with economic development
zone Branch of Huishang Bank Corporation Limited. Term of borrowing from 16 April 2019 to 10 April
2020. Borrowing rate of 3.70%, the loan amount is 700,000,000.00 Yuan.
4) The Company entered into a Tripartite Agreement on Buyer‘s Interest Payment under Domestic L/C with
Hefei Branch of China Everbright Bank, term of borrowing from 16 April 2019 to 10 April 2020. Borrowing
rate of 3.48%, the loan amount is 80,000,000.00 Yuan.
5) The Company entered into a Liquidity Loan Contract with Anhui Province Branch of Bank of
Communications with one year in term. Term of borrowing from 25 April 2019 to 25 April 2020. Fixed
266
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
interest rate of 4.35%, the loan amount is 70,000,000.00 Yuan.
6) The Company entered into a Domestic L/C Opening Contract with Hefei Changjiang East Road Branch of
ICBC. Term of borrowing from 27 May 2019 to 18 May 2020. Fixed interest rate of 3.78%, the loan amount
is 25,000,000.00 Yuan.
7)The Company entered into a Contract for Loans in RMB with Huaining Road Branch of Hefei Science
&Technology Rural Commercial Bank, contract agreed to has 12 months in terms, and term of borrowing
from 19 August 2019 to 19 August 2020. Fixed interest rate of 4.5675%, the loan amount is 5,000,000.00
Yuan.
8) The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank of
Communication, contract agreed to has 12 months in terms, and interest counted from the date of loan entry,
duration of credit is from 24 Sept. 2019 to 24 Sept. 2020; Fixed interest rate of 4.00 %, the loan amount is
100,000,000.00 Yuan.
9)The Company entered into a Contract for Loans of Working Capital with Anhui Development Zone Branch
of Bank of China, contract agreed to has 12 months in terms, and counted from the actual withdrawal date.
The Company withdrawal on 26 September 2019. Term of borrowing from 26 September 2019 to 25
September 2020. every 12 months is a floating period based on floating rate method, the loan amount is
50,000,000.00 Yuan.
10)The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank of
Communication, contract agreed to has 12 months at most in terms, and counted from the actual lending day.
The Company withdrawal on 26 November 2019. Term of borrowing from 26 November 2019 to 25
September 2020. Fixed interest rate of 4.00%, the loan amount is 100,000,000.00 Yuan.
11)The Company entered into a Contract for Opening the Domestic L/C with Bank of Jiujiang, the forfaiting
cost is 3.3%, opening charge is 0.15% and comprehensive cost is 3.45%. Term of borrowing from 23 October
2019 to 22 October 2020. Fixed interest rate of 3.3%, the loan amount is 50,000,000.00 Yuan.
12)The Company entered into a Forfaiting Business Contract with Anhui Branch of Bank of Communication,
applying a short-term loans of 100,000,000.00 yuan with bill pledge method. Term of borrowing from 27
December 2019 to 24 December 2020. Fixed interest rate of 3.25%.
13) The Company entered into a Domestic L/C Opening Contract with Bank of Jiujiang, subsidiary -Jiangxi
Meiling Electric Appliance Co., Ltd. applying a short-term loans of 70,757,944.82 yuan to Hefei branch of
Bank of Jiujiang with L/C buy-out without recourse. Term of borrowing from 14 March 2019 to 13 March
2020. Borrowing rate of 3.35%.
14)The subsidiary - Zhongshan Changhong Electric Co., Ltd entered into a International Trade Financing
267
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Contract of Agricultural Bank of China with Zhongshan Nantou Branch of ABC, the subsidiary applying a
short-term loans of $ 2,500,000.00 to Zhongshan Nantou Branch of ABC with export invoice financing.
Term of borrowing from 26 December 2019 to 18 June 2020. Borrowing rate of 2.67%.
15)The subsidiary - Zhongshan Changhong Electric Co., Ltd entered into a International Trade Financing
Contract of China Construction Bank with Zhongshan Branch of CCB, the subsidiary applying a short-term
loans of $ 4,300,000.00 to Zhongshan Branch of CCB with export invoice financing. Term of borrowing
from 23 December 2019 to 19 June 2020. Borrowing rate of 2.90%.
16) Subsidiary - Changhong Ruba Trading Company(Private) Limited entered into a Loan Agreement
with Karachi Branch of Bank of China, applying a short-term loans of 395,300,000.00 rupees in January
2019 through the guarantee under Changhong Meiling. Term of borrowing from 28 January 2019 to 28
January 2020. Borrowing rate of 10.84%.
17) Subsidiary - Changhong Ruba Trading Company(Private) Limited entered into a Loan Agreement
with Karachi Branch of Bank of China, applying a short-term loans of 439,290,000.00 rupees in
December 2019 through the guarantee under Changhong Meiling. Term of borrowing from 23 December
2019 to 23 December 2020. Fixed interest rate of 14.04%.
18) The subsidiary - Zhongke Meiling Company entered into a Contract for Loans of Working Capital with
Anhui Branch of Bank of China, applying a short-term loans of 9,200,000.00 yuan to Anhui Branch of
BOC with guarantee under the Company. Term of borrowing from 29 June 2019 to 29 June 2020, and
adopt a floating rate, a floating cycle is every 12 months.
(2) No overdue short-term loans outstanding at year-end.
19. Tradable financial liability
Item Balance at year-end Balance at year-begin
Tradable financial liability 1,081,534.93 55,586,666.70
Including: Derivative financial liability 1,081,534.93 55,586,666.70
20. Note payable
Category Balance at year-end Balance at year-begin
Bank acceptance 3,298,019,669.51 3,284,348,686.53
Trade acceptance 192,251,812.89 443,405,713.07
Total 3,490,271,482.40 3,727,754,399.60
Note: no notes expired at period-end without paid
21. Account payable
268
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Account age
Item Balance at year-end Balance at year-begin
Total 2,343,116,374.58 2,282,174,981.38
Including:overoneyear 76,194,618.91 75,298,651.56
(2) No major account payable with over one year book age at year-end.
22. Account received in advance
(1) Account age
Item Balance at year-end Balance at year-begin
Total 425,149,194.97 354,551,354.80
Including: over one year 20,537,871.81 46,153,276.08
(2) No major account received in advance with over one year age at year-end
23. Wages payable
(1) Category
Balance at Increased in Decreased in Balance at
Item
year-begin Current Year Current Year year-end
Short-term compensation 155,874,082.33 1,486,043,036.01 1,464,514,212.31 177,402,906.03
After-service welfare- defined
3,468,236.56 97,793,926.82 93,808,369.66 7,453,793.72
contribution plans
Dismiss welfare 4,296,308.90 23,888,181.49 16,534,015.46 11,650,474.93
Total 163,638,627.79 1,607,725,144.32 1,574,856,597.43 196,507,174.68
(2) Short-term compensation
Balance at Increased in Decreased in Balance at
Item
year-begin Current Year Current Year year-end
Wages,bonuses, allowances and subsidies 148,199,467.67 1,354,480,778.53 1,332,391,510.98 170,288,735.22
Welfare for workers and staff 201,843.00 41,734,765.59 41,297,300.23 639,308.36
Social insurance 1,939,268.68 45,070,325.52 45,239,348.52 1,770,245.68
Including: Medical insurance 1,745,030.71 41,963,965.09 42,091,207.07 1,617,788.73
Work injury insurance 128,176.10 1,622,138.45 1,687,123.04 63,191.51
Maternity insurance 66,061.87 1,484,221.98 1,461,018.41 89,265.44
Housing accumulation fund 3,685,537.29 39,998,822.22 40,098,243.02 3,586,116.49
Labor union expenditure and
1,847,965.69 4,758,344.15 5,487,809.56 1,118,500.28
personnel education expense
269
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at Increased in Decreased in Balance at
Item
year-begin Current Year Current Year year-end
Total 155,874,082.33 1,486,043,036.01 1,464,514,212.31 177,402,906.03
(3) Defined contribution plans
Balance at Increased in Decreased in Balance at
Item
year-begin Current Year Current Year year-end
Basic endowment insurance 2,680,604.52 92,532,876.66 89,999,604.82 5,213,876.36
Unemployment insurance 787,632.04 5,261,050.16 3,808,764.84 2,239,917.36
Total 3,468,236.56 97,793,926.82 93,808,369.66 7,453,793.72
24. Tax payable
Item Balance at year-end Balance at year-begin
Value-added tax 31,073,647.86 63,860,640.63
Enterprise income tax 2,100,004.27 3,112,632.27
Individual income tax 3,080,366.29 2,384,041.50
Urban maintenance and construction
3,279,877.94 8,430,591.08
tax
Real estate tax 6,023,111.75 6,527,533.98
Land use tax 2,757,210.52 2,870,637.90
Educational surtax 2,389,535.13 6,043,987.22
Stamp tax 3,033,620.58 1,481,453.67
Construction fund of Water
759,372.01 547,748.65
Conservancy Projects
Treatment fund for abandon electrics &
12,489,459.00 14,421,381.00
electronics
Other 1,572,186.31 72,784.27
Total 68,558,391.66 109,753,432.17
25. Other account payable
Item Balance at year-end Balance at year-begin
Interest payable 12,340,385.61 7,519,756.26
Dividend payable 3,579,491.94 17,317,286.45
Other account payable 673,557,725.66 635,483,317.55
Total 689,477,603.21 660,320,360.26
25.1 Interest payable
270
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Category
Item Balance at year-end Balance at year-begin
Interest on long-term borrowings for
466,340.02 166,494.25
repayment of principal of installment maturity
Interest of short-term loans 11,874,045.59 7,353,262.01
Total 12,340,385.61 7,519,756.26
(2) No significant overdue and unpaid interest at year-end.
25.2 Dividends payable
Item Balance at year-end Balance at year-begin
City Insurance company 598,054.05 524,279.25
BOC- Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50
Hefei Branch of BOC 299,027.00 262,139.60
Hefei collective industry association 299,026.54 262,139.20
Entrust Investment Wuhu of Provincial ABC 239,221.62 209,711.70
Sichuan Changhong Electric Co., Ltd. 14,082,358.08
Other units 1,990,465.23 1,822,961.12
Total 3,579,491.94 17,317,286.45
Note: Balance at year-end refers to the common dividends that not receiving by shareholders.
25.3 Other account payable
(1) Other account payable by nature
Nature Balance at year-end Balance at year-begin
1.Accrued expenses (expenses occurred without reimbursed) 467,314,369.66
487,992,668.34
2. Receivables received temporary and deducted temporary 17,869,297.44
14,950,208.02
3.Deposit, margin 92,960,934.56
114,946,522.03
4.Not the come-and-go with related parties in statement scope 14,101,588.30 7,993,374.18
5. Other 49,345,341.71
41,566,738.97
Total 635,483,317.55
673,557,725.66
(2) At end of Current Year, the major other account payable with account age over one year mainly refers to
the sale of margin.
271
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
26. Non-current liability due within one year
(1) Classification of non-current liability due within one year
Item Balance at year-end Balance at year-begin
Long term borrowings due within one year 250,300,000.00
Long term account payable due within one year 1,708,193.90 7,000,000.00
Deferred income transfer to gains and losses within one year 16,382,737.85
Total 1,708,193.90 273,682,737.85
27. Long term borrowings
(1) Category of long term borrowings
Category Amount at year-end Amount at year-begin
Loan in mortgage 101,280,000.00 1,920,000.00
Loan in credit 300,000,000.00
Total 401,280,000.00 1,920,000.00
(2) Long-term borrowings at year-end
Foreign Amount at Amount at
Borrowing Returning Interest
Loan from currenc year-end year-begin
day day rate
y (RMB) (RMB)
Ministry of Finance of Hefei
Note 1 2006/11/09 2021/11/08 RMB 1.80% 1,280,000.00 1,920,000.00
EIBC (Export-Import Bank)
2019/05/30 2021/05/30 RMB 3.685% 300,000,000.00
Anhui Province Branch Note 2
EIBC (Export-Import Bank)
2019/12/23 2026/12/23 RMB 4.605% 100,000,000.00
Anhui Province Branch Note 3
Total 401,280,000.00 1,920,000.00
1) In August of 2006, the Company signed Asset Mortgage Agreement with Ministry of Finance of Hefei. It
takes five industry crusher chambers which cover an area of 2,322.98 square meters as mortgage for the
Company to get the lending of treasury bond fund which has 15-year term and worthy of RMB 7,040,000
from the Ministry of Finance of Hefei. The capital on-lending began to bear interest from the appropriate
date (November 9, 2006), which would be paid by stages in the loan period to Ministry of Finance of Hefei
by the Company. The first four years were grace period, during which the annual interest rate was subject to
floating interest rate (the annual interest rate was the annual interest rate of one year fixed deposit plus 0.3%).
On 1 March 2013, according to the Letter Relating to Ceasing Process of Other Securities in respect of the
Properties in Feidong Longgang Industrial Park of Hefei Meiling Co., Ltd. (HCJ (2006) No.85) issued by the
272
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
finance office of Hefei, Meiling commenced the national purchase of its land parcels in Longgang in
compliance with the land planning of Hefei municipal government, which required its properties in
Longgang land parcel to be unrestricted. The real estate for mortgage lifted in 2006 of the Company with
registration No. HGYJCZ No.0121 which was used as the security for treasury bonds lending capital (details
were set out in Note VI.14).
2) The Company signed a ―Loan Contract (Export Seller‘s Credit)‖ with the Anhui Branch of the
Export-Import Bank, the contract period is 24 months, counting from the actual withdrawal date, the actual
withdrawal date of the company is May 30, 2019, and the loan period is from May 30, 2019 to May 30, 2021.
The execution rate of the seller‘s credit interest rate is increased by 10%, and the interest is paid quarterly,
the settlement dates are March 20, June 20, September 20, and December 20, and the ending balance is
300,000,000.00 yuan.
3) The Company signed a ―Loan Contract (Promoting Domestic Opening-up of Loans-Fixed Assets)‖ with
Anhui Branch of the Export-Import Bank of China, taking fixed assets and intangible assets of the Company
as mortgages for the long-term loans of 100 million yuan. The contractual term is 84 months, the borrowing
period is from December 23, 2019 to December 23, 2026, the borrowing rate is determined by the market
quoted interest rate of loans with a term of more than 5 years minus 0.195%, which fluctuates annually, and
the loan amount is 100,000,000.0 yuan.
28. Long-term payable
Item Balance at year-end Balance at year-begin
Long-term account payable 1,486,921.44 3,487,208.00
Special payable 1,530,000.00 1,530,000.00
Total 3,016,921.44 5,017,208.00
28.1 Classify by nature
Nature Balance at year-end Balance at year-begin
Financing lease 1,486,921.44 3,487,208.00
28.2 Special payable
Decreased
Balance at Increased in Balance at
Item in Current Reason
year-begin Current Year year-end
Year
Special funds for
technological Technology plan project
1,530,000.00 1,530,000.00
transformation from in Zhongshan City
Zhongshan
29. Long-term wage payable
Item Balance at year-end Balance at year-begin
273
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Balance at year-end Balance at year-begin
Dismissal welfare 13,774,110.61 19,073,101.29
According to the internal early retirement policy, the long-term payable dismissal welfare bears by the
Company up to end of Current Year amounting to RMB 13,774,110.61
30. Accrual liability
Item Balance at year-end Balance at year-begin Reason
Product quality guarantee note1 15,427,220.80 12,952,457.86 Guarantee of product
note1
Guarantee fund for quality service 150,671,923.17 247,060,570.02 Guarantee of product
Penalty expenses 13,050,649.33 Penalty
Total 166,099,143.97 273,063,677.21
Note 1: Product quality deposit is the maintenance expense provided by the Company under the national
policy, while quality service special guarantees capital is the warranty costs provided for product quality in
addition to such policy. Parts of the commitments on product quality assurance beyond the national three
guarantees policy are expired in 2019, the accrual liability that have not been anticipated has written-off in
Current Year, actually 94,506,086.18 Yuan written-off.
31. Deferred income
(1) Classification of deferred income
Item Amount at year-end Amount at year-begin
Government subsidies---subsidies of
135,392,959.96 116,035,026.43
development project
Government subsidies---subsidies of
44,578,011.96 44,215,937.17
Relocation
Total 179,970,971.92 160,250,963.60
(2) Government subsidy
Amount
New
reckoned into Assets
Amount at subsidy in Other Amount at
Item other income related/Income
year-begin Current changes year-end
in Current related
Year
Year
Demolition compensation of
40,254,943.27 1,999,652.91 -2,358,104.44 40,613,394.80 Assets related
Changhong Meiling
Technical transformation of the
4,877,812.50 4,286,250.00 -4,286,250.00 4,877,812.50 Assets related
Athena project
Freezer project of Changhong
734,062.42 734,062.52 -734,062.52 734,062.42 Assets related
Meiling
Promoting the new industry
( annual output of 0.6 million 1,065,443.73 304,412.52 -304,412.52 1,065,443.73 Assets related
medium& large volume
environmental protection and
274
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount
New
reckoned into Assets
Amount at subsidy in Other Amount at
Item other income related/Income
year-begin Current changes year-end
in Current related
Year
Year
energy saving freezer)
Research and application of the
2,300,000.00 2,300,000.00 Assets related
MCU chip for inverter control
Subsidies for intelligent
transformation & upgrading of
enterprises from the new 3,886,414.58 605,675.00 -605,675.00 3,886,414.58 Assets related
industrialization policy in
economic development zone
Research and application of the
VISA (variable frequency
5,872,093.04 1,409,302.33 -1,409,302.33 5,872,093.04 Assets related
volume integrated intelligent
air-conditioner)
Promotion of the energy-saving
1,069,072.21 210,309.24 -210,309.24 1,069,072.21 Assets related
room air conditioner
Adaptability improvement on
11,824,908.42 2,364,981.72 -2,364,981.72 11,824,908.42 Assets related
new coolants production
Industrialization of intelligent
white household appliances
software platform and typical 3,030,303.05 727,272.71 -727,272.71 3,030,303.05 Assets related
application research and
development
Special funds for strategic
emerging industry and high-end 2,000,000.00 2,000,000.00 Assets related
growth industry
Key chip and module for
transducer used and detection 6,840,000.00 6,840,000.00 Assets related
capacity building
Changhong Air Conditioner-
relocation of production base 6,880,000.00 6,880,000.00 Assets related
and upgrading & expansion
Demonstration factory
construction for the intelligent
49,500,000.00 49,500,000.00 Assets related
manufacturing of intelligent
air-conditioner
2018 Zhongshan Special fund
for industrial development -
730,232.58 265,723.80 -265,723.77 730,232.55 Assets related
Special topic of technical
transformation
Special fund, government
4,200,000.00 4,200,000.00 Assets related
subsidy CZ059001
Centre for external cooperation
2,538,300.00 2,538,300.00 Assets related
of the environmental protection
Special fund for technical
478,116.29 96,727.01 -96,727.01 478,116.29 Assets related
improvement
Technical renovation of air
286,596.77 61,203.83 -61,203.83 286,596.77 Assets related
conditioner production line
Government subsidy for new
plant construction -
3,791,666.67 500,000.00 -500,000.00 3,791,666.67 Assets related
industrialization of cryogenic
refrigeration equipment
275
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount
New
reckoned into Assets
Amount at subsidy in Other Amount at
Item other income related/Income
year-begin Current changes year-end
in Current related
Year
Year
Subsidy for equipment
purchasing for Hefei Tech. 1,358,630.00 179,160.00 -179,160.00 1,358,630.00 Assets related
Improvement project in 2017
Equipment subsidy for the
industrial base technical
1,782,083.33 235,000.00 -235,000.00 1,782,083.33 Assets related
renovation from Economic and
Information Commission
Subsidy for the development on
production line technical reform
129,493.23 40,892.59 -40,892.59 129,493.23 Assets related
for green-friendly high-quality
metal pipe
Refrigerator evaporator
186,295.31 29,033.05 -29,033.05 186,295.31 Assets related
workshop
Demolition compensation of
3,960,993.98 1,794,257.14 -1,797,880.32 3,964,617.16 Assets related
Jiangxi Meiling
Special fund for technical
171,540.98 42,885.24 -42,885.25 171,540.99 Assets related
improvement
Innovation development project
294,353.71 370,429.05 -76,075.34 Assets related
for the E-Business
Project construction subsidy 207,607.53 265,393.74 -57,786.21 Assets related
Subsidy for industrial
development policy from Hefei 10,000,000.00 1,250,000.00 8,750,000.00 Assets related
for first half of 2018
Policy funds for manufacturing
a strong province, subsidy for
equipment for the technological 5,000,000.00 625,000.00 4,375,000.00 Assets related
transformation of industrial
strong base
Subsidy for purchase of R & D
1,176,000.00 113,312.50 1,062,687.50 Assets related
instruments and equipment
Subsidy from Zhongshan
Finance Bureau (CZ028001 2,000,000.00 296,646.81 1,703,353.19 Assets related
provincial special project 2019)
Subsidy for characteristic
innovation and entrepreneurship
2,000,000.00 2,000,000.00 Assets related
carrier project from Hefei
economic & development zone
Upgrade project for the
production line of Mianyang 1,580,000.00 65,833.32 1,514,166.68 Assets related
Meiling Intelligent Refrigerator
Provincial innovation-driven
2,950,000.00 2,950,000.00 - Assets related
development fund
Technical transformation of
refrigerator evaporator 485,000.00 30,312.50 454,687.50 Assets related
workshop
Total 160,250,963.60 25,191,000.00 21,853,729.53 -16,382,737.85 179,970,971.92
Note: other changes are the non-current liability due within one year is switch back to deferred income,
which has re-classified originally
276
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
32. Share capital
Change during the period (+、-)
Balance at Sharestransferred
Item Bonus Balance at year-end
year-begin New shares issued fromcapital Other Subtotal
share
reserve
Total shares 1,044,597,881.00 1,044,597,881.00
33. Capital reserve
Increased in Decreased in
Item Amount at year-begin Amount at year-end
Current Year Current Year
Share premium 2,636,196,335.76 2,979.36 2,636,193,356.40
Other capital reserve 48,173,262.70 48,173,262.70
Total 2,684,369,598.46 2,979.36 2,684,366,619.10
Note: The changes in the share premium of the current year: 1. As a result of the acquisition of some minority shareholders‘
equity in Jinan Xiangyou, there is difference between the newly acquired long-term equity investment and the net asset share
that shall continue to be calculated by the subsidiary from the date of purchase based on the new shareholding ratio. 2. The
difference between the equity payment that the subsidiary Zhongke Meiling received from the minority shareholders during the
current period and the net asset share that shall continue to be calculated by Zhongke Meiling from the date of purchase in
accordance with the new shareholding ratio.
34. Other comprehensive income
Current Year
Less: written
in other
comprehensiv
e income in
Less：
Balance at previous Belong to Belong to Balance at
Item Account before Income
year-begin period and parent minority year-end
income tax in tax
carried company shareholders
Current Year expense
forward to after tax after tax
s
gains and
losses in
current
period
Other comprehensive income re-divided into gains/losses
Including:
conversion
difference arising
from foreign -18,143,569.26 -2,068,017.04 -787,861.10 -1,280,155.94 -18,931,430.36
currency
financial
statement
35. Surplus reserves
Increased in Decreased in
Item Amount at year-begin Amount at year-end
Current Year Current Year
Statutory surplus reserve 284,043,041.22 11,136,116.82 295,179,158.04
Discretionary surplus reserve 115,607,702.16 115,607,702.16
277
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Increased in Decreased in
Item Amount at year-begin Amount at year-end
Current Year Current Year
Total 399,650,743.38 11,136,116.82 - 410,786,860.20
36. Retained profit
Item Current Year Last Year
Amount at the end of last year 904,232,582.87 937,894,771.93
Add: adjustment from undistributed profit at period-begin -2,734,328.91
Including: retroactive adjustment by Accounting
Standards for Business Enterprise
change of accounting policy -2,734,328.91
Correction of former material error
Change of combination scope under
common control
Amount at the beginning of this year 901,498,253.96 937,894,771.93
Add: net profit attributable to shareholders of parent
56,441,479.14 38,658,256.97
company for this year
Less: withdraw of statutory surplus reserve 11,136,116.82 9,644,573.17
withdraw of discretionary surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares 62,675,872.86 62,675,872.86
Dividend of ordinary shares transferred to share
capital
Amount at the end of this year 884,127,743.42 904,232,582.87
37. Operation income and operation cost
(1) Operation income and operation cost
Item Current Year Last Year
Main business income 15,442,277,862.82 16,458,650,756.15
Other business income 1,110,975,032.11 1,031,524,193.86
Total 16,553,252,894.93 17,490,174,950.01
Main business cost 12,416,146,774.23 13,273,395,942.04
Other business cost 1,039,545,602.62 953,006,078.36
Total 13,455,692,376.85 14,226,402,020.40
(2) Main business classified according to product
Current Year Last Year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator,
7,904,855,681.11 6,064,938,890.53 8,167,773,533.33 6,390,896,089.57
freezer
Air-conditioner 5,908,762,786.45 4,996,871,222.18 6,777,093,389.43 5,636,463,273.39
278
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Product
Operation income Operation cost Operation income Operation cost
Washing
434,111,186.88 353,622,961.34 513,917,450.54 395,766,646.08
machine
Small
household
appliances and 993,937,389.59 835,102,165.41 689,072,966.20 583,308,199.41
kitchen and
bathroom
Other 200,610,818.79 165,611,534.77 310,793,416.65 266,961,733.59
Total 15,442,277,862.82 12,416,146,774.23 16,458,650,756.15 13,273,395,942.04
(3) Main business classified according to sales region
Current Year Last Year
Region
Operation income Operation cost Operation income Operation cost
Domestic 11,534,341,837.69 9,040,203,991.36 12,748,897,296.29 9,988,923,192.37
Overseas 3,907,936,025.13 3,375,942,782.87 3,709,753,459.86 3,284,472,749.67
Total 15,442,277,862.82 12,416,146,774.23 16,458,650,756.15 13,273,395,942.04
Top five clients have income in sales of RMB 6,099,260,682.93 in total, a 36.85% in total operation
income.
38. Business tax and extra charges
Item Current Year Last Year
Treatment fund for abandon electrics & electronics 60,529,942.00 60,177,558.00
City construction tax 30,493,037.22 24,305,750.41
Extra charge for education and local education surcharge 22,102,924.13 17,875,282.24
Real estate tax 17,137,312.39 13,856,622.90
Stamp duty 12,018,022.40 8,963,160.80
Land use tax 7,029,712.20 7,021,001.03
Water fund 2,634,354.33 4,342,756.81
Other 1,120,422.24 2,372,926.42
Total 153,065,726.91 138,915,058.61
39. Sales expense
Item Current Year Last Year
Salary, extra charges and labor service fee 652,044,483.91 635,315,875.59
Transport expenses 499,344,342.58 527,985,392.22
Market support fee 470,013,932.98 491,986,205.05
Air conditioner installation fee 256,658,116.20 397,693,064.53
National three guarantees expense 103,386,444.62 160,967,334.26
279
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Storage lease expenses 117,617,330.25 131,417,625.27
Travelling expenses 49,979,196.42 52,346,471.72
Advertising fee 21,419,915.53 37,340,848.88
Operation activities expenses 22,988,306.75 23,804,644.95
Meeting organization expenses 11,046,982.91 9,370,395.41
House-lease expenses 18,973,583.57 19,148,254.52
Depreciation expenses 7,344,357.95 7,504,623.38
Communication expenses 5,715,469.87 8,496,026.11
Other 83,830,056.41 72,900,407.97
Total 2,320,362,519.95 2,576,277,169.86
40. Administration expense
Item Current Year Last Year
Salary and social insurance etc. 187,993,971.35 167,788,089.71
Depreciation 19,205,351.97 20,055,571.17
Amortized intangible assets 19,321,311.93 19,376,395.84
Board fees 1,546,949.10 17,279,114.44
Water and electricity fee 15,055,164.38 10,973,983.83
Domestic travelling fee 6,681,174.67 6,936,778.04
Property insurance fee 4,539,551.94 5,405,723.64
Business activities fee 5,132,130.61 5,175,165.28
Office fee 5,116,649.46 5,051,067.65
Inspection and authentication fee 2,203,362.58 2,825,310.81
Other 63,891,525.83 57,050,347.62
Total 330,687,143.82 317,917,548.03
41. R&D expenses
Item Current Year Last Year
Salary and social insurance etc. 110,566,764.34 91,047,499.76
Amortized intangible assets 93,222,550.36 58,584,357.96
Trial fee of R&D 45,301,220.97 19,119,854.48
Technical development cost 15,721,270.26 13,885,813.48
Inspection and authentication fee 13,478,419.82 12,977,420.74
Depreciation 9,640,335.06 6,434,865.22
Cost of mould 5,407,099.44 5,310,839.33
Software royalty 2,424,431.50 2,954,351.56
Domestic travel expenses 1,964,177.16 1,931,601.98
280
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Other 36,492,420.78 23,052,793.55
Total 334,218,689.69 235,299,398.06
42. Financial expenses
Item Current Year Last Year
Interest expenditure 93,523,492.74 101,451,047.10
Less: Interest income 133,568,862.29 127,986,419.36
Add: exchange loss 17,118,898.27 -12,186,113.99
procedure charge expenditure 8,795,468.59 13,167,973.40
discount expenditure -85,047.91 -13,752,095.89
Total -14,216,050.60 -39,305,608.74
43. Other income
Item Current Year Last Year
Subsidy for employment stable 35,675,926.90 1,242,818.98
Immediate refund of VAT for software products 6,349,543.15 5,420,015.89
Special funds for technical transformation of the Athena project 4,286,250.00 4,286,250.00
Supplementary fund for characteristic dual creative carriers of
4,000,000.00
borrowing and transferring
Enterprise policy funds from Economic and Trade Development
3,500,000.00 15,410,000.00
Bureau in Hefei economic development zone
Special funds for provincial-level innovation-driven development 2,950,000.00 2,950,000.00
Provincial-level foreign trade fund subsidy from finance bureau in
2,857,000.00 6,424,936.00
Hefei economic development zone
Adaptability improvement on new coolants production 2,364,981.72 2,364,981.72
Subsidy for E-business sales 2,000,000.00
Demolition compensation of Changhong Meiling 1,999,652.91 2,382,423.84
Some policy subsidies to support the development of digital economy
1,800,000.00
in Anhui
Demolition compensation of Jiangxi Meiling 1,794,257.14 1,797,880.32
Logistic subsidy 1,787,400.00 4,170,300.00
Subsidy received from the government to activate idle factories 1,687,464.00
Special funds for steady growth of foreign trade in Zhongshan for 2017 1,532,797.00
Enterprise special fund 1,500,000.00
Industrial development fund 1,440,000.00
Research and application of the VISA (variable frequency volume
1,409,302.33 1,409,302.32
integrated intelligent air-conditioner)
Subsidy for talent supporting 1,395,300.00 2,030,669.00
Industrial development policy subsidy 1,250,000.00
281
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Award subsidy for industrial linkage development 1,239,100.00
Special subsidy for Nanjing Port 1,234,485.00 1,414,840.00
Subsidy for cultivation of the enterprise brand 1,200,000.00 1,400,000.00
Subsidy for export credit insurance 1,157,100.00 1,404,475.00
Special funds for foreign economic & trade development and port
1,057,163.36
construction for 2018
Subsidy for equipment renewal and modernization 1,019,312.50 404,000.00
Policy funds for manufacturing a strong province, award subsidy for
1,000,000.00
intelligent factory and digital workshop
Special fund for promoting innovation and development of processing
1,000,000.00 1,000,000.00
trade
Provincial special fund for industrial transformation of the 2 nd batch for
1,000,000.00
2019
Reward for the smart home appliance technology of the industry policy 900,000.00 1,000,000.00
Subsidy for staff training 819,422.65 981,250.94
Freezer project of Changhong Meiling 734,062.52 734,062.50
Industrialization of intelligent white household appliances software
727,272.71 242,424.24
platform and typical application research and development
Award for integration of information technology and industrialization 699,539.00 100,000.00
Policy subsidy for promoting scientific and technological innovation 679,700.00
Science and technology innovation and enterprise development fund 671,307.09
Subsidies for intelligent transformation & upgrading of enterprises
605,675.00 353,310.42
from the new industrialization policy in economic development zone
Tax contribution award 600,000.00
Premium subsidy for science & technology insurance 600,000.00
Subsidy for home appliance standards customization project from
574,000.00
China Household Appliances Research Institute
Government subsidy for new plant construction - industrialization of
500,000.00 500,000.00
cryogenic refrigeration equipment
Award subsidy for provincial manufacturing industry & internet
500,000.00
integration demonstration enterprise
Venture expansion fund 500,000.00 1,179,587.32
Special guiding fund for construction of ―Three project and One
500,000.00
innovation‖
Special fund for industrial development of Zhongshan City 465,723.80 22,143.65
Award subsidy for intellectual property 444,400.00
Special funds for economic development of 2019 410,102.00
Commercial circulating funds for promoting the policy of service
400,000.00
industry from economy & development zone
National high-Tech award 400,000.00
Patent funding 395,000.00 435,820.00
Subsidy for international market development of small &
380,221.00
medium-sized enterprise
Innovation development project for the E-Business 370,429.05 76,075.30
Policy of promoting the development of new industrialization 367,800.00 330,000.00
282
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Commission charge refund for individual income tax 338,175.13 329,654.25
Promoting the new industry ( annual output of 0.6 million medium&
304,412.52 304,412.50
large volume environmental protection and energy saving freezer)
Subsidy from Zhongshan Finance Bureau (CZ028001 provincial
296,646.81
special project 2019)
Government subsidy for the project of ministry of finance of science
265,393.74 105,002.26
and education entrepreneurship park in Mianyang Technology Town
Subsidy for equipment purchasing for Hefei Tech. Improvement
235,000.00 253,810.00
project
Promotion of the energy-saving room air conditioner 210,309.24 210,309.24
Science and technology development special fund project of
200,000.00
Zhongshan City
Equipment subsidy for the industrial base technical renovation from
179,160.00 332,916.67
Economic and Information Commission
Government subsidy CZ028001 technical improvement topic 96,727.01 1,180,256.70
Upgrade project for the production line of Mianyang Meiling
65,833.32
Intelligent Refrigerator
Government subsidy CZ028001- subsidy in equipment renewal 61,203.83 820,199.40
Special fund for technical improvement 42,885.24 3,573.77
Subsidy for the development on production line technical reform for
40,892.60 40,892.59
green-friendly high-quality metal pipe
Technical transformation of refrigerator evaporator workshop 59,345.54 31,671.64
Independent innovation policy 500,000.00
Smart life and fresh life project 886,226.74
Award of pilot demonstration enterprise for intellectual property 1,655,100.00
Special fund for investment promotion from Commercial Bureau 879,954.00
Funds for enterprise research and development 1,120,600.00
Commission charge refund for individual income tax 300,000.00
Award for implementing the quality management system standards
500,000.00
from Economic and Information Commission
Design and application of the air duct for energy-saving air-conditioner 300,000.00
Service industry policy for year of 2017 from economic and trade
1,028,700.00
development bureau in Hefei Economic Development Zone
Funds for raid growth from Ministry of Finance of Hefei 500,000.00
Award for pilot demonstration project of the national intelligent
2,000,000.00
manufacturing
National level award for the green factory and green products 4,000,000.00
Development and production of the whole machine of CHIQ
4,700,000.00
air-conditioner
Reward for a good start of the investment in industrial and
750,000.00
technological transformation in 2018
CCTV publicity fund for the Best Anhui in 2018 2,932,124.00
Provincial-level government subsidy for enterprise research and
654,100.00
development in Guangdong Province for year of 2017
The 2nd batch of 2016 city-level supporting funds for side management
496,000.00
for power demand
283
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Special fund for undertaking industrial transfer and promoting
1,000,000.00
innovation in processing trade for year of 2016
Other units 3,153,426.88 5,655,611.19
Total 110,281,102.69 94,938,682.39
44. Investment income
Item Current Year Last Year
Long-term equity investment income by equity method -8,049,228.81 -23,357,648.90
Investment income obtained from disposal of long-term equity
867.43
investment
Investment income obtained from disposal of tradable financial assets -78,815,580.08 -46,564,075.82
Income from financial products 53,507,866.92 73,583,776.64
Investment income of other non-current financial assets during holding
661,434.48
period
Investment income obtained from held of finance asset available for
268,439.33
sales
Total -32,695,507.49 3,931,358.68
45. Changes in fair value gains
Item Current Year Last Year
Trading financial assets -1,523,366.67 -6,393,095.89
Including :Income of fair value changes from derivative financial
-1,523,366.67 -6,393,095.89
instruments
Trading financial liability 54,516,996.83 -39,556,161.23
Including :Income of fair value changes from derivative financial
54,516,996.83 -39,556,161.23
instruments
Total 52,993,630.16 -45,949,257.12
46. Credit impairment loss
Item Current Year Last Year
Note receivable bad debt loss 15,359,134.10
Account receivable bad debt loss -9,496,891.77
Other account receivable bad debt loss -1,228,945.44
Total
4,633,296.89
47. Assets impairment loss
Item Current Year Last Year
Bad debt loss -3,008,853.32
284
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Loss on inventory valuation -19,795,727.76 -36,245,038.14
Impairment loss on intangible assets -8,815,051.75
Impairment loss on fixed assets -1,798,225.06
Total -30,409,004.57 -39,253,891.46
48. Income from assets disposal
Amount reckoned
into
Item Current Year Last Year non-recurring
gains/losses in
Current Year
Income from non-current assets disposal -9,537,945.52 787,721.32 -9,537,945.52
Including: income classify to assets ready for sale
income not classify as to assets ready for sale
Including: Income from fixed assets disposal -5,493,947.51 787,721.32 -5,493,947.51
Income from intangible assets disposal -4,043,998.01 -4,043,998.01
Total -9,537,945.52 787,721.32 -9,537,945.52
49. Non-operation revenue
(1) Non-operation revenue
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in
Current Year
Government subsidy 115,000.00 883,331.13 115,000.00
Income of penalty 863,078.25 813,253.72 863,078.25
Other 5,501,844.73 4,789,860.85 5,501,844.73
Total 6,479,922.98 6,486,445.70 6,479,922.98
(2) Government subsidy
Assets/income
Item Current Year Last Year Resource and basis
related
Award of local collaboration for advance Income related
400,000.00 MFBH (2018)No.105
industrial enterprises
Science and education
entrepreneurship park of Income related
Fund of tax incentive 121,801.13
the technology town in
Mianyang
Other government subsidy 115,000.00 361,530.00 Income related
Total 115,000.00 883,331.13
50. Non-operating expenditure
285
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in
Current Year
Penalty and late fee 295,126.45 13,094,401.47 295,126.45
Other 5,114,631.25 8,174,124.11 5,114,631.25
Total 5,409,757.70 21,268,525.58 5,409,757.70
51. Income tax expenses
Item Current Year Last Year
Current income tax 8,656,853.45 17,887,061.40
Deferred Income Tax 17,609,171.49 -18,420,948.02
Total 26,266,024.94 -533,886.62
52. Other comprehensive income
Found more in 34. Other comprehensive income in VI
53. Items of cash flow statement
(1) Cash received (paid) from (for) other activities relating to operation/investment/financing
1) Cash received from other activities relating to operation
Item Current Year Last Year
Government subsidy and rewards 107,265,513.11 150,185,767.81
Collection of restriction fund 35,368,949.87 105,951,876.61
Cash deposit, deposit 14,723,011.12 12,959,065.11
Rental income 7,924,382.64 7,553,077.64
Compensations 3,065,739.13 4,420,758.79
Petty cash collection 95,880.00 1,310,946.26
Trademark use fee 315,726.01 102,616.07
Other 3,962,164.63 6,243,804.17
Total 172,721,366.51 288,727,912.46
2) Cash paid for other activities relating to operation
Item Current Year Last Year
Market expenses 285,132,543.41 332,783,741.64
Rental fee 173,859,467.31 158,008,576.20
Travel expenses, meeting fees and exhibition fees 73,029,607.07 79,056,028.57
Petty cash, deposit, Cash deposit 73,354,112.01 45,279,661.81
Advertising fee 34,667,697.12 39,917,061.79
286
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Transfer to restriction fund 14,496,135.53 24,070,228.43
Vehicle expenses 18,419,063.04 22,366,556.31
Business activities fee 29,264,931.29 21,958,864.60
Inspection and certification fee, certification charge and
27,067,600.74 21,408,152.10
reviewing fee
Technological cooperation costs and consulting charge 10,935,357.90 10,890,258.27
Board fee 9,409,783.66 9,928,756.19
Service supporting fee 84,858,392.13 9,926,383.50
Service Charge 15,939,966.84 9,406,748.71
Office expenses 8,414,528.45 8,849,262.16
Communication fee 4,356,964.71 6,990,290.66
Labor service fee 10,746,378.64 6,452,287.26
Repair charge 12,704,160.68 4,291,510.38
Other 100,553,596.73 87,777,383.06
Total 987,210,287.26 899,361,751.64
3) Cash received from other activities relating to investment
Item Current Year Last Year
Interest income arising from bank savings 126,072,829.83 130,007,292.58
Cash deposit 688,706.45 2,188,621.81
Total 126,761,536.28 132,195,914.39
4) Cash paid for other activities relating to investment
Item Current Year Last Year
Loses of forward exchange settlement 78,815,580.08 46,564,075.82
Bid bond refund 273,200.00
Total 78,815,580.08 46,837,275.82
5) Cash received from other activities relating to financing
Item Current Year Last Year
Withdrawal of pledge 44,497,902.00
6) Cash paid for other activities relating to financing
Item Current Year Last Year
Amount refund to minority shareholders due to the
2,000,000.00
cancellation of subsidiary
Financing lease 1,900,677.91 647,028.80
Handling charge of dividend 44,313.96 45,458.19
Loan deposit 23,232,000.00
287
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Repayment of investment 7,000,000.00
Intermediary service fee from financing 308,736.00
Total 32,485,727.87 2,692,486.99
(2) Supplementary of the consolidated cash flow statement
Item 2019 2018
1. Net profit is adjusted to cash flow of operation activities:
Net profit 43,512,200.81 34,875,784.34
Add: provision for depreciation of assets 25,775,707.68 39,253,891.46
Depreciation of fixed assets, consumption of oil gas assets and
194,179,175.14 158,357,425.01
depreciation of productive biological assets
Amortization of intangible assets 116,308,174.70 79,302,211.24
Amortization of long-term retained expense 3,635,861.94
Loss from disposal of fixed assets, intangible assets and other
9,537,945.52 787,721.32
long term assets(gain is listed with ―-‖)
Loss from discarding fixed assets as useless (gain is listed with
―-‖)
Loss from change of fair value(gain is listed with ―-‖) -52,993,630.16 45,949,257.12
Financial expense (gain is listed with ―-‖) -22,926,471.28 -38,721,486.24
Investment loss (gain is listed with ―-‖) 32,695,507.49 -3,931,358.68
Decrease of deferred income tax assets (increase is listed with
14,750,478.61 -21,514,573.12
―-‖)
Increase of deferred income tax liabilities (decrease is listed
3,158,060.03 3,098,699.11
with ―-‖)
Decrease of inventories (increase is listed with ―-‖) 739,888,328.32 725,173,756.72
Decrease of operational accounts receivable (increase is listed
253,957,057.05 -127,833,259.28
with ―-‖)
Increase of operational accounts payable (decrease is listed with
-92,558,557.19 -1,022,530,821.76
―-‖)
Other 19,720,008.32 -96,463,724.54
Net cash flow arising from operation activities 1,285,003,985.04 -220,560,615.36
2. Major investment and financing activities that do not involve
cash receipts:
Conversion of debt into capital
Switching Company bonds due within one year
financing lease of fixed assets
3. Net change in cash and cash equivalents:
Balance at year-end of cash 5,385,807,475.51 4,484,643,187.93
Less: Balance at year-begin of cash 4,484,643,187.93 5,089,765,770.39
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increase in cash and cash equivalents 901,164,287.58 -605,122,582.46
(3) No net cash paid for subsidiary obtained in Current Year
288
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(4) No net cash received from subsidiary disposal in Current Year
(5) Cash and cash equivalent
Item CurrentYear LastYear
Cash 5,385,807,475.51 4,484,643,187.93
Including:cashinstock 44,818.07 28,650.21
Bankdepositsavailableforpaymentatanytime. 4,771,094,609.77 4,029,892,318.85
Othermonetaryfundavailableforpaymentatanytime 614,668,047.67 454,722,218.87
Cashequivalents
Including:bondinvestmentduewithin3months
Balanceofcashandcashequivalentsatyear-end 5,385,807,475.51 4,484,643,187.93
Including:usingtherestrictedcashandcashequivalentsoftheparentcompanyorsu
bsidiaryofthegroup
54. Assets with ownership or the right to use restricted
Item Ending book value Reasons
Monetary fund 113,793,555.13 Margin
note 1
Note receivable 436,428,439.50 Pledged
Fixed assets 326,303,557.08 Pledged
note 2
Intangible assets 298,005,582.68 Pledged
Account receivable note 3 60,325,306.54 Pledged
Total 1,234,856,440.93
Note 1: The note receivable was pledged for: short-term financing from the bank; with purpose of improving
the note utilization, the Company draw up bank acceptance by pledge parts of the outstanding notes
receivable to the bank
Note 2: intangible assets mortgaged refer to the land use right pledge, found more in ―27. Long term
borrowings‖ under this note VI
Note 3: Pledge of the account receivable refers to the account pledge for export bill financing.
55. Foreign currency
(1) Foreign currency
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Monetary fund
Including: USD 28,658,710.30 6.9762 199,928,894.80
Euro 1,616,601.49 7.8155 12,634,548.95
AUD 460,916.74 4.8843 2,251,255.63
289
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Pakistan Rupi 305,272,922.54 0.045046 13,751,324.07
IDR 22,762,538,413.00 0.000501 11,404,031.74
HKD 3,296.94 0.89578 2,953.33
Account receivable
Including: USD 106,260,071.41 6.9762 741,291,510.17
Euro 3,022,089.29 7.8155 23,619,138.85
AUD 7,772,887.00 4.8843 37,965,111.97
Pakistan Rupi 1,703,784,545.49 0.045046 76,748,678.64
IDR 32,719,003,913.00 0.000501 16,392,220.96
HKD 7,277.67 0.89578 6,519.19
Other account receivable
Including: USD 469.68 6.9762 3,276.58
Pakistan Rupi 25,478,291.00 0.045046 1,147,695.10
IDR 640,095,396.00 0.000501 320,687.79
Account payable
Including: USD 747,839.16 6.9762 5,217,075.55
Euro 13,419.32 7.8155 104,878.70
Pakistan Rupi 455,550,521.89 0.045046 20,520,728.81
IDR 14,030,849,604.00 0.000501 7,029,455.65
Other account payable
Including: Pakistan Rupi 210,986,864.23 0.045046 9,504,114.29
IDR 8,532,862,109.00 0.000501 4,274,963.92
HKD 46,391.86 0.89578 41,556.90
Short-term loans
Including: USD 6,800,000.00 6.9762 47,438,160.00
Pakistan Rupi 834,590,000.00 0.045046 37,594,941.14
(2) Foreign operational entity
The foreign operational entity of the Company was Changhong Ruba Trading Company (Private) Limited,
mainly operates in Lahore, Pakistan; Recording currency is Pakistan Rupi. CHANGHONG MEILING
ELECTRIC INDONESIA,PT, mainly operates in Jakarta; Recording currency is IDR.
56. Government subsidy
(1) Government subsidy
Amount reckoned
Category Amount Item into current
gain/loss
Subsidy for employment stable 35,675,926.90 Other income 35,675,926.90
290
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount reckoned
Category Amount Item into current
gain/loss
Subsidy for industrial development policy from Hefei for
10,000,000.00 Deferred income 1,250,000.00
first half of 2018
Immediate refund of VAT for software products 6,349,543.15 Other income 6,349,543.15
Policy funds for manufacturing a strong province, subsidy
for equipment for the technological transformation of 5,000,000.00 Deferred income 625,000.00
industrial strong base
Supplementary fund for characteristic dual creative carriers
4,000,000.00 Other income 4,000,000.00
of borrowing and transferring
Enterprise policy funds from Economic and Trade
3,500,000.00 Other income 3,500,000.00
Development Bureau in Hefei economic development zone
Special funds for provincial-level innovation-driven
2,950,000.00 Deferred income 2,950,000.00
development
Provincial-level foreign trade fund subsidy from finance
2,857,000.00 Other income 2,857,000.00
bureau in Hefei economic development zone
Subsidy for E-business sales 2,000,000.00 Other income 2,000,000.00
Subsidy from Zhongshan Finance Bureau (CZ028001
2,000,000.00 Deferred income 296,646.81
provincial special project 2019)
Subsidy for characteristic innovation and entrepreneurship
2,000,000.00 Deferred income
carrier project from Hefei economic & development zone
Some policy subsidies to support the development of digital
1,800,000.00 Other income 1,800,000.00
economy in Anhui
Logistic subsidy 1,787,400.00 Other income 1,787,400.00
Subsidy received from the government to activate idle
1,687,464.00 Other income 1,687,464.00
factories
Upgrade project for the production line of Mianyang
1,580,000.00 Deferred income 65,833.32
Meiling Intelligent Refrigerator
Special funds for steady growth of foreign trade in
1,532,797.00 Other income 1,532,797.00
Zhongshan for 2017
Enterprise special fund 1,500,000.00 Other income 1,500,000.00
Industrial development fund 1,440,000.00 Other income 1,440,000.00
Subsidy for talent supporting 1,395,300.00 Other income 1,395,300.00
Award subsidy for industrial linkage development 1,239,100.00 Other income 1,239,100.00
Special subsidy for Nanjing Port 1,234,485.00 Other income 1,234,485.00
Subsidy for cultivation of the enterprise brand 1,200,000.00 Other income 1,200,000.00
Subsidy for purchase of R & D instruments and equipment 1,176,000.00 Deferred income 113,312.50
Subsidy for export credit insurance 1,157,100.00 Other income 1,157,100.00
Special funds for foreign economic & trade development
1,057,163.36 Other income 1,057,163.36
and port construction for 2018
Provincial special fund for industrial transformation of the
1,000,000.00 Other income 1,000,000.00
2nd batch for 2019
Special fund for promoting innovation and development of
1,000,000.00 Other income 1,000,000.00
processing trade
Policy funds for manufacturing a strong province, award
1,000,000.00 Other income 1,000,000.00
subsidy for intelligent factory and digital workshop
Reward for the smart home appliance technology of the
900,000.00 Other income 900,000.00
industry policy
Subsidy for staff training 819,422.65 Other income 819,422.65
291
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Amount reckoned
Category Amount Item into current
gain/loss
Award for integration of information technology and
699,539.00 Other income 699,539.00
industrialization
Policy subsidy for promoting scientific and technological
679,700.00 Other income 679,700.00
innovation
Science and technology innovation and enterprise
671,307.09 Other income 671,307.09
development fund
Premium subsidy for science & technology insurance 600,000.00 Other income 600,000.00
Tax contribution award 600,000.00 Other income 600,000.00
Subsidy for home appliance standards customization
project from China Household Appliances Research 574,000.00 Other income 574,000.00
Institute
Special guiding fund for construction of ―Three project and
500,000.00 Other income 500,000.00
One innovation‖
Venture expansion fund 500,000.00 Other income 500,000.00
Award subsidy for provincial manufacturing industry &
500,000.00 Other income 500,000.00
internet integration demonstration enterprise
Technical transformation of refrigerator evaporator
485,000.00 Other income 30,312.50
workshop
Award subsidy for intellectual property 444,400.00 Other income 444,400.00
Special funds for economic development of 2019 410,102.00 Other income 410,102.00
National high-Tech enterprise award 400,000.00 Other income 400,000.00
Commercial circulating funds for promoting the policy of
400,000.00 Other income 400,000.00
service industry from economy & development zone
Patent funding 395,000.00 Other income 395,000.00
Subsidy for international market development of small &
380,221.00 Other income 380,221.00
medium-sized enterprise
Policies to promote the development of new
367,800.00 Other income 367,800.00
industrialization
Return of service charge of individual income tax 338,175.13 Other income 338,175.13
Subsidy for equipment renovation 281,000.00 Other income 281,000.00
Special fund for industrial development of Zhongshan City 200,000.00 Other income 200,000.00
Science and technology development special fund project
200,000.00 Other income 200,000.00
of Zhongshan City
Other income,
Other sporadic projects 3,268,426.88 Non-operation 3,268,426.88
income
Total 113,733,373.16 93,873,478.29
(2) Refund of government subsidy: nil
292
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
VII. Changes of consolidation rage
1. Enterprise combined under the different control: nil
2. Enterprise combined under the same control: nil 。
3. Reversed takeover: nil
4. Disposal of subsidiary: nil
5. Subsidiary liquidated
Difference betweenthe disposalpriceand Othercomprehensive income
Priceofthe proportion of thesubsidiary’s netassets enjoy transferredinto investment
Ratio oftheequity Way ofthe equity Time point of controlright Determination basisforthe time
Subsidiary equity in aspect of theconsolidatedfinancial income ,whichrelatedwith
disposed disposed lose point of control rightlose
disposed statement,whichisrespond tothe disposal the equity investment of
investment original subsidiary
Liquidation
Nanchang Xiangyou Electric Liquidation completed
85.00% 2019.01
Marketing Co., Ltd cancellation
Liquidation
Changsha Meizhilai Electric Liquidation completed
97.00% 2019.12
Marketing Co., Ltd cancellation
Liquidation
Zhongshan Hongling Trade Co., Liquidation completed
100.00% 2019.10
Ltd cancellation
6. Subsidiary newly established:
Name New merger reasons Shareholding ratio Net asset at year-end Net profit in Current Year
Hefei Meiling Wulian Technology Co., Ltd. Newly established 100% 11,323,042.82 5,323,042.82
Anhui Tuoxing Technology Co., Ltd. Newly established 100% 0.00 0.00
293
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
VIII. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
Shareholding ratio(%)
Main office Registration Business
Subsidiary Indirectl Acquire by
place place nature Directly
y
Manufacturing
Zhongke Meiling Cryogenic Hefei Hefei Investment
63.2683
Technology Co., Ltd.1) and sales
Software
Sichuan Hongmei Intelligent Mianyang Mianyang Investment
100
Technology Co., Ltd.2) development
Manufacturing
Mianyang Meiling Refrigeration Co., Mianyang Mianyang Investment
95 5
Ltd.3) and sales
Manufacturing
Jiangxi Meiling Electric Appliance Jingdezhen Jingdezhen Investment
98.75 1.25
Co., Ltd. 4) and sales
Software
Hefei Meiling Wulian Technology Hefei Hefei Investment
100
Co., Ltd. 5) development
Hefei Meiling Electric Marketing Co., Hefei Hefei Sales Investment
99.82 0.18
Ltd.6)
Enterprise combined under the
Guangxi Huidian Home Appliance Nanning Nanning Sales 100
Co., Ltd.7) differentcontrol
Hefei Meiling Electric Marketing Co., Jinan Jinan Sales Investment
93.4
Ltd.8)
Wuhan Meizirong Electric Marketing Wuhan Wuhan Sales Investment
91
Co., Ltd.9)
Zhengzhou Meiling Electric
Zhengzhou Zhengzhou Sales 100 Investment
Marketing Co., Ltd.10)
Chengdu Meiling Electric
Chengdu Chengdu Sales 96 Investment
Marketing Co., Ltd.11)
Fuzhou Meiling Electric Marketing
Fuzhou Fuzhou Sales 100 Investment
Co., Ltd.12)
Nanjing Meiling Electric Marketing
Nanjing Nanjing Sales 100 Investment
Co., Ltd.13)
Taiyuan Meiling Electric Marketing
Taiyuan Taiyuan Sales 100 Investment
Co., Ltd.14)
Hangzhou Meiling Electric
Hangzhou Hangzhou Sales 100 Investment
Marketing Co., Ltd.15)
Shanghai Meiling Electric
Shanghai Shanghai Sales 99 Investment
Marketing Co., Ltd.16)
294
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Shareholding ratio(%)
Main office Registration Business
Subsidiary Indirectl Acquire by
place place nature Directly
y
Guangzhou Meiling Electric
Guangzhou Guangzhou Sales 98 Investment
Marketing Co., Ltd.17)
Tianjin Meiling Electric Marketing
Tianjin Tianjin Sales 100 Investment
Co., Ltd.18)
Beijing Meiling Electric Marketing
Beijing Beijing Sales 100 Investment
Co., Ltd.19)
Manufacturing Enterprise combined under the
Hefei Meiling Nonferrous Metal Hefei Hefei 100
Products Co., Ltd.20) and sales differentcontrol
Manufacturing Enterprise combined under the
Guangdong Changhong Ridian Zhongshan Zhongshan 98.855
Technology Co., Ltd.21) and sales same control
Changmei Technology Co., Ltd. 22) Mianyang Mianyang Sales 96.256 Investment
CHANGHONGMEILINGELECTRI Jakapta Jakapta Sales Investment
100
CINDONESIA,PT23)
ChanghongRubaTradingCompany(Pri Pakistan Pakistan Sales Investment
60
vate) Limited24)
Manufacturing Enterprise combined under the
Sichuan Changhong Air-conditioner Mianyang Mianyang 100
Co., Ltd. 25) and sales same control
Manufacturing Enterprise combined under the
Zhongshan Changhong Electric Co., Zhongshan Zhongshan 90 10
Ltd.26) and sales same control
Manufacturing Enterprise combined under the
Hefei Meiling Group Holdings Hefei Hefei 100
Limited27) and sales differentcontrol
Meiling Equator Household Manufacturing Enterprise combined under the
Hefei Hefei 100
Appliance (Hefei) Co., Ltd28) and sales differentcontrol
Hefei Equator Appliance Co., Manufacturing Enterprise combined under the
Hefei Hefei 100
Ltd.29) and sales differentcontrol
Manufacturing
Hongyuan Ground Energy Heat Pump Mianyang Mianyang Investment
51
Tech. Co., Ltd.30) and sales
Manufacturing
Hongyuan Ground Energy Heat Pump Zhongshan Zhongshan Investment
51
Tech. (Zhongshan) Co., Ltd.31) and sales
Manufacturing
Meiling CANDY Washing Machine Hefei Hefei Investment
60
Co., Ltd. 32) and sales
Guangzhou Changhong Trading Co., Guangzhou Guangzhou Sales Investment
100
Ltd.33)
Hebei Hongmao Household Manufacturing
Handan Handan 100 Investment
Appliance Technology Co., Ltd.34) and sales
Anhui Tuoxing Technology Co., Hefei Hefei Technology Investment
100
Ltd.35) R&Dt
Note:
295
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
1) Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling), the
predecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company, was
established on 29 October 2002 by joint contribution from the Company and Technical Institute of Physics
and Chemistry, CAS (―TIPC‖), with registered capital of RMB60 million upon the establishment, among
which, the Company made capital contribution of RMB42 million (including the assets in specie at the
consideration of RMB35,573,719.70 as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with issuance
of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of RMB6,426,280.30) accounting for
70% of the aforesaid registered capital, and TIPC made capital contribution of RMB18 million with
intangible assets of such value (namely the single compressor mixture industrial low temperature
refrigeration technology) as evaluated by Jingzhongzi Assets Appraisal Co., Ltd. with issuance of the
Appraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid registered capital. The paid-in
of the above registered capital has been verified by Huazheng Accounting Firm by issuance of the Assets
Verification Report (HZYZ (2002) No. B157) dated 16 October 2002.
In October 2014, according to the relevant provision under the Management Rules on Application of State
Owned Assets by Central Business Organs, TIPC transferred the 30% equity interests held by it in Zhongke
Meiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing
(Beijing) Assets Management Co., Ltd (hereinafter referred to as Zhongke Xianxing) which would perform
management over the operating assets of TIPC. Upon consideration and approval at the 37th session of the 7th
Board of Directors of Hefei Meiling Co., Ltd, it is agreed to waive the pre-emptive right.
On 10 August 2015, all the founders signed the Founder Agreement of Zhongke Meiling Cryogenic
Technology Company Limited, pursuant to which, they decided to change the firm type of Zhongke Meiling
Cryogenic Technology Company Limited to a joint stock company. Based on the net assets of RMB96,
431,978.25 as audited by Xinyong Zhonghe CPA as of 30 June 2015, an aggregate of 65,000,000 shares have
been converted at the proportion of 1:0.67, which are to be held by the original shareholders according to
their respective entitlement. In case that the net assets exceed registered capital, the balance shall be recorded
in capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered capital and paid-in
thereof in respect of the stock reform, and issued Assets Verification Report (XYZH/2015CDA40161). The
Company registered industrial and commercial information on 11 September 2015.
On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke Meiling
Cryogenic Technology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the
Company; Zhongke Meiling Company issued 3,150,000 shares to specific investors by the non-public
offering of shares at 1.63 Yuan per share. The current capital increase was verified by the No.
［XYZH/2016CDA40294］capital verification report issued by ShineWing CPA (special general partnership).
After the completion of the issuance, the share capital of Zhongke Meiling Company increased to 68,150,000
shares and the Company's shareholding ratio was 66.76%.
On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic
296
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Technology Co., Ltd for year of 2017 was deliberated and approved by 4th session extraordinary of
shareholders general meeting of 2017. Zhongke Meiling offering 490,300 shares to specific investors by way
of privately placement, which has 1.72 Yuan per share in amount. The capital increasement has been verified
by the No. ［XYZH/2017CDA40324］capital verification report issued by ShineWing CPA (special general
partnership). After the completion of shares placement, stock of the Company increased to 68,640,300 shares
and 66.87% held by the Company.
On September 9, 2019, the 10th Meeting of the Second Board of Directors and the Fourth Extraordinary
Shareholders‘ Meeting reviewed and approved the Proposal on the First Stock Issuance Plan of Zhongke
Meiling Cryogenic Technology Co., Ltd. in 2019 (Revised Version), the number of shares to be issued this
time does not exceed 3,907,900 shares (including 3,907,900 shares), the issue price is not less than 2.16 yuan
per share, and the raised funds are expected to not exceed 8,441,064.00 yuan (including 8,441,064.00 yuan).
After the completion of the additional issue, the company‘s share capital increased to 72,548,200 shares,
which was verified by [No. XYZH/2020CDA30002] ―Capital Verification Report‖ issued by Shine Wing
Certified Public Accountants (LLP), and the Company‘s shareholding ratio was 63.2683%.
2) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) was
established on Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling
Refrigeration Co., Ltd., being approved by the Industrial and Commerce Bureau of Peicheng District,
Mianyang City. The company owes registered capital of RMB 5 million, including RMB 4.95 million
contributed by Changhong Meiling Company in cash, accounted for 99% of the registered capital; Mianyang
Meiling Refrigeration Co., Ltd. contributed RMB 50000 in cash with 1% of the register capital occupied. The
above mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No. [2014]
B039 issued by Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares of Hongmei Intelligent,
held by the Company has transferred to Sichuan Changhong AC Co., Ltd., after transferred, Changhong AC
has 99% equity of Hongmei Intelligent, the Company has no shares of Hongmei Intelligent directly.
3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling), a limited liability
company jointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Its
registered capital and paid-in capital were RMB 50 million upon establishment, of which, the Company
invested RMB 45 million, accounting for 90% of the registered capital; Zhongke Meiling Company invested
RMB 5 million, accounting for 10% of the registered capital. The capital receipt was verified by the
verification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public Accountants. On 19 January
2011, the Company increase RMB 50 million in capital of Mianyang Meiling, of which RMB 95 million
invested by the Company, a 95% of total register capital while RMB 5 million invested by Zhongke Meiling,
a 5% of total capital occupied. The paid-in capital has been verified by Capital Verification Report
［XYZH/2010CDA6040］from Chengdu Branch of Shinewing CPA CO., Ltd. In 2011, Zhongke Meiling
entered into ―Equity Transfer Agreement‖ with Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity of
Mianyang Meiling held by Zhongke Meiling was transferred to Jiangxi Meiling Refrigerator. In September
297
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
2013, Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Electric Appliance Co., Ld, than 5
percent equity was transfer to Jiangxi Meiling Electric Appliance.
4) Jiangxi Meiling Electric Appliance Co., Ltd. (hereinafter referred to as Jiangxi Meiling Electric Appliance)
was a limited liability company jointly established by the Company and Mianyang Meiling on 23 May 2011.
Register capital of the company totally as RMB 50 million, RMB 49.375 million invested by the Company,
98.75% in total register capital while RMB 0.625 million invested by Mianyang Meiling , a 1.25% in total
register capital occupied. The initial investment RMB 10.50 million was received dated 13 May 2011 with
RMB 10 million from the Company and RMB 0.5 million from Mianyang Meiling. Rest of the capital shall
be invested fully within 2 years after the joint ventures established according to capital requirement. The
initial investment capital were verified by the Capital Verification Report [JXKYZi (2011) No. 090] issued
from Jingdezhen Xingci CPA Co., Ltd. Second capital RMB 39.5 million was fully funded on 28 July 2011,
the Company contributed RMB 39.375 million while Mianyang Meiling Company invested RMB 125,000,
the contributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134]
issued from JDZ Xingci CPA Co., Ltd.
5) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) was
established dated 21 January 2019 with registered capital of RMB 10 million, and it is the subsidiary of the
Company with fully-owned establishment. As of December 31, 2019, paid in capital is 6 million yuan
6) Hefei Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Meiling Marketing) is the limited
company jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registered
capital and paid-up capital were RMB 10 million, including RMB 9.9 million invested by the Company, a
99% of the registered capital; Mianyang Meiling Company contributed RMB 0.1 million, a 1% of the
registered capital. The above mentioned paid-up register capital have been verified by verification report of
[Wan An Lian Xin Da Yan Zi (2009) No. 074] issued by Anhui An Lian Xin Da Accounting Firm Co., Ltd.
On 25 Nov. 2010, the Company increased capital RMB 45 million, registered capital amounting to RMB 55
million, including RMB 54.9 million contributed by the Company, a 99.82% of the registered capital, while
Mianyang Meiling invested RMB 0.1 million, a 0.18% of the registered capital. The increased capital has
been verified by verification report of [Wan Hua Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued by
Anhui Hua Shen Zhengda CPA Co., Ltd.
7) Guangxi Huidian Home Appliance Co., Ltd. (hereinafter referred to as Guangxi Huidian) established in
March 2010 with registered capital of RMB 5 million. The Company invested RMB 1 million, accounted for
20% of the registered capital; Meiling Marketing acquired 44% equity interests from the minority
shareholders in 2014. In 2015, Meiling Marketing and Jiangxi Meiling Appliances entered into equity
transfer agreements with minority shareholders respectively, to acquire as the transferees the 35.6% and 0.4%
equity interests of Guangxi Weidian held by minority shareholders. Upon completion of equity transfer in
April 2015, Meiling Marketing and Jiangxi Meiling Appliances held the entire equity interests of Guangxi
Huidian as a whole.
298
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
8) Jinan Xiangyou Electric Marketing Co., Ltd. (hereinafter referred to as Jinan Xiangyou) was established
dated 3 June 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million,
accounted for 36% of the registered capital; after Meiling Marketing acquired 55.4% equity interests from
the minority shareholders in 2015, Meiling Marketing totally holds 91.4% equity of the Jinan Xiangyou, In
2019, minority shareholders step out, shares of Jinan Meiling hold by Meiling Marketing changed to 93.4%.
9) Wuhan Meizirong Electric Marketing Co., Ltd. (hereinafter referred to as Wuhan Meizirong) was
established dated 10 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB
4.55 million, accounted for 91% of the registered capital.
10) Zhengzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Zhengzhou Meiling) was
established dated 17 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
1.08 million, accounted for 36% of the registered capital. In 2013, Meiling Marketing purchased 10% equity
from minority; Meiling Marketing signed equity transfer agreement with the minority shareholders in April
2015, to acquire as the transferee the 39% equity interests of Zhengzhou Meiling held by minority
shareholders, Meiling Marketing acquired 10% equity interests from the minority shareholders in February
2016; and after acquiring 5% equity from minority in 2017, Meiling Marketing totally holds 100% equity of
Zhengzhou Meiling.
11) Chengdu Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Chengdu Meiling) was
established dated 26 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB
4.17 million, accounted for 83.4% of the registered capital; After Meiling Marketing purchased 9% equity
from minority in 2015, purchased 0.8% equity from minority in 2016, and purchased 1.2% equity from
minority in 2018, Meiling Marketing totally holds 96% equity of Chengdu Meiling.
12) Fuzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Fuzhou Meiling) was established
dated 25 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million,
accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the minority, Meiling
Marketing holds 100% equity of Fuzhou Meiling in total.
13) Nanjing Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Nanjing Meiling) was
established dated 14 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the
minority, Meiling Marketing holds 100% equity of Nanjing Meiling in total.
14) Taiyuan Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Taiyuan Meiling) was
established dated 18 January 2011 with registered capital of RMB 4 million; Meiling Marketing invested RMB
1.59 million, accounted for 39.75% of the registered capital; after Meiling Marketing purchased 45.5%
equity from minority in 2013, after purchased 14.75% equity from minority in 2016, Meiling Marketing
totally holds 100% equity of the Taiyuan Meiling.
299
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
15) Hangzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Hangzhou Meiling) was
established dated 17 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.655 million, accounted for 88.5% of the registered capital; Meiling Marketing signed equity transfer
agreement with the minority shareholders in 2015, to acquire as the transfer the 6.5% equity interests of
Hangzhou Meiling held by minority shareholders. Upon completion of such equity transfer in February 2015,
Meiling Marketing held in aggregate the 95% equity interests of Hangzhou Meiling; in 2017, after acquiring
5% equity from the minority, Meiling Marketing holds 100% equity of Hangzhou Meiling in total.
16) Shanghai Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Shanghai Meiling) was
established dated 9 March 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital.
17) Guangzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Guangzhou Meiling) was
established dated 13 May 2011 with registered capital of 5 million Yuan; Meiling Marketing invested 4.3
million Yuan, accounted for 86% of the registered capital; after Meiling Marketing acquired 12% equity
interests from the minority shareholders in 2014, Meiling Marketing totally held the 98% equity interests of
Guangzhou Meiling.
18) Tianjin Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Tianjin Meiling) was established
dated 2 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.565 million Yuan,
accounted for 85.5% of the registered capital; In 2015, Meiling Marketing and Jiangxi Meiling Appliances
entered into equity transfer agreements with minority shareholders respectively, to acquire as the transfers the
14.1% and 0.4% equity interests of Tianjin Meiling held by minority shareholders. Upon completion of
equity transfer in December 2015, Meiling Marketing totally held the entire equity interests of Tianjin
Meiling.
19) Beijing Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Beijing Meiling) was established
dated 28 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.97 million Yuan,
accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the minority
shareholders, Meiling Marketing holds 100% equity of the Beijing Meiling in total.
20) Hefei Meiling Nonferrous Metal Products Co., Ltd. (hereinafter referred to as Nonferrous Metal) was the
Sino-foreign joint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore Kim
Shin Development Co., Ltd., which have been originally approved by the [WJMWFZZ (1996) No.349] of
Foreign Trade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million upon
establishment, of which, original Meiling Group invested US$ 1.46 million (monetary capital), accounting
50% of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB
0.18 million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim Shin
Development Co., Ltd invested US$ 0.876 million (monetary capital), accounting 30% of the registered capital.
The above mentioned investment verified by the verification report of [HSWZ (1995) No. 0737], [HSWZ
300
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1996) No. 328] and [HSWZ (1998) No. 088] from Anhui CPAs Co., Ltd. In July 2008, approved by [HWS
(2008) No.53] from Foreign Trade Economic Cooperation Bureau of Hefei City, 30% equity and 20% equity
held by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively transferred to
original Meiling Group Totally. The Company‘s register capital came into RMB 24,286,808.00 after
transference, and was not the joint-venture any more.
21) Guangdong Changhong Ridian Technology Co., Ltd. (hereinafter referred to as Changhong Ridian) is a
limited liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafter
referred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred
to as Changhong Motor Transport Company) on May 25, 2016. The registered capital and paid-in capital are
RMB 40 million Yuan, of which Sichuan Changhong has invested 32 million Yuan by monetary capital,
accounting for 80% of the registered capital; Changhong Motor Transport Company has invested 8 million
Yuan, accounting for 20% of the registered capital. The official receipts of registered capital have been
verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Changhong Ridian increased
registered capital of 43 million Yuan on January 4, 2007, changing from 40 million Yuan to 83 million
Yuan , for the newly increased 43 million Yuan , Sichuan Changhong invested 1.8 million Yuan , Guangdong
Xiongfeng Electric Co., Ltd. invested 40 million Yuan , and Kou Huameng and other 9 natural person
shareholders invested 1.2 million Yuan , at the same time, the shareholders' meeting considered and agreed to
transfer the investment of 8 million Yuan of Changhong Motor Transport Company to Sichuan Changhong
Venture Investment Co., Ltd, the structure of the registered capital after changes was that Sichuan
Changhong invested 33.8 million Yuan , accounting for 40.72%；Guangdong Xiongfeng Electric Co., Ltd.
invested 40 million Yuan , accounting for 48.19%; Sichuan Changhong Venture Investment Co., Ltd Invested
8 million Yuan , accounting for 9.64%; Kou Huameng and other 9 natural person shareholders invested 1.2
million Yuan , accounting for 1.45%. The change of registered capital was verified by Zhongshan Promise
Accounting Firm [No. ZCHZ (2007)501010].
On February 18, 2009, seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng,
after the transfer, the registered capital of Changhong Ridian was still 83 million Yuan , the structure of
registered capital after changes was that Sichuan Changhong invested 33.8 million Yuan , accounting for
40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million Yuan , accounting for 48.19%; Sichuan
Changhong Venture Investment Co., Ltd invested 8 million Yuan , accounting for 9.64%; Hu Zhiheng and
other two natural person shareholders invested 1.2 million Yuan , accounting for 1.45%.
On October 9, 2014, Changhong Ridian held the shareholders meeting which considered and agreed Kou
Huameng to transfer its stock rights of total 250,000 Yuan which accounts for 0.301% of the Changhong
Ridian‘s registered capital to Sichuan Changhong Venture Investment Co., Ltd at the cost of 317,802 Yuan.
The other shareholders of the Changhong Ridian waived the right of pre-emption. On December 11, 2014,
Changhong Ridian held the shareholders meeting which considered and agreed Guangdong Xiongfeng
Electric Co., Ltd. to transfer its stock rights of total 40 million Yuan which accounts for 48.19 % of the
company's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 Yuan. The
301
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
other shareholders of the Changhong Ridian waived the right of pre-emption. The structure of registered
capital after changes was that Sichuan Changhong invested 73.8 million Yuan, accounting for 88.92%;
Sichuan Changhong Venture Investment Co., Ltd Invested 8.25 million Yuan, accounting for 9.94%; Hu
Zhiheng and another natural person shareholder invested 950,000 Yuan , accounting for 1.14%.
On 4 January 2016, Sichuan Changhong and Sichuan Changhong Venture Investment Co., Ltd. transferred
total 98.855% equity of the Changhong Ridian to the Company. After the transfer, the Company directly
holds 98.855% stock rights of Changhong Ridian.
22) Changmei Technology Co., Ltd. (hereinafter referred to as Changmei Technology) was invested and set
up on May 12, 2016 in order to promote intelligent transformation and implement the company‘s intelligent
life project according to the company's strategic planning and business development needs. In accordance
with the Article of Association, registered capital of Changmei Technology was 50 million Yuan, including
48.128 million Yuan contributed by the Company in cash, a 96.256% in the contribution capital, the
management team contribute 1.872 million Yuan in cash, a 3.744% in contribution capital.
23) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as Indonesia
Changhong) is a subsidiary established in Indonesia and jointly invested by Zhongshan Changhong and
Sichuan Changhong in 2016, the company‘s registered capital is 6 million US dollars, of which Zhongshan
Changhong subscribed and paid 5.88 million US dollars in cash, accounting for 98% of the registered capital,
Changhong Air Conditioning subscribed and paid 120,000 US dollars in cash, accounting for 2% of the
registered capital. On 4 July 2017, rests of the 2.94 million US dollars are subscribed by Zhongshan
Changhong in line with the agreement.
24) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was a
joint venture established by Zhongshan Changhong Appliances Company Limited and RUBA GENERAL
TRADING FZE Company (―RUBA‖) on 5 August 2011 with the approval from Guangdong Development
and Reform Commission by issuance of the Approval Relating to Joint Construction of a Manufacturing and
Selling Platform Project in Pakistan by Zhongshan Changhong Appliances Company Limited
(YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan
Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba Trading
Company (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capital
to Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at an
earlier stage, Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAE
RUBA Company invested 2.56 million US dollars, the shares held by both sides remained unchanged. After
the capital increase, the company‘s registered capital became 12.4 million US dollars, of which Zhongshan
Changhong Home Appliances Company Limited invested 7.44 million US dollars in cash, shareholding ratio
was 60%, UAE RUBA Company invested 4.96 million US dollars in cash, and shareholding ratio was 40%.
25) Sichuan Changhong Air Conditioner Co., Ltd.(hereinafter referred to as Changhong Air Conditioner), a
302
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
limited liability company jointly set up by Sichuan Changhong and Changhong Chuangtou, was founded on
November 28, 2008. Its registered capital was RMB 200 million upon establishment, of which, Sichuan
Changhong invested RMB 298 million (RMB 210,088,900 invested by monetary capital while RMB
87,911,100 invested by real material), equivalent to RMB 198 million shares, accounting for 99% of the
registered capital; and Changhong Chuangtou invested RMB 3 million, accounting for 1% of the registered
capital with equivalent of RMB 2 million shares. The registered capital receipt was verified by the
verification report [CGYYZ (2008) No. 177] of Sichuan Guangyuan Certified Public Accountants Co., Ltd.
and [HLTHYZ (2008) No. 12-006] of Sichuan Henglitai Certified Public Accountants Co., Ltd. In December
2009, the Company obtained 100% equity of Changhong Air-conditioner by consolidated under the same
control. In 2017, the Company increased capital of 650 million Yuan to Changhong Air Conditioner, after
capital increased, registered capital of Sichuan Changhong comes to 850 million Yuan from 200 million Yuan,
shareholding still counted as 100%.
26) Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong), was the
original Guangdong Changhong Electric Co., Ltd., and is a limited liability company jointly set up by
Sichuan Changhong and China Minmetals on May 22, 2001. Its registered capital was RMB 80 million upon
establishment, of which, Sichuan Changhong invested RMB 72 million, including RMB 69.3 million biding
for the estate/ non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And its patent use-right
of RMB2.7 million, accounting for 90% of the registered capital; Chine Minmetals invested RMB 8 million
in monetary capital accounting 10% of the registered capital. The Company changed its name originally from
Guangdong Changhong Electric Co., Ltd in July 2003. In December 2009, the Company obtained 90%
equity of Zhongshan Changhong by consolidated under same control. 10% equity held by China Minmetals
has been transferred by Changhong Air-conditioner on April 11, 2010. On 25 May 2014, the Company
increased RMB 36 million to Zhongshan Changhong, and Changhong AC increased RMB 4 million. In 2016,
according to the overseas development strategy of the Company and the development and operation needs of
the subsidiaries, the Company and the wholly-owned subsidiary Changhong Air Conditioning have increased
capital of RMB 64 million Yuan to Zhongshan Changhong according to the existing shareholding ratio,
among which the capital increase of the Company was RMB 57.6 million Yuan, and the capital increase of
Changhong Air Conditioning was RMB 6.4 million Yuan. After the completion of this capital increase, the
registered capital Zhongshan Changhong shall increase to RMB 184 million Yuan, the shareholding ratio of
the company and Changhong Air Conditioning remained unchanged and was still 90% and 10%, of which
the Company invested 165.6 million Yuan, accounting for 90% of the registered capital, Changhong Air
Conditioning invested 18.4 million Yuan, accounting for 10% of the registered capital.
27) Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group), was the state-owned
company originally approved by People‘s Government of Hefei Province and established authorized by SASAC of
Hefei City. On July 14, 2008, 100% state-owned equity of Meiling Group has freely transferred to Xingtai
Holding by Hefei SASAC. Agreement by the approval of < State-owned property agreement transfer from
Meiling Group> [ HGZCQ (2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of
303
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Meiling Group after partial assets and liabilities separated transferred to the Company from Xingtai Holding
as amount of RMB 113.2 million. The re-registration of industrial and commercial procedure for Meiling
Group after separated partial assets liability has finished on July 28, 2010. The new Meiling Group has
register capital of RMB 80 million, and has been verified by the [AD (2010) YZD No. 016] from Anhui
Auding CPAs Co., Ltd.
28) Meiling Equator Household Appliance (Hefei) Co., Ltd.( hereinafter referred to as Equator Household
Appliance) was the Sino-foreign joint venture jointly set up by original Meiling Group and EQUATOR
INVESTMENTS (USA) INC.( EQUATOR for short), which have been approved by the [SWZWFZZ(2004)
No.0103] of Approval Certificate of Foreign Enterprise from People‘s Government of Anhui Province. Its
registered capital was US$ 3 million upon establishment, of which, Sino company invested US$ 2.25 million
in machinery equipment, accounting 75% of the registered capital while foreign company invested US$ 0.5
million in monetary capital and US$ 0.25 million in intangible assets, amounting to US$0.75 million,
accounting 25% of the registered capital. The above mentioned investment verified by the verification report
of [WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. In July 2007, approved by [HWJ (2007)
No.136] from Foreign Trade Economic Cooperation Bureau of Hefei City, 25% equity held by EQUATOR
transferred to Anhui Meiling Electric Co., Ltd. Totally. The Company‘s register capital came into RMB
24,793,200 after transference, and was not the joint-venture any more. 25% equity owned by Anhui Meiling
Electric Co., Ltd has been transferred totally to original Meiling Group in July 2009.
29) Hefei Equator Appliance Co., Ltd.(hereinafter referred to as Equator Appliance) was jointly set up by original
Meiling Group and Yingkaite Appliance on September 26, 2007. Its register capital was RMB 12 million, among
which, original Meiling Group invested 8,670,600 Yuan in monetary capital, accounting 72.255% in
registered capital; Equator Appliance invested 3,329,400 Yuan in the assessment value of intangible assets
(land-use right), accounting 27.745% of total registered capital. The investment being verified by [WYAZ
(2004) No. 135] from Anhui Yongan CPAs Co., Ltd.
30) Hongyuan Ground Energy Heat Pump Technology Co., Ltd. (hereinafter referred to as Hongyuan Ground
Energy) was established on 28 August 2015, it is a limited liability company authorized by Administration
for Industry and Commerce of Peicheng District, Mianyang, Sichuan, contributed by Sichuan Changhong Air
Conditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan Technology
Development Group Co., Ltd. together. Registered capital amounted as 50 million Yuan, including 25.5
million Yuan contributed by Changhong Air Conditioner in cash, a 51% in total registered capital;
Hengyouyuan Technology Development Group Co., Ltd. invested 24.5 million Yuan in cash, a 49% in
registered capital.
31) Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.(hereinafter referred to as Hongyuan
Zhongshan) was established and invested on 18 July 2017 with registered capital of 15 million Yuan, The
Hongyuan Ground Energy Heat Pump Tech. Co., Ltd contributed 1.5 million Yuan with own funds and takes
100% in the registered capital.In 2018, the shareholdes of the Hongyuan Zhongshan decided to increase
304
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
capital of 30 million Yuan, and contributed by the shareholder Hongyuan Ground Energy; thus registered
capital of Hongyuan Zhongshan up to 45 million Yuan
32) Meiling Candy Washing Machine Co., Ltd. (hereinafter referred to as Meiling Candy) was established
and registered on 27 April 2017, which was contributed by the Company and Candy Hoover Group S.r.l.
together. Registered capital counted as 150 million Yuan, including 90 million Yuan invested by the
Company, a 60% in registered capital.
33) Guangzhou Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was established
on 6 Jan. 2017, the wholly-owned subsidiary of Zhongshan Changhong Electric Co., LTD (hereinafter
referred to as Zhongshan Changhong) with registered capital of one million Yuan
34) Hebei Hongmao Household Appliance Technology Co., Ltd (hereinafter referred to as Hebei Hongmao)
was established on 21 July 2017 with registered capital of 5 million Yuan. Guangdong Changhong Ridian
Technology Co., Ltd. invested 5 million Yuan by own fund and takes 100% in registered capital.
35) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was established on
20 May 2019 with registered capital of 10 million Yuan and it is the subsidiary of Zhongke Meiling with
fully-owned establishment. As of December 31, 2019, no capital contributes.
(2) Major non-wholly-owned subsidiary
Gains/losses Dividend distributed
Balance of
Shareholding ratio attributable to to minority
Subsidiary minority’s interest at
of minority minority in Current announced in
year-end
Year Current Year
Meiling CANDY 40.00% -13,220,680.37 23,278,075.71
Changmei
3.74% -428,589.49 -10,172.47
Technology
Zhongke Meiling 36.73% 5,642,568.83 2,274,030.00 56,699,296.01
Hongyuan Ground
49.00% 2,626,705.18 19,726,070.07
Energy
Changhong Ridian 1.15% 224,541.35 1,780,801.57
(3) Financial information for major non-wholly-owned subsidiary
Balance atyear-end
Subsidiary Non-current
Current assets Non-current assets Total assets Current liability Totalliabilities
liability
Meiling
107,483,599.72 560,471.69 108,044,071.41 42,492,057.38 7,356,824.76 49,848,882.14
CANDY
Changmei
813,640.04 69,816.35 883,456.39 1,155,157.08 0.00 1,155,157.08
Technology
Zhongke
173,698,258.09 135,802,000.42 309,500,258.51 146,202,370.20 8,938,774.23 155,141,144.43
Meiling
305
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Subsidiary Balance atyear-end
Hongyuan
Ground 72,495,161.24 29,851,452.34 102,346,613.58 59,872,173.74 2,217,153.99 62,089,327.73
Energy
Changhong
469,012,870.35 55,302,405.39 524,315,275.74 368,560,861.13 171,540.99 368,732,402.12
Ridian
(Continued)
Balance atyear-begin
Subsidiary Non-current
Current assets Non-current assets Total assets Current liability Totalliabilities
liability
Meiling
208,581,384.55 633,265.82 209,214,650.37 111,545,406.70 6,422,353.48 117,967,760.18
CANDY
Changmei
8,495,444.28 12,071,248.03 20,566,692.31 8,889,062.92 501,961.24 9,391,024.16
Technology
Zhongke
147,151,433.04 128,385,679.37 275,537,112.41 132,039,203.60 6,932,380.00 138,971,583.60
Meiling
Hongyuan
Ground 153,229,031.96 34,694,234.27 187,923,266.23 148,809,162.62 4,217,440.58 153,026,603.20
Energy
Changhong
307,951,618.55 59,236,288.32 367,187,906.87 231,048,365.86 171,540.98 231,219,906.84
Ridian
(Continued)
Current Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
317,770,222.39 -33,051,700.92 -33,051,700.92 -25,713,640.22
CANDY
Changmei
8,690,450.15 -11,447,368.84 -11,447,368.84 -5,062,903.93
Technology
Zhongke
222,867,915.68 16,517,245.60 16,517,245.60 42,134,505.66
Meiling
Hongyuan
Ground 405,759,143.48 5,360,622.82 5,360,622.82 3,492,950.80
Energy
Changhong
629,710,961.93 19,614,873.59 19,614,873.59 131,645,676.68
Ridian
(Continued)
Last Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
468,389,142.46 -6,768,757.59 -6,768,757.59 -24,223,592.67
CANDY
Changmei
26,839,141.37 -17,947,299.32 -17,947,299.32 -17,689,892.58
Technology
306
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Subsidiary Last Year
Zhongke
185,678,757.29 15,463,119.14 15,463,119.14 32,609,413.80
Meiling
Hongyuan
Ground 448,481,933.01 -11,363,421.53 -11,363,421.53 -7,732,643.87
Energy
Changhong
525,992,095.11 15,367,774.29 15,367,774.29 57,919,926.89
Ridian
(4) Major limitation on using enterprise group‘s assets and liquidate debts of enterprise group: nil
(5) Offering financial supporting or other supports for structured entity that included in consolidation
statement scope: nil
2. Changes of owner‘ equity shares in subsidiary and its impacts
Item Zhongke Meiling Jinan Xiangyou Total
Original ratio of shares held 66.8703% 91.40%
Equity purchased from
-3.602% 2%
minority
Share issuance
Ratio of shares held at
63.2683% 93.40%
period-end
Cost of purchasing minority
equity
Less: Ratio of the net assets
measured by equity ratio
53,311.81 -56,291.17 -2,979.36
while acquiring the
subsidiary
Equity dilution for shares
issuance
Balance 53,311.81 -56,291.17 -2,979.36
Including: Capital public
53,311.81 -56,291.17 -2,979.36
reserve adjusted
In 2019, the subsidiary Zhongke Meiling Cryogenics Technology Co., Ltd. received the subscribed capital
contribution from the minority shareholders in the current period, resulting in a reduction in the Company‘s
shareholding ratio. The difference between the equity payment paid by the minority shareholders and the
share of net assets that should be continuously calculated by Zhongke Meiling from the purchase date in
accordance with the newly increased shareholding ratio was 53,311.81 yuan, which was included in the
capital reserve.
In 2019, the subsidiary acquired the minority shareholders‘ equity of Jinan Xiangyou Electric Appliances
Marketing Co., Ltd., and the difference between the newly acquired long-term equity investment and the
share of net assets that should be continuously calculated by the subsidiary from the purchase date in
accordance with the newly increased shareholding ratio was 56,291.17 yuan, which was included in capital
reserve.
3. Equity in joint venture or associate enterprise
307
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Major joint venture or associate enterprise
Shareholding Accounting
ratio (%) treatment for
Main office Registe Business investment of
Joint venture or associate enterprise place r place nature Direct Indire joint venture or
ly ctly associate
enterprise
Associate enterprise:
1.ChanghongRubaElectricCompany Lahore, Manufactures,
Lahore 40.00 Equity
(Private)Ltd. Pakistan sales
2.Hefei Xingmei Assets Management Co., Rental,
Hefei Hefei 48.28 Equity
Ltd. agency
3.Sichuan Zhiyijia Network Technology
Mianyang Mianyang Sales 50.00 Equity
Co., Ltd.
4.Hongyuan Ground Energy Heat Tech. R & D, sales,
Mianyang Mianyang 49.00 Equity
Co., Ltd. after-sales
5.Sichuan Tianyou Guigu Technology Co., Manufactures,
Mianyang Mianyang 25.00 Equity
Ltd. sales
R&D,
6..Chengdu Guigu Environmental Tech.
Chengdu Chengdu manufacturin 25.00 Equity
Co., Ltd.
g and sales
(2) Financial information for major Joint venture: nil
(3) Financial information for associate enterprise
Balance atyear-end / CurrentYear
Hefei Sichuan Hongyuan Sichuan .Chengdu
ChanghongR
Item Xingmei Zhiyijia Ground Tianyou Guigu
ubaElectricC
Assets Network Energy Guigu Environme
ompany(Priv
Management Technology Heat Tech. Technology ntal Tech.
ate)Ltd.
Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
Current assets 104,632,500.22 1,833,902.21 3,365,539,682.22 46,101,621.41 21,254,869.83 18,277,711.92
Including: cash and
5,030,479.12 1,726,698.95 2,349,815,225.85 925,625.77 11,975,680.17 3,026,977.11
cash equivalent
Non-current assets 52,830,981.68 17,138,280.87 1,252,898.22 12,965,065.72 39,777.34 14,593,410.88
Total assets 157,463,481.90 18,972,183.08 3,366,792,580.44 59,066,687.13 21,294,647.17 32,871,122.80
Current liability 153,934,962.09 1,253,430.54 3,272,121,806.17 11,291,418.86 10,066,985.00 14,376,055.61
Non-current liability 651,580.00
Total liabilities 153,934,962.09 1,253,430.54 3,272,773,386.17 11,291,418.86 10,066,985.00 14,376,055.61
Minority's interest 1,059,268.80
Equity attributable to
shareholder of parent 3,528,519.81 17,718,752.54 94,019,194.27 47,775,268.27 11,227,662.17 17,435,798.39
company
Share of net assets
measured by 1,411,407.92 8,554,613.73 47,009,597.14 23,409,881.45 2,806,915.54 4,358,949.60
shareholding
Adjustment
--Goodwill 821,877.28 3,887,027.34
Unrealized profit of the 393,075.11 2,223,966.56 34,940.80 4,691.99 28,751.02
internal downstream
308
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance atyear-end / CurrentYear
Hefei Sichuan Hongyuan Sichuan .Chengdu
ChanghongR
Item Xingmei Zhiyijia Ground Tianyou Guigu
ubaElectricC
Assets Network Energy Guigu Environme
ompany(Priv
Management Technology Heat Tech. Technology ntal Tech.
ate)Ltd.
Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
transactions
Unrealized profit of the
internal upstream
transactions
Other -1,018,332.81
Book value of the
equity investment for 8,554,613.73 45,607,507.85 23,374,940.65 2,802,223.55 8,217,225.92
associate enterprise
Fair value of equity
investment for the
affiliates with
consideration publicly
Operation income 190,497,799.56 - 7,062,900,153.63 98,907,938.70 -285,926.94 34,249,377.30
Financial expenses 369,800.99 -5,725.41 -11,188,778.31 73.08 -486,373.04 279,703.22
Income tax expenses 2,656,027.23 1,244,095.42
Net profit -25,031,693.64 -1,792,637.83 3,755,397.84 528,794.11 -17,234,926.28 -3,921,022.61
Net profit of
discontinuing operation
Other comprehensive
-2,111,831.07
income
Total comprehensive
-27,143,524.71 -1,792,637.83 3,755,397.84 528,794.11 -17,234,926.28 -3,921,022.61
income
Dividend received
from associate
enterprise in Current
Year
(Continued)
Balance atyear-begin/LastYear
Hefei Sichuan Hongyuan Sichuan .Chengdu
ChanghongRu
Item Xingmei Zhiyijia Ground Tianyou Guigu
baElectricCom
Assets Network Energy Guigu Environme
pany(Private)L
Management Technology Heat Tech. Technology ntal Tech.
td.
Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
Current assets 91,897,615.22 2,675,645.87 2,183,231,308.63 58,433,074.33 21,327,002.48 14,543,169.26
Including: cash and
2,226,184.18 2,568,442.61 1,051,202,920.87 1,874,763.97 14,337,275.36 2,753,804.68
cash equivalent
Non-current assets 61,362,584.22 18,201,870.67 9,053,276.55 15,117,799.85 17,218,667.66 15,241,625.80
Total assets 153,260,199.44 20,877,516.54 2,192,284,585.18 73,550,874.18 38,545,670.14 29,784,795.06
Current liability 122,588,154.92 1,366,126.17 2,151,196,374.07 26,304,400.02 10,083,081.69 8,538,705.26
Non-current liability 685,260.00
Total liabilities 122,588,154.92 1,366,126.17 2,151,881,634.07 26,304,400.02 10,083,081.69 8,538,705.26
Minority's interest
Equity attributable to 30,672,044.52 19,511,390.37 40,402,951.11 47,246,474.16 28,462,588.45 21,246,089.80
309
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance atyear-begin/LastYear
Hefei Sichuan Hongyuan Sichuan .Chengdu
ChanghongRu
Item Xingmei Zhiyijia Ground Tianyou Guigu
baElectricCom
Assets Network Energy Guigu Environme
pany(Private)L
Management Technology Heat Tech. Technology ntal Tech.
td.
Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
shareholder of parent
company
Share of net assets
measured by 14,069,807.22 9,420,099.27 12,120,885.32 23,150,772.34 7,115,647.11 5,311,522.45
shareholding
Adjustment
--Goodwill 3,887,027.34
Unrealized profit of
the internal
5,020,111.59 8,138,518.55 1,835.80 4,693.04 41,161.52
downstream
transactions
Unrealized profit of
the internal upstream
transactions
Other
Book value of the
equity investment for 9,049,695.63 9,420,099.27 3,982,366.77 23,148,936.54 7,110,954.07 9,157,388.27
associate enterprise
Fair value of equity
investment for the
affiliates with
consideration
publicly
Operation income 126,228,221.53 13,454.00 5,175,169,302.80 39,721,874.63 183,198.16 10,363,359.09
Financial expenses 255,291.28 -8,196.38 -3,389,797.02 94,474.40 -506,304.50 -77,635.70
Income tax expenses 1,968,285.62 3,209,840.03
Net profit -37,897,887.71 -2,644,744.77 -11,083,431.22 562,504.24 -5,354,573.64 -9,683,757.18
Net profit of
discontinuing
operation
Other comprehensive
-9,379,706.16
income
Total comprehensive
-47,277,593.87 -2,644,744.77 -11,083,431.22 562,504.24 -5,354,573.64 -9,683,757.18
income
Dividend received
from associate
enterprise in Current
Year
(4) Financial summary for non-important Joint venture and associate enterprise
Balance at year-end /Current
Item Balance at year-begin /Last Year
Year
Associate enterprise:
Total book value of investment
Total amount measured by shareholding
ratio
310
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end /Current
Item Balance at year-begin /Last Year
Year
--Net profit -380,361.99 -1,780,729.52
--Other comprehensiveincome
-- Total comprehensiveincome -380,361.99 -1,780,729.52
(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates: Nil
(6) Excess loss occurred in joint venture or affiliates: Nil
(7) Unconfirmed commitment with joint venture investment concerned: Nil
(8) Intangible liability with joint venture or affiliates investment concerned: Nil
4. Major conduct joint operation: Nil
5. Structured body excluding in consolidate financial statement: Nil
IX. Relevan t r isks re lated w ith financia l in stru men t
The major financial instruments of the Company include borrowings, account receivables, account payable,
tradable financial assets, tradable financial liability, the details of which are set out in Note VI. Risks related
to these financial instruments include exchange risks and interest rate risks. The management of the
Company controls and monitors the risk exposures to ensure the above risks are under control.
In connection with exchange risks, in order to prevent from exchange risks arising from foreign currency
transaction amount, foreign currency dominated loans and interest expenditure, the Company entered into
several forward exchange contracts with banks. Fair value of the forward exchange contract which has been
recognized as derivative financial instrument has been included in profits and losses. As export business is
increasing, if risks that are out of control of the Company occur such as appreciation of RMB, the Company
will mitigate the relevant risks by adjusting its sales policy.
The Company‘s interest rate risk arises from bank borrowings and interest-bearing debt. Financial liabilities
at floating rate expose the Company to cash flow interest rate risk, and financial liabilities at fixed rate
expose the Company to fair value interest rate risk. The Company will determine the respective proportion of
contracts at fixed and floating rates based on the prevailing market conditions. As of 31 December 2019, the
interest-bearing debts mainly referred to borrowing contracts at floating rate denominated in RMB with total
amount of 961,037,944.82 Yuan, the floating rate loan contract measured by RMB amounted as
459,200,000.00 Yuan in total; borrowing contracts at fixed rate denominated in USD with total amount of
47,438,160.00 Yuan; borrowing contracts at fixed rate denominated in IDR with total amount of
37,594,941.14 Yuan. Risks relating to change of fair value of financial instruments arising from movement of
interest rate mainly related to bank borrowings at fixed rate. As for borrowings at fixed rate, the Company
311
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
aims to keep its floating rate. Risks relating to change of cash flow of financial instruments arising from
movement of interest rate mainly related to bank borrowings at floating rate. The Company establishes its
policy to keep floating rate for these borrowings so as to eliminate fair value risk arising from movement of
interest rate.
X. Fair va lue d isc losu re
1. Asset and liability measured by fair value at end of Current Year and fair value measurement level
F ai r v al u e at y e ar- e n d
Item st
1 level 2nd level 3rd level Total
Financial assets measured by fair value and with variation reckoned into current gains/losses
1.Tradable financial assets
(1) Derivative financial assets 7,730,268.92 7,730,268.92
Financial liabilities measured by fair value and with variation reckoned into current gains/losses
1.Tradable financial liability
(1) Derivative financial liability 1,081,534.93 1,081,534.93
The derivative contract is measured by fair value on 2nd level, which is the real-time quote on foreign
exchange market on balance sheet date
XI. Related parties and related transaction
(I) Relationship of related parties
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
Registr Share-holdin Voting rights
Controlling shareholder and Business Registered
ation g ratio in the ratio in the
ultimate controller nature capital
place Company Company
Mianya Manufactur
Sichuan Changhong Electric Co., Ltd. 4,616,244,222.00 26.98% 26.98%
ng e and sales
Sichuan Changhong Electronic Holding Group is the controlling shareholder of Sichuan Changhong Electric
Co., LTD, and the SASAC Mianyang office holds 100.00% equity interests of Sichuan Changhong
Electronic Holding Group, which means that SASAC Mianyang office is the ultimate controller of the
Company.
(2) Register capital and change thereof of controlling shareholder
Balance at Increased in Decreased in
Controlling shareholder Balance at year-end
year-begin Current Year Current Year
Sichuan Changhong Electric Co., Ltd. 4,616,244,222.00 4,616,244,222.00
312
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(3) Shares held by the controlling shareholder and its changes on equity
Amount of shares held Shareholding ratio
Controlling shareholder Balance at Balance at Ratio at Ratio at
year-end year-begin year-end year-beginning
Sichuan Changhong Electric Co., Ltd. 281,832,434.00 279,200,104.00 26.98% 26.73%
2. Subsidiary
Found more in Note ―VIII. 1 (1) Enterprise group composition‖
3. Joint venture and associated enterprise
Major Joint venture and associated enterprise of the Company found more in Note ―VIII. 3 (1) major joint
venture and associated enterprise‖. Other Joint venture and associated enterprise that have related
transactions occurred with the Company in Current Year or occurred in last period, and with balance results:
Joint venture and associated enterprise Relationship with the company
Hefei Meiling Solar Energy Technology Co., Ltd. Associated enterprise of subsidiary Meiling Group
ChanghongRubaElectricCompany(Private)Ltd. Associated enterprise of subsidiary Zhongshan Changhong
Hefei Xingmei Assets Management Co., Ltd. Associated enterprise of the Company
Associated enterprise of the Company, has the same controlling
Sichuan Zhiyijia Network Technology Co., Ltd.
shareholder and actual control of the Company
Hongyuan Ground Energy Heat Tech. Co., Ltd. Associated enterprise of subsidiary Changhong Air-conditioner
Sichuan Tianyou Guigu Technology Co., Ltd. Associated enterprise of subsidiary Changhong Air-conditioner
.Chengdu Guigu Environmental Tech. Co., Ltd. Associated enterprise of subsidiary Changhong Air-conditioner
4. Other related parties
Related party Relationship with the company
Associated enterprise of other enterprise that have the same
Sichuan Yunyou Internet Tech. Co., Ltd.
controlling shareholder
Control by same controlling shareholder and ultimate
Sichuan Changhong International Travel Service Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hunan Grand-Pro Intelligent Tech. Company
controller
Control by same controlling shareholder and ultimate
Mianyang Huafeng Interconnection Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONG ELECTRIC (AUSTRALIA)
controller
Control by same controlling shareholder and ultimate
Shenzhen YijEn Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONG ELECTRIC MIDDLE EASTFZCO
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic Products Co., Ltd.
controller
Control by same controlling shareholder and ultimate
BVCH Optronics (Sichuan) Co., Ltd.
controller
313
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Related party Relationship with the company
Hefei Changhong New Energy Science & Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Mold Plastic Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Changhong Europe Electric s.r.o
controller
Control by same controlling shareholder and ultimate
Changhong Huayi Compressor Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Jijia Fine Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Minsheng Logistics Co., LTD
controller
Control by same controlling shareholder and ultimate
Sichuan Service Exp. Appliance Service Chain Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Precision Electronics Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
PT.CHANGHONG ELECTRIC INDONESIA
controller
Control by same controlling shareholder and ultimate
CHANGHONG (HK) TRADING LIMITED
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Device Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Chengdu Changhong Electronic Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Lejiayi Chain Management Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongwei Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong New Energy Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Changhong International Holdings (Hong Kong) Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangdong Changhong Electronics Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Package Printing Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Energy Sunshine Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Power Source Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongxin Software Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic System Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Network Technology Co., Ltd.
controller
Mianyang Technology Town Big Data Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
GuangYuan Changhong Electronic Technology Co., Ltd.
controller
314
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Related party Relationship with the company
Control by same controlling shareholder and ultimate
Yuanxin Financial Lease Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Changhong Shundatong Tech. Development Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Wisdom Health Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Venture Investment Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Communication Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Orion.PDP.Co.,ltd
controller
Control by same controlling shareholder and ultimate
Guangyuan Hongcheng Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
081 Electronic Group
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Hotel Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Aichuang Technology Co., Ltd.
controller
Sichuan Changhong Intelligent Manufacturing Tech. Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Service Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huanyu Industrial Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Jiahong Industrial Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Ailian Science & Technology Co., Ltd.
controller
Sichuan Changhong Gerun Environmental Protection Tech. Control by same controlling shareholder and ultimate
Co., Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Real Estate Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huafeng Corp. Group
controller
Control by same controlling shareholder and ultimate
Anhui Xinhao Plasma Display Panel Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Group Finance Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Education Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Xinrui Tech. Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronics Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Yibin Red-Star Electronics Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Construction Engineering Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Jiahua Information Products Co., Ltd.
controller
Beijing Changhong Tech. Co. Ltd, Subsidiary of the associated enterprise of controlling
315
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Related party Relationship with the company
shareholder
Sichuan Changhong Electronics Holding Group Co., Ltd. Parent company of controlling shareholder
Associated enterprise of other enterprise that have the same
Sichuan Hongyu Metal Manufacturing Co., Ltd.
controlling shareholder
Sichuan Hongran Green Energy Co., Ltd. Associated enterprise of controlling shareholder
Sichuan Changxin Refrigeration Parts Co., Ltd. Associated enterprise of controlling shareholder
Mianyang Highly Electric Co., Ltd. Associated enterprise of controlling shareholder
Sichuan Family Help Electric Service Co., Ltd. Associated enterprise of controlling shareholder
Chengdu HOPE Testing Tech. Co. Ltd. Associated enterprise of controlling shareholder
Note: In July 2018, shares of Sichuan Changhe Technology Co., Ltd. hold by Sichuan Changhong Venture Investment Co., Ltd
are on sale in total, the Sichuan Changhe Technology Co., Ltd. is not the related party of the Company any more.
(ii) Related transactions
1. Purchasing commodity
Current Year Last Year
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhong Electric Co., Ltd. 33,598.70 33,040.87
commodity
Purchasing
Sichuan Changhong Electronics Holding Group Co., Ltd. 9.11
commodity
Purchasing
Changhong Huayi Compressor Co., Ltd. 38,238.09 53,248.03
commodity
Purchasing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 63,000.18 73,348.73
commodity
Purchasing
Sichuan Changhong Jijia Fine Co., Ltd. 24,924.66 30,669.97
commodity
Purchasing
Sichuan Changhong Package Printing Co., Ltd. 8,304.76 10,413.66
commodity
Purchasing
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 1,270.34 6,325.00
commodity
Purchasing
Sichuan Changhong New Energy Technology Co., Ltd. 2.18 4.18
commodity
Purchasing
081 Electronic Group 49.47 184.39
commodity
Purchasing
Guangdong Changhong Electronics Co., Ltd. 233.81 423.80
commodity
Sichuan Changhong Intelligent Manufacturing Tech. Co., Purchasing
99.30 47.03
Ltd. commodity
Purchasing
Sichuan Hongwei Technology Co., Ltd. 426.64
commodity
Purchasing
Sichuan Jiahong Industrial Co. Ltd. 17.65
commodity
Purchasing
Sichuan Changhong International Hotel Co., Ltd. 18.86
commodity
316
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Purchasing
Sichuan Zhiyijia Network Technology Co., Ltd. 96.01 20.78
commodity
Purchasing
Sichuan Changhong Power Source Co., Ltd. 0.30
commodity
Purchasing
Changhong International Holdings (Hong Kong) Co., Ltd. 39.47
commodity
Purchasing
Sichuan Changhong Electronic Products Co., Ltd. 2,401.66 2,885.43
commodity
Purchasing
Sichuan Hongxin Software Co., Ltd. 16.98
commodity
Purchasing
Sichuan Changhong Property Service Co., Ltd. 0.03 0.04
commodity
Purchasing
Sichuan Ailian Science & Technology Co., Ltd. 2,073.65 1,167.16
commodity
Purchasing
Sichuan Aichuang Technology Co., Ltd. 9,800.56 5,211.18
commodity
Purchasing
Sichuan Changhong Communication Tech. Co., Ltd. 2.58
commodity
Purchasing
Sichuan Changhong Electronic System Co., Ltd. 4.74 4.74
commodity
Purchasing
Hunan Grand-Pro Intelligent Tech. Company 777.09 230.21
commodity
Purchasing
Sichuan Changhong Network Technology Co., Ltd. 9.30
commodity
Purchasing
Lejiayi Chain Management Co., Ltd. 5.96
commodity
Purchasing
GuangYuan Changhong Electronic Technology Co., Ltd. 37.66
commodity
Purchasing
Sichuan Hongyu Metal Manufacturing Co., Ltd. 134.82
commodity
Purchasing
Sichuan Changhe Technology Co., Ltd. 378.56
commodity
Purchasing
Sichuan Changxin Refrigeration Parts Co., Ltd. 31,004.61 32,083.39
commodity
Purchasing
Mianyang Highly Electric Co., Ltd. 20,297.34 33,607.77
commodity
Purchasing
Sichuan Yunyou Internet Tech. Co., Ltd. 13.31
commodity
Purchasing
Hongyuan Ground Energy Heat Tech. Co., Ltd. 32.64
commodity
Purchasing
Changhong Ruba Electric Company (Private) Ltd. 14,248.25 14,566.51
commodity
Purchasing
Sichuan Tianyou Guigu Technology Co., Ltd. -29.26
commodity
Purchasing
.Chengdu Guigu Environmental Tech. Co., Ltd. 6.46 3.71
commodity
Total 250,999.55 298,033.50
2. Accept the services
Related party Content Current Year Last Year
317
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Related party Content Current Year Last Year
Sichuan Changhong Electronics Holding Group Co., Ltd. Accept the services 683,104.41 921,617.88
Sichuan Changhong Electric Co., Ltd. Accept the services 15,698,020.68 23,257,377.60
Sichuan Changhong Minsheng Logistics Co., LTD Accept the services 437,841,044.49 537,900,775.75
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Accept the services 108,415.22 165,894.20
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Accept the services 239,791,744.81 194,960,696.99
Sichuan Hongxin Software Co., Ltd. Accept the services 344,269.80 1,130,201.88
Guangdong Changhong Electronics Co., Ltd. Accept the services 478,854.47 1,032,427.98
Sichuan Jiahong Industrial Co. Ltd. Accept the services 70,777.77 219,734.50
Sichuan Changhong International Hotel Co., Ltd. Accept the services 146,160.13 388,596.83
Sichuan Changhong International Travel Service Co., Ltd. Accept the services 536,069.03 869,951.89
Sichuan Changhong Property Service Co., Ltd. Accept the services 4,087,128.07 836,614.81
Sichuan Hongwei Technology Co., Ltd. Accept the services 372,168.84 518,742.29
Sichuan Zhiyijia Network Technology Co., Ltd. Accept the services 2,961,015.42 7,409,344.17
Sichuan Changhong Network Technology Co., Ltd. Accept the services 45,698.47 78,651.34
Sichuan Changhong Intelligent Manufacturing Tech. Co.,
Accept the services 2,305,673.20 5,900,756.90
Ltd.
Sichuan Changhong Jijia Fine Co., Ltd. Accept the services 38,056.39
Sichuan Changhong Gerun Environmental Protection Tech.
Accept the services 115,580.94
Co., Ltd.
Sichuan Changhong Jiahua Information Products Co., Ltd. Accept the services 6,037.74
BVCH Optronics (Sichuan) Co., Ltd. Accept the services 67,935.00
Sichuan Changhong Electronic Products Co., Ltd. Accept the services 450,488.09 388,574.88
081 Electronic Group Accept the services 420,000.00
Sichuan Ailian Science & Technology Co., Ltd. Accept the services 26,251.68
Chengdu HOPE Testing Tech. Co. Ltd. Accept the services 7,566.04
Sichuan Yunyou Internet Tech. Co., Ltd. Accept the services 55,440.01
Total 706,404,940.97 776,232,519.62
3. Purchase fuel and power
Related party Content Current Year Last Year
Sichuan Changhong Electric Co., Ltd. Purchase fuel and power 17,956,706.73 20,264,380.43
Changhong Huayi Compressor Co., Ltd. Purchase fuel and power 825,915.60 720,372.91
Guangdong Changhong Electronics Co., Ltd. Purchase fuel and power 1,429,349.92 1,680,446.20
Hefei Changhong New Energy Science & Technology Co.,
Purchase fuel and power 368,818.66 377,466.06
Ltd.
Sichuan Changhong Property Service Co., Ltd. Purchase fuel and power 21,883.45 50,683.70
Sichuan Hongran Green Energy Co., Ltd. Purchase fuel and power 855,091.21 -
Total 21,457,765.57 23,093,349.30
4. Sales of goods/offering labor service
318
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Sichuan Changhong New Energy Technology Co., Ltd. Offering labor service 12.01 35.22
CHANGHONG ELECTRIC (AUSTRALIA) Sales of goods 6,629.12 2,557.96
CHANGHONG ELECTRIC MIDDLE EASTFZCO Sales of goods 1,285.90 1,125.27
Changhong Europe Electric s.r.o Sales of goods 166.9 14.14
Changhong Ruba Electric Company (Private) Ltd. Sales of goods 7,299.85 5,155.69
CHANGHONG (HK) TRADING LIMITED Sales of goods 36,912.93 21,867.52
Orion.PDP.Co.,ltd Sales of goods 3,473.67 2,626.30
PT.CHANGHONG ELECTRIC INDONESIA Sales of goods 1,024.84 711.24
Changhong International Holdings (Hong Kong) Co., Ltd. Sales of goods 164.88 58.92
.Chengdu Guigu Environmental Tech. Co., Ltd. Sales of goods 1,289.69 356.37
Guangdong Changhong Electronics Co., Ltd. Sales of goods 61.73 298.73
GuangYuan Changhong Electronic Technology Co., Ltd. Sales of goods 112.06 160
Hefei Changhong Industrial Co., Ltd. Sales of goods 111.05 205.04
Hongyuan Ground Energy Heat Tech. Co., Ltd. Sales of goods 9,143.17 1,930.51
Sales of goods/Offering
Changhong Huayi Compressor Co., Ltd. 37.85 62.05
labor service
Lejiayi Chain Management Co., Ltd. Sales of goods 6,254.86 2,324.80
081 Electronic Group Sales of goods 1.72 434.53
Mianyang Huafeng Interconnection Tech. Co., Ltd. Sales of goods 844.98
Sales of goods/Offering
Sichuan Aichuang Technology Co., Ltd. 109.88 247.39
labor service
Sichuan Ailian Science & Technology Co., Ltd. Sales of goods 2.09 27.8
Sichuan Hongwei Technology Co., Ltd. Sales of goods 0.76 17.24
Sichuan Huafeng Corp. Group Sales of goods 12.81 29.84
Sichuan Jiahong Industrial Co. Ltd. Sales of goods 13.87 -
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 599.76 1,443.58
Sichuan Changhong Package Printing Co., Ltd. Sales of goods 0.35 7.93
Sales of goods/Offering
Sichuan Changhong Electric Co., Ltd. 2,277.33 5,163.23
labor service
Sichuan Changhong Power Source Co., Ltd. Sales of goods 8.44 10.64
Sichuan Changhong Electronics Holding Group Co., Ltd. Sales of goods 31.91 148.96
Sichuan Changhong Gerun Environmental Protection Tech.
Sales of goods 743.53 1,585.49
Co., Ltd.
Sichuan Changhong International Hotel Co., Ltd. Sales of goods 3.62 36.19
Sichuan Changhong Group Finance Co., Ltd. Sales of goods 1.84 5.72
Sales of goods/Offering
Sichuan Changhong Jijia Fine Co., Ltd. 4,486.86 5,847.80
labor service
Sichuan Changhong Education Technology Co., Ltd. Sales of goods 1,194.40 59.29
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Sales of goods 0.09 18.06
Sales of goods/Offering
Sichuan Changhong Minsheng Logistics Co., LTD 168.46 252.69
labor service
319
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Sales of goods/Offering
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 20,784.26 19,906.13
labor service
Sales of goods/Offering
Sichuan Changhong Device Tech. Co., Ltd. 59.22 19.1
labor service
Sichuan Changhong Network Technology Co., Ltd. Sales of goods 0.1 29.41
Sichuan Changhong Property Service Co., Ltd. Sales of goods 6.6 2.71
Sichuan Changhong Wisdom Health Tech. Co., Ltd. Sales of goods 0.44 1.02
Sichuan Changhong Intelligent Manufacturing Tech. Co.,
Sales of goods 3.34 52.65
Ltd.
Sichuan Changxin Refrigeration Parts Co., Ltd. Sales of goods 10,028.00 8,483.30
Sichuan Zhiyijia Network Technology Co., Ltd. Sales of goods 295,507.43 254,723.26
BVCH Optronics (Sichuan) Co., Ltd. Sales of goods 0.68 3.35
Sales of goods/Offering
Sichuan Changhong Property Co., Ltd. 159.22 112.08
labor service
Chengdu Changhong Electronic Technology Co., Ltd. Sales of goods 0.12
Sichuan Huanyu Industrial Co. Ltd. Sales of goods 16.84
Sichuan Changhong Xinrui Tech. Co. Ltd. Sales of goods 0.14
Mianyang Technology Town Big Data Technology Co.,
Sales of goods 0.26
Ltd.
Sichuan Changhong Venture Investment Co., Ltd. Sales of goods 0.2
Guangyuan Hongcheng Industrial Co., Ltd. Sales of goods 14.68
Sichuan Changhong Energy Sunshine Technology Co., Ltd. Sales of goods 2.45
Sichuan Changhong Electronics Tech. Co., Ltd. Sales of goods 1.54
Sichuan Hongxin Software Co., Ltd. Sales of goods 3.8
Sichuan Hongcheng Real Estate Co., Ltd. Sales of goods 9.46
Sichuan Changhong Electronic System Co., Ltd. Sales of goods 2.6
Sichuan Changhong Electronic Products Co., Ltd. Sales of goods 8.22 27.04
Yibin Red-Star Electronics Co., Ltd. Sales of goods 91.74
Yuanxin Financial Lease Co., Ltd. Sales of goods 0.08
Hunan Grand-Pro Intelligent Tech. Company Sales of goods 0.29 0.72
Mianyang Highly Electric Co., Ltd. Sales of goods 246.13
Sichuan Family Help Electric Service Co., Ltd. Sales of goods 0.21
Total 411,041.01 338,577.16
Businesses between the Company and its connected persons are generally conducted under market operation
rules as if they were the same as other business counter parties. For price of sale or purchase and provision of
other labor service between the Company and its related parties, the state pricing is applicable if the pricing
do exists; in case of absence of such state pricing, price is determined under market price; in case of absence
of such market price, price is determined by both parties at actual cost plus reasonable expenses; for some
special services, the price of which cannot be determined under the rule of cost plus expense, the price shall
320
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
be determined by both parties by negotiation.
5. Provide fuels
Related party Content Current Year Last Year
Guangdong Changhong Electronics Co., Ltd. Provide fuels 651,741.40 307,238.26
Sichuan Hongwei Technology Co., Ltd. Provide fuels 3,664.27 7,793.08
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Provide fuels 15,433.17 9,223.08
Sichuan Changhong Minsheng Logistics Co., LTD Provide fuels 73,268.48 29,159.87
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Provide fuels 7,573,536.90 7,853,859.29
Sichuan Changhong Jijia Fine Co., Ltd. Provide fuels 138,288.90 143,889.85
Sichuan Changhong Device Tech. Co., Ltd. Provide fuels 1,176,255.91 1,015,274.30
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Provide fuels 9,503.85 3,230.61
Shenzhen YijEn Technology Co., Ltd. Provide fuels 5,846.68
Changhong International Holdings (Hong Kong) Co.,
Provide fuels 4,430.19
Ltd.
Sichuan Changhong Electric Co., Ltd. Provide fuels 13,454.51
Total 9,655,147.39 9,379,945.21
6. Related rental
(1) Rent out
Leasing income
Leasing income
Lessor Lessee Type of assets in Current
in last year
Year
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Forklift 21,204.11 7,696.70
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Warehouse 133,280.16 79,184.30
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Apartment 210,139.44 99,247.94
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Workshop 403,632.66 523,746.18
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Appliance 300.00 556.61
Meiling
Changhong Sichuan Changhong Mold Plastic Tech.
Warehouse 448,301.88 330,729.23
Meiling Co., Ltd.
Changhong Sichuan Changhong Mold Plastic Tech.
Workshop 1,427,060.66 1,410,924.28
Meiling Co., Ltd.
Changhong Sichuan Changhong Mold Plastic Tech.
Apartment 628,310.13 282,190.49
Meiling Co., Ltd.
Changhong Sichuan Changhong Minsheng Logistics
Office 23,944.27 18,969.98
Meiling Co., LTD
Changhong Sichuan Changhong Minsheng Logistics
Apartment 157,161.90 176,666.67
Meiling Co., LTD
Changhong Sichuan Service Exp. Appliance Service
Apartment 135,130.67 176,352.63
Meiling Chain Co., Ltd.
Changhong Sichuan Service Exp. Appliance Service
Office 130,377.53 42,378.38
Meiling Chain Co., Ltd.
321
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Leasing income
Leasing income
Lessor Lessee Type of assets in Current
in last year
Year
Changhong Sichuan Service Exp. Appliance Service
Workshop 43,241.00 174,545.46
Meiling Chain Co., Ltd.
Changhong Sichuan Service Exp. Appliance Service
Forklift 9,600.00 3,200.00
Meiling Chain Co., Ltd.
Changhong
Sichuan Changhe Technology Co., Ltd. Warehouse 3,591.96
Meiling
Changhong
Hefei Changhong Industrial Co., Ltd. Apartment 257,283.58 313,664.77
Meiling
Changhong
Sichuan Changhong Electric Co., Ltd. Apartment 60,943.50
Meiling
Changhong Sichuan Changhong Precision Electronics
Forklift 2,344.80
Meiling Tech. Co., Ltd.
Changhong Sichuan Changhong Precision Electronics
Warehouse 20,125.56
Meiling Tech. Co., Ltd.
Changhong Sichuan Changhong Precision Electronics
Apartment 49,032.95 69,339.25
Meiling Tech. Co., Ltd.
Changhong Sichuan Ailian Science & Technology
Warehouse 2,686.20 2,208.00
Meiling Co., Ltd.
Changhong
Sichuan Aichuang Technology Co., Ltd. Warehouse 37,519.68 7,232.60
Meiling
Changhong
Sichuan Aichuang Technology Co., Ltd. Forklift 4,361.18 790.57
Meiling
Changhong
Sichuan Changxin Refrigeration Parts
Air-conditio Houses and buildings 300,000.00
Co., Ltd.
ner
Changhong
.Chengdu Guigu Environmental Tech.
Air-conditio Houses and buildings 28,403.67
Co., Ltd.
ner
Changhong
Sichuan Changhong Mold Plastic Tech.
Air-conditio Houses and buildings 3,950,036.56
Co., Ltd.
ner
Changhong
Air-conditio Sichuan Changhong Electric Co., Ltd. Equipment 2,111,100.00
ner
Changhong
Air-conditio Sichuan Huafeng Corp. Group Conference Room 3,669.72
ner
Changhong
Air-conditio BVCH Optronics (Sichuan) Co., Ltd. Freight elevator 52,480.00
ner
Changhong
Sichuan Changhong Mold Plastic Tech.
Air-conditio Machinery equipment 24,702.55
Co., Ltd.
ner
Changhong
Air-conditio Sichuan Changhong Jijia Fine Co., Ltd. Driving 7,000.00
ner
Changhong
Sichuan Changxin Refrigeration Parts Processing equipment
Air-conditio 300,000.00
Co., Ltd. of U
ner
Zhongke Sichuan Changhong Minsheng Logistics
Workshop 2,829,034.65 2,575,560.01
Meiling Co., LTD
Zhongshan Guangdong Changhong Electronics Co.,
Office building 197,458.25 996,579.63
Changhong Ltd.
Zhongshan Sichuan Changhong Minsheng Logistics Parts of the office 35,338.99 55,958.48
322
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Leasing income
Leasing income
Lessor Lessee Type of assets in Current
in last year
Year
Changhong Co., LTD building rent-out
Zhongshan Sichuan Changhong Mold Plastic Tech.
2# living area 81,240.00 137,152.72
Changhong Co., Ltd.
Zhongshan
Sichuan Hongwei Technology Co., Ltd. 2# living area 15,092.52
Changhong
Zhongshan Sichuan Changhong Device Tech. Co.,
2# living area 58,444.98 1,012.07
Changhong Ltd.
Zhongshan Sichuan Changhong Precision Electronics
2# living area 71,451.61 24,780.88
Changhong Tech. Co., Ltd.
Zhongshan Changhong International Holdings (Hong
2# living area 13,902.33
Changhong Kong) Co., Ltd.
Jiangxi Sichuan Changhong Mold Plastic Tech.
Workshop 780,677.72 680,062.00
Meiling Co., Ltd.
Jiangxi Sichuan Changhong Minsheng Logistics
Workshop office 26,285.71
Meiling Co., LTD
Jiangxi Warehouse location
Changhong Huayi Compressor Co., Ltd. 10,666.66
Meiling lease
Mianyang Sichuan Changhong Mold Plastic Tech.
Warehouse 60,091.95
Refrigerator Co., Ltd.
Mianyang Sichuan Changhong Package Printing
Warehouse 540.56
Refrigerator Co., Ltd.
Mianyang
Sichuan Changhe Technology Co., Ltd. Warehouse 162.16
Refrigerator
Changhong Sichuan Changhong Device Tech. Co.,
Workshop 1,417,391.01 1,061,129.66
Ridian Ltd.
Changhong
Sichuan Hongwei Technology Co., Ltd. Workshop 45,257.14 35,218.29
Ridian
Changhong Changhong International Holdings (Hong
Office 95,238.86 149,724.36
Ridian Kong) Co., Ltd.
Changhong Changhong International Holdings (Hong
Automobile 31,034.48
Ridian Kong) Co., Ltd.
Total 16,256,241.51 9,936,836.53
(2) Lessee of related parties
Leasing
Leasing expense
Lessor Lessee Type of assets expense in last
in Current Year
year
Sichuan Changhong Property Service Changhong Workshop,
2,055,453.33
Co., Ltd. Air-conditioner office
Changhong Workshop,
Sichuan Changhong Electric Co., Ltd. 9,194,056.12
Air-conditioner office
Hongmei Workshop,
Sichuan Changhong Electric Co., Ltd. 93,085.18 152,546.40
Intelligent office
Chengdu Changhong Electronic Hongmei
Office 454,450.37 325,957.61
Technology Co., Ltd. Intelligent
Guangdong Changhong Electronics Co., Ground Energy
Staff dormitory 147,850.00 315,135.70
Ltd. Heat Pump
Guangdong Changhong Electronics Co., Ground Energy Workshop
303,721.21
Ltd. Heat Pump leasing
Mianyang Workshop
Sichuan Changhong Electric Co., Ltd. 3,241,100.58 2,953,516.48
Refrigerator leasing
323
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Leasing
Leasing expense
Lessor Lessee Type of assets expense in last
in Current Year
year
Sichuan Changhong Electronics Holding Mianyang
Staff dormitory 42,752.89 55,877.94
Group Co., Ltd. Refrigerator
Sichuan Changhong Property Service Mianyang
Flower lease 8,528.25 8,624.14
Co., Ltd. Refrigerator
Guangdong Changhong Electronics Co., Changhong
Staff dormitory 114,323.85 434,916.54
Ltd. Ridian
Changhong
Sichuan Changhong Electric Co., Ltd. Staff dormitory 138,965.00
Ridian
Beijing Changhong Tech. Co. Ltd, Meiling Group Office 78,932.59 364,688.55
Sichuan Changhong Electric Co., Ltd. Meiling Group Office 291,940.55 933,023.62
Sichuan Changhong Property Service Changmei
Space rental 24,435.56
Co., Ltd. Technology
Chengdu Changhong Electronic Changmei
Office 153,687.60
Technology Co., Ltd. Technology
Changmei
Sichuan Hongwei Technology Co., Ltd. Server leasing 136,667.56
Technology
Sichuan Changhong Electronics Holding Changmei
Office 98,316.65
Group Co., Ltd. Technology
Changhong Huayi Compressor Co., Ltd. Jiangxi Meiling Staff dormitory 33,809.52
Total 4,472,964.26 17,683,399.53
7. Related guarantee
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start Date due
(Y/N)
thousand Yuan)
Changhong
Jiangxi Meiling 5,000.00 2019.03.12 2020.03.11 N
Meiling
Changhong
Jiangxi Meiling 10,000.00 2019.03.14 2020.03.14 N
Meiling
Changhong
Nonferrous Metals 500.00 2019.06.19 2019.12.19 Y
Meiling
Changhong Sichuan
20,000.00 2019.07.30 2020.03.25 N
Meiling Air-conditioning
Changhong
ChanghongRuba 1,888.08 2019.01.23 2019.12.06 Y
Meiling
Changhong
ChanghongRuba 2,062.41 2019.01.28 2020.02.15 N
Meiling
Changhong
ChanghongRuba 2,103.51 2019.12.23 2021.01.05 N
Meiling
Changhong
Changhong Ridian 4,500.00 2018.08.21 2019.08.21 Y
Meiling
Changhong
Changhong Ridian 4,000.00 2018.08.31 2019.03.30 Y
Meiling
Changhong
Changhong Ridian 4,000.00 2019.03.31 2020.03.30 N
Meiling
Changhong
Changhong Ridian 6,500.00 2019.08.22 2020.08.22 N
Meiling
Changhong
Changhong Ridian 2,500.00 2019.01.28 2020.07.27 N
Meiling
Changhong Zhongke Meiling 1,000.00 2018.06.29 2019.06.29 Y
324
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start Date due
(Y/N)
thousand Yuan)
Meiling
Changhong
Zhongke Meiling 2,000.00 2018.07.20 2019.05.25 Y
Meiling
Changhong
Zhongke Meiling 3,000.00 2019.07.18 2020.07.17 N
Meiling
Changhong
Zhongke Meiling 3,000.00 2019.08.20 2020.08.19 N
Meiling
Changhong
Zhongke Meiling 2,000.00 2019.08.23 2020.08.23 N
Meiling
Changhong
Zhongke Meiling 920.00 2019.09.24 2020.09.24 N
Meiling
Changhong
Zhongke Meiling 2,000.00 2019.12.30 2020.11.22 N
Meiling
Changhong Zhongshan
6,000.00 2018.03.07 2019.03.07 Y
Meiling Changhong
Changhong Zhongshan
10,000.00 2018.03.30 2019.03.30 Y
Meiling Changhong
Changhong Zhongshan
5,000.00 2018.04.12 2019.04.11 Y
Meiling Changhong
Changhong Zhongshan
5,500.00 2018.04.18 2019.04.19 Y
Meiling Changhong
Changhong Zhongshan
10,000.00 2018.08.09 2019.08.09 N
Meiling Changhong
Changhong Zhongshan
5,000.00 2018.08.21 2019.08.20 Y
Meiling Changhong
Changhong Zhongshan
10,000.00 2018.08.22 2019.08.21 Y
Meiling Changhong
Changhong Zhongshan
5,000.00 2018.10.23 2019.10.23 N
Meiling Changhong
Changhong Zhongshan
10,000.00 2019.01.25 2020.01.24 N
Meiling Changhong
Changhong Zhongshan
5,500.00 2019.03.15 2020.03.15 N
Meiling Changhong
Changhong Zhongshan
10,000.00 2019.03.31 2020.03.30 N
Meiling Changhong
Changhong Zhongshan
5,000.00 2019.04.01 2019.08.09 Y
Meiling Changhong
Changhong Zhongshan
5,000.00 2019.06.20 2020.06.20 N
Meiling Changhong
Changhong Zhongshan
15,000.00 2019.06.28 2020.06.27 N
Meiling Changhong
Changhong Zhongshan
2,000.00 2019.08.21 2020.08.20 N
Meiling Changhong
Changhong Zhongshan
10,000.00 2019.08.31 2020.08.31 N
Meiling Changhong
Counter
guarantee:
Changhong
Jiangxi Meiling 5,000.00 2019.03.12 2020.03.11 N
Meiling
Changhong
Jiangxi Meiling 10,000.00 2019.03.14 2020.03.14 N
Meiling
Nonferrous Metals Changhong 500.00 2019.06.19 2019.12.19 Y
325
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start Date due
(Y/N)
thousand Yuan)
Meiling
Sichuan Changhong
20,000.00 2019.07.30 2020.03.25 N
Air-conditioning Meiling
Changhong
ChanghongRuba 2,062.41 2019.01.23 2019.12.06 Y
Meiling
Changhong
ChanghongRuba 1,888.08 2019.01.28 2020.02.15 N
Meiling
Changhong
ChanghongRuba 2,103.51 2019.12.23 2021.01.05 N
Meiling
Changhong
Changhong Ridian 4,500.00 2018.08.21 2019.08.21 Y
Meiling
Changhong
Changhong Ridian 4,000.00 2018.08.31 2019.03.30 Y
Meiling
Changhong
Changhong Ridian 4,000.00 2019.03.31 2020.03.30 N
Meiling
Changhong
Changhong Ridian 6,500.00 2019.08.22 2020.08.22 N
Meiling
Changhong
Changhong Ridian 2,500.00 2019.01.28 2020.07.27 N
Meiling
Changhong
Zhongke Meiling 1,000.00 2018.06.29 2019.06.29 Y
Meiling
Changhong
Zhongke Meiling 2,000.00 2018.07.20 2019.05.25 Y
Meiling
Changhong
Zhongke Meiling 3,000.00 2019.07.18 2020.07.17 N
Meiling
Changhong
Zhongke Meiling 3,000.00 2019.08.20 2020.08.19 N
Meiling
Changhong
Zhongke Meiling 2,000.00 2019.08.23 2020.08.23 N
Meiling
Changhong
Zhongke Meiling 920.00 2019.09.24 2020.09.24 N
Meiling
Changhong
Zhongke Meiling 2,000.00 2019.12.30 2020.11.22 N
Meiling
Zhongshan Changhong
6,000.00 2018.03.07 2019.03.07 Y
Changhong Meiling
Zhongshan Changhong
10,000.00 2018.03.30 2019.03.30 Y
Changhong Meiling
Zhongshan Changhong
5,000.00 2018.04.12 2019.04.11 Y
Changhong Meiling
Zhongshan Changhong
5,500.00 2018.04.18 2019.04.19 Y
Changhong Meiling
Zhongshan Changhong
10,000.00 2018.08.09 2019.08.09 N
Changhong Meiling
Zhongshan Changhong
5,000.00 2018.08.21 2019.08.20 Y
Changhong Meiling
Zhongshan Changhong
10,000.00 2018.08.22 2019.08.21 Y
Changhong Meiling
Zhongshan Changhong
5,000.00 2018.10.23 2019.10.23 N
Changhong Meiling
Zhongshan Changhong
10,000.00 2019.01.25 2020.01.24 N
Changhong Meiling
Zhongshan Changhong 5,500.00 2019.03.15 2020.03.15 N
326
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start Date due
(Y/N)
thousand Yuan)
Changhong Meiling
Zhongshan Changhong
10,000.00 2019.03.31 2020.03.30 N
Changhong Meiling
Zhongshan Changhong
5,000.00 2019.04.01 2019.08.09 Y
Changhong Meiling
Zhongshan Changhong
5,000.00 2019.06.20 2020.06.20 N
Changhong Meiling
Zhongshan Changhong
15,000.00 2019.06.28 2020.06.27 N
Changhong Meiling
Zhongshan Changhong
2,000.00 2019.08.21 2020.08.20 N
Changhong Meiling
Zhongshan Changhong
10,000.00 2019.08.31 2020.08.31 N
Changhong Meiling
8. Assets transfer, debt restructuring of related parties
Related party Type Current Year Last Year
Purchase/Purchase and
Sichuan Changhong Intelligent Manufacturing Tech.
construction of fixed 36,796,919.82 32,909,220.60
Co., Ltd.
assets
Purchase and
Sichuan Hongcheng Real Estate Co., Ltd. construction of fixed 56,603.77 393,162.39
assets
Purchase and
Sichuan Hongcheng Construction Engineering Co.,
construction of fixed 450,450.45
Ltd.
assets
Purchase and
Sichuan Changhong Electric Co., Ltd. construction of fixed 48,956,440.92 7,743,629.01
assets
Purchasing intangible
Sichuan Changhong Electric Co., Ltd. 112,876,479.31
assets
Purchase/Purchase and
Sichuan Hongxin Software Co., Ltd. construction of fixed 2,826,830.79 4,958,562.11
assets
Purchasing intangible
Sichuan Hongxin Software Co., Ltd. 452,830.18 245,283.02
assets
Purchase/Purchase and
Sichuan Changhong Network Technology Co., Ltd. construction of fixed 1,098,430.46 310,745.57
assets
Purchase and
Sichuan Changhong Electronic System Co., Ltd. construction of fixed 126,106.19
assets
Sichuan Zhiyijia Network Technology Co., Ltd. Purchase of fixed assets 104,693.81 2,990.60
Purchase and
Sichuan Changhong Electronics Holding Group Co.,
construction of fixed 3,876,784.91
Ltd.
assets
Purchase/Purchase and
Sichuan Huanyu Industrial Co. Ltd. construction of fixed 19,897,298.71 5,648,270.69
assets
Purchase and
Sichuan Jiahong Industrial Co. Ltd. construction of fixed 1,347,541.41
assets
Guangdong Changhong Electronics Co., Ltd. Purchase of fixed assets 12,743.36
327
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Related party Type Current Year Last Year
Sichuan Aichuang Technology Co., Ltd. Purchase of fixed assets 1,943,572.07
Mianyang Technology Town Big Data Technology
Purchase of fixed assets 260,084.81
Co., Ltd.
Sichuan Changhong Energy Sunshine Technology
Purchase of fixed assets -23,340.00 912,954.96
Co., Ltd.
Hongyuan Ground Energy Heat Tech. Co., Ltd. Purchase of fixed assets 1,330,818.96
Purchase and
Mianyang Technology Town Big Data Technology
construction of fixed 1,112,815.42
Co., Ltd.
assets
Sichuan Hongwei Technology Co., Ltd. Purchase of fixed assets 924.40
Sichuan Changhong Gerun Environmental Protection
Sales of fixed assets 4,570.77 28,999.51
Tech. Co., Ltd.
Sichuan Changhong Electronics Holding Group Co.,
Sales of fixed assets 17,383.08
Ltd.
Sichuan Jiahong Industrial Co. Ltd. Sales of fixed assets 4,813.70
Changhong Shundatong Tech. Development Co., Ltd. Sales of fixed assets 128,199.13
Sichuan Changhong Electric Co., Ltd. Sales of fixed assets 1,028,804.28
Sichuan Changhong Jijia Fine Co., Ltd. Sales of fixed assets 9,980.82
Total 226,837,070.33 61,015,529.66
9. Other
Current Year Last Year
Related party Content
(in 10 thousand Yuan) (in 10 thousand Yuan)
Yuanxin Financial Lease Financing business, financing
391.67 168.68
Co., Ltd. expenses and financial leasing
10. Related transaction with Changhong Finance Company
(1) Saving balance
Interest income from
Balance at Balance at
Name of company bank saving in the
period-end period-begin
period
Changhong Meiling Co., Ltd. 3,081,631,716.95 2,138,883,580.37 76,062,384.86
Hebei Hongmao Household Appliance
1,799,703.59 2,367.66
Technology Co., Ltd36)
Sichuan Changhong Air-conditioner Co., Ltd. 424,969,027.90 824,399,079.98 24,921,972.25
Zhongshan Changhong Electric Co., Ltd. 13,782,922.16 5,578,868.71 12,384.65
Hefei Meiling Group Holdings Limited 798.43 795.30 3.13
Mianyang Meiling Refrigeration Co., Ltd. 925.37 522.79 690.40
Zhongke Meiling Cryogenic Technology Co.,
90,904,816.77 76,807,508.29 2,405,843.48
Ltd.
Jiangxi Meiling Electric Appliance Co., Ltd. 9,504.34 946.27 8,783.08
Guangdong Changhong Ridian Technology
76,106,470.22 41,461,210.41 1,556,059.26
Co., Ltd.
Hongyuan Ground Energy Heat Pump Tech.
100,690.19 8,201.52 531.04
Co., Ltd.
328
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Hongyuan Ground Energy Heat Pump Tech.
13,076,054.46 31,976,494.27 606,080.00
(Zhongshan) Co., Ltd.
Total 3,702,382,630.38 3,119,117,207.91 105,577,099.81
(2) Notes discounted
Trade acceptance
Trade acceptance Expenses of
Name of company book discounted
discounted amount discounted
amount
Changhong Meiling Co., Ltd. 653,197,757.84 634,004,398.69 19,193,359.15
Sichuan Changhong Air-conditioner Co., Ltd. 879,946,291.50 869,133,491.57 10,812,799.93
Guangdong Changhong Ridian Technology
7,743,945.42 7,688,876.05 55,069.37
Co., Ltd.
Hongyuan Ground Energy Heat Pump Tech.
52,248,533.99 51,541,579.28 706,954.71
(Zhongshan) Co., Ltd.
Total 1,593,136,528.75 1,562,368,345.59 30,768,183.16
(3) Notes issued
Name of company Issuing unit Note amount Type
Sichuan Changhong Group
Changhong Meiling Co., Ltd. 894,018,595.87 Bank acceptance
Finance Co., Ltd.
Hebei Hongmao Household Appliance Sichuan Changhong Group
20,218,149.42 Bank acceptance
Technology Co., Ltd36) Finance Co., Ltd.
Sichuan Changhong Air-conditioner Sichuan Changhong Group
1,092,953,183.10 Bank acceptance
Co., Ltd. Finance Co., Ltd.
Zhongke Meiling Cryogenic Sichuan Changhong Group
20,270,061.42 Bank acceptance
Technology Co., Ltd. Finance Co., Ltd.
Guangdong Changhong Ridian Sichuan Changhong Group
85,711,149.56 Bank acceptance
Technology Co., Ltd. Finance Co., Ltd.
Zhongshan Changhong Electric Co., Sichuan Changhong Group
45,573,699.48 Bank acceptance
Ltd. Finance Co., Ltd.
Total 2,158,744,838.85
(4) Borrowing: nil
(5) Accounts receivable factoring: nil
11. Remuneration for key management
Current Year (in10 Last Year (in10 thousand
Item
thousand Yuan) Yuan)
Total remuneration 333.24 358.72
Including: performance incentive fund
(iii) Come and go balance with related parties
1. Receivable account
Item Related party Balance at year-end Balance at year-begin
329
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Bad Bad
debt debt
Book balance Book balance
provis prov
ion ision
Account
CHANGHONG ELECTRIC (AUSTRALIA) 37,804,702.10 16,782,905.91
receivable
Account
CHANGHONG ELECTRIC MIDDLE EASTFZCO 1,552,183.58 3,391,982.77
receivable
Account
Changhong Europe Electric s.r.o 1,664,405.17 131,552.00
receivable
Account
Changhong Ruba Electric Company (Private) Ltd. 86,214,001.68 75,910,256.75
receivable
Account
Orion.PDP.Co.,ltd 8,267,321.25 22,430,223.12
receivable
Account
PT.CHANGHONG ELECTRIC INDONESIA 3,844,393.51 3,795,261.09
receivable
Account
Guangdong Changhong Electronics Co., Ltd. 224,817.29 290,418.22
receivable
Account
Hefei Changhong Industrial Co., Ltd. 50,000.00
receivable
Account
Hongyuan Ground Energy Heat Tech. Co., Ltd. 10,720,675.24 25,559,118.66
receivable
Account
Lejiayi Chain Management Co., Ltd. 12,461,940.42 2,810,087.88
receivable
Account
Sichuan Aichuang Technology Co., Ltd. 43,297.65 964,432.39
receivable
Account Sichuan Service Exp. Appliance Service Chain Co.,
211,621.68 225,967.73
receivable Ltd.
Account
Sichuan Changhong Minsheng Logistics Co., LTD 41,163.13 275,734.13
receivable
Account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 162,163.72 997,299.16
receivable
Account
Sichuan Changhong Device Tech. Co., Ltd. 327.80
receivable
Account
Sichuan Changhong Property Co., Ltd. 159,690.33 112,151.48
receivable
Account
Sichuan Zhiyijia Network Technology Co., Ltd. 375,948,123.63 505,717,212.18
receivable
Account
CHANGHONG (HK) TRADING LIMITED 75,242,050.75 29,884,304.94
receivable
Account
Sichuan Changhong Electric Co., Ltd. 2,943,118.96
receivable
Account
Changhong Huayi Compressor Co., Ltd. 363,524.00
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 8,318.75
receivable
Account Sichuan Changhong Precision Electronics Tech.
36,056.54
receivable Co., Ltd.
Account
Sichuan Changhong International Hotel Co., Ltd. 2,850.00
receivable
Account Chengdu Changhong Electronic Technology Co.,
1,656.00
receivable Ltd.
Account
Sichuan Hongwei Technology Co., Ltd. 1,200.00
receivable
Account
Shenzhen YijEn Technology Co., Ltd. 14,274.78
receivable
330
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end Balance at year-begin
Bad Bad
Item Related party debt debt
Book balance Book balance
provis prov
ion ision
Account Sichuan Changhong New Energy Technology Co.,
248,132.64
receivable Ltd.
Account Changhong International Holdings (Hong Kong)
21,772.79
receivable Co., Ltd.
Account Sichuan Changhong Intelligent Manufacturing
547,276.70
receivable Tech. Co., Ltd.
Account paid
Sichuan Hongran Green Energy Co., Ltd. 30,988.36
in advance
Account paid
Sichuan Changhong Minsheng Logistics Co., LTD 15,295.00
in advance
Account paid
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 16.80
in advance
Account paid
Sichuan Zhiyijia Network Technology Co., Ltd. 1,622.40 3,071.23
in advance
Account paid Sichuan Changhong Electronics Holding Group
49,632.00
in advance Co., Ltd.
Account paid
Sichuan Changhong Electric Co., Ltd. 11,324,475.95
in advance
Account paid
Sichuan Hongwei Technology Co., Ltd. 113,168.00
in advance
Account paid
Guangdong Changhong Electronics Co., Ltd. 0.2
in advance
Account paid Sichuan Changhong Intelligent Manufacturing
15,423,229.03
in advance Tech. Co., Ltd.
Account paid
081 Electronic Group 6.94
in advance
Account paid Sichuan Changhong Precision Electronics Tech.
7,797.42
in advance Co., Ltd.
Account paid
.Chengdu Guigu Environmental Tech. Co., Ltd. 58,281.92
in advance
Other
account Hefei Changhong Industrial Co., Ltd. 122,396.08
receivable
Other
account 081 Electronic Group 204,567.35 252,027.35
receivable
Other
Sichuan Service Exp. Appliance Service Chain Co.,
account 500,000.00 600,000.00
Ltd.
receivable
Other
account Sichuan Changhong International Hotel Co., Ltd. 27,589.45 27,589.45
receivable
Other
account Sichuan Changhong Property Co., Ltd. 309,410.65 150,000.00
receivable
Other
account Sichuan Changhong Property Service Co., Ltd. 2,952.00
receivable
Other
Chengdu Changhong Electronic Technology Co.,
account 434,509.01
Ltd.
receivable
331
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end Balance at year-begin
Bad Bad
Item Related party debt debt
Book balance Book balance
provis prov
ion ision
Other
account Sichuan Huanyu Industrial Co. Ltd. 3,150.35
receivable
Total 615,824,765.02 721,916,980.42
2. Payable account
Balance at Balance at
Item Related party
year-end year-begin
Account
received in Sichuan Changhong Electric Co., Ltd. 997,132.81 234.16
advance
Account
Sichuan Changhong Gerun Environmental Protection Tech.
received in 659,496.67 578,537.58
Co., Ltd.
advance
Account
received in Changhong Huayi Compressor Co., Ltd. 66,037.73
advance
Account
received in Sichuan Service Exp. Appliance Service Chain Co., Ltd. 15,364.13 81,015.05
advance
Account
received in Hefei Changhong Industrial Co., Ltd. 6,681.11 23,593.21
advance
Account
received in Sichuan Changhong Electronics Holding Group Co., Ltd. 5,080.00 5,080.00
advance
Account
received in Lejiayi Chain Management Co., Ltd. 2,227.97 20,258.00
advance
Account
received in CHANGHONG (HK) TRADING LIMITED 1,011.34 994.96
advance
Account
received in CHANGHONG ELECTRIC MIDDLE EASTFZCO 627.86
advance
Account
received in 081 Electronic Group 25.55 25.55
advance
Account
received in Sichuan Changhong Precision Electronics Tech. Co., Ltd. 0.01
advance
Account
received in GuangYuan Changhong Electronic Technology Co., Ltd. 310,437.76
advance
Account
received in Sichuan Zhiyijia Network Technology Co., Ltd. 3,816,946.86 1,122.20
advance
Account
received in Hongyuan Ground Energy Heat Tech. Co., Ltd. 426,247.52
advance
Account Sichuan Tianyou Guigu Technology Co., Ltd. 0.06
received in
332
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at Balance at
Item Related party
year-end year-begin
advance
Account
Changhong Ruba Electric Company (Private) Ltd. 20,520,728.81 29,257,116.05
payable
Account
Guangdong Changhong Electronics Co., Ltd. 113,504.45
payable
Account
GuangYuan Changhong Electronic Technology Co., Ltd. 434,414.70
payable
Account
Hefei Changhong Industrial Co., Ltd. 1,729.50
payable
Account
Lejiayi Chain Management Co., Ltd. 16,856.00
payable
Account
081 Electronic Group 86,951.38 25,025.52
payable
Account
Mianyang Highly Electric Co., Ltd. 9,379,903.10 12,868,088.45
payable
Account Mianyang Technology Town Big Data Technology Co.,
7,540.79 1,430.47
payable Ltd.
Account
Sichuan Aichuang Technology Co., Ltd. 24,466,981.06 9,023,993.17
payable
Account
Sichuan Ailian Science & Technology Co., Ltd. 5,500,914.00 1,701,913.57
payable
Account
Sichuan Hongxin Software Co., Ltd. 340,000.00 21,226.42
payable
Account
Sichuan Hongyu Metal Manufacturing Co., Ltd. 14,662.40 14,662.40
payable
Account
Sichuan Jiahong Industrial Co. Ltd. 14,764.05 21,109.00
payable
Account
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 127,050.71 177,728.16
payable
Account
Sichuan Changhong Package Printing Co., Ltd. 3,080,005.38 9,305,115.20
payable
Account
Sichuan Changhong Electric Co., Ltd. 153,791,187.83 14,019,713.93
payable
Account
Sichuan Changhong Power Source Co., Ltd. 1,870.82 4,910.82
payable
Account
Sichuan Changhong Electronic System Co., Ltd. 5,432.53
payable
Account
Sichuan Changhong International Travel Service Co., Ltd. 167,858.10
payable
Account
Sichuan Changhong Energy Sunshine Technology Co., Ltd. 20,076.99 52,951.39
payable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 12,883,071.50 17,324,860.79
payable
Account
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 1,443,759.01 834,733.87
payable
Account
Sichuan Changhong Minsheng Logistics Co., LTD 210,699.13 46,671,482.99
payable
Account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 75,808,653.32 27,891,091.24
payable
Account
Sichuan Changhong Device Tech. Co., Ltd. 23,275.25
payable
Account
Sichuan Changhong Network Technology Co., Ltd. 7,229.72 13,456.92
payable
333
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at Balance at
Item Related party
year-end year-begin
Account
Sichuan Changhong New Energy Technology Co., Ltd. 2,950.00
payable
Account Sichuan Changhong Intelligent Manufacturing Tech. Co.,
15,962,820.73 11,377,605.65
payable Ltd.
Account
Sichuan Changxin Refrigeration Parts Co., Ltd. 692,843.70 883,369.88
payable
Account
Changhong Huayi Compressor Co., Ltd. 59,533,997.08 105,062,188.37
payable
Account
Hunan Grand-Pro Intelligent Tech. Company 9,095,322.04 287,486.83
payable
Account
CHANGHONG (HK) TRADING LIMITED 3,052,516.27 1,998,987.22
payable
Account
Sichuan Changhong International Hotel Co., Ltd. 121,538.10
payable
Account
Sichuan Changhong Electronics Holding Group Co., Ltd. 796,408.02
payable
Account
Sichuan Changhong Electronic Products Co., Ltd. 2,097,100.40 2,054,864.41
payable
Account
Sichuan Zhiyijia Network Technology Co., Ltd. 6,274.34
payable
Account
Sichuan Huanyu Industrial Co. Ltd. 3,000,000.00
payable
Account
Changhong International Holdings (Hong Kong) Co., Ltd. 394,743.12
payable
Other account Mianyang Technology Town Big Data Technology Co.,
113,450.00 100,000.00
payable Ltd.
Other account
Sichuan Hongxin Software Co., Ltd. 61,978.23
payable
Other account
Sichuan Jiahong Industrial Co. Ltd. 20,002.24 22,218.04
payable
Other account
Sichuan Changhong Package Printing Co., Ltd. 50,000.00 50,000.00
payable
Other account
Sichuan Changhong Electric Co., Ltd. 5,861,224.39 1,514,578.28
payable
Other account Sichuan Changhong Gerun Environmental Protection Tech.
10,000.00 10,000.00
payable Co., Ltd.
Other account
Sichuan Changhong Energy Sunshine Technology Co., Ltd. 553,165.00
payable
Other account
Sichuan Changhong Jijia Fine Co., Ltd. 400,500.00 400,500.00
payable
Other account
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 192,717.54 200,000.00
payable
Other account
Sichuan Changhong Minsheng Logistics Co., LTD 520,500.00 500,500.00
payable
Other account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 1,700,295.88 1,648,151.88
payable
Other account Sichuan Changhong Intelligent Manufacturing Tech. Co.,
1,282,495.95 343,586.81
payable Ltd.
Other account
Sichuan Changxin Refrigeration Parts Co., Ltd. 46,702.03 50,000.00
payable
Other account
Sichuan Zhiyijia Network Technology Co., Ltd. 41,940.00
payable
Other account Yuanxin Financial Lease Co., Ltd. 1,315,045.86 1,686,849.14
334
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at Balance at
Item Related party
year-end year-begin
payable
Other account
Changhong Huayi Compressor Co., Ltd. 1,598,900.00 1,050,000.00
payable
Other account
Hunan Grand-Pro Intelligent Tech. Company 250,000.00 200,000.00
payable
Other account
CHANGHONG (HK) TRADING LIMITED 82,671.18 76,036.96
payable
Other account
Sichuan Changhong Electronics Holding Group Co., Ltd. 1,090.65
payable
Other account
Sichuan Yunyou Internet Tech. Co., Ltd. 139,862.42
payable
Total 418,950,358.95 304,283,528.67
(iv) Commitments from related parties: Nil
XII. Share-based payment: Nil
XIII. Contingency
1. Pending action or possible liabilities formed from arbitration: Nil
2. Contingency from external guarantee: Nil
3. Other contingency: Nil
XIV. Commitments: Nil
XV. Events occurring after the balance sheet date
1. Important non-adjustment items: Nil
2. Profit distribution:
For year of 2019, the individual statement of the parent company show net profit of 111,361,168.18 Yuan,
according to the auditing from ShinWing CPA (LLP). In accordance with relevant regulations, the retained
profit at beginning of Current Year amounted as 908,358,682.91 Yuan, deducted the 2018 profit distributed
62,675,872.86 Yuan and after extract for statutory surplus reserve 11,136,116.82 Yuan, the retained profit in
individual statement of the parent company cumulative counted as 945,907,861.41 Yuan at end of 2019. In
addition, for year of 2019, the net profit attributable to owners of parent company amounted as
56,441,479.14 Yuan, the retained profit for end of the 2019 counted as 884,127,743.42 Yuan.
Pursuit to relevant rules and regulation of Article of Association, and considering the interest of shareholders
and long-term development needs of the Company, Board of Directors agrees that, based on total share
capital 1,044,597,881 of the Company dated 31 December 2019, distributed 0.5 Yuan (tax included) in cash
335
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
for every 10 shares held by shareholders, totally 52,229,894.05 Yuan distributed in total (tax included). Total
share capital of the Company has no changes after distribution, the retained profit of the parent company
amounted as 893,677,967.36 Yuan, rests of the retained profit will carry-over for distribute in later years.
The aforesaid pre-plan has been deliberated and approved by the 36th session of 9th BOD, and ready for
approval from the shareholders general meeting
3. Major sales re turn : Nil
4. Other than the above mentioned events, the Company have no other events occurred after balance sheet
date.
XVI. Other significant matters
1. Correction o f p re vio us period s and in flu ence: Nil
2. Debt restru ctu ring: Nil
3. Assets rep lace ment: Nil
4. P ension p lan : Nil
5. Discon tinu ing ope ra tion: Nil
6. Branch in formation
In 10 thousand Yuan
Refrigerator Small
, Marketin Sales in
Air-conditi home Other
Item freezer Total
oner g branch
Washing appliances
machine
Operation income 907,428.73 632,921.97 59,528.29 104,279.83 31,254.49 80,088.02 1,655,325.29
Including: foreign
847,688.54 632,693.49 59,527.08 104,149.10 11,267.08 1,655,325.29
trade income
Income from
transactions between 59,740.19 228.48 1.21 130.74 19,987.40 80,088.02
divisions
Operation income 899,621.91 644,681.10 58,609.48 101,896.28 28,356.94 79,629.34 1,653,536.37
Operation profit 7,806.82 -11,759.13 918.81 2,383.55 2,897.55 458.68 1,788.92
Total assets 1,142,091.37 375,810.76 6,016.22 68,079.16 17,112.40 188,886.55 1,420,223.36
Total liability 638,120.53 251,786.17 19,246.82 50,005.65 7,675.25 57,808.53 909,025.89
Supplementary
information
Depreciation and
19,367.13 10,228.11 14.11 518.98 595.94 -354.24 31,078.51
amortization
336
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Refrigerator Small
, Marketin Sales in
Air-conditi home Other
Item freezer Total
oner g branch
Washing appliances
machine
expenses
Capital expenditure 6,517.11 3,289.07 3.28 152.48 1,107.45 20.9 11,048.49
Non-cash expenses
except for
104,549.46 70,404.62 1,632.54 5,802.42 4,016.84 -458.59 186,864.47
depreciation and
amortization
7. Other major transactions and events shows impact on investor‘s decision-making: Nil
XVII. Notes to main i tems of f inancial statement of parent company
1. Note receivable
(1) Category of note receivable
Amount at year-end
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal
1,006,525,937.93 86.22% 3,514,443.05 0.35% 1,003,011,494.88
bad debt provision by single item
Including: current payment with
965,981,524.72 82.75% 965,981,524.72
related party
Account receivable with letter of
37,029,970.16 3.17% 37,029,970.16
credit
Account receivable with single minor
amount but withdrawal single item 3,514,443.05 0.30% 3,514,443.05 100.00%
bad debt provision
Account receivable withdrawal bad
160,872,283.13 13.78% 5,320,388.68 3.31% 155,551,894.45
debt provision by portfolio
Including: account receivable of
390,215.80 0.03% 390,215.80
engineering customers
Receivables other than engineering
160,482,067.33 13.75% 5,320,388.68 3.32% 155,161,678.65
customers
Total 1,167,398,221.06 100.00% 8,834,831.73 0.76% 1,158,563,389.33
(Continued)
Category Amount at year-begin
337
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal bad
850,209,430.95 80.44% 3,054,598.79 0.36% 847,154,832.16
debt provision by single item
Including: current payment with related
798,250,556.57 75.53% 798,250,556.57
party
Account receivable with letter of credit 45,978,287.54 4.35% 45,978,287.54
Account receivable with single minor
amount but withdrawal single item bad 5,980,586.84 0.57% 3,054,598.79 51.08% 2,925,988.05
debt provision
Account receivable withdrawal bad debt
206,713,269.30 19.56% 6,098,978.15 2.95% 200,614,291.15
provision by portfolio
Including: account receivable of
engineering customers
Receivables other than engineering
206,713,269.30 19.56% 6,098,978.15 2.95% 200,614,291.15
customers
Total 1,056,922,700.25 100.00% 9,153,576.94 0.87% 1,047,769,123.31
1) Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minor
single receivables, and withdrawal bad debt provision by combination shows no risk characteristic of the
receivables, 3 clients involved.
2) Account receivable withdrawal bad debt provision by portfolio
A. Account receivable of engineering customers
Balance at year-end
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included) 147,915,548.67 1,479,155.49 1.00%
Over 3 months and within 6 months (6 months
4,489,095.54 448,909.55 10.00%
included)
Over 6 months and within one year (One year
2,833,508.10 566,701.62 20.00%
included)
Over one year - within 2 years (2 years
4,740,761.94 2,370,380.97 50.00%
included)
Over 2 years - within 3 years (3 years included) 239,560.14 191,648.11 80.00%
Over 3 years 263,592.94 263,592.94 100.00%
Total 160,482,067.33 5,320,388.68
B. Receivables other than engineering customers
338
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included)
Over 3 months and within 6 months (6
335,925.80 0.00%
months included)
Over 6 months and within one year (One year
54,290.00 0.00%
included)
Over one year - within 2 years (2 years
included)
Over 2 years - within 3 years (3 years
included)
Over 3 years
Total 390,215.80
(2) By account age
Item Balance at year-end
Within 3 months (3 months included) 1,062,415,118.17
Over 3 months and within 6 months (6 months included) 58,046,694.55
Over 6 months and within one year (One year included) 19,309,838.82
Over one year - within 2 years (2 years included) 16,793,370.17
Over 2 years - within 3 years (3 years included) 8,401,216.41
Over 3 years 2,431,982.94
Total
1,167,398,221.06
(3) Account receivable bad debt reserves
Bad debt provision has 2,566,826.04 Yuan accrual in Current Year; no trade receivables written-off in
previous year was recovered this year.
(4) Account receivable actually written-off in Current Year
Item Written-off amount
Account receivable written-off 2,885,571.25
(5) In Current Year, top five receivables collected by arrears party amounting to RMB 913,933,567.63 in
total, accounted for 78.29% of the receivables at balance of Current Year-end, the bad debt provision
accrual correspondingly amounting to RMB 0.00 at year-end balance.
(6) Account receivable terminated recognization due to the transfer of financial assets: nil
339
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No assets and liability transfer Account receivable and continues to involve at year-end.
2. Other account receivable
Item Balance at year-end Balance at year-begin
Interest receivable 7,880,186.85 2,653,712.36
Dividend receivable 661,434.48
Other account receivable 33,423,018.09 180,187,618.84
Total 41,964,639.42 182,841,331.20
2.1 Interest receivable
(1) Category of interest receivable
Item Balance at year-end Balance at year-begin
Interest receivable from time deposit 7,880,186.85 1,892,948.46
Income receivable from financial products 760,763.90
Total 7,880,186.85 2,653,712.36
(2) Major overdue interest: nil
2.2 Dividend receivable
(1) Category of dividend receivable
Item Balance at year-end Balance at year-begin
Huishang Bank Corporation Limited 661,434.48
(2) Major dividends receivable with account age over 1 year: Nil
2.3 Other account receivable
(1) Category of other account receivable
Nature Bookbalance atyear-end Bookbalance atyear-begin
Related party in consolidation statement 4,126,498.15 160,930,695.50
Related party not in consolidation statement 500,000.00 500,000.00
Loans of employee‘s pretty cash 6,014,409.39 5,779,671.00
Cash deposit 1,010,000.00 636,260.00
Export rebate 21,650,454.61 12,294,910.68
Other 133,182.08 80,102.08
Total 33,434,544.23 180,221,639.26
(2) Other account receivable bad debt reserves
340
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
First stage Second stage Third stage
Expected credit loss
Expected credit loss
Bad debt reserves for the whole Total
Expected credit loss for the whole
duration (credit
in next 12 months duration (no credit
impairment has
impairment)
occurred)
Balance as at 1 Jan. 2019 34,020.42 34,020.42
Book balance of Other
account receivable in Current — — —
Year as at 1 Jan. 2019
--Transfer to the second stage
-- Transfer to the third stage
-- Reversal to the second
stage
-- Reversal to the first stage
Provision in Current Year -22,494.28 -22,494.28
Reversal in Current Year
Conversion in Current Year
Write off in Current Year
Other change
Balance as at 31 Dec. 2019 11,526.14 11,526.14
(3) By account age
Account age Balance at year-end
Within 3 months (3 months included) 25,719,157.43
Over 3 months and within 6 months (6 months included) 638,550.80
Over 6 months and within one year (One year included) 1,206,391.20
over one year-within two years (2 years included) 1,210,156.85
Over 2 years - within 3 years (3 years included) 777,511.88
Over 3 years 3,882,776.07
Total
33,434,544.23
(4) No actual verification of other receivables in Current Year
(5) Top 5 other account receivable has RMB 26,819,296.19 in total, a 80.21% in total account receivable at
period-end, the bad debt provision accrual correspondingly amounting to RMB 0.00 at year-end balance.
(6) No other account receivable involved government subsidies at year-end.
341
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
342
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
3. Long-term equity investments
(1) Classification of long-term equity investments
Balance at year-end Balance at year-begin
Item
Book balance Impairment loss Book value Book balance Impairment loss Book value
Investment in subsidiaries:
ZhongkeMeilingCryogenicTechnologyCo., Ltd. 42,652,000.00 42,652,000.00 42,652,000.00 42,652,000.00
Mianyang Meiling Refrigeration Co.,
95,000,000.00 95,000,000.00 95,000,000.00 95,000,000.00
Ltd.
Hefei Meiling Electric Marketing Co.,
54,900,000.00 54,900,000.00 54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co.,
169,856,419.37 169,856,419.37 169,856,419.37 169,856,419.37
Ltd.
Sichuan Changhong Air-conditioner
955,600,437.79 955,600,437.79 955,600,437.79 955,600,437.79
Co., Ltd.
Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95 90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 48,128,000.00 48,128,000.00 48,128,000.00 48,128,000.00
Meiling CANDY Washing Machine
60,000,000.00 25,082,892.26 34,917,107.74 60,000,000.00 60,000,000.00
Co., Ltd.
Hefei Meiling Wulian Technology Co.,
6,000,000.00 6,000,000.00
Ltd.
Investment in associates:
Hefei Xingmei Assets Management
8,554,613.73 8,554,613.73 9,420,099.27 9,420,099.27
Co., Ltd.
Sichuan Zhiyijia Network Technology
47,831,474.41 47,831,474.41 17,803,986.55 17,803,986.55
Co., Ltd.
Total 1,771,955,007.25 73,210,892.26 1,698,744,114.99 1,736,793,004.93 1,736,793,004.93
343
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(2) Investment in subsidiaries
Balance at Increased in Current Decreased in Current Provision forimpairment Ending balance of
Invested enterprise Balance at year-end
year-begin Year Year losses impairment
Zhongke Meiling Cryogenic Technology
42,652,000.00 42,652,000.00
Co., Ltd.
Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00
Hefei Meiling Electric Marketing Co.,
54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co., Ltd. 169,856,419.37 169,856,419.37
Sichuan Changhong Air-conditioner Co.,
955,600,437.79 955,600,437.79
Ltd.
Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 48,128,000.00 48,128,000.00 48,128,000.00 48,128,000.00
Meiling CANDY Washing Machine Co.,
60,000,000.00 60,000,000.00 25,082,892.26 25,082,892.26
Ltd.
Hefei Meiling Wulian Technology Co.,
6,000,000.00 6,000,000.00
Ltd.
Total 1,709,568,919.11 6,000,000.00 1,715,568,919.11 73,210,892.26 73,210,892.26
(3) Investment in associates
Changes inCurrentYear
Adjustment Ending
Balance at Investment income Other Cash dividend or Balance at
Invested enterprise Additional Negative for other Provision for balance of
year-begin recognizedunder equity profitannounced Other year-end
Investment Investment comprehensive impairment loss impairment
equity change to issued
income
Hefei Xingmei Assets Management Co.,
9,420,099.27 -865,485.54 8,554,613.73
Ltd.
344
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Changes inCurrentYear
Adjustment Ending
Balance at Investment income Other Cash dividend or Balance at
Invested enterprise Additional Negative for other Provision for balance of
year-begin recognizedunder equity profitannounced Other year-end
Investment Investment comprehensive impairment loss impairment
equity change to issued
income
Sichuan Zhiyijia Network Technology Co.,
17,803,986.55 29,087,040.00 940,447.86 47,831,474.41
Ltd.
Total 27,224,085.82 29,087,040.00 74,962.32 56,386,088.14
345
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
4. Operation income and operation cost
Current Year Last Year
Item
Income Cost Income Cost
Main
7,369,698,197.38 6,536,718,301.95 7,634,344,339.63 6,551,561,605.76
business
Other
1,926,750,045.91 1,900,843,201.15 1,892,851,622.99 1,852,134,266.74
business
Total 9,296,448,243.29 8,437,561,503.10 9,527,195,962.62 8,403,695,872.50
(1) Main business - Classified according to product
Current Year Last Year
Item
Operation income Operation cost Operation income Operation cost
Refrigerator, freezer 6,827,193,557.28 6,050,370,840.17 7,303,827,940.51 6,259,064,481.80
Washing machine 123,468,405.74 116,909,031.46 53,438,809.25 47,794,996.27
Small household
appliances and
417,258,605.04 368,071,858.55 276,833,964.23 244,634,846.30
kitchen and
bathroom
Other 1,777,629.32 1,366,571.77 243,625.64 67,281.39
Total 7,369,698,197.38 6,536,718,301.95 7,634,344,339.63 6,551,561,605.76
(2) Main business - Classified according to region
Current Year Last Year
Item
Operation income Operation cost Operation income Operation cost
Domestic 5,194,282,583.68 4,678,505,490.95 5,523,018,463.01 4,746,349,961.02
Overseas 2,175,415,613.70 1,858,212,811.00 2,111,325,876.62 1,805,211,644.74
Total 7,369,698,197.38 6,536,718,301.95 7,634,344,339.63 6,551,561,605.76
Top five clients in sales revenue amounted as RMB 5,135,648,758.20, a 55.24% in total operation
income.
5. Investment income
Item Current Year Last Year
Long-term equity investment income by equity method 74,962.32 -4,601,912.14
Investment income obtained from disposal of tradable financial
-25,456,976.70 -26,793,572.57
assets
Income from financial products 53,507,866.92 73,451,406.79
Long-term equity investment income by cost method 4,590,000.00 2,754,000.00
Investment income of other non-current financial assets during
661,434.48
holding period
346
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Investment income obtained from held of finance asset available for
268,439.33
sales
Total 33,377,287.02 45,078,361.41
XVIII. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for
reporting dated 26 March 2020
347
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Supplementary inf ormation f or f inancial statement
1. Non-recurring gains and losses for this year
(1) Non-recurring gains and losses regulated by Explanation Announcement of Information Disclosure on
Stock Issuance Enterprise No.1—Non-recurring gains/losses (2008) from CSRC:
Item Current Year Note
Gains and losses from disposal of non-current assets -9,537,945.52
Tax refund or mitigate due to examination-and-approval beyond power or without official approval
document or accident
Government subsidy recorded in current gains and losses 103,813,820.02
Capital occupancy expense, collected from non-financial enterprises and recorded in current gains
and losses
Income from the exceeding part between investment cost of the Company paid for obtaining
subsidiaries, associates and joint-ventures and recognizable net assets fair value attributable to the
Company when acquiring the investment
Gains and losses from exchange of non-monetary assets
Gains and losses from assets under trusted investment or management
Various provision for impairment of assets withdrew due to act of God, such as natural disaster
Gains and losses from debt restructuring
Enterprise reorganization expense
Gains and losses of the part arising from transaction in which price is not fair and exceeding fair
value
Current net gains and losses occurred from period-begin to combination day by subsidiaries
resulting from business combination under common control
Gains and losses arising from contingent proceedings irrelevant to normal operation of the
Company
Except for effective hedge business relevant to normal operation of the Company, gains and losses
arising from fair value change of tradable financial assets and tradable financial liabilities, and
27,685,917.00
investment income from disposal of tradable financial assets, tradable financial liabilities and
financial assets available for sale
Switch-back of provision of impairment of account receivable which are treated with separate
1,936,952.67
depreciation test
Gains and losses obtained from external trusted loans
Gains and losses arising from change of fair value of investment real estate whose follow-up
measurement are conducted according to fair value pattern
Affect on current gains and losses after an one-time adjustment according to requirements of laws
and regulations regarding to taxation and accounting
348
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Note
Trust fee obtained from trust operation
Other non-operating income and expenditure except for the aforementioned ones 1,070,165.28
Other gains and losses items complying with definition for non-recurring gains and losses
Subtotal 124,968,909.45
Impact on income tax 15,170,286.77
Impact on minority equity(after taxation) 2,902,482.15
Total 106,896,140.53
2. Return on equity and earnings per share
In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public Listed
Companies: Calculation and Disclosure of Return on Equity and Earnings per Share (revised in 2010), the
weighted average return on equity, basic earnings per share and diluted earnings per share of the Company in
2019 are as follow:
Weighted average Earnings per share/EPS (RMB/Share)
Profit during the report period
return on equity Basic EPS Diluted EPS
Net profit attributable to shareholders of parent company 1.13% 0.0540 0.0540
Net profit attributable to shareholders of parent company after
-1.01% -0.0483 -0.0483
deduction of non-recurring gains and losses
3. Accounting difference under the accounting rules in and out of China: Nil
4. Supplementary information for accounting policy changed: Nil
349
长虹美菱股份有限公司 2019 年年度报告
Section XIII. Documents available for Reference
I. Financial statement carrying the signatures and seals of the Chairman, principal of the accounting
works and person in charge of accounting organ;
II. Original auditing report carrying the seal of CPA and autography and seal of the accountants;
III. Original documents of the Company and manuscripts of public notices that disclosed in the
website designated by CSRC in the report period;
The aforesaid documents are all available at headquarter of the Company. The Company would
provide them timely when CSRC and Shenzhen Stock Exchange require or the shareholders need
consultation according to the regulations and Articles of Association.
Chairman: Wu Dinggang
Changhong Meiling Co., Ltd.
28 March 2020
350
